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 definition of “accelerated filer,” “large accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
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. ☐
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
No ☒
The aggregate market value of voting stock held
by non-affiliates of the registrant as of June 30, 2022: $1,440,913
Number of shares of common stock, par value $.001,
outstanding as of April 14, 2023: 13,368,538
Blonder Tongue Laboratories, Inc. (the “Company,” “we,”
“us,” “our” and other similar terms) is filing this Amendment No. 1 (this “Amendment”) to its Annual
Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission on April 17, 2023 (the
“Original Form 10-K”), for the purpose of filing Part III of Form 10-K.
Pursuant to the rules of the SEC, Part IV, Item
15 has also been amended to contain the currently dated certifications from the Company’s principal executive officer and principal
financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. The certifications of the Company’s principal executive
officer and principal financial officer are attached to this Amendment as Exhibits 31.3 and 31.4. As no financial statements have been
included in this Amendment and this Amendment does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation
S-K, paragraphs 4 and 5 of the certifications have been omitted. Additionally, we are not including the certificate required under Section
906 of the Sarbanes-Oxley Act of 2002 as no financial statements are being filed with this Amendment.
Accordingly, this Amendment consists only of the
facing page, this explanatory note, Items 10-14 of Part III of Form 10-K, Item 15 of Part IV of Form 10-K, the signature pages to Form
10-K and the submitted exhibits. The Original Form 10-K is otherwise unchanged and has been omitted. This Amendment should be read in
conjunction with the Original Form 10-K. Further, this Amendment does not reflect any subsequent events occurring after the original filing
date of the Original Form 10-K and does not modify or update in any way the disclosures made in the Original Form 10-K except as described
above.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information Regarding Board of Directors
The Company’s Certificate
of Incorporation and Amended and Restated Bylaws, as currently in effect, provide that our Board of Directors (the “Board”)
shall consist of between five and eleven members, as determined from time to time by the Board, divided into three classes as nearly equal
in number as possible. The successors to each class of directors whose terms expire at an annual meeting of our stockholders will be elected
to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election.
The size of the Board is currently set at eight Directors.
The following table sets forth
the names and certain information about each of our Directors:
| Name |
|
Age |
|
Director Since |
| |
|
|
| John Burke |
|
60 |
|
2020 |
| Charles E. Dietz |
|
75 |
|
2011 |
| Michael Hawkey |
|
57 |
|
2020 |
| Stephen K. Necessary |
|
66 |
|
2018 |
| Robert J. Pallé |
|
77 |
|
1993 |
| Gary P. Scharmett |
|
67 |
|
1997 |
| Steven L. Shea |
|
63 |
|
2009 |
| James F. Williams |
|
65 |
|
1993 |
Set forth below is a brief
summary of the recent business experience and background of each of our Directors. The Board believes that each Director possesses the
qualities and experience that Directors should possess, as such criteria for Board membership has been established by the Board through
its Nominating & Corporate Governance Committee. Also included below is information about each Director’s specific experience,
qualifications, attributes or skills that led the Board to conclude that he should serve as a Director. As reflected, the Nominating &
Corporate Governance Committee seeks out, and the Board is comprised of, individuals with diverse professional backgrounds, experiences
and skills.
John Burke has been
one of our Directors since January 23, 2020. Mr. Burke has served since 2017 as a Managing Partner of Vetust Advisors, which provides
strategic and management consulting services to a variety of businesses. He previously served as Executive Vice President and Chief Operating
Officer of Rovi Corporation (since re-named TiVo) from 2014 to 2016, where he led the transformation of the company’s content discovery,
user interface, and data analytics businesses, including the acquisition of TiVo. Prior to joining Rovi, Mr. Burke led a number of different
businesses for ARRIS Group, Motorola, Motorola Mobility and General Instrument.
The Board concluded that Mr.
Burke should serve as a Director due to his long record of strategic and operational leadership and intimate, in-depth knowledge of the
cable, video and communications markets, which allows him to provide the Board with valuable guidance on product, market and strategic
matters.
Mr. Burke serves as a Class
II Director, with a term expiring at the Company’s annual meeting of stockholders in 2024.
Charles E. Dietz has
been one of our Directors since September 2011. Since 2008, Mr. Dietz has been an independent cable industry consultant to various clients
within the cable industry. Prior to 2008, Mr. Dietz was Senior Vice President of Engineering for 12 years at Insight Communications, a
multiple systems operator, and from 2001 to 2008 served as Insight Communications’ Chief Technical Officer. Mr. Dietz was responsible
for all technical aspects of Insight Communications’ operations, including technology development and implementation, system construction
and maintenance, purchasing, and technical regulatory compliance. Mr. Dietz has been a member of the Society of Cable Telecommunications
Engineers since 1978, and a member of Cable TV Pioneers since 2010.
The Board concluded that Mr.
Dietz should serve as a Director due to his extensive industry knowledge and executive and technical experience in the cable television
and communications industry, including the analysis, evaluation, purchase, use and deployment of products, equipment and technology substantially
similar to ours. Accordingly, Mr. Dietz brings valuable insight to our customer and vendor relationships and strong relationships with
the cable industry to the Board.
Mr. Dietz serves as a Class
III Director, with a term expiring at the Company’s annual meeting of stockholders in 2025.
Michael Hawkey has
been one of our Directors since June 2020. Currently Mr. Hawkey is the Vice President and General Manager of 75F, a provider of advanced
IoT-based building management solutions. Prior to February 2021, Mr. Hawkey served as Senior Vice President and General Manager of Xperi/TiVo
Corporation, where he led growth initiatives, overall strategy and product offerings across TiVo’s product portfolio. Before joining
TiVo in 2015, he spent more than seven and a half years with EchoStar, rising to the level of Senior Vice President and General Manager
of Sling Media. Earlier in his career, Mr. Hawkey held engineering roles with Wester Digital, ASIC Designs, Inc, and McDonnell Douglas
Electronics Company. He holds a Bachelor of Science in Computer Engineering from the Rose Hulman Institute for Technology.
The Board concluded that Mr.
Hawkey should serve as a Director due to his extensive industry knowledge and management experience in the cable television and communications
industry, including his experience in markets that are a focus of the Company’s business strategy.
Mr. Hawkey serves as a Class
III Director, with a term expiring at the Company’s annual meeting of stockholders in 2025.
Stephen K. Necessary
has been one of our Directors since January 2018. He currently serves and the Chairman of the Board of ComSonics, Inc., an ESOP-owned
company that is engaged in manufacturing of telecommunications test equipment, contract manufacturing and repair of electronics used in
the cable telecommunications industry. From 2015 until December 2017, Mr. Necessary served as Executive Vice President, Product Development
and Management at Cox Communications, Inc., where he directed new development and lifecycle management for all products across residential
and business portfolios that generated over $11 billion in revenue in 2017. Mr. Necessary retired from that position at the end of 2017,
continued in 2018 on a part-time consulting basis, and completely retired at the end of 2018. From 2005 to 2015, Mr. Necessary served
as Vice President, Video Product Development and Management at Cox Communications.
The Board concluded that Mr.
Necessary should serve as a Director due to his extensive industry knowledge and executive and technical experience in the cable television
and communications industry, including his management experience in directing product development and lifecycle management. Through his
career-long experience in the industry served by the Company, Mr. Necessary brings valuable insight to the Board regarding customer needs,
product development and relationships with our key customer base.
Mr. Necessary serves as a
Class I Director, with a term expiring at the Company’s annual meeting of stockholders in 2023.
Robert J. Pallé
has been one of our Directors since September, 1993. He also has been
serving as our Chief Executive Officer and President since March 17, 2023. He previously served as our President from May, 2003 until
May, 2019, our Chief Executive Officer from May, 2015 until December 31, 2019 and our Managing Director-Strategic Accounts during 2020,
ending his service as an employee of the Company on December 31, 2020. Prior to that, Mr. Pallé served as our Chief Operating Officer
and Secretary since April, 1989, our Executive Vice President from April, 1989 until May, 2003 and as our Interim Treasurer from March
through April, 2001.
The Board concluded that Mr.
Pallé should serve as a Director due to his extensive business and management experience with us in various senior management positions
and his in-depth knowledge of our products, lines of business, long-term strategies, challenges and opportunities. Mr. Pallé brings
a broad perspective to the Board’s deliberations due to his many years of service to the Company, including as our Chief Executive
Officer and President.
Mr. Pallé serves as
a Class II Director, with a term expiring at the Company’s annual meeting of stockholders in 2024.
Gary P. Scharmett has been one of our Directors since December, 1997. Since January,
2023, Mr. Scharmett has been a Senior Counsel in the law firm of Stradley Ronon Stevens & Young, LLP (“Stradley”), which
served as our outside counsel through May 2022. From January 1989 through December 2022, Mr. Scharmett was a partner in Stradley, and
served on the Board of Directors of that firm from January, 2001 until December, 2003. He presently serves as the Co-Chair of that firm’s
Finance & Restructuring Practice Group. Mr. Scharmett is a past President, and until 2022 had served for more than the prior five
years as a member of the Board of Directors of The Association of Commercial Finance Attorneys, Inc. Until December 31, 2019, Mr. Scharmett
had also served for more than the prior five years as a member of the Board of Directors of the Philadelphia Chapter of the Turnaround
Management Association.
The Board concluded that Mr. Scharmett should serve as a Director due
to the important experience, judgment and perspective he brings to the Board based upon his more than forty years of experience as a corporate
attorney, representing a diverse range of companies on complex matters, including financing, regulatory and corporate governance matters.
In addition, having served as our principal legal advisor from 1989 through May 2022, Mr. Scharmett has a unique understanding of our
business and the industry in which we operate and compete.
Mr. Scharmett serves as a
Class II Director, with a term expiring at the Company’s annual meeting of stockholders in 2024.
Steven L. Shea has
been one of our Directors since September, 2009 and was appointed to serve as the Chairman of the Board in May 2015. Mr. Shea has more
than twenty-five years of investment banking experience. He was appointed to the Board of the Directors of Unico American Corp. (Nasdaq:
“UNAM”) in November 2020 and became its Chairman of the Board in February 2021. In October 2021, he was appointed to the additional
positions of President, CEO and COO. From January 2016 until January 2018, Mr. Shea served on the Board of Directors of TradeRiver Finance
USA. From November 2013 until February 2017, Mr. Shea served as Special Advisor to Tufton Capital Management, LLC, an SEC registered investment
advisor (formerly known as Hardesty Capital Management, LLC). From November 2013 through May 2015, Mr. Shea also served as Chairman of
the Executive Committee of Hardesty Capital Management, LLC. From January, 2011 until November, 2013, he served as President of Hardesty
Capital Management, LLC and Hardesty Capital Corporation, which provide investment advisory services to corporations, institutions and
individuals. Prior thereto, Mr. Shea was an Executive Vice President of Ferris, Baker Watts, Inc. (“Ferris Baker”), from 1999
until the sale of such firm in 2008. Mr. Shea also served as the Executive Director of the Capital Markets Division of Ferris Baker and
was a member of their Board of Directors and Executive and Strategic Alternative Committees of its Board of Directors. Prior to his position
at Ferris Baker, Mr. Shea was a Vice President with Mercantile Safe Deposit and Trust Company from 1989 to 1993, and was a Vice President
at Maryland National Bank from 1981 to 1989.
The Board concluded that Mr.
Shea should serve as a Director due to his extensive financial, merchant banking, capital markets and executive management experience
gained as an investment banker, including his knowledge of growth strategies, acquisition analysis and shareholder relations. He also
has an in-depth familiarity with the technology and manufacturing sectors, along with experience as a director of other corporations.
Mr. Shea serves as a Class
I Director, with a term expiring at the Company’s annual meeting of stockholders in 2023.
James F. Williams has
been one of our Directors since September, 1993. From June 1999 until March 2021 he served as the Chief Financial Officer and a Director
of OSC Holding, Inc. and its subsidiaries, which provide demolition, environmental and civil contracting services primarily in the United
States and Canada. From July, 2007 through February 2013, Mr. Williams served as a Director, Managing Member and Vice President of Buffalo
City Center Leasing, LLC, which, was a lessor of electronic equipment.
The Board concluded that Mr.
Williams should serve as a Director due to his strong experience in strategic planning, leadership, finance and executive management with
various organizations. As a Director for nearly thirty years, Mr. Williams also provides perspective, institutional knowledge and a deep
understanding of our business.
Mr. Williams serves as a Class
III Director, with a term expiring at the Company’s annual meeting of stockholders in 2025.
Information Regarding Executive Officers
The following table sets forth
the names and certain information about each of our executive officers:
| Name |
|
Age |
|
Position |
| |
|
|
|
|
| Robert J. Pallé |
|
77 |
|
Chief Executive Officer, President, and Director |
| Michael P. Censoplano |
|
50 |
|
Chief Financial Officer, Treasurer, and Secretary |
| Allen Horvath |
|
71 |
|
Senior Vice President-Operations and Assistant Secretary |
Robert J. Pallé
currently serves as our Chief Executive Officer and President since
March 17, 2023. Mr. Pallé also has been one of our Directors since September, 1993. He previously served as our President from
May, 2003 until May, 2019, our Chief Executive Officer from May, 2015 until December 31, 2019 and our Managing Director-Strategic Accounts
during 2020, ending his service as an employee of the Company on December 31, 2020. Prior to that, Mr. Pallé served as our Chief
Operating Officer and Secretary since April, 1989, our Executive Vice President from April, 1989 until May, 2003 and as our Interim Treasurer
from March through April, 2001.
Michael P. Censoplano
currently serves as our Chief Financial Officer, Treasurer, and Secretary
since March 13, 2023. Mr. Censoplano was our Interim Chief Financial Officer from February 23, 2023, until March 13, 2023. He previously
served as our Controller since January 2001 and as our assistant controller from July 2000 through December 2000. He has an undergraduate
degree from Rider University.
Allen Horvath has been our Senior Vice President-Operations since January 23, 2020
and Assistant Secretary since June 11, 2020. Prior to his appointment as Senior Vice President, Mr. Horvath served as our Vice President-Operations
since May, 2013 and as our Vice President-Manufacturing since May, 2003 and is responsible for our manufacturing operations. Mr. Horvath
served as our Manufacturing Manager from 1998 until May, 2003. Since 1976, Mr. Horvath has served us in various management positions in
the areas of production testing, engineering, quality control and manufacturing.
Board Leadership Structure and Role in Risk
Oversight
Historically, the Board has
determined that our Chief Executive Officer was best situated to serve as Chairman of the Board because he was the Director most familiar
with our business and industry, and most capable of effectively identifying strategic priorities and leading the discussion and execution
of strategy. Independent Directors and management have different perspectives and roles in strategy development. Our independent Directors
bring experience, oversight and expertise from outside the company and industry, while the Chief Executive Officer brings company-specific
experience and expertise. Following the resignation of our then-serving Chairman and CEO in 2015, our Board carefully evaluated our Board
governance structure and considered alternative approaches. As a result of that evaluation and analysis, the Board determined that it
was in the Company’s best interests to appoint one of the independent Directors as Chairman of the Board. As a result, in May 2015,
the Board appointed Steven L. Shea to serve as our Chairman of the Board, and because the Board continues to believe that it is in the
best interests of the Company to have an independent Chairman of the Board, Mr. Shea continues to serve as our Chairman.
The Board believes that establishing
the right “tone at the top” and full and open communication between management and the Board are essential for effective risk
management and oversight. At each regular Board meeting, the Board receives reports from members of senior management on areas of material
risk to the Company, including operational, financial, strategic and performance risks. The full Board frequently receives these reports
from the appropriate “risk owner” within the organization to facilitate our risk identification, risk management and risk
mitigation strategies. This enables the Board to coordinate risk oversight, particularly with respect to risk interrelationships across
corporate disciplines.
The Board has an active role,
as a whole and also at the committee level, in overseeing management of our risks. The Audit Committee assists the Board in fulfilling
its oversight responsibilities with respect to areas of financial reporting and compliance with laws, rules and regulations applicable
to us, including those related to accounting regulation, insider trading, antitrust, and employment discrimination, whistle blowing and
conflicts of interest faced by employees, officers and Directors. The Compensation Committee assists the Board in fulfilling its oversight
responsibilities with respect to our compensation policies and programs. The Nominating & Corporate Governance Committee assists the
Board in fulfilling its oversight responsibilities with respect to the management of risks associated with Board organization and membership,
and succession planning for our Directors and senior executive officers.
Board Committees
Audit Committee
The Company has a separately
designated standing audit committee that has been established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) and Rule 10A-3 promulgated under the Exchange Act. The Audit Committee is currently
comprised of James F. Williams, Charles E. Dietz, Stephen K. Necessary, and Steven L. Shea, each of whom is a non-employee Director. The
Audit Committee, among other things:
| |
● |
oversees our accounting and financial reporting process and audits of our financial statements; |
| |
● |
selects, retains or terminates our independent registered public accounting firm; |
| |
● |
reviews the plans and results of the audit engagement with the independent registered public accounting firm; |
| |
● |
discusses with the independent registered public accounting firm all necessary accounting policies and practices to be used and alternative treatments of financial information discussed with management; |
| |
● |
oversees the work of the independent registered public accounting firm; |
| |
● |
evaluates and pre-approves audit and non-audit services provided by the independent registered public accounting firm; |
| |
● |
reviews the independence of the independent registered public accounting firm; |
| |
● |
assures the regular rotation of the audit partners; |
| |
● |
considers the range of audit and non-audit fees and determines the compensation of the independent registered public accounting firm; |
| |
● |
reviews financial and earnings information released to the public, analysts and other third parties; and |
| |
● |
reviews the adequacy of our internal accounting controls. |
Each of the members of the
Audit Committee who served during 2022 was determined by the Board to be independent, as independence for audit committee members is defined
by NYSE American and each also meets the requirements of Rule 10A-3 under the Exchange Act. In addition, the Board has determined that
a member of the Audit Committee, James F. Williams, qualifies as an “audit committee financial expert” as defined in Section
407(d)(5)(ii) of Regulation S-K.
The Board has adopted a written
charter for the Audit Committee. The Board, in concert with the Audit Committee, reviews and reassesses the charter for adequacy on an
annual basis. A copy of the Audit Committee Charter is available on our website at www.blondertongue.com under the “About Us/Investor
Relations/Audit Committee Charter” caption.
Compensation Committee
The Compensation Committee
is currently comprised of Stephen K. Necessary, John Burke, Charles E. Dietz, and James F. Williams, each of whom is a non-employee Director.
Mr. Necessary serves as the Chairman of the Compensation Committee. Each of the members of the Compensation Committee who served during
2022 was determined by the Board to be independent, as independence for compensation committee members is defined by NYSE American rules.
The Compensation Committee
determines compensation for our executive officers and administers each of our existing equity incentive plans, other than the Amended
and Restated 2005 Director Equity Incentive Plan, the 2016 Director Equity Incentive Plan and the Amended and Restated Director Stock
Purchase Plan, each of which is administered by the Board.
The Compensation Committee’s
responsibilities include, among other duties, the responsibility to:
| |
● |
evaluate the performance of the Chief Executive Officer/President; |
| |
● |
review and approve the base salary (subject to Board approval), bonus, incentive compensation and any other compensation for the Chief Executive Officer/President; |
| |
● |
review the Chief Executive Officer’s recommendations for the compensation of the other executive officers, make appropriate adjustments and approve such compensation; |
| |
● |
monitor our cash bonus and equity-based compensation plans and discharge the duties imposed on the Compensation Committee by the terms of those plans; |
| |
● |
review and approve the proposal regarding the Say on Pay Vote when the same is required to be included in our proxy statement, and to review and recommend to the Board for approval the frequency with which we will conduct Say on Pay Votes; and |
| |
● |
perform other functions or duties deemed appropriate by the Board. |
Compensation decisions for
the Chief Executive Officer/President and all other executive officers are reviewed and approved by the Compensation Committee, subject
to ratification by the Board of the base salary for the Chief Executive Officer/President. The Compensation Committee relies upon the
Chief Executive Officer to assist the Compensation Committee in performing its duties with regard to all other executive officers. The
Compensation Committee does not delegate any of its authority to other persons. In recent years the Compensation Committee has not retained
a compensation consultant in determining the base salary for our executive officers or for any other purpose.
With regard to the compensation of our Chief Executive Officer/President
and our Chief Financial Officer, the Compensation Committee reviews individual performance, written comments and performance grades received
from members of the Board regarding performance, relevant compensation information from salary surveys (when available), and summary information
and periodically, comments from peer review questionnaires. The Chief Executive Officer also provides the Compensation Committee with
a summary review of the President’s (except when the Chief Executive Officer and the President are the same person) performance.
Based upon its review of all of the foregoing information, the Compensation Committee determines the form and amount of compensation for
these officers, subject to Board approval of their base salaries. The base salary of the Chief Executive Officer/President is presently
reviewed every year. In 2022, the Compensation Committee did not solicit written comments and performance grades from members of the Board
regarding the performance of the Chief Executive Officer/President and Chief Financial Officer.
With regard to compensation
for the other executive officers, the Compensation Committee reviews the Chief Executive Officer’s written summary review of the
executive officers’ performance and this information may be supplemented by summary information and comments from periodic peer
review questionnaires. The Chief Executive Officer also provides a recommendation as to the appropriate form and amount of compensation
for each other executive officer. The Compensation Committee reviews and considers the recommendation of the Chief Executive Officer,
makes adjustments as appropriate and approves them. This review and adjustment procedure is performed annually for the other executive
officers.
The Compensation Committee
does not establish the amount or form of Director compensation. These determinations are made and approved by the full Board; however,
the Compensation Committee will periodically review and recommend to the Board compensation, equity-based plans and benefit programs for
non-employee Directors. Grants of stock option awards and/or restricted or unrestricted shares to non-employee Directors are generally
made annually upon consideration and approval by the full Board with each non-employee Director abstaining from voting on an award to
him.
The Board has adopted a written
charter for the Compensation Committee. The Board, in concert with the Compensation Committee, reviews and reassesses the charter for
adequacy on an annual basis. A copy of the Compensation Committee Charter is available on our website at www.blondertongue.com under the
“About Us/Investor Relations/Compensation Committee Charter” caption.
Nominating & Corporate Governance Committee
The Nominating & Corporate
Governance Committee is currently comprised of Gary P. Scharmett, John Burke, Stephen K. Necessary, and Steven L. Shea, each of whom is
a non-employee Director. Mr. Scharmett serves as the Chairman of the Nominating & Corporate Governance Committee. Each of the members
of the Nominating & Corporate Governance Committee who served during 2022 was determined by the Board to be independent, as independence
for nominating committee members is defined by NYSE American rules.
The Nominating & Corporate
Governance Committee, among other things, considers and makes recommendations to the Board concerning the appropriate size of the Board
and nominees to stand for election or fill vacancies on the Board, as well as the composition of our standing committees. In particular,
the Nominating & Corporate Governance Committee identifies, recruits, considers and recommends candidates to fill positions on the
Board in accordance with its criteria for Board membership (as such criteria are generally described below). In searching for qualified
Director candidates to nominate for election at an annual meeting of stockholders, the Nominating & Corporate Governance Committee
will initially consider nominating the current Directors whose terms are expiring and will consider their past performance on the Board,
along with the criteria for Board membership, in determining whether to nominate them for re-election. In connection with nominations
for elections at annual meetings or to fill vacancies in the Board, the Nominating & Corporate Governance Committee may solicit the
current members of the Board to identify qualified candidates through their business and other organizational networks and may also retain
director search firms as it determines necessary in its own discretion. The Nominating & Corporate Governance Committee will then
consider the potential pool of Director candidates derived from the foregoing process, select the top candidates to fill the number of
openings based on their qualifications, the Board’s needs (including the need for independent Directors) and the criteria for Board
membership. The Nominating & Corporate Governance Committee will then conduct a thorough investigation of the proposed candidates’
backgrounds to ensure there is no past history that would disqualify such candidates from serving as Directors. Those candidates that
are selected and pass the background investigation will be recommended to the full Board for nomination.
The criteria for a nominee
to the Board include, among other things:
| |
● |
the highest personal and professional ethics, strength of character, integrity and values; |
| |
● |
experience as a senior manager, chief operating officer or chief executive officer of a relatively complex organization or, if in a professional or scientific capacity, be accustomed to dealing with complex problems, or otherwise shall have obtained and excelled in a position of leadership; |
| |
● |
education, experience, intelligence, independence, fairness, reasoning ability, practical wisdom, and vision to exercise sound, mature judgments on a macro and entrepreneurial basis on matters which relate to our current and long-term objectives; |
| |
● |
competence and willingness to learn our business, and the breadth of viewpoint and experience necessary for an understanding of the diverse and sometimes conflicting interests of stockholders and other constituencies; |
| |
● |
the nominee should be of such an age at the time of election to assure a minimum of three years of service as a Director, and should be free and willing to attend regularly scheduled meetings of our Board and its committees over a sustained period and otherwise be able to contribute a reasonable amount of time to our company affairs; |
| |
● |
the stature and capability to represent us before the public, stockholders, and other various individuals and groups that affect us; and |
| |
● |
willingness to objectively appraise the performance of management in the interest of the stockholders and question management’s assumptions when inquiry is appropriate. |
The Nominating & Corporate
Governance Committee does not have a formal policy with respect to diversity. In order to enhance the overall quality of the Board’s
deliberations and decisions, however, the Nominating & Corporate Governance Committee seeks candidates with diverse professional backgrounds
and experiences, representing a mix of industries and professions with varied skill sets and expertise.
The Board has adopted a written
charter for the Nominating & Corporate Governance Committee. The Board, in concert with the Nominating and Corporate Governance Committee,
reviews and reassesses the charter for adequacy on an annual basis. A copy of the Nominating & Corporate Governance Committee Charter
is available on our website at www.blondertongue.com under the “About Us/Investor Relations/Nominating Committee Charter”
caption.
Meetings of the Board of Directors and Committees
During the year ended December
31, 2022 the full Board held 24 meetings, the Compensation Committee held six meetings, the Nominating & Corporate Governance Committee
held three meetings, and the Audit Committee held five meetings. Each member of the Board attended (either in person or via teleconference)
at least 75% of the aggregate of the total number of full Board meetings held in 2022 and each member of the standing committees of the
Board attended (either in person or via teleconference) at least 75% of the aggregate of the total number of committee meetings held in
2022 with respect to the committee(s) during the period in which the Director served during 2022.
Code of Ethics
The Company has a Code of
Ethics (the “Ethics Code”) that applies to all of our Directors, officers and employees, including our principal executive
officer, principal financial officer and principal accounting officer. The Ethics Code is available on our website at www.blondertongue.com.
We intend to satisfy the disclosure requirements of Form 8-K with respect to any waivers of or amendments to the Ethics Code with respect
to certain officers by posting such disclosures on our website at www.blondertongue.com. We may, however, elect to disclose any such amendment
or waiver in a Current Report on Form 8-K filed with the SEC in addition to or in lieu of the website disclosure. The information on,
or that can be accessed through our website is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated
into any other filings that we make with the SEC.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange
Act requires our Directors and executive officers, and persons who are the beneficial owners of more than 10% of our Common Stock (collectively,
the “Reporting Persons”), to file with the SEC, initial reports of ownership and reports of changes in ownership of
our Common Stock.
Based solely on a review of
the Section 16(a) reports filed with the SEC, or written representations from Reporting Persons to us, we believe all Directors, executive
officers, and 10% owners timely filed all reports regarding transactions in our securities required to be filed for 2022 by Section 16(a)
under the Exchange Act.
ITEM 11. EXECUTIVE COMPENSATION
Summary Executive Compensation
The following table summarizes
the total compensation paid to or earned by our former Chief Executive Officer and our other named executive officers for services rendered
to us in all capacities for the fiscal years ended December 31, 2022 and 2021.
Summary Compensation Table
| Name and Principal Position | |
Year | |
Salary ($) | | |
Bonus ($) | | |
Option
Awards
($)(1) | | |
All Other
Compensation
($) | | |
Total ($) | |
| Edward R. Grauch | |
2022 | |
| 346,930 | | |
| - | | |
| 37,200 | | |
| 2,064 | (3) | |
| 386,194 | |
| Former Chief Executive Officer, | |
2021 | |
| 265,440 | | |
| - | | |
| 63,600 | | |
| 1,700 | (3) | |
| 330,740 | |
| President(2) | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Eric Skolnik | |
2022 | |
| 241,252 | | |
| - | | |
| 37,200 | | |
| 6,091 | (5) | |
| 284,543 | |
| Former Chief Financial Officer, | |
2021 | |
| 206,609 | | |
| - | | |
| 63,600 | | |
| 3,315 | (5) | |
| 273,524 | |
| Treasurer and Secretary(4) | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| Ronald Alterio | |
2022 | |
| 134,278 | | |
| - | | |
| 37,200 | | |
| 3,209 | (7) | |
| 174,687 | |
| Former Vice President-Operations, | |
2021 | |
| 238,617 | | |
| - | | |
| 63,600 | | |
| 2,882 | (7) | |
| 305,099 | |
| Chief Technology Officer(6) | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| (1) |
The amounts in the “Option Awards” column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 17 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. There were no stock awards in 2022 or 2021. |
| (2) |
Mr. Grauch and the Company entered into deferred compensation agreements.
Pursuant to the agreements, Mr. Grauch agreed to defer a percentage of his cash compensation and as of each date on which compensation
that would otherwise have been paid to him is deferred, the Company accrues a number of shares of Common Stock calculated by dividing
(i) the dollar amount of the deferred compensation for such date by (ii) the fair market value of one share of Common Stock. For 2022,
the amount shown in the “Salary” column includes (A) $201,233 in cash salary and (B) $145,697 of value of deferred compensation.
For 2021, the amount shown in the “Salary” column includes (C) $190,440 in cash salary and (D) $75,000 of value of deferred
compensation. See “Deferred Compensation Agreements,” below. |
| |
|
| (3) |
The amounts shown in the “All Other Compensation” column for Mr. Grauch include our matching contribution to our 401(k) defined contribution plan for the benefit of Mr. Grauch and the dollar value of life insurance premiums paid by us with respect to life insurance for the benefit of Mr. Grauch. |
| |
|
| (4) |
Mr. Skolnik and the Company entered into a deferred compensation agreement.
Pursuant to the agreement, Mr. Skolnik agreed to defer a percentage of his cash compensation and as of each date on which compensation
that would otherwise have been paid to him was deferred, the Company accrues a number of shares of Common Stock calculated by dividing
(i) the dollar amount of the deferred compensation for such date by (ii) the fair market value of one share of Common Stock. For 2022,
the amount shown in the “Salary” column includes (A) $227,502 in cash salary and (B) $13,750 of value of deferred compensation.
For 2021, the amount shown in the “Salary” column includes (C) $184,974 in cash salary and (D) $21,635 of value of deferred
compensation. See “Deferred Compensation Agreements,” below. |
| |
|
| (5) |
The amounts shown in the “All Other Compensation” column for Mr. Skolnik include our matching contribution to our 401(k) defined contribution plan for the benefit of Mr. Skolnik and the dollar value of life insurance premiums paid by us with respect to life insurance for the benefit of Mr. Skolnik. |
| |
|
| (6) |
Mr. Alterio and the Company entered into a deferred compensation agreement.
Pursuant to the agreement, Mr. Alterio agreed to defer a percentage of his cash compensation and as of each date on which compensation
that would otherwise have been paid to him is deferred, the Company accrues a number of shares of Common Stock calculated by dividing
(i) the dollar amount of the deferred compensation for such date by (ii) the fair market value of one share of Common Stock. For 2022,
the amount shown in the “Salary” column includes (A) $127,355 in cash salary and (B) $6,923 of value of deferred compensation.
For 2021, the amount shown in the “Salary” column includes (C) $214,578 in cash salary and (D) $24,089 of value of deferred
compensation. See “Deferred Compensation Agreements,” below. |
| |
|
| (7) |
The amounts shown in the “All Other Compensation” column for Mr. Alterio include our matching contribution to our 401(k) defined contribution plan for the benefit of Mr. Alterio and the dollar value of life insurance premiums paid by us with respect to life insurance for the benefit of Mr. Alterio. |
Employment, Severance and Change-of Control
Arrangements
Other than our current standard
employee severance policy applicable to all salaried employees, which entitles them, upon involuntary termination without cause, to one
week of pay for each year of service up to a maximum of six weeks of pay, we have no employment, severance or change-of-control agreements
with any of our named executive officers, each of whom is employed by us on an at-will basis. Our named executive officers serve at the
will of the Board, which enables us to terminate their employment with discretion as to the terms of any severance arrangement beyond
our current standard policy.
Executive Officer Bonus Plan
Historically, we have provided our executives with an annual opportunity
to earn cash incentive awards through our Executive Officer Bonus Plan. The performance goals are expressed in terms of (a) one or more
corporate or divisional earnings-based measures (which may be based on net income, operating income, cash flows, or any combination thereof)
and/or (b) one or more corporate or divisional sales-based measures. Each such goal may be expressed on an absolute and/or relative basis,
may employ comparisons with our past performance (including one or more divisions) and/or the current or past performance of other companies,
and in the case of earnings-based measures, may employ comparisons to capital, stockholders’ equity and shares outstanding. Performance
goals need not be uniform among participants.
After our financial results
for a fiscal year have been determined, the Compensation Committee will certify the level of performance goal attainment and the potential
bonus payment for each participant. The Compensation Committee has full authority to decrease the amount that would otherwise be payable
to any participant for a fiscal year.
In March 2022, the Compensation Committee determined that for the fiscal
year 2022, none of the executive officers of the Company would be participants under the Executive Officer Bonus Plan. As such, no bonuses
were paid to our named executive officers relating to such year.
Deferred Compensation Agreements
During 2021, the Company and
Messrs. Grauch, Skolnik and Alterio entered into deferred compensation agreements. Pursuant to these agreements, the executive officers
agreed to suspend the payment of a percentage of such executive officers’ cash compensation. Messrs. Skolnik, Alterio and Horvath
each agreed to the deferral of ten percent (10%) of the cash compensation to be earned by him for a period beginning with the second regular
pay period of 2021 and extending through December 25, 2021. Mr. Grauch agreed to a deferral of twenty five percent (25%) of the cash compensation
to be earned by him during 2021. As of each date on which compensation that would otherwise have been paid is deferred pursuant to these
agreements, the Company is obligated to accrue a number of shares of its Common Stock calculated by dividing (i) the dollar amount of
the deferred compensation for such date by (ii) the fair market value of one share of the Common Stock. The “fair market value”
is equal to the official closing price on the NYSE American consolidated tape on the calculation date, or if that day in not a trading
day on the trading day immediately preceding such day, as long as the Company’s Common Stock is listed on the NYSE American exchange.
In connection with those agreements, the Company is obligated during 2022, on the first business day following the close of each calendar
quarter of 2022, to distribute to Mr. Grauch that number of shares of Common Stock accrued pursuant to the agreement during the corresponding
quarter of 2021. The Company was obligated on or before March 15, 2022, to distribute the number of shares of Common Stock accrued pursuant
to these agreements for Messrs. Skolnik, Alterio and Horvath.
During 2022, the Company and
Messrs. Grauch, Skolnik and Alterio also entered into deferred compensation agreements. Pursuant to these agreements, the executive officers
agreed to suspend the payment of a percentage of such executive officers’ cash compensation. Messrs. Skolnik, Alterio and Horvath
each agreed to the deferral of ten percent (10%) of the cash compensation to be earned by him for a period beginning with the second regular
pay period of 2022 and extending through December 24, 2022. Mr. Grauch initially agreed to a deferral of twenty five percent (25%) of
the cash compensation to be earned by him during 2022. In May of 2022, Mr. Grauch agreed to increase his deferral to one hundred percent
(100%) of the cash compensation to be earned by him from May 15, 2022 to November 11, 2022. As of each date on which compensation that
would otherwise have been paid is deferred pursuant to these agreements, the Company is obligated to accrue a number of shares of its
Common Stock calculated by dividing (i) the dollar amount of the deferred compensation for such date by (ii) the fair market value of
one share of the Common Stock. The “fair market value” is equal to the official closing price on the NYSE American consolidated
tape on the calculation date, or if that day in not a trading day on the trading day immediately preceding such day, as long as the Company’s
Common Stock is listed on the NYSE American exchange. In connection with those agreements, the Company is obligated during 2023, on the
first business day following the close of each calendar quarter of 2023, to distribute to Mr. Grauch that number of shares of Common Stock
accrued pursuant to the agreement during the corresponding quarter of 2022. The Company was obligated on or before March 15, 2023, to
distribute the number of shares of Common Stock accrued pursuant to these agreements for Messrs. Skolnik, Alterio and Horvath.
Employee Benefit Plans
In May 2005, our stockholders
approved the adoption of the Blonder Tongue Laboratories, Inc. 2005 Employee Equity Incentive Plan (the “Original 2005 Employee
Plan”). Our stockholders approved an amendment and restatement in its entirety of the Original 2005 Employee Plan in May 2014
(as amended and restated, the “A&R 2005 Employee Plan”) which, among things (i) increased the number of shares
of Common Stock available for issuance under the A&R 2005 Employee Plan, (ii) extended the term of the A&R 2005 Employee Plan
to February 7, 2024, (iii) made awards under the A&R 2005 Employee Plan subject to clawback provisions under applicable law or under
policies that may be adopted by us from time to time, and (iv) prohibited repricing of stock options absent advance stockholder approval.
In addition, at our annual meeting in 2018, stockholders approved an amendment to the A&R 2005 Employee Plan to increase the number
of shares available for grants and awards under the A&R 2005 Employee Plan by 100,000.
The A&R 2005 Employee
Plan is administered by the Compensation Committee of the Board. Under the A&R 2005 Employee Plan, our executive officers and other
key employees, as determined by the Compensation Committee, are eligible to receive equity-based awards from time to time as determined
by the Compensation Committee. Under the A&R 2005 Employee Plan, our executive officers and other key employees may be awarded stock
options to purchase a number of shares of Common Stock (“Stock Options”), stock appreciation rights to receive the
excess, if any, of the fair market value of a specified number of shares of Common Stock at the time of exercise over the grant price
(“SARs”), stock awards at no cost to the executive officer or key employee (“Stock Awards”), which
may be either restricted stock or unrestricted stock, or performance based awards to receive a number of shares of Common Stock if certain
performance goals are met (“Performance Awards”). Each grant of a Stock Option, SAR, Stock Award or Performance Award
will be subject to a written Award Agreement which shall specify the terms and conditions of the grant as determined by the Compensation
Committee, provided, however, that the exercise price for any Stock Options or SARs granted shall not be less than the fair market value
of the underlying Common Stock on the date of grant. The A&R 2005 Employee Plan expires on February 7, 2024.
At our 2016 Annual Meeting,
our stockholders approved the adoption of the Blonder Tongue Laboratories, Inc. 2016 Employee Equity Incentive Plan (the “2016
Employee Plan”), which supplements the A&R 2005 Employee Plan.
The 2016 Employee Plan is
administered by the Compensation Committee of the Board. Under the 2016 Employee Plan, our executive officers and other key employees,
as determined by the Compensation Committee, are eligible to receive equity-based awards from time to time as determined by the Compensation
Committee. The 2016 Employee Plan authorizes the award of up to a maximum of 3,000,000 shares. Any shares subject to an award issued under
the 2016 Employee Plan which is terminated, canceled, expired or forfeited for any reason will again be available for the grant of an
award. Under the 2016 Employee Plan, our executive officers and other key employees may be awarded Stock Options, SARs, Stock Awards,
which may be either restricted stock or unrestricted stock, and Performance Awards. Each grant of a Stock Option, SAR, Stock Award or
Performance Award will be subject to a written Award Agreement which shall specify the terms and conditions of the grant as determined
by the Compensation Committee; provided, however, that the exercise price for any Stock Options or SARs granted shall not be less than
the fair market value of the underlying Common Stock on the date of grant. Awards under the 2016 Employee Plan are subject to clawback
provisions under applicable law or under policies that may be adopted by us from time to time, and Stock Options awarded under the 2016
Employee Plan cannot be re-priced absent advance stockholder approval. The 2016 Employee Plan expires on February 4, 2026. At our annual
meeting in 2017, stockholders approved an amendment to the 2016 Employee Plan, to increase the annual individual award limits relating
to stock options and stock appreciation rights from 100,000 to 250,000 shares of Common Stock. At our annual meeting in 2018, stockholders
approved an amendment to the 2016 Employee Plan to increase the number of shares available for grants and awards under the 2016 Employee
Plan by 2,000,000 to its current limit of 3,000,000 shares. In October 2020, the 2016 Employee Plan was amended to modify the definition
of “Fair Market Value” in respect of any Awards (as defined in the 2016 Employee Plan) made after October 12, 2020, as such
definition would apply when the Company’s Common Stock is traded on a National Securities Exchange, from the arithmetic mean of
the high and low selling price on the consolidated tape, to the official closing price on the consolidated tape.
In 2022, Mr. Grauch was awarded
options to purchase 75,000 shares of our Common Stock, Mr. Skolnik was awarded options to purchase 75,000 shares of our Common Stock,
and Mr. Alterio was awarded options to purchase 75,000 shares of our Common Stock. In each case, such options vest over three years in
equal annual installments on each anniversary of the award date.
Retirement and Other Benefits
Each of the named executive officers is eligible
to participate in our 401(k) Savings and Investment Retirement Plan, which covers all full-time employees and is qualified under Section
401(k) of the Internal Revenue Code. Under this plan, we matched 100% of each participating employee’s salary deferral up to a maximum
match of 2% of eligible compensation.
We maintain group term life
insurance for our employees, including our named executive officers, for which each participating employee designates his or her own beneficiary.
Outstanding Equity Awards Table
The following table discloses
for each named executive officer all shares of our Common Stock underlying unexercised options as of December 31, 2022.
Outstanding Equity Awards at December 31, 2022
| | |
Option Awards | | |
| |
Stock Awards | |
| Name | |
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(1) | | |
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(1)(2) | | |
Option
Exercise
Price
($) | | |
Option
Expiration
Date | |
Number of
Shares
or Units
of Stock
That Have
Not Vested
(#) | | |
Market
Value of
Shares or
Units of
Stock That
Have Not
Yet Vested
($) | |
| Edward R. Grauch | |
| 245,000 | | |
| 105,000 | (3) | |
| 0.880 | | |
10/29/2028 | |
| – | | |
| – | |
| | |
| 105,000 | | |
| 45,000 | (3) | |
| 0.880 | | |
10/29/2028 | |
| | | |
| | |
| | |
| 15,000 | | |
| 30,000 | | |
| 0.595 | | |
5/23/2030 | |
| | | |
| | |
| | |
| | | |
| 60,000 | | |
| 1.48 | | |
3/19/2031 | |
| | | |
| | |
| | |
| | | |
| 75,000 | | |
| 0.57 | | |
04/07/2032 | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| |
| | | |
| | |
| Eric Skolnik | |
| 25,000 | | |
| | | |
| 1.05 | | |
05/17/2022 | |
| – | | |
| – | |
| | |
| 25,000 | | |
| | | |
| 1.00 | | |
05/17/2023 | |
| | | |
| | |
| | |
| 25,000 | | |
| | | |
| 0.94 | | |
05/23/2024 | |
| | | |
| | |
| | |
| 37,500 | | |
| | | |
| 0.55 | | |
04/04/2027 | |
| | | |
| | |
| | |
| 42,500 | | |
| | | |
| 0.87 | | |
05/15/2028 | |
| | | |
| | |
| | |
| 13,333 | | |
| 6,667 | | |
| 1.095 | | |
04/03/2029 | |
| | | |
| | |
| | |
| 15,000 | | |
| 30,000 | | |
| 0.595 | | |
05/22/2030 | |
| | | |
| | |
| | |
| | | |
| 60,000 | | |
| 1.48 | | |
03/19/2031 | |
| | | |
| | |
| | |
| | | |
| 75,000 | | |
| 0.57 | | |
04/07/2032 | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| |
| | | |
| | |
| Ronald Alterio | |
| 150,000 | | |
| | | |
| 1.19 | | |
08/16/2028 | |
| – | | |
| – | |
| | |
| | | |
| 50,000 | (4) | |
| 1.39 | | |
08/31/2028 | |
| | | |
| | |
| | |
| 21,667 | | |
| 43,333 | | |
| 0.595 | | |
05/22/2030 | |
| | | |
| | |
| | |
| | | |
| 60,000 | | |
| 1.48 | | |
03/19/2031 | |
| | | |
| | |
| | |
| | | |
| 75,000 | | |
| 0.57 | | |
04/07/2032 | |
| | | |
| | |
| (1) | Unless otherwise noted, all option
awards were made under the A&R 2005 Employee Plan or the 2016 Employee Plan. |
| (2) | Unless otherwise noted, all options
vest in three equal installments on the first, second and third anniversaries of the date of grant. |
| (3) | The vesting schedule for these
options is (i) options with respect to 100,000 shares vest on each of the first two anniversaries of Mr. Grauch’s date of employment
and (ii) options with respect to 150,000 shares vest on each of the third and fourth anniversaries of Mr. Grauch’s date of employment. |
| (4) | These options vest four years
following the date of grant. |
Compensation of Directors
Summary Compensation Table – Director
Compensation
The following table discloses
the actual compensation paid to or earned by each of our Directors who is not also a named executive officer in fiscal year 2022:
| Name | |
Fees
Earned or
Paid in
Cash
($)(1) | | |
Stock and
Option
Awards
($)(2) | | |
All Other
Compensation
($) | | |
Total
($) | |
| John Burke | |
| 0 | | |
| 26,542 | (3) | |
| – | | |
| 26,542 | |
| Charles E. Dietz | |
| 0 | | |
| 26,542 | (3) | |
| – | | |
| 26,542 | |
| Michael Hawkey | |
| 0 | | |
| 26,542 | (3) | |
| – | | |
| 26,542 | |
| Stephen K. Necessary | |
| 0 | | |
| 26,542 | (3) | |
| – | | |
| 26,542 | |
| Gary P. Scharmett | |
| 0 | | |
| 26,542 | (3) | |
| – | | |
| 26,542 | |
| Steven L. Shea | |
| 0 | | |
| 26,542 | (3) | |
| – | | |
| 26,542 | |
| James F. Williams | |
| 0 | | |
| 26,542 | (3) | |
| – | | |
| 26,542 | |
| Robert J Pallé | |
| 0 | | |
| 26,542 | (3) | |
| – | | |
| 26,542 | |
| (1) |
Certain of our Directors have entered into deferred compensation agreements with the Company that give those Directors the ability to defer cash Director fees otherwise payable to them in exchange for the Company’s obligation to deliver shares of Common Stock to them or pay such deferred fees in cash to them in the future. During 2022, certain Directors received shares of Common Stock and/or cash based on deferrals agreed to by such Directors in 2021. |
| |
|
| (2) |
The amounts in the “Stock and Option Awards” column reflect (i) the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 and (ii) the value of the shares of Common Stock received by Directors who elected to defer cash Director fees and accept shares in lieu of cash when paid. Assumptions used in the calculation of the stock option award amounts are included in Note 17 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. |
| |
|
| (3) |
In 2022, each non-employee Director was granted an option to purchase 60,000 shares of Common Stock. |
Director Compensation Arrangements
In 2022, in light of the continuing
impact that COVID 19 and supply chain constraints were having on the Company’s business, the Board of Directors determined that
for the period January 1, 2022 through December 31, 2022 (the “Adjusted Compensation Period”), it would eliminate all
cash and unrestricted-stock based compensation (comprising the retainer and Committee service fees) otherwise payable to the directors
and in lieu thereof grant to each Director non-qualified options to acquire 60,000 shares of the Company’s common stock.
In 2023, due to the continuing impact of COVID 19 as well as supply
chain constraints on the Company’s business, the Board of Directors determined that for the period from January 1, 2023 through
December 31, 2023 it would pay to each non-employee Director cash compensation of $1,000 per calendar month and grant to each non-employee
Director non-qualified options to acquire 40,000 shares of the Company’s common stock. The Board reserves the right to further modify
or eliminate the foregoing adjustments to Director compensation in its discretion. We reimburse each Director for certain travel, lodging
and related expenses incurred in connection with attendance at Board and committee meetings. From time to time, in the sole discretion
of the Board, we grant equity awards to our non-employee Directors.
On March 19, 2015, the Board
adopted the Director Stock Purchase Plan, which was intended to enable outside Directors to allocate portions of their annual retainer
fees to be paid in shares of the Company’s Common Stock, in lieu of cash payments. This plan was designed and derived from the Executive
Stock Purchase Plan adopted by the Company in June 2014, which was intended to enable executive officers of the Company to allocate a
portion of their base salary to be paid in shares of the Company’s Common Stock, in lieu of cash. In March 2016, the Company adopted
the Amended and Restated Director Stock Purchase Plan, which replaced the Director Stock Purchase Plan. Under the Amended and Restated
Director Stock Purchase Plan (“A&R Director Stock Purchase Plan”), the portion of Directors’ fees (including
meeting fees, which were not permitted to be converted into Common Stock purchases under the Director Stock Purchase Plan) permitted to
be paid in shares of the Company’s Common Stock, in lieu of cash, was increased and the new plan was made more flexible to encourage
the non-employee Directors to elect to receive shares of the Company’s Common Stock in lieu of cash payments. In November 2016,
the Company adopted the Second Amended and Restated Director Stock Purchase Plan, which replaced the A&R Director Stock Purchase Plan.
Under the Second Amended and Restated Director Stock Purchase Plan (“Second A&R Director Stock Purchase Plan”),
Directors were permitted to submit notices from time to time to the Company, deferring payment to such Director of all or a portion of
the directors fees due or to become due to such director to a future date, not later than the last day of the first calendar quarter of
the following calendar year. Director’s fees deferred under the Second A&R Director Stock Purchase Plan, in all cases are deemed
to have been paid in the calendar year earned, even if payment thereof is deferred to the first quarter of the following calendar year.
In August 2020, the Company adopted the Third Amended and Restated Director Stock Purchase Plan, which replaced the Second A&R Director
Stock Purchase Plan. Under the Third Amended and Restated Director Stock Purchase Plan (“Third A&R Director Stock Purchase
Plan”), certain timing restrictions were modified with regard to purchase dates falling outside of trading windows where the
proposed purchased date is more than 60 days after the date that a director submits a notice of election under the Third A&R Director
Stock Purchase Plan. In October 2020, the Third A&R Director Stock Purchase Plan was amended to modify the definition of “Fair
Market Value” in respect of any share of Common Stock purchased thereunder after October 12, 2020, as such definition would apply
when the Company’s Common Stock is traded on a National Securities Exchange, from the arithmetic mean of the high and low selling
price on the consolidated tape, to the official closing price on the consolidated tape.
Director Benefit Plans
In May 2005, our stockholders
approved the adoption of the Blonder Tongue Laboratories, Inc. 2005 Director Equity Incentive Plan (the “Original 2005 Director
Plan”). In May, 2014, our stockholders approved an amendment and restatement in its entirety of the Original 2005 Director Plan
(as amended and restated, the “A&R 2005 Director Plan”), effective as of February 7, 2014, which, among other things,
(i) increased the number of shares of Common Stock available for issuance under the A&R 2005 Director Plan, (ii) extended the term
of the A&R 2005 Director Plan to February 7, 2024, (iii) made awards under the A&R 2005 Director Plan subject to clawback provisions
under applicable law or under policies that may be adopted by us from time to time, and (iv) prohibited repricing of stock options absent
advance stockholder approval.
The A&R 2005 Director
Plan is administered by our Board. Under the A&R 2005 Director Plan, Directors who are not currently employed by us or by any of our
subsidiaries and who have not been so employed within the past six months, are eligible to receive equity-based awards from time to time
as determined by our Board. Under the A&R 2005 Director Plan, eligible Directors may be awarded stock options to purchase a number
of shares of Common Stock (“Stock Options”), stock appreciation rights to receive the excess, if any, of the fair market
value of a specified number of shares of Common Stock at the time of exercise over the grant price (“SARs”) or stock
awards (“Stock Awards”) at no cost to the Director, which may be either restricted stock or unrestricted stock. Each
grant of Stock Options, SARs or Stock Awards will be subject to a written Award Agreement, which shall specify the terms and conditions
of the grant as determined by the Board; provided, however, that the exercise price for any Stock Options or SARs granted shall not be
less than the fair market value of the underlying Common Stock on the date of grant. The A&R 2005 Director Plan expires on February
7, 2024.
At our 2016 Annual Meeting,
our stockholders approved the adoption of the Blonder Tongue Laboratories, Inc. 2016 Director Equity Incentive Plan (the “2016
Director Plan”), which supplements the A&R 2005 Director Plan. In June, 2020, our stockholders approved an amendment of
the 2016 Director Plan, effective as of January 23, 2020, which increased the number of shares of Common Stock available for issuance
under the 2016 Director Plan from 400,000 shares to 900,000 shares. Thereafter, in October 2020, the 2016 Director Plan was amended to
modify the definition of “Fair Market Value” in respect of any Awards (as defined in the 2016 Director Plan) made after October
12, 2020, as such definition would apply when the Company’s Common Stock is traded on a National Securities Exchange, from the arithmetic
mean of the high and low selling price on the consolidated tape, to the official closing price on the consolidated tape. At our annual
meeting in 2022, stockholders approved an amendment to the 2016 Director Plan to increase the number of shares of Common Stock available
for issuance under the 2016 Director Plan from 900,000 shares to 1,650,000 shares.
The 2016 Director Plan is
administered by our Board. Under the 2016 Director Plan, Directors who are not currently employed by us or by any of our subsidiaries
and who have not been so employed within the six months preceding a grant, are eligible to receive equity-based awards from time to time
as determined by our Board. The 2016 Director Plan authorizes the award of up to a maximum of 1,650,000 shares. Any shares subject to
an award issued under the 2016 Director Plan which is terminated, canceled, expired or forfeited for any reason will again be available
for the grant of an award. Under the 2016 Director Plan, eligible Directors may be awarded Stock Options, SARs or Stock Awards, which
may be either restricted stock or unrestricted stock. Each grant of Stock Options, SARs or Stock Awards will be subject to a written Award
Agreement which shall specify the terms and conditions of the grant as determined by the Board; provided, however, that the exercise price
for any Stock Options or SARs granted shall not be less than the fair market value of the underlying Common Stock on the date of grant.
Awards under the 2016 Director Plan are subject to clawback provisions under applicable law or under policies that may be adopted by us
from time to time, and Stock Options awarded under the 2016 Director Plan cannot be re-priced absent advance stockholder approval. The
2016 Director Plan expires on February 4, 2026.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Security Ownership of Certain Beneficial Owners
and Management
The following table sets forth
certain information regarding beneficial ownership of our Common Stock as of April 14, 2023 by (i) each person who is known by us to beneficially
own more than five percent of our Common Stock, (ii) each of our Directors, (iii) each of our executive officers named in the Summary
Compensation Table below, and (iv) all our executive officers and Directors as a group. Except as otherwise indicated, the persons named
in the table have sole voting and investment power with respect to all shares that they beneficially own, subject to community property
laws where applicable.
| Name and Address of Beneficial Owner(1)(2) | |
Amount and Nature of Beneficial Ownership(1) | | |
Percent of Class Beneficially Owned | |
| Directors and Executive Officers: | |
| | |
| |
| | |
| | |
| |
| John Burke | |
| 102,684 | (4) | |
| 0.76 | % |
| Michael P. Censoplano | |
| 62,566 | (11) | |
| 0.47 | % |
| Charles E. Dietz | |
| 473,771 | (5) | |
| 3.50 | % |
| Michael Hawkey | |
| 102,183 | (10) | |
| 0.76 | % |
| Allen Horvath | |
| 359,956 | (12) | |
| 2.65 | % |
| Stephen K. Necessary | |
| 333,571
| (6) | |
| 2.47 | % |
| Robert J. Pallé | |
| 4,158,749 | (3) | |
| 27.57 | % |
| Gary P. Scharmett | |
| 468,581 | (7) | |
| 3.46 | % |
| Steven L. Shea | |
| 1,317,444 | (8) | |
| 9.39 | % |
| James F. Williams | |
| 414,173 | (9) | |
| 3.06 | % |
| All Directors and executive officers as a group (10 persons) | |
| 7,793,678 | | |
| 46.25 | % |
| | |
| | | |
| | |
| Additional Beneficial Owners: | |
| | | |
| | |
| | |
| | | |
| | |
| Carol M. Pallé | |
| 26,071 | (13) | |
| * % | |
| (1) | Beneficial ownership as of April
14, 2023 for each person listed includes shares subject to options held by such person which are exercisable within 60 days after such
date and the accrued principal amount of subordinated convertible indebtedness that may be converted into shares of our Comm Stock within
60 days of such date. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (“SEC”)
and generally includes voting or investment power with respect to securities, which voting or investment power may be further described
in the footnotes below. This table contains information furnished to us by the respective stockholders or contained in filings made with
the SEC. Certain of our executive officers and Directors may, from time to time, hold some or all of their Common Stock in brokerage
accounts having outstanding margin loan balances secured by the Common Stock and the other investment securities held in such brokerage
accounts. |
| (2) | Unless otherwise indicated, the
address for each beneficial owner is c/o Blonder Tongue Laboratories, Inc., One Jake Brown Road, Old Bridge, NJ 08857. |
| (3) | Includes (i) 200,000 shares of
Common Stock owned of record by a limited liability company of which Mr. Pallé and his spouse are the sole members, (ii) 2,249,525
shares of Common Stock jointly owned by Mr. Pallé and his spouse, (iii) 990,000 shares of Common Stock underlying options granted
by us to Mr. Pallé which are exercisable within 60 days after April 14, 2023, and (iv) 723,746 shares of Common Stock underlying
certain convertible indebtedness of the Company held by Mr. Pallé and his spouse, which is outstanding as of, and convertible
within 60 days after April 14, 2023. Mr. Pallé disclaims beneficial ownership of the 26,071 shares of Common Stock owned by his
spouse. See footnote 17 below. |
| (4) | Includes 98,798 shares of Common
Stock underlying options granted by us which are exercisable within 60 days after April 14, 2023. |
| (5) | Includes 180,000 shares of Common
Stock underlying options granted by us which are exercisable within 60 days after April 14, 2023. |
| (6) | Includes (i) 138,630 shares underlying
options granted by us that are exercisable within 60 days after April 14, 2023. |
| (7) | Includes 180,000 shares of Common
Stock underlying options granted by us which are exercisable within 60 days after April 14, 2023. |
| (8) | Includes (i) 180,000 shares underlying
options granted by us that are exercisable withing 60 days after April 14, 2023 and (ii) 482,563 shares underlying certain convertible
indebtedness of the Company held by Mr. Shea, which indebtedness is outstanding as of, and convertible within 60 days after April 14,
2023. Certain of the securities are beneficially owned by Mr. Shea through MidAtlantic IRA, LLC FBO Steven L. Shea IRA. |
| (9) | Includes 180,000 shares of Common
Stock underlying options granted by us which are exercisable within 60 days after April 14, 2023. |
| (10) | Includes 91,148 shares of Common
Stock underlying options granted by us which are exercisable within 60 days after April 14, 2023. |
| (11) | Includes 44,000 shares of Common
Stock underlying options granted by us which are exercisable within 60 days after April 14, 2023. |
| (12) | Includes 194,050 shares of Common
Stock underlying options granted by us which are exercisable within 60 days after April 14, 2023. |
| (13) | Carol M. Pallé is the spouse
of Robert J. Pallé. Includes (i) 200,000 shares of Common Stock owned of record by a limited liability company of which Mr. and
Mrs. Pallé are the sole members, (ii) 2,249,525 shares of Common Stock jointly owned by Mr. and Mrs. Pallé, (iii) 26,071
shares of Common Stock owned individually by Mrs. Pallé and (iv) 723,746 shares of Common Stock underlying certain convertible
indebtedness of the Company held by Mr. and Mrs. Pallé, which indebtedness is outstanding as of, and convertible within 60 days
after April 14, 2023. Mrs. Pallé disclaims beneficial ownership of all such shares of Common Stock other than the 26,071 shares
of Common Stock owned individually by Mrs. Pallé. Mrs. Pallé has entered into an agreement with Mr. Pallé granting
him voting and dispositive power with respect to the shares other than those owned individually by Mrs. Pallé. |
Equity Compensation Plan Information
The following table provides
certain summary information as of April 14, 2023 concerning our compensation plans (including individual compensation arrangements) under
which shares of our Common Stock may be issued.
| Plan Category | |
Number Of Securities To Be Issued Upon Exercise Of Outstanding Options, Warrants And Rights(#) | | |
Weighted-Average Exercise Price Of Outstanding Options, Warrants And Rights
($) | | |
Awards of Restricted And Unrestricted Shares
(#) | | |
Number Of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In The First Column)
(#) | |
| Equity Compensation Plans Approved By Security Holders | |
| 4,357,486 | (1) | |
$ | 0.805 | | |
| – | | |
| 597,694 | (2) |
| Equity Compensation Plans Not Approved By Security Holders | |
| 500,000 | | |
$ | 0.974 | | |
| – | | |
| – | |
| Total | |
| 4,857,486 | | |
$ | 0.823 | | |
| – | | |
| 597,694 | |
| (1) | Includes shares of our Common
Stock which may be issued upon the exercise of options or rights granted under (i) the A&R 2005 Employee Plan, (ii) the 2016 Employee
Plan, (iii) the A&R 2005 Director Plan and (iv) the 2016 Director Plan. |
| (2) | Includes 100,579 and 173,778 shares
of our Common Stock available for issuance as stock option grants, stock appreciation rights, restricted or unrestricted stock awards
or performance based stock awards under the A&R 2005 Employee Plan and the 2016 Employee Plan, respectively. Includes 833 and 323,337
shares of our Common Stock available for issuance as stock option grants, stock appreciation rights, or restricted or unrestricted stock
awards under the A&R 2005 Director Plan and 2016 Director Plan, respectively. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Certain Relationships and Related Person Transactions
On April 8, 2020, the Company,
as borrower, together with Livewire Ventures, LLC (wholly owned by the Company’s former Chief Executive Officer, Edward R. Grauch),
MidAtlantic IRA, LLC FBO Steven L. Shea IRA (an IRA account for the benefit of the Company’s Chairman of the Board, Steven Shea),
Carol M. Pallé and Robert J. Pallé (Mr. Pallé is our Chief Executive Officer and a Director), Anthony J. Bruno (a
Director), and Stephen K. Necessary (a Director), as lenders (collectively, the “Initial Lenders”) and Robert J. Pallé,
as Agent for the Lenders (in such capacity, the “Agent”) entered into a certain Senior Subordinated Convertible Loan
and Security Agreement (the “Subordinated Loan Agreement”), pursuant to which the lenders from time to time party thereto
may provide up to $1,500,000 of loans to the Company (the “Subordinated Loan Facility”). Interest accrues on the outstanding
amounts advanced under the Subordinated Loan Facility at the rate of 12% per annum, compounded and payable monthly, in-kind, by the automatic
increase of the principal amount of the loan on each monthly interest payment date, by the amount of the accrued interest payable at that
time (“PIK Interest”); provided, however, that at the option of the Company, it may pay interest in cash on any interest
payment date, in lieu of PIK Interest.
On April 8, 2020, the Initial
Lenders agreed to provide the Company with a Tranche A term loan facility of $800,000, of which $600,000 was advanced to the Company on
April 8, 2020, $100,000 was advanced to the Company on April 17, 2020 and $100,000 was advanced to the Company on January 12, 2021. The
Initial Lenders participating in the Tranche A term loan facility have the option of converting the principal balance of the loan held
by each of them, in whole (unless otherwise agreed by the Company), into shares of the Company’s Common Stock, at a conversion price
equal to the volume weighted average price of the Common Stock as reported by the NYSE American, during the five trading days preceding
April 8, 2020 (the “Tranche A Conversion Price”) which was calculated at $0.593. The conversion right was subject to
stockholder approval as required by the rules of the NYSE American, and such approval was obtained on June 11, 2020 at the Company’s
2020 Annual Meeting.
On April 24, 2020, the Company,
the Initial Lenders and Ronald V. Alterio (the Company’s former Senior Vice President-Engineering and Chief Technology Officer)
and certain additional unaffiliated investors (the “Additional Lenders,” and, together with the Initial Lenders, the
“Lenders”) entered into the First Amendment to Senior Subordinated Convertible Loan and Security Agreement and Joinder
(the “Amendment”). The Amendment provides for the funding of $200,000 of additional loans as a Tranche B term loan
under the Subordinated Loan Facility established under the Subordinated Loan Agreement, with such loans being provided by the Additional
Lenders. The Amendment also sets the conversion price of $0.55 (the “Tranche B Conversion Price”) with respect to the
right of the Additional Lenders to convert the accreted principal balance of the loans held by each of them into shares of the Company’s
Common Stock. The terms and conditions of the conversion rights applicable to the Initial Lenders and the Additional Lenders are otherwise
identical in all material respects, including the terms restricting conversion to an aggregate amount of shares of Common Stock that would
not result in the Company’s non-compliance with NYSE American rules requiring stockholder approval of issuances or potential issuances
of shares in excess of the percentage limits specified therein or in an amount that may be deemed to constitute a change of control under
such rules. These restrictions terminated as the requisite stockholder approval was obtained on June 11, 2020 at the Company’s 2020
Annual Meeting.
As of March 31, 2023, the amount owed (including accrued PIK Interest)
under the Subordinated Loan Facility to each of the related persons identified above is: (i) Livewire Ventures, LLC (Edward R. Grauch):
$272,545; (ii) MidAtlantic IRA, LLC FBO Steven L. Shea IRA (Steven Shea): $285,408; (iii) Carol M. Pallé and Robert J. Pallé:
$428,112; and (iv) Ronald V. Alterio: $35,420. On January 21, 2022, Stephen K. Necessary converted the $61,908 owed him under the Subordinated
Loan Facility into 104,399 shares of Common Stock.
The Subordinated Loan Agreement,
including all amendments thereto, and the transactions contemplated thereby were approved by the members of the Board who are not parties
to, and have no personal interest in, the Subordinated Loan Agreement and related transactions.
On April 5, 2022, the Company entered into a Ninth Amendment to Loan
and Security Agreement (All Assets) (the “MidCap Loan Agreement”) with MidCap Business Credit LLC (“MidCap”).
Among other things, the amendment modified the MidCap Loan Agreement’s definition of “Borrowing Base” so as to provide
for an over-advance facility (the “2022 Over-Advance Facility”) in an aggregate amount of up to $1,000,000. MidCap’s
agreement to enter into the Ninth Amendment was conditioned, in part, on the entry into a participation agreement between MidCap and Robert
J. Pallé, our Chief Executive Officer and a Director, and an affiliate of Mr. Pallé (the “Pallé Parties”).
The terms of the Ninth Amendment and the participation agreement contemplate that any advances made by Midcap pursuant to the 2022 Over-Advance
Facility would be funded by the Pallé Parties under the participation agreement. Advances under the 2022 Over-Advance Facility
are subject to the discretion of MidCap and the Pallé Parties. On October 28, 2022, the Company and Midcap entered into an agreement
to, among other things, increase the 2022 Over-Advance Facility to $1,500,000. On April 5, 2022, pursuant to the 2022 Over-Advance Facility
and the participation agreement, the Pallé Parties funded an initial advance of $200,000 that was provided to the Company. Additional
advances of $450,000, $200,000, $125,000were made in April 2022, May 2022 and June 2022, respectively, by Midcap to the Company, which
were funded by the Pallé Parties. Further advances may be made to the Company upon its request, subject to the discretion of MidCap
and the Pallé Parties, in minimum amounts of not less than $100,000 per tranche. The amount advanced in each tranche will bear
an interest rate of 1% per month.
In addition, one of our Directors, Gary P. Scharmett, was, until December
31, 2022, a partner at the law firm of Stradley Ronon Stevens & Young, LLP, which served as our outside counsel until June 2022. For
the 2022 and 2021 fiscal years, we were billed fees for legal services by this firm in the aggregate amount of $342,512 and $548,384,
respectively. Mr. Scharmett’s interest in these fees arises from his minority ownership interest as a partner at this firm. In the
Company’s opinion, the terms of such services were substantially equivalent to those which would have been obtained from unaffiliated
parties.
Related Person Transaction Approval Policy
The Company’s Ethics
Code includes policies with respect to situations and transactions that may involve a conflict of interest, including transactions with
related persons. Under the Ethics Code, the Audit Committee has the responsibility to consider and approve any transaction in which a
related party may have a conflict of interest, based on a determination by the Audit Committee that the transaction is fair as to, and
in the best interests of, the Company and its stockholders.
Director Independence
The Board of Directors has
considered the independence of our Directors pursuant to Section 803A of the NYSE American Company Guide (“Independence Rules”).
Under the Independence Rules, a Director may not be determined to be independent if certain specified relationships exist. In addition
to reviewing whether any of those specific disqualifying relationships exist under the Independence Rules, the NYSE American also requires
that the Board determine whether any of our Directors has a relationship that the Board believes would interfere with the exercise of
independent judgment in carrying out the responsibilities of a Director. In addition, with respect to our Audit Committee, Exchange Act
Rule 10A-3 sets certain standards for “independence” for purposes of eligibility for membership on the Company’s Audit
Committee, and the Board must assess and make determinations regarding the independence of Directors for purposes of service on the Audit
Committee under those standards.
In the course of the Board’s consideration and determinations
as to these matters, the Board reviewed, among other factors, the matters described above under “Certain Relationships and Related
Transactions.” In particular, the Board considered the status of Messrs. Shea and Necessary as creditors of the Company under the
Senior Subordinated Convertible Loan and Security Agreement, as amended to date, and also considered Mr. Scharmett’s role as a partner
in a law firm providing a variety of legal services to the Company. Based on a review of the surrounding facts and circumstances, the
Board determined that these transactions and relationships did not fall within one or more of the disqualifying relationships under the
Independence Rules or would otherwise interfere with the exercise of each noted Director’s independent judgment in carrying out
the responsibilities of a Director, and also that these transactions and relationships would not disqualify Mr. Shea from service on the
Company’s Audit Committee. In its consideration and determinations as to these matters, the Board also considered Mr. Pallé’s
current (since March 17, 2023) and recent (until December 31, 2019) service as the Company’s Chief Executive Officer and his service
through December 31, 2020 as Managing Director of Strategic Accounts.
Based on the matters described
above and other factors the Board deemed relevant, the Board has determined that, except for Robert J. Pallé, each of our Directors
is independent pursuant to the Independence Rules and that each member of the Audit Committee is independent pursuant to the Independence
Rules and Rule 10A-3. Accordingly, the current Board consists of a majority of independent Directors and the Audit Committee consists
entirely of independent Directors.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit and Other Fees Paid to Independent Registered
Public Accounting Firm
The following table presents
fees billed by Marcum LLP for professional services rendered for the years ended December 31, 2022 and December 31, 2021.
| Services Rendered | |
2022 | | |
2021 | |
| Audit Fees | |
$ | 265,537 | | |
$ | 227,168 | |
| Audit-Related Fees | |
| 19,055 | | |
| 116,133 | |
| Tax Fees | |
| 25,750 | | |
| 25,774 | |
| All Other Fees | |
| – | | |
| – | |
| Total Fees | |
$ | 310,342 | | |
$ | 369,075 | |
Audit Fees
The audit fees for fiscal
years 2022 and 2021 were billed or expected to be billed for professional services rendered by Marcum LLP for the audit of our annual
financial statements, the audit of our internal controls over financial reporting, the reviews of the financial statements included in
our Quarterly Reports on Form 10-Q, and assistance with earnings announcements furnished by us in our Current Reports on Form 8-K.
Audit-Related Fees
The audit-related fees for
fiscal years 2022 and 2021 consisted principally of audits of our pension and 401(k) plans, and costs incurred related to our registration
statements.
Tax Fees
Tax fees for fiscal years
2022 and 2021 consisted principally of preparing our U.S. federal and state income tax returns.
Our Audit Committee has reviewed
the non-audit services currently provided by our independent registered public accounting firm during 2022 and 2021 and has considered
whether the provision of such services is compatible with maintaining the independence of such independent registered public accounting
firm in performing its audit services. Based on such review and consideration, the Audit Committee has determined that the provision of
such non-audit services is compatible with maintaining the independence of the independent registered public accounting firm.
Pre-Approval Policy for Services by Independent
Registered Public Accounting Firm
Our Audit Committee has implemented
pre-approval policies and procedures for the engagement of our independent registered public accounting firm for both audit and permissible
non-audit services. Under these policies and procedures, all services provided by the independent registered public accounting firm must
either (i) be approved by our Audit Committee prior to the commencement of the services, (ii) relate to assisting us with tax audits
and appeals before a taxing authority or be services associated with periodic reports or registration statements filed by us with the
SEC, all of which services are pre-approved by our Audit Committee, or (iii) be a de minimis non-audit service (as described in Rule
2-01(c)(7)(i)(C) of the SEC’s Regulation S-X) that does not have to be pre-approved as long as management promptly notifies our
Audit Committee of such service and our Audit Committee approves it prior to the service being completed. Within these parameters, our
Audit Committee annually approves the scope and fees payable for the year end audit, statutory audits and employee benefit plans audits
to be performed by the independent registered public accounting firm for the next fiscal year. Our Audit Committee also may delegate
pre-approval authority for permissible non-audit services to the Audit Committee’s Chairman. Any approvals of non-audit services
made by our Audit Committee’s Chairman are then reported by him at the next Audit Committee meeting. All of the services provided
by our independent registered public accounting firm during fiscal year 2022 and fiscal year 2021 were approved in accordance with our
pre-approval policies and procedures. None of the services were approved pursuant to Rule 2-01(c)(7)(i)(C) of the SEC’s Regulation
S-X.
All schedules for which provision
is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the applicable instructions
or are inapplicable and therefore have been omitted.