0000089140 false 2021 FY --12-31
0000089140 2021-01-01 2021-12-31 0000089140 2021-06-30 0000089140
2022-02-28 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K/A
(Amendment No. 1)
| |
|
|
x |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
or
| |
|
|
¨ |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For the fiscal year ended
December 31, 2021
Commission File No. 1-07109
SERVOTRONICS, INC.
(Exact name of registrant as specified in its charter)
|
Delaware |
|
16-0837866 |
|
(State
or other jurisdiction of |
|
(I.
R. S. Employer |
|
incorporation
or organization) |
|
Identification
No.) |
1110 Maple Street
Elma,
New
York 14059
(Address of principal executive offices) (zip code)
(716)
655-5990
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the
Act:
| |
|
|
|
Title
of each class |
Ticker
symbol(s) |
Name
of each exchange on which registered |
|
Common Stock |
SVT |
NYSE American |
Indicate
by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
Yes ¨ No x
Indicate
by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes ¨ No x
Indicate
by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes x No ¨
Indicate
by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the
registrant was required to submit such files).
Yes x No ¨
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer”,
“smaller reporting company” and “emerging growth company” in
Rule 12b-2 of the Securities Exchange Act.
|
Large
accelerated filer ¨ |
Accelerated
filer ¨ |
Non-accelerated filer x |
Smaller
reporting company x |
Emerging
growth company ¨ |
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the
Exchange Act. ¨
Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act) Yes ¨ No x
Indicate by check mark whether the registrant has filed a report on
and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit
report. ¨
Based on the closing price of the Common Stock on June 30,
2021 $8.65 (the last day of the registrant’s most recently
completed second fiscal quarter), the aggregate market value of the
voting stock held by non-affiliates of the registrant was
$14,176,355.
As of February 28, 2022, the number of $.20 par value common shares
outstanding was
2,491,667.
| Auditor
Firm:
FREED MAXICK CPAs, P.C. |
Auditor
Location:
Buffalo, New York |
Audit
Firm ID:
317 |
EXPLANATORY NOTE
This Amendment No. 1 (this
“Amendment”) amends the Annual Report on Form 10-K for the year
ended December 31, 2021, of Servotronics, Inc. (the “Company”) that
we filed with the Securities and Exchange Commission (the “SEC”) on
March 31, 2022 (the “Original Filing”). This Amendment is being
filed to amend and restate Items 10, 11, 12, 13, and 14 of Part III
of the Form 10-K in their entirety to provide the information we
indicated that we would incorporate by reference from our Proxy
Statement for the 2022 annual meeting of stockholders in reliance
on General Instruction G(3) to Form 10-K.
Pursuant to Rule 12b-15 under the
Securities Exchange Act of 1934, as amended, (the “Exchange Act”)
this Amendment also contains new certifications by the principal
executive officer and the principal financial officer as required
by Section 302 of the Sarbanes-Oxley Act of 2002. Accordingly, Item
15(a)(3) of Part IV is amended to include the currently dated
certifications as exhibits. Because no financial statements have
been included in this Amendment and this Amendment does not contain
or amend any disclosure with respect to Items 307 and 308 of
Regulation S-K, paragraphs 3, 4 and 5 of the certifications have
been omitted.
Other than the items outlined
above, this Amendment does not modify or update the Original
Filing. Accordingly, this Amendment should be read in conjunction
with the Original Filing. This Amendment does not reflect events
occurring after the date of the Original Filing or modify or update
those disclosures that may be affected by subsequent events. Such
subsequent matters are addressed in subsequent reports filed by us
with the SEC.
Capitalized terms not defined in
this Amendment have the meaning given to them in the Original
Filing.
TABLE OF CONTENTS
PART III
|
Item 10. |
Directors, Executive Officers and Corporate
Governance |
Director Qualifications
and Biographical Information
The biography of each director below contains information regarding
that person’s principal occupation, positions held with the
Company, service as a director, business experience, other director
positions currently held or held at any time during the past five
years, involvement in certain legal or administrative proceeding,
if applicable, and the experiences, qualifications, attributes or
skills that caused our Nominating and Corporate Governance
Committee to conclude that the person should serve as a member of
our Board of Directors.
Edward C. Cosgrove, Esq., age 87—Mr. Cosgrove has served as
Director since 2012. He is an attorney with The Cosgrove Firm, a
Buffalo-based law firm where his practice includes civil
litigation, management of legal crises, representation of families,
schools, advice to corporations, businesses and professionals. He
earned a Bachelor of Arts Degree from the University of Notre Dame
and a Doctor of Laws Degree from Georgetown University Law School.
He previously served as a Special Agent with the Federal Bureau of
Investigation and as District Attorney of Erie County, NY. Mr.
Cosgrove enjoys the highest possible Peer Review Rating a lawyer
can receive from Martindale-Hubbell for the years 1980 through 2022
and is considered annually as one of the top lawyers in Western New
York. His broad-based legal experience is important to the Board of
Directors.
William F. Farrell, Jr., age 55—Mr. Farrell was appointed to the
Board of Directors in April 2022 when he also was appointed Chief
Executive Officer of the Company. He joined the Company following a
more than 30-year career with Western New York-based Moog Inc.
(NYSE: MOG.A and MOG.B), where he served in various roles of
increasing responsibility including, most recently, Site General
Manager for Moog's Aircraft Group, which supports military and
commercial aerospace applications. Prior to that, he served five
years as Site General Manager for its Industrial Group, supporting
markets including flight simulation, oil and gas exploration, power
generation and industrials automation. Earlier in his tenure at
Moog, he worked in a variety of other executive and engineering
roles for the worldwide designer, manufacturer, and integrator of
precision control components and systems, including in its
Industrials Group, Space Products Division and Engine Controls
Division. Mr. Farrell holds a B.S. degree in mechanical engineering
from the University of Notre Dame and an M.B.A in manufacturing
operations management from the State University of New York at
Buffalo. His leadership experience and industry knowledge provide
valuable insight to the Board of Directors in formulating and
executing the Company’s strategy.
Lucion P. Gygax, age 51—Mr. Gygax has served as a Director since
2015 and serves as Chair of the Compensation Committee and a member
of the Audit Committee and Nominating and Corporate Governance
Committee. He is the principal owner and executive of an event
management company, a consultant and author. Mr. Gygax retired this
year from the Army as a Lieutenant Colonel after 33 years of
service as a logistics officer and brings a diverse skill set to
the board with experience in synchronizing multi-functional teams,
budget management, human resources and talent management. Mr. Gygax
graduated from Beloit College where he received a B.A. in History
and Psychology. His experience leading complex logistics
organizations across a diverse range of operating environments
gives him valuable perspectives and insights. His leadership
experience and achievements highly qualify him to serve as a
Company Director.
Karen L. Howard, age 59—Ms. Howard was appointed to the Board of
Directors in April 2022 and serves as a member of the Audit
Committee, Compensation Committee and Nominating and Corporate
Governance Committee. She has more than 30 years of professional
experience as an advisor to and finance executive with public
companies, as well as a proven record of board leadership. She
retired in 2020 after serving for seven years as Executive Vice
President of Kei Advisors LLC, an investor relations and business
advisory firm serving micro-, small- and mid-cap public company
executives and boards across the United States. Previously, she
served for 17 years with Columbus McKinnon Corporation (Nasdaq:
CMCO), including as Vice President of Strategic Initiatives, Vice
President and Chief Financial Officer, and earlier roles as
Treasurer and Controller of the publicly traded global manufacturer
of material handling products and solutions. Prior to that, she was
a certified public accountant with Ernst & Young LLP. Ms.
Howard serves as a member of the Board of Directors of Highmark
Western and Northeastern New York Inc. (formerly HealthNow New York
Inc.), a regional health care company. She also chairs its audit
committee. Ms. Howard earned her bachelor’s degree in accounting
from Niagara University. Her accounting and business expertise,
including an in-depth understanding of the preparation and analysis
of financial statements, makes her highly qualified to serve as a
Company Director.
Christopher M. Marks, age 57—Mr. Marks was appointed to the Board
of Directors in July 2016 and serves as Chair of the Audit
Committee and member of the Compensation Committee and Nominating
and Corporate Governance Committee. Mr. Marks is a member of the
financial planning firm Jensen, Marks, Langer & Vance, LLC,
where he provides financial planning advice and investment
management services. Also, he is a member and the Chief Compliance
Officer of Sterling Investment Counsel, LLC, a registered
investment advisor. He brings over 25 years of financial planning
and analysis experience to the Company as well as a background in
accounting, corporate law and governance. He holds a Bachelor of
Science Degree in Accountancy from Villanova University, a Master
of Business Administration from St. Bonaventure University, and a
Juris Doctorate with honors from the State University of New York
at Buffalo School of Law. He previously practiced commercial and
corporate law at Phillips Lytle, LLP in Buffalo, NY and began his
career with Price Waterhouse in New York City. His business,
accounting and legal experience make him highly qualified to serve
as a Company Director.
Evan H. Wax, age 40—Mr. Wax was appointed to the Board of Directors
in April 2022 and serves as member of the Audit Committee,
Compensation Committee and Nominating and Corporate Governance
Committee. He is Managing Member of Wax Asset Management LLC in
Madison, CT, an investment advisory firm that employs a long-term
value based investment strategy. Prior to founding Wax Asset
Management in 2011, Mr. Wax was Managing Director and Head Trader
at Hayground Cove Asset Management where he was also a member of
the investment committee and risk committee. Prior to that, he
worked as a Financial Analyst at Goldman Sachs. Mr. Wax graduated
from Yale University where he received a B.A. in Economics. His
operational, financial and investment experience, and knowledge of
capital markets gives him strong insight into the issues facing the
Company’s businesses and markets.
Executive
Officers
The following provides certain information regarding our executive
officers. Each individual’s name and position with the Company is
indicated. In addition, the principal occupation and business
experience for the past five years is provided for each executive
officer. There are no family relationships between any of our
directors or executive officers.
William F. Farrell, Jr., age 55—Mr. Farrell was appointed Chief
Executive Officer of the Company in April 2022. He joined the
Company following a more than 30 year career with Moog Inc., where
he served in various roles of increasing responsibility including,
most recently, Site General Manager for Moog's Aircraft Group,
which supports military and commercial aerospace applications.
Prior to that, he served five years as Site General Manager for its
Industrial Group, supporting markets including flight simulation,
oil and gas exploration, power generation and industrials
automation.
Lisa F. Bencel, age 65—Ms. Bencel was named Chief Financial Officer
of the Company in January 2017. Prior to joining Servotronics, Ms.
Bencel served as Global Controller and Treasurer with kgb, a
privately held information services company. Previously, she was
with global manufacturing and services companies in the aerospace,
telecommunications and chemical industries, including GE, Honeywell
(formerly AlliedSignal), Ericsson, L3Harris Technologies and
Raytheon Technologies.
James C. Takacs, age 56—Mr. Takacs has served as Senior Vice
President of the Company since September 2016 and was named Chief
Operating Officer of the Company in May 2018. Prior to that he
served as Vice President of the Company, a position he held since
May 2010. Mr. Takacs first joined Servotronics in 1987 and he has
served in various roles of increasing responsibility including
Project Engineer, Quality Assurance Manager, and Director of
Operations during his tenure with the Company.
Delinquent Section 16(a)
Reports
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 2021.
Code of Ethics
The Company has adopted a Code of Ethics and Business Conduct (the
Code) that applies to all directors, officers and employees of the
Company as required by the listing standards of the NYSE American.
The Code is available on the Company’s website 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
American.
Shareholder Nominations of
Director Candidates
Under our By-laws, a shareholder of record may nominate a person
for election as a director at next year’s annual meeting if the
shareholder has delivered timely notice to our Corporate Secretary
setting forth:
|
• |
the name, age, business address and
residence address of each proposed nominee; |
|
• |
the principal occupation or
employment of each nominee; |
|
• |
the number of shares of
Servotronics capital stock which are owned of record and
beneficially by each such nominee; |
|
• |
a written questionnaire with
respect to the background and qualification of such proposed
nominee and a written statement and agreement executed by each such
nominee acknowledging that such person: (A) consents to being named
in the Company’s proxy statement as a nominee and to serving as a
director if elected, (B) intends to serve as a director for the
full term for which such person is standing for election, and (C)
makes certain other representations as set forth in the
By-laws; |
|
• |
certain information regarding the
proposing shareholder; and |
|
• |
any other information concerning
each nominee that would be required under the rules of the SEC in a
proxy statement soliciting proxies for the election of those
nominees. |
Audit Committee
In
2021, the Audit Committee consisted of Messrs. Gygax and Marks with
Mr. Marks chairing the Committee and being designated as the
Company’s “Audit Committee financial expert”. Ms. Howard and Mr.
Wax were added to the Audit Committee in April 2022 in connection
with their appointment to the Board. Each member of each of the
Audit Committee is “independent” as that term is defined in the
NYSE American listing standards. The Audit Committee meets
with the Company’s Independent Auditors and reviews with them
matters relating to corporate financial reporting and accounting
procedures and policies, the adequacy of financial, accounting and
operating controls, the scope of the audit and the results of the
audit. The Audit Committee is also charged with the responsibility
of submitting to the Board of Directors any recommendations it may
have from time to time with respect to financial reporting and
accounting practices, policies and financial accounting and
operation controls and safeguards.
|
Item 11. |
Executive Compensation |
The Summary Compensation Table quantifies the amount or value of
the different forms of compensation earned by or awarded to the
Company’s Chief Financial Officer and Chief Operating Officer as
well as the former Chief Executive Officer of the Company (the
“Named Officers”) in fiscal 2021 and 2020 and provides a dollar
amount for total compensation.
The Compensation Process
Overview
The Compensation Committee determines the compensation of the
Company’s Executive Officers in accordance with the NYSE American
listing standards. The most significant aspects of management’s
role are evaluating employee performance, recommending business
performance targets and objectives, and recommending salary levels
and other compensation awards, however final compensation
determinations for all Executive Officers are approved by the
Compensation Committee and ratified by the Board.
Base Salary
The Compensation Committee seeks to provide the Company’s Executive
Officers with a level of assured cash compensation in the form of
base salary that is commensurate with their professional status,
accomplishments and geographic location. The base salaries are
reviewed annually by the Compensation Committee and are adjusted
from time to time to recognize competitive market data, the
officer’s level of responsibility, outstanding individual
performance, promotions and internal equity considerations. For the
year ended December 31, 2021, base salary paid to each Named
Officer is as set forth in the Summary Compensation Table.
Annual Bonus
The Company also makes cash awards to the Executive Officers and
other employees that are not part of any pre-established,
performance-based criteria. Awards of this type are completely
discretionary and subjectively determined by the Compensation
Committee at the time they are awarded. In the event this type of
cash award is made, it is reflected in the “Summary Compensation
Table” under a separate column entitled “Bonus”.
Equity Awards
Pursuant to the 2012 Long-Term Incentive Plan, as approved by the
Company’s shareholders, the Compensation Committee may grant equity
awards, the vesting of which may be based on the passage of time,
achievement of performance conditions or vesting conditions
otherwise determined by the Compensation Committee. No equity
awards were granted in 2021.
Other Benefits
The Company generally provides employees with medical, life and
disability insurance benefits. All employees are eligible to
participate in the Company’s 401(k) Plan to which employees
are able to contribute up to the limit prescribed by the Internal
Revenue Service. The Company generally matches 75% of the
first 4% of eligible compensation that is contributed to the
Plan. All employee deferral contributions and Company
matching contributions are fully vested upon contribution.
All employees are also participants in the Employee Stock Ownership
Plan.
Summary Compensation
Table
The following table presents information relating to total
compensation of the Named Executive Officers for the fiscal years
ended December 31, 2021 and 2020.
|
Name and Principal Position |
|
Year |
|
Salary |
|
|
Bonus |
|
|
All Other
Compensation(1)
|
|
|
Total |
|
|
Lisa F. Bencel |
|
2021 |
|
$ |
245,960 |
|
|
|
-- |
|
|
$ |
47,684 |
|
|
$ |
293,644 |
|
|
Chief Financial Officer |
|
2020 |
|
$ |
245,960 |
|
|
$ |
40,000 |
|
|
$ |
47,128 |
|
|
$ |
333,088 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| James
C. Takacs |
|
2021 |
|
$ |
220,740 |
|
|
|
-- |
|
|
$ |
38,313 |
|
|
$ |
259,053 |
|
|
Chief Operating Officer |
|
2020 |
|
$ |
220,740 |
|
|
$ |
25,000 |
|
|
$ |
65,688 |
|
|
$ |
311,428 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth D. Trbovich |
|
2021 |
|
$ |
632,289 |
|
|
|
-- |
|
|
$ |
221,211 |
|
|
$ |
853,500 |
|
|
Former Chief Executive Officer |
|
2020 |
|
$ |
639,496 |
|
|
$ |
100,000 |
|
|
$ |
376,022 |
|
|
$ |
1,115,518 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
All Other Compensation for 2021
includes (i) $2,831 for Ms. Bencel, $2,824 for Mr. Takacs and
$2,831 for Mr. Trbovich in connection with the allocation of shares
of Common Stock under the Servotronics Inc. Employee Stock
Ownership Plan (“ESOP”) valued as of the closing price on November
30, 2021 (the date of allocation); (ii) $2,526, $1,476 and $630 for
Ms. Bencel, Mr. Takacs and Mr. Trbovich, respectively, for life
insurance; (iii) $34,596, $11,203 and $30,130 for Ms. Bencel, Mr.
Takacs and Mr. Trbovich, respectively, for health, dental and
vision insurance premiums and the reimbursement of medical/ health
related expenses not covered under the Company’s health insurance
plans; (iv) $7,731, $6,666, and $7,200 for Company 401k match and
dividends paid on vested shares of restricted stock shares for Ms.
Bencel, Mr. Takacs and Mr. Trbovich, respectively; (v) $16,144 and
$173,300 for Mr. Takacs and Mr. Trbovich, respectively for vacation
pay in lieu of time off pursuant to a policy that is generally
applicable to all employees of the Company; and (vi) $7,120 for
personal use of a company car for Mr. Trbovich. |
|
Item 12. |
Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters |
Securities Authorized for Issuance
Under Equity Compensation Plans
The following table sets forth the securities authorized for
issuance under the Company’s equity compensation plans as of
December 31, 2021:
| |
|
|
|
|
|
|
|
Number of |
|
|
|
|
Number of |
|
|
|
|
|
securities |
|
| |
|
securities to be |
|
|
|
|
|
remaining |
|
| |
|
issued upon |
|
|
Weighted-average |
|
|
available for |
|
| |
|
exercise of |
|
|
exercise price of |
|
|
future issuance |
|
| |
|
outstanding |
|
|
outstanding |
|
|
under |
|
| |
|
options, |
|
|
options |
|
|
equity |
|
| |
|
warrants and |
|
|
warrants and |
|
|
compensation |
|
|
Plan category |
|
rights |
|
|
rights |
|
|
plans |
|
|
Equity compensation plans approved by security holders |
|
|
— |
|
|
|
— |
|
|
|
88,277 |
|
|
Equity compensation plans not approved by security holders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total |
|
|
— |
|
|
|
— |
|
|
|
88,277 |
|
Security Ownership of
Certain Beneficial Owners
To the best of our knowledge, no person or group (as those terms
are used in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended) beneficially owned, as of April 25, 2022, more
than five percent of the shares of Common Stock outstanding, except
as set forth in the following table.
|
Name and Address of Beneficial Owner
|
Amount of Common Stock Beneficially Owned
|
Percent of
Common Stock (1)
|
Servotronics,
Inc. Employee Stock Ownership Trust
1110 Maple Street
Elma, NY 14059 |
440,649(2) |
17.7% |
Estate
of Dr. Nicholas D. Trbovich
960 Porterville Road
East Aurora, NY 14052 |
393,818(3) |
15.8% |
Brent
D. Baird
25 Melbourne Place
Buffalo, NY 14222 |
239,000(4) |
9.6% |
Wax
Asset Management, LLC
44 Cherry Lane
Madison, CT 06443 |
158,615(5) |
6.4% |
FMR
LLC
245 Summer Street
Boston, MA 02210 |
138,330(6) |
5.6% |
|
(1) |
The percentages are based upon
2,491,667 shares of Common Stock outstanding as of April 25,
2022. |
|
(2) |
The Trustee of the Servotronics,
Inc. Employee Stock Ownership Trust (the “ESOT”) directs the voting
of unallocated shares. The participants in the related plan have
the right to direct the voting of shares which have been allocated
to their respective accounts; if a participant does not direct the
vote, the Trustee may direct the vote of that participant’s shares.
As of April 25, 2021, approximately 384,014 shares are allocated to
the accounts of participants and approximately 56,635 shares remain
unallocated. |
|
(3) |
Kenneth D. Trbovich and Michael
Trbovich are co-executors under the Estate of Nicholas D. Trbovich
and share voting and investment power with respect to these shares.
These amounts do not include the shares beneficially owned by
certain of Dr. Trbovich’s other relatives. |
|
(4) |
According to an amended Schedule
13D filed by Brent D. Baird with the SEC on April 6, 2022, Mr.
Baird has sole voting power and sole dispositive power with respect
to 239,000 shares of Common Stock. |
|
(5) |
According to a Schedule 13G filed
by Wax Asset Management, LLC with the SEC on January 31, 2022,
these shares of Common Stock are owned by investment advisory
clients of Wax Asset Management, LLC, which is deemed to be a
beneficial owner of those shares pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934, due to its discretionary power to
make investment decisions over such shares for its clients.
Investment advisory contracts also grant the Adviser voting power
over the securities held in client accounts. |
|
(6) |
According to an amended Schedule
13G filed by FMR LLC with the SEC on February 9, 2022, Fidelity
Management & Research Company LLC, a wholly- owned subsidiary
of FMR LLC, is the beneficial owner of 138,330 shares of our common
stock, as a result of acting as an investment adviser to various
investment companies registered under the Investment Company Act of
1940. Abigail P. Johnson, Director, Chairman and Chief Executive
Officer of FMR LLC and FMR LLC, through its control of Fidelity
Management & Research Company LLC and the funds, each has sole
power to dispose of the 140,130 shares of our common stock owned by
such funds. Neither FMR LLC nor Abigail P. Johnson has the sole
power to vote or direct the voting of the shares owned directly by
such funds, which power resides with the funds’ Boards of Trustees.
Fidelity Management & Research Company LLC carries out the
voting of the shares under written guidelines established by the
funds’ Boards of Trustees. |
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 April
25, 2022:
|
Name of Beneficial Owner
|
Amount of Common Stock Beneficially Owned
|
Percent of
Common Stock (1)
|
|
Lisa
F. Bencel |
8,549(2) |
* |
|
Edward
C. Cosgrove, Esq. |
9,153 |
* |
|
William
F. Farrell, Jr. |
6,794 |
* |
|
Lucion
P. Gygax |
9,153 |
* |
|
Karen
L. Howard |
118 |
* |
|
Christopher
M. Marks |
9,153 |
* |
|
James
C. Takacs |
37,721(3) |
1.5% |
|
Kenneth
D. Trbovich |
502,598(4) |
20.2% |
|
Evan
H. Wax |
158,733(5) |
6.4% |
|
All
directors, nominees and executive officers as a group |
741,972 |
29.8% |
|
(1) |
The percentages are based upon
2,491,667 shares of Common Stock outstanding as of April 25,
2022. |
|
(2) |
Includes 1,262 shares allocated to
Ms. Bencel’s account under the ESOT. |
|
(3) |
Includes 20,058 shares allocated to
Mr. Takacs’ account under the ESOT. |
|
(4) |
This amount includes (i) 393,818
shares held by the Estate of Dr. Trbovich for which Mr. Trbovich is
the co-executor and shares voting and investment control over those
shares; (ii) 17,609 shares held by a charitable foundation for
which Mr. Trbovich serves as the Trustee; and (iii) 13,833 shares
allocated to Mr. Trbovich’s account under the ESOT. |
|
(5) |
Includes 158,615 shares owned by
investment advisory clients of Wax Asset Management, LLC, which is
deemed to be a beneficial owner of those shares pursuant to Rule
13d-3 under the Securities Exchange Act of 1934, due to its
discretionary power to make investment decisions over such shares
for its clients. Mr. Wax is the President of Wax Asset Management,
LLC. |
|
Item 13. |
Certain Relationships and Related Transactions and Director
Independence |
Related Party
Transactions
The Company incurred legal fees and disbursements of approximately
$100,000 in 2021 for services provided by a law firm that is owned
by Edward C. Cosgrove, Director of the Company.
Proposed transactions between the Company and a related person are
submitted to the Nominating and Corporate Governance Committee for
their determinations. In making its determinations, the Nominating
and Corporate Committee consider, among other factors, whether the
proposed transaction is in the Company’s best interest and is on
terms no less favorable to the Company than terms generally
available from an unaffiliated third-party under the same or
similar circumstances and the extent of the related person’s
interest in the transaction. Also, the Nominating and Corporate
Governance Committee may, at its discretion, request an independent
appraisal if an independent appraisal has not already been
provided. A related party is excluded from participating in the
determinations of the Nominating and Corporate Governance
Committee.
Independent
Directors
Under the corporate governance standards of the NYSE American, at
least fifty percent of our Directors, and, except in limited
circumstances, all of the members of our Audit Committee,
Compensation Committee and Nominating and Corporate Governance
Committee, must meet the test of “independence” as defined by the
NYSE American. The NYSE American standards provide that to qualify
as an “independent” director, in addition to satisfying certain
bright-line criteria, the Board of Directors must affirmatively
determine that a director does not have a relationship that would
interfere with the exercise of independent judgment in carrying out
the responsibilities of a director. The Board of Directors has
determined that each director nominee, other than Messrs. Cosgrove
and Farrell, satisfies the bright-line criteria and that no other
director or nominee has a relationship with the Company that would
interfere with such person’s ability to exercise independent
judgment as a member of our Board.
|
Item 14. |
Principal Accountant Fees and Services |
Auditor Fees and
Services
The following table shows fees for the audit and other services
provided by Freed Maxick CPAs, P.C. for 2021 and 2020.
| |
|
2021 |
|
|
2020 |
|
|
Audit
Fees(1) |
|
$ |
230,745 |
|
|
$ |
218,964 |
|
|
Tax
Fees(2) |
|
$ |
59,555 |
|
|
$ |
66,225 |
|
|
Total |
|
$ |
290,300 |
|
|
$ |
285,189 |
|
|
(1) |
Audit fees represent fees for
professional services provided in connection with the audit of the
Company’s financial statements and review of the Company’s
quarterly financial statements. 2021 Audit fees have not yet been
finalized. |
|
(2) |
Tax service fees principally
included fees for tax preparation, tax consulting services and tax
compliance services. |
Policy for Pre-Approval of
Audit and Permitted Non-Audit Services
The Audit Committee pre-approves audit and non-audit services
provided by Freed Maxick. The Audit Committee has considered
whether provision of the services described above is compatible
with maintaining our accountant’s independence and has determined
that such services have not adversely affected Freed Maxick’s
independence.
PART IV
|
Item 15. |
Exhibits and Financial Statement Schedules |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
| |
|
|
| |
SERVOTRONICS, INC. |
| |
|
| April
29, 2022 |
By |
/s/
William F. Farrell, Jr. |
| |
|
William
F. Farrell, Jr. |
| |
|
Chief
Executive Officer |
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