DEF 14A of Aaon, Inc., Apr 8, 2024

DEF 14A of Aaon, Inc.

Filed Apr 8, 2024 · FY20230000824142-24-000106

Open on EDGAR

  1. Director Nominees

    Director Nominees Our Board of Directors is currently comprised of eight members. Our Bylaws divide the Board of Directors into three classes having staggered terms of three years each, with Classes III, I and II having terms expiring at the Annual Meeting of Stockholders in 2024, 2025 and 2026, respectively. On the recommendation of our Governance Committee, the Board of Directors has nominated Norman H. Asbjornson, Gary D. Fields and Angela E. Kouplen, current members of the Class III Directors, whose terms expire at the 2024 Annual Meeting, for re-election to the Board. The persons named in the proxy will vote for the election of each of Mr. Asbjornson, Mr. Fields and Ms. Kouplen. Each of the above-named nominees have consented to being named in this Proxy Statement and to serve if elected. If any nominee becomes unavailable for any reason, the shares represented by the proxies will be voted for such other person, if any, as may be designated by the Board of Directors. However, the Board has no reason to believe that any nominee will be unavailable. After the Annual Meeting, assuming the stockholders elect the three nominees of the Board of Directors as set forth above, the Board of Directors of the Company will be:

  2. Director Nominees

    | Director | Age | Start | Expires | Occupation | Independent | | Norman H. Asbjornson | 88 | 1988 | 2024 | Retired, Chief Executive Officer and Executive Chairman of AAON | No | | Gary D. Fields | 64 | 2015 | 2024 | President and Chief Executive Officer, AAON(1) | No | | Angela E. Kouplen | 50 | 2016 | 2024 | Senior Vice President and Chief Human Resources Officer, ONE Gas, Inc. | Yes | | Caron A. Lawhorn | 63 | 2019 | 2026 | Retired, Senior Vice President and Chief Financial Officer, ONE Gas, Inc. | Yes | | Stephen O. LeClair | 55 | 2017 | 2026 | Chairman and Chief Executive Officer, Core & Main, Inc. | Yes | | A.H. McElroy II | 61 | 2007 | 2025 | President and Chief Executive Officer, McElroy Manufacturing, Inc. | Yes | | David R. Stewart | 68 | 2021 | 2026 | Chief Administrative Officer and Trustee of the Oklahoma Ordnance Works Authority | Yes | | Bruce Ware | 48 | 2021 | 2025 | Corporate Vice President and Group Head Joint Venture Capital Raising, DaVita Inc. | Yes | | (1) Effective 1/1/2024, Gary D. Fields is only the Chief Executive Officer of AAON and is no longer the President as Matt Tobolski was named President. | | | | | |

  3. Director Nominees

    SUMMARY PROXY INFORMATION 3 62 Average Director Age 25% Female Representation 11 Average Director Tenure (yrs)

  4. Program Design

    Program Design The Compensation Committee references market data when determining all compensation elements and targets the median level of total compensation. Our compensation program provides a competitive total compensation opportunity by establishing a pay mix that balances short- and long-term performance specifically involving significant equity-based (at-risk) compensation. A significant portion of total compensation is linked to performance, which we believe creates long-term stakeholder value and discourages unnecessary or excessive risk taking. Our performance-based annual incentive bonus program provides cash awards based on achievement of the Company’s annual financial and operational goals, as well as individual performance of each Named Executive Officer ("NEO"). We encourage alignment of our NEOs’ interests with those of our stakeholders through long-term incentive awards, which are comprised approximately 50 percent Performance Stock Units ("PSU"), 25 percent Options and 25 percent Restricted Stock Awards ("RSA"). Our NEOs receive no perquisites or other personal benefits. We have market-competitive stock ownership policies for our NEOs and our non-management directors, which provides them with a significant stake in our long-term success and aligns their interest with stakeholder interests.

  5. Director Compensation

    Director Compensation As outlined in its charter, the Compensation Committee has the authority to review and make recommendations to the Board with respect to the components and amount of Board compensation in relation to other similarly situated companies. Periodically, the Committee directs its compensation consultant to provide an independent assessment of the Company's Board compensation program. This review was last conducted in 2022. The Committee targets total Board compensation levels at a competitive range of peer group total Board compensation. The Committee considers total aggregate Board compensation and other factors when making recommendations to the Board for approval. GOVERNANCE OF THE COMPANY 16 During 2023, our fees for non-employee directors were as follows, with all amounts paid on a quarterly basis:

  6. Director Compensation

    | Director | Annual Retainer ($) | Independent Chair / Vice Chair ($) | Chair Fee ($) | Audit ($) | Compensation ($) | Governance ($) | Total ($) | | Norman H. Asbjornson | $63,750 | $— | $— | $— | $— | $— | $63,750 | | Angela E. Kouplen | $63,750 | $— | $16,000 | $10,000 | $— | $— | $89,750 | | Caron A. Lawhorn | $63,750 | $50,000 | $20,000 | $— | $— | $9,000 | $142,750 | | Stephen O. LeClair | $63,750 | $— | $— | $10,000 | $— | $9,000 | $82,750 | | A.H. McElroy II | $63,750 | $83,250 | $16,000 | $— | $9,000 | $— | $172,000 | | David R. Stewart | $63,750 | $— | $— | $10,000 | $— | $9,000 | $82,750 | | Bruce Ware | $63,750 | $— | $— | $10,000 | $9,000 | $— | $82,750 |

  7. Director Compensation

    Under the current director compensation plan, the annual retainer is inclusive of meetings. We make annual grants of restricted stock awards to non-employee directors in May in conjunction with our annual meeting. In May 2023, each of Ms. Kouplen, Ms. Lawhorn and Messrs. Asbjornson, LeClair, Stewart, Ware and McElroy received restricted stock awards for 1,770 shares of stock, which vest ratably over each member's remaining board term. In addition, directors are subject to equity ownership and retention guidelines, as outlined below in "Stock Ownership and Retention Policy." The following summarizes our non-employee director compensation for 2023:

  8. Director Compensation

    | Director | Fees Earned or Paid in Cash ($) | Restricted Stock Awards(1) ($) | Stock Options ($) | All Other Comp. ($) | Total ($) | | Norman H. Asbjornson | $63,750 | $107,297(3) | $— | $551,404(3) | $722,451 | | Angela E. Kouplen | $89,750 | $107,297(2) | $— | $— | $197,047 | | Caron A. Lawhorn | $142,750 | $106,247(2) | $— | $— | $248,997 | | Stephen O. LeClair | $82,750 | $106,247(2) | $— | $— | $188,997 | | A.H. McElroy II | $172,000 | $106,766(2) | $— | $— | $278,766 | | David R. Stewart | $82,750 | $106,247(2) | $— | $— | $188,997 | | Bruce Ware | $82,750 | $106,766(2) | $— | $— | $189,516 |

  9. Director Compensation

    | (1) The values reflect grant date fair value of awards ranging from $60.03 to $60.62 per share granted on May 16, 2023. See also, the discussion of assumptions made in valuing these awards in the notes to the Company’s financial statements. | | (2) As of December 31, 2023, 3,852; 1,770; 1,770; 3,606; 1,770 and 3,606 unvested shares associated with restricted stock awards were outstanding for Ms. Kouplen, Ms. Lawhorn, Mr. LeClair, Mr. McElroy, Mr. Stewart and Mr. Ware, respectively. Non-qualified options have not been granted during his or her term as a Board member. | | (3) All other compensation includes payments under Mr. Asbjornson's consulting contract. As of December 31, 2023, 3,852 unvested shares associated with restricted stock awards and 757,069 vested and exercisable non-qualified stock options were outstanding for Mr. Asbjornson. |

  10. Norman H. Asbjornson

    Norman H. Asbjornson *Norman H. Asbjornson served as Chief Executive Officer of AAON since its inception until May 2020, when he transitioned to the position of Executive Chairman. He retired as Executive Chairman in May 2022. Mr. Asbjornson also served as President of AAON from its inception until November 2016, when the Board of Directors appointed Mr. Gary D. Fields as President. Additionally, Mr. Asbjornson served as the Executive Chairman of the Board of AAON-Oklahoma and Chairman of AAON Coil Products, Inc., both our wholly-owned subsidiaries until his retirement in May 2022. He has served as a director of AAON since its inception, and currently serves in the class of directors whose terms will expire at the 2024 Annual Meeting.

  11. Gary D. Fields

    Gary D. Fields *Gary D. Fields served as President of AAON from November 2016 until January 1, 2024 and has served as Chief Executive Officer since May 2020. He was elected as a director of AAON in 2015, and currently serves in the class of directors whose terms will expire at the 2024 Annual Meeting. Mr. Fields has been involved in the HVAC industry for more than 35 years. From 1983 to 2012, Mr. Fields was an HVAC equipment sales representative at (and, from 2002 to 2012, a member of the ownership group of) Texas AirSystems, the largest independent HVAC equipment and solutions provider in the state of Texas, with locations in Dallas, Fort Worth, Houston, Austin and San Antonio. Mr. Fields has been significantly involved with the Fort Worth, Texas Chapter of ASHRAE (the American Society of Heating, Refrigerating and Air-Conditioning Engineers), having served as Chairman of various ASHRAE committees and ultimately serving as President of the Society. Mr. Fields is currently an owner and President of GKR Partners LTD, an HVAC business development consulting firm, which provided business development advice and consultation to the Company and its sales representatives from 2013 to 2016. Mr. Fields also serves as the President and Chief Executive Officer of AAON, Inc., an Oklahoma Corporation ("AAON-Oklahoma"), Chief Executive Officer of AAON Coil Products, Inc. and Chief Executive Officer of BASX, Inc.

  12. Angela E. Kouplen

    Angela E. Kouplen *Angela E. Kouplen was elected for an initial two-year term as a director of AAON in 2016, and currently serves in the class of directors whose terms will expire at the 2024 Annual Meeting of stockholders. She serves as Chair of our Compensation Committee and a member of our Audit Committee. Ms. Kouplen has over 25 years of experience at multiple energy companies, with an emphasis on information technology (“IT”), contract management, sourcing/vendor relations, human resource management, strategy and governance. From 1997 through 2007, Ms. Kouplen worked at CITGO Petroleum, a petroleum refining, marketing and transportation company, in various IT related positions, including Manager - E-Business Strategy and Alliance, as well as Manager - Third Party Applications and Applications Development. From 2007 through 2010, Ms. Kouplen served Williams Companies, a Tulsa based publicly traded energy company, in the position of Manager - Sourcing Management Office. From 2010 through 2011, Ms. Kouplen served Williams Companies as Manager - IT Strategy and Governance. In 2012, Ms. Kouplen transitioned from Williams Companies to WPX Energy, a Tulsa based stand-alone publicly traded energy company previously part of the Williams Companies. Following the move to WPX Energy, from 2012 through 2014, Ms. Kouplen served as Director - Talent Acquisition and Leadership, from 2015 to 2016 she served as Vice President - Information Technology, from 2016 to November 2018, she served as Vice President of PROPOSAL NO. 1 - ELECTION OF DIRECTORS 21 Administration and Chief Information Officer and from November 2018 to March 2021 served as Senior Vice President of Administration and Chief Information Officer. Ms. Kouplen served as the Vice President of Administration and Chief Information Officer at the University of Tulsa from August 2021 to August 2023, and presently serves as Senior Vice President and Chief Human Resources Officer of ONE Gas, Inc. Ms. Kouplen holds a bachelor’s degree in Management from Oklahoma State University and an M.B.A from the University of Tulsa.

  13. Caron A. Lawhorn

    Caron A. Lawhorn Caron A. Lawhorn was elected as a director of AAON in January 2019, and currently serves in the class of directors whose terms will expire at the 2026 Annual Meeting. She serves as Chair of our Audit Committee and a member of our Governance Committee. Additionally, the Board elected Ms. Lawhorn as Independent Vice Chair of the Board at the 2022 Annual Meeting. Ms. Lawhorn has over 35 years of experience in various accounting, finance, operational, commercial and executive positions. Ms. Lawhorn retired from her most recent role as Senior Vice President and Chief Financial Officer of ONE Gas, Inc. (a position she held from March 1, 2019 to December 31, 2023), and in such role was responsible for finance, accounting, treasury, investor relations, and ESG reporting. Prior to that, she served as Senior Vice President, Commercial, a position she held from ONE Gas’s separation from ONEOK, Inc. in January 2014. Prior to ONE Gas’s separation from ONEOK, Ms. Lawhorn served in a variety of senior executive roles at ONEOK, including finance, accounting, treasury, operations and corporate development. Ms. Lawhorn joined ONEOK in 1998, after serving as a Senior Manager at KPMG and Chief Financial Officer of Emergency Medical Services Authority in Tulsa. She holds a bachelor’s of science degree in Business Administration from the University of Tulsa and is a certified public accountant.

  14. Stephen O. LeClair

    Stephen O. LeClair Stephen O. (“Steve”) LeClair was elected as a director of AAON in 2017 and currently serves in the class of directors whose terms will expire at the 2026 Annual Meeting. He is a member of our Audit Committee and Governance Committee. Mr. LeClair has over 25 years of experience in various executive, manufacturing, finance, sales and operational positions. Mr. LeClair currently serves as Chief Executive Officer of Core & Main, Inc. (NYSE: CNM) (a position he has held since August 2017), and in such role is responsible for leading the nation’s largest distributor of water, sewer, storm and fire protection products. Mr. LeClair was elected Chairman of the Board in 2024. Prior to his current role, he served as President of HD Supply Waterworks from December 2011 to August 2017, Chief Operating Officer from 2008 to 2011, and President of Lumber and Building Materials from April 2007 until its divestiture to ProBuild Holdings in 2008. Mr. LeClair joined Core & Main in 2006 as Senior Director of Operations. Prior to joining Core & Main, Mr. LeClair was a Senior Vice President at General Electric ("GE") Capital Equipment Services from 2002 to 2005, and from 1992 to 2002 held various roles at GE Appliances and Power Generation in distribution, manufacturing and sales. Mr. LeClair is a graduate of GE Power Generation’s Manufacturing Management Program. He was previously a member of the Saint Louis University’s International Business School Advisory Board. Mr. LeClair holds a bachelor’s degree in Mechanical Engineering from Union College and an M.B.A. degree from the University of Louisville.

  15. A.H. McElroy II

    A.H. McElroy II A.H. (“Chip”) McElroy II, P.E. was elected as a director of AAON in 2007, and currently serves in the class of directors whose terms will expire at the 2025 annual meeting of stockholders. He is Chair of our Governance Committee and serves as a member of our Compensation Committee. Additionally, the Board elected Mr. McElroy as Independent Chairman of the Board at the 2022 Annual Meeting. PROPOSAL NO. 1 - ELECTION OF DIRECTORS 22 Since 1997 Mr. McElroy has served as President, CEO and Chairman of McElroy Manufacturing, Inc., a privately held manufacturing company based in Tulsa, Oklahoma. Since 2002, Mr. McElroy has also served as Chairman of Southern Specialties Co., a privately held specialty sheet metal manufacturer. Since 2016, Mr. McElroy has served on the board of directors of Pryer Aerospace, a privately held Tulsa, Oklahoma based aerospace structural component and sheet metal manufacturer, and from 2016 to June 2019, served on the Advisory Board of HydroHoist Marine Group, a privately held Claremore, Oklahoma based boat lift manufacturer. Since 2017, Mr. McElroy has served as a member on the local advisory board of directors of Ascension St. John Health System, a healthcare system in northeastern Oklahoma and Southern Kansas. Mr. McElroy is a graduate of the STAGEN Leadership Academy ILP and ALP, YPO International: Integrated Brand Building, Harvard Business School & YPO: High Profit, Go to Market Program, and Harvard Business School & YPO: Sustainable Market Leadership Program. Mr. McElroy holds a bachelor's degree in Mechanical Engineering from the University of Tulsa.

  16. David R. Stewart

    David R. Stewart David R. Stewart was elected as a director of AAON in October 2021, and currently serves in the class of directors whose terms will expire at the 2026 Annual Meeting. Mr. Stewart serves as a member of our Audit Committee and Governance Committee. He brings over 40 years of professional experience to the Board. Mr. Stewart currently serves as Chief Administrative Officer and Trustee of the Oklahoma Ordnance Works Authority located in Pryor, Oklahoma, an industrial public trust that owns and operates MidAmerica Industrial Park. He was appointed to his current position in December 2012 by the former Governor of Oklahoma, Mary Fallin. MidAmerica Industrial Park consists of 9,000 acres and is home to over 80 companies in diverse industries (including Google, Siemens and Chevron Phillips), employing approximately 4,500 people. MidAmerica Industrial Park is one of the largest industrial parks in the U.S. and top ten in the world with on-site rail, water and electric power. Prior to his current position, Mr. Stewart, a member of the Cherokee Nation, served as Chief Executive Officer of Cherokee Nation Businesses, LLC. During his tenure as CEO of Cherokee Nation Businesses, LLC, he helped negotiate the Tribal-State Gaming Compact in 2004 and led the Cherokee Nation’s efforts to successfully diversify its business portfolio to include a wide range of non-gaming enterprises employing over 3,500 people. Mr. Stewart earned his Master of Science and Bachelor of Science degrees from Oklahoma State University and is a certified public accountant. Governor Kevin Stitt appointed Mr. Stewart as a member to the Governor's Council of Workforce and Economic Development. He was also appointed by the Governor to the Oklahoma State Board of Career and Technology Education, which provides oversight of the career technical training system in the state of Oklahoma. Mr. Stewart currently is a member of the Board of Directors for the Tulsa Regional Chamber, Executive Committee for Tulsa's Future and is Chair of the Board of Directors for the Oklahoma Business Roundtable. He also serves on the Board of Directors of the State Chamber of Oklahoma and Tulsa Community College Foundation.

  17. Bruce Ware

    Bruce Ware Bruce Ware was elected as a director of AAON in October 2021, and currently serves in the class of directors whose terms will expire at the 2025 Annual Meeting. Mr. Ware serves as a member of our Audit Committee and Compensation Committee. Mr. Ware brings significant experience serving in multiple executive and leadership roles at publicly traded companies. Presently, he serves as a Corporate Vice President and Group Head of Joint Venture Capital Raising for DaVita Inc. DaVita is a Fortune 500 NYSE publicly traded health care services company and one of the largest providers of kidney care services in the U.S., with over 2,675 outpatient dialysis centers in the U.S. and over 367 outpatient dialysis centers in eleven other countries. He started his career in the New York office Donaldson, Lufkin and Jenrette in the investment banking department. PROPOSAL NO. 1 - ELECTION OF DIRECTORS 23 Mr. Ware earned a Master of Business Administration from Harvard Business School, a Master in Public Affairs from The University of Texas at Austin and a Bachelor degree in Business Administration in Banking and Finance from The University of Mississippi at Oxford. Mr. Ware also serves on the Board of Directors of Seneca Foods Corporation, where he is a member of the Audit Committee. He previously served on the Board of Directors for Blackhawk Bank of Beloit, Wisconsin where he was a member of the Audit and Compensation Committees. He is a Trustee of the University of Mississippi Foundation, which oversees the $850 million endowment for Ole Miss. PROPOSAL NO. 1 - ELECTION OF DIRECTORS 24 Proposal No. 2 - Ratify the Selection of Independent Auditor

  18. Compensation Philosophy

    | What We Do | What We Do Not Do | | Pay for Performance: Our executive compensation plan is aligned with stockholder interests by rewarding for strong financial performance and stock price appreciation. | No Stock Option Re-Pricing: We do not permit re-pricing of equity awards without stockholder approval. | | Stock Ownership /Retention Requirements: Our directors, executive officers and certain other key employees are subject to robust stock ownership and retention requirements. | No Tax Gross-Ups: We do not provide tax gross-ups. | | At-Will Employment: Our executive officers are employed at- will and we do not use employment agreements. | No Hedging in Company Securities: Our directors, executive officers and other employees are prohibited from engaging in hedging transactions, short sales or derivative transactions with respect to AAON securities. | | Independent Compensation Consultant: We utilize an independent compensation consultant reporting directly to the Compensation Committee. | Perquisites: We do not offer perquisites to our NEOs. Benefits available to our NEOs are consistent with those offered to all employees. | | Compensation Clawback: Our executive officers are subject to a compensation clawback policy (with a three-year look-back period) that requires reimbursement of any bonus or incentive compensation (as well as the cancellation of unvested, restricted or deferred equity awards) in the event of officer misconduct that was a material factor causing a restatement of the Company’s financial statements. We also maintain a compensation recovery (clawback) policy that complies with Nasdaq requirements. | We do not provide single-trigger for equity treatment upon a change in control. |

  19. Compensation Philosophy

    | Compensation Element | Compensation Objectives | | Base Salary | Attract and retain qualified executives; | | | Motivate and reward executives’ performance; | | | Stay competitive in the marketplace; | | Bonus Compensation | Motivate and compensate executives’ performance; | | | Stay competitive in the marketplace; | | | Motivate the achievement of short-term business objectives that contribute to our long-term strategic direction; | | Equity-Based Compensation — Performance share units, restricted stock awards, and stock options | Enhance profitability of AAON and stockholder value by aligning executives with stockholders’ interest; | | | Attract and retain qualified executives; | | | Motivate the successful execution of our long-term strategic objectives; | | Retirement Benefits – 401(k) and Health | Attract and retain qualified executives; | | Savings Account | Stay competitive in the marketplace; |

  20. Compensation Philosophy

    Our executive compensation program is designed to reward performance for enhanced profitability, revenue growth and ultimately increased stockholder value. We believe in a compensation plan that fosters a culture of ownership and stockholder alignment that allows us to attract and retain top talent who are similarly focused on the creation of long-term value. We reward our executive officers with a pay mix that emphasizes long-term compensation through performance share units, stock options and restricted stock awards to align stockholders' and executives’ interests. We strive to provide total compensation that generally aligns with our peer group market median for NEOs, which also considers individual attributes and performance, as well as company performance. We utilize an annual bonus and equity program to incentivize executive officers to meet Company performance goals. We maintain a compensation program that operates in the best interests of AAON and our stockholders, rewarding NEOs based on performance. Under the terms of the Compensation Committee Charter, the Compensation Committee is authorized to engage independent advisors, at the Company's expense, to advise the Compensation Committee on any matters within the scope of the Committee's duties. For 2023, the Compensation Committee retained Meridian Compensation Partners, LLC ("Meridian") to serve as an independent consultant to the Committee to provide information and objective advice regarding executive and outside director compensation. The Committee did not direct Meridian to perform its services in any particular manner or under any particular method. The Committee has the final authority to hire and terminate the compensation consultant and the Committee evaluates the compensation consultant annually. Meridian does not provide any services to the Company other than in its role as advisor to the Committee and performing valuations of our PSUs, and the Committee has determined that no conflicts of interest exist as a result of the engagement of Meridian.

  21. Benchmarking and Peer Group

    Benchmarking and Peer Group The Compensation Committee evaluates executive compensation by benchmarking our NEOs’ target total compensation relative to comparable market data provided by our independent compensation consultant. Market references are provided for our NEOs, where available, from our peer group which consists of 17 publicly-traded companies in similar industries to AAON (detailed below). This group is reviewed and approved annually, with modifications made as needed, considering changes to business characteristics, size, M&A, etc. Where data may be limited for certain roles, or as an additional market reference, survey data is also used and is reflective of manufacturing organizations with revenues within a reasonable range of AAON. Each element of compensation is benchmarked against peer and/or survey-reported pay information, as applicable. Target total compensation is generally targeted within a reasonable range of median; however, variation may exist based on individual and company performance, tenure in role, future potential, internal equity, etc. COMPENSATION DISCUSSION AND ANALYSIS 32 Peer Group Used for 2023 Pay Decisions:

  22. Benchmarking and Peer Group

    | Ameresco, Inc. | Gibraltar Industries, Inc. | The AZEK Company Inc. | | Armstrong World Industries, Inc. | Insteel Industries, Inc. | The Gorman-Rupp Company | | CECO Environmental Corp. | PGT Innovations, Inc. | Thermon Group Holdings, Inc. | | CSW Industrials, Inc. | Powell Industries, Inc. | Trex Company, Inc. | | Encore Wire Corporation | Quanex Building Products Corporation | Vicor Corporation | | Enerpac Tool Group Corp. | Simpson Manufacturing Co., Inc. | |

  23. Benchmarking and Peer Group

    Based on the Committee’s 2022 peer group review (to determine the peer group used to establish 2023 pay levels), The AZEK Company Inc. and Enerpac Tool Group Corp were added as they are similar in size, business characteristics and complexity. Lydall, Inc. and Raven Industries, Inc. were removed due to M&A activity.

  24. Base Salaries

    In approving these executives’ salary levels, the Committee took into account certain factors, including, recommendations of the principal executive officer (except as it related to himself), each executives’ individual experience and responsibilities, and the Company’s performance. Further, as shown in the comprehensive benchmarking study conducted by the independent compensation consultant, base salary levels for each of our NEOs were positioned below the median of the applicable market benchmark. Base salary increases were based on individual and Company performance, market data (market adjustments made with the intention of more closely aligning with market median, over time) and other internal considerations. Gordon D. Wichman was promoted to President AAON Coil Products effective February 24, 2023. Robert P. Teis was appointed to Vice President of AAON and Vice President of Sale and Marketing effective August 3, 2022. The base salary for Mr. Teis was not adjusted in 2023.

  25. Annual Cash Incentive Bonuses

    Annual Cash Incentive Bonuses We have an “at risk” annual incentive bonus which is intended to facilitate alignment of management with corporate objectives and stockholder interests in order to achieve outstanding performance and to meet specific financial goals by: •providing the employees designated by the Committee, incentive compensation tied to stockholder interests and goals for the Company; •providing competitive compensation to attract, motivate, reward and retain employees who achieve outstanding performance; •fostering accountability and teamwork throughout the Company; and •contributing to the long-term success of the Company. We believe the annual incentive bonus should be a substantial component of total compensation and based upon achievement of the Company’s annual "Opportunity Budget" and is weighted on the following two components which drive stockholder value: 1.Operating Profit (67%) - The Company's Operating Profit calculated as the Company's budgeted net income before “profit sharing” and income taxes, but after bonus accrual; and 2.Net Sales (33%) - The Company’s budgeted net sales. The annual incentive compensation opportunity is expressed as a percentage of the executive officer’s base salary multiplied by a bonus factor. Bonus factors for each Named Executive Officer are as follows:

  26. Annual Cash Incentive Bonuses

    | Named Executive Officer | 2022 Bonus Target | 2023 Bonus Target | | Gary D. Fields | 100% | 100% | | Rebecca A. Thompson | 65% | 65% | | Stephen E. Wakefield | 65% | 65% | | Gordon D. Wichman | 50% | 65% | | Robert P. Teis | 50% | 50% |

  27. Annual Cash Incentive Bonuses

    The increase in Gordon D. Wichman's bonus target reflects his promotion to President of AAON Coil Products effective February 24, 2023. COMPENSATION DISCUSSION AND ANALYSIS 34 The following table reflects performance and payout level percentages for the Annual Incentive compensation opportunity:

  28. Annual Cash Incentive Bonuses

    | Metric | Weighting | Performance Level (% of Target) (1) | | | Payout Level (% of Target) (1) | | | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | Operating Profit | 67% | 80% | 100% | 125% | 33.33% | 100% | 200% | | Net Sales | 33% | 95% | 100% | 105% | 33.33% | 100% | 200% |

  29. Annual Cash Incentive Bonuses

    | (1) For performance between stated levels shown, payouts are determined based on straight-line, linear interpolation. No payout will be made if threshold performance is not met. |

  30. Annual Cash Incentive Bonuses

    For 2023, we utilized two distinct Opportunity Budgets. We believe doing so is appropriate based upon the responsibilities as well as the scope of influence of our PEO, PFO and our other NEOs. The first Opportunity Budget includes Mr. Fields and Ms. Thompson, as they have significant influence over and are accountable for the results of the entire Company, AAON, Inc. (a Nevada Corporation). As a result, the Opportunity Budget for Mr. Fields and Ms. Thompson was based upon the Company's consolidated results, including the results of BASX, Inc. The second Opportunity Budget applies to the other NEOs, as they have significant influence over and are accountable for the results of the AAON, Inc. (an Oklahoma Corporation) and AAON Coil Products, Inc. (collectively, the "Legacy Companies"). For the other NEOs, the Opportunity Budget for 2023 was based upon the consolidated results of the Legacy Companies. The following table details the actual results for the fiscal year ended December 31, 2023 for the Company:

  31. Annual Cash Incentive Bonuses

    | Metric | Opportunity Budget | Actual Results | Budget | Bonus Factor | | Operating Profit | $202.9 million | $233.4 million | 115% | 1.07 | | Net Sales | $1,076.6 million | $1,168.5 million | 109% | .66 | | | | | Weighted Bonus Factor | 1.73 |

  32. Annual Cash Incentive Bonuses

    The following table details the actual results for the fiscal year ended December 31, 2023 for the Legacy Companies:

  33. Annual Cash Incentive Bonuses

    | Metric | Opportunity Budget | Actual Results | Budget | Bonus Factor | | Operating Profit | $188.2 million | $212.3 million | 113% | 1.01 | | Net Sales | $931.5 million | $1,010.3 million | 108% | .66 | | | | | Weighted Bonus Factor | 1.67 |

  34. Annual Cash Incentive Bonuses

    The eligible bonus amounts for our NEOs are shown in the table below:

  35. Annual Cash Incentive Bonuses

    | Named Executive Officer | Base Salary(1) | Eligible % of Base Salary | Bonus Target | Weighted Bonus | Performance Adjustment | Annual Incentive Bonus | | Gary D. Fields | $745,192 | 100% | $745,192 | 1.73 | 1.10 | $1,421,143 | | Rebecca A. Thompson | $369,231 | 65% | $240,000 | 1.73 | 1.15 | $478,504 | | Stephen E. Wakefield | $327,115 | 65% | $212,625 | 1.67 | 1.15 | $409,057 | | Gordon D. Wichman | $291,346 | 65% | $189,375 | 1.67 | 1.00 | $316,806 | | Robert P. Teis | $275,000 | 50% | $137,500 | 1.67 | 1.00 | $230,024 |

  36. Annual Cash Incentive Bonuses

    | Salary is cash compensation for the year and reflects varying pay levels during the year.(1 |

  37. Annual Cash Incentive Bonuses

    AAON’s annual incentive program also consists of an individual performance assessment which allows the Committee to recommend to the Board that any earned annual incentive payout be adjusted +/-15% based on the Committee’s assessment of individual performance against his or her annual objectives. A sample of these objectives for our CEO include: •Successful integration of BASX •Leadership and development of high performing team •Overall company financial and operational performance •Optimizing operational efficiency COMPENSATION DISCUSSION AND ANALYSIS 35 Performance assessments are reviewed for all NEOs by the Compensation Committee. The Compensation Committee will recommend to the Board in the case of Mr. Fields and Mr. Fields will recommend to the Compensation Committee in the case of other NEOs a performance adjustment to increase or decrease the bonus amount earned by each NEO up to 15% based upon how such individual has performed in relation to his or her annual objectives. For 2023, the Committee applied a +10% performance adjustment to Mr. Fields' bonus or $129,195 to recognize his outstanding performance against the objectives above. A +15% performance adjustment was applied to Ms. Thompson's bonus (an additional $62,413) to recognize her achievements handling our banking and treasury business. A +15% performance adjustment was applied to Mr. Wakefield's bonus (an additional $53,356) to recognize his achievements leading our largest segment and his increased relationships with our sales channel partners and investors.

  38. Equity-Based Compensation

    Equity-Based Compensation Our policy is that the NEOs’ long-term compensation should be directly linked to enhancing profitability and value provided to our stockholders. Accordingly, the Compensation Committee grants equity awards under our 2016 Long-Term Incentive Plan, creating a strong linkage between realized pay to stockholder value creation. Such grants are largely based upon the recommendation of the principal executive officer (except as to himself) based on the NEOs performance in the prior year and his or her expected future contribution to our performance. Positive overall Company performance (financial as well as stock price performance) is a primary element associated with the grant of equity-based compensation to the executive officers as a group. When determining the total value of compensation provided to our executive officers, our Compensation Committee, with the advice of our CEO, evaluates various aspects of Company performance in light of general economic conditions, and compares the Company's performance against similar competitors in the industry. Performance elements considered may include improvement in sales performance, cost containment initiatives, product and marketing development, risk management, or successful completion of major capital projects, including enhancements to manufacturing operations. These elements have not been specifically weighted in determining the amount of the equity incentive awards because the relative importance of each element may change from time to time and the responsibilities of each executive officer, as they contribute to the achievement of any particular objective, may vary. Factors considered when determining any specific equity-based award include: •the responsibilities of the executive officer; •the scope, level of expertise and experience required for the executive officer’s position and the period during which the officer has performed these responsibilities; •the strategic impact of the officer’s position; and •the potential future contribution of the officer. In 2023, we maintained the same targeted equity mix used the previous year, which emphasizes performance-based elements of PSUs (50%) and stock options (25%). The PSUs will measure AAON’s three-year total shareholder return ("TSR") relative to the constituents of the S&P 600 SmallCap Capital Goods Industry Group (as constituted at the beginning of the performance period). This allows us to reward executives for performance relative to companies facing similar market forces and aligns the interests of management with stockholders by incentivizing performance that drives returns that exceed our peers. In addition, the vesting horizon for the time-vested restricted shares and stock options was changed to three years to align with the three-year performance period/vesting horizon of the PSUs. Please see the exhibit below for the relative TSR performance and payout scale:

  39. Equity-Based Compensation

    | TSR Percentile Ranking | Payout as a % of | | 80th Percentile or Above | 200% | | 55th Percentile | 100% | | 30th Percentile | 50% | | Below 30th Percentile | 0% |

  40. Equity-Based Compensation

    Results between points are interpolated on a straight-line basis. In the event that AAON's absolute TSR is negative over the 3-year performance period, the payout will be capped at 100% of target, regardless of relative performance. COMPENSATION DISCUSSION AND ANALYSIS 36 The first PSUs were awarded in 2021, and as a result vest in 2024. For the three year performance period of January 1, 2021 through December 31, 2023, the Company's TSR was 61.21% which ranked in the 57.60th percentile of our peer group and resulted in a final payout of 110.4%. The resulting shares can be found in the Performance Unit Vesting Schedule shown as part of the Grants of Plan-Based Awards tables. Awards may be granted to new key employees on their hire date. Other grant date determinations are made by the Compensation Committee, which are based upon the date the Committee met and proper communication was made to the NEO or key employee as defined in the definition of grant date by FASB ASC Topic 718. Stock option exercise prices are equal to the value of AAON stock on the close of business on the determined grant date. We have no program or practice to coordinate timing of grants with release of material, nonpublic information.

  41. Clawback Policies

    The information contained in this Compensation Committee Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates such information by reference in any such filing. COMPENSATION COMMITTEE REPORT 39 Compensation of Named Executive Officers The “Summary Compensation Table” set forth below should be read in connection with the tables and narrative descriptions that follow. The “Grants of Plan-Based Awards Table”, and the description of the material terms of the non-qualified options and restricted stock awards granted in 2023 that follows it, provide information regarding the long-term equity incentives awarded to NEOs in 2023 that are also reported in the “Summary Compensation Table”. The “Outstanding Equity Awards at Fiscal Year End Table” and “Option Exercises and Stock Vesting Table” provide further information on the NEOs’ potential realizable value and actual value realized with respect to their equity awards. We did not have any pension plans, non-qualified deferred compensation plans or severance, retirement, termination, written or unwritten constructive termination or change in control arrangements for any of our NEOs for the year ended December 31, 2023.

  42. Clawback Policies

    | Name and Principal Position(2) | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Option Awards(1) ($) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation (4) ($) | Total ($) | | Gary D. Fields President and CEO | 2023 | 745,192 | — | 2,240,116 | 562,500 | 1,421,143 | 37,834 | 5,006,785 | | | 2022 | 720,192 | 144,343 | 1,108,912 | 419,259 | 962,283 | 46,473 | 3,401,462 | | | 2021 | 676,923 | — | 814,152 | 623,176 | 722,700 | 75,157 | 2,912,108 | | Rebecca A. Thompson VP, Finance, Chief Financial Officer and Treasurer | 2023 | 369,231 | — | 448,053 | 112,496 | 478,504 | 38,887 | 1,447,171 | | | 2022 | 341,154 | — | 228,312 | 86,312 | 296,291 | 35,793 | 987,862 | | | 2021 | 296,731 | — | 206,893 | 178,033 | 188,887 | 36,217 | 906,761 | | Stephen E. Wakefield VP, Chief Operating Officer | 2023 | 327,115 | — | 313,501 | 78,785 | 409,057 | 41,116 | 1,169,574 | | | 2022 | 312,115 | — | 205,474 | 77,681 | 280,453 | 36,096 | 911,819 | | | 2021 | 287,308 | — | 310,100 | 267,050 | 199,379 | 22,387 | 1,086,224 | | Gordon D. Wichman VP, President of AAON Coil Products | 2023 | 291,346 | — | 298,864 | 74,984 | 316,806 | 32,758 | 1,014,758 | | | 2022 | 250,000 | 25,920 | 146,734 | 55,486 | 172,799 | 39,702 | 690,641 | | Robert P. Teis VP, Sales and Marketing | 2023 | 275,000 | — | 269,085 | 158,362 | 230,024 | 53,471 | 985,942 | | | 2022 | 221,897 | — | 52,852 | 25,358 | 73,107 | 119,444 | 492,658 |

  43. Grants of Plan-Based Awards

    Grants of Plan-Based Awards We award stock incentives to key employees and the NEOs either on the initial date of employment or due to performance incentives throughout the year. The 2023 grants to NEOs are reported in the table below. All share numbers and prices have been adjusted to reflect stock splits.

  44. Grants of Plan-Based Awards

    | | | Estimated Future Payouts under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/sh) | Grant Date Fair Value of Stock/ Option Awards ($) (1) | | Name | Grant Date | Thres hold (#) | Target (#) | Maxim um (#) | | | | | | Gary D. Fields | 4/06/23 | 3,274 | 6,547 | 13,094 | | | | 552,653 | | | 3/06/23 | 6,665 | 13,329 | 26,658 | | | | 1,125,056 | | | 3/06/23 | | | | 9,333 | | | 562,407 | | | 3/06/23 | | | | | 31,968 | 62.04 | 562,500 | | Rebecca A. Thompson | 4/06/23 | 655 | 1,309 | 2,618 | | | | 110,531 | | | 3/06/23 | 1,333 | 2,665 | 5,330 | | | | 224,986 | | | 3/06/23 | | | | 1,867 | | | 112,536 | | | 3/06/23 | | | | | 6,394 | 62.04 | 112,496 | | Stephen E. Wakefield | 4/06/23 | 458 | 916 | 1,832 | | | | 77,359 | | | 3/06/23 | 933 | 1,866 | 3,732 | | | | 157,503 | | | 3/06/23 | | | | 1,305 | | | 78,639 | | | 3/06/23 | | | | | 4,477 | 62.04 | 78,785 | | Gordon D. Wichman | 4/06/23 | 437 | 873 | 1,746 | | | | 73,687 | | | 3/06/23 | 889 | 1,777 | 3,554 | | | | 150,033 | | | 3/06/23 | | | | 1,246 | | | 75,144 | | | 3/06/23 | | | | | 4,261 | 62.04 | 74,984 | | Robert P. Teis | 4/06/23 | 327 | 654 | 1,308 | | | | 55,202 | | | 3/06/23 | 667 | 1,333 | 2,666 | | | | 112,556 | | | 3/06/23 | | | | 750 | | | 45,195 | | | 3/06/23 | | | | 931 | | | 56,132 | | | 3/06/23 | | | | | 5,805 | 62.04 | 102,143 | | | 3/06/23 | | | | | 3,195 | 62.04 | 56,218 |

  45. Grants of Plan-Based Awards

    | (1) The grant date fair value of the stock awards is calculated in accordance with ASC Topic 718. |

  46. Grants of Plan-Based Awards

    The aggregate grant date fair value as determined under FASB ASC Topic 718, Compensation - Stock Compensation, for 2023 with respect to options, restricted stock awards and PSUs granted to the NEOs is shown in the “Summary Compensation Table”. The “Grants of Plan-Based Awards Table” provides additional detail regarding the options, restricted stock awards and PSUs granted to NEOs in 2023 including the exercise price and PSU payout levels.

  47. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table A discussion of 2023 salaries, bonuses and long-term incentive awards is included in “Executive Compensation”. NEOs are not separately entitled to receive dividend equivalent rights with respect to each stock option; however, dividends are paid for restricted stock awards (retroactively upon vesting). Each non-qualified stock option award described in the “Grants of Plan-Based Awards Table” above expires on the tenth anniversary of its associated grant date and vests in equal installments over three years. Restricted stock awards vest in equal installments over the course of three years. Restricted stock awards granted to Gary D. Fields vest over a three, two or one-year period (in the case of awards relating to his service as a director). In the case of awards relating to his service as an officer restricted stock awards vested over three years. COMPENSATION OF NAMED EXECUTIVE OFFICERS 41 The PSUs vest based on the level of achievement with respect to the Company's TSR benchmarked against similar companies included in the capital goods sector of the S&P SmallCap 600 Index. The TSR measurement period is three years. At the end of the measurement period, each award will be converted into AAON common stock at 0% to 200% of the PSU held. The following tables present information regarding outstanding equity awards as of December 31, 2023: Option Awards:

  48. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Expiration Date | | Gary D. Fields | — | 28,200 | 27.58 | 3/11/29 | | | 38,736 | 25,824 | 29.48 | 3/11/30 | | | 35,370 | 23,580 | 31.69 | 5/12/30 | | | 31,461 | 15,730 | 48.91 | 3/11/31 | | | 14,281 | 28,562 | 36.13 | 3/15/32 | | | — | 31,968 | 62.04 | 3/6/33 | | Rebecca A. Thompson | 27,850 | — | 24.63 | 1/02/28 | | | 73,200 | 18,300 | 27.58 | 3/11/29 | | | 24,939 | 16,626 | 29.48 | 3/11/30 | | | 8,988 | 4,494 | 48.91 | 3/11/31 | | | 2,940 | 5,880 | 36.13 | 3/15/32 | | | — | 6,394 | 62.04 | 3/6/33 | | Stephen E. Wakefield | — | 27,300 | 27.58 | 3/11/29 | | | — | 25,392 | 29.48 | 3/11/30 | | | 1,079 | 6,741 | 48.91 | 3/11/31 | | | 2,646 | 5,292 | 36.13 | 3/15/32 | | | — | 4,477 | 62.04 | 3/6/33 | | Gordon D. Wichman | 7,302 | — | 21.58 | 10/23/28 | | | 33,450 | 10,800 | 27.58 | 3/11/29 | | | 9,468 | 6,312 | 29.48 | 3/11/30 | | | 4,071 | 2,035 | 48.91 | 3/11/31 | | | 1,890 | 3,780 | 36.13 | 3/15/32 | | | — | 4,261 | 62.04 | 3/6/33 | | Robert P. Teis | 8,175 | — | 24.50 | 2/28/28 | | | 16,380 | 4,095 | 27.58 | 3/11/29 | | | 4,761 | 3,174 | 29.48 | 3/11/30 | | | 8,901 | 4,450 | 48.91 | 3/11/31 | | | 790 | 1,580 | 38.01 | 9/2/32 | | | — | 5,805 | 62.03 | 3/6/33 | | | — | 3,195 | 62.04 | 3/6/33 |

  49. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    COMPENSATION OF NAMED EXECUTIVE OFFICERS 42 Stock Awards:

  50. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    | Name | Number of Unearned Shares That Have Not Vested (1) | Market Value of Shares of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (2) | Equity Incentive Plan Awards: Market Value of Shares of Stock That Have Not Vested ($) | | Gary D. Fields | 24,182 | 1,786,324 | 50,498 | 3,730,258 | | Rebecca A. Thompson | 5,558 | 410,569 | 10,874 | 803,255 | | Stephen E. Wakefield | 6,643 | 490,718 | 10,271 | 758,697 | | Gordon D. Wichman | 3,307 | 244,288 | 6,679 | 493,356 | | Robert P. Teis | 5,262 | 388,704 | 4,130 | 305,054 |

  51. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    | (1) Represents RSAs that have not vested. RSAs vest three years from the date of grant, at which time the grantee is entitled to receive one share of our common stock for each vested RSA, plus accrued dividends. RSAs accrue dividends from the date of grant through the vesting date. RSAs granted to Gary D. Fields in his capacity of a Director vest over his remaining term as a Director. RSAs are scheduled to vest as set forth in the table below. | | (2) Represents PSUs that have not vested. PSUs vest three years from the date of grant, at which time the holder is entitled to receive a percentage (0 to 200 percent) of the PSUs granted based on our TSR over the three-year performance period, compared with the TSR of the peer group. One share of our common stock is payable in respect of each PSU granted that becomes vested. The number of PSUs represented and their corresponding market value is based on 110% achievement at December 31, 2023 for awards vesting in 2024; target payout of 100% for awards vesting in 2025 and 2026. PSUs are scheduled to vest as set forth in the table below. |

  52. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    COMPENSATION OF NAMED EXECUTIVE OFFICERS 43

  53. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    | Restricted Stock Vesting Schedule: | | | | Name | # of Shares | Vesting Date | | Gary D. Fields | 3,111 | on March 6, 2024 | | | 4,632 | on March 11, 2024 | | | 3,938 | on March 15, 2024 | | | 705 | on May 11, 2024 | | | 382 | on May 12, 2024 | | | 3,111 | on March 6, 2025 | | | 870 | on March 11, 2025 | | | 3,939 | on March 15, 2025 | | | 383 | on May 12, 2025 | | | 3,111 | on March 6, 2026 | | Rebecca A. Thompson | 623 | on March 6, 2024 | | | 1,507 | on March 11, 2024 | | | 811 | on March 15, 2024 | | | 622 | on March 6, 2025 | | | 561 | on March 11, 2025 | | | 812 | on March 15, 2025 | | | 622 | on March 6, 2026 | | Stephen E. Wakefield | 435 | on March 6, 2024 | | | 3,024 | on March 11, 2024 | | | 729 | on March 15, 2024 | | | 435 | on March 6, 2025 | | | 855 | on March 11, 2025 | | | 730 | on March 15, 2025 | | | 435 | on March 6, 2026 | | Gordon D. Wichman | 416 | on March 6, 2024 | | | 805 | on March 11, 2024 | | | 521 | on March 15, 2024 | | | 415 | on March 6, 2025 | | | 213 | on March 11, 2025 | | | 522 | on March 15, 2025 | | | 415 | on March 6, 2026 | | Robert P. Teis | 560 | on March 6, 2024 | | | 1,287 | on March 11, 2024 | | | 305 | on March 15, 2024 | | | 816 | on April 18, 2024 | | | 96 | on September 2, 2024 | | | 559 | on March 6, 2025 | | | 675 | on March 11, 2025 | | | 306 | on March 15, 2025 | | | 96 | on September 2, 2025 | | | 562 | on March 6, 2026 |

  54. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    COMPENSATION OF NAMED EXECUTIVE OFFICERS 44 Performance Unit Vesting Schedule:

  55. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    | Name | # of Shares | Vesting Date | | Gary D. Fields | 7,491 | on March 15, 2024 | | | 23,157 | on March 15, 2025 | | | 19,876 | on March 15, 2026 | | Rebecca A. Thompson | 2,140 | on March 15, 2024 | | | 4,767 | on March 15, 2025 | | | 3,974 | on March 15, 2026 | | Stephen E. Wakefield | 3,209 | on March 15, 2024 | | | 4,291 | on March 15, 2025 | | | 2,782 | on March 15, 2026 | | Gordon D. Wichman | 968 | on March 15, 2024 | | | 3,064 | on March 15, 2025 | | | 2,650 | on March 15, 2026 | | Robert P. Teis | 735 | on March 15, 2024 | | | 1,410 | on March 15, 2025 | | | 1,987 | on March 15, 2026 |

  56. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    The following table presents information regarding the exercise of stock options and vesting of stock by NEOs during 2023.

  57. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    | Name | Option Awards | | Stock Awards | | | | Number of Shares Exercised (#) | Valued Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Valued Realized on Vesting ($) | | Gary D. Fields | 84,690 | 5,325,141 | 6,432 | 375,404 | | Rebecca A. Thompson | 15,350 | 975,500 | 1,897 | 112,088 | | Stephen E. Wakefield | 196,000 | 14,092,035 | 3,924 | 231,107 | | Gordon D. Wichman | 14,430 | 918,553 | 2,297 | 130,938 | | Robert P. Teis | 2,100 | 138,170 | 3,460 | 216,857 |

  58. CEO Pay Ratio

    CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S- K, we are providing the following information concerning the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Gary D. Fields, our CEO. For 2023, our last completed fiscal year: •the median of the annual total compensation of all employees of our Company (excluding our CEO) was $61,188; and •the annual total compensation of our CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $5,006,785. Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation to all other employees for 2023 was 81.83 to 1. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our CEO, we took the following steps: COMPENSATION OF NAMED EXECUTIVE OFFICERS 45 1.We determined that, as of December 31, 2023, our employee population consisted of approximately 3,856 individuals with all of these individuals located within the United States (as reported in Item 1, Business, in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2024 (our “Annual Report”)). This population consisted of our full-time, part-time and temporary employees. a.We used December 31, 2023 for our determination date for ease of reconciling data back to tax and payroll records. 2.To identify the “median employee” from our employee population, we compared the amount of salary, wages, 401(k) contributions and HSA contributions as reflected in our payroll records as reported to the Internal Revenue Service on Form W-2 for 2023. a.Based on our particular facts and circumstances, we determined annualizing the total compensation of our permanent partial year employees would not reasonably reflect the annual compensation of our employee population. As a result, we did not annualize the total compensation of our permanent employees who worked less than all of 2023 and therefore excluded such partial year employees from the employee population utilized in our calculations. Since we historically widely distribute annual equity awards to all levels of our employees, such awards were included in our compensation measure. 1.We identified our median employee using this compensation measure, which was consistently applied to all of our employees included in the calculation. Since all of our employees (including our CEO) are located in the United States, we did not make any cost-of-living adjustments in identifying the median employee. 2.After identifying our median employee, we combined all of the elements of such employee’s compensation for 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, which resulted in annual total compensation of $61,188. The difference between such employee’s wages and the employee’s annual total compensation represents the estimated value of such employee’s 401(k) matching contributions, HSA matching contributions, and equity awards. For the annual total compensation of our PEO, we use the amount reported in the “Total” column of our 2023 Summary Compensation Table included in this Proxy Statement and incorporated by reference under Item 11 of Part III of our Annual Report.

  59. Pay Versus Performance

    Pay Versus Performance The following table sets forth information concerning the compensation of our PEO and other NEOs for each of the fiscal years ended December 31, 2023, 2022, 2021 and 2020 and our financial performance for each such fiscal year:

  60. Pay Versus Performance

    | Year | Summary Compensatio n Table total for PEO ($) | Compensatio n actually paid to PEO ($) | Average summary compensation total for non- PEO NEOs ($) | Average compensation actually paid to non-PEO NEOs ($) | Value of initial fixed $100 investment based on: | | Net Income ($000s) | Net Sales ($000s) | | | | | | | Total shareholder return ($) | S&P 600 Capital Goods Industry Group TSR ($) | | | | 2023 | 5,006,785 | 9,619,347 | 1,154,361 | 2,422,754 | 229.53 | 191.84 | 177,623 | 1,168,518 | | 2022 | 3,401,462 | 3,844,215 | 848,828 | 733,570 | 155.24 | 138.76 | 100,376 | 888,788 | | 2021 | 2,912,108 | 5,480,646 | 1,064,856 | 1,400,334 | 162.64 | 145.03 | 58,758 | 534,517 | | 2020 | 2,387,673 | 6,460,946 | 1,285,424 | 3,065,868 | 135.70 | 115.68 | 79,009 | 514,551 |

  61. Pay Versus Performance

    COMPENSATION OF NAMED EXECUTIVE OFFICERS 46

  62. Pay Versus Performance

    | Year | PEO | Non-PEO NEOs | | 2023 | Gary D. Fields | Rebecca A. Thompson, Stephen E. Wakefield, Gordon D. Wichman, Robert P. Teis | | 2022 | Gary D. Fields | Rebecca A. Thompson, Stephen E. Wakefield, Larry G. Stewart, Gordon D. Wichman, Casey R. Kidwell | | 2021 | Gary D. Fields | Norman H. Asbjornson, Scott M. Asbjornson, Rebecca A. Thompson, Stephen E. Wakefield, Larry G. Stewart | | 2020 | Gary D. Fields | Norman H. Asbjornson, Scott M. Asbjornson, Rebecca A. Thompson, Stephen E. Wakefield |

  63. Pay Versus Performance

    The table below provides the adjustments made to the Summary Compensation Table total compensation to arrive at the compensation actually paid for the PEO and the average for the Non-PEO NEOs:

  64. Pay Versus Performance

    | | 2020 | | 2021 | | 2022 | | 2023 | | | | PEO | Average for Non- PEO NEOs | PEO | Average for Non- PEO NEOs | PEO | Average for Non- PEO NEOs | PEO | Average for Non- PEO NEOs | | Less: Fair value of equity awards reported in Summary Compensation Table for applicable year | (1,310,542) | (666,094) | (1,437,328) | (464,911) | (1,528,171) | (271,436) | (2,802,616) | (438,525) | | Add: Fair value of equity awards granted in applicable year at year end | 2,678,303 | 1,680,209 | 1,633,142 | 478,526 | 2,760,769 | 491,969 | 3,309,701 | 520,978 | | Change in fair value of unvested equity awards from prior years | 2,088,973 | 601,986 | 1,944,716 | 420,880 | (500,273) | (139,312) | 3,566,691 | 945,328 | | Change in fair value of vested equity awards from prior years | 614,783 | 163,694 | 424,930 | 11,506 | (294,512) | (79,925) | 531,390 | 237,614 | | Less: Fair value of equity awards forfeited during the covered year | — | — | — | (111,693) | — | (117,768) | — | — | | Add: Dividends paid | 1,756 | 649 | 3,078 | 1,170 | 4,940 | 1,214 | 7,396 | 2,998 | | Total Adjustments | 4,073,273 | 1,780,444 | 2,568,538 | 335,478 | 442,753 | (115,258) | 4,612,562 | 1,268,393 |

  65. Pay Versus Performance

    All fair value calculations were performed in accordance with the provisions of FASB ASC Topic 718 and consistent with the methods utilized to calculate grant date fair values as disclosed in Note 14 - Share-Based Compensation to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023. Non-qualified stock option fair values are calculated based on the Black-Scholes option pricing model. Adjustments have been made using our stock price as of each measurement date and updated assumptions for expected term, volatility, dividend yield and interest rates. Restricted stock award adjustments have been made using our stock price as of each measurement date and updated assumptions for interest rates and dividend yield and accrued dividends for vesting restricted stock awards. For PSUs, adjustments at each measurement date have been made based on the expected level of achievement with respect to the Company's TSR benchmarked against the S&P 600 Capital Goods Industry Group.

  66. Narrative to Pay Versus Performance Table

    Narrative to Pay Versus Performance Table For the year ending December 31, 2023, the most important financial performance measures used to link compensation actually paid to our NEOs to Company performance were net sales, operating profit and our TSR. Our NEO's target total compensation is tied to performance goals aligned with our stockholders' interest. The majority of target compensation was weighted toward long-term equity performance and time-based awards and the financial performance metric was TSR. The short-term incentive program's funding metrics are net sales and operating profit. COMPENSATION OF NAMED EXECUTIVE OFFICERS 47 The graphs below depict the relationship between compensation actually paid and the Company's cumulative total shareholder return, net income, net sales and operating profit: COMPENSATION OF NAMED EXECUTIVE OFFICERS 48 The following table sets forth information concerning our equity compensation plans as of December 31, 2023:

  67. Narrative to Pay Versus Performance Table

    | Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plan (excluding securities reflected in column (a) | | Column | (a) | (b) | (c) | | Equity compensation plans approved by security holders (1) | 3,619,585 | 33.09 | 5,070,436 | | Equity compensation plans not approved by security holders (2) | — | — | — | | Total | 3,619,585 | 33.09 | 5,070,436 |

  68. Narrative to Pay Versus Performance Table

    | (1) Consists of shares covered by stock options granted under the 2007 LTIP, as amended, and the 2016 Incentive Plan, as amended. The stock options outstanding as of December 31, 2023 have a weighted-average remaining term of 5.99 years. | | (2) We do not maintain any equity compensation plans that have not been approved by the stockholders. |

  69. Narrative to Pay Versus Performance Table

    COMPENSATION OF NAMED EXECUTIVE OFFICERS 49 Proposal No. 3 - Advisory Vote on Executive Compensation Our Board is asking our stockholders to vote, on an advisory basis, to approve the compensation of our NEOs, as disclosed in this Proxy Statement in accordance with SEC rules and Section 14A of the Exchange Act. We recognize the interest our stockholders have in the compensation of our executives and this proposal gives us the opportunity to obtain the views of stockholders on the effectiveness of our executive compensation program. This vote is not intended to address any specific item of compensation, but rather concerns the overall compensation of our NEOs, and the policies and practices described in this Proxy Statement. Because this vote is advisory, it is therefore not binding on the Company. However, the Board and the Compensation Committee value the opinions of our stockholders, and will consider our stockholders’ views, including what, if any, actions may be appropriate to address any concerns identified through the advisory vote.