DEF 14A of Evi Industries, Inc., Nov 20, 2023

DEF 14A of Evi Industries, Inc.

Filed Nov 20, 2023 · FY20230001174947-23-001406

Open on EDGAR

  1. What are my choices when voting on the election of directors?

    What are my choices when voting on the election of directors? You may vote for all of the director nominees, or your vote may be withheld with respect to one or more of the director nominees. The proposal related to the election of directors is described in this Proxy Statement beginning on page 10.

  2. Board of Directors

    Board of Directors Pursuant to the Company’s Amended and Restated Bylaws and Delaware law, the Company’s business and affairs are managed under the direction of the Company’s Board of Directors. Directors are kept informed of the Company’s business through discussions with management, including the Company’s Chief Executive Officer and other officers, by reviewing materials provided to them, and by participating in meetings of the Board of Directors and its committees. Controlled Company The Company’s Common Stock is listed for trading on the NYSE American. As described in further detail under “Certain Relationships and Related Transactions – Controlled Company” below, the Company’s management, including Henry M. Nahmad, the Company’s Chairman, Chief Executive Officer and President, and the Company’s Board of Directors pursuant to stockholders agreements entered into in connection with business acquisitions previously effected by the Company, has the power to vote shares representing a majority of the total voting power of the Company. Accordingly, the Company is considered a “controlled company” under the rules of the NYSE American. As a “controlled company,” the Company is exempt from certain rules and requirements of the NYSE American related to corporate governance matters, including the rules requiring that (i) the Company’s Board of Directors be comprised of at least a majority of independent directors, (ii) the compensation of the Company’s executive officers be determined, or recommended to the Board of Directors for determination, either by a compensation committee comprised of independent directors or by a majority of the independent directors, and (iii) nominations for election to the Company’s Board of Directors be either selected, or recommended for the Board of Directors’ selection, by either a nominating committee comprised solely of independent directors or by a majority of the independent directors. However, the Company’s Board of Directors is currently, and historically has been, comprised of a majority of independent directors. In addition, the Company has a standing Compensation Committee comprised solely of independent directors which, among other things, determines the compensation of the Company’s Chief Executive Officer and determines, or recommends to the Board of Directors the determination of, the compensation of the Company’s other executive officers. The Compensation Committee also serves as the administrative committee for the Company’s 2015 Equity Incentive Plan, as amended (the “Equity Incentive Plan”). Director Independence The Company’s Board of Directors has determined that David Blyer, Glen Kruger, Timothy P. LaMacchia and Hal M. Lucas, who together comprise a majority of the Board of Directors, are independent. For purposes of making its independence determinations, the Board of Directors used the definition of independence set forth in the rules of the NYSE American. Meetings of the Board The Company’s Board met five times during the fiscal year ended June 30, 2023 (“fiscal 2023”) and also took certain actions by written consent in lieu of a meeting. Each member of the Board of Directors attended at least 75% of the meetings of the Board and committees on which he served during fiscal 2023. It is the Company’s policy that, absent extenuating circumstances, the Company’s directors attend meetings of stockholders. All six of the Company’s directors attended the Company’s 2022 Annual Meeting of Stockholders. Committees of the Board of Directors Audit Committee The Company’s Board of Directors has a standing Audit Committee. The Audit Committee is comprised of Timothy P. LaMacchia, Chairman, and Glen Kruger. As permitted by the Audit Committee’s charter and by the listing standards of the NYSE American due to the Company qualifying as a “smaller reporting company” under Regulation S-K promulgated by the SEC, the Audit Committee is permitted to be comprised of just two members. The Board has determined that each member of the Audit Committee is “financially literate” and “independent” within the meaning of rules of the NYSE American (including, with respect to their independence, the additional independence requirements applicable to audit committee members thereunder) and applicable Securities and Exchange Commission (“SEC”) rules and regulations. In addition, the Board determined that Mr. LaMacchia qualifies as an “audit committee financial expert,” as defined under Item 407 of Regulation S-K promulgated by the SEC. The Audit Committee held four meetings during fiscal 2023. The Audit Committee operates under a written charter adopted by the Board. If the Audit Committee deems it to be appropriate, the Audit Committee may amend, or recommend to the full Board amendments to, the Audit Committee charter. The Audit Committee charter is posted in the “Investors – Governance – Governance Documents” section of the Company’s website at www.evi-ind.com. Pursuant to its charter, the Audit Committee provides assistance to the Board in fulfilling the Board’s oversight responsibilities with respect to accounting, auditing, financial reporting practices and legal compliance. Under its charter, the Audit Committee reviews the financial reports and other financial information provided by the Company to the SEC, the Company’s systems of internal control over financial reporting, and the Company’s auditing, accounting and financial reporting processes generally. The Audit Committee also is responsible for the appointment and retention of, and the Audit Committee reviews and appraises the performance, qualifications and independence of, the Company’s independent registered public accounting firm, and the Audit Committee approves the fees and other compensation paid to the Company’s independent registered public accounting firm. A report from the Audit Committee is included in this Proxy Statement on page 24. Compensation Committee The Company’s Board of Directors has a standing Compensation Committee. The Compensation Committee is comprised of Hal M. Lucas, Chairman, and David Blyer. The Company’s Board of Directors has determined that each member of the Compensation Committee is “independent,” within the meaning of the rules of the NYSE American (including the additional independence requirements applicable to compensation committee members thereunder). The Compensation Committee met twice during fiscal 2023. The Compensation Committee operates under a written charter adopted by the Board. If the Compensation Committee deems it to be appropriate, the Compensation Committee will recommend to the full Board changes to the Compensation Committee charter. The Compensation Committee charter is posted in the “Investors – Governance – Governance Documents” section of the Company’s website at www.evi-ind.com. Among other responsibilities set forth in its charter, the Compensation Committee determines the compensation, including base salary and incentive compensation, of the Company’s Chief Executive Officer and, with the input and assistance of the Company’s Chief Executive Officer, determines, or recommends to the full Board, the compensation, including base salary and incentive compensation, of the Company’s other executive officers. The Company’s executive compensation program is designed to align the interests of the Company’s executive officers with those of stockholders, reward performance and long-term value creation, recognize the individual performance, skills and responsibilities of each executive officer, and attract, retain, motivate and reward executive officers who have the experience and ability to conceive and successfully execute the Company’s business strategies. The Compensation Committee reviews the Company’s executive

  3. Board of Directors

    compensation practices as considered to be necessary with a goal of assuring the fairness of the Company’s executive compensation and its support of the strategic goals of the Company. The Compensation Committee also recommends to the full Board, with the input and assistance of the Company’s Chief Executive Officer, the compensation of the Company’s directors and, subject to any permitted delegation, administers the Company’s Equity Incentive Plan and the Company’s 2017 Employee Stock Purchase Plan. Pursuant to its charter, the Compensation Committee has the authority to retain consultants to assist the Compensation Committee in its evaluation of executive compensation, as well as the authority to approve any such consultant’s fees and retention terms. The Compensation Committee did not utilize the services of any executive compensation consultants for fiscal 2023. No Standing Nominating Committee As described above, as a “controlled company” under the rules of the NYSE American, nominees for director of the Company are not required to be selected or recommended to the Board by either a standing nominating committee comprised solely of independent directors or by a majority of the Company’s independent directors. The Company does not have a standing nominating committee nor are directors required to be selected or recommended by a majority of the Company’s independent directors. Instead, the full Board of Directors participates in the consideration of director nominees. The Board believes this structure to be appropriate because, as described above, the Company’s management has voting power over more than 50% of the Company’s outstanding Common Stock and, therefore, is in a position to control the election of the Company’s directors. The Board does not have a charter governing its nomination process. While the Board will consider nominees recommended by stockholders, it has not actively solicited recommendations from stockholders. Although the Board has not established specific minimum qualifications, or specific qualities or skills for prospective nominees, the Board, in evaluating director nominees, generally considers, among other things, a potential nominee’s financial and business experience, educational background, understanding of the Company’s business and industry, skills that would complement rather than duplicate skills of existing Board members, demonstrated ability in his or her professional field, integrity and reputation, willingness to work productively with other members of the Board and represent the interests of stockholders as a whole, and time availability to perform the duties of a director. The Board considers these factors in light of the then-current size and composition of the Board. Although the Company 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 the Board, when considering a prospective nominee, the Board will generally take into account diversity of skills, experience and other qualities of the nominee that the Board believes can contribute to the success of the Company. No weight is assigned to any of the factors described above, and the Board may change its emphasis on certain of these factors from time to time in light of the needs of the Company at the time. The Board will evaluate nominees of stockholders using the same criteria as it uses in evaluating other nominees to the Board. See “Bylaw Advance Notice Procedures,” “Stockholder Proposals Intended for Inclusion in the Company’s Proxy Materials for its 2024 Annual Meeting of Stockholders” and “Universal Proxy Rules” under “Additional Information” below for information regarding timing and other requirements relating to stockholder proposals and director nominations.

  4. PROPOSAL NO. 1 - ELECTION OF DIRECTORS

    PROPOSAL NO. 1 - ELECTION OF DIRECTORS The Company’s Amended and Restated Bylaws provide that the Board of Directors shall consist of no less than three or more than nine directors, and for each director to serve for a term expiring at the Company’s next annual meeting of stockholders. The specific number of directors is set from time to time by resolution of the Board. The Board of Directors currently consists of six directors. The Board has nominated all six of its incumbent directors, Henry M. Nahmad, Dennis Mack, David Blyer, Glen Kruger, Timothy P. LaMacchia and Hal M. Lucas, for re-election at the Annual Meeting. Each of the director nominees is nominated to serve for a term expiring at the Company’s 2024 Annual Meeting of Stockholders and has consented to serve for his term. If any director nominee should become unavailable to serve as a director, the Board may designate a substitute nominee. In that case, the persons named as proxies will vote for the substitute nominee designated by the Board.

  5. Nominees for Election as Directors

    Nominees for Election as Directors

  6. HENRY M. NAHMAD

    HENRY M. NAHMAD Henry Nahmad, age 44, has served as a director of the Company and as Chairman, Chief Executive Officer and President of the Company since March 2015. Prior to joining the Company, Mr. Nahmad served as Chief Executive Officer of Chemstar Corp., a provider of food safety and sanitation solutions, from July 2009 to March 2014. From 2001 to 2004 and from 2007 to 2009, Mr. Nahmad worked in various capacities at Watsco, Inc., the largest distributor of HVAC/R products. The Board believes that Mr. Nahmad’s knowledge, leadership skills, business relationships, and experience, including with respect to growth from acquisitions and other strategic transactions, make Mr. Nahmad a valuable member of the Board and benefit the Company, including with respect to its business, operations and growth strategy.

  7. DENNIS MACK

    DENNIS MACK Dennis Mack, age 79, has served as Executive Vice President of the Company since October 2016 when he was appointed to such position in connection with the Company’s acquisition of Western State Design at that time. In December 2018, his corporate title was changed to Executive Vice President, Corporate Strategy. Mr. Mack has also been a director of the Company since November 2016. Mr. Mack founded Western State Design in 1974 and has served as its President since its inception. The Board believes that it benefits from Mr. Mack’s knowledge of the commercial laundry industry as well as his understanding of the operations, prospects, products, customers, suppliers and employees of Western State Design.

  8. DAVID BLYER

    DAVID BLYER David Blyer, age 63, has served as a director of the Company since 1998. Since April 2017, Mr. Blyer has served as President and Chief Executive Officer of Arreva LLC, which provides software to serve the fundraising and donor relationship management needs of nonprofit organizations. Arreva is the successor by merger to DonorCommunity Inc., a company founded by Mr. Blyer which provided a software platform to non-profit organizations to assist in their operational and fundraising activities. Mr. Blyer served as President and Chief Executive Officer of DonorCommunity from August 2010 until the time of its merger with Telosa Software to form Arreva. Mr. Blyer was Co-Chairman of Stone Profiles LLC (formerly Profiles in Concrete, Inc.), a manufacturer and installer of architectural cast stone for the residential and commercial construction markets, from January 2005 until March 2010. From July 2002 until January 2005, Mr. Blyer was an independent consultant. Mr. Blyer was Chief Executive Officer and President of Vento Software, Inc., a developer of software for specialized business applications, from 1994, when he co-founded Vento, until November 1999, when Vento was acquired by SPSS Inc., a computer software company that developed and distributed technology for the analysis of data in decision-making and which merged with a subsidiary of IBM in 2010. From November 1999 until December 2000, Mr. Blyer served as Vice President of Vento and, from January 2001 until July 2002, he served as President of the Enabling Technology Division of SPSS. The Board believes that Mr. Blyer brings to the Board broad experience in developing sales and marketing strategies, in addition to business operations skills gained through his founding and running of a number of diverse companies as well as his leading of a division of SPSS, which at the time was a publicly-held company. Mr. Blyer has an MBA in finance.

  9. Glen Kruger

    Glen Kruger Glen Kruger, age 48, has served as a director of the Company since December 2019. Since October 2023, Mr. Kruger has served as Managing Director, Technology & Services Investment Banking at Raymond James & Associates, a leading global investment bank with expertise in mergers and acquisitions, and capital markets. Mr. Kruger previously served as a Managing Director, Technology Investment Banking at Houlihan Lokey from November 2021, when Houlihan acquired his predecessor firm GCA Global, which he joined in 2017. He received a BSc in Mechanical Engineering from the University of Natal (South Africa) and an MBA from Babson College. The Board believes that Mr. Kruger is a valuable contributor to the Board based on, among other things, his experience and expertise with respect to the capital markets and merger and acquisition transactions.

  10. TIMOTHY P. LaMACCHIA

    TIMOTHY P. LaMACCHIA Timothy P. LaMacchia, age 61, has served as a director of the Company since December 2017. Mr. LaMacchia is a private investor. He was a Partner at Ernst & Young LLP from 2002 until his retirement in June 2017. Prior to joining Ernst & Young LLP, Mr. LaMacchia was a Partner at Arthur Andersen LLP, where he was employed since 1986. The Board believes that Mr. LaMacchia provides meaningful insight to the Board and makes important contributions to the Audit Committee, including as a result of his finance and accounting background.

  11. HAL M. LUCAS

    HAL M. LUCAS Hal M. Lucas, age 44, has served as a director of the Company since 2015. Mr. Lucas is an attorney in private practice. He is a founding partner of the law firm of Lucas Savitz P.L. (and its predecessor), where Mr. Lucas has practiced since 2011. Prior to that time, Mr. Lucas was an attorney at the law firm of Astigarraga Davis Mullins & Grossman, P.A. from 2008 to 2011 and at the law firm of Bilzin Sumberg Baena Price & Axelrod LLP from 2004 to 2008. Mr. Lucas also served as Of Counsel to Astigarraga Davis Mullins & Grossman, P.A. from 2011 to 2013. Since 2019, Mr. Lucas has also served as a director and President of South Tip Holdings, LLC, a Miami, Florida-based hemp and CBD producer. Mr. Lucas obtained his Juris Doctor degree from The University of Texas School of Law and a Bachelor’s degree in economics and international relations from The Johns Hopkins University. The Board believes that Mr. Lucas’ experience in legal and business matters gained from his career as a practicing attorney and his service as President and a director of South Tip Holdings benefits the Company and makes him a valuable asset to the Board.

  12. Summary Compensation Table

    Summary Compensation Table The following table sets forth certain summary information concerning compensation which, for the fiscal years ended June 30, 2023 and 2022, the Company paid to, or accrued on behalf of, Henry M. Nahmad, the Company’s Chairman, Chief Executive Officer and President, and Tom Marks and Robert H. Lazar, the Company’s next two highest paid executive officers during the fiscal year ended June 30, 2023. Messrs. Nahmad, Marks and Lazar are sometimes hereinafter referred to individually as a “Named Executive Officer” and collectively as the “Named Executive Officers” or “NEOs.”

  13. Summary Compensation Table

    | Name and Principal Positions(1) | Fiscal Year | Salary(2) | Bonus(3) | Stock Awards(4) | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compen-sation | Total | | Henry M. Nahmad | 2023 | $650,000 | $550,000 | $3,299,609 | - | - | - | - | $4,499,609 | | Chairman, Chief Executive Officer and President | 2022 | $607,692 | $550,000 | $4,499,986 | - | - | - | - | $5,657,678 | | Tom Marks | 2023 | $400,000 | $300,000 | $659,922 | - | - | - | $9,150 | $1,369,072 | | Executive Vice President, Business Development and President of West Region | 2022 | $400,000 | $150,000 | - | - | - | - | $8,700 | $558,700 | | Robert H. Lazar | 2023 | $240,000 | $60,000 | $329,945 | - | - | - | $6,500 | $636,445 | | Chief Financial Officer and Chief Accounting Officer | 2022 | $231,923 | - | $254,999 | - | - | - | $6,500 | $493,422 |

  14. Summary Compensation Table

    | (1) The Company does not have an employment agreement with any of the Named Executive Officers. The compensation of the Named Executive Officers is determined by the Compensation Committee of the Board of Directors. Each Named Executive Officer receives an annual base salary and may receive bonuses, in cash and/or equity awards, pursuant to bonus plans which may be established from time to time by the Compensation Committee or otherwise at the discretion of the Compensation Committee. Equity awards, if any, are granted under the Company’s 2015 Equity Incentive Plan, as amended (the “Equity Incentive Plan”). The Named Executive Officers are also provided certain benefits, including health and welfare benefits and the right to participate in the Company’s participatory Section 401(k) Profit Sharing Plan described below, on the same basis as the Company’s other employees. |

  15. Summary Compensation Table

    | (2) Represents the annual base salary paid to the Named Executive Officer during the applicable fiscal year. Each Named Executive Officer’s annual base salary is subject to adjustment from time to time at the discretion of the Compensation Committee. Upon the approval of the Compensation Committee, (i) effective November 19, 2021, the annual base salary of Mr. Nahmad was increased from $550,000 to $650,000, and (iii) effective September 13, 2021, the annual base salary of Mr. Lazar was increased from $205,000 to $240,000. Effective October 9, 2023, Mr. Lazar’s annual base salary was increased to $300,000. |

  16. Summary Compensation Table

    | (3) Represents discretionary bonuses paid upon the approval of the Compensation Committee, in each cash, based upon a subjective evaluation of the performance of the Company and the applicable Named Executive Officer. Mr. Nahmad’s fiscal year 2022 bonus consisted of a $250,000 cash bonus and a stock award of $300,000 of shares of the Company’s Common Stock. See “Chief Executive Officer Compensation” below for additional information with respect to the bonus paid to Mr. Nahmad, including the factors considered by the Compensation Committee in approving such bonus and the restricted stock award granted to Mr. Nahmad (as described in footnote 4 below). With respect to the bonuses paid to Mr. Marks and Mr. Lazar and the restricted stock units and award granted to Mr. Marks and Mr. Lazar, respectively (as described in footnote 4 below), the Compensation Committee considered, among other things, the recommendation Mr. Nahmad and the performance and financial condition of the Company, including, in the case of Mr. Marks, Western State Design and the other operating subsidiaries of the Company comprising the Company’s West Region (of which Mr. Marks is the President). Mr. Marks also receives a quarterly cash bonus of $37,500. The payment of such bonus is at the discretion of the Compensation Committee and may be modified or terminated at any time by the Compensation Committee. Such bonus is in addition to any other bonuses which Mr. Marks may receive from time to time, including additional discretionary cash bonuses to the extent determined by the Compensation Committee such as the $150,000 discretionary cash bonus paid in September 2022. |

  17. Summary Compensation Table

    | (4) Represents the aggregate grant date fair value of (i) in the case of Mr. Nahmad, a restricted stock award of 202,430 shares of the Company’s Common Stock granted to Mr. Nahmad during September 2022 (which is included in Mr. Nahmad’s compensation for fiscal 2023) and a restricted stock award of 124,309 shares of the Company’s Common Stock granted to Mr. Nahmad during November 2021 (which is included in Mr. Nahmad’s compensation for fiscal 2022), (ii) in the case of Mr. Marks, 40,486 restricted stock units granted to Mr. Marks during September 2022, each of which represents a contingent right to receive one share of the Company’s Common Stock upon vesting, and (iii) in the case of Mr. Lazar, a restricted stock award of 20,242 shares of the Company’s Common Stock granted to Mr. Lazar during September 2022 (which is included in Mr. Lazar’s compensation for fiscal 2023) and 10,303 shares of the Company’ Common Stock granted to Mr. Lazar during September 2021 (which is included in Mr. Lazar’s compensation for fiscal 2022). Each such grant was made under the Company’s Equity Incentive Plan upon the approval of the Compensation Committee. Additional information regarding these grants, including the vesting schedules, is set forth below under “Outstanding Equity Awards at June 30, 2023” and, in the case of the grant to Mr. Nahmad, “Chief Executive Officer Compensation.” Assumptions used in the calculation of the grant date fair value of the restricted stock awards and units are included in Note 17 to the Company’s audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. Due to the long-term vesting of a majority of these restricted stock awards and units (subject to potential vesting acceleration under limited circumstances) and the risk of forfeiture until vesting, the present value of the restricted stock awards and units is significantly less than the grant date fair value presented in the table. |

  18. Summary Compensation Table

    During October 2023, the Company, upon the approval of the Compensation Committee, paid discretionary cash bonuses of $750,000 to Mr. Nahmad, $150,000 to Mr. Marks and $60,000 to Mr. Lazar. In addition, during October 2023, the Company, upon the approval of the Compensation Committee, granted (a) a restricted stock award of 166,667 shares of the Company’s Common Stock to Mr. Nahmad, (b) 18,519 restricted stock units to Mr. Marks, and (c) restricted stock awards of 9,134 shares of the Company’s Common Stock to Mr. Lazar, each of which is scheduled to vest 50% on the ten-year anniversary of the grant date and 50% in four equal annual installments commencing in October 2024, subject to the terms and conditions of the Company’s Equity Incentive Plan and the related restricted stock award or unit agreement. These bonuses and restricted stock awards and units are not reflected in the Summary Compensation Table above but will be included in the applicable Named Executive Officer’s compensation for the fiscal year ending June 30, 2024. In addition, as described above, during October 2023, Mr. Lazar’s annual base salary was increased from $240,000 to $300,000. In making the compensation decisions with respect to Mr. Marks and Mr. Lazar, the Compensation Committee considered, among other things, the recommendation Mr. Nahmad and the performance and financial condition of the Company, including, in the case of Mr. Marks, Western State Design and the other operating subsidiaries of the Company comprising the Company’s West Region. See “Chief Executive Officer Compensation” below for additional information with respect to the bonus paid and restricted stock award granted to Mr. Nahmad during October 2023, including the factors considered by the Compensation Committee in approving such items.

  19. Outstanding Equity Awards at June 30, 2023

    Outstanding Equity Awards at June 30, 2023 The following table sets forth certain information regarding restricted stock awards (or, in the case of Tom Marks only, restricted stock units) of the Company’s Common Stock held by Henry M. Nahmad, Tom Marks and Robert H. Lazar as of June 30, 2023. Other than as set forth below, none of the Named Executive Officers held any restricted stock awards, restricted stock units or other equity-based awards, including stock options, of the Company at June 30, 2023.

  20. Outstanding Equity Awards at June 30, 2023

    | | Stock Awards | | | | | Name | Number of shares or units of stock that have not vested (#) | Market value of shares of units of stock that have not vested ($) | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) | | Henry M. Nahmad | 311,071(1) | $6,843,562 | - | - | | | 311,071(1) | $6,843,562 | - | - | | | 146,793(2) | $3,229,446 | - | - | | | 116,539(3) | $2,563,858 | - | - | | | 202,430(4) | $4,453,460 | - | - | | Tom Marks | 60,000(5) | $1,320,000 | - | - | | | 40,486(6) | $890,692 | - | - | | Robert H. Lazar | 18,088(7) | $397,936 | - | - | | | 6,500(8) | $143,000 | - | - | | | 7,546(9) | $166,012 | - | - | | | 10,303(10) | $226,666 | - | - | | | 20,242(11) | $445,324 | - | - |

  21. Outstanding Equity Awards at June 30, 2023

    | (1) Represents restricted shares of the Company’s Common Stock. Subject to the terms and conditions of the Company’s Equity Incentive Plan and the related restricted stock award agreement, including as described below under “Compensation Plans and Arrangements,” these restricted shares are scheduled to vest on November 5, 2040, the date on which Mr. Nahmad will reach the age of 62. |

  22. Outstanding Equity Awards at June 30, 2023

    | (2) Represents restricted shares of the Company’s Common Stock. Subject to the terms and conditions of the Company’s Equity Incentive Plan and the related restricted stock award agreement, including as described under “Compensation Plans and Arrangements” below, as of June 30, 2023, 135,502 of these restricted shares were scheduled to vest on November 5, 2040, the date on which Mr. Nahmad will reach the age of 62 (subject to accelerated vesting with respect to 50% of such shares under certain circumstances), and the balance of these restricted shares is scheduled to vest in February 2024. In accordance with the terms of the restricted stock award agreement, based on the Company’s results for the fiscal year ended June 30, 2023, 33,876 of the restricted shares otherwise scheduled to vest on November 5, 2040 vested on October 5, 2023 upon the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 on such date and 33,875 of the restricted shares otherwise scheduled to vest on November 5, 2040 are now scheduled to vest in four equal installments during October 2024, 2025, 2026 and 2027. |

  23. Outstanding Equity Awards at June 30, 2023

    | (3) Represents restricted shares of the Company’s Common Stock. Subject to the terms and conditions of the Company’s Equity Incentive Plan and the related restricted stock award agreement, including as described under “Compensation Plans and Arrangements” below, as of June 30, 2023, 93,232 of these restricted shares were scheduled to vest on November 5, 2040, the date on which Mr. Nahmad will reach the age of 62 (subject to accelerated vesting with respect to 50% of such shares under certain circumstances), and the balance of these restricted shares are scheduled to vest in three equal annual installments during November 2023, 2024 and 2025. In accordance with the terms of the restricted stock award agreement, based on the Company’s results for the fiscal year ended June 30, 2023, 23,308 of the restricted shares otherwise scheduled to vest on November 5, 2040 vested on October 5, 2023 upon the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 on such date and 23,308 of the restricted shares otherwise scheduled to vest on November 5, 2040 are now scheduled to vest in four equal installments during October 2024, 2025, 2026, and 2027. |

  24. Outstanding Equity Awards at June 30, 2023

    | (4) Represents restricted shares of the Company’s Common Stock. Subject to the terms and conditions of the Company’s Equity Incentive Plan and the related restricted stock award agreement, including as described under “Compensation Plans and Arrangements” below, as of June 30, 2023, 101,215 of these restricted shares are scheduled to vest on September 27, 2032 and the balance of these restricted stock shares are scheduled to vest in four equal installments during September 2023, 2024, 2025, and 2026. The first such annual installment vested during September 2023. |

  25. Outstanding Equity Awards at June 30, 2023

    | (5) Represents restricted stock units, each of which represents a contingent right to receive one share of the Company’s Common Stock upon vesting. Subject to the terms and conditions of the Company’s Equity Incentive Plan and the related restricted stock unit agreement, including as described below under “Compensation Plans and Arrangements,” as of June 30, 2023, these restricted stock units were scheduled to vest on November 3, 2030 (subject to an accelerated vesting schedule for 50% of such shares under certain circumstances). In accordance with the terms of the restricted stock unit agreement, based on the Company’s results for the fiscal year ended June 30, 2023, 15,000 of the restricted stock units vested on October 5, 2023 upon the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 on such date and 15,000 of the restricted stock units are now scheduled to vest in four equal installments during October 2024, 2025, 2026, and 2027. |

  26. Outstanding Equity Awards at June 30, 2023

    | (6) Represents restricted stock units of the Company’s Common Stock. Subject to the terms and conditions of the Company’s Equity Incentive Plan and the related restricted stock unit agreement, including as described under “Compensation Plans and Arrangements” below, as of June 30, 2023, 20,243 of these restricted stock units are scheduled to vest on September 27, 2032 and the balance of these restricted stock units are scheduled to vest in four equal installments during September 2023, 2024, 2025, and 2026. The first such annual installment vested during September 2023. |

  27. Outstanding Equity Awards at June 30, 2023

    | (7) Represents restricted shares of the Company’s Common Stock. Subject to the terms and conditions of the Company’s Equity Incentive Plan and the related restricted stock award agreement, including as described below under “Compensation Plans and Arrangements,” these restricted shares are scheduled to vest on June 2, 2027. |

  28. Outstanding Equity Awards at June 30, 2023

    | (8) Represents restricted shares of the Company’s Common Stock. Subject to the terms and conditions of the Company’s Equity Incentive Plan and the related restricted stock award agreement, including as described below under “Compensation Plans and Arrangements,” as of June 30, 2023, these restricted shares were |

  29. Outstanding Equity Awards at June 30, 2023

    scheduled to vest on October 28, 2029. In accordance with the terms of the restricted stock award agreement, based on the Company’s results for the fiscal year ended June 30, 2023, 1,625 of the restricted shares vested on October 5, 2023 upon the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 on such date and 1,625 of the restricted shares are now scheduled to vest in four equal installments during October 2024, 2025, 2026, and 2027.

  30. Outstanding Equity Awards at June 30, 2023

    | (9) Represents restricted shares of the Company’s Common Stock. Subject to the terms and conditions of the Company’s Equity Incentive Plan and the related restricted stock award agreement, including as described below under “Compensation Plans and Arrangements,” as of June 30, 2023, 6,468 of these restricted shares were scheduled to vest on February 12, 2026, the date on which Mr. Lazar will reach the age of 62 (subject to an accelerated vesting schedule for 50% of such shares under certain circumstances), and the balance of these restricted shares is scheduled to vest in two remaining equal annual installments during November 2023 and 2024. In accordance with the terms of the restricted stock award agreement, based on the Company’s results for the fiscal year ended June 30, 2023, 1,617 of the restricted shares otherwise scheduled to vest on February 12, 2026 vested on October 5, 2023 upon the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 on such date and 1,617 of the restricted shares otherwise scheduled to vest on February 12, 2026 are now scheduled to vest in four equal installments during October 2024, 2025, 2026, and 2027. |

  31. Outstanding Equity Awards at June 30, 2023

    | (10) Represents restricted shares of the Company’s Common Stock. Subject to the terms and conditions of the Company’s Equity Incentive Plan and the related restricted stock award agreement, including as described below under “Compensation Plans and Arrangements,” 7,727 of these restricted shares are scheduled to vest on September 10, 2031 and the balance of these restricted shares is scheduled to vest on September 10, 2025. |

  32. Outstanding Equity Awards at June 30, 2023

    | (11) Represents restricted shares of the Company’s Common Stock. Subject to the terms and conditions of the Company’s Equity Incentive Plan and the related restricted stock award agreement, including as described under “Compensation Plans and Arrangements” below, as of June 30, 2023, 10,121 of these restricted shares are scheduled to vest on September 27, 2032 and the balance of these restricted stock shares are scheduled to vest in four equal installments during September 2023, 2024, 2025, and 2026. The first such annual installment vested during September 2023. |

  33. Outstanding Equity Awards at June 30, 2023

    As previously described, in addition to the restricted stock awards set forth in the table above, during October 2023, the Company, upon the approval of the Compensation Committee, granted (a) a restricted stock award of 166,667 shares of the Company’s Common Stock to Mr. Nahmad, (b) 18,519 restricted stock units to Mr. Marks, and (c) restricted stock awards of 9,134 shares of the Company’s Common Stock to Mr. Lazar. Subject to the terms and conditions of the Company’s Equity Incentive Plan and the applicable award agreements, these restricted stock awards and units are in each case scheduled to vest 50% on the ten-year anniversary of the grant date and 50% in four, equal annual installments commencing in October 2024.

  34. Pay Versus Performance

    Pay Versus Performance As required by Item 402(v) of Regulation S-K, the Company is providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For the most recently completed fiscal year, the Company did not use any “financial performance measures” as defined in Item 402(v) of Regulation S-K to link compensation paid to the Named Executive Officers to the Company’s performance. Pay Versus Performance Table The following table sets forth information concerning the compensation of the Named Executive Officers for each of the fiscal years ended June 30, 2023 and 2022, and the financial performance of the Company for each such fiscal year.

  35. Pay Versus Performance

    | Pay Versus Performance | | | | | | | | Year (a) | Summary Compensation Table Total for CEO (b)(1) | Compensation Actually Paid to CEO (c)(2) | Average Summary Compensation Table Total for Non-CEO NEOs (d)(1) | Average Compensation Actually Paid to Non-CEO NEOs (e)(2) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return (“TSR”) (f)(3) | Net Income (g) | | 2023 | $4,499,609 | $13,177,071 | $1,002,759 | $1,298,489 | $76 | $9,719,000 | | 2022 | $5,657,678 | $(16,551,261) | $526,06 | $(529,562) | $34 | $4,095,000 |

  36. Pay Versus Performance

    | (1) The Company’s CEO for 2023 and 2022 is Henry M. Nahmad, and its Non-CEO NEOs for whom the average compensation is presented in this table for 2023 and 2022 are Tom Marks and Robert H. Lazar. |

  37. Pay Versus Performance

    | (2) Compensation actually paid to the Company’s NEOs represents the “Total” compensation reported in the Summary Compensation Table for the applicable fiscal year, as adjusted as follows: |

  38. Pay Versus Performance

    | (3) Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. The Company did not pay any dividends during the fiscal year ended June 30, 2023 and 2022. |

  39. Pay Versus Performance

    | | 2023 | | 2022 | | | Adjustments | CEO | Average Non-CEO NEOs | CEO | Average Non-CEO NEOs | | Deduction for Amounts Reported under the “Stock Awards” Column in the Summary Compensation Table for Applicable FY | $(3,299,609) | $(494,934) | $(4,499,986) | $(127,500) | | Increase/deduction in Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | $1,153,851 | $173,075 | $(3,258,139) | $(76,036) | | Increase/deduction for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in Fair Value from Prior FY End to Applicable FY End | $10,634,543 | $615,134 | $(14,363,979) | $(853,055) | | Increase/deduction for Awards Granted during Prior FY that Vested During Applicable FY, determined based on change in Fair Value from Prior FY End to Vesting Date | $188,677 | $2,455 | $(86,835) | $968 | | Total Adjustments | $8,677,462 | $295,731 | $(22,208,939) | $(1,055,623) |

  40. Pay Versus Performance

    Relationship Between Financial Performance Measures While the Company utilizes several performance measures in order to align executive compensation with Company performance, all of those Company measures are not presented in the Pay Versus Performance table above. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation actually paid (which, for all purposes hereof, shall be as computed in accordance with SEC rules) for a particular year. In accordance with SEC rules, the Company is providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. Compensation Actually Paid and Cumulative Total Shareholder Return The following chart sets forth the relationship between the compensation actually paid to the Company’s Chief Executive Officer, the average of the compensation actually paid to the other Named Executive Officers, and the Company’s cumulative total shareholder return over the two most recently completed fiscal years. Compensation Actually Paid and Net Income The following chart sets forth the relationship between the compensation actually paid to the Company’s Chief Executive Officer, the average of the compensation actually paid to the other Named Executive Officers, and the Company’s net income for the two most recently completed fiscal years.

  41. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The Compensation Committee, with the input and assistance of the Company’s Chief Executive Officer, recommends director compensation to the full Board of Directors. The Board of Directors approves director compensation based on factors it considers to be appropriate, market conditions and trends, and the recommendation of the Compensation Committee. The compensation program for the Company’s non-employee directors is intended to assist the Company in attracting and retaining qualified directors, reward non-employee directors for their service on the Board and its committees through both equity awards and cash fees, and align the interests of the non-employee directors with those of stockholders. Pursuant to the program, each non-employee director currently receives annually a grant of $50,000 of restricted stock units (based on the closing price of the Company’s Common Stock on the date of grant), which generally vest in four equal annual installments beginning on the first anniversary of the grant date. The restricted stock units are granted under, and subject to, the Company’s Equity Incentive Plan and related restricted stock unit agreements. In addition, the Company’s compensation program for its non-employee directors also includes a cash component, pursuant to which (i) each non-employee director currently receives an annual cash fee of $5,000, (ii) the Chairman of the Audit Committee currently receives an additional annual cash fee of $12,000, (iii) each other member of the Audit Committee currently receives an additional annual cash fee of $4,000, (iv) the Chairman of the Compensation Committee currently receives an additional annual cash fee of $7,500, and (v) each other member of the Compensation Committee currently receives an additional annual cash fee of $5,000. The Company does not provide any tax gross-ups to its non-employee directors, all of whom are responsible for their respective tax obligations relating to their compensation for Board and committee service. Directors are also reimbursed for their reasonable out-of-pocket expenses incurred in connection with performing their duties. Directors of the Company who are also employees of the Company do not receive compensation for their service as directors, but are reimbursed for their reasonable out-of-pocket expenses incurred in connection with performing their duties as directors. Director Compensation Table – Fiscal 2023 The following table sets forth certain information regarding the compensation paid to the Company’s non-employee directors during fiscal 2023 in consideration for his service on the Board and its committees during the year.

  42. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash | Stock Awards(1) | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | | David Blyer | $10,000 | $50,000 | - | - | - | - | $60,000 | | Glen Kruger | $9,000 | $50,000 | - | - | - | - | $59,000 | | Timothy P. LaMacchia | $17,000 | $50,000 | - | - | - | - | $67,000 | | Hal M. Lucas | $12,500 | $50,000 | - | - | - | - | $62,500 |

  43. DIRECTOR COMPENSATION

    | (1) Represents the grant date fair value of 2,205 restricted stock units granted to each of Messrs. Blyer, Kruger, LaMacchia and Lucas during December 2022. The restricted stock units are scheduled to vest in equal annual installments on the first, second, third and fourth anniversary of the grant date. Assumptions used in the calculation of the grant date fair value of these restricted stock units are included in in Note 17 to the Company’s audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. |