bkti_10ka
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
———————
FORM 10-K/A
Amendment No. 1
———————
☒
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2020
OR
☐
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to
__________
Commission file number: 001-32644
———————
BK TECHNOLOGIES CORPORATION
(Exact
name of registrant as specified in its charter)
———————
|
Nevada
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83-4064262
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(State
or other jurisdiction ofincorporation or organization)
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(I.R.S.
Employer Identification No.)
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7100 Technology Drive
West Melbourne, Florida 32904
(Address
of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (321)
984-1414
Securities registered pursuant to Section 12(b) of the
Act:
|
Title
of Each Class
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Trading
Symbol(s)
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Name of
Each Exchange on Which Registered
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Common
Stock, par value $.60
|
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BKTI
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NYSE
American
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Securities registered pursuant to Section 12(g) of the
Act:
None
Indicate by check
mark if the registrant is a well-known seasoned issuer, as defined
in Rule 405 of the Securities Act. Yes ☐
No ☒
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 ☒
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 ☒ 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 ☒ 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
Exchange Act.
|
Large
accelerated filer ☐
|
Accelerated filer
☐
|
|
Non-accelerated
filer ☒
|
Smaller
reporting company ☒
|
|
|
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 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.
☐
Indicate by check
mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes ☐
No ☒
The
aggregate market value of the voting and non-voting common equity
held by non-affiliates of the registrant on June 30, 2020,
based on the closing price of such stock on the NYSE American on
such date, was $17,141,876. As of April 23, 2021, 12,536,471 shares
of the registrant’s Common Stock were
outstanding.
Documents Incorporated by Reference:
None.
TABLE OF CONTENTS
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Page
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Directors, Executive Officers and Corporate Governance
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3
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Executive Compensation
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7
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Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
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16
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Certain Relationships and Related Transactions, and Director
Independence
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20
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Principal Accounting Fees and Services
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21
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Exhibits and Financial Statement Schedules
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22
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23
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Explanatory Paragraph
On
March 3, 2021, BK Technologies Corporation (the
“Company”) filed, with the Securities and Exchange
Commission (the “SEC”), its Annual Report on Form 10-K
for the year ended December 31, 2020 (the “Report” or
“Form 10-K”). This Amendment No. 1 (this
“Amendment”) updates Part III of the Report to contain
certain additional information required therein.
Except
for the changes to Part III and the filing of related
certifications added to the list of Exhibits in Part IV, this
Amendment makes no other changes to the Form 10-K. This Amendment
does not amend, update, or change the financial statements or any
other items or disclosures contained in the Report and does not
otherwise reflect events occurring after the original filing date
of the Report. Accordingly, this Form 10-K/A should be read in
conjunction with the Company’s filings with the SEC
subsequent to the filing of the Report.
As described
in Part I, Item 1 of the Report, on March 28, 2019,
we
implemented a holding company reorganization (the
“Reorganization”). The Reorganization created a new
holding company, BK Technologies Corporation, which became the new
parent company of BK Technologies, Inc. BK Technologies
Corporation’s only significant assets are the outstanding
equity interests in BK Technologies, Inc. and any other future
subsidiaries of BK Technologies Corporation. The Reorganization was
intended to create a more efficient corporate structure and
increase operational flexibility.
For the purpose of this
Amendment, references to “BK Technologies,” the
“Company,” “we,” “us,”
or our
management or business at any period prior to the Reorganization
(March 28, 2019) refer to those of BK Technologies, Inc. as the
predecessor company and its subsidiaries, and thereafter to those
of BK Technologies Corporation and its subsidiaries, except as
otherwise specified or to the extent the context otherwise
indicates.
Item
10. Directors, Executive Officers and Corporate
Governance
BOARD OF DIRECTORS
Set forth below is certain information regarding
the members of the Company’s board of directors (the
“Board” or the “Board of Directors”). Each
director is entitled to serve until the 2021 annual meeting of
stockholders and until a successor is duly elected and qualified or
until his earlier retirement, resignation or removal. The age of
each director is reported as of April 23, 2021.
|
Name and Year First Elected
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Age
|
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Position
|
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John W.
Struble (2017)
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44
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Chairman
of the Board
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D. Kyle
Cerminara (2015)
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43
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Director
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Michael
R. Dill (2017)
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56
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Director
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Charles
T. Lanktree (2017)
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71
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Director
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E. Gray
Payne (2017)
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73
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Director
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The
business experience of each director is set forth below as of April
23, 2021.
John W.
Struble was appointed to
the Board of Directors in March 2017 and as Chairman of the Board
in April 2020. Mr. Struble has served as consultant to Fundamental
Global Management, LLC, an affiliate of Fundamental Global, which
provides services related to the day-to-day management of certain
of Fundamental Global’s portfolio companies and affiliates,
since April 2020. From December 2013 to March 2020, Mr. Struble
served as Chief Financial Officer of IntraPac International LLC, a
specialty packaging manufacturing company owned by private equity
investment firm Onex Corporation (TSX: ONEX), where he was
responsible for the finance, information technology and human
resources functions. From May 2012 to December 2013, he served as
Corporate Controller and Treasurer of IntraPac. From May 2010 to
May 2012, he served as Corporate Controller (Operations) of Euramax
International, Inc., where he was responsible for the accounting
and finance functions for the North American operations. Euramax
produces aluminum, steel, vinyl and fiberglass products for
original equipment manufacturers, distributors, contractors, and
home centers in North America and Europe. Prior to that, he was
Controller of Rock-Tenn Company from December 2008 to February
2010. Mr. Struble is a Certified Public Accountant. He received an
MBA from the University of Georgia and a B.S. in Business
Administration from the State University of New York at
Buffalo.
D. Kyle
Cerminara was appointed to the
Board of Directors in July 2015 and served as Chairman of the Board
from March 2017 until April 2020. Mr. Cerminara over 20
years’ experience as an institutional investor, asset
manager, director, chief executive, founder and operator of
multiple financial services and technology businesses. Mr.
Cerminara co-founded Fundamental Global in 2012 and serves as its
chief executive officer. In July 2020, Mr. Cerminara began serving
as director and President of FG New America Acquisition Corp.
(NYSE: FGNA), a special purpose acquisition company that has
entered into a definitive business combination agreement with
Opportunity Financial.
Mr.
Cerminara is a member of the board of directors of a number of
companies focused in the reinsurance, investment management,
technology and communication sectors, including Aldel Financial,
Inc. (NYSE: ADF.U), a special purpose acquisition company focused
on merging with a company that is exiting a restructuring process
or that has transient current ownership, since April 2021, FG
Financial Group, Inc. (Nasdaq: FGF) (formerly known as 1347
Property Insurance Holdings, Inc.), which operates as a diversified
reinsurance and investment management holding company, since
December 2016, GreenFirst Forest Products Inc. (TSXV: GFP)
(formerly Itasca Capital Ltd.), a public company focused on
investments in the forest products industry, since June 2016,
Ballantyne Strong, Inc. (NYSE American: BTN), a holding company
with diverse business activities focused on serving the
entertainment and retail markets, since February 2015, and Firefly
Systems Inc., a venture- backed digital advertising company, since
August 2020.
Mr.
Cerminara was appointed chairman of FG Financial Group, Inc. in May
2018 and served as its principal executive officer from March 2020
to June 2020. He was also appointed chairman of GreenFirst Forest
Products Inc. in June 2018. Mr. Cerminara has served as the
chairman of Ballantyne Strong, Inc. since May 2015. He also
previously served as its chief executive officer from November 2015
through April 2020. He also served on the board of directors of
Limbach Holdings, Inc. (Nasdaq: LMB), a company which provides
building infrastructure services, from March 2019 to March 2020;
Iteris, Inc. (Nasdaq: ITI), a publicly-traded, applied informatics
company, from August 2016 to November 2017; and Magnetek, Inc., a
publicly-traded manufacturer, in 2015. He previously served on the
board of directors of blueharbor bank, a community bank, from
October 2013 to January 2020. He served as a Trustee and President
of StrongVest ETF Trust, which was an open-end management
investment company from July 2016 to March 2021. Previously, Mr.
Cerminara served as the co-chief investment officer of CWA Asset
Management Group, LLC, a position he held from January 2013 to
December 2020.
Prior
to these roles, Mr. Cerminara was a portfolio manager at Sigma
Capital Management, an independent financial adviser, from 2011 to
2012, a director and sector head of the Financials Industry at
Highside Capital Management from 2009 to 2011, and a portfolio
manager and director at CR Intrinsic Investors from 2007 to 2009.
Before joining CR Intrinsic Investors, Mr. Cerminara was a vice
president, associate portfolio manager and analyst at T. Rowe Price
(Nasdaq: TROW) from 2001 to 2007, where he was named amongst
Institutional Investor’s Best of the Buy Side Analysts in
November 2006, and an analyst at Legg Mason from 2000 to 2001. Mr.
Cerminara received an MBA degree from the Darden Graduate School of
Business at the University of Virginia and a B.S. in Finance and
Accounting from the Smith School of Business at the University of
Maryland, where he was a member of Omicron Delta Kappa, an NCAA
Academic All American and Co-Captain of the men’s varsity
tennis team. He also completed a China Executive Residency at the
Cheung Kong Graduate School of Business in Beijing, China. Mr.
Cerminara holds the Chartered Financial Analyst (CFA)
designation.
Michael R.
Dill was appointed to the Board
of Directors in March 2017. Mr. Dill has served as President,
Americas West, and previously as Vice President and General
Manager, of GKN Aerospace Engine Systems North America, a designer
and manufacturer of aerospace engine components, since April 2017.
Mr. Dill previously served as President of the Aerospace, Power
Generation and General Industrial divisions at AFGlobal
Corporation, a privately-held, integrated technology and
manufacturing company, from August 2014 to April 2017. Prior to
joining AFGlobal, Mr. Dill held various positions in the Aerospace
and Defense division of CIRCOR International (NYSE: CIR), a
publicly-traded global manufacturer of highly engineered
environment products, including serving as Group Vice President
from 2009 to 2014, Vice President of Business Development and
Strategy from 2010 to 2011 and Director of Continuous Improvement
from 2009 to 2011. From 2007 to 2009, he served as a Business Unit
Director and Facility Leader within the aerospace group of Parker
Hannifin Corporation (NYSE: PH), a publicly-traded diversified
manufacturer of motion and control technologies and systems. Before
joining Parker Hannifin Corporation, he held various positions with
Shaw Aero Devices, Inc., a producer of aerospace components and
equipment, from 1996 to 2007, and Milliken and Company, a
manufacturing company, from 1988 to 1996. Mr. Dill received a B.S.
in Management from the Georgia Institute of
Technology.
Charles T.
Lanktree was appointed to the
Board of Directors in March 2017. Mr. Lanktree has served as Chief
Executive Officer of Eggland’s Best, LLC, a joint venture
between Eggland’s Best, Inc. and Land O’Lakes, Inc.
distributing nationally branded eggs, since 2012 and also served as
its President from 2012 to 2018. Since 1997, Mr. Lanktree has
served as President and Chief Executive Officer of Eggland’s
Best, Inc., a franchise-driven consumer egg business, where he
previously served as the President and Chief Operating Officer from
1995 to 1996 and Executive Vice President and Chief Operating
Officer from 1990 to 1994. Mr. Lanktree currently serves on the
board of directors of Eggland’s Best, Inc. and several of its
affiliates and on the board of directors of Ballantyne Strong, Inc.
(NYSE American: BTN), a holding company with diverse business
activities focused on serving the cinema, retail, financial and
government markets. From 2010 to 2013, he served on the board of
directors of Eurofresh Foods, Inc., a privately-held company, and,
from 2004 to 2013, he was on the board of directors of
Nature’s Harmony Foods, Inc. Prior to joining Eggland’s
Best, Inc., Mr. Lanktree served as the President and Chief
Executive Officer of American Mobile Communications, Inc. from 1987
to 1990 and as the President and Chief Operating Officer of
Precision Target Marketing, Inc. from 1985 to 1987. From 1976 to
1985, he held various executive-level marketing positions with The
Grand Union Company and BeechNut Foods Corporation. Mr. Lanktree
received an MBA from the University of Notre Dame and a B.S. in
Food Marketing from St. Joseph’s College. He also served in
the U.S. Army and U.S. Army Reserves from 1971 to
1977.
E. Gray
Payne was appointed to the
Board of Directors in January 2017. Since December 2011, General
Payne has provided consulting services to and served on the
Advisory Council of Marstel-Day, LLC, located in Fredericksburg,
Virginia, which consults in the areas of conservation,
environmental compliance, and encroachment. General Payne
previously served as Senior Vice President of The Columbia Group
(“TCG”), from September 2010 to September 2017, where
he was responsible for managing the Marine Corps Programs Division
(since September 2010) and the Navy Programs Division (since
October 2013), with combined annual revenue of approximately $30
million. TCG is a federal consulting firm working with the
Department of Defense, Department of Homeland Security, NOAA and
private clients. TCG consults in the areas of logistics,
acquisitions, program management, information technology, training,
marine architecture and engineering, and command and control
systems. Prior to September 2010, General Payne was on active duty
with the Marine Corps for 10 years, retiring as a Major General.
Prior to March 2001, he worked with a number of companies in
various capacities, including as a management consultant, Chief
Financial Officer, Chief Operating Officer, and Chief Executive
Officer. General Payne currently serves on the board of directors
of FG Financial Group, Inc. (Nasdaq: FGF) (formerly known as 1347
Property Insurance Holdings, Inc.), which intends to operate as a
diversified reinsurance, investment management and real estate
holding company (since May 2018), and on the following non-profit
boards: VetCV (since December 2017) and National Wildlife Refuge
Association (since June 2018). He previously served on the board of
governors of the Marine Corps Association and the board of
directors of the Marine Corps Association Foundation. He received a
B.S. in Economics from North Carolina State University and a M.S.
in Strategic Studies from U.S. Army War
College.
EXECUTIVE OFFICERS
Set forth below is certain information
regarding our executive officers as of April 23,
2021. Each executive officer serves at
the discretion of the Board of Directors.
|
Name
|
|
Age
|
|
Position
|
|
Timothy
A. Vitou
|
|
64
|
|
President
|
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William
P. Kelly
|
|
64
|
|
Executive
Vice President, Chief Financial Officer and Secretary
|
|
Henry
R. (Randy) Willis
|
|
62
|
|
Chief
Operating Officer
|
|
Branko
Avanic, Ph.D.
|
|
60
|
|
Chief
Technology Officer
|
Timothy A.
Vitou has been our President
since January 17, 2017. He previously served as the Company’s
Senior Vice President of Sales and Marketing since May 2008. Prior
to that, he served as Vice President of Sales for Mobility
Electronics, Inc., from August 2006 to May 2007, Senior Director of
Global Go-To-Market, for Motorola Solutions, Inc., from April 2002
to April 2006, and General Manager, Americas Region, for Motorola
Solutions, from April 2000 to April 2002.
William P.
Kelly has been our Executive
Vice President and Chief Financial Officer since July 1997, and
Secretary since June 2000. From October 1995 to June 1997, he was
Vice President and Chief Financial Officer of our subsidiary, RELM
Communications, Inc. From January 1993 to October 1995, he was the
Financial Director of Harris Corp. Semiconductor
Sector.
Henry R.
(Randy) Willis has been our
Chief Operating Officer since March 14, 2018. He previously served
as the Company’s Vice President of Operations since August
2017, overseeing all aspects of manufacturing and quality. Prior to
joining the Company, he held leadership positions in manufacturing,
operations, quality, supply chain, industrial engineering and
program management, including founding and serving as President of
Target Velocity Consulting, Inc., a “Lean/Six Sigma”
firm specializing in operational improvements, from December 2009
to August 2017 and Vice President, Continuous Improvement, for
CIRCOR International, Inc. (NYSE: CIR), from August 2007 to
December 2009. He also served in leadership positions for
Parker-Hannifin Corporation (NYSE: PH) from January 2005 to August
2007 and Honeywell International Inc. (NYSE: HON) from June 1998 to
January 2005. Mr. Willis holds certifications as a Lean Master and
Six Sigma Black Belt and B.S. and M.S. degrees in Industrial
Technology from East Carolina University.
Branko
Avanic, Ph.D., has been our
Chief Technology Officer since October 30, 2019. Dr. Avanic
previously served as Senior Vice President of Engineering of BK
Technologies, Inc., our wholly-owned subsidiary, since August 13,
2019. Prior to joining the Company, he served in a number of roles
at Motorola Solutions, Inc. (NYSE: MSI), including Director, Head
Architect – Devices Engineering for several different
projects from 2015 through June 2019 and a variety of other roles
from 1999 to 2015. Dr. Avanic also serves as President of Ph.D.
Research Group Inc. Dr. Avanic has previously served as an adjunct
professor at the University of Miami and Florida Atlantic
University. He received a B.S., M.S. and Ph.D. in Electrical
Engineering from the University of Miami.
Family Relationships
There
are no family relationships among any of our directors or executive
officers.
Legal Proceedings
No
director or executive officer has been involved in any legal
proceeding during the past ten years that is material to an
evaluation of his or her ability or integrity.
CORPORATE GOVERNANCE
Section 16(a) Reporting
Section
16(a) of the Exchange Act requires that our directors and executive
officers, and persons who own more than ten percent (10%) of our
common stock, file with the SEC initial statements of beneficial
ownership of common stock and statements of changes in beneficial
ownership of common stock.
Based
solely on a review of the copies of such reports and
representations that no other reports were required, we believe
that all Section 16 filing requirements applicable to our
directors, executive officers and ten percent (10%) beneficial
owners were timely complied with during fiscal 2020.
Code of Ethics
The
Board of Directors has adopted the Code of Business Conduct and
Ethics (the “Code of Conduct”) that applies to all of
our directors, officers and employees, including our principal
executive officer, principal financial officer and principal
accounting officer, and the Code of Ethics for the CEO and Senior
Financial Officers (the “Code of Ethics”) containing
additional specific policies. The Code of Conduct and the Code of
Ethics are posted on our Internet website at
www.bktechnologies.com/investor-relations and are available free of
charge, upon request to Corporate Secretary, 7100 Technology Drive,
West Melbourne, Florida 32904; telephone number: (321)
984-1414.
Any
amendment to, or waiver from, a provision of the codes of ethics
applicable to our directors and executive officers will be
disclosed in a current report on Form 8-K within four business days
following the date of the amendment or waiver, unless the rules of
the NYSE American then permit website posting of such amendments
and waivers, in which case we would post such disclosures on our
Internet website.
Stockholder Nominees
There
have been no material changes to the procedures by which
stockholders of the Company may recommend nominees to the
Company’s Board of Directors.
The
nominating and governance committee of the Board of Directors has
adopted a policy with regard to the consideration of director
candidates submitted by stockholders. This policy is set forth in
the committee’s “Policy Regarding Director Candidate
Recommendations Submitted by Stockholders.” The committee
will only consider director candidates submitted by stockholders
who satisfy the minimum qualifications prescribed by the committee
for director candidates, including that a director must represent
the interests of all stockholders and not serve for the purpose of
favoring or advancing the interests of any particular stockholder
group or other constituency.
In
accordance with this policy, the nominating and governance
committee will consider director candidates recommended by
stockholders only where the committee has determined to not
re-nominate an incumbent director. In addition, the committee will
not consider any recommendation by a stockholder or an affiliated
group of stockholders unless such stockholder or group of
stockholders has owned at least five percent (5%) of our common
stock for at least one year as of the date the recommendation is
made. Any eligible stockholder (or affiliated group of
stockholders) who desires to recommend a director candidate for
consideration by the nominating and governance committee generally
must ensure that it is received by the Company no later than 120
days prior to the first anniversary of the date of the proxy
statement for the prior annual meeting of stockholders. In the
event that the date of the annual meeting of stockholders for the
current year is more than 30 days following the first anniversary
date of the annual meeting of stockholders for the prior year, the
submission of a recommendation will be considered timely if it is
submitted a reasonable time in advance of the mailing of the
Company’s proxy statement for the annual meeting of
stockholders for the current year.
Any
such eligible stockholder (or affiliated group of stockholders) is
required to submit complete information about itself and the
recommended director candidate as specified in the
committee’s “Procedures for Stockholders Submitting
Director Candidate Recommendations” policy and as set forth
in the advance notice provisions in our bylaws. Such information
must include, among other things, (i) the number of our common
shares beneficially owned by the recommending stockholder and the
length of time such shares have been held, (ii) the name, age and
experience of the director candidate, (iii) whether the director
candidate owns any of our securities, (iv) whether the director
candidate has a direct or indirect material interest in any
transaction in which we are a participant, (v) a description of all
relationships between the director candidate and the recommending
stockholder, and (vi) a statement setting forth the director
candidate’s qualifications. Submissions should be addressed
to the nominating and governance committee care of our Corporate
Secretary at our principal headquarters, 7100 Technology Drive,
West Melbourne, Florida 32904. Submissions must be made by mail,
courier or personal delivery. E-mail submissions will not be
considered.
Copies
of the policies of the nominating and corporate governance
committee are available on our website at www.bktechnologies.com/investor-relations.
Audit Committee
The
Board of Directors has a standing audit committee. As of December
31, 2020, the members of the audit committee of the Board of
Directors were as follows:
|
Director
|
|
Audit Committee
|
|
|
Michael
R. Dill
|
|
Member
|
|
|
Charles
T. Lanktree
|
|
Member
|
|
|
E. Gray
Payne
|
|
Chair
|
|
The
Board of Directors has determined that each member of the audit
committee is, and was during 2020, independent, as defined by Rule
10A-3 of the Exchange Act, and the corporate governance listing
standards of the NYSE American. The Board of Directors also has
determined that General Payne is an “audit committee
financial expert,” as defined in Item 407(d)(5) of Regulation
S-K.
Item
11. Executive Compensation
SUMMARY EXECUTIVE COMPENSATION TABLE FOR 2019-2020
The following table provides certain summary
information concerning the compensation of our named executive
officers for the last two completed fiscal years ended December 31,
2020:
|
Name
and Principal Position
|
Year
|
|
|
|
|
Non-Equity
Incentive Plan Compensation ($)
|
All
Other Compensation ($)
|
|
|
Timothy
A. Vitou
|
2020
|
275,000
|
45,000
|
—
|
—
|
—
|
21,980(4)
|
341,980
|
|
President
|
2019
|
270,096
|
—
|
—
|
51,480
|
—
|
15,870(4)
|
337,446
|
|
|
|
|
|
|
|
|
|
|
William
P. Kelly
|
2020
|
215,000
|
30,000
|
—
|
—
|
—
|
28,367(5)
|
273,367
|
|
Executive Vice
President, Chief Financial Officer and Secretary
|
2019
|
212,058
|
—
|
—
|
34,320
|
—
|
15,480(5)
|
261,858
|
|
|
|
|
|
|
|
|
|
|
Randy
Willis
|
2020
|
215,000
|
60,000
|
—
|
—
|
—
|
7,985(6)
|
282,985
|
|
Chief Operating
Officer
|
2019
|
212,058
|
—
|
—
|
34,320
|
—
|
41,415(6)
|
287,793
|
|
|
|
|
|
|
|
|
|
|
Branko Avanic(1)
|
2020
|
235,000
|
75,000
|
—
|
—
|
—
|
11,477(7)
|
321,477
|
|
Chief Technology
Officer
|
2019
|
82,808
|
—
|
—
|
38,070
|
—
|
853(7)
|
121,731
|
_____________
(1)
Effective October
30, 2019, Dr. Avanic, then Senior Vice President of Engineering of
BK Technologies, Inc., was appointed as Chief Technology Officer of
the Company, effective immediately. Dr. Avanic’s compensation
for 2019 includes $48,462 in compensation received from August 13,
2019, through October 30, 2019, in his role as Senior Vice
President of Engineering of BK Technologies, Inc.
(2)
On March 16, 2021,
the compensation committee approved payment of cash bonuses of
$45,000 to Mr. Vitou, $30,000 to Mr.
Kelly, $60,000 to Mr. Willis, and $75,000 to Dr.
Avanic.
(3)
The amounts in this
column represent the aggregate grant date fair value of stock
options granted to the Named Executive Officer computed in
accordance with FASB ASC Topic 718. The value ultimately realized
by the Named Executive Officer upon the actual exercise of the
stock options may or may not be equal to the FASB ASC Topic 718
computed value. For a discussion of valuation assumptions, see Note
1 (Summary of Significant Accounting Policies) and Note 10
(Share-Based Employee Compensation) of our consolidated financial
statements included in our Annual Report on Form 10-K for fiscal
2020.
On March 5, 2019, the compensation committee
granted non-qualified stock options to Messrs. Vitou, Kelly and
Willis to purchase 30,000, 20,000 and 20,000 shares, respectively,
of the Company’s common stock, at an exercise price of $4.07
per share. On October 30, 2019, in connection with Dr.
Avanic’s appointment as Chief Technology Officer, the
compensation committee granted non-qualified stock options to Dr.
Avanic to purchase 30,000 shares of the Company’s common
stock, at an exercise price of $3.61 per share. Additional
information about the stock option awards can be found below under
“—Stock Option
Awards.”
(4)
The amounts in this
column for Mr. Vitou represent the Company’s matching
contributions for fiscal 2020 and fiscal 2019 of $2,909 and $6,752,
respectively, to Mr. Vitou’s account under the
Company’s 401(k) plan; the Company’s payments for
fiscal 2020 and fiscal 2019 of $8,495 and $9,118, respectively, for
long-term disability, life and health insurance premiums for the
benefit of Mr. Vitou; and the Company’s payment for fiscal
2020 of $10,576 for accrued unused vacation time.
(5)
The amounts in this
column for Mr. Kelly represent the Company’s matching
contributions for fiscal 2020 and fiscal 2019 of $2,729 and $6,362,
respectively, to Mr. Kelly’s account under the
Company’s 401(k) plan; the Company’s payments for
fiscal 2020 and fiscal 2019 of $8,495 and $9,118, respectively, for
long-term disability, life and health insurance premiums for the
benefit of Mr. Kelly; and the Company’s payment for fiscal
2020 of $17,144 for accrued unused vacation time.
(6)
The amounts in this
column for Mr. Willis represent the Company’s matching
contribution for fiscal 2020 and fiscal 2019 of $2,729 and of
$5,900, respectively, to Mr. Willis’s account under the
Company’s 401(k) plan; the Company’s payments for
fiscal 2020 and fiscal 2019 of $5,256 and $5,515 for long-term
disability, life and health insurance premiums for the benefit of
Mr. Willis. The amounts in this column also include the
Company’s payment to Mr. Willis during fiscal 2019 of a
one-time cash payment of $30,000 to offset potential losses
incurred by Mr. Willis in connection with the sale of his house
located in Charlotte, North Carolina. Mr. Willis relocated from
Charlotte, North Carolina, to Brevard County, Florida, in order to
be closer to the Company’s principal executive offices. The
payment was made pursuant to a retention agreement entered into
between the Company and Mr. Willis. See “—Named
Executive Officer Appointments and Agreements—Retention
Agreement” below for more information about this
agreement.
(7)
The amount in this
column for Dr. Avanic represents the Company’s matching
contributions for fiscal 2020 and fiscal 2019 of $2,982 and $27,
respectively, to Dr. Avanic’s account under the
Company’s 401(k) plan; the Company’s payments for
fiscal 2020 and 2019 of $8,495 and $582 for long-term disability,
life and health insurance premiums for the benefit of Dr.
Avanic.
Except
as disclosed above, Mr. Vitou, Mr. Kelly, Mr. Willis and Dr. Avanic
did not receive any other compensation during fiscal 2020 or fiscal
2019, except for perquisites and other personal benefits, of which
the total aggregate value for each of them did not exceed
$10,000.
Named Executive Officer Appointments and Agreements
Appointment of Chief Technology Officer
On
October 30, 2019, the Board of Directors appointed Dr. Avanic as
Chief Technology Officer of the Company, effective immediately. In
connection with such appointment, BK Technologies, Inc. entered
into an employment agreement with Dr. Avanic, executed November 5,
2019 (the “Avanic Employment Agreement”), which is
described below under “Employment
Agreements.”
Dr.
Avanic previously served as Senior Vice President of Engineering of
BK Technologies, Inc., since August 2019, pursuant to an offer
letter, dated July 15, 2019 (the “Avanic Offer
Letter”). The Avanic Offer Letter provided for an annual base
salary of $225,000 and the opportunity to earn a bonus of up to 30%
of his annual base salary, as well as eligibility to participate in
the Company’s benefit plans. For his service in such role,
Dr. Avanic received payments equal to $48,462. The Avanic Offer
Letter also provided Dr. Avanic the opportunity to receive a
stock-based grant of 20,000 shares. On October 30, 2019, as
contemplated under the Avanic Offer Letter and in connection with
his appointment as Chief Technology Officer, the compensation
committee granted to Dr. Avanic non-qualified stock options to
purchase 30,000 shares of the Company’s common stock at an
exercise price of $3.61 per share under the 2017 Plan. The options
have a ten-year term and will become exercisable in five equal
annual installments, beginning on the first anniversary of the
grant date.
Employment Agreements
On
March 20, 2019, the Company entered into employment agreements with
each of the following (collectively, as amended, the “March
2019 Employment Agreements” and, collectively with the Avanic
Employment Agreement, the “Employment Agreements”): (i)
Timothy A. Vitou, President; (ii) William P. Kelly, Executive Vice
President, Chief Financial Officer and Secretary; and (iii) Randy
Willis, Chief Operating Officer. Following the Reorganization, the
March 2019 Employment Agreements are with BK Technologies, Inc.,
our wholly-owned subsidiary. The March 2019 Employment Agreements
provide for an annual base salary of $275,000 for Mr. Vitou and
$215,000 for each of Messrs. Kelly and Willis. The Avanic
Employment Agreement provides for an annual base salary of $235,000
for Dr. Avanic.
Each
Named Executive Officer is eligible for performance-based
compensation in the form of an annual bonus, payable in cash or
through equity in the Company, as determined by the compensation
committee, and subject to the achievement of performance metrics
and other criteria as determined by the compensation
committee.
The Employment
Agreements provide for severance payments in the event the Named
Executive Officer’s employment is terminated by the Company
without “cause.” Each Named Executive Officer will be
entitled to an amount equal to six months (twelve months for Mr.
Vitou) of his base salary in effect at the time of termination or
the original base salary set forth in his respective Employment
Agreement, whichever is greater.
Any
severance payable to a Named Executive Officer under his Employment
Agreement will be paid by the Company over a twelve-month period in
accordance with the Company’s normal payroll practices and
subject to applicable law. None of the Named Executive Officers
will be entitled to severance payments in the event he is
terminated for “cause.” For purposes of the Employment
Agreements, “cause” will exist if the Named Executive
Officer (i) acts dishonestly or incompetently or engages in willful
misconduct in performance of his executive duties, (ii) breaches
the Named Executive Officer’s fiduciary duties owed to the
Company, (iii) intentionally fails to perform duties assigned to
him, (iv) is convicted or enters a plea of guilty or nolo
contendere with respect to any felony crime involving dishonesty or
moral turpitude, and/or (v) breaches his obligations under his
Employment Agreement.
The
Named Executive Officers are also eligible to participate in the
Company’s benefit plans. The Employment Agreements contain
customary non-competition and non-solicitation
covenants.
Retention Agreement
On
December 31, 2018, we entered into a retention agreement with Mr.
Willis in connection with his relocation from Charlotte, North
Carolina, to Brevard County, Florida, in order to be near the
Company’s principal executive offices. The agreement provided
for a one-time cash payment of $30,000 from us to Mr. Willis to
offset potential losses incurred by Mr. Willis in connection with
the sale of his house located in Charlotte, North Carolina, which
we paid to Mr. Willis in January 2019.
Pursuant
to the retention agreement, if Mr. Willis’s employment with
us is terminated either by Mr. Willis voluntarily (other than for
“good reason”) or by us for “cause” during:
(i) December 31, 2018 through August 1, 2019 (the second
anniversary of August 1, 2017, his employment date), the entire
relocation allowance ($30,000) provided under the agreement will be
immediately repayable to us; (ii) August 2, 2019 through August 1,
2020, two-thirds of the relocation allowance ($20,000) will be
immediately repayable to us; and (iii) August 2, 2020 through
August 1, 2021, one-third of the relocation allowance ($10,000)
will be immediately repayable to us. Any such amounts that are
repayable to us may also be deducted from any amounts otherwise
payable to Mr. Willis by us upon his termination. For purposes of
the retention agreement, “cause” and “good
reason” have the meanings set forth in the 2017
Plan.
Compensation Consultant
In
2018, the compensation committee engaged Pay Governance LLC as an
independent compensation consultant to assist the committee with
the review and design of our executive compensation program,
including providing the committee with pay data regarding the
direct compensation program for our President, Chief Operating
Officer, Chief Financial Officer and Chief Technology Officer. In
connection with the committee’s engagement of the consultant,
the committee solicited information from Pay Governance LLC
regarding any actual or perceived conflicts of interest and to
evaluate the firm’s independence. Based on the information
received from the consultant, the compensation committee believes
that the work Pay Governance LLC performed in 2018 did not raise a
conflict of interest and that it was independent.
Base Salaries
On
March 5, 2019, the compensation committee approved base salaries of
$275,000, $215,000 and $215,000 to Messrs. Vitou, Kelly and Willis,
respectively. On October 30, 2019, the Board of Directors approved
a base salary for 2019 of $235,000 to Dr. Avanic.
Bonus Payments
2020 Discretionary Cash Bonuses
On
March 16, 2021, based on management’s recommendations and the
Named Executive Officers’ 2020 performance, the compensation
committee approved the payment of cash bonuses of $45,000 to Mr.
Vitou, $30,000 to Mr. Kelly, $60,000 to Mr. Willis, and $75,000 to
Dr. Avanic.
Stock Option Awards
2019 Awards
On March 5, 2019, the compensation committee
granted non-qualified stock options to Messrs. Vitou, Kelly and
Willis to purchase 30,000, 20,000 and 20,000 shares, respectively,
of the Company’s common stock, at an exercise price of $4.07
per share. On October 30, 2019, the compensation committee granted
non-qualified stock options to Dr. Avanic to purchase 30,000 shares
of the Company’s common stock, at an exercise price of $3.61
per share. The stock options have ten-year terms and become
exercisable in five equal annual installments, beginning on the
first anniversary of the respeective grant date. All
such awards were granted pursuant to the 2017 Plan.
2017 Incentive Compensation Plan
The
Company’s stockholders approved the 2017 Plan at the
Company’s 2017 annual meeting of stockholders held on June
15, 2017. The 2017 Plan replaced the 2007 Incentive Compensation
Plan (the “2007 Plan” and, together with the 2017 Plan,
the “Equity Plans”), which had been approved by the
stockholders in 2007. No new awards will be granted under the 2007
Plan.
In
connection with the Reorganization, we assumed the Equity Plans and
all of the outstanding equity awards under such Equity Plans
pursuant to the Omnibus Amendment to Incentive Compensation Plans,
dated as of March 28, 2019 (the “Omnibus Amendment”).
Each outstanding equity award assumed by us is issuable upon the
same terms and conditions as were in effect immediately prior to
the completion of the Reorganization, except that all such equity
awards now entitle the holder thereof to acquire our common
stock.
The objective of the 2017 Plan is to provide
incentives to attract and retain key employees, non-employee
directors and consultants and align their interests with those of
the Company’s stockholders. The 2017 Plan is administered by
the compensation committee and has a term of ten years. All
non-employee directors of the Company and employees and consultants
of the Company and its subsidiaries designated by the committee are
eligible to participate in the 2017 Plan and to receive awards,
including stock options (which may be incentive stock options or
non-qualified stock options), stock appreciation rights, restricted
shares, RSUs, or other share-based awards and cash-based
awards.
OUTSTANDING EQUITY AWARDS AT 2020 FISCAL YEAR-END
The
following table provides information with respect to outstanding
stock option awards for our shares of common stock classified as
exercisable and unexercisable as of December 31, 2020, for the
Named Executive Officers.
|
Name
|
|
Number of Securities Underlying Unexercised
Options (#) Exercisable(8)
|
|
Number of Securities Underlying Unexercised Options (#)
Unexercisable
|
|
Option Exercise Price ($)
|
|
Option Expiration Date
|
|
Timothy
A. Vitou
|
|
5,000(1)
|
|
—
|
|
2.23
|
|
3/12/23
|
|
|
|
15,000(2)
|
|
10,000
|
|
5.10
|
|
3/17/27
|
|
|
|
6,000(3)
|
|
4,000
|
|
4.20
|
|
8/30/27
|
|
|
|
12,000(4)
|
|
18,000
|
|
3.75
|
|
3/14/28
|
|
|
|
6,000(6)
|
|
24,000
|
|
4.07
|
|
3/05/29
|
|
|
|
|
|
|
|
|
|
|
|
William
P. Kelly
|
|
15,000(1)
|
|
—
|
|
2.23
|
|
3/12/23
|
|
|
|
8,000(5)
|
|
2,000
|
|
3.83
|
|
2/24/26
|
|
|
|
15,000(2)
|
|
10,000
|
|
5.10
|
|
3/17/27
|
|
|
|
6,000(3)
|
|
4,000
|
|
4.20
|
|
8/30/27
|
|
|
|
8,000(4)
|
|
12,000
|
|
3.75
|
|
3/14/28
|
|
|
|
4,000(6)
|
|
16,000
|
|
4.07
|
|
3/05/29
|
|
|
|
|
|
|
|
|
|
|
|
Randy Willis
|
|
15,000(3)
|
|
10,000
|
|
4.20
|
|
8/30/27
|
|
|
|
8,000(4)
|
|
12,000
|
|
3.75
|
|
3/14/28
|
|
|
|
4,000(6)
|
|
16,000
|
|
4.07
|
|
3/05/29
|
|
|
|
|
|
|
|
|
|
|
|
Branko Avanic
|
|
6,000(7)
|
|
24,000
|
|
3.61
|
|
10/30/29
|
___________
(1)
The options were
granted on March 12, 2013, and are fully vested and
exercisable.
(2)
The options were
granted on March 17, 2017, and vest in five equal annual
installments, beginning on March 17, 2018.
(3)
The options were
granted on August 30, 2017, and vest in five equal annual
installments, beginning on August 30, 2018.
(4)
The options were
granted on March 14, 2018, and vest in five equal annual
installments, beginning on March 14, 2019.
(5)
The options were
granted on February 24, 2016, and vest in five equal annual
installments, beginning on February 24, 2017.
(6)
The options were
granted on March 5, 2019, and vest in five equal annual
installments, beginning on March 5, 2020.
(7)
The options were
granted on October 30, 2019, and vest in five equal annual
installments, beginning on October 30, 2020.
(8)
None of the Named
Executive Officers exercised any options during fiscal
2020.
RETIREMENT BENEFITS FOR 2020
We
do not have a defined benefit plan for the Named Executive Officers
or other employees. The only retirement plan available to the Named
Executive Officers in 2020 was the qualified 401(k) retirement
plan, which is available to all employees.
POTENTIAL PAYMENTS UPON TERMINATION OR IN CONNECTION WITH A CHANGE
OF CONTROL
Employment Agreements
On
March 20, 2019, the Company entered into the March 2019 Employment
Agreements, which, following the Reorganization, are with BK
Technologies, Inc., our wholly-owned subsidiary. In addition, BK
Technologies, Inc. entered into the Avanic Employment Agreement,
executed November 5, 2019. The Employment Agreements provide
for severance payments in the event the Named Executive
Officer’s employment is terminated by the Company without
“cause.” Each Named Executive Officer will be entitled
to an amount equal to six months (twelve months for Mr. Vitou) of
his base salary in effect at the time of termination or the
original base salary set forth in his respective Employment
Agreement, whichever is greater.
Any
severance payable to a Named Executive Officer under his Employment
Agreement will be paid by the Company over a twelve-month period in
accordance with the Company’s normal payroll practices and
subject to applicable law. None of the Named Executive Officers
will be entitled to severance payments in the event he is
terminated for “cause.” For purposes of the Employment
Agreements, “cause” will exist if the Named Executive
Officer (i) acts dishonestly or incompetently or engages in willful
misconduct in performance of his executive duties, (ii) breaches
the Named Executive Officer’s fiduciary duties owed to the
Company, (iii) intentionally fails to perform duties assigned to
him, (iv) is convicted or enters a plea of guilty or nolo
contendere with respect to any felony crime involving dishonesty or
moral turpitude, and/or (v) breaches his obligations under his
Employment Agreement.
Equity Plans and Award Agreements
The
Company’s Equity Plans and award agreements entered into with
its Named Executive Officers include change in control
provisions.
2017 Incentive Compensation Plan – Change in Control
Provisions
Our
2017 Plan generally provides for “double-trigger”
vesting of equity awards in connection with a change in control of
the Company, as described below.
To
the extent that outstanding awards granted under the 2017 Plan are
assumed in connection with a change in control, then, except as
otherwise provided in the applicable award agreement or in another
written agreement with the participant, all outstanding awards will
continue to vest and become exercisable (as applicable) based on
continued service during the remaining vesting period, with
performance-based awards being converted to service-based awards at
the “target” level. Vesting and exercisability (as
applicable) of awards that are assumed in connection with a change
in control generally would be accelerated in full on a
“double-trigger” basis, if, within two years after the
change in control, the participant’s employment is
involuntarily terminated without cause, or by the participant for
“good reason.” Any stock options or stock appreciation
rights (“SARs”) that become vested on a
“double-trigger” basis generally would remain
exercisable for the full duration of the term of the applicable
award.
To
the extent outstanding awards granted under the 2017 Plan are not
assumed in connection with a change in control, then such awards
generally would become vested in full on a
“single-trigger” basis, effective immediately prior to
the change in control, with performance-based awards becoming
vested at the “target” level. Any stock options or SARs
that become vested on a “single-trigger” basis
generally would remain exercisable for the full duration of the
term of the applicable award.
The
compensation committee has the discretion to determine whether or
not any outstanding awards granted under the 2017 Plan will be
assumed by the resulting entity in connection with a change in
control, and the compensation committee has the authority to make
appropriate adjustments in connection with the assumption of any
awards. The compensation committee also has the right to cancel any
outstanding awards in connection with a change in control, in
exchange for a payment in cash or other property (including shares
of the resulting entity) in an amount equal to the excess of the
fair market value of the shares subject to the award over any
exercise price related to the award, including the right to cancel
any “underwater” stock options and SARs without payment
therefor.
For
purposes of the 2017 Plan, subject to exceptions set forth in the
2017 Plan, a “change in control” generally includes (a)
the acquisition of more than 50% of the Company’s common
stock; (b) the incumbent board of directors ceasing to constitute a
majority of the board of directors; (c) a reorganization, merger,
consolidation or similar transaction, or a sale of substantially
all of the Company’s assets; and (d) the complete liquidation
or dissolution of the Company. The full definition of “change
in control” is set forth in the 2017 Plan.
Whether
a participant’s employment has been terminated for
“cause” will be determined by the compensation
committee. Unless otherwise provided in the applicable award
agreement or in another written agreement with the participant,
“cause,” as a reason for termination of a
participant’s employment, generally includes (a) the
participant’s failure to perform, in a reasonable manner, his
or her assigned duties; (b) the participant’s violation or
breach of his or her employment agreement, consulting agreement or
other similar agreement; (c) the participant’s violation or
breach of any non-competition, non-solicitation, non-disclosure
and/or other similar agreement; (d) any act of dishonesty or bad
faith by the participant with respect to the Company or a
subsidiary; (e) the participant’s breach of fiduciary duties
owed to the Company; (f) the use of alcohol, drugs or other similar
substances in a manner that adversely affects the
participant’s work performance; or (g) the
participant’s commission of any act, misdemeanor, or crime
reflecting unfavorably upon the participant or the Company or any
subsidiary.
For
purposes of the 2017 Plan, unless otherwise provided in the
applicable award agreement or in another written agreement with the
participant, “good reason” generally includes (a) the
assignment to the participant of any duties that are inconsistent
in any material respect with his or her duties or responsibilities
as previously assigned by the Company or a subsidiary, or any other
action by the Company or a subsidiary that results in a material
diminution of the participant’s duties or responsibilities,
other than any action that is remedied by the Company or a
subsidiary promptly after receipt of notice from the participant;
or (b) any material failure by the Company or a subsidiary to
comply with its obligations to the participant as agreed upon,
other than an isolated, insubstantial and inadvertent failure which
is remedied by the Company or subsidiary promptly after receipt of
notice from the participant.
Except
as described above with respect to a change in control,
unexercisable stock options generally become forfeited upon
termination of employment. The stock options that are exercisable
at the time of termination of employment expire (a) twelve months
after the termination of employment by reason of death or
disability or (b) three months after the termination of employment
for other reasons. With respect to unvested restricted shares and
RSUs, unless otherwise provided in the applicable award agreement,
the compensation committee, in its sole discretion, may provide for
the full or partial acceleration of vesting of the restricted
shares or RSUs, as applicable, in connection with the termination
of the grantee’s employment for any reason prior to a vesting
date, including, but not limited to, termination of employment as a
result of the grantee’s death or disability. Unless action is
otherwise taken by the compensation committee, any restricted
shares or RSUs that have not yet vested will be forfeited
automatically in the event of the termination of the
grantee’s employment for any reason prior to a vesting
date.
The
Company’s Named Executive Officers, other employees and
directors are prohibited from hedging or pledging the
Company’s securities. Awards granted under the 2017 Plan also
may be subject to forfeiture or recoupment, as provided pursuant to
any compensation recovery (or “clawback”) policy that
the Company may adopt or maintain from time to time.
2007 Incentive Compensation Plan – Change in Control
Provisions
Our
2007 Plan, under which some equity awards remain outstanding, also
contains provisions providing for the vesting of equity awards in
connection with a change in control of the Company, as described
below.
To
the extent that outstanding awards granted under the 2007 Plan are
assumed in connection with a change in control, then, except as
otherwise provided in the applicable award agreement, all
outstanding awards will continue to vest and become exercisable (as
applicable) based on continued service during the remaining vesting
period.
To
the extent outstanding awards granted under the 2007 Plan are not
assumed in connection with a change in control, then such awards
generally would become vested in full on a
“single-trigger” basis in connection with the change in
control. With respect to any outstanding performance-based awards
subject to achievement of performance goals and conditions, the
compensation committee may, in its discretion, deem such
performance goals and conditions as having been met as of the date
of the change in control. Any stock options or SARs that become
vested on a “single-trigger” basis generally would
remain exercisable for the full duration of the term of the
applicable award.
The
compensation committee has the discretion to determine whether or
not any outstanding awards granted under the 2007 Plan will be
assumed by the resulting entity in connection with a change in
control, and the committee has the authority to make appropriate
adjustments in connection with the assumption of any awards. The
committee also has the right to cancel any outstanding awards in
connection with a change in control, in exchange for a payment in
cash or other property (including shares of the resulting entity)
in an amount equal to the excess of the fair market value of the
shares subject to the award over any exercise price related to the
award, including the right to cancel any “underwater”
stock options and SARs without payment therefor.
For
purposes of the 2007 Plan, subject to exceptions set forth in the
2007 Plan, a “change in control” generally includes:
(a) the acquisition of more than 50% of the Company’s common
stock; (b) the incumbent board of directors ceasing to constitute a
majority of the board of directors; (c) a reorganization, merger,
consolidation or similar transaction, or a sale of substantially
all of the Company’s assets; and (d) the complete liquidation
or dissolution of the Company. The full definition of “change
in control” is set forth in the 2007 Plan.
DIRECTOR COMPENSATION FOR 2020
Director Compensation Program
On
September 6, 2018, the Board, upon the recommendation of the
compensation committee, adopted a new director compensation program
for all non-employee directors, effective as of September 1, 2018.
The program was adopted to remain competitive in attracting and
retaining qualified Board members and to better align director
compensation to other public companies of comparable size to the
Company.
Under
the program, each non-employee director receives an annual retainer
fee of $50,000, payable in quarterly cash installments. Each
non-employee director also receives an annual grant of RSUs with a
value of $40,000 pursuant to the 2017 Plan. Each RSU represents a
contingent right to receive one share of our common stock. The RSUs
vest in five equal annual installments, beginning with the first
anniversary of the grant date, subject to the recipient’s
continued service as a director of the Company through such date,
provided that, if the director makes himself available and consents
to be nominated by the Company for continued service as a director
of the Company, but is not nominated for the Board of Directors for
election by stockholders, other than for good reason, as determined
by the Board in its discretion, then the RSUs will vest in full as
of the director’s last date of service as a director of the
Company.
In
addition, the director compensation program provides for an
additional annual cash retainer of $3,000, payable in quarterly
cash installments, for each Board committee served on, or an
additional annual cash retainer of $10,000, payable in quarterly
cash installments, per committee for service as committee chairman.
On April 27, 2020, the compensation committee approved an
additional cash retainer of $75,000 for the Chairman of the Board,
payable in quarterly cash installments. All non-employee
directors are entitled to reimbursement of reasonable out-of-pocket
expenses incurred by them in connection with their attendance at
meetings of the Board and any committee thereof on which they
serve. If a non-employee director does not serve on the Board or a
Board committee, or as Chairman or as a Board committee chairman,
for the full year, the Board and any applicable Board committee,
Board Chairman, and any Board committee chairman retainers are
prorated for the portion of the year served. If a non-employee
director joins the Board after the grant of RSUs for that year, the
non-employee director’s grant of RSUs will be prorated for
the portion of the year to be served.
Our
2017 Plan provides that the aggregate grant date fair value of all
awards granted to any single non-employee director during any
single calendar year (determined as of the applicable grant date(s)
under applicable financial accounting rules), taken together with
any cash fees paid to the non-employee director during the same
calendar year, may not exceed $200,000.
The
following table shows the compensation paid to our non-employee
directors for fiscal 2020:
|
Fees
Earned or Paid in Cash ($)
|
|
|
|
John W.
Struble(2)
|
111,000
|
40,000
|
151,000
|
|
D. Kyle
Cerminara(2)
|
68,750
|
40,000
|
108,750
|
|
Michael R.
Dill(2)
|
66,750
|
40,000
|
106,750
|
|
Charles T.
Lanktree(2)(3)
|
70,750
|
40,000
|
110,750
|
|
E. Gray
Payne(2)(3)
|
87,750
|
40,000
|
127,750
|
|
Lewis M.
Johnson(2)(4)
|
68,750
|
40,000
|
108,750
|
|
Ryan R.K.
Turner(2)(5)
|
14,000
|
—
|
14,000
|
_________________
(1)
Stock awards
represent the aggregate grant date fair value of 13,157 RSUs
granted on August 24, 2020, to each of the non-employee directors
(excluding Mr. Turner who resigned from the Board on April 24,
2020). The RSUs were granted pursuant to the 2017 Plan and
represent a portion of the compensation payable to our non-employee
directors, as described above. Each RSU represents a contingent
right to receive one share of our common stock. The RSUs vest in
full in five equal annual installments, beginning on the first
anniversary of the grant date, subject to the director’s
continued service as a director of the Company through such date,
provided that, if the director makes himself available and consents
to be nominated by the Company for continued service as a director
of the Company, but is not nominated for the Board for election by
stockholders, other than for good reason, as determined by the
Board in its discretion, then the RSUs shall vest in full as of the
director’s last date of service as a director of the Company.
In addition, the 2017 Plan and the RSU award agreements grant the
compensation committee the discretion to accelerate vesting of the
RSUs upon the occurrence of a “change in control” (as
defined under the 2017 Plan) or in connection with the termination
of the director’s service for any reason prior to the vesting
date.
The
amounts shown represent the aggregate grant date fair value
computed in accordance with FASB Accounting Standards Codification
(ASC) Topic 718 “Compensation-Stock Compensation”
(“FASB ASC Topic 718”). For a discussion of valuation
assumptions, see Note 1 (Summary of Significant Accounting
Policies) and Note 10 (Share-Based Employee Compensation) of our
consolidated financial statements included in our Annual Report on
Form 10-K for fiscal 2020.
(2)
The aggregate
number of option and stock awards outstanding (including exercised
and unexercised stock options and unvested RSUs) as of December 31,
2020, for each non-employee director was as follows:
|
Name
|
|
Option Awards (#)
|
|
Stock Awards (#)
|
|
John W.
Struble
|
|
—
|
|
24,505RSUs
|
|
D. Kyle Cerminara
|
|
5,000 (all exercisable)
|
|
24,505 RSUs
|
|
Michael
R. Dill
|
|
—
|
|
24,505 RSUs
|
|
Charles
T. Lanktree
|
|
—
|
|
24,505 RSUs
|
|
E. Gray
Payne
|
|
5,000 (all exercisable)
|
|
24,505 RSUs
|
|
Lewis
M. Johnson
|
|
5,000 (all exercisable)
|
|
24,505 RSUs
|
|
Ryan
R.K. Turner
|
|
—
|
|
—
|
The
24,506 RSUs outstanding for each director listed above as of
December 31, 2020 include 3,037 RSUs remaining pursuant to a grant
made on September 6, 2018 (not including 2,026 RSUs that vested
prior to December 31, 2020), 8,311 RSUs granted on September 6,
2019 (not including 2,078 RSUs that vested prior to December 31,
2020) and 13,157 RSUs remaining pursuant to a grant made on August
24, 2020. Such RSUs vest in full in five equal annual installments,
beginning on the first anniversary of the respective grant date, in
each case subject to the director’s continued service as a
director of the Company through such date, provided that, if the
director makes himself available and consents to be nominated by
the Company for continued service as a director of the Company, but
is not nominated for the Board of directors for election by
stockholders, other than for good reason, as determined by the
Board in its discretion, then the RSUs will vest in full as of the
director’s last date of service as a director of the Company.
See footnote 1 above for more information.
(3)
Amount includes
fees ($13,250 for Mr. Lanktree and $16,500 for General Payne)
earned for Board and committee service in the fourth quarter of
fiscal 2019 that were paid in January 2020.
(4)
On March 2, 2021,
Lewis M. Johnson resigned from the Board, effective immediately.
On the same day, the compensation
committee approved the accelerated vesting of all of his
outstanding RSUs as of that date.
(5)
On April 24, 2020,
Mr. Turner resigned from the Board, effective immediately.
On the same day, the compensation
committee approved the accelerated vesting of all of his
outstanding RSUs as of that date.
Compensation Committee Interlocks and Insider
Participation
The
Compensation Committee of the Board of Directors consists of
Messrs. Dill (Chair), Lanktree, and General Payne, none of whom has
been at any time an executive officer or employee of the Company,
or has any relationship requiring disclosure under Item 404 of
Regulation S-K. None of our executive officers serves, or in the
past has served, on the board of directors, or as a member of the
compensation committee (or other committee performing an equivalent
function) of the board of directors of any entity that has one or
more executive officers who serve as members of our Board of
Directors or Compensation Committee.
Compensation Committee Report
The following report of the Compensation Committee shall not be
deemed to be “soliciting material” or to be
“filed” with the Securities and Exchange Commission,
nor shall this report be incorporated by reference into any filing
made by the Company under the Securities Act of 1933, as amended,
or the Exchange Act.
The
Compensation Committee has reviewed and discussed the executive
compensation, as disclosed above, with management. Based on this
review and those discussions, the Compensation Committee
recommended that the executive compensation be included in this
report.
Compensation
Committee
Michael
R. Dill (Chair)
Charles
T. Lanktree
E.
Gray Payne
April
23, 2021
Item
12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
BENEFICIAL OWNERSHIP OF SECURITIES
The table below sets forth information regarding the
beneficial ownership of our common stock as of April 23, 2021, by
the following individuals or groups:
●
each person who is
known by us to own beneficially more than 5% of our common
stock;
●
each of our named
executive officers identified in the “Summary Compensation Table For
2019-2020” appearing in
this report (the “Named Executive Officers”);
and
●
all of our current
directors and executive officers as a group.
Beneficial
ownership is determined in accordance with the rules of the SEC and
generally includes voting or investment power with respect to
securities. Shares of our common stock that are subject to our
stock options that are presently exercisable or exercisable within
60 days of April 23, 2021, as well as shares of common stock
issuable within 60 days of April 23, 2021, upon vesting of
restricted stock units (“RSUs”), are deemed to be
outstanding and beneficially owned by the person holding the stock
options or RSUs, as applicable, for the purpose of computing the
percentage of ownership of that person, but are not treated as
outstanding for the purpose of computing the percentage of any
other person.
Unless
indicated otherwise below, the address of our directors and
executive officers is c/o BK Technologies Corporation, 7100
Technology Drive, West Melbourne, Florida 32904. Except as
indicated below, the persons named in the table have sole voting
and investment power with respect to all shares of common stock
beneficially owned by them. As of April 23, 2021, we had
outstanding12,536,471 shares of our common stock.
|
|
|
Shares of Common
Stock Beneficially Owned
|
|
Name and Address
of Beneficial Owner
|
|
Number of
Shares
|
|
Percent of
Class
|
|
Beneficial Owners of More Than 5% of Our Common Stock:
|
|
|
|
|
|
Fundamental
Global Investors, LLC
|
|
3,394,383(1)
|
|
27.08%
|
|
D. Kyle
Cerminara, Director
|
|
3,394,383(1)(2)(6)(9)
|
|
27.08%
|
|
Benchmark
Capital Advisors
|
|
1,526,473(3)
|
|
12.18%
|
|
Donald
F.U. Goebert
|
|
1,264,508(4)
|
|
10.09%
|
|
Renaissance
Technologies LLC
|
|
705,583(5)
|
|
5.63%
|
|
|
|
|
|
|
|
Directors and Named Executive Officers (not otherwise included
above):
|
|
|
|
|
|
Timothy
A. Vitou, President
|
|
93,500(6)(9)
|
|
*
|
|
William
P. Kelly, Executive Vice President and Chief Financial
Officer
|
|
97,827(6)(7)(9)
|
|
*
|
|
Randy
Willis, Chief Operating Officer
|
|
35,000(6)(9)
|
|
*
|
|
Branko
Avanic, Chief Technology Officer
|
|
6,000(6)(9)
|
|
*
|
|
Michael
R. Dill, Director
|
|
15,062(9)
|
|
*
|
|
Charles
T. Lanktree, Director
|
|
22,764(8)(9)
|
|
*
|
|
E. Gray
Payne, Director
|
|
20,062(6)(9)
|
|
*
|
|
John W.
Struble, Director and Chairman of the Board
|
|
15,062
(9)
|
|
*
|
|
|
|
|
|
|
|
All current directors and executive officers as a group (9
persons)
|
|
3,699,660(9)
|
|
29.51%
|
______________
*Less
than 1%
(1)
The amount shown
and the following information is derived from a Form 4 filed by
Fundamental Global Investors, LLC (“Fundamental
Global”) and its affiliates on September 14, 2020.
Fundamental Global is deemed to beneficially own the shares
disclosed as directly owned by certain of its affiliates. In
addition, D. Kyle Cerminara, a member of our Board, and affiliate
of Fundamental Global, holds an additional 20,062 shares of common
stock (including exercisable options), which increases the total
number of shares beneficially owned by Fundamental Global to
3,394,383, or 27.08% of outstanding shares. Fundamental Global has
shared voting and dispositive power with respect to all such
shares. Fundamental Global, on behalf of the funds managed by it,
has entered into a stock trading plan in accordance with Rule
10b5-1 (the “10b5-1 Plan”) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), for the
purchase of up to 1.0 million shares of the Company’s common
stock. The 10b5-1 Plan became effective on April 2, 2020 and
terminated on April 2, 2021. Transactions under the 10b5-1 Plan are
reported to the SEC in accordance with applicable securities laws,
rules and regulations. Fundamental Global’s business address
is 4201 Congress Street, Suite 140, Charlotte, North Carolina
28209.
(2)
Mr. Cerminara is
the Chief Executive Officer, Co-Founder and Partner of Fundamental
Global. Due to his positions with Fundamental Global, Mr. Cerminara
is deemed to beneficially own the 3,374,321 shares disclosed as
directly owned by certain affiliates of Fundamental Global. Mr.
Cerminara expressly disclaims beneficial ownership of these shares.
The business addresses for Mr. Cerminara are c/o Fundamental Global
Investors, LLC, 4201 Congress Street, Suite 140, Charlotte, North
Carolina 28209; c/o Ballantyne Strong, Inc., 4201 Congress Street,
Suite 175, Charlotte, North Carolina 28209; and 131 Plantation
Ridge Drive, Suite 100, Mooresville, North Carolina
28117.
(3)
The amount shown
and the following information is derived from a Schedule 13G/A
filed by Benchmark Capital Advisors (“Benchmark”) on
April 27, 2018. According to the Schedule 13G/A, Benchmark
beneficially owns 1,526,473 shares, and has sole voting and
dispositive power with respect to 933,924 of these shares and
shared voting and dispositive power with respect to 592,549 of
these shares. Benchmark’s business address is 14 Wall Street,
Suite 2087, New York, New York 10005.
(4)
The amount shown is
based on Mr. Goebert’s Form 4 filed on December 30, 2016,
plus 6,225 shares acquired upon option exercises since the filing
of the Form 4, and reflects the repurchase by the Company on
December 12, 2018 of 200,000 shares of common stock held by Mr.
Goebert. Mr. Goebert’s primary address is 3382 Harbor Road
S., Tequesta, Florida 33469.
(5)
The amount shown
and the following information is derived from a Schedule 13G/A
filed by Renaissance Technologies LLC (“RTC”) on
February 11, 2021. According to the Schedule 13G/A, RTC
beneficially owns 705,583 shares, over which it has sole voting and
dispositive power. Renaissance Technologies Holdings Corporation
(“RTHC”) may also be deemed to beneficially own, and
have sole voting and dispositive power over, such shares, due to
its majority ownership of RTC. The principal business address of
both RTC and RTHC is 800 Third Avenue, New York, New York
10022.
(6)
Share ownership of
the following persons includes options to purchase our common
shares presently exercisable or exercisable within 60 days of April
23, 2021, as follows: for Mr. Cerminara – 10,000 shares; for
Mr. Johnson – 5,000 shares; for Mr. Vitou – 61,000
shares; for Mr. Kelly – 67,000 shares; for Mr. Willis –
35,000 shares; for Dr. Avanic – 6,000 shares; and for General
Payne – 5,000 shares.
(7)
Includes 26,827
shares held jointly by Mr. Kelly with his wife.
(8)
Includes 7,702
shares directly owned by the Donna B. Lanktree Family Trust, the
trustee of which is Donna B. Lanktree, the spouse of Mr.
Lanktree.
(9)
Includes 3,374,321
shares reported as beneficially owned by Fundamental Global, of
which Mr. Cerminara is deemed to have beneficial ownership by
virtue of his position with Fundamental Global. Includes 26,827
shares held jointly by Mr. Kelly with his wife. Includes 7,702
shares directly owned by the Donna B. Lanktree Family Trust, the
trustee of which is Donna B. Lanktree, the spouse of Mr. Lanktree.
Includes options to purchase common shares presently exercisable or
exercisable within 60 days of April 23, 2021, as follows: for Mr.
Cerminara – 10,000 shares; for Mr. Johnson – 5,000
shares; for Mr. Vitou – 61,000 shares; for Mr. Kelly –
71,000 shares; for Mr. Willis – 35,000 shares; for Dr. Avanic
– 6,000 shares; and for General Payne – 5,000
shares.
The
following options are not reflected in the table, as they are not
presently exercisable or exercisable within 60 days of April 23,
2021: options to purchase 39,000 common shares held by Mr. Vitou;
options to purchase 29,000 common shares held by Mr. Kelly; options
to purchase 30,000 shares held by Mr. Willis; and options to
purchase 24,000 common shares held by Dr. Avanic.
The
table also does not include the following RSUs held by each of
Messrs. Cerminara, Johnson, Dill, Lanktree, Struble, Turner, and
General Payne: 3,037 RSUs remaining pursuant to a grant made on
September 6, 2018 (not including 1,013 RSUs that vested as of
September 6, 2019 and 1,013 RSUs that vested as of September 6,
2020); 8,311 RSUs granted on September 6, 2019 (not including 2,078
RSUs that vested as of September 6, 2020); and 13,245 RSUs granted
on August 24, 2020. The RSUs vest in five equal annual
installments, beginning on the first anniversary of the respective
grant date, in each case subject to the director’s continued
service as a director of the Company through such date. All RSUs
were granted under the Company’s 2017 Incentive Compensation
Plan (the “2017 Plan”). Each RSU represents a
contingent right to receive one share of common stock of the
Company.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of
December 31, 2020, with respect to our 2017 Plan, under which our
common stock is authorized for issuance, and the 2007 Plan. Our
stockholders approved the 2017 Plan at the 2017 annual
stockholders’ meeting. On December 31, 2020, 388,035 shares
of our common stock were available for issuance under the 2017
Plan.
|
Plan Category
|
|
(a)
Number of securities to be issued upon exercise of outstanding
options, warrants and rights(1)
|
|
(b)
Weighted-average exercise price of outstanding options, warrants
and rights
|
|
(c)
Number of securities remaining available for future issuance under
equity compensation plan (excluding securities reflected in column
(a))(2)
|
|
Equity
compensation plans approved by security holders
|
|
611,965
|
|
$3.96
|
|
388,035
|
|
Equity
compensation plans not approved by security holders
|
|
—
|
|
—
|
|
—
|
|
Total
|
|
611,965
|
|
$3.96
|
|
388,035
|
(1)
Includes
461,965 shares issuable upon the exercise or vesting of awards
(including stock options and restricted stock units) outstanding
under the 2017 Plan and 150,000 shares issuable upon the exercise
of awards outstanding under the 2007 Plan.
(2)
Represents
shares available for issuance under the 2017 Plan.
Item
13. Certain Relationships and Related Transactions, and
Director Independence
TRANSACTIONS WITH RELATED PERSONS
Any
transaction with a related person is subject to our written policy
for transactions with related persons, which is available on our
website at www.bktechnologies.com/investor-relations. The audit
committee is responsible for applying this policy. As set forth in
the policy, the audit committee reviews the material facts of the
transaction and considers, among other factors it deems
appropriate, whether the transaction is on terms no less favorable
than terms generally available to an unaffiliated third-party under
the same or similar circumstances and the extent of the related
person’s interest in the transaction. The policy also
prohibits our directors from participating in any discussion or
approval of any interested transaction for which he is a related
person, except that the director is required to provide all
material information concerning the transaction to the
committee.
If
a transaction with a related party will be ongoing, the audit
committee will establish guidelines for our management to follow in
our ongoing relationships with the related person, will review and
assess ongoing relationships with the related person to determine
if such relationships are in compliance with the audit
committee’s guidelines, and, based on all the relevant facts
and circumstances, will determine if it is in the best interests of
us and our stockholders to continue, modify or terminate any such
interested transaction.
The
policy provides exceptions for certain transactions, including (i)
those involving compensation paid to a director or executive
officer required to be reported in the Company’s proxy
statement, (ii) transactions with another company at which a
related person’s only relationship is as an employee (other
than an executive officer), director or beneficial owner of less
than 10% of that company’s shares, if the aggregate amount
involved does not exceed the greater of $500,000 or two percent
(2%) of that company’s total annual revenues, (iii) certain
charitable contributions, (iv) transactions where all of our
stockholders receive proportional benefits, (v) transactions
involving competitive bids, (vi) certain regulated transactions,
and (vii) certain banking-related services.
Except
as set forth below, during 2020 and 2019, we did not have any
transactions with related persons that were reportable under Item
404 of Regulation S-K, and we do not have any transactions with
related persons currently proposed for 2020 that are reportable
under Item 404 of Regulation S-K.
Fundamental Global Investors, LLC
Fundamental
Global, together with its affiliates, is the largest stockholder of
the Company. Mr. Cerminara, a member of our Board of Directors, is
Chief Executive Officer, Co-Founder and Partner of Fundamental
Global. In addition, Mr. Struble, Chairman of the Board, serves as
a consultant to Fundamental Global Management, LLC, an affiliate of
Fundamental Global. The funds managed by Fundamental Global,
including the funds that directly own shares of our common stock,
have agreed to indemnify Fundamental Global and its principals,
including Mr. Cerminara, or any other person designated by
Fundamental Global, for claims arising from Mr. Cerminara’s
service on our Board of Directors, provided that a fund’s
indemnity obligations are secondary to any obligations we may have
with respect to Mr. Cerminara’s service on our Board of
Directors.
In
addition, we have an investment in a limited partnership, FGI 1347
Holdings, LP, of which we are the sole limited partner. FGI 1347
Holdings, LP was established for the purpose of investing in
securities using a portion of the proceeds from our previously
successful investment in Iteris, Inc. (Nasdaq: ITI), which was
liquidated for a substantial gain. Affiliates of Fundamental Global
serve as the general partner and investment manager of FGI 1347
Holdings, LP. During 2020, FGI 1347 Holdings, LP incurred total
expenses of $81,428 related to audit, legal and other professional
services that were paid by the limited partnership directly to the
third-parties for services rendered on behalf of the limited
partnership. Fundamental Global has not received any management
fees or performance fees for its services to the limited
partnership. Principals of Fundamental Global serve on the board of
directors of portfolio companies and receive compensation for their
service.
DIRECTOR INDEPENDENCE
The
NYSE American corporate governance listing standards provide
that the Company, as a smaller reporting company, may have a board
of directors consisting of at least fifty percent (50%) independent
directors. Our Board of Directors reviews the relationships that
each director has with us and other parties. Only those directors
who do not have any of the categorical relationships that preclude
them from being independent within the independence requirements of
the NYSE American corporate governance listing standards and who
the Board of Directors affirmatively determines have no
relationships that would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director are
considered to be independent directors. The Board of Directors
reviews a number of factors to evaluate the independence of each of
its members. These factors include its members’ current and
historic relationships with us and our subsidiaries; their
relationships with management and other directors; the
relationships their current and former employers have with us and
our subsidiaries; and the relationships between us and other
companies of which our Board members are directors or executive
officers. The Board of Directors reviewed the various factors
described above in April 2021, including an evaluation of the
holdings of Fundamental Global, one of our most significant
stockholders, and Mr. Cerminara’s positions as its Chief
Executive Officer, Co-Founder and Partner, as well as Mr.
Struble’s role as consultant to Fundamental Global
Management, LLC, and our investment in FG Financial Group, Inc. (Nasdaq: FGF),
through our investment in FGI 1347 Holdings, LP, a consolidated
variable interest entity of which we are the sole limited partner.
Pursuant to such evaluation, the Board of Directors determined that
Messrs. Dill, Lanktree, and General Payne
were “independent” directors within the
independence requirements of the NYSE American corporate governance
listing standards and all applicable rules and regulations of the
SEC. All Board committee members during 2020 were, and all current
Board committee members are, independent for the purpose of the
committees on which they served or serve.
Independent members
of our Board of Directors meet in executive session without the
presence of non-independent directors and management, and are
scheduled to do so at least once per year.
Item 14. Principal Accounting Fees
and Services
MSL,
an independent registered public accounting firm, audited our
financial statements for fiscal 2020 and fiscal 2019. We had no
disagreements with MSL on accounting and financial disclosures.
MSL’s work on our audit for fiscal 2020 was performed by full
time, permanent employees and partners of MSL.
MSL has served as our independent registered
public accounting firm since November 2015. The rules of the
SEC require us to disclose fees billed by our independent
registered public accounting firm for services rendered to us for
each of the years ended December 31, 2020 and 2019. The following
table represents aggregate fees billed for the fiscal years ended
December 31, 2020 and 2019 by MSL.
|
Fees(1)(2)(3)(4)
|
|
|
|
Audit
Fees
|
$152,500
|
$142,040
|
|
Audited-Related
Fees
|
—
|
—
|
|
Tax
Fees
|
—
|
—
|
|
All
Other Fees
|
—
|
—
|
|
Total
|
$152,500
|
$142,040
|
(1)
For
2020 and 2019, includes fees paid to MSL for professional services
rendered for the audit of our annual financial statements for the
years ended December 31, 2020 and 2019 and for reviews of the
financial statements included in our Quarterly Reports on Form 10-Q
for the fiscal quarters ended March 31, June 30 and September 30 in
each of those years. For 2020, also includes fees related to
services rendered in connection with issuance of a consent related
to our registration statement on Form S-3 filed in December 2020.
For 2019, also includes fees related to services rendered in
connection with issuance of a consent related to our registration
statements on Form S-8.
(2)
No
audit-related services were performed for us by MSL in 2020 or
2019. Audit-related services include assurance and related services
that are related to the performance of the audit or review of our
financial statements.
(3)
No
tax services were performed for us by MSL in 2020 or 2019. Tax
services include tax compliance, tax advice and tax
planning.
(4)
No
other services were performed for us by MSL in 2020 or
2019.
The
audit committee has adopted a formal policy concerning approval of
audit and non-audit services to be provided to us by our
independent registered public accounting firm, MSL. The policy
requires that all services to be provided by MSL, including audit
services and permitted audit-related and non-audit services, must
be pre-approved by the audit committee. The audit committee
approved all audit services provided by MSL to us during 2020. MSL
did not provide any audit-related or non-audit services to us
during 2020. The audit committee has determined that the provision
of the services by MSL reported hereunder had no impact on its
independence.
Item 15. Exhibits and Financial Statement
Schedules
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No.
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Item
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Certification
of the Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
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Certification
of the Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
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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.
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BK TECHNOLOGIES CORPORATION
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By:
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/s/
Timothy A. Vitou
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Timothy
A. Vitou
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President
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Date:
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April
26, 2021
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