UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE14A
Proxy Statement Pursuant to Section 14(a) of the Securities Act of 1934
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
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| Preliminary Proxy Statement | ||
| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| Definitive Proxy Statement |
| Definitive Additional Materials |
| Soliciting Material under §240.14a-12 |
MESA LABORATORIES, INC.
(Name of registrant as specified in its charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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| No fee required. | ||
| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
(1) | Title of each class of securities to which transaction applies: | |
(2) | Aggregate number of securities to which transaction applies: | |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange | |
(4) | Proposed maximum aggregate value of transaction: | |
(5) | Total fee paid: | |
| Fee paid previously with preliminary materials. |
| Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount | |
(2) | Form, Schedule or Registration | |
(3) | Filing Party: | |
(4) | Date Filed: | ||
MESA LABORATORIES, INC.
12100 West Sixth Avenue
Lakewood, Colorado 80228
Telephone: (303) 987-8000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Thursday,September 24, 2015
To Be Held Friday, September 14, 2012TO THE SHAREHOLDERS OF MESA LABORATORIES, INC.:
To Our Shareholders:
PLEASE TAKE NOTICE that the annual meetingThe Annual Meeting of shareholdersShareholders (“Annual Meeting”) of Mesa Laboratories, Inc. (the(“we”, “our”, the “Company”, or “Mesa”) will be held at the Company’sour corporate offices at 12100 West Sixth Avenue, Lakewood, Colorado 80228, on Friday,Thursday, September 14, 201224, 2015 at 9:3000 a.m. MDT, for the following purposes:
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2. | To hold an advisory vote to approve executive compensation; |
3. | To ratify the appointment of EKS&H LLLP as our independent registered public accounting firm for the year ending March 31, 2016 (the “Ratification of Auditors Proposal”); and |
4. | To transact such other business as may properly come before the meeting or any adjournment. |
The discussion of the items set forth above is intended only as a summary, and is qualified in its entirety by the information contained in the accompanying Proxy Statement or until their successors are elected and qualified;
2.To ratify the appointmentStatement. Only holders of Ehrhardt, Keefe, Steiner & Hottman, PC (“EKS&H”) as the Company’s independent registered public accounting firm for fiscal 2013 (the “Ratificationrecord of Auditors Proposal”);
3.To approve an amendment to the Company’s articles of incorporation to increase the number of authorized shares of common stock from 8,000,000 to 25,000,000 (the “Amendment to the Articles of Incorporation Proposal”); and
4.To transact such other business as may properly come before the meeting or any adjournment.
The Board of Directors has fixed the close of businessour Common Stock on July 25, 2012, as the record date for the determination of shareholders31, 2015 (the “Record Date”), will be entitled to notice of and to vote at the meetingthis Annual Meeting, and at any adjournment.postponements or adjournments thereof.
A Proxy Statement which describesPlease vote your shares by signing and returning your proxy card, using telephone or internet voting, or at the foregoing proposalsAnnual Meeting. This will assure that your shares will be voted, whether or not you attend the Annual Meeting. You may, of course, attend the Annual Meeting and vote in person even if you have previously granted a formproxy.
By Order of Proxy accompany this Notice.the Board of Directors
/s/ John J. Sullivan
John J. Sullivan, Ph.D. |
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IMPORTANTChief Executive Officer
Whether or not you expect to attend the meeting, you are urged to execute the accompanying proxy and return it promptly in the enclosed reply envelope which requires no postage. Any shareholder granting a proxy may revoke the same at any time prior to its exercise. Also, whether or not you grant a proxy, you may vote in person if you attend the meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 14, 2012
The Mesa Laboratories, Inc. Proxy Statement, Proxy Card and Annual Report on Form 10-K for the fiscal year ended March 31, 20122015 are available for view on the internet at
http://www.mesalabs.com/corporate/at:www.edocumentview.com/MLAB orwww.mesalabs.com.
Please note that due to changes in the NYSE rules, brokers are no longer permitted to vote your shares on proposals for the election of directors or on any other non-routine matters if you have not given your broker specific instructions on how to vote your shares. PLEASE BE SURE TO GIVE SPECIFIC VOTING INSTRUCTIONS TO YOUR BROKER SO THAT YOUR VOTES CAN BE COUNTED.
MESA LABORATORIES, INC.
12100 West Sixth Avenue
Lakewood, Colorado 80228
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held Friday,Thursday, September 14, 201224, 2015
SOLICITATION OF PROXYSolicitation of Proxy
The accompanying proxy is solicited on behalf of the Board of Directors of Mesa Laboratories, Inc. (the(“we”, “our”, the “Company”, or “Mesa”) for use at the Annual Meeting of Shareholders (“Annual Meeting”) of the CompanyMesa Laboratories, Inc. to be held on Friday,Thursday, September 14, 2012,24, 2015, and at any adjournment. In addition to the use of the mails, proxies may be solicited by personal interview or telephone by officers, directors and other employees of the Company, who will not receive additional compensation for such services. The CompanyWe may also request brokerage houses, nominees, custodians and fiduciaries to forward the soliciting material to the beneficial owners of stock held of record and will reimburse such persons for forwarding such material. The CompanyWe will bear the cost of this solicitation of proxies. Such costs are expected to be nominal. Proxy solicitation will commence with the mailing of this Proxy Statement on or about August 10, 2012.7, 2015.
Execution and return of the enclosed proxy will not affect a shareholder’s right to attend the meeting and to vote in person. Any shareholder executing a proxy retains the right to revoke it at any time prior to exercise at the meeting. A proxy may be revoked by delivery of written notice of revocation to the Secretary of the Company, by execution and delivery of a later proxy or by voting the shares in person at the meeting. A proxy, when executed and not revoked, will be voted in accordance with the instructions thereon. In the absence of specific instructions, proxies will be voted by the person named in the proxy “FOR” the proposalsitems described in this Proxy and in accordance with his best judgment on all other matters that may properly come before the meeting.
The enclosed proxy provides a method for shareholders to withhold authority to vote for any one or more of the nominees for director while granting authority to vote for the remaining nominees. The names of all nominees are listed on the proxy. If you wish to grant authority to vote for all nominees, check the box marked “FOR”. If you wish to withhold authority to vote for all nominees, check the box marked “WITHHOLD”. If you wish your shares to be voted for some nominees and not for one or more of the others, check the box marked “FOR” and indicate the name(s) of the nominee(s) for whom you are withholding the authority to vote by writing the name(s) of such nominee(s) on the proxy in the space provided.
PURPOSE OF MEETINGPurpose of Meeting
As stated in the Notice of Annual Meeting of Shareholders accompanying this Proxy Statement, the business to be conducted and the matters to be considered and acted upon at the meeting are as follows:
1. To elect seven directors to hold office for the term specified in the Proxy Statement or until their successors are elected and qualified; 2. To hold an advisory vote to approve executive compensation; 3. To ratify the appointment of EKS&H LLLP as our independent registered public accounting firm for the year ending March 31, 2016 (the “Ratification of Auditors Proposal”); and 4. To transact such other business as may properly come before the meeting or any adjournment. VOTING SECURITIES 1.To elect seven directors to hold office for the term specified herein2.To ratify the appointment of Ehrhardt, Keefe, Steiner & Hottman, PC (EKS&H) as the Company’s independent registered public accounting firm for fiscal 2013 (the “Ratification of Auditors Proposal”);3.To approve an amendment to the Company’s articles of incorporation to increase the number of authorized shares of common stock from 8,000,000 to 25,000,000 (the “Amendment of the Articles of Incorporation Proposal”; and4.To transact such other business as may properly come before the meeting or any adjournment.
VOTING AT MEETING
TheOur voting securities of the Company consist solely of common stock, no par value per share (the “Common(“Common Stock”).
The record date for shareholders entitled to notice of and to vote at the meeting is the close of business on July 25, 2012,31, 2015, at which time the Companywe had 3,594,221 shares of Common Stock outstanding and entitled to vote at the meeting 3,345,895 shares of Common Stock.meeting. Shareholders are entitled to one vote, in person or by proxy, for each share of Common Stock held in their name on the record date.
Shareholders representing a majority of the Common Stock outstanding and entitled to vote must be present or represented by proxy to constitute a quorum. The election of each director and the Ratification of Auditors Proposal each will require the affirmative vote of the holders of a majority of the Common Stock present or represented by proxy at the meeting and entitled to vote thereon. The approval of the Amendment of the Articles of Incorporation Proposal will require the affirmative vote of the holders of a majority of the Common Stock outstanding. Cumulative voting for directors is not authorized and proxies cannot be voted for more than seven nominees. As an advisory vote, the proposal to approve executive compensation is not binding upon the Company. The Compensation Committee, however, which is responsible for designing and administering our executive compensation program, values the opinions of our shareholders and will consider the outcome of the votes when making future compensation decisions.
STOCK OWNERSHIPQuestions and Answers About This Proxy Statement
The following responses to certain questions do not purport to be a complete statement of the information in this Proxy Statement and are qualified by the more complete information set forth hereinafter.
Who is asking for my vote?
The following table sets forthBoard of Directors of Mesa Laboratories, Inc. is sending this Proxy Statement, the numberattached Notice of Annual Meeting of Shareholders and the enclosed proxy card on or about August 7, 2015 to you and all of our other shareholders of record as of the close of business on July 31, 2015. The Board of Directors is soliciting your vote for the Annual Meeting.
Who is eligible to vote?
Shareholders of record who own shares of the Company’sour Common Stock owned beneficiallyat the close of business on July 31, 2015 are eligible to vote. Each share of Common Stock is entitled to one vote.
Why is the Annual Meeting being held?
The Annual Meeting is being held to elect persons to serve as directors of Mesa until the next Annual Meeting, to obtain an advisory vote to approve executive compensation and to ratify the appointment of EKS&H LLLP as our independent registered public accounting firm for the year ending March 31, 2012 (unless otherwise noted), by each person known by2016.
Might the CompanyAnnual Meeting be adjourned?
We do not intend to have owned beneficially more than five percent of such shares then outstanding, by each executive officer and directorseek adjournment of the Company and by allAnnual Meeting unless we have insufficient votes to satisfy a quorum (which requires the presence of the Company’s executive officers and directors asat least a group. This information gives effect to securities deemed outstanding pursuant to Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended. As far as is known to management of the Company, no person owns beneficially more than five percentmajority of the outstanding shares). If that circumstance exists, we will consider the advisability of proposing adjournment to a specific time and place. If the meeting is adjourned, we will make a public announcement.
Why did you send me this booklet?
This booklet is a Proxy Statement. It provides you with information you should review before voting on the items listed above and in the Notice of Annual Meeting of Shareholders. You are receiving these proxy materials – a booklet that includes the Proxy Statement and one proxy card – because you have the right to vote on these important items concerning your investment in Mesa.
How do I vote?
Shareholders of record: All shareholders of record may vote by written proxy card. Joint owners must each sign the proxy card. If you are a shareholder of record and receive a notice regarding availability of proxy materials, you may request a written proxy card by following the instructions included in the notice. All shareholders of record may also vote by touchtone telephone using the toll-free telephone number on the notice or proxy card, or through the internet using the procedures and instructions described on the notice or proxy card.
Beneficial owners: If you own your shares through a broker-dealer or another nominee, you must vote your shares as instructed by that broker-dealer or other nominee. If you own your shares through a nominee, you are not considered to be a shareholder of record, and you will not be permitted to vote your shares in person at the Annual Meeting unless you have obtained a “Legal Proxy” for those shares from the entity who holds your shares of common stock as of March 31, 2012 except as set forth below.record.
Name of Beneficial Owner |
| Amount and Nature of Beneficial |
| Percentage of Class- |
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Luke R. Schmieder (1) |
| 191,403 | (2) | 5.8 |
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John J. Sullivan Ph.D. (1) |
| 82,062 | (3) | 2.4 |
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Steven W. Peterson (1) |
| 62,643 | (4) | 1.9 |
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Glenn E. Adriance (1) |
| 18,300 | (5) | 0.5 |
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Michael L. Tranmer (1)(16) |
| 3,100 | (6) | 0.1 |
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H. Stuart Campbell (1) |
| 105,848 | (7) | 3.2 |
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Michael T. Brooks (1) |
| 35,750 | (8) | 1.1 |
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Robert V. Dwyer (1) |
| 125,810 | (9) | 3.8 |
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Evan C. Guillemin (1) |
| 203,500 | (10) (15) | 6.1 |
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David M. Kelly (1) |
| 9,050 | (11) | 0.3 |
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FMR Corp. (13) |
| 317,500 |
| 9.6 |
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Royce and Associates, Inc. (14) |
| 388,354 |
| 11.7 |
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All executive officers and directors as a group (10 in number) |
| 837,466 | (12) | 24.4 |
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If a shareholder wishes to participate in the Annual Meeting but does not wish to give a proxy, the shareholder may attend the Annual Meeting in person. Should you require additional information regarding the Annual Meeting, please contact Mesa at 303-987-8000.
(1)Why does my name not appear as a shareholder of record?
Many, if not most, investors own their shares through a broker-dealer or other nominee. Broker-dealers frequently clear their transactions through other broker-dealers, and may hold the actual certificates for shares in the name of securities depositories, such as CEDE & Co. (operated by Depository Trust Company of New York City). In such a case, only the ultimate certificate holder appears on our records as a shareholder, even though that nominee may not have any economic interest in the shares that you actually own through your broker-dealer. You should contact your broker-dealer for more information about this process.
The business address isWhen and where will the Annual Meeting be held?
As described in the Notice, we will hold the Annual Meeting at our corporate offices at 12100 West Sixth Avenue, Lakewood, Colorado 80228.
(2)Includes 6,075 shares which Mr. Schmieder has the right to acquire within 60 days by exercise of stock options.
(3)Includes 61,100 shares which Mr. Sullivan has the right to acquire within 60 days by exercise of stock options.
(4)Includes 9,300 shares which Mr. Peterson has the right to acquire within 60 days by exercise of stock options.
(5)Includes 6,025 shares which Mr. Adriance has the right to acquire within 60 days by exercise of stock options.
(6)Includes 3,100 shares which Mr. Tranmer has the right to acquire within 60 days by exercise of stock options.
(7)Includes 1,800 shares which Mr. Campbell has the right to acquire within 60 days by exercise of stock options.
(8)Includes 16,550 shares which Mr. Brooks has the right to acquire within 60 days by exercise of stock options.80228 (telephone 303-987-8000), on Thursday, September 24, 2015 at 9:00 a.m. MDT.
(9)Includes 1,800 shares which Mr. Dwyer has the right to acquire within 60 days by exercise of stock options.
(10)Includes 3,500 shares which Mr. Guillemin has the right to acquire within 60 days of exercise by stock options
(11)Includes 600 shares which Mr. Kelly has the right to acquire within 60 days by exercise of stock options.
(12)Includes 109,850 shares which the executive officers and directors of the Company as a group have the right to acquire within 60 days by exercise of stock options.
(13)The business address is 82 Devonshire Street, Boston, MA 02109.
(14)The business address is 745 Fifth Avenue, New York, NY 10151.
(15)Includes 200,000 shares beneficially owned by SEG Ventures, LLC, of which Mr. Guillemin is a partner.
(16)Mr. Tranmer resigned as Executive Vice President — Biological Indicator Operations effective July 9, 2012.
INFORMATION ABOUT THE BOARD OF DIRECTORS
The Board of Directors and its Committees
Our business is managed through the oversight and direction of our Board of Directors. During fiscal 2012, we had three standing committees: the Audit Committee, the Compensation Committee, and the Nominating Committee. Our Board of Directors currently consists of seven persons. Under applicable Nasdaq and SEC requirements, (i) we are required to have a majority of independent directors, and (ii) all of the members of each committee, with the exception of the Nominating Committee, must be independent. The Board of Directors has affirmatively determined that each of H. Stuart Campbell, Michael T. Brooks, David M. Kelly, Luke R. Schmieder and Evan C. Guillemin is an “independent director” as such term is defined in Nasdaq Listing Rule 5605. The Board of Directors has also affirmatively determined that each member of each committee ofHow does the Board of Directors satisfies the independence requirements applicable to committees as prescribed by the Nasdaq Listing Rules and the rules and regulations of the SEC. Messrs. Sullivan and Dwyer are not “independent directors” because they either are employees of the Company or have been employed by the Company in the past three years.recommend that I vote?
The Board of Directors hasrecommends that shareholders vote FOR all the responsibility for establishing broad corporate policiesnominees listed and for the overall performance of the Company, although it is not involved in day-to-day operating details. The Board meets regularly throughout the year, including the annual organization meeting following the Annual Meeting of Shareholders, to review significant developments affecting the CompanyFOR Proposals 2 and to act upon matters requiring Board approval. It also holds special meetings as required from time to time when important matters arise, requiring Board action between scheduled meetings.
Directors are elected at each Annual Meeting of Shareholders and serve until a successor is duly elected and qualified at an appropriate Annual Meeting of the Shareholders. Vacancies may be filled by an affirmative vote of the majority of the remaining directors.
No director attended fewer than 75 percent of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings held by all committees of the Board on which he served.
Each non-employee director will be compensated separately for service on the Board and is reimbursed for expenses to attend Board meetings. Members of the Audit, Nominating and Compensation Committees are not compensated separately for service on those committees.
Meetings of the Board of Directors
The Board of Directors met seven times during fiscal 2012 and each director attended each meeting held during the time in which he was serving as a director.
Attendance at Annual Meeting
Although we do not have a formal policy regarding attendance by the Board of Directors at the Annual Meeting of Shareholders, we encourage directors to attend, and the annual meeting of the Board of Directors typically is held on the same day as the Annual Meeting of Shareholders. We anticipate that each director nominated for re-election will attend both meetings in 2012.3.
Committees of the Board
The charter of each committee is available in print to any shareholder who requests it, or on our website at www.mesalabs.com/corporate. Each of the following Directors are members of all of the committees (Audit, Compensation and Nominating):
Michael T. Brooks
H. Stuart Campbell, Nominating Committee Chairman
Evan C. Guillemin, Audit Committee Chairman
David M. Kelly, Compensation Committee Chairman
Luke R. Schmieder
In addition to the standing committees mentioned above, the Board may convene special committees to consider various other matters as they arise. During fiscal 2012, the Board did not convene any special committees.
Audit Committee. Pursuant to its charter, the Audit Committee assists the Board of Directors in overseeing (i) the financial statements and audits of the Company, (ii) the Company’s compliance with financial reporting requirements, and (iii) the independence and performance of the Company’s internal and external auditors. The Audit Committee charter further requires the Audit Committee to, among other things:
·Review the annual audited financial statements with management and the independent auditors and determine whether to recommend to the Board that they be included in the Company’s Annual Report on Form 10-K;
·Review proposed major changes to the Company’s auditing and accounting principles and practices;
·Review and evaluate the Company’s system of internal control;
·Review significant financial reporting issues raised by management or the independent auditors; and
·Establish procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters as well as the confidential and anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
The Audit Committee met eight times during fiscal 2012. All members of the Audit Committee were present at each meeting. The Board of Directors has determined that Mr. Evan Guillemin is an “audit committee financial expert” as defined in the applicable rules and regulations of the Exchange Act and is “independent.” The SEC has indicated that the designation of a person as an “audit committee financial expert” does not (i) mean that such person is an expert for any purpose, including without limitation for purposes of Section 11 of the Securities Act of 1933, as amended (ii) impose on such person any duties, obligations, or liability that are greater than the duties, obligations, and liability imposed on such person as a member of the Audit Committee and the Board of Directors in the absence of such designation, or (iii) affect the duties, obligations, or liability of any other member of the Audit Committee or the Board of Directors.
As required by Nasdaq, our Board of Directors has reviewed the qualifications of its Audit Committee members and has determined that none of them has a relationship with us that may interfere with the exercise of their independence from management and the Company.
Compensation Committee . Pursuant to its charter, the Compensation Committee assists the Board of Directors in fulfilling its oversight responsibilities for compensation of executive officers and administration of the Company’s compensation and benefit plans.
The Compensation Committee met two times during fiscal 2012, and all members of the Compensation Committee were present at each meeting.
Nominating Committee. The Nominating Committee assists the Board of Directors in identifying qualified individuals to become members of the Board. The committee met two times during fiscal 2012, and all members of the Nominating Committee were present.
Special Committees. As needed, special committees may be constituted by the Board to review special matters or assist in special investigations and any matters which may arise out of those investigations. In fiscal 2012, we had no special committees.
Director Nominations
In evaluating potential director candidates, the Nominating Committee considers the appropriate balance of experience, skills, and characteristics required of the Board of Directors, and seeks to ensure that at least a majority of the directors are independent under the applicable Listing Rules of The NASDAQ Stock Market. The Nominating Committee selects director nominees based on their personal and professional integrity, depth and breadth of experience, ability to make independent analytical inquiries, understanding of our business, willingness to devote adequate attention and time to duties of the Board of Directors, and such other criteria as are deemed relevant by the Nominating Committee. The Nominating Committee believes that the backgrounds and qualifications of the directors, considered as a group, should provide a diverse mix of experience, knowledge, and skills.
In identifying potential director candidates, the Nominating Committee relies on recommendations made by current directors and officers. In addition, the Nominating Committee may engage a third party search firm to identify and recommend potential candidates. Finally, the Nominating Committee will consider candidates recommended by shareholders.
Compensation Committee Interlocks and Insider Participation
During fiscal 2012, no members of our Compensation Committee were executive officers serving on the Compensation Committee of another entity whose executive officers served on the Company’s Board of Directors. No member of the Compensation Committee was an officer or employee of the Company, or had a business relationship with or conducted any undisclosed transactions with the Company.
Board Leadership
The role of Chairman is currently held by Mr. Luke R. Schmieder and the role of CEO is held by Dr. John J. Sullivan. Because of Mr. Schmieder’s role as founder, and his successful tenure forHow can I obtain more than 25 years as CEO with the Company, the Board believes he is best suited for the Chairman’s role. It is the Board’s opinion that Dr. Sullivan’s training and experience with similar organizations and his experience in increasingly responsible positions within the Company makes him well suited for the role of CEO. Mr. Evan Guillemin currently serves as the Company’s Audit Committee Chairman. Mr. Guillemin has considerable experience both as a CFO and in financial analysis, which makes him well suited to this role. Besides his almost 30 years of experience with the Company, Mr. Campbell has served on the boards of several other successful publicly owned companies over his career.
Risk Oversightinformation about Mesa?
The Board of Directors takes a key role in overseeing the Company’s risks. The Board receives frequent timely reports of the Company’s financial performance, changes in and composition of balance sheet accounts, quality assurance program effectiveness, product liability risks and status of relationships with all business constituencies including customers, employees, suppliers and government entities. The Audit Committee receives regular reports on Mesa Laboratories, Inc.’s compliance with securities laws and communicates with the SEC and shareholders. The Audit Committee has established an independent whistleblower hot line to encourage early and anonymous reporting of accounting irregularities or other violations of its codes of ethics. The Board of Directors routinely reviews litigation threats, product/market strategies and operational activities of the Company.
Code of Ethics
We have adoptedincluded an Annual Report to Shareholders with this Proxy Statement that contains additional information about Mesa. In addition, information is available on our website at www.mesalabs.com and through the EDGAR filings maintained by the Securities and Exchange Commission atwww.sec.gov. Neither the Annual Report to Shareholders nor our website is incorporated into this Proxy Statement and they are not to be considered a Code of Business Conduct and Ethics that applies to all of our employees, executive officers and directors, including our principal executive officer and principal financial officer. The Code contains written standards that are reasonably designed to deter wrongdoing and includes provisions regarding ethical conduct, conflicts of interest, proper disclosure in all public communications, compliance with all applicable governmental laws, rules and regulations, and the prompt reporting of violationspart of the Code and accountability for adherence to the Code. A copy of the Code is available at no charge on our web site at www.mesalabs.com/corporate/ .soliciting material.
Shareholder Communications with the Board
Shareholders and other interested parties may communicate with one or more members of the Board of Directors by writing to all or one of the following: Audit Committee Chairman, Compensation Committee Chairman, or Nominating Committee Chairman, c/o Corporate Secretary, Mesa Laboratories, Inc., 12100 West Sixth Avenue, Lakewood CO 80228.
PROPOSAL 1.
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS TO THE SHAREHOLDERS THAT THEY VOTE “FOR” THE ELECTION OF SUCH NOMINEES.
At the meeting,Annual Meeting, seven directors are to be elected. Each director will be elected for a one-year term or until his successor is elected and qualified.
Shares represented by properly executed proxies will be voted, in the absence of contrary indication or revocation by the shareholder granting such proxy, in favor of the persons named below as directors, to hold office for the term stated in the preceding paragraph. The person named as proxy in the enclosed proxy has been designated by management and intends to vote for the election to the Board of Directors of the persons named below, each of whom is now a director of the Company. If the contingency should occur that any such nominee is unable to serve as a director, it is intended that the shares represented by the proxies will be voted, in the absence of contrary indication, for any substitute nominee that the Nominating Committee may designate. Management knows of no reason why any nominee would be unable to serve. The information presented herein with respect to the nominees was obtained in part from the respective persons, and in part from the records of the Company.
Information about Board of Directors Nominees
In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes and skills that led our Board of Directors to the conclusion that he should serve as a director, we also believe that all of our director nominees display personal and professional integrity; broad-based business acumen; a high level of understanding of our business and our industry; strategic thinking and a willingness to share ideas; and have a diversity of experiences, expertise and background.
Nominees for Election as DirectorsDirector
Name and Address |
| Age |
| Office |
| Term Expires(1) |
Luke R. Schmieder |
| 69 |
| Chairman of the Board of Directors (2) |
| 2012 |
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John. J. Sullivan, Ph.D. |
| 59 |
| Chief Executive Officer, President, Treasurer and Director |
| 2012 |
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H. Stuart Campbell |
| 82 |
| Director (2) |
| 2012 |
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Michael T. Brooks |
| 63 |
| Director (2) |
| 2012 |
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Robert V. Dwyer |
| 71 |
| Director |
| 2012 |
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Evan C. Guillemin |
| 47 |
| Director (2) |
| 2012 |
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David M. Kelly |
| 70 |
| Director (2) |
| 2012 |
(1)The term of officefollowing table sets forth the names and ages of each officerof our directors as of April 9, 2015:
Name | Age | Position |
H. Stuart Campbell(1)(3) | 85 | Chairman of the Board of Directors |
John J. Sullivan, Ph.D. | 62 | Chief Executive Officer, Director |
Michael T. Brooks(1) | 65 | Director |
Robert V. Dwyer(1) | 74 | Director |
Evan C. Guillemin(1) | 49 | Director |
David M. Kelly(1) | 73 | Director |
John B. Schmieder(1) (2) | 46 | Director |
(1) Member of the Company is atAudit, Compensation and Nominating and Governance committees.
(2) Effective April 8, 2015, Luke R. Schmieder retired as director and Chairman of the discretionBoard of Directors. He was replaced as a director by John B. Schmieder.
(3) Effective April 8, 2015, Mr. Campbell was elected as Chairman of the Board of Directors.
(2)Member of Audit Committee, Compensation Committee and Nominating Committee.
Luke R. Schmieder, Chairman of the Board of Directors
Mr. Schmieder attended Ohio State University and Ohio University taking courses in mechanical engineering and business management. Mr. Schmieder was employed from 1970 to 1977 by Cobe Laboratories, Inc. (manufacturer of dialysis and cardiovascular equipment and supplies) as a designer and process controller on various projects. From 1977 to 1982, Mr. Schmieder served as president and principal of a consulting company for product and process development primarily in the medical field. Mr. SchmiederH. Stuart Campbell has served as Chief Executive Officera director since May 1983 and a Director of the Company since its inception in March 1982. At March 10, 2009, Mr. Schmieder retired from his positions as Chief Executive Officer and Treasurer, and now devotes such time as is necessary to the affairs of the Company.
John J. Sullivan, Ph.D., Chief Executive Officer, President, Treasurer Mr. Campbell owned and Director
Dr. Sullivan received his Bachelor of Science degree in Biology from Western Washington University in 1976 and a Ph.D. degree in Food Science from the University of Washington in 1982. From 1976 until 1980, Dr. Sullivan was employedserved as an Analytical Chemist at BioMed Researchofficer of Highland Packaging Labs, (an independent research and testing laboratory). In 1982, Dr. Sullivan joined the U.S. Food and Drug Administration’s Seattle District Laboratory as a Senior Research Scientist and worked thereInc., Somerville, New Jersey (contract packaging business) until 1988. In 1988, Dr. Sullivan joined Varian, Inc. (a major analytical instrument manufacturer) and servedits sale in various capacities in Research and Development, Sales and Marketing Management and in Business Development until 2004. Dr. Sullivan joined the Company in October 2004 in the role of Vice President of Sales and Marketing, and was promoted to the positions of President and Chief Operating Officer in 2006. In March 2009, Dr. Sullivan was promoted to the positions of Chief Executive Officer and President, and appointed to the Board of Directors.
H. Stuart Campbell, Director
Mr. Campbell received his Bachelor of Science degree from Cornell University in 1951. From 1960 through September 1982, Mr. Campbell served in various capacities for Johnson & Johnson and Ethicon, Inc., a domestic subsidiary of Johnson & Johnson.2002. From 1977 through September 1982, he was a Company Group Chairman with Johnson & Johnson and served as Chief Executive Officer and Chairman of the Board of Directors of eight major corporate subsidiaries. From 1960 through September 1982, Mr. Campbell ownedserved in various capacities for Johnson & Johnson and Ethicon, Inc., a domestic subsidiary of Johnson & Johnson. Mr. Campbell received his Bachelor of Science degree from Cornell University in 1951.
John J. Sullivan, Ph.D. was promoted to the position of Chief Executive Officer and President, and appointed to the Board of Directors in March 2009. Dr. Sullivan joined us in October 2004 in the role of Vice President of Sales and Marketing, and was promoted to the positions of President and Chief Operating Officer in 2006. In 1988, Dr. Sullivan joined Varian, Inc. (a major analytical instrument manufacturer) and served in various capacities in Research and Development, Sales and Marketing Management and in Business Development until 2004. In 1982, Dr. Sullivan joined the U.S. Food and Drug Administration’s Seattle District Laboratory as a Senior Research Scientist and worked there until 1988. From 1976 until 1980, Dr. Sullivan was employed as an officerAnalytical Chemist at BioMed Research Labs (an independent research and testing laboratory). Dr. Sullivan received his Bachelor of Highland Packaging Labs, Inc., Somerville, New Jersey (contract packaging business) until its saleScience degree in 2002. Mr. CampbellBiology from Western Washington University in 1976 and a Ph.D. degree in Food Science from the University of Washington in 1982.
Michael T. Brooks has served as a Director of the Companydirector since May 1983October 1998 and devotes such time as is necessary to the affairs of the Company.
Michael T. Brooks, Director
Mr. Brooks received his Bachelor of Arts in History from Ohio Wesleyan University in 1971. While pursuing a career in fluid power, he received a Masters in Business Administration from the University of Denver in 1983. Mr. Brooks was an independent manufacturer’s representative from 1982 to 1985, at which time he purchased an interest in Fiero Fluid Power, which he presently owns and operates. Fiero Fluid Power is a Rep/Distributor selling pneumatic and instrumentation equipment. HeWhile pursuing a career in fluid power, he received a Masters degree in Business Administration from the University of Denver in 1983. Mr. Brooks received his Bachelor of Arts degree in History from Ohio Wesleyan University in 1971.
Robert V. Dwyer has beenserved as a Directordirector since October 1998May 2006 and devotes such time as is necessary to the affairs of the Company.
Robert V. Dwyer, Director
Mr. Dwyer received his Bachelor of Arts in Philosophy from Creighton University in 1962, and he received his J.D. from Creighton University in 1964. Mr. Dwyer has served as President and was the majority owner of our Raven Biological Laboratories Inc. and is also an Attorney at Law.operation until November 2010. Mr. Dwyer currently serves on the Board of Directors of American National Bank, based in Omaha, Nebraska. In addition, Mr. Dwyer holds ownership positions in other small business entities. He was appointed a Director in May 2006 andMr. Dwyer served as President ofand was the Company’smajority owner of Raven Biological Laboratories, operation until November 2010.Inc. and is also an Attorney at Law. Mr. Dwyer received his Bachelor of Arts in Philosophy degree from Creighton University in 1962, and he received his J.D. from Creighton University in 1964.
Evan C. Guillemin Director
Mr. Guillemin received has served as a Bachelordirector since February 2009 and devotes such time as is necessary to the affairs of Arts degree from Yale University in 1987 and a Master’s Degree in Business Administration with distinction from Harvard Business School in 1996.the Company. Mr. Guillemin has served as Chief Financial Officer (CFO)(“CFO”) and AnalystAssociate Portfolio Manager at Select Equity Group Inc., a registered investment adviser based in New York City, since 2004. Mr. Guillemin also currently serves on the Board of Directors of Shake Shack, Inc. (NYSE: SHAK), and a privately held company. Prior to joining Select Equity Group, Mr. Guillemin served as CFO of Alloy Merchandising Group Inc., the successor to Delias Inc. Mr. Guillemin was an executive and board member of Delias Inc., a NASDAQ-traded specialty retailing company. He served as CFO and then Chief Operating Officer of Delias from 1996 to 2003, when the company was acquired by Alloy Inc. He received his Bachelor of Arts degree from Yale University in 1987 and a Master's degree in Business Administration with distinction from Harvard Business School in 1996.
David M. Kellyhas beenserved as a Directordirector since February 2009October 2010 and devotes such time as is necessary to the affairs of the Company.
David M. Kelly, Director
Mr. Kelly receivedcurrently serves as a Bachelormember of Science degree in Physics from Boston College in 1964, a Master’s Degree in Molecular Biophysics from Yale in 1966,the Board of Directors of Federated Investors, Inc. (NYSE: FII), Mestek (OTC: MCCK), and a Mastersprivately held company. In 1995, Mr. Kelly joined Matthews International Corporation, where he served as Chairman of Business Administration from Harvard Business Schoolthe Board, Chief Executive Officer and President until his retirement in 1968.2007. From 1972 to 1995, Mr. Kelly was with Carrier Corporation and held a variety of executive positions, in the United States and in Asia, in marketing, finance, manufacturing and operations, including President of North America operations. In 1995 Mr. Kelly joined Matthews International Corporation, where heHe received a Bachelor of Science degree in Physics from Boston College in 1964, a Master’s degree in Molecular Biophysics from Yale in 1966, and a Masters of Business Administration from Harvard Business School in 1968.
John B. Schmiederhas served as Chairman of the Board, Chief Executive Officer, and President until his retirement in 2007. Mr. Kelly currently serves as a member of the Board of Directors of Federated Investors, Inc. and Mestek. He was appointed a Director of the Company in October 2010director since April 2015 and devotes such time as is necessary to the affairs of the Company. Mr. Schmieder has been the co-owner and operator of Community Acupuncture of Saint Louis since 2005 and Holistic Fitness since 2010. From 2008 to 2010, Mr. Schmieder also served as the president of the Acupuncture Association of Missouri. From 1995 to 2002, Mr. Schmieder served as an equity and financial analyst at Macy’s Corporation, George K. Baum &Co. and Citizens Funds (now Sentinel Investments). From 1990 to 1993 Mr. Schmieder served in various positions, including senior auditor, at Arthur Andersen & Co. He received a Bachelor of Administration in Business degree from the University of San Diego in 1990, a Master’s degree in Business Administration with emphasis in finance and corporate strategy from the University of Michigan in 1995 and a Master’s of Oriental Medicine from the New England School of Acupuncture in 2005.
Unless otherwise indicated, no director has held any other directorships for the past five years.
Directors are elected at each Annual Meeting and serve a one year term until a successor is duly elected and qualified at an appropriate Annual Meeting. Vacancies may be filled by an affirmative vote of the majority of the remaining directors.
The Board of Directors met five times during the year ended March 31, 2015. Each director attended at least 75% of the Board of Director meetings, and at least 75% of the regular and special meetings of the committees on which they serve, either in person or telephonically. In addition, directors are required to prepare for each meeting by reviewing materials distributed in advance.
There were, and are, no family relationships among the Named Executive Officers (“NEOs”), directors or any person chosen to become a director or executive officer other than: effective April 8, 2015, Luke R. Schmieder retired as a director and his son, John B. Schmieder was appointed as his replacement.
Based solelyon information submitted by the directors and executive officers, none of the directors or executive officers is involved in, or has been involved in, legal proceedings during the past ten years that are material to an evaluation of the ability or integrity of that director or executive officer.
Director Compensation
Each non-employee director is compensated separately for service on the Board of Directors and is reimbursed for expenses to attend Board of Director meetings. Chairs of the Audit, Compensation, and Nominating and Governance Committees are compensated separately for service on those committees. The following summarizes director compensation for the year ended March 31, 2015.
Fees Earned or Paid in Cash | Option Awards(1) | Total | ||||||||||
Name | ($) | ($) | ($) | |||||||||
(a) | (b) | (d) | (h) | |||||||||
Michael T. Brooks | $ | 22,000 | $ | 33,142 | $ | 55,142 | ||||||
H. Stuart Campbell | 23,000 | 33,142 | 56,142 | |||||||||
Robert V. Dwyer | 22,000 | 33,142 | 55,142 | |||||||||
Evan C. Guillemin | 24,000 | 33,142 | 57,142 | |||||||||
David M. Kelly | 23,500 | 33,142 | 56,642 | |||||||||
Luke R. Schmieder | 22,000 | 33,142 | 55,142 | |||||||||
(1) | 1,000 and 120 stock options were granted to each director on April 1, 2014 and October 2, 2014, respectively. We calculated these amounts in accordance with the provisions of Accounting Standards Codification (“ASC”) Section 718 –Compensation – Stock Compensation, using the Black-Scholes option-pricing model. |
CORPORATE GOVERNANCE
Our business is managed through the oversight and direction of our Board of Directors. We have three standing committees: Audit, Compensation, and Nominating and Governance. Our Board of Directors currently consists of seven persons. Under applicable NASDAQ and SEC requirements, (a) we are required to have a majority of independent directors, and (b) all of the members of each committee, with the exception of the Nominating and Governance Committee, must be independent. The Board of Directors has affirmatively determined that each of H. Stuart Campbell, Michael T. Brooks, David M. Kelly, John B. Schmieder, Evan C. Guillemin and Robert V. Dwyer is an “independent director” as such term is defined in NASDAQ Listing Rule 5605. The Board of Directors has also affirmatively determined that each member of each committee of the Board of Directors satisfies the independence requirements applicable to committees as prescribed by the NASDAQ Listing Rules and the rules and regulations of the SEC. Dr. Sullivan is not an “independent director” because he is our employee.
The Board of Directors has the responsibility for establishing broad corporate policies and for our overall performance, although it is not involved in day-to-day operating details. The Board of Directors meets regularly throughout the year, including the annual organizational meeting following each Annual Meeting, to review significant developments affecting the Company and to act upon matters requiring Board of Director approval. It also holds special meetings as required from time to time when important matters arise, requiring Board of Director action between scheduled meetings.
Committees of the Board of Directors
The charter of each committee is available in print to any shareholder who requests it, or on our website at www.mesalabs.com/about us/corporate information/corporate governance. Each of the following directors is a reviewmember of Forms 3all of our committees (Audit, Compensation, and 4Nominating and amendments thereto furnishedGovernance):
Michael T. Brooks
H. Stuart Campbell, Nominating and Governance Committee Chairman
Robert V. Dwyer
Evan C. Guillemin, Audit Committee Chairman
David M. Kelly, Compensation Committee Chairman
John B. Schmieder
In addition to the Company pursuantstanding committees mentioned above, the Board of Directors may convene special committees to § 240.16a-3(e) during its most recent fiscalconsider various other matters as they arise. During the year and Forms 5 and amendments thereto furnished toended March 31, 2015, the Company with respectBoard of Directors did not convene any special committees.
Audit Committee
Pursuant to its most recent fiscal year,charter, the Audit Committee assists the Board of Directors in overseeing (i) the consolidated financial statements and any written representation from the reporting person (as hereinafter defined) that no Form 5 is required, the Company is not aware of any person who, at any time during the fiscal year, was a director, officer, beneficial owner of more than ten percent of any class of equity securitiesaudits of the Company, registered pursuant(ii) our compliance with financial reporting requirements, and (iii) the independence and performance of our internal and external auditors. The Audit Committee charter further requires the Audit Committee to, Section 12among other things:
● | Review the annual audited consolidated financial statements with management and the independent auditors and determine whether to recommend to the Board of Directors that they be included in our Annual Report onForm 10-K; |
● | Review proposed major changes to our auditing and accounting principles and practices; |
● | Review and evaluate our system of internal control; |
● | Review significant financial reporting issues raised by management or the independent auditors; and |
● | Establish procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters as well as the confidential and anonymous submission by our employees of concerns regarding questionable accounting or auditing matters. |
The Audit Committee met four times during the year ended March 31, 2015. All members of the Audit Committee were present at each meeting (except for one meeting in which one committee member was not able to attend). The Board of Directors has determined that Mr. Evan Guillemin is an “audit committee financial expert” as defined in the applicable rules and regulations of the Exchange Act (“reporting person”),and is “independent.” The SEC has indicated that failed to filethe designation of a person as an “audit committee financial expert” does not (i) mean that such person is an expert for any purpose, including without limitation for purposes of Section 11 of the Securities Act of 1933, as amended (ii) impose on such person any duties, obligations, or liability that are greater than the duties, obligations, and liability imposed on such person as a timely basis, as disclosedmember of the Audit Committee and the Board of Directors in the above Forms, reportsabsence of such designation, or (iii) affect the duties, obligations, or liability of any other member of the Audit Committee or the Board of Directors.
As required by Section 16(a)NASDAQ, our Board of Directors has reviewed the Exchange Act duringqualifications of our Audit Committee members and has determined that none of them has a relationship with us that may interfere with the most recent fiscal year or prior fiscal years.exercise of their independence from management and the Company.
COMPENSATION, DISCUSSION AND ANALYSIS
Compensation Committee
Pursuant to its charter, the Compensation Committee assists the Board of Directors in fulfilling its oversight responsibilities for compensation of executive officers and administration of our compensation and benefit plans. The Compensation Committee supervises our executive compensation program for Named Executive Officers (“NEOs”). Allmet three times during the year ended March 31, 2015, and all members of the committee are independent, non-employee directors. As a group,Compensation Committee were present at each meeting.
During the committee reports toyear ended March 31, 2015, no members of our Compensation Committee were executive officers serving on the fullCompensation Committee of another entity whose executive officers served on our Board of Directors. No member of the Compensation Committee was an officer or employee of the Company, or had a business relationship with or conducted any undisclosed transactions with the Company. Our CEO,Chief Executive Officer, upon request, may attend selected meetings of the committee and/Compensation Committee.
Nominating and Governance Committee
The Nominating and Governance Committee assists the Board of Directors in identifying qualified individuals to become members of the Board of Directors, oversees, reviews and where appropriate, makes recommendations concerning the Company’s corporate governance guidelines and conducts an annual self-assessment of Board of Director performance. The Nominating and Governance Committee met three times during the year ended March 31, 2015, and all members of the Nominating and Governance Committee were present.
In evaluating potential director candidates, the Nominating and Governance Committee considers the appropriate balance of experience, skills and characteristics required of the Board of Directors, and seeks to ensure that at least a majority of the directors are independent under the applicable Listing Rules of NASDAQ. The Nominating and Governance Committee selects director nominees based on their personal and professional integrity, depth and breadth of experience, ability to make independent analytical inquiries, understanding of our business, willingness to devote adequate attention and time to duties of the Board of Directors, and such other criteria as are deemed relevant by the Nominating and Governance Committee. The Nominating and Governance Committee believes that the backgrounds and qualifications of the directors, considered as a group, should provide a diverse mix of experience, knowledge, and skills.
In identifying potential director candidates, the Nominating and Governance Committee relies on recommendations made by current directors and officers. In addition, the Nominating and Governance Committee may engage a third party search firm to identify and recommend potential candidates. Finally, the Nominating and Governance Committee will consider candidates recommended by shareholders.
Risk Oversight
The Board of Directors takes a key role in overseeing our risks. The Board of Directors receives frequent timely reports of our financial performance, changes in and composition of consolidated balance sheet accounts, quality assurance program effectiveness, product liability risks and status of relationships with all business constituencies including customers, employees, suppliers and government entities. The Audit Committee receives regular reports on our compliance with securities laws and communications with the SEC and shareholders. The Audit Committee has established an independent whistleblower hot line to encourage early and anonymous reporting of accounting irregularities or provide inputother violations of our codes of ethics. The Board of Directors routinely reviews our litigation threats, product/market strategies and operational activities.
Code of Ethics
We adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to all of our employees, executive officers and directors, including our principal executive officer and principal financial officer. The Code of Ethics contains written standards that are reasonably designed to deter wrongdoing and includes provisions regarding ethical conduct, conflicts of interest, proper disclosure in all public communications, compliance with all applicable governmental laws, rules and regulations, and the prompt reporting of violations of the Code of Ethics and accountability for adherence to the Code of Ethics. A copy of the Code of Ethics is available on our website atwww.mesalabs.com/corporate/information/ corporate governance.
Shareholder Communications with the Board of Directors
Shareholders and other interested parties may communicate with one or more members of the Board of Directors by writing to all or one of the following: Audit Committee Chairman, Compensation Committee Chairman or Nominating and Governance Committee Chairman, c/o Corporate Secretary, Mesa Laboratories, Inc., 12100 West Sixth Avenue, Lakewood CO 80228.
Ownership of equity securities of the company
The following table sets forth the number of shares of our Common Stock owned beneficially as of March 31, 2015 (unless otherwise noted), by each person known by the Company to have owned beneficially more than five percent of such shares then outstanding, by each of our executive officers and directors, and by all of our executive officers and directors as a group. This information gives effect to securities deemed outstanding pursuant to Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended. As far as is known, no person owns beneficially more than five percent of the outstanding shares of Common Stock as of March 31, 2015 except as set forth below.
Amount and Nature of Beneficial | Percentage of Class- | |||||||
Name of Beneficial Owner | Owner | Beneficially Owned | ||||||
Luke R. Schmieder(1) | 179,334 | (5) | 5.0 | |||||
John J. Sullivan, Ph.D.(1) | 113,036 | (6) | 3.1 | |||||
Glenn E. Adriance(1) | 24,546 | (7) | 0.7 | |||||
H. Stuart Campbell(1) | 79,629 | (8) | 2.2 | |||||
Michael T. Brooks(1) | 39,521 | (9) | 1.1 | |||||
Robert V. Dwyer(1) | 104,531 | (10) | 2.9 | |||||
Evan C. Guillemin(1) | 207,421 | (11) (12) | 5.8 | |||||
David M. Kelly(1) | 9,871 | (13) | 0.3 | |||||
John V. Sakys(1) | 6,971 | (14) | 0.2 | |||||
FMR LLC(2) | 310,000 | 8.7 | ||||||
Conestoga Capital Advisors(3) | 394,059 | 11.1 | ||||||
Nine Ten Capital Management, LLC(4) | 207,460 | 5.8 | ||||||
All executive officers and directors as a group (9 in number) | 764,860 | (15) | 20.9 | |||||
(1) | The business address is 12100 West Sixth Avenue, Lakewood, Colorado 80228. |
(2) | The business address is 82 Devonshire Street, Boston, Massachusetts 02109. |
(3) | The business address is 550 E. Swedesford Road, Suite 120, Wayne, Pennsylvania 19087. |
(4) | The business address is 12600 Hill Country Blvd., Suite R-230, Austin, Texas 78738. |
(5) | Includes 9,846 shares which Mr. Schmieder has the right to acquire within 60 days by exercise of stock options. |
(6) | Includes 61,943 shares which Dr. Sullivan has the right to acquire within 60 days by exercise of stock options. |
(7) | Includes 7,446 shares which Mr. Adriance has the right to acquire within 60 days by exercise of stock options. |
(8) | Includes 921 shares which Mr. Campbell has the right to acquire within 60 days by exercise of stock options. |
(9) | Includes 10,621 shares which Mr. Brooks has the right to acquire within 60 days by exercise of stock options. |
(10) | Includes 921 shares which Mr. Dwyer has the right to acquire within 60 days by exercise of stock options. |
(11) | Includes 7,421 shares which Mr. Guillemin has the right to acquire within 60 days by exercise of stock options. |
(12) | Includes 200,000 shares beneficially owned by SEG Ventures, LLC, of which Mr. Guillemin is a partner. |
(13) | Includes 3,821 shares which Mr. Kelly has the right to acquire within 60 days by exercise of stock options. |
(14) | Includes 6,971 shares which Mr. Sakys has the right to acquire within 60 days by exercise of stock options. |
(15) | Includes 109,911 shares that our executive officers and directors as a group have the right to acquire within 60 days by exercise of stock options. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act’) requires our directors, executive officers and persons who own more than five percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. Officers, directors and greater than five percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. To our knowledge, based upon a review of the copies of such reports furnished to us and based upon written representations that no other reports were required, all Section 16(a) filing requirements applicable to our officers, directors and greater than five percent beneficial owners were complied with during the fiscal year ended March 31, 2015.
COMPENSATION DISCUSSION AND ANALYSIS
Executive Officers of the Registrant
The names, addresses, ages and dates of appointment of the executive officers of the Company are:
Name and Address | Age | Office | Date Appointed | |||
John J. Sullivan, Ph.D. 12100 West Sixth Avenue Lakewood, Colorado | 62 | Chief Executive Officer, President, Treasurer and Director | 2004 | |||
John V. Sakys 12100 West Sixth Avenue Lakewood, Colorado | 46 | Chief Financial and Chief Accounting Officer and Secretary | 2012 | |||
Glenn E. Adriance 12100 West Sixth Avenue Lakewood, Colorado | 60 | Chief Sales and Marketing Officer | 2007 |
John J. Sullivan, Ph.D. was promoted to the position of Chief Executive Officer and President, and appointed to the Board of Directors in March 2009. Dr. Sullivan joined us in October 2004 in the role of Vice President of Sales and Marketing, and was promoted to the positions of President and Chief Operating Officer in 2006. In 1988, Dr. Sullivan joined Varian, Inc. (a major analytical instrument manufacturer) and served in various capacities in Research and Development, Sales and Marketing Management and in Business Development until 2004. In 1982, Dr. Sullivan joined the U.S. Food and Drug Administration’s Seattle District Laboratory as a Senior Research Scientist and worked there until 1988. From 1976 until 1980, Dr. Sullivan was employed as an Analytical Chemist at BioMed Research Labs (an independent research and testing laboratory). Dr. Sullivan received his Bachelor of Science degree in Biology from Western Washington University in 1976 and a Ph.D. degree in Food Science from the University of Washington in 1982.
John V. Sakys joined us in October 2012 as our Chief Financial Officer. From 2009 through October 2012, Mr. Sakys held several positions with The Berry Company, LLC, and its predecessor company, Local Insight Regatta Holdings, Inc., most recently as its Vice President and Chief Accounting Officer. From 2001 to 2009, Mr. Sakys was the Vice President and Chief Financial Officer of Isonics Corporation, a NASDAQ listed company based in the Denver area. From September 2000 to April 2001, Mr. Sakys was Controller of AuraServ Communications. From July 1998 to September 2000, Mr. Sakys was Director of Financial Reporting for Media One, Inc. From December 1994 to July 1998, Mr. Sakys was an audit manager at Ernst and Young LLP. Mr. Sakys received his Bachelor of Arts degree in Business Economics with an emphasis in accounting from the University of California at Santa Barbara in 1990 and is a Certified Public Accountant.
Glenn E. Adriance joined us in October 2007. From 2000 to 2007, Mr. Adriance was employed with two software firms, Lakeview Technology and Scientific Technologies Corporation as Global Business Partner Director and VP/COO/Executive Officer, respectively. From 1983 until 2000, Mr. Adriance held various sales and marketing roles of increasing responsibility at IBM. From 1981 to 1983, Mr. Adriance was employed at Sandia National Laboratories as a senior Business Systems Analyst responsible for various business systems that were fundamental to Sandia’s operations. Mr. Adriance received his Bachelor of Science degree in Forestry from the University of Massachusetts in 1978 and his MBA from Colorado State University in 1981.
Compensation Committee
The Compensation Committee supervises (on a direct basis for our three executive officers and a non-direct basis for all other NEOs) our executive compensation to the committee. The committee has the authority to engage outside consultants or purchase compensation surveys, if needed,program for evaluation of executive compensation levels. The committee met two times in fiscal 2012.
Compensation Philosophy
NEO’s. The Compensation Committee has designed a compensation program for NEOs to attract, retain and motivate talent in our competitive market environment while focusing the executive team and Mesa Laboratories, Inc.the Company on the creation of long-term value for our shareholders. The Compensation Committee has the authority to engage outside consultants or purchase compensation surveys, if needed, for evaluation of executive compensation levels.
Compensation Philosophy
NEO positions during fiscal 2012the year ended March 31, 2015 included: Chief Executive Officer and President, Chief Financial Officer, Executive Vice President ofChief Sales and Marketing Officer and ExecutiveSenior Vice PresidentPresidents of Operations. Other positions may be added as business conditions warrant.
OurWe have designed our compensation programs for our NEOs are designed to:
● | attract and retain high performing and experienced executives; |
·attract and retain high performing and experienced executives;
● | motivate and reward executives whose knowledge, skills and performance are critical to our success; |
·motivate and reward executives whose knowledge, skills and performance are critical to our success;
● | align the interests of our executives and shareholders by motivating executives to increase shareholder value; |
·align the interests of our executives and shareholders by motivating executives to increase shareholder value;
● | foster a shared commitment among executives by coordinating their goals; and |
·foster a shared commitment among executives by coordinating their goals; and
● |
|
Our Compensation Committee administers four elements for NEOs: base salary (cash), short-termShort-term incentives (bonus)(cash), long-term incentives (equity), and benefits. The total compensation package reflects Mesa’sour “Pay for Performance” philosophy, which is to couple employee rewards with the interests of our shareholders. We believe strongly that retention and motivation of successful employees is in the long-term interest of our shareholders. The committeeCompensation Committee targets the total compensation level to be competitive with comparable companies in terms of size (as measured by revenue and market capitalization), our industry segments and geographic locations.
Benchmarking
The Compensation Committee, with assistance from Companyour executives if required, researches compensation levels within Mesa’s industry by investigating comparable company records, purchasing third party compensation surveys or engaging compensation consultants. The acquired data is evaluated by the committeeCompensation Committee and is one factor in establishing compensation plans for the NEOs.
To help establish competitive compensation levels, for fiscal year 2013, the Compensation Committee examined executive compensation survey data, both base salaries and total cash compensation, from ERI Economic Research Institute.Institute (“ERI”). The survey data was tailored to include only those U.S. public companies in the “Instrument Manufacturing” segment with revenues between $20,000,000 and $50,000,000$20 -- $50 million per year. The ERI survey included 90 public companies in the data set used to establish compensation statistics. This included companies that produced both medical devices and general electronic instruments, along with consumable supplies. The data was further adjusted for the geographic location of each NEO. The data from this analysis was used by the committeeCompensation Committee as one factor in determining compensation levels for base salary and total compensation.
Determination of Target Compensation
For fiscal 2013, the committeeyear ended March 31, 2015, the Compensation Committee determined that an appropriate starting point for total compensation of the Company’sour NEOs iswas approximately between the 50thand 75th percentile level, compared to the data obtained from the Benchmarking study. However, the committeeERI survey. The Compensation Committee used not only the data from the Benchmarking study,ERI survey, but also considered individual and team executive performance, along with theour financial performance, of the Company, as criteria to establish target compensation levels for each NEO. From that analysis, and in consideration of Mesa’sour past and future expected financial performance, along with each individual’s performance, the committeeCompensation Committee made adjustments to base salaries and target total compensation levels for each NEO that were implemented effective June 1, 2012.2014.
Base Salary
Base Salary
For fiscal 2012, the base salaries established on June 1, 2011 for Dr. Sullivan, Mr. Peterson,NEOs are determined based upon job responsibilities, level of experience, individual performance and Mr. Adriance, were $270,000, $180,000, and $150,000, respectively. Mr. Tranmer was named an executive officer of the company in October, 2011 and his salary was adjusted to $150,000 at that time. Mr. Tranmer resigned as an executive officer of the Company effective July 9, 2012.
The base salary for each NEO was comparedcomparisons to the previously established target compensation levels, andsalaries of executives in some cases, adjustments were warranted. Starting June 1, 2012, base salaries were established for Dr. Sullivan, Mr. Peterson, and Mr. Adriance of $295,000, $180,000, and $190,000, respectively.
similar positions from the ERI survey.
Short-TermShort-term Incentive Plan
Each NEO participates in Mesa’s short-term incentive plan.our Short-term Incentive Plan. The committeeCompensation Committee believes that it is in the best interest of our shareholders to have a substantial component of total compensation “at-risk” and dependent upon Companyour financial performance. For the purpose of the incentive plan,Short-term Incentive Plan, performance is measured by two variables: salesrevenues growth and profit growth. These variables are considered by the committeeCompensation Committee to be a reliable indicatorindicators for the creation of long-term shareholder value. Bonus payouts under the incentive planShort-term Incentive Plan are tied directly to achievement of these salesrevenues and profit growth targets for the fiscal year. If both the salesrevenues and profit growth targets are exceeded by a substantial margin, the maximum bonus payments are set at between 50% and 85%91% of the base salary for the various NEOs. Of course, if the Company’sour financial performance is poor, bonus payments could be at or near $0. The committeeCompensation Committee reserves the right to adjust payments under the incentive plan,Short-term Incentive Plan, in the case of unusual circumstances or events, concerning the Company or economic conditions in general.
We aredo not disclosingdisclose the specific target salesrevenues and profit growth targets set forth in the incentive plan becauseShort-term Incentive Plan as we believe that the disclosure thereof would cause us competitive harm. Because we are not disclosing these target objectives, we are stating our assessment of how likely it will be for these targets to be achieved by our NEOs. Although achievement of our target objectives involves future performance and, therefore, is subject to uncertainties, the Compensation Committee believes it has established target objectives that are achievable with an appropriate amount of dedication and hard work and, therefore, it is more likely than not that each NEO will earn a bonus under the incentive plan.Short-term Incentive Plan.
According to achievement of sales and profit growth, Dr. Sullivan, Mr. Peterson, Mr. Adriance, and Mr. Tranmer were awarded incentive plan payments of $180,000, $70,000, $84,000, and $60,000, respectively, for fiscal 2012.
For fiscal 2013 potential maximum incentive plan payments for Dr. Sullivan, Mr. Peterson, and Mr. Adriance are $250,000 (85% of base salary), $100,000 (56% of base salary), and $140,000 (74% of base salary), respectively.
Long-TermLong-term Incentive (Stock Options)Plan
The Compensation Committee believes that it is in the best interest of the Company’sour shareholders to provide incentives for Company stocklong-term incentive to each NEO with ownership by each NEO.of our stock. Stock ownership by our NEOs directly ties their long termlong-term compensation to the performance of the Company’sour share price. To achieve this goal, the Company makeswe make stock option grants to each NEO at the time of hire and on an annual basis under Mesa’s Stock Compensation Plan.our stock compensation plan. These grants are either Incentive Stock Options (ISO)incentive stock options and/or non-qualified stock options with a term of five years or Non-Qualified Stock Options (NQSO) with a term of 10eight years. In either case, theThe grant price is set at 100% of the market price on the day of the grant and the option vestsoptions vest ratably over seven years. The awards may or may not have performance conditions associated with the vesting of the stock options. The number of stock options awarded is at 25% per year for the first 4 years.discretion of the Compensation Committee.
During fiscal 2012, Dr. Sullivan, Mr. Peterson, Mr. Adriance, and Mr. Tranmer were awarded 8,800, 4,400, 4,400, and 4,400 shares under options, respectively.
For fiscal 2013, Dr. Sullivan, Mr. Peterson, and Mr. Adriance have been awarded 8,000, 4,000 and 4,000 shares under options, respectively.
Other BenefitsBenefits
Our philosophy is to provide only those other benefits to our named executives that are consistent with those generally offered to all of theour other employees of the Company.employees. As such, the NEOs have available various health, welfare and retirement (401(k)) benefits.
Employment and Change-in-Control Agreements
During fiscal 2012, the Company entered into changeAgreements.We have provided certain of control severance agreementsour NEOs with Dr. Sullivan, Mr. Peterson, Mr. Adriance, and Mr. Tranmer.salary continuation agreements. Severance payments will be made 1) in the event of aan involuntary separation of service without cause or a voluntary separation of service with good reason or 2) immediately prior to, or within 24 months after, a change in control for an involuntary termination without cause or a voluntary termination for good reason. Severance payments will be paid monthly for 12 months or 24 months, to include the individual’s then current monthly salary, and the same percentage of Company-paid health and life insurance benefits.
Additionally, all outstanding unvested stock options, restricted stock, performance shares and stock appreciation rights previously granted will immediately vest, with a three month exercise period.
Nonqualified Deferred Compensation
The Company did not offer a nonqualified deferred compensation plan in fiscal 2012.
Executive Officers of the Registrant
The names, addresses, ages and dates of appointment of the executive officers of the Company are:
Name and Address |
| Age |
| Office |
| Date Appointed |
|
|
|
|
|
|
|
John. J. Sullivan, Ph.D. 12100 West Sixth Avenue Lakewood, Colorado |
| 59 |
| Chief Executive Officer, President, Treasurer and Director |
| 2004 |
|
|
|
|
|
|
|
Steven W. Peterson 12100 West Sixth Avenue Lakewood, Colorado |
| 56 |
| Vice President-Finance, Chief Financial and Chief Accounting Officer and Secretary |
| 1990 |
|
|
|
|
|
|
|
Glenn E. Adriance 12100 West Sixth Avenue Lakewood, Colorado |
| 58 |
| Executive Vice President — Sales and Marketing |
| 2007 |
|
|
|
|
|
|
|
Michael L. Tranmer 12100 West Sixth Avenue Lakewood, Colorado |
| 51 |
| Executive Vice President — Biological Indicator Operations (resigned effective July 9, 2012) |
| 2011 |
John J. Sullivan, Ph.D., Chief Executive Officer, President, Treasurer and Director
Dr. Sullivan received his Bachelor of Science degree in Biology from Western Washington University in 1976 and a Ph.D. degree in Food Science from the University of Washington in 1982. From 1976 until 1980, Dr. Sullivan was employed as an Analytical Chemist at BioMed Research Labs (an independent research and testing laboratory). In 1982, Dr. Sullivan joined the U.S. Food and Drug Administration’s Seattle District Laboratory as a Senior Research Scientist and worked there until 1988. In 1988, Dr. Sullivan joined Varian, Inc. (a major analytical instrument manufacturer) and served in various capacities in Research and Development, Sales and Marketing Management and in Business Development until 2004. Dr. Sullivan joined the Company in October 2004 in the role of Vice President of Sales and Marketing and was promoted to the positions of President and Chief Operating Officer in 2006. In March 2009, Dr. Sullivan was promoted to the positions of Chief Executive Officer and President and appointed to the Board of Directors
Steven W. Peterson, Vice President-Finance, Chief Financial and Chief Accounting Officer and Secretary
Mr. Peterson received his Bachelor of Arts degree in accounting from Lewis University in 1979. He was employed as an accountant and senior accountant by Valleylab, Inc. (a manufacturer of electrosurgical and IV infusion equipment) from 1980 to 1983. From 1983 to 1985, he was employed as assistant controller by Marquest Medical Products, Inc. (a manufacturer of disposable medical products). Mr. Peterson joined the Company in February 1985 as Controller and has served as an executive officer of the Company since June 1990.
Glenn E. Adriance, Executive Vice President — Sales and Marketing
Mr. Adriance received his Bachelor of Science degree in Forestry from the University of Massachusetts in 1978 and his MBA from Colorado State University in 1981. From 1981 to 1983, he was employed at Sandia National Laboratories as a senior Business Systems Analyst responsible for various business systems that were fundamental to Sandia’s operations. From 1983 until 2000, he held various sales and marketing roles of increasing responsibility at IBM. He went on to join two other software firms, Lakeview Technology and Scientific Technologies Corporation as Global Business Partner Director and VP/COO/Executive Officer, respectively. Mr. Adriance joined Mesa Laboratories in October 2007.
Michael L. Tranmer, Executive Vice President — Biological Indicator Operations
Mr. Tranmer received his Bachelor of Science degree in Animal Science in 1984 and his Masters of Science in Veterinary Science in 1986 from the University of Nebraska at Lincoln, Nebraska. Mr. Tranmer was employed by Harkers, Inc. as a Quality Control Supervisor from 1986 to 1988. He worked for Smithkline Beecham from 1988 to 1993 as a Research Scientist and Operations Supervisor. Mr. Tranmer was employed by Pfizer, Inc. from 1993 until 2009 and held management and senior management positions in biological and pharmaceutical operations. From 2009 to 2010 he was the Vice President of Operations at American Title, Inc. Mr. Tranmer joined Mesa Laboratories in October of 2011. He resigned as Executive Vice President — Biological Indicators Operations effective July 9, 2012.
EXECUTIVE COMPENSATION
The following table lists, for the year ended March 31, compensation awarded to or earned by the named executive officers in fiscal years 2012, 2011, and 2010. We had no other executive officers of the Company whose compensation exceeded $100,000 during fiscal 2012.
SUMMARY COMPENSATION TABLE
Name and Principal Position |
| Year |
| Salary |
| Bonus |
| Stock |
| Option |
| Non-equity |
| Change in |
| All Other |
| Total |
|
(a) |
| (b) |
| (c) |
| (d) |
| (e) |
| (f) |
| (g) |
| (h) |
| (i) |
| (j) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John J. Sullivan, Ph.D. |
| 2012 |
| 265,488 |
| — |
| — |
| 110,782 |
| 180,000 |
| — |
| 8,220 |
| 564,490 |
|
CEO and President |
| 2011 |
| 237,611 |
| — |
| — |
| 76,549 |
| 182,000 |
| — |
| 7,204 |
| 503,364 |
|
|
| 2010 |
| 208,744 |
| — |
| — |
| 70,036 |
| 70,649 |
| — |
| 5,783 |
| 355,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven W. Peterson |
| 2012 |
| 175,321 |
| — |
| — |
| 36,343 |
| 70,000 |
| — |
| 5,440 |
| 287,104 |
|
Chief Financial Officer |
| 2011 |
| 146,611 |
| — |
| — |
| 16,031 |
| 114,000 |
| — |
| 4,765 |
| 281,407 |
|
|
| 2010 |
| 120,149 |
| — |
| — |
| 10,095 |
| 47,294 |
| — |
| 4,691 |
| 182,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glenn E. Adriance |
| 2012 |
| 147,493 |
| — |
| — |
| 36,343 |
| 84,000 |
| — |
| 4,583 |
| 272,419 |
|
E.V.P. Sales and Marketing |
| 2011 |
| 131,917 |
| — |
| — |
| 19,221 |
| 100,000 |
| — |
| 5,118 |
| 256,256 |
|
|
| 2010 |
| 116,137 |
| — |
| — |
| 12,980 |
| 37,316 |
| — |
| 4,692 |
| 171,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael L. Tranmer |
| 2012 |
| 146,185 |
| — |
| — |
| 36,815 |
| 60,000 |
| — |
| 4,386 |
| 247,386 |
|
E.V.P. Operations |
| 2011 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
|
| 2010 |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
(1)This column represents bonus compensation. Bonus amounts are included for the year in which the bonus was earned, not when it was paid.
(2)This column reflects the stock-based compensation expense recognized during the fiscal year for each named executive officer for financial statement reporting purposes with respect to the fiscal years ended March 31, 2012, 2011, and 2010, in accordance with FASB ASC Topic 718. We refer you to Note 9 in our financial statements for the fiscal year ended March 31, 2012, for a discussion of the assumptions made in calculating the dollar amount with respect to the fiscal years ended March 31, 2012 and 2011. None of the option awards is subject to performance conditions.
(3)This column represents 401(k) matching funds.
Grants of Plan-Based Awards
Name |
| Grant Date |
| All Other |
| All Other |
| Exercise or |
| Grant Date |
|
(a) |
| (b) |
| (c) |
| (d) |
| (e) |
| (f) |
|
|
|
|
|
|
|
|
|
|
|
|
|
John J. Sullivan, Ph.D. |
| 4/6/2011 |
| — |
| 8,800 |
| 29.20 |
| 87,208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven W. Peterson |
| 4/6/2011 |
| — |
| 4,400 |
| 29.20 |
| 43,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Glenn E. Adriance |
| 4/6/2011 |
| — |
| 4,400 |
| 29.20 |
| 43,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael L. Tranmer |
| 4/6/2011 |
| — |
| 4,400 |
| 29.20 |
| 43,604 |
|
(1)Amounts in this column represent stock options granted to the executives during fiscal 2012 on April 6, 2011.
(2)This column shows the fair value of options granted during April 2011. The grants were valued at $9.91 per share under FAS 123(R).
Narrative to Summary Compensation Table and Plan-Based Awards Table
Employment Agreements
None.
Compensation Plans
·Participation in Compensation Plans . Each NEO is eligible to participate in the following plans:
·Executive Compensation Plan. Pursuant to this plan, each NEO has the opportunity to earn an annual bonus based on performance measures and annual incentive plan goals, which are established by the Compensation Committee. The opportunity to earn a bonus under the Executive Compensation Plan is expressed as dollar amounts to be paid for certain levels of net sales and income performance and is set each year for each NEO separately. For fiscal 2011 and 2012, the maximum percentages of base salary for the executive officers ranges from approximately 0% to 75%, with a target cash bonus set at 50% to 75% of base salary.
·Stock Option Grants. Upon starting employment, the NEOs received grants of options. Each year, each NEO will receive an option grant to purchase shares of common stock based on the discretion of the Compensation Committee. These option grants vest over a four-year period based on continued service.
·Other Plans. The NEOs and, to the extent applicable, the NEOs’ families, dependents, and beneficiaries may participate in the benefit or similar plans, policies, or programs provided to similarly situated employees under our standard employment practices as in effect from time to time.
·Termination and Change-in-Control Payments. Employment with Mesa Laboratories, Inc. provides for the following termination payments:
·Upon termination for any reason whatsoever, an NEO (or in case of death, his estate) is entitled to all salary and expense reimbursements due through the date of such termination and such benefits as are available pursuant to the terms of any benefit or similar plans, policies, or programs in which he was participating at the time of such termination.
·Severance payments will be made in the event of a separation of service 24 months after a change in control for an involuntary termination without cause or a voluntary termination for good reason. Severance payments will be paid monthly for 24 months,respectively, to include the individual’s then current monthly salary, and the same percentage of Company-paid health and life insurance benefits. Additionally, all outstanding unvested stock options, restricted stock, performance shares and stock appreciation rights previouslyany other equity-based awards that may be granted in the future, will vest immediately vest, with a three monththe exercise period.period extended to the full term of the option (in case 1 above, the acceleration is subject to discretion of the Board of Directors).
16Nonqualified Deferred Compensation. We do not have any nonqualified defined contribution or deferred compensation plans.
Exercises, Stock Vesting, and Holdings of Previously Awarded EquityPost-Employment Compensation. We do not have any defined benefit plans, supplemental executive retirement plans or actuarial plans.
EXECUTIVE COMPENSATION
Named Executive Officers
The Securities and Exchange Commission (“SEC”), in Item 402 of Regulation S-K defines NEOs to include: a) all individuals serving as the registrant’s principal executive officer (“PEO”); b) all individuals serving as the registrant’s principal financial officer (“PFO”); c) the registrant’s three most highly compensated executive officers other than the PEO and PFO; and d) up to two individuals for whom disclosure would have been provided but for the fact the individual was not serving as an executive officer at the end of the last completed fiscal year. Bryan Leo and Garrett Krushefski are not executive officers of the Company, but are included in the disclosures below as NEOs in accordance with SEC regulations. Steven W. Peterson served as PFO until leaving the Company effective November 30, 2012.
Summary Compensation Table
The following table lists compensation awarded to or earned by our NEOs for the years ended March 31, 2015, 2014 and 2013.
Name and Principal Position | Year | Salary | Option Awards(2) | Non-equity Incentive Plan Compensation(1) | All Other Compensation(3) | Total | |||||||||||||||
(a) | (b) | (c) | (f) | (g) | (i) | (j) | |||||||||||||||
John J. Sullivan, Ph.D. | 2015 | $ | 316,488 | $ | 114,823 | $ | 287,000 | $ | 9,495 | $ | 727,806 | ||||||||||
| CEO and President | 2014 | 302,495 | 96,702 | 253,000 | 9,075 | 661,272 | |||||||||||||||
| 2013 | 290,819 | 125,317 | 200,000 | 8,725 | 624,861 | ||||||||||||||||
John V. Sakys | 2015 | 214,335 | 56,347 | 119,000 | 6,430 | 396,112 | |||||||||||||||
| Chief Financial Officer | 2014 | 204,997 | 28,485 | 113,000 | 6,150 | 352,632 | |||||||||||||||
| effective December 1, 2012 | 2013 | 83,836 | 10,076 | 70,000 | -- | 163,912 | |||||||||||||||
Glenn E. Adriance | 2015 | 212,664 | 55,723 | 183,600 | 6,380 | 458,367 | |||||||||||||||
| Chief Sales and Marketing Officer | 2014 | 194,999 | 34,313 | 147,000 | 5,850 | 382,162 | |||||||||||||||
| 2013 | 183,322 | 33,396 | 90,000 | 5,500 | 312,218 | ||||||||||||||||
Bryan T. Leo | 2015 | 160,000 | 30,543 | 80,000 | 4,800 | 275,343 | |||||||||||||||
Senior Vice President of Operations | 2014 | 145,000 | 18,220 | 52,500 | 4,350 | 220,070 | |||||||||||||||
| 2013 | 117,123 | 13,057 | 49,313 | 3,514 | 183,007 | ||||||||||||||||
Garrett Krushefski | 2015 | 160,000 | 22,578 | 80,000 | 4,800 | 267,378 | |||||||||||||||
| Senior Vice President of Operations | 2014 | 150,000 | 13,736 | 54,091 | 4,500 | 222,327 | |||||||||||||||
| 2013 | -- | -- | -- | -- | -- | ||||||||||||||||
Steven W. Peterson | 2015 | -- | -- | -- | -- | -- | |||||||||||||||
| Chief Financial Officer through | 2014 | -- | -- | -- | -- | -- | |||||||||||||||
| November 30, 2012 | 2013 | 120,329 | 269,995 | -- | 188,610 | 578,934 | |||||||||||||||
(1) | This column represents compensation to NEOs under our Short-term Incentive Plan. These amounts are included for the year earned, not when paid. |
(2) | This column reflects the stock-based compensation expense recognized during the year for each NEO for consolidated financial statement reporting purposes with respect to the years ended March 31, 2015, 2014 and 2013. We calculated these amounts in accordance with the provisions of Accounting Standards Codification (“ASC”) Section 718 –Compensation – Stock Compensation, using the Black-Scholes option-pricing model. Effective November 30, 2012, as part of the negotiated separation agreement with Steven W. Peterson, 14,400 unvested options were modified to a) extend the expiration date to 10 years following the original grant date, b) allow them to be exercised through their expiration date, and c) accelerate the vesting such that all options will vest by November 30, 2014. This was a modification of the terms of an equity award and, accordingly, we treated this as an exchange of the original award for a new award. We recorded incremental compensation expense of approximately $240,000 for the year ended March 31, 2013. |
(3) | This column represents 401(k) matching funds. For Steven W. Peterson, it also includes a separation payment equivalent to one year of salary, recognized fully in our consolidated statement of income for the year ended March 31, 2013, but to be paid out over 12 months. |
Grant of Plan-based Awards
Estimated future payments under non-equity incentive plan awards(1) | All other option awards: Number of securities underlying options | Exercise or base price of option awards ($/Sh) | Grant date fair value of stock and option awards | ||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | |||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (j) | (k) | (l) | ||||||||||||||||||
John J. Sullivan, Ph.D. | 4/1/2014 | -- | -- | -- | 15,000 | $ | 89.70 | $ | 25.04 | ||||||||||||||||
5/1/2014 | $ | 14,350 | $ | 215,250 | $ | 287,000 | -- | -- | -- | ||||||||||||||||
John V. Sakys | 4/1/2014 | -- | -- | -- | 7,500 | 89.70 | 25.04 | ||||||||||||||||||
5/1/2014 | 5,950 | 89,250 | 119,000 | -- | -- | -- | |||||||||||||||||||
Glenn E. Adriance | 4/1/2014 | -- | -- | -- | 7,500 | 89.70 | 25.04 | ||||||||||||||||||
5/1/2014 | 11,124 | 137,700 | 183,600 | -- | -- | -- | |||||||||||||||||||
Bryan T. Leo | 4/1/2014 | -- | -- | -- | 3,000 | 89.70 | 25.04 | ||||||||||||||||||
5/1/2014 | 8,960 | 60,000 | 80,000 | -- | -- | -- | |||||||||||||||||||
Garrett Krushefski | 4/1/2014 | -- | -- | -- | 3,000 | 89.70 | 25.04 | ||||||||||||||||||
5/1/2014 | 8,960 | 60,000 | 80,000 | -- | -- | -- | |||||||||||||||||||
(1) | This section represents compensation to NEOs under our Short-term Incentive Plan. These amounts are included for the year earned, not when paid. These awards are based on various combinations of total revenues and profit growth. |
Outstanding Equity Awards at Fiscal Year-End 2012March 31, 201
5
|
| OPTION AWARDS |
| STOCK AWARDS |
| |||||||||||||||
Name |
| Number of |
| Number of |
| Equity |
| Option |
| Option |
| Number of |
| Market |
| Equity |
| Equity |
| |
(a) |
| (b) |
| (c) |
| (d) |
| (e) |
| (f) |
| (g) |
| (h) |
| (i) |
| (j) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
John Sullivan |
| 3,225 |
| 1,075 |
| — |
| $ | 21.93 |
| 4/1/2013 |
| — |
| — |
| — |
| — |
|
CEO & President |
| 3,000 |
| 3,000 |
| — |
| 16.60 |
| 4/1/2014 |
| — |
| — |
| — |
| — |
| |
|
| 975 |
| 2,925 |
| — |
| 25.56 |
| 4/1/2015 |
| — |
| — |
| — |
| — |
| |
|
| 22,500 |
| 7,500 |
| — |
| 15.44 |
| 3/20/2016 |
| — |
| — |
| — |
| — |
| |
|
| 16,000 |
| 24,000 |
| — |
| 18.98 |
| 5/11/2017 |
| — |
| — |
| — |
| — |
| |
|
| 825 |
| 275 |
| — |
| 21.93 |
| 4/1/2018 |
| — |
| — |
| — |
| — |
| |
|
| 1,000 |
| 1,000 |
| — |
| 16.60 |
| 4/1/2019 |
| — |
| — |
| — |
| — |
| |
|
| 1,525 |
| 4,575 |
| — |
| 25.56 |
| 4/1/2020 |
| — |
| — |
| — |
| — |
| |
|
| — |
| 8,800 |
| — |
| 29.20 |
| 4/6/2021 |
| — |
| — |
| — |
| — |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Steve W. Peterson |
| 2,025 |
| 675 |
| — |
| $ | 21.93 |
| 4/1/2013 |
| — |
| — |
| — |
| — |
|
Chief Financial Officer |
| 2,000 |
| 2,000 |
| — |
| 16.60 |
| 4/1/2014 |
| — |
| — |
| — |
| — |
| |
|
| 975 |
| 2,925 |
| — |
| 25.56 |
| 4/1/2015 |
| — |
| — |
| — |
| — |
| |
|
| 275 |
| 825 |
| — |
| 25.56 |
| 4/1/2020 |
| — |
| — |
| — |
| — |
| |
|
| — |
| 4,400 |
| — |
| 29.20 |
| 4/6/2021 |
| — |
| — |
| — |
| — |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Glenn E. Adriance |
| 1,200 |
| — |
| — |
| $ | 20.75 |
| 10/1/2012 |
|
|
|
|
|
|
|
|
|
E.V.P. Sales and Marketing |
| — |
| 675 |
| — |
| 21.93 |
| 4/1/2013 |
| — |
| — |
| — |
| — |
| |
|
| — |
| 2,000 |
| — |
| 16.60 |
| 4/1/2014 |
| — |
| — |
| — |
| — |
| |
|
| — |
| 2,925 |
| — |
| 25.56 |
| 4/1/2015 |
| — |
| — |
| — |
| — |
| |
|
| 800 |
| — |
| — |
| 20.75 |
| 10/1/2017 |
| — |
| — |
| — |
| — |
| |
|
| — |
| 825 |
| — |
| 25.56 |
| 4/1/2020 |
| — |
| — |
| — |
| — |
| |
|
| — |
| 4,400 |
| — |
| 29.20 |
| 4/6/2021 |
| — |
| — |
| — |
| — |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Michael L. Tranmer |
| 950 |
| 2,850 |
| — |
| $ | 25.75 |
| 11/8/2015 |
| — |
| — |
| — |
| — |
|
E.V.P. Operations |
| 1,050 |
| 3,150 |
| — |
| 25.75 |
| 11/8/2020 |
| — |
| — |
| — |
| — |
| |
|
| — |
| 4,400 |
| — |
| 29.20 |
| 4/6/2021 |
| — |
| — |
| — |
| — |
| |
Option Exercises for Fiscal Year 2012
Name |
| Number of |
| Value Realized |
| |
(a) |
| (b) |
| (c) |
| |
|
|
|
|
|
| |
John J. Sullivan, Ph.D. |
| 11,730 |
| $ | 457,724 |
|
|
|
|
|
|
| |
Steven W. Peterson |
| 3,000 |
| 94,530 |
| |
|
|
|
|
|
| |
Glenn E. Adriance |
| 11,275 |
| 107,010 |
| |
|
|
|
|
|
| |
Michael L. Tranmer |
| — |
| — |
| |
(1)Determined by multiplying the number of options that were exercised in fiscal 2012 by the difference between the per share closing price of the Company’s common stock on the date of exercise and the exercise price of the options, but not including any tax impact incurred in connection with such exercise.
Option Awards | |||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | |||||||||
(a) | (b) | (c) | (e) | (f) | |||||||||
John J. Sullivan Ph.D | 32,000 | -- | 18.98 | 5/11/2017 | |||||||||
| 1,100 | -- | 21.93 | 4/1/2018 | ||||||||||
| 2,000 | -- | 16.60 | 4/1/2019 | ||||||||||
| 6,100 | -- | 25.56 | 4/1/2020 | ||||||||||
| 6,600 | 2,200 | 29.20 | 4/6/2021 | ||||||||||
| 4,000 | 4,000 | 50.50 | 4/2/2022 | ||||||||||
| 1,900 | 5,700 | 51.85 | 4/1/2023 | ||||||||||
| -- | 15,000 | 89.70 | 4/1/2022 | ||||||||||
John V. Sakys | 4,000 | 4,000 | 48.72 | 10/29/2022 | |||||||||
| 950 | 2,850 | 51.85 | 4/1/2023 | ||||||||||
| -- | 7,500 | 89.70 | 4/1/2022 | ||||||||||
Glenn E. Adriance | 275 | -- | 25.56 | 4/1/2020 | |||||||||
| 1,100 | 1,100 | 29.20 | 4/6/2021 | ||||||||||
| 1,000 | 2,000 | 50.50 | 4/2/2022 | ||||||||||
| 950 | 2,850 | 51.85 | 4/1/2023 | ||||||||||
| -- | 7,500 | 89.70 | 4/1/2022 | ||||||||||
Bryan T. Leo | 475 | 950 | 50.32 | 4/23/2017 | |||||||||
| 775 | 1,550 | 50.32 | 4/23/2022 | ||||||||||
| 625 | 1,875 | 51.85 | 4/1/2023 | ||||||||||
| -- | 3,000 | 89.70 | 4/1/2022 | ||||||||||
Garrett Krushefski | 1,275 | 425 | 29.20 | 4/1/2016 | |||||||||
| 600 | 600 | 50.50 | 4/2/2017 | ||||||||||
| 625 | 1,875 | 51.85 | 4/1/2023 | ||||||||||
| -- | 3,000 | 89.70 | 4/1/2022 | ||||||||||
Post-Employment CompensationOptions Exercised During the Year Ended March 31, 2015
Name | Number of Shares Acquired upon Exercise (#) | Value Realized On Exercise(1) | ||||||
(a) | (b) | (c) | ||||||
John J. Sullivan, Ph.D. | 14,975 | $ | 576,188 | |||||
John V. Sakys | -- | -- | ||||||
Glenn E. Adriance | 975 | 49,735 | ||||||
Bryan T. Leo | -- | -- | ||||||
Garrett Krushefski | 700 | 35,140 | ||||||
The Company did not offer any pension benefits to its executive officers during fiscal 2012.
(1) | Determined by multiplying the number of options that were exercised during the year ended March 31, 2015 by the difference between the per share closing price of our common stock on the date of exercise and the exercise price of the options, but not including any tax impact incurred in connection with such exercise. |
Nonqualified Deferred Compensation
The Company did not offer a nonqualified deferred compensation plan in fiscal 2012.
Potential Payments upon Termination or Change-in-Control
Salary Continuation upon Termination(1) | Salary Continuation upon Change in Control(1) | Value of Equity Awards Received or to be Received(2) | ||||||||||
John J. Sullivan, Ph.D. | $ | 319,000 | $ | 638,000 | $ | 297,395 | ||||||
John V. Sakys | 216,000 | 432,000 | 151,918 | |||||||||
Glenn E. Adriance | 216,000 | 432,000 | 148,698 | |||||||||
As noted above, if an NEO’s employment is terminated on account
(1) | This amount is based on the NEO’s salary at March 31, 2015. |
(2) | The value of accelerating these unvested stock options was calculated by multiplying the number of |
Narrative to Summary Compensation Table and stock appreciation rights previously granted will immediately vest, with a three month exercise period.
|
| Salary |
| Value of Equity |
| ||
John J. Sullivan, Ph.D. |
| $ | 540,000 |
| $ | 1,505,372 |
|
Steven W. Peterson |
| 360,000 |
| 261,556 |
| ||
Glenn E. Adriance |
| 300,000 |
| 261,556 |
| ||
(1)This amount is based on the NEO’s salary at March 31, 2012.Plan-Based Awards Table
(2)The value of accelerating these unvested stock options was calculated by multiplying the number of shares underlying the NEO’s unvested stock options that were in-the-money at March 31, 2012 by the difference between the weighted average exercise price for options in-the-money at March 31, 2012,See “Compensation Discussion and our closing price per share on March 30, 2012.Analysis” above.
Disclosure of Director Compensation
|
| Fees |
| Stock |
| Option |
| Non-equity |
| Change in |
| All Other |
| Total |
|
Name |
| ($) |
| ($) |
| ($) |
| ($) |
| ($) |
| ($) |
| ($) |
|
(a) |
| (b) |
| (c) |
| (d) |
| (e) |
| (f) |
| (g) |
| (h) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael T. Brooks |
| 16,000 |
| — |
| 12,820 | (1) | — |
| — |
| — |
| 28,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
H. Stuart Campbell |
| 16,000 |
| — |
| 13,784 | (1) | — |
| — |
| — |
| 29,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert V. Dwyer |
| 16,000 |
| — |
| 13,784 | (1) | — |
| — |
| — |
| 29,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Evan C. Guillemin |
| 16,000 |
| — |
| 10,991 | (1) | — |
| — |
| — |
| 26,991 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Luke R. Schmieder |
| 16,000 |
| — |
| 12,820 | (1) | — |
| — |
| — |
| 28,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David M. Kelly |
| 16,000 |
| — |
| 7,869 | (1) | — |
| — |
| — |
| 23,869 |
|
(1) 1,000 options were granted on April 6, 2011. This column shows the expense recognized in the Company’s fiscal 2012 financial statements under GAAP for all unvested stock option awards to directors. These award fair values have been determined based on the assumptions set forth in the Company’s fiscal 2012 Financial Statements (Note 9, Stock Based Compensation).
Currently, all outside directors receive cash compensation of $4,000 per quarter or $16,000 annually. Currently, no additional compensation is received for Committee assignments or attendance at meetings.
Equity Compensation Plans
We have two equity compensation plans currently in effect, each of which has been approved by our shareholders. The following table provides information as of March 31, 2012, on these plans.
Plan Category |
| Number of |
| Weighted- |
| Number of securities |
| |
|
| (a) |
| (b) |
| (c) |
| |
1999 Incentive Compensation Plan |
| 53,775 |
| $ | 17.53 |
| — | (1) |
2006 Incentive Compensation Plan |
| 380,010 |
| $ | 23.51 |
| 389,075 |
|
|
| 433,785 |
| $ | 22.77 |
| 389,075 |
|
(1)The 1999 Incentive Compensation Plan has expired and no new awards may be issued under this Plan.
On October 21, 1999, the Company adopted a new stock compensation plan. The purpose of the plan is to encourage ownership of the Common Stock of the Company by certain officers, directors, employees and certain advisors of the Company in order to provide incentive to promote the success and business of the Company. A total of 300,000 shares of Common Stock have been reserved for issuance under the plan and are subject to terms as set by the Compensation Committee of the Board of Directors at the time of grant. On October 18, 2004, the shareholders approved an amendment to the plan to reserve an additional 200,000 shares of Common Stock for issuance under the plan.
On December 8, 2006, the Company adopted a new stock compensation plan. The purpose of the plan is to encourage ownership of the Common Stock of the Company by certain officers, directors, employees and certain advisors of the Company in order to provide incentive to promote the success and business of the Company. A total of 400,000 shares of Common Stock were reserved for issuance under the plan and are subject to terms as set by the Compensation Committee of the Board of Directors at the time of grant.
On June 22, 2010, the Board of Directors approved an amendment to the Company’s 2006 Stock Compensation Plan to increase the number of shares authorized for issuance under the 2006 Stock Compensation Plan from four hundred thousand (400,000) to eight hundred thousand (800,000), and the increase was subsequently approved by the majority of the Company’s shareholders at the annual meeting of shareholders held on September 23, 2010.
Retirement Plan
The Company adopted a 401(k) plan effective January 1, 2000. Participation is voluntary and employees are eligible to participate at age 21 and after six months of employment. The Company matches 50% of the employee’s contribution up to 6% of the employee’s salary. A participant vests in the Company’s contributions at a rate of 25% per year, fully vesting at the end of the participant’s fourth year of service. SGM Biotech, Inc. is currently operating on a separate 401(k) plan. That plan was adopted effective August 15, 1996. Participation is voluntary and employees are eligible to participate at age 21 and after one year of employment with the Company. SGM Biotech, Inc. matches 100% of the employee’s contribution up to 4% of the employee’s salary. A participant immediately vests in those contributions. SGM also offers a Roth Savings Plan which is incorporated into their 401(k) Plan with identical requirements and contributions.
Certain Relationships and Related Transactions, Employment Contracts, Termination of Employment Contracts and Change in Control Agreements
We are not aware of any transactions since the beginning of fiscal 2012 or any currently proposed transaction between us or our subsidiaries and any member of the Board of Directors, any of our executive officers, any security holder who is known to us to own of record or beneficially more than 5% of our common stock, or any member of the immediate family of any of the foregoing persons, in which the amount involved exceeds $120,000 and in which any of the foregoing persons had, or will have, a direct or indirect material interest. Except as otherwise noted and as applicable, we believe that each transaction described below is, or was, as the case may be, on terms at least as favorable to us as we would expect to negotiate with an unaffiliated party.
COMPENSATION COMMITTEE REPORT
The members of the Compensation Committee have analyzed and discussed with management the information contained above in the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. The Committee believes this information to be a full and accurate analysis of the Company’s compensation philosophy and recommended its inclusion by reference in the Company’s Form 10-K filing.
The foregoing report is given by the following members of the Compensation Committee:
The Compensation Committee
Michael T. Brooks
H. Stuart Campbell
Robert V. Dwyer
Evan C. Guillemin
David M. Kelly, Committee Chairman
Luke R.John B. Schmieder
PROPOSALITEM 2
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORSThe Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted in July 2010, and Section 14A of the Exchange Act require that we allow our shareholders the opportunity to vote to approve the compensation of our named executive officers as set forth in this Proxy Statement. The vote on this resolution is not intended to address any specific element of executive compensation. Instead, the vote relates to the executive compensation of our named executive officers, as set forth in this Proxy Statement pursuant to the rules of the Securities and Exchange Commission. This vote is advisory and not binding on our Company or our Board of Directors, but in the event of any significant vote against this proposal, the Compensation Committee will consider whether any actions are appropriate to respond to shareholder concerns.
The affirmative vote of a majority of the votes cast at the Annual Meeting for this proposal is required to approve this proposal.
We are asking our shareholders to approve, on an advisory basis, the compensation of our NEOs as disclosed in the Compensation Discussion and Analysis section and the Executive Compensation section.
We have designed our compensation programs to:
● | attract and retain high performing and experienced executives; |
● | motivate and reward executives whose knowledge, skills and performance are critical to our success; |
● | align the interests of our executives and shareholders by motivating executives to increase shareholder value; |
● | foster a shared commitment among executives by coordinating their goals; and |
● | motivate our executives to manage our business to meet our short and long-term objectives, and reward them for meeting these objectives. |
We urge shareholders to read the Compensation Discussion and Analysis section, which describes in more detail how our executive compensation policies and procedures are designed to achieve our compensation objectives, as well as the Executive Compensation section and related compensation tables and narrative, which provide detailed information on the compensation of our NEOs. The Compensation Committee and the Board of Directors believe that the policies and procedures articulated in the Compensation Discussion and Analysis are effective in achieving our goals and that the compensation of our NEOs reported in this Proxy Statement has supported and contributed to our success.
THE BOARD OF DIRECTORS RECOMMENDS TOA VOTE “FOR”
APPROVAL, ON AN ADVISORY BASIS, OF OUR SHAREHOLDERS THAT THEY VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF EHRHARDT KEEFE STEINER & HOTTMAN, PC EXECUTIVE COMPENSATION
AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING MARCH 31, 2013.DESCRIBED IN THIS PROXY STATEMENT.
ITEM3
Appointment of Independent Registered Public Accounting FirmRATIFICATION OFTHEAPPOINTMENT OFEKS&H LLLP AS INDEPENDENT AUDITORS
The Audit Committee of our Board has again selected Ehrhardt Keefe Steiner & Hottman, PCEKS&H LLLP to serve as our independent registered public accounting firm for the fiscal year ending March 31, 2013.2016. Although it is not required to do so, our Board of Directors wishes to submit the appointment of Ehrhardt Keefe Steiner & Hottman, PCEKS&H LLLP for shareholder ratification at the Annual Meeting. Even if the appointment is ratified by our shareholders, the Audit Committee may in its sole discretion change the appointment at any time during the year, if it determines that such a change would be in the best interests of our companyCompany and our shareholders. A representative of Ehrhardt Keefe Steiner & Hottman, PCEKS&H LLLP will be present at the Annual Meeting, will have an opportunity to make a statement if he so desires, and will be available to respond to appropriate questions. If the shareholders do not ratify the appointment of Ehrhardt Keefe Steiner & Hottman, PC,EKS&H LLLP, our Board of Directors will reconsider its selection.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Ehrhardt Keefe Steiner & Hottman, PC,EKS&H LLLP, Denver, Colorado, has conducted the audits of the Company’sour accounting records since 1986 and the Board of Directors expects to engageAudit Committee has selected the same firm to audit the Company’sour accounting records for the fiscal year ending March 31, 2013.2016.
AUDIT FEES
Ehrhardt Keefe Steiner & Hottman, PC’sThe following table presents fees for the Company’s 2012 and 2011 annual audits and reviews of the Company’s quarterly financial statements orprofessional services that are normally providedrendered by theEKS&H LLLP, our principal accountant, in connection with statutory or regulatory filings or engagements were $126,112 and $122,500, respectively.
AUDIT RELATED FEES
Ehrhardt Keefe Steiner & Hottman, PC fiscal 2011 fees were $98,114 for the audit of SGM Biotech, Inc., which was acquired April 27, 2010. The firm did not render any audit related services toour financial statements, and the Company in 2012.fees for other services:
Year ended March 31, | ||||||||||||
Type of Fees | 2015 | 2014 | 2013 | |||||||||
Annual audit and quarterly reviews | $ | 213,655 | $ | 185,274 | $ | 183,910 | ||||||
Audit-related fees – acquisitions | 10,000 | 15,645 | 117,127 | |||||||||
Tax fees | -- | -- | 25,625 | |||||||||
All other fees | 18,700 | 12,000 | 20,899 | |||||||||
Total | $ | 242,355 | $ | 212,919 | $ | 347,561 | ||||||
TAX FEESTHE BOARD OF DIRECTORS RECOMMENDS TO OUR SHAREHOLDERS THAT THEY VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF EKS&H LLLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING MARCH 31, 2016.
Ehrhardt Keefe Steiner & Hottman, PC’s fees for tax preparation services to the Company for 2012 and 2011 were $15,500 and $22,020, respectively.
ALL OTHER FEESAUDIT COMMITTEE REPORT
Ehrhardt Keefe Steiner & Hottman, PC’s fees for all other services to the Company for 2012 and 2011 were $81,492 and $20,598, respectively, related to income tax credits and due diligence for acquisitions.
The Audit Committee approved all services performed by Ehrhardt, Keefe, Steiner & Hottman, PC.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is composed of fivesix non-employee directors of the Company. All members are independent as defined under the NasdaqNASDAQ Listing Rules. The Audit Committee held eightfour meetings during fiscalthe year 2012.ended March 31, 2015. The Audit Committee operates under a written charter adopted by the Company’sour Board of Directors.
In connection with the March 31, 2012,2015, financial statements, the Audit Committee (1) reviewed and discussed the audited financial statements with management; (2) discussed with the independent auditors the matters required to be discussed by SAS 61; (3) received the written disclosures and the letter from the independent accountants required by Independence Standards Board Standard No. 1, and (4) discussed with the independent accountantaccountants their independence.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’sour Annual Report on Form 10-K for the fiscal year ended March 31, 2012,2015, for filing with the Securities and Exchange Commission.
AUDIT COMMITTEE
Michael T. Brooks
H. Stuart Campbell
Robert V. Dwyer
Evan C. Guillemin, Committee Chairman
David M. Kelly
Luke R.John B. Schmieder
PROPOSAL 3
TO APPROVE AN AMENDMENT TO THE COMPANY’S ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
FROM 8,000,000 TO 25,000,000
The Board of Directors has adopted, subject to Stockholder approval, an amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of Common Stock of the Company from 8,000,000 to 25,000,000. The Board adopted this change for the following reasons:
·Allow for future realignment of the existing equity structure through, for example, a stock split
·Provide sufficient equity resources to support our acquisition strategy
·Increase the number of shares which could be used for future options and other share-related compensation to retain and attract employees
The additional shares of Common Stock authorized by the amendment to the Company’s Articles of Incorporation may be issued at the direction of the Board of Directors from time to time for any proper corporate purpose, including, without limitation, in connection with stock splits, stock dividends, sales of our Common Stock, employee stock incentive plans, other stock ownership plans, acquisitions and to engage in other types of capital raises or strategic transactions.
We have no plans, proposals or arrangements, written or otherwise, at this time to issue any of the additional authorized shares.
The increase in the number of authorized shares has no impact on the Company’s current equity compensation plan, nor current options outstanding.
The holders of shares of Common Stock do not presently have preemptive rights to subscribe for any of the Company’s securities and holders of Common Stock will not have any such rights to subscribe for the additional Common Stock proposed to be authorized. The Company currently does not anticipate that it will seek authorization from stockholders for issuance of additional shares of Common Stock unless required by applicable laws or exchange rules.
The first sentence of “Article Four — Capital Stock” of our Articles of Incorporation is proposed to be amended to read as follows:
“The amount of authorized capital stock of this corporation is twenty five million (25,000,000) shares of common stock, each share having no par value, and one million (1,000,000) shares of preferred stock.”
Effectiveness of the Amendment to Our Certificate of Incorporation to Increase Our Authorized Number of Shares of Common Stock
If Proposal 3 is approved, the amendment of our Articles of Incorporation will become effective upon filing the Articles of Amendment with the Secretary of State of Colorado, which we intend to do promptly after approval at the Annual Meeting. Our Board of Directors reserves the right, notwithstanding stockholder approval of Proposal 3 and without further action by our stockholders, to elect not to proceed with filing the Articles of Amendment if, at any time prior to filing thereof, our Board of Directors, in its sole discretion, determines that it is no longer advisable or in the best interest of the Company. The Articles of Amendment are subject to revision for such changes as may be required by the Colorado Secretary of State and other changes consistent with this proposal that we may deem necessary or appropriate.
Required Vote
We are asking you to approve the Amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of Common Stock by 17,000,000 shares, to 25,000,000 shares from 8,000,000 shares. This approval will require the affirmative vote of a majority of the shares of our common stock outstanding.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS TO OUR SHAREHOLDERS THAT THEY VOTE “FOR” THE APPROVAL AND ADOPTION OF THE FOREGOING AMENDMENT TO THE COMPANY’S ARTICLES OF INCORPORATION.
PROPOSALS OF SHAREHOLDER FOR PRESENTATION
AT NEXT ANNUAL MEETING FOR SHAREHOLDERS
Any shareholder of record of the Company who desires to submit a proper proposal for inclusion in the proxy materials relating to the next2016 Annual Meeting of Shareholders must do so in writing and it must be received at the Company’sour principal executive offices by the end of the fiscal year ending March 31, 2013.2016. The proponent must be a record or beneficial owner entitled to vote at the next Annual Meeting on his proposal and must continue to own such security entitling him to vote through the date on which the meeting is held.
ANNUAL REPORT
The Annual Report to Shareholders concerning the operations of the Company during the fiscal year ended March 31, 2012,2015, including audited consolidated financial statements for the year then ended, has been distributed to all record holders as ofand our Annual Report on Form 10-K for the record date.year ended March 31, 2015 are available on our website at www.mesalabs.com. The Annual Report to Shareholders is not incorporated in thethis Proxy Statement and is not to be considered a part of the soliciting material.
OTHER BUSINESS
Management of the CompanyOur management is not aware of any other matters which are to be presented at the meeting, nor has it been advised that other persons will present any such matters. However, if other matters properly come before the meeting, the individual named in the accompanying proxy shall vote on such matters in accordance with his best judgment.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
UPON WRITTEN REQUEST, THE COMPANYWE WILL PROVIDE, WITHOUT CHARGE, A COPY OF ITSOUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31, 2012,2015, TO EACH SHAREHOLDER OF RECORD OR TO EACH SHAREHOLDER WHO OWNED OUR COMMON STOCK OF THE COMPANY LISTED IN THE NAME OF A BANK OR BROKER, AS NOMINEE, AT THE CLOSE OF BUSINESS ON JULY 25, 2012.31, 2015. ANY REQUEST BY A SHAREHOLDER FOR THE COMPANY’SOUR ANNUAL REPORT ON FORM 10-K SHOULD BE MAILED TO THE COMPANY’SOUR SECRETARY, MESA LABORATORIES, INC., 12100 WEST SIXTH AVENUE, LAKEWOOD, COLORADO 80228.
The above noticeNotice and Proxy Statement are sent by order of the Board of Directors.
/s/ John J. Sullivan
John J. Sullivan, Ph.D. |
|
| |
| Chief Executive Officer |
|
|
August 10, 2012
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
MESA LABORATORIES, INC.
TO BE HELD FRIDAY,THURSDAY, SEPTEMBER 14, 201224, 2015
The undersigned hereby appoints Luke R. SchmiederH. Stuart Campbell as the lawful agent and Proxy of the undersigned (with all powers the undersigned would possess if personally present, including full power of substitution), and hereby authorizes him to represent and to vote, as designated below, all the shares of Common Stock of Mesa Laboratories, Inc. held of record by the undersigned as of the close of business on July 25, 2012,31, 2015, at the Annual Meeting of Shareholders to be held on Friday,Thursday, September 14, 2012,24, 2015, or any adjournment or postponement thereof.
1.ELECTION OF DIRECTORS
| FOR all nominees listed below |
| WITHHOLD AUTHORITY | |
(except as marked to the contrary below) | (to vote for all nominees listed below) |
L.R. Schmieder, H.S. Campbell, M. Brooks, R.V. Dwyer, E. Guillemin, J. Sullivan, D.M.
M. Brooks | H. Campbell | R. Dwyer | E. Guillemin | D. Kelly | J. Schmieder | J. Sullivan |
(INSTRUCTION: To withhold authority to vote for any nominees, write the nominees’ names on the space provided below.)
2. To approve, on an advisory basis, the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis section and the Executive Compensation section of our Proxy Statement.
| ☐ | FOR | ☐ | AGAINST | ☐ | ABSTAIN |
3. To ratify the appointment of Ehrhardt, Keefe, Steiner & Hottman, PC (EKS&H)EKS&H LLLP (“EKS&H”) as the Company’s independent registered public accounting firm for fiscal 2013the year ending March 31, 2016 (the “Ratification of Auditors Proposal”).
| ☐ | FOR | ☐ |
|
|
|
3.To approve an amendment to the Company’s Articles of Incorporation to increase the number of authorized shares of common stock from 8,000,000 to 25,000,000 (the “Amendment of the Articles of Incorporation Proposal”).
|
|
|
4.In his or her discretion, the Proxy is authorized to vote upon any matters which may properly come before the meeting, or any adjournment or postponement thereof.
It is understood that when properly executed, this proxy will be voted in the manner directed herein by the undersigned shareholder. WHERE NO CHOICE IS SPECIFIED BY THE SHAREHOLDER, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS PROPOSED IN ITEM (1), FOR APPROVAL OF EXECUTIVE COMPENSATION PROPOSED IN ITEM (2); AND FOR RATIFICATION OF THE APPOINTMENT OF EKS&H PROPOSED IN ITEM (2), AND TO APPROVE AN AMENDEMENT TO THE COMPANY’S ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED COMMON STOCK SHARES.(3).
The undersigned hereby revokes all previous proxies relating to the shares covered hereby and confirms all that said proxy or his substitutes may do by virtue hereof.
Please sign exactly as name appears below. When shares are held joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person.
Dated: | ____________________ |
| |
| Signature | ||
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Signature if held jointly | |||
PLEASE MARK, SIGN, DATE AND RETURN | |||
| THE PROXY CARD PROMPTLY USING THE | |||
| ENCLOSED ENVELOPE | |||
| ☐ | PLEASE CHECK THIS BOX IF YOU INTEND TO BE PRESENT AT THE MEETING |
oPLEASE CHECK THIS BOX IF YOU INTEND TO BE PRESENT AT THE MEETING
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