DEF 14A of Allient Inc
Filed Apr 1, 2024 · FY20230001140361-24-016876
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
| Pay Versus Performance Disclosure | 28 | | Potential Payments upon Termination or Change in Control | 32 | | CERTAIN TRANSACTIONS AND RELATIONSHIPS | 35 | | OWNERSHIP OF COMPANY STOCK | 36 | | Security Ownership of Certain Beneficial Owners | 36 | | Security Ownership of Management and Directors | 36 | | Delinquent Section 16(a) Reports | 37 | | AUDIT COMMITTEE MATTERS | 38 | | Audit Committee Report | 38 | | Policy for Pre-Approval of Audit and Permitted Non-Audit Services | 39 | | Auditor Fees and Services | 39 | | OTHER MATTERS | 39 | | SHAREHOLDER PROPOSALS FOR THE 2025 ANNUAL MEETING | 39 | | Proposals for the Company’s Proxy Material | 39 | | Proposals to be Introduced at the Annual Meeting but not Intended to be Included in the Company’s Proxy Material | 39 | | Compliance with Universal Proxy Rules for Director Nominations | 40 |
Director Qualifications and Biographical Information
Director Qualifications and Biographical Information The biography of each director nominee below contains information regarding that person’s principal occupation, positions held with the Company, service as a director, business experience, other director positions currently held or held at any time during the past five years, involvement in certain legal or administrative proceeding, if applicable, and the experiences, qualifications, attributes or skills that caused our Governance and Nominating Committee to conclude that the person should serve as a member of our Board of Directors.
Director Qualifications and Biographical Information
| Robert B. Engel Age: 70 Director Since:2019. | Mr. Engel serves as Chief Executive Officer and Managing Director of BLT Advisory Services, LLC, a boutique advisory firm he formed in 2017 which provides guidance for business transformation, mergers and acquisitions, brand building and governance, as well as leadership development. Prior to BLT Advisory Services, Mr. Engel was in the banking industry for more than 30 years, including 17 years at CoBank, ACB in Denver, Colorado, serving first as President and Chief Operating Officer and subsequently being named President and Chief Executive Officer, responsible for leading the bank’s domestic and global businesses. Prior to this, Mr. Engel was with HSBC Bank USA in Buffalo, New York for 14 years, where he served in positions of increasing responsibility, ultimately becoming the Chief Banking Officer. Prior to moving to the banking industry, Mr. Engel began his public accounting career with Deloitte & Touche, and then KPMG, rising to the position of Senior Audit Manager. Mr. Engel is currently the Chairman of the Board at Alaska Power & Telephone, where he serves on the Audit Committee and as Chairman of the Compensation Committee, and Heartland Financial USA, Inc. (HTLF) where he serves on the Audit Committee and as Chairman of the Risk Committee. Mr. Engel is a recipient of the Ellis Island Medal of Honor. His experience in board and executive leadership, strategic planning, capital markets, risk management, international operations, mergers and acquisitions, and corporate governance matters gives him strong insight into the issues facing our company’s businesses and markets. |
Director Qualifications and Biographical Information
| Richard D. Federico Age: 69 Director Since: 2012 | Mr. Federico has over forty-three years of operational, strategy and investment experience and has served as Lead Director for the past eight years. Since March 2016 Mr. Federico has been the Chairman and CEO of MicroSonic Solutions LLC, a science and technology company. In addition, from November 2012 he has been the Founder and Chairman at Cetan Partners, an investment and advisory firm. From June 2014 to April 2016 he was a Partner and later a Senior Advisor at TZP Group, a leading mid-market private equity firm, where he led the growth advisory practice. He spent the prior ten years as a Senior Advisor and Managing Director in private equity with Sterling Partners, where he served as an investment partner and additionally worked with Sterling’s portfolio investments to build, capture and maximize best-in-class practices across the firm and instituted effective governance at the portfolio level. His background also includes senior management positions with companies including Thermo Fisher, The Millard Fillmore Health System, The Science Kit Group and KPMG. He currently is and has been involved with numerous private and non-profit boards. His risk management, operational, financial, technology, cyber security, environmental security and investment experience, knowledge of capital markets and experience on other public and private company boards prepare him to give the Board his views on strategic, operational, financial, advanced technology and environmental related matters. |
Director Qualifications and Biographical Information
| 4 | | Allient Inc. | 2024 Proxy Statement |
Director Qualifications and Biographical Information
| Steven C. Finch Age: 66 Director Since: 2021 | Mr. Finch retired as President of Manufacturing and Community Engagement at Viridi Parente, Inc., a developer and manufacturer of environmentally conscious energy usage and storage products, including battery powered energy delivery systems for heavy equipment, and energy storage and power management systems. He is the former Plant Manager of the General Motors (“GM”) Tonawanda Engine Plant, one of Western New York’s largest manufacturers with approximately 1,600 employees. Mr. Finch began his 41-year career with GM in 1976 and he held several assignments with increasing responsibility at various GM facilities outside Buffalo before becoming Tonawanda Engine Plant Manager in 2007. He was a previous board member and Senior Vice President of the Automobile Association of America Western and Central New York. He is currently an independent director at National Fuel Gas Company, where he serves on the Audit Committee and Nominating/Corporate Governance Committee. Through his extensive career, Mr. Finch developed expansive and diverse experience in manufacturing and customer relations, as well as in capital and labor management. His experience in senior level oversight during periods of significant industry challenge and disruption provides an important perspective on organizational transformation and the management of regulatory and economic change. |
Director Qualifications and Biographical Information
| Nicole R. Tzetzo Age: 50 Director Since: 2021 | Ms. Tzetzo serves as Chief Financial Officer of Tzetzo Companies LLC, a residential and commercial real estate company with primary focus in senior care facilities. From 2016 to 2018 she served as the first Vice President of Finance and Administration at the Ralph C. Wilson, Jr. Foundation, a billion-dollar foundation, where she was responsible for all of the Foundation’s legal and financial operations. Ms. Tzetzo’s career as a tax attorney included partner roles at Hodgson Russ, LLP (2019 to March 2021) and Jaeckle Fleischmann & Mugel, LLP (2006 to 2016), where she represented numerous for-profit and not-for-profit clients on general tax and business matters. She currently is and has been involved with numerous private and non-profit boards. Ms. Tzetzo has served in management and leadership roles throughout her legal career. Her significant business and legal experience make her highly qualified to serve as a director. |
Director Qualifications and Biographical Information
| Allient Inc. | 2024 Proxy Statement | | 5 |
Director Qualifications and Biographical Information
| Richard S. Warzala Age: 70 Director Since: 2006 | Mr. Warzala has a strong management and technical background in the motion control industry and has served as Chairman of the Board since February 2014. Mr. Warzala joined Allient as President and Chief Operating Officer in May 2002 and was appointed President and Chief Executive Officer in May 2009. Prior to joining Allient, Mr. Warzala was President of the Motion Components Group of Danaher Corporation and held various positions at American Precision Industries Inc., including Corporate Vice President and President of its API Motion Division. Pursuant to his employment agreement, as long as Mr. Warzala is Chief Executive Officer and is willing to serve, the Board of Directors will nominate him for election to the Board. His leadership experience and Company and industry knowledge, with 40 years of motion experience, provides valuable insight to the Board of Directors in formulating and executing the Company’s strategy. Mr. Warzala has been on the Board of Directors of Astronova, Inc. since December 2017 where he serves as the Lead Director and Chair of the Compensation Committee. |
Director Qualifications and Biographical Information
| Michael R. Winter Age: 70 Director Since: 2014 | Mr. Winter is a former partner in the Buffalo, New York office of PricewaterhouseCoopers LLP (“PwC”), serving in that role from 1987 until his retirement in June 2014. During his tenure, Mr. Winter was responsible for leading the delivery of assurance services to public entities with experience serving many sectors including Consumer and Industrial Products Manufacturing, Energy and Healthcare. Since 2010 Mr. Winter was also a member of the PwC National Office based in New Jersey, which serves as support for all PwC U.S. practice offices. Mr. Winter served on the Board of Directors of Gas Natural, Inc. (EGAS) from October 2014 through its sale in August 2017. In 2023, Mr. Winter was appointed to the Catholic Health System (CHS) Board of Directors. CHS is a regional provider of healthcare services in Western New York. Mr. Winter serves on the Finance and Operations Committee and the Strategic Planning Committee. Mr. Winter’s accounting and business expertise, including an in-depth understanding of the preparation and analysis of financial statements, makes him highly qualified to serve as a director. |
Director Qualifications and Biographical Information
| 6 | | Allient Inc. | 2024 Proxy Statement |
Proposal 1 – Election of Directors
Proposal 1 – Election of Directors Our Articles of Incorporation and Bylaws provide for a Board consisting of not less than three and not more than nine persons, as such number is determined by the Board of Directors, all of whom will be elected annually to serve until the next annual meeting of shareholders and until their successors are elected and qualified, or until the Director resigns or is otherwise removed. Our Board of Directors currently has seven members: Robert B. Engel, Richard D. Federico, Steven C. Finch, James J. Tanous, Nicole R. Tzetzo, Richard S. Warzala and Michael R. Winter. Mr. Tanous is not standing for re-election after his current term expires immediately prior to the Annual Meeting. The other incumbent directors are standing for re-election. All six positions on the Board are to be filled by vote of the shareholders at the Annual Meeting. The affirmative vote of a majority of the votes cast by the shareholders at the Annual Meeting is required for the election of directors. Unless instructed otherwise, it is intended that the shares represented by proxy at the Annual Meeting will be voted in favor of the six nominees named above, each of whom was nominated by the Board based on the recommendation of our Governance and Nominating Committee. All nominees have agreed to serve if elected. If, at the time of the Annual Meeting, any nominee is unable or declines to serve, the discretionary authority provided in the proxy may be exercised to vote for a substitute or substitutes. The Board of Directors has no reason to believe that any substitute nominee or nominees will be required. Information regarding the director nominees can be found under “Corporate Governance and Board Matters – Director Qualifications and Biographical Information.” THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES.
Compensation Philosophy and Objectives
| What We Do | | What We Don’t Do | | | | Balance of short-term and long-term incentives. Our incentive programs provide an appropriate balance of annual and long-term incentives. | | No use of non-performance based pay other than base salary and limited perquisites and other benefits. | | | Stock Ownership Guidelines. The Company has stock ownership guidelines for Named Executive Officers. The President and CEO must have ownership of at least five times base salary, and the CFO and Group Presidents at least three times base salary. Each subject individual must meet or exceed his or her requisite threshold immediately prior to any disposition of shares obtained through an equity grant, other than shares used to pay applicable withholding taxes. | | | | | Include recoupment and other forfeiture provisions in our annual incentive programs and equity-award provisions. Our annual incentive program and equity-based compensation agreements contain certain recoupment, non-compete, and other forfeiture provisions that will allow the Company to cancel all or any outstanding portion of equity awards and recover the payouts under the annual incentive program, gross value of any vested restricted shares, or profits from exercises of options. | | | | | Utilize an independent compensation consulting firm. The Compensation Committee benefits from its use of an independent compensation consulting firm, which provides minimal other services to the Company. | | |
Compensation Program and Design
| Compensation Elements | Base Salary | Annual Cash Incentive | Equity Programs | | | | | | | Time-Based Awards | Performance Share Plan | Executive Stock Incentive Plan | | Compensation Mix | Fixed | Variable | Fixed | Variable | | | Recipients | Named Executive Officers | | All Named Executive Officers for time-based awards, all U.S. based Named Executive Officers for Performance Share Plan and Executive Stock Incentive Plan. | | | | When Granted | Review Annually | Annually | | | | | Form of Delivery | Cash | | Equity | | | | Type of Performance | Short Term | | Long Term | | | | Performance Period | Ongoing | 1-Year | Stock vests over 3 years | Annual performance, stock vests over 3 years | Ongoing performance, stock vests over 2 years after goal achieved | | Vesting | Immediate | 1-Year | 3-Years | 3-Years | Over 2 years after goal achieved | | How Payout is Determined | Compensation Committee Recommends to Board | Quantitative based on performance against goals | Formula Based (Percentage of Salary) | Annual Performance | Multi-Year Performance | | Performance Metrics | Performance Assessment | EVA / EBITDA | NA | EBITDA | Revenue Growth |
Setting Executive Compensation
Setting Executive Compensation The Compensation Committee of the Board, which is comprised of independent directors, is charged with oversight of the Company’s philosophy, policies and practices regarding annual and incentive compensation plans, equity-based plans and other compensation plans. The Compensation Committee operates under a written charter adopted by the Board, a copy of which is available on the Company’s website at www.allient.com/investors/corporate-governance/. The Compensation Committee ensures that the total compensation of the Company’s Named Executive Officers and other key management is fair, reasonable and competitive. The Compensation Committee annually evaluates the performance of the Company’s Chief Executive Officer based upon a mix of the achievement of corporate goals and individual performance and makes decisions concerning compensation and benefits for the Chief Executive Officer and, in consultation with the Chief Executive Officer, for the other Named Executive Officers and other key management. The Compensation Committee recommends annual base compensation and incentive compensation targets to the Board, and it also has the authority to make equity awards under the Company’s 2017 Omnibus Incentive Plan and reviews the attainment of annual goals for incentive compensation. The Compensation Committee meets with Mr. Warzala, the Company’s Chief Executive Officer and President, to obtain his recommendations with respect to other Named Executive Officers and key management compensation programs and practices, base salaries, incentive plan targets and equity awards. The Compensation Committee considers but is not bound to accept such recommendations. The Compensation Committee discusses Mr. Warzala’s compensation with him but makes decisions regarding his recommended compensation without him present. The Compensation Committee has authorized Mr. Warzala to make salary adjustments for all employees other than Named Executive Officers and other key management. Additionally, the Compensation Committee has from time to time delegated to Mr. Warzala the authority to grant restricted stock awards to employees other than Named Executive Officers or key management in limited annual amounts. Such awards made by Mr. Warzala are generally intended to be used for employee recruiting, employee retention and promotion purposes. The one exception to these authorities is that the Compensation Committee retains approval authority for all salary adjustments and grants of restricted stock for Stephen Warzala, who was employed by the Company as Director of Business Development in 2023 and, is the son of Mr. Warzala. Under the direction of the Compensation Committee, the Company has retained the Burke Group, an independent compensation consultant, to prepare a study that provided input on trends in executive compensation and an outside perspective on the Company’s executive compensation philosophy, programs and practices, while periodically assisting with the Compensation Committee’s peer group benchmarking analysis. The Compensation Committee has the sole authority to retain and terminate the compensation consultant and to approve the compensation consultant’s fees and all other terms of the engagement. The Compensation Committee exercised this authority to engage the Burke Group. The Compensation Committee regularly reviews the independence of, and services provided by its outside consultants and has concluded that the Burke Group is independent in providing executive compensation consulting services. The Compensation Committee reviews its relationship with the Burke Group at least annually and in 2023 determined that the Burke Group’s work for the Compensation Committee did not raise any conflicts of interest, consistent with the guidance provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC and the Nasdaq Global Market. Burke Group does provide actuarial services on behalf of the Company for a defined benefit pension at Motor Products – Owosso. In 2023, the total fees for these services were approximately $34,000 and were taken into account by the Compensation Committee in making its independence determination. The Company made no material changes to its compensation program for Named Executive Officers for 2024.
Peer Group Analysis
Peer Group Analysis In 2023, the Compensation Committee relied on a Peer Group Analysis prepared by the Burke Group to evaluate compensation levels for Named Executive Officers. The Peer Group recommended by the Burke Group and used by the Compensation Committee is based on similarly sized manufacturing companies. The Burke Group analyzed competitive total direct compensation at the Peer Companies, as disclosed in their proxy statements for prior years. The Compensation Committee periodically evaluates the appropriateness of the Peer Group (based on merger and acquisition activity, growth, business focus, etc.). The members of the Peer Group for 2023 are as follows:
Peer Group Analysis
| AeroVironment Inc. Astronics Corporation Helios Technologies Inc. LSI Industries, Inc. | Onto Innovation Inc. Preformed Line Products Co. Proto Labs, Inc. Thermon Group Holdings, Inc. |
Elements of Compensation
| • | Annual Cash Incentive Compensation |
Elements of Compensation
| • | Equity Incentive Compensation |
Elements of Compensation
Base Compensation. Base compensation is comprised of the annual salary and is set at levels sufficient to attract and retain executives. In determining Mr. Warzala’s base compensation, the Compensation Committee considers market data, Mr. Warzala’s performance and the Company’s performance during the previous year as well as goals and objectives for the current year. In determining other base compensation levels, the Compensation Committee reviews and considers the evaluation and recommendation by Mr. Warzala of each Named Executive Officer’s and certain key manager’s performance during the prior year as well as responsibilities for the current year. During the review of base compensation, the Compensation Committee also considers the executive’s or manager’s qualifications and experience, scope of responsibilities and future potential, the goals and objectives established for the individual, his or her past performance and competitive compensation practices both internally and externally. Annual Cash Incentive Plan. The annual incentive plan is a pay-for-performance cash award plan generally available to all employees of the Company and aligns the interests of executives and employees with those of the Company’s shareholders. The plan promotes a culture of high performance and ownership by employees in which employees are rewarded for improving profitability, achieving operating efficiencies, reducing costs and efficiently employing capital. Awards under the plan are based on the actual Economic Value Added (EVA) achieved as compared against threshold and target EVA performance goals established for each year by the Board of Directors. EVA is net operating profit after taxes less a cost of capital charge. If the target EVA is achieved, then the target bonus is paid. If the actual EVA achieved falls between the threshold and the target EVA performance goals, the annual cash incentive plan award equals the target amount multiplied by the prorata percent of the EVA target achieved (0% to 100% of the target bonus amount). If the actual EVA achieved is greater than the target EVA performance goal, then the annual cash incentive plan award will be greater than 100% of the target amount with the total award being a prorata percent of the incremental EVA achieved above the target EVA. For 2023, the target incentives as a percentage of base salary were as follows:
Elements of Compensation
shares for Mr. Leach (22.5% of annual salary), 892 shares for Mr. Bendre (7.5% of annual salary), 970 shares for Mr. May (10% of annual salary), and 2,079 shares for Mr. Maida (22.5% of annual salary). Mr. Pirthauer did not participate in the PSP in 2023. The PSP awards are each in the form of restricted stock. All shares granted under the PSP to Named Executive Officers for 2023 were earned. (iii) Executive Stock Incentive Plan (formerly LTIP). The Executive Stock Incentive Plan (“XSIP”) is a multi-year pay-for-performance incentive program. The Company has had an LTIP since 2013 and has been extended from time to time as performance goals were achieved. Beginning in 2022, the Compensation Committee established a new LTIP and later renamed it XSIP. XSIP expanded the list of eligible participants thereunder to improve retention and better align the interests of a larger group of key executives with shareholders. The 2023 annual target XSIP for each of the Company’s Named Executive Officers is a percentage of their base compensation. Awards under the XSIP continue to be based upon the achievement of total Company revenue growth, however, the awards for certain participants will be based, in whole or in part, on revenue growth at a specific unit level. The Committee established revenue targets under the XSIP for both the Company, on a consolidated basis, and for specific units. Awards for the Company’s Chief Executive Officer, Chief Financial Officer and Chief Technology Officer and a portion of the award for the President, Allient Innovum Group, will be paid at target if the Company’s revenue, on a consolidated basis, increase by 33.3% over the three-year period ending December 31, 2024. For 2023, the target for the Allient Innovum Group and Allient Orion Group have been set at a cumulative revenue increase of 22.5% over the same period. The XSIP performance criteria will be measured after the end of each year of the performance period and the number of shares that will be granted with respect to a performance period will be calculated based on the Company stock price (closing price) as measured at the beginning of the applicable performance period. When calculating the increase in revenue, the Company will make appropriate adjustments to account for any acquired revenue for which an XSIP award has previously been made. The restricted stock awards will vest over a two-year period after the year of the performance period. If the recipient’s employment with the Company is terminated due to cause or voluntary resignation, any unvested XSIP shares will be forfeited. All U.S. based Named Executive Officers participate in the XSIP. The following are the awards earned under the XSIP as a result of partial attainment of the XSIP revenue goals during 2023:
Director Compensation in 2023
Director Compensation in 2023 Under the Company’s director compensation program, which was amended and restated on May 3, 2023, each non-employee director receives an annual cash retainer of $66,000. The chairperson of the Audit Committee receives an additional $19,000 annual cash retainer and other members of the Audit Committee receive an additional annual cash retainer in the amount of $10,000. The Chairperson of the Compensation Committee receives an additional $14,500 annual cash retainer and other members of the Compensation committee will receive an additional annual cash retainer in the amount of $7,500. The Chairperson of the Governance and Nominating Committee receives an additional $12,600 annual cash retainer and other members of the Governance and Nominating Committee will receive an annual cash retainer of $6,500. The Lead Director receives an additional $32,400 annual cash retainer. All cash retainers are payable ratably on a quarterly basis in arrears. Additionally, each non-employee director is reimbursed for his or her expenses in connection with attendance at each meeting. Non-employee directors also receive an annual award of restricted stock under the 2017 Omnibus Incentive Plan. The annual award consists of shares of the Company’s common stock with a value of $82,500 as of the date of election. Directors who are appointed to the Board outside of the annual meeting of shareholders receive a pro rata amount of the annual award. These restricted shares will vest over a twelve-month period upon the performance of future service as a director, subject to certain exceptions. The following table shows the compensation paid by the Company to each non-employee director for 2023.
Director Compensation in 2023
| Current Directors | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | | Robert B. Engel | $80,300 | $79,741 | $160,041 | | Richard D. Federico | $116,550 | $79,741 | $196,291 | | Steven C. Finch | $76,100 | $79,741 | $155,841 | | James J. Tanous | $86,000 | $79,741 | $165,741 | | Nicole R. Tzetzo | $77,500 | $79,741 | $157,241 | | Michael R. Winter | $88,000 | $79,741 | $167,741 |
Director Compensation in 2023
| (1) Represents the total grant date fair value of the annual retainer share awards on the date of the award as reported on the Nasdaq Global Market on the date of grant, which is the first business day following the effective date of the election. The annual retainer share awards vest in four equal quarterly installments on the first business day of each of June, September, December and April that occurs during the 12-month period after the date of grant. 2,302 restricted shares were granted to each non-employee director on May 4, 2023 and 575 shares were unvested at December 31, 2023. |
Employment Agreements and Related Arrangements
Employment Agreements and Related Arrangements We are a party to the following employment agreements with our Named Executive Officers:
Employment Agreements and Related Arrangements
| • | Richard S. Warzala. Pursuant to an employment agreement whereby Richard S. Warzala serves as President and Chief Executive Officer, Mr. Warzala is entitled to an annual base salary of not less than |
Employment Agreements and Related Arrangements
$707,200 effective March 1, 2024.
Employment Agreements and Related Arrangements
| • | Michael R. Leach. Pursuant to an employment agreement whereby Michael R. Leach serves as Senior Vice President and Chief Financial Officer, Mr. Leach is entitled to an annual base salary of not less than $385,000 effective March 1, 2024. |
Employment Agreements and Related Arrangements
| • | Ashish R Bendre. Pursuant to an employment agreement whereby Ashish R. Bendre serves as Vice President and President of Allient Orion Group, Mr. Bendre is entitled to an annual base salary of not less than $378,000 effective March 1, 2024. |
Employment Agreements and Related Arrangements
| • | Helmut D. Pirthauer. Pursuant to an employment agreement whereby Helmut D. Pirthauer serves as Vice President and President of Allient Dynamos Group, Mr. Pirthauer is entitled to an annual base salary of not less than €325,000 effective March 1, 2024. |
Employment Agreements and Related Arrangements
| • | Kenneth A. May. Pursuant to an employment agreement whereby Kenneth A. May serves as Vice President and Chief Technology Officer, Mr. May is entitled to an annual base salary of not less than $242,000 effective March 1, 2024. |
Employment Agreements and Related Arrangements
Robert P. Maida retired from his position as Senior Vice President and President of Allient Innovum Group effective September 30, 2023. Mr. Maida is currently an independent contractor to the Company. Unless terminated earlier in accordance with its terms, Mr. Warzala’s employment agreement will remain effective until January 2, 2025. Pursuant to the employment agreements with each of Messrs. Leach, and Bendre each executive serves for a term ending on December 31, 2024, which is automatically extended for additional one-year periods unless either party gives notice of nonrenewal 180 days in advance of the annual renewal date. As previously disclosed, Mr. Leach will retire
Employment Agreements and Related Arrangements
| 22 | | Allient Inc. | 2024 Proxy Statement |
Employment Agreements and Related Arrangements
from the Company on April 30, 2024. Pursuant to Mr. Pirthauer’s employment agreement, either party may terminate the agreement as follows: (i) if notice is given between January 1 and June 30, the agreement will terminate at the end of the year and (ii) if notice is given between July 1 and December 31, the agreement will terminate at the end of the sixth full month after notice is given. Each of our Named Executive Officers is eligible to receive annual incentive bonuses as our Compensation Committee may determine based upon our results of operations and other relevant factors. Our Named Executive Officers also generally entitled to participate in our employee benefit plans. Under the employment agreements, each of our Named Executive Officers is entitled to receive fringe benefits in line with our present practice relating to the officer’s position, including the use of a Company automobile or a monthly automobile allowance. The Company utilizes stock based awards for short and long-term incentives. In making its determination regarding the grant of stock based awards, the Board considers, among other things, each Named Executive Officer’s responsibilities, efforts and performance in relation to the business plan and forecast, the relationship between the benefits of restricted stock and improving shareholder value, the development and performance of the Company’s products in the marketplace and an increase in the trading price per share of the Company’s common stock. The Board also considers customary business practices and short and long-term incentive plan benefits granted in comparison to such benefits provided to other executives in similar positions. Our Named Executive Officers have arrangements that provide for payments and other benefits if the Named Executive Officer’s employment terminates under certain circumstances. We believe that these payments and other benefits are important to recruiting and retaining our Named Executive Officers, as many of the companies with which we compete for executive talent provide for similar payments to their senior employees. Additional information regarding these payments and other benefits is found under the heading “Potential Payments upon Termination or Change in Control.”
Summary Compensation Table
Summary Compensation Table The following table presents information relating to total compensation of the Named Executive Officers for the fiscal years ended December 31, 2023, 2022 and 2021.
Summary Compensation Table
| Name and Principal Position | Year | Salary | Stock Awards(1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation(3) | Total | | Richard S. Warzala President and Chief Executive Officer | 2023 | $675,000 | $2,020,233 | $1,564,794 | $113,249 | $4,373,276 | | | 2022 | $639,417 | $2,688,389 | $1,236,550 | $98,785 | $4,663,141 | | | 2021 | $584,583 | $1,648,214 | $1,574,104 | $100,335 | $3,907,236 | | Michael R. Leach Senior Vice President and Chief Financial Officer | 2023 | $381,667 | $381,515 | $351,477 | $34,117 | $1,148,776 | | | 2022 | $362,817 | $401,182 | $280,656 | $33,173 | $1,077,828 | | | 2021 | $350,750 | $283,848 | $377,785 | $30,229 | $1,042,612 | | Ashish R. Bendre Vice President and Group President | 2023 | $378,000 | $88,277 | $94,010 | $51,206 | $611,493 | | | 2022 | $378,000 | $77,240 | $105,036 | $49,211 | $609,487 | | | 2021 | $378,000 | $74,401 | $104,997 | $48,457 | $605,855 | | Helmut D. Pirthauer(4) Vice President and Group President | 2023 | $351,517 | $69,027 | $139,657 | $11,681 | $571,882 | | | 2022 | $321,433 | $69,330 | $127,737 | $11,382 | $529,882 | | | 2021 | $331,388 | $67,887 | $156,290 | $12,782 | $568,347 | | Kenneth A. May Chief Technology Officer | 2023 | $222,487 | $141,234 | $92,207 | $22,724 | $478,652 | | Robert P. Maida Former Senior Vice President and Group President | 2023 | $289,617 | $307,909 | — | $31,665 | $629,191 | | | 2022 | $332,717 | $336,767 | $240,054 | $36,541 | $946,079 | | | 2021 | $320,250 | $246,222 | $303,754 | $29,680 | $899,906 |
Summary Compensation Table
| (1) The amounts in this column represent the total grant date fair value of stock awards on the date of the award as reported on the Nasdaq Global Market on the date of grant. The awards consist of restricted shares with performance and/or service based vesting conditions. |
Summary Compensation Table
| (2) The amounts in this column represent the awards earned under the Company’s Annual Cash Incentive Plan for the applicable fiscal year. |
Summary Compensation Table
| (3) The table below shows the components of this column for 2023. The amounts represent the amount paid by, or the incremental cost to, the Company. |
Summary Compensation Table
| Name | Group Life Insurance Premiums | Executive Life Insurance Premiums | Executive Disability Premiums | 401(k) Contribution | ESOP Contribution | Automobile Related Benefits | Cash Paid In-Lieu of Vacation | | Richard S. Warzala | $12,206 | $37,882 | — | $13,200 | $7,372 | $42,589 | — | | Michael R. Leach | $2,745 | — | — | $13,200 | $7,372 | $10,800 | — | | Ashish R. Bendre | $1,545 | — | $4,037 | $13,200 | $7,372 | $10,514 | $14,538 | | Helmut D. Pirthauer | — | — | — | — | — | $11,775 | — | | Kenneth A. May | $2,152 | — | — | $13,200 | $7,372 | — | — | | Robert P. Maida | $2,064 | $929 | — | $13,200 | $7,372 | $8,100 | — |
Summary Compensation Table
| (4) Mr. Pirthauer’s cash compensation was payable in Euros. For 2023, these Euro amounts have been converted into U.S. dollars at an exchange rate of 1.0903 U.S. dollars per Euro. |
Summary Compensation Table
| 24 | | Allient Inc. | 2024 Proxy Statement |
Grants of Plan-Based Awards in 2023
Grants of Plan-Based Awards in 2023 The following table summarizes the grants of plan-based awards to each of the Named Executive Officers during fiscal year 2023.
Grants of Plan-Based Awards in 2023
| Name | Grant Date | Estimated Possible Payouts Under Non- Equity Incentive Plan Awards | Estimated Possible Payouts Under Equity Incentive Plan Awards | | All Other Stock Awards (#) | Grant Date Fair Value of Stock Awards(5) | | | | Target($) | Target(#) | Maximum(#) | | | | Richard S. Warzala | | | | | | | | Cash Incentive Plan(1) | 03/07/23 | $843,750 | — | — | — | — | | Time-Based Awards(2) | 03/07/23 | | — | — | 12,029 | $510,030 | | PSP(3) | 03/07/23 | | 6,015 | 12,029 | — | $510,030 | | XSIP(4) | 03/07/23 | — | | 23,589 | | $1,000,174 | | Michael R. Leach | | | | | | | | Cash Incentive Plan(1) | 03/07/23 | $189,800 | — | — | — | — | | Time-Based Awards(2) | 03/07/23 | | — | — | 2,271 | $96,290 | | PSP(3) | 03/07/23 | | 1,136 | 2,271 | — | $96,290 | | XSIP(4) | 03/07/23 | — | | 4,456 | | $188,934 | | Ashish R. Bendre | | | | | | | | Cash Incentive Plan(1) | 03/07/23 | $61,150 | — | — | — | — | | Time-Based Awards(2) | 03/07/23 | | — | — | 892 | $37,821 | | PSP(3) | 03/07/23 | | 446 | 892 | — | $37,821 | | XSIP(4) | 03/07/23 | — | | 298 | | $12,635 | | Helmut D. Pirthauer | | | | | | | | Cash Incentive Plan(1) | 03/07/23 | $124,022 | — | — | — | — | | Time-Based Awards(2) | 03/07/23 | | — | — | 1,628 | $69,027 | | Kenneth A. May | | | | | | | | Cash Incentive Plan(1) | 03/07/23 | $44,497 | — | — | — | $44,497 | | Time-Based Awards(2) | 03/07/23 | | — | — | 970 | $41,128 | | PSP(3) | 03/07/23 | | 485 | 970 | — | $41,128 | | XSIP(4) | 03/07/23 | — | | 1,391 | | $58,978 | | Robert P. Maida | | | | | | | | Cash Incentive Plan(1) | 03/07/23 | $144,809 | — | — | — | 144,809 | | Time-Based Awards(2) | 03/07/23 | | — | — | 2,079 | $88,150 | | PSP(3) | 03/07/23 | | 1,040 | 2,079 | — | $88,150 | | XSIP(4) | 03/07/23 | — | | 3,104 | | $131,610 |
Grants of Plan-Based Awards in 2023
| (1) As further explained in Compensation Discussion and Analysis—Elements of Compensation—Annual Cash Incentive Plan, the executive officers were eligible for a possible cash incentive award for 2023 pursuant to the Plan based on corporate performance. The table reflects the possible target incentive awards based on corporate performance. The target incentive is a percentage of the actual salary earned for the year and was set as follows: Mr. Warzala (125%), Mr. Leach and Mr. Maida (50%) Mr. Bendre and Mr. May (20%) and Mr. Pirthauer (35%) There is no maximum amount under the Plan. The actual amount earned by each Named Executive Officer in 2023 is reported under the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table. |
Grants of Plan-Based Awards in 2023
| (2) As further explained in Compensation Discussion and Analysis—Elements of Compensation—Equity Incentive Compensation, consists of Time-Based Awards that will vest in three equal annual installments beginning in April 2024. |
Grants of Plan-Based Awards in 2023
| (3) As further explained in Compensation Discussion and Analysis—Elements of Compensation—Equity Incentive Compensation—The Performance Share Plan above, certain executive officers were eligible for restricted stock awards based on achievement of annual performance goals for 2023. For 2023, the performance goals were fully achieved and 100% of the share award was earned for each Named Executive Officer. The award vested one-third on April 1, 2024 with the remainder vesting one-third in each of 2025 and 2026, subject to continued employment. |
Grants of Plan-Based Awards in 2023
| (4) As further explained in Compensation Discussion and Analysis—Elements of Compensation—Equity Incentive Compensation—XSIP above, certain executive officers were eligible to receive performance-based equity incentive awards based on achievement of longer term performance goals. These awards relate to the revenue growth in 2022 and vest over a two year period. |
Grants of Plan-Based Awards in 2023
| (5) Represents the total grant date fair value of stock awards on the date of the award. The fair values of these awards are based on the closing price of the Company’s common stock as reported on the Nasdaq Global Market on the date of grant. |
Grants of Plan-Based Awards in 2023
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Outstanding Equity Awards at 2023 Fiscal Year End
Outstanding Equity Awards at 2023 Fiscal Year End The following table shows all outstanding equity awards held by the Named Executive Officers as of December 31, 2023.
Outstanding Equity Awards at 2023 Fiscal Year End
| | Stock Awards | | | | | Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) | Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | Richard S. Warzala | 120,180(3) | $3,630,638 | 12,029 | $363,396 | | Michael R. Leach | 19,552(4) | $590,666 | 2,271 | $68,607 | | Ashish R. Bendre | 3,185(5) | $96,219 | 892 | $26,947 | | Helmut D. Pirthauer | 3,686(6) | $111,354 | — | — | | Kenneth A. May | 4,753(7) | $107,880 | 970 | $29,304 | | Robert P. Maida | —(8) | — | — | — |
Outstanding Equity Awards at 2023 Fiscal Year End
| (1) Value is based on the closing price of the Company’s common stock of $30.21 on December 31, 2023, as reported on the Nasdaq Global Market. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (2) Consists of shares of restricted stock granted in 2023 that are subject to future performance goals under the Company’s Performance Share Plan. These shares were earned based on achievement of performance goals for 2023 and the earned award vested one-third on April 1, 2024 with the remainder vesting one-third in each of 2025 and 2026, subject to continued employment. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (3) Consists of time-based awards, including performance-based awards that were previously earned but remain subject to time-based vesting. Of these shares, 63,780 shares vest in 2024; 44,527 shares vest in 2025; and 11,873 shares vest in 2026, in each case subject to continued employment. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (4) Consists of time-based awards, including performance-based awards that were previously earned but remain subject to time-based vesting. Of these shares, 10,278 shares vest in 2024; 7,032 shares vest in 2025; and 2,242 vest in 2026, in each case subject to continued employment. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (5) Consists of time-based awards, including performance-based awards that were previously earned but remain subject to time-based vesting. Of these shares, 1,642 shares vest in 2024; 1,147 shares vest in 2025; and 397 vest in 2026, in each case subject to continued employment. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (6) Of these shares, 1,929 shares vest in 2024; 1,215 shares vest in 2025; and 543 shares vest in 2026, in each case subject to continued employment. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (7) Consists of time-based awards, including performance-based awards that were previously earned but remain subject to time-based vesting. Of these shares, 2,134 shares vest in 2024; 1,832 shares vest in 2025; and 787 shares vest in 2026, in each case subject to continued employment. |
Outstanding Equity Awards at 2023 Fiscal Year End
| (8) Mr. Maida retired from the Company effective September 30, 2023. |
Option Exercises and Stock Vested in 2023
Option Exercises and Stock Vested in 2023 The following table provides information regarding restricted stock awards that vested during 2023 for each of the Named Officers. No options were owned or exercised by the Named Officers in 2023.
Option Exercises and Stock Vested in 2023
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Richard S. Warzala | 69,851 | $2,562,687 | | Michael R. Leach | 12,612 | $465,539 | | Ashish R. Bendre | 2,848 | $106,550 | | Helmut D. Pirthauer | 3,274 | $123,723 | | Kenneth A. May | 2,795 | $103,800 | | Robert P. Maida | 8,979 | $347,046 |
Option Exercises and Stock Vested in 2023
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Pay Ratio Disclosure
Pay Ratio Disclosure Allient and its subsidiaries have approximately 2,287 employees worldwide, with approximately 55% in North America and 35% are located in Europe and the balance are located in Asia-Pacific. Our philosophy is to pay our employees competitively with similar positions in the applicable labor market. By doing so, we believe we maintain a high-quality, stable workforce. The Dodd-Frank Wall Street Reform and Consumer Protection Act and SEC rules require us to provide the ratio of the annual total compensation of our Chief Executive Officer, to that of an employee whose annual compensation is at the median of all our employees. Our median-compensated employee was identified in fiscal 2023. We identified the employee with compensation at the median of all employees by using taxable income for 2023 and applied this method consistently across our global employee population. We did not make any cost-of-living adjustments despite the large variety of labor markets in which our employees work, nor did we use any statistical sampling to determine the median employee. This median employee had a total compensation for 2023 of $42,533. Our Chief Executive Officers’ total 2023 compensation was $4,373,276 as reported in the summary compensation table. Based on this information, the ratio of the annual total compensation was 103:1. Different methodologies are used by various public companies to determine an estimate of their pay ratio. In addition, no two companies have identical employee populations and compensation programs differ by country even within the same company. The estimate ratio reported should not be used as a basis for comparison between companies.
Pay Ratio Disclosure
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Pay Versus Performance Disclosure
Pay Versus Performance Disclosure The following table and supporting graphics present information relating to executive compensation and financial performance measures for the fiscal years ended December 31, 2023, 2022, 2021, 2020, and 2019, in satisfaction of Item 402(v) of Regulation S-K. Please see the Compensation Discussion & Analysis for an overview of Allient’s compensation programs.
Pay Versus Performance Disclosure
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(3) | Average Summary Compensation Table Total for non-PEO NEOs(2) | Average Compensation Actually Paid to Non-PEO NEOs(3) | Value of Initial Fixed $100 Investment Based On: | | Net Income (in thousands) | EBITDA (in thousands)(5) | Revenue (in thousands) | Adjusted Diluted Earnings Per Share(5) | | | | | | | Total Shareholder Return(5) | Peer Group Total Shareholder Return(4) | | | | | | 2019 | $4,279,423 | $4,033,623 | $918,896 | $894,971 | $108.87 | $118.97 | $17,022 | $43,832 | $371,084 | $1.58 | | 2020 | $3,425,573 | $3,453,415 | $743,587 | $747,179 | $115.09 | $145.25 | $13,643 | $38,477 | $366,694 | $1.32 | | 2021 | $3,907,236 | $6,191,856 | $779,180 | $1,038,750 | $123.60 | $168.68 | $24,094 | $44,456 | $403,516 | $1.60 | | 2022 | $4,663,141 | $4,229,571 | $786,565 | $736,999 | $118.28 | $142.55 | $17,389 | $56,859 | $502,988 | $1.88 | | 2023 | $4,373,276 | $3,534,648 | $687,999 | $498,841 | $103.00 | $199.73 | $24,097 | $67,151 | $578,634 | $2.30 |
Pay Versus Performance Disclosure
| (1) Principal Executive Officer (“PEO”) represents Richard S. Warzala, Chairman of the Board of Directors, President and Chief Executive Officer of the Company. |
Pay Versus Performance Disclosure
| (2) Named Executive Officers (“NEOs”) represents Michael R. Leach, Senior Vice President and Robert P. Maida, Senior Vice President and President of Allient Innovum Group for each of the years presented. As stated previously, Robert P. Maida retired in September 2023. In the years 2020-2023, Ashish R. Bendre, Vice President and President of Allient Orion Group, and Helmut D. Pirthauer, Vice President and President of Allient Dynamos Group were represented as NEOs. In 2023, Kenneth A. May, Chief Technology Officer was represented as an NEO. |
Pay Versus Performance Disclosure
| (3) Compensation Actually Paid represents the amounts presented in the Summary Compensation Table, modified to adjust the amounts included for equity awards. These modifications are valuation adjustments of Restricted Stock awards, revalued to show the change in fair value as of the reporting date. For detailed reconciliation, please see the tables presented below. |
Pay Versus Performance Disclosure
| (4) Value assumes $100 invested on December 31, 2018. |
Pay Versus Performance Disclosure
| Year | Summary Compensation Table Total for PEO | Minus: Stock Awards Total in Summary Compensation Table for PEO | Plus: Year-over-year change in Fair Value of Outstanding and Unvested Equity Awards | Plus: Fair Value as of the Vesting Date of Equity Awards that Vested during the Year | Compensation Actually Paid to PEO | | 2019 | $4,279,423 | $2,351,581 | $1,255,038 | $850,743 | $4,033,623 | | 2020 | $3,425,573 | $2,429,647 | $867,338 | $1,590,151 | $3,453,415 | | 2021 | $3,907,236 | $1,648,214 | $1,300,034 | $2,632,800 | $6,191,856 | | 2022 | $4,663,141 | $2,688,339 | $(14,749) | $2,269,518 | $4,229,571 | | 2023 | $4,373,276 | $2,020,233 | $(1,381,083) | $2,562,687 | $3,534,648 |
Pay Versus Performance Disclosure
| Year | Average Summary Compensation Table Total for NEOs | Minus: Stock Awards Total in Summary Compensation Table for NEO | Plus: Year-over-year change in Fair Value of Outstanding and Unvested Equity Awards | Plus: Fair Value as of the Vesting Date of Equity Awards that Vested during the Year | Compensation Actually Paid to NEOs | | 2019 | $918,896 | $326,370 | $155,045 | $147,400 | $894,971 | | 2020 | $743,587 | $288,721 | $150,173 | $142,140 | $747,179 | | 2021 | $779,180 | $168,090 | $130,416 | $297,244 | $1,038,750 | | 2022 | $786,565 | $221,130 | $(66,237) | $237,801 | $736,999 | | 2023 | $687,999 | $197,592 | $(220,897) | $229,331 | $498,841 |
Pay Versus Performance Disclosure
| (5) The Peer Group is disclosed in the “Peer Group Analysis” section and is further reflected in the Performance Graph of SEC Form 10-K, filed March 5, 2024. |
Pay Versus Performance Disclosure
| (6) EBITDA, or earnings before interest expense, tax expense (provision), depreciation, and amortization, and Adjusted Diluted Earnings Per Share, are non-GAAP measures, which management believes are important in evaluating the operating results of the Company. EBITDA and Adjusted Diluted Earnings Per Share are non-GAAP financial metrics linked to the annual cash incentive plan. The reconciliation of such is available in the Management’s Discussion & Analysis section of SEC Form 10-K, filed March 5, 2024. |
Pay Versus Performance Disclosure
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Pay Versus Performance Disclosure
Allient utilizes key financial performance metrics in determination of target and actual compensation of the PEO and NEOs. As shown in the above table, as well as the following graphs, Allient utilizes an extensive planning and assessment process to ensure that compensation remains aligned with the overall success of the Company. The Human Capital and Compensation Committee of the Board of Directors maintains oversight and governance over the compensation of the PEO and NEOs. The following graphs will show the correlation of the key financial metrics to the compensation of the PEO and NEOs.
Pay Versus Performance Disclosure
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Pay Versus Performance Disclosure
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Pay Versus Performance Disclosure
| Most Important Company Performance Measures for Linking Executive Compensation to Company Performance | | Total Shareholder Return | | Net Income | | EBITDA | | Revenue | | Adjusted Diluted Earnings Per Share |
Pay Versus Performance Disclosure
Allient has provided the above key performance metrics in our tabular and graphical Pay versus Performance information as shown above. In addition to the key performance metrics listed, the Company utilizes several additional metrics, both financial and non-financial, in determination of compensation for the Principal Executive Officer and Named Executive Officers.
Pay Versus Performance Disclosure
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Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control The following table shows potential payouts under the employment agreements or other arrangements with each Named Executive Officer assuming that employment was terminated in each situation listed in the table and that termination occurred on the last business day of 2023. Mr. Maida retired from the Company effective September 30, 2023. All unvested equity awards were forfeited in connection with his retirement and no cash severance was paid.
Potential Payments upon Termination or Change in Control
| Event | Richard S. Warzala | Michael R. Leach | Ashish R. Bendire | Helmut D. Pirthauer | Kenneth A. May | | Death: | | | | | | | Severance Pay | $170,000 | $96,250 | $94,500 | $180,556 | $58,750 | | Annual Cash Incentive Compensation | $843,750 | $189,800 | $61,150 | — | $44,497 | | Performance-Based Stock Awards | $1,443,222 | $262,616 | $198,298 | — | $89,089 | | Accelerated Time-Based Equity Awards | $3,588,616 | $548,644 | $54,197 | $111,354 | $101,566 | | Total | $6,045,588 | $1,097,309 | $408,145 | $291,910 | $293,901 | | Disability: | | | | | | | Severance Pay | — | — | — | $180,556 | — | | Annual Cash Incentive Compensation | $843,750 | $189,800 | $61,150 | — | $44,497 | | Performance-Based Stock Awards | $1,443,222 | $262,616 | $198,298 | — | $89,089 | | Accelerated Time-Based Equity Awards | $3,588,616 | $548,644 | $54,197 | $111,354 | $101,566 | | Total | $5,875,588 | $1,001,059 | $313,645 | $291,910 | $235,152 | | Voluntary Resignation without Good Reason or Termination for Cause: | | | | | | | No payments | N/A | N/A | N/A | N/A | N/A | | Voluntary Resignation with Good Reason or Involuntary Termination Without Cause: | | | | | | | Severance Pay | $680,000 | $385,000 | $378,000 | $541,667 | $235,000 | | Annual Cash Incentive Compensation | $612,000 | — | — | — | — | | Performance-Based Stock Awards | $1,443,222 | $262,616 | $198,298 | — | $89,089 | | Accelerated Time-Based Equity Awards | $3,588,616 | $548,644 | $54,197 | — | $101,566 | | Healthcare and other Insurance Benefits | $45,000 | $45,000 | $45,000 | — | $45,000 | | Total | $6,368,838 | $1,241,259 | $675,495 | $541,667 | $470,655 | | Voluntary Resignation with Good Reason or Involuntary Termination Without Cause within 90 days prior to or 24 months following a change in control: | | | | | | | Severance Pay | $5,635,260 | $665,656 | $483,036 | $541,667 | $285,968 | | Annual Cash Incentive Compensation | $1,564,794 | $189,800 | $61,150 | — | $44,497 | | Performance-Based Stock Awards | $1,443,222 | $262,616 | $198,298 | — | $89,089 | | Accelerated Time-Based Equity Awards | $3,588,616 | $548,644 | $54,197 | — | $101,566 | | Healthcare and other Insurance Benefits | $340,000 | $192,500 | $189,000 | — | $117,500 | | Total | $12,571,892 | $1,859,215 | $985,681 | $541,667 | $638,620 |
Potential Payments upon Termination or Change in Control
Refer to Definitions section below for descriptions of terms used. Payments upon Retirement. Under the terms of the employment agreement with Messrs. Warzala, Leach, Bendre, and May if the executive’s employment terminates as a result of retirement upon attaining age 65 years of age and 10 years of continual employment (or on or after January 2, 2024 for Mr. Warzala), the Employment Agreement would entitle him to (i) a cash payment equal to a prorated portion of the target bonus that he would have earned for the fiscal year in which the termination occurred had such termination not occurred; and (ii) immediate vesting of all of his outstanding equity grants and awards that vest on the basis of the passage of time only (“Time-Based Awards”) or PSP and LTIP/XSIP awards that vest on the basis of performance criteria (“Performance-Based Awards”) that have been earned but are still subject to time-based vesting outstanding on the date of retirement. At December 31, 2023, no Named Executive Officer was eligible for retirement under the terms of his respective employment agreement. Payments upon Death. Under the terms of the employment agreements with Messrs. Warzala, Leach, Bendre, and May, in the event of the executive’s death the executive is entitled to salary continuation to the end of the month containing the date of death and for three subsequent months. In addition, the executive will receive a cash payment equal to a prorated portion of the Annual Cash Incentive bonus that he would have earned for the fiscal year in which the death occurred; and immediate vesting of all of his outstanding Time-Based Awards and Performance-Based Awards that have been earned but are still subject to time-based vesting, and prorated vesting of his unearned Performance-Based Awards. Under the terms of Mr. Pirthauer’s employment agreement, he is entitled to salary continuation to the end of the month containing the date of death and for six subsequent months. In addition, pursuant to the award agreement under the 2017 Omnibus Incentive Plan, Mr. Pirthauer will receive immediate vesting of all of his outstanding Time-Based Awards.
Potential Payments upon Termination or Change in Control
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Potential Payments upon Termination or Change in Control
Payments upon Disability. Under the terms of Mr. Warzala’s employment agreement, in the case of disability, salary is continued until the end of the term of the employment agreement, as adjusted for any compensation payable under any Company paid disability plan, or until long-term disability insurance becomes effective. Benefits are continued as generally provided by the Company to its employees in accordance with the Company’s disability plan. Under the terms of the employment agreements with Messrs. Leach, Maida and Bendre, the executive is entitled to the benefits under any disability insurance policies maintained by the Company for the benefit of the executive. In addition, Messrs. Warzala, Leach, Bendre, and May will receive a cash payment equal to a prorated portion of the Annual Cash Incentive bonus that he would have earned for the fiscal year in which the disability occurred had such disability not occurred; and immediate vesting of all of his outstanding Time-Based Awards and Performance-Based Awards that have been earned but are still subject to time-based vesting, and prorated vesting of his unearned Performance-Based Awards. Under the terms of Mr. Pirthauer’s employment agreement, he is entitled to his base salary for the lesser of six months or the termination of his employment agreement. In addition, pursuant to the award agreement under the 2017 Omnibus Incentive Plan, Mr. Pirthauer will receive immediate vesting of all of his outstanding Time-Based Awards. Payments upon Voluntary Resignation without Good Reason or Involuntary Termination with Cause. A Named Executive Officer is not entitled to receive any additional forms of severance payments or benefits upon his voluntary decision to terminate employment with the Company prior to being eligible for retirement or upon termination for cause. Payments upon Voluntary Resignation with Good Reason or Involuntary Termination Without Cause. Under the terms of Mr. Warzala’s employment agreement, if he is involuntarily terminated without cause or he terminates his employment for good reason, the employment agreement entitles him to: (i) an amount equal to his then current base salary payable in cash over a 12-month period; (ii) a cash payment equal to 90% of Base Salary in lieu of an Annual Cash Incentive bonus for the year in which termination occurs; (iii) continued coverage under the Company’s benefit plans for one year following termination; and (iv) immediate vesting of his Time-Based Awards and Performance-Based Awards that have been earned but are still subject to time-based vesting and, prorated vesting of his unearned Performance-Based Awards. Under the terms of the employment agreements with Messrs. Leach, Bendre, and May, the executive is entitled to a cash payment equal to 100% of the Executive’s then current base salary. Executive will also be entitled to continued coverage under the Company’s benefit plans for one year following termination at the same premium rates as may be charged from time to time for senior level employees. In addition, the Executive will be entitled to immediate vesting of all of his outstanding Time-Based Awards and Performance-Based Awards that have been earned but are still subject to time-based vesting, and prorated vesting of his unearned Performance-Based Awards. Under the terms of Mr. Pirthauer’s employment agreement, the Company may not terminate the employment agreement prior to December 31, 2024 without cause. If Mr. Pirthauer is involuntarily terminated without cause after that date, he is entitled to severance pay equal to one and half years’ base salary. Voluntary Resignation with Good Reason or Involuntary Termination Without Cause within 90 days prior to or 24 months following a change in control. Mr. Warzala’s change in control agreement and Messrs. Leach, Bendre, and May’s employment agreements provide for certain payments upon termination of employment resulting within 90 days prior to or 24 months following a change in control of the Company. These agreements only provide benefits if there is both a change in control of the Company and termination of employment other than for cause. If the executive’s employment is terminated by the Company, other than for death, disability or cause, or the executive terminates the agreement for good reason, in each case following a change in control, then the executive will be entitled to certain benefits to be paid as a lump sum in cash. Under the terms of Mr. Warzala’s change in control agreement, he is entitled to (i) a severance payment equal to 2.5 times his annual Base Salary plus the highest amount paid or payable pursuant to the Annual Cash Incentive plan applicable to the executive for any of the 3 prior fiscal years; (ii) a benefit payment equal to 25% of annual salary for 24 months to purchase healthcare and other insurance benefits; (iii) payment of all legal fees and expenses incurred as a result of termination; and (iv) a prorata payment for the current year benefit pursuant to any annual or long-term incentive plan applicable to the executive for the year that includes the Date of Termination. Under the terms of the employment agreements with Messrs. Leach, Bendre, and May, the executive is entitled to (i) a cash payment equal to 100% of the executive’s then current Base Salary plus the target Annual Cash Incentive for the year of termination (or if greater, the year immediately preceding the year in which the Change in Control occurred); (ii) an additional amount equal to the executive’s target Annual Cash Incentive for the year of termination; (iii) a benefit payment equal to 25% of annual salary for 24 months to purchase healthcare and other insurance benefits; and (iv) immediate vesting of all of his outstanding Time-Based Awards and Performance-Based Awards that have been earned but are still subject to time-based vesting, and prorated vesting of his unearned Performance-Based Awards. Under the terms of Mr. Pirthauer’s employment agreement, the Company may not terminate the employment agreement prior to December 31, 2024 without cause. If Mr. Pirthauer is involuntarily terminated without cause after that date, he is entitled to severance pay equal to one and half years’ base salary.
Potential Payments upon Termination or Change in Control
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Potential Payments upon Termination or Change in Control
Definitions. “Date of Termination” means (i) thirty days after providing the Notice of Termination for a termination for disability, or (ii) the date specified in the Notice of Termination for a termination for cause, good reason, death or retirement. “Notice of Termination” means a written notice that indicates the specific termination provision of the change of control agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination of employment under the provision indicated. “Base Salary” means an amount equal to the annual base salary in effect immediately prior to the Notice of Termination. A “Change in control of the Company” means any of the following: (i) a person (other than any officer or director) is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing more than 45% of the combined voting power of the Company’s then outstanding securities; (ii) upon the first purchase of outstanding shares of the Company’s outstanding common stock pursuant to a tender or exchange offer, with certain exceptions; (iii) a change in the composition of the Board of Directors such that the incumbent directors cease to constitute at least a majority of the Board during any period of two consecutive years (including, for purposes of computing a majority, those persons approved by a vote of at least two-thirds of the Company directors then still in office who either (1) were directors at the beginning of the period or (2) whose election or nomination for election was previously so approved); (iv) the shareholders of the Company approve a merger or consolidation of the Company, with certain exceptions; or (v) the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (excluding a spinoff distribution to shareholders of all or part of the Company’s equity interest in a subsidiary entity). A termination is for “Cause” if it is for any of the following reasons: (i) an act of dishonesty constituting a felony under the laws of the executive’s domicile resulting or intending to result in gain or personal enrichment at the expense of the Company; (ii) the use of drugs or excessive and habitual use of alcohol either of which substantially affects the executive’s ability to perform their duties with the Company; or (iii) continued unauthorized and significant absences from duty (with certain exceptions). Notwithstanding the foregoing, the executive will not be deemed to have been terminated for cause unless there is a resolution adopted by at least three-fourths of the full Board of Directors finding that in their good faith opinion the executive was guilty of conduct set forth above and specifying the particulars in detail. A termination is for “Good Reason” if it is within two years following any of the following events: (i) a change in the executive’s title or corporation office that results in a material diminution of the executive’s authority, duties or responsibilities; the assignment to the executive of any duties inconsistent with their status with the Company; or a substantial adverse alteration in the nature or status of the executive’s responsibilities; (ii) the change of the principal business of the Company (as evidenced by certain conditions) to the extent that the change results in a material negative change to the executive’s duties, conditions under which the duties are performed, or compensation; (iii) a reduction in annual base salary, without the executive’s consent; (iv) the relocation of the executive’s principal office to a location more than 50 miles from the location where such office is located immediately prior to the change in control of the Company; (v) the failure to pay within seven days, without the executive’s consent, any portion of current compensation or installment of deferred compensation under any applicable deferred compensation program (with certain conditions); (vi) the failure to continue any compensation plan or equivalent plan in which the executive participated in immediately prior to a change in control (with certain conditions); (vii) the failure to provide the executive with benefits substantially similar to those provided at the time of the change in control of the Company, the taking of any action by the Company that would directly or indirectly materially reduce any of such benefits or deprive the executive of any material fringe benefit provided at the time of the change in control of the Company, or the failure by the Company to provide the number of paid vacation days the executive is entitled on the basis of years of service with the Company in accordance with the Company’s normal vacation policy in effect at the time of the change in control of the Company; (viii) a breach of duty; or (ix) any termination of employment without a Notice of Termination.
Potential Payments upon Termination or Change in Control
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