StockerYale seeks Delaware incorporation
StockerYale wants the handful of investors who own a majority the company’s stock to approve the company reincorporating in Delaware as well as increase the salaries of its top officers, the company said in a preliminary proxy statement filed Tuesday.
The Salem, N.H.-based company also reported that it wants to reserve about a seventh of its stock for executive incentives,
The company said it wants to reincorporate under Delaware law mainly because it will be easier to raise capital and because stockholders and investors not based in the United States are more familiar with Delaware laws. It is currently incorporated in Massachusetts.
But shareholder rights change under Delaware law, the proxy warns. Delaware makes it easier to sell preferred stock, with greater voting rights, conversion rights, dividends distributions and its standing in case of a bankruptcy. Delaware law also makes it easier for an investor to get his legal costs advanced, particularly in criminal matters.
The company also said it plans to set aside some 5.3 million shares of stock – 35.4 million shares were outstanding on March 26 – as well as no more than or 5 percent of outstanding shares per year for the next five years, for stock incentives.
While awarding such options would be approved by the board of directors, and recommended by the compensation committee, that committee intends to delegate that authority to CEO and Chairman Mark Blodgett, at least when it comes to incentives for senior management, according to the proxy.
The three top executives in senior management received some $900,000 in compensation in 2006. Blodgett got a package worth slightly more than a half-million dollars, with nearly $130,000 in various stock options. Blodgett’s $340,000 base salary would increase to $410,000 in 2007 (though he would be giving up a $26,400 car allowance). The six-member board was paid a little more than $100,000 apiece in stock incentives.
The outcome of the proxy will essentially be decided by five investment groups, which control 54 percent of the stock, including some of the company’s major creditors: Eureka Interactive Fund Limited, based in England; Smithfield Fiduciary LLC, based in the British Cayman Islands; Lewis Asset Management, based in New York City; Empire GP LLC, based in Westport, Conn.; and Antony and Johanna Pope, former owners of Photonic Products, a British company that StockerYale acquired last year. – BOB SANDERS