By Order of the Board of Directors
Mark A. LeDoux
Chairman
By Order of the Board of Directors
Mark A. LeDoux
Chair of the Board and Chief Executive Officer
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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NATURAL ALTERNATIVES INTERNATIONAL, INC. | ||
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NATURAL ALTERNATIVES INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Date: | Friday, December |
Time: | 11:00 |
Place: |
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To our Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders of Natural Alternatives International, Inc. We are holding this year’s Annual Meeting solely online via live webcast. You will not be able to attend physically in person. You will be able to attend the Annual Meeting online, listen to the Meeting, vote your shares electronically and submit your questions prior to and during the meeting.
You may attend the meeting by visiting: www.meetnow.global/MVSTMPT at the date and time of the meeting.
If you own your shares with our transfer agent, Computershare, follow the instructions on your proxy card to access the meeting. No advance registration is necessary.
If you do not hold your shares with our transfer agent Computershare, you have two options to attend the Annual Meeting.
1) | Registration in advance of the Annual Meeting |
To register, submit proof of your Natural Alternatives International, Inc. common stock holdings along with your name and email address to our transfer agent by email to: legalproxy@computershare.com, or by mail to Computershare, Natural Alternatives International, Inc., Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001. |
2) | Registration at the Annual Meeting |
You may register online at the Annual Meeting to attend, ask questions, and vote. We expect that the vast majority will be able to fully participate using the control number received with their proxy card. Please note, however, that this option is intended to be provided as a convenience only, and there is no guarantee this option will be available for everyone who does not hold their shares with our transfer agent. The inability to access this option shall in no way impact the validity of the Annual Meeting. You may choose the Register in Advance of the Annual Meeting (see option above). |
At the meeting, we will ask Shareholders to consider and act upon the following matters:
1. | To elect two Class I directors to serve until the next meeting of stockholders held to elect Class I directors and until their respective successors are elected and qualified; |
2. | To ratify the selection of Haskell & White LLP as our independent registered public accounting firm for the fiscal year ending June 30, |
3. | To transact such other business as may properly come before the meeting or any adjournments thereof. |
The foregoing matters are more fully described in the proxy statement accompanying this notice.
Stockholders of record at the close of business on October 22, 2018,28, 2021, the record date fixed by the Board of Directors, are entitled to notice of and to vote at the meeting and at any adjournments thereof.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON DECEMBER 7, 2018:3, 2021: Our proxy statement and annual report to stockholders are both available on-line at http://www.nai-online.com/our-company/investors/.
Your vote is important. Whether or not you plan to attend the meeting, we urge you to vote your shares at your earliest convenience. This will help ensure the presence of a quorum at the meeting. Promptly voting your shares by telephone, by Internet, or by signing, dating, and returning the enclosed proxy card will save us the expense and extra work of additional solicitation. Voting your shares by telephone or by Internet will further help us reduce the costs of solicitation. A pre-addressed envelope for which no postage is required if mailed in the United States is enclosed if you wish to vote by mail. Voting your shares now will not prevent you from attending or voting your shares at the meeting if you desire to do so. Please see “What“What is the effect of not casting my vote?” under “Voting Information”“Voting Information” in the accompanying proxy statement.
Only stockholders and persons holding proxies from stockholders may attend the meeting. If you plan to attend please bring a photo ID. Ifand do not hold your shares are heldwith our transfer agent Computershare, you must register by following the instructions contained in the name of a broker, trust, bank or other nominee, you will need to bring a recent brokerage statement,this proxy or letter from that broker, trust, bank or other nominee that confirms you are the beneficial owner of those shares.statement.
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By Order of the Board of Directors Mark A. LeDoux Chair of the Board and Chief Executive Officer |
1535 Faraday Avenue,
Carlsbad, California 92008,
(760) 744-7340
736-7700 - October 24, 201828, 2021
NATURAL ALTERNATIVES INTERNATIONAL, INC.
1535 Faraday Avenue
Carlsbad, California 92008
PROXY STATEMENT
We are providing this proxy statement in connection with the solicitation of proxies by the Board of Directors of Natural Alternatives International, Inc., a Delaware corporation (the “Company” or “we,” “our,” or “us”), for use at the Annual Meeting of Stockholders to be held on Friday, December 7, 2018,3, 2021, at 11:00 a.m. Pacific time, at Natural Alternatives International, Inc., 1215 Park Center Drive, Vista CA 92081 and at any adjournment or postponement thereof (the “Annual Meeting”). The meeting will be held virtually only on that date and time at https://meetnow.global/MVSTMPT. We expect to mail this proxy statement and the enclosed proxy card on or about November 2, 20182021 to all stockholders entitled to vote at the Annual Meeting.
VOTING INFORMATION
How can I attend the Annual Meeting?
The Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted exclusively by webcast. You are entitled to participate in the Annual Meeting only if you were a stockholder of the Company as of the close of business on the Record Date, or if you hold a valid proxy for the Annual Meeting. No physical meeting will be held. You will be able to attend the Annual Meeting online, listen to the meeting, and submit your questions during the meeting by visiting www.meetnow.global/MVSTMPT. You also will be able to vote your shares online when attending the Annual Meeting by webcast.
To participate in the Annual Meeting, you will need to review the information included on your Notice, on your proxy card, or on the instructions that accompanied your proxy materials.
The online meeting will begin promptly at 11:00 AM Pacific Time. We encourage you to access the meeting prior to the start time leaving ample time for the check in. Please follow the registration instructions as outlined in this proxy statement.
How do I register to attend the Annual Meeting virtually on the Internet?
If you own your shares through our transfer agent, Computershare, follow the instructions on your proxy card to access the meeting. No advance registration is necessary.
If you do not hold your shares with our transfer agent Computershare, you have two options to attend the Annual Meeting.
1) | Registration in advance of the Annual Meeting |
To register, submit proof of your Natural Alternatives International common stock holdings along with your name and email address to our transfer agent by email to: legalproxy@computershare.com, or by mail to Computershare, Natural Alternatives International, Inc., Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001. |
2) | Registration at the Annual Meeting |
You may register online at the Annual Meeting to attend, ask questions, and vote. We expect that the vast majority will be able to fully participate using the control number received with their proxy card. Please note, however, that this option is intended to be provided as a convenience, and there is no guarantee this option will be available for everyone. The inability to access this option shall in no way impact the validity of the Annual Meeting. You may choose the Register in Advance of the Annual Meeting (see option above). |
Who can vote?
You may vote if you were a stockholder of record as of the close of business on October 22, 2018.28, 2021. This date is known as the record date. You are entitled to one vote for each share of common stock you held on that date on each matter presented at the Annual Meeting. As of October 22, 2018, 7,570,87128, 2021, 6,365,085 shares of our common stock, par value $0.01 per share, were issued and outstanding, net of 1,105,8062,639,280 treasury shares.
How many votes are needed to hold the Annual Meeting?
To take any action at the Annual Meeting, a majority of our outstanding shares of common stock entitled to vote as of October 22, 2018,28, 2021, must be represented, in person or by proxy, at the Annual Meeting. This is called a quorum.
What is a proxy?
A “proxy” allows someone else to vote your shares on your behalf. Our Board of Directors is asking you to allow Mark A. LeDoux, our Chairman and Chief Executive Officer, and Kenneth E. Wolf, our President, and Chief Operating Officer, and Secretary to vote your shares at the Annual Meeting.
How do I vote by proxy?
Whether you hold shares directly as a stockholder of record or beneficially in street name, you may vote without attending the Annual Meeting. You may vote by granting a proxy or, for shares held in street name, by submitting voting instructions to your broker or nominee. To vote by proxy, please follow the instructions on the enclosed proxy card. You may vote by telephone, by Internet or by mail. SharesWe expect the vast majority of owners of shares held in street name may be votedalso vote by telephone or by Internet, only ifhowever, your bank, broker, trustee or other nominee makesmust make those methods available. Your bank, broker, trustee or nominee will enclose instructions for voting shares held in street name by telephone or by Internet with this proxy statement if your broker or nominee hasthey have chosen to make those methods available.
If you vote by proxy, your shares will be voted at the Annual Meeting in the manner you indicate. If you vote by mail and return a signed proxy card with no specific instructions, your shares will be voted as the Board of Directors recommends.
Can I change my vote after I submit my proxy?
Yes. You can change orIf you own your shares through our transfer agent, Computershare, you may revoke your proxy and change your vote at any time before it isyour shares are voted at the Annual Meeting by submitting another proxy with a later date. You may also sendtaking any of the following actions:
1) | Filing with the Corporate Secretary either a written notice of revocation or a duly executed proxy dated later than the proxy you wish to revoke; |
2) | Voting again on a later date via the Internet or by telephone no later than when voting is closed by the Corporate Secretary, which will occur during the Annual Meeting; |
3) | Attending the Annual Meeting and voting at the Annual Meeting no later than when the voting is closed by the Corporate Secretary (your attendance at the Annual Meeting, in and of itself, will not revoke your proxy). |
Beneficial owners of shares held in street name must follow the instructions provided by your bank, broker, trustee or other nominee.
Any written notice of revocation toor later dated proxy that is mailed must be received before the close of business on November 30, 2021 and should be addressed as follows: Natural Alternatives International, Inc., 1535 Faraday Avenue, Carlsbad, California 92008, Attention: Mr. Kenneth Wolf, Secretary.
Can I vote in person at the Annual Meeting instead of voting by proxy?
Yes. However, weWe encourage you to vote your shares at your earliest convenience to ensure that your shares are represented and voted. If youHowever, registered shareholders may vote yourat the annual meeting until the voting is closed by the Corporate Secretary.
We expect stockholders holding shares by proxy and later decide you would likebeneficially in street name will also be able to attendvote at the meeting until the voting is closed by the Corporate Secretary, however, this option is intended to be provided as a convenience, and votethere is no guarantee this option will be available for everyone holding shares beneficially in street name. You must follow the instructions provided by your shares in person, you will need to provide a written notice of revocation to the secretary of the meeting before your proxy is voted.bank, broker, trustee or other nominee.
How are votes counted?
Except as noted, all proxies received will be counted in determining whether a quorum exists and whether we have obtained the necessary number of votes on each proposal. Abstentions and broker non-votes are counted as present or represented for purposes of determining the presence or absence of a quorum for the Annual Meeting, but broker non-votes are not counted for purposes of determining the number of shares entitled to vote with respect to any proposal. Accordingly, broker non-votes will have no effect on the outcome of the vote for the election of directors or any other proposed matter. Generally, broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal because (i) the broker has not received voting instructions from the beneficial owner and (ii) the broker lacks discretionary voting power to vote such shares.
Stockholders of record who are present in person or by proxy and who abstain, including brokers holding customers’ shares of record who cause abstentions to be recorded at the meeting, are considered stockholders who are present and entitled to vote on the proposals. Accordingly, a properly executed proxy marked “ABSTAIN” or “WITHHOLD” with respect to any matter will not be voted, will have no effect on the outcome of the election of directors, and will have the same effect as a vote “AGAINST” any other proposed matter.
What is the effect of not casting my vote?
If you hold your shares in street name, it is critical that you cast your vote if you want it to count in the election of directors. In the past, if you held your shares in street name and you did not indicate how you wanted your shares voted in the election of directors, your bank or broker was allowed to vote those shares on your behalf in the election of directors as they felt appropriate.
Recent changes in regulations were madeRegulations have changed to take away the ability of your bank or broker to vote your uninstructed shares in the election of directors on a discretionary basis. Thus, if you hold your shares in street name and you do not instruct your bank or broker how to vote in the election of directors, no votes will be cast on your behalf. Your bank or broker will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of the Company’sour independent registered public accounting firm.
How many votes are required to approve each of the proposals?
For the election of the Class I directors, a plurality of the votes is required for the election of the directors. This means that the two candidates who receive the most votes will be elected to the available Class I positions on the Board of Directors. The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting is required to approve all of the other proposals.
As of October 22, 2018,28, 2021, our executive officers and directors were entitled to vote 2,035,1631,192,776 shares, or approximately 26.88%18.7% of our issued and outstanding common stock. Our executive officers and directors have indicated their intention to vote “for” the election of the nominees for Class I director,directors, and “for” Proposal 2.
You will not have any rights of appraisal or similar dissenter’s rights with respect to any matters to be acted upon at the Annual Meeting.
Who pays for this proxy solicitation?
We will pay the cost of soliciting proxies for the Annual Meeting, including the costs of preparing, assembling and mailing the proxy materials. We will provide copies of proxy materials to fiduciaries, custodians and brokerage houses to forward to the beneficial owners of shares held in their name. We may reimburse such fiduciaries, custodians and brokers for their costs in forwarding the proxy materials.
In addition to the solicitation of proxies by mail, certain of our officers and other employees may also solicit proxies personally or by telephone, facsimile, or other means. No additional compensation will be paid to these individuals for any such services.
OUR BOARD OF DIRECTORS
Board Members
Our Board of Directors is responsible for theour overall management of the Company.management. The Board of Directors is divided into three classes, designated Class I, Class II and Class III. The Board of Directors currently includes two Class I directors, twoone Class II directors,director, and one Class III director. Members of each class of our Board of Directors are elected to serve for a three-year term. The three-year terms of the members of each class are staggered, so that each year the members of a different class are due to be elected at the annual meeting. The Class I directors are currently serving a term that is due to expire at the Annual Meeting. The Class II directors aredirector is currently serving a term that is due to expire at our 20192022 annual meeting, and the Class III director is serving a term that is due to expire at the next annual meeting thereafter.
During calendar year 2021, one of our former directors died and on September 17, 2021, one director (Guru Ramanathan) was appointed by the Board of Directors to the vacant seat left by the deceased director to serve until the end of the term of the deceased former director which will occur at our Annual Meeting on December 3, 2021. In addition, two other former directors resigned effective September 18, 2021.
The name, age, positions held with the Company, and term of office of each of our current directors are shown below.
Name |
| Age |
| Positions Held |
| Class |
| Director Since |
| |
Joe E. Davis |
| 84 |
| Director |
| I |
|
| 2000 |
|
Alan G. Dunn |
| 63 |
| Director |
| II |
|
| 2004 |
|
Alan J. Lane |
| 56 |
| Director |
| III |
|
| 2004 |
|
Mark A. LeDoux |
| 64 |
| Director, Chairman of the Board and Chief Executive Officer |
| I |
|
| 1986 |
|
Lee G. Weldon |
| 79 |
| Director |
| II |
|
| 1992 |
|
Name | Age | Positions Held | Class | Director Since | ||||
Alan G. Dunn | 66 | Director | II | 2004 | ||||
Mark A. LeDoux | 67 | Director, Chairman of the Board and Chief Executive Officer | I | 1986 | ||||
Laura Kay Matherly | 57 | Director | III | 2019 | ||||
Guru Ramanathan | 58 | Director | I | 2021 |
The business experience and principal occupations of each of our current directors are described below.
Joe E. Davis
Mr. Davis has been a member of the Audit Committee of the Board of Directors since 2000 and the Chairman of the Audit Committee since 2004, a member of the Human Resources Committee of the Board of Directors since 2003, and a member of the Nominating Committee of the Board of Directors since 2004. He has been a private investor for more than fifteen years. He currently serves as a director (since 1997), the Chairman of the Audit Committee and a member of the Compensation and Nominating Committees of Anworth Mortgage Securities, Inc., a publicly traded real estate investment trust. Previously, Mr. Davis served as a trustee (since 1991) and a member of the Audit and Nominating Committees of American Funds Insurance Series, and as a director (since 2007) and a member of the Audit and Nominating Committees of American Funds Target Date Retirement Series, Inc. until retiring in December 2009; as Chairman of the Board of Linear Corporation (1987-1988); President and Chief Executive Officer of BMC Industries, Inc. (1985); and President and Chief Executive Officer of National Health Enterprises, Inc. (1974-1982). Formerly, Mr. Davis was a director and a member of the Audit Committee of BMC Industries, Inc. and Wilshire Technologies, Inc., and a director of Freymiller Trucking, Inc. Mr. Davis graduated from the University of Texas with a Bachelor of Science in Chemistry. He holds a Master of Business Administration (MBA) degree from the Harvard Graduate School of Business Administration.
We believe Mr. Davis’ qualifications to continue to serve on our Board of Directors include his prior service on our Board of Directors, his more than 30 years of practical experience and knowledge as a director as a result of his service on multiple boards and committees of public companies, and his prior experience as a Chief Executive Officer. In addition, his degree in chemistry enables him to understand much of the science involved in the products manufactured by the Company and his MBA from Harvard provides an understanding of and education in matters ranging from internal control to long range business strategy.
Alan G. Dunn
Mr. Dunn has been a member of both the Human Resources and Audit Committees of the Board of Directors since December 2005. Mr. Dunn was appointed to the Nominating Committee on September 17, 2021. Mr. Dunn is currently the Chair of the Audit Committee and the Nominating Committee. Mr. Dunn has been the President of GDI Consulting & Training Company (a manufacturing industry consulting firm focusing on cost and process improvement, productivity improvement and operational transformations) and the Chairman of its parent company, Gerald E. Dunn, Inc., since 1980. He currently serves as a director (since 2000) and the Chairman of the Compensation Committee (since 2003) and the Chairman of the Audit Committee (since July 2010) of Idaho Asphalt Supply Company, a privately held company. Formerly, he served as a director of TMI Products (2006-2008), a director and a member of the Compensation Committee of Tools & Metals, Inc. (2000-2004), a director of Air Logistics Corporation (1998-2003), a director of Bystrom Bros., Inc. (2004-2006), and a director of R.W. Lyall Company (1997-2000), each a privately held company, and a director of Tomorrow’s Morning, Inc. (1995-1998), a company that went public in 1998. Mr. Dunn served on the Board of Directors of ASCM (previously APICS (2012-2015)from 2012-2015), a 501(c) (6) professional association for global supply chain professionals. He served as Chairman of APICSASCM in 2015. Mr. Dunn received a bachelor's degree from California State University at Fullerton.
We believe Mr. Dunn’s qualifications to continue to serve on our Board of Directors include his substantial prior service on our Board of Directors and his extensive knowledge of manufacturing processes and manufacturing operations as a manufacturing industry consultant.
Alan J. Lane
Mr. Lane has been a member of both the Audit and Nominating Committees of the Board of Directors since 2004. Previously, he was a member of the Human Resources Committee of the Board of Directors (August 2004-December 2005). Mr. Lane has been a director, and Chief Executive Officer of Silvergate Bank since December 2008, an officer and director of Silvergate Capital Corporation since December 2008, and Chief Executive Officer of Silvergate Capital Corporation since January 2018. Mr. Lane formerly served as Chairman of the Board of Trustees of John Paul the Great Catholic University, Executive Chairman of Professional Business Bank, a director, President and Chief Operating Officer of Southwest Community Bancorp; Vice-Chairman and Chief Executive Officer of Financial Data Solutions, Inc., a subsidiary of Southwest Community Bancorp; and a director and Chief Administrative Officer of Southwest Community Bank. Before joining Southwest Community Bancorp, Mr. Lane was a director and the Chief Executive Officer and President of Business Bank of California. Mr. Lane graduated from San Diego State University with a Bachelor of Arts in Economics in 1984.
We believe Mr. Lane’s qualifications to continue to serve on our Board of Directors include his substantial prior service on our Board of Directors and his knowledge of banking practices and leadership skills as a current and former Chief Executive Officer of several banks.
Mark A. LeDoux
Mr. LeDoux has been a director and theour Chief Executive Officer of the Company since 1986, and the Chairman of the Board since 2001. Mr. LeDoux also has served as a director and the ChairmanChair of the Board of Natural Alternatives International Europe S.A. (NAIE) a, our wholly-owned subsidiary, of the Company since its inception in 1999. Previously, he served as President of the Company (1986-1996, 1999-2001, 2009-2015). Mr. LeDoux also served as a director, President and Chief Executive Officer of Natural Alternatives, Inc., a predecessor corporation that merged into the Company in 1986 (1980-1986); and as a director of CellLife Pharmaceuticals International, Inc., director and President of Transformative Health Products, Inc., and as a director and Chief Executive Officer of Disposition Company, Inc. (formerly known as Real Health Laboratories, Inc.), each a former wholly-owned subsidiary of the Company; and Executive Vice President and Chief Operating Officer of Kovac Laboratories, a manufacturer of nutritional supplements (1976-1980). Mr. LeDoux graduated Cum Laude from the University of Oklahoma with a Bachelor of Arts and Letters in 1975. He earned his Juris Doctor degree in 1979 from Western State University College of Law, which is now known as the Thomas Jefferson School of Law. He is a member of the YPO Graduates, the Founding Chairman and a currentformer Director of the International Council for Responsible Nutrition, based in Switzerland, a past Director and Chairman of the Board of Directors for the Council for Responsible Nutrition, based in Washington, D.C., a member of the Board of Directors of the Nutrition Industry Association-West, and a participant of the Codex Alimentarius Commission, the United Nations’ food and dietary supplement standard-setting body under joint supervision of its Food and Agriculture Organization and the World Health Organization. Mr. LeDoux is currently Chairman of the Board of the Natural Products Association where he has been a member since 1980.
We believe Mr. LeDoux’s qualifications to continue to serve on our Board of Directors include his extensive industry, technical and Company knowledge, his experience as one of theour founders of the Company and his long service as a director and executive officer of the Company.
Lee G. WeldonLaura Kay Matherly
Mr. WeldonMs. Matherly was elected as a Director at our annual meeting in 2019, has been a member of the Board of Directors since 1992, a member of the Human Resources Committee since 2020, and was appointed Chair of the Board of Directors since 1993,Human Resources Committee, and a member ofappointed to serve on the Nominating Committee of the Board of Directors since 2004. Previously, heon September 17, 2021. Ms. Matherly was a member ofappointed to the Audit Committee in June 2021. Ms. Matherly is a Senior Vice President of Comerica Bank in San Diego and has been involved in the commercial banking and wealth management industry for over thirty years. She previously held many positions with Wells Fargo Bank, N.A. and MUFG Union Bank, from November 1987 to July 15, 2019. Prior to her current position for the previous five years, she was Senior Vice President and Regional Manager of the BoardNorth San Diego Regional Commercial Banking Office of Directors (1993-2005). HeWells Fargo Bank N.A. Previously, she was Senior Vice President and Managing Director of the San Diego Wealth Management Group of MUFG Union Bank. Prior to joining MUFG Union Bank, Ms. Matherly was Senior Vice President and Regional Sales Development Manager for Wells Fargo Bank N.A. providing sales coaching and management of 30+ Regional Private Bankers in San Diego, Temecula and Inland Empire. She has also held senior leadership positions in Commercial Banking in Orange County and Los Angeles with Wells Fargo. Ms. Matherly has experience in investments, estate planning, private banking, mergers and acquisitions, syndicated loan transactions, interest rate hedging, various accounting transactions and financial statement analysis, troubled debt restructuring, bankruptcy proceedings, compensations plans, strategic sales leadership and retail banking. Ms. Matherly previously held Finra Series 24, 7, 66 Securities broker licenses, and a California Life Insurance license. She has been a Trustee of the ChairmanLa Jolla Playhouse since September 2013, a director of both the Human ResourcesBoys and Girls Clubs of Carlsbad from June 2002 to the Nominating Committees since 2004. Mr. Weldonpresent, and was the President of Natures Apothecary (1997-2000)the Junior League of Orange County, California Inc. and the Chairman and Chief Executive Officer of Kal Healthway, Inc., a food supplement distributor (1978-1995). HeBoard member from June 1997 to June 2001. Ms. Matherly graduated from theThe Ohio State University of California at Los Angeles with a Bachelor of Science in Business Administration - Finance in 1963. He becameMarch 1987.
We have had a membercredit facility with Wells Fargo for many years. For several years Ms. Matherly managed the Wells Fargo group in charge of the Young Presidents’ Organization in 1982commercial banking relationship with the Company which included a Line of Credit, deposits, foreign exchange transactions and became a graduate member in 1990.other customary banking services.
We believe Mr. Weldon’sMs. Matherly's qualifications to continue to serve on our Board of Directors include his substantialher prior service on our Board of Directors, her knowledge of the Company and of banking practices and leadership skills as a current and former officer of two banks, her past involvement as one of our bankers, and her long history of involvement in the business and local community in Southern California and specifically in Carlsbad, California where our corporate offices are located.
Guru Ramanathan
Dr. Ramanathan was appointed to a vacant seat on the Board, and was also appointed to the Audit, Human Resources and Nominating Committees of the Board on September 17, 2021.
He is President of Global Healthcare Innovation Advisory Services company, currently serving on Corporate and Advisory Board’s for established and early-stage companies in Global Food, Nutrition, Pharma, OTC, Digital Health and Primary Care Medicine industry sectors. He is very active in Nutrition Industry initiatives having been a founding member and current Chairman of the ‘Supplement Safety & Compliance Initiative’ (SSCI). He currently serves on CRN’s OWL Registry advisory board, as well as the Southwest College of Naturopathic Medicine’s Advisory Board.
Dr. Ramanathan is an Adjunct Professor at Pennington Biomedical Research Center in Baton Rouge Louisiana.
Dr. Ramanathan is a globally recognized expert on Innovation Management and his in-depth knowledgeadvisory concentrations include Scientific Affairs, Regulatory Compliance, Quality Assurance and Control, Clinical Trials Design & Management, Technology Acquisition, Alliance Management, Product Development and Manufacturing in the Global Health and Wellness Industry
Dr. Ramanathan’s industry experience spans Clinical care, Pharma, Consumer health, Animal health and the Retail sectors. His most recent appointment was with Pittsburgh based General Nutrition Corporation (GNC) as its Chief Innovation Officer, Senior Vice President and Member of our industry.the Executive Committee. Prior to that Dr. Ramanathan was a Senior Director for the US subsidiaries of Nutricia (Danone). Before this he was Medical Director for the US subsidiary of Scotia Pharmaceuticals. He has more than 40 years of management experiencealso held various industry consulting, research and teaching appointments in India and the nutritional supplement business, including all aspects of operations, sales, marketing, finance and strategic planning, having led several companies within the industry, including a former customer of the Company.US.
Dr. Ramanathan previously served on the Board of Directors of GNC-IVC Nutra Manufacturing JV, and for ten years on the Board of Prismic Pharmaceuticals until it was acquired by FSD Pharma. In addition to the Company, he presently serves on the Board of Directors of Nuritas Ltd., Nemysis Ltd. and Dutch Medical Food B.V.
Dr. Ramanathan holds an MBA from Duke University’s Fuqua School of Business focused on global business practices. He earned his Ph.D. from Tufts University in Healthcare Innovation Management.
Board Meetings
The Board of Directors held foursix meetings during the fiscal year ended June 30, 2018.2021. During the fiscal year ended June 30, 2018,2021, all members of the Board of Directors attended all of the meetings held by the Board of Directors, and all of the members of each of the committees of the Board of Directors attended all of the meetings of each of the committees on which they served.
Board Leadership Structure and Role in Risk Oversight
Our Board of Directors is comprised of fivefour members, fourthree of whom are independent. The remaining member, Mr. LeDoux, is the Company’sour founder, Chief Executive Officer and largest stockholder. Mr. LeDoux also serves as the Chairman of the Board. We do not have a lead independent director. The Chairman of the Board is not an officer position. The Chairman presides over meetings of the Board of Directors but in his capacity as a director Mr. LeDoux does not possess any other rights or responsibilities as a result of being the Chairman of the Board that differ from the other members of the Board of Directors. We believe a five-memberfour-member board, 80%three of which is comprised ofwhom are independent members, is appropriateacceptable for the size and operations of our Company.Company, when considering the impact of California law on the composition of Boards of Directors of public companies headquartered in California. Unfortunately for a Company of our size the impact of California's statutory requirements on the size of the Board would otherwise require we substantially increase the size of the Board at a cost to us and an increase in the complexity of Board operations we believe is not in our best interest. As a result, in 2021 our Board determined to reduce the size of the Board from six to four directors. The Board of Directors has Audit, Human Resources and Nominating Committees as described in more detail below. The Board of Directors is principally responsible for providing risk oversight of the Company. In its risk oversight role, our Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. Our Board of Directors does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole and through the Board committees that address risks inherent in their respective areas of oversight. The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to risk management in areas of financial risk, internal controls, and compliance with legal and regulatory requirements. The Human Resources Committee assists the Board of Directors with oversight of risk management in the areas of compensation policies and practices. The Nominating Committee assists the Board of Directors concerning organization, membership and structure of the Board of Directors, and facilitating the annual Board assessment process.
Independence
Nasdaq rules require listed companies to have a board of directors with at least a majority of independent directors. Our Board of Directors has determined that fourthree of our fivefour directors are independent under the listing standards of the Nasdaq Stock Market. The members determined to be independent are Ms. Matherly and Messrs. Davis, Dunn Lane and Weldon.Ramanathan.
Hedging
Our Corporate Disclosure and Insider Trading Policy (among other requirements) prohibits our officers, directors and employees from trading in any interest or position relating to the future price of our securities, such as a put, call or short sale, and buying and selling Company securities on the same day.
Board Committees
TheOur Board of Directors has an Audit Committee, a Human Resources Committee, which includes the functions of a compensation committee, and a Nominating Committee. Membership on each committee is limited to independent directors as defined under the listing standards of the Nasdaq Stock Market. In addition, members of the Audit Committee must also meet the independence standards for audit committee members adopted by the Securities and Exchange Commission (“SEC”). The members of the committees of our Board of Directors are as follows:
Audit Committee | Human Resources Committee | Nominating Committee | ||
|
|
| ||
Laura Kay Matherly (Chair) | ||||
Alan G. Dunn |
|
| ||
Laura Kay Matherly* | ||||
| Alan G. Dunn | Laura Kay Matherly | ||
Guru Ramanathan |
| Guru Ramanathan |
* | The Board of Directors has determined that |
During the fiscal year ended June 30, 2018,2021, the Audit Committee held four meetings, the Human Resources Committee held two meetings, and the Nominating Committee held one meeting.
Audit Committee. The Audit Committee operates under a charter originally adopted by the Board of Directors in 2000, amended and restated in April 2004, and further amended in August 2007 and September 2009. While theThe Audit Committee charter is not currently available on our website a copy of the charter, as amended, was included as Attachment A to the Company’s proxy statement for fiscal year 2011-2012.at www.nai-online.com. The general function of the Audit Committee is to oversee theour accounting and financial reporting processes of the Company and the audits of our financial statements. The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities relating to theour accounting, reporting and financial practices, of the Company, including the integrity of our financial statements and disclosures; the surveillance of administration and financial controls and our compliance with legal and regulatory requirements; the qualification, independence and performance of our independent registered public accounting firm; and the performance of our internal audit function and control procedures. The Audit Committee is responsible for reviewing and recommending matters to the Board of Directors, but has no authority to make final decisions except as set forth in the Audit Committee’s charter. The Audit Committee has the sole authority to appoint, determine funding for, and oversee our independent registered public accounting firm.
Human Resources Committee. The Human Resources Committee operates under a charter adopted by the Board of Directors in January 2006, and amended in August 2007, September 2009 and September 2015. While theThe Human Resources Committee charter is not currently available on our website a copy of the charter, as amended, was included as Attachment A to the Company’s proxy statement for the fiscal year 2014-2015.at www.nai-online.com. The primary purpose of the Human Resources Committee is to oversee the Company’sour overall compensation and incentive programs for the Company’sour executive officers and certain other key personnel. The Human Resources Committee is responsible for reviewing and recommending matters to the Board of Directors, which may be based on recommendations from the Company’sour management, but has no authority to make final decisions except with respect to the Company’sour incentive plans as described below or as otherwise set forth in the committee’s charter. Among other things, the Human Resources Committee recommends to the Board of Directors the amount of compensation to be paid or awarded to our officers and certain other personnel including salary, bonuses, other cash or stock awards under our incentive compensation plans as in effect from time to time, retirement and other compensation, and is responsible for evaluating the performance of the Company’sour Chief Executive Officer and making recommendations to the Board of Directors concerning the compensation for such officer. In addition, the Human Resources Committee has delegated to its Chairman the authority to administer the Company’s 2009 Omnibus Incentive Plan with respect to employees who are not officers or directors of the Company, to the sole extent of approving stock option grants under the plan to such employees, within the limitations of such plan, and only for grants proposed by the Company’s Chief Executive Officer and Chief Financial Officer not exceeding 5,000 shares, and with a term not exceeding five years, an exercise price equal to at least 110% of the last reported sale price of the Company’s common stock on the Nasdaq Stock Market on the date of grant, and vesting over a period of not less than three years. The Human Resources Committee may engage the services of an independent compensation and benefits consulting company when the committee deems appropriate to conduct a survey and review of the Company’sour compensation programs as compared to other similarly situated companies taking into account, among others, industry, size and location.
Nominating Committee. The Nominating Committee operates under a charter adopted by the Board of Directors in August 2004, and amended in August 2007 and September 2009. While theThe Nominating Committee charter is not currently available on our website a copy of the charter, as amended, was included as Attachment C to the Company’s proxy statement for fiscal year 2011-2012.at www.nai-online.com. The purpose of the Nominating Committee is to assist the Board of Directors in identifying qualified individuals to become members of the Board of Directors and in determining the composition of the Board of Directors and its various committees. The Nominating Committee periodically reviews the qualifications and independence of directors, selects candidates as nominees for election as directors, recommends directors to serve on the various committees of the Board of Directors, reviews director compensation and benefits, and oversees the self-assessment process of each of the committees of the Board of Directors.
The Nominating Committee considers nominee recommendations from a variety of sources, including nominees recommended by stockholders. Persons recommended by stockholders are evaluated on the same basis as persons suggested by others. Stockholder recommendations may be made in accordance with our Stockholder Communications Policy. See “Stockholder Communications with Directors” below. The Nominating Committee has the authority to retain a search firm to assist in the process of identifying and evaluating candidates.
The Nominating Committee has not established any specific minimum requirements for potential members of our Board of Directors. Instead, the Nominating Committee’s evaluation process includes many factors and considerations including, but not limited to, a determination of whether a candidate meets Nasdaq and/or SEC requirements relating to independence and/or financial expertise, as applicable, and whether the candidate meets the Company’sour desired qualifications in the context of the current make-up of the Board of Directors with respect to factors such as business experience, education, intelligence, leadership capabilities, integrity, competence, dedication, diversity, skills, and the overall ability to contribute in a meaningful way to the deliberations of the Board of Directors respecting the Company’sour business strategies, financial and operational performance and corporate governance practices. The Nominating Committee will generally select those nominees whose attributes it believes would be most beneficial to the Companyus in light of all the circumstances.
Stockholder Communications with Directors
Our Board of Directors has adopted a Stockholder Communications Policy to provide a process by which our stockholders may communicate with the Board of Directors. Under the policy, stockholders may communicate with the Board of Directors as a whole, with the independent directors, with a committee of the Board, or with a particular director. Stockholders wishing to communicate directly with our Board of Directors may do so by mail addressed to Natural Alternatives International, Inc., 1535 Faraday Avenue, Carlsbad, California, 92008, Attn: Corporate Secretary. The envelope must contain a clear notation indicating that the enclosed letter is a “Stockholder-Board Communication” or “Stockholder-Director Communication.” All such letters must identify the author as a stockholder of the Company and clearly state whether the intended recipients are all members of the Board of Directors, all independent directors, all members of a committee of the Board, or certain specified individual directors. The Corporate Secretary will review the communications received from stockholders at the above designated address on a regular basis and if they are relevant to the Company’sour operations and policies, they will be copied and forwarded to the appropriate director or directors as expeditiously as reasonably practical. By way of example, communications that are unduly hostile, threatening, obscene, illegal or similarly inappropriate will not be forwarded to any director. Matters deemed to be trivial in the sole discretion of the Corporate Secretary will be delivered to the appropriate director or directors at the next regularly scheduled meeting of the Board of Directors. The Corporate Secretary will periodically provide the Board of Directors with a summary of all communications received that were not forwarded and will make those communications available to any director upon request. The Board of Directors will determine whether any communications sent to the Board of Directors should be properly addressed by the entire Board or a committee thereof and whether a response to the communication is warranted.
Attendance at Annual Meetings
The members of the Board of Directors are encouraged, but not required, to attend each of the Company’sour annual meetings of stockholders. It may not be possible or practical, in light of other business commitments of the directors, for all of the members of the Board of Directors to attend all of the Company’sour annual meetings of stockholders. At the Company’sour most recent annual meeting of stockholders held on December 5, 2017,4, 2020, all of the members of the Board of Directors were present.
PROPOSAL 1
ELECTION OF CLASS I DIRECTORS DIRECTORS
Nominees
At the Annual Meeting, two Class I directors are to be elected, to serve until the next meeting of stockholders held to elect Class I directors and until their respective successors are elected and qualified or their earlier death, resignation or removal. The Board of Directors proposes the election of the nominees named below, who currently serve as Class I members of our Board of Directors.
Unless authorization to do so is withheld, proxies received will be voted “for” the nominees named below. If either of the nominees should become unavailable for election before the Annual Meeting, the proxies will be voted for the election of such substitute nominee as the present Board of Directors may propose. The personEach of the persons nominated for election has agreed to serve if elected, and the Board of Directors has no reason to believe that theany nominee will be unable to serve.
Our Board of Directors proposes the election of the following nominees as the Class I members of theour Board of Directors:
Joe E. Davis
Mark A. LeDoux
Guru Ramanathan
Our Board of Directors unanimously recommends that you vote “FOR”“FOR” the election of the nomineesnominees as
Class I directorsdirectors of the Company.Company in Class I.
PROPOSAL 2
RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has selected and approved Haskell & White LLP to serve as our independent registered public accounting firm for the fiscal year ending June 30, 2019.2022. One or more representatives of Haskell & White LLP are expected to be present at the Annual Meeting and are expected to be available to respond to appropriate questions and to make a statement if they desire to do so.Meeting. Haskell & White LLP was first appointed to serve as our independent registered public accounting firm for the fiscal year ending June 30, 2015.
Audit Fees
Our independent registered public accounting firm, Haskell & White LLP, billed us aggregate fees in the amount of $187,575$196,750 for the fiscal year ended June 30, 2018,2021, and $187,845$200,428 for the fiscal year ended June 30, 2017,2020, for professional services rendered for the audit of our annual financial statements, the reviews of the financial statements included in our Quarterly Reports on Form 10-Q and other services provided in connection with our regulatory filings.
Audit-Related Fees
There were fees in the amount of $8,500$3,250 for the fiscal year ended June 30, 20182021 billed to the Companyus by Haskell & White LLP for assurance and related services reasonably related to the performance of the audit or review of our financial statements and not included under “Audit Fees.” There were no$3,500 in audit-related fees billed to the Companyus by Haskell & White LLP for the fiscal year ended June 30, 2017.2020.
Tax Fees
There were no tax fees billed to the Companyus by Haskell & White LLP during the fiscal years ended June 30, 20182021 and June 30, 2017.2020.
All Other Fees
There were no other fees billed to the Companyus by Haskell & White LLP for products and services provided during the fiscal years ended June 30, 20182021 and June 30, 2017.2020.
Pre-Approval Policies and Procedures
On June 23, 2003, the Audit Committee approved certain policies and procedures under which all audit and non-audit services performed by our independent registered public accounting firm must be approved in advance by the Audit Committee. Under these policies and procedures, proposed services to be provided by our independent registered public accounting firm may either be pre-approved without consideration of specific case-by-case services by the Audit Committee (“general pre-approval”), or require the specific pre-approval of the Audit Committee (“specific pre-approval”). The Audit Committee may delegate either type of pre-approval authority to one or more of its members, who would then be required to report any pre-approval decisions to the Audit Committee at its next scheduled meeting. Unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committee if it is to be provided by our independent registered public accounting firm. Any proposed services exceeding pre-approved cost levels or budgeted amounts also will require specific pre-approval by the Audit Committee. In granting both general and specific pre-approval, the Audit Committee will consider whether such services are consistent with the SEC’s rules on auditor independence, as well as whether our independent registered public accounting firm is best positioned to provide the most effective and efficient service, for reasons such as familiarity with our business, people, culture, accounting systems, risk profile and other factors, and whether the service might enhance our ability to manage or control risk or improve audit quality. The term of any general pre-approval will be 12 months unless the Audit Committee determines otherwise. For the fiscal year ended June 30, 2018,2021, all of the audit and non-audit services described herein were approved pursuant to these policies and procedures, as adopted by the Audit Committee, and none of the services were approved by the Audit Committee pursuant to a waiver of pre-approval, as contemplated by Regulation S-X, Rule 201(c)(7)(i)(C).
Audit Services. The annual audit services engagement terms and fees are subject to specific pre-approval by the Audit Committee. Audit services include the annual financial statement audit and quarterly reviews, subsidiary audits, and other services necessary for the auditors to form an opinion on the Company’sour consolidated financial statements. The Audit Committee monitors the audit services engagement no less frequently than quarterly and also approves, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope, Company structure or other items. In addition, the Audit Committee may grant general pre-approval to other audit services, which include statutory or financial audits for our subsidiaries of the Company and services associated with SEC registration statements, periodic reports and other documents filed with the SEC or issued in connection with securities offerings.
Audit-Related Services. The Audit Committee may grant general pre-approval of audit-related services, which are assurance and related services that are reasonably related to the performance of the audit or review of the Company’sour financial statements or that are traditionally performed by the independent registered public accounting firm. Audit-related services include due diligence services pertaining to any potential business acquisitions or dispositions, consultations related to accounting, financial reporting or disclosure matters not classified as audit services, assistance with the implementation of new accounting and financial reporting rules and guidance, financial audits of employee benefit plans, and assistance with internal control reporting requirements.
Tax Services. To the extent the Company retains itswe retain our independent registered public accounting firm to provide tax services, the Audit Committee may grant general pre-approval for those tax services that historically have been provided by its independent registered public accounting firm and that the Audit Committee has reviewed and determined would not impair the independence of the auditor. Generally, tax services involving large and complex transactions must be specifically pre-approved by the Audit Committee. For quite a few years the Company haswe have exclusively used another firm of Certified Public Accountants to provide tax services and hashave not relied for tax services upon the independent registered public accounting firm that provides the Companyour audit and audit related services.
Other Services. The Audit Committee may grant general pre-approval to those permissible non-audit services that it determines are routine and recurring services and that would not impair auditor independence. All other services not otherwise classified above must be specifically pre-approved by the Audit Committee.
Procedures. All services proposed to be provided by our independent registered public accounting firm that do not require specific pre-approval by the Audit Committee are submitted to the Company’sour Chief Financial Officer, who determines whether such services are included within those that have received general pre-approval by the Audit Committee. All services proposed to be provided by our independent registered public accounting firm that require specific pre-approval by the Audit Committee are submitted to the Audit Committee or its delegated member by both the independent registered public accounting firm and the Company’sour Chief Financial Officer. The Chief Financial Officer is responsible for monitoring the performance of the services provided by the independent registered public accounting firm, determining whether such services are in compliance with the Audit Committee’s pre-approval policies, and reporting the results of his monitoring on a periodic basis to the Audit Committee.
Effect of Ratification
Ratification by stockholders of the selection of Haskell & White LLP as our independent registered public accounting firm is not required by applicable law. However, as a matter of policy and sound corporate practice, we are submitting the selection to our stockholders for ratification at the Annual Meeting. If stockholders fail to ratify the selection of Haskell & White LLP, the Board of Directors will reconsider the matter. Even if the selection is ratified by stockholders, the Board of Directors may select a different firm to serve as our independent registered public accounting firm at any time during the fiscal year if it believes a change would be in the best interests of the Company and its stockholders.
Our Board of Directors unanimously recommends that you vote “FOR”“FOR” Proposal 2.2.
OUR EXECUTIVE OFFICERS
The Board of Directors appoints the executive officers of the Company who are responsible for administering our day-to-day operations. The name, age, positions held with the Company, and term of office of each of our executive officers are shown below.
Name |
| Positions Held |
| Officer | Positions Held | Officer | |||||||
Mark A. LeDoux | 64 |
| Director, Chairman of the Board and Chief Executive Officer |
| 1986 | 67 | Director, Chairman of the Board and Chief Executive Officer | 1986 | |||||
Kenneth E. Wolf | 57 |
| President, Chief Operating Officer and Secretary |
| 2008 | 60 | President, Chief Operating Officer and Secretary | 2008 | |||||
Michael E. Fortin | 41 |
| Chief Financial Officer | 2015 | 44 | Chief Financial Officer | 2015 | ||||||
The business experience and principal occupations of each of our executive officers are described below.
Mark A. LeDoux
Mr. LeDoux has been a director and the Chief Executive Officer of the Company since 1986, and the Chairman of the Board since 2001. Mr. LeDoux also has served as a director and the Chairman of the Board of Natural Alternatives International Europe S.A. (NAIE) a, our wholly-owned subsidiary, of the Company since its inception in 1999. Previously, he served as President of the Company (1986-1996, 1999-2001, 2009-2015). Mr. LeDoux also served as a director, President and Chief Executive Officer of Natural Alternatives, Inc., a predecessor corporation that merged into the Company in 1986 (1980-1986); and as a director of CellLife Pharmaceuticals International, Inc., director and President of Transformative Health Products, Inc., and as a director and Chief Executive Officer of Disposition Company, Inc. (formerly known as Real Health Laboratories, Inc.), each a former wholly-owned subsidiary of the Company; and Executive Vice President and Chief Operating Officer of Kovac Laboratories, a manufacturer of nutritional supplements (1976-1980). Mr. LeDoux graduated Cum Laude from the University of Oklahoma with a Bachelor of Arts and Letters in 1975. He earned his Juris Doctor degree in 1979 from Western State University College of Law, which is now known as the Thomas Jefferson School of Law. He is a member of the YPO Graduates, the Founding Chairman and a currentpast Director of the International Council for Responsible Nutrition, based in Switzerland, a past Director and Chairman of the Board of Directors for the Council for Responsible Nutrition, based in Washington, D.C., a member of the Board of Directors of the Nutrition Industry Association-West, and a participant of the Codex Alimentarius Commission, the United Nations’ food and dietary supplement standard-setting body under joint supervision of its Food and Agriculture Organization and the World Health Organization. Mr. LeDoux is currently Chairman of the Board of the Natural Products Association where he has been a member since 1980.
Kenneth E. Wolf
Mr. Wolf has been theour President of the Company since October 2015, theour Chief Operating Officer of the Company since June 2010, and theour Secretary of the Company since February 2009. Mr. Wolf previously served as theour Chief Financial Officer of the Company from February 2008 through September 2015. Before joining the Company, Mr. Wolf was Chief Financial Officer, Treasurer and Corporate Secretary for Phoenix Footwear Group, a publicly-traded, multi-brand footwear and accessories company that had $140 million in annual sales and for which Mr. Wolf managed a staff of 30 employees (2003-2007); an independent consultant for various San Diego-based companies where he performed interim Chief Financial Officer responsibilities (2002); and Senior Vice President-Finance/Controller for Callaway Golf Company, a premium consumer goods company listed on the New York Stock Exchange that had $1.0 billion in annual sales and for which Mr. Wolf managed a staff of 50 employees (1992-2001). Mr. Wolf received his Certified Public Accountant license from the State of California and a Bachelor of Science in Business Administration-Accounting from California State University in Fresno, California.
Michael E. Fortin
Mr. Fortin has been theour Chief Financial Officer of the Company since October 2015. Prior to his appointment as Chief Financial Officer, Mr. Fortin was our Director of Accounting and SEC Reporting for the Company from April 2008 to September 2015. Before joining the Company, Mr. Fortin was the Director of Finance for K2 Licensed Products, a subsidiary of Jarden Corporation, a consumer products company specializing in licensed sporting goods that had $30 million in annual sales and for which Mr. Fortin managed a staff of 6 employees (2006-2008); Manager - Financial Accounting Operations for HSBC Auto Finance, a subsidiary of HSBC Bank USA, specializing in subprime auto lending that had $1.5B in annual revenues and for which Mr. Fortin managed a staff of 4 employees (2003-2006); and Audit Senior for Arthur Andersen LLP and KPMG LLP (1999-2003). Mr. Fortin received his Certified Public Accountant license from the State of California and a Bachelor of Science in Business Administration-Accounting from San Diego State University, California.
STOCK HOLDINGS OF CERTAIN OWNERS AND MANAGEMENT
The following table sets forth information on the beneficial ownership of our common stock by our directors and executive officers, as well as stockholders who are known by us to own beneficially more than 5% of our common stock, as of October 22, 2018.28, 2021.
Name of Beneficial Owner | Number of Shares and Nature | Percent of Common |
Number of Shares and Nature |
Percent of Common | ||||||||||||
Dimensional Fund Advisors LP Palisades West, Building One, 6300 Bee Cave Road | 563,173 | (3) | 7.44 | % | 553,688 | (3) | 8.7 | % | ||||||||
Renaissance Technologies LLC 800 Third Avenue New York, New York 10022 | 511,802 | (4) | 6.76 | % | 517,802 | (4) | 8.1 | % | ||||||||
The Juice Plus+ Company 140 Crescent Drive Collierville, Tennessee 38017 | 308,000 | (5) | 4.07 | % | ||||||||||||
Joe E. Davis, Director | 95,296 | (6) | 1.26 | % | ||||||||||||
Alan G. Dunn, Director | 49,328 | (6) | * | 61,211 | (5) | * | ||||||||||
Michael E. Fortin, Chief Financial Officer | 64,968 | (7) | * | 35,847 | (6) | * | ||||||||||
Alan J. Lane, Director | 58,328 | (6) | * | |||||||||||||
Mark A. LeDoux, Chairman of the Board and Chief Executive Officer | 1,184,319 | (8) | 15.56 | % | 978,033 | (7) | 15.4 | % | ||||||||
Lee G. Weldon, Director | 122,641 | (6) | 1.62 | % | ||||||||||||
Laura Kay Matherly, Director | 4,000 | (8) | * | |||||||||||||
Kenneth E. Wolf, President and Chief Operating Officer | 180,283 | (9) | 2.37 | % | 113,685 | (9) | 1.8 | % | ||||||||
All directors and executive officers as a group (seven persons) | 2,155,163 | (10) | 28.02 | % | ||||||||||||
All directors and executive officers as a group (five persons) | 1,192,776 | 18.7 | % | |||||||||||||
* | Less than 1%. |
1 | A person is considered to beneficially own any shares: (i) over which the person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which the person has the right to acquire beneficial ownership at any time within 60 days (such as through the exercise of stock options). Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children. |
2 | The percentages shown are calculated based on the number of shares of our common stock outstanding plus, for each person or group, any shares that person or group has the right to acquire within 60 days of October |
3 | As reported by Dimensional Fund Advisors LP on Schedule 13G filed by Dimensional Fund Advisors LP with the SEC on February |
4 | As reported by Renaissance Technologies LLC on Schedule 13G filed by Renaissance Technologies LLC with the SEC on February |
5 |
|
6 | Includes |
7 | Includes |
8 | Includes |
9 | Includes |
|
|
From time to time, the number of our shares held in the “street name” accounts of various securities dealers for the benefit of their clients or in centralized securities depositories may exceed 5% of the total shares of our common stock outstanding.
EXECUTIVE OFFICER COMPENSATION
Summary Compensation Table
The following table shows the compensation earned by or paid or awarded to our executive officers for all services rendered by them in all capacities to the Company and its subsidiaries during each of the last two fiscal years ended June 30.
|
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($)1 | Option Awards ($)1 | All Other Compensation ($)2 | Total ($) | ||||||||||||||||||
Mark A. LeDoux | 2018 | 400,000 | 100,000 | 282,500 | 0 | 61,936 | 844,436 |
| Chief Executive Officer | |||||||||||||||||||||||||
| 2017 | 400,000 | 225,000 | 217,500 | 0 | 47,549 | 890,049 | |||||||||||||||||||
Kenneth Wolf | 2018 | 375,000 | 75,000 | 226,000 | 0 | 35,132 | 711,132 | ||||||||||||||||||
| President and Chief | |||||||||||||||||||||||||
| Operating Officer | 2017 | 375,000 | 200,000 | 174,000 | 0 | 34,457 | 783,457 | ||||||||||||||||||
Michael E. Fortin | 2018 | 200,000 | 45,000 | 169,500 | 0 | 34,267 | 448,767 | ||||||||||||||||||
| Chief Financial Officer | |||||||||||||||||||||||||
2017 | 196,944 | 100,000 | 130,500 | 0 | 34,180 | 461,624 |
| SUMMARY COMPENSATION TABLE FOR FISCAL-YEAR ENDED JUNE | |||||||||||||||||||||||||
Name and Principal Position | Fiscal | Salary | Bonus | Stock | Option | Deferred Cash Awards($)2 | All Other | Total | |||||||||||||||||
Mark A. LeDoux Chief Executive Officer | 2021 | 425,000 | 75,250 | 184,910 | 1 | — | 222,000 | 2 | 44,916 | 952,076 | |||||||||||||||
| 2020 | 425,000 | — | — | — | — | 67,853 | 492,853 | ||||||||||||||||||
Kenneth Wolf President and Chief Operating Officer | 2021 | 400,000 | 60,250 | 151,290 | 1 | — | 175,000 | 2 | 33,906 | 820,446 | |||||||||||||||
2020 | 400,000 | — | — | — | — | 37,809 | 437,809 | ||||||||||||||||||
Michael E. Fortin Chief Financial Officer | 2021 | 250,000 | 45,250 | 109,265 | 1 | — | 135,000 | 2 | 42,640 | 582,156 | |||||||||||||||
2020 | 249,038 | — | — | — | — | 38,330 | 287,368 | ||||||||||||||||||
1 |
|
| 2 |
|
| 3 | Includes matching contributions under |
Employment Agreements
We have employment agreements with Messrs. LeDoux, Wolf and Fortin. Under the terms of each agreement, the officer’s employment is at-will and the employment may be terminated at any time, with or without cause, by either the officer or the Company.party. Each officer receives an annual salary, payable no less frequently than bi-weekly, and may receive certain employee benefits available generally to other corporate officers, including, without limitation, bonus compensation in a manner and at a level determined from time to time in the sole discretion of the Board of Directors, medical, dental, term life, and short and long term disability and long term care. The Companyinsurance. We also may invite officers and their spouses to attend Company-related events and generally provides for, or reimburses expenses of, such officers’ and spouses’ travel, food and lodging for attendance at such events.
The annual salaries of Messrs. LeDoux, Wolf and Fortin in effect at OctoberJuly 1, 20182021 were:
Name | Annual | |||
Mark A. LeDoux | $ | 425,000 | ||
Kenneth Wolf | $ | 400,000 | ||
Michael E. Fortin | $ | 225,000 | ||
Name | Annual | |||
Mark A. LeDoux | $475,000 | |||
Kenneth Wolf | $450,000 | |||
Michael E. Fortin | $300,000 | |||
Under the terms of the employment agreements for Messrs. LeDoux, Wolf and Fortin, each officer is entitled to a severance benefit in the event the officer is terminated by the Company without cause. For Mr. LeDoux, his severance benefit iscause in an amount equal to one year’s compensation, provided he executes and delivers to the Company a general release of claims. For Messrs. Wolf and Fortin their severance benefit is an amount equal to six months’ base salary and continuing group health insurance coverage pursuant to COBRA for sixtwelve months following termination at the Company’sour expense, provided they execute and deliver to the Companyus a general release of claims. If an officer does not execute and deliver a general release of claims, the severance benefit is reduced to one month’s compensation. No officer is entitled to receive a severance benefit if the officer is terminated by the Company for cause, or if the officer voluntarily resigns or retires. If an officer is terminated by the Companyus without cause upon a change in control, the officer is entitled to receive a severance benefit in an amount equal to two years’ compensation for Mr. LeDoux, and one year’s compensation and continuing group health insurance coverage pursuant to COBRA for twelve months following termination at the Company’sour expense for Messrs. Wolf and Fortin, provided the officersthey execute and deliver to the Companyus a general release of claims. If the officer does not execute and deliver a general release of claims, the severance benefit is reduced to one month’s compensation. In addition, if any officer dies, becomes disabled, or is terminated by the Company without cause uponwithin three months prior or within twelve months following a change of control, all then outstanding options held by the officer become fully exercisable and remain so for the term of the option, and all restricted stock held by the officer become unrestricted, provided that the officer executes and delivers to the Company a general release of claims.unrestricted.
Restricted Stock Grants
Under our 20092020 Omnibus Incentive Plan, we may grant nonqualified and incentivegranted restricted stock options and other stock-based awards to employees, and non-employee directors which are subject to vesting and consultants.forfeiture. During the fiscal year ended June 30, 2018, pursuant to our 2009 Omnibus Incentive Plan,2021, we granted each ofrestricted shares to Messrs. LeDoux, Wolf and FortinFortin. Vested shares of restricted common stock,from awards may be withheld by us to satisfy tax withholding obligations.
Deferred Cash Awards
Under our Non-qualified Incentive Plan, we made deferred cash awards to officers, directors, and employees which are subject to vesting and forfeiture. Vested shares may be withheld byDuring the Company to satisfy tax withholding obligations. In March 2018,fiscal year ended June 30, 2021, we granted Mr.deferred cash awards to Messrs. LeDoux, 25,000 shares of restricted common stock, which vest with respect to 8,334 shares on March 7, 2019, 8,333 shares on March 7, 2020,Wolf and 8,333 shares on March 7, 2021. In March 2018, we granted Mr. Wolf 20,000 shares of restricted common stock, which will vest with respect to 6,667 shares on March 7, 2019, 6,667 shares on March 7, 2020, and 6,666 shares on March 7, 2021. In March 2018, we granted Mr. Fortin 15,000 shares of restricted common stock, which will vest with respect to 5,000 shares on March 7, 2019, 2020 and 2021.Fortin.
OutstandingOutstanding Equity Awards at Fiscal Year End
The following table provides certain information about unexercised option awards, and unvested restricted stock held by Messrs. LeDoux, Wolf and Fortin as of June 30, 2018.2021. There were no other stock awards held by such officers as of June 30, 2018.2021.
OUTSTANDING EQUITY AWARDS AT FISCAL-YEAR END OF JUNE 30, 2018 | ||||||||||||||||||||||||||||||||||||
OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||||
Name | Number of | Number of | Equity | Option | Option | Number of | Market | Equity | Equity | |||||||||||||||||||||||||||
Mark A. LeDoux | 40,000 | — | — | 7.502 | 12/02/2020 | — | — | — | — | |||||||||||||||||||||||||||
| — | — | — | — | — | 49,999 | (1) | 507,490 | (4) | — | — | ||||||||||||||||||||||||||
Kenneth E. Wolf | 35,000 | — | — | 7.502 | 12/02/2020 | — | — | — | — | |||||||||||||||||||||||||||
| — | — | — | — | — | 69,999 | (2) | 710,490 | (4) | — | — | ||||||||||||||||||||||||||
Michael E. Fortin | 5,000 | 7,502 | 12/02/2020 | |||||||||||||||||||||||||||||||||
| 45,000 | (3) | 456,750 | (4) | |||||||||||||||||||||||||||||||||
OUTSTANDING EQUITY AWARDS AT FISCAL-YEAR END OF JUNE 30, 2021 | ||||||||||||||||||||||||||||||||||
OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||
Name | Number of | Number of | Equity | Option | Option | Number of | Market | Equity | Equity | |||||||||||||||||||||||||
Mark A. LeDoux | — | — | — | — | — | 19,333 | (1) | 325,374 | (4) | — | — | |||||||||||||||||||||||
Kenneth E. Wolf | — | — | — | — | — | 15,666 | (2) | 263,659 | (4) | — | — | |||||||||||||||||||||||
Michael E. Fortin | — | — | — | — | — | 11,500 | (3) | 193,545 | (4) | __ | __ | |||||||||||||||||||||||
(1) | These restricted shares of common stock are subject to vesting and forfeiture. |
(2) | These restricted shares of common stock are subject to vesting and forfeiture. |
| These restricted shares of common stock are subject to vesting and forfeiture. |
(4) | Calculated by multiplying the applicable number of shares by |
DIRECTOR COMPENSATION
Each of the non-employee directors (Messrs. Davis, Dunn Lane and Weldon) receivesRamanathan, and Ms. Matherly) receive an annual retention fee of $10,000, and a fee of $1,000 for each board and committee meeting such director attends. The $1,000 paid for each board and committee meeting a director attends applies to both regular and special meetings of the board and of a committee,each of the Board committees, including any regular or special meetings of the board or a committee held via teleconference, unless otherwise expressly determined by the Board on a case by case basis; provided, however, that payment for attendance at committee meetings in person or by telephone shall only be made to members of the applicable committee.basis. The annual retention fee is paid in advance at the beginning of each year of a director’s term, which is determined to commence on the date of the annual meeting held to elect any class of directors and to continue until the next annual meeting of stockholders held to elect any class of directors. Directors appointed during a term year may receive a proportional amount of the annual retention fee for that year. Options and other equity awards may be granted to directors on a discretionary basis. Mr. LeDoux receives no additional compensation for serving as a director. Directors are reimbursed for travel and other expenses incurred in connection with attending board and committee meetings. The CompanyWe may invite directors and their spouses to attend Company-related events and generally provides for, or reimburses expenses of, such directors’ and spouses’ travel, food and lodging for attendance at such events. The table below provides information about the compensation of the Company’sour currently sitting non-employee directors during the fiscal year ended June 30, 2018.2021.
DIRECTOR COMPENSATION TABLE FOR FISCAL-YEAR ENDED JUNE 30, 2018 | |||||||||||||||||||
Name | Fees Earned |
|
| Stock Awards ($)(1)(2) |
|
| Option |
|
| All Other |
|
| Total | ||||||
Joe E. Davis |
| $22,000 |
|
|
| $113,000 |
|
|
| 0 |
|
|
| 0 |
|
|
| $135,000 | |
Alan G. Dunn |
| $21,000 |
|
|
| $113,000 |
|
|
| 0 |
|
|
| 0 |
|
|
| $134,000 | |
Alan J. Lane |
| $20,000 |
|
|
| $113,000 |
|
|
| 0 |
|
|
| 0 |
|
|
| $133,000 | |
Lee G. Weldon |
|
| $18,000 |
|
|
| $113,000 |
|
|
| 0 |
|
|
| 0 |
|
|
| $131,000 |
DIRECTOR COMPENSATION TABLE FOR FISCAL-YEAR ENDED JUNE 30, 2021 | ||||||||||||||||||||
Name | Fees Earned | Stock Awards ($)(1) | Deferred Cash | All Other | Total | |||||||||||||||
Alan G. Dunn | 22,000 | 67,240 | 126,000 | — | 215,240 | |||||||||||||||
Laura Kay Matherly | 17,000 | 67,240 | 126,000 | — | 210,240 | |||||||||||||||
Guru Ramanathan(3) | — | — | — | — | — | |||||||||||||||
(1) | During the fiscal-year ended June 30, |
(2) |
|
(3) | Dr. Ramanathan was appointed to the Board on September 17, 2021 and did not receive any compensation for the |
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table summarizes equity compensation plans approved by stockholders as of June 30, 2018.2021. As of June 30, 2018, the Company did not have any2021, we had one equity compensation plans that had not beenplan, the 2020 Omnibus Incentive Plan approved by stockholders.stockholders at the annual stockholder meeting held December 4, 2020 (the “2020 Plan”).
EQUITY COMPENSATION PLAN INFORMATION | ||||||||||||||||||||||
Plan Category | Number of shares | Weighted- | Number of | Weighted-average | Number of shares remaining | |||||||||||||||||
Equity compensation plans approved by stockholders | 135,000 | (1) | $ | 6.32 | 356,989 | N/A | 319,000 | (1) | ||||||||||||||
Equity compensation plans not approved by stockholders | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||
Total | 135,000 | $ | 6.32 | 356,989 | N/A | 319,000 | ||||||||||||||||
Plan Category | Numberofshares to be issued upon exercise of outstandingoptions (a) | Weighted- averageexercise price of outstanding options (b) | Numberofsharesremaining available for future issuance underequitycompensationplans (excluding shares reflected in columns (a)) | ||||||||
Equity compensation plans approved by stockholders | (1) | $ | N/A | 608,227 | (1) | ||||||
Equity compensation plans not approved by stockholders | N/A | N/A | N/A | ||||||||
Total | $ | N/A | 608,227 | ||||||||
(1) |
|
CODE OF ETHICS
We have adopted a Code of Business Behavior and Conduct that applies to all of our employees and directors, including all of our officers and our non-employee directors. The Audit Committee periodically reviews the policy and the Company’sour compliance with the policy. A copy of our Code of Business Behavior and Conduct is posted on our website at www.nai-online.com. Our Code of Business Behavior and Conduct is not incorporated in, and is not a part of, this proxy statement and is not proxy-soliciting material.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and any person who owns more than 10% of our common stock, to file with the SEC initial reports of ownership of our common stock within 10 days of becoming a director, executive officer or greater than 10% stockholder, and reports of changes in ownership of our common stock before the end of the second business day following the day on which a transaction resulting in a change of ownership occurs. Directors, executive officers and greater than 10% stockholders are required by SEC regulations to provide us with copies of all Section 16(a) forms they file.
To our knowledge, based solely on our review of the copies of Section 16(a) reports provided to us during the fiscal year ended June 30, 2018,2021, all required Section 16(a) reports applicable to our directors, and executive officers were timely filed.
CERTAIN RELATIONSHIPSRELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to the Audit Committee’s charter, the Audit Committee conducts a review of all related party transactions for potential conflict of interest situations on an ongoing basis. The Company may not enter into a related party transaction unless the transaction is approved by the Audit Committee. A transaction is considered a “related party transaction” if the transaction would be required to be disclosed herein pursuant to Item 404 of Regulation S-K. There have been no materialNo related party transactions since July 1, 2013, nor are any currently anticipated or proposed.
Audit Committee ReportAUDIT COMMITTEE REPORT
The Audit Committee reviewed and discussed the Company’s audited financial statements for the fiscal year ended June 30, 20182021 with the Company’s management, and discussed with Haskell & White LLP, the Company’s independent registered public accounting firm, the matters required to be discussed by the Public Company Accounting Oversight Board Auditing Standard No. 1301, “Communications with Audit Committees”. The Audit Committee received the written disclosures from Haskell & White LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding independent accountant communications with audit committees concerning independence and discussed with Haskell & White LLP its independence. Based on the Audit Committee’s above described review and discussions, on September 17, 2021 the Audit Committee recommended to the Board of Directors that the audited financial statements for the fiscal year ended June 30, 2018,2021, be included in the Company’s Annual Report on Form 10-K for such fiscal year for filing with the SEC.
Members of the Audit Committee
Joe E. Davis, Chairman
Alan G. Dunn
Alan J. Lane
| Members of the Audit Committee | |
| Alan G. Dunn, Chair | |
| Alan J. Lane | |
| Laura Kay Matherly |
The Audit Committee Report above is not considered proxy-soliciting material, is not deemed to be filed with the SEC or subject to Regulation 14A or the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing with the SEC, except to the extent we specifically incorporate this information by reference.
ANNUAL REPORT
Our Annual Report on Form 10-K for the fiscal year ended June 30, 20182021 (“20182021 Annual Report”), as filed with the SEC, excluding exhibits, is being mailed to stockholders with this proxy statement. We will furnish any exhibit to our 20182021 Annual Report free of charge to any stockholder upon written request to the Secretary of the Company at 1535 Faraday Avenue, Carlsbad, California 92008. The 20182021 Annual Report is not incorporated in, and is not a part of, this proxy statement and is not proxy-soliciting material. We encourage you to review the 20182021 Annual Report, and any later information that we file with the SEC and other publicly available information.
STOCKHOLDER PROPOSALS
Stockholders who wish to submit a proposal for inclusion in our proxy materials to be distributed in connection with next year’s annual meeting must submit their proposal so that we receive it no later than the close of business on August 12, 2019.10, 2022. Any such proposal must be in accordance with the requirements of Rule 14a-8 under the Securities Exchange Act of 1934, as amended. Pursuant to such rule, simply submitting a proposal does not guarantee that it will be included in our proxy materials.
In accordance with our Restated Certificate of Incorporation, to be properly brought before an annual meeting, a stockholder must deliver timely notice of any matter the stockholder wishes to present. To be timely, we must receive the notice at least 60 days before the original scheduled meeting date. However, if we provide less than 70 days’ notice or prior public disclosure of the meeting date, to be timely we must receive the notice before the close of business on the 10th day following the earlier of the day on which we mailed notice of the meeting date or the day on which we publicly disclosed the meeting date. To be in proper form, the notice must be in writing and include the specified information set forth in Article Fifteenth of our Restated Certificate of Incorporation.
All proposals and notices should be sent by certified mail, return receipt requested, to Natural Alternatives International, Inc., 1535 Faraday Avenue, Carlsbad, California 92008, Attn: Mr. Kenneth Wolf, Secretary. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal or matter that does not comply with these and other applicable requirements.
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement and annual report addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.
Brokers with account holders who are the Company’sour Stockholders may be “householding” the Company’sour proxy materials. A single Proxy Statement may be delivered to multiple Stockholders sharing an address unless contrary instructions have been received from the affected Stockholders. If you have received notice from your broker that it will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate Proxy Statement and annual report, please notify your broker. If you currently receive multiple copies of the Proxy Statement and annual report at your addresses and would like to request “householding” of your communications, you should contact your broker.
Please note that only one Proxy Statement and annual report may be delivered to two or more Stockholders who share an address, unless the Company has received instructions to the contrary. To request a separate copy of this Proxy Statement and annual report or for instructions as to how to request a separate copy of this document and annual report or as to how to request a single copy if multiple copies of this document and annual report are received, Stockholders should contact the Company at the address and phone number set forth below.
Requests should be directed to the Company at 1535 Faraday Avenue, Carlsbad, California 92008. Copies of these documents may also be accessed electronically by means of the SEC’s home page on the Internet at http://www.sec.gov.
OTHER MATTERS
The Board of Directors does not know of any other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting or any adjournment thereof, the proxy holders named in the accompanying proxy card will have discretionary authority to vote all proxies in accordance with their best judgment with respect to any such matters.
By Order of the Board of Directors
Carlsbad, California
October 24, 2018
| By Order of the Board of Directors | |
| Carlsbad, California | |
| October 28, 2021 |
