UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K/A
(Amendment No. 1
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
or
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2021
Commission File No. 1-07109
SERVOTRONICS, INC.
(Exact name of registrant as specified in its charter)
Delaware | 16-0837866 | |
(State or other jurisdiction of | (I. R. S. Employer | |
incorporation or organization) | Identification No.) |
1110 Maple Street
Elma, New York14059 (Address of principal executive offices) (zip code) (716) 655-5990 ( |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Ticker symbol(s) | Name of each exchange on which registered | ||
Common Stock | SVT | NYSE |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Indicate by checkmarkcheck mark whether the registrantregistrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by checkmarkcheck mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405)232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Securities Exchange Act. (Check one):
Large accelerated filer | Accelerated filer | Non-accelerated filer | Smaller reporting company x | Emerging growth company ¨ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ¨
Based on the closing price of the Common Stock on June 30, 2011 ($8.94)2021 $8.65 (the last day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the voting stock held by non-affiliates of the registrant was $13,773,173.
As of March 31, 2012February 28, 2022, the number of $.20 par value common shares outstanding was 2,318,371
Auditor Firm: FREED MAXICK CPAs, P.C. | Auditor Location: Buffalo, New York | Audit Firm ID: 317 |
EXPLANATORY NOTE AS TO PURPOSE OF THIS AMENDMENT
This Amendment No. 1 to(this “Amendment”) amends the Annual Report on Form 10-K for the year ended December 31, 2021, of Servotronics, Inc. (the “Company”) forthat we filed with the fiscal year ended DecemberSecurities and Exchange Commission (the “SEC”) on March 31, 20112022 (the “Original Filing”). This Amendment is being filed to provide information required byamend and restate Items 10, 11, 12, 13, and 14 of Part III of the Annual Report on Form 10-K rather thanin their entirety to provide the information we indicated that we would incorporate by reference portionsfrom our Proxy Statement for the 2022 annual meeting of the proxy statement into Part III.
Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), this Amendment also contains new certifications of ourby the principal executive officer and the principal financial officer are being filed as exhibitsrequired by Section 302 of the Sarbanes-Oxley Act of 2002. Accordingly, Item 15(a)(3) of Part IV is amended to this Form 10-K/A.
Other than the items outlined above, this Amendment does not modify or update otherthe Original Filing. Accordingly, this Amendment should be read in conjunction with the Original Filing. This Amendment does not reflect events occurring after the date of the Original Filing or modify or update those disclosures as presented in our original Form 10-K, except asthat may be requiredaffected by subsequent events. Such subsequent matters are addressed in subsequent reports filed by us with the SEC.
Capitalized terms not defined in this Amendment have the meaning given to reflect such amendments.
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TABLE OF CONTENTS
PART III | Page | |||
Item 10. | Directors, Executive Officers and Corporate Governance |
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PART III
Item 10. | Directors, Executive Officers and Corporate Governance |
Director Qualifications and Biographical Information
The biography of each director below contains information regarding that person’s principal occupation, positions held with the Company, service as a director, business experience, other director positions currently held or held at any time during the past five years, involvement in certain legal or administrative proceeding, if applicable, and the experiences, qualifications, attributes or skills that caused our Nominating and Corporate Governance Committee to conclude that the person should serve as a member of our Board of Directors.
Edward C. Cosgrove, Esq., age 87—Mr. Cosgrove has served as Director since 2012. He is an Independent Directorattorney with The Cosgrove Firm, a Buffalo-based law firm where his practice includes civil litigation, management of legal crises, representation of families, schools, advice to corporations, businesses and professionals. He earned a Bachelor of Arts Degree from the University of Notre Dame and a Doctor of Laws Degree from Georgetown University Law School. He previously served as a Special Agent with the Federal Bureau of Investigation and as District Attorney of Erie County, NY. Mr. Cosgrove enjoys the highest possible Peer Review Rating a lawyer can receive from Martindale-Hubbell for the years 1980 through 2022 and is considered annually as one of the Company and Chairmantop lawyers in Western New York. His broad-based legal experience is important to the Board of Directors.
William F. Farrell, Jr., age 55—Mr. Farrell was appointed to the Board of Directors in April 2022 when he also was appointed Chief Executive Officer of the Company. He joined the Company following a more than 30-year career with Western New York-based Moog Inc. (NYSE: MOG.A and MOG.B), where he served in various roles of increasing responsibility including, most recently, Site General Manager for Moog's Aircraft Group, which supports military and commercial aerospace applications. Prior to that, he served five years as Site General Manager for its Industrial Group, supporting markets including flight simulation, oil and gas exploration, power generation and industrials automation. Earlier in his tenure at Moog, he worked in a variety of other executive and engineering roles for the worldwide designer, manufacturer, and integrator of precision control components and systems, including in its Industrials Group, Space Products Division and Engine Controls Division. Mr. Farrell holds a B.S. degree in mechanical engineering from the University of Notre Dame and an M.B.A in manufacturing operations management from the State University of New York at Buffalo. His leadership experience and industry knowledge provide valuable insight to the Board of Directors in formulating and executing the Company’s Audit Committee. He has been a Company Director since 1990. He has an impressive success record for his leadership performance in many world-recognized advanced technology and state-of-the-art programs and projects. Hestrategy.
Lucion P. Gygax, age 51—Mr. Gygax has served as a Corporate Officer, Program Director Project Leadersince 2015 and in other similar positions which combined management and advanced technology competence. These positions, programs and projects included being the Physicist in charge of certain key aspectsserves as Chair of the Manhattan Atomic Bomb Project,Compensation Committee and a Principal Staff member of the Applied Physics LaboratoryAudit Committee and Nominating and Corporate Governance Committee. He is the principal owner and executive of John Hopkins University,an event management company, a consultant and author. Mr. Gygax retired this year from the Army as a Lieutenant Colonel after 33 years of service as a logistics officer and brings a diverse skill set to the board with experience in synchronizing multi-functional teams, budget management, human resources and talent management. Mr. Gygax graduated from Beloit College where he received a B.A. in History and Psychology. His experience leading complex logistics organizations across a diverse range of operating environments gives him valuable perspectives and insights. His leadership experience and achievements highly qualify him to serve as a Company Director.
Karen L. Howard, age 59—Ms. Howard was appointed to the Board of Directors in April 2022 and serves as a member of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. She has more than 30 years of professional experience as an advisor to and finance executive with public companies, as well as a proven record of board leadership. She retired in 2020 after serving for seven years as Executive Vice President of Kei Advisors LLC, an investor relations and business advisory firm serving micro-, small- and mid-cap public company executives and boards across the United States. Previously, she served for 17 years with Columbus McKinnon Corporation (Nasdaq: CMCO), including as Vice President of Strategic Initiatives, Vice President and Chief Financial Officer, and earlier roles as Treasurer and Controller of the publicly traded global manufacturer of material handling products and solutions. Prior to that, she was a certified public accountant with Ernst & Young LLP. Ms. Howard serves as a member of the Board of Directors of Highmark Western and Northeastern New York Inc. (formerly HealthNow New York Inc.), a regional health care company. She also chairs its audit committee. Ms. Howard earned her bachelor’s degree in accounting from Niagara University. Her accounting and business expertise, including an in-depth understanding of the preparation and analysis of financial statements, makes her highly qualified to serve as a Company Director.
Christopher M. Marks, age 57—Mr. Marks was appointed to the Board of Directors in July 2016 and serves as Chair of the Audit Committee and member of the Compensation Committee and Nominating and Corporate Governance Committee. Mr. Marks is a member of the financial planning firm Jensen, Marks, Langer & Vance, LLC, where he provides financial planning advice and investment management services. Also, he is a member and the Chief Compliance Officer of Sterling Investment Counsel, LLC, a registered investment advisor. He brings over 25 years of financial planning and analysis experience to the Company as well as a background in accounting, corporate law and governance. He holds a Bachelor of Science Degree in Accountancy from Villanova University, a Master of Business Administration from St. Bonaventure University, and a Juris Doctorate with honors from the State University of New York at Buffalo School of Law. He previously practiced commercial and corporate law at Phillips Lytle, LLP in Buffalo, NY and began his career with Price Waterhouse in New York City. His business, accounting and legal experience make him highly qualified to serve as a Company Director.
Evan H. Wax, age 40—Mr. Wax was appointed to the Board of Directors in April 2022 and serves as member of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. He is Managing Member of Wax Asset Management LLC in Madison, CT, an investment advisory firm that employs a long-term value based investment strategy. Prior to founding Wax Asset Management in 2011, Mr. Wax was Managing Director and Head Trader at Hayground Cove Asset Management where he was also a member of the investment committee and risk committee. Prior to that, he worked as a Financial Analyst at Goldman Sachs. Mr. Wax graduated from Yale University where he received a B.A. in Economics. His operational, financial and investment experience, and knowledge of capital markets gives him strong insight into the issues facing the Company’s businesses and markets.
Executive Officers
The following provides certain information regarding our executive officers. Each individual’s name and position with the Company is indicated. In addition, the principal occupation and business experience for the Bumble Bee Missile Program,past five years is provided for each executive officer. There are no family relationships between any of our directors or executive officers.
William F. Farrell, Jr., age 55—Mr. Farrell was appointed Chief Executive Officer of the DirectorCompany in April 2022. He joined the Company following a more than 30 year career with Moog Inc., where he served in various roles of increasing responsibility including, most recently, Site General Manager for Moog's Aircraft Group, which supports military and commercial aerospace applications. Prior to that, he served five years as Site General Manager for its Industrial Group, supporting markets including flight simulation, oil and gas exploration, power generation and industrials automation.
Lisa F. Bencel, age 65—Ms. Bencel was named Chief Financial Officer of the developmentCompany in January 2017. Prior to joining Servotronics, Ms. Bencel served as Global Controller and Treasurer with kgb, a privately held information services company. Previously, she was with global manufacturing and services companies in the aerospace, telecommunications and chemical industries, including GE, Honeywell (formerly AlliedSignal), Ericsson, L3Harris Technologies and Raytheon Technologies.
James C. Takacs, age 56—Mr. Takacs has served as Senior Vice President of telemetering equipment for the TerrierCompany since September 2016 and Talos Missile Systems (precursors forwas named Chief Operating Officer of the current Standard Missile Program)Company in May 2018. Prior to that he served as Vice President of the Company, a position he held since May 2010. Mr. Takacs first joined Servotronics in 1987 and he has served in other management positions such as Corporate Vice President of Research and Engineering and as a consultant. Dr. Duerig, now retired and a market investor, continues to serve on the Board of Directors of technically oriented companies and other organizations. He has a Ph.D. in Solid State Physics and a strong accounting education from the University of Maryland and New York University respectively. A member of professional, scientific organizations and Honor Societies Sigma Pi Sigma and Sigma Xi, he has published papers in various scientific publications. Dr. Duerig’s wide range of education, expertise and management experience in and across many disciplines qualifies him as an expert from the perspective of meeting corporate goals and corporate responsibility in a technology and profit-driven corporate environment and comprehensively qualifies him to be the financial expert for the Audit Committee and an Independent Director for the Company. Dr. Duerig’s long association with the Company, his demonstrated successful leadership achievements in roles that are academic, commercial and government related in a wide range of technology and business arenas in combination with his organizational expertise and skills (see above) are among the substantial attributes which highly qualifies him as a Company Director.
Delinquent Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act or representations from Directorsof 1934 requires directors and Executive Officers requiredexecutive officers and persons who own more than ten percent of the Company’s Common Stock to file such reports,report their ownership and any changes in that ownership to the Securities and Exchange Commission. The Company believes that all such filings required ofSection 16(a) filing requirements applicable to its Executive Officers and Directorsdirectors, executive officers and greater than 10%ten percent beneficial owners (subject to the qualifications in the following sentence) were timely mademet for 2011. The Company does not have information with respect to the reporting compliance of Mr. Houtkin or his estate.
Code of Ethics
The Company has adopted a Code of Ethics and Business Conduct (the Code) that applies to all Directors, Officersdirectors, officers and employees of the Company as required by the listing standards of the NYSE Amex.American. The Code is available on the Company’s website at www.servotronics.com and the Company intends to disclose on this website any amendment to the Code. Waivers under the Code, if any, will be disclosed under the rules of the SEC and the NYSE Amex.
Shareholder Nominations of Director Candidates
Under our By-laws, a shareholder of record may nominate a person for election as a director at next year’s annual meeting if the shareholder has delivered timely notice to our Corporate Secretary setting forth:
• | the name, age, business address and residence address of each proposed nominee; |
• | the principal occupation or employment of each nominee; |
• | the number of shares of Servotronics capital stock which are owned of record and beneficially by each such nominee; |
• | a written questionnaire with respect to the background and qualification of such proposed nominee and a written statement and agreement executed by each such nominee acknowledging that such person: (A) consents to being named in the Company’s proxy statement as a nominee and to serving as a director if elected, (B) intends to serve as a director for the full term for which such person is standing for election, and (C) makes certain other representations as set forth in the By-laws; |
• | certain information regarding the proposing shareholder; and |
• | any other information concerning each nominee that would be required under the rules of the SEC in a proxy statement soliciting proxies for the election of those nominees. |
Audit Committee
In 2021, the Audit Committee comprisedconsisted of Dr. DuerigMessrs. Gygax and Marks with Mr. Hedges. The Board has (i) determined that Dr. DuerigMarks chairing the Committee and Mr. Hedges are Independent Directors pursuant to the listing standards of the NYSE Amex; and (ii)being designated Dr. Duerig as the Company’s “Audit Committee financial expert”.
Item 11. | Executive Compensation |
The Summary Compensation Table
quantifies the amount or value of the different forms of compensation earned by or awarded to the Company’s Chief Financial Officer and Chief Operating Officer as well as the former Chief Executive Officer of the Company (the “Named Officers”) in fiscal 2021 and 2020 and provides a dollar amount for total compensation.The Compensation Process Overview
The Compensation Committee determines the compensation of the Company’s Executive Officers in accordance with the NYSE American listing standards. The most significant aspects of management’s role are evaluating employee performance, recommending business performance targets and objectives, and recommending salary levels and other compensation awards, however final compensation determinations for all Executive Officers are approved by the Compensation Committee and ratified by the Board.
Base Salary
The Compensation Committee seeks to provide the Company’s Executive Officers with a level of assured cash compensation in the form of base salary that is commensurate with their professional status, accomplishments and geographic location. The base salaries are reviewed annually by the Compensation Committee and are adjusted from time to time to recognize competitive market data, the officer’s level of responsibility, outstanding individual performance, promotions and internal equity considerations. For the year ended December 31, 2021, base salary paid to each Named Officer is as set forth in the Summary Compensation Table.
Annual Bonus
The Company also makes cash awards to the Executive Officers and other employees that are not part of any pre-established, performance-based criteria. Awards of this type are completely discretionary and subjectively determined by the Compensation Committee at the time they are awarded. In the event this type of cash award is made, it is reflected in the “Summary Compensation Table” under a separate column entitled “Bonus”.
Equity Awards
Pursuant to the 2012 Long-Term Incentive Plan, as approved by the Company’s shareholders, the Compensation Committee may grant equity awards, the vesting of which may be based on the passage of time, achievement of performance conditions or vesting conditions otherwise determined by the Compensation Committee. No equity awards were granted in 2021.
Other Benefits
The Company generally provides employees with medical, life and disability insurance benefits. All employees are eligible to participate in the Company’s 401(k) Plan to which employees are able to contribute up to the limit prescribed by the Internal Revenue Service. The Company generally matches 75% of the first 4% of eligible compensation that is contributed to the Plan. All employee deferral contributions and Company matching contributions are fully vested upon contribution. All employees are also participants in the Employee Stock Ownership Plan.
Summary Compensation Table
The following table containspresents information with respectrelating to total compensation of the annual compensationNamed Executive Officers for the fiscal years ended December 31, 20112021 and 2010 for the Company’s Chief Executive Officer and the two most highly compensated Executive Officers who were serving as Executive Officers at December 31, 2011 (the “Named Executive Officers”).
Name and Principal Position | Year | Salary | Bonus | All Other | Total | |||||||||||||
Lisa F. Bencel | 2021 | $ | 245,960 | -- | $ | 47,684 | $ | 293,644 | ||||||||||
Chief Financial Officer | 2020 | $ | 245,960 | $ | 40,000 | $ | 47,128 | $ | 333,088 | |||||||||
James C. Takacs | 2021 | $ | 220,740 | -- | $ | 38,313 | $ | 259,053 | ||||||||||
Chief Operating Officer | 2020 | $ | 220,740 | $ | 25,000 | $ | 65,688 | $ | 311,428 | |||||||||
Kenneth D. Trbovich | 2021 | $ | 632,289 | -- | $ | 221,211 | $ | 853,500 | ||||||||||
Former Chief Executive Officer | 2020 | $ | 639,496 | $ | 100,000 | $ | 376,022 | $ | 1,115,518 | |||||||||
(1) | All Other Compensation for |
Option Awards | ||||||||
Named Executive Officer | Number of securities underlying unexercised options (#) | Option Exercise Price | Option Expiration Date | |||||
Dr. Nicholas D. Trbovich | 25,000 | $4.70 | 12/29/2015 | |||||
Nicholas D. Trbovich, Jr. Jr. | 15,000 | $4.70 | 12/29/2015 | |||||
Cari L. Jaroslawsky | 1,000 | $4.70 | 12/29/2015 |
Name | Fees Earned or Paid in Cash (1) | Option Awards (2) | All other Compensation (3) | Total | |||||||||
Dr. William H. Duerig | $41,500 | -- | $73,010 | $114,510 | |||||||||
Donald W. Hedges, Esq. | $41,500 | -- | $73,010 | $114,510 |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Securities Authorized for Issuance Under Equity Compensation Plans
The following table listssets forth the persons that owned beneficially,securities authorized for issuance under the Company’s equity compensation plans as of MarchDecember 31, 2012, more than 5% of the outstanding shares of Common Stock of the Company, based on the Company’s records. Unless otherwise stated, each person has sole voting and investment power with respect to the shares of Common Stock indicated as beneficially owned by that person.
Number of | securities | |||||||||||
securities to be | ||||||||||||
remaining | ||||||||||||
issued upon | ||||||||||||
available for | ||||||||||||
exercise of | ||||||||||||
future issuance | ||||||||||||
outstanding | outstanding | under | ||||||||||
options, | options | equity | ||||||||||
warrants and | warrants and | compensation | ||||||||||
Plan category | rights | rights | plans | |||||||||
Equity compensation plans approved by security holders | — | — | 88,277 | |||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | — | — | 88,277 |
Security Ownership of Certain Beneficial Owners
To the best of our knowledge, no person or group (as those terms are used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) beneficially owned, as of April 25, 2022, more than five percent of the shares of Common Stock outstanding, except as set forth in the following table.
Name and Address of Beneficial Owner | Amount of Common Stock Beneficially Owned | Percent of Common Stock (1) |
Servotronics, Inc. Employee Stock Ownership Trust 1110 Maple Street Elma, NY 14059 | 440,649(2) | 17.7% |
Estate of Dr. Nicholas D. Trbovich 960 Porterville Road East Aurora, NY 14052 | 393,818(3) | 15.8% |
Brent D. Baird 25 Melbourne Place Buffalo, NY 14222 | 239,000(4) | 9.6% |
Wax Asset Management, LLC 44 Cherry Lane Madison, CT 06443 | 158,615(5) | 6.4% |
FMR LLC 245 Summer Street Boston, MA 02210 | 138,330(6) | 5.6% |
(1) |
(2) | The |
(3) |
(4) |
(5) | According to a Schedule 13G filed by Wax Asset Management, LLC with the SEC on January 31, 2022, these shares of Common Stock are owned by investment advisory clients of Wax Asset Management, LLC, which is deemed to be a beneficial owner of those shares pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, due to its discretionary power to make investment decisions over such shares for its clients. Investment advisory contracts also grant the Adviser voting power over the securities held in client accounts. |
(6) | According to an amended Schedule 13G filed by FMR LLC with the SEC on February 9, 2022, Fidelity Management & Research Company LLC, a wholly- owned subsidiary of FMR LLC, is the beneficial owner of 138,330 shares of our common stock, as a result of acting as an investment adviser to various investment companies registered under the Investment Company Act of 1940. Abigail P. Johnson, Director, Chairman and |
Security Ownership of Management
The following table sets forth as of March 31, 2012,certain information asavailable to the beneficial ownership ofCompany with respect to shares of Common Stock of the Company heldowned by each Director, Executive Officerdirector, each nominee for director, each executive officer and by all Directorsdirectors, nominees and Officersexecutive officers as a group, (each individual listed in the following table has sole voting and investment power with respect to the sharesas of Common Stock indicated as beneficially owned by that person, except as otherwise indicated):
Name of Beneficial Owner | Amount of Common Stock Beneficially Owned | Percent of |
Lisa F. Bencel | 8,549(2) | * |
Edward C. Cosgrove, Esq. | 9,153 | * |
William F. Farrell, Jr. | 6,794 | * |
Lucion P. Gygax | 9,153 | * |
Karen L. Howard | 118 | * |
Christopher M. Marks | 9,153 | * |
James C. Takacs | 37,721(3) | 1.5% |
Kenneth D. Trbovich | 502,598(4) | 20.2% |
Evan H. Wax | 158,733(5) | 6.4% |
All directors, nominees and executive officers as a group | 741,972 | 29.8% |
* | |||||
Less than 1.0%. |
(1) |
(2) |
(3) | Includes 20,058 shares allocated to Mr. Takacs’ account under the ESOT. |
(4) | This amount includes (i) |
Includes 158,615 shares |
EQUITY COMPENSATION PLAN INFORMATION | |||||||||||
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | ||||||||
Equity compensation plans approved by security holders | 108,500 | $3.60 | 0 | ||||||||
Equity compensation plans not approved by security holders | 0 | 0 | 0 | ||||||||
Total | 108,500 | $3.60 | 0 |
Item 13. | Certain Relationships and Related Transactions and Director Independence |
Related Party Transactions
The Company incurred legal fees and Chief Operating Officerdisbursements of approximately $100,000 in 2021 for services provided by a law firm that is owned by Edward C. Cosgrove, Director of the Company, is an inventor or co-inventor of certain issued patents and patent pending applications that are used in the business of a subsidiary of the Company. The patents have been and are currently used by the subject subsidiary on a royalty-free basis with Mr. Trbovich, Jr.’s consent.
Proposed transactions between the Company and a related person are submitted to the Independent Directors which compose the AuditNominating and Corporate Governance Committee for their determinations. In making its determinations, the AuditNominating and Corporate Committee (i.e., Independent Directors) consider, among other factors, whether the proposed transaction is in the Company’s best interest and is on terms no less favorable to the Company than terms generally available from an unaffiliated third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction. Also, the Independent Directors (i.e., Audit Committee)Nominating and Corporate Governance Committee may, at theirits discretion, request an independent appraisal if an independent appraisal has not already been provided. A related party is excluded from participating in the determinations of the AuditNominating and Corporate Governance Committee.
Independent Directors pursuant to
Under the listingcorporate governance standards of the NYSE Amex.American, at least fifty percent of our Directors, and, except in limited circumstances, all of the members of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, must meet the test of “independence” as defined by the NYSE American. The NYSE American standards provide that to qualify as an “independent” director, in addition to satisfying certain bright-line criteria, the Board of Directors must affirmatively determine that a director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board of Directors has an Audit Committee compriseddetermined that each director nominee, other than Messrs. Cosgrove and Farrell, satisfies the bright-line criteria and that no other director or nominee has a relationship with the Company that would interfere with such person’s ability to exercise independent judgment as a member of Dr. Duerig and Mr. Hedges. The Board does not have a standing nominating or compensation committee. Pursuant to Board resolutions, the full Board of Directors approves/ratifies all Director nominees after they are determined by the Independent Directors. Additionally, the Independent Directors determine the compensation of the Chief Executive Officer and all Executive Officers and such determinations are subsequently submitted to the full Board of Directors for approval/ratification.
Item 14. | Principal Accountant Fees and Services |
Auditor Fees and Services
The following table shows the fees paid or accrued by the Company for the audit and other services provided by Freed Maxick CPAs, P.C., (“FM”) (Formerly known as Freed Maxick & Battaglia, CPAs, PC) for 2021 and RSM McGladrey, Inc. for fiscal years 2011 and 2010.
2011 | 2010 | |||||||
Audit Fees (1) | $ | 109,000 | $ | 93,500 | ||||
Tax Service Fees (2) | 45,395 | 52,020 | ||||||
All Other Fees (3) | 1,250 | 3,150 | ||||||
Total | $ | 155,645 | $ | 148,670 |
2021 | 2020 | |||||||
Audit Fees(1) | $ | 230,745 | $ | 218,964 | ||||
Tax Fees(2) | $ | 59,555 | $ | 66,225 | ||||
Total | $ | 290,300 | $ | 285,189 |
(1) | Audit fees represent fees for professional services provided in connection with the audit of the |
(2) | Tax service fees principally included fees for tax preparation, tax consulting services and tax |
Policy for Pre-Approval of Audit and Permitted Non-Audit Services
The Audit Committee pre-approves audit and non-audit services provided by FM and RSM McGladrey, Inc.
PART IV
Statement Schedules |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange |
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SERVOTRONICS, INC. | ||
April 29, 2022 | By | /s/ William F. Farrell, Jr. |
William F. Farrell, Jr. | ||
Chief Executive Officer |