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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-KT/A

(Amendment No. 1)

 

 

 

[  ]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended ______________

 

 

OR

[X]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from April 1, 2016  to December 31, 2016

 

Commission file number 1-10869

 

UQM TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Colorado

84-0579156

(State or other jurisdiction

(I.R.S. Employer

of incorporation or organization)

Identification No.)

 

 

 

 

4120 Specialty Place, Longmont, Colorado

80504

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code:  (303) 682-4900

 

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

 

 

 

Title of each class

Name of each exchange on which registered

Common Stock

NYSE MKT

 

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

 

None.

 

 

 

 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. 

Yes  [  ]   No  [X]

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes  [  ]   No  [X]

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]   No  [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every interactive data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such 

shorter period that the registrant was required to submit and post such files).

Yes  [X]  No  [  ]

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

Large accelerated filer

[  ]                                      

Accelerated filer

[  ]                                      

Non-accelerated filer

[  ] (Do not check if a smaller reporting company)                                     

Smaller reporting company

[X]                

 

 

Emerging growth company

[  ]                                      

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes  [  ]   No  [X]

 

 

The aggregate market value of the registrant’s common stock (“Common Stock”) held by non-affiliates as of September 30, 2016, based on the closing price of the Common Stock as reported by the NYSE MKT on such date was approximately $30,081,573. As of April 25, 2017, there were 48,581,954 shares of the registrant’s Common Stock outstanding.

 

 

 

			 		

 

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Explanatory Statement:

 

UQM Technologies, Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-KT/A to amend our Transition Report on Form 10-KT for the nine months ended December 31, 2016 (transition period), initially filed with the U.S. Securities and Exchange Commission on March 30,  2017 (“Original Form 10-KT”). This Form 10-KT/A includes information required by Part III of Form 10-KT (Items 10, 11, 12, 13, and 14). Our Original Form 10-KT stated that information required by these Items would be incorporated by reference to the Company’s definitive proxy statement for the 2017 Annual Meeting of Shareholders, which was to be filed with the Securities and Exchange Commission on or before May 1, 2017.  

 

This Form 10-KT/A only amends and restates Items 10, 11, 12, 13, and 14 of Part III of the Original Form 10-KT. No other items in the Original Form 10-KT are amended hereby. This amendment does not change any previously reported financial results, modify or update disclosures in the original filing, or reflect events occurring after the date of the original filing other than compensation decisions and award grants made following the end of the reported period. Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), new certifications of our principal executive officer and principal financial officer are being filed as exhibits (Item 15) to this Amendment No. 1 on Form 10-KT/A. 

 

 

			 		

			 		

 

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Table of Contents

 

 

 

 

Page

Item 10. Directors, Executive Officers and Corporate Governance 1				
 

 

Item 11. Executive Compensation 5				
 

 

Item 12. Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder Matters 15				
 

 

Item 13. Certain Relationships and Related Transactions, and Director Independence 16				
 

 

Item 14. Principal Accountant Fees and Services 17				
 

 

Item 15. Exhibits and Financial Statement Schedules 18				
 

 

 

			 		

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PART III 

 

Item 10.   Directors, Executive Officers and Corporate Governance 

 

DIRECTORS

 

Pursuant to the bylaws of the Company, the Board (the “Board”) or shareholders set the number of directors.  The Board currently consists of five members. The Board is not classified, and each director serves for a term of one year and thereafter until his successor is duly elected and qualified.  Below is a list of our directors, their ages, committee assignments and business experience.

 

Name

    

Age

    

Position with the Company

    

Officer orDirectorSince

    

Business Experience

 

 

 

 

 

 

 

 

 

 

 

Donald W. 

Vanlandingham

 

77 

 

Chairman of the Board, Member of the Compensation Committee and Member of the Governance and Nominating Committee

 

2003 

 

Retired since 2003. Chairman of the board of directors of Ball Aerospace and Technologies Corporation, a wholly-owned subsidiary of Ball Corporation from 2002 to 2003; President and Chief Executive Officer of Ball Aerospace and Technologies Corporation from 1996 to 2002.

 

 

 

 

 

 

 

 

 

 

 

Joseph R. Mitchell

 

 

56 

 

President and Chief Executive Officer

 

2012 

 

President and CEO of UQM since January 2016. Interim President, CEO, and Chief Operating Officer (COO) of UQM from July 2015 to January 2016.  Senior VP of Operations of UQM from June 2012 to July 2015. Director of Quality, North America for A123 Systems, Inc. from March to May 2012. Director of Operations and Quality – North American Hybrid Electric Drives for Continental Automotive from 2008 to February 2012. 

 

 

 

 

 

 

 

 

 

 

 

Stephen J. Roy

 

67 

 

Director, Chairman of the Audit Committee and Member of the Compensation Committee

 

2000 

 

Principal, STL Capital Partners, LLC since 2002.  Managing Director - Investment Banking for A. G. Edwards & Sons, Inc. from 1989 through 2002.

 

 

 

 

 

 

 

 

 

 

 

Joseph P. Sellinger

 

71 

 

Director, Chairman of the Compensation Committee, and Member of the Audit Committee and Member of the  Governance and Nominating Committee

 

2008 

 

Retired since 2006. Vice President, Anheuser Busch Companies and Chairman, President and Chief Executive Officer of the Anheuser Busch Packaging Group from 2000 to 2006.

 

 

 

 

 

 

 

 

 

 

 

John E. Sztykiel

 

60 

 

Director, Chairman of the Governance and Nominating Committee and Member of the Audit Committee

 

2012 

 

President, Chief Executive Officer and Director, Spartan Motors, Inc. from 2002 to February 2015.

 

 

We have provided below information about each director’s specific experience, qualifications, attributes or skills that led our Board to conclude, in light of our business and corporate strategy, that such individual should serve as a director of the Company at the time of their election in November 2016.  

 

Mr. Vanlandingham, our Chairman, has been an independent director of the Company for 14 years.  He brings many years of leadership and management experience as Chairman and Chief Executive Officer of a major technology and manufacturing company to his role on the Board.  With experience in overseeing development of technology and complex equipment with attention to development schedules, production, quality, business development and budgets, he brings valuable insight to the Board as it oversees the Company’s operations and strategy.

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Mr. Mitchell is our President and Chief Executive Officer.  Mr. Mitchell has over 26 years of experience in the automotive sector with particular focus in operations and quality, and over 16 years of experience in hybrid electric automotive applications.  Mr. Mitchell brings operational and management experience specific to UQM’s business and is a recognized leader in the electric propulsion industry.

 

Mr. Roy has been an independent director of the Company for over 17 years.  With over 30 years of investment banking experience and over ten years’ experience as a principal and co-founder of a private equity business, Mr. Roy brings valuable insight to the Company in finance and accounting, capital markets, business analysis and strategy.  Mr. Roy has the financial background and skills to serve as an “audit committee financial expert.”

 

Mr. Sellinger has been an independent director of the Company since 2008.  He brings extensive senior management experience with a major manufacturing company to his role on the Board.  From his experience running a high volume manufacturing business with annual sales in excess of $1 billion, he provides valuable insight to the Board on operations, planning and implementation of strategy, risk management and other issues as the Company launches volume production of its products.

 

Mr. Sztykiel has been an independent director of the Company since 2012.  Mr. Sztykiel was the Chief Executive Officer of a manufacturer of trucks and truck components for 12 years.  In this capacity, Mr. Sztykiel has extensive senior management and marketing experience in the North American truck market. Mr. Sztykiel’s extensive management experience in a manufacturing company servicing the truck market provides valuable insight to the Board on strategy, marketing and manufacturing of the Company’s products.

 

No family relationship exists between any director, executive officer, significant employee or person nominated or chosen by the Company to become a director or executive officer.  There are no arrangements or understandings between any director and any other person pursuant to which any director was nominated as a director. 

 

During the nine months ended December 31, 2016 (transition period), the Board held twelve meetings. Each incumbent director attended or participated in more than 80 percent of the meetings of the Board and Board committees on which he served during the period he was a director.  Participation at meetings was sometimes by telephone, which is authorized under Colorado law.  The Company encourages directors to attend the Annual Meeting of Shareholders each year.  At the 2016 Annual Meeting of Shareholders held November 22, 2016, all members of the Board attended.  The independent directors serving on the Board periodically meet as a group without management present.  None of the directors listed above have been involved during the last ten years in any legal proceedings that are material to an evaluation of the ability or integrity of that person to serve as a director of the Company.

 

Code of Ethics 

 

The Company has adopted a Code of Business Conduct Ethics that applies to all directors, officers, employees, consultants, representatives and agents. The Code of Business Conduct Ethics is available on our website at www.uqm.com “Investors – Corporate Governance.”  If the Company makes any substantive amendments to the Code of Business Conduct Ethics or grants any waiver from a provision of the code to any executive officer or director, the Company will promptly disclose the nature of the amendment or waiver on its website. 

 

Committees of the Board

 

Our Board has three standing committees - Audit, Compensation, and Governance and Nominating.  Each of the Audit, Compensation and Governance and Nominating committees is comprised entirely of independent directors and is led by a committee chair.  All of our independent directors are encouraged to, and do, actively participate in the development of the Company’s business strategy in collaboration with the Chief Executive Officer and in the general oversight of the Company’s operations and financial affairs. 

 

Mr. Roy serves as the committee chair of the Audit Committee. In this role, he exercises substantial influence and judgment over the Company’s financial affairs and financial reporting. The Audit Committee has a written charter adopted by the 

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Board that specifies its duties including assisting the Board in its general oversight of the Company’s financial reporting, internal controls and audit functions, and its direct responsibility for the appointment, retention, compensation and oversight of the independent auditors.  A copy of the Company’s Audit Committee charter is available on our website at www.uqm.com “Investors – Corporate Governance”.  The Audit Committee consists of three directors, Messrs. Roy, Sellinger and Sztykiel and met three times during the nine months ending December 31, 2016 (transition period).  All members of the Audit Committee are independent directors as defined in applicable rules of the NYSE MKT and the Securities and Exchange Commission (“SEC”).  The Board has determined that Mr. Roy meets the qualifications of an “audit committee financial expert” in accordance with SEC rules.     

 

Mr. Sztykiel serves as the committee chair of the Governance and Nominating Committee. In this role, he exercises substantial influence and judgment over the Company’s governance policies and the identification and evaluation of candidates for our Board.  The Governance and Nominating Committee considers such matters as whether the size and composition of the Board is appropriate in the context of the Company’s business operations, monitors and addresses issues related to corporate governance and suggests changes when it deems appropriate and oversees the annual assessment of Board performance.  The Governance and Nominating Committee has a written charter specifying its responsibilities.  See also “Selecting Nominees for Director” above. The Governance and Nominating Committee consists of three directors, Messrs. Sellinger, Sztykiel and Vanlandingham and met one time during the nine months ending December 31, 2016 (transition period).  All members of the Governance and Nominating Committee are independent directors as defined in applicable rules of the NYSE MKT and the SEC. 

 

Mr. Sellinger serves as the committee chair of the Compensation Committee.  In this role, he exercises substantial influence and judgment over the Company’s compensation practices, particularly as it relates to the structure and competitiveness of the Company’s executive compensation.  The Compensation Committee reviews the performance and compensation of the Company’s Chief Executive Officer and administers the 2012 Equity Incentive Plan, Employee Stock Purchase Plan, Non-Employee Director Stock Option Plan and Stock Bonus Plan.  The Compensation Committee consists of three directors, Messrs. Roy, Sellinger and Vanlandingham, and met four times during the nine months ending December 31, 2016 (transition period).  All members of the Compensation Committee are independent directors as defined in applicable rules of the NYSE MKT and the SEC.  The Compensation Committee has a written charter specifying its responsibilities which is available on our website at www.uqm.com “Investors – Corporate Governance.” 

 

Compensation Committee Interlocks and Insider Participation

 

Messrs. Roy, Sellinger and Vanlandingham were members of the Compensation Committee during the nine months ending December 31, 2016 (transition period). All members of the Compensation Committee were independent directors, and no member was an employee or former employee of the Company. During the nine months ending December 31, 2016 (transition period), none of the Company’s executive officers served on the compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on the Board or the Compensation Committee.

 

MANAGEMENT

 

The executive officers of the Company are:

 

 

 

 

 

 

Name

    

Age

    

Position

 

 

 

 

 

Joseph R. Mitchell 

 

56 

 

President and Chief Executive Officer

 

 

 

 

 

David I. Rosenthal

 

62 

 

Treasurer, Secretary and Chief Financial Officer

 

 

 

 

 

Adrian P. Schaffer

 

54 

 

Vice President of Sales and Business Development

 

 

 

 

 

Josh M. Ley

 

42 

 

Vice President of Engineering

 

On January 5, 2016, Joseph R. Mitchell was appointed our President and Chief Executive Officer in conjunction with already being appointed Chief Operating Officer on July 20, 2015.  Mr. Mitchell served as our interim President and Chief 

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Executive Officer from July 20, 2015 until January 5, 2016.  Mr. Mitchell joined the Company on June 1, 2012 and served as Senior Vice President of Operations.  From March 2012 until joining the Company, Mr. Mitchell was Director of Quality, North America, for A123 Systems, Inc. Mr. Mitchell served as Director, Operations and Quality - North American Hybrid Electric Drives for Continental Automotive from January 2008 through March 2012. From January 2007 through January 2008, Mr. Mitchell served as Director of Operations and Hybrid Drive Segment Manager for Siemens VDO. Prior to that, Mr. Mitchell held a series of manufacturing and quality positions at Ballard Power Systems and Ford Motor Company.

 

David I. Rosenthal joined the Company as Treasurer, Secretary and Chief Financial Officer on May 1, 2013.  From March 2011 until joining the Company, Mr. Rosenthal was a Financial Consultant for start-up and turnaround companies. From February 2010 until February 2011, Mr. Rosenthal was Interim President and Chief Executive Officer of Cyanotech Corporation, a publicly-traded manufacturer of nutritional supplement products.  Mr. Rosenthal served as a director of Cyanotech from August 2000 until September 2011.  From May 2008 until March 2009, Mr. Rosenthal served as Chief Financial Officer for Hickory Farms and from June 2007 until November 2007 served as Chief Financial Officer of Sanz, Inc., both portfolio companies of the private equity firm Sun Capital Partners.

 

Adrian P. Schaffer joined the Company on December 1, 2011 as Vice President of Sales and Business Development.  From February 2006 until joining the Company, Mr. Schaffer served as Vice President of Sales for the Industrial, Commercial and Energy Group of Linamar Corporation, a leading supplier to the global vehicle and mobile industrial markets. Mr. Schaffer also spent thirteen years with Motorola Corporation where he held positions in sales, business development and account management in Motorola’s Telematics, Powertrain, Autobody and Heavy Vehicle Electronics Groups, including most recently as Director of Global Marketing for the global automotive group.

 

Josh M. Ley joined the Company in January 1994 and was appointed Vice President of Engineering on March 4, 2015.  Mr. Ley previously served as Motor Design Engineer and Manager of Motor Design Engineering for the Company.  

 

There are no arrangements or understandings between any executive officer and any other person pursuant to which any executive officer was selected as an executive officer.  None of the executive officers listed above have been involved during the last ten years in any legal proceedings that are material to an evaluation of the ability of that person to serve as an executive officer of the Company.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Under Section 16(a) of the Exchange Act, the Company’s directors, its executive (and certain other) officers, and any persons holding more than ten percent of the Company’s common stock are required to report their ownership of the Company’s common stock and any changes in that ownership to the SEC.  The Company is required to report in this statement any failure to file timely reports with the SEC  during the nine months ending December 31, 2016 (transition period).  Based solely on its review of Form 3, Form 4 and Form 5 filings, the Company believes that the following required Section 16(a) reports were not filed timely during the nine months ending December 31, 2016 (transition period).

 

 

 

 

 

Name

# of Late Forms

# of Transactions Reported Late

Failure to File a Required Form

Joseph R. Mitchell

1

1

-

David I. Rosenthal

2

2

-

Adrian P. Schaffer

2

2

-

Donald W. Vanlandingham

1

1

-

Stephen J. Roy

1

1

-

Joseph P. Sellinger

1

1

-

John E. Sztykiel

1

1

-

 

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Item 11.   Executive Compensation 

 

COMPENSATION DISCUSSION AND ANALYSIS

 

Compensation Philosophy and Objectives

 

Our executive compensation program is designed to attract, motivate and retain highly qualified executives, while providing performance-based incentives for the attainment of strategic business objectives, rewarding superior performance and aligning the interests of our executives with those of our shareholders.

 

Our management compensation program has three primary components:

 

 

 

Base pay

Provides an annual salary level consistent with market conditions, the individuals’ position, responsibility and contributions.

 

 

Bonus 

Provides variable cash compensation based on the achievement of Company, organizational and individual performance objectives.

 

 

Long-term equity-based Incentive pay

Aligns a portion of each executive’s annual compensation to the long-term success of the Company and encourages an ownership mindset that aligns the interests of management with those of the Company’s other shareholders.

 

The minimum base pay component of executive compensation is specified in employment agreements with our executive officers.  Bonus payments are performance-based payments that are payable annually in cash. Long-term equity-based incentive awards consist of shares of the Company’s common stock, stock options to acquire shares of the Company’s common stock or a combination of both.  

 

Bonus payments and long-term incentive grants are determined by the Compensation Committee based principally on objective criteria consisting of each executive officer’s achievement of personal and Company-wide goals.  Payments of bonus awards each fiscal year are based on a retrospective review of the prior fiscal year’s performance.  The amount of the cash bonus payment and long-term incentive grant for each executive is determined based on the Compensation Committee’s deliberations regarding attainment of individual and Company-wide goals by Company executives.  The Compensation Committee’s determination of the degree of attainment of these goals by each executive was subjective and based on its deliberations.  The Compensation Committee also annually reviews the base pay of our executive offices and may increase (but not decrease) the amount of base pay as specified in the respective employment agreement with each executive.

 

The Compensation Committee is composed of three members of our Board, each of which is independent as defined in applicable rules of the NYSE MKT and the SEC.  The Compensation Committee does not delegate its authority to establish executive compensation to any other persons.  The Compensation Committee approved the total compensation (and each of the individual elements of compensation) for Joseph R. Mitchell, President and Chief Executive Officer.  The Committee also approved the compensation of the other named executive officers with input from the Chief Executive Officer.  

 

In the twelve months ended March 31, 2015, the Compensation Committee engaged Pay Governance LLC to provide consulting services on executive compensation, pay scales and alternative executive compensation plans.  The Compensation Committee anticipates that it may engage a compensation consultant at an interval of every three to five years to assist it in evaluating the competitiveness of its executive compensation program.    

 

The Compensation Committee has also reviewed compensation data from a peer group of alternative energy companies that it believed to be in competition with the Company in the marketplace for executive talent.  While the Compensation Committee does not set benchmark percentile targets for executive compensation, the compensation levels for the three primary elements of executive compensation are generally set to establish pay levels that are competitive with those of the identified peer group of companies.

 

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The Compensation Committee has reviewed all compensation policies and practices for executive officers and employees to determine if there is risk arising from such policies and practices that could reasonably have a material adverse effect on the Company. The Compensation Committee reviews all aspects of performance in determining bonus awards and there are no specific threshold targets that increase bonuses.  In addition, the Company’s maximum bonus award in any year is limited to two times the target bonus, and the Company has to date never exceeded a bonus payout of more than 100% of the target.  Further, bonuses awarded may be recouped pursuant to our clawback policy.  Therefore, the Committee believes there is a low risk for any material adverse effect on the Company arising from compensation policies and practices. 

 

We have entered into employment agreements with our executive officers that contain retention and severance payment provisions, including change in control severance payments, and provide a modest program of executive perquisites and personal benefits as are further described in the section “Employment Agreements” below.  The purpose of the employment agreements is to provide financial security for the executive, to aid in retention and to encourage loyalty to and long-term employment with the Company.  

 

2016 Say-on-Pay Advisory Vote

 

At our 2016 Annual Meeting of the Company’s shareholders, 76% of the Company’s voting shareholders approved, on an advisory basis, the compensation of our named executive officers.  Our Compensation Committee considered the results of the advisory vote on executive compensation.

 

Adoption of Compensation Clawback Policy

 

In July 2015, our Board adopted the UQM Technologies, Inc. Clawback Policy.  This clawback policy allows us to recoup executive incentive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws.   The clawback policy applies to all forms of incentive compensation previously granted to executive officers, including stock options, cash bonuses, and restricted stock, that were granted during the three years prior to any accounting restatement. The amount to be recovered will be the excess of the executive compensation paid to the named executive officer based on the erroneous data over the executive compensation that would have been paid to the named executive officer had it been based on the restated results, as determined by the Compensation Committee.

 

Elements of Compensation

 

Base Salary.  Base salaries for our executives are established based on the scope of their responsibilities, taking into account competitive market compensation for similar positions in the peer group of companies, as well as the experience and performance of the individual, our ability to replace the individual and other primarily judgmental factors deemed relevant by the Compensation Committee.  Base salaries are reviewed annually by the Compensation Committee and the Board and may be increased, but not decreased without the consent of the executive, by the Board from time to time coincident with our annual review.  

 

During the nine months ending December 31, 2016 (transition period), the Compensation Committee increased annual base salary for each executive by approximately 2.0%. These increases consisted of cost of living and merit based adjustments.    

 

Cash Bonus Compensation. The Compensation Committee annually considers the award of performance-based cash bonuses to compensate executives for achieving financial, operational and strategic goals and for individual performance.  The amount of cash bonuses, if any, is established during deliberations by the Compensation Committee using its judgment after considering the objective and subjective factors discussed above and the individual’s performance. As a result, bonuses may vary greatly from one year to the next.

 

The Compensation Committee has established target cash bonus levels as a percentage of base salary for each executive officer based on the level of responsibility for each executive position and by reference to the level of target cash bonus 

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payments by the peer group of companies. The target cash bonus levels for each of the Company’s executive officers as a percentage of each officer’s base salary is as follows:

 

 

 

 

 

Name of Executive Officer

    

Target BonusPercentage

 

Joseph R. Mitchell

 

75 

%  

David I. Rosenthal

 

40 

%  

Adrian P. Schaffer

 

30 

%  

 

Actual cash bonus payments may either exceed or be less than the target level based on the Compensation Committee’s judgment as to whether individual and Company-wide goals were met, exceeded or partially-met, subject to a maximum bonus award in any year of two times the target bonus.

 

For the nine months ending December 31, 2016 (transition period), cash bonuses paid to executive officers as a percentage of their base salary, were as follows:

 

 

 

 

 

Name of Executive Officer

    

Bonus PercentagePaid

 

Joseph R. Mitchell

 

42.75 

%  

David I. Rosenthal

 

22.80 

%  

Adrian P. Schaffer

 

17.10 

%  

 

 

The principal Company-wide goals for the nine months ending December 31, 2016 (transition period) used by the Compensation Committee for purposes of determining bonus payments included solidifying the Company’s base revenue, maintaining and improving gross margins, securing a long-term strategic partner, controlling the rate of cash outflows with cost management and efficiencies, product innovation and product quality.  The Compensation Committee does not plan to make bonus determinations against these goals until May 2017. 

 

When the Company entered into new employment agreements with its named executive officers in July 2015, it agreed to provide retention bonuses to its named executive officers to incent them to remain employees of the Company while it explored strategic alternatives.  If the executive remains an employee of the Company continuously through June 30, 2017, he will be paid a cash bonus after that date in the amount specified in his respective employment agreement.

 

Long-Term Incentive Compensation.  The Compensation Committee annually considers the award of long-term incentive compensation to compensate executive officers for their efforts in positioning the Company for long-term growth. The Compensation Committee considers a number of qualitative factors in setting the long-term incentive compensation for each executive officer, including the specific goals listed above as well as each executive officer’s contribution to a variety of  other Company-wide goals such as new customer and market development activities, supply chain optimization and improvement, technology base enhancements, new product development and launch activities, enhanced investor relations and implementation of certain extraordinary transactions, among other things.  

 

Long-term incentive compensation may be paid in the form of Company common stock or in the form of a grant of stock options or any combination of stock and stock options.  The Committee believes that equity-based compensation awards aid in the retention of the executive and serve to align the interests of the executive with those of the Company’s other shareholders. Equity-based compensation awards have a future service requirement (vesting period) of three years.

 

Qualitative criteria are generally used to establish goals and objectives that the Board believes add value to the Company and enhance its prospects for long-term growth and success.  The Compensation Committee has established target levels for long-term incentive compensation for each executive officer based on the level of responsibility for each executive 

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position and the peer group of companies. The target long-term incentive compensation level (as a percentage of each officer’s base salary) for each of the Company’s executive officers is as follows:

 

 

 

 

 

Name of Executive Officer

    

Target Long-Term Incentive Compensation 

 

Joseph R. Mitchell

 

100 

%  

David I. Rosenthal

 

65 

%  

Adrian P. Schaffer

 

50 

%  

 

The Compensation Committee reviewed performance for the twelve months ended March 31, 2016 in July 2016 and determined to award long-term incentive compensation to the executive officers at 57% of the target level.  The fair value of long-term incentive compensation awards granted to executive officers in July 2016 for their performance, as a percentage of their base salary, were as follows:

 

 

 

 

 

 

 

 

 

Name of Executive Officer

    

Actual Long-TermIncentive CompensationPercentage Awarded

    

StockOptions# of Shares

    

StockShares# of Shares

 

Joseph R. Mitchell

 

57.0 

%  

199,856 

 

 41,493 

 

David I. Rosenthal

 

37.1 

%  

  97,717 

 

 20,287 

 

Adrian P. Schaffer

 

28.5 

%  

  66,746 

 

 13,857 

 

 

The Compensation Committee does not plan to make bonus determinations against the goals for the twelve months ended March 31, 2017 until May 2017.

 

Employment Agreements

 

Each of our executive officers has employment agreements with the Company, as described below.  The agreements provide for compensation in the form of annual base salary, which cannot be decreased during the term of the agreement without the consent of the executive, a monthly automobile allowance, the opportunity for cash bonuses, stock awards and stock options and employee benefits available to other Company employees.  The agreements also provide for potential payments upon termination without cause, termination upon a change in control, disability or death.  See “Employment Agreements” below.

 

Tax and Accounting Considerations

 

All elements of our employee and executive compensation program generate charges to earnings under generally accepted accounting principles in the United States.  Our allocations of the elements of total compensation are generally not influenced by the accounting treatment of each element.  We do, however, consider the tax treatment of compensation elements as one factor in the allocation of each element. 

 

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Executive Compensation 

 

The following tables and narrative discuss the compensation of our Chief Executive Officer, Chief Financial Officer and other highly compensated officers determined under the SEC rules for compensation earned or paid in nine months ended December 31, 2016 (transition period) and twelve months ended on March 31, 2016.  These persons are referred to as our named executive officers.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Compensation Table 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name and      

 

 

 

 

 

 

 

 

 

 

All other

 

 

Principal     

Period

 

 

 

 

 

Stock

Option

compen-

 

 

  Position       

ended (2)

 

Salary

Bonus (3)

awards (4)

awards(4)

sation (5)

Total

 

 

 

 

($)

($)

($)

($)

($)

($)

Joseph R. Mitchell

Dec-16

 

251,625

 

-

 

-

 

-

 

14,663

 

266,288

 

President and Chief

Mar-16

 

265,280

 

141,000

 

21,576

 

103,925

 

19,576

 

551,357

 

Executive Officer (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David I. Rosenthal

Dec-16

 

189,269

 

-

 

-

 

-

 

11,913

 

201,181

 

Treasurer, Secretary

Mar-16

 

247,326

 

57,000

 

10,549

 

50,813

 

15,011

 

380,699

 

And Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adrian P. Schaffer

Dec-16

 

168,065

 

-

 

-

 

-

 

32,588

 

200,653

 

Vice President of Sales

Mar-16

 

219,618

 

37,800

 

7,206

 

34,708

 

14,204

 

313,536

 

and Business Development

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1)
Mr. Mitchell was appointed President and Chief Executive Officer on January 5, 2016. Prior to that, Mr. Mitchell was appointed interim Chief Executive Officer on July 20, 2015 and Chief Operating Officer.
 

 (2)
UQM Technologies, Inc. changed its year-end date from March 31 to December 31 in 2016.  The amounts reflected for March 2016 are for a twelve month period.  The amounts reflected for December 2016 are for a nine month transition period.
 

 (3)
The Compensation Committee does not plan to make bonus determinations for the twelve months ended March 31, 2017 performance until May 2017.  Bonus payments listed for the twelve months ended March 31, 2016 represent payments made in July 2016 with respect to performance in the twelve months ended March 31, 2016.
 

 (4)
The amounts reported in the stock and option awards’ columns represent the aggregate grant date fair value computed pursuant to FASB ASC Topic 718 in the Company’s financial statements, not reduced by the estimated forfeiture rate.  The assumptions used in determining the fair value are contained in footnote 10 to the Company’s consolidated financial statements contained in Item 8 of the Company’s Transition Report on Form 10-KT for the nine months ended December 31, 2016 (transition period).
 

 (5)
Amounts reported in the all other compensation column above are comprised of the following items:
 

9

 

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All Other Compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

    

    

    

    

    

    

    

    

Moving,

    

    

 

 

 

 

 

 

 

 

 

 

 

professional

 

 

 

 

 

 

 

401(k) plan

 

 

 

Employer

 

dues,

 

 

 

 

 

Period

 

matching

 

Automobile

 

paid life

 

education

 

 

 

Name

 

 ended (2)

 

contributions

 

allowance

 

insurance(3)

 

& other

 

Total

 

 

 

 

 

($)  

 

($)  

 

($)  

 

($)  

 

($)  

 

 Joseph R. Mitchell(1)

 

Dec-16

 

5,999

 

7,290

 

1,374

 

-

 

14,663

 

 

 

Mar-16

 

7,992

 

9,720

 

1,864

 

-

 

19,576

 

David I. Rosenthal

 

Dec-16

 

3,151

 

7,290

 

1,471

 

-

 

11,913

 

 

 

Mar-16

 

3,294

 

9,720

 

1,997

 

-

 

15,011

 

Adrian P. Schaffer

 

Dec-16

 

2,798

 

7,290

 

1,159

 

21,341

(4)

32,588

 

 

 

Mar-16

 

2,925

 

9,720

 

1,559

 

-

 

14,204

 

 (1)
Mr. Mitchell was appointed President and Chief Executive Officer on January 5, 2016 and served as interim President and Chief Executive Officer from July 20, 2015 until January 5, 2016.
 

 (2)
UQM Technologies, Inc. changed their year-end date from March 31 to December 31 in 2016.  The amounts reflected for March 2016 are for a twelve month period.  The amounts reflected for December 2016 are for a nine month transition period.
 

 (3)
Premiums paid by the Company on Company-owned insurance policies to insure the salary continuation provisions contained in executive employment agreements which provide for the payment of three years annual base salary to the estate of the executive in the event of his death during the term of the employment agreement.
 

 (4)
Includes income tax gross-ups on apartment living expenses of $14,517.
 

Stock Awards

 

We granted stock awards under the Company’s Stock Bonus Plan.  The shares granted vest in three equal annual installments beginning on the first anniversary of the grant date.

 

10

 

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Option Awards

 

We granted option awards under the Company’s 2012 Equity Incentive Plan.  The options granted vest in three equal annual installments beginning on the first anniversary of the grant date.  The options granted were incentive stock options and are exercisable for a term of ten years from the date of grant.  The exercise price of the options is equal to the closing price of our common stock on the NYSE MKT Stock Exchange on the date of grant. 

 

Outstanding Equity Awards at December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Option awards

 

Stock awards

 

 

    

Number

    

Number

    

    

    

    

    

    

    

Market

 

 

 

of securities

 

of securities

 

 

 

 

 

Number

 

value

 

 

 

underlying

 

underlying

 

 

 

 

 

of shares

 

of shares

 

 

 

unexercised

 

unexercised

 

Option

 

Option

 

of stock

 

of stock

 

 

 

options

 

options

 

exercise

 

expiration

 

that have

 

that have

 

Name

 

exercisable

 

unexercisable

 

price

 

date

 

not vested

 

not vested (6)

 

 

 

(#)  

 

(#)  

 

($)  

 

 

 

(#)  

 

($)  

 

Joseph R. Mitchell

 

-

 

199,856

(1)

0.68

 

7/11/2026

 

41,493

(4)

19,087

 

 

 

22,603

 

45,205

(2)

0.66

 

9/23/2025

 

 

 

 

 

 

 

18,185

 

9,093

(3)

1.71

 

8/18/2024

 

4,397

(5)

2,022

 

 

 

24,193

 

-

 

0.89

 

7/11/2022

 

 

 

 

 

 

 

25,000

 

-

 

1.03

 

5/31/2017

 

 

 

 

 

David I. Rosenthal

 

-

 

97,717

(1)

0.68

 

7/11/2026

 

20,287

(4)

9,332

 

 

 

28,612

 

57,224

(2)

0.66

 

9/23/2025

 

 

 

 

 

 

 

27,101

 

13,550

(3)

1.71

 

8/18/2024

 

6,552

(5)

3,014

 

 

 

14,000

 

-

 

0.69

 

4/30/2018

 

 

 

 

 

Adrian P. Schaffer

 

-

 

66,746

(1)

0.68

 

7/11/2026

 

13,857

(4)

6,374

 

 

 

19,543

 

39,087

(2)

0.66

 

9/23/2025

 

 

 

 

 

 

 

18,451

 

9,226

(3)

1.71

 

8/18/2024

 

4,460

(5)

2,052

 

 

 

71,854

 

-

 

0.89

 

7/11/2022

 

 

 

 

 

 (1)

These unexercisable options were granted on July 12, 2016. One-third of the options will vest over the next three years starting on July 12, 2017.

 (2)

These unexercisable options were granted on September 24, 2015. One-third of the options have vested, an additional one-third of the options are scheduled to vest on September 24, 2017.

 (3)

These unexercisable options were granted on August 19, 2014. Two-thirds of the options have vested, an additional one-third of the options are scheduled to vest on August 19, 2017.

 (4)

The restricted shares were granted on July 12, 2016. One-third of the shares will vest over the next three years starting on July 12, 2017.

 (5)

These restricted shares were granted on August 19, 2014. Two-thirds of the shares have vested, an additional one-third of the share are to vest on August 19, 2017.

 (6)

The market value has been determined based on the closing price of Company common stock on December 30, 2016 (transition period) of $0.46 per share.

11

 

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EMPLOYMENT AGREEMENTS 

 

We have employment agreements with each of our named executive officers as described below.  

 

Current Named Executive Officers 

 

On July 20, 2015, the Company entered into employment agreements with Messrs. Mitchell, Rosenthal, and Schaffer, which continue through June 30, 2017. When Mr. Mitchell was appointed our President and Chief Executive Officer on January 5, 2016, we entered into a new employment agreement with Mr. Mitchell and amended the employment agreements with each of Messrs. Rosenthal and Schaffer to revise the non-competition and non-solicitation obligations and the change of control definition to match what was contained in Mr. Mitchell’s employment agreement.  The agreements for these officers contain certain severance provisions, including severance provisions arising from a change in control of the Company. 

 

The agreements also contain a special retention bonus.  If the executive remains an employee of the Company continuously through June 30, 2017, the Company shall pay Mr. Mitchell $100,000, Mr. Rosenthal $100,000 and Mr. Schaffer $75,000. 

 

If the executive’s employment is terminated by the Company without cause, other than upon a change in control event, the executive will be paid a lump sum equal to six months’ base salary (twelve months’ base salary in the case of Mr. Mitchell).   

 

Health and Life Insurance and Other Benefits  

 

The executive employment agreements provide that upon termination without cause, change in control or because of disability, the Company will pay two-thirds of the cost of COBRA premiums for the executive and any covered dependents for a period of six months or, if earlier, until the executive is employed by another employer.  Each executive of the Company also receives a monthly automobile allowance.  

 

All of the employment agreements provide that the Company shall maintain at its expense, life insurance coverage on the executive payable to the executive’s designees in an amount equal to three times the annual salary payable to the executive. 

 

Change in Control 

 

In the event of a change in control, all stock options and bonus stock awards held by executive officers become immediately vested under the terms of the employment agreements.  In addition, upon a termination of the executive officer’s employment (or a material diminution to his responsibilities or other material changes) within twelve months following a change of control, the executive will receive a lump sum equal to one year’s base salary (two years’ base salary in the case of Mr. Mitchell), a cash bonus (equal to two times the average of the annual cash bonus paid for the preceding three fiscal years), and two times his respective retention bonus.    For purposes of the agreements, a change in control generally means any merger, reorganization, sale of substantially all Company assets, liquidation, a change in the composition of the Company’s Board as defined in the employment agreement and any other transaction that the Board determines by resolution to be a corporate transaction. 

 

Other Provisions 

 

The employment agreements have customary confidentiality obligations.  The employment agreements further provide that the executive, for a period of one year after the term of his respective employment agreement, will not become affiliated with any person, firm or corporation whose business is similar to or in competition with the Company and for a period of one year (in the case of Mr. Mitchell) or six months (in the case of the other executives) after termination of the executive’s employment agreement, to not induce or attempt to induce any employee of the Company to leave the employ of the Company; nor will the executive induce or attempt to induce any customer, supplier or licensee to cease doing business with the Company. 

 

12

 

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PAYMENTS AND POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL 

 

Our current executive employment agreements provide compensation to Messrs. Mitchell, Rosenthal and Schaffer in the event of a termination of employment, including termination of employment (or deemed termination) following a change in control.  The tables below show the potential payments or benefits upon a termination or change in control for each of the Company’s executive officers assuming the triggering event took place on December 31, 2016.  The closing price per share of our common stock on the last trading day prior to December 31, 2016 was $0.43.  Actual amounts can only be determined at the date of the triggering event.  The amount of acceleration of unvested equity awards represents the intrinsic value of in-the-money non-vested stock options and non-vested stock awards as of December 31, 2016 that would vest upon termination or change in control.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Termination

 

 

 

Termination

 

 

 

Termination

 

by us

 

 

 

due to a

 

 

 

by us for

 

without

 

Termination

 

change in

 

 

 

cause

 

cause

 

due to death

 

control

 

 

 

($)

 

($)

 

($)

 

($)

 

Joseph R. Mitchell:

 

 

 

 

 

 

 

 

 

Base Salary/Severance

 

-

 

336,600

 

168,300

 

1,003,992

 

Life Insurance Proceeds

 

-

 

-

 

1,009,800

 

-

 

Acceleration of unvested

 

 

 

 

 

 

 

 

 

equity awards

 

-

 

-

 

3,325

 

21,109

 

Total

 

-

 

336,600

 

1,181,425

 

1,025,101

 

 

 

 

 

 

 

 

 

 

 

David I. Rosenthal:

 

 

 

 

 

 

 

 

 

Base Salary/Severance

 

-

 

126,592

 

126,592

 

535,651

 

Life Insurance Proceeds

 

-

 

-

 

759,552

 

-

 

Acceleration of unvested

 

 

 

 

 

 

 

 

 

equity awards

 

-

 

-

 

2,301

 

12,345

 

Total

 

-

 

126,592

 

888,445

 

547,996

 

 

 

 

 

 

 

 

 

 

 

Adrian P. Schaffer:

 

 

 

 

 

 

 

 

 

Base Salary/Severance

 

-

 

112,410

 

112,410

 

428,087

 

Life Insurance Proceeds

 

-

 

-

 

674,460

 

-

 

Acceleration of unvested

 

 

 

 

 

 

 

 

 

equity awards

 

-

 

-

 

1,569

 

8,426

 

Total

 

-

 

112,410

 

788,439

 

436,512

 

 

DIRECTOR COMPENSATION 

 

In 2009, the Compensation Committee retained the consulting firm Towers Watson to assist it in establishing appropriate compensation for the Company’s directors.  Towers Watson evaluated the board compensation practices of the peer group of alternative energy companies listed under “Compensation Philosophy and Objectives” above in twelve months ended March 31, 2011 which the consulting firm selected based on its belief that the listed companies competed with the Company in the marketplace for executive talent.  After considering the recommendations of the compensation consultant, the Board adopted a director compensation policy consisting of an annual cash retainer and equity-based compensation that it believes appropriately aligns the interests of directors with those of the Company’s shareholders.   

 

For the nine months ended December 31, 2016 (transition period), directors of the Company who are not employees may elect to receive an annual retainer of $35,000 in cash or the grant of options with an exercise period of ten years to acquire that number of shares of the Company’s common stock that is equivalent to $35,000 as determined by utilizing the Black-Scholes-Merton option pricing model on the date of grant or a combination of cash and options that together have a fair value of $35,000.  Options granted under the plan vest immediately. In addition, the Chairman of the Board receives an additional annual cash retainer of $9,000 and the Chairman of the Compensation Committee, the Chairman of the Audit 

13

 

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Committee and the Chairman of the Governance and Nominating Committee each receive an additional annual cash retainer of $5,000 each. 

 

Non-employee directors also receive each year shares with a fair value of $14,000 on the date of grant, except for the Chairman of the Board who receives shares with a fair value of $17,000 on the date of grant.  These shares vest immediately.  In addition, each non-employee director receives a stock option for that number of shares of the Company’s common stock that is equivalent to $21,000, or $26,000 in the case of the Chairman of the Board, as determined by utilizing the Black-Scholes-Merton option pricing model on the date of grant.  Options granted under this component of director compensation vest immediately. In nine months ended December 31, 2016 (transition period), the directors received shares equal to 85% of the dollar values noted above. 

 

In addition, each non-employee director upon his initial election to the Board is awarded 2,000 shares of the Company’s common stock at a purchase price of $0.01 per share.  Directors who are employees of the Company are not entitled to additional compensation for their service as directors.  Accordingly, Mr. Mitchell did not receive additional compensation for his service as a director.   

 

The following table sets forth information concerning remuneration paid to non-employee directors of the Company during nine months ended December 31, 2016 (transition period):

 

Non-Employee Director Compensation Nine Months Ended December 31, 2016 (Transition Period)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Fees earned

    

    

    

    

    

    

 

 

 

or paid in

 

Stock

 

Option

 

 

 

Name

 

cash

 

awards (1)

 

awards (1)

 

Total

 

 

 

($)

 

($)

 

($)

 

($)

 

Donald W. Vanlandingham

 
33,000				
 
14,450				
 
14,918				
 
62,368				
 

 

 

 

 

 

 

 

 

 

 

Stephen J. Roy

 
30,000				
 
11,900				
 
12,049				
 
53,949				
 

 

 

 

 

 

 

 

 

 

 

Joseph P. Sellinger

 
30,000				
 
11,900				
 
12,049				
 
53,949				
 

 

 

 

 

 

 

 

 

 

 

John E. Sztykiel

 
30,000				
 
11,900				
 
12,049				
 
53,949				
 

 

The table below shows the aggregate number of shares of common stock granted under the Stock Bonus Plan held by each non-employee director as of December 31, 2016:

 

 

 

 

 

 

    

Number of

 

Name

 

common shares

 

Donald W. Vanlandingham

 

79,960

 

 

 

 

 

Stephen J. Roy

 

74,045

 

 

 

 

 

Joseph P. Sellinger

 

71,688

 

 

 

 

 

John E. Sztykiel

 

47,416

 

 

14

 

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The table below shows the aggregate number of options held by each non-employee director as of December 31, 2016:  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

    

    

Number of

    

Option

 

Option

 

 

 

 

options

 

exercise

 

expiration

 

 

Grant date

 

outstanding

 

price

 

date

 

 

 

 

(#)

 

($)

 

 

Donald W. Vanlandingham

 

7/12/2016

 

27,625

 

0.68

 

7/11/2026

 

 

 

9/24/2015

 

16,250

 

0.66

 

9/23/2025

 

 

 

8/19/2014

 

13,240

 

1.71

 

8/18/2024

 

 

 

8/7/2013

 

14,383

 

1.19

 

8/6/2023

 

 

 

8/3/2011

 

58,095

 

2.04

 

8/2/2018

 

 

 

 

 

129,593

 

 

 

 

 

Stephen J. Roy

 

7/12/2016

 

22,313

 

0.68

 

7/11/2026

 

 

 

9/24/2015

 

13,125

 

0.66

 

9/23/2025

 

 

 

8/19/2014

 

10,694

 

1.71

 

8/18/2024

 

 

 

8/7/2013

 

14,383

 

1.19

 

8/6/2023

 

 

 

8/8/2012

 

51,220

 

0.79

 

8/7/2019

 

 

 

8/13/2010

 

14,789

 

2.63

 

8/12/2018

 

 

 

 

 

126,524

 

 

 

 

 

Joseph P. Sellinger

 

7/12/2016

 

22,313

 

0.68

 

7/11/2026

 

 

 

9/24/2015

 

13,125

 

0.66

 

9/23/2025

 

 

 

8/19/2014

 

10,694

 

1.71

 

8/18/2024

 

 

 

8/7/2013

 

14,383

 

1.19

 

8/6/2023

 

 

 

8/8/2012

 

56,757

 

0.79

 

8/7/2017

 

 

 

8/3/2011

 

17,073

 

2.04

 

8/2/2021

 

 

 

11/3/2009

 

12,111

 

4.73

 

11/2/2019

 

 

 

 

 

146,456

 

 

 

 

 

John E. Sztykiel

 

7/12/2016

 

22,313

 

0.68

 

7/11/2026

 

 

 

9/24/2015

 

13,125

 

0.66

 

9/23/2025

 

 

 

8/19/2014

 

10,694

 

1.71

 

8/18/2024

 

 

 

8/7/2013

 

14,383

 

1.19

 

8/6/2023

 

 

 

11/1/2012

 

36,741

 

0.88

 

10/31/2017

 

 

 

 

 

97,256

 

 

 

 

 

 

The Board determines the total amount of the annual retainer, bonus share award and stock option award payable to non-employee members of the Board.  

 

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 

 

Security Ownership

 

The following table shows the ownership of the Company’s $0.01 par value common stock by (i) beneficial owners of five percent or more of the Company’s common stock, (ii) each director, (iii) each of our named executive officers and (iv) all directors and executive officers as a group, as of April 25, 2017.  Unless otherwise noted, each shareholder’s address is 

15

 

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the address of the Company and exercises sole voting and investment power with respect to the shares beneficially owned. None of the shares reported below are pledged as security or have been placed in a margin account by any executive officer or director.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares Owned

 

Name of Beneficial Owner

    

Number ofCommon Shares 

    

Percent of Class  (1)

GDC Green Dolphin, LLC, 1 N. Wacker Drive, Suite 2500, Chicago, Illinois 60606 (2)

 
3,148,523				
 
6.4				
%

Joseph R. Mitchell

 
213,332				
 

*

 

David I. Rosenthal

 
132,256				
 

*

 

Adrian P. Schaffer

 
190,274				
 

*

 

Donald W. Vanlandingham

 
309,966				
 

*

 

Stephen J. Roy

 
207,569				
 

*

 

Joseph P. Sellinger

 
218,144				
 

*

 

John E. Sztykiel

 
144,672				
 

*

 

Director and Executive Officers as a Group (eight persons)

 
1,522,978				
 
3.1				
%

* Less than 1%

 

 

 

 

 

 

 (1)
 
 

 (1)
Based on 48,581,954 shares of our common stock issued and outstanding as of April 25, 2017. Pursuant to Exchange Act Rule 13d-3(d)(1), shares of common stock of which a person has the right to acquire beneficial ownership at any time by June 24, 2017 are deemed outstanding and beneficially owned by the person for the purpose of computing the number of shares and percentage beneficially owned by such person, but are not deemed outstanding for purposes of computing the percentage beneficially owned by any other person.
 (2)
Share data based on information in an amendment to a Schedule 13G filed on January 30, 2015 with the SEC by GDG Green Dolphin, LLC.  The securities reported are held by GDG Green Dolphin, LLC and Gregory D. Glyman.  As of December 31, 2014, the Schedule 13G indicates that (i) GDG Green Dolphin, LLC had shared voting and investment power with respect to 3,133,323 shares of common stock and (ii) Gregory D. Glyman had sole voting and investment power with respect to 15,200 shares of common stock and shared voting and investment power with respect to 3,133,323 shares of common stock.
 

Company Equity Compensation Plans 

 

The following table sets forth information as of December 31, 2016 (transition period), with respect to the Company’s equity compensation plans:

 

 

 

 

 

 

 

 

 

Plan Category

    

Number of securities to be issued upon exercise of outstanding options, warrants and rights

    

 

Weighted-averageexercise price ofoutstandingoptions, warrantsand rights

    

Number of securities remaining available for future issuance under equity compensation plans (excluding securitiesreflected in column (a))

 

 

 

(a)

 

 

(b)

 

(c)

 

Equity compensation plans approved by security holders: 

 

 

 

 

 

 

 

 

Equity Incentive Plan

 

2,487,161

 

$

1.12

 

2,554,193

 

Non-Employee Director Stock Option Plan

 

517,637

 

$

1.23

 

389,784

 

Stock Bonus Plan

 

102,048

 

$

0.84

 

252,227

 

Equity compensation plans not approved by security holders

 

  -

 

 

-

 

-

 

Total

 

3,106,846

 

 

 

 

3,196,204

 

 

 

Item 13.   Certain Relationships and Related Transactions, and Director Independence 

 

The Company has entered into indemnification agreements with all members of the Board and with all of its officers. These agreements require that the Company to indemnify such officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of the Company, and otherwise to the fullest extent permitted under Colorado law and the Company’s Bylaws.

 

16

 

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Certain Relationships and Related Transactions

 

Since March 31, 2015, the Company did not have any transactions to which it has been a participant that involved amounts that exceeded or will exceed the lesser of (i) $120,000 or (ii) one percent of the average of the Company’s total assets at March 31, 2016 and December 31, 2016, and in which any of the Company’s directors, executive officers or any other “related person” as defined in Item 404(a) of Regulation S-K had or will have a direct or indirect material interest.

 

The Company does not have a written policy regarding the identification, review, consideration and approval or ratification of “related person’s transactions.” Rather, such policy is evidenced by long standing principles set forth in the Company’s Code of Business Conduct Ethics and adhered to by the Board and the Audit Committee.   The Company does not endorse insider transactions and there have been no insider transactions during the reported periods. The Audit Committee approves any transaction between the Company and a related person.  A related person is any executive officer, director, or more than five percent shareholder of the Company’s stock, including any of their immediate family members, and any entity owned or controlled by such persons.

 

Director Independence

 

The NYSE MKT Company Guide rules require that a majority of the Board be independent. Pursuant to such rules, “independent director” means a person other than an executive officer or employee of the Company.  Additionally, no director qualifies as independent unless the Board affirmatively determines that the director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.  The Board has affirmatively determined that each of Messrs. Roy, Sztykiel and Sellinger is independent under the NYSE MKT Company Guide rules.  

 

In addition to the independence guidelines discussed above, members of the committees of the Board also must satisfy additional independence requirements established by the applicable rules of the NYSE MKT and the SEC.  See the section entitled “Committees of the Board” in Part III, Item 10 of this report for additional information.

 

Item 14.   Principal Accountant Fees and Services 

 

Independent Auditor’s Fees 

 

The following table represents aggregate fees billed to the Company by Hein & Associates LLP for the nine months ended December 31, 2016 (transition period) and twelve months ended March 31, 2016, respectively:  

 

 

 

 

 

 

 

 

 

 

    

December- 2016 

    

March-2016 

 

Audit Fees (1)

 

$
105,990				
 

$

98,015 

 

Audit – Related Fees (2)

 

$
8,610				
 

$

-

 

Tax Fees

 

$

-

 

$

-

 

All Other Fees

 

$

-

 

$

-

 

 (1)
Audit Fees consist of fees for professional services rendered for the audit of our annual consolidated financial statements, review of the interim consolidated financial statements included in quarterly reports on Form 10-Q and professional services rendered related to comfort letter procedures for stock offering and providing consent to include the auditor’s opinion in registration statements.
 (2)
Audit-Related Fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported in Audit Fees.
 

All fees described above incurred in connection with services performed by Hein & Associates LLP were approved by the Audit Committee. 

 

17

 

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Pre-Approval Policies and Procedures  

 

The Audit Committee pre-approves all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by our independent auditor, Hein & Associates LLP (subject to de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the Audit Committee prior to completion of the audit). The Audit Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting. 

 

Disagreements with Auditors

 

There have been no disagreements with Hein & Associates LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. 

 

PART IV 

 

Item 15.   Exhibits and Financial Statement Schedules 

 

The following documents are being filed as part of this report on Form 10-KT/A and are in addition to (but are not replacing) the exhibits filed with the Form 10-KT filed on March 30, 2017:  

 

(b) Exhibits 

 

 

 

 

ExhibitNumber

 

Description of Exhibit

31.3

 

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

31.4

 

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

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Table of Contents
Signatures 

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, UQM Technologies, Inc. has duly caused this Amendment No. 1 to Transition Report on Form 10-KT/A to be signed on its behalf by the undersigned, thereunto duly authorized, in Longmont, Colorado on the 27th day of April, 2017.  

 

UQM TECHNOLOGIES, INC., 

a Colorado Corporation 

 

 

 

 

 

By:

/s/DAVID I. ROSENTHAL

 

 

David I. Rosenthal

 

 

Chief Financial Officer, Treasurer and Secretary

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this Amendment No. 1 to Transition Report on Form 10-KT/A has been signed below by the following persons on behalf of UQM Technologies, Inc., in the capacities indicated and on the date indicated. 

 

 

Signature

    

Title

    

Date

 

 

 

 

 

/s/ DONALD W. VANLANDINGHAM

 

Chairman of the Board

 

April 26, 2017

Donald W. Vanlandingham

 

 

 

 

 

 

 

 

/s/JOSEPH R. MITCHELL

 

President, Chief Executive Officer, and Chief Operating Officer (Principal Executive Officer)

 

April 27, 2017

Joseph R. Mitchell

 

 

 

 

 

 

 

 

/s/DAVID I. ROSENTHAL

 

Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)

 

April 27, 2017

David I. Rosenthal

 

 

 

 

 

 

 

 

/s/STEPHEN J. ROY

 

Director

 

April 26, 2017

Stephen J. Roy

 

 

 

 

 

 

 

 

 

s/JOSEPH P. SELLINGER

 

Director

 

April 25, 2017

Joseph P. Sellinger

 

 

 

 

 

 

 

 

 

/s/JOHN E. SZTYKIEL

 

Director

 

April 25, 2017

John E. Sztykiel

 

 

 

 

 

 

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