Flux Power Holdings Inc
For the period ended Jun 30, 2024. Filed Jan 29, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Jan 29, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Item 11. EXECUTIVE COMPENSATION
Compensation for our Named Executive Officers
The following table sets forth information concerning all forms of compensation earned by our named executive officers during Fiscal 2024 and Fiscal 2023 for services provided to the Company and its subsidiary.
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards (1) ($) | Option Awards (2) ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|---|---|---|---|
| Ronald F. Dutt, | 2024 | $375,000 | $— | $— | $484,155 | $— | $— | $859,155 |
| Chief Executive Officer, President, and Chairman | 2023 | $290,962 | $146,273 | $— | $230,542 | $— | $— | $667,777 |
| Charles A. Scheiwe | 2024 | $205,200 | $— | $— | $89,348 | $— | $— | $294,548 |
| former Chief Financial Officer and Corporate Secretary(4) | 2023 | $205,989 | $53,613 | $— | $120,419 | $— | $— | $380,021 |
| Jeffrey C. Mason (3) | 2024 | $275,000 | $— | $— | $119,152 | $— | $— | $394,152 |
| Vice President of Operations | 2023 | $204,346 | $40,176 | $ | $100,602 | $— | $— | $345,124 |
| Kevin S. Royal | 2024 | $330,000 | $— | $— | $200,970 | $— | $— | $530,970 |
| Chief Financial Officer and Corporate Secretary (5) | ||||||||
| (1) | Represents the fair value of the RSUs granted on grant date. |
| (2) | The grant date fair value was determined in accordance with the provisions of FASB ASC Topic No. 718 using the Black-Scholes valuation model with assumptions described in more detail in the notes to our audited financial statements included in this report. |
| (3) | On November 7, 2022, Mr. Mason’s position was expanded to include additional Company authority and delegation. |
| (4) | On March 1, 2024, Mr. Scheiwe stepped down as the Company’s Chief Financial Officer and Corporate Secretary. |
| (5) | Mr. Royal was appointed as the Company’s Chief Financial Officer and Corporate Secretary effective March 4, 2024. |
Benefit Plans
We do not have any profit-sharing plan or similar plans for the benefit of our officers, directors or employees. However, we may establish such plan in the future.
Equity Compensation Plan Information
In connection with the reverse acquisition of Flux Power, Inc. in 2012, we assumed the 2010 Plan. As of June 30, 2023, the number of options outstanding to purchase common stock under the 2010 Plan was 21,944. No additional options to purchase common stock may be granted under the 2010 Plan.
On February 17, 2015, our shareholders approved our 2014 Equity Incentive Plan (“2014 Plan”), which was amended on July 23, 2018 and on November 5, 2020. The 2014 Plan authorizes the issuance of awards for up to 1,000,000 shares of our common stock in the form of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock units, restricted stock awards and unrestricted stock awards to officers, directors and employees of, and consultants and advisors to, the Company or its affiliates. We granted 100,192 and 175,265 stock options under the 2014 Plan during Fiscal 2024 and Fiscal 2023, respectively. We granted 51,171 and 72,566 restricted stock units under the 2014 Plan during Fiscal 2024 and Fiscal 2023, respectively.
On April 29, 2021, at the Company’s annual stockholders meeting, the 2021 Equity Incentive Plan (the “2021 Plan”) was approved by our stockholders. The 2021 Plan authorizes the issuance of awards for up to 2,000,000 shares of our common stock in the form of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock units, restricted stock awards and unrestricted stock awards to officers, directors and employees of, and consultants and advisors to, the Company or its affiliates. We granted 934,012 and 449,176 stock options under the 2021 Plan during Fiscal 2024 and Fiscal 2023, respectively. We granted 17,057 restricted stock units under the 2014 Plan during Fiscal 2024. We did not grant any restricted stock units under the 2021 Plan during Fiscal 2023.
As of June 30, 2024, we had 426,363 options outstanding and exercisable and 114,666 RSUs outstanding under the 2021 Plan, the 2014 Plan and the 2010 Plan.
The following table sets forth certain information concerning unexercised options, stock that has not vested, and equity compensation plan awards outstanding as of June 30, 2024 for the named executive officers below:
| Option Awards (1) · Stock Awards | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Name | Award Grant Date | Award Expiration Date | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price ($) | Number of Shares or Units of Stock That Have Not Vested | Grant Date Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan: Grant Date Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| Ronald F.Dutt | 10-20-23 | 10-20-33 | – | 223,216 | – | $3.36 | – | $– | – | $– |
| 10-31-22 | 10-31-32 | 20,043 | 60,132 | – | 3.43 | – | – | – | – | |
| 3-15-19 | 3-14-29 | 50,000 | – | – | 13.60 | – | – | – | – | |
| 7-25-18 | 7-24-28 | 33,527 | – | – | 19.80 | – | – | – | – | |
| 6-29-18 | 6-28-28 | 50,001 | – | – | 14.40 | – | – | – | – | |
| 10-26-17 | 10-25-27 | 50,000 | – | – | 4.60 | – | – | – | – | |
| 12-22-15 | 12-21-25 | 19,000 | – | – | 5.00 | – | – | – | – | |
| 10-29-21 | 10-29-31 | – | – | – | – | 4,021 | 23,121 | 4,021 | 23,121 | |
| 11-12-20 | 11-30-30 | – | – | – | – | 13,214 | 117,340 | 13,214 | 117,340 | |
| Jeffrey C. Mason (2) | 10-20-23 | 10-20-33 | – | 54,934 | – | 3.36 | – | – | – | – |
| 10-31-22 | 10-31-32 | 8,746 | 26,240 | – | 3.43 | – | – | – | – | |
| 10-29-21 | 10-29-31 | – | – | – | – | 1,280 | 7,360 | 1,280 | 7,360 | |
| Kevin S. Royal (3) | 3-4-24 | 3-4-34 | – | 55,000 | – | 5.00 | – | – | – | – |
| (1) | The fair value of each option grant is estimated at the date of grant using the Black-Scholes option pricing model. Expected volatility is calculated based on the historical volatility of the Company’s stock or, when the expected term exceeds how long the Company’s stock has been publicly traded, based on historical volatility of a comparable peer group of publicly traded companies. The risk-free interest rate is based on the U.S. Treasury yield for a term equal to the expected life of the options at the time of grant. The fair value of each restricted stock unit is the fair value of the Company’s common stock on the grant date. |
| (2) | On November 7, 2022, Mr. Mason’s position was expanded to include additional Company authority and delegation. |
| (3) | Mr. Royal was appointed as the Company’s Chief Financial Officer and Corporate Secretary effective March 4, 2024. |
Aggregated Option/Stock Appreciation Right (“SAR”) exercised and Fiscal year-end Option/SAR value table
Neither our executive officers nor the other individuals listed in the tables above, exercised options or SARs during Fiscal 2024.
2023 Employee Stock Purchase Plan (the “2023 ESPP”)
The 2023 ESPP was approved by the Board on March 6, 2023 and approved by the Company’s stockholders on April 20, 2023. The 2023 ESPP enables eligible employees of the Company and certain of its subsidiaries (a “Participating Subsidiary”) to use payroll deductions to purchase shares of the Company’s Common Stock and acquire an ownership interest in the Company. The maximum aggregate number of shares of the Company’s Common Stock that have been reserved as authorized for the grant of options under the 2023 ESPP is 350,000 shares, subject to adjustment as provided for in the 2023 ESPP. Participation in the 2023 ESPP is voluntary and is limited to eligible employees (as such term is defined in the 2023 ESPP) of the Company or a Participating Subsidiary who (i) has been employed by the Company or a Participating Subsidiary for at least 90 days and (ii) is customarily employed for at least twenty (20) hours per week and more than five (5) months in any calendar year. Each eligible employee may authorize payroll deductions of 1-15% of the eligible employee’s compensation on each pay day to be used to purchase up to 1,500 shares of Common Stock for the employee’s account occurring during an offering period. The 2023 ESPP has a term of ten (10) years commencing on April 20, 2023, the date of approval by the Company’s stockholders, unless otherwise earlier terminated.
There were 37,543 and zero shares of stock purchased under the ESPP during Fiscal 2024 and Fiscal 2023, respectfully.
Employment Agreements with Executive Officers
On February 12, 2021, we entered into an Amended and Restated Employment Agreement with the Company’s president and chief executive officer, Ronald F. Dutt (the “Dutt Employment Agreement”), which amends and restates the Employment Agreement effective December 11, 2012, as amended (the “Prior Agreement”). In addition to the inclusion of terms relating to change in control, termination, severance, benefits and the acceleration of vesting of options and restricted stock units upon certain events, the Dutt Employment Agreement memorialized Mr. Dutt’s continued services as the president and chief executive officer of the Company and its wholly-owned subsidiary, Flux Power, Inc. (“Flux Power”), and the terms pursuant to which he would provide such services. Pursuant to the terms of the Dutt Employment Agreement, Mr. Dutt’s current annual base salary is $375,000.
On November 20, 2024, Mr. Dutt notified the Company’s Board of Directors that he intends to retire from his position upon the appointment of a successor. The Board has commenced a search for a new chief executive officer and Mr. Dutt will remain with Flux Power through the search and transition period.
On February 12, 2021, we entered into an Employment Agreement with the Company’s chief financial officer, treasurer and secretary, Charles A. Scheiwe (the “Scheiwe Employment Agreement”). In addition to the inclusion of terms relating to change in control, termination, severance, benefits and the acceleration of vesting of options and restricted stock units upon certain events, the Employment Agreement memorialized Mr. Scheiwe’s continued services as the chief financial officer and secretary of the Company, and as chief financial officer/treasurer and secretary of Flux Power. Pursuant to the terms of the Scheiwe Employment Agreement, Mr. Scheiwe’s annual base salary was $205,200. On February 16, 2024, the Company and Mr. Charles Scheiwe agreed to the stepping down of Mr. Scheiwe as the Company’s Chief Financial Officer and Secretary, including all positions with the Company and Flux Power, Inc., a wholly-owned subsidiary of the Company (“Flux”) and transitioning to a consultant for the Company (“the “Transition”), effective March 1, 2024 (the “Separation Date”).Through the Separation Date, Mr. Scheiwe will be entitled to continue to receive his current salary. In addition, in connection with the Transition, the Board approved the accelerated vesting of unvested portions of outstanding awards previously granted to Mr. Scheiwe under the Company’s 2014 Equity Incentive Plan and 2021 Equity Incentive Plan (the “2021 Plan”).
On February 22, 2024, we entered into an Employment Agreement with Mr. Kevin S. Royal, in connection with Mr. Royal’s appointment as Chief Financial Officer and Corporate Secretary, which provides for an annual base salary of $330,000, effective March 4, 2024 (the “Employment Agreement”). The Employment Agreement includes terms relating to change in control, termination, severance, benefits and the acceleration of vesting of options and restricted stock units upon certain events. In addition, Mr. Royal will be eligible for a 60% cash bonus, as a percentage of base salary, and incentive stock options to purchase up to 55,000 shares of the Company’s common stock (the “Options”) under the 2021 Plan. The Options will be subject to the terms and conditions provided in the form of Incentive Stock Option Agreement under the 2021 Plan, will have an exercise price based on the Company’s 10-day volume weighted average price on the grant date, and will expire ten (10) years from the grant date and vest in four (4) equal annual instalments commencing one year after the grant date.
Under their respective employment agreement, Messrs. Dutt and Royal, among other things, are (i) eligible for annual target cash bonus and awards of restricted stock units or other equity-based incentive compensation consistent with his position as determined by the Board of Directors (the “Board”) and the Compensation Committee; (ii) entitled to reimbursement for all reasonable business expenses incurred in performing services; and (iii) entitled to certain severance and change of control benefits contingent upon such employee’s agreement to a general release of claims in favor of the Company following termination of employment. Messrs. Dutt and Royal and are also eligible to participate in all customary employee benefit plans or programs generally made available to the senior executive officers. Messrs. Dutt and Royal have each agreed to observe the terms of a standard confidentiality and non-compete agreement for a restricted period of two (2) years. Each of Messrs. Dutt and Royal employment is “at-will” and may be terminated at any time for any reason.
Separation Agreements
On August 12, 2022, Jonathan Berry, the Company’s Chief Operating Officer, separated from the Company and entered into an Employee Separation and Release dated August 24, 2022 (“Separation Agreement”). Under the Separation Agreement, the Company agreed to provide Mr. Berry with certain payments and benefits comprising of: (i) a separation payment of two hundred five thousand two hundred dollars, less required withholdings, (ii) twenty-eight thousand nine hundred seven and 52/100 dollars, less require holdings, to defray costs for COBRA coverage, and (iii) reimbursement for an amount equal to twelve months for life insurance continuation (collectively, the “Separation Benefits”). In exchange for the Separation Benefits, among other things as set forth in the Separation Agreement, Mr. Berry agreed to a release of claims and waivers in favor of the Company and to certain restrictive covenant obligations, and also reaffirmed his commitment to comply with his existing restrictive covenant obligations.
On March 1, 2024 and in connection with the Transition, the Company and Mr. Scheiwe entered into a Separation and Release Agreement (the “Scheiwe Separation Agreement”). Under the Scheiwe Separation Agreement, Mr. Scheiwe will be entitled to: (i) cash severance of $205,200, which is an amount equal to 12 months of Mr. Scheiwe’s base salary in effect as of the Separation Date, (ii) a one-time payment of $22,840.68, less required withholdings, to cover the COBRA premiums for COBRA continuation coverage for a period of twelve (12) months following the Separation Date, and (iii) provided that Mr. Scheiwe timely elects and enrolls in the life insurance continuation coverage, reimbursement for an amount equal to twelve (12) months of such life insurance continuation coverage. The Separation Agreement additionally includes a customary general release of claims by Mr. Scheiwe in favor of the Company and certain related parties.
Annual Bonus Plan
On November 5, 2020, the Board approved an annual cash bonus plan (the “Annual Bonus Plan”) which allows the Compensation Committee and/or the Board of the Company to set the amount of bonus each fiscal year and the performance criteria. Executive officers and all employees (other than part-time employees and temporary employees) are eligible to participate in the Annual Bonus Plan (“Participants”) as long as the Participant remains an active regular employee of the Company. The Annual Bonus Plan was effective for Fiscal 2021 and is effective each fiscal year thereafter (the “Plan Year”). For each Plan Year, the Compensation Committee establishes an aggregate amount of allocable Bonus under the Annual Bonus Plan and determines the performance goals applicable to a bonus during a Plan Year (the “Participation Criteria”). The Participation Criteria may differ from Participant to Participant and from bonus to bonus. The Participation Criteria for each Plan Year is based on the Company achieving certain performance targets based on annual revenue, gross margin, operating expense and new business development. All of the Company’s executive officers are eligible to participate in the Annual Bonus Plan.
On October 20, 2023, the Board approved an amended and restated annual cash bonus plan (the “Amended Annual Bonus Plan”) which allows the Compensation Committee and/or the Board of the Company to set the amount of bonus each fiscal year and the performance criteria. Executive officers and all employees (other than part-time employees and temporary employees) are eligible to participate in the Amended Annual Bonus Plan (“Participants”) as long as the Participant remains an active regular employee of the Company. The Amended Annual Bonus Plan is effective for fiscal year 2024 and each fiscal year thereafter (the “Plan Year”). For each Plan Year, the Compensation Committee will establish an aggregate amount of allocable Bonus under the Amended Annual Bonus Plan and determine the performance goals applicable to a bonus during a Plan Year (the “Participation Criteria”). The Participation Criteria may differ from Participant to Participant and from bonus to bonus. All of the Company’s executive officers are eligible to participate in the Amended Annual Bonus Plan.
The Amended Annual Bonus Plan was approved by the Board in anticipation of the Company adopting its “clawback” policy applicable to its executive officers as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).
Clawback Policy
To comply with Section 10D of the Securities Exchange Act of 1934, as amended, Rule 10D-1 promulgated under the Securities Exchange Act of 1934, as amended, and Nasdaq Listing Rule 5608 applicable to incentive-based compensation for executive officers of listed companies, in November 2023, the Board adopted a Policy for the Recovery of Erroneously Awarded Compensation (the “Clawback Policy”) with an effective date of October 2, 2023. Current executive officers of the Company have agreed in writing to the terms and conditions of the Clawback Policy. Under the Clawback Policy, if the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the federal securities laws, the Company will recoup any erroneously awarded incentive-based compensation from the Company’s current and former executive officers. Administration of the Clawback Policy will be by the Compensation Committee of the Company.
Restatement of Prior Financial Statements
In connection with the restatements of the Prior Financial Statements undertaken by the Company, the Compensation Committee, as the administrator, completed a recovery analysis under the Company’s Clawback Policy. The Compensation Committee concluded that although bonus amounts were paid to executive officers for fiscal periods ended before the effective date of the Clawback Policy, October 2, 2023, the bonuses will be deemed to be “Received” (as defined in the Clawback Policy) during those fiscal periods before the Clawback Policy became effective. As a result, such amounts would not fall under the definition of “Clawback Eligible Incentive Compensation” (as defined in the Clawback Policy”) and would therefore not be subject to further recovery analysis or actions for recovery. The analysis and conclusion does not include any analysis or recoverable amounts under 304 of the Sarbanes-Oxley Act pursuant to action by SEC.
Fiscal 2023
On October 31, 2022, the Compensation Committee also approved the bonus pool and performance criteria for the Annual Bonus Plan for the fiscal year 2023 (the “2023 Bonus”). For the Company’s fiscal year 2023, the performance goals applicable to a bonus are based on the Company achieving certain targets based on the Company’s annual revenue, Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, and stock-based compensation), functional goals (the “Financial Targets”), in addition to individual performance objectives and additional bonus amounts if the Company’s financial results exceeds certain thresholds of the Financial Targets.
The Compensation Committee approved the target cash bonuses under the 2023 Bonus based on the base salary for fiscal year 2023 for the following executive officers:
| Name · Position · Fiscal 2023 Base Salary · Bonus Percentage of Base Salary · Total Target Payout · Maximum Payout(1) | ||||||
|---|---|---|---|---|---|---|
| Ronald F. Dutt | Chief Executive Officer | $300,000 | (2) | 75% | $225,000 | $270,000 |
| Charles Scheiwe | Chief Financial Officer | $205,200 | 35% | $71,820 | $86,184 | |
| Jeffery C. Mason | Vice President of Operations | $206,000 | 30% | $61,800 | $74,160 | |
(1)Subject to a bonus cap for achieving above set revenue target and a payout cap for achieving 10% positive Adjusted EBITDA.
(2)To be effective during the second fiscal quarter of 2023.
Fiscal 2024
Salary Increases
On October 20, 2023, pursuant to the recommendation of the Compensation Committee of the Board (the “Compensation Committee”), the Board approved the following salary increases (the “Fiscal 2024 Annual Salary”) to the following executive officers, effective for the fiscal year 2024 (“Fiscal 2024”):
| Name | Position | Salary for Fiscal 2023 | Salary for Fiscal 2024 |
|---|---|---|---|
| Ronald F. Dutt | Chief Executive Officer | $300,000 | $375,000 |
| Charles Scheiwe* | Chief Financial Officer | $205,200 | $205,200 |
| Jeffrey Mason | Vice President of Operations | $206,000 | $230,720 |
- Plus an additional supplemental payment of $4,000 per month
On March 1, 2024, pursuant to the recommendation of the Compensation Committee, the Board approved an adjustment to the base salary for the following named executive officer: Jeff Mason, Vice President of Operations. The adjustment reflects a change in base salary to $275,000, effective March 1, 2024.
Fiscal 2024 Bonuses Under the Amended Bonus Plan
On October 20, 2023, pursuant to the recommendation of the Compensation Committee, the Board also approved the bonus pool and performance criteria for the Amended Annual Bonus Plan for Fiscal 2024 (the “2024 Bonus”). For Fiscal 2024, the performance goals applicable to a bonus are based on the Company achieving certain targets based on the Company’s full year revenue, Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, and stock-based compensation) for Fiscal 2024, and functional goals (the “Financial Targets”), in addition to individual performance objectives and goals (the “2024 Performance Matrix”).
The Board approved the following cash bonuses under the 2024 Bonus for the following executive officers:
| Name · Position · Maximum Payout(1) · Special Bonus Maximum Payout(2) | ||||
|---|---|---|---|---|
| Ronald F. Dutt | Chief Executive Officer | $256,281 | $400,000 | |
| Charles Scheiwe | Chief Financial Officer | $91,571 | $ | - |
| Jeffrey Mason | Vice President of Operations | $94,607 | $400,000 | |
(1)Full maximum payout assuming targets reached as set forth in the 2024 Performance Matrix.
(2)Full maximum payout for achieving certain additional gross margin targets
Restricted Stock Unit Grants
We did not grant any Restricted Stock Units to any of our executive officers in Fiscal 2024 and Fiscal 2023.
Stock Option Grants
Fiscal 2024 Grants
On October 20, 2023 (the “Fiscal 2024 Grant Date”), pursuant to the recommendation of the Compensation Committee, the Board approved the grant of stock options (the “Fiscal 2024 Options”) under the Company’s 2014 Equity Incentive Plan (the “2014 Plan”) and the Company’s 2021 Equity Incentive Plan (the “2021 Plan” and together with 2014 Plan, the “Plan”) to certain employees of the Company or its subsidiary, Flux Power, Inc. The Fiscal 2024 Options are subject to the terms and conditions provided in the form of the related Incentive Stock Option Agreement under the 2014 Plan (the “2014 Option Agreement”) or the form of Incentive Stock Option Agreement under the 2021 Plan (the “2021 Option Agreement”). Additionally, as previously discussed, Mr. Royal was granted options as part of his chief financial officer employment agreement.
The following executive officers of the Company were granted Options in such number, with such vesting schedule, and under the respective Plan, set forth as follows:
| Name | Position | Options (1) | Vesting Schedule |
|---|---|---|---|
| Ronald F. Dutt | Chief Executive Officer | 223,216 | Annually over 3 years from the date of grant |
| Charles Scheiwe | Chief Financial Officer | 42,750 | Annually over 3 years from the date of grant |
| Jeffrey Mason | Vice President of Operations | 54,934 | Annually over 3 years from the date of grant |
| Kevin S. Royal | Chief Financial Officer | 55,000 | Annually over 3 years from the date of grant |
(1)Subject to $100,000 ISO limitation under the 2021 Plan. Excess, if any, issued as non-qualified stock options.
Fiscal 2023 Grants
On October 31, 2022 (the “Fiscal 2023 Grant Date”), the Compensation Committee approved the grant of incentive stock options (the “Fiscal 2023 Options”) under the Company’s 2014 Plan and the Company’s 2021 Plan to certain employees of the Company or its subsidiary, Flux Power, Inc. The Options are subject to the terms and conditions provided in the form of the 2014 Option Agreement or the “2021 Option Agreement.
The following named executive officers of the Company were granted Stock Options under the 2021 Plan in such number and vesting schedule set forth as follows:
| Name | Position | Options (1) | Vesting Schedule |
|---|---|---|---|
| Ronald F. Dutt | Chief Executive Officer | 80,175 | Annually over 4 years from the date of grant |
| Charles Scheiwe | Chief Financial Officer | 41,878 | Annually over 4 years from the date of grant |
| Jeffrey C. Mason | Vice President of Operations | 34,986 | Annually over 4 years from the date of grant |
(1)Subject to $100,000 ISO limitation under the 2021 Plan. Excess, if any, issued as non-qualified stock options.
Incentive Plans
Management, the Committee and the Board will continue to explore and evaluate different long-term and short-term incentives to help attract, retain and motivate our employees to align their interest to our business and financial success through the use of equity award and cash bonuses.
Compensation of Non-Executive Directors
On January 14, 2022, pursuant to the recommendation and advice of the Compensation Committee of the Board of the Company, the Board approved the following annual compensation package for non-executive directors of the Company for calendar year 2022, as follows:
| Name · Independent Non-Executive Director · Position · Base Retainer (cash) · Chair Fee (cash) · Lead Independent Director (cash) | |||||||
|---|---|---|---|---|---|---|---|
| Lisa Walters-Hoffert | X | Audit Chair | $50,000 | $7,500 | $ | - | |
| Dale Robinette | X | Compensation Chair | 50,000 | 5,000 | 20,000 | ||
| John A. Cosentino Jr. (1) | X | Governance Chair | 50,000 | 5,000 | (1) | - | |
| Cheemin Bo-Linn (2) | X | Board Member | 50,000 | - | - | ||
| Michael Johnson | Board Member | 50,000 | - | - | |||
| (1) | Mr. Cosentino resigned as our director on March 1, 2022. As appreciation for Mr. Cosentino’s board services, the Board approved to (i) accelerate the vesting of the following securities the Board granted in connection with his board services: 435 unvested options and 4,578 restricted stock awards, and (iii) pay his board fees for 3rd quarter of Fiscal 2022. |
| (2) | Dr. Bo-Linn was appointed as Chairperson of the Governance Committee on March 3, 2022. For Dr. Bo-Linn’s services as Chairperson, she is entitled to a Chair Fee of $5,000 for calendar year 2022. |
There was no change to the cash compensation package for non-executive directors of the Company during Fiscal 2023.
On March 8, 2023, pursuant to the recommendation and advice of the Compensation Committee of the Board of the Company, the Board approved the following annual compensation package for non-executive directors of the Company for fiscal year ending June 30, 2024, as follows:
| Name · Independent Non-Executive Director · Position · Base Retainer (cash) · Chair Fee (cash) · Committee Member Fee(1) (cash) · Lead Independent Director (cash) | |||||||
|---|---|---|---|---|---|---|---|
| Lisa Walters-Hoffert | X | Audit Chair | $50,000 | $7,500 | $5,000 | $ | - |
| Dale Robinette | X | Compensation Chair | 50,000 | 5,000 | 6,250 | 20,000 | |
| Cheemin Bo-Linn (2) | X | Board Member | 50,000 | 5,000 | 6,250 | - | |
| Michael Johnson | Board Member | 50,000 | - | - | - | ||
| Mark Leposky (3) | X | Board Member | 50,000 | 5,000 | 6,250 | - | |
| (1) | Committee Member Fees: $3,750 for non-chair committee members of the Audit Committee, and $2,500 for non-chair committee members of the Compensation Committee and the Nominating and Governance Committee. |
| (2) | Dr. Bo-Linn stepped down as our director on April 18, 2024. As appreciation for Dr. Bo-Linn’s services as a director to the Company, the Board approved to accelerate the vesting of 18,561 unvested restricted stock units, effective as of April 18, 2024. |
| (3) | Mr. Leposky was elected as our director on April 18, 2024 and appointed as Chairperson of the Governance Committee on April 18, 2024. For Mr. Leposky’s services, he is entitled to a prorated Chair Fee and Committee Member Fee for the fiscal year ended June 30, 2024. |
On April 18, 2024, pursuant to the recommendation and advice of the Compensation Committee of the Board of the Company, the Board approved the following annual compensation package for non-executive directors of the Company for the fiscal year ending June 30, 2025, as follows:
| Name · Independent Non-Executive Director · Position · Base Retainer (cash) · Chair Fee (cash) · Committee Member Fee (1) (cash) · Lead Independent Director (cash) | |||||||
|---|---|---|---|---|---|---|---|
| Lisa Walters-Hoffert | X | Audit Chair | $50,000 | $7,500 | $5,000 | $ | - |
| Dale Robinette | X | Compensation Chair | 50,000 | 5,000 | 6,250 | 20,000 | |
| Mark F. Leposky | X | Nominating and Governance Chair | 50,000 | 5,000 | 6,250 | - | |
| Michael Johnson | Board Member | 50,000 | - | - | - | ||
| (1) | Committee Member Fees: $3,750 for non-chair committee members of the Audit Committee, and $2,500 for non-chair committee members of the Compensation, Nominating and Governance Committees. |
Equity Component of Non-Executive Director Compensation
In addition, our directors are eligible to receive an annual equity grant of RSUs. Pursuant to grants approved by our Board at the recommendation of the Compensation Committee in April 2022 and 2023, our non-executive directors were granted RSUs under the 2014 Plan. The number of RSUs granted to each non-executive director was equal to the amount of $50,000 divided by the fair market value of the RSUs, with all RSUs subject to vesting restrictions. The fair market value of the RSUs was determined by applying a 10-day volume weighted average stock price prior to the grant issuance date.
In April 2022, each of our non-executive directors were granted 17,793 RSUs which fully vested on April 28, 2023. In addition, in August 2022, as compensation for board services provided during the last quarter of Fiscal 2022, Dr. Bo-Linn was granted 5,034 RSUs, of which 1/3 vested immediately, each of the remaining 1/3 of the RSUs will vest on April 29, 2023, and April 29, 2024. Dr. Bo-Linn’s s grant was consistent with the standard equity component of Non-Executive Director Compensation Package as approved by the Board.
In April 2023, each of our non-executive directors were granted 16,883 RSUs which are scheduled to fully vest on April 20, 2024.
In April 2024, each of our non-executive directors were granted 17,057 RSUs under the 2014 Plan or the 2021 Plan, which are scheduled to fully vest on April 18, 2025.
Director Compensation Table
Below is a summary of compensation accrued or paid to our non-executive directors during Fiscal 2024 and Fiscal 2023. Mr. Dutt, our chief executive officer and president, received no compensation for his service as a director and is not included in the table. The compensation Mr. Dutt receives as an employee of the Company is included in the section titled “Executive Compensation.”
| Name · Fiscal Year · Fees Earned or Paid In Cash ($) · Stock Awards(1) ($) · All Other Compensation ($) · Total ($) | ||||||
|---|---|---|---|---|---|---|
| Lisa Walters-Hoffert | 2024 | $62,500 | $80,000 | $ | - | $142,500 |
| 2023 | 57,500 | 50,000 | - | 107,500 | ||
| Dale Robinette | 2024 | 81,250 | 80,000 | - | 161,250 | |
| 2023 | 75,000 | 50,000 | - | 125,000 | ||
| Michael Johnson | 2024 | 50,000 | 50,000 | - | 100,000 | |
| 2023 | 50,000 | 50,000 | - | 100,000 | ||
| Cheemin Bo-Linn (2) | 2024 | 48,958 | - | - | 48,958 | |
| 2023 | 55,000 | 50,000 | - | 105,000 | ||
| Mark F. Leposky (3) | 2024 | 15,312 | 80,000 | 95,312 | ||
| 2023 · - · - · - · - | ||||||
| (1) | Represent the fair value of the RSUs granted using the volume weighted average price of the ten days of trading prior to grant date. |
| (2) | Dr. Bo-Linn stepped down as our director on April 18, 2024. |
| (3) | Mr. Leposky was elected as our director on April 18, 2024. |
The following table shows the aggregate number of vested stock options held by our non-employee directors as of June 30, 2024 and June 30, 2023:
| Name | Year | Vested Stock Options |
|---|---|---|
| Lisa Walters-Hoffert | 2024 | 3,948 |
| 2023 | 3,948 | |
| Dale Robinette | 2024 | 3,948 |
| 2023 | 3,948 | |
| Cheemin Bo-Linn (1) | 2024 | – |
| 2023 | – | |
| Michael Johnson | 2024 | 9,948 |
| 2023 | 12,948 | |
| Mark F. Leposky (2) | 2024 | – |
| 2023 | – |
| (1) | Dr. Bo-Linn stepped down as our director on April 18, 2024. |
| (2) | Mr. Leposky was elected as our director on April 18, 2024. |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.