DEF 14A of Innovative Solutions & Support Inc
Filed Mar 5, 2025 · FY20240001104659-25-020940
PROPOSAL NO. 1 — ELECTION OF DIRECTORS
PROPOSAL NO. 1 — ELECTION OF DIRECTORS
(Item 1 on Proxy Card)
(Item 1 on Proxy Card) At the Annual Meeting, the shareholders will elect six directors to hold office until the annual meeting of shareholders in 2026, or until their respective successors have been duly elected and qualified. Upon the recommendation of the Nominating & Corporate Governance Committee of the Board (the “Nominating & Corporate Governance Committee”), the Board has nominated Dr. Shahram Askarpour, Messrs. Roger A. Carolin, Glen R. Bressner, Garry Dean, and Stephen L. Belland, and Ms. Denise L. Devine to serve as directors. Each of the foregoing persons currently serves as a director, and each has indicated a willingness to continue to serve as a director. Unless contrary instructions are given, the shares represented by a properly executed proxy will be voted “FOR” the elections of each of the nominees. Shareholders must cast a separate vote “FOR” the candidacy of each nominee or to “WITHHOLD AUTHORITY” with respect thereto. Each nominee must receive a majority of the votes cast to be elected. Should any nominee become unavailable to accept election as a director, the persons named in the enclosed proxy will vote the shares that they represent for the election of such other person as the Board may recommend. The Board of Directors recommends voting “FOR” the nominees for directors.
DIRECTOR NOMINEES
DIRECTOR NOMINEES The director nominees standing for election at this meeting, together with certain information about them, are set forth below.
DIRECTOR NOMINEES
| Director Name | Age | Since | Current Term Expires | Positions with the Company | | Shahram Askarpour | 67 | 2022 | 2025 | Director, President & Chief Executive Officer | | Glen R. Bressner | 64 | 1999 | 2025 | Director, Chairman of the Board | | Roger A. Carolin | 69 | 2016 | 2025 | Director | | Stephen L. Belland | 67 | 2022 | 2025 | Director | | Garry Dean | 68 | 2024 | 2025 | Director | | Denise L. Devine | 69 | 2025 | 2025 | Director |
Director Nominees
Director Nominees Shahram Askarpour. Dr. Askarpour joined the Company as Vice President of Engineering in 2003, was promoted to President in March 2012, and was appointed as the Company’s Chief Executive Officer, and joined the Company’s Board, in January 2022. Dr. Askarpour has more than 40 years of aerospace industry experience in managerial and technical positions. Prior to joining the Company, he was employed by Smiths Aerospace (a division of Smiths Group plc), Instrumentation Technology and Marconi Avionics. He holds a number of key patents in the aviation field. Dr. Askarpour received his engineering education in the United Kingdom and received an undergraduate degree in Electrical Engineering from Middlesex University, a post graduate Certificate of Advanced Study in Systems Engineering and a PhD in Automatic Control from Brunel University London. He was awarded the title of Associate Research Fellow for three consecutive years by Brunel University and has published numerous papers in leading international, peer reviewed journals. In addition, he has completed management courses at Carnegie Mellon University and finance courses at the Wharton School of the University of Pennsylvania. Glen R. Bressner. Mr. Bressner is the co-founder and Managing Partner of Activate Venture Partners, an early-stage focused venture capital firm that has evolved from a series of affiliated venture funds that he co-founded beginning in 1985. Mr. Bressner has been a board director of numerous companies, including IQE plc (LSE: IQEP), where he was a member of its Audit Committee, and Tabula Rasa Healthcare (NASDAQ: TRHC), where he chaired its Nomination Committee. He was also a shareholder and a director on the board of Alum-a-Lift, Inc., a family-owned manufacturer of precision material handling solutions that was acquired by a subsidiary of InvestorAB in 2024. From 1996 to 1997, Mr. Bressner served as the chairman of the Board of the Greater Philadelphia Venture Group. Mr. Bressner holds a Bachelor of Science, cum laude, in Business Administration from Boston University and a Masters of Business Administration degree from Babson College. Roger A. Carolin. Mr. Carolin was previously a Venture Partner at SCP Partners, a private equity firm, from 2004 through 2024. While at SCP Partners, Mr. Carolin worked to identify attractive investment opportunities and assisted portfolio companies in the areas of strategy development, operating management, and intellectual property. Mr. Carolin co-founded CFM Technologies, Inc., a global manufacturer of semiconductor process equipment, and served as its Chief Executive Officer for 10 years, until the company was acquired. Mr. Carolin formerly worked for Honeywell, Inc. and General Electric Co., where he developed test equipment and advanced computer systems for on-board missile applications. Mr. Carolin is also a director of Amkor Technology, Inc. (NASDAQ: AMKR), a supplier of outsourced semiconductor assembly and test services. Mr. Carolin holds a B.S. in Electrical Engineering from Duke University and an M.B.A. from the Harvard Business School. Stephen L. Belland. Mr. Belland is the Co-Founder and Chief Executive Officer at Integrated Connection, LLC and a Principal at Clear Rock Advisors. Prior to Clear Rock Advisors, he has held various executive positions at Rockwell Collins including Technical Director, Vice President of Program and Product Management, Vice President of Strategy and Marketing and most recently Vice President of Corporate Development. Mr. Belland received his B.S. in Electrical Engineering from Michigan Technological University and has attended executive programs at the Kellogg School of Management, the Wharton School of the University of Pennsylvania and INSEAD. Garry Dean. From 2015 to 2020, Major General Dean served Delta Airlines as an international captain piloting Boeing 757/767 aircraft. From 2021 to 2024, he served Arlington County Virgina in the role as a Commissioner and Vice-Chair of the Community Oversight Board of the Police. In 2023, General Dean was appointed by Governor Glenn Youngkin to serve on the Virginia Joint Leadership Council of Veteran’s Service Organizations to work closely with the Virginia legislature to propose legislation to assist military veterans and their families who reside in Virginia. Since 2016, General Dean has also served as a mentor and advisor to the Chief National Guard Bureau and the Director of the Air National Guard on critical issues they face. Denise L. Devine. Ms. Devine is the founder of FNB Holdings, LLC, a company dedicated to initiatives in the health and wellness space, of which she has served as Chief Executive Officer since 2014. Ms. Devine is also the co-founder and Chief Financial Officer of RTM Vital Signs, LLC, a development stage medical device company. In addition, Ms. Devine founded, and from 1994 to 2014 served as Chief Executive Officer, of Nutripharm, Inc., a company that generated a portfolio of composition and process patents to create innovative natural food, beverage, pharmaceutical, and nutraceutical products. Ms. Devine previously served as Chair of the Pennsylvania State Board of Accountancy and on the Board of the American Institute of Certified Public Accountants. From 2005 to 2015, Ms. Devine was a member of the Board of Trustees of Villanova University where she also served as the Chair of the Audit and Risk Committee, and as a member of the Investment Committee and Executive Committee. Ms. Devine has served on the Board of Ben Franklin Technology Partners of Southeastern Pennsylvania since 2016. Since 2012, Ms. Devine has also served as a director of Fulton Financial Corporation (NASDAQ: FULT), where she is also Chair of the Audit Committee, the Vice-Chair of the Executive Committee and a member of the Risk Committee. Ms. Devine has been a director of Selectquote, Inc. (NYSE: SLQT) since February 2020 and has served as the Chair of the Compensation Committee since September 2020. She previously served as a director, member of the Audit Committee and Chair of the Compensation and Talent Committee of AgroFresh Solutions, Inc. (NASDAQ: AGFS) from 2018 until its sale in 2023, and as a director of Cubic Corporation (NYSE: CUB) from 2019 until its sale in 2021. Ms. Devine is a Certified Public Accountant and received her Masters in Business Administration from The Wharton School at the University of Pennsylvania, her Masters in Taxation from Villanova Law School, and her undergraduate degree in Accounting from Villanova University.
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS Prior to January 1, 2024, the Company’s fiscal 2024 compensation program for non-employee directors consisted of an annual retainer and restricted stock or restricted stock unit awards. Each non-employee director, except the Chairman of the Board, was entitled to an annual retainer of $25,000 and an annual grant of restricted stock units, with each such unit representing a contingent right to receive one share of common stock upon vesting to non-employee directors under the 2019 Stock-Based Incentive Compensation Plan (the “2019 Plan”). The target value of such annual awards was $50,000 for each non-employee director for fiscal 2024. The number of shares underlying such annual awards is calculated based upon the price of the Company’s common stock at the close of business on the date of the Company’s annual meeting and such shares vest on the first anniversary of the date of grant. A director who resigns during the course of the year will vest in and receive a pro rata portion of the shares that he or she otherwise would have vested (in the case of restricted stock) or received (in the case of restricted stock units) had no such resignation occurred, based on the number of days served during the applicable calendar year. In addition, all directors are reimbursed for reasonable travel and lodging expenses actually incurred in connection with required attendance at board and committee meetings. Further, prior to January 1, 2024, the Chairman of the Board received an annual retainer of $30,000 in addition to grants of restricted stock or restricted stock awards. The chairs of the Compensation Committee and Governance Committee each received an additional annual retainer of $5,000. The chair of the Audit Committee received an additional annual retainer of $12,000. Effective January 1, 2024, each non-employee director was entitled to an annual retainer of $45,000 and an annual grant of restricted stock unit awards with a date of grant target value of $75,000. The grant was made on the date that the Board members were elected or re-elected at the annual meeting, April 18, 2024, and will vest on the one-year anniversary of the date of grant. All cash retainers are paid quarterly in arrears. For non-employee directors elected other than at an annual meeting, both cash retainers and equity grants will be pro-rated for the portion of the year that the non-employee director serves until the next annual meeting. On February 26, 2025, the Board increased the target value of the annual grant of restricted stock unit awards to be granted to non-employee directors from $75,000 to $80,000. Additionally, the following compensation amendments were made; The Chairman of the Board will receive an additional cash retainer of $30,000, members of the Audit Committee shall receive an additional cash retainer of $5,000, members of the Compensation Committee will receive an additional annual cash retainer of $5,000, members of the Nominating and Governance Committee will receive an additional cash retainer of $3,750, the Chairman of the Audit Committee will receive an additional cash retainer of $12,000, the Chairman of the Nominating and Governance Committee will receive an additional cash retainer of $5,000 and the Chairman of the Compensation Committee will receive an additional cash retainer of $7,500. In addition, all directors are reimbursed for reasonable travel and lodging expenses actually incurred in connection with required attendance at Board and committee meetings. On February 26, 2025, the Board increased the annual cash retainer for members of the Audit Committee from $5,000 to $7,000.
Director Compensation Table
Director Compensation Table The following table provides information on the total compensation earned by each non-employee director of the Company for the fiscal year ended September 30, 2024:
Director Compensation Table
| Name | Fees Earned or Paid in Cash $(1) | Stock Awards $(2) | Option Awards $ | Non-Equity Incentive Plan Compensation $ | Change in Pension Value and Non-qualified Compensation Earnings | All Other Compensation $ | Total $ | | Glen R. Bressner | 83,803 | 60,718 | — | — | — | — | 144,521 | | Stephen L. Belland | 57,255 | 60,718 | — | — | — | — | 117,973 | | Roger A. Carolin | 67,857 | 60,718 | — | — | — | — | 128,575 | | Parizad Olver (Parchi)(3) | 34,105 | 26,702 | — | — | — | — | 60,807 | | Garry Dean(4) | 5,625 | 23,272 | — | — | — | — | 28,897 | | Denise L. Devine(5) | — | — | — | — | — | — | — |
Director Compensation Table
(1) The amounts reported in this column include fees paid for attendance of Board and Board committee meetings and annual retainer for each non-employee director for the year ended September 30, 2024. (2) The amounts reported in this column represent the grant date fair value, computed based on the compensation cost recognized for financial reporting purposes by the Company in accordance with the valuation guidelines of Accounting Standards Codification (“ASC”) 505-50, “Equity-Based Payments to Non-Employees” and ASC 718 “Compensation — Stock Compensation” with respect to the stock awards granted to each non-employee director during the fiscal year ended September 30, 2024. See also Note 3, under the heading “Share-Based Compensation,” to the Company’s audited financial statements as filed in the Annual Report, which sets forth the material assumptions used in determining the compensation cost to the Company with respect to such awards. In addition, as of the close of the fiscal year ended September 30, 2024, none of the non-employee directors held outstanding options to purchase stock of the Company. (3) Ms. Olver’s tenure with the Board ended April 18, 2024. (4) Garry Dean’s tenure with the Board began May 16, 2024. Denise L. Devine’s tenure with the Board began January 27, 2025.
Elements of Compensation
Elements of Compensation The Company’s executive compensation program consists of the following elements of compensation, each described in greater depth below: • Base Salary • Annual Bonus • Equity-Based Compensation; and • General Benefits. In determining the different elements of compensation to provide to the named executive officers, the Compensation Committee does not adhere to a specific allocation between short-term and long-term compensation, or between cash and non-cash compensation. Instead, the Compensation Committee determines the elements of compensation in a manner designed to reward strong financial performance, provide overall compensation opportunities that are sufficient to attract and retain highly skilled named executive officers and ensure that named executive officers’ interests are aligned with those of the Company’s shareholders. This may result in the named executive officers receiving all cash compensation in some years (through base salary and annual bonuses) and a combination of cash and equity-based compensation in other years (through base salary, annual bonuses and equity awards).
Annual Bonus
Annual Bonus The Compensation Committee retains discretion to grant bonus compensation to the named executive officers and other employees of the Company. From time to time, the Company may award discretionary annual bonuses to the named executive officers and may agree, in hiring or promoting a named executive officer, to a target bonus opportunity, expressed as a percentage of base salary, in any case, to be paid only if the Company determines that the Company has attained its financial performance goals or other objectives. The named executive officers’ fiscal 2024 target annual bonus opportunities were as follows:
Annual Bonus
| Named Executive Officer | Annual Bonus Opportunity as a % of Base Salary | | Shahram Askarpour | 100% | | Jeffrey DiGiovanni | 50% | | Relland Winand | discretionary | | Michael Linacre | 30% |
Annual Bonus
66% of the potential annual incentive opportunity was based on the achievement of financial performance targets and the remaining portion of the annual incentive was based on a qualitative assessment of performance. In fiscal 2024, the Company chose Revenue and Operating Income as its financial performance metrics. In the case of Dr. Askarpour, the qualitative assessment considered organic growth, progress on mergers and acquisitions, progress on autonomous flight initiatives, increased strategic partnerships and investor relations activities. In the case of Mr. DiGiovanni, the qualitative assessment considered investor relations activities, quality of financial accounting, mergers and acquisitions support and progress toward additional financing.
Annual Bonus
| Performance Measures | Target 100% | Maximum 150% | Weight % | | Revenue ($) | $44,138,000 | 66,207,000 | 33% | | Adjusted Operating Income ($) | $10,470,428 | $15,705,642 | 33% | | Qualitative | — | — | 33% |
Annual Bonus
In fiscal 2024, the Company achieved $ 47,198,020 in revenue and $ 11,446,807 in adjusted operating income (See Appendix A), and the Compensation Committee determined that each of Dr. Askarpour and Mr. DiGiovanni achieved their qualitative goals at 100%. Adjusted operating income is a Non-GAAP measure. Appendix A to the Proxy Statement contains an explanation of how we calculate this measure. As a result, the Compensation Committee approved annual incentive bonuses of $500,000 and $225,000 for Dr. Askarpour and Mr. DiGiovanni, respectively. Interim Chief Financial Officer, Relland Winand received a discretionary bonus of $125,000. Former Chief Financial Officer Micheal Linacre’s October 8, 2023 resignation resulted in the forfeiture of his fiscal year 2024 bonus. The fiscal 2024 annual cash incentives were paid to Dr. Askarpour on December 20, 2024 and to Mr. DiGiovanni on December 17, 2024, respectively. Relland Winand’s discretionary fiscal 2024 bonus was paid on April 5, 2024. The payments are listed as fiscal 2024 compensation in the Summary Compensation Table in the column labeled “Non-Equity Incentive Plan Compensation.”
Equity-based Compensation
Equity-based Compensation The Company awards equity-based compensation to named executive officers to provide a link between the long-term results achieved for its shareholders and the rewards provided to named executive officers, thereby ensuring that such officers have a continuing stake in the Company’s long-term success (see the section titled “Equity Compensation Plan Information” below). Such awards are made at the discretion of the Compensation Committee and are not timed or coordinated with the release of material nonpublic information (“MNPI”). In the event MNPI becomes known to the Compensation Committee before granting an equity award, the Compensation Committee will consider such information and use its business judgment to determine whether to delay the grant of equity to avoid any appearance of impropriety. During fiscal 2024, the Company did not grant stock options to any NEO during any period beginning four business days before and ending one business day after the filing of any Company periodic report on Form 10-Q or Form 10-K, or the filing or furnishing of any Company current report on Form 8-K that disclosed any MNPI. In fiscal 2024, we granted 97,014 option shares and 40,024 RSUs to the Company’s CEO, Dr. Askarpour and 64,599 option shares and 67,156 RSUs to the Company’s CFO, Mr. DiGiovanni. 26% of Dr. Askarpour’s fiscal 2024 granted option shares vested immediately upon the date of grant, and the remaining shares vest 25% on an annual basis such that the entire award will be fully vested four years from the date of grant. Dr. Askarpour’s fiscal 2024 granted RSUs vest 25% on an annual basis such that the entire award will be fully vested on the fourth anniversary of the date of grant. Mr. DiGiovanni’s fiscal 2024 option shares granted and RSUs granted vest 25% on the first anniversary of the award date and in equal quarterly installments thereafter, such that 100% of the awards are vested on the fourth anniversary of the date of grant. To reward Mr. DiGiovanni for his performance during his first year of employment and incentivize him to continue his performance, the Compensation Committee approved an additional award of 31,746 restricted stock units for Mr. DiGiovanni on June 13, 2024, which is included in the aggregate 67,156 RSU’s granted in fiscal 2024 for Mr. DiGiovanni. The restricted stock units are scheduled to vest 25% on the first anniversary of the award date and in equal quarterly installments thereafter, such that 100% of the RSUs awards are vested on the fourth anniversary date of the RSU’s date of grant. Neither Relland Winand, the Company’s Interim CFO nor Michael Linacre, the Company’s former CFO received any grants of RSU’s or Stock Options during fiscal 2024. On November 8, 2023, Mr. Linacre notified the Company of his resignation from all of his positions with the Company, effective immediately, which resulted in the forfeiture of 11,503 previously granted non-vested RSUs.
EMPLOYMENT AGREEMENTS
EMPLOYMENT AGREEMENTS It is the Company’s general philosophy that all of the Company’s employees should be “at will” employees, thereby allowing both the Company and the employee to terminate the employment relationship at any time and without restriction or financial obligation. However, in certain cases, the Company has determined that, as a retention device and a means to obtain non-compete arrangements, employment agreements or other contractual agreements are appropriate. On September 6, 2024, the Company entered into an amendment (the “Amendment”) to the employment agreement dated April 14, 2022 (the “Employment Agreement”) with Shahram Askarpour, the Company’s Chief Executive Officer. The Amendment amends and restates the severance provisions of the Employment Agreement. As amended, if Dr. Askarpour is terminated by the Company without Cause (as defined in the Employment Agreement) or resigns for Good Reason (as defined in the Amendment), Dr. Askarpour will be entitled to (i) payment of his base salary and (ii) payment of COBRA premiums for Dr. Askarpour and his dependents, in each case for 12 months following the date of Dr. Askarpour’s termination or resignation. The Amendment further provides that, in the event that Dr. Askarpour’s employment is terminated by the Company without Cause or for Good Reason during a period beginning six months prior to, and ending two years following, a Change of Control (as defined in the Employment Agreement), Dr. Askarpour shall receive, in lieu of the severance benefits set forth above, the following benefits from the Company: (i) an amount in cash equal to twice the sum of (a) Dr. Askarpour’s base salary and (b) the maximum annual cash bonus and/or other incentive compensation opportunity available to Dr. Askarpour; (ii) immediate vesting of all unvested equity awards held by Dr. Askarpour; (iii) extension of the exercise period with respect to any options held by Dr. Askarpour for a period lasting until the earlier of two years following Dr. Askarpour’s termination and the expiration date of the option; and (iv) payment of the employer portion of health and disability insurance coverage substantially comparable to the coverage Dr. Askarpour received from the Company immediately prior to Dr. Askarpour’s termination, for a period of 18 months following Dr. Askarpour’s termination. The Amendment provides that delivery by the Company of a Nonrenewal Notice (as defined in the Employment Agreement) to Dr. Askarpour will be treated as a termination without Cause on the last day of the applicable term. The Amendment sets forth the definition of “Good Reason,” which includes, absent Dr. Askarpour’s prior written consent and subject to certain exceptions relating to a Change of Control of the Company, (i) any material reduction in Dr. Askarpour’s title, duties, responsibilities or authority, (ii) any material reduction of Dr. Askarpour’s aggregate compensation, (iii) relocation of Dr. Askarpour’s primary work location that results in an increase in Dr. Askarpour’s one-way commute by more than 25 miles, (iv) in the event of a Change of Control, failure or refusal of a successor to the Company to either materially assume the Company’s obligations under the Employment Agreement or enter into a new employment agreement with Dr. Askarpour on terms that are materially similar to those provided under the Employment Agreement, or (v) a material breach of the Employment Agreement by the Company. Under the Amendment, Good Reason shall not be deemed to exist unless (i) the Company receives notice of the alleged basis for Good Reason and fails to cure the deficiency within 30 days after receiving such notice and (ii) Dr. Askarpour terminates his employment within 30 days after the expiration of such 30-day cure period. The Company entered into an amended and restated employment agreement with Dr. Askarpour on April 14, 2022, in connection with his appointment as Chief Executive Officer of the Company on January 14, 2022. The initial term of the employment agreement began on April 14, 2022, and the initial term ended on April 13, 2024. Pursuant to the terms of the agreement, however, the term extends for one additional year each subsequent April 14, unless either party provides written notice to the other party at least 30 days prior to the expiration of the then-current term that the term will not be renewed. The agreement provides for a base salary of $400,000 per year, which the Company determined to be appropriate given Dr. Askarpour’s increased duties and responsibilities as Chief Executive Officer. If Dr. Askarpour’s employment is terminated by the Company without “cause” or by Dr. Askarpour for “good reason,” then, subject to Dr. Askarpour’s execution and non-revocation of a release of claims in favor of the Company, the Company will continue to pay Dr. Askarpour his base salary at the rate then in effect for a period of twelve (12) months following his termination date, during which period the Company will also pay Dr. Askarpour’s COBRA premiums. The employment agreement contains covenants restricting Dr. Askarpour’s ability to compete with the Company or solicit its employees, other service providers, or current, former, or prospective customers for twelve (12) months after the cessation of Dr. Askarpour’s employment. The employment agreement also contains standard confidentiality, assignment of invention, and non-disparagement provisions. The Company entered into an offer letter agreement with Mr. DiGiovanni on March 18, 2024, in connection with his hiring as the Chief Financial Officer of the Company. The offer letter provided for a base salary of $325,000 per year pro-rated from Mr. DiGiovanni’s start date, an annual target bonus amount equal to 50% of his base salary, a grant of restricted common stock of the Company (as described in the section titled “Equity-Based Compensation” above) and a grant of stock options. If Mr. DiGiovanni’s employment is terminated by the Company without “cause,” then, subject to Mr. DiGiovanni’s execution and non-revocation of a release of claims in favor of the Company, the Company would continue to pay Mr. DiGiovanni his base salary at the rate then in effect for a period of six months following his termination date in addition to a pro-rata bonus for the year of termination based on the actual bonus he would have been paid absent such termination. The offer letter contained covenants restricting Mr. DiGiovanni’s ability to compete with the Company or solicit its employees, other service providers, or current, former, or prospective customers for 12 months after the cessation of Mr. DiGiovanni’s employment. The offer also contained standard confidentiality, assignment of invention, and non-disparagement provisions.
EMPLOYMENT AGREEMENTS
The Company entered into an offer letter agreement with former Chief Financial Officer, Michael. Linacre on June 1, 2022, in connection with his hiring as the Chief Financial Officer of the Company. The offer letter provided for a base salary of $230,000 per year, an annual target bonus amounts equal to 30% of his base salary, a grant of restricted common stock of the Company (as described in the section titled “Equity-based Compensation” above) and certain relocation benefits. If Mr. Linacre’s employment was terminated without “cause,” then, subject to Mr. Linacre’s execution and non-revocation of a release of claims in favor of the Company, the Company would continue to pay Mr. Linacre his base salary at the rate then in effect for a period of six months following his termination date in addition to a pro-rata bonus for the year of termination based on the actual bonus he would have been paid absent such termination. The offer letter contained covenants restricting Mr. Linacre’s ability to compete with the Company or solicit its employees, other service providers, or current, former, or prospective customers for 12 months after the cessation of Mr. Linacre’s employment. The offer also contained standard confidentiality, assignment of invention, and non-disparagement provisions. On November 8, 2023, Mr. Linacre resigned from all of his positions with the Company. In connection with his resignation, Mr. Linacre received continued salary compensation in the amount of $62,500. In connection with Mr. Linacre’s resignation, on November 8, 2023, Relland M. Winand was appointed as the interim Chief Financial Officer of the Company. Mr. Winand had previously served the Company as Chief Financial Officer from December 2014 until his retirement in July 2022, after serving as the Company’s Controller from September 2014 to December 2014. On November 9, 2023, the Company entered into an offer letter (the “Offer Letter”) with Mr. Winand with respect to his employment as the Company’s Interim Chief Financial Officer. Pursuant to the Offer Letter, Mr. Winand received an annual base salary of $250,000 and was eligible to participate in the Company’s benefit plans and programs generally available to employees of the Company, including retirement and health and welfare plans. Subsequent to Mr. Winands employment termination as Interim Chief Financial Officer, Mr. Winand received continued salary compensation in an amount of $165,000, which includes a one-time discretionary bonus of $125,000.
Change in Control Benefits
Change in Control Benefits The Compensation Committee has the authority to accelerate the vesting of Company equity awards granted to named executive officers under the 2019 Plan upon a change in control of the Company (except for certain transactions that are expressly carved out under the 2019 Plan). The Company believes that such accelerated vesting is essential to maintaining the commitment and dedication of its key employees throughout a potential change in control of the Company. Unless otherwise determined by the Compensation Committee or provided in an award agreement, “change in control” is generally defined for these purposes as: the acquisition, in one or more transactions during any 12-month period by any “person” (as such term is used for purposes of section 13(d) or section 14(d) of the Exchange Act) but excluding, for this purpose, the Company or its subsidiaries or any employee benefit plan of the Company or its subsidiaries, of “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of forty percent (40%) or more of the combined voting power of the Company’s then outstanding voting securities; • a change in the composition of the Board during any 12-month period such that the individuals who at the beginning of such period constituted the Board cease to constitute a majority of the Board; • the consummation of a merger or consolidation involving the Company, if the shareholders of the Company, immediately before such merger or consolidation, do not own, directly or indirectly, immediately following such merger or consolidation, more than 50% of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation; or • a complete liquidation or dissolution of the Company or a sale or other disposition of all or substantially all of the assets of the Company. Under Dr. Askarpour’s amended and restated employment agreement, in the event of a “change in control,” if a successor to the Company fails or refuses to either materially assume the Company’s obligations under Dr. Askarpour’s employment agreement or enter into a new employment agreement with Dr. Askarpour on terms that are materially similar to those provided under his employment agreement, then Dr. Askarpour may terminate his employment with “good reason” and, subject to his execution and non-revocation of a release of claims in favor of the Company, the Company will continue to pay Dr. Askarpour his base salary at the rate then in effect for a period of 12 months following his termination date, during which period the Company will also pay Dr. Askarpour’s COBRA premiums. For purposes of Dr. Askarpour’s employment agreement, “change in control” is generally defined for these purposes as: • a “person” (as such term is used for purposes of section 13(d) or section 14(d) of the Exchange Act) but excluding, for this purpose, any employee benefit plan of the Company or its subsidiaries, is or becomes a “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of 40% or more of the combined voting power of the Company’s then outstanding voting securities; • a change in the composition of the Board during any 2-year period such that the individuals who at the beginning of such period constituted the Board cease to constitute a majority of the Board; • the consummation of a merger or consolidation involving the Company, if the shareholders of the Company, immediately before such merger or consolidation, do not own, directly or indirectly, immediately following such merger or consolidation, at least 75% of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation; or • a complete liquidation or dissolution of the Company or a sale or other disposition of all or substantially all of the assets of the Company. On June 20, 2024, the Company entered into a Change in Control Agreement with Mr. DiGiovanni (the “Change in Control Agreement”). Pursuant to the Change in Control Agreement, in the event Mr. DiGiovanni is terminated (i) by the Company without Cause, or (ii) by Mr. DiGiovanni for Good Reason during the period beginning six months prior to and ending two years following a Change in Control of the Company (the terms “Cause,” “Change in Control” and “Good Reason” are defined in the Change in Control Agreements), Mr. DiGiovanni will be entitled to receive an amount equal to two times the sum of (A) his base salary in effect immediately prior to the Change in Control, and (B) the maximum annual cash bonus and/or other incentive compensation opportunity available to Mr. DiGiovanni (as determined by the Board in its sole discretion). The Change in Control benefit will be paid in one lump sum on the 60th day following termination of employment, provided that the executive has executed and delivered a release of claims and the statutory period during which he or she may revoke that release has expired on or before that 60th day. Upon such termination, (x) all unvested equity awards held by Mr. DiGiovanni will immediately become vested and exercisable, (y) any options held by Mr. DiGiovanni at the time of such termination will continue to be exercisable until the earlier of two years following the date of such termination and the option’s original expiration date, and (z) the Company will provide Mr. DiGiovanni with health (medical, dental and vision) and disability coverage substantially comparable to the coverage Mr. DiGiovanni was receiving from the Company immediately prior to the Change in Control for a period of eighteen months following such termination.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE This Summary Compensation Table provides information on the total compensation earned by each named executive officer for fiscal years ended September 30, 2024, 2023 and 2022.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary $(4)(5)(6) | Bonus $ | Non-Equity Incentive Plan Compensation $ | Option Awards $(2) | Stock Awards $(2) | All Other Compensation $(1) | Total $ | | Shahram Askarpour Chief Executive Officer | 2024 | 500,000 | — | 500,000 | 1,280,624 | 683,307 | 8,258 | 2,972,189 | | | 2023 | 400,000 | — | 355,816 | 852,000 | 819,000 | 12,592 | 2,439,408 | | | 2022 | 369,616 | 300,000 | — | — | — | 6,585 | 676,201 | | Jeffrey DiGiovanni Chief Financial Officer | 2024 | 156,250 | 143,750 | 81,250 | 249,998 | 449,994 | 2,185 | 1,083,427 | | Relland Winand Interim Chief Financial Officer | 2024 | 147,692 | 125,000 | — | — | — | 4,308 | 277,000 | | Michael Linacre Former Chief Financial Officer | 2024 | 116,594 | — | — | — | — | 1,006 | 117,600 | | | 2023 | 233,770 | — | 118,605 | 111,264 | 49,994 | 162,491 | 676,124 | | | 2022 | 53,077 | 25,000 | — | — | 49,997(3) | — | 128,074 |
SUMMARY COMPENSATION TABLE
(1) The amounts set forth in this column represent (i) for Dr. Askarpour’s, Mr. DiGiovanni’s and Mr. Winand’s contributions to their Savings Plan accounts for the applicable fiscal year, and (ii) for Mr. Linacre’s, $154,761 in relocation benefits and $7,730 in contributions to his Savings Plan account for the applicable fiscal year. (2) These amounts represent the aggregate grant date fair value determined in accordance with the valuation guidelines of ASC Topic 718 “Stock Compensation” with respect to the options granted to the named executive officers in the applicable year. See also Note 3, under the heading “Share-Based Compensation,” in the Company’s audited financial statements as filed in the Annual Report. The values do not correspond to the actual value that will be recognized by the named executive officers at the time such awards vest. (3) This award was inadvertently excluded from the Company’s 2022 proxy statement; however, the details of the award have been previously disclosed on a Form 4 filed with the SEC. (4) Mr. DiGiovanni’s fiscal 2024 annual base salary was $325,000, however his fiscal 2024 pro-rata salary paid from date of hire for fiscal 2024 was $156,250. (5) Mr. Winand’s fiscal 2024 annual base salary was $250,00, however his fiscal 2024 pro-rata salary paid from date of hire for fiscal 2024 was $147,692 which included a retainer compensation of $40,000. (6) Mr. Linacre’s fiscal 2024 annual base salary reflects pro-rata compensation as Mr. Linacre’s employment with the Company terminated effective as of November 8, 2023 and included retainer compensation of $62,500.
Grants Of Plan-Based Awards
Grants Of Plan-Based Awards The following table sets forth information about non-equity and equity awards granted to the named executive officers in the fiscal year ended September 30, 2024.
Grants Of Plan-Based Awards
| | | Estimated Future Payouts under Non-Equity Incentive Plan Awards | | | All other stock awards: | All other option awards: | Exercise price of option awards ($/Sh) | Grant date fair value of stock and option awards ($)(1) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Number of shares of stock or units (#) | Number of securities underlying options (#) | | | | Shahram Askarpour | | — | 500,000 | 750,000 | | | | | | Shahram Askarpour | 2/22/2024 | | | | 40,024 | | | 325,000 | | Shahram Askarpour | 2/22/2024 | | | | | 97,000 | 8.12 | 429,000 | | Jeffrey DiGiovanni | | | 162,500 | 243,750 | | | | | | Jeffrey DiGiovanni | 4/08/2024 | | | | 35,410 | | | 250,000 | | Jeffrey DiGiovvani | 4/08/2024 | | | | | 64,599 | 7.06 | 250,000 | | Jeffrey DiGiovanni | 6/13/2024 | | | | 31,746 | | | 200,000 |
Grants Of Plan-Based Awards
The amounts included in this column are the dollar amounts representing the grant date fair value of each restricted stock unit or option share, as applicable, calculated in accordance with FASB ASC Topic 817, and do not represent the actual value that may be recognized by the named executive officers upon vesting of restricted stock units or options.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table provides outstanding equity awards for the named executive officers as of the end of fiscal year 2024:
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | Option Awards | | | | Stock Awards | | | Name | Number of securities underlying unexercised options (#) exercisable(1) | Number of securities underlying unexercised options (#) unexercisable | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($) | | Shahram Askarpour | 201,000(1) | — | 8.19 | 1/11/2033 | 37,500(4) | 244,500 | | Shahram Askarpour | 25,000(2) | — | 8.12 | 2/22/2034 | 40,024(5) | 260,956 | | Shahram Askarpour | | 72,014(3) | 8.12 | 2/22/2034 | | | | | | — | | | | | | Jeffrey DiGiovanni | | 64,599(6) | 7.06 | 4/08/2034 | 35,410(6) | 230,873 | | Jeffrey DiGiovanni | | | | | 29,100(7) | 189,732 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
(1) The award becomes vested according to the following schedule: following the first anniversary of the date of grant, the award shall vest in three equal tranches upon the issuer’s common stock achieving or having achieved prior to such anniversary, specified prices per share. (2) The award vested in full at the date of grant. (3) The award becomes vested according to the following schedule: 25% on the first anniversary of grant date and then 25% per quarter for the next three successive anniversary years from date of grant. (4) The award becomes vested according to the following schedule: 25% on the first anniversary of grant date and 25% per quarter for the next three successive anniversary dates from date of grant. (5) The award becomes vested according to the following schedule: 8.33% at 9/30/24, and 8.33% at the end of each calendar quarter end thereafter. (6) The award becomes vested according to the following schedule: 25% on the first anniversary of grant date and 8.33% at the end of each calendar quarter end thereafter. (7) The award becomes vested according to the following schedule: 8.33% on September 30, 2024, 8.33% on December 31, 2024, 8.33% on the first anniversary of grant date and 8.33% at the end of each calendar quarter end thereafter.
OPTION EXERCISES AND STOCK VESTED
OPTION EXERCISES AND STOCK VESTED The following table provides information on the value of stock options that were exercised and stock awards that vested during the fiscal year ended September 30, 2024, for each of our named executive officers:
OPTION EXERCISES AND STOCK VESTED
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise $ | Number of Shares Acquired on Vesting | Value Realized on Vesting ($) | | Shahram Askarpour | — | — | 25,000 | 176,438 | | Jeffrey DiGiovanni | — | — | 2,646 | 17,252 | | Michael Linacre | — | — | 493 | 3,614 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Dr. Askarpour’s amended and restated employment agreement provides that if his employment is terminated by the Company without “cause” or by Dr. Askarpour for “good reason,” then, subject to his execution and non-revocation of a release of claims in favor of the Company, the Company will continue to pay Dr. Askarpour his base salary at the rate then in effect for a period of 12 months following his termination date, during which period the Company will also pay Dr. Askarpour’s COBRA premiums. If Dr. Askarpour’s employment were terminated by the Company without “cause” or for “good reason” on September 30, 2024, the total amounts payable to Dr. Askarpour would have been $526,243. For purposes of Dr. Askarpour’s employment agreement, “cause” generally means (a) the commission by or conviction of Dr. Askarpour, or plea of guilty or nolo contendere to, a felony or any crime involving dishonesty, disloyalty, or moral turpitude; (b) Dr. Askarpour’s willful misconduct or willful failure substantially to perform the duties of his position or his willful refusal to comply with the lawful directives of the Board; (c) a breach by Dr. Askarpour of his employment agreement or any written policies of the Company applicable to Dr. Askarpour; (d) any act or omission by Dr. Askarpour constituting dishonesty, fraud or embezzlement, or an intentional violation of Dr. Askarpour’s duty of loyalty to the Company under law; (e) Dr. Askarpour’s gross negligence in the performance of his duties; or (f) Dr. Askarpour’s poor job performance or other improper conduct not otherwise described above, except that cause shall not exist based solely on clauses (e) or (f), unless the Company has given Dr. Askarpour written notice of its intent to terminate his employment for cause, and allowed Dr. Askarpour 30 days to cure such alleged poor job performance or other improper conduct. For purposes of Dr. Askarpour’s employment agreement, “good reason” generally means (a) a material reduction of Dr. Askarpour’s duties, responsibilities or authority; (b) a reduction of Dr. Askarpour’s base salary; (c) failure or refusal of a successor to the Company to either materially assume the Company’s obligations under Dr. Askarpour’s employment agreement or enter into a new employment agreement with Dr. Askarpour on terms that are materially similar to those provided under his employment agreement, in any case, in the event of a “change in control”; (d) a relocation of Dr. Askarpour’s primary work location that results in an increase in his one-way commute by more than 25 miles; or (e) a material breach of Dr. Askarpour’s employment agreement by the Company. See the section titled “Compensation Discussion and Analysis” for additional information. Mr. DiGiovanni offer letter provided that if his employment is terminated by the Company without “cause,” then, subject to his execution and non-revocation of a release of claims in favor of the Company, the Company would continue to pay Mr. DiGiovanni his base salary at the rate then in effect for a period of six months following his termination date in addition to a pro-rata bonus for the year of termination based on the actual bonus he would have been paid absent such termination. If Mr. DiGiovanni’s employment were terminated by the Company without “cause” on September 30, 2024, the total amounts payable to Mr. DiGiovanni would have been $175,621. For purposes of Mr. DiGiovanni’s offer letter, “cause” generally means (a) the indictment or conviction of Mr. DiGiovanni, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude or dishonesty; (b) Mr. DiGiovanni’s intentional action or an act of fraud, dishonesty or theft affecting the property, reputation, or business of the Company or its affiliates; (c) Mr. DiGiovanni’s willful and persistent neglect of his duties and responsibilities; (d) Mr. DiGiovanni’s failure or refusal to carry out the lawful directives of the Board; (e) Mr. DiGiovanni’s diverting any business opportunity of the Company or its affiliates for his own personal gain; (f) Mr. DiGiovanni’s omission of or misrepresentation of a significant fact on his employment application or resume; or (g) Mr. DiGiovanni misuse of alcohol or drugs affecting his work performance. See the section titled “Compensation Discussion and Analysis” for additional information. Pursuant to the Change in Control Agreement with Mr. DiGiovanni effective June 20, 2024, in the event Mr. DiGiovanni is terminated (i) by the Company without Cause, or (ii) by Mr. DiGiovanni for Good Reason during the period beginning six months prior to and ending two years following a Change in Control of the Company (the terms “Cause,” “Change in Control” and “Good Reason” are defined in the Change in Control Agreements), Mr. DiGiovanni will be entitled to receive an amount equal to two times the sum of (A) his base salary in effect immediately prior to the Change in Control, and (B) the maximum annual cash bonus and/or other incentive compensation opportunity available to Mr. DiGiovanni (as determined by the Board in its sole discretion). The Change in Control benefit will be paid in one lump sum on the 60th day following termination of employment, provided that the executive has executed and delivered a release of claims and the statutory period during which he or she may revoke that release has expired on or before that 60th day. Upon such termination, (x) all unvested equity awards held by Mr. DiGiovanni will immediately become vested and exercisable, (y) any options held by Mr. DiGiovanni at the time of such termination will continue to be exercisable until the earlier of two years following the date of such termination and the option’s original expiration date, and (z) the Company will provide Mr. DiGiovanni with health (medical, dental and vision) and disability coverage substantially comparable to the coverage Mr. DiGiovanni was receiving from the Company immediately prior to the Change in Control for a period of 18 months following such termination. Pursuant to an June 1, 2022 offer letter agreement with former Chief Financial Officer, Michael Linacre, if Mr. Linacre’s employment was terminated without “cause,” then, subject to Mr. Linacre’s execution and non-revocation of a release of claims in favor of the Company, the Company would continue to pay Mr. Linacre his base salary at the rate then in effect for a period of six months following his termination date in addition to a pro-rata bonus for the year of termination based on the actual bonus he would have been paid absent such termination. The offer letter contained covenants restricting Mr. Linacre’s ability to compete with the Company or solicit its employees, other service providers, or current, former, or prospective customers for 12 months after the cessation of Mr. Linacre’s employment. The offer also contained standard confidentiality, assignment of invention, and non-disparagement provisions. On November 8, 2023, Mr. Linacre resigned from all of his positions with the Company. In connection with his resignation, Mr. Linacre received continued salary compensation in the amount of $62,500. On November 9, 2023, the Company entered into an offer letter (the “Offer Letter”) with Mr. Winand with respect to his employment as the Company’s Interim Chief Financial Officer. Pursuant to the Offer Letter, Mr. Winand received an annual base salary of $250,000 and was eligible to participate in the Company’s benefit plans and programs generally available to employees of the Company, including retirement and health and welfare plans. Mr. Winand’s Offer Letter contained no termination or change in control provisions. Subsequent to Mr. Winands employment termination as Interim Chief Financial Officer, Mr. Winand received continued salary compensation in an amount of $165,000, which includes a one-time discretionary bonus of $125,000.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The Company’s Compensation Committee has the authority to accelerate the vesting of Company stock options granted to named executive officers under the 2019 Plan upon a change in control of the Company. See the section titled “Compensation Discussion and Analysis” for additional information.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and as a “smaller reporting company” as defined by the Regulation S-K, we provide the following disclosure regarding executive compensation and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the fiscal years shown.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(1)(2)(3) | Average Summary Compensation Table Total for Non-PEO NEOs(1) | Average Compensation Actually Paid to Non-PEO NEOs(1)(2)(3) | Value of Initial Fixed $100 Investment Based on TSR(4) | Net Income ($MM) | | 2024 | $2,972,189 | $1,564,964 | $492,676 | $404,050 | $92.88 | $7.00 | | 2023 | $2,439,408 | $2,394,368 | $676,259 | $661,666 | $108.26 | $6.02 | | 2022 | $676,201 | $676,201 | $188,028 | $206,087 | $122.93 | $5.52 |
PAY VERSUS PERFORMANCE
(1) The Principal Executive Officer (“PEO”) in 2023 and 2024 is Shahram Askarpour. The Non-PEO NEOs for whom the average compensation is presented in this table for 2024 is Mr. Jeffrey DiGiovanni, Mr. Michael Linacre and Mr. Relland Winand. The Non-PEO NEOs for whom the average compensation is presented in this table for 2023 and 2022 is Michael Linacre. (2) The amounts shown as Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually realized or received by the Company’s NEOs. These amounts reflect total compensation as set forth in the Summary Compensation Table for each year, adjusted as described in footnote 3 below. (3) Compensation Actually Paid reflects the exclusions and inclusions for the PEO and NEOs set forth below. Amounts excluded, which are set forth in the Exclusion of Stock Awards columns below, represent the Stock Awards amounts from the applicable Summary Compensation Table. Amounts included in the Inclusion of Equity Values column below are the aggregate of the following components, as applicable: the fair value as of the end of the fiscal year of unvested equity awards granted in that year; the change in fair value during the year of equity awards granted in prior years that remained outstanding and unvested at the end of the year; and the change in fair value during the year through the vesting date of equity awards granted in prior years that vested during that year, less the fair value at the end of the prior year of awards granted prior to the year that failed to meet applicable vesting conditions during the year. Equity values are calculated in accordance with FASB ASC Topic 718. Dollar values assume $100 was invested in the Company for the cumulative periods from September 30, 2021 to September 30, 2024 for fiscal 2024, from September 30, 2021 to September 30,2023 for fiscal 2023 and from September 30, 2021 to September 30, 2022 for fiscal 2022, respectively and assumes reinvestment of the pre-tax value of dividends paid. Historical stock performance is not necessarily indicative of future stock performance.
ADJUSTMENTS MADE TO DETERMINE COMPENSATION ACTUALLY PAID
ADJUSTMENTS MADE TO DETERMINE COMPENSATION ACTUALLY PAID
ADJUSTMENTS MADE TO DETERMINE COMPENSATION ACTUALLY PAID
| | | 2024 | 2023 | 2022 | | Summary Compensation Table Total | PEO | $2,972,189 | 2,439,408 | 676,201 | | | Average Non- PEO NEOs | $492,676 | 676,259 | 188,028 | | Deduction for amounts reported under the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table | PEO | $879,018 | 1,671,000 | — | | | Average Non- PEO NEOs | $233,331 | 161,258 | 49,997 | | Fair value as of the end of the covered year of awards granted during year that remain unvested as of year-end | PEO | $505,456 | 689,560 | — | | | Average Non- PEO NEOs | $140,203 | 154,923 | 68,056 | | Increase/Deduction for change in fair value from prior year-end to current year-end of awards granted prior to that year that were outstanding and unvested as of year-end | PEO | $— | — | — | | | Average Non- PEO NEOs | $— | (6,092) | — | | Increase for fair value as of the vesting dates for awards granted during year that vest during the year | PEO | $51,250 | 936,400 | — | | | Average Non- PEO NEOs | $5,751 | — | — | | Increase/Deduction for change in fair value from prior year-end to vesting date of awards granted prior to that year that vested during year | PEO | $— | — | — | | | Average Non- PEO NEOs | $(44) | (2,030) | — | | Deduction for fair value of awards granted prior to year that were forfeited during year | PEO | $— | — | — | | | Average Non- PEO NEOs | $(1,205) | — | — | | Compensation Actually Paid | PEO | $1,564,964 | 2,394,368 | 676,201 | | | Average Non- PEO NEOs | $404,050 | 661,666 | 206,087 |
Description of Relationship Between NEO Compensation Actually Paid and Total Shareholder Return (“TSR”)
Description of Relationship Between NEO Compensation Actually Paid and Total Shareholder Return (“TSR”) The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and the Company’s cumulative TSR over the three-year period from fiscal 2022 through fiscal 2024.
Description of Relationship Between NEO Compensation Actually Paid and Net Income
Description of Relationship Between NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and our net income during the three-year period from fiscal 2022 through fiscal 2024.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE NOMINEES LISTED IN PROPOSAL NO. 1, AND “FOR” PROPOSAL NO. 2
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE NOMINEES LISTED IN PROPOSAL NO. 1, AND “FOR” PROPOSAL NO. 2 THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED ABOVE. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN FAVOR OF THE NOMINEES LISTED IN PROPOSAL NO. 1 AND IN FAVOR OF PROPOSAL NO. 2. Attendance of the undersigned at the meeting, or at any adjournment or postponement thereof, will not be deemed to revoke this proxy, unless the undersigned shall affirmatively indicate at such meeting or session the intention of the undersigned to vote said share(s) in person. If the undersigned hold(s) any of the shares of the Company in a fiduciary, custodial, or joint capacity or capacities, this proxy is signed by the undersigned in every such capacity, as well as individually. PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. SIGNATURE SIGNATURE (if jointly owned) Note: Please sign name(s) exactly as appearing hereon. When signing as attorney, executor, administrator, or other fiduciary, please give your full title as such. Joint owners should each sign personally. When signing as a corporation or a partnership, please sign in the name of the entity by an authorized person. Please check this box if you plan to attend the meeting. BROADRIDGE CORPORATE ISSUER SOLUTIONS C/O INNOVATIVE SOLUTIONS AND SUPPORT, INC.P.O. BOX 1342BRENTWOOD, NY 11717 VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode aboveUse the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALSIf you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage- paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V63885-P26230 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY INNOVATIVE SOLUTIONS AND SUPPORT, INC. The Board of Directors recommends you vote FOR the following proposal: Election of each of Messrs. Shahram Askarpour, Roger A. Carolin, Glen R. Bressner, Garry Dean, Stephen L. Belland and Ms. Denise L. Devine as directors of the Company for a term of one year. 1a. Shahram Askarpour 1b.Roger A. Carolin!!1c.Glen R. Bressner!!3.1d.Garry Dean!!1e.Stephen L. Belland!!1f.Denise L. Devine!!YesNo Please indicate if you plan to attend this meeting. The Board of Directors recommends you vote FOR the following proposal: Ratification of the appointment of Grant Thornton LLP as the Company's independent registered public accounting firm for the fiscal year ending September 30, 2025. To transact any other business that may properly come before the meeting. For Against Abstain Please indicate if you plan to attend this meeting. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. V63886-P26230 INNOVATIVE SOLUTIONS AND SUPPORT, INC.720 PENNSYLVANIA DRIVE, EXTON, PENNSYLVANIA 19341THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS PROXY FOR THE APRIL 17, 2025 ANNUAL MEETING OF SHAREHOLDERSThe undersigned hereby appoints Mr. Shahram Askarpour and Jeffrey DiGiovanni and either of them as proxies, each with power of substitution, and hereby authorizes them to represent the undersigned and to vote, as designated on the reverse side, all the shares of Common Stock held of record by the undersigned on February 20, 2025 at the Annual Meeting of Shareholders of Innovative Solutions and Support, Inc., to be held on April 17, 2025, at the Company's corporate offices, 720 Pennsylvania Drive, Exton, Pennsylvania 19341, beginning at 10:00 a.m. local time, or at any adjournment or postponement thereof, upon the matters set forth in the Notice of Annual Meeting of Shareholders and Proxy Statement, receipt of which is hereby acknowledged.THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE AS TO ANY PARTICULAR ITEM, THIS PROXY WILL BE VOTED IN FAVOR OF THE NOMINEES LISTED IN PROPOSAL NO. 1, AND IN FAVOR OF PROPOSAL NO. 2.PLEASE SIGN, DATE AND RETURN THIS PROXY CARD IMMEDIATELY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.