DEF 14A of Legacy Housing Corp
Filed Nov 12, 2025 · FY20240001104659-25-109708
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS Our Certificate of Formation provides that the number of directors is fixed by Board resolution. Our Board consists of five directors, who are listed below:
PROPOSAL 1: ELECTION OF DIRECTORS
| Name | Age | Principal Occupation | Director Since | | Curtis D. Hodgson | 71 | Co-Founder and Director – Legacy Housing | 2018 | | Kenneth E. Shipley | 66 | Co-Founder, Chairman of the Board of Directors and Interim Chief Executive Officer – Legacy Housing | 2018 | | Brian J. Ferguson(1) | 46 | Attorney and Certified Public Accountant | 2023 | | Skyler M. Howton(1) | 38 | Attorney | 2024 | | Jeffrey K. Stouder(2) | 54 | Chief Accounting Officer – Tungsten Automation | 2020 |
PROPOSAL 1: ELECTION OF DIRECTORS
(1) Member of the Audit Committee, Compensation Committee and Nominations and Corporate Governance Committee. (2) Member of the Audit Committee and the Compensation Committee. Unless you indicate otherwise, shares represented by executed proxies will be voted “FOR” the election as directors of the persons listed above. As of the date of this proxy statement, the Company has no reason to believe that any nominee will be unable to serve or for good cause will not serve as a director. However, if for any reason a nominee becomes unable to serve or for good cause will not serve if elected, the Nominations and Corporate Governance Committee may recommend, and the Board may propose a substitute nominee at the Annual Meeting and the proxies identified in the proxy card will vote to approve the election of the substitute nominee. If substitute nominees are proposed, we will, in full compliance with all applicable state and federal laws and regulations, file an amended proxy statement and proxy card that, as applicable, (1) identifies the substitute nominee(s), (2) discloses that such nominees have consented to being named in the revised proxy statement and to serve if elected and (3) includes the disclosure required by Item 7 of Schedule 14A with respect to such nominees.
Director Qualifications
Director Qualifications Our Board, acting through our Nominations and Corporate Governance Committee, is responsible for nominating directors that have the experience, qualifications, skills, and attributes necessary to guide the Company and effectively serve on the Board. To that end, we have highlighted specific experience, qualifications and skills that we believe qualify each individual to serve as a director of Legacy.
Director Biographies
Director Biographies The following is a brief account of our directors’ business experience: Curtis D. Hodgson co-founded our company in 2005, served as our Co-Chief Executive Officer from January 2018 to February 2019, as our Executive Chairman through December 2024, and currently serves as a member of our Board. He has been a member of our Board since January 2018. Prior to that, Mr. Hodgson served as a partner of the company’s predecessor, Legacy Housing, Ltd., and controlled its general partner. Over the past 38 years, Mr. Hodgson has owned and operated several manufactured home retail operations and manufactured housing communities in Texas. Mr. Hodgson has significant expertise in the manufactured housing industry. Mr. Hodgson earned a B.S. in Engineering from the University of Michigan and J.D. from The University of Texas. Mr. Hodgson’s prior experience as a director and senior executive officer of the Company and knowledge of the manufactured housing industry make him well qualified to serve on our Board. Kenneth E. Shipley co-founded our company in 2005, served as our Co-Chief Executive Officer from January 2018 to February 2019, served as our President and Chief Executive Officer from February 2019 to June 2022, served as our Executive Vice President from June 2022 to October 2025 and currently serves as Chairman of the Board and Interim Chief Executive Officer of the Company. He has been a member of our Board since January 2018. Prior to that, Mr. Shipley served as a partner of the company’s predecessor, Legacy Housing, Ltd. Mr. Shipley has more than 30 years of experience in the manufactured home industry. Since 1981, he has also owned and operated Bell Mobile Homes in Lubbock, Texas, a manufactured home retailer. Mr. Shipley’s prior experience as a director and senior executive officer of the Company and knowledge of the manufactured housing industry make him well qualified to serve on our Board. Brian J. Ferguson was elected to our Board in December 2023. He has practiced law as a Texas attorney since 2005 and was a certified as public accountant in 2006. He currently owns and manages a portfolio of oil and gas interests concentrated in West Texas and real estate holdings in the Rio Grande Valley. In addition, Mr. Ferguson has consulted on audit, compliance, and regulatory issues for publicly traded companies and registered investment advisors since 2005. He is a 2002 graduate of the University of Texas Undergraduate School of Business and Graduate School of Business. He graduated from the University of Texas School of Law in 2005. He was commissioned as an officer in the United States Air Force, where he continues to serve in the Reserve component. Mr. Ferguson’s experience on audit, compliance and regulatory matters makes him well qualified to serve on our Board. Skyler M. Howton was elected to our Board in December 2024. She has practiced law as a Dallas-based attorney since 2013, and she currently serves as the Mass Torts Practice Group Leader at the Rogge Dunn Group, PC, where she handles product liability claims against major corporations nationwide. Ms. Howton has also represented small, large, and Fortune 50 companies over her more than ten years’ experience at AM Law 100 firms. Ms. Howton is a 2009 graduate of Pepperdine University and a 2012 graduate of Baylor Law School, where she served as Articles Editor of the Baylor Law Review. In 2022, Ms. Howton returned to Baylor Law School to obtain an LLM in Litigation Management. Ms. Howton is active in the Dallas community. Ms. Howton served as a Dallas CASA for more than five years. Ms. Howton currently serves as a committee chair for Attorneys Serving the Community, a position she has held for nearly ten years, and as a Vice President on the Board of Directors for the Dallas Women Lawyers Association. Ms. Howton’s experience on compliance, regulatory and corporate governance matters makes her well qualified to serve on our Board. Jeffrey K. Stouder was elected to our Board in December 2020. Mr. Stouder is the Chief Accounting Officer at Tungsten Automation, a global leader in intelligent workflow automation. Mr. Stouder’s career spans over 30 years, leading global accounting and finance organizations across software, manufacturing, and IT hardware industries. Prior to Tungsten Automation, Mr. Stouder served as Vice President, Global Controller at E2open, LLC from August 2019 — September 2025. Previously, Mr. Stouder was Chief Financial Officer at Global Resale and held leadership roles at NBG Home and Dell Technologies. Mr. Stouder began his career at Arthur Andersen LLP in the Dallas office, where he worked in the audit practice from 1994 to 2000. Mr. Stouder received his B.B.A. and M.S. Accounting degrees from Texas Tech University and is a certified public accountant. Mr. Stouder’s 30 years of experience in accounting, finance, audit, corporate governance, mergers and investor relations makes him well qualified to serve on our Board. There are no family relationships among any of the directors and executive officers.
Summary Compensation Table
Summary Compensation Table The table below shows the compensation paid to or earned by our NEOs for the years ending December 31, 2024 and December 31, 2023 and the positions such NEOs held during the year ended December 31, 2024.
Summary Compensation Table
| Name and Position | Years | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Nonequity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | Kenneth E. Shipley Executive Vice President and Chairman of the Board(1) | 2024 | 50,000 | — | — | — | — | — | — | 50,000 | | | 2023 | 50,000 | — | — | — | — | — | — | 50,000 | | R. Duncan Bates Former President and Chief Executive Officer(2) | 2024 | 300,000 | 100,000 | — | — | — | — | — | 400,000 | | | 2023 | 300,000 | 100,000 | — | — | — | — | — | 400,000 |
Summary Compensation Table
| Name and Position | Years | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Nonequity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | Jeffrey M. Fiedelman Former Chief Financial Officer(3) | 2024 | 276,058 | 27,500 | — | — | — | | — | 303,558 | | | 2023 | 76,154 | 10,000 | — | 349,740 | — | — | — | 435,894 |
Summary Compensation Table
Mr. Shipley was Executive Vice President and Director in 2024; effective December 4, 2024, he became Chairman of the Board. (2) Mr. Bates resigned from the Company in October 2025. (3) Mr. Fiedelman resigned from the Company in October 2025.
Employment Agreements
Employment Agreements Kenneth E. Shipley Employment Agreement. On November 27, 2018, we entered into an employment agreement with Kenneth E. Shipley to serve as our Co-Chief Executive Officer. From February 2019 to June 2022, Mr. Shipley served as our President and sole Chief Executive Officer, and in June 2022, Mr. Shipley became our Executive Vice President. In December 2024, Mr. Shipley became Chairman of the Board. Mr. Shipley’s initial term of the employment agreement expired on December 31, 2021, and his current term of employment automatically extends for one year, every year on December 31. Under his employment agreement, Mr. Shipley’s annual base salary is $50,000, and he is entitled to receive such health, death, disability, and other insurance benefits, and to participate in such retirement and other plans, as are made available to other executive officers of the Company. The employment agreement provides for customary provisions for the termination of Mr. Shipley’s employment. Mr. Shipley is entitled to receive his base salary for the remaining portion of the employment period if he is terminated without cause. Additionally, in the event Mr. Shipley’s employment with us is terminated within one year after a change of control (as defined in the employment agreement) for certain reasons, we have agreed to pay Mr. Shipley an amount equal to two years’ compensation at his then current rate of pay. The employment agreements also contain customary confidentiality, intellectual property, non-solicitation and non-competition covenants. Duncan Bates Employment Agreement. On June 7, 2022, we entered into an employment agreement with Duncan Bates to serve as our President and Chief Executive Officer. The employment agreement provided for Mr. Bates to receive a base salary of $300,000 per year and a restricted stock award of 14,700 shares of Company common stock. The employment agreement granted Mr. Bates (i) qualified stock options valued at $1,000,000 that vest at a rate of 10% per year, (ii) an option to purchase 300,000 shares of Company common stock at an exercise price of $36 per share, which would vest one-tenth on each anniversary of the effective date and have a term of ten years and (iii) an option to purchase 600,000 shares of Company common stock at an exercise price of $48 per share, which would vest one-tenth on each anniversary of the effective date and have a term of ten years; each of these grants were subject to the terms of the Company’s 2018 Incentive Compensation Plan. The employment agreement provided for customary provisions for the termination of Mr. Bates’ employment. The employment agreement also contained customary confidentiality, intellectual property, non-solicitation and non-competition covenants. On September 27, 2025, Mr. Bates voluntarily resigned as the President and Chief Executive Officer, effective October 10, 2025. Jeffrey M. Fiedelman Employment Agreement. On September 10, 2023, we entered into an employment agreement with Jeffrey M. Fiedelman to serve as our Chief Financial Officer. The employment agreement provided for Mr. Fiedelman to receive a base salary of $275,000 per year. Mr. Fiedelman was eligible for an annual incentive bonus that would be determined by the Board. The employment agreement granted Mr. Fiedelman qualified stock options valued at $500,000 that vested at a rate of 20% per year and would be subject to the terms of the Company’s 2018 Incentive Compensation Plan. The employment agreement provided for customary provisions for the termination of Mr. Fiedelman’s employment. The employment agreement also contained customary confidentiality, intellectual property, non-solicitation and non-competition covenants. On October 6, 2025, Mr. Fiedelman voluntarily resigned as the Chief Financial Officer, effective October 10, 2025.
Outstanding Equity Awards
Outstanding Equity Awards The following table lists outstanding equity awards held by our NEOs as of December 31, 2024.
Outstanding Equity Awards
| | | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity incentive Plan awards: Number of securities underlying unexercised unearned options (#) | Option Exercise Price ($) | 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 (#) | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) | | Duncan Bates(1) | 6/7/22 | — | 49,968 | — | 16.01 | 6/7/32 | | | | | | | 6/7/22 | 60,000 | 240,000 | — | 36.00 | 6/7/32 | | | | | | | 6/7/22 | 120,000 | 480,000 | — | 48.00 | 6/7/32 | | | | | | Jeffrey M. Fiedelman(2) | 12/1/23 | 4,299 | 17,197 | — | 23.26 | 12/1/28 | | | | |
Outstanding Equity Awards
(1) Mr. Bates received the awards upon joining the Company as Chief Executive Officer in June 2022. (2) Mr. Fiedelman received the award upon joining the Company as Chief Financial Officer in September 2023.
Pension Benefits and Nonqualified Deferred Compensation
Pension Benefits and Nonqualified Deferred Compensation We do not provide any pension benefits, nonqualified defined contribution or other deferred compensation plans for our NEOs.
Potential Payments Upon Termination or Change of Control
Potential Payments Upon Termination or Change of Control This section describes the payments and benefits that may be payable upon certain terminations of employment or a change of control and the events that trigger them pursuant to the employment agreements for Messrs. Shipley, Bates and Fiedelman. Certain equity awards held by these NEOs are subject to accelerated vesting on a change in control. This section describes the payments and benefits that may be payable upon certain terminations of employment or a change of control and the events that trigger them. Our payment obligations under each employment agreement are contingent upon the NEO executing and delivering a reasonable general release of claims in favor of the Company. Mr. Shipley does not have this requirement. The employment agreements for these NEOs require the NEO to satisfy the following obligations: During his employment and for 12 months following his termination of employment the NEO must comply with the provisions of a covenant not to compete, except for Mr. Fiedelman who must comply for six months if he terminates employment voluntarily or for 12 months if he is terminated by the Company for cause, death or disability, or without cause after a change of control. 2. During his employment and for 24 months following his termination of employment, the NEO must comply with a customary non-solicitation covenant. 3. During his employment and at all times subsequent to the last day of his employment, the NEO must comply with a customary confidentiality covenant. There are four categories of events related to a termination of employment that can trigger payments or other benefits to our NEOs: (i) death and disability; (ii) involuntary termination; (iii) voluntary termination; and (iv) change of control (followed by an involuntary termination). The following chart describes each category. Death or Disability. Upon the termination of any NEO’s employment as a result of death or disability, the Company does not have any continuing obligation after termination to the NEO or the NEO’s estate. Involuntary Termination. The Company may terminate an NEO for cause or without cause. Termination for cause occurs when we decide to terminate a NEO based on our good faith determination that one of certain events has occurred. In this case, the Company does not have any continuing obligation after termination to the NEO. Termination without cause occurs when we decide to terminate the NEO’s employment for any reason other than for cause or disability. For Mr. Shipley and Mr. Bates, the Company is obligated to provide benefits for 12 months following termination. For Mr. Shipley, the Company is obligated to pay his base salary for the remainder of his employment period as stated in his employment agreement as if he was still employed by the Company. For Mr. Bates, the Company is obligated to pay his base salary for 12 months following termination plus a prorated bonus amount, both paid as if he was still employed by the Company. For Mr. Fiedelman, the Company does not have any continuing obligation. Voluntary Termination. The NEO may terminate his employment voluntarily, in which case the Company does not have any continuing obligation to the NEO. Change of Control. For Mr. Shipley, if his employment is terminated within 12 months after a change in control (as defined in his employment agreement), the Company is obligated to pay his base salary for 24 months following termination. For Mr. Bates and Mr. Fiedelman, if their employment is terminated within 24 months after a change in control (as defined in their employment agreements), the Company is obligated to pay their base salary for 12 months following termination in a lump sum payment. Mr. Bates and Mr. Fiedelman hold equity awards that are subject to accelerated vesting upon a change of control. The following table and footnotes present potential payments to each NEO as if the NEO’s employment had been terminated on December 31, 2024 involuntarily, without cause, and/or if a change in control had occurred on such date.
Potential Payments Upon Termination or Change of Control
| Name | Change of Control ($) | Involuntary Termination Without Cause ($) | | Duncan Bates | | | | Salary continuation | 300,000 | 300,000 | | Annual bonus | — | — | | Equity awards(1) | 433,223 | — | | Kenneth E. Shipley | | | | Salary continuation(2) | 100,000 | 45,835 | | Annual bonus | — | — | | Equity awards | — | — | | Jeffrey M. Fiedelman | | | | Salary continuation | 275,000 | — | | Annual bonus | — | — | | Equity awards(3) | 24,420 | — |
Potential Payments Upon Termination or Change of Control
Mr. Bates’ equity awards include unvested stock options that would vest upon a change of control. Stock option value is based on the difference between the Company’s closing stock price at December 31, 2024 and the exercise price. Mr. Bates did not receive any payments upon his resignation effective October 10, 2025, and the Company does not have any continuing obligation to Mr. Bates following his resignation. (2) Mr. Shipley has a one-year term of employment that automatically renews annually. The current employment period terminates in November 2025. (3) Mr. Fiedelman’s equity awards include unvested stock options that would vest upon a change of control. Stock option value is based on the difference between the Company’s closing stock price at December 31, 2024 and the exercise price. Mr. Fiedelman did not receive any payments upon his resignation effective October 10, 2025, and the Company does not have any continuing obligation to Mr. Fiedelman following his resignation.
Policies and Practices Related to the Grant of Certain Equity Awards
Policies and Practices Related to the Grant of Certain Equity Awards We grant a variety of equity awards, including: • Stock Options: Incentive stock options and non-qualified stock options with exercise prices at or above fair market value on the grant date. • Restricted Stock Units (“RSUs”): Units representing the right to receive shares of common stock upon vesting. • Performance-Based Awards: Equity awards that vest based on achievement of specified performance goals. Although we do not have a formal policy with respect to the timing of our equity award grants, the Compensation Committee has generally granted equity awards pursuant to the terms of the applicable equity incentive plan and associated award agreements. Generally, grants to executive officers and employees occur on a set schedule, such as at the annual meeting of the Board or Compensation Committee, upon commencement of employment or in other special circumstances. Neither the Board nor the Compensation Committee takes material nonpublic information into account when determining the timing or terms of equity awards, including with respect to options, nor do we time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. The exercise price for stock options is set at or above the fair market value of our Common Stock on the date of grant, as determined by the closing price on our principal stock exchange. Our Compensation Committee reviews and proposes equity awards for executive officers and directors, considering individual performance, competitive market practices, and alignment with company goals. Said proposals are then forwarded to the Board for approval. For non-executive employees, Qualified Stock Option awards are typically administered by the Chief Executive Officer, consistent with established guidelines. Equity awards generally vest over a multi-year period, typically five years, subject to continued service. Certain awards may vest based on performance criteria. Unvested awards are forfeited upon termination of employment or service, except as otherwise provided in award agreements or severance arrangements. The Board or Compensation Committee may adjust awards as necessary to reflect corporate events such as stock splits, recapitalizations, or mergers. The Company generally prohibits repricing of stock options without shareholder approval. In alignment with corporate governance best practices, equity awards are subject to clawback or recoupment in the event of material financial restatements or violations of company policies, as determined by the Board. During the last completed fiscal year, we did not make any stock option awards to our NEOs during the period beginning on the four-business day before the filing of any Form 10-K, 10-Q or 8-K and ending one business day after the filing of such report that contained material nonpublic information (as defined in Item 402(x) of Regulation S-K). Accordingly, no tabular disclosure under Item 402(x)(2)(ii) of Regulation S-K is required.
CEO Pay Ratio Disclosure
CEO Pay Ratio Disclosure In accordance with Section 953(b) of the Dodd-Frank Act, and Item 402(u) of Regulation S-K, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee. In determining the median compensated employee, SEC rules allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions reflecting their unique employee populations. Therefore, our reported pay ratio may not be comparable to that reported by other companies due to differences in industry, business models and scale, as well as the different estimates, assumptions, and methodologies applied by other companies in calculating their respective pay ratios. Excluding our CEO, we identified our median employee by preparing a list of all 594 individuals employed by the Company as of December 31, 2024, and examined the total compensation paid to each such individual as reflected in the Company’s payroll records. We included all employees (other than our CEO), whether employed on a full-time, part-time, seasonal or temporary basis. We annualized compensation for any permanent employees who were not employed by us for all of 2024. The 2024 annual total compensation of our CEO was $400,000. The 2024 annual total compensation of our median employee was $32,240, and the ratio of these amounts is approximately 12:1.
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain measures of financial performance of the Company. The following table provides information regarding Compensation Actually Paid (“CAP”) to our Principal Executive Officer (“PEO”) and non-PEO NEOs during the last three fiscal years.
Pay Versus Performance
| Year | Summary Compensation Table Total for Duncan Bates ($)(1) | Compensation Actually Paid to Duncan Bates ($)(2) | Summary Compensation Table Total for Kenneth E. Shipley ($)(3) | Compensation Actually Paid to Kenneth E. Shipley ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(4) | Average Compensation Actually Paid to Non-PEO NEOs ($)(5) | Value of Initial Fixed $100 Investment Based On: Total Shareholder Return ($)(6) | Net Income (in thousands) ($)(7) | | 2024 | 400,000 | (1,155,827) | — | — | 176,779 | 279,416 | 93.24 | 61,642 | | 2023 | 400,000 | 587,176 | — | — | 219,171 | 26,046 | 95.28 | 54,460 | | 2022 | 5,032,412 | 8,751,772 | 50,000 | 50,000 | 1,626,155 | 1,711,072 | 71.63 | 67,773 |
Pay Versus Performance
During part of fiscal year 2022 and for the full fiscal years of 2023 and 2024, Duncan Bates served as our PEO. (2) The dollar amounts reported in this column represent the amount of “compensation actually paid” to Messrs. Bates and Shipley as computed in accordance with Item 402(v) of Regulation S-K. The amounts do not reflect the actual amount of compensation earned by or paid to Messrs. Bates and Shipley during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments reflected in this table were made to Mr. Bates’ total compensation for 2024 to determine the compensation actually paid: Adjustments to the Summary Compensation Table Total to arrive at CAP for our PEO are shown below. No adjustments were necessary for defined benefit and pension plans or dividends. The assumptions used for determining the fair values shown in this table are consistent with those used to determine the fair values disclosed as of the grant date of such awards.
Pay Versus Performance
| Year | Summary Compensation Table Total ($) | Less: Grant Date Fair Value of Equity Awards Granted in Fiscal Year ($) | Plus: Fair Value of Outstanding Unvested Equity at Fiscal Year End (Current Year Awards) ($) | Plus: Change in Fair Value of Outstanding and Unvested Equity Granted in Prior Fiscal Years ($) | Plus: Fair Value at Vesting of Equity Awards Granted in Fiscal Year that Vested During Fiscal Year ($) | Plus: Change in Fair Value as of Vesting Date of Equity Granted in Prior Fiscal Years for which Applicable Vesting Conditions were Satisfied During Fiscal Year ($) | Less: Fair Value As of Prior Fiscal Year-End of Equity Awards Granted in Prior Fiscal Years that Failed to Meet Applicable Vesting Conditions During Fiscal Year ($) | Compensation Actually Paid to PEO ($) | | 2024 | 400,000 | — | — | (1,565,986) | — | 10,159 | — | (1,155,827) |
Pay Versus Performance
(3) During part of fiscal year 2022, Kenneth E. Shipley served as our PEO. (4) During 2024, our Non-PEO NEOs were Kenneth E. Shipley and Jeffrey M. Fiedelman; during 2023, our Non-PEO NEOs were Curtis D. Hodgson, Kenneth E. Shipley, Jeffrey V. Burt, Ronald C. Arrington and Jeffrey M. Fiedelman; during 2022, our Non-PEO NEOs were Curtis D. Hodgson, Jeffrey V. Burt and Ronald C. Arrington. (5) The dollar amounts reported in this column represent the average amount of “compensation actually paid” to the Non-PEO NEOs as a group as identified in footnote 4 above, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average of compensation earned by or paid to these NEOs as a group during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the average total compensation for these NEOs as a group for 2024 to determine the compensation actually paid. Adjustments to the Summary Compensation Table Total to arrive at CAP for non-PEO NEOs (shown as an average) are presented below. No adjustments were necessary for defined benefit and pension plans or dividends.
Pay Versus Performance
| Year | Summary Compensation Table Total For Non-PEO NEOs ($) | Less: Grant Date Fair Value of Equity Awards Granted in Fiscal Year ($) | Plus: Fair Value of Outstanding Unvested Equity at Fiscal Year End (Current Year Awards) ($) | Plus: Change in Fair Value of Outstanding and Unvested Equity Granted in Prior Fiscal Years ($) | Plus: Fair Value at Vesting of Equity Awards Granted in Fiscal Year that Vested During Fiscal Year ($) | Plus: Change in Fair Value as of Vesting Date of Equity Granted in Prior Fiscal Years for which Applicable Vesting Conditions were Satisfied During Fiscal Year ($) | Less: Fair Value As of Prior Fiscal Year-End of Equity Awards Granted in Prior Fiscal Years that Failed to Meet Applicable Vesting Conditions During Fiscal Year ($) | Compensation Actually Paid to Non-PEO NEOs ($) | | 2024 | 176,779 | — | 134,096 | — | — | — | (31.459) | 279,416 |
Pay Versus Performance
Cumulative total shareholder return is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the share price at the end and the beginning of the measurement period by the share price at the beginning of the measurement period. For purposes of these amounts, the beginning of the measurement period is December 31, 2022. (7) The dollar amounts reported represent the amount of net income reflected in our Company’s audited financial statements for the applicable year.
Relationships Between Certain Data in the Pay Versus Performance Table
Relationships Between Certain Data in the Pay Versus Performance Table The graph below illustrates the relationship between CAP and cumulative total shareholder return. The cumulative total shareholder return assumes $100 was invested for the period starting December 31, 2021 through the end of the listed fiscal year. The graph shows CAP for both PEOs, Duncan Bates and Kenneth Shipley. The graph below illustrates the relationship between CAP and net income. The graph shows CAP for both PEOs, Duncan Bates and Kenneth E. Shipley. We structure our executive compensation program to award compensation based on individual and Company performance, to be competitive in the market and to retain our executives.
2018 Incentive Compensation Plan
2018 Incentive Compensation Plan Our Board and the holders of a majority of our outstanding shares of common stock adopted our 2018 Incentive Compensation Plan (the “Plan”) prior to the closing of our IPO. The purpose of our Plan is to assist us in attracting, motivating, retaining and rewarding high quality executives and other employees, officers, directors, consultants and other persons who provide services to us. Administration. Our Plan is to be administered by our Compensation Committee, provided, however, that except as otherwise expressly provided in the Plan, the Board may exercise any power or authority granted to the committee under our Plan. Subject to the terms of our Plan, the committee is authorized to select eligible persons to receive awards, determine the type, number and other terms and conditions of, and all other matters relating to, awards, prescribe award agreements (which need not be identical for each participant), and the rules and regulations for the administration of the Plan, construe and interpret the Plan and award agreements, and correct defects, supply omissions or reconcile inconsistencies in them, and make all other decisions and determinations as the committee may deem necessary or advisable for the administration of our Plan. Eligibility. The persons eligible to receive awards under our Plan are the officers, directors, employees, consultants and other persons who provide services to us. An employee on leave of absence may be considered as still in the employ of our company for purposes of eligibility for participation in our Plan. Types of Awards. Our Plan provides for the issuance of stock options, stock appreciation rights, or SARs, restricted stock, deferred stock, dividend equivalents, bonus stock and awards in lieu of cash compensation, other stock-based awards and performance awards. Performance awards may be based on the achievement of specified business or personal criteria or goals, as determined by the committee. Shares Available for Awards. The total number of shares of common stock that may be subject to the granting of awards under our Plan at any time during the term of the Plan will be equal to 2,500,000 shares. This limit will be increased by the number of shares with respect to which awards previously granted under our Plan that are forfeited, expire or otherwise terminate without issuance of shares, or that are settled for cash or otherwise do not result in the issuance of shares, and the number of shares that are tendered (either actually or by attestation) or withheld upon exercise of an award to pay the exercise price or any tax withholding requirements. Stock Options and Stock Appreciation Rights. The committee is authorized to grant stock options, including both incentive stock options, or ISOs, which can result in potentially favorable tax treatment to the participant, and non-qualified stock options, and stock appreciation rights entitling the participant to receive the amount by which the fair market value of a share of common stock on the date of exercise exceeds the grant price of the stock appreciation right. The exercise price per share subject to an option and the grant price of a stock appreciation right are determined by the committee, but in the case of an ISO must not be less than the fair market value of a share of common stock on the date of grant. For purposes of our Plan, the term “fair market value” means the fair market value of common stock, awards or other property as determined by the committee or under procedures established by the committee. The maximum term of each option or stock appreciation right, the times at which each option or stock appreciation right will be exercisable, and provisions requiring forfeiture of unexercised options or stock appreciation rights at or following termination of employment generally are fixed by the committee, except that no option or stock appreciation right may have a term exceeding ten years. Restricted and Deferred Stock. The committee is authorized to grant restricted stock and deferred stock. Restricted stock is a grant of shares of common stock which may not be sold or disposed of, and which may be forfeited in the event of certain terminations of employment, prior to the end of a restricted period specified by the committee. A participant granted restricted stock generally has all of the rights of a stockholder of our company, unless otherwise determined by the committee. An award of deferred stock confers upon a participant the right to receive shares of common stock at the end of a specified deferral period, subject to possible forfeiture of the award in the event of certain terminations of employment prior to the end of a specified restricted period. Prior to settlement, an award of deferred stock carries no voting or dividend rights or other rights associated with share ownership, although dividend equivalents may be granted, as discussed below. Other Terms of Awards. Awards may be settled in the form of cash, shares of common stock, other awards or other property, in the discretion of the committee. The committee may require or permit participants to defer the settlement of all or part of an award in accordance with such terms and conditions as the committee may establish, including payment or crediting of interest or dividend equivalents on deferred amounts, and the crediting of earnings, gains and losses based on deemed investment of deferred amounts in specified investment vehicles. The committee is authorized to place cash, shares of common stock or other property in trusts or make other arrangements to provide for payment of our obligations under our Plan. Awards under our Plan are generally granted without a requirement that the participant pay consideration in the form of cash or property for the grant (as distinguished from the exercise), except to the extent required by law. The committee may, however, grant awards in exchange for other awards under our Plan, awards under other company plans or other rights to payment from us, and may grant awards in addition to and in tandem with such other awards, rights or other awards. Acceleration of Vesting; Change in Control. The committee may, in its discretion, accelerate the exercisability, the lapsing of restrictions or the expiration of deferral or vesting periods of any award, and such accelerated exercisability, lapse, expiration and if so provided in the award agreement or otherwise determined by the committee, vesting will occur automatically in the case of a “change in control” of our company, as defined in our Plan (including the cash settlement of stock appreciation rights which may be exercisable in the event of a change in control). In addition, the committee may provide in an award agreement that the performance goals relating to any performance award will be deemed to have been met upon the occurrence of any “change in control.”
Director Compensation
Director Compensation Directors who are also officers or employees of the Company do not receive any special or additional remuneration for service on the board. We currently compensate each non-employee director through annual restricted stock grants and by paying annual fees for their participation on the board and on respective board committees. Our directors receive compensation of $10,000 per quarter, as well as an annual award of $10,000 in restricted stock grants that vest as of the next annual meeting or in one year. We also compensate our directors for serving as a committee member and a committee chair. Our Board reviews director compensation annually or when circumstances exist requiring reexamination and adjusts it according to then current market conditions and good business practices. The following table provides information regarding compensation paid to each non-employee director during the year ended December 31, 2024:
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | Non-equity incentive plan compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | | Jeffrey K. Stouder | 57,000 | 10,000 | — | — | — | — | 67,000 | | Brian J. Ferguson | 52,000 | 10,000 | — | — | — | — | 62,000 | | Francisco J. Coll(2) | 10,000 | — | — | — | — | — | 10,000 | | Skyler M. Howton(2) | 10,000 | 10,000 | — | — | — | — | 20,000 |
Director Compensation
(1) Amounts in this column reflect the fair value of restricted stock based on the closing price of the Company’s stock on the grant date. Mr. Coll resigned in May 2024, and he was replaced by Ms. Howton in December 2024.