DEF 14A of National Presto Industries Inc, Apr 16, 2024

DEF 14A of National Presto Industries Inc

Filed Apr 16, 2024 · FY20230000897101-24-000135

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS One director will be elected at the Annual Meeting for a three-year term expiring at the 2027 Annual Meeting. The Restated Articles of Incorporation (as amended) of the Company currently provide for five directors, divided into three classes with two classes of two directors and one class of one director and the term of office of one class expiring each year. At each Annual Meeting, successors of the class whose term of office expires in that year are elected for a three-year term. The nominee(s) who receive the highest number of votes will be elected director(s) of the Company for the three-year term commencing at the Annual Meeting. Upon recommendation of the Nominating/Corporate Governance Committee, the Board of Directors have nominated Maryjo Cohen for a term that will expire at the annual meeting to be held in 2027. The Company believes that the nominee will be able to serve; but should the nominee be unable to serve as a director, the proxies will be voted for the election of such substitute nominee(s) as the Board may propose.

  2. Information Concerning Directors and Nominees

    Information Concerning Directors and Nominees All our directors bring to our Board a wealth of leadership experience. The process undertaken by the Nominating Committee in recommending qualified director candidates is described below under “Corporate Governance.” Information about each Board nominee and each other member of the Board, including certain individual qualifications and skills of our directors that contribute to the Board’s effectiveness as a whole, is provided below.

  3. Information Concerning Directors and Nominees

    | Name | Age | Business Experience | Director Since | | Nominee for Election to the Board – For A Term Ending 2027 | | | | | Maryjo Cohen | 71 | Chair of the Board, President and Chief Executive Officer of the Company since May 1994. | 1988 | | Ms. Cohen’s day-to-day leadership and experience as Chief Executive Officer (CEO), as well as her 47 years as an employee of the Company, are invaluable to Board discussions and judgments required for decision-making that is in the best long-term interest of the Company and its stockholders. | | | | | Directors Continuing In Office – For A Term Ending 2026 | | | | | Randy F. Lieble | 70 | Director from December 2006 to August 2007 and December 2008 to present. Vice President from October 2004 to August 2007 and September 2008 to September 2019. Chief Financial Officer from November 1999 to August 2007 and September 2008 to September 2019. Treasurer from November 1995 to August 2007 and September 2008 to September 2019. Secretary from January 2009 to November 2009. | 2008 | | Mr. Lieble’s experience as Chief Financial Officer (CFO) and his 43 years as an employee of the Company during which he had been involved in virtually all phases of the business are invaluable to Board discussions and judgments required for decision-making that is in the best long-term interest of the Company and its stockholders. His background also enables him to act as the financial expert for the Company’s Audit Committee. | | | | | Joseph G. Stienessen | 79 | Retired Certified Public Accountant. Self-employed as an accounting advisor and consultant since July 2007. Former principal with Larson, Allen, Weishair and Company, LLP, a CPA firm, from October 2004 to July 2007; prior to November 2003, Managing Partner of Stienessen, Schlegel and Company, LLC. | 2005 |

  4. Information Concerning Directors and Nominees

    | Mr. Stienessen has extensive knowledge and experience in the areas of accounting and finance. His expertise in those areas is invaluable to Board discussions, judgments required for decision-making that is in the best long-term interest of the Company and its stockholders, and to the fulfillment of his positions on the Nominating and Compensation Committees. | | | | | Directors Continuing In Office – For A Term Ending 2025 | | | | | Douglas J. Frederick | 53 | Chief Operating Officer, Vice President, Secretary and General Counsel of the Company | 2023 | | Mr. Frederick was appointed to our Board of Directors on May 16, 2023. He has served as our Corporate Secretary since November 17, 2009, our Vice President since May 15, 2018, and our Chief Operating Officer since December 11, 2018. He has been associated with the registrant since 2007 as an in-house attorney with expertise in litigation and intellectual property matters and in the capacity of General Counsel since January 2009. His experience in these different roles has led him to be involved in virtually all aspects of the business and is invaluable to Board discussions and judgments required for decision-making that is in the best long-term interest of the Company and its stockholders. Prior to his employment with the registrant, Mr. Frederick was a litigation attorney with the firm Rider Bennett, LLP. | | | | | Patrick J. Quinn | 74 | Former Chairman and President, Ayres Associates, Inc., an engineering firm, from January 2001 and April 2000 respectively, until his retirement in December 2010. Director of certain funds of Wisconsin Capital Management (a regulated mutual fund company). Mr. Quinn serves as a director of Future Wisconsin Housing Fund, Inc. (non-profit housing owner/developer), and is a former director of the Eau Claire Community Foundation (non-profit). | 2001 | | Mr. Quinn’s executive experience and business acumen, together with his 23 years of service as a director of the Company, are invaluable to Board discussions, judgments required for decision-making that is in the best long-term interest of the Company and its stockholders, and to the fulfillment of his positions on the Audit, Nominating, and Compensation Committees. | | | |

  5. Information Concerning Directors and Nominees

    The Board of Directors recommends that stockholders vote FOR the director nominee.

  6. Director Compensation

    Director Compensation At the 2020 annual meeting of stockholders, stockholders approved the Non-Employee Director Compensation Plan, which sets forth the compensation to be paid to the Company’s non-employee directors. In fiscal 2023, each non-employee director was paid an annual retainer of $42,000. In accordance with the Non-Employee Director Compensation Plan, 75% of the annual retainer is paid in cash in three equal quarterly installments, and the remaining 25% is paid in shares of the Company’s common stock. The number of shares granted is determined by dividing the dollar amount of 25% of the annual retainer by the closing price of the Company’s common stock on the last trading day of the calendar year (for 2023 the closing price was $80.28), rounded down to the nearest whole share. No fractional shares are issued and each non-employee director is entitled to receive cash equal to the value of any fractional shares. In addition, each non-employee director is paid $1,000 (which will increase to $1,500 in 2024) for each full day Board or committee meeting attended and $500 for each half day Board or committee meeting attended. The Company reimburses basic and reasonable travel costs associated with attending a meeting of the Board or a committee that requires in excess of 100 miles of travel. The fiscal 2023 compensation of non-employee directors of the Company is shown in the following table.

  7. DIRECTOR COMPENSATION FOR FISCAL 2023

    DIRECTOR COMPENSATION FOR FISCAL 2023

  8. DIRECTOR COMPENSATION FOR FISCAL 2023

    | Name | Fees Earned or Paid in Cash ($) 2023(1) | | Patrick J. Quinn | 48,000 | | Richard N. Cardozo(2) | 30,000 | | Joseph G. Stienessen | 48,000 | | Randy F. Lieble | 47,000 |

  9. DIRECTOR COMPENSATION FOR FISCAL 2023

    | (1) Fourth quarter annual retainer payments were paid in shares of common stock. In accordance with SEC regulations, these amounts are reported in the table as fees earned or paid in cash, rather than as stock awards. For the fourth quarter of 2023, each non-employee director received 130 shares, with a grant date fair value of $10,436.40, computed in accordance with FASB ASC Topic 718 based on the actual number of shares of stock paid out and do not reflect the actual amounts earned. The shares issued are fully vested on the grant date. |

  10. DIRECTOR COMPENSATION FOR FISCAL 2023

    | (2) Mr. Cardozo resigned on May 16, 2023. |

  11. Compensation Objectives and Philosophy

    Compensation Objectives and Philosophy The Company’s executive compensation program is intended to: ● provide fair compensation to executive officers based on their performance and contributions to the Company; ● provide incentives that attract and retain key executives; ● instill a long-term commitment to the Company; and ● develop a pride and sense of ownership. The compensation program is therefore intended to attract, motivate, and retain executive officers who have the capability to manage the Company’s day-to-day operations and personnel, compete ethically in each of its competitive business segments, implement any strategic plans developed by the Company, and implement the Company’s strategic plan to increase stockholder value. The principal element of the executive compensation program is base salary. An award of a discretionary bonus to reward exceptional performance is sometimes made. The Company provides health and life insurance benefits, a 401(k) program with a generous Company contribution, and other welfare benefits that are available to all of its salaried employees on a non-discriminatory basis. Awards of restricted stock are part of the executive compensation program. The Committee believes that restricted stock awards reward performance and align the interests of executives with the long-term interests of stockholders. The objectives and factors considered with respect to the form and amount of each individual element of our compensation program are more fully described herein.

  12. Elements of Our Executive Compensation Program

    Elements of Our Executive Compensation Program Base Salary and Benefits. The base salaries for executive officers is intended to promote the Company’s compensation objectives generally and specifically to provide basic economic security at a level that will attract and retain talented executive officers. Annual increases in base salary of each of the Company’s executive officers, if any, are determined in accordance with its compensation policy and, where appropriate, the economic conditions in which the Company is operating. Individual job performance is the single most important factor in the Committee’s role in determining base salary. The base salaries of the executive officers were established at levels considered appropriate in light of the duties and scope of their responsibilities. For 2023, the Committee approved base salary increases of approximately 0% to 4.7% for the named executive officers. The Company strives to provide employee benefits to executive officers and all other salaried employees that are consistent with benefits provided in the communities in which they reside, including 401(k), health insurance, life and disability insurance, and other welfare benefits. Executive officers participate in these plans on the same basis as other employees. Discretionary Bonus. Although the Company primarily relies upon awarding an adequate and proper base salary to promote its compensation objectives, the Committee also acknowledges the benefit of awarding discretionary bonuses. To this end, the Company’s executive officers may from time to time identify executive officer individual performance measures (qualitative and/or quantitative) or contributions to the overall performance of the Company to the Committee and request that the Committee consider approving a bonus to reward such performance. The awards made for 2023 recognized contributions to corporate performance as well as individual performance with respect to corporate strategy among other factors the Committee deems relevant. The annual cash bonuses paid to our named executive officers for 2023 are set forth in the “Summary Compensation Table.” Incentive, Equity, and Deferred Compensation. The Company has found that SEC insider trading restrictions are such that it is difficult for executives to purchase stock on the open market without violating insider trading rules. Accordingly, with the stockholders’ adoption of the National Presto Industries, Inc. 2017 Incentive Compensation Plan on May 16, 2017, the Compensation Committee has the authority to grant restricted stock awards at its discretion based on an employee’s performance. In order to create ownership as well as provide incentives for future performance, with a grant date of January 2, 2024, the Committee granted shares of restricted stock to some of the named executive officers and several other key employees pursuant to the 2017 Plan. The awards were denominated in dollars but were payable in common stock which the Committee determined would be based on the closing stock price on the NYSE on December 31, 2023 ($80.28). The Committee determined the dollar value of the awards based on job responsibilities, experience, and individual performance in 2023 as well as recommendations of the CEO. The awards granted on January 2, 2024 recognized contributions in 2023 to corporate performance as well as individual performance with respect to corporate strategy among other factors the Committee deems relevant. The table below sets forth the dollar denominated value and number of shares of restricted stock granted to each named executive officer in January 2024. The restricted stock awards vest 100% on March 15, 2029, subject to continued service.

  13. Elements of Our Executive Compensation Program

    Because the grant date was January 2, 2024, the restricted stock awards granted to our named executive officers for 2023 performance will be reflected in the “Summary Compensation Table" and “Grants of Plan-Based Awards During Fiscal Year 2024” table in our Proxy Statement for the 2025 annual meeting of stockholders. Perquisites. In 2023, no named executive officer received perquisites having a value in excess of $10,000. The Committee does not consider perquisites to be a material element of the Company’s compensation program for executive officers. Termination and Change-in-Control Arrangements. The Company does not maintain any employment or change-in-control agreements for its executive officers. Tax Considerations. Prior to the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”), Section 162(m) of the Internal Revenue Code of 1986, as amended, limited deductions to $1 million for compensation paid to the CEO and each of the four most highly paid executive officers named in the Summary Compensation Table who are officers on the last day of the year, and that compensation that qualified as “performance-based” under Section 162(m) was exempt from this $1 million deduction limitation. Under the 2017 Tax Act, the performance-based exception has been repealed and the $1 million deduction limit now applies to anyone serving as the CEO or the CFO at any time during the taxable year and the top three other highest compensated executive officers serving at fiscal year end. The new rules generally apply to taxable years beginning after December 31, 2017. Consistent with past practice, the Committee will design compensation programs that are in the best interests of the Company and its stockholders, with deductibility of compensation being one of a variety of considerations taken into account. Say on Pay Vote. In making compensation decisions, the Committee considers the results of the Company’s stockholder advisory vote approving the Company’s executive compensation. Stockholders approved on an advisory basis the Company’s “say on pay” proposal at the 2023 Annual Meeting of Stockholders with 94.5% of the votes cast (excluding abstentions) in favor of the compensation paid to our named executive officers. Clawback Policy. The Company has adopted a policy that complies with the SEC and NYSE rules that require listed companies to implement policies for the recovery of erroneously awarded incentive compensation.

  14. Summary Compensation Table

    Summary Compensation Table The following table sets forth compensation for individuals who served as principal executive officer (PEO) and principal financial officer (PFO) during fiscal 2023 and for each of the other three most highly compensated executive officers who were serving as executive officers as of December 31, 2023.

  15. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus(1) ($) | Stock Awards(2) ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation(3) ($) | Total ($) | | Maryjo Cohen, Chair of the Board, CEO, President, PEO | 2023 2022 2021 | 630,001 630,001 629,232 | | 0 124,940 99,995 | | | | 23,624 29,469 26,678 | 653,625 784,410 755,904 | | David J. Peuse Treasurer, PFO | 2023 2022 2021 | 199,654 190,785 185,193 | 10,000 10,000 | 0 19,990 24,937 | | | | 15,834 15,635 16,127 | 225,488 236,411 226,258 | | Douglas J. Frederick, COO, Vice President, Secretary, General Counsel | 2023 2022 2021 | 388,265 377,184 371,385 | | 0 81,194 81,046 | | | | 23,985 26,979 25,638 | 412,250 485,357 478,069 | | John R. MacKenzie Vice President of Sales (4) | 2023 | 276,930 | | 0 | | | | 12,043 | 288,973 | | Jeffery A. Morgan, Vice President of Engineering | 2023 2022 2021 | 241,730 234,827 230,242 | | 0 32,998 32,976 | | | | 10,815 12,422 12,170 | 252,546 280,246 275,388 |

  16. Summary Compensation Table

    | (1) Amounts shown for 2023 represent discretionary cash bonuses granted with respect to 2023 performance but paid in January 2024. Amounts shown for 2022 represent discretionary cash bonuses granted with respect to 2022 performance but paid in January 2023. |

  17. Summary Compensation Table

    | (2) These amounts reflect the grant date fair value of restricted stock awards computed in accordance with FASB ASC Topic 718 based on the closing price of the Company’s common stock on the date of grant and do not reflect the actual amounts earned. The amounts shown for 2023 do not reflect stock awards granted on January 2, 2024 based on 2023 performance. |

  18. Summary Compensation Table

    | (3) All Other Compensation includes 401(k) employer contributions, the value of life and disability insurance premiums paid by the Company, and the dividends paid related to the stock awards identified for each year, but paid in March of the following year. For the year 2023, 401(k) employer contributions included $23,100 for Ms. Cohen and Mr. Frederick, $14,949 for Mr. Peuse, $11,158 for Mr. MacKenzie, and $9,931 for Mr. Morgan. |

  19. Summary Compensation Table

    | (4) Mr. MacKenzie was appointed Vice President of Sales on February 17, 2023. |

  20. Grants of Plan-Based Awards During Fiscal Year 2023

    Grants of Plan-Based Awards During Fiscal Year 2023 No equity-based awards were granted to any named executive officer in fiscal year 2023. The stock awards for 2023 performance were granted on January 2, 2024, and as a result will be reflected in the “Grants of Plan-Based Awards During Fiscal Year 2024” table in our Proxy Statement for the 2025 annual meeting of stockholders

  21. Outstanding Equity Awards At 2023 Fiscal Year-End

    Outstanding Equity Awards At 2023 Fiscal Year-End The following table shows all outstanding equity awards held by the named executive officers at the end of fiscal 2023.

  22. Outstanding Equity Awards At 2023 Fiscal Year-End

    | | STOCK AWARDS | | | | | | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($) | | Maryjo Cohen | 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 | 855 1,131 1,130 1,219 1,825 | 68,639 90,797 90,716 97,861 146,511 | | | | David J. Peuse | 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 | 34 56 226 304 292 | 2,730 4,496 18,143 24,405 23,442 | | | | Douglas J. Frederick | 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 | 748 791 408 988 1,186 | 60,049 63,501 32,754 79,317 95,212 | | | | John R. MacKenzie | 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 | 85 113 169 121 219 | 6,824 9,072 13,567 9,714 17,581 | | | | Jeffery A. Morgan | 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 | 85 226 339 402 482 | 6,824 18,143 27,215 32,273 38,695 | | |

  23. Outstanding Equity Awards At 2023 Fiscal Year-End

    | (1) Assuming the employee remains in the Company’s employ through such date, the restricted stock granted on 12/31/2018 vests 100% on March 15, 2024; the restricted stock granted on 12/31/19 vests 100% on March 15, 2025; the restricted stock granted on 12/31/2020 vests 100% on March 15, 2026; and the restricted stock granted on 12/31/2021 vests 100% on March 15, 2027; the restricted stock granted on 12/31/2022 vests 100% on March 15, 2028. All restricted stock awards vest upon retirement as set forth in the 2017 Incentive Compensation Plan and related documents. |

  24. Outstanding Equity Awards At 2023 Fiscal Year-End

    | (2) Calculations based on the closing price of the Company’s common stock of $80.28 on December 31, 2023. |

  25. Option Exercises and Stock Vested in Fiscal Year 2023

    Option Exercises and Stock Vested in Fiscal Year 2023 No options were granted or exercised by the named executive officers during fiscal 2023. The following restricted stock awards granted to the named executive officers vested during fiscal 2023.

  26. Option Exercises and Stock Vested in Fiscal Year 2023

    | | STOCK AWARDS | | | | Name | Vesting Date | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Maryjo Cohen | 3/15/2023 | 1005 | 74,852 | | David J. Peuse | 3/15/2023 | 65 | 4,841 | | Douglas J. Frederick | 3/15/2023 | 260 | 19,365 | | John R. MacKenzie | — | — | — | | Jeffery A. Morgan | 3/15/2023 | 100 | 7,448 |

  27. Option Exercises and Stock Vested in Fiscal Year 2023

    | (1) Calculations based on the closing price of the Company’s common stock on the vesting date ($74.48 per share). |

  28. Potential Payments Upon Termination or Change-in-Control

    Potential Payments Upon Termination or Change-in-Control The Company does not have any change-in-control agreements with any executive officer, director, or employee. The 2010 and 2017 Incentive Compensation Plans under which restricted stock awards have been granted provide that in the event of a change-in-control or the employee’s employment is terminated due to death, disability, or retirement (as defined in the plans), the shares of restricted stock would immediately vest. The amounts shown in the following table reflect the potential value to the named executive officers of acceleration of all unvested restricted stock awards upon a change-in-control of the Company and termination of employment due to death, disability, or retirement (as defined in the plans), assuming that the change-in-control and termination of employment were effective as of December 31, 2023, and based on the closing price of the Company’s common stock of $80.28 on December 31, 2023. The amounts below are estimates of the amounts that would be paid to the named executive officers; the actual amounts to be paid can only be determined at the actual time of a change-in-control or an officer’s termination of employment.

  29. Potential Payments Upon Termination or Change-in-Control

    | | ACCELERATED PORTION OF RESTRICTED STOCK AWARDS | | | Name | Number (#)(1) | Value ($)(2) | | Maryjo Cohen | 6,160 | 494,524 | | David J. Peuse | 912 | 73,216 | | Douglas J. Frederick | 4,121 | 330,833 | | John R. MacKenzie | 707 | 56,758 | | Jeffrey A. Morgan | 1,534 | 123,150 |

  30. Potential Payments Upon Termination or Change-in-Control

    | (1) Total number of shares related to unvested restricted stock as of December 31, 2023. |

  31. Potential Payments Upon Termination or Change-in-Control

    | (2) Total value of unvested restricted stock awards as of December 31, 2023, that would be accelerated. |

  32. CEO Pay Ratio Disclosure

    CEO Pay Ratio Disclosure Under rules adopted pursuant to the Dodd-Frank Act of 2010, the Company is required to calculate and disclose the annual total compensation paid to its median paid employee, as well as the ratio of the annual total compensation paid to the median employee as compared to the annual total compensation paid to the Company’s CEO. Due to estimates, assumptions, adjustments and statistical sampling permitted under SEC rules, the pay ratio disclosed by other companies may not be comparable with the pay ratio that the Company reports. As of December 31, 2023, the Company employed a total of 1,007 employees (including full-time and part-time employees and excluding the CEO). For those 1,007 employees, their 2023 gross earnings were used as the starting point for total compensation. Salaries and wages were not annualized for those employees who were not employed for the full year of 2023. Other compensation, determined in the same manner that the Company determined the total compensation of the named executive officers for purposes of the Summary Compensation Table (i.e. 401(k) employer match, restricted stock awards, dividends paid related to the restricted stock awards, and the value of life and disability insurance premiums paid by the Company), was added to the gross earnings amount to determine total compensation. For 2023, the median-compensated employee (i.e. the 504th employee) had annual total compensation of $46,052. As set forth in the Summary Compensation Table, the CEO's total compensation for 2023 was $653,625. The CEO to median employee pay ratio for 2023 was therefore 14.19:1 ($653,625/$46,052).

  33. Pay Versus Performance

    Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, the Company is providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. The disclosure provided in the tables below is prescribed by SEC rules and does not necessarily align with how the Company or the Compensation Committee views the link between the Company’s performance and its named executive officer (NEO) compensation. In particular, the Company does not use any specific financial performance measure to link executive compensation actually paid to the Company’s financial performance. For further information concerning the Company’s compensation philosophy and how the Company’s aligns executive compensation with the Company’s performance, refer to “Executive Compensation and Other Information – Compensation Discussion and Analysis.”

  34. Pay Versus Performance

    | | | | Average Summary | Average | Value of Initial Fixed $100 Investment Based On: | | | | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Compensation Table Total for Non-PEO NEOs(3) | Compensation Actually Paid to Non-PEO NEOs(4) | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | Net Income (in thousands)(7) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | | 2023 | 653,625 | 732,485 | 294,814 | 316,948 | $115.30 | $47.54 | 34,559 | | 2022 | 784,410 | 709,683 | 343,584 | 320,209 | $93.13 | $56.87 | 20,699 | | 2021 | 755,904 | 743,709 | 340,587 | 333,585 | $105.57 | $93.74 | 25,654 | | 2020 | 737,854 | 725,259 | 328,431 | 327,440 | $107.53 | $95.50 | 46,958 |

  35. Pay Versus Performance

    | (1) The PEO in each of the applicable years is Ms. Cohen (who has served as CEO since 1994). The dollar amounts reported in column (b) are the amounts of total compensation reported for Ms. Cohen for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation and Other Information – Summary Compensation Table.” |

  36. Pay Versus Performance

    | (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Ms. Cohen, as computed in accordance with Item 402(v) of Regulation S-K and do not reflect the actual amount of compensation earned by or paid to Ms. Cohen during the applicable year. The analysis requires the need to deduct the grant date fair value of stock awards from the amount disclosed in the Summary Compensation Table and add back the year-end fair value of any stock awards granted during the fiscal year that are outstanding and unvested as of the end of the fiscal year. Since the Company's stock awards were historically awarded on 12/31 (i.e. the Grant Date was 12/31), this deduction and add back were the same amount for 2020, 2021 and 2022. The grant date for stock awards based on performance in 2023 was January 2, 2024, and therefore no stock awards are reported for fiscal 2023. For the four years disclosed herein, the amount was $0 in 2023, $124,940 in 2022, $99,995 in 2021, and $99,926 in 2020. |

  37. Pay Versus Performance

    | (3) The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s non-PEO named executive officers (NEOs) as a group in the “Total” column of the Summary Compensation Table in each applicable year. Our non-PEO NEOs for the applicable years were as follows: David Peuse, Douglas Frederick, John MacKenzie, and Jeffery Morgan for 2023 and David Peuse, Douglas Frederick, Richard Jeffers, and Jeffery Morgan for each of 2022, 2021 and 2020. |

  38. Pay Versus Performance

    | (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the non-PEO NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K and do not reflect the actual average amount of compensation earned by or paid to the non-PEO NEOs as a group during the applicable year. The analysis requires the need to deduct the grant date fair value of stock awards from the amount disclosed in the Summary Compensation Table and add back the year-end fair value of any awards granted during the fiscal year that are outstanding and unvested as of the end of the fiscal year. Since the Company's stock awards were historically awarded on 12/31 (i.e. the Grant Date was 12/31), this deduction and add back were the same amount for 2020, 2021 and 2022. The grant date for awards based on performance in 2023 was January 2, 2024, and therefore, no stock awards are reported for fiscal 2023. For the non-PEO NEOs as a group during the four years disclosed herein, the average amount per non-PEO NEO was $0 in 2023, $41,042 in 2022, $44,932 in 2021, and $29,005 in 2020. |

  39. Pay Versus Performance

    | (5) Cumulative total shareholder return (TSR) assumes $100 invested on December 31, 2019, in National Presto Industries, Inc. common stock. Total return assumes reinvestment of dividends. |

  40. Pay Versus Performance

    | (6) Represents the weighted peer group TSR and assumes $100 invested on December 31, 2019, in the peer group companies with similar market capitalization. Total return assumes reinvestment of dividends. The peer group used for this purpose is the same peer group utilized for the stock performance graph in the applicable year’s annual report. The Company’s performance graph compares companies with a December 31 market capitalization similar to the Company. The Company adopted this approach because it was unable to reasonably identify a peer group based on its industries or lines of business. The companies represented in the peer group for each year are set forth below. |

  41. Pay Versus Performance

    For 2023 the peer group consisted of AudioCodes, Ltd., Blink Charging Co., bluebird bio, Inc., Community Health Systems, Inc., Ennis, Inc., Haynes International, Inc., Heidrick & Struggles International, Inc. i3 Verticals, Inc., Interface, Inc., Kimball Electronics, Inc., P.A.M. Transportation Services, Inc., Sleep Number Corporation For 2022 the peer group consisted of CIRCOR International, Inc., Haverty Furniture Companies, Inc., Kezar Life Sciences, Inc., Lightwave Logic, Inc., MorphoSys AG, Nine Energy Service, Inc., Novonix Limited, Similarweb Ltd., Surmodics, Inc., trivago N.V., Tsakaos Energy Navigation Limited. For 2021 the peer group consisted of Adaptimmune Therapeutics plc, Bioceres Crop Solutions Corp., Deciphera Pharmaceuticals, Inc., Earthstone Energy, Inc., Entravision Communications Corporation, IRadimed Corporation, Loop Industries, Inc., Pharming Group N.V., ProQR Therapeutics, N.V., RE/MAX Holdings, Inc., Taseko Mines Limited, The RMR Group, Inc. For 2020 the peer group consisted of Arlo Technologies, Inc., Clementos Pacasmayo, S.A.A., Clearwater Paper Corporation, Dorian LPG Ltd., Frank’s International N.V., Interface, Inc., IVERIC bio, Inc., OneSmart International Education Group Limited, Rubius Therapeutics, Inc., Sohu.com Limited, SpartanNash Company, Vaxart, Inc.

  42. Pay Versus Performance

    | (7) The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. |

  43. Pay Versus Performance

    Relationship Between Compensation Actually Paid (CAP) and Performance As described in greater detail in “Executive Compensation and Other Information – Compensation Discussion and Analysis,” the Company’s executive compensation program considers a variety of attributes. The factors that the Compensation Committee deems relevant for both our long-term and short-term incentive awards are selected based on objectives of providing a competitive total compensation program that enables the Company to attract, retain and motivate executive management employees, align the interests of the named executive officers with the interests of our stockholders, and reward individual performance. However, the Company does not use net income or any other financial performance measure as a proxy for the overall performance of the Company and, it does not base any specific element of executive compensation on TSR, net income or any other specific financial performance measure.