DEF 14A of Research Solutions, Inc.
Filed Oct 12, 2023 · FY20230001104659-23-108869
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Proposal No. 1 is the election of six directors to hold office for a period of one year or until their respective successors have been duly elected and qualified. Our Amended and Restated Bylaws provide that the number of the directors of our company shall be not less than one nor more than nine, as fixed from time-to-time by resolution of our board of directors. On February 8, 2022, our board of directors fixed the number of directors at six effective as of February 8, 2022. Unless otherwise instructed, the proxy holders will vote the proxies received by them for the nominees named below. If any nominee is unwilling to serve as a director at the time of the Annual Meeting, the proxies will be voted for such other nominee(s) as shall be designated by the then current board of directors to fill any vacancy. We have no reason to believe that any nominee will be unable or unwilling to serve if elected as a director. Our board of directors proposes the election of the following nominees as directors: Barbara J. Cooperman General Merrill McPeak Jeremy Murphy Roy W. Olivier John J. Regazzi Kenneth L. Gayron If elected, the foregoing six nominees are expected to serve until the 2024 annual meeting of stockholders.
Required Vote
Required Vote Directors are elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. You may vote either FOR all the nominees, FOR any one of the nominees, WITHHOLD your vote from all the nominees or WITHHOLD your vote from any one of the nominees. Votes that are withheld will not be included in the vote tally for the election of directors. If your shares are held in “street name” by a broker, bank or other nominee, your broker, bank or other nominee does not have authority to vote your unvoted shares held by the firm for the election of directors. As a result, any shares not voted by you will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote. OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE “FOR” THE ELECTION OF THE NOMINEES LISTED ABOVE. The principal occupation and certain other information about the nominees and certain executive officers are set forth on the following pages.
CURRENT DIRECTORS/DIRECTOR NOMINEES
CURRENT DIRECTORS/DIRECTOR NOMINEES The following table sets forth the name, age, position and date of appointment of each of our directors and each persons nominated to become a director, as applicable, as of September 27, 2023.
CURRENT DIRECTORS/DIRECTOR NOMINEES
| Name | Age | Position | Date of Appointment | | Barbara J. Cooperman(1) | 68 | Director | February 8, 2022 | | Gen. Merrill McPeak (1) (2) (3) | 87 | Director | November 5, 2010 | | Roy W. Olivier | 64 | President and Chief Executive Officer, and Director | March 29, 2021 | | John J. Regazzi(1) (4) | 75 | Lead Independent Director | June 22, 2015 | | Jeremy Murphy | 40 | Director Nominee | | | Kenneth L. Gayron | 50 | Director Nominee | |
CURRENT DIRECTORS/DIRECTOR NOMINEES
| (1) Member of the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. |
CURRENT DIRECTORS/DIRECTOR NOMINEES
| (2) Chairman of the Compensation Committee. |
CURRENT DIRECTORS/DIRECTOR NOMINEES
| (3) Chairman of the Nominating and Governance Committee. |
CURRENT DIRECTORS/DIRECTOR NOMINEES
| (4) Chairman of the Audit Committee. |
Barbara J. Cooperman – Director
Barbara J. Cooperman – Director Ms. Cooperman was appointed to our board of directors on February 8, 2022. Ms. Cooperman is an accomplished executive with general management background, P&L responsibility, and world-class marketing specialty in both B2B and B2C sectors. She has more than 20 years’ governance experience on boards including early-stage and privately held companies, nonprofits, industry associations, as well as executive leadership teams. She is known for being strategic and is a highly regarded leader skilled at developing vision and guiding organizations through growth stages and periods of reinvention. With 20+ years in the C-suite, Ms. Cooperman has significant experience advising our board of directors on a wide range of issues such as unlocking brand value, strategic plans, M&A, and corporate social responsibility. Most recently, Ms. Cooperman was the global CMO at Kroll, a leader in cyber security and risk consulting, and Kroll Ontrack, a leader in ediscovery and data recovery. Joining as the firm came out of bankruptcy, she restored worldwide gold standard brand reputations, created go-to-market strategy for the high-growth cyber security practice, and managed corporate and crisis communications through the successful sale of both companies and several high-stakes matters. Kroll Ontrack was sold in 2016 and Kroll in 2018, both at highly attractive valuations. Prior to her role as Chief Marketing Officer at Kroll, Inc., Ms. Cooperman worked for 12 years at Reed Elsevier, where she served as the Global Chief Marketing Officer for LexisNexis and Elsevier. Our board of directors concluded that Ms. Cooperman should serve as a director in light of her extensive industry knowledge, marketing and operating expertise, and governance experience.
General Merrill McPeak – Director
General Merrill McPeak – Director Gen. McPeak was appointed to our board of directors on November 5, 2010. He is President of McPeak and Associates, a company he founded in 1995. From 1990 until his retirement from active military service in late-1994, he was chief of staff of the U.S. Air Force. During this period, he was the senior officer responsible for organization, training and equipage of a combined active duty, National Guard, Reserve and civilian work force of over 850,000 people serving at 1,300 locations in the United States and abroad. As a member of the Joint Chiefs of Staff, he and the other service chiefs were military advisors to the Secretary of Defense and the President. Gen. McPeak has served on the board of directors of several publicly traded companies, including long service with Trans World Airlines, Inc. and with the test and measurement company, Tektronix, Inc. He was for many years Chairman of the Board of ECC International Corp., until that company was acquired by Cubic Corporation. Currently, Gen. McPeak is a director of Iovance Biotherapeutics (Nasdaq:IOVA). Gen. McPeak was a founding investor, director and chairman of Ethicspoint, Inc., a software-as-a-service provider of secure, confidential employee reporting systems, that was acquired by private equity at a return making it one of Oregon’s most successful business startups in decades. Our board of directors concluded that Gen. McPeak should serve as a director in light of his demonstrated leadership abilities and years of experience serving on the boards of directors of numerous publicly traded corporations.
Roy W. Olivier – President and Chief Executive Officer, and Director
Roy W. Olivier – President and Chief Executive Officer, and Director Mr. Olivier was named Interim Chief Executive Officer and President on March 29, 2021 and was formally appointed as Chief Executive Officer and President on October 4, 2021. Mr. Olivier has been a member of our board of directors since January 2018. Before joining our company, Mr. Olivier served as CEO of ARI Network Services, a leading provider of SaaS tools and marketing services, growing the business from less than 80 employees to over 1,200 and increasing revenues from under $15 million to over $100 million through accelerated organic growth and acquisitions. Earlier in his career, he served as VP of Sales and Marketing for ProQuest Media Solutions (now Snap-on Inc.) and held executive and senior management positions at multiple companies across the telecommunications and computer industries including Multicom Publishing, Tandy Corporation, BusinessLand and PacTel.
John J. Regazzi – Lead Independent Director
John J. Regazzi – Lead Independent Director Mr. Regazzi was appointed to our board of directors on June 22, 2015, and served as Chairman of the Board from August 20, 2015 through March 29, 2021, when he was designated Lead Independent Director. Mr. Regazzi is an information services and IT industry innovator, with more than four decades of experience. He is currently managing director of Akoya Capital Partners, a sector-focused private investment firm, where for the last few years he has served as its professional information services sector leader. He has also been a professor at the Long Island University’s College of Education, Information and Technology since 2005, and has served as dean of LIU’s College of Information and Computer Science. Before joining Akoya Capital Partners, Mr. Regazzi served for several years as CEO of Elsevier Inc. and managing director of the NYSE-listed Reed Elsevier, the world’s largest publisher and information services company for journal and related scientific, technical and medical content. At Reed Elsevier, he oversaw its expansive electronic publishing portfolio, with a program staff of 3,000 and revenues exceeding $1 billion. He was previously CEO of Engineering Information, which he helped turn around before being acquired by Reed Elsevier. As a recognized industry thought leader, Mr. Regazzi has designed, launched, and managed some of the most innovative and well-known information services in the professional communities, including the Engineering Village, Science Direct, Scirus and Scopus, as well as numerous other electronic information services dating back to the early days of the online and CD-ROM industries. Mr. Regazzi has served on a variety of corporate and industry boards, including the British Standards Institute Group and the American Institute of Physics, and served as chairman of the board of National Technical Information Service, a division of the U.S. Department of Commerce. He currently serves as chairman of DiSTI and Convergered Security Solutions (CSS), both Akoya portfolio companies. Mr. Regazzi earned his B.S. from St. Johns University, M.A. from University of Iowa, M.S. from Columbia University, and Ph.D. in Information Science from Rutgers University. Our board of directors concluded that Mr. Regazzi should serve as a director in light of his extensive experience in the information services industry.
Jeremy Murphy – Director Nominee
Jeremy Murphy – Director Nominee Mr. Murphy is the current COO & President at ClickTripz, the leading contextual ad network for the travel industry, which each month delivers tens of millions of travel-intenders to the world’s largest travel websites. At ClickTripz, Mr. Murphy has orchestrated pioneering new b2b software from ideation to roll-out, including the first AI-powered conversational advertisement trained to be an expert on each advertiser’s product offering by leveraging state-of-the-art document indexing and language models. Previously, he co-founded TheSuitest, a hotel data-analytics platform featured in the NYTimes, The Today Show and elsewhere for using natural language processing to compare and quantify hotel accommodations. TheSuitest was successfully acquired by ClickTripz in 2015. Prior to his current role, Mr. Murphy had significant experience in various crucial positions at prominent financial institutions. Mr. Murphy was an analyst in the Investment Management Division of Goldman Sachs & Co. as part of a team responsible for nearly $10 billion in assets. Mr. Murphy later worked as a risk manager and analyst for the investment arm of the Gulf Bank of Kuwait and its controlling shareholder. Our board of directors determined that Mr. Murphy would make a beneficial addition to our board of directors in light of his AI experience, software expertise and analytics background.
Kenneth L. Gayron – Director Nominee
Kenneth L. Gayron – Director Nominee Mr. Gayron serves as the Chief Financial Officer and EVP of Avid Technology. Mr. Gayron previously served as the Interim CEO and CFO at Numerex Corp., where he successfully managed a public turnaround of Numerex’s business model. This culminated in a successful merger with Sierra Wireless which was approved by over 99% of public shareholders. As a result, Mr. Gayron delivered a 15% shareholder return over the two-year period. Mr. Gayron was also responsible for Numerex’s Global Financial Organization, including accounting, SEC reporting, financial planning, tax, treasury, capital markets and investor relations. Prior to Numerex, Mr. Gayron served as the Chief Financial Officer at Osmotica Pharmaceutical Corp. During his three-year tenure, he drove 300% improvement in profitability and created $300 million in enterprise value. Mr. Gayron also lead a strategic M&A exit with the CEO which resulted in a $650 million valuation. Mr. Gayron began his career as the VP Finance and Treasurer at Sensus. Mr. Gayron then became the Treasurer at Nuance Communications. Mr. Gayron received his MBA in finance from Cornell Johnson Graduate School of Management and his Bachelor of Science in finance from Boston College. Our board of directors determined that Mr. Gayron would make a beneficial addition to our board of directors in light of his software development expertise and finance background. Mr. Gayron was nominated as a director mutually acceptable to Peter Derycz, Bristol Investment Fund, Ltd. and Bristol Capital Advisors, LLC and Paul Kessler (collectively, the “Investor Group”) and our board of direcotrs in accordance with the requirements of that the Cooperation Agreement dated September 15, 2023 we entered into with the Investor Group.
FURTHER INFORMATION CONCERNING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
FURTHER INFORMATION CONCERNING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE Meetings. Our board of directors held five meetings during the fiscal year ended June 30, 2023. Each director then serving attended 75% or more of the aggregate of all of the meetings of our board of directors and all of the meetings held by all committees of our board of directors on which such director served in the fiscal year ended June 30, 2023. While directors periodically attend annual stockholder meetings, we have not established a specific policy with respect to members of our board of directors attending annual stockholder meetings. Mr. Derycz and Mr. Olivier attended our Annual Meeting of Stockholders, held on November 17, 2022. Committees. Our board of directors currently has the following standing committees: Audit Committee, Compensation Committee and Nominating and Governance Committee. Our Audit Committee held four meetings, our Compensation Committee held five meetings and our Nominating and Governance Committee held one meeting during the fiscal year ended June 30, 2023. Our Audit Committee currently consists of Mr. Regazzi (Chairman), Gen. McPeak and Ms. Cooperman. Our board of directors has determined that Mr. Regazzi is an audit committee financial expert, as defined in Item 407(d)(5) of Regulation S-K, and that each member of our Audit Committee is able to read and understand fundamental financial statements and has substantial business experience that results in such member’s financial sophistication. Accordingly, our board of directors believes that each member of our Audit Committee has sufficient knowledge and experience necessary to fulfill such member’s duties and obligations on our Audit Committee. The primary purposes of our Audit Committee are to assist our board of directors in fulfilling its responsibility to oversee the accounting and financial reporting processes of our company and audits of our financial statements, including (i) reviewing the scope of the audit and all non-audit services to be performed by our independent accountant and the fees incurred by us in connection therewith, (ii) reviewing the results of such audit, including the independent accountant’s opinion and letter of comment to management and management’s response thereto, (iii) reviewing with our independent accountants our internal accounting principles, policies and practices and financial reporting, (iv) engaging our independent accountants and (v) reviewing our quarterly and annual financial statements prior to public issuance. The role and responsibilities of our Audit Committee are more fully set forth in a revised written Charter adopted by our board of directors on September 18, 2015, which is available on our website located at www.researchsolutions.com. Our Compensation Committee currently consists of Gen. McPeak (Chairman), Mr. Regazzi and Ms. Cooperman. The primary purposes of our Compensation Committee are to assist our board of directors in fulfilling its responsibility to determine the compensation of our executive officers and to approve and evaluate the compensation policies and programs of our company, including (i) reviewing the compensation packages of executive officers and making recommendations to our board of directors for said compensation packages, (ii) reviewing and approving proposed stock incentive grants and (iii) providing our board of directors with recommendations regarding bonus plans, if any. The role and responsibilities of our Compensation Committee are more fully set forth in a revised written Charter adopted by our board of directors on September 18, 2015, which is available on our website located at www.researchsolutions.com. The policies underlying our Compensation Committee’s compensation decisions are designed to attract and retain the best-qualified management personnel available. We routinely compensate our executive officers through salaries. At our discretion, we may reward executive officers and employees through bonus programs based on profitability and other objectively measurable performance factors. Additionally, we use stock options, restricted stock awards and other incentive awards to compensate our executives and other key employees to align the interests of our executive officers with the interests of our stockholders. In establishing executive compensation, our Compensation Committee evaluates compensation paid to similar officers employed at other companies of similar size in the same industry and the individual performance of each officer as it impacts our overall performance with particular focus on an individual’s contribution to the realization of operating profits and the achievement of strategic business goals. Our Compensation Committee further attempts to rationalize a particular executive’s compensation with that of other executive officers of our company in an effort to distribute compensation fairly among the executive officers. Although the components of executive compensation (salary, bonus and incentive grants) are reviewed separately, compensation decisions are made based on a review of total compensation. Our Nominating and Governance Committee currently consists of Gen. McPeak (Chairman), Mr. Regazzi and Ms. Cooperman. The primary purposes of our Nominating and Governance Committee are to (i) identify individuals qualified to become members of our board of directors and recommend to our board of directors the nominees for the next annual meeting of our stockholders and candidates to fill vacancies on our board of directors, (ii) recommend to our board of directors the directors to be appointed to committees of our board of directors and (iii) oversee the effectiveness of our corporate governance in accordance with regulatory guidelines and any other guidelines we establish, including evaluations of members of executive management, our board of directors and its committees. The role and responsibilities of our Nominating and Governance Committee are more fully set forth in a revised written Charter adopted by our board of directors on October 15, 2012, which is available on our website located at www.researchsolutions.com. Director Nomination Process. Our Nominating and Governance Committee’s methods for identifying candidates for election to our board of directors (other than those proposed by our stockholders, as discussed below) include the solicitation of ideas for possible candidates from a number of sources - members of our board of directors; our executives; individuals personally known to the members of our board of directors; and other research. Our Nominating and Governance Committee may also, from time-to-time, retain one or more third-party search firms to identify suitable candidates. A stockholder of our company may nominate one or more persons for election as a director at an annual meeting of stockholders if the stockholder complies with the notice, information and consent provisions contained in our Amended and Restated Bylaws. In addition, the notice must be made in writing and set forth as to each proposed nominee who is not an incumbent director (i) their name, age, business address and, if known, residence address, (ii) their principal occupation or employment, (iii) the number of shares of stock of our company beneficially owned, (iv) a description of all arrangements or understandings between the stockholder and each nominee and any other person pursuant to which the nominations are to be made and (v) any other information concerning the nominee that must be disclosed respecting nominees in proxy solicitations pursuant to Rule 14(a) of the Exchange Act of 1934, as amended (the “Exchange Act”). The recommendation should be addressed to our Secretary. Among other matters, our Nominating and Governance Committee:
FURTHER INFORMATION CONCERNING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
| 1. | Reviews the desired experience, mix of skills and other qualities to assure appropriate board of directors composition, taking into account the current members of our board of directors and the specific needs of our company and our board of directors; |
FURTHER INFORMATION CONCERNING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
| 2. | Conducts candidate searches, interviews prospective candidates and conducts programs to introduce candidates to our management and operations, and confirms the appropriate level of interest of such candidates; |
FURTHER INFORMATION CONCERNING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
| 3. | Recommends qualified candidates who bring the background, knowledge, experience, independence, skill sets and expertise that would strengthen and increase the diversity of our board of directors; and |
FURTHER INFORMATION CONCERNING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
| 4. | Conducts appropriate inquiries into the background and qualifications of potential nominees. |
FURTHER INFORMATION CONCERNING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Although the Nominating and Governance Committee does not have a formal diversity policy and does not follow any ratio or formula with respect to diversity in order to determine the appropriate composition of our board of directors, the Nominating and Governance Committee and the full board of directors are committed to creating a board of directors with diversity, including diversity of expertise, experience, background and gender, and are committed to identifying, recruiting and advancing candidates offering such diversity in future searches. Based on the foregoing, our Nominating and Governance Committee recommended for nomination and our board of directors nominated, Ms. Cooperman, Gen. McPeak, Mr. Olivier and Mr. Regazzi for re-election, and Mr. Murphy and Mr. Gayron for election, as directors on our board of directors, subject to stockholder approval, for a one-year term ending on or around the date of the 2024 annual meeting of stockholders. Board Leadership Structure and Role in Risk Oversight. Mr. Regazzi serves as our Lead Independent Director and Mr. Olivier serves as our Chief Executive Officer and President. We believe that separating the roles of Lead Independent Director and Chief Executive Officer enhances our corporate governance practices and better enables management and our board of directors to focus on growth to maximize stockholder value. Our board of directors plays an active role, as a whole and also at the committee level, in overseeing management of our risks and strategic direction. Our board of directors regularly reviews information regarding our liquidity and operations, as well as the risks associated with each. Our Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. Our Audit Committee oversees the process by which our senior management and relevant employees assess and manage our exposure to, and management of, financial risks. Our Nominating and Governance Committee also manages risks associated with the independence of members of our board of directors and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire board of directors is regularly informed about such risks. Board Diversity. Our Nominating and Governance Committee is responsible for reviewing with our board of directors, on an annual basis, the appropriate characteristics, skills and experience required for our board of directors as a whole and its individual members. As required by Nasdaq Rule 5606 as approved by the Securities and Exchange Commission in August 2021, we are providing additional information about the gender and demographic diversity of our directors in the format required by such rule. The information in the matrix below is based solely on information provided by our directors about their gender and demographic self-identification. Directors who did not answer or indicated that they preferred not to answer a question are shown as “did not disclose gender” or “did not disclose demographic background” below.
FURTHER INFORMATION CONCERNING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
| Board Diversity Matrix for Research Solutions, Inc. As of September 27, 2023 | | | | | | Total Number of Directors | 4 | | | | | Part I: Gender Identity | Female | Male | Non-Binary | Did Not Disclose Gender | | Directors | 1 | 3 | 0 | 0 | | Part II: Demographic Background | | | | | | African American or Black | 0 | 0 | 0 | 0 | | Alaskan Native or American Indian | 0 | 0 | 0 | 0 | | Asian | 0 | 0 | 0 | 0 | | Hispanic or Latinx | 0 | 0 | 0 | 0 | | Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | | White | 1 | 3 | 0 | 0 | | Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | | LGBTQ+ | 0 | | | | | Did Not Disclose Demographic Background | 0 | | | |
FURTHER INFORMATION CONCERNING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Policy on Trading, Pledging and Hedging of Company Stock. Our Insider Trading Policy prohibits our executive officers, the non-employee members of our board of directors and certain other employees from engaging in selling any of our securities that they do not own at the time of the sale (referred to as a “short sale”) and buying or selling puts, calls, other derivative securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of our securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engaging in any other hedging transaction with respect to our securities. As of the date of this proxy statement, none of our executive officers or non-employee directors have previously engaged in any hedging or pledging transaction involving our securities. Shareholder Communications. Holders of our securities can send communications to our board of directors via email to auditcommittee@reprintsdesk.com or by telephoning the Chief Financial Officer at our main telephone number, who will then relay the communications to our board of directors.
Summary Compensation Table
Summary Compensation Table The following table summarizes all compensation for the last two fiscal years awarded to, earned by, or paid to our Chief Executive Officer (principal executive officer) and our two most highly compensated executive officers other than our CEO who were serving as executive officers at the end of our last completed fiscal year, whose total compensation exceeded $100,000 during such fiscal year ends.
Summary Compensation Table
| Name and principle position | Fiscal Year | Salary ($) | Bonus ($) | Stock awards ($) | All other compensation ($) | Total ($) | | Peter Victor Derycz | 2023 | 371,520 | 68,220 | 67,200(1) | 8,097 | 515,037 | | Executive Chairman | 2022 | 371,760 | 124,000 | 125,862(2) | 18,205 | 639,827 | | Roy W. Olivier | 2023 | 400,000 | 105,600 | 857,000(3) (4) | 17,734 | 1,380,334 | | President and Chief Executive Officer, and Director | 2022 | 371,520 | — | 142,999(5) | 9,520 | 524,039 | | William Nurthen | 2023 | 310,000 | 76,000 | 468,926(6) (7) | 19,058 | 873,984 | | Chief Financial Officer and Secretary | 2022 | 214,092 | 70,500 | 284,000(8) | 13,460 | 582,052 |
Summary Compensation Table
| (1) Represents the grant date fair value of 34,639 shares of restricted stock granted on August 19, 2022. The grant date fair value was estimated using the market price of our common stock at the date of grant. The restricted stock vests over a three-year period, with a one-year cliff vesting period, and remains subject to forfeiture if vesting conditions are not met. |
Summary Compensation Table
| (2) Represents the grant date fair value of 30,061 shares of restricted stock granted on August 5, 2021, 7,078 shares of restricted stock granted on December 2, 2021, 7,381 shares of restricted stock granted on February 8, 2022, and 8,289 shares of restricted stock granted on May 10, 2022. The grant date fair value was estimated using the market price of our common stock at the date of grant. The restricted stock vests over a three-year period, with a one-year cliff vesting period, and remains subject to forfeiture if vesting conditions are not met. |
Summary Compensation Table
| (3) Represents the grant date fair value of 79,897 shares of restricted stock granted on August 19, 2022. The grant date fair value was estimated using the market price of our common stock at the date of grant. The restricted stock vests over a three-year period, with a one-year cliff vesting period, and remains subject to forfeiture if vesting conditions are not met. |
Summary Compensation Table
| (4) Represents the grant date fair value of 500,000 shares of restricted stock granted on November 1, 2022 under the 2017 Plan, as restricted stock awards to key management in accordance with its long-term equity bonus program (the “LTEBP”). The grant date fair value was computed using the Monte Carlo simulations on a binomial model with the assistance of a valuation specialist with a derived service period ranging from 1.43 to 2.59 years. |
Summary Compensation Table
| (5) Represents the grant date fair value of 18,939 shares of restricted stock granted on August 5, 2021, 14,155 shares of restricted stock granted on December 2, 2021, 14,762 shares of restricted stock granted on February 8, 2022, and 16,578 shares of restricted stock granted on May 10, 2022. The grant date fair value was estimated using the market price of our common stock at the date of grant. The restricted stock vests over a three-year period, with a one-year cliff vesting period, and remains subject to forfeiture if vesting conditions are not met. |
Summary Compensation Table
| (6) Represents the grant date fair value of 24,601 shares of restricted stock granted on August 19, 2022. The grant date fair value was estimated using the market price of our common stock at the date of grant. The restricted stock vests over a three-year period, with a one-year cliff vesting period, and remains subject to forfeiture if vesting conditions are not met. |
Summary Compensation Table
| (7) Represents the grant date fair value of 300,000 shares of restricted stock granted on November 1, 2022 under the 2017 Plan, as restricted stock awards to key management in accordance with its long-term equity bonus program (the “LTEBP”). The grant date fair value was computed using the Monte Carlo simulations on a binomial model with the assistance of a valuation specialist with a derived service period ranging from 1.43 to 2.59 years. |
Summary Compensation Table
| (8) Represents the grant date fair value of 100,000 shares of restricted stock granted on October 4, 2021, 5,476 shares of restricted stock granted on February 8, 2022, and 6,150 shares of restricted stock granted on May 10, 2022. The grant date fair value was estimated using the market price of our common stock at the date of grant. Of this amount, 100,000 shares of the restricted stock vests over a four-year period, with a one-year cliff vesting period, and remains subject to forfeiture if vesting conditions are not met. The remaining 11,626 shares of the restricted stock vests over a three-year period, with a one-year cliff vesting period, and remains subject to forfeiture if vesting conditions are not met. |
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table sets forth information regarding stock options, warrants and other stock awards (restricted stock) for each named executive officer as of June 30, 2023.
Outstanding Equity Awards at Fiscal Year End
| | Number of | Number of | | | | | | | securities | securities | | | Stock Awards: | Stock Awards: | | | underlying | underlying | Option/ | Option/ | Number of | Market value of | | | unexercised | unexercised | Warrant | Warrant | shares of stock | shares of stock | | | options/warrants | options/warrants | exercise | expiration | that have not | that have not | | Name | exercisable (#) | unexercisable (#) | price ($) | date (1) | vested (#) | vested ($) | | Peter Victor Derycz | — | — | — | — | 606(2) | $1,292(3) | | | — | — | — | — | 1,038(4) | $2,583(5) | | | — | — | — | — | 2,500(6) | $5,425(7) | | | — | — | — | — | 10,020(8) | $26,454(9) | | | — | — | — | — | 2,949(10) | $6,459(11) | | | — | — | — | — | 3,691(12) | $7,750(13) | | | — | — | — | — | 4,835(14) | $9,042(15) | | | — | — | — | — | 34,639(18) | 67,200(19) | | Roy W. Olivier | 50,000 | — | $2.40 | 11/13/2028 | — | — | | | 50,000 | — | $3.13 | 11/12/2029 | — | — | | | 50,000 | — | $2.13 | 11/17/2030 | — | — | | | — | — | — | — | 6,313(8) | $16,666(9) | | | — | — | — | — | 5,898(10) | $12,916(11) | | | — | — | — | — | 7,381(12) | $15,500(13) | | | — | — | — | — | 9,671(14) | $18,084(15) | | | — | — | — | — | 79,897(18) | 155,000(19) | | | — | — | — | — | 500,000(20) | 702,000(21) | | William Nurthen | — | — | — | — | 56,250(16) | $146,813(17) | | | — | — | — | — | 2,738(12) | $5,750(13) | | | — | — | — | — | 3,588(14) | $6,709(15) | | | — | — | — | — | 24,601(18) | $47,726(19) | | | — | — | — | — | 300,000(20) | $421,200(21) |
Outstanding Equity Awards at Fiscal Year End
| (1) Stock options expire ten years from the grant date. |
Outstanding Equity Awards at Fiscal Year End
| (2) The restricted stock was granted on November 17, 2020 and vest over a three-year period, with a one-year cliff vesting period. |
Outstanding Equity Awards at Fiscal Year End
| (3) Based on a market closing price per share of common stock of $2.13 on November 17, 2020. |
Outstanding Equity Awards at Fiscal Year End
| (4) The restricted stock was granted on February 9, 2021 and vest over a three-year period, with a one-year cliff vesting period. |
Outstanding Equity Awards at Fiscal Year End
| (5) Based on a market closing price per share of common stock of $2.49 on February 9, 2021. |
Outstanding Equity Awards at Fiscal Year End
| (6) The restricted stock was granted on May 11, 2021 and vest over a three-year period, with a one-year cliff vesting period. |
Outstanding Equity Awards at Fiscal Year End
| (7) Based on a market closing price per share of common stock of $2.17 on May 11, 2021. |
Outstanding Equity Awards at Fiscal Year End
| (8) The restricted stock was granted on August 5, 2021 and vest over a three-year period, with a one-year cliff vesting period. |
Outstanding Equity Awards at Fiscal Year End
| (9) Based on a market closing price per share of common stock of $2.64 on August, 2021. |
Outstanding Equity Awards at Fiscal Year End
| (10) The restricted stock was granted on December 2, 2021 and vest over a three-year period, with a one-year cliff vesting period. |
Outstanding Equity Awards at Fiscal Year End
| (11) Based on a market closing price per share of common stock of $2.19 on December 2, 2021. |
Outstanding Equity Awards at Fiscal Year End
| (12) The restricted stock was granted on February 8, 2022 and vest over a three-year period, with a one-year cliff vesting period. |
Outstanding Equity Awards at Fiscal Year End
| (13) Based on a market closing price per share of common stock of $2.10 on February 8, 2022. |
Outstanding Equity Awards at Fiscal Year End
| (14) The restricted stock was granted on May 10, 2022 and vest over a three-year period, with a one-year cliff vesting period. |
Outstanding Equity Awards at Fiscal Year End
| (15) Based on a market closing price per share of common stock of $1.87 on May 10, 2022. |
Outstanding Equity Awards at Fiscal Year End
| (16) The restricted stock was granted on October 4, 2021 and vest over a four-year period, with a one-year cliff vesting period. |
Outstanding Equity Awards at Fiscal Year End
| (17) Based on a market closing price per share of common stock of $2.61 on October 4, 2021. |
Outstanding Equity Awards at Fiscal Year End
| (18) The restricted stock was granted on August 19, 2022 and vest over a three-year period, with a one-year cliff vesting period. |
Outstanding Equity Awards at Fiscal Year End
| (19) Based on a market closing price per share of common stock of $1.94 on August 19, 2022. |
Outstanding Equity Awards at Fiscal Year End
| (20) The restricted stock was granted on November 1, 2022 under the 2017 Plan, as restricted stock awards to key management in accordance with its long-term equity bonus program (the “LTEBP”). |
Outstanding Equity Awards at Fiscal Year End
| (21) Based on fair value computed using the Monte Carlo simulations on a binomial model with the assistance of a valuation specialist with a derived service period ranging from 1.43 to 2.59 years. |
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and Item 402(v) of Regulation S-K, which was adopted by the SEC in 2022, the Company is providing the following information regarding the relationship between “compensation actually paid” (“CAP”) to our principal executive officer (“PEO”) and Non-PEO NEOs and certain financial performance of the Company for the fiscal years listed below.
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO(1) | Average Summary Compensation Table Total for Non-PEO NEO(2) | Average Compensation Actually paid to Non-PEO NEOs(3) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return(4) | Net Income (Loss)(5) | | 2023 | $1,380,334 | $1,300,501 | $694,511 | $591,466 | $62.24 | $571,623 | | 2022 | $524,039 | $524,039 | $610,940 | $546,982 | $71.33 | $(1,632,384) |
Pay Versus Performance
| (1) The dollar amounts reported represent the amount of “compensation actually paid”, as computed in accordance with SEC rules. The dollar amounts do not reflect the actual amount of compensation earned by or paid during the applicable year. In accordance with SEC rules, the following adjustments were made to total compensation to determine the compensation actually paid: |
Pay Versus Performance
| Year | Reported Summary Compensation Table Total for PEO | Reported Value of Equity Awards (a) | Equity Award Adjustments (b) | Compensation Actually Paid to PEO | | 2023 | $1,380,334 | $857,000 | $777,167 | $1,300,501 | | 2022 | $524,039 | $142,999 | $142,999 | $524,039 |
Pay Versus Performance
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock awards” and “Option awards” columns in the Summary Compensation Table for the applicable year. |
Pay Versus Performance
| (b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
Pay Versus Performance
| Year | Year End Fair Value of Outstanding and Unvested Equity Awards Granted During the Year | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Total Equity Award Adjustments | | 2023 | $857,000 | $(79,833) | $0 | $0 | $777,167 | | 2022 | $142,999 | $0 | $0 | $0 | $142,999 |
Pay Versus Performance
| (2) The dollar amounts reported represent the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding our CEO) in the “Total” column of the Summary Compensation Table in each applicable year. |
Pay Versus Performance
| (3) The dollar amounts reported represent the average amount of “compensation actually paid” to the NEOs as a group (excluding our CEO), as computed in accordance with SEC rules. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding our CEO) during the applicable year. In accordance with the SEC rules, the following adjustments were made to average total compensation for the NEOs as a group (excluding our CEO) for each year to determine the compensation actually paid, using the same methodology described above in Note 1: |
Pay Versus Performance
| Year | Average Reported Summary Compensation Table Total for Non- PEO NEOs | Average Reported Value of Equity Awards | Average Equity Award Adjustments (a) | Average Compensation Actually Paid to Non-PEO NEOs | | 2023 | $694,511 | $268,063 | $165,018 | $591,466 | | 2022 | $610,940 | $204,931 | $140,973 | $546,982 |
Pay Versus Performance
| (a) The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
Pay Versus Performance
| Year | Average Year End Fair Value of Outstanding and Unvested Equity Awards Granted During the Year | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Total Average Equity Award Adjustments | | 2023 | $268,063 | $(109,227) | $0 | $6,182 | $165,018 | | 2022 | $204,931 | $(50,033) | $0 | $(13,925) | $140,973 |
Pay Versus Performance
| (4) Cumulative total stockholder return 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. Represents the value on the last trading day of each of 2023 and 2022 of an investment of $100 in our common stock on the last trading day of 2021. |
Pay Versus Performance
| (5) The dollar amounts reported represent the amount of net income (loss) reflected in our audited financial statements for the applicable year. |
Analysis of Information Presented in the Pay versus Performance Table
Analysis of Information Presented in the Pay versus Performance Table The Company’s executive compensation program reflects a variable pay-for-performance philosophy. While the Company utilizes several performance measures to align executive compensation with Company performance, all of those Company measures are not presented in the Pay versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as computed in accordance with SEC rules) for a particular year. In accordance with SEC rules, the Company is providing the following narrative disclosure regarding the relationships between information presented in the Pay versus Performance table. Compensation Actually Paid and Cumulative Total Stockholder Return During fiscal 2022 and 2023, compensation actually paid to our PEO increased from $524,039 in fiscal year 2022 to $1,300,501 in fiscal year 2023 for Mr. Olivier, and average compensation actually paid to our named executive officers other than our PEO increased from $546,982 in fiscal year 2022 to $591,466 in fiscal year 2023. Over the same period, the value of an investment of $100 in our common stock on the last trading day of 2021 decreased by $33.76 to $62.24 during fiscal year 2022, and increased by $9.09 to $71.33 during fiscal year 2023, for a total decrease over fiscal year 2022 and 2023 of $28.67. Compensation Actually Paid and Net Loss/Income During fiscal 2022 and 2023, compensation actually paid to our PEO increased from $524,039 in fiscal year 2022 to $1,300,501 in fiscal year 2023 for Mr. Olivier, and average compensation actually paid to our named executive officers other than our PEO increased from $546,982 in fiscal year 2022 to $591,466 in fiscal year 2023. Over the same period, our net loss increased by $1,347,295 during fiscal year 2022 (from a net loss in fiscal 2021 of $285,089 to a net loss in fiscal 2022 of $1,632,384), but decreased by $2,204,007 during fiscal 2023 (from a net loss in fiscal year 2022 of $1,632,384 to a net income in fiscal year 2023 of $571,632).
Director Compensation
Director Compensation The following table presents information regarding compensation awarded or paid to our directors for our fiscal years ended June 30, 2023 and 2022 for the services rendered by them to the Company in all capacities.
Director Compensation
| | | Fees | Warrant | | | | | earned | and | | | | | or paid | Option | | | | Fiscal | in cash | Awards | | | Name | Year | ($) | ($) | Total ($) | | John Regazzi (1) | 2023 | 36,000 | 55,500 | 91,500 | | | 2022 | 18,000 | 104,000 | 122,000 | | Gen. Merrill McPeak (2) | 2023 | 18,000 | 55,500 | 73,500 | | | 2022 | 18,000 | 52,000 | 70,000 | | Eugene Robin (3) | 2023 | 18,000 | 55,500 | 73,500 | | | 2022 | 18,000 | 52,000 | 70,000 | | Barbara J. Cooperman (4) | 2023 | 18,000 | 55,500 | 73,500 | | | 2022 | 7,079 | 40,318 | 47,397 |
Director Compensation
| (1) Outstanding equity awards as of June 30, 2023 consists of options to purchase 50,000 shares of common stock at an exercise price of $2.15 per share, 100,000 shares of common stock at $2.10 per share, 100,000 shares of common stock at an exercise price of $2.13 per share, options to purchase 100,000 shares of common stock at an exercise price of $3.13 per share, options to purchase 100,000 shares of common stock at an exercise price of $2.40 per share, options to purchase 150,000 shares of common stock at an exercise price of $1.20, options to purchase 150,000 shares of common stock at an exercise price of $1.05 per share, options to purchase 150,000 shares of common stock at an exercise price of $0.70 per share, options to purchase 16,000 shares of common stock at an exercise price of $0.80 per share and options to purchase 30,000 shares of common stock at an exercise price of $1.10 per share. |
Director Compensation
| (2) Outstanding equity awards as of June 30, 2023 consists of options to purchase 50,000 shares of common stock at an exercise price of $2.15 per share, 50,000 shares of common stock at an exercise price of $2.10 per share, options to purchase 50,000 shares of common stock at an exercise price of $2.13 per share, options to purchase 50,000 shares of common stock at an exercise price of $3.13 per share, options to purchase 50,000 shares of common stock at an exercise price of $2.40 per share, options to purchase 75,000 shares of common stock at an exercise price of $1.20 per share, options to purchase 75,000 shares of common stock at an exercise price of $1.05 per share, options to purchase 75,000 shares of common stock at an exercise price of $0.70 per share, options to purchase 75,000 shares of common stock at an exercise price of $1.10 per share, options to purchase 50,000 shares of common stock at an exercise price of $1.05 per share, and options to purchase 50,000 shares of common stock at an exercise price of $1.15 per share. |
Director Compensation
| (3) Outstanding equity awards as of June 30, 2023 consists of options to purchase 50,000 shares of common stock at an exercise price of $2.15, options to purchase 50,000 shares of common stock at an exercise price of $2.10 per share and options to purchase 31,250 shares of common stock at an exercise price of $2.43 per share. |
Director Compensation
| (4) Outstanding equity awards as of June 30, 2023 consists of options to purchase 50,000 shares of common stock at an exercise price of $2.15, options to purchase 38,767 shares of common stock at an exercise price of $2.10 per share. |
Director Compensation
In fiscal 2023 our non-employee Lead Independent Director received $36,000 and options to purchase 50,000 shares of our common stock for attending meetings and serving on our board of directors. In fiscal 2022 our non-employee Lead Independent Director received $18,000 and options to purchase 100,000 shares of our common stock for attending meetings and serving on our board of directors In fiscal 2023 and 2022, other non-employee directors of our company received $18,000 and options to purchase 50,000 shares of our common stock, for attending meetings and serving on our board of directors. We expect to compensate our non-employee directors with a combination of cash and options to purchase our common stock going forward. Compensation payable to non-employee directors may be adjusted from time to time, as approved by our board of directors.
Indemnification of Directors and Executive Officers and Limitation of Liability
Indemnification of Directors and Executive Officers and Limitation of Liability We are a Nevada Corporation. The Nevada Revised Statutes and certain provisions of our Amended and Restated Bylaws under certain circumstances provide for indemnification of our officers, directors and controlling persons against liabilities which they may incur in such capacities. A summary of the circumstances in which such indemnification is provided for is contained herein, but this description is qualified in its entirety by reference to our Amended and Restated Bylaws and to the statutory provisions. In general, any officer, director, employee or agent may be indemnified against expenses, fines, settlements or judgments arising in connection with a legal proceeding to which such person is a party, if that person’s actions were in good faith, were believed to be in our best interest, and were not unlawful. Unless such person is successful upon the merits in such an action, indemnification may be awarded only after a determination by independent decision of our board of directors, by legal counsel, or by a vote of our stockholders, that the applicable standard of conduct was met by the person to be indemnified. The circumstances under which indemnification is granted in connection with an action brought on our behalf is generally the same as those set forth above; however, with respect to such actions, indemnification is granted only with respect to expenses actually incurred in connection with the defense or settlement of the action. In such actions, the person to be indemnified must have acted in good faith and in a manner believed to have been in our best interest, and have not been adjudged liable for negligence or misconduct. Indemnification may also be granted pursuant to the terms of agreements which may be entered in the future or pursuant to a vote of stockholders or directors. The Nevada Revised Statutes also grant us the power to purchase and maintain insurance which protects our officers and directors against any liabilities incurred in connection with their service in such a position, and such a policy may be obtained by us. We have also entered into separate indemnification agreements with our directors and executive officers. A stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees regarding which indemnification by us is sought, nor are we aware of any threatened litigation that may result in claims for indemnification. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.