DEF 14A of Aspen Aerogels Inc
Filed Mar 17, 2025 · FY20240000950170-25-040250
Stockholder Engagement Regarding Executive Compensation and Actions Taken in Response
| What We Heard: | What We Did | | Stockholders prefer that a meaningful portion of our executives’ long-term incentive opportunities be tied to the achievement of financial performance objectives, as a part of our regular annual long-term incentive grant cycle (as opposed to special awards). | With the 2025 long-term incentive awards, the compensation program will include Performance Share Units (“PSUs”) that are tied to total shareholder return (“TSR”) performance. These 2025 grants will reflect a mix of 50% PSUs, 25% stock options and 25% restricted stock units (“RSUs”). This change further aligns executive incentives with shareholder interests by linking 50% of each NEO’s long-term incentive opportunity to the Company’s TSR performance relative to the other constituents of the Russell 2000 Index. For more information about these awards, see “2025 Long-Term Incentive Grant Cycle” on page 37. | | Stockholders appreciate rigorous limits on maximum annual bonus payouts. | Beginning in 2024, funding of the Corporate Bonus Plan financial performance objectives (revenue and Adjusted EBITDA), calculated independently, were redesigned to limit the maximum |
Stockholder Engagement Regarding Executive Compensation and Actions Taken in Response
| | funding, respectively, and overall bonus payout levels to 225% of the target bonus. Beginning in 2025, maximum funding and overall bonus payout levels are limited to 200% of the target bonus. | | Stockholders appreciate clear disclosure regarding achievement of performance objectives. | Starting with the 2024 Proxy Statement, we enhanced our disclosures regarding the achievement of performance objectives and corresponding payouts under our Corporate Bonus Plan. | | Stockholders expect executive compensation programs to include robust governance features. | During 2024, we amended our Stock Ownership Guidelines to increase the required ownership levels (from 3 times to 5 times base salary for the Chief Executive Officer, from 1 times to 2 times base salary for other executives reporting to the Chief Executive Officer, and from 3 times to 4 times annual cash retainer for non-employee directors), and we adopted an Equity Grant Policy to formalize our policies and procedures regarding the grant of equity compensation awards. |
The Role of Our Compensation Committee and Compensation Consultant
The Role of Our Compensation Committee and Compensation Consultant Generally, our Compensation Committee designs and administers the executive compensation program with the collaboration of management and an independent compensation consultant. In connection with the compensation of our Chief Executive Officer, our Compensation Committee further recommends the overall and specific elements to our Board for consideration and final determination. While the Compensation Committee addresses the matters related to its responsibilities under its charter throughout the year, annual reviews and, as appropriate, modifications of compensation arrangements for executive officers typically take place during a period starting from the last quarter of the prior fiscal year through the first quarter of the current fiscal year. While the Compensation Committee or the Board, in the case of our Chief Executive Officer, ultimately makes all final decisions on executive compensation, the Compensation Committee engages the services of outside advisors for assistance. In each of our last three fiscal years, the Compensation Committee directly engaged Meridian Compensation Partners LLC (“Meridian”) as its independent compensation consultant. The Compensation Committee utilized Meridian throughout these periods to provide independent, objective research, analysis, and advice and to assist the Compensation Committee generally in the performance of its duties. The Compensation Committee will typically request information and recommendations directly from the compensation consultant as it deems appropriate to structure and evaluate our executive compensation program. The Compensation Committee assesses the independence of its compensation consultant each year, considering the amount of fees paid to Meridian, the policies designed to prevent conflicts of interest, any Company stock owned by the consultant, and other factors that may be relevant to the Compensation Committee. The Compensation Committee considers external market data when making compensation decisions concerning executive pay levels and program design. The committee has formally approved a peer group for this purpose (and also considers other market data sources as appropriate). The peer group was originally developed by Meridian out of a candidate pool of size (as measured principally by revenue and market capitalization) and industry-appropriate publicly-traded companies. Our Compensation Committee periodically reviews and, as appropriate, revises the peer group in coordination with input from our Chief Executive Officer and Meridian to ensure the group remains appropriate for the purposes of comparing executive compensation. As a basis for the source market data for setting executive compensation for fiscal year 2024, our peer group consisted of the following 20 companies:
The Role of Our Compensation Committee and Compensation Consultant
| Allegro Microsystems, Inc. | Microvast Holdings, Inc. | Shoals Technologies Group, Inc. | | Babcock & Wilcox Enterprises, Inc. | NN, Inc. | Stem, Inc. | | Ballard Power Systems, Inc. | Omega Flex, Inc. | Thermon Group Holdings, Inc. | | Energy Recovery, Inc. | Orion Energy Systems, Inc. | Ultralife Corporation | | Flux Power Holdings, Inc. | Preformed Line Products Company | Vicor Corporation | | FuelCell Energy, Inc. | Proterra, Inc. | Stem, Inc. | | Graham Corporation | Rogers Corporation | |
The Role of Our Compensation Committee and Compensation Consultant
In August 2024, the Compensation Committee, with the advice and assistance of Meridian, further reviewed the peer group and approved an updated peer group, for purposes of benchmarking of executive compensation for fiscal 2025, and to align with the updated compensation philosophy approved by the Compensation Committee at the same meeting, by focusing our peer group on publicly-traded higher-technology, higher-growth, profitable companies in the manufacturing and energy sectors. After considering Meridian’s recommendations, the Compensation Committee determined to update our executive compensation peer group by removing the following companies: Ballard Power Systems, Inc., Flux Power Holdings, Inc., FuelCell Energy, Inc., Graham Corporation, Microvast Holdings, Inc., NN, Inc., Omega Flex, Inc., Orion Energy Systems, Inc., Preformed Line Products Company, Proterra, Inc., Stem, Inc., and Ultralife Corporation; and adding the following companies: Array Technologies, Inc., Blink Charging Co., Bloom Energy Corporation, ChargePoint Holdings, Inc., Enphase Energy, Inc., Hexcel Corporation, indie Semiconductor, Inc., Plug Power, Inc., and Wolfspeed, Inc. As a result, effective August 13, 2024 our updated peer group for purposes of stetting executive compensation consists of the following 16 companies:
The Role of Our Compensation Committee and Compensation Consultant
| Allegro Microsystems, Inc. | Energy Recovery, Inc. | Shoals Technologies Group, Inc. | | Array Technologies, Inc. | Enphase Energy, Inc. | Thermon Group Holdings, Inc. | | Babcock & Wilcox Enterprises, Inc. | Hexcel Corporation | Vicor Corporation | | Blink Charging Co. | indie Semiconductor, Inc. | Wolfspeed, Inc. | | Bloom Energy Corporation | Plug Power, Inc. | | | ChargePoint Holdings, Inc. | Rogers Corporation | |
The Role of Our Compensation Committee and Compensation Consultant
We believe our peer group provides useful information to help us establish competitive compensation practices and allows us to set compensation levels to attract, retain and motivate a talented executive team while further aligning the interests of our executives with those of our stockholders. The group is subject to change over time, and we expect that the Compensation Committee will continue to periodically review and update the list.
Main Elements of Our Executive Compensation Program
(1) Mr. Whitaker’s annual base salary increased from $400,000, effective April 1, 2024, based on Mr. Whitaker’s role as Senior Vice President, Marketing and Sales and a review of both internal and external peers. Corporate Bonus Plan Our Corporate Bonus Plan is designed to provide annual cash incentive bonus opportunities to motivate and reward our executives for achieving certain corporate, financial and other business performance goals during the fiscal year, and the plan is administered by the Compensation Committee. For 2024, the plan provides that executives are eligible to receive a cash bonus over an annual performance period based on both (a) financial goals established by the Compensation Committee, which may include revenue goals, an Adjusted EBITDA goal and/or such other financial goals as may be established by the Compensation Committee from time to time, and (b) personal performance against individual goals and objectives established for each executive at the beginning of the year. The Compensation Committee determines the percentage of annual base salary as target bonus opportunity for each executive and the threshold, target and maximum achievement levels applicable to each goal; with funding of each goal calculated independently and ranging from 0% to 225%. Following completion of the performance period, the administrator determines the level of performance achieved for each financial goal. Each executive’s bonus may be further increased or decreased (by the Board for the CEO and by the Compensation Committee, with input from the CEO, for the other NEOs) by a range of 0% to 125% based on an assessment of each executive’s performance against respective individual goals and objectives. The maximum bonus that can be earned is limited to 225% of the target bonus. For 2025, the Corporate Bonus Plan has been amended to limit funding and overall payouts to 200% of the target bonus. Effective January 1, 2024, the Corporate Bonus Plan was amended to (i) require participants generally to remain employed in good standing through the bonus payment date (rather than merely through the end of the fiscal year) in order to receive any bonus payment for the fiscal year, (ii) explicitly provide that bonuses are subject to forfeiture or recovery pursuant to the Company’s Compensation Recoupment Policy, and (iii) enhance the Compensation Committee’s administrative authority, including the ability to exercise so-called “negative discretion” to reduce payouts to plan participants. The Compensation Committee also reserves the right to pay discretionary bonuses to account for unanticipated, unusual or extraordinary circumstances or performance. We define “Adjusted EBITDA” as net income (loss) before interest expense, taxes, depreciation, amortization, stock-based compensation expense and other items, from time to time, which we do not believe are indicative of our core operating performance, which items are discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Form 10-K for the applicable fiscal year. The Compensation Committee (or the Board, with respect to the CEO’s bonus opportunity) approved the target bonus amounts and company financial and individual performance goals under the Corporate Bonus Plan for fiscal year 2024 for the named executive officers. Each named executive officer’s 2024 bonus award amount, calculated as a percentage of year-end base salary, was based on achieving and exceeding the approved financial performance goals of revenue and Adjusted EBITDA, with 25% of the target bonus opportunity allocated to the revenue performance goal and 75% of the target bonus opportunity allocated to the Adjusted EBITDA performance goal. For the revenue and Adjusted EBITDA goals, the Compensation Committee (or the Board, with respect to the CEO’s bonus opportunity) established a threshold value (the “Threshold”) that must be achieved before any bonus amount would be paid out, a target value (the “Target”) associated with a target bonus amount, and an incentive amount if the Target is exceeded (up to the maximum potential award of 225% of the Target). We believe that the target levels approved for the revenue and Adjusted EBITDA goals are rigorous yet attainable, and aligned with stockholder interests. There were no mid-year adjustments to the revenue or Adjusted EBITDA financial performance objectives established by the Compensation Committee (or the Board, with respect to the CEO’s bonus opportunity) for 2024. For 2024, the target bonus amount established for our Chief Executive Officer remained unchanged from 2023, while the target bonus amounts of our other named executive officers were increased from 55% of base salary for 2023 to 60% of base salary for 2024, based upon the Compensation Committee’s assessment of market data provided by Meridian. The target bonus amounts for fiscal year 2024 for our named executive officers, expressed as a percentage of their year-end base salary, are presented below.
Main Elements of Our Executive Compensation Program
| Name | 2024 Target Bonus Opportunity (% of Base Salary) | | Donald R. Young | 110% | | Ricardo C. Rodriguez | 60% | | Virginia H. Johnson | 60% | | Corby C. Whitaker | 60% | | Gregg R. Landes | 60% | | Stephanie Pittman | 60% |
2024 Cash Bonus Performance Summary
2024 Cash Bonus Performance Summary
2024 Cash Bonus Performance Summary
| | | Performance Goals | | | Actual Results | | | | Measure | Weight | Threshold ($) | Target ($) (000s) | Max ($) (000s) | Actual ($) (000s) | Payout (%) | | | Revenue | 25% | $360,000 | 400,000 | $480,000 | $452,699 | 182% | | | Adjusted EBITDA | 75% | $- | 34,000 | $78,000 | $97,596 | 225% | | | | | | | | Weighted Payout: | 214.3% | 1,2 |
2024 Cash Bonus Performance Summary
(1) Maximum potential award under the Corporate Bonus Plan is 225% of the target. (2) Individual payouts can range from 0% - 125% of company funding to account for individual performance; overall payouts are capped to 225% of the Target. In February 2025, after reviewing the level of achievement of the financial performance metrics set out above and an assessment of the executive’s performance against respective individual goals and objectives each named executive officer (by the Board for the CEO and by the Compensation Committee, with the CEO’s input, for the other NEOs), the Compensation Committee awarded bonus payments to the named executive officers other than the Chief Executive Officer, and the Board, after considering the recommendation of the Compensation Committee, awarded a bonus payment to our Chief Executive Officer. The 2024 bonus payments under the Corporate Bonus Plan are set forth below:
2024 Cash Bonus Performance Summary
| Name | 2024 Target Bonus (%) | 2024 Bonus Target Received (%)(1) | 2024 Annual Cash Bonus Received ($)(1) | | Donald R. Young | 110% | 225% | $1,274,625 | | Ricardo C. Rodriguez | 60% | 225% | $540,000 | | Virginia H. Johnson | 60% | 225% | $607,500 | | Corby C. Whitaker | 60% | 225% | $594,000 | | Gregg R. Landes | 60% | 225% | $540,000 | | Stephanie Pittman | 60% | 225% | $540,000 |
2024 Cash Bonus Performance Summary
(1) Bonus payouts reflect company funding of 214.3% modified by individual performance. Long Term Equity Incentive Plan At the 2023 annual meeting of stockholders, our stockholders approved the Aspen Aerogels 2023 Equity Incentive Plan (the “2023 Plan”) as the successor to our 2014 Employee, Director and Consultant Equity Incentive Plan (the “2014 Plan”). The Compensation Committee is the administrator of the 2023 Plan, which authorizes the Compensation Committee to grant a variety of equity and equity-based incentive awards to our officers, key employees, non-employee directors and consultants. Similar to other components of compensation, the Compensation Committee recommends the equity grants for our Chief Executive Officer to our Board for approval. The Compensation Committee, based on its annual review of compensation levels for each of our executives, determines a dollar amount value of the annual equity grants. The Compensation Committee also determines the mix of equity instruments for equity grants issued pursuant to the 2023 Plan, such as options to purchase our common stock, restricted stock units (“RSUs”), or performance share units, as well as the appropriate vesting schedule, consistent with the terms of the 2023 Plan. For 2024, the mix for equity grants under our regular annual long-term incentive grant program remained at 75% stock options and 25% RSUs for our named executive officers. 2025 Long-Term Incentive Grant Cycle For 2025, equity grants under our regular annual long-term incentive grant program for our named executive officers will now reflect a mix of 50% PSUs, 25% stock options and 25% RSUs. PSUs granted in 2025 have a 3-year performance period and vesting based on the Company’s TSR performance relative to the other constituents of the Russell 2000 Index. This change was introduced to further align executive incentives with shareholder interests by linking rewards to the company’s market performance relative to peers within a segment index. The key design elements and objectives of the 2025 equity grant are highlighted below:
2024 Cash Bonus Performance Summary
| LTI Component | Design | Objective | | Performance Share Units (PSUs) | • 3-year performance period (i.e., cliff vesting) • Relative Total Share Return (rTSR) performance against the constituents of Russell 2000 Index (equally weighted) • Performance payout scale ranging from 0-200% | • Strengthens alignment with shareholder interests by linking rewards to company’s long-term market performance relative to peers within a segment index. | | Stock Options | • Exercise price equal to fair value on grant date • Vest ratably over three years with 10-year term | • Focus on absolute stock price appreciation over long-term horizon. | | Restricted Stock Units (RSUs) | • Vest ratably over three years with 10-year term | • Provide for level of retention and ability to fulfill stock ownership requirements. |
2024 Cash Bonus Performance Summary
Policies and Practices Related to the Grant of Equity Awards The Company does not schedule the grant of stock options or other equity awards in anticipation of the release of material nonpublic information, nor does the Company time the release of material nonpublic information based on the timing of grants of stock options or other equity awards. Prior to May 30, 2024, we did not have any formal policy that would require us to grant, or avoid granting, equity-based compensation to our executive officers at certain times. However, as part of our regular annual long-term incentive grant process, the Board and Compensation Committee generally have granted equity awards (including stock options) to our CEO and other named executive officers, respectively, at their meetings in or around March of each fiscal year. The dates for those Board and Committee meetings generally are set more than a year in advance and on a fairly consistent cadence year over year. The dates of these Board and Compensation Committee meetings generally occur well after we have issued our earnings release announcing our fourth quarter and full year financial results; however, as was the case with the Board and Compensation Committee meetings held in March 2024, these meetings may occur closer in time to the filing of our Annual Report on Form 10-K, which we generally do not believe includes additional material information beyond what we disclosed in our earnings release. On May 30, 2024, the Board adopted an Equity Grant Policy, to formalize our policies and procedures with respect to the granting of equity compensation awards. The Equity Grant Policy establishes the following general guidelines for the grant of equity compensation awards: (i) equity awards generally will not be granted when the Company is in possession of material nonpublic information; (ii) equity awards generally will not be granted during the period commencing four business days before a periodic or current report filed with the Securities and Exchange Commission that discloses material nonpublic information and ending one business day after the filing or furnishing of such report; (iii) the Company will not purposely accelerate or delay the public release of material nonpublic information, or the grant date of any equity award, with the intention of allowing the grantee of an equity award to benefit from a more favorable stock price; and (iv) in no event will the grant date of any equity award be prior to the date of approval of the award. Further, pursuant to the Equity Grant Policy: • Annual grants of equity awards to the Chief Executive Officer generally will be approved by the Board at its meeting held in or around March of each year, and unless otherwise determined by the Board, the grant date of each annual award to the Chief Executive Officer will be the date of approval of the award by the Board; • Annual grants of equity awards to other officers and employees of the Company generally will be approved by the Committee at its meeting held in or around March of each year, and unless otherwise determined by the Committee, the grant date of each such award will be the later of (i) the date of approval of the award by the Committee, or (ii) the grant date of the annual equity award to the Chief Executive Officer for that year, as approved by the Board; Annual grants of equity awards to non-employee directors shall be approved by the Board in accordance with the Company’s Non-Employee Director Compensation Policy. Grants of equity awards in connection with new hires or promotions of employees or consultants or bonus awards generally will be approved on a regularly monthly basis (and may be approved by the Chief Executive Officer where permitted pursuant to delegated authority), and the grant date of such awards generally will be the last trading day of the month in which the award is approved; and Any other special or discretionary equity awards will be approved as of such date as determined by the Compensation Committee or the Board, in accordance with the general principles of the Equity Grant Policy. Consistent with our historic practices, the Board and the Compensation Committee granted equity awards, including stock options, to the CEO and the other named executive officers, respectively, at meetings held on March 5, 2024, which date was within the period beginning four business days before and ending one business day after the filing of a periodic report on Form 10-K or Form 10-Q (our annual report on Form 10-K for the 2023 fiscal year was filed on March 7, 2024) or the filing or furnishing of a current report on Form 8-K that disclosed material nonpublic information (other than a current report on Form 8-K disclosing a material new stock option award under Item 5.02(e) of such Form 8-K), and ending one business day after the filing or furnishing of such report. Pursuant to SEC Rules, we are providing the following information relating to stock options granted to our named executive officers during fiscal year 2024:
2024 Cash Bonus Performance Summary
| Name | Grant Date | Number of Securities Underlying the Award (#) | Exercise Price ($) | Grant Date Fair Value of the Award ($) | Percentage Change in the Closing Market Price of the Securities Underlying the Award Between the Trading Day Ending Immediately Prior to the Disclosure of Material Nonpublic and the Trading Day Beginning Immediately Following the Disclosure of Material Nonpublic Information (1) | | Donald R. Young | 3/5/2024 | 87,284 | 16.34 | $974,990 | (2.52)% | | Ricardo C. Rodriguez | 3/5/2024 | 35,249 | 16.34 | $393,743 | (2.52)% | | Virginia H. Johnson | 3/5/2024 | 35,249 | 16.34 | $393,743 | (2.52)% | | Corby C. Whitaker | 3/5/2024 | 35,249 | 16.34 | $393,743 | (2.52)% | | Gregg R. Landes | 3/5/2024 | 35,249 | 16.34 | $393,743 | (2.52)% | | Stephanie Pittman | 3/5/2024 | 35,249 | 16.34 | $393,743 | (2.52)% |
2024 Cash Bonus Performance Summary
(1) The table requires disclosure of these option grants; however, we do not believe that the heading of this column applies to the filing of our Annual Report on Form 10-K for the year ended December 31, 2023, which we do not believe contained any material, non-public information, because the material nonpublic information about that fiscal year was reported when we released earnings on February 12, 2024. Cancellation of Unearned SEIG Awards As previously disclosed, on March 5, 2024, the Compensation Committee approved the cancellation of the outstanding, unearned portion of certain performance-based restricted stock awards that had been granted as special equity incentive grants (“SEIG Awards”) to certain key employees (including all of the named executive officers other than Ms. Pittman) pursuant to the 2014 Plan on June 29, 2021 (to Mr. Young) and on June 2, 2022 (to the other applicable employees).The Compensation Committee determined that based on market conditions, the likelihood of achievement of any of the remaining performance hurdles applicable to the unearned SEIG Awards was remote, that the unearned SEIG Awards therefore had ceased to have incentive value for the grantees, and that by cancelling the unearned SEIG Awards, the underlying shares of common stock would be added to the pool of shares available for future awards under the 2023 Plan in a responsible exercise of stewardship of shareholder value. Accordingly, on March 6, 2024, the Company entered into cancellation agreements, pursuant to which the applicable employees agreed to the cancellation of the unearned SEIG Awards, with 304,666 shares of unearned restricted stock held by Mr. Young being cancelled and 53,590 shares of unearned restricted stock held by each of Messrs. Rodriguez, Whitaker and Landes and Ms. Johnson being cancelled. The performance hurdle applicable to 156,950 of the shares of restricted stock subject to Mr. Young’s 2021 SEIG Award was achieved in December 2021, and those 156,950 earned shares of restricted stock remained outstanding until vesting, based on Mr. Young’s continued service with the Company, on June 29, 2024. Other Aspects of Executive Compensation Benefits and Perquisites - In addition to the components described above, our executives are eligible to participate in other benefits available to all of our employees. These benefits include a 401(k) plan with a Company match element, healthcare insurance with a Company contribution to the premium, short-term and long-term disability insurance, term-life insurance, a dental plan and a vision plan. We generally do not provide perquisites or personal benefits to our named executive officers. However, we do pay a portion of the premiums for medical, dental, group term life, disability and accidental death and dismemberment insurance for all of our full-time employees. Section 401(k) Plan - We maintain a defined contribution employee retirement plan, or the 401(k) Plan, for our employees. Our executive officers are eligible to participate in the 401(k) Plan on the same basis as our other employees. The 401(k) Plan is intended to qualify as a tax-qualified plan under Section 401(a) of the Internal Revenue Code of 1986, as amended. The 401(k) Plan provides that each participant may contribute up to the lesser of 100% of their compensation or the statutory limit, which was $23,000 for calendar year 2024. Participants that are 50 years or older can also make “catch-up” contributions, which in calendar year 2024 may have been up to an additional $7,500 above the statutory limit. We currently make matching contributions into the 401(k) Plan on behalf of participants. We match 50% of eligible contributions up to the first 6% of eligible compensation. Participant contributions are held and invested, pursuant to the participant’s instructions, by the plan’s trustee. Employment Contracts - We have entered into an executive employment agreement with our Chief Executive Officer, Mr. Young, which was amended and restated effective August 30, 2024. We have also entered into executive employment agreements with Messrs. Rodriguez, Whitaker and Landes and Mmes. Johnson and Pittman.
Summary Compensation Table
Summary Compensation Table The following table shows the total compensation paid or accrued to our named executive officers during the last three fiscal years ended December 31, 2024, 2023 and 2022.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | Option Awards ($) (1) | Non- Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) (3) | Total ($) | | Donald R. Young | 2024 | 515,000 | — | 324,986 | 974,990 | 1,274,625 | 10,350 | 3,099,951 | | President and Chief Executive Officer | 2023 | 515,000 | — | 249,995 | 1,496,426 | 1,331,275 | 33,335 | 3,626,031 | | | 2022 | 515,000 | — | 249,992 | 749,990 | 804,011 | 44,425 | 2,363,418 | | Ricardo C. Rodriguez | 2024 | 400,000 | | 131,243 | 393,743 | 540,000 | 10,350 | 1,475,336 | | Chief Financial Officer and Treasurer | 2023 | 386,539 | — | 112,494 | 710,712 | 517,000 | 25,285 | 1,752,030 | | | 2022 | 350,000 | — | 683,696(5) | 337,481 | 249,246 | 9,150 | 1,629,573 | | Virginia H. Johnson | 2024 | 450,000 | — | 131,243 | 393,743 | 607,500 | 10,350 | 1,592,836 | | Chief Legal Officer, General Counsel and Corporate Secretary | 2023 | 450,000 | — | 112,494 | 710,712 | 581,625 | 27,208 | 1,882,039 | | Corby C. Whitaker | 2024 | 429,231(4) | — | 131,243 | 393,743 | 594,000 | 10,350 | 1,558,567 | | Senior Vice President, Sales and Marketing | 2023 | 400,000 | — | 112,494 | 710,712 | 517,000 | 25,285 | 1,765,491 | | | 2022 | 400,000 | | 683,709(5) | 337,499 | 313,338 | 23,448 | 1,757,994 | | Gregg R. Landes | 2024 | 400,000 | — | 131,243 | 393,743 | 540,000 | 10,350 | 1,475,336 | | Senior Vice President, Operations and Strategic | 2023 | 400,000 | — | 112,494 | 710,712 | 517,000 | 25,285 | 1,765,491 | | Development | 2022 | 400,000 | — | 683,709(5) | 337,499 | 313,338 | 19,929 | 1,754,475 | | Stephanie Pittman | 2024 | 400,000 | — | 131,243 | 393,743 | 540,000 | 10,350 | 1,475,336 | | Chief Human Resources Officer | | | | | | | | |
Summary Compensation Table
(1) Except as described in footnote 2, these amounts represent the aggregate grant date fair value for these awards computed in accordance with FASB ASC Topic 718. Valuation assumptions are described in Note 15 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. (2) Represents the amount awarded to the named executive officer under the 2024 Company’s Corporate Bonus Plan. (3) For 2024, represents Company matching contributions to our 401(k) match in the amount of $10,350 for each of the named executive officers. (4) Mr. Whitaker’s annual base salary increased from $400,000 to $440,000, effective on April 1, 2024. (5) Includes (a) a SEIG Award of 53,590 shares of performance-based restricted stock with an aggregate grant date fair value equal to $571,214, all of which 53,590 unearned restricted shares were cancelled on March 6, 2024, and (b) time-based restricted stock unit awards with an aggregate grant date fair value as follows: $112,482, $112,495, $112,495 and $112,490 for each of Messrs. Rodriguez, Whitaker and Landes.
2024 Fiscal Year Grants of Plan-Based Awards
2024 Fiscal Year Grants of Plan-Based Awards The following table sets forth information relating to the grant of plan-based incentive awards to our named executive officers in 2024.
2024 Fiscal Year Grants of Plan-Based Awards
| | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | Estimated Future Payouts Under Non- Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares | All Other Option Awards: Number of Securities | Exercise or Base Price of Option | Grant Date Fair Value of Stock and Option | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | of Stock or Units | Underlying Options | Awards ($/Sh)(2) | Awards ($)(3) | | Donald R. Young | N/A | | | | $- | $566,500 | $1,274,625 | | | | | | | 3/5/2024 | | | | | | | | 87,284 | $16.34 | $974,990 | | | 3/5/2024 | | | | | | | 19,889 | | | $324,986 | | Ricardo C. Rodriguez | N/A | | | | $- | $240,000 | $540,000 | | | | | | | 3/5/2024 | | | | | | | | 35,249 | $16.34 | $393,743 | | | 3/5/2024 | | | | | | | 8,032 | | | $131,243 | | Virginia H. Johnson | N/A | | | | $- | $270,000 | $607,500 | | | | | | | 3/5/2024 | | | | | | | | 35,249 | $16.34 | $393,743 | | | 3/5/2024 | | | | | | | 8,032 | | | $131,243 | | Corby C. Whitaker | N/A | | | | $- | $264,000 | $594,000 | | | | | | | 3/5/2024 | | | | | | | | 35,249 | $16.34 | $393,743 | | | 3/5/2024 | | | | | | | 8,032 | | | $131,243 | | Gregg R. Landes | N/A | | | | $- | $240,000 | $540,000 | | | | | | | 3/5/2024 | | | | | | | | 35,249 | $16.34 | $393,743 | | | 3/5/2024 | | | | | | | 8,032 | | | $131,243 | | Stephanie Pittman | N/A | | | | $- | $240,000 | $540,000 | | | | | | | 3/5/2024 | | | | | | | | 35,249 | $16.34 | $393,743 | | | 3/5/2024 | | | | | | | 8,032 | | | $131,243 |
2024 Fiscal Year Grants of Plan-Based Awards
(1) The amounts represent the threshold, target, and maximum estimated payout opportunities for awards granted under our Corporate Bonus Plan for 2024. The actual value of the bonuses paid to our NEOs for the 2024 fiscal year can be found above in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. For additional information regarding the 2024 fiscal year cash bonus, please see the section above entitled “Narrative Disclosure to Summary Compensation Table-2024 Corporate Bonus Plan and Payments”. (2) The exercise price is equal to the fair market value of our common stock, which is the closing price per share of our common stock as reported by the New York Stock Exchange on the grant date. These amounts represent the aggregate grant date fair value for option awards and RSU awards granted to our named executive officers, computed in accordance with ASC 718. See Note 15 to our audited financial statements for the year ended December 31, 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2024 for details as to the assumptions used to calculate the fair value of the option awards. The grant date fair value of each time-based RSU award is measured based on the closing price of our common stock on the date of grant.
Outstanding Equity Awards at 2024 Fiscal Year-End
Outstanding Equity Awards at 2024 Fiscal Year-End
Outstanding Equity Awards at 2024 Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (1) | | Donald R. Young | - | 87,284(15) | $16.34 | 3/5/2034 | | | | | | | - | 170,000(14) | $6.51 | 9/7/2033 | | | | | | | 56,281(12) | 112,562(12) | $6.81 | 6/1/2033 | | | | | | | 33,197(9) | 16,598(9) | $26.29 | 2/23/2032 | | | | | | | 40,175(7) | - | $24.13 | 2/24/2031 | | | | | | | 135,077(5) | - | $8.02 | 2/26/2030 | | | | | | | 195,478(4) | - | $3.63 | 2/27/2029 | | | | | | | 158,206(3) | - | $4.60 | 2/28/2028 | | | | | | | | | | | 19,889(21) | $236,281 | | | | | | | | | 24,473(19) | $290,739 | | | | | | | | | 3,170(16) | $37,660 | | | | Ricardo C. Rodriguez | - | 35,249(15) | $16.34 | 3/5/2034 | | | | | | | - | 85,000(14) | $6.51 | 9/7/2033 | | | | | | | 26(12) | 50,653(12) | $6.81 | 6/1/2033 | | | | | | | 5,175(10) | 2,587(10) | $29.51 | 2/25/2032 | | | | | | | 9,129(9) | 4,564(9) | $26.29 | 2/23/2032 | | | | | | | 6,036(8) | - | $60.48 | 11/15/2031 | | | | | | | | | | | 8,032(21) | $95,420 | | | | | | | | | 11,013(19) | $130,834 | | | | | | | | | 494(17) | $5,869 | | | | | | | | | 872(16) | $10,359 | | | | Virginia H. Johnson | - | 35,249(15) | $16.34 | 3/5/2034 | | | | | | | - | 85,000(14) | $6.51 | 9/7/2033 | | | | | | | 25,326(12) | 50,653(12) | $6.81 | 6/1/2033 | | | | | | | 19,951(11) | 9,976(11) | $18.89 | 6/2/2032 | | | | | | | | | | | 8,032(21) | 95,420 | | | | | | | | | 11,013(19) | $130,834 | | | | | | | | | 1,985(18) | $23,582 | | | | Corby C. Whitaker | - | 35,249(15) | $16.34 | 3/5/2034 | | | | | | | - | 85,000(14) | $6.51 | 9/7/2033 | | | | | | | 25,326(12) | 50,653(12) | $6.81 | 6/1/2033 | | | | | | | 14,939(9) | 7,469(9) | $26.29 | 2/23/2032 | | | | | | | 15,671(7) | - | $24.13 | 2/24/2031 | | | | | | | 9,965(6) | - | $16.05 | 12/15/2030 | | | | | | | 47,899(5) | - | $8.02 | 2/26/2030 | | | | | | | | | | | 8,032(21) | $95,420 | | | | | | | | | 11,013(19) | $130,834 | | | | | | | | | 1,426(16) | $16,941 | | | | Gregg R. Landes | - | 35,249(15) | $16.34 | 3/5/2034 | | | | | | | - | 85,000(14) | $6.51 | 9/7/2033 | | | | | | | 25,326(12) | 50,653(12) | $6.81 | 6/1/2033 | | | | | | | 14,939(9) | 7,469(9) | $26.29 | 2/23/2032 | | | | | | | 15,671(7) | - | $24.13 | 2/24/2031 | | | | | | | 7,793(6) | - | $16.05 | 12/15/2030 | | | | | | | 47,899(5) | - | $8.02 | 2/26/2030 | | | | | | | 63,773(4) | - | $3.63 | 2/27/2029 | | | | | | | 51,613(3) | - | $4.60 | 2/28/2028 | | | | | | | 18,971(2) | - | $6.04 | 11/2/2026 | | | | | | | | | | | 8,032(21) | $95,420 | | | | | | | | | 11,013(19) | $130,834 | | | | | | | | | 1,426(16) | $16,941 | | | | Stephanie Pittman | - | 35,249(15) | $16.34 | 3/5/2034 | | | | | | | 24,251 | 48,503(13) | $6.19 | 9/5/2033 | | | | | | | | | | | 8,032(21) | $95,420 | | | | | | | | | 10,770(20) | $127,948 | | |
Outstanding Equity Awards at 2024 Fiscal Year-End
The market values of RSUs and restricted stock are determined by multiplying the number of shares by $11.88, the closing price of our common stock on the NYSE on December 31, 2024. (2) These options to purchase shares of our common stock were granted on November 2, 2016 and vested as to one-third of the shares on each anniversary of the grant date until November 2, 2019. (3) These options to purchase shares of our common stock were granted on February 28, 2018 and vested as to one-third of the shares on each anniversary of the grant date until February 28, 2021. These options to purchase shares of our common stock were granted on February 27, 2019 and vest as to one-third of the shares on each anniversary of the grant date until February 27, 2022. These options to purchase shares of our common stock were granted on February 26, 2020 and vest as to one-third of the shares on each anniversary of the grant date until February 26, 2023. These options to purchase shares of our common stock were granted on December 15, 2020 and vest as to one-third of the shares on each anniversary of the grant date until December 15, 2023. (7) These options to purchase shares of our common stock were granted on February 24, 2021 and vest as to one-third of the shares on each anniversary of the grant date until February 24, 2024. (8) These options to purchase shares of our common stock were granted on November 15, 2021 and vest as to one-third of the shares on each anniversary of the grant date until November 15, 2024. (9) These options to purchase shares of our common stock were granted on February 23, 2022 and vest as to one-third of the shares on each anniversary of the grant date until November 2, 2025. (10) These options to purchase shares of our common stock were granted on February 25, 2022 and vest as to one-third of the shares on each anniversary of the grant date until February 25, 2025. (11) These options to purchase shares of our common stock were granted on June 2, 2022 and vest as to one-third of the shares on each anniversary of the grant date until June 2, 2025. (12) These options to purchase shares of our common stock were granted on June 1, 2023 and vest as to one-third of the shares on each anniversary of March 8 until March 8, 2026. (13) These options to purchase shares of our common stock were granted on September 5, 2023 and vest as to one-third of the shares on each anniversary of September 5 until September 5, 2026. (14) These options to purchase shares of our common stock were granted on September 7, 2023 and all shares vest as of September 7, 2026. (15) These options to purchase shares of our common stock were granted on March 5, 2024 and vest as to one-third of the shares on each anniversary of March 5 until March 5, 2027. (16) Represents awards of RSUs granted on February 23, 2022, which vest as to one-third of the shares on each anniversary of the grant date until February 23, 2025. (17) Represents awards of RSUs granted on February 25, 2022, which vest as to one-third of the shares on each anniversary of the grant date until February 25, 2025. (18) Represents awards of RSUs granted on June 2, 2022, which vest as to one-third of the shares on each anniversary of the grant date until June 2, 2025. (19) Represents awards of RSUs granted on June 1, 2023, which vest as to one-third each anniversary of March 8 until March 8, 2026. (20) Represents awards of RSUs granted on September 5, 2023, which vest as to one-third each anniversary of September 5 until September 5, 2026. Represents awards of RSUs granted on March 5, 2024, which vest as to one-third each anniversary of March 5 until March 5, 2027.
2024 Option Exercises and Stock Vested Table
2024 Option Exercises and Stock Vested Table The following table provides information on stock options exercised, including the number of shares of our common stock acquired upon exercise and the value realized, determined as described below, for our named executive officers in the year ended December 31, 2024:
2024 Option Exercises and Stock Vested Table
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Donald R. Young | 691,124 | $14,562,344 | 174,791 | $4,046,575 | | Ricardo C. Rodriguez | 25,300 | $590,084 | 7,250 | $122,275 | | Virginia H. Johnson | - | $- | 7,491 | $153,103 | | Corby C. Whitaker | 55,159 | $1,179,216 | 7,833 | $134,026 | | Gregg R. Landes | - | $- | 7,833 | $134,026 | | Stephanie Pittman | - | $- | 5,385 | $137,856 |
2024 Option Exercises and Stock Vested Table
(1) The value realized on exercise is based on the difference between the market price of our common stock upon exercise and the applicable exercise price of the options. (2) The value realized on vesting is calculated by multiplying the number of vested shares by the closing price of our common stock on the New York Stock Exchange on the applicable vesting date.
Pension Benefits
Pension Benefits We do not have any qualified or non-qualified defined benefit plans.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation We do not have any nonqualified defined contribution plans or other deferred compensation plans.
Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control We have agreed to provide severance and change of control payments and benefits to our named executive officers under specified circumstances, as described below. Donald R. Young-Chief Executive Officer Pursuant to the terms of the CEO Agreement, Mr. Young is entitled to the following compensation in connection with a termination of his employment. Upon the termination by the Company without “cause” or by Mr. Young for “good reason” (a “Qualifying Termination”), whether prior to or within 24 months after the occurrence of a change of control, Mr. Young would be entitled to receive an amount equal to two times the sum of his annual base salary and the CEO Performance Bonus Target, each as then in effect. He also would be entitled to a pro rata portion of the CEO Performance Bonus based on the number of months worked in the year of termination, any accrued but unpaid CEO Performance Bonus for the prior fiscal year, payment of the cost of health care insurance benefits for the lesser of the applicable COBRA period or 24 months (but not beyond the date that he first becomes eligible for Medicare or for health care coverage provided by another employer), six months of outplacement services, and accelerated vesting in full of his stock options and other equity awards then outstanding (except as otherwise provided in any equity award agreement that provides for vesting based upon the achievement of performance objectives), with all vested options remaining exercisable for two years following such Qualifying Termination (but not beyond the latest possible date that the options could have expired in accordance with their original terms). If, on or after August 30, 2027, Mr. Young’s employment terminates due to the non-renewal of the CEO Agreement by either party or Mr. Young’s termination of his employment without good reason (in either case at a time when no circumstances exist that would constitute grounds for the termination of Mr. Young’s employment for cause), then Mr. Young would be entitled to a pro rata portion of the CEO Performance Bonus based on the number of months worked in the year of termination, any accrued but unpaid CEO Performance Bonus for the prior fiscal year, and continued vesting of all of his outstanding stock options and other equity awards following such termination on the regularly scheduled vesting dates of the applicable awards (and subject to the achievement of any applicable performance objectives), with all vested options remaining exercisable for five years after the later of the date of termination of Mr. Young’s employment or the applicable vesting date of the options (but not beyond the latest possible date under which the options could have expired in accordance with their original terms). The terms “cause,” “good reason” and “change of control” in our executive agreement with Mr. Young are as follows: “Cause” is defined under the CEO Agreement as (i) willful misconduct, dishonesty, fraud or breach of fiduciary duty to the Company; (ii) deliberate disregard of the lawful rules or policies of the Company, failure to perform assigned duties, or material breach of an employment or other agreement with the Company, which results in material harm to the Company; (iii) the unauthorized disclosure of any trade secret or confidential information; (iv) the commission of an act which constitutes unfair competition or which induces any customer or supplier to breach a contract with the Company; or (v) indictment for any felony involving deceit, dishonesty or fraud, or any criminal conduct that would reasonably be expected to result in material injury or reputational harm to the Company. “Good Reason” is defined under the CEO Agreement as any of the following, without Mr. Young’s consent: (i) the Company’s material breach of the CEO Agreement; (ii) a change in Mr. Young’s reporting relationships such that he no longer reports directly to the Board of Directors; (iii) a material reduction or material adverse change in Mr. Young’s duties, responsibilities and authority; (iv) the relocation of Mr. Young’s primary office location from Northborough, Massachusetts to a location that increases his one-way commute by more than forty miles, without any offer of a remote working arrangement; (v) any reduction in base salary or CEO Performance Bonus Target, except for an across-the-board reduction based on the Company’s financial performance similarly affecting all or substantially all Company senior management employees; or (vi) a material reduction in the aggregate target value of the annual long-term incentive opportunity granted to Mr. Young pursuant to the Company’s annual long-term incentive program for senior executives, except for an across-the-board reduction similarly affecting all or substantially all of the Company’s senior executives. “Change of Control” is defined under the CEO Agreement as the first to occur of any of the following events: (i) the consummation of a reorganization, merger, consolidation or other similar transaction of the Company with or into any other person or group (within the meaning of Section 13(d)(3) of the Securities Act of 1934, as amended) in which holders of the Company’s voting securities immediately prior to such reorganization, merger, consolidation or other similar transaction will not, directly or indirectly, continue to hold at least a majority of the outstanding voting securities of the Company; (ii) a sale, lease, exchange or other transfer (in one transaction or a related series of transactions) of all or substantially all of the Company’s assets; (iii) the acquisition by any person or any group of such quantity of the Company’s voting securities as causes such person or group (other than a person or group who is a shareholder of the Company on the effective date of the CEO Agreement) to own beneficially, directly or indirectly, as of the time immediately after such transaction or series of transactions, more than 50% of the combined voting power of the voting securities of the Company other than as a result of (a) an acquisition of securities directly from the Company or (b) an acquisition of securities by the Company which by reducing the voting securities outstanding increases the proportionate voting power represented by the voting securities owned by any such person or group to more than 50% of the combined voting power of such voting securities; or (iv) a change in the composition of the Board within a two (2) year period such that a majority of the members of the Board are not continuing directors. As used in this paragraph, the term “continuing directors” shall mean as of any date of determination, any member of the Board who (a) was a member of the Board immediately after the effective date of the CEO Agreement, or (b) was nominated for election or elected to the Board with the approval of, or whose election to the Board was ratified by, at least a majority of the continuing directors who were members of the Board at the time of that nomination or election; provided, however, that in no case shall (1) the public offering and sale of the Company’s common stock by its shareholders pursuant to a registered secondary offering, (2) the voluntary or involuntary bankruptcy of the Company, or (3) any transaction or series of transactions that would not qualify as a change in control within the meaning of Section 409A of the Internal Revenue Code constitute a Change of Control. Other Named Executive Officers
Potential Payments Upon Termination or Change of Control
Pursuant to the terms of the Executive Agreements with Messrs. Rodriguez, Whitaker and Landes and Mmes. Johnson and Pittman, upon a Qualifying Termination (that is, a termination by the Company not for cause or termination by the executive for good reason) prior to a change of control, the executive is entitled to receive upon execution of a release, severance in an amount equal to the sum of the executive’s annual base salary then in effect plus the executive’s performance bonus target then in effect, a pro rata portion of the executive’s annual performance bonus based on the number of months worked in the year of termination, any accrued but unpaid performance bonus for the prior fiscal year, continued health insurance coverage for the lesser of the duration of such coverage under COBRA or 12 months, six months of outplacement services, and vesting of any outstanding options or stock-based awards will be accelerated by 12 months and any vested stock options will be exercisable for one year from the date of termination. For any Qualifying Termination within 24 months after a change of control (“CIC Qualifying Termination), the executive is entitled to receive, following execution of a release, severance in an amount equal to two times the executive’s annual base salary and the executive’s performance bonus target then in effect, a pro rata portion of the executive’s annual performance bonus based on the number of months worked in the year of termination, any accrued but unpaid performance bonus for the prior fiscal year, continued health insurance coverage for the lesser of the duration of such coverage under COBRA or 24 months, and six months of outplacement services. For such CIC Qualifying Termination, any outstanding options or stock-based awards will become fully vested and exercisable as of the date of termination and, subject to any permitted action by the Company’s Board upon a change of control under the Company’s applicable equity plan to terminate the stock options or other stock-based awards upon a change of control, any such vested stock option shall be exercisable for not less than one year from the date of termination. “Cause” is defined under the Executive Agreements as (i) willful misconduct, dishonesty, fraud or breach of fiduciary duty to the Company; (ii) deliberate disregard of the lawful rules or policies of the Company, failure to perform assigned duties, or material breach of an employment or other agreement with the Company, which results in material harm to the Company; (iii) the unauthorized disclosure of any trade secret or confidential information of the Company; (iv) the commission of an act which constitutes unfair competition with the Company or which induces any customer or supplier to breach a contract with the Company; (v) the indictment of the Executive for any felony involving deceit, dishonesty or fraud, or any criminal conduct by the executive that would reasonably be expected to result in material injury or reputational harm to the Company; or, with respect to Ms. Johnson (vi) conduct substantially prejudicial to the business of the Company. For purposes hereof, whether or not the executive has committed an act or omission of the type referred to in subparagraphs (i) through (vi) above, as applicable, will be determined by the Company in its reasonable, good faith discretion, based upon the facts known to the Company at the relevant time. “Good Reason” is defined under the Executive Agreements as (i) any material breach by the Company of the agreement; (ii) a change in the executive’s reporting relationships such that the executive no longer directly reports to the President and Chief Executive Officer; (iii) a material reduction or material adverse change in the executive’s current duties, responsibilities and authority, without the executive’s consent; (iv) the demand by the Company for the executive to relocate executive’s primary office location from Northborough, Massachusetts, provided (1) such relocation increases the executive’s regular vehicular one-way in-office commute to such new location by more than forty (40) miles, and (2) the Company does not offer the executive a remote working arrangement as part of the office relocation, without the executive’s consent; or (v) any reduction by the Company in the executive’s base salary or the executive’s performance bonus target without the executive’s consent, except for across-the-board compensation reductions based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company. For purposes hereof, whether or not the executive has Good Reason to terminate the executive’s employment by the Company pursuant to subparagraphs (i) through (v) above shall be determined by the Company in its reasonable, good faith discretion, based upon the facts known to the Board at the relevant time. Any termination for Good Reason by the executive requires the executive to notify the Company within 60 days of the first occurrence of a condition, allow the Company to cure such condition within 30 days of the notice and the executive to terminate the employment within 60 days of the cure period. “Change of Control” is defined under the Executive Agreements as the first to occur of any of the following events: (i) the consummation of a reorganization, merger, consolidation or other similar transaction of the Company with or into any other person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) in which holders of the Company’s voting securities immediately prior to such reorganization, merger, consolidation or other similar transaction shall not, directly or indirectly, continue to hold at least a majority of the outstanding voting securities of the Company; (ii) a sale, lease, exchange or other transfer (in one transaction or a related series of transactions) of all or substantially all of the Company’s assets; (iii) the acquisition by any person or any group of such quantity of the Company’s voting securities as causes such person or group (other than a person or group who is a shareholder of the Company on the effective date of the executive agreement) to own beneficially, directly or indirectly, as of the time immediately after such transaction or series of transactions, more than fifty percent (50%) of the combined voting power of the voting securities of the Company other than as a result of (a) an acquisition of securities directly from the Company or (b) an acquisition of securities by the Company which by reducing the voting securities outstanding increases the proportionate voting power represented by the voting securities owned by any such person or group to fifty percent (50%) or more of the combined voting power of such voting securities; or (iv) a change in the composition of the Board within a two (2) year period such that a majority of the members of the Board are not continuing directors. As used in this paragraph, the term “continuing directors” shall mean as of any date of determination, any member of the Board who (a) was a member of the Board immediately after the effective date of the executive agreement, or (b) was nominated for election or elected to the Board
Potential Payments Upon Termination or Change of Control
with the approval of, or whose election to the Board was ratified by, at least a majority of the continuing directors who were members of the Board at the time of that nomination or election; provided however, that in no case shall any of the following constitute a change of control: (1) the public offering and sale of Company’s common stock by its shareholders pursuant to a registered secondary offering, (2) the voluntary or involuntary bankruptcy of the Company, or, with respect to Messrs. Rodriguez, Whitaker and Landes and Ms. Pittman, (3) any transaction or series of transactions that would not qualify as a change in control event within the meaning of Section 409A of the Code. The foregoing does not apply to the executives’ SEIG Awards, which are described above under - SEIG Awards of Performance-Based Restricted Stock-Non-CEO Named Executive Officers. The following tables set forth estimates of the payments and benefits each named executive officer would have been entitled to receive from us upon a termination of employment under the circumstances described in each table assuming that a qualifying termination and/or a change of control had occurred on December 31, 2024. In accordance with SEC rules, the potential payments were determined under the terms of our contracts, agreements, plans and arrangements as in effect on December 31, 2024. The tables do not include any previously vested equity awards or accrued benefits. Because the payments to be made to a named executive officer depend on several factors, the actual amounts to be paid out upon a triggering event can only be determined at the time of the triggering event. Estimated Benefits in the Event of a Qualifying Termination Without Cause and Absent a Change of Control:
Potential Payments Upon Termination or Change of Control
| Name | Cash Severance ($)(1) | Acceleration of Unvested Options and RSUs ($)(2) | Continuation of Benefits and Outplacement ($) | Total ($) | | Donald R. Young | $3,437,625 | $2,048,270 | $20,000 | $5,505,895 | | Ricardo C. Rodriguez | $1,180,000 | $241,862 | $20,000 | $1,441,862 | | Virginia H. Johnson | $1,327,500 | $249,216 | $20,000 | $1,596,716 | | Corby C. Whitaker | $1,298,000 | $242,575 | $46,066 | $1,586,641 | | Gregg Landes | $1,180,000 | $242,575 | $45,575 | $1,468,150 | | Stephanie Pittman | $1,180,000 | $233,770 | $37,683 | $1,451,453 |
Potential Payments Upon Termination or Change of Control
(1) For Mr. Young, the value reported for cash severance includes two times the sum of his annual base salary and his annual bonus target, as well the annual bonus earned for 2024 based on actual performance for the fiscal year, which otherwise would be forfeited on termination prior to the bonus payment date in 2025. For the other Named Executive Officers, the values reported include the sum of the executive’s annual base salary and annual bonus target, as well the annual bonus earned for 2024 based on actual performance for the fiscal year, which otherwise would be forfeited on termination prior to the bonus payment date in 2025. (2) The values reported for accelerated vesting of restricted stock units are based on the closing price of our common stock on December 31, 2024, and the values reported for accelerated vesting of stock options are based on the excess (if any) of such price over the exercise price of the applicable stock options. Estimated Benefits in the Event of a Qualifying Termination Without Cause or for Good Reason Within 12 Months Following a Change of Control:
Potential Payments Upon Termination or Change of Control
| Name | Cash Severance ($)(1) | Acceleration of Unvested Options and RSUs ($)(2) | Continuation of Benefits and Outplacement ($) | Total ($) | | Donald R. Young | $3,437,625 | $2,048,270 | $20,000 | $5,505,895 | | Ricardo C. Rodriguez | $1,820,000 | $955,743 | $20,000 | $2,795,743 | | Virginia H. Johnson | $2,047,500 | $963,097 | $20,000 | $3,030,597 | | Corby C. Whitaker | $2,002,000 | $956,456 | $72,131 | $3,030,587 | | Gregg Landes | $1,820,000 | $956,456 | $71,149 | $2,847,605 | | Stephanie Pittman | $1,820,000 | $499,350 | $55,365 | $2,374,715 |
Potential Payments Upon Termination or Change of Control
The values reported for cash severance include two times the sum of each Named Executive Officer’s annual base salary and annual bonus target, as well the annual bonus earned for 2024 based on actual performance for the fiscal year, which otherwise would be forfeited on termination prior to the bonus payment date in 2025. The values reported for accelerated vesting of restricted stock units are based on the closing price of our common stock on December 31, 2024, and the values reported for accelerated vesting of stock options are based on the excess (if any) of such price over the exercise price of the applicable stock options.
CEO Pay Ratio
CEO Pay Ratio For 2024, the median annual total compensation of all employees other than our Chief Executive Officer was $101,299. The annual total compensation of our Chief Executive Officer was $3,099,951, and the ratio of our Chief Executive Officer’s compensation to the median employee was 30 to 1. The Pay Ratio disclosed is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. As permitted under Item 402(u) of Regulation S-K, for 2024, we used the same median employee who was identified in 2022 as our median employee, because we determined that there has been no change in our employee population or employee compensation arrangements that we believe would significantly impact our pay ratio disclosure. Accordingly, our median employee was identified as of December 31, 2022, using our U.S. workforce on that date of 513 total full-time, part-time, and temporary employees (including employees on leave and excluding the Chief Executive Officer) working at the Company together with the Company’s consolidated subsidiaries. Of those individuals, 506 were located in the United States and U.S. territories, and seven were located in four other countries around the world. The scale of our operations in these other countries is smaller, and in aggregate we employed less than 5% of our total workforce in these countries as of December 31, 2022, primarily as sales staff. We excluded those seven employees, amounting to 1.4% of our workforce as of December 31, 2022, from the identification of the “median employee”, as permitted by SEC rules. We identified our median employee based on the W-2 taxable wages paid during the 12-month period ended December 31, 2022. In making this determination, we did not annualize the compensation of employees who were hired in 2022 but did not work for us or our consolidated subsidiaries for the entire 12-month period. We calculated 2024 total compensation for the median employee and the Chief Executive Officer based on the proxy rules for determining the annual total compensation of our named executive officers.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As discussed in the Compensation Discussion and Analysis section above, the Compensation Committee of the Board has implemented an executive compensation program designed to link a substantial part of each executive’s realized compensation to the achievement of the Company’s financial and operating objectives as well as to align executives’ pay with changes in the value of shareholder investments. 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, we are providing the following information regarding the compensation of our named executive officers and the Company’s performance. The disclosure included in this section is prescribed by SEC rules and does not necessarily align with how the Company or the Compensation Committee view the link between the Company’s performance and the pay of our named executive officers.
PAY VERSUS PERFORMANCE
| | | | | Value of Initial Fixed $100 Investment Based On: | | | | | | Year | Summary Compensation Table Total for Don Young | Compensation Actually Paid to Don Young(1)(2) | Average Summary Compensation Total for Other Named Executives(3) | Average Compensation Actually Paid to Other Named Executive Officers(1)(3) | ASPN Cumulative Total Shareholder Return (“TSR”) | S&P 1500 Specialty Chemicals Index Cumulative TSR | Net Income ($ thousands) | Adjusted EBITDA | | 2024 | $3,099,951 | $1,189,816 | $1,515,482 | $554,065 | $53 | $17 | $13,375 | $89,916 | | 2023 | $3,626,031 | $7,802,535 | $1,791,263 | $3,414,594 | $(5) | $5 | $(45,811) | $(22,931) | | 2022 | $2,378,906 | $(20,840,392) | $1,406,497 | $(606,470) | $52 | $7 | $(82,738) | $(60,638) | | 2021 | $8,367,611 | $30,297,488 | $790,094 | $4,252,939 | $542 | $45 | $(37,094) | $(25,938) | | 2020 | $2,298,852 | $5,328,933 | $624,828 | $1,895,890 | $115 | $15 | $(21,809) | $(6,367) |
PAY VERSUS PERFORMANCE
(1) For each year, “Compensation Actually Paid” reflects the Summary Compensation Total (“SCT”) for the relevant named executive officer(s) less the values included in the “Stock Awards” and “Option Awards” columns and adding to this: • The fair value at the end of the year of equity compensation granted during the year; • The change in fair value as of the vesting date, measured from the prior year-end, of any equity awards granted in prior years that vested during the year (whether positive or negative); and • The change in fair value at year-end, measured from the prior year-end, of any equity awards granted in prior years that remained unvested as of the end of the year (whether positive or negative) As a result, “Compensation Actually Paid” does not reflect the value that was or may actually be realized by the named executive officers. In calculating the year-over-year change in the value of unvested option awards as well as the change in value to mid-year vesting dates, the options’ Black-Scholes values were calculated at each measurement date using the following inputs: • Fair value: based on the closing share price on the measurement date. • Expected life: for in-the-money options, the time elapsed since the grant date was deducted from the original expected life assumption. For out-of-the-money options, the expected life was adjusted upward in proportion to the degree to which the options were out-of-the-money relative to their exercise price. • Stock price volatility: based on historical volatility for a trailing term to match the updated expected life assumption as of each measurement date. • Risk-free rate: based on an interpolated rate for a U.S. Treasury security with a term to match the updated expected life assumption as of each measurement date. Dividend yield: based on the most recent quarterly dividend, annualized, as of each measurement date. The Company does not intend to pay cash dividends on our common stock in the foreseeable future, nor have we paid dividends on our common stock in the past. The amounts deducted and added in calculating the “Compensation Actually Paid” for Mr. Young for the most recently completed fiscal year are as follows:
PAY VERSUS PERFORMANCE
| | 2024 | | Reported SCT Total Compensation | 3,099,951 | | Equity Award Values Reported in the SCT | (1,299,976) | | Year End Fair Value of Equity Awards Granted in the Year | 847,400 | | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | (1,234,917) | | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | 1,379,901 | | Fair Value of Equity Compensation Forfeited in Current Fiscal Year Determined at End of Prior Fiscal Year | (1,602,543) | | Pension Values Reported in the SCT | - | | Pension Service Cost Attributable to Year | - | | Compensation Actually Paid | 1,189,816 |
PAY VERSUS PERFORMANCE
(3) For 2024, other named executive officers include Ricardo C. Rodriguez, Virginia H. Johnson, Corby C. Whitaker, Gregg R. Landes and Stephanie Pittman. For 2023, other named executive officers include Ricardo C. Rodriguez, Virginia H. Johnson, Corby C. Whitaker and Gregg R. Landes. For 2022, other named executive officers include John F. Fairbanks, Gregg R. Landes, Ricardo C. Rodriguez, Keith L. Schilling, and Corby C. Whitaker. For 2021, other named executive officers include Kelley Conte, John F. Fairbanks, Gregg R. Landes, and Corby C. Whitaker. For 2020, other named executive officers include Kelley Conte, John F. Fairbanks, Gregg R. Landes, and Corby C. Whitaker. The amounts deducted and added in calculating the average “Compensation Actually Paid” for these named executive officers for the most recently completed fiscal year are as follows:
PAY VERSUS PERFORMANCE
| | 2024 | | Average Reported SCT Total Compensation | 1,515,482 | | Average Equity Award Values Reported in the SCT | (524,985) | | Average Year End Fair Value of Equity Awards Granted in the Year | 342,216 | | Average Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | (510,155) | | Average Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | 88,490 | | Average Fair Value of Equity Compensation Forfeited in Current Fiscal Year Determined at End of Prior Fiscal Year | (356,983) | | Average Pension Values Reported in the SCT | - | | Average Pension Service Cost Attributable to Year | - | | Average Compensation Actually Paid | 554,065 |
PAY VERSUS PERFORMANCE
(4) Adjusted EBITDA is net income (loss) before interest expense, taxes, depreciation, amortization, stock-based compensation expense and other items, from time to time, which we do not believe are indicative of our core operating performance, which items are discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Form 10-K for the applicable fiscal year. As illustrated in the table above and the charts below, the “Compensation Actually Paid” (calculated as required under SEC rules) for our named executive officers over the past four fiscal years has directionally aligned with our TSR as well as net income and Adjusted EBITDA over this same period. Along with Compensation Actually Paid, the chart below outlines our one-year, two-year, three-year, four-year and five-year TSR as compared to the one-year, two-year, three-year, four-year and five-year TSR of the S&P 1500 Specialty Chemicals Index. In each case, TSR is measured starting from December 31, 2019: The chart below outlines Compensation Actually Paid and the Company’s net income. The chart below outlines Compensation Actually Paid and the Company’s Adjusted EBITDA. The Company’s Compensation Actually Paid is impacted by the Company’s TSR in that a significant portion of the compensation of our named executive officers is granted in the form of equity-based compensation awards that increase or decrease in value based on changes in our stock price. In addition, the Company’s annual bonus payouts are determined based primarily on Adjusted EBITDA performance. The Company’s incentive compensation is not currently determined based on TSR performance relative to a peer group or market index, or based on net income. The Compensation Committee of the Board carefully monitors and selects the performance metrics used under the Company’s executive compensation programs each year. Set forth below are those metrics that the Company believes represent the most important financial performance measures used to link compensation actually paid to our named executive officers to Company performance for 2024.
PAY VERSUS PERFORMANCE
| Performance Measure | Description; Link to Company Performance | | Adjusted EBITDA | Various measures of EBITDA are widely used by investors to measure a company’s operating performance without regard to items that can vary substantially from company to company depending upon financing and accounting methods, book values of assets, capital structures and the methods by which assets were acquired. | | Revenue | In addition to Adjusted EBITDA, revenue is a key driver that investors use in the evaluation of our Company’s performance. It is frequently compared to Company projections and examined in relation to annual guidance in order to determine how well the Company is performing relative to expectations. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The following table shows the total compensation paid or accrued during the fiscal year ended December 31, 2024, to each of our non-employee directors that served in such capacity during 2024.
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Stock Options ($)(1) | Total ($) | | Rebecca B. Blalock | $62,500 | $55,991 | $33,997 | $152,488 | | Kathleen M. Kool | $66,847 | $55,991 | $33,997 | $156,835 | | Steven R. Mitchell | $50,000 | $55,991 | $33,997 | $139,988 | | Mark L. Noetzel | $74,347 | $55,991 | $33,997 | $164,335 | | William P. Noglows | $99,000 | $55,991 | $33,997 | $188,988 | | Cari Robinson | $7,216 | $44,330 | $26,917 | $78,463 | | James E. Sweetnam | $57,500 | $55,991 | $33,998 | $147,489 |
DIRECTOR COMPENSATION
(1) These amounts represent the aggregate grant date fair value of options granted to each director during the fiscal year ended December 31, 2024, computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 15 to our financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2024. Such options vest over a one-year period or the day before the next annual stockholder meeting. As of December 31, 2024, the aggregate number of shares subject to outstanding equity awards held by our non-employee directors was:
DIRECTOR COMPENSATION
| Name | Number of Stock Options Held at Fiscal Year-End | Number of Shares of Restricted Stock Held at Fiscal Year-End | | Rebecca B. Blalock | 82,737 | 1,898 | | Kathleen M. Kool | 9,369 | 1,898 | | Steven R. Mitchell | 92,965 | 1,898 | | Mark L. Noetzel | 67,938 | 1,898 | | William P. Noglows | 92,965 | 1,898 | | Cari Robinson | 1,676 | 1,876 | | James E. Sweetnam | 13,249 | 1,898 |
Non-Employee Director Compensation Policy
Non-Employee Director Compensation Policy In May 2014, our Board adopted the non-employee director compensation policy (the “director compensation policy”), which became effective following the completion of the Company’s initial public offering in June 2014 and has been amended by the Board from time to time. The director compensation policy was most recently amended in May 2024. The director compensation policy is designed to seek to ensure that director compensation aligns our non-employee directors’ interests with the long-term interests of our stockholders, that the structure of the compensation is simple, transparent and easy for stockholders to understand and that our non-employee directors are fairly compensated. Pursuant to our director compensation policy, during each year of a non-employee director’s tenure, the director will receive (i) a grant of restricted shares or restricted share units, (ii) a grant of options, and (iii) cash fees for their service on the Board and committees of the Board, as applicable. Directors who are also our employees, such as Mr. Young, will not receive additional compensation for their services as directors. The Nominating, Governance and Sustainability Committee, with the assistance of Meridian, regularly evaluates our director compensation program to ensure that it remains competitive and effective. Pursuant to the non-employee director compensation policy, as amended in May 2024, we will grant each non-employee director an annual grant of equity awards under the 2023 Plan with an aggregate value of $90,000 (which we refer to as the Annual Grant), consisting of: (i) restricted shares of the Company’s common stock or restricted share units with a value of $56,000, and (ii) an option to buy shares of common stock with a value of $34,000. The Annual Grant will be made each year on or about the time of the meeting of our Board following our annual meeting of stockholders, provided that if there has been no annual meeting of stockholders held by the first day of the third fiscal quarter of such year, each non-employee director will receive the Annual Grant on the first day of the third fiscal quarter of such year. The number of restricted shares or restricted share units to be granted to each non-employee director as part of their Annual Grant will be calculated using the closing price on such date of our common stock on the New York Stock Exchange or such other national securities exchange as our common stock is then traded. The number of shares underlying the options included in a non-employee director’s Annual Grant will be calculated based on the fair value of such options for financial accounting purposes. For any new non-employee director joining our Board after the grant of the Annual Grant in any given year, such non-employee director will receive a grant of restricted shares of our common stock on the first day of their service on our Board equal to the pro rata share of that year’s Annual Grant calculated by multiplying the number of days of such year that the such new director will serve by the quotient of $90,000 divided by 365. Equity awards granted to our non-employee directors generally vest on the earlier of (i) one year from the date of the grant, or (ii) the day prior to the annual meeting for the fiscal year following the date of grant, subject to the director’s continued service on the Board. Stock options granted to our non-employee directors have a maximum term of no more than 10 years from the date of grant. In the event that a non-employee director departs from the Board of Directors other than as a result of removal from the Board of Directors for cause (as defined in the 2023 Plan) (the “Departing Director”), the Departing Director will have two years from the date of departure to exercise all stock options, to the extent vested and exercisable as of the date of departure, subject to the provisions of the 2023 Plan, and provided, however, that in no event shall the Departing Director be permitted to exercise such stock options following the expiration of the term of such stock options. The Board retains the discretion to add additional time to such exercise period when considering each such departure. In addition, if the Departing Director has served on the Board for at least three years at the time of departure, the Board retains the discretion to provide for the acceleration of vesting of some or all of the Departing Director’s unvested stock options or restricted stock. Pursuant to the Company’s stock ownership guidelines, as amended in May 2024, non-employee directors are required to satisfy a minimum stock ownership requirement of at least four times the annual cash retainer. For more information, see “Stock Ownership Guidelines” on page 39 above. As of December 31, 2024, all of our non-employee directors either met the applicable stock ownership requirement or were expected to achieve compliance with the applicable stock ownership requirement within the applicable five-year transition period. The following annual cash fees are paid to our non-employee directors for service on our Board and its Audit Committee, Compensation Committee, and Nominating, Governance and Sustainability Committee, as applicable:
Non-Employee Director Compensation Policy
| Board of Directors or Committee of Board of Directors | Annual Retainer Amount for Chair (in lieu of the annual retainer amount for a member) | Annual Retainer Amount for Member | | Board of Directors | $90,000 | $45,000 | | Audit Committee | $20,000 | $7,500 | | Compensation & Leadership Development Committee | $20,000 | $5,000 | | Nominating, Governance & Sustainability Committee | $10,000 | $4,000 |
Non-Employee Director Compensation Policy
If the Company holds more than 12 Board meetings in a calendar year, more than 12 meetings of the Audit Committee in a calendar year, or more than eight meetings of either of the Compensation Committee or the Nominating, Governance and Sustainability Committee in a calendar year, then the Board, at its discretion, may pay to each non-management director, as defined in the director compensation policy, or member of such committee, as applicable, that attends such additional meetings by telephone or other means of communication, an additional one-time cash retainer for their additional service starting at one times the existing retainer for membership of the Board or relevant committee, as applicable, and which amount may be increased, without exceeding $45,000 for any given calendar year. The cash payments are paid quarterly in arrears at the end of each fiscal quarter. We have reimbursed and will continue to reimburse our non-employee directors for their reasonable expenses incurred in attending meetings of our Board and committees of the Board. Pursuant to the director compensation policy and the terms of our stockholder-approved 2023 Plan, the sum of the grant date fair value of all awards made in any fiscal year pursuant to the 2023 Plan to any non-employee director, together with cash compensation earned by the non-employee director, shall not exceed $500,000.
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The Board currently consists of eight members, classified into three classes as follows: Kathleen M. Kool, Mark L. Noetzel and William P. Noglows constitute the Class II directors with a term ending at the annual meeting of stockholders; Steven R. Mitchell and Donald R. Young constitute the Class III directors with a term ending at the 2026 annual meeting of stockholders; and Rebecca B. Blalock, Cari Robinson and James E. Sweetnam constitute the Class I directors with a term ending at the 2027 annual meeting. At each annual meeting of stockholders, directors are elected for a full term of three years to succeed those directors whose terms are expiring. On March 4, 2025, Rebecca B. Blalock and Mark L. Noetzel notified the Board of their intention to retire from the Board effective immediately after the annual meeting, as part of the Company’s regular Board refreshment process. Effective upon Ms. Blalock’s and Mr. Noetzel’s retirements, the Board will reduce the size of the Board from eight to six members. The Board has voted to nominate Kathleen M. Kool and William P. Noglows for election at the annual meeting for a term of three years to serve until the annual meeting of stockholders to be held in 2028, and until their respective successors are elected and qualified. The continuing Class III directors (Steven R. Mitchell and Donald R. Young) and Class I directors (Cari Robinson and James E. Sweetnam) will serve until the annual meetings of stockholders to be held in 2026 and 2027, respectively, and until their respective successors are elected and qualified. Unless authority to vote for any of these nominees is withheld, the shares represented by the enclosed proxy will be voted FOR the election of Kathleen M. Kool and William P. Noglows as directors. In the event that either nominee becomes unable or unwilling to serve, the shares represented by the enclosed proxy will be voted for the election of such other person as the Board may recommend in that nominee’s place. We have no reason to believe that either nominee will be unable or unwilling to serve as a director. Proxies cannot be voted for a greater number of persons than the number of nominees named. A plurality of the shares voted for each nominee at the annual meeting is required to elect each nominee as a director. THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF KATHLEEN M. KOOL AND WILLIAM P. NOGLOWS AS DIRECTORS, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.