SCHEDULE
14A
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by
the Registrant x
Filed by
a Party other than the Registrant o
Check the
appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to
§240.14a-12
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MEASUREMENT SPECIALTIES, INC.
(Name of
Registrant as Specified in Its Charter)
(Name of
Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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Fee
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box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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Form,
Schedule or Registration Statement No.:
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Measurement
Specialties, Inc.
1000
Lucas Way
Hampton,
VA 23666
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
Measurement Specialties, Inc. (the
“Company,” “we,” “us” or “our”) will hold its Annual Meeting of Shareholders at
Embassy Suites hotel at the Hampton Roads Convention Center, 1700 Coliseum
Drive, Hampton, Virginia 23666 on Tuesday, September 22, 2009, at 3:00 p.m. Eastern Daylight
time. We are holding the meeting for the following
purposes:
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1.
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To
elect R. Barry Uber and Satish Rishi to the Board of Directors, whose
terms are described in the proxy
statement.
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2.
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To
ratify the appointment of KPMG LLP as our independent registered public
accounting firm for the fiscal year ending March 31,
2010.
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3.
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To
transact such other business as may properly come before the meeting and
any postponement or adjournment
thereof.
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Holders of record of common stock of
the Company at the close of business on July 24, 2009 are entitled to vote at
the meeting.
In addition to the proxy statement and
proxy card, a copy of the Company’s Annual Report on Form 10-K for the fiscal
year ended March 31, 2009, which is not part of the proxy soliciting material,
is enclosed.
It is important that your shares be
represented and voted at the meeting. You may vote your shares by
completing and returning a proxy card. Most shareholders can also
vote over the Internet or by telephone. If Internet and telephone
voting are available to you, you can find voting instructions on the enclosed
proxy card. You can revoke a proxy at any time prior to its exercise
at the meeting by following the instructions in the enclosed proxy
statement. Whichever method you
choose, your vote is important so please vote as soon as possible.
By Order
of the Board of Directors,
MARK
THOMSON
Chief
Financial Officer and Secretary
July 29,
2009
PROXY
STATEMENT
We are providing these proxy materials
in connection with the solicitation by the Board of Directors of Measurement
Specialties, Inc. (the “Company”, “we”, “us” or “our”) of proxies to be voted at
our Annual Meeting of Shareholders, to be held on September 22, 2009, and at any
meeting following postponement or adjournment of the Annual
Meeting.
You are cordially invited to attend the
Annual Meeting, which will begin at 3:00 p.m., Eastern Daylight
time. The meeting will be held at the Embassy Suites hotel at the
Hampton Roads Convention Center, 1700 Coliseum Drive, Hampton, Virginia 23666 on
Tuesday, September 22, 2009. Shareholders will be admitted beginning
at 2:30 p.m., Eastern Daylight time.
We are first mailing this proxy
statement and proxy card (including voting instructions) on or about July 29,
2009 to persons who were shareholders at the close of business on July 24, 2009,
the record date for the meeting.
Important
notice regarding the availability of proxy materials for the shareholder meeting
to be held on September 22, 2009.
This
proxy statement and annual report to shareholders, which includes the Company’s
Annual Report on Form 10-K for the 2009 fiscal year, are available at www.meas-spec.com.
Our fiscal year begins on April 1 and
ends on March 31. References in this proxy statement to the year 2008
or fiscal 2008 refer to the 12-month period from April 1, 2007 through March 31,
2008. References in this proxy statement to the year 2009 or fiscal
2009 refer to the 12-month period from April 1, 2008 through March 31,
2009. References in this proxy statement to the year 2010 or fiscal
2010 refer to the 12-month period from April 1, 2009 through March 31,
2010.
PROXIES
AND VOTING PROCEDURES
Who
Can Vote?
You are entitled to vote at the Annual
Meeting all shares of the Company’s common stock that you held as of the close
of business on July 24, 2009, the record date for the meeting. Each
share of common stock is entitled to one vote with respect to each matter
properly brought before the meeting.
On July 24, 2009, there were 14,485,937
shares of common stock outstanding.
In accordance with New Jersey law, a
list of shareholders entitled to vote at the meeting will be available at the
meeting.
Who
Is the Record Holder?
You may own common stock either (1)
directly in your name, in which case you are the record holder of such shares,
or (2) indirectly through a broker, bank or other nominee, in which case such
nominee is the record holder.
If your shares are registered directly
in your name, we are sending these proxy materials directly to
you. If the record holder of your shares is a nominee, you will
receive proxy materials from such record holder.
How
Do I Vote?
If you are the record
holder:
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By
Internet. You can vote on the Internet. The website address for
Internet voting is on your proxy card, and voting is also available 24
hours a day. If you vote by Internet, you do not need to request or return
your proxy card. Your vote by Internet must be received by
11:59 p.m., Eastern Daylight time, September 21, 2009. Please
be aware that if you vote over the Internet, you may incur costs such as
telephone and Internet access charges for which you will be
responsible.
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By
Telephone. You can also vote your shares by telephone, by calling the
toll-free telephone number on your proxy card and following the
instructions. Telephone voting is also available 24 hours a
day. If you vote by telephone, you do not need to request or
return your proxy card. Your vote by telephone must be received by 11:59
p.m., Eastern Daylight time, September 21,
2009.
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By
Mail. If you choose to vote by mail, mark your proxy, date and
sign it, and return it in the postage-paid envelope
provided. Your vote by mail must be received by the close of
voting at the Annual Meeting on September 22,
2009.
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By
Attending the Annual Meeting. If you attend the Annual Meeting,
you can vote your shares in person.
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If your stock is held by brokers,
banks or other nominees:
If your common stock is held by a
broker, bank or other nominee, you will receive instructions from such nominee
that you must follow in order to have your shares voted.
If you plan to attend the Annual
Meeting and vote in person, you will need to contact the broker, bank or other
nominee to obtain evidence of your ownership of common stock on July 24,
2009.
If you hold your shares through a
broker, your shares may be voted even if you do not provide voting instructions
to your broker, bank or other nominee. Under the rules governing the
voting of shares held in street name, member brokers who do not receive
instructions from beneficial owners are permitted to vote shares for which their
customers do not provide voting instructions on certain “routine”
matters. The Company believes that (1) the election of Directors and
(2) the ratification of our independent registered public accounting firm are
considered routine matters.
The method by which you vote will in no
way limit your right to vote at the meeting if you later decide to attend in
person.
How
Many Votes Are Required?
A quorum is required to transact
business at the Annual Meeting. We will have a quorum and be able to conduct the
business of the Annual Meeting if the holders of a majority of the shares
entitled to vote are present at the meeting, either in person or by
proxy.
If a quorum is present, a plurality of
votes cast is required to elect Directors. Thus, a Director may be
elected even if the Director receives less than a majority of the shares
represented at the meeting. Proxies cannot be voted for a greater
number of nominees than are named in this Proxy Statement. To ratify
the appointment of our independent registered public accounting firm, an
affirmative vote of a majority of the votes cast is required.
How
Are Votes Counted?
All shares that have been properly
voted, and not revoked, will be voted at the Annual Meeting in accordance with
the instructions given. If you sign and return your proxy card or
submit your proxy via the Internet or by telephone, but do not specify how you
wish your shares to be voted, your shares represented by that proxy will be
voted as recommended by the Board of Directors: (1) “for” the nominees for
Director and (2) “for” the ratification of the appointment of KPMG LLP as our
independent registered public accounting firm for fiscal 2010.
Proxies marked as abstaining or, with
respect to the election of directors, withheld, and any proxies returned by
brokers as “non-votes” on behalf of shares held in street name because
beneficial owners’ discretion has been withheld as to one or more matters to be
acted upon at the Annual Meeting, will be treated as present for purposes of
determining whether a quorum is present at the Annual
Meeting. However, any shares not voted as a result of a marked
abstention or, with respect to the election of directors, withheld vote, or a
broker non-vote will not be counted as votes cast for or against any of the
proposals requiring the approval by a plurality or majority of votes
cast. An abstention, withheld vote or broker non-vote will therefore
not affect the votes required to approve any of the proposals requiring the
approval by a plurality or majority of votes cast.
How
Can I Revoke My Proxy or Change My Vote?
You can revoke your proxy at any time
before it is exercised by timely delivery of a properly executed, later-dated
proxy (including an Internet or telephone vote) or by voting in person at the
meeting (attendance at the meeting will not itself revoke a
proxy).
Who
Will Pay the Expenses of Proxy Distribution?
The Company will pay the expenses of
the preparation of the proxy materials and the solicitation of
proxies. Proxies may be solicited on behalf of the Company by
Directors, officers or employees of the Company, who will receive no additional
compensation for soliciting, in person or by telephone, e-mail or facsimile or
other electronic means. In accordance
with the regulations of the Securities and Exchange Commission (the “SEC”) and
NASDAQ, we will reimburse brokerage firms and other custodians, nominees and
fiduciaries for their expenses incurred in sending proxies and proxy materials
to beneficial owners of the Company’s common stock.
What
Does it Mean if I Get More Than One Set of Proxy Materials?
If you receive more than one set of
proxy materials, your shares are probably registered differently or are held in
more than one account. Please vote all proxies to ensure that all
your shares are voted. Also, unless you intend to have some of your
shares registered differently than others, please have all of your accounts
registered in the same name and address. You may do this by
contacting our transfer agent, American Stock Transfer & Trust Company at
(718) 921-8293.
ITEM
1 — ELECTION OF DIRECTORS
The Board of Directors is divided into
three classes. One class is elected each year for a term of three
years.
Two Directors will be elected at this
Annual Meeting to serve for a three-year term expiring at our Annual Meeting in
2012. The Board has nominated R. Barry Uber and Satish Rishi to serve
for the term expiring at our Annual Meeting in 2012. You can find
information about Messrs. Uber and Rishi below.
The persons named in the proxy card
will vote such proxy “for” the election of Messrs. Uber and Rishi unless you
indicate that your vote should be withheld. If elected, each of
Messrs. Uber and Rishi will continue in office until his successor has been duly
elected and qualified, or until the earliest of his death, resignation,
retirement or removal. Each of Messrs. Uber and Rishi has indicated
to the Company that he will serve if elected. We do not anticipate
that either of Messrs. Uber and Rishi will be unable to stand for election, but,
if that happens, your proxy will be voted in favor of another person nominated
by the Board.
The Board of Directors recommends a
vote FOR the election of
Messrs. Uber and Rishi as Directors.
NOMINEES
FOR TERM EXPIRING IN 2012
R. Barry Uber has been a
Director since October 2003. Since 2005, Mr. Uber has been a partner
of Coastal Capital Consultants, L.L.C., an investment firm. Mr. Uber was
President and Chief Operating Officer of American Commercial Lines Inc.
(formerly American Commercial Barge Line), a provider of marine transportation
and manufacturing services and solutions, from July 2001 to July
2003. From 1998 to 2000, he served as President and Chief Executive
Officer of North American Van Lines. Prior to joining North American
Van Lines, Mr. Uber served for 30 years at Ingersoll-Rand Co. Inc., a
diversified commercial products manufacturer, where he held increasingly
responsible executive positions, last serving as Corporate Vice President and
President of the Construction Machinery Equipment Group. Mr. Uber
received a B.B.A. in business administration from Penn State University where he
was awarded an Alumni Fellow Award in 1996. Age 64.
Satish Rishi has been a
Director since September 2005. Since April 2006, Mr. Rishi has served
as Senior Vice President, Finance and Chief Financial Officer of Rambus, Inc., a
designer of high-speed chip interfaces. From 2001 to April 2006, he
served at Toppan Photomasks, Inc. (formerly DuPont Photomasks, Inc.), a global
provider of photomask technology, where he last held the positions of Executive
Vice President and Chief Financial Officer. During his career, Mr.
Rishi has held senior financial management positions at semiconductor and
electronics manufacturers. He served as Vice President and Assistant Treasurer
at Dell Inc. from 1999 until 2001, and prior to his service at Dell, spent 13
years at Intel Corp., where he held financial management positions of increasing
responsibility, both in the United States and overseas. His last position at
Intel was Assistant Treasurer. Mr. Rishi received a B.S. with honors
in Mechanical Engineering from Delhi College of Engineering, Delhi University,
and an M.B.A. with a concentration in Finance from the Walter J. Hass School of
Business, University of California, Berkeley. Age 49.
DIRECTORS
WITH TERM EXPIRING IN 2011
Kenneth E. Thompson has been
a Director since November 2006. Through September 2006, Mr. Thompson
was a partner of McCarter & English, LLP, a law firm that provided legal
services to the Company. Effective October 1, 2006, Mr. Thompson
became Senior Vice President and General Counsel of Insurance Services Office,
Inc., a provider of data, analytical tools and decision support services that
help measure, manage and reduce risk. Mr. Thompson received a B.A. in
Political Science from the State University of New York at Stony Brook and a
J.D. from Boston University School of Law. Age 49.
Morton L. Topfer has been a
Director since January 2002 and was appointed Chairman of the Board effective
January 31, 2003. Mr. Topfer is Managing Director of Castletop
Capital, L.P., an investment firm. He previously served at Dell,
Inc., a global systems and services company, as Counselor to the Chief Executive
Officer, from December 1999 to February 2002, and Vice Chairman, from June 1994
to December 1999. Mr. Topfer was a member of the Board of Directors
of Dell from December 1999 to July 2004. Prior to joining Dell,
Mr. Topfer served for 23 years at Motorola, Inc., where he held
several executive positions, last serving as Corporate Executive Vice President
and President of the Land Mobile Products Sector. Mr. Topfer was
conferred the Darjah Johan Negeri Penang State Award in July 1996 by the
Governor of Penang for contributions to the development of the electronics
industry in Malaysia. Mr. Topfer also serves as a director for
Staktek Technologies and Advanced Micro Devices. Age
72.
DIRECTORS
WITH TERM EXPIRING IN 2010
John D. Arnold has been a
Director since June 1995. Mr. Arnold has been in private law practice
since 1988, primarily representing technology companies with relationships with
Asian investors and/or manufacturers. Prior to 1988, Mr. Arnold was
employed with the law firms of Wilson, Sonsini, Goodrich & Rosati in Palo
Alto, California and Foley & Lardner in Milwaukee, Wisconsin. Mr.
Arnold received a B.B.A. in business administration from the University of
Wisconsin and a J.D. from Stanford Law School. Age 54.
Frank D. Guidone has served
as Chief Executive Officer since June 2002 and has been a Director since
December 2002. Mr. Guidone was a Managing Director/Principal of
Corporate Revitalization Partners, a Dallas-based turnaround/crisis management
consultancy firm, from 2000 to 2006. Mr. Guidone has been a partner
at Four Corners Capital Partners, a boutique private investment firm of which
Mr. Guidone is a co-founder, since 1999. Prior to forming Four
Corners, Mr. Guidone spent 13 years in management consulting with Andersen
Consulting and George Group, Inc. Mr. Guidone has worked with
numerous solvent and insolvent companies, focusing on operational and financial
restructurings. Mr. Guidone received a B.S. in mechanical engineering
from The University of Texas at Austin. Age 44.
ITEM
2 — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Appointment
of Independent Registered Public Accounting Firm for Fiscal 2009
The Audit Committee has appointed KPMG
LLP as our independent registered public accounting firm for fiscal
2010. We are not required to have the shareholders ratify the
selection of KPMG LLP as our independent registered public accounting
firm. We are doing so because we believe it is a matter of good
corporate practice. If the shareholders do not ratify the selection,
the Audit Committee will reconsider whether or not to retain KPMG LLP but may
retain such independent registered public accounting firm. Even if
the selection is ratified, the Audit Committee, in its discretion, may change
the appointment at any time during the year if it determines that such a change
would be in the best interests of the Company and its
shareholders. Representatives of KPMG LLP are expected to be present
at the Annual Meeting with an opportunity to make a statement if they desire to
do so and to be available to respond to appropriate questions.
The Board of Directors recommends a
vote FOR the
ratification of the appointment of KPMG LLP as our independent registered public
accounting firm for fiscal 2010.
Fees
Paid to Our Independent Registered Public Accounting Firm During Fiscal 2009 and
Fiscal 2008
Audit Fees. The
Company was billed the aggregate amounts of $1,565,647 and $1,745,802 for the
fiscal years 2009 and 2008, respectively, for professional services rendered by
KPMG LLP for its audit of our financial statements for such years, review of the
financial statements included in our Forms 10-Q during such respective fiscal
years and Sarbanes-Oxley related audits of internal control over financial
reporting.
Audit-Related
Fees. In fiscal 2009 and 2008, the Company did not pay any
fees for
audit-related services rendered by KPMG LLP.
Tax Fees. The
Company was billed the aggregate amounts of $134,043 and $8,000 for the fiscal
years 2009 and 2008, respectively, for tax consulting services rendered by KPMG
LLP.
All Other Fees. In
fiscal 2009 and 2008, the Company did not pay KPMG LLP any fees other than those
described above.
Pre-Approval
of Audit and Permissible Non-Audit Services
The Audit Committee pre-approves all
audit and permissible non-audit services provided by our independent registered
public accounting firm. These services may include audit services,
audit-related services, tax services and other services. The Audit
Committee has adopted a policy for the pre-approval of services provided by our
independent registered public accounting firm. Under the policy,
pre-approval is generally provided for up to one year and any pre-approval is
detailed as to the particular service or category of services and is subject to
a specific budget. In addition, the Audit Committee may pre-approve
particular services on a case-by-case basis. For each proposed
service, the independent registered public accounting firm is required to
provide detailed back-up documentation at the time of approval. The Audit
Committee may, when applicable, form and delegate authority to subcommittees
consisting of one or more members who are independent directors of the Board,
including the authority to grant pre-approvals of audit and permitted non-audit
services, provided that decisions of such subcommittee to grant pre-approvals
are required to be presented to the full Audit Committee at its next scheduled
meeting. All audit and permissible non-audit services provided by
KPMG LLP to the Company for fiscal 2009 and fiscal 2008, respectively, were
pre-approved by the Audit Committee.
GOVERNANCE
OF THE COMPANY
Pursuant to New Jersey law and the
Company’s by-laws, the Company’s business, property and affairs are managed by
or under the direction of the Board of Directors. Members of the
Board are kept informed of the Company’s business through discussions with the
Chief Executive Officer and other officers, by reviewing materials provided to
them and by participating in meetings of the Board and its
committees. We currently have six members on our
Board. The Board has determined that five of its members, John D.
Arnold, R. Barry Uber, Satish Rishi, Morton L. Topfer and Kenneth E. Thompson,
are “independent,” as defined in the NASDAQ listing
standards.
The Board of Directors meets on a
regularly scheduled basis during the year to review significant developments
affecting the Company and to act on matters requiring Board approval, and may
hold special meetings between scheduled meetings when
appropriate. During fiscal 2009, the Board held six
meetings. Each incumbent Director attended more than 75% of the total
number of meetings of the Board of Directors and the Board committees of which
he was a member during the period he served as a Director in fiscal
2009. The Company does not have a policy requiring all Directors to
attend annual meetings of shareholders. Messrs. Topfer,
Uber, Arnold, Rishi and Guidone were the Directors then serving who
attended the Company’s 2008 Annual Meeting.
COMMITTEES
OF THE BOARD OF DIRECTORS
The Board of Directors has established
various committees to assist it with the performance of its
responsibilities. These committees and their current members are
discussed below.
Audit
Committee
During fiscal year 2009, the Audit
Committee consisted of John D. Arnold (Chairman), Satish Rishi and Kenneth E.
Thompson. All of the Audit Committee members are “independent,” as
independence for audit committee members is defined in the NASDAQ listing
standards, and under the heightened independence standards for audit committee
members under Securities Exchange Act of 1934, as amended (the “Exchange
Act”). The Board has determined that all Audit Committee members have
the financial sophistication and experience required by NASDAQ listing
standards. The Board has also determined that current Director Satish
Rishi qualifies as an “audit committee financial expert,” as defined in Item
407(d)(5) of SEC Regulation S-K. For additional information regarding
the experience and background of Mr. Rishi, see “Item 1 – Election of Directors”
above.
During
fiscal 2009, the Audit Committee met six times. The functions of the
Audit Committee are described in its report, which is included in this proxy
statement. The Board has adopted a written charter setting forth the
functions of the Audit Committee. This charter is available to
shareholders in the “About Us” section on our website, www.meas-spec.com.
Compensation
Committee
During
fiscal 2009, the Compensation Committee consisted of R. Barry Uber (Chairman),
Morton L. Topfer and Kenneth E. Thompson. All of the Compensation
Committee Members are “independent,” as independence for Compensation Committee
members is defined in the NASDAQ listing standards.
The
functions of the Compensation Committee are to (1) develop and maintain
compensation policy and strategy that creates a direct relationship between pay
levels and corporate performance and returns to shareholders, (2) recommend to
our Board of Directors for approval, compensation and benefit plans for
executive officers, (3) review and approve annually corporate and personal goals
and objectives to serve as the basis for the Chief Executive Officer’s
compensation, evaluate the Chief Executive Officer’s performance in light of the
goals and, based on such evaluation, determine, or recommend to the Board of
Directors for determination, the annual total compensation for our other
executive officers, (4) approve the grants of stock options and other
equity-based incentives to the extent provided under our compensation plans, and
(5) review and recommend to our Board of Directors compensation for non-employee
directors.
During
fiscal 2009, the Compensation Committee met three times. The Board
has adopted a written charter setting forth the functions of the Compensation
Committee. This charter is available to shareholders in the “About
Us” section on our website, www.meas-spec.com.
Nominating
Committee
During
fiscal year 2009, the Nominating Committee consisted of R. Barry Uber
(Chairman), Morton L. Topfer and Satish Rishi. All of the Nominating
Committee members are “independent,” as independence for nominating committee
members is defined in the NASDAQ listing standards. The Nominating
Committee was formed to evaluate and recommend to the Board the persons to be
nominated for election as directors at any meeting of shareholders, and the
persons to be elected by the Board to fill any vacancy on the
Board.
During
fiscal 2009, the Nominating Committee met one time. The Board has
adopted a written charter setting forth the functions of the Nominating
Committee. This charter is available to shareholders in the “About
Us” section on our website, www.meas-spec.com.
The
Nominating Committee carefully considers all director candidates recommended by
our shareholders that are timely submitted in accordance with the procedures for
making such recommendations set forth herein, and the Nominating Committee does
not and will not evaluate such candidate recommendations any differently from
the way it evaluates other candidates. In its evaluation of each
proposed candidate, the Nominating Committee considers many factors including,
without limitation, the individual’s experience, character, demonstrations of
judgment and ability, and financial and other special expertise. The
Nominating Committee is also authorized to obtain the assistance of an
independent third party to complete the process of finding, evaluating and
selecting suitable candidates for director. Any shareholder who
wishes to recommend an individual as a nominee for election to the Board should
submit such recommendation in writing to the attention of Mark Thomson (who will
forward the recommendation to the Nominating Committee) through e-mail
([email protected]) or by mail to the Company (1000 Lucas Way, Hampton,
VA 23666, Attn: Chairman of Nominating Committee), together with information
regarding the experience, education and general background of the individual and
a statement as to why the shareholder believes such individual to be an
appropriate candidate for Director of the Company.
COMMUNICATIONS
WITH THE BOARD OF DIRECTORS
The
Company encourages shareholder communications with the Board of Directors but
does not have a formal process. All such communications should be
sent to Frank D. Guidone through the Company’s website
(www.meas-spec.com/myMEAS/investors/ceo_comment.asp) or by mail to the Company
(1000 Lucas Way, Hampton, VA 23666). Mr. Guidone will circulate them
to the other members of the Board. If the communication is directed
to a particular Director, Mr. Guidone will forward the communication to that
Director. The Company does not screen shareholder communications,
other than for security purposes.
COMPENSATION
OF DIRECTORS
For fiscal 2009, each of our
non-employee directors received an annual cash retainer of $35,000 payable in
equal quarterly installments in arrears. In addition, each of our
non-employee directors received an annual grant on December 1, 2008 of options
to purchase 5,000 shares of our common stock at an exercise price of $4.85 per
share. The options were granted under the Company’s 2008 Equity
Incentive Plan (the “2008 Equity Incentive Plan”). Directors who are
our employees do not receive additional compensation for serving on our Board of
Directors or on committees of the Board. Mr. Guidone, as President
and Chief Executive Officer, is the only member of the Board of Directors who is
also an employee. For fiscal 2009, all of our outside Directors (Messrs. Arnold,
Rishi, Thompson, Topfer and Uber), that is, Directors who are not employees or
full-time consultants of the Company, each received compensation as
follows:
Name
|
|
Fees
Earned
or
Paid in
Cash
($)
|
|
|
Option
Awards
($)
(1)
|
|
|
Total
($)
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John
D. Arnold
|
|
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35,000 |
|
|
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26,271 |
(2) |
|
|
61,271 |
|
Satish
Rishi
|
|
|
35,000 |
|
|
|
26,271 |
(3) |
|
|
61,271 |
|
Kenneth
E. Thompson
|
|
|
35,000 |
|
|
|
26,271 |
(4) |
|
|
61,271 |
|
Morton
L. Topfer
|
|
|
35,000 |
|
|
|
26,271 |
(5) |
|
|
61,271 |
|
R.
Barry Uber
|
|
|
35,000 |
|
|
|
26,271 |
(6) |
|
|
61,271 |
|
|
(1)
|
Represents
the dollar amount of expense recognized by the Company for financial
statement reporting purposes with respect to fiscal 2009 for options
granted to the Directors and, accordingly, includes amounts from awards
granted in and prior to fiscal 2009. The amounts were
calculated in accordance with Statement of Financial Accounting Standards
No. 123R (“FASB 123R”). For a more detailed discussion on the
assumptions used to calculate the fair value of our options, refer to Note
2(v) and 14 of the Notes to the Consolidated Financial Statements included
in our Annual Report on Form 10-K for the fiscal year ended March 31,
2009.
|
|
(2)
|
At
March 31, 2009, Mr. Arnold held options to purchase 26,000 shares of our
common stock.
|
|
(3)
|
At
March 31, 2009, Mr. Rishi held options to purchase 20,000 shares of our
common stock.
|
|
(4)
|
At
March 31, 2009, Mr. Thompson held options to purchase 15,000 shares of our
common stock.
|
|
(5)
|
At
March 31, 2009, Mr. Topfer held options to purchase 15,000 shares of our
common stock.
|
|
(6)
|
At
March 31, 2009, Mr. Uber held options to purchase 30,000 shares of our
common stock.
|
It is the
responsibility of the Compensation Committee to review and recommend to the
Board the appropriate structure and amount of Board compensation. The
Board makes the final determination with respect to Board
compensation. The Compensation Committee will consider whether
directors’ independence may be jeopardized if director compensation exceeds
customary levels, if the Company makes substantial charitable contributions to
organizations with which a director is affiliated, or if the Company enters into
consulting contracts with (or provides other indirect forms of compensation to)
a director or an organization with which the director is affiliated. Under its charter, the
Compensation Committee has the authority to retain third-party consultants,
including compensation consultants. For fiscal 2009, the Compensation
Committee did not engage any compensation consultants for purposes of its review
and recommendation of director compensation.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 2009, the
Compensation Committee consisted of R. Barry Uber (Chairman), Morton L. Topfer
and Kenneth E. Thompson. None of the members has ever been an officer
or employee of the Company or any of its subsidiaries, and none of our executive
officers currently serves, or in the past fiscal year has served, as a member of
the board of directors or compensation committee of any entity that has one or
more executive officers serving on our Board of Directors or Compensation
Committee.
CODE
OF ETHICS
The
Company has adopted a Code of Ethics in accordance with SEC regulations,
applicable to the Company’s Chief Executive Officer, senior financial officers
and the Board of Directors. The Code of Ethics is available to
shareholders in the “About Us” section on our website, www.meas-spec.com.
RELATED
PERSON TRANSACTIONS
The
Company has adopted a policy regarding the review and approval of related person
transactions. In the event that the Company proposes to enter into a
related person transaction, the transaction must be reported to the Audit
Committee. As provided in its charter, the Audit Committee is
required to review and approve each related person transaction and any
disclosures that are required by Item 404 of Regulation S-K. The
Audit Committee reviews each related person transaction on a case by case
basis.
For
purposes of this policy, a “related person transaction” has the same meaning as
in Item 404 of Regulation S-K: a transaction, arrangement or relationship (or
any series of related transactions, arrangements or relationships) in which the
Company is, was or will be a participant and the amount involved exceeds
$120,000 and in which any “related person” has, had or will have a direct or
indirect material interest.
For
purposes of this policy, a “related person” has the same meaning as in Item 404
of Regulation S-K: any person who was a director, a nominee for director or an
executive officer of the Company during the Company’s preceding fiscal year (or
an immediate family member of such a director, nominee for director or executive
officer of the Company) or a beneficial owner of more than five percent of our
outstanding common stock (or an immediate family member of such
owner).
REPORT
OF THE AUDIT COMMITTEE
The Audit Committee is appointed by the
Board to assist the Board in monitoring:
|
·
|
the
integrity of the financial statements of the
Company,
|
|
·
|
the
independent registered public accounting firm’s qualifications and
independence,
|
|
·
|
the
performance of the Company’s independent registered public accounting
firm, and
|
|
·
|
the
compliance by the Company with legal and regulatory
requirements.
|
The Audit Committee meets with
management periodically to consider the adequacy of the Company’s internal
control over financial reporting and the objectivity of its financial
reporting. The Audit Committee discusses these matters with the
Company’s independent registered public accounting firm and with appropriate
Company financial personnel.
The Audit Committee regularly meets
privately with the independent registered public accounting firm, which has
unrestricted access to the Committee.
The Audit Committee selects, evaluates
and, where appropriate, replaces the independent registered public accounting
firm, and reviews periodically their performance, fees and independence from
management.
Each of the Directors who serves on the
Audit Committee is “independent” for purposes of the NASDAQ listing standards,
including the heightened independence standards for audit committees under the
Exchange Act.
The Board has adopted a written charter
setting out the audit related functions the Audit Committee is to perform and
reviews the charter on a periodic basis to assure that the functions and duties
of the Audit Committee will continue to conform to applicable SEC and stock
exchange regulations as they may be amended or modified in the
future.
Management has primary responsibility
for the Company’s financial statements and the overall reporting process,
including the Company’s system of internal control over financial
reporting. The independent registered public accounting firm audits
the annual financial statements prepared by management, expresses an opinion as
to whether those financial statements fairly present the financial position,
results of operations and cash flows of the company in conformity with
accounting principles generally accepted in the United States, expresses an
opinion on the Company’s internal control over financial reporting and discusses
with the Audit Committee any issues they believe should be raised with the
Committee. The Audit Committee monitors these processes, relying
without independent verification on the information provided to the Committee
and on the representations made by management and the Company’s independent
registered public accounting firm.
This year, the Audit Committee reviewed
the Company’s audited financial statements as of and for the fiscal years ended
March 31, 2009 and 2008, respectively, and met with both management and KPMG
LLP, the Company’s independent registered public accounting firm for fiscal
years 2009, 2008 and 2007 to discuss those financial statements and for each of
the fiscal years in the three-year period ended March 31,
2009. Management has represented to the Audit Committee that the
financial statements were prepared in accordance with accounting principles
generally accepted in the United States.
The Audit Committee received from KPMG
LLP the written disclosure and the letter required by the applicable
requirements of the Public Company Accounting Oversight Board regarding the
independent accountant’s communications with the audit committee concerning
independence, and has discussed with the independent accountant the independent
accountant’s independence. The Audit Committee also discussed with
KPMG LLP any matters required to be discussed by Statement on Auditing Standards
No. 61 as amended (AICPA, Professional Standards, Vol
1. AU 380) as adopted by the Public Company Accounting Oversight Board in Rule
3200T.
Based on these reviews and discussions,
the Audit Committee recommended to the Board that the Company’s audited
financial statements be included in the Company’s Annual Report on Form 10-K for
the fiscal year ended March 31, 2009.
John D.
Arnold (Chairman)
Satish
Rishi
Kenneth
E. Thompson
COMPENSATION
DISCUSSION AND ANALYSIS
Through
the following questions and answers, we explain all material elements of our
executive compensation program.
General
What
are the objectives of our executive compensation programs?
Measurement
Specialties, Inc. is a leader in the design, development and manufacture of
sensors and sensor-based systems for original equipment manufacturers and end
users, based on a broad portfolio of proprietary technologies. We
operate in highly fragmented markets that are characterized by high levels of
competition. We believe that we need qualified executive officers who
are capable of independent thinking and responsible decision making in order to
compete in the markets we serve. Under the direction of the
Compensation Committee of our Board of Directors, we seek to compensate our
executive officers at levels that are competitive so that we may attract, retain
and motivate highly capable executive officers. We also seek to
design our compensation programs to align our executive officers’ interests with
those of our shareholders and, in doing so, build long-term value for our
shareholders.
Our fiscal 2009 executive compensation,
including base compensation and stock option grants awarded for and in fiscal
2009, reflect our efforts to realize the objectives of our executive
compensation programs, in spite of reductions in compensation in response to one
of the worst global economic recessions in decades.
What
impact did the economic recession have on our executive compensation programs in
fiscal 2009?
In
response to the global economic recession and the resulting impact on our
financial performance, we proactively reduced our fiscal 2009 executive
compensation. During the third quarter of fiscal 2009, we reduced
executive salaries and eliminated year-end bonuses and 401(k) matching
contributions. Additionally, we reorganized the three business group
structure into one operating segment, effecting certain changes within the
management group to reduce executive and overall headcount and to better focus
on cross selling. Because of the significant reductions in cash
compensation to our executives and to encourage retention, the Compensation
Committee made somewhat larger awards of stock options in fiscal 2009 than in
fiscal 2008. Total direct compensation (base salary, bonus, other cash
compensation such as the 401(k) match, and stock options) to executive officers
was lower than previous years, but considered appropriate considering the
objectives of the Company’s compensation programs.
What
are the principal components of our executive compensation
programs?
Overview: The
Company’s policy for compensating our executive officers is intended to support
the Company’s short-term and long-term goals by providing our executive officers
an appropriate mix of compensation elements that effectively balance short-term
annual incentives that reward executives for current performance and the
achievement of near-term goals with long-term incentives that reward executives
for performance over a sustained period. To support this policy, our
executive compensation programs consist of three principal
components:
|
·
|
long-term
incentive compensation.
|
We have
selected programs that we believe are commonly used by public companies, both
within and outside of our industry, because we believe commonly used programs
are well understood by our shareholders, employees and
analysts. Moreover, we selected each program only after we first
confirmed, with the assistance of outside professional advisors, that the
program comports with settled legal and tax rules. We describe each
of these principal components below.
Relationship of the principal
components: The Compensation Committee exercises its judgment
in making executive compensation decisions, and considers various factors within
the overall framework of our executive compensation program. While we
review each element of compensation individually and in the aggregate, we do not
have a specific policy on the percentage of an executive officer’s total
compensation that should be “short-term” versus “long-term” nor do we have a
specific policy on the percentage of total compensation that should be “cash”
versus “equity.” We allocate the three principal components of our
executive compensation programs in a manner that we believe optimizes each
executive officer’s contribution to us.
Base Salary: We
believe base salaries provide basic compensation at a level that allows us to
recruit and retain key executive talent. Base salaries are based on a
combination of factors, primarily the performance of the executive, relative
level of responsibility and experience, salaries of similarly situated executive
officers at peer companies and, with respect to the base salaries of executive
officers other than our Chief Executive Officer, the recommendations of our
Chief Executive Officer. Although our Compensation Committee annually
reviews salaries of our executive officers, our Compensation Committee does not
automatically adjust base salaries if it concludes that adjustments to other
components of the executive’s compensation would be more
appropriate. In addition, as discussed below, the employment
agreements that we have with certain of our executive officers provide for fixed
annual base salaries or minimum annual base salaries, thereby limiting the
discretion of the Compensation Committee with respect to compensation decisions
regarding base salaries.
Annual
Incentives: We have provided annual incentive opportunities to
executive officers to motivate their performance in achieving our current year
business goals. However, no such annual incentives were paid in 2009
in response to the global economic recession and its impact on our financial
performance. In setting the respective potential bonus levels of the
executive officer, the Compensation Committee considers such factors as the
executive officer’s individual performance and relative level of
responsibility. Each year, we adopt an annual incentive compensation
plan that establishes specifically identified payout opportunities dependent
upon achieving pre-determined financial performance targets and personal
performance objectives. When payments are made under our annual
incentive compensation plan, they are made in cash after the fiscal year-end
results are finalized.
Long-Term Incentive
Compensation: Our long-term incentive program is focused on
rewarding performance that enhances shareholder value through the use of
equity-based awards that link compensation to the value of our common stock and
strengthen the alignment of management and shareholder
interests. Long-term incentive awards granted by the Compensation
Committee consist of stock options with performance and extended time-based
vesting criteria, as well as a limited number of restricted stock units with
extended time-based vesting criteria. Restricted stock units grants
have been limited and to date, only to certain European-based
executives.
The
Compensation Committee believes that stock options promote the objectives of our
executive compensation program in the following ways:
|
·
|
Time-based
vesting encourages officers to take a long-term view of our performance
and promote stability within our executive ranks, facilitating realization
of our long-term objectives to create shareholder
value.
|
|
·
|
Notwithstanding
the recent stock market declines, given the long tenure of our named
executive officers, each holds significant unexercised stock options that
are expected to have significant value over the long
term.
|
|
·
|
Stock
options have been one of our most effective tools in overall compensation
in recruiting, motivating and retaining skilled officers, and we believe
they will continue to be effective tools over the
long-term.
|
The
number of stock options subject to an award has been computed by taking into
account the Company’s performance, the executive officer’s individual
performance, our retention objectives, and other factors.
Stock
options are granted on the first day of the month following the day on which
they are approved by the Compensation Committee and are priced at 100% of fair
market value on the date of grant, which under the 2008 Equity Incentive Plan is
the closing market price of our common stock on the date of the
grant. Executive officers benefit from stock option grants only to
the extent the price of our common stock appreciates above the exercise price of
the stock options.
Other Benefits: In
addition to the components of compensation discussed above, we also provide
certain other benefits to our executive officers to ensure that our executive
compensation program remains competitive. These other benefits
include 401(k) matching, and health and life insurance premiums, and in certain
cases housing reimbursement and family travel reimbursement, which are
specifically disclosed in the “All Other Compensation” column of the Summary
Compensation Table on page 29 of this proxy statement. Our
Compensation Committee reviews annually the dollar value of these other benefits
to the executive officers and the cost of providing these other benefits to the
Company. However, such review does not influence the Compensation
Committee’s decisions regarding the determination of the principal elements of
an executive officer’s current level of compensation.
What
do we seek to reward and accomplish through our executive compensation
programs?
We
provide annual incentive opportunities primarily to provide performance
incentives to our key employees to meet annual performance
objectives. Our annual corporate objectives are measured by sales
increases, net income, EBITA margins (defined as earnings before deduction of
interest, taxes and amortization (“EBITA”) to sales) and other financial metrics
of performance, such as working capital reductions. In the case of
our Chief Executive Officer, our Compensation Committee has also taken into
account the strategic direction he has provided the Company and his stewardship
of the Company since the beginning of his involvement with the
Company. We provide long-term incentive awards primarily to motivate
and reward key employees over longer periods. Through vesting and
forfeiture provisions that we include in awards of stock options, we provide an
additional incentive to executives to act in furtherance of our longer-term
interests. An executive whose employment with us terminates before
equity-based awards have vested, either because the executive has not performed
in accordance with our expectations or because the executive chooses to leave,
will generally forfeit the unvested portion of the award. As a
result, the Compensation Committee believes that providing the executive
officers with compensation in the form of stock options serves to encourage
retention of the executive officers.
How
do we determine the amount of each principal component of compensation to our
executives?
Our
Compensation Committee exercises judgment and discretion in setting compensation
for our executive officers. The Committee exercises its judgment and
discretion only after it has first reviewed peer company practices, evaluated
the recommendations of our Chief Executive Officer and evaluated our corporate
performance. See “To what extent do we benchmark total compensation
and material elements of compensation and what are the benchmarks that we use?”
below.
Our Chief
Executive Officer, Chief Financial Officer and certain Vice-Presidents each have
an employment agreement with us that provides for, among other things, an annual
salary and for an annual bonus, including, in certain cases, a minimum annual
bonus, thereby limiting the discretion of the Compensation Committee with
respect to their compensation, as well as certain post-employment severance
payments. See “Executive Agreements and Related Transactions” below
for a discussion of each of these employment agreements.
What
is the role of our executive officers in the compensation process?
Our
Compensation Committee meets periodically with our Chief Executive Officer to
address executive compensation, including the rationale for our compensation
programs and the efficacy of the programs in achieving our compensation
objectives. The Compensation Committee also relies on our executive
officers to evaluate compensation programs to assure that they are designed and
implemented in compliance with laws and regulations, including SEC reporting
requirements. The Compensation Committee relies on the
recommendations of our Chief Executive Officer regarding the performance of
individual executive officers, other than the Chief Executive
Officer. At meetings in fiscal 2009, the Compensation Committee
received recommendations from our Chief Executive Officer regarding salary
adjustments, annual incentive targets and stock option awards for our executive
officers. The Compensation Committee believes that it is important
for it to receive the input of the Chief Executive Officer on compensation
matters since he is knowledgeable about the activities of our executive officers
and the performance of their duties and responsibilities, as well as their
contributions to the growth of the Company and its business.
To
what extent do we benchmark and what are the benchmarks that we
use?
The
Compensation Committee compares each element of total compensation and total
compensation in the aggregate to compensation provided by peer groups of
publicly-traded companies in the sensory devices and similar industries in
evaluating the compensation of our executive officers. The Committee
does not engage in formal benchmarking or rely on peer group comparisons to set
executive compensation for our executive officers other than our Chief Executive
Officer. Instead, the Compensation Committee uses peer group
comparisons to assess the reasonableness of its executive compensation decisions
in an effort to ensure that our compensation program remains
competitive.
Under its
charter, our Compensation Committee has the sole authority to retain, and
terminate, any third-party consultants to assist in the evaluation of executive
compensation, and the sole authority to approve such consultant’s fees and other
retention terms. For fiscal 2008, 3C Consulting was retained to
assist our Compensation Committee in its determination of our Chief Executive
Officer’s long-term incentive compensation award. For fiscal 2009,
our Compensation Committee did not engage 3C Consulting or any other such
consulting firm in assisting in the determination of the Chief Executive
Officer’s long-term incentive compensation.
We aim to
provide total target compensation for our Chief Executive Officer that
approximates the 65th
percentile compared to total target compensation for chief executive officers at
companies in our industry and of similar size based on data from published
surveys. The Board of Directors believes that providing our Chief
Executive Officer with total target compensation that approximates the 65th
percentile of the peer group is appropriate given his leadership and role in the
growth in sales and profitability that we have experienced over the past four
fiscal years prior to 2009, and his addressing the many challenges confronting
the Company in light of the current global economic recession.
The
following table sets forth the total target compensation information reviewed by
the Compensation Committee for our Chief Executive Officer for fiscal year
2009:
Component of Compensation
|
|
Fiscal 2009 Actual or Target
Compensation
|
|
Finding
|
|
Base
Salary
|
|
$ |
450,000 |
|
Base
salary approximates the 47th
percentile of the peer group in 2008.
|
|
Annual
Incentive Compensation
|
|
$ |
337,500 |
|
Target
annual incentive compensation is 75% of base salary.
|
|
Total
Annual Cash Compensation
|
|
$ |
787,500 |
|
Total
annual cash compensation approximates the 65th percentile of the peer
group in 2008.
|
|
Estimated
Value of Long-Term Incentive(1)
|
|
$ |
1,098,000 |
|
This
amount represents the dollar value of the long-term incentive award needed
to reach the 65th percentile of the peer group for fiscal 2008 total
compensation.
|
|
Total
Target Compensation
|
|
$ |
1,885,500 |
|
This
amount represents the 65th percentile of the peer group in
2008.
|
|
(1)
|
Assumes
the grant of 87,840 options using a Black Scholes value of $12.50, which
assumes a grant date stock price and exercise price of $25.97, which was
the closing price for our common stock on November 6, 2007, volatility of
50%, risk-free-rate of return of 3.99%, five-year exercise term and 0%
dividend yield.
|
For
fiscal 2009, the Compensation Committee awarded our Chief Executive Officer
50,000 options, which were valued at $16,277 based on the dollar amount
recognized in fiscal 2009 using the grant date fair value of the equity award
computed in accordance with SFAS 123R. This long-term incentive award
together with prior awards and the total annual cash compensation resulted in
total actual compensation for our Chief Executive Officer in fiscal 2009 of
$817,837 as set forth in the Summary Compensation Table on page 29 of this proxy
statement.
What
specific items of corporate performance do we take into account in setting
compensation policies and making compensation decisions?
Our
corporate performance primarily impacts the annual incentives and long-term
incentive compensation that we provide our executive officers. We use
or weight items of corporate performance differently in our annual incentive
awards and long-term compensation awards and some items are more determinative
than others.
Goals for
executive officers in fiscal 2009 varied because the scope of responsibility and
authority of executive officers differ. Goals are generally developed
around metrics tied to our growth and profitability, including increases in
revenue, decreases in expenses, completion of developments in accordance with
budgets and timelines, execution of acquisitions in accordance with targets,
enhanced operational efficiencies and development of additional opportunities
for our long-term growth.
How
do we determine when awards are granted, including awards of equity-based
compensation?
Historically,
our Compensation Committee has awarded annual bonuses in the quarter following
the fiscal year end. The Compensation Committee makes an annual grant
of stock options, following review of pertinent financial information and
industry data. In addition, the Compensation Committee conducts a
thorough review of stock option awards and grant procedures
annually. In the case of newly-hired executive officers or
promotions, the Compensation Committee has made awards simultaneous with the
executive’s hire or promotion date. The date on which the
Committee has met has varied from year to year, primarily based on the schedules
of Committee members and the timing of compilation of data requested by the
Committee.
We have
not engaged in backdating options. We do not have any program or plan
to time option grants in coordination with the release of material non-public
information.
What
factors do we consider in decisions to increase or decrease compensation
materially?
We
decreased the base salaries of our executive officers in 2009 in response to the
global economic recession. Historically, however, we have generally
not decreased the base salaries of our executive officers or reduced their
annual incentive compensation targets. In fact, under the terms of
the employment agreements with certain of our executive officers, we are unable
to do so without consent of the executive. As the employment
agreements provide for annual salaries and for an annual incentive payment,
including, in certain cases, a minimum annual incentive payment. When
an executive officer’s performance falls short of our expectations, we believe
our interests are best served by replacing the executive officer with an
executive who performs at the level we expect. Annual incentive
compensation may vary since the amount awarded to an executive officer depends
in part upon his individual performance. As a result, total
compensation is effectively decreased if individual performance is
poor. The factors that we consider in decisions to increase
compensation include the individual performance of the executive and our
corporate performance, as discussed above.
To
what extent does our Compensation Committee consider amounts accumulated or
potentially realizable from prior compensation in setting current
compensation?
The
primary focus of our Compensation Committee in setting executive compensation is
the executive officer’s current level of compensation. Although the
Compensation Committee reviews accumulated or potentially realizable
compensation, including from previously granted stock options, such review
generally does not influence the Compensation Committee’s decisions regarding
the determination of an executive officer’s current level of
compensation. This reflects the Compensation Committee’s view that an
executive officer’s compensation level should reflect the executive’s
performance, the Company’s performance and the executive’s contribution to the
Company’s performance. The Compensation Committee further believes
that reducing an executive officer’s annual direct compensation based on the
value of accumulated or potentially realizable compensation would weaken the
competitiveness of the Company’s compensation program and make it more difficult
to attract and retain key executive talent.
What
are our equity or other security ownership requirements for
executives?
We
provide our executive officers with a commensurate portion of their total
compensation in the form of stock options and restricted stock units, which are
intended to reward performance that enhances value for all of our shareholders
and strengthen the alignment of management and shareholder
interests. We generally believe that our executive officers should be
able to share in the value that they create for all of our shareholders
throughout their careers with us. Therefore, we do not maintain
minimum share ownership requirements for our executive officers.
Why
have we entered into agreements with executive officers that provide for
post-employment payments, including following a change-in-control?
The
employment agreements with our Chief Executive Officer and our Chief Financial
Officer, as well as with other executive officers of the Company, provide for
post-employment severance absent a change of control if we terminate the
applicable executive (other than for cause) prior to the expiration of the
stated employment term. We believe this approach provides us with the
flexibility to terminate the applicable executive at any time and for any reason
while providing the executive with the benefit of his or her bargained for
compensation. The Company’s obligations under these agreements would
be assumed by a successor to the Company following a change in
control. We believe it is in our best interest to have agreements
with certain of our executive officers that maintain their focus on, and
commitment to, us notwithstanding a potential merger or other change of
control. The terms of these employment agreements, including the
compensation payable thereunder, were based on our review of the market for key
executive talent at the time of hiring and negotiations with the executive
officer. Additionally, these agreements contain confidentiality and
non-competition provisions.
Do
we have a policy regarding the recovery of awards or payments if corporate
performance measures upon which awards or payments are based are restated or
adjusted in a manner that would reduce the size of an award or
payment?
We have
not adopted a policy that provides for recovery of an award if a performance
measure used to calculate the award is subsequently adjusted in a manner that
would have reduced the size of the award. Although we have not
previously experienced any such adjustment, if we were to experience such an
adjustment, our Compensation Committee would assess the circumstances relating
to the adjustment and take such actions as it believes to be appropriate,
including, potentially, an action to recover the excess portion of the
award.
How
do accounting considerations impact our compensation practices?
Accounting
consequences are not a material consideration in designing our compensation
practices. However, we designed our fiscal 2009 equity awards so that
their overall cost fell within a budgeted dollar amount and so that the awards
would qualify for classification as equity awards under SFAS No.
123R. Under SFAS No. 123R the compensation cost recognized for an
award classified as an equity award is fixed for the particular award and,
absent modification, is not revised with subsequent changes in market prices of
our common shares or other assumptions used for purposes of the
valuation.
How
do tax considerations impact our compensation practices?
Prior to
implementation of a compensation program and awards under the program, we
evaluate the federal income tax consequences, both to us and to our executives,
of the program and awards. In certain cases, we have adjusted the
form or manner of some of our compensation programs in light of tax planning
considerations. Before approving a program, our Compensation
Committee receives an explanation from our outside professionals as to the tax
treatment of the program and awards under the program and assurances from our
outside professionals that the tax treatment should be respected by taxing
authorities.
Section
162(m) of the Internal Revenue Code limits our tax deduction each year for
compensation to each of our Chief Executive Officer and our four other highest
paid executive officers to $1 million unless, in general, the compensation is
paid under a plan that is performance-related, non-discretionary and has been
approved by our shareholders. Generally, Section 162(m) has not had a
significant impact on our compensation programs.
Fiscal
2009 Executive Compensation
Base
Salaries
As noted
above, our Compensation Committee annually reviews salaries of our executive
officers. However, as discussed above, the employment agreements that
we have with certain of our executive officers provide for annual base
salaries. Under their employment agreements, Messrs. Guidone,
Thomson, Smith and MacGibbon are entitled to minimum annual base salaries of
$450,000, $240,000, $200,000 and $213,000, respectively. However, the annual
base salaries for Messrs. Guidone, Thomson, Smith and MacGibbon were reduced in
2009 to $396,000, $216,000, $180,000, and $191,700, respectively, in response to
the global economic recession. These reductions are in effect through
September 2009, at which time such individuals’ prior annual base salaries will
be reinstated.
In making
base salary decisions for fiscal 2009 for our executive officers listed in the
Summary Compensation Table on page 29 of this proxy statement (“named executive
officers”), the Compensation Committee considered (1) the terms of the named
executive officer’s employment agreement, if any, (2) the performance of the
named executive officer, (3) his level of responsibility and experience and (4)
overall Company performance levels. The relative weight given to each
of these factors varied by position and individual and was within the sole
discretion of the Compensation Committee. As noted above, although
the Compensation Committee reviews base salaries annually, it does not
automatically adjust base salaries on an annual basis. In response to
on the economic recession, as noted, the Compensation Committee approved certain
decreases in the annual base salaries and no bonus amounts were paid under the
non equity incentive plan.
Annual
Incentive Compensation
For
fiscal 2009, we adopted the fiscal year 2009 Management Variable Compensation
Plan (the “2009 VC Plan” or the “Non-Equity Incentive Compensation
Plan”). The 2009 VC Plan determined the amount of annual incentive
compensation to be awarded to each of the three then-existing groups within the
Company (Position/Vibration/Piezo, Pressure/Force and Humidity/Temperature) as
follows.
Accrual
Calculation. During the first two quarters in fiscal year
2009, we accrued to a target pool an amount equal to a certain percentage of the
Company’s year-to-date EBITA at the end of such quarter. However,
during the third quarter, these accruals were reversed with the decision to not
to pay any bonus amounts in 2009 due to the economic recession. The
percentage of year-to-date EBITA that was initially accrued to the target pool
was determined based upon meeting certain thresholds measured by the
year-to-date ratio of the Company’s EBITA margin.
YTD EBITA Margin
|
|
Bonus Accrual
(as % of YTD EBITA)
|
>16% of sales
|
|
12%
|
<13% of sales
|
|
2%
|
>13% but <16% of sales
|
|
2% to 12%, pro-rata
|
Group
Allocation. No group or individual bonus amounts were accrued
or paid, but if such amounts had been accrued and paid, the plan contemplated
that a specific percentage of the total accrual would be divided among the
groups based on the number of “credits” each group earned, divided by the total
number of “credits.” Groups earned credits based on their operating
income, organic growth and working capital reduction. The value of
each credit was the total target accrual (defined above), divided by the number
total number of earned credits. Earned credits were to be calculated
as follows:
|
·
|
Adjusted
EBITA. Each group would be awarded one credit for every
$1,000 of EBITA (earnings before interest, taxes and amortization of
acquired intangibles and other non-recurring expenses, but after
allocation of option expense). The earned credits would then be
adjusted up based on the group’s organic growth. For example,
if the Pressure/Force group were to earn $12 million in EBITA, and posted
20% organic growth, it would have earned 14,400 credits
(12,000*1.2).
|
|
·
|
Working Capital (Assets)
Reduction. Working capital reduction is the reduction of
working capital through improved collections of trade receivables and
higher inventory turns. Each group would be awarded one credit
for every $1,000 reduction in working capital assets (“WCA”), normalized
for net sales. For example, if the Pressure/Force group had a
fourth quarter baseline of $23 million in WCA and increased sales 20% in
fiscal 2009 as compared to fiscal 2008, the normalized baseline WCA would
have been $27.6 million. If the actual fiscal 2009
WCA for the Pressure/Force group had been $25 million (measured as the
average WCA for the fourth quarter of fiscal 2009), the Pressure/Force
group would have earned 2,600 bonus credits
(27,600-25,000).
|
Discretionary
Allocation. No discretionary bonus amounts were accrued or
paid in 2009, but if such amounts had been allocated, the plan contemplated that
20% of the total bonus accrual would be included in a pool that was to be
distributed to each group subjectively by our Chief Executive Officer in his
sole discretion, based on the achievement of various quantitative and
non-quantitative measures that were not captured under the VC Plan.
Employee
Distribution. No bonus amounts were accrued or paid in 2009,
but under the plan, if such amounts had been distributed, the plan contemplated
that Messrs. Guidone, Thomson, Smith, Allier and MacGibbon were assigned target
bonus percentages of 75%, 50%, 50%, 60% and 60%, respectively, of their
respective base salaries. At the beginning of the fiscal year, all
eligible employees were required to have objective, measurable goals defined and
documented with their manager, as discussed under “Annual Incentive
Compensation” above. Based on performance to these goals, the plan
contemplated that each group would calculate the total funds required to meet
the bonus needs based on individual performance (“Target
Pool”). Groups would then scale this amount (up or down) depending on
the actual group plus discretionary allocation, as compared to Target
Pool. Included in each group pool was the allocation of shared
resources, including corporate resources. Accordingly, corporate
staff would have received a portion of their bonus based on the results of each
group, thereby tying corporate (or shared) performance to all
groups.
For
fiscal 2009, no amounts were accrued or earned for the target
pool. However, if such amounts had been accrued, the plan
contemplated that the target pool would be allocated among the Company’s various
business groups based on three factors: (1) each particular business group’s
EBITA and organic sales growth; (2) the working capital reduction of each group;
and (3) the discretion of our Chief Executive Officer. Based on the
foregoing, the named executive officers did not receive the amounts set forth
under the “Non-Equity Incentive Plan Compensation/Bonus” column of the Summary
Compensation Table on page 29 of this proxy statement.
Long-Term
Incentive Compensation
The
Compensation Committee uses stock options and restricted stock units as an
important part of the long-term incentive compensation program and believes such
awards continue to be an effective way to link an executive officer’s
compensation to the performance of the Company. Awards are intended
to encourage each of the executive officers to achieve established performance
goals, to continue in the employ of the Company, to enhance their incentive to
perform at the highest level, and in general, to further the best interests of
the Company and its shareholders
For
fiscal 2009, the Compensation Committee considered the following factors in
determining the size of each stock option grant awarded to each named executive
officer:
|
·
|
the
executive officer’s individual
performance;
|
|
·
|
the
executive officer’s potential future contributions to the Company and
level of responsibility;
|
|
·
|
retention
issues and concerns; and
|
|
·
|
the
cost of the awards to the Company.
|
Based on
the foregoing, the Compensation Committee awarded the named executive officers
the number of stock options set forth in the “Grants of Plan-Based Awards in
Fiscal Year 2009” table beginning on page 31 of this proxy
statement.
Compensation
Committee Report
Our
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis with our management and based on the review and discussion
recommended to the Board that the Compensation Discussion and Analysis be
included in this proxy statement and thereby incorporated by reference into our
Annual Report on Form 10-K. The Board accepted the Compensation
Committee’s recommendation. This report is made by the undersigned
members of the Compensation Committee:
R. Barry
Uber (Chair)
Morton L.
Topfer
Kenneth
E. Thompson
EXECUTIVE
OFFICERS
Our
executive officers are as follows as of July 29, 2009:
Name
|
Age
|
Position
|
|
|
|
Frank
Guidone
|
44
|
Chief
Executive Officer, President and Director
|
|
|
|
Mark
Thomson
|
41
|
Chief
Financial Officer and Secretary
|
|
|
|
Glen
MacGibbon
|
47
|
Executive
Vice President
|
|
|
|
Jean-Francois
Allier
|
56
|
Executive
Vice President
|
|
|
|
Steven
Smith
|
60
|
Chief
Operating Officer
|
|
|
|
Mitch
Thompson
|
54
|
Vice
President – Technology
|
|
|
|
Jeffrey
Kostelni
|
42
|
Vice
President – Finance
|
Officers are not appointed for fixed
terms. Biographical information for our current officers who are not
also continuing Directors follows:
Mark Thomson was appointed as
Chief Financial Officer and Secretary of the Company effective April 2,
2007. Prior to his appointment, Mr. Thomson held the position of Vice
President and Chief Financial Officer of Allied Aerospace Industries, Inc., a
provider of complex engineering solutions for aerospace & defense
contractors and government agencies, since May 2002. Mr. Thomson
served as the Senior Director of Finance & Accounting at the Launch Systems
Group of Orbital Sciences Corporation, a designer and manufacturer of small
space and rocket systems, from January 2001 to May 2002 and Group Controller
from June 1998 to January 2001, prior to which he held financial management
positions with several subsidiaries of Lockheed Martin, a global designer and
manufacturer of aeronautics, electronic systems, information systems and space
systems, from 1991 to 1998. Mr. Thomson is a graduate of the Lockheed
Martin Financial Management program, holds an MBA from the University of Nevada,
Reno, and a BA in Financial Economics from Saint Anselm College and is a
graduate of the Harvard Business School General Management program.
Glen MacGibbon has served as
Executive Vice President since March 2009. Prior to that, he was Group Vice
President - Pressure/Force since April 1, 2007, prior to which he served as Vice
President, Global Sales and Marketing of our Sensor Products Division since
March 1, 2005. Prior to that, he was Director of Global Sales &
Marketing since joining the Company in 1998. Mr. MacGibbon joined
Measurement Specialties through our 1998 acquisition of PiezoSensors from AMP
Incorporated, where he held various sales management roles since
1989. Previously he was working in both regional sales and technical
support roles for the Riston Division of Dupont Electronics, a supplier of
electonics and advanced display materials. He holds a B.S. in
Mechanical Engineering from Bucknell University, and an M.B.A. from Illinois
Benedictine College.
Jean-François Allier has
served as Executive Vice President since March 2009. Prior to that, he served as
Group Vice President - Humidity/Temperature, since December 31, 2007, having
previously served as Group Vice President - Humidity/Chemical/Gas effective
April 1, 2007 until December 31, 2007, and as Vice President and General Manager
of Europe for the Sensor Products Division from March 2005 until April
2007. He joined Measurement Specialties in December 2004, through the
Company’s acquisition of Humirel SA. Mr. Allier began his career as a
financial analyst for a French regional bank where he remained until
1978. He later held various positions throughout Europe with Motorola
Semiconductors. His experience at Motorola includes engineering,
product marketing, research and development, and business management. In 1998,
he founded Humirel SA and remained as President and CEO until its acquisition in
December 2004 by the Company. Mr. Allier holds an M.S. in Engineering
from Ecole des Mines and a D.E.A. in Material Science.
Steven Smith has served as
Chief Operating Office since March 2009. Prior to that, he served as Vice
President/General Manager – Asia since January 2006. Prior to joining the
Company in December 2005, Mr. Smith spent five years as Vice President/General
Manager of a wholly owned subsidiary of Compass Aerospace, Inc.,
a manufacturer of precision aircraft parts; five years in management
consulting in the product development and private equity/due diligence practice
areas of George Group, Inc., a global management consulting, technology services
and outsourcing company; and 19 years combined with the aerospace electronics
firms of Rockwell International, a manufacturer of defense and
aerospace products, and Electrospace Systems, a manufacturer of electronic
equipment and systems. Mr. Smith has held operational, engineering,
marketing, financial and general management positions in his varied work
experience. Mr. Smith received a B.A. in Economics (with minor
studies in engineering) from the University of Southern California and a MBA
(Finance) from the University of Louisville.
Mitch Thompson was appointed
Vice President - Technology effective April 7, 2008, having previously served as
Global Engineering Director, Piezo Electric Products. Mr. Thompson
joined Measurement Specialties through our 1998 acquisition of PiezoSensors from
AMP Incorporated, a designer and manufacturer of sensor systems and
applications, where he held various technical and management roles since
1986. He holds a B.S. in Meteorology (atmospheric physics) from Penn
State University.
Jeffrey Kostelni was
appointed Treasurer and Vice President of Finance of the Company effective
January 14, 2008, having previously served as Vice President of Finance
effective November 20, 2006 until January 14, 2008, as Corporate Controller from
May 15, 2005 until November 20, 2006, and as SEC and Technical Accounting
Director from June 7, 2004 until May 15, 2005. Prior to joining the
Company, he was Chief Financial Officer and Treasurer of Bontex, Inc., an
international specialty fiberboard manufacturer, from 1994 to 2004, and held
various positions in the audit department of Deloitte & Touche, a public
accounting firm, from 1988 to 1993. He holds a Bachelor of Science degree
in Accountancy from Villanova University and is a Certified Public
Accountant.
EXECUTIVE
COMPENSATION
Summary
Compensation. The following table contains summary information
concerning the annual compensation for our principal executive officer (“CEO”),
principal financial officer (“CFO”), our three most highly compensated executive
officers other than our CEO and CFO for the fiscal years ended March 31, 2009,
March 31, 2008 and March 31, 2007:
Name and
Principal Position
|
|
Year
|
|
Salary
($)
|
|
|
Non-
Equity
Incentive
Plan
Compensation /
Bonus
($)
|
|
|
Option
Awards
($) (1)
|
|
|
All Other
Compensation
($) (2)
|
|
|
Total
($)
|
|
Frank
Guidone
|
|
2009
|
|
|
439,892 |
|
|
|
— |
|
|
|
368,886 |
|
|
|
10,639 |
(4) |
|
|
817,837 |
|
President
and Chief
|
|
2008
|
|
|
450,000 |
|
|
|
139,000 |
(5) |
|
|
398,152 |
|
|
|
17,222 |
(6) |
|
|
1,004,374 |
|
Executive
Officer (3)
|
|
2007
|
|
|
450,000 |
|
|
|
150,000 |
(7) |
|
|
281,500 |
|
|
|
13,500 |
(8) |
|
|
895,000 |
|
Mark
Thomson
|
|
2009
|
|
|
228,200 |
|
|
|
— |
|
|
|
167,499 |
|
|
|
— |
|
|
|
394,852 |
|
Chief
Financial Officer (9)
|
|
2008
|
|
|
230,000 |
|
|
|
50,000 |
(5) |
|
|
231,618 |
|
|
|
— |
|
|
|
511,618 |
|
|
|
2007
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Steve
Smith
|
|
2009
|
|
|
196,385 |
|
|
|
— |
|
|
|
160,575 |
|
|
|
47,934 |
(11) |
|
|
404,180 |
|
Chief
Operating Officer (10)
|
|
2008
|
|
|
192,567 |
|
|
|
32,000 |
(5) |
|
|
185,067 |
|
|
|
54,253 |
(12) |
|
|
463,887 |
|
|
|
2007
|
|
|
190,000 |
|
|
|
40,000 |
(7) |
|
|
267,259 |
|
|
|
46,219 |
(13) |
|
|
543,478 |
|
Jean-Francois
Allier
|
|
2009
|
|
|
204,675 |
|
|
|
— |
|
|
|
153,836 |
|
|
|
— |
|
|
|
358,511 |
|
Executive
Vice President
|
|
2008
|
|
|
181,226 |
|
|
|
45,000 |
(5) |
|
|
150,847 |
|
|
|
— |
|
|
|
377,073 |
|
(14)
|
|
2007
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Glen
MacGibbon
|
|
2009
|
|
|
201,688 |
|
|
|
— |
|
|
|
69,774 |
|
|
|
— |
|
|
|
270,712 |
|
Executive
Vice President
|
|
2008
|
|
|
189,621 |
|
|
|
60,000 |
(5) |
|
|
45,906 |
|
|
|
12,453 |
(16) |
|
|
307,980 |
|
(15)
|
|
2007
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(1)
|
Represents
the dollar amount of expense recognized by the Company for financial
statement reporting purposes with respect to fiscal 2009, 2008 and 2007
for options granted to the named executive officers and, accordingly,
includes amounts from awards granted in and prior to fiscal 2009, 2008 and
2007. The amounts were calculated in accordance with FAS
123R. For a more detailed discussion on assumptions used to
calculate the fair value of our options, refer to Note 2(v) and 14 of the
Notes to the Consolidated Financial Statements included in our Annual
Report on Form 10-K for the fiscal year ended March 31, 2009, Note 2(v)
and 14 of the Notes to the Consolidated Financial Statements included in
our Annual Report on Form 10-K for the fiscal year ended March 31, 2008
and Note 2(v) and 14 of the Notes to the Consolidated Financial
Statements included in our Annual Report on Form 10-K for the fiscal year
ended March 31, 2007.
|
|
(2)
|
Excludes
perquisites and other personal benefits unless the aggregate amount of
such compensation exceeds
$10,000.
|
|
(3)
|
Mr.
Guidone is party to an employment agreement with the Company that provides
for an annual base salary of $450,000. The employment agreement was
amended effective January 12, 2009 to effect a temporary salary reduction
of 12%.
|
|
(4)
|
Represents
employer reimbursement of dental expenses of $402, reimbursement of
medical expenses of $4,488, payment of disability insurance premium of
$3,989 and payment of life insurance premium of
$1,760.
|
|
(5)
|
Represents
bonuses earned in fiscal 2008 but paid in June
2008.
|
|
(6)
|
Represents
employer matching contribution of $7,650 under the Company’s 401(k) plan,
reimbursement of dental expenses of $406, reimbursement of medical
expenses of $3,720, payment of disability insurance premium of $3,686 and
payment of life insurance premium of
$1,760.
|
|
(7)
|
Represents
bonuses earned in fiscal 2007 but paid in June
2007.
|
|
(8)
|
Represents
employer matching contribution under the Company’s 401(k)
plan.
|
|
(9)
|
Mr.
Thomson was hired as Chief Financial Officer effective as of April 2,
2007. Mr. Thomson is party to an employment agreement with the
Company that provides for an annual base salary of $230,000. During fiscal
2009, Mr. Thomson’s salary was increased to $240,000. Subsequently, the
employment agreement was amended effective January 12, 2009 to effect a
temporary salary reduction of
10%.
|
|
(10)
|
Mr.
Smith is party to an employment agreement with the Company that provides
for an annual base salary of $190,000 and various perquisites, including
housing and travel. During fiscal 2009, Mr. Smith’s salary was increased
to $200,000. Subsequently, the employment agreement was amended effective
January 12, 2009 to effect a temporary salary reduction of
10%.
|
|
(11)
|
Represents
housing reimbursement of $37,500, family travel reimbursement of $7,049,
life insurance of $71, reimbursement of dental expenses of $497 and
reimbursement of medical expenses of
$2,817.
|
|
(12)
|
Represents
housing reimbursement of $34,466, family travel reimbursement of $7,662,
life insurance of $71, reimbursement of dental expenses of $497,
reimbursement of medical expenses of $2,817 and employer matching
contribution of $8,740 under the Company’s 401(k)
plan.
|
|
(13)
|
Represents
housing reimbursement of $28,700, family travel reimbursement of $8,650,
tax preparation reimbursement of $100 and employer matching contribution
of $8,769 under the Company’s 401(k)
plan.
|
|
(14)
|
Mr.
Allier has served as Executive Vice President since March 2009, prior to
which he served as Group Vice President - Humidity/Temperature since
December 31, 2007.
|
|
(15)
|
Mr.
MacGibbon is party to an employment agreement with the Company that
provides for an annual base salary of $203,000. During fiscal 2009, Mr.
MacGibbon’s salary was increased to $213,000. Subsequently, the employment
agreement was amended effective January 12, 2009 to effect a temporary
salary reduction of 10%.
|
|
(16)
|
Represents
reimbursement of dental expenses of $391, reimbursement of medical
expenses of $3,587, and employer matching contribution of $8,475 under the
Company’s 401(k) plan.
|
Grants of Plan-Based Awards
in Fiscal Year
2009. The following table contains information related to the
grant of stock options under the Company’s 2008 Equity Incentive Plan during the
fiscal year ended March 31, 2009 to the executive officers named in the Summary
Compensation Table. There were no other equity awards granted during
the fiscal year ended March 31, 2009.
Name
|
|
Grant
Date
|
|
Estimated Future Payouts Under
Equity Incentive Plan Awards
|
|
|
All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)
|
|
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
|
|
Grant Date
Fair Market
Value of Stock
and Option
Awards
($) (1)
|
|
|
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
|
|
|
|
|
|
|
|
Frank
Guidone
|
|
12/1/2008
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
50,000 |
(2) |
|
|
4.85 |
|
|
|
90,590 |
|
Mark
Thomson
|
|
12/1/2008
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
25,000 |
(2) |
|
|
4.85 |
|
|
|
45,303 |
|
Steve
Smith
|
|
12/1/2008
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,000 |
(2) |
|
|
4.85 |
|
|
|
36,243 |
|
Jean-Francois
Allier
|
|
12/1/2008
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
25,000 |
(2) |
|
|
4.85 |
|
|
|
45,303 |
|
Glen
MacGibbon
|
|
12/1/2008
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
25,000 |
(2) |
|
|
4.85 |
|
|
|
45,303 |
|
|
(1)
|
Represents
the dollar amount recognized for financial statement reporting purposes
with respect to fiscal 2009 for the fair value of options granted to the
named executive officers. The fair value was estimated in
accordance with FASB 123R. For a more detailed discussion on
assumptions used to calculate the fair value of our options, refer to Note
2(v) and 14 of the Notes to the Consolidated Financial Statements
included in our Annual Report on Form 10-K for the fiscal year ended March
31, 2009.
|
|
(2)
|
Represents
non-qualified stock options that vest in four equal installments on
December 1, 2009, 2010, 2011 and
2012.
|
Outstanding Equity Awards at Fiscal
Year-End 2009. The following table contains information
concerning unexercised options held as of March 31, 2009 by the executive
officers named in the Summary Compensation Table. There were no other
outstanding equity awards as of March 31, 2009.
|
|
Option Awards
|
|
Name
|
|
Number of Securities
Underlying
Unexercised Options
(#)
Exercisable
|
|
|
Number of Securities
Underlying
Unexercised Options
(#)
Unexercisable
|
|
|
Option
Exercise Price
($)
|
|
Option
Expiration
Date
|
|
Frank
Guidone
|
|
|
|
|
|
50,000 |
(1) |
|
|
4.85 |
|
12/1/2018
|
|
|
|
|
11,754 |
(2) |
|
|
7,836 |
(2) |
|
|
25.52 |
|
3/31/2016
|
|
|
|
|
168,246 |
(3) |
|
|
112,164 |
(3) |
|
|
25.52 |
|
3/31/2016
|
|
|
|
|
6,667 |
(4) |
|
|
13,334 |
(4) |
|
|
23.90 |
|
12/3/2015
|
|
Mark
Thomson
|
|
|
|
|
|
|
25,000 |
(5) |
|
|
4.85 |
|
12/1/2018
|
|
|
|
|
4,438 |
(6) |
|
|
17,752 |
(6) |
|
|
22.53 |
|
4/2/2017
|
|
|
|
|
10,562 |
(7) |
|
|
42,248 |
(7) |
|
|
22.53 |
|
4/2/2015
|
|
|
|
|
1,667 |
(8) |
|
|
3,334 |
(8) |
|
|
23.90 |
|
12/3/2015
|
|
Steve
Smith
|
|
|
|
|
|
|
20,000 |
(9) |
|
|
4.85 |
|
12/1/2018
|
|
|
|
|
12,057 |
(10) |
|
|
8,038 |
(10) |
|
|
24.88 |
|
11/30/2015
|
|
|
|
|
47,943 |
(11) |
|
|
31,962 |
(11) |
|
|
24.88 |
|
11/30/2015
|
|
|
|
|
2,500 |
(12) |
|
|
5,000 |
(12) |
|
|
23.90 |
|
12/3/2015
|
|
Jean-Francois
Allier |
|
|
|
|
|
|
25,000 |
(13) |
|
|
4.85 |
|
12/1/2018
|
|
|
|
|
30,000 |
(14) |
|
|
20,000 |
(14) |
|
|
24.14 |
|
11/9/2015
|
|
|
|
|
4,000 |
(15) |
|
|
12,000 |
(15) |
|
|
24.22 |
|
6/21/2016
|
|
|
|
|
5,000 |
(16) |
|
|
10,000 |
(16) |
|
|
23.90 |
|
12/3/2015
|
|
Glen
MacGibbon
|
|
|
|
|
|
|
25,000 |
(17) |
|
|
4.85 |
|
12/1/2018
|
|
|
|
|
40,000 |
(18) |
|
|
— |
|
|
|
13.48 |
|
5/1/2012
|
|
|
|
|
2,400 |
(19) |
|
|
1,600 |
(19) |
|
|
24.14 |
|
11/9/2015
|
|
|
|
|
3,333 |
(20) |
|
|
6,666 |
(20) |
|
|
23.90 |
|
12/3/2015
|
|
|
|
|
2,000 |
(21) |
|
|
8,000 |
(21) |
|
|
23.63 |
|
7/2/2017
|
|
|
(1)
|
Represents grant of
50,000 non-qualified
stock
options that vest in four
equal installments on December 1, 2009, 2010, 2011 and
2012.
|
|
(2)
|
Represents
grant of 19,590 incentive stock options that vest in five equal
installments of 3,918 on March 31, 2007, 2008, 2009, 2010, and
2011.
|
|
(3)
|
Represents
grant of 280,410 non-qualified stock options that vest in five equal
installments of 56,082 on March 31, 2007, 2008, 2009, 2010, and
2011.
|
|
(4)
|
Represents
grant of 20,001 non-qualified stock options that vest in three equal
installments of 6,667 on December 3, 2008, 2009 and
2010.
|
|
(5)
|
Represents grant of
25,000 non-qualified
stock
options that vest in four
equal installments on December 1, 2009, 2010, 2011 and
2012.
|
|
(6)
|
Represents
grant of 22,190 incentive stock options that vest in five equal
installments of 4,438 on April 2, 2008, 2009, 2010, 2011 and
2012.
|
|
(7)
|
Includes (a)
27,810 non-qualified stock options that vest in five equal installments of
5,562 on April 2, 2008, 2009, 2010, 2011 and 2012, and (b) 25,000
non-qualified stock options that vest in five
equal installments of up to 5,000 on April 2, 2008, 2009, 2010, 2011 and
2012 subject to performance targets determined by the Compensation
Committee.
|
|
(8)
|
Represents
grant of 5,001 non-qualified stock options that vest in three equal
installments of 1,667 on December 3, 2008, 2009 and
2010.
|
|
(9)
|
Represents grant of
20,000 non-qualified
stock
options that vest in four
equal installments of 5,000 on December 1, 2009, 2010, 2011 and
2012.
|
|
(10)
|
Represents
grant of 20,095 incentive stock options that vest in five equal
installments of 4,019 on November 30, 2006, 2007, 2008, 2009 and
2010.
|
|
(11)
|
Represents
grant of 79,905 non-qualified stock options that vest in five equal
installments of 15,981 on November 30, 2006, 2007, 2008, 2009 and
2010.
|
|
(12)
|
Represents
grant of 7,500 non-qualified stock options that vest in three equal
installments of 2,500 on December 3, 2008, 2009 and
2010.
|
|
(13)
|
Represents grant of
25,000 non-qualified
stock
options that vest in four
equal installments of 6,250 on December 1, 2009, 2010, 2011 and
2012.
|
|
(14)
|
Represents
grant of 50,000 incentive stock options that vest in five equal
installments of 10,000 on November 9, 2006, 2007, 2008, 2009 and
2010.
|
|
(15)
|
Represents
grant of 16,000 incentive stock options that vest in four equal
installments of 4,000 on June 21, 2008, 2009, 2010 and
2011.
|
|
(16)
|
Represents
grant of 15,000 non-qualified stock options that vest in three equal
installments of 5,000 on December 3, 2008, 2009 and
2010.
|
|
(17)
|
Represents grant of
25,000 non-qualified
stock
options that vest in four
equal installments on December 1, 2009, 2010, 2011 and
2012.
|
|
(18)
|
Represents
grant of 40,000 incentive stock options that vest in two installments of
10,000 on April 1, 2005 and 2006 and one installment of 20,000 on April 1,
2007.
|
|
(19)
|
Represents
grant of 4,000 incentive stock options that vest in five equal
installments of 800 on November 9, 2006, 2007, 2008, 2009 and
2010.
|
|
(20)
|
Represents
grant of 9,999 non-qualified stock options that vest in three equal
installments of 3,333 on December 3, 2008, 2009 and
2010.
|
|
(21)
|
Represents
grant of 10,000 non-qualified stock options that vest in five equal
installments of 2,000 on July 2, 2008, 2009, 2010, 2011 and
2012.
|
Option Exercises and Stock Vested in
Fiscal Year 2009. During
the fiscal year ended March 31, 2009, none of the executive officers named
in the Summary Compensation Table exercised any stock options. There was no
vesting of stock during the fiscal year ended March 31,
2009.
EXECUTIVE
AGREEMENTS AND RELATED TRANSACTIONS
Agreement
with Frank Guidone
The Company entered into an employment
agreement with Frank Guidone, the Company’s current Chief Executive Officer,
effective as of March 31, 2006. From June 2002 through March 2006,
Mr. Guidone served as Chief Executive Officer through consulting arrangements
with consulting firms of which Mr. Guidone was a principal. Mr. Guidone’s
employment agreement is for an initial term of two years with automatic renewal
for successive one-year terms unless either party gives timely notice of
non-renewal. Under the terms of Mr. Guidone’s employment agreement,
Mr. Guidone will continue to serve as the Chief Executive Officer at an annual
base salary of $450,000 subject to annual increases at the discretion of the
Board of Directors. In response to the economic recession, Mr.
Guidone’s salary was reduced in fiscal 2009 to $396,000. Mr. Guidone
is eligible to receive an annual bonus pursuant to the Company’s Bonus Plan,
payable in accordance with the terms thereof, based upon annual performance
criteria and goals established by the Compensation Committee. In
addition, Mr. Guidone received a guaranteed bonus in the amount of $50,000 paid
in April 2006 in connection with the execution of his employment agreement.
Further, pursuant to Mr. Guidone’s employment agreement, upon the termination of
employment by Mr. Guidone for good reason, or termination of employment by the
Company other than for cause (as such events are described in Mr. Guidone’s
employment agreement), Mr. Guidone will be entitled to receive a lump sum
payment of 150% of his then annual salary. Further, pursuant to the
terms of his employment agreement, Mr. Guidone received an option to purchase
300,000 shares of the Company’s common stock at an exercise price per share
equal to the fair market value of a share of the Company’s common stock on March
30, 2006. Upon a change of control of the Company, all unvested options will
immediately vest. Mr. Guidone’s option was granted pursuant to the
Company’s 2006 Stock Option Plan and is subject to the terms, conditions and
provisions thereof and of the related option award agreement.
On November 6, 2007, the Company and
Mr. Guidone entered into an amendment and restatement of Mr. Guidone’s
employment agreement. The restated employment agreement was approved by the
Compensation Committee. The Restated employment agreement, among other things,
(1) removes the target bonus amount of 55% of Mr. Guidone’s annual salary and
provides that the amount of any bonus payable to Mr. Guidone will be determined
by the Compensation Committee or the Board, (2) removes the fixed employment
term (previously an initial term of two years continuing through March 31, 2008
and automatic renewal terms of one year thereafter) and (3) provides for the
payment of severance benefits in the event that Mr. Guidone’s employment is
terminated by the Company without cause or by Mr. Guidone for good reason. Such
severance benefits include a lump sum payment in the amount of (1) accrued but
unpaid salary, (2) earned but unpaid bonus, (3) incurred but unreimbursed
business expenses plus (4) 150% of Mr. Guidone’s annual salary.
Agreement
with Mark Thomson
The Company entered into an employment
agreement with Mark Thomson, the Company’s current Chief Financial Officer,
effective as of April 2, 2007. Pursuant to his employment agreement, Mr. Thomson
will receive an annual base salary of $230,000, subject to annual increases at
the discretion of the Board of Directors or Compensation Committee. During
fiscal 2009, Mr. Thomson’s salary was increased to $240,000, but in response to
the economic recession, Mr. Thomson’s salary was subsequently reduced to
$216,000. Mr. Thomson will be eligible for an annual bonus of up to
40% of his annual salary based on minimum Company and individual performance
standards to be determined on an annual basis by management of the Company,
except that, with respect to the first year of Mr. Thomson’s employment, he was
entitled to receive and did receive a guaranteed minimum bonus of
$45,000. In addition, pursuant to Mr. Thomson’s employment agreement,
on April 2, 2007 the Company granted Mr. Thomson an option to purchase up to
75,000 shares of the Company’s common stock at an exercise price per share equal
to the fair market value of a share of the Company’s common stock on the date of
such grant. A portion of Mr. Thomson’s options equal to 50,000 shares will vest
over a five year period in equal 20% installments on each of the successive five
year anniversaries of the date of the grant contingent on the continued
employment of Mr. Thomson with the Company. The remaining 25,000 options are
subject to vesting conditions based upon performance targets to be determined by
the Compensation Committee, up to a maximum of 5,000 options vesting per year on
each of the successive five year anniversaries of the date of the grant. Upon a
change of control of the Company, all unvested options will immediately vest.
Mr. Thomson’s option was granted pursuant to the Company’s 2006 Stock Option
Plan and will be subject to the terms, conditions and provisions thereof and of
the related option award agreement. Furthermore, pursuant to Mr. Thomson’s
employment agreement, upon the termination of employment by Mr. Thomson for good
reason, or termination of employment by the Company other than for cause (as
such events are described in the employment agreement), Mr. Thomson will be
entitled to receive 100% of his annual salary in effect at the time of such
termination to be paid in equal installments over the course of one year in
accordance with the Company’s payroll practices then in effect.
Agreement
with Steve Smith
The Company entered into an employment
agreement with Steve Smith, then its Vice President and General Manager – Asia
(now Chief Operating Officer), effective as of December 7,
2005. Pursuant to Mr. Smith’s employment agreement, Mr. Smith
receives an annual base salary of $190,000, subject to
annual
increases at the discretion of the Board of Directors, a moving allowance/sign-on
bonus of $30,000, a housing allowance, reimbursement for return airfare for four
(4) trips per year from Shenzhen to the United States, and a “gross-up” payment
for any tax and tax preparation obligations incurred as a result of his
assignment in China that are less favorable to Mr. Smith than the tax
obligations he would incur had he worked at the Company’s principal office in
Virginia. During fiscal 2009, Mr. Smith’s salary was increased
to $200,000, but in response to the economic recession, Mr. Smith’s salary was
subsequently reduced to $180,000. Mr. Smith is eligible for an annual
bonus of up to 25% of his annual salary based on minimum company and individual
performance standards to be determined on an annual basis by the Board of
Directors. In addition, pursuant to Mr. Smith’s employment agreement,
on November 30, 2005 the Company granted Mr. Smith an option to purchase up to
100,000 shares of the Company’s common stock at an exercise price per share
equal to the fair market value of a share of the Company’s common stock on the
date of such grant. Mr. Smith’s option vests over a five year period in equal
20% installments on each of the successive five year anniversaries of the date
of the grant contingent on the continued employment of Mr. Smith with the
Company. Upon a change of control of the Company, all unvested options will
immediately vest. Mr. Smith’s option was granted pursuant to the Company’s 2003
Stock Option Plan and is subject to the terms, conditions and provisions thereof
and of the related option award agreement. Furthermore, pursuant to Mr. Smith’s
employment agreement, upon the termination of employment by Mr. Smith for good
reason, or termination of employment by the Company other than for cause (as
such events are described in the employment agreement), Mr. Smith will be
entitled to receive 100% of his annual salary in effect at the time of such
termination to be paid semi-monthly and an allowance of up to $10,000 for
repatriation and relocation to the United States.
Agreement
with Glen MacGibbon
The Company entered into an employment
agreement with Glen MacGibbon, then its Group Vice President - Pressure/Force
(now Executive Vice President), effective as of March 14,
2008. Pursuant to Mr. MacGibbon’s employment agreement, Mr. MacGibbon
receives an annual base salary of $203,000, subject to
annual increases at the discretion of the Board of Directors or Compensation
Committee. During fiscal 2009, Mr. MacGibbon’s salary was increased
to $213,000, but in response to the economic recession, Mr. MacGibbon’s salary
was subsequently reduced to $191,700. Mr. MacGibbon is eligible for
an annual bonus of up to 60% of his annual salary based on minimum Company and
individual performance standards to be determined on an annual basis by
management of the Company. In addition, pursuant to Mr. MacGibbon’s
employment agreement, Mr. MacGibbon is eligible for an annual grant of options
to purchase up to 15,000 shares of the Company’s common stock as the Company may
determine from time to time. Mr. MacGibbon’s options granted pursuant to his
employment agreement shall vest over a three year period in equal installments
on each of the successive three year anniversaries of the date of the grant
contingent on the continued employment of Mr. MacGibbon with the Company. Upon a
change of control of the Company, all unvested options will immediately
vest. Upon the termination of employment by Mr. MacGibbon for good
reason, or termination of employment by the Company other than for cause (as
such events are described in the employment agreement), Mr. MacGibbon’s options
otherwise vesting within 12 months thereafter will immediately
vest. Mr. MacGibbon’s options shall be granted pursuant to the
Company’s 2006 Stock Option Plan and are subject to the terms, conditions and
provisions thereof and of the related option award agreement. Furthermore,
pursuant to Mr. MacGibbon’s employment agreement, upon the termination of
employment by Mr. MacGibbon for good reason, or termination of employment by the
Company other than for cause (as such events are described in the employment
agreement), Mr. MacGibbon will be entitled to receive 100% of his annual salary
in effect at the time of such termination to be paid in equal installments over
the course of one year in accordance with the Company’s payroll practices then
in effect, together with any accrued but unpaid annual bonus earned in the
fiscal year prior to such termination or a pro-rata portion of the accrued
annual bonus versus the total target bonus for the current fiscal
year.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The
following table reflects the estimated potential compensation payable to each of
the executive officers named in the Summary Compensation Table under the
Company’s compensation and benefit plans and arrangements, and under each such
executive’s respective employment agreement, as applicable, in the event of
termination of such executive’s employment under various
scenarios. The amounts shown are estimates of the amounts that would
be paid out to the executives upon termination of their employment assuming that
such termination was effective March 31, 2009. For a description of
our employment agreements with each of Messrs. Guidone, Thomson, Smith, and
MacGibbon, see “Executive Agreements and Related Transactions” beginning on page
34 of this proxy statement.
Name
|
|
Cash Severance
Payment
($)
|
|
|
Acceleration
and
Continuation
of Equity
Awards
($) (1)
|
|
|
Total
Termination
Benefits
($)
|
|
Frank
Guidone
|
|
|
|
|
|
|
|
|
|
Termination
Without Change in Control
|
|
|
|
|
|
|
|
|
|
·
Cause
|
|
|
- |
|
|
|
— |
|
|
|
- |
|
·
Voluntary
|
|
|
- |
|
|
|
— |
|
|
|
- |
|
·
Death
|
|
|
- |
|
|
|
— |
|
|
|
- |
|
·
Retirement
|
|
|
- |
|
|
|
— |
|
|
|
- |
|
· Without
Cause or for Good Reason
|
|
|
675,000 |
|
|
|
— |
|
|
|
675,000 |
|
Termination
Following Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
·
Cause
|
|
|
- |
|
|
|
|
|
|
|
|
|
·
Voluntary
|
|
|
- |
|
|
|
|
|
|
|
|
|
·
Death
|
|
|
- |
|
|
|
|
|
|
|
|
|
·
Retirement
|
|
|
- |
|
|
|
|
|
|
|
|
|
· Without
Cause or for Good Reason
|
|
|
675,000 |
|
|
|
|
|
|
|
675,000 |
|
Mark
Thomson
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
Without Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
·
Cause
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
·
Voluntary
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
·
Death
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
·
Retirement
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
· Without
Cause or for Good Reason
|
|
|
240,000 |
|
|
|
— |
|
|
|
240,000 |
|
Termination
Following Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
·
Cause
|
|
|
— |
|
|
|
|
|
|
|
|
|
·
Voluntary
|
|
|
— |
|
|
|
|
|
|
|
|
|
·
Death
|
|
|
— |
|
|
|
|
|
|
|
|
|
·
Retirement
|
|
|
— |
|
|
|
|
|
|
|
|
|
· Without
Cause or for Good Reason
|
|
|
240,000 |
|
|
|
|
|
|
|
240,000 |
|
Steve
Smith
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
Without Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
·
Cause
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
·
Voluntary
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
·
Death
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
·
Retirement
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
· Without
Cause or for Good Reason
|
|
|
200,000 |
|
|
|
— |
|
|
|
200,000 |
|
Termination
Following Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
·
Cause
|
|
|
— |
|
|
|
|
|
|
|
|
|
·
Voluntary
|
|
|
— |
|
|
|
|
|
|
|
|
|
·
Death
|
|
|
— |
|
|
|
|
|
|
|
|
|
·
Retirement
|
|
|
— |
|
|
|
|
|
|
|
|
|
· Without
Cause or for Good Reason
|
|
|
200,000 |
|
|
|
|
|
|
|
200,000 |
|
Jean-Francois
Allier
|
|
|
|
|
|
|
|
|
|
Termination
Without Change in Control
|
|
|
|
|
|
|
|
|
|
·
Cause
|
|
|
45,000 |
|
|
|
— |
|
|
|
45,000 |
|
·
Voluntary
|
|
|
45,000 |
|
|
|
— |
|
|
|
45,000 |
|
·
Death
|
|
|
45,000 |
|
|
|
— |
|
|
|
45,000 |
|
·
Retirement
|
|
|
45,000 |
|
|
|
— |
|
|
|
45,000 |
|
· Without
Cause or for Good Reason
|
|
|
45,000 |
|
|
|
— |
|
|
|
45,000 |
|
Termination
Following Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
·
Cause
|
|
|
45,000 |
|
|
|
|
|
|
|
45,000 |
|
·
Voluntary
|
|
|
45,000 |
|
|
|
|
|
|
|
45,000 |
|
·
Death
|
|
|
45,000 |
|
|
|
|
|
|
|
45,000 |
|
·
Retirement
|
|
|
45,000 |
|
|
|
|
|
|
|
45,000 |
|
· Without
Cause or for Good Reason
|
|
|
45,000 |
|
|
|
|
|
|
|
45,000 |
|
Glen
MacGibbon
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
Without Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
·
Cause
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
·
Voluntary
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
·
Death
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
·
Retirement
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
· Without
Cause or for Good Reason
|
|
$ |
213,000 |
|
|
|
— |
|
|
$ |
213,000 |
|
Termination
Following Change in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
·
Cause
|
|
|
— |
|
|
|
|
|
|
|
|
|
·
Voluntary
|
|
|
— |
|
|
|
|
|
|
|
|
|
·
Death
|
|
|
— |
|
|
|
|
|
|
|
|
|
·
Retirement
|
|
|
— |
|
|
|
|
|
|
|
|
|
· Without
Cause or for Good Reason
|
|
$ |
213,000 |
|
|
|
|
|
|
$ |
213,000 |
|
|
(1)
|
The
acceleration of any unvested options at March 31, 2009 is based on the
difference between the closing price of our common stock at March 31, 2009
and the exercise prices of the options. All stock options held
by the executive officers named in the Summary Compensation Table have an
exercise price in excess of the market price of our common stock at March
31, 2009. Consequently no compensation would be earned by such executive
officers upon acceleration of the vesting of such stock
options.
|
BENEFICIAL
OWNERSHIP OF MEASUREMENT SPECIALTIES COMMON STOCK
The
following table shows information regarding the beneficial ownership of our
common shares as of April 30, 2009 for:
|
·
|
each
executive officer named in the summary compensation table;
and
|
|
·
|
all
directors and executive officers as a
group.
|
Name and Address of Beneficial Owner (1)
|
|
Amount and Nature of
Beneficial Ownership (2)
|
|
|
Percent (2)
|
|
Morton L. Topfer (3)
|
|
|
946,782 |
|
|
|
6.6 |
% |
Frank
D. Guidone (4)
|
|
|
295,400 |
|
|
|
2.1 |
% |
J.
Victor Chatigny (5)
|
|
|
85,970 |
|
|
|
* |
|
Glen
MacGibbon (6)
|
|
|
110,239 |
|
|
|
* |
|
John
D. Arnold (7)
|
|
|
106,575 |
|
|
|
* |
|
Jean
Francois Allier (8)
|
|
|
60,500 |
|
|
|
* |
|
Steven
Smith (9)
|
|
|
74,407 |
|
|
|
* |
|
R.
Barry Uber (10)
|
|
|
42,200 |
|
|
|
* |
|
Satish
Rishi (11)
|
|
|
20,000 |
|
|
|
* |
|
Mark
Thomson (12)
|
|
|
32,942 |
|
|
|
* |
|
Kenneth
E. Thompson (13)
|
|
|
18,500 |
|
|
|
* |
|
All
directors and executive officers as a group (11 persons)
(14)
|
|
|
1,793,515 |
|
|
|
12.4 |
% |
|
(1)
|
The
address of each person is c/o Measurement Specialties, Inc., 1000 Lucas
Way, Hampton, VA 23666.
|
|
(2)
|
Beneficial
ownership is determined in accordance with the rules and regulations of
the SEC. In computing the number of shares beneficially owned
by a person and all of our directors and executive officers as a group and
the percentage ownership of that person and all of our directors and
executive officers as a group, shares of common stock subject to options
and warrants held by that person and all of our directors and executive
officers as a group that are currently exercisable or exercisable within
60 days of the date hereof are deemed outstanding. Such shares,
however, are not deemed outstanding for the purposes of computing the
percentage ownership of any other person. Except as indicated
in the footnotes to this table and pursuant to applicable community
property laws, each shareholder named in the table has sole voting and
investment power with respect to the shares set forth opposite such
shareholder’s name. The percentage of beneficial ownership is
based on 14,485,937 shares of common stock outstanding as of July 24,
2009.
|
|
(3)
|
Includes
options held by Mr. Topfer to purchase 15,000 shares and shares of our
common stock held by Castletop Capital, L.P., a private investment company
of which Mr. Topfer is a Managing Director. Mr. Topfer has
shared voting and shared investment power with respect to the shares held
by Castletop Capital.
|
|
(4)
|
Includes
options to purchase 186,667 shares.
|
|
(5)
|
Includes
options to purchase 1,667 shares.
|
|
(6)
|
Includes
options to purchase 47,733 shares.
|
|
(7)
|
Includes
options to purchase 26,000 shares.
|
|
(8)
|
Includes
options to purchase 39,000 shares.
|
|
(9)
|
Includes
options to purchase 62,500 shares.
|
|
(10)
|
Includes
options to purchase 30,000 shares.
|
|
(11)
|
Includes
options to purchase 20,000 shares.
|
|
(12)
|
Includes
options to purchase 16,667 shares.
|
|
(13)
|
Includes
options to purchase 15,000 shares.
|
|
(14)
|
Includes
options to purchase an aggregate of 460,234
shares.
|
CERTAIN
BENEFICIAL OWNERS
The
following table gives information about each shareholder, other than any of our
directors or executive officers, known by us to be a beneficial owner of more
than 5% percent of common stock as of March 31, 2009, based on information filed
with the SEC:
Name and Address of Beneficial Owner
|
|
Amount of Beneficial Ownership
|
|
|
Percent
|
|
Wellington
Management Company, LLP
75
State Street
Boston,
Massachusetts 02109
|
|
|
1,590,141 |
(1) |
|
|
11.0 |
%(1) |
Brown
Capital Management, Inc.
1201
N Calvert Street
Baltimore,
Maryland 21201
|
|
|
1,535,887 |
(2) |
|
|
10.50 |
%(2) |
Investment
Counselors of Maryland LLC,
803
Cathedral Street,
Baltimore,
Maryland 21201
|
|
|
1,341,900 |
(3) |
|
|
9.3 |
%(3) |
Barclays
Global Investors NA
400
Howard Street
San
Francisco, CA 94105
|
|
|
911,292 |
(4) |
|
|
6.3 |
%(4) |
T.
Rowe Price Associates, Inc.
100
E. Pratt Street
Baltimore,
Maryland 21202
|
|
|
798,300 |
(5) |
|
|
5.50 |
%(5) |
AXA
Financial, Inc.
1290
Avenue of the Americas
New
York, New York 10104
|
|
|
732,646 |
(6) |
|
|
5.1 |
%(6) |
(1)
|
Based
solely on the disclosures made in a report on Schedule 13F filed with the
SEC by Wellington Management Company, LLP on May 15,
2009.
|
(2)
|
Based
solely on the disclosures made in a report on Schedule 13F filed with the
SEC by Brown Capital Management, Inc. on April 20,
2009.
|
(3)
|
Based
solely on the disclosures made in a report on Schedule 13F/A filed with
the SEC Investment Counselors of Maryland LLC on May 5,
2009.
|
(4)
|
Based
solely on the disclosures made in a report on Schedule 13F filed with the
SEC by Barclays Global Investors NA on May 13,
2009.
|
(5)
|
Based
solely on the disclosures made in a report on Schedule 13F filed with the
SEC by T. Rowe Price Associates, Inc. on February 10,
2009.
|
(6)
|
Based
solely on the disclosures made in a report on Schedule 13F filed with the
SEC by AXA Financial, Inc. on February 13,
2009.
|
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act
requires our directors, executive officers, and the persons who beneficially own
more than 10% of our common stock, to file reports of ownership and changes in
ownership with the SEC. Copies of all filed reports are required to
be furnished to us. Based solely on the reports received by us and on
the representations of the reporting persons, we believe that these persons have
complied with all applicable filing requirements during fiscal
2009.
ANNUAL
REPORT ON FORM 10-K
In addition to the proxy statement and
proxy card, a copy of the Company’s Annual Report on Form 10-K for the fiscal
year ended March 31, 2009 is enclosed. The Annual Report on Form 10-K
is being furnished to you without the exhibits thereto. Upon your
request, the Company will provide you with a copy of the
exhibits. You may under some circumstances be responsible for the
Company’s reasonable expenses in furnishing such exhibits.
SHAREHOLDER
PROPOSALS FOR THE 2009 ANNUAL MEETING
Shareholders
who wish to present proposals to be considered for inclusion in the Company’s
proxy materials for the 2010 Annual Meeting of Shareholders must submit such
proposals to our Secretary at Measurement Specialties, Inc., 1000 Lucas Way,
Hampton, VA 23666 by March 31, 2010. For any proposal that is not
submitted for consideration for inclusion in next year’s proxy materials, but is
instead sought to be presented directly at the 2010 Annual Meeting, SEC rules
permit us to exercise discretionary voting authority to the extent conferred by
proxy if we: (1) receive notice of the proposal before June 24, 2010 and advise
shareholders in the 2010 proxy statement of the nature of the proposal and how
management intends to vote on such matter or (2) do not receive notice of the
proposal before June 24, 2010. Notices of intention to present
proposals at the 2010 Annual Meeting should be submitted to our Secretary at
Measurement Specialties, Inc., 1000 Lucas Way, Hampton, VA 23666.
Our
by-laws provide that a shareholder entitled to vote for the election of
directors may nominate persons for election to our Board of Directors by
delivering written notice to our Secretary. With respect to an election to be
held at an annual meeting of shareholders, such notice generally must be
received by our Secretary not later than the close of business on the 90th day nor
earlier than the close of business on the 120th day
before the first anniversary of the preceding year’s annual meeting. In the
event that the date of an annual meeting is more than 30 days before or more
than seventy days after the first anniversary of the preceding year’s annual
meeting, such notice must be received by our Secretary not earlier than the
close of business on the 120th day
before the annual meeting and not later than the close of business on the later
of the 90th day
before the annual meeting or the 10th day
following the day on which we publicly announce the date of the annual meeting.
With respect to an election to be held at a special meeting of shareholders,
such notice must be received by our Secretary not earlier than the close of
business on the 120th day
before such special meeting, and not later than the close of business on the
later of the 90th day
before such special meeting or the 10th day
following the day on which we publicly announce the date of the special meeting
and the nominees proposed by our Board of Directors to be elected at such
special meeting.
The
shareholder’s notice must include:
|
·
|
as
to each person whom the shareholder proposes to nominate for election as a
director:
|
|
·
|
all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an election contest
or is otherwise required pursuant to Regulation 14A under the Exchange
Act; and
|
|
·
|
such
person’s written consent to being named in the proxy statement as a
nominee and to serving as such a director if elected;
and
|
|
·
|
as
to the shareholder giving the notice and the beneficial owner, if any, on
whose behalf the nomination is
made:
|
|
·
|
the
name and address of such shareholder, as they appear on our books, and of
such beneficial owner;
|
|
·
|
(a)
the class and number of shares of capital stock of the Company that are
owned beneficially and of record by such shareholder and such beneficial
owner, and (b) any option, warrant, convertible security, stock
appreciation right, or similar right with an exercise or conversion
privilege or a settlement payment or mechanism at a price related to any
class or series of shares of the Company or with a value derived in whole
or in part from the value of any class or series of shares of the Company,
whether or not such instrument or right shall be subject to settlement in
the underlying class or series of capital stock of the Company or
otherwise directly or indirectly owned beneficially by such shareholder
and any other direct or indirect opportunity to profit or share in any
profit derived from any increase or decrease in the value of shares of the
Company;
|
|
·
|
a
representation that the shareholder is a holder of record of the Company’s
common stock entitled to vote at such meeting and intends to appear in
person or by proxy at the annual meeting to propose such nomination;
and
|
|
·
|
a
representation whether the shareholder or the beneficial owner, if any,
intends or is part of a group that intends (1) to deliver a proxy
statement and/or form of proxy to holders of at least the percentage of
the Company’s common stock required to elect the nominee and/or (2)
otherwise to solicit proxies from shareholders in support of such
nomination.
|
Because
the 2009 annual meeting is to be held on September 22, 2009, written notice of a
shareholder proposal to be acted upon at the 2010 annual meeting must be
received by our Secretary not later than the close of business on June 24, 2010,
nor earlier than the close of business on May 25, 2010.
In order
for a shareholder to bring other business before a shareholder meeting, notice
must be received by our Secretary within the time limits described in the
immediately preceding paragraph. The shareholder’s notice must
contain:
|
·
|
a
brief description of the business desired to be brought before the annual
meeting;
|
|
·
|
the
text of the proposal or business (including the text of any resolutions
proposed for consideration and in the event that such business includes a
proposal to amend our by-laws, the language of the proposed
amendment);
|
|
·
|
the
reasons for conducting such business at the annual meeting;
and
|
|
·
|
any
material interest in such business of such shareholder and for the
beneficial owner, if any, on whose behalf the proposal is made;
and
|
|
·
|
as
to the shareholder giving the notice and the beneficial owner, if any, on
whose behalf the proposal is made, the information described above with
respect to the shareholder proposing such
business.
|
The
requirements found in our by-laws are separate from and in addition to the
requirements of the Securities and Exchange Commission that a shareholder must
meet to have a proposal included in our proxy statement.
OTHER
MATTERS
The Board of Directors is not aware of
any matters other than those set forth in this proxy statement that will be
presented for action at the Annual Meeting. However, if any other
matter should properly come before the meeting, the persons authorized by the
accompanying proxy will vote and act with respect thereto, in what according to
their judgment, is in the interests of the Company and its
shareholders.
July 29,
2009
PROXY
MEASUREMENT
SPECIALTIES, INC.
Annual
Meeting of Shareholders - Tuesday, September 22, 2009
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR USE AT
THE
2009 ANNUAL MEETING OF SHAREHOLDERS ON SEPTEMBER 22, 2009
The shares of common stock of
Measurement Specialties, Inc. (the “Company”) you are entitled to vote at the
2009 Annual Meeting of Shareholders will be voted as you specify.
By signing this proxy, you revoke all
prior proxies and appoint Frank D. Guidone, Mark Thomson, or other designee, and
each of them, with full power of substitution, to vote all shares you are
entitled to vote on the matters shown on the reverse side, as directed in this
proxy and, in their discretion,
on any other matters which may come before the Annual Meeting and all
postponements and adjournments.
This proxy, when properly executed,
will be voted as directed, or if no direction is given, will be voted FOR the
nominees for Director and FOR the ratification of the appointment of KPMG LLP as
our independent registered public accounting firm for fiscal
2010.
(Continued
and to be signed on the reverse side)