Westell (WSTL) DEF 14ADefinitive proxy

This Proxy Statement is being furnished in connection with the solicitation by the Board of Directors of Westell Technologies, Inc. (“Westell” or the “Company”) of proxies for the Annual Meeting of Stockholders to be held at the Company's Corporate Headquarters, 750 North Commons Drive, Aurora, Illinois 60504, on September 29, 2020, at 10:00 a.m. Central Daylight Time for the purpose of considering and acting upon the matters specified in the Notice of Annual Meeting of Stockholders accompanying this Proxy Statement.

As permitted by Securities and Exchange Commission (“SEC”) rules, the Company is making this Proxy Statement and its annual report available to its stockholders electronically via the Internet. On or about August 14, 2020, we expect to mail to our stockholders a Notice containing instructions on how to access this Proxy Statement and our annual report and vote online. If you receive a Notice by mail, you will not receive a printed copy of the proxy materials in the mail. Instead, the Notice instructs you on how to access and review all of the important information contained in the Proxy Statement and annual report. The Notice also instructs you on how you may submit your proxy over the Internet. If you receive a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials contained on the Notice.

The Annual Report on Form 10-K for the fiscal year ended March 31, 2020 (“fiscal year 2020”) accompanies this Proxy Statement. If you did not receive a copy of the report, you may obtain one at the Internet website listed above or by writing to the Secretary of the Company at the address of the corporate headquarters, 750 North Commons Drive, Aurora, Illinois 60504.

At the Annual Meeting, seven (7) directors are to be elected to hold office for terms expiring at the next annual meeting of stockholders. Our Bylaws provide that not less than six nor more than 10 directors shall constitute the Board of Directors.

The Board of Directors has no reason to believe that any nominee will be unable or unwilling to serve. If the Transaction is consummated, as described later in this Proxy Statement, the Board intends to revisit whether a non-reporting public company requires seven (7) directors and will evaluate the best Board size after seeing the actual needs of the Board after the Transaction. It is intended that the proxies will be voted for the election of the nominees listed below. In the unforeseen event that any such nominee is unable to serve, proxies may be voted for another nominee designated by the Board of Directors.

The following table sets forth certain information with respect to the nominees, all of whom are current members of the Board of Directors.

Following are some commonly asked questions that may be raised by our stockholders and answers to each of those questions.

Our stockholders will consider and vote upon proposals to amend our certificate of incorporation to effect a 1-for-1,000 reverse stock split of our shares of the Company's Class A Common Stock and Class B Common Stock, followed immediately by a 1,000-for-1 forward stock split of the Company's Class A Common Stock and Class B Common Stock. Stockholders whose shares are converted into less than one share of our common stock as a result of the Reverse Stock Split (meaning they own fewer than 1,000 shares of the Company's Class A Common Stock or Class B Common Stock immediately prior to the effective time of the Transaction - which is the time that the certificate of amendment to our certificate of incorporation to effect the Reverse Stock Split is filed with the Secretary of State of the State of Delaware) will receive $1.48 in cash, without interest, for each share of the Company's Class A Common Stock and Class B Common Stock held by them immediately before the Reverse Stock Split. Stockholders who own 1,000 or more shares of the Company's Class A Common Stock or Class B Common Stock immediately prior to the effective time of the Transaction will continue to own the same number of shares of the Company's Class A Common Stock or Class B Common Stock after the completion of the Transaction.

Additionally, stockholders will also consider and vote upon the election of the seven (7) directors nominated by the Board of Directors, the ratification of the appointment of the independent auditors, and the approval of the compensation of the Company’s named executive officers (“NEOs”), on an advisory basis.

Only holders of record of our common stock as of the close of business on August 5, 2020, which is the Record Date for the Annual Meeting, are entitled to notice of, and to vote at, the Annual Meeting.

At the close of business on the Record Date for the Annual Meeting, there were 12,336,792 shares of Class A Common Stock and 3,484,287 shares of Class B Common Stock outstanding and eligible to vote on the proposals being presented at the Annual

A majority of the outstanding voting power of our Class A Common Stock and Class B Common Stock entitled to vote at this meeting and represented in person or by proxy will constitute a quorum. Abstentions and broker non-votes will be counted as shares present for purposes of determining the presence or absence of a quorum.

Once a quorum has been established, the affirmative vote of the holders of a majority of the voting power of the Class A Common Stock and Class B Common Stock of the Company, voting together as a single class, represented in person or by proxy at the meeting is required to approve Reverse Stock Split and Forward Stock Split and the amendments to Company’s certificate of incorporation necessary to effectuate the Transaction.

The affirmative vote of the holders of a plurality of the voting power of the Class A Common Stock and Class B Common Stock of the Company, voting together as a single class, and represented in person or by proxy at the meeting is required for the election of directors.

The affirmative vote of the holders of a majority of the voting power of the Class A Common Stock and Class B Common Stock of the Company, voting together as a single class, represented in person or by proxy at the meeting is required to ratify the appointment of the independent auditors and to approve the advisory vote on the compensation of the NEOs.

If your broker holds your shares in its name and does not receive voting instructions from you, your broker has discretion to vote those shares on the proposal to ratify the appointment of the independent auditors, which is considered a “routine” matter. However, we believe that the other proposals are “non-routine” and your broker must receive voting instructions from you, as it does not have discretionary voting power for those particular items. Therefore, if you are a beneficial owner and do not provide your broker with voting instructions, your shares may constitute broker non-votes with respect to the Proposal 1,

Proposal No. 2, Proposal No. 3 and Proposal No. 5. Broker “non-votes” will have no effect on the outcome of the election of directors or on Proposal No. 5. Abstentions will have the same effect as votes against Proposal No. 2, Proposal No. 3, Proposal No. 4 and Proposal No. 5, and will have no impact on the election of directors.

In addition, the Board recommends that you vote “FOR” the nominees for director in Proposal No. 1, as well as “FOR” the ratification of the independent auditors in Proposal No. 4 and “FOR” Say-on-Pay in Proposal No. 5.

The Board is soliciting proxies to be voted at the Annual Meeting. The Company pays for the cost of solicitation of proxies. Solicitation is made primarily by mail. Some solicitation may be made by regular Company employees, without additional compensation, by telephone, facsimile, or other means of communication, or in-person.

You may vote your shares via a toll-free telephone number or over the Internet. In addition, if you received proxy materials by mail, sign and date each proxy card you receive and return it in the enclosed envelope prior to the Annual Meeting or attend the meeting and vote in person.

Yes. You may change your proxy instructions at any time before your proxy is voted at the Annual Meeting. Proxies may be revoked by taking any of the following actions:

If your shares are registered differently and are in more than one account, you will receive more than one proxy card. Sign and return all proxy cards to ensure that all your shares are voted.

The primary purpose of the Transaction is to enable the Company to reduce the number of record holders of its Class A Common Stock below 300, which is the level at which SEC public reporting is required. After the Transaction, we intend to cease registration of our Class A Common Stock under the Exchange Act. As a result, effective on and following the termination of the registration of our Class A Common Stock under the Exchange Act, the Company would no longer be subject to the reporting requirements under the Exchange Act, or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act and the listing standards of a national stock exchange. Our Class A Common Stock also would cease to be listed on the NASDAQ Capital Market and would not be eligible for listing on the New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market.

The reasons for the Transaction include:

Effective on and following the termination of the registration of our Class A Common Stock under the Exchange Act, we will no longer have to file annual, quarterly and other reports and documents with the SEC, and our executive officers, directors and 10% stockholders will no longer be required to file reports relating to their transactions in our common stock. Persons acquiring 5% of our common stock will no longer be required to report their beneficial ownership under the Exchange Act. In addition, we will take action to delist our Class A Common Stock from the NASDAQ Capital Market and we will no longer be subject to its rules. Any trading in our common stock after the Transaction and deregistration under the Exchange Act will only occur in privately negotiated sales and potentially on the OTC Pink Open Market, if one or more brokers choose to make a market for our common stock there and complies with applicable regulatory requirements; however, there can be no assurances regarding any such trading.

Yes. The Company’s amended and restated certificate of incorporation provides that shares of common stock of either class shall not be subdivided by a stock split, reclassification or otherwise or combined by reverse stock split, reclassification or otherwise unless, at the same time, the shares of common stock of both classes are proportionately, on a per share basis, so subdivided or combined. Thus, the proposed reverse and forward stock splits apply to both classes of common stock (i.e. Class A Common Stock and Class B Common Stock). However, because there are only four holders who each individually hold over 1,000 shares of Class B Common Stock, the proposed Transaction is not expected to result in the cash out of any shares of Class B Common Stock.

If you own fewer than 1,000 shares of our Class A Common Stock or Class B Common Stock immediately prior to the effective time of the Transaction, you will receive $1.48 in cash, without interest, from us for each pre-Reverse Stock Split share that you own. If you own 1,000 shares or more of our Class A Common Stock or Class B Common Stock immediately prior to the effective time of the Transaction, you will not receive any cash payment for your shares in connection with the Transaction and will continue to hold immediately following the Transaction the same number of shares of our Class A Common Stock or Class B Common Stock as you held before the Transaction.

The Company is the filing person for purposes of this proxy statement.

Our directors and executive officers may have interests in the Transaction that are different from your interests as a stockholder in the Company, and have relationships that may present conflicts of interest. As of August 5, 2020, approximately 4.8% of the issued and outstanding shares of our Class A Common Stock was held by our directors and executive officers, and 100% of the issued and outstanding shares of our Class B Common Stock was held by our directors and executive officers. The shares of Class B Common Stock held by our directors comprise approximately 53% of the voting power of our common stock. The directors and executive officers have each indicated that they intend to vote all of the shares of our common stock held by them (592,222 shares of Class A Common Stock and all shares of Class B Common Stock) “FOR” the Transaction. As a result of this holding, the Transaction is expected to be approved.

Following the Transaction, the equity awards previously granted to participants under the Company’s equity plans will effectively continue in effect.

Our directors and executive officers hold restricted stock units and options to acquire shares of our Class A Common Stock (see “Compensation of Directors” and “Executive Compensation - Outstanding Equity Awards at Fiscal Year-End” in this proxy statement for additional information). These restricted stock units and stock options will remain outstanding after the Reverse

Stock Split. The Transaction will not affect the restricted stock units and stock options as they will remain outstanding after the Transaction.

Upon the effectiveness of the Transaction, the aggregate number of shares of our Class A Common Stock and Class B Common Stock owned by our directors and executive officers will remain the same and the ownership percentage of the shares of our voting stock held by our directors and executive officers is expected to increase by approximately 13% as a result of the reduction of the number of shares of our common stock outstanding.

The Forward Stock Split is not necessary for us to reduce the number of holders of record of our shares of common stock and to deregister our shares of Class A Common Stock under the Exchange Act. However, we have determined that it is in the best interests of our stockholders to effect the Forward Stock Split to ease administrative matters and avoid an unusually high stock price after the Transaction, to facilitate trading of the shares held by Continuing Stockholders either in private transactions or potentially on the OTC Pink Open Market, to mitigate any loss of liquidity in our shares of common stock that may result from the Reverse Stock Split and to avoid the administrative burden and cost associated with cashing out fractional shares of Continuing Stockholders.

If you hold fewer than 1,000 shares of our Class A Common Stock in “street name,” your broker, bank or other nominee is considered the stockholder of record with respect to those shares. It is possible that the bank, broker or other nominee also holds shares for other beneficial owners of our Class A Common Stock and that it may hold 1,000 or more total shares. Therefore, depending upon their procedures, they may not be obligated to treat the Transaction as affecting beneficial holders’ shares. We intend to treat stockholders holding our Class A Common Stock in street name in the same manner as record holders. Prior to the Transaction, we will conduct an inquiry of all brokers, banks and other nominees that hold shares of our Class A Common Stock in street name, ask them to provide us with information on how many shares held by beneficial holders will be cashed out, and request that they effect the Transaction for those beneficial holders. However, these banks, brokers and other nominees may have different procedures than registered stockholders for processing the Transaction. Accordingly, if you hold your shares of Class A Common Stock in street name, we encourage you to promptly contact your bank, broker or other nominee.

We may not have the information to compare your holdings in two or more different brokerage firms. As a result, if you hold more than the minimum number of shares, you may nevertheless have your shares cashed out if you hold them in a combination of accounts in several brokerage firms. If you are in this situation and desire to remain a stockholder of the Company after the Transaction, we recommend that you combine your holdings in one brokerage account or become a record holder prior to the effective time of the Transaction. You should be able to determine whether your shares will be cashed out by examining your brokerage account statements to see if you hold more than the minimum number of shares in any one account. To determine the Transaction’s effect on any shares you hold in street name (and possible payment of the cash consideration), you should contact your broker, bank or other nominee.

If you own fewer than 1,000 shares of our Class A Common Stock before the Transaction, the only way you can continue to be a stockholder of the Company after the Transaction is to purchase, prior to the effective time of the Transaction, sufficient additional shares to cause you to own a minimum of 1,000 shares of Class A Common Stock at the effective time of the Transaction. However, given the historically limited liquidity in our stock, we cannot assure you that any shares will be available for purchase and thus there is a risk that you may not be able to purchase sufficient shares to achieve or exceed the required 1,000 shares. In this instance, you would no longer remain a stockholder after the effective time of the Transaction.

If you own 1,000 or more shares of our common stock before the Transaction, you can only receive cash for all of your shares if, prior to the effective time of the Transaction, you reduce your stock ownership to fewer than 1,000 shares by selling or otherwise transferring shares. However, we cannot assure you that any purchaser for your shares will be available.

Yes. The Transaction cannot occur without the requisite approval of the stockholders at the Annual Meeting or if the Board decides not to proceed, even after getting stockholder approval.

Assuming that we have fewer than 300 record holders of our Class A Common Stock after the Transaction, we expect to file applicable forms with the SEC to deregister our shares of Class A Common Stock under the federal securities laws and to delist our shares from the NASDAQ Capital Market. Upon the effectiveness of those filings, the Company would no longer be subject to the reporting and related requirements under the federal securities laws that are applicable to public companies and NASDAQ Capital Market rules applicable to listed companies. We will also no longer be subject to the provisions of the Sarbanes-Oxley Act and other regulations applicable to public reporting companies. In addition, Cashed Out Stockholders will no longer have a continuing interest as stockholders of the Company and will not share in any future increase in the value of the Company. Our Class A Common Stock also would cease to be listed on the NASDAQ Capital Market and would not be eligible for listing on the New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market. Any trading in our Class A Common Stock after the Transaction and deregistration under the Exchange Act will occur only in privately negotiated sales and potentially on the OTC Pink Open Market, if one or more brokers choose to make a market for our common stock there and complies with applicable regulatory requirements; however, there can be no assurances regarding any such trading.

If the Transaction is not approved, the Company would continue to be subject to the reporting requirements under the Exchange Act, and to other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act and the listing standards of a national stock exchange. Our Class A Common Stock also would continue to be listed on the NASDAQ Capital Market, another stock exchange or the OTC. If the Transaction is not approved or does not occur, we expect to continue to operate our business as presently conducted.

If the Transaction is approved by the stockholders, the Board of Directors may determine not to proceed with the Transaction if they believe that proceeding with the Transaction is not in the best interests of the stockholders. If the Board of Directors determines to not proceed with the Transaction, we expect to continue to operate our business as presently conducted.

If you are not subject to any special rules that may be applicable to you under federal tax laws, then generally, a Cashed Out Stockholder that receives cash for their shares as a result of the Transaction will recognize a capital gain or loss for United States federal income tax purposes. A Continuing Stockholder who does not receive cash for their shares as a result of the Transaction will not recognize any gain or loss for United States federal income tax purposes. We are not providing any tax advice and urge you to consult with your personal tax advisor with regard to the tax consequences to you of the Transaction.

No. After the Transaction is completed, we will send instructions on how to receive any cash payment to which you may be entitled.

Since we do not know how many record and beneficial holders of our common stock will be Cashed Out Stockholders, we do not know the exact cost of the Transaction. However, based on information that we have received as of June 1, 2020 from our transfer agent, Broadridge, with regard to the size of holdings of those stockholders who may hold shares in “street name,” as well our estimates of other Transaction expenses, we believe that the total cash requirement of the Transaction to the Company will be approximately $8.1 million. This amount includes approximately $7.8 million needed to cash out fractional shares, and approximately $300,000 of legal, accounting, and financial advisory fees and other costs to effect the Transaction. The actual amounts paid for costs and the cash out of fractional shares will likely vary. This total amount could be larger or smaller depending on, among other things, the number of fractional shares that will be outstanding after the Transaction as a result of purchases, sales and other transfers of our Class A Common Stock and Class B Common Stock of the Company by our stockholders.

No. Under Delaware law, our certificate of incorporation and our bylaws, no appraisal or dissenters’ rights are available to our stockholders who vote against (or abstain from voting on) the Transaction.

A Special Committee of the Company’s Board of Directors comprised solely of independent directors (the “Special Committee”) has unanimously approved and the Company’s Board of Directors (the “Board of Directors” or the “Board”) has approved amendments to the Company’s certificate of incorporation to effect a 1-for-1,000 reverse stock split of the Company's Class A Common Stock and Class B Common Stock, both with a par value $0.01 per share (collectively referred to herein as the “common stock”) (the “Reverse Stock Split”), followed immediately by a 1,000-for-1 forward stock split of our common stock (the “Forward Stock Split,” and together with the Reverse Stock Split, the “Transaction”), as part of the Company’s plan to terminate the registration of (or “deregister”) the Company’s Class A Common Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and suspend the Company’s duty to file periodic reports and other information with the Securities and Exchange Commission (the “SEC”) under Section 13(a) thereunder, and to delist the Company’s Class A Common Stock from the NASDAQ Capital Market.

Stockholders owning fewer than 1,000 shares immediately prior to the effective time of the Reverse Stock Split, whom we refer to as “Cashed Out Stockholders,” will receive $1.48 in cash, without interest, for each share held at the effective time of the Reverse Stock Split (the “effective time”), and they will no longer be stockholders of the Company.

Stockholders who own 1,000 or more shares immediately prior to the effective time, whom we refer to as “Continuing Stockholders,” will not be entitled to receive any cash for their fractional share interests resulting from the Reverse Stock Split, if any. The Forward Stock Split that will immediately follow the Reverse Stock Split will reconvert whole shares and fractional share interests held by the Continuing Stockholders back into the same number of shares of the Company's Class A Common Stock and Class B Common Stock they held immediately before the effective time. As a result, the total number of shares of the Company's Class A Common Stock and Class B Common Stock by a Continuing Stockholder will not change.

Although both the Reverse Stock Split and the Forward Stock Split will be voted on separately, the Company will not effect either the Reverse Stock Split or the Forward Stock Split unless the proposals to approve the Reverse Stock Split and the Forward Stock Split are each approved by stockholders. Even if the proposals are approved by our stockholders, the Board

The primary purpose of the Transaction is to enable the Company to reduce the number of record holders of its Class A Common Stock below 300, which is the level at which SEC public reporting is required. After the Transaction, we intend to cease registration of our Class A Common Stock under the Exchange Act. As a result, effective on and following the termination of the registration of our Class A Common Stock under the Exchange Act, the Company would no longer be subject to the reporting requirements under the Exchange Act, or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act and those required by the listing standards of a national stock exchange. Our Class A Common Stock also would cease to be listed on the NASDAQ Capital Market and would not be eligible for listing on the New York Stock Exchange or the NASDAQ Stock Market.

The Special Committee and the Board have determined that the costs of being a public reporting company outweigh the benefits thereof and, thus, it is no longer in the best interests of our stockholders, including our unaffiliated stockholders (consisting of stockholders other than our executive officers, directors and stockholders who own more than 10% of our outstanding common stock), for us to remain a public reporting company. The Transaction is intended to eliminate the SEC reporting requirements associated with being a public reporting company.

Our principal reasons for proposing the Transaction are the following:

The Board of Directors and management believe the Company’s revenue, scale of operations and profitability are too small to attract interest from institutional investors or market analysts, and therefore have been an obstacle to enhancing stockholder value. In response, the Company has actively pursued for several years initiatives to increase its scale and profitability. The Company pursued acquisitions to gain size; however, those acquisitions would not have been accretive and were deemed too expensive, so the Company ceased its efforts. There have also been internal efforts to increase size through organic growth, including new product development. However, given the Board’s view of the extent of increased scale and profitability needed to enhance stockholder value, it is unlikely that Westell will be able to grow fast enough to attract significant institutional investors and market analysts in the next several years.

Therefore, after years of persistent effort, we have concluded that our status as a public reporting and NASDAQ-listed company is not an advantage to the Company and/or its stockholders, nor do we expect it ever will be. Rather, our Board has concluded that the Company realizes very few of the traditional benefits of such status, yet incurs all of the significant annual expenses and indirect costs associated with being a public reporting and NASDAQ-listed company. For perspective, consider that management has estimated the average direct costs of being public are approximately $900,000 annually, which is a significant operating expense for a company of our size. Eliminating this annual expense has the potential to move the Company closer to profitability and management believes this step is necessary to be able to achieve profitability in the near future. Without these public company costs, in the view of the Board, the Company would be stronger and better able to potentially enhance stockholder value over the long-term.

Based on the foregoing and as further described in this proxy statement, the Special Committee and our Board has determined that the Transaction is in the best interests of all of the Company’s stockholders. Ceasing to be a public reporting company (“going dark”) has the potential to give the Company an ongoing cost structure befitting its current and foreseeable scale of operations and will enable management to have an increased focus on core operations. Pursuant to the Reverse Stock Split, smaller stockholders will have an opportunity to obtain a premium value for their shares via a cash-out of fractional shares and larger stockholders will retain their holdings in the Company, which will no longer be encumbered by the expenses and burdens of a public reporting company. Further, the Special Committee determined that 1-to-1,000 was also the best ratio to allow the Company to go dark and to retain cash reserves to execute on its business plan, given that the Company did not believe it could obtain a commercially reasonable loan while having net losses from operations. Below is a further description of the background to the Transaction.

On March 17, 2020, the Board met and reviewed the background on the NASDAQ maintenance listing standards and discussed strategic alternatives for the Company such as a reverse stock split (if required to maintain compliance with NASDAQ

On March 27, 2020, we received a notification (the "Notice") from the Listing Qualifications Department of The NASDAQ Stock Market that the bid price for the Company’s Class A Common Stock had closed below the minimum $1.00 per share for 30 consecutive trading days in conflict with the NASDAQ rules for continued listing. At the time, NASDAQ gave the Company 180 calendar days, or until September 23, 2020, to regain compliance. Subsequently, due to extraordinary market conditions resulting from the COVID-19 pandemic, NASDAQ tolled the compliance periods for minimum price through June 30, 2020. On July 28, 2020, the Company received a letter from the Listing Qualifications Department of The NASDAQ Stock Market indicating that it had regained compliance with the $1.00 minimum bid price requirement for continued listing on The NASDAQ Capital Market under Listing Rule 5500(a)(2). The Company regained compliance with the NASDAQ's requirements when the closing bid price for the Company's Class A Common Stock was at or above $1.00 for ten consecutive days.

On April 6, 2020, a strategic options meeting of the Board of Directors was held to review additional information on the going dark alternative. The Board reviewed the materials including the going dark process, the projected costs of a transaction, the estimated annual cost savings, and the advantages and disadvantages of such a transaction. Management estimated at that time the costs of proceeding with the Transaction in the range of $250,000 to $375,000, depending upon the number of advisors the Special Committee decided to retain. The management team estimated the benefits, which could take some time to be achieved at over $900,000 annually. These savings include reduced employee staffing ($250,000), reduced fees for our independent auditor ($170,000), reduced software and SEC filing costs ($50,000), lower director fees after potentially reducing the Board size and/or its compensation at some point ($70,000), Sarbanes Oxley compliance ($50,000), lower D&O insurance costs ($75,000), potentially no longer needing a Compensation Committee consultant ($7,500), lower legal fees ($125,000), elimination of NASDAQ fees ($55,000), lower annual meeting costs and investor relations costs (up to $50,000) and lower press release costs (up to $6,000). Management referenced that the Company officers also spend a considerable amount of time and effort on public reporting and added that this approach means to reduce or eliminate the costs may assist with making the Company profitable.

At this meeting, after discussing the foregoing, the Board determined to establish the Special Committee with the mandate and authority to evaluate and develop the terms of such a going dark transaction proposal, including the appropriate reverse stock split ratio and cash-out value for fractional shares, as well as the other terms of any transaction, and to make a recommendation to the Board at a subsequent meeting. On April 6, 2020, the Board appointed the following three independent and disinterested members to serve on the Special Committee: Directors Mark A. Zorko (chair), Scott C. Chandler, and Cary B. Wood. In connection with its mandate, the Special Committee was subject to no restrictions and was expressly authorized to hire financial and legal advisors as it saw fit.

During April 2020, the Special Committee interviewed three different investment banks to provide it with a fairness opinion regarding the cash-out value to be used for fractional shares in a reverse stock split and to provide related financial advisory services. On April 22, 2020, the Special Committee selected Emory & Co, LLC (“Emory”) to serve as its financial advisor. This decision was based on Emory’s professional reputation, its prior experience with similar “going dark” transactions and the negotiated fee for the services. The Special Committee also engaged Bodman PLC (“Bodman”) to serve as its independent

On April 29, 2020, the Special Committee and representatives from Emory and Bodman had a telephonic call to discuss preliminary matters related to a valuation analysis of the Company. During this call, various valuation methodologies were discussed, including historical stock trading prices, comparable company analysis, comparable transaction analysis, a leveraged buyout valuation model and a discounted cash flow analysis based on internal management forecasts. During the Special Committee meeting, management presented information on the Company’s historical federal tax net operating losses which total $137 million and expire beginning in March 2022. Management explained the Internal Revenue Service (“IRS”) tax rules which limit the use of net operating losses if the Company repurchases a certain amount of shares and the Special Committee discussed with management who indicated that a reverse stock split of 1,000 or less is expected to permit the Company to retain the utilization of its net operating losses. The federal net operating losses total approximately $137 million (but are fully reserved and the value of which will depend upon the Company generating taxable income prior to their expiration) and would be a possible asset for the Company and indirectly the continuing stockholders who remain as stockholders in the Company after the proposed Transaction.

On May 6, 2020, the Special Committee had a telephonic call to discuss the initial forecasts and projections provided by management of the Company with representatives from Emory.

On May 13, 2020, the Special Committee held another telephonic meeting with representatives from Emory and Bodman to further discuss (1) Emory’s preliminary financial analysis, (2) the considerations to be taken into account in determining substantive and procedural fairness and (3) a potential going dark transaction timeline.

On May 20, 2020, the Special Committee had a telephonic meeting with representatives from Emory and Bodman to further discuss Emory’s preliminary financial analysis. Bodman also discussed with the Special Committee the fiduciary duties of

directors in considering going dark in conjunction with a reverse stock split or otherwise. The Special Committee considered whether to recommend to the Board additional procedural protections, including requested approval of the Transaction by a majority of the minority stockholders of the Company. The Special Committee decided not to add an additional vote because of the generally low voting turnout of the Company’s stockholders over the past several years, noting the current

On May 27, 2020, the Special Committee held a telephonic meeting with representatives of Emory, Bodman and members of management where the Committee reviewed and discussed a five-year forecast provided by the management team, further considered the appropriate reverse stock split ratio and discussed available liquidity for the stockholders that would not be cashed out.

On each of June 4, 2020, June 8, 2020 and June 11, 2020, the Special Committee held additional telephonic meetings with Bodman and Emory, to review and provide feedback on the draft valuation report prepared by Emory, and review the draft fairness opinion.

On June 16, 2020, the Board met to discuss the Special Committee activities and its initial view on whether to proceed, the price and the appropriate size of the split. The Board ratified the Special Committee’s charter at the June 16, 2020 meeting. The Board reviewed the summary and discussed the preference of maintaining the usability of the Company’s historical tax net operating losses, if possible. Emory representatives presented the financial analysis in support of a suggested $1.48 price and explained its analysis. Directors asked questions and asked the Special Committee to finalize matters.

On June 23, 2020, the Special Committee had a telephonic meeting with representatives from Emory and Bodman to review Emory’s financial analysis and discuss the size of the potential transaction. The Special Committee also discussed factors such as (1) the significant cost-savings realized by not being a NASDAQ-listed and public reporting company, both in terms of direct costs and management time and distraction, (2) the perceived lack of benefit to the Company and its stockholders of being public, (3) the history of low stock prices, low volume and volatile trading, and noncompliance with the NASDAQ minimum closing bid price listing standard and (4) the opportunity to provide smaller stockholders liquidity via the cash-out of fractional shares in a reverse stock split and larger stockholders the opportunity to retain their ownership interest in the Company unencumbered by the high costs of being public. In reviewing, the Special Committee considered whether to proceed with a larger reverse stock split to further reduce the number of stockholders. The Special Committee weighed the possibility of using a greater amount of cash reserves and weighed the advantages of providing the $1.48 price to a greater number of stockholders and considered the likely reduced liquidity options associated with no longer being a public reporting company.

On June 23, 2020, the Special Committee concluded that the best approach was to select the 1,000-to-1 ratio and achieve the objective of allowing the Company to go dark, while expecting to preserve the ability to use the Company’s net operating losses for tax purposes depending on purchases, sales and other transfers of our shares of common stock by our stockholders prior to the effective time of the Transaction and the number of “street name” shares that are actually cashed out in the Transaction.

The Special Committee’s decision in setting the ratio was influenced by the fact that the Company, after completing the Transaction, may, but is not required to, establish a stock repurchase pool for discretionary common stock repurchases if needed or requested by stockholders who desire to sell their stock after the Transaction. The Special Committee concluded that waiting until after the reverse stock split was consummated and the actual cash out of fractional shares completed and then reviewing if liquidity was otherwise available was the better alternative as the repurchase pool could be established when the actual circumstances were then known.

In weighing the advantages and disadvantages, the Special Committee and the Board fully considered and reviewed the terms, purpose, alternatives, effects and disadvantages of the Transaction, and each has determined that the Transaction, taken as a whole, is procedurally and substantively fair to, and in the best interests of, the unaffiliated Cashed Out Stockholders as well as the unaffiliated Continuing Stockholders.

The Special Committee and the Board considered a number of factors in reaching their determinations, including:

The Special Committee and Board of Directors determined not to condition the approval of the reverse stock split on approval by a majority of unaffiliated stockholders.The Special Committee and the Board did not make any special provision in connection with the Transaction to grant stockholders additional votes, access to our corporate files or to obtain counsel or appraisal services at our expense or require an additional vote. The Board determined that these steps were not necessary to ensure the fairness of the Transaction. In particular, the Board determined that such steps would be costly, time consuming and would not provide any meaningful additional benefits. Additionally, the Board believes that this proxy statement, together with our other filings with the SEC, provide adequate information for our stockholders to make an informed decision with respect to the Transaction.

Based on all the factors that had been considered by the Board of Directors at this and at its other meetings and based on the information considered by and the recommendation of the Special Committee, although not relying upon any one factor but considering all factors as a whole, the Board on July 6, 2020 approved and specifically adopted the recommendations of the Special Committee and all factors that the Special Committee took into account in making its recommendations to the Board of Directors. At the meeting, representatives of Emory reviewed the analysis and explained that while much of the work was completed in June, the analytics were still applicable and noted recent market activity and trading was consistent with the data used by Emory. Emory then delivered its fairness opinion. The Board approved matters with all directors, other than Messrs. Penny and Foskett, approving. Messrs. Penny and Foskett abstained noting their ownership stakes and noted that the voting trust would support this proposed Transaction as a stockholder. Thus, a majority of the non-employee directors approved the Proposed Transaction. The Board of Directors, following the delivery of the fairness opinion by Emory, determined the Transaction would be in the best interests of all of the Company’s stockholders, including the stockholders who would be cashed-out in the Transaction and unaffiliated stockholders who would continue as owners of the Company, and approved the Transaction, including the cash-out price of $1.48 and recommended approval of the Transaction to the stockholders of the Company. The Board also retained the right to withdraw its approval of the Transaction, either before or after the vote of stockholders, if the Board of Directors determined that the deregistration transaction was no longer in the best interests of our stockholders. During the meeting, the Board discussed whether to continue the annual stock awards to directors if the Transaction was consummated and discussed moving to an annual cash retainer in the amount of $30,000 and foregoing equity awards following consummation of the Transaction. The Board directed the Compensation Committee to review and evaluate matters if the Transaction is approved.

As described in “DISCUSSION AND SPECIAL FACTORS - Background of the Transaction” above the Company has had a history of discussions with a wide range of industry participants over the years regarding potential strategic transactions. Notwithstanding these efforts, the Company had not been able to generate any significant interest in a viable strategic transaction involving the Company. The prior offers involved offers basically equal to the cash holdings with no value for the operating business or other assets of that Company or involved offers that required financing from parties who were not well

capitalized. The Company had also considered mergers with other small public reporting companies in an effort to scale up and leverage economies of scale. Based on its knowledge of industry participants, advice from financial advisors, past outreach and the Company’s current financial performance, the Board believed continuing to search for strategic alternatives for the Company in its current state was not likely to enhance stockholder value at this time. The Board determined to establish the Special Committee with the authority to develop the terms of a going dark proposal, including the appropriate reverse stock split ratio and cash-out value for fractional shares and to make a recommendation to the Board.

Accordingly, as described below, in making their determination that the Transaction is in the best interests of the Company and its stockholders, the Special Committee and the Board considered other methods of effecting a deregistration transaction, such as an issuer tender offer and an odd-lot tender offer, or maintaining public company status, and also considered maintaining the status quo. When considering the various alternatives to the Transaction, the primary focus was the level of assurance that the selected alternative would result in the Company having fewer than 300 record owners of its Class A Common Stock, thus allowing us to achieve our objective, the time frame within which such alternative could reasonably be expected to be achieved, relative to the other alternatives under consideration, as well as the potential costs of the alternative transactions.

After carefully reviewing all of these alternatives, for the reasons discussed above, the Special Committee unanimously recommended, and the Board approved, the Transaction as the most expeditious and economical way of changing our status from that of a reporting company to that of a non-reporting company.

The Company currently has $0.7 million authorized for repurchases and expects that, once the Transaction is completed, the Company may decide to increase the pool to allow an additional source of liquidity for stockholders desiring liquidity. A portion of the pool may be reserved for repurchases from employee stockholders who retire and desire liquidity. The Board has not acted on creating a larger pool and has not currently established factors that the Board would use in setting such reserves, but anticipates reviewing the need after considering the final results of the Transaction and the Board decided to wait and see if a Pink Sheets market is established for the Company’s Class A Common Stock and whether that provides a reasonable source for liquidity, and the desirability of allocating cash reserves to the anticipated repurchase pool, though the Company can provide no assurances that the Board will take such action.

As a result of the Transaction:

Our Class A Common Stock is currently listed on the NASDAQ Capital Market. To obtain the cost savings we anticipate by no longer preparing and filing annual, periodic and current reports with the SEC, our Class A Common Stock will need to be delisted from the NASDAQ Capital Market. Any trading in our common stock after the Transaction and deregistration under the Exchange Act will only occur in privately negotiated sales and potentially on the OTC Pink Open Market, if one or more brokers chooses to make a market for our common stock there and complies with applicable regulatory requirements.

The OTC Pink Open Market is not a stock exchange and we do not have the ability to list on, or control whether our shares are quoted on the OTC Pink Open Market. The price may be more or less than the current price on the NASDAQ Capital Market. In addition, the spread between the bid and asked prices of our common stock may be wider than on the NASDAQ Capital Market and the liquidity of our shares may be lower. There is no assurance that there will be any OTC Pink Open Market quotations after the Transaction or that, if such quotations begin, they will continue for any length of time.

The Special Committee and the Board considered and reviewed the terms, purpose, alternatives, effects and disadvantages of the Transaction, and each has determined that the Transaction, taken as a whole, is procedurally and substantively fair to, and in the best interests of, the unaffiliated Cashed Out Stockholders as well as the unaffiliated Continuing Stockholders.

The Special Committee and the Board considered a number of factors in reaching their determinations, including:

In weighing the decision, the Special Committee and the Board reviewed the estimated annual costs savings (of approximately $900,000) against the costs of the proposed Transaction (approximately $300,000) and the use of some of the Company’s cash reserves (estimated to be $8.1 million - with $7.8 million slated to be used for the repurchases and the remaining $300,000 for Transaction costs). The Board considered these matters, but could not quantify the other advantages and disadvantages described elsewhere in this proxy statement.

We have not made any special provision in connection with the Transaction to grant stockholders access to our corporate files or to obtain counsel or appraisal services at our expense. The Board determined that these steps were not necessary to ensure the fairness of the Transaction. In particular, the Board determined that such steps would be costly, time consuming and would not provide any meaningful additional benefits. Additionally, the Board believes that this proxy statement, together with our other filings with the SEC, provide adequate information for our stockholders to make an informed decision with respect to the Transaction.

We did not retain an unaffiliated representative to act solely on behalf of our unaffiliated stockholders for the purpose of negotiating the terms of the Transaction or preparing a report covering the fairness of the Transaction. As noted previously, the Transaction does not require the separate approval of stockholders unaffiliated with the Company.

In weighing the advantages and disadvantages, the Special Committee and the Board fully considered and reviewed the terms, purpose, alternatives, effects and disadvantages of the Transaction, and each has determined that the Transaction, taken as a whole, is procedurally and substantively fair to, and in the best interests of, the unaffiliated Cashed Out Stockholders as well as the unaffiliated Continuing Stockholders.

The Special Committee and the Board considered a number of factors in reaching their determinations, including:

The Special Committee and Board of Directors determined not to condition the approval of the reverse stock split on approval by a majority of unaffiliated stockholders.The Special Committee and the Board did not make any special provision in connection with the Transaction to grant stockholders additional votes, access to our corporate files or to obtain counsel or appraisal services at our expense or require an additional vote. The Board determined that these steps were not necessary to ensure the fairness of the Transaction. In particular, the Board determined that such steps would be costly, time consuming and would not provide any meaningful additional benefits. Additionally, the Board believes that this proxy statement, together with our other filings with the SEC, provide adequate information for our stockholders to make an informed decision with respect to the Transaction.

The financial projections are subjective in many respects and thus subject to interpretation. While presented with numeric specificity, they are necessarily based on a variety of estimates and assumptions which, though considered reasonable by the Company’s management, may not be realized, and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control. The financial projections are not indicative of current values or future performance, which may be significantly more favorable or less favorable. The Company cautions that no representations can be made as to the accuracy of these financial projections or to the Company’s ability to achieve the projected results. Some assumptions inevitably will not materialize. Further, events and circumstances occurring subsequent to the date on which these financial projections were prepared may be different from those assumed or, alternatively, may have been unanticipated and, thus, the occurrence of these events may affect financial results in a material and possibly adverse manner. Furthermore, the financial projections do not necessarily reflect current estimates or assumptions Company management may have about prospects for the Company’s business, changes in general business or economic conditions, or

any other transaction or event that has occurred or that may occur and that was not anticipated at the time the financial projections were prepared.

Set forth below is a summary of the material financial analyses presented by Emory to the Special Committee in connection with rendering its opinion. The summary set forth below does not purport to be a complete description of the analyses performed by Emory in this regard. Certain of the summaries of financial analyses include information set forth in tabular format. In order to fully understand the financial analyses used by Emory, the tables must be read together with the text of each

summary. The tables alone do not constitute a complete description of the financial analyses. The preparation of opinions regarding fairness, from a financial point of view, involve various determinations as to the most appropriate and relevant methods of financial analyses and the application of these methods to the particular circumstances, and, therefore, such opinions are not readily susceptible to a partial analysis or summary description. Accordingly, notwithstanding the separate analyses summarized below, Emory believes that its analyses must be considered as a whole and that selecting portions of its analyses and factors considered by it, without considering all of its analyses and factors, or attempting to ascribe relative weights to some or all of its analyses and factors, could create an incomplete view of the evaluation process underlying the Emory opinion.

No company or transaction used in the analyses described below is identical to the Company or the Transaction. Accordingly, an analysis of the results thereof necessarily involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the Transaction or the public trading or other values of the Company or companies to which they are being compared. Mathematical analysis (such as determining the average or median) is not in itself a meaningful method of using selected acquisition or company data. In addition, in performing such analyses, Emory relied on data and information prepared by several publicly available sources, as well as the Company, any of which may or may not prove to be accurate.

Emory is an investment banking firm that is regularly engaged in the valuation of businesses and their securities, including issuing fairness opinions in connection with mergers and acquisitions, reverse stock splits, employees stock ownership plans, corporate planning and other purposes. Emory has received a non-contingent fee of $70,000, plus reimbursement of out-of-pocket expenses, from the Company relating to its services in providing this opinion and related advisory services. Other than with respect to the Transaction, there are no material relationships that existed during the two years prior to the date of this opinion or that are mutually understood to be contemplated in which any compensation was received or is intended to be received as a result of the relationship between Emory any party to the Transaction. In the last five years, there were no other relationships or payments to Emory.

In addition, the Company has agreed to reimburse Emory for its reasonable and documented out-of-pocket expenses (including attorneys’ fees, expenses and disbursements) incurred in connection with, and to indemnify Emory and related persons against certain liabilities arising out of, its engagement, including liabilities arising under the Federal securities laws. Emory may provide financial or other services to the Company in the future and in connection with any such services Emory may receive compensation.

The preparation of the fairness opinion was a complex process and is not necessarily susceptible to partial analysis or summary description. Nevertheless, the following is a brief summary of the fairness opinion, subject to the assumptions, qualifications, and limitations set forth therein, that the cash consideration to be paid in the Transaction is fair, from a financial point of view, to the Company’s unaffiliated stockholders. The opinion of Emory addresses only the fairness, from a financial point of view, of the cash consideration to be paid in the Transaction to the Company’s unaffiliated stockholders. Emory was not requested to opine as to, and its opinion does not address:

Furthermore, no opinion, counsel, or interpretation was intended with respect to matters that require legal, regulatory, accounting, insurance, tax, or other similar professional advice.

In connection with its opinion, Emory made such reviews, analyses, and inquiries as it deemed necessary and appropriate under the circumstances. Among other things, Emory has:

In rendering its opinion, Emory relied upon and assumed, without independent verification, the accuracy and completeness of all data, material, and financial, legal, tax, operating and other information (including, without limitation, the financial statements and related notes thereto of the Company) furnished or otherwise made available to them, discussed with them or reviewed by them, and did not assume responsibility for such information. Emory did not assume any responsibility to perform, and did not perform, an independent evaluation, physical inspection, or appraisal of any of the assets or liabilities (contingent or otherwise) of the Company, and was not furnished with any such valuations or appraisals. Additionally, Emory did not undertake any independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims, or other contingent liabilities, to which the Company is or may be a party or is or may be subject, or of any governmental investigation or any possible unasserted claims or other contingent liabilities to which the Company is or may be a party or is or may be subject. Emory also assumed that the Transaction will be consummated in a timely manner and in accordance with applicable corporate law and the terms described in the draft proxy statement reviewed by it, without any regulatory restrictions, conditions, amendments, or modifications. Emory also assumed in its opinion that the proxy statement will be identical in all material respects to the latest available draft reviewed by Emory; that the Transaction will be consummated in a timely manner and in accordance with the terms set forth in the proxy statement without waiver, modification, or amendment of any material term, condition, or agreement; and that all governmental, regulatory, and other consents and approvals necessary for the consummation of the Transaction will be obtained without any material adverse effect on the Company or on the contemplated benefits of the Transaction.

With respect to the data and discussions relating to the business prospects and financial outlook of the Company, Emory assumed that the financial analyses and forecasts provided to it were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company as to the future financial performance of the Company, and that the Company will perform substantially in accordance with such financial analyses and forecasts. Emory further relied on the assurances of members of senior management of the Company that they are unaware of any facts that would make such business prospects and financial outlooks incomplete or misleading. Emory’s opinion was necessarily based on financial, economic, market, and other conditions as in effect on, and the information made available to it as of, the date of its opinion. Emory did not undertake, and is under no obligation, to update, revise, reaffirm, or withdraw its opinion, or otherwise comment on or consider events occurring after the date of its opinion.

Emory used the following methodologies to determine its estimate of the Company’s enterprise value of $8.5 million plus excess cash. This is equivalent to an equity value of approximately $24.4 million for the Company.

Emory did not use net book value in its analysis as Emory determined the other market value analytics represented a better way to value the Company and book value was regarded as a generally accepted accounting principle concept and the valuation approach used by Emory was preferable and a more relevant approach.

Emory has based their recommendation on the following valuation methodologies:

Emory used the above methodologies to determine a fair value of $1.48 per share for the Class A Common Stock of the Company.

Emory did not use net book value in its analysis as Emory determined the other market value analytics represented a better way to value the Company and book value was regarded as a generally accepted accounting principle concept and the valuation approach used by Emory was preferable and a more relevant approach.

The following is a summary of the material U.S. federal income tax consequences of the Transaction to the Company and its stockholders. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), existing Treasury Regulations promulgated thereunder, published rulings, administrative pronouncements and judicial decisions, any changes to which could affect the tax consequences described herein, possibly on a retroactive basis. This summary only addresses stockholders who hold their shares of our common stock as a capital asset. This summary does not address any state, local, foreign, or the U.S. federal estate or gift, Medicare net investment income, or alternative minimum tax provisions of the Code. No assurance can be given that possible changes in such United States federal income tax laws or interpretations will not adversely affect this summary. This summary is not binding on the Internal Revenue Service (“IRS”).

Except as otherwise noted, the federal income tax consequences to stockholders described below is the same for both affiliated stockholders and unaffiliated stockholders. The following summary does not address all United States federal income tax considerations that may be relevant to particular stockholders in light of their individual circumstances or to stockholders that may be subject to special tax rules, including, without limitation: financial institutions, tax-exempt organizations (including private foundations), insurance companies, dealers in securities, foreign investors, pass-through entities such as partnerships, S corporations, disregarded entities for federal income tax purposes and limited liability companies (and investors therein), holders that received their shares pursuant to the exercise of employee stock options or otherwise as compensation, and investors that hold the shares as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for United States federal income tax purposes, certain former citizens or long-term residents of the United States, and persons for whom our common stock constitutes “qualified small business stock” within the meaning of Section 1202 of the Code or “Section 1244 stock” for purposes of Section 1244 of the Code.

This summary assumes that you are one of the following:

If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) holds common stock, the tax treatment of a partner with respect to the Transaction generally will depend upon the status of the partner and the activities of the partnership. Such partner or partnership is urged to consult its own tax advisor as to the U.S. federal, state, local and foreign income tax consequences of the Transaction.

If you receive cash as a result of the Transaction, but are treated as continuing to own shares of common stock through attribution as described above, you will recognize capital gain or loss for federal income tax purposes equal to the difference between the cash you receive for the shares of common stock and your aggregate adjusted tax basis in those shares, provided that the receipt of cash either is “a complete termination of interest,” “not essentially equivalent to a dividend,” or constitutes a “substantially disproportionate redemption of stock,” as described below. Gain or loss must be calculated separately with respect to each block of shares of common stock exchanged in the Transaction.

For purposes of these percentage ownership tests, you are considered to own common stock owned directly as well as indirectly through the application of the attribution ownership rules described above.

If the receipt of cash in exchange for shares of common stock is not treated as capital gain or loss under any of the above tests, it will be treated first as ordinary dividend income to the extent of the your ratable share of our current and accumulated earnings and profits, then as a tax-free return of capital to the extent of the your aggregate adjusted tax basis in the shares, and any remaining amount will be treated as capital gain. In general, dividends are taxed at ordinary income rates. However, you may qualify for a 20% federal income tax rate on any cash received in the Transaction that is treated as a dividend as described above, if (i) you are an individual or other non-corporate stockholder; (ii) you have held the common stock with respect to which the dividend was received for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date, as determined under the Code; and (iii) you were not obligated during such period (pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property. You should consult with your tax advisor regarding your eligibility for such lower tax rates on dividend income.

Our directors and executive officers may have interests in the Transaction that are different from your interests as a stockholder in the Company, and have relationships that may present conflicts of interest. As of August 5, 2020, approximately 55% of the voting rights associated with the issued and outstanding shares of our common stock was held or controlled by our directors and executive officers. Our directors and executive officers have indicated that they intend to vote all of the shares of our common stock held or controlled by them (592,222 shares of Class A Common Stock and 3,484,287 shares of Class B

Our directors and executive officers hold restricted stock units and options to acquire shares of our Class A Common Stock (see “Compensation of Directors” and “Executive Compensation - Outstanding Equity Awards at Fiscal Year-End” in this proxy statement for additional information). These restricted stock units and stock options will remain outstanding after the reverse stock split. The Transaction will not affect the restricted stock units and stock options as they will remain outstanding after the Transaction.

Penny III, Robert W. Foskett and Patrick J. McDonough, Jr. have the exclusive power to vote over 49% of the votes entitled to be cast by the holders of our common stock. In addition, members of the Penny family who are beneficiaries under this Voting Trust are parties to a stock transfer restriction agreement which prohibits the beneficiaries from transferring any Class B Common Stock or their beneficial interests in the Voting Trust without first offering such Class B Common Stock to the other Penny family members. Certain Penny family members also own or are beneficiaries of trusts that own shares outside of the Voting Trust. As trustees of the Voting Trust and other trusts, Messrs. Penny, Foskett and McDonough, Jr. control over 53% of the stock vote. Consequently, we are effectively under the control of Messrs. Penny, Foskett and McDonough, Jr., as trustees, who can effectively control the election of all of the directors, the Transaction and determine the outcome of most corporate transactions or other matters submitted to the stockholders for approval (including the Transaction).

Robert C. Penny III, Robert W. Foskett and Patrick J. McDonough, Jr., as the Trustees under the Voting Trust, have entered into a Registration Rights Agreement with the Company under which the Trustees have certain rights to require the Company to register the Class A Common Stock into which such shares of Class B Common Stock are convertible for sale under the Securities Act (the "Registration Rights Agreement"). The Registration Rights Agreement grants the Trustees the right to require the Company to file three registration statements on Form S-1 and additional registration statements on Form S-3 covering sales of such shares. In addition, if the Company proposes to register any of its securities for sale under the Securities Act, the Trustees are entitled to notice of such registration and to include their shares in such registration, subject to the right of the participating underwriters to limit the number of shares owned by the Trustees included in such registration. All expenses related to such registration statements, excluding underwriting discounts, will be paid by the Company, and the Company and the Trustees have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act.

The Company, the trustees and the Voting Trust have agreed to terminate the Registration Rights upon consummation of the Transaction.

Based on information dated June 1, 2020 that we have received from our transfer agent, Broadridge, as to holdings of our record holders, and reflecting the distribution of the accounts of our stockholders who hold shares in “street name,” as well our estimates of other Transaction expenses, we believe that the total cash requirement of the Transaction to the Company will be approximately $8.1 million, as described below. This amount includes approximately $7.8 million needed to cash out fractional shares (although this amount could be larger or smaller depending on, among other things, the number of fractional shares that will be outstanding at the time of the Transaction as a result of purchases, sales and other transfers of our shares of common stock by our stockholders, and the number of “street name” shares that are actually cashed out in the Transaction). In addition, the following approximated legal, accounting, and financial advisory fees and other costs will be incurred by the Company to effect the Transaction:

The Company is accountable for paying all of the above expenses.

The Company expects to pay the consideration to be paid to the Cashed Out Stockholders and the costs of the Transaction from the Company’s cash on hand. As of August 10, 2020, the Company had total cash and cash equivalents totaling approximately $21 million and $1.6 million borrowed under the Paycheck Protection Program loans, for which the Company intends to request forgiveness to the extent practicable. None of the proceeds from the Company’s loan under the U.S. Paycheck Protection Program will be used to pay for any part of the proposed Transaction. Instead, the loan proceeds were used to help pay payroll and other permitted expenses.

The Company is not aware of any material governmental or regulatory approval required for completion of the Reverse Stock Split or the Forward Stock Split, other than compliance with the relevant federal securities laws and Delaware law.

There is no ongoing litigation related to the Reverse Stock Split, the Forward Stock Split or the Transaction, nor does the Company have any material litigation.

A majority of the outstanding voting power of our Class A Common Stock and Class B Common Stock entitled to vote at this meeting and represented in person or by proxy will constitute a quorum. Abstentions and broker non-votes will be counted as shares present for purposes of determining the presence or absence of a quorum.

Each share of Class A Common Stock is entitled to one vote and each share of Class B Common Stock is entitled to four votes on each matter to be voted upon at the meeting.

Once a quorum has been established, the affirmative vote of the holders of a majority of the voting power of the Class A Common Stock and Class B Common Stock of the Company, voting together as a single class, represented in person or by proxy at the meeting is required to approve the amendments to Company’s certificate of incorporation necessary to effectuate the Transaction.

Under Delaware law, our certificate of incorporation and our bylaws, no appraisal or dissenters’ rights are available to our stockholders who vote against (or abstain from voting on) the Transaction.

This proxy statement and the other reports that the Company files with the SEC contain forward-looking statements. For this purpose, any statements that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are based on management’s current expectations, and generally can be identified by the use of words such as “believes,” “contemplates,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “can,” “will,” “may,” and other similar expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

These forward-looking statements are subject to a number of risks and uncertainties, and future events and actual results could differ materially from those described in, contemplated by, or underlying these forward-looking statements. These risks and uncertainties include, but are not limited to:

For these reasons, you should not place undue reliance on any forward-looking statements included in this proxy statement. The forward-looking statements included in this proxy statement are made only as of the date of this proxy statement, and the Company expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events of circumstances, except as required by law.

Because the Transaction is a “going private” transaction within the meaning of Rule 13E-3 under the Exchange Act, the forward-looking statements contained in this proxy statement made in connection with the Transaction are excluded from the safe harbor protection provided by the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended.

The name of the Company is Westell Technologies, Inc., a Delaware corporation. Our principal executive offices are located at 750 North Commons Drive, Aurora, Illinois 60504. Our telephone number is (630) 898-2500.

Our Class A Common Stock is quoted on the NASDAQ Capital Market under the symbol “WSTL.” The following table sets forth the high and low sales prices per share of our Class A Common Stock for our two most recent fiscal years as reported on the NASDAQ Capital Market.

Our Class B Common Stock is not publicly traded.

As of August 5, 2020, there were approximately 550 holders of record of the outstanding shares of Class A Common Stock and four holders of record of Class B Common Stock.

We have not made an underwritten public offering of our Class A Common Stock for cash during the three years preceding the date of this proxy statement.

The Company has repurchased shares of our common stock in the past two years. In May 2017, the Board of Directors authorized a share repurchase program whereby the Company may repurchase up to an aggregate of $2.0 million of its outstanding Class A Common Stock (the “2017 authorization”). The 2017 authorization also includes the remaining $0.1 million from the August 2011 authorization. There were 426,283 shares of Class A Common Stock repurchased under the 2017 authorization during the fiscal year ended March 31, 2019, at a weighted average purchase price of $2.43 per share. There were no shares repurchased under the 2017 authorization during the fiscal year ended March 31, 2020, nor have there been any shares repurchased from that date until the date of filing this proxy statement. There was approximately $0.7 million remaining for additional share repurchases under the 2017 authorization as of August 5, 2020.

In fiscal years 2020 and 2019, the Company repurchased 93,039 shares and 62,260 shares of Class A Common Stock, respectively, from employees to satisfy the minimum statutory tax withholding obligations on the vesting of restricted stock units and performance-based restricted stock units. These repurchases, which are not included in the authorized share repurchase programs, had a weighted-average purchase price of $2.06 and $3.18, respectively. The Company repurchased 58.922 shares of Class A Common Stock from employees for these purposes during the period from April 1, 2020, until the date of filing of this proxy statement at a weighted average purchase price of $0.7860.

Information regarding repurchases for the two years prior to the date of filing of this proxy statement is set forth below:

The following table sets forth the beneficial ownership (and the percentages of outstanding shares represented by such beneficial ownership) as of June 30, 2020, of (i) each director and nominee for director, (ii) the current and former

Upon the effectiveness of the Transaction, the aggregate number of shares of our Class A Common Stock and Class B Common Stock owned by our directors and executive officers will remain the same and the ownership percentage of the shares of our voting stock held by our directors and executive officers is expected to increase by approximately 13% as a result of the reduction of the number of shares of our common stock outstanding.

The following table sets forth certain information with respect to each person known by us to be the beneficial owner of five percent or more of either class of the Company’s outstanding common stock, other than Messrs. Penny, Foskett and McDonough whose information is set forth above. The content of this table is based upon the most current information contained in Schedules 13D or 13G filings with the SEC, unless more recent information was obtained.

The following summary of consolidated financial information was derived from our audited consolidated financial statements as of and for each of the years ended March 31, 2020 and 2019. This financial information is only a summary and should be read in conjunction with our historical financial statements and the accompanying footnotes. Please see the information set forth below under the captions “Where You Can Find More Information”.

The following unaudited pro forma consolidated balance sheet as of March 31, 2020, and the unaudited pro forma consolidated statements of operations for the fiscal year ended March 31, 2020, show the pro forma effects of the Transaction. The historical amounts for the fiscal year ended March 31, 2020, were derived from the Company’s audited consolidated financial statements that were included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

The pro forma information below gives effect to the Transaction based on non-recurring expenses incurred and the impact of additional borrowing to effect the Transaction. The Reverse Stock Split assumes that 5,270,000 shares are purchased at a price of $1.48 per share. Pro forma adjustments to the pro forma consolidated balance sheet are computed as if the Transaction had occurred at March 31, 2020, while the pro forma consolidated statements of operations are computed as if the Transaction had occurred at the beginning of the periods.

The pro forma information is not necessarily indicative of what the Company’s financial position or results of operations actually would have been if the Transaction had occurred as of the dates presented, or of the Company’s financial position or results of operations in the future.

The unaudited pro forma financial statements should be read in conjunction with the historical financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

Pursuant to the requirements of the Exchange Act, as amended, the Company is required to submit a proposal to its stockholders for a non-binding advisory vote to approve the compensation of the Company’s NEOs, as disclosed in this Proxy Statement. This proposal, commonly known as a “Say-on-Pay” proposal, gives stockholders the opportunity to express their views on the compensation of our NEOs. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the principles, policies and practices described in this Proxy Statement.

The guiding principles of the Company’s compensation policies and decisions seek to align each executive’s compensation with the Company’s business strategy and the interests of our stockholders while providing incentives to attract, motivate and retain key executives who are important to our long-term success. We structure our programs to discourage excessive risk-taking through a balanced use of compensation vehicles and metrics with a broad goal of delivering sustained growth in long-term stockholder value. Consistent with this philosophy, a significant portion of the total compensation for each of our executives is performance-based and tied directly to the achievement of defined goals, with short-term and long-term compensation provided in cash and forms of equity. The Compensation Committee has full discretion to reduce final payouts for incentive cash compensation. The Compensation Committee and the Board of Directors believe that our compensation design and practices are effective in helping us to achieve our strategic goals.

Accordingly, the Board of Directors recommends that stockholders support the compensation of our NEOs as disclosed in the compensation tables and narrative discussion contained in this proxy statement by approving the following advisory resolution:

Although the say-on-pay vote is advisory and not binding, the Board of Directors and the Compensation Committee will consider our stockholders’ perspectives and will evaluate whether any actions are necessary to address those perspectives. Consistent with past preferences expressed by stockholders, we have determined that we should vote on a say-on-pay proposal annually.

The Board believes that its collective experience, knowledge of the Company and familiarity with the industries in which the Company operates, among other things, places the Board in the most favorable position to determine the optimal leadership structure for the Company. The Board does not have a formal policy regarding the separation of the roles of the Chairman of the Board and Chief Executive Officer (“CEO”), as the Board believes it is in the best interest of the Company to make that determination based on the position and direction of the Company and the membership of the Board. The roles are currently separated, with Kirk R. Brannock serving as the non-executive Chairman of the Board and Timothy L. Duitsman serving as the Company’s President and CEO. In 2017, Mr. Brannock was appointed as the non-executive Chairman of the Board. Mr. Brannock continued in his role of Chairman of the Board while serving as the Company's interim President and CEO from November 2017 through May 2018. In May 2018, the Board of Directors selected a new President and CEO, while Mr. Brannock retained the role of Chairman. While Mr. Brannock served as interim President and CEO, the Board did not appoint a lead independent director given the interim nature of Mr. Brannock's role. The duties of the non-executive Chairman include, among others: chairing meetings of the Board and executive sessions, meeting periodically with the CEO and consulting as necessary with management on current significant issues facing the Company; and facilitating effective communication among the CEO and all members of the Board.

The Board, as a whole and through its committees, has responsibility for the oversight of risk management. The Company’s officers are responsible for the day-to-day management of the material risks faced by the Company, including the identification of risks, assessment of economic consequences and tradeoffs, and plans and processes for management or mitigation of risk, as appropriate. In its oversight role, the Board is responsible for assuring that risk management processes designed and implemented by management are adequate and functioning as designed. The Company strategies for each business unit identify key risks and uncertainties that are reviewed by the Board at least annually, and the Board of Directors receives regular updates from management regarding the status of key risks facing the Company.

In addition to the role of the full Board, committees of the Board each oversee certain aspects of risk management. The Audit Committee oversees risk management related to financial and financial reporting matters, including the Company’s system of internal controls. The Compensation Committee oversees risks related to compensation policies and practices. The Corporate Governance and Nominating Committee is responsible for overseeing risks related to corporate governance matters and the director nomination process.

During fiscal year 2020, the Board of Directors had a standing Audit Committee, a Compensation Committee, and a Corporate Governance and Nominating Committee.

The members of the committees since the beginning of fiscal year 2020 are identified in the following table:

The Board of Directors held nine meetings during fiscal year 2020. Each director attended at least 75% of the aggregate number of meetings held by the Board of Directors and of meetings of Board committees on which he served in fiscal year 2020. Following the regularly scheduled Board meeting sessions, the non-employee independent directors routinely conduct separate executive sessions. The Board is authorized to directly engage outside consultants and legal counsel to assist and advise them, as needed.

The Compensation Committee met six times in fiscal year 2020. In carrying out the Company’s compensation activities, the Compensation Committee is responsible for, among other things, evaluating and setting the compensation for our CEO. Company management is responsible for recommending to the committee the amount of compensation of our other executive officers. On an annual basis, the Compensation Committee approves executive compensation by evaluating base salary, benefits, annual incentive compensation (the “Incentive Plan”) and long-term equity-based incentives. The Compensation Committee reviews recommendations regarding other executive officers and has the authority to approve or revise such recommendations.  The CEO and other members of management do not participate in deliberations relating to their own compensation.  Under its charter, the Compensation Committee may form and delegate authority to subcommittees as it deems appropriate. For fiscal year 2020, the Compensation Committee reviewed and approved all elements of the compensation packages for each of the Company’s executive officers.

Westell management, the Compensation Committee and the Board of Directors view compensation practices as an important element of Enterprise Risk Management.  It is our intention to create incentive structures that reward longer-term, sustainable growth on a profitable basis and that do not encourage inappropriate risk trade-offs and behaviors.  Additionally, we view compensation as an important element in mitigating risks of losing key executives and employees and the concomitant loss of talent and skill required to operate the business.

The Corporate Governance and Nominating Committee considers many factors when considering candidates for the Board of Directors and strives for the Board to be comprised of Directors who have a variety of complementary experiences and backgrounds and who represent the broad interests of stockholders as a whole.

Important individual factors for Board members and candidates include strength of character, mature judgment, specialized expertise, relevant technical skills, diversity, appropriate education, broad-based business acumen, and a solid understanding of

policy setting and strategy assessment. Depending upon the needs of the Board of Directors from time-to-time, certain factors may be weighed more or less heavily by the Corporate Governance and Nominating Committee.

In considering candidates for the Board of Directors, the Corporate Governance and Nominating Committee considers the entirety of each candidate’s credentials and does not have any specific minimum qualifications that must be met by a recommended nominee. However, the Corporate Governance and Nominating Committee believes that members of the Board of Directors should have high ethical and moral standards, experience and expertise that are relevant to the business, knowledge or interest in our business’ industries and technologies, and sufficient time to devote to Board matters. In addition, the Corporate Governance and Nominating Committee considers independence and whether any candidate has potential conflicts of interest or special interests that could impair his or her ability to effectively represent the interests of all stockholders. In the case of Directors being considered for renomination, the Corporate Governance and Nominating Committee will also take into account the Director’s history of attendance at meetings of the Board of Directors or its committees, the Director’s tenure as a member of the Board of Directors, and the Director’s preparation for and contribution to such meetings. In the case of potential nominees, the Corporate Governance and Nominating Committee also considers the individual committee needs and may evaluate candidates in light of requirements and qualifications applicable to each committee, including SEC, stock exchange and other applicable requirements.

Although there is no formal diversity policy, the Corporate Governance and Nominating Committee also considers the diversity of the candidates, and of the Board of Directors as a whole, based on factors such as business and personal background, and potential contributions to the Board of Directors. The Committee and the Board attempt to ensure that the Board of Directors is comprised of individuals with experience in both complementary and differentiated industries, and representing a variety of disciplines, in order to bring diverse business experience, knowledge and perspectives to the Board of Directors.

The Company expects all Board members to attend the annual meeting of stockholders, but from time to time, other commitments may prevent a Director from attending the meeting. Six (6) directors serving at that time attended the most recent annual meeting of stockholders, which was held on September 17, 2019. Robert C. Penny III was unable to attend due

In general, the Board determines whether a board member is independent by following the corporate governance rules of the NASDAQ Capital Stock Market (“NASDAQ”) and the applicable rules of the SEC. Our Board of Directors has determined that each of Messrs. Chandler, Foskett, Penny, Wood and Zorko are “independent” under the NASDAQ and SEC rules. The Board of Directors no longer considers Mr. Brannock to be independent based upon the NASDAQ interpretation which precludes a director from being independent after serving as interim CEO for more than one (1) year. However, the Board of Directors concludes that this relationship has not interfered with Mr. Brannock’s exercise of independent judgment in carrying out his responsibilities as a director, and is helpful. In making independence determinations, the Board also considered the registration rights with respect to the shares of common stock held in the Voting Trust that we have granted to Robert C. Penny III, Robert W. Foskett, and Patrick J. McDonough, Jr., as Trustees of the Voting Trust. Mr. Duitsman is not currently considered to be independent due to his service as the Company’s President and CEO; however, he was determined to be independent from June 2019 when he joined the Board until his appointment as the Company’s President and CEO in September 2019.

The following sets forth certain information with respect to our current executive officers.

SUMMARY COMPENSATION TABLE

The table below summarizes the total compensation earned by each of our NEOs for each of the fiscal years listed.

The table below includes certain information with respect to outstanding equity awards held by each of the NEOs as of March 31, 2020. Messrs. John and Minichiello did not own any outstanding equity awards as of March 31, 2020.

The following tables summarize the estimated value of potential payments to each of our named executive officers under existing contracts, agreements, plans or arrangements assuming the triggering event or events indicated occurred on March 31, 2020.

The following table shows the potential payments to Mr. Duitsman upon termination or in connection with a change in control assuming a March 31, 2020 triggering event.

In the event of termination without cause following a change of control, unvested outstanding equity awards as of the date of termination will become immediately vested, pursuant to their express terms.

The following table shows the potential payments to Ms. Jaynes upon termination or in connection with a change in control assuming a March 31, 2020 triggering event.

Under the terms of Ms. Jaynes’ employment agreement, if we terminate Ms. Jaynes’ employment without cause or if Ms. Jaynes resigns for good reason, she will be entitled to receive as severance one year’s base salary, and continued health benefits at employee rates for one year.

Ms. Jaynes is subject to a non-competition covenant during the term of her employment and for an additional one year period if, following termination of her employment with the Company, she is entitled to receive severance or if the Company elects to pay her severance even if she would not otherwise be entitled to such payments. Ms. Jaynes is subject to a non-solicitation covenant with respect to the Company’s employees for one year following termination of her employment whether or not she is entitled to severance pay.

In the event of termination without cause or for good reason following a change of control, unvested outstanding equity awards as of the date of termination will become immediately vested, pursuant to their express terms.

The following table shows the potential payments to Mr. Swartwood upon termination or in connection with a change in control assuming a March 31, 2020 triggering event.

Under the terms of Mr. Swartwood’s severance agreement, if we terminate Mr. Swartwood’s employment without cause, he will be entitled to receive as severance six months base salary and continued health benefits at employee rates for six months.

Mr. Swartwood is subject to a non-competition covenant during the term of his employment and for an additional one year period if, following termination of his employment with the Company, he is entitled to receive severance or if the Company elects to pay him severance even if he would not otherwise be entitled to such payments. Mr. Swartwood is subject to a non-solicitation covenant with respect to the Company’s employees for one year following termination of his employment whether or not he is entitled to severance pay.

In the event of termination without cause following a change of control, unvested outstanding equity awards as of the date of termination will become immediately vested, pursuant to their express terms.

Mr. John did not have an employment agreement. In the event of termination without cause or for good reason following a change in control of the Company, unvested equity awards held by Mr. John would have become immediately vested.

On August 21, 2019, Mr. John entered into a general release agreement with the Company. Mr. John received two weeks of base salary as severance and a lease buy-out. Mr. John left the company effective August 23, 2019, which resulted in a cash payment of $19,359. Upon termination, he forfeited all unvested equity awards.

Mr. Minichiello did not have an employment agreement with us at the time he terminated employment on August 23, 2019, as his prior employment agreement expired on July 5, 2019. On August 23, 2019, Mr. Minichiello terminated employment with us. Mr. Minichiello forfeited all unvested equity awards upon termination.

Effective April 1, 2020, the annual retainer for all non-employee directors is $20,000, an approximately 26% decrease from the previous annual retainer of $27,000. Effective July 1, 2019, the annual retainer for all non-employee directors was reduced to $27,000, a 25% decrease from the previous annual retainer of $36,000. Annual retainers for committee chairpersons are as follows: Chairman of the Board (if non-employee)-$20,000; Chair of the Audit Committee-$10,000; and Chair of the Compensation Committee-$10,000. Annual retainers for the members of committees are as follows: Member of the Audit Committee-$5,000; and Member of the Compensation Committee-$5,000. There is no separate compensation for meeting attendance. In addition, all directors may be reimbursed for certain expenses incurred in connection with attendance at Board and committee meetings. Directors who are employees of the Company do not receive additional compensation for service as directors. In addition, non-employee directors are eligible to receive awards under the 2019 Omnibus Incentive Compensation Plan. On a director’s initial appointment date, non-employee directors are each granted 2,500 restricted shares with an annual grant thereafter based on a target grant date value of $29,000 to be granted upon election to the Board of Directors at the Annual Meeting of Stockholders, with the award vesting on the first anniversary date of the grant.

If the Transaction is consummated, the Board is considering foregoing the stock awards and moving to a cash retainer and foregoing additional payments to Committee members and/or payments to chairs of Committees or the Board.

The following table provides information as of March 31, 2020, with respect to shares of our Class A Common Stock that may be issued under equity compensation plans.

We do not currently have written policies and procedures with respect to the approval of related-party transactions. Our practice with respect to related-party transactions has been that all transactions between the Company and any related person will be reviewed and approved by the Audit Committee. All proposed related-party transactions are generally reported to senior management, who assist in gathering the relevant information about the transaction, and present the information to the Audit Committee. The Audit Committee then determines whether the transaction is a related party transaction and approves, ratifies, or rejects the transaction.

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our officers and directors and persons who beneficially own more than 10 percent of a registered class of the Company’s equity securities to file reports of ownership and changes in ownership with the SEC. Based on a review of forms filed with the SEC and on written representations from reporting persons, we believe that during fiscal year 2020, all such persons filed on a timely basis all reports required by Section 16(a) of the Exchange Act.

The Audit Committee oversees our financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the system of internal controls. In fulfilling its oversight responsibilities, the Committee reviewed the audited financial statements in the Annual Report on Form 10-K with management, including a discussion of the quality, not just the acceptability, of the accounting principles; the reasonableness of significant judgments; and the clarity of disclosures in the financial statements.

The Audit Committee reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of our accounting principles and such other matters as are required to be discussed with the Committee under the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC. In addition, the Committee discussed with the independent auditors the auditors’ independence from management and the Company, including the matters in the written disclosures required by Rule 3526 of the PCAOB, Communicating with Audit Committees Concerning Independence, and considered the compatibility of non-audit services with the auditors’ independence.

The Audit Committee discussed with our independent auditors the scope and plans for their audit. The Committee meets with the independent auditors, with and without management present, to discuss the results of their examinations, and the overall quality of our financial reporting.

The Audit Committee has reviewed with the Company’s accounting function the evaluation of the Company’s internal controls and the overall quality of the Company’s financial reporting.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form 10-K for the year ended March 31, 2020, for filing with the SEC. The Audit Committee and the Board have also recommended that stockholders ratify the selection of Grant Thornton as our independent auditors for fiscal year 2021.

During fiscal year 2020, management documented, tested and evaluated internal controls pursuant to the requirements of the Sarbanes-Oxley Act of 2002. Management and the internal audit function kept the Audit Committee apprised of our progress. Management has provided the Audit Committee with a report on the effectiveness of internal controls.

The Audit Committee is governed by a charter, which is available in the corporate governance section under Investors on our website at www.westell.com. The Board of Directors has determined that Mr. Wood, Mr. Chandler, and Mr. Zorko each qualify as an “audit committee financial expert” as defined under Regulation S-K and that all audit committee members are “independent” as the term is used in the NASDAQ listing standards applicable to audit committee members.

Respectfully Submitted By:

Audit fees were for professional services rendered in connection with the audit of our annual financial statements set forth in our Annual Reports on Form 10-K, the review of our quarterly financial statements set forth in our Quarterly Reports on Form 10-Q and consents for other SEC filings.

The Audit Committee has considered whether the services provided under other non-audit services are compatible with maintaining the auditor’s independence and has determined that such services are compatible. The Audit Committee has adopted policies and procedures for pre-approving all non-audit work performed by the external auditors. The Committee will annually pre-approve services in specified accounting areas. The Committee also annually approves the budget for the annual generally accepted accounting principles (GAAP) audit.

A stockholder proposal to be included in our Proxy Statement and presented at the 2021 Annual Meeting must be received at our executive offices, 750 North Commons Drive, Aurora, Illinois 60504, no later than April 16, 2021, for evaluation as to inclusion in the Proxy Statement in connection with such meeting.

Stockholders wishing to nominate a director or bring a proposal before the 2021 Annual Meeting (but not include the proposal in our Proxy Statement) must cause written notice of the proposal to be received by the Secretary of the Company at our principal executive offices in Aurora, Illinois, no later than July 31, 2021, as well as comply with certain provisions of the Company’s bylaws. In order for a stockholder to nominate a candidate for director, such notice must describe various matters regarding the nominee and the stockholder giving the notice, including such information as name, address, occupation and shares held. In order for a stockholder to bring other business before a stockholders meeting, the notice for such meeting must include various matters regarding the stockholder giving the notice and a description of the proposed business. These requirements are separate from and in addition to the requirements a stockholder must meet to have a proposal included in our Proxy Statement.

The Transaction is a “going private” transaction subject to Rule 13e-3 of the Exchange Act. The Company has filed a Rule 13e-3 Transaction Statement on Schedule 13E-3 under the Exchange Act with respect to the Transaction. The Schedule 13E-3 contains additional information about the Company. Copies of the Schedule 13E-3 are available for inspection and copying at the principal executive offices of the Company during regular business hours by any interested stockholder of the Company, or a representative who has been so designated in writing, and may be inspected and copied, or obtained by mail, by written request directed to Jeniffer L. Jaynes, the Company’s Corporate Secretary, at the following address: 750 North Commons Drive, Aurora, Illinois 60504.

The Board of Directors knows of no other business that may come before the annual meeting. However, if any other matters are properly presented to the meeting, the persons named in the proxies will vote upon them in accordance with their best judgment.

By Order of the Board of Directors

SECOND: This Certificate of Amendment shall become effective on [•], 2020 at [•]:00 p.m.

THIRD: This Certificate of Amendment was duly adopted in accordance with Section 242 of the General Corporation Law of the State of Delaware by the stockholders of the Company entitled to vote.

IN WITNESS WHEREOF, WESTELL TECHNOLOGIES, INC. has caused this Certificate of Amendment to be signed by its duly authorized officer this [•] day of [•] 2020.