Exchange Act of 1934
(Amendment No. )
☒
☐
1110 Maple Street, P.O. Box 300 – Elma, New York 14059-0300 716-655-5990 Fax 716-655-6012
Dr. Nicholas D. Trbovich
Founder, Chairman of the Board of Directorsand Chief Executive Officer
April 28, 2016
Dear Fellow Shareholder:
The Annual Meeting of Shareholders will take place on Friday, June 10, 2016 at 2:00 p.m. at the offices of Bond, Schoeneck & King, PLLC., Avant Building - Suite 900, 200 Delaware Avenue, Buffalo, NY 14202. You
The enclosed Notice of Annual Meeting and Proxy Statement describe the matters to be acted upon during the meeting. To ensure your representation at the meeting, even if you are unable to attend, please sign the enclosed Proxy Card and return it in the postage paid envelope.
If you have any questions in regard to completing your proxy, please call our Corporate Secretary, Bernadine E. Kucinski (716) 655-5990.
Your continued interest and support is very much appreciated.
SERVOTRONICS, INC.
1110 Maple Street
P.O. Box 300
Elma, New York 14059
NOTICE OF
2016 ANNUAL SHAREHOLDERS’ MEETING
To the Shareholders:
Notice is hereby given that the 2016 Annual Meeting of the Shareholders of Servotronics, Inc. (the “Company”) will be held at the offices ofBond, Schoeneck & King, PLLC.,Avant Building - Suite 900, 200 Delaware Avenue, Buffalo, NY 14202, on Friday, June 10, 2016 at 2:00 p.m., Buffalo time, for the following purposes:
Only shareholders of record at the close of business on April 11, 2016 are entitled to notice of and to vote at the meeting or any adjournments thereof.
Important notice regarding the availability of Proxy materials for the Annual Meeting of Shareholders to be held on June 10, 2016.
This Proxy statement, form of proxy and the Company’s 2015 Annual Report are available at www.servotronics.com.
April 28, 2016
SERVOTRONICS, INC.1110 Maple StreetP.O. Box 300Elma, New York 14059PROXY STATEMENTFOR
ANNUAL MEETING OF SHAREHOLDERSTO BE HELD June 10, 2016
The following information is furnished in connection with the2024 Annual Meeting of Shareholders of Servotronics, Inc. (the “Company”) to be held virtually on JuneFriday, May 10, 20162024 at 2:9:00 p.m., Buffalo time,a.m. Eastern Time. You will be able to attend and participate in the Annual Meeting online, vote your shares electronically and submit your questions during the meeting by visiting: https://meetnow.global/M6JWU4H on the meeting date and at the officestime described in the accompanying Proxy Statement. There is no physical location for the Annual Meeting.
IfMeeting as well as the Company’s Proxy Statement.
A copy of the Company’s Annual Report to Shareholders for the fiscal year ended December 31, 2015 accompanies this Proxy Statement. Additional copies of the Annual Report, Notice, Proxy Statement and form of proxy may be obtained without charge from the Company’s Corporate Secretary, 1110 Maple Street, P.O. Box 300, Elma, New York 14059. This Proxy Statement and proxy card are first being mailedenclosed with those materials in the postage-paid envelope provided to shareholders on or about April 28, 2016.
SOLICITATION AND REVOCABILITYyou.
VOTING INFORMATION
The record date for determining shares entitled to vote has been fixed at the close of business on April 5, 2024.
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In order to conductper share of Servotronics common stock on each matter presented for a shareholder vote at the Annual Meeting,Meeting. Shareholders do not have cumulative voting rights. As of the presence, in person or by properly executed proxy,close of business on the record date, there were 2,548,673 shares of Servotronics common stock outstanding.
Shares of Common Stock represented by a properly signed, dated and returned proxy will be treated as present at the meeting for the purposes of determining a quorum. Proxies relating to “street name” shares of Common Stock that are voted by brokers will be counted as shares of Common Stock (i) present for purposes of determining the presence of a quorum and (ii) as having voted in accordance with their best judgment.
PROPOSAL 1: ELECTIONComputershare or Servotronics’ Corporate Secretary will act as Inspector of Election.
Each nominee is currently servingservice as a Director ofdirector, business experience, other director positions currently held or held at any time during the Company. The Directors believe that all ofpast five years, involvement in certain legal or administrative proceeding, if applicable, and the nominees are willing and able to serve as Directors of the Company. If any nominee at the time of election is unable or unwilling to serve or is otherwise unavailable for election, the enclosed proxy will be voted in accordance with the best judgment of the person or persons voting the proxy.
The following paragraphs set forth certain information regarding the nominees for election to the Company’s Board of Directors, including the specific experience,experiences, qualifications, attributes or skills that ledcaused our Nominating and Corporate Governance Committee to the conclusion by the Board of Directorsconclude that suchthe person should serve as a Directormember of our Board of Directors.
Edward C.89 — Mr. Cosgrove Esq. has served as Director since 2012. Mr. Cosgrove2012 and is a prominent long-term member of the Western New York jurisprudence community.Compensation Committee and Nominating and Corporate Governance Committee. He is an attorney with the Cosgrove Law Firm, a Buffalo-based firm where his practice includes civil litigation, representation of corporations, businesses, physicians and medical facilities. He earned a Bachelor of Arts Degree from the University of Notre Dame in 1956 and a Doctor of Laws Degree from Georgetown University Law School in 1959. His wide range of experienceSchool. He is a U.S. Army Veteran and has included yearsserved as a Special Agent of the Federal Bureau of Investigation (1960 – 1962), Attorney at Law (1963 – 1973) and as District Attorney of Erie County, NY (1974 – 1981). From 1982NY. Mr. Cosgrove enjoys the highest possible Peer Review Rating a lawyer can receive from Martindale-Hubbell for the years 1980 through 2024 and has been considered annually as one of the top lawyers in Western New York. His broad-based experience is most important to the presentBoard of Directors.
Lucion P. Gygax, an author, entrepreneur and Major in the Army National Guard,Company Director.
Donald W. Hedges, Esq. has served as a Director since 1967 andMarks is a member of the Company’s Independent Directors Committeefinancial planning firm Jensen, Marks, Langer & Vance, LLC, where he provides financial planning advice and the Company’s Audit Committee.
Mr. Hedges, a business law attorney, has extensive Corporate Law and finance experience with national and international, private and public companies. His comprehensive experience includes the representation of companies in the preparation of Initial Public Offerings, and at times, as a principal in a broad range of economic and financing activities. A current active practitioner of business law,investment management services. Also, he is a retired Partnermember and the Chief Compliance Officer of Wolf, Block, ShorrSterling Investment Counsel, LLC, a registered investment advisor. He brings over 25 years of financial planning and Solis-Cohen. His expertise includesanalysis experience to the Company as well as a wide range ofbackground in accounting, corporate financing for technology driven activitieslaw and otherwise.governance. He was awarded an honorary Doctorate Degree from Webber College and earnedholds a Bachelor of Science Degree in EconomicsAccountancy from the Wharton SchoolVillanova University, a Master of theBusiness Administration from St. Bonaventure University, of Pennsylvania and a law degree from the University of Pennsylvania. He is a former aircraft carrier combat fighter pilot and was awarded the Air Medal and the Distinguished Flying Cross for heroic acts performed in the South Pacific. He is an aviation and aerospace cognizant individual whose comprehensive legal knowledge and business experience has been beneficial to the Company. Mr. Hedges’ long associationJuris Doctorate with the Company combined with his successful record as an attorney of national and international representation and negotiation highly qualifies him as a Company Director.
Rigel D. Pirrone, a Reserve Navy Commander and Commanding Officer of Strike Fighter Squadron 204, joined the Board of Directors in January 2015 and serves as Chairman of the Company’s Audit Committee and a member of the Company’s Independent Directors Committee. Mr. Pirrone has 17 years of leadership experience in the United States Navy, including two deployments aboard the aircraft carrier USS Abraham Lincoln where he served as a Landing Signal Officer and Forward Air Controller Airborne. His extensive experience includes assignments as a squadron Division Officer, Department Head, Executive Officer, instructor pilot, and member of the F/A-18 Hornet Tactical Demonstration Team. Throughout the course of his career, Mr. Pirrone has accumulated over 3,000 flight hours across six air platforms including the F/A-18A-D Hornet and the F/A-18E/F Super Hornet, and he has extensive experience in the quality, maintenance, and safety requirements associated with the motion control subsystems that incorporate the Company’s product line. As a Commanding Officer and former Executive Officer and Department Head in a Strike Fighter Squadron, Mr. Pirrone has years of experience with the direct leadership of organizations exceeding 250 employees, the administration of multimillion dollar budgets and budget auditing functions, and the oversight of over $1 billion in assets, including 17 assigned aircraft. A native of Western New York, Mr. Pirrone is a member of the National Association of Corporate Directors and he holds a Bachelor of Science in Civil Engineering from Tulane University’s School of Engineering where he participated in the Naval Reserve Officer Training Corps program. Mr. Pirrone’s leadership experience, achievements, and aviation expertise qualify him as a Company Director.
Kenneth D. Trbovich has been President of the Company and a Director since 2012. Mr. Trbovich is also President and CEO of the Company’s subsidiary, The Ontario Knife Company (OKC). Mr. Trbovich initially joined the Company in 1993 and held positions of increasing responsibilities that led to his current roles. He is listed as co-inventor on multiple patents or patents-pending owned by the Company and has extensive project management and business development experience, coordinating Company business in the United States, Taiwan, Singapore, Australia, Germany, England, and other locations around the world. In addition to his positions within the Company, Mr. Trbovich represents OKC on the Board of Regents of the American Knife and Tool Institute, serves on the Board of Trustees for Medaille College, and is a trustee for a private charitable foundation. Mr. Trbovich is a member of the National Association of Corporate Directors and he also maintains Company relationships with industry associations including the Buffalo Niagara Partnership, the National Association of Manufacturers, and the Aerospace Industry Association. He holds undergraduate degrees from Medaille College and Skidmore College in addition to certificateshonors from the State University of New York at Buffalo’sBuffalo School of ManagementLaw. He previously practiced commercial and the University of Rochester’s Simon School of Business. Mr. Trbovich’s achievements, executivecorporate law at Phillips Lytle, LLP in Buffalo, NY and began his career with Price Waterhouse in New York City. His business, accounting and legal experience established industry associations, and long tenure with the Companymake him highly qualifies himqualified to serve as a Company Director.
Dr. Nicholas D. Trbovich has served
The Directors recommend a vote FOR the six nominees listed above. Unless instructed otherwise, proxies will be voted FOR these nominees.
CORPORATE GOVERNANCE AND BOARD MATTERS
Independent Directors
Under the NYSE MKT listing standards,American, at least 50%fifty percent of our Directors, and, except in limited circumstances, all of the Company’s directorsmembers of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, must meet the test of “independence” as defined by the NYSE MKT.American. The NYSE MKTAmerican standards provide that to qualify as an “independent” director, in addition to satisfying certain bright-line criteria, the Board of Directors must affirmatively determine that a director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board of Directors has determined that each director nominee, other than Mr. Farrell, satisfies the bright-line criteria and that no other director or nominee has a relationship with the Company that would interfere with such person’s ability to exercise independent judgment as a member of our Board.
Board considered the fact that the Company incurred legal fees and disbursements of approximately $8,400 for services provided by the Cosgrove Law Firm in 2023.
on the agenda for that meeting. In addition, our Board 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 in order to promote discussion among the independent directors and assure independent oversight of management. Moreover, our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, all of which are comprised entirely of independent Directors, also perform oversight functions independent of management.
Pursuant to Board resolutions,select, the director nominees for the next annual meeting of shareholders.
During the fiscal year ended December 31, 2015, the Audit Committee met 6 times, the Independent Directors Committee met 7 times and2023, the Board of Directors held 18 meetings. The Audit Committee met 7seven times, the Compensation Committee met three times and the Nominating and Corporate Governance Committee met five times. No Director attended less than 100%95% of the meetings held during the period that each individual served as a Director. Each Director is encouraged to attend the Annual Meeting of Shareholders. In 2015,2023, the Annual Meeting of Shareholders was attended by four of the five Directors then in office.
Code of Ethics
The Company has adopted a Code of Ethics and Business Conduct that applies to all Directors Officers and employees of the Company as required by the listing standards of the NYSE MKT. The Code is available on the Company’s websitestanding for reelection at www.servotronics.com and the Company intends to disclose on this website any amendment to the Code. Waivers under the Code, if any, will be disclosed under the rules of the SEC and the NYSE MKT.
The Company also has a Whistleblower Policy, which is incorporated into the Code of Ethics and Business Conduct that requires Directors, executive officers and employees to comply with appropriate accounting and internal controls and establishes procedures to report any perceived wrongdoing, questionable accounting or auditing matters in a confidential and anonymous manner.
Report of the Audit Committee of the Board of Directors
The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing by the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 except to the extent the Company specifically incorporates this Report by reference therein.
The Audit Committee serves as the representative of the Board of Directors for general oversight of the Company’s financial accounting and reporting, systems of internal control, audit process and monitoring compliance with standards of business conduct. The Audit Committee operates under a written charter which is available on the Company’s website at www.servotronics.com. Management of the Company has primary responsibility for preparing financial statements of the Company as well as the Company’s financial reporting process. Freed Maxick CPAs, P.C. (“Freed Maxick”), acting as Independent Auditors, is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with U.S. generally accepted accounting principles.
In this context, the Audit Committee hereby reports as follows:
Each member of the Audit Committee is independent as defined under the listing standards of the NYSE MKT.
Leadership Structure
Dr. Nicholas D. Trbovich is the Company’s Chairman of the Board and Chief Executive Officer. The Company believes that having one person hold the roles of Chairman of the Board and Chief Executive Officer is the most effective way at this time to organize the leadership structure of the Board of Directors. Having one person hold the roles of Chairman of the Board and Chief Executive Officer promotes unified leadership and direction for the Board and executive management and it allows for a single and clear focus for the chain of command to execute the Company’s strategic initiatives and business plans. Because Dr. Trbovich is primarily responsible for managing the Company’s day-to-day operations and strategic plan implementations, he is in the best position to chair meetings of the Board of Directors where key business and strategic issues are discussed.
Another component of our leadership structure is the active role played by our non- management and independent Directors in overseeing the Company’s business, both at the Board and Committee level. The Board believes that the combined role of Chairman of the Board and Chief Executive Officer coupled with the existence of the independent Directors is the appropriate leadership structure for the Board of Directors at this time. This structure provides sufficient independent oversight while avoiding unnecessary confusion regarding the Board’s oversight responsibilities and the day-to-day management of the Company’s business operations and strategic plan implementations. The Independent Directors Committee periodically reviews this structure to assess its effectiveness on a continuing basis.
Board Oversight of Risk Management
Director
Procedures
Directors’
in 2023
the date of the grant. These restricted shares will vest quarterly over the 12-month service period.
Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($)(1) | | | Total ($) | | |||||||||
Brend D. Baird | | | | $ | 60,000 | | | | | $ | 25,000 | | | | | $ | 85,000 | | |
Edward C. Cosgrove | | | | $ | 60,000 | | | | | $ | 25,000 | | | | | $ | 85,000 | | |
Karen L. Howard | | | | $ | 60,000 | | | | | $ | 25,000 | | | | | $ | 85,000 | | |
Christopher M. Marks | | | | $ | 60,000 | | | | | $ | 25,000 | | | | | $ | 85,000 | | |
Even H. Wax | | | | $ | 60,000 | | | | | $ | 25,000 | | | | | $ | 85,000 | | |
Fees Earned or | ||||
Name | Paid in Cash | |||
Edward C. Cosgrove | $ | 45,334 | ||
Lucion P. Gygax | $ | 37,334 | ||
Donald W. Hedges | $ | 46,344 | ||
Rigel D. Pirrone | $ | 57,584 |
Shareholder Communications withThis 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
Shareholders who wish and the Compensation Committee expect to contactconsider the Boardoutcome of Directors or anythe vote, along with other relevant factors, when considering future compensation programs.
EXECUTIVE OFFICERS
The following is a listingSecurities and Exchange Commission, the Audit Committee has the direct responsibility to appoint, retain, fix the compensation and oversee the work of the Company’s currentindependent 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.
| What We Do: | ||||||
| | | We pay for performance. 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. | | |||
| We balance short-term and | | |||||
| We limit the maximum payout opportunity. We establish maximum amounts that may be earned under any award of | | |||||
| | | We maintain robust stock ownership guidelines. Our executive officers and directors are subject to robust stock ownership guidelines. | | |||
| | ||||||
| | | We have an independent compensation committee. The Committee is comprised solely of independent directors. | |
| What We Don’t Do: | | |||
| No employment agreements, automatic salary increases or guaranteed bonuses: We do not have employment agreements with any of our executive officers, and | | |||
| | | We do not allow hedging or pledging. We have adopted a policy pursuant to which our executive officers and directors are expressly prohibited from pledging and hedging Company securities. | | |
| We do not provide excessive perquisites: Our executive officers are provided with limited perquisites and benefits. | | |||
| | | We do not have tax gross-ups and do not have “single-trigger” provisions: We do not provide tax gross-ups on any severance, change in control or other payments. Change in control agreements require a “double-trigger”. | | |
| We do not provide pension arrangements or non-qualified deferred compensation arrangements: We do not provide a defined benefit pension program, supplemental executive retirement plan or other non-qualified deferred compensation program for any employees. | |
Kenneth D. Trbovich, Director and Executive Officer, is
EXECUTIVE COMPENSATION
The Summary Compensation Table quantifies the amount or valueshareholders on June 9, 2023, 78.7% of the different formsshares voted were voted in support of the compensation earnedof our Named Executive Officers, as discussed and disclosed in the 2023 proxy statement. The Committee continues to review the Company’s compensation strategy to ensure that it provides appropriate compensation to our executive officers and to further align the interests of management and shareholders.
those of our shareholders. The Compensation Process Overview
The Independent Directors Committee functions as the compensation committeeanticipates that a larger portion of the Board and determinesChief Executive Officer’s total compensation will be linked to at-risk pay as compared to the compensationother executive officers, in recognition of the Chief Executive Officer’s overall responsibility for the Company’s Executive Officers in accordance withcorporate performance.
2015
| Target Compensation Mix: Chief Executive Officer | | | Target Compensation Mix: Other Named Officers | |
| | | |
| | | | | | | | | 2023 Target Annual Cash Incentive | | |||||||||
Title | | | Base Salary ( $) | | | Percentage of Base Salary (%) | | | ($) | | |||||||||
Chief Executive Officer | | | | | 350,000 | | | | | | 40 | | | | | | 140,000 | | |
Chief Financial Officer(1) | | | | | 265,000 | | | | | | 30 | | | | | | 79,500 | | |
Chief Technical Officer | | | | | 235,000 | | | | | | 20 | | | | | | 47,000 | | |
2015 Bonus
Table in the Company’s proxy statement as “non-equity incentive plan compensation.”
| | | Target for the 2023-2025 LTIP Awards | | |||||||||||||||
Title | | | Percentage of Base Salary (%) | | | Performance-Based Shares | | | Service-Based Shares | | | Total Target LTIP Award | | ||||||
Chief Executive Officer | | | | | 40 | | | | $105,000 (9,131 Performance Shares) | | | $35,000 (3,043 shares of Restricted Stock) | | | | $ | 140,000 | | |
Chief Financial Officer | | | | | 30 | | | | $59,625 (5,185 Performance Shares) | | | $19,875 (1,728 shares of Restricted Stock) | | | | $ | 79,500 | | |
Chief Technical Officer | | | | | 20 | | | | $35,250 (3,065 Performance Shares) | | | $11,750 (1,022 shares of Restricted Stock) | | | | $ | 47,000 | | |
Name and Principal Position | | | Year | | | Salary | | | Stock Awards(1) | | | Nonequity Incentive Plan Compensation | | | All Other Compensation(2) | | | Total | | ||||||||||||||||||
William F. Farrell, Jr. Chief Executive Officer | | | | | 2023 | | | | | $ | 350,000 | | | | | $ | 35,000 | | | | | $ | 50,000 | | | | | $ | 35,074 | | | | | $ | 470,074 | | |
| | | 2022 | | | | | $ | 235,577 | | | | | $ | 235,012 | | | | | | 96,274 | | | | | $ | 23,480 | | | | | $ | 590,343 | | | ||
Robert A. Fraass Chief Financial Officer | | | | | 2023 | | | | | $ | 173,269 | | | | | $ | 39,875 | | | | | $ | 50,000 | | | | | $ | 9,288 | | | | | $ | 272,432 | | |
James C. Takacs Chief Technical Officer | | | | | 2023 | | | | | $ | 235,053 | | | | | $ | 11,750 | | | | | $ | 20,000 | | | | | $ | 22,936 | | | | | $ | 289,739 | | |
| | | 2022 | | | | | $ | 229,887 | | | | | | — | | | | | | — | | | | | $ | 76,151 | | | | | $ | 306,038 | | | ||
Lisa F. Bencel Former Chief Financial Officer | | | | | 2023 | | | | | $ | 127,268 | | | | | | — | | | | | | — | | | | | $ | 176,913 | | | | | $ | 304,181 | | |
| | | 2022 | | | | | $ | 251,258 | | | | | | — | | | | | | — | | | | | $ | 59,850 | | | | | $ | 311,108 | | |
Equity Awards
Pursuant to the 2012 Long-Term Incentive Plan, as approved by the Company’s shareholders, the Independent Directors Committee may grant equity awards, the vesting of which may be based on the passageclosing price of time, achievement ofthe Company’s common stock as reported
Summary Compensation Table
The following table contains information with respect to the annual compensation for the years ended December 31, 2015 and 2014 for the Named Officers.
All Other | ||||||||||||||||||||
Name and Principle Position | Year | Salary | Bonus | Compensa- tion (1) | Total | |||||||||||||||
Dr. Nicholas D. Trbovich | 2015 | $ | 574,058 | $ | 108,000 | $ | 119,251 | $ | 801,309 | |||||||||||
Chairman and CEO | 2014 | $ | 578,300 | $ | 40,000 | $ | 105,171 | $ | 723,471 | |||||||||||
Kenneth D. Trbovich | 2015 | $ | 351,476 | $ | 85,000 | $ | 31,335 | $ | 467,811 | |||||||||||
President | 2014 | $ | 294,484 | $ | 33,500 | $ | 16,388 | $ | 344,372 | |||||||||||
Cari L. Jaroslawsky | 2015 | $ | 224,788 | $ | 59,500 | $ | 36,635 | $ | 320,923 | |||||||||||
CFO and Treasurer | 2014 | $ | 208,077 | $ | 23,500 | $ | 32,554 | $ | 264,131 |
such conditions.
Employment Agreements
Dr. Trbovich and Mr. Trbovich have employment agreements with the Company pursuant to which they are entitled to receive minimum salary compensation as set forth in the respective agreement, or such greater amount as the Company’s Board of Directors may approve/ratify. On February 26, 2016 the Board of Directors approved base salaries for Dr. Trbovich and Mr. Trbovich of $613,880 and $385,000, respectively, per annum. In the event of death or total disability during the term of the employment agreement, he or his estate is entitled to receive 50% of the compensation he is receiving from the Company at the time of his death or disability during the remainder of the term of the employment agreement. Also, in the event of (i) a breach of the agreement by the Company, (ii) a change in control of the Company, as defined, or (iii) a change in the responsibilities, positions or geographic office location, he is entitled to terminate the agreement and receive a payment of 2.99 times their average annual compensation from the Company for the preceding five years. If this provision is invoked and the Company makes the required payment, the Company will be relieved of any further salary liability under the agreement notwithstanding the number of years covered by the agreement prior to termination. The term of the agreement extends to and includes December 31, 2017 for Dr. Trbovich, and December 31, 2019 for Kenneth Trbovich provided however, the term of the agreement will be automatically extended for one additional year beyond its then expiration date unless either party has notified the other in writing that the term will not be extended. If the Company elects not to extend the agreement, he will be entitled to a severance payment equal to nine months’ salary and benefits.
The Company provides certain individual and spousal post-retirement health and life insurance benefits for Dr. Trbovich and Kenneth Trbovich. Upon retirement and after attaining at least the age of 65, the Company will pay for the retired executives and dependents health benefits and will continue the Company-provided life insurance offered at the time of retirement. The retiree’s health insurance benefits ceases upon the death of the retired executive. The actuarially calculated future obligation of the benefits at December 31, 2015 and 2014 for both Dr. Trbovich and Kenneth Trbovich is $260,114 and $202,302 respectively.
Outstanding Equity Awards at 2015 Fiscal Year End
Stock Awards | ||||||||
Market value of shares or | ||||||||
Number of shares or | units of stock that have | |||||||
units that have | not vested | |||||||
Named Officer | not vested (#) | ($)(1) | ||||||
Dr. Nicholas D. Trbovich | 30,000 | (2) | $ | 250,500 | ||||
Kenneth D. Trbovich | 30,000 | (3) | $ | 250,500 | ||||
Cari L. Jaroslawsky | 9,000 | (4) | $ | 75,150 |
(1) Value is based on the closing price of the Company’s common stock of $12.50 on December 31, 2023, as reported on the NYSE American. (2) Represents the threshold number of performance shares awarded under the Company’s Long-Term Incentive Plan for the 2023-2025 performance period. (3) Of these shares, 5,864 shares vest in 2024, 5,862 shares vest in 2025; and 1,014 shares vest in 2026, in each case subject to continued employment. (4) Of these shares, 2,335 shares vest in 2024, 576 shares vest in 2025; and 576 shares vest in 2026, in each case subject to continued employment. (5) Of these shares, 341 shares vest in 2024, 341 shares vest in 2025; and 340 shares vest in 2026, in each case subject to continued employment. Pay Versus Performance Disclosure As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and our financial performance for each of the last two completed fiscal years. In determining the “compensation actually paid” to our named executive officers (our “NEOs”), we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table in each such previous year, as the valuation methods for this disclosure under Item 402(v) differ from those required in reporting the compensation information in the Summary Compensation Table. For our NEOs other than our principal executive officer (our “PEO”), compensation is reported as an average. 18
(1) The dollar amounts reported represent the total compensation for each PEO and the average total compensation for the other Named Executive Officers, in each case as reported in the Summary Compensation Table for the applicable year. (2) Our PEOs for each year are as follows: 2023: William F. Farrell, Jr. 2022: William F. Farrell, Jr. (April 25 to December 31) and James C. Takacs (January 1 to April 24) 2021: James C. Takacs (June 9 to December 31) and |
Certain Relationships and Related Transactions
Kenneth D. Trbovich Director(January 1 to June 8).
| | | PEO | | | Average Other Named Executive Officers | | ||||||
Total Reported in 2023 Summary Compensation Table (“SCT”) | | | | $ | 470,074 | | | | | $ | 288,784 | | |
Less, Value of Stock Awards Reported in SCT | | | | | 35,000 | | | | | | 17,208 | | |
Plus, Year-End Value of Awards Granted in Fiscal Year that are Outstanding and Unvested | | | | | 38,043 | | | | | | 18,787 | | |
Plus (or Minus), Change in Fair Value of Prior Year Awards that are Outstanding and Unvested | | | | | 18,812 | | | | | | — | | |
Plus, Vesting Date Fair Value of Awards Granted this Year and that Vested this Year | | | | | — | | | | | | — | | |
Plus (or Minus), Change in Fair Value (from Prior Year-End) of Prior Year Awards that Vested this Year | | | | | 9,407 | | | | | | | | |
Minus, Prior Year-End Fair Value of Prior Year Awards that Failed to Vest this Year | | | | | — | | | | | | — | | |
Total Adjustments | | | | | 31,262 | | | | | | 1,579 | | |
Compensation Actually Paid for Fiscal Year 2023 | | | | $ | 501,336 | | | | | $ | 290,363 | | |
ProposedTakacs to account for the additional responsibilities they assumed that year.
The following table lists
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class (1) | ||||||
Servotronics, Inc. Employee Stock Ownership Trust (2) | 578,232 | (2) | 23.41 | % | ||||
1110 Maple Street P.O. Box 300 Elma, New York 14059 | ||||||||
Dr. Nicholas D. Trbovich (3) 1110 Maple Street P.O. Box 300 Elma, New York 14059 | 511,665 | (3) | 20.71 | % | ||||
Harvey Houtkin (4) 160 Summit Avenue | 352,088 | (4) | 14.25 | % | ||||
Montvale, New Jersey 07645 | ||||||||
FMR LLC (5) 245 Summer Street Boston, Massachusetts 02210 | 163,256 | (5) | 6.61 | % |
Name and Address of Beneficial Owner | | Amount of Common Stock Beneficially Owned | | | Percent of Common Stock | |
Servotronics, Inc. Employee Stock Ownership Trust 1110 Maple Street Elma, NY 14059 | | | | | 319,692(2) | | | | | | 12.5% | | | ||
Estate of Dr. Nicholas D. Trbovich Kenneth D. Trbovich Michael D. Trbovich 960 Porterville Road East Aurora, NY 14052 | | | | | 551,159(3) | | | | | | 21.6% | | | ||
Beaver Hollow Wellness, LLC 401 East Amherst Street Buffalo, NY 14215 | | | | | 461,907(4) | | | | | | 18.1% | | | ||
Brent D. Baird 25 Melbourne Place Buffalo, NY 14222 | | | | | 276,468(5) | | | | | | 10.8% | | | ||
Wax Asset Management, LLC Evan H. Wax 44 Cherry Lane Madison, CT 06443 | | | | | 183,858(6) | | | | | | 7.2% | | | ||
Star Equity Fund, L.P. 53 Forest Avenue, Suite 101 Old Greenwich, CT 06870 | | | | | 135,000(7) | | | | | | 5.3% | | |
— Dr. Nicholas D. Trbovich and Kenneth D. Trbovich —
and Directors
Name of Beneficial Owner | | | Amount of Common Stock Beneficially Owned | | | Percent of Common Stock(1) | | ||||||
Brent D. Baird | | | | | 276,468 | | | | | | 10.8% | | |
Edward C. Cosgrove, Esq. | | | | | 13,504 | | | | | | * | | |
William F. Farrell, Jr. | | | | | 23,937(2) | | | | | | * | | |
Robert A. Fraass | | | | | 5,061 | | | | | | * | | |
Karen L. Howard | | | | | 4,469 | | | | | | * | | |
Harrison W. Kelly III | | | | | 3,691 | | | | | | * | | |
Christopher M. Marks | | | | | 13,504 | | | | | | * | | |
James C. Takacs | | | | | 40,898(3) | | | | | | 1.6% | | |
Evan H. Wax | | | | | 183,858(4) | | | | | | 7.2% | | |
Servotronics, Inc. Employee Stock Ownership Trust | | | | | 319,692(5) | | | | | | 12.5% | | |
All directors, nominees and executive officers as a group | | | | | 863,448 | | | | | | 33.9% | | |
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class (1) | ||||||
Dr. Nicholas D. Trbovich | 511,665 | (2) | 20.71 | % | ||||
Kenneth D. Trbovich | 63,614 | (3) | 2.58 | % | ||||
Cari L. Jaroslawsky | 21,745 | (4) | 0.88 | % | ||||
Edward C. Cosgrove, Esq. | - | - | ||||||
Lucion P. Gygax | - | - | ||||||
Donald W. Hedges, Esq. | 29,761 | 1.20 | % | |||||
Rigel D. Pirrone | - | - | ||||||
All Directors and Officers as a group | 837,665 | (5) | 33.91 | % |
21,283 shares credited to the ESOP account of Mr. Takacs, previously reported in this table.
Based solely on its review of reports filed pursuant to Reports
PROPOSAL 2:
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
process. Freed Maxick CPAs, P.C. (“Freed Maxick”), acting as Independent Auditors, is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with U.S. generally accepted accounting principles.
At the Annual Meeting, the shareholders will be asked to ratify the selection of Freed Maxick as the Company’s independent registered public accounting firm. Pursuant to the rules and regulations of the Securities and Exchange Commission,Commission.
The affirmative vote of a majority of the votes cast on the proposal, assuming a quorum is present at the Annual Meeting, is required to ratify the appointment of Freed Maxick. The Directors of the Company unanimously recommend a vote “FOR” the ratification of Freed Maxick as the Company’s independent registered public accounting firm for 2016. Unless otherwise instructed, proxies will be voted “FOR” ratification of the appointment of Freed Maxick.
Services
2015 | 2014 | |||||||
Audit Fees (1) | $ | 102,500 | $ | 109,500 | ||||
Tax Service Fees (2) | 51,300 | 40,150 | ||||||
Total | $ | 153,800 | $ | 149,650 |
| | | 2023 | | | 2022 | | ||||||
Audit Fees(1) | | | | $ | 256,800 | | | | | $ | 283,668 | | |
Tax Fees(2) | | | | | 49,460 | | | | | | 46,500 | | |
Total | | | | $ | 306,260 | | | | | $ | 330,168 | | |
PROPOSAL 3:
ADVISORY VOTE ON EXECUTIVE COMPENSATION
As required
Our executive compensation programs are designed to attract, motivate, and retain our Named Officers, who are critical to our success. Please read the Executive Compensation section of this proxy statement for additional details about our executive compensation programs, including information about the fiscal 2015 compensationnext year’s annual meeting of our Named Officers.
We are asking our Shareholders to indicate their support for our Named Officer compensation as described in this proxy statement. This proposal, commonly known as a “say- on-pay” proposal, gives our shareholders the opportunity to express their views on our Named Officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Officers and the philosophy, policies and practices described in this proxy statement. We recommend that shareholders vote, on an advisory basis, “FOR” the following resolution:
RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the Company’s Named Officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission.
The above resolution will be deemed to be approved if it receives the affirmative vote of a majority of the total votes cast on Proposal 3 at the Annual Meeting. Abstentions and broker non-votes are not considered to be votes cast and, accordingly, will have no effect on the outcome of the vote. As this vote is an advisory vote, the outcome is not binding on us with respect to future executive compensation decisions, including those relating to our Named Officers. Our Board of Directors and our Independent Directors Committee, however, value the opinions of our shareholders, and to the extent there is any significant vote against the Named Officer compensation as disclosed in this proxy statement, the Independent Directors Committee will consider our shareholders’ concerns and will evaluate whether any actions are necessary to address those concerns.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF PROPOSAL THREE.
SHAREHOLDER PROPOSALS FOR THE 2017 ANNUAL MEETING
Proposals for the Company’s Proxy Material
Shareholder proposals must be received atby the Company’s officesCompany no later than December 20, 2017, 12012, 2024, assuming the meeting is held within 30 days priorof the calendar date of the 2024 Annual Meeting. The proposal must comply fully with the requirements of Rule 14a-8.
Proposals to be introducedConsideration at the 2025 Annual Meeting, but not intended to be includedfor Inclusion in the Company’s Proxy Material
ForMaterials
OTHER MATTERS
So far as21, 2025.
our Corporate Secretary at Servotronics, Inc., 1110 Maple Street, P.O. Box 300, Elma, New York 14059
14059.
Meeting Attendance
Check this box to pre-register to attend the Annual Meeting.¨
(Continued and to be signed on the reverse side)
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Thethereof.The shares represented by this Proxy will be voted as directed by the shareholder. The Board of Directors favorsrecommends a vote FOR theall nominees named in Proposal 1 and FOR ProposalsFORProposals 2 and 3. If no direction is made, the Proxy will be voted with the Board’s recommendations. In their discretion, the Proxies are authorized to vote uponvoteupon such other business as may properly come before the Annual Meeting or any adjournment thereof.
Pleasethereof.Please date and sign your name exactly as it appears below and return this Proxy promptly in the enclosed envelope, which requires no postage if mailed in theinthe United States.