DEF 14A of Richardson Electronics, Ltd., Aug 23, 2024

DEF 14A of Richardson Electronics, Ltd.

Filed Aug 23, 2024 · FY20240000950170-24-100030

Open on EDGAR

  1. PROPOSAL 1 – ELECTION OF DIRECTORS

    PROPOSAL 1 – ELECTION OF DIRECTORS At the Annual Meeting, stockholders will elect seven directors to serve on our Board of Directors until the next annual meeting, or until their successors are elected and shall have qualified, subject to their earlier death, resignation or removal as permitted by law. Directors will be elected by a plurality of the votes cast at the meeting by the holders of shares represented in person or by proxy. Thus, assuming a quorum is present, the seven persons receiving the greatest number of votes will be elected as directors and votes that are withheld or abstained from will have no effect. Our Board of Directors, acting through our Nominating Committee, is responsible for nominating a slate of directors that collectively have the complementary experience, qualifications, skills and attributes to guide the Company and function effectively as a Board. The Nominating Committee has recommended Edward Richardson, Jacques Belin, James Benham, Wendy Diddell, Kenneth Halverson, Robert Kluge and Paul Plante as nominees for election at the Annual Meeting. We believe that each of our nominees has professional experience in areas relevant to our strategy and operations. All our directors have managerial experience and are accustomed to dealing with complex problems. We also believe each of our nominees has other attributes necessary to create an effective Board, including high personal and professional ethics, the willingness to engage management and each other in a constructive and collaborative fashion, the ability to devote significant time to serve on our Board and its committees and a commitment to representing the long-term interests of all our stockholders. In addition to these attributes, in each individual’s biography set forth below, we have highlighted specific experience, qualifications and skills that led the Nominating Committee and the Board to conclude that each individual should be nominated to serve as a director of the Company. Jacques Belin, age 72, has been a director of the Company since October 2013. He served as Managing Director of Thales Components and Subsystems (“Thales”) from 2000 to 2011. He retired from Thales in October 2011. Prior to 2000, he served in multiple capacities including Quality and Production Engineer, Operations Manager and Factories Manager. In addition, Mr. Belin was heavily involved at Thales in areas including strategy, sales and marketing and administration. Mr. Belin has been a director for Reltas AG (Switzerland) since 2012. Mr. Belin holds an engineering degree from Ecole Centrale in Paris. His entire career has been devoted to the electron tube and subsystems business. Mr. Belin’s qualifications to serve on our Board of Directors include his vast experience in the industry and knowledge of other advanced power generation, microwave, healthcare and detection technologies. James Benham, age 79, has been a director of the Company since October 2013. He has served as a Technical and Marketing Consultant to the Night Vision and Microwave Devices Industries since March 2013. He retired in March 2013 after 46 years in the Defense Electronics industry. Prior to his retirement, Mr. Benham was the President of L-3 Communications Narda West Division in Folsom, California from 2011 to 2013. For the previous 16 years, he was President of the Electron Devices Division of L-3 Communications. Mr. Benham served as a director of Intevac (IVAC) Inc. from June 2015 to May 2017. Mr. Benham received his BS in Chemistry from the State University of New York and an MBA from Lynchburg College in Lynchburg, Virginia. He has also completed executive development programs at The Wharton School of the University of Pennsylvania, Harvard Business School and Stanford University. Additionally, Mr. Benham holds a patent in the night vision field. Mr. Benham’s qualifications to serve on our Board of Directors include his 45+ years of technology development, engineering and management experience. Wendy S. Diddell, age 59, has been a director of the Company since March 2021 and Executive Vice President since June 2007 and, as of December 23, 2015, Ms. Diddell assumed the role of Chief Operating Officer. Effective March 13, 2019, Ms. Diddell assumed direct responsibility for the Richardson Healthcare business. From June 2007 through December 2015, she held the role of Executive Vice President, Corporate Development. From June 2009 through June 2015, she also assumed the role of General Manager of our Canvys business. Prior to June 2007, Ms. Diddell was Executive Vice President and General Manager of our Security Systems Division since February 2006. Prior to that, Ms. Diddell was employed as Vice President and General Manager of the Security Systems Division since June 2004 and as a management consultant for the Security Systems Division since July 2003. Ms. Diddell holds an MBA from the University of Southern Florida. Ms. Diddell’s qualifications to serve on our Board of Directors include her position as our Executive Vice President and our Chief Operating Officer, her industry experience, her management and operations expertise, her deep understanding of the Company and her ability to bring historic knowledge and continuity to the Board. Kenneth Halverson, age 72, has been a director of the Company since October 2013. He has been a board member of ShiftRx, LLC since November 2018 and a board member for Red Pine Camp Foundation. Mr. Halverson has been a consultant with Halverson Consulting, LLC since 2009. Previously, he was Senior Vice President from 1999 to 2009 with MedAssets, Inc., one of the largest Group Purchasing Organizations in the country. MedAssets provides service to thousands of hospitals helping them to reduce their overall expenses. Mr. Halverson was with Comdisco Inc. from 1984 to 1999, acting as Senior Vice President and President of the Healthcare Group, which leased imaging and clinical equipment as well as refurbished and remarketed imaging equipment. Mr. Halverson holds an MBA in Finance from Northwestern University’s Kellogg School of Management and has held various executive positions with technology and healthcare companies throughout his career. Mr. Halverson’s qualifications to serve on our Board of Directors include his extensive experience with healthcare companies as well as his background in technology and finance. Robert Kluge, age 78, has been a director of the Company since October 2017. He has served as the General Manager, and later as President of the Imaging Components Business at Varian Medical Systems, Inc. from February 1993 to February 2014 and as a Corporate Senior Vice President. He served as General Manager of X-Ray Products for Picker International from 1988 to 1993 and oversaw the diagnostic X-Ray product line, including X-Ray systems for Radiographic, R&F and Vascular applications, and was later given expanded responsibility for X-ray tubes. Mr. Kluge began his career in 1973 with General Electric Medical Systems as a participant in the Financial Management Program. He held a number of management positions at GE, including Service Business Marketing Manager and General Manager of Marketing and Strategy for the X-Ray Tube business. Mr. Kluge holds a B.S. in Economics and an MBA in Finance from the University of Wisconsin. Mr. Kluge’s qualifications to serve on our Board of Directors include his significant management experience in the design and manufacturing of diagnostic imaging components including CT tubes and flat panel detectors, and his extensive knowledge of marketing, strategy and general management.

  2. PROPOSAL 1 – ELECTION OF DIRECTORS

    Paul J. Plante, age 66, has been a director of the Company since October 2011. Mr. Plante has been Director and Consultant to Cardinal Vending and Markets, LLC, a privately held company, since March 2020. Mr. Plante also serves as a Director of SigmaTron International, Inc. From December 2008 to March 2022, Mr. Plante was the founder and owner of Florida Fresh Vending, LLC, a privately held company, with vending machines throughout the state of Florida that was sold to Cardinal Vending and Markets in March 2020. He has provided business consulting services to the electronics industry since 2008. Prior to that time he was Vice President, Medical Industry Solutions, for the Kimball Electronics Group from February 2007 until May 2008, after the purchase by Kimball Electronics of Reptron Electronics, Inc. From February 2004 to February 2007, Mr. Plante was President and Chief Executive Officer and a member of the Board of Directors of Reptron Electronics, Inc., a publicly held provider of electronics manufacturing services with a focus on the medical industry. From 1994 until 2004, he served as the President and Chief Operating Officer of Reptron. Mr. Plante negotiated and led Reptron Electronics, Inc. through a successful pre-arranged Chapter 11 reorganization period that strengthened the company’s balance sheet and liquidity with no significant loss of customers, employees or suppliers. Prior to 1994, he was the Chief Financial Officer at Reptron and at K-Byte, Inc., a Michigan based software developer and electronics manufacturer. Mr. Plante has a degree in accounting and has been a licensed certified public accountant. We believe Mr. Plante is financially literate and qualifies as an “audit committee financial expert” under SEC rules. Mr. Plante’s qualifications to serve on our Board of Directors include his significant experience in the electronics industry, his experience managing electronics manufacturing companies and his extensive financial knowledge. Edward J. Richardson, age 82, has been a director of the Company since 1965. He is currently the Chairman of the Board, Chief Executive Officer and President of the Company. Mr. Richardson has been employed by the Company in various capacities since 1961. Mr. Richardson’s qualifications to serve on our Board of Directors include his position as our Chief Executive Officer for over 40 years and his unique ability to bring historic knowledge and continuity to the Board. The Company presently knows of no reason why any of the nominees for director would be unable to serve. In the event, however, that any nominee named should, prior to the election, become unable to serve as a director, your proxy (unless designated to the contrary) will be voted for such other person or persons as the Board of Directors may recommend. Our Board of Directors recommends that you vote “FOR” the election of each director nominee.

  3. Policies Related to Directors and Officers

    Policies Related to Directors and Officers The Company has an insider trading policies and procedures governing the purchase, sale and other disposition of its securities by directors, officers and employees that management believes are reasonably designed to promote compliance with insider trading laws, rules, and regulations, and any listing standards applicable to the company. The insider trading policy is shown as Exhibit 19.1 in the Company's Form 10-K for fiscal 2024. In accordance with NASDAQ and SEC rules, the Board of Directors has adopted a policy to provide for the Recovery of Erroneously Awarded Incentive-based Compensation from Executive Officers ("Clawback Policy"). The Clawback Policy is shown as Exhibit 97.1 in the Company's Form 10-K for fiscal 2024.

  4. Compensation of Directors

    Compensation of Directors The Board of Directors believes it is desirable for non-employee directors to own stock in the Company. With equity ownership, non-employee directors assume a personal stake in the success or failure of the Company and align their financial interests with those of the Company’s shareholders. Accordingly, the Board adopted the Non-Employee Director Equity Compensation Program and Stock Ownership Guidelines (the “Program”). The program became effective in fiscal 2025 and supersedes all prior plans, policies and documents, including the 2006 Stock Option Plan for Non-Employee Directors. With the adoption of the newly adopted Non-Employee Director Equity Compensation Program and Stock Ownership Guidelines, the annual grant of 5,000 fully vested stock options to each non-employee director ceased as of the close of fiscal 2024. Pursuant to the Non-Employee Director Compensation Program and Stock Ownership Guidelines: • Each director receives an Initial Restricted Stock Award having a value of $50,000 (measured as of the close of trading on the date of such award). • Each director receives an Annual Retainer Award of Restricted Stock Award (having a value of $50,000 measured as of the close of trading on the date of such award) at the end of the fiscal year. Shares are awarded after the last day of the fiscal year but no later than August 1. • Each director is required to maintain a minimum investment of $150,000 in the Company’s stock, of which $100,000 must be purchased by each director outside of the retainer award (Guideline Ownership Level). Each director must attain the Guideline Ownership Level by August 1, 2027. The Restricted Stock awarded pursuant to the Program is fully vested on and as of the grant date and shall be subject to restrictions and terms set forth in the Restricted Stock Award. Compliance with the Guideline Ownership Level is confirmed annually on August 1. Non-employee directors have three (3) years from the adoption date to attain the Guideline Ownership Level. Non-employee directors elected or appointed after the adoption date have three (3) years from their election or appointment date to attain the Guideline Ownership Level. In addition to the fully vested restricted stock awards prescribed by Non-Employee Director Equity Compensation Program each non-employee director is entitled to: • Quarterly retainer fee of $4,500 • Meeting fee of $1,000 for each Audit Committee meeting • Board and Other Committee meeting fee of $750 for each meeting The Chairman of the Audit Committee is entitled to an additional quarterly retainer of $1,500. Employee directors receive no compensation related to their service on our Board of Directors in addition to their regular employee compensation. For a discussion of the compensation paid to our management directors, Mr. Richardson and Ms. Diddell, see the sections of this proxy statement entitled Compensation Discussion and Analysis and Compensation of Named Executive Officers.

  5. Fiscal Year 2024 Director Compensation Table

    Fiscal Year 2024 Director Compensation Table The following table shows compensation information for each of our non-employee directors during fiscal 2024.

  6. Fiscal Year 2024 Director Compensation Table

    | Name of Director | Fees Earned or Paid in Cash ($) | Option Awards ($) (1) | Total ($) | | Jacques Belin | $28,750 | $31,650 | $60,400 | | James Benham | 28,750 | 31,650 | 60,400 | | Kenneth Halverson | 28,750 | 31,650 | 60,400 | | Robert Kluge | 28,750 | 31,650 | 60,400 | | Paul Plante | 34,750 | 31,650 | 66,400 |

  7. Fiscal Year 2024 Director Compensation Table

    Amounts represent the dollar amount recognized for financial statement reporting purposes with respect to fiscal 2024 for the fair value of stock options granted to each director, in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) 718, and do not correspond to the actual value that will be recognized by each director. For the relevant assumptions used in determining the fair value of stock option awards, refer to Note 3, Significant Accounting Policies and Disclosures - Share-Based Compensation, in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 1, 2024, filed with the SEC on August 5, 2024.

  8. Objectives

    Objectives The fundamental objectives of our executive compensation programs are to: • Attract and retain highly qualified executives by providing total compensation that is internally equitable and externally competitive; • Motivate executives by providing performance-based incentives to achieve our annual financial goals and long-term business strategies; and • Align the interests of executives with those of stockholders by rewarding our executives for individual and corporate performance measured against our goals and plans, and by granting stock options and other equity-based compensation. To achieve our compensation objectives, we use a combination of base salary, annual bonus opportunity, the Company’s long-term incentive plan and other benefits, which are described in more detail in this Proxy Statement. When making compensation decisions, the various components of compensation are evaluated together, and the level of compensation opportunity provided for one component may impact the level and design of other components. We attempt to balance the total executive compensation program to promote the achievement of both current and long-term goals. Our Compensation Committee (the "Committee") reviews and analyzes our executive compensation policies, programs and practices regularly in light of these objectives and our financial performance to ensure that our compensation practices are appropriately configured to achieve these objectives.

  9. Elements of Executive Compensation

    Elements of Executive Compensation We employ various elements as part of our executive compensation program which are intended to fulfill one or more of our general executive compensation objectives. The elements of total compensation for our Named Executive Officers are: • base compensation; • annual cash incentive compensation; • equity-based compensation; • profit sharing/401(k) plan; and • limited perquisites. Base Compensation. Base salary is the fixed cash component of executive compensation that is intended to attract and retain high-performing executives. Base compensation is generally established based on various factors, such as the executive’s responsibilities, experience and skills, the financial performance of the Company, and competitive market pay for the relevant position. The Committee alone determines the CEO’s base compensation. In fiscal 2022, fiscal 2023 and fiscal 2024 the Compensation Committee approved increases of 3.0%, 5.0% and 4.11%, respectively, to Mr. Richardson’s base compensation. In fiscal 2022, Ms. Diddell received a 3.0% increase in base salary to $453,957, Mr. Peloquin received a 3.0% increase in base salary to $369,571, Mr. Ben received a 3.0% increase in base salary to $313,521 and Mr. Ruppert received a 5.0% increase in base salary to $304,894 (this amount has been converted into U.S. Dollars from Mr. Ruppert’s base salary of 266,935 Euros, using the annual average rate as of May 28, 2022). In fiscal 2023, Ms. Diddell received a 5.0% increase in base salary to $476,655, Mr. Peloquin received a 5.0% increase in base salary to $388,050, Mr. Ben received a 5.0% increase in base salary to $329,197 and Mr. Ruppert received a 4.01% increase in base salary to $290,103 (this amount has been converted into U.S. Dollars from Mr. Ruppert’s base salary of 277,639 Euros, using the annual average rate as of May 27, 2023). In fiscal 2024, Ms. Diddell received a 4.11% increase in base salary to $496,245, Mr. Peloquin received a 4.11% increase in base salary to $403,999, Mr. Ben received a 4.11% increase in base salary to $342,727 and Mr. Ruppert received a 4.01% increase in base salary to $312,664 (this amount has been converted into U.S. Dollars from Mr. Ruppert’s base salary of 288,773 Euros, using the annual average rate as of June 1, 2024). The amount of base compensation for each of the Named Executive Officers, other than the CEO, is initially set upon the commencement of his or her employment as an executive officer with the Company and is stated in the Named Executive Officer’s employment agreement, if applicable. This initial amount is established with a goal of attracting talented executive officers to the Company and is recommended by the CEO and approved by the Committee. Thereafter, each of the Named Executive Officers’ base compensation is reviewed annually by the CEO and the Committee. In determining appropriate levels of base compensation for executive officers, the CEO considers the executive officer’s individual performance, the financial performance of the Company and a base compensation that is externally competitive. The Committee annually reviews the base compensation of the executive officers set by the CEO. The Committee reports its findings and opinions with respect to base compensation to the Board for further discussion so that the Board may provide feedback to the CEO regarding the Board’s perception of how well the base compensation of the executive officers achieves the Company’s compensation objectives. Annual Cash Incentive Compensation. Annual cash incentive compensation is intended to attract, as well as motivate and reward, executives for the achievement of short-term performance goals that are critical to the Company’s growth. In October 2012, the Committee recommended, and the Board and stockholders approved, the Amended and Restated Edward J. Richardson Incentive Compensation Plan whereby Mr. Richardson is eligible to receive annual cash incentive compensation based a percentage of the Company’s annual net income after tax, subject to the achievement by the Company - financial objectives set by the Committee. In fiscal 2022, fiscal 2023 and fiscal 2024, the Committee selected three metrics by which to evaluate Mr. Richardson’s performance: achieving Company profitability goals; achieving revenue growth targets; and achieving cash and investing activity targets. Mr. Richardson was eligible under the Amended and Restated Edward J. Richardson Incentive Compensation Plan to receive annual incentive cash compensation in fiscal 2022, fiscal 2023 and fiscal 2024, which were voluntarily reduced from the 70.0% maximum bonus amount to 37.5% of his base compensation (excluding car allowance, incentive, equity award and perquisites). In fiscal 2022, fiscal 2023 and fiscal 2024, Mr. Richardson received incentives of $327,000, $412,000, and $177,000, respectively. Named Executive Officers other than the CEO are eligible to participate in the Company’s annual incentive cash compensation program, subject to the terms of any applicable employment agreement. On an annual basis, management presents specific recommendations to the Committee regarding the financial metrics and other components to be included in the annual incentive plan for Named Executive Officers other than the CEO, which are those metrics and components that management believes will provide the best incentive to achieve desired operating results. These recommendations for target incentive percentages are developed in light of achievement under prior plans and through consultation with the CEO. The Committee considers management’s recommendation and then determines the final components and structure of our incentive compensation plans based on the objectives of our compensation program. The target incentive percentages for Named Executive Officers were initially set by the Compensation Committee with a goal of attracting talented executive officers to the Company and are stated in the Named Executive Officer’s employment agreement, if we have an employment agreement with such Named Executive Officer. If we do not have an employment agreement with the Named Executive Officer, then the target incentive percentage is recommended by the CEO and approved by the Committee on an annual basis. The employment agreement with each current Named Executive Officer provides for target incentive opportunity of 50% of such officer’s base compensation (excluding, for the avoidance of doubt, any car allowance, incentive, equity awards and perquisites). The target incentive opportunity for Ms. Diddell was voluntarily reduced to 37.5% of her base compensation in fiscal 2022, fiscal 2023 and fiscal 2024. Mr. Ben’s target incentive opportunity was voluntary reduced to 37.5% for fiscal 2022 and 2024 and was 50% for fiscal 2023. In recognition of fiscal 2022, fiscal 2023 and fiscal 2024 performance, and in consideration of a compensation package designed to achieve the Company’s compensation philosophy of, among other goals, retaining, motivating and rewarding our executives in the achievement of performance goals, Messrs. Peloquin and Ruppert were awarded bonuses for fiscal 2022, fiscal 2023 and fiscal 2024 based on the 50% target incentive opportunity provided in their employment agreements. For fiscal 2024, the Named Executive Officers were eligible for cash incentives based on the following metrics:

  10. Fiscal 2024 Incentive Actual Performance

    Clawback Provision. The Committee approved a clawback policy allowing the Committee to clawback incentives for the Named Executive Officers in the event of fraud or illegal conduct. In addition, if the Company was required to prepare an accounting restatement due to material non-compliance with financial reporting requirements, the Committee has the right to recover incentive-based compensation that was awarded based on the erroneous data. Hedging. The Company maintains a formal policy prohibiting directors, officers and employees from entering into hedging transactions involving our Company stock. Equity Based Compensation. Our 2011 Long-Term Incentive Plan (as amended and restated, the “2011 Plan”) provides for grants of equity awards to our executive officers to encourage them to focus on long-term Company performance and further align the interest of the Company’s Named Executive Officers with the interests of our stockholders. The plan is administered by the Compensation Committee of the Board. Consistent with our policy of providing a total compensation package that includes equity-based components, the Committee makes periodic decisions (normally on an annual basis) regarding appropriate equity grants based on the Company’s achievement of its financial and strategic goals and the participants’ individual performance, based on recommendations from our CEO, which is generally determined on a year-to-year basis. The Committee has the discretion to determine whether equity awards will be granted to the Named Executive Officers and, if so, the number of shares subject to each award. The CEO submits to the Committee, on at least an annual basis, a recommendation for the amount and type of equity award to grant to each Named Executive Officer other than himself. Annual equity recommendations and grants are typically made during our first fiscal quarter and are based on the Company’s and the grant recipients’ performance in the prior fiscal year. In determining whether to approve or adjust the recommended grants, the Committee considers our financial performance in the prior fiscal year, the executive’s level of responsibility and historical award data. The Committee does not assign a specific weight to any of these factors, but rather these factors are evaluated on an aggregate and qualitative basis. When awarded, stock options are granted at an exercise price equal to the fair market value of our common stock on the date of the grant. Under the terms of the 2011 Plan, the fair market value of the stock is the closing sale price of the stock on the date of grant. Our stock options, therefore, have value only if the stock price appreciates following the date on which the options are granted. Stock option awards to the Named Executive Officers under the 2011 Plan vest over a five-year period with 20% of the stock option grant becoming exercisable 12 months after the date of grant. The remaining options vest and are exercisable in 20% increments over the next four years. In fiscal 2022 each of the Named Executive Officers received a grant of restricted stock and a grant of stock options under the 2011 Plan. In fiscal 2023 and fiscal 2024, each of the Named Executive Officers received a grant of restricted stock and a grant of stock options under the 2011 Plan, except for Mr. Ben (fiscal 2023 only), Mr. Peloquin and Mr. Ruppert (who received Stock Options). The fiscal 2024 grants are reported in the table for Grants of Plan Based Awards included in the Compensation of Named Executive Officers section. With respect to these awards, the CEO recommended to the Committee the number of restricted shares and stock options to be granted to the Named Executive Officers. Profit Sharing/401(k) Plan. We offer retirement benefits to our employees, including our Named Executive Officers, through a tax-qualified Profit Sharing/401(k) Plan, which is a defined contribution plan designed to accumulate retirement funds for participating employees through individual and Company contributions. Participants are provided the opportunity to make salary reduction contributions to the Profit Sharing/401(k) Plan on a pre-tax basis. The Profit Sharing/401(k) Plan is intended to reward continued employment with the Company. Limited Perquisites. We offer very few perquisites to our Named Executive Officers, primarily a car allowance. The perquisites provided to each Named Executive Officer in fiscal 2024 totaled less than $15,000 and less than 10% of total annual salary and incentive reported for each Named Executive Officer. Compensation Policies and Practices as They Relate to Risk Management. As stated above under Corporate Governance—Board Role in Risk Oversight, the Committee reviews the Company’s compensation plans and practices for all employees, including executive officers, to determine whether, in its judgment, our compensation programs encourage risk-taking likely to have a material adverse effect on the Company. The Committee determined that the performance measures and goals under our compensation programs were tied to our business, financial and strategic objectives and, as such, that the programs do not encourage inappropriate or excessive risk-taking.

  11. Fiscal Year 2025 Compensation Actions

    Fiscal Year 2025 Compensation Actions Similar to the Company’s actions in fiscal year 2024, on July 22, 2024, the Committee approved grants by the Company of shares of restricted stock and stock options to officers and employees of the Company. With respect to the Named Executive Officers, the Committee, in keeping with the compensation philosophy of encouraging the Company’s Named Executive Officers to focus on long-term Company performance and further align the interest of such executive officers with the interests of our stockholders, approved the following equity award grants: Mr. Richardson received an award of 20,000 shares of restricted stock and 20,000 incentive stock options, Ms. Diddell received an award of 20,000 shares of restricted stock and 20,000 incentive stock options, Mr. Peloquin received an award of 10,000 incentive stock options, Mr. Ben received an award of 7,500 shares of restricted stock and 10,000 incentive stock options, and Mr. Ruppert received an award of 10,000 incentive stock options.

  12. 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 (“PvP Rules”) we are providing information regarding the relationship between executive compensation and our financial performance. In determining the Compensation Actually Paid (“CAP”) to our named executive officers, we are required to make various adjustments to amounts that are reported in the Summary Compensation Table (“SCT”), as the SEC’s valuation methods for this section differ from those required in the Summary Compensation Table. For additional information on how the Company aligns executive compensation with Company performance, see Elements of Executive Compensation ─ Annual Cash Incentive Compensation. The table below summarizes compensation values both reported in our Summary Compensation Table, as well as the adjusted values as required by the PvP Rules for fiscal 2024, fiscal 2023, fiscal 2022 and fiscal 2021.

  13. PAY VERSUS PERFORMANCE

    | | | | Average Summary | Average | Value of Initial Fixed $100 | | | | | | | | Compensation | Compensation | Investment Based on: | | | | | | Summary Compensation | Compensation | Table Total For | Actually Paid to | | | | | | | Table Total | Actually Paid | Non-PEO Named | Non-PEO Named | Total | Peer Group Total | | | | Year | for PEO | to PEO | Executive Officers | Executive Officers | Shareholder Return | Shareholder Return | Net Income | Revenue | | 2024 | $1,546,052 | $683,982 | $621,590 | $262,766 | $295 | $119 | $61,000 | $196,460,000 | | 2023 | 1,725,932 | 2,394,545 | 734,117 | 1,045,432 | 449 | 119 | 22,333,000 | 262,658,000 | | 2022 | 1,368,106 | 2,060,566 | 643,663 | 978,487 | 356 | 134 | 17,927,000 | 224,620,000 | | 2021 | 1,230,517 | 1,655,892 | 553,821 | 755,588 | 213 | 178 | 1,655,000 | 176,937,000 |

  14. PAY VERSUS PERFORMANCE

    Mr. Edward J. Richardson served as the Principal Executive Officer (“PEO”) for fiscal 2024, fiscal 2023, fiscal 2022 and fiscal 2021. The Other Non-PEO Named Executive Officers (“non-PEO - NEOs”) for fiscal 2024, fiscal 2023, fiscal 2022 and fiscal 2021 included: Ms. Wendy S. Diddell, Mr. Gregory J. Peloquin, Mr. Robert J. Ben and Mr. Jens F. Rupert. A reconciliation of the total compensation reported in the Summary Compensation Table to the Compensation Actually Paid for fiscal 2024, fiscal 2023, fiscal 2022 and fiscal 2021 for the Company's Principal Executive Officer follows:

  15. PAY VERSUS PERFORMANCE

    | | Fiscal Year | | | | | | 2024 | 2023 | 2022 | 2021 | | Total Compensation, Summary Compensation Table | $1,546,052 | $1,725,932 | $1,368,106 | $1,230,517 | | Deduction for amounts reported under the Stock Awards column in the SCT | (310,200) | (312,000) | (153,200) | (85,200) | | Deduction for Amounts Reported under the Option Awards column in the SCT | (126,600) | (108,800) | (30,000) | (9,800) | | Fair value of unvested Stock Options granted in fiscal year | 126,600 | 108,800 | 30,000 | 9,800 | | Fair value of unvested Stock Award granted in fiscal year | 223,800 | 347,800 | 279,800 | 171,000 | | Change in Fair Value of outstanding Options and Stock Awards granted in prior fiscal years | (665,910) | 517,530 | 418,897 | 227,235 | | Change in Fair Value of outstanding Options and Stock Awards granted in prior fiscal year that vest during the fiscal years | (109,760) | 115,283 | 146,963 | 112,340 | | Compensation Actually Paid | $683,982 | $2,394,545 | $2,060,566 | $1,655,892 |

  16. PAY VERSUS PERFORMANCE

    A reconciliation of the total compensation reported in the Summary Compensation Table to the Compensation Actually Paid for fiscal 2024, fiscal 2023, fiscal 2022 and fiscal 2021 for the Company's Non-PEO Named Executive Officers follows:

  17. PAY VERSUS PERFORMANCE

    | | Fiscal Year | | | | | | 2024 | 2023 | 2022 | 2021 | | Average Compensation, Summary Compensation Table | $621,590 | $734,117 | $643,663 | $553,821 | | Deduction for amounts reported under the Stock Awards column in the SCT | (77,550) | (107,250) | (90,963) | (50,588) | | Deduction for amounts reported under the Option Awards Column in the SCT | (79,125) | (68,000) | (15,563) | (5,084) | | Fair value of unvested Stock Options granted in fiscal year | 79,125 | 68,000 | 15,563 | 5,084 | | Fair value of unvested Stock Award granted in fiscal year | 55,950 | 119,556 | 166,131 | 101,531 | | Change in Fair Value of outstanding Options and Stock Awards granted in prior fiscal years | (282,364) | 231,152 | 195,838 | 104,659 | | Change in Fair Value of outstanding Options Stock Awards granted in prior fiscal years that vest during the fiscal year | (54,860) | 67,857 | 63,817 | 46,165 | | Average of Compensation Actually Paid | $262,766 | $1,045,432 | $978,487 | $755,588 |

  18. Analysis of the Information Presented in the Pay Versus Performance Table

    Analysis of the Information Presented in the Pay Versus Performance Table We generally seek to incentivize long-term performance. Accordingly, compensation actually paid as disclosed in the table above may not specifically align with achievement of performance measures for a particular year. In accordance with the PvP Rules we are providing charts to illustrate the relationships between information presented in the Pay Versus Performance table for net income, revenue and total shareholder return (“TSR”).

  19. Compensation Actually Paid and Net Income

    Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Net Income for fiscal 2024, fiscal 2023, fiscal 2022 and fiscal 2021. CAP vs. Net Income Compensation Actually Paid $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Net Income (dollars in millions) $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 2021 2022 2023 PEO CAP NEO CAP Net Income

  20. Compensation Actually Paid and Revenue

    Compensation Actually Paid and Revenue The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Revenue for fiscal 2024, fiscal 2023, fiscal 2022 and fiscal 2021. CAP vs. Revenue Compensation Actually Paid $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Revenue (dollars in millions) $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2021 2022 2023 PEO CAP NEO CAP Revenue

  21. Compensation Actually Paid and TSR

    Compensation Actually Paid and TSR The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, the Company’s cumulative TSR and the Russell Microcap Technology’s (peer group) TSR for fiscal 2024, fiscal 2023, fiscal 2022 and fiscal 2021. CAP vs. TSR Compensation Actually Paid Total Shareholder Return $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 2021 2022 2023 PEO CAP NEO CAP Company TSR Peer Group TSR

  22. Company TSR and Peer Group TSR

    Company TSR and Peer Group TSR The following chart compares the Company’s cumulative TSR and the Russell Microcap Technology’s (peer group) TSR for fiscal 2024, fiscal 2023, fiscal 2022 and fiscal 2021. Company vs. Peer Group $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 2021 2022 2023 Company TSR Peer Group TSR

  23. Financial Performance Measures

    Financial Performance Measures The most important metrics we use to determine compensation which is discussed in the Compensation Discussion and Analysis within the section of Elements of Executive Compensation are as follows: • Operating income • Revenue Cash and investing activity targets

  24. Summary Compensation Table

    Summary Compensation Table

  25. Summary Compensation Table

    | Name and Principal Position | Fiscal Year | Salary ($) | Restricted Stock Awards ($) (1) | Option Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) (3) | Total ($) | | Edward J. Richardson | 2024 | 919,550 | 310,200 | 126,600 | 176,570 | 13,132 | 1,546,052 | | Chairman of the Board, | 2023 | 880,440 | 312,000 | 108,800 | 411,560 | 13,132 | 1,725,932 | | President and | 2022 | 844,589 | 153,200 | 30,000 | 326,529 | 13,788 | 1,368,106 | | Chief Executive Officer | 2021 | 819,749 | 85,200 | 9,800 | 301,689 | 14,079 | 1,230,517 | | Wendy S. Diddell | 2024 | 489,087 | 310,200 | 126,600 | 93,842 | 42,492 | 1,062,221 | | Executive Vice President | 2023 | 468,798 | 312,000 | 108,800 | 183,287 | 47,923 | 1,120,808 | | and Chief | 2022 | 449,380 | 153,200 | 30,000 | 173,541 | 29,800 | 835,921 | | Operating Officer | 2021 | 436,176 | 85,200 | 9,800 | 160,336 | 33,278 | 724,790 | | Gregory J. Peloquin | 2024 | 402,772 | — | 63,300 | 12,127 | 21,175 | 499,374 | | Executive Vice President Power | 2023 | 386,628 | — | 54,400 | 165,153 | 22,413 | 628,594 | | and Microwave | 2022 | 368,743 | 76,600 | 13,500 | 188,375 | 21,412 | 668,630 | | Technologies Group | 2021 | 357,982 | 42,600 | 4,410 | 130,532 | 19,064 | 554,588 | | Robert J. Ben | 2024 | 339,605 | — | 63,300 | 64,812 | 23,186 | 490,903 | | Chief Financial Officer, Chief | 2023 | 325,580 | 117,000 | 54,400 | 168,780 | 22,199 | 687,959 | | Accounting Officer and | 2022 | 311,589 | 57,450 | 11,250 | 119,853 | 20,291 | 520,433 | | Corporate Secretary | 2021 | 302,465 | 31,950 | 3,675 | 110,735 | 18,277 | 467,102 | | Jens Ruppert (4) | 2024 | 302,464 | — | 63,300 | 51,667 | 16,431 | 433,862 | | Executive Vice President and | 2023 | 280,639 | — | 54,400 | 147,130 | 16,936 | 499,105 | | General Manager, | 2022 | 292,603 | 76,600 | 7,500 | 152,444 | 20,522 | 549,669 | | Canvys | 2021 | 294,012 | 42,600 | 2,450 | 111,043 | 18,700 | 468,805 |

  26. Summary Compensation Table

    (1) Amounts in this column represent the aggregate grant date fair value of stock awards calculated in accordance with Financial Accounting Standards Board ASC topic 718. The amounts reflect our accounting expenses for these awards and do not correspond to the actual value that will be recognized by each named executive officer. For the relevant assumptions used in determining the fair value of stock option awards, refer to Note 3, Significant Accounting Policies and Disclosures - Share-Based Compensation, in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K filed with the SEC on August 5, 2024. (2) Amounts in this column represent annual incentive payments earned for fiscal 2024, 2023, 2022 and 2021 based on incentive goals established at the beginning of each fiscal year and tied to the Company’s financial goals and personal performance measures, and approved by the Compensation and Governance Committee of the Board of Directors. Additional details regarding annual incentive payments made in 2024 are set forth in the Compensation Discussion and Analysis under Annual Cash Incentive Compensation. (3) All Other Compensation for each Named Executive Officer, except Mr. Ruppert, includes: (a) $12,000 annually for car allowance; (b) matching contributions made to the 401(k) plan; and (c) imputed income for each Named Executive Officer, except Mr. Ruppert, group term life insurance in excess of a $50,000 death benefit. For Ms. Diddell, All Other Compensation also includes: (i) $20,051 accrued, but not paid, in fiscal 2024, (ii) $20,259 accrued, but not paid, in fiscal 2023, (iii) $13,754 accrued, but not paid, in fiscal 2022 and (iv) $14,856 accrued, but not paid, in fiscal 2021, in connection with termination payments payable to her. Ms. Diddell’s termination payments are discussed below under the heading Employment Agreements. Mr. Ruppert’s All Other Compensation is entirely related to a car lease paid for by the Company. Amounts have been converted into US Dollars from Euros based on an annual average exchange rate as of the last day of each respective fiscal year.

  27. Grants of Plan Based Awards for Fiscal 2024

    Grants of Plan Based Awards for Fiscal 2024

  28. Grants of Plan Based Awards for Fiscal 2024

    | | | | | | All other Stock Awards; | All other Option Awards; | Exercise | Base Price of | Grant Date Fair Value of Restricted Stock | | | Estimated Future Payments Under Equity Incentive Plan Awards | | | | Number of Shares of | Number of Securities | or Base Price of | Restricted Stock | Awards and | | Name | Threshold ($) | Target ($) | Maximum ($) | Grant Date | Stock or Units (#) | Underlying Options (#) | Option Awards | Awards ($/Sh) (1) | Options ($) (2) | | Edward J. Richardson | 87,537 | 350,148 | 525,221 | 7/17/23 | 20,000 | 20,000 | 15.51 | 15.51 | 436,800 | | Wendy S. Diddell | 46,523 | 186,092 | 279,138 | 7/17/23 | 20,000 | 20,000 | 15.51 | 15.51 | 436,800 | | Gregory Peloquin | 50,500 | 202,000 | 302,999 | 7/17/23 | — | 10,000 | 15.51 | 15.51 | 63,300 | | Robert J. Ben | 32,131 | 128,523 | 192,784 | 7/17/23 | — | 10,000 | 15.51 | 15.51 | 63,300 | | Jens F. Ruppert | 39,083 | 156,332 | 234,498 | 7/17/23 | — | 10,000 | 15.51 | 15.51 | 63,300 |

  29. Grants of Plan Based Awards for Fiscal 2024

    The base price of restricted stock awards is equal to the closing price of our common stock on the date of grant, as reported on Nasdaq. The amounts represent the aggregate grant date fair value computed in accordance with ASC Topic 718 pursuant to Item 402 of Regulation S-K.

  30. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The following table sets forth information on the holdings of stock option and restricted stock awards by the Named Executive Officers as of the end of fiscal 2024.

  31. Outstanding Equity Awards at Fiscal Year End

    | | Option Awards | | | | Restricted Stock Awards | | | Name | Number of Securities Underlying Unexercised Options Exercisable (#) (1) | Number of Securities Underlying Unexercised Options Unexercisable (#) (1) | Option Exercise Price ($) | Option Expiration Date (2) | Number of Shares or Units of Stock That Have Not Vested (#) (3) | Market Value of Shares or Units of Stock That Have Not Vested ($) (4) | | Edward J. Richardson | 16,000 | 4,000 | 5.61 | 7/22/29 | — | — | | | 12,000 | 8,000 | 4.26 | 7/21/30 | — | — | | | 8,000 | 12,000 | 7.66 | 7/19/31 | — | — | | | 4,000 | 16,000 | 15.60 | 7/18/32 | — | — | | | — | 20,000 | 15.51 | 7/17/33 | 40,001 | 447,611 | | Wendy S. Diddell | — | 4,000 | 5.61 | 7/22/29 | — | — | | | — | 8,000 | 4.26 | 7/21/30 | — | — | | | — | 12,000 | 7.66 | 7/19/31 | — | — | | | 4,000 | 16,000 | 15.60 | 7/18/32 | — | — | | | — | 20,000 | 15.51 | 7/17/33 | 40,001 | 447,611 | | Gregory J. Peloquin | 1,800 | 1,800 | 5.61 | 7/22/29 | — | — | | | 1,800 | 3,600 | 4.26 | 7/21/30 | — | — | | | 3,600 | 5,400 | 7.66 | 7/19/31 | — | — | | | 2,000 | 8,000 | 15.60 | 7/18/32 | — | — | | | — | 10,000 | 15.51 | 7/17/33 | 3,334 | 37,307 | | Robert J. Ben | 1,500 | 1,500 | 5.61 | 7/22/29 | — | — | | | 1,500 | 3,000 | 4.26 | 7/21/30 | — | — | | | 1,500 | 4,500 | 7.66 | 7/19/31 | — | — | | | 2,000 | 8,000 | 15.60 | 7/18/32 | — | — | | | — | 10,000 | 15.51 | 7/17/33 | 7,500 | 83,925 | | Jens F. Ruppert | 6,000 | — | 9.10 | 8/20/28 | — | — | | | 1,000 | 1,000 | 5.61 | 7/22/29 | — | — | | | 3,000 | 2,000 | 4.26 | 7/21/30 | — | — | | | 2,000 | 3,000 | 7.66 | 7/19/31 | — | — | | | 2,000 | 8,000 | 15.60 | 7/18/32 | — | — | | | — | 10,000 | 15.51 | 7/17/33 | 3,334 | 37,307 |

  32. Outstanding Equity Awards at Fiscal Year End

    (1) Options vest on the anniversary of the grant date and become exercisable in annual increments of 20%. (2) The expiration date of each option occurs ten years after the date of grant of each option. The table below provides the grant date for each outstanding equity award at the end of the 2024 fiscal year and the respective vesting schedule. (3) Restricted stock awards vest on the anniversary of the grant date in three equal installments. The market value is based on the closing market price of the Company as of May 31, 2024 (the last trading day prior to the Company’s fiscal year end), being $11.19 per share. The table below provides the grant date for each outstanding equity award at the end of the 2024 fiscal year, total award, vesting years, vested shares and remaining vesting schedule.

  33. Outstanding Equity Awards at Fiscal Year End

    | Name | Grant Date (1) | Number of Stock Options Granted | Number of Restricted Stock Awards | Vesting Years | Vested Shares | Fiscal 2025 | Fiscal 2026 | Fiscal 2027 | Fiscal 2028 | Fiscal 2029 | | Edward J. Richardson | 7/22/2019 | 20,000 | — | 5 | 16,000 | 4,000 | — | — | — | — | | | 7/21/2020 | 20,000 | — | 5 | 12,000 | 4,000 | 4,000 | — | — | — | | | 7/21/2020 | — | 20,000 | 3 | 20,000 | — | — | — | — | — | | | 7/19/2021 | 20,000 | — | 5 | 8,000 | 4,000 | 4,000 | 4,000 | — | — | | | 7/19/2021 | — | 20,000 | 3 | 13,333 | 6,667 | — | — | — | — | | | 7/18/2022 | 20,000 | — | 5 | 4,000 | 4,000 | 4,000 | 4,000 | 4,000 | — | | | 7/18/2022 | — | 20,000 | 3 | 6,666 | 6,667 | 6,667 | — | — | — | | | 7/17/2023 | 20,000 | — | 5 | — | 4,000 | 4,000 | 4,000 | 4,000 | 4,000 | | | 7/17/2023 | — | 20,000 | 3 | — | 6,666 | 6,667 | 6,667 | — | — | | Wendy S. Diddell | 7/22/2019 | 20,000 | — | 5 | 16,000 | 4,000 | — | — | — | — | | | 7/21/2020 | 20,000 | — | 5 | 12,000 | 4,000 | 4,000 | — | — | — | | | 7/21/2020 | — | 20,000 | 3 | 20,000 | — | — | — | — | — | | | 7/19/2021 | 20,000 | — | 5 | 8,000 | 4,000 | 4,000 | 4,000 | — | — | | | 7/19/2021 | — | 20,000 | 3 | 13,333 | 6,667 | — | — | — | — | | | 7/18/2022 | 20,000 | — | 5 | 4,000 | 4,000 | 4,000 | 4,000 | 4,000 | — | | | 7/18/2022 | — | 20,000 | 3 | 6,666 | 6,667 | 6,667 | — | — | — | | | 7/17/2023 | 20,000 | — | 5 | — | 4,000 | 4,000 | 4,000 | 4,000 | 4,000 | | | 7/17/2023 | — | 20,000 | 3 | — | 6,666 | 6,667 | 6,667 | — | — | | Gregory J. Peloquin | 7/22/2019 | 9,000 | — | 5 | 7,200 | 1,800 | — | — | — | — | | | 7/21/2020 | 9,000 | — | 5 | 5,400 | 1,800 | 1,800 | — | — | — | | | 7/21/2020 | — | 10,000 | 3 | 10,000 | — | — | — | — | — | | | 7/19/2021 | 9,000 | — | 5 | 3,600 | 1,800 | 1,800 | 1,800 | — | — | | | 7/19/2021 | — | 10,000 | 3 | 6,666 | 3,334 | — | — | — | — | | | 7/18/2022 | 10,000 | — | 5 | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | — | | | 7/17/2023 | 10,000 | — | 5 | — | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | | Robert J. Ben | 7/22/2019 | 7,500 | — | 5 | 6,000 | 1,500 | — | — | — | — | | | 7/21/2020 | 7,500 | — | 5 | 4,500 | 1,500 | 1,500 | — | — | — | | | 7/21/2020 | — | 7,500 | 3 | 7,500 | — | — | — | — | — | | | 7/19/2021 | 7,500 | — | 5 | 3,000 | 1,500 | 1,500 | 1,500 | — | — | | | 7/19/2021 | — | 7,500 | 3 | 5,000 | 2,500 | — | — | — | — | | | 7/18/2022 | 10,000 | — | 5 | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | — | | | 7/18/2022 | — | 7,500 | 3 | 2,500 | 2,500 | 2,500 | — | — | — | | | 7/17/2023 | 10,000 | — | 5 | — | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | | Jens F. Ruppert | 8/20/2018 | 15,000 | — | 5 | 15,000 | — | — | — | — | — | | | 7/22/2019 | 5,000 | — | 5 | 4,000 | 1,000 | — | — | — | — | | | 7/21/2020 | 5,000 | — | 5 | 3,000 | 1,000 | 1,000 | — | — | — | | | 7/21/2020 | — | 10,000 | 3 | 10,000 | — | — | — | — | — | | | 7/19/2021 | 5,000 | — | 5 | 2,000 | 1,000 | 1,000 | 1,000 | — | — | | | 7/19/2021 | — | 10,000 | 3 | 6,666 | 3,334 | — | — | — | — | | | 7/18/2022 | 10,000 | — | 5 | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | — | | | 7/17/2023 | 10,000 | — | 5 | — | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 |

  34. Outstanding Equity Awards at Fiscal Year End

    Share vest over the vesting period on the anniversary of the grant date.

  35. Option Exercises and Stock Vested

    Option Exercises and Stock Vested The following table provides information for fiscal 2024 for our Named Executive Officers on stock option exercises during fiscal 2024, including the number of shares acquired on exercise, and the vesting of restricted stock, and, in each case, the values realized therefrom.

  36. Option Exercises and Stock Vested

    | | Option Awards | | Stock Awards | | | | Number of Shares | Value Realized | Number of Shares | Value Realized | | | Acquired on Exercise | on Exercise | Acquired at Vesting | on Vesting | | Name | (#) | ($) | (#) | ($) | | Edward J. Richardson | — | $— | 20,000 | $299,666 | | Wendy S. Diddell | 24,000 | 167,738 | 20,000 | 299,666 | | Gregory J. Peloquin | 25,000 | 14,458 | 6,667 | 96,570 | | Robert J. Ben | — | — | 7,500 | 112,375 | | Jens F. Ruppert | — | — | 6,667 | 96,570 |

  37. Potential Payment upon Termination or Change in Control

    Potential Payment upon Termination or Change in Control The following table shows potential payments to our Named Executive Officers under existing contracts, agreements, plans or arrangements for various scenarios under termination or a change in control, assuming a June 1, 2024 termination date or change in control. Such payments are subject to the terms of the employment agreements as described above.

  38. Potential Payment upon Termination or Change in Control

    | Name | Termination for Cause or Voluntary Termination without Good Reason | Voluntary Termination for Good Reason by Executive | Death | Disability | Termination without Cause by Company | Change in Control with Termination by Executive | Termination by Executive for any Reason | | Edward J. Richardson | $— | $— | $— | $— | $— | $— | $— | | Wendy S. Diddell | 505,657 | 505,657 | — | — | 505,657 | 505,657 | 505,657 | | Gregory J. Peloquin | — | — | — | — | 403,999 | — | — | | Robert J. Ben | — | — | — | — | 342,727 | 342,727 | — | | Jens F. Ruppert | — | — | — | — | 156,332 | — | — |

  39. Potential Payment upon Termination or Change in Control

    Such payments are subject to the terms of the employment agreement as described above and, further, commencement of such payments may be delayed following an executive’s termination to comply with Section 409A of the Internal Revenue Code.

  40. 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 about the relationship of the annual compensation of our Chief Executive Officer and the annual total compensation of our median employee, as of June 1, 2024. For our fiscal year 2024, the total annual compensation of our median employee was $68,000. As reported in the Summary Compensation Table, the annual total compensation for our CEO for fiscal 2024 was $1,546,000. Based on this information, the ratio of annual total compensation of our CEO to the median employee was 23:1. We identified the median employee in fiscal 2024 by examining the fiscal 2024 total taxable compensation for all individuals who were employed by us on June 1, 2024 (excluding our CEO and excluding certain employees who had not yet been paid as of that date given their recent start date). We believe our use of total taxable compensation for these employees was appropriate because taxable income is a consistently applied compensation measure and the information is reasonably ascertainable. After identifying the median employee based on total taxable compensation, we calculated the employee’s annual total compensation using the same methodology we use for our named executive officers as set forth in the Summary Compensation Table. The CEO pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodologies and assumptions described above. SEC rules for identifying the median employee and determining the CEO pay ratio permit companies to employ a wide range of methodologies, estimates and assumptions. As a result, the CEO pay ratios reported by other companies, which may have employed other permitted methodologies or assumptions and which may have a significantly different work force structure from ours, are likely not comparable to our CEO pay ratio.