DEF 14A of Astronics Corp
Filed Apr 9, 2025 · FY20240001140361-25-013039
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
| | THE BOARD RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES. Nominees for Director Nominated by the Board of Directors for Terms Expiring in 2026 |
New Board Developments since the 2024 Proxy Statement
New Board Developments since the 2024 Proxy Statement On February 6, 2025, the Board of Directors increased the size of the Board from eight to nine directors and appointed Ms. Fay West as a member of the Board of Directors by unanimous consent.
Election of Directors
Election of Directors Astronics Corporation’s By-Laws, as amended, provide that the Board of Directors shall be composed of not less than three nor more than nine persons, as determined by the Board of Directors. Currently, the Board includes nine members, each of whom is elected at each annual meeting of shareholders and who serve for a term of one year or until his or her successor is duly elected and qualified. Unless instructions to the contrary are received, it is intended that the shares represented by proxies will be voted for the election as Directors of Robert T. Brady, Jeffry D. Frisby, Peter J. Gundermann, Warren C. Johnson, Robert S. Keane, Neil Y. Kim, Mark Moran, Linda G. O’Brien and Fay West, each of whom has been previously elected by Astronics Corporation shareholders at the 2024 Annual Meeting of Shareholders, other than Ms. West. Ms. West was recommended to the Nominating/Governance Committee for consideration as a director by a non-management director, and the Nominating/Governance Committee subsequently recommended to our Board of Directors Ms. West’s appointment as a director. If any of these nominees should become unavailable for election for any reason, it is intended that the shares represented by the proxies solicited herewith will be voted for such other person as the Board of Directors shall designate. The Board of Directors has no reason to believe that any of these nominees will be unable or unwilling to serve if elected to office.
DIRECTOR NOMINEES
DIRECTOR NOMINEES Included in the information below are current directors and/or director nominees of the Company who are presently serving, or have served during the preceding five years, on boards of directors of other publicly traded companies.
Peter J. Gundermann, 62
Peter J. Gundermann, 62 Chairman of the Board, Director, President and Chief Executive Officer of the Company; Director since 2001 Peter J. Gundermann has been a director of Astronics since 2001 and has held the position of President and Chief Executive Officer of the Company since 2003. Mr. Gundermann was named Chairman of the Board in June 2019. Mr. Gundermann had previously served as the President of Astronics’ Aerospace and Defense subsidiaries from 1991 until his appointment as President and Chief Executive Officer of the Company in 2003 and has been with the Company in other capacities since 1988. He holds a B.A. in Applied Mathematics and Economics from Brown University and earned an M.B.A. from Duke University.
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS
| Name | Fees Earned or Paid in Cash | Restricted Stock Unit Awards(4) | Total | | Robert T. Brady(1) | $80,000 | $120,003 | $200,003 | | Jeffry D. Frisby(1) | $80,000 | $120,003 | $200,003 | | Peter J. Gundermann(2) | — | — | — | | Warren C. Johnson(1) | $80,000 | $120,003 | $200,003 | | Robert S. Keane(1) | $80,000 | $120,003 | $200,003 | | Neil Kim(1) | $80,000 | $120,003 | $200,003 | | Mark Moran(1) | $80,000 | $120,003 | $200,003 | | Linda O’Brien(1) | $80,000 | $120,003 | $200,003 | | Fay West(3) | — | — | — |
COMPENSATION OF DIRECTORS
| (1) In 2024, Ms. O’Brien and each of Messrs. Brady, Frisby, Johnson, Keane, Kim and Moran were awarded 6,346 restricted stock units under the 2017 LTIP. Each restricted stock unit represents the right to receive, at settlement, one share of Common Stock. The restricted stock units issued to Ms. O’Brien and Messrs. Brady, Frisby, Johnson, Keane, Kim and Moran vested in full six months from the grant date on August 22, 2024, on which date Ms. O’Brien and each of Messrs. Brady, Frisby, Johnson, Keane, Kim and Moran were issued 6,346 shares of Common Stock. At December 31, 2024, Messrs. Brady, Frisby, Johnson and Kim had options to purchase 15,000; 8,000; 8,000 and 8,000 shares of Common Stock, respectively, and 4,053; 1,200; 1,200 and 1,200 shares of Class B Stock, respectively. The exercise price is 100% of the fair market value on date of grant. As of December 31, 2024, Messrs. Keane and Moran and Ms. O’Brien did not have any options to purchase shares of Common Stock or Class B Stock. |
COMPENSATION OF DIRECTORS
| (2) Mr. Gundermann receives no separate compensation for his service as a director of the Company. |
COMPENSATION OF DIRECTORS
| (3) Ms. West did not join the Board until February 2025 and thus did not receive any compensation in 2024. At December 31, 2024, Ms. West did not have any options to purchase shares of Common Stock or Class B Stock. |
COMPENSATION OF DIRECTORS
| (4) The total fair value of the award is determined under generally accepted accounting principles used to calculate the value of equity awards for purposes of the Company’s financial statements as described in Note 16 to the audited financial statements in Astronics Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 5, 2025. The amounts do not reflect the actual amounts realized by the director. |
Potential Dilution
| • | Shares to be issued on exercise or settlement of outstanding equity awards under the Option Plans are not calculated for net settlement based upon appreciation of the fair market value at the time of exercise and, where applicable, mandatory tax withholdings for employees. As a result, the potential dilutive effect is expected to be less. |
Annual Bonus
Annual Bonus The Compensation Committee has the authority to award discretionary annual incentive bonuses to the Company’s executive officers. Annual incentive bonuses are intended to compensate officers for achieving financial, strategic and operational success. Bonuses are not tied to specific, objective targets such as achieving a particular profit level. The Compensation Committee considers a number of factors in determining bonuses. Factors considered include profitability, sales growth over the most recent three-year period, the performance of the individual in the view of the Compensation Committee, comparisons to external broad-based compensation of similar size and industry and available information with respect to the aerospace and defense industry. Bonuses are not capped. Bonuses are reviewed and approved by the Compensation Committee. In appropriate circumstances, the Compensation Committee considers the recommendations of the Company’s Chief Executive Officer for executive officers other than himself. In 2022, no annual bonuses were paid due to the financial performance of the Company as it and the aerospace industry continued to recover from the impact of the COVID-19 pandemic. For 2023, the Board of Directors determined to pay out the bonus earned as stock bonuses, rather than cash, to Named Executive Officers and key employees. These stock bonuses were issued in 2024. Bonuses for 2024 were paid in cash. For 2024, bonus amounts were determined based on the average annual sales growth over the most recent three-year period.
Long-Term Incentives
Long-Term Incentives The Company believes that long-term performance is achieved through an ownership culture that incentivizes its executive officers through the use of stock-based awards. The Company’s 2017 LTIP was established to provide certain of the Company’s employees, including its executive officers, with incentives to help align those employees’ interests with the long-term interests of the Company’s shareholders. The Compensation Committee believes that the use of stock-based awards is an important element of achieving its compensation goals. The Company’s broad-based Employee Stock Purchase Plan, its prior stock option plans, and the LTIP have provided the principal methods for its executive officers to acquire equity or equity-linked interests in the Company. The proposed Amendment to the 2017 LTIP to be submitted to a vote of shareholders at the Annual Meeting is consistent with these objectives.
Amended and Restated 2017 Long Term Incentive Plan
Amended and Restated 2017 Long Term Incentive Plan In May 2017, the 2017 Long Term Incentive Plan was approved by our shareholders, providing for the grant of 1,757,040 shares of stock-based awards. This amount included 757,040 shares previously available for issuance under the 2005 Director Stock Option Plan and the 2011 Stock Option Plan, plus an additional 1,000,000 shares. In May 2021, the Amended and Restated 2017 Long Term Incentive Plan was approved by our shareholders, providing for an increase in the number of shares of stock with respect to which awards may be issued under the 2017 LTIP from 1,757,040 to 3,144,774. The 2017 LTIP provides a flexible framework that permits the development and implementation of a variety of stock-based incentives which enables the Company to base awards on key performance metrics as well as to further align its long-term incentive compensation with peers and shareholder interests. The Compensation Committee is the administrator of the 2017 LTIP.
Options
Options The 2017 LTIP authorizes the Company to grant options to purchase shares of Common Stock to its employees. Prior to approval of the 2017 LTIP, the Company issued options to executive officers and key employees under its 2011 Stock Option Plan. No new issuances will be made under the 2011 Stock Option Plan. The goal of stock options is to create long-term incentives for key employees to maximize future performance of the Company. Stock option grants generally are made annually or at the commencement of employment. Stock options awarded to employees that vest solely on the basis of time may not vest more quickly than ratably over three years from the date of grant, except in certain circumstances such as death, disability, retirement, termination of employment due to workforce reduction or job elimination, change in control or in connection with the establishment of terms and conditions of employment necessary for recruitment or as a result of a business combination or acquisition. Recipients may not dispose of any shares acquired pursuant to an exercise of stock options until a date which is at least two years from the date of grant of the stock option and at least one year after the date of exercise of the stock option. The Compensation Committee reviews and approves equity awards to executive officers based upon a review of competitive compensation data, its expectation of future individual performance, a review of each executive’s existing long-term incentives and retention considerations. Periodic stock option grants are made at the discretion of the Compensation Committee to eligible employees and, in appropriate circumstances, the Compensation Committee considers the recommendations of the Company’s Chief Executive Officer for executives other than himself. The Compensation Committee’s practice has generally been to award options at its December meeting. In December 2024, Mr. Gundermann was awarded stock options under the 2017 LTIP in the amounts indicated in the section entitled “Grants of Plan-Based Awards” on page 52 below. Stock options granted by the Company have an exercise price equal to the fair market value of the Common Stock on the day of grant and generally expire 10 years after the date of grant. The stock options awarded in December 2024 straight-line vest 33-1/3% per annum based on continued employment. Option award agreements provide for a holding period for shares acquired upon exercise of two years from the date of grant and at least one year after the date of exercise.
Restricted Stock Units
Restricted Stock Units In 2024, the Company issued performance-based restricted stock units (“RSUs”) to Named Executive Officers and certain key management employees and time-based RSUs to key employees. RSUs awarded to employees that vest solely on the basis of passage of time may not vest more quickly than ratably over three years from the date of grant, except in certain circumstances such as death, disability, retirement, termination of employment due to workforce reduction or job elimination, change in control or in connection with the establishment of terms and conditions of employment necessary for recruitment or as a result of a business combination or acquisition. Recipients of RSUs may not sell or otherwise dispose of the shares issued upon settlement of RSUs until six months following the date of issuance of such shares. The Compensation Committee’s practice has been to award RSUs at its February meeting when the audit for the prior fiscal year is typically substantially complete. In February 2024, the Company issued performance-based RSUs to Messrs. Gundermann, Burney, Peabody and Mulato and Ms. Hedges in the amounts indicated in the section entitled “Grants of Plan-Based Awards” on page 52 below. The performance criteria for issuance of such awards is based on the Company’s average annual Adjusted EBITDA for the period of January 1, 2024 through December 31, 2026. Adjusted EBITDA is defined as the Company’s earnings before interest, taxes, depreciation, amortization and equity-based compensation, adjusted by the Compensation Committee in its sole discretion for any extraordinary, unusual or nonrecurring events, including, but not limited to insurance proceeds, legal settlements, litigation-related expenses impairments or unique investments in research and development projects. For purposes of determining the vesting of the performance- based RSUs issued in 2024, the target number of RSUs will be earned if the Company’s mathematical average annual Adjusted EBITDA for the performance period of January 1, 2024 to December 31, 2026 is less than 15%, but at least equal to 10%, of the Company’s mathematical average annual revenue for the performance period. If the average annual Adjusted EBITDA is less than 10% of the average annual revenue for the performance period, 50% of the target number of RSUs will be earned. If the average annual Adjusted EBITDA is greater than or equal to 15% of the average annual revenue for the performance period, 150% of the target number of RSUs will be earned. For the RSUs awarded to Messrs. Gundermann, Burney, Mulato and Peabody in February 2022, the average annual Adjusted EBITDA was less than 10% of the average annual revenue for the performance period of January 1, 2022 to December 31, 2024. As such, 75% of the target number of RSUs was earned. Ms. Hedges was awarded time-based rather than performance based RSUs in 2022.
Employment Agreements; SERPs
Employment Agreements; SERPs The Company has entered into an Employment Termination Benefits Agreement with each of Messrs. Gundermann, Burney and Peabody, as described on page 57 below. In addition, as described in the “Pension Benefits” section beginning on page 55 below, Mr. Gundermann is a participant in the SERP, while Messrs. Burney and Peabody are each participants in the SERP II. The Company has not entered into an Employment Termination Benefits Agreement with Ms. Hedges or Mr. Mulato. Neither Ms. Hedges nor Mr. Mulato are participants in the SERP or SERP II.
Timing Policies and Practices Regarding Equity Awards
Timing Policies and Practices Regarding Equity Awards We do not grant equity awards in anticipation of the release of material nonpublic information, and we do not time the release of material nonpublic information based on the grant dates for equity awards or for the purpose of affecting the value of executive compensation. Furthermore, we do not take material nonpublic information into account when determining the timing and terms of such equity awards. In 2024, we did not grant new stock option awards or new stock appreciation rights awards to our named executive officers during the time period outlined in Item 402(x) of Regulation S-K. The Compensation Committee typically grants stock option awards annually during its December meeting and typically grants performance-based RSU awards annually during its February meeting.
Distinguishing “Awarded” Pay from “Reported” Pay
| Name and Principal Position | Year | Salary | Bonuses(1) | Stock Awards(2) | Option Awards(3) | All Other Compensation | Total | | Peter J. Gundermann, President and Chief Executive Officer | 2024 | $636,300 | $914,763 | $500,170 | $799,690 | $72,070(4) | $2,922,993 | | | 2023 | $606,262 | $385,213 | $200,405 | $800,406 | $48,778 | $2,041,064 | | | 2022 | $588,604 | — | $200,010 | $800,000 | $51,713 | $1,640,327 | | David C. Burney, Former Executive Vice President- Finance and Chief Financial Officer | 2024 | $396,064 | $459,771 | $450,058 | — | $62,389(5) | $1,368,282 | | | 2023 | $377,204 | $192,397 | $130,152 | $50,381 | $37,492 | $787,626 | | | 2022 | $366,217 | — | $130,176 | $150,054 | $38,215 | $684,662 | | Nancy L. Hedges, Vice President, Chief Financial Officer and Treasurer(6) | 2024 | $296,000 | $343,612 | $95,004 | — | $15,234(7) | $749,850 | | James F. Mulato, Executive Vice President and President of Test Segment(8) | 2024 | $388,723 | $451,156 | $350,781 | — | $38,063(9) | $1,228,723 | | | 2023 | $370,213 | $188,582 | $170,085 | $50,381 | $30,704 | $809,965 | | | 2022 | $359,430 | — | $170,178 | $200,072 | $30,025 | $759,705 | | Mark A. Peabody, Executive Vice President and President of Aerospace Segment | 2024 | $536,152 | $622,419 | $300,669 | — | $17,250(10) | $1,476,490 | | | 2023 | $510,261 | $260,322 | $160,472 | $50,381 | $9,900 | $991,336 | | | 2022 | $495,399 | — | $160,008 | $150,054 | $9,150 | $814,611 |
Summary Compensation Table
Summary Compensation Table The following table sets forth the cash compensation as well as certain other compensation earned by the Company’s Named Executive Officers during the years ended December 31, 2024, 2023 and 2022. Such amounts do not reflect actual cash received by the Named Executive Officers in 2024, 2023 or 2022. Amounts reflected under the “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” are primarily the result of a decrease from the prior year in the discount rate applied to calculate the present value of such benefits. No payments were made and no changes were made under the SERP or SERP II except that the early retirement decrement for Mr. Burney was eliminated effective December 31, 2024 in connection with his announced retirement effective January 3, 2025.
Summary Compensation Table
| Name and Principal Position | Year | Salary | Bonuses(1) | Stock Awards(2) | Option Awards(3) | Changes in Pension Value and Non-Deferred Compensation Earnings(4) | All Other Compensation | Total | | Peter J. Gundermann, President and Chief Executive Officer | 2024 | $636,300 | $914,763 | $500,170 | $799,690 | — | $72,070(5) | $2,922,993 | | | 2023 | $606,262 | $385,213 | $200,405 | $800,406 | $609,147 | $48,778 | $2,650,211 | | | 2022 | $588,604 | — | $200,010 | $800,000 | — | $51,713 | $1,640,327 | | David C. Burney, Former Executive Vice President- Finance and Chief Financial Officer | 2024 | $396,064 | $459,771 | $450,058 | — | $413,481 | $62,389(6) | $1,781,763 | | | 2023 | $377,204 | $192,397 | $130,152 | $50,381 | $299,247 | $37,492 | $1,086,873 | | | 2022 | $366,217 | — | $130,176 | $150,054 | — | $38,215 | $684,662 | | Nancy L. Hedges, Vice President, Chief Financial Officer and Treasurer(7) | 2024 | $296,000 | $343,612 | $95,004 | — | — | $15,234(8) | $749,850 | | | 2023 | | | | | | | | | | 2022 | | | | | | | | | James F. Mulato, Executive Vice President and President of Test Segment(9) | 2024 | $388,723 | $451,156 | $350,781 | — | — | $38,063(10) | $1,228,723 | | | 2023 | $370,213 | $188,582 | $170,085 | $50,381 | — | $30,704 | $809,965 | | | 2022 | $359,430 | — | $170,178 | $200,072 | — | $30,025 | $759,705 | | Mark A. Peabody, Executive Vice President and President of Aerospace Segment | 2024 | $536,152 | $622,419 | $300,669 | — | — | $17,250(11) | $1,476,490 | | | 2023 | $510,261 | $260,322 | $160,472 | $50,381 | $423,688 | $9,900 | $1,415,024 | | | 2022 | $495,399 | — | $160,008 | $150,054 | — | $9,150 | $814,611 |
Summary Compensation Table
| (1) The amounts in the “Bonus” column for 2023 reflect bonuses paid as stock bonuses using Common Stock under the Company’s 2017 LTIP. The stock bonuses were issued on March 1, 2024 at a price per share of $19.17. The bonus for 2024 was paid in cash. |
Summary Compensation Table
| (2) The amounts reported in the “Stock Awards” column reflect the fair value of restricted stock units (“RSUs” ) on the grant date of the award. The total fair value of the RSU award is calculated in accordance with FASB ASC Topic 718. The amounts are valued at 100% of the target number of RSUs. The amounts do not reflect the actual amount that may be realized by the executive officers. A discussion of the assumptions used in calculating these values is in Note 16 to the audited financial statements in the Astronics Corporation Annual Report on Form 10-K for the year ended December 31, 2024. |
Summary Compensation Table
| (3) The amounts reported in the “Option Awards” column reflect the fair value on the grant date of the award. The total fair value of the option award is calculated in accordance with FASB ASC Topic 718. The amounts do not reflect the actual amount that may be realized by the executive officers. A discussion of the assumptions used in calculating these values is in Note 16 to the audited financial statements in the Astronics Corporation Annual Report on Form 10-K for the year ended December 31, 2024. |
Summary Compensation Table
| (4) Represents the annual change in the actuarial present value of accumulated benefits under the Supplemental Retirement Plan (“SERP”) and Supplemental Retirement Plan II (“SERP II”), not actual payments made to the participant or to an account on his behalf. Changes in the actuarial present value of the plans for Messrs. Gundermann and Peabody are due to year over year changes to the actuarial assumptions and service costs and are not the result of modifications to the plans. The change to the actuarial present value of the plan for Mr. Burney is due to his retirement on January 3, 2025 and the elimation of the early retirement decrement under SERP II with respect to Mr. Burney. The actuarial estimate is based on a number of assumptions such as interest rates, retirement age, life expectancy and future wages, and assumes each participant will vest in the benefit and that the plan will continue to exist and pay benefits in the future. The change in the actuarial present value decreased for Messrs. Gundermann and Peabody from 2023 to 2024 for SERP and SERP II participants because of a change in the applied discount rate of 4.79% to 5.48%. The change in the actuarial present value of SERP II increased for Mr. Burney from 2023 to 2024 due to his retirement effective January 3, 2025. Messrs. Gundermann and Peabody had a decrease in Pension Value and Non-Deferred Compensation Earnings of $(403,391) and $(272,307), respectively. |
Summary Compensation Table
| (5) Represents club fees and dues. personal use of Company automobile, contribution to a medical reimbursement plan, personal financial planning and tax return preparation expense, personal use of Company plane of $12,984, gross up for income taxes related to benefits of $19,470 and the contribution to the Company’s Profit Sharing/401K Plan made by the Company in the amount of $17,250. Value of personal use of Company plane is based on an estimated rental rate. |
Summary Compensation Table
| (6) Represents club fees and dues of $20,925, automobile allowance, contribution to a medical reimbursement plan, gross up for income taxes related to benefits in the amount of $14,664 and the contribution to the Company’s Profit Sharing/401K Plan made by the Company in the amount of $17,250. |
Summary Compensation Table
| (7) Ms. Hedges was not a named executive officer in 2023 or 2022. Ms. Hedges is not a participant in the SERP or SERP II. |
Summary Compensation Table
| (8) Represents contribution to the Company’s Profit Sharing/401K Plan made by the Company in the amount of $15,234. |
Summary Compensation Table
| (9) Mr. Mulato is not a participant in the SERP or SERP II. |
Summary Compensation Table
| (10) Represents club fees and dues, automobile allowance of $14,356, gross up for income taxes related to benefits and the contribution to the Company’s Profit Sharing/ 401K Plan made by the Company in the amount of $17,250. |
Summary Compensation Table
| (11) Represents the contribution to the Company’s Profit Sharing/401K Plan made by the Company in the amount of $17,250. |
CEO Pay Ratio
CEO Pay Ratio In accordance with Section 953(b) of the Dodd-Frank Act, Astronics is required to disclose the ratio of the total annual compensation of its CEO (our principal executive officer) to that of its median employee. SEC rules and regulations require disclosure of (i) the median of the annual total compensation of all employees of Astronics, except the CEO, (ii) the annual total compensation of the CEO, and (iii) the ratio of the amount in clause (i) (median Astronics employee compensation) to the amount in clause (ii) (total CEO compensation). Because SEC rules and regulations do not mandate a particular approach to determining the median employee, Astronics Corporation has employed the following approach: Astronics elected to identify its median employee as of December 31, 2023. The median employee was identified by calculating the total cash compensation granted in 2023 to all employees, excluding the CEO, employed as of December 31, 2023. As there were no material changes in the employee population or employee compensation arrangements in 2024, the Company has elected to use the same median employee for purposes of its pay ratio disclosure for 2024. The ratio disclosed below was calculated using the annual total compensation of Mr. Gundermann and of the median employee for 2024. As calculated using the methodology required for the Summary Compensation Table, the total annual compensation of Mr. Gundermann was $2,922,993 and the total annual compensation of the median employee was $64,210. This yields a ratio of 45.52 to 1.
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure As required by Section 953(a) of the Dodd-Frank Act and Item 402(v) of Regulation S-K, the table below includes information to demonstrate the relationship between NEO compensation and certain financial performance measures for fiscal years 2024, 2023, 2022, 2021 and 2020. For additional information about our performance-based pay philosophy and how we align executive compensation with the Company’s performance, refer to the Compensation Discussion and Analysis beginning on page 38.
Pay Versus Performance Disclosure
| Year | Summary compensation table total for PEO(1)(2) | Compensation actually paid to PEO(3) | Average summary compensation table total for non-PEO named executive officers(1)(4) | Average compensation actually paid to non-PEO named executive officers(5) | Value of initial fixed $100 investment based on: | | Net income (Loss) | Average Annual Adjusted EBITDA as % of Average Annual Revenue Over a 3- Year Period(8) | | | | | | | Total shareholder return(6) | Peer group total shareholder return(7) | | | | 2024 | $2,922,992 | $2,547,746 | $1,309,206 | $1,061,486 | $57.08 | $197.02 | $(16,215,000) | 8.1% | | 2023 | $2,650,211 | $3,984,477 | $1,000,337 | $1,225,010 | $62.31 | $157.59 | $(26,421,000) | 4.1% | | 2022 | $1,640,327 | $1,360,850 | $723,885 | $593,112 | $36.85 | $124.79 | $(35,747,000) | 2.4% | | 2021 | $2,452,637 | $2,278,865 | $900,929 | $801,499 | $42.93 | $152.39 | $(25,578,000) | 7.1% | | 2020 | $2,784,517 | $(116,350) | $1,012,628 | $330,482 | $47.33 | $118.40 | $(115,781,000) | 10.6% |
Pay Versus Performance Disclosure
| (1) Mr. Gundermann was our PEO for each year presented. The individuals comprising the non-PEO NEOs for each year presented are listed below. |
Pay Versus Performance Disclosure
| 2024 | 2020-2023 | | David C. Burney | David C. Burney | | Nancy L. Hedges | James S. Kramer | | James F. Mulato | Michael C. Kuehn | | Mark A. Peabody | James F. Mulato | | | Mark A. Peabody |
Pay Versus Performance Disclosure
| (2) The dollar amounts reported are the total compensation reported for Mr. Gundermann for each fiscal year in the “Total” column of the Summary Compensation Table. |
Pay Versus Performance Disclosure
| (3) The dollar amounts reported represent the “compensation actually paid” to Mr. Gundermann as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Gundermann during such fiscal years and are based on valuation assumptions required by the SEC, which may not reflect actual amounts realized at vesting or exercise (as applicable). In accordance with the requirements of Item 402(v) of Regulation S-K, the reported “Total” in the Summary Compensation Table for the applicable year is adjusted to determine the “compensation actually paid” amount as follows: |
Pay Versus Performance Disclosure
| a. | The amount reflected in the “Stock Award” and “Option Award” columns of the Summary Compensation Table with respect to each NEO has been deducted from the Summary Compensation Table Total and substituted with an equity award value for each year calculated by adding or subtracting, as applicable, the following: (i) the year-end fair value of any equity awards granted in the applicable fiscal year that are outstanding and unvested as of the end of such year; (i) the change in fair value from the end of the prior fiscal year of any awards granted in prior fiscal years that are outstanding and unvested as of the end of the applicable fiscal year; and (iii) for awards granted in prior fiscal years that vested in the applicable fiscal year, the amount equal to the change in value as of the vesting date (from the end of the prior fiscal year). The valuation assumptions used to calculate fair values on equity awards do not materially differ from those disclosed at the time of grant. |
Pay Versus Performance Disclosure
| b. | The pension benefit value reported in the “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” column of the Summary Compensation Table for each applicable year is adjusted to account for the aggregate of two components: (i) the actuarially determined service cost for services rendered by Mr. Gundermann during the applicable year (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment during the applicable year that are attributed by the benefit formula to services rendered in periods prior to the plan amendment (the “prior service cost”), in each case, calculated in accordance with U.S. GAAP. |
Pay Versus Performance Disclosure
| c. | The following table discloses the amounts deducted from and added to the total compensation of our principal executive officer in determining our principal executive officer’s compensation actually paid for each fiscal year shown in the pay versus performance table: |
Pay Versus Performance Disclosure
| Year | Summary Compensation Total | Plus/Minus: Change in Pension Value and Non- Qualified Deferred Compensation Earnings | Plus: Pension Service Costs Attributable to the Applicable Year | Minus: Grant Date Fair Value of Equity Awards Granted During Applicable Year | Plus: Year-End Fair Value of Equity Awards Granted During Applicable Year | Plus: Change in Fair Value as of Year-End of Any Prior Year Awards that Remain Unvested as of Year-End | Plus: Change in Fair Value as of the Vesting Date of Any Prior Year Awards that Vested During Applicable Year | Compensation Actually Paid | | 2024 | $2,922,992 | $ — | — | $(1,299,860) | $1,190,754 | $(188,696) | $(77,444) | $2,547,746 | | 2023 | $2,650,211 | $609,147 | — | $(1,000,811) | $1,191,633 | $1,260,507 | $492,084 | $3,984,477 | | 2022 | $1,640,327 | — | — | $(1,000,010) | $979,770 | $(211,354) | $(47,883) | $1,360,850 | | 2021 | $2,452,637 | — | — | $(1,817,509) | $1,689,993 | $(21,241) | $(25,015) | $2,278,865 | | 2020 | $2,784,517 | $1,953,301 | — | $(200,346) | $100,958 | $(613,384) | $(234,793) | $(116,350) |
Pay Versus Performance Disclosure
| (4) The dollar amounts reported represent the average of the amounts reported for the Company’s Named Executive Officers (“NEOs”) as a group (excluding the CEO) in the “Total” column of the Summary Compensation Table in each applicable fiscal year. |
Pay Versus Performance Disclosure
| (5) The dollar amounts reported represent the average amount of “compensation actually paid” to the NEOs as a group (excluding the CEO), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the NEOs as a group (excluding the CEO) during such fiscal years and are based on valuation assumptions required by the SEC, which may not reflect actual amounts realized at vesting or exercise (as applicable). The average total compensation for the NEOs as a group (excluding the CEO) for each year was adjusted using the same methodology described in footnote (2) to determine the average compensation actually paid. |
Pay Versus Performance Disclosure
| d. | The following table discloses the amounts deducted from and added to the average total compensation of our NEOs (excluding the CEO) in determining the average compensation actually paid to our NEOs (excluding the CEO) for each fiscal year shown in the pay versus performance table: |
Pay Versus Performance Disclosure
| Year | Summary Compensation Total | Minus: Change in Pension Value and Non- Qualified Deferred Compensation Earnings | Plus: Pension Service Costs Attributable to the Applicable Year | Minus: Grant Date Fair Value of Equity Awards Granted During Applicable Year | Plus: Year-End Fair Value of Equity Awards Granted During Applicable Year | Plus: Change in Fair Value as of Year-End of Any Prior Year Awards That Remain Unvested as of Year-End | Plus: Change in Fair Value as of the Vesting Date of Any Prior Year Awards That Vested During Applicable Year | Average Compensation Actually Paid | | 2024 | $1,309,206 | $(103,370) | — | $(299,128) | $252,463 | $(66,828) | $(30,857) | $1,061,486 | | 2023 | $1,000,337 | $(183,967) | $21,086 | $(200,647) | $240,741 | $266,103 | $81,357 | $1,225,010 | | 2022 | $723,885 | — | $27,517 | $(320,170) | $220,213 | $(49,583) | $(8,750) | $593,112 | | 2021 | $900,929 | $(3,455) | $38,982 | $(501,639) | $420,935 | $(32,238) | $(22,015) | $801,499 | | 2020 | $1,012,628 | $(455,508) | $44,516 | $(144,327) | $72,736 | $(150,877) | $(48,686) | $330,482 |
Pay Versus Performance Disclosure
| (6) Cumulative total shareholder return “TSR” is calculated using the volume-weighted average stock price starting December 31, 2019 through December 31 of the applicable fiscal year. |
Pay Versus Performance Disclosure
| (7) Represents the peer group TSR using the volume-weighted average stock price starting December 31, 2019 through December 31 of the applicable fiscal year. The peer group used for this purpose is the S&P 500 Index. |
Pay Versus Performance Disclosure
| (8) As required by Item 402(v) of Regulation S-K, the Company has determined that average annual Adjusted EBITDA as a percentage of average annual revenue over a three-year period is the Company Selected Measure, as it is the most important financial performance measure (that is not otherwise disclosed in the table) used to link compensation actually paid to the Company’s NEOs to company performance for the most recently completed fiscal year. “Adjusted EBITDA” is defined as the Company’s earnings before interest, taxes, depreciation, and amortization, adjusted for any extraordinary, unusual or nonrecurring events, including, but not limited to insurance proceeds, legal settlements, impairments or unique investments in R&D projects. |
Comparative Analysis of the Pay Versus Performance Table
Comparative Analysis of the Pay Versus Performance Table The Company’s compensation program is designed to attract and retain executives whose talents and contributions sustain long-term growth by aligning their interests with the drivers of shareholder returns and supporting their achievement of the Company’s primary business goals. The Company considers several performance measures to ensure executives are incentivized to accomplish these objectives, many of which are not presented in the Pay Versus Performance Table. The charts below explain the relationship between the columns presented in the Pay Versus Performance Table.
Comparison of “Compensation Actually Paid” to Company TSR
Comparison of “Compensation Actually Paid” to Company TSR The chart below shows the “compensation actually paid” to Mr. Gundermann and average “compensation actually paid” to the other NEOs as compared to the Company’s cumulative TSR in 2020, 2021, 2022, 2023 and 2024.
Comparison of “Compensation Actually Paid” to Net Income (Loss)
Comparison of “Compensation Actually Paid” to Net Income (Loss) The chart below shows the “compensation actually paid” to Mr. Gundermann and average “compensation actually paid” to the other NEOs as compared to the Company’s Net Income (Loss) for 2020, 2021, 2022, 2023 and 2024. Comparison of “Compensation Actually Paid” to Company-Selected Measure (Average Annual Adjusted EBITDA as a Percentage of Average Annual Revenue Over a Three-Year Period) The chart below shows the “compensation actually paid” to Mr. Gundermann and average “compensation actually paid” to the other NEOs as compared to the Company’s average annual Adjusted EBITDA as a percentage of the Company’s average annual revenue over a three-year period for 2020, 2021, 2022, 2023 and 2024.
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth information with respect to plan-based awards granted in 2024 to the executives named in the summary compensation table. All options and RSUs were granted pursuant to the Company’s 2017 LTIP.
Grants of Plan-Based Awards
| Name | Grant Date(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Award: Number of Shares of Stock or Units | All Other Option Awards: Number of Underlying Options(3) | Exercise Price of Option Awards per Share | Grant Date Fair Value of Stock and Option Awards(4) | | | | Threshold(#) | Target (#) | Maximum (#) | | | | | | Peter J. Gundermann | | | | | | | | | | Options | December 5, 2024 | | | | | 75,800 | $16.55 | $799,690 | | RSUs | February 22, 2024 | 13,225 | 26,450 | 39,675 | | | | $500,170 | | David C. Burney | | | | | | | | | | RSUs | February 22, 2024 | 11,900 | 23,800 | 35,700 | | | | $450,058 | | Nancy L. Hedges | | | | | | | | | | RSUs | February 22, 2024 | 2,512 | 5,024 | 7,536 | | | | $95,004 | | James F. Mulato | | | | | | | | | | RSUs | February 22, 2024 | 9,275 | 18,550 | 27,825 | | | | $350,781 | | Mark A. Peabody | | | | | | | | | | RSUs | February 22, 2024 | 7,950 | 15,900 | 23,850 | | | | $300,669 |
Grants of Plan-Based Awards
| (1) The grant date is the date the Compensation Committee of the Board of Directors meets to approve the awards. |
Grants of Plan-Based Awards
| (2) Represents the potential payout range related to performance-based RSUs awarded to NEOs, subject to achievement of performance targets. The RSUs are earned based upon the Company’s mathematical average annual Adjusted EBITDA as a percentage of the Company’s mathematical average annual revenue for the period beginning January 1, 2024 and ending December 31, 2026. Adjusted EBITDA is defined as the Company’s earnings before interest, taxes, depreciation, amortization and equity-based compensation, adjusted by the Compensation Committee in its sole discretion for any extraordinary, unusual or nonrecurring events, including, but not limited to insurance proceeds, litigation-related expenses, legal settlements, impairments or unique investments in research and development projects. The target number of RSUs will be issued if the average annual Adjusted EBITDA for the performance period is less than 15%, but at least equal to 10%, of the Company’s mathematical average annual revenue for the performance period. |
Grants of Plan-Based Awards
| (3) Represents the number of shares of Common Stock underlying options awarded to the Named Executive Officers on the grant date. The options vest at the rate of 33-1/3% per year commencing on December 5, 2024 and expire 10 years after the date of grant. |
Grants of Plan-Based Awards
| (4) Represents the full grant date fair value calculated in accordance with FASB ASC Topic 718. The amounts do not reflect the actual amounts that may be realized by the executive officers. Assumptions used to calculate these amounts are included in Note 16 of the audited financial statements in Form 10-K for the year ended December 31, 2024. |
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table sets forth information with respect to the executives named in the summary compensation table relating to unexercised stock options, stock that has not vested, and equity incentive plan awards outstanding as of December 31, 2024:
Outstanding Equity Awards at Fiscal Year End
| | Options(1) | | | | Restricted Stock Units | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2) | | Peter J. Gundermann, President and Chief Executive Officer | 13,700 | — | $27.72 | 12/3/2025 | | | 14,750(3) | $235,410 | | | 4,418 | — | $27.72 | 12/3/2025 | | | 13,550(4) | $216,258 | | | 14,460 | — | $31.76 | 12/14/2026 | | | 26,450(5) | $422,142 | | | 2,169 | — | $31.76 | 12/14/2026 | | | | | | | 26,300 | — | $35.61 | 12/12/2027 | | | | | | | 3,945 | — | $35.61 | 12/12/2027 | | | | | | | 34,790 | — | $31.57 | 12/13/2028 | | | | | | | 61,200 | — | $30.04 | 12/9/2029 | | | | | | | 59,340 | 39,560 | $14.45 | 1/22/2031 | | | | | | | 115,800 | — | $11.13 | 12/9/2031 | | | | | | | 83,333 | 41,667 | $9.74 | 12/16/2032 | | | | | | | 27,967 | 55,933 | $15.15 | 12/7/2033 | | | | | | | — | 75,800 | $16.55 | 12/5/2034 | | | | | | David C. Burney, Former Executive Vice President and Chief Financial Officer | 4,100 | — | $27.72 | 12/3/2025 | | | 9,600(3) | $153,216 | | | 1,322 | — | $27.72 | 12/3/2025 | | | 8,800(4) | $140,448 | | | 4,370 | — | $31.76 | 12/14/2026 | | | 23,800(5) | $379,848 | | | 656 | — | $31.76 | 12/14/2026 | | | | | | | 6,350 | — | $35.61 | 12/12/2027 | | | | | | | 953 | — | $35.61 | 12/12/2027 | | | | | | | 8,410 | — | $31.57 | 12/13/2028 | | | | | | | 13,600 | — | $30.04 | 12/9/2029 | | | | | | | 12,150 | 8,100 | $14.45 | 1/22/2031 | | | | | | | 24,500 | — | $11.13 | 12/9/2031 | | | | | | | 17,800 | 8,900 | $9.74 | 12/16/2032 | | | | | | | 2,767 | 5,533 | $15.15 | 12/7/2033 | | | | | | Nancy L. Hedges, Vice President, Chief Financial Officer and Treasurer | 1,400 | — | $27.72 | 12/3/2025 | | | 5,500 | $87,780 | | | 452 | — | $27.72 | 12/3/2025 | | | 5,050 | $80,598 | | | 1,520 | — | $31.76 | 12/14/2026 | | | 5,024(5) | $80,183 | | | 228 | — | $31.76 | 12/14/2026 | | | | | | James F. Mulato, Executive Vice President | 3,300 | — | $30.83 | 12/11/2024 | | | 12,550(3) | $200,298 | | | 1,719 | — | $30.83 | 12/11/2024 | | | 11,500(4) | $183,540 | | | 4,300 | — | $27.72 | 12/3/2025 | | | 18,550(5) | $296,058 | | | 1,387 | — | $27.72 | 12/3/2025 | | | | | | | 6,560 | — | $31.76 | 12/14/2026 | | | | | | | 984 | — | $31.76 | 12/14/2026 | | | | | | | 7,950 | — | $35.61 | 12/12/2027 | | | | | | | 1,193 | — | $35.61 | 12/12/2027 | | | | | | | 11,570 | — | $31.57 | 12/13/2028 | | | | | | | 18,150 | — | $30.04 | 12/9/2029 | | | | | | | 16,200 | 10,800 | $14.45 | 1/22/2031 | | | | | | | 32,700 | — | $11.13 | 12/9/2031 | | | | | | | 23,733 | 11,867 | $9.74 | 12/16/2032 | | | | | | | 2,767 | 5,533 | $15.15 | 12/7/2033 | | | | |
Outstanding Equity Awards at Fiscal Year End
| | Options(1) | | | | Restricted Stock Units | | | | | Name | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2) | | Mark A. Peabody, Executive Vice President | 4,500 | — | $27.72 | 12/3/2025 | | | 11,800(3) | $188,328 | | | 1,451 | — | $27.72 | 12/3/2025 | | | 10,850(4) | $173,166 | | | 4,820 | — | $31.76 | 12/14/2026 | | | 15,900(5) | $253,764 | | | 723 | — | $31.76 | 12/14/2026 | | | | | | | 7,010 | — | $35.61 | 12/12/2027 | | | | | | | 1,052 | — | $35.61 | 12/12/2027 | | | | | | | 9,280 | — | $31.57 | 12/13/2028 | | | | | | | 13,600 | — | $30.04 | 12/9/2029 | | | | | | | 12,150 | 8,100 | $14.45 | 1/22/2031 | | | | | | | 24,500 | — | $11.13 | 12/9/2031 | | | | | | | 17,800 | 8,900 | $9.74 | 12/16/2032 | | | | | | | 2,767 | 5,533 | $15.15 | 12/7/2033 | | | | |
Outstanding Equity Awards at Fiscal Year End
| (1) Except for the options expiring December 9, 2031, December 16, 2032, December 7, 2033, and December 5, 2034, all other options vest in equal increments over five years and expire ten years from the date of grant. The options expiring December 9, 2031, December 16, 2032, December 7, 2033, and December 5, 2034 vest in equal increments over three years and expire ten years from the date of grant. |
Outstanding Equity Awards at Fiscal Year End
| (2) Based on closing price of Common Stock of $15.96 on December 31, 2024. |
Outstanding Equity Awards at Fiscal Year End
| (3) Reflects performance-based RSUs to be earned at the target award level under the award agreements. The award earned will be determined based upon the Company’s mathematical average annual Adjusted EBITDA for the period beginning January 1, 2022 and ending December 31, 2024. All RSUs vested on February 24, 2025. |
Outstanding Equity Awards at Fiscal Year End
| (4) Reflects performance-based RSUs to be earned at the target award level under the award agreements. The award earned will be determined based upon the Company’s mathematical average annual Adjusted EBITDA for the period beginning January 1, 2023 and ending December 31, 2025. |
Outstanding Equity Awards at Fiscal Year End
| (5) Reflects performance-based RSUs to be earned at the target award level under the award agreements. The award earned will be determined based upon the Company’s mathematical average annual Adjusted EBITDA for the period beginning January 1, 2024 and ending December 31, 2026. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table sets forth information with respect to the executives named in the summary compensation table relating to the exercise of stock options, stock appreciation rights and similar rights, and the vesting of stock in connection therewith, in 2024:
Option Exercises and Stock Vested
| | Option Awards | | Stock Award | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | V alue Realized on Vesting(1) | | Peter J. Gundermann, President and Chief Executive Officer | — | — | 9,556 | $180,608 | | David C. Burney, Former Executive Vice President- Finance, Chief Financial Officer and and Treasurer | — | — | 6,217 | $117,501 | | Nancy L. Hedges, Vice President, Chief Financial Officer and Treasurer | — | — | 4,578 | $86,524 | | James F. Mulato, Executive Vice President | — | — | 8,048 | $152,107 | | Mark A. Peabody, Executive Vice President | — | — | 7,663 | $144,831 |
Option Exercises and Stock Vested
| (1) Reflects shares of Common Stock issued in settlement of RSUs on March 1, 2024 at a price of $18.90 per share. |
Pension Benefits
Pension Benefits
Pension Benefits
| Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit ($) | Payment During Last Fiscal Year ($) | | Peter J. Gundermann, President and Chief Executive Officer | Astronics Corporation Supplemental Retirement Plan (SERP) | 37 | $7,965,302 | — | | | SERP-Retiree Medical, Dental and Long-Term Care | 37 | $340,686 | — | | David C. Burney, Former Executive Vice President- Finance, Chief Financial Officer and Treasurer | Astronics Corporation Supplemental Retirement Plan II (SERP II) | 28 | $4,457,402 | — | | Nancy L. Hedges, Vice President, Chief Financial Officer and Treasurer | — | — | | | | James F. Mulato, Executive Vice President | — | — | | | | Mark A. Peabody, Executive Vice President | Astronics Corporation Supplemental Retirement Plan II (SERP II) | 19 | $4,459,324 | — |
Pension Benefits
The Company has two non-qualified supplemental retirement defined benefit plans for certain executives - the Supplemental Retirement Plan (“SERP”) and Supplemental Retirement Plan II (“SERP II”). The SERP targets a retirement benefit based on 65% of the average of the highest consecutive three-year cash compensation, less a participant’s primary Social Security benefit at age 65 and the actuarially determined value of certain contributions made by Astronics to its tax-qualified defined contribution plan on behalf of the participant. The plan is unfunded and has no assets. Except as described below under “Other Potential Post- Employment Benefits”, SERP benefits are payable only to “retirement-eligible” participants, i.e., employees designated to participate in the SERP and each of whom, upon termination of employment, has at least 10 years of continuous service with the Company and (i) has attained age 65, or (ii) has attained age 60 or later with a combined total of age and years of service equal to 90. As of December 31, 2024, Peter J. Gundermann was the only non-retired participant in the SERP. As Mr. Gundermann had attained age 60 and his combined total of age and years of service was at least equal to 90, Mr. Gundermann is retirement eligible. Had Mr. Gundermann retired as of December 31, 2024, the decrement for early retirement would have been $115,574. SERP II was adopted in March 2012. The SERP II targets a retirement benefit based on 50% of the average of the highest consecutive three-year cash compensation. SERP II is unfunded and has no assets. Except as described below under “Other Potential Post-Employment Benefits”, the SERP II benefits are generally payable only to “retirement-eligible” participants, i.e., employees designated to participate in the SERP II and each of whom, upon termination of employment, has at least 10 years of continuous service with the Company and (i) has attained age 65, or (ii) has attained age 60 or later with a combined total of age and years of service equal to 90. As of December 31, 2024, David C. Burney, Mark A. Peabody and James S. Kramer, President of Luminescent Systems, Inc., were the only participants in the SERP II. Mr. Kramer is no longer an NEO of the Company, which is why he is omitted from the tables included in this Proxy Statement. As of December 31, 2024, Mr. Peabody had attained age 65 and as such he would have been retirement eligible. As of December 31, 2024, Mr. Burney had attained age 60 but his combined total of age and years of service was not at least equal to 90. However, upon announcement of his retirement in October 2024, Mr. Burney and the Company entered into an Executive Transition and Retirement Agreement. Pursuant to that agreement, the early retirement decrement provided for by SERP II was eliminated with respect to Mr. Burney and Mr. Burney was treated as though he were age 65 at the time of his retirement for purposes of determining the amount of his SERP II benefit. Mr. Burney retired on January 3, 2025. The assumptions used to calculate the benefit obligation for the SERP and SERP II are: discount rate 5.48%, future average compensation increases of 3.00% per year. The present value of the accumulated benefit is an actuarial calculation that assumes that the plan will remain in force and that participants will remain employed by the Company until age 65 with not less than 10 years of service (as defined) or until age 60 or later with a combined total of age and years of service equal to 90. The assumptions used to calculate the benefit obligation for the SERP-Retiree Medical, Dental and Long-Term Care are: discount rate 5.48%, future average healthcare benefit increases to 5.30% for 2025 and then gradually decreasing to 3.94% in 2070. The present value of the accumulated benefit is an actuarial calculation that assumes that the plan will remain in force and that participants will remain employed by the Company until age 65 with not less than 10 years of service or until age 60 or later with a combined total of age and years of service equal to 90. For purposes of illustration, the following tables show the estimated amounts of annual retirement income that would be payable at the present time under various assumptions as to compensation and years of service to employees who participate in the SERP and SERP IL The amounts presented with respect to the SERP are subject to reduction for Social Security benefits and for-profit sharing benefits earned under the Company’s Profit Sharing/401k Plan. A discount factor applies for retirement-eligible participants who start to receive benefits before attaining age 65.
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation The Company does not have any non-qualified defined contribution or other plan that provides for the deferral of compensation.
SERP & SERP II
SERP & SERP II Mr. Gundermann is a participant in the SERP. Under the terms of the SERP, eligible participants with at least 10 years of continuous service with the Company become 100% vested in and eligible for benefits in the event of an Involuntary Termination (as described below) or a termination upon a Change of Control (as described below). In the event of a Change of Control, a participant who has at least 10 years of continuous service with the Company will become 100% vested in and eligible for benefits under the SERP. A participant who terminates employment on account of death or Disability (as defined in the Company’s tax-qualified defined contribution plan) will also become 100% vested in and eligible for benefits under the SERP. Upon a separation of service due to Involuntary Termination, a participant with at least 10 years of continuous service with the Company will receive a supplemental benefit based upon his or her highest consecutive three-year average cash compensation paid prior to termination of employment. Upon a separation from service due to a termination upon a Change of Control, a participant with at least 10 years of continuous service with the Company will receive a supplemental benefit determined based on the participant’s years of service as of the termination date and using the greater of (A) the highest consecutive three-year average cash compensation paid prior to the Change of Control, or (B) the average of the highest consecutive three-year average cash compensation paid prior to termination of employment. In all cases, the supplemental benefit is subject to adjustment if the payment of the supplemental benefit commences prior to the participant attaining age 65. During the period a participant or his spouse is receiving SERP benefits, the participant and his spouse are entitled to continuing medical, dental and long-term care coverage under the corresponding plan made available to the Company’s current officers (or an equivalent arrangement). Under the terms of the SERP, benefits do not commence until the later of the participant’s termination of employment or the date the participant attains (or would have attained) age 60, when SERP benefits are paid as a monthly life annuity or, if a participant is married, as a joint and 100% survivor annuity. Mr. Gundermann was age 62 on December 31, 2024. Accordingly, if Mr. Gundermann’s employment had terminated on December 31, 2024, any vested SERP benefits would have commenced on such date. If Mr. Gundermann’s employment were to terminate on account of his death, his surviving spouse, if any, would be entitled to a monthly survivor annuity for the remainder of the spouse’s lifetime in the same monthly amount that would have been paid to Mr. Gundermann. The actuarially estimated present value of continued medical, dental, and long-term care coverage is $340,686. Messrs. Burney and Peabody are participants in SERP II. SERP II benefits generally are payable only to “retirement-eligible” participants, i.e., employees designated to participate in the SERP II and each of whom, upon termination of employment, has at least 10 years of continuous service with the Company and (i) has attained age 65, or (ii) has attained age 60 or later with a combined total of age and years of service equal to 90. However, if a participant’s employment terminates on account of his or her death or Disability (as defined in the Company’s qualified 401(k) retirement plan), the participant becomes 100% vested in his or her SERP II benefit. In the event of a 409A Change in Control Event, a participant with at least ten years of continuous service becomes 100% vested in his or her SERP II benefit. Furthermore, in the event of a participant’s Involuntary Termination or a Termination on a Change of Control, a participant with at least 10 years of continuous service will become 100% vested in his or her SERP II benefit. In general, SERP II benefits do not commence until the later of the participant’s termination of employment or the date the participant attains (or would have attained) age 60, when a participant’s SERP II benefit is paid to him or his surviving spouse as a monthly life annuity. However, SERP II provides that upon the occurrence of a 409A Change in Control Event (as described below) a participant with at least 10 years of consecutive service with the Company will be entitled to a lump sum payment of the present value of his or her supplemental benefit determined as of the date of the 409A Change in Control Event. For a participant who has not yet commenced payment of his or her supplemental benefit, the supplemental benefit will be determined based on the participant’s years of service as of the 409A Change in Control Event and using the average of the highest consecutive three-year cash compensation paid prior to the 409A Change in Control Event, instead of the average for the pay paid prior to retirement. A participant who has already commenced receiving payment of the supplemental benefit at the time of the 409A Change in Control Event will be entitled to a lump sum payment of the present value of the remaining supplemental benefit determined as of the 409A Change in Control Event. Except in the case of a Termination on a Change of Control, both SERP and SERP II benefits are contingent on a participant not competing with the Company for the longer of three years after retirement or attainment of age 65. If a participant violates the noncompetition covenant, benefits are suspended during the period the participant is in violation of noncompetition covenant. For purposes of the SERP and SERP II, (i) a “Change of Control” means the transfer, in one or more transactions extending over a period of not more than 24 months, of Common Stock of the Company possessing 25% or more of the total voting power of all shares of Common Stock, where a transfer shall be deemed to occur if shares of Common Stock are either transferred or made the subject of options, warrants, or similar rights granting a third party the opportunity to acquire ownership or voting control of such Common Stock and (ii) an “Involuntary Termination” means a termination of a participant’s employment relationship with the Company, other than for death, disability, retirement, or cause, (A) by or at the instigation of the Company, or (B) by or at the instigation of the participant where the participant’s compensation has been diminished or reduced to a greater extent than any diminution or reduction of the Company’s officers generally. For purposes of SERP II, a “409A Change in Control Event” means the occurrence of one of the following events constituting a “change in control event” within the meaning of Code Section 409A: (i) Any one person, or more than one person acting as a group (“Group”), acquires ownership of stock of the Company that, together with stock previously held by the acquirer, constitutes more than 80% of the total fair market value or total voting power of the Company’s stock. If any one person or Group is considered to own more than 80% of the total fair market value or total voting power of the Company’s stock, the acquisition of additional stock by the same person or Group does not cause a change in ownership; or (ii) A majority of the members of the Company’s Board of Directors is replaced during any 12-month (or shorter) period by directors whose appointment or election is not endorsed by a majority of the members of the Board of the Directors before the date of the appointment or election.
SERP & SERP II
The following table shows potential payments to Messrs. Gundermann, Burney and Peabody under the Employment Termination Benefits Agreements, SERP and SERP II upon death, disability, involuntary termination, involuntary termination following a Change of Control, occurrence of a 409A Change in Control Event, and termination following a 409A Change in Control Event. The amounts shown assume that the termination was effective December 31, 2024, the last business day of the Company’s most recent fiscal year end. The actual amounts to be paid can only be determined at the actual time of a participant’s termination.
SERP & SERP II
| Name | Type of Payment | Death | Disability | Involuntary Termination | Termination on Change of Control | 409A Change in Control Event | Termination on 409A Change in Control Event | | Peter J. Gundermann | Salary Continuation(1) | — | — | — | $1,272,600 | — | $1,272,600 | | | Insurance Coverage(2) | — | — | — | $52,000 | — | $52,000 | | | Club Membership(3) | — | — | — | — | — | $17,880 | | | Automobile | — | — | — | $39,600 | — | $39,600 | | | Vesting of Equity Awards(4) | — | — | — | $1,554,112 | — | | | | SERP Benefit(5) | $7,206,000 | $9,643,000 | $7,495,000 | $7,907,000 | — | — | | | Total | $7,206,000 | $9,643,000 | $7,495,000 | $10,825,312 | — | $1,382,080 | | David C. Burney | Salary Continuation(1) | — | — | — | $396,064 | — | $396,064 | | | Insurance Coverage(2) | — | — | — | $18,000 | — | $18,000 | | | Club Membership(3) | — | — | — | $20,925 | — | $20,925 | | | Automobile | — | — | — | $6,500 | — | $6,500 | | | Vesting of Equity Awards(4) | — | — | — | $321,710 | — | — | | | SERP Benefit(5) | $3,528,000 | $4,457,000 | $3,766,000 | $3,923,000 | $3,814,000 | $3,814,000 | | | Total | $3,528,000 | $4,457,000 | $3,766,000 | $4,686,199 | $3,814,000 | $4,255,489 | | Mark A. Peabody | Salary Continuation(1) | — | — | — | $536,152 | — | $536,152 | | | Insurance Coverage(2) | — | — | — | $32,000 | — | $32,000 | | | Club Membership(3) | — | — | — | — | — | — | | | Automobile | — | — | — | — | — | — | | | Vesting of Equity Awards(4) | — | — | — | $426,866 | — | — | | | SERP Benefit(5) | $4,433,000 | $4,717,000 | $4,727,000 | $4,727,000 | $4,650,000 | $4,650,000 | | | Total | $4,433,000 | $4,717,000 | $4,727,000 | $5,722,018 | $4,650,000 | $5,218,152 |
SERP & SERP II
| (1) Salary continuation under a termination on a change of control would be two years for Mr. Gundermann and one year for each of Messrs. Burney and Peabody. |
SERP & SERP II
| (2) For purposes of determining premiums for medical, life and disability coverage, the premiums paid in fiscal year 2024 are reflected. |
SERP & SERP II
| (3) For purposes of determining other perquisites, the amount paid in 2024 for club dues and auto expenses are reflected. |
SERP & SERP II
| (4) This is the value of outstanding, unvested stock options at December 31, 2024. The value was determined using December 31, 2024 Common Stock market price. |
SERP & SERP II
| (5) Pursuant to the terms of SERP and SERP II, participants become vested in and eligible for benefits in the event of a participant’s death or termination of employment due to Disability, and those participants with at least 10 years of service will become vested in and eligible for benefits in the event of an involuntary termination without cause and a termination on Change of Control. Participants in SERP II become vested in and eligible for benefits in the event of a 409A Change in Control Event. The SERP does not provide for vesting upon a 409A Change in Control Event. All amounts represent the actuarially estimated present value of future benefits, SERP II benefits upon a 409A Change in Control Event are payable in a lump sum. All other SERP and SERP II benefits are payable in equal monthly installments over the life of the executive or the life of the surviving spouse. |