PARK CITY GROUP INC
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant
[ ]
Check the appropriate box:
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[ ]
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Preliminary Proxy Statement
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[ ]
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Confidential, for Use of the SEC Only (as permitted by
Rule 14a-6(e)(2))
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[X]
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Definitive Proxy Statement
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[ ]
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Definitive Additional Materials
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[ ]
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Soliciting Material Pursuant to 14a-12
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PARK CITY GROUP, INC.
(Name of Registrant as Specified in Its Charter)
_________________________________
(Name of Person(s) Filing Proxy Statement, if other than the
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.
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1.
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Title of each class of securities to which transaction
applies:
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Aggregate number of securities to which transaction
applies:
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3.
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
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4.
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Proposed maximum aggregate value of transaction:
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5.
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Total fee paid:
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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.
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1.
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Amount Previously Paid:
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2.
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Form, Schedule or Registration Statement No.:
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3.
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Filing Party:
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4.
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Date Filed:
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PARK CITY GROUP, INC.
5282 South Commerce Drive, Suite D292
Murray, Utah 84107
(435) 645-2000
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Dear Fellow Stockholder:
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October 11, 2019
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On behalf of the Board of Directors and management of Park City
Group, Inc. (the “
Company
”, “
we
”, “
us
” and “
our
”), y
ou are invited to attend the Company’s 2019
Annual Meeting of Stockholders (the “
Annual
Meeting
” or
“
Meeting
”). The Meeting will be held at our
corporate offices located at 5282 South Commerce Drive, Suite D292,
Murray, Utah on November 11, 2019 at 9:00 A.M., local
time.
Details of the business to be conducted at the
Annual Meeting are described in this Proxy Statement. We have also
made available a copy of our Annual Report on Form 10-K for the
year ended June 30, 2019 (the “
Annual
Report
”) with this Proxy
Statement. We encourage you to read our Annual Report. It includes
our audited financial statements and provides information about our
business and services.
Your vote is important.
Regardless of whether you plan to
attend the Annual Meeting in person,
please read the accompanying
Proxy Statement and then vote by internet, telephone or e-mail as
promptly as possible.
Returning your proxy will help us
assure that a quorum will be present at the Annual Meeting and
avoid the additional expense of duplicate proxy solicitations. Any
stockholder attending the Annual Meeting may vote in person, even
if he or she has returned a proxy.
Please refer to the “Voting” section
contained within this Proxy Statement for instructions on
submitting your vote. Voting promptly will save us additional
expense in soliciting proxies and will ensure that your shares are
represented at the Annual Meeting.
Our
Board of Directors has unanimously approved the proposals set forth
in the Proxy Statement and we recommend that you vote in favor of
each such proposal.
We look
forward to seeing you at the Annual Meeting.
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Sincerely,
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/s/ Randall K.
Fields
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RANDALL
K. FIELDS
Chairman and Chief Executive Officer
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
November 11, 2019
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Date and Time
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November 11, 2019 at 9:00 A.M., local time
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Place
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Our corporate offices located at 5282 South Commerce Drive, Suite
D292, Murray, Utah 84107
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Items of Business
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1.
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Election of five director nominees named in this Proxy Statement,
each for a term of one year expiring at the Company’s 2020
annual meeting of stockholders or until their respective successors
are duly elected and qualified;
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2.
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Approval, on an advisory basis, the compensation paid to our Named
Executive Officers as disclosed in this proxy statement
(“
Say-on-Pay
”);
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3.
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Approval, on an advisory basis, of the frequency of future
Say-on-Pay votes (“
Say-on-Frequency
”);
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4.
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Ratification of Haynie & Company as our independent registered
public accounting firm for the fiscal year ending June 30, 2020;
and
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5.
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To transact other business that may properly come before the Annual
Meeting or any adjournments or postponements thereof.
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Adjournments and Postponements
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Any action on the items of business described above may be
considered at the Annual Meeting at the time and on the date
specified above or at any time and date to which the Annual Meeting
may be properly adjourned or postponed.
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Record Date
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September 18, 2019
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Only holders of record of our common stock, par value $0.01 per
share (“
Common
Stock
”) and/or Series B
Convertible Preferred Stock (“
Series
B
Preferred
”) as of the Record Date are entitled to
notice of and to vote at the Annual Meeting.
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Meeting Admission
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You are invited to attend the Annual Meeting if you are a
stockholder of record or a beneficial owner of shares of the
Company’s Common Stock or Series B Preferred as of the Record
Date.
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Availability of Proxy Materials
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The Company’s proxy materials and the Annual Report on Form
10-K for the year ended June 30, 2019 are also available on the
internet at:
www.iproxydirect.com/PCYG
.
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Voting
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If your
shares are held in the name of a bank, broker or other fiduciary,
please follow the instructions on the proxy card.
Whether or not you expect to attend in person,
we urge you to vote your shares as promptly as possible by
following the proxy card instructions attached to this Proxy
Statement that you received in the mail so that your shares may be
represented and voted at the Annual Meeting.
Your vote is very
important
.
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BY ORDER OF THE BOARD OF DIRECTORS,
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/s/ Edward L.
Clissold
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Murray,
Utah
October 11, 2019
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EDWARD
L. CLISSOLD
General Counsel and Corporate Secretary
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PARK CITY GROUP, INC.
5282 South Commerce Drive, Suite D292
Murray, Utah 84107
(435) 645-2000
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the
Board of Directors (the “
Board
”) of Park City Group, Inc., a Nevada
corporation (the “
Company
”, “
we
”, “
us
” and “
our
”), for use at the upcoming 2019 Annual
Meeting of Stockholders (the “
Annual
Meeting
”) to be held on
November 11, 2019 at 9:00 A.M. local time, and at any
adjournment or postponement thereof, at our corporate offices
located at 5282 South Commerce Drive, Suite D292, Murray, Utah
84107.
On or about October 15, 2019, we mailed proxy
materials to each of our stockholders entitled to notice of and to
vote at the Annual Meeting as of September 18, 2019 (the
“
Record Date
”). This Proxy Statement contained
instructions on how to access this Proxy Statement, our Annual
Report on Form 10-K for the year ended June 30, 2019 (the
“
Annual
Report
”) and how to
submit your vote via the internet, telephone and/or e-mail. Proxy
Statement and the Annual Report both are available online
at:
www.iproxydirect.com/PCYG
.
Voting
The
specific proposals to be considered and acted upon at our Annual
Meeting are summarized in the notice above which are described in
more detail throughout this Proxy Statement. As
of the Record Date, we had outstanding 19,821,188
shares of our Common Stock, and 625,375 shares of our Series B
Preferred, each of which are entitled to vote at the Annual
Meeting. Each holder of Common Stock is entitled to one vote
per share of Common Stock held, and each holder of Series B
Preferred is entitled to 2.5 votes per share of Series B Preferred
held on the Record Date. As of the Record Date, outstanding shares
represented 21,356,809 votes, consisting of 19,821,188 attributable
to Common Stock and 1,563,437 attributable to Series B
Preferred.
Quorum
In
order for any business to be conducted at the Annual Meeting, the
holders of more than 50% of the shares entitled to vote at the
Annual Meeting must be represented, either in person or by properly
executed proxy. If a quorum is not present at the scheduled time of
the Annual Meeting, the stockholders who are present may adjourn
the Annual Meeting until a quorum is present. The time and place of
the adjourned Annual Meeting will be announced at the time the
adjournment is taken, and no other notice will be given. An
adjournment will have no effect on the business that may be
conducted at the Annual Meeting.
Required Vote for Approval
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No.
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Proposal
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1.
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Election of Directors.
The five
director nominees who receive the greatest number of votes cast at
the Annual Meeting by shares present, either in person or by proxy,
and entitled to vote will be elected.
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2.
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Advisory Vote to Approve Executive Compensation.
This Proposal calls for a non-binding,
advisory vote regarding the compensation paid to our Named
Executive Officers (“
Say-on-Pay
”). Accordingly, there is no "required vote"
that would constitute approval. However, our Board, including our
Compensation Committee, values the opinions of stockholders and
will consider the result of the vote when making future decisions
regarding our executive compensation policies and
practices.
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3.
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Ad
visory Vote to Approve the
Frequency of Advisory Votes on Executive
Compensation.
The advisory vote to approve the
frequency of the advisory votes on executive compensation is
non-binding. A stockholder may vote to set the frequency of the
“say on pay” vote to occur “EVERY YEAR”,
“EVERY TWO YEARS, “EVERY THREE YEARS”, or the
stockholder may vote to “ABSTAIN”. The selection among
these four options to receive the highest number of votes will be
deemed by the stockholders.
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4.
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Ratification of Appointment of Auditors.
To ratify the appointment of Haynie & Company
as our independent auditors for the fiscal year ending June 30,
2020, the number of votes cast “FOR” must exceed the
number of votes cast “AGAINST” this
Proposal.
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-1-
Abstentions and Broker Non-Votes
All
votes will be tabulated by the inspector of election appointed for
the Annual Meeting, who will separately tabulate affirmative and
negative votes, abstentions and broker non-votes. An abstention is
the voluntary act of not voting by a stockholder who is present at
a meeting and entitled to vote. A broker “non-vote”
occurs when a broker nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not
have discretionary power for that particular item and has not
received instructions from the beneficial owner. If you hold your
shares in “street name” through a broker or other
nominee, your broker or nominee may not be permitted to exercise
voting discretion with respect to some of the matters to be acted
upon. If you do not give your broker or nominee specific
instructions regarding such matters, your proxy will be deemed a
“broker non-vote.”
Under
Nevada law, abstentions and broker non-votes are not counted as
votes cast on an item and therefore will not affect the outcome of
any proposal presented in this Proxy Statement, although they are
counted for purposes of determining whether there is a quorum
present at the Annual Meeting.
Voting and Revocation of Proxies
If your proxy is properly returned to the Company,
the shares represented thereby will be voted at the Annual Meeting
in accordance with the instructions specified thereon. If you
return your proxy without specifying how the shares represented
thereby are to be voted, the proxy will be voted (i)
FOR
the election of the five director
nominees identified in this Proxy Statement, each of whom has been
nominated by our Board;
(
ii)
FOR
Say-on-Pay;
(iii)
to hold advisory votes on executive
compensation
EVERY
THREE YEARS
;
(iv)
FOR
ratification of the appointment of
Haynie & Company as our independent auditors for fiscal year
ending June 30, 2020; and (v) at the discretion of the proxy
holders, on any other matter that may properly come before the
Annual Meeting or any adjournment or postponement
thereof.
You
may revoke or change your proxy at any time before the Annual
Meeting by submission to our Corporate Secretary at our corporate
offices at 5282 South Commerce Drive, Suite D292, Murray, Utah,
84107, a notice of revocation or another signed proxy with a later
date. You may also revoke your proxy by attending the Annual
Meeting and voting in person. Attendance at the Annual Meeting
alone will not revoke your proxy. If you are a stockholder
whose shares are not registered in your own name, you will need
additional documentation from your broker or record holder to vote
personally at the Annual Meeting.
Solicitation
We
will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of proxy materials, any
requested copies of this Proxy Statement and our Annual Report,
form of proxy, as well as any additional solicitation materials
that may be furnished to our stockholders. Copies of any
solicitation materials will be furnished to brokerage houses,
fiduciaries and custodians holding shares in their names that are
beneficially owned by others so that they may forward this
solicitation material to such beneficial owners. In addition, we
may reimburse such persons for their costs in forwarding the
solicitation materials to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by a
solicitation by telephone, facsimile or other means by our
directors, officers or employees. No additional compensation will
be paid to these individuals for any such services. Except as
described above, we do not presently intend to solicit proxies
other than by mail and telephone.
-2-
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PROPOSAL NO. 1
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ELECTION OF DIRECTORS
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General
The Company’s Articles of Incorporation, as
amended (“
Charter
”), and Amended and Restated Bylaws
(“
Bylaws
”) provide that our Board will consist of no
less than one director, and that upon a change in the number of
directors, any newly created or eliminated directorships will be
apportioned by the remaining members of the Board or by
stockholders.
Our
Board currently consists of five directors. Each of the director
nominees identified below has confirmed that he is able and willing
to serve as a director if elected. If any of the director nominees
become unable or unwilling to serve, your proxy will be voted for
the election of a substitute director nominee recommended by the
current Board.
Upon
recommendation of the Nominating and Corporate Governance
Committee, the Board has nominated Randall K. Fields, Robert W.
Allen, Ronald C. Hodge, William S. Kies, Jr., and Peter J. Larkin
for election at the Meeting, each to serve for one-year terms until
the conclusion of the 2020 annual meeting of stockholders or until
his successor is duly elected and qualified.
As
previously disclosed by the Company on its Current Reports on Form
8-K filed October 4, 2018 and September 4, 2019, respectively,
former directors Richard Juliano decided not to stand for
re-election at the expiration of his term as a director at the
conclusion of the 2018 Annual Meeting of Stockholders and Austin F.
Noll, Jr. retired as a director on the Board, effective August 29,
2019. Effective that same day, Peter J. Larkin was appointed as a
director to fill the vacancy created by Mr. Noll’s
retirement. The Board wishes to formally thank Messrs. Juliano and
Noll for their dedication and service to the Company during their
respective terms on the Board.
Please
see “Directors” below for more information, including
background information, business experience, and the Nominating and
the Corporate Governance Committee’s recommendation of each
director nominee.
Required Vote and Recommendation
The
election of directors requires the affirmative vote of a plurality
of the shares present or represented by proxy and entitled to vote
at the Annual Meeting. The five director nominees receiving the
highest number of affirmative votes will be elected. Accordingly,
under Nevada law, our Charter and Bylaws, abstentions and broker
non-votes will not have any effect on the election of a particular
director nominee. Unless otherwise instructed or unless authority
to vote is withheld, shares represented by executed proxies will be
voted “FOR” the election of each of the
nominees.
The Board recommends that stockholders vote
“
FOR
” the election of Messrs. Fields,
Allen, Hodge, Kies and Larkin.
DIRECTORS
The
sections below set forth certain information regarding the director
nominees for election as directors of the Company. There are no
family relationships between any of the directors and the
Company’s Named Executive Officers.
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Director Nominee, Title
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Age
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Randall
K. Fields – Chairman, President and Chief Executive
Officer
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72
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Robert
W. Allen – Independent Director
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76
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Ronald
C. Hodge – Independent Director
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71
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William
S. Kies, Jr. – Independent Director
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67
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Peter
J. Larkin – Independent Director
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65
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Randall K.
Fields
founded the Company in
1990 and has been the Chairman of the Board, President and Chief
Executive Officer of the Company since its inception and is
responsible for the strategic direction of the Company. Mr. Fields
also serves as the Company’s Chief Operating Officer and Head
of Sales. Mr. Fields co-founded Mrs. Fields Cookies with
his then wife, Debbi Fields, in 1977. He served as Chairman of
the Board of Mrs. Fields Cookies from 1978 to 1990. In the
early 1970’s, Mr. Fields established Fields Investment Group,
a financial and economic consulting firm. Mr. Fields received
a Bachelor of Arts degree and a Master of Arts degree from Stanford
University, where he was Phi Beta Kappa, Danforth Fellow, and
National Science Foundation Fellow.
As
the founder of the Company, Mr. Fields’ expertise in the
Company’s industry and markets, his extensive sales,
marketing and technical background, and his expansive business
experience allow him to bring a unique understanding of the
industries and markets in which the Company operates, as well as an
entrepreneurial vision to the Company and the Board.
-3-
Robert W.
Allen
joined the Board in October 2007. Mr. Allen is a
seasoned executive with many years of prior experience in positions
such as Chairman, President, and Chief Executive Officer of
businesses ranging in size from $200 million to $2.5
billion. Mr. Allen has over thirty years of experience in the
dairy industry, most notably as a catalyst for developing companies
and a turn-around agent for troubled companies or divisions. Mr.
Allen was Chief Executive Officer of Tuscan Lehigh Dairies from
July 1994 to December 1998, where he established a leadership team
that repositioned the company and developed a position in the
market place for the branding of its products. Prior to this,
from September 1991 to April 1994, he served as Executive Vice
President of Borden, Inc., where he was recruited to turn around
the largest and most troubled division of the company. He is
also a past Chair of Kid Peace International, a $160 million
non-profit agency assisting children in
crises.
Mr.
Allen’s years of experience in an area of growth for the
Company, the dairy industry, as well as his extensive experience
developing and managing companies in senior executive roles, add
significant value to the Company and its Board of Directors in
assessing challenges in one of its growth markets, and in
addressing organizational and development issues facing the
Company.
Ronald C.
Hodge
joined the Board in
February 2013. Mr. Hodge was an advisor to Delhaize America, LLC, a
role he transitioned into following his time as Delhaize
America’s Chief Executive Officer from March 2011 to October
2012. Prior to Delhaize America, Mr. Hodge served as Executive Vice
President of Delhaize Group and Chief Executive Officer of
Hannaford Bros. Co. He joined Hannaford in 1980 and served in
various executive roles, including Vice President and General
Manager of Hannaford’s New York Division, Senior Vice
President of Retail Operations, Executive Vice President of Sales
and Marketing, and Executive Vice President and Chief Operating
Officer. He became President of Hannaford in December 2000 and
Chief Executive Officer in 2001. While leading the start-up of
Hannaford’s entry into upstate New York, Mr. Hodge was
elected Chairman of the New York State Food Merchant’s
Association, and served on several Community Agency Boards of
Directors. He chaired the Northeastern New York United Way Campaign
in 1995 and was selected as the New York Capital Region’s
Citizen of the Year in 1996. Mr. Hodge holds a Bachelor of Science
degree in business administration from Plymouth State College in
New Hampshire.
Mr.
Hodge’s 38 years of management experience in the grocery
industry, including leading the successful expansion of Hannaford
Bros. Co., provides the Company with valuable industry knowledge
and insight as the Company continues to grow its scan-based
technologies to a growing client base.
William S.
Kies, Jr
.
joined the Board in November 2011. Mr. Kies
is currently a principal and the founder of Kies Consulting, LLC, a
premier consulting practice specializing in the supermarket
industry established in 1994. Clients of Kies Consulting
include Fortune 100 consumer package goods corporations and
companies offering national services, programs and in-store support
to all channels of food distribution. Prior to Kies
Consulting, he was the President and Chief Operating Officer of
IGA, Inc., the world’s largest banner group of independent
supermarkets with over 4,000 stores serviced by 24 wholesalers in
20 countries.
Mr.
Kies’ wide-ranging management expertise, including experience
in the supermarket industry, together with his substantial contacts
with potential clients for the Company’s services,
contributes significantly to the Board’s overall initiatives
and provides the Company with valuable insight and direction in the
execution of the Company’s business plan.
Peter J.
Larkin
joined the Board in
August 2019 following the retirement of former director, Austin F.
Noll, Jr. effective August 29, 2019. Mr. Larkin is the former
President and Chief Executive Officer of the National Grocers
Association (“
NGA
”), a national trade association
representing the retail and wholesale grocers that comprise the
independent sector of the food distribution industry and the
not-for-profit NGA Foundation where he served from 2010 until his
resignation effective September 1, 2019. Prior to that, Mr. Larkin
served as President of Larkin Public Affairs from 2007 to 2010, as
President and Chief Executive Officer for the California Grocers
Association from 1996 to 2007 and in several positions within the
food service industry in state and governmental affairs between
1976 to 1988, including serving as Vice President of State
Government Relations and Environmental Affairs with the Food
Marketing Institute from 1989 to 1996. Mr. Larkin holds a B.A.
degree in Political Science from the University of Vermont and has
served as a director and advisory board member with various
industry-related companies and organizations throughout his career
spanning over four decades.
There
have been no events under any bankruptcy act, no criminal
proceedings and no judgments or injunctions material to the
evaluation of the ability and integrity of any director or director
nominee during the past ten years.
-4-
Director Compensation
Currently,
each of our non-executive directors, consisting of Messrs. Allen,
Hodge, Kies and Larkin, receive an annual retainer of $75,000
for their service on the Board and is payable in either cash or
shares of Common Stock in quarterly installments, at the
Company’s discretion. During the year ended June 30, 2019,
the Company elected to pay director fees to non-executive directors
in shares of Common Stock.
In
addition to the annual retainer, any newly-appointed outside
independent directors to the Board receive a one-time grant of
$150,000, payable in shares of the Company’s restricted
Common Stock, calculated based on the market value of the shares of
Common Stock on the date of grant. The shares vest ratably over a
five-year period.
The following table provides information regarding
2019 compensation paid to non-employee directors. Information
regarding executive compensation paid to Mr. Fields in 2019 is
reflected in the Summary Compensation table below under
“Executive Compensation
”
of this Proxy Statement.
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Director
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Fees
Earned
or
Paid
in
Cash ($)
(1)
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Stock
Awards
($)
(2)
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Total
($)
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Robert W.
Allen
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$
75,000
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-
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$
75,000
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Ronald C.
Hodge
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$
75,000
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-
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$
75,000
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William S. Kies,
Jr.
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$
75,000
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-
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$
75,000
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Peter J. Larkin
(3)
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-
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-
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-
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Former
Directors
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Richard Juliano
(4)
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$
28,125
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-
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$
28,125
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Austin F. Noll,
Jr.
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$
75,000
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-
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$
75,000
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(1)
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Amounts reported in this table represent the amounts earned by each
non-employee director for their service on the Company’s
Board during the year ended June 30, 2019, all of which were paid
in shares of Common Stock.
The amounts in this column do not represent cash payments, but
instead, represent the aggregate grant date fair value of the
shares of Common Stock issued to each non-employee director in
fiscal 2019, calculated in accordance with Financial Accounting
Standards Board (“
FASB
”) Accounting Standards Codification
(“
ASC
”) Topic 718.
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(2)
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As of June 30, 2019, none of the Company’s non-executive
directors held any stock awards or options.
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(3)
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No
reportable fees paid during the year ended June 30, 2019 due to Mr.
Larkin’s appointment to the Board in August
2019.
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(4)
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Fees
earned between July 1, 2018 through the expiration of Mr.
Juliano’s term at the conclusion of the 2018 Annual Meeting
of Stockholders on November 15, 2018.
|
-5-
GOVERNANCE AND BOARD MATTERS
Term of Office
The
Company’s Charter provides for a Board comprised of one class
of directors. Directors serve from the time they are duly elected
and qualified until the conclusion of the next annual meeting of
stockholders or their earlier death, resignation, or removal from
office.
Director Independence
The Board has determined that all of its members,
other than Mr. Fields, who serves as the Company’s President
and Chief Executive Officer, are “independent” within
the meaning of Rule 5605(a)(2) of the NASDAQ Stock Market Rules,
and the Securities and Exchange Commission (the
“
SEC
”) rules regarding
independence.
-6-
Director Nomination Process
The
Nominating and Corporate Governance Committee of the Board
identifies director nominees by first considering those current
members of the Board who are willing to continue service. Current
members of the Board who possess the skills and experience that are
relevant to our business and are willing to continue service are
considered for re-election. Additionally, the Nominating and
Corporate Governance Committee endeavor to take into consideration
the appropriate balance of the value that the existing members of
the Board provide continuing their service in addition to the new
perspective that new directors may bring to the Board. Nominees for
director are selected by a majority of the members of the Board.
Although the Company does not have a formal policy on Board
diversity, in considering the suitability of director nominees, the
Nominating and Corporate Governance Committee considers such
factors as it deems appropriate to develop a Board and committees
that are diverse in nature and comprised of experienced and
seasoned advisors. Factors considered by the Nominating and
Corporate Governance Committee include judgment, knowledge, skill,
diversity, integrity, experience with businesses and other
organizations of comparable size, including experience in the
grocery industry, business, finance, administration or public
service, the relevance of a potential nominee’s experience to
our needs and experience of other Board members, experience with
accounting rules and practices, the desire to balance the
considerable benefit of continuity with the periodic injection of
the fresh perspective provided by new members, and the extent to
which a potential nominee would be a desirable addition to the
Board and/or any committees of the Board.
The
Nominating and Corporate Governance Committee and the Board may
consider recommendations for director candidates that are submitted
by stockholders, provided such nominations are submitted in
accordance with the procedure set forth in our Bylaws. The
Nominating and Corporate Governance Committee will evaluate
stockholder suggestions for director nominees in the same manner as
it evaluates suggestions for director nominees made by management,
then-current directors or other appropriate sources.
Code of Ethics and Business Conduct
The Company’s Code of Ethics and Business
Conduct is posted at the Company’s website located at
www.parkcitygroup.com
.
The Role of the Board in Risk Oversight
The
Board’s role in the Company’s risk oversight process
includes reviewing and discussing with members of management areas
of material risk to the Company, including strategic, operational,
financial and legal risks. The Board, as a whole, primarily deals
with matters related to strategic and operational risk. The Audit
Committee deals with matters of financial and legal risk. The
Compensation Committee addresses risks related to compensation and
other related matters. The Nominating and Governance Committee
manages risks associated with Board independence and corporate
governance. Committees report to the full Board regarding their
respective considerations and actions.
The Board’s Leadership Structure
Our Board has discretion to determine whether to separate or
combine the roles of Chairman of the Board and Chief Executive
Officer. Our founder, Mr. Fields, has served in both roles since
2001, and our Board continues to believe that his combined role is
most advantageous to the Company and its stockholders. Our
technology has its genesis in the operations of Mrs. Fields
Cookies, co-founded by Mr. Fields, and Mr. Fields possesses
in-depth knowledge of the issues, opportunities and risks facing
us, our business and our industry and is best positioned to fulfill
the Chairman’s responsibility to develop meeting agendas that
focus the Board’s time and attention on critical matters and
to facilitate constructive dialogue among Board members on
strategic issues.
In
addition to Mr. Fields’ leadership, the Board maintains
effective independent oversight through a number of governance
practices, including, open and direct communication with
management, input on meeting agendas, and regular executive
sessions.
MEETINGS AND COMMITTEES OF THE BOARD
The
Board met seven times and acted five times by unanimous
written consent during the fiscal year ended June 30, 2019. The
current committees of the Board are the Audit Committee,
Compensation Committee, and Nominating and Corporate Governance
Committee. Each of the Company’s directors who served during
fiscal 2019 attended or participated in no less than 75% or more of
the aggregate of (i) the total number of meetings of the
Board; and (ii) the total number of meetings held by all
committees of the Board on which such director served as a member
during fiscal 2019. Directors are not required to attend the
Company’s annual meeting of stockholders.
-7-
The
following table represents the current composition of each
committee of the Board and meetings held during the fiscal year
ended June 30, 2019:
|
|
Committees
|
||
|
Director
|
Audit
|
Compensation
|
Nominating
and Corporate Governance
|
|
Randall K.
Fields
|
|
|
|
|
Robert W.
Allen
|
X
|
CC
|
|
|
Ronald C.
Hodge
|
CC
|
X
|
X
|
|
William S. Kies,
Jr.
|
|
|
CC
|
|
Peter J.
Larkin
|
X
|
|
X
|
|
Meetings
Held in Fiscal 2019
|
4
|
1
|
1
|
|
|
|
|
|
|
CC
– Committee Chair
X
– Member
|
|
|
|
Audit
Committee
. Pursuant to the
Company’s Audit Committee Charter, the Audit Committee
assists the Board in fulfilling its legal and fiduciary obligations
in matters involving our accounting, auditing, financial reporting,
internal control and legal compliance functions by approving the
services performed by our independent accountants and reviewing
their reports regarding our accounting practices and systems of
internal accounting controls. The Audit Committee also oversees the
audit efforts of our independent accountants and takes those
actions as it deems necessary to satisfy it that the accountants
are independent of management. The current members of the Audit
Committee are Messrs. Hodge, Allen and Larkin each of whom are
non-executive members of our Board. During the year ended June 30,
2019, Mr. Noll, Jr. served as a member of the Audit Committee and
upon his resignation effective August 29, 2019, Mr. Larkin was
appointed to the Board and to serve as a member of the Audit
Committee. Mr. Hodge also serves as the Committee Chair and Mr.
Allen is the designated Audit Committee financial expert, as
that term is defined under SEC rules implementing Section 407 of
the Sarbanes Oxley Act of 2002, and possesses the requisite
financial sophistication, as defined under applicable rules. We
believe the composition of our Audit Committee meets the criteria
for independence under, and the functioning of our Audit Committee
complies with, the applicable requirements of the NASDAQ Stock
Market Rules, the Sarbanes-Oxley Act of 2002 and SEC rules and
regulations
Compensation
Committee.
Pursuant to the
Company’s Compensation Committee Charter, the Compensation
Committee determines our general compensation policies and the
compensation provided to our directors and officers. The
Compensation Committee also reviews and determines bonuses for our
officers and other employees. In addition, the Compensation
Committee reviews and determines equity-based compensation for our
directors, officers, employees and consultants and administers our
stock option plans and employee stock purchase plan. During the
year ended June 30, 2019, the Compensation Committee consisted of
Messrs. Allen and Hodge with Mr. Allen also serving as Committee
Chair. We believe that the composition of our Compensation
Committee meets the criteria for independence under, and the
functioning of our Compensation Committee complied with, the
applicable requirements of the NASDAQ Stock Market Rules, the
Sarbanes-Oxley Act of 2002 and SEC rules and regulations during the
year ended June 30, 2019, and will continue to do so in future
periods.
Nominating and Corporate
Governance Committee.
Pursuant
to the Company’s Nominating and Corporate Governance
Committee Charter, the Nominating and Corporate Governance
Committee is responsible for making recommendations to the Board
regarding candidates for directorships and the size and composition
of the Board. In addition, the Nominating and Corporate Governance
Committee is responsible for overseeing our corporate governance
guidelines and reporting and making recommendations to the Board
concerning corporate governance matters. The current members of the
Nominating and Corporate Governance committee are Messrs. Kies,
Jr., Hodge and Larkin with Mr. Kies, Jr. also serving as Committee
Chair. During the year ended June 30, 2019, Mr. Noll, Jr. served as
a member of the Nominating and Corporate Governance Committee and
upon his resignation effective August 29, 2019, Mr. Larkin was
appointed to the Board and to serve as a member of the Nominating
and Corporate Governance Committee. We believe that the composition
of our Nominating and Corporate Governance Committee meets the
criteria for independence under, and the functioning of our
Nominating and Corporate Governance Committee complies with, the
applicable requirements of the NASDAQ Stock Market Rules, the
Sarbanes-Oxley Act of 2002 and SEC rules and
regulations.
Stockholder Communications
If
you wish to communicate with the Board, you may send your
communication in writing to:
Park City Group, Inc.
c/o Corporate Secretary
5282 South Commerce Drive, Suite D292
Murray, Utah 84107
You
must include your name and address in the written communication and
indicate whether you are a stockholder of the Company. Our
Corporate Secretary will review any communication received from a
stockholder, and all material and appropriate communications from
stockholders will be forwarded to the appropriate director(s) or
committee of the Board based on the subject matter.
-8-
EXECUTIVE OFFICERS
The
following table sets forth information regarding the
Company’s current executive officers and significant
employees:
|
Executive Officer
|
|
Age
|
|
Title
|
|
|
Randall K. Fields
|
|
|
72
|
|
Chairman, President and Chief Executive Officer
|
|
John R. Merrill
|
|
|
49
|
|
Chief Financial Officer
|
|
Edward L. Clissold
|
|
|
63
|
|
General Counsel and Corporate Secretary
|
|
Significant Employees
|
|
Age
|
|
Title
|
|
|
Christine Davidson
|
|
|
65
|
|
Senior Vice President, Chief Customer Officer
|
The
executive officers and significant employees named above were
appointed by the Board, each to serve in such position until their
respective successors have been duly appointed and qualified or
until their earlier death, resignation or removal from
office.
Executive Officers
Randall K.
Fields
Please see Mr.
Fields’ biography under the “Directors” section
of this Proxy Statement.
John R.
Merrill
joined the Company in
May 2019 and currently serves as the Company’s Chief
Financial Officer. Mr. Merrill
has held a variety of
financial roles within public and private organizations including
United Health Group, Clear Channel, IMG, and Sports
Authority. Most recently, Mr. Merrill
served as
Chief Financial Officer
of 360 Touch Advertising from 2016 to 2018, as Chief Financial
Officer of Track Group, Inc. (OTCQX: TRCK) from 2014 to 2016, and
as a merger and acquisition consultant for UnitedHealth Group
(NYSE: UNH) from 2010 to 2014. In addition, Mr. Merrill previously
served as the Company’s Chief Financial Officer from 2006 to
2010. Mr. Merrill began his career with KPMG and holds a
Bachelor’s and Master’s degrees in Accounting from the
University of South Florida.
Edward
L. Clissold
joined the
Company in March 2002 and currently serves as the Company’s
General Counsel and Corporate Secretary. Mr. Clissold previously
served as the Company’s Chief Financial Officer from August
2012 until September 2015. Prior to his time with the Company, Mr.
Clissold served as General Counsel for Mrs. Fields Cookies from
August 1987 to April 1995 and was also in private practice. Mr.
Clissold holds a Bachelor’s degree in Finance from the
University of Utah and a Juris Doctorate from Brigham Young
University.
Significant Employees
Christine Davidson
first joined the Company in 2006 and has served as Senior Vice
President, Chief Customer Officer since July 2016. Ms. Davidson is
the primary business contact for key retail and supplier accounts.
Her team is responsible for establishing, maintaining and growing
customer accounts by simultaneously working with internal teams and
customer teams creating customer satisfaction by crafting
enhancements, determining implementation methodologies, training
options and materials to meet market needs. Prior to joining Park
City Group, Ms. Davidson held management positions in the
Caribbean, Scotland and Nigeria as well as in higher education in
Britain and the United States. Ms. Davidson holds a business degree
from Strathclyde University located in Glasgow,
Scotland.
-9-
EXECUTIVE COMPENSATION
Summary Compensation Table
The table set forth below reflects certain
information about the compensation paid or accrued during the years
ended June 30, 2019 and 2018 to our Chief Executive Officer and our
executive officers, other than our Chief Executive Officer, who
were serving as an executive officer as of June 30, 2019 and whose
annual compensation exceeded $100,000 during such year
(collectively the “
Named Executive
Officers
”). As previously
reported on the Company’s Current Report on Form 8-K, the
Company’s former Chief Financial Officer, Todd Mitchell
resigned from his position effective May 15, 2019. Compensation
paid to Mr. Mitchell during the years ended June 30, 2019 and 2018
is included in the table below.
|
Name and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock Awards
($)
(1)
|
All Other Compensation ($)
|
Total
($)
|
|
Randall
K. Fields
|
2019
|
915,590
(2)
|
450,000
(3)
|
|
130,816
(4)
|
1,396,406
|
|
Chief Executive Officer and Chairman of the Board
|
2018
|
905,494
(2)
|
350,000
(3)
|
|
135,240
(4)
|
1,490,734
|
|
John
R. Merrill
|
2019
|
219,791
|
50,000
|
14,583
|
|
284,374
|
|
Chief Financial Officer
|
2018
|
16,667
|
|
|
|
16,667
|
|
Edward
L. Clissold
|
2019
|
185,000
|
|
|
|
185,000
|
|
General Counsel and Corporate Secretary, former Chief Financial
Officer
|
2018
|
183,541
|
|
48,481
|
|
232,022
|
|
Former Named Executive Officers
|
|
|
|
|
|
|
|
Todd Mitchell
(5)
|
2019
|
225,000
|
|
|
|
225,000
|
|
Former Chief Financial Officer
|
2018
|
225,000
|
|
128,893
|
|
353,893
|
|
(1)
|
Stock awards consist solely of shares of restricted Common Stock.
Amounts shown do not reflect compensation actually received by the
Named Executive Officer. Instead, the amounts shown are the
compensation costs recognized by the Company during the fiscal year
for stock awards as determined pursuant to FAS 123R.
|
|
|
|
|
(2)
|
On July 1, 2017, the Company and Mr. Fields and Fields Management,
Inc. (“
FMI
”),
a management company wholly owned by Mr. Fields, entered into an
amended Employment Agreement and an amended Service Agreement,
respectively. The year-over-year change in Mr. Fields’
salary, bonus and other compensation are a result of terms in the
amended agreements. See “Employment Agreements” below
for a more detailed description of Mr. Fields’ amended
Employment Agreement and FMI’s amended Service
Agreement.
$823,176 and $823,176 of Mr. Fields’ cash compensation during
2019 and 2018, respectively, was paid to FMI pursuant to the terms
and conditions of the Service Agreement in effect during the
applicable period.
|
|
|
|
|
(3)
|
The terms and conditions of the amended Employment Agreement
by and between Mr. Fields and the Company, first dated June 30,
2013 and amended on July 1, 2017, and the amended Services
Agreement, by and between FMI and the Company, first dated June 30,
2013 and amended on July 1, 2017, provide for an incentive bonus to
be paid to Mr. Fields at the discretion of the Compensation
Committee and upon approval by the Board, based upon the
Company’s achievement of certain performance goals. Upon
recommendation of the Compensation Committee, the Board
approved a $350,000 and $450,000 bonus to Mr. Fields for
performance for the years ending June 30, 2018 and June 30, 2019,
respectively. The amounts granted reflect successful completion of
certain business objectives.
|
|
|
|
|
(4)
|
These amounts include premiums paid on life insurance policies of
$73,416 and $73,416 for 2019 and 2018, respectively; computer
related expenses of $6,000 for each of 2019 and 2018; Company car
related expenses of $14,400 and $18,720 for 2019 and 2018,
respectively; medical premiums of $25,000 and $25,104 for 2019 and
2018, respectively; and reimbursement for certain accounting
services of $12,000 for each of 2019 and 2018.
|
|
|
|
|
(5)
|
Effective May 15, 2019, Mr. Mitchell resigned from his position as
Chief Financial Officer.
|
-10-
Employment Arrangements
Fields Employment Agreement
The Company has an Employment Agreement with
Randall K. Fields, first dated June 30, 2013 and subsequently
amended on July 1, 2019, (the “
Fields Employment
Agreement
”), pursuant to
which Mr. Fields is employed by the Company in the position of
Sales Department Manager through June 30, 2023 for annual
compensation of $50,000, subject to annual increases equal to 75%
of the Company’s percentage annual revenue growth beginning
in the 2014 fiscal year. Mr. Fields may also be eligible
for an annual incentive bonus, awarded at the discretion of the
Compensation Committee.
The Company also has a Services Agreement with
Fields Management, Inc. (“
FMI
”), first dated June 30, 2013 and
subsequently amended on July 1, 2019, to provide certain
executive management services to the Company, including designating
Mr. Fields to perform the functions of President and Chief
Executive Officer for the Company through June 30, 2023 (the
“
Services
Agreement
”). Pursuant to
the Services Agreement, FMI is paid an annual base fee of $500,000,
subject to annual increases equal to 75% of the Company’s
percentage annual revenue growth beginning in the 2014 fiscal year.
FMI may also be eligible for an annual incentive bonus, awarded at
the discretion of the Company’s Board.
FMI
also receives: (i) up to $1,200 per month for reimbursement of
vehicle expenses; (ii) an annual computer equipment allowance of up
to $6,000; (iii) 600,000 shares of the Company’s Common
Stock, subject to a pro-rata 10-year vesting schedule; and (iv) a
retirement annuity or other bonus award to be developed within six
months of the effective date. The Company also maintains and pays
the premiums for a $5.0 million life insurance policy in the name
of Mr. Fields, with the beneficiary to be designated by Mr. Fields
at his sole discretion.
Merrill Employment Agreement
The Company and John R. Merrill entered into an
Employment Agreement on May 29, 2019 (the
“
Merrill
Employment Agreement
”),
pursuant to which Mr. Merrill receives an annual base salary of
$225,000. Upon execution of the Merrill Employment Agreement, Mr.
Merrill received 19,800 restricted shares of the Company’s
Common Stock (the “
Incentive
Shares
”), which Incentive
Shares are subject to vesting conditions set forth in the Merrill
Employment Agreement.
Outstanding Equity Awards at Fiscal Year-End
The
following table generally sets forth the number of outstanding
equity awards that have not been earned or vested or that have not
been exercised for each of the Named Executive Officers as of June
30, 2019. No other equity awards otherwise reportable in
this table have been granted to any of our Named Executive
Officers.
|
|
Option Awards
|
Stock Awards
|
||||
|
Name
|
Number of Securities Underlying Unexercised Options
Exercisable
(#)
|
Number of Securities Underlying Unexercised Options
Unexercisable
(#)
|
Option Exercise Price
($)
|
Option Expiration Date
|
Number of Shares or Units of Stock That Have Not
Vested
(#)
|
Market Value of Shares or Units of Stock That Have
Not Vested
($)
(1)
|
|
Randall
K. Fields
|
-
|
-
|
-
|
-
|
776,744
|
$
4,163,348
|
|
Chairman, President and Chief Executive Officer
|
|
|
|
|
|
|
|
John
R. Merrill
|
-
|
-
|
-
|
-
|
30,004
|
$
160,821
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
Edward
L. Clissold
|
-
|
-
|
-
|
-
|
-
|
-
|
|
General Counsel and Corporate Secretary
|
|
|
|
|
|
|
|
(1)
|
Market value based on the closing market price of $5.36 of the
Company’s Common Stock on June 28, 2019, as reported on the
NASDAQ Capital Market.
|
-11-
Description of Equity Compensation Plans
The
following table sets forth information as of June 30, 2019 with
respect to compensation plans under which shares of the
Company’s Common Stock may be issued:
|
Second Amended and Restated 2011 Stock Incentive Plan
|
|
In January 2013, the Board approved the Second Amended and Restated
2011 Stock Incentive Plan (the “
2011 Plan
”), which plan was approved by stockholders
on March 29, 2013. The 2011 Plan was subsequently amended by the
Board on October 30, 2015 and August 3, 2017 to increase the number
of shares available for issuance. Under the terms of the 2011
Plan, officers, key employees, consultants and directors of the
Company are eligible to participate. The maximum aggregate
number of shares that may be granted under the 2011 Plan is
1,250,000 shares. Our Compensation Committee administers the
2011 Plan. The exercise price for each share of Common Stock
purchasable under any incentive stock option granted under the 2011
Plan shall be not less than 100% of the fair market value of the
Common Stock, as determined by the closing price of our Common
Stock on the grant date, as reported on the NASDAQ Capital
Market. If the incentive stock option is granted to a
stockholder who possesses more than 10% of the Company’s
voting power, then the exercise price shall be not less than 110%
of the fair market value on the date of grant. Each option
shall be exercisable in whole or in installments as determined by
the Compensation Committee at the time of the grant of such
options. All incentive stock options expire after ten years;
however, if the incentive stock option is held by a stockholder who
possesses more than 10% of the Company’s voting power, then
the incentive stock option expires after five years. If the
option holder is terminated, then the incentive stock options
granted to such holder expire no later than three months after the
date of termination. For option holders granted incentive
stock options exercisable for the first time during any fiscal year
and in excess of $100,000 (determined by the fair market value of
the shares of Common Stock as of the grant date), the excess shares
of Common Stock shall not be deemed to be purchased pursuant to
incentive stock options.
|
|
|
||
|
Second Amended and Restated 2011 Employee Stock Purchase
Plan
|
|
In January 2013,
the Board
approved
the Second
Amended Employee Stock Purchase Plan (the
“
ESPP
”),
which
plan was approved by stockholders on March 29, 2013. The ESPP was
subsequently amended by the Board on October 30, 2015 and August 3,
2017 to increase the number of shares available for issuance. The
ESPP
provides every full-
and part-time employee of the Company an opportunity to acquire and
expand their equity interest in the Company by giving each
participating employee the opportunity to purchase shares of Common
Stock at a discount from fair market value. Additionally, the ESPP
may also be used to issue shares of Common Stock in lieu of cash
compensation. The ESPP is administered and interpreted by the
Compensation Committee.
|
401(k) Retirement Plan
The
Company offers an employee benefit plan under Benefit Plan Section
401(k) of the Code. The Company utilizes ADP Retirement
Services as its administrator and trustee of the
Company’s 401(k) plan. Employees who have attained the age of
18 are immediately eligible to participate. The Company, at
its discretion, may match employees’ contributions at a
percentage determined annually by the Board. The Company does not
currently match contributions.
Indemnification for Securities Act Liabilities
Nevada law authorizes, and the Company’s
Amended and Restated Bylaws provide for, indemnification of the
Company’s directors and officers against claims, liabilities
and amounts paid in settlement, and expense in a variety of
circumstances. Indemnification for liabilities arising under the
Securities Act of 1933, as amended (the “
Securities
Act
”), may be permitted
for directors, officers and controlling persons of the Company
pursuant to the foregoing or otherwise. However, the Company has
been advised that, in the opinion of the SEC, such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable.
Compensation Committee Interlocks and Insider
Participation
No
executive officers of the Company serve on the Compensation
Committee (or in a like capacity) for the Company or any other
entity.
-12-
Related Party Transactions
During
the year ended June 30, 2019, the Company continued to be a party
to a Service Agreement with FMI pursuant to which FMI provided
certain executive management services to the Company, including
designating Mr. Fields to perform the functions of President and
Chief Executive Officer for the Company. Mr. Fields, FMI’s
designated Executive, who also serves as the Company’s
Chairman of the Board of Directors, controls FMI. The Company had
payables of zero and $316,539 to FMI at June 30, 2019 and
2018 respectively, under the Service Agreement. In addition, during
the years ended June 30, 2019 and 2018, zero shares and
20,000 shares of Series B-1 Preferred Stock (“
Series B-1 Preferred
”) were paid
to FMI in satisfaction of an accrued bonus payable to Mr. Fields,
respectively.
Messrs.
Fields and Allen each beneficially own Series B-1
Preferred.
On
January 27, 2018, the Company’s Board of Directors approved
the redemption of 93,457 of the 305,859 issued and outstanding
shares of the Company’s Series B-1 Preferred (the
“
Redemption
Shares
”), and on February 6, 2018, the Company
delivered a notice to the holders of the Series B-1 Preferred
notifying the holders of the Company’s intent to redeem the
Redemption Shares, on a pro rata basis, on February 7, 2018 (the
“
Redemption
Date
”) (the “
Series B-1 Redemption
”). As a
result of the Series B-1 Redemption, the Company paid an aggregate
of $0 and $889,159 to Messrs. Fields and Allen, respectively, in
consideration for the redemption of 0 and 83,099 shares of Series
B-1 Preferred.
Policy and Procedures Governing Related Party
Transactions
The
Board is committed to upholding the highest legal and ethical
conduct in fulfilling its responsibilities and recognizes that
related party transactions can present a heightened risk of
potential or actual conflicts of interest.
The
SEC rules define a related party transaction to include any
transaction, arrangement or relationship which: (i) we are a
participant; (ii) the amount involved exceeds $120,000; and (iii)
executive officer, director or director nominee, or any person who
is known to be the beneficial owner of more than 5% of our Common
Stock, or any person who is an immediate family member of an
executive officer, director or director nominee or beneficial owner
of more than 5% of our Common Stock had or will have a direct or
indirect material interest.
Although
we do not maintain a formal written procedure for the review and
approval of transactions with such related persons, it is our
policy for the disinterested members of our Board to review all
related party transactions on a case-by-case basis. To receive
approval, a related-party transaction must have a legitimate
business purpose for us and be on terms that are fair and
reasonable to us and our stockholders and as favorable to us and
our stockholders as would be available from non-related entities in
comparable transactions.
All
related party transactions must be disclosed in our applicable
filings with the SEC as required under SEC rules.
Section 16 Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Act requires our
officers, directors and persons who beneficially own more than ten
percent of our Common Stock (collectively,
“
Reporting
Persons
”) to file reports
of ownership on Form 3 and changes in ownership on Form 4 or Form 5
with the SEC. The Reporting Persons are also required by SEC
rules to furnish us with copies of all reports that they file
pursuant to Section 16(a).
Based
solely on review of these forms that were furnished to us, we
believe that all reports required to be filed by these individuals
and persons under Section 16(a) were filed during the fiscal year
ended June 30, 2019 and that such filings were timely except for
one late Form 4 filing for Mr. Allen related to the exercise of a
warrant and acquisition of Common Stock.
-13-
|
PROPOSAL NO. 2
:
|
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
|
General
We are providing our stockholders with the
opportunity to approve, on an advisory, non-binding basis, the
compensation of our Named Executive Officers as disclosed in this
Proxy Statement in accordance with the Securities and Exchange
Commission's rules. Say-on-Pay is required by the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010 (the
“
Dodd-Frank
Act
”), which added
Section 14A to the Securities Exchange Act of 1934, as amended
(“
Exchange
Act
”). Section 14A
of the Exchange Act also requires that stockholders have the
opportunity to cast an advisory vote with respect to whether future
executive compensation advisory votes will be held every one, two
or three years. The Board has determined to hold advisory votes
regarding executive compensation every three
years.
Our
executive compensation programs are designed to attract, motivate,
and retain our executive officers, who are critical to our success.
Under these programs, our Named Executive Officers are rewarded for
the achievement of our near- and longer-term financial and
strategic goals, and for driving corporate financial performance
and stability. The programs contain elements of cash and
equity-based compensation and are designed to align the interests
of our executives with those of our stockholders.
As
an advisory vote, Say-on-Pay is not binding. The outcome of this
advisory vote does not overrule any decision by the Company or the
Board (or any committee thereof), create or imply any change to the
fiduciary duties of the Company or the Board (or any committee
thereof), or create or imply any additional fiduciary duties for
the Company or the Board (or any committee thereof). However, the
Compensation Committee, management and the Board value the opinions
expressed by stockholders in their vote on this Proposal and will
consider the outcome of the vote when making future compensation
decisions for Named Executive Officers.
OUR BOARD RECOMMENDS THAT YOU VOTE
“
FOR
” THE FOLLOWING ADVISORY
RESOLUTION:
RESOLVED
, that the compensation paid to the Company's
Named Executive Officers, as disclosed pursuant to the compensation
disclosure rules of the Securities and Exchange Commission,
including the disclosure under “Executive
Compensation”, the compensation tables and accompanying
narrative disclosure, and any related material disclosed in this
Proxy Statement, is hereby approved.
Required Vote and Recommendation
Under
Nevada law, the number of votes FOR must exceed the number of votes
AGAINST to approve this non-binding matter. Abstentions and broker
non-votes will no effect on the outcome of this
Proposal.
The Board recommends that stockholders vote
“
FOR
” the advisory resolution above, approving
of the compensation paid to the Company’s Named Executive
Officers.
-14-
|
PROPOSAL NO. 3
:
|
ADVISORY
VOTE ON THE FREQUENCY OF FUTURE EXECUTIVE COMPENSATION ADVISORY
VOTES
|
General
In
Proposal 3, we are providing our stockholders the opportunity to
vote to approve, on an advisory, non-binding basis, the
compensation of our Named Executive Officers. In consideration of
Say-on-Frequency, we are asking our stockholders to cast a
non-binding advisory vote regarding the frequency of future
executive compensation advisory votes. Stockholders may vote for a
frequency of every one, two, or three years, or may
abstain.
The
Board will take into consideration the outcome of this vote in
making the determination about the frequency of future executive
compensation advisory votes. However, because Say-on-Frequency is
advisory and non-binding, the Board may decide that it is in the
best interests of our stockholders and the Company to hold the
advisory vote to approve executive compensation more or less
frequently, but no less frequently than once every three years, as
required by the Dodd-Frank Act. In the future, we will propose an
advisory vote on the frequency of the executive compensation
advisory vote at least once every six calendar years as required by
the Dodd-Frank Act.
After
careful consideration, the Board believes that an executive
compensation advisory vote should be held every three years, and
therefore our Board recommends that you vote in favor of every
THREE YEARS for future executive compensation advisory votes. The
proxy card provides stockholders with the opportunity to choose
among four options (holding the vote once every year, every two
years or every three years, or abstaining) and, therefore,
stockholders will not be voting to approve or disapprove the
recommendation of the Board.
Vote Required and Recommendation
On this
non-binding matter, a stockholder may vote to set the frequency of
the "say on pay" vote to occur every year, every two years, or
every three years, or the stockholder may vote to abstain. The
choice among those four choices that receives the highest number of
votes will be deemed the choice of the stockholders.
The
Board recommends that you vote to hold advisory votes on executive
compensation “
EVERY
THREE YEARS
”.
-15-
|
PROPOSAL NO. 4
:
|
RATIFICATION OF THE APPOINTMENT
OF
HAYNIE
& COMPANY TO SERVE AS OUR
REGISTERED PUBLIC ACCOUNTING
FIRM FOR THE CURRENT FISCAL YEAR
|
General
Upon recommendation of the Audit Committee, the
Board appointed Haynie & Company (“
Haynie
”) as our independent registered public
accounting firm for the current fiscal year and hereby recommends
that the stockholders ratify such appointment.
The Board may terminate the appointment of Haynie
as the Company’s independent registered public accounting
firm without the approval of the Company’s stockholders
whenever the Board deems such termination necessary or
appropriate.
Representatives
of Haynie will be present at the Annual Meeting or available by
telephone and will have an opportunity to make a statement if they
so desire and to respond to appropriate questions from
stockholders.
|
|
2019
|
2018
|
|
|
|
|
|
Audit
Fees
|
$
162,000
|
$
163,900
|
|
Audit-Related
Fees
|
|
|
|
Tax
Fees
|
$
22,850
|
$
24,300
|
|
All
Other Fees
|
|
|
|
Total
|
$
184,850
|
$
188,200
|
Audit Fees
Audit
fees in 2019 and 2018 relate to services rendered in connection
with the audit of the Company’s consolidated financial
statements.
Tax Fees
Tax
fees in 2019 and 2018 include fees for services with respect to tax
compliance, tax advice and tax planning.
Audit Committee Pre-Approval Policies
The
Audit Committee has established its pre-approval policies and
procedures, pursuant to which the Audit Committee approved the
foregoing audit and permissible non-audit services provided by
Haynie in fiscal 2019 and 2018. Such procedures govern the ways in
which the Audit Committee pre-approves audit and various categories
of non-audit services that the auditor provides to the
Company. Services which have not received pre-approval must
receive specific approval of the Audit Committee. The Audit
Committee is to be informed of each such engagement in a timely
manner, and such procedures do not include delegation of the Audit
Committee’s responsibilities to management.
Required Vote and Recommendation
Ratification
of the selection of Haynie as the Company’s independent
auditors for the fiscal year ending June 30, 2020 requires the
affirmative vote of a majority of the shares present or represented
by proxy and entitled to vote at the Annual Meeting. Under Nevada
law and our Charter and our Bylaws, each broker non-vote will
reduce the absolute number, but not the percentage, of affirmative
votes necessary for approval of the ratification. Unless otherwise
instructed on the proxy or unless authority to vote is withheld,
shares represented by executed proxies will be voted
“FOR” the ratification of Haynie & Company as the
Company’s independent auditors for the fiscal year ending
June 30, 2020.
The Board recommends that stockholders vote
“
FOR
” the ratification of Haynie & Company
as the Company’s independent auditors for the fiscal year
ending June 30, 2020.
-16-
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has reviewed and discussed
with management and Haynie, our independent registered public
accounting firm, the audited consolidated financial statements in
the Company’s Annual Report on Form 10-K for the year ended
June 30, 2019, as filed with the SEC on September 12, 2019. The
Audit Committee has also discussed with Haynie those matters
required to be discussed by Public Company Accounting Oversight
Board (“
PCAOB
”) Auditing Standard No.
16.
Haynie
has also provided the Audit Committee with the written disclosures
and the letter required by the applicable requirements of the PCAOB
regarding the independent auditor’s communication with the
Audit Committee concerning independence. The Audit Committee has
discussed with the registered public accounting firm their
independence from our Company.
Based
on its discussions with management and the registered public
accounting firm, and its review of the representations and
information provided by management and the registered public
accounting firm, including as set forth above, the Audit Committee
recommended to our Board that the audited financial statements be
included in our Annual Report on Form 10-K for the year ended June
30, 2019.
|
October 11, 2019
|
Respectfully Submitted,
MEMBERS OF THE AUDIT COMMITTEE
Ronald C. Hodge,
Chairman
Robert W. Allen
Peter J. Larkin
|
The information reflected above will not be deemed
to be soliciting material or to be filed with the SEC, nor will
such information be incorporated by reference into any future
filing under the Securities Act or the Exchange Act, except to the
extent that we specifically incorporate it by reference into such
filing.
-17-
BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND
MANAGEMENT
AND RELATED STOCKHOLDER
MATTERS
The
following tables set forth information regarding shares of our
Series B Preferred and Common Stock beneficially owned as of
September 18, 2019 by:
|
(i)
|
each of our officers and directors;
|
|
(ii)
|
all officers and directors as a group; and
|
|
(iii)
|
each person known by us to beneficially own five percent or more of
the outstanding shares of our Series B Preferred and Common
Stock. Percent ownership is calculated based on 625,375 shares
of our Series B Preferred 19,821,188 shares of Common Stock
outstanding at September 18, 2019.
|
Beneficial Ownership of our Series B Preferred
|
Name
|
Series B
Preferred Stock
|
% Ownership
of Class
|
|
Robert
W. Allen
|
79,493
|
13
%
|
|
Riverview Financial Corp.
(1)
|
531,432
(2)
|
85
%
|
|
Julie Fields
(1)
|
14,450
(3)
|
2
%
|
|
(1)
|
Mr. Fields is the beneficial owner of Riverview Financial Corp. and
the spouse of Mrs. Fields.
|
|
|
|
|
(2)
|
Includes 531,432 shares of Series B Preferred.
|
|
|
|
|
(3)
|
Includes 14,450 shares of Series B Preferred.
|
Beneficial Ownership of our Common Stock
|
Name
|
Common Stock
|
Common Stock Warrants Exercisable
|
Total Stock and Stock Based Holdings
(1)
|
%
Ownership of Class
|
|
Randall K. Fields
, Chairman, President, Chief
Executive Officer and Director Nominee
|
5,887,879
(2)
|
957,480
(3)
|
6,845,359
|
33
%
|
|
John R. Merrill
, Chief Financial
Officer
|
3,401
(11)
|
-
|
3,401
|
*
%
|
|
Todd Mitchell,
Former Chief Financial
Officer
|
46,933
(4)
|
-
|
46,933
|
*
%
|
|
Edward L. Clissold
, General Counsel and
Corporate Secretary
|
66,751
|
-
|
66,751
|
*
%
|
|
Robert W. Allen,
Director
Nominee
|
784,378
(5)
|
134,709
(6)(8)
|
919,087
|
4
%
|
|
Ronald C. Hodge,
Director
Nominee
|
505,494
|
7,912
(9)
|
513,406
|
3
%
|
|
|
|
|
|
|
|
William S. Kies, Jr.,
Director
Nominee
|
56,449
|
660
(7)
|
57,109
|
*
%
|
|
Austin F. Noll,
Jr.,
Former
Director
|
97,360
|
1,846
(10)
|
98,553
|
*
%
|
|
Peter J. Larkin,
Director
Nominee
|
-
(12)
|
-
|
-
|
*
%
|
|
Officers and Directors, as a group (9 persons)
|
7,448,645
|
1,102,607
|
8,550,599
|
41
%
|
|
5% Stockholder(s)
|
|
|
|
|
|
Handelsbanken
Fonder AB
|
1,153,641
|
-
|
1,153,641
|
6
%
|
*Less
than 1%
|
(1)
|
For purposes of this table “beneficial ownership” is
determined in accordance with Rule 13d-3 of the Exchange Act,
pursuant to which a person or group of persons is deemed to have
“beneficial ownership” of any shares that such person
or group has the right to acquire within 60 days after September
18, 2019. For purposes of computing the percentage of outstanding
common shares held by each person or group of persons named above,
any shares that such person or group has the right to acquire
within 60 days after September 18, 2019, are deemed outstanding but
are not deemed to be outstanding for purposes of computing the
percentage ownership of any other person or group.
|
|
|
|
|
(2)
|
Includes
3,708,289
shares of
Common Stock held in the name of Randall K Fields., 1,289,230
shares of Common Stock held in the name of FMI, of which Mr. Fields
is the beneficial owner; 654,693 shares of Common Stock held in the
name of Riverview Financial Corp., of which Mr. Fields is the
beneficial owner; 205,000 shares of Common Stock held in the name
Charitable 2010, LLC, of which Mr. Fields is the beneficial owner;
and 30,667 shares of Common Stock held by Mr. Fields’ spouse,
Julie Fields.
|
-18-
|
(3)
|
Includes warrants for 914,065 and 40,250 shares of Common Stock,
which are exercisable at $4.00 per share and expire on February 5,
2020, and which are held by Riverview Financial Corp and Julie
Fields, respectively. Mr. Fields is the beneficial owner of
Riverview Financial Corp and the spouse of Julie Fields. Includes
warrants for 3,165 shares of Common Stock, which are exercisable
for $10.00 per share and expire on January 26, 2020.
|
|
|
|
|
(4)
|
Includes
7,325
shares of Common Stock
which vested on September 28, 2018.
|
|
|
|
|
(5)
|
Includes 128,933 shares of Common Stock held in trust, in which Mr.
Allen is the trustee.
|
|
(6)
|
Includes warrants for 130,753 shares of Common Stock, which are
exercisable for $4.00 per share and which expire on February 5,
2020. Includes warrants for 3,956 shares of Common Stock, which are
exercisable for $10.00 per share and which expire on January 26,
2020.
|
|
|
|
|
(7)
|
Includes warrants for 660 shares of Common Stock, which are
exercisable for $10.00 per share and which expire on January 26,
2020.
|
|
(8)
|
Includes warrants for 1,846 shares of Common Stock, which are
exercisable for $10.00 per share and which expire on January 26,
2020.
|
|
(9)
|
Includes warrants for 7,912 shares of Common Stock, which are
exercisable for $10.00 per share and which expire on January 26,
2020.
|
|
(10)
|
Includes warrants for 1,846 shares of Common Stock, which are
exercisable for $10.00 per share and which expire on January 26,
2020.
|
(11)
Includes 3,401 shares of Common Stock which vested on June 1, 2019.
The remaining 30,004 shares vest ratably over three
years.
(12)
Includes zero shares of Common Stock which vested as of September
12, 2019. The remaining 24,752 shares of Common Stock will vest
ratably over five years.
-19-
ADDITIONAL INFORMATION
Deadline
for Receipt of Stockholder Proposals
Pursuant
to Rule 14a-8 under the Exchange Act, stockholder proposals to
be presented at our 2020 Annual Meeting of Stockholders and
included in our Proxy Statement and form of proxy relating to that
Annual Meeting must be received by us at our corporate offices at
5282 South Commerce Drive, Suite D292, Murray, Utah 84107,
addressed to our Corporate Secretary, not later than 90 days nor
more than 120 days prior to the first anniversary of the preceding
year’s Annual Meeting. These proposals must comply with
applicable Nevada law, the rules and regulations promulgated by
the SEC and the procedures set forth in our Amended and
Restated Bylaws.
We
reserve the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not
comply with these and all other applicable
requirements.
Pursuant
to our Amended and Restated Bylaws, stockholders who wish to submit
nominees for election to the Board at our Annual Meeting and
inclusion in our Proxy Statement and form of proxy must submit such
nomination in writing to our Nominating and Corporate Governance
Committee at our principal executive officers. Such writing must
include information about the proposed candidate as set forth in
Items 7-8 of Rule 14-a under the Exchange Act, and the Board may
request further information from the proposed nominee and the
stockholder making the recommendation.
Stockholder Communications with the Board
Our
Board provides stockholders with the ability to send communications
directly to the Board at Park City Group, Inc., Board of Directors
c/o Corporate Secretary, 5282 South Commerce Drive, Suite
D292, Murray, Utah, 84107. All communications received by the
Corporate Secretary are relayed to the Board of Directors of the
Company.
Householding of Proxy Materials
The
SEC has adopted rules that permit companies and intermediaries
(e.g., brokers) to satisfy the delivery requirements for proxy
statements and annual reports with respect to two or more
stockholders sharing the same address by delivering a single proxy
statement and annual report addressed to those stockholders. This
process, which is commonly referred to as
“householding,” potentially means extra convenience for
stockholders and cost savings for companies.
A
number of brokers with account holders who are stockholders of the
Company will be “householding” the Company’s
proxy materials. A single set of the Company’s proxy
materials will be delivered to multiple stockholders sharing an
address unless contrary instructions have been received from the
affected stockholders. Once you have received notice from your
broker that they will be “householding” communications
to your address, “householding” will continue until you
are notified otherwise or until you revoke your consent. If, at any
time, you no longer wish to participate in
“householding” and would prefer to receive a separate
set of the Company’s proxy materials, please notify your
broker or direct a written request to the Corporate Secretary at
5282 South Commerce Drive, Suite D292, Murray, Utah 84107 or by
calling (435) 645-2000. The Company undertakes to deliver promptly,
upon any such oral or written request, a separate copy of its proxy
materials to a stockholder at a shared address to which a single
copy of these documents was delivered. Stockholders who currently
receive multiple copies of the Company’s proxy materials at
their address and would like to request “householding”
of their communications should contact their broker, bank or other
nominee, or contact the Company at the above address or phone
number.
Other Matters
At
the date of this Proxy Statement, the Company knows of no other
matters, other than those described above, that will be presented
for consideration at the Annual Meeting. If any other business
should come before the Annual Meeting, it is intended that the
proxy holders will vote all proxies using their best judgment in
the interest of the Company and the stockholders.
The proxy materials were mailed to stockholders on or about October
15, 2019, contains instructions on how to access this Proxy
Statement and the Annual Report on Form 10-K for our fiscal year
ended June 30, 2019. The Annual Report, which includes audited
financial statements, does not form any part of the material for
the solicitation of proxies.
REGARDLESS
OF WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
READ THE ACCOMPANYING PROXY STATEMENT AND THEN VOTE BY INTERNET,
TELEPHONE OR E-MAIL AS PROMPTLY AS POSSIBLE. VOTING PROMPTLY WILL
SAVE US ADDITIONAL EXPENSE IN SOLICITING PROXIES AND WILL ENSURE
THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL
MEETING.
-20-
|
PARK CITY GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
2019
ANNUAL MEETING OF STOCKHOLDERS – NOVEMBER 11, 2019 AT 9:00
A.M. MST
|
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CONTROL ID:
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REQUEST ID:
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|||||
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||||||
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The undersigned revokes all previous proxies and
constitutes and appoints Randall K. Fields and Edward L. Clissold,
and each of them, the true and lawful agent and proxy with full
power of substitution in each, to represent and to vote on behalf
of the undersigned all of the shares of Park City Group, Inc. (the
“
Company
”) which the undersigned is entitled to vote
at the Company’s 2019 Annual Meeting of Stockholders (the
“
Annual
Meeting
”), to be held at
the Company’s corporate offices located at 5282 South
Commerce Drive, Suite D292, Murray, Utah on November 11, 2019 at
9:00 A.M. MST, and at any adjournment(s) or postponement(s)
thereof, on the following Proposals at the Annual Meeting, each of
which are more fully described in the Proxy Statement for the
Annual Meeting (receipt of which is hereby
acknowledged).
|
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(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
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VOTING INSTRUCTIONS
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||||||
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If you vote by phone, fax or internet, please DO NOT mail your
proxy card.
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MAIL:
|
Please
mark, sign, date, and return this Proxy Card promptly using the
enclosed envelope.
|
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|
FAX:
|
Complete the reverse portion of this Proxy Card
and Fax to
(202)
521-3464.
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INTERNET:
|
www.iproxydirect.com/PCYG
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PHONE:
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(866) 752-VOTE(8683)
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2019 ANNUAL MEETING OF THE STOCKHOLDERS OFPARK CITY GROUP,
INC.
|
PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE:
☒
|
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|||||||||||
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Proposal No. 1
|
|
FOR ALL
|
|
WITHHOLD
ALL
|
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FOR ALL
EXCEPT
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|||||
|
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Election
of Directors, each for a term of one year:
|
|
☐
|
|
☐
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||||
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Randall
K. Fields
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☐
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||||
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Robert
W. Allen
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☐
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CONTROL ID:
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||||
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Ronald
C. Hodge
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☐
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REQUEST ID:
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||||
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William
S. Kies, Jr.
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☐
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||||
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Peter
J. Larkin
|
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☐
|
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||||
|
Proposal No. 2
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|||||
|
|
Approval, on an advisory basis, the compensation
paid to our named executive officers as disclosed in this proxy
statement (“
Say-on-Pay
”).
|
|
☐
|
|
☐
|
|
☐
|
|
|
|
||||
|
Proposal No. 3
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
|
|
|||||
|
|
A
pproval, on an
advisory basis, of the frequency of future Say-on-Pay votes
(“
Say-on-Frequency
”).
|
|
☐
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Proposal No. 4
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FOR
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AGAINST
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ABSTAIN
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Ratification of
Haynie & Company as our independent registered public
accounting firm for the fiscal year ending June 30,
2020.
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Proposal No. 5
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FOR
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AGAINST
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ABSTAIN
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To transact other
business that may properly come before the Annual Meeting or any
adjournments or postponements thereof.
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☐
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MARK “X” HERE IF YOU PLAN TO ATTEND THE MEETING:
☐
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THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR EACH DIRECTOR NOMINEE IDENTIFIED
IN PROPOSAL NO. 1 AND FOR PROPOSALS NO. 2, 3, 4 AND 5, EACH OF
WHICH HAVE BEEN PROPOSED BY OUR BOARD, AND IN THE DISCRETION OF THE
PROXY HOLDER UPON OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
ANNUAL MEETING.
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MARK HERE FOR ADDRESS CHANGE
☐
New Address (if applicable):
____________________________________________________________________________________
IMPORTANT:
Please sign exactly as your name(s) appear on this
Proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian,
please give full title as such. If the signer is a corporation,
please sign full corporate name by a duly authorized officer,
giving full title as such. If signer is a partnership, please sign
in partnership name by the authorized person.
Dated:
________________________, 2019
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(Print
Name of Stockholder and/or Joint Tenant)
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(Signature
of Stockholders)
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(Second
Signature if held jointly)
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TABLE OF CONTENTS