UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
INFORMATION
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Proxy Statement
Pursuant to Section 14(a) of the Securities
Exchange Act of
1934
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(Amendment
No. )
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Filed by the Registrant
☑
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Filed by a party other than the Registrant ☐
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Check the appropriate box:
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☑ Preliminary
Proxy Statement
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☐ Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
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☐ Definitive Proxy Statement
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☐ Definitive
Additional Materials
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☐ Soliciting
Material under §240. 14a-12
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MECHANICAL
TECHNOLOGY, INCORPORATED
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(Name of Registrant
as Specified in Its Charter)
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(Name of Person(s)
Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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☑ No fee
required
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☐ Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11
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(1) Title
of each class of securities to which transaction applies:
____________________________________________________________________
(2) Aggregate
number of securities to which transaction applies:
____________________________________________________________________
(3) Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11
(set forth the amount on which the filing fee is
calculated and state how it was determined):
____________________________________________________________________
(4) Proposed
maximum aggregate value of transaction:
____________________________________________________________________
(5) Total
fee paid:
____________________________________________________________________
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☐ Fee paid
previously with preliminary materials.
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☐ Check box if
any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which
the offsetting fee was paid previously. Identify the previous filing
by registration statement
number, or the Form or Schedule and the date of its filing.
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(1) Amount
Previously Paid:
___________________________________________________________
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Schedule or Registration Statement No.:
___________________________________________________________
(3) Filing
Party:
___________________________________________________________
(4) Date
Filed:
___________________________________________________________
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MECHANICAL TECHNOLOGY,
INCORPORATED
325 WASHINGTON AVENUE EXTENSION
ALBANY, NEW YORK 12205
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
To the Stockholders of Mechanical Technology, Incorporated:
NOTICE IS HEREBY GIVEN that the 2021 Annual Meeting of Stockholders (the "Annual
Meeting") of Mechanical Technology, Incorporated, a
Nevada corporation (the "Company"), will be held on
Wednesday, June 9, 2021, at 10:00 a.m. The Annual Meeting will be held completely virtually. You will be able to participate in
the Annual Meeting as well as vote and submit your questions and examine our
stockholder list during the live webcast of the Annual Meeting by
visiting www.virtualshareholdermeeting.com/MKTY2021 and entering the
16-digit control number included on your proxy card (the "Proxy Card"). At the Annual Meeting,
stockholders will be asked to consider and act upon the following matters:
1. To elect two directors to serve for a three-year term ending at the
Company's annual meeting of stockholders to be held in 2024 and until each such
director's successor is duly elected and qualified.
2. To ratify the appointment of UHY LLP as the Company's registered
independent public accounting firm for fiscal year 2021.
3. To approve an amendment to the Company's Articles of Incorporation to
increase the maximum number of directors constituting the entire Board of
Directors of the Company from nine to 10.
4. To approve a non-binding advisory proposal to approve the compensation
paid to the Company's named executive officers.
5. To approve a non-binding advisory proposal on the frequency of the
stockholder advisory vote on executive compensation.
6. To transact such other business as may properly come before the meeting.
The Board of Directors has fixed
the close of business on April 14, 2021 as the record date for determining
stockholders entitled to notice of, and entitled to vote at, the Annual Meeting
and any adjournments or postponements thereof. Only holders of record of the
Company's common stock at the close of business on that date will be entitled
to notice of, and to vote at, the Annual Meeting and any adjournments or
postponements thereof.
The Board of Directors recommends
that you vote in favor of the proposal for the election of the nominees as
directors of the Company, the ratification of UHY LLP as our independent
registered public accounting firm, the amendment to the Company's Articles of
Incorporation, and the non-binding advisory proposal on executive compensation,
and vote for the holding of advisory votes on executive officer compensation
every year.
By Order of the Board of Directors,
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/s/ Jessica L.
Thomas
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Jessica L. Thomas
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Chief Financial
Officer and Secretary
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Albany, New York
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April 30, 2021
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It is important
that your shares are represented and voted at the Annual Meeting. Whether or not you intend to be present
(virtually) at the meeting, please vote your shares according to the
instructions on the accompanying Proxy Card. The proxy is revocable and will
not be used if you attend and vote at the Annual Meeting and vote "in person"
at the meeting or otherwise provide notice of your revocation.
Important
Notice Regarding the Availability of Proxy Materials for the Stockholder
Meeting to Be Held on June 9, 2021: The proxy statement and annual report
to stockholders are available at:
www.proxyvote.com
MECHANICAL TECHNOLOGY,
INCORPORATED
325 WASHINGTON AVENUE EXTENSION
ALBANY, NEW YORK 12205
PROXY STATEMENT
This proxy statement ("Proxy
Statement") is furnished in connection with the solicitation of proxies by the
Board of Directors (the "Board") of Mechanical Technology, Incorporated, a
Nevada corporation (referred to in this Proxy Statement as the "Company," "we,"
"us," or "MTI"), to be voted at the 2021 Annual Meeting of Stockholders of the
Company (the "Annual Meeting") to be held on Wednesday, June 9, 2020 at 10:00
a.m., local time. This Proxy Statement and the form of proxy relating to the
Annual Meeting are first being made available to stockholders on or about May 10,
2021.
Record Date and Voting Securities
The Notice of Annual Meeting,
Proxy Statement and Proxy Card are first being mailed to stockholders of the
Company on or about May 10, 2021 in connection with the solicitation of proxies
for the Annual Meeting. The Board has fixed the close of business on April 14,
2021 as the date of record (the "Record Date") for the determination of
stockholders entitled to notice of, and entitled to vote at, the Annual
Meeting. Only holders of record of our common stock, par value $0.001 per share
("Common Stock"), at the close of business on the Record Date will be entitled
to notice of, and to vote at, the Annual Meeting. As of the Record Date, there were 9,889,762 shares of Common
Stock outstanding and entitled to vote at the Annual Meeting. Each holder
of Common Stock outstanding as of the close of business on the Record Date will
be entitled to one vote for each share held as of the Record Date with respect
to each matter submitted to the stockholders at the Annual Meeting.
Proxies; Voting of Proxies
The Board is soliciting proxies
for use at the Annual Meeting, and such proxy will not be voted at any other
meeting. Michael Toporek is the person selected by the Board to serve as proxy
with respect to the Annual Meeting. Mr. Toporek is the Chief Executive Officer
of the Company.
Your vote is important. If you
are a stockholder of record, whether or not you plan to attend the Annual
Meeting via the live webcast, we urge you to submit your proxy to ensure that
your vote is counted. You may still view the live webcast of the Annual Meeting
and vote in person even if you have already voted by proxy. You may vote in one
of the following ways:
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Vote electronically at the Annual Meeting by attending the live webcast at www.virtualshareholdermeeting.com/MKTY2021
and follow the instructions on how to vote electronically.
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Vote online by going to www.proxyvote.com
and follow the instructions provided.
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Vote by phone by calling 1-800-690-6903 and follow the recorded
instructions.
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Vote by mail by voting, signing, and timely mailing your proxy
card.
The shares represented by each
proxy will be voted in accordance with the directions specified thereby. If you
return a properly executed proxy card but do not fill out the voting
instructions on the proxy card or if you indicate when voting on the Internet
or over the telephone that you wish to vote as recommended by the Board, the shares
represented by your proxy, assuming it is not properly revoked pursuant to the
instructions below, will be voted by the person named as proxy in accordance
with the recommendations of the Board contained in this Proxy Statement.
The Board knows of no matters to
be presented at the Annual Meeting other than those described in this Proxy
Statement. In the event that other business properly comes before the meeting,
the person named as proxy will have discretionary authority to vote the shares
represented by any properly provided proxy in accordance with his own judgment.
Revocation of Proxies
Each stockholder giving a proxy
has the power to revoke it at any time before the shares represented by that
proxy are voted. A proxy may be revoked, prior to its exercise, by (i)
executing and delivering a later-dated proxy via the Internet, via telephone,
or by mail; (ii) delivering written notice of revocations of the proxy to our
Secretary prior to the Annual Meeting; or (iii) logging on to the live webcast
of the Annual Meeting and voting as directed at the Annual Meeting. Please note
that a stockholder's attendance at the live webcast of the Annual Meeting will
not, by itself, revoke such stockholder's proxy.
Subject to the terms and
conditions set forth herein, all proxies received by us will be effective,
notwithstanding any transfer of the shares to which such proxies relate, unless
at or prior to the Annual Meeting we receive a written notice of revocation
signed by the person who, as of the Record Date, was the registered holder of
such shares. The notice of revocation must indicate the certificate number(s)
and number of shares to which such revocation relates and the aggregate number
of shares represented by such certificate(s).
If your shares are held in "street
name," as discussed below under the heading "Beneficial Owner: Shares
Registered in the Name of Broker, Bank, or other Nominee," you must contact
your broker, bank, or other nominee to revoke any prior voting instructions.
Beneficial Owner: Shares Registered in the Name of
Broker, Bank, or other Nominee
Many shares of Common Stock are
held in "street name," meaning that a depository, broker-dealer, or other
financial institution holds the shares in its name, but such shares are
beneficially owned by another person. If your shares of Common Stock are held
in street name as of the Record Date, you should receive instructions from the
holder of record that you must follow in order for you to specify how your
shares will be voted at the Annual meeting; alternatively, you can use the
voting information form provided by Broadridge to instruct your record owner on
how to vote your shares. Generally, a street name holder that is a broker must
receive direction from the beneficial owner of the shares to vote on issues
other than certain limited routine, uncontested matters, such as the
ratification of auditors. In the case of non-routine or contested items, the
brokerage institution holding street name shares cannot vote the shares if it
has not received voting instructions from the beneficial holder thereof. A
broker "non-vote" occurs when a proxy is received from a broker but the shares
represented by such proxy are not voted on a particular matter because the
broker has not received instructions from the beneficial owner or other persons
entitled to vote shares on a particular matter with respect to which the broker
does not have discretionary power to vote the shares.
If your shares are held of record
by a person or institution other than a broker, whether such nominee can
exercise discretionary authority to vote your shares on any matter at the
Annual Meeting in the absence of instructions from you will depend on your
individual arrangement with that nominee record holder, in particular, whether
you have granted such record holder discretionary authority to vote your
shares. In the absence of an arrangement with your record holder granting such
discretionary authority, your record holder nominee will not have discretionary
authority to vote your shares on any matter at the Annual Meeting in the
absence of specific voting instructions from you.
If, as of the Record Date, your shares of Common Stock were
held in an account at a broker, bank, or other nominee, then you are the
beneficial owner of shares held in "street name" and the proxy materials are
being forwarded to you by that organization. The organization holding your
account is considered the stockholder of record. As a beneficial owner, you may
direct your broker, bank, or nominee how to vote the shares in your account or
"vote" (provide instructions) online at the Annual Meeting using the 16-digit
control number included on your voting instruction form or otherwise provided
by the organization that is the record holder of your shares.
2
Quorum and Method of Tabulation
The presence, in person or by
proxy, of holders of 33 1/3% of the total number of outstanding shares of
Common Stock entitled to vote is necessary to constitute a quorum for the
transaction of business at the Annual Meeting. A quorum being present, the
affirmative vote of a plurality of the votes cast is necessary to elect the
nominees as directors of MTI, as set forth in Proposal No. 1. In other words,
the nominees to receive the greatest number of votes cast, up to the number of
nominees up for election, will be elected.
Assuming a quorum is present,
Proposal 2 (ratification of the registered independent public accounting firm)
and Proposal 4 (non-binding advisory vote on executive compensation) will be
approved by our stockholders if the number of votes cast in favor of the
proposal exceeds the number of votes cast against the proposal.
Assuming a quorum is present,
Proposal 3 (amendment to the Articles of Incorporation to increase the maximum
number of directors constituting the entire Board of Directors of the Company
from nine to 10) will be approved if stockholders holding at least a majority
of the outstanding shares of Common Stock as of the Record Date approve the
proposal.
With respect to Proposal 5, the
frequency (one year, two years, or three years) that receives the highest
number of votes cast by our stockholders will be deemed the frequency preferred
by the stockholders. When voting or providing their proxy, stockholders will
have the opportunity to choose among four options (holding the vote on
executive compensation every one, two, or three years, or abstaining) and,
therefore, stockholders will not be voting for or against this proposal.
One or more inspectors of
election appointed for the meeting will tabulate the votes cast in person or by
proxy at the Annual Meeting, and will determine whether or not a quorum is
present. The inspectors of election will treat abstentions as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum, but as not cast for purposes of determining the vote on any matter
submitted to stockholders. As abstentions are not included in calculating votes
cast with respect to any proposal, abstentions will have no effect on the
outcome of the election of directors or any other proposal submitted to stockholders
at the Annual Meeting.
If a
broker submits a proxy indicating that it does not have discretionary authority
as to certain shares to vote on a particular matter, those shares will be
treated as shares that are present and entitled to vote for purposes of
determining quorum, but as not cast for purposes of determining the vote on
such matter submitted to the stockholders for
a vote. As a result, broker non-votes will have no effect on the outcome
of the election of directors or on Proposals 2, 3, 4, or 5.
Format of and Admission to the Annual Meeting
This year, primarily in light of the
continued public health impact of the COVID-19 pandemic, we will hold the
Annual Meeting in a virtual-only format, which will be conducted over the
internet via live webcast. In addition, we may continue to hold our annual
meetings using a virtual-only format in future years, even after the pandemic,
as we believe that a virtual format is more environmentally-friendly, allows
greater stockholder participation, and decreases the costs of holding the
annual meeting. We intend to hold our virtual annual meetings in a manner that affords stockholders the same general rights and opportunities to participate, to
the greatest extent possible, as they would have at an in-person meeting.
The
Annual Meeting will be held live via the Internet on Wednesday, June 9, 2021 at
10:00 a.m. Eastern Time, at www.virtualshareholdermeeting.com/MKTY2021. You will not be able to attend the meeting in person.
Participation in and attendance at the Annual Meeting is limited to our stockholders
of record as of the close of business on April 14,
2021, and other persons holding valid proxies for the Annual Meeting. Online
access will begin at 9:45 a.m. Eastern Time, on June 9, 2021, and we encourage
you to access the Annual Meeting prior to the start time. To be admitted to the
Annual Meeting at www.virtualshareholdermeeting.com/MKTY2021, you must enter the 16-digit control number included on your proxy card or, for beneficial owners of shares held in "street name" as
discussed above the heading "Beneficial Owner: Shares Registered in the
Name of Broker, Bank, or other Nominee," on your voter information form. If you encounter difficulties accessing the virtual
meeting, please call the technical support number that will be posted at www.virtualshareholdermeeting.com/MKTY2021.
3
Stockholders will be able to submit questions via
the online platform during a portion of the Annual Meeting. You may submit
questions by signing into the virtual meeting platform at www.virtualshareholdermeeting.com/MKTY2021 , typing a question into the "Ask a
Question" field, and clicking "submit." Only questions that are pertinent to
meeting matters will be answered during the Annual Meeting, subject to time
constraints. Questions regarding personal matters or matters not relevant to
the Annual Meeting will not be answered. If we receive substantially similar
questions, we will group them together to avoid repetition. If there are
questions pertinent to meeting matters that cannot be answered during the
meeting due to time constraints, we will post answers to a representative set
of such questions at https://www.mechtech.com/investors/. The questions and answers will be
available as soon as practicable after the Annual Meeting.
Householding of Annual Meeting Materials
Some banks, brokers and other
nominee record holders may be participating in the practice of "householding"
proxy statements and annual reports. This means that only one copy of our Proxy
Statement or annual report to stockholders may have been sent to multiple
stockholders who share an address unless we have received instructions to the
contrary. We will promptly deliver a separate copy of either document to any
stockholder upon written or oral request. Requests may be made by mail to:
Mechanical Technology, Incorporated, ATTN: Investor Relations Department, 325
Washington Avenue Extension, Albany, New York 12205; by e-mail:
contact@mechtech.com; or by telephone: (518) 218-2550. Any stockholder who
would like to receive separate copies of our annual proxy statement and/or
annual report to stockholders in the future, or any stockholder who is receiving
multiple copies and would like to receive only one copy per household in the
future, should contact their bank, broker, or other nominee record holder, or
us directly at the address, e-mail address or phone number listed above.
Proxy Solicitation Expense
We do not anticipate engaging a
paid proxy solicitor to assist with the solicitation of proxies for the Annual
Meeting. Our directors, officers, and employees, without receiving any
additional compensation, may solicit proxies personally or by telephone,
facsimile, or email. The Company will pay all costs and expenses incurred in
the solicitation of proxies for the Annual Meeting. We will also reimburse
banks, brokers, and other nominees for reasonable expenses incurred in
forwarding proxy materials to their customers or principals who are the
beneficial owners of shares of Common Stock held in street name.
PROPOSAL No. 1
ELECTION OF DIRECTORS
We currently have eight directors
on the Board. At the Annual Meeting, two directors are to be elected to hold
office until the expiration of their term and until a qualified successor shall
be elected and qualified. The directors serve staggered three-year terms.
Listed below are the directors nominated for election at the
Annual Meeting.
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Position with the Company
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Edward R. Hirshfield
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Director
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49
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2016
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2024
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William P. Phelan
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Director
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64
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2004
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2024
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The Board has nominated Edward R. Hirshfield
and William P. Phelan to each serve a three-year term, expiring at the
2024 annual meeting of stockholders. Edward R. Hirshfield and William P. Phelan
are each completing their final year of their three-year term, expiring at the
Annual Meeting.
4
All of our directors bring to the Board significant leadership experience
derived from their professional experience and service as executives or board
members of other corporations. The process undertaken by the Governance and
Nominating Committee in recommending qualified director candidates is described
below under "Board of Directors Meetings and Committees - Governance and
Nominating Committee." Certain individual qualifications and skills of our
directors that contribute to the Board's effectiveness as a whole are described
under "Information about Our Directors."
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR
ALL" OF THE NOMINEES LISTED ABOVE AS DIRECTORS OF THE COMPANY.
Information about Our Directors
Set forth below is certain
information regarding the directors of the Company, including the nominees for
election at the Annual Meeting.
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Nominees for a Term Expiring in 2024
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Edward R. Hirshfield (4)
(8)
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49
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2016
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William P. Phelan (3) (4)
(7)
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64
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2004
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Terms Expiring in 2022
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Matthew E. Lipman (2) (7)
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42
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2016
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Alykhan Madhavji (5)
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30
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2021
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David C. Michaels (2) (4)
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65
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2013
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Terms Expiring in 2023
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William Hazelip (3) (8)
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42
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2021
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Thomas J. Marusak (1) (6)
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70
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2004
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Michael Toporek
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56
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2016
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(1) Member of the Compensation Committee during 2020.
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(2) Member of the Compensation Committee during 2020 and
through March 9, 2021.
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(3) Member of the Compensation Committee effective March
9, 2021.
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(4) Member of the Audit Committee during 2020.
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(5) Member of the Audit Committee effective March 9, 2021.
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(6) Member of the Governance and Nominating Committee
during 2020.
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(7) Member of the Governance and Nominating Committee
during 2020 and through March 9, 2021.
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(8) Member of the Governance and Nominating Committee
effective March 9, 2021.
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The Board has determined that
Messrs. Hazelip, Hirshfield, Madhavji, Marusak, Michaels, and Phelan are
"independent directors," as defined by the rules and listing standards of The
Nasdaq Stock Market LLC. In making this determination, the Board considered the
transactions and relationships disclosed under "Certain Relationships and
Related Transactions" below.
Edward R.
Hirshfield has
served as a member of the Company's Board of Directors (the "Board") since
October 2016. He has also served as a Director of our subsidiary, MTI
Instruments, Inc., since October 2016 and of our subsidiary, EcoChain, Inc.
("EcoChain"), since its incorporation in January 2020. Since 2018, Mr.
Hirshfield has served as Managing Director in the restructuring group at B.
Riley FBR, Inc., a leading financial services provider, where he advises
stressed and distressed companies and their constituencies. From 2015 until
2018, Mr. Hirshfield served as a partner at Steppingstone Group, LLC, a special
situations private equity fund located in New York. Mr. Hirshfield's
responsibilities in this role included business development activities,
conducting extensive credit analysis on target companies, as well as portfolio
management. Mr. Hirshfield began his career as a loan officer at CIT Group Inc.
and then became a restructuring advisor at a boutique investment bank, CDG
Group. In 2003, Mr. Hirshfield moved over to the buy side and joined Longacre
Fund Management, LLC, a $2.5 billion distressed debt fund. Mr. Hirshfield
continued as a distressed investor at Del Mar Asset Management, LP, Ramius LLC,
and most recently CRG, LLC from 2012 through 2014. At CRG, LLC, Mr. Hirshfield
was responsible for identifying and managing investments in distressed
situations and conducting extensive research on potential investments. Mr.
Hirshfield has a B.S. in Applied Mathematics from Union College and an M.B.A.
from Fordham University Graduate School of Business. Mr. Hirshfield brings over
20 years of experience understanding and analyzing public and private
companies. He has an expertise in providing operational and investment
recommendations as well as providing extensive valuation and credit analysis,
which the Board believes qualifies him to serve as a director.
5
William P. Phelan has served as a member of the Board since December 2004. He
also served as interim Chief Executive Officer and President of EcoChain from
March 2020 to November 2020, and as interim Vice President of EcoChain from
November 2020 to March 2021. Mr. Phelan is the co-founder and Chief Executive
Officer of Bright Hub, Inc., a software company founded in 2005 that focuses on
the development of online software for commerce. In May 1999, Mr. Phelan
founded OneMade, Inc., an electronic commerce marketplace technology systems
and tools provider. Mr. Phelan served as Chief Executive Officer of OneMade,
Inc. from May 1999 to May 2004, including for a year after it was sold to, and
remained a subsidiary of, America Online. Mr. Phelan serves on the Board of
Trustees and is a Finance Committee member and an Investment Committee Chair
for Capital District Physician's Health Plan, Inc. Mr. Phelan also serves on
the Board of Trustees and Chairman of the Audit Committee of the Paradigm
Mutual Fund Family. He has also held numerous executive positions at Fleet
Equity Partners, Cowen & Company, First Albany Corporation, and UHY
Advisors, Inc., formerly Urbach Kahn & Werlin, PC. Mr. Phelan has a B.A. in
Accounting and Finance from Siena College and an M.S. in Taxation from City
College of New York, and is a Certified Public Accountant. Mr. Phelan
contributes leadership, capital markets experience, and strategic insight as
well as innovation in technology to the Board, which the Board believes
qualifies him to serve as a director.
Matthew E. Lipman has served as a member of the Board since October 2016.
Since 2004, Mr. Lipman has served as Managing Director of Brookstone Partners,
a lower middle market private equity firm based in New York and an affiliate of Brookstone Partners Acquisition XXIV, LLC ("Brookstone
XXIV"). Mr. Lipman's responsibilities at Brookstone Partners include
identifying and evaluating investment opportunities, performing transaction due
diligence, managing the capital structure of portfolio companies, and working
with management teams to implement operational and growth strategies. In
addition, Mr. Lipman is responsible for executing add-on acquisitions and other
portfolio company-related strategic projects. From July 2001 through June 2004,
Mr. Lipman was an analyst in the mergers and acquisitions group at UBS
Financial Services Inc., responsible for formulating and executing on complex
merger, acquisition, and financing strategies for Fortune 500 companies in the
industrial, consumer products, and healthcare sectors. Mr. Lipman currently
serves on the Board of Directors of Instone, LLC, Denison Pharmaceuticals, LLC,
Virginia Abrasives Corporation, and Capstone Therapeutics Corp. Mr. Lipman has
a B.S. in Business Administration from Babson College. Mr. Lipman brings over
18 years of experience working with companies to establish growth strategies
and execute acquisitions, is proficient in reading and understanding financial
statements, generally accepted accounting principles, and internal controls as
a direct result of his investment experience evaluating companies for potential
investments and the management of financial reporting and capital structure for
three portfolio companies, as well as relevant experience in serving on other
boards of directors, which the Board believes qualifies him to serve as a
director. As part of our sale of 3,750,000 shares of our common stock, par
value $0.001 per share ("Common Stock"), to Brookstone XXIV in October 2016,
Brookstone XXIV has two designated directors that sit on the Board; Mr. Lipman
is one such director.
Alykhan Madhavji was appointed to the Board on
February 24, 2021. Mr. Madhavji has served as Managing Partner of Blockchain
Founders Fund, a seed and early-stage investment fund that focuses on adding
value to emerging technology and blockchain projects with real-world
applications, since 2018. Prior to that, Mr. Madhavji served as a Senior
Associate at PwC in its assurance and consulting division from 2012 through
2015. He has also served as a member of the Board of Directors of CryptoStar
Corp., a Canadian publicly-listed cryptocurrency producer, since August 2020.
Mr. Madhavji has served on various advisory boards including the University of
Toronto's Governing Council, which manages a $2.5 billion budget. Mr. Madhavji
consults leading organizations, including the United Nations (the "UN"), on
emerging technologies including Blockchain
and how technology can help these organizations to achieve the UN's Sustainable
Development Goals. Mr. Madhavji is a Limited
Partner at Loyal VC, a global venture capital fund focusing on early-stage
investing, and Draper Goren Holm, a Fintech Venture
Studio focused on investing in early-stage blockchain startups, a Senior
Blockchain Fellow at INSEAD, a non-profit, private university in France, in
which he supports the institution on being at the forefront of global digital
transformation, and is recognized as a "Blockchain
100" Global Leader by Lattice80. He is an internationally acclaimed author,
having published three books, and a frequent columnist for leading blockchain
publications. He holds a Bachelor of Commerce from the University of
Toronto, a Master of Business Administration from INSEAD, earned in 2017, and a
Master of Global Affairs, as a Schwarzman Scholar, from Tsinghua University,
earned in 2018. Mr. Madhavji has deep expertise in emerging technologies and
blockchain start-ups which the Board believes, particularly in light of the
Company's entry into the cryptocurrency mining sector in 2020, qualifies him to
serve as a director.
6
David C. Michaels has served as our Chairman of the Board since January 2017
and as a member of the Board since August 2013. Mr. Michaels served as the
Chief Financial Officer of the American Institute for Economic Research, Inc.,
an internationally-recognized economics research and education organization,
from October 2008 until his retirement in May 2018. Prior to that, Mr. Michaels
served as Chief Financial Officer at Starfire Systems, Inc. from December 2006
to September 2008. Mr. Michaels worked at Albany International Corp. from March
1987 to December 2006 as Vice President, Treasury and Tax, and Chief Risk
Officer. Mr. Michaels also worked at Veeco Instruments from May 1979 to March
1987 in various roles including Controller and Tax Manager. Mr. Michaels is a
member of the Board of Directors and Chair of the Audit Committee of Iverson
Genetic Diagnostics, Inc. Mr. Michaels also serves as a member of the Board of
Governors and Treasurer of the Country Club of Troy. Mr. Michaels has a
Bachelor of Science degree with dual majors in Accounting and Finance and a
minor in Economics from the University at Albany and completed graduate-level
coursework at the C.W. Post campus of Long Island University. Mr. Michaels also
completed the Leadership Institute Program at the Lally School of Management
& Technology at Rensselaer Polytechnic Institute. Mr. Michaels contributes
more than 30 years of international financial and operating experience in a
wide variety of roles in both public and private organizations to the Board,
which the Board believes qualifies him to serve as a director.
William Hazelip was
appointed to the Board on February 23, 2021. Since 2015, he has served as Vice
President of National Grid PLC, a multinational electricity and gas utility
company headquartered in London, England. He has also served as National Grid
PLC's President, Global Transmission (US) since 2017 and President of Strategic
Growth for National Grid Ventures since August 2019, developing new business
opportunities in electric transmission, energy storage, and renewable energy.
Prior to joining National Grid, PLC, he was the Managing Director, Business
Development at Duke Energy Corporation and the President of Path 15
Transmission, an independent electric transmission company in California, where
he led the acquisition for Duke Energy Corporation. Mr. Hazelip also has
extensive experience serving on the board of directors of companies. He
currently serves as member of the board of directors of Millennium Pipeline
Corporation, a multi-billion dollar natural gas pipeline company, the
Vice-Chairman of the board of directors of New York Transco, a growing electric
transmission company, and a board of directors representative of Clean Energy
Generation, a renewable energy and battery energy storage joint venture with
NextEra Energy Resources. Mr. Hazelip began his career as an Area Director for
CWL Investments, LLC, a Michigan investor group that owns and operates
restaurant franchises including Jimmy John's Gourmet Sandwich Shops. Mr.
Hazelip earned a Bachelor of Arts from Emory University, Atlanta, GA, and an
International Master of Business Administration (IMBA) from the Darla Moore School
of Business at the University of South Carolina. Mr. Hazelip is an accomplished
leader in the energy industry, with deep experience in utility project
development, financing, regulation, and operations, which the Board believes,
particularly in light of the Company's involvement with the renewable energy
sector as it relates to their cryptocurrency mining subsidiary, qualifies him
to serve as a director.
Thomas J. Marusak has served as a member of the Board since December 2004.
Additionally, Mr. Marusak has served as a member of the Boards of Directors of
our subsidiaries MTI Instruments since April 2011 and EcoChain since January
2020. Since 1986, Mr. Marusak has served as President of Comfortex Corporation,
a manufacturer of window blinds and specialty shades. Mr. Marusak was a member
of the Advisory Board of Directors for Key Bank of New York from 1996 through
2004 and served on the Board of Directors of the New York Energy Research and
Development Authority from 1998 through 2006. In 2019, Mr. Marusak retired from
the Board of Directors of the Capital District Physician's Health Plan, Inc.,
in Albany, where he had served for the prior eight years and had participated
as a member of the board's Finance, Compensation, Audit, Investment, and
Executive Committees. Additionally, Mr. Marusak has served as a Board member
for the following entities in the course of his professional career: Center for
Economic Growth (past Chair), Dynabil Corp. (Advisory Board), and the Albany
Chamber of Commerce (Executive Board). Mr. Marusak received a B.S. in
Engineering from Pennsylvania State University and an M.S. in Engineering from
Stanford University. Mr. Marusak brings technical development, manufacturing
experience, product development and introduction, financial accounting, and
human resources expertise to the Board, as well as relevant experience in
committee and board service, which the Board believes qualifies him to serve as
a director.
7
Michael
Toporek was named our Chief Executive
Officer on November 2, 2020 and has served as a member of the Board since
October 2016. Since 2003, Mr. Toporek has served as the Managing General
Partner of Brookstone Partners, a lower middle market private equity firm based
in New York and an affiliate of Brookstone XXIV. Prior to founding Brookstone
Partners in 2003, Mr. Toporek was both an active principal investor and an
investment banker. Mr. Toporek began his career in Chemical Bank's Investment
Banking Group, later joining Dillon, Read and Co., which became UBS Warburg
Securities Ltd. during his tenure, and SG Cowen and Company. Mr. Toporek
currently serves on the Board of Trustees of Harlem Academy and on the Board of
Directors of Capstone Therapeutics Corp. Mr. Toporek has a B.A. in Economics
and an M.B.A. from the University of Chicago in Finance/Accounting. Mr. Toporek
brings strategic and financial expertise to the Board as a result of his
experience with Brookstone Partners, which the Board believes qualifies him to
serve as a director. As part of our sale of 3,750,000 shares of Common Stock to
Brookstone XXIV in October 2016, Brookstone XXIV has two designated directors
that sit on the Board; Mr. Toporek is one such director.
There are no family relationships among any of our directors
or executive officers.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board held 12 meetings during
2020. All directors attended at least 90% of all meetings of the Board and any
Committee of which they were a member during 2020. The Board has no formal
policy regarding attendance at our annual meeting of stockholders; directors
are, however, encouraged, but not required, to attend any meetings of our
stockholders. All directors, at the time of the meeting, virtually attended the
2020 annual meeting of stockholders.
The Board has an Audit Committee,
a Governance and Nominating Committee, and a Compensation Committee.
Audit Committee
The Audit Committee consists of
Mr. Michaels (Chairman), Mr. Phelan, Mr. Hirshfield, and Mr. Madhavji
(effective March 9, 2021). The Board has determined that each member of the
Audit Committee is independent, as defined under the applicable rules and listing
standards of Nasdaq Stock Market LLC and SEC rules and regulations. In
addition, the Board has determined that Mr. Michaels qualifies as an "audit
committee financial expert" as defined in the rules and regulations of the SEC.
Mr. Michael's designation by the Board as an "audit committee financial expert"
is not intended to be a representation that he is an expert for any purpose as
a result of such designation, nor is it intended to impose on him any duties,
obligations, or liability greater than the duties, obligations, or liability
imposed on him as a member of the Audit Committee and the Board in the absence
of such designation.
The Audit Committee met five
times during 2020. The responsibilities of the Audit Committee are set forth in
the charter of the Audit Committee, which was adopted by the Board and is
published on our website at https://www.mechtech.com/governance-documents/.
The Committee, among other matters, is responsible for the annual appointment
of, and for compensating, retaining, overseeing and, where appropriate,
replacing, the independent registered public accounting firm as MTI's auditors,
reviews the arrangements for and the results of the auditors' examination of
our books and records, and assists the Board in its oversight of the
reliability and integrity of the Company's accounting policies, financial
statements and financial reporting, and disclosure practices, including its
system of internal controls, and the establishment and maintenance of processes
to assure compliance with all relevant laws, regulations, and company policies.
The Audit Committee also reviews the adequacy of charter of the Audit Committee
and recommends changes to the Board that it considers necessary or appropriate.
Governance and Nominating Committee
The Board has adopted a
Governance and Nominating Committee charter, which is published on our website
at https://www.mechtech.com/governance-documents/. The Governance and
Nominating Committee consists of Mr. Hirshfield (Chairman effective March 9,
2021), Mr. Marusak, and Mr. Hazelip (effective March 9, 2021). The Board has
determined that each member of the Governance and Nominating Committee is
independent, as defined under the applicable rules and listing standards of the
Nasdaq Stock Market LLC.
8
The Governance and Nominating
Committee met one time during 2020. The role of the Governance and Nominating
Committee is to assist the Board by: 1) reviewing, identifying, evaluating, and
recommending the nomination of Board members; 2) selecting and recommending director
candidates to the Board; 3) developing and recommending governance policies of
the Company to the Board; 4) addressing governance matters; 5) making
recommendations to the Board regarding Board size, composition, and criteria;
6) making recommendations to the Board regarding existing Committees and report
on the performance and effectiveness of the Committees to the Board; 7)
periodically evaluating the performance of the Board; and 8) assisting the
Board with other assigned tasks as needed.
In appraising potential director
candidates, the Governance and Nominating Committee focuses on desired
characteristics and qualifications of candidates, and although there are no
stated minimum requirements or qualifications, preferred characteristics
include business savvy and experience, concern for the best interests of our
stockholders, proven success in the application of skills relating to our areas
of business activities, adequate availability to participate actively in the
Board's affairs, high levels of integrity, and sensitivity to current business
and corporate governance trends and legal requirements, and that candidates,
when warranted, meet applicable director independence standards. The Governance
and Nominating Committee has adopted a formal policy for the consideration of
director candidates recommended by stockholders. Individuals recommended by
stockholders are evaluated in the same manner as other potential candidates. A
stockholder wishing to submit such a recommendation should forward it in writing
to our Secretary at 325 Washington Avenue Extension, Albany, New York 12205.
The mailing envelope should include a clear notation that the enclosure is a
"Director Nominee Recommendation." The recommending party should be identified
as a stockholder and should provide a brief summary of the recommended
candidate's qualifications, taking into account the desired characteristics and
qualifications considered for potential Board members mentioned above.
Compensation Committee
The Board has adopted a Compensation
Committee charter, which is published on our website at https://www.mechtech.com/governance-documents/.
The Compensation Committee consists of Mr. Marusak (Chairman effective March 9,
2021), Mr. Phelan (effective March 9, 2021), and Mr. Hazelip (effective March
9, 2021). The Board has determined that each member of the Compensation
Committee is independent, as defined under the applicable rules and listing
standards of the Nasdaq Stock Market LLC.
The Compensation Committee met twice during 2020. The
Compensation Committee is charged with ensuring that the Company's compensation
programs are aligned with Company goals and are adequately designed to attract,
motivate, and retain executives and key employees. The role of the Compensation
Committee is to assist the Board by: 1) regarding the overall compensation
programs, philosophy, and practices of the Company, particularly as it relates
to its executive officers, key employees, and directors; 2) reviewing and
evaluating Company objectives and goals regarding our Chief Executive Officer's
compensation; 3) determining the compensation program for members of the Board;
4) developing and overseeing the Chief Executive Officer's process for
evaluating the performance objectives and compensation of executive officers;
5) administering the Company's equity compensation plans; 6) determining
succession planning and management development for the Chief Executive Officer
and other executive officers; and 7) assisting the Board with other assigned
tasks as needed.
In fulfilling its responsibilities, the Compensation
Committee may delegate any or all of its responsibilities to a subcommittee of
the Compensation Committee and, to the extent not expressly reserved to the
Compensation Committee by the Board or by applicable law, rule, or regulation,
to any other committee of directors appointed by it.
The Compensation Committee has the sole authority to
retain and terminate any compensation consultant, outside counsel, or other
advisers as it deems appropriate to perform its duties and responsibilities,
including the authority to approve the fees payable to such counsel or advisers
and any other terms of retention. The Compensation Committee did not engage any
such consultants, counsel, or advisers during 2020.
The Compensation Committee administers
our executive compensation programs. This Committee is responsible for
establishing the policies that govern base salaries, as well as short- and
long-term incentives, for executives and senior management. The Committee
considers recommendations made by our Chief Executive Officer and certain other
executives when reaching its compensation decisions, including with respect to
executive and director compensation. The Committee has approval authority
regarding the compensation of the Company's Chief Executive Officer, as well as
the Company's other executive officers after the review of the Chief Executive
Officer's recommendation and the results of such officer's performance review.
9
The Board's Role in Risk Oversight
The
Board executes its oversight responsibility for risk management directly and
through its Committees, as follows:
-
The Audit Committee has primary
responsibility for overseeing the integrity of the Company's financial
reporting risk by reviewing: (i) the Company's disclosure controls and
procedures; (ii) any significant deficiencies in the design or operation of
internal controls; (iii) any fraud material or otherwise; (iv) the use of
judgments in management's preparation of the financial statements; and (v)
through consultation with Company's independent registered public accounting
firm on the above items. The Board is kept abreast of the Committee's risk
oversight and other activities via reports of the Committee Chairman to the
full Board.
-
The Compensation Committee oversees the
risks associated with our compensation policies and practices, with respect to
both executive compensation and compensation generally. The Board is kept
abreast of the Committee's risk oversight and other activities via reports of
the Committee Chairman to the full Board.
-
The Board considers specific risk
topics, including risks associated with our strategic plan, our capital
structure, and our development activities. In addition, the Board receives
detailed regular reports from the heads of our principal business and corporate
functions that include discussions of the risks and exposures involved in their
respective areas of responsibility. These reports are provided in connection
with every regular Board meeting and are discussed, as necessary, at Board
meetings. Further, the Board is routinely informed of developments at the
Company that could affect our risk profile or other aspects of our business.
We do not believe that the Board's role in risk oversight
has any impact on its leadership structure, as discussed below.
Executive Sessions of Directors
Executive sessions, or meetings of outside (non-management)
directors without management present, are held periodically throughout the
year. At these executive sessions, the outside directors review, among other
things, the criteria upon which the performance of the Chief Executive Officer
and other executive officers is based, the performance of the Chief Executive
Officer against such criteria, and the compensation of the Chief Executive
Officer and other executive officers. Meetings are held from time to time with
the Chief Executive Officer to discuss relevant subjects.
Board
Leadership Structure
The Board recognizes that one of its key responsibilities
is to evaluate and determine its optimal leadership structure so as to provide
independent oversight of management. The Board understands that there is no
single, generally accepted approach to providing Board leadership and that
given the dynamic and competitive environment in which we operate, the right
Board leadership structure may vary as circumstances warrant.
David C. Michaels has served as our Chairman of the Board
since January 16, 2017 and lead independent director since June 8, 2016,
although as long as he remains Chairman of the Board he is not fulfilling any
separate duties as lead independent director. The Board recognizes that
it is important to determine an optimal board leadership structure to ensure
the independent oversight of management as the Company continues to grow.
Frederick W. Jones was our Chief Executive Officer through September 11, 2020
and now Michael Toporek serves as the Chief Executive Officer since his
appointment on October 28, 2020. The Chief Executive Officer is responsible for
setting the strategic direction for the Company and the day-to-day leadership
and performance of the Company, while the Chairman of the Board provides
guidance to the Chief Executive Officer and presides over meetings of the full
Board. We believe that this separation of responsibilities also provides a
balanced approach to managing the Board and overseeing the Company.
10
In considering its leadership structure, the Board has
taken a number of factors into account. The Board, which consists of directors
who are highly qualified and experienced, six of whom are independent
directors, exercises a strong, independent oversight function. This oversight
function is enhanced by the fact that the Board's three permanent committees -
the Audit Committee, the Governance and Nominating Committee, and the Compensation Committee, are comprised solely of
independent directors.
Board Membership
To fulfill its responsibility to recruit and recommend to
the full Board nominees for election as directors, the Governance and
Nominating Committee reviews the size and composition of the Board to determine
the qualifications and areas of expertise needed to further enhance the
composition of the Board and works with management in attracting candidates
with those qualifications. The goal of the Governance and Nominating Committee,
and the Board as a whole, is to achieve a Board that, as a whole, provides
effective oversight of the management and business of the Company, through the
appropriate diversity of experience, expertise, skills, specialized knowledge,
and other qualifications and attributes of the individual directors. Important
criteria for Board membership include the following:
-
Members of the Board should be individuals of high
integrity and independence, substantial accomplishments, and have prior or
current associations with institutions noted for their excellence.
-
Members of the Board should have demonstrated
leadership ability, with broad experience, diverse perspectives, and the
ability to exercise sound business judgment.
-
The background and experience
of members of the Board should be in areas important to the operations
of the Company such as business, education, finance, government, law,
science, blockchain, energy, and cryptocurrency.
-
The composition of the Board
should reflect the benefits of diversity as to gender, ethnic background,
and experience.
The satisfaction of these criteria is implemented and
assessed through ongoing consideration of directors and nominees by the
Governance and Nominating Committee and the Board. Based upon these activities
and its review of the current composition of the Board, the Committee and the
Board believe that most of these criteria have been satisfied, and is actively
pursuing the addition of at least one additional director that would help the
Board in meeting the diversity goals noted above.
In addition, in accordance with the Governance and
Nominating Committee Charter, the Committee considers the number of boards of
directors of other public companies on which a candidate serves. Moreover,
directors are expected to act ethically at all times and adhere to the
Company's Code of Conduct and Ethics.
The Governance and Nominating Committee and the Board
believe that each of the nominees for election at the Annual Meeting brings a
strong and unique set of attributes, experiences, and skills and provides the
Board as a whole with an optimal balance of experience, leadership,
competencies, qualifications, and skills in areas of importance to the Company.
Under "Proposal 1-Election of Directors" above, we provide an overview of the
nominees' principal occupation, business experience, and other directorships,
together with the key attributes, experience, and skills viewed as particularly
meaningful in providing value to the Board, the Company, and our stockholders.
REPORT OF THE AUDIT COMMITTEE
In accordance with the
Committee's charter, as published on the Company's website at https://www.mechtech.com/governance-documents/,
management has the primary responsibility for the Company's financial
statements and the financial reporting process, including maintaining an
adequate system of internal control over financial reporting. MTI's independent
registered public accounting firm reports directly to the Audit Committee and
is responsible for performing an independent audit of MTI's consolidated
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board. The Audit Committee, among other matters, is
responsible for appointing MTI's independent registered public accounting firm,
evaluating such independent registered public accounting firm's qualifications,
independence, and performance, determining the compensation for such
independent registered public accounting firm, and pre-approval of all audit
and non-audit services provided to the Company. Additionally, the Audit
Committee is responsible for oversight of MTI's accounting and financial
reporting processes and audits of MTI's financial statements, including the
work of the independent registered public accounting firm. The Audit Committee
reports to the Board with regard to:
11
-
the scope of the annual audit;
-
fees to be paid to the independent registered public accounting
firm:
-
the performance of the independent registered public accounting
firm;
-
compliance with accounting and financial policies and financial
statement presentation; and
-
the procedures and policies relative to the adequacy of internal
accounting controls.
The Audit Committee reviewed and
discussed with Company management and Wojeski & Company CPAs, P.C.
("Wojeski"), the Company's independent registered accounting firm during 2020,
MTI's 2020 annual consolidated financial statements, including management's
assessment of the effectiveness of MTI's internal control over financial
reporting. MTI's management has represented to the Audit Committee that MTI's
consolidated financial statements were prepared in accordance with accounting
principles generally accepted in the United States of America.
The Audit Committee has discussed
with Wojeski the matters required to be discussed by the applicable
requirements of the Public Company Accounting Oversight Board and the SEC,
which includes, among other items, matters related to the conduct of the audit
of the annual consolidated financial statements. The Audit Committee has also
discussed the critical accounting policies used in the preparation of MTI's
annual consolidated financial statements, alternative treatments of financial
information within generally accepted accounting principles that Wojeski
discussed with management, the ramifications of using such alternative
treatments, and other written communications between Wojeski and management.
The Audit Committee has received
from Wojeski the written disclosures and the letter from the independent
accountant required by applicable requirements of the Public Company Accounting
Oversight Board regarding the independent accountant's communications with the
Audit Committee concerning independence, and has discussed with Wojeski their
independence. The Audit Committee has also concluded that Wojeski's performance
of non-audit services is compatible with Wojeski's independence.
The Audit Committee also
discussed with Wojeski the overall scope and plans for its audit and has met
with Wojeski, with and without management present, to discuss the results of
its audit and the overall quality of MTI's financial reporting. The Audit
Committee also discussed with Wojeski whether there were any audit problems or
difficulties, and management's response.
Based on the reviews and
discussions referred to above, the Audit Committee recommended to the Board,
and the Board has approved, that the audited consolidated financial statements
be included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2020, for filing with the SEC. This report is provided by the
following directors, who constitute the Committee.
Audit Committee:
|
|
Mr. David C. Michaels
(Chairman)
|
Mr. Edward R. Hirshfield
|
Mr. William P. Phelan
|
Mr. Alykhan Madhavji
|
12
PROPOSAL
No. 2
RATIFICATION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected UHY LLP as MTI's independent registered
public accounting firm for fiscal year 2021, and the Board is asking
stockholders to ratify that selection. UHY had previously served as MTI's
independent registered public accounting firm from 2012 through 2017, and
Wojeski served as MTI's auditor and, as applicable, its independent registered
public accounting firm, from 2018 through 2020. On April 28, 2021, the Company delivered to
Wojeski written notice of dismissal of Wojeski as the Company's auditor and
engaged UHY as the Company's independent registered public accounting firm to
audit the Company's financial statements for the fiscal year ended December 31,
2021. The decision to change accountants was approved by the Audit Committee
of the Company's Board of Directors.
Neither of
Wojeski & Company's reports on the Company's financial statements for the
years ended December 31, 2020 or 2019 contained an adverse opinion or a
disclaimer of opinion, nor was any such report qualified or modified as to
uncertainty, audit scope, or accounting principles. In addition, during the
years ended December 31, 2020 and 2019, and during the subsequent interim
period through April 28, 2021, there were (i) no disagreements between us and
Wojeski & Company on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure which, if not
resolved to Wojeski & Company's satisfaction, would have caused Wojeski
& Company to make reference to the subject matter of the disagreement in
connection with its report for such years, and (ii) no "reportable events," as
defined in Item 304(a)(1)(v) of Regulation S-K, for such years and subsequent
interim periods through April 28, 2021.
Although
current law, rules, and regulations, as well as the charter of the Audit
Committee, require the Audit Committee to engage, retain, and supervise MTI's
independent registered public accounting firm, the Board considers the
selection of the independent registered public accounting firm to be an
important matter of stockholder concern and is submitting the selection of UHY
for ratification by stockholders as a matter of good corporate practice.
The
affirmative vote of holders of a majority of the shares of Common Stock cast in
person or by proxy at the meeting is required to approve the ratification of
the selection of UHY as MTI's independent registered public accounting firm for
the current fiscal year.
If
the stockholders fail to ratify this appointment, the Audit Committee will
reconsider whether to retain UHY and may retain that firm or another firm
without resubmitting the matter to MTI's stockholders. Even if the appointment
is ratified, the Audit Committee may, in its discretion, direct the appointment
of different independent public accountants at any time during the year if it
determines that such change would be in the best interests of MTI and its
stockholders.
A
representative from each of Wojeski and UHY is expected to be present at the
Annual Meeting and will have the opportunity to make a statement and answer
appropriate questions from stockholders.
Accounting Fees
The following sets forth the
aggregate fees billed to us for professional services rendered by Wojeski for
the years ended December 31, 2020 and 2019(1):
|
Year Ended
|
Year Ended
|
|
December 31,
|
December 31,
|
|
|
|
Audit Fees
|
$ 77,500
|
$ 60,000
|
Audit-Related Fees
|
9,000
|
9,000
|
Tax Fees
|
10,000
|
9,000
|
All Other Fees
|
|
|
Total
|
|
|
(1) The aggregate
amounts included in Audit Fees and Tax Fees are classified by the
related fiscal periods for the audit of our annual financial statements and
review of financial statements and statutory and regulatory filings or
engagements. The aggregate fees included in each of the other categories are
fees billed or to be billed during those fiscal periods.
13
Audit Fees
Audit fees for the fiscal years
ended December 31, 2020 and 2019, were for professional services rendered for
the audits of our consolidated financial statements included in our Annual
Report Disclosure Statements as prescribed by the OTC Markets quotation system OTC Pink Current Information tier
(2019) and for our Annual Report on Form 10-K (2020) and review of interim
financial information posted to the OTC Markets web site during those years.
Audit-Related Fees
Audit-related fees during the
fiscal years ended December 31, 2020 and 2019 were for the annual audit of our
pension plan in each of those years.
Tax Fees
Tax fees during the fiscal years
ended December 31, 2020 and 2019 were for services related to tax compliance,
including the preparation of tax returns and claims for refunds, and tax
planning and tax advice, including advice related to proposed transactions.
The Audit Committee has
considered whether the provision of the non-audit services above is compatible
with maintaining the auditors' independence, and has concluded that it is.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee has adopted
the following policies and procedures under which frequently-utilized audit and
non-audit services are pre-approved by the Audit Committee and the authority to
authorize the independent registered public accountants to perform such
services is delegated to a single committee member or executive officer.
a) Annual audit, quarterly review, and annual tax return services will be
pre-approved upon review and acceptance of the tax and audit engagement letters
submitted by the independent registered public accountants to the Audit
Committee.
b) Additional audit and non-audit services related to the resolution of
accounting issues or the adoption of new accounting standards, audits by tax
authorities, or reviews of public filings by the SEC must be pre-approved by
the Audit Committee and the authority to authorize the independent registered
public accounting firm to perform such services is delegated to the Chairman of
the Audit Committee for fees up to $5,000, and for fees above $5,000 entire
Committee approval is required.
c) Additional audit and non-audit services related to tax savings
strategies, tax issues arising during the preparation of tax returns, tax
estimates, and tax code interpretations must be pre-approved by the Audit
Committee and the authority to authorize the independent registered public
accounting firm to perform such services is delegated to the Chairman of the
Audit Committee for fees up to $5,000, and for fees above $5,000 entire
Committee approval is required.
d) Additional audit and non-audit services related to the tax and
accounting treatments of proposed business transactions must be pre-approved by
the Audit Committee and the authority to authorize the independent registered
public accountants to perform such services is delegated to the Chairman of the
Audit Committee for fees up to $5,000, and for fees above $5,000 entire
Committee approval is required.
e) Quarterly and annually, a detailed analysis of audit and non-audit
services will be provided to and reviewed with the Audit Committee.
All of the 2020 services
described under the captions "Audit Fees," "Audit-Related Fees," and "Tax Fees"
were approved by the Audit Committee.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2.
14
PROPOSAL No. 3
APPROVAL OF AN AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION TO INCREASE THE MAXIMUM NUMBER OF DIRECTORS OF THE COMPANY FROM
NINE TO 10
We are
asking our stockholders approve Articles of Amendment to the Company's Articles
of Incorporation (the "Articles") to increase the maximum number of directors
constituting the entire Board from nine to 10. A copy of the Articles of
Amendment, which has been approved by the Board, is attached hereto and
incorporated by reference herein as Appendix A.
Assuming that our stockholders
approve the Articles of Amendment, we intend to file the Articles of Amendment
with the Nevada Secretary of State's Office as soon as practicable after
the Annual Meeting. The Articles of Amendment will
become effective upon their acceptance for record by the Nevada Secretary of
State.
The Board has also approved, subject to stockholder approval of the
Articles of Amendment, an amendment to Section 3.2 of the Company's Bylaws to
effect the same change in the Bylaws, that is, to increase the maximum number
of directors constituting the entire Board, as set forth in the Bylaws, from
nine to 10. Such amendment to the Bylaws, assuming stockholder approval of the
Articles of Amendment, will be effective upon filing and acceptance of the
Articles of Amendment with the Nevada Secretary of State's Office
Description
of and Reasons for the Amendment
The purpose of the proposed amendment to the Articles is to permit MTI
to add up to two additional directors to the current Board.
The amendment
would restate the first sentence of Article 11 of the Articles to read as
follows:
The number of directors constituting the entire Board of
Directors shall be not less than one nor more than 10 as fixed from time to
time by vote of a majority of the entire Board of Directors, provided, however,
that the number of directors shall not be reduced so as to shorten the term of
any director at the time in office, and provided further, that the number of
directors constituting the entire Board of Directors shall be one until
otherwise fixed by a majority of the entire Board of Directors.
The only change
to this sentence to be effected by the Articles of Amendment is to replace the
reference to more than "nine" directors to more than "10" directors as the
maximum number of directors that could constitute the full Board.
The Board
currently consists of eight directors, meaning without the amendment to the
Articles we could only add one additional director to the Board (other than to
replace directors who might resign, retire, etc.). The Board has identified
certain gaps in the blockchain area with respect to the mix of background and experience that it believes should be
represented on the Board, especially as we anticipate, cryptocurrency mining
becomes an increasing component of the Company's business and operations. The
Board also desires to add directors that would diversify the Board as to gender
and/or ethnic background. As noted above, absent the proposed amendment to the
Articles or the resignation or other departure of a current director, we could
add only one additional member to the Board. The Board believes, however, that
it needs the flexibility to add two directors to address both of these goals.
As a result, the Board believes that it is in the best interests of the
Company and its stockholders to increase the maximum size of the Board currently
provided for under the Articles, and therefore, that the proposed amendment to the Articles is in the best interests
of the Company and its stockholders as well.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 3.
15
PROPOSAL No. 4
ADVISORY NON-BINDING VOTE ON EXECUTIVE OFFICER
COMPENSATION
As
required by Section 14A of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Board is seeking advisory (non-binding) stockholder
approval on the compensation of our named executive officers as disclosed in
the section of this proxy statement titled "Executive Compensation." The vote
on this resolution is not intended to address any specific element of
compensation, but rather relates to the overall compensation of our named
executive officers as described in this Proxy Statement in accordance with the
compensation disclosure rules of the SEC. This vote provides stockholders with
the opportunity to endorse or not endorse the compensation of our named
executive officers.
Our
executive compensation programs are designed to attract, motivate, and retain
our named executive officers, who are critical to our strategic goals and
success. Under our executive compensation program, our named executive officers
receive compensation related to the attainment of financial and other
performance measures that, the Board believes, promotes the creation of
long-term stockholder value and positions the Company for both near-term and
long-term growth and success. Please read "Executive Compensation" for additional
details about our executive compensation programs, including information about
fiscal year 2019 and 2020 compensation of our named executive officers.
The Compensation Committee bases its executive
compensation decisions on our compensation objectives, which include the
following:
-
aligning management's
incentives with the interests of our stockholders;
-
providing competitive
compensation to our named executive officers;
-
rewarding named executive
officers for past performance and motivating them to excel in the future; and
-
rewarding superior performance
of both the Company and each individual executive and encouraging actions
that promote our near-term and long-term strategic goals.
We
believe that our existing compensation programs, which include a mix of fixed
and performance-based compensation, and the terms of long-term incentive awards
granted to our named executive officers, are all designed to motivate our named
executive officers to achieve improved performance, align compensation with
performance measures and stockholder interests, and enable us to attract,
retain, and motivate talented executive officers, while at the same time
creating a close relationship between performance and compensation. The Compensation
Committee and the Board believe that the design of the Company's executive
compensation program, and hence the compensation awarded to named executive
officers under the current program, fulfills this objective.
We
are asking our stockholders to indicate their support for our named executive
officers' compensation as described in this Proxy Statement. This proposal,
commonly known as a "say-on-pay" proposal, gives our stockholders the
opportunity to express their views on our named executive officers'
compensation. Accordingly, we are asking our stockholders to approve, on an
advisory basis, the compensation of the named executive officers by approving
the following resolution:
RESOLVED,
that the compensation paid to the Company's named executive officers, as
disclosed pursuant to Item 402 of Regulation S-K, including the compensation
tables and narrative discussion, is hereby APPROVED.
The
say-on-pay vote is advisory, and therefore not binding on the Company, the
Compensation Committee, or the Board and may not be construed as overruling a
decision by the Board or the Compensation Committee, or create or imply any
additional fiduciary duty on the Board or our Directors. It will also not
affect any compensation previously paid or awarded to any executive. The Board
and the Compensation Committee value the opinions of our stockholders, however,
and will review and consider the outcome of this advisory vote when making
future compensation decisions for our named executive officers and will
evaluate whether any actions are necessary in this regard.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" PROPOSAL 4.
16
PROPOSAL
No. 5
ADVISORY
VOTE ON FREQUENCY OF VOTES ON EXECUTIVE OFFICER COMPENSATION
Section 14A of the Exchange Act requires us to
submit a non-binding, advisory resolution to stockholders at least once every
six years to determine whether advisory votes on executive officer compensation
should be held every one, two, or three years; we last held this vote in 2013,
but were not subject to the requirements of the Exchange Act six years later in
2019, which is why we are holding this vote at the Annual Meeting.
The Board recommends that the advisory
non-binding vote to approve the compensation of the Company's named executive
officers be held every year. This recommendation is based on the fact that
named executive officer compensation is evaluated, adjusted, and approved by
the Board or Compensation Committee, as applicable, on a yearly basis, and the
belief that stockholder input with respect to
our executive compensation program should be taken into consideration by the
Board and the Compensation Committee when making their annual compensation
determinations.
In making your decision on how to vote on this
proposal, you can choose from among the following choices: (1) one year; (2)
two years; (3) three years; or (4) abstain. You should choose the frequency
that reflects your preference as to how often the Company should hold the vote
on the executive compensation of its named executive officers. If you have no
preference, you should abstain.
Because this vote is advisory, it will not be
binding on the Company or the Board and cannot be construed as overruling any
decision made by the Company or the Board, or create or imply any additional
fiduciary duty on, the Company or the Board. The Board will, however, take into
account the outcome of this vote in making future decisions regarding the
frequency of submitting to stockholders the
non-binding advisory resolution to approve the compensation of our named executive
officers.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE HOLDING OF ADVISORY VOTES ON EXECUTIVE OFFICER
COMPENSATION "EVERY YEAR" ON PROPOSAL 5.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
Review and Approval or Ratification of Transactions
with Related Persons
We have adopted a written policy
requiring that all related person transactions be reported to our executive
management and/or the Board and approved or ratified by the Audit Committee. In
completing its review of proposed related person transactions, the Audit
Committee considers the aggregate value of the transaction, whether the
transaction was undertaken in the ordinary course of business, the nature of
the relationships involved, and whether the transaction is on terms comparable
to those that could be obtained in arm's length dealings with an unrelated
third party.
We believe the terms of any
transactions with related persons are as fair to us as those obtainable from
unaffiliated third parties.
17
The following is a summary of transactions between MTI and certain
related persons, as required to be disclosed under applicable SEC rules, that
occurred since January 1, 2019, and any ongoing related relationships with
related persons:
Legal Services
During the years ended December 31, 2020 and
December 31, 2019, the Company incurred $95,000 and $54,000, respectively, to
Couch White, LLP for legal services associated with contract review. During
2021 (through April 28, 2021), the Company incurred $55,000 respectively, to
Couch White, LLP for various corporate and governance matters. A partner at
Couch White, LLP is an immediate family member of Thomas J. Marusak, one of our
directors. We anticipate using Couch White for certain legal services in the future.
Soluna Transactions
On January 8, 2020, the
Company formed EcoChain as a wholly-owned subsidiary to pursue a new business
line focused on cryptocurrency and the blockchain ecosystem. In connection with
this new business line, EcoChain established a facility to mine
cryptocurrencies and integrate with the blockchain network. Pursuant to an
Operating and Management Agreement dated January 13, 2020, by and between
EcoChain and Soluna
Technologies, Ltd. ("Soluna"), a Canadian
company that develops vertically-integrated, utility-scale computing facilities
focused on cryptocurrency mining and cutting-edge blockchain applications,
Soluna assisted the Company, and later EcoChain, in developing, and is now
operating, the cryptocurrency mining facility. The Operating and Management
Agreement requires, among other things, that Soluna provide developmental and
operational services, as directed by EcoChain, with respect to the
cryptocurrency mining facility in exchange for EcoChain's payment to Soluna of
a one-time management fee of $65,000 and profit-based success payments in the
event EcoChain achieves explicit profitability thresholds. Once aggregate
earnings before interest, taxes, depreciation and amortization of the mine
exceeds the total amount of funding provided by EcoChain to Soluna (whether
pursuant to this agreement or otherwise) for the purposes of creating,
developing, assembling, and constructing the mine (the "Threshold"), Soluna is
entitled to ongoing success payments of 20.0% of the earnings before interest,
taxes, depreciation and amortization of the mine. As of the date of this Proxy
Statement, no additional payments have been made or are due, as the Threshold
has not been achieved. Pursuant to the Operating and Management Agreement,
during the developmental phase of the cryptocurrency mining facility, which
ended on March 14, 2020, Soluna gathered and analyzed information with respect
to EcoChain's cryptocurrency mining efforts and produced budgets, financial
models, and technical and operational plans, including a detailed business
plan, that it delivered to EcoChain in March 2020 (the "Deliverables"), all of
which was designed to assist with the efficient implementation of a
cryptocurrency mine. The agreement provided that, following EcoChain's acceptance
of the Deliverables, which occurred on March 23, 2020, Soluna, on behalf of
EcoChain, would commence operations of the cryptocurrency mine in a manner that
would allow EcoChain to mine and sell cryptocurrency. In that regard, on May
21, 2020, EcoChain acquired the intellectual property of GigaWatt, Inc.
("GigaWatt") and certain other property and rights of GigaWatt associated with
GigaWatt's operation of a crypto-mining operation located in Washington State.
The acquired assets formed the cornerstone of EcoChain's current cryptocurrency
mining operation. EcoChain sells for U.S. dollars all cryptocurrency it mines
and is not in the business of accumulating cryptocurrency on its balance sheet
for speculative gains. On October 22, 2020, EcoChain loaned Soluna $112,000 to
acquire additional assets from the bankruptcy trustee for GigaWatt's assets.
On the same day, Soluna transferred title of the assets to EcoChain, which
under the terms thereof paid off the note.
On November 19, 2020, EcoChain and Soluna
entered into a second Operating and Management Agreement related to a potential
location for a cryptocurrency mine in the Southeast United States. In
accordance with the terms of the agreement, EcoChain paid Soluna $150,000 in
2020 and $100,000 to date during 2021.
On December 1, 2020, EcoChain and Soluna
entered into a third Operating and Management Agreement with respect to a
potential location for a cryptocurrency mine in the Southwestern United States,
pursuant to which EcoChain paid Soluna $38,000 during 2020; this target
location did not meet the business requirements to continue pursuing the
potential acquisition, and as a result EcoChain will not make any further
payments to Soluna under this agreement.
Each Operating and Management Agreement requires
that Soluna provide project sourcing services to EcoChain, including
acquisition negotiations and establishing an operating model,
investments/financing timeline, and project development path.
18
Simultaneously with entering into the initial
Operating and Management Agreement with Soluna, the Company, pursuant to a
purchase agreement it entered into with Soluna, made a strategic investment in
Soluna by purchasing 158,730 Class A Preferred Shares of Soluna for an
aggregate purchase price of $500,000 on January 13, 2020. After acceptance of
the Deliverables, as required by the terms of the purchase agreement, on March
23, 2020, the Company purchased an additional 79,365 Class A Preferred Shares
of Soluna for an aggregate purchase price of $250,000. The Company also has the
right, but not the obligation, to purchase additional equity securities of
Soluna and its subsidiaries (including additional Class A Preferred Shares of
Soluna) if Soluna secures certain levels or types of project financing with respect
to its own wind power generation facilities. The Company has additionally
entered into a Side Letter Agreement, dated January 13, 2020, with Soluna
Technologies Investment I, LLC, a Delaware limited liability company that owns,
on a fully diluted basis, 61.5% of Soluna and is controlled by a Brookstone
Partners-affiliated director of the Company. The Side Letter Agreement provides
for the transfer to the Company, without the payment of any consideration by
the Company, of additional Class A Preferred Shares of Soluna in the event
Soluna issues additional equity below agreed-upon valuation thresholds.
Several of Soluna's equityholders are
affiliated with Brookstone Partners, the investment firm that holds an equity
interest in the Company through Brookstone XXIV. The Company's two
Brookstone-affiliated directors also serve as directors and, in one case, as an
officer, of Soluna and also have ownership interest in Soluna. In light of
these relationships, the various transactions by and between the Company and
EcoChain, on the one hand, and Soluna, on the other hand, were negotiated on
behalf of the Company and EcoChain via an independent investment committee of
Board and separate legal representation. The transactions were subsequently
unanimously approved by both the independent investment committee and the full
Board.
Three of our directors have various
affiliations with Soluna.
Michael Toporek, our Chief Executive Officer
and a director, owns (i) 90% of the equity of Soluna Technologies Investment I,
LLC, which owns 58.8% of Soluna and (ii) 100% of the equity of MJT Park
Investors, Inc., which owns 3.1% of Soluna, in each case on a fully-diluted
basis. Mr. Toporek does not own directly, or indirectly, any equity interest in
Tera Joule, LLC, which owns 8.4% of Soluna; however, as a result of his 100%
ownership of Brookstone IAC, Inc., which is the manager of Tera Joule, LLC, he
has dispositive power over the equity interests that Tera Joule owns in Soluna.
In addition, one of our directors, Matthew E.
Lipman, serves as a director and as acting Secretary and Treasurer of Soluna.
Mr. Lipman does not directly own any equity interest in Tera Joule, LLC, which
owns 8.4% of Soluna; however, as a result of his position as a director and
officer of Brookstone IAC, Inc., which is the manager of Tera Joule, LLC, he
has dispositive power over the equity interests that Tera Joule owns in Soluna.
Finally, our director William P. Phelan serves
as an observer on Soluna's board of directors on behalf of the Company.
As a result of the
relationships and transactions set forth above, the approximate dollar
value of the amount of Mr. Toporek's and Mr. Lipman's interest in the Company's
transactions with Soluna during the year ended December 31, 2020, was $631,000
and $0, respectively. During 2021, through April 28, 2021, the approximate
dollar value of the amount of Mr. Toporek's and Mr. Lipman's interest in the
Company's transactions with Soluna was $56,020 and $0, respectively.
The Company's investment in Soluna is carried
at the cost of investment and is $750,000 as of April 28, 2021. The Company
owns approximately 1.81% of Soluna's common stock, calculated on a
fully-diluted basis, as of April 28, 2021.
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act, requires our directors, our executive
officers, and persons who beneficially own of more than 10% of the Common Stock
to file with the SEC initial reports of ownership of the Common Stock and other
equity securities on a Form 3 and report of changes in such ownership on a Form
4 or Form 5. Officers, directors, and 10% stockholders are required by SEC
regulations to furnish us with copies of all Section 16(a) forms they file. To
our knowledge, based solely on a review of all Forms 3, 4, and 5 and amendments
thereto furnished to us during the most recent fiscal year and written
representations by the persons required to file such reports, all filing
requirements of Section 16(a) were satisfied with respect to our most recent
fiscal year except as follows: one Form 4 was filed late by Ms. Thomas with
respect to one transaction - her receipt of a grant of restricted stock awards,
and Mr. Madhavji filed a late Form 3.
19
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF
DIRECTORS
Stockholders who wish to
communicate with the Board, or a particular director, may send a letter to our
Secretary at 325 Washington Avenue Extension, Albany, New York 12205. The
mailing envelope must contain a clear notation indicating that the enclosed
letter is a "Stockholder-Board Communication." All such letters must identify
the author as a stockholder and clearly state whether the intended recipients
are all members of the Board or certain specified individual directors. The
Secretary will make copies of all such letters and circulate them to the appropriate
director or directors.
CODE OF CONDUCT AND ETHICS
We have adopted a Code of Conduct
and Ethics for employees, officers and directors. A copy of the Code of Conduct
and Ethics is available on our website at https://www.mechtech.com/governance-documents/.
EXECUTIVE OFFICERS WHO ARE NOT
DIRECTORS
Jessica L. Thomas, age
47, joined MTI as our Chief Financial Officer in July 2020. Ms. Thomas
supervises the Company's financial reporting, treasury, human resources, and
risk management. Prior to her employment with the Company, Ms. Thomas served as
Director of Optimization for Pregis, LLC, a provider of protective packaging
materials, from 2014 through July 2020, where she was responsible for
operations, system, and financial optimization. From 2009 through 2014, Ms.
Thomas worked at Plasan NA as Manager of Budget & Control and Financial
Planning & Analysis and was also responsible for compliance with government
contracting, including monitoring compliance with Defense Contract Audit
Agency and Federal Acquisition Regulations. From 2007 to 2009, Ms. Thomas was
a Senior Staff Auditor at Cruden & Company, CPA's PLLC. Ms. Thomas has also
held positions in the banking industry as an officer at Key Bank and a Bank
Branch Manager at M&T Bank. Ms. Thomas received a bachelor's degree in
Business Administration and Accounting from Siena College and an M.B.A. in
Finance & International Finance from Northeastern University. Ms. Thomas
obtained her Certified Public Accountant license in May 2009, has been a member
of the American Institute of Certified Public Accountants (AICPA) since 2005,
and holds the Chartered Global Management Accountant (CGMA) designation.
Moshe Binyamin, age
51, joined MTI Instruments in September 2019 and served as the Director of
Market Management and Strategic Growth until January 2020, when he was
appointed Chief Operating Officer responsible for all operational aspects of
the Company. In May 2020, he was appointed as President of MTI Instruments.
Prior to joining MTI Instruments, Mr. Binyamin served in several roles with
Datto Inc. (formerly Autotask Corp.), a cybersecurity and data backup
company. During his 12-year tenure there, his
positions included Director of Market Management from 2017 to 2019, in which he
was responsible for the achievement of strategic objectives for Autotask
Workplace (File Sync and Share) and Autotask Endpoint Backup products, and
Director of Strategic Programs from 2014 to 2017, in which he was responsible
for the co-ordination and management of all company-wide strategic projects as
part of Autotask's accelerated growth initiatives as set forth by Autotask's
executive team and Vista Equity Partners' Autotask board. Prior to joining
Datto, Mr. Binyamin was the Global Product Manager for Pitney Bowes (Formerly
MapInfo). Mr. Binyamin is a graduate of Vista Equity Partner's exclusive HPLP
(High Potential Leadership Program) with focus on business administration,
management, and operations. He holds a Computer Analyst in Applied Science
degree, obtained in 1991, from Israeli Defense Forces.
Our executive officers are elected or appointed by the Board and hold
their respective offices until their respective successors are elected and
qualified or until their earlier resignation or removal.
20
EXECUTIVE COMPENSATION
Compensation Philosophy
The primary
objectives of our compensation policies are to attract, retain, motivate,
develop, and reward our management team for executing our strategic business
plan, thereby enhancing stockholder value, while recognizing and rewarding
individual and Company performance. These compensation policies include: (i) an
overall management compensation program that is competitive with companies of
similar size or within our industries and (ii) long-term incentive compensation
in the form of stock-based compensation that is aimed towards encouraging
management to continue to focus on stockholder returns. Our executive
compensation program ties a substantial portion of our executives' overall
compensation to key strategic, financial, and operational goals, including:
establishing and maintaining customer relationships; signing original equipment
manufacturer agreements; meeting revenue targets and profit and expense
targets; introducing new products; progressing products towards manufacturing;
and improving operational efficiency.
We believe that
potential equity ownership in the Company is important to provide executive
officers with incentives to build value for our stockholders. We believe that
equity awards provide executives with a strong link to our short-term and
long-term performance while creating an ownership culture to maintain the
alignment of interests between our executives and our stockholders. When
implemented responsibly, we also believe these equity incentives can function
as a powerful executive retention tool.
The Compensation
Committee of the Board, consisting entirely of independent directors,
administers our compensation plans and policies, including the establishment of
policies that govern base salary as well as short-term and long-term incentives
for our executive management team.
Summary of Cash and Other
Compensation
The following table
sets forth the total compensation awarded to, earned by, or paid to, for
services rendered in all capacities to the Company during the fiscal years
ended December 31, 2020 and December 31, 2019, our "named executive officers,"
as defined in SEC rules.
SUMMARY COMPENSATION TABLE
Name and Principal Position
|
|
Year
|
|
Salary
|
|
Non-Equity
Incentive
Plan
Compensation
($) (2)
|
|
All Other
Compensation
(3)
|
|
Total
|
Frederick
W. Jones (1)
|
|
2020
|
$
|
145,141
|
|
-
|
$
|
34,992
|
$
|
180,133
|
Chief Executive, Chief
Financial Officer and Secretary
|
|
2019
|
|
192,995
|
$
|
25,000
|
|
7,720
|
|
225,715
|
Michael
Toporek (4)
Chief
Executive Officer
|
|
2020
|
|
20,192
|
|
-
|
|
-
|
|
20,192
|
Jessica L. Thomas (5)
Chief Financial Officer
|
|
2020
|
|
73,326
|
|
-
|
|
-
|
|
73,326
|
|
(1)
|
Mr. Jones resigned from the
Company effective September 11, 2020.
|
|
(2)
|
The amounts shown in this
column represent accruals made pursuant to the successful completion of
certain performance objectives pursuant to Mr. Jones' employment agreement.
|
|
(3)
|
"All Other Compensation" for
Mr. Jones consisted of $6,588 of matching contributions to our 401(k) plan
and a $28,404 payment for accrued but unused vacation time in 2020 and solely
matching 401(k) contributions in 2019.
|
|
(4)
|
Mr. Toporek became Chief
Executive Officer of the Company effective October 28, 2020.
|
|
(5)
|
Mrs. Thomas became Chief
Financial Officer of the Company effective July 1, 2020.
|
21
Base Salary and Cash Incentives of our Chief Executive
Officer and Chief Financial Officer
On
May 5, 2017, the Company entered into an employment agreement with Mr. Jones to
serve as its Chief Executive Officer and Chief Financial Officer. The agreement
provided for an initial term ending December 31, 2018, and, unless either party
provided written notice that the agreement would not be renewed, was renewed
for an additional year on December 31, 2018 and each subsequent December 31;
such non-renewal could be for any or for no stated reason. Mr. Jones resigned
from the Company and provided notice of non-renewal on August 24, 2020.
The agreement provided that Mr. Jones would
receive an annual base salary of $182,310 or such higher figure as may be
agreed upon from time to time by the Board. Mr. Jones was also eligible to
receive an annual bonus in accordance with our executive bonus program, which
is established annually by the Board at its sole discretion, and also could
have received, at our sole discretion, an additional, discretionary bonus in
connection with his annual evaluation by the Board. Mr. Jones was also eligible
to receive options to purchase Common Stock or other equity awards under our
equity incentive plans in such amounts as determined by the Board, and was
entitled to such employee benefits, if any, as are generally provided to our
full-time employees.
In January 2019, the Compensation Committee
increased Mr. Jones' annual base salary to $193,125. The Compensation Committee
approved a $25,000 payment for Mr. Jones for his additional responsibilities
and duties relative to the Company's initiative to establish EcoChain and
associated investment in the field of vertically integrated energy production
and cryptocurrency mining. As such, we accrued for Mr. Jones, as of December
31, 2019, a $25,000 payment. This accrual was paid in full during January 2020.
In January 2020, the Compensation Committee
increased Mr. Jones' annual base salary to $198,919.
Mr. Jones resigned as the Company's Chief
Executive Officer and Chief Financial Officer effective September 11, 2020.
Upon his resignation, all options to purchase Common Stock held by Mr. Jones
were exercisable within 90 days and were exercised by him within that
timeframe. Due to the voluntary nature of his resignation, Mr. Jones did not
receive any termination or other payments in connection with his resignation.
In addition to base salary compensation, we
consider short-term cash incentives to be an important tool in motivating and
rewarding near-term performance against established short-term goals. We do not
utilize a specific formula, but executive management is eligible for cash
awards contingent upon achievement of individual, financial, or Company-wide
performance criteria. The criteria are established to ensure that a reasonable
portion of an executive's total annual compensation is performance-based.
We believe that the higher an executive's level
of responsibility, the greater the portion of that executive's total earnings
potential should be tied to the achievement of critical technological,
operational, and financial goals. We believe that this strategy places the
desired proportionate level of risk and reward on performance by the executive
officers.
While performance targets are established at levels that
are intended to be achievable, we believe that we have structured these
incentives so that maximum bonus payouts would require a substantial level of
both individual and Company performance.
Long-Term Equity Incentive
Compensation
Equity awards typically take the form of stock options,
restricted stock grants, or restricted stock units under our equity
compensation plans. Authority to make equity awards to executive officers rests
with the Compensation Committee. In determining the size of awards for new or
current executives, the Compensation Committee consider the competitive market,
strategic plan performance, contribution to future initiatives, benchmarking of
comparative equity ownership for executives in comparable positions at similar
companies, individual option history, and recommendations of our Chief
Executive Officer and Chairman.
22
We generally
base our criteria for performance-based equity awards on one or more of the
following long-term measurements:
-
procurement and maintenance of original equipment manufacturer
alliance/strategic agreements;
-
manufacturing readiness;
-
financing targets;
-
gross revenue and profit goals;
-
operating expense improvements; and
-
product launches, new product introductions, or improvements to
existing products or product-intent prototypes.
These performance measurements support various initiatives
identified by the Board as critical to our future success, and are either
expressed as absolute in terms of success or failure or will be measured in
more qualitative terms.
The timing of all equity awards for our named executive
officers have coincided with either employment anniversary dates or our annual
meeting dates, or such equity awards are granted at the next scheduled meeting
of the Compensation Committee following the completion or assignment of the
applicable objectives. We do not time equity grants to our executives in
coordination with the release of material non-public information, nor do we
impose any equity ownership guidelines on our executives.
Outstanding
Equity Awards at Fiscal Year End
The
following table provides information as to equity awards granted by the Company
and held by Michael Toporek and Jessica Thomas and outstanding as of December
31, 2020. Frederick Jones held no outstanding equity awards of the Company at
December 31, 2020.
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
|
Option
Grant
Date
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
|
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
vested
(#)
|
|
Michael Toporek
|
|
12/12/2018
|
|
|
3,750 (1)
|
|
|
|
3,750
|
|
|
|
0.90
|
|
|
12/12/2028
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jessica L. Thomas
|
|
07/01/2020
|
|
|
-
|
|
|
|
25,000
|
|
|
|
0.70
|
|
|
07/01/2030
|
|
|
7,500
|
|
|
$
|
27,225
|
|
(1)
|
One-half of the unvested
options will vest on 12/12/2021 and the remaining will vest on 12/12/2022.
|
Director
Compensation for Fiscal Year 2020
Directors
who are also our employees, in particular Mr. Toporek, are not compensated for
serving on the Board.
On
January 14, 2020, the Board's Compensation Committee authorized non-employee
directors to continue to receive cash compensation of $10,000 per year, with
additional consideration for the lead independent director of $5,000 per year.
The Committee also authorized special one-time restricted stock awards to the
CEO and members of the Company's Investment Committee, as shown in the table
below. The restricted stock awards vest in two equal annual installments
beginning on January 14, 2021. Future director compensation will be determined
by the Compensation Committee.
23
Name
|
Fees Earned or
Paid in Cash
|
Total
|
Stock
Award ($)
|
Edward R. Hirshfield (1)
|
$10,000
|
$10,000
|
-
|
Matthew E. Lipman (2)
|
$10,000
|
$10,000
|
-
|
Thomas J. Marusak (3)
|
$10,000
|
$10,000
|
$15,310
|
David
C. Michaels (4)
|
$15,000
|
$15,000
|
$15,310
|
William
P. Phelan (5)
|
$10,000
|
$10,000
|
$34,650
|
(1)
As of December 31, 2020, Mr. Hirshfield had 7,500 options outstanding, 3,750 of
which were exercisable.
(2) As of December
31, 2020, Mr. Lipman had 7,500 options outstanding, 3,750 of which were
exercisable.
(3) As of December
31, 2020, Mr. Marusak had 44,500 options outstanding, 38,250 of which were
exercisable.
(4) As of December
31, 2020, Mr. Michaels had 43,000 options outstanding, 35,500 of which were
exercisable.
(5)
As of December 31, 2020, Mr. Phelan had 83,500 options outstanding, 77,250 of
which were exercisable.
Summary of the
Company's Equity Incentive Plans
General Plan
Information
As
of December 31, 2020, the Company had two equity compensation plans pursuant to
which equity awards could be granted or under which equity awards were
outstanding - the Amended and Restated 2012 Plan (the "2012 Plan") and the 2014
Equity Incentive Plan (the "2014 Plan").
Additionally,
the Company's stockholders approved the Company's 2021 Stock Incentive Plan at
a special meeting of stockholders on March 25, 2021 (the "2021 Plan" and,
together with the 2012 Plan and the 2014 Plan, the "Plans"). The 2021 Plan was
adopted by the Board on February 12, 2021 and approved by our stockholders on
March 25, 2021.
2012
Plan
The 2012 Plan, was adopted by the Board on April 14, 2012 and approved
by our stockholders on June 14, 2012. The 2012 Plan was amended and restated by
the Board effective October 20, 2016 to (i) permit the award agreement or
another agreement entered into between the Company and the award grantee to
vary the method of exercise of options issued under the 2012 Plan and (ii)
permit another agreement entered into between the Company and the award
grantee, in addition to the award agreement, to vary the provisions governing
expiration of options or other awards under the 2012 Plan following termination
of the award recipient's service with the Company. The 2012 Plan provides that
an aggregate of 600,000 shares of Common Stock may be awarded or issued
pursuant to the 2012 Plan. The number of shares of Common Stock that may be
awarded under the 2012 Plan and awards outstanding may be subject to adjustment
on account of any recapitalization, reclassification, stock split, reverse
stock split, and other dilutive changes in the Common Stock. Under the 2012
Plan, the Board is authorized to issue stock options (incentive and
nonqualified), stock appreciation rights, restricted stock, restricted stock
units, and other stock-based awards to employees, officers, directors, consultants,
and advisors of the Company and its subsidiaries. Incentive stock options may
only be granted to employees of the Company and its subsidiaries. As of
December 31, 2020, options to purchase 240,680 shares of Common Stock were
outstanding under the 2012 Plan, of which 118,500 were exercisable, with 1,750
shares reserved for future grants of equity awards under the 2012 Plan.
24
2014
Plan
The
2014 Plan was adopted by the Board on March 12, 2014 and approved by our
stockholders on June 11, 2014. The 2014 Plan provides an aggregate number of
500,000 shares of Common Stock that may be awarded or issued under the 2014
Plan. The number of shares that may be awarded under the 2014 Plan and awards
outstanding may be subject to adjustment on account of any stock dividend,
spin-off, stock split, reverse stock split, split-up, recapitalization,
reclassification, reorganization, combination or exchange of shares, merger,
consolidation, liquidation, business combination, exchange of shares, or the
like. Under the 2014 Plan, the Board-appointed administrator of the 2014 Plan
is authorized to issue stock options (incentive and nonqualified), stock
appreciation rights, restricted stock, restricted stock units, phantom stock,
performance awards, and other stock-based awards to employees, officers, and
directors of, and other individuals providing bona fide services to or for, the
Company or any affiliate of the Company. Incentive stock options may only be
granted to employees of the Company and its subsidiaries. As of December 31,
2020, options to purchase 239,000 shares of Common Stock were outstanding under
the 2014 Plan, of which 157,500 were exercisable, with 9,375 shares reserved
for future grants of equity awards under the 2014 Plan.
2021
Plan
The
2021 Plan was adopted by the Board on February 12, 2021, and approved by the
stockholders on March 25, 2021. The 2021 Plan authorizes the Company to issue
such shares of Common Stock upon the exercise of stock options, the grant of
restricted stock awards, and the conversion of restricted stock units
(collectively, the "Awards"). The Compensation Committee has full authority,
subject to the terms of the 2021 Plan, to interpret the 2021 Plan and establish
rules and regulations for the proper administration of the 2021 Plan. Subject to
certain adjustments as provided in the 2021 Plan, the maximum aggregate number
of shares of Common Stock that may be issued under the 2021 Plan (i) pursuant
to the exercise of stock options, (ii) as restricted stock, and (iii) as
available pursuant to restricted stock units shall be limited to (A) during the
Company's fiscal year ending December 31, 2021, 1,460,191 shares of Common
Stock, and (B) beginning with the Company's fiscal year ending December 31,
2022), 15% of the number of shares of Common Stock outstanding. Subject to
certain adjustments as provided in the 2021 Plan, (i) shares of Common Stock
subject to the 2021 Plan shall include shares of Common Stock forfeited in a
prior year and (ii) the number of shares of Common Stock that may be issued
under the 2021 Plan may never be less than the number of shares of Common Stock
that are then outstanding under Award grants.
Securities Authorized for Issuance Under
Equity Compensation Plans
The
following table presents certain information as of December 31, 2020, with
respect to compensation plans under which equity securities of MTI are
authorized for issuance:
Plan Category
|
|
Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights(1)
(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
|
|
|
398,750
|
|
|
$
|
0.87
|
|
|
|
11,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The securities available under the Plans for issuance
and issuable pursuant to exercises of outstanding options may be adjusted in
the event of a change in outstanding stock by reason of stock dividend, stock
splits, reverse stock splits, etc.
|
25
Prerequisites and
Other Benefits
Our
executive officers are eligible to participate in similar benefit plans
available to all our other employees including medical, dental, vision, group
life, disability, accidental death and dismemberment, paid time off, and 401(k)
plan benefits.
We also maintain a standard
directors and officers liability insurance policy with coverage similar to the
coverage typically provided by other small publicly-held technology companies.
ADDITIONAL INFORMATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth
certain information regarding shares of Common Stock beneficially owned as of
April 14, 2021, for (i) each stockholder known to be the beneficial owner of
more than 5% of our outstanding shares of common stock, (ii) each named
executive officer and director, and (iii) all executive officers and directors
as a group. A person is considered to beneficially own any shares over which
such person, directly or indirectly, exercises sole or shared voting or
investment power.
|
Shares Beneficially Owned
|
|
Name and Address of Beneficial Owner (2)
|
Number (2)
|
|
Percent of
Class(1)
|
|
Executive Officers
|
|
|
|
|
Jessica L. Thomas
|
7,500
|
|
*
|
|
Moshe Binyamin (3)
|
15,671
|
|
*
|
|
Michael Toporek (4)(10)
|
3,761,250
|
|
38.0
|
%
|
|
|
|
|
|
Non-Employee Directors
|
|
|
|
|
Edward R. Hirshfield (5)
|
11,250
|
|
*
|
|
Matthew E. Lipman (6)(10)
|
3,761,350
|
|
38.0
|
%
|
Thomas J. Marusak (7)
|
218,275
|
|
2.2
|
%
|
David C. Michaels (8)
|
140,977
|
|
1.4
|
%
|
William P. Phelan
|
244,750
|
|
2.5
|
%
|
William Hazelip
|
-
|
|
-
|
|
Alykhan Madhavji
|
-
|
|
-
|
|
|
|
|
|
|
All current directors and executive
officer as a group (10 persons)
|
4,411,023
|
|
44.1
|
%
|
|
|
|
|
|
Persons or Groups Holding More
than 5% of the Common Stock
|
|
|
|
|
Brookstone Partners Acquisition XXIV, LLC (9)
232 Madison Avenue, Suite 600
New York, NY 10016
|
3,750,000
|
|
37.9
|
%
|
(1) Based on 9,889,762 shares of Common Stock
outstanding on April 14, 2021 and, with respect to each individual holder,
rights to acquire shares of Common Stock exercisable within 60 days of April
14, 2021.
(2) Unless otherwise indicated, each of the
stockholders has sole voting and investment power with respect to the shares of
Common Stock beneficially owned by the stockholder.
(3) Includes 3,750 shares of Common Stock issuable to Mr. Binyamin upon exercise of stock options exercisable within 60
days of April 14, 2021.
26
(4) Includes 3,750 shares of Common Stock issuable to Mr. Toporek upon exercise of stock options exercisable within 60
days of April 14, 2021. Also includes 3,750,000 shares of Common
Stock owned by Mr. Toporek indirectly pursuant to his position with Brookstone
XXIV and/or its affiliates.
(5) Includes 3,750 shares of Common Stock issuable to Mr. Hirshfield upon exercise of stock options exercisable within 60
days of April 14, 2021.
(6) Includes 3,750 shares of Common Stock issuable to Mr. Lipman upon exercise of stock options exercisable within 60
days of April 14, 2021. Also includes 3,750,000 shares of Common
Stock owned by Mr. Lipman indirectly pursuant to his position with Brookstone
Partners XXIV and/or its affiliates.
(7) Includes 38,250 shares of Common Stock issuable to Mr. Marusak upon exercise of stock options exercisable within 60
days of April 14, 2021.
(8) Includes
35,500 shares of Common Stock issuable to Mr. Michaels upon exercise of stock
options exercisable within 60 days of April 14, 2021.
(9) Representatives
of Brookstone XXIV have provided us the following information: As the Manager
of Brookstone XXIV, Brookstone Partners I.A.C. may be deemed to beneficially
own the shares of Common Stock owned directly by Brookstone XXIV. Michael
Toporek is President of Brookstone Partners I.A.C. and Matthew Lipman is
Secretary of Brookstone Partners I.A.C. and share voting and dispositive power
over the shares of Common Stock owned by Brookstone XXIV. As a result of the
foregoing, in computing the beneficial ownership of all executive officers and
directors, as a group, the 3,750,000 shares of Common Stock owned indirectly by
each of Mr. Toporek and Mr. Lipman, as a result of their interests in Brookstone
XXIV and/or its affiliates, is only counted once. The address of
each of Brookstone XXIV, Brookstone Partners I.A.C., Michael Toporek, and
Matthew Lipman is 232 Madison Avenue, Suite 600, New York, New York 10016.
HEDGING POLICY
The Company's insider trading
policy prohibits hedging transactions by all of our directors, officers, and
employees, whether obtained through our employee benefit plans or otherwise.
The hedging prohibition in the policy is excerpted below:
Hedging Transactions.
Hedging or monetization transactions can be accomplished through a number of
possible mechanisms, including through the use of financial instruments such as
prepaid variable forwards, equity swaps, collars, and exchange funds. Such
transactions may permit a director, officer, or employee to continue to own
Company securities obtained through employee benefit plans or otherwise, but
without the full risks and rewards of ownership. When that occurs, the
director, officer, or employee may no longer have the same objectives as the
Company's other stockholders. Therefore, directors, officers, and employees
are prohibited from engaging in any such transactions.
STOCKHOLDER PROPOSALS
We did not receive any
stockholder proposals for inclusion in this Proxy Statement.
In order to be
included in the proxy materials for the Company's annual meeting of
stockholders to be held in 2022, stockholder proposals submitted to the Company
in compliance with SEC Rule 14a-8 (which concerns stockholder proposals that
are requested to be included in a company's proxy statement) must be received
by us at our offices, 325 Washington Avenue Extension, Albany, New York 12205
on or before January 10, 2022, We suggest that proponents
submit their proposals by certified mail, return receipt requested, addressed
to our Secretary.
With
respect to stockholder proposals to be submitted outside the Rule 14a-8 process
for consideration at the 2022 annual meeting of stockholders, if the Company
does not receive notice of any such proposal to be presented at the 2022 annual
meeting of stockholders on or before March 26, 2022, the proxies designated by
the Board will have discretionary authority to vote on any such proposal.
27
OTHER MATTERS
We do not know of any matters
that will be brought before the Annual Meeting other than those specifically
set forth in the notice thereof. If any other matter properly comes before the
meeting for which we did not receive notice by March 15, 2021, however, it is
intended that the shares represented by proxies will be voted with respect
thereto in accordance with the best judgment of the person voting them.
By Order of the Board of
Directors,
|
/s/ Jessica L. Thomas
|
Jessica L. Thomas
|
Chief Financial Officer and
Secretary
|
Albany, New York
April 30, 2021
28
Appendix A
Articles of Amendment
Profit Corporation:
Certificate
of Amendment (PURSUANT
TO NRS 78.380 & 78.385/78.390)
Certificate
to Accompany Restated Articles or Amended and
Restated Articles
(PURSUANT
TO NRS 78.403)
Officer's
Statement (PURSUANT
TO NRS 80.030)
TYPE OR PRINT - USE DARK
INK ONLY - DO NOT HIGHLIGHT
1.
Entity
information:
|
Name of entity as on file with the
Nevada Secretary of State:
|
MECHANICAL
TECHNOLOGY, INCORPORATED
|
|
|
Entity or Nevada Business
Identification Number (NVID):
|
NV20212050777
|
|
|
2. Restated or
Amended and
Restated
Articles:
(Select
one)
(If
amending and
restating only,
complete
section 1,2 3, 5 and
6)
|
☑ Certificate to Accompany Restated
Articles or Amended and Restated Articles
☐ Restated Articles - No amendments;
articles are restated only and are signed by an
officer of the corporation who has
been authorized to execute the certificate by
resolution of the board of directors
adopted on: ____________________________
|
The certificate correctly sets forth
the text of the articles or certificate as amended
to the date of the
certificate.
☑ Amended and Restated Articles
* Restated or Amended
and Restated Articles must be included with this filing type.
|
3. Type of
Amendment Filing
Being
Completed:
(Select
only one box)
(If amending, complete
section 1, 3, 5 and 6.)
|
☐ Certificate of Amendment to Articles
of Incorporation (Pursuant to NRS 78.380 - Before
Issuance of Stock)
The undersigned declare that they
constitute at least two-thirds of the following:
(Check only one box)
☐ incorporators ☐ board
of directors
The undersigned
affirmatively declare that to the date of this certificate, no stock
of the
corporation has been issued
|
☑ Certificate of Amendment to Articles
of Incorporation (Pursuant to NRS 78.385 and
78.390 - After Issuance of
Stock)
The
vote by which the stockholders holding shares in the corporation entitling
them to exercise at least a majority of the voting power, or such greater
proportion of the voting power as may be required in the case of a vote by
classes or series, or as may be required by the provisions of the articles of
incorporation* have voted in favor of the amendment is:_____________
|
☐ Officer's Statement (foreign qualified
entities only) -
Name in home state, if using a
modified name in Nevada:
|
|
|
|
|
Jurisdiction of formation:
|
|
|
Changes to takes the following effect:
☐ The entity name has been amended. ☐ Dissolution
☐ The purpose of the entity has been
amended. ☐ Merger
☐ The authorized shares have been amended. ☐ Conversion
☐ Other: (specify changes)
|
|
|
|
*
Officer's Statement must be submitted with either a certified copy of or a
certificate evidencing the filing of any document, amendatory or otherwise,
relating to the original articles in the place of the corporations creation.
|
This form must be accompanied by appropriate fees.
|
Page 1 of 2
|
|
Revised: 1/1/2019
|
Profit
Corporation:
Certificate of Amendment (PURSUANT TO NRS 78.380 & 78.385/78.390)
Certificate
to Accompany Restated Articles or Amended and
Restated Articles (PURSUANT
TO NRS 78.403)
Officer's
Statement (PURSUANT
TO NRS 80.030)
|
|
|
4. Effective Date and
Time: (Optional)
|
Date
_____________________ Time:
____________________
|
(must
not be later than 90 days after the certificate is filed)
|
5. Information Being
Changed: (Domestic
corporations only)
|
Changes to takes the
following effect:
☐ The entity name has
been amended.
☐ The registered agent
has been changed. (attach Certificate of Acceptance from new
registered agent)
☐ The purpose of the
entity has been amended.
☐ The authorized shares
have been amended.
☐ The directors,
managers or general partners have been amended.
☐ IRS tax language has
been added.
☐ Articles have been
added.
☐ Articles have been
deleted.
☑ Other.
The articles have been
amended as follows: (provide article numbers, if available)
|
|
|
Please
see attached page.
|
|
(attach
additional page(s) if necessary)
|
6. Signature:
|
|
(Required)
|
X_____________________________________
_______________________
|
|
Signature
of Officer or Authorized Signer Title
|
|
X_____________________________________
_______________________
|
|
Signature
of Officer or Authorized Signer Title
*If any proposed
amendment would alter or change any preference or any relative or other right
given to any class or series of outstanding shares, then the amendment must
be approved by the vote, in addition to the affirmative vote otherwise
required, of the holders of shares representing a majority of the voting
power of each class or series affected by the amendment regardless to
limitations or restrictions on the voting power thereof.
|
Please
include any required or optional information in space below:
(attach
additional page(s) if necessary)
The fixed maximum number of directors
constituting the entire Board of Directors has been changed from nine to 10.
This form must be accompanied by appropriate fees.
|
Page 2 of 2
|
|
Revised: 1/1/2019
|
11. MANAGEMENT:
The number of directors
constituting the entire Board of Directors shall be not less than one nor more
than ten as fixed from time to time by vote of a majority of the entire Board
of Directors, provided, however, that the number of directors shall not be reduced
so as to shorten the term of any director at the time in office. The Board of
Directors shall be divided into three classes, as nearly equal in numbers as
the then total number of directors constituting the entire Board of Directors
permits with the term of office of one class expiring each year. Any vacancies
in the Board of Directors for any reason, and any directorships resulting from
any increase in the number of directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although less
than a quorum, and any directors so chosen shall hold office until the next
election of the class for which such directors shall have been chosen and until
their successors shall be elected and qualified. Subject to the foregoing, at
each annual meeting of shareholders the successors to the class of directors
whose term shall then expire shall be elected to hold office for a term
expiring at the third succeeding annual meeting.
Notwithstanding any other
provision of these Articles of Incorporation or the bylaws of the corporation
(and notwithstanding the fact that some lesser percentage may be specified by
law, these Articles of Incorporation or the bylaws of the Corporation), any
director or the entire Board of Directors of the corporation may be removed at
any time, but only for cause or after the affirmative vote of 75% or more of
the outstanding shares of stock entitled to vote for the election of directors
at a meeting called for that purpose or after the affirmative vote of 75% of
the entire Board of Directors.
12. LIMITED LIABILITY OF OFFICERS AND DIRECTORS
Except as hereinafter provided, the
officers and directors of the Corporation shall not be personally liable to the
Corporation or its stockholders for damages for breach of fiduciary duty as a
director or officer. This limitation on personal liability shall not
apply to acts or omissions which involve intentional misconduct, fraud, knowing
violation of law, or unlawful distribution prohibited by NRS § 78.300.
13. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. The Corporation shall indemnify, to the fullest extent
permitted by the Nevada Revised Statutes, any person who was or is a party or
is threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, except an action by or in the right of the Corporation, by
reason of the fact that the person is or was a director, officer, employee, or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against expenses,
including attorneys' fees, judgments, fines, and amounts paid in settlement
actually and reasonably incurred by the person in connection with the action if
the person:
(a) Is not
liable pursuant to NRS § 78.138; or
(b) Acted in good faith and
in a manner which he or she reasonably believed to be in or not opposed to the
best interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the conduct was unlawful.
The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, does not, of itself, create a presumption that
the person is liable pursuant to NRS § 78.138 or did not act
in good faith and in a manner which he or she reasonably believed to be in or
not opposed to the best interests of the Corporation, or that, with respect to
any criminal action or proceeding, he or she had reasonable cause to believe
that the conduct was unlawful.
Section 2. The Corporation shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending, or completed action or suit by or in the right of
the Corporation to procure a judgment in its favor by reason of the fact that
the person is or was a director, officer, employee, or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another Corporation, partnership,
joint venture, trust, or other enterprise against expenses, including
attorneys' fees, judgments, fines, and amounts paid in settlement actually and
reasonably incurred by the person in connection with the action if the person:
(a) Is not liable
pursuant to NRS § 78.138; or
(b) Acted in good faith and in a manner
which he or she reasonably believed to be in or not opposed to the best
interests of the corporation.
Indemnification may not be made for any
claim, issue, or matter as to which such a person has been adjudged by a court
of competent jurisdiction, after exhaustion of all appeals therefrom, to be
liable to the corporation or for amounts paid in settlement to the corporation,
unless and only to the extent that the court in which the action or suit was
brought or other court of competent jurisdiction determines upon application
that in view of all the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for such expenses as the court deems proper.
Section 3. To the extent that a director,
officer, employee, or agent of the Corporation has been successful on the
merits or otherwise in defense of any action, suit, or proceeding referred to
in Sections 1 and 2 of this Article XI, or in defense of any claim, issue, or
matter therein, the Corporation shall indemnify him or her against expenses,
including attorneys' fees, actually and reasonably incurred by him or her in
connection with the defense.
14. TRANSACTIONS WITH STOCKHOLDERS
Section 1. Combinations with
Interested Stockholders. The Corporation elects not to be governed by the
provisions of NRS § 78.411 through NRS § 78.444, inclusive, of
the Nevada Revised Statutes.
15. AMENDMENT OF ARTICLES
The Corporation reserves the right to
amend, alter, change or repeal any provision contained in these Articles of
Incorporation or its bylaws in the manner now or thereafter prescribed by
statute or by these Articles of Incorporation or by the Corporation's bylaws,
and all rights conferred upon the stockholders are granted subject to this
reservation.
|
VOTE BY INTERNET
Before The Meeting
- Go to
www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have
your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to
www.virtualshareholdermeeting.com/MTKY2021
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you
call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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D51690-P57082
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KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of Annual Meeting of Stockholders, Proxy Statement, Annual Report to Stockholders (which includes the Company's Annual Report on Form 10-K), and Form of Proxy Card are
available at www.proxyvote.com.
MECHANICAL TECHNOLOGY, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
JUNE 9, 2021
The stockholder(s) hereby appoint(s) Mr. Michael Toporek, as proxy, with the power to appoint his substitute, and hereby authorize(s) him to represent and to vote, as designated on the
reverse side of this ballot, all of the shares of Common Stock of Mechanical Technology, Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 10:00 a.m., Eastern Time on Wednesday June 9, 2021,
virtually at www.virtualshareholdermeeting.com/MTKY2021, and any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON
THE REVERSE SIDE FOR THE BOARD OF DIRECTORS, FOR PROPOSALS 2, 3 AND 4 AND 1 YEAR ON PROPOSAL 5.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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