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RCM (RCMT)

Filed: 12 Nov 21, 4:16pm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No.    )

 

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RCM TECHNOLOGIES, INC.

(Name of Registrant as Specified In Its Charter)

 
 

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logo.jpg

RCM Technologies, Inc.

Tel: 856.356.4500

2500 McClellan Avenue

Fax: 856.356.4600

Pennsauken, NJ 08109

www.rcmt.com

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 16, 2021

 

To Our Stockholders:

 

The RCM Technologies, Inc. 2021 Annual Meeting of Stockholders will be held on Thursday, December 16, 2021, at 4:00 p.m. Eastern time. In light of the challenges posed by the COVID-19 outbreak and governmental decrees regarding in-person gatherings, and in the best interests of public health and the health and safety of our stockholders, employees and Board of Directors, this year’s annual meeting will be a virtual meeting via live webcast on the Internet. You will be able to attend, vote and submit your questions during the live webcast of the meeting by visiting https://web.lumiagm.com/204238937 and entering password: rcm2021.

 

The purposes of the meeting are to:

 

 

1.

Elect five directors to hold office until the Annual Meeting of Stockholders to be held in 2022 and until their successors are duly elected and qualified;

 

2.

Consider and approve amendments to the RCM Technologies, Inc. 2001 Employee Stock Purchase Plan;

 

3.

Ratify our Audit Committee’s selection of Macias, Gini & O’Connell LLP as our independent accountants for our fiscal year ending January 1, 2022;

 

4.

Conduct an advisory vote to approve the compensation of our named executive officers for 2020; and

 

5.

Transact such other business as may properly come before the meeting or any adjournment(s) of the meeting.

 

We have fixed October 20, 2021 as the record date for determining the stockholders entitled to vote at the meeting. You are not entitled to notice of, or to vote at, the meeting if you were not a stockholder of record at the close of business on that date.

 

You are cordially invited to attend the meeting (on a virtual basis, which will be the only means of attending this year’s meeting). Whether or not you expect to attend the meeting, please sign, date and promptly return the enclosed proxy to ensure that your shares will be represented at the meeting. The enclosed envelope requires no postage if mailed within the United States. Most of our stockholders hold their shares in “street name” through brokers, banks and other nominees and may choose to vote their shares by telephone instead of using the enclosed proxy card. If you wish to vote by telephone, please follow the instructions on your proxy card. If you attend the meeting, you may revoke your proxy and vote in person.

 

By Order of the Board of Directors,

 

rcmt20201030_def14aimg002.jpg

Kevin D. Miller
Secretary

 

Pennsauken, New Jersey
November 11, 2021

 

 

 

RCM TECHNOLOGIES, INC.

2500 McClellan Avenue
Suite 350
Pennsauken, New Jersey 08109

________________________________

PROXY STATEMENT
________________________________

ANNUAL MEETING OF STOCKHOLDERS

DECEMBER 16, 2021

 

About this Proxy Statement

 

Our Board of Directors is soliciting proxies to be used at our 2021 Annual Meeting of Stockholders. The meeting will be a virtual meeting on Thursday, December 16, 2021, at 4:00 p.m. Eastern time. This proxy statement, the notice of annual meeting and the form of proxy will be mailed to stockholders beginning on or about November 11, 2021.

 

VOTING PROCEDURES

 

Who Can Vote

 

Only RCM common stockholders at the close of business on the record date, October 20, 2021, may vote at the annual meeting. You are entitled to cast one vote for each share of RCM common stock that you owned as of the close of business on the record date. At the close of business on the record date, there were 10,702,734 shares of RCM common stock outstanding.

 

How You Can Vote

 

You can vote by:

 

•      marking your proxy card, dating and signing it, and returning it in the postage-paid envelope we have provided,

•      phoning in your vote using the information provided on your voting form, or

•      attending the meeting and voting on line during the meeting; registered holders and beneficial owners with shares held in street name (held in the name of a broker or other nominee) may vote online at the meeting by visiting the following Internet website: https://web.lumiagm.com/204238937, entering password: rcm2021, and providing the 11-digit control number included in the notice of annual meeting, on their proxy card or on the instructions that accompanied the proxy materials. Beneficial owners with shares held in street name must obtain a legal proxy from their broker or other nominee to vote online at the meeting.

 

 

 

 

How You Can Revoke Your Proxy or Change Your Vote

 

You can revoke your proxy at any time before it is voted at the meeting by:

 

•     sending a written notice that you have revoked your proxy to our Secretary, Kevin D. Miller, at 2500 McClellan Avenue, Suite 350, Pennsauken, New Jersey 08109-4613,

•     submitting a later-dated proxy card, or

•     attending the meeting and voting on line in accordance with the process set forth above.

 

If a bank, broker or other holder of record holds your shares in its name, you must obtain a proxy card executed in your favor from the holder of record to be able to vote your shares at the meeting.

 

General Information on Voting

 

A quorum must exist for voting to take place at the meeting. A quorum exists if holders of a majority of the outstanding shares of our common stock are present at the meeting in person or are represented by proxy at the meeting.

 

Director nominees are elected by a majority vote, meaning that a nominee for director is elected only if he or she receives the affirmative vote of a majority of the total votes cast for and against such nominee. All other matters to be voted upon at the meeting must be approved by a majority of the votes cast on those matters.

 

Shares represented by a proxy marked “abstain” on any matter will be considered present at the meeting for purposes of determining whether there is a quorum but will not be considered as votes cast on that matter. Shares represented by a proxy as to which there is a “broker non-vote” (that is, where a broker holding your shares in “street” or “nominee” name indicates to us on a proxy that you have given the broker the discretionary authority to vote your shares on some but not all matters), will be considered present at the meeting for purposes of determining a quorum but will not be considered as votes cast on matters as to which there is a “broker non-vote.” Abstentions and “broker non-votes” will therefore have no effect on the outcome of any vote taken at the meeting.

 

Shares that have been properly voted and not revoked will be voted at the meeting in accordance with the instructions on your proxy card. If you sign your proxy card but do not mark your choices, Bradley S. Vizi or Kevin D. Miller, the persons named on the enclosed proxy card, will vote the shares represented by your proxy card:

 

 

FOR the persons we nominated for election as directors (Proposal No. 1);

 

FOR approval of amendments to the RCM Technologies, Inc. 2001 Employee Stock Purchase Plan (Proposal No. 2); and

 

FOR the ratification of our Audit Committee’s selection of Macias, Gini & O’Connell LLP as our independent accountants for our fiscal year ending January 1, 2022 (Proposal No. 3); and

 

FOR approval of an advisory resolution approving the compensation of our named executive officers for 2020 (Proposal No. 4).

 

If any other matters are properly presented at the meeting for consideration, Mr. Vizi and Mr. Miller will have the discretion to vote on those matters for you. Currently, we are not aware of any such matters.

 

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Costs of Solicitation

 

We will pay for preparing, assembling and mailing this proxy statement. Our directors, officers and employees may solicit proxies through the mail, direct communication or otherwise. None of our directors, officers or employees will receive additional compensation for soliciting proxies. We may reimburse brokerage firms and other custodians, nominees or fiduciaries for their reasonable expenses for forwarding proxy and solicitation materials to stockholders.

 

Instructions to Attend the Meeting

 

Record Holders: If you were a holder of record of common stock of RCM at the close of business on October 20, 2021 (i.e. your shares are held in your own name in the records of RCM’s transfer agent, American Stock Transfer & Trust Company, LLC (AST)), you can attend the meeting by visiting https://web.lumiagm.com/204238937 and entering the 11-digit control number previously provided to you in your proxy materials. The password for the virtual meeting is rcm2021. If you are a shareholder of record and you have misplaced your 11-digit control number, please call AST at (877) 773-6772.

 

Beneficial Owners: If you were a beneficial owner of common stock of RCM at the close of business on October 20, 2021 (i.e. you hold your shares in “street name” through an intermediary, such as a bank, broker or other nominee), you must register in advance in order to attend the meeting. To register, please obtain a legal proxy from the bank, broker or other nominee that is the record holder of your shares and then submit the legal proxy, along with your name and email address, to AST to receive an 11-digit control number that may be used to access the virtual meeting site provided above. Any control number that was previously provided with your proxy materials, likely a 16-digit number, will not provide access to the virtual meeting site. Requests for registration and submission of legal proxies should be labeled as “Legal Proxy” and must be received by AST no later than 5 p.m., Eastern Time, on December 10, 2021. All such requests should be submitted (1) by email to proxy@astfinancial.com, (2) by facsimile to (718) 765-8730 or (3) by mail to American Stock Transfer & Trust Company, LLC, Attn: Proxy Tabulation Department, 6201 15th Avenue, Brooklyn, NY 11219. Obtaining a legal proxy may take several days and shareholders are advised to register as far in advance as possible. Once you have obtained your 11-digit control number from AST, please follow the steps set forth above for shareholders of record to attend the meeting. 

 

Important Notice Regarding the Availability of

Proxy Materials for the Annual Meeting of Stockholders to be Held on December 16, 2021

 

This proxy statement and our 2020 annual report to stockholders are available at

 

http://www.astproxyportal.com/ast/08117/

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT

 

Security Ownership of Certain Beneficial Owners

 

The following table lists the persons we know to be beneficial owners of at least five percent of our common stock as of October 28, 2021.

 

 

 

 

Name and Address of Beneficial Owner

 

 

Number

of Shares

Approximate
Percentage
of Outstanding
Common Stock(1)

   

Dimensional Fund Advisors LP(2)         

568,954

5.4%

  Building One

  

  6300 Bee Cave Road

  

  Austin, TX 78746

  
   

Renaissance Technologies LLC(3)         

678,081

6.4%

800 Third Avenue

  

New York, NY 10022

  

(1)         Based on 10,630,108 shares outstanding as of October 28, 2021.

(2)         Based on the Amendment No. 20 to Schedule 13G filed with the Commission on February 16, 2021. The filing states that Dimensional Fund Advisors LP, a registered investment advisor, has sole dispositive power over 568,954 shares and sole voting power of 565,600 shares.

(3)         Based on the Amendment No. 4 to Schedule 13G filed with the Commission on February 11, 2021. The filing states that Renaissance Technologies LLC sole dispositive power over 678,081 shares and sole voting power of 673,981 shares.

 

 

- 4 -

 

 

Security Ownership of Management

 

The following table lists the number of shares of our common stock beneficially owned, as of October 28, 2021, by each director and director nominee, each of our executive officers, certain members of our senior management, and by our directors, nominees and executive officers as a group. In general, beneficial ownership includes those shares a person has the power to vote or transfer, as well as shares owned by immediate family members who live with that person.

 

 

 

 

Name

 

 

Number

of Shares

 

Approximate
Percentage
of Outstanding
Common Stock(1)

Bradley S. Vizi(2)

1,317,026

 

12.2%

Roger H. Ballou(3)

215,693

 

2.0%

Richard A. Genovese(4)

54,599

 

*

Swarna Srinivas Kakodkar(5)

42,631

 

*

Jayanth S. Komarneni(6)

47,523

 

*

Kevin D. Miller(7)

743,590

 

6.9%

Michael Saks

107,843

 

1.0%

Frank Petraglia(8)

58,277

 

*

All directors and executive officers as a group (8 persons)

2,587,182

 

23.9%

__________

*         Represents less than one percent of our outstanding common stock.

 

(1)         Based on 10,630,108 shares outstanding as of October 28, 2021.

(2)         Includes 24,032 shares that will vest biweekly through December 31, 2021.

(3)         Includes 26,786 shares that will vest on December 18, 2021.

(4)         Includes 26,786 shares that will vest on December 18, 2021.

(5)         Includes 26,786 shares that will vest on December 18, 2021.

(6)         Includes 47,523 shares that will vest through December 31, 2021.

(7)         Includes 24,032 shares that will vest biweekly through December 31, 2021.

(8)         Includes 12,500 shares that vested on November 2, 2021.

 

 

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PROPOSAL 1
___________________________

ELECTION OF DIRECTORS

 

Stockholders are being asked to elect five (5) directors at the Annual Meeting, each to serve until his or her successor is duly elected at the 2022 annual meeting and qualified. Your Board has nominated for election as director Bradley S. Vizi, Roger H. Ballou, Richard A. Genovese, Swarna Srinivas Kakodkar and Jayanth S. Komarneni.

 

Ms. Srinivas Kakodkar and Messrs. Vizi, Ballou, Genovese and Komarneni have consented to serve a term on our Board of Directors, and the persons named as proxy holders on the enclosed proxy card, Mr. Vizi and Mr. Miller, intend to vote FOR the election of Ms. Srinivas Kakodkar and Messrs. Vizi, Ballou, Genovese and Komarneni unless you mark a contrary instruction on your proxy card. Unless you indicate otherwise on your proxy card, if any of Ms. Srinivas Kakodkar or Messrs. Vizi, Ballou, Genovese and Komarneni is unable to serve as a director at the time of the Annual Meeting, Mr. Vizi or Mr. Miller will vote FOR the election of another person that the Board may nominate in their place.

 

Set forth below are brief descriptions of the nominees for election as director and of the continuing directors. The descriptions for the directors set forth the experience, qualifications, attributes and skills that have led the Board’s Nominating and Governance Committee and the Board to conclude that these individuals should serve as directors.

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF BRADLEY S. VIZI, ROGER H. BALLOU, RICHARD A. GENOVESE, SWARNA SRINIVAS KAKODKAR AND JAYANTH S. KOMARNENI AS MEMBERS OF OUR BOARD OF DIRECTORS.

 

Nominees for Election as Directors

 

Bradley S. Vizi, Director since 2013, age 37

 

Mr. Vizi has served as our Executive Chairman & President since June 2018.  Previously Mr. Vizi served as our Chairman of the Board since September 2015 and a board member since December 2013. Since February 2016, Mr. Vizi has served as a member of the Board of Directors at L.B. Foster (NASDAQ: FSTR), a leading manufacturer, fabricator, and distributor of products and services for the rail, construction, energy and utility markets with locations in North America and Europe.  Mr. Vizi founded Legion Partners, Inc. in 2010 and Legion Partners Asset Management, LLC in 2012, where he served as Managing Director and Portfolio Manager until October 2017.  From 2007 to 2010, Mr. Vizi was an investment professional at Shamrock Capital Advisors, Inc. (“Shamrock”), the alternative investment vehicle of the Disney Family.  Prior to Shamrock, from 2006 to 2007, Mr. Vizi was an investment professional with the private equity group at Kayne Anderson Capital Advisors L.P. Mr. Vizi is a CFA Charterholder and graduated from the Wharton School at the University of Pennsylvania.

 

Mr. Vizi’s significant public company experience is particularly valuable in the areas of strategy, capital allocation, compensation planning, corporate governance and marketing the Company to the investment community.

 

 

- 6 -

 

 

Nominees for Election as Directors (Continued)

 

Roger H. Ballou, Director since 2013, age 70

 

Mr. Ballou currently serves as a director of Univest Financial Corporation of Pennsylvania (NASDAQ: UVSP), a Pennsylvania bank, and as Chairman of Alliance Data Systems Corporation (NYSE: ADS), a provider of transaction-based, data-driven marketing and loyalty solutions.  Until July 2016, Mr. Ballou served as Chairman of Fox Chase Bancorp, Inc. Mr. Ballou previously served as the Chief Executive Officer and a director of CDI Corporation, a company that offers engineering, information technology and professional staffing solutions, from 2001 until 2011. Mr. Ballou had served as Chairman and Chief Executive Officer of Global Vacation Group, Inc. from 1998 to 2000. He was a senior advisor for Thayer Capital Partners from 1997 to 1998. From 1995 to 1997, Mr. Ballou served as Vice-Chairman and Chief Marketing Officer, then as President and Chief Operating Officer, of Alamo Rent A Car, Inc.  Before joining Alamo, for more than 16 years, he held several positions with American Express, culminating in his appointment as President of the Travel Services Group. Mr. Ballou has a Bachelor of Science in Economics from the Wharton School at the University of Pennsylvania and an MBA from the Amos Tuck School at Dartmouth College.

 

Mr. Ballou’s extensive public board and executive management experience and personal knowledge of the Company’s business segments, in particular its Engineering and Information Technology segments, allow him to make significant contributions in all facets of the business.

 

Richard A. Genovese, Director since 2018, age 67

 

Mr. Genovese is currently engaged in private equity consultation roles related to turnaround and asset acquisition and disposition activities.  Mr. Genovese served as Executive Chairman for Complia Health/Develus Systems from July 2017 thru December 2019 at which time a disposition of the company occurred and Mr. Genovese exited this role. Mr. Genovese was requested to and rejoined the Board of Complia Health in January 2021. Mr. Genovese served as the Chief Operating Officer and Executive Vice President of CIBER, Inc. from February 2012 to January 2014 and as its Executive Vice President of North American Operations from September 2011 to February 2012.  Prior to joining CIBER, Mr. Genovese worked at various technology and consulting leaders including IBM, Price Waterhouse Coopers (PWC) and Electronic Data Systems (EDS). At IBM, he served as General Manager of Application Services for the Americas, the largest offering group within IBM’s Global Business Services. Prior to that, he was General Manager of the IBM Business Process Outsourcing practice for the Americas and also Managing Partner for the Global Business Services Communications sector. He joined IBM through its acquisition of PWC in 2002, where he was Managing Partner of Business Process Outsourcing for the Americas, and Managing Partner for the Global Energy Consulting Practice. At PWC, Mr. Genovese was admitted as a partner in 1990. He began his career at EDS, where he was a principal. Mr. Genovese has a Bachelor of Business Administration with a concentration in Finance and Accounting from Loyola University.

 

Mr. Genovese’s extensive experience in senior operating and financial roles provides direct relevance to the day to day issues facing the Company. Additionally, his skills base founded in information technology services and human capital management is directly relevant to the Company’s performance criteria.

 

 

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Nominees for Election as Directors (Continued)

 

Swarna Srinivas Kakodkar, Director since 2019, age 38

 

Ms. Kakodkar is a seasoned technology executive with over 15 years of experience building organizations that develop high-impact software to serve enterprises, developers, and consumers.  Ms. Kakodkar currently leads a product management organization at Google.  She previously led product and technical teams at Amazon Web Services, where she launched services that touched millions of users.  Prior to that, she held various roles at Facebook, where she oversaw the development of digital advertising products and global partnerships with some of Facebook’s largest customers.  Prior to joining Facebook, Ms. Kakodkar worked at AOL Platforms, where she developed capital allocation strategies, managed M&A activity, and built technology partnership programs.  She chairs our Compensation Committee, serves on our Audit Committee, and serves on our Nominating/Governance Committee. She holds an M.B.A. from Harvard Business School and a B.A. from Harvard College.

 

Ms. Kakodkar’s extensive experience in digital marketing, financial modeling, enterprise software, implementation of new technologies, and management and retention of diverse employee groups, allow her to make valuable contributions to all of the Company’s business segments.

 

Jayanth S. Komarneni, age 38

 

Mr. Komarneni is the founder and chair of the Human Diagnosis Project, the world’s leading medical intelligence system. The Project brings together top national medical organizations (including the American Medical Association, the American Board of Medical Specialties, and the National Association of Community Health Centers), health systems (including research collaborations with Harvard, Johns Hopkins, UCSF, Stanford, and Kaiser Permanente), and financial supporters (including the MacArthur Foundation, the Gordon & Betty Moore Foundation, Union Square Ventures, and Andreessen Horowitz). Before founding the Project, Mr. Komarneni advised leadership at some of the world's preeminent organizations while working at McKinsey & Company and Bain & Company. Mr. Komarneni's work spanned stakeholders in the social, public, and private sectors, including foundations, governments, companies (in the life sciences, health care, technology, energy, and financial services industries), and alternative investment firms. After McKinsey and Bain, he helped launch and operate Greenoaks Capital Management, a global alternative investment firm, as its first employee. Mr. Komarneni also participated in Y Combinator, the world's leading technology accelerator. Mr. Komarneni has degrees that include an MSc in Global Health Science from the University of Oxford and an MBA from the Wharton School, and an MS in Biotechnology from the School of Engineering and Applied Science at the University of Pennsylvania.

 

Mr. Komarneni's prior background founding, advising, and working at leading organizations in the investment, professional services, life sciences, and technology industries helps him contribute across RCM's diverse business segments from strategic and operational perspectives.

 

 

- 8 -

 

 

OUR EXECUTIVE OFFICERS

 

The following table lists our executive officers. Our Board elects our executive officers annually for terms of one year and may remove any of our executive officers with or without cause.

 

Name

Age

Position

Bradley S. Vizi

37

Executive Chairman & President

Kevin D. Miller

55

Chief Financial Officer, Treasurer and Secretary

Frank Petraglia

65

Division President, Engineering Services

Michael Saks

65

Division President, Health Care Services

 

Bradley S. Vizi. See above.

 

Kevin D. Miller has served as our Chief Financial Officer, Secretary and Treasurer since October 2008. From July 1997 until September 2008, he was Senior Vice President of RCM. From 1996 until July 1997, Mr. Miller served as an Associate in the corporate finance department of Legg Mason Wood Walker, Incorporated. From 1995 to 1996, Mr. Miller was a business consultant for the Wharton Small Business Development Center. Mr. Miller previously served as a member of both the audit and corporate finance groups at Ernst & Young LLP. Mr. Miller has a Bachelor of Science in Accounting from The University of Delaware and a Masters in Business Administration with a concentration in Finance from the Wharton School at The University of Pennsylvania.

 

Frank Petraglia has served as our Division President of Engineering Services since June 2018. From December 2014 until June 2018 he was the Senior Vice President of our Energy Services Group. Prior to joining RCM, Mr. Petraglia spent the last ten years in leadership positions with Siemens Energy and Mitsubishi Electric Power Products. He has extensive experience with highly engineered systems, including serving as the Vice President of High Voltage Solutions for Siemens US and General Manager of the Substation Division for Mitsubishi. Mr. Petraglia has a Bachelor of Science in Electrical Engineering from The University of Pittsburgh.

 

Michael Saks has served as our Division President of Health Care Services since June 2018. From May 2007 to June 2018 he was the Senior Vice President and General Manager of our Health Care Services Division. From January 1994 until May 2007 he was the Vice President and GM of our Health Care Services Division. Prior to joining RCM, Mr. Saks served as a corporate executive at MS Executive Resources, MA Management and Group 4 Executive Search. Mr. Saks has over 31 years of executive management, sales and recruiting experience. Mr. Saks has a Bachelor of Science in Accounting and Finance from Fairleigh Dickinson University.

 

 

- 9 -

 

 

EXECUTIVE COMPENSATION

 

The Compensation Committee of the Board has responsibility for establishing, implementing and continually monitoring adherence with the Company’s compensation philosophy. The Compensation Committee seeks to ensure that the total compensation paid to the executives is fair, reasonable and competitive. Generally, the types of compensation and benefits provided to our executives, including the named executive officers, are similar to those provided to other executive officers. Our named executive officers for fiscal 2020 are Messrs. Vizi, Saks and Miller.

 

As part of our ongoing effort to better align our leadership, corporate governance structure and compensation methodologies with the interests and perspectives of our stockholders, members of our Board of Directors and management team periodically speak with many of our more significant stockholders. Mindful of the input of these stockholders and motivated by our commitment to the implementation of best practices in corporate governance and compensation, the Compensation Committee and our Board have undertaken over the last several years a series of efforts with respect to compensation reform, including the following steps:

 

 

Limiting executive severance cash pay-outs to no more than 24 months’ base salary and bonus;

 

Prohibiting tax gross-ups in all future employment agreements;

 

Requiring future employment agreements to contain a “double trigger” with respect to executive change-in-control payments;

 

Adopting an incentive payment claw back policy for named executive officers; and

 

Developed the conceptual framework for a long term incentive plan containing performance-based stock units for the Company’s Chief Executive Officer and Chief Financial Officer.

 

On January 16, 2020, the Compensation Committee granted to Mr. Vizi a total of 150,000 restricted stock units (RSUs), vesting in three (3) equal annual installments of 50,000 RSUs on each anniversary of the date of grant, so long as Mr. Vizi remains continuously employed by the Company through such vesting dates, provided that vesting would be accelerated if his employment terminates before such vesting dates on account of death, disability or a covered termination following a change in control. Due to the impact from COVID-19 and the uncertain nature of expected results, incentive performance targets for Mr. Vizi were not established during fiscal 2020. In January 2021, the Compensation Committee awarded Mr. Vizi 125,000 shares of our common stock in recognition of various qualitative and financial accomplishments in fiscal 2020. While this grant was made in recognition of his service in 2020, in accordance with applicable regulations of the Commission, its value is not included in the Summary Compensation Table with respect to the fiscal year ended January 2, 2021, since the grant date of the award occurred after that fiscal year. As such, its grant date fair value ($271,250) will appear in the future Summary Compensation Table for the year ending January 1, 2022.

 

Similarly, due to the impact from COVID-19 and the uncertain nature of expected results, incentive performance targets for Messrs. Saks and Miller were not established during fiscal 2020. In March 2021, the Compensation Committee awarded each of Messrs. Saks and Miller a cash bonus of $75,000 in recognition of various qualitative and financial accomplishments in fiscal 2020. These bonuses are reflected in the Summary Compensation Table with respect to the fiscal year ended January 2, 2021, in accordance with applicable regulations of the Commission.

 

 

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Summary Compensation Table

 

The following table lists, for our fiscal years ended January 2, 2021 and December 28, 2019, cash and other compensation paid to, or accrued by us, for our chief executive officer and each of the persons who, based upon total annual salary, annual incentive compensation and bonus, was one of our other two most highly compensated executives during the fiscal year ended January 2, 2021.

 

Name and

Principal Position

Year

Salary

 

 

Bonus(1)

 

Stock

Awards(1)

Non-Equity

Incentive Plan

Compensation

All Other

Compensation(2)

Total

        

Bradley S. Vizi         

2020

$250,000

$ -

$423,000

$ -

$5,411

$678,411

Executive Chairman & President

2019

$250,000

$ -

$175,200

$ -

$4,890

$430,090

        

Michael Saks         

2020

$275,000

$75,000

$15,500

$ -

$11,960

$377,460

President, Health Care Services

2019

$275,000

$ -

$ -

$229,678

$20,547

$525,225

        

Kevin Miller          

2020

$370,000

$75,000

$ -

$ -

$17,682

$462,682

Chief Financial Officer

2019

$370,000

$ -

$ -

$ -

$36,832

$406,832

____________

 

 

(1)

On January 16, 2020, the Compensation Committee granted to Mr. Vizi a total of 150,000 restricted stock units (RSUs), vesting in three (3) equal annual installments of 50,000 RSUs on each anniversary of the date of grant. Mr. Vizi vested in 40,000 shares in January 2020, pursuant to a performance-based stock award based on fiscal 2019 performance metrics granted on March 6, 2019. Mr. Saks was granted 10,000 shares on August 3, 2020 with a vesting date of August 2, 2023. These amounts are based upon the grant date fair value of the awards calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 718. The assumptions used in determining the amounts in the column are set forth in Note 11 to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 2, 2021 filed with the Commission.

 

 

(2)

This amount represents premiums we paid during 2020 for medical, dental, vision, life and disability insurance on each of the officers named in this table.

 

During our 2020 and 2019 fiscal years, certain of the officers named in this table received personal benefits not reflected in the amounts of their respective annual salaries or bonuses. The dollar amount of these benefits did not, for any individual in any fiscal year, exceed $10,000.

 

 

- 11 -

 

 

Outstanding Equity Awards at Fiscal Year-End

 

The following table sets forth information concerning unvested restricted share units as of January 2, 2021. No options to purchase common stock were outstanding on such date.

 

  

 

 

 

 

 

Number of

Shares or

Units of

Stock

That Have

 

 

 

 

 

 

Market Value of

Shares or

Units of

Stock

That Have

 

 

Equity

Incentive

Plan Awards:

Number of

Unearned

Shares,

Units or

Other Rights

That Have

 

Equity

Incentive

Plan Awards:

Market or

Payout Value

of Unearned

Shares,

Units or

Other Rights

That Have

Name

 

Not Vested

 

Not Vested(1)

 

Not Vested(2)

 

Not Vested(1)

         

Bradley S. Vizi         

 

275,000

 

$569,250

 

-

 

-

         

Michael Saks         

 

10,000

 

$20,700

 

-

 

-

         

Kevin Miller         

 

125,000

 

$258,750

 

-

 

-

____________

 

 

(1)

Calculated by multiplying the number of shares in the preceding column by $2.07, the closing price per share of the Company’s common stock on December 31, 2020, the last trading day of our last fiscal year.

 

(2)

Mr. Vizi’s shares include 150,000 restricted stock units (RSUs) granted on January 16, 2020, which will become vested in three (3) equal annual installments of 50,000 RSUs on each anniversary of the grant date. On December 17, 2020, Mr. Vizi and Mr. Miller were each granted 125,000 restricted share awards in return for the agreement to reduce their base salary, dollar for dollar, for 2021. Such restricted shares will vest in equal installments of approximately 4,808 shares on each twenty-six bi-weekly payroll dates of RCM, commencing on January 15, 2021 and continuing until December 31, 2021, so long as such individual remains continuously employed by RCM through such date, except vesting will be accelerated if there is a Change in Control (as defined in the Plan).

 

 

 

- 12 -

 

 

Compensation of Directors

 

Our employee directors do not receive any compensation for serving on our Board or its committees, other than the compensation they receive for serving as employees of RCM.

 

Non-employee members of the Board received compensation in accordance with the following structure, which was approved by our Compensation Committee on, and implemented effective, January 1, 2018:

 

 

Annual cash retainer of $45,000, payable in equal monthly installments.

 

No meeting fees.

 

Annual equity grants of $45,000, in the form of RSUs with 1-year vesting feature (subject to acceleration upon Change in Control or separation from service in the same manner as the RSU grants made in December 2017), with delivery of the shares of common stock underlying to such RSUs to be made upon vesting; provided that, except for sales of shares in an amount no greater than required to generate an amount equal to the income tax on such shares, non-employee directors shall be required to retain shares delivered upon vesting unless, immediately following any such sale, such director would comply with the Company’s ownership guidelines.

 

Payment of the following additional annual retainers: Chairman of the Board (if independent) $25,000; Lead Independent Director $25,000 (who shall serve only at such time as the Board does not have an independent chair); Audit Committee chair $10,000; Compensation Committee chair $10,000; Nominating and Corporate Governance Committee chair $5,000.

 

No other committee fees, for service or for meetings.

 

The following table lists cash and other compensation paid to, or accrued by us for, our Board of Directors for our fiscal year ended January 2, 2021.

 

 

- 13 -

 

 

Non-Employee Director Compensation Table

 

Name and

Principal Position

Fees

Earned

Or Paid

In Cash

 

 

Equity

Awards(1)

All Other

Compensation

Total

Roger H. Ballou

$39,624

$45,000

-

$84,624

Richard A. Genovese

$25,188

$45,000

-

$70,188

Swarna Srinivas Kakodkar

$22,876

$45,000

-

$67,876

Jayanth S. Komarneni(2)

-

$45,000

-

$45,000

Leon Kopyt(3)

$20,806

-

-

$20,806

S. Gary Snodgrass(4)

$25,430

-

-

$25,430

 

 

(1)

These amounts are based upon the grant date fair value of the option awards calculated in accordance with ASC Topic 718. The assumptions used in determining the amounts in the column are set forth in Note 11 to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended January 2, 2021 filed with the Commission. As of January 2, 2021, Mr. Ballou, Mr. Genovese, Ms. Srinivas Kakodkar and Mr. Komarneni each had 26,786 unvested restricted share units outstanding.

 

(2)

Mr. Komarneni was elected to the Board on December 17, 2020.

 

(3)

Mr. Kopyt retired from the Board on December 17, 2020.

 

(4)

Mr. Snodgrass retired from the Board on December 17, 2020.

 

Executive Severance Agreement and Change in Control Agreement

 

The Company is a party to Executive Severance Agreements (the “Executive Severance Agreements”) with Mr. Vizi, dated as of June 1, 2018, and Mr. Miller, dated as of February 28, 2014, which set forth the terms and conditions of certain payments to be made by the Company to the executive in the event, while employed by the Company, the executive experiences (a) a termination of employment unrelated to a “Change in Control” (as defined therein) or (b) there occurs a Change in Control and either (i) the executive’s employment is terminated for a reason related to the Change in Control or (ii) in the case of Mr. Miller, Mr. Miller the executive remains continuously employed with the Company for three months following the Change in Control.

 

Under the terms of the Executive Severance Agreement, if either (a) the executive is involuntarily terminated by the Company for any reason other than “Cause” (as defined therein), “Disability” (as defined therein) or death, or (b) the executive resigns for “Good Reason” (as defined therein), and, in each case, the termination is not a “Termination Related to a Change in Control” (as defined below), the executive will receive the following severance payments: (i) an amount equal to 1.5 times the sum of (a) the executive’s annual base salary as in effect immediately prior to the termination date (before taking into account any reduction that constitutes Good Reason) (“Annual Base Salary”) and (b) the highest annual bonus paid to the executive in any of the three fiscal years immediately preceding the executive’s termination date (“Bonus”), to be paid in installments over the twelve month period following the executive’s termination date; and (ii) for a period of eighteen months following the executive’s termination date, a monthly payment equal to the monthly COBRA premium that the executive is required to pay to continue medical, vision, and dental coverage, for himself and, where applicable, his spouse and eligible dependents.

 

 

- 14 -

 

 

Executive Severance Agreement and Change in Control Agreement (Continued)

 

Notwithstanding the above, if the executive has a termination as described above and can reasonably demonstrate that such termination would constitute a Termination Related to a Change in Control, and a Change in Control occurs within 120 days following the executive’s termination date, the executive will be entitled to receive the payments set forth below for a Termination Related to a Change in Control, less any amounts already paid to the executive, upon consummation of the Change in Control.

 

Under the terms of the Executive Severance Agreement, if a Change in Control occurs and (a) the executive experiences a Termination Related to a Change in Control on account of (i) an involuntary termination by the Company for any reason other than Cause, death, or Disability, (ii) an involuntary termination by the Company within a specified period of time following a Change in Control (12 months for Mr. Vizi and three months for Mr. Miller) on account of Disability or death, or (iii) a resignation by the executive with Good Reason; or (b) in the case of Mr. Miller, the executive resigns, with or without Good Reason, which results in a termination date that is the last day of the three month period following the Change in Control, then the executive will receive the following severance payments: (1) a lump sum payment equal to two times the sum of the executive’s (a) Annual Base Salary and (b) Bonus; and (2) a lump sum payment equal to 24 multiplied by the monthly COBRA premium cost, as in effect immediately prior to the executive’s termination date, for the executive to continue medical, dental and vision coverage, as applicable, in such Company plans for himself and, if applicable, his spouse and eligible dependents. Upon the occurrence of a Change in Control, the Company shall establish an irrevocable rabbi trust and contribute to the rabbi trust the applicable amounts due under the Executive Severance Agreement. If Mr. Miller receives the Change in Control Payment following his resignation at the end of the three month period following the Change in Control, he will not be eligible to receive any severance payments under his Executive Severance Agreement.

 

Mr. Saks, along with several other members of the Company’s senior management (not including Mr. Vizi and Mr. Miller), is covered by our Change in Control Plan for Selected Executive Management (the “CIC Plan”).

 

The CIC Plan sets forth the terms and conditions of severance and benefits to be provided to a covered employee in the event (a) the covered employee experiences a covered termination of employment after a “Potential Change in Control” (as defined in the CIC Plan), but prior to a “Change in Control” (as defined in the CIC Plan), and a Change in Control that relates to the Potential Change in Control occurs within the six month period following the covered employee’s termination, or (b) the covered employee is employed by the Company on the date of a Change in Control. The CIC Plan also sets forth the terms and conditions of severance payments to be made to a covered employee in the event such employee is employed on the date of a Change in Control and is subsequently terminated on account of a covered termination during his “Designated Severance Period” (a period specified by the Company for each covered employee that is measured from the date of an applicable Change in Control, which is 18 months for Mr. Saks.

 

Under the terms of the CIC Plan, if a covered employee is (a) employed on the date of a Potential Change in Control, (b) terminated by the Company for a reason other than “Cause�� (as defined in the CIC Plan), death, or disability, and (c) a Change in Control to which the Potential Change in Control relates occurs within the six month period following the covered employee’s covered termination, the covered employee will receive, if the covered employee executes and does not revoke a release of claims, severance payments at the covered employee’s annual base salary rate in regular payroll installments for the duration of the covered employee’s Designated Severance Period. If the covered employee dies before receiving the entire amount that is owed, the remaining portion will be paid to the covered employee’s estate. Severance payments will be discontinued if it is determined that the covered employee has engaged in any actions constituting Cause.

 

 

- 15 -

 

 

Executive Severance Agreement and Change in Control Agreement (Continued)

 

Under the terms of the CIC Plan, if a covered employee is employed on the date of a Change in Control and the covered employee executes and does not revoke a release of claims:

 

 

all outstanding Company equity-based awards granted to the covered employee prior to the date of the Change in Control will be immediately fully vested;

 

the Compensation Committee may, in its sole discretion, determine that the covered employee will receive a pro-rated annual bonus if (a) the Committee determines that the Change in Control is an asset sale with respect to an entity in which the covered employee is associated, (b) the covered employee’s employment with the Company terminates in connection with such asset sale, and (c) the covered employee was eligible to participate in the Company’s annual bonus plan at the time of the Change in Control; any such pro-rated annual bonus will be determined based on the level of achievement under the annual bonus plan at the time of the Change in Control; and

 

the Committee may, in its sole discretion, determine that the covered employee will receive a discretionary bonus upon a Change in Control.

 

Any bonuses paid under the CIC Plan upon a Change in Control will be paid in a single lump sum following the Change in Control.

 

Under the terms of the Plan, if a covered employee’s employment with the “Employer” (as defined in the CIC Plan) is terminated during the covered employee’s Designated Severance Period following the occurrence of a Change in Control (a) by the Employer for any reason other than Cause, death, or disability, or (b) by the covered employee for “Good Reason” (as defined in the CIC Plan), and the covered employee executes and does not revoke a release of claims, the Employer will continue to pay to the covered employee his annual base salary in regular payroll installments for the remainder of the covered employee’s Designated Severance Period. A covered employee is not eligible for severance benefits from the Company after a Change in Control if the Change in Control is an asset sale with respect to the covered employee and the successor to the Company offers the covered employee employment with a level of compensation and benefits that in the aggregate are at least as favorable as the level of the covered employee’s compensation and benefits with the Company prior to the Change in Control. If the covered employee dies before receiving the entire amount that is owed, the remaining portion will be paid to the covered employee’s estate. Severance payments will be discontinued if the Employer determines that the covered employee has engaged in any actions constituting Cause.

 

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

 

We believe that, during our fiscal year ended January 2, 2021, our executive officers and directors made all required filings under Section 16(a) of the Securities Exchange Act on a timely basis. Our belief is based solely on:

 

 

our review of copies of forms filed pursuant to Section 16(a) and submitted to us during and with respect to our fiscal year ended January 2, 2021 and

 

representations from the Company’s directors, executive officers and beneficial owners of more than 10% of our Common Stock that they have complied with all Section 16(a) filing requirements with respect to 2020.

 

 

- 16 -

 

 

CORPORATE GOVERNANCE MATTERS

 

Commitment to Best Practices. As discussed above with respect to executive compensation, RCM’s leadership takes its fiduciary responsibility seriously and is similarly committed to the implementation of best practices in corporate governance. This has led to several developments in our corporate governance:

 

 

Communications with Stockholders: In an ongoing effort to better align its leadership, corporate governance structure and compensation methodologies with the interests and perspectives of its stockholders, during the last year members of our Board and management team have spoken with stockholders representing a majority of RCM’s ownership.

 

 

Robust Stock Ownership Guidelines: Our Board has adopted robust stock ownership guidelines, which require covered persons to have a stock ownership position in the Company in an amount no less than the applicable multiple of their base salary, by increasing the applicable multiples. The revised multiples are:

 

 

o

Chief Executive Officer – 6.0 times

 

o

Chief Financial Officer – 6.0 times

 

o

Executive Vice President – 2.0 times

 

o

Group Senior Vice President (where covered) – 2.0 times

 

o

Senior Vice President (where covered) – 2.0 times

 

o

Non-Employee Director – 5.0 times

 

 

Succession Planning: Our Board has engaged in succession planning during the past year and has identified potential successors for all of our executive officers and for the leaders of each of the Company’s major business units.

 

Board Independence. The Board of Directors has determined that Roger H. Ballou, Richard A. Genovese, Swarna Srinivas Kakodkar and Jayanth S. Komarneni are “independent directors” as defined in Marketplace Rule 4200(a)(15) of the NASDAQ Stock Market LLC. In this Proxy, these five directors are referred to individually as an “Independent Director” and collectively as the “Independent Directors.”

 

Stockholder Communications with the Board. Stockholders may send communications to the Board of Directors in writing, addressed to the full Board of Directors, individual directors or a specific committee of the Board of Directors, care of Kevin D. Miller, Secretary, RCM Technologies, Inc., 2500 McClellan Avenue, Suite 350, Pennsauken, New Jersey 08109. In general, all stockholder communications sent to our Secretary for forwarding to the Board of Directors, or to specified Board members, will be forwarded in accordance with the sender’s instructions. However, our Secretary reserves the right to not forward to Board members any abusive, threatening or otherwise inappropriate materials.

 

Director Attendance at Annual Meetings. The Company encourages all of the directors to attend the annual meeting of stockholders. The 2020 Annual Meeting of Stockholders was attended by all of our then current directors.

 

Code of Conduct and Code of Ethics. We have adopted a Code of Conduct applicable to all of our directors, officers and employees. In addition, we have adopted a Code of Ethics, within the meaning of applicable Commission rules, applicable to our Chief Executive Officer, Chief Financial Officer and Controller. If we make any amendments to either of these Codes (other than technical, administrative, or other non-substantive amendments), or waive (explicitly or implicitly) any provision of the Code of Ethics to the benefit of our Chief Executive Officer, Chief Financial Officer or Controller, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in the investor relations portion of our website at www.rcmt.com, or in a report on Form 8-K that we file with the Commission.

 

 

- 17 -

 

 

Related Party Transaction Approval Policy. Our Code of Conduct mandates that officers and directors bring promptly to the attention of our Compliance Officer, currently our Chief Financial Officer, any transaction or series of transactions that may result in a conflict of interest between that person and the Company. Furthermore, our Audit Committee must review and approve any “related party” transaction as defined in Item 404(a) of Regulation S-K, promulgated by the Securities and Exchange Commission, before it is consummated. Following any disclosure to our Compliance Officer, the Compliance Officer will then typically review with the Chairman of our Audit Committee the relevant facts disclosed by the officer or director in question. After this review, the Chairman of the Audit Committee and the Compliance Officer determine whether the matter should be brought to the Audit Committee or the full Board of Directors for approval. In considering any such transaction, the Audit Committee or the Board of Directors, as the case may be, will consider various relevant factors, including, among others, the reasoning for the Company to engage in the transaction, whether the terms of the transaction are at arm’s length and the overall fairness of the transaction to the Company. If a member of the Audit Committee or the Board is involved in the transaction, he or she will not participate in any of the discussions or decisions about the transaction. The transaction must be approved in advance whenever practicable, and if not practicable, must be ratified as promptly as practicable.

 

Risk Oversight by the Board. The role of our Board of Directors in our risk oversight process includes receiving regular reports from members of management on areas of material risk to us, including operational, financial, legal and strategic risks.

 

In particular, our Audit Committee is tasked pursuant to its charter to “discuss significant financial risk exposures and the steps management has taken to monitor, control and report such exposures.” As appropriate, the Chairman of the Audit Committee reports to the full Board of Directors on the activities of the Audit Committee in this regard, allowing the Audit Committee and the full Board to coordinate their risk oversight activities.

 

As one component of our risk oversight and anti-fraud program, our Audit Committee has established complaint reporting procedures described under “Compliance Policy” in the “Investors” section of our website at www.rcmt.com. These procedures indicate how to submit complaints to our Audit Committee regarding concerns about our accounting practices, our adherence to financial policies and procedures, or our compliance with the Sarbanes-Oxley Act of 2002. Once received, grievances are reviewed by the Chairman of the Audit Committee for consideration.

 

Board Leadership Structure. Our governance documents provide the Board with flexibility to select the appropriate leadership structure for the Company. In making leadership structure determinations, the Board may consider many factors, including the specific needs of our business and what is in the best interests of our stockholders. Our Chairman, or our Lead Independent Director if our Chairman is not independent: (i) presides at all meetings of the Board including presiding at executive sessions of the Board (without management present) at every regularly scheduled Board meeting, (ii) serves as a liaison between the management and the independent directors, (iii) approves meeting agendas, time schedules and other information provided to the Board, and (iv) is available for direct communication and consultation with major stockholders upon request. On June 1, 2018, in conjunction with Mr. Vizi’s appointment as Executive Chairman and President, Mr. Ballou was designated by the Company’s independent directors to serve as a Lead Independent Director.

 

 

- 18 -

 

 

BOARD MEETINGS AND COMMITTEES

 

Our Board of Directors has an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The committees report their actions to the full Board at the Board’s next regular meeting. The following table shows on which of our Board’s committees each of our directors serve as of November 11, 2021.

 

Our Board of Directors held ten meetings in the fiscal year ended January 2, 2021. The Company does not have a specific written policy with regard to attendance of directors at our annual meetings of stockholders, although board member attendance is strongly encouraged. Each of our directors serving during the last fiscal year attended at least 75% of the total number of meetings held by the Board and all committees on which the director served. At each meeting of the Board of Directors, there was an executive session attended only by the Independent Directors.

 

 

Committee

Board Member

Audit

Compensation

Nominating &

Corporate

Governance

Bradley S. Vizi          

   

Roger H. Ballou         

X

 

X

Richard A. Genovese         

X(1)

X

 

Swarna Srinivas Kakodkar          

X

X(1)

X

Jayanth S. Komarneni         

 

X

X(1)

____________

 

 

(1)

Chair

 

 

- 19 -

 

 

General Duties of Each Committee

 

The general duties of each committee are as follows:

 

Audit Committee

 

The Board of Directors has adopted a written Audit Committee Charter. A copy of the Audit Committee Charter is posted on our website under “Investor Relations - Corporate Governance.”         

 

 

Reviews our financial and accounting practices, controls and results, reviews the scope and services of our auditors and appoints our independent auditors.

 

Met five times during our fiscal year ended January 2, 2021.

 

See “Report of the Audit Committee” below.

 

Review and approve related parties transactions.

 

Compensation Committee

 

The Board of Directors has adopted a written Compensation Committee Charter. A copy of the Compensation Committee Charter is posted on our website under “Investor Relations - Corporate Governance.”         

 

 

Determines the compensation of our officers and employees.

 

Administers our stock option plans.

 

Met five times during our fiscal year ended January 2, 2021.

 

Nominating and Corporate Governance Committee

 

The Board of Directors has adopted a written Nominating and Corporate Governance Committee Charter. A copy of the Nominating and Corporate Governance Committee Charter is posted on our website under “Investor Relations - Corporate Governance.”         

 

 

Oversees the Board’s review and consideration of stockholder recommendations for Director candidates.

 

Oversees the Board’s annual self-evaluation.

 

Met one time during our fiscal year ended January 2, 2021.

 

Independence of Committees

 

The Board of Directors has determined each member of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee of the Board meets the independence requirements applicable to members of those committees as prescribed by the NASDAQ Stock Market, LLC, the Commission and the Internal Revenue Service. The Board of Directors has further determined that Roger H. Ballou, Chair of the Audit Committee, is an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K promulgated by the Commission.

 

 

- 20 -

 

Director Nominations

The Nominating and Corporate Governance Committee’s charter does not include formal requirements for the nominating process. The Nominating and Corporate Governance Committee believes that candidates for director should meet certain minimum qualifications, including being able to read and understand financial statements, having substantial business experience, having high moral character and personal integrity, and having sufficient time to attend to their duties and responsibilities to RCM. Exceptional candidates who do not meet all of these criteria may still be considered. The Nominating and Corporate Governance Committee will also consider the potential director’s independence, whether the member would be considered an “Audit Committee Financial Expert” as described in the applicable SEC standards, and the diversity that the potential director would add to the Board of Directors in terms of gender, ethnic background, and professional experience. With respect to their consideration of diversity of background, the Nominating and Corporate Governance Committee does not have a formal policy of assessing diversity with respect to any particular qualities or attributes.

The Nominating and Corporate Governance Committee identifies potential candidates through its members’ networks of contacts, by soliciting recommendations from other directors or executive officers, major stockholders and, as appropriate, engaging search firms to identify and screen suitable director nominees. After the Nominating and Corporate Governance Committee has identified a potential candidate, publicly available information about the person is collected and reviewed. If the Nominating and Corporate Governance Committee decides to further pursue the potential candidate after this initial review, contact is made with the person. If the potential candidate expresses a willingness to serve on the Board of Directors, interviews are conducted with the potential candidate and additional information is requested. Candidates are chosen by a majority vote of the members of the Nominating and Corporate Governance Committee for recommendation to the Board of Directors.

 

The Nominating and Corporate Governance Committee will consider stockholder recommendations for director candidates on the same basis as other candidates, provided that the following procedures are followed in submitting recommendations. All such stockholder recommendations for the 2021 meeting of stockholders should be submitted in writing to the attention of Kevin D. Miller, Secretary, RCM Technologies, Inc., 2500 McClellan Avenue, Suite 350, Pennsauken, New Jersey 08109 no earlier than August 18, 2022 and no later than September 17, 2022 and should be accompanied by (i) the potential candidate’s five-year employment history with employer names and a description of the employer’s business, the candidate’s experience with financial statements, and the candidate’s other board membership(s); (ii) a written consent of the director candidate to stand for election if nominated by the Nominating and Corporate Governance Committee and approved by the Board of Directors, and to serve if elected by the stockholders; and (iii) proof of ownership of RCM’s common stock by the person submitting the recommendation.

 

Communications with the Board

 

Stockholders may send communications to the Board of Directors in writing, addressed to the full Board of Directors, individual directors or a specific committee of the Board of Directors, in care of Kevin D. Miller, Secretary, RCM Technologies, Inc., 2500 McClellan Avenue, Suite 350, Pennsauken, New Jersey 08109. In general, all stockholder communications sent to our Secretary for forwarding to the Board of Directors or to specified Board members will be forwarded in accordance with the sender’s instructions. However, our Secretary reserves the right not to forward any personally abusive, threatening or otherwise inappropriate materials.

 

 

- 21 -

 

 

PROPOSAL 2
___________________________________________

 

APPROVAL OF AMENDMENTS TO THE

RCM TECHNOLOGIES, INC. 2001 EMPLOYEE STOCK PURCHASE PLAN

 

On October 20, 2021, our Board of Directors adopted, subject to stockholder approval, amendments to the RCM Technologies, Inc. 2001 Employee Stock Purchase Plan (the “Stock Purchase Plan”). The affirmative vote of a majority of the votes cast on this proposal at the Annual Meeting are required to approve it. The amendments to the Stock Purchase Plan would (i) increase by 400,000 shares of Common Stock the total number of shares authorized for purchase under the Stock Purchase Plan from 1,400,000 shares to 1,800,000 shares of Common Stock, (ii) change the name of the Stock Purchase Plan to the “RCM Technologies, Inc. Employee Stock Purchase Plan” and (iii) change the termination date of the Stock Purchase Plan to December 31, 2030.

 

If approved by our stockholders, the amendment to the Stock Purchase Plan will be effective on December 16, 2021. Stockholder approval of the amendment to the Stock Purchase Plan is necessary in order for the Stock Purchase Plan to continue to meet the requirements of Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”) and to comply with the corporate governance listing standards of NASDAQ.

 

As of October 28, 2021, there were 48,110 shares of Common Stock available for purchase under the Stock Purchase Plan. Our Board of Directors believes that the currently available shares are insufficient for our compensatory program and, therefore, approved the increase in shares to be authorized under the Stock Purchase Plan. In this regard, our Board of Directors believes that our ability to attract, retain and motivate top quality employees is material to our success and is enhanced by our continued ability to provide for issuances under the Stock Purchase Plan. In addition, our Board of Directors believes that our interests and those of our stockholders will be advanced if we can continue to offer our employees the opportunity to acquire and increase their proprietary interests in us through the Stock Purchase Plan.

 

The material terms of the Stock Purchase Plan, as it is proposed to be amended, are summarized below. The summary of the Stock Purchase Plan, as it is proposed to be amended, is not intended to be a complete description of the Stock Purchase Plan, as it is proposed to be amended, and is qualified in its entirety by the actual text of the amendment and the Stock Purchase Plan. A copy of the full text of the amendment to the Stock Purchase Plan is attached to this Proxy Statement as Exhibit A. A copy of the Stock Purchase Plan will be made available without charge to any person upon his or her written request, which request should be directed to the Director of Investor Relations at our address appearing on the first page of this proxy statement.

 

Material Features of the Stock Purchase Plan

 

General. The Stock Purchase Plan first became effective on January 1, 2001, and was thereafter amended effective July 1, 2004, July 1, 2009, September 16, 2009, December 3, 2015 and December 14, 2018 with the approval of our stockholders where required. The Stock Purchase Plan provides our eligible employees, as well as those of our subsidiaries, with an opportunity to purchase shares of our Common Stock at a discount based on their accumulated payroll deductions for the relevant purchase period. The Stock Purchase Plan is intended to comply with the applicable provisions of Section 423 of the Code. The Stock Purchase Plan is not intended to qualify under Section 401 of the Code and is not subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended.

 

 

- 22 -

 

 

The Stock Purchase Plan currently authorizes up to 1,400,000 shares of Common Stock for purchase, subject to adjustment in certain circumstances as described below. The stockholders are being asked to consider and approve an amendment to the Stock Purchase Plan that would, commencing on December 16, 2021, increase the number of shares of Common Stock available for purchase under the Stock Purchase Plan by an additional 400,000 shares, so that a total of 1,800,000 shares of Common Stock may be purchased under the Stock Purchase Plan.

 

Eligibility. In general, all of our employees, as well as those of our subsidiaries, who customarily work more than 20 hours per week and more than five months a year are eligible to participate in the Stock Purchase Plan after working for us or one of our subsidiaries for at least six months. Employees who own 5% or more of the total combined voting power or value of all classes of our stock or our subsidiaries are not eligible to participate. As of October 28, 2021, approximately 2,411 employees were eligible to participate in the Stock Purchase Plan, of which 44 employees are currently participating in the Stock Purchase Plan.

 

Administration. The Stock Purchase Plan is administered by our Compensation Committee. Our Compensation Committee has the authority and power to administer the Stock Purchase Plan and to make, adopt, institute and enforce rules and regulations not inconsistent with the provisions of the Stock Purchase Plan. The Compensation Committee will adopt and prescribe the contents of all forms required in connection with the administration of the Stock Purchase Plan, including the agreement by which an eligible employee may enroll as a participant in the Stock Purchase Plan, payroll withholding authorizations, requests for distributions of shares, and all other required notices under the Stock Purchase Plan. Our Compensation Committee has the fullest discretion permissible under law in the discharge of its duties, and its interpretations and decisions with respect to the Stock Purchase Plan are final and conclusive.

 

Purchase Periods. There are two six-month Purchase Periods per year coinciding with our respective fiscal reporting periods. The first Purchase Period consists of the first and second quarters of our fiscal year and the second Purchase Period consists of the third and fourth quarters (a “Purchase Period”).

 

Election to Participate. An eligible employee generally must elect to participate in the Stock Purchase Plan 30 days before the first day of the applicable Purchase Period and such participation will continue for each successive Purchase Period until it is modified or discontinued by the eligible employee. By participating in the Stock Purchase Plan, a participant authorizes after-tax payroll deductions from his or her compensation for the purpose of funding the purchase of our Common Stock under the Stock Purchase Plan for the relevant Purchase Period. Payroll deductions are in whole percentages ranging from 1% to 10% of such participant’s compensation; however, in no event may a participant authorize more than $20,000 per year toward the purchase of shares of Common Stock under the Stock Purchase Plan. Accumulated payroll deductions for a participant are not credited with any interest. Unless a participant ceases his or her participation in the Stock Purchase Plan, such participant may not change the percentage of his or her compensation deducted during a Purchase Period; however, a participant may change the percentage of compensation deducted to any permissible level effective as of the beginning of any subsequent Purchase Period by filing with the Compensation Committee a notice in such form and at such time in advance of the beginning Purchase Period in which the change is to be effective as the Compensation Committee determines.

 

 

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Purchase Date. On the last day of the purchase period (the “Purchase Date”), each participant will automatically be deemed to have exercised his or her option to purchase shares of Common Stock under the Stock Purchase Plan, unless such participant has notified the Compensation Committee, at such time in advance of the Purchase Date as the Compensation Committee determines, of his or her desire not to make such purchase. Subject to the limitations described below, on each Purchase Date, at the Purchase Price (as described below), the largest number of whole shares of Common Stock as can be purchased with the amounts withheld from the participant’s compensation during the Purchase Period are purchased on behalf of the participant. Any amounts that are withheld from a participant’s compensation in a Purchase Period and that remain after the purchase of whole shares of Common Stock on the Purchase Date will be held in the participant’s account, without interest, and applied on the participant’s behalf to purchase Common Stock on the next Purchase Date.

 

Purchase Price. Unless our Compensation Committee determines otherwise, the purchase price per share of our Common Stock to be sold to participants under the Stock Purchase Plan is the lower of (i) 85% of the market value of a share of our Common Stock on the first day of the Purchase Period or (ii) 85% of the market value of a share of our Common Stock on the last day of the Purchase Period (the “Purchase Price”).

 

Limitation on Number of Shares that May be Purchased. The maximum number of shares of Common Stock that may be purchased for each participant on the Purchase Date of a Purchase Period is the lesser of (i) the number of whole shares of Common Stock that can be purchased by applying the full balance of the participant’s withheld funds to the purchase of shares at the Purchase Price or (ii) the participant’s proportionate part of the maximum number of shares of Common Stock available under the Stock Purchase Plan. In addition, unless the Compensation Committee determines otherwise prior to the beginning of a Purchase Period, the maximum number of shares of Common Stock that a participant may purchase during a Purchase Period is 1,500 shares of Common Stock, subject to adjustment as described below, and the maximum number of shares of Common Stock that all participants may purchase, in the aggregate, during a Purchase Period is 250,000 shares of Common Stock, subject to adjustment as described below.

 

If any participant entitled to purchase shares pursuant to a Purchase Period would be deemed to own stock possessing five percent or more of the total combined voting power or value of all classes of our stock or one of our subsidiaries, the maximum number of shares of Common Stock that such person will be entitled to purchase pursuant to the Stock Purchase Plan will be reduced to that number which, when added to the number of shares of Common Stock that such person is deemed to own (excluding any number of shares of Common Stock that such person would be entitled to purchase under the Stock Purchase Plan), is one less than such five percent. Also, a participant may not purchase shares of Common Stock having an aggregate market value of more than $25,000, determined at the beginning of the Purchase Period, for any calendar year in which the Stock Purchase Plan is in effect.

 

Lastly, if on any Purchase Date, the aggregate funds available for the purchase of shares of Common Stock exceeds the number of shares of Common Stock available for purchase under the Stock Purchase Plan, the number of shares of Common Stock that would be purchased by each participant will be proportionally reduced on the Purchase Date in order to eliminate the excess and the Stock Purchase Plan will terminate immediately after such Purchase Date.

 

Termination of Participation. A participant may voluntarily cease his or her participation in the Stock Purchase Plan and stop payroll deductions during a Purchase Period by filing a notice of cessation of participation at such time in advance of the Purchase Date as the Compensation Committee determines. If the participant withdraws during a Purchase Period, the participant will receive a distribution of any funds held in his or her account for such Purchase Period.

 

 

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If a participant terminates his or her employment with us or one of our subsidiaries for any reason or otherwise ceases to be an eligible employee, his or her participation in the Stock Purchase Plan will automatically cease, no further purchases of Common Stock will be made for the participant, and we will pay to such participant any funds held in his or her account under the Stock Purchase Plan.

 

Adjustment Provisions. The Stock Purchase Plan provides for a mandatory adjustment in the aggregate number of shares of Common Stock reserved for purchase under the Stock Purchase Plan, the maximum number of shares of Common Stock that may be purchased by a participant under the Stock Purchase Plan, the total number of shares of Common Stock that may be purchased by all participants in a Purchase Period, and the calculation of the Purchase Price per share in the event there is a change in the number or kind of shares of Common Stock outstanding as a result of a change in our shares of Common Stock as a result of certain capital adjustments affecting our Common Stock.

 

Merger. If we are the surviving corporation in any merger or consolidation, any Purchase Period under the Stock Purchase Plan will apply to shares of our Common Stock. However, in the event we dissolve or are liquidated or a merger or consolidation occurs in which we are not the surviving corporation, the Stock Purchase Plan and any Purchase Period will terminate upon the effective date of such dissolution, liquidation, merger or consolidation, unless our Board of Directors determines otherwise, and the balance of any amounts withheld from a participant’s compensation which have not been applied to the purchase of shares of Common Stock will be returned to the participant.

 

Amendment and Termination of the Stock Purchase Plan. Our Board of Directors may, at any time, amend the Stock Purchase Plan, except for any amendment that is required to be approved by our stockholders under Section 423 of the Code. The Stock Purchase Plan is currently scheduled to terminate on December 31, 2025, unless otherwise amended with approval by our stockholders to extend the term of the Stock Purchase Plan. The proposed amendments to the Stock Purchase Plan would extend this date to December 31, 2030.

 

Purchases under the Stock Purchase Plan. As of October 28, 2021, 1,351,890 shares were purchased under the Stock Purchase Plan. If the amendment to the Stock Purchase Plan is approved, the total number of shares of Common Stock that may be purchased under the Stock Purchase Plan will be 1,800,000 shares, of which 448,110 shares will be available for purchase under the Stock Purchase Plan.

 

The last sales price of our Common Stock on October 28, 2021 was $6.01 per share.

 

Federal Income Taxes. The following provides only a general description of the application of the Federal income tax laws to purchases of shares of Common Stock under the Stock Purchase Plan. There may be different tax consequences under certain circumstances, and there may be federal gift and estate tax consequences and state and local tax consequences. All affected individuals should consult with their own advisors regarding their own situation since this discussion is intended for the information of the stockholders considering how to vote at the Annual Meeting and not as tax guidance to any participants in the Stock Purchase Plan.

 

Under the Code as currently in effect, a participant in the Stock Purchase Plan will not be deemed to have recognized income, nor will we be entitled to a deduction, upon the participant’s purchase of shares of Common Stock under the Stock Purchase Plan. Instead, a participant will recognize income when he or she sells or otherwise disposes of the shares of Common Stock.

 

 

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If a participant sells shares of Common Stock purchased under the Stock Purchase Plan more than two years after the date on which the option to purchase the shares of Common Stock was granted and more than one year after the purchase of the shares of Common Stock (the holding period), a portion of the participant’s gain will be taxed as ordinary income and a portion will be taxed as capital gain. The participant will be taxed at ordinary income tax rates on the excess of the market value of the shares of Common Stock when the option was granted over the purchase price (i.e., the discount), or, if less, the entire gain on the sale. The participant will have additional capital gain or loss equal to the difference, if any, between the proceeds of the sale and the participant’s basis in the shares of Common Stock (the purchase price plus any ordinary income realized). The capital gain rate will depend on how long the shares of Common Stock were held by the participant. We will not be entitled to any tax deduction with respect to a sale by a participant after the holding period.

 

If a participant sells shares of Common Stock before the expiration of the holding period, the participant will be taxed at ordinary income tax rates equal to the difference between the market value of the shares of Common Stock on the date of purchase and the exercise price. We generally will be entitled to a corresponding deduction. The participant will have additional capital gain or loss on the difference between the proceeds of the sale and the participant’s basis in the shares of Common Stock (the purchase price plus any ordinary income realized). The capital gain rate will depend on how long the shares of Common Stock were held by the participant.

 

The estate of a participant who dies while holding shares of Common Stock purchased under the Stock Purchase Plan will recognize ordinary income in the year of the participant’s death in an amount equal to the excess of the market value of the shares of Common Stock when the option was granted over the purchase price, or, if less, the amount by which the market value of the shares of Common Stock on the date of death exceeds the purchase price.

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO THE STOCK PURCHASE PLAN.

 

 

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PROPOSAL 3
___________________________________________

RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS

 

Our Audit Committee has selected Macias, Gini & O’Connell LLP (“MGO”) to act in the capacity of independent accountants for the current fiscal year ending January 1, 2022. Ratification and approval by the stockholders will be sought by the Board of Directors for the selection of MGO as independent accountants to audit our accounts and records for the fiscal year ending January 1, 2022, and to perform other appropriate services. The affirmative vote of a majority of the votes cast on this proposal at the Annual Meeting is required to approve it. In the event that a majority of the shares voted at the Annual Meeting do not vote for ratification of the selection of MGO, the Audit Committee will reconsider such selection.

 

Representatives of MGO will be present at the Annual Meeting and will have an opportunity to make a statement if they so desire and to respond to questions by stockholders.

 

Fees Billed by MGO during fiscal 2020 and 2019

 

Audit Fees.  Fees billed to the Company by MGO for audit services rendered by MGO for the audit of the Company's 2020 annual financial statements, for the review of those financial statements included in the Company's Quarterly Reports on Form 10-Q, and for services that are normally provided by MGO in connection with statutory and regulatory filings or engagements, totaled approximately $155,000. Fees billed to the Company by MGO for audit services rendered by MGO for the audit of the Company's 2019 annual financial statements, for the review of those financial statements included in the Company's Quarterly Reports on Form 10-Q, and for services that are normally provided by MGO in connection with statutory and regulatory filings or engagements, totaled approximately $150,000.

 

Audit-Related Fees. Fees billed to the Company by MGO during 2020 and 2019 for audit-related services that were reasonably related to the performance of the audit or review of the Company's financial statements and are not reported under the preceding paragraph totaled $5,000 for 2020 and there were no such fees related to 2019.

 

Tax Fees. There were no fees billed to the Company by MGO for professional services rendered for tax compliance, tax advice and tax planning during either 2020 or 2019.

 

All Other Fees. There were no other fees billed to the Company by MGO during either 2020 or 2019. MGO does not audit the Company’s 401(k) plan.

 

The Audit Committee has considered whether MGO’s provision of services other than professional services rendered for the audit and review of our financial statements is compatible with maintaining MGO’s independence and has determined that it is so compatible.

 

All audit, audit-related, tax and other services were pre-approved by the Audit Committee pursuant to applicable regulations. The Audit Committee currently pre-approves all engagements of the Company’s accountants to provide both audit and non-audit services and has not established formal pre-approval policies or procedures. The Audit Committee did not approve any non-audit services pursuant to Rule 2-01 (c) (7) (i) (C) of Regulation S-X during 2020 or 2019.

 

OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION AND APPROVAL OF THE SELECTION BY OUR AUDIT COMMITTEE OF MACIAS, GINI & OCONNELL LLP AS OUR INDEPENDENT ACCOUNTANTS FOR FISCAL 2021.

 

 

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REPORT OF THE AUDIT COMMITTEE

 

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 Company filing 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.

 

As part of its oversight of the Company’s financial statements, the Audit Committee reviewed and discussed with both management and the Company’s outside auditors all financial statements prior to their issuance. Management advised the Committee in each case that all financial statements were prepared in accordance with generally accepted accounting principles and reviewed significant accounting issues with the Committee. These reviews included discussion with the outside auditors of matters required to be discussed pursuant to Public Company Accounting Oversight Board Auditing Standard No. 16.

 

The Committee also discussed with MGO matters relating to its independence, including a review of audit and non-audit fees and the written disclosures made and letter given to the Committee pursuant to the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence.

 

In addition, the Committee reviewed major initiatives and programs aimed at strengthening the effectiveness of the Company’s internal control structure. As part of this process, the Committee continued to monitor the scope and adequacy of the Company’s internal auditing program, reviewing staffing levels and steps taken to implement recommended improvements in internal procedures and controls.

 

Taking all of these reviews and discussions into account, the Committee recommended to the Board of Directors that the Board approve the inclusion of the Company’s audited financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2021 for filing with the Securities and Exchange Commission.

 

Audit Committee

 

Richard A. Genovese (Chair)

Roger H. Ballou

Swarna Srinivas Kakodkar

 

 

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PROPOSAL 4
___________________________________________

 

ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

 

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and Section 14A of the Exchange Act, our stockholders are entitled to vote to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the rules of the Securities and Exchange Commission (the “SEC”). This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement.

 

The compensation of our named executive officers subject to the vote is disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related narrative disclosure contained in this proxy statement. As discussed in the Compensation Discussion and Analysis, we believe that our compensation policies and decisions are designed to reward strong annual operating performance by the Company.

 

Accordingly, your Board is asking stockholders to indicate their support for the compensation of our named executive officers as described in this proxy statement by casting a non-binding, advisory vote “FOR” the following resolution:

 

“RESOLVED, that the stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders.

 

Because the vote on this proposal is advisory in nature, it will not affect any compensation already paid or awarded to any named executive officer and will not be binding on or overrule any decisions by the Compensation Committee or the Board. Nevertheless, the views expressed by stockholders, whether through this vote or otherwise, are important to Company management and your Board and, accordingly, your Board and the Compensation Committee intend to consider the results of this vote in making determinations in the future regarding executive compensation arrangements. Your advisory vote serves as an additional tool to guide the Compensation Committee and your Board in continuing to align the Company’s executive compensation program with the interests of the Company and its stockholders and is consistent with our commitment to high standards of corporate governance.

 

This vote is not intended to express a view on any specific element of pay, but rather the overall compensation program and philosophy for our named executive officers described in the Compensation Discussion and Analysis, the accompanying compensation tables, and the related narrative disclosure as set forth in the “Executive Compensation” section of this proxy statement. We encourage you to carefully review these disclosures and to indicate your support for our named executive officer compensation program.

 

YOUR BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS PRESENTED IN THIS PROXY STATEMENT.

 

 

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STOCKHOLDER PROPOSALS

 

We have two separate and distinct processes concerning the submission of stockholder proposals:

 

Proposals to be Included in Our Proxy Statement

 

Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, proposals by stockholders that are intended for inclusion in our proxy statement and proxy card and to be presented at our next annual meeting must be received by us by July 14, 2022, in order to be considered for inclusion in our proxy materials. Such proposals should be addressed to our Secretary and may be included in next year’s proxy materials if they comply with certain rules and regulations of the SEC governing stockholder proposals.

 

Advance Notice Procedures

 

If a stockholder desires to make a proposal for consideration at an annual meeting of our stockholders or nominate someone for election to your Board, the stockholder must follow the applicable procedures under law or as outlined in our Bylaws. Our Bylaws provide that in order to make a proposal or nominate someone for election to your Board at an annual meeting of stockholders, written notice of the proposal or nomination must be received by the Corporate Secretary of RCM not more than 120 days or less than 90 days prior to that year’s annual meeting of stockholders. The notice must contain information required by our Bylaws regarding the stockholder and the proposal or nominee, as well as information required to be included in a proxy statement by SEC rules and regulations.

 

Stockholders are also advised to review our Bylaws, which contain additional requirements about advance notice of proposals and director nominations, including the information that must accompany any such stockholder notice.

 

Accordingly, in order for a stockholder proposal or nomination to be considered at the 2022 annual meeting of stockholders, a written notice of the proposal or the nomination, which includes the information required by our bylaws, must be received by the Corporate Secretary of RCM at the principal executive offices of RCM no earlier than August 18, 2022 and no later than September 17, 2022 (assuming that the 2022 annual meeting of stockholders is held on December 16, 2022, the anniversary of the 2021 Annual Meeting).

 

In addition, if we do not receive notice of your stockholder proposal by September 17, 2022, the proposal will be deemed “untimely” for purposes of Rule 14a-4(c) of the Securities Exchange Act of 1934 and the persons named as proxies in next year’s proxy materials will be entitled to vote in their discretion with respect to the proposal.

 

A copy of the full text of our Bylaw provisions may be obtained upon written request to the Corporate Secretary of RCM at our principal place of business.

 

OTHER MATTERS

 

Your Board does not intend to present any business at the 2021 Annual Meeting other than the matters described in this proxy statement. If any other matters are properly presented for action at the 2021 Annual Meeting, it is intended that the proxy will be voted with respect thereto by the proxy holders in accordance with the instructions and at the discretion of your Board or a properly authorized committee thereof.

 

By Order of the Board of Directors,

 

rcmt20201030_def14aimg002.jpg

Kevin D. Miller
Secretary

 

November 11, 2021

 

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Exhibit A

 

AMENDMENT 2021-5

 

TO THE

 

RCM TECHNOLOGIES, INC.

 

2001 EMPLOYEE STOCK PURCHASE PLAN

 

WHEREAS, RCM Technologies, Inc. (the “Company”) maintains the RCM Technologies, Inc. 2001 Employee Stock Purchase Plan (the “Plan”) for the benefit of its and its subsidiaries eligible employees;

 

WHEREAS, the Company desires to amend the Plan, subject to approval of the Company’s stockholders at its 2021 Annual Meeting, to: (i) increase the total number of shares of the Company’s common stock, $0.05 par value (the “Common Stock”), reserved for issuance and transfer under the Plan by an additional 400,000 shares, so that a total of 1,800,000 shares of Common Stock are reserved for issuance and transfer under the Plan; (ii) change the name of the Plan to the “RCM Technologies, Inc. Employee Stock Purchase Plan”; and (iii) change the termination date of the Plan to December 31, 2030; and

 

WHEREAS, pursuant to Section 5.06 of the Plan, the Board of Directors of the Company (the “Board”) may, at any time and from time to time, amend the Plan in any respect, subject to stockholder approval if required under section 423 of the Internal Revenue Code of 1986, as amended.

 

NOW, THEREFORE, in accordance with the foregoing, effective upon approval by the Company’s stockholders, the Plan is hereby amended as follows:

 

1.         Section 1.13 of the Plan is hereby amended in its entirety to read as follows (and any other references in the Plan to the name of the shall be revised accordingly):

 

“Sec. 1.13 “Plan” means the RCM Technologies, Inc. Employee Stock Purchase Plan, as set forth herein and as hereafter amended.”

 

2.         Section 3.01 of the Plan is hereby amended in its entirety to read as follows:

 

“Sec. 3.01 Reservation of Shares. Subject to adjustment in accordance with Section 4.02, there shall be 500,000 shares of Stock reserved for issuance or transfer under the Plan; provided, that, effective July 1, 2009, the aggregate number of shares of Stock reserved for issuance or transfer under the Plan shall be increased by 300,000 shares so that the total number of shares of Stock reserved for issuance or transfer under the Plan shall be 800,000 shares; and provided further, that, effective December 3, 2015, the aggregate number of shares of Stock reserved for issuance or transfer under the Plan shall be increased by an additional 300,000 shares so that the total number of shares of Stock reserved for issuance or transfer under the Plan shall be 1,100,000 shares; and provided further, that, effective December 14, 2018, the aggregate number of shares of Stock reserved for issuance or transfer under the Plan shall be increased by an additional 300,000 shares so that the total number of shares of Stock reserved for issuance or transfer under the Plan shall be 1,400,000 shares; and provided further, that, effective December 16, 2021, the aggregate number of shares of Stock reserved for issuance or transfer under the Plan shall be increased by

 

 

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an additional 400,000 shares so that the total number of shares of Stock reserved for issuance or transfer under the Plan shall be 1,800,000 shares. Except as provided in Section 4.02, the aggregate number of shares of Stock that may be purchased under the Plan shall not exceed the number of shares of Stock reserved under the Plan.”

 

3.         Section 5.07 of the Plan is hereby amended in its entirety to read as follows:

 

“Sec. 5.07 Expiration and Termination of the Plan. The Plan shall continue in effect until December 31, 2030, unless terminated prior to that date pursuant to the provisions of the Plan or pursuant to action by the Board of Directors. The Board of Directors shall have the right to terminate the Plan at any time without prior notice to any Participant and without liability to any Participant. Upon the expiration or termination of the Plan, the balance, if any, then standing to the credit of each Participant from amounts withheld from the Participant’s Compensation which has not, by such time, been applied to the purchase of Stock shall be refunded to the Participant.”

 

4.         As thus amended, the Plan, including Amendment 2009-1, Amendment 2009-2, Amendment 2015-3, Amendment 2018-4 and this Amendment 2021-5 thereto hereby constitute the Plan.

 

IN WITNESS WHEREOF, to record the adoption of this Amendment 2021-5 to the Plan, the Board has caused the execution of this instrument on this 16th day of December, 2021.

 

RCM TECHNOLOGIES, INC.

 

 

 

By:                          

Kevin D. Miller

Chief Financial Officer, Treasurer and

Secretary

 

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