AstroNova, Inc. DEF 14A 2016
Documents found in this filing:
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x Filed by a Party other than the Registrant ¨
Check the appropriate box:
(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):
600 East Greenwich Avenue
West Warwick, Rhode Island 02893
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 18, 2016
To the Shareholders of Astro-Med, Inc.:
Notice is hereby given that the 2016 Annual Meeting of Shareholders of Astro-Med, Inc. (the Company) will be held at the offices of the Company, 600 East Greenwich Avenue, West Warwick, Rhode Island on Wednesday, May 18, 2016, beginning at 10:00 a.m., for the following purposes:
The close of business on March 24, 2016 has been fixed as the record date for determining shareholders entitled to attend or vote at the annual meeting or any adjournment thereof.
You may vote on these matters in person, by proxy or via the Internet or telephone. Whether or not you plan to attend the meeting, please promptly complete and return the enclosed proxy card in the enclosed addressed, postage-paid envelope or vote via the Internet or telephone, so that your shares will be represented and voted at the meeting in accordance with your wishes. If you attend the meeting, you may withdraw your proxy or Internet or telephone vote and vote your shares in person.
April 13, 2016
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 18, 2016.
The Companys Proxy Statement, form of proxy card and Annual Report are available for viewing, printing and downloading at:
ANNUAL MEETING OF SHAREHOLDERS
May 18, 2016
The 2016 annual meeting of shareholders of Astro-Med, Inc. (the Company) will be held at 10:00 a.m., local time, on Wednesday, May 18, 2016 at the offices of the Company, 600 East Greenwich Avenue, West Warwick, Rhode Island. At the meeting, shareholders of record on the record date for the meeting who are present or represented by proxy will have the opportunity to vote on the following matters:
Solicitation and Revocation of Proxies
The accompanying proxy is solicited by the Board of Directors (the Board) of the Company in connection with its 2016 annual meeting of shareholders. The Company will bear the cost of such solicitation. It is expected that the solicitation of proxies will be primarily by mail. Proxies may also be solicited personally by directors, officers and employees of the Company at nominal cost. The Company may reimburse brokerage houses and other custodians, nominees and fiduciaries holding stock for others in their names, or in those of their nominees, for their reasonable out-of-pocket expenses in sending proxy material to their principals or beneficial owners and obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any time prior to its exercise, but the revocation of a proxy will not be effective until notice thereof has been given to the Secretary of the Company. Every properly submitted proxy will be voted in accordance with the specification made thereon. This proxy statement and the accompanying proxy are expected to be first sent to shareholders on or about April 18, 2016.
Who May Vote
The Board has established March 24, 2016 as the record date for the annual meeting. Only shareholders of record at the close of business as of that date will be entitled to attend or vote at the annual meeting. On the record date, there were 7,388,048 shares of common stock of the Company outstanding. There was no other outstanding class of voting securities.
A list of shareholders entitled to vote will be available at the annual meeting. In addition, you may contact Joseph P. OConnell, at the Companys offices located at 600 East Greenwich Avenue, West Warwick, Rhode Island, to make arrangements to review a copy of the shareholder list at those offices, between the hours of 9:00 a.m. and 5:00 p.m., local time, on any business day from May 6, 2016 to the time of the annual meeting.
How to Vote
You are entitled to one vote at the meeting for each share of common stock registered in your name at the close of business on the record date for the meeting. You may vote your shares at the meeting in person, by proxy or via the Internet or the toll-free number (for residents of the United States and Canada) listed on your proxy card.
If any other business properly comes before the meeting, then the designated persons will have the discretion to vote in any manner they deem appropriate.
If you vote by proxy or via the Internet or telephone, you may revoke your vote at any time before it is exercised by taking one of the following actions:
Shares Held by Brokers or Nominees
If the shares you own are held in street name by a brokerage firm, your brokerage firm, as the record holder of your shares, is required to vote your shares according to your instructions. In order to vote your shares, you will need to follow the directions your brokerage firm provides you. Many brokers also offer the option of providing voting instructions to them over the Internet or by telephone, directions for which would be provided by your brokerage firm on your vote instruction form.
Under stock exchange rules applicable to most brokerage firms, if you do not give instructions to your broker, your broker will be permitted to vote any shares it holds for your account in its discretion with respect to routine proposals, but will not be allowed to vote your shares with respect to non-routine proposals. Proposal 1, regarding the election of Directors, and Proposal 2, regarding the approval, on an advisory, non-binding basis, of the Companys executive compensation, are non-routine proposals. If you do not instruct your broker how to vote with respect to these proposals, your broker will not vote your shares on them and your shares will be recorded as broker non-votes and will not affect the outcome of the vote on those proposals. Broker non-votes are shares that are held in street name by a bank or brokerage firm that indicates on its proxy that, while voting in its discretion on one matter, it does not have or did not exercise discretionary authority to vote on another matter.
Proposal 3, regarding the amendment of the Companys Articles of Incorporation to change the name of the Company to AstroNova, Inc., and Proposal 4, the ratification of Wolf & Company, P.C. as the Companys independent registered public accounting firm for the fiscal year ending January 31, 2017, are considered to be routine items under the applicable rules and your broker will be able to vote on those items even if it does not receive instructions from you, so long as your broker holds your shares in its name.
If a broker or nominee holds shares of common stock in street name for your account, then this proxy statement may have been forwarded to you with a voting instruction card, which allows you to instruct the broker or nominee how to vote your shares on the proposals described herein. To vote by proxy or instruct your broker how to vote, you should follow the directions provided with the voting instruction card. In order to have your vote counted on Proposal 1 and Proposal 2, you must either provide timely voting instructions to your broker or obtain a properly executed proxy from the broker or other record holder of the shares that authorizes you to act on behalf of the record holder with respect to the shares held for your account.
Votes Required to Transact Business At the Meeting
The holders of a majority of the shares entitled to vote, present in person or represented by proxy, will constitute a quorum for the transaction of business at the meeting. Abstentions and broker non-votes are counted as present and entitled to vote for purposes of determining a quorum.
Multiple Shareholders Sharing the Same Address
If you and other residents at your mailing address own shares of the Companys common stock through a broker or other nominee, you may have elected to receive only one copy of this proxy statement and the
Companys fiscal year 2016 Annual Report. If you and other residents at your mailing address own shares of common stock in your own names, you may have received only one copy of this proxy statement and the fiscal year 2016 Annual Report, unless you provided the Companys transfer agent with contrary instructions.
This practice, known as householding, is designed to reduce the Companys printing and postage costs. You may promptly obtain an additional copy of this proxy statement, enclosed proxy card and our fiscal year 2016 Annual Report by sending a written request to Astro-Med, Inc., attention Investor Relations Department, 600 East Greenwich Avenue, West Warwick, Rhode Island 02893, or by calling the Companys investor relations department at 617-542-5300. If you hold your shares through a broker or other nominee and wish to discontinue householding or to change your householding election, you may do so by contacting your broker or by calling (800) 542-1061 or writing to Broadridge Financial Solutions, 51 Mercedes Way, Edgewood, NY 11717. If you hold shares in your own name and wish to discontinue householding or change your householding election, you may do so by calling (877) 373-6374 or writing to Computershare Investor Services at P.O. Box. 43078, Providence, RI 02940-3078.
Directions to the Companys offices
The annual meeting will be held at the Companys offices 600 East Greenwich Avenue, West Warwick, Rhode Island. For those planning to attend the special meeting, directions to our offices can be found under the heading Contact Us on our website.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the annual meeting, seven directors are to be elected to hold office until the next annual meeting or until their respective successors are elected and qualified. The persons named in the accompanying proxy, who have been designated by the Board, intend to vote, unless otherwise instructed, for the election to the Board of the persons named below. The biographies below contain information regarding the persons service as director, business experience, director positions held currently or at any time during the last five years, and the experiences, qualifications, attributes or skills that caused the Nominating Committee and the Board to determine that the person should serve as a director.
Graeme MacLetchie, 78, is a private investor and was a director of Deutsche Bank Alex Brown (Private Client Division), an investment banking and brokerage services company for private wealth and asset management, from November 1995 until his retirement in March 2010. Prior to this, Mr. MacLetchie was Senior Vice President of C. J. Lawrence Deutsche Bank Securities Corporation from 1970 to 1995. He has been a director of the Company since 2002 and also served as a director of E-Sync Networks Inc., a provider of managed enterprise services and solutions to medium and large businesses, from 1994 to 1999. We believe that Mr. MacLetchies substantial experience in the financial sector and knowledge of the financial, regulatory, corporate governance and other matters affecting public companies qualify him to serve on our Board.
April L. Ondis, 42, has been a director since November 2015. Since September 2015, Ms. Ondis has served as a Marketing Manager for Crossref, a collaborative reference linking service operated by Publishers International Linking Associations, Inc. Prior to joining Crossref, Ms. Ondis held a variety of marketing-related positions with the Company, including Applied Marketing Manager from January 2015 to August 2015,
Worldwide Marketing Director from 2005 through December 2014 and Marketing Assistant from 1998 to 2005. We believe that Ms. Ondis substantial knowledge of the markets in which the Company operates and extensive knowledge of the Companys customer relationships qualify her to serve on our Board.
Everett V. Pizzuti, 79, served as Chief Executive Officer of the Company from June 2011 to January 31, 2014. Prior to serving as Chief Executive Officer of the Company, Mr. Pizzuti was its President and Chief Operating Officer from 1971 to June 2011. Mr. Pizzuti has also been a director of the Company since 1985. Prior to 1971, he served as General Sales Manager of the Recorder Division of Gulton Industries. Through his long service with the Company, Mr. Pizzuti has an intimate knowledge of the Companys products and markets and is able to provide our Board with insight and advice related to the Boards decisions. Based on this experience, we believe that Mr. Pizzuti is qualified to serve on our Board.
Mitchell I. Quain, 64, has been a director since August 2011. Mr. Quain has served as a Senior Advisor at Carlyle Group, a private equity firm since December 2011. From January 2010 through December 2011, Mr. Quain was a Partner at One Equity Partners, a private investment firm. From 2006 through 2009, he was a Senior Director of ACI Capital Corp. From 2002 through 2005, Mr. Quain served as Chairman of Register.Com, Inc., an internet services provider, and from 1997 to 2001 he was employed with ABN AMRO and its predecessors in several capacities, including Vice Chairman of Investment Banking. Mr. Quain also serves as a director of Hardinge Inc., a global designer, manufacturer and distributor of machine tools, RBC Bearings, Inc., an international manufacturer and marketer of highly engineered precision plain, roller and ball bearings, Jason Industries, Inc. a manufacturing company operating in the seating, finishing, acoustics and components businesses. Mr. Quain previously served as a director of DeCrane Aircraft Holdings, Inc., Handy & Harman Ltd., HEICO Corporation, MagneTek, Inc., Mechanical Dynamics, Inc., Register.com, Inc., Titan International, Inc. and Tecumseh Products Company. We believe that Mr. Quains extensive experience in the private equity sector and public company experience qualify him to serve on our Board.
Harold Schofield, 74, has been the owner and manager of Schofield Imaging Associates, LLC, in Narragansett, Rhode Island since 2004. Prior to founding Schofield Imaging Associates, LLC, Mr. Schofield was Founder, President and CEO of Atlantek Incorporated (Atlantek), a manufacturer of thermal printers and retired as Vice President and General Manager of Zebra Atlantek, Inc. following the acquisition of Atlantek by Zebra Technologies Corp. in November 2003. Prior to founding Atlantek, Mr. Schofield was Design Engineering Manager at Gulton Industries where he was responsible for design and development of thermal printers, plotters and chart recorders. Mr. Schofield is an internationally recognized authority in the electronic printing field. We believe that Mr. Schofields long history and expertise in the printing and imaging field qualify him to serve on our Board.
Hermann Viets, Ph.D., 73, served as the President and Chief Executive Officer of the Milwaukee School of Engineering, a university located in Milwaukee, Wisconsin focused primarily on engineering education, from 1991 until his retirement in June 2015 and continues to serve on the Board of Regents of that institution. Dr. Viets served as a director of Gehl Co., a publicly traded manufacturing company, from 1999 until its acquisition by Manitou BF S.A. in 2008. Dr. Viets was also a trustee of Polytechnic University (a private engineering school located in Brooklyn, NY) until 2009. Dr. Viets has been a director of the Company since 1988. We believe that Dr. Viets executive experience as president of a university and as a director of another public company and his understanding of the Companys products as well as corporate governance matters qualify him to serve on our Board.
Gregory A. Woods, 57, has served as Chief Executive Officer of the Company since February 1, 2014. Mr. Woods joined the Company in September 2012 as Executive Vice President and Chief Operating Officer and was appointed President and Chief Operating Officer on August 29, 2013. Prior to joining the Company, Mr. Woods served from January 2010 to August 2012 as Managing Director of Medfield Advisors, LLC, an advisory firm located in Medfield, Massachusetts focused on providing corporate development and strategy guidance to technology driven manufacturing firms. From 2008 to 2010, Mr. Woods served as President of Performance Motion Devices, a specialty semiconductor and electronics manufacturer located in Lincoln, Massachusetts. Through his work experience, Mr. Woods has extensive knowledge of the technology and electronics industries, as well as lean manufacturing processes. Based on this experience and his position as Chief Executive Officer of the Company, we believe that Mr. Woods is qualified to serve on our Board.
The Board has determined that all of the directors of the Company, including each of the nominees standing for election at the 2016 annual shareholders meeting, other than Gregory A. Woods, Everett V. Pizzuti and April L. Ondis, are independent of the Company in that such nominees have no material relationship with the Company either directly, or as a partner, shareholder or affiliate of an organization that has a relationship with the Company. The Board has made this determination in accordance with applicable Securities and Exchange Commission (SEC) rules and NASDAQ listing standards.
Each of the directors must be elected by a plurality of the votes properly cast at the annual meeting. This means that the seven nominees receiving the highest number of FOR votes will be elected as directors. Votes may be cast FOR or WITHHELD FROM each nominee. Broker non-votes and votes that are WITHHELD FROM the nominees will be excluded entirely from the vote and will have no effect.
The Board recommends a vote FOR the election of each the nominees listed above.
The Board of Directors Meetings and Committees
The Board currently consists of seven members, all of whose terms will expire at the annual meeting and each of whom has been nominated for re-election. During the fiscal year ended January 31, 2016, the Board held eight meetings. During fiscal year 2016, all directors attended at least 75% of the meetings of the Board and meetings of committees on which such director serves. The Board has adopted a policy that requires members of the Board to make every effort to attend each annual shareholders meeting. All members of the Board attended the 2015 annual shareholders meeting.
The Board currently has three standing committees: an Audit Committee, a Compensation Committee and a Nominating Committee. The members and chairs of each of those committees are appointed each year. The Audit Committee is comprised of Messrs. MacLetchie, Quain and Schofield. The Nominating Committee is comprised of Messrs. MacLetchie, Quain and Viets. The Compensation Committee is comprised of all of our independent directors, Messrs. MacLetchie, Quain, Schofield and Viets. Each of the members of our committees is independent as defined under the applicable NASDAQ listing standards and SEC rules. Each of the Audit, Compensation and Nominating Committees has a written charter approved by the Board. A copy of each charter is available on the Companys website at www.astronovainc.com under Investors Governance Documents.
Audit Committee. The Audit Committees primary duties and responsibilities include: overseeing the integrity of the Companys financial reports; appointing, setting the compensation of and overseeing the Companys independent accountants; and assessing the qualifications and independence and performance of the Companys independent accountants and the adequacy of internal controls. The Audit Committee meets with the Companys independent accountants to review quarterly financial results, the results of the audit and other relevant matters. Mr. MacLetchie serves as Chairman of the Audit Committee, which held five meetings during the fiscal year ended January 31, 2016. The Board has determined that all three members of the Audit Committee satisfy the financial literacy requirements of the NASDAQ listing standards and are independent as defined under the NASDAQ listing requirements and applicable SEC rules. Additionally, the Board has determined that Graeme MacLetchie satisfies the financial sophistication requirement of the NASDAQ listing requirements, and that Mitchell Quain qualifies as an audit committee financial expert as defined by the SEC rules.
Compensation Committee. The Compensation Committee assists the Board in discharging the Boards responsibilities relating to director and executive compensation. The Compensation Committees responsibilities include: establishing and reviewing the Companys executive and director compensation philosophy, strategies, plans and policies; making recommendations with respect to the design of the Companys incentive compensation plans and equity based plans; granting awards under such plans and overseeing generally the administration of such plans; evaluating the performance and determining the compensation of the Chief Executive Officer; and reviewing and approving recommendations on compensation of other executives. Mr. Quain serves as chairman of the Compensation Committee, which held four meetings during the fiscal year ended January 31, 2016.
Nominating Committee. The Nominating Committee is responsible for identifying individuals qualified to be members of the Board and recommending such individuals to be nominated by the Board for election to the Board by the shareholders. The Nominating Committee held three meetings in the fiscal year ended January 31, 2016. Dr. Viets serves as chairman of the Nominating Committee.
Director Share Ownership Requirements. In March 2015, the Board approved a stock ownership policy to require each director to hold shares of Company common stock with a value equal to at least $200,000. Any director who does not currently meet this requirement will have five years from the later of April 1, 2015 or his or her initial election to the Board to achieve this ownership level. Directors are expected to retain at least 50% of the shares acquired upon exercise of any stock option (net of shares withheld or tendered in payment of the exercise price) or vesting of a restricted stock or restricted unit award until they achieve the specified ownership level and thereafter maintain such ownership level. Currently, all but one director meets the ownership requirement.
Nomination of Directors
The Nominating Committee considers suggestions from many sources, including shareholders, regarding possible candidates for director. The Nominating Committee does not set specific criteria for directors but seeks individuals who possess the highest ethical standards and integrity, have a history of achievement that reflects superior standards for themselves and others, have the ability to provide wise, informed and thoughtful counsel to management on a range of issues, exercise independence of thought and possess skills and expertise appropriate to meet the Companys needs and advance the long-term interests of the shareholders. The Nominating Committee does not have a policy with respect to diversity and does not specifically consider issues of diversity, such as gender, race, origin or sex, when determining whether to nominate any person to be a director of the Company.
The Nominating Committee must also ensure that members of the Board as a group maintain the requisite qualifications under the NASDAQ listing standards for populating the Audit, Compensation and Nominating Committees. The Nominating Committee will consider shareholder nominees for director in the same manner as nominees for director from other sources.
Shareholders may send recommendations for director nominees to the Nominating Committee at the Companys offices at 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. Submissions should include information regarding a candidates background, qualifications, experience and willingness to serve as a director. In addition, Section 10 of Article III of the Companys By-Laws sets forth specific procedures that, if followed, enable any shareholder entitled to vote in the election of directors to make nominations directly at an annual meeting of shareholders. These procedures include a requirement for written notice to the Company not more than 150 days nor less than 60 days prior to the scheduled annual meeting and must contain the name and certain information concerning the nominee and the shareholders who support the nominees election. For the annual meeting to be held in 2017, the notice must be received no earlier than December 19, 2016 and no later than March 17, 2017. A copy of the Companys By-Laws may be obtained by writing to Astro-Med, Inc., Attn: Investor Relations Department, 600 East Greenwich Avenue, West Warwick, Rhode Island 02893.
Communications with the Board of Directors
The Companys Board provides a process for shareholders to communicate directly with the members of the Board or the individual chairman of each standing committee. Any shareholder with a concern, question or complaint regarding our compliance with any policy or law, or who would otherwise like to contact the Board may communicate directly with the directors by writing directly to those individuals c/o Astro-Med, Inc., 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. The Companys general policy is to forward, and not to intentionally screen, any mail received at the Companys corporate offices that is sent directly to an individual unless the Company believes the communication may pose a security risk.
Board Leadership Structure
All members of the Board, other than Gregory A. Woods, April L. Ondis and Everett V. Pizzuti, are independent and all our key committees Audit, Compensation and Nominating are comprised solely of independent directors. The non-management directors meet in executive session without Mr. Woods, Ms. Ondis and Mr. Pizzuti at least quarterly.
The Board believes that separating the positions of Chief Executive Officer and Chairman of the Board is preferable and in the best interests of shareholders because it gives our independent directors a significant role in Board direction and agenda setting and enhances the Boards ability to fulfill its oversight responsibilities, including of senior management. Separating the positions also provides an independent viewpoint and focus at Board meetings, and ensures that our Chief Executive Officer will be able to focus his energy on running the Company. The Board believes this structure provides strong leadership for the Board, while also positioning the Chief Executive Officer as the leader of the Company in the eyes of our customers, employees and shareholders.
The Board has an active role, as a whole and also at the committee level, in overseeing management of the Companys risks through a program of sound policies, systems, processes, and reports. The Audit Committee of
the Board has oversight responsibility over financial reporting and disclosure processes, compliance and legal matters, and information security and fraud risk. The Audit Committee also monitors controls for material weaknesses in the financial reporting function. The Audit Committee meets regularly with our Chief Financial Officer and Controller in carrying out these responsibilities, and with the Companys independent auditors in executive session.
The Compensation Committee of the Board oversees risks as they relate to the Companys compensation policies and practices as described under Compensation Discussion and Analysis. The Boards Nominating Committee assists the Board in fulfilling its oversight responsibilities with respect to independence of Board members and identification of individuals qualified to be members of the Board.
While each committee is responsible for evaluating the risks within their areas of responsibility and overseeing the management of such risks, all committees report regularly to the full Board, which also considers the Companys entire risk profile.
Compensation of Directors
The Compensation Committee is responsible for reviewing and establishing the compensation of the directors of the Company. The Company adopted a Non-Employee Director Annual Compensation Program (the Program) on January 30, 2012 effective as of February 1, 2012, which was amended and restated as of February 1, 2014. Under the Program, each non-employee director is entitled to an annual cash retainer of $7,000 (the Cash Retainer), plus $500 for each Board and committee meeting attended. In addition, the Chairman of the Board, if a non-employee director, will receive an annual retainer of $6,000, and the Chair of the Audit Committee and Chair of the Compensation Committee will each receive an annual retainer of $4,000 (each a Chair Retainer). Any non-employee director who is first elected or appointed to such position after February 1 of any fiscal year will receive a pro rata portion of any Cash Retainer and Chair Retainer payable. Each non-employee director may elect for any fiscal year to receive all or a portion of the Cash Retainer or Chair Retainer in the form of common stock of the Company.
In addition, under the Program, each non-employee director will receive a restricted stock award with a value equal to $20,000 (the Equity Retainer) upon adjournment of each annual meeting (or special meeting in lieu of annual meeting) of shareholders. If a non-employee director is first appointed or elected to the Board effective on a date other than at the annual shareholders meeting, on the date of such appointment or election the director will receive a pro rata award of restricted common stock having a value based on the number of days remaining until the next annual meeting. The Equity Retainer will vest on the earlier of 12 months after the grant date or the date immediately prior to the next annual meeting (or special meeting in lieu of annual meeting) of the shareholders following the meeting at which such restricted stock award was granted. However, a non-employee director may not sell, transfer, assign, pledge or otherwise encumber the vested common stock prior to the second anniversary of the vesting date. In the event of the death or disability of a non-employee director, or a Change in Control (as such term is defined in the Companys 2015 Equity Incentive Plan) of the Company, the restricted stock award shall immediately vest and shall no longer be subject to such restrictions on transfer.
Unless a non-employee director elects to receive all or a portion of the Cash Retainer or Chair Retainer in common stock (as described below), each non-employee director will receive the Cash Retainer and Chair Retainer in four equal quarterly installments on the first day of each fiscal quarter.
If a non-employee director elects to receive all or a portion of the Cash Retainer or Chair Retainer (each, a Retainer) in the form of common stock, such shares will be issued in four quarterly installments on the first day of each fiscal quarter, and the number of shares of common stock issued will be based on the fair market value of the common stock on the date such installment is payable. The common stock received in lieu of a Retainer will be fully vested. However, a non-employee director who receives common stock in lieu of all or a portion of a Retainer may not sell, transfer, assign, pledge or otherwise encumber the common stock prior to the first anniversary of the date on which such shares were issued. In the event of the death or disability of a non-employee director, or a Change in Control (as such term is defined in the Companys 2007 Equity Incentive Plan) of the Company, any shares of common stock issued in lieu of a Retainer, will no longer be subject to such restrictions on transfer.
In addition to the Program, under the Companys 2015 Equity Incentive Plan, each non-employee director receives non-qualified options to purchase 5,000 shares of the Companys common stock upon initial election to the Board (if not at the annual meeting) and upon the adjournment of each annual meeting or special meeting in lieu of an annual meeting of the shareholders of the Company. These options have a term of ten years and become exercisable immediately prior to the occurrence of the next annual meeting following the date the option is granted.
The following Director Compensation table provides information regarding the compensation paid or accrued by each individual who was a director during the 2016 fiscal year.
The following sets forth information with respect to our executive officers, other than Mr. Woods, as of March 24, 2016. Biographical information regarding Gregory A. Woods, our President and Chief Executive Officer is included above in Proposal No. 1 Election of Directors.
Mr. OConnell joined the Company in 1996. He previously held senior financial management positions with Cherry Tree Products Inc., IBI Corporation and Avery Dennison Corporation. Mr. OConnell is also Assistant Secretary of the Company. He was appointed to the position of Senior Vice President in 2007.
Mr. Morawetz was appointed Vice PresidentInternational Branches in 2006. He was previously the General Manager of Branch Operations for the Companys German subsidiary, having joined the Company in 1989.
Mr. Petrarca was appointed Vice PresidentOperations in 1998. He has previously held positions as General Manager of Manufacturing, Manager of Grass Operations and Manager of Grass Sales. He has been with the Company since 1980.
Mr. Mancyak was appointed a Vice President of the Company in 2011. He also holds the position of Corporate Controller and Principal Accounting Officer to which he was appointed in 2009. He served as Assistant Corporate Controller of the Company from 2008 to 2009 and prior to that was an Accounting Manager of the Company beginning in 2005. Prior to 2005, Mr. Mancyak was Senior Treasury Analyst at American Power Conversion and an auditor at the international accounting firm KPMG LLP.
Mr. Eric E. Pizzuti was appointed Vice President and General Manager of the Companys QuickLabel business segment on March 9, 2012. Prior to this appointment, Mr. Pizzuti held the position of Vice President
and Worldwide Director of Sales for QuickLabel Systems from March 2010 and Worldwide Director of Sales from March 2006 through March 2010. Mr. Pizzuti has held various other positions since joining the Company in 1996.
Mr. Natalizia was appointed Vice President and Chief Technology Officer of Astro-Med, Inc. on March 9, 2012. Prior to this appointment, Mr. Natalizia held the position of Director of Product Development of the Company since 2005.
Security Ownership of 5% Beneficial Owners
The following table sets forth certain information regarding the beneficial ownership of the Companys outstanding shares of common stock, as of April 8, 2016 (except as noted), by each person who is known to the Company to own of record or beneficially more than 5% of such stock:
Security Ownership of Directors and Officers
The following table sets forth certain information regarding the beneficial ownership of the Companys common stock as of April 8, 2016 by each director, by each executive officer named in the Summary Compensation Table and by all directors and executive officers as a group. Unless otherwise noted, all shares of common stock are subject to the sole voting and investment power of the respective directors and executive officers.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act), requires the directors and executive officers of the Company and any persons who own more than ten percent of the Companys common stock to file with the SEC various reports of beneficial ownership and changes in beneficial ownership. Based solely on a review of the copies of such reports received by the Company and certain written representations that no other reports were required, the Company believes that for the fiscal year ended January 31, 2016, all of its officers, directors and 10% beneficial owners complied with the requirements of Section 16(a), except that the following forms were filed late:
COMPENSATION DISCUSSION & ANALYSIS
The Compensation Committee (the Committee) is charged with the responsibility for establishing, implementing and monitoring adherence to the Companys compensation philosophy and ensuring that executives and key management personnel are effectively compensated in a manner which is internally equitable. The Committee also is responsible for reviewing and establishing the compensation of directors.
Compensation Philosophy and Objectives. The Committees overall philosophy in terms of executive compensation is to link management incentives with the actual financial performance of the Company. Similarly, the compensation should attract, retain and motivate highly qualified individuals to achieve the Companys business goals and link their interests with shareholder interests. In setting compensation for the Companys executive officers, the Committee considers the executives performance, awards, if any, made during prior years and other relevant factors. The Committee seeks to have the long-term performance of the Companys common stock reflected in executive compensation through our equity incentive programs.
Elements of Compensation. The total compensation program for the Companys executive officers consists of the following:
The Committee seeks to structure each element of compensation to attract and retain the necessary executive talent, reward annual performance and provide incentive for both long-term strategic goals as well as short-term performance. The Committees policy for allocating between currently paid and long-term compensation is to ensure adequate base compensation to attract and retain personnel, while providing incentives to maximize long-term value for our shareholders.
Say on Pay Consideration. In accordance with SEC rules, the Company conducted a non-binding, advisory vote on the Companys executive compensation at its 2015 annual meeting. Approximately 76% of shareholders voted to approve the Companys executive compensation practices at the 2015 annual meeting.
Setting Executive Compensation. The Committee is responsible for establishing and periodically reviewing the compensation of the Companys executive officers and approving all equity awards. The Committee annually reviews the performance of the executive officers and, based on these reviews, the Committee determines salary adjustments and annual awards. Mr. Woods does not participate during deliberations regarding his compensation.
Salary. Base salaries for executive officers, other than recent hires, were established a number of years ago. Historically, base salaries have been increased at annual rates which approximate the general rates of increase of compensation for all employees of the Company. Annual salary adjustments are made effective April 1 of each year. For fiscal year 2016, the Committee increased the compensation of the Companys employees and executive officers, other than Mr. Woods, Mr. OConnell and Mr. Morawetz, by approximately
3%. Salaries are also reviewed at the time of a promotion or other change in responsibilities. During fiscal year 2015, the Committee approved salary increases for Mr. Woods and Mr. OConnell, to $315,000 and $250,000, respectively, to bring their salaries more in line with base salaries paid for comparable positions at similarly sized public companies. Effective April 6, 2015, Mr. Woods received an additional $45,000 salary increase. Effective April 1, 2016, Mr. Woods and Mr. Morawetzs salaries were increased to $370,800 and $190,921, respectively. Cash compensation paid to Mr. Morawetz is paid in Euros; the amount reported was converted to U.S. dollars at an assumed exchange rate of 1:$1.089.
Cash Incentive and Bonus Awards. Annual cash incentive awards are an important component of total executive cash compensation because they reward the Companys executives for achieving targeted, annual results and emphasize variable or at risk compensation. From time-to-time the Committee awards discretionary cash bonuses to the Companys executives to reward their efforts in extraordinary circumstances.
Short-Term Incentive Plan
During late 2014, the Committee engaged Radford, an Aon Hewitt Company, to conduct an assessment of the Companys executive compensation program, including a review of executive base salaries, short-term incentive opportunities and long-term incentives and pay mix as compared to the competitive market. Following receipt of Radfords report in March 2015, the Committee approved the Senior Executive Short-Term Incentive Plan (the STIP), which replaced the Companys prior Domestic and International Branch Plans for the fiscal year beginning February 1, 2015. Participants in the STIP (which may include any executive officer, vice president or director level manager) are determined annually by the Committee. Awards under the STIP are earned based on achieving or exceeding annual financial objectives (Performance Goals). The Committee has full discretion to establish the Performance Goals for any plan year. In March 2015, the Committee established Performance Goals for fiscal year 2016 of Consolidated Net Sales of $98,279,000, Consolidated Operating Income of $9,238,000 and Economic Value Added, which is defined as Net Operating Profit after Taxes [Capital × Cost of Capital]) (EVA), of $500,000.
Annually, the Committee establishes a Target Award for each STIP participant, which may vary as to each participant and from year to year. For fiscal year 2016, the Committee established the following Target Awards for our Named Executive Officers:
The Committee allocated the Target Awards to the fiscal year 2016 Performance Goals as follows:
Performance with respect to each specific Performance Goal is calculated independently to determine the amount of the award for each Performance Goal (each, an Award Component). The total STIP award earned by
a participant for a plan year is equal to the sum of the separate Award Components determined for each Performance Goal. Each Award Component is independently adjusted by an Adjustment Factor as follows:
If actual performance does not exceed 90% of the Performance Goal, then the Award Component for that Performance Goal will be zero. A participants STIP award is uncapped, except as follows:
Based on the Companys results, the Award Components were as follows:
The amount of a participants award under the STIP will be credited to a book account maintained by the Company (the Award Bank). The resultant balance in the participants account after crediting the amount of award (the Bank Balance) will then be used to determine the participants Payout Amount for the plan year.
The Payout Amount is equal to the sum of (i) the lesser of (A) the participants actual award for the plan year or (B) the participants Target Award for the plan year (Base Award) plus (ii) 30% of the participants Bank Balance (after deduction of the amount of the Base Award). Thus, only 30% of the amount in excess of the Target Award will be paid out currently and 70% of such excess will be banked and paid out in subsequent years in accordance with the foregoing formula, provided the participant remains employed with the Company.
For example, if a participants Target Award for Year 1 is $45,000 but the actual award is $55,000, then the Payout Amount for such year would be $48,000 ($45,000 + [30% × $10,000]) and the Bank Balance remaining after the payout would be $7,000. If the participants Target Award for Year 2 is $47,000 and the actual award is $45,000, then the Payout Amount for such year would be $47,100 ($45,000 + [30% × $7,000]) and the Bank Balance remaining after the payout would be $4,900.
The following table sets forth for each of our Named Executive Officers the amount of the award under the STIP for fiscal year 2016. Because the awards under the STIP for fiscal year 2016 were lower for each of our Named Executive Officers than their respective Target Awards, the full amount of the fiscal 2016 awards were paid to the Named Executive Officers, and no amounts were credited to their Bank Balances.
If a participants employment with the Company is terminated for any reason other than death, disability or retirement, then the participant will forfeit any interest in his Bank Balance. A participants Bank Balance will vest in full and become immediately payable in the event of termination of a participants employment with the Company due to the participants death, disability or retirement. A participants Bank Balance will also vest in full and become payable upon a change in control of the Company.
Long-Term Incentive Compensation. Total compensation at the executive level also includes long-term incentive awards granted under the Companys 2007 Equity Incentive Plan and 2015 Equity Incentive Plan. The objectives of the equity incentive program are to align executive and shareholder long-term interests by creating a strong and direct link between executive pay and total shareholder return, and to enable executives to develop and maintain a long-term stock ownership position in the Companys common stock. Prior to fiscal year 2013, all equity awards were in the form of stock options, which were generally granted in March of each year at an exercise price equal to the market price on the date of grant. Since 2004, all options granted to employees vest in four equal annual installments commencing on the first anniversary of the date of grant. Under the Companys 2007 Equity Incentive Plan and 2015 Equity Incentive Plan, the Committee may also make equity awards in the form of restricted stock, restricted units and performance units in addition to stock options. In fiscal year 2014, the Committee awarded restricted stock units to the Companys executive officers. Twenty-five percent of each award was subject to time-based vesting and became vested in April 2016. Vesting of the remaining 75% of each award was contingent upon the Company meeting specified performance goals, with 50% of each award to vest upon the achievement of cumulative budgeted sales targets for fiscal years 2014 through 2016; and 25% to vest upon the achievement of an average operating income return on net assets (ORONA) goal for fiscal years 2014 through 2016. In March 2016, the Committee determined that the average ORONA goal for fiscal years 2014 through 2016 had been achieved and the corresponding portion of the awards would become vested upon the filing of the Companys Annual Report on Form 10-K.
In fiscal year 2016, the Committee adopted its 2015 Long Term Equity Incentive Program, or the 2015 LTIP. Under the terms of the 2015 LTIP, the Committee granted restricted stock units to the Companys executive officers. A portion of the awards issued to each officer were time-based awards, which vest in four equal annual installments commencing on the first anniversary of the date of grant. The remaining awards may be earned based upon the increase in net sales, if any, achieved in each of the fiscal years 2016, 2017 and 2018 in relation to the Companys three-year net sales increase goal. To the extent that the Committee determines that net sales growth in a fiscal year was achieved due to organic growth, any restricted stock units earned as a result will immediately vest, while restricted stock units earned as a result of net sales growth resulting from acquisitions will vest in three equal annual installments commencing on the first anniversary of the date the Committee determines that the performance goal was achieved. Any performance based restricted stock units that are not
earned at the end of the three-year performance period will be forfeited. In March 2016, the Committee determined that approximately 9.6% of the performance based restricted stock units had been earned based on fiscal 2016 organic net sales growth and approximately 0.6% of the performance based awards had been earned based on fiscal 2016 net sales growth resulting from acquisitions.
Gregory A. Woods joined the Company as Chief Operating Officer in September 2012 and became Chief Executive Officer on February 1, 2014, upon Everett V. Pizzutis retirement. In November 2014, the Company entered into an Equity Incentive Award Agreement with Mr. Woods (the Equity Agreement), which provides for grants of equity awards to Mr. Woods that are intended to enhance his equity ownership, create stronger alignment with shareholder interests and reward him for driving the long-term growth and profitability of the Company. The Equity Agreement provides that in each of 2015, 2016 and 2017, the Company will grant Mr. Woods the following equity awards:
Each option and restricted stock award under the Equity Agreement will vest in four equal annual installments commencing on the first anniversary of the grant date for each such award, and all options and restricted stock will vest upon a change in control of the Company. The Equity Agreement provides that, in the event there is a change in control of the Company prior to June 1, 2018, the Company will pay Mr. Woods an amount equal to (i) the positive difference (if any) between the fair market value of the Companys common stock as of the date of the change in control and $13.80 (ii) multiplied by the number of options which the Company remains obligated to grant under the Equity Agreement.
Share Ownership and Retention Guidelines. The Committee believes that senior management should have a meaningful equity interest in the Company. In order to promote equity ownership and further align the interests of management with our shareholders, the Board has adopted share ownership and retention guidelines for our executives. These guidelines are based upon the market value of our common stock as a multiple of such officers base pay. The multiple is 3 times base salary for the CEO, 2 times base salary for the Chief Financial Officer and 1.25 times base salary for the other executive officers. Under these guidelines, an executive is expected to achieve the ownership level within five years from the later of April 1, 2015 or initial appointment as an executive officer. Executives are expected to retain at least 50% of the shares acquired upon exercise of any stock option (net of any shares tendered upon exercise or sold to pay the option exercise price) or vesting of restricted stock until they achieve the specified ownership level and thereafter maintain such ownership level.
Retirement and Other Benefits. In order to attract and retain key executives, the Company offers retirement benefits through a Profit-Sharing Plan and Employee Stock Ownership Plan for employees, including its executive officers.
Profit Sharing Plan. The Company maintains a qualified Profit Sharing Plan which provides retirement benefits to substantially all the Companys employees. Each eligible employee shares in contributions on the basis of relative (limited to $265,000 in 2015) compensation. In addition, participants are permitted to defer up to
50% of their cash compensation and make contributions of such deferral to this plan through payroll deductions. The Company makes matching contributions equal to 50% of the first seven percent of compensation contributed. The deferrals are made within the limits prescribed by Section 401(k) of the Internal Revenue Code. The Profit Sharing Plan provides for the vesting of 100% of matching contributions made by the Company to the account of the employee after three years of service. Contributions by an employee are 100% vested immediately.
Employee Stock Ownership Plan. The Company also has an Employee Stock Ownership Plan (ESOP) which provides retirement benefits to substantially all of its employees. Contributions in such amounts as the Board may annually determine are allocated among eligible employees on the basis of relative (limited to $100,000) compensation. Participants are 100% vested in any and all allocations. Contributions, which may be in cash or stock, are invested by the Plans trustee in shares of common stock of the Company.
Perquisites. In addition to the benefits described above, the Company provides automobile allowances to certain of its executive officers. The amount of any automobile allowance granted to our Named Executive Officers is reflected in the All Other Compensation column of the Summary Compensation Table below.
Change in Control Agreement. In November, 2014, the Company entered into a Change in Control Agreement (the CIC Agreement) with Mr. Woods. The CIC Agreement provides for the payment of severance benefits upon a change in control of the Company if Mr. Woods employment is terminated by the Company without cause or by Mr. Woods for good reason within the period (the CIC Period) beginning on the earlier of (i) 180 days prior to the occurrence of the change in control and (ii) the announcement of a transaction expected to result in a change in control, and ending on the second anniversary of the occurrence of a change in control. Severance payments to Mr. Woods include (i) payment of one and one-half times the sum of (A) his annual salary and (B) the greater of the amount of his target bonus for the fiscal year in progress or the highest annual bonus paid to him in the prior three years (collectively, base compensation), (ii) immediate vesting of all unvested stock options and restricted stock awards, (iii) continued health coverage for 18 months or until he receives benefits from another employer, and (v) reimbursement for outplacement services in an amount not to exceed 17% of his base compensation. If any payment or benefit under the CIC Agreement or under any other plan or agreement would constitute an excess parachute payment within the meaning of Section 280G of the Internal Revenue Code, and if Mr. Woods would be in a better after-tax position by reducing the such payments or benefits, the amounts payable under the CIC Agreement will be reduced to the extent necessary to avoid the excise tax payable under Section 280G.
Employment Agreements and Severance Benefits. In November 2014, in order to comply with certain legal requirements, the Company entered into an Employment Agreement with Michael Morawetz, Vice President-International Branches, as the general manager of its German subsidiary. The employment agreement can be terminated on six months notice and provides that in the event of the termination of his employment by the Company without cause, Mr. Morawetz will receive severance equal to one months salary for each year of his employment. Other than the contract with Mr. Morawetz, we have no employment agreements with any of our executive officers. Except for the Morawetz Employment Agreement and the CIC Agreement with Mr. Woods, we generally do not provide any severance benefits to our executives other than those provided to all employees. Severance benefits will vary based upon salary levels and length of service.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with management the Compensation Discussion & Analysis included above. Based on these reviews and discussions, the Compensation Committee has recommended to the Board that the Compensation Discussion & Analysis be included in the Companys Annual Report on Form 10-K for the fiscal year ended January 31, 2016 for filing with the SEC through incorporation by reference of this Proxy Statement.
Mitchell I. Quain (Chairman)
Hermann Viets, Ph.D.
The following table provides information regarding the total compensation paid or accrued by the Company to each of its Chief Executive Officer (CEO) and its two other highest paid executive officers other than the CEO for the fiscal year ended January 31, 2016 (collectively, the Named Executive Officers).
Summary Compensation Table
Outstanding Equity Awards at Fiscal Year-End
The following table provides information on all outstanding equity awards held by each of the Named Executive Officers as of January 31, 2016.
Grants of Plan Based Awards
The following table provides information on all plan-based awards by the Company for the fiscal year ended January 31, 2016 to each Named Executive Officer.
Option Exercises and Stock Vested
The following table provides information on all exercises of options by the Named Executive Officers and vesting of restricted stock awards during the fiscal year ended January 31, 2016.
Potential Payments upon Termination or Change-in-Control
The following table provides information regarding the estimated amounts payable to Mr. Woods pursuant to the CIC Agreement and Mr. Morawetz pursuant to his employment agreement with the Company, in each case assuming that the trigger event occurred on January 31, 2016, the last day of the Companys most recently completed fiscal year. The amounts shown as payable upon the triggering events described do not include amounts earned by the individual and accrued before the occurrence of the triggering event but payable after the triggering event, such as accrued and unpaid salary or the value of accrued but unused paid-time-off.
RELATED PARTY TRANSACTIONS
Potential conflicts of interest and related party transactions are referred by the Board to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing standards and SEC rules as a guide.
Other than as described below, no officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended January 31, 2016 any material interest, direct or indirect, in any material transaction or any material proposed transaction in which the amount exceeds $120,000 and to which the Company was or is to be a party.
The Company employs three sons of Everett V. Pizzuti, to two of whom the Company paid or accrued over $120,000 in compensation during the fiscal year ended January 31, 2016: Eric Pizzuti, as Vice President and
General Manager of QuickLabel Systems, and Christopher Pizzuti, as a QuickLabel Field Sales Engineer. The Company paid Eric Pizzuti $170,209 in salary and bonus and paid Christopher Pizzuti $166,567 in salary and sales commissions. Eric Pizzuti also received restricted stock units with a grant date fair value of $179,671, a vacation payout of $2,873 and a matching contribution to his Profit Sharing Plan account of $5,326. Christopher Pizzuti also received an automobile allowance of $7,500, a vacation payout of $762, and a matching contribution to his Profit Sharing Plan account of $894.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information about the Companys equity compensation plans as of January 31, 2016:
PROPOSAL NO. 2
ADVISORY VOTE ON EXECUTIVE COMPENSATION
As required by the Section 14A(a)(2) of the Exchange Act, the Board is providing shareholders with the opportunity to cast an advisory vote on the Companys executive compensation at the annual meeting through the following resolution:
RESOLVED, that the shareholders approve the Companys executive compensation, as described in the Compensation Discussion and Analysis and the tabular disclosure regarding named executive officer compensation (together with the accompanying narrative disclosure) in this Proxy Statement.
The Board believes that the Companys compensation policies and procedures, which are described more fully in the Compensation Discussion and Analysis section of this Proxy Statement and in the tables and narrative in the Executive Compensation section, are strongly aligned with the long-term interests of shareholders. These policies and procedures balance short-term and longer-term compensation opportunities to ensure that the Company meets short-term objectives while continuing to produce value for our shareholders over the long term.
Approval of this proposal requires the affirmative vote of a majority of the shares of common stock represented in person or by proxy at the annual meeting. This vote will not be binding on or overrule any decisions by the Board or any committee thereof, will not create or imply any additional fiduciary duty on the part of the Board, and will not restrict or limit the ability of the Companys shareholders to make proposals for inclusion in proxy materials related to executive compensation. However, the Compensation Committee and the Board will take into account the outcome of the vote when considering future executive compensation arrangements.
The Board recommends a vote FOR approval of the Companys executive compensation, as described in the Compensation Discussion and Analysis, and the tabular disclosure regarding named executive officer compensation (together with accompanying narrative disclosure) in this Proxy Statement.
PROPOSAL NO. 3
APPROVAL OF AMENDMENT TO THE COMPANYS ARTICLES OF INCORPORATION TO CHANGE THE NAME OF THE COMPANY
The Board has adopted and is seeking shareholder approval of an amendment (the Name Change Amendment) to the Companys Articles of Incorporation to change the Companys name from Astro-Med, Inc. to AstroNova, Inc. The Board recommends this action in order to publicly reflect the Companys transformational strategy.
Rationale for Proposed Name Change
On September 25, 2015, the Company announced that it would begin doing business as AstroNova on worldwide basis.
The Astro-Med name was originally based on the two markets where the Company applied its data visualization technology aerospace and medical. Since divesting the medical business in 2013, the Med part of the name no longer describes our business and confuses customers and investors.
AstroNova was selected because it fits the Companys transformation strategy. Astro refers to the companys strong roots in the aerospace business. Nova comes from the Latin word novus, meaning new. AstroNova exemplifies our traditional strengths in aerospace, plus our expanding presence in test and measurement, product identification, and other new areas where data visualization technology can be applied.
How the Name Change will be Implemented
If the Name Change Amendment is approved by shareholders, it will be implemented through, and become effective upon, the filing of an amendment to the Articles of Incorporation with the Secretary of State of the State of Rhode Island. The Name Change Amendment will change Article First of the Articles of Incorporation to read in its entirety as follows:
No changes will be made to the other provisions of the Articles of Incorporation pursuant to this Proposal 3. A copy of the proposed amendment to the Companys Articles of Incorporation is set forth in Appendix A.
If the Name Change Amendment is approved, the rights of shareholders holding certificated shares under currently outstanding stock certificates and the number of shares represented by those certificates will remain unchanged. The Name Change Amendment will not affect the validity or transferability of any currently outstanding stock certificates nor will it be necessary for shareholders with certificated shares to surrender or exchange any stock certificates they currently hold as a result of the name change. Regardless of whether the Name Change Amendment is approved, the Company will continue its product and services rebranding efforts under the AstroNova brand as described above.
Approval of this proposal requires the affirmative vote of a majority of our common stock entitled to vote. Votes may be cast for or against the proposal or may abstain; votes that abstain and broker non-votes will have the same effect as a vote against the proposal.
The Board recommends a vote FOR the approval of Proposal No. 3, which approves the amendment to the Companys Articles of Incorporation to change the name of the Company to AstroNova, Inc.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board is responsible for providing independent, objective oversight of the Companys accounting functions and internal controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ listing standards and SEC rules. The Audit Committee operates under a written charter approved by the Board.
Management is responsible for the Companys internal controls and financial reporting process. The independent accountants are responsible for performing an independent audit of the Companys consolidated financial statements in accordance with generally accepted auditing standards and issuing a report thereon. The Audit Committees responsibility is to monitor and oversee these processes.
The Audit Committees responsibilities focus on two primary areas: (1) the adequacy of the Companys internal controls and financial reporting process and the reliability of the Companys financial statements; and (2) the independence and performance of the Companys independent accountants. The Audit Committee has sole authority to select, evaluate and when appropriate, to replace the Companys independent auditors.
The Audit Committee has met with management and the Companys independent accountants, Wolf & Company, P.C., to review and discuss the January 31, 2016 financial statements. Management represented to the
Committee that the Companys consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee also discussed with Wolf & Company, P.C. the matters required by Auditing Standard No. 16 (Communication with Audit Committees) issued by the Public Company Accounting Board. The Audit Committee also received from Wolf & Company, P.C. the written disclosures and the letter from Wolf & Company, P.C. pursuant to applicable requirements of the Public Company Accounting Oversight Board regarding Wolf & Company, P.C.s communications with the Audit Committee concerning independence, and has discussed with Wolf & Company, P.C. its independence from the Company.
The Audit Committee received the information concerning the fees of Wolf & Company, P.C. for the year ended January 31, 2016 set forth below under Independent Accountant Fees and Services. When applicable, the Audit Committee considers whether the provision of non-audit services is compatible with maintaining the independence of the independent accountants. Wolf & Company, P.C. did not provide any non-audit services during the fiscal year ended January 31, 2016.
Based upon the review and discussions referred to above, the Audit Committee recommended that the Board include the audited consolidated financial statements in the Companys Annual Report on Form 10-K for the year ended January 31, 2016, to be filed with the SEC.
Graeme MacLetchie (Chairman)
Mitchell I. Quain
PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has sole authority to select, evaluate and when appropriate, to replace the Companys independent auditors. The Audit Committee has appointed Wolf & Company, P.C. as the Companys independent registered public accounting firm for the fiscal year ending January 31, 2017. Although action by the Companys shareholders on this matter is not required, the Audit Committee believes it is appropriate to seek shareholder ratification in light of the critical role played by the independent auditors in maintaining the integrity of Company financial controls and reporting and hereby requests the shareholders to ratify such appointment.
Approval of this proposal requires the affirmative vote of a majority of the shares of common stock represented in person or by proxy at the annual meeting.
The Board of Directors recommends a vote FOR the ratification of the appointment of Wolf & Company, P.C. as the Companys independent registered public accounting firm for the fiscal year ending January 31, 2017.
Independent Accountants Fees, Services and Other Matters
The Company expects a representative of Wolf & Company, P.C. will be present at the annual meeting with the opportunity to make a statement, if he or she so desires, and that such representative will be available to respond to appropriate questions.
Aggregate fees for professional services rendered for the Company by Wolf & Company, P.C. for the fiscal years ended January 31, 2016 and 2015 are set forth below. The aggregate fees included in the Audit Fees category are billed for the fiscal years for the audit of the Companys annual financial statements and review of financial statements and statutory and regulatory filings or engagements.
Audit Fees for the fiscal years ended January 31, 2016 and 2015 were for professional services rendered for the audits of the financial statements of the Company, quarterly review of the financial statements included in the Companys Quarterly Reports on Form 10-Q, consents and other assistance required to complete the year end audit of the consolidated financial statements.
Policy on Audit Committee Pre-Approval. The Audit Committee pre-approves all audit and non-audit services provided by the independent accountants prior to the engagement of the independent accountants with respect to such services. None of the services described above were approved by the Audit Committee under the de minimis exception provided by Rule 2-01(C)(7)(i)(c) under Regulation S-X.
A copy of the annual report of the Company for the fiscal year ended January 31, 2016 including the Companys annual report to the SEC on Form 10-K, accompanies this proxy statement. Such report is not part of this proxy statement.
PROPOSALS FOR 2017 ANNUAL MEETING
The 2017 annual meeting of the shareholders of the Company is scheduled to be held on May 16, 2017. If a shareholder intending to present a proposal at that meeting wishes to have such proposal included in the Companys proxy statement and form of proxy relating to the meeting, the shareholder must submit the proposal to the Company no later than December 19, 2016. Shareholder proposals that are to be considered at the 2017 annual meeting but not requested to be included in the proxy statement must be submitted no later than March 17, 2017 and no earlier than December 17, 2016.
No business other than that set forth in the attached Notice of Meeting is expected to come before the annual meeting, but should any other matters requiring a vote of shareholders arise, including a question of adjourning
the meeting, the persons named in the accompanying proxy will vote thereon according to their best judgment in the interests of the Company. In the event any of the nominees for the office of director should withdraw or otherwise become unavailable for reasons not presently known, the persons named as proxies will vote for other persons in their place in what they consider the best interests of the Company.
You are urged to sign and return your proxy promptly to make certain your shares will be voted at the meeting. You may revoke your proxy at any time before it is voted.
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of Section 7-1.2-905 of the General Laws of Rhode Island, 1956, as amended, the undersigned corporation adopts the following Articles of Amendment to its Articles of Incorporation:
(If additional space is required, please list on separate attachment)
The Restated Articles of Incorporation of Astro-Med, Inc., are hereby further amended by deleting Article First
thereof in its entirety and substituting therefor the following new Article First:
FIRST: The name of the corporation is AstroNova, Inc.
Form No. 101
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: x
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.