400 West Ontario Street, Suite 1003, Chicago, IL, 60654
Telephone: (312)505-9267 or Fax: (708)344-5658
Website: www.oakridgeholdingsinc.com
October 28, 2013
ROBERT C. HARVEY
CHAIRMAN OF THE BOARD
AND
CHIEF EXECUTIVE OFFICER
Dear Shareholder:
You are cordially invited to join us for our Annual Meeting of Shareholders to
be held on Monday, December 16, 2013, at 9:00 a.m., local time, at the law firm
of Faegre Baker Daniels LLP, 2200 Wells Fargo Center, 90 South Seventh Street,
Minneapolis, Minnesota 55402. The Notice of Annual Meeting and the Proxy
Statement which follow describe the matters to come before the meeting.
Your vote is important. Whether you own a few or many shares of stock, it is
important that your shares be represented. If you cannot personally attend, we
encourage you to make certain that you are represented at the meeting by voting
and signing the accompanying proxy card and promptly returning it in the
enclosed envelope.
/s/ RC Harvey
Robert C. Harvey
Chairman of the Board and Chief Executive Officer
OAKRIDGE HOLDINGS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 16, 2013
TO THE SHAREHOLDERS OF COMMON STOCK
OF OAKRIDGE HOLDINGS, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Oakridge
Holdings, Inc. (the "Company"), will be held on Monday, December 16, 2013, at
9:00 a.m., local time, at the law firm of Faegre Baker Daniels LLP, 2200 Wells
Fargo Center, 90 South Seventh Street, Minneapolis, Minnesota 55402. The
purposes of the Annual Meeting are:
1. To elect five persons to serve as directors of the Company until the next
Annual Meeting of the Shareholders or until their respective successors shall be
elected and qualified.
2. To ratify the appointment of BDO USA, LLC as the independent auditors of the
Company for the fiscal year ending June 30, 2014,
3. To vote on an advisory basis on the frequency of future advisory votes on
the compensation of the Company's named executive officers,
4. To vote on an advisory basis on the compensation of the named executive
officers as disclosed in the accompanying Proxy Statement, and
5. To transact such other business as may properly come before the Annual
Meeting and at any adjournments or postponements of the Annual Meeting.
The Board of Directors set October 28, 2013, as the record date for the Annual
Meeting. This means that shareholders of the Company's common stock, par value
$0.10 per share, at the close of business on that date are entitled to
(1) receive notice of the Annual Meeting and (2) vote at the Annual Meeting and
any adjournments or postponements of the Annual Meeting. We will make available
a list of shareholders of the Company entitled to vote at the Annual Meeting
for inspection during normal business hours from October 28, 2013 through
December 1, 2013, at the offices of Oakridge Cemetery, 4301 West Roosevelt
Road, Hillside, Illinois 60610. This list will also be available at the Annual
Meeting.
By Order of the Board of Directors
/s/ Robert B. Gregor
Robert B. Gregor
Secretary
Chicago, Illinois
October 28, 2013
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE URGED TO MARK,
SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE
POSTAGE-PAID ENVELOPE ENCLOSED FOR THE PURPOSE. IF A SHAREHOLDER DECIDES TO
ATTEND THE MEETING, HE OR SHE MAY REVOKE THE PROXY AND VOTE THE SHARES IN
PERSON.
OAKRIDGE HOLDINGS, INC.
400 West Ontario St.
Suite 1003
Chicago, IL 60654
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 16, 2013
The Board of Directors (the "Board") of Oakridge Holdings, Inc. (the "Company")
furnishes you with this Proxy Statement to solicit proxies on its behalf to be
voted at the 2013 Annual Meeting of Shareholders of the Company (the "Annual
Meeting"). The meeting will be held on Monday, December 16, 2013 at 9:00 a.m.,
local time. The Annual Meeting will be held at the law firm of Faegre Baker
Daniels LLP, 2200 Wells Fargo Center, 90 South Seventh Street, Minneapolis,
Minnesota 55402. The proxies also may be voted at any adjournments or
postponements of the Annual Meeting.
A shareholder can revoke a proxy by any one of the following three actions:
giving written notice to the Secretary of the Company, delivering a later dated
proxy, or voting in person at the Annual Meeting. The mailing address of the
principal executive office of the Company is 4810 120th Street West, Apple
Valley, Minnesota, 55124. You also may obtain directions to attend the Annual
Meeting in person and vote in person by writing to the Company's principal
executive office requesting such directions and indicating the manner in
which the Company should send directions to you. The date this Proxy Statement
is first being mailed or given to shareholders is on or about October 28, 2013.
The Company will pay the cost of soliciting proxies in the accompanying form.
In addition to solicitation by the use of mails, certain directors, officers
and employees of the Company may solicit proxies by telephone, telegram,
electronic mail or personal contact, and have requested brokerage firms and
custodians, nominees and other record holders to forward soliciting materials
to the beneficial owners of stock of the Company. All properly executed
written proxies delivered pursuant to this solicitation (and not revoked later)
will be voted at the Annual Meeting in accordance with the directions given in
this Proxy Statement. Below is a list of the different votes shareholders may
cast at the Annual Meeting pursuant to this solicitation.
* In voting on the election of five directors to serve until the 2014
Annual Meeting of Shareholders, shareholders may vote in one of three ways:
(1) in favor of all nominees,
(2) withhold votes as to all nominees, or
(3) withhold votes as to specific nominees.
* In voting on the ratification of the appointment of BDO USA LLC as
independent auditors, shareholders may vote in one of the three following ways:
(1) in favor of the proposal,
(2) against the proposal, or
(3) abstain from voting on the proposal.
* In voting on an advisory basis on the frequency of future advisory votes
on the compensation of the Company's named executive officers, shareholders
may vote in one of the four following ways:
(1) in favor of every one year,
(2) in favor of every two years,
(3) in favor of every three years, or
(4) abstain from voting on the proposal.
* In voting on an advisory basis on the compensation of the named executive
officers, shareholders may vote in one of the three following ways:
(1) in favor of the proposal,
(2) against the proposal, or
(3) abstain from voting on the proposal.
Shareholders should specify their choice on each matter on the enclosed proxy.
If no instructions are given, proxies which are signed and returned will be
voted FOR the election of all nominees, FOR the proposal to ratify the
appointment of BDO USA, LLP, FOR THREE YEARS for the advisory vote on the
frequency of future advisory votes on compensation of the named executive
officers, and FOR the advisory vote on the compensation of the named
executive officers.
The election of directors will require approval by a plurality of the voting
power of the shares of the Company's common stock, par value $0.10 per share
(the "Common Stock"), voting in person or by proxy at the Annual Meeting.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock present in person or represented by proxy at the Annual
Meeting and entitled to vote is required to ratify the appointment of
BDO USA, LLP. If the advisory vote on the compensation of the Company's named
executive officers included in this Proxy Statement (the "say-on-pay" vote)
receives more votes "for" than "against," then it will be deemed to be
approved. The frequency of the advisory vote on future say-on-pay votes
receiving the highest number of votes (one, two or three years) by
shareholders will be considered the frequency recommended by shareholders.
For purposes of determining whether the shareholders have ratified the
appointment of BDO USA, LLP, abstentions are treated as shares present or
represented and voting and have the same effect as negative votes.
Abstentions will have no effect on the say-on-pay vote or the advisory vote
on future say-on-pay votes. Broker non-votes are counted toward a quorum,
but are not counted for any purpose in determining whether a matter has been
approved.
Only holders of Common Stock of record at the close of business on
October 28, 2013 are entitled to vote at the Annual Meeting, or at any
adjournments or postponements of the Annual Meeting. Each owner of record on
the record date is entitled to one vote for each share of Common Stock held.
On the record date, 1,431,503 shares of the Common Stock were issued and
outstanding. The presence at the Annual Meeting, in person or by proxy, of
the holders of 20% of the outstanding shares of Common Stock entitled to vote
at the Annual Meeting is required for a quorum for the transaction of business.
Holders of shares of Common Stock are not entitled to cumulative voting rights.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
PROPOSALS AND THE ELECTION OF THE NOMINEES FOR DIRECTOR LISTED IN THIS PROXY
STATEMENT.
This Proxy Statement is available on www.oakridgeholdingsinc.com, and by
e-mailing rHarvey@ohicemetery.com or calling 312-505-9267 to request a copy
of the proxy statement, annual report and form of proxy relating to the
Company's future annual meetings of shareholders and for the 2013 Annual
Meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Board of Directors:
The By-laws of the Company provide that the Board will determine the number
of directors. The Board has set its size at five. The Board has nominated the
five individuals below to stand for election as directors of the Company at the
Annual Meeting. Should any of these nominees become unable to serve for any
reason, or for good cause will not serve, which is not anticipated, the Board
may designate substitute nominees. If that occurs, the persons named in the
enclosed proxy card will vote proxies that would otherwise be voted for all
named nominees for the election of the substitute nominee or nominees.
All nominees, except for Robert Harvey and Robert Gregor, are "independent" as
that term is defined in Rule 5605(a) of the Nasdaq Stock Market Marketplace
Rules. That is the standard for independence the Company has chosen for
purposes of the disclosure required in this Proxy Statement by Securities and
Exchange Commission ("SEC") rules (even though the Company's Common Stock is
not listed on the Nasdaq Stock Market).
THE BOARD OF THE COMPANY RECOMMENDS A VOTE FOR ROBERT HARVEY, ROBERT GREGOR,
STEWART LEVIN, PAMELA WHITNEY AND LESTER LIND TO HOLD OFFICE UNTIL THE 2014
ANNUAL MEETING OF SHAREHOLDERS. PROXIES RECEIVED BY THE BOARD WILL BE VOTED
FOR AS TO ALL OF THE NOMINEES, UNLESS SHAREHOLDERS SPECIFY A CONTRARY CHOICE
IN THEIR PROXY.
Information about Nominees
The following information has been furnished to the Company, as of
October 28, 2013, by the persons who have been nominated by the Board to
serve as directors for the ensuing year.
Nominees for Election Age Principal Occupation Director Since
------------------------------------------------------------------
Robert C. Harvey 62 Chairman of the Board, 1992
Chief Executive Officer
and Chief Financial Officer
of the Company and its
wholly owned subsidiaries
Robert B. Gregor 62 Secretary of the Company 1993
and Vice President of Sales
and Marketing of the Company's
wholly owned subsidiary
Lester Lind 65 Retired Business Owner of 2011
VonHanson's Meats
Pamela Whitney 61 Auditor for Wells Fargo 2003
Audit & Security
Stewart Levin 58 Broker at Hallberg 2011
Commercial Insurers, Inc.
Other Information about Nominees
Except as indicated below, there has been no change in the principal occupation
or employment of the nominees during the past five years.
Robert Harvey has been the Chairman of the Board, Chief Executive Officer and
Chief Financial Officer of the Company and Stinar HG, Inc. since November 1992,
and a director, President and Chief Financial Officer of Oakridge Cemeteries
since November 2005.
Robert Gregor has been Vice President of Marketing and Sales and Secretary for
Stinar HG, Inc. since January 1, 1999, and prior to joining Stinar HG, Inc. he
was Senior Account Executive at E.F. Johnson Company since 1993.
Robert Lester Lind is presently retired. Prior to retiring in 2010, he was a
shareholder of VonHanson's Meats and has more than 40 years experience in
planning, developing and implementing openings of new operations across the
United States.
Pamela Whitney is presently an auditor for Wells Fargo Audit and Security and
has been in that position since November 11, 2005. Prior to joining Well Fargo
Audit and Security she was employed at the CPA firm of Epstein Weber &
Conover, PLC and before that was an Inventory Exchange Supervisor at
Phillips 66 from 2000 to 2005, and was at the CPA firm of Kilpatrick,
Luster & Co., PLLC.
Stewart Levin has been an insurance broker at Hallberg Commercial Insurers,
Inc. for 8 years and has been in the insurance business for over 25 years as
an owner and a commercial broker.
Board's Leadership Structure
The Company does not have a written policy with respect to separation of the
roles of chief executive officer and chairman of the Board, because the Board
believes it is in the best interests of our company to make that determination
based on the circumstances. Our Chief Executive Officer currently serves as
the Chairman of the Board of Directors because we believe that it is in the
best interest of the Company to have one person serving in both roles. There
is no lead independent director.
Information about the Board and its Committees
The business and affairs of the Company are managed by the Board, which met
four times in fiscal year ended June 30, 2013. All of the directors attended
all meetings of the Board, with the following exceptions: Robert Gregor
(missed one meeting), Lester Lind (missed three meetings) and Pamela Whitney
(missed one meeting). Pamela Whitney, Lester Lind and Stewart Levin attended
by telephone all meetings of the committees on which they served. The Board
has established three committees: the Compensation Committee, the Corporate
Governance Committee and the Audit Committee, each of which is briefly
described below. The Board has no other committees.
The Company does not have a formal policy regarding attendance by members of
the Board at the Company's annual meetings of shareholders. The Company has
always encouraged its directors to attend its annual meeting of shareholders.
All of the Company's directors except Pamela Whitney, Robert Gregor and
Lester Lind attended the Company's 2012 annual meeting of shareholders.
Compensation Committee
The Compensation Committee reviews and approves the Company's compensation
philosophy and programs covering executive officers and key management
employees. The Compensation Committee also determines compensation of
officers and senior employees of the Company (other than the Chief Executive
Officer) and makes recommendations to the Board concerning the compensation
of the Chief Executive Officer of the Company. The Compensation Committee
also determines any grants of stock or stock options. The Compensation
Committee does not have a charter. The Compensation Committee met once during
fiscal year 2013. The Compensation Committee currently consists of Lester
Lind, Stewart Levin and Pamela Whitney.
Corporate Governance Committee
The Corporate Governance Committee addresses matters of corporate governance,
evaluates qualifications and candidates for positions on the Board and the
performance of the Chief Executive Officer and the Board, and reviews
succession plans and senior management performance. The Corporate Governance
Committee met once in fiscal year 2013. The Corporate Governance Committee
currently consists of Lester Lind, Stewart Levin and Pamela Whitney. The
Corporate Governance Committee does not have a charter. The Corporate
Governance Committee does not have a policy with regard to the consideration
of director candidates recommended by shareholders because the size and
profile of the Company make it preferable for identification and evaluation
of potential candidates to occur on a case-by-case basis.
Audit Committee
The Audit Committee meets with management to review the scope and results of
audits performed by the Company's independent accountants. The Audit
Committee also meets with the independent auditors and with appropriate
Company financial personnel about internal controls and financial reporting.
The Audit Committee is the agent of the Board in assuring the adequacy of the
Company's financial, accounting and reporting control processes. The Audit
Committee is also responsible for recommending to the Board the appointment of
the Company's independent accountants. The Audit Committee met four times in
fiscal year 2013. The Audit Committee currently consists of Lester Lind,
Stewart Levin and Pamela Whitney. The Company's Board historically has
followed the advice of the Audit Committee on transactions that could have
the potential appearance of not being at arm's length and anticipates doing
so in the future. The Audit Committee has determined that Pamela Whitney is
an "audit committee financial expert" and is "independent" as defined by SEC
rules.
Securityholder Communications
The Board provides a process for shareholders to send communications to the
Board or any of the directors. Shareholders may send written communications
to the Board or specified individual directors by addressing their
communication, via U.S. mail, to: Chief Executive Officer,
Oakridge Holdings, Inc., 400 West Ontario Street, Suite 1003, Chicago,
Illinois 60654. The communications will be collected by the Chief Executive
Officer and delivered, in the form received, to the Board or, if so
addressed, to a specified director.
Director Compensation
The table below sets forth the compensation paid to each non-employee
director of the Company during fiscal year 2013. The Company's directors who
are employees do not receive separate compensation for serving as directors.
Each of the Company's directors is reimbursed for all out-of-pocket expenses
incurred on behalf of the Company in connection with serving on the Board.
Name Fees earned or
paid in cash($) Total($)
Lester Lind 2,000 2,000
Pamela Whitney 2,000 2,000
Stewart Levin 2,000 2,000
Certain Relationships and Related Transactions
In the ordinary course of business, the Company may from time to time engage
in transactions with other corporations whose officers, directors or employees
are also directors or officers, or family members of directors or officers,
of the Company. The Company may also engage in transactions with individuals
who are, or are family members of, directors or officers of the Company. The
Company has an unwritten policy under which the Audit Committee reviews these
transactions to examine whether the transactions are conducted on an arm's
length basis. The Audit Committee makes a recommendation to the Board whether
to approve the proposed transaction, which the Board has historically always
followed. In all cases, these related-party transactions have been conducted
on an arm's length basis, and none of the transactions require more specific
disclosure under applicable SEC rules and regulations, except as described
below.
During fiscal years 2012 and 2013, amounts expensed for non-audit compliance
services to entities related to the Company's Chief Executive Officer, Robert
Harvey, were $17,150 and $13,327, respectively. The Company also has a
month-to-month operating lease for office space from the Chief Executive
Officer and the total rent expense was $24,600 and $36,000 under this lease
in fiscal years 2012 and 2013.
On June 16, 2009, the Company entered into unwritten loan agreements with our
Chief Executive Officer and Robert Gregor, the Company's Secretary and Vice
President of Sales and Marketing. The aggregate principal amount of each loan,
which is the largest amount of principal outstanding since the date of the
loan and the principal amount outstanding as of October 28, 2013, is as
follows: (1) due to Robert Harvey, $150,000 and (2) due to Robert Gregor,
$150,000. No principal was paid on any loan described in this paragraph
during fiscal year 2013. Each of the loans described in this paragraph bears
interest at the rate of 9.00% per annum, is unsecured and is payable on demand.
During the fiscal year ended June 30, 2013, interest of $2,021 was paid to
Robert Harvey and $5,326 was paid to Robert Gregor.
On May 10, 2008, the Company agreed to issue $505,000 aggregate principal
amount of 9.00% Convertible Subordinated Debentures to the following people
for cash contributed by those people to the Company: (1) Robert Harvey, the
Company's Chairman of the Board, Chief Executive Officer and Chief Financial
Officer and a director, and (2) Robert Gregor, the Company's Secretary, the
Vice President of Sales and Marketing of one of the Company's wholly-owned
subsidiaries and a director. The aggregate principal amount of each debenture,
which is the largest amount of principal outstanding since July 1, 2012 and the
principal amount outstanding as of October 28, 2013, is as follows: (1) for
Robert Harvey, $410,000 and (2) for Robert Gregor, $150,000. No principal was
paid on the debentures during fiscal years 2013 and 2012. During the fiscal
year ended June 30, 2013, interest of $36,900 was paid to Robert Harvey and
$-0- was paid to Robert Gregor. Each debenture accrues interest at the rate of
9.00% per annum, payable on January 1 of each year until the principal amount
of the debenture has been paid in full or converted into the Company's Common
Stock.
The principal amount of the debentures is convertible into the Company's
Common Stock from the date of issuance until the principal amount is paid in
full at a rate of one share of Common Stock for each $0.40 principal amount,
subject to typical anti-dilution adjustments. The conversion price of the
debentures is equal to the fair market value of the Company's Common Stock as
determined by the Board as of the date of issuance.
The debentures mature on July 1, 2014, subject to acceleration in the event of
certain mergers or acquisitions involving the Company, a disposition of
substantially all of the Company's assets or upon the election of a debenture
holder after an event of default. The Company may not prepay the debentures in
whole or in part prior to maturity. The debentures are subordinate to all of
the Company's indebtedness for borrowed money and liabilities for the deferred
and unpaid purchase price of property existing on the date of issuance of the
debentures.
Principal Shareholders and Beneficial Ownership of Management
The following table sets forth information regarding beneficial ownership of
Common Stock on October 28, 2013 by each person who is a beneficial owner of
more than 5% of the Common Stock, issued and outstanding, by each Named
Executive Officer named in the Summary Compensation Table, by each director and
nominee and all officers and directors as a group. The address for all executive
officers and directors of the Company is the Company's business address.
Number of shares
Name beneficially owned(1) Percent of Class
-----------------------------------------------------------------
Robert C. Harvey* 1,337,279(2) 54.4%
Robert B. Gregor* 522,164(3) 26.7%
Lester Lind - -
Pamela Whitney - -
Stewart Levin - -
All directors, executive
officers and director
nominees as a group
(5 persons) 1,859,443(2,3) 62.4%
* Indicates directors and executive officers.
(1) Unless otherwise noted, all shares shown are held by persons possessing sole
voting and investment power with respect to such shares. Shares not outstanding
but deemed beneficially owned by virtue of the right of a person or member or a
group to acquire them within 60 days are treated as outstanding only when
determining the amount and percent owned by such person or group.
(2) Includes 66,857 shares held by Robert Harvey's wife and children in which he
may be deemed to share voting and investment power, but as to which he
disclaims beneficial ownership. Also includes 245,422 shares held jointly by
Robert Harvey and his wife and 1,025,000 shares that could be acquired upon
conversion of a convertible subordinated debenture.
(3) Includes 2,350 shares held by Mr. Gregor's wife and children in which he
may be deemed to share voting and investment power, but as to which he
disclaims beneficial ownership. Also includes 144,814 shares held jointly by
Robert Gregor and his wife and 375,000 shares that could be acquired upon
exercise of an option and conversion of a convertible subordinated debenture.
Executive Compensation
The following table sets forth certain information regarding compensation for
the Company's two most recently completed fiscal years provided to the
Company's Chief Executive Officer and Chief Financial Officer and its only
other executive officer who earned remuneration exceeding $100,000 during
fiscal year 2013 (the "Named Executive Officers").
Name and All Other
Principal Position Year Salary($) Compensation($) Total($)
---------------------------------------------------------------------
Robert C. Harvey 2013 $198,400 $13,600 $212,000
Chairman of the Board, 2012 $198,400 $7,200 $205,600
Chief Executive Officer
and Chief Financial
Officer
Robert B. Gregor 2013 $114,800 $206 $115,006
Secretary and Vice 2012 $114,800 $206 $115,006
President of Marketing
and Sales of Stinar
Corporation
The Company has not entered into employment agreements with any of the
Named Executive Officers. The amounts listed in the table above under "All
Other Compensation" represent life insurance premium payments made by the
Company for Robert Gregor and Robert Harvey.
The Company did not make any grants of restricted stock, stock options or
other equity-based compensation to the Named Executive Officers during
fiscal year 2013. The Company does not currently have any equity
compensation plans.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and all persons who
beneficially own more than 10% of the outstanding shares of the Company's
Common Stock to file with the SEC initial reports of ownership and reports of
changes in ownership of the Company's Common Stock. Executive officers,
directors and greater than 10% beneficial owners are also required to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge based solely on its review of the forms furnished to
the Company and written representations from certain reporting persons, the
Company believes that all Section 16(a) filing requirements applicable to its
executive officers, directors and persons who own more than 10% of the
Company's Common Stock were complied with in fiscal year 2013.
PROPOSAL NO. 2 -- RELATIONSHIP WITH AND APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee has selected BDO USA, LLP, independent auditors, to audit
the financial statements of the Company for the year ending June 30, 2014 and
recommends that the shareholders vote for confirmation of such selection.
Confirmation will require the affirmative vote by holders of a majority of
shares present in person or represented by proxy and entitled to vote on the
matter.
Representatives of BDO USA, LLP are expected to be present at the Annual
Meeting with an opportunity to make a statement if they desire to do so, and
are expected to be available to respond to appropriate questions.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF BDO USA, LLP AS THE COMPANY'S AUDITORS FOR THE FISCAL YEAR
ENDING JUNE 30, 2014.
Audit Committee Report
The Audit Committee of the Board consists of three members, Lester Lind,
Stewart Levin and Pamela Whitney, all of whom are independent as that term is
defined in Rule 5605(a) of the Nasdaq Stock Market Marketplace Rules.
The Audit Committee oversees and monitors the integrity of the Company's
financial reporting process, its compliance with legal and regulatory
requirements and the quality of its internal and external audit processes. The
Board has adopted a written charter of the Audit Committee, which is attached
as Appendix A to this Proxy Statement.
Management has primary responsibility for the Company's financial statements
and the overall reporting process, including its system of internal controls.
The Company's independent auditors audit the annual consolidated financial
statements prepared by management and express an opinion on whether those
statements fairly present in all material respects the Company's financial
position, results of operations and cash flow under generally accepted
accounting principles. The Company's independent auditors report directly to
the Audit Committee.
In fulfilling its responsibilities for the review of the audited consolidated
financial statements for the year ended June 30, 2013, the Audit Committee:
* Reviewed and discussed the audited consolidated financial statements for the
year ended June 30, 2013 with management and BDO USA, LLP.
* Discussed with BDO USA, LLP the matters required to be discussed in Statement
of Auditing Standards No. 61 regarding communication with audit committees.
* Received written disclosure and the letter from BDO USA, LLP required by
applicable requirements of the Public Company Accounting Oversight Board
regarding the auditor's communications with the Audit Committee concerning
independence, and have discussed with the auditors the auditor's independence.
Based upon this review, the Audit Committee recommended to the full Board that
the audited consolidated financial statements be included in the Company's
Annual Report on Form 10-K for the year ended June 30, 2013 filed with the SEC.
THE AUDIT COMMITTEE
Lester Lind
Pamela Whitney
Stewart Levin
Audit Fees
Aggregate fees for professional services rendered for the Company by Moquist
Thorvilson Kaufmann LLC (formerly known as Moquist Thorvilson Kaufmann &
Pieper LLC), which combined with BDO USA, LLP on July 1, 2013, for the years
ended June 30, 2013, and 2012 were as follows:
Fiscal 2013 Fiscal 2012
----------- -----------
Audit Fees $59,782 $69,810
Audit-Related Fees - -
Tax Fees - -
All Other Fees - -
------- -------
Total $59,782 $69,810
======= =======
The Audit Fees for the years ended June 30, 2013 and 2012 were the amounts
billed for professional services in connection with the audits of the
consolidated financial statements of the Company and its quarterly (Form 10-Q)
and yearly filings (Form 10-K) with the SEC.
The Audit-Related Fees were for the report of the independent registered
public accounting firm.
The de minimis exception was not used for any fees paid to Moquist Thorvilson
Kaufmann LLC or BDO USA, LLP.
The Audit Committee has considered whether the provision of the above services
other than audit services was compatible with maintaining the independence of
BDO USA, LLP.
On July 1, 2013, the practice of Moquist Thorvilson Kauffmann LLC ("MTK"),
which was engaged as the independent registered public accounting firm of the
Company was combined with BDO USA, LLP and the professional staff and partners
of MTK joined BDO USA, LLP either as employees or partners of BDO USA, LLP. As
a result of this transaction, MTK resigned as the Company's independent
registered public accounting firm on August 5, 2013. On August 6, 2013,
following the resignation of MTK, the Company, through and with the approval
of its Audit Committee, appointed BDO USA, LLP as its independent registered
public accounting firm.
MTK's reports on the Company's consolidated financial statements for the years
ended June 30, 2012 and 2011 contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principles.
During the Company's two most recent fiscal years and the subsequent interim,
there were: (i) no "disagreements" (within the meaning of Item 304(a) of
Regulation S-K) with MTK on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of MTK, would have caused it
to make reference to the subject matter of the disagreements in its reports on
the consolidated financial statements of the Company; and (ii) except as noted
below, no "reportable events" (as such term is defined in Item 304(a)(1)(v) of
Regulation S-K).
In connection with its audit of the Company's financial statements for the
years ended June 30, 2012 and 2011, MTK reported the existence of material
weaknesses in the Company's internal control over financial reporting to the
Audit Committee of the Company. More specifically, the material weaknesses
relate to the following:
* Due to the limited number of Company personnel, a lack of segregation of
duties exists. An essential part of internal control is for certain procedures
to be properly segregated and the results of their performance be adequately
reviewed. This is normally accomplished by assigning duties so that no one
person handles a transaction from beginning to end and incompatible duties
between functions are not handled by the same person. Management plans to
explore implementing cost-effective measures to establish a more formal review
process in an effort to reduce the risk of fraud and financial misstatements.
* Due to weaknesses in the Company's financial reporting controls specifically
relating to inventory at the Aviation Ground Support Equipment segment,
management believes there is more than a remote likelihood that a material
misstatement of annual or interim financial statements would not be prevented
or detected. Management plans to explore implementing cost-effective measures
to improve its inventory reporting system in an effort to reduce the risk of a
material misstatement of the financial statements.
These material weaknesses have not been corrected.
The Company has provided MTK with a copy of the disclosure above relating to
MTK's registration and BDO USA, LLP's appointment as the Company's independent
registered public accounting firm, and MTK provided the Company a letter
addressed to the SEC stating that it agrees with the statements made above.
During the Company's two most recent fiscal years and the subsequent interim
period preceding BDO USA, LLP's engagement, neither the Company nor anyone on
its behalf consulted BDO USA, LLP regarding either: (i) the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company's
consolidated financial statements, and no written report or oral advice was
provided to the Company that BDO USA, LLP concluded was an important factor
considered by the Company in reaching a decision as to the accounting, auditing
or financial reporting issue; or (ii) any matter that was the subject of a
"disagreement" or "reportable event" (within the meaning of Item 304(a) of
Regulation S-K and Item 304(a)(1)(v) of Regulation S-K, respectively).
In approving the selection of BDO USA, LLP as the Company's independent
registered public accounting firm, the Audit Committee considered all relevant
factors, including that no non-audit services were previously provided by
BDO USA, LLP to the Company.
Preapproval Policies and Procedures
Rules adopted by the SEC in order to implement requirements of the
Sarbanes-Oxley Act of 2002 require public company audit committees to
pre-approve audit and non-audit services. All audit services and non-audit
services provided by the Company's independent auditors must be pre-approved
by the Audit Committee. The non-audit services specified in Section 10A(g) of
the Securities Exchange Act of 1934 may not be provided by the Company's
independent auditors.
In addition, the Audit Committee has adopted policies and procedures pursuant
to which audit, audit-related and tax services, and all permissible non-audit
services, are pre-approved by category of service. The policies require the
Audit Committee to be informed of each service, and the policies do not include
any delegation of the Audit Committee's responsibilities to management.
PROPOSAL NO. 3 - ADVISORY VOTE ON THE FREQUENCY OF FUTURE
ADVISORY VOTES ON EXECUTIVE COMPENSATION
The Company is seeking an advisory vote from shareholders as to the frequency
with which shareholders would have an opportunity to provide future advisory
votes on compensation of the Company's Named Executive Officers. The
shareholders may select a frequency of every one, two or three years, or
abstain from voting on this matter. The frequency recommended by shareholders
will not be binding on the Company or the Board of Directors.
PROPOSAL NO. 4 - ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Company is asking its shareholders to provide advisory approval of the
compensation of the Named Executive Officers included in this Proxy Statement,
as the Company has described it in the "Executive Compensation" section. This
vote is advisory and is not binding on the Company or the Compensation
Committee. Approval of the compensation of the Named Executive Officers
included in this Proxy Statement will be deemed to be provided if there are
more "For" than "Against" votes on this proposal. The Company is asking that
its shareholders to vote on the following resolution:
RESOLVED, that the compensation paid to the individuals identified in the
Summary Compensation Table, as disclosed in this Proxy Statement pursuant to
the compensation disclosure rules of the SEC, is hereby approved.
SHAREHOLDER PROPOSALS FOR 2014 ANNUAL MEETING
The proxy rules of the SEC permit shareholders, after timely notice to issuers,
to present proposals for shareholder action in issuer proxy statements where
such proposals are consistent with applicable law, pertain to matters
appropriate for shareholder action and are not properly omitted by issuer
action in accordance with the proxy rules. The Company's annual meeting for the
fiscal year ending June 30, 2014 is expected to be held on or about
December 16, 2014, and proxy materials in connection with that meeting are
expected to be mailed on or about November 1, 2014. Except as indicated below,
shareholder proposals prepared in accordance with the proxy rules must be
received by the Company by July 3, 2014 for inclusion in the proxy statement
for the Company's 2014 Annual Meeting. Any other shareholder proposal must have
been received by the Company at its principal executive office no later than
September 11, 2014 in order to be presented at the 2014 Annual Meeting of
shareholders.
OTHER MATTERS
The management of the Company knows of no matter other than the foregoing to be
brought before the Annual Meeting. However, if any other matters should
properly come before the Annual Meeting, the persons named in the enclosed
proxy card will have a discretionary authority to vote on the proposal.
MISCELLANEOUS
THE ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL STATEMENTS OF THE COMPANY
FOR THE YEAR ENDED JUNE 30, 2013, IS ENCLOSED HEREWITH. SHAREHOLDERS MAY
RECEIVE, WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K,
INCLUDING FINANCIAL STATEMENTS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, BY WRITING TO: CORPORATE SECRETARY, OAKRIDGE HOLDINGS, INC.,
400 WEST ONTARIO STREET, SUITE 1003, CHICAGO, ILLINOIS 60654.
By Order of the Board of Directors
/s/ Robert B. Gregor
Robert Gregor
Secretary
October 28, 2013
Appendix A
IT COMMITTEE STANDARDS
Purpose
The Committee will provide assistance to the Board in fulfilling its oversight
responsibility to the shareholders and others relating to the integrity of the
Company's financial statements and the financial reporting process, the
systems of internal accounting and financial controls, the annual independent
audit of the Company's financial statements, the Company's compliance with
legal and regulatory requirements, and its ethics programs as established by
management and the Board, including the Company's Code of Business Conduct.
The Committee shall also oversee the independent auditors' qualifications and
independence. The Committee will evaluate the performance of the Company's
internal controls and independent auditors, including a review and evaluation
of the engagement partner. In so doing, it is the responsibility of the
Committee to maintain free and open communication between the Committee,
independent auditors, the internal auditors and management of the Company.
Committee Membership
The Committee shall be appointed by the Board and shall comprise at least three
directors. Each Committee member shall meet the requirements of the Stock
Exchange listing standards, and federal laws and regulations, with respect to
audit committees, as they may become applicable from time to time, as well as
the requirements of the Company's Corporate Governance guidelines. No member
may serve on the audit committees of more than two public companies. Committee
members may receive no compensation from the Company other than director's
fees. All Committee members will be financially literate, and at least one
member of the Committee will have accounting or related financial management
expertise as determined by the Board. The Board will designate a Chairman for
the Committee.
Committee Authority and Responsibilities
The primary responsibility of the Committee is to oversee the Company's
financial controls and reporting processes on behalf of the Board and report
the results of its activities to the Board. Management is responsible for
preparing the Company's financial statements, and the independent auditors are
responsible for auditing those financial statements. The committee in carrying
out its responsibilities believes its policies and procedures should remain
flexible, in order to best react to changing conditions and circumstances.
The Committee should take the appropriate actions to set the overall corporate
"tone" for quality financial reporting, sound business risk practices, and
ethical behavior.
The following shall be the principal recurring processes of the Committee in
carrying out its oversight responsibilities. The Committee may perform such
other duties and responsibilities as are consistent with its purpose and as
the Board or the Committee deems appropriate.
1. Independent auditors.
The Committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately accountable
to the Board and the Committee, as representatives of the Company's
shareholders. The Committee shall have the sole authority and responsibility
to hire, evaluate and, where appropriate, replace the independent auditors and,
in its capacity as a committee of the Board, shall be directly responsible for
the appointment, compensation and oversight of the work of the independent
auditors. The Committee shall discuss the auditors' independence from
management and the Company, including whether the auditors' performance of
permissible non-audit services is compatible with their independence. This
process will include, at least annually, the Committee's review of the
independent auditors' internal control procedures, any material issues raised
by the most recent internal quality-control review, or peer review, of the
independent auditors, or by any inquiry or investigation by governmental or
professional authorities, within the preceding five years, respecting one or
more independent audits carried out by the independent auditors, and any steps
taken to deal with any such issues; and (to assess the auditors' independence)
all relationships between the independent auditors and the Company. Annually,
the Committee will review the qualifications and performance of the Company's
current independent auditors and select the Company's independent auditors for
the next year, subject to shareholder ratification.
2. Audit services.
The Committee shall discuss with the independent auditors the overall scope and
plans for their respective audits including their respective responsibilities.
The Committee shall approve in advance all audit engagement fees and the terms
of all audit services to be provided by the independent auditors.
3. Permissible non-audit services.
The Committee shall establish policies and procedures for the engagement of the
independent auditors to provide permissible non-audit services, which shall
include pre-approval of permissible non-audit services to be provided by the
independent auditors. The Committee shall approve in advance all permissible
non-audit services to be provided by the independent auditors.
4. Review of interim financial statements; earnings releases.
The Committee Chairman shall review the interim financial statements, and the
Company's disclosures under Management's Discussion and Analysis of Financial
Condition and Results of Operations, with management and the independent
auditors prior to the filing of the Company's Quarterly Report on Form 10-QSB.
The Committee will discuss the Company's policies and procedures with respect
to earnings releases, financial information and earnings guidance provided to
analysts and rating agencies. The Committee will discuss the results of the
quarterly review and any other matters required to be communicated to the
Committee by the independent auditors under generally accepted auditing
standards. The Chairman of the Committee may represent the entire Committee
for the purposes of this review.
5. Review of annual audited financial statements.
The Committee Chairman shall review with management and the independent
auditors the financial statements to be included in the Company's Annual Report
on Form 10-KSB, including (a) their judgment about the quality, not just
acceptability, of the Company's accounting principles, including significant
financial reporting issues and judgments made in connection with the
preparation of the financial statements; (b) the clarity of the disclosures in
the financial statements; and (c) the Company's disclosures under Management's
Discussion and Analysis of Financial Condition and Results of Operations,
including critical accounting policies.
The Chairman of the Committee will also review with management and the
independent auditors:
(a) major issues regarding accounting principles and financial statement
presentations, including significant changes in the selection or application
of accounting principles;
(b) major issues regarding the adequacy of internal controls and steps taken
in light of material deficiencies; and
(c) the effects of alternative accounting methods and regulatory and
accounting initiatives on the financial statements. The Chairman of the
Committee will discuss the results of the annual audit and any difficulties
the independent auditors encountered in the course of their audit work,
including any restrictions on the scope of the auditors' activities or on
access to requested information, and any significant disagreements with
management. The Chairman of the Committee will also discuss any other matters
required to be communicated to the Committee by the independent auditors under
generally accepted auditing standards, and the annual report on internal
controls by the Chief Executive Officer and Chief Financial Officer, as
received by the independent auditors.
Based on these reviews, the Committee will make a recommendation to the board
as to whether the audited financial statements should be included in the
Company's Annual Report on Form 10-KSB.
6. Internal controls; disclosure controls and procedures.
The Committee will review and discuss with management, and the independent
auditors the Company's internal controls. The Committee will review and discuss
the Company's disclosure controls and procedures, and the quarterly
assessments of such controls and procedures by the Chief Executive Officer and
Chief Financial Officer.
7. Complaint procedures.
The Committee will establish procedures for handling complaints regarding
accounting, internal accounting controls, and auditing matters, including
procedures for confidential, anonymous submission of concerns by employees
regarding accounting and auditing matters.
8. Compliance programs.
The Committee will review and discuss with management, the independent
auditors the adequacy and effectiveness of the Company's Code of Business
Conduct.
9. Report for inclusion in proxy statement.
The Committee shall prepare the report that SEC rules require to be included
in the Company's annual proxy statement.
10. Hiring of auditor personnel.
The Committee shall set clear hiring policies with regard to employees and
former employees of the independent auditors.
11. Charter.
The Committee shall periodically review and reassess the adequacy of this
Charter and recommend any proposed changes to the Board for approval.
12. Annual performance evaluation.
The Committee shall annually review its own performance.
13. Investigative authority.
In discharging its oversight role, the Committee is empowered to investigate
any matter brought to its attention with full access to all books, records,
facilities and personnel of the Company.
Outside Advisors
The Committee with the authority of the chairman of the board shall have the
authority to retain such outside counsel, accountants, experts and other
advisors as it deems appropriate to assist the Committee in the performance
of its functions.
Meetings
The Committee will meet as often as may be deemed necessary or appropriate
in its judgment, at least semi-annually each year, and at such times and
places as the Committee shall determine. The majority of the members of the
Committee shall constitute a quorum. The Committee will meet separately, at
least semi-annually, with the independent auditors, and management to
discuss any matters that they wish to bring to the Committee's attention.
The Committee shall report to the Board with respect to its meetings,
including any issues that arise with respect to the quality or integrity
of the Company's financial statements, the Company's compliance with legal
or regulatory requirements, the performance and independence of the Company's
independent auditors, or the performance of the internal audit function.