DEF 14A of Genasys Inc.
Filed Jan 29, 2024 · FY20230001437749-24-002464
PROPOSAL ONE ELECTION OF DIRECTORS
PROPOSAL ONE ELECTION OF DIRECTORS
Director Nominees
Director Nominees The Board currently consists of five directors, all of which were elected to our Board at the 2023 annual meeting of stockholders. Each director to be elected will hold office until the next annual meeting of stockholders and until his or her successor is elected and has qualified, or until such director’s earlier death, resignation or removal. The Board, upon recommendation by our Nominating and Corporate Governance Committee, has nominated the nominees listed below for election to our Board. We encourage our Board members to attend our Annual Meeting of stockholders. All nominees attended the 2023 Annual Meeting of stockholders virtually.
Nominees
Nominees The names of the nominees and certain information about them are set forth below. Such information includes their present positions, principal occupations and public company directorships held in the past five years as well as the specific experience, qualifications, attributes or skills of each nominee that led the Board to believe that, as of the date of this Proxy Statement, the nominee is qualified to serve on the Board. However, each member of the Board may have a variety of reasons for believing a particular person would be an appropriate Board member, and these views may differ from the views of other members of the Board.
Nominees
| Name | Age | Position and Offices | Director Since | | Richard H. Osgood III (2)(3) | 69 | Chairman of the Board | 2013 | | Richard S. Danforth | 64 | Chief Executive Officer and Director | 2017 | | Scott L. Anchin (1)(2)(3) | 49 | Director | 2016 | | Susan Lee Schmeiser (1)(3) | 47 | Director | 2021 | | Caltha Seymour (1)(2) | 46 | Director | 2021 |
Nominees
(1) Member of Audit Committee (2) Member of Compensation Committee (3) Member of Nominating and Corporate Governance Committee Richard H. Osgood III, age 69, has been a member of the Board since July 2013 and was appointed Chairman of our Board in November 2021. Mr. Osgood retired in 2012 after serving as Head of Equity Capital Markets for Wedbush Securities since January 2009. Mr. Osgood joined Wedbush Securities when it acquired Pacific Growth Equities, which Mr. Osgood founded in 1991. Mr. Osgood served in various capacities with Pacific Growth Equities prior to its acquisition, including President, Chief Executive Officer, Chief Operating Officer, Chairman and Executive Chairman. Prior to founding Pacific Growth Equities, Mr. Osgood was the Head of Capital Markets, Sales and Trading at Volpe, Welty and Company, a company he also co-founded in 1986. Previously, Mr. Osgood held senior positions in institutional sales at Montgomery Securities, Rotan Mosely and Smith Barney. Mr. Osgood holds a B.A. in Psychology and a B.S. in Biology from the University of the South. Mr. Osgood’s capital markets and securities industry expertise, as well as his management and strategic experience qualify him to serve on our Board. Richard S. Danforth, age 64, was appointed Chief Executive Officer in August 2016 and elected as a member of the Board in March 2017. Prior to joining our Company, Mr. Danforth founded RsD Aero, Ltd., a consulting firm in the defense, aerospace, space and transportation industries, in October 2013. Between March 2002 and October 2013, Mr. Danforth served in numerous leadership positions with DRS Technologies, Inc., including Group President of DRS Integrated Defense Systems & Service between 2008 and 2013, President, Chief Executive Officer and director of DRS Defense Solutions between 2008 and 2012, President of Command Control & Communication between 2005 and 2008, President of Navy Electronics & Intelligence Systems between 2004 and 2005, and Executive Vice President of the Electronics Systems Group between 2002 and 2004. Between 2000 and 2001, Mr. Danforth served as Senior Vice President, Commercial Aircraft Business at Raytheon Company. Mr. Danforth holds a Masters in Engineering Management from Western New England College and Bachelor of Science, Industrial Technology from University of Massachusetts, Lowell. Mr. Danforth’s extensive business experience with strategy, leadership and execution at large defense companies qualifies him to serve on our Board. Scott L. Anchin, age 49, has been a member of the Board since March 2016. Mr. Anchin has served as the Chief Financial Officer of PF Franchisee Holdings, LLC since May 2022. From October 2018 to May 2022, Mr. Anchin was a partner at Meadow Hill Place, LLC, which provides management advisory services to growth stage companies. He also served as a Managing Director with Opportune LLP from March 2016 to October 2018, where he provided restructuring advisory services to companies and stakeholders in distressed situations. From 2009 to February 2016, Mr. Anchin was employed by Alvarez & Marsal North America, LLC, a global professional services firm specializing in turnaround and interim management and performance improvement. Mr. Anchin currently serves as a director of Kopin Corporation (Nasdaq: KOPN). He is a non-practicing Certified Public Accountant in the State of New York and holds a B.S. in Accounting from the Wharton School of Business at the University of Pennsylvania and an M.B.A. with a concentration in Management from Columbia Business School. Mr. Anchin’s accounting, management and restructuring experience and background, and his expertise in advising companies and stakeholders in difficult circumstances qualify him to serve on our Board. Susan Lee Schmeiser, age 47, has been a member of the Board since September 2021. Ms. Lee has over 20 years of experience in digital marketing software, media, data analytics, and strategic partnerships. Ms. Lee has served as Group President of Digital Marketing & Technology Solutions at Vericast, a MacAndrews & Forbes company, since November 2020. Prior to her current position, from April 2020 to November 2020, Ms. Lee served as Chief Product Officer and Senior Executive Vice President at Vericast. From 2017 to 2020, Ms. Lee was Senior Vice President of Business Development and Strategy at Valassis, a leader in marketing technology and consumer engagement. From 2011 to 2017, Ms. Lee served as the Vice President of Corporate Development and Strategy of MaxPoint Interactive, Inc., which was acquired by Valassis after going public in 2017. Ms. Lee served as Vice President, Ad Sales Strategy at Univision from 2007 to 2011. She also held the role of Vice President at MTV Networks from 2004 to 2007. She began her career as a Financial Analyst in the Financial Sponsors Group of Morgan Stanley’s Investment Banking Division. Ms. Lee earned a B.A. in Economics from New York University and an M.B.A. in General Management from Harvard Business School. Ms. Lee’s leadership experience, and expertise in corporate development and strategy qualify her to serve on our Board. Caltha Seymour, age 46, has been a member of the Board since September 2021. Ms. Seymour serves as Director of Global Business Development and Strategic Planning, Mission Systems Division, of Eaton Corporation, a diversified, multinational power management solutions company since 2016. From 2018 to 2021, Ms. Seymour was also the National Channel Manager for Eaton’s Industrial Control Division, where she was responsible for developing and executing $262M distribution channel partner sales and marketing strategic initiatives, as well as other programs to help cultivate sales growth and increase profitability. From 2016 to 2018, Ms. Seymour managed new product development, including a cross-functional role for Eaton’s $2.5B commercial vehicle product line. Prior to joining Eaton, Ms. Seymour leveraged her leadership and management skills in operations and consulting positions for the National Football League and the United States Military Academy at West Point. Ms. Seymour has earned a B.A. in Education Management from the University of Delaware, an M.S. in Sports Administration from Delaware State University, and a Global M.B.A. in International Business & Finance from Tulane University. Ms. Seymour’s extensive management experience, as well as her expertise in marketing, diverse business operations, and strategic initiatives qualify her to serve on our Board.
Board of Directors
Board of Directors Our Board currently consists of five directors: Scott L. Anchin, Richard S. Danforth, Susan Lee Schmeiser, Richard H. Osgood III, and Caltha Seymour. During the fiscal year ended September 30, 2023, our Board held four meetings. All directors serving on the Board during the fiscal year ended September 30, 2023 attended at least 75% of the aggregate of the total number of the meetings of the Board and the total number of meetings held by all committees of the Board on which he or she served (in each case during the period in which he or she served).
Information Regarding the Board Committees
Information Regarding the Board Committees During the full fiscal year ended September 30, 2023, the Board had three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. The current charters for the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee can be found on our website at www.genasys.com.
Evaluating Nominees for Director
Evaluating Nominees for Director The Nominating and Corporate Governance Committee reviews candidates for director nominees in the context of the current composition of our Board, our operating requirements and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee currently considers, among other factors, diversity, age, skills, and such other factors as it deems appropriate given the current needs of the Board and our company, to maintain a balance of knowledge, experience and capability. In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviews such directors’ overall service to our company during their term, including the number of meetings attended, level of participation, quality of performance, and any other relationships and transactions that might impair such directors’ independence. In the case of new director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee must be independent, which determination is based upon applicable NASDAQ listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. The Nominating and Corporate Governance Committee then uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the background and qualifications of possible candidates after considering the function and needs of our Board. The Nominating and Corporate Governance Committee meets to discuss and consider such candidates’ qualifications and then selects a nominee for recommendation to our Board by majority vote. To date, neither the Nominating and Corporate Governance Committee nor any predecessor to the Nominating and Corporate Governance Committee has paid a fee to any third party to assist in the process of identifying or evaluating director candidates.
EXECUTIVE COMPENSATION Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary | Bonus | Stock Awards | Option Awards | All Other Compensation | Total | | Richard S. Danforth | 2023 | $428,685 | – | – | $224,000(1) | $14,806 | $667,491 | | Chief Executive Officer | 2022 | $432,283 | $382,000 | – | – | $13,725 | $828,008 | | Dennis D. Klahn | 2023 | $277,846 | – | $120,000(2) | – | $12,771 | $410,617 | | Chief Financial Officer & Secretary | 2022 | $260,576 | $165,000 | $33,200(3) | – | $12,000 | $470,776 |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table contains information regarding unexercised options for each named executive officer outstanding as of September 30, 2023.
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | | | Stock Awards | | | | Grant | Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned | Option Exercise | Option Expiration | Number of Shares or Units of Stock That Have Not | Market Value of Shares or Units of Stock That Have Not | | Name | Date | Exercisable | Unexercisable | Options (#) | Price ($) | Date | Vested (#) | Vested ($) | | Richard S. Danforth | 10/4/2019 | 187,138 | —(1) | 212,862 | $3.39 | 10/4/2026 | — | — | | | 10/8/2022 | — | 200,000(2) | — | $2.69 | 10/8/2029 | — | — | | | 10/8/2022 | — | 400,000(3) | — | $2.69 | 10/8/2029 | — | — | | | 10/8/2022 | — | 400,000(4) | — | $2.69 | 10/8/2029 | — | — | | Dennis Klahn | 9/19/2017 | 100,000 | —(1) | — | $1.76 | 9/29/2024 | — | — | | | 2/12/2021 | — | — | — | — | — | 3,333 | $6,699(5) | | | 2/10/2022 | — | — | — | — | — | 6,666 | $13,399(6) | | | 2/14/2023 | — | — | — | — | — | 30,000 | $60,300(7) |
Outstanding Equity Awards at Fiscal Year-End
| (1) The option is fully vested. |
Outstanding Equity Awards at Fiscal Year-End
| (2) The option vests as to 1/2 of the shares on each anniversary of the date of grant of October 8, 2022, until fully vested. |
Outstanding Equity Awards at Fiscal Year-End
| (3) The number of shares that vest is based on the achievement of certain performance criteria as determined on September 30, 2025. |
Outstanding Equity Awards at Fiscal Year-End
| (4) The number of shares that vest is based on the achievement of certain performance criteria as determined on September 30, 2026. |
Outstanding Equity Awards at Fiscal Year-End
| (5) The restricted stock unit vests as to 1/3 of the shares on each anniversary of the date of grant of February 12, 2021, until fully vested. |
Outstanding Equity Awards at Fiscal Year-End
| (6) The restricted stock unit vests as to 1/3 of the shares on each anniversary of the date of grant of February 10, 2022, until fully vested. |
Outstanding Equity Awards at Fiscal Year-End
| (7) The restricted stock unit vests as to 1/3 of the shares on each anniversary of the date of grant of February 14, 2023, until fully vested. |
Outstanding Equity Awards at Fiscal Year-End
We do not have any stock appreciation rights plans in effect and we have No long-term incentive plans, as those terms are defined in SEC regulations. We have No defined benefit or actuarial plans covering any named executive officer.
Potential Payments Upon Termination or Change-in-Control
Potential Payments Upon Termination or Change-in-Control Mr. Danforth’s employment agreement provides for payments and other benefits upon certain termination and change in control events as described above in “Employment Agreements.” We also have a Change in Control Severance Benefit Plan under which, in the event of a qualifying termination, a participating executive will be entitled to receive (a) a lump sum payment equal to twenty-four months’ base salary (less applicable tax and other withholdings), (b) a lump sum payment equal to the officer’s target bonus for the year in which the officer is terminated, (c) continuation of health benefits for twenty-four months and (d) accelerated vesting of any unvested stock options and other securities or similar incentives held at the time of termination. A qualifying termination under the Change in Control Severance Benefit Plan is any involuntary termination without cause or any voluntary termination for good reason, in each case occurring within three months before or twelve months after a change of control of our Company.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The following table shows information about the relationship between compensation actually paid for our principal executive officer (PEO) and our non-PEO named executive officers (NEO) and certain financial performance of the Company for the fiscal years ending September 30, 2023 and September 30, 2022.
PAY VERSUS PERFORMANCE
| Year | Summary compensation table total for PEO (1) | Compensation actually paid to PEO (2) | Average summary compensation table total for non-PEO NEOs (3) | Average compensation actually paid to non-PEO NEOs (4) | Value of initial fixed $100 investment based on: Total shareholder return (5) | Net income (Loss) | | 2023 | $667,491 | $553,491 | $410,617 | $352,584 | $72.56 | $(18,396,000) | | 2022 | $828,008 | $828,008 | $470,776 | $439,912 | $38.80 | $(16,212,000) |
PAY VERSUS PERFORMANCE
| (1) The dollar amounts reported are the amounts of total compensation reported for our PEO, Richard Danforth, in the Summary Compensation Table for fiscal years 2023 and 2022. |
PAY VERSUS PERFORMANCE
| (2) The dollar amounts reported represent the amount of “compensation actually paid”, as computed in accordance with SEC rules. The dollar amounts reported are the amounts of total compensation reported for Mr. Danforth during the applicable year after adjusting for the fair value of stock options granted under the Company’s Amended and Restated 2015 Equity Incentive Plan. |
PAY VERSUS PERFORMANCE
| (3) The dollar amounts reported are the average of the total compensation reported for our NEO, other than our PEO, Dennis Klahn, who served as Chief Financial Officer for fiscal years 2023 and 2022. |
PAY VERSUS PERFORMANCE
| (4) The dollar amounts reported represent the amount of “compensation actually paid”, as computed in accordance with SEC rules. The dollar amounts reported are the amounts of total compensation reported for Mr. Klahn during the applicable year after adjusting for the fair value of restricted stock units granted under the Company’s Amended and Restated 2015 Equity Incentive Plan. |
PAY VERSUS PERFORMANCE
| (5) Total shareholder return is calculated as the difference between the price of the Company’s common stock at the end of each fiscal year, represented by the closing trading price as of that date, compared to the price of the Company’s common stock at the beginning of the measurement period, represented by the closing trading price as of the last day of the Company’s 2021 fiscal year. No dividends were declared or paid during either of the fiscal years presented. |
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS The following table shows all the fees earned or cash paid during the fiscal year ended September 30, 2023 to our non-employee directors. No option or restricted stock awards, long-term incentive plan payouts or other types of payments, other than the amount identified in the chart below, were paid to these directors during the fiscal year ended September 30, 2023.
Director Compensation Fiscal Year 2023
Director Compensation Fiscal Year 2023
Director Compensation Fiscal Year 2023
| Name | Fees Earned or Paid in Cash | Stock Awards(1) | Total | | Scott L. Anchin | $30,000 | $104,400 | $134,400 | | Richard H. Osgood III | $30,000 | $104,400 | $134,400 | | Susan Lee Schmeiser | $30,000 | $104,400 | $134,400 | | Caltha Seymour | $30,000 | $104,400 | $134,400 |
Director Compensation Fiscal Year 2023
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Director Compensation Fiscal Year 2023
| (1) Reflects the aggregate grant date fair value for restricted stock units granted during the fiscal year ended September 30, 2023, computed in accordance with ASC 718, “Compensation-Stock Compensation.” Assumptions used in the calculation of these amounts are included in the notes to our audited financial statements for the fiscal year ended September 30, 2023, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 7, 2023. |
Director Compensation Fiscal Year 2023
Each of our non-employee directors receives a grant of 30,000 restricted stock units annually on the date of our annual meeting of stockholders, subject to the overall director compensation limits set forth in the Amended Plan. Each of our non-employee directors also receives an annual cash retainer equal to $30,000, which is paid in equal quarterly installments and is prorated for partial year service. No additional amounts are payable for committee participation.