DEF 14A of Pro Dex Inc, Oct 27, 2023

DEF 14A of Pro Dex Inc

Filed Oct 27, 2023 · FY20230001079973-23-001489

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS

  2. Current Board Structure and Director Terms

    Current Board Structure and Director Terms Our Board is currently composed of seven members. All directors or their successor nominees stand for election each year at our annual meeting of shareholders. Certain information with respect to each of the nominees who will be presented at the Annual Meeting by our Board for election as a director is set forth below. Although it is anticipated that each nominee will be available to serve as a director, should a nominee become unavailable to serve, proxies will be voted for such other person as may be designated by our Board. Unless the authority to vote for directors has been withheld in the proxy, the person named in the accompanying proxy intends to vote at the Annual Meeting for the election of each of the nominees presented below. In the election of directors, assuming a quorum is present, the seven nominees for director receiving the highest number of votes cast at the Annual Meeting will be elected as our directors.

  3. DIRECTORS

    DIRECTORS Set forth below is certain information with respect to our directors.

  4. DIRECTORS

    | Name | Age | Position With Company | Audit | Compensation | Nominating and Governance | Investment | | Raymond E. Cabillot | 60 | Director | X | X | C | X | | Angelita R. Domingo | 51 | Director | | | | | | William J. Farrell III | 50 | Director | | X | X | | | David C. Hovda | 61 | Director | C | | | | | Katrina M.K. Philp | 38 | Director | X | X | | | | Nicholas J. Swenson | 55 | Director, Chairman of the Board | | C | X | C | | Richard L. Van Kirk | 63 | Director, Chief Executive Officer, and President | | | | X |

  5. DIRECTORS

    ____________________________

  6. DIRECTORS

    | (X) Member of the Committee | | (C) Chairman of the Committee |

  7. DIRECTORS

    Ray, Bill, Dave, Nick and Katrina currently each qualify as an “independent director” as such term is defined in Rule 5605(a)(2) of the Nasdaq Listing Rules and we expect that each will continue to qualify as an “independent director” if elected. Our Board is of the opinion that the election to our Board of the director nominees identified herein, each of whom has consented to serve if elected, would be in our shareholders’ best interests.

  8. Compensation Committee Philosophy

    | • | Bonus payments are based upon audited year end results. |

  9. Summary Compensation Table (“SCT”)

    Summary Compensation Table (“SCT”)

  10. Summary Compensation Table (“SCT”)

    | Name and | | Salary | Bonus(1) | Stock Awards(2) | All Other Compensation(3) | Total | | Principal Position | Year | ($) | ($) | ($) | ($) | ($) | | Richard L. Van Kirk | 2023 | $305,000 | $70,114 | $— | $43,491 | $418,605 | | Director, CEO, President and COO | 2022 | $305,000 | $70,362 | $— | $41,020 | $416,382 | | Alisha K. Charlton | 2023 | $240,000 | $50,114 | $— | $7,499 | $297,613 | | Chief Financial Officer | 2022 | $232,500 | $60,362 | $132,670 | $7,357 | $432,889 |

  11. Summary Compensation Table (“SCT”)

    (1) The Bonus amount for fiscal 2023 includes bonuses awarded to Rick and Alisha in the amount of $70,000 and $50,000, respectively, which were accrued for during fiscal 2023 but paid during fiscal 2024.The Bonus amount for fiscal 2022 includes bonuses awarded to Mr. Van Kirk and Ms. Charlton in the amount of $70,000 and $60,000, respectively, which were accrued for during fiscal 2022 but paid during fiscal 2023. (2) The amounts reported above under the heading “Stock Awards” represent the aggregate grant date value of awards under Accounting Standards Codification Topic 718, Compensation - Stock Compensation. The assumptions used in calculating the fair value of these stock awards can be found under Note 11 to the Financial Statements in the Company’s Annual Report on Form 10-K for the year ended June 30, 2022 and have no relation to amounts or periods in which earnings may be reported in the Named Executive Officer’s W-2. (3) The amounts reported above under the heading “All Other Compensation” consist of the following:

  12. Summary Compensation Table (“SCT”)

    | All Other Compensation ($) |

  13. Summary Compensation Table (“SCT”)

    | | | Insurance | Car | 401K Matching | Imputed | | | Name and | | Premiums | Allowance | Contributions | Earnings | Total | | Principal Position | Year | ($) | ($) | ($) | ($) | ($) | | Richard L. Van Kirk | 2023 | $24,767 | $10,000 | $5,160 | $3,564 | $43,491 | | Director, CEO, President, and COO | 2022 | $23,531 | $10,000 | $3,788 | $3,701 | $41,020 | | Alisha K. Charlton | 2023 | $2,966 | $— | $3,346 | $1,187 | $7,499 | | Chief Financial Officer | 2022 | $2,901 | $— | $3,274 | $1,182 | $7,357 |

  14. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The following table sets forth information about outstanding equity awards held by our Named Executive Officers as of June 30, 2023.

  15. Outstanding Equity Awards at Fiscal Year End

    | | Option Awards | | | | | | Number of Securities Underlying Unexercised Options | | Option | Option | | Name | Exercisable (#) | Unexercisable (#)(1) | Exercise Price ($) | Expiration Date | | Richard L. Van Kirk | 18,000 | — | $27.50 | 07/01/2031 | | | | 4,500 | $39.00 | 07/01/2032 | | | | 18,000 | $42.00 | 07/01/2034 | | | | 18,000 | $45.00 | 07/01/2036 | | | | 18,000 | $47.50 | 07/01/2038 | | | | 18,000 | $50.00 | 07/01/2040 | | Alisha K. Charlton | 4,250 | — | $27.50 | 07/01/2031 | | | | 1,063 | $39.00 | 07/01/2032 | | | | 5,250 | $42.00 | 07/01/2034 | | | | 5,250 | $45.00 | 07/01/2036 | | | | 5,250 | $47.50 | 07/01/2038 | | | | 5,250 | $50.00 | 07/01/2040 |

  16. Outstanding Equity Awards at Fiscal Year End

    | (1) Whether any of the unexercisable options vest, and the amount that does vest, is tied to various service periods corresponding to future testing dates and the achievement of our Common Stock trading at or above the exercise price. In the event that the market price of our Common Stock does not reach or exceed the exercise price during the 60 days immediately preceding the three testing dates of the unexercisable options, a fraction, either 50%, 75% or 100% of the above-mentioned unexercisable stock options will expire. Accordingly, the number of unexercisable options with a strike price of $39.00 represents 25% of the original award. |

  17. Outstanding Equity Awards at Fiscal Year End

    | | Stock Awards | | | Name | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#)(1) | Equity Incentive Plan Awards: Market Value of Unearned Shares That Have Not Vested ($)(2) | | Richard L. Van Kirk | 29,600 | $565,360 | | Alisha K. Charlton | 19,600 | $374,360 |

  18. Outstanding Equity Awards at Fiscal Year End

    | (1) Represents performance awards which, upon vesting, will generally be paid in shares of our Common Stock. Whether any performance awards vest, and the amount that does vest, is tied to the completion of various service periods that range from July 1, 2024 to July 1, 2027 and the achievement of our Common Stock trading at certain pre-determined prices. |

  19. Outstanding Equity Awards at Fiscal Year End

    | (2) The payout value of unearned shares is based upon the closing market price of our Common Stock on June 30, 2023, on the Nasdaq Capital Market of $19.10 per share. |

  20. Pay Versus Performance

    Pay Versus Performance As required by the SEC’s new pay versus performance (“PvP”) disclosure rules as set forth in Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive compensation actually paid and certain financial performance of the Company for the last two fiscal years. Under the PvP rules, the SEC has developed a new definition of executive “compensation actually paid” (“CAP”), which requires us to make various adjustments to amounts reported in the Summary Compensation Table (“SCT”). As required by SEC rules, the table presented below discloses CAP for (i) the Company’s principal executive officer (“PEO”), Rick Van Kirk, and (ii) the Company’s Named Executive Officers other than Rick Van Kirk (collectively, “Non-PEO NEOs”), on an average basis. Note that as a smaller reporting company we only have one Non-PEO NEO, Alisha Charlton, and as a result, the CAP for Non-PEO NEOs just reflects CAP for Alisha Charlton. Due to the valuation component of CAP, the dollar amounts do not reflect the actual amount of compensation earned or paid during the year. The PvP table below provides compensation values reported in our current and prior SCTs, as well as the CAP amounts required in this section for the fiscal years ending June 30, 2022 and 2023.

  21. Pay Versus Performance Table (“PvP”)

    Pay Versus Performance Table (“PvP”)

  22. Pay Versus Performance Table (“PvP”)

    | Year | SCT for PEO(1) | CAP for PEO(2) | SCT for Non-PEO NEO(3) | CAP for Non-PEO NEO(4) | Fixed $100 Investment Based on TSR(5) | Net Income (in 000’s)(6) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | | 2023 | $418,605 | $632,137 | $297,613 | $424,446 | $60.49 | $7,074 | | 2022 | $416,382 | $(445,055) | $432,889 | $145,410 | $50.96 | $4,572 |

  23. Pay Versus Performance Table (“PvP”)

    | (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Rick Van Kirk, our Chief Executive Officer, for each corresponding year in the “Total” column of the SCT. Refer to “Executive Compensation – Summary Compensation Table.” |

  24. Pay Versus Performance Table (“PvP”)

    | (2) The dollar amounts reported in column (c) represent the amount of CAP to Rick Van Kirk, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Rick Van Kirk during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Rick Van Kirk’s total compensation as reported in the SCT for each year to determine the compensation actually paid: |

  25. Pay Versus Performance Table (“PvP”)

    | Year | SCT Total for PEO | SCT Reported Equity Award Value for PEO | Equity Award Adjustments for PEO(A) | CAP to PEO | | 2023 | $418,605 | $— | $213,532 | $632,137 | | 2022 | $416,382 | $— | $(861,437) | $(445,055) |

  26. Pay Versus Performance Table (“PvP”)

    | (A) Represents the year-over-year change in the fair value of equity awards to Rick Van Kirk as summarized below: |

  27. Pay Versus Performance Table (“PvP”)

    | Year | Less: grant date fair value of awards granted during FY | Change in fair value of awards granted in any PY unvested at end of FY | Add for awards granted and vested in the same FY the fair value as of vesting date | Change in fair value as of vesting date of any awards from a PY vested in CY | Subtract: Awards granted in any PY fail to meet vesting conditions during the year; value at end of PY | Total Equity Award Adjustments | | 2023 | $— | $288,017 | $— | $140,840 | $(215,325) | $213,532 | | 2022 | $— | $(875,913) | $— | $14,476 | $— | $(861,437) |

  28. Pay Versus Performance Table (“PvP”)

    | (3) The dollar amounts reported in column (d) of the PvP table represent the amounts reported for the Non-PEO NEOs in the “Total” column of the SCT in each applicable year. The Company only has one Non-PEO NEO, Alisha Charlton. |

  29. Pay Versus Performance Table (“PvP”)

    | (4) The dollar amounts reported in column (e) represent the amount of CAP to Alisha Charlton, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Alisha Charlton during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Alisha Charlton’s total compensation as reported in the SCT for each year to determine the compensation actually paid: |

  30. Pay Versus Performance Table (“PvP”)

    | Year | SCT for Alisha Charlton | SCT Reported Equity Award Value for Alisha Charlton | Equity Award Adjustments for Alisha Charlton(A) | Compensation Actually Paid to Alisha Charlton | | 2023 | $297,613 | $— | $126,833 | $424,446 | | 2022 | $432,889 | $(132,670) | $(154,809) | $145,410 |

  31. Pay Versus Performance Table (“PvP”)

    | (A) Represents the year-over-year change in the fair value of equity awards to Alisha Charlton as summarized below: |

  32. Pay Versus Performance Table (“PvP”)

    | Year | Less: grant date fair value of awards granted during FY | Change in fair value of awards granted in any PY unvested at end of FY | Add for awards granted and vested in the same FY the fair value as of vesting date | Change in fair value as of vesting date of any awards from a PY vested in CY | Subtract: Awards granted in any PY fail to meet vesting conditions during the year; value at end of PY | Total Equity Award Adjustments | | 2023 | $— | $92,897 | $— | $88,184 | $(54,248) | $126,833 | | 2022 | $90,046 | $(248,273) | $— | $3,418 | $— | $(154,809) |

  33. Pay Versus Performance Table (“PvP”)

    | (5) Cumulative total shareholder return (“TSR”) assumes $100 is invested in Pro-Dex, Inc. common stock as of July 1, 2021. The TSR represents the cumulative value of the $100 investment as of the end of each fiscal year presented (each, a measurement period). TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |

  34. Pay Versus Performance Table (“PvP”)

    | (6) The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. |

  35. Pay Versus Performance Table (“PvP”)

    Analysis of the Information Presented in the Pay versus Performance Table Our executive compensation program reflects a variable pay-for-performance philosophy, utilizing several performance measures to align executive compensation with our performance. Moreover, we generally seek to incentivize long-term performance, and therefore do not specifically align our performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay versus Performance table. CAP and TSR As demonstrated by the following graph, the amount of compensation actually paid (‘CAP”) to Rick Van Kirk for 2023 and 2022 and the CAP to our Non-PEO NEO, Alisha Charlton, is generally aligned with our TSR over the two years presented in the table. The alignment of CAP with our TSR over the period presented is because a significant portion of the CAP to Rick Van Kirk and to Alisha Charlton is comprised of equity awards. CAP and Net Income As demonstrated by the following graph, the amount of CAP to Rick Van Kirk for 2022 and 2023 and the CAP to our Non-PEO NEO, Alisha Charlton, is generally aligned with our net income over the two years presented in the table. However, as noted above a significant portion of the CAP to Rick Van Kirk and Alisha Charlton is comprised of equity awards, and therefore this will not always be the case.

  36. Compensation of Directors

    Compensation of Directors In May 2016, our Board approved the following compensation plan for our non-employee directors:

  37. Compensation of Directors

    | • | A cash fee of $18,000 per fiscal year, paid quarterly in arrears; and |

  38. Compensation of Directors

    | • | An additional cash fee of $7,000 per fiscal year for the Audit Committee Chair, paid quarterly in arrears. |

  39. Compensation of Directors

    The following table details the fees earned by our non-employee directors during fiscal 2023.

  40. Compensation of Directors

    | Name | Fees Earned or Paid in Cash(1) ($) | Total ($) | | David C. Hovda | $25,000 | $25,000 | | Raymond E. Cabillot | $18,000 | $18,000 | | William J. Farrell III | $18,000 | $18,000 | | Katrina M.K. Philp | $18,000 | $18,000 | | Nicholas J. Swenson | $18,000 | $18,000 |

  41. Compensation of Directors

    | (1) The cash amount reported in this column represents amounts earned during fiscal 2023. All amounts were paid in fiscal 2023 except for the 4th quarter accrual, which was paid in fiscal 2024. |