DEF 14A of InnovAge Holding Corp., Oct 25, 2024

DEF 14A of InnovAge Holding Corp.

Filed Oct 25, 2024 · FY20240001140361-24-044264

Open on EDGAR

  1. PROPOSAL 1 - ELECTION OF DIRECTORS

    PROPOSAL 1 - ELECTION OF DIRECTORS Our Board recommends that the nominees below be elected as members of the Board at the Annual Meeting.

  2. PROPOSAL 1 - ELECTION OF DIRECTORS

    | | | | | Year | | | | Name | Class | Age | Position | Director Since | Current Term Expires | Expiration of Term For Which Nominated | | Andrew Cavanna | I | 50 | Director | 2021 | 2024 | 2027 | | Thomas Scully | I | 67 | Director | 2021 | 2024 | 2027 | | Marilyn Tavenner | I | 73 | Director | 2021 | 2024 | 2027 |

  3. PROPOSAL 1 - ELECTION OF DIRECTORS

    Each nominee is currently a member of our Board, was recommended for re-election by the Compensation and Nominating Committee for consideration by the Board and our stockholders, has consented to be named in this proxy statement and has agreed to serve if elected. If, before the Annual Meeting, any nominee becomes unable to serve, or chooses not to serve, the Board may nominate a substitute. If that happens, the persons named as proxies on the proxy card will vote for the substitute. Alternatively, the Board may either let the vacancy stay unfilled until an appropriate candidate is identified or reduce the size of the Board to eliminate the unfilled seat.

  4. Continuing Directors

    Continuing Directors Class II Directors (terms expiring at the annual meeting to be held in 2025) James G. Carlson, Chair, began serving as Chair and member of our Board in June 2022. Mr. Carlson served as director of Omnicare Inc. (NYSE: OCR) from 2013 through 2015 when the company was acquired by CVS Pharmacy, Inc. Prior to that, he was the Chief Executive Officer, President and Chairman of the Board of Amerigroup Corp., a multi-state managed healthcare company, from September 2007 through December 2012, retiring after Amerigroup merged with WellPoint Inc. (now known as Elevance Health, Inc. (NYSE: ELV)). He was Amerigroup’s President and Chief Operating Officer from 2003 to 2007. Prior to that, he was Executive Vice President of UnitedHealth Group, Inc. (NYSE: UNH) and President of its UnitedHealthcare business unit, which served more than ten million members in HMO and PPO plans nationwide. Mr. Carlson’s diverse experience also includes over 17 years with Prudential Financial, Inc. (NYSE: PRU) Mr. Carlson is a member of the board of directors PurFoods LLC, a home meal delivery service, and is co-founder of Guidon Partners. Mr. Carlson attended Morningside University and graduated from Rider University. We believe Mr. Carlson’s extensive experience in the healthcare industry, particularly his decades of experience in coordinated, value-based care, as well as his knowledge of corporate governance and his prior service in boards of public companies similar to the Company, qualify him to serve as a director of our Board. Richard Zoretic began serving on our Board in March 2021. Prior to his retirement in 2014, Mr. Zoretic served as Executive Vice President of WellPoint, Inc. and President of the company’s Government Business Division, a business encompassing WellPoint, Inc.’s Medicaid, Medicare, CareMore and Federal Employee Program businesses. Prior to joining WellPoint, Inc. Mr. Zoretic served as Chief Operating Officer of Amerigroup Corporation from 2007 to 2012, where he had overall responsibility for company operations including local health plans, medical management programs, provider networks, health care analytics, information technology and customer service operations. Mr. Zoretic currently serves on the board of directors, the compliance and quality committee and the audit committee of Molina Healthcare, Inc. (NYSE: MOH). Mr. Zoretic served on the board of directors and audit committee of Aveanna Healthcare Holdings, Inc. (Nasdaq: AVAH) from 2017 to June 2024. Mr. Zoretic earned a Bachelor of Science in Finance from Pennsylvania State University. We believe Mr. Zoretic’s expertise in healthcare operations and finance and experience working with public company boards qualify him to serve as a director of our Board. Teresa Sparks began serving on our Board in August 2023. Ms. Sparks served as the former Executive Vice President and Chief Financial Officer of Envision Healthcare, a leading provider of physician-led services and post-acute services, from October 2018 to August 2020. Prior to Envision, Ms. Sparks was the interim Chief Financial Officer at Brookdale Senior Living and, prior to that, she served as Executive Vice President and Chief Financial Officer of Surgery Partners, which acquired Symbion, Inc. in November 2014, until January 2018. Ms. Sparks also served in various positions with Symbion, including Senior Vice President and Chief Financial Officer. Ms. Sparks began her career as an auditor at Deloitte. Ms. Sparks currently serves on the board of directors of ATI Physical Therapy, Inc. (NYSE: ATIP), where she also serves as a member of the Audit Committee and Chair of the Healthcare Compliance Committee. Ms. Sparks previously served on the board of directors and chair of the audit committee of Harrow Health, Inc. (Nasdaq: HROW) from 2020 to June 2024. Ms. Sparks is a Certified Public Accountant (inactive) and earned a Bachelor of Science in in Accounting and Business Administration from Trevecca Nazarene University. We believe Ms. Sparks’ diverse experience in multiple sectors, including in financial services, life sciences, specialty pharmacy, healthcare services, and technology, as well as her decades working with large public and private companies that require sophisticated financial and accounting reporting and operate in highly regulated, healthcare-focused industries qualify her as a director of our Board. Class III Directors (terms expiring at the annual meeting to be held in 2026) John Ellis Bush began serving on our Board in March 2021. Mr. Bush served as the governor of Florida from 1999 to 2007. Mr. Bush is on the board of directors of IHS Holding Limited (NYSE: IHS), one of the largest independent owners, operators and developers of shared telecommunications infrastructure. Additionally, Mr. Bush serves as chairman of Finback Investment Partners LLC and Dock Square Capital LLC, both merchant banks headquartered in Coral Gables. Mr. Bush earned a Bachelor of Arts from the University of Texas at Austin. We believe Mr. Bush’s experience with healthcare regulation and reimbursement, as well as his experience in state government, qualifies him to serve as a director of our Board. Patricia Fontneau began serving on our Board in March 2023. Ms. Fontneau has served as chief executive officer of Reach Out and Read Colorado, an early literacy nonprofit, since August 2022. Prior to that, Ms. Fontneau served as President of the Benefit and Exchange Technology Solutions health plan business at Cigna from 2014 to 2022. From 2011 to 2014, Ms. Fontneau worked as the chief executive officer at a public health insurance marketplace, Connect for Health Colorado. Ms. Fontneau also ran the operations of Holme Roberts & Owen LLP, an international law firm, from 2008 to 2011. Ms. Fontneau is a member of the boards of ProsperBridge, Public Education & Business Coalition and the Downtown Denver Partnership. Ms. Fontneau earned a Bachelor of Science in Business Administration from the State University of New York at Oswego and a Master of Business Administration in Finance from New York University. We believe Ms. Fontneau’s executive leadership roles in Colorado’s public health insurance marketplace as well as on the national and global stage with Cigna, her payor-side and non-profit healthcare business experience, and her significant expertise with regulatory oversight and risk management qualify her to serve as a director of our Board. Ted Kennedy, Jr. began serving on our Board in March 2021. Mr. Kennedy is a Partner at Epstein Becker Green, a national law firm, in the healthcare and life science practice, where he has practiced since 2014. From 2015 to 2019, Mr. Kennedy served as a State Senator in the Connecticut General Assembly, and from 2017 to 2021, he served as Chair of the Board of the American Association of People with Disabilities (AAPD), and continues to serve on the AAPD Board as Immediate Past Chair. Mr. Kennedy currently serves on the board of directors of Arvinas, Inc. (Nasdaq: ARVN), a biopharmaceutical company. Mr. Kennedy earned a Bachelor of Arts from Wesleyan University, a Master’s in Environmental Studies from Yale University, and a Juris Doctor from the University of Connecticut. We believe Mr. Kennedy’s expertise in legal and regulatory matters and experience in the healthcare industry qualifies him to serve as a director of our Board.

  5. Board Meetings and Committees

    | 4. | appointing, compensating and overseeing the work of any compensation consultant, legal counsel or other advisor retained by the Compensation and Nominating committee; |

  6. Board Meetings and Committees

    | 6. | conducting the independence assessment outlined in Nasdaq rules with respect to any compensation consultant, legal counsel or other advisor retained by the Compensation and Nominating committee; |

  7. Board Meetings and Committees

    | 10. | reviewing and making recommendations to our Board with respect to director compensation; |

  8. EXECUTIVE AND DIRECTOR COMPENSATION

    EXECUTIVE AND DIRECTOR COMPENSATION The following section provides compensation information pursuant to the scaled disclosure rules applicable to “emerging growth companies” and “smaller reporting companies” under the rules of the SEC and may contain statements regarding future individual and company performance targets and goals. These targets and goals should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts. We are currently considered an “emerging growth company” and “smaller reporting company” within the meaning of the Securities Act, for purposes of the SEC’s executive compensation disclosure rules. Accordingly, we are required to provide a Summary Compensation Table and an Outstanding Equity Awards at Fiscal Year-End Table, as well as limited narrative disclosures regarding executive compensation for our last completed fiscal year.

  9. Overview

    The Company’s executive compensation programs for our Named Executive Officers generally consist of a base salary, annual cash bonus opportunities, long-term incentive compensation in the form of equity awards and other benefits, as described below. As further described below, our Named Executive Officers are also eligible to receive certain payments and benefits upon a termination of employment under certain circumstances in accordance with the terms of their employment agreements.

  10. Equity Award Grant Practices

    Equity Award Grant Practices The Company does not currently grant new awards of stock options, stock appreciation rights or similar option-like instruments, and generally is not in the practice of granting such awards. The Company has not granted such an award since August 2022. Accordingly, the Company has no specific policy or practice on the timing of such awards in relation to the disclosure of material non-public information by the Company. In the event that the Company determines to grant any such new awards, the Board will evaluate the appropriate steps to take in relation to the foregoing. While Holdings granted the Named Executive Officers option-like instruments in the form of Profits Interests during fiscal year 2024, such Profits Interests represent partnership interests in Holdings.

  11. Fiscal Year 2024 Summary Compensation Table

    | Name and Principal Position | Fiscal Year | Salary(1) ($) | Bonus(2) ($) | Stock Awards(3) ($) | Option Awards(4) ($) | Non-Equity Incentive Plan Compensation(5) ($) | Non-qualified Deferred Compensation Earnings ($) | All Other Compensation(6) ($) | Total ($) | | Patrick Blair, President and Chief Executive Officer | 2024 | 826,489 | 150,000 | 1,200,005 | 2,007,500 | 750,000 | — | 6,900 | 4,940,894 | | | 2023 | 750,000 | — | — | — | 750,000 | — | 6,600 | 1,506,600 | | Benjamin Adams, Chief Financial Officer(7) | 2024 | 424,303 | 50,500 | — | 1,813,770 | 217,500 | — | 7,362 | 2,513,435 | | Nicole D’Amato, Chief Legal Officer and Corporate Secretary | 2024 | 468,932 | 63,000 | 450,002 | 360,000 | 261,000 | — | 6,600 | 1,609,534 | | | 2023 | 435,000 | 20,000 | 800,008 | — | 217,500 | — | 6,262 | 1,478,770 |

  12. Outstanding Equity Awards at 2024 Fiscal Year End

    Outstanding Equity Awards at 2024 Fiscal Year End The following reflects information regarding outstanding equity-based awards held by the Named Executive Officers as of June 30, 2024.

  13. Outstanding Equity Awards at 2024 Fiscal Year End

    | | Option Awards | | | | | | | Stock Awards | | | | | Name | Grant Date | Vesting Commencement 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 ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | 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 ($)(1) | | Patrick Blair | 12/1/2021(2) | — | 346,561 | 207,938 | 776,299 | 7.89 | 11/9/2031 | — | — | — | — | | | 12/1/2021(3) | — | — | — | — | — | — | 69,312 | 343,788 | — | — | | | 12/1/2021(4) | — | — | — | — | — | — | — | — | 258,767 | 1,283,484 | | | 8/30/2023(5)(6) | — | — | 550,000 | 550,000 | N/A | N/A | — | — | — | — | | | 8/30/2023(7) | 6/6/2023 | — | — | — | — | — | 70,176 | 348,073 | — | — | | | 6/5/2024(7) | 6/5/2024 | — | — | — | — | — | 123,967 | 614,876 | — | — | | Benjamin Adams | 7/10/2023(5)(6) | — | — | 431,850 | 431,850 | N/A | N/A | — | — | — | — | | Nicole D’Amato | 7/2/2021(7) | 7/2/2021 | — | — | — | — | — | 4,147 | 20,569 | — | — | | | 2/4/2022(7) | 7/2/2021 | — | — | — | — | — | 5,542 | 27,488 | — | — | | | 3/16/2022(7) | 7/2/2021 | — | — | — | — | — | 6,465 | 32,066 | — | — | | | 8/15/2022(7) | 8/15/2022 | — | — | — | — | — | 61,729 | 306,176 | — | — | | | 6/6/2023(7) | 6/6/2023 | — | — | — | — | — | 34,768 | 172,449 | — | — | | | 12/18/2023(5)(6) | — | — | 125,000 | 125,000 | N/A | N/A | — | — | — | — | | | 6/4/2024(7) | 7/4/2024 | — | — | — | — | — | 97,403 | 483,119 | | |

  14. Outstanding Equity Awards at 2024 Fiscal Year End

    | (1) Amounts reported are based on the fair market value of our common stock on the last day of the fiscal year ended June 30, 2024 (i.e., $4.96). |

  15. Outstanding Equity Awards at 2024 Fiscal Year End

    | (2) Represents an award of 1,330,798 stock options granted to Mr. Blair on December 1, 2021 that vest as follows: (i) 41(2)∕3% of the stock options subject to the award are subject to the following vesting conditions: (A) 25% vested on the first anniversary of December 1, 2021, and (B) an additional 6.25% will vest at the end of each three-month period thereafter, such that the time-vesting portion of the award is fully vested on the fourth anniversary of December 1, 2021; (ii) 41(2)∕3% of the stock options subject to the award will vest on the first date as of which the volume-weighted average price of a share of stock over the 90-consecutive trading day period ending on such date equals or exceeds $15 per share; and (iii) 16(2)∕3% of the stock options subject to the award will vest on the first date as of which the volume-weighted average price of a share of stock over the 90-day consecutive trading period ending on such date equals or exceeds $21 per share. |

  16. Outstanding Equity Awards at 2024 Fiscal Year End

    | (3) Represents RSUs granted to Mr. Blair on December 1, 2021 that vest (i) 25% on the first anniversary of December 1, 2021; and (ii) an additional 6.25% at the end of each three-month period thereafter, such that the award is fully vested on the fourth anniversary of December 1, 2021. |

  17. Outstanding Equity Awards at 2024 Fiscal Year End

    | (4) Represents RSUs granted to Mr. Blair on December 1, 2021 that vest as follows: (i) 184,833 of the RSUs will vest on the first date as of which the volume-weighted average price of a share of stock over the 90-day consecutive trading day period ending on such date equals or exceeds $15 per share; and (ii) 73,933 of the RSUs will vest on the first date as of which the volume-weighted average price of share of stock over the 90-day consecutive trading day period ending on such date equals or exceeds $21 per share. |

  18. Outstanding Equity Awards at 2024 Fiscal Year End

    | (5) Represents an award of Profits Interests granted to the applicable Named Executive Officer in fiscal year 2024 that vest as follows: (i) 50% based on time-vesting requirements and (ii) 50% based on performance-vesting requirements. The time-vesting Profits Interests vest 25% on each of the first four anniversaries of the grant date. The performance-vesting Profits Interests vest upon the consummation of a Change of Control of Holdings, subject to satisfying certain performance hurdles. |

  19. Outstanding Equity Awards at 2024 Fiscal Year End

    | (6) For more information on these Profits Interests, see the section titled “Profits Interests” below. The Profits Interests represent partnership interests in Holdings that are intended to constitute profits interests for U.S. federal income tax purposes. Despite the fact that the Profit Interests do not require the payment of an exercise price, they are most economically similar to stock options. |

  20. Outstanding Equity Awards at 2024 Fiscal Year End

    Accordingly, they are classified as “options” under the definition provided in Item 402(a)(6)(i) of Regulation S-K as an instrument with an “option-like feature. Profits Interests awards reflected in the table above as (i) “Unexercisable” are Profits Interests that have not yet time-vested, (ii) “Unearned” are Profits Interests that have not yet fully vested, and (iii) “Exercisable” are Profits Interests that have fully vested and remain outstanding.

  21. Outstanding Equity Awards at 2024 Fiscal Year End

    | (7) Represents RSUs granted to the applicable Named Executive Officer which vest in substantially equal installments on each of the first three anniversaries of the applicable vesting commencement date, subject to continued employment through each such vesting date. The applicable vesting commencement dates for such RSU grants are set forth in the table above. |

  22. Outstanding Equity Awards at 2024 Fiscal Year End

    Profits Interests During fiscal year 2021, following the consummation of the transaction between us, Ignite Aggregator LP, and our then-existing equity holders entering into a Securities Purchase Agreement, certain of our executives received awards of Profits Interests pursuant to the TCO Group Holdings, L.P. Equity Incentive Plan, as it may be amended from time to time (the “Holdings Incentive Plan”), which are intended to be treated as “profits interests” for U.S. federal income tax purposes. The Holdings Incentive Plan is administered by the Board of Holdings. The Holdings Board has the authority to administer and interpret the Holdings Incentive Plan, to determine the individuals who are eligible for a grant of the Profits Interests, to determine, alter, amend, modify or waive the terms and conditions of any award of Profits Interests, and to prescribe the purchase price or Hurdle Amount (as defined in the Holdings Incentive Plan) applicable to any award of Profits Interests. During fiscal year 2024, Mr. Blair, Mr. Adams, and Ms. D’Amato each received a grant of Profits Interests, as follows: Mr. Blair received a grant of 1,100,000 Profits Interests, Mr. Adams received a grant of 863,700 Profits Interests, and Ms. D’Amato received a grant of 250,000 Profits Interests. 50% of such Profits Interests are subject to time-based vesting, vesting annually in substantially equal installments over four years on the first four anniversaries of the applicable vesting commencement date (i.e., July 10, 2023 for Mr. Adams, August 30, 2023 for Mr. Blair, and December 18, 2023 for Ms. D’Amato), subject to continued employment through each such vesting date. The remaining 50% of such Profits Interests are subject to performance-based vesting, and will vest as follows: (i) 33% if, upon the consummation of a Change of Control of Holdings, Ignite Aggregator LP, the vehicle through which Apax Partners holds its investment in TCO Group Holdings, achieves a multiple on invested capital, as calculated pursuant to the Second Amended and Restated Limited Partnership Agreement of TCO Group Holdings (“MOIC”) equal to at least 2x; and (ii) 100% if, upon the consummation of a Change of Control, Ignite Aggregator LP achieves a MOIC equal to at least 2.5x, in each case, subject to continued employment through the date of such Change of Control. None of the performance-based Profits Interests will vest if Ignite Aggregator LP achieves a MOIC less than 2x as of a Change of Control. The time-based vesting Profits Interests are subject to (A) pro-rata vesting upon a termination without “Cause,” due to death or disability, or for “Good Reason” (each as defined in the applicable employment agreement) that, in each case, occurs prior to the one-year anniversary of the applicable vesting commencement date, and (B) 100% acceleration upon a Change of Control of Holdings, subject to continued service through the date of such Change of Control. The performance-based vesting Profits Interests will remain eligible to vest following a termination without “Cause,” due to death or disability, or for “Good Reason” that, in each case, occurs within the 120-day period preceding the execution of a definitive agreement that ultimately results in such Change of Control. A “Change of Control” of Holdings is generally defined as (a) the sale of all or substantially all of the assets (including shares of common stock of the Company) of Holdings and its subsidiaries on a consolidated basis to unaffiliated parties, (b) a merger, reorganization, consolidation or other similar corporate transaction of Holdings as a result of which, unaffiliated parties beneficially own a majority of the outstanding voting securities, and rights to the majority of the residual economic interests in the common equity, of a successor entity, or (c) the acquisition of a majority of the outstanding voting securities, and rights to the majority of the residual economic interests in the common equity, of Holdings by unaffiliated parties.

  23. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control Severance Benefits We are party to employment agreements with all of our Named Executive Officers which among other terms and conditions, set forth each Named Executive Officer’s initial annual base salary and target annual bonus opportunity (with the rate of each for fiscal year 2024 set forth above) and provide for at-will employment, subject to the severance entitlements described below. The employment agreements provide that, upon termination of the Named Executive Officer’s employment by the Company for any reason other than for “Cause,” or by the Named Executive Officer for “Good Reason,” each as defined therein and summarized below, subject to the Named Executive Officer’s (a) execution, delivery and non-revocation of a general release of claims in favor of the Company and (b) continued compliance with restrictive covenants (as further described below), the Named Executive Officer is entitled to the following severance benefits: For Mr. Blair, such severance benefits consist of (i) an amount equal to 2x Mr. Blair’s (x) base salary plus (y) target annual bonus for the year in which such termination occurs, payable in substantially equal installments over the 24-month period following termination; and (ii) continued payment of premiums required to be paid for his continued participation in the Company’s health care benefit plan for a period of 18 months following termination, unless Mr. Blair becomes employed by another company and eligible for coverage under such company’s health care plans. For Mr. Adams and Ms. D’Amato, such severance benefits consist of (i) an amount equal to 1x the applicable executive’s (x) base salary plus (y) target annual bonus for the year in which such termination occurs, payable in substantially equal installments over the 12-month period following termination; and (ii) continued payment of premiums required to be paid for the applicable executive’s continued participation in the Company’s health care benefit plan for a period of 12 months following termination, unless the applicable executive becomes employed by another company and eligible for coverage under such company’s health care plans. Under the Named Executive Officer’s employment agreements, “Cause” generally means any of the applicable executive’s: (i) failure to perform his or her duties and responsibilities to the Company or any of its affiliates that are consistent with such executive’s title and authorities; (ii) material breach of any of the provisions of the employment agreement or any other written agreement between such executive and the Company or any of its affiliates, resulting in material harm to the Company or any of its affiliates; (iii) material breach of any fiduciary duty that such executive has to the Company or any of its affiliates; (iv) gross negligence, intentional misconduct or unethical or improper behavior resulting in material harm to the business, interests or reputation of the Company or any of its affiliates; (v) commission of a felony or other crime involving moral turpitude; (vi) commission of conduct involving fraud, embezzlement, sexual harassment, material misappropriation of property or other substantial misconduct with respect to the Company or any of its affiliates; (vii) intentional or willful failure to comply with applicable PACE, Medicare or Medicaid rules or regulations; or (viii) failure to comply with the Company’s Code of Conduct or Corporate Compliance Program. Under the Named Executive Officer’s employment agreements, “Good Reason” generally means the occurrence of any of the following without the applicable executive’s written consent: (i) a material reduction in such executive’s base salary (unless such reduction affects all similarly situated employees of the Company on a proportionate basis); (ii) a requirement that such executive relocate to a location more than 50 miles from the location where such executive is then providing services (provided, that, a relocation shall not include: (A) such executive’s travel for business in the course of performing his duties for the Company or any of its affiliates, (B) such executive working remotely or (C) for Messrs. Blair and Adams, the Company or any of its affiliates requiring such executive to report to the office within their principal place of employment (instead of working remotely)); (iii) a material diminution in the nature or scope of such executive’s duties, authority and/or responsibilities; or (iv) a material breach by the Company of (A) any of the terms of the applicable employment agreement or (B) any other material written agreement between the Company and such executive. Pursuant to their applicable employment agreement, each Named Executive Officer is subject to non-competition, non-interference, non-solicitation and non-hire covenants during employment and for 24 months (in the case of Mr. Blair) or 12 months (in the case of Mr. Adams and Ms. D’Amato) following termination, as well as perpetual confidentiality and assignment of inventions covenants (provided that, with respect to Ms. D’Amato, the non-competition covenant will not restrict her practice of law following termination). In addition, the employment agreements for Messrs. Blair and Adams provide for a perpetual non-disparagement covenant (which is mutual for Mr. Adams), and Ms. D’Amato’s attached form of release agreement includes a mutual non-disparagement covenant. Profits Interests The time-based vesting Profits Interests granted to our Named Executive Officers in fiscal year 2024 are subject to (A) pro-rata vesting upon a termination without “Cause,” due to death or disability, or for “Good Reason” that, in each case, occurs prior to the one-year anniversary of the applicable vesting commencement date, and (B) 100% acceleration upon a Change of Control of Holdings, subject to continued service through the date of such Change of Control. The performance-based vesting Profits Interests will remain eligible to vest following a termination without “cause,” due to death or disability, or for “good reason” that, in each case, occurs within the 120-day period preceding the execution of a definitive agreement that ultimately results in such Change of Control. Stock Options and RSUs Pursuant to Mr. Blair’s applicable award agreements, upon a Change in Control of the Company (as defined in the Incentive Plan), any of his outstanding time-vesting stock options and RSUs will accelerate and fully vest, subject to his continued employment through the date of such Change in Control; provided, that any of Mr. Blair’s outstanding awards granted under the Incentive Plan remain subject to the terms and conditions of the Incentive Plan, which provides that any outstanding awards that are assumed or substituted in connection with such Change in Control will not accelerate and vest unless Mr. Blair also incurs a termination without “cause” within two years following such Change in Control.

  24. Director Compensation

    Director Compensation For fiscal year 2024, our non-employee directors, other than directors affiliated with the Principal Shareholders, received the following compensation: (i) an annual cash payment in the amount of $100,000, paid quarterly, in respect of service as a member of the Board and its committees; (ii) if applicable, each chairperson of a committee is entitled to an additional annual cash payment in the amount of $20,000, paid quarterly; and (iii) if applicable, the Chair of the Board is entitled to an additional annual cash payment of $100,000 per year, paid quarterly. Also, Mses. Fontneau and Sparks and Mr. Carlson were each eligible to receive an annual equity award with a grant date fair value of $100,000 in respect of their fiscal year 2024 service, provided in the form of RSUs settled in shares of common stock of the Company, which were tied to their appointment dates. However, due to administrative error, Mr. Carlson did not receive such annual equity award on the originally intended grant date, and in satisfaction of such award, Mr. Carlson was granted 13,334 fully vested shares of our common stock on September 3, 2024, which represents the number of RSUs he would have received on such originally intended grant date. Starting in fiscal year 2025, all of our non-employee directors, other than directors affiliated with the Principal Shareholders, will receive an annual incentive equity award, with a grant date fair value of $100,000, provided in the form of RSUs settled in shares of common stock of the Company, which will generally vest in full on the first anniversary of the grant date, subject to the director’s continued service on the Board through such vesting date; provided, that for Mr. Carlson and Mses. Fontneau and Sparks, their annual RSU awards in respect of fiscal year 2025 (which were granted on September 3, 2024) will vest as follows: (a) for Mr. Carlson, such RSUs will fully vest on June 30, 2025, (b) for Ms. Fontneau, such RSUs will fully vest on March 29, 2025, and (c) for Ms. Sparks, such RSUs will fully vest on August 14, 2025. We also reimburse our non-employee directors for their business expenses incurred in connection with their performance of services. The table below provides the compensation amounts for our non-employee members of the Board for fiscal year 2024.

  25. 2024 Fiscal Year Director Compensation Table

    2024 Fiscal Year Director Compensation Table

  26. 2024 Fiscal Year Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | | John Ellis Bush | 100,000 | — | 100,000 | | James Carlson | 200,000 | — | 200,000 | | Patty Fontneau | 100,000 | — | 100,000 | | Ted Kennedy, Jr. | 100,000 | — | 100,000 | | Teresa Sparks(2) | 120,000 | 100,000 | 220,000 | | Marilyn Tavenner | 120,000 | — | 120,000 | | Richard Zoretic | 100,000 | — | 100,000 | | Sean Traynor(3)(4) | — | — | — | | Andrew Cavanna(4) | — | — | — | | Tom Scully(4) | — | — | — |

  27. 2024 Fiscal Year Director Compensation Table

    | (1) Amounts in this column reflect the aggregate grant date fair value of the RSUs granted to certain of our non-employee directors in fiscal year 2024, as computed in accordance with FASB ASC Topic 718. See Note 10 to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024 for a discussion of the assumptions made in the valuation of these awards. As of June 30, 2024, certain of our non-employee directors held outstanding stock awards as of such date in the following amounts: Ms. Sparks – 17,362 RSUs, which fully vested on August 14, 2024. As of June 30, 2024, certain of our non-employee directors held outstanding Profits Interests under the Holdings Incentive Plan as of such date in the following amounts: Mssrs. Kennedy and Zoretic and Ms. Tavenner - 91,000 Profits Interests, which vested 25% on each of the first four anniversaries of the applicable date of grant (i.e., September 22, 2020), subject to continued service. |

  28. 2024 Fiscal Year Director Compensation Table

    | (2) Ms. Sparks was appointed as a member of the Board effective August 14, 2023. |

  29. 2024 Fiscal Year Director Compensation Table

    | (3) Mr. Traynor resigned from his position as a member of the Board effective August 8, 2023. |

  30. 2024 Fiscal Year Director Compensation Table

    | (4) As affiliates of our Principal Shareholders, Mr. Cavanna, Mr. Scully and Mr. Traynor received no compensation for service as directors. |