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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Allied Motion Technologies Inc.
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ALLIED MOTION TECHNOLOGIES INC.
495 Commerce Drive, Suite 3
Amherst, New York 14228
| | |
ALLIED MOTION TECHNOLOGIES INC.
495 Commerce Drive, Suite 3
Amherst, New York 14228 |
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 2, 2018
DATE: | | | May 4, 2022 |
TIME: | | | 9:00 a.m. Eastern Time |
ONLINE: | | | www.virtualshareholdermeeting.com/AMOT2022 |
To the Shareholders of Allied Motion Technologies Inc.:
You are hereby notified that the 20182022 Annual Meeting of Shareholders of Allied Motion Technologies Inc. (the “Company”) will be held virtually on Wednesday, May 2, 20184, 2022 at 2:9:00 p.m.a.m. (Eastern Time) at. The meeting can be accessed by visiting www.virtualshareholdermeeting.com/AMOT2022, where you will be able to listen to the Company’s offices, 495 Commerce Drive, Suite 3, Amherst, New York 14228. meeting live, submit questions and vote online.
At this meeting, the shareholders will be asked to act on the following matters:
1. To elect seven directors of the Company;
2. To provide an advisory approval of the compensation of our named executive officers;
3. To ratify the appointment of EKS&H LLP (“EKS&H”) as the Company’s independent registered public accounting firm for the 2018 fiscal year; and
4. To transact such other business as may properly come before the 2018 Annual Meeting or any adjournment thereof.
1.
| To elect seven directors of the Company; |
2.
| To provide an advisory approval of the compensation of our Named Executive Officers; |
3.
| To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the 2022 fiscal year; and |
4.
| To transact such other business as may properly come before the 2022 Annual Meeting or any adjournment thereof. |
| | Voting can be completed in one of four ways: |
| | | | | Returning the proxy card by mail | | | | | | Online at www.proxyvote.com | | | | |
| | | | | Through the telephone at
1-800-690-6903 | | | | | | Attend the annual meeting at:
www.virtualshareholdermeeting.com/AMOT2022 | |
Only shareholders of record at the close of business on March
13, 20189, 2022 are entitled to notice of and to vote at the
20182022 Annual Meeting and any adjournment thereof.
The Board of Directors of the Company extends a cordial invitation to all shareholders to
To attend the
2018 Annual Meeting,
you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. Shares held in your name as
it is important that your sharesthe shareholder of record may be
represented atvoted electronically during the
meeting.Annual Meeting. Shares for which you are the beneficial owner but not the shareholder of record also may be voted electronically during the Annual Meeting. Even if you plan to attend the Annual Meeting
online, we recommend that you
are strongly encouraged to mark, date, sign and mail the enclosedvote by proxy in
advance so that your vote will be counted if you later decide not to participate in the
return envelope provided asAnnual Meeting. The Annual Meeting will begin promptly
as possible.at 9:00 a.m. (Eastern Time). Online check-in will begin at 8:45 a.m. (Eastern Time), and you should allow ample time for the online check-in procedures.
If your shares are held in street name and YOU do not vote your shares, your broker or other nominee generally can no longer vote them for you and your shares will remain unvoted. THEREFORE, IT IS VERY IMPORTANT THAT YOU VOTE YOUR SHARES FOR ALL PROPOSALS.
By Order of the Board of Directors
Joseph P. Kubarek
Secretary | By Order of the Board of Directors
|
| 
|
| Joseph P. Kubarek
Secretary
|
DATED:
March 29, 2018April 6, 2022
Important Notice Regarding the Internet Availability of Proxy Materials: This Proxy Statement and the Company’s Annual Report are available on the Internet at
https://materials.proxyvote.com/019330.THIS IS AN IMPORTANT MEETING. ALL SHAREHOLDERS ARE URGED TO VOTE.
019330.
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QUESTIONS
AND ANSWERS ABOUT
THE
20182022 ANNUAL MEETING
Why did I
receive this proxy?
The Board of Directors of Allied Motion Technologies Inc. (the “Company”) is soliciting proxies to be voted at the Annual Meeting of Shareholders. The Annual Meeting will be held virtually on Wednesday, May 2, 2018,4, 2022, at 2:9:00 p.m.a.m. (Eastern Time) at. The meeting can be accessed by visiting www.virtualshareholdermeeting.com/AMOT2022, where
you will be able to listen to the
Company’s offices, 495 Commerce Drive, Suite 3, Amherst, New York 14228.meeting live, submit questions and vote online. This proxy statement summarizes the information you need to know to vote by proxy or
in personto virtually attend and vote your shares at the Annual Meeting. You do not need to
virtually attend the Annual Meeting in
person in order to vote.
All shareholders of record as of the close of business on
Tuesday,Wednesday, March
13, 20189, 2022 (the “Record Date”) are entitled to vote at the Annual Meeting.
What is the
quorum for the Annual Meeting?
A quorum at the Annual Meeting will consist of a majority of the votes entitled to be cast by the holders of all shares of Common Stock outstanding on the Record Date. No business may be conducted at the Annual Meeting if a quorum is not present. Broker non-votes (shares held in street name for which the broker indicates that instructions have not been received from the beneficial owners or other persons entitled to vote) and abstentions will be counted as shares present in determining whether a quorum is present. As of the Record Date,
9,426,01215,452,717 shares of Common Stock were issued and outstanding.
On March 10, 2021, the Board of Directors approved a 3-for-2 common stock split to be paid in the form of a stock dividend to holders of record on April 16, 2021. The additional shares were issued on April 30, 2021. All share and per share information presented in this proxy statement have been adjusted to reflect the stock split on a retrospective basis for all periods presented.
How
many votes do I have?
Each share of Common Stock outstanding on the Record Date is entitled to one vote on each item submitted to you for consideration.
What is the difference between a
shareholder of record and a beneficial owner of shares held in street name?
Shareholder of Record.
If your shares are registered directly in your name with the Company’s transfer agent, American Stock Transfer & Trust Company, you are considered the shareholder of record with respect to those shares.
Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, then you are the
beneficial owner of shares held in “street name.” The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account.
If I am a
shareholder of record of Common Stock, how do I vote?
If you are a shareholder of record, you may vote by mailing a completed proxy card, or you may vote 24 hours a day via the internet or telephone. To vote by mailing a proxy card, please sign and return the enclosed proxy card in the enclosed prepaid and self-addressed envelope. To vote via the internet or telephone, follow the instructions on the enclosed vote
instruction form. Your shares will be voted at the Annual Meeting in the manner you directed.
If you vote by proxy and do not provide direction on a proposal, the proxy will be voted with the Board’s recommendations. You may also
attend the virtual Annual Meeting and vote your shares
in person atduring the
Annual Meeting. If you are a shareholder of record, you may request a ballot at the Annual Meeting.meeting.
If I am a beneficial owner of shares held in street name, how do I vote?
If you are the beneficial owner of shares held in street name, you will receive instructions from the brokerage firm, bank, broker-dealer or other similar organization (the “shareholder of record”) that must be followed for the shareholder of record to vote your shares per your instructions.
You may complete and return the voting instruction form in the self-addressed postage paid envelope provided, or you may vote 24 hours a day via the internet or telephone by following the instructions on the enclosed vote instruction form.If you hold your shares in street name and do not instruct your bank or broker how to vote in the election of directors, no votes will be cast on your behalf. Your bank or broker will, however, continue to have discretion to vote any uninstructed
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shares on the appointment of
EKS&HDeloitte & Touche LLP (Proposal
Three)3). Please ensure that you complete the voting instruction card sent by your bank or broker.
If your shares are held in street name and you wish to vote in person atalso may attend the virtual Annual Meeting you must obtain a proxy issued inand vote your name fromshares during the shareholder of record and bring it with you to the
meeting. We recommend that you vote your shares in advance as described above so that your vote will be counted if you later decide not to attend the Annual Meeting.
How can I participate in the virtual Annual Meeting? You may participate in the virtual Annual Meeting and vote your shares during the meeting by visiting our Annual Meeting website at www.virtualshareholdermeeting.com/AMOT2022 . To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. Shares held in your name as the shareholder of record may be voted electronically during the Annual Meeting. Shares for which you are the beneficial owner but not the shareholder of record also may be voted electronically during the Annual Meeting. Even if you plan to participate in the Annual Meeting online, we recommend that you vote by proxy in advance as described above so that your vote will be counted if you later decide not to participate in the Annual Meeting. The Annual Meeting will begin promptly at 9:00 a.m. (Eastern Time). Online check-in will begin at 8:45 a.m. (Eastern Time), and you should allow ample time for the online check-in procedures.
The virtual meeting platform is fully supported across browsers (Microsoft Edge, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong WiFi connection wherever they intend to participate in the meeting. Participants should also give themselves plenty of time to log in and ensure that they can hear streaming audio prior to the start of the meeting.
If you wish to submit a question during the Annual Meeting, you may log into the virtual meeting platform with your control number at www.virtualshareholdermeeting.com/AMOT2022, type your question into the “Ask a Question” field, and click “Submit.”
Questions pertinent to meeting matters will be answered during the meeting, subject to time constraints. Questions regarding personal matters, including those related to employment, are not pertinent to meeting matters and therefore will not be answered. Any questions pertinent to meeting matters that cannot be answered during the meeting due to time constraints will be posted online and answered at www.alliedmotion.com/investor-relations/. The questions and answers will be available as soon as practical after the meeting and will remain available until one week after posting.
If you encounter any difficulties while accessing the virtual meeting during the check-in or meeting time, a technical assistance phone number will be made available on the virtual meeting registration page 15 minutes prior to the start time of the meeting.
You will be voting on the following proposals:
·
Proposal
One:1: the election of seven Directors of the Company;
·
Proposal
Two:2: an advisory vote on the compensation of our
named executive officers;Named Executive Officers; and
·
Proposal
Three:3: the ratification of
EKS&HDeloitte & Touche LLP as the Company’s independent registered public accounting firm for the
20182022 fiscal year.
Will there be any other items of business on the agenda?
We do not expect any other items of business because the deadline for shareholder proposals and nominations has passed. Nonetheless, in case there is an unforeseen need, your proxy gives discretionary authority to Richard S. Warzala
and Richard D. Federico with respect to any other matters that might be brought before the Annual Meeting. Those persons intend to vote that proxy in accordance with their best judgment.
How many votes are required to act on the proposals?
The holder of each outstanding share of Common Stock is entitled to one vote for each share of Common Stock on each matter submitted to a vote at a meeting of shareholders.
Pursuant to our Amended and Restated Articles of Incorporation and Bylaws, directors will be elected by the affirmative vote of the majority of the votes cast with respect to such director’s election.
Approval of Proposals
Two2 and
Three3 requires an affirmative vote by a majority of the votes cast on each proposal.
For purposes of each proposal, abstentions and broker non-votes, if any, will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered present for the purpose of determining the presence of a quorum.
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What happens if I return my proxy card without voting on all proposals?
When the proxy is properly executed and returned, the shares it represents will be voted at the Annual Meeting in accordance with your directions. If the signed card is returned with no direction on a proposal, the proxy will be voted with the Board’s recommendations.
Can I change my vote after I
return my proxy card?have voted?
You can revoke your proxy and change your vote at any time prior to the voting thereof at the Annual
Meeting.Meeting, subject to the voting deadlines that are described on the proxy card or voting instruction form, as applicable. You can
do this by:·revoke your vote:
By voting again by Internet or by telephone (only your last Internet or telephone proxy submitted prior to the meeting will be counted);
By filing with the Secretary of the Company a written revocation or signing and submitting another proxy with a later date, or
·
By virtually attending the Annual Meeting, withdrawing the proxy and voting
in person.If your shares are held by a nominee and you seek to vote shares in person atduring the Annual Meeting, you must bring to the Annual Meeting a written statement from the nominee confirming the shareholder’s beneficial ownership of a stated
number of shares and that such shares have not been voted by the nominee. Meeting.
Your
virtual attendance at the Annual Meeting will not
in itselfautomatically revoke your
proxy.proxy unless you vote again. If your shares are held in street name, we also recommend that you contact your broker, bank or other nominee for instructions on how to change or revoke your vote.
Will anyone contact me regarding this vote?
Solicitation of proxies for use at the Annual Meeting may be made in person or by mail, telephone or telegram, by directors, officers and regular employees of the Company. Such persons will receive no special compensation for any solicitation activities. We will request banking institutions,
brokerage firms, custodians, trustees, nominees and fiduciaries to forward solicitation materials to the beneficial owners of Common Stock held of record by such entities, and we will, upon the request of such record holders, reimburse reasonable forwarding expenses.
Who has paid for this proxy solicitation?
The Company has paid the entire expense of this proxy statement and any additional materials furnished to shareholders.
May shareholders ask questions at the Annual Meeting?
Yes. There will be time allotted at the end of the meeting when Company representatives will answer questions from the floor.
How can I obtain a copy of this year’s Annual Report on Form 10-K?
A copy of the Company’s 20172021 Annual Report to Shareholders, including financial statements for the fiscal year ended December 31, 2017,2021, accompanies this Proxy Statement. The Annual Report, however, is not part of the proxy solicitation material. A copy of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) may be obtained free of charge by
writing to Allied Motion Technologies Inc., 495 Commerce Drive, Suite 3, Amherst, New York 14228, Attention: Secretary or by accessing the
“SEC“Investors/SEC Filings” section of the Company’s website at www.alliedmotion.com. In addition, the Proxy Statement and Annual Report are available on the internet at
https://materials.proxyvote.com/019330.019330.
What does it mean if I receive more than one proxy card?
It means that you have multiple accounts at the transfer agent or with stockbrokers. Please complete and
return vote ALL proxy cards to ensure that all your shares are voted.
When was this proxy statement mailed?
This proxy statement, the enclosed proxy card and the Annual Report were mailed to shareholders beginning on or about April
2, 2018.6, 2022.
Can I find additional information on the Company’s website?
Yes. Our website is located at www.alliedmotion.com. Although the information contained on our website is not part of this proxy statement, you can view additional information on the website, such as our code of ethics, corporate governance principles, charters of board committees and reports that we file with the SEC. A copy of our code of ethics
and business conduct policy, corporate governance principles and each of the charters of our board committees may be obtained free of charge by writing to Allied Motion Technologies Inc., 495 Commerce Drive, Suite 3, Amherst, New York 14228, Attention: Secretary.
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CORPORATE GOVERNANCE AND BOARD MATTERS
Director Qualifications and Biographical Information
The biography of each director nominee 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 Governance and Nominating Committee to conclude that the person should serve as a member of our Board of Directors.
Richard D. Federico, age 63—Mr. Federico has over thirty-seven
| | Robert B. Engel
Age: 68
Director Since: 2019. | | | Mr. Engel serves as Chief Executive Officer and Managing Director of BLT Advisory Services, LLC, a boutique advisory firm he formed in 2017 which provides guidance for business transformation, mergers and acquisitions, brand building and governance, as well as leadership development. Prior to BLT Advisory Services, Mr. Engel was in the banking industry for more than 30 years, including 17 years at CoBank, ACB in Denver, Colorado, serving first as President and Chief Operating Officer and subsequently being named President and Chief Executive Officer, responsible for leading the bank’s domestic and global businesses. Prior to this, Mr. Engel was with HSBC Bank USA in Buffalo, New York for 14 years, where he served in positions of increasing responsibility, ultimately becoming the Chief Banking Officer. Prior to moving to the banking industry, Mr. Engel began his public accounting career with Deloitte & Touche, and then KPMG, rising to the position of Senior Audit Manager.
Mr. Engel is currently the Chairman of the Board at Alaska Power & Telephone, where he serves on the Audit Committee and as Chairman of the Compensation Committee, and Heartland Financial USA, Inc. (HTLF) where he serves on the Audit Committee and as Chairman of the Risk Committee. He is Chairman of the Board of Trustees at Regis University in Denver, Colorado. Mr. Engel is a recipient of the Ellis Island Medal of Honor. His experience in board and executive leadership, strategic planning, risk management, international operations, mergers and acquisitions, and corporate governance matters gives him strong insight into the issues facing our company’s businesses and markets. |
| | Richard D. Federico
Age: 67
Director Since: 2012 | | | Mr. Federico has over forty years of operational, strategy and investment experience and has served as Lead Director for the past five years. Since March 2016 Mr. Federico has been the Chairman and CEO of MicroSonic Solutions LLC, a science and technology company. In addition, from November 2012 he has been the Founder and Chairman at Cetan Partners, an investment and advisory firm. From June 2014 to April 2016 he was a Partner and later a Senior Advisor at TZP Group, a leading mid-market private equity firm, where he led the growth advisory practice. He spent the prior ten years as a Senior Advisor and Managing Director in private equity with Sterling Partners, where he served as an investment partner and additionally worked with Sterling’s portfolio investments to build, capture and maximize best-in-class practices across the firm and instituted effective governance at the portfolio level. His background also includes senior management positions with companies including Thermo Fisher, The Millard Fillmore Health System, The Science Kit Group and KPMG. He currently is and has been involved with numerous private and non-profit boards. His risk management, operational, financial, technology, cyber security, environmental security and investment experience, knowledge of capital markets and experience on other public and private company boards prepare him to give the Board his views on strategic, operational, financial, advanced technology and environmental related matters. |
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Corporate Governance and investmentBoard Matters
| | Steven C. Finch
Age: 64
Director Since: 2021 | | | Mr. Finch is President of Manufacturing and Community Engagement at Viridi Parente, Inc., a developer and manufacturer of environmentally conscious energy usage and storage products, including battery powered energy delivery systems for heavy equipment, and energy storage and power management systems. He is the former Plant Manager of the General Motors (“GM”) Tonawanda Engine Plant, one of Western New York’s largest manufacturers with approximately 1,600 employees. Mr. Finch began his 41-year career with GM in 1976 and he held several assignments with increasing responsibility at various GM facilities outside Buffalo before becoming Tonawanda Engine Plant Manager in 2007. He was a previous board member and Senior Vice President of the Automobile Association of America Western and Central New York. He is currently an independent director at National Fuel Gas Company, where he serves on the Audit Committee and Nominating/Corporate Governance Committee. Through his extensive career, Mr. Finch developed expansive and diverse experience in manufacturing and customer relations, as well as in capital and labor management. His experience in senior level oversight during periods of significant industry challenge and disruption provides an important perspective on organizational transformation and the management of regulatory and economic change. |
| | James J. Tanous
Age: 74
Director Since: 2014 | | | Mr. Tanous is currently the Executive Director of the Prentice Family Foundation, a not-for-profit foundation whose primary mission is to promote the economic development of the Western New York area, a position he has held since January 1, 2014. From April 2007 through June 2013 he served as Executive Vice President, Secretary and General Counsel of Erie Indemnity Company, a publicly traded Fortune 500 company that manages the property and casualty and life insurance companies that comprise the Erie Insurance Group. Prior to joining Erie Indemnity Company, Mr. Tanous was a Partner and Chairman of Jaeckle Fleischmann & Mugel, LLP, a law firm headquartered in Buffalo, New York where he represented numerous public and private companies for over 30 years. His decades of experience as a counselor to public and private companies and broad based legal expertise are important to the Board of Directors. |
| | Nicole R. Tzetzo
Age: 48
Director Since: 2021 | | | Ms. Tzetzo serves as Chief Operating Officer of Tzetzo Companies LLC, a residential and commercial real estate company. From 2016 to 2018 she served as Vice President of Finance and Administration at the Ralph C. Wilson, Jr. Foundation where she was responsible for all of the Foundation’s legal and financial operations. She was a Partner at Hodgson Russ, LLP (2019 to March 2021) and Jaeckle Fleischmann & Mugel, LLP (2006 to 2016), where she represented numerous for-profit and not-for-profit clients on general tax and business matters. She currently is and has been involved with numerous private and non-profit boards. Ms. Tzetzo has served in management and leadership roles throughout her legal career. Her significant business and legal experience make her highly qualified to serve as a director. |
Allied Motion Technologies Inc. | 2022 Proxy Statement | | 5 |
experience. He has served as a director since February 2012TABLE OF CONTENTS
Corporate Governance and Board Matters
| | Richard S. Warzala
Age: 68
Director Since: 2006 | | | Mr. Warzala has a strong management and technical background in the motion control industry and has served as Lead Director for the past three years. Since March 2016 Mr. Federico has been the Chairman of the Board since February 2014. Mr. Warzala joined Allied Motion as President and Chief Operating Officer in May 2002 and was appointed President and Chief Executive Officer in May 2009. Prior to joining Allied Motion, Mr. Warzala was President of the Motion Components Group of Danaher Corporation and held various positions at American Precision Industries Inc., including Corporate Vice President and President of its API Motion Division. Pursuant to his employment agreement, as long as Mr. Warzala is Chief Executive Officer and is willing to serve, the Board of Directors will nominate him for election to the Board. His leadership experience and Company and industry knowledge, with 32 years of motion experience, provide valuable insight to the Board of Directors in formulating and executing the Company’s strategy. Mr. Warzala has also served on the Board of Directors of Astronova, Inc. since December 2017 where he serves as the Lead Director and Chair of the Compensation Committee. |
| | Michael R. Winter
Age: 68
Director Since: 2014 | | | Mr. Winter is a former partner in the Buffalo, New York office of PricewaterhouseCoopers LLP (“PwC”), serving in that role from 1987 until his retirement in June 2014. During his tenure, Mr. Winter was responsible for leading the delivery of assurance services to public entities with experience serving many sectors including Consumer and Industrial Products Manufacturing, Energy and Healthcare. Since 2010 he was also a member of the PwC National Office based in New Jersey, which serves as support for all PwC U.S. practice offices. Mr. Winter served on the Board of Directors of Gas Natural, Inc. (EGAS) from October 2014 through its sale in August 2017. His accounting and business expertise, including an in-depth understanding of the preparation and analysis of financial statements, makes him highly qualified to serve as a director. |
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Corporate Governance and CEO of Microsonic Solutions LLC, a science and technology company. In addition, from November 2012 he has been the Founder and Chairman at Cetan Partners, an investment and advisory firm. From June 2014Board Matters
Recently adopted Nasdaq listing requirements require each listed company to
April 2016 he was a Partner and later a Senior Advisor at TZP Group, a leading mid-market private equity firm, where he led the growth advisory practice. He spent the prior ten years as a Senior Advisor and Managing Director in private equity with Sterling Partners, where he served as an investment partner and additionally worked with a number of Sterling portfolio investments to build, capture and maximize best-in-class practices across the firm and instituted effective governance at the portfolio level. His background also includes senior management positions with companies including Fisher Scientific, The Millard Fillmore Health System, The Science Kit Group and KPMG. He currently is and has been involved with numerous private and non-profit boards. His operational, financial and investment experience, knowledge of capital markets and experience on other public and private company boards prepare him to give the Board his views on strategic, operational and financial matters.Gerald J. (Bud) Laber, age 74—Mr. Laber has served as a director of the Company since November 2010. He has been a private investor since 2000, when he retired after 33 years of service with Arthur Andersen LLP. He was an audit partner with Arthur Andersen LLP from 1980 until retiring in 2000. Mr. Laber is a Certified Public Accountant and is a member of the American Institute of Certified Public Accountants and the Colorado Society of Certified Public Accountants. Mr. Laber is currentlyhave, or explain why it does not have, two diverse directors on the board, of directorsincluding at least one diverse director who self-identifies as female and chairone diverse director
who self-identifies as an underrepresented minority or LGBTQ+ (subject to the exceptions). Our current board composition complies with the Nasdaq diversity requirement.
The table below provides certain highlights of the
audit committee and membercomposition of our board members, each of whom are nominees for election at the Annual Meeting. Each of the
compensation and governance committees of Scott’s Liquid Gold. He was on the board and chair of the audit committee and member of the compensation and governance and nominating committees for Boulder Brands Inc. from May 2005 through January 2016 when the company was acquired. He served as President of the Catholic Foundation of Northern Colorado from January 2008 until November 2012. He previously served on the Board of Directors and as Chair of the Audit Committee of Spectralink Corporation from April 2004 to March 2007 when the company was acquired, and served on the Board of Directors and Audit Committee of Applied Films Corporation from July 2004 to July 2007 when the company was acquired. He brings to the Board extensive experience in accounting, financial matters and strategic planning and his experience as a director of other public companies gives him insight into governance and related best practices which enable him to make significant contributions as a Board member.Richard D. Smith, age 70—Mr. Smith has served as a director of the Company since August 1996. Mr. Smith has broad executive management experience with the Company and extensive knowledge and experience in accounting and financial matters. He served as Chief Financial Officer from June 1983 until December 1, 2012, as Chief Executive Officer from August 1998 until May 2009 and as Executive Chairman of the Board of Directors from May 2009 until his retirement in March 2013. Mr. Smith served as non-executive Chairman of the Board from March 2013 until February 2014. Pursuant to Mr. Smith’s consulting agreement with the Company, the Board shall nominate him for election to the Board as long as he has not been terminated and is willing to serve on the Board of Directors. He provides valuable insight to the Board with respect to the historical and future direction of the Company based on his many years of experience on the Board together with his decades of experiencecategories included in the industry.
James J. Tanous, age 70—Mr. Tanousbelow table has servedthe meaning as a director of the Company since May 2014. Heit is currently the Executive Director of the Prentice Family Foundation, a not-for-profit foundation whose primary mission is to promote the economic development of the Western New York area, a position he has held since January 1, 2014. From April 2007 through June 2013 he served as Executive Vice President, Secretary and General Counsel of Erie Indemnity Company, a publicly traded Fortune 500 company that manages the property and casualty and life insurance companies that comprise the Erie Insurance Group. Prior to joining Erie Indemnity Company, Mr. Tanous was a Partner and Chairman of Jaeckle Fleischmann & Mugel, LLP, a law firm headquarteredused in Buffalo, New York where he represented numerous public and private companies for over 30 years. His decades of experience as a counselor to public and private companies and broad based legal expertise are important to the Board of Directors.
Timothy T. Tevens, age 61—Mr. Tevens has served as a director of the Company since June 2017. Mr. Tevens recently retired after serving nineteen years as director and chief executive officer of Columbus McKinnon Corporation (NASDAQ: CMCO), a global leader in material handling products, technologies, and services. He had initially joined Columbus McKinnon in 1991 as Vice President, Information Services, and was appointed chief operating officer in 1996. Prior to joining Columbus McKinnon, Mr. Tevens spent more than ten years in various management consulting capacities with Ernst & Young LLP. Mr. Tevens served on the Board ofNasdaq Rule 5605(f).
| | Part I: Gender Identity | | | | | | | | | | | | | |
| | Directors | | | 1 | | | 6 | | | - | | | - | |
| | Part II: Demographic Background | | | | | | | | | | | | | |
| | African American or Black | | | - | | | 1 | | | - | | | - | |
| | Alaskan Native or Native American | | | - | | | - | | | - | | | - | |
| | Asian | | | - | | | - | | | - | | | - | |
| | Hispanic or Latinx | | | - | | | - | | | - | | | - | |
| | Native Hawaiian or Pacific Islander | | | - | | | - | | | - | | | - | |
| | White | | | 1 | | | 5 | | | - | | | - | |
| | Two or More Races or Ethnicities | | | - | | | - | | | - | | | - | |
| | LGBTQ+ | | | - | | | - | | | - | | | - | |
| | Did Not Disclose Demographic Background | | | - | | | - | | | - | | | - | |
Independent Directors
of Zep, Inc. (NYSE: ZEP) from December 2007 through its sale in June 2015. His extensive experience in areas such as industrial distribution, information technology, mergers and acquisitions, business integration, international operations, manufacturing processes and sourcing led the Board to conclude that he should serve as a director.Richard S. Warzala, age 64—Mr. Warzala has a strong management and technical background in the motion control industry and has served as a director of the Company since August 2006 and as Chairman of the Board since February 2014. Mr. Warzala joined Allied Motion as President and Chief Operating Officer in May 2002 and was appointed President and Chief Executive Officer in May 2009. Prior to joining Allied Motion, Mr. Warzala was President of the Motion Components Group of Danaher Corporation and held various positions at American Precision Industries Inc., including Corporate Vice President and President of its API Motion Division. Pursuant to his employment agreement, as long as Mr. Warzala is Chief Executive Officer and is willing to serve, the Board of Directors will nominate him for election to the Board. His leadership experience and Company and industry knowledge, with 32 years of motion experience, provide valuable insight to the Board of Directors in formulating and executing the Company’s strategy. Mr. Warzala has also served on the Board of Directors of Astronova, Inc. since December 2017.
Michael R. Winter, age 64—Mr. Winter was appointed a director of the Company in July 2014. Mr. Winter is a former partner in the Buffalo, New York office of PricewaterhouseCoopers LLP (“PwC”), serving in that role from 1987 until his retirement in June 2014. During his tenure, Mr. Winter was responsible for leading the delivery of assurance services to public entities with experience serving many sectors including Consumer and Industrial Products Manufacturing, Energy and Healthcare. Since 2010 he was also a member of the PwC National Office based in New Jersey, which serves as support for all PwC U.S. practice offices. His accounting and business expertise, including an in-depth understanding of the preparation and analysis of financial statements, makes him highly qualified to serve as a director.
Independent Directors
Under the corporate governance standards of the Nasdaq Global Market, at least a majority of our Directors, and, except in limited circumstances, all of the members of our Audit Committee, Human Capital and Compensation Committee and Governance and Nominating Committee, must meet the test of “independence” as defined by Nasdaq. The Nasdaq 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 has no material relationship with the Company. The Board of Directors has determined that each director nominee, other than Mr. Warzala,
and Mr. Smith, 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 our Board.
Board
Leadership StructureRichard S. Warzala serves as the Company’s Chairman of the Board and also serves as President and Chief Executive Officer of the Company. The Company believes that having Mr. Warzala serve as both an executive officer and as Chairman demonstrates to the Company’s employees and other stakeholders that the Board of Directors is under strong leadership, with a single person setting the tone and having primary responsibility for leading the Board of Directors. The Company believes this unity of leadership eliminates the potential for confusion or duplication of efforts and provides clear leadership for the Company. In addition, the Board of Directors recognizes that, given Mr. Warzala’s familiarity with the Company and his long-standing experience with the Company, it is valuable to have him lead board discussions.
To provide for an additional independent leadership role,expertise and oversight, the Board of Directors has designated Richard D. Federico, as Lead Director. The Lead Director is an independent director chosen by the Board. Under our Corporate Governance Principles, the Lead Director’s responsibilities include: providing leadership to ensure that
the Board functions independently of management and the non-independent directors, presiding at meetings of the Board of Directors at which the Chairman is not present, including executive sessions of the independent directors; serving as liaison between the Chairman and the independent
directors;directors with respect to Board agenda items, the information provided to the independent directors, the resources available to Board members and similar matters; convening meetings of the independent directors; and consulting with the Chairman on matters relating to Board of Director performance and corporate governance.
Another component of our leadership structure is the active role played by our independent directors in overseeing the Company’s business, both at the Board and Committee level. Fivelevels. Six of the seven director nominees are considered independent under the corporate governance standards of the Nasdaq Global Market. All of our Directors are freeencouraged to suggest the inclusion of items on the agenda for meetings of our Board of Directors or raise subjects that are not on the agenda for that meeting. In addition, our Board
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Corporate Governance and Board Matters
of Directors and each committee have complete and open access to any member of management and the authority to retain independent legal, financial and other advisors as they deem appropriate without consulting or obtaining the approval of any member of management. Our Board of Directors also holds regularly scheduled executive sessions of only independent Directors, led by the Lead Director, in order to promote discussion among the independent Directorsdirectors and assure independent oversight of management. Moreover, our Audit Committee, Human Capital and Compensation Committee and Governance and Nominating Committee, all
of which are comprised entirely of independent Directors, also perform oversight functions independent of management.
The Company believes its leadership structure is the most effective leadership structure for the Board of Directors at this time. However, the Board of Directors recognizes that no single leadership model is appropriate for a board at all times.
Accordingly, the Board of Directors may in the future consider a different leadership structure, including a structure providing for a Chairman of the Board who is not an executive officer of the Company.
Shareholder
Communication With with the BoardWe provide an informal process for shareholders to send communications to the Board of Directors. Shareholders who wish to contact the Board of Directors or any of its members may do so in writing to Allied Motion Technologies Inc.,
495 Commerce Drive, Suite 3, Amherst, New York 14228. Correspondence directed to an individual board member will be referred to that member. Correspondence not directed to a particular board member will be referred to the Lead Director.
Committees and Meeting Data
The Board of Directors has a standing Audit Committee,
Human Capital and Compensation Committee and Governance and Nominating Committee. Each member of each of these committees is “independent” as that term is defined in the Nasdaq listing standards. The Board has adopted a written charter for each of these committees, which is available on our web site at
www.alliedmotion.com.www.alliedmotion.com.
The Audit Committee of our Board of Directors oversees the Company’s financial reporting on behalf of the Board and is responsible for the appointment, replacement, compensation and oversight of the work of the Company’s independent auditors. The Audit Committee also reviews the Company’s annual and quarterly reports filed with the SEC. The Audit Committee held
nineseven meetings during
20172021 and consisted of Messrs. Winter
(Chairman)(Chair),
Laber, TanousEngel, Finch and
Tevens (since August 1, 2017).Tanous. Each member of the Audit Committee meets the current independence and experience requirements of Nasdaq and the SEC. Messrs.
LaberWinter and
WinterEngel have each been designated as an “Audit Committee financial expert” in accordance with the SEC rules and regulations and
qualifieseach qualify as a financially sophisticated audit committee member under the Nasdaq listing standards. See “Report of the Audit Committee” below.
The Human Capital and Compensation Committee of our Board of Directors has the principal responsibility to make decisions concerningoversee the compensation of the Company’s management employees including its executive officers, and to make recommendations to the Board concerning the compensation of the Board of Directors. The Human Capital and Compensation Committee also reviews and approves to the Board for their approval all awards granted under the Company’s stock incentive plan and performs other functions regarding compensation as the Board may delegate. In addition, the Human Capital and Compensation Committee (i) reviews and oversees the Company’s human capital management strategies, policies
and programs, including initiatives to enhance the engagement, diversity, skills, bench strength and recognition of the Company’s human capital, (ii) monitors and receives reports from management on no less than a semi-annual basis on the progress of the Company’s strategies, efforts and initiatives to promote diversity, equity and inclusion and an environment that is free from discrimination, prejudice and retribution, and (iii) reviews and assists the Board in developing succession plans for the CEO and other executive officers. The
Human Capital and Compensation Committee met
sixeight times during
20172021 and consisted of Messrs. Federico
(Chairman since August 22, 2017)(Chair),
LaberEngel and
Tevens (since August 1, 2017). Alexis P. Michas was the chairman of the Compensation Committee until his resignation from the Board on August 22, 2017.Finch and Ms. Tzetzo.
The Governance and Nominating Committee of our Board of Directors (i) monitors and oversees matters of corporate governance, including the evaluation of Board performance and processes and the “independence” of directors, and (ii) selects, evaluates and recommends to the Board qualified candidates for election or appointment to the Board and each Committee of the Board.
In addition, the Governance and Nominating Committee assists the Board in its oversight of the Company’s processes for management and communication of key risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks. The Governance and Nominating Committee also oversees the Company’s (i) strategies, activities and policies regarding sustainability and other environmental, social and governance related matters and (ii) legal and regulatory compliance and its policies, procedures and programs designated to promote and monitor legal and regulatory compliance. The Governance and Nominating Committee has primary responsibility to oversee compliance with the Company’s Code of Ethics and Business Conduct and assists the Board in reviewing related person transactions. The committee met
tenseven times during
20172021 and consisted of Messrs. Tanous
(Chairman)(Chair), Federico,
Winter and
Winter.BoardMs. Tzetzo.
Risk Oversight
of Risk Management The Board of Directors oversees ourbelieves that the control and management of risk are primarily responsibilities of senior management process. Thisof the Company. The entire Board of Directors is responsible for oversight is primarily accomplished throughof this senior management function. In certain instances, the Board’s committees and management’s reporting processes. We do not have a formalBoard of Directors has delegated oversight of specific risk committee; however, ourcategories to individual Board Committees. The Audit Committee is responsible for overseeingthe oversight of risks arising out of accounting, financial, reportingcapital markets, and technology related activitiesactivities. The Human Capital and is primarily responsible for ensuring that the Board exercises adequate oversight of
Compensation Committee annually reviews the Company’s enterprise risk management process. Our Compensation Committee reviews compensation agreementsarrangements to confirm that compensation plans, especially incentive pay arrangements, do not encourage or create opportunities for unnecessary risk-taking and ourrisk-taking. The Governance and Nominating Committee is tasked with the oversight of the Company’s regulatory and shareholder activities, including policies regarding sustainability and other environmental, social and governance related matters. The Human Capital and Compensation
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Corporate Governance and Board Matters
Committee also has oversight on broader human capital activities such as succession planning, diversity, equity, and inclusion. The Governance and Nominating Committee also assists the Board in its oversight of the Company’s process for management and communication of key risks facing the Company, as well as the guidelines, policies and processes for monitoring and mitigating such risks. Each Committee reports to the entire Board at every regular board meeting on its activities. The full board has risk oversight responsibility for broader strategic activities such as growth initiatives, supplier and customer relationships, and new product development.
In connection with the oversight of risk management, the Board and its Committees regularly receive presentations from senior management of the Company with respect to the Company’s risk categories, risk assessment, and identification processes. Management regularly reviews with the Board or a Committee, the appropriate risk appetite, and risk mitigation strategies. The Board also is regularly updated on the Company’s strategy and strategic goals, which includes management’s analysis of the key risk categories that management analyzed in connection with the strategic planning and plan update processes. The Board and its Committees regularly communicate with or are provided with reports regarding risks from the Company’s independent accountants, compensation consultants, outside and internal
counsel and other professional advisers. The Board and its Committees are continually evaluating the significant risks faced by the Company and the appropriate Committee or Board to oversee the Company’s strategies for the identification, measurement and mitigation of such risks. In addition to the matters listed in the description of each Committee included above, the risks that are monitored by the Board or a Committee on a regular basis include but are not limited to:
Strategic risks, such as customer market concentration, acquisition growth, organic growth, new product development related matters, and technology development and obsolescence;
Technology risks such as cybersecurity and information technology systems;
Financial risks such as accounting, finance, capital markets, foreign exchange and related risks;
Regulatory and legal risks; and
Human capital risks such as strategic and emergency succession planning, talent development, diversity, equity and inclusion.
Environmental, Social and Governance (“ESG”) Matters. The Company is committed to responsible and sustainable business practices that consider the best interests of our customers, employees, suppliers, communities, and other stakeholders. As a global company, our stakeholders and business locations are diverse. The Company fully understands the expectations associated with this diversity and policies are in place to provide the fundamental practices for our daily operation and other responsibilities of all the Company’s employees.
The Company has a Corporate Environmental, Health & Social Responsibility Policy that is predicated upon creating value for our customers through the development and application of “Motion Solutions That Change the Game” within a framework that recognizes and encourages us to create value and address the impact of all we do on a much broader group of stakeholders. This policy, along with other information regarding the Company’s Environmental, Health and Social responsibility disclosures is located on the Company’s website at www.alliedmotion.com/environmental-health-and-social-
responsibility/. The Company creates value for its constituencies as follows:
To Shareholders, by increasing our core value in a lawful manner and our commitment to compliance that is socially and environmentally responsible and sustainable. The Company’s published Code of Ethics and Business Conduct reflects our commitment to honest, ethical, and fair conduct.
To Customers, by our focus on winning and retaining customers who adhere to business principles that are consistent with our own, by developing and providing products and services that offer value while insuring consideration of safety and environmental impacts.
To Employees, by promoting their involvement, development, and participation at all levels, stimulating creativity, innovation, and teamwork, and demonstrating
continual improvement for a safe and environmentally friendly workplace. As reflected in our Code of Ethics and Business Conduct, we are committed to respecting the human rights of all employees, whether directly employed or subcontracted. We provide and maintain safe conditions of work, with competitive terms and conditions of employment. We comply with applicable discrimination laws by selecting, developing, and retaining employees on the basis of ability and qualifications for the work to be performed, without any form of discrimination or prejudice under any circumstances. We insist that sexual harassment, rage, violence, or any other inappropriate conduct that creates an intimidating, threatening or otherwise offensive environment does not take place under any circumstances in our workplaces. We encourage the involvement of employees in the planning and direction of their work and provide the appropriate training for success in fulfilling their job responsibilities.
To Suppliers and Business Partners, by working pro-actively for the development of long-term partnerships based upon integrity and co-operation, striving for improved and environmentally responsible equipment, materials, and services. We have a published Supplier Quality Manual that requires that suppliers and business partners follow the same environmental, health and social responsibility policies that the Company adheres to.
To the Community, by reducing the environmental impact of our activities, products, and services through prevention of pollution, promotion of the safety and health of our employees and the public. We give proper regard to the
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health, safety, and the environment of the local communities in which we operate, and are sensitive to and supportive of local cultural, social, educational and economic needs.
The following are examples of things that the Company does in the conduct of its business that further its Social Responsibility Policy:
Environmental - The Company is committed to minimizing the impact of its activities on the environment. The Company believes it meets or exceeds all governmental environmental regulations in all jurisdictions in which it operates. All the Company’s significant manufacturing facilities have ISO 14001 certifications. The Company continues to assess its Environmental Management System to evaluate its risks and impact on various climate related areas such as carbon emissions, energy consumption, water usage, and biodiversity. This assessment includes the policies and practices of our value chain including suppliers and vendors. We continue to monitor relevant guidance on the measurement and disclosure of environmental impacts, including those from the Securities and Exchange Commission.
Employee Health and Safety – The Company complies in all respects with the national and local laws of the jurisdictions in which we operate regarding workers safety and health. The Company strives to continuously improve employee health and safety through consistent measurement and reporting on progress and leading indicators. It has programs that emphasize that each employee in the organization is responsible for safety in the workplace. The Company provides a comprehensive safety program that focuses on a zero-incident mindset by providing ongoing training opportunities and review of safety activities and initiatives. This clearly visible effort encourages employee engagement and active management and leadership involvement. We are committed to meeting the highest standards associated with providing a safe and healthy environment for our workforce and have adopted an Occupational Safety and Health Management system to improve our ability to continuously identify hazards and control risks in our workplace and have adopted certifications to OHSAS 18001 and ISO 45001 in many of our facilities around the globe.
Human Capital Management – The Company believes that our workforce is one of our greatest assets, and it has a proactive human capital management and talent development program. The Human Capital and Compensation Committee is responsible for oversight of the Company’s human capital management and talent development programs.
Attraction: The Company competes within each world-wide market for a finite number of skilled and talented workers. The Company strives to leverage our broad resources to deliver an outstanding career experience to our employees.
Engagement: The Company strives to provide engaging and meaningful career opportunities for its employees, so they can thrive and be satisfied in our technology and innovation-based culture.
Development: The Company strengthens its employees’ skills and experiences through diverse career development and learning opportunities, both internal and external.
Retention: The Company supports a workplace that provides an environment of trust, personal and professional development and work-life balance is vital to its successful retention of engaged, top-notch talent.
Diversity, Equity and Inclusion – The Company is committed to apply fair labor practices while respecting the national and local laws of the countries and communities where we have operations. The Company is committed to providing equal opportunity in all aspects of employment. The Company does not engage in or tolerate unlawful conduct, including discrimination, intimidation, or harassment. In addition, the Company continues to develop strategies to increase diversity and inclusion, including the formation of internal affinity groups, establishing a diversity, equity and inclusion task force, and establishing relationships with key organizations and associations that foster diversity and inclusion initiatives in the communities where we operate. The Company is committed to identify a talented and innovative workforce by building a diverse and inclusive pipeline of talent. As noted above, the Human Capital and Compensation Committee is responsible for the oversight of the Company’s diversity and inclusion initiatives.
Ethical Business Practices – The Company is dedicated to conducting its business with integrity and responsibility. The Company promotes honest and ethical conduct, and the Code of Ethics and Business Conduct applies to all employees, directors, and officers as well as our business partners and supply chain. The Company does not tolerate human rights abuses, human trafficking and or slavery, the use of child labor and will not engage or be complicit in any activity that solicits or encourages human rights abuse.
The Company and the Board of Directors take seriously the Company’s commitment to ESG matters. In addition to the commitment of the senior leadership of the Company to such matters, the Company’s Human Capital and Compensation Committee and Governance and Nominating ProceduresCommittee provide oversight of ESG matters.
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Corporate Governance and Board Matters
The Governance and Nominating Committee identifies nominees by first evaluating the current members of the Board of Directors willing to continue in service. Current members of the Board with skills and experience that are relevant to the Company’s business and who are willing to continue in service are considered for re-nomination. If any member of the Board does not wish to continue in service, or if the Governance and Nominating Committee decides not to nominate a member for re-election, the Governance and Nominating Committee first considers the appropriateness of the size of the board. If the Governance and Nominating Committee determines the board seat should be retained and a vacancy exists, the Governance and Nominating Committee considers factors that it deems are in the best interests of the Company and its
shareholders in identifying and evaluating a new nominee.nominee, including the composition and diversity of the Board. Skills and characteristics that are considered include judgment, accountability, integrity, reputation, relevant experience, including leadership roles and experience working in a collaborative environment, technical skills, financial literacy, mature confidence and emotional maturity, high performance standards, availability, other board appointments and outside commitments, industry knowledge, networking/contacts, and degree of independence from management.
Our Corporate Governance Principles provide that directors may not be nominated to a new term if they will be age 75 or over at the expiration of his or her current term, unless the Board waives the mandatory retirement age for a specific director.
While we do not have a formal policy or guidelines regarding diversity of membership of our Board of Directors, our Corporate Governance Principles recognize the value of having a Board that encompasses a broad range of skills, expertise, contacts, industry knowledge,
backgrounds and diversity of
opinion,opinion. As required by Nasdaq, the Company has collected statistical information regarding certain Nasdaq defined diversity categories with regard to our board of directors (See Board Diversity Matrix – as of December 31, 2021), however, our Board has not attempted to define “diversity,” or otherwise
specifically require that the composition of our Board include individuals from any particular background or who possess specific attributes.
Notwithstanding, the Board continues to be proactive in furthering the diversity of the Board. The Governance and Nominating Committee will continue to consider whether it would be appropriate to adopt a policy or
specific guidelines regarding board diversity or define diversity as it relates to the composition of our Board of Directors.
The Board of Directors will consider nominees recommended by shareholders. Any such person will be evaluated in the same manner as any other potential nominee for director. Any suggestion for a nominee for director by a shareholder should be sent to the Company’s Secretary within the time periods set forth under “Shareholder Proposals for the
20192023 Annual Meeting.”
Board Attendance at
MeetingsThe Board of Directors held five meetings in 2017.2021. Our Independent Directors meet in executive session without management directors or management present. These sessions generally take place prior to and/or following regularly scheduled board meetings. The directors met in such sessions four times during 2017.2021. Our Corporate Governance Principles provide that all directors are expected to regularly attend all meetings of the Board and the Board
committees on which he serves. In
2017,2021, each director attended 100% of the total number of meetings of the Board of Directors
while in office, and
substantially all (88%) of the total number of meetings held by
all committees of the Board of Directors on which he
or she served. In addition, each director is expected to attend the Annual Meeting of Shareholders. In
2017,2021, the Annual Meeting of Shareholders was attended by all of the directors then in office.
Compensation Committee Interlocks
and Insider Participation
As noted above, the Human Capital and Compensation Committee is comprised of threefour independent Directors: Messrs. Engel, Federico Laber and Tevens.Finch and Ms. Tzetzo. No member of the Human Capital and Compensation Committee is or was formerly an officer or an employee of the Company.Company or had any other relationships with us requiring disclosure
herein. No executive officer of the Company serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of the Company’s Board of Directors, nor has such interlocking relationship existed in the past.
Compensation of
Ownership Guidelines for Directors
Director Compensation in 2017
Under and Officers
In order to enhance the
Company’s director compensation program, each non-employee director receives an annual cash retainer of $45,000, paid quarterly. The chairpersonalignment of the
Audit Committee receives an additional $12,500 annual cash retainer and other membersinterests of the
Audit Committee receive an additional annual cash retainer in the amount of $7,500. The chairperson of the Compensation Committeedirectors and
the Corporate Governance and Nominating Committee each receive an additional $8,000 annual cash retainer and other members of those committees will receive an additional annual cash retainer in the amount of $5,000. The Lead Director receives an additional $10,000 annual cash retainer. All cash retainers are payable ratably on a quarterly basis. Additionally, each non-employee director is reimbursed for his or her expenses in connectionmanagement with
attendance at each meeting.Non-employee directors also receive an annual award of restricted stock under the 2017 Omnibus Incentive Plan. The annual award consists of shares of the Company’s common stock with a value of $50,000 as of the date of grant. The Lead Director receives an additional award of restricted stock with a value of $20,000 as of the date of grant. Directors who are appointed to the Board outside of the annual meeting of shareholders, receive a pro rata amount of the annual award. These restricted shares will vest over a three-year period upon the performance of future service as a director, subject to certain exceptions.
The following table shows the compensation paid by the Company to each non-employee director for 2017.
Name | | Fees Earned
or Paid
in Cash
($) | | Stock
Awards
($)(1) | | All other
Compensation
($) | | Total
($) | |
Richard D. Federico | | $ | 65,750 | | $ | 70,016 | | — | | $ | 135,766 | |
Gerald J. (Bud) Laber | | $ | 57,500 | | $ | 50,006 | | — | | $ | 107,506 | |
Alexis P. Michas (2) | | $ | 39,750 | | $ | 50,006 | | — | | $ | 89,756 | |
Richard D. Smith | | $ | 45,000 | | $ | 50,006 | | $ | 110,500 | (3) | $ | 205,506 | |
James J. Tanous | | $ | 60,500 | | $ | 50,006 | | — | | $ | 110,506 | |
Timothy T. Tevens | | $ | 25,625 | | $ | 46,182 | | — | | $ | 71,807 | |
Michael R. Winter | | $ | 62,500 | | $ | 50,006 | | — | | $ | 112,506 | |
| | | | | | | | | | | | | |
(1) Represents the total grant date fair value of stock awards on the date of the award as reported on the Nasdaq Global Market on the date of grant.
(2) Mr. Michas resigned from the Board on August 22, 2017.
(3) Mr. Smith served as Executive Chairman of the Board and Chief Financial Officer until his retirement in March 2013. The Company entered into a five-year consulting agreement with Mr. Smith effective upon his retirement pursuant to which Mr. Smith will receive an annual consulting fee, paid monthly, and will be available to work part time as an independent contractor on assignments as requested by the Chief Executive Officer and agreed upon by Mr. Smith.
The aggregate number of unvested stock awards outstanding for each non-employee director as of December 31, 2017 is shown below:
Name
|
| Unvested
Stock Awards
(#)
|
|
Richard D. Federico
| | 6,613
| |
Gerald J. (Bud) Laber
| | 4,865
| |
Richard D. Smith
| | 4,865
| |
James J. Tanous
| | 4,865
| |
Timothy T. Tevens
| | 1,729
| |
Michael R. Winter
| | 4,865
| |
Director Stock Ownership Policy
The Board of Directors believes it is generally desirablehas instituted ownership guidelines for directors toand officers. Each director who has served for at least five years should own shares of the Company’s stock. By becoming equity owners, the outside directors assumeCommon Stock with a personal stake in the success or failuremarket value of the Company and it aligns their financial interests with the long-term shareholders of the Company. Pursuant to the Director Stock Ownership Policy, which was adopted in 2010 and revised in 2014, non-employee directors are required to make a minimum investment in Company stock equal toof three times the annual cash and stock retainer (the “Guideline Investment”). Each non-employee director is allowedfee payable to a grace period to meet the Guideline Investment in full, from the datedirector. Within five years of initialtheir election, or appointment to the Board through the fifth anniversary of such election or appointment. The Company has a Non-Employee Director Stock in Lieu of Cash Retainer Plan. Pursuant to the Plan, each non-employee director may elect to forego receipt of all or a portion
officers of the cash retainer in exchange for newly issued common stock. UntilCompany are required to own shares of Common Stock having a market value equal to or greater than the Guideline Investment is achieved, directors must utilize 50%following multiples of the cash retainer to purchase Company stocktheir base salary: (1) President and such stock, along with stock grants received from the Company, will be used to reach the Guideline Investment.Chief Executive Officer: five times annual base salary; (2) Chief Financial Officer and Group Presidents: three times annual base salary; and (3) all other Section 16 officers: one times annual base salary.
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Proposal 1 —– Election of Directors
Our Articles of Incorporation and Bylaws provide for a Board consisting of not less than three and not more than nine persons, as such number is determined by the Board of Directors, all of whom will be elected annually to serve until the next annual meeting of shareholders and until their successors are elected and qualified, or until the Director resigns or is otherwise removed.
Our Board of Directors currently consists ofhas seven members: Robert B. Engel, Richard D. Federico, Gerald J. (Bud) Laber, Richard D. Smith,Steven C. Finch, James J. Tanous, Timothy T. Tevens,Nicole R. Tzetzo, Richard S. Warzala and Michael R. Winter. In accordance withAll seven positions on the BylawsBoard are to be filled by vote of the Company, the Board of Directors has fixed the number of directors to be electedshareholders at the Annual Meeting to seven directors.Meeting. The affirmative vote of a majority of the votes cast is required for the election of directors. Unless instructed otherwise, it is
intended that the shares represented by proxy at the Annual Meeting will be voted in favor of the seven nominees named
below,above, each of whom was nominated by the Board based on the recommendation of our Governance and Nominating Committee.
Each nominee is an incumbent director standing for re-election and allAll nominees have agreed to serve if elected.
If, at the time of the Annual Meeting, any nominee is unable or declines to serve, the discretionary authority provided in the proxy may be exercised to vote for a substitute or substitutes. The Board of Directors has no reason to believe that any substitute nominee or nominees will be required.
Information regarding the director nominees can be found under “Corporate Governance and Board Matters
—– Director Qualifications and Biographical Information.”
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES.
Proposal 2
—– Advisory Vote on Executive Compensation
Shareholders are being asked to approve, on an advisory, non-binding basis, the compensation of our Named Executive Officers, as disclosed in this proxy statement in accordance with
Securities and Exchange CommissionSEC rules. This proposal, commonly known as a “Say-on-Pay” proposal, gives you, as a shareholder, the opportunity to express your views on our Named Executive Officers’ compensation. Your vote is not intended to address any specific item of our compensation program, but rather to address our overall approach to the compensation of our Named Executive Officers described in this proxy statement.
As described in detail under the heading “Compensation Discussion and Analysis,” our executive compensation programs are designed to attract, motivate, and retain our executive officers, who are critical to our success. Under these programs, our Named Executive Officers are rewarded for the achievement of our
shorter-termshorter and longer-term financial and strategic goals and for driving corporate performance. The programs contain elements of cash and equity-based compensation and are designed to align the interests of our executives with those of our shareholders.
You may vote for or against the following resolution, or you may abstain. 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 procedures described in this Proxy Statement.
Our Board of Directors is asking shareholders to vote on the following resolution at the Meeting:
RESOLVED, that Allied Motion Technologies Inc.’s shareholders approve, on an advisory basis, the compensation paid to the Named Executive Officers, as disclosed under SEC rules, including the Compensation Discussion and Analysis, the compensation tables and related material included in this Proxy Statement.
This vote on the Named Executive Officer compensation is advisory, and therefore will not be binding on the Company and will not affect any existing compensation or award programs. However, we value the opinions expressed by our shareholders and the Board of Directors and the
Human Capital and Compensation Committee expect to consider the outcome of the vote, along with other relevant factors, when considering future compensation programs.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE FOREGOING RESOLUTION. UNLESS OTHERWISE INSTRUCTED, PROXIES WILL BE VOTED “FOR” THE APPROVAL.
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Proposal 3
—– Advisory Vote on the Ratification of Independent Registered Public Accounting Firm
EKS&H
Deloitte & Touche LLP has served as the independent registered public accounting firm for the Company since
2006.August 2018. Representatives of
EKS&HDeloitte & Touche LLP are expected to be present at the Annual
Meeting.Meeting, will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.
The “Audit Committee Matters” section of this Proxy Statement contains additional information regarding the independent auditors, including a description of the Audit Committee’s Policy for Pre-Approval of Audit and Permitted Non-Audit Services and a summary of Auditor Fees and Services.
At the Annual Meeting, the shareholders will be asked to ratify the selection of EKS&HDeloitte & Touche LLP as the Company’s
independent registered public accounting firm. Pursuant to the Rules and Regulations of the Securities and Exchange Commission, the Audit Committee has the direct responsibility to appoint, retain, fix the compensation and oversee the work of the Company’s independent registered public accounting firm. Consequently, the Audit Committee will consider the results of the shareholder vote on ratification, but will exercise its judgment, consistent with its primary responsibility, on the appointment and retention of the Company’s independent auditors.
The affirmative vote of a majority of the votes cast on the proposal, assuming a quorum is present at the Meeting, is required to ratify the appointment of
EKS&HDeloitte & Touche LLP as the Company’s independent public accounting firm for
2018.2022.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION. UNLESS OTHERWISE INSTRUCTED, PROXIES WILL BE VOTED “FOR” THE RATIFICATION.
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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 past five years is provided for each executive officer. There are no family relationships between any of our directors or executive officers.
Richard S. Warzala
, age 64—68—Mr. Warzala has served as a director of the Company since August 2006 and as Chairman of the Board since February 2014. Mr. Warzala joined Allied Motion as President and Chief Operating Officer in May 2002 and was appointed President and Chief Executive Officer in May 2009. Prior to joining Allied Motion, Mr. Warzala was President of the Motion Components Group of Danaher Corporation and held various positions at American Precision Industries Inc., including Corporate Vice President and President of its API Motion Division. Mr. Warzala currently serves as Lead Director and Chair of the Compensation Committee for AstroNova, Inc.
Michael R. Leach
, age 49—53—Mr. Leach was named Vice President and Chief Financial Officer of the Company in August 2015.2015 and was promoted to Senior Vice President in July 2020. Prior to joining Allied Motion, Mr. Leach served for six years as the Executive Vice President and Chief Financial Officer for Osmose Holdings, Inc. Previously, he was with Cytec Industries for eight years where he progressed to the position of North American Operations Controller for Cytec Specialty Chemicals and eight years with Belko Corporation, a division of Alco Industries, where he was the Vice President of Finance and Administration.
Robert P. Maida, age 53—57—Mr. Maida was named Senior Vice President & President of Allied Innovum Group in July 2020. Prior to that he served as Vice President of Operational Excellence of the Company, ina position he held since August 2015. Mr. Maida served as Chief Financial Officer from December 2012 until August 2015. Prior to joining Allied Motion, he worked for over two years as the Director of Finance for Avox Systems, Inc., a subsidiary of Zodiac Aerospace. For the ten years prior to that, Mr. Maida held several positions with API Motion / Danaher Motion where he progressed to the position of Director of Finance for the Applied Products Group of Danaher Motion, a subsidiary of Danaher Corporation. Prior to that, he was the Vice President
of Finance for Great Lakes Industries, Inc. and the Director of Finance of BRC, a division of Bryce Corporation.
Kenneth
Ashish R. WymanBendre, age 75—53—Mr. WymanBendre was named Vice President & President of Allied Orion Group in July 2020. He has led the Allied Motion TCI technology unit since its acquisition by the Company in 2018. Mr. Bendre joined TCI LLC, a privately owned manufacturer of power quality solutions as Vice President of Engineering in 2011. He was promoted to President & Chief Operating Officer in 2014 and President & Chief Executive Officer in 2015. Prior to Allied Motion/TCI, Mr. Bendre served as the Director of Technology for DRS Power & Control Technologies, a division of Leonardo DRS focused on naval power conversion. He has a Ph.D. in Electrical Engineering from the University of Wisconsin, Madison and an MBA from the University of Chicago.
Helmut D. Pirthauer, age 52—Mr. Pirthauer was named Vice President & President of Allied Dynamos Group in July 2020. He joined Allied Motion as Chief Executive Officer of the Heidrive Group after its acquisition by the Company in January 2016. Mr. Pirthauer progressed to the position of Chief Executive Officer of Heidrive GmbH in January 2013. Previously he held several positions in Heidrive GmbH including the position as Director of Sales and Technical Development since 2007 and Leader of the Sales Department since 2003. Prior to joining Heidrive GmbH, Mr. Pirthauer was the group leader of customer applications in the Heidolph GmbH & Co KG. Prior to that Mr. Pirthauer founded his own engineering consulting company IHP in August 1996 and served for the Heidolph GmbH & Co. KG since January 1997 as a consultant.
Geoffery C. Rondeau, age 50—Mr. Rondeau was named Vice President of MarketingOperational Excellence in July 2020. Prior to that he served as a General Manager of the Company in February 2003. He was designatedCompany’s North American Mechatronics Group, a position he held since September 2014. Prior to joining Allied Motion, he worked for over three years as an executive officer in February 2005. From 2000the General Manager for Excelco Newbrook. For the fifteen years prior to 2002,that, Mr. Rondeau held several positions with API Motion/Danaher Motion where he was Vice Presidentprogressed to the position of MarketingDirector of Engineering for the Motion ComponentsApplied Products Group of Danaher Corporation. In 1995, Mr. Wyman joined API Motion, as Directora subsidiary of Marketing, and later was named Vice President of Marketing.Danaher Corporation.
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COMPENSATION OF
NAMED EXECUTIVE OFFICERS
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) reports on the Company’s performance in 2021, the executive compensation earned in light of that performance, and the performance metrics and other relevant factors the Human Capital and Compensation Committee (in this CD&A, the “Compensation Committee”) used in making its
compensation decisions with respect to our Chief Executive Officer and President, Chief Financial Officer, and the Presidents of Allied Innovum Group, Allied Dynamos Group and Allied Orion Group (collectively, the “Named Executive Officers”).
Compensation Philosophy and Objectives
The primary goals of the Company’s compensation philosophy for Named Executive Officers is as follows:
To provide total compensation opportunities for Named Executive Officers which are sufficient to attract and retain individuals whose talents and abilities allow the Company to accomplish its strategies within the Company’s risk parameters.
To align the interests of the Named Executive Officers with shareholders using incentive compensation directly related to corporate performance and through the use of stock-based incentives that result in increased Company stock ownership by management.
The Compensation Committee seeks to develop a well-balanced compensation program that not only contains a
competitive fixed pay element through annual base salary, but that is weighted more towards variable at-risk pay elements through the use of our annual cash incentive and short- and long-term equity-based compensation. We foster a culture where our Named Executive Officers may increase their compensation by performance that creates meaningful value for our shareholders. Each element of our compensation program is discussed in more detail below.
The Board maintains governance practices and oversight of our executive compensation philosophy. The following governance practices were in place during 2021, and these practices, among other elements of our compensation program, aid in mitigating risk associated with our compensation program.
| | | | | Pay for performance. As demonstrated in the Elements of Executive Compensation, a significant portion of executive pay is not guaranteed, but rather tied to key financial metrics that measure our performance and are disclosed to our shareholders. | | | | | | No significant perquisites. The benefits our Named Executive Officers receive in the form of health insurance, life insurance, and Company matching contributions to the 401(k) Plan are the same benefits generally available to all our employees. The CEO also receives a supplemental life insurance benefit, a physical exam and use of a Company automobile. All other Named Executive Officers receive a physical exam and an automotive allowance. |
| | | | | | | | | | | | | | |
| | | | | Target the following market positions for Named Executive Officers:
| | | | | | No hedging, pledging, or short sales transactions permitted. The Company’s Insider Trading Policy prohibits Company directors, officers and certain designated employees from (i) engaging in any hedging or monetization transactions involving Company securities or from purchasing or selling any put or call option contract or similar instrument with respect to Company securities and (ii) pledging Company securities as collateral for a loan or holding such shares in a margin account. |
| | | | | Base Salary | | | - At Market | |
| | | | | Annual Incentive | | | - At Market for the
achievement of target | |
| | | | | Equity Program | | | - Slightly Above Market
when performance is achieved | |
| | | | | | | | | | | | | | |
| | | | | Mitigate undue risk in compensation programs. The executive compensation program includes features that reduce the possibility of the Named Executive Officers, either individually or as a group, making excessively risky business decisions that could maximize short-term results at the expense of long-term value. The Compensation Committee annually reviews our compensation arrangements, especially the incentive compensation arrangements, to confirm that such arrangements do not encourage undue risk taking. | | | | | | No excessive Severance Benefits. |
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OverviewCompensation of Named Executive Officers
| | | | | | | | | | | | | | |
| | | | | Balance of short-term and long-term incentives. Our incentive programs provide an appropriate balance of annual and long-term incentives. | | | | | | No use of non-performance based pay other than base salary and limited perquisites. |
| | | | | | | | | | | | | | |
| | | | | Stock Ownership Guidelines. The Company has stock ownership guidelines for Named Executive Officers. The President and CEO must have ownership of at least five times base salary, and the CFO and Group Presidents at least three times base salary. Each subject individual must meet or exceed his or her requisite threshold immediately prior to any disposition of shares obtained through an equity grant, other than shares used to pay applicable withholding taxes. | | | | | | |
| | | | | | | | | | | | | | |
| | | | | Include recoupment and other forfeiture provisions in our annual incentive programs and equity-award provisions. Our annual incentive program and equity-based compensation agreements contain certain recoupment, non-compete, and other forfeiture provisions that will allow the Company to cancel all or any outstanding portion of equity awards and recover the payouts under the annual incentive program, gross value of any vested restricted shares, or profits from exercises of options. | | | | | | |
| | | | | | | | | | | | | | |
| | | | | Utilize an independent compensation consulting firm. The Compensation Committee benefits from its use of an independent compensation consulting firm, which provides minimal other services to the Company. | | | | | | |
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Compensation of Named Executive Officers
Compensation Program and Design
We use a combination of compensation elements, including base salary, the annual incentive program and an equity program. Each element and the related compensation
decisions and results for fiscal 2021 are summarized below and detailed summaries follow in the CD&A.
| | Compensation Mix | | | Fixed | | | Variable | | | Fixed | | | Variable | |
| | Recipients | | | Named Executive Officers | | | All Named Executive Officers for time-based awards, all U.S. based Named Executive Officers for Performance Share Plan and certain U.S. based Named Executive Officers for Long Term Incentive Plan. | |
| | When Granted | | | Review
Annually | | | Annually | |
| | Form of Delivery | | | Cash | | | Equity | |
| | Type of Performance | | | Short Term | | | Long Term | |
| | Performance Period | | | Ongoing | | | 1-Year | | | Stock vests over 3 years | | | Annual performance, stock vests over 3 years | | | Ongoing performance, stock vests over
3-5 years | |
| | Vesting | | | Immediate | | | 1-Year | | | 3-Years | | | 3-Years | | | Organic Growth:
3-Years Acquisition Growth: 5-Years | |
| | How Payout is Determined | | | Compensation Committee Recommends to Board | | | Quantitative based on performance against goals | | | Formula Based (Percentage of Salary) | | | Annual Performance | | | Multi-Year Performance | |
| | Performance Metrics | | | Performance Assessment | | | EVA / Improvement in EBITDA | | | NA | | | EBITDA | | | Sales Growth | |
At-Risk Compensation Mix.
The graphics below illustrate the mix of 2021 fixed pay (base salary) and at-risk pay incentives (cash incentive compensation and equity awards), presented at target, for our Chief Executive Officer and the average for our other Named Executive Officers. At-risk pay incentives constitute the majority of the total compensation package for our Named Executive Officers, consistent with a pay-for-performance compensation philosophy, as discussed above. We believe that linking a substantial portion of our Named Executive
Officers’ total compensation to at-risk pay rewards the achievement of key short- and long-term performance goals and strongly aligns the interests of our executive officers, including our Named Executive Officers, with those of our shareholders. A larger portion of our Chief Executive Officer’s total compensation was linked to at-risk pay as compared to the other Named Executive Officers, in recognition of our Chief Executive Officer’s overall responsibility for our corporate performance.
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Compensation of Named Executive Officers
Setting Executive Compensation
The Compensation Committee of the Board, which is comprised of independent directors,
establishesis charged with oversight of the Company’s
philosophy, policies and practices regarding annual and incentive compensation
philosophy.plans, equity-based plans and other compensation plans. The
Compensation Committee operates under a written charter adopted by the Board, a copy of which is available on the Company’s website at
www.alliedmotion.com.www.alliedmotion.com/corporate-governance/. The
Compensation Committee ensures that the total compensation of the Company’s
executive officersNamed Executive Officers and other key management is fair, reasonable and competitive. The
Compensation Committee annually evaluates the performance of the Company’s Chief Executive Officer based upon a mix of the achievement of corporate goals and individual performance and makes decisions concerning compensation and benefits for
executive officersNamed Executive Officers and other key management.
AllThe Compensation Committee recommends annual base compensation
and incentive compensation targets to the Board, and it also makes equity awards under the Company’s 2017 Omnibus Incentive Plan and reviews the attainment of annual goals for
these individuals is approved by the Board.incentive compensation.
The
Compensation Committee meets with Mr. Warzala, the Company’s Chief Executive Officer and President, to obtain his recommendations with respect to
other Named Executive Officers and key management compensation programs and practices, base salaries, incentive plan targets and equity awards. The
Compensation Committee considers but is not bound to accept
management’ssuch recommendations. The
Compensation Committee discusses Mr. Warzala’s compensation with him but makes decisions
regarding his recommended compensation without him present.
The
Compensation Committee has authorized Mr. Warzala to make salary adjustments for all employees other than
executive officersNamed Executive Officers and other key management.
The Committee makes equity based awards. However, Additionally, the Compensation Committee has from time to time delegated to Mr. Warzala the authority to makegrant restricted stock awards to employees other than executive officersNamed Executive Officers or key management in limited annual amounts. Such awards made by Mr. Warzala are generally intended to be used for employee recruiting, employee retention and employee promotion purposes.
The one exception to these authorities is
that the Compensation Committee retains approval authority for all salary adjustments and grants of restricted stock for Stephen Warzala, Director of New Business Development, who is the son of Mr. Warzala.
Under the direction of the Compensation Committee, the Company has retained the Burke Group, an independent compensation consultant, to prepare a study that provided input on trends in executive compensation and an outside perspective on the Company’s executive compensation philosophy, programs and practices, while periodically assisting with the Compensation Committee’s peer group benchmarking analysis.
The Compensation Committee has the sole authority to retain and terminate the compensation consultant and to approve the compensation consultant’s fees and all other terms of the engagement. The Compensation Committee exercised this authority to engage the Burke Group.
The Compensation Committee regularly reviews the independence of, and services provided by its
own independent advisors to assist in carrying out its responsibilities. During 2017, the Company did not engage any outside
advisors.Compensation Philosophy
The primary goals of the Company’s compensation policies for the executive officersconsultants and other key management are as follows:
· To provide total compensation opportunities for executive officers and other key management which are sufficient to attract and retain individuals whose talents and abilities allow the Company to accomplish its strategies.
· To align the interests of management with shareholders through the use of incentive compensation directly related to corporate performance and through the use of stock-based incentives that result in increased Common Stock ownership by management.
Consideration of Most Recent Say on Pay Vote
At the annual meeting of shareholders on May 3, 2017, 96.6% of the shares voted were voted in support of the compensation of our Named Officers, as discussed and disclosed in the 2017 proxy statement. In considering the results of this most recent advisory vote on executive compensation, the Committeehas concluded that the Burke Group is independent in providing executive compensation paid to our executive officersconsulting services. The Compensation Committee reviews its relationship with the Burke Group at least annually and in 2021 determined that the Burke Group’s work for the Compensation Committee did not raise any conflicts of interest, consistent with the guidance provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC and the Nasdaq Global Market. Burke Group does provide actuarial services on behalf of the Company for a defined benefit pension at Motor Products – Owosso. The total fees for these services were $42,358 and were taken into account by the Compensation Committee in making its independence determination.
The changes which were made in 2021 compensation based on the Compensation Committee’s analysis after the advice of Burke Group were as follows:
ROE Incentive Plan. The Compensation Committee eliminated the incentive plan which made payments to Mr. Warzala based on the Company’s overall pay practices have strong shareholder supportattainment of a goal based on return on equity (the “ROE Incentive Plan”) for 2021. The Compensation Committee made the change to align the metrics used to determine incentive compensation for the Company’s Named Executive Officers. The
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Compensation of Named Executive Officers
Compensation Committee increased Mr. Warzala’s target incentives under other incentive compensation plans to make up for the elimination of the ROE Incentive Plan.
Adjustment of CEO Target Incentives. In connection with the elimination of the ROE Incentive Plan, the Compensation
Committee revised Mr. Warzala’s target incentives (as a percentage of base salary) under the Company’s Annual Cash Incentive; Performance Share Plan; Time-Based Awards for 2021 as follows:
| | ROE Incentive Plan | | | 100% | | | 0% | |
| | Annual Cash Incentive | | | 75% | | | 125% | |
| | Performance Share Plan | | | 50% | | | 62.5% | |
| | Time-Based Awards | | | 50% | | | 62.5% | |
LTIP Sales Target. To take account of adverse impacts on the Company’s growth in 2020 resulting from the global COVID-19 pandemic, the LTIP Sales Target was reduced
from $500 million to $450 million. Other than the revision to the LTIP Sales Target, the terms and
no significant changesconditions of the LTIP were
made.unchanged and remain in full force and effect.
In 2021, the Compensation Committee relied on a Peer Group Analysis prepared by the Burke Group to evaluate compensation levels for Named Executive Officers. The Peer Group recommended by the Burke Group and used by the Compensation Committee is based on similarly sized manufacturing companies. The Burke Group analyzed competitive total direct compensation at the Peer Companies,
as disclosed in their proxy statements for prior years. The Compensation Committee periodically evaluates the appropriateness of the Peer Group (based on merger and acquisition activity, growth, business focus, etc.). The peer group used for benchmarking 2021 compensation was unchanged from 2020. The members of the Peer Group for 2021 are as follows:
AeroVironment Inc.
Astronics Corporation
Enphase Energy, Inc.
Helios Technologies Inc.
LSI Industries, Inc.
National Presto Industries, Inc.
Onto Innovation Inc. | | | Preformed Line Products Co.
Proto Labs, Inc.
The Gorman-Rupp Co.
Thermon Group Holdings, Inc.
Twin Disc Incorporated
Vicor Corporation |
The key elements
and targets of executive compensation
are·are:
At market as defined as the 50th percentile
Annual Cash Incentive Compensation
·
At market as defined as the 50th percentile for the achievement of Target and above market once Target is achieved
Equity Incentive Compensation
· Deferred Compensation Plan benefits
Above market when performance is achieved
Base Compensation. Base compensation is comprised of the annual salary and is set at levels sufficient to attract and retain executives. In determining Mr. Warzala’s base compensation, the Compensation Committee considers market data, Mr. Warzala’s performance and the Company’s performance during the previous year as well as goals and objectives for the current year. In determining other base compensation levels, the Compensation Committee reviews and considers the evaluation and recommendation by Mr. Warzala of each Named Executive Officer’s and certain key manager’s performance during the prior year andas well as responsibilities for the current year. During the review of base compensation, the Compensation Committee also considers the executive’s or manager’s qualifications and experience,
scope of responsibilities and future potential, the goals and
objectiveobjectives established for the individual, his or her past performance and competitive compensation practices both internally and externally.
Annual Cash Incentive Plan. The annual incentive plan is a pay-for-performance cash award plan generally available to all employees of the Company and aligns the interests of executives and employees with those of the Company’s shareholders. The plan promotes a culture of high performance and ownership by employees in which employees are rewarded for improving profitability, achieving operating efficiencies,
reducing costs and
reducing costs.efficiently employing capital. Awards under the plan are based
on the actual Economic Value Added (EVA) achieved as compared against a threshold and target EVA performance goals established for each year by the Board of Directors. EVA is net operating profit after taxes as defined, less a cost of capital charge. If the target EVA is achieved, then the target bonus is paid. If the actual EVA achieved falls between the threshold and the target EVA performance goals, the annual cash incentive plan award equals the target amount multiplied by the prorata percent of the EVA target achieved (0% to 100% of the target bonus amount). If the actual EVA achieved is greater than the target EVA performance goal, then the annual cash incentive plan award will be greater than 100% of the target amount
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Compensation of Named Executive Officers
with the total award being a
certain prorata percent of the incremental EVA achieved above the target EVA.
For 2021, the target incentives as a percentage of base salary were as follows:
| | Chief Executive Officer | | | 125% | |
| | Chief Financial Officer | | | 50% | |
| | President, Allied Innovum Group | | | 50% | |
| | President, Allied Dynamos Group | | | 35% | |
| | President, Allied Orion Group | | | 14.5% | |
As noted above, the Compensation Committee has designed the Company’s compensation program to provide appropriate compensation opportunities and incentives to the Named Executive Officers. The Compensation Committee reviews cash incentive compensation to ensure that the Company’s management team is appropriately compensated in a manner that measures the Company’s performance and results.
In making a determination that the cash incentive compensation paid to the Company’s Named Executive Officers was appropriate, the Compensation Committee considered, among other things, the following key 2021 financial metrics for the Company compared to 2020 (all per share amounts reflect the 2021 stock dividend):
| | Net Income | | | $24,094,000 | | | $13,643,000 | |
| | Diluted earnings per share | | | $1.67 | | | $0.95 | |
| | EBITDA | | | $44,456,000 | | | $38,477,000 | |
Equity Incentive Compensation. The equity incentive compensation program is comprised of restricted stock awards that are (i) time-based and
will vest, assuming continued employment, over a three-year period from the date of grant, (ii) earned upon achievement of certain
short-term, annually determined performance criteria
(STIP)(PSP) and (iii) earned upon achievement of longer-term performance
goals (LTIP).goals.
(i) Time-Based Awards. The annual time-based restricted stock awards for the
ChiefNamed Executive
Officer, Chief Financial Officer and Vice President of Operational ExcellenceOfficers are equal to a percentage of the officer’s then annual salary divided by the fair market value
share price(closing Company stock price) on the
day of the first meeting of the Board of Directors that year (“First BOD meeting”).grant date. In
March 2017,2021, the Compensation Committee
recommended and the Board granted Mr. Warzala
6,82411,591 shares of time-based restricted stock
(33.3%(62.5% of annual salary), Mr. Leach
1,7042,505 shares
(15%(22.5% of annual salary)
, Mr. Maida 2,286 shares (22.5% of annual salary), Mr. Bendre 498 shares (4.2% of salary) and Mr.
Maida 1,401Pirthauer 2,147 shares
(15%(20% of
annual salary)
. The Compensation Committee recommended and the Board also made an award of time-based restricted stock to Mr. Wyman (270 shares). The time-based
sharesawards will vest 1/3 on each
on April 1stof
March 31, 2018, 2019,2022, 2023 and
2020.2024.
(ii) Short-Term Equity Incentive Program (STIP)The Performance Share Plan (PSP). The STIPPerformance Share Plan is a pay-for-performance incentive program under which restricted stock is awarded annually and is earned upon the achievement of certain annually determined performance criteria. The Compensation Committee uses adjusted EBITDA (50%) and sales (50%) as the performance criteria under the STIP and measures the Company’s results for each criterion against threshold, target and high performance measures.program. The EBITDA target is equal to the weighted average of the EBITDA of the Company, adjusted to account for business development costs relating to acquisitions, for the immediately preceding three yearthree-year period. The EBITDA threshold is
95% of target and the high performance measure is 105% of target. If the high performance measure is achieved or exceeded, then
all100% of the
STIP EBITDAPSP shares will be earned. If the Company’s actual results are less than the high performance measure but greater than the threshold, then the
STIP EBITDAPSP shares will be earned on a prorata basis. If the Company’s actual results are less than the threshold, then no
STIP EBITDA shares will be earned. The Sales Target is equal to 105% of the previous year’s Sales and the threshold is 100% of the previous year’s Sales. If the Sales threshold is achieved or exceeded, then 50% of the STIP Sales shares will be earned. If the actual Sales are less than the target, but greater than the threshold, the STIP Sales shares will be earned on a prorated basis. If the actual results are less than the threshold, then no STIP SalesPSP shares will be earned. Any unearned
STIPPSP shares will be forfeited and returned to the
StockOmnibus Incentive Plan and
will be available for future awards.
Once earned, the STIPThe PSP shares will vest
1/3 on the date of the first BOD meeting following the year the shares are earned, and the remainder will vest annually over
the following two years.a three-year period. The Board of Directors
maycan change the terms of the
STIPPSP at any time taking into consideration the relationship of the incentive pay earned to the increase in profitability achieved for any period.
The annual
STIPPSP awards for the Chief Executive Officer, Chief Financial Officer,
President, Allied Innovum Group and
Vice President,
of Operational ExcellenceAllied Orion Group are equal to a percentage of the officer’s then annual salary divided by the
share price (average of bid and ask)fair market value (closing Company stock price) on the
day of the First BOD meeting.grant date. In
March 2017,2021, the Compensation Committee approved the award of
13,650 STIP11,591 shares for Mr. Warzala
(100%(62.5% of annual salary),
2,8402,505 shares for Mr. Leach
(25%(22.5% of annual salary), 2,286 shares for Mr. Maida (22.5% of annual salary) and
2,335998 shares for Mr.
Maida (25%Bendre (8.3% of annual salary).
Mr. Pirthauer did not participate in the PSP in 2021. The
Compensation Committee also made an award of 410 shares for Mr. Wyman. The STIPPSP awards are each in the form of restricted stock.
For 2017,All shares granted under the
Company exceeded the threshold performance and earned 21% of the STIP EBITDA award and 35% of the STIP Sales award wasPSP to Named Executive Officers for 2021 were earned.
(iii)
Long-Term Equity Incentive Program (LTIP).LTIP. The LTIP is a multi-year pay-for-performance incentive program under which the Chief Executive Officer, Chief Financial Officer and
Vice President,
of Operational ExcellenceAllied Innovum Group will earn
sharesrestricted stock awards based upon the achievement of an increase in sales
over a specified period.during various annual or five-year performance periods. The LTIP was first implemented in 2013 and has been revised and extended as performance goals were achieved. The LTIP
currently extends through December 31,
20202022, and the sales target to be achieved
to earn all restricted share awards available is
an aggregate increase to $500$450 million (the
“Sales“LTIP Sales Target”). The
LTIP Sales Target can be achieved in two ways—organic sales growth and acquired sales (defined as the actual sales achieved by any company or business unit acquired by Allied Motion for the trailing twelve months immediately preceding the closing date of such acquisition).
Under the current terms of the current LTIP, for each $30 million increase in sales up to the LTIP Sales Target, each executive earns LTIP sharesrestricted stock awards equal to a percentage of his annual salary at the beginning of the performance period as follows: 100% for Mr. Warzala, 25% for Mr. Leach and 25% for Mr. Maida. The LTIP performance criteria for organic sales growth is measured after the end of each year of the performance period at the First BOD Meeting and the number of shares that can be earned will bewith respect to a performance period is calculated based on the Company stock price (average of bid and ask) as measured at the beginning of the previous year.applicable performance period. The LTIP sharesrestricted stock awards that are earned based on actual organic sales growth will vest 1/3 on the dateover a three-year period. The measurement of the first BOD meeting following the year the shares are earned and the remainder will vest annually over the following two years. The LTIP performance criteria for acquired sales is measureddone as of the closing date for an acquisition during thea performance period and the number of shares of restricted stock earned will be calculated based on the Company stock price (average of bid and ask) as measured at the beginning
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Compensation of Named Executive Officers
of the
year. The LTIPapplicable performance period. Restricted stock award shares that are earned
under the LTIP that are based on acquired sales will vest annually (1/5 each year) over the following five years. When calculating the increase in sales, the Company will make appropriate adjustments to account for any acquired sales for which
aan LTIP
paymentaward has
previously been
paid.made. If the recipient’s employment with the Company is terminated due to cause or voluntary resignation, any unvested LTIP shares will be forfeited.
For
2017, no2021, shares were earned under the
acquired sales criteria of the LTIP as a result of growth in revenues of the Company, including organic growth
or acquired sales portions of
$51.5 million and the
LTIP. acquisitions of ORMEC Systems Corp., ALIO Industries and Spectrum Controls, Inc. As of December 31,
2017,2021, approximately
$265$442.3 million of the cumulative
LTIP Sales Target has been achieved. The following table shows the status of the LTIP awards
and remaining award potential as of
December 31, 2017: | | Number of LTIP Share | |
Name and Principal Position | | Awarded | | Earned | | Forfeited | | Unearned | |
Richard S. Warzala
President and Chief Executive Officer | | 310,387 | | 275,624 | | 4,259 | | 30,504 | |
Michael R. Leach
Chief Financial Officer | | 5,372 | | 1,346 | | — | | 4,026 | |
Robert P. Maida
Vice President of Operational Excellence | | 33,261 | | 28,246 | | 1,853 | | 3,162 | |
Deferredthe end of the 2021 performance period:
| | Richard S. Warzala
President and Chief Executive Officer | | | 684,341 | | | 678,987 | | | 6,389 | | | 5,353 | |
| | Michael R. Leach
Senior Vice President and Chief Financial Officer | | | 35,266 | | | 34,529 | | | — | | | 737 | |
| | Robert P. Maida
President, Allied Innovum Group | | | 73,443 | | | 72,810 | | | 2,780 | | | 633 | |
The Compensation (DCP). The Company maintains a Deferred Compensation Plan which provides eligible key employees withCommittee believes that the opportunity to defer the receipt of base compensation, bonuses, or a combination thereof, receive an allocation of any discretionary amountLTIP has contributed to the PlanCompany’s growth since its inception in 2013, and that the Company’s shareholders have received significant benefits as a result of such growth. The growth in revenue encouraged by the CompanyLTIP has driven an increase in
the profits and
receive an allocationmarket capitalization of
any performance based contributions by the Company. During 2017, no participants elected to defer any compensation under the Plan.In accordance with Mr. Warzala’s employment agreement, the Company made a supplemental retirement contribution, underover the discretionary contribution provisionsperiod that the LTIP has been in effect. The Compensation Committee reviewed those Company financial metrics for 2021 compared to 2012 in evaluating the effectiveness of the DCP, of $153,856 each May beginning in 2011 and ending in 2017. The terms of the contribution are further discussed below under the heading Chief Executive Officer Employment Agreement—Nonqualified Deferred Compensation.
Under the DCP, Mr. Warzala will also receive an annual performance based contribution to his deferred compensation account based on the achievement of a minimum return on equity (the “DCP Performance Target”) determined each year by the Board of Directors within 90 days of the beginning of the performance period. If the DCP Performance Target is achieved, an amount equal to 12.5% of the excess over the DCP Performance Target is contributed to Mr. Warzala’s deferred compensation account, provided that performance contribution will be capped at an amount that is equal to one times Mr. Warzala’s base compensation in any given year. The DCP performance target was set at 12.0% return on equity for 2017 and such performance target was partially achieved. Accordingly, a performance contribution of $349,000 was contributed to the Plan for Mr. Warzala.
LTIP as follows:
| | Revenues | | | $101,968,000 | | | $403,516,000 | | | 296% | |
| | Market Capitalization at 12/31 | | | $54,505,000 | | | $560,523,000 | | | 928% | |
| | Enterprise Value at 12/31 | | | $45,174,000 | | | $697,455,000 | | | 1,444% | |
Perquisites and Other Benefits
The Company provides
executive officersNamed Executive Officers with perquisites and other benefits that the Company and the
Compensation Committee believe are reasonable and consistent with its overall compensation program. The
Compensation Committee periodically reviews the levels of perquisites and other benefits provided to executive officers. Mr. Warzala is provided with exclusive use of a company automobile,
reimbursement for personal financial planning up to $5,000 annuallyan annual physical and
with $500,000 of life insurance plus a
$10,000$24,500 annual payment to be used to purchase additional life insurance for which
the executivehe may designate the beneficiaries.
The Company generally provides employees with medical, life and disability insurance benefits. All employees in the United States are eligible to participate in the Company’s 401(k) Plan
to which employees are able to contribute the lesser
of up to 60% of their annual salary or the limit prescribed by the Internal Revenue Service. The Company generally matches 100% of the first 3% plus 50% of the next 2% of eligible compensation that is contributed to the Plan. All employee deferral contributions are fully vested upon contribution. Company matching contributions are fully vested after completion of one year of service with the Company. All employees in the United States who are not part of collective bargaining agreements are also participants in the Employee Stock Ownership Plan. Contributions to the Plan are based on a percentage of the Company’s income, as determined and defined by the boardBoard of directors,Directors, and are made in newly issued shares of the Company’s common stock.
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code limitsimposes limitations on the deductibility for corporate federal income tax purposes of compensationremuneration in excess of $1 million paid to certain Named Executive Officers, unless the compensation is performance basedchief executive officer, chief financial officer and satisfies other conditions. The Company’s policy iseach of the three next most highly compensated executive officers of a public company. Prior to maximize the deductibility of compensation but does not preclude awards or payments that are not fully deductible if, in our judgment, such awards and payments are necessary to achieve our compensation objectives and to protect shareholder interests. All compensation paid to our Named Executive Officers for 2017 was deductible. Under the Tax Cuts and Jobs Act ofthat was signed into law on December 22, 2017, (“TCIA”), effective for our taxable yearcompensation that satisfied conditions set forth under Section 162(m) to qualify
as “performance-based compensation” was not subject to the limitation, and the limitation did not apply to compensation paid to the Chief Financial Officer. The Tax Cuts and Jobs Act eliminated the performance-based compensation exception beginning January 1, 2018,2018. A transition rule applies to
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Compensation of Named Executive Officers
performance-based remuneration provided pursuant to a written binding contract that was in effect on November 2, 2017 provided that such contract is not materially modified after that date.
The Company monitors the exception underapplication of Section 162(m) and the associated Treasury regulations on an ongoing basis and
the advisability of qualifying executive compensation for performance-baseddeductibility. Notwithstanding the repeal of the exemption for “performance-based compensation, will no longer be available, subject to transition relief for certain grandfathered arrangements in effect as of November 2, 2017. Given the lack of regulatory guidance to date,” the Compensation Committee intends to maintain its commitment to structuring the Company’s executive compensation programs in a manner designed to align pay with performance.
Potential Recoupment of Compensation Due to Misconduct
In February 2019, the Company’s Board adopted a Clawback Policy. All equity and non-equity incentive plan compensation granted by the Company in 2019 and thereafter is subject to this Clawback Policy. The policy provides that if an accounting restatement is required due to the Company’s material non-compliance with any accounting requirements, then all of
the Company’s executive officers, regardless of whether they were at fault or not yet ablein the circumstances leading to determine the full impactrestatement, will be subject to forfeiting any excess in the incentive compensation they earned over the prior three years over what they would have earned if there had not been a material non-compliance in the financial statements.
Hedging and Pledging Policy.
The Company’s Insider Trading Policy prohibits Company directors, officers and certain designated employees from (i) engaging in any hedging or monetization transactions involving Company securities or from purchasing or selling
any put or call option contract or similar instrument with respect to Company securities and (ii) pledging Company securities as collateral for a loan or holding such shares in a margin account.
Consideration of Most Recent Say on Pay Vote
At the annual meeting of shareholders on May 5, 2021, 96.4% of the TCIA’s changesshares voted were voted in support of the compensation of our Named Executive Officers, as discussed and disclosed in the 2021 proxy statement. Irrespective of the strong support, the Compensation Committee continues to Section 162(m)
review the Company’s compensation strategy to ensure that it provides appropriate compensation to the Company’s Named Executive Officers and to further align the interests of management and shareholders.
Compensation Changes for 2022
The Compensation Committee recently approved certain revisions to the Company’s compensation program for 2022.
Target Compensation Mix. The table below shows the mix of 2022 fixed pay (base salary) and at-risk pay incentives (cash incentive compensation and equity awards), presented at target, for each of the Company’s Named Executive Officers:
| | Richard S. Warzala | | | $650,000 | | | 125% | | | 75% | | | 75% | | | 125% | |
| | Michael R. Leach | | | $365,000 | | | 50% | | | 22.5% | | | 22.5% | | | 40% | |
| | Robert P. Maida | | | $335,000 | | | 50% | | | 22.5% | | | 22.5% | | | 40% | |
| | Ashish R. Bendre | | | $378,000 | | | 20% | | | 7.5% | | | 7.5% | | | 10% | |
| | Helmut D. Pirthauer | | | €305,000 | | | 35% | | | 20% | | | — | | | — | |
LTIP. The LTIP is a multi-year pay-for-performance incentive program. The current LTIP was first implemented in 2013 and has been amended from time to time as performance goals were achieved. This original LTIP is discussed above under the heading “Elements of Compensation – Equity Incentive Compensation – LTIP.”
Beginning in 2022, the Committee established a new LTIP that expanded the list of eligible participants thereunder (the “New LTIP”) to improve retention and better align the interests of a larger group of key executives with shareholders. The annual target LTIP award, reflected as a percentage of base salary, for each of the Company’s named executive officers is shown above under “Target Compensation Mix.” Awards under the New LTIP continue to be based upon the achievement of organic sales growth and acquired sales, however, the awards for certain participants will be based, in whole or in part, on revenue growth at a specific business unit level.
The Committee established sales targets under the New LTIP for both the Company,
on a consolidated basis, and
its compensation programs.Chief Executive Officer Employment Agreement
The Company has an employment agreement with Richard S. Warzala, President,each business unit. Awards for the Company’s Chief Executive Officer and ChairmanChief Financial Officer and a portion of the Board. In 2017,award for the President, Allied Innovum Group, will be paid at target if the Company’s sales, on a consolidated basis, increase by 33.3% over the three-year period ending December 31, 2024. The target for the Innovum and Orion business units have been set at a cumulative sales increase of 22.5% over the same period. If the increase in sales is above or below target, awards will be made on a pro rata basis.
The New LTIP performance criteria will be measured after the end of each year of the performance period and the number of shares that will be granted with respect to a performance period will be calculated based on the Company entered into an Amendment tostock price (closing price) as measured at the Employment Agreement and Changebeginning of Control Agreement (the “Amendment”) with Mr. Warzala, which amends Mr. Warzala’s Employment Agreement (the “Employment Agreement”) and the letter agreement between Mr. Warzala andapplicable performance period. When calculating the increase in sales, the Company dated December 22, 2008 (the “CIC Agreement”).will make appropriate adjustments to account
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Compensation of Named Executive Officers
for any acquired sales for which an LTIP award has previously been made. The restricted stock awards will vest over a two-year period after the year of the performance period. If the recipient’s employment with the Company is terminated due to cause or voluntary resignation, any unvested LTIP shares will be forfeited.
Director Compensation
in 2021 Under the Company’s director compensation program, which was amended and restated on May 5, 2021, each non-employee director receives an annual cash retainer of $53,600. The chairperson of the Audit Committee determined that it was appropriatereceives an additional $15,800 annual cash retainer and other members of the Audit Committee receive an additional annual cash retainer in the best interestsamount of the Company and its shareholders to enter into the Amendment to encourage further implementation and execution$8,400. The chairperson of the strategic plan developed by Mr. Warzala and his management team. The Employment Agreement had a year to year term prior to the Amendment, and the Compensation Committee believesand the Company’s entry intoGovernance and Nominating Committee each receive an additional $12,600 annual cash retainer and other members of those committees will receive an additional annual cash retainer in the Amendment will enhanceamount of $6,300. The Lead Director receives an additional $32,400 annual cash retainer. All cash retainers are payable ratably on a quarterly basis in arrears. Additionally, each non-employee
director is reimbursed for his or her expenses in connection with attendance at each meeting.
Non-employee directors also receive an annual award of restricted stock under the stability2017 Omnibus Incentive Plan. The annual award consists of its leadership team and reasonably incentivize Mr. Warzala to achieve the goalsshares of the Company’s strategic plan and work effectivelycommon stock with a value of $57,800 as of the date of grant. Directors who are appointed to the Board on CEO succession, bothoutside of whichthe annual meeting of shareholders receive a pro rata amount of the annual award. These restricted shares will vest over a twelve-month period upon the performance of future service as a director, subject to certain exceptions.
The following table shows the compensation paid by the Company to each non-employee director for 2021.
| | Robert B. Engel | | | $66,650 | | | $59,681 | | | $126,331 | |
| | Richard D. Federico | | | $79,350 | | | $59,681 | | | $139,031 | |
| | Steven C. Finch(2) | | | $34,150 | | | $59,681 | | | $93,831 | |
| | James J. Tanous | | | $72,800 | | | $59,681 | | | $132,481 | |
| | Nicole R. Tzetzo(2) | | | $33,100 | | | $59,681 | | | $92,781 | |
| | Michael R. Winter | | | $73,850 | | | $59,681 | | | $133,531 | |
| | Former Directors
| | | | | | | | | | |
| | Linda P. Duch(3) | | | $32,500 | | | — | | | $32,500 | |
| | Gerald J. Laber(3) | | | $28,500 | | | — | | | $28,500 | |
(1)
| Represents the total grant date fair value of the annual retainer share awards on the date of the award as reported on the Nasdaq Global Market on the date of grant. The annual retainer share awards vest in four equal quarterly installments on the first business day of each of June, September, December and April that occurs during the 12-month period after the date of grant. 1,695 restricted shares were granted to each non-employee director on May 6, 2021 and 423 shares were unvested at December 31, 2021. |
(2)
| Mr. Finch and Ms. Tzetzo were first elected as directors of the Company at the 2021 annual meeting of shareholders. |
(3)
| Ms. Duch and Mr. Laber did not stand for re-election at the Company’s annual meeting of shareholders held on May 5, 2021, and therefore ceased to be directors of the Company as of that date. |
Employment Agreements and Related Arrangements We are designeda party to create long-term value forthe following employment agreements with our shareholders.Named Executive Officers:
Richard S. Warzala. Pursuant to an employment agreement whereby Richard S. Warzala serves as President and Chief Executive Officer, Mr. Warzala is entitled to an annual base salary of not less than $650,000 effective March 1, 2022.
Michael R. Leach. Pursuant to an employment agreement whereby Michael R. Leach serves as Senior Vice President and Chief Financial Officer, Mr. Leach is entitled to an annual base salary of not less than $365,000 effective March 1, 2022.
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Robert P. Maida. Pursuant to an employment agreement whereby Robert P. Maida serves as Senior Vice President and President of Allied Innovum Group, Mr. Maida is entitled to an annual base salary of not less than $335,000 effective March 1, 2022.
Ashish R Bendre. Pursuant to an employment agreement whereby Ashish R. Bendre serves as Vice President and President of Allied Orion Group, Mr. Bendre is entitled to an annual base salary of not less than $378,000 effective March 1, 2022.
Helmut D. Pirthauer. Pursuant to an employment agreement whereby Helmut D. Pirthauer serves as Vice President and President of Allied Dynamos Group, Mr. Pirthauer is entitled to an annual base salary of not less than €305,000 effective March 1, 2022.
Unless terminated earlier in accordance with its terms, the Employment Agreement as modified by the AmendmentMr. Warzala’s employment agreement will remain effective until January 2, 2021. The Employment Agreement can be2023. Pursuant to the employment agreements with each of Messrs. Leach, Maida and Bendre, each executive serves for a term ending on December 31, 2022, which is automatically extended for additional one-year terms by mutual agreement. The Amendment madeperiods unless either party gives notice of nonrenewal 180 days in advance of the following material changesannual renewal date. Pursuant to Mr. Pirthauer’s employment agreement, either party may terminate the agreement as follows: (i) if notice is given between January 1 and June 30, the agreement will terminate at the end of the year and (ii) if notice is given between July 1 and December 31, the agreement will terminate at the end of the sixth full month after notice is given.
Each of our Named Executive Officers is eligible to receive annual incentive bonuses as our Compensation Committee
may determine based upon our results of operations and other relevant factors. Our Named Executive Officers also generally entitled to participate in our employee benefit plans. Under the employment agreements, each of our Named Executive Officers is entitled to receive fringe benefits in line with our present practice relating to the
Employment agreement andofficer’s position, including the
CIC Agreement:· Makes it clear that in the event Mr. Warzala’s employment is terminated with cause, theuse of a Company has no obligation to pay him unearned compensationautomobile or further benefits.
· Provides Mr. Warzala with certain benefits in the event that he retires on or after January 2, 2021 by giving the Company at least 120 days’ prior notice.
· Provides Mr. Warzala with the right to terminate his employment with “Good Reason” other than after a change in control of the Company (as defined in the CIC Agreement).
· Removes the tax “gross-up” from the CIC Agreement and replaces it with a “best net” provision.
As amended, the relevant provisions of the Employment Agreement are as follows:
Base Salary. The Agreement provides an annual base salary that may be reviewed annually for increase on a merit basis. Mr. Warzala’s salary was increased to $517,500 effective March 1, 2018.
Annual Incentive Bonus. Annual incentive bonuses are paid based on achieving performance criteria set annually by the Compensation Committee. The performance criteria will recognize the overall financial performance of the Company and the improvements made in financial results. Mr. Warzala participates in the Company’s annual incentive plan which is described above under the heading Compensation Discussion and Analysis—Elements of Compensation—Annual Cash Incentive Plan.
Equity Incentive Compensation.monthly automobile allowance.
The Company utilizes stock based awards for short-short and long-term incentives. In making its determination regarding the grant of stock based awards, the Board considers, among other things, the Employee’seach Named Executive Officer’s responsibilities, and efforts and performance in relation to the business plan and forecast, the relationship between the benefits of restricted stock and improving shareholder value, the development and performance of the Company’s products in the marketplace and an increase in the trading price per share of the Company’s Common Stock.common stock. The Board also considers customary business practices and Short-short and Long-Term Incentive Planlong-term incentive plan benefits granted in comparison to such benefits provided to other executives in similar positions. A discussion
Our Named Executive Officers have arrangements that provide for payments and other benefits if the Named Executive Officer’s employment terminates under certain circumstances. We believe that these payments and other benefits are important to recruiting and retaining our Named Executive Officers, as many of
Mr. Warzala’s short-termthe companies with which we compete for executive talent provide for similar payments to their senior employees. Additional information regarding these payments and
long-term equity incentive awardsother benefits is
set forth abovefound under the heading
Compensation Discussion and Analysis—Elements of Compensation—Equity Incentive Compensation.Nonqualified Deferred Compensation. Effective May 31, 2011, Mr. Warzala’s employment agreement was amended to add supplemental retirement contributions. Under this amendment, the Company made an annual contribution of $153,856 each May beginning“Potential Payments upon Termination or Change in 2011 and ending in 2017. The final contribution was made in 2017.
Other Provisions. Mr. Warzala participates in other benefits and perquisites as are generally provided by the Company to its employees. In addition, the Company provides Mr. Warzala with an automobile, personal financial planning, an annual physical examination and with life insurance for which the executive may designate the beneficiaries.
Retirement. If Mr. Warzala’s employment terminates as a result of his retirement on or after January 2, 2021, the Amendment would entitle him to:
· a cash payment equal to a prorated portionControl.”
Report of the
target bonus that he would have earned for the fiscal year in which the termination occurred had such termination not occurred;Human Capital and
· immediate vesting of all of his outstanding equity grants and awards that vest on the basis of the passage of time only (“Time Based Awards”) or that vest on the basis of performance criteria (“Performance-Based Awards”) that have been earned but are still subject to time-based vesting outstanding on the date of retirement.
Termination for Cause. Under the Employment Agreement as modified by the Amendment, if Mr. Warzala is terminated for cause or due to his voluntary resignation (other than a termination for Good Reason), the Company would have no further obligation to pay any unearned compensation or to provide any future benefits to him.
Death. Upon death, salary continues to the end of the month containing the date of death and for three months following. In addition, he will receive a cash payment equal to a prorated portion of the target bonus that he would have earned for the fiscal year in which the termination occurred had such termination not occurred; and immediate vesting of all of his outstanding Time Based Awards or Performance-Based Awards that have been earned but are still subject to time-based vesting, and prorated vesting of his unvested Performance-Based Awards.
Disability. In the case of disability, salary is continued until the end of the term of the Employment Agreement, as adjusted for any compensation payable under any Company paid disability plan, or until long term disability insurance becomes effective. Benefits are continued as generally provided by the Company to its employees in accordance with the Company’s disability plan. In addition, he will receive a cash payment equal to a prorated portion of the target bonus that he would have earned for the fiscal year in which the termination occurred had such termination not occurred; and immediate vesting of all of his outstanding Time Based Awards or Performance-Based Awards that have been earned but are still subject to time-based vesting, and prorated vesting of his unvested Performance-Based Awards.
Involuntary Termination Without Cause or for Good Reason. If Mr. Warzala is involuntarily terminated without cause or he terminates his employment for Good Reason, the Employment Agreement entitles him to:
· an amount equal to his then-current base salary payable in cash over a 12-month period;
· a cash payment equal to 90% of Base Salary in lieu of a bonus for the year in which termination occurs;
· continued coverage under the Company’s benefit plans for one year following termination; and
· immediate vesting of his Time-Based Awards and or Performance-Based Awards that have been earned but are still subject to time-based and, prorated vesting of his unvested Performance-Based Awards.
Report of the Compensation Committee
The following Report of the
Human Capital and Compensation Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 except to the extent the Company specifically incorporates this Report by reference therein.
The
Human Capital and Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and based on such review and discussions, the
Human Capital and Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
| | | Submitted by: |
| | | |
| | | THE HUMAN CAPITAL AND COMPENSATION COMMITTEE |
| | | |
| | | Richard D. Federico, Chairman |
| Gerald J. Laber
|
| Timothy T. Tevens
Chair
Robert B. Engel
Steven C. Finch
Nicole R. Tzetzo |
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Compensation of Named Executive Officers
Allied Motion and its subsidiaries have approximately
1,2501,950 employees worldwide, with approximately
48%52% in North America and
52%37% are located in
the rest of the world, including Europe and
Asia.the balance are located in Asia-Pacific. Our philosophy is to pay our employees competitively with similar positions in the applicable labor market. By doing so, we believe we maintain a high-quality, stable workforce.
The Dodd-Frank Wall Street Reform and Consumer Protection Act and
Securities and Exchange Commission (“SEC”)SEC rules require us to provide the ratio of the annual total compensation of our Chief Executive Officer, to that of an employee whose annual compensation is at the median of all our employees.
To identify
Our median-compensated employee was originally identified in fiscal 2020. We identified the employee with compensation at the median of all employees
we usedby using taxable income for
20172020 and applied this method consistently across our global employee population. We did not make any cost-of-living adjustments despite the large variety of labor markets in which our employees work, nor did we use any statistical sampling to determine the median employee.
Under this methodology For 2021, we determined ourthat there were no material changes to the Company’s employee population or compensation arrangements reasonably likely to result in a change in the ratio. In 2021, the prior year’s median employee was locatedterminated
employment. Therefore, as allowed by the SEC, we identified an alternate median employee with comparable pay as the median employee for 2021.
For 2021, our active workforce does not include approximately 120 employees which we acquired in Europe withseparate transactions involving the acquisition of (i) ORMEC Systems Corp. on November 2, 2021, (ii) ALIO Industries on November 4, 2021, and (iii) Spectrum Controls, Inc. on December 30, 2021. Pursuant to SEC rules, these employees will be included for our next pay ratio disclosure but were not included in this year’s calculation.
This median employee had a total compensation for
20172021 of
$33,519.$39,676. Our Chief Executive Officers’ total
20172021 compensation was
$1,807,209$3,907,236 as reported in the summary compensation table. Based on this information, the ratio of the annual total compensation was
54:98:1.
Different methodologies are used by various public companies to determine an estimate of their pay ratio. In addition, no two companies have identical employee populations and compensation programs differ by country even within the same company. The estimate ratio reported should not be used as a basis for comparison between companies.
Summary
Compensation TableThe following table presents information relating to total compensation of the
Named Executive Officers
of the Company (the “Named Executive Officers”) for the fiscal years ended December 31,
2017, 20162021, 2020 and
2015. | | | | | | | | Non-Equity | | | | | |
| | | | | | Stock | | Incentive Plan | | All Other | | | |
Name and Principal Position | | Year | | Salary | | Awards(1) | | Compensation(2) | | Compensation | | Total | |
Richard S. Warzala | | 2017 | | $ | 496,083 | | $ | 497,518 | | $ | 606,342 | (3) | $ | 207,266 | (4) | $ | 1,807,209 | |
President and Chief Executive Officer | | 2016 | | $ | 486,667 | | $ | 877,610 | | $ | 416,088 | | $ | 206,931 | | $ | 1,987,296 | |
| 2015 | | $ | 468,333 | | $ | 1,046,184 | | $ | 1,010,084 | | $ | 210,194 | | $ | 2,734,795 | |
| | | | | | | | | | | | | |
Michael R. Leach | | 2017 | | $ | 274,667 | | $ | 110,419 | | $ | 81,535 | | $ | 18,668 | (5) | $ | 485,289 | |
Chief Financial Officer | | 2016 | | $ | 266,667 | | $ | 242,002 | | $ | 72,877 | | $ | 16,477 | | $ | 598,023 | |
| | 2015 | | $ | 113,333 | | $ | 39,100 | | $ | 51,589 | | — | | $ | 204,022 | |
| | | | | | | | | | | | | |
Robert P. Maida | | 2017 | | $ | 224,383 | | $ | 90,785 | | $ | 66,970 | | $ | 18,668 | (6) | $ | 400,806 | |
Vice President of Operational Excellence | | 2016 | | $ | 210,250 | | $ | 91,103 | | $ | 70,498 | | $ | 16,653 | | $ | 388,414 | |
| 2015 | | $ | 202,500 | | $ | 108,382 | | $ | 133,936 | | $ | 17,940 | | $ | 462,758 | |
| | | | | | | | | | | | | |
Kenneth R. Wyman | | 2017 | | $ | 165,500 | | $ | 16,524 | | $ | 24,678 | | $ | 15,238 | (7) | $ | 221,940 | |
Vice President of Marketing | | 2016 | | $ | 162,500 | | $ | 16,451 | | $ | 22,818 | | $ | 14,692 | | $ | 216,461 | |
| 2015 | | $ | 159,333 | | $ | 16,530 | | $ | 52,693 | | $ | 14,558 | | $ | 243,114 | |
| | Richard S. Warzala
President and Chief
Executive Officer | | | 2021 | | | $584,583 | | | $1,648,214 | | | $1,574,104 | | | $100,335 | | | $3,907,236 | |
| | 2020 | | | $570,833 | | | $2,429,647 | | | $373,269 | | | $51,824 | | | $3,425,573 | |
| | 2019 | | | $544,583 | | | $2,351,581 | | | $1,339,314 | | | $43,945 | | | $4,279,423 | |
| | Michael R. Leach
Senior Vice President and
Chief Financial Officer | | | 2021 | | | $350,750 | | | $283,848 | | | $377,785 | | | $30,229 | | | $1,042,612 | |
| | 2020 | | | $340,000 | | | $488,624 | | | $148,218 | | | $17,206 | | | $994,048 | |
| | 2019 | | | $310,026 | | | $340,446 | | | $302,602 | | | $19,445 | | | $972,518 | |
| | Robert P. Maida
Senior Vice President and
Group President | | | 2021 | | | $320,250 | | | $246,222 | | | $303,754 | | | $29,680 | | | $899,906 | |
| | 2020 | | | $308,334 | | | $413,349 | | | $111,134 | | | $17,206 | | | $850,023 | |
| | 2019 | | | $270,000 | | | $312,294 | | | $263,535 | | | $19,445 | | | $865,274 | |
| | Ashish R. Bendre(4)
Vice President and Group
President | | | 2021 | | | $378,000 | | | $74,401 | | | $104,997 | | | $48,457 | | | $605,855 | |
| | 2020 | | | $390,993 | | | $117,086 | | | $36,057 | | | $28,124 | | | $572,260 | |
| | Helmut D. Pirthauer(4)
Vice President and Group
President | | | 2021 | | | $331,388 | | | $67,887 | | | $156,290 | | | $12,782 | | | $568,347 | |
| | 2020 | | | $285,373 | | | $135,825 | | | $124,491 | | | $12,328 | | | $558,017 | |
(1)
| The amounts in this column represent the total grant date fair value of stock awards on the date of the award as reported on the Nasdaq Global Market on the date of grant. The awards consist of restricted shares with performance and/or service based vesting conditions. |
(2)
| The amounts in this column represent the awards earned under the Company’s Annual Cash Incentive Plan for the applicable fiscal year. For Mr. Warzala, this column also includes awards earned under the Company ROE Incentive Plan in 2019. |
(3)
| The table below shows the components of this column for 2021. The amounts represent the amount paid by, or the incremental cost to, the Company. |
Allied Motion Technologies Inc. | 2022 Proxy Statement | | 25 |
(1) Represents the total grant date fair valueTABLE OF CONTENTS
Compensation of
stock awards on the date of the award as reported on the Nasdaq Global Market on the date of grant. The awards consist of restricted shares with performance and/or service based vesting conditions.(2) Non-Equity Incentive Plan Compensation for 2017 represents an amount paid pursuant to the Annual Incentive Bonus Plan, which is generally available to all employees of the Company and is payable based upon the achievement of Company performance goals established by the Board of Directors.
(3) Non-Equity Incentive Plan Compensation for Mr. Warzala for 2017 includes a performance incentive contribution to the Deferred Compensation Plan of $349,000.
(4) All Other Compensation for Mr. Warzala for 2017 includes (a) the Company’s contribution of $18,668 to the Company’s 401(k) Plan and Employee Stock Ownership Plan, (b) Company paid life insurance premiums of $24,500, (c) contribution under the Deferred Compensation Plan of $153,856 to provide Mr. Warzala a supplemental retirement benefit, (d) financial planning and physical examination services of $5,000 and (e) fair value of personal use of Company provided automobile of $5,242, as determined with reference to IRS regulations.
(5) All Other Compensation for Mr. Leach for 2017 includes the Company’s contribution of $18,668 to the Company’s 401(k) Plan and Employee Stock Ownership Plan.
(6) All Other Compensation for Mr. Maida for 2017 includes the Company’s contribution of $18,668 to the Company’s 401(k) Plan and Employee Stock Ownership Plan.
(7) All Other Compensation for Mr. Wyman for 2017 includes the Company’s contribution of $15,238 to the Company’s 401(k) Plan and Employee Stock Ownership Plan.
Named Executive Officers | | Richard S. Warzala | | | $8,382 | | | $24,500 | | | $2,395 | | | $11,600 | | | $8,236 | | | $45,222 | | | — | |
| | Michael R. Leach | | | $1,518 | | | — | | | — | | | $10,575 | | | $8,236 | | | $9,900 | | | — | |
| | Robert P. Maida | | | $2,838 | | | — | | | — | | | $6,952 | | | $8,236 | | | $11,654 | | | — | |
| | Ashish R. Bendre | | | $828 | | | — | | | $4,037 | | | $10,303 | | | $8,236 | | | $10,514 | | | $14,538 | |
| | Helmut D. Pirthauer | | | — | | | — | | | — | | | — | | | — | | | $12,782 | | | — | |
(4)
| Messrs. Bendre and Pirthauer were each named Vice President & Group President in July 2020. |
Grants of Plan-BasedPlan-Based Awards in 2017
2021
The following table summarizes the grants of plan-based awards to each of the Named Executive Officers during fiscal year
2017. | | | | Estimated
Possible Payouts
Under Non-
Equity Incentive
Plan Awards (1) | | Estimated Possible Payouts Under
Equity Incentive Plan Awards | | All Other Stock | | Grant Date Fair
Value of Stock | |
Name | | Grant Date | | Target($) | | Target(#) | | Maximum(#) | | Awards (#) | | Awards (4) | |
Richard S. Warzala | | | | | | | | | | | | | |
Cash Incentive Plan | | 03/01/17 | | $ | 346,763 | | — | | — | | — | | — | |
STIP (2) | | 03/01/17 | | | | 6,825 | | 13,650 | | — | | $ | 331,695 | |
Time Based Awards (3) | | 03/01/17 | | | | — | | — | | 6,824 | | $ | 165,823 | |
Michael R. Leach | | | | | | | | | | | | | |
Cash Incentive Plan | | 03/01/17 | | $ | 109,867 | | — | | — | | — | | — | |
STIP (2) | | 03/01/17 | | | | 1,420 | | 2,840 | | — | | $ | 69,012 | |
Time Based Awards (3) | | 03/01/17 | | | | — | | — | | 1,704 | | $ | 41,407 | |
Robert P. Maida | | | | | | | | | | | | | |
Cash Incentive Plan | | 03/01/17 | | $ | 90,240 | | — | | — | | — | | — | |
STIP (2) | | 03/01/17 | | | | 1,168 | | 2,335 | | — | | $ | 56,741 | |
Time Based Awards (3) | | 03/01/17 | | | | — | | — | | 1,401 | | $ | 34,044 | |
Kenneth R. Wyman | | | | | | | | | | | | | |
Cash Incentive Plan | | 03/01/17 | | $ | 33,253 | | — | | — | | — | | — | |
STIP (2) | | 03/01/17 | | | | 205 | | 410 | | — | | $ | 9,963 | |
Time Based Awards (3) | | 03/01/17 | | | | — | | — | | 270 | | $ | 6,561 | |
(1) As further explained in Compensation Discussion and Analysis—Elements of Compensation—Annual Cash Incentive Plan, the executive officers were eligible for a possible cash incentive award for 2017 pursuant to the Annual Cash Incentive Plan based on corporate performance. The table reflects the possible target incentive awards based on corporate performance. The target incentive is a percentage of the actual salary earned for the year and was set as follows: Mr. Warzala (70%| | Richard S. Warzala | | | | | | | | | | | | | | | | | | | |
| | Cash Incentive Plan(1) | | | 03/10/21 | | | $733,125 | | | — | | | — | | | — | | | — | |
| | Time-Based Awards(2) | | | 03/10/21 | | | | | | — | | | — | | | 11,591 | | | $366,569 | |
| | PSP(3) | | | 03/10/21 | | | | | | 5,796 | | | 11,591 | | | — | | | $366,569 | |
| | LTIP(4) | | | 03/10/21 | | | | | | — | | | 19,019 | | | — | | | $601,492 | |
| | 2020 LTIP Modification(5) | | | | | | | | | | | | | | | | | | $313,584 | |
| | Michael R. Leach | | | | | | | | | | | | | | | | | | | |
| | Cash Incentive Plan(1) | | | 03/10/21 | | | $175,950 | | | — | | | — | | | — | | | — | |
| | Time-Based Awards(2) | | | 03/10/21 | | | | | | — | | | — | | | 2,505 | | | $79,225 | |
| | PSP(3) | | | 03/10/21 | | | | | | 1,253 | | | 2,505 | | | — | | | $79,225 | |
| | LTIP(4) | | | 03/10/21 | | | | | | — | | | 2,607 | | | — | | | $82,451 | |
| | 2020 LTIP Modification(5) | | | | | | | | | | | | | | | | | | $42,948 | |
| | Robert P. Maida | | | | | | | | | | | | | | | | | | | |
| | Cash Incentive Plan(1) | | | 03/10/21 | | | $160,650 | | | — | | | — | | | — | | | — | |
| | Time-Based Awards(2) | | | 03/10/21 | | | | | | — | | | — | | | 2,286 | | | $72,299 | |
| | PSP(3) | | | 03/10/21 | | | | | | 1,143 | | | 2,286 | | | — | | | $72,299 | |
| | LTIP(4) | | | 03/10/21 | | | | | | — | | | 2,186 | | | — | | | $69,120 | |
| | 2020 LTIP Modification(5) | | | | | | | | | | | | | | | | | | $32,505 | |
| | Ashish R. Bendre | | | | | | | | | | | | | | | | | | | |
| | Cash Incentive Plan(1) | | | 03/10/21 | | | $54,810 | | | — | | | — | | | — | | | — | |
| | Time-Based Awards(2) | | | 03/10/21 | | | | | | — | | | — | | | 399 | | | $12,619 | |
| | PSP(3) | | | 03/10/21 | | | | | | 399 | | | 798 | | | — | | | $25,238 | |
| | Time-Based Awards(6) | | | 04/01/21 | | | | | | — | | | — | | | 750 | | | $26,140 | |
| | Time-Based Awards(2) | | | 04/01/21 | | | | | | — | | | — | | | 99 | | | $3,450 | |
| | PSP(3) | | | 04/01/21 | | | | | | 100 | | | 200 | | | — | | | $6,953 | |
| | Helmut D. Pirthauer | | | | | | | | | | | | | | | | | | | |
| | Cash Incentive Plan(1) | | | 03/10/21 | | | $111,364 | | | — | | | — | | | — | | | — | |
| | Time-Based Awards(2) | | | 03/10/21 | | | | | | — | | | — | | | 2,147 | | | $67,887 | |
(1)
| As further explained in Compensation Discussion and Analysis—Elements of Compensation—Annual Cash Incentive Plan, the executive officers were eligible for a possible cash incentive award for 2021 pursuant to the Plan based on corporate performance. The table reflects the possible target incentive awards based on corporate performance. The target incentive is a percentage of the actual salary earned for the year and was set as follows: Mr. Warzala (125%), Mr. Leach (50%) and Mr. Maida (50%), Mr. Bendre (14.5%) and Mr. Pirthauer (35%), Mr. Leach (40%), Mr. Maida (40%) and Mr. Wyman (20%). There is no threshold or maximum amount under the Plan. The actual amount earned by each Named Executive Officer in 2021 is reported under the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table. |
(2)
| As further explained in Compensation Discussion and Analysis—Elements of Compensation—Equity Incentive Compensation, consists of Time-Based Awards that will vest in three equal annual installments beginning in April 2022. |
26 | | Allied Motion Technologies Inc. | 2022 Proxy Statement |
TABLE OF CONTENTS
Compensation of Named Executive
Officer in 2017 is reported under the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table.(2) As further explained in Compensation Discussion and Analysis—Elements of Compensation—Equity Incentive Compensation—Short-Term Equity Incentive Program above, the executive officers were eligible for restricted stock incentive performance based equity awards based on achievement of annual performance goals for 2017. If the threshold performance goals are not met, then 0% of the shares will be earned. If the target performance goals are met, approximately 50% of the STIP shares will be earned. If the maximum performance goals are met, 100% of the shares will be earned. For 2017, the performance goal was partially met and 28% of the share award was earned, which vested 1/3 on March 13, 2018 and the remainder will vest 1/3 in each of 2019 and 2020, subject to continued employment.
(3) Consists of Time Based stock awards that will vest in three equal annual installments beginning in March 2018.
(4) Represents the total grant date fair value of stock awards on the date of the award. The fair values of these awards are based on the average closing bid and ask price of the Company’s common stock as reported on the Nasdaq Global Market on the date of grant.
Officers
(3)
| As further explained in Compensation Discussion and Analysis—Elements of Compensation—Equity Incentive Compensation—The Performance Share Plan above, certain executive officers were eligible for restricted stock awards based on achievement of annual performance goals for 2021. For 2021, the performance goals were fully achieved and 100% of the share award was earned for each Named Executive Officer. The award vested one-third on April 1, 2022 with the remainder vesting one-third in each of 2023 and 2024, subject to continued employment. |
(4)
| As further explained in Compensation Discussion and Analysis—Elements of Compensation—Equity Incentive Compensation—LTIP above, certain executive officers were eligible for restricted stock incentive performance-based equity awards based on achievement of longer term performance goals for 2022. All or a portion of the performance shares will be earned if the performance goal is met for any year in the period ending December 31, 2022. For 2021, shares were earned under the acquired sales criteria of the LTIP as a result of the acquisitions of ORMEC, ALIO and Spectrum Controls. There was also organic growth of $51.5 million. |
(5)
| The amount reported reflects the incremental fair value of the previously granted LTIP award for 2020 as a result of modification of the LTIP performance goal and not a new award grant. On March 10, 2021, the Human Capital and Compensation Committee modified the LTIP performance goal to take account of adverse impacts on the Company’s growth in 2020 resulting from the global COVID-19 pandemic. |
(6)
| Consists of Time-Based Awards that will vest in three equal annual installments beginning in September 2021. |
(7)
| Represents the total grant date fair value of stock awards on the date of the award. The fair values of these awards are based on the closing price of the Company’s common stock as reported on the Nasdaq Global Market on the date of grant. |
Outstanding Equity Awards at
20172021 Fiscal Year End
The following table shows all outstanding equity awards held by the Named Executive Officers as of December 31,
2017. | | Stock Awards | |
Name | | Number of Shares
or Units of Stock
That Have Not
Vested
(#) | | Market Value of
Shares or Units of
Stock That Have
Not Vested
($)(1) | | Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested (#)(2) | | Incentive Plan
Awards: Market
Value or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested
($)(1) | |
Richard S. Warzala | | 80,679 | (3) | $ | 2,669,668 | | 44,154 | (4) | $ | 1,461,056 | |
Michael R. Leach | | 7,241 | (5) | $ | 239,605 | | 6,866 | (6) | $ | 227,196 | |
Robert P. Maida | | 9,072 | (7) | $ | 300,192 | | 5,497 | (8) | $ | 181,896 | |
Kenneth R. Wyman | | 980 | (9) | $ | 32,428 | | 410 | (10) | $ | 13,567 | |
| | Richard S. Warzala | | | 87,105(3) | | | $3,178,461 | | | 60,607 | | | $2,211,549 | |
| | Michael R. Leach | | | 17,888(4) | | | $652,733 | | | 9,220 | | | $336,438 | |
| | Robert P. Maida | | | 15,509(5) | | | $565,923 | | | 7,580 | | | $276,594 | |
| | Ashish R. Bendre | | | 4,034(6) | | | $147,201 | | | 997 | | | $36,381 | |
| | Helmut D. Pirthauer | | | 6,584(7) | | | $240,250 | | | — | | | — | |
(1)
| Value is based on the closing price of the Company’s common stock of $36.49 on December 31, 2021, as reported on the Nasdaq Global Market. |
(2)
| Comprised of shares of restricted stock granted that are subject to future performance goals under the Company’s Long-Term Equity Incentive Program. All or a portion of the performance shares will be earned if the performance goal is met for any year in the period ending December 31, 2022. Also includes shares of restricted stock granted in 2021 that are subject to future performance goals under the Company’s Performance Share Plan. These shares were earned based on achievement of performance goals for 2021 and the earned award vested one-third on April 1, 2022 with the remainder vesting one-third in each of 2023 and 2024, subject to continued employment. |
(3)
| Consists of time-based awards, including performance-based awards that were previously earned but remain subject to time-based vesting. Of these shares, 41,169 shares vest in 2022; 27,981 shares vest in 2023; 12,191 shares vest in 2024; and 5,764 shares vest in 2025, in each case subject to continued employment. |
(4)
| Consists of time-based awards, including performance-based awards that were previously earned but remain subject to time-based vesting. Of these shares, 9,226 shares vest in 2022; 6,250 shares vest in 2023; 1,626 shares vest in 2024; and 786 shares vest in 2025, in each case subject to continued employment. |
(5)
| Consists of time-based awards, including performance-based awards that were previously earned but remain subject to time-based vesting. Of these shares, 7,865 shares vest in 2022; 5,688 shares vest in 2023; 1,361 shares vest in 2024; and 595 shares vest in 2025, in each case subject to continued employment. |
(6)
| Consists of time-based awards, including performance-based awards that were previously earned but remain subject to time-based vesting. Of these shares, 2,105 shares vest in 2022; 1,763 shares vest in 2023; and 166 shares vest in 2024, in each case subject to continued employment. |
(7)
| Of these shares, 3,266 shares vest in 2022; 2,603 shares vest in 2023; and 715 shares vest in 2024, in each case subject to continued employment. |
Allied Motion Technologies Inc. | 2022 Proxy Statement | | 27 |
(1) Value is based on the closing priceTABLE OF CONTENTS
Compensation of the Company’s common stock of $33.09 on December 31, 2017, as reported on the Nasdaq Global Market.Named Executive Officers
(2) Comprised of shares of restricted stock that are subject to future performance goals under the Company’s Long-Term Incentive Plan.
(3) Consists of time based awards, including performance based awards that were previously earned but remain subject to time based vesting, 62,597 shares vest in 2018; 11,804 shares vest in 2019; 4,277 shares vest in 2020; and 2,001 shares vest in 2021, in each case subject to continued employment.
(4) Includes 13,650 shares of restricted stock that were granted in 2017 but were not vested as of December 31, 2017. Of these shares 3,763 shares were earned based on achievement of performance goals for 2017, of which 1,255 shares vested on March 13, 2018. The remaining 9,887 shares were cancelled. Includes 30,504 shares that were granted in previous years and have not been earned as of December 31, 2017.
(5) Consists of time based awards, including performance based awards that were previously earned but remain subject to time based vesting, 3,639 shares vest in 2018; 2,496 shares vest in 2019; 837 shares vest in 2020; and 269 shares vest in 2021, in each case subject to continued employment.
(6) Includes 2,840 shares of restricted stock that were granted in 2017 but were not vested as of December 31, 2017. Of these shares 783 shares were earned based on achievement of performance goals for 2017, of which 261 shares vested on March 13, 2018. The remaining 2,057 shares were cancelled. Includes 4,026 shares that were granted in previous years and have not been earned as of December 31, 2017.
(7) Consists of time based awards, including performance based awards that were previously earned but remain subject to time based vesting, 6,701 shares vest in 2018; 1,492 shares vest in 2019; 674 shares vest in 2020; and 205 shares vest in 2021, in each case subject to continued employment.
(8) Includes 2,335 shares of restricted stock that were granted in 2017 but were not vested as of December 31, 2017. Of these shares 644 shares were earned based on achievement of performance goals for 2017, of which 215 shares vested on March 13, 2018. The remaining 1,691 shares were cancelled. Includes 3,162 shares that were granted in previous years and have not been earned as of December 31, 2017.
(9) Consists of time based awards, including performance based awards that were previously earned but remain subject to time based vesting, 545 shares vest in 2018; 345 shares vest in 2019; and 90 shares vest in 2020, in each case subject to continued employment.
(10) Includes 410 shares of restricted stock that were granted in 2017 but were not vested as of December 31, 2017. Of these shares 113 shares were earned based on achievement of performance goals for 2017, of which 75 shares vested on March 13, 2018. The remaining 297 shares were cancelled.
Option Exercises and Stock Vested in 2017
2021
The following table provides information regarding restricted stock awards that vested during
20172021 for each of the Named Officers. No options were owned or exercised by the Named Officers in
2017. | | Stock Awards | |
Name | | Number of Shares Acquired on
Vesting
(#) | | Value Realized on Vesting
($) | |
Richard S. Warzala | | 84,100 | | $ | 2,005,298 | |
Michael R. Leach | | 3,074 | | $ | 69,751 | |
Robert P. Maida | | 8,700 | | $ | 206,114 | |
Kenneth R. Wyman | | 956 | | $ | 19,829 | |
| | Richard S. Warzala | | | 78,837 | | | $2,632,986 | |
| | Michael R. Leach | | | 14,394 | | | $468,095 | |
| | Robert P. Maida | | | 13,701 | | | $437,859 | |
| | Ashish R. Bendre | | | 6,170 | | | $164,383 | |
| | Helmut D. Pirthauer | | | 3,927 | | | $118,783 | |
Potential Payments upon Termination or Change in Control
Employment Agreement
The Company has an employment agreement with Richard S. Warzala, President, Chief Executive Officer and Chairman of the Board. The terms of this agreement (as amended) are described in detail under the caption “Compensation of Executive Officers — Chief Executive Officer Employment Agreement”.
The following table shows potential payouts under the Mr. Warzala’s Employment Agreementemployment agreements or other arrangements with each Named Executive Officer assuming that employment was terminated in each situation listed in the table and that termination occurred on the last business day of 2017. Upon a change in control2021.
| | Death: | | | | | | | | | | | | | | | | |
| | Severance Pay | | | $146,625 | | | $87,975 | | | $80,325 | | | $94,500 | | | $158,564 | |
| | Annual Cash Incentive Compensation | | | $733,125 | | | $175,950 | | | $160,650 | | | $54,810 | | | — | |
| | Performance-Based Stock Awards | | | $2,211,549 | | | $336,438 | | | $276,594 | | | $36,381 | | | — | |
| | Accelerated Time-Based Equity Awards | | | $3,178,498 | | | $652,733 | | | $565,923 | | | $147,201 | | | $240,250 | |
| | Total | | | $6,269,797 | | | $1,253,096 | | | $1,083,492 | | | $332,892 | | | $398,814 | |
| | Disability: | | | | | | | | | | | | | | | | |
| | Severance Pay | | | $586,500 | | | — | | | — | | | — | | | $158,564 | |
| | Annual Cash Incentive Compensation | | | $733,125 | | | $175,950 | | | $160,650 | | | $54,810 | | | — | |
| | Performance-Based Stock Awards | | | $2,211,549 | | | $336,438 | | | $276,594 | | | $36,381 | | | — | |
| | Accelerated Time-Based Equity Awards | | | $3,178,498 | | | $652,733 | | | $565,923 | | | $147,201 | | | $240,250 | |
| | Total | | | $6,709,672 | | | $1,165,121 | | | $1,003,167 | | | $238,392 | | | $398,814 | |
| | Voluntary Resignation without Good Reason or Termination for Cause: | | | | | | | | | | | | | | | | |
| | No payments | | | N/A | | | N/A | | | N/A | | | N/A | | | N/A | |
| | Voluntary Resignation with Good Reason or Involuntary Termination Without Cause: | | | | | | | | | | | | | | | | |
| | Severance Pay | | | $586,500 | | | $351,900 | | | $321,300 | | | $378,000 | | | $475,692 | |
| | Annual Cash Incentive Compensation | | | $527,850 | | | — | | | — | | | — | | | — | |
| | Performance-Based Stock Awards | | | $2,211,549 | | | $336,438 | | | $276,594 | | | $36,381 | | | — | |
| | Accelerated Time-Based Equity Awards | | | $3,178,498 | | | $652,733 | | | $565,923 | | | $147,201 | | | — | |
| | Healthcare and other Insurance Benefits | | | $45,000 | | | $45,000 | | | $45,000 | | | $45,000 | | | — | |
| | Total | | | $6,549,397 | | | $1,386,071 | | | $1,208,817 | | | $606,582 | | | $475,692 | |
| | Voluntary Resignation with Good Reason or Involuntary Termination Without Cause within 90 days prior to or 24 months following a change in control: | | | | | | | | | | | | | | | | |
| | Severance Pay | | | $3,475,258 | | | $527,850 | | | $481,950 | | | $432,810 | | | $475,692 | |
| | Annual Cash Incentive Compensation | | | $1,574,104 | | | $175,950 | | | $160,650 | | | $54,810 | | | — | |
| | Performance-Based Stock Awards | | | $2,211,549 | | | $336,438 | | | $276,594 | | | $36,381 | | | — | |
| | Accelerated Time-Based Equity Awards | | | $3,178,498 | | | $652,733 | | | $565,923 | | | $147,201 | | | — | |
| | Healthcare and other Insurance Benefits | | | $293,250 | | | $175,950 | | | $160,650 | | | $189,000 | | | — | |
| | Total | | | $10,732,659 | | | $1,868,921 | | | $1,645,767 | | | $860,202 | | | $475,692 | |
Refer to Definitions section below for descriptions of terms used.
28 | | Allied Motion Technologies Inc. | 2022 Proxy Statement |
TABLE OF CONTENTS
Compensation of Named Executive Officers
Payments upon Retirement. Under the terms of the Company,employment agreement with Messrs. Warzala, Leach, Maida and Bendre, if the executive’s employment terminates as a result of retirement upon attaining age 65 years of age and 10 years of continual employment (or on or after January 2, 2023 for Mr. Warzala), the Employment Agreement would entitle him to (i) a cash payment equal to a prorated portion of the target bonus that he would have earned for the fiscal year in which the termination occurred had such termination not occurred; and (ii) immediate vesting of all of his outstanding equity grants and awards that vest on the basis of the passage of time only (“Time-Based Awards”) or PSP and LTIP awards that vest on the basis of performance criteria (“Performance-Based Awards”) that have been earned but are still subject to time-based vesting outstanding on the date of retirement. At December 31, 2021, no Named Executive Officer was eligible for retirement under the terms of his respective employment agreement.
Payments upon Death. Under the terms of the employment agreements with Messrs. Warzala, Leach, Maida and Bendre, in the event of the executive’s death the executive would beis entitled to payments and benefits under the change in control agreement discussed below and such payments are not to be duplicated by any requirements of the Employment Agreement.Benefits and Payments | | Voluntary
Resignation
without Good
Reason or
Involuntary
Termination
with Cause(1) | | Voluntary
Resignation
with Good
Reason or
Involuntary
Termination
Without Cause | | Death or
Disability | | Retirement | |
Compensation: | | | | | | | | | |
Severance Pay | | $ | — | | $ | 497,500 | (2) | — | (3) | — | |
Annual Bonus | | — | | 447,750 | (4) | 348,250 | (5) | 348,250 | (5) |
Deferred Compensation Plan Performance Contribution (6) | | | | 349,000 | | 349,000 | | 349,000 | |
Performance Based Awards (7) | | — | | 420,873 | | 420,873 | | — | |
Accelerated Vesting of Time-Based Equity Awards (8) | | — | | 2,821,540 | | 2,821,540 | | 2,821,540 | |
Benefits: | | | | | | | | | |
Healthcare and other Insurance Benefits | | — | | 45,000 | (9) | — | (10) | — | |
Total | | $ | — | | $ | 4,581,664 | | $ | 3,939,664 | | $ | 3,518,790 | |
| | | | | | | | | | | | | |
(1) Termination due to resignation or involuntary termination with cause does not affect the Company’s obligation to make all payments to the executive which were fixed and determined prior to the effective date of termination.
(2) Represents 12 months Base Salary payable in cash over a 12-month period.
(3) Upon Death, salary continuescontinuation to the end of the month containing the date of death and for three months following. Forsubsequent months. In addition, the executive will receive a cash payment equal to a prorated portion of the Annual Cash Incentive bonus that he would have earned for the fiscal year in which the death occurred; and immediate vesting of all of his outstanding Time-Based Awards and Performance-Based Awards that have been earned but are still subject to time-based vesting, and prorated vesting of his unearned Performance-Based Awards. Under the terms of Mr. Pirthauer’s employment agreement, he is entitled to salary continuation to the end of the end of the month containing the date of death and for six subsequent months. In addition, pursuant to the award agreement under the 2017 Omnibus Incentive Plan, Mr. Pirthauer will receive immediate vesting of all of his outstanding Time-Based Awards.
Payments upon Disability
. Under the Company shall continueterms of Mr. Warzala’s employment agreement, in the executive’scase of disability, salary (adjustedis continued until the end of the term of the employment agreement, as adjusted for any compensation payable to him under any Company paid disability plan, during such period)or until long-term disability insurance becomes effective. Benefits are continued as generally provided by the Company to its employees in accordance with the Company’s disability plan. Under the terms of the employment agreements with Messrs. Leach, Maida and Bendre, the executive is entitled to the benefits under any disability insurance policies maintained by the Company for the greater of (x) the remaining termbenefit of the Agreementexecutive. In addition, Messrs. Warzala, Leach, Maida and Bendre will receive a cash payment equal to a prorated portion of the Annual Cash Incentive bonus that he would have earned for the fiscal year in which the disability occurred had such disability not occurred; and immediate vesting of all of his outstanding Time-Based Awards and Performance-Based Awards that have been earned but are still subject to time-based vesting, and prorated vesting of his unearned Performance-Based Awards. Under the terms of Mr. Pirthauer’s employment agreement, he is entitled to his base salary for the lesser of six months or (y) until long term disability insurance coverage becomes effective.the termination of his employment agreement. In addition, pursuant to the award agreement under the 2017 Omnibus Incentive Plan, Mr. Pirthauer will receive immediate vesting of all of his outstanding Time-Based Awards.
Payments upon Voluntary Resignation without Good Reason or Involuntary Termination with Cause(4). A Named Executive Represents
Officer is not entitled to receive any additional forms of severance payments or benefits upon his voluntary decision to terminate employment with the Company prior to being eligible for retirement or upon termination for cause.
Payments upon Voluntary Resignation with Good Reason or Involuntary Termination Without Cause. Under the terms of Mr. Warzala’s employment agreement, if he is involuntarily terminated without cause or he terminates his employment for good reason, the employment agreement entitles him to: (i) an amount equal to his then current base salary payable in cash over a 12-month period; (ii) a cash payment equal to 90% of Base Salary in lieu of an Annual Cash Incentive bonus for the year in which termination occurs; (iii) continued coverage under the termination date occurs.(5) Represents the pro rata portion (based on the numberCompany’s benefit plans for one year following termination; and (iv) immediate vesting of days employed during the year in which employment is terminated) of the executive’s target bonus for the year.
(6) Represents the lump-sum payment of the current year Deferred Compensation Plan performance based award.
(7) Represents the pro rata portion (based on the number of days employed during the applicable performance period during which employment is terminated) of the cash or securities under any Performance Based Awards.
(8) Represents the acceleration of all time-based stock awards, including performance-based awardshis Time-Based Awards and Performance-Based Awards that were previouslyhave been earned but remainare still subject to time-based vesting atand, prorated vesting of his unearned Performance-Based Awards.
Under the
dateterms of
termination, based on our closing stock pricethe employment agreements with Messrs. Leach, Maida and Bendre, the executive is entitled to a cash payment equal to 100% of
$33.09 per share as of December 29, 2017, plus accrued dividends.(9) Represents the estimated incremental costExecutive’s then current base salary. Executive will also be entitled to continued coverage under the CompanyCompany’s benefit plans for one year of health, dental, long-term disability and life insurance coverages based on the coverage that existedfollowing termination at the datesame premium rates as may be charged from time to time for senior level employees. In addition, the Executive will be entitled to immediate vesting of termination.
(10) For Disability,all of his outstanding Time-Based Awards and Performance-Based Awards that have been earned but are still subject to time-based vesting, and prorated vesting of his unearned Performance-Based Awards.
Under the terms of Mr. Pirthauer’s employment agreement, the Company shall continuemay not terminate the same coverage under medical, dental, long-term disabilityemployment agreement prior to December 31, 2023 without cause. If Mr. Pirthauer is involuntarily terminated without cause after that date, he is entitled to severance pay equal to one and life insurance for the greater of (x) the remaining term of the Agreementhalf years’ base salary.
Voluntary Resignation with Good Reason or
(y) until long term disability insurance coverage becomes effective.ChangeInvoluntary Termination Without Cause within 90 days prior to or 24 months following a change in Control Agreements
The Company has also entered into separatecontrol. Mr. Warzala’s change in control agreement and Messrs. Leach, Maida and Bendre’s employment agreements with Messrs. Warzala, Leach and Maida that provide for certain payments upon termination of employment resulting within 90 days prior to or 24 months following a change in control of the Company. The agreements are extended automatically on January 1 of each year to a total term of two years, unless notice of non-renewal is given by the Company not later than the September 30 immediately preceding such January (meaning that notice must be given at least 15 months prior to termination). These agreements only provide benefits if there is both a change in control of the Company and termination of employment other than for cause. If the executive’s employment is terminated by the Company, other than for death, disability or cause, or the executive terminates the agreement for good reason, in each case following a change in control, then the executive will be entitled to certain benefits to be paid inas a lump sum in cash. The most significant components
Under the terms of
those benefits are as follows:· AMr. Warzala’s change in control agreement, he is entitled to (i) a severance payment equal to a multiple (2.52.5 times for Mr. Warzala and 1.0 times for Messrs. Leach and Maida) of the executive’shis annual base salaryBase Salary plus the highest amount paid or payable pursuant to the annual incentiveAnnual Cash Incentive plan applicable to the executive for any of the 3 prior fiscal years;
· (ii) a benefit payment equal to 25% of annual salary for 24 months to purchase healthcare and other insurance benefits;
· (iii) payment of all legal fees and expenses incurred as a result of termination.
· Mr. Warzala’s agreement providestermination; and (iv) a prorata payment for the current year benefit pursuant to any annual or long-term incentive plan applicable to the executive for the year that includes the Date of Termination.
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The following tables show potential payouts under
Compensation of Named Executive Officers
Under the
changeterms of
control agreements assuming that the employment
ofagreements with Messrs. Leach, Maida and Bendre, the executive
was terminated in each situation listed in the table and that termination occurred on the last business day of 2017.Richard S. Warzala
Benefits and Payments | | Voluntary
Resignation without
Good Reason or
Involuntary
Termination with
Cause | | Voluntary
Resignation with
Good Reason or
Involuntary
Termination Without
Cause | |
Compensation: | | | | | |
Severance Pay (1) | | $ | — | | $ | 1,896,487 | |
Annual Bonus (2) | | — | | 257,342 | |
Deferred Compensation Plan Performance Contribution (3) | | — | | 1,379,833 | |
Performance-Based Awards (4) | | — | | 420,873 | |
Accelerated Vesting of Time-Based Equity Awards (5) | | — | | 2,821,540 | |
Benefits: | | | | | |
Healthcare and other Insurance Benefits (6) | | — | | 248,750 | |
Total | | $ | — | | $ | 7,024,826 | |
(1) Represents lump sum severanceis entitled to (i) a cash payment equal to 2.5 times the sum100% of the executive’s then current Base Salary andplus the highest amount paid or payable pursuant to the Management Incentive Compensation Plan for any of the 3 fiscal years ending prior to the Date of Termination.
(2) Represents the estimated incentive compensation under the Company’starget Annual Cash Incentive Plan.
(3) Representsfor the lump-sum paymentyear of termination (or if greater, the current year Deferred Compensation Plan performance based award plusimmediately preceding the year in which the Change in Control occurred); (ii) an additional amount equal to the executive’s target Annual Cash Incentive for the year of termination; (iii) a severancebenefit payment equal to the total25% of the previous three years performance awards under the Deferred Compensation Plan.
(4) Represents the pro rata portion (based on the number of calendarannual salary for 24 months employed during the applicable performance period during which employment is terminated) of the cash or securities under any Performance Based Awards.
(5) Represents the accelerationto purchase healthcare and other insurance benefits; and (iv) immediate vesting of all time-based stock awards, including performance-based awardsof his outstanding Time-Based
Awards and Performance-Based Awards that were previouslyhave been earned but remainare still subject to time-based vesting, atand prorated vesting of his unearned Performance-Based Awards.
Under the
terms of Mr. Pirthauer’s employment agreement, the Company may not terminate the employment agreement prior to December 31, 2023 without cause. If Mr. Pirthauer is involuntarily terminated without cause after that date,
of termination, based on our closing stock price of $33.09 per share as of December 29, 2017, plus accrued dividends.(6) Represents 25% of Base Salary as of the Date of Termination for 24 monthshe is entitled to assist in purchasing benefits.
Michael R. Leach
Benefits and Payments | | Voluntary
Resignation without
Good Reason or
Involuntary
Termination with
Cause | | Voluntary
Resignation with
Good Reason or
Involuntary
Termination Without
Cause | |
Compensation: | | | | | |
Severance Pay (1) | | $ | — | | $ | 348,877 | |
Annual Bonus (2) | | — | | 81,535 | |
Accelerated Vesting of Time-Based Equity Awards (3) | | — | | 266,904 | |
Benefits: | | | | | |
Healthcare and other Insurance Benefits (4) | | — | | 138,000 | |
Total | | $ | — | | $ | 835,316 | |
Robert P. Maida
Benefits and Payments | | Voluntary
Resignation without
Good Reason or
Involuntary
Termination with
Cause | | Voluntary
Resignation with
Good Reason or
Involuntary
Termination Without
Cause | |
Compensation: | | | | | |
Severance Pay (1) | | $ | — | | $ | 389,328 | |
Incentive Compensation (2) | | — | | 66,970 | |
Accelerated Vesting of Time-Based Equity Awards (3) | | — | | 324,365 | |
Benefits: | | | | | |
Healthcare and other Insurance Benefits (4) | | — | | 113,500 | |
Total | | $ | — | | $ | 894,163 | |
(1) Represents lump sum severance paymentpay equal to 1.0 times the sum of the Base Salaryone and the highest amount paid or payable pursuant to the Employee Incentive Compensation Plan for any of the 3 fiscal years ending prior to the Date of Termination.
(2) Represents the estimated incentive compensation under the Company’s Annual Cash Incentive Plan.
(3) Represents the acceleration of all time-based stock awards, including performance-based awards that were previously earned but remain subject to time-based vesting at the date of termination, based on our closing stock price of $33.09 per share as of December 29, 2017, plus accrued dividends.
(4) Represents 25% of Base Salary as of the Date of Termination for 24 months to assist in purchasing benefits.
half years’ base salary.
Definitions.
Below is a description of the definitions and assumptions that were used in creating the change in control tables above.
“Date of Termination” means (i) thirty days after providing the Notice of Termination for a termination for disability, or (ii) the date specified in the Notice of Termination for a termination for cause, good reason, death or retirement.
“Notice of Termination” means a written notice that indicates the specific termination provision of the change of control agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination of employment under the provision indicated.
“Base Salary” means an amount equal to the annual base salary in effect immediately prior to the Notice of Termination.
A “Change in control of the Company” means any of the following: (i) a person (other than any officer or director) is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing more than 45% of the combined voting power of the Company’s then outstanding securities; (ii) upon the first purchase of outstanding shares of the Company’s outstanding common stock pursuant to a tender or exchange offer, with certain exceptions; (iii) a change in the composition of the Board of Directors such that the incumbent directors cease to constitute at least a majority of the Board during any period of two consecutive years (including, for purposes of computing a majority, those persons approved by a vote of at least two-thirds of the Company directors then still in office who either (1) were directors at the beginning of the period or (2) whose election or nomination for election was previously so approved); (iv) the shareholders of the Company approve a merger or consolidation of the Company, with certain exceptions; or (v) the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (excluding a spinoff distribution to shareholders of all or part of the Company’s equity interest in a subsidiary entity).
A termination is for “Cause” if it is for any of the following reasons: (i) an act of dishonesty constituting a felony under the laws of the executive’s domicile resulting or intending to result in gain or personal enrichment at the expense of the Company; (ii) the use of drugs or excessive and habitual use of alcohol either of which substantially affects the executive’s ability to perform their duties with the Company; or
(iii) continued unauthorized and significant absences from duty (with certain exceptions). Notwithstanding the foregoing, the executive will not be deemed to have been terminated for cause unless there is a resolution adopted by at least three-fourths of the full Board of Directors finding that in their good faith opinion the executive was guilty of conduct set forth above and specifying the particulars in detail.
A termination is for “Good Reason” if it is within two years following any of the following events: (i) a change in the executive’s title or corporation office that results in a material diminution of the executive’s authority, duties or responsibilities; the assignment to the executive of any duties inconsistent with their status with the Company; or a substantial adverse alteration in the nature or status of the executive’s responsibilities; (ii) the change of the principal business of the Company (as evidenced by certain conditions) to the extent that the change results in a material negative change to the executive’s duties, conditions under which the duties are performed, or compensation; (iii) a reduction in annual base salary, without the executive’s consent; (iv) the relocation of the executive’s principal office to a location more than 50 miles from the location where such office is located immediately prior to the change in control of the Company; (v) the failure to pay within seven days, without the executive’s consent, any portion of current compensation or installment of deferred compensation under any applicable deferred compensation program (with certain conditions); (vi) the failure to continue any compensation plan or equivalent plan in which the executive participated in immediately prior to a change in control (with certain conditions); (vii) the failure to provide the executive with benefits substantially similar to those provided at the time of the change in control of the Company, the taking of any action by the Company that would directly or indirectly materially reduce any of such benefits or deprive the executive of any material fringe benefit provided at the time of the change in control of the Company, or the failure by the Company to provide the number of paid vacation days the executive is entitled on the basis of years of service with the Company in accordance with the Company’s normal vacation policy in effect at the time of the change in control of the Company; (viii) a breach of duty; or (ix) any termination of employment without a Notice of Termination.
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CERTAIN TRANSACTIONS AND RELATIONSHIPS
Change in Control Agreement
The Company has entered into a change in control agreement with certain of the Company’s executive officers. See “Potential Payments Upon Change in Control” above.
Related-Party Transactions Policies and Procedures.
The Company’s Board of Directors is responsible for the review, approval and ratification of transactions between the Company or any of its subsidiaries and a senior officer or director of the Company, members of their immediate family, a shareholder owning in excess of five percent of the Company or an entity which is owned or controlled by one of the
foregoing. The AuditGovernance and Nominating Committee assists the Board in exercising this authority by reviewing each such transaction and then reporting the results of its review to the Board with, if appropriate, a recommendation to approve, ratify or disallow such transaction.
The Company has entered into an employment agreement with each of the Company’s executive officers. See “Employment Agreements and Related Arrangements” and “Potential Payments Upon Termination or Change in Control” above.
The Company leases certain facilities from a company for which Helmut D. Pirthauer, one of the Company’s executive officers, is a part owner. In connection with such leases, the Company made payments to the lessor of approximately $706,000 during the year ended December 31, 2021. Future minimum lease payments under these leases as of December 31, 2021 are approximately $7,487,000 and is subject to normal price escalation clauses. The Company believes that the terms of the leases above are comparable to the terms that would be available from an unrelated third party under the same or similar circumstances.
During fiscal 2021, the adult son of Richard S. Warzala was employed by the Company as Director of New Business Development, a position which reports directly to the Company’s Chief Financial Officer. His total compensation for 2021, which was reviewed and approved by the Human Capital and Compensation Committee, was approximately $321,660 and he was eligible for company benefits available to all other employees in a similar position.
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OWNERSHIP OF COMPANY STOCK
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
the Record Date,March 9, 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) | |
Richard S. Warzala | | 1,041,579 | (2) | 11.0 | % |
495 Commerce Drive, Suite 3 | | | | | |
Amherst, NY 14228 | | | | | |
Richard D. Smith | | 515,512 | (3) | 5.0 | % |
8422 Newland Drive | | | | | |
Arvada, CO 80003 | | | | | |
| | Richard S. Warzala
495 Commerce Drive, Suite 3
Amherst, NY 14228 | | | 1,557,982(2) | | | 10.1% | |
(1)
| The percentages are based upon 15,452,717 shares of Common Stock outstanding as of the Record Date. |
(2)
| Includes 218,447 shares of Common Stock granted as incentive restricted shares under the Company’s stock incentive plans that have not yet vested and 24,777 shares of Common Stock credited to the Company’s Employee Stock Ownership Plan (“ESOP”) account of Mr. Warzala. Except as set forth in this note (2), does not include shares held by the ESOP as to which Mr. Warzala serves as one of four trustees. |
(1) The percentages are based upon 9,426,012 shares of Common Stock outstanding as of the Record Date.
(2) Includes 127,446 shares of Common Stock granted as incentive restricted shares under the Company’s stock incentive plans that have not yet vested and 15,410 shares of Common Stock credited to the Company’s Employee Stock Ownership Plan (“ESOP”) account of Mr. Warzala. Except as set forth in this note (2), does not include shares held by the ESOP as to which Mr. Warzala serves as one of four trustees.
(3) Includes 4,865 shares of Common Stock granted as incentive restricted shares under the Company’s stock incentive plans that have not yet vested. Includes 468,083 shares of Common Stock held by Smith Family Trust, of which Mr. Smith is trustee.
Security Ownership of Management and Directors
The following table sets forth certain information available to the Company with respect to shares of Common Stock owned by each director, each nominee for director, each executive officer and all directors, nominees and executive officers as a group, as of
the Record Date: | | Amount and Nature of Beneficial Ownership | | | |
Name | | Common Stock | | Unvested Restricted
Stock | | Total
Beneficial
Ownership | | Percentage of
Common Stock(1) | |
Richard D. Federico | | 31,058 | | 6,613 | | 37,671 | | * | |
Gerald J. (Bud) Laber | | 31,308 | | 4,865 | | 36,173 | (2) | * | |
Michael R. Leach | | 5,146 | | 15,014 | | 20,160 | | * | |
Robert P. Maida | | 36,680 | | 15,728 | | 52,408 | (3) | * | |
Richard D. Smith | | 510,647 | | 4,865 | | 515,512 | (4) | 5.5 | % |
James J. Tanous | | 8,539 | | 4,865 | | 13,404 | | * | |
Timothy T. Tevens | | — | | 1,729 | | 1,729 | | * | |
Richard S. Warzala | | 914,133 | | 127,446 | | 1,041,579 | (5) | 11.0 | % |
Michael R. Winter | | 7,112 | | 4,865 | | 11,977 | | * | |
Kenneth R. Wyman | | 43,024 | | 1,685 | | 44,709 | (6) | * | |
Employee Stock Ownership Plan | | 413,434 | | — | | 413,434 | (7) | 4.4 | % |
All directors, nominees and executive officers as a group | | 1,970,959 | | 187,675 | | 2,158,634 | | 22.9 | % |
| | Ashish R. Bendre | | | 41,088 | | | 7,281 | | | 48,369(2) | | | * | |
| | Robert B. Engel | | | 23,368 | | | 423 | | | 23,791 | | | * | |
| | Richard D. Federico | | | 64,606 | | | 423 | | | 65,029 | | | * | |
| | Steven C. Finch | | | 1,272 | | | 423 | | | 1,695 | | | * | |
| | Michael R. Leach | | | 44,174 | | | 37,847 | | | 82,021(3) | | | * | |
| | Robert P. Maida | | | 80,213 | | | 32,109 | | | 112,322(4) | | | * | |
| | Helmut D. Pirthauer | | | 33,454 | | | 8,600 | | | 42,054 | | | * | |
| | Geoffery C. Rondeau | | | 7,297 | | | 6,821 | | | 14,118(5) | | | * | |
| | James J. Tanous | | | 28,492 | | | 423 | | | 28,915 | | | * | |
| | Nicole R. Tzetzo | | | 1,272 | | | 423 | | | 1,695 | | | * | |
| | Richard S. Warzala | | | 1,339,535 | | | 218,447 | | | 1,557,982(6) | | | 10.1% | |
| | Michael R. Winter | | | 28,455 | | | 423 | | | 28,878 | | | * | |
| | Employee Stock Ownership Plan | | | 662,309 | | | — | | | 662,309(7) | | | 4.3% | |
| | All directors, nominees and executive officers as a group | | | 2,355,535 | | | 313,643 | | | 2,669,178 | | | 17.3% | |
(1)
| The percentages are based upon 15,452,717 shares of Common Stock outstanding as of the Record Date. |
(2)
| Includes 213 shares of Common Stock credited to the ESOP account of Mr. Bendre. |
(3)
| Includes 1,771 shares of Common Stock credited to the ESOP account of Mr. Leach. Except as set forth in this note (3), does not include shares held by the ESOP as to which Mr. Leach serves as one of four trustees. |
(4)
| Includes 4,275 shares of Common Stock credited to the ESOP account of Mr. Maida. |
(5)
| Includes 1,771 shares of Common Stock credited to the ESOP account of Mr. Rondeau. |
(6)
| Includes 24,777 shares of Common Stock credited to the ESOP account of Mr. Warzala. Except as set forth in this note (6), does not include shares held by the ESOP as to which Mr. Warzala serves as one of four trustees. |
32 | | Allied Motion Technologies Inc. | 2022 Proxy Statement |
* Less than 1.0%.TABLE OF CONTENTS
(1) The percentages are based upon 9,426,012 shares of Common Stock outstanding as of the Record Date.
(2) Includes 12,000 shares of Common Stock held by Mr. Laber’s 401k Plan.
(3) Includes 1,920 shares of Common Stock credited to the ESOP account of Mr. Maida.
(4) See note (3) under “Security
Ownership of
Certain Beneficial Owners.”(5) See note (2) under “Security Ownership of Certain Beneficial Owners.”
(6) Includes 12,520 shares of CommonCompany Stock credited to the ESOP account of Mr. Wyman.
(7) Messrs. Warzala and Leach are trustees of the ESOP and could be deemed to have shared investment power over those shares. The ESOP holds an aggregate of 413,434 shares of Common Stock, including 272 shares credited to the ESOP account of Mr. Leach, 1,920 shares credited to the ESOP account of Mr. Maida, 15,410 shares credited to the ESOP account of Mr. Warzala, and 12,520 shares credited to the ESOP account of Mr. Wyman, previously reported in this table.
(7)
| Messrs. Warzala and Leach are trustees of the ESOP and could be deemed to have shared investment power over those shares. The ESOP holds an aggregate of 662,309 shares of Common Stock, including 213 shares credited to the ESOP account of Mr. Bendre, 1,771 shares credited to the ESOP account of Mr. Leach, 4,275 shares credited to the ESOP account of Mr. Maida, 1,771 shares credited to the ESOP account of Mr. Rondeau and 24,777 shares credited to the ESOP account of Mr. Warzala, previously reported in this table. |
Delinquent Section 16(a)
Beneficial Ownership Reporting ComplianceReports
Section 16(a) of the Securities Exchange Act of 1934 requires directors and executive officers and persons who own more than ten percent of the Company’s Common Stock to report their ownership and any changes in that ownership to the Securities and Exchange Commission. The Company believes that all Section 16(a) filing requirements applicable to its directors, executive officers and greater than ten percent beneficial owners were met for 2017. All reports are current as2021 with the exception of a Form 4 to report the date hereof.forfeiture of restricted shares by one executive was inadvertently filed late.
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The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 except to the extent the Company specifically incorporates this Report by reference therein.
Management is responsible for the Company’s financial statements and reporting process. The Company’s independent registered public accounting firm,
EKS&HDeloitte & Touch LLP
(EKS&H) is responsible for performing an independent audit of the Company’s annual financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States)(“PCAOB”) and for issuing a report on those statements.
As members of the Audit Committee, our work is guided by our Audit Committee Charter. The Charter is reviewed annually by the Board of Directors. The Charter is posted on the Company’s website. We have completed all Charter tasks scheduled to be performed in
20172021 prior to year-end and all Charter tasks scheduled to be performed in
20182022 prior to the filing of this proxy statement. Our work included, among other procedures:
(1) We pre-approved audit and permitted non-audit services of the Company’s independent auditors.
(2) We met with management and the independent auditors on a quarterly basis to discuss financial statements and related reports and to review significant accounting and reporting matters.
(3) We discussed with the independent auditors their independence and the matters required to be discussed by Auditing Standards No. 1301, “Communications with Audit Committees.” We received the written disclosures from the independent auditors required by PCAOB Rule 3526, “Communication with Audit Committees Concerning Independence.”
(4) Prior to their publication, we reviewed and discussed with management and the independent auditors the Company’s December 31,
2017,2021, audited financial statements, the related audit report, and the applicable management’s discussion and analysis.
Based on the work referred to above, we 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 December 31,
2017,2021, for filing with the SEC.
| | | Submitted by: |
| | | |
| | | THE AUDIT COMMITTEE |
| | | |
| | | Michael R. Winter, Chairman
Gerald J. (Bud) Laber Robert B. Engel
Steven C. Finch
James J. Tanous
Timothy T. Tevens |
34 | | Allied Motion Technologies Inc. | 2022 Proxy Statement |
TABLE OF CONTENTS
Policy
Forfor Pre-Approval of Audit and Permitted Non-Audit Services
The Audit Committee of the Board has adopted policies and procedures providing for the pre-approval of audit and non-audit services performed by the Company’s independent registered public accounting firm. Pre-approval may be given as part of the Audit Committee’s approval on the engagement of the independent auditor or on an individual case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services may be delegated to the Audit Committee chairman
up to $25,000, but the decision is subsequently reported to the full Audit Committee.
Auditor Fees and Services
The following table shows fees for the audit and other services provided by
EKS&HDeloitte & Touche LLP for
20162021 and
2015. | | 2017 | | 2016 | |
Audit Fees(1) | | $ | 711,988 | | $ | 606,663 | |
Audit-Related Fees(2) | | $ | 29,000 | | $ | 40,000 | |
Tax Fees(3) | | $ | 15,400 | | $ | 161,621 | |
| | | | | |
Total | | $ | 756,388 | | $ | 808,283 | |
| | Audit Fees(1) | | | $1,265,925 | | | $1,011,836 | |
| | Audit-Related Fees(2) | | | $25,000 | | | $— | |
| | Tax Fees(3) | | | $40,085 | | | $81,000 | |
| | | | | | | | | |
| | Other | | | $— | | | $— | |
| | Total | | | $1,331,010 | | | $1,092,836 | |
(1)
| Audit fees includes amounts related to professional services provided in connection with the audits of the Company’s annual financial statements, including the audit of the Company’s internal control over financial reporting, reviews of the Company’s quarterly financial statements and audit services provided in connection with other regulatory filings. |
(2)
| Audit-related fees consist of fees related to the filing of a registration statement on Form S-3. |
(3)
| Tax fees consists of fees for tax consulting services. |
(1) Audit fees includes amounts related to professional services provided in connection with the audits of the Company’s annual financial statements, including the audit of the Company’s internal control over financial reporting, reviews of the Company’s quarterly financial statements and audit services provided in connection with other regulatory filings. Also included are fees incurred by component auditors in foreign countries for audit services that were directed by EKS&H.
(2) Audit-related fees are for benefit plan audits.
(3) Tax fees consists of fees for tax compliance and tax consulting including services.
The Audit Committee has considered whether provision of the non-audit related services described above is compatible with maintaining the independent accountants’ independence and has determined that those services have not adversely affected EKS&H’sDeloitte & Touche LLP’s independence.
Allied Motion Technologies Inc. | 2022 Proxy Statement | | 35 |
TABLE OF CONTENTS
Our management does not know of any other matters to come before the
20182022 Annual Meeting. However, if any other matters come before the Annual Meeting, it is the intention of the persons designated as proxies to vote in accordance with their judgment on such matters.
SHAREHOLDER PROPOSALS
FOR THE 20192023 ANNUAL MEETING
Proposals for the Company’s Proxy Material
Any Company shareholder who wishes to submit a proposal to be included in the Proxy Material for the Company’s
20192023 Annual Meeting of Shareholders must submit such proposal to the Company at its office at 495 Commerce Drive, Suite 3, Amherst, New York 14228, Attention: Secretary, no later than December
3, 2018,7, 2022, in order to be considered for inclusion, if appropriate, in the Company’s proxy statement and form of proxy relating to its
20192023 Annual Meeting of Shareholders.
Proposals to be Introduced at the Annual Meeting but not Intended to be Included in the Company’s Proxy Material
For any shareholder proposal to be presented in connection with the
20192023 Annual Meeting of Shareholders, including any proposal relating to the nomination of a director to be elected to the Board of Directors of the Company, a shareholder must give timely written notice thereof in writing to the Secretary of the Company in compliance with the advance notice and eligibility requirements contained in the Company’s Bylaws. To be timely, a shareholder’s notice must be delivered to the Secretary at the principal executive offices of the Company not less than 60 days and not more than 90 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event the date of the annual meeting has been changed by more than 30 days from the date contemplated at the time of the previous year’s proxy statement, notice by the shareholder to be timely must be so received at a reasonable time before the solicitation is made. The notice must contain specified information about each nominee or the proposed business and the shareholder making the nomination or proposal.
Based upon a meeting date of May
2, 20184, 2022 for the
20182022 Annual Meeting of Shareholders, a qualified shareholder intending to introduce a proposal or nominate a director at the
20192023 Annual Meeting of Shareholders should give written notice to the Company’s Secretary not later than March
2, 20195, 2023 and not earlier than
January 31, 2019.February 3, 2023.
The specific requirements of these advance notice and eligibility provisions are set forth in Article II of the Company’s Bylaws, a copy of which is available upon request.
Such requests and any shareholder proposals should be sent to the Secretary of the Company at Allied Motion Technologies Inc., 495 Commerce Drive, Suite 3, Amherst, New York 14228.
Compliance with Universal Proxy Rules for Director Nominations In addition to satisfying the requirements under the Company’s Bylaws, if a shareholder intends to comply with the universal proxy rules (once effective) and to solicit proxies in support of director nominees other than the Company’s nominees, the shareholder must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act, which notice must be postmarked or transmitted electronically to the Secretary of the Company at Allied Motion Technologies Inc., 495 Commerce Drive, Suite 3, Amherst, New York 14228 no later than 60 calendar days prior to the one-year anniversary date of the annual meeting (for the 2023 annual meeting, no later than March 5, 2023). If the date of the 2023 annual meeting is changed by more than 30 calendar days from such anniversary date, however, then the shareholder must provide notice by the later of 60 calendar days prior to the date of the 2023 annual meeting and the 10th calendar day following the date on which public announcement of the date of the 2023 annual meeting is first made.
| | | BY ORDER OF THE BOARD OF DIRECTORS |
| 
| | |
| | | |
| | | JOSEPH P. KUBAREK
Secretary |
March 29, 2018
April 6, 2022
36 | | Allied Motion Technologies Inc. | 2022 Proxy Statement |
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ALLIED MOTION TECHNOLOGIES INC.
495 Commerce Drive, Suite 3
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard S. Warzala and Richard D. Federico, or either of them, proxies for the undersigned, each with the power of substitution, and hereby authorizes them to vote, as designated below, all the shares of common stock, no par value, which the undersigned would be entitled to vote at the annual meeting of shareholders of Allied Motion Technologies Inc. (the “Company”) to be held on May
2, 2018,4, 2022, and at all adjournments thereof, and directs that the shares represented by this proxy should be voted as indicated on the reverse:
(Continued and to be signed on the reverse side.)
Allied Motion Technologies Inc. | 2022 Proxy Statement | | A-1 |
Table of ContentsTABLE OF CONTENTS
ANNUAL MEETING OF SHAREHOLDERS OF
ALLIED MOTION TECHNOLOGIES INC.
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting, proxy statement and proxy card are available at
| Item 1. | | | TO ELECT SEVEN DIRECTORS TO HOLD OFFICE UNTIL THE NEXT ANNUAL MEETING OF SHAREHOLDERS. |
| | | | | NOMINEE: |
| | NOMINEE:
| | | R.B. Engel | | | ☐ FOR | | | ☐ AGAINST | | | ☐ ABSTAIN | | | |
| | | | | R.D. Federico | o FOR
| o AGAINST
| o☐ FOR
| | | ☐ AGAINST | | | ☐ ABSTAIN | | | |
| | G.J. Laber
| o FOR
| o AGAINST
| S.C. Finch | | | o☐ FOR
| | | ☐ AGAINST | | | ☐ ABSTAIN | | | |
| | R.D. Smith
| o FOR
| o AGAINST
| J.J. Tanous | | | o☐ FOR
| | | ☐ AGAINST | | | ☐ ABSTAIN | | | |
| | J.J. Tanous
| o FOR
| o AGAINST
| N.R. Tzetzo | | | o☐ FOR
| | | ☐ AGAINST | | | ☐ ABSTAIN | | | |
| | T.T. Tevens
| o FOR
| o AGAINST
| R.S. Warzala | | | o☐ FOR
| | | ☐ AGAINST | | | ☐ ABSTAIN | | | |
| | R.S. Warzala
| o FOR
| o AGAINST
| M.R. Winter | | | o☐ FOR
| | | ☐ AGAINST | | | ☐ ABSTAIN | | | |
| | M.R. Winter
| o FOR
| o AGAINST
| o ABSTAIN
| | | | | | | | | | | | |
| Item 2. | | | ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.OFFICERS. |
| | | o FOR
| o AGAINST
| | | | o☐ FOR
| | | ☐ AGAINST | | | ☐ ABSTAIN | | | |
| | | | | | | | | | | | | | | | | |
| Item 3. | | | RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S INDEPENDENT PUBLIC ACCOUNTING FIRM FOR 20182022 |
| | | o FOR
| o AGAINST
| | | | o☐ FOR
| | | ☐ AGAINST | | | ☐ ABSTAIN | | | |
This proxy is being solicited on behalf of the Board of Directors of the Company, and may be revoked prior to its exercise. This proxy, when properly executed, will be voted as directed above by the undersigned shareholder. If no direction is made, it will be voted FOR the nominees named in
Itemproposal 1 and FOR proposals 2 and 3. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting.
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
| | | | | |
| Signature (PLEASE SIGN WITHIN BOX) | Date:
| | Date: | | | Signature (Joint Owners) | Date:
|
| | | | | Date: |
A-2 | | Allied Motion Technologies Inc. | 2022 Proxy Statement |
