Exchange Act of 1934
(Amendment No. )
☒
☐
Kenneth D. Trbovich
Chairman
Chief Executive Officer
April 16, 2020
Dear Fellow Shareholder:
The2022 Annual Meeting of Shareholders will take place on Wednesday, May 13, 2020 at 8:00A.M.Eastern Time. Due to the ongoing spread of the coronavirus (COVID-19) and the Company’s concern for its employees and shareholders, we have decided to hold our 2020 Annual Meeting solely by live webcast. We expect this modification in meeting format to be effective for this year only and to revert back to an in-person annual meeting in future years after public health conditions have improved.
The Stockholder Meeting Notice and Proxy Statement describe the matters to be acted upon during the meeting and provides instructions for voting as well as attending the virtual meeting. Even if you plan to attend the Annual Meeting online, we recommend that you vote by proxy in advance so that your vote will be counted if you later decide not to participate in the Annual Meeting.
If you have any questions in regard to completing your proxy, please call our Corporate Secretary, Bernadine E. Kucinski (716) 655-5990.
Your continued interest and support is very much appreciated.
SERVOTRONICS, INC.
1110 Maple Street
P.O. Box 300 Elma, New York 14059
NOTICE OF
2020 ANNUAL SHAREHOLDERS’ MEETING
To the Shareholders:
Notice is hereby given that the 2020 Annual Meeting of the Shareholders of Servotronics, Inc. (the “Company”) will be held virtually on Wednesday, May 13, 2020[•], 2022 at 8:00 A.M.[•] [a/p].m., Eastern Daylight Time. In light of public health concerns regarding the coronavirus outbreak,At the Annual Meeting, we will be held virtually via live webcast. You will be able to attend and participate in the Annual Meeting onlineconsider and vote your shares electronically by visiting: www.meetingcenter.io/265970016 aton the meeting date and time described inmatters listed below.
Only shareholders of record at the close of business on March 13, 2020 are entitled to notice of and to vote at the meeting or any adjournments thereof.
Dated: April 16, 2020
Important notice regarding the availability of Proxy materials for the Annual Meeting of Shareholders to be held on May 13, 2020.
This Proxy statement, form of proxy and the Company’s 2019 Annual Report are available atwww.servotronics.com.
SERVOTRONICS, INC.
1110 Maple Street
P.O. Box 300 Elma, New York 14059
PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERSTO BE HELD May 13, 2020
The following information is furnished in connection with the2023 Annual Meeting of Shareholders of the Company and until such directors’ successors shall have been elected and qualified;
Attending the Annual Meeting virtually on the Internet
If you are a shareholder of record (i.e. you hold your shares registered in your name through Computershare Trust Company, N.A. our transfer agent and registrar), you do not need to register to attend the Annual Meeting virtually on the Internet. Please follow the instructions on the Notice.
If you hold your shares through an intermediary, such as a broker, bank or other nominee, you must register in advance to attend the Annual Meeting virtually on the Internet.
To register in advance to attend the Annual Meeting virtually on the Internet, you must submit a legal proxy that reflects proof of your proxy power. The legal proxy will show your holdings in Company Common Stock with your name. Please forward a copy of the legal proxy along with your email address to Computershare according to the below instructions.
Requests for registration should be directed as follows:
Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 P.M. Eastern Time on May 8, 2020. You will receive a confirmation of your registration by email after Computershare receives your registration materials.
We encourage you to access the meeting in advance of the designated start time.
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Available Information
Under rules adopted by the Securities and Exchange Commission (“SEC”), the Company has chosen to provide its shareholders with the choice of accessing the Annual Meeting proxy materials on the Internet, rather than receiving printed copies of those materials through the mail. In connection with this process, a Notice Regarding the Availability of Proxy Materials (the “Notice”) is being mailed to the Company’s shareholders who have not previously requested electronic access to its proxy materials or printed proxy materials. The Notice contains instructions on how you may access and review the Company’s proxy materials on the Internet and how you may vote your shares over the Internet. The Notice will also tell you how to request the Company’s proxy materials, in either printed form or by email, at no charge. The Notice contains a control number that you will need to vote your shares. We suggest you keep the Notice for your reference through the meeting date.
SOLICITATION AND REVOCABILITY OF PROXIES
The Annual Meeting of Shareholders is being solicited by the Directors of the Company. The proxy may be revoked by a shareholder at any time prior to the exercise thereof by filing with the Corporate Secretary of the Company a written revocation or duly executed proxy bearing a later date. The cost of soliciting the proxies will be paid by the Company. Proxies may be solicited by employees of the Company (who will receive no additional compensation therefor) personally or by telephone or other electronic communications. Arrangements may be made with banks, brokerage houses and other institutions, nominees and/or fiduciaries to forward the soliciting material to their principals and to obtain authorization for the execution of proxies. The Company may, upon request, reimburse banks, brokerage houses and other institutions, nominees and fiduciaries for their expenses in forwarding proxy material to their principals.
VOTING INFORMATION
The record date for determining shares entitled to vote has been fixed at the close of business on March 13, 2020. On such date there were outstanding 2,477,099 shares of common stock of the Company, $.20 par value (“Common Stock”), entitled to one vote each.
In order to conduct the Annual Meeting, the presence, in person or by properly executed proxy, of the holders of a majority (i.e., greater than 50%) of all the votes entitled to be cast at the Annual Meeting is necessary to constitute a quorum. Directors will be elected by a plurality of all the votes cast at the 2020 Annual Meeting with each share being voted for as many individuals as there are Directors to be elected.
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Company’s material contracts and other legal instruments. We cannot assure you whether Star Equity will withdraw one or more of its nominees or whether Star Equity will file proxy materials to solicit in favor of its nominees.
Shares
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You
Telephone and Internet voting options are availableonline or by phone, 24 hours a day, seven days a week.week (until the applicable deadline set forth below, except for votes at the Annual Meeting). You may also vote by mail if you requested and received printed copies of the proxy materials. Please refer to the enclosed BLUE proxy card for your voting instructions.
If your shares are held in a brokerage account or by a bank or other nominee, your broker, bank or other nominee will ask you how you want your shares to be voted. If you provide voting instructions, your shares must be voted as specified.
With respect to “non-routine” matters, the broker is not permitted to vote your shares without timely received voting instructions. At the Annual Meeting, the only “routine” matter proposed to be presented is the ratification of the selection of Freed Maxick CPAs, P.C. as the Company’s independent registered public accounting firm for the 2022 fiscal year (Proposal No. 4). Accordingly, the broker will be able to exercise discretionary authority on Proposal No. 4 if it does not receive voting instructions from you, and broker non-votes will occur as to each of the other proposals presented at the Annual Meeting, which are considered “non-routine” matters. Such broker non-votes will not be considered votes cast on such proposals.
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PROPOSAL 1: ELECTION OF DIRECTORS
The By-Laws of
Each nominee is currently serving as a Directormeeting, the Chair of the Company. The Directors believe that allmeeting may adjourn the meeting to permit further solicitation of the nominees are willing and ableproxies in order to serve as Directors of the Company. If any nominee at the time of electionachieve a quorum. Unless a new record date is unable or unwilling to serve or is otherwise unavailable for election,fixed, your proxy will still be voted in accordancevalid at an adjourned Annual Meeting and you will still be able to change or revoke your proxy until it is used to vote your shares.
past year, the Board has overseen significant governance improvements at Servotronics. The Company has also made important investments in the business while the management has steered the Company through the pandemic, maintaining stability and navigating the challenges that impacted each of the Company’s business segments in different ways.
Jason T. Bear has served as a Director since 2017. Mr. Bear is Chair of the Nominating and Corporate Governance Committee, advised the Board that he would be resigning from the Board April 25, 2022. As a result of these changes the size of the Board was increased seven Directors. The Board has also approved an amendment to the company’s shareholder rights plan to accelerate its expiration date to April 26, 2022, effectively terminating the “poison pill” that had previously been set to expire on October 15, 2022.
Directors.
Lucion P. Gygax, an author, entrepreneur and Lieutenant Colonel in the Army National encloGuard,Farrell was appointed to the Board of Directors in JulyApril 2022 when he also was appointed Chief Executive Officer of the Company. He joined the Company following a more than 30-year career with Western New York-based Moog Inc. (NYSE: MOG.A and MOG.B), where he served in various roles of increasing responsibility including, most recently, Site General Manager for Moog’s Aircraft Group, which supports military and commercial aerospace applications. Prior to that, he served five years as Site General Manager for its Industrial Group, supporting markets including flight simulation, oil and gas exploration, power generation and industrials automation. Earlier in his tenure at Moog, he worked in a variety of other executive and engineering roles for the worldwide designer, manufacturer, and integrator of precision control components and systems, including in its Industrials Group, Space Products Division and Engine Controls Division. Mr. Farrell holds a B.S. degree in mechanical engineering from the University of Notre Dame and an M.B.A in manufacturing operations management from the State University of New York at Buffalo. His leadership experience and industry knowledge provide valuable insight to the Board of Directors in formulating and executing the Company’s strategy.
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Kenneth D. Trbovich has been ChairmanFinancial Analyst at Goldman Sachs. Mr. Wax graduated from Yale University where he received a B.A. in Economics. His operational, financial and investment experience, and knowledge of capital markets gives him strong insight into the Board and Chief Executive Officer since November 2017 and President of the Company since 2012. Mr. Trbovich has served as a Director since 2012. Mr. Trbovich is also President and CEO ofissues facing the Company’s subsidiary, The Ontario Knife Company (OKC). Mr. Trbovich initially joinedbusinesses and markets.
The Directors recommend a vote FOR the five nominees listed above. Unless instructed otherwise, proxies will be voted FOR these nominees.
CORPORATE GOVERNANCE AND BOARD MATTERS
Independent Directors
Under the NYSE American, listing standards, at least 50%fifty percent of our Directors, and, except in limited circumstances, all of the Company’s directorsmembers of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, must meet the test of “independence” as defined by the NYSE American. The NYSE American standards provide that to qualify as an “independent” director, in addition to satisfying certain bright-line criteria, the Board of Directors must affirmatively determine that a director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board of Directors has determined that each director nominee, other than Messrs. Cosgrove and Farrell, satisfies the bright-line criteria and that no other director or nominee has a relationship with the Company that would interfere with such person’s ability to exercise independent judgment as a member of the Company’sour Board.
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Committees and Meeting Data
The
The
Code of Ethics
The Company has adopted a Code of Ethics and Business Conduct (the “Code”) that applies to all Directors, Officers and employees of the Company as required by the listing standards of the NYSE American. The Code is available on the Company’s website atwww.servotronics.com and the Company intends to disclose on this website any amendment to the Code. Waivers under the Code, if any, will be disclosed under the rules of the SEC and the NYSE American.
The Company also has a Whistleblower Policy, which is incorporated into the Code of Ethics and Business Conduct that requires Directors, Executive Officers and employees to comply with appropriate accounting and internal controls and establishes procedures to report any perceived wrongdoing, questionable accounting or auditing matters in a confidential and anonymous manner.
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Report of the Audit Committee of the Board of Directors
The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 except to the extent the Company specifically incorporates this Report by reference therein.
The Audit Committee serves as the representative of the Board of Directors for general oversight of the Company’s financial accounting and reporting, systems of internal control, audit process and monitoring compliance with standards of business conduct. The Audit Committee operates under a written charter which is available on the Company’s website atwww.servotronics.com. Management of the Company has primary responsibility for preparing financial statements of the Company as well as the Company’s financial reporting process. Freed Maxick CPAs, P.C. (“Freed Maxick”), acting as Independent Auditors, is responsible for expressing an opinion on the conformity of the Company’s audited financial statements withU.S.generally accepted accounting principles.
In this context, the Audit Committee hereby reports as follows:
Each member of the Audit Committee is independent as defined under the listing standards of the NYSE American.
AUDIT COMMITTEE
Christopher M. Marks, Chair
Lucion P. Gygax
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Leadership Structure
Kenneth D. Trbovich is the Company’s Chairman of the Board and Chief Executive Officer. The Company believes that having one person hold the roles of Chairman of the Board and Chief Executive Officer is the most effective way at this time to organize the leadership structure of the Board of Directors. Having one person hold the roles of Chairman of the Board and Chief Executive Officer promotes unified leadership and direction for the Board and executive management and it allows for a single and clear focus for the chain of command to execute the Company’s strategic initiatives and business plans. Because Mr. Trbovich is primarily responsible for managing the Company’s day-to-day operations and strategic plan implementations, he is in the best position to chair meetings of the Board of Directors where key business and strategic issues are discussed.
Another component of our leadership structure is the active role played by non- management and independent Directors in overseeing the Company’s business, both at the Board and Committee level. The Board believes that the combined role of Chairman of the Board and Chief Executive Officer coupled with the existence of the independent Directors is the appropriate leadership structure for the Board of Directors at this time. This structure provides sufficient independent oversight while avoiding unnecessary confusion regarding the Board’s oversight responsibilities and the day-to-day management of the Company’s business operations and strategic plan implementations. The Nominating and Corporate Governance Committee periodically reviews this structure to assess its effectiveness on a continuing basis.
Board Oversight of Risk Management
Director
Procedures
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Directors’ Compensation
Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($)(1) | | | Total ($) | | |||||||||
Jason T. Bear | | | | $ | 60,000 | | | | | $ | 25,000 | | | | | $ | 85,000 | | |
Edward C. Cosgrove | | | | $ | 60,000 | | | | | $ | 25,000 | | | | | $ | 85,000 | | |
Lucion P. Gygax | | | | $ | 60,000 | | | | | $ | 25,000 | | | | | $ | 85,000 | | |
Christopher M. Marks | | | | $ | 60,000 | | | | | $ | 25,000 | | | | | $ | 85,000 | | |
Name | Fees Earned or Paid in Cash | Stock Awards (1) | All Other Compensation (2) | Total | ||||||||||||
Jason T. Bear | $ | 65,000 | $ | 25,000 | $ | 3,447 | $ | 93,447 | ||||||||
Edward C. Cosgrove | $ | 60,833 | $ | 25,000 | $ | 243 | $ | 86,076 | ||||||||
Lucion P. Gygax | $ | 65,000 | $ | 25,000 | $ | 575 | $ | 90,575 | ||||||||
Christopher M. Marks | $ | 65,000 | $ | 25,000 | $ | 1,121 | $ | 91,121 |
Eligible Participants. Any employee of |
Shareholder Communications with the Board of Directors
Shareholders who wish to contact the Board of Directors or any of its members may do soaffiliates any director or any individuals designated by addressing their written correspondencethe Committee who are reasonably expected to Boardbecome employees or directors after the receipt of Directors, 1110 Maple Street, P.O. Box 300, Elma, New York 14059. Correspondence directedAwards (each, an “Eligible Person”) shall be permitted to participate (a “Participant”)
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EXECUTIVE OFFICERS
The following is a listingfair market value of the Company’s Common Stock underlying such stock options on the date such Options are granted (other than in the case of Options that are substitute Awards). The maximum term for Options granted under the 2022 Equity Plan will be ten (10) years from the initial date of grant. The purchase price for the shares as to which an Option is exercised may be paid, to the extent permitted by law, either (a) in cash or by certified or bank check at the time the Option is exercised or (b) in the discretion of the Committee, upon such terms as the Committee shall approve, including: (i) by delivery to the Company of other Common Stock, duly endorsed for transfer to the Company, with a fair market value on the date of delivery equal to the Option exercise price (or portion thereof) due for the number of shares being acquired, or by means of attestation whereby the Participant identifies for delivery specific shares of Common Stock that have an aggregate fair market value on the date of attestation equal to the Option exercise price (or portion thereof) and receives a number of shares of Common Stock equal to the difference between the number of shares thereby purchased and the number of identified attestation shares of Common Stock; (ii) a “cashless” exercise program established with a broker; (iii) by reduction in the number of shares of Common Stock otherwise deliverable upon exercise of such Option with a fair market value equal to the aggregate Option exercise price at the time of exercise; (iv) by any combination of the foregoing methods; or (v) in any other form of legal consideration that may be acceptable to the Committee.
Positiontax laws. Such laws and their interpretation by the Internal Revenue Service are subject to change. The general consequences described in this summary may not apply in unusual situations.
| ||||
its Industrial Group, supporting markets including flight simulation, oil and gas exploration, power generation and industrials automation.
Board.
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Equity Awards
2021.
Name and Principal Position | | | Year | | | Salary | | | Bonus | | | All Other Compensation(1) | | | Total | | |||||||||||||||
Lisa F. Bencel Chief Financial Officer | | | | | 2021 | | | | | $ | 245,960 | | | | | | — | | | | | $ | 47,684 | | | | | $ | 293,644 | | |
| | | 2020 | | | | | $ | 245,960 | | | | | $ | 40,000 | | | | | $ | 47,128 | | | | | $ | 333,088 | | | ||
James C. Takacs Chief Operating Officer | | | | | 2021 | | | | | $ | 220,740 | | | | | | — | | | | | $ | 38,313 | | | | | $ | 259,053 | | |
| | | 2020 | | | | | $ | 220,740 | | | | | $ | 25,000 | | | | | $ | 65,688 | | | | | $ | 311,428 | | | ||
Kenneth D. Trbovich Former Chief Executive Officer | | | | | 2021 | | | | | $ | 632,289 | | | | | | — | | | | | $ | 221,211 | | | | | $ | 853,500 | | |
| | | 2020 | | | | | $ | 639,496 | | | | | $ | 100,000 | | | | | $ | 376,022 | | | | | $ | 1,115,518 | | |
Name and Principle Position | Year | Salary | Bonus (1) | All Other Compensation (2) | Total | |||||||||||||
Kenneth D. Trbovich | 2019 | $ | 606,480 | TBD | $ | 47,820 | $ | 654,300 | ||||||||||
Chairman and CEO | 2018 | $ | 555,831 | $ | 200,000 | $ | 47,114 | $ | 802,945 | |||||||||
Lisa F. Bencel | 2019 | $ | 232,593 | TBD | $ | 44,194 | $ | 276,787 | ||||||||||
CFO and Treasurer | 2018 | $ | 211,761 | $ | 80,000 | $ | 88,191 | $ | 379,952 | |||||||||
James C. Takacs | 2019 | $ | 213,682 | TBD | $ | 22,595 | $ | 236,277 | ||||||||||
Chief Operating Officer | 2018 | $ | 196,925 | $ | 50,000 | $ | 18,919 | $ | 265,844 |
CEO Employment Agreement
Mr. Trbovich has an employment agreement with the Company pursuant to which he is entitled to receive minimum salary compensation as set forth in the agreement, or such greater amount as the Company’s Board of Directors may approve/ratify. On April 26, 2019 the Board of Directors approved a base salaryTakacs and $2,831 for Mr. Trbovich in connection with the allocation of $614,900, per annum. Inshares of Common Stock under the event of death or total disability during the termServotronics Inc. Employee Stock Ownership Plan (“ESOP”) valued as of the employment agreement, he or his estateclosing price on November 30, 2021 (the date of allocation); (ii) $2,526, $1,476 and $630 for Ms. Bencel, Mr. Takacs and Mr. Trbovich, respectively, for life insurance; (iii) $34,596, $11,203 and $30,130 for Ms. Bencel, Mr. Takacs and Mr. Trbovich, respectively, for health, dental and vision insurance premiums and the reimbursement of medical/ health related expenses not covered under the Company’s health insurance plans; (iv) $7,731, $6,666, and $7,200 for Company 401k match and dividends paid on vested shares of restricted stock shares for Ms. Bencel, Mr. Takacs and Mr. Trbovich, respectively; (v) $16,144 and $173,300 for Mr. Takacs and Mr. Trbovich, respectively for vacation pay in lieu of time off pursuant to a policy that is entitledgenerally applicable to receive 50%all employees of the compensation he is receiving from the Company at the time of his death or disability during the remainder of the term of the employment agreement. Also, in the event of (i) a breach of the agreement by the Company, (ii) a change in control of the Company, as defined, or (iii) a change in the responsibilities, positions or geographic office location, he is entitled to terminate the agreementCompany; and receive a payment of 2.99 times his average annual compensation from the Company(vi) $7,120 for the preceding five years. If this provision is invoked and the Company makes the required payment, the Company will be relieved of any further salary liability under the agreement notwithstanding the number of years covered by the agreement prior to termination. The term of the agreement extends to and includes December 31, 2020 provided however, the term of the agreement will be automatically extended for 1 additional year beyond its then expiration date unless either party has notified the other in writing that the term will not be extended. If the Company elects not to extend the agreement, he will be entitled to a severance payment equal to nine months’ salary and benefits.
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The Company provides certain individual and spousal post-retirement health and life insurance benefits for Kenneth Trbovich. Upon retirement and after attaining at least the age of 65, the Company will pay for the retired executives’ and dependents’ health benefits and will continue the Company-provided life insurance offered at the time of retirement. The retiree’s health insurance benefits ceases upon the death of the retired executive. The actuarially calculated future obligation of the benefits at December 31, 2019 and 2018 for Kenneth Trbovich is $582,827 and $427,622 respectively.
Outstanding Equity Awards at 2019 Fiscal Year End
The following table shows all outstanding equity awards held by the Named Officers as of December 31, 2019.
Stock Awards | ||||||||
Named Officer | Number of shares or units that have not vested (#) | Market value of shares or units of stock that have not vested ($) (1) | ||||||
Kenneth D. Trbovich | 30,000 | (2) | $ | 301,800 | ||||
Lisa F. Bencel | 8,000 | (3) | $ | 80,480 | ||||
James C. Takacs | 7,500 | (4) | $ | 75,450 |
Certain Relationships and Related Transactions
Kenneth D. Trbovich, Chairman of the Board and Chief Executive Officer, is an inventor or co-inventor of certain issued patents and patent pending applications that are used in the businesspersonal use of a subsidiary of the Company. The patents have been and are currently used by the subject subsidiary on a royalty-free basis withcompany car for Mr. Trbovich’s consent.
Trbovich.
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The following table lists
Name and Address of Beneficial Owner | | | Amount of Common Stock Beneficially Owned | | | Percent of Common Stock(1) | | ||||||
Servotronics, Inc. Employee Stock Ownership Trust 1110 Maple Street Elma, NY 14059 | | | | | 440,649(2) | | | | | | 17.7% | | |
Estate of Dr. Nicholas D. Trbovich 960 Porterville Road East Aurora, NY 14052 | | | | | 393,818(3) | | | | | | 15.8% | | |
Brent D. Baird 25 Melbourne Place Buffalo, NY 14222 | | | | | 239,000(4) | | | | | | 9.6% | | |
Wax Asset Management, LLC 44 Cherry Lane Madison, CT 06443 | | | | | 158,615(5) | | | | | | 6.4% | | |
FMR LLC 245 Summer Street Boston, MA 02210 | | | | | 138,330(6) | | | | | | 5.6% | | |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class (1) | ||||||
Servotronics, Inc. Employee Stock Ownership Trust (2) 1110 Maple Street P.O. Box 300 Elma, New York 14059 |
498,953 | (2) | 20.14 | % | ||||
Estate of Dr. Nicholas D. Trbovich (3) 1110 Maple Street P.O. Box 300 Elma, New York 14059 | 393,818 | (3) | 15.90 | % | ||||
Harvey Houtkin (4) 160 Summit Avenue Montvale, New Jersey 07645 | 352,088 | (4) | 14.21 | % | ||||
FMR LLC (5) 245 Summer Street Boston, Massachusetts 02210 | 138,130 | (5) | 5.58 | % |
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and Directors
Name of Beneficial Owner | | | Amount of Common Stock Beneficially Owned | | | Percent of Common Stock(1) | | ||||||
Lisa F. Bencel | | | | | 8,549(2) | | | | | | * | | |
Edward C. Cosgrove, Esq. | | | | | 9,153 | | | | | | * | | |
William F. Farrell, Jr. | | | | | 6,794 | | | | | | * | | |
Lucion P. Gygax | | | | | 9,153 | | | | | | * | | |
Karen L. Howard | | | | | 118 | | | | | | * | | |
Christopher M. Marks | | | | | 9,153 | | | | | | * | | |
James C. Takacs | | | | | 37,721(3) | | | | | | 1.5% | | |
Kenneth D. Trbovich | | | | | 502,598(4) | | | | | | 20.2% | | |
Evan H. Wax | | | | | 158,733(5) | | | | | | 6.4% | | |
All directors, nominees and executive officers as a group | | | | | 741,972 | | | | | | 29.8% | | |
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class (1) | ||||||
Kenneth D. Trbovich | 507,915 | (2) | 20.51 | % | ||||
Lisa F. Bencel | 9,726 | (3) | 0.39 | % | ||||
James C. Takacs | 38,802 | (4) | 1.57 | % | ||||
Edward C. Cosgrove, Esq. | 3,031 | 0.12 | % | |||||
Lucion P. Gygax | 3,031 | 0.12 | % | |||||
Christopher M. Marks | 3,031 | 0.12 | % | |||||
Jason T. Bear | 1,959 | 0.08 | % | |||||
All Directors and Officers as a group | 654,921 | (5) | 26.44 | % |
beneficial owner of those shares pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, due to its discretionary power to make investment decisions over such shares for its clients. Mr. Wax is the President of Wax Asset Management, LLC.
Based solely on its review of reports filed pursuant to
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PROPOSAL 2:
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
process. Freed Maxick CPAs, P.C. (“Freed Maxick”), acting as Independent Auditors, is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with U.S. generally accepted accounting principles.
At the Annual Meeting, the shareholders will be asked to ratify the selection of Freed Maxick as the Company’s independent registered public accounting firm. Pursuant to the rules and regulations ofyear ended December 31, 2021, for filing with the Securities and Exchange Commission,Commission.
| | | | Submitted by: | |
| | | | THE AUDIT COMMITTEE | |
| | | | Christopher M. Marks, Chairman Lucion P. Gygax | |
The affirmative vote of a majority of the votes cast on the proposal, assuming a quorum is present at the Annual Meeting, is required to ratify the appointment of Freed Maxick. The Directors of the Company unanimously recommend a vote “FOR” the ratification of Freed Maxick as the Company’s independent registered public accounting firm for 2020. Unless otherwise instructed, proxies will be voted “FOR” ratification of the appointment of Freed Maxick.
Services
2019 | 2018 | |||||||
Audit Fees (1) | $ | 141,500 | $ | 115,000 | ||||
Tax Service Fees (2) | 41,500 | 41,850 | ||||||
Total | $ | 183,000 | $ | 156,850 |
2020.
| | | 2021 | | | 2020 | | ||||||
Audit Fees(1) | | | | $ | 230,745 | | | | | $ | 218,964 | | |
Tax Fees(2) | | | | $ | 59,555 | | | | | $ | 66,225 | | |
Total | | | | $ | 290,300 | | | | | $ | 285,189 | | |
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Proposals to be introduced at theAnnual Meeting, but not intended to be includedfor Inclusion in the Company’s Proxy Material
ForMaterials
| | | | BY ORDER OF THE BOARD OF DIRECTORS | |
| | | | BERNADINE E. KUCINSKI Secretary | |
Name | | | Present Principal Occupation | |
Edward C. Cosgrove | | | Attorney, The Cosgrove Firm | |
William F. Farrell, Jr. | | | Chief Executive Officer of the Company | |
Lucion P. Gygax | | | Principal owner and executive of an event management company | |
Karen L. Howard | | | Former (Retired) Executive Vice President of Kei Advisors LLC | |
Christopher M. Marks | | | Member, Jensen, Marks, Langer & Vance, LLC | |
Evan H. Wax | | | Managing Member, Wax Asset Management LLC | |
Name | | | Present Principal Occupation | |
Lisa F. Bencel | | | Chief Financial Officer of the Company | |
James C. Takacs | | | Chief Operating Officer of the Company | |
Name | | | Date | | | Title of Security | | | Number of Shares | | | Transaction | | |||
Edward C. Cosgrove | | | 08/12/2020 05/14/2021 | | | Common Stock Common Stock | | | | | 2,832 3,290 | | | | Grant of Director Retainer Award Grant of Director Retainer Award | |
William F. Farrell, Jr. | | | 04/25/2022 | | | Common Stock | | | | | 6,794 | | | | Grant of Restricted Stock | |
Lucion P. Gygax | | | 08/12/2020 05/14/2021 | | | Common Stock Common Stock | | | | | 2,832 3,290 | | | | Grant of Director Retainer Award Grant of Director Retainer Award | |
Karen L. Howard | | | 04/25/2022 | | | Common Stock | | | | | 118 | | | | Grant of Director Retainer Award | |
Christopher M. Marks | | | 08/12/2020 05/14/2021 | | | Common Stock Common Stock | | | | | 2,832 3,290 | | | | Grant of Director Retainer Award Grant of Director Retainer Award | |
Name | | | Date | | | Title of Security | | | Number of Shares | | | Transaction | | |||
Evan H. Wax(1) | | | 05/27/2020 | | | Common Stock | | | | | 250 | | | | Open Market Purchase | |
| 05/28/2020 | | | Common Stock | | | | | 300 | | | | Open Market Purchase | | ||
| 06/01/2020 | | | Common Stock | | | | | 118 | | | | Open Market Purchase | | ||
| 06/03/2020 | | | Common Stock | | | | | 300 | | | | Open Market Sale | | ||
| 06/11/2020 | | | Common Stock | | | | | 200 | | | | Open Market Sale | | ||
| 06/16/2020 | | | Common Stock | | | | | 400 | | | | Open Market Sale | | ||
| 06/29/2020 | | | Common Stock | | | | | 1,737 | | | | Open Market Sale | | ||
| 06/30/2020 | | | Common Stock | | | | | 400 | | | | Open Market Sale | | ||
| 07/09/2020 | | | Common Stock | | | | | 1,000 | | | | Open Market Sale | | ||
| 07/27/2020 | | | Common Stock | | | | | 379 | | | | Open Market Sale | | ||
| 08/17/2020 | | | Common Stock | | | | | 500 | | | | Open Market Sale | | ||
| 08/20/2020 | | | Common Stock | | | | | 100 | | | | Open Market Sale | | ||
| 09/29/2020 | | | Common Stock | | | | | 1,893 | | | | Open Market Sale | | ||
| 09/30/2020 | | | Common Stock | | | | | 2,343 | | | | Open Market Sale | | ||
| 10/01/2020 | | | Common Stock | | | | | 1,474 | | | | Open Market Sale | | ||
| 10/13/2020 | | | Common Stock | | | | | 500 | | | | Open Market Sale | | ||
| 11/11/2020 | | | Common Stock | | | | | 101 | | | | Open Market Sale | | ||
| 11/12/2020 | | | Common Stock | | | | | 100 | | | | Open Market Sale | | ||
| 11/16/2020 | | | Common Stock | | | | | 1,350 | | | | Open Market Purchase | | ||
| 11/25/2020 | | | Common Stock | | | | | 350 | | | | Open Market Purchase | | ||
| 11/30/2020 | | | Common Stock | | | | | 120 | | | | Open Market Purchase | | ||
| 12/01/2020 | | | Common Stock | | | | | 200 | | | | Open Market Purchase | | ||
| 12/22/2020 | | | Common Stock | | | | | 1,586 | | | | Open Market Sale | | ||
| 12/23/2020 | | | Common Stock | | | | | 7,238 | | | | Open Market Sale | | ||
| 12/24/2020 | | | Common Stock | | | | | 4,122 | | | | Open Market Sale | | ||
| 12/28/2020 | | | Common Stock | | | | | 5,716 | | | | Open Market Sale | | ||
| 02/17/2021 | | | Common Stock | | | | | 1,283 | | | | Open Market Sale | | ||
| 03/03/2021 | | | Common Stock | | | | | 188 | | | | Open Market Purchase | | ||
| 04/01/2021 | | | Common Stock | | | | | 500 | | | | Open Market Sale | | ||
| 04/05/2021 | | | Common Stock | | | | | 87 | | | | Open Market Sale | | ||
| 05/17/2021 | | | Common Stock | | | | | 1,000 | | | | Open Market Purchase | | ||
| 05/21/2021 | | | Common Stock | | | | | 4,292 | | | | Open Market Purchase | | ||
| 06/01/2021 | | | Common Stock | | | | | 500 | | | | Open Market Purchase | | ||
| 06/16/2021 | | | Common Stock | | | | | 9,492 | | | | Open Market Purchase | | ||
| 09/08/2021 | | | Common Stock | | | | | 1,941 | | | | Open Market Sale | | ||
| 09/17/2021 | | | Common Stock | | | | | 158 | | | | Open Market Sale | | ||
| 09/20/2021 | | | Common Stock | | | | | 1,500 | | | | Open Market Sale | | ||
| 09/21/2021 | | | Common Stock | | | | | 1,201 | | | | Open Market Sale | | ||
| 09/24/2021 | | | Common Stock | | | | | 104 | | | | Open Market Sale | | ||
| 09/27/2021 | | | Common Stock | | | | | 4,006 | | | | Open Market Sale | | ||
| 12/29/2021 | | | Common Stock | | | | | 500 | | | | Open Market Purchase | | ||
| 01/03/2022 | | | Common Stock | | | | | 200 | | | | Open Market Purchase | | ||
| 01/13/2022 | | | Common Stock | | | | | 600 | | | | Open Market Sale | | ||
| 01/14/2022 | | | Common Stock | | | | | 300 | | | | Open Market Sale | | ||
| 01/21/2022 | | | Common Stock | | | | | 3,735 | | | | Open Market Sale | | ||
| 01/24/2022 | | | Common Stock | | | | | 100 | | | | Open Market Purchase | | ||
| 01/27/2022 | | | Common Stock | | | | | 471 | | | | Open Market Purchase | | ||
| 01/28/2022 | | | Common Stock | | | | | 50 | | | | Open Market Sale | | ||
| 02/08/2022 | | | Common Stock | | | | | 397 | | | | Open Market Sale | | ||
| 04/25/2022 | | | Common Stock | | | | | 118 | | | | Grant of Director Retainer Award | |
Name | | | Date | | | Title of Security | | | Number of Shares | | | Transaction | | |||
Lisa F. Bencel | | | 01/01/2021 | | | Common Stock | | | | | 1,571 | | | | Shares surrendered to the Company in satisfaction of tax withholding obligations upon the vesting of restricted stock | |
James C. Takacs | | | 01/01/2021 | | | Common Stock | | | | | 1,473 | | | | Shares surrendered to the Company in satisfaction of tax withholding obligations upon the vesting of restricted stock | |
OTHER MATTERS
So far Subject to Section 13.6, each Stock Appreciation Right shall vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Stock Appreciation Right may be subject to such other terms and conditions on the time or times when it may be exercised as the Directors are aware, no matters otherCommittee may deem appropriate. The vesting provisions of individual Stock Appreciation Rights may vary. No Stock Appreciation Right may be exercised for a fraction of a share of Common Stock.
15.2 In addition, in the event of a Change in Control, the Committee may in its discretion and upon at least 10 days’ advance notice to the affected persons, cancel any outstanding Awards and pay to the holders thereof, in cash or stock, or any combination thereof, the value of such Awards based upon the price per share of Common Stock received or to be received by other shareholders of the Company in the event. In the case of any Option or Stock Appreciation Right with an exercise price (or SAR Exercise Price in the case of a Stock Appreciation Right) that equals or exceeds the price paid for a share of Common Stock in connection with the Change in Control, the Committee may cancel the Option or Stock Appreciation Right without the payment of consideration therefor. 15.3 The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its Affiliates, taken as a whole. B-15 16. Amendment of the Plan and Awards. 16.1 Amendment of Plan. The Board at any time, and from time to time, may amend or terminate the Plan. However, except as provided in Section 14 relating to adjustments upon changes in Common Stock and Section 16.3, no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary to satisfy any Applicable Laws. At the time of such amendment, the Board shall determine, upon advice from counsel, whether such amendment will be contingent on shareholder approval. 16.2 Shareholder Approval. The Board may, in its sole discretion, submit any other amendment to the Plan for shareholder approval. 16.3 Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees and Directors with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options or to the nonqualified deferred compensation provisions of Section 409A of the Code and/or to bring the Plan and/or Awards granted under it into compliance therewith. 16.4 No Impairment of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing. 16.5 Amendment of Awards. The Committee at any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that the Committee may not affect any amendment which would otherwise constitute an impairment of the rights under any Award unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing. 17. General Provisions. 17.1 Forfeiture Events. The Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events, in addition to applicable vesting conditions of an Award. Such events may include, without limitation, breach of non-competition, non-solicitation, confidentiality, or other restrictive covenants that are contained in the Award Agreement or otherwise applicable to the Participant, a termination of the Participant’s Continuous Service for Cause, or other conduct by the Participant that is detrimental to the business or reputation of the Company and/or its Affiliates. 17.2 Clawback. Notwithstanding any other provisions in this Plan, the Company may cancel any Award, require reimbursement of any Award by a Participant, and effect any other right of recoupment of equity or other compensation provided under the Plan in accordance with any Company policies that may be adopted and/or modified from time to time (“Clawback Policy”). In addition, a Participant may be required to repay to the Company previously paid compensation, whether provided pursuant to the Plan or an Award Agreement, in accordance with the Clawback Policy. By accepting an Award, the Participant is agreeing to be bound by the Clawback Policy, as in effect or as may be adopted and/or modified from time to time by the Company in its discretion (including, without limitation, to comply with applicable law or stock exchange listing requirements). 17.3 Other Compensation Arrangements. Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases. 17.4 Unfunded Plan. The Plan shall be unfunded. Neither the Company, the Board nor the Committee shall be required to establish any special or separate fund or to segregate any assets to assure the performance of its obligations under the Plan. 17.5 Recapitalizations. Each Award Agreement shall contain provisions required to reflect the provisions of Section 14. B-16 17.6 Delivery. Upon exercise of a right granted under this Plan, the Company shall issue Common Stock or pay any amounts due within a reasonable period of time thereafter. Subject to any statutory or regulatory obligations the Company may otherwise have, for purposes of this Plan, 30 days shall be considered a reasonable period of time. 17.7 No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional shares of Common Stock or whether any fractional shares should be rounded, forfeited or otherwise eliminated. 17.8 Other Provisions. The Award Agreements authorized under the Plan may contain such other provisions not inconsistent with this Plan, including, without limitation, restrictions upon the exercise of Awards, as the Committee may deem advisable. 17.9 Section 409A. The Plan is intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered to be in compliance therewith. Any payments described in the Plan that are due within the “short-term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following the Participant’s termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the Participant’s separation from service (or the Participant’s death, if earlier). Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any additional tax or penalty on any Participant under Section 409A of the Code and neither the Company nor the Committee will have any liability to any Participant for such tax or penalty. 17.10 Disqualifying Dispositions. Any Participant who shall make a “disposition” (as defined in Section 424 of the Code) of all or any portion of shares of Common Stock acquired upon exercise of an Incentive Stock Option within two years from the Grant Date of such Incentive Stock Option or within one year after the issuance of the shares of Common Stock acquired upon exercise of such Incentive Stock Option (a “Disqualifying Disposition”) shall be required to immediately advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such shares of Common Stock. 17.11 Section 16. It is the intent of the Company that the Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3 as promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3, or any other rule promulgated under Section 16 of the Exchange Act, and will not be subject to short-swing liability under Section 16 of the Exchange Act. Accordingly, if the operation of any provision of the Plan would conflict with the intent expressed in this Section 17.12, such provision to the extent possible shall be interpreted and/or deemed amended so as to avoid such conflict. 17.12 Beneficiary Designation. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries by whom any right under the Plan is to be exercised in case of such Participant’s death. Each designation will revoke all prior designations by the same Participant, shall be in a form reasonably prescribed by the Committee and shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. 17.13 Expenses. The costs of administering the Plan shall be paid by the Company. 17.14 Severability. If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part, such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining provisions shall not be affected thereby. 17.15 Plan Headings. The headings in the Plan are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof. B-17 17.16 Non-Uniform Treatment. The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among persons who are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform and selective determinations, amendments and adjustments, and to enter into non-uniform and selective Award Agreements. 18. Effective Date of Plan. The Plan shall become effective as of the Effective Date, but no Award shall be exercised (or, in the case of a stock Award, shall be granted) unless and until the Plan has been approved by the shareholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board. 19. Termination or Suspension of the Plan. The Plan shall terminate automatically on the tenth anniversary of the date the Plan is approved by the shareholders of the Company. No Award shall be granted pursuant to the Plan after such date, but Awards theretofore granted may extend beyond that date. The Board may suspend or terminate the Plan at any earlier date pursuant to Section 16.1 hereof. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated. 20. Choice of Law. The law of the State of
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Elma, New York
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