Proxy Statement (definitive) (def 14a)

Date : 10/27/2017 @ 4:02PM
Source : Edgar (US Regulatory)
Stock : Paramount Gold Nevada Corp. (PZG)
Quote : 1.51  -0.02 (-1.31%) @ 6:00PM

Proxy Statement (definitive) (def 14a)

 

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

Filed by a Party other than the Registrant

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

PARAMOUNT GOLD NEVADA CORP.

(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):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

1)

Title of each class of securities to which transaction applies:

 

 

2)

Aggregate number of securities to which transaction applies:

 

 

3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

4)

Proposed maximum aggregate value of transaction:

 

 

5)

Total fee paid:

 

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

1)

Amount Previously Paid:

 

 

2)

Form, Schedule or Registration Statement No.:

 

 

3)

Filing Party:

 

 

4)

Date Filed:

 

 

 

 


 

October 27, 2017

Dear Stockholder of Paramount Gold Nevada Corp.:

I am pleased to invite you to attend the 2017 Annual Meeting of Stockholders of Paramount Gold Nevada Corp., to be held at the Paramount Gold Nevada Corp. Oregon Office, 220 Morton Street East, Vale, Oregon, 97918 on December 13, 2017 at 11:00 AM Local time.

At the meeting, we will update you on the progress we are making at our projects, the Sleeper Gold Project and the Grassy Mountain Gold Project, and our outlook for the business in 2018.  Following that discussion and after addressing any questions you may have, we will cover the business matters outlined in the accompanying Notice of Annual Meeting and Proxy Statement.

We are furnishing proxy materials to our stockholders over the Internet. You may read, print and download our 2017 Annual Report to Stockholders and our Proxy Statement at www.paramountnevada.com/PZGProxy.pdf. On October 30, 2017 , we mailed our stockholders a notice containing instructions on how to access these materials and how to vote their shares. The notice provides instructions on how you can request a paper copy of these materials by mail, by telephone or by email. If you requested your materials via email, the email contains voting instructions and links to the materials on the Internet.

You may vote your shares by regular mail or in person at the Annual Meeting. The Annual Meeting is being held so that stockholders may consider the election of directors, and the ratification of the appointment of MNP LLP as Paramount Gold Nevada Corp’s independent registered public accounting firm for the year ending June 30, 2018.

The Board of Directors of Paramount Gold Nevada Corp. has determined that the matters to be considered at the Annual Meeting are in the best interests of Paramount Gold Nevada Corp. and its stockholders. For the reasons set forth in the Proxy Statement, the Board of Directors unanimously recommends a vote “FOR” each matter to be considered.

On behalf of the Board of Directors and the officers and employees of Paramount Gold Nevada Corp., I would like to take this opportunity to thank our stockholders for the confidence you place in us through your investment. We look forward to seeing you at the meeting.

 

Sincerely,

 

/s/ Glen Van Treek

Glen Van Treek

President, CEO and Director

 

 

 

 


 

TABLE OF CONTENTS

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

2

 

 

PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS

3

 

 

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

6

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

7

 

 

MATTERS TO COME BEFORE THE ANNUAL MEETING

8

 

 

PROPOSAL No. 1: ELECTION OF DIRECTORS

8

 

 

PROPOSAL No. 2: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

11

 

 

 

 

BOARD MEETINGS AND COMMITTEES; ANNUAL MEETING ATTENDANCE

12

 

 

THE COMPENSATION COMMITTEE

13

 

 

THE AUDIT COMMITTEE

13

 

 

THE CORPORATE GOVERNANCE AND NOMINATING COMMITTEE

14

 

 

EXECUTIVE COMPENSATION

17

 

 

DIRECTOR COMPENSATION

19

 

 

CORPORATE GOVERNANCE

21

 

 

STOCKHOLDER PROPOSALS

21

 

 

DELIVERY OF DOCUMENTS TO STOCKHOLDERS SHARING AN ADDRESS

22

 

 

OTHER MATTERS

22

 

 

 

 


 

Paramount Gold Nevada Corp.

665 Anderson Street

Winnemucca, Nevada 89445

(775) 625-3600

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Notice is hereby given that the 2017 Annual Meeting of Stockholders of Paramount Gold Nevada Corp. (the “Company”) will be held at the Paramount Gold Nevada Corp. office at 220 Morton Street East, Vale, Oregon, 97918, at 11:00 a.m., local time, on Wednesday, December 13, 2017 for the following purposes:

 

1.

To elect as directors the seven nominees named in the Proxy Statement to serve for the ensuing year and until their respective successors are duly elected and qualified;

 

 

2.

To ratify the appointment of MNP LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2018; and

 

 

3.

To transact such other business as may properly come before the meeting or any adjournment thereof.

These proposals are more fully described in the Proxy Statement following this Notice.

The Board of Directors recommends that you vote (i) FOR the election of all seven nominees to serve as directors of the Company, and (ii) FOR the ratification of the appointment of MNP LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2018.

The Company is pleased, pursuant to the rules of the Securities and Exchange Commission (the “SEC”), to furnish proxy materials over the internet to our stockholders.  We believe these rules allow us to provide you with the information you need while lowering the costs of delivery and reducing the environmental impact of the Annual Meeting.

The Board of Directors has fixed the close of business on October 19, 2017 as the record date for the determination of the stockholders entitled to notice of, and to vote at, the Annual Meeting. Accordingly, only stockholders of record at the close of business on that date will be entitled to vote at the Annual Meeting. A list of the stockholders of record as of the close of business on October 19, 2017 will be available for inspection by any of our stockholders for any purpose germane to the Annual Meeting during normal business hours at our principal offices, 665 Anderson Street, Winnemucca, Nevada, 89445, beginning on the mail date, October 30, 2017 and at the Annual Meeting.

Stockholders are cordially invited to attend the Annual Meeting in person. Regardless of whether you plan to attend the Annual Meeting, please mark, date, sign and return the enclosed proxy to ensure that your shares are represented at the Annual Meeting. Stockholders of record at the close of business on the record date, whose shares are registered directly in their name, and not in the name of a broker or other nominee, may vote their shares in person at the Annual Meeting, even though they have sent in proxies.

 

By order of the Board of Directors,

 

/s/ Rudi Fronk

Rudi Fronk

Chairman of the Board of Directors

October 27, 2017

YOUR VOTE IS IMPORTANT

Please vote via the Internet or telephone.

Internet: www.proxyvote.com/

Phone: 1-800-690-6903

If you request a proxy card, please mark, sign and date the proxy card when received and
return it promptly in the self-addressed, stamped envelope we will provide.

 

2

 


 

Paramount Gold Nevada Corp.

665 Anderson Street

Winnemucca, Nevada 89445

(775) 625-3600

PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS

December 13, 2017

ABOUT THE MEETING

This proxy statement for Paramount Gold Nevada Corp. (“Paramount” or the “Company”) is furnished in connection with the solicitation by our Board of Directors of proxies of stockholders for shares to be voted at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held at the Paramount Gold Nevada Corp. office at 220 Morton Street East, Vale, Oregon, 97918, at 11:00 a.m., local time, on Wednesday, December 13, 2017 , and any and all adjournments or postponements thereof.  This proxy statement and the accompanying proxy are first being made available to our stockholders on or about October 30, 2017.

Important Notice Regarding the Internet Availability of Proxy Material – Our Proxy Statement and Annual Report to Stockholders are available at www.paramountnevada.com/PZGProxy.pdf.

What is the date, time and place of the Annual Meeting?

Paramount Gold Nevada Corp.’s 2017 Annual Stockholders Meeting will be held on Wednesday , December 13 , 2017, beginning at 11:00 a.m., local time , at the Paramount Gold Nevada Corp. office at 220 Morton Street East, Vale, Oregon, 97918.

What is the purpose of the Annual Meeting?

At the Annual Meeting, stockholders will act upon the matters outlined in the Notice of Annual Meeting of Stockholders on the cover page of this proxy statement, consisting of (1) election of directors; (2) ratification of the selection of MNP LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2018; and (3) any other matters that properly come before the Annual Meeting.

Who is entitled to vote at the Annual Meeting?

Only our stockholders of record at the close of business on October 19 , 2017, the Record Date for the Annual Meeting, are entitled to receive notice of and to participate in the annual meeting. If you were a stockholder of record on that date, you will be entitled to vote all of the shares you held on that date at the meeting, or any postponement(s) or adjournment(s) of the Annual Meeting. As of the Record Date, there were 23,074,954 shares of common stock outstanding, all of which are entitled to be voted at the Annual Meeting.

A list of stockholders will be available at our headquarters at 665 Anderson Street , Winnemucca , Nevada 89445, as of the mail date, October 30, 2017 through to the Annual Meeting and at the Annual Meeting itself for examination by any stockholder.

Why am I receiving these materials?

You are receiving these materials because, as of October 19, 2017, the Record Date for the Annual Meeting, you owned shares of Paramount common stock.  Paramount has made these materials available to you on the Internet or has delivered printed versions of these materials to you by mail, in connection with the Company’s Board of Directors’ solicitation of proxies for use at the annual meeting of stockholders to be held on Wednesday, December 13, 2017 at 11:00 a.m. local time.  These proxy materials give you information to determine how to vote in connection with the Annual Meeting.

What proposals will be voted on at the Annual Meeting?

Stockholders will vote on two proposals at the Annual Meeting:

 

The election to the Board of the seven nominees named in this proxy statement (Proposal No. 1); and

 

Ratification of  appointment of MNP LLP as Paramount’s independent registered public accounting firm for the fiscal year ending June 30, 2018 (Proposal No. 2).

3


 

What are the Board of Directors’ voting recommendations?

The Board recommends that you vote your shares:

 

“FOR” each of the nominees to the Board (Proposal No. 1); and

 

“FOR” ratification of  appointment of MNP LLP as Paramount’s independent registered public accounting firm for the fiscal year ending June 30, 2018 (Proposal No. 2);

Where is Paramount’s head office? And what is Paramount’s main telephone number?

Our head office is located at 665 Anderson Street, Winnemucca, Nevada, 89445 . Our telephone number is (775) 625-3600.

Why did I receive a one-page notice in the mail regarding the Internet availability of proxy material instead of a full set of proxy materials?

Pursuant to rules adopted by the SEC, the Company has elected to provide access to its proxy materials via the Internet. Accordingly, the Company is sending a Notice of Internet Availability of Proxy Materials (“Notice”) to the Company’s stockholders. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. The Company encourages stockholders to take advantage of the availability of the proxy materials on the Internet to expedite the stockholders’ receipt of proxy material, help lower the cost of the Annual Meeting and reduce the environmental impact of its annual meetings.

However, if a stockholder would prefer to receive printed proxy materials, the stockholder may follow the instructions included in the Notice.

How can I get electronic access to the proxy material?

The Notice will provide you with instructions regarding how to access the proxy materials on the Internet for the Annual Meeting.  Also, the Notice will indicate how to instruct Paramount to send future proxy materials to you by email.   Choosing to receive your future proxy materials by email will save us the cost of printing and mailing documents to you and will reduce the impact of our Annual Meeting of stockholders on the environment. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it. The Annual Report on Form 10-K accompanies the proxy materials but is not considered part of the proxy soliciting materials.

You can also access proxy materials on the Company’s website at www.paramountnevada.com/pzgproxy.pdf

Who is entitled to vote at the Annual Meeting?

For each matter, stockholders have one vote for each share of Company common stock held by such stockholder as of the Record Date (defined in the next sentence). Only stockholders of record as of the close of business on October 19, 2017 (the “Record Date”) are entitled to receive notice of, to attend and to vote at the Meeting.  As of the Record Date, there were 23,074,954 shares of Paramount’s common stock issued and outstanding.

How do I vote my shares if I am a shareholder of record?

There are four ways to vote:

 

In person .  If you are a stockholder of record, you may vote in person at the Annual Meeting.  The Company will give you a ballot when you arrive.

 

Via the Internet .  You may vote by proxy via the Internet by following the instructions provided on the ballot.

 

By Telephone .  With your proxy card in hand, you may vote by proxy by calling the toll free number found on the ballot.

 

By Mail .  You may vote by proxy by filling out the proxy card and sending it back in the envelope provided.

4


 

How do I vote my shares if I am a benefi cial owner of shares held in street name as of the Record Date?

There are four ways to vote:

 

In person .  If you are a beneficial owner of stock held in street name and you wish to vote in person at the Meeting, you must obtain a legal proxy from the organization that holds your shares.  Please contact that organization for instructions regarding obtaining a legal proxy.

 

Via the Internet .  You may vote by proxy via the Internet by visiting www.proxyvote.com and entering the control number found on the ballot.

 

By Telephone .  With your proxy card in hand, you may vote by proxy by calling the toll free number found on the ballot.

 

By Mail .  You may vote by proxy by filling out the proxy card and sending it back in the envelope provided.

What is the quorum requirement for the Annual Meeting?

One-third of the votes entitled to be cast on the matter by a voting group, represented in person or by proxy, constitutes a quorum of that voting group for the action on the matter, and abstentions and broker non-votes will be counted as present for purposes of establishing a quorum. Your shares will be counted for purposes of determining if there is a quorum, whether representing votes for, against or abstained, if you:

 

Are present and vote in person at the Annual Meeting; or

 

Have voted on the Internet, by telephone or by properly submitting a proxy card or vote instruction form by mail.

If a quorum is not present, the Annual Meeting will be adjourned until a quorum is obtained.

How are proxies voted?

All stock represented by valid proxies received prior to the Annual Meeting will be voted and, where a stockholder specifies by means of the proxy a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the stockholders instructions.

How are votes counted?

Votes will be counted by the inspector of election appointed at the Annual Meeting, who will separately count “FOR” and “AGAINST” votes, abstentions and broker non-votes. A “broker non-vote” occurs when a nominee holding stock for a beneficial owner does not receive instructions with respect to the proposals from the beneficial owner.

What happens if I do not give specific voting instructions?

If you are a stockholder of record and you either indicate when voting on the Internet or by telephone that you wish to vote as recommended by the Board or sign and return a proxy card without giving specific voting instructions then the proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this proxy statement and with respect to any other matters properly presented for a vote at the Annual Meeting as the proxy holders may determine in their discretion.

Brokers and other nominees who hold common stock in street name and do not receive instructions from their clients on how to vote on a particular proposal are not permitted to vote on these proposals. The absence of votes from brokers is referred to as broker non-votes.  Abstentions and broker non-votes will be counted as present for purposes of establishing a quorum.

Can I revoke my proxy?

If you give a proxy, you may revoke it at any time before it is exercised. You may revoke your proxy in any one of three ways:

 

You may send in another proxy with a later date.

 

You may notify Paramount in writing (by you or your attorney authorized in writing, or if the stockholder is a corporation, under its corporate seal, by an officer or attorney of the corporation) at its corporate offices before the Annual Meeting, that you are revoking your proxy.

 

You may vote in person at the Annual Meeting.

5


 

What happens if I do not vote?

The presence, in person or by proxy, of one-third of the votes entitled to be cast on the matter by a voting group is necessary to constitute a quorum at the Annual Meeting. For purposes of determining whether the stockholders have approved matters other than the election of directors, abstentions are treated as shares present or represented and voting, so abstaining has the same effect as a negative vote. Shares held by brokers who do not receive voting instructions on any proposal are not permitted to vote.  They are counted as present for the purposes of determining the existence of a quorum at the Annual Meeting.

If my stock is held in “street name” by my broker, will my broker vote my stock for me?

If a stockholder’s shares are held of record by a broker, bank or other nominee and the stockholder wishes to vote in person at the Annual Meeting, the stockholder must contact his or her broker or bank and obtain from the record holder a “legal” proxy issued in the stockholder’s name.  Absent specific instructions from the beneficial owners of the shares, brokers who hold shares in “street name” for clients no longer have the authority to vote on proposals when they have not received instructions from beneficial owners. Proxies submitted without a vote by brokers on these matters are referred to as “broker non-votes.” Broker non-votes are counted for purposes of determining whether a quorum exists at the Annual Meeting.

Who bears the cost of soliciting proxies?

Paramount may require the use of a proxy solicitation firm. Paramount would bear the cost of soliciting proxies and will reimburse brokerage firms and others for expenses involved in forwarding proxy materials to beneficial owners or soliciting their execution. Paramount estimates, that if required, that the costs associated with solicitations of the proxies requested by this proxy statement would be approximately $15,000 plus out-of-pocket expenses.

In addition to soliciting proxies by mail, certain members of the Company’s directors, officers, and regular employees, without additional compensation, may solicit proxies personally or by telephone, facsimile or email on the Company’s behalf.

Where can I find more information about Paramount?

Paramount filed its 2017 annual report on Form 10-K with the SEC on September 18, 2017.  That report, together with other corporate filings are available for your review on the Internet by visiting the SEC’s website located at www.sec.gov . Copies of any reports, including exhibits, will be furnished to stockholders upon written request. All written requests should be directed to: Corporate Communications, Paramount Gold Nevada Corp.  665 Anderson Street, Winnemucca, Nevada, 89445, USA.

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which requires that Paramount file reports, proxy statements and other information with the SEC. The SEC maintains a website on the Internet that contains reports, proxy and information statements and other information regarding registrants, including Paramount, that file electronically with the SEC. The SEC’s website address is www.sec.gov. In addition, Paramount’s Exchange Act filings may be inspected and copied at the public reference facilities of the SEC located at 100 F Street, N.E., Washington, D.C. 20549. Copies of the material may also be obtained upon request and payment of the appropriate fee from the Public Reference Section of the SEC located at 100 F Street, N.E., Washington, D.C. 20549. Paramount’s filings with the applicable Canadian securities regulators are available on the System for Electronic Document Analysis and Retrieval (“SEDAR”), and may be viewed at the following website address: www.sedar.com.  

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than ten percent of our common stock (“Section 16 Insiders”) to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock.

To our knowledge based solely on a review of the copies of such reports furnished to us and the Section 16 Insiders’ representations to us, for the year ended June 30, 2017, our Section 16 Insiders complied with their respective filing requirements under Section 16(a) on a timely basis.

6


 

Security Ownership of Certain B eneficial Owners and Management

The following table shows information regarding the beneficial ownership of our common stock for the following:

 

Each shareholder known by us to beneficially own more than 5% of our common stock;

 

Each of our directors;

 

Each executive officer named in the Summary Compensation Table in “Executive Compensation;” and

 

All directors and executive officers as a group.

All information is as of the Record Date, except as noted otherwise.

 

 

 

 

 

 

Name of Beneficial Ownership (1)

 

Amount and Nature of Beneficial Ownership

 

Percent of Class

 

FCMI Parent Co.

 

4,596,310 (2)(3)(4)

 

19.71%

 

Seabridge Gold Inc.

 

1,904,963 (5)(6)

 

8.24%

 

Carlo Buffone

 

325,250 (7)

 

1.39%

 

Glen Van Treek

 

300,501 (8)

 

1.29%

 

Rudi Fronk

 

198,500 (9)

 

*

 

David Smith

 

89,400 (10)

 

*

 

Eliseo Gonzalez-Urien

 

58,000 (11)

 

*

 

Christopher Reynolds

 

81,500 (12)

 

*

 

John Carden

 

53,179 (13)

 

*

 

Pierre Pelletier

 

16,666 (14)

 

*

 

All directors and executive officers as a group (8 persons)

 

(7)-(14)

 

4.71%

 

 

*

Less than one percent (1%) of the outstanding shares on October 19, 2017 of 23,074,954

(1)

In accordance with Rule 13d-3(d)(1) under the Exchange Act the applicable percentage of ownership of each Shareholder is based on 23,074,954  Common  Stock outstanding as of October 19, 2017, plus any securities held by such Shareholder exercisable for or convertible into Common Shares within 60 days after the date of this Information Circular.

(2)

Based on the information set forth on Form 4 filed with the SEC on October 16, 2017 by FCMI Parent Co. (“FCMI”). The address of FCMI is, 181 Bay Street, Suite 250, Toronto, Ontario, Canada M3J 2T2.

(3)

FCMI exercises control and direction over 4,347,910 Common Shares (representing 18.84% of the outstanding Common Shares as of October 19, 2017 on an undiluted basis) and 248,400 Common Stock purchase warrants.  If the 248,400 warrants are exercised, FCMI exercises control and direction over 19.71% of the issued and outstanding Common Shares (after giving effect to the exercise of such warrants, but not the exercise of any other convertible securities of the Corporation).

(4)

FCMI Financial Corp is a wholly owned subsidiary of FCMI. Of the 4,596,310 shares beneficially owned, FCMI Financial Corp. owns 1,222,111 common shares and FCMI ownership consists of: (i) 3,125,699 shares held; and (ii) 248,400 common stock purchase warrants.

(5)

As reported to Paramount by Seabridge Gold Inc. (“Seabridge Gold”), Seabridge ownership consists of: (i) 1,853,363 shares held; and (ii) 51,600 common stock purchase warrants. The address of Seabridge Gold is 106 Front St. East, Toronto, Ontario, Canada, M5A 1E1.

(6)

Seabridge Gold exercises control and direction over 1,853,363 Common Shares (representing 8.03% of the outstanding Common Shares as of October 19, 2017 on an undiluted basis) and 51,600 Common Stock purchase warrants.  If the 51,600 warrants are exercised, Seabridge Gold exercises control and direction over 8.24% of the issued and outstanding Common Shares (after giving effect to the exercise of such warrants, but not the exercise of any other convertible securities of the Corporation).

(7)

Consists of: (i) 50,250 shares held; and (ii) 275,000 options which have vested and are exercisable as of September 30, 2017

(8)

Consists of: (i) 25,501 shares held; and (ii) 275,000 options which have vested and are exercisable as of September 30, 2017

(9)

Consists of 198,500 shares held.

(10)

Consists of: (i)14,400 shares held; and (ii) 75,000 options which have vested and are exercisable as of September 30, 2017

(11)

Consists of: (i) 8,000 shares held; and (ii) 50,000 options which have vested and are exercisable as of September 30, 2017

(12)

Consists of: (i) 31,500 shares held; and (ii) 50,000 options which have vested and are exercisable as of September 30, 2017

(13)

Consists of: (i) 3,179 shares held; and (ii) 50,000 options which have vested and are exercisable as of September 30, 2017

(14)

Consists of 16,666 options which have vested and are exercisable as of September 30, 2017


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MATTERS TO COME BEFOR E THE ANNUAL MEETING

PROPOSAL No. 1: ELECTION OF DIRECTORS

Nominees

At the Annual Meeting, seven directors will be elected to serve a one year term or until the next annual stockholders meeting or until such director's successor shall have been elected and qualified following such director’s earlier death, resignation or removal.

Our Board has nominated Rudi Fronk, David Smith, Glen Van Treek, Christopher Reynolds, Eliseo Gonzalez-Urien, John Carden and Pierre Pelletier. All nominees are currently members of the Board.  

Each nominee has expressed his willingness to serve as a director if elected, and we know of no reason why any nominee would be unable to serve. If a nominee becomes unavailable before the election, the proxies may be voted for one or more substitute nominees designated by the Board, or the Board may decide to reduce the number of directors.

 

Name

 

Age(1)

 

Position

Rudi Fronk

 

58

 

Chairman of the Board

Glen Van Treek

 

52

 

President, CEO and Director

David Smith

 

59

 

Director

Christopher Reynolds

 

53

 

Director

Eliseo Gonzalez-Urien

 

76

 

Director

John Carden

 

69

 

Director

Pierre Pelletier

 

48

 

Director

 

(1)

As of October 27, 2017

Set forth below is certain information with respect to each director nominee:

Rudi Fronk- Chairman

 

Mr. Fronk, a graduate of Columbia University from which he holds a Bachelor of Science in Mining Engineering and a Master of Science in Mineral Economics, has over 30 years of experience in the gold sector primarily as a senior officer and director of publically traded gold exploration/development companies.

 

Mr. Fronk was appointed to Paramount Gold Nevada Corp.’s Board of Directors in January 2017 and serves as the Board’s Non-Executive Chairman.  In 1999, Mr. Fronk co-founded Seabridge Gold Inc. (“Seabridge Gold”), a US$750 million market cap company with proven and probable gold reserves exceeding 45 million ounces and one of the world’s largest resource bases of gold and copper. He currently serves as Chairman and as the Seabridge Gold’s CEO, a position he has held since its inception. In addition to his extensive experience with Seabridge Gold, Mr. Fronk has held senior management positions with Greenstone Resources, Columbia Resources, Behre Dolbear & Company, Riverside Associates, Phibro-Salomon, Amax and DRX.

 

 

Glen Van Treek

Mr. Van Treek is the President and Chief Executive Officer and has been a director of Paramount Gold Nevada Corp. since February 2015. He was formerly the Chief Operating Officer and V.P. Exploration of Paramount Gold and Silver Corp and served in this role from January 2011 through the April 2015 merger with Coeur Mining, Inc. He has over 25 years of progressive global experience in all stages of mineral exploration. Prior to joining Paramount, for ten years he held various senior positions at Teck Resources Ltd. and most recently he managed the production geology, resource modeling and exploration programs at Teck’s Quebrada Blanca mine in Chile. Prior to his experience at Teck, Mr. Van Treek held positions with Placer Dome and other junior exploration companies. He is a graduate geologist from the University of Chile.

 

David Smith

Mr. Smith is a Corporate Director who has had a career on both the finance and the supply sides of the mining sector, with extensive international exposure. He brings more than 30 years of financial and executive leadership experience to the Board. Mr. Smith has been a director of Paramount Gold Nevada Corp. since June 2015 and served as Chairman of the Board from June 2015 through January 2017.

8


 

Mr. Smith served as the Chief Financial Officer and Executive Vice President of Finning International Inc. from 2009 to 2014. Pr ior to joining Finning, Mr. Smith served as Chief Financial Officer and a Vice President of Ballard Power Systems, Inc. from 2002 to 2009. Previously, he spent 16 years with Placer Dome Inc. in various senior positions and 4 years with PriceWaterhouseCoope rs. Mr. Smith currently is a director of Nevsun Resources Ltd, Dominion Diamond Corporation and Pretium Resources and is a member of the Board of Governors of Collingwood School.

Mr. Smith is a Certified Public Accountant, and holds a bachelor’s degree in business administration from California State University, Sacramento. He has also completed the Institute of Corporate Directors course, Directors Education Program (ICD.D).

Christopher Reynolds

Mr. Reynolds has over 25 years of mineral industry and public accounting experience and has been a director of Paramount Gold Nevada Corp. since February 2015 and a director of Paramount Gold and Silver Corp. from December 2009 through April 2015 when the merger with Coeur Mining, Inc. was completed. Since May 2011, he has been the Vice President Finance and Chief Financial Officer of Seabridge Gold Inc., a TSX and NYSE American listed corporation. From October 2007 to April 2011, he served as Vice President, Finance and Chief Financial Officer of Norsemont Mining Inc. and, prior to that, he served as Senior Vice President, CFO and Secretary of Southern Era Diamonds Inc. He has held various finance and accounting positions at Southern Platinum Corp., TVX Gold Inc., Inmet Mining Corporation and Price Waterhouse, now PricewaterhouseCoopers. Mr. Reynolds also served as a director of Arizona Star Resource Corp. Mr. Reynolds is a CPA, CGA and received a B.A. (Economics) from McGill University.

Eliseo Gonzalez-Urien

Mr. Gonzalez-Urien has been a director of Paramount Gold Nevada Corp. since February 2015 and a director of Paramount Gold and Silver Corp. from March 2009 through the merger with Coeur Mining, Inc. in April 2015. He also serves as a member of the board of directors of Seabridge Gold since January 2006 and as a consulting geologist for Seabridge Gold since March 2003.He is an exploration geologist with over 30 years of experience in the mining industry. From 1989 through 2001 Mr. Gonzalez-Urien held various executive positions with Placer Dome Inc. including senior vice president of the parent company and president of Placer Dome Exploration Inc. During this period he was charged with responsibility for Placer Dome’s worldwide exploration activities. Prior to Placer Dome, Mr. Gonzalez-Urien held senior positions with BHP-Utah Inc. and Noranda. He holds a degree in geology from the University of Santiago, Chile, followed by post graduate studies in geology at the University of California, Berkley.

John Carden, Ph.D

Dr. Carden has more than 35 years in experience in exploration management, teaching and research and has been a director of Paramount Gold Nevada Corp. since February 2015 and a director of Paramount Gold and Silver Corp. from September 2006 through the completion of the merger with Coeur Mining, Inc. in April 2015. Since 2001 he has been a geologic consultant and a director of a number of junior resource companies each which were TSX Venture Exchange listed companies. Dr. Carden worked as a senior exploration geologist for Exxon Minerals, Atlas Precious Metals, Tenneco, and Echo Bay Mines and later was Director of U.S. Exploration from 1992 until 1998 for Echo Bay Mines. From 2010 to the present, Dr. Carden has acted as a geologic consultant to Otis Gold Corp. He is a Licensed Professional Geologist in the State of Washington. Dr. Carden received his B.Sc. and M.Sc. in geology From Kent State University in Ohio, and his doctorate in geology from the Geophysical Institute at the University of Alaska in 1978.

 

Pierre Pelletier

 

Mr. Pelletier is an environmental engineer, with a Masters of Business Administration from Queens University and is a qualified person under National Instrument 43-101, and has been a director of Paramount Gold Nevada Corp. since September 2016. He has over 20 years of extensive international experience spanning the operational, technical and financial aspects of the environmental consulting industry managing complex environmental and social impact projects. From 2012 through to the end of 2016, he served as managing director of Environmental Resources Management Canada Ltd., a leading global provider of environmental, health, safety, risk, and social consulting services with an emphasis on the mining and oil and gas sectors. Prior to that, from 1998 through 2009, Mr. Pelletier served as a Project Manager for Rescan Environmental Services Ltd. (“Rescan”), managing project and technical development. In 2010, he became President and Chief Operating Officer for Rescan and remained in this role through 2012.

 

9


 

Required Vote

Regarding the election of directors, if a quorum is present, a majority of the votes properly cast for election of directors is sufficient to elect directors. Votes to withhold authority are considered properly cast; broker non-votes are not treated as votes cast. As a result, banks and brokers will not be able to vote on the election of directors without instructions from the beneficial owners. We encourage all stockholders who hold shares through a bank, broker or other holder of record to provide voting instructions to such parties to ensure that their shares are voted at the Annual Meeting.

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD OF DIRECTORS UNANIMOUSLY

RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH NOMINEE UNDER PROPOSAL No. 1.


10


 

PROPOSAL No. 2: RATIFICATION OF INDEPEN DENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board has selected the firm of MNP LLP as Paramount’s independent registered public accounting firm for the fiscal year ending June 30, 2018 and is submitting this selection for ratification by our stockholders at the Annual Meeting. In the event that our stockholders do not ratify the selection of MNP LLP, the Board will consider making a change of its auditors for the fiscal year ending June 30, 2018.  

Fees Paid to Auditors

The following table set forts the fees accrued or paid to the Company’s independent registered public accounting firm for the year ended June 30, 2017 and 2016.

 

 

 

2017

 

 

2016

Audit Fees (1)

 

$

66,137

 

 

$

44,277

Audit-Related Fees (2)

 

 

 

 

 

 

 

Tax Fees (3)

 

 

31,849

 

 

 

 

All Other Fees

 

 

12,692

 

 

 

7,349

Total

 

$

110,678

 

 

$

51,626

 

(1)

Audit fees relate to professional services rendered in connection with the audit of the Paramount’s annual financial statements and internal control over financial reporting, quarterly review of financial statements included in the Paramount’s Quarterly Reports on Form 10-Q and audit services provided in connection with other statutory and regulatory filings.

(2)

Audit related fees comprise of fees for professional services that are reasonably related to the performance of the audit or review of Paramount’s financial statements not reported under the heading “Audit Fees”

(3)

Tax fees relate to professional services rendered in connection with tax audits, international tax compliance, and international tax consulting and planning services.

Pre-Approval Policies and Procedures

In accordance with the Audit Committee Charter, all audit (including audit-related) and non-audit services performed by MNP LLP, as described above, were pre-approved by the Audit Committee, which concluded that the provision of such services by our independent registered public accounting firm was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The Audit Committee Charter authorizes the Audit Committee to appoint a subcommittee of one or more members of the Audit Committee and/or to pre-approve non-audit services by establishing detailed pre-approval policies as to the particular service, provided that the Audit Committee is informed of each service pre-approved (no less frequently than at each meeting of the Audit Committee) and that no pre-approval shall be delegated to Paramount’s management except as permitted by applicable law and regulation. In considering whether to pre-approve any non-audit services, the Audit Committee (or its delegates) considers whether the provision of such services is compatible with maintaining the independence of our independent registered public accounting firm.

Required Vote

In order to become effective, the proposal to ratify the appointment of MNP LLP as Paramount’s independent registered public accounting firm for the year ending June 30, 2018 requires the affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote.  

RECOMMENDATION OF THE BOARD OF DIRECTORS

THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF MNP LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM UNDER PROPOSAL No. 2.


11


 

BOARD MEETINGS AND COMMITTEES ; ANNUAL MEETING ATTENDANCE

Our Board of Directors currently consists of seven directors. They are: Glen Van Treek, Rudi Fronk, Dr. John Carden, Eliseo Gonzalez-Urien, Christopher Reynolds, Pierre Pelletier and David Smith.  The rules of the NYSE American require that a majority of our directors be independent directors.  The Board has determined that Dr. Carden and Messrs., Fronk, Gonzalez-Urien, Reynolds, Pelletier and Smith are independent directors having satisfied the independence requirements pursuant to the “non-employee director” definition of Rule 16b-3 promulgated under Section 16 of the Exchange Act and National Instrument 58-101 of the Canadian Securities Administrators (“CSA”) and pursuant to the “independent director” definition in Section 803A of the rules of the NYSE American.  Mr. Reynolds and Mr. Smith are considered a “financial expert”.

During our last fiscal year, our Board met a total of eight times.   Each of our directors attended no less than 75% of our director meetings and no less than 75% of any committee meetings on which they serve.  

An annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, if any, on such date, and at such time as shall be fixed exclusively by resolution of the board of directors of the Corporation or a duly authorized committee thereof. Except as otherwise required by law, special meetings of stockholders of the Company for any purpose(s) may be called at any time only by or at the direction of (a) the board of directors of the Company, (b) the chairman of the board of directors or (c) two or more directors.

Although we do not have a formal policy regarding attendance by members of the Board at our annual meeting of stockholders, we encourage directors to attend and historically more than a majority have done so either in person or made themselves available by telephone.

Committees of the Board

The Board has five standing committees: an Audit Committee; a Compensation Committee; a Corporate Governance and Nominating Committee; a Pricing Committee; and a Technical Committee.  A minimum of two directors serve on each committee. Current membership on the various committees is as follows:

 

Compensation Committee: Rudi Fronk (Chair), Eliseo Gonzalez-Urien and Dr. John Carden;

 

Corporate Governance and Nominating Committee:  Dr. John Carden (Chair), Rudi Fronk, David Smith, Christopher Reynolds, Eliseo Gonzalez-Urien and Pierre Pelletier;

 

Audit Committee: Christopher Reynolds (Chair), David Smith and Dr. John Carden;

 

Pricing Committee: David Smith (Chair) and Pierre Pelletier; and

 

Technical Committee: Pierre Pelletier (Chair), Rudi Fronk and Eliseo Gonzalez Urien.

The committees generally meet throughout the year to review matters within each committee’s jurisdiction as more fully set forth below.  Our Audit Committee met four times during the last fiscal year.  Our Corporate Governance and Nominating Committee met three times during the fiscal year ended June 30, 2017. Our Compensation Committee met once in the fiscal year ended June 30, 2017. Our Pricing Committee met three times during the fiscal year ended June 30, 2017. Our Technical Committee met once in the fiscal year ended June 30, 2017.

Copies of the charters of each of these committees are available on Paramount’s website located at www.paramountnevada.com .

The primary purpose of the Compensation Committee is to review, on an annual basis or more frequently as it deems appropriate, the performance of our executive officers, to review the amount and form of compensation payable to our executive officers and to report to the Board on an annual basis, making recommendations regarding compensation of our executive officers. In addition, the Compensation Committee administers our equity compensation plans.

The Audit Committee oversees the accounting and financial reporting processes of Paramount and audits of the financial statements of Paramount. The Audit Committee has the sole authority to retain and terminate the independent registered public accounting firm that examines our financial statements.

The Corporate Governance and Nominating Committee is comprised of all the independent board members. The committee focuses on a wide array of responsibilities including (but not limited to): to determine criteria for selecting new directors, identify or seek out individuals qualified to become directors; consider nominations of director candidates validly made by stockholders; review and make recommendations to the Board concerning qualifications, appointment and removal of committee members; review and make recommendations to the Board concerning any amendments to the Company’s corporate governance documents; and to review

12


 

and make recommendations to the Board concerning corporate governance issues, issues of broad social significance and responsible conduct .

The primary purpose of the Pricing Committee is to approve the terms and pricing of financings including associated documents.

The Technical Committee’s primary purpose is to meet with management on a regular basis to discuss areas of focus, processes and programs, including those related to project development.

The Compensation Committee

The Compensation Committee is comprised of three independent directors, currently consisting of Messrs. Fronk, (Chair), Gonzalez-Urien, and Dr. Carden.   

The Compensation Committee assists the Board in overseeing executive compensation and administers Paramount’s executive bonus and equity compensation plan. The Compensation Committee’s primary responsibilities include:

evaluating the performance of and establishing compensation for Paramount’s President and Chief Executive Officer;

establishing compensation levels for Paramount’s directors and executive officers and reviewing executive compensation matters generally;

making recommendations to the Board with respect to approval and adoption of all cash and equity-based incentive plans; and

approving awards of options, restricted shares, restricted share units and other equity rights to executive officers.

The Compensation Committee’s further responsibilities are discussed more fully in its charter.

Compensation Committee Report

The Compensation Committee of the Board has reviewed and discussed the “Compensation Discussion and Analysis” section of this Proxy Statement with management. Based on this review and these discussions, the Compensation Committee recommended to the Board that the section entitled “Compensation Discussion and Analysis” be included in this Proxy Statement and incorporated by reference into Paramount’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017.

Submitted by the Compensation Committee of the Board,

Rudi Fronk, Chair

Eliseo Gonzalez-Urien

 

John Carden

The Audit Committee

The Audit Committee currently consists of Christopher Reynolds (Chair), Dr. John Carden and David Smith.  The Board has determined that each member of the Audit Committee is independent under NYSE American rules and Rule 10A-3 under the Exchange Act.  Each member of the Audit Committee is financially literate and experienced in financial matters and has not participated in the preparation of Paramount’s financial statements at any time during the past three years. The Board has also determined that Mr. Reynolds and Mr. Smith are “audit committee financial experts” within the meaning of applicable SEC regulations.

The Audit Committee assists the Board in its oversight of Paramount’s financial reporting, focusing on the integrity of Paramount’s financial statements, Paramount’s compliance with legal and regulatory requirements, the qualifications and independence of Paramount’s independent auditor and the performance of Paramount’s internal audit function and independent auditor. The Audit Committee’s primary responsibilities include:

 

acting as the direct contact with Paramount’s independent auditor, who is ultimately accountable to the Audit Committee and the Board;

 

appointing the independent auditor, setting the terms of compensation and retention for the independent auditor and overseeing the work of the independent auditor;

 

pre-approving all audit and non-audit services provided to Paramount by the independent auditor, except for items exempt from pre-approval requirements under applicable law; and

13


 

 

acting in respect of all other matters as to which Audit Committee action is required by law or applicable listing standards.

The Audit Committee’s responsibilities and key practices are more fully described in its written charter.  In accordance with the rules of the NYSE American, the Audit Committee reviews and reassesses the adequacy of its written charter on an annual basis.

Audit Committee Report

Pursuant to rules adopted by the SEC designed to improve disclosures related to the functioning of corporate audit committees and to enhance the reliability and credibility of financial statements of public companies, the Audit Committee of our Board of Directors submits the following report:

Audit Committee Report to Stockholders

The Audit Committee of the Board of Directors is responsible for providing independent, objective oversight of the Company’s accounting functions and internal controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the Listing Rules. The Audit Committee operates under a written charter approved by the Board of Directors and held four meetings in fiscal 2017. A copy of the charter is available on the Company’s website at www.paramountnevada.com by choosing the “Corporate link” then clicking on the “Governance” section.

Management is responsible for the Company’s internal controls over financial reporting, disclosure controls and procedures and the financial reporting process. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with Public Company Accounting Oversight Board (PCAOB) standards and to issue reports thereon. The Audit Committee’s responsibility is to monitor and oversee these processes, including the activities of the internal audit function. The Audit Committee has established a mechanism to receive, retain and process complaints on auditing, accounting and internal control issues, including the confidential, anonymous submission by employees, vendors, customers and others of concerns on questionable accounting and auditing matters.

In connection with these responsibilities, the Audit Committee met with management and the independent registered public accounting firm to review and discuss the June 30, 2017 audited consolidated financial statements. The Audit Committee also discussed with the independent registered public accounting firm the matters required by Statement on Auditing Standards Update No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the PCAOB in Rule 3200T. In addition, the Audit Committee received the written disclosures from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed the independent registered public accounting firm’s independence from the Company and its management.

Based upon the Audit Committee’s discussions with management and the independent registered public accounting firm, and the Audit Committee’s review of the representations of management and the independent registered public accounting firm, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for fiscal 2017 filed with the SEC.

The Audit Committee also has appointed, subject to stockholder ratification, MNP LLP as the Company’s independent registered public accounting firm for fiscal 2018.

 

Respectfully submitted,

 

THE AUDIT COMMITTEE

 

Christopher Reynolds, Chairman

John Carden

David Smith

The Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee currently consists of Dr. Carden (Chair), Messrs. Fronk, Gonzalez-Urien, Smith, Reynolds and Pelletier.  All members of the Committee are independent directors.

14


 

The Corporate Governance and Nominating Committee assists the Board in carrying out its oversight responsibilities relating to the composition of the Board and further assi sts the Board by regularly assessing and making recommendations to improve the Company’s governance practices.

The Committee’s primary responsibilities include considering and making recommendations to the Board with respect to nominees for election to the Board consistent with criteria approved by the Board or the Committee, including director candidates submitted by Paramount’s stockholders.  

The Corporate Governance and Nominating Committee’s responsibilities and key practices are more fully described in its charter.

Director Nominees

The Corporate Governance and Nominating Committee utilizes a variety of methods for identifying and evaluating director nominees. The Committee may consider candidates recommended by Paramount’s directors, members of management, professional search firms or stockholders. These candidates may be considered at any point during the year.   The members of the Nominating Committee evaluate potential nominees, whether proposed by stockholders or otherwise, by reviewing their qualifications, reviewing results of personal and reference interviews and reviewing other relevant information. Candidates whose evaluations are favorable are then chosen by a majority of the members of the Nominating Committee to be recommended for nomination by the full Board. The full Board then selects and nominates candidates for election as directors by the stockholders at the Annual Meeting.

To date, our Corporate Governance and Nominating Committee has not paid a fee to any third party to identify or evaluate prospective nominees.

Qualifications

In evaluating nominees for election as a director, the Corporate Governance and Nominating Committee considers a number of factors, including the following:

 

personal and professional qualities, characteristics, attributes, accomplishments and reputation in the business community and otherwise;

 

reputation in a particular field or area of expertise;

 

current knowledge and contacts in the markets in which Paramount does business and in Paramount’s industry and other industries relevant to Paramount’s business;

 

the ability and willingness to participate fully in board activities, including attendance at, and active participation in, meetings of the Board and its committees;

 

the skills and personality of the nominee and how the Committee perceives the nominee will fit with the existing directors and other nominees in maintaining a Board that is collegial and responsive to the needs of Paramount and its stockholders;

 

the willingness to represent the best interests of all of Paramount’s stockholders and not just one particular constituency; and the diversity of viewpoints, background and experience, compared to those of existing directors and other nominees .

15


 

The P ricing Committee

The Pricing Committee of the Board of Directors currently consists of two members, they are: Messrs. Smith (Chair), and Pelletier.

The committee, on behalf of the Board is authorized to negotiate and approve the terms associated with offerings including all associated documents. The committee may authorize an officer to execute and deliver transaction documents that the committee deems such terms and provisions necessary or desirable.

In addition the Pricing Committee is authorized to consider, and if deemed advisable, to approve the participation in the offering of any related party to the Company, including any officer, director or significant shareholder.

The Technical Committee

The Technical Committee of the Board of Directors currently consists of three members, they are: Messrs. Pelletier (Chair), Fronk and Gonzalez-Urien.

The committee, on behalf of the Board is to have periodic discussions with management related to the areas of focus related to process, programs, including environmental, social and those related to project development. The committee is to ensure that management is taking appropriate measures to achieve compliance with appropriate laws and legislation, and to ensure that principle risks and opportunities related to the area of focus are identified. The committee is to ensure that management has the proper resources allocated to address these risks and opportunities. The committee is to provide advice, counsel and recommendations to management as the committee deems appropriate.

The Technical Committee’s responsibilities and key practices are more fully described in its charter.

Related Person Transaction Policies and Procedures

It is our practice and policy to comply with all applicable laws, rules and regulations regarding related party transactions, including the Sarbanes-Oxley Act of 2002.  A related person is any executive officer, director, or more than 5% stockholder of the Company, including any of their immediate family members, and any entity owned or controlled by such persons. Our Audit Committee has been charged with responsibility for approving all related party transactions as part of the Audit Committee’s overall responsibilities as set forth in its charter. In considering related party transactions, the Audit Committee takes into account the relevant available facts and circumstances.  In the event a director has an interest in the proposed transaction, the director must recuse himself from the deliberations and approval.

During the fiscal year ended June 30, 2017, independent directors as a group, were paid or accrued $60,000 for their services as directors of the Company’s Board.  During the year ended June 30, 2017, the Company also recorded a non-cash transaction to recognize stock based compensation for directors in the amount of $98,352.

16


 

EXECUTIVE C OMPENSATION

The Summary Compensation Table (“SCT”) summarizes the total compensation of our named executive officers (“NEOs”) for the fiscal year ended June 30, 2017, and the prior two fiscal years to the extent required under the Securities and Exchange Commission rules.

Summary Compensation Table

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonqualified

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Equity

 

 

Deferred

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

 

Option

 

 

Incentive Plan

 

 

Compensation

 

All Other

 

 

 

 

 

Name and Principal Position

 

Year

 

Salary

 

 

Bonus

 

Awards

 

 

Awards(1)

 

 

Compensation

 

 

Earnings

 

Compensation

 

 

Total

 

(a)

 

(b)

 

(c)

 

 

(d)

 

(e)

 

 

(f)

 

 

(g)

 

 

(h)

 

(i)

 

 

(j)

 

Glen Van  Treek

 

2017

 

$

200,000

 

 

40,000

 

$

 

 

$

 

 

$

 

 

 

$

 

 

$

240,000

 

President and CEO

 

2016

 

$

160,000

 

 

 

$

 

 

$

 

 

$

 

 

 

$

 

 

$

160,000

 

 

 

2015

 

$

33,334

 

 

 

$

 

 

$

311,945

 

 

$

 

 

 

$

 

 

$

345,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carlo Buffone

 

2017

 

$

200,000

 

 

40,000

 

$

 

 

$

 

 

$

 

 

 

$

 

 

$

240,000

 

Chief Financial Officer

 

2016

 

$

160,000

 

 

 

$

 

 

$

 

 

$

 

 

 

$

 

 

$

160,000

 

 

 

2015

 

$

33,334

 

 

 

$

 

 

$

311,945

 

 

$

 

 

 

$

 

 

$

345,279

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The amounts reported reflect the aggregate grant fair value of option awards granted during the year as computed in accordance with FASB ASC Topic 718.  The assumptions used to calculate these amounts are discussed in Note 6 to our notes to consolidated financial statements included in our Annual Report on Form 10-K, as filed with the SEC on September 18, 2017.  As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to market based vesting conditions.

Narrative to Summary Compensation Table

Executive Employment Arrangements

On August 10, 2016, we amended the employment agreements with Mr. Van Treek and Mr. Buffone.  For a description of the terms and conditions of such employment agreements, please see the section entitled “Amended Employment Agreements” below.

2017 Salaries

The named executive officers receive a base salary to compensate them for services rendered to our Company.   The base salary payable to each named executive officer is intended to provide a fixed component reflecting the executive’s skill set, experience, role and responsibilities.

2017 Bonuses

On August 5, 2016, Mr. Van Treek and Mr. Buffone were each granted a performance based cash bonus in the amount of $40,000. These bonuses were paid during the fiscal year ended June 30, 2017.

Equity Based Compensation

On June 16, 2015, we adopted the 2015 Stock Award and Incentive Plan (the “2015 Plan”).  On December 14, 2016, stockholders ratified the 2016 Stock Incentive and Equity Compensation Plan (the “2016 Plan”).  The purpose of the 2015 Plan and 2016 Plan is to attract, retain and reward officers, employees, directors, consultants and advisors to the Company and its subsidiaries and affiliates, provide equitable and competitive compensation opportunities, authorize incentive awards that appropriately reward

17


 

achievement of our goals and recognize individual contributions without promoting excessive risk and promote creation of long-term value for stockholders by closely aligning the interests of participants with the interests o f stockholders.   

The principal features of the 2015 Plan and 2016 Plan are summarized below.

Types of Awards

The 2015 Plan authorized a broad range of awards, including:

stock options;

stock appreciation rights (“SARs”);

restricted stock, a grant of actual shares subject to a risk of forfeiture and restrictions on transfer; and

other awards based on common stock.

There were no options granted to the Company’s NEO’s during the fiscal year ended June 30, 2017.

Amended Employment Agreements

On August 10, 2016, we entered into amended employment agreements (collectively, the “Employment Agreements”) with Mr. Van Treek and Mr. Buffone.  The material terms of such agreements are summarized below:

Base Salary, Annual Bonus and Equity Compensation

The Employment Agreements provide Mr. Van Treek and Mr. Buffone with annual base salaries of $200,000 each.  Each executive is entitled to participate in the Company’s benefit plans, and paid vacation in accordance with Company policies.  The Employment Agreements also provide that Mr. Van Treek and Mr. Buffone shall be granted cash performance bonuses and equity incentives on a periodic basis at the discretion of the Board of Directors.

Termination by the Company Other Than for Just Cause, Disability or Death and Termination by the Employee for Good Reason

The Employment Agreements provide for amounts to be paid upon termination of employment by the Company other than for just cause, disability or death or is terminated by the Employee for good reason in the following aggregate amounts: (i) any unpaid earned annual compensation to and including the date of termination; (ii) an amount equal to two times the annual salary plus two times the average annual bonus paid to the Employee in the previous two years; and (iii) an amount equal to all outstanding and accrued vacation pay to the date of termination.  Good reason shall include, without limitation, the occurrence of the following: (a) a material change (other than those that are clearly consistent with a promotion) in the Employees position or duties, responsibilities, title or office; (b) a reduction by the Company of the Employees salary; (c) any material breach by the Company of any provision of the employment agreement

Termination for Just Cause and Termination by the Employee Other Than Good Reason

The Employment Agreements provide if employment of the executive is terminated by the Company for just cause or is terminated by the executive other than for good reason, the Company shall pay to the executive any earned but unpaid annual salary and the Company shall have no further obligation to the executive.

Change of Control

The Employment Agreements provide for amounts to be paid if the executive’s employment is terminated by the Company or by the executive for good reason in the following aggregate amounts: (i) any unpaid earned annual compensation to and including the date of termination; (ii) an amount equal to two times the annual salary plus two times the average annual bonus paid to the Employee in the previous two years; and (iii) an amount equal to all outstanding and accrued vacation pay to the date of termination.

The Employment Agreements also provide, immediately prior to the control change, the Company may pay an additional discretionary bonus to Mr. Van Treek and Mr. Buffone.  The additional discretionary bonus may be any amount and shall be determined by the Board of Directors in their sole and absolute discretion.

18


 

Outstanding Equity Awards at Fiscal Year-E nd June 30, 2017

 

 

 

Option Awards

 

Stock Awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Incentive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

Awards:

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

Incentive

 

Market   or

 

 

 

 

 

 

 

 

 

 

Incentive

 

 

 

 

 

 

 

 

 

 

 

 

Plan

 

Payout

 

 

 

 

 

 

 

 

 

 

Plan

 

 

 

 

 

 

 

 

 

 

 

 

Awards:

 

Value of

 

 

 

 

 

 

 

 

 

 

Awards:

 

 

 

 

 

 

 

 

 

 

 

 

Number of

 

Unearned

 

 

Number of

 

 

Number of

 

 

Number of

 

 

 

 

 

 

 

 

 

 

 

 

Unearned

 

Shares,

 

 

Securities

 

 

Securities

 

 

Securities

 

 

 

 

 

 

 

 

Number of

 

Market Value

 

Shares,

 

Units or

 

 

Underlying

 

 

Underlying

 

 

Underlying

 

 

 

 

 

 

 

 

Shares or

 

of Share or

 

Units or

 

Other

 

 

Unexercised

 

 

Unexercised

 

 

Unexercised

 

 

Option

 

 

Option

 

Units of Stock

 

Units That

 

Other Rights

 

Rights That

 

 

Options

 

 

Options

 

 

Unearned

 

 

Exercise

 

 

Expiration

 

That Have Not

 

Have Not

 

That Have

 

Have Not

Name

 

Exercisable

 

 

Unexercisable

 

 

Options

 

 

Price

 

 

Date

 

Vested

 

Vested

 

Not Vested

 

Vested

Glen Van Treek

 

 

91,667

(1)

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

Glen Van Treek

 

91,667

(2)

 

 

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

Glen  Van Treek

 

91,666

(3)

 

 

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

Carlo Buffone

 

 

91,667

(1)

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

Carlo Buffone

 

91,667

(2)

 

 

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

Carlo Buffone

 

91,666

(3)

 

 

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

 

 

(1)

The stock options are fully vested and exercisable.

 

(2)

The stock option vests and becomes exercisable on June 30, 2016 and the Company’s share price closing above 35% of the exercise price for ten days (The ten days do not have to be consecutive). These two conditions have been met and therefore the stock options are fully vested and exercisable.

 

(3)

The stock option vests and becomes exercisable on June 30, 2017 and the Company’s share price closing above 50% of the exercise price for ten days (The ten days do not have to be consecutive). These two conditions have been met and therefore the stock options are fully vested and exercisable.

 

DIRECTOR COMPENSATION

Cash Compensation

Each year, an independent director is eligible to receive a cash retainer of $10,000 for serving on our Board of Directors.  In addition, our Chairman of the Board is eligible to receive an additional cash retainer of $10,000 for service as our Chairman of the Board.

Equity Compensation

Directors are eligible to receive equity compensation as determined by the Compensation Committee from the 2015 Plan and 2016 Plan. The purpose of the 2015 Plan and 2016 Plan is to attract, retain and reward officers, employees, directors, consultants and advisors to the Company and its subsidiaries and affiliates, provide equitable and competitive compensation opportunities, authorize incentive awards that appropriately reward achievement of our goals and recognize individual contributions without promoting excessive risk and promote creation of long-term value for stockholders by closely aligning the interests of participants with the interests of stockholders.

 

19


 

Name

 

 

Fees earned or paid in cash ($)

 

Stock awards ($)

 

Option awards (1) ($)

 

Non-equity incentive plan compensation

($)

 

Nonqualified deferred compensation earnings ($)

 

All other compensation ($)

 

Total ($)

(a)

 

 

(b)

 

(c)

 

(d)

 

(e)

 

 

(f)

 

(g)

 

(h)

John Carden

 

 

$10,000

 

 

 

 

 

 

 

 

$10,000

 

Eliseo Gonzalez-Urien

 

 

$10,000

 

 

 

 

 

 

 

 

$10,000

 

Christopher Reynolds

 

 

$10,000

 

 

 

 

 

 

 

 

$10,000

 

David Smith

 

 

$10,000

 

 

 

 

 

 

 

 

$10,000

 

Pierre Pelletier

 

 

$10,000

 

 

$61,323

 

 

 

 

 

$71,323

 

Rudi Fronk

 

 

$10,000

 

 

 

 

 

 

 

 

$10,000

 

 

(1)

The amounts reported reflect the aggregate grant fair value of option awards granted during the year as computed in accordance with FASB ASC Topic 718.  The assumptions used to calculate these amounts are discussed in Note 6 to our notes to consolidated financial statements included in our Annual Report on Form 10-K, as filed with the SEC on September 18, 2017.  As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to market based vesting conditions.

 

Outstanding Equity Awards at Fiscal Year-End June 30, 2017

 

 

 

Option Awards

 

Stock Awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Incentive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

Awards:

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

Incentive

 

Market or

 

 

 

 

 

 

 

 

 

 

Incentive

 

 

 

 

 

 

 

 

 

 

 

 

Plan

 

Payout

 

 

 

 

 

 

 

 

 

 

Plan

 

 

 

 

 

 

 

 

 

 

 

 

Awards:

 

Value of

 

 

 

 

 

 

 

 

 

 

Awards:

 

 

 

 

 

 

 

 

 

 

 

 

Number of

 

Unearned

 

 

Number of

 

 

Number of

 

 

Number of

 

 

 

 

 

 

 

 

 

 

 

 

Unearned

 

Shares,

 

 

Securities

 

 

Securities

 

 

Securities

 

 

 

 

 

 

 

 

Number of

 

Market Value

 

Shares,

 

Units or

 

 

Underlying

 

 

Underlying

 

 

Underlying

 

 

 

 

 

 

 

 

Shares or

 

of Share or

 

Units or

 

Other

 

 

Unexercised

 

 

Unexercised

 

 

Unexercised

 

 

Option

 

 

Option

 

Units of Stock

 

Units That

 

Other Rights

 

Rights That

 

 

Options

 

 

Options

 

 

Unearned

 

 

Exercise

 

 

Expiration

 

That Have Not

 

Have Not

 

That Have

 

Have Not

Name

 

Exercisable

 

 

Unexercisable

 

 

Options

 

 

Price

 

 

Date

 

Vested

 

Vested

 

Not Vested

 

Vested

John Carden

 

 

16,667

(1)

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

John Carden

 

16,667

(2)

 

 

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

John Carden

 

16,666

(3)

 

 

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

Eliseo Gonzalez-Urien

 

 

16,667

(1)

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

Eliseo Gonzalez-Urien

 

16,667

(2)

 

 

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

Eliseo Gonzalez-Urien

 

16,666

(3)

 

 

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

Christopher Reynolds

 

 

16,667

(1)

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

Christopher Reynolds

 

16,667

(2)

 

 

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

Christopher Reynolds

 

16,666

(3)

 

 

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

David Smith

 

 

25,000

(1)

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

David Smith

 

25,000

(2)

 

 

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

David Smith

 

25,000

(3)

 

 

 

 

 

 

 

$

1.53

 

 

6/29/20

 

 

 

 

Pierre Pelletier

 

 

16,666

(1)

 

 

 

 

 

$

2.12

 

 

9/13/21

 

 

 

 

Pierre Pelletier

 

 

 

 

 

16,667 (4)

 

 

 

16,667 (4)

 

 

$

2.12

 

 

9/13/21

 

 

 

 

Pierre Pelletier

 

 

 

 

 

16,667 (5)

 

 

 

16,667 (5)

 

 

$

2.12