MGC Diagnostics Corporation (NASDAQ:MGCD) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item 5.02

Executive Officer Changes

On March 22, 2017, the Board of Directors of MGC Diagnostics
Corporation (the Company) designated Jill Burchill as the
Companys principal financial officer. Ms. Burchill, age 62 (CPA,
Inactive), began serving as interim Chief Financial Officer on
March 20, 2017. Mr. Burchill has over 30 years of experience as a
financial professional, including serving as chief financial
officer or interim chief financial officer for a number of public
and private issuers, more recently often on a contract or
short-term basis.

During the past five years, Ms. Burchill served as interim chief
financial officer for Nilfisk-Advance Inc. from February 2016 to
March 2016 and also from December 2013 to May 2014; served as a
consultant for Gemini, Inc. from January 2015 to March 2015;
served as a chief financial officer advisor for JB Wholesale
Distributing, Inc. from March 2013 to May 2013; served as a
strategic financial consultant for The American Membership Group
from July 2012 to October 2012; and served as chief financial
officer for Ryt-way Industries Company from September 2011 to
February 2012. Prior to the past five years, she served as chief
financial officer, interim chief financial or in other financial
or operational capacities for a number of entities, including
Dunwoody College; National American University; American Medical
Systems, Inc.; Zomax; Dane Technologies; Nuclear Management
Company and Sheldahl.

Ms. Burchill also served for 16 years in positions of increasing
responsibility at 3M Company and served as the initial chief
financial officer of Imation Corporation when it was spun off
from 3M Company in 1996. The Company has agreed to compensate Ms.
Burchill at an hourly basis for her services.

On March 22, 2017, the Board also designated Larry R. Degen, age
62 (CPA, Inactive), as the Companys principal accounting officer
and secretary. Mr. Degen had been serving as Corporate Controller
of the Company since April 2010, and also served as Interim Chief
Financial Officer of the Company from July 9, 2010 to May 16,
2011.

Prior to employment by the Company, Mr. Degen served as Chief
Financial Officer of Micro Dynamics Corporation (dba Logic), a
contract manufacturing and engineering services firm from
February 2008 to November 2008 where he was responsible for
executive management and oversight of financial and human
resources operations of the corporation. Prior to joining Logic,
Mr. Degen was Vice President and Principal Accounting Officer of
Pemstar, Inc., an international contract manufacturing company
and engineering services firm, from 2002 to 2007 and Vice
President and Corporate Controller from 1999 to 2002. Prior to
Pemstar, he was employed by Capital Safety Company Ltd, a safety
products manufacturer, as Chief Financial Officer, and at Palaru
Corporation, a commercial printer, as Chief Financial Officer.
Mr. Degen was also employed by Ernst Young for 15 years, where he
served primarily manufacturing clients in audit and special
project support services. Mr. Degen holds a Bachelor of Arts, in
Accounting and Business Administration/Economics from St. Johns
University in Collegeville, Minnesota.

The Company has no formal employment agreement with Mr. Degen.
Mr. Degen currently receives a salary of $155,000 and is eligible
to participate in the MGC Diagnostics Corporation 2017 Management
Incentive Plan, with payouts of 3%, 15% and 24% of salary upon
the Companys achievement of threshold, target and maximum,
respectively.

2017 Management Incentive Bonus Plan

On March 22, 2017, the Board, upon recommendation from the Human
Capital Committee, approved the MGC Diagnostics Corporation 2017
Management Incentive Plan (the 2017 MIP). The Board established
target performance goals for the Companys Chief Executive Officer
Todd M. Austin and President Matthew S. Margolies. The 2017 MIP
annual performance goals for these officers are related to
Company consolidated revenue and operating income. For these
executives to receive payouts under the 2017 MIP, the Company
must achieve threshold in each of consolidated revenue and
operating income.

The following table sets forth the amount that each of the
Companys two executive officers would receive if the Company
achieves threshold, target or maximum in each category.

The Board retains discretion under the 2017 MIP to make incentive
payments in amounts higher or lower than would otherwise be
required under the 2017 MIP. In addition, all payments under the
2017 MIP are subject to clawback under the Companys clawback
policy.

On March 22, 2017, the Company held its 2017 Annual Meeting of
Shareholders (the Annual Meeting). Of the 4,387,643 shares of the
Companys common stock outstanding and eligible to vote at the
Annual Meeting, 3,268,227 shares were present either in person or
by proxy.

The following describes the matters considered by the Companys
shareholders at the Annual Meeting and the results of the votes
cast at the meeting:

Proposal 1.To elect six directors of
the Company to hold office until the next Annual Meeting of
Shareholders or until their respective successors have been
elected and qualified.

Proposal 2.To ratify the appointment of
Baker Tilly Virchow Krause, LLP as the independent registered
public accounting firm for the Company for the fiscal year ending
October 31, 2017.

Proposal 3.To cast an advisory vote
approving the Companys executive compensation.

As a result, the shareholders elected each nominee as a director
of the Company, ratified the appointment of Baker Tilly Virchow
Krause, LLP as independent registered public accounting firm for
the Company for the year ending October 31, 2017 and approved the
Companys executive compensation.

About MGC Diagnostics Corporation (NASDAQ:MGCD)

MGC Diagnostics Corporation is a medical technology company. The Company designs, markets and sells non-invasive cardiorespiratory diagnostic products. The Company operates in the manufacture and sale of cardiorespiratory diagnostic products segment. The Company’s product portfolio provides solutions for disease detection, integrated care, and wellness across the cardiorespiratory healthcare range. The Company sells its products internationally through distributors and in the United States through a direct sales force targeting specialists located in hospitals and university-based medical centers, among others. The Company’s cardiorespiratory diagnostic products measure flow and respiratory pressures and also analyzes the inhaled and exhaled gases, such as oxygen and carbon dioxide. The Company offers its products in various categories, such as Pulmonary Function Products (PFT), Gas Exchange Testing Products, Cycle Ergometers and Treadmills, and Electronic Medical Records Interfaces.

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