SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant ☒ | |||
Filed by a Party other than the Registrant ☐ | ☐ |
Preliminary Proxy Statement | ||
☐ | Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2)). | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-12 |
PROCYON CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ | No fee required | |
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
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☐ | Fee paid previously with preliminary materials. | ||
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PROCYON CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held NovemberJanuary 10, 20202023
IMPORTANTNOTICEREGARDINGTHEAVAILABILITYOFPROXYMATERIALSFORTHEANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBERJANUARY 10,2020: 2023:
This Proxy Statement and the Annual Report on Form 10-K for the year ended June 30, 20202022 are available on the
Company’s internet website at http://www.procyoncorp.com/investor-relations.html
Notice is hereby given that the Annual Meeting of Shareholders of Procyon Corporation, a Colorado corporation (the “Company”), will be held at theour new offices of Procyon Corporation, 1300 S. Highland Ave, Clearwater,164 Douglas Road East, Oldsmar, Florida 3375634677 on Tuesday, NovemberJanuary 10, 2020,2023, at 4:00 p.m. Eastern Time, or at any adjournment or adjournments thereof, for the following purposes:
1. | To elect seven directors to hold office for the term set forth in the accompanying Proxy Statement and until their successors shall have been duly elected and qualified; |
2. | To ratify the appointment of Ferlita, Walsh, Gonzalez & Rodriguez, P.A. as independent registered public accountants for the |
3. | To approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Procyon Corporation |
4. | To indicate, on an advisory basis, the preferred frequency of shareholder advisory votes on the compensation of Procyon Corporation’s named executive officers; |
5. | To consider and transact such other business as may properly come before the meeting or any adjournment thereof. |
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING, although only shareholders of record at the close of business on SeptemberNovember 21, 2020,2022, will be entitled to notice of, and to vote at, the meeting or any adjournment thereof. The transfer books of the Company will not be closed.
By Order of the Board of Directors, |
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Justice W. Anderson | |||
Chief Executive Officer | |||
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Clearwater, Florida
December 6, 2022
IMPORTANT
PLEASE MARK, DATE, SIGN, NOTE ANY CHANGE OF ADDRESS AND RETURN THE ENCLOSED PROXY CARD IMMEDIATELY IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, WE WILL BE GLAD TO RETURN YOUR PROXY SO THAT YOU MAY VOTE IN PERSON.
PROCYON CORPORATION1300 S. HIGHLAND AVENUECLEARWATER,
164 DOUGLAS RD E.
OLDSMAR, FLORIDA 3375634677
(727) 447-2998
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held NovemberJanuary 10, 2020
2023
4:00 p.m. Eastern Time
General
The enclosed proxy is solicited by the Board of Directors of Procyon Corporation (hereinafter referred to as the “Company” or “we”) for use at the Annual Meeting of Shareholders to be held at the Procyon Corporation, 1300 S. Highland Ave.164 Douglas Rd. E., Clearwater,Oldsmar, Florida at 4:00 p.m., Eastern Time, on Tuesday, NovemberJanuary 10, 2020,2023, for the purposes set forth in the foregoing Notice of Annual Meeting of Shareholders. This Proxy Statement and the form of proxy will be mailed to shareholders on or about October 9, 2020.December 6, 2022. A shareholder giving a proxy has the power to revoke it at any time prior to its exercise by notifying the Secretary of the Company. Unless the proxy is revoked, or unless it is received in such form as to render it invalid, the shares represented by it will be voted in accordance with the instructions contained therein.
The record date with respect to this solicitation is SeptemberNovember 21, 2020.2022. All holders of record of Common Stock and Preferred Stock of the Company as of the close of business on that date are entitled to vote at the meeting. As of SeptemberNovember 21, 2020,2022, the Company had a total of 8,254,488 voting shares issued and outstanding consisting of 8,087,388 of Common shares, and 167,100 shares of Preferred Stock. Each Common and Preferred share is entitled to one vote. A majority of the votes entitled to be cast constitutes a quorum. If a quorum exists, action on any matter other than the election of directors will be approved if the votes cast in person or by proxy at the meeting favoring the action exceed the votes cast opposing the action. In the election of directors, that number of candidates equaling the number of directors to be elected having the highest number of votes cast in favor of their election will be elected. Abstentions and broker non-votes are not counted in the calculation of the vote. The Company’s officers and directors and director nominees, who are expected to vote for the directors nominated by the Board of Directors and to vote in accordance with the recommendations of the Board of Directors, own a majority of the Company’s outstanding shares. A shareholder may revoke a proxy at any time prior to its being voted. If a proxy is properly signed and is not revoked by the shareholder, the shares it represents will be voted at the meeting in accordance with the instructions of the shareholder. If the proxy is signed and returned without specifying choices, the shares will be voted in accordance with the recommendations of the Board of Directors. The cost of this solicitation will be borne by the Company. Employees and directors of the Company may solicit proxies on behalf of the Company but will not receive any additional compensation for such solicitation. Proxies may be solicited personally or by mail, email, facsimile or telephone.
As a matter of policy, the Company holds proxies, ballots and voting tabulations that identify individual shareholders confidential. Such documents are available for examination only by the inspectors of election, none of whom is an employee of the Company, and certain employees associated with tabulation of the vote. The identity of the vote of any shareholder is not disclosed except as may be necessary to meet legal requirements.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Under the securities laws of the United States, the Company’s directors, its executive officers, and any persons holding more than ten percent of the Company’s Common Stock are required to report their initial ownership of the Company’s Common Stock and any subsequent changes in that ownership to the Securities and Exchange Commission and the Company. Specific due dates for these reports have been established and the Company is required to disclose any failure to file, or late filing, of such reports. Based solely on the Company’s review of the reports and amendments thereto furnished to the Company and written representations that no other reports were required to be filed in fiscal 2020,2022, the Company’s officers, directors and beneficial owners of more than ten percent of its Common Stock complied with all Section 16(a) filing requirements.
CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
We adopted a written policy that requires Board approval by a disinterested majority of the directors voting for any transaction in which one of our directors, nominees for director, executive officers or greater than five percent stockholders, or their immediate family members, have a material interest. All of our directors and executive officers are required at all times, but not less than annually, to disclose all relationships they have with companies or individuals that have conducted business with, or had an interest in, our Company. Our executive officers monitor our operations, giving consideration to the disclosed relationships, and refer potential transactions to the Board of Directors for approval. The Board of Directors considers a related party transaction for its potential economic benefit to us, to ensure the transaction is, among other things, on terms no less favorable to us than those involving unrelated parties, in accordance with our policies and procedures, and that it is properly disclosed in our reports to shareholders.
Other than transactions described below, since July 1, 2019,2021, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or will be a party:
in which the amount involved exceeds $120,000; and,
in which any director, nominee for director, executive officer, shareholder which beneficially owns five percent or more of our common stock or any member of their immediate family members, had or will have a direct or indirect material interest.
Justice W. Anderson, our Chief Executive Officer, personally guaranteed a new $250,000 line of credit of which $0 was drawn out as of June 30, 2020.2022.
We have determined that each of our directors, except Regina W. Anderson, Justice W. Anderson and James B. Anderson, are independent within applicable rules of The NASDAQ Stock Market® (“NASDAQ Rules”). Therefore, a majority of our Board of Directors, and each member of the Audit and Compensation Committees, are independent within applicable NASDAQ rules. Further, each member of our Audit Committee is also considered independent under SEC Rule 10A-3.
ANNUAL REPORT
The Annual Report to Shareholders for the year ended June 30, 20202022 (“fiscal 2020"2022") is being sent to all shareholders with this Proxy Statement. The Annual Report to Shareholders does not form any part of the material for the solicitation of any Proxy. The Annual Report to Shareholders contains the Company’s Annual Report on Form 10-K for fiscal 2020,2022, as filed with the Securities and Exchange Commission on October 6, 2020.September 28, 2022. An additional copy of such Report, without exhibits, is available without charge to any shareholder of the Company upon written request to James B. Anderson, Procyon Corporation, 1300 S. Highland Ave., Clearwater,164 Douglas Road East, Oldsmar, Florida 33756.34677. The Annual Report to Shareholders is also available online at http://www.procyoncorp.com/investor-relations.html.
SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 (the “Exchange Act”), some stockholder proposals may be eligible for inclusion in the Company’s Proxy Statement for next year’s Annual Meeting, the Company’s fiscal 20222023 Annual Meeting. Shareholders who intend to submit proposals for inclusion in the 20222024 Proxy Statement must do so by sending the proposal and supporting statements, if any, to the Company no later than June 11, 2021,15, 2023, and must meet the requirements of Rule 14a-8 under the Exchange Act. Such proposals should be sent to the attention of the Corporate Secretary, Procyon Corporation, 1300 S. Highland Ave, Clearwater,164 Douglas Road East, Oldsmar, Florida 33756.34677. The submission of a stockholder proposal does not guarantee that it will be included in the Company’s Proxy Statement. If a shareholder intends to present a proposal for consideration at the 20222023 annual meeting outside of the processes of Rule 14a-8 under the Exchange Act, the SEC rules permit management to vote proxies in its discretion if we receive notice of the proposal before the close of business on August 25, 202129, 2023 and advise shareholders in our proxy statement for next year’s annual meeting about the nature of the matter and how our management intends to vote on such matter.
SHAREHOLDER COMMUNICATIONS WITH THE BOARD
The Board of Directors of the Company has implemented a process whereby shareholders may send communications to the Board’s attention. Any shareholder desiring to communicate with the Board, or one or more specific members thereof, should communicate in a writing addressed to Procyon Corporation, 1300 S. Highland Ave., Clearwater,164 Douglas Road East, Oldsmar, Florida 33756.34677. The Corporate Secretary of the Company has been instructed by the Board to promptly forward all such communications to the specified addressees thereof.
OTHER MATTERS
Except for the matters described herein, management does not intend to present any matter for action at the Annual Meeting and knows of no matter to be presented at such meeting that is a proper subject for action by the shareholders. However, if any other matters should properly come before the Annual Meeting, it is intended that votes will be cast pursuant to the authority granted by the enclosed Proxy in accordance with the best judgment of the person or person acting under the Proxy.
PROPOSALS TO BE VOTED UPON
I. ELECTION OFDIRECTORS
Information concerning the seven nominees for election as directors is shown below. If elected, each nominee will serve as director for a one-year term or until his or her successor is elected and qualified. Effective October 1, 2015, the Board of Directors has changed the number of directors from eight to seven. All nominees are now members of the Board of Directors and all nominees have been unanimously nominated to stand for election or re-election by the Board of Directors, which performs the functions of a nominating committee, and which is composed of a majority of “independent” directors, within the meaning of the applicable listing standards of The NASDAQ Stock Market® (“NASDAQ Rules”). If any nominee should for any reason become unable to serve, the shares represented by all valid proxies will be voted for the election of such other person as the Board of Directors may designate or the Board of Directors may reduce the number of directors to eliminate the vacancy. If the nominees for director are re-elected, the Board will continue to be composed of a majority of independent directors.
The following material contains information concerning the nominees, including their recent employment, positions with the Company, other directorships and age as of the date of this Proxy Statement.
Name | Age | Capacities in Which Served | Director | Age | Capacities in Which Served | Director Since | ||||||
Regina W. Anderson | 73 | Chairwoman of the Board | 2005 | 75 | Chairwoman of the Board | 2005 | ||||||
Fred W. Suggs, Jr. | 73 | Director | 1995 | 75 | Director | 1995 | ||||||
James B. Anderson | 50 | Director and Chief Financial Officer; Vice President - Operations, Amerx Health Care Corp. | 2006 | 52 | Director and Chief Financial Officer; Vice President - Operations, Amerx Health Care Corp. | 2006 | ||||||
Justice W. Anderson | 43 | Director, Chief Executive Officer / President - Procyon President, Vice-President Marketing - Amerx Health Care Corp. | 2006 | 45 | Director, Chief Executive Officer / President - Procyon President, Vice-President Marketing - Amerx Health Care Corp. | 2006 | ||||||
Monica L. McCullough | 49 | Director | 2019 | 51 | Director | 2019 | ||||||
Joseph R. Treshler | 67 | Director | 2013 | 69 | Director | 2013 | ||||||
Paul E. Kudelko | 80 | Director | 2013 | |||||||||
Steven McComas | 55 | Director | 2021 |
JusticeW.Anderson.Mr. Anderson currently serves as the Chief Executive Officer/President for Procyon (since January 2018) and President and V.P. of Marketing for AMERX Health Care Corporation. He has served on Procyon's Board of Directors since 2006. Mr. Anderson served as the Vice President of Sales for AMERX from January of 2001 until June of 2012 when the new V.P. of Sales was hired. Mr. Anderson has served on the Corporate Advisory Board of the American Academy of Podiatric Practice Management. Mr. Anderson joined AMERX in 2000 after receiving his B.A. degree from the University of Florida. Mr. Anderson is the son of John C. Anderson, our late President, Chief Executive Officer and Chairman of the Board, son of Regina Anderson, the Company's Chairwoman of the Board and former Chief Executive Officer/President of Procyon and the brother of James B. Anderson, our Chief Financial Officer.
Regina Anderson.Ms. Anderson has served as Chairwoman of the Board of Directors since September 2005, and as our Chief Executive Officer/President from November 2005 through December 2017. Ms. Anderson has 3840 years experience in the medical field and 3133 years of management experience. Ms. Anderson worked at Health South Rehabilitation Hospital for ten years as Outpatient Director, in charge of the main outpatient center plus four satellite offices. Prior to her work at HealthSouth, Regina was Vice-President of Operations at Stuffit Direct Marketing Company from 1980 through 1989. Regina received her Masters Degree from Kansas State University in 1970.
James B. Anderson. Mr. Anderson, a Director since 2006, has served as our Chief Financial Officer since June 2005. In addition, from September 22, 2005, until that position was filled by Regina Anderson on November 1, 2005, Mr. Anderson served as Interim Chief Executive Officer. On June 28, 2005, Mr. Anderson was appointed to serve as the President of Sirius Medical Supply, Inc. Since 1993, Mr. Anderson has been involved with AMERX Health Care Corporation as its Chief Information Officer until 2005, when he was appointed VP of Operations. In 1996, Mr. Anderson became involved with Procyon Corporation after its merger and has since performed the duties of Vice President of Operations. Prior to Mr. Anderson's work with the Company, he was involved with importing and exporting to Russia and Direct Mail Marketing. He received a B.S. from the University of South Florida. Mr. Anderson is the son of John C. Anderson, our late President, Chief Executive Officer and Chairman of the Board, the son of Regina Anderson, the Company's Chairwoman of the Board and former Chief Executive Officer of Procyon, and the brother of Justice W. Anderson, our Chief Executive Officer/President of Procyon and Vice President of Marketing and the President of AMERX Health Care Corporation.
Fred W. Suggs, Jr.Mr. Suggs has served on our Board of Directors since 1995. He is also the Chairman of the Ethics Committee and is a member of the Compensation Committee. Mr. Suggs brings his expertise and experience as a labor lawyer. He has been a practicing attorney since 1975. He is a partner in the Greenville, South Carolina office of Ogletree, Deakins, Nash, Smoak & Stewart, specializing in labor and employment law. He has been certified as a specialist in labor and unemployment law by the South Carolina Supreme Court and is a frequent lecturer on labor and employment law issues. Mr. Suggs graduated from Kansas State University with a B.S. degree and he received his J.D. degree from the University of Alabama.
JosephR.Treshler. Mr. Treshler was appointed director by the Board of Directors in January 2013 to fill a vacancy on the Board created by increasing the number of total Board members. Mr. Treshler serves at the Vice President of Business Management & Development of Covanta Energy Corporation, and is responsible for Covanta’s asset management, business development, project implementation, client community relations, community affairs and Clean World Initiative efforts in Florida. Mr. Treshler earned his B.S. degree in Chemical Engineering in 1974 from Iowa State University of Science and Technology. He is a Professional Engineer registered to practice in the State of Florida. Mr. Treshler was appointed by the Company’s Board of Directors to serve on the Audit Committee on January 8, 2013 and to serve on the Ethics Committee on June 7, 2013.
Dr.PaulE.Kudelko,Sr.Dr. Kudelko has served as a Director of the Company since December 2013 and is a member of the Ethics Committee. Dr. Kudelko is a retired cardiovascular physician. At the time of his retirement in 2010, Dr. Kudelko had practiced with the Clearwater Cardiovascular and Interventional Consultants for the past seven years. Dr. Kudelko attended Duquesne University, graduated from the Kirksville College of Osteopathic Medicine, and was a resident in medicine at Detroit Osteopathic Hospital and Riverside Hospital, Trenton, MI. Dr. Kudelko acted as Affiliate Assistant Professor, Department of Family Medicine, and Department of Internal Medicine, at the University of South Florida College of Medicine in Tampa, FL for a total of approximately eleven years.
MonicaMcCullough.Ms. McCullough has served as a Director of the Company since November 2019 and was appointed Chairperson of the Audit Committee in 2019. Ms. McCullough has 25 years of accounting experience in various capacities. Her experience includes the management of several accounting functions, implementation and maintenance of Sarbanes-Oxley policies and procedures, SEC reporting, coordination of quarterly and annual audits, as well as implementing and maintaining accounting systems. She has spent the last 8 years as Facility Controller in the waste to energy industry. Ms. McCullough graduated from the University of South Florida with a B.S. degree in Accounting and is a Certified Public Accountant.
Steven McComas. Mr. McComas was appointed to the Board of Directors by a unanimous vote of the Board on July 17, 2021. He was also appointed to serve on the Ethics Committee. Mr. McComas brings to the Company’s Board significant experience acting as an executive officer of several companies. Mr. McComas is an executive with thirty years of global experience in a variety of financial management, business leadership and corporate strategy. Currently, Mr. McComas is the Chief Executive Officer for Responsive Technology Partners, Inc. a managed information technology consulting and services firm operating throughout the Southeastern United States with offices in Metter, Vidalia, Atlanta, Athens, and Milledgeville Georgia, Raleigh, North Carolina and Tampa, Florida. Under Mr. McComas’ leadership, Responsive Technology Partners, Inc. has quickly grown to a ranking by Inc. Magazines’ 5000 as the 630 fastest-growing private companies in America in 2020. Mr. McComas also serves as the Chief Financial Officer for Pineland Telephone Cooperative, Inc., a rural telephone, and broadband cooperative based in Metter, Georgia and is responsible for all the company’s financial functions. Before Pineland, Mr. McComas had served as a Vice President of Finance for an operating subsidiary of the world’s largest publicly traded Thailand-based company engaged in the manufacturing and exporting of pet foods in the world. He was also the North American Director of Indirect Purchasing for a publicly traded world leader in outdoor power products for forestry, lawn and garden care headquartered in Stockholm, Sweden. Mr. McComas also was the Chief Financial Officer in commercial banking and private equity.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding beneficial ownership of Common Stock as of October 5, 2020November 21, 2022 by (i) each person known by the Company to own beneficially more than 5% of the outstanding Common Stock, (ii) each director or director nominee, and (iii) all executive officers and directors as a group. Each person has sole voting and sole investment or dispositive power with respect to the shares shown except as noted. As to the Company’s preferred stock, as of October 5, 2020,November 21, 2022, no officer or director of the company owned any preferred shares.
Common Shareholdings on October 5, 2020
Common Shareholdings on November 21, 2022 |
Name and Address |
(3) | Number of Shares | Percent of Class (%) | |||||||||||
Number of | Percent of | |||||||||||||
Name and Address (3) | Shares | Class (%) | ||||||||||||
Justice W. Anderson | (4) | 3,490,500 | 43.2 | 3,515,500 | (4) | 42.9 | ||||||||
Michael T. Foley | (6) | 222,945 | (7) | 2.8 | ||||||||||
George O. Borak | 100,092 | 1.2 | 100,092 | 1.2 | ||||||||||
Fred W. Suggs | (l) | 100,000 | 1.2 | 100,000 | 1.2 | |||||||||
James B. Anderson | 81,000 | (5) | 1.0 | 106,000 | (5) | 1.3 | ||||||||
Regina W. Anderson | 78,060 | 1.0 | 78,060 | 1.0 | ||||||||||
Joseph R. Treshler | (1)(2) | 17,000 | * | 17,000 | * | |||||||||
Paul E. Kudelko | 0 | 0 | ||||||||||||
Monica L McCullough | (2) | 0 | 0 | |||||||||||
Monica L McCullough (2) | 0 | 0 | ||||||||||||
Steven McComas | 0 | 0 | ||||||||||||
All directors and officers as a group (eight persons) | All directors and officers as a group (eight persons) |
| 4,089,597 |
| 50.6 | 3,916,652 | 47.8 | |||||||
Roy M. Speer Foundation, 2535 Success Dr., Odessa, FL 33556 | Roy M. Speer Foundation, 2535 Success Dr., Odessa, FL 33556 |
| 1,600,000 |
| 19.9 | 1,540,000 | 18.8 |
* Less than 1% |
(1) | Member of the Compensation Committee. |
(2) | Member of the Audit Committee. |
(3) | Except as noted above, the address for all persons listed is |
(4) | Mr. Anderson beneficially owns 3,350,500 shares of common stock as Trustee of the John C. Anderson Trust in accordance with Mr. Anderson's will. He also owns of record 75,000 shares of common |
(5) | Includes 10,000 shares in joint name with his |
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Compensation of Directors and Executive Officers.
Processes and Procedures for the Consideration and Determination of Executive and Director Compensation.
Compensation programs for our executive officers are reviewed and recommended by our Compensation Committee and are approved by the Board of Directors. None of the executive officers are members of the Compensation Committee or otherwise had any role in determining the compensation for themselves or other executives, although the Compensation Committee does receive input from the executive officers when considering adjustments to base salary and other compensation components and the Chief Executive Officer’s recommendations with respect to compensation of the other executives. The Compensation Committee conducts an annual review of our executive compensation programs to ensure that they meet the Company’s objectives. The Compensation Committee does not delegate its authority to evaluate and make recommendations to the Board concerning executive compensation to any persons. Further, the Compensation Committee has not relied in the past on any consultants in the performance of its duties. The Compensation Committee is also responsible for making recommendations concerning director compensation. Currently, the directors do not receive any compensation.
Summary Compensation TableCompensationTable. The following table sets forth compensation information for the two fiscal years ended June 30, 20202022 and 20192021 of the Company’s Chief Executive Officer and Chief Financial Officer, and the President and Vice President - Sales of our subsidiary, Amerx Health Care Corp. (the “Named Executive Officers”). Elements of compensation for our Named Executive Officers include salary, discretionary cash bonuses, non-equity incentive plan compensation and other perquisites and benefits. We do not have a pension plan and do not offer non-qualified deferred compensation arrangements. As a result, columns related to these items have been omitted from the table below.
Name and Principal Position | Year | Salary($) | Bonus($) |
Option | Non-equity | All Other | Total($) | Year | Salary($) | Bonus($) | Option Awards ($) | Non-equity incentive plan compensation ($)(2) | All Other Compensation ($) | Total($) | ||||||||||||||||||||||||||||||||||||
Justice W. Anderson, | 2020 | $ | 242,116 | $ | 0 | $ | 0 | $ | 27,465 | $ | 0 | $ | 269,581 | 2022 | $ | 260,755 | $ | 79,521 | 0 | $ | 0 | $ | 0 | $ | 340,276 | |||||||||||||||||||||||||
President (AMERX ) CEO & President (Procyon) as of January 2018 | 2019 | $ | 214,043 | $ | 0 | $ | 0 | (1) | $ | 15,486 | $ | 0 | $ | 229,529 | 2021 | $ | 251,354 | $ | 0 | 9,840 | (1) | $ | 26,377 | $ | 0 | $ | 287,571 | |||||||||||||||||||||||
James B. Anderson, | 2020 | $ | 166,924 | $ | 0 | 0 | $ | 15,926 | $ | 0 | $ | 182,850 | 2022 | $ | 190,200 | $ | 47,728 | 0 | $ | 0 | $ | 0 | $ | 237,928 | ||||||||||||||||||||||||||
Chief Financial Officer (Procyon), Vice President of Operations (AMERX ) | 2019 | $ | 152,900 | $ | 0 | 0 | $ | 15,486 | $ | 0 | $ | 168,386 | 2021 | $ | 183,135 | $ | 0 | 9,840 | (1) | $ | 20,883 | $ | 0 | $ | 213,858 | |||||||||||||||||||||||||
George O Borak, | 2020 | $ | 172,243 | $ | 0 | 0 | $ | 19,718 | $ | 0 | $ | 191,961 | 2022 | $ | 186,600 | $ | 50,886 | 0 | $ | 0 | $ | 0 | $ | 237,486 | ||||||||||||||||||||||||||
Vice President Of Sales (AMERX ) | 2019 | $ | 160,000 | $ | 5,162 | 0 | $ | 12,429 | $ | 0 | $ | 177,591 | 2021 | $ | 178,858 | $ | 0 | 0 | $ | 12,176 | $ | 0 | $ | 191,034 |
1. | Aggregate grant date fair value. 25,000 options granted with |
2. | Profit sharing earned in fiscal |
Narrative Disclosure to Summary Compensation Table
Named Executive Officer’sOfficer’s Employment Contracts
Justice W. Anderson's Restated and Amended Executive Employment Agreement, which is effective July 1, 2020,2022, provides for a base annual salary of $247,200$269,850 and other benefits, including certain incentive bonus compensation based upon Amerx achieving certain financial goals for sales and net profit and at the discretion of the Board of Directors. Mr. Anderson's Agreement calls for a term of one year, but may be terminated by either party, with or without cause, upon thirty day's written notice.
James B. Anderson's Restated and Amended Executive Employment Agreement, which is effective July 1, 2020,2021, provides for a base annual salary of $180,000$196,560 and other benefits, including short-term and long-term incentive bonus compensation based upon Amerx achieving certain operational and financial goals and at the discretion of the Board of Directors. Mr. Anderson's Agreement calls for a term of one year, but may be terminated by either party, with or without cause, upon thirty day's written notice.
George Borak's Restated and Amended Executive Employment Agreement, which is effective July 1, 2020,2021, provides for a base annual salary of $180,000$196,560 and other benefits, including certain incentive bonus compensation based upon Amerx achieving certain financial goals for sales and net profit and at the discretion of the Board of Directors. Mr. Borak's Agreement calls for a term of one year, but may be terminated by either party, with or without cause, upon thirty day's written notice.
Outstanding Equity Awards
An Agreement to grant 40,000 Options to purchase common stock was executed and delivered to Justice Anderson, pursuant to his executive employment agreement, on September 27, 2016, but with a grant date of June 30, 2016.
An Agreement to grant 25,000 Options to purchase common stock was executed and delivered to Justice Anderson, pursuant to his executive employment agreement, on August 23, 2017, but with a grant date of June 30, 2017.
An Agreement to grant 25,000 options to purchase common stock was executed and delivered to Justice Anderson, pursuant to his Restated and Amended Executive Employment Agreement dated July 1, 2020 on September 24, 2021, but was granted and effective on June 30, 2021.
An Agreement to grant 25,000 options to purchase common stock was executed and delivered to James Anderson, pursuant to his Restated and Amended Executive Employment Agreement dated July 1, 2020 on September 24, 2021, but was granted and effective on June 30, 2021.
Compensation of Directors
No employee of the Company receives any additional compensation for his services as a director. No non-employee director receives any compensation for his service; however, the Board of Directors has authorized payment of reasonable travel or other out-of-pocket expenses incurred by non-management directors in attending meetings of the Board of Directors. The Board of Directors may consider alternative director compensation arrangements from time to time.
Stock Option Plan
The Company maintained the Procyon Corporation 2009 Stock Option Plan (the “2009 Option Plan”) until it expired on December 8, 2019. The 65,000 Options issued prior to expiration of the 2009 Option Plan are still excercisable by the recipient for a period of ten years from the grant date.
The 2009 Option Plan was approved by our shareholders on December 8, 2009 and expired on December 8, 2019. The purpose ofNo further options or other awards may be granted under the 2009 Option Plan was to advance the interests of the Company and the Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities and performance-based incentives that are intended to better align the interests of such persons with those of the Company’s stockholders.Plan.
As of June 30, 2019, 65,000 Options to purchase common stock were awarded to Justice Anderson, pursuant to the terms of his employment agreements, effective October 1, 2015 and July 1, 2016. The 1,000,000 shares of common stock that have been reserved for the 2009 Option Plan have not been registered under the Securities Act of 1933. We have no present plans to register such shares.
Eligible participants underOn September 22, 2020, our Board of Directors and Compensation Committee approved a new Procyon Corporation 2020 Stock Option and Incentive Plan (the “2020 Option Plan”), and was approved by our shareholders in the 2009annual meeting of shareholders in November 2020.
The purpose of the 2020 Option Plan must be such full or part-time officersis to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract and other Employees, Non-Employee Directorsretain employees (including officers), directors and key persons (including consultants and prospective employees)independent contractors of the Company, and its Subsidiaries asto furnish additional incentives to such persons to enhance the value of the Company over the long term by encouraging them to acquire a proprietary interest in the Company. Employees, Consultants and Directors of the Company are selected from timeeligible to timebe granted Awards under the 2020 Option Plan, subject to the limitations described in the Plan.
The 2020 Option Plan is to be administered by the Compensation Committee in its sole discretion. Only employees may receive(the “Administrator”).
The 2020 Option Plan provides for the granting of Incentive Stock Options. Employees, non-employee directors and consultants may receiveOptions, meeting the requirements of 422 of the Internal Revenue Code (the “Code”), Non-Qualified Stock Options, which do not qualify as Incentive Stock Options, Stock Appreciation Rights (“SARs”), Restricted Stock, Restricted Stock Units, or SARs.Other Stock-Based Awards (together, an “Award”).
An SAR is an Award entitling the recipient to receive shares of Common Stock having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the exercise price of the Stock Appreciation Right multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised. “Restricted Stock Unit” means an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Administrator equal to the value thereof as of such payment date, which right may be subject to certain vesting conditions and other restrictions. “Other Stock-Based Awards” means other Awards of Shares, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, Shares or other property.
The Board of Directors has authorized the issuance of 2,000,000 shares of Common Stock to underlie the granting of Awards under the 2020 Option Plan. The 2,000,000 shares of Common Stock that have been reserved for the 2020 Option Plan have not been registered under the Securities Act of 1933. We have no present plans to register such shares. No Stock Options
or other Awards have been granted by the Company under the 2020 Option Plan.
Incentive Stock Options may only be granted to employees of the Company or its Subsidiaries and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. Incentive Stock Options can be granted for a term not exceeding ten years, except for Ten Percent Owners of our Common Stock, for whom the maximum option term is five years. Incentive Stock Options are granted with an exercise price of not less than 100% of the Fair Market Value of the underlying Common Stock on the date of grant. However, for Ten Percent Owners, the exercise price must be 110% of the Fair Market Value of the underlying Stock on the date of grant. Further, the aggregate Fair Market Value (determined as of the time of grant) of the shares of Stock with respect to which Incentive Stock Options granted under the Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable for the first time by a Participant during any calendar year shall not exceed $100,000.
Non-Qualified Stock Options are Options that is not intended to be or otherwise do not qualify as an Incentive Stock Option. Non-Qualified Stock Options shall be granted under the 2009 Option Plan manyand have a term of not more than ten years from the date of grant. The exercise price must be not less than 100% of the fair market value of the underlying common stock on the date of grant. Incentive Stock Options can be granted under the 2009 Option Plan for a term not exceeding ten years, except for Ten Percent Owners of our common stock, as defined in the Plan, for whom the maximum option term is five years. Incentive Stock Options are granted with an exercise price of not less than 100% of the fair market value of the underlying common stock on the date of grant. However, for Incentive Stock Options owned by Ten Percent Owners, the exercise price must be 110% of the Fair Market Value of the underlying stockCommon Stock on the date of grant. Non-Qualified Stock Option can be awarded to employees, officers, directors or consultants.
On September 22, 2020, our BoardEffective June 30, 2021, the Company granted 25,000 non-qualified stock options to Justice W. Anderson and 25,000 non-qualified stock options to James B. Anderson for exceeding certain performance standards in fiscal 2021, pursuant to the terms of Directorstheir respective Restated and Compensation Committee approved a new Procyon Corporation 2020 Stock Option and Incentive Plan (the “Proposed New Plan”), and recommended that the shareholders approve the plan in our annual meeting of shareholders on November 20, 2020 described in this proxy statement. See a summary descriptionAmended Executive Employment Agreements dated July 1, 2020. Each of the Proposed New Plan will be disclosed in Proposal IIIoptions were dated September 24, 2021, but were granted and effective as of this proxy statement.June 30, 2021 for a ten year term and have an exercise price of .373 per share.
Committees of the Board
The Board of Directors has delegated certain of its authority to a Compensation Committee, an Audit Committee and an Ethics Committee.
The Compensation Committee is composed of Mr. Suggs (Chairman) and Mr. Treshler. The Compensation Committee adopted a Charter on December 8, 2007. The Compensation Committee charter may be viewed on our website at http://www.procyoncorp.com/investor-relations.html. Each member of the Compensation Committee is not a former or current officer or employee of the Company and is otherwise independent within the meaning of the applicable NASDAQ Rules. The primary function of the Compensation Committee is to review and make recommendations to the Board with respect to compensation matters, including bonuses for employees, and to administer the Company’s Option Plan. Historically, review and adjustment of compensation of our executive officers has primarily been determined by our Chief Executive Officer. Seealso, “Processes and Procedures for the Consideration and Determination of Executive and Director Compensation,” above.
The Company formed an Audit Committee in July 2004. In January 2013, the Board appointed Joseph R. Treshler as director and a member of the Audit Committee. In November 2019, the Board appointed Monica L. McCullough Audit Committee member and Chair. The Board believes that Ms. McCullough and Mr. Treshler are independent pursuant to The NASDAQ Stock Market, Inc. (“NASDAQ”) rules and both Ms. McCullough and Treshler also meet the requirements of an audit committee financial expert. In addition, we have determined that Ms. McCullouhMcCullough and Mr. Treshler are also independent within the meaning of SEC Rule 10A-3(b)(1).
The Audit Committee adopted a Charter, effective October 27, 2006.The Audit Committee Charter can be viewed on our website at http://www.procyoncorp.com/investor-relations.html. Pursuant to its Charter, the primary function of the Audit Committee is to review and approve the scope of audit procedures employed and to review and approve the audit reports rendered by the Company’s independent auditors and to approve the audit fees charged by the independent auditors. In addition, pursuant to the Sarbanes-Oxley Act of 2002 and rules promulgated thereunder, the Audit Committee is responsible for, among other things, pre-approving all audit and non-audit services performed by the independent auditors, approving the engagement of the auditors and receiving certain reports from the independent auditors prior to the filing of the audit report. The Audit Committee reports to the Board of Directors with respect to such matters and recommends the selection of independent auditors.
The Company does not have a Nominating Committee. However, the entire board of directors, which is comprised of a majority of independent directors pursuant to applicable NASDAQ rules, performs the function of a nominating committee. The Company believes that a separate committee is not necessary for a company of its size. For purposes of the Audit Committee and the foregoing statement, the Company has used the definition of “independent director” as contained in the corporate governance rules of NASDAQ, as amended.
The Company also formed an Ethics Committee of the board members in 2004. The members are Messrs. Suggs (Chairman) and Kudelko.McComas. The charter for the ethics committee may be viewed on the Company website (http://procyoncorp.com/images/stories/Code_of_Ethics_Senior_Officers.pdf).
Director Independence
We believe that Ms. McCullough and Messrs. Suggs, Treshler and KudelkoMcComas are independent directors as defined under applicable NASDAQ rules. Regina W. Anderson, James B. Anderson and Justice W. Anderson are not deemed to be independent directors as each is an executive officer or relative of an executive officer of the Company and/or its subsidiaries. We believe Ms. McCullough and Mr. Treshler also meet the audit committee independence requirements of SEC Rule 10A-3(b)(1).
Board Leadership Structureand Role in Risk Oversight
We have no formal policy concerning the separation or combination of the Chief Executive Officer and Chairman of the Board positions. Our Board has the right to exercise its judgment to choose the Chairman as it deems best for the Company at any point in time. Currently, Regina Anderson serves as Chairwoman of the Board and Justice W. Anderson serves as Chief Executive Officer/President. The Board has not appointed a “lead independent director.” We believe that our Board leadership structure is appropriate for a company of our size, particularly where we have a majority of independent directors.
We currently have seven directors, a majority of whom are independent. There are three committees of the Board, each comprised and chaired solely by independent directors. Risk management is overseen by the Board as a whole, but also through our committees, particularly the Audit and Ethics Committees, which report to the Board. Our Board, with the assistance of the Audit and Ethics Committees, reviews the Company’s risk oversight framework, and the Board receives regular reports not only from Board committees but also directly from senior management regarding certain major risks facing the Company and its operating subsidiary and the steps taken by management to manage and mitigate those risks. We believe that our Board provides effective oversight of the risk management function, especially through the work of the Audit and Ethics committees.
NominationProcedures
Shareholders may recommend director candidates for inclusion by the board of directors in the slate of nominees which the board recommends to shareholders for election. The qualifications of recommended candidates will be reviewed by the board. If the Board determines to nominate a stockholder-recommended candidate and recommends his or her election as a director by the shareholders, his or her name will be included in the Company’s proxy card for the stockholder meeting at which his or her election is recommended.
Shareholders may recommend individuals to the board for consideration as potential director candidates by submitting their names and background to the Company’s Corporate Secretary, at the Company’s address set forth above. Such recommendations will be forwarded to the board. The board will consider a recommendation only if appropriate biographical information and background material is provided on a timely basis.
In order to be considered timely, shareholder nominations for our next annual meeting for fiscal 2022,2024, along with all required information, must be received by the Company no later than June 11, 2021.15, 2023.
The process followed or expected to be followed by the board to identify and evaluate candidates includes requests to board members and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of the board.
Assuming that appropriate biographical and background material is provided for candidates recommended by shareholders, the board will evaluate those candidates by following substantially the same process, and applying substantially the same criteria, as for candidates submitted by board members or by other persons. In considering whether to recommend any candidate for inclusion in the board’s slate of recommended director nominees, including candidates recommended by shareholders, the board will consider, among other things, the candidate’s:
● | integrity and honesty, |
● | ability to exercise sound, mature and independent business judgment in the best interests of the shareholders as a whole, |
● | background and experience with manufacturing, retailing, operations, finance, marketing or other fields which will complement the talents of the other board members, |
● | willingness and capability to take the time to actively participate in board and Committee meetings and related activities, |
● | ability to work professionally and effectively with other board members and Company management, |
● | availability to remain on the board long enough to make an effective contribution, and |
● | absence of material relationships with competitors or other third parties that could present realistic possibilities of conflict of interest or legal issues; and |
● | experience with accounting rules and practices. |
The board does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. The board believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, diversity, knowledge and abilities that will allow the board to fulfill its responsibilities. The board does not at this time have a policy to consider diversity (in gender, ethnic and racial background) in identifying nominees for the board.
Audit Committee Report
In October 2020,2021, the Audit Committee, submitted the following report:
We have reviewed and discussed with management the Company’s audited financial statements for the year ended June 30, 20202022 (the “Fiscal Year 20202022 Financial Statements”).
We have discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.
We have received and reviewed the written disclosures and the letter from the independent auditors required by Independence Standard No. 1 (Independence Standards Board Standard No. 1, IndependenceDiscussionswithAuditCommittees), as adopted by the Public Company Accounting Oversight Board in Rule 3200T, and have discussed with the auditors the auditors’ independence.
Based upon the reviews and discussions referred to above, we recommended to the Board of Directors that the Fiscal Year 20202022 Financial Statements be included in the Company’s annual report on Form 10-K for Fiscal Year 20202022 for filing with the Securities and Exchange Commission.
This Audit Committee Report shall not be deemed incorporated by reference in any document previously or subsequently filed with the Securities and Exchange Commission that incorporates by reference all or any portion of the proxy statement, in connection with the annual meeting, except to the extent that the Company specifically requests that this Report be specifically incorporated by reference.
Date: October | Monica L. McCullough, Audit Committee member and Chairperson Joseph R. Treshler, Audit Committee member |
Board and Committee Meeting Attendance
In fiscal 2020,2022, the Board of Directors held fivefour formal meetings. The Compensation Committee held eightsix meetings, the Audit Committee held twofive meetings, and the Ethics Committee held two meetingsone meeting during fiscal 2020.2022. All directors attended at least 75% of the Board and applicable committee meetings in person or by telephone.
The Company encourages, but does not require, Board members to attend the annual meeting of shareholders. All but one of the directors attended last year’s annual meeting.
Code of Ethics for Senior Financial Officers
The Company has adopted a Code of Ethics for Senior Financial Officers, a copy of which can be viewed on our website, http://www.procyoncorp.com/investor-relations.html. The Code of Ethics applies to all senior financial officers of the Company, including the Chief Executive Officer, the Chief Financial Officer, the Treasurer and any other person performing similar functions.
TheBoardofDirectorshasunanimouslyapprovedandrecommendsthatshareholdersvoteFORthedirectornominees identified above.above.
II. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR THE COMPANY FOR FISCAL 2023. |
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Our Audit Committee has approved the engagement of Ferlita, Walsh, Gonzalez & Rodriguez, P.A. of Tampa, Florida, to act as our independent registered public accountants for fiscal 2021,2023, subject to approval of our shareholders in this Proposal II for the annual meeting. Ferlita, Walsh, Gonzalez & Rodriguez, P.A., and its predecessor, has examined the financial statements of the Company beginning with the fiscal year ended June 30, 1999.1998. No members of Ferlita, Walsh, Gonzalez & Rodriguez, P.A. are expected to be in attendance at the annual meeting.
AuditFees. In fiscal 2020,2022, the Company paid to its independent accountants $58,750$67,750 in fees related directly to the audit and review of the Company's financial statements. In fiscal 2019,2021, the Company paid to its independent accountants $58,750$62,250 in fees related directly to the audit and review of the Company's financial statements.
Audit-RelatedFees. The Company's independent accountants performed no other audit-related services for the Company during fiscal 20202022 and 2019,2021, other than the audit services described above.
Tax Fees: In fiscal 2020,2022, the Company paid to its independent accountants $2,000 in fees related directly to tax preparations. In fiscal 2019,2021, the Company paid to its independent accountants $2,000 in fees related directly to tax preparations.
Audit Committee Pre-Approval Procedures. Procyon’s independent auditor reports to, and is engaged at the direction of, the Audit Committee, with annual approval by the shareholders. Our Board implemented, and the Audit Committee ratified, procedures for the pre-approval of audit and non-audit services performed by the Company’s independent auditors. The Audit Committee has the sole authority to pre-approve all audit and non-audit services provided by the independent auditors to the Company and acts to assure that the independent auditors are not engaged to perform specific non-audit services proscribed by law or regulation.
The Board of Directors recommends a vote FOR ratification of Ferlita, Walsh, Gonzalez & Rodriguez, P.A. as independent auditors for the Company for the 20212023 fiscal year.
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Our Board of Directors and Compensation Committee approved the adoption of a new stock option plan, entitled the “Procyon Corporation 2020 Stock Option and Incentive Plan” (the “2020 Option Plan”) on September 22, 2020. A copy of the 2020 Option Plan is attached to this proxy statement as Appendix A. The 2020 Option Plan will become effective only upon approval of our shareholders pursuant to this proposal for the annual meeting.
Summary of the 2020 Option Plan.
The following is a summary of the principal terms and conditions of the 2020 Option Plan. However, shareholders should read the entire Plan, which is attached as Appendix A. Capitalized terms herein are defined in Section 2 of, or throughout, the 2020 Option Plan.
Purpose. The purpose of the 2020 Option Plan is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract and retain employees (including officers), directors and independent contractors of the Company, and to furnish additional incentives to such persons to enhance the value of the Company over the long term by encouraging them to acquire a proprietary interest in the Company.
Eligibility. Employees, Consultants and Directors of the Company are eligible to be granted Awards under the 2020 Option Plan, subject to the limitations described in the Plan.
Administration. The 2020 Option Plan is to be administered by the Compensation Committee (the “Administrator”). Among other things, the 2020 Option Plan authorizes the Administrator to determine which Service Providers will receive Awards, to grant Awards and to set all terms and conditions of Awards (including, but not limited to, vesting, exercise, forfeiture and acceleration provisions, except, the Administrator shall not have any discretion to accelerate or waive any term or condition of an Award if such discretion would cause the Award to have adverse tax consequences to the Participant under Section 409A of the Code). In addition, the Administrator shall have the authority to take all actions and make all determinations contemplated by the Plan and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable. The Administrator may correct any defect or ambiguity, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem necessary or appropriate to carry the Plan and any Awards into effect.
TypesIII. ADVISORY VOTE ON EXECUTIVE COMPENSATION.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Section 14A ofAwardsUnderthePlan. Securities Exchange Act of 1934, the Company’s shareholders are entitled to vote to approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in this proxy statement in accordance with SEC rules. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company’s named executive officers and the philosophy, policies and practices described in this proxy statement.
The 2020 Option Plan providesCompany has designed its executive compensation program to attract, motivate, reward and retain the senior management talent required to achieve our corporate objectives and to increase long-term shareholder value. The compensation of the Company’s named executive officers subject to the vote is disclosed above in the Executive Compensation summary, the compensation tables, and the related narrative disclosure contained in this proxy statement. We believe the mix of fixed and performance-based compensation and the terms of long-term and short-term incentive compensation for certain of our named executive officers are all designed to enable us to attract and maintain top talent while, at the same time, creating a close relationship between performance and compensation.
Accordingly, the Board is asking the shareholders to indicate their support for the granting of Incentive Stock Options, meeting the requirements of 422compensation of the Internal Revenue Code (the “Code”), Non-Qualified Stock Options, which do not qualifyCompany’s named executive officers as Incentive Stock Options, Stock Appreciation Rights (“SARs”), Restricted Stock, Restricted Stock Units, or Other Stock-Based Awards (together, an “Award”). An SAR is an Award entitlingdescribed in this proxy statement by casting a non-binding advisory vote “FOR” the recipient to receive shares of Common Stock having a value equalfollowing resolution:
“RESOLVED, that the compensation paid to the excessCompany’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Executive Compensation discussion, compensation tables and narrative discussion contained in the proxy statement, is hereby APPROVED.”
Because the vote is advisory, it is not binding on the Board of Directors or the Compensation Committee and may not be construed as overruling a decision by the Board of Directors, creating or implying any change to the fiduciary duties of the Fair Market ValueBoard of Directors or any additional fiduciary duty by the Board of Directors or restricting or limiting the ability of stockholders to make proposals for inclusion in proxy materials related to executive compensation. Nevertheless, the views expressed by the shareholders, whether through this vote or otherwise, are important to management and the Board. Accordingly, the Board and the Compensation Committee intend to consider the results of this vote in making determinations in the future regarding executive compensation arrangements.
Advisory approval of this proposal requires the vote of the Stock on the dateholders of exercise over the exercise pricea majority of the Stock Appreciation Right multipliedshares present in person or represented by proxy and entitled to vote at the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised. “Restricted Stock Unit” means an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Administrator equal to the value thereof as of such payment date, which right may be subject to certain vesting conditions and other restrictions. “Other Stock-Based Awards” means other Awards of Shares, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, Shares or other property.annual meeting.
SharesAvailableforAwards.The Board of Directors has authorized the issuance of 2,000,000 shares of Common Stock to underlie the granting of Awards under the 2020 Option Plan. The 2,000,000 shares of Common Stockrecommends that have been reserved for the 2020 Option Plan have not been registered under the Securities Act of 1933. We have no present plans to register such shares.shareholders vote FOR Proposal 3.
Stock Options. The 2020 Plan provides for the granting of Incentive Stock Options and Non-Qualified Stock Options.
IV. ADVISORY VOTE ON THE FREQUENCY OF SOLICITATION OF FUTURE ADVISORY SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION.
IncentiveStockOptionsmay only be grantedThe SEC has also adopted final rules requiring most public companies to employeeshold an advisory (non-binding) vote on the frequency of holding votes on executive compensation. Thus, the Company is including this proposal to allow the Company’s shareholders to indicate their preference regarding how frequently the Company should solicit a non-binding advisory vote on the compensation of the Company’s named executive officers as disclosed in the Company’s proxy statement. Accordingly, the Company is asking shareholders to indicate whether they would prefer an advisory vote every year, every two years or its Subsidiariesevery three years. Alternatively, shareholders may abstain from casting a vote.
After considering the benefits and shall be subject to and shall be construed consistently withconsequences of each alternative, the requirements of Section 422Board recommends that the advisory vote on the compensation of the Code. Incentive Stock Options canCompany’s named executive officers be granted forsubmitted to the shareholders once every three years.
The Board believes that a term not exceeding ten years, except for Ten Percent Owners of our Common Stock, for whomtriennial advisory vote on the maximum option term is five years. Incentive Stock Options are granted with an exercise price of not less than 100%compensation of the Fair Market Value of the underlying Common Stock on the date of grant. However, for Ten Percent Owners, the exercise price must be 110% of the Fair Market Value of the underlying Stock on the date of grant. Further, the aggregate Fair Market Value (determined as of the time of grant) of the shares of StockCompany’s named executive officers is most consistent with respectour approach to which Incentive Stock Options granted under the Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable for the first time by a Participant during any calendar year shall not exceed $100,000.compensation. Our reasons include our beliefs that:
Non-QualifiedStockOptions. Non-Qualified Stock Options are Options that is not intended to be or otherwise does not qualify as• an Incentive Stock Option. Non-Qualified Stock Options shall be grantedeffective compensation program should incentivize performance over the short- and have a term of not more than ten years from the date of grant. The exercise price must be not less than 100% of the Fair Market Value of the underlying Common Stock on the date of grant. Non-Qualified Stock Option can be awarded to employees, officers, directors or consultants.
RestrictedStock;RestrictedStockUnits. The Administrator may grant Restricted Stock, or the right to purchase Restricted Stock, to any Service Provider, subject to the right of the Company to repurchase all or part of such Shares at their issue price or other stated or formula price from the Participant (or to require forfeiture of such shares if issued at no cost) in the event that conditions specified by the Administrator in the applicable Award Agreement are not satisfied prior to the end of the applicable restriction period or periods established by the Administrator for such Award. In addition, the Administrator may grant to Service Providers Restricted Stock Units, which may be subject to vesting and forfeiture conditions during applicable restriction period or periods, as set forth in an applicable Award Agreement. The Administrator shall determine and set forth in the applicable Award Agreement the terms and conditions applicable to each Restricted Stock and Restricted Stock Unit Award, including the conditions for vesting and repurchase (or forfeiture) and the issue price, in each case, if any.
Other Stock-Based Awards. Other Stock-Based Awards, including SARs, may be granted to Participants, including, without limitation, Awards entitling Participants to receive Shares to be delivered in the future. Such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan, as stand-alone payments and/or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock-Based Awards may be paid in Shares, cash or other property, as the Administrator shall determine. Subject to the provisions of the Plan, the Administrator shall determine the terms and conditions of each Other Stock-Based Award.long-term;
AdjustmentsforChanges• it encourages a longer-term view of compensation by our shareholders by allowing them to evaluate three years of compensation history and business results, which is particularly important inSharesandCertainOtherEvents. In the eventpharmaceutical preparations business, where developing and evaluating potential product candidates, and many of the other projects and decisions of our named executive officers, require a long time horizon before we realize a tangible financial benefit;
• a three-year advisory vote cycle gives the Board sufficient time to thoughtfully consider the results of the advisory vote regarding named executive officer compensation and to implement any desired changes to its named executive officer compensation policies and procedures; and
• a three-year advisory vote cycle will provide the Company’s shareholders sufficient time to evaluate the effectiveness of the Company’s short- and long-term named executive officer compensation strategies and its related performance.
The Board intends that the Administrator determines,compensation program be responsive to shareholder concerns, but is concerned that an annual vote could encourage a short-term approach to our compensation plans, based on short-term business or market conditions, and undermine some of the compensation program’s key features. We believe that a vote on its executive compensation by its shareholders every three years will encourage shareholders to take the same long-term approach to the Company’s compensation programs taken by its executives and Compensation Committee.
Accordingly, the Board is asking shareholders to indicate their preferred voting frequency by voting for one, two or three years or abstaining from voting on the resolution below:
“RESOLVED, that the alternative of soliciting advisory shareholder approval of the compensation of the Company’s named executive officers once every one, two or three calendar years that receives the highest number of votes from the holders of shares present in person or represented by proxy and entitled to vote at the annual meeting shall be considered the frequency preferred by the shareholders.”
While the Board believes that its sole discretion,recommendation is appropriate at this time, the shareholders are not voting to approve or disapprove that recommendation, but are instead asked to indicate their preferences, on an advisory basis, as to whether the non-binding advisory vote on the approval of the Company’s executive officer compensation practices should be held every year, every two years or every three years. The option among those choices that receives the highest number of votes from the holders of shares present in person or represented by proxy and entitled to vote at the annual meeting will be deemed to be the frequency preferred by the shareholders.
The Board and the Compensation Committee value the opinions of the shareholders in this matter and, to the extent there is any dividendsignificant vote in favor of one frequency over the other options, even if less than a majority, the Board will consider the shareholders’ concerns and evaluate any appropriate next steps. However, because this vote is advisory and therefore not binding on the Board of Directors or other distribution (whetherthe Company, the Board may decide that it is in the form of cash, Shares, other securities, or other property), reorganization, merger, consolidation, combination, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially allbest interests of the assetsshareholders that the Company hold an advisory vote on executive compensation more or less frequently than the option preferred by the shareholders. The vote will not be construed to create or imply any change or addition to the fiduciary duties of the Company or sale or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event, as determined by the Administrator, affects the Shares such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Award, then the Administrator may, in such manner as it may deem equitable, adjust any or all of: (i) the number and kind of Shares (or other securities or property) with respect to which Awards may be granted or awarded; (ii) the number and kind of Shares (or other securities or property) subject to outstanding Awards; (iii) the grant or exercise price with respect to any Award; and (iv) the terms and conditions of any Awards (including, without limitation, any applicable financial or other performance “targets” specified in an Award Agreement).Board.
TerminationofStatus. Subject to the provisions of Section 6(d), the Administrator shall determine the effect on an Award of the Disability, death, retirement, authorized leave of absence or any other change or purported change in a Participant's Service Provider status and the extent to which, and the period during which, the Participant, the Participant’s legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award, if applicable.
Acceleration. The Administrator may at any time provide that any Award shall become immediately vested and/or exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be, provided that, such acceleration or waiver of conditions would not cause the Award to have adverse tax consequences to the Participant under Section 409A of the Code.
Amendment of Plan. The Administrator may amend, suspend or terminate the Plan or any portion thereof at any time; provided that no amendment of the Plan shall materially and adversely affect any Award outstanding at the time of such amendment without the consent of the affected Participant. Awards outstanding under the Plan at the time of any suspension or termination of the Plan shall continue to be governed in accordance with the terms of the Plan and the applicable Award Agreement, as in effect prior to such suspension or termination. The Board shall obtain stockholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.
Section409A. The Company intends that all Awards be structured in compliance with, or to satisfy an exemption from, Section 409A, such that no adverse tax consequences, interest, or penalties under Section 409A apply in connection with any Awards. Notwithstanding anything herein or in any Award Agreement to the contrary, the Administrator may, without a Participant’s prior consent, amend this Plan and/or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and actions with retroactive effect) as are necessary or appropriate to preserve the intended tax treatment of Awards under the Plan, including without limitation, any such actions intended to (A) exempt this Plan and/or any Award from the application of Section 409A, and/or (B) comply with the requirements of Section 409A, including without limitation any such regulations, guidance, compliance programs and other interpretative authority that may be issued after the date of grant of any Award. The Company makes no representations or warranties as to the tax treatment of any Award under Section 409A or otherwise. The Company shall have no obligation to take any action to avoid the imposition of taxes, penalties or interest under Section 409A with respect to any Award and shall have no liability to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute non-compliant, “nonqualified deferred compensation” subject to the imposition of taxes, penalties and/or interest under Section 409A.
The Board of Directors recommends a vote FOR approval of the Procyon Corporation 2020 Stock Option and Incentive Plan.“Three Years” on Proposal 4.
Appendix APROCYON CORPORATION
Annual Meeting of Shareholders to be held on January 10, 2023
PROCYON CORPORATIONThis proxy is solicited by the Board of Directors of Procyon Corporation.
2020 STOCK OPTION AND INCENTIVE PLAN
1. Purpose. The purpose of this 2020 Stock Option and Incentive Plan (the “Plan”)KNOW ALL MEN BY THESE PRESENTS: that the undersigned shareholder of Procyon Corporation (the “Company”) ishereby constitutes and appoints Regina W. Anderson, as attorney and proxy, with the power to advance the interestsappoint her substitute, and hereby authorizes her to represent and vote, as designated below, all of the Company’s stockholders by enhancing the Company’s ability to attract and retain employees (including officers), directors and independent contractorsshares of Common Stock or Preferred Stock of the Company andwhich the undersigned is entitled to furnish additional incentives to such persons to enhancevote at the valueAnnual Meeting of Shareholders of the Company overto be held January 10, 2023, and at any and all adjournments thereof with respect to the long term by encouraging them to acquire a proprietary interestmatters set forth below and described in the Company. Except where the context otherwise requires, the term “Company” shall include anyNotice of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f)Annual Meeting of the Internal Revenue CodeShareholders and Proxy Statement dated December 6, 2022, receipt of 1986, as amended, and any regulations promulgated thereunder (the “Code”) and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Administrator.is acknowledged.
Capitalized terms used in the Plan are defined in SectionThe Board of Directors recommend a vote for all nominees listed, and for proposal 2, below. 3 and 4.
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□ | WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES |
Instruction: To withhold authority to vote for any individual nominee, strike through the nominee's name below.
James B. Anderson | Justice W. Anderson | Regina W. Anderson | Steven McComas | |
Monica L. McCullough | Fred W. Suggs, Jr. | Joseph R. Treshler |
2. | To ratify the |
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□ ABSTAIN |
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Notwithstanding the foregoing, if a Change in Control would give rise to a payment or settlement event with respect to any Award that constitutes “nonqualified deferred compensation,” the transaction or event constituting the Change in Control must also constitute a “change in control event” (as defined in Treasury Regulation §1.409A-3(i)(5)) in order to give rise to the payment or settlement event for such Award, to the extent required by Section 409A.
Solely with respect to any Award that is subject to Section 409A of the Code, this definition is intended to comply with the definition of change in control under Section 409A of the Code as amended, and, to the extent that the above definition does not so comply, such definition shall be void and of no effect and, to the extent required to ensure that this definition complies with the requirements of Section 409A of the Code, the definition of such term set forth in regulations or other regulatory guidance issued under Section 409A of the Code by the appropriate governmental authority is hereby incorporated by reference into and shall form part of this Plan as fully as if set forth herein verbatim and the Plan shall be operated in accordance with the above definition of Change in Control as modified to the extent necessary to ensure that the above definition complies with the definition prescribed in such regulations or other regulatory guidance insofar as the definition relates to any Award that is subject to Section 409A of the Code.
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3. |
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□ FOR RATIFICATION | □ AGAINST RATIFICATION | □ ABSTAIN |
4. |
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| □ 3 YEARS | □ ABSTAIN |
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If an Option is designated as an Incentive Stock Option, the Participant shall give prompt notice to the Company of any disposition or other transfer of any Shares acquired from the Option if such disposition or transfer is made (i) within two years from the grant date with respect to such Option or (ii) within one year after the transfer of such shares to the Participant (other than any such disposition made in connection with a Change in Control). Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the Participant in such disposition or other transfer. Stock issued to a Participant pursuant to the exercise of an Incentive Stock Option must be held by the Participant before disposition for at least two years from the date of grant or one year from the date of exercise. No Incentive Stock Option shall be exercisable more than three (3) months after the Participant ceases to be an Employee for any reason other than death or Disability, or more than one (1) year after the Participant ceases to be an Employee due to death or Disability.
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This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder(s). IF NO INDICATION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED IN PROPOSAL 1, FOR PROPOSAL 2, 3 AND for every 3 Years pm Proposal 4. THE PROXY HOLDER WILL VOTE ON ANY PROPOSAL UNDER ITEM 3 IN THEIR DISCRETION AND IN HER BEST JUDGMENT.
Please mark, date, and sign exactly as your name appears on your stock certificate. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person.
Dated: | ||||
Signature | ||||
[Mailing Label] | Dated: | |||
Signature if held jointly |
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