UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed
by the Registrant ☒
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by a Party other than the Registrant ☐
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission only (as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to § 240.14a-11(c) or § 240.14a-12
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TSR,
Inc.
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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of Filing Fee (Check the appropriate box):
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computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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of each class of securities to which transaction applies: ___________________
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number of securities to which transaction applies: ___________________
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filing fee is calculated and state how it was determined): ___________________
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TSR,
INC.
400 OSER AVENUE, SUITE 150
HAUPPAUGE, NY 11788
Dear
Stockholders,
The
fiscal year ended May 31, 2021 was a year of change for TSR, Inc. (“TSR” or the “Company”).
As
you know, in late 2019 and early 2020, TSR reconstituted its Board of Directors (the “Board”) and a new management team was
put in place. The new Board went to immediate work with the team to focus on finding ways to profitably grow the business and achieve
adequate returns on stockholders’ capital.
With
profitable growth as an objective, in September of 2020, the Company announced its first acquisition in nearly twenty years when TSR
purchased Geneva Consulting Group, Inc. (“Geneva”). The early results are promising. Geneva brought a group of dedicated
professionals who have successfully worked with our team to grow the services offered to the Geneva client base. We have seen significant
growth in the number of consultants working for almost all of Geneva’s clients since we completed the acquisition.
Our
core business has also seen growth. In the most recent fiscal year, the uncertainty of the pandemic caused plenty of starts and stops,
but we finished the year with approximately 611 consultants serving our clients, which is a 60% increase from the number of consultants
we had at May 31, 2020.
Since
the Board was reconstituted on December 31, 2019, the price per share of common stock has increased from $3.59 to $10.02 as of October
15, 2021. During the same period, the Russel Microcap Index increased from 2,604.22 to 3,906.77.
The
staffing business is a competitive business. Our primary assets are our employees and our customers. We are working to provide a dynamic
and healthy workplace for the former, and the best programmers and IT professionals for the latter. Our current strategic plan is to
organically grow the Company, and we also look at potential acquisition candidates from time to time. If we can find a company with a
great team that can help diversify our client base and enhance our service offerings, and we can buy it at reasonable price, the Board
will carefully consider further acquisitions.
Our
annual stockholder meeting will be held on November 30, 2021 at 11:30 a.m., Eastern Time, and we invite you to participate. The following
items will be on the agenda:
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1.
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To
elect two Class I Directors for a term to expire at the 2024 annual stockholder meeting;
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2.
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To
approve an amendment to the Company’s Certificate of Incorporation to declassify the
Board of directors;
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3.
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To
ratify the appointment of CohnReznick LLP as the independent registered public accountants
of the Company for the fiscal year ending May 31, 2022;
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4.
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To
hold a non-binding advisory vote on the compensation program for the Company’s named
executive officers as disclosed in the proxy statement; and
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5.
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To
transact other business that may properly come before the annual meeting, including any adjournment
or postponement thereof.
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Our
Board has fixed the close of business on October 27, 2021 as the record date for determining those stockholders entitled to receive notice
of and vote at the annual meeting and any adjournments or postponements thereof.
The
Board and management team are committed to a new era of growth for TSR. In every decision, we are accountable to you, the stockholders.
I
look forward to discussing our plans and progress at the meeting and in the years to come. Meanwhile, I encourage you to take care of
yourself and your community during this pandemic.
Bradley
Tirpak
Chairman
of the Board
Hauppauge,
New York
November
4, 2021
TSR,
INC.
400 OSER AVENUE, SUITE 150
HAUPPAUGE, NY 11788
NOTICE
OF 2021 ANNUAL MEETING OF STOCKHOLDERS
to be held on November 30, 2021
NOTICE
IS HEREBY GIVEN that the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of TSR, Inc., a Delaware corporation
(“TSR” or the “Company”), will be held on November 30, 2021 at 11:30 a.m., local time. As a result of the public
health and travel risks and concerns due to COVID-19, the Annual Meeting will be a virtual meeting of stockholders, which means
that you will be able to participate in the Annual Meeting, vote and submit your questions during the Annual Meeting via live webcast
by visiting https://www.cstproxy.com/tsrconsulting/2021. You will not be able to attend the Annual
Meeting in person. Please read carefully the sections in the proxy statement on attending via webcast and voting at the Annual Meeting
to ensure that you comply with these requirements.
The
purposes of the meeting are:
1. To
elect two Class I Directors for a term to expire at the 2024 annual stockholder meeting;
2. To
vote on a proposal to approve an amendment to the Company’s Certificate of Incorporation to declassify the board of directors (the
“Board”);
3. To
ratify the appointment of CohnReznick LLP as the independent registered public accountants of the Company for the fiscal year ending
May 31, 2022;
4. To
hold a non-binding advisory vote on the compensation program for the Company’s named executive officers as disclosed in the proxy
statement; and
5. To
transact other business that may properly come before the Annual Meeting, including any adjournment or postponement thereof.
These
matters are more fully described in the proxy statement. The Board recommends that you vote “FOR” the nominated directors,
“FOR” the proposal to amend the Company’s Certificate of Incorporation to declassify the Board, “FOR” for
the ratification of the Company’s independent registered public accounting firm and “FOR” the approval of the compensation
program for the Company’s named executive officers. The Board knows of no other matters at this time that may be properly brought
before the meeting.
Stockholders
of record at the close of business on October 27, 2021 will be entitled to vote at the Annual Meeting or any adjournments thereof. A
list of stockholders entitled to vote at the Annual Meeting will be available at the virtual Annual Meeting and during the ten-day period
prior to the date of the Annual Meeting, at the Company’s principal executive offices for inspection by stockholders during ordinary
business hours for any purpose germane to the Annual Meeting.
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By
Order of the Board of Directors,
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John
G. Sharkey, Secretary
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Hauppauge,
New York
November
4, 2021
WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING VIA WEBCAST, PLEASE ENSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING BY VOTING
IN ONE OF THE FOLLOWING WAYS:
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(1)
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VIA
THE INTERNET – GO TO THE WEBSITE DESIGNATED ON THE ENCLOSED PROXY CARD.
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(2)
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BY
TELEPHONE – CALL THE TELEPHONE NUMBER DESIGNATED ON THE ENCLOSED PROXY CARD.
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(3)
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BY
MAIL – COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT IN THE ENCLOSED,
SELF-ADDRESSED ENVELOPE. NO POSTAGE IS NEEDED IF THE PROXY CARD IS MAILED WITHIN THE UNITED
STATES.
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YOUR
PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE APPRECIATED.
TABLE
OF CONTENTS
TSR,
INC.
400 Oser Avenue, Suite 150
Hauppauge, NY 11788
2021
ANNUAL MEETING OF STOCKHOLDERS
to be held on November 30, 2021
PROXY
STATEMENT
This
solicitation of proxies is being made by the Board of Directors (the “Board”) of TSR, Inc. (“TSR” or the “Company”)
for use at the 2021 Annual Meeting of the Stockholders of the Company (the “Annual Meeting”) on November 30, 2021 at 11:30
a.m., Eastern Time, or at any postponement or adjournment thereof. As a result of the public health and travel risks and concerns due
to COVID-19, the Annual Meeting will be a virtual meeting via live webcast on the Internet. You will be able to attend the meeting, vote
and submit your questions during the meeting by visiting https://www.cstproxy.com/tsrconsulting/2021 and entering your
control number included on the proxy card you receive. You will not be able to attend the meeting in person. The Board and officers
and employees of the Company will solicit proxies by mail, telephone and personal contact for no additional compensation.
This
Proxy Statement (“Proxy Statement”), the enclosed form of proxy and the Company’s Annual Report for the fiscal year
ended May 31, 2021 shall be mailed on or about November 4, 2021 to holders of record of shares of the Company’s common stock, par
value $0.01 per share (“Common Stock”), as of October 27, 2021, using the full set delivery option pursuant to Rule 14a-16(n)
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Only Stockholders of record at the close of business
on October 27, 2021 are entitled to vote at the Annual Meeting. On October 27, 2021, there were 1,962,062 shares of Common Stock issued
and outstanding.
Important
Notice Regarding the Internet Availability of Proxy Materials
for
the Stockholders Meeting to be held on November 30, 2021
This
Proxy Statement, a copy of the form of proxy and the Company’s Annual Report for the fiscal year ended May 31, 2021 are also available
on the Investor Relations page of our website at www.tsrconsulting.com.
QUESTIONS
& ANSWERS ABOUT THIS PROXY SOLICITATION
The
following are some of the questions that you may have about this Proxy Statement and the answers to those questions. The information
in this section does not provide all of the information that may be important to you with respect to this Proxy Statement. Therefore,
we encourage you to read the entire Proxy Statement, which was first distributed beginning on or about November 4, 2021, for more information
about these topics.
Why
am I receiving these materials?
TSR
has made these materials available to you in connection with the Company’s solicitation of proxies for use at the Annual Meeting
to be held via webcast, on November 30, 2021 at 11:30 a.m., Eastern Time, or at any postponement or adjournment thereof. The Company,
on behalf of the Board, is soliciting your proxy to vote your shares at the Annual Meeting. We solicit proxies to give stockholders of
record an opportunity to vote on matters that will be presented at the Annual Meeting. You are invited to attend the Annual Meeting via
webcast and are requested to vote on the proposals described in this Proxy Statement.
Why
Is the Company Holding a Virtual Annual Meeting and How Do I Participate?
Due
to the public health impact of COVID-19 and to support the health and well-being of our stockholders, this Annual Meeting will be held
in a virtual meeting format only. We have designed our virtual format to enhance, rather than constrain, stockholder access, participation
and communication. Stockholders will have multiple opportunities to submit questions to the Company for the Annual Meeting. Stockholders
who wish to submit a question in advance may do so beginning on November 23, 2021 by pre-registering and then selecting the chat box
link. Stockholders also may submit questions live during the meeting. Questions pertinent to the Annual Meeting matters may be recognized
and answered during the meeting in our discretion, subject to time constraints. We reserve the right to edit or reject questions that
are inappropriate for Annual Meeting matters.
Any
stockholder can listen to and participate in the Annual Meeting live via the Internet at https://www.cstproxy.com/tsrconsulting/2021.
The webcast will start at 11:30 a.m., Eastern Time, on November 30, 2021. Stockholders may vote and submit questions while connected
to the Annual Meeting on the Internet.
Instructions
on how to connect and participate in the Annual Meeting, including how to demonstrate proof of ownership of our Common Stock, are posted
at https://www.cstproxy.com/tsrconsulting/2021. If you do not have your 12-digit control number that is printed in
the box on your proxy card, you will only be able to listen to the Annual Meeting.
If
you do not have Internet capabilities, you can attend the Annual Meeting via a listen-only format by dialing 1 877-770-3647 (toll-free)
within the U.S. and Canada, or 1 312-780-0854 (standard rates apply) outside of the U.S. and Canada, and entering the pin number (62375896#)
when prompted. You will not be able to vote or submit questions through the listen-only format.
What
is being voted on at the Annual Meeting?
The
Company is aware of four (4) matters that stockholders may vote on at the Annual Meeting. These matters are listed on the Company’s
proxy card. The seven matters listed on the Company’s proxy card are as follows:
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1.
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The
election to the Board of two (2) Class I Director nominees (Proposal No. 1);
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2.
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The
approval of an amendment to the Company’s Certificate of Incorporation to declassify
the Board (Proposal No. 2);
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3.
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The
ratification of the appointment of CohnReznick LLP as the Company’s independent registered
public accounting firm for the fiscal year ending May 31, 2022 (Proposal No. 3); and
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4.
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A
non-binding advisory vote on the compensation program for the Company’s named executive
officers as disclosed herein (Proposal No. 4).
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How
does the Board of TSR recommend that I vote?
At
the Annual Meeting, the Board of TSR recommends that you vote your shares:
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1.
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“FOR”
the election of the Class I Director nominees (Proposal No. 1);
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2.
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“FOR”
the approval of an amendment to the Company’s Certificate of Incorporation to declassify
the Board (Proposal No. 2);
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3.
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“FOR”
the ratification of the appointment of CohnReznick LLP as the Company’s independent
registered public accounting firm for the fiscal year ending May 31, 2022 (Proposal No. 3);
and
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4.
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“FOR”
the approval of the compensation program for our named executive officers as described herein
(Proposal No. 4).
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Who
is entitled to vote at the Annual Meeting?
Stockholders
of record of shares of Common Stock, at the close of business on October 27, 2021 (the “Record Date”) are entitled to vote
at the Annual Meeting or any postponement or adjournment thereof. Each share of Common Stock is entitled to one vote on each matter to
be voted on. As of the Record Date, there were 1,962,062 shares of Common Stock issued and outstanding. There are no other voting securities
of the Company outstanding.
What
is the difference between a stockholder of record and a beneficial owner of shares held in street name?
Stockholder
of Record. If your shares are registered directly in your name with the Company’s transfer agent, Continental Stock Transfer
& Trust Company, you are considered the stockholder of record with respect to those shares, and the notice for the Annual Meeting
(“Notice”) was sent directly to you by the Company.
Beneficial
Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar
organization, then you are the “beneficial owner” of shares held in “street name,” and a Notice was forwarded
to you by that organization. As a beneficial owner, you have the right to instruct your broker, bank, trustee, or nominee how to vote
your shares. Your broker is required to vote your shares in accordance with your instructions. If you do not give instructions to your
broker, your broker will not be able to vote your shares on any proposals other than Proposal No. 4. It is very important to instruct
your broker how to vote your shares by following their voting instructions.
How
do I vote?
Stockholder
of Record. If you are a stockholder of record you can vote in any one of four ways:
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1.
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Via
the Internet Prior to the Meeting. You may vote by proxy via the Internet prior to the
Annual Meeting by following the instructions provided on the enclosed proxy card.
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2.
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By
Telephone. You may vote by proxy by calling the toll-free number found on the enclosed
proxy card.
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3.
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By
Mail. You may vote by proxy by filling out the proxy card and returning it in the envelope
provided.
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4.
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At
the Meeting. If you attend the virtual Annual Meeting, you may vote during the meeting
by visiting https://www.cstproxy.com/tsrconsulting/2021, entering your control number
included on the proxy card you receive.
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Beneficial
Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar
organization, then you are the “beneficial owner” of shares held in “street name” and you can vote in any one
of two ways:
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1.
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Broker
Instructions. A Notice was forwarded to you by a brokerage firm, bank, broker-dealer,
or other similar organization. As a beneficial owner, you have the right to instruct your
broker, bank, trustee, or nominee how to vote your shares. Your broker is required to vote
your shares in accordance with your instructions. If you do not give instructions to your
broker, your broker will not be able to vote your shares for Proposal No. 1, Proposal No.
2, or Proposal No. 4. It is very important to instruct your broker how to vote your shares
by following their voting instructions.
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2.
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At
the Meeting. If you are a beneficial owner of shares held in street name and wish to
vote at the Annual Meeting, you must obtain a “legal proxy” from the organization
that holds your shares. A legal proxy is a written document that will authorize you to vote
your shares held in street name at the Annual Meeting. Please contact the organization that
holds your shares for instructions regarding obtaining a legal proxy. Once you have received
your legal proxy, you will need to contact Continental Stock Transfer & Trust Company
to have a control number generated. Please allow up to 72 hours for processing your request
for a control number. To vote during the Annual Meeting, please visit https://www.cstproxy.com/tsrconsulting/2021
and enter your control number you receive.
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How
many votes are required to approve each proposal?
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1.
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Proposal
No. 1 - Election to the Company’s Board of two (2) Class I Director nominees named
in this Proxy Statement. Candidates for election as members of the Board who receive the
highest number of votes, up to the number of directors to be chosen, shall stand elected;
an absolute majority of the votes cast is not a prerequisite to the election of any candidate
to the Board, nor is it a prerequisite to election for a candidate to receive more affirmative
votes than authority withheld votes. A proxy that withholds authority with respect to the
election of any or all nominees will be counted for purposes of determining whether there
is a quorum, but, with respect to any specific nominee, will not be considered to have been
voted for such nominee. Broker non-votes, if any, will have no effect.
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2.
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Proposal
No. 2 – Approval of an amendment to the Company’s Certificate of Incorporation
to declassify the Board. Under our Certificate of Incorporation, as amended, approval of
this proposal requires the affirmative vote of the holders of not less than two-thirds of
the stock having voting power and entitled to vote. Abstentions and broker non-votes
will have the same effect as votes “against” this proposal.
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3.
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Proposal
No. 3 – Ratification of the appointment of CohnReznick LLP as the Company’s
independent registered public accounting firm for the fiscal year ending May 31, 2022. Adoption
of this proposal requires the affirmative vote of the holders of a majority of the stock
having voting power present in person or represented by proxy at the Annual Meeting and entitled
to vote. Abstentions will be counted as represented and entitled to vote and will have the
effect of a negative vote on the proposal.
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4.
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Proposal
No. 4 – A non-binding advisory vote on the compensation program for the Company’s
named executive officers as disclosed in the proxy statement. The Company will consider the
affirmative vote of the holders of a majority of the stock having voting power present in
person or represented by proxy at the Annual Meeting and entitled to vote as approval of
the compensation of the Company’s named executive officers. Abstentions will be counted
as represented and entitled to vote and will have the effect of a negative vote on the proposal.
Broker non-votes, if any, will have no effect. As an advisory vote, this proposal is not
binding. However, our Board and Compensation Committee will consider the outcome of the vote
when making future compensation decisions for the Company’s named executive officers.
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What
is the deadline for submitting proxies?
Proxies
can be submitted until the polls are closed at the Annual Meeting. If you are voting via the Internet prior to the meeting or by telephone,
you must submit your proxy by 11:59 p.m., Eastern Time, the day prior to the Annual Meeting. However, to be sure that the Company receives
your proxy in time to utilize it, please provide your proxy as early as possible.
May
I change or revoke my vote after I return my proxy card?
If
you give us your proxy, you may change or revoke it at any time before the Annual Meeting. You may change or revoke your proxy in any
one of the following ways:
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if
you received a proxy card, by signing a new proxy card with a date later than your previously delivered proxy and submitting it as
instructed above;
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by
re-voting by the Internet or telephone as instructed above;
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by
notifying the Corporate Secretary of TSR in writing before the Annual Meeting that you have revoked your proxy; or
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by
attending the Annual Meeting virtually. Attending the meeting virtually will not in and of itself revoke a previously submitted proxy.
You must specifically request at the meeting that it be revoked.
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Your
most current vote, whether by the Internet or proxy card is the one that will be counted.
How
many shares are required to be present to hold the Annual Meeting?
A
quorum is necessary to hold a valid meeting of stockholders. The presence, in person or by proxy, of a majority of the issued and outstanding
shares of Common Stock entitled to vote as of the Record Date constitutes a quorum at the Annual Meeting. Abstentions will be counted
as shares that are present and entitled to vote for purposes of determining the presence of a quorum with respect to any matter, but
will not be counted as votes in favor of such matter. If a broker holding stock in “street name” indicates on the proxy card
that it does not have discretionary authority as to certain shares to vote on a matter, those shares will not be considered as present
and entitled to vote with respect to that matter.
What
happens if I do not give specific voting instructions?
If
you are a stockholder of record and submit your signed and dated proxy card but do not make specific choices with respect to the proposals,
your proxy will follow the Board’s recommendations and your shares will be voted:
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“FOR”
the election of the Class I Director nominees (Proposal No. 1);
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“FOR”
the approval of an amendment to the Company’s Certificate of Incorporation to declassify
the Board (Proposal No. 2);
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“FOR”
the ratification of the appointment of CohnReznick LLP as the Company’s independent
registered public accounting firm for the fiscal year ending May 31, 2022 (Proposal No. 3);
and
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“FOR”
the approval of the compensation program for the Company’s named executive officers
as described herein (Proposal No. 4).
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If
you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting
instructions then, under applicable rules, the organization that holds your shares may generally vote on “routine” matters
but cannot vote on “non-routine” matters. If the organization that holds your shares does not receive instructions from you
on how to vote your shares on a non-routine matter, that organization will inform the inspector of election that it does not have the
authority to vote on that matter with respect to your shares. This is generally referred to as a “broker non-vote.”
Which
ballot measures are considered “routine” or “non-routine”?
The
approval of an amendment to the Company’s Certificate of Incorporation to declassify the Board (Proposal No. 2) is considered a
non-routine matter under applicable rules. A broker cannot vote without instructions on non-routine matters, and therefore broker non-votes
may exist in connection with this proposal. Broker non-votes will have no effect on this proposal except that they will be deemed as
votes “against” Proposal No. 2.
The
election of directors (Proposal No. 1), the proposal to ratify the appointment of CohnReznick LLP as the Company’s independent
registered public accounting firm for the fiscal year ending May 31, 2022 (Proposal No. 3) and the approval of the compensation program
for the Company’s named executive officers (Proposal No. 4) are considered routine matters under applicable rules. A broker may
generally vote on routine matters, and therefore no broker non-votes are expected to exist in connection with Proposal Nos. 1, 3 and
4.
Who
will count the vote?
All
votes will be tabulated by the inspector of election appointed for the Annual Meeting. The inspector of election will separately tabulate
(i) the affirmative votes, authority withheld and broker non-votes with regard to the election of directors under Proposal No. 1; (ii)
the affirmative votes, negative votes, abstentions and broker non-votes with regard to the approval of an amendment to the Company’s
Certificate of Incorporation to declassify the Board under Proposal No. 2; and (iii) the affirmative votes, negative votes, and abstentions
with regard to the votes to approve the ratification of the appointment of CohnReznick LLP as the Company’s independent registered
public accountants for the fiscal year ending May 31, 2022 under Proposal No. 3 and the compensation program for the Company’s
named executive officers under Proposal No. 4.
When
will the voting results be disclosed?
The
Company will publish voting results in a current report on Form 8-K that we will file with the Securities and Exchange Commission (“SEC”)
within four business days following the Annual Meeting. If on the date of this filing the inspector of election for the Annual Meeting
has not certified the voting results as final, the Company will announce that the results are not final and publish the final results
in a subsequent amended Form 8-K filing within four business days after the final voting results are known.
Whom
should I contact if I have any questions regarding this proxy solicitation?
Generally,
stockholders who have questions or concerns and wish to communicate with the Board should follow the instructions contained under the
section of this Proxy Statement entitled “Stockholder Communications with Directors.”
If
you have questions or require assistance in voting your shares, you should call John G. Sharkey, TSR’s corporate secretary, at
(631) 231-0333.
INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No
director or executive officer, other than in his role as nominee, director or executive officer, associate of any director or executive
officer or any other person has any substantial interest, direct or indirect by security holdings or otherwise, in the matters described
herein which, to the extent such director, executive officer or associate of such director or executive officer is a stockholder of the
Company, is not shared by all other stockholders pro rata and in accordance with their respective stock ownership interests.
PROPOSAL
1 - ELECTION OF DIRECTORS
At
the Annual Meeting, two (2) Class I Directors will be elected for a three-year term expiring at the Company’s 2024 annual stockholder
meeting or until his successor has been elected and qualified.
If
the nominee listed below is unavailable for election at the date of the Annual Meeting, the shares represented by the proxy will be voted
for such nominee as the person or persons designated to vote shall, in their judgment, designate. Management at this time has no reason
to believe that the nominee will not be available or will not serve if elected.
Set
forth below is certain information with respect to the director nominated by the Company.
Name of Director and Nominee for Election
|
|
Age
|
|
|
Nominee
for Class
of Director
|
|
Nominee
for Term
Expiring
|
|
Bradley M. Tirpak
|
|
|
52
|
|
|
Class I
|
|
|
2024
|
|
H. Timothy Eriksen
|
|
|
52
|
|
|
Class I
|
|
|
2024
|
|
Mr.
Bradley M. Tirpak was elected as a Class I director of the Company at the 2018 annual stockholder meeting on October 22,
2019. He was appointed as the Chairman of the Board on December 30, 2019. Mr. Tirpak is a professional investor with more than 25
years of investing experience. Since September 2016, he has served as a portfolio manager and Managing Director at Palm Active
Partners, LLC, a private investment company. From October 2008 to August 2016, Mr. Tirpak served as Managing Member of Locke
Partners, LLC, a private investment company. He also previously served as a portfolio manager at Credit Suisse First Boston, Caxton
Associates, Sigma Capital Management and Chilton Investment Company. Mr. Tirpak served as a director at Applied Minerals, Inc.,
a publicly traded specialty materials company, from April 2015 to March 2017, as a director at Flowgroup plc, a publicly traded
energy supply and services business in the United Kingdom, from June 2017 to October 2018, as a director at Birner Dental
Management Services, Inc., a publicly traded dental service organization, from December 2017 to January 2019, as a director of Full
House Resorts, Inc., a publicly traded hotel and gaming company from December of 2014 to February of 2021, and since October of 2019
as a director of Liberated Syndication Inc., a publicly traded provider of podcast and webhosting services, and since April of 2020
as a director of Barnwell Industries Inc., a publicly traded company engaged in real estate development and oil and gas exploration.
Mr. Tirpak also currently serves as trustee of The HALO Trust, the world’s largest humanitarian mine clearance organization
focused on clearing the debris of war currently operating in over 25 countries. Mr. Tirpak earned a B.S.M.E. from Tufts University
and an M.B.A. from Georgetown University. The Company believes that Mr. Tirpak is a valuable member of the Board due to his
knowledge and experience in investing, capital allocation and corporate governance, as well as his experience serving on the boards
of publicly traded companies.
Mr.
H. Timothy Eriksen was elected as a Class I director of the Company at the 2018 annual stockholder meeting on October 22, 2019.
He was appointed by the Board as the Chairman of the Audit Committee of the Board on December 30, 2019. Mr. Eriksen founded Eriksen Capital
Management, an investment advisory firm (“ECM”), in 2005. Mr. Eriksen is the President of ECM. Mr. Eriksen
is the Chief Executive Officer and Chief Financial Officer of, and since July 2015 has been a director of, Solitron Devices, Inc. (“Solitron”).
Solitron designs, develops, manufactures and markets solid-state semiconductor components and related devices primarily for the
military and aerospace markets. From April 2018 through August 2021, Mr. Eriksen was a director of Novation Companies, Inc. (“Novation”).
Novation owns Healthcare Staffing, Inc., which, among other activities, provides outsourced healthcare staffing and related services.
On August 31, 2021, Mr. Eriksen was elected to the Board of PharmChem, Inc., which offers a sweat patch device to test for drug abuse.
Prior to founding ECM, Mr. Eriksen worked for Walker’s Manual, Inc., a publisher of books and newsletters on micro-cap stocks,
unlisted stocks and community banks. Earlier in his career, Mr. Eriksen worked for Kiewit Pacific Co, a subsidiary of Peter Kiewit
Sons, as an administrative engineer on the Benicia Martinez Bridge project. Mr. Eriksen received a B.A. from The Master’s
University and an M.B.A. from Texas A&M University.
The
Company believes that Mr. Eriksen is a valuable member of the Board based on his strong business and financial background, and his experience
serving in leadership- and management-level roles with responsibility for formulating business and operational strategy.
The
Board unanimously recommends a vote FOR the election of Mr. Tirpak and Mr. Eriksen as Class I Directors to serve until our 2024 annual
stockholder meeting.
Directors
and Executive Officers of the Company
Set
forth below are the names, ages and positions and offices held with the Company of each director and executive officer of the Company.
Directors are currently classified as either Class I, Class II or Class III directors, with each class serving for a term of three (3)
years. The term of Class I directors is set to expire at the 2024 annual stockholder meeting. The term of Class II directors is set to
expire at the 2023 stockholder meeting, and the term of Class III directors is set to expire at the 2022 stockholder meeting. There is
currently no Class III director on the Board. Executive officers serve until such time as their successor is duly elected and qualifies.
Name
|
|
Age
|
|
|
Position
|
|
Year First Officer or Director
|
|
Bradley M. Tirpak(1)(2)(3)(4)
|
|
|
52
|
|
|
Chairman of the Board and Class I Director
|
|
|
2019
|
|
Thomas Salerno
|
|
|
53
|
|
|
Chief Executive Officer, President and Treasurer
|
|
|
2020
|
|
John G. Sharkey
|
|
|
62
|
|
|
Senior Vice President, Chief Financial Officer and Secretary
|
|
|
1990
|
|
H. Timothy Eriksen(1)(2)(3)(4)(5)(7)
|
|
|
52
|
|
|
Class I Director
|
|
|
2019
|
|
Robert Fitzgerald(1)(2)(3)(4)(6)
|
|
|
57
|
|
|
Class II Director
|
|
|
2019
|
|
(1)
|
Member
of the Compensation Committee of the Board.
|
(2)
|
Member
of the Audit Committee of the Board.
|
(3)
|
Member
of the Nominating Committee of the Board.
|
(4)
|
Member
of the Special Committee of the Board.
|
(5)
|
Mr.
Eriksen is the Chairman of the Audit Committee of the Board and the Chairman of the Nominating Committee of the Board.
|
(6)
|
Mr.
Fitzgerald is the Chairman of the Compensation Committee of the Board and the Chairman of the Special Committee of the Board.
|
|
(7)
|
Lead
independent director.
|
There
are no family relationships between any of the Company’s executive officers and directors. None of the Company’s directors
currently serves, or has served during the past five years, as a director of any company with a class of securities registered pursuant
to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an
investment company under the Investment Company Act of 1940. There is no arrangement between any director or director nominee and any
other person pursuant to which he was or is to be selected as a director or director nominee except that Mr. Eriksen and Mr. Tirpak were
nominated by Zeff Capital, L.P. as Class I directors at the Company’s 2018 annual stockholder meeting held on October 22, 2019
in accordance with the terms and conditions of that certain settlement and release agreement, dated August 30, 2019, between the Company
and certain investor parties, including Zeff Capital, L.P., Zeff Holding Company, LLC and Daniel Zeff, QAR Industries, Inc. and Robert
Fitzgerald, and Fintech Consulting, LLC and Tajuddin Haslani (the “Settlement Agreement”). The terms of the Settlement Agreement
are more fully described in the Company’s Current Report on Form 8-K filed with the SEC on September 3, 2019. Mr. Eriksen and Mr.
Tirpak were subsequently elected as directors at the annual stockholder meeting on October 22, 2019.
Biographical
Information
The Company believes that Mr. Tirpak is a valuable member of the Board due to his knowledge and experience in investing, capital allocation
and corporate governance, as well as his experience serving on the boards of publicly traded companies.
Mr.
Bradley M. Tirpak was elected as a Class I director of the Company at the 2018 annual stockholder meeting on October 22, 2019.
He was appointed as the Chairman of the Board on December 30, 2019. Mr. Tirpak is a professional investor with more than 25 years of
investing experience. Since September 2016, he has served as a portfolio manager and Managing Director at Palm Active Partners, LLC,
a private investment company. From October 2008 to August 2016, Mr. Tirpak served as Managing Member of Locke Partners, LLC, a private
investment company. He also previously served as a portfolio manager at Credit Suisse First Boston, Caxton Associates, Sigma Capital
Management and Chilton Investment Company. Mr. Tirpak served as a director at Applied Minerals, Inc., a publicly traded specialty
materials company, from April 2015 to March 2017, as a director at Flowgroup plc, a publicly traded energy supply and services business
in the United Kingdom, from June 2017 to October 2018, as a director at Birner Dental Management Services, Inc., a publicly traded
dental service organization, from December 2017 to January 2019, as a director of Full House Resorts, Inc., a publicly traded hotel and
gaming company from December of 2014 to February of 2021, and since October of 2019 as a director of Liberated Syndication Inc., a publicly
traded provider of podcast and webhosting services, and since April of 2020 as a director of Barnwell Industries Inc., a publicly traded
company engaged in real estate development and oil and gas exploration. Mr. Tirpak also currently serves as trustee of The HALO Trust,
the world’s largest humanitarian mine clearance organization focused on clearing the debris of war currently operating in over
25 countries. Mr. Tirpak earned a B.S.M.E. from Tufts University and an M.B.A. from Georgetown University.
Mr.
H. Timothy Eriksen was elected as a Class I director of the Company at the 2018 annual stockholder meeting on October 22, 2019.
He was appointed by the Board as the Chairman of the Audit Committee of the Board on December 30, 2019. Mr. Eriksen founded Eriksen Capital
Management, an investment advisory firm (“ECM”), in 2005. Mr. Eriksen is the President of ECM. Mr. Eriksen
is the Chief Executive Officer and Chief Financial Officer of, and since July 2015 has been a director of, Solitron Devices, Inc. (“Solitron”).
Solitron designs, develops, manufactures and markets solid-state semiconductor components and related devices primarily for the
military and aerospace markets. From April 2018 through August 2021, Mr. Eriksen was a director of Novation Companies, Inc. (“Novation”).
Novation owns Healthcare Staffing, Inc., which, among other activities, provides outsourced healthcare staffing and related services.
On August 31, 2021, Mr. Eriksen was elected to the Board of PharmChem, Inc., which offers a sweat patch device to test for drug abuse.
Prior to founding ECM, Mr. Eriksen worked for Walker’s Manual, Inc., a publisher of books and newsletters on micro-cap stocks,
unlisted stocks and community banks. Earlier in his career, Mr. Eriksen worked for Kiewit Pacific Co, a subsidiary of Peter Kiewit
Sons, as an administrative engineer on the Benicia Martinez Bridge project. Mr. Eriksen received a B.A. from The Master’s
University and an M.B.A. from Texas A&M University.
The
Company believes that Mr. Eriksen is a valuable member of the Board based on his strong business and financial background, and his experience
serving in leadership- and management-level roles with responsibility for formulating business and operational strategy.
Mr.
Robert Fitzgerald was appointed as a Class II director of the Company by the Board on December 30, 2019. Mr. Fitzgerald is a seasoned
business executive with over 25 years of experience helping companies grow. From 1999 through 2008, he served as the CEO of YDI/Proxim
Wireless, an early pioneer of the wireless networking equipment industry. From 2009 through 2010, he served as a consultant and later
the President of Ubiquiti Networks, now Ubiquiti, Inc. (NYSE: UI), a world leading provider of wireless and non-wireless networking equipment.
He currently serves as the CEO of QAR Industries, Inc., an investment company that holds interests in a portfolio of public and private
companies, primarily the Company and Antenna Products Corporation, a provider of antennas and towers. Mr. Fitzgerald earned a Bachelor
of Arts in Economics and Juris Doctorate from the University of California, Los Angeles.
The
Company believes that Mr. Fitzgerald’s extensive experience in and knowledge of the information technology (“IT”) industry
and career serving in management-level positions for public and private companies make him a valuable member of the Board.
Thomas
Salerno was appointed President, Chief Executive Officer and Treasurer of the Company effective as of March 23, 2020. Since
2011, Mr. Salerno had served as the Managing Director of TSR Consulting Services, Inc., the Company’s IT consulting services subsidiary
and largest business unit. Mr. Salerno has over 20 years of experience in the technology consulting industry. Prior to joining the Company,
Mr. Salerno spent eight years at Open Systems Technology as Associate Director, two years as Vice President of Sales and Recruiting for
Versatech Consulting, and three years as an Account Representative for Robert Half Technologies. Mr. Salerno holds a bachelor’s
degree from Johnson and Wales University.
Mr.
John G. Sharkey was appointed Senior Vice President, Chief Financial Officer and Secretary of the Company effective June 1, 2019.
He had served as the Vice President, Finance, Controller and Secretary of the Company since 1990. Mr. Sharkey received a master’s
degree in Finance from Adelphi University and received his Certified Public Accountant certification from the State of New York. From
1987 until joining the Company in October 1990, Mr. Sharkey was Controller of a publicly held electronics manufacturer. From 1984 to
1987, he served as Deputy Auditor of a commercial bank, having responsibility over the internal audit department. Prior to 1984, Mr.
Sharkey was employed by KPMG LLP as a senior accountant.
Corporate
Governance and Board Matters
The
Company maintains the following committees of the Board: the Audit Committee, the Compensation Committee, the Nominating Committee, and
the Special Committee. Each of these committees is separately described below.
The
Board of Directors currently consists of Bradley M. Tirpak (Chairman), H. Timothy Eriksen and Robert Fitzgerald. Bradley M. Tirpak, H.
Timothy Eriksen and Robert Fitzgerald qualify as “independent directors” under NASDAQ rules.
The
Board also has determined that the current Chair and members of the Audit Committee, H. Timothy Eriksen, Bradley M. Tirpak and Robert
Fitzgerald all meet the requirements of an “audit committee financial expert” as such term is defined in applicable regulations
of the SEC.
During
the fiscal year ended May 31, 2021, the Board met with management weekly, held three meetings and acted by unanimous written consent
on nine occasions; the Audit Committee held five meetings; the Compensation Committee held one meeting; and the Nominating Committee
held one meeting. During the 2021 fiscal year, no director attended fewer than 75% of the aggregate of the total number of meetings of
the Board and the total number of meetings of all committees of the Board of which such director was a member. The Company does not have
a formal policy regarding attendance of directors at the Annual Meeting of Stockholders, but the Company encourages all directors to
attend. All of the directors who served in office on the date of the 2020 annual meeting of stockholders attended the 2020 annual stockholder
meeting.
The
Audit Committee
The
Audit Committee’s current members are H. Timothy Eriksen (Chairman), Bradley M. Tirpak and Robert Fitzgerald. Each of the members
of the Audit Committee is an independent director under the rules of the NASDAQ Capital Market. The Audit Committee’s primary functions
are to assist the Board in monitoring the integrity of the Company’s financial statements and systems of internal control. The
Audit Committee has direct responsibility for the appointment, independence and performance of the Company’s independent auditors.
The Audit Committee is responsible for pre-approving any engagements of the Company’s independent auditors. The Audit Committee
operates under a written charter approved by the Board on September 16, 2004 and amended as of October 10, 2008. A copy of the Audit
Committee Charter is available on the Investor Relations page of the Company’s website at www.tsrconsulting.com.
The
Compensation Committee
The
Compensation Committee’s current members are Robert Fitzgerald (Chairman), H. Timothy Eriksen and Bradley M. Tirpak. Each of the
members of the Compensation Committee is an independent director under the rules of the NASDAQ Capital Market. The Compensation Committee
assesses the structure of the Company’s management team and the overall performance of the Company. It evaluates the performance
of the Company’s executive officers on an annual basis and makes recommendations to the Board regarding salary increases and other
compensation to executive officers. The Board has adopted a written charter for the Compensation Committee, a copy of which is available
on the Investor Relations page of the Company’s website at www.tsrconsulting.com. Under its charter, the Compensation Committee
has authority to retain and approve the fees of independent compensation consultants or other advisors. The Compensation Committee did
not engage an independent compensation consultant during the last fiscal year.
According
to the charter of the Compensation Committee, the Compensation Committee may form subcommittees for any purpose that the Compensation
Committee deems appropriate and may delegate to such subcommittees such power and authority as the Compensation Committee deems appropriate;
provided, however, that no subcommittee shall consist of fewer than two members; and provided further that the Compensation Committee
shall not delegate to a subcommittee any power or authority required by any law, regulation or listing standard to be exercised by the
Compensation Committee as a whole. The Board and the Compensation Committee do not discuss or make decisions regarding an executive officer’s
compensation in the presence of such executive officer. Except for consulting from time to time at the Compensation Committee’s
request with our Chairman regarding annual performance projections and targets, our executive officers, including the named executive
officers, do not have any role in determining the form or amount of compensation paid to our named executive officers.
The
Nominating Committee
The
Nominating Committee’s current members are H. Timothy Eriksen (Chairman), Bradley M. Tirpak and Robert Fitzgerald. Each of the
members of the Nominating Committee is an independent director under the rules of the NASDAQ Capital Market. A copy of the Nominating
Committee Charter is available on the Investor Relations page of the Company’s website at www.tsrconsulting.com. The Nominating
Committee determines the criteria for nominating new directors and recommends to the Board candidates for nomination to the Board. The
Nominating Committee’s process to identify and evaluate candidates for nomination to the Board includes consideration of candidates
for nomination to the Board recommended by stockholders. Such stockholder recommendations must be delivered to the Corporate Secretary
of the Company, together with the information required to be filed in a proxy statement with the Securities and Exchange Commission regarding
director nominees and each such nominee must consent to serve as a director if elected, no later than the deadline for submission of
stockholder proposals as set forth in our Bylaws and under the section of this Proxy Statement entitled “Stockholder Nominations.”
In considering and evaluating such stockholder proposals that have been properly submitted, the Nominating Committee will apply substantially
the same criteria that the Nominating Committee believes must be met by a nominee recommended by the Nominating Committee as described
below.
In
addition, certain identification and disclosure rules apply to director candidate proposals submitted to the Nominating Committee by
any single stockholder or group of stockholders that has beneficially owned more than five percent of the Common Stock for at least one
year (a “Qualified Stockholder Proposal”). If the Nominating Committee receives a Qualified Stockholder Proposal that satisfies
the necessary notice, information and consent provision referenced above, the Proxy Statement will identify the candidate and the stockholder
(or stockholder group) that recommended the candidate and disclose whether the Nominating Committee chose to nominate the candidate.
However, no such identification or disclosure will be made without the written consent of both the stockholder (or stockholder group)
and the candidate to be so identified.
In
evaluating director nominees, the Nominating Committee currently considers the following factors:
|
●
|
the
Company’s needs with respect to the particular talents and experience of our directors;
|
|
●
|
the
knowledge, skills and experience of nominees, including experience in business or finance,
in light of prevailing business conditions and the knowledge, skills and experience already
possessed by other members of the Board;
|
|
●
|
familiarity
with the Company’s business and businesses similar or analogous to that of the Company;
|
|
●
|
experience
with accounting rules and practices and corporate governance principles; and
|
|
●
|
such
other factors as the Nominating Committee deems are in the best interests of the Company
and the best interests of the Company’s stockholders.
|
Qualified
candidates for membership on the Board will be considered without a particular focus on the diversity of the Board’s membership,
and without regard to race, color, creed, religion, national origin, age, gender, sexual orientation or disability.
The
Nominating Committee identifies nominees by first evaluating the current members of the Board willing to continue in service. If any
member of the Board does not wish to continue in service or if the Nominating Committee or the Board decides not to re-nominate a member
for re-election, the Nominating Committee identifies the desired skills and experience of a new nominee, and discusses with the Board
suggestions as to individuals who meet the criteria.
Special
Committee
The
Special Committee’s current members are Robert Fitzgerald (Chairman), H. Timothy Eriksen and Bradley M. Tirpak. Each of the members
of the Special Committee is an independent director under the rules of the NASDAQ Capital Market.
The
Board established the Special Committee by resolution on July 9, 2018, as amended, to review the request submitted by Joseph F.
Hughes and Winifred Hughes that the Board pursue a sale of the Company. Joseph F. Hughes is the former Chairman and Chief Executive Officer
of the Company. At the time of submitting such request to the Board, Joseph F. Hughes and Winifred Hughes beneficially owned approximately
42% of the Company’s outstanding Common Stock. In the context of the Special Committee’s review of the request by Joseph
F. Hughes and Winifred Hughes, the Board charged the Special Committee to consider and evaluate strategic alternatives (“Strategic
Alternatives”) available to the Company, including (a) potential opportunities for a sale of the Company by way of merger, consolidation,
sale of equity securities (including the Company’s outstanding Common Stock), sale of all or substantially all of the Company’s
assets, or other strategic transactions; (b) recapitalization of the Company; (c) the sale or exchange of the shares of Common Stock
held by Mr. Hughes and Mrs. Hughes in a transaction involving the Company; or (d) remaining independent and continuing to execute the
Company’s business plans on a standalone basis or pursuing opportunities to grow through acquisitions, and to review, consider
and evaluate, for purposes of advising the full Board, whether any of the potential Strategic Alternatives is in the best interests of
the Company’s stockholders. The Special Committee is empowered to hire, at the Company’s expense, legal, financial and public
relations advisors to assist the Special Committee in the performance of its duties. The Special Committee does not have a formal written
charter, but is governed in accordance with the authority delegated to it by the Board by resolution as described above.
The
Special Committee has been authorized, with assistance from its legal and financial advisors, to begin approaching certain potential
acquisition candidates, evaluating the merits of and negotiating acquisition target proposals and agreements, and taking other actions
necessary to facilitate the consummation of such a transaction. In carrying out its functions, the Special Committee recommended, and
the Company completed, the acquisition of all of the outstanding stock of Geneva Consulting Group, Inc., a New York corporation (“Geneva”)
and provider of temporary and permanent information technology personnel based in Port Washington, New York on September 1, 2020. While
the Special Committee has shifted its focus to evaluating opportunities of strategic acquisitions, there is no assurance that this decision
will result in any additional acquisitions being announced or consummated in the future or the timing of any such activity.
Governance, Board Leadership Structure and Risk Oversight
The Board does not currently
have a policy on whether the same person should serve as both the Chief Executive Officer and Chairman of the Board. Periodically, our
Board assesses these roles and the board leadership structure to ensure the interests of the Company and its stockholders are best served.
The Chairman and Chief Executive
Officer positions are currently separately held by Bradley M. Tirpak and Thomas Salerno respectively. Our lead independent director is
H. Timothy Eriksen. In that role, he will consider input from all directors as to the preparation of the agendas for meetings of the Board
and each committee of the Board, and will consult, no less frequently than once each calendar quarter, with the Company’s executive
officers who are responsible for assuring compliance with, and implementation of, all applicable corporate and securities laws and make
any recommendations for further action as necessary to ensure such compliance.
As
of the date of this Proxy Statement, we have determined that the leadership structure of our Board of Directors has permitted our Board
to fulfill its duties effectively and efficiently and is appropriate given the size and scope of our Company and its financial condition.
The Company believes the role
of management is to identify and manage risks confronting the Company. The Board plays an integral part in the Company’s risk oversight,
particularly in reviewing the processes used by management to identify and report risk, and also in monitoring corporate actions so as
to minimize inappropriate levels of risk. The Board as a whole is also responsible for overseeing strategic and enterprise risk. A discussion
of risks that the Company faces is conducted at regularly scheduled meetings of the Board and committee meetings.
Each of our directors is a
member of the National Association of Corporate Directors and receives continuing education on governance best practices through participation
in the organization.
Meetings of Independent Directors
Directors who are independent
under the NASDAQ Capital Market listing standards and applicable laws and regulations have not met in separate committee; rather, the
independent directors hold discussions among them without the presence of management in conjunction with meetings of the Audit Committee,
Compensation Committee, Nominating Committee and Special Committee, as they deem necessary. Each of these committees is comprised solely
of independent directors.
Code of Ethics
The Company has adopted a
code of ethics that applies to all of its employees, including the chief executive officer and chief financial and accounting officer.
The code of ethics is available on the Investor Relations page of the Company’s website at www.tsrconsulting.com. The Company intends
to post on its website all disclosures that are required by law or NASDAQ Capital Market listing standards concerning any amendments to,
or waivers from, the Company’s code of ethics. Stockholders may request a free copy of the code of ethics by writing to Corporate
Secretary, TSR, Inc., 400 Oser Avenue, Suite 150, Hauppauge, NY 11788. Disclosure regarding any amendments to, or waivers from, provisions
of the code of ethics that apply to the Company’s directors or principal executive and financial officers will be included in a
Current Report on Form 8-K filed with the SEC within four business days following the date of the amendment or waiver, unless website
posting of such amendments or waivers is then permitted by the rules of the NASDAQ Capital Market and the SEC.
Stockholder Nominations
Under the Company’s
Amended and Restated By-laws, as amended, a stockholder must follow certain procedures to nominate persons for election as directors or
to introduce an item of business at an annual meeting of stockholders. Among other requirements, these procedures require any nomination
or proposed item of business to be submitted in writing to the Company’s Corporate Secretary at its principal executive offices.
The Company must receive the notice of a stockholder’s intention to introduce a nomination or proposed item of business at an annual
meeting no later than 120 days prior to the anniversary of the date on which the Company released its proxy statement (the “Anniversary
Date”) in connection with the prior year’s annual meeting to its stockholders; provided, however, in the event the annual
meeting is scheduled to be held on a date more than 30 days before or after the Anniversary Date, the notice can be received not later
than the close of business on the later of the 75th day prior to the scheduled meeting date or the 15th day following
the day on which the public announcement of such annual meeting is first made by the Company.
Stockholder Communications with Directors
Generally, stockholders who
have questions or concerns should contact the Company’s Corporate Secretary at (631) 231-0333. Any stockholder who wishes to
address questions regarding the Company’s business directly with the Board, or any individual director, should direct his or her
questions, in writing, in care of the Company’s Secretary, at the Company’s offices at 400 Oser Avenue, Suite 150, Hauppauge,
NY 11788. Any complaint, concern or reference to a problem or potential problem with the Company’s accounting, accounting policies,
internal control, auditing or financial matters should be addressed to Accounting Complaints, c/o Chair of the Audit Committee, TSR, Inc.,
400 Oser Avenue, Suite 150, Hauppauge, NY 11788.
Certain Relationships and Related Party Transactions
Except as described below,
the Company was not a participant in any transaction since the beginning of the fiscal year ended May 31, 2021 (“2021 fiscal year”)
in which any related person had a direct or indirect material interest and in which the amount involved exceeded the lesser of $120,000
or 1% of the average of the Company’s total assets at the end of each of the Company’s two prior fiscal years, and no such
transactions are currently proposed.
On January 5, 2021, the members
of the Board of Directors of TSR other than Robert Fitzgerald approved providing a waiver to QAR Industries, Inc. for its contemplated
acquisition of shares owned by Fintech Consulting LLC under the Company’s prior Amended and Restated Rights Agreement so that a
distribution date would not occur as a result of the acquisition. QAR Industries, Inc. and Fintech Consulting LLC were both principal
stockholders of the Company, each owning more than 5% of the Company’s outstanding common stock prior to the consummation of the
acquisition. Robert Fitzgerald is the President and majority shareholder of QAR Industries, Inc. The other directors of the Company are
not affiliated with QAR Industries, Inc.
On February 3, 2021, the acquisition
was completed and QAR Industries, Inc. purchased 348,414 shares of TSR common stock from Fintech Consulting LLC at a price of $7.25 per
share. At the same time, Bradley M. Tirpak, Chairman of TSR, purchased 27,586 shares of TSR common stock from Fintech Consulting LLC at
a price of $7.25 per share.
On April 1, 2020, the Company
entered into a binding term sheet (“Term Sheet”) with Zeff Capital, L.P. (“Zeff”) pursuant to which it agreed
to pay Zeff an amount of $900,000 over a period of three years in cash or cash and stock in settlement of expenses incurred by Zeff during
its solicitations in 2018 and 2019 in connection with the annual meetings of the Company, the costs incurred in connection with the litigation
initiated by and against the Company as well as negotiation, execution and enforcement of the Settlement Agreement. In exchange for certain
mutual releases, the Term Sheet calls for a cash payment of $300,000 on June 30, 2021, a second cash payment of $300,000 on June 30, 2022
and a third payment of $300,00 also on June 30, 2022, which can be paid in cash or common stock at the Company’s option. There is
no interest due on these payments. The $300,000 payment due on June 30, 2021 was paid by the due date. The agreement also has protections
to defer such payment dates so that the debt covenants with the Company’s lender are not breached. On August 13, 2020, the Company,
Zeff, Zeff Holding Company, LLC and Daniel Zeff entered into a settlement agreement to reflect these terms. Any installment payment which
is deferred as permitted above will accrue interest at the prime rate plus 3.75%, and Zeff shall thereby have the option to convert such
deferred amounts (plus accrued interest if any) into shares of the Company’s stock. The Company accrued $818,000, the estimated
present value of these payments using an effective interest rate of 5%, in the quarter ended February 29, 2020, as the events relating
to the expense occurred prior to such date. The first payment of $300,000 was made by the June 30, 2021 due date and the remaining two
payments due June 30, 2022 are expected to be paid by the due date. One is a $300,000 cash payment and the second $300,000 is payable
as cash or common stock at the Company’s option.
Procedures for Approval of Related Party Transactions
Our Board has adopted
a written related party transaction policy to comply with Section 404 of the Exchange Act, which sets forth the policies and procedures
for the review and approval or ratification of related party transactions. This policy covers any transaction, arrangement or relationship,
or any series of similar transactions, arrangements or relationships, in which (i) the Company or any of its subsidiaries is or will
be a participant, (ii) the aggregate amount involved will or may be expected to exceed the lesser of $120,000 or one percent of the average
of the Company’s total assets at year end for the last two completed fiscal years, and (iii) any related party, including an executive
officer, director or nominee for director of the Company, any stockholder owning more than 5% of any class of the Company’s voting
securities, or an immediate family member of any such person, has or will have a direct or indirect material interest. This policy is
administrated by our Audit Committee. According to this policy, in determining whether or not to recommend the initial approval or ratification
of a related party transaction, the Audit Committee shall consider the relevant facts and circumstances available including, among other
factors it deems appropriate, whether the interested transaction is on terms no less favorable than terms generally available to an unaffiliated
third party under the same or similar circumstances and the extent of the related party’s interest in the transaction.
DIRECTOR COMPENSATION
The following table sets forth
information concerning the compensation of the non-officer directors of the Company who served as directors during the fiscal year ended
May 31, 2021. Directors of the Company who also serve as executive officers of the Company are not paid any compensation for their service
as directors. There are currently no executive officers also serving as directors.
Name
|
|
Fees
Earned
Or Paid
In Cash
|
|
|
Stock
Awards (3)
|
|
|
Option
Awards
|
|
|
Non-Equity Incentive
Plan
Compensation
|
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
|
|
All Other
Compensation
|
|
|
Total
|
|
Bradley M. Tirpak (1)
|
|
$
|
20,000
|
|
|
$
|
191,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
211,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
H. Timothy Eriksen (1)
|
|
$
|
20,000
|
|
|
$
|
191,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
211,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Fitzgerald (2)
|
|
$
|
20,000
|
|
|
$
|
191,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
211,000
|
|
(1)
|
Elected to serve as a director of the Company at the annual
meeting of stockholders on October 22, 2019.
|
(2)
|
Appointed to serve as a director of the Company by the Board
on December 30, 2019.
|
(3)
|
Each of the directors were awarded 30,000
unvested shares of common stock, which were issued on January 28, 2021 and are made up of 20,000 time vesting stock awards and 10,000
performance vesting stock awards. The 20,000 shares of common stock under time vesting stock awards fully vest on the applicable vesting
date, so long as the grantee remains a director of the Company. The time vesting stock awards vest as follows: 10,000 shares vest at January
28, 2022, 5,000 shares vest at January 28, 2023 and 5,000 shares vest at January 28, 2024. So long as the grantee remains a director of
the Company, the 10,000 shares of common stock under performance vesting stock awards will fully vest upon the satisfaction of the “performance
condition” defined in the grant agreements, which relates to the market price of the Company’s common stock over a stated
period of time. However, 5,000 shares of common stock under performance vesting stock awards will expire on each of January 28, 2023 and
2024, respectively, if the performance condition is not satisfied. The “performance condition” entails the common stock share
price trading above the applicable share targets of $9.00 and $12.00 for 30 consecutive trading days between the issue date and the expiration
date. If the applicable share target (a) is reached for 30 consecutive days before the vesting date and (b) the stock is above the applicable
share target on the vesting date, the award shares shall vest on the vesting date. If the applicable share target is reached after the
vesting and before the expiration date, the shares vest upon the stock trading for 30 consecutive days above the applicable share target.
|
For their service, members
of the Board who are not officers of the Company received a pro-rated amount of an annual retainer of $10,000, payable quarterly, based
on the period of time they respectively served during fiscal 2021.
Bradley M. Tirpak received
an additional annual retainer of $10,000 for his service as Chairman of the Board during fiscal 2021.
H. Timothy Eriksen received
an additional annual retainer of $10,000 for his service as Chairman of the Audit Committee during fiscal 2021. Mr. Eriksen did not receive
any additional retainer for his service as Chairman of the Nominating Committee of the Board or lead independent director during fiscal
2021.
Robert Fitzgerald received
an additional annual retainer of $10,000 for his service as Chairman of the Compensation Committee during fiscal 2021. Mr. Fitzgerald
did not receive any additional retainer for his service as Chairman of the Special Committee of the Board during fiscal 2021.
EXECUTIVE COMPENSATION
The following table sets forth
information concerning the annual and long-term compensation of the Named Executive Officers (as defined below) for services in all capacities
to the Company for the fiscal years ended May 31, 2021 and 2020. The Named Executive Officers for the fiscal years ended May 31, 2021
and 2020 are (1) Thomas Salerno, our President and Chief Executive Officer; (2) John G. Sharkey, our Senior Vice President and Chief Financial
Officer; and (3) Christopher Hughes, who served as President and Chief Executive Officer prior to his removal effective February 29, 2020
(the “Named Executive Officers”).
SUMMARY COMPENSATION TABLE
Name and Principal Position
|
|
Fiscal
Year
|
|
|
Salary
|
|
|
Bonus
|
|
|
Stock Awards
|
|
|
Option Awards
|
|
|
Non-
Equity
Incentive
Plan Compen-
sation
|
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
|
|
All Other Compensation
|
|
|
Total
|
|
Thomas Salerno,
|
|
|
2021
|
|
|
$
|
350,000
|
|
|
$
|
63,000
|
|
|
$
|
242,000
|
(5)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
12,000
|
(6)
|
|
$
|
667,000
|
|
President and
|
|
|
2020
|
|
|
$
|
317,000
|
(4)
|
|
$
|
25,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3,000
|
(6)
|
|
$
|
345,000
|
|
Chief Executive Officer (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John G. Sharkey,
|
|
|
2021
|
|
|
$
|
310,000
|
|
|
$
|
40,000
|
|
|
$
|
153,000
|
(7)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
6,000
|
(8)
|
|
$
|
509,000
|
|
Senior Vice President and
|
|
|
2020
|
|
|
$
|
295,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
6,000
|
(8)
|
|
$
|
301,000
|
|
Chief Financial Officer (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher Hughes,
|
|
|
2021
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Former President and
|
|
|
2020
|
|
|
$
|
300,000
|
(9)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
727,000
|
(10)
|
|
$
|
1,027,000
|
|
Chief Executive Officer (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Thomas Salerno was appointed as President and Chief Executive Officer of the Company effective March 23, 2020 and served as Acting CEO of the Company from January 27, 2020 to March 23, 2020 due to a leave of absence by Mr. Hughes during this time. He has also served as the Managing Director of TSR Consulting Services, Inc., the Company’s IT consulting services subsidiary and largest business unit, in fiscal year 2020.
|
(2)
|
John G. Sharkey was appointed as Senior Vice President and Chief Financial Officer effective June 1, 2019. Previously, Mr. Sharkey served as Vice President, Finance.
|
(3)
|
Christopher Hughes served as President and Chief Executive Officer of the Company in the 2019 fiscal year and a portion of the 2020 fiscal year until he was removed from his officer positions effective February 29, 2020.
|
(4)
|
Represents the sum of the pro-rated amount of an annual base salary of $300,000 for the period from June 1, 2019 to January 26, 2020 and the pro-rated amount of an annual base salary of $350,000 for the period beginning on January 27, 2020.
|
(5)
|
Represents 40,000 unvested shares of common stock under time and performance vesting stock awards, issued on January 28, 2021, to Mr. Salerno. See a detailed description of the awards below under “Outstanding Equity Awards at Fiscal Year End”.
|
(6)
|
Amount related to Mr. Salerno’s personal use of an automobile provided by the Company.
|
(7)
|
Represents 25,000 unvested shares of common stock under time and performance vesting stock awards, issued on January 28, 2021, to Mr. Sharkey. See a detailed description of the stock awards below under “Outstanding Equity Awards at Fiscal Year End”.
|
(8)
|
Amounts related to Mr. Sharkey’s personal use of an automobile provided by the Company.
|
(9)
|
Represents the pro-rated amount of an annual base salary of $400,000 for the period ended on February 29, 2020.
|
(10)
|
Of this amount, $4,000 related to Mr. Christopher Hughes’ personal use of an automobile provided by the Company for the period ended on February 29, 2020; $18,000 was paid to Mr. Christopher Hughes for premiums for medical insurance benefits for the period ended on February 29, 2020; and $705,000 was paid to Mr. Hughes related to his separation from the Company in February 2020, which was the subject of litigation that settled on October 1, 2021.
|
Outstanding Equity Awards at Fiscal Year End
In October of 2020, the Company adopted the TSR,
Inc. 2020 Equity Incentive Plan (“the Plan”) which was subsequently approved by the Shareholders at the combined 2019 and
2020 Annual Meeting held on November 19, 2020. The Plan allows for a maximum of 200,000 shares in the form of non-qualified stock options,
incentive stock options, restricted awards, stock appreciation rights, cash awards, performance share awards and other equity based awards
to employees, consultants, directors and those individuals whom the Board determines are reasonably expected to become employees, consultants
or directors following the date of grant. The table below sets forth the outstanding equity awards issued under the Plan as of May 31,
2021 with respect to the Named Executive Officers.
|
|
Option
Awards
|
|
|
Stock
Awards
|
|
Name
|
|
Number of
securities
underlying
unexercised
options
(#)
exercisable
|
|
|
Number of
securities
underlying
unexercised
options
(#)
unexercisable
|
|
|
Equity incentive
plan
awards:
Number of
securities
underlying
unexercised
unearned options
(#)
|
|
|
Option
exercise
price
($)
|
|
|
Option expirat-
ion
date
|
|
|
Number
of shares
or units
of stock
that have
not
vested
(#)
|
|
|
Market
value of
shares or
units of
stock that
have not
vested
($)
|
|
|
Equity incentive
plan awards:
Number of
unearned shares,
units or other
rights that have
not vested
(#)
|
|
|
Equity incentive plan
awards:
Market or payout
value of unearned
shares, units or
other rights that
have not vested
($)
|
|
Thomas Salerno
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13,333
|
(1)(2)
|
|
$
|
108,131
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,000
|
(1)(3)
|
|
$
|
40,550
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,000
|
(1)(4)
|
|
$
|
40,550
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,333
|
(5)(3)
|
|
$
|
67,581
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,334
|
(5)(4)
|
|
$
|
67,589
|
|
John G. Sharkey
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,333
|
(1)(2)
|
|
$
|
67,581
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,333
|
(1)(3)
|
|
$
|
27,031
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,334
|
(1)(4)
|
|
$
|
27,039
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,000
|
(5)(3)
|
|
$
|
40,550
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,000
|
(5)(4)
|
|
$
|
40,550
|
|
(1)
|
Representing shares of common stock under time vesting stock awards, issued on January 28, 2021, which fully vest on the applicable vesting date, so long as the grantee remains an employee of the Company.
|
(2)
|
The vesting date for these shares is January 28, 2022.
|
(3)
|
The vesting date for these shares is January 28, 2023.
|
(4)
|
The vesting date for these shares is January 28, 2024.
|
(5)
|
Representing shares of common stock under performance vesting stock awards, issued on January 28, 2021, which, so long as the grantee remains an employee of the Company, will (i) fully vest upon the satisfaction of the “performance condition” defined in the grant agreements, which relates to the market price of the Company’s common stock over a stated period of time, and (ii) expire on January 28, 2023 and 2024, respectively, if the performance condition is not satisfied. The “performance condition” entails the common stock share price trading above the applicable share target for 30 consecutive trading days between the issue date and the expiration date. If the applicable share target (a) is reached for 30 consecutive days before the vesting date and (b) the stock is above the applicable share target on the vesting date, the award shares shall vest on the vesting date. If the applicable share target is reached after the vesting and before the expiration date, the shares vest upon the stock trading for 30 consecutive days above the applicable share target.
|
Employment Agreements and Arrangements
On November 3, 2020, TSR entered into an Employment
Agreement with its Chief Executive Officer, Thomas C. Salerno (the “CEO Employment Agreement”) and an Amended and Restated
Employment Agreement with its Chief Financial Officer, John Sharkey (the “CFO Employment Agreement”, collectively with the
CEO Employment Agreement, the “Employment Agreements”), both effective as of November 2, 2020. The CFO Employment Agreement
superseded the Amended and Restated Employment Agreement dated May 24, 2019 between the Company and Mr. Sharkey in its entirety.
Employment Term and Position. The term
of employment of each of Messrs. Salerno and Sharkey will be three years from November 2, 2020 to November 2, 2023, and any continued
employment will be on an “at-will” basis. During their respective terms of employment, Mr. Salerno will serve as Chief Executive
Officer of the Company and Mr. Sharkey will serve as Chief Financial Officer of the Company.
Base Salary, Annual Bonus Equity Compensation
and Other Benefits. Pursuant to their Employment Agreements, Messrs. Salerno and Sharkey are entitled to annual base salaries of $350,000
and $310,000, respectively, as may be adjusted by the Board. In addition, Messrs. Salerno and Sharkey will be eligible to receive annual
cash bonuses up to 35% and 25% of their respective base salaries, respectively, based on the Company’s financial information and
established by the Board, upon the condition that Messrs. Salerno and Sharkey are active employees on the last day of the related fiscal
year and there are no publicly reportable audit findings for the fiscal year. Any annual bonus will be paid in two installments, i.e.,
50% of the estimated annual bonus will be advanced within 30 days of the end of the fiscal year and the balance equal to the final annual
bonus determined by the Board minus the estimate advanced after the filing of the Company’s 10-K for the fiscal year. Messrs. Salerno
and Sharkey will also be eligible to receive equity awards under the Company’s equity incentive plan, certain benefits including
vacation, group medical health, group insurance and similar benefits, a monthly car allowance of $1,800 and $800, respectively, and reimbursement
of approved business expenses.
Termination Entitlement and Severance.
In the event that the Company terminates Mr. Salerno or Mr. Sharkey’s employment (a) for “Cause” (as defined in their
Employment Agreements) or (b) upon Mr. Salerno or Mr. Sharkey’s death or disability or, (c) if Mr. Salerno or Mr. Sharkey terminates
his employment for any reason other than due to material breach by the Company as described in scenario (y) below, then the Company’s
sole obligations to Mr. Salerno or Mr. Sharkey shall be: (i) the payment of any accrued but unpaid base salary, (ii) the payment of any
approved but not reimbursed business expenses and (iii) compliance with the Company’s benefits plans (collectively, the “Termination
Entitlement”). If Mr. Salerno or Mr. Sharkey is terminated for “Cause” or resigns for any reason prior to the date the
annual bonus is paid out in its entirety, he shall forfeit any and all annual bonus including returning any advanced bonus portion paid.
In the event that (x) the Company terminates Mr.
Salerno or Mr. Sharkey’s employment for reasons other than the above-enumerated reasons and in Mr. Sharkey’s case, if he is
forced to relocate more than 25 miles from his current residence and he resigns due to this reason, both subject to the Company or its
affiliate’s offer of comparable employment meeting certain conditions or, (y) Mr. Salerno or Mr. Sharkey provides notice to the
Company of its material breach of its obligations under his Employment Agreement and the Company fails to cure such breach within the
required period of time, in addition to the Termination Entitlement, Mr. Salerno or Mr. Sharkey will be entitled to a severance payment
consisting of (i) one year of base salary, (ii) one year of car allowance and (iii) 50% of the annual bonus awarded in the fiscal year
prior to the employee’s termination if his employment is terminated without Cause (collectively, the “Severance Payment”)
as well as a health benefit comprising continued participation in the Company’s group health plan for one year for Mr. Salerno and
until March 31, 2025 for Mr. Sharkey, respectively, subject to certain conditions provided in their respective Employment Agreements (the
“Health Benefit”).
If, prior to the expiration of their respective
term of employment and within 12 months following a Change in Control (as defined in their Employment Agreements), Mr. Salerno or Mr.
Sharkey is subject to termination other than for Cause, then the Company will pay “Change in Control Severance Benefits” consisting
of (i) a payment equivalent to one year of base salary (as in effect immediately prior to the Change in Control, or the date of the termination
of the employee’s employment, whichever is greater), (ii) 100% of the employee’s annual bonus as paid in the previous year,
(iii) taxable cash payments for COBRA coverage for 18 months and (iv) acceleration of vesting of 100% of the employee’s unvested
equity award compensation.
Pursuant to the Employment Agreements, the Company’s
obligation to pay any Severance Payment, Health Benefit, Change in Control Severance Benefits (collectively, “Severance Payments”)
or any related benefits to which Mr. Salerno or Mr. Sharkey is not automatically entitled under the law will be subject to the employee’s
execution of an effective release of claims in favor of the Company, its affiliates and their related persons, in a form to be provided
by the Company. In addition, in the event that Mr. Salerno or Mr. Sharkey breaches the restrictive covenants under his Employment Agreement,
any remaining Severance Payments due to him will be forfeited.
Restrictive Covenants. Pursuant to their
respective Employment Agreements, Messrs. Salerno and Sharkey are subject to certain restrictive covenants including (i) protection of
confidential information, (ii) non-disparagement, (iii) non-solicitation of employees for a period of 24 months after the termination
of employment, (iv) noncompetition for a period of 12 months after the termination of employment and (v) non-solicitation of the Company’s
clients for a period of 24 months after the termination of employment.
Anti-Hedging Policy
Our
Insider Trading Policy prohibits our directors, officers, certain employees and their immediate family members or entities under their
control, from engaging in the following transactions involving the Company’s securities: short sales, options trading, trading on
margin or pledging and hedging, unless approved in advance by our Chief Financial Officer.
STOCK OWNERSHIP INFORMATION
Securities Authorized for Issuance Under Equity
Compensation Plans
The following table presents information with
respect to the Plan as of May 31, 2021:
Plan Category
|
|
Number of securities to
be issued upon
exercise of outstanding
options, warrants and
rights (1)
(a)
|
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
|
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
(c)
|
|
Equity compensation plans approved by security holders
|
|
|
-
|
|
|
$
|
-
|
|
|
|
22,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans not approved by security holders
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
|
-
|
|
|
|
-
|
|
|
|
22,500
|
|
|
(1)
|
The securities available under the Plans for issuance
and issuable pursuant to exercises of outstanding options may be adjusted in the event of a change in outstanding stock by reason of
stock dividend, stock splits, reverse stock splits, etc.
|
Principal Stockholders and Security Ownership
of Management
The outstanding voting stock
of the Company as of October 20, 2021 consisted of 1,962,062 shares of Common Stock. The table below sets forth the beneficial ownership
of the Common Stock of the Company’s directors, executive officers and persons known to the Company to be the beneficial owner of
more than five percent (5%) of the outstanding shares of Common Stock as of October 20, 2021:
|
|
Beneficial Ownership of
Common Stock
|
|
Name of Beneficial Owner – Directors, Officers and 5% Stockholders
|
|
No. of
Shares (1)
|
|
|
Percent of
Class
|
|
Bradley M. Tirpak (2)(3)
|
|
|
43,446
|
(4)
|
|
|
2.2
|
%
|
H. Timothy Eriksen (2)(3)
|
|
|
-
|
(5)
|
|
|
-
|
|
Thomas Salerno (2)(6)
|
|
|
-
|
|
|
|
-
|
|
John G. Sharkey (2)(7)
|
|
|
6,750
|
|
|
|
0.3
|
%
|
Robert Fitzgerald (2)(3)(8)
|
|
|
518,884
|
(9)
|
|
|
26.4
|
%
|
Philip J. LaBlonde (10)
|
|
|
135,000
|
|
|
|
6.9
|
%
|
QAR Industries, Inc. (8)
|
|
|
498,884
|
|
|
|
25.4
|
%
|
Zeff Capital, L.P. (11)
|
|
|
437,774
|
|
|
|
22.3
|
%
|
Zeff Holding Company, LLC (11)
|
|
|
437,774
|
(12)
|
|
|
22.3
|
%
|
Daniel Zeff (11)
|
|
|
437,774
|
(12)
|
|
|
22.3
|
%
|
All Directors and Executive Officers as a Group (5 persons)
|
|
|
569,080
|
|
|
|
29.0
|
%
|
(1)
|
In accordance with Rule 13d-3 of the Exchange Act, a person is deemed to be the beneficial owner, for purposes of this table, of any shares of the Company’s Common Stock if such person has voting or investment power with respect to such shares. This includes shares of Common Stock (a) subject to options exercisable within sixty (60) days, and (b) (1) owned by a person’s spouse, (2) owned by other immediate family members who share a household with such person, or (3) held in trust or held in retirement accounts or funds for the benefit of the such person, over which shares the person named in the table may possess voting and/or investment power. Unless otherwise stated herein, each beneficial owner has sole voting power and sole investment power.
|
(2)
|
This executive officer and/or director maintains a mailing address at 400 Oser Avenue, Suite 150, Hauppauge, New York 11788.
|
(3)
|
Such person currently serves as a director of the Company.
|
(4)
|
Based on the Form 4 filed by Bradley M. Tirpak with the SEC on May 28, 2021. The amount does not include 30,000 unvested restricted stock awards.
|
(5)
|
The amount does not include 30,000 unvested restricted stock awards.
|
(6)
|
Mr. Thomas Salerno served as the Managing Director of TSR Consulting Services, Inc., the Company’s IT consulting services subsidiary and largest business unit, since 2011. He was appointed as President and Chief Executive Officer of the Company effective March 23, 2020 and served as Acting CEO of the Company from January 27, 2020 to March 23, 2020. The amount does not include 40,000 unvested restricted stock awards.
|
(7)
|
John G. Sharkey served as the Vice President, Finance, Controller and Secretary of the Company until June 1, 2019. Effective June 1, 2019, Mr. Sharkey was appointed Senior Vice President, Chief Financial Officer and Secretary of the Company. The amount does not include 25,000 unvested restricted stock awards.
|
(8)
|
Based on the Form 4 filed by Robert Fitzgerald with the SEC on June 17, 2021. Robert Fitzgerald is the President of QAR Industries, Inc. and the reporting persons maintain a mailing address at 101 SE 25th Avenue, Mineral Wells, Texas 76067. The amount does not include 30,000 unvested restricted stock awards.
|
(9)
|
Represents the same shares owned by QAR Industries, Inc.
|
(10)
|
Based on a Schedule 13D filed by Philip J. LaBlonde with the SEC on August 12, 2016. Based on the Schedule 13D, Philip J. LaBlonde maintains a mailing address at 15120 Honors Circle, Carmel, Indiana 46033.
|
(11)
|
Based on an Amendment to Schedule 13D filed by Zeff Capital, L.P., Zeff Holding Company, LLC and Daniel Zeff with the SEC on August 17, 2020. Based on the Amendment to Schedule 13D, Zeff Capital, L.P. is the owner of the 437,774 shares reported on the Amendment; Zeff Holding Company, LLC is the general partner of Zeff Capital, L.P.; Daniel Zeff is the sole manager of Zeff Holding Company, LLC; and all of the reporting persons maintain a mailing address at 885 Sixth Avenue, New York, New York 10001.
|
(12)
|
Represents the same shares owned by Zeff Capital, L.P.
|
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange
Act requires the Company’s officers and directors and persons who beneficially own more than ten percent of a registered class of
the Company’s equity securities to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater
than ten percent stockholders are required by regulation of the SEC to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review
of the copies of such forms received by it, or written representations from certain reporting persons that no Forms 5 were required for
those persons, the Company believes that all of its officers, directors and greater than ten percent beneficial owners complied with all
filing requirements applicable to them with respect to reports required to be filed by Section 16(a) of the Exchange Act during the fiscal
year ended May 31, 2021.
PROPOSAL 2 – APPROVAL OF AN AMENDMENT
TO OUR CERTIFICATE OF INCORPORATION TO DECLASSIFY THE BOARD
The Company’s Certificate
of Incorporation, as amended (“Certificate of Incorporation”) provides for a classified board of directors divided into three
classes of directors serving staggered terms of three years each. The terms of one class expire at each annual stockholder meeting. The
Company originally adopted a classified Board to provide stability and continuity of directors and to encourage a long-term perspective
from the Board.
As part of the Board’s
ongoing evaluation of the corporate governance structures and practices of the Company and in response to feedback from certain of our
stockholders, the Board considered the benefits and detriments of a classified Board versus a declassified Board with all directors serving
terms of only one year each. While classified or staggered boards have had a long and prominent history, in recent years there has been
investor concern that classified boards may have the effect of reducing the accountability of directors to stockholders. Because directors
serve terms of multiple years, classified boards limit the ability of stockholders to evaluate and elect all directors on an annual basis.
Election of directors is a primary means for stockholders to influence corporate governance policies and to hold directors accountable
for implementing those policies. In addition, opponents of classified boards assert that a classified board discourages proxy contests
in which stockholders have an opportunity to vote for a competing slate of nominees and, therefore, can potentially erode stockholder
value. As a result, it has become an emerging governance best practice that all directors be elected on an annual basis. Annually elected
boards are perceived by many investors as increasing the accountability of directors to stockholders and, accordingly, increasing stockholder
value.
After carefully weighing these
considerations, the Board has determined that it is in the best interests of the Company and our stockholders to declassify the Board
and on October 13, 2021, adopted, subject to stockholder approval, an amendment to the Company’s Certificate of Incorporation to
declassify the Board beginning at the 2022 annual stockholder meeting (“Amendment”). The general description of the Amendment
set forth below is a summary only and is qualified in its entirety by, and subject to, the full text of the proposed Amendment, which
is attached as Annex A to this proxy statement.
Under the proposed Amendment,
the annual election of directors will be phased in gradually to assure a smooth transition. The Amendment to the Company’s Certificate
of Incorporation would not change the unexpired three-year terms of directors elected prior to the effectiveness of the Amendment (including
any director to be elected at the Annual Meeting). Rather, the current three-year terms for each class of directors will continue, and
those directors or their successors will only become eligible for a one-year election term upon expiration of that term. The three-year
term for our Class I directors elected at the 2021 annual stockholder meeting will expire at the 2024 annual stockholder meeting; and
the three-year term for our Class II director elected at the 2020 annual stockholder meeting will expire at the 2023 annual stockholder
meeting. There is currently no Class III director on the Board. Upon the expiration of each Class’s current three-year term, those
directors or the successors thereto will be elected to the Board for one-year terms. Thus, beginning with the 2022 annual stockholder
meeting, those directors nominated for election will be elected to the Board for a one-year term. Directors appointed to fill any newly
created directorships resulting from an increase in the number of directors or any vacancies on the Board would serve until the next annual
stockholder meeting. This phased-in approach will result in the discontinuation of our classified Board, and all directors being nominated
annually for one-year terms, by the 2024 annual stockholder meeting.
Pursuant to the Company’s
Certificate of Incorporation, the affirmative vote of not less than two-thirds of the voting power of the then outstanding shares of common
stock is required to adopt the proposed Amendment. Accordingly, abstentions and broker non-votes will have the same effect as votes against
the proposal. If the stockholders approve the proposed Amendment, the Amendment to the Company’s Certificate of Incorporation will
become effective upon the filing of a Certificate of Amendment to the Company’s Certificate of Incorporation with the Delaware Secretary
of State, which the Company expects to file promptly after the Annual Meeting. If the proposed Amendment is not approved, the Board will
remain classified.
The Board has also approved
a conforming amendment to Article III, Section 2 of the Amended and Restated Bylaws of the Company, as amended (“Bylaws”),
relating to the Company’s current classified board structure, to implement the declassification of the Board. The full text of the
proposed amendment to the Bylaws is attached as Annex B to this proxy statement. Stockholders are not being asked to vote on the proposed
amendment to the Bylaws, however, such amendment will not take effect unless stockholders approve the proposed declassification amendment
to the Company’s Certificate of Incorporation.
The Board unanimously recommends
a vote FOR an amendment to our Certificate of Incorporation to declassify the Board.
PROPOSAL 3 – RATIFICATION OF APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Relationship with Independent Registered Public Accountants
CohnReznick LLP has been appointed
by the Company’s Audit Committee and Board as the independent registered public accounting firm for the Company to audit and report
on the Company’s consolidated financial statements for the fiscal year ending May 31, 2022. CohnReznick LLP audited and reported
on the Company’s consolidated financial statements for the year ended May 31, 2021. The Company expects that a representative of
CohnReznick LLP will be present at the Annual Meeting with an opportunity to make a statement if he or she desires to do so and will be
available to respond to appropriate questions. The appointment of CohnReznick LLP as the Company’s independent registered public
accounting firm will be ratified if it receives the affirmative vote of the holders of a majority of shares of the Company’s Common
Stock present at the Annual Meeting, in person or by proxy. Submission of the appointment of the independent registered public accounting
firm to the stockholders for ratification will not limit the authority of the Audit Committee and Board to appoint another accounting
firm to serve as the independent registered public accounting firm if the present accountants resign or their engagement is otherwise
terminated. If the stockholders do not ratify the appointment of CohnReznick LLP at the Annual Meeting, the selection of CohnReznick LLP
may be reconsidered by the Audit Committee and Board.
Policy on Audit Committee Pre-Approval of Services of Independent
Registered Public Accounting Firm
The Audit Committee is responsible
for approving the engagement of the Company’s independent registered public accounting firm to render audit or non-audit services
prior to the engagement of the accountants to render such services. In recognition of this responsibility, the Audit Committee pre-approves
all audit and permissible non-audit services provided by the independent registered public accounting firm (subject to the de minimus
exception for non-audit services described in Section 10A of the Exchange Act that are approved by the Audit Committee prior to completion
of the audit) including the following four categories of services:
Audit services include
audit work performed in the audit of the annual financial statements, review of quarterly financial statements, reading of annual, quarterly
and current reports, as well as work that generally only the independent auditor can reasonably be expected to provide.
Audit-related services are
for assurance and related services that are traditionally performed by the independent auditor, including the provision of consents and
comfort letters in connection with the filing of registration statements, due diligence related to mergers and acquisitions and special
procedures required to meet certain regulatory requirements.
Tax services consist
principally of assistance with tax compliance and reporting, as well as certain tax planning consultations.
Other services are
those associated with services not captured in the other categories. We generally do not request such services from our independent auditor.
The Audit Committee generally
pre-approves particular services or categories of services on a case-by-case basis. The independent registered public accounting firm
and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent
registered public accounting firm in accordance with these pre-approvals, and the fees for the services performed to date.
The Audit Committee may delegate
pre-approval authority to one or more of its members. Such member(s) shall report to the full Audit Committee at each scheduled meeting
whether such member(s) pre-approved any audit or non-audit services.
All of the fees below were
pre-approved by the Audit Committee.
Fees for Independent Registered Public Accounting Firm
Audit Fees
The aggregate fees billed
by CohnReznick LLP for professional services related to the audit of the Company’s consolidated financial statements and the review
of the consolidated condensed financial statements included in the Company’s quarterly reports on Form 10-Q for the fiscal years
ended May 31, 2021 and 2020 were $102,000 and $78,000, respectively.
Audit Related Fees
In the fiscal year ended May
31, 2021, fees billed by CohnReznick for audit-related services were $24,000 related to the acquisition of Geneva Consulting Group, Inc.
There were no fees billed by CohnReznick LLP for audit related services for the fiscal year ended May 31, 2020.
Tax Fees
There were no fees billed
by CohnReznick LLP for tax services during the fiscal years ended May 31, 2021 or 2020.
All Other Fees
There were no fees billed
by CohnReznick LLP related to any other non-audit services for the fiscal years ended May 31, 2021 or 2020.
The Board unanimously recommends
a vote FOR the approval of the ratification of the appointment of CohnReznick LLP as the Company’s independent registered public
accountants for the fiscal year ending May 31, 2022.
Audit Committee Report – 2021 Fiscal Year
The Audit Committee has reviewed
and discussed the Company’s audited consolidated financial statements for the Company’s 2021 fiscal year with the Company’s
management. The Audit Committee has separately discussed with CohnReznick LLP, the Company’s independent registered public accounting
firm for the 2021 fiscal year, the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees,
as adopted by the Public Company Accounting Oversight Board.
The Audit Committee has also
received the written disclosures and the letter from CohnReznick LLP required by applicable requirements of the Public Company Accounting
Oversight Board regarding the independent registered public accountant’s communications with the Audit Committee concerning independence,
and the Audit Committee has discussed with CohnReznick LLP the independence of that firm from the Company.
Based on the Audit Committee’s
review and discussions noted above, the Audit Committee recommended to the Board that the Company’s audited consolidated financial
statements be included in the Company’s Annual Report on Form 10-K for the Company’s 2021 fiscal year for filing with the
SEC.
Members of the Audit Committee
H. Timothy Eriksen, Chairman
|
|
Bradley M. Tirpak
|
|
Robert Fitzgerald
|
PROPOSAL 4 – ADVISORY VOTE ON EXECUTIVE
COMPENSATION
Section 14A of the Exchange
Act and the rules and regulations promulgated thereunder provide that, not less frequently than once every three years, an issuer shall
include in its proxy statement for its annual meeting of stockholders an advisory resolution subject to a stockholder vote to approve
the compensation of the Company’s named executive officers. Accordingly, you are asked to approve the compensation of
the Company’s named executive officers as described under the heading “Executive Compensation” in this proxy statement,
including the compensation tables and the related narrative discussion, by voting in favor of the following advisory resolution:
“RESOLVED, that
the stockholders of TSR, Inc. approve the compensation of the Named Executive Officers as discussed and disclosed pursuant to Item 402
of Regulation S-K, including the compensation tables and narrative discussion.”
Under the rules and regulations
of the SEC, your vote is advisory and will not be binding upon the Company or the Board and will not be construed to overrule any decision
by the Company or the Board or require the Board to take any action. However, the Compensation Committee and the Board will
take the outcome of this advisory vote into consideration when considering future compensation arrangements for the Company’s named
executive officers and whether any adjustments or modifications are warranted.
The Board unanimously recommends
a vote FOR the approval, on a non-binding advisory basis, of the compensation of our named executive officers, as described in the “Executive
Compensation” section of this proxy statement.
OTHER INFORMATION
Stockholder Proposals for Next Annual Meeting
Any proposal by a stockholder
of the Company intended to be presented at the 2022 annual stockholder meeting must be received by the Company at its principal executive
office not later than July 7, 2022, which is 120 days prior to the anniversary of the date on which the Company released its proxy statement
in connection with the prior year’s annual meeting to its stockholders (the “Anniversary Date”), for inclusion in the
Company’s proxy statement and form of proxy relating to that meeting. Pursuant to the Company’s Amended and Restated By-laws,
as amended, the Company must receive the notice of a stockholder’s intention to introduce a nomination or proposed item of business
at an annual meeting no later than the Anniversary Date; provided, however, in the event the annual meeting is scheduled to be held on
a date more than 30 days before or after the Anniversary Date, the notice can be received not later than the close of business on the
later of the 75th day prior to the scheduled meeting date or the 15th day following the day on which the public
announcement of such annual meeting is first made by the Company. The Company is releasing its proxy statement for the Annual Meeting
to its stockholders on November 4, 2021. Any such proposal must also comply with the other requirements of the proxy solicitation rules
of the SEC.
Form 10-K Annual Report
The Annual Report for the
fiscal year ended May 31, 2021 is enclosed with this Proxy Statement. IN ADDITION, UPON WRITTEN REQUEST BY ANY STOCKHOLDER ENTITLED TO
VOTE AT THE ANNUAL MEETING, THE COMPANY WILL FURNISH THAT PERSON, WITHOUT CHARGE, WITH A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED MAY 31, 2021, INCLUDING AMENDMENT NO. 1 ON FORM 10-K/A TO THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED MAY 31, 2021, WHICH IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES
THERETO. IN THE EVENT THAT EXHIBITS TO SUCH FORM 10-K ARE REQUESTED, A FEE WILL BE CHARGED FOR REPRODUCTION OF SUCH EXHIBITS. If the person
requesting the report was not a stockholder of record on October 27, 2021, the request must contain a good faith representation that the
person making the request was a beneficial owner of the Company’s stock at the close of business on such date. Requests should be
addressed to Mr. John G. Sharkey, Secretary, TSR, Inc., 400 Oser Avenue, Suite 150, Hauppauge, NY 11788.
Householding
The Company has adopted a
procedure called “householding,” which has been approved by the SEC. Under this procedure, the Company is delivering only
one copy of the Annual Report and Proxy Statement to multiple stockholders who share the same mailing address and have the same last name,
unless the Company has received contrary instructions from an affected stockholder. This procedure reduces the Company’s printing
costs, mailing costs and fees. Stockholders who participate in householding will continue to receive separate proxy cards.
The Company will deliver promptly
upon written or oral request a separate copy of the Annual Report and the Proxy Statement to any stockholder at a shared address to which
a single copy of either of those documents was delivered. To receive a separate copy of the Annual Report or Proxy Statement, you may
write to Mr. John G. Sharkey, Secretary, TSR, Inc., 400 Oser Avenue, Suite 150, Hauppauge, NY 11788, or call (631) 231-0333.
Other Business Solicitation and Expenses of Solicitation
The Board does not know of
any other matters to be brought before the Annual Meeting, except those set forth in the notice thereof. If other business is properly
presented for consideration at the Annual Meeting, it is intended that the proxies will be voted by the persons named therein in accordance
with their judgment on such matters.
The cost of preparing this
Proxy Statement and all other costs in connection with this solicitation of proxies for the Annual Meeting are being borne by the Company.
In addition to solicitation by mail, the Company’s directors, officers, and regular employees, without additional remuneration,
may solicit proxies by telephone, e-mail, facsimile and personal interviews. Brokers, custodians, and fiduciaries will be requested to
forward proxy soliciting material to the beneficial owners of Common Stock held in their names, and the Company will reimburse them for
their out-of-pocket expenses incurred in connection with the distribution of proxy materials.
Forward-Looking Statements
Certain statements in this
Proxy Statement which are not historical facts may constitute “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended. Words such as “anticipate,” “believe,” “demonstrate,”
“estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “plan,”
“should,” and “will,” and similar expressions identify forward-looking statements. Such forward-looking statements
are based upon the Company’s current plans, estimates and expectations and are not a representation that such plans, estimates,
or expectations will be achieved. Specifically, forward-looking statements in this document may include, but are not limited to, the statements
concerning any potential or pending investigation, litigation or transaction and its potential impact on the Company or its profitability.
These and other forward-looking statements involve known and unknown risks, uncertainties and other factors that are difficult to predict
and which may cause the actual events to differ materially from the expectations, intentions, beliefs, plans or predictions of the future
expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, among others, the factors
and matters described in the Company’s filings with the SEC, including, but not limited to, the Company’s most recent Form
10-K, Forms 10-Q and Forms 8-K, which are available at www.sec.gov. The forward-looking statements included in this Proxy Statement are
made only as of the date of this Proxy Statement and we do not undertake any obligation to publicly update any forward-looking statements
to reflect subsequent events or circumstances, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date hereof.
Your cooperation in giving these matters your immediate attention and
in returning your proxies will be appreciated.
|
By Order of the Board of Directors,
|
|
|
|
John G. Sharkey, Secretary
|
|
November 4, 2021
|
Appendix A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
TSR, INC.
[_______] [__], 2021
TSR, Inc. (the “Corporation”),
a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, as amended (the “DGCL”),
DOES HEREBY CERTIFY as follows:
FIRST: That the Certificate
of Incorporation of the Corporation, as amended, is hereby amended as follows:
A.
The second paragraph under Article Fifth thereof shall read in its entirety as follows:
“Terms of Directors. The number of
Directors of the Corporation shall be fixed by resolution duly adopted from time to time by the Board of Directors. The Directors
shall hold office until their successors are duly elected and qualified or until their earlier resignation or removal. Prior to the
2024 annual meeting of stockholders, the Board of Directors shall be divided into three classes designated as Class I, Class II and
Class III, respectively. At the 2022 annual meeting of stockholders, the term of office of the Class III directors shall expire and
successors to the Class III directors shall be elected for a term expiring at the next annual meeting of stockholders and at each
succeeding annual meeting of stockholders. At the 2023 annual meeting of stockholders, the term of office of the Class II directors
shall expire and successors to the Class II directors shall be elected for a term expiring at the next annual meeting of
stockholders and at each succeeding annual meeting of stockholders. At the 2024 annual meeting of stockholders, the term of office
of the Class I directors shall expire and successors to the Class I directors shall be elected for a term expiring at the next
annual meeting of stockholders and at each succeeding annual meeting of stockholders. From and after the election of directors
at the 2024 annual meeting of stockholders, the Board of Directors shall cease to be classified and each director elected at the
2024 annual meeting of stockholders (and at each succeeding annual meeting of stockholders) shall hold office for a term expiring at
the next annual meeting of stockholders held after such director’s election. For purposes of this Article Fifth, “2022
annual meeting of stockholders” shall mean the annual meeting of shareholders held following the fiscal year ended May 31,
2022; “2023 annual meeting of stockholders” shall mean the annual meeting of shareholders held following the fiscal year
ended May 31, 2023; and “2024 annual meeting of stockholders” shall mean the annual meeting of shareholders held
following the fiscal year ended May 31, 2024.”
B.
The third paragraph under Article Fifth thereof shall read in its entirety as follows:
“Vacancies. Any and all vacancies in
the Board of Directors, however occurring, including, without limitation, by reason of an increase in size of the Board of
Directors, or the death, resignation, disqualification or removal of a Director, shall be filled solely by the affirmative vote of a
majority of the remaining Directors then in office, even if less than a quorum of the Board of Directors. Any Director appointed in
accordance with the preceding sentence shall hold office until such Director’s successor shall have been duly elected and
qualified or until his or her earlier resignation or removal. No decrease in the number of Directors shall shorten the term of any
incumbent Director.”
SECOND: That the aforesaid
amendments were duly adopted in accordance with the applicable provisions of Section 242 of the DGCL.
IN WITNESS WHEREOF, the Corporation
has caused this Certificate of Amendment to be duly executed on its behalf as of the date first indicated above.
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TSR, INC.
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By:
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Name:
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Title:
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Appendix B
AMENDMENT NO. 4
TO AMENDED AND RESTATED BY-LAWS
OF TSR, INC.
The Amended and Restated By-laws
(as amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3 to the Amended and Restated By-laws) (the “By-laws”) of
TSR, Inc. are hereby amended as follows:
1. The text of Article
III, Section 2 of the By-laws, which had been previously stated as follows:
“Section 2. Vacancies.
Any and all vacancies in the Board of Directors, however occurring, including, without limitation, by reason of an increase in size of
the Board of Directors, or the death, resignation, disqualification or removal of a Director, shall be filled solely by the affirmative
vote of a majority of the remaining Directors then in office, even if less than a quorum of the Board of Directors. Any Director appointed
in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of Directors in which the
new directorship was created or the vacancy occurred and until such Director’s successor shall have been duly elected and qualified
or until his or her earlier resignation or removal. When the number of Directors is increased or decreased, the Board of Directors shall
determine the class or classes to which the increased or decreased number of Directors shall be apportioned so as to maintain each class
as nearly equal in number as possible; provided, however, that no decrease in the number of Directors shall shorten the term of any incumbent
Director.”
was amended to read as follows:
“Section 2. Vacancies.
Any and all vacancies in the Board of Directors, however occurring, including, without limitation, by reason of an increase in size of
the Board of Directors, or the death, resignation, disqualification or removal of a Director, shall be filled solely by the affirmative
vote of a majority of the remaining Directors then in office, even if less than a quorum of the Board of Directors. Any Director appointed
in accordance with the preceding sentence shall hold office until such Director’s successor shall have been duly elected and qualified
or until his or her earlier resignation or removal. No decrease in the number of Directors shall shorten the term of any incumbent Director.”
Approved: [_______] [__], 2021
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