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:
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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):
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[ ] 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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NOTICEOF ANNUAL MEETING OF SHAREHOLDERS To
Be Held November 15, 2004
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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 new
Company location of Procyon Corporation, 1300 S. Highland Ave, Clearwater,
Florida 33756 on Monday, November 15, 2004, at 5:00 P.M. Eastern time, or at any
adjournment or adjournments thereof, for the following purposes:
1. To elect six 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; 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 October 12, 2004 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/ John C. Anderson
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John C. Anderson
President
Clearwater, Florida
October 12, 2004
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 November 15, 2004
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 5:00 p.m., Eastern Time, on Monday, November 15,
2004, 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 15, 2004. 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 October 12, 2004. 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
October 12, 2004, the Company had a total of 8,272,488 voting shares consisting
of 8,045,388 of Common shares, and 227,100 shares of Preferred Stock. Each 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.
I. ELECTION OF DIRECTORS
All nominees for election as directors are now 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.
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
---- --- ------------ -----
John C. Anderson 61 President and acting Principal 1994
Executive, Financial and Accounting
Officer and Director.
Chester L. Wallack 63 Director 1995
Fred W. Suggs, Jr. 58 Director 1995
Alan B. Crane 54 Director 1995
Richard T. Thompson 53 Director 1998
Jeffery S. Slowgrove 47 Director 1999
John C. Anderson. Mr. Anderson has served as a director of the Company and
also as its President and Principal Executive, Financial and Accounting Officer
since November 1994, when he purchased a controlling interest in the Company.
From 1989 to 1994, he served as President of Rush-In Mart, Inc., and an
import-export firm doing business primarily in the former Soviet Union. From
1978 to 1989, he served as President of Stuffit Company, Inc., and a print and
mail direct marketing firm with over 300 employees and eleven locations. From
1970 to 1978, he served as President of Radius International, a firm engaged in
retail and exporting activities. Mr. Anderson received a B.S. degree in Business
Administration from Kansas State University.
Chester L. Wallack. Mr. Wallack 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.
Fred W. Suggs, Jr. Mr. Suggs 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 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.
Richard T. Thompson. Since 1989, Mr. Thompson has been a principal of
Sunproof Corporation of Florida, which markets and installs products, such as
window film and solar shades, to reduce heat and glare in automobiles,
residences and commercial offices. From 1986 to 1988, he was an officer and
owner of American Industries, an injection molding enterprise. From 1979 through
1984, Mr. Thompson was the president and owner of Pinellas Millwork Company. In
1970, he purchased an office furniture and supply company, which was
subsequently merged with another office products store to create one of the
largest office products store in the Midwest. Mr. Thompson continued to serve as
an officer and part owner until 1979.
Jeffery Slowgrove. 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 IMRglobal Corp. in 1988 and has served as a director since
its inception. From 1988 to 1998, he also served as Treasurer of IMRglobal
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.
Significant Employees
James B. Anderson. 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, the Company's President,
Principal Executive, Financial and Accounting Officer, and the brother of
Justice Anderson.
Justice W. Anderson. 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, the
Company's President, Principal Executive, Financial and Accounting Officer, and
the brother of James B. Anderson.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding beneficial
ownership of Common Stock as of October 12, 2004 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 12, 2004, 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
October 12, 2004
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Number of Percent of
Name and Address(6) Shares (1) Class
------------------- ---------- -----
John C. Anderson 3,410,000(3) 42.2
Chester L. Wallack (l) 120,000(3) 1.4
Fred W. Suggs (l) 160,000(3) 2.0
Alan B. Crane (1) 80,000(3) *
Richard T. Thompson 65,000(3) *
Jeffery S. Slowgrove (2) 716,200(5) 8.9
All directors and officers and
director nominees as a group (six persons) 4,551,200 56.3%
RM.S. Limited Partnership 1,600,000 19.8%
*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 20,000 shares subject to currently exercisable options or options
which will become exercisable within 60 days.
(5) Includes 10,000 shares of subject to currently exercisable options or
options which will become exercisable within 60 days.
(6) Except as noted above, the address for all persons listed is 1300 S.
Highland Ave, Clearwater, Florida 33756
Compensation of Directors and Executive Officers.
Summary Compensation Table. The following table on the following page sets
forth the annual and long-term compensation for services in all capacities to
the Company for the three fiscal years ended June 30, 2004, 2003 and 2002 of the
Company's Chief Executive Officer (the "Named Officer"). No other officer of the
Company received total annual salary and bonus in excess of $100,000 during the
fiscal year ended June 30, 2004 ("fiscal 2004").
Long Term Compensation Awards
Fiscal Annual Compensation Securities Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Options/SARs(#) Compensation($)
John C. Anderson, 2004 $99,000 $ -0- -- $-0-
President, Chief Executive 2003 86,000 -0- -- -0-
and Financial Officer and 2002 86,000 -0- -- -0-
Director
Option Grants Table. No grants of stock options were made to the named
officer during fiscal 2004.
Aggregated Option Exercises in Last Fiscal Year and Year-End Option Values
Table. The following table sets forth information on the number of securities
and value underlying exercisable and unexercisable options for the year ended
June 30, 2004.
Number of Securities Under- Value of Unexercised In-
Shares lying Unexercised Options/ the-Money(1) Options/SARs
Acquired Value SARs at Fiscal Year-End at Fiscal Year-End($)(2)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
John C. Anderson -0- -0- 60,000 0 $2,250 $0
(1) Options are "in the money" if the fair market value of the underlying
securities exceeds the exercise or base price of the option.
(2) The dollar values are calculated be determining the difference between the
fair market value of the securities underlying the options at fiscal year
end and the exercise or base price of the options. The closing bid price
for the Common Stock was $0.25 on June 30, 2004, the last trading date for
the end of the 2004 fiscal year.
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
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. The Compensation Committee is composed of Messrs.
Wallack, Suggs and Crane. No member of the Compensation Committee is a former or
current officer or employee of the Company.
The primary function of the Compensation Committee is to review and make
recommendations to the Board with respect to the compensation, including
bonuses, of the Company's officers and to administer the Company's Option Plan.
The Company in July 2004, formed an Audit Committee, composed solely of Mr.
Slowgrove. Management believes that Mr. Slowgrove is independent and meets the
definition of an Audit Committee Financial Expert within the meaning of
applicable SEC rules. Previously, the entire board of directors acted as the
Company's Audit Committee. The Audit Committee does not have a charter, but is
in the process of developing one. The 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,
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 foregoing statement, the Company has used the definition of "independent
director" as contained in the corporate governance rules of the The Nasdaq Stock
Market, Inc.("Nasdaq").
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.
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
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, 2004, the Audit Committee submitted to the Board of Directors the
following report:
I have reviewed and discussed with management the Company's audited
financial statements for the year ended June 30, 2004 (the "Fiscal Year 2004
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, by the Auditing Standards Board of the American
Institute of Certified Public Accountants.
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, by the Independence Standards
Board, 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 2004 Financial Statements be
included in the Company's Form 10-KSB for the year ended June 30, 2004.
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 24, 2004 Jeffrey S. Slowgrove
Board and Committee Attendance
In fiscal 2004, the Board of Directors held four formal meetings. A
majority of directors attended each meeting in person or by telephone. The
Compensation Committee held one meeting during fiscal 2004. All of the members
of the Compensation Committee attended the meeting. The Audit Committee was
formed after the end of the fiscal year 2004 and, therefore, no meetings
occurred during that fiscal year.
The Company encourages, but does not require, Board members to attend the
annual meeting of shareholders. Three 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,
which is attached as Appendix B. 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 for the fiscal year ended June 30, 1999, 2000, 2001,
2002, 2003 and 2004. Subject to shareholder approval, Ferlita, Walsh & Gonzalez,
P.A. has been re-appointed by the Board of Directors to serve as the Company's
independent auditors for the ensuing fiscal year.
Audit Fees. In fiscal 2004, the Company paid to its independent accountants
$25,210 in fees related directly to the audit and review of the Company's
financial statements. In fiscal 2003, the Company paid to its independent
accountants $20,272 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 2003 and 2004 other
than the audit services described above.
Tax Fees: In fiscal 2004, the Company paid to its independent accountants
$1,000 in fees related directly to tax preparations. In fiscal 2003, 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 2003 and 2004 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.
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 2004, 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 AND RELATED TRANSACTIONS
Since its inception, Mr. Anderson has made advances to the Company when
necessary to fund its operations. At June 30, 2004, the Company owed him a total
of $261,506 on these advances, which is the outstanding balance of a
due-on-demand line of credit maintained by Mr. Anderson with a financial
institution, collateralized Mr. Anderson's personal residence.
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.
ANNUAL REPORT
The Annual Report to Shareholders for fiscal 2004 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 2004, as filed with the Securities and Exchange Commission on September
28, 2004. An additional copy, without exhibits, is available without charge to
any shareholder of the Company upon written request to John C. 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 2005 Annual Meeting. Shareholders
who intend to submit proposals for inclusion in the Proxy Statement relating to
the year ending June 30, 2005 must do so by sending the proposal and supporting
statements, if any, to the Company no later than July 18, 2005, 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, Florida 33756. The submission of a stockholder
proposal does not guarantee that it will be included in the Company's Proxy
Statement.
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.
Appendix A
PROCYON CORPORATION
Annual Meeting of Shareholders to be held on November 15, 2004
KNOW ALL MEN BY THESE PRESENTS: that the undersigned shareholder of Procyon
Corporation (the "Company") hereby constitutes and appoints John C. 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 November 15, 2004, 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
October 12, 2003, receipt of which is acknowledged.
1. To consider and act upon a proposal to elect Messrs. John C. Anderson,
Chester L. Wallack, Fred W. Suggs, Jr., Alan B. Crane, Richard T.
Thompson and Jeffery S. Slowgrove 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.
John C. Anderson Chester L. Wallack
Fred W. Suggs, Jr. Alan B. Crane
Richard T. Thompson Jeffery S. Slowgrove
2. To ratify the appointment of Ferlita, Walsh, & Gonzalez, P.A. as
independent auditors of the Company.
[ ] 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
Appendix B
Procyon Corporation
------------------------------------------------
Code of Ethics for Senior Financial Officers
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It is the policy of Procyon Corporation (the "Company") that all officers,
directors and employees conduct business on behalf of the Company in an honest
and ethical manner. In addition, the senior financial officers of the Company,
which include the President, the acting Principal Executive, Financial and
Accounting Officer, the Controller, and any other person performing similar
functions (the "senior financial officers"), are expected to comply with the
ethical standards and guidelines set forth below (the "Code of Ethics").
The Company expects that each senior financial officer will read and
understand this Code of Ethics and refer to it as necessary. This Code of Ethics
underscores the serious approach that must be taken to address the ethical
issues that confront the Company. Accordingly, senior financial officers of the
Company shall not commit acts contrary to the Code of Ethics, nor shall they
condone the commission of such acts by others within the Company.
Honest and Ethical Conduct
The senior financial officers of the Company are expected to exhibit and
promote the highest standards of honest and ethical conduct by:
Carrying out their duties on behalf of the Company in accordance with the
Code of Conduct, including handling actual or apparent conflicts of interest
between personal and professional relationships;
Complying with all applicable governmental laws, rules and regulations as
more specifically address in the Code of Conduct; and
Educating staff members regarding applicable governmental laws, rules and
regulations and promoting compliance by staff members with respect to such laws,
rules and regulations.
Financial Records and Periodic Reports
As a public company, the Company is committed to full, fair, accurate,
timely and understandable disclosure in reports and documents that it files
with, or submits to, the SEC and in other public communications made by the
Company. In support of this commitment, the Company plans on, among other
measures, (a) designing and implementing disclosure controls and procedures
(within the meaning of applicable SEC rules); (b) establishing a Disclosure
Committee, which includes and imposes duties on each of the Senior Executive and
Financial Officers; and (c) setting forth requirements relating to the
maintenance of accurate and complete records, the prohibition of false,
misleading or artificial entries on its books and records, and the full and
complete documentation and recording of transactions in the Company's accounting
records. In addition to performing their duties and responsibilities under these
requirements, each of the senior financial officers will establish and manage
the Company's reporting systems and procedures with due care and diligence to
ensure that:
Reports filed with or submitted to the SEC and other public communications
contain information that is full, fair, accurate, timely and understandable and
do not misrepresent or omit material facts.
Business transactions are properly authorized and completely and accurately
recorded on the Company's books and records in accordance with generally
accepted accounting principles and the Company's established financial policies.
Retention or disposal of Company records is in accordance with established
Company policies and applicable legal and regulatory requirements.
In addition, the senior financial officers of the Company are expected to
promote full and fair disclosure of accurate, complete and relevant information
concerning the Company by:
Encouraging open communications with senior management of the Company and
accountants engaged in financial audits of the Company to promote full
disclosure of all relevant and material financial information (both favorable
and unfavorable) of the Company;
Establishing procedures for staff members to inform senior management of
deviations in practice from policies and procedures governing honest and ethical
behavior, without fear of retaliation or harassment;
Establishing and administering financial accounting controls that are
appropriate to ensure the integrity of the financial reporting process and the
availability of timely and relevant information; and
Providing full, fair, accurate, relevant, timely and understandable
information for inclusion in the Company's periodic reports and in other public
communications made by the Company.
Compliance Procedures
It is the policy of the Company to comply strictly with all laws governing
its operations and to conduct its affairs in keeping with the highest moral,
legal and ethical standards. Accordingly, the senior financial officers will
comply with all applicable governmental laws, rules and regulations and the
standards and procedures contained in this Code of Ethics. The Company expects
all of its senior financial officers to comply with this Code of Ethics and
encourages each such officer to talk to his or her immediate supervisor, or the
Company's President and acting Principal Executive, Financial and Accounting
Officer or the chairperson of the Audit Committee when in doubt as to whether a
situation violates this Code of Ethics.
Any senior financial officer who becomes aware of any existing or potential
situation or transaction that may be in conflict with the intent of this Code of
Ethics is required to promptly notify his or her immediate supervisor or the
Company's President and acting Principal Executive, Financial and Accounting
Officer or the chairperson of the Audit Committee. Failure to do so is, itself,
a violation of this Code of Ethics. The supervisor, or the Company's President
and acting Principal Executive, Financial and Accounting Officer or the
chairperson of the Audit Committee, as applicable, will determine what action,
if any, is necessary, and will recommend that action for approval to the Board
of Directors of the Company.
In those circumstances where reporting to an immediate supervisor or the
President and acting Principal Executive, Financial and Accounting Officer is
impossible, inappropriate or simply uncomfortable, or in those circumstances
where the immediate supervisor or President and acting Principal Executive,
Financial and Accounting Officer has failed to take appropriate action, the
senior financial officer is required to report such concern in writing to the
chairperson of the Audit Committee.
If a violation of this Code of Ethics is discovered, and the senior
financial officer in question has acted in good faith, it is the Company's
policy to allow a reasonable amount of time for the senior financial officer to
correct the situation.
To encourage senior financial officers to report all violations of this
Code of Ethics and to raise questions concerning compliance with the Code of
Ethics, the Company will not permit retaliation or harassment for reports made
or concerns raised in good faith. "Good faith" does not mean that a report or
concern must be correct, but it does require that the senior financial officer
making the report or raising the concern believes that he or she is providing
truthful information.
All questions relating to how this Code of Ethics should be interpreted or
applied, recommendations for amendment to its provisions and/or action arising
from a failure to abide by the terms set forth herein, should be directed to the
chairperson of the Audit Committee. All newly appointed senior financial
officers of the Company must certify that they have read, understand and will
comply with this Code of Ethics by signing and returning, to the chairperson of
the Audit Committee, a copy of the attached Exhibit A.
Amendments to and Waivers of the Code of Ethics
From time to time, the Company may amend or waive certain provisions of
this Code of Ethics. Any senior financial officer who believes that a waiver may
be called for should contact the chairperson of the Audit Committee. Amendments
to and waivers of the Code of Ethics may be made only by the Board of Directors
of the Company or a committee of the Board, and must promptly be disclosed on
the Company's website, if appropriate, or by filing a Form 8-K with the
Securities and Exchange Commission.
Exhibit A
Procyon Corporation
Acknowledgment Certification
Code of Ethics for Senior Financial Officers
I hereby certify that I have read and understand the attached Procyon
Corporation Code of Ethics for Senior Financial Officers. Pursuant to such Code
of Ethics, I recognize that I must disclose or report all transactions required
to be disclosed or reported thereunder and comply in all other respects with the
requirements of the Code of Ethics. I also agree to cooperate fully with any
investigation or inquiry as to whether a possible violation of the foregoing
Code of Ethics has occurred. I understand that any failure to comply in all
aspects with the foregoing and these policies and procedures may lead to
sanctions, including termination.
Date: _______________________________
Signature _______________________________
Print Name: _______________________________
Position: _______________________________