DEF 14A of Lightpath Technologies Inc
Filed Oct 5, 2023 · FY20230001654954-23-012596
PROPOSAL 1 – ELECTION OF DIRECTORS
PROPOSAL 1 – ELECTION OF DIRECTORS
Biographical and Related Information – Director Nominees, Continuing Directors, and Executive Officers
Biographical and Related Information – Director Nominees, Continuing Directors, and Executive Officers The following is an overview of the biographical information for each of our director nominees, continuing directors, and executive officers, including their age, the year they became directors or officers, their principal occupations or employment for at least the past five years, and certain of their other directorships. Mr. Leeburg, who has served as a director since May 1996, is not eligible for reelection at the Annual Meeting under the director age limit set forth in the Company’s Bylaws. Accordingly, Mr. Leeburg has not been renominated and, effective as of the Annual Meeting, will be retiring as a director.
Nominees for Class III Directors
Nominees for Class III Directors
Nominees for Class III Directors
| Kim Crider, 59 Director Nominee | Ms. Crider is a highly experienced executive and has served as a director on boards for both private and public companies. She has held executive leadership positions in several multi-billion-dollar enterprises over the past 10 years, with deep expertise in aerospace, cybersecurity, data/AI and information technology. Ms. Crider presently has served as a member of the Board of Directors for the National Cybersecurity Center since July 2021, and for the Catalyst Campus for Technology & Innovation since January 2022. She also serves as a Board Advisor for Aalyria Technologies, Inc. a position she has held since January 2022. Ms. Crider served as a member of the Board of Directors of Virgin Orbit National Systems, LLC from April 2022 to August 2023. Ms. Crider is a founding partner and since its inception in May 2023, has served as the Co-Chief Executive Officer of Elara Nova Space Consultancy, LLC, a premier global advisory firm focused on the space sector. From 2016 to 2021, she was President of Kim Crider & Associates, LLC and Leadership Matters, LLC, specialized consulting firms providing executive consulting and coaching services to CEOs, CIOs, CTOs and other C-Suite leaders across industry sectors. A retired Major General in the United States Air Force, after serving in progressive leadership roles from 1986-2019, she also served as the first Chief Technology and Innovation Officer for the United States Space Force, Pentagon Washington D.C. from 2019 to 2021. Ms. Crider earned a Bachelor of Science degree in Electrical Engineering from Duke University in North Carolina, a Master of Business Administration degree from Western New England College in Massachusetts, a Master of Science in Military Studies from Air Command and Staff College in Alabama, a Master of Science in National Resource Strategy from National Defense University in Washington, D.C., and a Graduate Certificate in Organizational Behavior from Harvard University in Massachusetts. Ms. Crider’s expertise in corporate accountability, compliance, special security agreements, CEO transition/succession planning, cybersecurity risk management and oversight, uniquely qualifies her for service as one of our directors. |
Nominees for Class III Directors
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Nominees for Class III Directors
| Shmuel Rubin, 49 President & Chief Executive Officer, Director | Mr. Rubin has served as our President, Chief Executive Officer, and as a Director since March 2020. Mr. Rubin is also Chief Executive Officer and a director of LightPath Optical Instrumentation (Shanghai) Co., Ltd. (“LPOI”), our wholly-owned subsidiary located in Jiading, People’s Republic of China, LightPath Optical Instrumentation (Zhenjiang) Co., Ltd. (“LPOIZ”), our wholly-owned subsidiary located in the New City District, of the Jiangsu province of the People’s Republic of China, ISP Optics Corporation (“ISP”), our wholly-owned subsidiary, located in Orlando, Florida, and ISP Optics Latvia SIA (“ISP Latvia”), our wholly-owned subsidiary located in Riga, Latvia. Prior to joining us, Mr. Rubin was formerly the General Manager at Thorlabs Inc. (“Thorlabs”). In Mr. Rubin’s prior senior executive role at Thorlabs, he was responsible for Thorlabs’ Imaging Systems Division, a standalone organization with its own sales and marketing, as well as global responsibility for all of Thorlabs’ Life Science activities. Among the positions he held at Thorlabs, Mr. Rubin founded and grew Thorlabs’s fast growing operation in China, and spearheaded Thorlabs’ entry and significant growth in the Life Sciences market. As a member of the senior executive team, Mr. Rubin led new strategic initiatives for Thorlabs, including new product lines, acquisitions and growth into new markets. Prior to joining Thorlabs, Mr. Rubin co-founded Xlight Photonics, an optical communication startup, which was later sold to a telecommunications private equity firm. Mr. Rubin holds a Bachelor of Science degree in Electronic Engineering from Ben Gurion University, a Master of Business Administration degree from New York University, Stern School of Business, and is a graduate of the Executive Education, Program for Leadership Development at Harvard Business School. Mr. Rubin’s significant management experience in the optical industry qualifies him to lead us and our business and serve as one of our directors. |
Class II Directors
Class II Directors
Class II Directors
| M. Scott Faris, 58 Chair | Mr. Faris has served as a director of the Company since December 2011, and was appointed Chair, effective December 20, 2022. Mr. Faris is an experienced entrepreneur with almost two decades of operating, venture-financing, and commercialization experience, involving more than 20 start-up and emerging-growth technology companies. In October 2021, Mr. Faris was appointed Chief Executive Officer of ColdQuanta, Inc. Since September 2016, he had served as Chief Business Officer of Luminar Technologies, Inc., a leading developer of autonomous vehicle systems technologies including Lidar sensor suites. In June 2013, Mr. Faris founded Aerosonix, Inc. (formerly MicroVapor Devices, LLC), a privately held developer and manufacturer of advanced medical devices, and served as its Chief Executive Officer until August 2016 and has served as Chairman of the board of directors since June 2013. In 2002, Mr. Faris also founded the Astralis Group, a strategy advisor that provides consulting to start-up companies and, since 2004, Mr. Faris has served as its Chief Executive Officer. In August 2007, Mr. Faris founded Planar Energy, a company that developed transformational ceramic solid-state battery technology and products and served as its Chief Executive Officer until June 2013. Planar Energy is a spin-out of the U.S. Department of Energy’s National Renewable Energy Laboratory. From October 2004 to June 2007, Mr. Faris was a partner with Corporate IP Ventures (formerly known as MetaTech Ventures), an early-stage venture fund specializing in defense technologies. Mr. Faris also previously served as the Chairman and Chief Executive Officer of Waveguide Solutions, a developer of planar optical light wave circuit and micro system products, and as a director and Chief Operating Officer of Ocean Optics, Inc., a precision-optical-component and fiber-optic-instrument spin-out of the University of South Florida. Mr. Faris was also the founder and Chief Executive Officer of Enterprise Corporation, a technology accelerator, served as a director of the Florida Seed Capital Fund and Technology Commercialization at the Center for Microelectronics Research, and the Chairman of the Metro Orlando EDC. Mr. Faris received a Bachelor of Science degree in Management Information Systems from Penn State University in 1988. Mr. Faris’s significant experience in executive management positions at various optical component companies, his experience in the commercialization of optical and opto-electronic component technology, and his background in optics, technology, and venture capital qualify him for service as one of our directors. |
Class II Directors
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Class II Directors
| S. Eric Creviston, 59 Director | Mr. Creviston has served as one of our directors since March 2021. He has served as Corporate Vice President and President of Mobile Products for Qorvo Inc. (“Qorvo”) since January 2015. Prior to that, he served as the Corporate Vice President and President of Cellular Products Group for RF Micro Devices, Inc. (“RFMD”) from August 2007 to January 2015. From May 2002 to August 2007, he served as Corporate Vice President of Cellular Products Group (previously known as Wireless Products until 2004), for RFMD. Mr. Creviston received a Master’s degree in Electrical and Electronics Engineering from the University of Illinois. Mr. Creviston’s previous experience in various leadership roles in Qorvo and RFMD adds invaluable knowledge to our Board with respect to assessing our business strategies, evaluating operating performance, assessing risks, and evaluating potential merger and acquisition opportunities, all of which qualify him for service as one of our directors. | | Class I Directors | | | Dr. Joseph Menaker, 66 Director | Dr. Menaker was appointed to the Board in November 2018, and prior to that was a consultant to the Board beginning in March 2018, and prior to that was a consultant to us beginning in December 2016. From 1998 to 2016, he served as President of ISP, and as a director of its wholly owned subsidiary, ISP Latvia, until we acquired ISP in December 2016. Dr. Menaker is a graduate of Latvian State University, where he received his Bachelor and Master of Science degrees in Economics. In 1985, Dr. Menaker received a Doctor of Philosophy degree in Economics from Leningrad Institute of Finance and Economics. He co-founded UAV Factory Ltd. (“UAVF”) in Latvia in 2009 and served as its CEO from January 2017 to January 2021. Dr. Menaker continues to serve as a member of the Board of Directors for UAVF, which became part of Edge Autonomy Holdings. Edge Autonomy Holdings is a leading manufacturer of unmanned aerial vehicles. He also serves as a board member for Tsal Kaplun Foundation, a non-profit organization. Dr. Menaker’s expertise gained in various roles in financial management, international operations, and manufacturing high tech products and their applications for over thirty years, coupled with his knowledge gained as a researcher and analyst in economics provide invaluable knowledge to our Board and qualify him for service as one of our directors. | | Darcie Peck, 65 Director | Ms. Peck has served as one of our directors since November 2019. Ms. Peck served as a consultant to the Board beginning in April 2019. Prior to that she served as a Managing Partner of Cheer Partners, LLC, a start-up employee engagement consultancy firm from June 2017 through February 2019. From May 2013 until February 2016, Ms. Peck served as the Vice President Finance, Global Services for IMS Health Inc. (“IMS Health,” now IQVIA Holdings Inc.), a technology and analytics company serving life sciences companies near Danbury, Connecticut. From November 2009 until May 2013, Ms. Peck was Vice President Financial Planning and Analysis for IMS Health. From May 2002 through November 2009, Ms. Peck was Vice President Finance and Investor Relations for IMS Health. Prior to that, Ms. Peck was Vice President Finance, IBM Software Group (a division of International Business Machines Corp., or “IBM”) in Somers, New York from March 2001 to May 2002. From 1982 through to 2001, she held progressively increasing leadership responsibilities at IBM in finance, including Chief Financial Officer and General Manager of several acquired companies in technology, manufacturing, and computer leasing. Ms. Peck earned a Bachelor of Arts degree in Biology at the University of Rochester and a Master’s degree in Business Administration from New York University Stern Graduate School of Business Administration. Ms. Peck’s expertise in executive leadership, financial and strategic planning, investor relations, international business, general management, business and pricing acumen, and high technology manufacturing process knowledge, uniquely qualifies her for service as one of our directors. |
Class II Directors
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Executive Officer Stock Ownership Requirements
| Name | Class A common stock | Stock Options (1) | Restricted Stock Units | Restricted Stock Awards | Total Amount of Shares of Class A Common Stock Beneficially Owned | Stock Price at June 30, 2023 | Market Value at June 30, 2023 | Base Salary | % of Salary | | Shmuel Rubin | 106,617 | — | 145,496 | 6,058 | 258,171 | $1.35 | $348,531 | $360,500 | 97% | | Albert Miranda | 18,553 | — | 41,460 | 3,894 | 63,907 | $1.35 | $86,274 | $231,750 | 37% |
2023 Incentive Program
2023 Incentive Program Our fiscal year 2023 incentive program has two key components: (i) the Short-Term Incentive (“STI”) program, and (ii) the Long-Term Incentive (“LTI”) program. The STI program is comprised of awards based on our achievement of specific fiscal year 2023 financial objectives (the “2023 STI Award”). The LTI program is comprised of (i) an individual RSU award, based on total shareholder return (the “2023 TSR Award”), which is calculated based on the overall change in LPTH stock price per share, as compared to the Russell MicroCap Index, and (ii) retention RSUs that will vest in three equal annual installments (the “2023 Retention RSU Award” and, together with the 2023 LTI TSR Award, the “2023 LTI Awards”). Our incentive program includes different levels of bonus opportunity based on a participant’s position with the Company. For fiscal year 2023, Mr. Rubin was the only “level one” participant, and Mr. Miranda was a “level two” participant. Bonus opportunities for Mr. Rubin and Mr. Miranda for fiscal year 2023 were calculated by applying designated portions of their respective bonus pool amounts, which were set by the Compensation Committee, to formulas for each of the components of the STI and LTI programs, as applicable.
STI Program
STI Program For both the level one and level two participant, the 2023 STI Award was based on the achievement of corporate financial objectives and personalized goals, with a minimum of 60% of the EBITDA target required to earn any bonus. The corporate financial objectives are as follows: (i) EBITDA (which is earnings before income, taxes, depreciation, and amortization) (the “EBITDA Component”); and (ii) revenue growth over that of the prior fiscal year (the “Revenue Component”). The EBITDA Component was weighted at 60%, the Revenue Component was weighted at 20%, and the personalized goals were weighted at 20%. For fiscal year 2023, the bonus pool amounts for the 2023 STI Award for Mr. Rubin and Mr. Miranda were set at $186,377 and $94,500, respectively. The Compensation Committee determined that achievement of the 2023 STI Award would be paid in cash and stock options, with the percentage split of the payout to be determined at the discretion of the Board. EBITDA Component In order for the participants to earn a bonus with respect to the EBITDA Component, we had to meet or exceed a minimum EBITDA target established by the Compensation Committee for fiscal year 2023. Further, we had to meet or exceed at least 60% of that EBITDA target in order to earn any portion of the 2023 STI Award. For fiscal year 2023, EBITDA was a loss of approximately $355,000, which was below the target amount. The achieved EBITDA also did not meet 60% of the EBITDA target. Accordingly, Mr. Rubin and Mr. Miranda did not earn any portion of the 2023 STI Award.
STI Program
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LTI Program
LTI Program The 2023 LTI Awards are comprised of two components: (i) the 2023 Retention RSU Award and (ii) the 2023 TSR Award. For fiscal year 2023, the bonus pool amounts for the 2023 LTI Award for Mr. Rubin and Mr. Miranda were set at $158,635 and $68,871, respectively. The bonus pool amounts for the 2023 Retention RSU Award and the 2023 TSR Award would each be 50% of the respective bonus pool amount for the 2023 LTI Award. 2023 Retention RSU Award The 2023 Retention RSU Award was calculated to be $79,318 and $34,436 for Mr. Rubin and Mr. Miranda, respectively. The RSUs were granted on November 17, 2022, based on the closing bid price of $1.18 on that day, with one-third of the RSUs to vest on each of the first, second and third anniversaries of the grant date. 2023 TSR Award In order to earn the 2023 TSR Award, the TSR calculated for LPTH stock was measured against the Russell MicroCap Index. TSR is calculated as the overall change in LPTH’s stock price per share from the beginning of fiscal year 2023 to the end of fiscal year 2023, divided by the stock price per share at the beginning of the fiscal year. The calculated TSR for fiscal year 2023 was more favorable than the change in the Russell MicroCap Index, therefore the 2023 TSR Award was earned. The 2023 TSR Award was calculated to be $79,318 and $34,436 for Mr. Rubin and Mr. Miranda, respectively. The RSUs will be granted in November 2023, following the annual meeting, based on the closing bid price on that day, with one-third of the RSUs to vest on each of the first, second and third anniversaries of the grant date.
2022 Incentive Program
2022 Incentive Program Our fiscal year 2022 incentive program has two key components: (i) the Short-Term Incentive (“STI”) program, and (ii) the Long-Term Incentive (“LTI”) program. The STI program is comprised of awards based on our achievement of specific fiscal year 2022 financial objectives (the “2022 STI Award”). The LTI program is comprised of (i) an individual RSU award, based on total shareholder return (the “2022 TSR Award”), which is calculated based on the overall change in LPTH stock price per share, as compared to the Russell MicroCap Index, and (ii) retention RSUs that will vest in three equal annual installments (the “2022 Retention RSU Award” and, together with the 2022 LTI TSR Award, the “2022 LTI Awards”). Our incentive program includes different levels of bonus opportunity based on a participant’s position with the Company. For fiscal year 2022, Mr. Rubin was the only “level one” participant, and Mr. Miranda was a “level two” participant. Bonus opportunities for Mr. Rubin and Mr. Miranda for fiscal year 2022 were calculated by applying designated portions of their respective bonus pool amounts, which were set by the Compensation Committee, to formulas for each of the components of the STI and LTI programs, as applicable.
STI Program
STI Program For both the level one and level two participant, the 2022 STI Award was based on the achievement of corporate financial objectives and personalized goals, with a minimum of 60% of the EBITDA target required to earn any bonus. The corporate financial objectives are as follows: (i) EBITDA (which is earnings before income, taxes, depreciation, and amortization) (the “EBITDA Component”); and (ii) revenue growth over that of the prior fiscal year (the “Revenue Component”). The EBITDA Component was weighted at 60%, the Revenue Component was weighted at 20%, and the personalized goals were weighted at 20%. For fiscal year 2022, the bonus pool amounts for the 2022 STI Award for Mr. Rubin and Mr. Miranda were set at $186,377 and $94,500, respectively. The Compensation Committee determined that achievement of the 2022 STI Award would be paid in cash and stock options, with the percentage split of the payout to be determined at the discretion of the Board. EBITDA Component In order for the participants to earn a bonus with respect to the EBITDA Component, we had to meet or exceed a minimum EBITDA target established by the Compensation Committee for fiscal year 2022. Further, we had to meet or exceed at least 60% of that EBITDA target in order to earn any portion of the 2022 STI Award.
STI Program
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STI Program
We achieved an EBITDA of $1.2 million for fiscal year 2022, which was below the target amount. The achieved EBITDA also did not meet 60% of the EBITDA target. Accordingly, Mr. Rubin and Mr. Miranda did not earn any portion of the 2022 STI Award.
LTI Program
LTI Program The 2022 LTI Awards are comprised of two components: (i) the 2022 Retention RSU Award and (ii) the 2022 TSR Award. For fiscal year 2022, the bonus pool amounts for the 2022 LTI Award for Mr. Rubin and Mr. Miranda were set at $158,635 and $68,871, respectively. The bonus pool amounts for the 2022 Retention RSU Award and the 2022 TSR Award would each be 50% of the respective bonus pool amount for the 2022 LTI Award. 2022 Retention RSU Award The 2022 Retention RSU Award was calculated to be $79,318 and $34,436 for Mr. Rubin and Mr. Miranda, respectively. The RSUs were granted on November 11, 2021, based on the closing bid price of $1.87 on that day, with one-third of the RSUs to vest on each of the first, second and third anniversaries of the grant date. 2022 TSR Award In order to earn the 2022 TSR Award, the TSR calculated for LPTH stock was measured against the Russell MicroCap Index. TSR is calculated as the overall change in LPTH’s stock price per share from the beginning of fiscal year 2022 to the end of fiscal year 2022, divided by the stock price per share at the beginning of the fiscal year. The calculated TSR for fiscal year 2022 was less favorable than the change in the Russell MicroCap Index, therefore the 2022 TSR Award was not earned.
2021 Incentive Program
2021 Incentive Program The 2021 incentive program included a multi-year award with performance targets for fiscal years 2021, 2022 and 2023. No points were earned toward this award; however, the plan structure is included below to describe the potential bonus that could have been earned in fiscal year 2023. 2021 LTI Multi-Year Award The 2021 LTI Multi-Year Award is a corporate performance-based equity award based on the achievement of pre-established financial performance metrics over a three-year performance period. In order to determine Mr. Rubin’s 2021 LTI Multi-Year Award bonus opportunity, the portion of such participant’s bonus pool amount applicable to the 2021 LTI Awards calculation, or $120,000, was multiplied by 60%. Thus, Mr. Rubin’s bonus opportunity for the 2021 LTI Multi-Year Award was $72,000. The performance metrics upon which the 2021 LTI Multi-Year Award was based are as follows: (i) revenue (the “LT Revenue Component”); (ii) book value per share of Class A common stock (the “LT Book Value Component”); and (iii) EBITDA margin (the “LT EBITDA Component”). The Compensation Committee set a target for each component for each year during the three-year period (July 1, 2020 through June 30, 2023). Each performance component is valued at “one point” for each year during the three-year period. For each performance component for which the target is achieved, the participants each earn “one point.” Thus, the LT Revenue Component is worth one point per year during the three-year performance period, the LT Book Value Component is worth one point per year during the three-year performance period, and the LT EBITDA Component is worth one point per year during the three-year performance period.
2021 Incentive Program
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2021 Incentive Program
The payout opportunity based on the number of total points earned during the three-year performance period is shown in the table below.
2021 Incentive Program
| Number of Points Earned | Percentage of Payout of the 2021 LT Multi-Year Award | | 0-3 | 0% | | 4 | 50% | | 5 | 60% | | 6 | 75% | | 7 | 100% | | 8 | 110% | | 9 | 125% |
2021 Incentive Program
Each component of the 2021 LTI Multi-Year Award is evaluated independently of the other components during each year of the performance. During fiscal year 2021, the Compensation Committee determined that in connection with the 2021 LTI Multi-Year Award, the RSU award would be granted in the first year of the three-year period but would not vest until the end of the period, with such vesting based on the number of points earned.
Summary Compensation Table
Summary Compensation Table The following table sets forth certain compensation awarded to, earned by or paid to (i) any individuals serving as our Chief Executive Officer during fiscal year 2023 and (ii) our two other most highly compensated executive officers serving as executive officers at the end of fiscal year 2023 Mr. Miranda was the only other individual serving as an executive officer at the end of fiscal year 2023.
Summary Compensation Table
| Name and Position | Fiscal Year | Salary ($) | Stock Awards ($) (1) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation Compensation ($) (3) | Total ($) | | (a) | (b) | (c) | (e) | (f) | (g) | (i) | (j) | | Shmuel Rubin | 2023 | $360,500(4) | $171,765(4) | — | — | $21,457 | $553,722 | | President & Chief Executive Officer | 2022 | $357,269(4) | $79,742(4) | — | — | $14,920 | $451,931 | | Albert Miranda | 2023 | $231,750(5) | $78,959(5) | — | — | $19,445 | $330,154 | | Chief Financial Officer | 2022 | $229,673(5) | $34,619(5) | — | — | $10,002 | $274,294 |
Summary Compensation Table
Notes:
Summary Compensation Table
| (1) For valuation assumptions on stock awards refer to Note 9 to the Consolidated Financial Statements of our Annual Report on Form 10-K for fiscal year 2023. The disclosed amounts reflect the fair value of the RSU awards that were earned during the fiscal years ended June 30, 2023 and 2022 in accordance with FASB ASC Topic 718. | | (2) For valuation assumptions on stock option awards refer to Note 9 to the Consolidated Financial Statements of our Annual Report on Form 10-K for fiscal year 2023. The disclosed amounts reflect the fair value of the stock option awards that were earned during the fiscal years ended June 30, 2023 and 2022 in accordance with FASB ASC Topic 718. | | (3) “All Other Compensation,” as defined by SEC rules does not include the amounts that qualify under the applicable de minimis rule for all periods presented. The de minimis rules does not require reporting of perquisites and other compensation that totals less than $10,000 in the aggregate. For fiscal year 2023 and 2022, the nature of these compensatory items includes our contribution toward the premium costs for employee and dependent medical, life, and disability income insurances, benefits generally available to our employees, vacation buyout, and the Company’s match on contributions under the 401k plan. | | (4) Mr. Rubin’s base salary was 65% and 79% of his total compensation for fiscal years 2023 and 2022, respectively. For fiscal year 2023, Mr. Rubin was granted an RSU Award in connection with the 2023 Retention RSU Award and was also granted an RSA Award in lieu of an adjustment to his cash compensation. For fiscal year 2022, Mr. Rubin was granted an RSU award in connection with the 2022 Retention RSU Award. The amounts in the table reflect the fair value of these awards in accordance with FASB ASC Topic 718. For additional information with respect to this grant, including the vesting schedules, please see “Discussion of Summary Compensation Table of Named Executive Officers” below. | | (5) Mr. Miranda’s base salary was 70% and 84% of his total compensation for fiscal years 2023 and 2022, respectively. For fiscal year 2023, Mr. Miranda was granted an RSU Award in connection with the 2023 Retention RSU Award and was also granted an RSA Award in lieu of an adjustment to his cash compensation. For fiscal year 2022, Mr. Miranda was granted an RSU award in connection with the 2022 Retention RSU Award. The amount in the table reflects the fair value of this award in accordance with FASB ASC Topic 718. For additional information with respect to these grants, including the vesting schedules, please see “Discussion of Summary Compensation Table of Named Executive Officers” below. |
Summary Compensation Table
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Potential Payments Upon Termination or Change-of-Control
Potential Payments Upon Termination or Change-of-Control Neither Mr. Rubin nor Mr. Miranda are entitled to any payments upon termination or change-of-control.
Potential Payments Upon Termination or Change-of-Control
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Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | RSU & RSA Awards | | | | (a) | (b) | (c) | (e) | (f) | (g) | (h) | | | Name | Number of | Number of | Option | Option | Number of | Market | Vesting | | | Securities | Securities | Exercise | Expiration | Shares or | Value of | Schedule | | | Underlying | Underlying | Price ($) | Date | Units of | Shares or | | | | Unexercised | Unexercised | | | Stock That | Units of | | | | Options (#) | Options (#) | | | Have Not | Stock | | | | Exercisable | Unexercisable | | | Vested | That | | | | | | | | | Have Not | | | | | | | | | Vested | | | Shmuel Rubin | 150,000 | 75,000 | $1.58 | | | | 50,000 shares/yr for 3 yrs; 75,000 shares on 4th anniversary | | | | | | 2/24/2030 | 50,000 | $67,500 | 50,000 shares vest on 3rd and 4th anniversary | | | | | | 11/11/2031 | 28,277 | $38,174 | 3 years, 1/3 per year | | | | | | 11/17/2032 | 67,219 | $90,746 | 3 years, 1/3 per year | | | | | | 1/1/2033 | 6,058 | $8,178 | 1 year, 25% per quarter | | Albert Miranda | 37,500 | 37,500 | $3.02 | 4/19/2031 | | | 25%/yr for 4 yrs | | | | | | 11/11/2031 | 12,277 | $16,574 | 3 years, 1/3 per year | | | | | | 11/17/2032 | 29,183 | $39,397 | 3 years, 1/3 per year | | | | | | 1/1/2033 | 3,894 | $5,257 | 1 year, 25% per quarter |
Outstanding Equity Awards at Fiscal Year-End
The stock options were issued pursuant to the Incentive Plan and have a ten-year life. The options will terminate 90 days after termination of employment, or in the case of termination due to death or permanent disability, the options will terminate one year after the date of termination.
Outstanding Equity Awards at Fiscal Year-End
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DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Director Compensation
Director Compensation The table below summarizes the compensation paid by us to non-employee directors for fiscal year 2023.
Director Compensation
| | Fees Earned or | Stock | All Other | Total | | Name (1) | Paid in Cash | Awards | Compensation | ($) | | | ($)(2) | ($)(4) | ($) | | | (a) | (b) | (c) | (g) | (h) | | M. Scott Faris, Chair | $46,500 | $60,000 | $- | $106,500 | | Louis Leeburg | $50,500 | $60,000 | $- | $110,500 | | Sohail Khan | $19,000(3) | $60,000 | $- | $79,000 | | Craig Dunham | $20,000(3) | $60,000 | $- | $80,000 | | Dr. Joseph Menaker | $36,000 | $60,000 | $- | $96,000 | | Darcie Peck | $36,000 | $60,000 | $- | $96,000 | | S. Eric Creviston | $39,000 | $60,000 | $- | $99,000 |
Director Compensation
| (1) Shmuel Rubin, our President and Chief Executive Officer during fiscal year 2023, is not included in this table as he was an employee and, thus, received no compensation for his services as a director. The compensation received by Mr. Rubin as an employee is disclosed in the Summary Compensation Table on page 26. | | (2) Total fees earned for fiscal year 2023 includes all fees earned, including earned but unpaid fees. The amounts of unpaid fees for each director as of June 30, 2023, were as follows: Mr. Faris - $13,750, Mr. Leeburg - $11,000, Dr. Menaker - $9,000, Ms. Peck - $9,000 and Mr. Creviston - $10,000. | | (3) Mr. Khan and Mr. Dunham retired during fiscal 2023, and were compensated through the last quarter they served as directors. | | (4) The table reflects the fair value amount for RSUs granted for the fiscal year ended June 30, 2023, in accordance with ASC Topic 718. The directors were entitled to a restricted stock award equal to $60,000. The Company has a policy of granting performance-related stock options and RSUs at the greater of the closing bid price of our Class A common stock on the grant date or the book value per share of our Class A common stock as of the end of the most recent fiscal quarter. The fiscal year 2023 director award of 50,847 RSUs was based on the closing bid price of our Class A common stock on the grant date, or $1.18. |
Cash Compensation Paid to Board Members
| | Board Fee | Chair Fee | Committee Chair Fee | Total Fees Earned for Fiscal Year 2023 | | M. Scott Faris | $36,000 | $7,500 | $3,000 | $46,500 | | Louis Leeburg | $36,000 | $7,500 | $7,000 | $50,500 | | Sohail Khan | $18,000 | | $1,000 | $19,000 | | Craig Dunham | $18,000 | | $2,000 | $20,000 | | Dr. Joseph Menaker | $36,000 | | | $36,000 | | Darcie Peck | $36,000 | | | $36,000 | | S. Eric Creviston | $36,000 | | $3,000 | $39,000 | | Shmuel Rubin (1) | $- | | | $- |
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation and certain financial performance of our Company for each of the last two completed fiscal years. In determining the “compensation actually paid” to our named executive officers (“NEOs”), including our principal executive officer (“PEO”), we are required to make various adjustments to amounts that have previously been reported in the Summary Compensation Table in previous years, as the SEC’s calculation method for this section differs from those required in the Summary Compensation Table.
Pay Versus Performance Table
Pay Versus Performance Table The table below presents information on the compensation of our NEOs in comparison to certain performance metrics for 2023 and 2022. The metrics are not those that the Compensation Committee of our Board uses when setting executive compensation. The use of the term “compensation actually paid” (“CAP”) is required by the SEC’s rules. Neither CAP nor the total amount reported in the Summary Compensation Table reflect the amount of compensation actually paid, earned or received during the applicable year. Per SEC rules, CAP was calculated by adjusting the Summary Compensation Table total values for the applicable years.
Pay Versus Performance Table
| Year (1) | Summary Compensation Table Total for PEO (2) | Compensation Actually Paid to PEO (3) | Average Summary Compensation Table Total for non-PEO Named Executive Officers (4) | Average Compensation Actually Paid to non-PEO Named Executive Officers (5) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return (6) | Net Income (Loss) (7) | | 2023 | $553,722 | $471,624 | $330,154 | $285,463 | $53.94 | $(4,046,871) | | 2022 | $451,931 | $359,717 | $274,294 | $262,325 | $48.43 | $(3,542,181) |
Pay Versus Performance Table
| (1) Data presented for our last two fiscal years in compliance with Item 402(v)(8). | | (2) Represents total compensation to Shmuel Rubin, who served as our Chief Executive Officer and sole PEO during 2023 and 2022. | | (3) The dollar amounts reported in this column represent the average amount of “compensation actually paid” to Mr. Rubin, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to Mr. Rubin during the applicable year. The following adjustments were made to Mr. Rubin’s total compensation for each year to determine “compensation actually paid” in accordance with SEC regulations: |
Pay Versus Performance Table
| | Adjustments to Determine CAP for PEO | | | Fiscal Year | 2023 | 2022 | | Average Total from Summary Compensation Table | $553,722 | $451,931 | | (-) Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | (171,765) | (79,742) | | (+) Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | 100,389 | 52,172 | | (+) / (-) Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | (15,421) | (64,644) | | (+) / (-) Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | 4,699 | — | | Compensation Actually Paid | $471,624 | $359,717 |
Pay Versus Performance Table
| (4) Represents the total compensation to Albert Miranda, who served as our Chief Financial Officer and sole Non-PEO named executive officer during 2023 and 2022. |
Pay Versus Performance Table
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Pay Versus Performance Table
| (5) The dollar amounts reported in this column represent the average amount of “compensation actually paid” to Mr. Miranda, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to Mr. Miranda during the applicable year. The following adjustments were made to the Non-PEO NEO total compensation for each year to determine “compensation actually paid” in accordance with SEC regulations: |
Pay Versus Performance Table
| | Adjustments to Determine CAP for non-PEO NEO | | | Fiscal Year | 2023 | 2022 | | Average Total from Summary Compensation Table | $330,154 | $274,294 | | (-) Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | (78,959) | (34,619) | | (+) Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | 45,315 | 22,650 | | (+) / (-) Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | (6,261) | — | | (+) / (-) Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | (4,786) | — | | Compensation Actually Paid | $285,463 | $262,325 |
Pay Versus Performance Table
| (6) As we have not paid dividends, cumulative total shareholder return ("TSR") is calculated by dividing $100 by the last closing price in fiscal year 2021 to obtain a number of shares, and multiplying that number of shares by the closing price on the last trading day of the relevant measurement period. | | (7) The dollar amounts reported represent the amount of net income reflected in the Company’s audited consolidated financial statements for the applicable year. |
Relationship Disclosure to Pay Versus Performance Table
Relationship Disclosure to Pay Versus Performance Table In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following descriptions of the relationships between information presented in the Pay Versus Performance table. Compensation Actually Paid and Cumulative TSR The following chart sets forth the relationship between compensation actually paid to the PEO and the NEO, compared to our cumulative TSR for each the years presented:
Relationship Disclosure to Pay Versus Performance Table
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Relationship Disclosure to Pay Versus Performance Table
Compensation Actually Paid and Net Income (Loss) The following chart sets forth the relationship between compensation actually paid to the PEO and the NEO, compared to our net loss reported in our most recent 10-K filings for each of the years presented:
Relationship Disclosure to Pay Versus Performance Table
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