UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the Registrant ☑

Filed by a Party other than the Registrant ☐

ELECTROMED, INC.
500 Sixth Avenue Northwest
New Prague, MN 56071
(952) 758-9299

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, NOVEMBER 15, 201911, 2022

To our Shareholders:

The Fiscal 20202023 Annual Meeting of Shareholders (the “Annual Meeting”) of Electromed, Inc. (the “Company”) will be held at the Company’s offices at 500 Sixth Avenue Northwest, New Prague, Minnesota 56071 on Friday, November 15, 201911, 2022 at 10:00 a.m. Central Time,Time. This year’s Annual Meeting will be held as a completely “virtual meeting” of shareholders. We believe that a virtual Annual Meeting provides greater access to those who may want to attend and, therefore, have chosen this over an in-person meeting. You will be able to attend the Annual Meeting virtually, and vote and submit your questions during the Annual Meeting, via live webcast by visiting www.virtualshareholdermeeting.com/ELMD2022. Prior to the Annual Meeting, you will be able to vote at www.proxyvote.com for the following purposes:purpose of considering and voting upon:

The Board of Directors of the Company has fixed the close of business on September 16, 201914, 2022 as the record date for determining the shareholders entitled to notice of and to vote at the Annual Meeting and any adjournments thereof. The stock transfer books of the Company will not be closed.

	By order of the Board of Directors,
	Stephen H. Craney
	Chairman
	Lee A. Jones Chair of the Board

THE PROMPT SUBMISSION OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM. YOU MAY VOTE BY MAIL, ONLINE OR BY PHONE IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH IN THE PROXY CARD, NOTICE OF INTERNET AVAILABILITY OR OTHER INSTRUCTIONS FROM THE HOLDER OF RECORD.

Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting to be held on November 15, 201911, 2022
The Notice and Proxy Statement, Annual Report on Form 10-K, and Shareholder Letter are available at http://investors.smartvest.com/annual-meeting.annual-meeting.

TABLE OF CONTENTS

ELECTROMED, INC.
Proxy Statement
Fiscal 20202023 Annual Meeting of Shareholders
Friday, November 15, 201911, 2022
10:00 a.m. Central Time

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Electromed, Inc., a Minnesota corporation (the “Company”), for use at the Fiscal 20202023 Annual Meeting of Shareholders of the Company to be held on Friday, November 15, 201911, 2022 at 10:00 a.m. Central Time (the “Annual Meeting”), and at any adjournment or postponement thereof. TheThis year’s Annual Meeting will be held at the Company’s offices at 500 Sixth Avenue Northwest, New Prague, Minnesota 56071. Registration foras a completely “virtual meeting” of shareholders. You will be able to attend the Annual Meeting will begin at approximately 9:45 a.m. Central Timevirtually, and vote and submit your questions during the Annual Meeting, will commence at 10:00 a.m. Central Time. via live webcast by visiting www.virtualshareholdermeeting.com/ELMD2022.

This solicitation is being made by mail; however, the Company also may use its officers, directors, and employees (without providing them with additional compensation) to solicit proxies from shareholders in person or by telephone, facsimile, email, or letter. Distribution of this proxy statement and the proxy card, or a notice of internet availability, is expected to begin on or about September 27, 2019.2022.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

Proposal 1 – Election of Directors — The nominees receiving the greatest number of votes relative to the votes cast for the other nominees will be elected, regardless of whether an individual nominee receives votes from a majority of the quorum of shares represented at the Annual Meeting (in(whether electronically in person or by proxy). Election of the seveneight directors named in this proxy statement will be deemed to be shareholder approval of setting the number of directors at seven.eight. Shareholders are not entitled to cumulate their votes for the election of directors.

Proposal 2 – Ratification of the Appointment of RSM US LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal 2023 — The affirmative vote of the holders of a majority of the shares of common stock present at the Annual Meeting (whether electronically in person or by proxy) will result in approval of the proposal to ratify the appointment of RSM US LLP as the Company’s independent registered public accounting firm for the Company’s fiscal year ending June 30, 2020 (“fiscal 2020”).2023.

Proposal 3 – Advisory Approval of Executive Compensation — The affirmative vote of the holders of a majority of the shares of common stock represented at the Annual Meeting (whether electronically in person or by proxy) and entitled to vote on the proposal will result in the advisory approval of our executive compensation.compensation set forth in this proxy statement. However, this is a non-binding and advisory vote, which means that the result of the vote is not binding on the Company, our Board or its Personnel and Compensation Committee. To the extent there is any significant vote against approval of our executive compensation as disclosed in this proxy statement, the Personnel and Compensation Committee will evaluate whether any actions are necessary to address the concerns of shareholders.

Proposal 4 – Advisory Recommendation Regarding Frequency of Executive Compensation Votes — The alternative receiving the greatest number of votes will be deemed the alternative recommended by the shareholders. However, this is an advisory vote, which means that the result of the vote is not binding on the Company, our Board or its Personnel and Compensation Committee. The Board and its Personnel and Compensation Committee will take into account the outcome of the vote, however, when considering the frequency of future advisory votes on executive compensation.

You may vote FOR, AGAINST or ABSTAIN on proposals 2 and 3. If you ABSTAIN from voting on proposals 2 or 3, your shares will be deemed present but will not be deemed to have voted in favor of the proposal, which will have the same effect as a vote AGAINST the proposal.

You may vote for 1 YEAR, 2 YEARS, 3 YEARS or ABSTAIN on Proposal 4. If you ABSTAIN from voting on Proposal 4, your vote will have no effect on the outcome of the Proposal.

Brokers do not have discretion to vote shares for the election of directors, the advisory vote to approve executive compensation the advisory vote regarding the frequency of executive compensation votes, or for any other non-routine matters that may be brought before the meeting. Accordingly, if your shares are held in street name and you do not submit voting instructions to your broker, your shares will not be counted in determining the outcome of these proposals. Brokers will have discretion to vote on the ratification of the appointment of our independent registered public accounting firm if you do not provide voting instructions.

Broker non-votes will be considered present for quorum purposes at the Annual Meeting. Broker non-votes in connection with the election of directors are not deemed “votes cast,” and, since directors are elected by a plurality, will have no effect on the election. Because broker non-votes are not entitled to vote on non-routine business matters, such as Proposalsproposal 3, and 4, they will have no effect on the outcome of the vote on such matters.

You are a “street name” holder rather than a “shareholder of record” if your shares are held in the name of a stock broker, bank, trust or other nominee as a custodian, and this proxy statement was forwarded to you by that organization. If you are a “street name” holder, you must instruct your nominee as to your voting preferences. Please contact your nominee/custodian to do so. Because a beneficial owner is not the shareholder of record, you may not vote your shares in person atelectronically during the Annual Meeting unless you obtain a legal proxy from the broker, bank, trustee or nominee that holds your shares, giving you the right to vote the shares atelectronically during the Annual Meeting.

If your shares are held in street name through a broker or other nominee, you will need to contact that nominee if you wish to change your voting instructions.

If you are a street name holder and do not submit specific voting instructions to your broker, the organization that holds your shares is permitted to vote your shares with respect to “routine” items, but not with respect to “non-routine” items. On non-routine items for which you do not submit specific voting instructions to your broker, the shares will be treated as “broker non-votes.” Broker non-votes will be counted for purposes of determining whether a quorum is present, but will not be considered shares entitled to vote on the proposal and therefore will not be treated as affirmative or opposing votes. The proposal to ratify the appointment of RSM US LLP as our independent registered public accounting firm for fiscal 2023 is considered routine and therefore may be voted upon by your broker if you do not give instructions to your broker. The other proposals set forth on the Notice of Annual Meeting are non-routine matters.

If you are not a shareholder of record but hold shares through a broker, bank, trustee, or other nominee as custodian (i.e., in street name), you may also be requested to present evidence of your beneficial ownership as of the record date, such as an account statement, a copy of the voting instruction card provided by your custodian, a legal proxy provided by your custodian, or other similar evidence of ownership. Please see “How do I vote my shares?” above for additional requirements, including obtaining a legal proxy from the broker, bank, trustee or nominee that holds your shares if you intend to both attend and vote your shares in person.

Shareholders who intend to present a shareholder proposal at the Fiscal 20212024 Annual Meeting without including such proposal in the Company’s proxy materials must provide the Company notice of such proposal no later than August 17, 202013, 2023 (90 days prior to the one-year anniversary of the Annual Meeting). The Company reserves the right to reject, rule out of order, or take appropriate action with respect to any proposal that does not comply with these and other applicable requirements.

Shareholders who intend to present a director nomination at the Fiscal 20212024 Annual Meeting must provide the Company notice of such nomination no later than August 17, 202013, 2023 (90 days prior to the one-year anniversary of the Annual Meeting) and no earlier than July 18, 202014, 2023 (120 days prior to the one-year anniversary of the Annual Meeting). The Company reserves the right to reject, rule out of order, or take appropriate action with respect to any nomination that does not comply with these and other applicable requirements.

In addition to satisfying the foregoing requirements, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees for election at the Fiscal 2024 Annual Meeting, other than the Company’s nominees, must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act by September 12, 2023 (60 days prior to the one-year anniversary of the Annual Meeting).

If the Company does not receive notice of a shareholder proposal or director nomination intended to be submitted to the Fiscal 20212024 Annual Meeting by the dates set forth above, the authorized proxies for next year’ssuch annual meeting may vote on any such proposal in their discretion without notice of such proposal appearing in such proxy statement.

ELECTION OF DIRECTORS
(Proposal 1)

The Board is currently composed of eight directors. Seven individuals,directors, all of whom are current directors, have been nominated for re-electionelection at the Annual Meeting. John L. Erb was first identifiedAndrew J. Summers is standing for election to serve as a potential candidate by a shareholderdirector of the Company for the first time at this year’s Annual Meeting. His candidacy was evaluated and Gregory J. Fluet was first identified by a non-management director.  Each was then evaluatedrecommended by the Nominating and Governance Committee and he initially joined the Board in advance of its recommendation of their initial recommendation for service as a director.July 2022, pursuant to Board action in accordance with the Cooperation Agreement described further below.

If elected, each director will hold office until the Fiscal 20212024 Annual Meeting and until his or her successor is elected and qualified, or until his or her earlier death, resignation, disqualification or removal. Each of the director nominees has consented to be named in this proxy statement and to serve, if elected. The Company has no reason to believe that any of the director nominees named below will be unable or unwilling to serve as director if elected. If for any reason any nominee withdraws or is unable to serve as director (neither of which is expected at this time), the shares represented by all valid proxies will be voted for the election of a substitute nominee recommended by the Board or, alternatively, not voted for any nominee. William V. Eckles, a current director of the Company, is not standing for election and his term will expire as of the Fiscal 2020 Annual Meeting.

The Bylaws of the Company, as amended (the “Bylaws”), provide that the number of directors shall be determined by the shareholders annually. The Board has recommended that the number of directors be set at seven.eight. The Board believes that seveneight directors strikes an optimal balance between providingprovides diversity of viewpoints and expertise while allowing each director to influence the strategic direction of the Company. If each of the seven directorseight director nominees named in this proxy statement are elected at the Annual Meeting, then their election will be deemed to be shareholder approval of setting the number of directors at seven.eight.

Cooperation Agreement

As previously reported, on July 25, 2022, the Company entered into a Cooperation Agreement (the “Cooperation Agreement”) with Summers Value Partners LLC and certain of its affiliates signatory thereto (collectively, “Summers Value”). As of that date, Summers Value beneficially owned approximately 6.1% of the outstanding shares of our common stock. In connection with the Cooperation Agreement, the Company agreed to elect Andrew J. Summers to the Board effective as of July 25, 2022, and agreed to nominate him for election to the Board at the Annual Meeting. To facilitate his election, the Board increased its size from seven to eight directors. In addition, the Cooperation Agreement provides for director replacement rights during the standstill period described below, provided that Summers Value maintains beneficial ownership of at least 3.0% of the Company’s then-outstanding common stock. Mr. Summers would also be required to resign his directorship if Summers Value’s beneficial ownership falls below that threshold during the same period. The Cooperation Agreement also includes, among other provisions, certain standstill commitments by Summers Value, including but not limited to restrictions on Summers Value’s ability to (i) engage in any solicitation of proxies or consents, (ii) encourage any person to submit nominees in furtherance of a contested solicitation for the election or removal of directors, (iii) submit any proposal for consideration by shareholders of the Company at any annual or special meeting of shareholders or (iv) seek further representation on the Board. These restrictions apply during a standstill period that will terminate on the date that is the earlier of (A) 30 calendar days prior to the last date pursuant to which shareholder nominations for director elections are permitted pursuant to the Bylaws with respect to the Fiscal 2024 Annual Meeting or (B) the date that is 120 calendar days prior to the first anniversary of the Annual Meeting.

The Cooperation Agreement further provides that during the standstill period Summers Value will vote, subject to certain exceptions, (i) for all directors nominated by the Board for election at any annual or special meeting and (ii) in accordance with the recommendation of the Board on any other proposals or other business (other than certain extraordinary transactions) that comes before any annual or special meeting.

Nominees for Election as Directors at the Annual Meeting

The Board has nominated each of the following persons for election to serve as directors and recommends that shareholders vote “FOR”“FOR” the election of each such nominee:

BiographicalFurther information relating to each of the director nominees and their qualifications to serve is set forth below:

Stephen H. CraneyStan K. Erickson

Mr. Craney has served as Chairman of the Board since May 2012. Since 1984, Mr. Craney has founded and operated a number of successful companies, including RiverSide Electronics, Ltd., RiverBend Electronics, Ltd., RiverStar, Inc., Custom Control Systems, Inc., RiverStyks, LLC, and JMW Enterprises, Inc. Before becoming an entrepreneur, Mr. Craney worked as an engineer, having earned an electrical engineering degree from the University of Wisconsin-Madison. Mr. Craney is also an active member of a number of community groups, such as the Winona Historical Society. In addition, he has provided support and advice to startup companies for more than 20 years through a local entrepreneur network. Our Board believes that Mr. Craney’s experience developing companies with a strong record of growth, his technical knowledge in the electronics field, his research and development experience and his connections within the business community make him uniquely qualified to serve as a director.

John L. Erb

Mr. Erb has served as chief executive officer and president of CHF Solutions, Inc. (Nasdaq: CHFS) since 2015, and as a member of its board of directors and chairman since 2012. He has also served as chief executive officer and chairman of NeuroMedic, Inc., a private company he co-founded, since 2014. Previously, Mr. Erb served as chief executive officer, from 2007 to 2018, of NuAx, Inc. (formerly Cardia Access, Inc.), a private medical device company involved in developing new devices for the treatment of heart disease. Mr. Erb’s prior board experience includes service as a director of SenoRx, Inc., then a Nasdaq-listed company, from 2001 until its acquisition in 2010; and as chairman of the board of Vascular Solutions, Inc., then a Nasdaq-listed company, until its acquisition in 2017. Mr. ErbErickson currently serves as chairman of the board of Osprey Medical, Inc. (ASX:OSP) and as a director of MiroMatrix, a private biotechnology company, since 2017. Mr. Erb has a Bachelor of Arts, Business Administration, concentration in finance from California State University.  Our Board believes that Mr. Erb’s experience as an executive officer of early stage and mature medical device companies, his marketing and operations experience, his board experience and his connections within the medical device community make him uniquely qualified to serve as a director.

Stan K. Erickson

Mr. Erickson has served on the Board since November 2014.Mr. Erickson is currently President and Chief Executive Officer of Liberty Capital, Inc., a company he co-founded in September 2013 to provide capital and advisory services. In November 2012, he retired from a 32-year career at ZieglerCat,services to both pre- and post-commercialization organizations in various industries, including medical device and technology. Prior to founding Liberty Capital, Mr. Erickson served as President and Chief Operating Officer of Ziegler Inc., one of the largest Caterpillar dealers in the U.S. whereOver his 32-year career at Ziegler, he most recently served as Presidentheld several positions of increasing responsibility and Chief Operating Officer.was responsible for developing and executing on strategies to achieve market share gains and increase territory coverage. Mr. Erickson is an experienced board member in both public and private organizations and has a track record of providing leadership and governance through various business cycles with a strong acumen for operations and financial results including merger, acquisition and exit strategies. Mr. Erickson currently serves on the board of directors of Titan Machinery, Inc. (NASDAQ: TITN), Recon Robotics, Inc., University of Northwestern-St. Paul and Liberty Capital, Inc. He is a veteran of the United States Marine Corps earned a business degree from the University of Minnesota, a CPA Certification and began his business career as an auditor and tax professional.professional at Baker Tilly US, LLP. Mr. Erickson serves onreceived a B.S. in Business Administration from the boardUniversity of directors of Titan Machinery, Inc. (Nasdaq)Minnesota and several private company boards, advisory committees and associations. Our Board believes that Mr. Erickson will be an asset to the Board due tois a Certified Public Accountant. Mr. Erickson’s extensivesignificant experience as a board member in financeboth the public and management.private sector, and in business operations, financial reporting and M&A activity, qualify him to serve as a member of our Board.

Gregory J. Fluet

Mr. Fluet has servedcurrently serves as Chief Operating Officer for Rebiotix, a consultant with Ferring Pharmaceuticals Inc.company focused on microbiome commercialization and partnering since April 2018.  He served as chief business officerrevolutionizing the treatment of debilitating diseases through microbiome-based research. Since November 2016, he has worked at Rebiotix Inc.,in both contract and permanent roles, including serving as Chief Business Officer from April 2017 until itsthe company’s acquisition by Ferring Pharmaceuticals in April 2018. Prior to that he startedhis role at Rebiotix, Mr. Fluet founded a strategic consulting practice working with variousstartup life science companies, including Rebiotix.companies. Previously, heMr. Fluet served as chief executive officer atChief Executive Officer of Urologix, Inc., then a public company from 2012 to January 2016.  Heand developer of minimally invasive office-based Benign Prostatic Hyperplasia (BPH) therapies. Over his eight-year career at Urologix, he also served as its interim chief financial officerChief Financial Officer from August 2014 to May 2015 and as its executive vice presidentExecutive Vice President and chief operating officerChief Operating Officer from 2008 to 2012. From 2002 to 2008, he was employedserved as an associateAssociate at Sapient Capital Management, LLC, a healthcare focused venture capital fund. Mr. Fluet earnedreceived a Bachelor of Science DegreeB.S. in Mechanical Engineering from Stanford University. Our Board believes that Mr. Fluet’s experiencebackground as an executive officer ofa healthcare investor and medical device companies, sales operations,executive, including experience in M&A transactions, public and private financing, investor relations, business development, commercial operations, manufacturing operations and healthcare related financial and investment experience makereporting, qualify him uniquely qualified to serve as a director.member of our Board.

Joseph L. Galatowitsch

Mr. Galatowitsch most recently served as a Partner and Medtech practice leader at Guidehouse Consulting, previously known as Navigant, a leading global provider of consulting services to the public and commercial markets with broad capabilities in management, technology, and risk consulting. Prior to Guidehouse, Mr. Galatowitsch co-founded and served as President of Dymedex Consulting, LLC from January 2008 through August 2016, where he pioneered and provided new-to-the-world conceptual frameworks for assessing opportunities and driving clinical adoption of disruptive new medical technologies. Mr. Galatowitsch also held various positions of increasing responsibility at Medtronic PLC and 3M Company. At Medtronic, he led and coordinated global market development efforts in Medtronic’s cardiac rhythm management division, contributing to a dramatic increase in penetration of implantable defibrillators and pacemakers in the U.S. and most international markets. Mr. Galatowitsch previously served on the Board of Medical Alley, formerly known as LiveScience Alley, from 2011 to 2021, which is the Global Epicenter of Health Innovation and Care® and is the birthplace of implantable medical technology, collaborative care delivery and innovative health plan models. Mr. Galatowitsch received a B.S. in Biomedical Engineering from Marquette University, and a MBA in Marketing from University of St. Thomas’s Opus College of Business. Mr. Galatowitsch’s extensive experience in the medical technology management, commercial execution, global market development, marketing and business strategy, management, strategic planning, consulting and sales, qualify him to serve as a member of our Board.

Lee A. Jones

Ms. Jones has servedcurrently serves as the Senior Advisor (formerly President and Chief Executive OfficerOfficer) of Rebiotix, Inc., a Ferring Pharmaceuticals company. Rebiotix is a biotechnology company that developsdeveloping and commercializescommercializing medical therapies sincethat she co-founded in 2011. She has more than 30 years of healthcare and medical device industry experience. ShePrior to founding Rebiotix, Ms. Jones served on the boards of directors of Algos Preclinical Services, Inc. from [open] to 2013 and Uroplasty, Inc. from 2006 through June 2014. From 2010 to 2011, she was aas CEO-in-Residence at the University of Minnesota Venture Center and from 2009October 2010 to 2010, Ms. Jones was theJune 2011 and Chief Administrative Officer of the Schulze Diabetes Institute of the University of Minnesota.Minnesota from February 2009 to October 2010. Prior to her position at the University, Ms. Jones was the President and Chief Executive Officer of Inlet Medical, a privately held medical device company making innovative laparoscopic surgical kits for procedures in women’s health, until it was acquired by Cooper Surgical in 2006. Prior to this, Ms. Jones spent 14 years at Medtronic PLC, where she developed and commercialized several innovative products for new markets for the company, including the company’s first angioplasty catheters and the first use of the company’s electrical stimulation technology for solving urinary incontinence. Ms. Jones has previously served on the boards of directors of Algos Preclinical Services, Inc., from 2010 to 2013 and Uroplasty, Inc., from 2006 to 2014. Ms. Jones received a Bachelor of Science degreeB.S. in Chemical Engineering from the University of Minnesota and an Executive Management degree from the Carlson School of Management at the University of Minnesota. Our board believes that Ms. Jones’ experience operating a company in thesignificant healthcare and medical device industry her experience as an executive officer of a medical products company, her previous board experience and connections within the medical device community makecorporate board service, as well as clinical and regulatory experience, qualify her uniquely qualified to serve as a director.member of our Board.

Kathleen S. Skarvan

Ms. Skarvan currently serves as President and Chief Executive Officer of Electromed Inc., having joined the Company as CEO in 2012 as Chief Executive Officer, became a director in 2013 and was appointed2012. Prior to the additional position of President in August 2015.Electromed, Ms. Skarvan served as Vice President of Operations at OEM Fabricators, a leading custom metal fabrication company specializing in building components, from September 2011 to October 2012. Previously,Prior to that, Ms. Skarvan served in various roles atas Hutchinson Technology Incorporated, most recently as theInc.’s SVP and President of the Disk Drive Components Division from April 2007 until March 2011. As President of the Disk Drive Components Division,Over her 29-year career at Hutchinson, Ms. Skarvan managedheld several positions of increasing seniority and was responsible for a public company division with annual revenues in excess of $300 million.million, managing 3,500 employees across R&D, marketing, sales and technical support in five countries. Ms. Skarvan also served as a Senior Vice President of Hutchinson Technology Incorporated from December 2010 to March 2011, and as Vice President of Sales & Marketing of the Disk Drive Components Division from October 2003 until April 2007. She has served on the Board of Trustees of the St. Cloud State University Foundation since Junefrom 2015 until 2021, and in November 2018 she joined the board of directors of Citizens Community Federal National Association, a wholly-owned subsidiary of Citizens Community Bancorp, Inc. and a member of the Risk Management Committee. In 2022, she was elected to the board of directors of Citizens Community Bancorp, Inc. (NASDAQ: CZWI) and is a member of the Audit Committee. Ms. Skarvan hasreceived a bachelor’s degreeB.A. in Mass Communication from St. Cloud State University. Among other attributes, skills, experiences and qualifications, our Board believes that, as the President and Chief Executive Officer of the Company, Ms. Skarvan is the person most familiar with the Company’s day to daySkarvan’s experience leading high growth companies, extensive operations and most capablemarketing experience, and track record of effectively identifying strategic priorities and leading the execution of strategy.the Electromed’s strategy, uniquely qualify her to serve as a member of our Board.

Andrew J. Summers

Mr. Summers currently serves as the Managing Member of Summers Value Partners LLC (“Summers Value Partners”), an alternative investment management firm with a focus on small and micro-cap companies in the global healthcare sector. Mr. Summers has served in this role since March 2018. Prior to founding Summers Value Partners, Mr. Summers was an investment professional and equity analyst at Janus Henderson Group plc (d/b/a Janus Henderson Investors), a leading global active asset manager, from 2008 to February 2018, where he specialized in investing across the global healthcare sector. From 2004 to 2008, Mr. Summers served as the Managing Member of Silvergate Capital Management LLC, a long/short healthcare hedge fund that he founded. Mr. Summers started his investment career in 1998 at INVESCO Funds Group, Inc., an investment management firm, where he ultimately became co-portfolio manager of a $3.5 billion healthcare fund. Mr. Summers served as a director of Scott’s Liquid Gold-Inc. (OTC:SLGD), a household and personal care products company, from May 2019 to May 2020. Mr. Summers earned his bachelor’s degree in business administration from the University of Wisconsin-Whitewater and master’s degree in finance from the University of Wisconsin-Madison. Mr. Summers is a Chartered Financial Analyst (CFA). In addition to the requirements of the Cooperation Agreement, Mr. Summers’ perspective as a significant shareholder of the Company, together with his financial and industry knowledge, qualify him to serve as a member of our Board.

Dr. George H. Winn, D.D.S.Kathleen A. Tune

Dr. Winn is retiredMs. Tune currently serves as the Chief Financial Officer, Chief Operating Officer and Board Chair of Marani Health, Inc., a leading development stage maternal and fetal health company. Ms. Tune has also served as Managing Partner with Capita3, an early-stage venture capital fund focused on women-led healthcare startup founders, since January 2019. In January 2017, Ms. Tune founded the Board’s Vice Chairmanhealthcare investment firm Fourth Element Capital, investing in healthcare technology companies, where she continues to serve as Managing Director. Ms. Tune is a former Partner at Thomas, McNerney & Partners, where she led and managed an investment portfolio with a primary focus in healthcare technologies from May 2012 through November 2014. He practiced dentistry for over 50 years withAugust 2003 to December 2019. Ms. Tune has served on the corporate boards of Marani Health, Inc., since 2018, Visura Technologies, Inc., since 2019 and Agitated Solutions, Inc., since 2020. Ms. Tune received a B.S. in Biochemistry and Microbiology from Minnesota State University, and holds an emphasisM.S. degree in orthodontics and facial pain management in New Prague, Minnesota. He holds a Bachelor of Arts from Mankato State College, a Bachelor of ScienceVeterinary Microbiology from the University of Minnesota as well as an MBA from the University of Minnesota’s Carlson School of Management, where she was a Robert and Gail Buuck Scholar. Ms. Tune’s leadership experience in capital and growth equity investing, corporate strategy, business development, investment and capital markets, investor relations and finance, sales, marketing and reimbursement strategies, qualify her to serve as a member of our Board.

Andrea M. Walsh

Ms. Walsh currently serves as President and Chief Executive Officer of HealthPartners, a $7.5 billion Minnesota-based non-profit integrated health system that provides care, health support, insurance coverage, research and education programs. Over her 28-year career with HealthPartners, Ms. Walsh has held several positions of increasing responsibility, including as Executive Vice President and Chief Marketing Officer, from April 2002 to May 2017, and as Senior Vice President and Corporate Counsel from 1994 to 1999, and is responsible for developing the organization’s vision and strategy to deliver top quality, affordable, best care and experience in the market. In her role as President and Chief Executive Officer, Ms. Walsh manages a team of approximately 26,000 people, including a multi-specialty group practice with over 1,700 physicians and 900 advanced practice clinicians, which collectively serve more than 1.2 million patients in Minnesota and Wisconsin, and 1.8 million members across the country through its health plan, network and services. Ms. Walsh has served on the boards of directors of Constellation, a medical professional liability mutual insurance company, since 2016 and YMCA of the North, since 2019. Ms. Walsh holds Business Administration and English degrees from the University of Kansas and a D.D.S.Juris Doctorate from the University of Minnesota School of Dentistry. He has servedLaw School. Ms. Walsh’s experience as an associate clinical professor in the Department of Operative Dentistry and participatestop executive at a large healthcare organization in a medical ethics programhighly regulated marketplace, and her extensive knowledge of the American College of Dentists at the University of Minnesota School of Dentistry. Dr. Winn previously served on the University of Minnesota Foundation Board of Trustees, which included service on its executivehealthcare and finance committees, from 2007 through 2016. Our Board believes that, in additioninsurance industry, qualify her to the vast industry relationships that Dr. Winn has developed, his education and experience give him insight into the medical device industry that is valuable in his roleserve as a director.member of our Board.

Required Vote and Board Recommendation

The Board recommends that you vote “FOR”“FOR” each of the nominees to the Board, thereby setting the number of directors at seven.eight. The election of each nominee requires the affirmative vote of a plurality of the voting power of the shareholders present, whether in personelectronically during the Annual Meeting or by proxy, and entitled to vote at the Annual Meeting, provided that a quorum is present. Except as otherwise directed, the proxies will vote all valid proxies for the seveneight nominees identified above.

RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal 2)

The Board, acting on the recommendation of its Audit Committee, has selected RSM US LLP (“RSM”) as the Company’s independent registered public accounting firm for fiscal 2020.2023. RSM was the Company’s independent registered public accounting firm for the most recently completed fiscal year.

Notwithstanding its selection of RSM, the Audit Committee, in its discretion, may appoint another independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interests of the Company and its shareholders. If the appointment of RSM is not ratified by our shareholders, the Audit Committee may reconsider whether it should appoint another independent registered public accounting firm.

A representative of RSM is expected to be present at the Annual Meeting, will have an opportunity to make a statement if he or she desires to do so, and will be available to respond to appropriate questions regarding preparation of the Company’s financial statements.

Audit Fees

The following table presents fees billed by RSM to the Company for the audit of the Company’s annual financial statements, the review of the Company’s interim financial statements, and various other audit and non-audit services provided in connection with the Company’s fiscal year ended June 30, 2019,2022, or “fiscal 2019,2022,” and the fiscal year ended June 30, 2018,2021, or “fiscal 2018.2021.”

RSM provided no other services to the Company in fiscal 20192022 or fiscal 20182021 that are not included above.

Audit Committee Pre-Approval

Pursuant to its written charter, the Audit Committee is responsible for pre-approving all audit and permitted non-audit services to be performed for the Company by its independent registered public accounting firm or any other auditing or accounting firm. During the year, circumstances may arise that willcould require the engagement of the independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, we will obtain pre-approval of the Audit Committee before engaging the independent registered public accounting firm.

All audit services and audit-related services incurred during fiscal 20192022 and fiscal 20182021, as applicable, were pre-approved by our Audit Committee.

Required Vote and Board Recommendation

The Board recommends that you vote “FOR” the ratification of the appointment of RSM as the Company’s independent registered public accounting firm.firm for fiscal 2023. Approval of the proposal requires the affirmative vote of a majority of the voting power of the shareholders present, whether in personelectronically during the Annual Meeting or by proxy, and entitled to vote at the Annual Meeting, provided that a quorum is present.

ADVISORY APPROVAL OF EXECUTIVE COMPENSATION
(Proposal 3)

We are seeking a vote of shareholders to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this proxy statement.

We seek to closely align the interests of our named executive officers with the interests of our shareholders. We designed our compensation program to reward our named executive officers for their individual performance and contributions to our overall business objectives, and for achieving and surpassing the financial goals set by our Board upon recommendation of its Personnel and Compensation Committee.

At our annual meeting of shareholders held in 2018,2021, our executive compensation program was approved on an advisory basis, with approximately 85%96% of the votes cast in favor of the corresponding proposal. Our Board and its Personnel and Compensation Committee believe that this vote reflected our shareholders’ support for the decisions made with respect to the compensation of our named executive officers for fiscal 2018.2021.

The vote on this resolution is not intended to address any specific element of compensation. Instead, the vote relates to the overall compensation of our named executive officers, as described in this proxy statement in accordance with the compensation disclosure rules of the SEC.

Accordingly, we ask our shareholders to vote on the following resolution at the Annual Meeting:

RESOLVED, that the Company’s shareholders approve, on a non-binding, advisory basis, the compensation of the named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the summary compensation table and the other related tables and disclosure.

While the Board and especially the Personnel and Compensation Committee intend to carefully consider the results of the voting on this proposal when making future decisions regarding executive compensation, the vote is not binding on the Company, the Personnel and Compensation Committee or the Board and is advisory in nature. To the extent there is any significant vote against this Proposal 3, the Personnel and Compensation Committee will evaluate what actions may be necessary to address our shareholders’ concerns.

Required Vote and Board Recommendation

The Board recommends that you vote “FOR” the approval, on a non-binding and advisory basis, of the compensation of the named executive officers. Approval of the proposal requires the affirmative vote of a majority of the voting power of the shareholders present, whether in personelectronically during the Annual Meeting or by proxy, and entitled to vote at the Annual Meeting, provided that a quorum is present. This vote is advisory and is not binding on the Company, the Board or the Personnel and Compensation Committee.

ADVISORY RECOMMENDATION REGARDING FREQUENCY OF EXECUTIVE COMPENSATION VOTES
(Proposal 4)

As required under the Dodd-Frank Act and SEC rules, shareholders have an opportunity at annual meetings of shareholders to cast a non-binding advisory vote on how frequently future executive compensation votes should be conducted by the Company. Shareholders may indicate whether they prefer a vote on executive compensation every one, two or three years, or abstain on the question. The Company is required to solicit shareholder votes on the frequency of future executive compensation votes at least once every six years, although we may seek shareholder input more frequently.

The Board recommends that the shareholders select a frequency of 1 YEAR for future executive compensation votes. The Board has determined that continuing to solicit a vote each year is preferable because it provides the most consistent opportunity for feedback on our compensation programs, policies and decisions.

Effect of Vote

The frequency selected by the shareholders for future executive compensation votes is not binding on the Board or its Personnel and Compensation Committee. However, the Board will give the frequency selected by the shareholders due consideration in determining the frequency of future votes on executive compensation.

At the annual meeting held in 2013, shareholders expressed a preference for holding an advisory, non-binding vote to approve executive compensation on an annual basis. In light of that preference, the Board determined that it would solicit a nonbinding advisory vote to approve the compensation of our executive officers every year until the next required advisory vote regarding the frequency of executive compensation votes.

Required Vote and Board Recommendation

The Board recommends that you vote “1 YEAR” for the frequency executive compensation votes. If a quorum is present, the alternative receiving the greatest number of votes relative to the votes cast for the other alternatives will be deemed the alternative recommended by the shareholders.

CORPORATE GOVERNANCE

Director Independence

Our Board has determined that each of Mr. Craney, Mr. Erb, Mr. Erickson, Mr. Fluet, Mr. Galatowitsch, Ms. Jones, Mr. Summers, Ms. Tune and Mr. WinnMs. Walsh are “independent directors” as defined in the rules of the NYSE American Stock Exchange. None of our directors are related to any other director, director nominee or executive officer of the Company.

In determining director independence, the independenceBoard evaluated Ms. Walsh’s employment with HealthPartners because HealthPartners and certain of its affiliates have been customers of our directors,company. Ms. Walsh had no involvement in arranging any transactions with our Board considered that,company, the transactions were on arms-length terms, she had no material interest in fiscal 2019, the Company purchased approximately $52,000 in telecommunications services from Blue Earth Valley Communications, Inc., of which Mr. Eckles is a significant shareholder. The purchases were made on terms believed to be consistent with what could be obtained in an arm’s length transaction with an independent third partysuch transactions and the amounts involved are believedsignificantly less than 1% of both our company’s and HealthPartners’ annual revenues. Accordingly, the Board concluded the transactions with HealthPartners are both beneficial and fair to be immaterialour company and, if she is elected, would not interfere with Ms. Walsh’s ability to exercise independent judgment in amount for all parties involved. carrying out her responsibilities as a member of the Board.

Director Attendance at Annual Meetings

Directors’ attendance at annual meetings can provide shareholders with an opportunity to communicate directly with members of the Board about matters concerning the Company. The Company encourages all directors to attend the Company’s annual meetings (including by electronic means when available), but it does not have a formal attendance policy. All of the Company’s then current directors attendedwere present for the Fiscal 20192022 Annual Meeting of Shareholders, with the exception of Mr. Erb and Mr. Fluet, who were elected to the Board in August 2019.Shareholders.

Board Leadership Structure

We have separate individuals serving as ChairmanChair of the Board and as Chief Executive Officer because we believe independent directors and management have different perspectives and roles in strategy development. The Chief Executive Officer is responsible for setting the strategic direction of the Company and managing the day-to-day leadership and performance of the Company, while the ChairmanChair provides guidance to the Chief Executive Officer, sets the agenda for meetings of the Board and presides over meetings of the full Board. We believe this structure promotes active participation of the independent directors and strengthens the role of the Board in fulfilling its oversight responsibility and fiduciary duties to our shareholders while recognizing the day-to-day management direction of the Company by the Chief Executive Officer. Ms. Jones currently serves as Chair of the Board.

Risk Oversight

It is management’s responsibility to manage risk and bring to the Board’s attention the most material risks to the Company. The Board has oversight responsibility of the processes established to report and monitor systems for material risks applicable to the Company. The Audit Committee provides oversight of management with respect to enterprise-wide risk management, which focuses primarily on risks relating to the Company’s ability to maintain appropriate levels of credit and insurance coverage, financial and accounting risks, and legal and compliance risks, including oversight of internal controls over financial reporting. In addition, the Personnel and Compensation Committee considers risks related to the attraction and retention of talent and risks relating to the design of compensation programs and arrangements. The Nominating and Governance Committee considers risks and best practices relating to corporate governance policies and procedures. The full Board considers strategic risks and opportunities and regularly receives detailed reports from management and the committees, with respect to their areas of responsibility for risk oversight.

Policies as to Hedging and Company Securities

Our insider trading policy provides that company directors, officers and other employees (and their designees) are prohibited from, among other things: (a) purchasing company securities on margin or pledging company securities; (b) short selling company securities; (c) buying or selling put or call options on company securities; (d) purchasing any financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engaging in transactions that are designed to or have the effect of hedging or offsetting any decrease in the market value of equity securities (i) granted to the individual by the company as part of the compensation of the individual or (ii) held, directly or indirectly, by the individual; or (e) engaging in limit orders or other pre-arranged transactions that execute automatically, except for “same-day” limit orders and approved 10b5-1 plans. Certain family and household members and other persons or entities whose decisions are directed, influenced or controlled by a covered person are also subject to the prohibition.

Board and Committee Meetings

During fiscal 2019,2022, the Board held fivesix meetings. In addition, directors frequently communicate with each other informally and, when appropriate, take action by written consent of all directors, or in the case of an action that does not require shareholder approval, the number of directors required to take the action at a meeting, as permitted by the Minnesota Business Corporation Act and the Company’s Articles of Incorporation, as amended. Each director attended at least 75% of the meetings of Board and any committee on which they serve during the most recently completed fiscal year, with the exception of Mr. Erb and Mr. Fluet, who were elected to the Board in August 2019.year.

Committee Membership

The Board has threefour standing committees: the Audit Committee, the Personnel and Compensation Committee, and the Nominating and Governance Committee, and the Finance and Strategy Committee. The following table sets forth the current membership of each of the Company’s standing committees:

Our Board has evaluated independence for the members of each applicable committee in accordance with NYSE American rules and, with respect to the members of the Audit Committee, Rule 10A-3 of the Exchange Act. The membership and responsibilities of each applicable committee complies with the listing requirements of the NYSE American.

Audit Committee

Under its charter, the Audit Committee must consist of at least three independent directors and its composition must otherwise satisfy NYSE American and SEC requirements applicable to audit committees. The principal functions of the Audit Committee are to evaluate and review the Company’s financial reporting process and systems of internal controls. The Audit Committee evaluates the independence of the Company’s independent registered public accounting firm, recommends selection of the Company’s independent registered public accounting firm to the Board, approves fees to be paid to our independent registered public accounting firm, and reviews the Company’s financial statements with management and the independent registered public accounting firm. The Audit Committee has recommended to the Board the appointment of RSM US LLP to serve as the Company’s independent registered public accounting firm for fiscal 2020. The Audit Committee operates under a written charter approved by the Board, a copy of which is available in the “Investor Relations” section of the Company’s website at www.smartvest.com.2023. The Audit Committee held fourfive meetings during the most recently completed fiscal year.

Our Board has affirmatively determined that each of the members of the committee satisfy the additional independence requirements for audit committee members pursuant to the NYSE American LLC Company Guide and the rules and regulations promulgated by the SEC. The Board has further determined that Mr. Erickson qualifies as an “audit committee financial expert” as defined by Item 407(d)(5) of Regulation S-K under the Securities Act of 1933, as amended.

Report of the Audit Committee

In accordance with its written charter adopted by the Board, as amended, the Audit Committee assists the Board with fulfilling its oversight responsibility regarding the quality and integrity of the accounting, auditing and financial reporting practices of the Company. A copy of the Audit Committee charter, which has been adopted by the Board and further describes the role and responsibilities of the Audit Committee, is available online in the “Investor Relations” section of our website at www.smartvest.com.

In discharging its duties, the Audit Committee:

Based upon the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2019,2022, for filing with the Securities and Exchange Commission.SEC.

Personnel and Compensation Committee

Our Board has affirmatively determined that each of the members of the committee satisfy the additional independence requirements for compensation committee members pursuant to the NYSE American LLC Company Guide.

The Board has authorized the Personnel and Compensation Committee to, among other duties, develop the Company’s compensation strategy, review compensation policies and plans for the Company’s executive officers, and administer the Company’s compensation plans. Neither the Personnel and Compensation Committee nor the Board engages compensation consultants to assist in determining or recommending the amount or form of compensation for executive officers or directors. The Chief Executive Officer may give the committee input in regard to the compensation of the Chief Financial Officer, but the Chief Executive Officer is not present during voting or deliberations relating to her own compensation. The committee operates under a written charter approved by the Board, a copy of which is available in the “Investor Relations” section of our website at www.smartvest.com. The Personnel and Compensation Committee held fourfive meetings during the most recently completed fiscal year.

Nominating and Governance Committee

Our Nominating and Governance Committee is responsible for oversight of our corporate governance policies and procedures, our codes of conduct and other corporate governance matters. In addition, our Nominating and Governance Committee makes recommendations to our Board regarding candidates for directorships and the size and composition of our Board and its committees. The Nominating and Governance Committee acts pursuant to a written charter approved by the Board, a copy of which is available in the “Investor Relations” section of our website at http://investors.smartvest.com/governance-documents.www.smartvest.com. The Nominating and Governance Committee held one meetingfive meetings during the most recently completed fiscal year.

Director Nominations

The Nominating and Governance Committee is responsible for identifying and recommending director nominees for nomination by the full Board. Shareholders may recommend a nominee to be considered by the Nominating and Governance Committee by submitting a written proposal to the ChairmanChair of the Board, at 500 Sixth Avenue Northwest, New Prague, Minnesota 56071. Any notice of a shareholder nomination must satisfy the timing and content requirements of ourthe Bylaws and must be accompanied by a writingwritten statement from the proposed nominee consenting to being named as a nominee and to serve as a director if elected.

When selecting candidates for recommendation to the Board, the Nominating and Governance Committee considers the attributes of the candidates and the needs of the Board and reviews all candidates in the same manner, regardless of the source of the recommendation. In evaluating director nominees, the Nominating and Governance Committee seeks to confirm that candidates meet certain minimum qualifications, including being able to read and understand basic financial statements, being familiar with our business and industry, having high moral character and mature judgment, and possessing the ability to work collegially with others. In addition, factors such as the following are also considered:

The Nominating and Governance Committee does not have a formal diversity policy at this time. However, as summarized above, the Nominating and Governance Committee seeks to nominate candidates with a diverse range of knowledge, experience, skills, expertise, and other qualities that will contribute to the overall effectiveness of the Board. Moreover, potential nominees are not discriminated against on the basis of sex, religion, national origin, sexual orientation, disability or other basis proscribed by law.

Finance and Strategy Committee

The Finance and Strategy Committee was established by the Board in fiscal 2022 in accordance with the terms of the initial Cooperation Agreement. The Board has authorized the Finance and Strategy Committee to, among other things, review the Company’s business and make recommendations to the Board with respect to the Company’s strategy and opportunities to enhance shareholder value, including but not limited to strategic growth plans, long-term business plans, shareholder engagement, research and development, capital allocation, and buy- or sell-side M&A transactions. The Finance and Strategy Committee acts pursuant to a written charter approved by the Board. The Finance and Strategy Committee held ten meetings during the most recently completed fiscal year.

SECURITY HOLDER COMMUNICATIONS TO THE BOARD OF DIRECTORS

Any shareholder wishing to communicate with the Board should send the communication, in written form, to the President and Chief Executive Officer of the Company at the Company’s principal place of business at 500 Sixth Avenue Northwest, New Prague, Minnesota 56071. The President and Chief Executive Officer will promptly send the communication to each member of the Board identified on the communication.

 

Section 16(a) of the Exchange Act requires that our directors and executive officers file initial reports of ownership and reports of changes in ownership with the SEC. Directors and executive officers are required to furnish us with copies of all Section 16(a) forms they file. Based solely on a review of the copies of such forms furnished to us and written representations from our directors and executive officers, all Section 16(a) filing requirements were met for fiscal 2022, except that one Form 4 reporting two award transactions filed by Mr. Holland was delinquent due to a delay in obtaining credentials for electronic filing.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth certain information with respect to the beneficial ownership of our outstanding common stock as of September 16, 201914, 2022 by (i) each of our named executive officers; (ii) each of our directors; (iii) all of our executive officers, directors and director nominees as a group; and (iv) each beneficial owner of 5% or more of our outstanding common stock. Ownership percentages are based on 8,445,8518,492,198 shares of common stock outstanding as of the close of business on September 16, 2019.14, 2022.

 

Beneficial ownership is determined in accordance with the rules of the SEC. To our knowledge and subject to applicable community property laws, each of the holders of common stock listed below has sole voting and investment power as to the common stock owned unless otherwise noted. The table below includes the number of shares of common stock underlying options that are exercisable within 60 days from September 16, 2019.14, 2022. Except as otherwise noted below, the address for each director or officer listed in the table is c/o Electromed, Inc., 500 Sixth Avenue Northwest, New Prague, Minnesota 56071.

 

Name		Amount and Nature of Beneficial Ownership			Percentage of Outstanding Shares
Executive Officers and Directors
Kathleen S. Skarvan		333,990	(a)		3.9	%
Jeremy T. Brock		190,501	(b)		2.2	%
Stephen H. Craney		561,901			6.7	%
John L. Erb		—			—
William V. Eckles		194,994			2.3	%
Stan K. Erickson		19,317			*
Gregory J. Fluet		—			—
Lee A. Jones		15,183			*
George H. Winn		607,891	(c)		7.2	%
Executive officers and directors as a group (9 persons)		1,923,777	(d)		21.9	%
Zenith Sterling Advisers LLC 9075 Deer Ridge Drive Bloomington, IL 61705		489,700	(e)		5.8	%
Tocqueville Asset Management L.P. 40 West 57th Street, 19th Floor New York, NY 10019		439,700	(f)		5.2	%

Name		Amount and Nature of Beneficial Ownership			Percentage of Outstanding Shares
Executive Officers and Directors
Kathleen S. Skarvan		469,072	(a)		5.4	%
Christopher G. Holland		12,900			*
Michelle C. Wirtz		5,600			*
Michael J. MacCourt(b)		32,000			*
Stan K. Erickson		26,817			*
Gregory J. Fluet		9,000			*
Joseph L. Galatowitsch		3,000			*
Lee A. Jones		25,183			*
Andrew J. Summers		521,693	(c)		6.1	%
Kathleen A. Tune		3,000			*
Andrea M. Walsh		6,000			*
Current executive officers, directors and nominees as a group (10 persons)		1,082,265	(d)		12.3	%
Stephen H. Craney 25340 Sandpiper Lane Winona, MN 55987		587,901	(e)		6.9	%
G&J Winn Family LLLP and George H. Winn 27541 Country Hollows Lane New Prague, MN 56071		583,691	(f)		6.9	%
Summers Value Partners LLC 90 Madison Street, Suite 303 Denver, CO 80206		521,693	(c)		6.1	%
The Radoff Family Foundation and Bradley L. Radoff 2727 Kirby Drive, Unit 29L Houston, TX 77098		475,000	(g)		5.6	%
Punch & Associates Investment Management, Inc. 7701 France Ave. So., Suite 300 Edina, MN 55435		436,735	(h)		5.1	%

 

*

*

Less than 1%

(a)

(a)

Includes options to purchase 205,001 shares. 279,767 shares of common stock and 45,749 shares of common stock held by a trust, of which Ms. Skarvan is a co-trustee and beneficiary.

(b)

(b)

Mr. MacCourt resigned as Chief Financial Officer of the Company effective as of June 1, 2022 and terminated his employment on July 1, 2022.

(c)

Summers Value Partners LLC and Mr. Summers share voting and dispositive power for all of the shares reported. Summers Value Fund LP and its general partner, Summers Value Partners GP LLC, share voting and dispositive power for 323,124 shares. SVP Deal Fund 1 LP and its general partner, SVP Deal Fund 1 GP LLC, share voting and dispositive power for 198,569 shares. Mr. Summers is the managing member for each of the foregoing entities.

(d)

Includes options to purchase 138,001 shares. 279,767 shares of common stock.

(c)

(e)

Based on Form 4 filed with the SEC on May 19, 2021, reporting holdings as of May 14, 2021.

(f)

Based on Schedule 13G/A filed with the SEC on February 16, 2021, reporting holdings as of December 31, 2021. Includes 446,303 shares of common stock owned by G&J Winn Family LLLP, of which Dr. Winn and his spouse are general partners.

(d)	Includes options to purchase 343,002 shares.

(e) (g)

Based on Schedule 13D filed with the SEC on June 13, 2019.  This statement was being filed by (i) Zenith Sterling Advisers LLC, a Delaware limited liability company (“Zenith”), and (ii) Joshua J. Peters, the sole managing member of Zenith (“Peters”).  Zenith is an investment adviser that holds discretionary voting control and dispositive power over the securities in its client accounts and as such may be deemed to indirectly beneficially own such securities. Peters is the sole managing member of Zenith and as a result may be deemed to be an indirect beneficial owner of shares held in the client accounts managed by Zenith.

(f)	Based on Schedule 13G filed with the SEC on January 31, 2019,May 26, 2022, reporting holdings as of May 25, 2022. Includes 407,500 shares of common stock owned by Bradley L. Radoff and 67,500 shares of common stock owned by The Radoff Family Foundation, of which Mr. Radoff serves as a director.

(h)

Based on Schedule 13G filed with the SEC on February 14, 2022, reporting holdings as of December 31, 2018. 2021.

18 

EXECUTIVE COMPENSATION

 

The following discussion describes the compensation awarded to our twothe following executive officers of the Company during fiscal 2022 (collectively, our “named executive officers”), namely Kathleen S. Skarvan, President and Chief Executive Officer, and Jeremy T. Brock, Chief Financial Officer.:

●

Kathleen S. Skarvan, President and Chief Executive Officer;

●

Christopher G. Holland, Chief Commercial Officer;

●

Michelle C. Wirtz, Interim Chief Financial Officer; and

●

Michael J. MacCourt, former Chief Financial Officer.

 

Executive Compensation Components for Fiscal 20192022

 

We provide a compensation package to our executive officers, including base salary, cash incentive compensation, certain perquisites and participation in benefit arrangements that are generally available to all salaried employees, such as health and retirement plans. We have also periodically awarded our executive officers with long-term equity incentive grants in the form of restricted shares of common stock or stock options. Pursuant to their employment agreements, as may be amended from time to time, our executives are eligible to participate in any employee benefit plan that provides opportunities to earn equity incentive compensation. Accordingly, our executives are eligible to participate in our equity incentive plans and the Board may grant equity awards to the executives thereunder.

 

Base Salary

 

For fiscal 2019, our Chief Executive Officer and Chief Financial Officer had base salaries of $396,750 and $250,000, respectively. Base salariesSalaries for our executive officers are determined and paid on a fiscal-year basis and, for fiscal 2019,2022, were established by our Personnel and Compensation Committee in accordance with the terms of each executive officer’s existing employment agreement.agreement with the Company. For fiscal 2022, Ms. Skarvan had a base annual salary of $450,000 and Mr. Holland had a base annual salary of $290,000. Upon becoming Interim Chief Financial Officer in June 2022, Ms. Wirtz had a base annual salary of $220,000. Mr. MacCourt had a base annual salary of $290,000 until his resignation from employment effective July 1, 2022.

 

In order to provide its recommendations regarding base salaries, the Personnel and Compensation Committee reviews individual performance and our operating results and considers compensation data for medical device manufacturing companies located in the Midwest. The Personnel and Compensation Committee also considers the Chief Executive Officer’s recommendations as to compensation for the Company’s other executive officer.officers. The Personnel and Compensation Committee uses a subjective process to set base salaries and does not specifically weight any factors. Based upon the information reviewed, the Personnel and Compensation Committee makes a recommendation with respect to compensation for the Company’s executive officer.officers. The Board sets the compensation for each executive officer based on the recommendation of the committee. The Chief Executive Officer is not present during the committee’s deliberations or voting on her compensation.

 

Cash Incentive Compensation

 

The Personnel and Compensation Committee established a Fiscal Year 20192022 Officer Bonus Plan (the “2019“2022 Bonus Plan”) for officers of the Company, including our named executive officers. The 20192022 Bonus Plan was effective for fiscal 20192022 and provided an opportunity for each participant to earn an annual cash bonus based on Company revenue growth versus the prior fiscal year (subject to achievement of threshold earnings before interest and taxes (“EBIT”EBT”)). Under the 20192022 Bonus Plan, the committeePersonnel and Compensation Committee established minimum revenue growth of 10%8.0% and target revenue growth of 12%12.0% for fiscal 20192022, and set target payouts based on percentages of 50.0% and 30.0% of annual base salarysalaries at 50.0% for our Chief Executive Officer, and30.0% for our Chief Financial Officer respectively.and Chief Commercial Officer and 20% for our Interim Chief Financial Officer.  The following summarizes the potential payment scenarios that were available under the 20192022 Bonus Plan:

●

Company revenue growth below minimum performance would not have resulted in any payouts under the 20192022 Bonus Plan.

 

●

Company revenue growth between minimum and target performance ofwould have resulted in a potential bonus payout starting at 50.0%40.0% and increasing in increments of 25.0%15.0% of the participant’s respective target payout for every whole percent of revenue growth in excess of minimum performance.

 

●

Company revenue growth equal to target performance would have resulted in a potential bonus payout equal to 100.0% of the participant’s respective target payout.

 

19 

●

Company revenue growth above target performance would have resulted in a potential bonus payout equal to 100.0% of the participant’s respective target payout, plus an additional increment of 8.0% of their target payout for every whole percent of revenue growth in excess of target performance. performance up to 268% of target payout.

 

Notwithstanding the foregoing, Company revenue growth also would not have resulted in any payout unless EBITEBT also exceeded an established threshold amount. Company revenue growth at or above targetminimum performance was only able to increase the resulting payout as a percent of target if EBITEBT also exceeded an amount equal to the threshold EBITEBT amount plus an additional increment of 30.0%approximately 5.5% of threshold EBITEBT for every whole percent of revenue growth in excess of targetminimum performance. Additionally, the Personnel and Compensation Committee determined to exclude expenses relating to the Cooperation Agreement from the final determination of EBT.

 

As a result of actual CompanyBonus payout under the 2022 Bonus Plan for fiscal 2022 was 108% as the revenue growth of approximately 10.6% and EBIT in excess of the threshold amount for fiscal 2019, Ms. Skarvan and Mr. Brock received cash payments equal to 50.0% of their target payouts,targets were exceeded, amounting to payments to Ms. Skarvan of $99,188$243,000, Mr. Holland of $39,150, Ms. Wirtz of $22,100, and $37,500, respectively,Mr. MacCourt of $93,960, under the 20192022 Bonus Plan.

 

In August 2019, the Committee awarded a one-time discretionary cash bonus of $30,000 to Ms. Skarvan that was separate from her bonus opportunity under the 2019 Bonus Plan. The bonus was awarded primarily in recognition of her exceptional contributions to the Company while the position of Vice President of Sales was vacant during a portion of fiscal 2019.

Equity Compensation

 

Our Board and its Personnel and Compensation Committee believe that stock-based compensation promotes the creation of long-term shareholder value and aligns the interests of our management with the interests of our shareholders by ensuring that a portion of their total compensation is at risk and changes in value with the value of our securities. As employees of our company, each of our applicable named executive officers was previously eligible to receive equity compensation pursuant to our 2012 Stock Incentive Plan (the “2012 Plan”) and our 2014 Stock Incentive Plan (“2014 Plan”), and each current named executive officer is eligible to receive equity compensation pursuant to our 2017 Omnibus Incentive Plan (“2017 Plan”). Upon the ratification by our shareholders of the 2014 Plan in November 2014 and the 2017 Plan in November 2017, we ceased making awards under the 2012 Plan and the 2014 Plan, respectively.

 

During fiscal 2019,2022, we granted a combination of shares of common stock and options to purchase additional shares of common stock to each of our Chief Executive OfficerMs. Skarvan, Mr. MacCourt, Mr. Holland, and Chief Financial Officer. Ms. Wirtz, all of which awards were granted pursuant to the 2017 Plan.

On July 1, 2018,2021, Ms. Skarvan received 20,00010,900 restricted shares of common stock and an option to purchase up to 40,00018,200 shares of common stock. On the same date, Mr. Brock received 10,000 restricted shares of common stock and an option to purchase up to 20,000 shares of common stock. All of the awards were granted pursuant to the 2017 Plan. Each of theThe foregoing options havehad an exercise price of $5.42$11.35 per share, representingwhich represents the “fair market value” of our common stock as of the date of grant, and were scheduled to expire after 10 years. The options and shares of restricted stock awardswere scheduled to vest in substantially equal increments on June 30 in each of 2019, 20202022, 2023 and 2021.2024.

 

On July 1, 2021, Mr. MacCourt received 15,000 restricted shares of common stock and an option to purchase up to 7,400 shares of common stock. The foregoing options had an exercise price of $11.35 per share, which represents the “fair market value” of our common stock as of the date of grant, and were scheduled to expire after 10 years. The options and shares of restricted stock were scheduled to vest in substantially equal increments on June 30 in each of 2022, 2023 and 2024.

On February 16, 2022, Mr. Holland received 5,500 restricted shares of common stock and an option to purchase up to 7,200 shares of common stock. The foregoing options had an exercise price of $12.11 per share, which represents the “fair market value” of our common stock as of the date of grant, and were scheduled to expire after 10 years. The options and shares of restricted stock were scheduled to vest in substantially equal increments on February 15 in each of 2023, 2024 and 2025.

On January 4, 2022, Ms. Wirtz received an option to purchase up to 1,692 shares of common stock. The foregoing options had an exercise price of $12.80 per share, which represents the “fair market value” of our common stock as of the date of grant, and were scheduled to expire after 10 years. The options were scheduled to vest in substantially equal increments on January 3 in each of 2023, 2024 and 2025.

Perquisites and Other Benefits

 

We believe that providing perquisites to our executive officers is beneficial because it improves our ability to retain qualified leaders and is consistent with the practice of similarly-sizedsimilarly sized companies in our industry. Our executive officers are eligible to participate in our group health, disability and life insurance plans and receive matching contributions to a 401(k) plan, which are benefits that are generally available to all of our full-time employees. The goal of these programs is to promote health and welfare benefits. In addition, the current employment agreements with our Chief Executive OfficerMs. Skarvan, Mr. Holland and our Chief Financial OfficerMs. Wirtz provide, and the former employment agreement with Mr. MacCourt provided, for a monthly automobile allowancesallowance for each officer, and our current employment agreement with our Chief Executive OfficerMs. Skarvan provides for a monthly housing allowance.

 

20 

Compensation Actions for Fiscal 20202023

 

In July 2019,June 2022, the Personnel and Compensation Committee evaluated the base salariessalary of our President and Chief Executive Officer resulting in annual base salary of $475,000 for fiscal 2023. Due to the abbreviated tenures of our Chief Commercial Officer and ourInterim Chief Financial Officer were increased for fiscal 2020 to $410,000 and $290,000, respectively. Bothat the time, reviews of their annual base salaries reflect cost of living-based increases and the Chief Financial Officer’s base salary reflects a supplemental adjustment based on a review of broad-based third-party survey data. The composition of the equity compensation to our named executive officers for fiscal 2020 was granted on July 1, 2019, resulting in the issuance of 20,000 restricted shares of common stock and an option to purchase up to 39,500 shares of common stock for our President and Chief Executive Officer and 12,500 restricted shares of common stock and an option to purchase up to 16,800 shares of common stock for our Chief Financial Officer.

In August 2019, our Board approved, upon recommendation from its Personnel and Compensation Committee, the final terms of the Fiscal Year 2020 Officer Bonus Plan (the “2020 Bonus Plan”) for officers of our company, including our named executive officers. The 2020 Bonus Plan is effective for fiscal 2020 and provides opportunities similar to the 2019 Bonus Plan for each participant to earn an annual cash bonus based on performance versus minimum and target levels of Company revenue growth for fiscal 2020 (subject to achievement of threshold EBIT for fiscal 2020). The target payout amounts were maintained at 50.0% and 30.0% of annual base salary for Ms. Skarvan and Mr. Brock, respectively.deferred.

 

Employment Agreements

 

We are party to amended and restated employment agreements with certain key employees, including botheach of our named executive officers.Ms. Skarvan, Mr. Holland and Ms. Wirtz. The employment agreement with Mr. MacCourt was terminated in connection with his departure.

The amended and restated employment agreement with Ms. Skarvan, the employment agreement with Mr. Holland and Mr. Brock werethe amended employment agreement with Ms. Wirtz are each initially effective for a period of two years ending in 2019,December 2021 for Ms. Skarvan and February 2024 for each of Mr. Holland and Ms. Wirtz, respectively, subject to an automatic one-year extension every Septemberon the anniversary of the effective date of such agreement unless terminated in advance in accordance its terms. Notwithstanding the foregoing, the applicable term will automatically expire on the one-year anniversary of a “change of control” (as defined in the applicable employment agreement).

 

Under their respective employment agreements, Ms. Skarvan, Mr. Holland and Mr. Brock wereMs. Wirtz are each initially entitled to minimum annualized base salaries and are eligible for a merit-based increase on or about each successive July 1, subject to final approval by our board of directors.Board. The employment agreements also provide that Ms. Skarvan, Mr. Holland and Mr. BrockMs. Wirtz are each eligible to earn an annualized cash bonus as determined by the board of directors,our Board, based on minimum targetstarget amounts of 50% for Ms. Skarvan and 30%, respectively, for Mr. Holland and Ms. Wirtz, of their annualized base salaries.

Also under the employment agreements, if the executive’sapplicable executive officer’s employment is terminated by us for any reason other than for “cause” (as defined in the applicable employment agreement) or, with respect to Ms. Skarvan and Mr. Holland, is terminated by them for “good reason” (as defined in the applicable employment agreement), and in either case the termination of employment occurs before a change of control, then the executive will be eligible to (A) receive an amount equal to (i) one times their annualized base salary as of the termination date, plus (ii) 100% of their target annual bonus for the fiscal year in which the termination date occurs, plus (iii) a pro rata portion of the same target annual bonus amount based on the portion of the applicable fiscal year that had elapsed prior to the termination date, and (B) have us continue to pay the Company portion of COBRA premiums for up to 12 months. IfWith respect to Ms. Skarvan and Mr. Holland, if any such termination occurs within twelve months after a change of control, then the Executiveapplicable executive officer will instead be eligible to (A) receive an amount equal to (i) 1.5 times their annualized base salary as of the termination date, plus (ii) 150% of their target annual bonus for the fiscal year in which the termination date occurs, plus (iii) a pro rata portion of the same target annual bonus amount based on the portion of the fiscal year that had then elapsed prior to the termination date, and (B) have us continue to pay the Company portion of COBRA premiums for up to 18 months. All of the above severance benefits are contingent on theeach executive officer signing and not revoking a release of claims and thesuch executive officer remaining in strict compliance with the terms of their employment agreement and their existing non-competition, non-solicitation, and confidentiality agreement with the Company and any other written agreement between thesuch executive officer and the Company. Each executive remains a party to their existing non-competition, non-solicitation, and confidentiality agreement with the Company notwithstanding the amendment and restatement of their employment agreement. In addition to the specific terms summarized above, each Executiveexecutive officer remains eligible to participate in the other compensation and benefits programs generally available to Company employees.

21 

Summary Compensation Table

 

The following table provides information regarding the compensation earned during fiscal 20192022 and fiscal 20182021 by our named executive officers:

 

Name and principal position		Fiscal Year		Salary ($)(a)		Bonus ($)(b)		Stock awards ($)(c)		Option awards ($)(d)		Non-equity incentive plan compensation ($)(e)		All other compensation ($)(f)		Total ($)
Kathleen S. Skarvan President and Chief Executive Officer		2019		396,750		30,000		108,400		211,600		99,188		21,635		867,573
		2018		345,000		—		110,600		195,200		51,750		21,598		724,148
Jeremy T. Brock Chief Financial Officer		2019		250,000		—		54,200		105,800		37,500		15,820		463,320
		2018		230,000		—		55,300		97,600		20,700		15,992		419,592

Name and principal position		Fiscal Year		Salary ($)(a)		Stock awards ($)(b)		Option awards ($)(c)		Non-equity incentive plan compensation ($)(d)		All other compensation ($)(e)		Total ($)
Kathleen S. Skarvan		2022		448,461		123,715		206,570		243,000		23,292		1,045,038
President and Chief Executive Officer		2021		410,000		265,097		205,620		270,600		21,040		1,172,357
Christopher G. Holland(f)		2022		89,231		66,605		87,192		39,150		6,461		288,639
Chief Commercial Officer
Michelle C. Wirtz(g)		2022		84,615		–		21,658		22,100		3,793		132,166
Interim Chief Financial Officer
Michael J. MacCourt(h)		2022		289,423		170,250		83,990		93,960		19,546		657,169
Former Chief Financial Officer		2021		269,372		186,325		78,970		108,900		43,478		687,045

 

(a)

(a)

Amounts shown are not reduced to reflect the named executive officers’ elections, if any, to contribute portions of their salaries to 401(k) plans.

(b)	Amounts represent discretionary bonus earned for reported fiscal year’s performance but paid in the following fiscal year.

(c) (b)

Amounts represent fair value of awards granted during fiscal year, determined by multiplying number of shares of restricted stock by the closing price of our common stock as of the date of grant, as reported by the NYSE American.

(d)

(c)

Amounts represent fair value of awards granted during the fiscal year, as computed in accordance with FASB Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 (“ASC 718.718”). The assumptions used to determine the value of the awards are discussed in Note 8 to our consolidated financial statements, included in the Company’s annual report on Form 10-K for fiscal 2019,2022, filed with the SEC on August 27, 2019. 23, 2022.

(e)

(d)

Represents payments made under the Fiscal 2019 Officer2022 Bonus Plan. See the discussion under “Executive Compensation Components for Fiscal 2019 –2022 — Cash Incentive Compensation” above. above with respect to the 2022 Bonus Plan.

(f)

(e)

Includes Company matches to 401(k) plans of $12,035$11,292 for Ms. Skarvan, $12,346 for Mr. MacCourt, $4,024 for Mr. Holland, and $3,433 for Ms. Wirtz with respect to fiscal 2022, and $9,040 for Ms. Skarvan and $11,020$457 for Mr. BrockMacCourt with respect to fiscal 2019 and $11,998 for Ms. Skarvan and $11,192 for2021. Also includes $25,000 of relocation expenses paid to Mr. Brock with respect toMacCourt in fiscal 2018. 2021.

(f)

Mr. Holland was appointed as Chief Commercial Officer and commenced employment with the Company on February 16, 2022.

(g)

Ms. Wirtz was appointed as interim Chief Financial Officer on June 1, 2022.

(h)

Mr. MacCourt ceased serving as Chief Financial Officer and resigned his employment with the Company effective as of July 1, 2022.

22 

Outstanding Equity Awards at June 30, 20192022

 

The following table sets forth certain information regarding equity awards granted to our named executive officers and outstanding as of June 30, 2019:2022:

 

Option Awards

Stock Awards

Option Awards

Stock Awards

Name

Grant Date

Number of securities underlying unexercised options (#) Exercisable

Number of securities underlying unexercised options (#) Unexercisable

Option exercise price ($)

Option expiration date

Number of shares of stock that have not vested (#)

Market value of shares of stock that have not vested(a) ($)

Grant Date

Number of securities underlying unexercised options (#) Exercisable

Number of securities underlying unexercised options (#) Unexercisable

Option exercise price ($)

Option expiration date

Number of shares of stock that have not vested (#)

Market value of shares of stock that have not vested(a) ($)

Kathleen S. Skarvan

12/03/2012

20,000

—

1.75

12/02/2022

12/03/2012

20,000

–

1.75

12/02/2022

07/01/2013

15,000

—

1.31

06/30/2023

07/01/2013

15,000

–

1.31

06/30/2023

07/01/2014

50,000

—

1.40

06/30/2024

07/01/2014

50,000

–

1.40

06/30/2024

07/01/2015

40,000

—

1.80

06/30/2025

07/01/2015

40,000

–

1.80

06/30/2025

07/01/2016

40,000

—

3.82

06/30/2026

07/01/2016

40,000

–

3.82

06/30/2026

07/01/2017

26,667

13,333(b)

5.53

06/30/2027

07/01/2017

40,000

–

5.53

06/30/2027

07/01/2017

6,666(c)

36,330

07/01/2018

40,000

–

5.42

06/30/2028

07/01/2018

13,334

26,666(d)

5.42

06/30/2028

07/01/2018

13,333(e)

72,665

Jeremy T. Brock

05/30/2012

18,000

—

2.53

05/29/2022

11/15/2012

20,000

—

1.59

11/14/2022

07/01/2013

10,000

—

1.31

06/30/2023

07/01/2014

30,000

—

1.40

06/30/2024

07/01/2015

20,000

—

1.80

06/30/2025

07/01/2016

20,000

—

3.82

06/30/2026

07/01/2017

13,334

6,666(f)

5.53

06/30/2027

07/01/2017

3,333(g)

18,165

07/01/2018

6,667

13,333(h)

5.42

06/30/2028

07/01/2018

6,666(i)

36,330

07/01/2019

39,500

–

5.29

06/30/2029

07/01/2020

9,200

4,600 (b)

14.91

06/30/2030

07/01/2020

2,752(c)

26,529

08/21/2020

5,000(d)

48,200

07/01/2021

6,067

12,133(e)

11.35

06/30/2031

07/01/2021

7,266(f)

70,044

Christopher G. Holland

02/16/2022

–

7,200(g)

12.11

02/15/2032

02/16/2022

5,500(h)

53,020

Michelle C. Wirtz

01/04/2022

–

1,692(i)

12.80

01/03/2032

Michael J. MacCourt

07/01/2020

3,534(n)

1,766(j)(n)

14.91

06/30/2030

07/01/2020

4,166(k)(o)

40,160

07/01/2021

2,467(n)

4,933(l)(n)

11.35

06/30/2031

07/01/2021

10,000(m)(n)

9,640

 

(a)

(a)

Equals the number of unvested restricted shares of restrictedcommon stock multiplied by $5.45,$9.64, the fair market value of our common stock on June 28, 2019,30, 2022, the last trading day of our fiscal year,2022, as reported by the NYSE American.

(b)	Remaining scheduled to vest on June 30, 2020.

(c) (b)

Restricted stock scheduled to vest on June 30, 2020.

(d)	Scheduled to vest with respect to 13,3334,600 shares on each of June 30, 2020 and June 30, 2021. 2023.

(e)

(c)

Restricted stock scheduled to vest with respect to 6,6672,752 shares on June 30, 2020 and 6,666 shares on June 30, 2021. 2023.

(f)	Remainder scheduled to vest on June 30, 2020.

(g) (d)

Restricted stock scheduled to vest on June 30, 2020.

(h)	Scheduled to vest with respect to 6,667 shares on June 30, 2020 and 6,666 shares on June 30, 2021.S

(i)	Restricted stock scheduled to vest with respect to 3,3335,000 shares August 20, 2022.

(e)

Scheduled to vest with respect to 6,067 and 6,066 shares on June 30, 2023 and 2024, respectively.

(f)

Restricted stock scheduled to vest with respect to 3,633 shares on each of June 30, 20202023 and 2024, respectively.

(g)

Scheduled to vest with respect to 2,400 shares each on February 15, 2023, 2024, and 2025, respectively.

(h)

Restricted stock scheduled to vest with respect to 5,500 shares on February 15, 2023.

(i)

Scheduled to vest with respect to 564 shares each on January 3, 2023, 2024, and 2025, respectively.

(j)

Scheduled to vest with respect to 1,766 shares on June 30, 2021. 2023.

(k)

Restricted stock scheduled to vest with respect to 4,166 shares on June 30, 2023.

(l)

Scheduled vest with respect to 2,467 and 2,466 shares on June 30, 2023 and 2024, respectively.

(m)

Restricted stock scheduled to vest with respect to 5,000 shares on each of June 30, 2023 and 2024, respectively.

(n)

Upon Mr. MacCourt’s resignation on July 1, 2022, all unvested stock options were forfeited. All exercisable stock options must be exercised within 3 months of his resignation, or they will be forfeited.

(o)

Upon Mr. MacCourt’s resignation on July 1, 2022, all unvested restricted stock was forfeited.

23 

DIRECTOR COMPENSATION

 

The fiscal 20192022 director compensation program provided non-employee directors with a combination of cash and shares of restricted stock for each such director, depending on committee service and leadership roles held during fiscal 2019.2022.

 

The Personnel and Compensation Committee conducts periodic reviews of the compensation of non-employee directors. For fiscal 2019,2022, an analysis of both total director compensation and the mix of cash and equity compensation was provided by management of the Company based on available market data. In light of the data presented, the committee recommended, and the Board approved, the following revised compensation arrangements for directors, which were in effect forbecame effective as of the entirety of fiscal 2019:quarter ended December 31, 2021:

 

Director Compensation Element		Amount Payable
Annual Cash Retainer(s) (a)(a)
●    Board Member		$10,000 35,000
●    Board Chair		$15,000 30,000
●    Audit Committee Chair		$10,000 15,000
●    Personnel and Compensation Committee Chair		$7,000 10,000
●    Nominating and Corporate Governance Committee Chair		$3,500 7,000
●    Finance and Strategy Committee Chair		$7,000
●    Audit Committee Member		$2,500 5,000
●    Personnel and Compensation Committee Member		$2,200 5,000
●    Nominating and Corporate Governance Committee Member		$1,000 2,000
●    Finance and Strategy Committee Member		$2,000
Annual Equity Award(b)(b)		2,000		3,000	shares

 

(a)

(a)

All amounts paid in quarterly installments each representing 25% of the total annual retainer and may be pro-rated for any partial service as a director or in any committee or leadership role.

(b)

(b)

To be issued on or about the date of the applicable year’s annual meeting of shareholders or as soon as practicable thereafter in the form of shares of restricted stock schedule to vest in full on the six-month anniversary of the date of grant.

 

The following table provides information regarding compensation paid to and earned by non-employee directors during fiscal 2019:2022:

 

Non-Employee Director		Stock Awards ($)(a)		Fees Earned or Paid in Cash ($)		Total ($)		Stock Awards ($)(a)		Fees Earned or Paid in Cash ($)		Total ($)
Stephen H. Craney		11,400		34,500		45,900
William V. Eckles		11,400		16,000		27,400
Stan K. Erickson		11,400		21,000		32,400		$36,270		$52,000		$88,270
Gregory J. Fluet								$36,270		$49,000		$85,270
Joseph L. Galatowitsch								$36,270		$31,500		$67,770
Lee A. Jones		11,400		13,200		24,600		$36,270		$69,750		$106,020
George H. Winn		11,400		12,200		23,600
Kathleen A. Tune								$36,270		$35,250		$71,520
Andrea M. Walsh								$36,270		$42,000		$78,270

 

(a)

(a)

Amounts represent grant-date fair value of 2,0003,000 shares of restricted stock awarded on December 1, 20182021 and computed in accordance with FASB ASC Topic 718. See Note 7,8, Share-Based Payments, to our audited consolidated financial statements included in our annual report on Form 10-K for fiscal 20192022 for a description of our accounting for these awards and the assumptions used in valuing the awards. All shares vested six months after the date of grant.

24 

EQUITY COMPENSATION PLAN INFORMATION

 

The following table provides information concerning equity compensation arrangements as of June 30, 2019:2022:

 

Plan Category		Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders		683,000502,084(a)		$3.845.82 per share		660,500370,789(b)

 

(a)

Consisted of 248,500 options granted under the 2014 Plan and prior plans and 253,584 options issued under the 2017 Plan.

(a)	Consists of 163,000, 335,000 and 185,000 shares underlying outstanding equity awards issued pursuant to the 2012, 2014 and 2017 Plans, respectively.

(b)	ConsistsConsisted of shares of our common stock available for future awards under the 2017 Plan. No further awards are authorized for grant under the 2014 or 2012 Plans.

25 

RELATED PERSON TRANSACTION APPROVAL POLICY

 

Pursuant to its charter, our Audit Committee is responsible for reviewing and approving in advance any related party transaction, which consists of any transaction or series of transactions that occur during a fiscal year for which:

 

●

the amounts involved exceeded the lesser of $120,000 or one percent of the average of our total assets at the end of the last two completed fiscal years; and

 

●

a director, executive officer, beneficial owner of more than 5% of any class of our voting securities or any member of their immediate family had or will have a direct or indirect material interest.

 

In determining whether to approve or ratify a related party transaction, the Audit Committee considers all of the relevant facts and circumstances available to it, including, among any other factors it deems appropriate: (i) the benefits to the Company of the transaction; (ii) the nature of the related party’s interest in the transaction; (iii) whether the transaction would impair the judgment of a director or executive officer to act in the best interests of the Company and our shareholders; (iv) the potential impact of the transaction on a director’s independence; and (v) whether the transaction is on terms no less favorable than terms generally available to an unrelated third party under the same or similar circumstances. If a member of the Audit Committee is a related party with respect to a transaction under review, he or she is required to abstain from voting on the approval of the transaction.

 

OTHER MATTERS

 

The Board knows of no other matters which may be brought before the Annual Meeting. If any other matters are presented at the meetingAnnual Meeting on which a vote may properly be taken, the persons named as proxy holders will vote thereon in accordance with their best judgment.

 

HOUSEHOLDING

 

We have adopted a procedure approved by the SEC called “householding,” by which certain shareholders who do not participate in electronic delivery of proxy materials but who have the same address and appear to be members of the same family receive only one copy of our annual report, proxy statement and shareholder letter. Each shareholder participating in householding continues to receive a separate proxy card. Householding reduces both the environmental impact of our annual meetings and our mailing and printing expenses.

 

If you or another shareholder with whom you share an address currently receive multiple copies of our annual report, proxy statement, and/or shareholder letter, or if you hold shares in more than one account, but would like to receive only a single copy of materials for your household, then please send a written request addressedcontact Broadridge Financial Solutions, Inc., by calling (866) 540-7095 or by writing to the attention of our President and Chief Executive Officer at 500 Sixth Avenue Northwest,Broadridge Householding Department, 51 Mercedes Way, Edgewood, New Prague, Minnesota 56071.York 1171. If you currently participate in householding and would prefer to receive separate copies of materials for fiscal 20192023 and the Annual Meeting, then please contact us in the manner described above and you will receive additional copies, free of charge and promptly upon receipt of your request.

 

ADDITIONAL INFORMATION

 

Our annual report on Form 10-K for fiscal 2019,2022, as filed with the SEC, is available on the SEC’s Internet site,website, www.sec.gov, and our corporate website, www.smartvest.com, under “Investor Relations.” A copy of the Annual Reportannual report on Form 10-K will be sent to any shareholder without charge upon written request addressed to the attention of our President and Chief Executive Officer at 500 Sixth Avenue Northwest, New Prague, Minnesota 56071. Additional copies of the annual report on Form 10-K, this proxy statement and the accompanying form of proxy may be obtained fromby sending a written request to the attention of our President and Chief Executive Officer, at the Company’s address noted above. Copies of exhibits to the annual report on Form 10-K may be obtained upon payment to us of the reasonable expense incurred in providing such exhibits.

 

ELECTROMED, INC.
500 SIXTH AVENUE NW
NEW PRAGUE, MN 56071

	SCAN TO VIEW MATERIALS & VOTE
ELECTROMED, INC. 500 SIXTH AVENUE NW NEW PRAGUE, MN 56071	VOTE BY INTERNET -www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on November 14, 2019. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.  ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.  VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on November 14, 2019.

VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above

Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on November 10, 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

During The Meeting - Go to www.virtualshareholdermeeting.com/ELMD2022

You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.

VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on November 10, 2022. Have your proxy card in hand when you call and then follow the instructions.

 

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

E85035-P28870 D91224-P78868 KEEP THIS PORTION FOR YOUR RECORDS   THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY                             ELECTROMED, INC. For All Withhold All For All Except   To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below.         The Board of Directors recommends you vote FOR the following nominees:                       1. Election of Directors, thereby setting the number of directors at eight. ☐ ☐ ☐                                     Nominees:                                                 01)  Stan K. Erickson 05)  Kathleen S. Skarvan                     02)  Gregory J. Fluet 06)  Andrew J. Summers                     03)  Joseph L. Galatowitsch 07)  Kathleen A. Tune                     04)  Lee A. Jones 08)  Andrea M. Walsh                                               The Board of Directors recommends you vote FOR proposals 2 and 3.   For Against   Abstain                             2. To ratify appointment of RSM US LLP as our independent registered public accounting firm.   ☐ ☐ ☐                       3. To approve, on a non-binding and advisory basis, our executive compensation.   ☐ ☐ ☐                       NOTE: At their discretion, the proxies are authorized to vote on any other business properly brought before the meeting or any adjournment thereof.                                                                                                                                             Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.                             ��                                                       Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date                 ELECTROMED, INC. For All Withhold All For All Except To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. The Board of Directors recommends you vote FOR all of the following nominees:

1.

Election of Directors, thereby setting the number of directors at seven.

☐

☐

☐

Nominees:

01)     Stephen H. Craney

06)     Lee A. Jones

02)     John L. Erb

07)     Kathleen S. Skarvan

03)     Stan K. Erickson

08)     George H. Winn

04)     Gregory J. Fluet

The Board of Directors recommends you vote FOR proposals 2 and 3.

For

Against

Abstain

2.

To ratify appointment of RSM US LLP as our independent registered public accounting firm.

☐

☐

☐

3.

To approve, on a non-binding and advisory basis, our executive compensation.

☐

☐

☐

The Board of Directors recommends you vote 1 YEAR on the following proposal:

1 Year

2 Years

3 Years

Abstain

4.

To recommend, on a non-binding and advisory basis, whether executive compensation votes should occur every year, every two years or every three years.

☐

☐

☐

☐

NOTE:At their discretion, the proxies are authorized to vote on any other business properly brought before the meeting or any adjournment thereof.

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date

 

 

 

 

 

 

 

 

 

 

 

 

 

IF YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU MUST FOLLOW THE

REQUIREMENTS FOR ADMISSION AT THE MEETING DESCRIBED IN THE PROXY STATEMENT.

YOU ARE STRONGLY ENCOURAGED TO VOTE BY PROXY IN ADVANCE OF THE MEETING EVEN IF

YOU PLAN TO ATTEND.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Annual Report on Form 10-K and Notice and Proxy Statement and Shareholder Letter are available at
www.proxyvote.com.

 

 

 

 

 

 

 

 

 

E85036-P28870

D91225-P78868 ELECTROMED, INC. Annual Meeting of Shareholders November 15, 201911, 2022 10:00 AM, CST This proxy is solicited on behalf of the Board of Directors
	The shareholder(s) hereby appoint(s) Stephen H. Craney and Kathleen S. Skarvan and Michelle C. Wirtz, or either of them, as proxies, each with the power to appoint (his/her)her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 10:00 AM, CST on November 15, 201911, 2022 virtually at 500 Sixth Avenue Northwest, New Prague, MN 56071,www.virtualshareholdermeeting.com/ELMD2022, and any adjournment or postponement thereof.
	This proxy, when properly executed, will be voted as directed. But if no direction is given, it will be voted "FOR" all nominees and proposals set forth in Items 1, 2 and 3 and "1 YEAR" on proposal 4. 3. The proxies cannot vote these shares unless you vote by Internet or telephone or you sign this card on the reverse side and return it.
			Continued and to be signed on reverse side