x |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
16-0837866
|
|
(State or other jurisdiction of
|
(I. R. S. Employer
|
|
incorporation or organization)
|
Identification No.)
|
Elma, New York | 14059 |
(Address of Principal Executive Office) | (Zip Code) |
Title of each class
|
|
Name of each exchange on which registered
|
||
Common Stock, $.20 par value
|
NYSE Amex
|
Large accelerated filer o
|
Accelerated filer o
|
Non-accelerated filer o
|
Smaller reporting company x
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
|
(a)
|
Directors. The following paragraphs set forth certain information regarding the nominees for election to the Company’s Board of Directors, including the specific experience, qualifications, attributes or skills that led to the conclusion by the Board of Directors that such person should serve as a Director of the Company. The nominees for election to the Company’s Board of Directors are Dr. Nicholas D. Trbovich, age 76, Nicholas D. Trbovich, Jr., age 51, Donald W. Hedges, Esq., age 90 and Dr. William H. Duerig, age 90.
|
Name | Age |
Position with the Company
and Principal Occupation
and Business Experience
for Past Five Years
|
Dr. Nicholas D. Trbovich
|
76 | Founder, Chairman of the Board of Directors; Chief Executive Officer of the Company for more than five years; Also, President of the Company for more than five years before Oct. 2010. |
Nicholas D. Trbovich, Jr.
|
51 |
Director of the Company since 1990; Chief Operating Officer of the Company since 2007; President of the Company since Oct. 2010; Executive Vice President of the Company from 2006-2010.
|
Cari L. Jaroslawsky
|
42 |
Treasurer and Chief Financial Officer of the Company since 2005; CPA Consultant/Controller for the Company for more than five years prior to 2005.
|
Item 11.
|
Executive Compensation.
|
Name and
Principal Position
|
Year
|
Salary
|
Bonus
|
All Other
Compen-
sation (1)
|
Total
|
|||||||||||||||
Dr. Nicholas D. Trbovich
Chairman of the Board and
CEO
|
2011
2010
|
$539,880
$514,733
|
$57,000
$27,500
|
$311,922
$353,071
|
$908,802
$895,304
|
|||||||||||||||
Nicholas D. Trbovich, Jr.
Director, President and COO
|
2011
2010
|
$321,023
$306,070
|
$47,000
$22,500
|
$178,087
$149,500
|
$546,110
$478,070
|
|||||||||||||||
Cari L. Jaroslawsky
CFO and Treasurer
|
2011
2010
|
$173,440
$165,360
|
$17,000
$7,500
|
$46,618
$33,460
|
$237,058
$206,320
|
|
(1)
|
All Other Compensation for 2011 includes (i) an allocation of 689 shares of Common Stock under the Servotronics Inc.’s Employee Stock Ownership Plan (“ESOP”) for Dr. Trbovich and Mr. Trbovich, Jr., and 606 shares for Ms. Jaroslawsky valued as of November 30, 2011 (the date of allocation), at the closing price on the NYSE Amex of $8.96 per share; (ii) $41,936, $24,210 and $13,276 for Dr. Trbovich, Mr. Trbovich, Jr. and Ms. Jaroslawsky, respectively, for vacation pay in lieu of time off pursuant to a policy that is generally applicable to all employees of the Company; (iii) $15,450, $5,188, and $4,976 for Dr. Trbovich, Mr. Trbovich Jr., and Ms. Jaroslawsky, respectively, for benefit parity payments in lieu of pension related benefits that are limited by the terms of the ESOP; (iv) $11,124, $966 and $278 for Dr. Trbovich, Mr. Trbovich, Jr. and Ms. Jaroslawsky, respectively, for life insurance; (v) $31,262, $30,723 and $22,655 for Dr. Trbovich, Mr. Trbovich, Jr. and Ms. Jaroslawsky, respectively, for health insurance and medical/health related expenses; (vi) $205,975 and $109,690 for Dr. Trbovich and Mr. Trbovich, Jr., respectively for the surrender of unexercised options to the Company in exchange for a cash payment equal to the difference between the exercise price and the average of the high and low market price ($8.965 on July 12, 2011) of the Company’s common stock on the day of surrender less an administrative charge. The number of options surrendered for Dr. Trbovich and Mr. Trbovich, Jr. was 45,000 (exercise price of $4.38) and 24,000 (exercise price of $4.38), respectively; (vii) $1,241 for personal use of a company car for Mr. Trbovich, Jr.
|
|
||||||||
Option Awards | ||||||||
Named Executive Officer
|
Number of securities
underlying
unexercised
options (#)
|
Option
Exercise
Price
|
Option
Expiration
Date
|
|||||
Dr. Nicholas D. Trbovich
|
25,000 | $4.70 |
12/29/2015
|
|||||
Nicholas D. Trbovich, Jr. Jr.
|
15,000 | $4.70 |
12/29/2015
|
|||||
Cari L. Jaroslawsky
|
1,000 | $4.70 |
12/29/2015
|
Name
|
Fees Earned or Paid in Cash (1)
|
Option
Awards (2)
|
All other Compensation (3)
|
Total
|
|||||||||
Dr. William H. Duerig
|
$41,500 | -- | $73,010 | $114,510 | |||||||||
Donald W. Hedges, Esq.
|
$41,500 | -- | $73,010 | $114,510 |
|
(1)
|
Includes cash compensation earned by the Directors during the fiscal year 2011.
|
|
(2)
|
No options were awarded in 2011. As of December 31, 2011, each of Dr. Duerig’s and Mr. Hedges’ stock option holdings in the Company consisted of: 18,000 options with an exercise price of $2.045 expiring on April 10, 2013; and 7,500 options with an exercise price of $4.70 expiring on December 29, 2015. All stock options listed in this note (2) were exercisable at December 31, 2011.
|
|
(3)
|
In July of 2011, Dr. Duerig and Mr. Hedges each surrendered 16,000 unexercised options to the Company in exchange for a cash payment equal to the difference between the exercise price of $4.38 and the average of the high and low market price ($8.965 on 7/12/11) of the Company’s common stock on the day of surrender less an administrative charge.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Name and Address of
Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percent of
Class (1)
|
|||
Servotronics, Inc. Employee | 670,947 (2) | 28.9% | |||
Stock Ownership Trust (2) | |||||
1110 Maple Street | |||||
P.O. Box 300
|
|||||
Elma, New York 14059 | |||||
Dr. Nicholas D. Trbovich (3) | 460,645 (3) | 19.7% | |||
1110 Maple Street | |||||
P.O. Box 300 | |||||
Elma, New York 14059
|
|||||
Harvey Houtkin (4) | 352,088 (4) | 15.2% | |||
160 Summit Avenue | |||||
Montvale, New Jersey 07645 | |||||
(1)
|
Percent of class is based upon 2,318,371 shares of Common Stock outstanding as of March 31, 2012 plus, in the case of Dr. Trbovich, the shares underlying his stock options, all of which are presently exercisable.
|
(2)
|
The Trustees of the Servotronics, Inc. Employee Stock Ownership Trust (the “ESOT”) -- Dr. Nicholas D. Trbovich and Nicholas D. Trbovich, Jr. -- direct the voting of unallocated shares. The participants in the related plan have the right to direct the voting of shares which have been allocated to their respective accounts; if a participant does not direct the vote, the Trustees may direct the vote of that participant’s shares. As of March 31, 2012, approximately 435,833 shares are allocated to the accounts of participants and approximately 235,114 shares remain unallocated.
|
(3)
|
This amount includes (i) 26,809 shares held by a charitable foundation for which Dr. Trbovich serves as a Trustee; (ii) 25,000 shares which Dr. Trbovich has the right to acquire under stock options which are currently exercisable; and (iii) approximately 45,775 shares allocated to Dr. Trbovich’s account under the ESOT. These amounts do not include the shares beneficially owned by certain of Dr. Trbovich’s other relatives. Also, except as set forth in this note (3), does not include shares held by the ESOT as to which Dr. Trbovich serves as one of the two Trustees. See note (2) above.
|
(4)
|
This information is based on a statement on Schedule 13D, as last amended on February 12, 2004, filed by Mr. Houtkin with the Securities and Exchange Commission. According to Mr. Houtkin’s statement, he had sole voting and investment power with respect to 190,000 shares and shared voting and investment power with respect to 162,088 shares. Mr. Houtkin disclaimed beneficial ownership in additional shares owned by other members of his family. The Company has received no further information from Mr. Houtkin or on his behalf.
|
Name of
Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percent of
Class (1)
|
|||
Dr. Nicholas D. Trbovich | 460,645 (2) | 19.7% | |||
Nicholas D. Trbovich, Jr. | 87,515 (3) | 3.8% | |||
Donald W. Hedges, Esq. | 30,236 (4) | 1.3% | |||
Dr. William H. Duerig | 29,093 (5) | 1.2% | |||
Cari L. Jaroslawsky | 2,606 (6) | 0.1% | |||
|
|||||
All Directors and Officers as a group 885,085 (7) | 36.7% | ||||
(1)
|
Percent of class is based upon 2,318,371 shares of Common Stock outstanding as of March 31, 2012 plus the number of shares subject to stock options held by the indicated person or group.
|
(2)
|
See note (7) below and note (3) to the table in “Security Ownership of Certain Beneficial Owners”.
|
(3)
|
This amount includes (i) 15,000 shares which Mr. Trbovich, Jr. has the right to acquire under stock options which are currently exercisable; and (ii) approximately 29,701 shares allocated to Mr. Trbovich, Jr.’s account under the ESOT. Except as set forth in the preceding sentence, does not include shares held by the ESOT as to which Mr. Trbovich, Jr. serves as one of two Trustees. See note (7) below.
|
(4)
|
This amount includes 25,500 shares which Mr. Hedges has the right to acquire under stock options which are currently exercisable. Mr. Hedges has sole voting and investment power with respect to 4,261 shares and shared voting and investment power with respect to 475 shares.
|
(5)
|
This amount includes 25,500 shares which Dr. Duerig has the right to acquire under stock options which are currently exercisable.
|
(6)
|
This amount includes 1,000 shares which Ms. Jaroslawsky has the right to acquire under stock options which are currently exercisable and approximately 606 shares allocated to Ms. Jaroslawsky’s account under the ESOT.
|
(7)
|
See notes (2) through (6) above. Also includes unallocated shares held by the ESOT over which certain officers, as Trustees of the ESOT, may be deemed to have voting power, as well as shares allocated to the accounts of all Officers as a group under the related plan. See the table in “Security Ownership of Certain Beneficial Owners” and note (2) thereto.
|
EQUITY COMPENSATION PLAN INFORMATION
|
|||||||||||
Plan category
|
Number of securities
to be issued upon
exercise of outstanding
options, warrants
and rights
(a)
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected in column (a))
(c)
|
||||||||
Equity compensation
plans approved by
security holders
|
108,500 | $3.60 | 0 | ||||||||
Equity compensation
plans not approved
by security holders
|
0 | 0 | 0 | ||||||||
Total
|
108,500 | $3.60 | 0 |
Item 13.
|
Certain Relationships and Related Transactions and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
2011
|
2010
|
|||||||
Audit Fees (1)
|
$ | 109,000 | $ | 93,500 | ||||
Tax Service Fees (2)
|
45,395 | 52,020 | ||||||
All Other Fees (3)
|
1,250 | 3,150 | ||||||
Total
|
$ | 155,645 | $ | 148,670 |
|
(1)
|
Audit fees represent fees for professional services provided in connection with the audit of the Company's financial statements and review of the Company's quarterly financial statements and audit services provided in connection with other statutory or regulatory filings.
|
|
(2)
|
Tax service fees principally included fees for tax preparation and tax consulting services. Through December 21, 2011, tax fees were billed by RSM McGladrey under an alternative practice structure with Freed Maxick CPAs, P.C. (formerly known as Freed Maxick & Battaglia, CPAs, PC). On December 21, 2011, the alternative practice structure with RSM McGladrey ceased to exist and future tax services will be performed by Freed Maxick CPAs, P.C.
|
|
(3)
|
Primarily for SEC compliance and assistance.
|
Date: April 30, 2012
|
SERVOTRONICS, INC.
|
||
|
By:
|
/s/ Cari L. Jaroslawsky, Treasurer and CFO
|
|
Cari L. Jaroslawsky, Treasurer and
|
|||
Chief Financial Officer | |||
31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
1.
|
I have reviewed this amended annual report on Form 10-K/A of Servotronics, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
1.
|
I have reviewed this amended annual report on Form 10-K/A of Servotronics, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|