UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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RCM TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
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Nevada
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95--1480559
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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2500 McClellan Avenue, Suite 350,
Pennsauken, New Jersey
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08109-4613
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant's telephone number, including area code:
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(856) 356-4500
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Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Trading Symbol
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.05 per share
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RCMT
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The NASDAQ Stock Market LLC
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Securities registered pursuant to Section 12(g) of the Act:
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None
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Large Accelerated Filer [ ]
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Accelerated Filer [ ]
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Non-Accelerated Filer [X]
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Smaller
Reporting
Company [X]
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Emerging
Growth
Company [ ]
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RCM TECHNOLOGIES, INC.
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FORM 10-K/A
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TABLE OF CONTENTS
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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1
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Item 11.
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Executive Compensation
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6
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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12
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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14
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Item 14.
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Principal Accounting Fees and Services
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15
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PART IV
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Item 15.
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Exhibits and Financial Statement Schedules
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16
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PART III
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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE (CONTINUED)
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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE (CONTINUED)
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Name
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Age
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Position
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Bradley S. Vizi
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36
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Executive Chairman & President
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Kevin D. Miller
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53
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Chief Financial Officer, Treasurer and Secretary
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Michael Boyle
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48
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Division President, Information Technology Services
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Frank Petraglia
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64
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Division President, Engineering Services
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Michael Saks
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63
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Division President, Health Care Services
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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE (CONTINUED)
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Committee
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Board Member
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Audit
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Compensation
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Nominating &
Corporate
Governance
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Roger H. Ballou
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X(1)
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X
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X
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Richard A. Genovese
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X
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X
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X(1)
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Swarna Kakodkar
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X
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Leon Kopyt
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S. Gary Snodgrass
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X
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X(1)
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X
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Bradley S. Vizi
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(1)
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Chairman
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•
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Reviews our financial and accounting practices, controls and results, reviews the scope and services of our auditors and appoints our independent auditors.
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•
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Review and approve related parties transactions.
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•
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Determines the compensation of our officers and employees.
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•
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Administers our stock option plans.
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•
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Oversees the Board’s review and consideration of shareholder recommendations for Director candidates.
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•
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Oversees the Board's annual self-evaluation.
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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE (CONTINUED)
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ITEM 11. EXECUTIVE COMPENSATION
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•
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Limiting executive severance cash pay-outs to no more than 24 months’ base salary and bonus;
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•
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Prohibiting tax gross-ups in all future employment agreements;
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•
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Requiring future employment agreements to contain a “double trigger” with respect to executive change-in-control payments;
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•
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Adopting an incentive payment claw back policy for named executive officers; and
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•
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Developed the conceptual framework for a long term incentive plan containing performance-based stock units for the Company’s Chief Executive Officer and Chief Financial Officer.
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ITEM 11. EXECUTIVE COMPENSATION (CONTINUED)
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Name and
Principal Position
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Year
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Salary
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Stock
Awards(1)
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Non-Equity
Incentive Plan
Compensation
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All Other
Compensation(2)
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Total
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Bradley S. Vizi(3)
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2019
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$250,000
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$175,200
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$ -
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$4,890
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$430,090
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Executive Chairman & President
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2018
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$135,577
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$331,955
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$ -
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$23,076
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$490,608
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Michael Saks
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2019
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$275,000
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$ -
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$244,678
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$20,547
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$540,225
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President, Health Care Services
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2018
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$275,000
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$ -
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$175,000
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$31,090
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$481,090
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Kevin Miller
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2019
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$370,000
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$ -
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$ -
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$36,832
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$406,832
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Chief Financial Officer
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2018
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$370,000
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34,200
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$ -
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$59,213
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$463,413
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(1)
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Mr. Vizi vested in 40,000 shares in January 2020, pursuant to a performance-based stock award based on fiscal 2019 performance metrics granted on March 6, 2019. Mr. Vizi vested in 47,148
shares in January 2019, pursuant to a performance-based stock award based on fiscal 2018 performance metrics granted on October 23, 2018. Mr. Vizi was also granted time-based restricted stock awards for 15,000 shares on June 1, 2018 and
20,000 shares on December 14, 2018. Mr. Miller was granted 10,000 shares in compensation for fiscal 2018. These amounts are based upon the grant date fair value of the option awards calculated in accordance with Financial Accounting
Standards Board Accounting Standards Codification (“ASC”) Topic 718. The assumptions used in determining the amounts in the column are set forth in Note 11 to our consolidated financial statements in our Annual Report on Form 10-K for the
fiscal year ended December 28, 2019 filed with the Commission.
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(2)
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This amount represents (i) premiums we paid during 2019 for medical, dental, vision, life and disability insurance on each of the officers named in this table as follows: Mr. Vizi: $4,890;
Mr. Saks: $20,547; and Mr. Miller $36,832 and (ii) the following approximated amounts for Company leased automobiles or monthly automobile allowances and related expenses: Mr. Saks: $1,246.
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(3)
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Mr. Vizi was appointed Executive Chairman and President on June 1, 2018.
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ITEM 11. EXECUTIVE COMPENSATION (CONTINUED)
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Number of
Shares or
Units of
Stock
That Have
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Market Value of
Shares or
Units of
Stock
That Have
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Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
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Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
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Name
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Not Vested
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Not Vested(1)
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Not Vested(2)
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Not Vested(1)
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Bradley S. Vizi(3)
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20,000
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$57,400
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160,000
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$459,200
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Michael Saks
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Kevin Miller
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(1)
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Calculated by multiplying the number of shares in the preceding column by $2.87, the closing price per share of the Company’s common stock on December 27, 2019, the last trading day of our last fiscal year.
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(2)
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Consists of performance-based restricted share units of 160,000 awarded to Mr. Vizi on March 6, 2019, assuming achievement of the applicable performance goals at the target level of achievement. Of this
amount, 80,000 were to be earned based on achievement of the performance goals measured over the performance period beginning on December 30, 2018 and ending on December 28, 2019. On January 16, 2020, the Compensation Committee certified
the results under the portion of this grant and a total of 40,000 PSUs, with a grant date fair value of $175,200, vested with respect to this portion of the award. This amount is reflected in the Summary Compensation Table.
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(3)
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Mr. Vizi was appointed Executive Chairman and President on June 1, 2018.
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•
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Annual cash retainer of $45,000, payable in equal monthly installments.
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•
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No meeting fees.
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ITEM 11. EXECUTIVE COMPENSATION (CONTINUED)
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•
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Annual equity grants of $45,000, in the form of RSUs with 1-year vesting feature (subject to acceleration upon Change in Control or separation from service in the same manner as the RSU
grants made in December 2017), with delivery of the shares of common stock underlying to such RSUs to be made upon vesting; provided that, except for sales of shares in an amount no greater than required to generate an amount equal to the
income tax on such shares, non-employee directors shall be required to retain shares delivered upon vesting unless, immediately following any such sale, such director would comply with the Company’s ownership guidelines.
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•
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Payment of the following additional annual retainers: Chairman of the Board (if independent) $25,000; Lead Independent Director $25,000 (who shall serve only at such time as the Board
does not have an independent chair); Audit Committee chair $10,000; Compensation Committee chair $10,000; Nominating and Corporate Governance Committee chair $5,000.
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•
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No other committee fees, for service or for meetings.
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Name and
Principal Position
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Fees
Earned
Or Paid
In Cash
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Equity
Awards(1)
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All Other
Compensation
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Total
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Roger H. Ballou
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$80,000
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$45,000
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-
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$125,000
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Richard A. Genovese
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$50,000
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$45,000
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$95,000
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Swarna Kakodkar(2)
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$2,298
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$45,000
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$47,298
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Leon Kopyt
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$45,000
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$45,000
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-
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$90,000
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S. Gary Snodgrass
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$55,000
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$45,000
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-
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$100,000
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(2)
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Ms. Kakodkar was elected to the Board on December 13, 2019.
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ITEM 11. EXECUTIVE COMPENSATION (CONTINUED)
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ITEM 11. EXECUTIVE COMPENSATION (CONTINUED)
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•
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all outstanding Company equity-based awards granted to the covered employee prior to the date of the Change in Control will be immediately fully vested;
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•
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the Compensation Committee may, in its sole discretion, determine that the covered employee will receive a pro-rated annual bonus if (a) the Committee determines that the Change in
Control is an asset sale with respect to an entity in which the covered employee is associated, (b) the covered employee’s employment with the Company terminates in connection with such asset sale, and (c) the covered employee was eligible
to participate in the Company’s annual bonus plan at the time of the Change in Control; any such pro-rated annual bonus will be determined based on the level of achievement under the annual bonus plan at the time of the Change in Control;
and
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•
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the Committee may, in its sole discretion, determine that the covered employee will receive a discretionary bonus upon a Change in Control.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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Name and Address of Beneficial Owner |
Number of Shares
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Approximate
Percentage of Outstanding Common Stock(1) |
IRS Partners No. 19, L.P(2)
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3,270,665
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24.9%
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515 S. Figueroa Street, Suite 1050
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Los Angeles, CA 90071
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Dimensional Fund Advisors LP(3)
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826,298
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6.3%
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Building One
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6300 Bee Cave Road
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Austin, TX 78746
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Renaissance Technologies LLC(4)
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705,462
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5.4%
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800 Third Avenue
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New York, NY 10022
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(1) |
Based on 13,135,970 shares outstanding as of April 18, 2020.
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(2) |
Based on Amendment No. 16 to Schedule 13D (the “Amendment”), filed with the Commission on January 17, 2020, by IRS Partnership No. 19, L.P. (“IRS 19”), The Leonetti/O’Connell Family Foundation (the “Foundation”), M2O, Inc. (“M2O”), The
Michael F. O’Connell and Margo L. O’Connell Revocable Trust (the “Trust”), Michael O’Connell (“Mr. O’Connell” and, collectively with IRS 19, the Foundation, M2O and the Trust, the “O’Connell Entities”), Harvest Financial Corporation
(“Harvest”) and Bradley Vizi (“Mr. Vizi”). The Amendment states that IRS 19, M2O, the Trust and Mr. O’Connell may be deemed to have the shared voting and dispositive power over the 2,692,065 shares owned by IRS 19 and that the Foundation
and Mr. O’Connell may be deemed to have shared voting and dispositive power over 266,074 shares owned by the Foundation. The Amendment also states that Harvest exclusively manages IRS 19’s and the Foundation’s investment in the Common
Shares pursuant to which Mr. Vizi on behalf of Harvest manages such investments. In addition to the Schedule 13D, this amount reflects certain additional information known to the Company regarding Mr. Vizi’s share ownership. As a
result, Harvest and Mr. Vizi may be deemed to have shared dispositive power with respect to the 2,958,139 shares held by IRS 19 and the Foundation. Mr. Vizi has sole voting and dispositive power over 84,526 shares.
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(3) |
Based on Amendment No. 19 to Schedule 13D filed with the Commission on February 12, 2020. The filing states that Dimensional Fund Advisors LP, a registered investment advisor, has sole voting
power over 822,9443 of these shares and sole dispositive power as to all of these shares.
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(4) |
Based on Amendment No. 3 to Schedule 13D filed with the Commission on February 13, 2020. The filing states that Renaissance Technologies LLC has sole voting power over 700,909 of these shares and
sole or shared dispositive power over all of these shares.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS (CONTINUED)
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Name |
Number of Shares
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Approximate
Percentage of Outstanding Common Stock |
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Roger H. Ballou
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73,062
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*
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Richard A. Genovese
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11,968
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*
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Swarna Kakodkar
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-
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*
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Leon Kopyt
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584,702
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4.5%
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S. Gary Snodgrass
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56,608
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*
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Bradley S. Vizi
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162,526
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1.2%
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Michael Saks
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83,343
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*
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Frank Petraglia
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38,277
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*
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Kevin D. Miller
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464,231
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3.5%
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Michael Boyle
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10,000
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*
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All directors and executive officers as a group (10 persons)
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1,484,717
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11.3%
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* |
Represents less than one percent of our outstanding common stock.
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ITEM 13.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
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INDEPENDENCE
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ITEM 14.
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
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PART IV
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ITEM 15.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
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(b)
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Exhibits
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+
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Asset Purchase Agreement, dated November 8, 2018, by and among RCM Technologies (USA), Inc., Thermal Kinetics Engineering, PLLC and Thermal Kinetics Systems, LLC, as Sellers, certain members of Sellers, and,
solely for purposes of being bound by the Parent Guarantee (as defined therein) in such agreement, RCM Technologies, Inc.; incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and
Exchange Commission on November 15, 2018.
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Articles of Incorporation, as amended; incorporated by reference to Exhibit 3(a) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended October 31, 1994, filed with the Securities and Exchange
Commission on January 4, 1995.
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Certificate of Amendment of Articles of Incorporation; incorporated by reference to Exhibit A to the Registrant’s Proxy Statement, dated February 6, 1996, filed with the Securities and Exchange Commission on
January 29, 1996.
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Certificate of Amendment of Articles of Incorporation; incorporated by reference to Exhibit B to the Registrant’s Proxy Statement, dated February 6, 1996, filed with the Securities and Exchange Commission on
January 29, 1996.
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Amended and Restated Bylaws; incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2014 (the “January 2014
8-K”).
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Description of Common Stock filed with the Securities and Exchange Commission on March 5, 2000.
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*
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RCM Technologies, Inc. 2000 Employee Stock Incentive Plan, dated January 6, 2000; incorporated by reference to Exhibit A to the Registrant’s Proxy Statement, dated March 3, 2000, filed with the Securities and
Exchange Commission on February 28, 2000.
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*
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The RCM Technologies, Inc. 2007 Omnibus Equity Compensation Plan; incorporated by reference to Annex A to the Registrant’s Proxy Statement, dated April 20, 2007, filed with the Securities and Exchange
Commission on April 19, 2007.
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*
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Executive Severance Agreement between RCM Technologies, Inc. and Kevin Miller dated December 27, 2012; incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K dated December 27,
2012, filed with the Securities and Exchange Commission on December 28, 2012.
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*
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Amendment No. 1 to Executive Severance Agreement between RCM Technologies, Inc. and Kevin Miller dated December 26, 2017; incorporated by reference to Exhibit 10(x) to the Registrant’s Annual Report on Form
10-K for this fiscal year ended December 29, 2018, filed with the Securities and Exchange Commission on March 8, 2018.
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ITEM 15.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)
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(b)
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Exhibits (Continued)
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*
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RCM Technologies, Inc. Amended and Restated 2014 Omnibus Equity Compensation Plan; incorporated by reference to Exhibit A to the Registrant’s Definitive Proxy Statement for the 2016 Annual Meeting filed with
the Securities and Exchange Commission on October 28, 2016.
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*
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Form of Stock Unit Agreement; incorporated by reference to Exhibit 99.2 to the December 2014 8-K.
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*
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RCM Technologies, Inc. Change in Control Plan for Selected Executive Management (filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 12,
2015 and incorporated herein by reference).
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*
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Amendment 2015-3 to the RCM Technologies, Inc. 2001 Employee Stock Purchase Plan; incorporated by reference to Exhibit A to the Registrant’s Definitive Proxy Statement for the 2015 Annual Meeting filed with the
Securities and Exchange Commission on October 30, 2015.
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*
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Amendment 2018-4 to the RCM Technologies, Inc. 2001 Employee Stock Purchase Plan; incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 18, 2018.
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*
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Executive Severance Agreement, dated as of June 1, 2018, by and between the Company and Bradley S. Vizi; incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on June 7, 2018.
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Third Amended & Restated Loan and Security Agreement, dated as of August 9, 2018, by and among the Company and all of its subsidiaries, Citizens Bank of Pennsylvania, a Pennsylvania state chartered bank, in
its capacity as administrative agent and arranger, and Citizens Bank of Pennsylvania, as lender; incorporated by reference to Exhibit 10(d) to the Registrant’s Quarterly Report on Form 10-Q for this fiscal quarter ended June 30, 2018, filed
with the Securities and Exchange Commission on August 14, 2018.
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First Amendment to Third Amended and Restated Loan Agreement, dated as of August 9, 2018, by and among the Company and all of its subsidiaries, and Citizens Bank, N.A., a national banking association (as
successor by merger to Citizens Bank of Pennsylvania), in its capacities as lender and as administrative agent and arranger; incorporated by reference to Exhibit 99 to the Registrant’s Current Report on Form 8-K filed with the Securities and
Exchange Commission on October 22, 2019.
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Subsidiaries of the Registrant. (Previously filed)
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Consent of Macias, Gini & O’Connell, LLP. (Previously filed)
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Consent of EisnerAmper LLP. (Previously filed)
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Certifications of Chief Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. (Filed herewith)
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Certifications of Chief Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. (Filed herewith)
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ITEM 15.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)
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(b)
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Exhibits (Continued)
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Certifications of Chief Executive Officer Required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended.) (Previously filed)
|
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Certifications of Chief Financial Officer Required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended.) (Previously filed)
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||||
*
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Constitutes a management contract or compensatory plan or arrangement.
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SIGNATURES
|
RCM Technologies, Inc.
|
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Date: April 22, 2020
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By:
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/s/ Bradley S. Vizi
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Bradley S. Vizi
|
|||
Executive Chairman and President
|
|||
Date: April 22, 2020
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By:
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/s/ Kevin D. Miller
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Kevin D. Miller
|
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Chief Financial Officer, Treasurer and Secretary
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Exhibit 31.1
|
Date: April 22, 2020
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/s/ Bradley S. Vizi
Bradley S. Vizi
Executive Chairman and President
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Exhibit 31.2
|
Date: April 22, 2020
|
/s/ Kevin D. Miller
Kevin D. Miller
Chief Financial Officer
|
Exhibit 31.1
|
Date: April 22, 2020
|
/s/ Bradley S. Vizi
Bradley S. Vizi
Executive Chairman and President
|
Exhibit 31.2
|
Date: April 22, 2020
|
/s/ Kevin D. Miller
Kevin D. Miller
Chief Financial Officer
|