OTCQX: SOTK Corporate Governance

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Board of Directors

Dr. Christopher L. Coccio, Chairman of the Board & CEO

Dr. Christopher L. Coccio joined the Company as a Director in 1998 and was appointed President and Chief Executive Officer of Sono-Tek in 2001. He was appointed Chairman in 2007. From 1964 to 1996, he held various engineering, sales, marketing and management positions at General Electric Company, with P&L responsibilities for up to $100 million in sales and 500 people throughout the United States. He also won an ASME Congressional Fellowship and served with the Senate Energy Committee in 1976. His business experience includes both domestic and international markets and customers. He founded a management consulting business in 1996, and was appointed a legislative Fellow on the New York State Assembly’s Legislative Commission on Science and Technology from 1996 to 1998. From 1998 to 2001, he worked with Accumetrics Associates, Inc., a manufacturer of digital wireless telemetry systems, as Vice President of Business Development and member of the Board of Advisors. Dr. Coccio received a B.S.M.E. from Stevens Institute of Technology, an M.S.M.E. from the University of Colorado, and a Ph.D. from Rensselaer Polytechnic Institute in Chemical Engineering.

R. Stephen Harshbarger, President

Mr. Harshbarger joined Sono-Tek in 1993. He was appointed President of the Company in 2012. As President, he directs the functions of Sales, Marketing, Engineering, Service, and Manufacturing Operations. Prior to assuming his present position, Mr. Harshbarger served as Sales Engineer, World Wide Sales and Marketing Manager, VP & Director of Electronics and Advanced Energy (E&AE) and Executive VP. In his years managing the sales organization he setup a worldwide distribution and rep network in 40+ countries consisting of greater than 300 individuals, with revenue growth of greater than 300% . He has over 20 years of experience in ultrasonic coating equipment for the electronics, glass, medical device and advanced energy industries and is intimately familiar with the technical application requirements, products, markets, and customers.

Prior to joining Sono-Tek he was the Sales and Marketing Manager for Plasmaco Inc., a world leader in the development of flat panel displays. In that position he established their distribution network, participated in venture capital funding, and introduced the first flat panel technology to Wall Street trading floors.

He is a graduate of Bentley University, with a major in Finance and a minor in Marketing.

Dr. Joseph Riemer, Consultant, Retired VP Food Business

Dr. Joseph Riemer joined the Company in 2007 as Vice President of Engineering, and later that year became a Board member. Dr. Riemer holds a Ph.D. in Food Science and Technology from the Massachusetts Institute of Technology (MIT), focusing on food technology, food chemistry, biochemical analysis, and food microbiology. His experience includes seven years with Pfizer in its Adams Confectionary Division, where he was Director, Global Operations Development. Dr. Riemer has also held leading positions with several food, food ingredients, and personal care products companies. He has served in the capacities of research and development, operations, and general management. Prior to joining the Company, he was a management consultant serving clients in the food, biotech and pharmaceutical industries.

Philip Strasburg, CPA

Philip Strasburg has been a Director since 2004, and the chairman of the Audit Committee since 2005. He is a former partner at Anchin Block and Anchin, LLP and has 40 years of experience in auditing.

He was the lead partner on the Sono-Tek account from Fiscal 1994 to Fiscal 1996. Mr. Strasburg is a certified public accountant in New York State. He has a Master of Science in economics from The London School of Economics and Political Science and a Bachelors of Science degree from Lehigh University, where he majored in business administration.

Dr. Donald Mowbray

Dr. Donald F. Mowbray has been a Director since 2003. He has been an independent science consultant since 1997. He worked at the General Electric Company from 1962 to 1992 in a variety of engineering and managerial positions, followed by serving as the Manager of the General Electric Company’s Corporate Research and Development Mechanical Engineering Laboratory from 1992 to 1997. Dr. Mowbray received a B.S. in Aeronautical Engineering from the University of Minnesota in 1960, a Master of Science in Engineering Mechanics from the University of Minnesota in 1962 and a Ph.D. from Rensselaer Polytechnic Institute in Engineering Mechanics.

Eric Haskell, CPA

Eric Haskell has been a Director since 2009. He has over 30 years of experience in senior financial positions at several public and private companies. He has significant expertise in the areas of acquisitions and divestitures, strategic planning and investor relations. From 2005 to 2008, Mr. Haskell served as the Executive Vice President and Chief Financial Officer of SunCom Wireless Holdings, Inc., a company providing digital wireless communications services which was publicly traded until its merger with a wholly-owned subsidiary of T-Mobile USA, Inc. He also served as a member of SunCom’s Board of Directors from 2003 to 2007. From 1989 until April 2004, Mr. Haskell served as the Chief Financial Officer of Systems & Computer Technology Corp., a NASDAQ listed software and services corporation. Mr. Haskell received his Bachelors Degree in Business Administration from Adelphi University.

Samuel Schwartz, Emeritus Chairman of the Board

Samuel Schwartz has been a Director of the Company since 1987, and was Chairman of the Board from 1993 to 1999 and from 2001 to 2007. Prior to joining Sono-Tek, he was the Chairman and Chief Executive Officer of Krystinel Corporation, a manufacturer of ceramic magnetic components used in electronic circuitry. He received a B.Ch.E. from Rensselaer Polytechnic Institute and an M.Ch.E. from New York University.

Carol O’Donnell

Carol O’Donnell was appointed a Director of the Company in November 2018.  Ms. O’Donnell is currently the Chief Executive Officer and Chief Compliance Officer of Protégé Partners, an industry leading firm investing in and seeding smaller and emerging hedge fund managers.  Recently, she was a key member of the Protégé executive team that launched an affiliate business, MOV37, for which she also serves as Chief Executive Officer.  Prior to joining Protégé Partners, Ms. O’Donnell was the Director of Legal and Compliance with DARA Capital US, Inc., a Swiss-owned boutique registered investment advisory and wealth management firm.  She also worked at Permal Group as General Counsel and Chief Compliance Officer, and was COO and General Counsel of Framework Investment Group.  Ms. O’Donnell is qualified to practice law in the States of New York and Connecticut, and holds a JD from the Benjamin Cardozo School of Law and a BS in business and economics from Skidmore College.

Officers

Dr. Christopher L. Coccio, Chairman of the Board & CEO

Dr. Christopher L. Coccio joined the Company as a Director in 1998 and was appointed President and Chief Executive Officer of Sono-Tek in 2001. He was appointed Chairman in 2007. From 1964 to 1996, he held various engineering, sales, marketing and management positions at General Electric Company, with P&L responsibilities for up to $100 million in sales and 500 people throughout the United States. He also won an ASME Congressional Fellowship and served with the Senate Energy Committee in 1976. His business experience includes both domestic and international markets and customers. He founded a management consulting business in 1996, and was appointed a legislative Fellow on the New York State Assembly’s Legislative Commission on Science and Technology from 1996 to 1998. From 1998 to 2001, he worked with Accumetrics Associates, Inc., a manufacturer of digital wireless telemetry systems, as Vice President of Business Development and member of the Board of Advisors. Dr. Coccio received a B.S.M.E. from Stevens Institute of Technology, an M.S.M.E. from the University of Colorado, and a Ph.D. from Rensselaer Polytechnic Institute in Chemical Engineering.

R. Stephen Harshbarger, President

Mr. Harshbarger joined Sono-Tek in 1993. He was appointed President of the Company in 2012. As President, he directs the functions of Sales, Marketing, Engineering, Service, and Manufacturing Operations. Prior to assuming his present position, Mr. Harshbarger served as Sales Engineer, World Wide Sales and Marketing Manager, VP & Director of Electronics and Advanced Energy (E&AE) and Executive VP. In his years managing the sales organization he setup a worldwide distribution and rep network in 40+ countries consisting of greater than 300 individuals, with revenue growth of greater than 300% . He has over 20 years of experience in ultrasonic coating equipment for the electronics, glass, medical device and advanced energy industries and is intimately familiar with the technical application requirements, products, markets, and customers.

Prior to joining Sono-Tek he was the Sales and Marketing Manager for Plasmaco Inc., a world leader in the development of flat panel displays. In that position he established their distribution network, participated in venture capital funding, and introduced the first flat panel technology to Wall Street trading floors.

He is a graduate of Bentley University, with a major in Finance and a minor in Marketing.

Robb W. Engle, Vice President of Engineering

Robb joined Sono-Tek in 2000 as a Field Service Technician and has learned the company, its products and its customer base from the bottom up. He has a unique background blend of customer service, technical expertise and a global perspective due to his earlier experiences in Africa and South America. Robb was formally trained and certified by the U.S. Navy as a Nuclear Operator where he was recognized with an induction into the Navy League Memorial for meritorious service and the advancement of training techniques. He also served with honors on board a submarine and earned the prestigious Sub-Surface Warfare (E) Insignia. Robb has created the Sono-Tek Service Department and led the development of key products in his leadership role of our engineering resources. As Vice President of Engineering, he is in charge of the engineering department, service department, IT and Sono-Tek laboratory services.

Bennett Bruntil, Vice President, Sales & Marketing

Bennett joined Sono-Tek in 2007 as a Regional Sales Manager and served as Marketing Brand Manager from 2013 as well as Director for Sono-Tek’s Electronics & Advanced Energy Division. Bennett has filled a number of key roles in sales and management, with hands on experience in branding and product development as well. He has successfully implemented sales strategies, launched new products, and managed a diverse product line for the past several years. Prior to joining Sono-Tek Bennett was a Branch Manager in the retail banking industry and has served in several roles in banking and lending. He is a graduate of Central Connecticut State University with a major in Psychology and a concentration in Sociology.

Stephen J. Bagley, CPA, Chief Financial Officer

Mr. Bagley joined the Company as Chief Financial Officer in 2005. From 1987 to 1991 he worked in public accounting in various capacities. From 1992 to 2005, he has held various leadership positions as Controller, Chief Financial Officer and Vice President of Finance for companies with up to $45,000,000 in revenues. Mr. Bagley earned a Bachelor of Science degree from The State University of NY – College at Oneonta and an MBA from Marist College. He was licensed as a CPA in 1990. Mr. Bagley served as a Trustee of the Board of Education for the New Paltz Central School District from 2010 to 2013.

Corporate Governance Principles

Sono-Tek Corporation’s Board of Directors is divided into two classes. The Directors in each class serve for a term of two years, and until their respective successors are duly elected and qualified. The Directors are elected at the Annual Meeting by plurality vote to hold office until the Company’s Annual Meeting of Shareholders, two years hence.

The Company’s Board of Directors is currently comprised of five “independent directors”, as that term is defined under NASDAQ rules, and three directors who are not “independent directors”. The Company’s CEO and President are current employees of the Company and are therefore not considered independent. Also, a former Vice President of the Company was an employee during the past three years, and therefore is not considered independent under Nasdaq rules.

The Board believes that the service of the current Chairman of the Board as Chief Executive Officer of the Company is appropriate because it provides an important link between the Company’s management and the Board, enabling the Board to benefit from management’s views on the Company’s business while the Board performs its oversight role. Further, the Board believes that the current Chairman & CEO’s significant ownership of Sono-Tek Corporation stock aligns his interests with those of Sono-Tek’s shareholders. In addition, the Board believes that having one person serve as both Chief Executive Officer and Chairman of the Board of Directors demonstrates for the Company’s employees, strategic partners, customers and shareholders that Sono-Tek has one clear leader.

Management is responsible for Sono-Tek’s day-to-day risk management, and the Board’s role is to engage in informed oversight. The entire Board performs the risk oversight role. Sono-Tek’s Chief Executive Officer is a member of the Board of Directors, and Sono-Tek’s Chief Financial Officer regularly attends Board meetings, which helps facilitate discussions regarding risk between the Board and Sono-Tek’s senior management, as well as the exchange of risk-related information or concerns between the Board and senior management. Further, the independent directors generally meet in executive session following regularly scheduled Board meetings to voice their observations or concerns and to shape the agendas for future Board meetings.

The Board of Directors believes that, with these practices, each director has an equal stake in the Board’s actions and oversight role and equal accountability to Sono-Tek and its shareholders.

The Board of Directors holds approximatley four meetings during the fiscal year. In addition all Board members are strongly encouraged to attend the Annual Shareholders meeting. The Board of Directors has two standing committees: Audit Committee and Compensation Committee.

Shareholder Communications with the Company’s Board of Directors is expedited through mail addressed to:

Directors c/o Corporate Secretary
Sono-Tek Corporation
2012 Route 9W
Milton, NY 12547

At the direction of the Board, all mail received may be opened and screened for security purposes. Trivial items will be delivered to the Directors at the next scheduled Board meeting. Mail addressed to a particular Director will be forwarded or delivered to that Director. Mail addressed to “Board of Directors” “Outside Directors” or “Non-Management Directors” will be forwarded or delivered to the Chairman of the Board.

Code of Ethics

Purpose of Code of Ethics and Business Conduct
This Code of Ethics and Business Conduct will serve as a guide for all of our employees. We expect everyone related to Sono-Tek to always put integrity first in conducting their business activities and this guide sets the bar at the highest level.

Who Must Follow the Code?
We expect all employees, Board members, contractors, consultants, and others who may be temporarily assigned to do work or services for Sono-Tek to adhere to the Code in connection with their work for us.  We also have the same expectations of our clients and business partners.

What If I Have a Code Related Question or Concern?
If you have a question or concern don’t just sit there.  You can contact your supervisor, the HR administrator, or, if you are more comfortable to do so, you may sit down with the CFO, the COO or the CEO.

There may be instances where you are uncomfortable talking to an employee of Sono-Tek.  In those cases, you should feel free to talk to any of our independent Board members.  Their contact information is below.  All publicly traded companies are required to have a Board of Directors that includes people who are not employees of the Company and who qualify as “independent” under the Securities and Exchange Commission’s definition of that term.

Eric Haskell – ehaskell@erichaskell.com
Carol O’Donnell – cbodesq@aol.com
Don Mowbray – dmowbray@nycap.rr.com
Yossie Riemer – riemery@gmail.com
Phil Strasburg – pas1375@aol.com

No Retaliation
Sono-Tek prohibits retaliation against anyone who brings forward an issue or concern or who participates in an investigation in a possible violation of this Code, Company polices, or the law.  If you believe that you are being retaliated against, please contact Phil Strasburg, Chairman of our Audit Committee, whose contact information is included in this Code.

Conflicts of Interest
A conflict of interest occurs when your private interests interfere, or appear to interfere, in any way, with the interests of the Company. All of us should avoid conflicts of interest and circumstances that present the appearance of a conflict of interest.

When considering a course of action, ask yourself whether the action that you’re considering could create an incentive for you or appear to create an incentive to benefit yourself, your friends or family or a related business, at the expense of Sono-Tek.  If the answer is “yes” the situation is a conflict and you should avoid it.

Following are examples of areas where conflicts often arise:

  • Personal investments in businesses that are competitors, suppliers or customers of Sono-Tek.
  • Outside employment.
  • Business opportunities found through work at Sono-Tek.
  • Inventions of products related to Sono-Tek offerings.
  • Accepting gifts, entertainment and other business courtesies from companies that have business relationships with Sono-Tek.

There can be grey areas and you should consult with your supervisor if you are uncertain about whether actions constitute a conflict.

Financial Integrity and Accurate Record Keeping
This aspect of our business is a core element of a corporation and deals with more than just the accurate reporting of financial information.  The money we spend on behalf of Sono-Tek is not ours; it is the Company’s and ultimately our shareholders’.  Each person at Sono-Tek—not just those in Finance—has a role in making sure that our money is appropriately spent, our financial records are complete and accurate and internal controls are followed.  This happens every time we hire a new vendor, expense a meal, or enter into a deal on Sono-Tek’s behalf.   We all must make sure that:

  • You have proper authority where you are the signer for a transaction and that it complies with Sono-Tek policies.
  • There is proper description of transactions so that they can be properly recorded.
  • Sales and expenditures are only made consistent with Sono-Tek policies.

Financial Statements and Public Reporting
Sono-Tek’s shares are traded on the stock market which brings on a whole new level of obligations to the senior executives and, ultimately to all of our employees.  That is one of the many reasons that this Code is so important.  Certifications must be made as to the effectiveness of the system, and the integrity of the financial statements. Investors and prospective investors make their decisions on this information and have every right to expect it to be fair.

While it might appear that financial reporting or the potential for misreporting financial results is a very sophisticated matter, every employee is an integral member part of the team to ensure that Sono-Tek continues its unblemished record of the highest quality of financial reporting.  As is the case with other items in this Code, irregularities should be reported to an immediate supervisor, the CFO or CEO or, the Chairman of the Audit Committee.

Dealing with Competition
We outperform our competition fairly and honestly by developing superior products and providing the highest quality services.  We do not engage in unethical or illegal business practices such as stealing proprietary information, possessing trade secret information that was obtained without the owner’s consent or buying this type of information from past or present employees of other companies.

Never make false or misleading statements about Sono-Tek and its products and services or other companies, including competitors and their products and services. Always be accurate, complete and honest. Be sure all comparisons to competitors are substantiated. In certain countries, comparative advertising is prohibited or limited.

Contacts with competitors require extra care.  Collaborating with competitors creates risk. It is your responsibility to understand the rules that apply to such activities and to avoid prohibited subjects.

Business Entertainment and Gifts
We recognize that some business entertainment and gifts are customary business practices.    We permit that practice so long as:

  • There is no cash giving or receiving.
  • Meals or entertainment are customary, not excessive, and a member of Sono-Tek is in attendance.
  • No laws or regulations or violated.

Any questionable gift or invitation should be discussed with a supervisor, or, if appropriate, a more senior manager.

Health and Safety
We are committed to a violence-free work environment and we will not tolerate any level of violence or the threat of violence in the workplace.  Under no circumstances should anyone bring a weapon to work.

We strive to make our work environment free of contagious diseases, such as COVID-19.  We encourage any employee who is experiencing symptoms of sickness or is known to have a contagious condition to make appropriate work accommodations through his supervisor or HR.

Our position on substance abuse is simple: It is incompatible with the health and safety of our employees and we don’t permit it.  An impaired employee puts everyone at risk.  It is every person’s responsibility to report a suspected impaired person.  The Company will determine what actions will be taken including testing for substances and it will consider recommending counselling.  Sono-Tek will never tolerate an impaired person as part of the work force while they are impaired.

Sono-Tek follows strict safety practices and standards and our rules require that any accident be immediately reported.

Confidential Information
Confidential information includes our trade secrets, marketing plans, sales forecasts, proprietary software, designs, databases, personnel files and salary information, and unpublished financial data and reports, as well as any non-public information.

That information might be of use to competitors or stock manipulators or could be harmful to our customers if disclosed.  It also includes information that suppliers and customers have entrusted to us on a confidential basis.  Our employees’ obligation not to disclose confidential information is total and it continues even after employment ends.

Protection and Proper Use of Company Assets
We expect our team to treat Sono-Tek assets with the same care that they treat their own possessions.  Violating Sono-Tek’s information security policies puts Sono-Tek assets, and assets belonging to others, like client data, at risk. We should all be concerned with possible theft, fraud, waste and misuse, and report improper activity to your supervisor. If you are aware of or suspect an IT or data security issue or incident, or any loss of assets, including data, belonging to Sono-Tek or others, report it immediately to your supervisor.

Payments to Government Personnel
We may never offer or give a gift or payment, no matter how small, to a government official as part of a business dealing.  This includes loans, meals, beverages, tickets, entertainment, commemorative items, transportation, lodging, or any other goods or services of value.

In compliance with federal laws we cannot give anything of value, directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business.  The laws or customs of other countries in which we operate may be less clear.  It is our policy to comply with those laws or customs; however, if a local law or custom seems to contradict the principles described in this Code, contact our CEO or CFO for guidance.

Protecting the Environment
If your job involves processes that affect the environment, such as measuring, recording or reporting discharges and emissions to the environment or handling hazardous waste, always comply with applicable environmental regulations and permits.

Political Activity
Employees are obviously free to be involved in political activities in their personal capacities.

No political activities may be conducted on Company time or involve the use of Company resources, such as telephones, conference rooms, computers, or office supplies.  Employees should never pressure other employees to participate in campaign activity or make a personal political contribution.  Employees should not ask subordinates to assist with volunteer political activity, such as a fundraising event to be hosted in a personal residence.

No political related expenses may be made with Company funds even if they are subsequently reimbursed.

Employees interested in serving in an elected or appointed government position should advise the CEO or the CFO before seeking such a position.

Employees may not make (or agree to make) a political contribution on behalf of the Company, purchase a ticket to a political fundraising event with Company funds, or allow a political campaign or other group to use Company facilities or property.

Meetings with Government Officials and Candidates
The Company may host an event attended by a government official or candidate for public office; or purchase tickets to an event associated with or honoring a government official; or may invite a government official as a guest of the Company to attend an event sponsored by a charitable, business or trade organization.  Employees must obtain the express written approval of the CEO or CFO prior to agreeing to involvement in that type of event.

Reporting Violations of Company Rules
You should report any violation or suspected violation of this Code to the appropriate Company personnel or via the Company’s anonymous and confidential reporting procedures.  When an alleged violation of this Code, applicable laws and/or governmental regulations is reported, the Company will take appropriate action in accordance with the compliance procedures outlined in this Code.  You are expected to cooperate in internal investigations of alleged misconduct or violations of this Code or of applicable laws or regulations.  It is the Company’s policy that there be no intentional retaliation against any person who provides truthful information to a Company or law enforcement official concerning a possible violation of any law, regulation or Company policy, including this Code.

Compliance Procedures
The Company’s CEO shall be responsible for ensuring that the Code is established and effectively communicated to all employees, officers and directors. The Company’s efforts to ensure adherence to the goals and policies outlined in this Code mandate that all employees, officers and directors of the Company report suspected violations in accordance with this Code.  The Audit Committee and the Company’s independent directors will be responsible for auditing the Company’s compliance with this Code.

When an alleged violation of this Code is reported, the Company shall take prompt and appropriate action.  Employees who suspect violations of this Code should immediately inform our CEO, President, CFO and the Chairman of the Audit Committee, who shall collectively assess the situation and determine the appropriate course of action, including whom shall be responsible for investigating the alleged violation.

The CEO shall be responsible for implementing the appropriate disciplinary action in accordance with the Company’s policies and procedures for any employee who is found to have violated this Code, however, if an alleged violation is being addressed by the Audit Committee, the Audit Committee shall be responsible for determining appropriate disciplinary action, in consultation with the CEO, if appropriate.  Any violation of applicable law or any deviation from the standards embodied in this Code will result in disciplinary action, up to and including termination of employment.

In the event of a violation of this Code, the CEO, in consultation with the Audit Committee, should assess the situation to determine whether the violation demonstrates a problem that requires remedial action as to Company policies and procedures.  If a violation is being addressed by the Audit Committee, the Audit committee shall be responsible for determining appropriate remedial or corrective actions.  Such corrective action may include providing revised public disclosure, retraining Company employees, modifying Company policies and procedures, improving monitoring of compliance under existing procedures and other action necessary to detect similar non-compliant conduct and prevent it from occurring in the future.

Distribution of This Code and Acknowledgement
This Code will be distributed to all employees and each employee and new hire will acknowledge receipt and that they have read it and understand their obligations under it.  The Code will also be distributed to others working with Sono-Tek as described in the “Who Must Follow the Code?” section.

Board of Directors Nominating Process

The Board of Directors does not maintain a separate nominating committee because the Board of Directors believes that it can select prospective Director nominees by acting on the basis of a consensus of the entire Board of Directors. Accordingly, all Directors participate in the selection of candidates for nomination as Directors of the Company. The Board identifies and deliberates on the merits of candidates, based upon education, and experience in the following areas: business, scientific, legal and financial. The Board of Directors does not have a separate charter pertaining to nominations. The Board of Directors will consider nominees recommended by shareholders. No special procedure needs to be followed in submitting such recommendation.

Audit Committee and Its Charter

The Company’s Board of Directors has an Audit Committee composed of 3 members of the Board of Directors. The Board of Directors has adopted a charter for the Audit Committee which can be seen below. The “audit committee financial expert” designated by the Board is an experienced CPA. The Audit Committee is responsible for (i) selecting an independent public accountant for ratification by the stockholders, (ii) reviewing material accounting items affecting the consolidated financial statements of the Company, and (iii) reporting its findings to the Board of Directors.

The following Charter describes the responsibilities of the Sono-Tek Audit Committee:

  • Annually in advance of the annual meeting of stockholders selects the independent public accountants to audit the books, records and accounts of the Corporation and submits such selection to the stockholders for ratification or rejection at such meeting, engages the independent public accountants and ensures that the scope of the audit is sufficiently comprehensive.
  • Evaluates and, when appropriate, recommends to the Board of Directors the replacement of the independent public accountants.
  • Reviews the quality and acceptability of each material accounting item affecting the financial statements of the Corporation which, in the opinion of the independent public accountants, might receive, under generally accepted accounting principles (“GAAP”), treatment varying from the proposed for such statements and transmits to the Board of Directors the Audit Committee’s decision on such accounting items.
  • Reports to the Board on each Committee meeting (orally through its Chairman) and on a total year’s activity in written form on an annual basis.

In undertaking the above-mentioned responsibilities, the Sono-Tek Audit Committee undertakes the following activities:

  • Meets with the independent public accountants to review their proposed plan for conducting the annual audit including its scope and degree of reliance on internal controls, reviews and approves the proposed fees for the audit, and approves any required special services; and
  • Obtains from the independent public accountants a formal written Statement of Independence delineating all relationships with Sono-Tek, actively engages in a dialog with the independent public accountants with respect to any disclosed relationships or services that may affect their objectivity or independence and takes appropriate action to ensure their independence; and
  • Receives reports from the management of Sono-Tek, which include material changes in accounting policy and significant changes in the substance and format of the financial statements.

In support of its primary duty, the Audit Committee also undertakes the following responsibilities and activities:

  • Oversee the adequacy of the system of internal accounting controls of the Corporation.
    • (a) The Committee ensures itself that actual implementation of the policies of the Corporation, together with the procedures to be followed thereunder, assure the safeguarding of assets and the reliability of financial records. In this regard, the Committee reviews compliance with the Foreign Corrupt Practices Act and The Sarbanes Oxley Act. The Committee also receives reports on audit comments periodically from management, and annually from the independent public accountants, and a report on thefts and defalcations at least annually from the Chief Executive Officer and Chief Financial Officer of Sono-Tek.
    • (b) The Committee meets privately and individually with the Chief Executive Officer and Chief Financial Officer and the independent public accountants to determine that, among other items:
      • (i) no outstanding differences of opinion exist between the independent public accountants and management;
      • (ii) no material changes or modifications of accounting principles or practice exist which either the independent auditor or management wished to make and the other resisted;
      • (iii) the internal auditor, if the company has created such a function, confirms the continued encouragement and support from management; and
      • (iv) confirms that each has a right and duty of direct communication with the audit committee at any time.
  • Receive a report annually on expenses reported by the top elected officers of the corporation.
  • Review the corporation’s annual financial statements and the independent public accountants’ report thereon prior to publication of the statements.
  • Ensures the delivery of a report from the Audit Committee to the Board of Directors (the “Audit Committee Annual Report”) disclosing whether or not, with respect to prior fiscal year:
    • (i) management has reviewed the audited financial statements with the Audit Committee, including a discussion of the quality of the accounting principles as applied and significant judgments affecting the Corporation’s financial statements;
    • (ii) the independent public accountants have discussed with the Audit Committee the independent public accountants’ judgments of the quality of those principles as applied and the judgments referenced in (i) above under the circumstances;
    • (iii) the members of Audit Committee have discussed among themselves, without management or the independent public accountants present, the information disclosed to the Audit Committee, in (i) and (ii) above; and
    • (iv) the Audit Committee, in reliance on review and discussions conducted with management and the independent public accountants pursuant to (i) and (ii) above, is satisfied that the Corporation’s financial statements are fairly presented in conformity with Generally Accepted Accounting Principles (GAAP) in all material respects. Additionally, the Audit Committee shall ensure that the Annual Report of the Audit Committee is included in the Corporation’s annual report to shareholders and Form 10-KSB Annual Report.
  • Reviews and discusses with the independent public accountants and a representative of the Corporation’s financial management the financial information contained in the Corporation’s Form 10-QSB Report prior to its filing and the Corporation’s earnings announcements prior to release, including significant adjustments, management judgments and accounting estimates, significant new accounting policies and outside auditor disagreements with management.
  • Conducts special reviews at its own discretion within the parameters of its basic responsibilities or in other areas at the request of the Chairman of the Board or the Board of Directors.
  • Ensures the disclosure of the Audit Committee charter at least triennially in the annual report to stockholders and in the next annual report to shareholders after any significant amendment to that charter.
  • Reviews and updates the Audit Committee charter as conditions dictate, but at least triennially.
  • Periodically review globalization issues, strategies, related risks and controls related to foreign offices, joint ventures and alliances abroad.

In order to successfully execute its responsibilities, the Sono-Tek Audit Committee maintains a high degree of independence both in establishing its agenda and directly accessing various members of Sono-Tek and subsidiary management. This ensures an independent and open exchange of views and confirms the authority and responsibility of internal and external auditors and financial management to inform the Audit Committee, formally and informally, of any such matters within the duties and responsibilities of that Committee. Such communication is achieved through both formal reports to the Committee and a direct line of communication by the Chief Financial Officer, General Counsel, independent public accountants, and others in the Corporation to the Chairman of the Committee and the Committee itself.

By meeting its clearly delineated responsibilities through informed and dynamic activity and communication processes, the Audit Committee can enable the Board to fulfill its fiduciary responsibilities relative to the Corporation’s internal controls and financial reporting process.

Compensation Committee

The Company’s Board of Directors has a Compensation Committee composed of 3 Members of the Board of Directors. The Compensation Committee does not have a charter. The compensation of the executive officers of the Company is set by the Company’s Board of Directors based upon the recommendations of the Compensation Committee. Compensation is set at levels believed to be competitive with executive officers with similar qualifications, experience and responsibilities of similar businesses. Such individuals receive a base salary and incentive compensation based on the achievement of certain operating objectives.

The Compensation Committee serves an advisory function only and has no independent authority.

Printable PDFs:

Corporate Governance Conflict Minerals and Disclosure Report
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Sono-Tek Submits Application for Uplisting to the NASDAQ Capital Market

September 15, 2020

MILTON, N.Y., August 11, 2020 – Sono-Tek Corporation (OTCQX: SOTK), the leading developer and manufacturer of ultrasonic coating systems, today announced that it has submitted an application to uplist its…

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