DEF 14A of FreightCar America, Inc., Apr 4, 2024

DEF 14A of FreightCar America, Inc.

Filed Apr 4, 2024 · FY20230001104659-24-043615

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  1. Page

    | Director Compensation | 24 | | STOCK OWNERSHIP | 24 | | Security Ownership of Certain Beneficial Owners and Management | 24 | | Delinquent Section 16(a) Reports | 26 | | EXECUTIVE OFFICERS | 26 | | COMPENSATION OVERVIEW | 27 | | Executive Summary | 28 | | Compensation Committee’s Processes and Procedures for Consideration | 28 | | General Authorities and Responsibilities | 28 | | Oversight of Compensation Plans | 29 | | Compensation Consultant | 29 | | Compensation Philosophy and Objectives | 29 | | Elements of Executive Compensation | 30 | | Base Salary | 30 | | Annual Cash Incentive Awards | 31 | | Long-Term Incentive Awards | 31 | | Equity Compensation Plan Information | 32 | | Retirement and Pension Benefits | 32 | | Change in Control and Post-Employment Benefits | 32 | | Severance Arrangements | 32 | | Executive Severance Plan | 33 | | Enhanced Severance Plan | 33 | | Employment Agreements and Other Arrangements for NEOs | 34 | | Stock Ownership Guidelines | 35 | | Executive Compensation Recovery Policy (“Clawback Policy”) | 35 | | Company Insider Trading Policy | 35 | | EXECUTIVE COMPENSATION | 36 | | Summary Compensation Table | 36 | | Supplemental Narrative to Summary Compensation Table | 37 | | Outstanding Equity Awards at 2023 Fiscal Year-End | 37 | | Potential Payments upon Termination or Change in Control | 38 | | Pay vs. Performance | 38 | | DIRECTOR COMPENSATION | 40 | | 2023 Director Compensation Table | 41 | | Stock Ownership Guidelines | 42 | | FEES OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND AUDIT COMMITTEE REPORT | 42 |

  2. GOVERNANCE OF THE COMPANY

    GOVERNANCE OF THE COMPANY Board Structure and Composition Our Charter provides for a classified Board consisting of three classes of the same or nearly the same number of directors.

  3. GOVERNANCE OF THE COMPANY

    | • | Malcolm F. Moore, José De Nigris Felán and Travis D. Kelly serve in Class I. Their terms will expire on the date of the Annual Meeting. |

  4. GOVERNANCE OF THE COMPANY

    | • | William D. Gehl, Jesús Salvador Gil Benavides and Rodger L. Boehm serve in Class II. Their terms will expire on the date of the annual meeting of stockholders to be held in 2025. |

  5. GOVERNANCE OF THE COMPANY

    | • | Elizabeth K. Arnold and James R. Meyer, and, effective May 1, 2024, Nicholas J. Randall serve in Class III. Ms. Arnold’s and Mr. Meyer’s terms will expire on the date of the annual meeting of stockholders to be held in 2026. Mr. Randall’s term will expire on the date of the Annual Meeting. |

  6. GOVERNANCE OF THE COMPANY

    At the recommendation of our Nominating and Corporate Governance Committee, our Board has nominated Messrs. Moore, De Nigris Felán and Kelly to terms as Class I directors, pursuant to contractual arrangements in the case of Mr. Kelly, to serve until our annual meeting of stockholders in 2027. Effective May 1, 2024, our Board appointed Nicholas J. Randall to the Board. At the recommendation of our Nominating and Corporate Governance Committee, our Board has nominated Mr. Randall for election at our Annual Meeting to a term as a Class III director to serve until our annual meeting of stockholders in 2026. However, pursuant to our Bylaws, any director, such as Mr. Randall, who is appointed to the Board other than by election at an annual meeting of stockholders, must stand for re-election at the next annual meeting of stockholders. Each of our directors has signed a contingent resignation letter providing that if a majority of the votes of the shares in an uncontested election in which such director is a nominee are designated to be “withheld” from, or are voted “against,” the director’s election, and the Board accepts the contingent resignation letter following such election, the director’s resignation will be effective upon the acceptance of the resignation by the Board. The Company is party to an investor rights agreement (the “Investor Rights Agreement”) with Fasemex, Inc. (the “US Seller”), Fabricaciones y Servicios de México, S.A. de C.V. (“Fasemex Mexico”) and Agben de Mexico, S.A. de C.V. (“Agben” and, together with Fasemex Mexico, the “MX Sellers”, and the MX Sellers, together with the US Seller, the “Sellers”). Pursuant to the Investor Rights Agreement, the Sellers have the right to designate one nominee for election to the Company’s Board for so long as the Sellers beneficially own in the aggregate, common stock of the Company equal to at least five percent (5%) of shares of the Company’s common stock outstanding. The director nominee designated by the Sellers is Mr. Jesús Salvador Gil Benavides, who was initially appointed by the Board to serve as a Class II director effective on October 23, 2020. In addition, the Investor Rights Agreement provides the Sellers with the right to designate a non-voting observer to attend meetings of the Board and of committees of the Board, subject to customary limitations, for so long as the Sellers beneficially own, in the aggregate, common stock of the Company equal to at least five percent (5%) of shares of the Company’s common stock outstanding. The non-voting board observer is currently Mr. Alejandro Gil. In connection with the Credit Agreement (the “Term Loan Credit Agreement”) by and among the Company, as guarantor, FreightCar North America (together with the Company, the “Loan Parties”), CO Finance LVS VI LLC, as lender (the “Lender”), an affiliate of a corporate credit fund for which Pacific Investment Management Company LLC serves as an investment manager, and U.S. Bank National Association, as disbursing and collateral agent (the “Agent”), the Company also entered into a warrant acquisition agreement (the “Warrant Acquisition Agreement”) with the Lender, which provides for the issuance of a warrant (the “Warrant”) to the Lender, allowing Lender to purchase a number of shares of the Company’s common stock, par value $0.01 per share, equal to 23% of the outstanding common stock on a fully-diluted basis at the time the Warrant is exercised. Pursuant to the Warrant Acquisition Agreement, for so long as the Lender or its affiliates hold (a) at least 50% of the Warrant or (b) at least 50% of the shares issuable pursuant to the exercise of the Warrant, the Lender shall be entitled to designate for recommendation to the Nominating and Corporate Governance Committee of the Board and, upon such recommendation, nomination by the Board one director to the Board and a non-voting observer. Each director designated by the Lender, including the initial director designee, must comply with the requirements of the charter for, and related guidelines of, the Nominating and Corporate Governance Committee of the Board. The director nominee initially designated by the Lender was Travis D. Kelly, who was appointed by the Board to serve as a Class I director, effective June 20, 2022. Our Charter provides that the authorized number of directors may be changed only by resolution of the Board. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the total number of directors. Our Charter also provides that our Board may fill any vacancy created by the resignation of a director or an increase in the size of the Board. On March 14, 2024, the Board passed a resolution increasing the size of the Board from eight (8) directors to nine (9) directors effective May 1, 2024. The Board met eight (8) times during 2023. Nominees for election at this meeting for terms expiring in 2027 Malcolm F. Moore, 73, has served as a director since March 2015 and is the chair of our Nominating and Corporate Governance Committee and a member of our Compensation and Audit Committees. From July 2015 to June 2019, Mr. Moore served as Executive Vice President and Chief Operating Officer of Twin Disc, Inc., a publicly held global manufacturer and distributor of power transmission equipment for the marine, transportation and industrial business sectors. Between 2006 and 2015, he also served on the board of directors of Twin Disc, Inc. From June 2013 to June 2015, Mr. Moore served as the President and Chief Executive Officer of Digi-Star LLC, a global supplier of electronic components and software used in precision agriculture. From November 2011 to June 2013, Mr. Moore served as Chairman of Digi-Star. Prior to joining Digi-Star, Mr. Moore served as an advisor to Baird Capital Partners from June 2010 to November 2011. Between 1999 and 2010, Mr. Moore worked in a variety of executive roles at Gehl Company, a publicly held manufacturer of compact construction equipment, including serving as President and Chief Executive Officer from August 2009 to April 2010. Earlier in his career, Mr. Moore served in senior executive roles at Pangborn Corporation, an international manufacturer of blast media equipment used by manufacturers of metal products, and LINAC Holdings Inc., a manufacturer of specialized equipment used in steel production, industrial heat-treating, scientific research and product manufacturing. Mr. Moore currently serves on the board of directors of AG Growth International Inc., a manufacturer of equipment and digital solutions for agriculture and food processing. Having served as a senior executive for over 25 years, and as a board member for many years, of companies in the manufacturing sector, Mr. Moore brings to our board extensive experience in leading complex heavy manufacturing organizations. José De Nigris Felán, 51, has served as a director since June 2022. Mr. De Nigris Felán is the Executive Vice President of Katcon Global USA, Inc., a global supplier of exhaust and after treatment solutions to the automotive industry. Mr. De Nigris Felán has served as a board member of Katcon Global since 2000, and has held various positions since with its subsidiaries. Mr. De Nigris Felán is the Director of Katcon Global, SA (Luxembourg) since 2009, the Director of Katcon Korea since 2016, and the Managing Director of Wendt Automotive GMBH (Germany) since 2018. Mr. De Nigris Felán brings to our Board significant experience in industrial manufacturing.

  7. GOVERNANCE OF THE COMPANY

    Travis D. Kelly, 47, has served as a director since June 2022. Mr. Kelly has served since December 2018 as the President and Chief Executive Officer of Isola Group LLC, a global material sciences company specialized in making laminate materials used to fabricate multilayer printed circuit boards. From 2007 to 2018, Mr. Kelly served as the Global Chief Operating Officer for Cerberus Capital Management, L.P. Prior to this, Mr. Kelly served numerous operating, financial, and strategic planning roles across several public and private capital raising manufacturing and industrial companies. Mr. Kelly brings to our Board experience in operating an industrial company as well as finance and strategic planning. Nominee for election at this meeting for a term expiring in 2026 Nicholas J. Randall, 50, will begin serving as a director on May 1, 2024. Mr. Randall was appointed as our President and Chief Executive Officer effective May 1, 2024 and previously served as our Chief Operating Officer from June 2023 until then. Prior to joining the Company, Mr. Randall led a division of Precision Castparts Corporation from 2017-2023. From 2007 to 2017, Mr. Randall served in various capacities at Alcoa Corporation and Arconic Corporation, a company formed from the split of Alcoa in 2016. Prior to that, Mr. Randall worked in various engineering roles at Jaguar Land Rover Automotive. Mr. Randall holds a bachelor’s degree in manufacturing engineering from Liverpool John Moores University. Mr. Randall brings to the Board extensive experience in operations of industrial products companies and insight from his previous roles and as the Company’s Chief Operating Officer. Directors whose terms continue until 2025 William D. Gehl, 77, has served as a director since May 2007 and as Chair of the Board from January 2013. Effective May 1, 2024, Mr. Gehl will resign as Chair of the Board and become Lead Independent Director of the Board. He is a member of our Audit and Nominating and Corporate Governance Committees. He is currently Chairman and owner of Interstate Batteries of Southeastern Wisconsin, a distributor of automotive and other batteries. He was previously Chairman and Chief Executive Officer of Gehl Company, a publicly held manufacturer of compact construction equipment, from April 2003 until April 2009. Prior to that time, he was President and Chief Executive Officer of Gehl Company since November 1992, Chairman of Gehl Company since April 1996, and a director of Gehl Company since 1987. During the past six years, Mr. Gehl has been a member and Chairman of the board of directors of Astec Industries, Inc. (a publicly held manufacturer of roadbuilding and construction equipment). He brings to our Board, among other things, his background as the chief executive officer of a public company for over 17 years and general management, marketing and financial experience, as well as MBA and law degrees. He is a member of the Wisconsin and Florida state bars. Jesús Salvador Gil Benavides, 60, has served as a director since October 2020. Mr. Gil has over 30 years of experience in metal fabrications, and over 20 years of experience in the railcar manufacturing industry. From October 2020 to January 2024, Mr. Gil served as the Vice President of Operations for the Company. From 2005 to 2017, Mr. Gil held various roles with Grupo Industrial Monclova, S.A. de C.V. (“Grupo Industrial”), a corporation operating in railcar manufacturing, offshore platform fabrication, mining, industrial gases and energy. During this time, he also served as a member of Grupo Industrial’s board of directors. From 1997 to 2005, Mr. Gil worked for Trinity Industries de Mexico as Plant Manager at the Monclova plant and the General Manager of Monclova-Sabinas. In 2018, he finished a one-year Advanced Executive Management Program (AD-2) at the Instituto Panamericano de Alta Dirección de Empresa (IPADE) in Monterrey, Mexico. In 1988, he obtained a master’s degree in electrical engineering from Washington University, Saint Louis, Missouri, and in 1986 he received his bachelor’s degree in electronic engineering from the Instituto Tecnológico de Monterrey. Mr. Gil brings to our Board extensive and specific experience in the railcar industry. Rodger L. Boehm, 64, has served as a director since May 2022 and is the chairman of our Compensation Committee and a member of our Audit Committee. Until his retirement in September 2017, Mr. Boehm was a senior partner at McKinsey & Company, Inc. He spent 31 years at the premier management consulting firm in a variety of roles with increasing responsibility, beginning in 1986. Mr. Boehm led client service for leading global institutions, primarily focused on Fortune 500 companies. His client service focused on long-term global growth and performance improvement, helping companies to significantly improve their cost, revenue and service performance. Mr. Boehm’s background in strategic leadership in the industrial sector ranges from developing a global growth strategy for an agricultural and construction equipment manufacturer to improving the enterprise marketing capabilities for a leading global industrial conglomerate. Before McKinsey, he was a quality control engineer with Jones & Laughlin Steel from 1982 to 1984. He currently serves on the board of Ruggable and Hyliion and was formerly a board member for Meritor and Home Chef. Mr. Boehm earned a Bachelor of Science in materials engineering from Purdue University in 1982 and a Master of Business Administration from Harvard University in 1986. Mr. Boehm brings to our Board deep and broad experience in strategic leadership in the industrial sector. Directors whose terms continue until 2026 Elizabeth K. Arnold, 59, has served as a director since August 2019 and is chairperson of our Audit Committee. She is a member of our Nominating and Corporate Governance Committee and our Compensation Committee. Ms. Arnold served as the Senior Vice President, Chief Financial Officer and Treasurer of Houghton International, a specialty chemical company with international operations, from October 2014 to August 2019. From October 2012 to April 2014, Ms. Arnold served as the Chief Financial Officer of Physiotherapy Associates. Prior to joining Physiotherapy Associates, Ms. Arnold served as the Chief Financial Officer of Tyco Flow Control from April 2010 to September 2012. Between 2003 and 2010, Ms. Arnold worked as the Vice President, Corporate Financial Planning & Analysis at Tyco. Earlier in her career, Ms. Arnold served in numerous roles, including executive leadership positions, for General Electric, a global industrial company with products and services ranging from aircraft engines, power generation and oil and gas production to medical imaging. Ms. Arnold also serves as a member of the board of directors and audit committee of Innospec Inc. (Nasdaq: IOSP). She brings to our Board, among other things, extensive corporate finance and public accounting experiences, as well as a wealth of operational knowledge. Ms. Arnold possesses a B.S. in economics from the University of Alabama.

  8. GOVERNANCE OF THE COMPANY

    James R. Meyer, 62, served as our President and Chief Executive Officer from July 2017 and will serve until his retirement from this position with the Company on May 1, 2024. Mr. Meyer has served as a director since July 2017, and effective May 1, 2024, Mr. Meyer will become Executive Chairman of the Board. Mr. Meyer has over 30 years of experience in the heavy equipment, automotive and consumer goods industries. He became Chairman of the Board of Commercial Specialty Truck Holdings, LLC, a commercial truck manufacturer, in 2015 and continues to serve in this capacity. From 2012 to 2015, he served as Chief Operating Officer of Allied Specialty Vehicles, Inc., a manufacturer of specialty vehicles for fire and emergency, commercial and recreation segments. Prior to that, Mr. Meyer held various leadership positions at Brunswick Corporation from 2006 to 2012. Mr. Meyer also spent 16 years at Ford Motor Company where he held various executive positions. Mr. Meyer brings to the board his broad leadership experience from serving in management and directorship roles in the automotive and manufacturing industries. Mr. Meyer has an MBA from the University of Michigan, and graduate and undergraduate degrees in engineering from the Massachusetts Institute of Technology and University of Michigan, respectively. Nasdaq listing rules require all Nasdaq listed companies to disclose consistent, transparent diversity statistics regarding their boards of directors. The Board Diversity Matrix below presents the Board’s diversity statistics in the format prescribed by the Nasdaq rules.

  9. GOVERNANCE OF THE COMPANY

    | Board Diversity Matrix(1) | | | | | | Total Number of Directors | 8 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 1 | 7 | | | | Part II: Demographic Background | | | | | | African American or Black | | | | | | Alaskan Native or Native American | | | | | | Asian | | | | | | Hispanic or Latinx | | 2 | | | | Native Hawaiian or Pacific Islander | | | | | | White | 1 | 5 | | | | Two or More Races or Ethnicities | | | | | | LGBTQ+ | | | | | | Did Not Disclose Demographic Background | | | | |

  10. GOVERNANCE OF THE COMPANY

    | (1) As of the Record Date. Does not include Nicholas J. Randall, who will join the Board on May 1, 2024. |

  11. GOVERNANCE OF THE COMPANY

    Committees of the Board Our Board has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Membership in each committee is shown in the following table. (1)

  12. GOVERNANCE OF THE COMPANY

    | | Audit Committee | Compensation Committee | Nominating & Corporate Governance Committee | | William D. Gehl | ● | | ● | | James R. Meyer | | | | | Elizabeth K. Arnold | ▲ | ● | ● | | Jesús Salvador Gil Benavides | | | | | Rodger L. Boehm | ● | ▲ | | | José De Nigris Felán | | | ● | | Travis D. Kelly | | | | | Malcolm F. Moore | ● | ● | ▲ | | ▲ Chair ● Member | | | |

  13. GOVERNANCE OF THE COMPANY

    | (1) As of the Record Date. Does not include Nicholas J. Randall, who will join the Board on May 1, 2024. |

  14. GOVERNANCE OF THE COMPANY

    Audit Committee. Our Audit Committee currently consists of Ms. Arnold and Messrs. Moore, Gehl and Boehm. Ms. Arnold currently serves as the chair. The primary purpose of our Audit Committee is to assist the Board in monitoring and overseeing the Company’s (i) financial reporting processes, (ii) internal accounting and financial controls, and (iii) accounting principles and auditing practices employed in the preparation and review of financial statements. The Audit Committee appoints the independent registered public accountants to audit our annual financial statements and the scope of and plans for the audit to be undertaken by such accountants. The Audit Committee pre-approves the audit services and permissible non-audit services to be performed by such accountants and takes appropriate actions to ensure the independence of such accountants. The Audit Committee is also responsible for approving related-party transactions. The Audit Committee operates under a written charter, a copy of which is available on our website, www.freightcaramerica.com. The Audit Committee has established and regularly monitors procedures for the receipt, retention and treatment of complaints received regarding accounting, internal accounting controls or auditing matters. The Audit Committee met five (5) times during 2023. Our Board has determined that Ms. Arnold and Messrs. Moore, Gehl and Boehm meet the applicable independence requirements under the Sarbanes-Oxley Act of 2002, Nasdaq rules and the rules and regulations of the SEC. Each of Ms. Arnold and Messrs. Moore, Gehl and Boehm has been determined to be an audit committee financial expert, as that term is defined under the SEC rules implementing Section 407 of the Sarbanes-Oxley Act of 2002, and each is “independent” as defined in the applicable listing standards for audit committee members. Compensation Committee. Our Compensation Committee currently consists of Ms. Arnold and Messrs. Moore and Boehm. Mr. Boehm currently serves as the chair. The primary purpose of our Compensation Committee is to (i) oversee the Company compensation plans, policies, guidelines and practices; and (ii) annually review and approve a report on NEO and director compensation for inclusion in our proxy statement, in accordance with all applicable rules and regulations. The Compensation Committee operates under a written charter, a copy of which is available on our website, www.freightcaramerica.com. The Compensation Committee met four (4) times during 2023. Our Board has determined that Ms. Arnold and Messrs. Moore and Boehm meet the applicable independence requirements under the rules of Nasdaq (including the enhanced independence requirements for compensation committee members) and the rules and regulations of the SEC. In addition, each of Ms. Arnold and Messrs. Moore and Boehm is an “outside director,” as defined in Code Section 162(m), and each of Ms. Arnold and Messrs. Moore and Boehm is a “non-employee” director within the meaning of Rule 16b-3 under the Exchange Act of 1934 (the “Exchange Act”). Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee consists of Ms. Arnold and Messrs. Gehl, Moore and De Nigris Felán. Mr. Moore serves as the chair. The primary purpose of our Nominating and Corporate Governance Committee is to: (i) identify individuals qualified to become board members, consistent with criteria approved by the Board; (ii) recommend to the Board nominees for the Board; (iii) recommend to the Board nominees for each Board committee; (iv) recommend to the Board and review annually the Corporate Governance Guidelines, the Code of Business Conduct and Ethics, Insider Trading Policy and committee charters; and (v) review annually the independence qualifications of the Board and committee members. The Nominating and Corporate Governance Committee operates under a written charter, a copy of which is available on our website, www.freightcaramerica.com. The Nominating and Corporate Governance Committee met three (3) times during 2023. Our Board has determined that Ms. Arnold and Messrs. Gehl, Moore and De Nigris Felán meet the applicable independence requirements under the Sarbanes-Oxley Act of 2002, the rules of Nasdaq and the rules and regulations of the SEC. Commitment to Corporate Responsibility We are committed to growing our business in a sustainable and socially responsible manner with strong governance principles in place. The Nominating and Corporate Governance Committee of our Board has oversight of, and periodically reviews, our policies and programs related to environmental stewardship, social responsibility and governance matters. The Nominating and Corporate Governance Committee meets periodically with senior management to develop, assess and prioritize key corporate responsibility topics that enhance long-term value for the Company and our stakeholders. Environmental Stewardship We aim to minimize the environmental impact of our business by working with our customers to offer lighter weight freight cars, which require less energy to manufacture and offer higher capacity than the freight cars they replace. We are also a leader in the railcar conversion and rebody space, with over 14,000 conversion and rebody projects completed over the last decade. Our conversion and rebody projects use recycled scrap materials from underutilized and inefficient railcar assets to support a more sustainable steel manufacturing process and the reuse of key components, contributing to reduced energy consumption and greenhouse gas emissions. Social Responsibility We continuously strive to improve the health, safety and well-being of our employees, foster an inclusive and collaborative workplace, promote opportunities for professional development, and actively contribute to the communities in which we operate. Workplace safety is a top priority for the Company and we are focused on improving our safety performance with an ultimate goal of zero injuries and incidents. Our safety performance is regularly monitored by our senior leadership team, our Chief Executive Officer (“CEO”), and our Board. Governance Our governance structure is designed to provide accountability for responsible business practices, facilitate transparency and ultimately promote the long-term interests of our stakeholders. We strive to ensure that all our employees act ethically and with integrity in all aspects of their work. A majority of our Board includes diverse and/or independent Board members with extensive experience and expertise in a variety of industries. Our Board provides counsel to and oversight of the senior management team to ensure that our business strategies align with our corporate responsibility goals. Independence of Directors The Board has determined that five (5) of our eight (8) current directors (nine (9) including Mr. Randall effective May 1, 2024), consisting of Ms. Arnold and Messrs. Gehl, Moore, Boehm and De Nigris Felán, are “independent directors” as defined in Nasdaq Listing Rule 5605 and as defined in applicable rules by the SEC. Nasdaq Listing Rule 5605 requires that a majority of our Board be composed of independent directors and that our committees be composed solely of independent directors. Board Leadership Structure

  15. GOVERNANCE OF THE COMPANY

    Our Board strongly endorses the view that one of its primary functions is to protect stockholders’ interests by providing independent oversight of management, including the CEO. However, the Board does not believe that mandating a particular structure, such as a separate Chairman of the Board and CEO, is necessary to achieve effective oversight. The Board retains the right to exercise its judgment to combine or separate the roles of Chairman of the Board and CEO. Currently, the offices of Board Chair and CEO are held by separate persons because the Board has determined that this structure aids in the oversight of management and is currently in the best interests of the Company and its stockholders. Effective May 1, 2024, the Board will have a separate Board Chair (Mr. Meyer as Executive Chair), CEO (Mr. Randall) and Lead Independent Director (Mr. Gehl). Code of Business Conduct and Ethics We have established a Code of Business Conduct and Ethics that applies to our officers, directors and employees, including our CEO and Chief Financial Officer. A copy of the Code of Business Conduct and Ethics is available on our website, www.freightcaramerica.com. We intend to disclose on our website at www.freightcaramerica.com any amendments to or waivers from our Code of Business Conduct and Ethics applicable to any of our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Under the Code of Business Conduct and Ethics, the Board, its committees and the non-employee directors have the right at any time to retain independent outside financial, legal or other advisors as they deem necessary, without the necessity of consulting with or obtaining prior approval of any officer of the Company. Risk Oversight In its governance role, and particularly in exercising its duty of care and diligence, our Board is responsible for monitoring and overseeing the Company’s approach to risk assessment and risk management. The Board has the ultimate responsibility in this area. The Board has delegated the responsibility for overseeing financial risks to the Audit Committee and compensation-related risks to the Compensation Committee. Where appropriate, the Board may delegate risk oversight responsibility in other specific areas to Board committees. The Board requires management to ensure that an appropriate approach to risk management is implemented as part of the day-to-day operations of the Company. The Board further requires that management design internal control systems with a view to identifying and managing the material risks to the business. In fulfilling its responsibilities delegated by the Board as described above, on a periodic basis (but not less often than annually), the Audit Committee reviews and discusses with management and our internal audit function the Company’s significant financial risk exposures and establishes an annual review schedule, which includes periodic financial reviews, internal control assessments and reviews of specific risk areas. The Audit Committee receives periodic updates from management and our internal audit function as per the annual schedule and as necessary based on subsequent determinations. The Audit Committee reports its activities to the full Board on a regular basis and is responsible for making such recommendations with respect to the matters described above and other matters as the Audit Committee may deem necessary or appropriate. The Audit Committee believes that in addition to its own deliberations and assessment of potential risks, the advice and recommendations of its independent auditor provide important objective guidance in this area. In fulfilling its responsibilities delegated by the Board as described above, on a periodic basis (but not less often than annually), the Compensation Committee reports its activities to the full Board and is responsible for making such recommendations with respect to the matters described above and other matters as the Compensation Committee may deem necessary or appropriate. Director Nomination Process The Nominating and Corporate Governance Committee of our Board considers candidates to fill new directorships created by expansion and vacancies that may occur and makes recommendations to the Board with respect to such candidates. The Nominating and Corporate Governance Committee considers all relevant qualifications of candidates for board membership, including factors such as industry knowledge and experience, public company, academic or regulatory experience, financial expertise, current employment and other board memberships, and whether the candidate will be independent under the listing standards of Nasdaq. In addition, in accordance with the Company’s corporate governance guidelines, as part of the nomination process the Nominating and Corporate Governance Committee considers the diversity of the candidate and the diversity of the Board as a whole, including but not limited to factors such as background, experience, expertise, perspective, age, gender, LGBTQ+ and ethnicity. The Nominating and Corporate Governance Committee evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of our business and represent stockholder interests through the exercise of sound judgment using its diversity of experience. The Nominating and Corporate Governance Committee evaluates each incumbent director to determine whether he or she should be nominated to stand for re-election, based on the types of criteria outlined above as well as the director’s overall service to us during his or her term and any relationships and transactions that might impair such director’s independence. The number of members of our Board is currently fixed at eight (8) directors and will be increased to nine (9) effective May 1, 2024 in connection with the addition of Mr. Randall to the Board. The Nominating and Corporate Governance Committee periodically evaluates the current size and the composition of the Board. Our Bylaws provide that nominations for the election of directors at our annual meeting may be made by our Board or any stockholder entitled to vote for the election of directors generally who complies with the procedures set forth in the Bylaws and who is a stockholder of record at the time notice described below is delivered to us. Any stockholder entitled to vote in the election of directors generally may nominate a person for election to the Board at our annual meeting only if timely notice of such stockholder’s intent to make such nomination has been given in writing to our General Counsel and Corporate Secretary at our offices at 125 South Wacker Drive, Suite 1500, Chicago, Illinois 60606. Any recommendations received from stockholders will be evaluated by the Nominating and Corporate Governance Committee in the same manner that potential director nominees suggested by Board members, management or other parties are evaluated. To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Company not less than 90 nor more than 120 days prior to the first anniversary of the previous year’s annual meeting; provided, however, that in the event less than 30 days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Communications with Directors Stockholders and third parties may communicate directly with the entire Board, the independent members of the Board as a group, any individual member of the Board, or the Lead Independent Director by sending correspondence to the below address:

  16. GOVERNANCE OF THE COMPANY

    FreightCar America, Inc. 125 South Wacker Drive, Suite 1500 Chicago, Illinois 60606 Attention: Chair of the Board or Lead Independent Director Communications of a confidential nature can be made directly to the Chair of the Audit Committee regarding any matter, including any accounting, internal accounting control or auditing matter, by submitting such concerns to the Audit Committee. Any submissions to the Audit Committee should be marked confidential and addressed to the Chair of the Audit Committee at: FreightCar America, Inc. 125 South Wacker Drive, Suite 1500 Attention: Chair of the Audit Committee Communications are distributed as appropriate, depending on the facts and circumstances outlined in the communication. In that regard, the Board has requested that certain items that are unrelated to the duties and responsibilities of the Board be excluded from communications to the Board, such as product complaints, product inquiries, new product suggestions, résumés and other forms of job inquiries, surveys and business solicitations or advertisements. Director Attendance at Meetings Directors are encouraged to attend all annual and special meetings of our stockholders. During 2023, the Board held eight (8) meetings. Each of our directors then serving attended at least 75% of the aggregate number of meetings of the Board and meetings of those committees on which he or she served during 2023. All of our directors then serving attended the 2023 annual meeting of stockholders. Director Compensation For a discussion of director compensation, see the section of this Proxy Statement entitled “Director Compensation.”

  17. COMPENSATION OVERVIEW

    | • | Base compensation. Based on NEO compensation benchmarking analysis by Exequity, the Compensation Committee approved the base salary for Mr. Meyer ($625,000), Mr. Tonn ($375,000), and Mr. Riordan ($360,000). Future base salary adjustments for each NEO are considered by the Compensation Committee on an annual basis. |

  18. COMPENSATION OVERVIEW

    | • | Annual incentive compensation. Historically, our annual cash incentive program primarily utilized financial metrics that the Compensation Committee, with input from our CEO, had determined were appropriately linked to stockholder value creation. Accordingly, the performance objectives underlying our annual cash incentive program for 2023 were based on adjusted EBITDA, sales goals, transformational goals, cash related goals and people goals. |

  19. COMPENSATION OVERVIEW

    | • | Long-term incentive compensation. In January 2023, our Board, at the recommendation of the Compensation Committee, approved awards to Messrs. Meyer, Tonn and Riordan of time-based restricted shares and time-based stock options, with each form of award comprising approximately 50% of the target long-term incentive opportunity for each NEO. |

  20. General Authorities and Responsibilities

    General Authorities and Responsibilities The Compensation Committee, consulting with its independent compensation consultants, and with management as necessary, reviews and recommends for approval by the Board our general policies relating to NEO compensation and oversees the development and implementation of such compensation programs. The Compensation Committee, consulting with its independent compensation consultant and with management as necessary, reviews and approves, or recommends for ratification by the Board, NEO compensation, including, to the extent applicable, (i) salary, bonus and incentive compensation levels, (ii) equity compensation, (iii) employment agreements, severance arrangements and change in control agreements/provisions, in each case as, when and if appropriate, and (iv) other forms of NEO compensation. The Compensation Committee meets without the presence of senior management when approving or deliberating on CEO compensation but may, in its discretion, invite the CEO to be present during the approval of, or deliberations with respect to, other NEO compensation. The Compensation Committee may delegate authority to subcommittees, including committees whose members are not members of the Board, as it deems appropriate. The Compensation Committee, as a committee or together with independent members of the Board, periodically reviews and approves corporate goals and objectives relevant to NEO compensation and evaluates the CEO’s performance in light of those goals and objectives. The Compensation Committee recommends for ratification by the Board the CEO’s compensation levels taking into account this evaluation. The Compensation Committee periodically reviews and makes recommendations to the Board with respect to director compensation for non-employee members of the Board and its committees.

  21. Compensation Consultant

    Compensation Consultant The Compensation Committee has the authority to obtain advice and assistance from internal or external legal, accounting or other advisors as it deems appropriate or necessary. The Compensation Committee has the authority to conduct or authorize investigations into any matter within its scope of responsibilities, and retain, at the Company’s expense, such independent counsel, compensation consultant or other consultants and advisors as it deems necessary. During 2023, the Compensation Committee received independent compensation consulting advice from both Exequity and Meridian, including advice on director and executive compensation levels and incentive plan design work relating to the NEOs. The Compensation Committee has reviewed the independence of each of Exequity and Meridian in light of SEC rules and Nasdaq listing standards regarding compensation consultants and has concluded that each of Exequity’s work and Meridian’s work for the Compensation Committee does not raise any conflict of interest.

  22. Compensation Philosophy and Objectives

    | • | Company employees should act in the interests of the Company’s stockholders. We believe that the best way to encourage our employees to act in the long-term interests of the Company’s stockholders is through an equity stake in the Company. We pay a significant portion of total compensation to executives and certain other key employees in the form of long-term performance-based equity compensation, such as performance-based stock options, stock options and restricted shares. |

  23. Compensation Philosophy and Objectives

    | • | Other goals. The Company’s compensation program is designed to balance short-term and long-term financial objectives. |

  24. Elements of Executive Compensation

    | Element | Purpose | | Base Salary | Base salary is comprised of periodic, fixed payments made to each NEO. Base salary is provided to each NEO in order to provide the NEO with a degree of financial certainty and to competitively compensate the NEO for rendering ongoing services to the Company. Competitive base salaries further the compensation program’s objectives by allowing the Company to attract and retain talented employees by providing a fixed portion of compensation. | | Annual Cash Incentive Awards | The primary purposes of the annual cash incentive program are to incentivize employees to achieve certain pre-determined performance objectives over the fiscal year that, among other things, are linked to stockholder value creation and to competitively reward employees for achieving results. | | Long-Term Incentive Awards | The primary purpose of the long-term incentive award program is to align employee and stockholder interests through equity instruments that incentivize employees to increase stockholder value, competitively reward employees for increasing stockholder value, and retain employees who are critical to value creation. | | Post-Employment Benefits | In the event of certain qualifying terminations of employment, termination benefits provide NEOs with additional financial security, which we believe is necessary to attract and retain talented executives. For more details, see below under “Severance Arrangements”. | | Retention and Change in Control Benefits | We provide NEOs with certain retention and change in control benefits that we believe help minimize inherent conflicts of interest that may arise for executives in potential change in control transactions. |

  25. Elements of Executive Compensation

    The NEOs’ restricted share awards generally vest on the third anniversary of the grant date, subject to each NEO’s continued service through the applicable vesting date. The NEOs’ option awards generally vest in three equal installments, beginning on the first anniversary of the grant date, subject to each NEO’s continued service through the applicable vesting date. It is the policy of the Compensation Committee not to time the award of equity-based compensation to coincide with the release of favorable or unfavorable material non-public information about the Company. Equity Compensation Plan Information The following table contains information as of December 31, 2023 about the Company’s equity compensation plans, all of which have been approved by the Company’s stockholders.

  26. Elements of Executive Compensation

    | (1) Represents shares of common stock authorized for issuance under the LTIP in connection with awards of stock options, share appreciation rights, restricted shares, restricted share units, performance shares, performance units, dividend equivalents and other share-based awards. |

  27. Elements of Executive Compensation

    | (2) Constitutes inducement grant of 300,000 stock options that were not vested as of December 2023. |

  28. Elements of Executive Compensation

    Retirement and Pension Benefits The Company provides matching contributions to participants in the Company’s 401(k) Plan of up to 4% of eligible compensation. These matching contributions and any earnings thereon generally are held and invested under the plans until termination of the participant’s employment. The Company maintains a tax-qualified defined benefit pension plan, for the benefit of eligible employees. Benefits under our pension plan are frozen and will not be impacted by increases due to future service and compensation increases. We made no contributions to our defined benefit pension plan during fiscal year 2023 and are not required to make any contributions to our defined benefit pension plan in 2024. During fiscal year 2023, the Company offered a one-time, lump-sum pay-out option to its terminated vested participants. None of the NEOs participate in the Company pension plan. The Company does not make available a non-qualified deferred compensation plan for its NEOs or other employees. Change in Control and Post-Employment Benefits For 2023, we set termination and change in control benefits at levels that we believe fall within the range of competitive market practices. Each of our NEOs is eligible to receive certain payments and benefits in connection with his or her termination of employment under various circumstances, including following a change in control of the Company, under the Company’s Executive Severance Plan (as defined below), the 2022 LTIP (and the associated award agreements) and, with respect to Mr. Meyer, his employment agreement.

  29. Severance Arrangements

    Severance Arrangements Our NEOs participate in the Company’s Executive Severance Plan, as amended and restated January 17, 2022 (the “Executive Severance Plan”), pursuant to which they are each eligible for payments and benefits in connection with certain terminations of their employment. In connection with Mr. Meyer’s appointment as President and CEO, the Company entered into a letter agreement with Mr. Meyer, effective July 31, 2017 (as amended, the “Meyer Agreement”), as summarized in more detail below under the heading “Employment Agreements and Other Arrangements for NEOs.” As noted below, the Meyer Agreement modifies the terms of the applicable NEOs’ payments and benefits pursuant to the severance plans under certain circumstances.

  30. Executive Severance Plan

    Executive Severance Plan The Executive Severance Plan covers executives who are designated by the Company to participate (each, a “Participant”). Upon a Participant’s termination of employment for any reason, including death, disability, voluntary resignation, and termination by the Company for Cause (as defined in the Executive Severance Plan), the Participant is entitled to the following accrued obligations: (i) accrued base salary and unused vacation through the date of termination, (ii) prior fiscal year bonuses that were previously earned but not yet paid, and (iii) accrued and vested benefits and unreimbursed expenses incurred but unpaid as of the date of termination ((i), (ii) and (iii) referred to as the “Accrued Obligations”). In addition, Participants who experience an involuntary termination of employment by the Company without Cause or a resignation for Good Reason (as defined in the Executive Severance Plan), are also entitled under the Executive Severance Plan to (i) 12 months of base salary continuation (“Salary Continuation”); (ii) an amount equal to the average of the annual bonuses paid to them for the last two full years, payable on March 15 of the year following termination (“Average Annual Bonus”); and (iii) 12 months of subsidized participation in the Company’s group health plan for the Participant and their covered family members, where the Participant’s costs for the coverage shall be at the same cost and coverage levels as apply to active employees (“Subsidized Health Coverage”). To qualify for the foregoing Salary Continuation, Average Annual Bonus and Subsidized Health Coverage benefits, the Participant must provide transition services to the Company, if reasonably requested by the Board, for up to 12 months following such Participant’s termination. Following a Change in Control (as defined in the Executive Severance Plan), if a Participant is not retained by the successor employer on terms substantially comparable in the aggregate to the terms on which they were employed prior to the Change in Control, the Participant’s termination shall qualify as a resignation for Good Reason, making them eligible for the benefits noted above. Otherwise, the Executive Severance Plan does not provide for special severance benefits if a Participant is terminated in connection with a Change in Control. For Participants who terminate employment after attaining age 60 and completing at least 5 years of service with the Company, having provided the Company at least 12 months (6 months in the case of Messrs. Riordan and Tonn) prior notice of their retirement date, the following special Executive Severance Plan benefits shall apply with respect to those Participants’ outstanding equity incentive awards: (i) such awards shall continue to vest as if the Participant had remained in continuous service through (a) each applicable vesting date, or (b) for awards subject to performance-vesting, through the performance period, with any performance goal or metric vesting only based upon the achievement of the same, and (ii) any options and SAR awards that are vested or become vested under (i), shall remain exercisable until the earlier of their original expiration date or the 10-year anniversary of their grant date. The Meyer Agreement modifies application of the Executive Severance Plan provisions for Mr. Meyer in the following respects: (a) the definitions of “Cause” and “Good Reason” in the Meyer Agreement shall apply to Mr. Meyer in lieu of the corresponding definitions set forth in the Executive Severance Plan; (b) Mr. Meyer shall also be eligible for, as an Accrued Obligation, his current (prorated) fiscal year bonus, to the extent earned and unpaid; and (c) with respect to the payments and benefits payable upon a termination without Cause (if such termination without Cause occurs within the 24 months following a Change in Control) or a resignation for Good Reason, the Meyer Agreement provides instead for (i) 24 months’ Salary Continuation, (ii) two times his Average Annual Bonus (payable in two installments, on March 15 of the year following Mr. Meyer’s termination and March 15 of the second year following Mr. Meyer’s termination), and (iii) 24 months of Subsidized Health Coverage.

  31. Enhanced Severance Plan

    Enhanced Severance Plan In 2019, the Company adopted the Enhanced Severance Plan (the “Enhanced Plan”) to provide for enhanced severance if Mr. Meyer experiences a Qualifying Termination in connection with a Successful Transaction (as defined under the Enhanced Plan). Under the Company’s Enhanced Plan, a “Qualifying Termination” occurs if, in connection with—or within 24 months following—the consummation of a Successful Transaction, a participant is terminated by the Company without Cause or resigns from the Company due to Good Reason (each as defined under the Enhanced Plan). If a participant’s employment is terminated by the Company without Cause or terminated by the participant for Good Reason, in either case within three months prior to the date on which the Successful Transaction occurs, and it is reasonably demonstrated by the participant that such termination of employment or event constituting Good Reason (x) was at the request of a third party that had taken steps reasonably calculated to effect a Successful Transaction or (y) otherwise arose in connection with or in anticipation of a Successful Transaction, then the participant’s termination shall be deemed to be a Qualifying Termination under the plan upon consummation of the Successful Transaction and the participant shall be entitled to receive the same severance benefits as if such termination occurred in connection with a Successful Transaction. Upon a Qualifying Termination under the Enhanced Plan, Mr. Meyer is eligible to receive a lump sum payment of six months’ annual base salary plus one-half of his Average Annual Bonus, in addition to any amounts that might be payable under the Executive Severance Plan for a termination without Cause, a resignation for Good Reason or a termination without Cause in the 24 months following a Change in Control, as applicable, thereunder. In addition, the Enhanced Plan also provides Mr. Meyer with 12 months of Subsidized Health Coverage. To the extent that Mr. Meyer is also eligible for Subsidized Health Coverage under the Executive Severance Plan, the benefit will be capped at 18 months, unless an employment agreement provides for a longer continuation period (e.g., the Meyer Agreement provides for 24 months of Subsidized Health Coverage upon a resignation for Good Reason or a termination without Cause in the 24 months following a Change in Control). If a participant’s employment is terminated due to death or Disability (as defined under the Enhanced Plan) after a Qualifying Termination but before severance payments have been made under the Enhanced Plan, the Company will pay such severance payments to the participant’s surviving spouse (or, if none, the participant’s representative), and the Company shall have no further obligations to the participant (or the participant’s representative) under the Enhanced Plan.

  32. Employment Agreements and Other Arrangements for NEOs

    Employment Agreements and Other Arrangements for NEOs James R. Meyer. As noted above, Mr. Meyer entered into the Meyer Agreement in connection with his appointment as President and CEO. The Meyer Agreement does not provide for a specified term. It provides for an initial base salary of $500,000 per year; target and maximum annual bonus opportunities of 100% and 200%, respectively, of his base salary; and a prorated bonus in respect of any partial year in accordance with the terms of the Meyer Agreement; and eligibility for an equity award equal to 100% of his base salary. Mr. Meyer is entitled to participate in all incentive compensation plans and to receive all benefits under any employee benefit plan made available to executive employees. In connection with Mr. Meyer being hired, he was granted a performance-based stock option to purchase up to 350,000 shares of the Company’s common stock, with a vesting schedule as described in footnote 5 to the Outstanding Equity Awards at Fiscal Year-End 2020 table. In addition, Mr. Meyer is a participant in the Company’s Executive Severance Plan and Enhanced Plan, with the modifications described above. Under the terms of the LTIP and Mr. Meyer’s incentive equity award agreements, upon a Qualifying Termination (as defined in the LTIP), all unvested awards with time-based vesting conditions or restrictions would become fully vested (and options or SARs exercisable) and, to the extent that any performance awards have been granted, such awards would become vested at the greater of actual performance achieved or target level, but in all cases prorated based on the elapsed proportion of the performance period as of such termination. Under the terms of the LTIP, all of Mr. Meyer’s unvested equity awards would fully vest upon his death. Notwithstanding the foregoing, if a third-party successor following a Change of Control (as defined in the LTIP) does not assume or replace the obligations under the outstanding equity awards, then all outstanding awards will fully and immediately vest. Mr. Meyer has agreed to keep confidential certain information and agreed to certain non-solicitation, non-competition and non-disparagement restrictions that apply for one year following termination of employment. W. Matthew Tonn. Mr. Tonn was appointed Chief Commercial Officer effective September 30, 2019 pursuant to an offer letter, dated June 9, 2019 (the “Tonn Agreement”). The Tonn Agreement does not provide for a specified term. The Tonn Agreement provides for a base salary of $310,000; threshold, target, and maximum bonus opportunities of 20%, 50% and 100%, respectively, of his base salary; a sign-on award granting 40,000 restricted shares of Company stock under the LTIP; and a signing bonus of $50,000. Mr. Tonn is entitled to participate in all management incentive plans and to receive all benefits under any employee benefit plan made available to employees. Mr. Tonn became a participant in the Company’s Executive Severance Plan as of his start date. Mr. Tonn is also eligible for additional severance in the event his employment is terminated by the Company without “Cause” or he terminates his employment for “Good Reason” within 24 months following a “Change of Control” (each as defined in the Executive Severance Plan). Upon the occurrence of such event, in addition to any benefits provided under the Executive Severance Plan, Mr. Tonn is eligible to receive continued base salary for an additional 12-month period following termination of employment, an additional payment equal to the average of the annual bonuses paid for the last two full years and an additional six months of health insurance continuation. In the event of a Change of Control while Mr. Tonn is employed with the Company, his equity vesting will be accelerated, and he will receive a transaction payment equal to 75% of his annual base salary. Mr. Tonn has agreed to keep confidential certain information, to assign intellectual property rights to the Company and to certain restrictions with respect to non-competition and non-solicitation of current or prospective customers that apply for one year following termination of employment, and non-solicitation of employees that apply for two years following termination of employment. Michael A. Riordan. In connection with Mr. Riordan’s appointment as Vice President, Chief Financial Officer, Treasurer, the Company and Mr. Riordan entered into a letter agreement regarding the terms of employment (the “Riordan Agreement”) dated March 18, 2022 and effective as of March 21, 2022. The Riordan Agreement does not provide for a specified term. It provides for an initial base salary of $300,000 per year; threshold, target and maximum annual bonus opportunities of 20%, 50% and 100%, respectively, of his base salary, and a sign-on award granting (i) 40,000 restricted shares of Company stock under the LTIP and (ii) 100,000 Company stock options. Mr. Riordan is entitled to participate in all management incentive plans and to receive all benefits under any employee benefit plan made available to employees. Mr. Riordan is a participant in the Company’s Executive Severance Plan. Mr. Riordan has agreed to keep confidential certain information, to assign intellectual property rights to the Company and to certain restrictions with respect to non-competition and non-solicitation of current or prospective customers that apply for one year following termination of employment, and non-solicitation of employees that apply for two years following termination of employment. Stock Ownership Guidelines The Board requires that the Company’s NEOs and meet minimum stock ownership requirements that are consistent with industry standards and are set forth in the Company’s Corporate Governance Guidelines. Each NEO must maintain Company stock holdings at least equal to the aggregate number of shares (including options or shares granted but not vested) that the Company has awarded to such NEO during the three-year period ending on any given date of determination. As of December 31, 2023, the stock ownership of each of our NEOs met or exceeded the Company’s minimum stock ownership requirements. Executive Compensation Recovery Policy (“Clawback Policy”) In 2023, the Company adopted a new Clawback Policy in accordance with Section 10D of the Exchange Act and Rule 10D-1 promulgated thereunder (collectively, “Section 10D”). In the event the Company is required to prepare an accounting restatement, the Clawback Policy provides that the Company will reasonably promptly recover the erroneously awarded compensation from covered executive officers in accordance with Section 10D and Nasdaq rules. The Clawback Policy was filed with the SEC on March 18, 2024 as Exhibit Number 97.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Company Insider Trading Policy The Company’s Insider Trading Policy prohibits directors, NEOs, other officers who are subject to Section 16 of the Exchange Act, and certain other employees who may be designated from time to time by the Company’s General Counsel (collectively, “Insiders”) from the following actions, without prior written consent from the Company’s General Counsel: (i) trading in Company securities during certain restricted periods, (ii) engaging in short sales of Company securities, (iii) buying or selling Company options (other than options granted pursuant to the Company’s long-term incentive plans), including puts or calls, (iv) holding Company securities in margin accounts

  33. Employment Agreements and Other Arrangements for NEOs

    and/or pledging Company securities as collateral, (v) hedging transactions, and (vi) placing standing orders with a broker to buy or sell Company securities that have a duration in excess of two (2) business days (other than when such orders are made pursuant to a trading plan that complies with SEC Rule 10b5-1). In addition, Insiders must preclear transactions in Company securities in advance with the Company’s General Counsel.

  34. EXECUTIVE COMPENSATION

    | Summary Compensation Table | | | | | | | | | | Name | Principal Position | Year | Salary (1) | Stock Awards (2) | Option Awards (3) | Non-Equity Incentive Plan Compensation (4) | All Other Compensation | Total | | James R. Meyer | President & Chief Executive Officer | 2023 | $625,000 | $423,749 | $421,651 | $621,500 | $20,724 | $2,112,624 | | | | 2022 | $565,000 | $423,749 | $423,750 | $621,500 | $8,473 | $2,042,472 | | Michael A. Riordan | Chief Financial Officer & Treasurer | 2023 | $360,000 | $112,500 | $111,943 | $165,000 | $9,724 | $759,167 | | | | 2022 | $283,756 | $225,900 | $313,251 | $165,000 | $14,901 | $1,002,808 | | W. Matthew Tonn | Chief Commercial Officer | 2023 | $375,000 | $125,625 | $125,003 | $184,250 | $16,812 | $826,690 | | | | 2022 | $335,000 | $125,625 | $125,624 | $184,250 | $29,130 | $799,629 |

  35. EXECUTIVE COMPENSATION

    | Year | Summary Compensation Table Total for PEO(1)(2) | Compensation Actually Paid to PEO(1)(2) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(1)(2) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(1)(2) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return | Net Income(3) | | 2023 | $2,112,624 | $1,049,247 | $792,929 | $668,546 | $112 | ($23,544,000) | | 2022 | $2,042,472 | $2,156,711 | $842,552 | $485,722 | $133 | ($38,847,000) | | 2021 | $2,849,256 | $3,918,003 | $1,222,954 | $1,458,205 | $153 | ($41,447,000) |

  36. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION Set forth below are summaries of the compensation paid to each of our non-employee directors in 2023, in both cash and equity awards. No information is presented for Mr. Randall, who will join the Board on May 1, 2024 and will not receive any compensation for his role as an employee director. 2023 Director Compensation Table

  37. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Total | | Elizabeth K. Arnold | $73,000 | $64,999 | $137,999 | | Rodger Boehm | $65,000 | $64,999 | $129,999 | | José De Nigris Felán | $49,000 | $64,999 | $113,999 | | William D. Gehl | $124,000 | $64,999 | $188,999 | | Travis Kelly | $46,000 | $64,999 | $110,999 | | Malcolm F. Moore | $68,000 | $64,999 | $132,999 |

  38. DIRECTOR COMPENSATION

    | (1) Includes the following: annual retainer fees, committee chairmanship fees, board of director fees, and committee meeting attendance fees (as defined below): |

  39. DIRECTOR COMPENSATION

    | | Ms. Arnold | Mr. Boehm | Mr. De Nigris Felán | Mr. Gehl | Mr. Kelly | Mr. Moore | | Retainer | $45,000 | $45,000 | $45,000 | $45,000 | $45,000 | $45,000 | | Chairmanship | $15,000 | $10,000 | $- | $70,000 | $- | $10,000 | | Attendance | $13,000 | $10,000 | $4,000 | $9,000 | $1,000 | $13,000 | | Total | $73,000 | $65,000 | $49,000 | $124,000 | $46,000 | $68,000 |

  40. DIRECTOR COMPENSATION

    | (2) Represents the grant date fair value of restricted shares granted by the Company during 2023 computed in accordance with ASC Topic 718. Grant date fair value was determined by multiplying the number of restricted shares granted by the average of the high and low stock trading prices for the Company’s common stock as reported by Nasdaq on the grant date. |

  41. DIRECTOR COMPENSATION

    The number of shares awarded to non-employee directors during 2023 and the aggregate unvested stock awards as of December 31, 2023 are as follows:

  42. DIRECTOR COMPENSATION

    | Director | Stock Awards During 2023 | Aggregate Unvested Stock Awards | | Elizabeth K. Arnold | 23,985 | 23,985 | | Rodger Boehm | 23,985 | 23,985 | | José De Nigris Felán | 23,985 | 23,985 | | William D. Gehl | 23,985 | 23,985 | | Travis D. Kelly | 23,985 | 23,985 | | Malcolm F. Moore | 23,985 | 23,985 |

  43. DIRECTOR COMPENSATION

    We reimburse directors for expenses incurred in connection with attendance at Board or committee meetings. Our Board, at the recommendation of the Compensation Committee based on the study and suggestions of its independent compensation consultant, approved the Company’s non-executive director compensation policy (the “Director Compensation Policy”), which became effective May 22, 2022, consisting of an annual cash retainer payable to non-executive members of the Board (inclusive of meeting fees for up to seven meetings annually) is $45,000, and an annual equity award is a grant of restricted shares valued at $65,000, with the shares to vest fully on the earlier of (a) the first anniversary of the date of grant or (b) the next annual meeting of the Company’s stockholders following the date of grant. For each Board meeting in excess of seven per year, non-executive members of the Board receive a meeting fee of $1,000 per board meeting. In addition, the Chair and members of each Board committee receive additional compensation as follows:

  44. DIRECTOR COMPENSATION

    | | Chair Retainer (annual) | Meeting Fees (per meeting) | | Audit | $15,000 | $1,000 | | Compensation | $10,000 | $1,000 | | Nominating and Corporate Governance | $10,000 | $1,000 |

  45. DIRECTOR COMPENSATION

    The Chair of the Board receives an incremental cash retainer of $70,000 per year and, effective May 1, 2024 the Lead Independent Director will receive an annual incremental cash retainer of $15,000. The cash retainers and meeting fees are payable on a quarterly basis, in arrears, on the first day of each quarter. The Company does not provide any incentive-based non-equity compensation to directors and does not maintain a defined benefit or actuarial pension plan or a deferred compensation plan for directors. Stock Ownership Guidelines The Board requires that each non-executive director will maintain an amount of Company stock holdings at least equal in value to three times the amount of annual cash retainer paid to the non-executive director (not including any additional fees for service on a Board committee or as chair of a committee). The director may reduce the amount of stock holdings by the number of shares the director has applied directly to the payments of taxes on such awards. Company stock holdings that count towards meeting ownership requirements include: (a) shares owned outright or in trust; and (b) stock options, restricted shares or restricted share units, including options or shares granted but not vested. If a director consistently fails to comply with the stock ownership requirements, the Compensation Committee will take such actions as it deems appropriate, including, but not limited to allocating an additional amount of the director’s annual compensation to the purchase of stock in accordance with the program or reducing future equity compensation awards. As of December 31, 2023, the stock ownership of each of our non-executive directors either (i) exceeded the Company’s minimum stock ownership requirements or (ii) was in the transition period to comply with such guidelines.