UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 ☐
☐ | 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) |
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MESA LABORATORIES, INC.
12100 West Sixth Avenue
Lakewood, Colorado 80228
Telephone: (303) 987-8000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Tuesday, November 5, 2019Friday, August 28, 2020
TO THE SHAREHOLDERS OF MESA LABORATORIES, INC.:
TheWe invite you to the Annual Meeting of Shareholders (“Annual Meeting”) of Mesa Laboratories, Inc. (“we”, “our”, the “Company”, or “Mesa”“Mesa Labs”) will be held on Friday, August 28, 2020 at 10:00 a.m. Mountain Time at our corporate officesheadquarters at 12100 West Sixth Avenue, Lakewood, Colorado 80228,80228.
Shareholders will consider and act on Tuesday, November 5th, 2019 at 9:00 a.m. MDT, for the following purposes:matters:
| 1. | To elect the eight | |
2. | To |
3. | To ratify the appointment of Plante & Moran, PLLC as our independent registered public accounting firm for the year ending March 31, |
4. | To transact such other business as may properly come before the meeting or any |
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. Only holders of record of our Common Stockcommon stock on September 13, 2019July 7, 2020 (the “Record Date”), will be entitled to notice of and to vote at this Annual Meeting, and any postponements or adjournments thereof.
Please vote your shares by signing and returning your proxy card, using telephone or internet voting, or at the Annual 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 proxy.
By Order of the Board of Directors
/s/ Gary M. Owens
| Gary M. Owens | |
Chief Executive Officer
The Mesa Laboratories, Inc. Proxy Statement, Proxy Card and Annual Report on Form 10-K for the year ended March 31, 20192020 are available to view on the internet at: www.edocumentview.com/MLAB or www.mesalabs.com.
MESA LABORATORIES, INC.
12100 West Sixth Avenue
Lakewood, Colorado 80228Table of Contents
PROXY STATEMENTTable of Contents
| Notice of Annual Meeting of Shareholders | i |
| Annual Meeting Information | 1 |
| Voting Securities | 2 |
| Questions and Answers about this Proxy Statement | 2 |
| Beneficial Ownership of Equity Securities of the Company | 4 |
| Section 16(A) Beneficial Ownership Reporting Compliance | 4 |
| Item 1. Election of Directors | 5 |
| Nominees for Director | 5 |
| Corporate Governance Matters and Committee of the Board | 8 |
| Director Compensation | 13 |
| Executive Officers and Compensation | 14 |
| Compensation Committee Report | 24 |
| Item 2. Advisory Vote to Approve Executive Compensation | 25 |
| Item 3. Ratification of the Appointment of Plante & Moran, PLLC as Independent Auditors | 26 |
| Audit Committee Report | 27 |
| Proposals of Shareholders | 27 |
| Annual Report | 27 |
| Other Business | 27 |
| Proxy for the Annual Meeting of Shareholders | 29 |
Annual Meeting Information
ANNUAL MEETING OF SHAREHOLDERS
To Be Held Tuesday, November 5, 2019Friday, August 28, 2020 at 10:00 a.m. Mountain Time
Solicitation of Proxy
The accompanying proxy is solicited on behalf of the Board of Directors of Mesa Laboratories, Inc. (“we”, “our”, the “Company”, or “Mesa”“Mesa Labs”) for use atduring the Annual Meeting of Shareholders (“Annual Meeting”) of Mesa Laboratories, Inc. to be held on Tuesday, November 5, 2019,Friday, August 28, 2020 at 9:10:00 a.m. MDTMountain Time and at any adjournment. In addition to the use of the mails, proxies may be solicited on the Company’s behalf by personal interviewour Directors and employees by mail, telephone, email or telephone by officers, directors and other employees of the Company, who will not receive additional compensation for such services.in person. We 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. We 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 September 25, 2019.July 17, 2020.
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 at or prior to the meeting, by timely 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 items described in this Proxy Statement and in accordance with histhe manner recommended by the Board on all matters presented in this Proxy Statement and as they may determine in their best judgment on allwith respect to any other matters that may properly come beforepresented for a vote at the meeting.Annual 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.
Meeting format
We currently intend to hold the Annual Meeting in person. However, we are sensitive to concerns related to public health and travel and are monitoring restrictions imposed by federal, state and local governments in light of the continuously evolving COVID-19 pandemic. If, as a result of such concerns, we deem it necessary to hold the Annual Meeting solely by means of remote communication (i.e., a virtual-only meeting), we will announce this decision in advance, and details will be posted on our Investor Relations website at www.mesalabs.com/investor-relations and filed as additional proxy soliciting material with the Securities and Exchange Commission.
Attending the annual meeting
To attend the annual meeting, you must be a shareholder on the close of business on the record date of July 7, 2020. We request that all shareholders planning to attend the Annual Meeting in person contact our Investor Relations Department at investorrelations@mesalabs.com by no later than August 26, 2020 to let us know that you will be attending the Annual Meeting. Attendees will be required to adhere to physical distancing and other requirements consistent with orders of the public health authorities. Please note that the use of cameras and other recording devices will not be allowed at the annual meeting.
Who can vote
If you were a shareholder of record of our common stock on July 7, 2020, you are entitled to vote in advance of the annual meeting using the 16-digit control number that appears on the Notice of Internet Availability of Proxy Materials, proxy card, or the instructions that accompanied the proxy materials. On each matter to be voted on, you may cast one vote for each share of common stock you hold. As of July 7, 2020, there were 5,102,995 shares of common stock outstanding and entitled to vote, including 600,000 shares issued in conjunction with an offering of our common stock on June 12, 2020 and 90,000 shares issued in conjunction with the full exercise of the underwriters' option to purchase additional shares on June 16, 2020.
Purpose of the 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 the eight |
2. | To |
3. | To ratify the appointment of Plante & Moran, PLLC as our independent registered public accounting firm for the year ending March 31, |
4. | To transact such other business as may properly come before the meeting or any |
VOTING SECURITIES
Our voting securities consist solely of shares of common stock, no par value per share (“Common Stock”).share.
The record date for shareholders entitled to notice of and to vote at the meeting is the close of business on September 13, 2019,July 7, 2020, at which time we had 4,358,2575,102,995 shares of Common Stockcommon stock outstanding, including 431,250600,000 shares issued in conjunction with an offering of our common stock on AugustJune 12, 2019;2020 and 90,000 shares issued in conjunction with the full exercise of the underwriters' option to purchase additional shares on June 16, 2020; all shares are entitled to vote at the meeting. Shareholders are entitled to one vote, in person or by proxy, for each share of Common Stockcommon stock held in their name on the record date.
Shareholders representing aA majority of the Common Stock outstanding andshares of the Company entitled to vote, must be presentrepresented in person or represented by proxy, toshall constitute a quorum. Thequorum at the Annual Meeting. For the election of each directordirectors, that number of candidates equaling the number of directors to be elected, having the highest number of votes cast in favor of their election, are elected to the Board. Cumulative voting for directors or any other purpose is not allowed, and theproxies cannot be voted for more than eight nominees. The Ratification of Auditors Proposal each will require the affirmative vote of the holders of a majority of the Common Stockcommon stock present or represented by proxy at the meeting and entitled to vote thereon. Cumulative voting for directors is not authorized and proxies cannot be voted for more than eight 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.
Broker non-votes and abstentions will be counted as present for purposes of determining whether a quorum is present. If a quorum is present, the directors referenced in Proposal 1 will be elected by a plurality of the votes present and Proposal 2 (Say on Pay) and 3 (Ratification of Auditors) will be determined by the affirmative vote of a majority of the shares present or represented at the meeting and entitled to vote on the proposal. Broker non-votes and abstentions will have no effect on the outcome of any of the proposals, except that abstentions will have the effect of votes against Proposals 2 and 3.
Questions 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 Board of Directors of Mesa Laboratories, Inc. (the "Board") is sending this Proxy Statement, the attached Notice of Annual Meeting of Shareholders and the enclosed proxy card on or about September 25, 2019July 17, 2020 to you and all of our other shareholders of record as of the close of business on September 13, 2019.July 7, 2020. The Board of Directors is soliciting your vote for the Annual Meeting.
Who is eligible to vote?
Shareholders of record who own shares of our Common Stock at the close of business on September 13, 2019July 7, 2020 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 Labs until the next Annual Meeting, to obtain ana non-binding advisory vote to approve the compensation of our named executive compensationofficers, and to ratify the appointment Plante & Moran, PLLC as our independent registered public accounting firm for the year ending March 31, 2020.2021.
Might the Annual Meeting be adjourned?
We do not intend to seek adjournment of the Annual Meeting unless we have insufficient votes to satisfy a quorum (which requires the presence of at least a majority 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.Mesa Labs.
How do I vote?
Shareholders of record: All shareholders of record may vote by written proxy card.card or in person at the Annual Meeting. 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: Owners: Shares Registered in the Name of a Broker, Bank, or Other Nominee. If you own your shares throughwere a broker-dealer or another nominee,beneficial owner at the close of business on the record date, you must vote your shares as instructed by that broker-dealer or other nominee. If you own your shares through a nominee, you aremay 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 obtainedobtain a “Legal Proxy” for those shares“legal proxy” from the entity who holds your shares of record.
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.
Why does my name not appear as a shareholder of record?
Many, if not most, investors own their shares through a broker-dealerbroker, bank, or other nominee. Broker-dealers frequently clear their transactions through other broker-dealers, and may holdnominee who is the actual certificates for shares in the namestockholder 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 throughrecord with respect to your broker-dealer. You should contact your broker-dealer for more information about this process.shares.
When and where will the Annual Meeting be held?
As described in the Notice, weThe Annual Meeting will hold the Annual Meetingbe held at our corporate offices at 12100 West Sixth Avenue, Lakewood, Colorado 80228 (telephone 303-987-8000), on Tuesday, November 5, 2019Friday, August 28, 2020 at 9:10:00 a.m. MDT.Mountain Time.
How does the Board of Directors recommend that I vote?
The Board of Directors recommends that shareholders vote FOR all the nominees listed and FOR Proposals 2 and 3.
How can I obtain more information about Mesa?
We have included an Annual Report to Shareholders with this Proxy Statement that contains additional information about Mesa.Mesa Labs. In addition, information is available on our website at www.mesalabs.com and through the EDGAR filings maintained by the Securities and Exchange Commission at www.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 part of the soliciting material.
BENEFICIAL Ownership of equity securities of the company
The following table sets forth the number of shares of our common stock owned beneficially as of June 29, 2020 (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 June 29, 2020 except as set forth below. The percentage of beneficial ownership shown in the below table is based on 5,102,995 outstanding shares of common stock as of June 29, 2020.
Name of Beneficial Owner | Number of Shares Beneficially Owned | Percent of Class (1) | Notes |
Beneficial holders of 5% or more of outstanding common stock | |||
| BlackRock, Inc. | 704,316 | 13.8% | Based solely on a report on Schedule 13G/A filed on February 4, 2020. The address of BlackRock, Inc. is 55 East 52nd Street New York, NY 10055. |
| Conestoga Capital Advisors, LLC | 490,206 | 9.6% | Based solely on a report on Schedule 13G/A filed on January 17, 2020. The address of Conestoga Capital Advisors, LCC is 550 E. Swedesford Rd. Suite 120 Wayne, PA 19087. |
| The Vanguard Group | 296,237 | 5.8% | Based solely on a report on Schedule 13G filed on February 11, 2020. The address of The Vanguard Group is 100 Vanguard Blvd. Malvern, PA 19355 |
| Royce & Associates, LP | 265,979 | 5.2% | Based solely on a report on Schedule 13G/A filed on January 23, 2020. The address of Royce & Associates, LP is 745 Fifth Avenue, New York, NY 10151 |
| T. Rowe Price Associates, Inc. | 237,818 | 4.7% | Based solely on a report on Schedule 13G/A filed on February 14, 2020. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, MD 21202. |
Directors and named executive officers | |||
| John J. Sullivan Ph.D. | 99,178 | 1.9% | |
| Gary M. Owens | 22,800 | * | |
| John Sakys | 28,362 | * | |
| Greg DiNoia | 2,054 | * | |
| Brian Archbold | 775 | * | |
| John Schmieder | 76,476 | 1.5% | |
| Robert V. Dwyer | 36,753 | * | |
| Evan C. Guillemin | 42,513 | * | |
| David M. Kelly | 5,761 | * | |
David Perez | 275 | * | |
Jennifer Alltoft | 209 | * | |
Shannon M. Hall | -- | * | |
All executive officers and directors as a group (12 in number) | 315,156 | 6.1% |
(1) | For purposes of calculating each person’s or group’s percentage ownership, shares of common stock issuable pursuant to the terms of stock options or restricted stock units exercisable or vesting within 60 days after June 29, 2020 are included as outstanding and beneficially owned for that person or group, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person or group. |
* | Represents less than 1 percent of the outstanding Mesa Labs common stock. |
Section 16(a) Beneficial Ownership Reporting Compliance
Delinquent Section 16(a) Reports
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, for the years ended March 31, 2019 and March 31, 2020, all required reports were filed on a timely basis under Section 16(a) of the Exchange Act, except for one late Form 5 for Mr. Dwyer for two transactions that occurred during the fiscal year ended March 31, 2019 which was filed on December 30, 2019 due to administrative error. The number of shares beneficially owned by each shareholder is determined under SEC rules and generally includes shares for which the holder has voting or investment power. The information does not necessarily indicate beneficial ownership for any other purpose. For purposes of calculating each person’s or group’s percentage ownership, shares of common stock issuable pursuant to the terms of stock options or restricted stock units exercisable or vesting within 60 days after March 31, 2020 are included as outstanding and beneficially owned for that person or group.
ITEM 1.
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS TO THE SHAREHOLDERS THAT THEY VOTE “FOR” THE ELECTION OF SUCH NOMINEES.
At the Annual Meeting, eight directors are to be elected. Each of the eight director nominees elected at the Annual Meeting will be elected for a one-yearcommence their term at the end of the Annual Meeting until the next annual meeting of the Company’s shareholders, or until hisa successor ishas been elected and qualified. qualified, or until such director’s earlier resignation or removal.
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.their term. 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 and Governance 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.
Re-election of each nominee for director requires that such nominee receive a majorityplurality of the votes cast FOR his or her election. Abstentions and broker non-votes are not counted as votes cast and will have no effect on the outcome of any of these proposals.this proposal.
Nominees for Director
Election of Directors
At the Annual Meeting, shareholders will vote on the eight nominees, seven of whom are incumbent members of the Board, and Shannon Hall who was nominated by the Board during April 2020. Each of the incumbent directors was elected at the 2019 Annual Meeting of shareholders. Each director nominee has consented to serve if elected. If any nominee is unable to serve or will not serve for any reason, the persons designated on the accompanying form of proxy will vote for other candidates in accordance with their judgment. We are not aware of any reason the nominees would not be able to serve if elected. Mr. Dwyer, who served on the Board from 2006 until 2020 was a vital member of the board through a transformational time of growth at the Company and we extend our gratitude to him for his contributions to our success.
There are no family relationships among our directors, or between our directors and executive officers.
The Board of Directors recommends a vote FOR the election of each of the director nominees.
Information about Board of Directors Nominees
The followingbelow table sets forth the namesbiographical information and ages ofqualifications for all of our directorsdirector nominees and the positions held by each such person as of April 4, 2019. EachMarch 31, 2020. The age of the directors holds office until the next Annual Meeting or until his or her successoreach director is elected and qualified or until his or her earlier death, resignation or removal. Each officer serves at the discretionas of the Board.
March 31, 2020. In addition to the specific qualifications, skills and experience described below, each incumbent director has demonstrated a strong work ethic and dedication to Mesa Labs, including coming prepared to meetings, supporting our strategic vision while asking constructive questions and challenging management in a productive way, and otherwise providing valuable oversight of our business on behalf of our shareholders. We also believe that each director, through their personal accomplishments and in their service to Mesa Labs, has demonstrated high integrity, strong intellectual acumen, solid business judgment, and strategic vision.
Unless otherwise indicated, no director has held any other directorships for the past five years.
| ||
John J. Sullivan Chairman of the Board of Directors Age:
Director Since:2009 | Background: | Qualifications: |
Gary M. Owens President and Chief Executive Officer Age:
Director Since:2017 | Background: | Qualifications: |
John B. Schmieder Director Age:
Director Since: 2015 | Background: | Qualifications: |
Evan C. Guillemin
Age:
Director Since: | Background: |
|
| Qualifications: | |
David M. Kelly
Age:78 Director Since: 2010 | Background: | Qualifications: |
David Director
Age:
Director Since:2019 | Background: | Qualifications: |
Jennifer S. Alltoft Director
Director Since:2019 | Background: | Qualifications: |
Shannon M. Hall (1) Director Age: 51 Director Since:2020 | Background: | Qualifications: |
| (1) | ||
| Ms. |
Director Nomination Process
In evaluating potential director candidates, the Nominating and Governance Committee considers the appropriate balance of experience, skills and characteristics required of the Board, 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,relevant professional accomplishments, expertise relevant to our growth strategy, ability to make independent analytical inquiries, understanding of our business, willingness to devote adequate attention and time to duties of the Board, and such other criteria as are deemed relevant by the Nominating and Governance Committee. The Board may retain an executive recruiting firm to assist in identifying, evaluating and conducting due diligence on potential director candidates. Consistent with the policy of the Company, the Nominating and Governance Committee will strive to develop a Board that is diverse and inclusive regarding gender, race and ethnicity. The Board is committed to actively seeking to include highly qualified women and individuals from minority groups in the pool from which new director candidates are selected. Each recruiting firm retained by the Board is instructed to specifically focus on identifying candidates who, in addition to having particular skills and experience, also would add to the gender and diversity of the Board. In identifying potential director candidates, the Nominating and Governance Committee may rely on recommendations made by current directors and officers. Additionally, the Nominating and Governance Committee will consider candidates recommended by shareholders. 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.
CORPORATE GOVERNANCE AND BOARD COMMITTEES
The Board of Directors and its Committees
Our business is managed through the oversightmanagement regularly review best practices in corporate governance and direction ofmodify our Board of Directors (the “Board”). Our Board of Directors currently consists of eight persons. Under applicable Nasdaqcorporate governance policies 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 has affirmatively determined that each of the following individuals who served on the Board during a period in the year ended March 31, 2019 is an “independent director”practices as such term is defined in Nasdaq Listing Rule 5605: Michael T. Brooks, Stu Campbell, David M. Kelly, John B. Schmieder, Evan C. Guillemin, David B. Perez, Jennifer S. Alltoft, and Robert V. Dwyer. The Board has also affirmatively determined that each member of each committee of the Board satisfies the independence requirements applicable to committees as prescribed by the Nasdaq Listing Rules and the rules and regulations of the SEC. Dr. Sullivan and Mr. Owens are not an “independent director” because they are our employees.warranted.
The Board has the responsibility for establishing
Governance at Mesa Labs | |
Board Functions and Responsibilities | ● Mesa Labs’ corporate powers are exercised by or under the authority of, and the business and affairs of the corporation managed under the direction of, the Board of Directors. The Board oversees the CEO and the other senior management in the competent and ethical operation of Mesa Labs and assures that the long-term interests of shareholders are being served. ● The Board, with the assistance of management reviews corporate strategies and establishes broad corporate policies, ● The Board meets regularly throughout the year, including the annual organizational meeting following the Annual Meeting of Shareholders, to review significant developments affecting the Company 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. |
Board Independence | ● Under applicable Nasdaq and SEC requirements, we are required to have a majority of independent directors, and all of the members of the Audit Committee and the Compensation Committee must be independent. ● The Board has affirmatively determined that each of the following individuals who served on the Board during the year ended March 31, 2020 is an “independent director” as such term is defined in Nasdaq Listing Rule 5605: David M. Kelly, John B. Schmieder, Evan C. Guillemin, David B. Perez, Jennifer S. Alltoft, and Robert V. Dwyer. Shannon M. Hall, who was elected to the Board in May 2020, is also independent. ● The Board has also affirmatively determined that each member of each committee of the Board is independent. ● Our Board reviews the independence of our directors to determine whether any relationships, transactions or arrangements involving any director or any family member or affiliate of a director may be deemed to compromise the director’s independence from us. Based on that review, the Board determined that none of our directors has any relationships, transactions or arrangements that would compromise his or her independence. Dr. Sullivan and Mr. Owens are not “independent directors” because they are our employees. ● There are no family relationships among the Named Executive Officers (“NEOs”), directors or any person chosen to become a director or executive officer. |
Board Diversity | ● The Board is committed to maintaining a suite of directors who bring a wide array of qualifications, skills and attributes to our Board. ● The Board believes that its membership should reflect a diversity of experience, gender, race, ethnicity and age. ● With the election of Shannon Hall to our Board, early in the current fiscal year ending March 31, 2021 (“FY21”), two directors are female, representing over 25% of the non-executive directors. Additionally, one Board member is LGBT and one is Hispanic. |
Lead Independent Director | ● In the event the Board Chair is not an independent director, the independent directors may choose to elect, by majority vote, a “Lead Independent Director”. We previously had, but do not currently have, a Lead Independent Director. |
Active Board Refreshment | ● Directors terms are not staggered: Directors are elected at each Annual Meeting and serve a until the next Annual Meeting or until a successor is duly elected and qualified or their earlier resignation or removal. ● With the election of Shannon Hall to our Board in early FY21, 50% of directors joined the Board within the last five years. ● We have a balanced mix of short- and long-tenured non-executive directors, with an average director tenure of 6 years. |
No Overboarding | ● None of our directors have commitments on other Boards that would interfere with their ability to provide their full attention to the affairs of our Board. ● Currently, five of our directors serve on no other boards, two of our directors serve on one other board (one public and one private), one of our directors serves on three private company boards, and one of our directors serves on one private company board. |
Risk Management | ● It is a key responsibility of the members of our senior management team to identify, assess and manage the Company’s exposure to risk. ● Our Board provides oversight of the risk management process and monitors our overall risk profile. In its risk oversight role, our Board has the responsibility to satisfy itself that the risk management processes designed and implemented by management are appropriate and functioning as designed. ● The Board receives frequent timely reports from management of our financial performance, changes in and composition of consolidated balance sheet accounts, quality assurance program effectiveness, enterprise risk management, product liability risks and status of relationships with all business constituencies including customers, employees, suppliers and government entities. ● The Board routinely reviews our material litigation threats, product/market strategies, and operational activities. ● Board committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk, including environmental, social, and governance ("ESG") oversight which is the primarily the responsibility of the Nominating and Governance Committee. ● Our Audit Committee assists our Board in fulfilling its oversight responsibilities with respect to risk management in the following areas: ◦oversees legal and regulatory compliance; ◦discusses with management and the independent auditor regarding guidelines and policies with respect to risk assessment and risk management; ◦reviews our major financial risk exposures and the steps management has taken to monitor and control these exposures; ◦monitors certain key risks on a regular basis throughout the fiscal year, such as risk associated with internal control over financial reporting and liquidity risk; ◦ monitors compliance with disclosure controls and procedures; and ◦established and maintains an anonymous whistleblower hotline to encourage early reporting of accounting irregularities or other violations of our codes of ethics. ● We also have a separate independent hotline that employees can call administered by Employers Council. |
Minimum Equity Ownership Guidelines | ● Subsequent to our fiscal year ended March 31, 2020 (“FY20”), the Board adopted Governance Guidelines that includes within five years after his/her first election to the Board, each non-employee director shall acquire and continue to own a minimum of the Company common stock with a then-current market value of at least three times the current total annual director's respective compensation. |
Board Self-Evaluation | ● The Board conducts an annual self-assessment process coordinated by the Nominating and Governance Committee, including individual director assessments. |
Accountability | ● The Board met seven times during the year ended March 31, 2020. Each director attended at least 70% of the Board meetings, and at least 75% of the regular and special meetings of the committees on which they serve, either in person or telephonically. ● Directors
● In FY21, our Board adopted Governance Guidelines. These principles address items such as the qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. ● We do not have a shareholder rights plan / poison pill. |
Succession Planning | ● The Compensation Committee has primary responsibility for executive succession planning, while the Nominating and Governance Committee, in conjunction with the Board Chair, is responsible for Board member succession planning. |
Director Orientation and Development | ● Orientation and training programs are established for new directors to familiarize them with Mesa Labs' products, markets, and organization, along with corporate governance issues. ● Additional training is provided for directors in leadership roles. ● A continuing education program for all directors has been established to keep Board members abreast of best practices in corporate governance and emerging business trends. |
Code of Ethics | ● We have a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to all of our employees and directors. ● 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 at http://mesalabs.com/investor-relations. ● Based on information submitted by the directors and executive officers, none of our 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 any such director or executive officer. |
Corporate Sustainability
Our quality control, and calibration products and solutions are used globally to protect the integrity of processes and ensure safety. By delivering the highest caliber products and services possible to a broad range of industries and applications, we are committed to protecting society and individuals. In alignment with the value we bring to our customers, we believe that conducting our business by sustaining the environment, supporting our local communities, embracing diversity and inclusion, and adhering to a strong culture of compliance and ethics will positively impact our customers, stockholders, employees, community, and the environment. The following highlights some ESG accomplishments and initiatives.
Environmental, Social and Governance Highlights |
Manufacturing Quality Health and Safety | ● Our manufacturing facilities are certified to the ISO 13485 or ISO/IEC 17025 standards. | ||||
Strategy Planning | ● Management develops and maintains a robust strategic planning process including corporate development. ● The Board regularly reviews management's strategic development plans and financial objectives. | ||||
Health and Safety | ● We are committed to employee safety and health with our safety management program, safety training, and policies for the handling of hazardous materials. ● In the current COVID-19 environment, we have taken additional steps to ensure the safety of all employees including requiring the use of masks while onsite, requiring employee temperature checks prior to and following their shifts, and ensuring physical and temporal (multiple shifts) distance between employees working onsite. | ||||
Diversity and Inclusion | ● We are committed to fostering and promoting an inclusive and globally diverse work environment. ● We are dedicated to the principles of equal employment opportunity. We prohibit unlawful discrimination against applicants or employees extending our policies and protections beyond those statutorily required (gender identification). ● Our management is dedicated to ensuring the fulfillment of these policies with respect to hiring, placement, promotion, transfer, demotion, layoff, termination, recruitment advertising, pay, (and other forms of compensation), training, and general treatment during employment. ● Two directors are female, one is LGBT, and one is Hispanic, representing over 57% of the non-executive nominees. ● We require recruiters working with us to present candidates in the spirit of diversity and inclusion. | ||||
Employee Engagement | ● As part of The Mesa Way, we Always Learn. We ensure that improvements are sustained, enabling us to raise performance expectations and repeat the cycle of improvement. This strengthens our team by providing continual learning opportunities for our employees and helps us to become an employer of choice in our communities. ● Employee-led and company-sanctioned groups of those who share similar interests that also promote ESG goals including exercise groups and, in this year of COVID-19 and uncertainty, a victory garden contest. ● We utilize employee survey tools to solicit feedback on topics related to our culture and other drivers of engagements (recognition, leadership, etc.). ● In FY21 we plan to expand our internal training, professional development and employee engagement programs. | ||||
Community Investment and Engagement | ● We have an employee-led culture committee that includes representation from employees of all levels and across several Mesa Labs locations. In FY20 and into the current fiscal year, the culture committee engaged in local giveback and community efforts including making and donating masks and face shields using our 3-D printers, and donating to food banks. ● Our Bozeman facility contracts with Reach, Inc. to employ adults with developmental disabilities to reprocess our MIST media tubes by emptying them out and cleaning them. In addition to supporting the community, this avoids disposing of the glass vials. | ||||
Data Security and Privacy | ● We maintain privacy policies, management oversight, accountability structures and technology processes designed to protect privacy and personal data. ● We maintain a data security program, including regular reports to the Board. | ||||
| ESG Governance | ● A cross-functional working group formed in FY21 is comprised of members of the Board and management to spearhead ESG planning, strategy, and execution. ● Our Nominating and Governance Committee has primary Board responsibility for oversight of our ESG program. ● Strong focus on corporate governance with best practices in corporate governance (see Governance at Mesa Labs on page 8). | ||||
Executive Sessions
Our independent directors met in executive session without management present at the end of each regularly-scheduled Board meeting during the year ended March 31, 2020. At regularly scheduled meetings of the Audit Committee and Compensation Committee, executive sessions are scheduled at the end of each meeting, with only the Committee members or the Committee members and their advisors present, to discuss any topics the Committee members deem necessary or appropriate.
Committees of the Board of Directors
Our Board has three standing committees: (1) the Audit Committee, (2) the Compensation Committee, and (3) the Nominating and Corporate Governance Committee, each composed entirely of persons the Board has determined to be independent as described above. Each Committee operates pursuant to a written charter (which is reviewed annually and reassessed for adequacy) adopted by our Board, which sets forth the Committee’s role and responsibilities and provides for an annual evaluation of its performance. The charters of all three standing committees are available on the Investors page of our corporate website at http://mesalabs.com/investor-relations. In addition to the audit, nominating and governance, and compensation committees mentioned above, the Board may convene special committees to consider various other matters as they arise. During the year ended March 31, 2019,2020, the Board did not convene any special committees.convened a pricing committee for the offering by the Company of its common stock and issuance of 1.375% convertible senior notes which was completed August 12, 2020. The members of the pricing committee were: Dr. Sullivan and Messrs. Guillemin and Owens.
Audit Committee
Pursuant to its charter, the Audit Committee assists the Board in overseeing (i) the Consolidated Financial Statementsfinancial statements and audits of the Company, (ii) our compliance with financial reporting requirements, and (iii) the independence and performance of our internal and external auditors.auditors, (iv) the integrity of our financial statements and systems of internal control, and (v) implementation and effectiveness of our disclosure controls and procedures. The committee also acts to ensure open lines of communication among our independent auditors, accountants, internal audit function and financial management. The Audit Committee charterCharter further requires the Audit Committee to, among other things:
| ● | Review the annual audited Consolidated Financial Statements with management and the independent auditors and determine whether to recommend to the Board that they be included in our Annual Report on Form 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; | |
| ● | Approve the compensation of the independent auditors for annual audit and quarterly review work, and pre-approve audit and permitted non-audit services provided by our independent auditors; | |
| ● | Review of the qualifications, independence and performance of the independent auditors, who report directly to the Audit Committee; | |
| ● | Review quarterly earnings releases and financial statements; 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. |
As required by law,The Audit Committee also acts to ensure open lines of communication among our independent auditors, accountants, internal audit function and financial management. In performing its functions, the Audit Committee has established procedures to handle complaints received regarding our accounting,acts only in an oversight capacity and necessarily relies on the work and assurance of the Company's management and independent auditors which, in their reports, express opinions on the fair presentation of the company's financial statements and the effectiveness of the company's internal controls or auditing matters. It is also required to ensurecontrol over financials reporting. The Committee regularly holds executive sessions with the confidentialityaudit partner for continued assessment of employees who have provided information or expressed concern regarding questionable accounting or auditing practices. the performance, effectiveness and independence of the independent audit firm.
The Audit Committee held four meetings during the year ended March 31, 2019.2020. The members of the Audit Committee are Messrs. Guillemin (Chairperson), Schmieder, and Perez. All members of the Audit Committee (including Mr. Kelly prior to Mr. Perez joining the Board) were present at each meeting. TheOur Board has determined that each is “independent” for audit committee purposes as that term is defined by the rules of the SEC and Nasdaq, and that each has sufficient knowledge in financial and auditing matters to serve on the audit committee. Our board of directors has designated Mr. Evan Guillemin isas an “audit committee financial expert”expert,” as defined inunder the applicable rules and regulations of the Exchange Act and is “independent.”SEC.
As required by Nasdaq, our Board has reviewed the qualifications
Compensation Committee
Pursuant to its charter, the Compensation Committee assists the Board in fulfilling its oversight responsibilities for compensation of executive officers and administration of our compensation and benefit plans. In accordance with its charter, the committeeCompensation Committee determines the compensation of our Chief Executive Officer based on an evaluation of his or her performance, and approves the compensation level of our other executive officers following an evaluation of their performance and recommendation by the Chief Executive Officer. The Compensation Committee met seven times during the year ended March 31, 2019. The2020. Each meeting was attended by all members of the Compensation Committee are Messrs. Kelly (Chairperson), Guilleman, and Perez.committee, except one meeting, for which one member was absent.
The Compensation Committee charter also grants the committeeCompensation Committee the authority to: review and make recommendations to the Board with respect to the establishment of any new incentive compensation and equity-based plans; review and approve the terms of written employment agreements and post-service arrangements for executive officers; recommend compensation to be paid to our outside directors; review disclosures to be filed with the SEC and distributed to our shareholders regarding executive compensation and recommend to the Board the filing of such disclosures; assist the Board with its functions relating to our compensation and benefits programs generally; and other administrative matters with regard to our compensation programs and policies. The committeeCompensation Committee may delegate any of its responsibilitiesfunctions and powers to a subcommittee comprised of oneits subcommittees or more membersthe Chief Executive Officer or any other executive officer or employee of the committee, except whereCompany if the Compensation Committee determines that such delegation is not allowed by legalnecessary or regulatory requirements.appropriate, unless such delegation would be contrary to the intent of the Board, our Bylaws or Articles of Incorporation, or applicable law or the rules and regulations of the Nasdaq.
The Compensation Committee has also been appointed by the Board to administer ourthe Mesa Laboratories, Inc. 2014 Equity Plan (“the 2014 Equity Plan”) and to make awards under the plan.2014 Equity Plan, including as described below under the heading "Compensation Discussion and Analysis." The committeeCompensation Committee has for several years, including the year ended March 31, 2019,2020, delegated its authority under the plan to our Chief Executive Officer to make grants to non-executive officer level employees, within limitations specified by the committee.
The Compensation Committee retained Pay Governance, LLC,Deloitte Consulting, LLP (“Pay Governance”Deloitte”), an independent executive compensation consulting firm, to provide the committeeCompensation Committee with advice regarding compensation matters for the year ended March 31, 2019 and for the equity compensation awards made to our executive officers in April and June 2018.2020. All of the fees paid to Pay GovernanceDeloitte during 20192020 were in connection with the firm’s work on executive compensation matters on behalf of the committee;Compensation Committee; no fees were paid to the firm for any other work. Pay GovernanceDeloitte was retained pursuant to an engagement letter with the Compensation Committee, and the committee determined that the firm’s service to Mesa did not and does not give rise to any conflict of interest, and considers Pay GovernanceDeloitte to have sufficient independence from our company and executive officers to allow it to offer objective advice.
During the year ended March 31, 2019, noThe members of ourthe Compensation Committee were executive officers serving on the compensation committee of another entity whose executive officers served on our Board.are Messrs. Kelly (Chairperson), Guilleman, and Perez. No member of the Compensation Committee was, anduring the fiscal year ended March 31, 2020, a Mesa Labs officer or employee of the Company or had a business relationship with or conducted any undisclosed transactions with us, and no such member has ever served as an officer at Mesa Labs. During the Company.fiscal year ended March 31, 2020, none of our executive officers served as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity whose executive officers served on our Compensation Committee or the Board. The Board has determined that each member of the committee qualifies as a “Non-Employee Director” under SEC Rule 16b-3 and as an “Outside Director” under Section 162(m) of the Internal Revenue Code. Our Chief Executive Officer and/or other Officers,officers, upon request, may attend selected meetings of the Compensation Committee.
We had no compensationNo member of the Compensation Committee nor any organization of which any member of the committee interlocks withis an officer or director received any other companypayments from us during the year ended March 31, 2019.2020, other than the payments disclosed under the heading “– Director Compensation” below.
Nominating and Governance Committee
The Nominating and Governance Committee assists the Board in identifying qualified individuals to become members of the Board, oversees, reviews and where appropriate, makes recommendations concerning the Company’s corporate governance guidelines, and conducts an annual self-assessment of the Board performance. The Nominating and Governance Committee met one timefour times during the year ended March 31, 2019.2020. The members of the Nominating and Governance Committee are Messrs. Schmieder (Chairperson), Dwyer, and Ms. Alltoft.
Executive Sessions
Our independent directors met in executive session without management present at the end of each regularly-scheduled Board meeting during the year ended March 31, 2019. At regularly-scheduled meetings of2020 were Mr. Schmieder (Chairperson), Ms. Alltoft, and Mr. Dwyer. Ms. Hall subsequently replaced Mr. Dwyer on the Audit CommitteeNominating and Compensation Committee, executive sessions are scheduled at the end of each meeting, with only the Committee members or the Committee members and their advisors present, to discuss any topics the Committee members deem necessary or appropriate.Governance Committee.
Risk Oversight
The Board takes a key role in overseeing our risks. The Board receives frequent timely reports of our financial performance, changes in and composition of consolidated balance sheet accounts, quality assurance program effectiveness, enterprise risk management, 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
How to encourage early and anonymous reporting of accounting irregularities or other violations of our codes of ethics. The Board routinely reviews our litigation threats, product/market strategies and operational activities.
Independence of Directors
Our Board reviews the independence of our directors to determine whether any relationships, transactions or arrangements involving any director or any family member or affiliate of a director may be deemed to compromise the director’s independence from us. Based on that review, the Board determined that none of our directors has any relationships, transactions or arrangements that would compromise his or her independence, except that Mr. Owens and Mr. Sullivan are not independent directors as a result of their employment with us. There are no family relationships among the Named Executive Officers (“NEOs”), directors or any person chosen to become a director or executive officer.
Involvement in Certain Legal Proceedings
Based on 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 any such director or executive officer.
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 at http://mesalabs.com/investor-relations.
Shareholder Communications withContact 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 any 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.
Director Compensation
DuringBelow is a description of the compensation program for our directors, which was approved by the Board during our fiscal year ended March 31, 2019,2020 upon a recommendation from the cash retainer for service on the Board was increased to $50,000 annually, and the equity retainer for service on the board was modified to be comprised of restricted stock units (RSUs) valued at $75,000 annually (the number of shares subject to the award is based on the closing price of our common stock on the grant date). The Chairman of the Board is entitled to additional compensation of $20,000 annually, while other committee chair positions are entitled to an additional $10,000 annually. Directors are reimbursed for expenses incurred in connection with their service as directors, including travel expenses for meetings. Mr. Owens does not receive compensation for his services as a director because he is a full-time employee of the company.
Compensation Committee. The Compensation Committee of the Board reviews and makes recommendations to the Board on compensation provided to non-employee directors at least annually, as required by its charter. The Compensation Committee used data provided by Pay Governance, LLCan analysis of the non-employee director compensation programs of the peer group discussed in our “Compensation Discussion and Analysis” section below as compared to our board's compensation levels to assess the competitiveness of our non-employee director compensation program, and made changes to align the compensation program with that of our peer group. Directors who are full time employees of Mesa Labs do not receive compensation for their services as compared to the peer group discusseddirectors. Directors are also reimbursed for expenses incurred in our Compensation Discussionconnection with their service as directors, including travel expenses for Board and Analysis section. Upon review and consideration, the Committee recommended, and the Board approved, that the increases described above would be implemented beginning during the year ended March 31, 2019.committee meetings.
Non-Employee Director Compensation | Cash Retainer (1) | Restricted Stock Units (2) | ||||||
Annual Director Retainer | $ | 50,000 | $ | 115,000 | ||||
Committee Chair Retainer | ||||||||
Audit | $ | 10,000 | ||||||
Compensation | $ | 10,000 | ||||||
Nominating and Governance | $ | 10,000 | ||||||
Chairperson of the Board | $ | 20,000 | ||||||
(1) | Cash retainers are paid quarterly. | |
(2) | A restricted stock unit ("RSU") represents the right to receive shares of our common stock upon vesting. RSUs are granted to non-employee directors annually. The number of shares subject to the award is based on the closing price of our common stock on the grant date, less the present value of dividends expected to be paid during the vesting period. The awards vest in full on the one-year anniversary of the grant date. |
The compensation paid to each non-employee director who served during the year ended March 31, 20192020 is set forth below.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | Option Awards ($) (2), (8) | All Other Compensation ($) (3) | Total ($) | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | All Other Compensation ($) (2) | Total ($) | |||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (g) | (h) | (b) | (c) | (g) | (h) | |||||||||||||||||||||||||||
John Sullivan | $ | 60,000 | $ | 50,909 | $ | 23,922 | $ | 12,000 | 146,831 | 70,000 | 114,871 | 12,000 | 196,871 | |||||||||||||||||||||||
Michael T. Brooks (4) | 50,000 | 50,909 | 23,922 | -- | 124,831 | |||||||||||||||||||||||||||||||
H. Stuart Campbell (5) | 41,000 | 50,909 | 23,922 | -- | 115,831 | |||||||||||||||||||||||||||||||
Robert V. Dwyer | 50,000 | 50,909 | 23,922 | -- | 124,831 | 50,000 | 114,871 | -- | 164,871 | |||||||||||||||||||||||||||
Evan C. Guillemin | 57,500 | 50,909 | 23,922 | -- | 132,331 | 60,000 | 114,871 | -- | 174,871 | |||||||||||||||||||||||||||
John B. Schmieder | 50,000 | 50,909 | 23,922 | -- | 124,831 | |||||||||||||||||||||||||||||||
John Schmieder | 60,000 | 114,871 | -- | 174,871 | ||||||||||||||||||||||||||||||||
David M. Kelly | 56,500 | 50,909 | 23,922 | -- | 131,331 | 60,000 | 114,871 | -- | 174,871 | |||||||||||||||||||||||||||
David B. Perez (6) | 9,615 | 60,027 | -- | -- | 69,642 | |||||||||||||||||||||||||||||||
Jennifer S. Alltoft (7) | 4,167 | 50,078 | -- | -- | 54,245 | |||||||||||||||||||||||||||||||
David Perez | 50,000 | 114,871 | -- | 164,871 | ||||||||||||||||||||||||||||||||
Jennifer S. Alltoft | 50,000 | 114,871 | -- | 164,871 | ||||||||||||||||||||||||||||||||
(1) | Reflects the grant date fair value under FASB Topic 718 of restricted stock units awarded for the equity portion of each director’s annual retainer. Each of Dr. Sullivan and Messrs. | |
| ||
| Dr. Sullivan receives an annual salary of $12,000 for his assistance with Investor Relations for the Company. | ||
| 2020. The aggregate number of options held by each director from previous years' grants as of March 31, |
Name of Director | Aggregate Number of Stock Options Owned as of March 31, |
John Sullivan | |
| |
| |
| Robert V. Dwyer | |
Evan C. Guillemin | 8,090 |
John B. Schmieder | 4,450 |
David M. Kelly | 4,406 |
| David B. Perez | -- |
| Jennifer S. Alltoft | -- |
Stock Ownership Guidelines
We do not currently have stock ownership requirements for our officers or our Board members.
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, 2019 (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, 2019 except as set forth below.
Name of Beneficial Owner | Number of Shares Beneficially Owned | Percent of Class (1) | Notes | |
Beneficial holders of 5% or more of outstanding common stock | ||||
Conestoga Capital Advisors, LLC | 544,073 | 14.0 | Based solely on a report on Schedule 13G/A filed on January 1, 2019. The address of Conestoga Capital Advisors, LCC is 550 E. Swedesford Rd. Suite 120 Wayne, PA 19087. | |
T. Rowe Price Associates, Inc. | 286,347 | 7.4 | Based solely on a report on Schedule 13G/A filed on February 14, 2019. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, MD 21202. | |
BlackRock, Inc. | 252,580 | 6.5 | Based solely on a report on Schedule 13G/A filed on February 8, 2019. The address of BlackRock, Inc. is 55 East 52nd Street New York, NY 10055. | |
Directors and named executive officers | ||||
John J. Sullivan Ph.D. | 110,241 | 2.8 | Includes 29,577 shares underlying vested stock options and 9,216 shares which will vest by April 3, 2019. | |
Gary M. Owens | 19,560 | * | Includes 6,400 shares underlying vested stock options and 1,000 shares which will vest on April 2, 2019. | |
John Sakys | 24,098 | * | Includes 17,336 shares underlying vested stock options and 4,262 shares which will vest by April 3, 2019. | |
Greg DiNoia | 550 | * | Includes 270 shares which will vest on April 2, 2019. | |
John B. Schmieder | 78,173 | 2.0 | Includes 1,458 shares underlying vested stock options and 776 shares which will vest by April 8, 2019. | |
Michael T. Brooks | 38,557 | 1.0 | Includes 4,916 shares underlying vested stock options and 851 shares which will vest by April 3, 2019. | |
Robert V. Dwyer | 57,838 | 1.5 | Includes 3,416 shares underlying vested stock options and 851 shares which will vest by April 3, 2019. | |
Evan C. Guillemin | 55,981 | 1.4 | Includes 4,916 shares underlying vested stock options and 851 shares which will vest by April 3, 2019. | |
David M. Kelly | 5,667 | * | Includes 1,232 shares underlying vested stock options and 851 shares which will vest by April 3, 2019. | |
David B. Perez | -- | * | ||
Jennifer S. Alltoft | -- | * | ||
All executive officers and directors as a group (11 in number) | 390,665 | 9.8 |
(1) The percentage of beneficial ownership shown in the following tables is based on 3,890,138 outstanding shares of common stock as of March 31, 2019. For purposes of calculating each person’s or group’s percentage ownership, shares of common stock issuable pursuant to the terms of stock options or restricted stock units exercisable or vesting within 60 days after March 31, 2019 are included as outstanding and beneficially owned for that person or group, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person or group.
* Represents less than 1 percent of the outstanding Mesa common stock.
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 applicableSubsequent to our officers, directors and greater than five percent beneficial shareholders were complied with during the fiscal year ended March 31, 2019.2020, we adopted stock ownership guidelines that state that within five years after their first election to the Board, each non-employee director shall acquire and continue to own a minimum of the Company common stock with a then-current market value of at least three times the current total annual director's cash retainer.
EXECUTIVE OFFICERS AND COMPENSATION
Named Executive Officers
In addition to Gary Owens, our Chief Executive Officer, whose biography is included in the Nominees for Director section above, our executive officers as of March 31, 20192020 were as follows:
Information about our Executive Officers | ||
John Sakys | ||
Greg DiNoia | ||
Brian Archbold Senior Vice President of Continuous Improvement
| ||
Compensation Discussion and Analysis
Compensation Philosophy
This Compensation Discussion and Analysis describes the objectives and principles underlying our executive compensation programs, outlines the material elements of the compensation of our executive officers, and explains the Compensation Committee’s determinations as to the actual compensation of our executive officers for the fiscal year ended March 31, 2019.2020. In addition, this Compensation Discussion and Analysis is intended to put into perspective the tables and related narratives regarding the compensation of our named executive officers that appear following this section.
The Compensation Committee directly supervises our executive compensation program for our named executive officrsofficers identified below (our NEOs). 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 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.
NEO positions during the fiscal year ended March 31, 20192020 included: Mr. Owens, our Chief Executive Officer and President, Mr. Sakys, our Chief Financial Officer, and Mr. DiNoia, our Senior Vice President of Commercial Operations.Operations, and Mr. Archbold, our Senior Vice President of Continuous Improvement who become an NEO during the year ended March 31, 2020. Mr. Archbold was promoted because he has distinguished himself as a leader at Mesa Labs and the executive team and the Board are confident that he is critical to our strategic growth initiatives.
We have designed our compensation programs for our NEOs to:
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● | 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-term and long-term objectives and reward them for meeting these objectives. |
Performance Overview for the Fiscal Year Ended March 31, 2019
Our company made significant progress toward our long-term goals during the fiscal year ended March 31, 2019:
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Compensation Best Practices
We believe our executive compensation program is competitive, is aligned with current governance trends, and contains stockholder-friendly features as outlined below:
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Components of Compensation
Our executive compensation program is comprised of three primary components:
Base Salary |
Short Term Incentive Plan (Annual Cash Bonus) | Equity Compensation (Stock Options, Performance Shares, Restricted Stock Units) | ||||
Role in Total Compensation | Provides fixed compensation and helps attract and retain executive talent. | Rewards our executives based on their performance relative to the Company’s annual key performance metrics and individual performance goals. | Aligns the incentives for our executive officers with the interests of our shareholders and rewards our executives for creating shareholder value. | |||
Determination | Determined based on the importance of the executive’s positions within the Company, the experience of the executive, and external market data | Determined under our Company’s management bonus plan, which provides for variable payout targets based on achievement against revenues and profit growth goals and external market data approved by the Compensation Committee at the beginning of each year, adjusted for individual performance. | Number of awards is determined based on the executive’s position within the company, external market data, and individual performance. |
The total compensation package reflects our “Pay for Performance” philosophy, which couples 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.
Modifications to FY20 Executive Compensation Program
The Compensation Committee regularly reviews our executive compensation program with a view toward continuous improvement. Effective in 2020, the Compensation Committee made certain modifications to the program to ensure our compensation programs effectively entice and retain executives, while also reinforcing the already-strong linkage between both executive compensation and individual executive performance, and the interest of our shareholders.
Individual Executive Performance
Short-term incentive plan was adjusted based on each executive's performance against their individual goals, except the Chief Executive Officer, who received a bonus payout at the company level with no adjustment as described below.
Interest of the Shareholders
The Compensation Committee elected to modify the mix of equity compensation awards granted to the NEOs from 75% performance share units ("PSUs") and 25% stock options in 2019 to 50% PSUs and 50% stock options in 2020, except our CEO, whose award amount includes an additional $1 million of special restricted stock unit award describe in more detail under "Other Long-Term Incentive Awards" below. Since revenues growth and adjusted operating income growth are used in measuring the executives' success under both the Short-Term Incentive Plan and the 2014 Equity Plan, the Compensation Committee determined that lowering the percentage of PSUs granted to our NEOs diversifies their performance targets and at the same time ensures continued alignment with the interests of our shareholders. Specifically, more of our NEO's pay is contingent upon factors that create long-term shareholder value. Additionally, the Compensation Committee determined that a 50% PSU 50% option mix was more common among externally benchmarked companies, as discussed further below.
The Compensation Committee also modified the vesting period for stock options from a five year graded vesting term to a four year graded vesting term. The Compensation Committee determined that a four year vesting term is more common among benchmarked companies and serves as a more effective incentive to attract and retain top talent.
Performance Overview for the Year Ended March 31, 2020
Our company made significant progress toward our long-term goals during the fiscal year ended March 31, 2020:
● | We continued to develop and implement The Mesa Way, which is our customer-centric, lean-based system for continuously improving and operating a set of high-margin, niche businesses. | |
● | We acquired Gyros Protein Technologies on October 31, 2019, which is the largest acquisition in our company's history. | |
● | Revenues increased 14% to $117.7 million, the highest in our company’s history. | |
● | Adjusted operating income (“AOI”)(1) decreased 7% to $23.9 million | |
● | Organic revenues growth increased 2%. |
(1) | AOI, or adjusted operating income, is a non-GAAP measure that is defined as operating income plus the non-cash impact of amortization of intangible assets acquired in a business combination, stock-based compensation, and impairment of goodwill and long-lived assets. It is calculated as follows: |
| Year Ended | ||||||||||
| March 31, | ||||||||||
| 2020 | 2019 | |||||||||
Operating income (GAAP) | $ | 7,494 | $ | 9,781 | ||||||
Amortization of intangible assets | 10,637 | 7,090 | ||||||||
Stock-based compensation expense | 5,525 | 4,212 | ||||||||
Impairment loss on goodwill and long-lived assets | 276 | 4,774 | ||||||||
| Adjusted operating income (non-GAAP) | $ | 23,932 | $ | 25,857 | ||||||
Compensation Best Practices
We believe our executive compensation program is competitive, is aligned with current governance trends, and contains stockholder-friendly features as outlined below:
● | Pay for Performance – Significant portion of our NEO pay is performance-based. | |
● | No golden parachute excise tax gross-ups. | |
● | All members of the Compensation Committee are independent directors. | |
● | External benchmarking used for compensation decisions. | |
● | Independent compensation consultant. | |
● | No executive-only retirement plans. | |
● | No excessive executive perks. |
Setting Executive Officer Compensation
The Compensation Committee, with assistance from our executives, if required, researches compensation levels by investigating comparable company records, purchasing third party compensation surveys or engaging compensation consultants. The acquired data is evaluated by the Compensation Committee and is one factor in establishing compensation plans for the NEOs. Compensation decisions for the following fiscal year are typically made at a meeting of the Compensation Committee shortly after the end of each fiscal year. Once final financial and operational results for the year are available, the Compensation Committee is able to assess the performance of the NEOs.
Benchmarking
To help establish competitive compensation levels, the Compensation Committee examined executive compensation survey data, including base salaries, short-term and long-term incentive compensation, and total cash compensation from Pay Governance.Deloitte. The survey data was tailored to include only those U.S. public and private companies in the medical equipment and device segment with revenues betweenaveraging approximately $75 - $500$200 million per year. This included companies that produced both medical devices and general electronic instruments, along with consumable supplies. The data from this analysis was used by the Compensation Committee as one factor in determining compensation levels for base salary and total compensation.
Based on input from Pay Governance,Deloitte, the Compensation Committee used the following peer group for fiscal year 20192020 compensation decisions. Compensation benchmarking is determined with reference to survey data from Pay GovernanceDeloitte and compensation data disclosed in the peers’ proxy statements. Our peer group for fiscal year 20192020 included:
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● | Inogen, Inc. | |
● | Lantheus Holdings, Inc. | |
● | Luminex Corporation | |
● | Meridian Bioscience, Inc. | |
● | Natus Medical Incorporated | |
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● | OraSure Technologies, Inc. | |
● | Repligen Corporation | |
● | Surmodics, Inc. | |
● | Tactile Systems Technology, Inc. |
Determination of Target Compensation
The Compensation Committee targets the total compensation level to be competitive with comparable companies in terms of size (as measured by revenues and market capitalization), our industry segments and geographic locations. For the fiscal year ended March 31, 2019,2020, the Compensation Committee determined that both the CEO and the CFO should receive increases in compensation to bring their total compensation into a competitive range compared to the benchmarked peer group. The decision was made to ensure that the companyCompany attracts and retains the talent needed to lead Mesa Labs to the achievement of its performance goals. The Compensation Committee used not only the data from the Pay GovernanceDeloitte survey, but also considered individual and team executive performance, along with our financial performance, as criteria to establish target compensation levels for the CEO and CFO. The CEO proposed the salary for the Senior Vice President of Commercial Operations and Senior Vice President of Continuous Improvement during the fiscal year ended March 31, 2019,2020, which was approved by the Compensation Committee. From that analysis, and in consideration of our past and future expected financial performance, the Compensation Committee made adjustments to base salaries and target total compensation levels for each NEO that were implemented effective June 5, 2018, retroactive to April 1, 2018.2019.
Base Salaries
We pay a base salary to compensate our executive officers for services rendered during the year, and also to provide them with income regardless of our stock price performance, which helps avoid incentives to create short-term stock price fluctuations and mitigates the impact of forces beyond our control such as general economic and stock market conditions.
The Compensation Committee reviews the base salary of each executive officer at least annually and adjusts salary levels as the committee deems necessary and appropriate in its discretion.discretion following review and approval of such changes by the full Board.
Recommendations for the executive officers (other than the CEO) areour NEO's salaries were provided to the Compensation Committee by our CEO.Deloitte. The Compensation Committee reviews the CEO’s base salaryDeloitte's recommendation and recommends any changesthen provides the recommendations, as amended if necessary, to the full Board for their review and approval by the full Board.approval. Adjustments to base salaries, if any, typically occur during the first quarter of each year.
As of March 31, 2019,2020, the annualized base salary of each of our NEOs was as follows:
Executive | 2019 Base Salary (as of March 31, 2019) | 2018 to 2019 Increase | 2020 Base Salary (as of March 31, 2020) | 2019 to 2020 Increase |
Gary Owens | $520,000 | 21% | $600,000 | 15% |
John Sakys | $300,000 | 14% | $374,000 | 25% |
Greg DiNoia | $331,345 | 9% | $341,285 | 10% |
| Brian Archbold (1) | $278,460 | -- | ||
(1) | Mr. |
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The Compensation Committee increased the base salaries of each of our NEOs (except for Mr. Archbold) in fiscal year 20192020 based on Pay Governance’sDeloitte's analysis of base salaries paid by our peer companies, so that the base salaries of our NEOs would rank among our peers near target levels discussed above.
Short-Term Incentive Plan
The Compensation 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 our financial performance. TargetThe Short-Term Incentive Plan is our annual cash incentive program for employees at the management level and above and provides one type of such “at-risk” compensation. Under the Short-Term Incentive Plan. target bonus amounts are set for each NEO based on his position in the company and based on a competitive compensation analysis of our peer group. The actual bonus amount earned for a year under the Short-Term Incentive Plan ranges from 0% - 200% of the target bonus established for each individual, based on a company performance factor that may be adjusted for individual performance. Of course, if our financial performance were poor, bonus payments could be at or near $0.
Recommendations for bonus payouts for each of the NEOs except the CEO were recommended to the Compensation Committee by the CEO based on individual performance during the year. There were no adjustment to the CEO bonus payouts recommended by the Compensation Committee. The Compensation Committee used the information gathered to recommend a bonus payout for review and approval by the full Board.
The company performance factor is measured by two variables: revenues growth, which is weighted 30% and AOI growth, which is weighted 70%. These variables were approved by the Compensation Committee at the beginning of the year and are considered by the Compensation Committee to be a reliable indicator for the creation of long-term shareholder value. Achievement at the target level of each performance metric would yield a company performance factor of 100%, equating to a payout at the target level. The company performance factor ("CPF") is adjusted up or down based on the actual performance versus the underlying performance metrics. Bonus payouts under the Short-Term Incentive Plan are tied directly to achievement of these revenue growth and AOI growth targets for the year. If both the revenues and AOI growth targets are exceeded by a substantial margin, the maximum bonus payments were set at 200% of the target for the NEOs. The Compensation Committee reserves the right to adjust payments under the Short-Term Incentive Plan, in the case of unusual circumstances or events, or economic conditions in general.
The Short-Term Incentive Plan is our annual cash incentive program for employees at the management level and above. The Company’s incentive program consisted primarily of a company performance factor that may be adjusted for individual performance. Company performance is measured by two variables: revenues growth and AOI growth. These variables are considered by the Compensation Committee to be a reliable indicator for the creation of long-term shareholder value. Target goals for business performance metrics used to determine the company performance factor are set at the beginning of the year. Achievement at the target level of each performance metric would yield a company performance factor of 100%, equating to a payout at the target level. The company performance factor is adjusted up or down based on the performance versus the underlying performance metrics. Bonus payouts under the Short-Term Incentive Plan are tied directly to achievement of these revenues growth and AOI growth targets for the year. If both the revenues and AOI growth targets are exceeded by a substantial margin, the maximum bonus payments were set at 167% of the target for the NEOs. As a result of the mix of outperformance against the Short-Term Incentive Plan performance metrics for
For the fiscal year endingended March 31, 2019,2020, the CPF targets set by the Board were considered appropriately rigorous based on budgeted overall growth that was expected from our various product lines, including some that are more mature, as well as the potential to capture efficiencies and cost savings to achieve an AOI which is value-creating for investors. As depicted below, the company performance factor was 142%107% of target.
Metric | Target (100% payout) | Actual | Achievement Percentage | Weighting | Impact on CPF | |||||||||||||||
Revenues Growth | 8.2 | % | 5.3 | % | 62 | % | 30 | % | 19 | % | ||||||||||
Adjusted Operating Income Growth (1) | 8.5 | % | 10.1 | % | 126 | % | 70 | % | 88 | % | ||||||||||
Company performance factor: | 107.0 | % | ||||||||||||||||||
Metric | Target | Actual | Impact on CPF |
Revenues Growth | 7.9% | 7.2% | (25.0%) |
Adjusted Operating Income Growth (1) | 13.1% | 18.5% | 67.0% |
Beginning company performance factor: | 100.0% | ||
Actual performance impact to company performance factor: | 42.0% | ||
Final Company performance factor: | 142.0% | ||
(1) For the purposes of calculating AOI growth during the year, the Compensation Committee elected to increase AOI for the year ended March 31, 2019 by $3.3 million, the amount of expense recorded associated with a legal settlement. Refer to Note 12. “Commitments and Contingencies” of Notes to Consolidated Financial Statements contained in Item 8. Financial Statements and Supplementary Data within our Form 10-K dated March 31, 2019 for more information.
(1) | Adjusted operating income growth was adjusted by the Board to remove non-recurring income and costs, including: exclusion of the gross margin of the packaging division, which we exited during the year, and exclusion of the results of Gyros Protein Technologies, which we acquired during the year, exclusion of acquisition-related costs pertaining to the acquisition of Gyros Protein Technology during the year. |
In addition to the company performance factor, an executive’s Short-Termshort-term incentive bonus may also depend on his or her achievement of individual objectives, which are reflected in the individual performance factor. However, the CEO’s salaryshort-term incentive bonus is not adjusted for an individual performance factor, because his performance is inherently reflected in the performance of the business. After the end of the year, the CEO evaluates the performance of each of the other executive officers against his or her objectives and provides a recommendation on individual performance for each to the Compensation Committee, which then approves a final adjusted value.
In determining the individual performance modifier for the executive officers, the CEO considered each executive’s individual accomplishments that helped the Company achieve significant progress on its growth strategy, including growing the business both organically and through further acquisitions, improving operational efficiency, and by continuing to hire, develop, and retain top talent. However, an adjustment was made to reduce Mr. DiNoia's short-term incentive payment, because bookings and actual revenues growth were below target.
Target bonus awards under the Short-Term Incentive Plan for the Company’s NEOs, as well as the actual amounts paid for performance in the fiscal year ended March 31, 20192020 were as follows:
Executive | Target Bonus as a Percentage of Base Salary | Actual Payout | Actual Payout as a Percentage of Base Salary | Target Bonus as a Percentage of Base Salary | Actual Payout | Actual Payout as a Percentage of Base Salary | |||||||||
Gary Owens | 82% | 603,500 | 116% | 90 | % | $ | 577,800 | 96 | % | ||||||
John Sakys | 60% | 260,000 | 87% | 52 | % | $ | 208,008 | 56 | % | ||||||
Greg DiNoia | 45% | 214,000 | 65% | 45 | % | $ | 144,328 | 42 | % | ||||||
| Brian Archbold | 40 | % | $ | 134,180 | 48 | % | |||||||||
Long-term Incentive Plan
The Compensation Committee believes that it is in the best interest of our shareholders to provide long-term incentiveincentives to each NEO through their ownership of our stock.stock and through stock-based incentives. Stock ownership by our NEOs and stock-based incentives directly ties their long-term compensation to the performance of our share price. To achieve this goal, we make stock option grants, and in some cases full-value awards, to each NEO at the time of hire. We also make stock option grants and full value award grants, which may be subject to performance conditions, on an annual basis under the 2014 equity plan. Deloitte recommends equity compensation levels and mix for our stock compensation plan.NEOs. For the fiscal year ended March 31, 2019,2020, the Compensation Committee chose to grant a combination of non-qualified stock options and performance share unit awards as recurring performance-based vehicles used to reward our NEOs for enhancing long-term shareholder value. Restricted stock units were also granted to Mr. Owens and Mr. DiNoia as described in more detail in the section titled Other Long-Term Incentive Awards below. In June of 2018,2019, the Compensation Committee determined a target grant value for each NEO (other than Mr. DiNoia, who was not an executive officer at the time of grant as discussed further under “Other Long-Term Incentive Awards” below) and split the value approximately 75%50% in performance shares,share units, and 25%50% in non-qualified stock options.options, other than our CEO, whose award amount includes an additional $1 million of special restricted stock unit awards. The Compensation Committee elected to grant performance share unit awards based on analysis of Pay GovernanceDeloitte data, which showed that performance awards both align the executives behind company goals beyond share price and are commonly granted at competitors. Details of these annual grants are provided below.
20192020 Performance Share Unit Awards
Annual performance share unit awards were granted to our NEOs on June 5, 2018.10, 2019. The awards vest both based on our achievement of specific performance criteria for the three-year period from April 1, 20182019 through March 31, 2021, as well as2022, and on a pro-rata basis after 12 months of continued service through June 15, 2021.2022, subject to adjustment by the Board. The quantity of shares that will be issued upon vesting will range from 0% to 400%200% of the targeted number of shares; if the defined minimum targets are not met, then no shares will vest.shares.
Company targets were set by the Compensation Committee based our company’s performance as a whole, which is weighted at 90%, and the performance of certain subsidiaries that were acquired during the fiscal year ended March 31, 2018, which is weighted 10%.Committee. For the purposes of evaluating both company-wide growth and the growth and success of our acquisitions, the performance share unit awards consider a 3-year cumulative revenues growth rate compared to target and a 3-year cumulative adjusted operating income growth rate compared to target. Acquisitions are included in the growth calculations weighted based on the size of the acquired company. Target cumulative revenues growth and target cumulative AOI growth for acquired companies are based on financial plans presented to the Board for the acquiree during due diligence. The number of shares that can be earned under the award is determinedetermined by multiplying the target number of shares by the payout percentage, as summarized in the tables below. If minimums are not met, then no shares will be earned.
Company-wide targets:
3 Year Cumulative Revenue Growth versus Target | |||||||||||
3-Year Cumulative AOI Growth versus Target |
| <10% |
| 0% (Target) |
| 4% |
| 12% |
| 20% | |
<10% | 0% | ||||||||||
0% (Target) | 100% | ||||||||||
8% | 200% | ||||||||||
14% | 300% | ||||||||||
20% | 400% | ||||||||||
Targets for subsidiaries defined under the 2019 performance award plan:
3 Year cumulative Revenue Growth versus Target | |||||||||||
3-Year Cumulative AOI Growth versus Target |
| <10% |
| 0% (Target) |
| 8% |
| 12% |
| 20% | |
<10% | 0% | ||||||||||
0% (Target) | 100% | ||||||||||
6% | 200% | ||||||||||
14% | 300% | ||||||||||
20% | 400% | ||||||||||
| 3-Year Cumulative AOI Growth versus Target (70% weight) | 3 Year Cumulative Revenue Growth versus Target (30% weight) | ||||||
6% (Minimum) | 9% (Target) | 13% (Maximum) | |||||
7% (Minimum) | 50% | ||||||
11% (Target) | 100% | ||||||
17% (Maximum) | 200% | ||||||
The Compensation Committee utilized revenues growth and adjusted operating incomeAOI growth as elements in both our Short-Term Incentive Plan and our Long-Term Incentive Plan. When designing our 20192020 executive compensation program, the Compensation Committee evaluated several performance metrics for the purposes of our incentive programs and determined that because revenues growth and AOI are instrumental in driving the company’s performance and stockholder value creation, these measuremeasures remained appropriate for both the Short-Term Incentive Plan as a measurement of success in a single year and for the Long-Term Incentive Plan, which rewards creation of long-term shareholder value.
No PSU awards granted in previous periods were scheduled to vest or be paid out during the year ended March 31, 2020.
20192020 Non-Qualified Stock Options
Annual non-qualified stock options were granted to our NEOs on April 2, 2018.June 10, 2019. These awards were granted with an exercise price of $142.40,$203.54, the closing price on the grant date. The options vest ratably on each of the first fivefour anniversaries of the grant date, subject to the NEOs’ continued service in his or her position through each vesting date. The stock options were granted with a 6-year term and are disclosed in the Grants of Plan Based Awards Table.Table below.
Other Long-Term Incentive Awards
Mr. Owens joined Mesa in March 2017 and was promoted to CEO in September 2017. In connection with his departure from his previous position, Mr. Owens received restricted stock units to compensate for equity compensation forfeited upon leaving his previous company, “make-whole awards.” Mr. Owens received ana special award of 5,1605,000 restricted stock units on June 5, 2018.15, 2019 at the recommendation of Deloitte and with the intention of aligning his compensation over the vesting period with benchmarked peers, giving consideration to Mesa's size, as well as acquisition and growth objectives. The grant date fair value of the restricted stock units was $167.57$202.39 per unit, the closing price of our stock on the previous day.day, adjusted for the present value of dividends that will not be paid during the vesting period. The restricted stock units vest ratably beginning on SeptemberJune 15, 2018,2019, and each of the twofour anniversaries thereafter, subject to Mr. Owens’ continued service as CEO through each vesting date.
Mr. DiNoia joined Mesa in November 2017 and was named an executive officer effective October 24, 2018. In connection with his departure from his previous position, Mr. DiNoia received restricted stock units to compensate for equity compensation forfeited upon leaving his previous company, “make-whole awards.” Mr. DiNoia received an award of 450 restricted stock units on April 2, 2018. The grant date fair value of the restricted stock units was $142.40 per unit, the closing price of our stock price on April 2, 2018. The restricted stock units vest on each of the first five anniversaries of the grant date, subject to the Mr. DiNoia’s continued service in his position through each vesting date.
Other Benefits
In addition to the principal compensation elements described above, we provide our executive officers with access to the same benefits we provide all of our full-time employees. As such, the NEOs have available various health, welfare and retirement (401(k)) benefits. The Company matches 100% of the first 4% of a participant’s compensation that is contributed by an eligible participant to the 401(k) plan, subject to the applicable limits imposed by the Code.
Employment and Change-in-Control Agreements
We have provided our NEOs, other than Mr.Messrs. DiNoia and Archbold, with employment agreements. The employment agreements provide that in the case of an involuntary termination of the executive’s employment without cause or for good reason, the executive is entitled to (i) base salary continuation for the period of one year following termination (payable over a 12 month period), (ii) a prorated portion of the executive’s annual cash bonus for the year of termination, calculated based on actual performance of the Company for the relevant fiscal year, and (iii) continuation of Company-provided health benefits for the period of one year. In the event that an executive’s employment is terminated without cause or for good reason immediately prior to, or within two years following, a change of control, the executive is entitled to (i) base salary continuation for the period of two years (payable monthly), (ii) an amount equal to two times the greater of (A) the executive’s annual maximum cash bonus for the fiscal year in which the executive’s termination occurs or (B) the executive’s annual maximum cash bonus for the fiscal year immediately preceding the fiscal year in which the executive’s termination occurs, payable in monthly installments over the period of two years, and (iii) continuation of Company-provided health benefits for the period of two years. All separation benefits are subject to the executive’s execution and non-revocation of a general release of claims.
The employment agreements provide that if it is determined that any payment or distribution by the Company to the executive constitute an “excess parachute payment” under Section 280G of the Code, the Company will either (1) pay the total amount to the executive and he would be responsible for the 20% excise tax; or (2) reduce the executive’s payments such that the executive receives no “excess parachute payments,” whichever amount would give the executive the greater benefit on a net, after-tax basis.
In the case of an involuntary termination of the executive without cause or for good reason, other than in connection with a change in control, the vesting and other terms of all unvested equity awards will be at the discretion of the Board, while the terms, conditions and restriction of the original grant and respective equity plans for vest equity awards shall remain, provided however, that in the case of stock options, the executive may exercise vested options at any time; (1) within one month after such termination in the case of options granted prior to March 31, 2017;2018; and (2) prior to the natural termination date as stated in the original grant in the case of options granted after March 31, 2017.2018. In the case of an involuntary termination without cause or for good reason immediately prior to or within two years following a change of control, all unvested equity awards will immediately become fully vested, while all other terms, conditions and restrictions of the original grant and the respective equity plan for both vested and unvested equity awards shall remain, including the period during which equity awards may be exercisable.
Compensation and Risk Oversight
We believe that any risks arising from our compensation programs and policies are not reasonably likely to have a material adverse effect on the Company. The Company’s compensation programs and policies mitigate risk by significant weighting towards incentive compensation that provides a strong incentive for the executives to produce value for shareholders. The combination of performance measures for the Short-Term Incentive Plan and incentive equity awards, and the multiyear vesting schedules for time-vested equity awards encourage executives to maintain both a short and a long-term view with respect to Company performance. We maintain an Insider Trading Policy for all executives.
20182019 Shareholder Say-On-Pay Vote
We provide our shareholders with the opportunity to cast a non-binding, advisory vote on the compensation of our NEOs when required by SEC rules. At our annual meeting of shareholders in October 2018,November 2019, based upon total shares voted, our shareholders approved our NEOs’ compensation, with approximately 77%87% voting in favor and approximately 2%1% voting against (with approximately 4% abstaining and approximately 17%8% of broker non-votes). Accordingly, the Compensation Committee concluded that our executive compensation programs generally meet the expectations of our shareholders.
Tax Considerations
In designing our compensation programs, we take into account the tax, accounting and disclosure rules associated with various forms of compensation, although the design of our programs is focused primarily on attracting and retaining the top talent in our industry and incentivizing those individuals to execute on the Company’s business strategy and to increase shareholder value.
For tax years beginning on or after January 1, 2018, the Tax Cuts and Jobs Act of 2017 generally eliminated the exception to the non-deductibility of compensation in excess of $1 million per year paid to certain executive officers of the Company (“covered employees”) under Section 162(m) of the Code for certain qualified performance-based compensation, and expanded the scope of “covered employees” whose compensation may be subject to this deduction limit to include the Company’s chief financial officer and former covered employees of the Company for tax years beginning after December 31, 2016. We intend to design programs that recognize a range of performance criteria important to our success, even though compensation paid under such programs may not be deductible.
Under Section 280G and Section 4999 of the Code, compensation that is granted, accelerated or enhanced upon the occurrence of a change in control may give rise, in whole or in part, to “excess parachute payments” and, to such extent, will be non-deductible by the Company and will be subject to a 20% excise tax payable by the executive. Our compensation arrangements do not provide for gross-ups for this excise tax.
Section 409A of the Code requires that nonqualified deferred compensation be deferred and paid under plans or arrangements that satisfy the requirements of the statute with respect to the timing of deferral elections, the timing of payments and certain other matters. Failure to satisfy these requirements can expose our employees and other service providers to accelerated income tax liabilities and penalty taxes and interest on their vested compensation under such plans. We design our compensation programs with the intent that they comply with or be exempt from Section 409A of the Code, although there is no guarantee that any particular element of compensation will, in fact, be so compliant or exempt. Our compensation arrangements do not provide for gross-ups for any penalty taxes or interest that may be imposed under Section 409A of the Code.
Executive Compensation
Summary Compensation Table
The following table lists compensation awarded to or earned by the NEOs for the years ended March 31, 2020, 2019 2018 and 2017.2018.
Name and Principal Position | Year | Salary | Stock Awards(1) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | Year | Salary | Stock Awards(1) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | ||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (i) | (j) | (b) | (c) | (e) | (f) | (g) | (i) | (j) | ||||||||||||||||||||||||||||||||||||
Gary Owens | 2019 | $ | 520,000 | $ | 1,860,489 | $ | 265,800 | $ | 603,500 | $ | 20,800 | $ | 3,270,589 | 2020 | $ | 600,000 | $ | 1,654,286 | $ | 644,345 | $ | 577,800 | $ | 9,538 | $ | 3,485,969 | ||||||||||||||||||||||||
CEO and President | 2018 | 416,851 | -- | 92,480 | 172,875 | 323,674 | 1,005,880 | 2019 | 520,000 | 1,860,489 | 265,800 | 603,500 | 20,800 | 3,270,589 | ||||||||||||||||||||||||||||||||||||
2017 | 10,959 | 860,860 | 1,014,300 | 11,538 | 329 | 1,897,986 | 2018 | 416,851 | -- | 92,480 | 172,875 | 323,674 | 1,005,880 | |||||||||||||||||||||||||||||||||||||
John Sakys | 2019 | 300,000 | 322,293 | 132,900 | 260,000 | 12,000 | 1,027,193 | 2020 | 374,000 | 267,246 | 264,960 | 208,008 | 14,391 | 1,128,605 | ||||||||||||||||||||||||||||||||||||
Chief Financial Officer | 2018 | 263,596 | -- | 135,800 | 108,000 | 10,544 | 517,940 | 2019 | 300,000 | 322,293 | 132,900 | 260,000 | 12,000 | 1,027,193 | ||||||||||||||||||||||||||||||||||||
2017 | 254,552 | -- | 127,650 | 95,280 | 7,637 | 485,119 | 2018 | 263,596 | -- | 135,800 | 108,000 | 10,544 | 517,940 | |||||||||||||||||||||||||||||||||||||
Greg DiNoia | 2019 | 311,345 | 257,070 | 71,766 | 214,000 | 12,454 | 866,635 | 2020 | 341,285 | 204,828 | 202,983 | 144,328 | 5,545 | 898,969 | ||||||||||||||||||||||||||||||||||||
SVP of Commercial | 2018 | 117,400 | 193,550 | -- | 58,558 | 4,696 | 374,204 | |||||||||||||||||||||||||||||||||||||||||||
Operations | 2017 | -- | -- | -- | -- | -- | -- | |||||||||||||||||||||||||||||||||||||||||||
SVP of Commercial Operations | 2019 | 311,345 | 257,070 | 71,766 | 214,000 | 12,454 | 866,635 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 117,400 | 193,550 | -- | 58,558 | 4,696 | 374,204 | ||||||||||||||||||||||||||||||||||||||||||||
Brian Archbold (5) | 2020 | 278,460 | 139,178 | 138,023 | 134,180 | 11,036 | 700,877 | |||||||||||||||||||||||||||||||||||||||||||
SVP of Continuous Improvement | ||||||||||||||||||||||||||||||||||||||||||||||||||
(1) | The amounts reported in the Stock Awards column reflect the grant date fair value of stock awards determined pursuant to ASC Topic 718. The grant date fair values have been determined based on the assumptions and methodologies set forth in our Form 10-K (Note 11: Stock Transactions and Stock-Based Compensation) for the year ended March 31, 2020. The grant date fair value for PSUs is reported based upon the probable outcome of the performance conditions at the target level on the grant date. The value of the annual PSU awards granted in fiscal year 2019, assuming achievement of the maximum performance level of 400%, would have been: Mr. Owens: $3,983,313; Mr. Sakys: $1,289,173; Mr. DiNoia $771,960. The value of the annual PSU awards granted in fiscal year 2020, assuming achievement of the maximum performance level of 200%, would have been: Mr. Owens: $1,300,072; Mr. Sakys: $534,492; Mr. DiNoia $409,656; and Mr. Archbold: $278,356. |
(2) | The amounts reported in the Option Awards column represent the grant date fair value of nonqualified stock option awards granted under the 2014 Equity Plan to each of the NEOs, calculated in accordance with ASC Topic 718. The grant date fair values have been determined based on the assumptions and methodologies set forth in the Company’s Form 10-K (Note 11: Stock Transactions and Stock-Based Compensation) for the year ended March 31, 2020. |
(3) | The amounts reported in the Non-Equity Incentive Plan Compensation column reflect the amounts earned by each NEO under the Company’s Short-Term Incentive Plan. |
(4) | The amounts reported in the All Other Compensation column reflect 401(k) matching funds. The amount reported for Mr. Owens in 2018 consists of (i) reimbursed moving expenses in the amount of $311,748, and (ii) 401(k) matching funds in the amount of $11,926. | |
| (5) | Mr. Archbold was promoted to an NEO position in fiscal year 2020. |
Grant of Plan-based Awards in Fiscal Year 20192020
The following table sets forth certain information with respect to grants of plan-based awards for the fiscal year ended March 31, 20192020 with respect to our NEOs.
Estimated future payments under non-equity incentive plan awards (1) | Estimated possible payouts under equity incentive plan awards (2) | Estimated future payments under non-equity incentive plan awards (1) | Estimated possible payouts under equity incentive plan awards (2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Award Description | Threshold ($) | Target ($) | Maximum ($) | Threshold | Target | Maximum | Number of Securities Underlying Awards (3) | Grant Date Fair Value of Stock Awards ($) | Number of Securities Underlying Options (4) | Exercise or Base Price of Option Awards ($/sh) | Grant Date Fair Value of Stock Option Awards ($) | Grant Date | Award Description | Threshold ($) | Target ($) | Maximum ($) | Threshold (# shares) | Target (# shares) | Maximum (# shares) | Number of Securities Underlying Awards (3) | Grant Date Fair Value of Stock Awards ($) (6) | Number of Securities Underlying Options (4) | Exercise or Base Price of Option Awards ($/sh) | Grant Date Fair Value of Stock Option Awards ($) (5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gary Owens | n/a | Short-term Incentive Plan | $ | -- | $ | 425,000 | $ | 709,750 | n/a | Short-term Incentive Plan | -- | 540,000 | 1,080,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6/5/2018 | Performance Shares | -- | 5,160 | 20,640 | 6/10/2019 | Performance Shares | -- | 3,218 | 6,436 | 650,036 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6/5/2018 | Restricted Stock Units | 5,160 | 864,661 | 6/15/2019 | Restricted Stock Units | 5,000 | 1,004,250 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/2/2018 | NQ Options | 5,000 | 142.40 | 265,800 | 6/10/2019 | NQ Options | 9,939 | 203.54 | 644,345 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John Sakys | n/a | Short-term Incentive Plan | -- | 180,000 | 300,600 | n/a | Short-term Incentive Plan | -- | 194,400 | 388,800 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6/5/2018 | Performance Shares | -- | 1,670 | 6,680 | 6/10/2019 | Performance Shares | -- | 1,323 | 2,646 | 267,246 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/2/2018 | NQ Options | 2,500 | 142.40 | 132,900 | 6/10/2019 | NQ Options | 4,087 | 203.54 | 264,960 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Greg DiNoia | n/a | Short-term Incentive Plan | -- | 147,900 | 246,993 | n/a | Short-term Incentive Plan | -- | 153,578 | 307,156 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6/5/2018 | Performance Shares | -- | 1,000 | 4,000 | 6/10/2019 | Performance Shares | -- | 1,014 | 2,028 | 204,828 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/2/2018 | Restricted Stock Units | 450 | 64,080 | 6/10/2019 | NQ Options | 3,131 | 203.54 | 202,983 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brian Archbold | n/a | Short-term Incentive Plan | -- | 111,384 | 222,768 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/2/2018 | NQ Options | 1,350 | 142.40 | 71,766 | 6/10/2019 | Performance Shares | -- | 689 | 1,378 | 139,178 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6/10/2019 | NQ Options | 2,129 | 203.54 | 138,023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) | Each executive officer was eligible for a cash award to be paid under our short-term incentive bonus plan, described more fully in the “Short-Term Incentive Plan” discussion above. | |
(2) | All equity awards are denominated in shares of common stock and were granted under the 2014 Equity Plan. The awards vest both based on our achievement of specific performance criteria for the three-year period from April 1, | |
| (3) | Stock awards are reported at aggregate grant date fair value, as determined under applicable accounting standards. The holder of the restricted stock unit award does not have any voting, dividend, or other ownership rights in the shares of common stock subject to the award unless and until the award vests and the shares are issued. | |
| (4) | All equity and option awards are denominated in shares of common stock and were granted under the 2014 Equity Plan. | |
| (5) | Options vest ratably over a | |
| (6) | The grant date fair value for PSUs is reported based upon the probable outcome of the performance conditions (target) at the grant date. |
Outstanding Equity Awards at March 31, 20192020
The following table sets forth certain information with respect to outstanding equity awards of our NEOs as of March 31, 2019.2020.
Option Awards | Stock Awards | ||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or other Rights that have not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or other Rights that have not Vested ($) | |||||||||
Gary Owens | -- | (7) | 5,000 | $ 142.40 | 4/2/2024 | 5,160 | (1) | $ 1,189,380 | (6) | ||||||
| 400 | (8) | 1,600 | $ 136.42 | 9/1/2023 | 3,440 | (2) | $ 792,920 | (6) | ||||||
6,000 | (9) | 15,000 | $ 122.98 | 3/20/2025 | 5,000 | (3) | $ 1,152,500 | (6) | |||||||
John Sakys | -- | (7) | 2,500 | $ 142.40 | 4/2/2024 | 1,670 | (1) | $ 384,935 | (6) | ||||||
700 | (10) | 2,800 | $ 122.66 | 4/3/2023 | |||||||||||
1,840 | (10) | 2,760 | $ 97.78 | 4/1/2022 | |||||||||||
3,212 | (11) | 4,288 | $ 70.56 | 4/1/2023 | |||||||||||
4,284 | (11) | 3,216 | $ 89.70 | 4/1/2022 | |||||||||||
3,800 | (11) | -- | $ 51.85 | 4/1/2023 | |||||||||||
3,500 | (12) | -- | $ 48.72 | 10/29/2022 | |||||||||||
Greg DiNoia | -- | (7) | 1,350 | $ 142.40 | 4/2/2024 | 1,000 | (1) | $ 230,500 | (6) | ||||||
450 | (4) | $ 103,725 | (6) | ||||||||||||
1,120 | (5) | $ 258,160 | (6) | ||||||||||||
Option Awards | Stock Awards | ||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or other Rights that have not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or other Rights that have not Vested ($) | |||||||||||||||
Gary Owens | -- | (9) | 9,939 | 203.54 | 6/10/2025 | 5,000 | (1) | 1,129,750 | (8) | ||||||||||||
| 1,000 | (10) | 4,000 | 142.40 | 4/2/2024 | 2,092 | (2) | 422,523 | (8) | |||||||||||||
| 800 | (11) | 1,200 | 136.42 | 9/1/2023 | 18,834 | (3) | 3,634,774 | (8) | |||||||||||||
| 9,000 | (12) | 12,000 | 122.98 | 3/20/2025 | 1,720 | (4) | 388,634 | (8) | |||||||||||||
| 4,000 | (5) | 903,800 | (8) | ||||||||||||||||||
John Sakys | -- | (9) | 4,087 | 203.54 | 6/10/2025 | 860 | (2) | 173,710 | (8) | ||||||||||||
| 500 | (10) | 2,000 | 142.40 | 4/2/2024 | 6,096 | (3) | 1,176,370 | (8) | |||||||||||||
| 1,400 | (13) | 2,100 | 122.66 | 4/3/2023 | |||||||||||||||||
| 2,760 | (13) | 1,840 | 97.78 | 4/1/2022 | |||||||||||||||||
| 4,283 | (14) | 3,217 | 70.56 | 4/1/2023 | |||||||||||||||||
| 5,355 | (14) | 2,145 | 89.70 | 4/1/2022 | |||||||||||||||||
| 3,800 | (14) | -- | 51.85 | 4/1/2023 | |||||||||||||||||
| 2,500 | (15) | -- | 48.72 | 10/29/2022 | |||||||||||||||||
Greg DiNoia | -- | (9) | 3,131 | 203.54 | 6/10/2025 | 659 | (2) | 133,138 | (8) | ||||||||||||
| 270 | (10) | 1,080 | 142.40 | 4/2/2024 | 3,650 | (3) | 704,414 | (8) | |||||||||||||
| 360 | (6) | 81,342 | (8) | ||||||||||||||||||
| 840 | (7) | 189,798 | (8) | ||||||||||||||||||
Brian Archbold | -- | (9) | 2,129 | 203.54 | 6/10/2025 | 448 | (2) | 90,466 | (8) | ||||||||||||
| 210 | (17) | 840 | 142.40 | 1/8/2024 | 2,555 | (3) | 493,089 | (8) | |||||||||||||
| 145 | (10) | 435 | 129.10 | 4/2/2024 | 280 | (6) | 63,266 | (8) | |||||||||||||
| (1) | Represents restricted stock units granted on June 15, 2019 as make whole awards. The RSUs granted to Mr. Owens vest in equal amounts beginning on June 15, 2020, and on each of the four anniversaries thereafter. | |
| (2) | Represents shares issuable under the performance share awards granted in 2020, at the next level of achievement in excess of management's management's assessment of probable achievement of specific performance criteria for the three-year period from April 1, 2019 through March 31, 2022. | |
| (3) | Represents shares issuable under the performance share awards granted in 2019, | |
| Represents restricted stock |
| Represents restricted stock awards granted on March 20, 2017 as inducement awards. The restricted stock units vest ratably on each of the first seven anniversaries of the grant date, subject Mr. Owens’ continued service as CEO through each vesting date. |
| Represents annual non-NEO restricted stock unit granted on April 2, 2018. The restricted stock units vest ratably beginning on June 15, 2019, and on each of the subsequent four anniversaries following that date, subject |
| Represents restricted stock unit awards granted on |
| Based on the closing stock price of our common stock on March |
| (9) | Non-qualified stock options granted on June 10, 2019. The non-qualified stock options vest ratably on each of the first four anniversaries of the grant date, subject to the officers' continued service through each vesting date. | |
| Non-qualified stock options granted on April 2, 2018. The non-qualified stock options vest ratably on each of the first five anniversaries of the grant date, subject the officers’ continued service through each vesting date. |
| Represents non-qualified stock options granted on September 1, 2017 as inducement awards. The non-qualified stock options vest ratably on each of the first five anniversaries of the grant date, subject Mr. Owens’ continued service as CEO through each vesting date. |
| Represents non-qualified stock options granted on March 20, 2017 as inducement awards in connection with acceptance of the CEO role. The non-qualified stock options vest ratably on each of the first seven anniversaries of the grant date, subject Mr. Owens’ continued service as CEO through each vesting date. |
| Represents stock options granted as annual awards. The stock options vest ratably on each of the first five anniversaries of the grant date, subject to Mr. Sakys’ continued service through each vesting date. |
| Represents stock options granted as annual awards. The stock options vest ratably on each of the first seven anniversaries of the grant date, subject to Mr. Sakys’ continued service through each vesting date. |
| Represents stock options granted. The non-qualified stock awards vest ratably on each of the first four anniversaries of the grant date, subject to Mr. Sakys’ continued service through each vesting date. | |
| (16) | Represents restricted stock unit awards granted on January 6, 2018 as inducement awards. The RSUs granted to Mr. Archbold vest in equal amounts on each of the first five anniversaries of the grant date, subject to Mr. Archbold's continued service through each vesting date. | |
| (17) | Represents non-qualified stock options granted on January 8, 2018 as inducement awards. The non-qualified options vest ratably on each of the first five anniversaries of the grant date, subject to Mr. Archbold's continued service through each vesting date. |
Options Exercised and Stock Vested
The following table sets forth the aggregate dollar value realized by the NEOs upon the exercise of stock options and the vesting of stock awards during the fiscal year ended March 31, 2019.2020.
Option Awards | Stock Awards | |||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of shares acquired on vesting (#) (2) | Value Realized on Vesting ($) (3) | ||||
Gary Owens | 1,000 | $ 228,030 | ||||||
1,720 | $ 327,832 | |||||||
John Sakys | 500 | $ 72,890 | ||||||
1,000 | $ 154,780 | |||||||
Greg DiNoia | 280 | $ 55,157 | ||||||
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (1) | Number of shares acquired on vesting (#) (2) | Value Realized on Vesting ($) (3) | ||||||||||||
Gary Owens | 1,000 | 197,350 | ||||||||||||||
| 1,720 | 407,279 | |||||||||||||||
John Sakys | 1,000 | 168,370 | ||||||||||||||
Greg DiNoia | 370 | 82,092 | ||||||||||||||
Brian Archbold | 148 | 33,406 | ||||||||||||||
| (1) | Determined by multiplying the number of options that were exercised during the year ended March 31, | |
(2) | Reflects the number of shares of Mesa Laboratories common stock acquired on vesting of restricted stock units. | |
(3) | Determined by multiplying the number of restricted stock units by the market value of the underlying shares on the vesting date. |
Potential Payments upon Termination or Change-in-Control
Name | Payment Type | Termination for Cause | Termination without Cause or for Good Reason | Termination without Cause or for Good Reason upon or after a Change in Control (4) | ||||
Gary Owens | Cash Payment (1) | $ -- | $ 1,060,000 | $ 2,843,600 | ||||
Equity (2) | -- | -- | 6,021,380 | |||||
Benefits Continuation (3) | -- | 24,420 | 24,420 | |||||
TOTAL | -- | 1,084,420 | 8,889,400 | |||||
John Sakys | Cash Payment (1) | -- | 494,400 | 1,249,296 | ||||
Equity (2) | -- | -- | 5,163,787 | |||||
Benefits Continuation (3) | -- | 24,584 | 24,584 | |||||
TOTAL | -- | 518,984 | 6,437,667 | |||||
Greg DiNoia (5) | Cash Payment (1) | -- | -- | -- | ||||
Equity (2) | -- | -- | 711,320 | |||||
Benefits Continuation (3) | -- | -- | -- | |||||
TOTAL | -- | -- | 711,320 |
Name | Payment Type | Termination for Cause | Termination without Cause or for Good Reason | Termination without Cause or for Good Reason upon or after a Change in Control (4) | |||||||||
Gary Owens | Cash Payment (1) | $ | -- | $ | 1,140,000 | $ | 2,280,000 | ||||||
Equity (2) | -- | 1,514,489 | 9,461,394 | ||||||||||
Benefits Continuation (3) | -- | 13,799 | 13,799 | ||||||||||
TOTAL | -- | 2,668,288 | 11,755,193 | ||||||||||
John Sakys | Cash Payment (1) | -- | 568,400 | 1,136,800 | |||||||||
Equity (2) | -- | 490,154 | 5,450,522 | ||||||||||
Benefits Continuation (3) | -- | 9,797 | 9,797 | ||||||||||
TOTAL | -- | 1,068,351 | 6,597,119 | ||||||||||
Greg DiNoia (5) | Cash Payment (1) | -- | -- | -- | |||||||||
Equity (2) | -- | 293,506 | 1,291,650 | ||||||||||
Benefits Continuation (3) | -- | -- | -- | ||||||||||
TOTAL | -- | 293,506 | 1,291,650 | ||||||||||
Brian Archbold (5) | Cash Payment (1) | -- | -- | -- | |||||||||
Equity (2) | -- | 205,454 | 908,477 | ||||||||||
Benefits Continuation (3) | -- | -- | -- | ||||||||||
TOTAL | -- | 205,454 | 908,477 | ||||||||||
(1) | This amount is based on the NEO’s salary as of March 31, | |
(2) | If terminated without cause or for good reason, the executive receives the value of any vested awards, which is not an incremental benefit to the | |
| (3) | Benefits continuation is based on the actual company-paid amount of health benefits for the executive during the most recent fiscal year. | |
| (4) | Reflects amounts the executive may receive if both a change in control of Mesa Laboratories occurs and the executive’s employment is terminated (other than for cause or by the executive for good reason). If the Termination occurs immediately prior to or within twenty four (24) months following a Change of Control, all unvested Equity Awards will immediately become 100% vested, while all other terms, conditions and restrictions of the original grant and the respective Equity Plan(s) for both vested and unvested Equity Awards shall remain, including the period during which Equity Awards may be exercisable. | |
| (5) | Mr. DiNoia |
Pay Ratio Disclosure
Under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to provide the ratio of the annual total compensation of Mr. Owens, to the annual total compensation of the median employee of the Company (the “Pay Ratio Disclosure”).
For the year ended March 31, 2019,2020, the total annual compensation of the median annual total compensation of all employeesemployee of the Company and its consolidated subsidiaries (other than the Chief Executive Officer) was $50,054.$58,047. Based upon the total compensation for the year ended March 31, 20192020 reported for Mr. Owens of $3,270,589$3,485,969 our ratio of CEO to median employee pay was 6560 to 1.
For our fiscal year 20192020 ratio, we used a median compensated employee identified pursuant to our fiscal year 2018 identification process, as we believe the changes to our employee population and compensation have not significantly impacted our ratio. For purposes of identifying our fiscal year 2018 median compensated employee, we took into account salary, bonus, and grant date fair value of stock options and RSUs granted during the year for all our employees as of March 31, 2019.2018. We annualized this compensation for employees who did not work the entire year, except for employees designated as temporary.
COMPENSATION COMMITTEE REPORT
This report is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to the SEC’s proxy rules or to the liabilities of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed to be incorporated by reference into any prior or subsequent filing by Mesa Labs under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent Mesa Labs specifically incorporates this report by reference therein.
The Compensation Committee of Mesa Laboratories, Inc's Board has reviewed and discussed with management the Compensation Discussion and Analysis set forth above and, based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
The foregoing report is given by the following members of the Compensation Committee:
The Compensation Committee
David M. Kelly, Committee ChairmanChairperson
Evan C. Guillemin
David B. Perez
ITEM 2
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
As required by Section 14A of the Securities Exchange Act of 1934, we are asking shareholders to cast an advisory vote to approve the compensation of our executive officers as disclosed in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives shareholders the opportunity to endorse or not endorse our executive compensation programs and policies and the compensation paid to our executive officers. 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.
Executive Compensation Disclosures
We urge shareholders to read the Compensation Discussion and Analysis section above, 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.
Say-on-Pay Resolution
The Compensation Committee of our Board of Directors believes that our executive compensation programs continue to emphasize performance-oriented components that encourage and reward strong operating and financial performance and stock price gains, and that have aligned the interests of our officer team with those of our shareholders. Accordingly, 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. The say-on-pay vote is advisory and therefore will not be binding on the Compensation Committee, the Board of Directors, or Mesa.Mesa Labs. However, the Compensation Committee and Board will review the voting results and take them into consideration when making future decisions regarding executive compensation.
THE BOARD OF DIRECTORS RECOMMENDS TO OUR SHAREHOLDERS THAT THEY VOTE “FOR”
APPROVAL, ON AN ADVISORY BASIS, OF OUR EXECUTIVE COMPENSATION
AS DESCRIBED IN THIS PROXY STATEMENT.
ITEM 3
RATIFICATION OF THE APPOINTMENT OF Plante &
Moran, PLLC AS INDEPENDENT AUDITORS
The Audit Committee, which is responsible for the appointment, compensation and oversight of our independent auditors, has again engaged Plante & Moran, PLLC to serve as our independent auditors to audit our consolidated financial statements for the year ending March 31, 2020.2021. Although it is not required to do so, our Board of Directors wishes to submit the appointment of Plante & Moran, PLLC for shareholder ratification at the Annual Meeting. If shareholders do not ratify the appointment of Plante & Moran, PLLC, the committee will reevaluate the appointment. Even if the appointment is ratified by our shareholders, the Audit Committee may in its sole discretion terminate the appointment at any time during the year, if it determines that such a change would be in the best interests of our Company and our shareholders. A representative of Plante & Moran, PLLC 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.
The Audit Committee annually evaluates the performance of our independent registered public accounting firm, including the senior audit engagement team, and determines whether to reengage the current independent auditors or consider other audit firms. Factors considered by the committee in deciding whether to retain include:
| ● | Plante & Moran, PLLC's capabilities considering the scope and complexity of our business, and the resulting demands placed on Plante & Moran, PLLC in terms of technical expertise and knowledge of our industry and business; | |
| ● | the quality and candor of Plante & Moran, PLLC's communications with the committee and management; | |
| ● | Plante & Moran, PLLC's independence; | |
| ● | the quality and efficiency of the services provided by Plante & Moran, PLLC, including input from management on their performance and how effectively they demonstrated its independent judgment, objectivity and professional skepticism; | |
| ● | external data on audit quality and performance, including recent Public Company Accounting Oversight Board (PCAOB) reports on Plante & Moran, PLLC and its peer firms; and | |
| ● | the appropriateness of Plante & Moran, PLLC's fees, tenure as our independent auditor, including the benefits of a longer tenure, and the controls and processes in place that help ensure Plante & Moran, PLLC's continued independence. |
Based on this evaluation, the Audit Committee and the Board believe that retaining Plante & Moran, PLLC to serve as our independent registered public accounting firm for the fiscal year ending March 31, 2020,2021, is in the best interests of Mesa Labs and our shareholders.
The Audit Committee also oversees the process for, and ultimately approves, the selection of our independent registered public accounting firm’s lead engagement partner at the five-year mandatory rotation period. Prior to the mandatory rotation period, at the committee’s instruction, Plante & Moran, PLLC will select candidates to be considered for the lead engagement partner role, who are then interviewed by members of our management. After considering the candidates recommended by Plante & Moran, PLLC, management makes a recommendation to the committee regarding the new lead engagement partner. After discussing the qualifications of the proposed lead engagement partner with the current lead engagement partner, the members of the committee, individually and/or as a group, will interview the leading candidate, and the committee then considers the appointment and approves the selection as a committee. A new lead engagement partner was appointed for the 20172018 audit; the next change in lead engagement partner after the current five-year rotation period is expected to occur for the 20222023 audit.
The Audit Committee charter sets out procedures that the companyCompany must follow when retaining the independent auditor to perform audit, review and attest engagements and any engagements for permitted non-audit services. All services performed by Plante & Moran, PLLC for the years ended March 31, 20192020 and 20182019 were pre-approved by the Audit Committee in accordance with this policy, following a determination by the committee that the fees to be paid to Plante & Moran, PLLC in each year, including in connection with non-audit services, were appropriate, necessary and cost-efficient in the management of our business, and did not present a risk of compromising the independence of Plante & Moran, PLLC as our independent auditors.
Plante & Moran, PLLC (formerly EKS&H LLLP, Denver, Colorado), has conducted the audits of our accounting records since 1986 and the Audit Committee has selected the same firm to audit our accounting records for the year ending March 31, 2020.2021.
The following table presents fees for professional services rendered by Plante & Moran PLLC, our independent registered public accounting firm, for the audit of our financial statements, and the fees for other services:
Year Ended March 31, | Year Ended March 31, | |||||||||||||||
Type of Fees | 2019 | 2018 | 2020 | 2019* | ||||||||||||
Annual audit and quarterly review | $ | 317,600 | $ | 357,712 | $ | 481,579 | $ | 317,600 | ||||||||
Audit-related fees (acquisitions) | 22,500 | -- | ||||||||||||||
Tax fees | 1,590 | -- | ||||||||||||||
Audit-related fees | 368,374 | 48,957 | ||||||||||||||
Tax-related fees | 89,500 | 1,590 | ||||||||||||||
All other fees | 26,457 | 9,035 | -- | -- | ||||||||||||
Total | $ | 368,146 | $ | 366,747 | $ | 939,453 | $ | 368,147 | ||||||||
* 2019 categorization was amended to conform with current year presentation.
Fees for audit services include fees associated with the annual audit, including the audit of internal control over financials reporting, the reviews of our quarterly reports of Form 10-Q, and comfort letters associated with our financing transactions. Audit-related fees principally include work performed in connection with acquisitions, accounting consultations, audits in connection with consummated acquisitions, employee benefit plan audits, and out-of-pocket expenses for audit related services rendered during the year. Tax fees consist primarily of transfer pricing work.
THE BOARD OF DIRECTORS RECOMMENDS TO OUR SHAREHOLDERS THAT THEY VOTE “FOR”
THE RATIFICATION OF THE APPOINTMENT OF Plante & Moran, PLLC AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE YEAR ENDING MARCH 31, 2020.2021.
AUDIT COMMITTEE REPORT
The Audit Committee is composed of three non-employee directors of the Company. All members are independent as defined under the Nasdaq Listing Rules. The Audit Committee held four meetings during the year ended March 31, 2019.2020. The Audit Committee operates under a written charter adopted by our Board of Directors.
In connection with the March 31, 2019,2020, financial statements, the Audit Committee (1) reviewed and discussed the audited financial statements as of March 31, 20192020 and for the year then ended with management; (2) discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standards 1301, Communication with Audit Committees and matters required by applicable requirements of the PCAOB and SEC; (3) received the written disclosures and the letter from the independent registered public accounting firm required by Independence Standards Board Standard No. 1, and (4) discussed with the independent registered public accounting firm 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 our Annual Report on Form 10-K for the year ended March 31, 2019,2020, for filing with the Securities and Exchange Commission.
AUDIT COMMITTEE
Evan C. Guillemin, Committee ChairmanChairperson
John B. Schmieder
David B. Perez
PROPOSALS OF SHAREHOLDERS
Any shareholder of record of the CompanyShareholders who desireswish to submit a proper proposalpresent proposals for inclusion in theour proxy materials relatingfor the 2021 Annual Meeting may do so by following the procedures prescribed in Rule 14a-8 under the Exchange Act and in our bylaws. To be timely, a shareholder’s notice shall be delivered to the 2020 Annual MeetingSecretary of Shareholders must do so in writing and it must be receivedthe Corporation at ourthe principal executive offices by March 31, 2020. The proponent must be a record or beneficial owner entitledof the Corporation not earlier than the close of business on the 90th day (Monday, May 30, 2021) and not later than the close of business on the 80th day (Wednesday. June 9, 2021) prior to vote at the nextfirst anniversary of the preceding year’s annual meeting; unless the date of the 2021 Annual Meeting on his proposal and must continue to own such security entitling him to vote throughis advanced by more than 30 days before or delayed by more than 60 days after August 28, 2020, or if the first public announcement of the date on which theof such annual meeting is held.less than 100 days prior to the date of such annual meeting, in which event the bylaws provide different notice requirements. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of a shareholder’s notice.
ANNUAL REPORT
The Annual Report to Shareholders concerning the operations of the Company during the year ended March 31, 2019,2020, including audited consolidated financial statements for the year then ended, and our Annual Report on Form 10-K for the year ended March 31, 20192020 are available on our website at www.mesalabs.com/investor-relations/. The Annual Report to Shareholders is not incorporated in this Proxy Statement and is not to be considered a part of the soliciting material.
OTHER BUSINESS
Our 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, WE WILL PROVIDE, WITHOUT CHARGE, A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 2019,2020, TO EACH SHAREHOLDER OF RECORD OR TO EACH SHAREHOLDER WHO OWNED OUR COMMON STOCK LISTED IN THE NAME OF A BANK OR BROKER, AS NOMINEE, AT THE CLOSE OF BUSINESS ON SEPTEMBER 13, 2019.JULY 7, 2020. ANY REQUEST BY A SHAREHOLDER FOR OUR ANNUAL REPORT ON FORM 10-K SHOULD BE MAILED TO OUR SECRETARY, MESA LABORATORIES, INC., 12100 WEST SIXTH AVENUE, LAKEWOOD, COLORADO 80228.
The above Notice and Proxy Statement are sent by order of the Board of Directors.
/s/ Gary M. Owens
| Gary M. Owens |
Chief Executive Officer
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 TUESDAY, NOVEMBER 5, 2019FRIDAY, AUGUST 28, 2020
The undersigned hereby appoints Gary M. Owens 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 September 13, 2019,July 7, 2020, at the Annual Meeting of Shareholders to be held on Tuesday, November 5, 2019,Friday, August 28, 2020, 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) |
J. | E. Guillemin | S. Hall | D. Kelly | G. Owens | D. Perez | J. Schmieder |
|
| J. |
(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 Plante & Moran, PLLC (“The Audit Firm”) as the Company’s independent registered public accounting firm for the year ending March 31, 20202021 (the “Ratification of Auditors Proposal”).
FOR | AGAINST | ABSTAIN |
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 The Audit Firm PROPOSED IN ITEM (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
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 |
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