DEF 14A of Orthopediatrics Corp, Apr 8, 2024

DEF 14A of Orthopediatrics Corp

Filed Apr 8, 2024 · FY20230001425450-24-000027

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Our Board currently consists of 11 directors who are divided into three classes. All of the current directors were members of our Board at the conclusion of the 2023 annual meeting of stockholders. Directors in each class serve a three-year term. The terms of each class expire at successive annual meetings so that the stockholders elect one class of directors at each annual meeting. Pursuant to that certain Stockholders’ Agreement, dated October 16, 2017, between Squadron Capital LLC (“Squadron”) and the Company (the “Stockholders’ Agreement”), Squadron has caused the Company to nominate three appointed individuals to serve as directors. The persons nominated by Squadron are designated as “Squadron Directors” below. The current classification of our Board is: Terms expiring at this annual meeting: David R. Bailey, Marie C. Infante (Squadron Director) and Jimmy D. McDonald Terms expiring at the 2025 annual meeting: Fred L. Hite, Bryan W. Hughes, Samuel D. Riccitelli and Mark C. Throdahl Terms expiring at the 2026 annual meeting: George S. M. Dyer, MD, David R. Pelizzon (Squadron Director), Harald Ruf (Squadron Director) and Terry D. Schlotterback Our Board, on the recommendation of its Corporate Governance Committee, has nominated Mr. Bailey, Ms. Infante and Mr. McDonald for election at this year’s annual meeting. If elected, each of these three nominees will serve on our Board until the 2027 annual meeting, or until his or her successor is duly elected and qualified in accordance with the Company’s bylaws. If any of these nominees should become unable to accept election, our Proxy Committee may vote for other person(s) selected by our Board. Our Board has no reason to believe that any of the nominees will be unable to accept election. Below is certain information concerning our Board’s nominees for election at this year’s annual meeting, followed by information concerning those Board members who are not standing for election this year and whose term of office will continue after the annual meeting. The biographies of each of the nominees and continuing directors below contain information regarding the experiences, qualifications, attributes or skills that caused the Corporate Governance Committee and our Board to determine that the person should be elected (or should continue to serve even if not standing for election) as a director for the Company in 2024. Following the director biographies is information concerning our corporate governance structure, including descriptions of the standing committees of our Board, namely our Audit, Compensation and Corporate Governance Committees. The directors serving on each committee are listed in the descriptions below. Our directors may also serve on other committees of our Board and the board of directors of the Company’s subsidiaries that are not required to be described by this proxy statement and which are therefore not identified in the information below. Elsewhere in this proxy statement you will find information concerning the numbers of our common shares that are beneficially owned by each of our directors (see “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT”) and information regarding the compensation of our directors (see “EXECUTIVE AND DIRECTOR COMPENSATION”). We urge you to review all of this information when deciding how to vote on Proposal 1.

  2. ELECTION OF DIRECTORS

    | Our Board recommends that you vote FOR all three of the nominees named below. |

  3. ELECTION OF DIRECTORS

    The following persons have been nominated for election to the Board:

  4. Nominees for Election at this Annual Meeting (with Terms to Expire at the 2027 Annual Meeting)

    Nominees for Election at this Annual Meeting (with Terms to Expire at the 2027 Annual Meeting) David R. Bailey, 45, was appointed to serve as the Company’s President and Chief Executive Officer effective June 1, 2021, and as a director effective November 3, 2021. He joined OrthoPediatrics in 2007 and has spent most of his career helping build the company from its early start-up days, to a publicly traded company. During his tenure, Mr. Bailey has held multiple leadership positions of increasing responsibility, including Domestic and International Sales, Operations and oversight of the Trauma & Deformity Correction and Scoliosis business units. As an early employee in the Company’s life cycle, Mr. Bailey was instrumental in setting the strategic agenda for the Company, raising start-up capital, championing new product development, and establishing a global distribution network. Prior to joining the Company, Mr. Bailey worked as a sales representative and independent distributor for Smith & Nephew Orthopaedics. He attended Purdue University in Lafayette and holds a Bachelor of Science in Sales and Sales Management. He has continued his education at the Harvard Business School, where in 2020, he completed the Professional Leadership Development program. We believe Mr. Bailey's extensive knowledge of the Company and all facets of its business and his experience in the medical device industry qualify him to serve on our board of directors. Marie C. Infante, 74, has served as a director since 2014. Ms. Infante was nominated pursuant to the Stockholders’ Agreement with Squadron. Her prior experience as a director includes educational, non-profit, and professional organizations. Ms. Infante has more than 25 years of experience as a healthcare lawyer and a certified compliance professional. Since 2013, she has been an active consultant and senior advisor in the healthcare industry. Recent affiliations have included Avalon Healthcare Services, Zimmet Healthcare Services Group, Triple Tree Capital Partners and BDO Center for Healthcare Excellence and Innovation. From 2006 to 2013, she served as the Senior Vice President, Chief Compliance Officer and General Counsel for Healthcare Law for a $3 billion leader in post-acute healthcare services whose 42,000 employees cared for over 60,000 patients annually. Her industry expertise also stems from 15 years as a clinical specialist in orthopedic nursing. Ms. Infante is a graduate of the University of Maryland, where she earned a Bachelor of Science in Nursing and a Master of Science. She also holds an MBA from Loyola University and a JD from the Catholic University of America. We believe Ms. Infante’s clinical orthopedic experience and knowledge as a healthcare lawyer and compliance expert qualify her to serve on our board of directors. Jimmy D. McDonald, 63, was appointed to the OrthoPediatrics Board in October 2022. Mr. McDonald retired from TE Connectivity ("TE"), a global industrial technology leader for connectivity and sensor solutions, in October 2022, at which time he served as Vice President and Chief Supply Chain Officer. He continues his work with TE by currently serving as a member of its Operating Committee, which oversees and guides the overall operation of the organization. Prior to joining TE in 2013, Mr. McDonald worked for Honeywell Aerospace serving as Vice President of Strategic Sourcing. Prior to that, he spent 24 years with General Motors in diverse roles with increasing responsibilities within global operations. Mr. McDonald is also a founding member and Co-Executive sponsor of the TE African Heritage Employee Resource Group and a board member of the TE Foundation. Mr. McDonald graduated from Oakland University in Rochester, Michigan, where he received a Bachelor of Science degree in Business Administration. He also completed the Executive Development Program at the Kellogg School of Business at Northwestern University. We believe Mr. McDonald's experience in global business operations qualify him to serve on our board of directors. The following persons will continue as directors:

  5. Continuing Directors of the Class with Terms Expiring at the 2025 Annual Meeting

    Continuing Directors of the Class with Terms Expiring at the 2025 Annual Meeting Fred L. Hite, 56, has served as our Chief Financial Officer since February 2015, as our Chief Operating Officer since June 2020, and as a director since August 2015. Prior to joining our company, from 2004 through 2014, Mr. Hite served as the Chief Financial Officer and Investor Relations Officer of Symmetry Medical Inc., ("Symmetry"), a company previously listed on the New York Stock Exchange. Prior to joining Symmetry, Mr. Hite spent 13 years with General Electric Corporation in a variety of financial positions and areas including commercial, manufacturing, sourcing and services. Mr. Hite earned a Bachelor of Science in Finance from the Indiana University Kelley School of Business. We believe Mr. Hite’s financial acumen and public company management experience qualify him to serve on our board of directors. Bryan W. Hughes, 46, has served as a director since 2012. Mr. Hughes is the Managing Director and Group Head of Medical Technology Investment Banking at P&M Corporate Finance, LLC, an investment bank providing merger and acquisition services to companies throughout North America and Europe, a position he has held since 2008. Mr. Hughes earned a B.B.A. with an emphasis in Finance and Accounting from the Stephen M. Ross School of Business at the University of Michigan. Mr. Hughes is a licensed securities representative, holding Series 7 and 63 registrations. We believe Mr. Hughes’s experience advising private and public medical technology companies in strategic, financial and transaction related matters qualifies him to serve on our board of directors. Samuel D. Riccitelli, 65, has served as a director since December 2017. Mr. Riccitelli served as a board director for Biocept, Inc. (Nasdaq: BIOC), a cancer diagnostics company, from October 2020, Chairman of the Board from July 2021, and interim President and Chief Executive Officer from February 2022 to June 2023. From 2019 to 2020 he served as Chief Executive Officer of Pathnostics, a privately-owned infectious disease diagnostics company. From 2017 to 2019, Mr. Riccitelli served as Chairman of the Board of Directors of Precipio, Inc. (Nasdaq: PRPO). From 2012 to 2017, Mr. Riccitelli served as President and Chief Executive Officer and a director of Signal Genetics, Inc., a publicly traded molecular diagnostic company that was ultimately sold to Miragen Therapeutics, Inc. Mr. Riccitelli was also previously the Executive Vice President and Chief Operating Officer of Genoptix, Inc., a publicly traded diagnostic company that was sold to Novartis in 2011. We believe Mr. Riccitelli’s extensive experience with healthcare companies, particularly emerging companies, qualifies him to serve on our board of directors. Mark C. Throdahl, 73, has served as our Executive Chairman since 2021. Prior to his transition to Executive Chairman, Mr. Throdahl previously served as our Chief Executive Officer from January 2011 until June 2021 and has served as a director since 2009. Prior to joining our company, Mr. Throdahl served from 2008 to 2009 as a Group President of Zimmer Holdings, Inc., a worldwide leader in orthopedic implants. Mr. Throdahl previously served from 2001 to 2007 as the Chief Executive Officer and director of Consort Medical plc in London, United Kingdom. During a 13 year career at Becton Dickinson & Co., he served as Senior Vice President of the Drug Delivery sector and President of Nippon Becton Dickinson in Tokyo. Mr. Throdahl began his career at Mallinckrodt, Inc. Mr. Throdahl is a graduate of Princeton University and earned an MBA from Harvard Business School. We believe Mr. Throdahl’s leadership of both large organizations and growing businesses qualifies him to serve on our board of directors.

  6. Continuing Directors of the Class with Terms Expiring at the 2026 Annual Meeting

    Continuing Directors of the Class with Terms Expiring at the 2026 Annual Meeting George S. M. Dyer, MD, 56, was appointed as a director effective April 28, 2023. Dr. Dyer is currently an attending upper extremity surgeon on both the Hand and Upper Extremity Service and the Orthopedic Trauma Service at Brigham and Women’s and Children’s Hospital in Boston, Massachusetts. He first joined the staff at Brigham and Women's Hospital in 2008. Additionally, Dr. Dyer is an Associate Professor of Orthopedic Surgery at Harvard Medical School, a position he has held since 2017. He graduated from Harvard Medical School, the Harvard Combined Orthopedic Residency Program and the Upper Extremity Fellowship of the Brigham and Women’s Hospital and Children's Hospital. Dr. Dyer specializes in upper extremity adult trauma surgery, as well as complex post-traumatic reconstruction of the shoulder, elbow, wrist and hand concerning adults. In addition to his roles with Brigham and Women’s Hospital and Children’s Hospital and Harvard Medical School, Dr. Dyer serves in the United States Navy, Medical Corps (reserve). We believe Dr. Dyer's orthopedic surgery experience qualify him to serve on our board of directors. David R. Pelizzon, 68, has served as a director since 2011. Mr. Pelizzon was nominated pursuant to the Stockholders’ Agreement with Squadron. Mr. Pelizzon is the President of Squadron and a member of its Managing Committee, positions he has held since 2008. Since June 2020, Mr. Pelizzon has also served as a director of Alphatec Holdings, Inc. (Nasdaq: ATEC), a medical technology company focused on the design, development, and advancement of technology for the surgical treatment of spinal disorders. Prior to joining Squadron, Mr. Pelizzon was the Managing Director of Precision Edge Surgical Products Company from 2005 to 2008. Mr. Pelizzon is a retired U.S. Army officer who served nearly 30 years on active duty in airborne and special operations units. Mr. Pelizzon is a graduate of the U.S. Military Academy and earned advanced degrees from Harvard University and the U.S. Naval War College. We believe Mr. Pelizzon’s leadership and management experience qualify him to serve on our board of directors. Harald Ruf, 70, has served as a director since April 2017. Mr. Ruf was nominated pursuant to the Stockholders’ Agreement with Squadron. Mr. Ruf has worked for Squadron since 2014, first as Chief Financial Officer and currently as Chief Operating Officer. Mr. Ruf served on the board of directors of Chromogenex Limited, based in the United Kingdom, from 2014 to 2016. From 2010 to 2016, Mr. Ruf served as a Managing Partner of Teuscher Ruf & Walpole, LLC, an accounting firm providing tax, audit and consulting services. He is also the President and Chief Executive Officer of Ruf & Associates, LLC, a consulting firm that he founded in 1982. During his career, he has co-founded a number of successful companies across several industries. Mr. Ruf is a graduate of Brigham Young University, where he earned a Bachelor of Science in Accounting, and he is a licensed certified public accountant in the States of California and Utah. Mr. Ruf has served as an officer and board member for local and national companies and associations and has been recognized nationally for such service. We believe Mr. Ruf’s 35 years of executive level experience in several industries, including medical device manufacturing, qualifies him to serve on our board of directors. Terry D. Schlotterback, 68, has served as a director since 2009 and was appointed as Lead Independent Director in June 2021, while previously serving as Chairman of the board of directors from September 2013 to June 2021. Mr. Schlotterback was also employed by us from February 2009 to February 2010. Prior to joining our board of directors, Mr. Schlotterback worked for Zimmer from 1982 to 1992 and from 1996 to 2006, where he served in various leadership positions in sales, marketing and research and development, including as President of the Trauma and Spinal divisions. Prior to joining Zimmer, Mr. Schlotterback served in senior management roles for Mitek Surgical Products from 1992 to 1995. Mr. Schlotterback is a founder of the Warsaw, Indiana chapter of VisionTech Angels, an investment group, and TDS Consulting, LLC, which provides consulting services to medical startup companies. Mr. Schlotterback also serves as Chairman of the Board for Nextremity Products Inc. and as an Advisor for Ignite Orthopedics Inc. Mr. Schlotterback earned a Bachelor of Science in Mechanical Engineering Technology from Purdue University. We believe Mr. Schlotterback's extensive experience in the medical device field qualifies him to serve on our board of directors. Board Diversity Matrix (as of April 8, 2024): The following table summarizes certain self-identified characteristics of our directors in accordance with Nasdaq Listing Rules 5605(f) and 5606. Each term used in the table has the meaning given to it in the Nasdaq Listing Rules and related instructions.

  7. Continuing Directors of the Class with Terms Expiring at the 2026 Annual Meeting

    | Race / Ethnicity | Female | Male | | White | 1 | 8 | | African American or Black | — | 2 |

  8. Continuing Directors of the Class with Terms Expiring at the 2026 Annual Meeting

    The Board of Directors understands the value of diversity and will continue to analyze the diversity of the Board. The charts below provide summary information of our Board diversity: Additional information regarding the composition of our Board: Average Tenure - 8.5 years Average Age - 62 years Committees chaired by a minority - 33%

  9. EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

    EXECUTIVE OFFICER AND DIRECTOR COMPENSATION The names, ages, and positions of all of our “officers” as defined under 17 CFR 240.16a-1(f) and our “executive officers” under 17 CFR 229.401(b), and all persons chosen to become officers or executive officers, are listed below: David R. Bailey, 45, President and Chief Executive Officer See director biographies above for a description of Mr. Bailey’s prior business experience. Fred L. Hite, 56, Chief Operating Officer and Chief Financial Officer See director biographies above for a description of Mr. Hite’s prior business experience. Gregory A. Odle, 54, President of Scoliosis Mr. Odle joined our company in 2007 and has served as our President of Scoliosis since 2022. Prior to that he served as our Executive Vice President from 2011 to 2022. Mr. Odle also served as a member of our board of directors from 2007 to 2013. Prior to joining our company, Mr. Odle held various sales roles for Smith & Nephew plc, ultimately becoming the District Manager for Indiana and Kentucky. Mr. Odle earned a Bachelor of Science in Marketing from the Indiana University Kelley School of Business. Daniel J. Gerritzen, 54, Executive Vice President (Legal), General Counsel, and Secretary Mr. Gerritzen has served as our General Counsel since 2009, Secretary since 2013 and Executive Vice President since 2022. Prior to joining our company, Mr. Gerritzen was a partner with Bingham Greenebaum Doll LLP (now known as Dentons Bingham Greenebaum LLP), a law firm in Indianapolis, where he continues to serve as Of Counsel. Mr. Gerritzen spends substantially all of his time working for our company. Mr. Gerritzen earned a Bachelor of Science in Marketing and a JD from Indiana University. Joseph W. Hauser, 42, President of Trauma and Deformity Correction Mr. Hauser joined our company in 2015 and has served as our President of Trauma and Deformity Correction since 2022. Prior to that he served as our Senior Vice President from 2021 to 2022. Prior to joining our company, Mr. Hauser held various lead various leadership roles with DJO Global, Biomet (Trauma) and Zimmer (Trauma). Currently, he leads the Trauma and Deformity Correction business at OrthoPediatrics. Mr. Hauser obtained a Bachelor’s degree in Kinesiology and Exercise Science (ATC) from John Carroll University. During his first few career opportunities, he pursued a Master’s Degree in Business Administration (MBA with Marketing focus) from Capital University. Mark C. Throdahl, 73, Executive Chairman and former Chief Executive Officer See director biographies above for a description of Mr. Throdahl’s prior business experience. Each of our executive officers is elected by our Board for a term of one year or until the election of their successors. There are no arrangements between any executive officer and any other person pursuant to which he was selected as an executive officer. Effective as of June 3, 2020, the Company initiated an executive succession plan whereby Mr. Bailey became the Company's President and Mr. Hite became the Company's Chief Operating Officer and Chief Financial Officer. Prior to that time, Mr. Throdahl served as President and Chief Executive Officer of the Company, Mr. Bailey served as an Executive Vice President, and Mr. Hite served as Chief Financial Officer. In June of 2021, following his reaching the age of 70, Mr. Throdahl transitioned to the role of Executive Chairman, and Mr. Bailey succeeded Mr. Throdahl as the Company's Chief Executive Officer.

  10. Summary Compensation Table

    Summary Compensation Table Our "named executive officers" ("Named Executive Officers" or "NEOs"), as defined under 17 CFR 229.402(a)(3), for the year ended December 31, 2023, were as follows: •David R. Bailey, President and Chief Executive Officer; •Fred L. Hite, Chief Operating Officer and Chief Financial Officer; •Gregory A. Odle, President of Scoliosis; •Daniel J. Gerritzen, Executive Vice President (Legal), General Counsel, and Secretary; and •Joseph W. Hauser, President of Trauma and Deformity Correction. The following table sets forth information concerning the compensation of our Named Executive Officers for the years indicated.

  11. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | | David R. Bailey, President and Chief Executive Officer | 2023 | 500,000 | 1,843,952 | 364,688 | 13,200 | 2,721,840 | | | 2022 | 415,000 | 689,961 | 161,271 | 12,200 | 1,278,432 | | | 2021 | 371,000 | 361,360 | 162,087 | 11,600 | 906,047 | | Fred L. Hite, Chief Operating Officer and Chief Financial Officer | 2023 | 450,000 | 1,244,700 | 328,219 | 13,200 | 2,036,119 | | | 2022 | 408,000 | 678,302 | 158,550 | 12,200 | 1,257,052 | | | 2021 | 371,000 | 361,360 | 162,087 | 11,600 | 906,047 | | Gregory A. Odle, President of Scoliosis | 2023 | 353,100 | 813,909 | 171,695 | 13,200 | 1,351,904 | | | 2022 | 340,000 | 565,282 | 132,125 | 12,200 | 1,049,607 | | | 2021 | 309,000 | 300,956 | 134,999 | 11,600 | 756,555 | | Daniel J. Gerritzen, Executive Vice President (Legal), General Counsel, and Secretary | 2023 | 353,100 | 813,909 | 171,695 | 13,200 | 1,351,904 | | | 2022 | 330,000 | 548,640 | 128,239 | 12,200 | 1,019,079 | | | 2021 | 300,000 | 292,175 | 131,067 | 11,500 | 734,742 | | Joseph W. Hauser, President of Trauma and Deformity Correction | 2023 | 353,100 | 813,909 | 171,695 | 13,200 | 1,351,904 | | | 2022 | 330,000 | 548,640 | 128,239 | 12,200 | 1,019,079 | | | 2021 | 300,000 | 300,003 | 130,693 | 11,600 | 742,296 |

  12. Summary Compensation Table

    (1) Amounts reflect the aggregate grant date fair value of restricted share grants computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 10 included in our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023. There can be no assurance that unvested awards will vest (and, absent vesting, no value will be realized by the executive for the award). (2) Amounts reflect bonuses paid with respect to the achievement of performance criteria under our executive bonus plan. (3) Amounts in this column include 401(k) matching contributions for all individuals listed.

  13. Pay Versus Performance

    Pay Versus Performance The following table and graphs provide information required under the SEC's "pay versus performance" rules over the last three years as required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K. The graphs below show the relationship of "compensation actually paid" to our principal executive officer ("PEO") and other NEOs in 2021, 2022 and 2023.

  14. Pay Versus Performance

    | | Summary compensation table total for PEO (1) | | Compensation actually paid to PEO (2) | | Average summary compensation table total for non-PEO NEOs (1) | Average compensation actually paid to non-PEO NEOs (2) | Value of initial fixed $100 investment based on total shareholder return | Net (loss) income(3) | Adjusted EBITDA (3)(4) | | Year | David R. Bailey | Mark C. Throdahl | David R. Bailey | Mark C. Throdahl | | | | | | | (a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | (h) | | 2023 | $2,721,840 | $— | $2,208,646 | $— | $1,522,958 | $1,222,994 | $54 | $(20,974) | $5,040 | | 2022 | $1,278,432 | $— | $826,322 | $— | $1,086,204 | $631,836 | $96 | $1,258 | $227 | | 2021 | $906,047 | $718,032 | $1,462,716 | $1,377,902 | $784,910 | $1,320,670 | $145 | $(16,260) | $(182) |

  15. Pay Versus Performance

    (1) Amounts in column (b) reflect the "Summary Compensation Table" total for our PEOs. For the years reported in the table, Mr. Bailey was our PEO from June 3, 2021 to December 31, 2023, and Mr. Throdahl was our PEO from January 1, 2021 to June 3, 2021. The amounts reported in column (d) reflect the average "Summary Compensation Table" totals for our remaining NEOs for the relevant fiscal year, which includes the following individuals: Fred L. Hite, Gregory A. Odle, Daniel J. Gerritzen, and Joseph W. Hauser for each such year. (2) "Compensation actually paid" reflects the amounts set forth within the "Summary compensation table total for PEO" and "Average summary compensation table total for non-PEO NEOs" columns of the table above, each adjusted in accordance with SEC rules. Amounts added and deducted, on an item-by-item basis, to calculate the compensation actually paid for each fiscal year are included in the tables below.

  16. Pay Versus Performance

    | | 2023 | 2022 | | | (Mr. Bailey) | (Mr. Bailey) | | Summary Compensation Table Total Compensation | $2,721,840 | $1,278,432 | | Less: Stock award values reported for the covered year | 1,843,952 | 689,961 | | Plus: Fair Value for stock awards granted in the covered year | 1,444,874 | 599,565 | | Change in fair value of outstanding unvested stock awards from prior years | (160,356) | (325,462) | | Change in fair value of stock awards from prior years that vested in the covered year | 46,240 | (36,252) | | Compensation Actually Paid | $2,208,646 | $826,322 |

  17. Pay Versus Performance

    | | 2023 | 2022 | 2021 | | | (Non-PEO NEOs) | (Non-PEO NEOs) | (Non-PEO NEOs) | | Summary Compensation Table Total Compensation | $1,522,958 | $1,086,204 | $784,910 | | Less: Stock award values reported for the covered year | 921,607 | 585,216 | 313,624 | | Plus: Fair Value for stock awards granted in the covered year | 722,145 | 508,544 | 367,540 | | Change in fair value of outstanding unvested stock awards from prior years | (136,740) | (322,684) | 356,996 | | Change in fair value of stock awards from prior years that vested in the covered year | 36,238 | (55,012) | 124,848 | | Compensation Actually Paid | $1,222,994 | $631,836 | $1,320,670 |

  18. Pay Versus Performance

    (3) Amounts reported for net income and Adjusted EBITDA are in thousands. (4) The Company-Selected Measure is Adjusted EBITDA. Adjusted EBITDA in the table above represents net loss (income), plus interest (income) expense, net plus other (income) expense, provision for income taxes (benefit), depreciation and amortization, trademark impairment, stock-based compensation expense, fair value adjustment of contingent consideration, acquisition related costs, nonrecurring Pega conversion fees, and the cost of minimum purchase commitments. Adjusted EBITDA is a non-GAAP financial measure.

  19. Description of Relationships Among Pay Versus Performance Measures

    Description of Relationships Among Pay Versus Performance Measures Relationship Between PEO and Non-PEO NEOs Compensation Actually Paid and Company Total Shareholder Return (“TSR”) The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our other NEOs, and the Company’s cumulative TSR over the three most recently completed fiscal years. Relationship Between PEO and Non-PEO NEOs Compensation Actually Paid and Net (Loss) Income 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 (loss) income during each of the three most recently completed fiscal years. Relationship Between PEO and Non-PEO NEOs Compensation Actually Paid and Adjusted EBITDA The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our other NEOs, and our Adjusted EBITDA during each of the three most recently completed fiscal years.

  20. Outstanding Equity Awards as of 2023 Fiscal Year-End

    Outstanding Equity Awards as of 2023 Fiscal Year-End The table below summarizes the aggregate stock option and restricted stock awards held by our NEOs as of December 31, 2023. As described above in “Equity Compensation,” stock options typically vest upon grant.

  21. Outstanding Equity Awards as of 2023 Fiscal Year-End

    | Name | Grant Date | Stock Awards | | | | | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | | David R. Bailey | 3/15/2023 | 44,444 | 1,444,874 | | | 3/15/2022 | 15,091 | 490,608 | | Fred L. Hite | 3/15/2023 | 30,000 | 975,300 | | | 3/15/2022 | 14,836 | 482,318 | | Gregory A. Odle | 3/15/2023 | 19,617 | 637,749 | | | 3/15/2022 | 12,364 | 401,954 | | Daniel J. Gerritzen | 3/15/2023 | 19,617 | 637,749 | | | 3/15/2022 | 12,000 | 390,120 | | Joseph W. Hauser | 3/15/2023 | 19,617 | 637,749 | | | 3/15/2022 | 12,000 | 390,120 |

  22. Outstanding Equity Awards as of 2023 Fiscal Year-End

    (1) All restricted stock vests three years after grant date. (2) The market value for our restricted stock is based on our stock price as of December 31, 2023.

  23. Director Compensation

    Director Compensation The Company compensates its non-employee directors for their service to the Company through a cash retainer in an amount equal to $90,000 or $22,500 per regular meeting attended. In addition, each non-employee director who serves as the chairperson of our Board or of our Compensation Committee or Corporate Governance Committee receives an additional cash fee of $5,000 per year and the chairperson of our Audit Committee receives an additional $10,000 per year. Non-employee directors serving as of the date of an annual meeting of our stockholders each receive a grant of restricted stock equivalent to $90,000 in value on the date of such meeting, vesting over three years, subject to continued service through the applicable vesting date. The following table sets forth information concerning the compensation of our non-employee directors during the year ended December 31, 2023. Mr Bailey, Mr. Hite, and Mr. Throdahl, each of whom is an executive officer, do not receive additional compensation for their service as a director, and therefore are not included in the table below.

  24. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Compensation ($) | Change in Pension Value and Non-qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | Dr. George Dyer(1) | 45,000 | 90,000 | — | — | — | — | 135,000 | | Bryan W. Hughes | 100,000 | 90,000 | — | — | — | — | 190,000 | | Marie C. Infante | 95,000 | 90,000 | — | — | — | — | 185,000 | | Jimmy D. McDonald | 90,000 | 90,000 | — | — | — | — | 180,000 | | David R. Pelizzon | 90,000 | 90,000 | — | — | — | — | 180,000 | | Samuel D. Riccitelli | 90,000 | 90,000 | — | — | — | — | 180,000 | | Harald Ruf | 90,000 | 90,000 | — | — | — | — | 180,000 | | Terry D. Schlotterback | 95,000 | 90,000 | — | — | — | — | 185,000 | | Kevin L. Unger(1) | 22,500 | — | — | — | — | — | 22,500 |

  25. Director Compensation

    (1) Effective April 28, 2023, Mr. Unger resigned from the Board and Dr. Dyer was appointed to fill the resulting vacancy.