DEF 14A of Mesa Laboratories Inc /Co/
Filed Aug 7, 2015 · FY20150001437749-15-015134
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS THE BOARD OF DIRECTORS RECOMMENDS TO THE SHAREHOLDERS THAT THEY VOTE “FOR” THE ELECTION OF SUCH NOMINEES. At the Annual Meeting, seven directors are to be elected. Each director will be elected for a one-year term or until his successor is elected and qualified. Shares represented by properly executed proxies will be voted, in the absence of contrary indication or revocation by the shareholder granting such proxy, in favor of the persons named below as directors, to hold office for the term stated in the preceding paragraph. The person named as proxy in the enclosed proxy has been designated by management and intends to vote for the election to the Board of Directors of the persons named below, each of whom is now a director of the Company. If the contingency should occur that any such nominee is unable to serve as a director, it is intended that the shares represented by the proxies will be voted, in the absence of contrary indication, for any substitute nominee that the Nominating Committee may designate. Management knows of no reason why any nominee would be unable to serve. The information presented herein with respect to the nominees was obtained in part from the respective persons, and in part from the records of the Company.
Information about Board of Directors Nominees
Information about Board of Directors Nominees In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes and skills that led our Board of Directors to the conclusion that he should serve as a director, we also believe that all of our director nominees display personal and professional integrity; broad-based business acumen; a high level of understanding of our business and our industry; strategic thinking and a willingness to share ideas; and have a diversity of experiences, expertise and background.
Nominees for Director
Nominees for Director The following table sets forth the names and ages of each of our directors as of April 9, 2015:
Nominees for Director
| Name | Age | Position | | H. Stuart Campbell (1) (3) | 85 | Chairman of the Board of Directors | | John J. Sullivan, Ph.D. | 62 | Chief Executive Officer, Director | | Michael T. Brooks (1) | 65 | Director | | Robert V. Dwyer(1) | 74 | Director | | Evan C. Guillemin (1) | 49 | Director | | David M. Kelly (1) | 73 | Director | | John B. Schmieder(1) (2) | 46 | Director |
Nominees for Director
(1) Member of the Audit, Compensation and Nominating and Governance committees. (2) Effective April 8, 2015, Luke R. Schmieder retired as director and Chairman of the Board of Directors. He was replaced as a director by John B. Schmieder. (3) Effective April 8, 2015, Mr. Campbell was elected as Chairman of the Board of Directors. H. Stuart Campbell has served as a director since May 1983 and devotes such time as is necessary to the affairs of the Company. Mr. Campbell owned and served as an officer of Highland Packaging Labs, Inc., Somerville, New Jersey (contract packaging business) until its sale in 2002. From 1977 through September 1982, he was a Company Group Chairman with Johnson & Johnson and served as Chief Executive Officer and Chairman of the Board of Directors of eight major corporate subsidiaries. From 1960 through September 1982, Mr. Campbell served in various capacities for Johnson & Johnson and Ethicon, Inc., a domestic subsidiary of Johnson & Johnson. Mr. Campbell received his Bachelor of Science degree from Cornell University in 1951. John J. Sullivan, Ph.D. was promoted to the position of Chief Executive Officer and President, and appointed to the Board of Directors in March 2009. Dr. Sullivan joined us in October 2004 in the role of Vice President of Sales and Marketing, and was promoted to the positions of President and Chief Operating Officer in 2006. In 1988, Dr. Sullivan joined Varian, Inc. (a major analytical instrument manufacturer) and served in various capacities in Research and Development, Sales and Marketing Management and in Business Development until 2004. In 1982, Dr. Sullivan joined the U.S. Food and Drug Administration’s Seattle District Laboratory as a Senior Research Scientist and worked there until 1988. From 1976 until 1980, Dr. Sullivan was employed as an Analytical Chemist at BioMed Research Labs (an independent research and testing laboratory). Dr. Sullivan received his Bachelor of Science degree in Biology from Western Washington University in 1976 and a Ph.D. degree in Food Science from the University of Washington in 1982. Michael T. Brooks has served as a director since October 1998 and devotes such time as is necessary to the affairs of the Company. Mr. Brooks was an independent manufacturer’s representative from 1982 to 1985, at which time he purchased an interest in Fiero Fluid Power, which he presently owns and operates. Fiero Fluid Power is a Rep/Distributor selling pneumatic and instrumentation equipment. While pursuing a career in fluid power, he received a Masters degree in Business Administration from the University of Denver in 1983. Mr. Brooks received his Bachelor of Arts degree in History from Ohio Wesleyan University in 1971. Robert V. Dwyer has served as a director since May 2006 and devotes such time as is necessary to the affairs of the Company. Mr. Dwyer served as President of our Raven Biological Laboratories operation until November 2010. Mr. Dwyer currently serves on the Board of Directors of American National Bank, based in Omaha, Nebraska. In addition, Mr. Dwyer holds ownership positions in other small business entities. Mr. Dwyer served as President and was the majority owner of Raven Biological Laboratories, Inc. and is also an Attorney at Law. Mr. Dwyer received his Bachelor of Arts in Philosophy degree from Creighton University in 1962, and he received his J.D. from Creighton University in 1964. Evan C. Guillemin has served as a director since February 2009 and devotes such time as is necessary to the affairs of the Company. Mr. Guillemin has served as Chief Financial Officer (“CFO”) and Associate Portfolio Manager at Select Equity Group Inc., a registered investment adviser based in New York City, since 2004. Mr. Guillemin also currently serves on the Board of Directors of Shake Shack, Inc. (NYSE: SHAK), and a privately held company. Prior to joining Select Equity Group, Mr. Guillemin served as CFO of Alloy Merchandising Group Inc., the successor to Delias Inc. Mr. Guillemin was an executive and board member of Delias Inc., a NASDAQ-traded specialty retailing company. He served as CFO and then Chief Operating Officer of Delias from 1996 to 2003, when the company was acquired by Alloy Inc. He received his Bachelor of Arts degree from Yale University in 1987 and a Master's degree in Business Administration with distinction from Harvard Business School in 1996. David M. Kelly has served as a director since October 2010 and devotes such time as is necessary to the affairs of the Company. Mr. Kelly currently serves as a member of the Board of Directors of Federated Investors, Inc. (NYSE: FII), Mestek (OTC: MCCK), and a privately held company. In 1995, Mr. Kelly joined Matthews International Corporation, where he served as Chairman of the Board, Chief Executive Officer and President until his retirement in 2007. From 1972 to 1995, Mr. Kelly was with Carrier Corporation and held a variety of executive positions, in the United States and in Asia, in marketing, finance, manufacturing and operations, including President of North America operations. He received a Bachelor of Science degree in Physics from Boston College in 1964, a Master’s degree in Molecular Biophysics from Yale in 1966, and a Masters of Business Administration from Harvard Business School in 1968. John B. Schmieder has served as a director since April 2015 and devotes such time as is necessary to the affairs of the Company. Mr. Schmieder has been the co-owner and operator of Community Acupuncture of Saint Louis since 2005 and Holistic Fitness since 2010. From 2008 to 2010, Mr. Schmieder also served as the president of the Acupuncture Association of Missouri. From 1995 to 2002, Mr. Schmieder served as an equity and financial analyst at Macy’s Corporation, George K. Baum &Co. and Citizens Funds (now Sentinel Investments). From 1990 to 1993 Mr. Schmieder served in various positions, including senior auditor, at Arthur Andersen & Co. He received a Bachelor of Administration in Business degree from the University of San Diego in 1990, a Master’s degree in Business Administration with emphasis in finance and corporate strategy from the University of Michigan in 1995 and a Master’s of Oriental Medicine from the New England School of Acupuncture in 2005. Unless otherwise indicated, no director has held any other directorships for the past five years. Directors are elected at each Annual Meeting and serve a one year term until a successor is duly elected and qualified at an appropriate Annual Meeting. Vacancies may be filled by an affirmative vote of the majority of the remaining directors. The Board of Directors met five times during the year ended March 31, 2015. Each director attended at least 75% of the Board of Director meetings, and at least 75% of the regular and special meetings of the committees on which they serve, either in person or telephonically. In addition, directors are required to prepare for each meeting by reviewing materials distributed in advance. There were, and are, no family relationships among the Named Executive Officers (“NEOs”), directors or any person chosen to become a director or executive officer other than: effective April 8, 2015, Luke R. Schmieder retired as a director and his son, John B. Schmieder was appointed as his replacement. Based 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 that director or executive officer.
Director Compensation
Director Compensation Each non-employee director is compensated separately for service on the Board of Directors and is reimbursed for expenses to attend Board of Director meetings. Chairs of the Audit, Compensation, and Nominating and Governance Committees are compensated separately for service on those committees. The following summarizes director compensation for the year ended March 31, 2015.
Director Compensation
| | Fees Earned or Paid in Cash | Option Awards(1) | Total | | Name | ($) | ($) | ($) | | (a) | (b) | (d) | (h) | | Michael T. Brooks | $22,000 | $33,142 | $55,142 | | H. Stuart Campbell | 23,000 | 33,142 | 56,142 | | Robert V. Dwyer | 22,000 | 33,142 | 55,142 | | Evan C. Guillemin | 24,000 | 33,142 | 57,142 | | David M. Kelly | 23,500 | 33,142 | 56,642 | | Luke R. Schmieder | 22,000 | 33,142 | 55,142 |
Director Compensation
| (1) 1,000 and 120 stock options were granted to each director on April 1, 2014 and October 2, 2014, respectively. We calculated these amounts in accordance with the provisions of Accounting Standards Codification (“ASC”) Section 718 – Compensation – Stock Compensation, using the Black-Scholes option-pricing model. |
Compensation Philosophy
| ● | motivate our executives to manage our business to meet our short and long-term objectives, and reward them for meeting these objectives. |
Benchmarking
Benchmarking 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. To help establish competitive compensation levels, the Compensation Committee examined executive compensation survey data, both base salaries and total cash compensation, from Economic Research Institute (“ERI”). The survey data was tailored to include only those U.S. public companies in the “Instrument Manufacturing” segment with revenues between $20 -- $50 million per year. The ERI survey included 90 public companies in the data set used to establish compensation statistics. This included companies that produced both medical devices and general electronic instruments, along with consumable supplies. The data was further adjusted for the geographic location of each NEO. The data from this analysis was used by the Compensation Committee as one factor in determining compensation levels for base salary and total compensation.
Short-term Incentive Plan
Short-term Incentive Plan Each NEO participates in our 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. For the purpose of the Short-term Incentive Plan, performance is measured by two variables: revenues growth and profit growth. These variables are considered by the Compensation Committee to be reliable indicators for the creation of long-term shareholder value. Bonus payouts under the Short-term Incentive Plan are tied directly to achievement of these revenues and profit growth targets for the year. If both the revenues and profit growth targets are exceeded by a substantial margin, the maximum bonus payments are set at between 50% and 91% of the base salary for the various NEOs. Of course, if our financial performance is poor, bonus payments could be at or near $0. 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. We do not disclose the specific target revenues and profit growth targets set forth in the Short-term Incentive Plan as we believe that the disclosure thereof would cause us competitive harm. Because we are not disclosing these target objectives, we are stating our assessment of how likely it will be for these targets to be achieved by our NEOs. Although achievement of our target objectives involves future performance and, therefore, is subject to uncertainties, the Compensation Committee believes it has established target objectives that are achievable with an appropriate amount of dedication and hard work and, therefore, it is more likely than not that each NEO will earn a bonus under the Short-term Incentive Plan.
Long-term Incentive Plan
Long-term Incentive Plan The Compensation Committee believes that it is in the best interest of our shareholders to provide long-term incentive to each NEO with ownership of our stock. Stock ownership by our NEOs directly ties their long-term compensation to the performance of our share price. To achieve this goal, we make stock option grants to each NEO at the time of hire and on an annual basis under our stock compensation plan. These grants are either incentive stock options and/or non-qualified stock options with a term of eight years. The grant price is set at 100% of the market price on the day of the grant and the options vest ratably over seven years. The awards may or may not have performance conditions associated with the vesting of the stock options. The number of stock options awarded is at the discretion of the Compensation Committee.
Other Benefits
Other Benefits Our philosophy is to provide only those other benefits to our named executives that are consistent with those generally offered to all of our other employees. As such, the NEOs have available various health, welfare and retirement (401(k)) benefits. Employment and Change-in-Control Agreements. We have provided certain of our NEOs with salary continuation agreements. Severance payments will be made 1) in the event of an involuntary separation of service without cause or a voluntary separation of service with good reason or 2) immediately prior to, or within 24 months after, a change in control for an involuntary termination without cause or a voluntary termination for good reason. Severance payments will be paid monthly for 12 months or 24 months, respectively, to include the individual’s then current monthly salary, and the same percentage of Company-paid health and life insurance benefits. Additionally, all outstanding unvested stock options, and any other equity-based awards that may be granted in the future, will vest immediately with the exercise period extended to the full term of the option (in case 1 above, the acceleration is subject to discretion of the Board of Directors). Nonqualified Deferred Compensation. We do not have any nonqualified defined contribution or deferred compensation plans. Post-Employment Compensation. We do not have any defined benefit plans, supplemental executive retirement plans or actuarial plans.
Summary Compensation Table
Summary Compensation Table The following table lists compensation awarded to or earned by our NEOs for the years ended March 31, 2015, 2014 and 2013.
Summary Compensation Table
| Name and Principal Position | Year | Salary | Option Awards(2) | Non-equity Incentive Plan Compensation(1) | All Other Compensation(3) | Total | | (a) | (b) | (c) | (f) | (g) | (i) | (j) | | John J. Sullivan, Ph.D. | 2015 | $316,488 | $114,823 | $287,000 | $9,495 | $727,806 | | CEO and President | 2014 | 302,495 | 96,702 | 253,000 | 9,075 | 661,272 | | | 2013 | 290,819 | 125,317 | 200,000 | 8,725 | 624,861 | | John V. Sakys | 2015 | 214,335 | 56,347 | 119,000 | 6,430 | 396,112 | | Chief Financial Officer | 2014 | 204,997 | 28,485 | 113,000 | 6,150 | 352,632 | | effective December 1, 2012 | 2013 | 83,836 | 10,076 | 70,000 | -- | 163,912 | | Glenn E. Adriance | 2015 | 212,664 | 55,723 | 183,600 | 6,380 | 458,367 | | Chief Sales and Marketing Officer | 2014 | 194,999 | 34,313 | 147,000 | 5,850 | 382,162 | | | 2013 | 183,322 | 33,396 | 90,000 | 5,500 | 312,218 | | Bryan T. Leo | 2015 | 160,000 | 30,543 | 80,000 | 4,800 | 275,343 | | Senior Vice President of Operations | 2014 | 145,000 | 18,220 | 52,500 | 4,350 | 220,070 | | | 2013 | 117,123 | 13,057 | 49,313 | 3,514 | 183,007 | | Garrett Krushefski | 2015 | 160,000 | 22,578 | 80,000 | 4,800 | 267,378 | | Senior Vice President of Operations | 2014 | 150,000 | 13,736 | 54,091 | 4,500 | 222,327 | | | 2013 | -- | -- | -- | -- | -- | | Steven W. Peterson | 2015 | -- | -- | -- | -- | -- | | Chief Financial Officer through | 2014 | -- | -- | -- | -- | -- | | November 30, 2012 | 2013 | 120,329 | 269,995 | -- | 188,610 | 578,934 |
Summary Compensation Table
| (1) This column represents compensation to NEOs under our Short-term Incentive Plan. These amounts are included for the year earned, not when paid. |
Summary Compensation Table
| (2) This column reflects the stock-based compensation expense recognized during the year for each NEO for consolidated financial statement reporting purposes with respect to the years ended March 31, 2015, 2014 and 2013. We calculated these amounts in accordance with the provisions of Accounting Standards Codification (“ASC”) Section 718 – Compensation – Stock Compensation, using the Black-Scholes option-pricing model. Effective November 30, 2012, as part of the negotiated separation agreement with Steven W. Peterson, 14,400 unvested options were modified to a) extend the expiration date to 10 years following the original grant date, b) allow them to be exercised through their expiration date, and c) accelerate the vesting such that all options will vest by November 30, 2014. This was a modification of the terms of an equity award and, accordingly, we treated this as an exchange of the original award for a new award. We recorded incremental compensation expense of approximately $240,000 for the year ended March 31, 2013. |
Summary Compensation Table
| (3) This column represents 401(k) matching funds. For Steven W. Peterson, it also includes a separation payment equivalent to one year of salary, recognized fully in our consolidated statement of income for the year ended March 31, 2013, but to be paid out over 12 months. |
Grant of Plan-based Awards
Grant of Plan-based Awards
Grant of Plan-based Awards
| | | Estimated future payments under non-equity incentive plan awards (1) | | | All other option awards: Number of securities underlying options | Exercise or base price of option awards ($/Sh) | Grant date fair value of stock and option awards | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | | | | | (a) | (b) | (c) | (d) | (e) | (j) | (k) | (l) | | John J. Sullivan, Ph.D. | 4/1/2014 | -- | -- | -- | 15,000 | $89.70 | $25.04 | | | 5/1/2014 | $14,350 | $215,250 | $287,000 | -- | -- | -- | | John V. Sakys | 4/1/2014 | -- | -- | -- | 7,500 | 89.70 | 25.04 | | | 5/1/2014 | 5,950 | 89,250 | 119,000 | -- | -- | -- | | Glenn E. Adriance | 4/1/2014 | -- | -- | -- | 7,500 | 89.70 | 25.04 | | | 5/1/2014 | 11,124 | 137,700 | 183,600 | -- | -- | -- | | Bryan T. Leo | 4/1/2014 | -- | -- | -- | 3,000 | 89.70 | 25.04 | | | 5/1/2014 | 8,960 | 60,000 | 80,000 | -- | -- | -- | | Garrett Krushefski | 4/1/2014 | -- | -- | -- | 3,000 | 89.70 | 25.04 | | | 5/1/2014 | 8,960 | 60,000 | 80,000 | -- | -- | -- |
Grant of Plan-based Awards
| (1) This section represents compensation to NEOs under our Short-term Incentive Plan. These amounts are included for the year earned, not when paid. These awards are based on various combinations of total revenues and profit growth. |
Outstanding Equity Awards at March 31, 2015
Outstanding Equity Awards at March 31, 2015
Outstanding Equity Awards at March 31, 2015
| | Option Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | | (a) | (b) | (c) | (e) | (f) | | John J. Sullivan Ph.D | 32,000 | -- | 18.98 | 5/11/2017 | | | 1,100 | -- | 21.93 | 4/1/2018 | | | 2,000 | -- | 16.60 | 4/1/2019 | | | 6,100 | -- | 25.56 | 4/1/2020 | | | 6,600 | 2,200 | 29.20 | 4/6/2021 | | | 4,000 | 4,000 | 50.50 | 4/2/2022 | | | 1,900 | 5,700 | 51.85 | 4/1/2023 | | | -- | 15,000 | 89.70 | 4/1/2022 | | John V. Sakys | 4,000 | 4,000 | 48.72 | 10/29/2022 | | | 950 | 2,850 | 51.85 | 4/1/2023 | | | -- | 7,500 | 89.70 | 4/1/2022 | | Glenn E. Adriance | 275 | -- | 25.56 | 4/1/2020 | | | 1,100 | 1,100 | 29.20 | 4/6/2021 | | | 1,000 | 2,000 | 50.50 | 4/2/2022 | | | 950 | 2,850 | 51.85 | 4/1/2023 | | | -- | 7,500 | 89.70 | 4/1/2022 | | Bryan T. Leo | 475 | 950 | 50.32 | 4/23/2017 | | | 775 | 1,550 | 50.32 | 4/23/2022 | | | 625 | 1,875 | 51.85 | 4/1/2023 | | | -- | 3,000 | 89.70 | 4/1/2022 | | Garrett Krushefski | 1,275 | 425 | 29.20 | 4/1/2016 | | | 600 | 600 | 50.50 | 4/2/2017 | | | 625 | 1,875 | 51.85 | 4/1/2023 | | | -- | 3,000 | 89.70 | 4/1/2022 |
Potential Payments upon Termination or Change-in-Control
Potential Payments upon Termination or Change-in-Control
Potential Payments upon Termination or Change-in-Control
| | Salary Continuation upon Termination (1) | Salary Continuation upon Change in Control (1) | Value of Equity Awards Received or to be Received (2) | | John J. Sullivan, Ph.D. | $319,000 | $638,000 | $297,395 | | John V. Sakys | 216,000 | 432,000 | 151,918 | | Glenn E. Adriance | 216,000 | 432,000 | 148,698 |
Potential Payments upon Termination or Change-in-Control
| (1) This amount is based on the NEO’s salary at March 31, 2015. |
Potential Payments upon Termination or Change-in-Control
| (2) The value of accelerating these unvested stock options was calculated by multiplying the number of shares underlying the NEO’s unvested stock options that were in-the-money at March 31, 2015 by the difference between the weighted average exercise price for options in-the-money at March 31, 2015, and our closing price per share on March 31, 2015 (the last trading day of the period). |
1. ELECTION OF DIRECTORS
1. ELECTION OF DIRECTORS
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) |
1. ELECTION OF DIRECTORS
| M. Brooks | H. Campbell | R. Dwyer | E. Guillemin | D. Kelly | J. Schmieder | J. Sullivan |
1. ELECTION OF DIRECTORS
(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.
1. ELECTION OF DIRECTORS
| ☐ | FOR | ☐ | AGAINST | ☐ | ABSTAIN |
1. ELECTION OF DIRECTORS
3. To ratify the appointment of EKS&H LLLP (“EKS&H”) as the Company’s independent registered public accounting firm for the year ending March 31, 2016 (the “Ratification of Auditors Proposal”).
1. ELECTION OF DIRECTORS
| ☐ | FOR | ☐ | AGAINST | ☐ | ABSTAIN |
1. ELECTION OF DIRECTORS
In his or her discretion, the Proxy is authorized to vote upon any matters which may properly come before the meeting, or any adjournment or postponement thereof. It is understood that when properly executed, this proxy will be voted in the manner directed herein by the undersigned shareholder. WHERE NO CHOICE IS SPECIFIED BY THE SHAREHOLDER, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS PROPOSED IN ITEM (1), FOR APPROVAL OF EXECUTIVE COMPENSATION PROPOSED IN ITEM (2); AND FOR RATIFICATION OF THE APPOINTMENT OF EKS&H PROPOSED IN ITEM (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.
1. ELECTION OF DIRECTORS
| Dated: ____________________ | | | | Signature | | | Signature if held jointly | | | PLEASE MARK, SIGN, DATE AND RETURN | | | THE PROXY CARD PROMPTLY USING THE | | | ENCLOSED ENVELOPE |
1. ELECTION OF DIRECTORS
| ☐ | PLEASE CHECK THIS BOX IF YOU INTEND TO BE PRESENT AT THE MEETING |
1. ELECTION OF DIRECTORS
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