John M. Holliman, III
About John M. Holliman, III
John M. Holliman, III is an independent director of Capstone Holding Corp. (CAPS), serving on the board since September 1987 and previously as Chairman from August 1997 to July 2017. He is 72 and is an experienced venture capitalist (general partner of the Valley Ventures family of funds since February 1993), with commercial lending experience and service on 40+ company boards; he holds a BBA in Finance and an MBA from Southern Methodist University and a Master of International Management from Thunderbird School of Global Management .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Capstone Holding Corp. | Director | Since Sep 1987 | Currently Audit Committee Chair; member, Compensation Committee |
| Capstone Holding Corp. | Chairman of the Board | Aug 1997 – Jul 2017 | Board leadership during multi-decade period |
| Valley Ventures funds (Valley Ventures LP/II/III/III Annex; formerly Arizona Growth Partners LP) | General Partner | Since Feb 1993 | Venture investing across industries; 39+ years business experience; boards of 40+ companies |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Valley Ventures LP/II/III/III Annex | General Partner | Since Feb 1993 | Venture capital funds; broad investing across industries |
| Various companies (40+ boards) | Director | Not specified | Service on boards of over forty companies (not individually listed) |
Board Governance
- Board class and term: Class II; term expiring at 2026 Annual Meeting .
- Independence: Board determined Holliman is an “independent director” under Nasdaq Rule 5605(a)(2). Audit, Compensation, and Nominating/Governance committees composed entirely of directors who satisfy independence standards; Holliman serves on Audit and Compensation .
- Committee roles: Audit Committee Chair and designated “audit committee financial expert” under Item 407(d)(5) of Regulation S‑K; also a member of the Compensation Committee .
- Lead Independent Director: Charles “Chuck” Dana (context for board leadership structure) .
- Insider Trading Policy: Company maintains an Insider Trading Policy governing all company securities transactions for directors, officers, and employees .
- 10b5‑1 plans: None disclosed for directors/officers in the proxy .
- Legal proceedings: Company not aware of any director involved in disqualifying legal events in past ten years .
- Say‑on‑Pay frequency: Board recommends triennial frequency for advisory votes on NEO compensation .
Fixed Compensation
| Year/Plan | Cash Retainer | Equity | Notes |
|---|---|---|---|
| 2023 (pre‑IPO) | $48,000 | Not disclosed | Director compensation for Holliman and Toporek prior to the March 7, 2025 public offering |
| 2024 (pre‑IPO) | $48,000 | Not disclosed | Director compensation for Holliman and Toporek prior to the March 7, 2025 public offering |
| Post‑IPO Director Compensation Plan (adopted Mar 7, 2025) | $20,000 annually, paid quarterly | Not disclosed | New plan upon completion of public offering |
Performance Compensation
| Metric/Instrument | Details |
|---|---|
| Performance‑based director compensation | No performance‑based or equity director compensation was disclosed; the adopted plan describes an annual cash retainer only |
Other Directorships & Interlocks
| Entity | Relationship/Role | Potential Conflict/Interlock | Mitigation/Process |
|---|---|---|---|
| Nectarine Management LLC | Principal owner alongside Michael Toporek, Matthew E. Lipman, and Gordon Strout (all board members) | Holds all Series B Preferred Stock consent rights over major corporate actions; proposed “Consent Fee” of 0.25%–2% of transaction value for actions requiring consent; reimbursement of up to $50,000 legal fees per transaction; right to request resubmission to shareholders every 90 days until approval | Nominating & Corporate Governance Committee (disinterested directors) delegated authority to review/approve the agreement; directors with interests in Nectarine (including Holliman) to recuse themselves from board votes on such matters |
| Series B Preferred Stock (Company governance instrument) | Consent rights (via Nectarine ownership) | Reinforces influence over corporate actions; may increase costs and cause dilution if fees paid in stock | Disinterested committee oversight; exclusion of interested directors’ votes; separate shareholder approval thresholds |
Expertise & Qualifications
- Financial expertise: Audit Committee Chair and “audit committee financial expert” designation .
- Finance and operations background: Commercial lending with major financial institutions; venture capital financing for 35+ years .
- Education: BBA in Finance and MBA (Southern Methodist University); Master of International Management (Thunderbird) .
- Board experience: Service on 40+ company boards across industries .
Equity Ownership
| Holder | Shares Beneficially Owned | % of Outstanding | Notes |
|---|---|---|---|
| John M. Holliman, III | 1,095 | <1% | Based on 6,306,205 shares outstanding as of Sept 24, 2025 |
Governance Assessment
-
Positives
- Independent director with deep finance and operating expertise; chairs Audit and is an SEC‑defined financial expert, supporting robust financial oversight .
- Long institutional knowledge (director since 1987; former Chair 1997–2017), valuable for continuity during strategic shifts .
- Disinterested committee oversight and recusal framework in place for Nectarine‑related matters, acknowledging and addressing conflicts .
-
Concerns / RED FLAGS
- Related‑party exposure: Holliman is a principal owner of Nectarine, which holds Series B consent rights and could receive 0.25%–2% Consent Fees plus up to $50,000 legal fee reimbursements per transaction; this structure can increase costs, dilute shareholders if paid in stock, and reinforce influence over key corporate actions .
- Concentrated influence via preferred stock consent rights may impair minority shareholder leverage on transformative transactions .
- Low direct stock ownership (1,095 shares, <1%) suggests limited economic alignment relative to influence and tenure .
- Director compensation reduced post‑IPO to a $20,000 annual retainer; absence of disclosed equity grants for directors limits long‑term alignment signals .
-
Implications for investor confidence
- Audit leadership and independence bolster oversight quality; however, Nectarine’s consent‑fee framework and resubmission right present persistent conflict‑of‑interest optics. Effective enforcement of recusal and use of disinterested committees will be critical to mitigate governance risk in M&A, financing, and equity issuance decisions .
- Monitoring for any future equity compensation to directors and disclosure of stock ownership guidelines (if adopted) would improve alignment transparency. Current low ownership levels merit ongoing attention .