SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
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)).
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
PROCYON CORPORATION
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(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):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction: 5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
PROCYON CORPORATION
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held December 8, 2007
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Notice is hereby given that the Annual Meeting of Shareholders of Procyon
Corporation, a Colorado corporation (the "Company"), will be held at the offices
of Procyon Corporation, 1300 S. Highland Ave, Clearwater, Florida 33756 on
Saturday, December 8, 2007, at 9:00 a.m. EST, or at any adjournment or
adjournments thereof, for the following purposes:
1. To elect eight 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 P.A. as
independent auditors for the 2008 fiscal year; and
3. 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 November 1, 2007, 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,
/s/ Regina W. Anderson
----------------------
Regina W. Anderson
Chief Executive Officer
Clearwater, Florida
November 7, 2007
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 CORPORATION
1300 S. HIGHLAND AVENUE
CLEARWATER, FLORIDA 33756
(727) 447-2998
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held December 8, 2007
General
The enclosed proxy is solicited by the Board of Directors of Procyon
Corporation (hereinafter referred to as the "Company") for use at the Annual
Meeting of Shareholders to be held at the Procyon Corporation, 1300 S. Highland
Ave., Clearwater, Florida at 9:00 a.m., Eastern Time, on Saturday, December 8,
2007, 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 November 7, 2007. 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 November 1, 2007. 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
November 1, 2007, the Company had a total of 8,210,338 voting shares consisting
of 8,049,588 of Common shares, and 200,900 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
but will not receive any additional compensation for such solicitation. Proxies
may be solicited personally or by mail, 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 which
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.
1
I. ELECTION OF DIRECTORS
The eight nominees for election as directors are currently members of the
Board of Directors. The Board of Directors knows of no reason why any nominee
would be unable to serve as a director. 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.
Capacities in Director
NAME Age Which Served Since
---- --- ------------ -----
Regina W. Anderson 60 Chief Executive Officer and 2005
Chairman of the Board
Chester L. Wallack 66 Director 1995
Fred W. Suggs, Jr. 61 Director 1995
Alan B. Crane 57 Director 1995
Jeffery S. Slowgrove 50 Director 1999
James B. Anderson 37 Director 2006
Justice W. Anderson 30 Director 2006
Michael T. Foley 69 Director 2006
Regina Anderson. Ms. Anderson has served as Chairman of the Board of
Directors since September 2005, and as our Chief Executive Officer since
November 2005. Ms Anderson has 26 years experience in the medical field and 20
years of management experience. Ms. Anderson worked at HealthSouth
Rehabilitation Hospital for ten years as Outpatient Director, in charge of the
main outpatient center plus four satellite offices. As Outpatient Director, she
was responsible for budgets involving over thirty thousand outpatient visits per
year; marketing of multiple outpatient specialty programs; and staffing with
thirty employees reporting directly to her. Prior to her work at HealthSouth,
she worked as the lead clinician at Clearwater Rehabilitation Center. Regina was
Vice-President of Operations at Stuffit Direct Marketing Company from 1980
through 1989. She was in charge of franchise sales and training; coupon
processing/production as well as coordination among thirteen franchise offices.
Regina was co-owner and President of Foxy's T-Shirt Shops and Le Shirt Company
from 1978-1980. Foxy's had five locations. She worked as a Speech Language
Pathologist with Morton Plant Hospital from 1970 through 1976. Regina received
her Masters Degree from Kansas State University in 1970.
Chester L. Wallack. Mr. Wallack has served as a director since 1995. He has
served as Chief Executive Officer of Felton West, Inc., a real estate
development and construction company in Dover, Delaware, since 1990. Mr. Wallack
is a retired United States Air Force officer having served as a pilot and in
various management capacities. He graduated from the University of Kansas with a
B.S. degree in Industrial Management and from Southern Illinois University with
an M.B.A. degree in Finance.
2
Fred W. Suggs, Jr. Mr Suggs has served on our Board of Directors since
1995. 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.
Alan B. Crane. Mr. Crane has served on our board since 1995 and is a
partner in Crane Farms, a farming partnership in Larned, Kansas. In 1994, Mr.
Crane was appointed by the governor of Kansas to the Kansas Water Authority to
oversee project expenditures. He received a B.S. degree from Kansas State
University.
Jeffery Slowgrove. Mr. Slowgrove has served as a director since 1999. Since
1998, Mr. Slowgrove has been the President of JSS Management Consulting, Inc., a
consulting firm in Palm Harbor, Florida, providing funding for start up
organizations and advice on the business and management issues facing companies
during early rapid growth and expansion phases. He co-founded IMR Global Corp.
in 1988 and has served as a director since its inception. From 1988 to 1998, he
also served as Treasurer of IMR Global Corp., which is a public company
providing applications software-outsourcing solutions for the information
technology departments of large businesses. He received a B.B.A. from the
University of Michigan.
James B. Anderson. Mr. Anderson has served as our Chief Financial Officer
since June 2005 and as a director since December 2006. 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. 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 Chairman of the
Board and Chief Executive Officer, and the brother of Justice W. Anderson, a
director and our Vice President of Sales & Marketing and the President of Amerx
Health Care Corporation. Mr. Anderson is the son-in-law of our deceased former
director, Richard T. Thompson.
Justice W. Anderson. Mr. Anderson has served as a director since December
2006. Since June 28, 2005, Mr. Anderson has served as our Vice President of
Sales and Marketing and the President of Amerx Health Care Corporation. Since
January of 2001, Mr. Anderson has been Vice President of Sales for Amerx Health
Care Corp. He also serves on the board of the American Academy of Podiatric
Practice Management. From August 2000 to January 2001, he served as Senior Sales
Representative, and as a sales representative from May 2000 to August 2000. He
received a 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, the son of Regina Anderson, the Company's Chairman of the Board and
Chief Executive Officer and the brother of James B. Anderson, a director and our
Chief Financial Officer and the President of Sirius Medical Supply, Inc.
3
Michael T. Foley. Mr. Foley is currently a Vice President and Director of
Suwannee Lumber Company, manufacturers of various lumber grades, garden mulch
and potting soil. From 1997 to 2003, Mr. Foley served as President and CEO of
Gypsum Products, Inc. of Largo, FL. From 1972 to 1996 Mr. Foley served in
various capacities at Florida Forest Products, Inc. including President,
Chairman and CEO. Prior to his association with these building material
suppliers, Mr. Foley worked for International Paper in pulp and newsprint sales.
Michael received his Bachelor of Business Administration degree from the
University of Notre Dame in 1960 and subsequently served on that university's
National Alumni Board. He obtained his MBA from the University of Florida in
1965. Mr. Foley has been a member of the Pinellas County Committee of 100 and
was appointed by Governor Lawton Chiles to the State of Florida Community Health
Purchasing Alliance (CHPA) Board. Mr. Foley is also a retired Captain in the
U.S. Naval Reserve.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding beneficial
ownership of Common Stock as of November 1, 2007 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 November 1, 2007, no officer or director of the
company owned any preferred shares. In addition, no individual shareholder
beneficially owned more than 5% of the Company's preferred shares. Common
Shareholdings on November 1, 2007
Number of Percent of
Name and Address(5) Shares Class
------------------- ------ -----
Regina W. Anderson 72,500 *
Chester L. Wallack (l) 120,000(3) 1.45
Fred W. Suggs (l) 160,000(3) 1.93
Alan B. Crane (1) 80,000(3) *
Jeffery S. Slowgrove 716,200(4) 8.71
James B. Anderson 111,000(7) 1.34
Justice W. Anderson(6) 3,483,500(3) 42.12
Michael T. Foley (2) 30,000(9) *
All directors and officers and
director nominees as a group (eight persons) 4,773,200 55.82
RMS Limited Partnership, 50 W. Liberty St, 1,600,000 19.49
Suite 650, Reno, NV 89501
----------
* Less than 1%
(1) Member of the Compensation Committee
(2) Member of the Audit Committee.
(3) Includes 60,000 shares subject to currently exercisable options or options
which will become exercisable within 60 days.
(4) Includes 10,000 shares of subject to currently exercisable options or
options which will become exercisable within 60 days.
(5) Except as noted above, the address for all persons listed is 1300 S.
Highland Ave, Clearwater, Florida 33756
4
(6) Mr. Anderson beneficially owns 3,350,000 shares of common stock and 60,000
currently exercisable options to purchase shares of common stock as Trustee
of the John C. Anderson Trust in accordance with Mr. Anderson's will. He
also owns of record 73,000 shares of common stock.
(7) Includes 30,000 shares subject to currently exercisable options and 10,000
shares in joint name with his wife.
(8) Includes 20,000 shares subject to currently exercisable options or options
which will become exercisable within 60 days, and 15,000 shares in joint
name with his wife.
(9) Includes 5,000 shares in joint name with his wife.
Compensation of Directors and Executive Officers.
Summary Compensation Table. The following table sets forth compensation
information for the two fiscal years ended June 30, 2007 and 2006 of the
Company's Chief Executive Officer and the President of our subsidiary, Amerx
Health Care Corp. (the "Named Executive Officers"). Elements of compensation for
our Named Executive Officers include salary, discretionary cash bonuses and
other perquisites and benefits. We do not have a pension plan, do not pay
non-equity incentive plan based compensation and do not offer nonqualified
deferred compensation arrangements. We also did not grant stock awards in fiscal
year 2007. As a result, columns related to these items have been omitted from
the table below.
All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($) Total($)
--------------------------- ---- --------- -------- --------------- --------
Regina W. Anderson, 2007 $156,317 $ 500 $ -0- $156,817
President, Chief 2006 $104,000 $1,000 -0- $105,000
Executive Officer 2005 -0- -0- -0- -0-
Justice W. Anderson, 2007 $ 36,200 $2,500 $112,437 (1) $151,137
President (Amerx Health
Care Corp.)
(1) Consists solely of commissions on sales from Amerx Health Care Corp.
Outstanding Equity Awards at 2007 Fiscal Year End
The following table sets forth information regarding the outstanding equity
awards to our Named Executive Officers at June 30, 2007. We have not granted any
stock awards to our Named Executive Officers and, accordingly, we had no
outstanding stock awards during 2007. Thus, the columns related to stock awards
have been omitted from the following table.
5
Option Awards
-------------
Number of Number of
Securities Securities
Underlying Underlying
Unexercised Unexercised Option
Options Options Exercise Option
(#) (#) Price Expiration
Name Exercisable Unexercisable ($) Date
------------------------------------------------------------------------------------
Regina W. Anderson, - - - -
Chief Executive
Officer and
Chairman of the
Board of Directors
Justice W. Anderson, 50,000 (1) - $ .2125 12/2009
President, Amerx 10,000 (1) - $ .1594 11/2010
Health Care Corp.
(1) As trustee of the John C. Anderson Trust in accordance with Mr. Anderson's
will.
Stock Option Plan
The Company's 1998 Omnibus Stock Option Plan (the "1998 Plan") is designed
as a comprehensive benefit plan that gives the Company the ability to offer a
variety of equity based incentives and awards to persons who are key to the
Company's growth, development and financial success. The 1998 Plan permits the
grant of awards to directors, employees and consultants of the Company and its
subsidiaries. The 1998 Plan provides for the grant of incentive stock options
("Incentive Stock Options") within the meaning of the Code, non-qualified stock
options, restricted shares, performance units, performance shares, dividend
equivalent, share appreciation rights ("SARs") and other forms of awards,
including deferrals of earned awards, (collectively, the "Awards"). Employees
and non-employees to whom an offer of employment has been extended, directors
and consultants of the Company are all eligible participants for all Awards,
except that Incentive Stock Options may be granted only to employees.
The 1998 Plan is administered by the Compensation Committee of the Board of
Directors, which construes and interprets the 1998 Plan, determines the terms
and conditions of the Awards granted under the 1998 Plan, including the
individuals who are to granted Awards, the exercise price, if any, the number of
shares subject to an Award and the vesting and duration of Awards, subject to
any restrictions contained in the 1998 Plan.
The maximum number of shares of Common Stock reserved and available for
Awards under the 1998 Plan is 1,000,000 and the Compensation Committee may limit
the number of shares that may be awarded in the form of restricted stock Awards.
The exercise price of Incentive Stock Options granted under the 1998 Plan
must be at least equal to the fair market value of the Common Stock of the
Company on the date of grant, and must be 110% of fair market value when granted
to an employee who owns shares representing more than 10% of the voting power of
all classes of stock of the Company. The exercise price of non-qualified stock
options granted under the 1998 Plan can not be less than 85% of the fair market
value of the Common Stock on the date of grant. The term of all options granted
6
under the 1998 Plan may not exceed ten years, except the term of Incentive Stock
Options granted to a 10% or more stockholder, may not exceed five years. The
1998 Plan may be amended or terminated by the Board of Directors, but no such
action may impair the rights of a participant under a previously granted option.
The 1998 Plan provides for the award of SARs and Performance Units and
Performance Shares. A SAR is an incentive Award that permits the holder to
receive (per share covered thereby) the amount by which the fair market value of
a share of Common Stock on the date of exercise exceeds the fair market value of
such share on the date the SAR was granted or at such date as the Compensation
Committee designates. The Compensation Committee may grant SARs independently,
in addition to, or in tandem (such that the exercise of the SAR or related stock
option will result in forfeiture of the right to exercise the related stock
option or SAR for an equivalent number of shares) with a stock option Award. A
Performance Unit or Performance Share is an incentive Award whereby the Company
commits to make a distribution depending on the attainment of a performance
objective and condition established by the Committee and the base value of the
Performance Unit or Performance Share.
Upon termination of services of a non-employee director or consultant, all
options issuable, but not yet granted, to such persons for services rendered
shall be granted and all options shall remain exercisable for the original
option term. Options granted to an employee are exercisable for specified
periods of time ranging from one month to one year following an employee's
termination depending on the circumstances of the termination, except that
options granted to an employee terminated for cause shall not be exercisable to
any extent after termination. An unexercised option is exercisable only to the
extent that it was exercisable on the date of termination.
The 1998 Plan provides that, in the event the Company enters into an
agreement providing for the merger of the Company into another corporation, an
exchange of shares with another corporation, the reorganization of the Company
or the sale of substantially all of the Company's assets, unvested stock options
become immediately vested and exercisable. Upon the consummation of the merger,
exchange, reorganization or sale of assets, the successor corporation must
assume all Awards or substitute another Award on substantially identical terms
to the outstanding Award.
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.
Committees of the Board
The Board of Directors has delegated certain of its authority to a
Compensation Committee and an Audit Committee.
7
The Compensation Committee is composed of Messrs. Wallack, Suggs and Crane.
The Compensation Committee has not adopted a Charter. However, we expect to
adopt a Compensation Committee Charter within the next several weeks. 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 rules of The Nasdaq Stock Market, Inc. ("Nasdaq"). 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.
The Company formed an Audit Committee in July 2004, composed solely of Mr.
Slowgrove. Richard T. Thompson joined the Audit Committee as its Chairman in
2006. Mr. Slowgrove resigned from the Audit Committee effective March 31, 2006.
In October 2006, we determined that our remaining Audit Committee member, Mr.
Thompson, did not meet the definition of independence for purposes of audit
committee service as contained in the applicable rules of Nasdaq. In addition,
Mr. Thompson had been unable to serve on the Audit Committee because of
health-related concerns. On October 19, 2006, Mr. Thompson died. In October
2006, the entire board of directors voted to act as the Company's Audit
Committee on an interim basis. In December 2006, the Board nominated Michael T.
Foley as Audit Committee member and Chair. The Board believes that Mr. Foley is
independent pursuant to Nasdaq rules and also meets the requirements of an
"audit committee financial expert" under applicable SEC Rules.
The Audit Committee adopted a Charter, effective October 27, 2006. A copy
of the Audit Committee Charter was attached as an Appendix to our Proxy
Statement for fiscal 2007, filed with the Securities and Exchange Commission on
November 13, 2006. 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. With respect to the Audit Committee, the
Company also follows the audit committee independence requirements pursuant to
Rule 10A-3(b) promulgated under the Exchange Act.
Director Independence
We believe that Messrs. Wallack, Suggs, Crane, Slowgrove and Foley 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 the Company and/or its
subsidiaries. We believe Mr. Foley meets the audit committee independence
requirements of Rule 10A-3(b).
8
Nomination Procedures
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 2009, along with all required information, must be
received by the Company no later than July 16, 2008.
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:
o integrity and honesty,
o ability to exercise sound, mature and independent business judgment in
the best interests of the shareholders as a whole,
o background and experience with manufacturing, retailing, operations,
finance, marketing or other fields which will complement the talents
of the other board members,
o willingness and capability to take the time to actively participate in
board and Committee meetings and related activities,
o ability to work professionally and effectively with other board
members and Company management,
o availability to remain on the board long enough to make an effective
contribution, and
9
o absence of material relationships with competitors or other third
parties that could present realistic possibilities of conflict of
interest or legal issues; and
o 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,
knowledge and abilities that will allow the board to fulfill its
responsibilities.
Audit Committee Report
In September, 2007, the Audit Committee, submitted the following report:
I have reviewed and discussed with management the Company's audited
financial statements for the year ended June 30, 2007 (the "Fiscal Year 2007
Financial Statements").
I have discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended, as adopted by the Public Company Accounting Oversight
Board in Rule 3200T.
I have received and reviewed the written disclosures and the letter from
the independent auditors required by Independence Standard No. 1, Independence
Discussions with Audit Committees, as amended, 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, I recommended to
the Board of Directors that the Fiscal Year 2007 Financial Statements be
included in the Company's Form 10-KSB for the year ended June 30, 2007.
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: September 25, 2007 Michael T. Foley,
Audit Committee member and Chairman
Board and Committee Attendance
In fiscal 2007, the Board of Directors held six formal meetings. A majority
of directors attended each meeting in person or by telephone. The Compensation
Committee held one meeting during fiscal 2007. The Audit Committee held one
meetings during fiscal 2007.
The Company encourages, but does not require, Board members to attend the
annual meeting of shareholders. All of the directors attended last year's annual
meeting.
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Code of Ethics for Senior Financial Officers
The Company has adopted a Code of Ethics for Senior Financial Officers. 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.
The Board of Directors has unanimously approved and recommends that
shareholders vote FOR the director nominees identified above.
II. SELECTION OF AUDITORS
The firm of Ferlita, Walsh & Gonzalez, P.A. has examined the financial
statements of the Company beginning with the fiscal year ended June 30, 1999.
Subject to shareholder approval, Ferlita, Walsh & Gonzalez, P.A. has been
re-appointed by the Board of Directors, acting as interim Audit Committee, to
serve as the Company's independent auditors for the ensuing fiscal year.
Audit Fees. In fiscal 2007, the Company paid to its independent accountants
$34,749 in fees related directly to the audit and review of the Company's
financial statements. In fiscal 2006, the Company paid to its independent
accountants $31,549 in fees related directly to the audit and review of the
Company's financial statements.
Audit-Related Fees. The Company's independent accountants performed no
other audit-related services for the Company during fiscal 2006 and 2007 other
than the audit services described above.
Tax Fees: In fiscal 2007, the Company paid to its independent accountants
$1,350 in fees related directly to tax preparations. In fiscal 2006, the Company
paid to its independent accountants $1,000 in fees related directly to tax
preparations.
All Other Fees: The Company's independent accountants performed no other
services for the Company during fiscal 2006 and 2007 other than the audit and
tax services described above.
The board of directors of the Company considers the services provided by
Ferlita, Walsh, & Gonzalez, P.A. to be compatible with maintaining Ferlita,
Walsh & Gonzalez, P.A.'s independence.
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. Effective May 2003, the board implemented, and
after the formation of the Audit Committee in July 15, 2004, the Audit Committee
ratified, new 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 P.A. as independent auditors for the Company for the 2008 fiscal year.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 2007, 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, except that the Form 3 filings of Regina Anderson, James B.
Anderson and Justice W. Anderson were inadvertently filed late.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than transactions described below, since July 1, 2006, 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:
o in which the amount involved exceeds $120,000; and,
o 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.
Messrs. Wallack, Suggs, Crane and Thompson, have purchased a total of
261,000 shares of Preferred Stock at a price of $1 per share. Such purchases
were made on terms and conditions, which were identical to the purchases made by
all other private investors who purchased Preferred Stock. Regina W. Anderson,
our Chairman and Chief Executive Officer, personally guaranteed the loan we
secured from Bank of America, N.A., in the amount of $508,000, to purchase our
office building in July 2006 and guaranteed a line of credit secured by the
Company in the amount of $250,000. Mr. Slowgrove, a director, acted as a
consultant to the Company for portions of fiscal 2007, at a total compensation
to him of approximately $27,500.
ANNUAL REPORT
The Annual Report to Shareholders for fiscal 2007 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-KSB for
fiscal 2007, as filed with the Securities and Exchange Commission on September
27, 2007. An additional copy, 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, Florida 33756.
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 the Company's 2009 Annual Meeting. Shareholders
who intend to submit proposals for inclusion in the Proxy Statement relating to
the year ending June 30, 2009 must do so by sending the proposal and supporting
statements, if any, to the Company no later than July 16, 2008, and must meet
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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, Florida 33756. 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 fiscal 2009 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 September
29, 2008 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, Florida 33756. 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.
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Appendix A
PROCYON CORPORATION
Annual Meeting of Shareholders to be held on December 8, 2007
KNOW ALL MEN BY THESE PRESENTS: that the undersigned shareholder of Procyon
Corporation (the "Company") hereby constitutes and appoints Regina W. Anderson
and Chester L. Wallack, or either of them, as attorneys and proxies, each with
the power to appoint his substitute, and hereby authorizes them to represent and
vote, as designated below, all of the shares of Common Stock or Preferred Stock
of the Company which the undersigned is entitled to vote at the Annual Meeting
of Shareholders of the Company to be held December 8, 2007, and at any and all
adjournments thereof with respect to the matters set forth below and described
in the Notice of Annual Meeting of Shareholders and Proxy Statement dated
November 7, 2007, receipt of which is acknowledged.
1. To consider and act upon a proposal to elect Regina W. Anderson, and
Messrs. Chester L. Wallack, Fred W. Suggs, Jr., Alan B. Crane, Jeffery S.
Slowgrove, James B. Anderson, Justice W. Anderson and Michael T. Foley as
directors to hold office for one-year terms or until their successors are
elected and qualified.
[ ] FOR ELECTION OF ALL NOMINEES (except as shown below)
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
Instruction: To withhold authority to vote for any individual
nominee, strike through the nominee's name below.
Regina W. Anderson Chester L. Wallack
Fred W. Suggs, Jr. Alan B. Crane
Jeffery S. Slowgrove Michael T. Foley
James B. Anderson Justice W. Anderson
2. To ratify the appointment of Ferlita, Walsh, & Gonzalez, P.A. as
independent auditors of the Company for the 2008 fiscal year.
[ ] FOR RATIFICATION
[ ] AGAINST RATIFICATION
[ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any and all
adjournments thereof.
[ ] AUTHORIZED TO VOTE
[ ] ABSTAIN
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 AND FOR PROPOSAL 1 AND THE PROXY HOLDERS WILL VOTE
ON ANY PROPOSAL UNDER 3 IN THEIR DISCRETION AND IN THEIR 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