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Item 9A. Controls and Procedures

2021-03-17 compared with 2020-03-06 · 1002 added, 78 removed, 84 unchanged (93% of the section changed)

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Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures defined in Rule 13a‑15(e) under the Exchange Act, as controls and other procedures that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

We maintain disclosure controls and procedures defined in Rule 13a-15(e) under the Exchange Act, as controls and other procedures that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our Chairman and Chief Executive Officer, Thomas Brisbin, and our Chief Financial Officer, Stacy McLaughlin, as appropriate to allow timely decisions regarding required disclosure.

In connection with the preparation of this Annual Report, an evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of December 27, 2019.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, at a reasonable assurance level, as of December 27, 2019.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended).

1 unchanged sentence

Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 27, 2019.

In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013 Framework).

Our management has concluded that, as of December 27, 2019, our internal control over financial reporting was effective based on these criteria.

As discussed in Note 13, “

Business Combinations ”, to our consolidated financial statements, we acquired The Weidt Group, Onsite Energy, and E3, Inc.

on March 8, 2019, July 2, 2019, and October 28, 2019, respectively.

As permitted by guidelines established by the SEC for newly acquired business, we excluded the acquisitions from the scope of our assessment on internal controls over financial reporting for the fiscal year ended December 27, 2019.

These acquisitions contributed approximately $48.7 million to our consolidated total assets as of December 27, 2019, and $22.9 million to our consolidated revenues for the fiscal year ended December 27, 2019.

We are in the process of integrating these businesses into our overall internal controls over financial reporting process and plan to include our assessment of each businesses’

internal control over financial reporting within one year of the applicable acquisition date.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of January 1, 2021.

Our management has concluded that, as of January 1, 2021, our internal control over financial reporting was effective based on these criteria.

Report of Independent Registered Public Accounting Firm

Crowe LLP, the independent registered public accounting firm that audited the fiscal year 2019 consolidated financial statements included in this Annual Report on Form 10‑K, has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 27, 2019, which is included herein.

Crowe LLP, the independent registered public accounting firm that audited the fiscal year 2020 consolidated financial statements included in this Annual Report on Form 10-K, has issued an attestation report on the effectiveness of our internal control over financial reporting as of January 1, 2021, which is included herein.

Changes in Internal Controls

On March 8, 2019, July 2, 2019, and October 28, 2019, we completed the acquisition of The Weidt Group, Onsite Energy, and E3, Inc..

Prior to the acquisition, The Weidt Group, Onsite Energy, and E3, Inc.

were privately-held companies and was not subject to the Sarbanes-Oxley Act of 2002, the rules and regulations of the SEC, or other corporate governance requirements applicable to public reporting companies.

As part of our ongoing integration activities, we are continuing to incorporate our controls and procedures into The Weidt Group, Onsite Energy, and E3, Inc.

and to augment our company-wide controls to reflect the risks that may be inherent in acquisitions of privately-held companies.

Other than our integration of The Weidt Group, Onsite Energy, and E3, Inc., there have been no changes in our internal control over financial reporting during the quarter ended December 27, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in our internal control over financial reporting during the quarter ended January 1, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference to Willdan Group, Inc.’s Proxy Statement for its 2020 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the Company’s 2019 fiscal year.

We have posted our Code of Ethical Conduct on our website, www.willdan.com, under the heading “Investors—Corporate Governance—Governance Documents.”

The Code of Ethical Conduct applies to our Chief Executive Officer and Chief Financial Officer.

Upon request and free of charge, we will provide any person with a copy of the Code of Ethical Conduct.

See “Item 1.

Business—Available Information.”

To the extent required by rules adopted by the SEC and the Nasdaq Stock Market, we intend to promptly disclose future amendments to certain provisions of the code, or waivers of such provisions granted to executive officers and directors on our website at www.willdan.com under “Investors—Corporate Governance.”

Below is information on each of our directors, including his or her age, Board leadership roles held, and business experience during at least the past five years.

We also indicate the name of any other public company for which each director currently serves as a director or served as a director during the past five years.

Brisbin | Chairman and Chief Executive Officer

Director Since 2007

§ CEO and Director since 2007.

Chairman since November 2016.

President from April 2007 to November 2016

§ Vice President and Consultant of AECOM Technology Corporation from 2004-2007

§ Chief Operating Officer and Executive VP at Tetra Tech, Inc.

from 1999-2004

§ Co-founder and President of PRC Environmental Management, Inc.

from 1978-1995

§ Research Associate at Argonne National Laboratory and Adjunct Professor - Illinois Institute of Technology (IIT) prior to PRC

Skills and Qualifications

Senior leadership;

industry and technical experience;

business development;

risk oversight;

financial sophistication;

talent management/compensation

Northern Illinois University.

Environmental Engineering Illinois State Technology

§ Completed Harvard Business School's Advanced Management Program

Cohen | Independent

Director Since 2015

§ Senior Vice Dean and Chief Operating Officer of the School of Professional Studies at Columbia University (CU) Directs CU's Master of Sustainability Management Program.

Professor in the Practice of Public Affairs at CU's School of International and Public Affairs.

Director of CU's Master of Public Administration Program in Environmental Science and Policy

§ Consultant to U.S.

Environmental Protection Agency for past three decades, most recent from 2005-2010

§ Served on the United States Environmental Protection Agency’s Advisory Council on environmental Policy and Technology from 2001-2004

§ Director of Columbia's Graduate Program in Public Policy and Administration from 1985 to 1998

§ Former policy analyst for U.S.

Environmental Protection Agency before joining CU in 1981

Skills and Qualifications

Government policy;

environmental policy;

senior leadership;

business development

§ BA Political Science from Franklin College;

Political Science from University of New York at Buffalo (SUNY-Buffalo)

Political Science from SUNY-Buffalo

Current Committees:

Lead Independent Director;

Chairperson Strategy, Mergers and Acquisitions Committee;

Member, Nominating & Corporate Governance Committee.

Debra Coy | Independent

Director Since 2018

§ Principal Svanda & Coy Consulting, co-founded in 2010.

§ Chair of Corporate Governance, Nominating, Environmental, and Health and Safety Committee of Global Water Resources

§ Partner XPV Water Partners from 2015-2019

§ Member of board of directors and as a member of Audit Committee of Aqua Venture Holdings Limited from February 2019 - March 2020 when the company was sold

§ Prior Managing Director, Global Water Sector Analyst covering the global water sector Janney Montgomery Scott’s Capital Markets;

Stanford Washington Research Group;

Schwab Capital Markets;

HSBC Securities;

National Westminster Bank

Skills and Qualifications

Industry and technical expertise;

financial sophistication;

audit committee financial expert;

corporate governance;

§ Advisory Executive in Residence XPV Water Partners

§ BA English and Journalism from Southern Adventist University

§ MA Journalism from University of Maryland

Current Committees:

Member Audit Committee;

Member Compensation Committee.

Other Current Public Boards:

Global Water Resources, Inc.

Holdsworth | Independent

Director Since 2009

§ Prior Vice Chairman of Corporate Development for AECOM from October 2005 to March 2009, which he joined in 1992

§ Director of the California Chamber of Commerce and the Los Angeles Economic Development Corporation

§ Former Vice Chairman of the Civil Engineering Research Foundation / International Institute;

past trustee of the California State University system and chaired Audit Committee for three consecutive years

§ Senior management positions held with International Technology Corp.

and Parsons Brinckerhoff Quade & Douglas Inc.

§ Worked in California’s Office of Transportation Planning and Research after beginning career with Peat Marwick & Mitchell

Skills and Qualifications

§ Audit committee financial expert;

talent management/compensation;

business development and M&A;

industry and technical expertise

§ California's Office of Transportation Planning and Research

English from Lake Forest College;

from the University of Pennsylvania Wharton School

Current Committees:

Chairperson Compensation Committee;

Member Strategy Mergers and Acquisitions Committee.

McEachern | Independent

Director Since 2009

§ Retired Audit Partner with Deloitte & Touche, LLP from 1985-2009

§ Staff member and manager ad Deloitte’s predecessor, Touche Ross & Co.

from 1976-1983

§ Member of Board of Directors since May 2012, Chairman of Audit Committee and Conflicts Committee and member of Compensation Committee, Reading International

§ Chairman of the Board of Directors of Community Bank in Pasadena, CA from October 2013-October 2015 and Member of the Nominating and Governance Committee and Audit Committees June 2011 – October 2015

§ Member of the Finance Committee and Board of Directors of the Methodist Hospital of Arcadia Foundation until retirement in December 2017

§ Professional Accounting Fellow with Federal Home Loan Bank Board

§ Instructor of Auditing and Accountancy at Claremont McKenna College

Skills and Qualifications

§ Audit committee financial expert;

financial sophistication;

talent management/compensation;

corporate governance

Business Administration from the University of California, Berkeley;

from the University of Southern California

Current Committees:

Chairperson Audit Committee;

Member Compensation Committee.

Other Current Public Boards:

Reading International

Vice Admiral Dennis V.

McGinn | Independent

Director Since 2017

§ Retired as Vice Admiral of United States Navy after 35 years.

Deputy Chief of Naval Operations for Warfare Requirements and Programs.

Previously commanded United States Third Fleet

§ Assistant Secretary of the Navy for Energy, Installations, and Environment from September 2013 – January 2017

§ Former President of the American Council on Renewable Energy.

§ Past member of the Steering Committee of the Energy Future Coalition, past member of the U.S.

Energy Security Council;

and past member of the Bipartisan Center Energy Board

§ Past Co-Chairman of the CAN Military Advisory Board

§ Prior International Senior Fellow at the Rocky Mountain Institute

Skills and Qualifications

§ Industry and technical expertise;

corporate governance;

business development and M&A;

senior leadership

Naval Engineering from the U.S.

Naval Academy

§ Participant, National Security Program at Harvard University's Kennedy School

Current Committees:

Member Nominating & Corporate Governance;

Member Strategy, Mergers and Acquisitions Committee

Renken | Independent

Director Since 2006

§ Managing Partner, Renken Enterprises

§ Retired Senior Partner and Chairman, Executive Committee of Southern California for Deloitte and Touche in 1992

§ Adjunct Professor (executive in residence) Marshall School of Business at the University of Southern California from 1992 to 2006

§ Served on Board of Directors, Audit Committee and Compensation Committee of East West Bancorp, Inc.

from 2000-2018

§ Served on Board of Directors and Audit Committees of Limoneira Company from 2009-2015

§ Served on Board of Directors and Audit Committees of Whittier Trust Company since 2006

Skills and Qualifications

§ Corporate governance;

public board;

audit committee financial expert;

financial sophistication;

talent management/compensation

Business Administration from the University of Arizona;

Business Administration from the University of Arizona

Current Committees:

Member Audit Committee

Mohammad Shahidehpour | Independent

Director Since 2015

§ Bodine Chair Professor in the Electrical and Computer Engineering Department at IIT.

Director of Robert W.

Galvin Center for Electricity Innovation.

Faculty member at IIT since 1983 and recipient of IIT's Excellence in Teaching Award

§ Awarded over $50 million in federal research and development grants on electricity and modernization issues

§ Founding chair of the Institute of Electrical and Electronics Engineers(IEEE) Great Lakes Symposium on Smart Grid and the New Energy Economy.

§ Editor-in-Chief of IEEE Transactions on Smart Grid Journal since 2009

§ Keynote speaker in 20 International Conferences since 2007 and counseled governments on electricity and grid modernization bills globally

Skills and Qualifications

§ Industry and technical expertise;

business development;

corporate governance;

talent management/compensation

§ IEEE Distinguished Lecturer;

Delivered over 100 invited lecturer one electricity restructuring and smart grid issues

§ Author of six books and 400 technical papers on electric power systems

Electrical Engineering from Iran's Sharif University of Technology;

in Electrical in Engineering;

from the University of Missouri

Current Committees:

Chairperson Nominating and Governance Committee;

Member Compensation Committee;

Member Strategy, Mergers and Acquisitions Committee.

Board Committees

The Board has four standing committees:

the Audit Committee, the Compensation Committee, the Nominating and Governance Committee and the Strategy, Mergers and Acquisitions Committee.

Each of our Board committees has a separate written charter that describes its purposes, membership, meeting structure, authority, and responsibilities.

These charters, which may be found in the Corporate Governance section of our website at ir.willdangroup.com/corporate-governance, are reviewed annually by the respective committee, with any recommended changes adopted upon approval by our Board.

Each of these committees regularly reports to the Board as a whole.

The following summaries identify the members of each committee as of March 16, 2021.

The composition of each committee may change from time to time.

Audit Committee

Meetings in FY 2020:

Average Attendance in FY 2020:

§ Oversee the integrity of the Company’s financial statements and financial reporting

§ Oversee compliance with legal and regulatory requirements

§ Review management letters or internal control reports and review our internal controls over financial reporting

All members satisfy the audit committee experience and independence standards required by the Nasdaq Rules and the Exchange Act and have been determined to be financially literate in accordance with the Nasdaq Rules.

§ Review q ualifications and independence of the Company’s independent registered public accounting firm

§ Review p erformance of the Company’s internal reporting and audit functions

Each member of the Audit Committee has been determined to be an "audit committee financial expert"

under applicable SEC regulations.

§ Oversee the Company’s disclosures controls and procedures and system of internal controls regarding finance, accounting, legal compliance and ethics

§ Retain and oversee the independent auditor and review and approve the scope of the audit conducted by the independent auditor

Compensation Committee

Meetings in FY 2020:

Average Attendance in FY 2020:

§ Produce an annual report on executive compensation for inclusion in the Company’s proxy statement, if and as required by applicable rules and regulations

§ Review, evaluate and make recommendations to the full Board with respect to management’s proposals regarding the Company’s overall compensation policies, and recommend performance-based incentives that support and reinforce the Company’s long-term strategic goals, organization objectives and stockholder interests.

§ Annually review and approve objectives relevant to the Chief Executive Officer’s compensation, evaluate the Chief Executive Officer’s performance in light of those objectives and set the Chief Executive Officer’s compensation level based on this evaluation.

Mohammad Shahidehpour

§ Consider and approve the selection, retention and remuneration arrangements for senior executive officers and establish, review and approve compensation plans in which any executive officer is eligible to participate.

All members satisfy the independence standards required by the Nasdaq Rules and Exchange Act.

§ Make recommendations to the Board with respect to the Company’s incentive-compensation plans and equity-based compensation plans and approve for submission to stockholders all new stock option and equity compensation plans, including amendments or supplements thereto

§ Administer the Company’s 2008 Amended and Restated Performance Incentive Plan, 2006 Stock Incentive Plan and the Amended and Restated Willdan Group, Inc.

2006 Employee Stock Purchase Plan

All members qualify as "nonemployee directors"

under Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and as "outside directors"

under Section 162(m) of the Internal Revenue Code.

§ Authorized to retain and terminate any compensation consultant engaged to assist in the evaluation of the compensation of our senior executive officers including all Named Executive Officers (as defined below)

Nominating & Corporate Governance Committee

Meetings in FY 2020:

Average Attendance in FY 2020:

Evaluate the size and composition of the Board, review and develop critieria for Board membership, and evaluate the independence of existing and prospective directors

Mohammad Shahidehpour

§ Evaluate the size and composition of the Board, review and develop criteria for Board membership, and evaluate the independence of existing and prospective directors

Vice Admiral Dennis V.

§ Actively seek and evaluate qualified individuals to become new directors as needed , establish procedures to solicit, review and recommend to the Board potential director nominees proposed by stockholders and recommend to the Board the director nominees for the annual meeting of stockholders and any special meeting at which directors are elected

§ Review the suitability of each Board member for continued service when his or her term expires and when he or she has a significant change in status

§ Take diversity considerations into account when identifing director candidates

All members satisfy the independence standards required by the Nasdaq Rules and Exchange Act

§ Evaluate the nature, structure and operations (including authority to delegate to subcommittees) of other Board committees

§ Periodically r eview and, in the Nominating & Corporate Governance Committee’s discretion, recommend to the Board changes to, the Company’s certificate of incorporation, bylaws, corporate governance policies and practices, and other present or future policies of the Company as they relate to corporate governance matters

Strategy, Mergers and Acquisitions Committee

Meetings in FY 2020:

Average Attendance in FY 2020:

§ Review with management, on a timely basis, significant financial matters of the Company and its subsidiaries, including matters relating to the Company’s capitalization, dividend policy and practices, credit ratings, cash flows, borrowing activities, and investments including mergers and acquisitions

Vice Admiral Dennis V.

Mohammad Shahidehpour

§ Review and recommend to the Board or take actions on behalf of the Board relating to the Company’s financial and strategic plans

§ Review and recommend to the Board actions relating to offerings of the Company’s debt or equity securities, purchases or disposals of treasury shares, except the repurchase of shares pursuant to approved employee benefit plans, stock splits or reclassification of shares any dividend declaration, guarantees of unconsolidated third party indebtedness and certain other financial transactions and strategies

§ In consultation with the Audit Committee, as appropriate, review periodically the Company’s risk management strategies

§ Be available to management as needed regarding various matters such as reviewing the relationships with the Company’s principal lending institutions and investment and strategic advisors

The following table sets forth the names, ages and positions of our current executive officers, as of March 16, 2021:

Chairman of the Board and Chief Executive Officer

Michael A, Bieber

Vice President and Chief Financial Officer

Chief Operating Officer

General Counsel

Chief Strategy Officer

Paul Whitelaw

Senior Vice President, Business Development

Brisbin became Chief Executive Officer on 2007 and became Chairman of the Board on 2016

Procell’s years at Willdan was calculated from the date of Willdan Group’s acquisition of Lime Energy in November 2018

Biographical information concerning Dr.

Brisbin is set forth above under the caption “Directors”

Bieber was appointed our President in November 2016.

Previously, Mr.

Bieber was Senior Vice President, Corporate Development from December 2014 to November 2016.

Previously, he served as Senior Vice President at Tetra Tech, where he served in a number of leadership roles for over 18 years.

From March 2007 to December 2014, Mr.

Bieber managed Tetra Tech’s mergers and acquisitions and investor relations functions, overseeing over fifty acquisitions.

From 2005 to 2007, Mr.

Bieber managed Tetra Tech’s corporate business development group, where he was responsible for overseeing internal business development, marketing and communications.

From January 2000 to December 2014, Mr.

Bieber also worked in Tetra Tech’s investor relations group.

From 1996 to 2000, he was a proposal manager in Tetra Tech’s corporate marketing group.

From 1994 to 1996, he served at CRC, Inc., and its successor, as a strategic business development consultant to large defense, infrastructure and environmental firms.

Prior to 1994, Mr.

Bieber worked for IT Corporation (now CB&I) where he served as project manager and engineer on government nuclear and commercial environmental projects.

Bieber holds a B.S.

degree in Civil Engineering from the Tennessee Technological University.

McLaughlin was appointed our Vice President and Chief Financial Officer, effective November 15, 2013.

McLaughlin served as our Compliance Manager from 2010 to 2013.

Prior to joining us, Ms.

McLaughlin was, from 2009 to 2010, Senior Associate at Windes & McClaughry Accountancy Corporation and, from 2004 to 2009, Senior Audit Associate at the public accounting firm KPMG LLP.

McLaughlin has a Masters in Accounting from the University of Southern California and BS from the University of Arizona.

McLaughlin is a Certified Public Accountant (CPA).

Daniel Chow was appointed our Chief Operating Officer in November 2016.

Chow also continues to serve as President and Chief Executive Officer of Willdan Energy Solutions, which position he has held since August 2016, and as President and Chief Executive Officer of Willdan Engineering, which position he has held since December 2008.

Prior to joining us, Mr.

Chow was the Vice President of AMEC Earth & Environmental, Inc., a subsidiary of AMEC plc, a global provider of high value consultancy, engineering and project management services to the energy, power and process industries, from April 2004 to December 2008.

Prior to AMEC, Mr.

Chow worked at Tetra Tech EM Inc.

(formerly PRC Environmental Management, Inc.) for over 20 years and held various senior management positions, including Vice President of US operations.

Chow received his B.Sc.

in Mechanical Engineering from Tennessee Technological University and his Master’s Degree in Environmental Engineering from Illinois Institute of Technology.

He is a registered professional engineer in the state of Illinois and Guam.

Whitelaw was appointed our Senior Vice President, Business Development in March 2018.

In this capacity, Mr.

Whitelaw leads our business development efforts.

Whitelaw has been with us since 1996 beginning with Willdan Financial Services, and taking on increasing responsibility and managerial oversight with each promotion over the last 24

Prior to his role in national strategic development, Mr.

Whitelaw was the Senior Vice President of Business Development for Willdan Energy Solutions’ western region from 2015 to 2017.

Before focusing exclusively on business development, Mr.

Whitelaw was the Regional Vice President for Willdan Energy Solutions’ western region from 2012 to 2015.

Whitelaw is a member of the Board of Directors of the California Efficiency and Demand Management Council.

Whitelaw holds a Bachelor of Arts in Chemistry from Point Loma Nazarene University and a Master’s in Business Administration from the University of California, Irvine.

Chen was appointed our General Counsel in March 2018.

Previously, Mr.

Chen was our Legal Counsel from July 2017 to March 2018.

Prior to joining us, Mr.

Chen held various management positions at Aon Corporation’s Construction Services Group for nearly 10 years.

From January 2016 to July 2017, Mr.

Chen served as Managing Director and Senior Vice President of Aon Corporation.

In this role, Mr.

Chen was responsible for the group’s Account Executive practice for the West Region.

From November 2008 to January 2016, Mr.

Chen served as Senior Vice President of Aon Corporation.

In this role, he provided risk management consultation and assisted in the evaluation and development of comprehensive risk management programs to many Top 100 Engineering-News Record clients, general contractors and multibillion-dollar commercial construction projects.

Chen received his B.A.

in International Economics from the University of California, Los Angeles and his J.D.

from Western State University, School of Law.

Procell was appointed our Chief Strategy Officer in June 2020.

Prior to his appointment, he served as President of the Lime Energy Business Unit of Willdan.

Before our acquisition of Lime Energy in 2018, Mr.

Procell served as Lime Energy’s President and CEO from 2013 to 2018, and as the President of the Utility Program Business Unit from 2009 to 2013.

He previously worked for 12 years at AECOM Technology Corporation in a variety of leadership positions, where he led the development and implementation of more than $2 billion of clean energy programs.

Prior to AECOM, Mr.

Procell held roles in engineering and project management for the energy efficiency divisions of Siemens Building Technologies and DNV GL.

Procell holds a BS in Interdisciplinary Engineering & Management from Clarkson University.

Material Litigation

There are currently no ongoing material proceedings in which any director or executive officer is a party adverse to the Company or any of its subsidiaries, or in which any director or executive officer has a material interest adverse to the Company or any of its subsidiaries.

Code of Ethics

The Company expects that all of its directors, officers and employees will maintain a high level of integrity in their dealings with and on behalf of the Company and will act in the best interests of the Company.

The Company has adopted a Code of Ethical Conduct, which provides principles of conduct and ethics for the Company’s directors, officers and employees, including employees of the Company’s subsidiaries.

This Code complies with the requirements of the Sarbanes-Oxley Act of 2002 and the Nasdaq Rules.

This Code of Ethical Conduct is available on the Company’s website at www.willdan.com under “Investors—Corporate Governance—Governance Documents” and is also available in print, without charge, to any stockholder who requests a copy by writing to our Secretary at 2401 East Katella Avenue, Suite 300, Anaheim, California 92806.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC and the Nasdaq Global Market.

Officers, directors and greater than 10% stockholders are required by the SEC’s regulations to furnish us with copies of all Section 16(a) forms they file.

Based solely on our review of the copies of such reports furnished to us, the following officers, directors and greater than 10% stockholders failed to file certain reports required by Section 16(a) of the Exchange Act on a timely basis.

In March 2020, (i) Paul M.

Whitelaw did not timely report three transactions on one Form 4 report, (ii) Michael A.

Bieber did not timely report three transactions on one Form 4 report, (iii) Thomas H.

Brisbin did not timely report two transactions on one Form 4 report, (iv) Stacy B.

McLaughlin did not timely report three transactions on one Form 4 report, (v) Daniel Chow did not timely report two transactions on one Form 4 report, and (vi) Micah H.

Chen did not timely report two transactions on one Form 4 report.

To our knowledge, based solely on our review of the copies of such reports electronically filed with the SEC, all other Section 16(a) filing requirements applicable to our executive officers, directors and greater than 10% beneficial owners were timely satisfied in fiscal 2020.

EXECUTIVE COMPENSATION

Executive Compensation Highlights

Our Board's Compensation Committee designs our executive compensation program to motivate our executives to execute our business strategies and deliver long-term stockholder value.

We pay for performance with compensation dependent on our achieving financial, share price and business performance objectives while aligning executives with the interests of our stockholders.

Our compensation program is comprised of three elements:

■ Base salary;

■ Annual cash incentive based on performance;

■ Long-term incentive compensation in the form of equity awards

FY 2020 Components of Annual and Long-Term Executive Compensation

Adjusted EBITDA

Performance Level

EPS Growth Rate

% of Target EPS

Adjusted EBITDA

Units Vesting

Growth rate achieved between performance level are interpolated on a linear basis for units vesting.

FY 2020 Target Total Direct Compensation Mix

See the Compensation Discussion and Analysis section below for a description of the manner in which these amounts are determined.

Compensation Highlights

Due to the Covid-19 pandemic and associated lack of financial predictability, executive pay was substantially cut by the executive team for several months during 2020.

Salary reductions of up to 75 percent were taken by our CEO and NEOs until the Company’s financial performance became more predictable, along with other broad cost reduction measures.

As summarized below and described in further detail in the Compensation Discussion and Analysis section below, our executive compensation governance practices are aligned with our goals and business structure, what we believe are consistent with market best practices, and aligned with our stockholders expectations.

Pay for performance:

In FY20, 80% of our CEO's target total direct compensation (TDC) and an average of 60% of our other named executive officers' (NEO's) target TDC was at risk;

80% of our CEO's target TDC and an average of 60% of our other NEO's target TDC was tied to company performance

Annually review the Compensation Committee's charter and evaluate the Compensation Committee's performance

Minimum vesting requirements

Regularly assess potential risks relating to our compensation policies and practices

Emphasize long-term performance:

In FY20, 54% of our CEO's target TDC and an average of 46% of our NEOs' target TDC was equity based and directly tied to creating shareholder value

Deliver pay that is aligned with performance (below target for weak years and above target for strong years)

Utilize an independent compensation advisor every two years to review compensation alignment with performance and for compensation comparison purposes

What We Don’t Do

Do not enter employment contract agreements with our executives other than our CEO

No re-pricing or exchange of outstanding options and PBRSUs

Provide excise tax gross-up payments in connection with change in control severance benefits

Do not grant stock options with an exercise price less than fair market value on the date of grant

Provide gross-ups to cover tax liabilities associated with executive perquisites

Promise multiyear guarantees for bonus payouts or salary increases

Permit directors, officers or employees to hedge or pledge company stock

Pay dividends or dividend equivalents on unvested equity awards

Rigorous Change in Control Definition

For purposes of long-term equity incentive and performance based restricted stock units, a “Change in Control” of the Company shall be deemed to have occurred if a consummation of any of the following events occurs:

(i) Any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company (an “Acquiring Person”), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 33 1/3% of the then outstanding voting stock of the Company;

(ii) Consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 51% of the combined voting power of the voting securities of the Company or surviving entity outstanding immediately after such merger or consolidation;

(iii) Consummation of a sale or other disposition by the Company of all or substantially all of the Company’s assets;

(iv) During any period of two (2) consecutive years (beginning on or after the date of grant), individuals who at the beginning of such period constitute the Board and any new director (other than a director who is a representative or nominee of an Acquiring Person) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of the period or whose election or nomination was previously so approved, no longer constitute a majority of the Board;

provided, however, in no event shall any acquisition of securities, a change in the composition of the Board or a merger or other consolidation pursuant to a plan of reorganization under chapter 11 of the Bankruptcy Code with respect to the Company, or a liquidation under the Bankruptcy Code, constitute a Change in Control.

In addition, a Change in Control shall not be deemed to have occurred in the event of a sale or conveyance in which the Company continues as a holding company of an entity or entities that conduct the business or businesses formerly conducted by the Company, or any transaction undertaken for the purpose of reincorporating the Company under the laws of another jurisdiction, if such transaction does not materially affect the beneficial ownership of the Company’s capital stock .

Potential Vesting Upon Change in Control

If a Change in Control occurs after the date of grant and prior to the end of any performance period, on the date of the consummation of such Change in Control, the number of PBRSUs that shall be eligible to vest (the “Contingently Vested Units”) shall be calculated as follows:

(i) with respect to the pending performance period in-progress at the time of the Change in Control, the greater of (with the EPS Units and EBITDA Units being evaluated separately and not in the aggregate) (A) the target number of EPS Units or EBITDA Units associated with such performance period and (B) the

number of EPS Units or EBITDA Units that become earned based on actual performance (assuming the last day of such performance period is the date of the consummation of such Change in Control, with the Compensation Committee to make such appropriate pro-rating adjustments to the performance metrics as shall be necessary to reflect the shortened performance period), plus (ii) with respect to any performance period(s) remaining that have not commenced, the greater of (with the EPS Units and EBITDA Units being evaluated separately and not in the aggregate) (X) the target number of EPS Units or EBITDA Units associated with such performance period(s) and (Y) the average number (measured as a percentage of target) of EPS Units or EBITDA Units that have become earned based on actual performance for all performance periods that have been completed (and are not in-progress) as of the date of the Change in Control.

Any PBRSUs that are not Contingently Vested Units as of the date of the consummation of such Change in Control shall automatically terminate without consideration as of such date.

The Contingently Vested Units shall become earned and vested on the first anniversary date of the consummation of such Change in Control, subject to the employee’s continued employment or service with us (or any successor) through such date;

provided, however, that if the employee’s employment or service is terminated (i) by us (or any successor) without “cause”, (ii) by the employee for “good reason”, or (iii) due to the employee’s death or “disability”, in each case, prior to such first anniversary of the Change in Control, the Contingently Vested Units shall become earned and vested on such termination date.

Any Contingently Vested Units that do not vest pursuant to the preceding sentence shall automatically terminate without consideration on such termination date .

Clawback Policy

The Company has a comprehensive clawback policy applicable to both short-term cash-based performance bonuses and long-term equity-based compensation.

If our Company is required to prepare an accounting restatement due to our material noncompliance with any financial reporting requirements under the securities laws, then each executive officer must return to us, or forfeit if not yet paid, a specified amount.

The amount is any payment received with respect to any short-term cash-based performance bonuses and any award under our 2008 Plan during the three-year period preceding the date on which our Company is required to prepare the accounting restatement based on the erroneous data less what would have been paid to the executive officer under the accounting restatement as determined by the Compensation Committee.

Director Compensation

In response to the Covid-19 pandemic, cash fees for all members of the Board of Directors was suspended, among other broad cost cutting measures.

The suspension was lifted in the third quarter of 2020.

The following table provides information concerning the compensation for services of our nonemployee directors during FY 2020.

Brisbin is a Named Executive Officer and his compensation is presented below under “Executive Compensation” in the Summary Compensation Table and related explanatory tables.

Brisbin is not entitled to additional compensation for his services as a director.

The majority of the compensation provided to nonemployee directors is delivered in equity to align director interests with those of our stockholders.

Fees Earned or

Paid in Cash ($)

Awards (1), (2) ($)

Compensation ($)

Mohammad Shahidehpour

(1) The amounts reported under “Stock Awards” above represent the aggregate grant date fair value of restricted stock awards granted to Non-Employee Directors during fiscal 2020 (disregarding any estimate of forfeitures related to service-based vesting conditions).

For a discussion of the assumptions and methodologies used to calculate the amounts reported in this column, please see the discussion of restricted stock awards contained in Note 10 (Shareholders’ Equity) to our consolidated financial statements above.

(2) As of January 1, 2021, the following Non-Employee Directors held the following number of outstanding restricted stock awards:

Cohen, Holdsworth, McEachern, Renken and Shahidehpour each held 4,966 shares of restricted stock, of which (i) 1,913 shares of restricted stock vest on June 13, 2021 and (ii) 3,053 shares of restricted stock vest in two substantially equal installments on each of June 11, 2021 and June 11, 2022.

McGinn held 5,120 shares of restricted stock, of which (i) 2,067 shares of restricted stock vest on June 13, 2021 and (ii) 3,053 shares of restricted stock vest in substantially equal installments on each of June 11, 2021 and June 11, 2022.

Coy held 5,232 shares of restricted stock, of which (i) 2,179 shares of restricted stock vest on June 13, 2021 and (ii) 3,053 shares of restricted stock vest in two substantially equal installments on each of June 11, 2021 and June 11, 2022.

Annual Retainer and Meeting Fees

In response to the Covid-19 pandemic, cash fees for our nonemployee directors were suspended for a portion of fiscal 2020, resulting in a reduction of 50% of the annual fees for independent directors.

This suspension lifted for the fourth fiscal quarter of 2020.

As a result, the cash fees for the second and third quarter meetings were withheld while the fourth quarter of fiscal 2020 and the first quarter of fiscal 2021 were paid in fiscal year 2020.

The following table sets forth the schedule of annual retainers and meeting fees for each Non-Employee Director in effect during FY 2020.

Type of Fee (1)

Dollar Amount

Annual Board Retainer

Additional Annual Retainer to Lead Director

Additional Annual Retainer to Chair of Audit Committee

Additional Annual Retainer to Chair of Compensation Committee

Additional Annual Retainer to Chair of Strategy, Mergers and Acquisitions Committee

Additional Annual Retainer to Chair of Nominating and Governance Committee

Additional Annual Retainer to Member of Audit Committee

Additional Annual Retainer to Member of Compensation Committee

Additional Annual Retainer to Member of Strategy, Mergers and Acquisitions Committee

Additional Annual Retainer to Member of Nominating and Governance Committee

Additional Daily Fee for Attendance at Board Meetings (2)

Additional Daily Fee for Attendance at Committee Meetings (2)

(1) The Willis Towers Watson report indicated that the compensation for Willdan directors is 10% below the median of the peer group.

(2) Directors only receive one fee for meetings per day after a minimum of:

(i) 4 Board meetings, (ii) 6 Audit Committee meetings or (iii) 5 Compensation Committee, Nominating and Governance Committee or Strategy, Mergers and Acquisitions Committee meetings.

Compensation for Non-Employee Directors during FY 2020 generally consisted of an annual retainer, fees for attending meetings, fees for work related to board committees and a restricted stock grant award.

All Non-Employee Directors are also reimbursed for out-of-pocket expenses they incur serving as directors.

Restricted Stock Awards

In June 2020, Messrs.

Cohen, Conway, Holdsworth, McEachern, McGinn, Renken, and Shahidehpour and Ms.

Coy were granted a restricted stock award of 3,053 shares under the 2008 Plan.

Each restricted stock award granted to our Non-Employee Directors in fiscal 2020 is subject to a two year vesting schedule, with 50% of the award vesting on each of the first and second anniversaries of the grant date, subject in each case to the Non-Employee Director’s continued service through the applicable vesting date.

Executive Compensation

Compensation Discussion and Analysis

In response to the Covid-19 pandemic, senior management, including the named executive officers below took up to a 75% cut in salary.

The salary reduction was restored at the end of July 2020.

This section describes each of the material elements of compensation awarded to, earned by, or paid to our executive officers identified in the “Summary Compensation Table,” whom we refer to in this section as our “Named Executive Officers.” This section also describes the role and involvement of various parties in our executive compensation analysis and decisions, and provides a discussion of the process and rationale for the decisions of our Compensation Committee to compensate our Named Executive Officers with specific types and amounts of compensation.

2020 Named Executive Officers

Our Named Executive Officers (NEOs) for 2020 were:

Chairman of the Board and Chief Executive Officer

Vice President and Chief Financial Officer

Chief Operating Officer

Chief Strategy Officer

Financial Highlights

Record $47 million generated from cash flow from operations in 2020

Awarded ~$150 million in contract revenue per year of California Investor Owned Utility Contracts

Proactive cost management at the onset of the Covid-19 pandemic to preserve profitability

During 2020, we believe we achieved important operational performance results and we proved that we could acquire new capabilities with acquisitions, combine and strategically cross sell those new capabilities and experience, and then win what we believe are the largest most complex contracts in our industry.

We believe our growth model is repeatable and durable, so we plan to continue adding complimentary skills to catalyze organic growth continuing on our growth trajectory that we have accomplished over the past four years, a period during which we have increased our stock price from $22.86 per share at the end of our 2016 fiscal year to $41.01 at the end of our 2020 fiscal year, an increase of approximately 79.4%.

For fiscal year 2020, our stock price increased 31.2%.

During 2020, we generated $47 million in cash flow from operations, a Company record.

At the onset of the Covid-19 pandemic, we were proactive and responded quickly on a cost management perspective to preserve profitability while continuing to compassionately manage our team of employees for their hard work in the most trying times.

Willdan serves one of the most exciting markets in the world at one of the most exciting times.

A cleaner, low carbon energy cycle is transforming our electric grid, buildings, industrial production and transportation networks.

Willdan helps these clients evaluate new technical advances and implement cost effective solutions.

We were awarded California Investor Owned Utility (“IOU”) contracts that, on a weighted average basis, represent approximately $150 million per year in incremental contract revenue in the next three to five years if we successfully execute the work.

2020 Say-on-Pay Vote and Executive Compensation Program

At the 2020 Annual Meeting, over 54% of our stockholders approved our fiscal year 2019 executive compensation.

In recent years, including fiscal year 2020, we have taken stockholder feedback into consideration as we have discussed and implemented our compensation design changes and enhanced our disclosures.

Proxy Advisor and /or Shareholder Issue

Shareholder Feedback

Resulting Changes From WLDN

Clawback Policies

No clawback policy disclosed;

clawback was not applicable to both cash

Governance best practices include disclosure of policy and clawback policy gives

Disclosed rigorous equity clawback policy;

adopted cash bonus clawback policy

and equity bonus compensation

company ability to claw back both cash and equity

due to shareholder feedback

Annual Incentive Plan

Company is silent on metrics, goals and payout formula related to incentive plan and reasoning for changes to payout levels

Provide additional disclosure on the short-term compensation metrics to explain inconsistent payouts and reasoning for changes in annual payout levels

Disclosed metrics, goals, bonus pool payout formula to provide rigor linking pay with performance

Change in Control

No rigorous change in control policy disclosed

Improve change in control disclosures

Disclosed our change in control policies and practices

Stock Ownership Guidelines

No stock ownership requirements, including executive and non-employee directors

Encourage the Company to require stock ownership guidelines for executive management and non-employee directors of the Company

In 2020, WLDN Compensation Committee adopted management stock ownership guidelines with compliance to be within three years.

Guideline includes 5x of base salary CEO;

3x base salary President;

1x base salary remaining Section 16 Officers

Peer Group Disclosure

No compensation peer group disclosed

Enhance disclosure around compensation peer group selected for compensation and the factors considered in their selection

Disclosed our compensation peer group which has been provided every two years by a third-party consultant hired by the Compensation Committee

As a result of a 54% level of support for our “say-on-pay” proposal, we conducted a stockholder engagement program, and proactively contacted our largest institutional shareholders, representing over 40% of our then-outstanding shares.

After soliciting shareholders’ views on our corporate governance and executive compensation programs, we took several important actions based on shareholders’ feedback that are described in more detail in the Role of Shareholder Say-on-Pay Votes section below.

These actions included enhancing our disclosures related to our clawback policy, enhancing our disclosure regarding the change in control definition that applies to outstanding PBRSU awards and continuing our practice of generally granting Named Executive Officer long term incentive awards derived in PBRSUs.

We believe these actions have addressed the concerns shareholders expressed in response to our 2020 “say-on-pay” proposal.

Based on shareholder feedback during 2020, the Compensation Committee adopted management stock ownership guidelines and now requires all officers and directors to be compliant within a three-year period of accepting their position.

All executive officers and directors are currently in compliance with this guideline as of March 16, 2021.

Years to Achieve Compliance

In Compliance as of 3/16/2021?

Section 16 Officers

Non-employee Directors

Minimum holding $115,000 in stock value

Not Applicable

By end of three years of service

Executive Compensation Program Objectives and Philosophy

Executive pay leveraged more to performance and long-term incentives versus peer group median

Align executive’s pay with long term interests of

Our executive compensation program’s primary objective is aligning our executives’ pay with the interests of our stockholders.

The program is designed to provide a lower base compensation versus the peer group median combined with a higher percentage of compensation at risk, and a higher percentage of compensation derived in equity.

Cash bonuses and long-term equity incentives are the elements of our executive compensation program that are “at risk”, are designed to reward performance and align with shareholders in creating long-term value.

Overall, we target to reward short and long-term financial, strategic and operational performance, while facilitating the Company’s need to attract, motivate, develop and retain highly-qualified executives who are critical to our long-term success.

Our Company’s short-term bonus pool is formula driven and is funded based on the following factors:

25% of earnings greater than 6% of contract revenue;

earnings are defined as operating earnings before interest, taxes, amortization and bonus;

◾ Organic growth factor;

The organic growth factor is defined as one plus/minus 2x and the organic growth rate where the organic growth rate is expressed as organic revenue growth year over year.

For instance, if organic growth rate is 20%, the organic growth factor would be 1+(2x0.2) = 1.40;

◾ Day sales outstanding (DSO) factor;

the DSO factor is calculated based on a mid-point of 70 days and is expressed as one minus the percentage lower or higher than 70 days.

If DSO was 65 days, the DSO would be 1-((65-70)/70) = 1.07 while if the DSO was 85 days, the DSO factor would be 1-((85-70)/70) = 0.79.

Our executive compensation philosophy is to:

■ Align the interests of our executives with those of the stockholders;

■ Attract, motivate, reward, and retain the top contributors upon whom, in large part, our success depends;

■ Be competitive with compensation programs for companies of similar size and complexity with whom we compete for talent, including direct competitors;

■ Provide compensation based upon the short-term and long-term performance of both the individual executive and the Company;

■ Strengthen the relationship between pay and performance by emphasizing variable, at-risk compensation that is dependent upon the successful achievement of specified corporate and individual goals.

In structuring our executive compensation arrangements, our Compensation Committee considers how each compensation element fits within our overall philosophy of long-term shareholder value.

Our compensation program is comprised of three elements:

■ Base salary - primarily intended to attract and retain top contributors.

We believe that in order to attract and retain top executives, we need to provide our executive officers with compensation levels that reward their continued service and are competitive;

■ Annual cash bonus - the performance cash bonuses are primarily intended to motivate the Named Executive Officers to achieve our short-term performance objectives.

The cash bonus pool is formula driven based on organic growth, earnings and cash flow metrics;

◾ Long-term equity-based incentive compensation - primarily intended to align our Named Executive Officers’ long-term interests with shareholders’ long-term interests.

We also provide 401(k) retirement benefits and, in some cases, severance benefits to our executive officers, including the NEOs.

As described in more detail below, our Compensation Committee determined to introduce performance-based equity awards into our executive compensation program in 2018.

Starting with the year 2019, nearly all of the long-term equity incentive awards granted to our Named Executive Officers were granted in the form of performance-based restricted stock units (“PBRSUs”), other than to Mr.

Procell, who was also granted time-based long-term incentive awards.

Under our PBRSU design, 50% of each award will vest based upon our Adjusted EBITDA performance over a two-year performance period (“EBITDA Units”), and the remaining 50% of each award will vest based upon our adjusted diluted earnings per share performance over two-year performance period (“EPS Units”).

We believe Adjusted EBITDA and earnings per share-based metrics are critical to measuring the growth in our business, and we believe that successful Adjusted EBITDA and earnings per share growth will lead to the creation of long-term value for our shareholders.

We must achieve a 10% growth rate for the threshold number of EBITDA Units and EPS Units to vest for any performance year.

The Compensation Committee determined to move away from its historical practice of granting only time-based equity awards and introduced the PBRSUs in 2018 in order to further align the interests of our executives with those of shareholders by strengthening the relationship between executive pay and our performance against two critical performance metrics that we believe will drive value creation for our shareholders.

Role of the Compensation Committee

Pursuant to its charter, the Compensation Committee of our Board has the authority to determine the amount of compensation given to each of the Named Executive Officers.

The Compensation Committee implements our executive compensation philosophy, and is responsible for administering our equity compensation plans, including approving grants of awards under the plans.

In performing its duties, the Compensation Committee is authorized to consider the recommendations of our Chief Executive Officer when determining the compensation of the other Named Executive Officers.

All of the members of the Compensation Committee are independent directors.

The elements of our executive compensation program were each approved by the Compensation Committee.

None of the Named Executive Officers is a member of the Compensation Committee or, except for recommendations made by our Chief Executive Officer with respect to the compensation of the other Named Executive Officers, had any role in determining the compensation of the Named Executive Officers.

The Compensation Committee is authorized to retain and terminate any compensation consultant engaged to assist in the evaluation of the compensation of our senior executive officers (including all of the Named Executive Officers).

In 2020, the Compensation Committee hired Willis Towers Watson to evaluate and compare the compensation practices for executive management and the Board.

The Compensation Committee was directly responsible for the appointment, compensation and oversight of Willis Towers Watson and, at the time of their appointment, assessed the independence of Willis Towers Watson pursuant to applicable SEC and Nasdaq Rules and concluded that no conflict of interest existed with respect to such consultant’s services to the Compensation Committee.

Willis Towers Watson reported only to the Compensation Committee and did not perform any other services for us.

Compensation Peer Group

As part of their work for the Compensation Committee, Willis Towers Watson provided the Compensation Committee with general compensation studies in 2017 and 2018 and again in 2020.

These studies used publicly disclosed data from companies similar to Willdan considering various metrics, including annual revenue, operating results, market capitalization, and business complexity.

In conjunction with their 2020 study, Willis Towers Watson advised the Compensation Committee regarding the construction of our customized compensation peer group provided in the table below.

COMPENSATION PEER GROUP

§ Ameresco, Inc.

§ Charah Solutions, Inc.

§ Cypress Environmental Partners, L.P.

§ Exponent, Inc.

§ Hill International, Inc.

§ Limbach Holdings, Inc.

§ NV5 Global, Inc.

§ RCM Technologies, Inc.

§ Resources Connection, Inc.

The Compensation Committee then compared the compensation of Willdan’s executive management with similarly situated executives of those companies and used this comparative compensation information as a reference point when setting compensation levels for 2020.

In setting compensation levels for 2020, our Compensation Committee also considered each executive’s level of responsibility and performance for the overall operations of the Company, historical Company practices, long-term market trends, internal pay equity, expectations regarding the individual’s future contributions, our own performance and budget considerations.

Role of Shareholder Say-on-Pay Votes

Responsive to Shareholder Feedback

Disclosure of our rigorous equity clawback policy

Disclosure of our change in control policies and practices

The Company annually offers shareholders the opportunity to cast an advisory vote on our executive compensation program.

This annual vote is known as the “say-on-pay” proposal.

At our annual general meeting in 2020, approximately 54% of votes cast were in favor of our executive compensation program in 2019.

We value our stockholders' opinions about our governance policies and practices, and we actively solicit input through our stockholder engagement program.

In advance of the Annual Meeting, we proactively contacted our largest institutional stockholders, representing a majority of our then-outstanding shares, to solicit their views on our corporate governance and executive compensation programs.

We welcome feedback on our corporate governance program that this active and ongoing engagement with stockholders provides.

Executive Compensation Program Elements

Base Salaries

We pay each Named Executive Officer a base salary to provide each executive with a minimum, fixed level of cash compensation.

Decisions regarding increases to base salaries are made at the discretion of our Compensation Committee.

In reviewing base salary levels for our Named Executive Officers, our Compensation Committee primarily considers and assesses the following factors:

the base salaries paid by our peer group companies to their similarly situated executives, each Named Executive Officer’s current base salary, their job responsibilities, leadership and experience, value to our Company and the recommendations of our President and Chief Executive Officer (other than with respect to his own compensation).

In early March 2020, the Compensation Committee approved base salary increases for Dr.

McLaughlin, and Mr.

Chow to recognize their leadership and experience and incorporate the recommendations from a third party compensation consultant benchmarking study.

In late March, due to the Covid-19 pandemic and as previously described, salaries were reduced up to 75% for NEO’s.

Thus, the base salaries at the end of 2020 described in the table are higher than the base salaries actually paid to NEO’s in 2020.

Named Executive Officer

Base Salary at end of 2019

Base Salary at end of 2020

Annual Bonuses

We determined to award performance-based cash bonuses to all of our Named Executive Officers, except Mr.

Procell, in 2020.

The Compensation Committee determined the amount of each executive’s bonus at its discretion, based on peer group comparable data, past practices and individual performance.

The compensation bonus pool is funded based 100% on Company performance related to business metrics and the formula outlined above.

In determining the amount of each executive’s 2020 bonus, the Compensation Committee used third party benchmarking studies and primarily considered bonus pool size limitations, each executive’s level of responsibility and performance, contribution to the success of the business, strategic impact, retention risk, internal pay equity, and the recommendations of our Chief Executive Officer (other than with respect to his own compensation) in allocating the bonus pool.

The Compensation Committee also evaluated each executive’s individual performance during 2020 and efforts to lead the Company through the challenges of the Covid-19 pandemic (with input from our CEO for the other NEOs).

In addition, the Compensation Committee hired Willis Towers Watson, a third-party compensation consultant to benchmark total direct compensation for Mr.

Brisbin and Mr.

Long-Term Equity Awards

Our long-term equity-based incentive plan permits us to award all types of incentive awards, including incentive or nonqualified options, stock appreciation rights, stock bonuses, restricted stock, stock units, performance stock, phantom stock, dividend equivalents and other forms of awards.

As noted above, our Compensation Committee determined to introduce PBRSUs into our executive compensation program in 2018.

Starting with 2019, nearly all of the long-term equity incentive awards granted to our Named Executive Officers were granted in the form of PBRSUs (other than to Mr.

Procell, who was also granted time-based long-term incentive awards that vest over three years in annual installments).

In determining the level of awards granted to each of the Named Executive Officers, our Compensation Committee primarily took into account the executive’s level of responsibility and performance for the overall operations of the Company, internal pay equity, historical Company practices, each executive’s performance, and budget considerations.

The Compensation Committee also considered the compensation paid by our peer group companies described above to similarly situated executives.

As described above, under our PBRSU design, 50% of each award will vest based upon our Adjusted EBITDA performance over a two-year performance period (“EBITDA Units”), and the remaining 50% of each award will vest based upon our earnings per share performance over a two-year performance period (“EPS Units”).

The chart below shows the adjusted EBITDA growth rate that we must achieve in order to satisfy the threshold, target and maximum performance levels for each year in the performance period (each, a “Performance Year”), and the

corresponding percentage of the target number of EBITDA Units related to that Performance Year eligible to vest.

Results between the points in the chart will be interpolated on a linear basis.

If the threshold performance level is not achieved for any Performance Year, all of the EBITDA Units related to that Performance Year will be forfeited.

Adjusted EBITDA Growth Rate

% of Target EBITDA Units

Performance Level

Growth rate achieved between performance levels is interpolated on a linear basis for EBITDA Unit vesting.

In general, an equal number of EBITDA Units are eligible to vest based on the Company’s adjusted EBITDA growth as of the end of each Performance Year, generally subject to the executive’s continued employment through the end of the applicable Performance Year.

For purposes of the EBITDA Units, adjusted EBITDA means the Company’s net income (loss) for the applicable Performance Year as determined in accordance with GAAP, plus (1) interest expense (loss), (2) income tax expense (benefit), (3) stock-based compensation, (4) interest accretion, (5) depreciation and amortization, and (6) plus or minus the effect of any extraordinary item or extraordinary transaction.

For purposes of setting the adjusted annual EBITDA goals, the baseline was the adjusted EBITDA forecast for 2017 of $20,100,000, compounded each year since then.

For the 2020 Performance Year, we achieved an actual EBITDA growth rate in excess of 10% but below 20%, which resulted in each NEO being vested 94% of his or her target number of EBITDA Units for the 2020 Performance Year.

In general, an equal number of EPS Units are eligible to vest based on the Company’s EPS growth as of the end of each Performance Year, generally subject to the executive’s continued employment through the end of the applicable Performance Year.

For purposes of the EPS Units, EPS means the Company’s trailing three year numerical average diluted earnings per share for the applicable Performance Year as determined in accordance with GAAP, before stock compensation expense net of tax, plus or minus the effect of any extraordinary item or extraordinary transaction.

The chart below shows the EPS growth rate that we must achieve in order to satisfy the threshold, target and maximum performance levels for each Performance Year, and the corresponding percentage of the target number of EPS Units related to that Performance Year eligible to vest.

Results between the points in the chart will be interpolated on a linear basis.

If the threshold performance level is not achieved for any Performance Year, all of the EPS Units related to that Performance Year will be forfeited.

EPS Growth Rate

% of Target EPS Units

Performance Level

Growth rate achieved between performance levels is interpolated on a linear basis for EPS Unit vesting

For the 2020 Performance Year, we achieved an actual EPS growth rate in excess of 30%, which resulted in each NEO being vested in 250% of his or her target number of EPS Units for the 2020 Performance Year.

Brisbin and Mr.

Chow are employed pursuant to employment agreements or offer letters that provide specified levels of severance benefits if the executive’s employment is terminated by us without “cause” or, in the case of Dr.

Brisbin, by the executive for a “good reason.” The level of each executive’s severance benefits was negotiated and established in connection with the executive’s entry into his employment agreement or offer letter, and has been determined to be appropriate by the Compensation Committee based on the executive’s level of responsibility and performance for the overall operations of the Company, long-term market trends, and budget considerations.

benefits for Dr.

Brisbin are based on a multiple of “2x” his base salary and severance benefits for Mr.

Chow are based on a multiple of “0.25x” base salary (or three months of base salary in total).

Severance benefits for Dr.

Brisbin also includes payment of the executive’s target bonus for the year of termination of employment.

McLaughlin, Mr.

Bieber and Mr.

Procell are not party to employment agreements or offer letters with us that provide for the payment of severance benefits for any type of termination of employment.

None of our Named Executive Officers is entitled to receive any automatic “single trigger” equity acceleration, as our equity awards will only vest in connection with a change in control of the Company if they are not substituted or assumed in connection with the transaction.

Please see the introductory section above for the definition of a change in control that applies to our equity awards, which we believe is a rigorous change in control definition.

The treatment of PBRSUs in a change in control is also described above.

No Named Executive Officer is entitled to receive a “gross-up” or similar payment for any excise taxes that may become payable in connection with a change in control pursuant to Sections 280G and 4999 of the Code.

Instead, our 2008 Performance Incentive Plan generally provides that awards or payments under the 2008 Plan are automatically “cut back” in such circumstances in order to avoid triggering these excise taxes.

Other Benefits

While employed, we provide our Named Executive Officers with retirement benefits under our 401(k) Plan, participation in our medical, dental and insurance programs and vacation and other holiday pay, all in accordance with the terms of such plans and programs in effect from time to time and substantially on the same terms as those generally offered to our other employees.

Policy with Respect to Section 162(m)

Section 162(m) of the Code generally prohibits a publicly-held company from deducting compensation paid to a current or former Named Executive Officer that exceeds $1.0 million during the tax year.

Certain awards granted before November 2, 2017 that were based upon attaining pre-established performance measures that were set by the Compensation Committee under a plan approved by our shareholders, as well as amounts payable to former executives pursuant to a written binding contract that was in effect on November 2, 2017, may qualify for an exception to the $1.0 million deductibility limit.

As one of the factors in its consideration of compensation matters, our Compensation Committee notes this deductibility limitation.

However, our Compensation Committee has the flexibility to take any compensation-related actions that it determines are in the best interests of the Company and our shareholders, including awarding compensation that may not be deductible for tax purposes.

There can be no assurance that any compensation will in fact be deductible as a result of the limitations under Section 162(m).

Compensation Committee Interlocks and Insider Participation

The Board’s Compensation Committee consists of Ms.

Coy and Messrs.

Holdsworth, McEachern and Shahidehpour.

None of the members of our Compensation Committee has at any time been one of our officers or employees, nor has any member of our Compensation Committee had any relationship requiring disclosure under Item 404 of Regulation S-K.

None of our executive officers serves, or in the past year has served, as a member of the board of directors or the compensation committee of any entity that has one or more executive officers who serve on our Board or Compensation Committee

Compensation Committee Report

The Compensation Committee of the Board has reviewed and discussed with management the disclosures contained in the Compensation Discussion and Analysis section of this Proxy Statement.

Based upon this review and discussion, the

Compensation Committee recommended to the Board that the Compensation Discussion and Analysis section be included in this Proxy Statement.

Compensation Committee of the Board

Holdsworth (Chair)

Mohammad Shahidehpour

The foregoing report of the Compensation Committee does not constitute soliciting material and shall not be deemed filed, incorporated by reference into or a part of any other filing by the Company (including any future filings) under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company specifically incorporates such report by reference therein.

Compensation of Executive Officers

Summary Compensation Table – Fiscal 2020, Fiscal 2019, Fiscal 2018

The following table presents information regarding compensation during FY 2020, FY 2019, and FY 2018 of our named executive officers (the “Named Executive Officers”).

The Named Executive Officers include our principal executive officer, principal financial officer, and our three other most highly compensated executive officers.

Principal Position

Chairman of the Board

and Chief Executive Officer

Vice President and

Chief Financial Officer

Chief Operating Officer

Chief Strategy Officer

The amounts reported under “Bonus” for fiscal 2020, 2019 and 2018 include performance bonuses paid for fiscal 2020, 2019 and 2018.

The amounts reported under “Stock Awards” for fiscal 2020, 2019 and 2018 represent the aggregate grant date fair value of performance based restricted stock units granted to Named Executive Officers during fiscal 2020, 2019 and 2018 (disregarding any estimate of forfeitures related to service-based vesting conditions).

For a discussion of the assumptions and methodologies used to calculate the amounts reported in this column, please see the discussion of restricted stock awards and performance-based restricted stock units contained in Note 10 (Shareholders’ Equity) to our consolidated financial statements above.

The EBITDA Units and EPS Units are valued based on the probable outcome of the applicable performance conditions as determined on the grant date.

If we achieve the highest level of performance under the EBITDA Units and EPS Units, the total grant date fair value for the EBITDA Units and EPS Units would increase to the following amounts:

Brisbin $2,957,555;

Bieber $2,247,733;

McLaughlin $414,083;

Chow $532,348;

Procell $567,475.

The amounts reported under “Option Awards” represent the aggregate grant date fair value of option awards granted to our Named Executive Officers (disregarding any estimate of forfeitures related to service-based vesting conditions).

For a discussion of the assumptions and methodologies used to calculate the amounts reported in this column, please see the discussion of stock option awards contained in Note 10 (Shareholders’ Equity) to our consolidated financial statements above.

The amounts reported under “All Other Compensation” for fiscal 2020 and 2019 include $3,000 in matching contributions made by us for each of our Named Executive Officers and, other than Mr.

McLaughlin and Mr.

Procell, automobile allowances paid to them or use of a company vehicle.

The remaining balance of the amounts under “All Other Compensation” for Ms.

McLaughlin for 2019 represents cashing out of accumulated paid-time-off.

The amounts reported under “All Other Compensation” for 2018 include $3,000 in matching contributions made by for each of our Named Executive Officers and, other than Mr.

Bieber and Ms.

McLaughlin, automobile allowances paid to them or use of a company vehicle.

Brisbin served on the Board during each of fiscal 2020, 2019 and 2018.

As an employee-director, Dr.

Brisbin did not receive additional compensation for his services as a director.

Compensation of Named Executive Officers

The Summary Compensation Table above quantifies the value of the different forms of compensation earned by or awarded to our Named Executive Officers in each applicable fiscal year.

As described in the “Compensation Discussion and Analysis” section above, the primary elements of each Named Executive Officer’s total compensation reported in the table for 2020 are base salary, performance bonus and a long-term equity incentive award consisting of EBITDA Units and EPS Units.

Named Executive Officers also received the other benefits listed in the “All Other Compensation” column of the Summary Compensation Table, as further described in footnote (4) to the table.

The Summary Compensation Table should be read in conjunction with the “Compensation Discussion and Analysis” section above and the tables and narrative descriptions that follow.

A description of the material terms of each Named Executive Officer’s employment agreement, if any, is provided immediately following this paragraph.

Description of Employment Agreements, Salary and Bonus Amounts

On May 3, 2011, we entered into an amended and restated employment agreement with Dr.

This employment agreement provides for “at-will” employment and does not include a specified term.

This agreement provides for Dr.

Brisbin to receive a base salary and an annual incentive bonus as determined by the Compensation Committee.

The annual target bonus for Dr.

Brisbin under this agreement is 100% of his annual base salary.

Brisbin is also entitled to participate in benefit plans made available to our employees generally.

On October 29, 2008, we entered into an offer letter with Mr.

The letter provides that Mr.

Chow’s employment is on an “at-will” basis and for his initial base salary to be $205,000 per year (which has been subsequently increased to approximately $310,003 per year).

On December 17, 2014, we entered into an offer letter with Mr.

The letter provides that Mr.

Bieber’s employment is on an “at-will” basis and for his initial base salary to be $270,000 per year (which has been subsequently increased to approximately $440,003 per year).

The Company has not entered into an employment agreement or offer letter with Ms.

McLaughlin or Mr.

The provisions of these agreements relating to severance benefits following a termination of the Named Executive Officer’s employment are described below under “Potential Payments Upon Termination or Change in Control.

Grants of Plan-Based Awards in Fiscal 2020

The following table presents information regarding the equity incentive awards granted to Named Executive Officers during fiscal 2020 under the 2008 Plan.

Please see the “Compensation Discussion and Analysis” section above for a description of the material terms of the awards.

Estimated Future Payouts Under Equity

All Other Stock

Incentive Plan Awards

Grant Date Fair Value

Number of Shares

of Options Awards

Of Stock or Units

and Stock Awards

(1) Consists of 50% EBITDA Units and 50% EPS Units that vest over a period of two years subject to the achievement of the applicable performance requirements.

Procell was granted a time-based long term incentive award of 15,000 restricted shares vesting in equal annual installments over three years.

Outstanding Equity Awards at Fiscal 2020 Year-End

The following table presents information regarding the outstanding option and restricted stock or unit awards held by each Named Executive Officer as of January 1, 2021.

Options Awards

Shares, Units

Shares or Units

of Stock that

Units of Stock

That Have Not

Unexercisable

(1) These options were granted on September 4, 2018 and vest in substantially equal annual installments over three years from their grant date.

(2) These performance based restricted stock units were granted on March 6, 2018 and vest in substantially equal annual installments over four years from their grant date.

(3) These performance based restricted stock units were granted on June 13, 2019 and vest in substantially equal annual installments over two years from their grant date.

(4) These performance based restricted stock units were granted on March 2, 2020 and vest in substantially equal annual installments over two years from their grant date.

(5) These restricted stock awards were granted on June 10, 2020 and vest in substantially equal annual installments over three years from their grant date.

Option Exercises and Stock Vested in Fiscal 2020

The following table presents information regarding the options exercised by each Named Executive Officer and stock awards vested during fiscal 2020, if any.

Option Awards

Shares Acquired

Value Realized

Shares Acquired

Value Realized

(1) The amounts reported as the “Value Realized on Exercise” (if any) are determined by multiplying (i) the number of shares of common stock to which the exercise of the option related by (ii) the difference between the per-share price of the common stock on the exercise date and exercise price of the options.

(2) The amounts reported as the “Value Realized on Vesting” (if any) are determined by multiplying (i) the number of shares of common stock that vested by (ii) the per-share price of the common stock on the vesting date.

Potential Payments Upon Termination or Change in Control

Outstanding options and restricted stock and unit awards issued under our 2008 Plan will vest immediately and become fully exercisable upon a change in control of us to the extent such outstanding awards are not substituted or assumed in connection with the transaction.

In addition, the terms of the EBITDA Units and EPS Units provide that in the event a change in control occurs before the end of any Performance Year, the greater of the target number of each type of units subject to the award or the number of each type of units earned based on actual performance through the date of the change in control will become eligible to vest (with the number of units earned based on actual performance for Performance Years yet to begin measured on an average basis based on actual performance in all completed Performance Years).

Any EBITDA Units and EPS Units that become eligible to vest will vest on the first anniversary of the date of the change in control, or earlier upon a Named Executive Officer’s termination of employment by the Company without cause, by the executive for a “good reason,” or due to an executive’s death or disability.

Upon a Named Executive Officer’s death or disability at any time (whether or not in connection with a change in control), the executive will become vested in the greater of the target number of each type of units subject to the award or the number of each type of units earned based on actual performance for the then in-progress Performance Year, and in the target number of each type of units for all Performance Years that have yet to begin.

The employment agreement entered into with Dr.

Brisbin provides for severance benefits upon certain terminations of his employment with us.

If such Named Executive Officer’s employment is terminated by us without cause or by the Named Executive Officer for good reason (as such terms are defined in his employment agreement), the Named Executive Officer will be entitled to a severance benefit equal to two times his base salary at the annualized rate then in effect, paid in 24 equal installments.

In addition, the Named Executive Officer would be entitled to payment of his target bonus for the year in which such a termination of employment occurs.

The Named Executive Officer’s right to receive the severance benefits described above is contingent on the executive providing a general release of claims in favor of the Company and complying with certain non-solicitation and other restrictive covenants set forth in his employment agreement.

Chow’s offer letter provides that if his employment is terminated by the Company without cause, he will be entitled to a lump sum severance payment equal to three months of his base salary.

Bieber’s offer letter does not provide for any additional severance benefits.

As noted above, Ms.

McLaughlin and Mr.

Procell are not party to an employment agreement or offer letter with the Company.

The following table sets forth the estimated payments and benefits that would be provided to each Named Executive Officer in the event the Named Executive Officer’s employment is terminated as described above.

In accordance with applicable SEC disclosure rules, these estimates assume a termination date of January 1, 2020.

Continued Health

Acceleration (1)

Represents the value of the actual number of EBITDA Units and EPS Units earned for the 2020 Performance Year, and the value of the target number of EBITDA Units and EPS Units for all future Performance Years.

The value of the EBITDA Units and EPS Units is based on the $41.70 closing price of our common stock on December 31, 2020.

Pay Ratio Disclosure

The 2020 annual total compensation of the Company’s Chief Executive Officer was $2,190,963.

The 2020 annual total compensation of our median employee (excluding our Chief Executive Officer) was $59,924.

The ratio between the two amounts is 36.3.

The Company believes that the ratio of pay included above is a reasonable estimate calculated in a manner consistent with applicable SEC rules.

To determine the pay ratio, we took the following steps:

■ We identified the median employee using our employee population consisting of 1,352 employees on January 1, 2021 (excluding our Chief Executive Officer).

We identified the median employee based on gross wages paid in 2020 as reported on Form W-2.

We did not make any assumptions, adjustments or estimates with respect to gross wages paid in 2020.

■ As required under the SEC rules, after identifying our median employee, we calculated annual total compensation for both our median employee and our Chief Executive Officer using the same methodology that we used to determine our Named Executive Officers’ annual compensation for the Summary Compensation Table above.

This information is being provided for compliance purposes.

Neither the Compensation Committee nor management of the Company used the pay ratio measure in making compensation decisions.

Given the different methodologies that companies use to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

Equity Compensation Plan Information

The following table sets forth, for each of our equity compensation plans, the number of shares of common stock subject to outstanding awards, the weighted-average exercise price of outstanding options, and the number of shares remaining available for future award grants as of January 1, 2021.

Our equity compensation plans consist of our 2006 Plan, our 2008 Plan and our ESPP.

The table below is presented assuming the maximum number of shares potentially issuable under the EBITDA Units and EPS Units become vested and payable.

remaining available

for future issuance

Number of securities

to be issued upon

Weighted-average

exercise price of

outstanding options,

securities reflected

warrants and rights

in column (a))

Plan Category

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

(1) Represents 129,219 shares available for future issuance under our 2008 Plan, and 518,935 shares available for future issuance under our ESPP.

Shares available under our 2008 Plan may be used for any type of award authorized in that plan (subject to certain limitations of the plan), including stock options, stock appreciation rights, stock units, restricted stock, performance-based awards, stock bonuses and other awards payable in shares of Company common stock.

Security Ownership Information

Except as otherwise noted, the following table sets forth information as of March 12, 2020 with respect to:

(i) each person known by us to own beneficially more than 5% of the outstanding shares of our common stock, based upon Schedule 13G and Schedule 13D reports filed with the SEC, (ii) each of our directors and director nominees, (iii) each of our Named Executive Officers (as defined in Item 11.

Executive Compensation) and (iv) our directors and executive officers as a group.

Unless otherwise noted below, the address of the persons listed in the table is c/o Willdan Group, Inc., 2401 East Katella Avenue, Suite 300, Anaheim, California 92806.

The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities.

Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security or has the right to acquire such powers within 60 days.

Under SEC rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which that person has no economic interest.

Except as otherwise noted, we believe, based on the information furnished to us, that the persons named in the table below have sole voting and investment power with respect to all shares of common stock reflected as beneficially owned, subject to applicable community property laws.

All percentages in the following table are based on a total of 12,237,257 shares of common stock outstanding on March 15, 2021.

Name and Address of Stockholder

5% Stockholders

Handelsbanken Fonder AB (2)

Forager Capital Management, LLC (3)

BlackRock, Inc.

Rice Hall James & Associates, LLC (5)

Named Executive Officers and Directors

Daniel Chow (8)

Debra Coy (10)

Holdsworth (11)

McEachern (12)

McLaughlin (14)

Mohammad Shahidehpour (16)

All current Directors and Executive Officers as a group (14 persons)

* The percentage of shares beneficially owned does not exceed one percent of the Company’s outstanding stock.

(1) Beneficial ownership information is given as of December 31, 2020 and was obtained from a Schedule 13G/A filed with the SEC on February 10, 2021 by Invesco Ltd.

The principal office or business address of Invesco Ltd.

is 1555 Peachtree Street NE, Suite 1800, Atlanta GA 30309.

(2) Beneficial ownership information is given as of December 31, 2020 and was obtained from a Schedule 13G filed with the SEC on February 12, 2021 by Handelsbanken Fonder AB.

The Schedule 13G states that Handelsbanken Fonder AB has sole voting power over 962,230 shares and sole dispositive power over 962,230 shares.

The principal office or business address of Handelsbanken Fonder AB is SE-106 70, Stockholm, Sweden.

(3) Beneficial ownership information is given as of December 31, 2020 and was obtained from a Schedule 13G filed with the SEC on February 16, 2021 by Forager Capital Management, LLC.

The principal office or business address of Forager Capital Management, LLC is 2024 3 rd Ave.

N, Suite 201, Birmingham, AL 35203.

(4) Beneficial ownership information is given as of December 31, 2020 and was obtained from a Schedule 13G/A filed with the SEC on February 1, 2021 by BlackRock, Inc.

The Schedule 13G/A states that BlackRock, Inc.

has sole voting power over 746,498 shares and sole dispositive power over 746,498 shares.

The principal office or business address of BlackRock, Inc.

is 55 East 52 nd Street, New York, NY 10055.

(5) Beneficial ownership information is given as of December 31, 2020 and was obtained from a Schedule 13G/A filed with the SEC on February 16, 2021 by Rice Hall James & Associates, LLC.

The Schedule 13G/A states that Rice Hall James & Associates, LLC has sole voting power over 436,233 shares and sole dispositive power over 617,524 shares.

The principal office or business address of Rice Hall James & Associates, LLC is 600 W.

Broadway, Ste 1000, San Diego, CA 92101-3383.

(6) The 555,632 shares of common stock held directly by Dr.

Brisbin consists of 272,299 shares of common stock and 283,333 shares of common stock subject to options exercisable on or before June 19, 2021.

(7) The 283,500 shares of common stock held directly by Mr.

Bieber consists of 50,167 shares of common stock held directly by Mr.

Bieber and 233,333 shares of common stock subject to options exercisable on or before June 19, 2021.

(8) The 121,490 shares of common stock held directly by Mr.

Chow consists of 47,824 shares of common stock and 73,666 shares of common stock subject to options exercisable on or before June 19,2021.

(9) The 17,363 shares of common stock held directly by Dr.

Cohen includes 4,966 shares of restricted stock, of which (i) 1,913 shares of restricted stock vest on June 13, 2021 and (ii) 3,053 shares of restricted stock vest in two substantially equal installments on each of June 11, 2021 and June 11, 2022.

(10) The 9,504 shares of common stock held directly by Ms.

Coy includes 5,232 shares of restricted stock, of which (i) 2,179 shares of restricted stock vest on June 13, 2021 and (ii) 3,053 shares of restricted stock vest in two substantially equal installments on each of June 11, 2021 and June 11, 2022

(11) The 98,863 shares of common stock held by Mr.

Holdsworth consists of 38,175 shares of common stock held directly by Mr.

Holdsworth and 60,688 shares of common stock held by The Holdsworth Family Trust.

Holdsworth is sole trustee and a beneficiary of The Holdsworth Family Trust and has sole voting and investment control over the shares of Willdan Group, Inc.

common stock held therein.

The 38,175 shares of common stock held directly by Mr.

Holdsworth include 4,966 shares of restricted stock, of which (i) 1,913 shares of restricted stock vest on June 13, 2021 and (ii) 3,053 shares of restricted stock vest in two substantially equal installments on each of June 11, 2021 and June 11, 2022.

(12) The 98,406 shares of common stock held by Mr.

McEachern consists of 19,863 shares of common stock held directly by Mr.

McEachern and 78,543 shares of common stock held by The McEachern Family Trust.

McEachern and his wife are co-trustees and beneficiaries of The McEachern Family Trust and have shared voting and investment control over the shares of Willdan Group, Inc.

common stock held therein.

The 19,863 shares of common stock held directly by Mr.

McEachern include 4,966 shares of restricted stock, of which (i) 1,913 shares of restricted stock vest on June 13, 2021 and (ii) 3,053 shares of restricted stock vest in two substantially equal installments on each of June 11, 2021 and June 11, 2022.

(13) The 9,642 shares of common stock held directly by Mr.

McGinn includes 5,120 shares of restricted stock, of which (i) 2,067 shares of restricted stock vest on June 13, 2021 and (ii) 3,053 shares of restricted stock vest in substantially equal installments on each of June 11, 2021 and June 11, 2022.

(14) The 63,931 shares of common stock held directly by Ms.

McLaughlin consists of 15,597 shares of common stock and 48,344 shares of common stock subject to options exercisable on or before June 10, 2021.

(15) The 133,763 shares of common stock held by Mr.

Renken consists of 53,363 shares of common stock held directly by Mr.

Renken and 80,400 shares of common stock held by the LVRJC Partnership.

Renken is the managing partner of the LVRJC Partnership and has sole voting and investment control over our shares of common stock held therein.

The 53,363 shares of common stock held directly by Mr.

Renken include 4,966 shares of restricted stock, of which (i) 1,913 shares of restricted stock vest on June 13, 2021 and (ii) 3,053 shares of restricted stock vest in two substantially equal installments on each of June 11, 2021 and June 11, 2022.

(16) The 10,253 shares of common stock held directly by Dr.

Shahidehpour includes 4,966 shares of restricted stock, of which (i) 1,913 shares of restricted stock vest on June 13, 2021 and (ii) 3,053 shares of restricted stock vest in two substantially equal installments on each of June 11, 2021 and June 11, 2022.

(17) The 17,637shares of common stock held directly by Mr.

Procell consists of 15,00 shares of restricted stock that vest in three equal installments on each of June 11, 2021, June 11, 2022 and June 11, 2023.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Person Transactions

Related Person Transactions

The following provides a description of certain relationships and related transactions since the beginning of fiscal 2020 between some of our directors, executive officers and holders of 5% or more of our common stock and us or our subsidiaries and affiliates involving an amount that exceeded or may exceed $120,000 in the aggregate.

Tax Agreements .

In connection with our initial public offering in November 2006, we entered into a Tax Agreement Relating to S Corporation Distributions with each of our stockholders at the time of our initial public offering.

Pursuant to these agreements, we agreed to indemnify, defend and hold harmless each stockholder on an after-tax basis against additional income taxes, plus interest and penalties resulting from adjustments made, as a result of a final determination made by a competent tax authority, to the taxable income we reported as an S Corporation.

Such indemnification also includes any losses, costs or expenses, including reasonable attorneys’ fees, arising out of a claim for such tax liability.

In fiscal 2020, we did not incur any indemnification related expenses as a result of the Tax Agreement.

Indemnification of Officers and Directors.

We have entered into indemnification agreements with all of our current executive officers and directors.

These agreements require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us and to advance expenses reasonably incurred as a result of any proceeding against them as to which they could be indemnified.

Additionally, we may enter into indemnification agreements with any future directors or executive officers.

In fiscal 2020, we did not incur any indemnification related expenses as a result of indemnification agreements with our current executive officers and directors.

Related Person Transaction Policy

In March 2007, the Board adopted a policy addressing the Company’s procedures with respect to the review, approval and ratification of “related person transactions” that are required to be disclosed pursuant to Item 404(a) of Regulation S-K.

The policy provides that any transaction, arrangement or relationship, or any series of similar transactions, in which the Company was, is or will be a participant, the amount involved exceeds $120,000, and a “related person” (as defined in the policy) has or will have a direct or indirect material interest (each such transaction, a “Related Person Transaction”) shall be subject to review and approval or ratification by the Audit Committee.

In its review of Related Person Transactions, the Audit Committee shall review the material facts and circumstances of the transaction and shall take into account certain factors, where appropriate, based on the particular facts and circumstances, including (i) the nature of the “related person’s” interest in the transaction, (ii) the approximate dollar value of the amount involved in the Related Person Transaction, (iii) whether the transaction was taken in the Company’s ordinary course of business, (iv) whether the transaction with the “related person” is proposed to be, or was, entered into on terms no less favorable to the Company than terms that could have been reached with an unrelated third party and (v) the purpose of, and the potential benefits to the Company of, the Related Person Transaction.

No member of the Audit Committee may participate in the review, approval or ratification of a transaction with respect to which he or she is a “related person” provided that such member can be counted for purposes of a quorum and shall provide such information with respect to the transaction as may be reasonably requested by other members of the Audit Committee or the Board.

Director Independence

The Board has determined that seven of our eight current directors (all but Dr.

Brisbin) are independent pursuant to the applicable independence requirements set forth in the rules of the listing standards for the Nasdaq Global Market (the “Nasdaq Rules”) and by the SEC because they either have no relationship with the Company (other than as a Director and stockholder) or because any relationship they have with the Company is immaterial.

Under these standards of

independence, for a director to be considered independent, the director must, among other things, not be an officer or employee of the Company or its subsidiaries and the director must not have a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Brisbin, due to his employment as our Chief Executive Officer, does not qualify as independent.

PRINCIPAL ACCOUNT ING FEES AND SERVICES

Audit and Other Fees

Crowe LLP and KPMG

The following is a summary of the fees billed to us by Crowe LLP and KPMG for professional services for the fiscal years ended January 1, 2021 and December 27, 2019.

Audit-Related Fees

All Other Fees

Fees for audit services provided by Crowe LLP for fiscal 2020 and 2019 consisted of professional services for the annual audit of our consolidated financial statements and for the review of our interim condensed consolidated financial statements including quarterly reports.

Audit-Related Fees.

Fees for audit-related services provided by KPMG for fiscal 2019 consisted of professional services reasonably related to the performance of the audit of our consolidated financial statements or review of our interim condensed consolidated financial statements including quarterly reports and are not reported as audit fees.

All Other Fees.

Fees paid for any other services provided by (i) Crowe LLP for fiscal 2019 consisted of professional services reasonably related to the Company’s 2019 acquisitions.

The Company has been advised by Crowe LLP that neither Crowe LLP nor any member of Crowe LLP has any financial interest, direct or indirect, in any capacity in the Company or its subsidiaries.

The Company has been advised by KPMG that neither KPMG nor any member of KPMG has any financial interest, direct or indirect, in any capacity in the Company or its subsidiaries.

Audit Committee Pre-Approval Policy

Consistent with SEC policies regarding independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of the Company’s independent registered public accounting firm.

In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm, including audit services, audit-related services, tax services and other services.

In some cases, the full Audit Committee provides pre-approval for up to a year, related to a particular defined task or scope of work and subject to a specific budget.

During the year, circumstances may arise when it becomes necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval categories.

In those instances, the Audit Committee requires specific pre-approval before engaging the Company’s independent registered public accounting firm.

The Audit Committee may delegate pre-approval authority to one or more of its members.

The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next regularly scheduled meeting.

The Audit Committee has considered whether the provision of the services described above is compatible with maintaining the Company’s independent public accounting firm’s independence and has determined that such services have not adversely affected Crowe LLPs’ independence.

All services described in the table above under “Audit-Related Fees” and “All Other Fees” for fiscal 2019 were pre-approved by the Audit Committee.

EXHIBITS , FINANCIAL STATEMENT SCHEDULES

9 unchanged sentences

Stock Purchase Agreement, dated July 28, 2017, by and among Willdan Group, Inc., Willdan Energy Solutions, Integral Analytics, Inc., the Shareholders of Integral Analytics, Inc.

and the Sellers’

Representative (as defined therein) (portions of this exhibit have been omitted pursuant to a request for confidential treatment) (incorporated by reference to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on August 3, 2017).

and the Sellers’ Representative (as defined therein) (portions of this exhibit have been omitted pursuant to a request for confidential treatment) (incorporated by reference to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on August 3, 2017).

Amendment No.

1, dated as of August 1, 2019, to the Stock Purchase Agreement, dated as of July 28, 2017, by and among Willdan Group, Inc., Willdan Energy Solutions, Integral Analytics, Inc., the stockholders of Integral Analytics, Inc.

and the Sellers’

Representative (as defined therein) (incorporated by reference to Exhibit 2.2 to Willdan Group, Inc.’s Quarterly Report on Form 10-Q filed on November 1, 2019) .

and the Sellers’ Representative (as defined therein) (incorporated by reference to Exhibit 2.2 to Willdan Group, Inc.’s Quarterly Report on Form 10-Q filed on November 1, 2019).

Merger Agreement, dated as of October 1, 2018, by and among Willdan Energy Solutions, Luna Fruit, Inc., Lime Energy Co.

and Luna Stockholders Representative, LLC, as representative of the participating securityholders of Lime Energy Co.

(incorporated by reference to Exhibit 2.1 to Willdan Group, Inc.’s Current Report on Form 8-K filed on October 3, 2018) .

(incorporated by reference to Exhibit 2.1 to Willdan Group, Inc.’s Current Report on Form 8-K filed on October 3, 2018).

Stock Purchase Agreement, dated as of October 28, 2019, by and among Willdan Group, Inc., Willdan Energy Solutions, Energy and Environmental Economics, Inc., each of the stockholders of Energy and Environmental Economics, Inc., and Ren Orans, as seller representative of the stockholders of Energy and Environmental Economics, Inc.

(incorporated by reference to Exhibit 2.1 to Willdan Group, Inc.’s Quarterly Report on Form 10-Q filed on October 31, 2019) .

First Amended and Restated Certificate of Incorporation of Willdan Group, Inc.

(incorporated by reference to Willdan Group, Inc.’s Registration Statement on Form S-1, filed with the SEC on August 9, 2006, as amended (File No.

333-136444)) .

Amended and Restated Bylaws of Willdan Group, Inc.

(incorporated by reference to Exhibit 3.1 to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on March 8, 2018) .

(incorporated by reference to Exhibit 3.1 to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on April 16, 2020) .

Exhibit Description

Specimen Stock Certificate for shares of the Registrant’s Common Stock (incorporated by reference to Willdan Group, Inc.’s Registration Statement on Form S-1, filed with the SEC on August 9, 2006, as amended (File No.

333-136444)) .

Description of Willdan Group, Inc.’s Capital Stock.

The Company agrees to furnish to the Securities and Exchange Commission upon request a copy of each instrument with respect to issues of long-term debt of Willdan Group, Inc.

1 unchanged sentence

and its subsidiaries.

Amended and Restated Credit Agreement, dated as of June 26, 2019, by and among Willdan Group, Inc., the Guarantors (as defined therein), the Lenders (as defined therein) and BMO Harris Bank N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to Willdan Group, Inc.’s Current Report on Form 8-K filed on July 2, 2019) .

First Amendment to Amended and Restated Credit Agreement, dated as of August 15, 2019, by and among Willdan Group, Inc., the Guarantors signatory thereto, the Lenders signatory thereto and BMO Harris Bank N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to Willdan Group, Inc.’s Annual Report on Form 10-K filed on March 6, 2020).

Second Amendment to Amended and Restated Credit Agreement, dated as of November 6, 2019, by and among Willdan Group, Inc., the Guarantors signatory thereto, the Lenders signatory thereto and BMO Harris Bank N.A., as administrative agent (incorporated by reference to Exhibit 10.3 to Willdan Group, Inc.’s Annual Report on Form 10-K filed on March 6, 2020).

Third Amendment to Amended and Restated Credit Agreement, dated as of May 6, 2020, by and among Willdan Group, Inc., the Guarantors signatory thereto, the Lenders signatory thereto and BMO Harris Bank N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to Willdan Group, Inc’s Quarterly Report on Form 10-Q filed on May 8, 2020).

Security Agreement, dated as of October 1, 2018, by and among Willdan Group, Inc.

the other Debtors (as defined therein) and BMO Harris Bank N.A.

(incorporated by reference to Exhibit 10.2 to Willdan Group, Inc.’s Current Report on Form 8-K filed on October 3, 2019) .

Master Reaffirmation of and Amendment to Collateral Documents, dated as of June 26, 2019, by and among Willdan Group, Inc., the other Debtors (as defined therein) and BMO Harris Bank N.A., as administrative agent (incorporated by reference to Exhibit 10.2 to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on July 2, 2019).

(incorporated by reference to Exhibit 10.2 to Willdan Group, Inc.’s Current Report on Form 8-K filed on October 3, 2019) .

Willdan Group, Inc.

2006 Stock Incentive Plan (incorporated by reference to Willdan Group, Inc.’s Registration Statement on Form S-1, filed with the SEC on August 9, 2006, as amended (File No.

333-136444)) .

Form of Incentive Stock Option Agreement (incorporated by reference to Willdan Group, Inc.’s Registration Statement on Form S-1, filed with the SEC on August 9, 2006, as amended (File No.

333-136444)) .

Form of Non‑Qualified Stock Option Agreement (incorporated by reference to Willdan Group, Inc.’s Registration Statement on Form S-1, filed with the SEC on August 9, 2006, as amended (File No.

Form of Non-Qualified Stock Option Agreement (incorporated by reference to Willdan Group, Inc.’s Registration Statement on Form S-1, filed with the SEC on August 9, 2006, as amended (File No.

333-136444)) .

Willdan Group, Inc.

Amended and Restated 2008 Performance Incentive Plan (incorporated by reference to Exhibit 10.1 to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on June 17, 2019) .

10.10†

Amended and Restated 2008 Performance Incentive Plan (incorporated by reference to Exhibit 10.1 to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on June 17, 2019) .

Amended and Restated Willdan Group, Inc.

2006 Employee Stock Purchase Plan (incorporated by reference to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on June 9, 2017) .

10.11†

2006 Employee Stock Purchase Plan (incorporated by reference to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on June 9, 2017) .

Exhibit Description

Form of Indemnification Agreement between Willdan Group, Inc.

and its Directors and Officers (incorporated by reference to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on June 13, 2016) .

10.12†

and its Directors and Officers (incorporated by reference to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on June 13, 2016) .

Offer Letter from Willdan Group, Inc.

to Daniel Chow dated October 29, 2008 and accepted November 9, 2008 (incorporated by reference to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on December 17, 2008) .

Exhibit Description

10.13†

to Daniel Chow dated October 29, 2008 and accepted November 9, 2008 (incorporated by reference to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on December 17, 2008) .

Employment Agreement, dated as of May 3, 2011 by and between Willdan Group, Inc.

and Thomas D.

Brisbin (incorporated by reference to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on May 4, 2011) .

10.14†

Brisbin (incorporated by reference to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on May 4, 2011) .

Employment Agreement, dated as of December 17, 2014, by and between Willdan Group, Inc.

and Mike Bieber (incorporated by reference to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on January 7, 2015) .

10.15†*

Form of Performance Based Restricted Stock Unit Award Agreement.

and Mike Bieber (incorporated by reference to Willdan Group, Inc.’s Current Report on Form 8-K, filed with the SEC on January 7, 2015) .

Form of Performance Based Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.15 to Willdan Group, Inc.’s Annual Report on Form 10-K filed on March 6, 2020).

Subsidiaries of Willdan Group, Inc.

Consent of Crowe LLP .

Consent of KPMG LLP .

Power of Attorney (included on signature page hereto) .

Certification of Chief Executive Officer pursuant to Rule 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as adopted pursuant to §

302 of the Sarbanes‑Oxley Act of 2002 .

Certification of Chief Financial Officer pursuant to Rule 13a‑14(a) or 15d‑14(a) under the Securities Exchange Act of 1934, as adopted pursuant to §

302 of the Sarbanes‑Oxley Act of 2002 .

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002 .

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to § 302 of the Sarbanes-Oxley Act of 2002 .

Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.

1350, as adopted pursuant to §

906 of the Sarbanes‑Oxley Act of 2002 .

Interactive data files pursuant to Rule 405 of Regulation S‑T:

(i) the Consolidated Balance Sheets as of December 27, 2019 and December 28, 2018;

(ii) the Consolidated Statements of Comprehensive Income for each of the fiscal years in the three‑year period ended December 27, 2019;

(iii) the Consolidated Statements of Stockholders’

Equity for each of the fiscal years in the three‑year period ended December 27, 2019;

(iv) the Consolidated Statement of Cash Flows for each of the fiscal years in the three‑year period ended December 27, 2019;

and (v) the Notes to the Consolidated Financial Statements.

1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 .

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

Filed herewith.

28 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures