DEF 14A of M-tron Industries, Inc.
Filed Apr 29, 2024 · FY20230001437749-24-013727
Is cumulative voting permitted for the election of directors?
Is cumulative voting permitted for the election of directors? We do not use cumulative voting for the election of directors.
What happens if a nominee for director does not stand for election?
What happens if a nominee for director does not stand for election? If for any reason any nominee does not stand for election, any proxies we receive will be voted in favor of the remaining nominees and may be voted for a substitute nominee in place of the nominee who does not stand. We have no reason to expect that any of the nominees will not stand for election.
Proposal No. 1: Election of Directors
Proposal No. 1: Election of Directors The current members of the Board, upon the recommendation of the Nominating Committee, have nominated each of the following eight nominees for election to the Board at the Annual Meeting: Bel Lazar; Michael Ferrantino; Marc Gabelli; Robert LaPenta; John Mega; Hendi Susanto; David Goldman and Ivan Arteaga. Our Amended and Restated Bylaws (our “Bylaws”) provide that the number of directors shall be fixed exclusively by resolution of the Board. As of and following the conclusion of the Annual Meeting, the size of the Board will be set at eight members. Each director is elected annually to serve until the next annual meeting of stockholders and until his or her successor is duly elected and qualifies. Except where authority to vote for directors has been withheld, it is intended that the proxies received pursuant to this solicitation will be voted “FOR” the nominees named below. If for any reason any nominee does not stand for election, such proxies will be voted in favor of the remainder of those named and may be voted for substitute nominees in place of those who do not stand. Management has no reason to expect that any of the nominees will not stand for election. Biographical summaries and ages of our directors and nominees, and the experiences and skills that led to the conclusion that such persons should serve as directors, are set forth in the table below. Information with respect to the shares of common stock beneficially owned by each of our directors and nominees is set forth in the section titled “Security Ownership of Certain Beneficial Owners and Management.” All such information has been furnished to us by our directors and nominees. There are no arrangements or understandings between any of our directors and any third person pursuant to which a director was selected to serve on the Board. There are no family relationships between any of our directors, or between any of our directors and officers.
Directors and Nominees
Directors and Nominees
Directors and Nominees
| Name | Age | Director Since | Offices and Positions Held with the Company, Business Experience and Principal Occupation for the Last Five Years, and Directorships in Public Corporations and Investment Companies | | Bel Lazar | 63 | 2022 | Mr. Lazar currently serves as Chairman of the Board for M-tron Industries, Inc. (September 2023 to present) and is currently Chief Operations Officer and member of the Board of Directors at Efficient Power Conversion, a leading provider of gallium nitride (GaN)-based power management technology (2015 to present); and Chief Executive Officer of EPC Space LLC, a high reliability wide-gap power management technology company, and was previously President and CEO of Spectrum Control, formerly API Technologies Corp. and a NASDAQ listed company. Mr. Lazar previously served on the Board of Directors of The LGL Group, Inc. (NYSE American: LGL) (January 2019 to October 2022 and held other leadership roles at Infineon and Microchip. Mr. Lazar brings to the Board his experience in management and aerospace manufacturing operations within our industry, and significant mergers and acquisition experience. | | Michael Ferrantino | 52 | 2022 | Mr. Ferrantino’s biographical information can be found under the section for Executive Officers, below. | | Marc Gabelli | 56 | 2022 | Mr. Gabelli currently serves as Special Advisor to the Chairman of the Board for M-tron Industries, Inc. (September 2023 to present); Chairman of the Board and Co-Chief Executive Officer for The LGL Group, Inc. (December 2017 to present, and October 2022 to present, respectively); President and Managing Partner, GGCP, Inc. (1999 to present) and holds various executive and directorship roles at GGCP financial services subsidiaries including GAMCO Investors, Inc., Associated Capital Group, Inc. and Teton Advisors, Inc. He formerly served as Chairman of the Board for M-tron Industries, Inc. (October 2022 to September 2023); Chairman and Chief Executive Officer, LGL Systems Acquisition Corp. (NYSE: DFNS) (September 2019 to August 2021); and Chairman of Gabelli Merger Plus Trust (GMP-LSE) (July 2017 to present). Mr. Gabelli brings to the Board his extensive knowledge of the Company’s business and industry due to his longstanding service on the Board of Directors of The LGL Group, Inc., as well as his financial expertise and leadership experience as an executive of various investment firms. |
Directors and Nominees
| Name | Age | Director Since | Offices and Positions Held with the Company, Business Experience and Principal Occupation for the Last Five Years, and Directorships in Public Corporations and Investment Companies | | Robert LaPenta | 56 | 2022 | Mr. LaPenta has an extensive career spanning over 30 years in finance, accounting, capital markets advisory, equity trading, asset allocation and mergers and acquisitions. Mr. LaPenta began his career at Coopers & Lybrand as a CPA responsible for managing audits, consulting, M&A due diligence and special project engagements for emerging growth clients. Mr. LaPenta transitioned full time into the investment banking sector spending the next 13 years focused on trading and capital market activities culminating in the role of Managing Director and Co-head of Equity Trading at Banc of America Securities, LLC where he managed the firm’s equity capital commitment, proprietary trading, secondary offerings, and risk management within cash trading. In 2007, Mr. LaPenta joined L-1 Identity Solutions, Inc. as Vice President of Mergers and Acquisitions and Corporate Strategy. Mr. LaPenta managed the firm’s M&A processes from sourcing, structuring, valuation, diligence, and financing of multiple transactions with the most notable being the negotiation of the $1.6 billion sale of L-1 to Safran and BAE Systems. Following the sale of L-1, Mr. LaPenta became a Partner of Aston Capital, an alternative asset management firm of the LaPenta family office focusing on direct and co-investments. Mr. LaPenta previously served on the Board of Directors for IronNet, Inc. (NYSE: IRNT) (August 2021 to September 2023); The LGL Group, Inc (NYSE: American: LGL) (August 2020 to September 2021); TherapeuticsMD (NASDAQ: TXMD) (February 2012 to April 2020); Revolution Lighting Technologies, Inc. (until 2016); and on the Board of Directors of private companies The Radiant Group (subsequently part of NASDAQ: MAXR) and AFIX Technologies. He recently was a Board Observer of ARKA and currently sits as an Audit Committee member for St. David’s School New York City. Mr. LaPenta graduated from Boston College with a bachelor’s degree in accounting and finance and has been a registered CPA (inactive) in the State of New York. Mr. LaPenta brings to the Board his business experience, prior board service and experience as an entrepreneur, investor, and investment banker and earlier in his career as an audit professional. | | John Mega | 71 | 2022 | Mr. Mega served as President of LGL Systems Acquisition Corp. (NYSE: DFNS) from September 2019 to August 2021 and a member of the Board of Directors of The LGL Group, Inc. (NYSE American: LGL) from August 2020 to October 2022. Mr. Mega was an original founding member of L3, which merged with Harris Technologies and is now L3Harris Technologies, Inc. (NYSE: LHX). Mr. Mega built and managed several divisions at L3 since its formation in 1997 after spinning off from Lockheed Martin. Prior to his retirement in 2018, he was a corporate Senior Vice President and President of L3’s Communication Systems, one of the four L3 major business segments. Earlier in his career, he had been President of L3’s Microwave Group, President of Narda Microwave, President of Logimetrics, Inc., Chief Financial Officer and Vice President at Lockheed Martin Corp.’s Tactical Defense Systems, Group Controller at Loral Corp. and a principal at Raytheon Company (NYSE: RTN). Mr. Mega brings to the Board his considerable experience in management and manufacturing operations within our industry. | | Hendi Susanto | 50 | 2022 | Mr. Susanto currently serves as a Senior Vice President and a Portfolio Manager at Gabelli Funds. Mr. Susanto has also served as a Portfolio Manager at GAMCO Investors, Inc. since December 2015. Mr. Susanto began his investment management career in equity research in August 2007. Mr. Susanto joined the Board of Directors of The LGL Group, Inc. (NYSE American: LGL) in June 2016, serving until December 2020. Prior to 2007, Mr. Susanto worked as an analyst at Silicon Laboratories (NASD: SLAB) and a supply chain management consultant in the technology sector at JDA Software. Mr. Susanto received a bachelor’s degree summa cum laude in Chemical Engineering from the University of Minnesota, an MS in Chemical Engineering from MIT, with a minor in Quantitative Finance from MIT Sloan, and an MBA in Finance from the Wharton School. Mr. Susanto brings to the Board extensive experience in evaluating investments in technology, and special situations such as mergers and acquisitions, strategic transformation, and restructuring. |
Directors and Nominees
| Name | Age | Director Since | Offices and Positions Held with the Company, Business Experience and Principal Occupation for the Last Five Years, and Directorships in Public Corporations and Investment Companies | | David Goldman | 50 | 2022 | Mr. Goldman provides legal counsel and engages in business development for financial service companies under the GGCP, Inc. umbrella. He is the General Counsel for Associated Capital Group, Inc. (NYSE: AC) and General Counsel, Senior Vice-President Business Development for GAMCO Asset Management, Inc. Mr. Goldman serves on the boards of numerous international subsidiaries of GAMCO Investors, Inc. Mr. Goldman served as a director of Teton Advisors, Inc. from September 2021 to September 2022. Prior to joining GAMCO, Mr. Goldman held senior legal, compliance and business roles at Deutsche Asset Management, Inc., the asset management division of Deutsche Bank. Mr. Goldman served as the primary liaison between the Deutsche Bank mutual fund directors and the fund’s investment adviser. He holds an LL.M. from Georgetown University School of Law and a JD from the University of Maryland School of Law. Mr. Goldman earned a B.S. in Accounting from Indiana University in Bloomington. Mr. Goldman is a licensed CPA (inactive). Mr. Goldman serves on the Board of Advisors of the Earl Monroe New Renaissance Basketball School in the Bronx, NY. Mr. Goldman is also an Adjunct Professor of Law at Fordham University School of Law. Mr. Goldman brings to the Board his understanding of public company governance and experience counselling public company boards of directors on oversight responsibilities, policies and procedures. | | Ivan Arteaga | 55 | 2022 | Mr. Arteaga is the Managing Member and Chief Investment Officer of Arteaga Capital Management, LLC (2006 to present), an investment manager to alternative global investment funds and provider of equity research services; Portfolio Manager of Arteaga Global Partners, LP (2007 to present), a global equity investment partnership; Managing Member of Arteaga Investment Management Group, LLC (2008 to present), a registered investment advisor; and Director of Brick Skirt Holdings, Inc. (2014 to present), an owner of rural local exchange carrier DFT Communications. Formerly, he was Chief Financial Officer of The LGL Group, Inc. (October 2022 to January 2023); Interim Chief Executive Officer of The LGL Group, Inc. (January 2020 to March 2021); a member of the Board of Directors of The LGL Group, Inc. (January 2019 to October 2022); Portfolio Manager at GAMCO Investors, Inc. (1994 to 2006); Vice President of Equity Research, Gabelli & Company, Inc., a provider of institutional research and brokerage services (1992 to 2002); and Senior Associate at KPMG Inc., a global CPA, audit and consulting firm. Mr. Arteaga brings to the Board his extensive financial and investment experience, his knowledge of global financial markets, and his knowledge and experience as an analyst and investor in the communications and satellite industry. |
Directors and Nominees
Each nominee receiving a plurality of the affirmative (“FOR”) votes cast at the Annual Meeting will be elected to the Board. THE BOARD RECOMMENDS A VOTE ‘FOR’ THE ELECTION OF EACH OF ITS NOMINEES TO THE BOARD TO SERVE UNTIL THE 2025 ANNUAL MEETING AND UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND QUALIFY.
Compensation Benchmarking
Compensation Benchmarking The Company has not retained a compensation consultant to review its policies and procedures with respect to the compensation of the named executive officers, though it may choose to do so in the future. The Compensation Committee benchmarks the compensation of the named executive officers against the median compensation paid by comparable companies determined at the time. To that end, the Compensation Committee will conduct a benchmark review as often as deemed necessary of the aggregate level of compensation of the named executive officers as well as the mix of elements used to compensate the named executive officers, taking into account input from independent members of the Board and publicly available data relating to the compensation practices and policies of comparable companies. While benchmarking may not always be appropriate as a stand-alone tool for setting the compensation of the named executive officers due to the Company’s potentially unique circumstances and objectives, the Compensation Committee generally believes that gathering such information is an important part of the Compensation Committee’s decision-making process. Notwithstanding the foregoing, the Compensation Committee may determine that it is in the Company’s best interest to recommend total compensation packages that deviate from the Compensation Committee’s general principle of benchmarking the compensation of the named executive officers.
Elements of Compensation
Elements of Compensation Base Salary Base salary levels for the Company’s named executive officers are designed to be competitive with those of employees with similar responsibilities working for companies of comparable size, capitalization and complexity. In determining base salaries, the Compensation Committee takes into account a variety of factors, including experience, performance, and benchmarking. Incentive Compensation The Company provides annual and long-term incentive compensation to its executives and managers under the Company’s Amended and Restated 2022 Incentive Plan (the “2022 Incentive Plan”), which was approved prior to the Separation by our Board on August 19, 2022. The 2022 Incentive Plan is designed to provide annual and long-term incentives for executive performance by rewarding participating executives for their contributions to profitability and stockholder value based on achieving short-term Company and individual performance goals for a given year, as well as by aligning a significant portion of compensation with the long-term interests of stockholders. Short-term Company performance goals include revenue growth, EBITDA, earnings per share and return on equity. Long-term Company performance goals include increasing the Company’s total market value. The Compensation Committee may recommend that other corporate performance measures be substituted or added (including but not limited to operating income after tax, return on capital employed and stockholder return) in order to achieve the Company’s business strategy. Individual performance goals for the Chief Executive Officer are established by the Compensation Committee and recommended to the Board for approval, while individual performance goals for our other employees are established by the Chief Executive Officer and reviewed by the Compensation Committee. M-tron Industries, Inc. 401(k) Plan The M-tron Industries, Inc. 401(k) Plan (the “401(k) Plan”), which is subject to limitations imposed by the Internal Revenue Code of 1986, as amended (the “Code”), permits the Company’s employees to defer a portion of their compensation by making contributions to the 401(k) Plan and thereby obtain certain tax benefits. Participating employees also benefit from the 401(k) Plan by sharing in discretionary contributions made by the Company to the 401(k) Plan based on each employee’s contribution made in a particular year. A participant’s interest in his or her individual contributions, the Company’s contributions and earnings thereon is fully vested at all times. The 401(k) Plan’s proceeds are invested in guaranteed investment contracts or certain mutual funds, subject to the discretion of the participants. The named executive officers and all other employees over the age of 18 of the Company and certain of its subsidiaries are eligible to participate in the 401(k) Plan after having completed three months of service. Other Benefits The Company makes available to its named executive officers the same medical insurance, life insurance and disability benefits that are generally made available to the Company’s employees to ensure that the Company’s employees have access to basic healthcare and income protection for themselves and their family members.
Employment Agreements
Employment Agreements The Company has not entered into any employment agreements with its executive officers.
Summary Compensation Table
Summary Compensation Table The following table sets forth information with respect to compensation earned by the Company’s named executive officers for the years ended December 31, 2023 and 2022:
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards (1) ($) | Total ($) | | Michael Ferrantino (2) | 2023 | 225,000 | — | — | 225,000 | | Chief Executive Officer | 2022 | 225,000 | — | —(3) | 225,000 | | James Tivy (2) (4) | 2023 | 200,000 | — | — | 200,000 | | Chief Financial Officer | 2022 | 158,923 | 25,000 | 313,800(5) | 497,723 | | William Drafts | 2023 | 197,323 | 50,000 | 101,700(6) | 349,023 | | President and former President and CEO | 2022 | 185,262 | 30,000 | 20,463(7) | 235,725 | | Linda Biles (10) | 2023 | 143,374 | 50,000 | 101,700(8) | 295,074 | | Vice President, Controller | 2022 | 134,240 | 27,000 | —(9) | 161,240 |
Summary Compensation Table
| (1) Reflects the aggregate grant date fair value of stock awards or option awards granted in the applicable year, computed in accordance with Financial Accounting Standards Board ("FASB")Accounting Standards Codification ("ASC") Topic 718, Stock-Based Compensation ("ASC 718"). |
Summary Compensation Table
| (2) Amounts shown for 2022 include amounts paid to the respective individual for services rendered to LGL Group prior to the October 7, 2022 Separation. |
Summary Compensation Table
| (3) On December 28, 2021, Mr. Ferrantino was awarded 45,000 restricted shares of LGL common stock with a grant date fair value of $532,800. On October 7, 2022, 15,000 of these unvested shares of LGL common stock were canceled and MtronPTI issued 14,371 restricted shares of MtronPTI common stock as a replacement grant, with the same terms as Mr. Ferrantino’s original LGL grant, resulting in no additional compensation cost being recorded. |
Summary Compensation Table
| (4) Effective April 16, 2024, Mr. Tivy resigned as Chief Financial Officer. |
Summary Compensation Table
| (5) On April 30, 2022, Mr. Tivy was awarded 30,000 restricted shares of LGL common stock with a grant date fair value of $313,800. On October 7, 2022, these unvested shares of LGL common stock were canceled and MtronPTI issued 28,741 restricted shares of MtronPTI common stock as a replacement grant, with the same terms as Mr. Tivy’s original LGL grant, resulting in no additional compensation cost being recorded. |
Summary Compensation Table
| (6) On August 9, 2023, Mr. Drafts was awarded 9,000 restricted shares of MtonPTI common stock with a grant date fair value of $11.30. |
Summary Compensation Table
| (7) On October 7, 2022, options to purchase 10,000 shares of LGL common stock were canceled, with MtronPTI awarding options to purchase 9,710 shares of MtronPTI common stock at $13.10 per share as a replacement grant, with the same vesting terms as Mr. Drafts' original LGL grant, vesting on November 7, 2022 with an expiration date of November 7, 2024. The replacement grant resulted in an incremental $20,463 of additional compensation expense being recorded. |
Summary Compensation Table
| (8) On August 9, 2023, Ms. Biles was awarded 9,000 restricted shares of MtronPTI common stock with a grant date fair value of $11.30. |
Summary Compensation Table
| (9) On October 7, 2022, 7,533 unvested shares of LGL common stock were canceled, with MtronPTI issuing 7,217 restricted shares of MtronPTI common stock as a replacement grant, with the same terms as Ms. Biles’s original LGL grant, resulting in no additional compensation cost being recorded. |
Summary Compensation Table
| (10) Effective April 16, 2024, Ms. Biles was appointed Executive Vice President - Finance and principal financial officer. |
Outstanding Equity Awards at Year-End
Outstanding Equity Awards at Year-End The following table sets forth the information with respect to outstanding equity awards held by our named executive officers as of December 31, 2023.
Outstanding Equity Awards at Year-End
| | Option Awards | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | 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 ($) (4) | | William Drafts (1) | 9,710 | — | $13.10 | 11/7/2024 | 9,000 | $321,300 | | James Tivy (2) | — | — | — | — | 19,161 | $684,048 | | Linda Biles (3) | — | — | — | — | 9,000 | $321,300 |
Outstanding Equity Awards at Year-End
| (1) On October 7, 2022, MtronPTI awarded options to purchase 9,710 shares of MtronPTI common stock at $13.10 per share as a replacement grant, with the same vesting and expiration dates as Mr. Drafts’ original LGL grant, which vested on November 7, 2022 with an expiration date of November 7, 2024. On August 9, 2023, MtronPTI issued 9,000 restricted shares of MtronPTI common stock, which vest over three years, 30% in year one and two, and the remaining 40% in year three. |
Outstanding Equity Awards at Year-End
| (2) On October 7, 2022, MtronPTI issued 28,741 restricted shares of MtronPTI common stock as a replacement grant, with the same terms as Mr. Tivy’s original LGL grant. These shares vest pro-rata over three years, vesting one-third on April 30 of each year. Effective April 16, 2024, Mr. Tivy resigned as Chief Financial Officer. |
Outstanding Equity Awards at Year-End
| (3) On August 9, 2023, MtronPTI issued 9,000 restricted shares of MtronPTI common stock, which vest over three years, 30% in year one and two, and the remaining 40% in year three. Effective April 16, 2024, Ms. Biles was appointed Executive Vice President - Finance and principal financial officer. |
Outstanding Equity Awards at Year-End
| (4) Market value is based on the closing price of our common stock on the NYSE American on December 29, 2023, the last trading day of 2023, of $35.70 per share. |
Non-Employee Director Compensation
Non-Employee Director Compensation The following table sets forth information with respect to compensation earned by or awarded to each non-employee director who served on the Board during the fiscal year ended December 31, 2023:
Non-Employee Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | Total ($) | | Bel Lazar | 52,337 | 15,002 | 67,339 | | Marc Gabelli | 93,087 | 15,002 | 108,089 | | Robert LaPenta | 28,087 | 15,002 | 43,089 | | John Mega | 26,587 | 15,002 | 41,589 | | Hendi Susanto | 20,837 | 15,002 | 35,839 | | David Goldman | 20,837 | 15,002 | 35,839 | | Ivan Arteaga | 19,098 | 15,002 | 34,100 |
Non-Employee Director Compensation
| (1) These shares were granted under the 2022 Incentive Plan. |
Non-Employee Director Compensation
Non-employee directors receive the following in addition to the $15,000 in equity awards granted as part of their base compensation: (i) their annual base cash compensation of $10,000; (ii) $2,000 for each meeting of the Board attended in person and $750 for attendance at each meeting held telephonically and (iii) the Audit Committee Chairman receives a $2,000 annual cash retainer, and the Nominating Committee Chairman and Compensation Committee Chairman each receives a $1,000 annual cash retainer. Prior to the appointment of the Advisor to the Chairman of the Board on September 20, 2023, the Chairman of the Board received an annual cash retainer of $100,000. Subsequent to the appointment of the Advisor to the Chairman of the Board, the Chairman of the Board and the Advisor to the Chairman of the Board split equally the annual cash retainer of $100,000.