DEF 14A of Ufp Technologies Inc
Filed Apr 26, 2024 · FY20230001171843-24-002290
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The Company currently has a total of seven directors, who were elected to serve until the 2024 Annual Meeting of Stockholders and until their successors have been duly elected and qualified. Each nominee, if elected, will serve for a one-year term ending at the 2025 Annual Meeting of Stockholders and until his or her successor has been duly elected and qualified. Each nominee has indicated his or her willingness to serve, if elected. It is the intention of the persons named as proxies to vote for the election of the nominees. If any of the nominees declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election, the persons named as proxies will vote the proxy for such substitutes, if any, as the present Board of Directors may designate. We have no reason to believe that any of the nominees will be unable to serve if elected. The nominees have not been nominated pursuant to any arrangement or understanding with any person. The following table sets forth certain information with respect to each of our current directors and nominees for director. When used below, positions held with us include positions held with our predecessors and subsidiaries:
ELECTION OF DIRECTORS
| | | | | | Board Committees | | | | Name | Age | Position | Director Since | Year Term Expires/ Will Expire If Elected | Audit Committee | Compensation Committee | Nominating Committee | | R. Jeffrey Bailly | 62 | Chief Executive Officer and Chairman of the Board of Directors | 1995 | 2025 | | | | | Thomas Oberdorf | 66 | Director | 2004 | 2025 | X | | X | | Marc Kozin | 62 | Director | 2006 | 2025 | | X | X | | Daniel C. Croteau† | 58 | Director | 2015 | 2025 | | X | X (Chair) | | Cynthia L. Feldmann | 71 | Director | 2017 | 2025 | X (Chair) | | X | | Joseph John Hassett | 66 | Director | 2022 | 2025 | | X (Chair) | X | | Symeria Hudson | 56 | Director | 2022 | 2025 | X | | X |
ELECTION OF DIRECTORS
______________________________
ELECTION OF DIRECTORS
| † Lead Independent Director |
ELECTION OF DIRECTORS
Mr. Bailly has served as Chairman of the Board since October 2006 and as Chief Executive Officer and a director since January 1, 1995. He joined the Company in 1988 and served as a Division Manager (1989-1992), General Manager Northeast Operations (1992-1994), Vice President of Operations (1994-1995), and as its President (1995-2024). From 1984 through 1988, Mr. Bailly, a certified public accountant, was employed by Coopers & Lybrand. Mr. Bailly is a member of World Presidents’ Organization. As a result of these and other professional experiences, Mr. Bailly possesses particular knowledge and experience in operations, accounting, finance, mergers and acquisitions, and executive leadership within a manufacturing environment that strengthen the Board’s collective qualifications, skills, and experience. Mr. Oberdorf has served as one of our directors since 2004. Presently Mr. Oberdorf is Chief Executive Officer and Chairman of SIRVA, Inc. a leading global provider of moving and relocation services to corporations, consumers, and governments, and has served in that role since 2017. From August 2010 through March 2011, Mr. Oberdorf consulted for Orchard Brands, a multi-channel marketer of men’s and women’s apparel for the 55+ market segment. From December 2008 through August 2010, Mr. Oberdorf was Executive Vice President and Chief Financial Officer of infoGROUP, Inc., which provides business and consumer databases for sales leads and mailing lists, database marketing services, data processing services, email marketing, market research, and sales and marketing solutions. From June 2006 through 2008, Mr. Oberdorf was Senior Vice President, Chief Financial Officer, and Treasurer of Getty Images Inc., the world’s leading creator and distributor of still imagery, footage, and multimedia products, as well as a recognized provider of other forms of premium digital content, including music. From March 2002 through June 2006, Mr. Oberdorf was Senior Vice President, Chief Financial Officer, and Treasurer of CMGI, Inc., a supply chain management, marketing distribution and ecommerce solutions company, where he served as a consultant from November 2001 through February 2002. From February 1999 through October 2001, Mr. Oberdorf was Senior Vice President and Chief Financial Officer of Bertelsmann AG’s subsidiary, BeMusic Direct, a direct-to-consumer music sales company. From January 1981 through January 1999, Mr. Oberdorf served in various capacities at Readers Digest Association, Inc., most recently as Vice President Global Books & Home Entertainment—Finance. As a result of these and other professional experiences, Mr. Oberdorf possesses particular knowledge and experience in manufacturing and accounting, finance, capital markets, and public company experience that strengthen the Board’s collective qualifications, skills, and experience. Mr. Kozin has served as one of our directors since 2006. Mr. Kozin served as President of L.E.K. Consulting from 1997 through 2011 and as a Senior Advisor from 2011 through 2018. In December 2022, Mr. Kozin transitioned to the Board of Healthcare Royalty Holdings from that company’s Strategy Advisory Board where he had been serving as chairperson since January 2013. Previously, Mr. Kozin served on the boards of directors of Endocyte (sold to Novartis), Dyax (sold to Shire), Dicerna (sold to Novo Nordisk), Frequency Therapeutics (merged with Korro), Flex Pharma (merged with Salarius), VBL Therapeutics (merged with Notable), OvaScience (merged with Millendo), Crunchtime! Information Systems, Medical Simulation Corporation, Brandwise, Advizex, Lynx Therapeutics, Inc., Assurance Medical, Inc., and Isleworth Healthcare Acquisition Corporation. As a result of these and other professional experiences, Mr. Kozin possesses particular knowledge and experience in strategic planning and the leadership of complex organizations that strengthen the Board’s collective qualifications, skills, and experience. Mr. Croteau has served as one of our directors since December 2015. Presently Mr. Croteau is a member of the Board of Directors of Corza Medical, a private equity-backed company that specializes in high performance wound closure products, biosurgical products and ophthalmic instrumentation. Mr. Croteau served as the CEO of Corza Medical from January of 2021 to January of 2023, when he retired. His prior company, Surgical Specialties Corporation, in which he served as CEO from 2017 until the Company was acquired in January 2021 and was simultaneously combined with the Tachosil Business from Takeda Pharmaceuticals to form Corza Medical. Mr. Croteau was the Chief Executive Officer of Vention Medical from January 2011 until March 2017, when he resigned in connection with the acquisition of Vention Medical by Nordson Corporation and the divestiture of the Vention Device Manufacturing Services business unit to MedPlast Inc. Vention Medical provides component manufacturing, assembly and design services for disposable medical devices, with fourteen facilities across the United States, Central America, Ireland, and Israel. Prior to assuming his role with Vention Medical, Mr. Croteau was President of FlexMedical from July 2005 through December 2010. FlexMedical is the medical division of Flex (Nasdaq: FLEX), which provides manufacturing and supply chain services for disposable medical devices, medical equipment, and drug delivery devices. From July 2004 to June 2005, Mr. Croteau served as the Executive Vice President and General Manager of Orthopedics for Accellent (renamed Lake Region Medical in 2014 and now a division of Integer), a manufacturer of specialty components and finished medical devices used in orthopedic, cardiology, and surgical devices. From August 1999 to June 2004, Mr. Croteau served as an executive at MedSource Technologies, which was merged in June 2004 with UTI Corporation to form Accellent. As Senior Vice President at MedSource Technologies, Mr. Croteau was responsible for sales, marketing, strategy and acquisitions. Prior to entering the medical device industry in 1999, Mr. Croteau spent the majority of his career in various roles at General Electric and working as a consultant for Booz & Company in Sydney, Australia. Mr. Croteau has a Bachelor of Science degree in mechanical engineering from the University of Vermont and a Master of Business Administration from Harvard Business School. Since May 2019, Mr. Croteau has served on the board of directors of Resonetics, a privately held laser manufacturing services company providing micro components to global medical device companies. From October 2014 to March 2018 and from July 2020 to present, Mr. Croteau also served as a member of the board of directors of Inventus Power, a privately held, global manufacturer of custom battery packs, chargers, and portable power supply systems. As a result of these and other professional experiences, Mr. Croteau possesses knowledge and experience in manufacturing and design, particularly in the medical device industry, that strengthens the Board’s collective qualifications, skills, and experience.
ELECTION OF DIRECTORS
Ms. Feldmann has served as one of our directors since June 2017. In March 2022, Ms. Feldmann joined the board of Alexandria Real Estate Equities, Inc. (NYSE: ARE), an urban office real estate investing trust focused on collaborative life science, agtech and technology campuses in AAA innovation cluster locations. She serves on the Alexandria board’s Science and Technology Committee. Ms. Feldmann served on the board of Frequency Therapeutics, Inc. (Nasdaq: FREQ), a clinical-stage biotechnology company focused on harnessing the body’s innate biology to repair or reverse damage caused by a broad range of degenerative diseases, where she also chaired the Frequency Audit Committee from September 2020 until November 2023 when Frequency was combined with Korro Bio(Nasdaq: KRRO) in a reverse merger. Since 2005, Ms. Feldmann has served on the board of directors of STERIS PLC (NYSE: STE), a provider of infection prevention, decontamination, and health science technologies, products and services. She chairs the STERIS Nominating & Governance Committee and previously chaired and is a current member of the Audit Committee. She also previously served as a member of the STERIS Compliance and Technology Committee. Ms. Feldmann also served from 2003 to 2018 on the board of directors of Hanger Inc. (NYSE: HNGR), a provider of orthotic and prosthetic services and products, and the largest orthotic and prosthetic managed care network in the U.S. Ms. Feldmann served on the Audit Committee, including as Chair of the Audit Committee, the Compensation Committee and the Quality and Technology Committee of Hanger. From 2013 to 2023 Ms. Feldmann served on the board of trustees and was a member and previously chaired the Finance Committee of Falmouth Academy, an academically rigorous, co-ed college preparatory day school for grades 7 to 12. Ms. Feldmann previously served as a director and chair of the Audit Committee and as a member of the Nominating and Governance, Compensation, and Quality and Technology Committees of Heartware International, Inc., a Nasdaq-listed medical device company, from 2012 until its acquisition by Medtronic in August 2016. Previously, Ms. Feldmann had a 29-year career in public accounting; she was Partner at KPMG LLP, holding various leadership roles in the firm’s Medical Technology and Health Care & Life Sciences industry groups and was National Partner-in-Charge of the Life Sciences practice for Coopers & Lybrand (now PricewaterhouseCoopers LLP), among other leadership positions she held during her career there. Ms. Feldmann was a founding board member of Mass Medic, a Massachusetts trade association for medical technology companies, where she also served as treasurer and as a member of the board's Executive Committee during her tenure from 1997 to 2001. Ms. Feldmann is a retired CPA. As a result of these and other professional experiences, Ms. Feldmann possesses particular knowledge and experience in accounting, finance, and capital markets, and public company experience particularly in the medical device industry, that strengthen the Board’s collective qualifications, skills and experience. Mr. Hassett has served as one of our directors since June 2022. Currently Mr. Hassett is Senior Vice President and Chief Transformation Officer for Analog Devices Inc, (“ADI”), prior to his current role he was Senior Vice President and Chief Operating Officer for the Maxim Business from August 2021 through 2023 where he led Analog Devices Inc.’s (“ADI”) strategic and operational focus to integrate Maxim Inc., a $2.5 billion business acquired by ADI in August 2021. Mr. Hassett brings extensive experience as a business leader having run ADI’s largest revenue-generating business, operational expertise leveraging his previous Global Operations & Technology leadership, in addition to his various engineering management roles with ADI. Previously, Mr. Hassett was Senior Vice President, Corporate Integration Management where he led significant efforts in M&A transactions and was responsible for developing strategies that drove the integration of multi-billion-dollar transactions from due diligence to fully integrated entities from December 2020 to July 2021. Previously, Mr. Hassett was Senior Vice President of Industrial and Consumer Group from November 2019 to December 2020 where he led growth initiatives that leveraged its extensive franchise capability in measurement, sensing, and testing. He was Senior Vice President of Global Operations & Technology from May 2015 to November 2019, where he was instrumental in setting and executing our manufacturing strategy and creating a world-class, scalable supply chain to deliver outstanding quality for our customers. Mr. Hassett joined ADI in 1982 after graduating from the University of Limerick where he earned a Bachelor of Science degree in Manufacturing Engineering. Mr. Hassett also holds a Master of Business Administration from the University of Limerick. As a result of these professional experiences, Mr. Hassett possesses particular knowledge and experience in strategic and operational efforts related to merger and acquisition transactions and extensive experience as a global leader in revenue generation, operations, and engineering management that strengthens the Board's collective qualifications, skills, and experience. Ms. Hudson has served as one of our directors since June 2022. Presently, Ms. Hudson is the President and CEO of United Way Miami. Prior to the United Way Miami role, she served as CEO of Chapman Partnership from 2019 to 2022. Ms. Hudson serves as an executive Board Member and on the Governance Committee for MTF Biologics, an Operating Advisor for Revival Healthcare Partners; and Ms. Hudson served as a Board Member for Baxter Foundation. From April 2016 to January 2018, Ms. Hudson was the President of Global Franchises and Innovation for ConvaTec, a $1.8 Billion international medical products and technologies company. From December 2013 to March 2016, Ms. Hudson served in various strategic leadership roles for Baxter, Inc., a $10.7 billion company that develops, manufactures, and markets products providing a broad portfolio of essential renal hospital products including home, acute and in-center dialysis; sterile IV solutions; and infusion systems and devices. Before joining Baxter, Ms. Hudson was the VP of Continuous Improvement & Transformation for Hospira, Inc (now Pfizer), a $4 billion world leader in specialty generic injectable pharmaceuticals, generic acute-care and oncology injectables, integrated infusion therapy devices and medication management solutions. From May 2005 to July 2013, Ms. Hudson served as General Manager of Medication Management Systems, VP of Global Marketing for On-Market Product Strategies Devices, VP of Marketing – US Region Medication Management Systems, and VP of Continuous Improvement and Transformation. Between August 1999 and February 2005, Ms. Hudson served in various leadership roles for Aon Corporation, an $8 billion risk management, retail, reinsurance & wholesale brokerage, claims management, specialty services, and human capital consulting services company; and Household International, an $8 billion financial service provider of consumer loans, credit cards, auto finance, and credit insurance products in the US, UK, and Canada. Ms. Hudson holds a Master of Business Administration from Harvard Business School and a BS from Alabama A&M University. She was recognized as a Top 50 Business Leader of Color in 2015. As a result of these experiences, Ms. Hudson possesses the knowledge and leadership experience, particularly in the medical products and technologies industries that strengthen the Board’s collective qualifications, skills, and experience.
ELECTION OF DIRECTORS
Directors are elected by a plurality of the votes cast by stockholders entitled to vote at the Meeting. Votes withheld and broker non‑votes will not have any effect on this proposal. Accordingly, the nominees receiving the highest number of “for” votes at the Meeting will be elected as directors. Proxies solicited by the Board will be voted “for” the nominees listed above unless a stockholder has indicated otherwise in the proxy. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE NOMINEES LISTED ABOVE AS STANDING FOR ELECTION AT THE MEETING, TO SERVE UNTIL THE ANNUAL MEETING OF OUR STOCKHOLDERS IN 2025, AS DESCRIBED ABOVE.
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
Executive Summary
| • | Performance‑based annual cash incentive bonus; |
Executive Summary
| • | Long‑term incentives in the form of time‑based and time- and performance-based restricted stock unit awards; and |
Governance Developments
| • | No Repricing of Stock Options—Our equity incentive plans prohibit the repricing of stock options or other equity awards without the consent of our stockholders. |
Governance Developments
| • | Buyouts of Underwater Options—Our equity incentive plans prohibit us from buying out underwater stock options from our executive officers. |
Governance Developments
| • | Independent Consultants—The independent consultants who provided benchmarking data with respect to the named executive officers do not provide services to us other than at the direction of the Compensation Committee. |
Philosophy and Objectives of our Compensation Programs
The Compensation Committee believes that the most effective compensation program is one that provides a reasonable level of fixed income through competitive base salaries, equity grants and retirement benefits as well as additional rewards for achieving performance targets. The Compensation Committee also believes that these rewards should be in the form of both cash and non‑cash and have some component subject to time‑based vesting as a retention measure. Incentive cash bonuses are included to drive executive performance by having pay at risk so that a significant portion of potential annual cash compensation is tied to profitability targets. We also include time-based and time- and performance‑based restricted stock unit awards as a significant element of executive compensation, so that the value of a portion of an executive’s compensation is dependent upon both continued, long-term employment and company‑wide performance measures.
Principal Elements of the 2023 Compensation Program
| • | Performance‑based cash incentive bonus; |
Principal Elements of the 2023 Compensation Program
| • | Long‑term incentives in the form of time‑based and time- and performance-based restricted stock unit awards; and |
Principal Elements of the 2023 Compensation Program
| (1) The “Threshold” stock unit awards are subject to time vesting only. The “Target” and “Exceptional” stock unit awards are also subject to financial performance objectives, established by the Compensation Committee as the achievement of 100% and 115%, respectively, of our targeted Adjusted Operating Income for 2023 of $48,227,000. Based upon our achievement of $61,336,342 in actual Adjusted Operating Income for 2023, the Compensation Committee determined that both the Target goal and the Exceptional goal had been fully achieved. Accordingly, each named executive officer earned the number of stock unit awards set forth next to his name in the “Threshold”, “Target” and “Exceptional” columns above. |
Principal Elements of the 2023 Compensation Program
| (2) One‑third of these awards vested on March 1, 2024, one‑third of these awards vest on March 1, 2025 and one‑third of these awards vest on March 1, 2026, provided that we continuously employ the recipient through each such vesting date (except as set forth below). Except in the case of Mr. Bailly, any unvested stock unit awards shall terminate upon the cessation of a recipient’s employment with us. With respect to Mr. Bailly, in the event of a cessation of employment by us without Cause or by Mr. Bailly for Good Reason (as such terms are defined in his employment agreement dated October 8, 2007, as amended (the “Baily Employment Agreement”)), all earned but unvested stock unit awards shall become immediately vested, regardless of such cessation of employment. In the event we undergo a Change in Control (as defined in the stock unit award agreement evidencing the award) all earned but unvested stock unit awards held by each of the named executive officers shall become fully vested immediately prior to the effective date of such Change in Control. |
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary($)(1) | Discretionary Bonus($)(2) | Stock Awards($)(3) | Non‑Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total | | R. Jeffrey Bailly President, Chief Executive Officer | 2023 2022 2021 | $680,000 $650,000 $615,000 | — $600,000 — | $2,761,000 $1,980,200 $1,145,947 | $1,360,000 $944,800 $733,200 | $130,107 $125,557 $125,354 | $4,931,107 $4,300,557 $2,619,501 | | Ronald J. Lataille Senior Vice President, Treasurer, and Chief Financial Officer | 2023 2022 2021 | $440,000 $420,000 $370,000 | — — — | $616,000 $470,300 $308,531 | $376,417 $381,542 $180,000 | $36,053 $26,474 $20,111 | $1,468,470 $1,298,316 $878,642 | | Mitchell C. Rock President | 2023 2022 2021 | $440,000 $420,000 $355,000 | — — — | $616,000 $470,300 $308,531 | $370,417 $384,042 $171,000 | $35,678 $25,921 $19,556 | $1,462,095 $1,300,263 $854,087 | | Christopher P. Litterio General Counsel, Secretary, and Senior Vice President of Human Resources | 2023 2022 2021 | $355,000 $338,000 $293,000 | — — — | $273,000 $220,000 $151,892 | $253,000 $247,321 $128,000 | $31,517 $21,915 $15,551 | $912,517 $827,236 $588,443 | | Jason Holt Vice President and Chief Commercial Officer | 2023 2022 2021 | $325,000 $300,000 $285,000 | — — — | $180,000 $150,000 $113,920 | $189,127 $180,564 $95,000 | $28,658 $19,233 $8,944 | $722,785 $649,797 $502,864 |
SUMMARY COMPENSATION TABLE
_______________________
SUMMARY COMPENSATION TABLE
| (1) On February 6, 2024, based upon the market competitive assessment performed by Aon in 2022, the Compensation Committee approved increases in the base salaries of Messrs. Bailly, Lataille, Litterio and Holt to $705,000, $460,000, $370,000, and $338,000, respectively, effective January 1, 2024. Mr. Rock’s base salary increased to $500,000, effective February 6, 2024, the date of his promotion to President. Last year Mr. Rock served as President of UFP MedTech. |
SUMMARY COMPENSATION TABLE
| (2) Represents a discretionary bonus of $300,000 earned in 2022 that was paid in March 2023, as well as stock options with a value of $300,000. On February 14, 2023, the Compensation Committee granted the stock options to Mr. Bailly to purchase up to an aggregate of 7,935 shares of the Company’s common stock, consisting of 1,792 incentive stock options and 6,143 non-qualified stock options. Each of the stock options has an exercise price of $111.54 per share, a term of five years, and is exercisable as follows: (i) 50% of the shares are exercisable on March 1, 2024 and (ii) the remaining 50% of the shares are exercisable on March 1, 2025. The assumptions used to calculate the value of the stock options are set forth under Note 1(l)—Share Based Compensation, to our consolidated financial statements included in our Annual Report on Form 10 K for the fiscal year ended December 31, 2023. |
SUMMARY COMPENSATION TABLE
| (3) The amounts included in the “Stock Awards” column represent the grant date fair value of stock unit awards granted to the named executive officers. Amounts shown do not reflect compensation actually received by the named executive officer nor does it necessarily reflect the actual value that will be recognized by the named executive officer. Instead, the amount shown is the grant date fair value of restricted stock granted to the named executive officer computed in accordance with FASB ASC, Topic 718, Compensation—Stock Compensation. The assumptions used to calculate the value of restricted stock unit awards are set forth under Note 1(l)—Share‑Based Compensation, to our consolidated financial statements included in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2023. The grant date fair value is based upon the probable outcome of the performance conditions applicable to each award. Because the maximum share payout was earned as actual Adjusted Operating Income exceeded 115% of targeted Adjusted Operating Income, the grant date fair value of all stock awards granted in 2023 to each named executive officer was as follows: for Mr. Bailly, $2,361,000; for Mr. Lataille, $616,000; for Mr. Rock, $616,000; for Mr. Litterio $273,000 and for Mr. Holt, $180,000. However, in the case of Mr. Bailly, the amount also includes a grant of 2,247 shares of Common Stock issued on December 26, 2023 at the closing price of $178.05 on that date with a grant date fair value of $400,000. |
SUMMARY COMPENSATION TABLE
| (4) Represents performance‑based incentive bonuses earned in 2023, 2022 and 2021 that were paid in March 2024, 2023 and 2022, respectively. |
SUMMARY COMPENSATION TABLE
| (5) Represents our payments for (i) 2023, 2022 and 2021, respectively, of tax preparation fees and club and marina fees for Mr. Bailly; (ii) company-paid life insurance premiums for Mr. Bailly in the amount of $77,160 in each of 2023, 2022 and 2021 and (iii) car allowances, supplemental disability premiums, excess personal liability insurance premiums and 401(k) contributions for each of the named executive officers in 2023, 2022 and 2021. |
Grants of Plan-Based Awards—2023
Grants of Plan-Based Awards—2023
Grants of Plan-Based Awards—2023
| | | Estimated Possible Payouts Under Equity Incentive Plan Awards | | | | | | | | Name | Grant Date | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value Of Stock and Option Awards ($)(1) | | R. Jeffrey Bailly(2)(3) | 2/14/2023 | 7,056 | 14,112 | 21,168 | — | — | — | $2,361,000 | | R. Jeffrey Bailly(4) | 12/26/2023 | — | — | — | 2,247 | — | — | $400,000 | | Ronald J. Lataille(2)(3) | 2/14/2023 | 2,761 | 4,142 | 5,522 | — | — | — | $616,000 | | Mitchell C. Rock(2)(3) | 2/14/2023 | 2,761 | 4,142 | 5,522 | — | — | — | $616,000 | | Christopher P. Litterio (2)(3) | 2/14/2023 | 1,224 | 1,836 | 2,448 | — | — | — | $273,000 | | Jason Holt(2)(3) | 2/14/2023 | 807 | 1,211 | 1,614 | — | — | — | $180,000 |
Grants of Plan-Based Awards—2023
| (1) Amount shown does not reflect compensation actually received by the named executive officer nor does it necessarily reflect the actual value that will be recognized by the named executive officer. Instead, the amount shown is the grant date fair value of restricted stock and stock options granted to the named executive officer computed in accordance with FASB ASC, Topic 718, Compensation—Stock Compensation. The assumptions used to calculate the value of restricted stock unit awards and stock options are set forth under Note 1(l)—Share‑Based Compensation, to our consolidated financial statements included in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2023. |
Grants of Plan-Based Awards—2023
| (2) Reflects grants of stock unit awards to the named executive officers pursuant to our 2003 Incentive Plan. These stock unit awards are subject to a (i) time‑based vesting requirement and (ii) our financial performance objectives, which are discussed in footnote 3 below and above under “Compensation Discussion and Analysis.” One‑third of these awards vested on March 1, 2024, one‑third of these awards vest on March 1, 2025 and one‑third of these awards vest on March 1, 2026, provided that the recipient remains continuously employed by us through each such vesting date and, for the amounts disclosed under the target and maximum columns, the corresponding financial performance requirement is met. Recipients of the stock unit awards will have no rights as stockholders, including, without limitation, the right to vote or to receive dividends, until and to the extent such stock unit awards have vested and the issuance of the shares of Common Stock in respect of the stock unit awards has been appropriately evidenced. Except in the case of Mr. Bailly, any unvested stock unit awards shall terminate upon the cessation of a recipient’s employment with us. With respect to Mr. Bailly, in the event of a cessation of employment by us without Cause or by Mr. Bailly for Good Reason (as such terms are defined in the Bailly Employment Agreement), all earned but unvested stock unit awards shall become immediately exercisable, regardless of such cessation of employment. In the event of our Change in Control (as defined in the stock unit award agreement evidencing the award) on or after January 1, 2024, all earned but unvested stock unit awards held by each of the named executive officers shall become fully vested immediately prior to the effective date of such change in control. |
Grants of Plan-Based Awards—2023
| (3) The Threshold stock unit awards are subject to time vesting only. The Target and Maximum stock unit awards are also subject to financial performance objectives, established by the Compensation Committee as the achievement of 100% and 115%, respectively, of our targeted Adjusted Operating Income for fiscal 2023 of $48,227,000. The amounts in Threshold, Target and Maximum columns are cumulative; the “Target” award amount includes the full amount of the “Threshold” award amount, and the “Exceptional” award amount includes the full amount of both the “Threshold” and “Target” Amounts. Based upon our achievement of $61,336,342 in actual Adjusted Operating Income for our 2023 fiscal year, the Compensation Committee determined that both the Target goal and the Maximum goal had been fully achieved. Accordingly, each named executive officer earned the number of stock unit awards set forth next to his name in the Maximum columns above. |
Grants of Plan-Based Awards—2023
| (4) In accordance with the terms of Mr. Bailly’s employment agreement, these shares were approved for Mr. Bailly by the Compensation Committee on February 14, 2023 and granted and issued on December 26, 2023, valued at $178.05 per share, the closing price of the Common Stock on the date of issuance. The grant was for a fixed dollar amount of $400,000, with the number of shares to be determined on the date of issuance based upon the closing price on that date. Mr. Bailly was also granted stock options in 2023 (as part of his bonus for 2022), the value of which was reflected in the Summary Compensation Table for 2022 (as noted in footnote 2 to the Summary Compensation Table). |
Outstanding Equity Awards at Fiscal 2023 Year‑End
Outstanding Equity Awards at Fiscal 2023 Year‑End
Outstanding Equity Awards at Fiscal 2023 Year‑End
| | Option Awards | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($)(1) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | | R. Jeffrey Bailly | — | 7,935 | $111.54 | 2/14/2028 | 41,941(4) | $7,215,530 | | Ronald J. Lataille | — | — | — | — | 12,747(5) | $2,192,994 | | Mitchell C. Rock. | — | — | — | — | 12,747(6) | $2,192,994 | | Christopher P. Litterio | — | — | — | — | 5,951(7) | $1,023,810 | | Jason Holt | — | — | — | — | 3,673(8) | $631,903 |
Outstanding Equity Awards at Fiscal 2023 Year‑End
________________________
Outstanding Equity Awards at Fiscal 2023 Year‑End
| (1) Exercise prices for all options granted to the named executive officers represent the closing price of the Common Stock on the date of grant. |
Outstanding Equity Awards at Fiscal 2023 Year‑End
| (2) Represents unvested stock unit awards granted pursuant to our 2003 Incentive Plan. |
Outstanding Equity Awards at Fiscal 2023 Year‑End
| (3) The market value of the stock unit awards that have not vested is calculated using the closing price of the Common Stock at the end of our last completed fiscal year. Accordingly, this value was determined based on the closing price of the Common Stock as of December 31, 2023, which was $172.04. |
Outstanding Equity Awards at Fiscal 2023 Year‑End
| (4) Includes (i) 20,752 stock units that vested on March 1, 2024, (ii) 14,133 stock units that vest on March 1, 2025 and (iii) 7,056 stock units that vest on March 1, 2026. |
Outstanding Equity Awards at Fiscal 2023 Year‑End
| (5) Includes (i) 6,959 stock units that vested on March 1, 2024, (ii) 3,946 stock units that vest on March 1, 2025 and (iii) 1,842 stock units that vest on March 1, 2026. |
Outstanding Equity Awards at Fiscal 2023 Year‑End
| (6) Includes (i) 6,959 stock units that vested on March 1, 2024, (ii) 3,946 stock units that vest on March 1, 2025 and (iii) 1,842 stock units that vest on March 1, 2026. |
Outstanding Equity Awards at Fiscal 2023 Year‑End
| (7) Includes (i) 3,333 stock units that vested on March 1, 2024, (ii) 1,802 stock units that vest on March 1, 2025 and (iii) 816 stock units that vest on March 1, 2026. |
Outstanding Equity Awards at Fiscal 2023 Year‑End
| (8) Includes (i) 1,926 stock units that vested on March 1, 2024, (ii) 1,209 stock units that vest on March 1, 2025 and (iii) 538 stock units that vest on March 1, 2026. |
Option Exercises and Stock Vested—2023
Option Exercises and Stock Vested—2023
Option Exercises and Stock Vested—2023
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting(1) (#) | Value Realized on Vesting(2) ($) | | R. Jeffrey Bailly | — | — | 19,395 | $2,287,834 | | Ronald J. Lataille | — | — | 7,530 | $888,239 | | Mitchell C. Rock | — | — | 7,530 | $888,239 | | Christopher P. Litterio | — | — | 3,868 | $456,269 | | Jason Holt. | — | — | 1,589 | $187,438 |
Option Exercises and Stock Vested—2023
| (1) On March 1, 2023, previously issued stock unit awards covering 19,395, 7,530, 7,530, 3,868, and 1,589 shares of our Common Stock vested in full for each of Messrs. Bailly, Lataille, Rock, Litterio and Holt, respectively. The value realized upon the vesting of the stock unit awards is based upon the closing price of $117.96 on March 1, 2023. |
Option Exercises and Stock Vested—2023
| (2) Value realized is calculated based on the number of shares vested multiplied by the closing price of our Common Stock on the date of vesting. This calculation does not account for shares withheld for tax purposes, but rather, represents the gross value realized. |
Nonqualified Deferred Compensation—2023
Nonqualified Deferred Compensation—2023
Nonqualified Deferred Compensation—2023
| Name | Executive Contributions in Last FY ($)(1) | Company Contributions in Last FY ($) | Aggregate Earnings in Last FY ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at 12/31/2023 ($)(3) | | R. Jeffrey Bailly | $100,000 | — | $134,664 | — | $756,076 | | Ronald J. Lataille | — | — | — | — | — | | Mitchell C. Rock | — | — | $105,163 | — | $1,015,648 | | Christopher P. Litterio | — | — | — | — | — | | Jason Holt | — | — | — | — | — |
Nonqualified Deferred Compensation—2023
| (1) Represents amounts contributed into the Deferred Compensation Plan by each named executive officer. Such amounts are included in the Summary Compensation Table in the “Salary” column for 2023. |
Nonqualified Deferred Compensation—2023
| (2) These amounts are not included in the Summary Compensation table because plan earnings were not preferential or above market. |
Nonqualified Deferred Compensation—2023
| (3) The following amounts are included in the fiscal year-end balance and previously were reported as compensation to the following officers in the Summary Compensation Table: Mr. Bailly, $491,868; Mr. Rock, $340,341. |
Potential Payments upon Termination or Change of Control and Severance Plans
Potential Payments upon Termination or Change of Control and Severance Plans Mr. Bailly may be entitled to payment upon his termination or upon our change of control. Under the terms of his employment agreement, if (i) we terminate Mr. Bailly’s employment without Cause (as defined in the agreement), (ii) Mr. Bailly terminates his employment with us for Good Reason (as defined in the agreement), or (iii) Mr. Bailly voluntarily terminates his employment within six months of a Change in Control (as defined in the agreement), then we are required to pay Mr. Bailly a lump sum amount equal to three times his average annual compensation for the two years preceding such termination. The employment agreement defines “average annual compensation” as including aggregate base salary, the Annual Stock Grant Award, and bonus compensation earned in such years. However, any termination payment to Mr. Bailly shall be limited to an amount that would not result in the imposition of an excise tax or denial of a tax deduction for us under the tax code’s golden parachute rules. Accordingly, assuming the triggering event occurred on December 31, 2023, Mr. Bailly would have been entitled to receive a lump sum payment of $7,102,200. Additionally, if we terminate Mr. Bailly without Cause or if he terminates his employment for Good Reason, he is also entitled to extended health insurance benefits for a period of up to thirty‑six months. Assuming a December 31, 2023 triggering date, Mr. Bailly would have been entitled to receive health insurance benefits valued at $28,307. The agreement also provides that in the event of (i) our Change in Control or (ii) our termination of Mr. Bailly’s employment without Cause, or by Mr. Bailly for Good Reason, then (x) any shares in the Annual Stock Grant Award not issued to Mr. Bailly to which he would otherwise be entitled as of the next Issue Date following such Change in Control or such termination will be immediately issued to him and (y) any of Mr. Bailly’s other earned but unvested Stock Rights (as defined in the employment agreement) will immediately vest in full. Assuming a December 31, 2023 triggering date, Mr. Bailly would have been entitled to receive vested equity valued at $4,787,701 calculated based on the closing price of the Common Stock as of December 31, 2023, which was $172.04. Each of the outstanding stock unit awards between the Company and Messrs. Lataille, Rock, Litterio and Holt become time-vested upon a change of control, as defined in our 2003 Incentive Plan, provided that such officer was employed as of the date immediately prior to the effective date of such change in control. Subject to attainment of the performance objectives contained in each award, the stock unit awards will vest at the applicable threshold, target and maximum amounts. Assuming a December 31, 2023 triggering date, Messrs. Lataille, Rock, Litterio and Holt would have been entitled to receive vested equity valued at $1,717,991, $1,717,991, $454,874 and $134,535 respectively, calculated based on the closing price of the Common Stock as of December 31, 2023, which was $172.04. In September 1993, we adopted a policy that all executive officers not otherwise a party to an employment agreement with us will receive a severance benefit should we terminate the employee’s employment other than for cause in connection with our change in control, in the form of a base salary continuation for a period equal to the sum of (i) four months plus (ii) one month for each year of service with us up to a maximum of 18 months. Accordingly, assuming termination on December 31, 2023, such named executive officers would have been entitled to the following payments:
Potential Payments upon Termination or Change of Control and Severance Plans
| Name | Severance Payment ($) | | Ronald J. Lataille | $660,000 | | Mitchell C. Rock | $660,000 | | Christopher P. Litterio | $295,833 | | Jason Holt | $243,750 |
CEO Pay Ratio
CEO Pay Ratio In accordance with rules adopted pursuant to the Dodd-Frank Act of 2010, we are required to calculate and disclose the total compensation paid to our median employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to Mr. Bailly, our CEO. We identified the median employee based on the year-to-date gross pay of our full-time, part-time, seasonal and temporary employees as of October 7, 2023. The only assumptions, adjustments, or estimates that we made to year-to-date gross pay was annualizing the gross pay for any full-time and part-time employees who were not employed for the entire year. We believe that this is a consistently applied compensation measure to identify the median employee. The adjusted gross pay for all employees, other than Mr. Bailly, were ranked highest to lowest in order to determine the median employee. For purposes of reporting annual total compensation and the ratio of annual total compensation of the CEO to the median employee, both the CEO and median employee’s annual total compensation were calculated consistent with the disclosure requirements of executive compensation under Item 402(c)(2)(x) of Regulation S-K. The annual total compensation for the median employee selected in this analysis was $4,814. The annual total compensation for 2023 for Mr. Bailly was $4,931,107 as reported under the heading “Summary Compensation Table.” For 2023, the ratio of the median employee’s annual total compensation to Mr. Bailly’s annual total compensation was 1,024:1. In accordance with the SEC rules, the CEO pay ratio calculation included 1,895 employees from Costa Rica and the Dominican Republic, where such wages, on average, are lower than that of our US employees. If our Costa Rica and Dominican Republic based employees were excluded from such calculation, the CEO pay ratio would have been 121:1.
Pay Versus Performance
Pay Versus Performance The following table illustrates certain information about executive compensation for the Company’s Principal Executive Officer (“PEO”) and other named executive officers (“NEOs”) as well as certain performance measures against which compensation information can be compared. This disclosure has been prepared in accordance with Item 402(v) of Regulation S-K of the Exchange Act and does not necessarily reflect value actually realized by our NEOs or how our Compensation Committee evaluates compensation decisions in light of Company or individual performance. Please refer to the “Compensation Discussion and Analysis” for a discussion of our executive compensation program, its objectives, and the ways in which we align executive compensation with Company performance.
Pay Versus Performance
| | | | | | Value of initial fixed $100 investment based on: | | | | | Year | Summary compensation table total for PEO(1) | Compensation actually paid to PEO(2) | Average summary compensation table total for non-PEO named executive officers(1) | Average compensation actually paid to non-PEO named executive officers(2) | Total shareholder return | Peer group total shareholder return (3) | Net income | Adjusted Operating Income (4) | | 2023 | $4,931,107 | $8,405,644 | $1,141,467 | $1,910,143 | $346.70 | $96.93 | $44,923,806 | $61,336,342 | | 2022 | $4,300,557 | $6,615,078 | $1,019,628 | $1,627,618 | $237.60 | $92.94 | $41,789,243 | $44,463,769 | | 2021 | $2,619,501 | $4,140,645 | $712,181 | $1,000,862 | $141.62 | $106.69 | $15,885,720 | $21,633,199 | | 2020 | $1,665,380 | $2,071,503 | $460,442 | $562,263 | $93.93 | $99.30 | $13,368,880 | $16,731,467 |
Pay Versus Performance
| (1) Amounts reported in these columns represent the total compensation as reported in the Summary Compensation Table for our PEO during each applicable fiscal year and the average of the total compensation as reported in the Summary Compensation Table for our remaining NEOs for the relevant fiscal year, which captures the individuals indicated in the table below for each fiscal year: |
Pay Versus Performance
| Year | PEO | Non-PEO NEOs | | 2023 | R. Jeffrey Bailly | Ronald J. Lataille, Mitchell C. Rock, Christopher P. Litterio, Jason Holt | | 2022 | R. Jeffrey Bailly | Ronald J. Lataille, Mitchell C. Rock, Christopher P. Litterio, Steven G. Cardin | | 2021 | R. Jeffrey Bailly | Ronald J. Lataille, Mitchell C. Rock, Christopher P. Litterio, Steven G. Cardin | | 2020 | R. Jeffrey Bailly | Ronald J. Lataille, Mitchell C. Rock, William David Smith, Christopher P. Litterio, Daniel J. Shaw Jr. |
Pay Versus Performance
| (2) Amounts reported in these columns represent the Summary Compensation Table Total Compensation for the applicable fiscal year adjusted as follows: |
Pay Versus Performance
| Fiscal Year (FY) | 2023 | | 2022 | | 2021 | | 2020 | | | | PEO | Average non-PEO NEOs | PEO | Average non-PEO NEOs | PEO | Average non-PEO NEOs | PEO | Average non-PEO NEOs | | Summary Compensation Table Total Compensation | $4,931,107 | $1,141,467 | $4,300,557 | $1,019,628 | $2,619,501 | $712,181 | $1,665,380 | $460,442 | | Deduction for ASC 718 Fair Value as of the Grant Date for Stock Awards | $(2,761,000) | $(421,250) | $(1,980,200) | $(327,650) | $(1,145,947) | $(220,719) | $(633,370) | $(77,500) | | Increase based on ASC 718 Fair Value of Awards Granted during the FY that Remain Unvested as of FY End | $4,041,743 | $649,709 | $2,902,215 | $518,804 | $1,466,617 | $312,657 | $618,321 | $72,510 | | Increase based on ASC 718 Fair Value of Outstanding Unvested Prior FY Awards as of FY End | $2,193,794 | $540,217 | $1,392,506 | $416,836 | $1,200,474 | $196,743 | $421,172 | $106,811 | | Compensation Actually Paid | $8,405,644 | $1,910,143 | $6,615,078 | $1,627,618 | $4,140,645 | $1,000,862 | $2,071,503 | $562,263 |
Pay Versus Performance
The fair values of RSUs and stock awards included in the Summary Compensation Table Total Compensation are calculated at the required measurement dates, consistent with the approach used to value the awards at the grant date as described in our Annual Report on Form 10-K for the year ended December 31, 2023. Any changes to the RSU and stock award fair values from the grant date (for current year grants) and from prior year-end (for prior year RSU grants) are based on our updated stock price at the respective measurement dates. For all years presented, the meaningful increases in the year-end RSU fair value from the fair value on the grant date were primarily driven by changes in the stock price.
Pay Versus Performance
| (3) As described in the section titled “Compensation Discussion and Analysis”, our peer group includes the following companies: Accuray, Inc., AngioDyamics, Inc., Anika Therapeutics, Inc., Atrion Corp, Avanos Medical, Inc., CryoLife (now Artivion), Cutera, Inc., DMC Global, Inc., Integer Holdings Corp, Lantheus Holdings, Inc., Inc., OraSure Technologies, Inc., and Orthofix Medical, Inc. |
Pay Versus Performance
| (4) Adjusted Operating Income is operating income as adjusted to disregard (i) non‑recurring restructuring charges related to plant closings and consolidations and (ii) the impact of acquired or disposed of operations. |
Relationship between Compensation Actually Paid and Performance Measures Disclosed in the Pay Versus Performance Table
Relationship between Compensation Actually Paid and Performance Measures Disclosed in the Pay Versus Performance Table The graphs below compare (i) the relationship between PEO and average NEO compensation actually paid with our total shareholder return (“TSR”), (ii) the relationship between PEO and average NEO compensation actually paid and net income, (iii) the relationship between PEO and average NEO compensation actually paid and adjusted operating income, and (iv) the relationship between our TSR and our peer group TSR, in each case, for the fiscal years ended December 31, 2023, 2022, 2021 and 2020. TSR amounts reported in the graph assume an initial fixed investment of $100. The following chart sets forth the relationship between compensation actually paid to our PEO, the average of compensation actually paid to our other NEOs, each as set forth in the Pay versus Performance table above, and our cumulative TSR. The chart represents the cumulative TSR of the Company of an initial investment of $100 for the measurement period beginning December 31, 2019, and ending December 31, 2020, 2021, 2022, and 2023. The following chart sets forth the relationship between compensation actually paid to our PEO, the average of compensation actually paid to our other NEOs, and our net income during years 2020 through 2023, each as set forth in the table above. The following chart sets forth the relationship between compensation actually paid to our PEO, the average of compensation actually paid to our other NEOs, and the adjusted operating income during years 2020 through 2023, each as set forth in the table above. The following chart compares our cumulative TSR to that of our peer group over the same time period. The chart represents the cumulative TSR of the Company of an initial investment of $100 for the measurement period beginning December 31, 2019, and ending December 31, 2020, 2021, 2022, and 2023. As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the performance measures that we believe represent the most important financial performance measures used by us to link compensation actually paid to our NEOs for the fiscal year ended December 31, 2023. The measures in this table are not ranked.
Relationship between Compensation Actually Paid and Performance Measures Disclosed in the Pay Versus Performance Table
| Performance measure | Performance measure description | | Adjusted operating income | Operating income as adjusted to disregard (i) non-recurring restructuring charges related to plant closings and consolidations and (ii) the impact of acquired or disposed of operations. | | Net sales | Net sales as per the Company’s consolidated income statements for the respective years. | | Return on invested capital | Operating income net of taxes, divided by average invested capital (equity plus debt less cash). |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Our non‑employee directors annually receive: (i) a retainer of $155,000, with a $55,000 cash component and a $100,000 equity component, payable 50% in the form of restricted stock unit awards (“RSU’s”) that vest on May 31 of the following year and 50% in the form of stock options that become exercisable on May 31 of the following year, (ii) an audit committee retainer of $9,000 in cash, with an additional $11,000 for the non‑employee director serving as audit committee chair, (iii) a compensation committee retainer of $6,000 in cash, with an additional $9,000 for the non-employee director serving as compensation committee chair, (iv) reimbursement of expenses for each meeting physically attended, and (v) a lead independent director retainer of $25,000 for the individual serving in that position. There was no additional compensation paid for services to the nominating committee in fiscal year 2023. Under our stock ownership guidelines, the Board has established a goal that, within five years after joining the Board, each non‑employee Board member beneficially own shares of our stock valued at three times his or her annual base cash retainer fee. The table below summarizes the compensation paid to each of our non-employee directors. For a summary of the compensation earned by Mr. Bailly, our President, Chief Executive Officer and Chairman of the Board of Directors, see the “Executive Compensation” section above.
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(2)(3) | Total ($) | | Marc Kozin | $65,500 | $50,000 | $50,000 | $165,500 | | Thomas Oberdorf | $64,000 | $50,000 | $50,000 | $164,000 | | Daniel C. Croteau | $86,000 | $50,000 | $50,000 | $186,000 | | Cynthia L. Feldmann | $75,000 | $50,000 | $50,000 | $175,000 | | Joseph John Hassett | $65,500 | $50,000 | $50,000 | $165,500 | | Symeria Hudson | $64,000 | $50,000 | $50,000 | $164,000 |
DIRECTOR COMPENSATION
___________________
DIRECTOR COMPENSATION
| (1) On June 7, 2023 we granted to each continuing non‑employee director who served on the Board at that date, free of any restrictions, 298 RSU’s with a value equal to approximately $50,000, calculated using the $167.98 closing price of the Common Stock on the date of grant. Amounts reflected in the table represent the grant date fair value of the stock computed in accordance with FASB ASC, Topic 718, Compensation—Stock Compensation. |
DIRECTOR COMPENSATION
| (2) On June 7, 2023 we granted to each continuing non‑employee director who served on the Board at that date, 703 non‑qualified stock options to acquire Common Stock. Each option is exercisable in its entirety on May 31, 2024 and has a ten‑year life with an exercise price of $167.98, the closing price of our Common Stock on the date of grant. Amounts reflected in the table represent the grant date fair value of the stock options computed in accordance with FASB ASC, Topic 718, Compensation—Stock Compensation. |
DIRECTOR COMPENSATION
| (3) Messrs. Kozin, Oberdorf, Croteau and Hassett and Mses. Feldmann and Hudson had outstanding Option Awards at December 31, 2023 of 9,373, 21,026, 17,335, 2,349, 11,097, and 2,349, respectively. |