WASHINGTON, D.C. 20549
(Amendment No. 1)
BARNWELL INDUSTRIES, INC.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes
☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No
The aggregate market value of the voting common stock held by non-affiliates of the registrant, computed by reference to the closing price of a share of common stock
on March 31, 2022 (the last business day of the registrant’s most recently completed second fiscal quarter) was $12,155,000.
As of January 16, 2023 there were 9,956,687 shares of common stock
outstanding.
None.
Except as described above, this Amendment does not modify or update the disclosure in, or exhibits to, the Original Filing in any way, and the parts or exhibits of the
Original Filing which have not been modified or updated are not included in this Amendment. Furthermore, this Form 10-K/A does not change any previously reported financial results, nor does it reflect events occurring after the filing date of
the Original Filing. Information not affected by this Form 10-K/A remains unchanged and reflects the disclosures made at the time the Original Filing was filed. This Amendment continues to speak as of the date of the Original Filing, and except
as expressly set forth in this Amendment, does not reflect events occurring after December 29, 2022, the filing date of the Original Filing, or modify or update those disclosures that may have been affected by subsequent events. Accordingly,
this Amendment should be read in conjunction with the Original Filing and the Company’s other filings made with the Securities and Exchange Commission since the filing of the Original Filing, including amendments to those filings, if any.
PART III
| ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
The table below identifies our current officers and directors.
|
Name
|
|
Position Held with the Company
|
|
Age
|
|
Kenneth S. Grossman 1, 3A, 4
|
|
Director, Chairman of the Board of Directors
|
|
67
|
|
Francis J. Kelly
|
|
Director
|
|
59
|
|
Alexander C. Kinzler 2
|
|
Chief Executive Officer, President, Chief Operating Officer,
General Counsel and Director
|
|
64
|
|
Philip J. McPherson 1, 2A
|
|
Director
|
|
48
|
|
Peter J. O’Malley 2
|
|
Director
|
|
56
|
|
Bradley M. Tirpak
|
|
Director
|
|
53
|
|
Douglas N. Woodrum 1A, 3, 4A
|
|
Director
|
|
65
|
| |
|
|
|
|
|
1A Chair of the Audit Committee
|
1 Member of the Audit Committee
|
|
2A Chair of the Reserves Committee
|
2 Member of the Reserves Committee
|
|
3A Chair of the Compensation Committee
|
3 Member of the Compensation Committee
|
|
4A Chair of the Nominating Committee
|
4 Member of the Nominating Committee
|
Business Experience
Peter J. O’Malley1 – Director
since 2020. Chairman of the Board of the Company from May 11, 2021 to January 21, 2023. Founder of Kenosis Capital LLC, 2012. Mr. O’Malley has a broad range of experience and business and investment contacts developed over a more than twenty-five
year career in international investment banking. Mr. O’Malley’s past employment includes key management positions at Credit Suisse and several of its affiliates, Deutsche Bank in New York and Hong Kong, as well as other investment banking firms
in the United States and Asia. Although he received a Juris Doctor degree from St. John’s University School of Law in 1991, Mr. O’Malley’s entire career has been spent in the investment community, starting as an in-house corporate counsel for CS
First Boston in New York. Mr. O’Malley has been active in the M&A, private equity and capital markets divisions of the investment banking firms with which he has been associated, in most cases as a Managing Director. Mr. O’Malley’s vast
experience in investment banking and the investment community gives him significant insight into corporate operations, financing, accounting and business issues facing the Company.
Kenneth S. Grossman1 –
Director since 2020. Chairman of the Board of the Company since January 21, 2023 and from April 15, 2020 to May 10, 2021. Vice-Chairman of the Board of the Company from May 11, 2021 to June 30, 2022. Investor and attorney specializing in
companies undergoing and/or emerging from restructuring or reorganization; Senior Managing Director of Steppingstone Group, LLC. Mr. Grossman has been engaged as a professional investor and the management of capital as a buy-side principal since
1990. Mr. Grossman has served as an independent director of both private and public companies, and as a member of creditor, bank group and shareholder committees for other businesses and has extensive experience in advising investors as well as
leading investors and partners with respect to distressed and other capital-challenged “special situation” companies. Mr. Grossman’s experience includes a strong network of relationships and management roles involving large portfolios in this
investment sector maintained by multi-strategy and arbitrage firms. Admitted to the New York Bar in 1982, Mr. Grossman practiced law with Shea & Gould until 1989, where he specialized in bankruptcy, creditor’s rights and commercial
litigation. More recently, Mr. Grossman utilized that experience in leadership roles and as a Director of Lehman Brothers Special Finance, Inc. and Signature Group Holdings, Inc. (formerly Fremont General Corporation), as they emerged from
Chapter 11 bankruptcy. Mr. Grossman is currently a board member and/or special advisor for Concise Capital Management and a director of Performance Sports Group, Inc., Buffalo Armory, LLC and Nebraska Book Co, Inc.
Alexander C. Kinzler – Director since 1999. Chief Executive Officer
of the Company since December 2016. President and Chief Operating Officer of the Company since December 2002 and General Counsel of the Company since December 2001. Mr. Kinzler, an attorney, has been employed by the Company since 1984 in various
capacities, including Vice President, Executive Vice President, and currently Chief Executive Officer, President and Chief Operating Officer, and brings to the Board deep insight into the operations, challenges and complex issues facing the
Company. He has served on the boards of directors of business groups including the Hawaii Leeward Planning Conference, and also brings to the Board significant operational, strategic, consensus-building and management skills from his years with
the Company and legal background.
|
1
|
This director is independent as defined in Section 803(A) of the NYSE American listing standards.
|
Francis J. Kelly2 – Director
since March 2022. Since 2021, Mr. Kelly has served as the Managing Partner of Fulcrum Macro Advisors LLC, an advisory firm that he founded which provides advice to clients as to the public policy decision-making process and its impact on global
markets. Prior to founding Fulcrum Macro Advisors LLC, he served as Global Coordinator for Government & Public Affairs and head of the Direct Investment Advisory Group at Deutsche Bank. Mr. Kelly also is an advisor to the Scowcroft Group, a
global business advisory firm with an emphasis on emerging markets, and Adjunct Professor at The Catholic University School of Business, where he teaches business intelligence, political risk, and strategic planning. Mr. Kelly was previously a
member of the Securities and Exchange Commission Senior Staff, Senior Policy Advisor to the Chairman of the SEC and Chief Spokesman for the Commission. Mr. Kelly’s background in investment banking and the investment community gives him
significant insight into corporate operations, investment opportunities, commodities and business issues facing the Company, and his experience on numerous boards as well as a policy advisor bring significant strategic, consensus-building and
management skills to the Company.
Philip J. McPherson2 –
Director since 2020. Vice President of Capital Markets, Riot Blockchain, Inc. since March 1, 2021. Chief Financial Officer, Secretary, Treasurer and a director of Citadel Exploration, Inc. (OTCMKTS: COIL), a publicly traded energy company
engaged in the exploration and development of oil and natural gas properties, from September 2012 to March 1, 2021, with nearly two decades of experience in the capital markets and financial services sectors. Mr. McPherson was also appointed as
Interim Chief Executive Officer of Citadel Exploration in May 2019. He started his career as a retail stockbroker with Mission Capital in 1997 and became partner before it was acquired by oil and gas boutique C. K. Cooper & Company. At C.K.
Cooper, Mr. McPherson was a research analyst specializing in small cap exploration and production companies. In 2007, he joined Global Hunter Securities as a partner and managing director of the energy research group. During his Wall Street
career, Mr. McPherson was presented the Wall Street Journal “Best on the Street” Award and was named a Zack’s 5-Start Analyst for three consecutive years. He is a recognized expert on California E&P firms. Mr. McPherson received his Bachelors
in Economics from East Carolina University.
Bradley M. Tirpak2 – Director since 2020. Chief Executive Officer, Liberated Syndication, Inc. (OTCMKTS: LYSN), a publicly traded company that is a leading provider of podcast hosting services, since November 1, 2021. A
professional investor with more than 20 years of investing experience. Since September 2016, Mr. Tirpak has served as a portfolio manager and Managing Director at Palm Active Partners Management, LLC, a private investment company. From 2009 to
2016, Mr. Tirpak served as Managing Member of Locke Partners, LLC, a private investment company, where he managed various investment partnerships that focused on engaging public companies to improve corporate governance and improve stockholder
returns. Earlier in his career, Mr. Tirpak was a portfolio manager at Credit Suisse First Boston from January 1997 to September 2000, at Caxton Associates from September 2000 to May 2003 and at Sigma Capital Management from April 2003 to December
2007. Between 1993 and 1996, he was the founder and CEO of Access Telecom, Inc., an international telecommunications company doing business in Mexico. Mr. Tirpak served as a director at Full House Resorts, Inc. (Nasdaq: FLL), a publicly traded
company that owns, leases, develops and operates hotels and gaming facilities, from November 2014 until February 11, 2021, and has served as a director of TSR Inc. (Nasdaq: TSRI), publicly traded company providing contract computer programming
services, since October 2019, and a director of Liberated Syndication Inc. since October 2019. Mr. Tirpak also currently serves as trustee of The Halo Trust USA, the world’s largest humanitarian mine clearance organization with operations in over
20 countries. He previously served as a director at Birner Dental Management Services, Inc., then a publicly traded manager of dental practices, from December 2017 to January 2019, when the company was acquired, Flowgroup plc, an energy supply
and services business in the United Kingdom, from June 2017 to October 2018 when the company’s principal subsidiary was acquired, Applied Minerals, Inc., a publicly traded specialty materials company, from April 2015 to March 2017, and USA
Technologies, Inc., a publicly traded provider of electronic payment transactions to the vending industry, from 2010 to 2012. Mr. Tirpak earned a B.S.M.E. from Tufts University and an M.B.A. from Georgetown University.
Douglas N. Woodrum2 –
Director since 2020. Chief Financial Officer and Secretary of ChinaCast Education Corporation, a post-secondary education and e-learning services provider in the People’s Republic of China, since January 2012. From January 2006 to December
2009, Mr. Woodrum, a private investor, served as a research analyst for Jayhawk Capital Management, a private equity firm focusing on investing in small- and medium-sized businesses operating in China. From December 1997 to December 2005, Mr.
Woodrum was the Chief Financial Officer of CNET Networks, Inc., then a publicly traded online media company, where his responsibilities included raising capital for growth, business model development, financial reporting, annual budgeting,
long-term planning, acquisitions, investor relations and tax. Mr. Woodrum has served on the board of directors of Liberated Syndication, Inc., a provider of podcast hosting services, since March 2021, MarketScout, a private insurance distribution
and underwriting company, since 2002, and on the board of directors of ChinaCast Education Corporation, since 2012. Mr. Woodrum received his B.B.A. in finance and accounting from the University of Iowa in 1979.
|
2
|
This director is independent as defined in Section 803(A) of the NYSE American listing standards.
|
Named Executive Officers of the Company
The Company currently has two executive officers (the “Named Executive Officers”). The following table sets forth the names and ages of all Named Executive Officers of
the Company during fiscal 2022, their positions and offices with the Company and the period during which each has served.
|
Name
|
Age
|
Position with the Company
|
| |
|
|
|
Alexander C. Kinzler
|
64
|
Chief Executive Officer since December 2016. President and Chief Operating Officer since December 2002 and General Counsel since December 2001. Director of the Company since December 1999.
|
| |
|
|
|
Russell M. Gifford
|
68
|
Secretary since December 2002, Executive Vice President since December 1997, Treasurer since November 1986 and Chief Financial Officer since August 1985. President of Water Resources International, Inc., a
wholly-owned subsidiary of the Company, since December 1999.
|
Board Meetings
The Board of Directors held eleven meetings during the fiscal year ended September 30, 2022, all directors attended at least 75% of the meetings of the Board of Directors
and of the committees of the Board of Directors on which each director served. The independent directors met on two occasions out of the presence of management during the fiscal year ended September 30, 2022.
Audit Committee
The members of the Audit Committee are Mr. Woodrum, Chairman, and Messrs. Grossman and McPherson. All of the members of the Audit Committee are independent (as
independence is defined in Section 803(A) of the NYSE American listing standards). The Board of Directors has determined that the Audit Committee has an audit committee financial expert, Mr. Woodrum, who is a financial expert based on his degree
in finance and experience as Chief Financial Officer of a public company. Mr. Woodrum, while not a CPA, has in-depth financial and accounting expertise and has been determined by the Board of Directors to qualify as an Audit Committee financial
expert. The Board of Directors has adopted a written charter for the Audit Committee, a copy of which is available on our website. The Audit Committee reviews the services of the independent accountants employed by the Company to audit the
consolidated financial statements of the Company. The Audit Committee periodically reviews major issues regarding accounting and auditing principles and practices, the adequacy of internal controls that could affect the consolidated financial
statements as well as all related party transactions and potential conflicts of interest. During the fiscal year ended September 30, 2022, the Audit Committee held four meetings.
Executive Committee
There are presently no members appointed to the Executive Committee. The Executive Committee has and may exercise all the powers of the Board of Directors when the Board
is not in session, subject to certain limitations in the Company’s Bylaws. During the fiscal year ended September 30, 2022, the Executive Committee held no meetings.
Nominating Committee
The members of the Nominating Committee are Mr. Woodrum, Chairman, and Mr. Grossman. During the fiscal year ended September 30, 2022, the Nominating Committee held one
meeting. The purpose of the Nominating Committee is to identify and select or recommend qualified nominees to be elected to the Board of Directors at the annual meeting of stockholders (consistent with criteria approved by the Board of
Directors), identify, select or recommend qualified nominees to fill any vacancies on the Board of Directors or a committee thereof (consistent with criteria approved by the Board of Directors) and undertake such other duties and responsibilities
as may from time to time be delegated by the Board of Directors to the Nominating Committee.
Reserves Committee
The members of the Reserves Committee are Mr. McPherson, Chairman, and Messrs. Kinzler and O’Malley. During the fiscal year ended September 30, 2022, the Reserves
Committee held one meeting.
Compensation Committee
The members of the Compensation Committee are Mr. Grossman, Chairman, and Mr. Woodrum. The Compensation Committee (i) determines the annual compensation of the Company’s
Executive Officers; (ii) recommends, if appropriate, new employee benefit plans to the Board of Directors; (iii) administers all employee benefit plans; and (iv) makes such other determinations regarding compensation or benefits as may be
necessary or advisable. The Compensation Committee held one meeting during the fiscal year ended September 30, 2022. The Board of Directors has adopted a written charter for the Compensation Committee, a copy of which is available on our
website.
Code of Ethics
The Company has adopted a code of ethics that applies to all of our executive and non-executive employees. The code of ethics contains
certain additional terms applicable to our Chief Executive Officer and Chief Financial Officer. The Company’s code of ethics may be found on the Company’s website at: www.brninc.com/ethics0304.pdf.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires the Company’s officers and directors, and persons who own more
than 10% of a registered class of the Company’s equity securities, to file certain reports of beneficial ownership with the SEC. Based solely on the Company’s review of the copies of such forms it has received and written representations from
certain reporting persons, the Company believes that all of its officers, directors and greater than 10% beneficial owners, complied with all Section 16(a) filing requirements applicable to them during the Company’s most recently completed fiscal
year.
| ITEM 11. |
EXECUTIVE COMPENSATION
|
Summary Compensation Table
The Summary Compensation Table below sets forth certain information regarding compensation paid during the fiscal years ended September 30, 2022 and September 30, 2021 to
(1) Alexander C. Kinzler, our Chief Executive Officer, President, Chief Operating Officer and General Counsel, and (2) Russell M. Gifford, our Executive Vice President, Chief Financial Officer, Treasurer and Secretary.
No Named Executive Officer was granted a stock award in fiscal year 2022 or 2021, nor received above-market or preferential earnings on compensation that was deferred on
a basis that was not tax-qualified. As a result, such columns have been omitted.
Our Pay for Performance Plan adopted in 2014 (the “Plan”) is available to pay bonuses to our executives based on performance. Performance measures and targeted goals for
the Company’s 2022 fiscal year performance period were established by the Compensation Committee in December 2021 and the Committee designated the CEO to be eligible to participate in the Plan for fiscal year 2022. The material terms of such
performance measures and targeted goals are as follows:
The Compensation Committee determined that the sum of the following three components shall represent the maximum bonus that may be achieved under the Plan for fiscal 2022
by the CEO (the “2022 Maximum Bonus Amount”), which was designed so that the Company would be in compliance with Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”):
(a) an amount equal to 5% of the earnings before income taxes on a GAAP basis of the
Company;
(b) for an increase in earnings attributable to the combined Land Investment and
Residential Real Estate segments in the State of Hawaii on a GAAP basis over the prior fiscal year with respect to such segments, 20% of the first 100% of such increase and 10% of the remaining amount of such increase; and
(c) for an increase in the Company’s market capitalization of up to 10%, determined by
comparing the closing price of the Common Stock on September 30, 2022 and September 30, 2021, 10% of the amount of such increase.
Section 162(m) of the Code generally limits our federal tax deduction for compensation paid in any fiscal year to our CEO and our other “covered employees,” as defined in
Section 162(m), to $1,000,000. In the past, an exception to this deduction limit was available for “performance-based” compensation that had been approved by our stockholders and otherwise satisfied certain requirements under Section 162(m) and
applicable regulations. As a result of new tax legislation that went into effect on December 22, 2017, this exception for performance-based compensation is not available for taxable years beginning after December 31, 2017, unless such
compensation qualifies for transition relief for written binding contracts that were in effect on November 2, 2017. Barnwell was not party to any such binding contracts. This legislation also expanded the definition of “covered employees” to
include the chief financial officer and certain former named executive officers. These changes in the tax laws have not had an effect on Barnwell, primarily because the compensation paid to such persons in our fiscal 2022 year, and in other
recent fiscal years, has been below the $1,000,000 threshold.
The Compensation Committee continues to retain flexibility to make compensation decisions that are based on factors other than Section 162(m) and related consequences
when necessary or appropriate (as determined by the Compensation Committee in its sole discretion) to enable Barnwell to continue to attract, retain, reward and motivate its highly-qualified executives. This flexibility may include amending or
modifying the design elements of our historical compensation programs to the extent those design elements were principally adopted in an effort to comply with Section 162(m).
The 2022 Maximum Bonus Amount for each participant shall in no case exceed 150% of such participant’s base salary as of January 2022. Additionally, a decrease in
earnings before income taxes or market capitalization will not decrease the amounts of the other respective components of the 2022 Maximum Bonus Amount. The Committee, in its sole discretion, reserves the right to eliminate or reduce the 2022
Maximum Bonus Amount payable to the CEO pursuant to the bonus formula described above and in addition or alternatively to grant ordinary bonuses.
The Compensation Committee determined that, pursuant to the adopted performance measures and targeted goals, the 2022 Maximum Bonus Amount which could have been payable
to our CEO as calculated under the Plan was $420,000. The Compensation Committee reviewed the performance of our CEO during fiscal 2022, analyzed the Company’s results for the year, reviewed the overall performance of management for the fiscal
year, reviewed with management various factors the Committee takes into account in setting compensation, including individual and corporate, financial and non-financial performance, the creation of value for our stockholders, the long-term
commitment and contributions of management to the Company and certain events in the Company’s oil and gas division.
|
Name and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Option
Awards
($)
|
Non-
Equity
Incentive
Plan
Compen-
sation ($)
|
All Other
Compen-
sation ($)
|
Total ($)
|
| |
|
|
|
|
|
|
|
|
Alexander C. Kinzler
Chief Executive
Officer, President and
General Counsel
|
2022
2021
|
280,000
245,000
|
-
-
|
-
151,080
|
85,000
60,000
|
44,0703
32,811
|
409,070
488,891
|
| |
|
|
|
|
|
|
|
|
Russell M. Gifford
Executive Vice
President, Chief
Financial Officer,
Treasurer and Secretary
|
2022
2021
|
280,000
245,000
|
85,000
60,000
|
-
161,765
|
-
-
|
-
-
|
365,000
466,765
|
Outstanding Equity Awards At Fiscal Year-End 2022
The following Outstanding Equity Awards At Fiscal Year-End 2022 table sets forth grants of stock options and grants of unvested stock awards
outstanding on the last day of the fiscal year ended September 30, 2022 to each Named Executive Officer.
No Named Executive Officer held unvested stock awards at fiscal year-end 2022. As a result, the relevant columns have been omitted.
|
Option Awards
|
|
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#) Exercisable
|
Number of Securities
Underlying Unexercised
Options
(#) Unexercisable
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
|
Alexander C. Kinzler
|
20,000 shares of
Common Stock
|
40,000 shares of
Common Stock4
|
3.66
|
02/2026
|
|
Russell M. Gifford
|
20,000 shares of
Common Stock
|
40,000 shares of
Common Stock4
|
3.33
|
02/2031
|
The Company maintains a defined benefit pension plan (“Pension Plan”) for its eligible employees to provide annual benefits payable on retirement. Eligibility is based
upon attainment of age 21 and completion of one year of service. Benefits are calculated under a formula based upon years of service and the participant’s highest average annual compensation over 60 consecutive months of service. Since December
31, 2019, future benefit accruals for all participants under the Pension Plan have been frozen. Consequently, current participants in the Pension Plan no longer accrue new benefits under the Pension Plan and new employees of the Company are no
longer eligible to enter the Pension Plan as participants. Mr. Kinzler and Mr. Gifford are participants in the Pension Plan.
|
3
|
This amount represents perquisites received with respect to: (1) medical insurance and (2) directors’ fees.
|
|
4
|
Subject to the conditions set forth in the option, 33 1/3% of the option shall become vested and exercisable on each of the first 3 anniversaries of the grant date
of February 9, 2021.
|
The Company also has a Supplemental Executive Retirement Plan (“SERP”) in order to provide an additional incentive to the Company’s executive officers to remain with the
Company. Since December 31, 2019, future benefit accruals for all participants under the SERP have been frozen. Consequently, current participants in the SERP no longer accrue new benefits under the SERP and new employees of the Company are no
longer eligible to enter the SERP as participants. Mr. Kinzler and Mr. Gifford are participants in the SERP.
The Company also had maintained a Postretirement Medical Insurance Benefit Plan as an additional incentive to the Company’s senior officers in the U.S. to remain with the
Company. During fiscal 2021, the Postretirement Medical Insurance Benefit Plan was terminated.
Director Compensation
The Company’s program of director compensation is intended to fairly pay directors for work required for a company of our size and scope. Directors who are not officers
of the Company currently receive an annual fee of $36,000 and are reimbursed for expenses incurred in connection with meeting attendance. The Chairmen of the Compensation Committee, Nominating Committee and the Reserves Committee currently
receive an additional $12,000 annual fee and the Chairman of the Audit Committee currently receives an additional $18,000 annual fee. The Chairman of the Board of Directors currently receives an additional $36,000 annual fee.
Director Compensation
The following Director Compensation table sets forth information with regard to the Board of Directors (other than any officer of the Company) as listed under Item 10,
above, with regard to compensation paid to them during the fiscal year ended September 30, 2022.
No named director was granted an option or stock award in fiscal year 2022, nor earned any non-equity incentive plan compensation or nonqualified deferred compensation
earnings in fiscal year 2022. As a result, the relevant columns have been omitted.
|
Name
|
Fees Earned or Paid
in Cash ($)
|
All Other Compensation ($)
|
Total ($)
|
|
Kenneth S. Grossman
|
68,500
|
11,2505
|
79,500
|
|
Francis J. Kelly6
|
24,000
|
-
|
24,000
|
|
Philip J. McPherson7
|
57,750
|
15,0005
|
72,750
|
|
Colin R. O’Farrell8
|
22,000
|
-
|
22,000
|
|
Peter J. O’Malley9
|
80,500
|
15,0005
|
95,500
|
|
Bradley M. Tirpak
|
34,500
|
-
|
34,500
|
|
Douglas N. Woodrum10
|
34,500
|
-
|
34,500
|
|
5
|
This amount represents fees for services provided as a trustee of the Company’s pension plan.
|
|
6
|
During fiscal year 2022, Mr. Kelly served on the following committees: Audit (member), Compensation (member), Nominating (Chair).
|
7
|
During fiscal year 2022, Mr. McPherson served on the following committees: Audit (Chair), Reserves (Chair), Compensation (member), Nominating (member).
|
8
|
Mr. O’Farrell resigned from the Board of Directors in March 2022.
|
9
|
During fiscal year 2022, Mr. O’Malley served as the Chairman of the Board and also served on the following committees: Audit (member), Reserves
(member), Compensation (Chair), Nominating (member).
|
10
|
During fiscal year 2022, Mr. Woodrum served on the following committee: Audit (member).
|
| ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
The following table sets forth information as of January 16, 2023, with respect to the beneficial ownership of the Common Stock, the sole voting security of the Company,
by (i) each person known to the Company who beneficially owns more than 5% of the Common Stock, (ii) each director and nominee of the Company, (iii) the Named Executive Officers, and (iv) all directors and executive officers of the Company as a
group.
|
Name and Address of Beneficial Owner
|
|
Amount and Nature of
Beneficial Ownership1
|
|
Percent
Of Class
|
| |
|
|
|
|
|
|
Joseph E. Magaro
|
401 Riversville Road
Greenwich, Connecticut
|
|
867,544
|
|
8.7%
|
| |
|
|
|
|
|
|
Ned L. Sherwood
|
4731 North Highway A1A
Suite 213
Vero Beach, Florida
|
|
1,955,1942
|
|
19.6%
|
| |
|
|
|
|
|
|
Alexander C. Kinzler
|
1100 Alakea Street, Suite 500
Honolulu, Hawaii
|
|
969,5003
|
|
9.5%
|
| |
|
|
|
|
|
|
Russell M. Gifford
|
1100 Alakea Street, Suite 500
Honolulu, Hawaii
|
|
140,0003
|
|
1.4%
|
| |
|
|
|
|
|
|
Kenneth S. Grossman
|
1100 Alakea Street, Suite 500
Honolulu, Hawaii
|
|
65,0003
|
|
*
|
| |
|
|
|
|
|
|
Francis J. Kelly
|
1100 Alakea Street, Suite 500
Honolulu, Hawaii
|
|
0
|
|
*
|
| |
|
|
|
|
|
|
Philip J. McPherson
|
1100 Alakea Street, Suite 500
Honolulu, Hawaii
|
|
33,3323
|
|
*
|
| |
|
|
|
|
|
|
Peter J. O’Malley
|
1100 Alakea Street, Suite 500
Honolulu, Hawaii
|
|
45,4723
|
|
*
|
| |
|
|
|
|
|
|
Bradley M. Tirpak
|
1100 Alakea Street, Suite 500
Honolulu, Hawaii
|
|
67,4593
|
|
*
|
| |
|
|
|
|
|
|
Douglas N. Woodrum
|
1100 Alakea Street, Suite 500
Honolulu, Hawaii
|
|
133,3323
|
|
1.3%
|
| |
|
|
|
|
|
|
All directors and executive
officers as a group (8 persons)
|
|
1,454,0953
|
|
14.2%
|
|
1
|
A person is deemed to be the beneficial owner of securities that such person can acquire as of and within the 60 days following the date of this table upon the exercise of options. Each beneficial
owner’s percentage of ownership is determined by assuming that options or conversion rights that are held by such person (but not those held by any other person) and which are exercisable as of and within 60 days following the date of
this table have been exercised. For purposes of the footnotes that follow, “currently exercisable” means options that are exercisable as of and within 60 days following the date of this table. Except as indicated in the footnotes that
follow, shares listed in the table are held with sole voting and investment power.
|
|
|
Represents shares held as of September 13, 2022 as reported on Form 4 filed by Ned L. Sherwood. According to such filing, Mr. Sherwood may be deemed to beneficially own 1,955,194 shares of Common Stock
of the Company, which includes (i) 1,717,156 shares of Common Stock of the Company held by MRMP Managers LLC, of which Mr. Sherwood is the chief investment officer, and (ii) 238,038 shares of Common Stock of the Company held by Ned L.
Sherwood Revocable Trust, of which Mr. Sherwood is the beneficiary and trustee.
|
|
3
|
Includes shares underlying options that are exercisable: (i) 40,000, for Mr. Kinzler; 40,000, for Mr. Gifford; 40,000, for Mr. Grossman; 33,332, for Mr. McPherson; 33,332, for Mr. O’Malley; 33,332, for
Mr. Tirpak; 33,332, for Mr. Woodrum.
|
|
*
|
Represents less than 1% of the outstanding shares of Common Stock of the Company.
|
| ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
There were no transactions that occurred during fiscal years 2021 and 2022 in which, to our knowledge, the Company was or is a party, in which the amount involved
exceeded the disclosure thresholds set forth in the applicable SEC rules and regulations, and in which any director, director nominee, executive officer, person known by us to be a holder of more than 5% of our Common Stock or any member of the
immediate family of any of the foregoing persons had or will have a direct or indirect material interest.
| ITEM 14. |
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
Report of the Audit Committee
The Audit Committee has reviewed and discussed the audited consolidated financial statements with management, and the Audit Committee has discussed with Weaver and
Tidwell, L.L.P., the independent registered public accounting firm, the matters required to be discussed by PCAOB Auditing Standard No. 16, “Communications with Audit Committee; Related Amendments to PCAOB Standards; and Transitional Amendments
to PCAOB AU Section 380.”, as such may be modified or supplemented. Weaver and Tidwell, L.L.P. has provided to the Company the written disclosures and the letter required by applicable PCAOB requirements regarding their communications with the
Audit Committee concerning independence, and the Audit Committee has discussed with Weaver and Tidwell, L.L.P. its independence. The committee also concluded that Weaver and Tidwell, L.L.P.’s performance of tax services to us and our affiliates,
as pre-approved by the committee and described in the next section, does not impair Weaver and Tidwell, L.L.P.’s independence. Based upon its discussions with management and with Weaver and Tidwell, L.L.P., the Audit Committee has recommended to
the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022.
Audit Fees
The aggregate fees billed to the Company by Weaver and Tidwell, L.L.P. (Dallas, Texas, PCAOB ID 410), the
Company’s independent registered public accounting firm for professional services rendered in connection with the audit of the annual financial statements included in the Company’s Annual Report on Form 10-K, review of financial statements
included in the Company’s Quarterly Reports on Form 10-Q and services to the Company in connection with statutory or regulatory filings or engagements for the fiscal year ended September 30, 2022 totaled $335,781. For the comparable services
provided for the fiscal year ended September 30, 2021, the aggregate fees billed to the Company by Weaver and Tidwell, L.L.P., the Company’s independent registered public accounting firm since July 8, 2020, and
KPMG LLP, the Company’s independent registered public accounting firm until July 8, 2020, for professional services rendered in connection with the audit of the annual financial statements included in the Company’s Annual Report on Form
10-K, review of financial statements included in the Company’s Quarterly Reports on Form 10-Q and services to the Company in connection with statutory or regulatory filings or engagements for the fiscal year ended September 30, 2022 totaled
$303,051 and $61,200, respectively.
Audit-Related Fees
For the fiscal years ended September 30, 2022 and September 30, 2021, the Company did not incur and Weaver and Tidwell, L.L.P., the Company’s independent registered
public accounting firm since July 8, 2020, and KPMG LLP, the Company’s independent registered public accounting firm until July 8, 2020, respectively, did not bill the Company for assurance and related services that are not reasonably related to
the performance of the audit or review of the Company’s financial statements and classified above with audit fees.
Tax Fees
The aggregate fees billed to the Company by Weaver and Tidwell, L.L.P., the Company’s independent registered public accounting firm for professional services rendered in connection with
tax compliance, tax advice and tax planning for the fiscal year ended September 30, 2022 totaled $15,423. For the fiscal year ended September 30, 2021, the Company did not incur and Weaver and Tidwell, L.L.P.,
the Company’s independent registered public accounting firm since July 8, 2020, did not bill the Company for tax compliance, tax advice and tax planning.
All Other Fees
The aggregate fees billed to the Company by Weaver and Tidwell, L.L.P., the Company’s independent registered public accounting firm since July 8, 2020, for fees other
than Audit Fees and Tax fees for the fiscal year ended September 30, 2022 totaled $15,423. For the fiscal year ended September 30, 2021, the Company did not incur and Weaver and Tidwell, L.L.P., the Company’s independent registered public
accounting firm since July 8, 2020, and KPMG LLP, the Company’s independent registered public accounting firm until July 8, 2020, respectively, did not bill the Company for any fees other than Audit Fees.
Pre-approval Policies and Procedures
The Audit Committee pre-approves all services provided to the Company by the independent registered public accounting firm through the following policies and procedures:
(1) the Audit Committee reviews with the Company’s independent registered public accounting firm its audit plan and report thereon, including estimated Audit Fees, Audit-Related Fees, Tax Fees and Other Fees; (2) upon review of such audit plan
and estimated fees, the Audit Committee may pre-approve the provision of such products and services and the payment therefor; and (3) at subsequent meetings of the Audit Committee, the Audit Committee reviews the status of the provision of all
products and services from the Company’s independent registered public accounting firm to the Company and payment therefor, and may pre-approve the provision of additional products and services as necessary.