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Item 9A. Controls and Procedures

2022-03-31 compared with 2021-03-31 · 907 added, 392 removed, 622 unchanged (68% of the section changed)

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Disclosure Controls and Procedures .

We maintain a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 13d-15(e) under the Exchange Act of 1934, as amended, (the “Exchange Act”)).

As required by Rule 13a-15(b) under the Exchange Act, management of the Company, under the direction of our Chief Executive Officer and Chief Financial Officer, reviewed and performed an evaluation of the effectiveness of design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2021.

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We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Management ’ s Annual Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining effective internal control over financial reporting (as defined in Rule 13a – 15(f) of the Exchange Act).

Management’s Annual Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining effective internal control over financial reporting (as defined in Rule 13a –

15(f) of the Exchange Act).

There are inherent limitations to the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding of controls.

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We have assessed the effectiveness of our internal controls over financial reporting (as defined in Rule 13a -15(f) of the Exchange Act) as of December 31, 2021.

In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control – Integrated Framework (2013)”.

In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control –

Integrated Framework (2013)”.

Management concluded that, as of December 31, 2021, our internal control over financial reporting was effective based on the criteria established by the COSO Internal Control Framework.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Other Information.

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Background and Experience of Directors

When considering whether directors and nominees have the experience, qualifications, attributes or skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of our business and structure, the Nominating, Governance and Compliance Committee focused primarily on each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies set forth immediately below.

individual biographies set forth immediately below. 

We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business.

As more specifically described in such person’s individual biographies set forth below, our directors possess relevant and industry-specific experience and knowledge in the engineering financial and business fields, as the case may be, which we believe enhances the Board’s ability to oversee, evaluate and direct our overall corporate strategy.

The Nominating, Governance and Compliance Committee annually reviews and makes recommendations to the Board regarding the composition and size of the Board so that the Board consists of members with the proper expertise, skills, attributes, and personal and professional backgrounds needed by the Board, consistent with applicable regulatory requirements.

The Nominating, Governance and Compliance Committee believes that all directors, including nominees, should possess the highest personal and professional ethics, integrity, and values, and be committed to representing the long-term interests of our shareholders.

The Nominating, Governance and Compliance Committee will consider criteria including the nominee’s current or recent experience as a senior executive officer, whether the nominee is independent, as that term is defined in existing independence requirements of the NASDAQ Capital Market and the Securities and Exchange Commission, the business, scientific or engineering experience currently desired on the Board, geography, the nominee’s industry experience, and the nominee’s general ability to enhance the overall composition of the Board.

The Nominating, Governance and Compliance Committee does not have a formal policy on diversity;

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The Lead Independent Director is appointed by the Board and is responsible for coordinating the activities of the independent directors and the Chief Executive Officer of the Company to set agendas for Board meetings and chair executive sessions of the independent directors.

The Lead Independent Director is also responsible for meeting, from time to time, with our Compensation Committee to discuss the Chief Executive Officer’s performance.

Our Corporate Governance practices contain several features which we believe will ensure that the Board maintains effective and independent oversight of management, including the following:

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Under our Certificate of Incorporation and Bylaws, the number of directors is fixed from time to time by the Board of Directors.

The Board of Directors currently consists of six members.

The Board of Directors currently consists of five members.

Directors are elected for a period of one year and thereafter serve, subject to the Bylaws, until the next annual meeting at which their successors are duly elected by the shareholders.

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Emmanuel Lakios

Chief Executive Officer, President

Chairman of the Board of Directors, Lead Independent Director, Chairperson-Audit Committee

Director, Chairperson-Compensation Committee

Director, Chairperson-Nominating, Governance and Compliance Committee

Robert M Brill

Chief Executive Officer, President, Director

Chairman of the Board of Directors, Lead Independent Director, Chairman-Audit Committee

Director, Chairman-Compensation Committee

Director, Chairman-Nominating, Governance and Compliance Committee

Director, Chairman- Strategic Planning Committee

Thomas McNeill

Chief Financial Officer, Secretary and Treasurer

Steven Aragon

Chief Operating Officer

Chief Financial Officer, Executive Vice President, Secretary and Treasurer

Vice President and General Manager-SDC Division

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Vice President of Engineering and Technology

Karlheinz Strobl

Vice President of Business Development

Emmanuel Lakios

Emmanuel Lakios was appointed to President and Chief Executive Officer of the Company on January 22, 2021.

Emmanuel Lakios was appointed to serve as President and Chief Executive Officer of the Company on January 22, 2021, and on July 15, 2021 was elected by the shareholders as a member of the Board of Directors.

Lakios joined the Company as Vice President Sales and Marketing in February 2017.

Lakios has over thirty (30) years of experience serving the semiconductor, data storage and optical device industries and is the holder of several patents in the field of process equipment and device structure.

Lakios has over thirty (30) years of experience serving the aerospace, semiconductor, data storage and optical device industries and is the holder of several patents in the field of process equipment and device structure.

From January 2015 through February 2017, Mr.

Lakios was the President and Chief Executive Officer at Sensor Electronic Technology, Inc., overseeing that company’s transition from R&D to a leading global commercial UV LED supplier.

From 2003 to 2011 he was the Executive Vice President of Field Operations and President and Chief Operating Officer at Imago Scientific, bringing it from pre-revenue to a commercial leadership position in the 3D atomic scale tomography field.

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Waldman was elected to the Board of Directors of Comtech Telecommunications Corp.

in August of 2015, and since December 2015, serves as Chair of its Audit Committee.

in August of 2015, since December 2015, serves as Chair of its Audit Committee and since December 28, 2021 serves as Lead Independent Director.

Waldman is also the Chair of the Supervisory Committee of Bethpage Federal Credit Union.

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Waldman is a Certified Public Accountant.

Waldman qualifies to serve as a director, Audit Committee Chairman and Lead Independent Director because of his more than 35 years’ experience in public accounting and his service on various boards.

Waldman qualifies to serve as a director, Audit Committee Chairman and Lead Independent Director because of his more than 40 years’

experience in public accounting and his service on various boards.

Gunther has served as a member of our Board of Directors since 2000.

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Since December 2016, Mr.

Gunther has served as an Executive Vice President and Chief Lending Officer for Dime Community Bank, a Long Island, New York based commercial bank, where he is responsible for all lending.

Gunther has served as an Executive Officer and Chief Lending Officer for Dime Community Bank, a Long Island, New York based commercial bank, where he is responsible for all lending.

From July 2015 to December 2016, Mr.

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Nielsen was the Director of Finance for The Beechwood Organization until January 2019 and has been responsible for Project and Corporate Finance including Strategic Planning Initiatives since 2014.

He has been a member of the Board of Directors of Bridgehampton National Bank and Bridge Bancorp Inc., its Parent holding company since 2013, serving on the Compensation Committee, Corporate Governance & Nominating Committee, ALCO, Loan, and the Compliance, BSA & CRA Committees.

He has been a member of the Board of Directors of Dime Community Bank since its merger on February 1, 2021 with Bridge Bancorp Inc.

In addition, he is Chairman of the Credit Risk Committee and a member of the Audit and Compliance Committees.

Prior to the merger, he was a member of the Board of Directors of Bridgehampton National Bank and Bridge Bancorp Inc., its Parent holding company since 2013, and served on the Audit Committee, Compensation Committee, Corporate Governance & Nominating Committee, as well as on the ALCO and Loan Committees and the Compliance BSA & CRA Committee.

Nielsen also served as a Director of North Fork Bancorporation and its subsidiary North Fork Bank from 2000 to 2006 where he chaired both the Compensation Committee and Audit Committee as well as having served as Lead Independent Director.

Nielsen is the former CEO of Reliance Federal Savings Bank and Herald National Bank, and a 45-year veteran of the banking industry.

Nielsen also served as a Director of North Fork Bancorporation and its subsidiary North Fork Bank for 6 years where he chaired both the Compensation Committee and Audit Committee as well as having served as Lead Independent Director.

Nielsen’s extensive public company, banking and real estate development experience will provide a valuable resource to the Board of Directors and Executive Management.

Nielsen’s extensive public company, banking and real estate development experience will provide a valuable resource to the Board of Directors and Executive Management.

Brill was appointed a Director of the Company on March 5, 2021.

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Brill has also previously served on the Board of Directors of multiple public and private companies.

Brill served as General Manager of Harris Corporation’s CMOS Semiconductor Division.

He also held various technical and management positions at IBM’s semiconductor operation.

Brill holds a Ph.D in nuclear physics from Brown University and a B.A.

Brill served as General Manager of Harris Corporation’s CMOS Semiconductor Division.

He also held various technical and management positions at IBM’s semiconductor operation.

Brill holds a Ph.D.

in nuclear physics from Brown University and a B.A.

in Engineering Physics from Lehigh University.

Brill had previously served on the Company’s Board from April 2018 until October 2019.

Rosenbaum founded the Company in 1982 and served as our Chairman of the Board, President and Chief Executive Officer until January 22, 2021.

Rosenbaum continues as a Director.

From 1971 until 1982, Mr.

Rosenbaum was president, director and a principal stockholder of Nav-Tec Industries, a manufacturer of semiconductor processing equipment similar to the type of equipment we manufacture.

From 1966 to 1971, Mr.

Rosenbaum was employed by a division of General Instrument, a manufacturer of semiconductor materials and equipment.

Teitelbaum, Esq.

Teitelbaum is a director and has served as a member of our Board of Directors since 1985 and as our in-house General Counsel from May 16, 2011 until January 22, 2021.

Teitelbaum is an attorney, who prior to May 16, 2011, conducted his own private practice, the Law Offices of Martin J.

Prior to establishing his own firm in 1988, Mr.

Teitelbaum was a partner at Guberman and Teitelbaum from 1977 to 1987.

Teitelbaum earned a B.A.

in Political Science from the State University of New York at Buffalo and a Juris Doctor from Brooklyn Law School.

Teitelbaum has served as our outside General Counsel for many years and his legal expertise makes him an asset to the Company’s board of directors.

Brill had previously served on the Company’s Board from April 2018 until October 2019.

Thomas McNeill

Thomas McNeill was appointed as the Company’s Chief Financial Officer, Secretary and Treasurer effective as of March 4, 2019.

McNeill has been a Chief Financial Officer ("CFO") since 1996 and has nineteen years' of SEC reporting experience with two public companies, as well as a full range of financial and operational experience.

Since April 2015, he has been CFO at Century Direct, LLC, a printing and mailing company serving the direct mail marketing industry.

Thomas McNeill was appointed as the Company’s Chief Financial Officer, Secretary and Treasurer effective as of March 4, 2019, and on June 1, 2021 was appointed to Executive Vice President.

McNeill has been a Chief Financial Officer ("CFO") since 1996 and has in excess of twenty years' of SEC reporting experience, as well as a full range of financial and operational experience.

From April 2015 to March 2019 he was CFO at Century Direct, LLC, a printing and mailing company serving the direct mail marketing industry.

From November 2014 to April 2015, he was a consultant at Mailmen Inc.

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McNeill holds a BBA in accounting from Hofstra University.

Steven Aragon

Steven Aragon was appointed Chief Operating Officer by the Board of Directors on October 20, 2014.

Aragon has over 25 years of thin-film process, materials, and system expertise applied to photovoltaic, optical, electronic, and magnetic device fabrication.

He received his Ph.D.

in Physical Chemistry from the University of California, Santa Cruz, in 1990 and his MBA from Santa Clara University in 1996.

He is the holder of five process equipment design patents.

Aragon was a co-founder of Optimus Energy Systems International Inc.

and served as its Chief Technical Officer and Senior Vice-President – Engineering from November 2011 to October 2014.

From June 2008 to October 2011, He has also served as Vice-President – Engineering at Stion Corp of San Jose, California, a maker of nanostructure-based CIGS (copper indium gallium sulphur-diselenide) thin-film photovoltaic panels and as the Vice President – Engineering at Day Star Technologies Inc.

from June 2001 to June 2008.

Prior to his appointment as Vice President and General Manager-SDC Division, Mr.

Collins served as the General Manager of CVD’s SDC Division since 1999.

From 1990 to 1999 he was employed by Stainless Design Corp.

as Manager of Field Operations and Product Development Advisor.

Collins attended Columbia University School of Engineering and Applied Science.

Jeffrey Brogan was appointed as Vice President Sales and Marketing for CVD Equipment on March 23, 2021.

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He has over 20 years of experience in strategic sales & marketing, technology management, and advanced research & development.

Brogan has led the development of innovative sensor products, transitioning high performance products to manufacturing using the Company’s Direct Write MesoPlasma™ printing technology.

Brogan has led the development of innovative sensor products, transitioning high performance products to manufacturing using the Company’s Direct Write MesoPlasma™

printing technology.

He received his PhD in Materials Science and Engineering from Stony Brook University in 1996.

Maxim Shatalov

Shatalov joined CVD as Vice President of Engineering and Technology in April 2018.

Prior to CVD Mr.

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(SETi) a LED company where he held multiple technical and management positions from 2006 thru 2018.

Shatalov became Vice President of Technology responsible for UV LED technology and LED application development at SETi.

Shatalov became Vice President of Technology responsible for UV LED technology and LED application development at SETi. 

Shatalov has over twenty years of experience in semiconductor research and devices and holds more than 12 U.S.

Karlheinz Strobl

Karlheinz Strobl has been the Vice President of Business Development since October 2007.

From 1997 to 2007, he was the founder and President of eele Laboratories, LLC, a technology and manufacturing solutions development company for a novel Light Engine for the video and data projection display market.

Strobl holds over 14 patents and earned an MBA from Boston University, a PhD from the University of Innsbruck and an MS from both the University of Innsbruck and the University of Padova.

He has also worked at the Max Planck Institute and at Los Alamos National Laboratory.

patents. 

Code of Ethics

We have adopted a Corporate Code of Conduct and Ethics that applies to our employees, senior management and Board of Directors, including the Chief Executive Officer and Chief Financial Officer.

The Corporate Code of Conduct and Ethics is available on our website, http://www.cvdequipment.com, by clicking on “About Us” and then clicking on “Corporate Overview.”

The Corporate Code of Conduct and Ethics is available on our website, http://www.cvdequipment.com , by clicking on “About Us”

and then clicking on “Corporate Overview.”

Audit Committee

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Waldman, Chairman, Conrad J.

Gunther and Raymond A.

During the fiscal year ended December 31, 2020, the Audit Committee held six meetings.

Gunther, Raymond A.

Nielsen and Robert M.

During the fiscal year ended December 31, 2021, the Audit Committee held five meetings.

Pursuant to the Audit Committee Charter, the Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of any independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for us, and each such independent auditor shall report directly to the Committee.

The Audit Committee also reviews with management and the independent auditors, our annual audited financial statements (including the disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), the scope and results of annual audits and the audit and non-audit fees of the independent registered public accounting firm.

Gunther, Waldman and Nielsen are “independent” under the requirements of the NASDAQ Stock Market.

The Board of Directors has determined that each of Messrs.

Gunther and Waldman is an “audit committee financial expert” as that term is defined in the rules and regulations of the Securities and Exchange Commission.

Waldman, Gunther, Nielsen and Brill are “independent”

under the requirements of the NASDAQ Stock Market.

The Board of Directors has determined that Mr.

Waldman is an “audit committee financial expert”

as that term is defined in the rules and regulations of the Securities and Exchange Commission.

Section 16(a) Beneficial Ownership Reporting Compliance

The rules of the Securities and Exchange Commission require us to disclose late filings of reports of stock ownership and changes in stock ownership by our directors, officers and ten percent shareholders.

To our knowledge, based solely on our review of (a) the copies of such reports and amendments thereto furnished to us and (b) written representations that no other reports were required, during our fiscal year ended December 31, 2020, all of the filings for our officers, directors and ten percent shareholders were made on a timely basis.

To our knowledge, based solely on our review of (a) the copies of such reports and amendments thereto furnished to us and (b) written representations that no other reports were required, during our fiscal year ended December 31, 2021, all of the filings for our officers, directors and ten percent shareholders were made on a timely basis, except for Mr.

Nielsen and Mr.

Brill for which one Form 4 each was inadvertently filed untimely.

Executive Compensation.

Summary Compensation Table

The following table sets forth the compensation of our chief executive officer and chief financial officer, and our “named executive officers,” for the years ended December 31, 2020 and 2019.

The following table sets forth the compensation of our chief executive officer and chief financial officer, and our “named executive officers,”

for the years ended December 31, 2021 and 2020.

Name and principal position

Option Awards ($) (1)

All Other Compensation

Rosenbaum President and

Chief Executive Officer (4)

Emmanuel Lakios

 President and Chief Executive Officer (2) 

Thomas McNeill (4)

Secretary and Chief Financial Officer

General Counsel and Assistant Secretary (5)

Secretary, Chief Financial Officer and

Executive Vice President

 229,000

Vice President Sales & Marketing (5)

Former President and Chief Executive Officer (6)

Amounts shown do not reflect compensation actually received by the named executive officer.

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Pursuant to SEC rule changes effective February 28, 2010, we are required to reflect the total grant date fair values of the option grants in the year of grant, rather than the portion of this amount that was recognized for financial statement reporting purposes in a given fiscal year which was required under the prior SEC rules, resulting in a change to the amounts reported in prior Annual Reports, which was valued utilizing the grant date fair value in the year granted.

Effective January 22, 2021, Emmanuel Lakios was appointed President and Chief Executive Officer.

Represents payment for accrued and unused vacation time.

Effective March 4, 2019, Thomas McNeill was appointed CFO, Secretary and Treasurer.

Effective March 4, 2019, Thomas McNeill was appointed CFO, Secretary and Treasurer, and effective June 1, 2021, Mr.

McNeill was appointed Executive Vice President.

Effective March 23, 2021, Jeffrey Brogan was appointed Vice President Sales and Marketing effective.

Effective January 22, 2021, Leonard A.

Rosenbaum’s employment with the Company terminated and Emmanuel Lakios was then appointed as President and Chief Executive Officer.

Effective January 22, 2021, Martin J.

Teitelbaum’s employment with the Company was terminated.

Rosenbaum’s employment with the Company terminated.

From January 23, 2021 until July 15, 2021 he was a non-employee Director.

Stock awards in 2021 were for services rendered as a non-employee Director.

In addition, included in all other compensation includes $9,603 cash compensation as a non-employee Director, as well as payment of accrued and unused vacation time of $45,740.

Includes an accrued bonus for 2021 performance expected to be paid in April 2022 related to Mr.

McNeill and Mr.

Brogan in the approximate amount of $81,000, $54,000 and $21,000, respectively.

Employment Agreements and Potential Payments Upon Termination or Change in Control

There are no arrangements for compensation of directors and there are no employment contracts between the company and its directors or any change in control arrangements.

Emmanuel Lakios Employment Agreement

On June 1, 2021, the Company entered into an Employment Agreement with Emmanuel Lakios, the Company’s President and Chief Executive Officer (the “Lakios Agreement”).

The term of Mr.

Lakios’s employment under the Lakios Agreement commenced as of the effective date thereof and shall continue until terminated in accordance with the terms of the Lakios Agreement.

Under the Lakios Agreement, Mr.

Lakios will receive an initial annual base salary of $288,000, which shall be reviewed from time to time and may be increased, but not decreased, by the Compensation Committee of the Board of Directors (the “Committee”) in its sole and exclusive discretion.

Lakios shall be entitled to participate in any bonus or incentive plan available to the Company’s senior executives generally, on such terms as the Committee may determine in its discretion.

In the event of the termination of the Lakios Agreement and Mr.

Lakios’s employment thereunder, Mr.

Lakios or his estate (in the event of his death) shall be entitled to (A) receive any unpaid base salary earned and accrued under the Lakios Agreement prior to the date of termination (and reimbursement for expenses incurred prior to the date of termination), (B) indemnification in accordance with any applicable indemnification plan, program, corporate governance document or other arrangement, and any vested rights pursuant to any insurance plan, benefit plan or retirement plan, and, except in the event of Mr.

Lakios’s termination by the Company for Cause (as defined in the Lakios Agreement, (C) treatment of his stock option grants in accordance with the terms of the applicable plan and award agreement.

In the event Mr.

Lakios’s employment is terminated as a result of death or disability, Mr.

Lakios shall also be entitled to receive a pro rata bonus payment under the Company’s bonus Plan for the year of termination, if applicable.

In the event Mr.

Lakios’s employment is terminated by the Company for Cause, Mr.

Lakios’s stock option grants, whether vested or unvested, shall immediately terminate and be null and void.

In the event Mr.

Lakios’s employment is terminated by the Company without Cause, or by Mr.

Lakios for Good Reason (as defined in the Lakios Agreement), Mr.

Lakios shall also be entitled to (A) a pro rata bonus for the year of termination, and (B) continued payment of his base salary and the Company’s portion of Mr.

Lakios’s then existing medical benefits for the nine (9) month period following the date of termination.

The Lakios Agreement contains customary non-competition, non-solicitation, and confidentiality provisions in favor of the Company.

Thomas McNeill Employment Agreement

On June 1, 2021, the Company entered into an Employment Agreement with Thomas McNeill, the Company’s Executive Vice President, Chief Financial Officer and Secretary (the “McNeill Agreement”).

The term of Mr.

McNeill’s employment under the McNeill Agreement commenced as of the effective date thereof and shall continue until terminated in accordance with the terms of the McNeill Agreement.

Under the McNeill Agreement, Mr.

McNeill will receive an initial annual base salary of $238,000, which shall be reviewed from time to time and may be increased, but not decreased, by the Committee in its sole and exclusive discretion.

McNeill shall be entitled to participate in any bonus or incentive plan available to the Company’s senior executives generally, on such terms as the Committee may determine in its discretion.

In the event of the termination of the McNeill Agreement and Mr.

McNeill’s employment thereunder, Mr.

McNeill or his estate (in the event of his death) shall be entitled to (A) receive any unpaid base salary earned and accrued under the McNeill Agreement prior to the date of termination (and reimbursement for expenses incurred prior to the date of termination), (B) indemnification in accordance with any applicable indemnification plan, program, corporate governance document or other arrangement, and any vested rights pursuant to any insurance plan, benefit plan or retirement plan, and, except in the event of Mr.

McNeill’s termination by the Company for Cause (as defined in the McNeill Agreement, (C) treatment of his stock option grants in accordance with the terms of the applicable plan and award agreement.

In the event Mr.

McNeill’s employment is terminated as a result of death or disability, Mr.

McNeill shall also be entitled to receive a pro rata bonus payment under the Company’s bonus Plan for the year of termination, if applicable.

In the event Mr.

McNeill’s employment is terminated by the Company for Cause, Mr.

McNeill’s stock option grants, whether vested or unvested, shall immediately terminate and be null and void.

In the event Mr.

McNeill’s employment is terminated by the Company without Cause, or by Mr.

McNeill for Good Reason (as defined in the McNeill Agreement), Mr.

McNeill shall also be entitled to (A) a pro rata bonus for the year of termination, and (B) continued payment of his base salary and the Company’s portion of Mr.

McNeill’s then existing medical benefits for the nine (9) month period following the date of termination.

The McNeill Agreement contains customary non-competition, non-solicitation, and confidentiality provisions in favor of the Company.

Other then as set forth above, there are no arrangements for compensation of directors or Named Executive Officers and there are no employment contracts between the Company and its directors or any change in control arrangements.

Outstanding Equity Awards at December 31, 2021

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OPTION AWARDS

Securities Underlying Options Exercisable

Securities Options Unexercisable

Number of Securities Underlying Options Exercisable

Number of Securities Options Unexercisable

Exercise Price

Option Expiration Date

Number of shares or units of stock that have not vested

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Equity Incentive Plan Awards:

Market or payout value of unearned shares or units that have not vested

Rosenbaum (3)

Market or payout value

of unearned shares or units that have not vested

Emmanuel Lakios (1)

Thomas McNeill (2)

Teitelbaum (4)

Restricted stock units vest as to 2,500 shares respectively on March 4, 2021 and 5,000 shares on March 4, 2022.

Effective March 4, 2019, Thomas McNeill was appointed CFO, Secretary and Treasurer.

Effective January 22, 2021, Mr.

Rosenbaum’s employment with the Company was terminated and Emmanuel Lakios was then appointed as President and CEO.

Effective January 22, 2021, Mr.

Teitelbaum’s employment with the Company was terminated.

Effective January 22, 2021, Emmanuel Lakios was appointed President and Chief Executive Officer.

Effective March 4, 2019, Thomas McNeill was appointed CFO, Secretary and Treasurer, and effective June 1, 2021, Mr.

McNeill was appointed Executive Vice President.

Restricted stock units vest as to 5,000 shares on March 4, 2022.

Effective March 23, 2021, Jeffrey Brogan was appointed Vice President Sales and Marketing effective.

2021 Director Compensation

The following table sets forth a summary of the compensation we paid to our non-employee directors in 2021.

Fees Earned or

Restricted Stock

Option Awards (1)

Rosenbaum (2)

Teitelbaum (3)

Amounts shown do not necessarily reflect compensation actually received by the named director.

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The assumptions used to calculate the value of option awards are set forth under Note 10 of the Notes to Consolidated Financial Statements.

Effective January 22, 2021, Leonard A.

Rosenbaum’s employment with the Company terminated.

From January 23, 2021 until July 15, 2021 he was a non-employee Director.

Effective January 22, 2021, Martin J.

Teitelbaum’s employment with the Company terminated.

From January 23, 2021 until May 7, 2021 he was a non-employee Director.

On May 9, 2016, the Board of Directors adopted a Director Compensation Plan for all non-employee directors, which retroactively from January 1, 2016, provided for annual compensation of approximately fifty thousand dollars ($50,000) to each non-employee director in a combination of 40% cash and 60% stock grant.

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The independent Lead Director receives $30,000 in cash, the Audit Chairman receives $25,000 in combination of cash and stock grants, and the other Committee Chairs receive amounts ranging from $5,000-$10,000 in a combination of cash and stock grants.

On October 11, 2021, the Board of Directors, following the unanimous recommendation of the Board’s Compensation Committee, unanimously approved a director compensation plan, effective October 1, 2021 (the “Plan”).

The Plan is based on the recommendations of an independent compensation consultant engaged by the Board’s Compensation Committee.

Pursuant to the Plan, each director is entitled to Director Compensation, divided into the following pay components:

(i) Annual Board Cash Compensation in the amount of $40,000 and (ii) an Annual Equity Retainer in the amount of $40,000, to be automatically granted on the date of the Company’s annual meeting of shareholders (directors may elect to receive payment in restricted stock, stock options or a combination thereof).

Additionally, a director serving as a chairman for the Board’s Compensation Committee, Nominating & Governance Committee, or Strategic Planning Committee is entitled to Chair Compensation in the amount of $10,000.

The director serving as the chairman for the Board’s Audit Committee is entitled to Chair Compensation in the amount of $25,000.

Furthermore, the director serving as the Non-Executive Chairman is entitled to Board Leadership Compensation in the amount of $48,000.

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

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Name and Address of Beneficial Owner (1)

Amounts and Nature of Beneficial Ownership (2)

Nature of Beneficial

Ownership (2)

Percent of Class (%)

Leviticus Partners, L.P.

Karlheinz Strobl

Steven Aragon

Emmanuel Lakios

Thomas McNeill

Maxim Shatalov

Jeffrey A Brogan

All directors and executive officers and executive employees as a group (thirteen persons)

Maxim Shatalov

Thomas McNeill

All directors and executive officers and executive employees as a group (nine persons)

*Less than 1% of the outstanding common stock or less than 1% of the voting power

The address of Messrs.

Rosenbaum, Teitelbaum, Gunther, Waldman, Nielsen, Brill, McNeill, Strobl, Aragon, Strobl, Shatalov, Lakios and Brogan is c/o CVD Equipment Corporation, 355 South Technology Drive, Central Islip, New York 11722.

Lakios, Gunther, Waldman, Nielsen, Brogan, Shatalov, McNeill and Brill is c/o CVD Equipment Corporation, 355 South Technology Drive, Central Islip, New York 11722.

The address of Mr.

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is 200 Park Avenue, Suite 1700, New York, NY 10166.

The Address of Mr.

Rosenbaum is 10 Parsons Landing, Islip, NY 11751.

All of such shares are owned directly with sole voting and investment power, unless otherwise noted below.

Does not include 4,800 shares of unvested restricted common stock.

Does not include unvested options to purchase 100,000 shares of our common stock.

Does not include 7,100 shares of unvested restricted common stock.

Includes 2,000 shares held by Mr.

Teitelbaum’s wife as to which beneficial ownership thereof is disclaimed by Mr.

Does not include 4,800 shares of unvested restricted common stock.

Does not include 9,600 shares of unvested restricted common stock.

Does not include 7,100 shares of unvested restricted common stock.

Does not include 5,800 shares of unvested restricted common stock.

Does not include 5,000 shares of unvested restricted common stock.

See Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities under the heading “Equity Compensation Plan Information” for information regarding our securities authorized for issuance under equity compensation plans.

Does not include unvested options to purchase 10,000 shares of our common stock.

Does not include shares to be issued per Director compensation agreement related to the Annual Equity Retainer in the amount of $40,000, to be determined at the 2022 shareholder meeting.

(Director may elect to receive payment in restricted stock, stock options, or a combination thereof).

Does not include unvested options to purchase 20,000 shares of our common stock.

Does not include unvested options to purchase 50,000 shares of our common stock.

See Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities under the heading “Equity Compensation Plan Information”

for information regarding our securities authorized for issuance under equity compensation plans.

Certain Relationships and Related Transactions, and Director Independence.

2 unchanged sentences

The current members of our Board of Directors are Lawrence J.

Waldman, Conrad J.

Waldman, Emmanuel Lakios, Conrad J.

Gunther, Raymond A.

Nielsen, Robert M.

Brill, Leonard A.

Rosenbaum and Martin J.

Waldman, Gunther, Nielsen and Brill have been determined to be “independent” as defined under Rule 4200 of the Nasdaq Stock Market.

Nielsen and Robert M.

Waldman, Gunther, Nielsen and Brill have been determined to be “independent”

as defined under Rule 4200 of the Nasdaq Stock Market.

Principal Accountant Fees and Services.

Effective September 20, 2019, the Company authorized the engagement of Marcum, LLP, Certified Public Accountants (“Marcum”) to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019.

Marcum also performed the review of the Company’s interim quarterly period ending September 30, 2019.

Previously MSPC, Certified Public Accountants and Advisors (“MSPC) were the Company’s independent registered public accounting firm.

The following presents fees for professional audit services rendered by Marcum, for the year ended December 31, 2020 and 2019, and MSPC, for the first two quarters of 2019.

The following presents fees for professional audit services rendered by Marcum, for the year ended December 31, 2021 and 2020.

Audit-Related Fees

All Other Fees

Audit fees for 2019 consisted of the review of the first and second quarters of 2019 by MSPC and the review of the third quarter and audit of the year-end by Marcum.

Audit fees consisted of the review of the first three quarters and audit of the year-end by Marcum.

Audit -related Fees

Consisted of the audit of the Company’s Defined Contribution Plan 401(k) by Marcum.

Audit Committee Approval

The engagement of the Company’s independent registered public accounting firm is pre-approved by the Company’s Audit Committee.

The Audit Committee pre-approves all fees billed and all services rendered by the Company’s independent registered public accounting firm.

The engagement of the Company’s independent registered public accounting firm is pre-approved by the Company’s Audit Committee.

The Audit Committee pre-approves all fees billed and all services rendered by the Company’s independent registered public accounting firm.

Exhibits, Financial Statement Schedules

Certificate of Incorporation dated October 12, 1982 (Incorporated herein by reference to the Company’s Form S-1 filed on July 3, 2007).

Certificate of Amendment of Certificate of Corporation, dated April 25, 1985 (Incorporated herein by reference to the Company’s Form S-1 filed on July 3, 2007).

Certificate of Amendment of Certificate of Corporation, dated August 12, 1985 (Incorporated herein by reference to the Company’s Form S-1 filed on July 3, 2007).

Certificate of Amendment of the Certificate of Incorporation, dated December 9, 2016 (Incorporated herein by reference the Company’s Current Report on Form 8-K filed on December 14, 2016).

Amended and restated By-laws of CVD Equipment Corporation, dated as of October 5, 2016 (Incorporated herein by reference to the Company’s Current Report on Form 8-K filed on October 11, 2016).

Description of the Company’s Securities (Incorporated herein by reference to the Company’s Annual Report on Form 10-K filed on March 30, 2020).

CVD Equipment Corporation 2001 Stock Option Plan (Incorporated herein by reference to the Company’s Form S-1 filed on July 3, 2007).*

Form of Non-Qualified Stock Option Agreement (Incorporated herein by reference to the Company’s Annual Report on Form 10-KSB filed on March 26, 2007).*

CVD Equipment Corporation 2007 Share Incentive Plan (Incorporated herein by reference to the Company’s Schedule 14A filed on November 5, 2007).

Lease Agreement, dated February 9, 2012, by and between FAE Holdings 411519R, LLC and the Company (Incorporated by reference from the Company’s Report on Form 10-Q filed with the Commission on May 15, 2012).

Assignment Agreement, dated February 9, 2012, by and between FAE Holdings 411519R, LLC and the Company (Incorporated by reference from the Company’s Report on Form 10-Q filed with the Commission on May 15, 2012).

Qualified Exchange Accommodation Agreement, dated February 9, 2012, by and between FAE Holdings 411519R, LLC and the Company (Incorporated by reference from the Company’s Report on Form 10-Q filed with the Commission on May 15, 2012).

Joint and Several Hazardous Material Guaranty and Indemnification Agreement, dated March 15, 2012, by and between FAE Holdings 411519R, LLC and the Company (Incorporated by reference from the Company’s Report on Form 10-Q filed with the Commission on May 15, 2012).

Assignment of Leases and Rents, dated March 15, 2012, by and among FAE Holdings 411519R, LLC, the Town of Islip Industrial Development Agency and HSBC Bank USA, National Association (Incorporated by reference from the Company’s Report on Form 10-Q filed with the Commission on May 15, 2012).

Amended and Restated Fee and Leasehold Mortgage, dated March 15, 2012, by and among FAE Holdings 411519R, LLC, the Town of Islip Industrial Development Agency and HSBC Bank USA, National Association (Incorporated by reference from the Company’s Report on Form 10-Q filed with the Commission on May 15, 2012).

Amended and Restated Note, dated March 15, 2012, by and among FAE Holdings 411519R, LLC, the Town of Islip Industrial Development Agency and HSBC Bank USA, National Association (Incorporated by reference from the Company’s Report on Form 10-Q filed with the Commission on May 15, 2012).

Note and Mortgage Assumption Agreement, dated March 15, 2012, by and among FAE Holdings 411519R, LLC, the Town of Islip Industrial Development Agency and HSBC Bank USA, National Association (Incorporated by reference from the Company’s Report on Form 10-Q filed with the Commission on May 15, 2012).

Guaranty of Payment, dated March 15, 2012, by the Company (Incorporated by reference from the Company’s Report on Form 10-Q filed with the Commission on May 15, 2012).

Asset Purchase Agreement, dated October 31, 2017, by and between MesoScribe Technologies, Inc.

and CVD MesoScribe Technologies Corporation (Incorporated by reference from the Company’s Current Report on Form 8-K filed on November 6, 2017).

ADA and Environmental Indemnity Agreement by 555 N Research Corporation and CVD Equipment Corporation dated November 30, 2017, (Incorporated by reference to the Company’s Annual Report on Form 10-K filed with Commission on April 2, 2018).

Assignment of Leases and Rents dated November 30, 2017 by and between 555 N Research Corporation and HSBC Bank USA, National Association (Incorporated by reference to the Company’s Annual Report on Form 10-K filed with Commission on April 2, 2018).

Unlimited Guaranty between CVD Equipment Corporation and HSBC Bank USA, National Association dated November 30, 2017, (Incorporated by reference to the Company’s Annual Report on Form 10-K filed with Commission on April 2, 2018).

Town of Islip Industrial Development Agency and CVD Equipment Corporation, Agency Compliance Agreement dated as of November 1, 2017 (Incorporated by reference to the Company’s Annual Report on Form 10-K filed with Commission on April 2, 2018).

Town of Islip Industrial Development Agency and CVD Equipment Corporation Amended and Restated Agency Compliance Agreement dated November 30, 2017 (Incorporated by reference to the Company’s Annual Report on Form 10-K filed with Commission on April 2, 2018).

Fee and Leasehold Mortgage and Security Agreement from town of Islip Industrial Development Agency and 555 N Research Corporation to HSBC Bank USA, national Association (Incorporated by reference to the Company’s Annual Report on Form 10-K filed with Commission on April 2, 2018).

Town of Islip Industrial Development Agency and FAE Holdings 411519R, LLC Amended and Restated Lease and Project Agreement dated as of November 1, 2017 (Incorporated by reference to the Company’s Annual Report on Form 10-K filed with Commission on April 2, 2018).

Amended and Restated Note by and between 555 N Research Corporation and HSBC Bank USA, National Association (Incorporated by reference to the Company’s Annual Report on Form 10-K filed with Commission on April 2, 2018).

Mortgage Modification Agreement, dated as of August 5, 2019, by and between 555 N Research Corporation and HSBC Bank USA, National Association (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on August 5, 2019).

Reaffirmation of Unlimited Continuing Guaranty, dated as of August 5, 2019, by and between CVD Equipment Corporation and HSBC Bank USA, National Association (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on August 5, 2019).

Note Modification Agreement, dated as of August 5, 2019, by and between FAE Holdings 411519R and HSBC Bank USA, National Association (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on August 5, 2019).

West side sublease, dated May 31, 2019, by and between the Company and ELM Freight Handlers Inc., (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 13, 2019).

East side sublease, dated November 23, 2020, by and between the Company and ELM Freight Handlers Inc.