UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 17, 2013
ELECTRO-SENSORS, INC.
(Exact name of Registrant as Specified in its Charter)
| Minnesota | 000-09587 | 41-0943459 |
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
6111 Blue Circle Drive
Minnetonka, Minnesota 55343-9108
(Address of Principal Executive Offices)
(952) 930-0100
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On July 17, 2013, Bradley D. Slye resigned from his positions as President, Chief Executive Officer, and Chief Financial Officer of Electro-Sensors, Inc. (the “Company”), as well as from his position as a member of the Board of Directors (the “Board”) of the Company, effective as of July 23, 2013. Going forward, Mr. Slye intends to focus all his time and efforts with the Company on product development and technology integration and, to that end, will remain with the Company as its Product Development and Integration Manager. Mr. Slye’s resignation from the Board was not due to any disagreement with the Company and Mr. Slye was instrumental in the appointment of his successor.
Also on July 17, 2013, the Board appointed David L. Klenk as President, Chief Executive Officer and Chief Financial Officer of the Company, effective as of July 23, 2013. Mr. Klenk, age 48, is currently a member of the Board and serves on the Board’s Audit and Nominating Committees. As of the effective date of Mr. Klenk’s appointment as President, Chief Executive Officer and Chief Financial Officer Mr. Klenk will no longer serve on the Audit and Nominating Committees.
Mr. Klenk has extensive operations and finance experience. From 2006 to May 2013, Mr. Klenk served as President and as a director of Harland Medical Systems, Inc., a privately-held medical technology company serving specialty-coatings markets. Previously, from 1993 to 2005, Mr. Klenk held executive positions of increasing responsibility at August Technology Corporation (now Rudolph Technologies, Inc.), a publicly-traded company providing various process-related systems used by microelectronics device manufacturers. Mr. Klenk currently serves as a director of two privately-held companies. Mr. Klenk holds an MBA from the University of Arizona with dual concentrations in Entrepreneurship and Finance, and a BS in Business Administration from Northern Arizona University.
Mr. Klenk will receive a salary of $150,000 per year and will be eligible for a bonus to be determined by the Board and the Compensation Committee. Upon the effective date of Mr. Klenk’s employment as President, Chief Executive Officer and Chief Financial Officer of the Company, Mr. Klenk will receive an incentive stock option to purchase 50,000 shares of Company common stock at an exercise price of 100% of the fair market value of the Company common stock on such date. This option will be granted pursuant to the Company’s 2013 Equity Incentive Plan and will have a ten-year term. The option will vest immediately on the date of grant.
Mr. Klenk was not appointed pursuant to any arrangement or understanding with any person, and Mr. Klenk does not have any family relationships with any directors or executive officers of the Company. Neither Mr. Klenk nor any of his immediate family has been a party to any transaction with the Company during the Company's last two fiscal years, nor is any such transaction currently proposed, that would be reportable under Item 404(a) of Regulation S-K.
On July 23, 2013, the Company issued a press release announcing the appointment of Mr. Klenk as the Company’s President, Chief Executive Officer and Chief Financial Officer. A copy of the Company’s press release is attached as Exhibit 99.1 and is incorporated herein by reference.
On July 23, 2013, the Board appointed Scott Gabbard as a member of the Board, effective as of the resignation of Mr. Slye from his position as member of the Board. Mr. Gabbard was also appointed to serve as a member of the Board’s Audit, Compensation, and Nominating Committees, and Mr. Gabbard will serve as the Audit Committee financial expert. Mr. Gabbard will succeed Mr. Klenk on the Audit and Nominating Committees. Since April 2006, Mr. Gabbard has served as the Chief Financial Officer of Magenic Technologies, Inc., a privately-held software consulting organization. Previously, from February 2000 until November 2005, he was the Vice-President – Finance of August Technology Corporation (now Rudolph Technologies, Inc.). Mr. Gabbard holds a BA in Accounting and Finance from the University of Northern Iowa.
In connection with his appointment to the Board, Mr. Gabbard will be compensated pursuant to the Company's existing director compensation plan, which shall be provided on a prorated basis for the period beginning with his effective start date and ending with the Company's fiscal year end. Mr. Gabbard was not elected pursuant to any arrangement or understanding with any person. Neither Mr. Gabbard nor any of his immediate family has been a party to any transaction with the Company during the Company's last two fiscal years, nor is any such transaction currently proposed, that would be reportable under Item 404(a) of Regulation S-K.
| 2 |
| Item 8.01. | Other Events. |
On July 23, 2013, the Company issued a press release announcing the Board’s decision to temporarily suspend the Company’s quarterly dividend program. A copy of the Company’s press release announcing the decision is attached as Exhibit 99.1 and is incorporated herein by reference.
| Item 9.01. | Exhibits. | |
| . | ||
| (d) Exhibits | ||
| Exhibit No | Description | |
| 99.1 | Press Release, dated July 23, 2013. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| ELECTRO-SENSORS, INC. | ||
| Date: July 23, 2013 | By: | /s/ Bradley D. Slye |
| Bradley D. Slye Chief Executive Officer and Chief Financial Officer | ||
| 3 |
INDEX TO EXHIBITS FILED WITH THIS REPORT
| Exhibit No | Description | |
| 99.1 | Press Release, dated July 23, 2013. |
| 4 |
Exhibit 99.1
July 23, 2013
Electro-Sensors Adds to Management Team and Board of Directors, and Announces Temporary Suspension of Quarterly Dividend
| · | Appoints David L. Klenk as CEO |
| · | Adds Scott A. Gabbard to Board of Directors |
| · | Temporarily suspends Quarterly Dividend |
Minnetonka, Minnesota (July 23, 2013) – Electro-Sensors, Inc. (NASDAQ: ELSE), a leading global provider of machine monitoring sensors and hazard monitoring systems, today announced the appointment of David L. Klenk as CEO and CFO of the company. Mr. Klenk recently joined the Electro-Sensors board of directors and now replaces Bradley D. Slye in these roles. “I’m very eager to join the great team at Electro-Sensors at this exciting time in their history. Brad and the team have built a solid company that is known for its high quality and extremely reliable sensors and speed control devices,” said David Klenk. He continued, “Our goal now will be to create a strategy that builds upon this 40+ year history and positions Electro-Sensors for additional growth and success”. Brad Slye will remain with the company and lead its new product development and integration efforts. "On behalf of the company, its employees, board members and shareholders, I would like to thank Brad for his years of dedicated service as the Company's CEO and President" said board chair Joseph Marino. "We look forward to Brad's continued involvement as he focuses on his new role."
Mr. Klenk has over 20 years of experience leading technology companies, most recently as director and president of Harland Medical Systems, Inc., a supplier of specialty coating materials and automation equipment for the medical device industry. Previously, he held executive positions of increasing responsibility, including director, president and COO, at August Technology Corporation (now Rudolph Technologies, Inc.), a publicly-traded company providing process-related inspection systems and software for the microelectronics industry. Mr. Klenk currently serves on the boards of Electro-Sensors and two privately-held companies. He holds an MBA from the University of Arizona and a BS in Business Administration from Northern Arizona University.
In addition, the company has announced the appointment of Scott A. Gabbard to the Electro-Sensors board of directors. Mr. Gabbard is currently CFO of Magenic Technologies, Inc., a custom software development organization with locations throughout the United States and the Philippines, where he has helped guide the company through aggressive growth and expansion. Previously, he was VP of Finance for August Technology Corporation, where he was instrumental in the company’s growth and eventual merger with Rudolph Technologies. Prior to August Technology, Mr. Gabbard served in various roles at U.S. Office Products, a publicly traded multi-billion dollar global office products and services company. Mr. Gabbard brings extensive experience in all facets of finance, accounting, M&A, tax, information technology and risk management. Mr. Gabbard holds a BA in Accounting and Finance from the University of Northern Iowa. Mr. Gabbard will serve on the company’s Audit Committee as its “audit committee financial expert” and on the company’s compensation and nominating committees.
Along with these leadership changes, the board of directors has also announced that they have temporarily suspended the Electro-Sensors quarterly dividend. The board is acutely focused on maximizing shareholder value and is suspending the dividend to best position the company for renewed growth. “As you can see by the recent changes to the Electro-Sensors board of directors and leadership team, the company is actively working to build upon its solid foundation established over the last several decades. We believe there are opportunities to further grow and expand Electro-Sensors, and temporarily suspending the quarterly dividend will give us the flexibility required to pursue these opportunities as they become available,” said Joseph Marino, chairman of the board.
Electro-Sensors, Inc. (NASDAQ:ELSE) is an industry leader in the design, manufacture, and customer support of rugged and reliable Machine Monitoring Sensors and Hazard Monitoring Systems for worldwide customers in the grain, feed, milling, bio-fuels, power generation, wastewater, water utilities, general manufacturing, and bulk material handling industries. Electro-Sensors' products are renowned for providing years of reliable service and bring safety, efficiency, and reliability to customers’ operations and have set the industry standard for ease of customer use. Headquartered in Minnetonka, Minnesota, Electro-Sensors, Inc. supports its customers with a worldwide sales and service organization.
Cautionary Statements
Certain statements found in this release may constitute forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect the company’s current views with respect to future events and financial performance and include any statement that does not directly relate to a current or historical fact. Forward-looking statements can generally be identified by the words “believe,” “expect,” “anticipate” or “intend” or similar words. Forward-looking statements made in this release include statements regarding the company’s goals for future growth and the impact of temporarily suspending quarterly dividend payments. Forward-looking statements cannot be guaranteed and actual results may vary materially due to the uncertainties and risks, known and unknown, associated with such statements. Examples of risks and uncertainties for Electro-Sensors include, but are not limited to, the company’s ability to successfully execute its growth strategy and manage executive and director personnel transitions, as well as other factors described from time to time in our reports to the Securities and Exchange Commission. Investors should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or potentially inaccurate assumptions investors should take into account when making investment decisions. Shareholders and other readers should not place undue reliance on “forward-looking statements,” as such statements speak only as of the date of this release.