DEF 14A of Escalade Inc, Mar 29, 2024

DEF 14A of Escalade Inc

Filed Mar 29, 2024 · FY20230001437749-24-010074

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The Board of Directors currently has six members. On March 6, 2024, current director, Anita Sehgal, informed the Board that she has decided not to stand for reelection at the 2024 Annual Meeting. Accordingly, her term as a director will end upon the election of directors at the 2024 Annual Meeting. In light of Ms. Sehgal not continuing as a director, the Board has voted to reduce the size of the Board to five members as permitted by the Company’s Bylaws effective as of the 2024 Annual Meeting. The nominees presented for election include current directors, Richard Baalmann, Jr., Katherine F. Franklin, Walter P. Glazer, Jr., Patrick J. Griffin and Edward E. Williams. Each individual elected as a director at the 2024 Annual Meeting will serve a one year term, expiring at the 2025 Annual Meeting or until their successors are elected and qualified. The Board of Directors unanimously recommends that Messrs. Baalmann, Glazer, Griffin, and Williams and Ms. Franklin be elected as directors. Director candidates are nominated by the independent members of the Board of Directors who serve on the Nominating and Corporate Governance Committee. In making nominations, the Nominating and Corporate Governance Committee obtains input from all members of the Board. As reflected in the Nominating and Corporate Governance Committee’s charter, the Board has determined that a potential candidate to be nominated to serve as a director should have the following primary attributes: high achievement expectations with regard to increasing stockholder value; uncompromising position on maintaining ethics; conservative attitude towards financial accounting and disclosure; and should be a stockholder of the Company to bring the perspective of a stockholder to the Board. The Board believes that the composition of the Board as a whole should reflect broad and diversified business experience with significant financial expertise and knowledge of the Company’s culture. In addition, Board composition should include members with significant understanding of consumer product sales, marketing, e-commerce, operational and manufacturing experience, public company and/or C-Suite knowledge, investment banking, accounting and finance, legal, compliance and risk management acumen. The Board further believes that gender, age, race, and ethnic diversity can enhance the overall perspectives of the Board and of management and can provide additional insights into the needs and desires of our shareholders and customers. Personal attributes, including personality, interest, values and alignment with the Company’s culture, also are important considerations in establishing a dynamic board of directors who can effectively provide strategic oversight and successful execution of the Company’s objectives. In designing and evaluating the composition of the Board when adding or replacing directors, the Board and the Nominating and Corporate Governance Committee consider all of these diverse factors and seek to fill gaps in the mix of priorities, insights and competencies necessary to construct a high quality, effective board of directors. In 2020, the Board adopted a board diversity policy which provides that the initial list of candidates from which new management-supported director nominees are chosen by the Board and/or the Nominating and Corporate Governance Committee shall include, but need not be limited to, qualified women and minority candidates. The policy also provides that the Board and/or the Nominating and Corporate Governance Committee will request any third party search firm engaged to assist in preparing such an initial list of potential director nominees to likewise include such candidates. In conjunction with determining the director nominees for election at the 2024 Annual Meeting, neither the Board nor the Nominating and Corporate Governance Committee deemed it necessary to engage a third party search firm to assist in identifying suitable candidates. No fees were paid to any such search firm in connection with the nominees for directors named in this Proxy Statement. Although the Board and the Nominating and Corporate Governance Committee currently believe that the existing Board members and executive management of the Company have various networks of business contacts from which potential candidates can be identified, the Nominating and Corporate Governance Committee intends to explore additional ways to identify diverse candidates in the future if necessary, including the possible engagement of a third party search firm. Upon the Nominating and Corporate Governance Committee narrowing the pool of prospective qualified candidates to fill any openings or new positions on the Board, as many members of the Board as feasible will meet with such candidates to explore the ways in which such candidates can add value to the Board, to the Company, and to the Company’s shareholders and customers. The Board as a whole subsequently will evaluate the candidates using the criteria and principles outlined above. The Nominating and Corporate Governance Committee then will make the final determination of whether or not to nominate a candidate. Under the Company’s Bylaws, director nominations may be brought at an annual meeting of stockholders only by or at the direction of the Board of Directors or by a stockholder entitled to vote who has submitted a nomination in accordance with the requirements of the Company’s Bylaws as in effect from time to time. To be timely under the Bylaws as now in effect, a stockholder notice must be delivered to the Company’s Secretary at the principal executive offices in Evansville, Indiana not less than ninety (90) days prior to the first anniversary of the preceding year’s annual meeting of stockholders. Under this provision, nominations for this year’s Annual Meeting were due by February 10, 2024. The Company has received no nominations for this Annual Meeting. Information with respect to each of the nominees, each of whom is a current director standing for re-election, is set forth as follows: Richard F. Baalmann, Jr. Nominee, Age 64, Director since 2006 Business Experience: President of Bramm Inc., and related companies which operate ACE Hardware stores in the St. Louis, Missouri area (since 1988). Qualifications Relative to Service on the Company’s Board: Our Board concluded that Mr. Baalmann is qualified to serve as a board member because of his 30+ year career in retail marketing and his experience having served on the Board of Ace Hardware Corporation where he acted as Chairman of the Audit and Supply Committees. During 1999-2008, Mr. Baalmann also served on the Nominating and Corporate Governance, Executive and Compensation Committees for Ace Hardware Corporation, where he has gained experience in GAAP and SEC compliance compensation policies and company strategic planning. He is considered an audit committee financial expert under SEC rules. Mr. Baalmann serves on the Company’s Nominating and Corporate Governance Committee and also serves as Chairman of the Company’s Audit Committee.

  2. Katherine F. Franklin

    Katherine F. Franklin Nominee, Age 55, Director since 2020 Business Experience: Former CEO/Advisor of family entertainment start-up Hidden Pigeon Company (February 2023-January 2024). President, Franchise Development of Lightstorm Entertainment, Inc., a motion picture production company founded by Academy Award winners, director James Cameron and producer Jon Landau (June 2011-February 2023). Principal, Fox Franklin Consulting (2010-2011). Vice President, Global Studio Franchise Development, Disney Consumer Products (2006-2009). Various management roles with The Walt Disney Company (1998-2006). Project Manager/Associate Creative Director, The Jack Morton Company (1997). Qualifications Relative to Service on the Company’s Board: Our Board concluded that Ms. Franklin is qualified to serve as a board member because of her extensive experience in strategic planning for brand and product development, in leading cross-platform marketing of merchandise, games, food, beverages, and other retail products, in establishing digital and social media presence targeted to family audiences, and developing licensing and other long-term relationships with business partners. Her roles with Lightstorm Entertainment included overseeing global brand strategy and management for the Avatar movie franchise. Ms. Franklin brings a wide range of leadership, marketing, public relations, and creative skills and insights to our Board. Ms. Franklin has an A.B. degree from Princeton University and a Master’s degree from Columbia University. Ms. Franklin serves on the Company’s Audit Committee and Compensation Committee and also serves as Chairman of the Company’s Nominating and Corporate Governance Committee.

  3. Walter P. Glazer, Jr

    Walter P. Glazer, Jr Business Experience: Chief Executive Officer and President (since January 2022). Interim Chief Executive Officer and President (February 2021 – December 2021). Founder and Chief Executive Officer of Speedball Art Products Company, a manufacturer and worldwide distributor of fine art materials (1997-2021). Senior Vice President, Equity Research Group at Wheat First Securities (1996-1997). Equity Securities Analyst and Director of Research, J.J.B. Hilliard, W.L. Lyons (1986-1995). Property/Casualty Underwriter and Marketing Representative, Crum & Forster (1981-1984). Qualifications Relative to Service on the Company’s Board: Our Board concluded that Mr. Glazer is qualified to serve as a board member because of his background in securities analysis and his senior management experience in manufacturing, consumer products sales and marketing, strategic planning, and capital allocation. Mr. Glazer has an MBA from the Darden School of Business, University of Virginia, a BBA in Risk Management from the University of Georgia, and is a Chartered Financial Analyst. Mr. Glazer is considered an audit committee expert under SEC rules. He currently serves as Chairman of the Company’s Board of Directors.

  4. Patrick J. Griffin

    Patrick J. Griffin Nominee, Age 54, Director since 2009 Business Experience: Vice President, Corporate Development and Investor Relations for Escalade, Incorporated, since August 2012. Previously served as President of Martin Yale Group (2009-2012), Vice President Sales and Marketing, Martin Yale International (2007-2009) and successive product management roles at Escalade Sports (2002-2006). Director of Strategic Services for Edmondson/Quest (2000-2002). Director of Business Development for, Webcentric, Inc. and successively Network Commerce (1999-2000). Strategic Planning Associate for Koch Industries, Inc. (1998-1999). Qualifications Relative to Service on the Company’s Board: Our Board concluded that Mr. Griffin is qualified to serve as a board member because of his history with the Company, his previous position as President of Martin Yale Group and his experience in product management, corporate development, investor relations and strategic planning. Mr. Griffin also holds a Master’s in Business Administration from the University of Michigan at Ann Arbor. Mr. Griffin’s board experience since 2007 included Stiga Sports AB, a Swedish sporting goods company and former 50% owned Escalade joint venture, through May 2018, Escalade International, Ltd. From 2007 through 2013 and Neoteric Industries, Inc. from 2009 through 2017.

  5. Edward E. Williams

    Edward E. Williams Nominee, Age 63, Director since 2004 Business Experience: Founder and President of Ballast Tools, Incorporated, a manufacturer of railway track maintenance equipment with locations in U.S. and Canada with worldwide distribution (since 1985). Vice President of Good Earth Tools, Inc., a specialty manufacturer of tungsten carbide protected wear parts located in Crystal City, Missouri (since 1984). Founder and President of Ever Extruder, LLC, a manufacturer and distributor of high production food processing equipment (since 2007). Qualifications Relative to Service on the Company’s Board: Our Board concluded that Mr. Williams is qualified to serve as a board member because of his experience in entrepreneurial management, specifically in the manufacturing industry. In addition, Mr. Williams’ family owned one of the predecessor companies of Escalade, Incorporated, and Mr. Williams has a strong knowledge of the Company’s history. Mr. Williams brings a broad range of management, manufacturing, and sales skills to our Board. During his tenure on the Board, Mr. Williams has gained a good working knowledge of the Company that provides efficiency and continuity to our Board. He is considered an audit committee financial expert under SEC rules. Mr. Williams serves on the Company’s Audit Committee, serves as Chairman of the Company’s Compensation Committee and serves as Lead Independent Director of the Company’s Board of Directors. While there is no reason to believe that any of the persons nominated will, prior to the date of the meeting, refuse or be unable to accept the nomination, should any person nominated so refuse or become unable to accept, it is the intention of the persons named in the proxy to vote for such other person or persons as the directors recommend. The Board does not have a formal policy regarding director attendance at the Annual Meeting. Typically, the Board holds its annual organizational meeting directly following the Annual Meeting, which results in most directors being able to attend the Annual Meeting. All directors attended the 2023 Annual Meeting in person. With the exceptions of Messrs. Walter P. Glazer, Jr. and Patrick J. Griffin, who are executive officers of the Company, the Board has determined that all of the above named nominees meet the independence standards of Rule 5605(a)(2) of the National Association of Securities Dealers listing standards. The Board of Directors unanimously recommends that you vote “FOR” Proposal 1 relating to the election of directors.

  6. Director Compensation

    Director Compensation During 2023, each non-employee director of Escalade, Incorporated received an annual retainer of $56,000. The Lead Independent Director received an additional annual fee of $20,000. Each member of the Audit Committee received an additional annual fee of $5,000, except for the Audit Committee Chairman who received $15,000. Each member of the Compensation Committee received an additional annual fee of $3,000, except for the Compensation Committee Chairman who received $15,000. Each member of the Nominating and Corporate Governance Committee received an additional annual fee of $3,000, except for the Nominating and Corporate Governance Committee Chairman, who received an additional annual fee of $15,000. Each non-employee board member received 5,300 restricted stock unit grants in 2023. The restricted stock units granted vest over two years (one-half one year from grant date and one-half two years from grant date), provided that the director is still with the Company. Directors are reimbursed for their reasonable out-of-pocket expenses incurred in connection with attendance at Board and committee meetings. Under the terms of the Escalade, Incorporated 2017 Incentive Plan, directors can elect to receive some or all of the fees earned in shares of the Company’s common stock. In 2023, there were 4,441 shares of common stock issued pursuant to the plan. Directors Baalmann, Franklin and Sehgal received a combination of cash and common stock. Director Williams received his fees in cash.

  7. 2023 Director Compensation

    2023 Director Compensation The following table summarizes the compensation earned by or awarded to each non-employee director who served on the Board of Directors during 2023. Compensation paid for 2023 to Mr. Glazer in his capacity as the Company’s Chief Executive Officer and President and to Mr. Griffin, the Company’s Vice President Corporate Development & Investor Relations is set forth in the “Executive Compensation - Summary Compensation Table.” Neither Mr. Glazer nor Mr. Griffin received any compensation in 2023 for service on the Board of Directors.

  8. 2023 Director Compensation

    | Name | Fees Earned or Paid in Cash ($)(1) | Equity Awards ($) (2)(3) | All Other Compensation ($) | Total ($) | | Edward E. Williams | 96,000 | 63,706 | 0 | 159,706 | | Richard F. Baalmann, Jr. | 74,000 | 63,706 | 0 | 137,706 | | Katherine F. Franklin | 79,000 | 63,706 | 0 | 142,706 | | Anita Sehgal | 62,000 | 63,706 | 0 | 125,706 |

  9. 2023 Director Compensation

    | (1) This column includes the fair value of common stock issued in lieu of cash compensation pursuant to the Escalade, Incorporated 2017 Incentive Plan. For Director Williams, all fees were paid in cash. For Director Baalmann, $59,200 was paid in cash, and $14,800 was paid in shares of common stock. For Director Franklin, $55,300 was paid in cash, and $23,700 was paid in shares of common stock. For Director Sehgal, $49,600 was paid in cash, and $12,400 was paid in shares of common stock. |

  10. 2023 Director Compensation

    | (2) The amount recorded in this column is the compensation cost of restricted stock units granted by the Company during the fiscal year under ASC Topic 718, Stock Compensation. The fair value of each grant is estimated on the date of grant using the closing price of the Company’s common stock on the date of grant. |

  11. 2023 Director Compensation

    | (3) As of December 31, 2023, independent directors Williams, Franklin, Sehgal and Baalmann each had 7,800 unvested restricted stock units. |

  12. 2024 Director Compensation

    2024 Director Compensation In 2024, the Compensation Committee reviewed the compensation of the non-employee directors and recommended no changes to the annual retainer. The Compensation Committee intends to award restricted stock units to each non-employee board member in 2024. The restricted stock units will vest over two years (one-half one year from grant date and one-half two years from grant date), provided that the director is still with the Company. The number of restricted stock units to be awarded in 2024 had not yet been determined prior to the finalization of this Proxy Statement. All other elements of compensation for the non-employee directors remain the same as in 2023.

  13. Compensation Philosophy

    | ● | Align all pay programs with the Company’s annual and long-term business strategies and objectives; and |

  14. Compensation Program; Mix of Pay Components

    | ● | Annual incentive cash bonuses; |

  15. Compensation Program; Mix of Pay Components

    | ● | Long-term equity incentives, historically in the form of stock options and/or restricted stock units; and |

  16. Annual Cash Incentive Bonus

    Annual Cash Incentive Bonus The Compensation Committee has established a profit incentive plan that provides for the payment of cash bonuses if certain performance targets are achieved. Under the plan, the Compensation Committee establishes target performance levels early in each fiscal year, subject to potential changes that the Committee may determine appropriate. The target bonuses for the Company’s named executives in fiscal year 2023 ranged from 100% to 130% of base salary. In conjunction with the completion of the Company’s annual audited financial statements, the bonus pool is finalized based on actual results achieved relative to the performance levels established by the Committee. Allocation of the bonus pool to individual executive officers is determined by the Compensation Committee based upon quantitative and qualitative assessments of the overall Company’s performance relative to the stated objectives, the Company’s strategic position, business performance, and the individual executive officer’s performance. The amount of the bonus pool allocated to the individuals participating in the profit incentive plan for fiscal year 2023 was based primarily upon their target percentages of Company revenues and profits. The Company’s claw back policy applies to all awards to officers under this plan. For 2023, the business results exceeded the minimum threshold for generating a bonus pool. The Compensation Committee evaluated financial, strategic and operational objectives and accomplishments for Mr. Glazer and approved a performance bonus of $181,323. After consultation with Mr. Glazer, the Compensation Committee evaluated financial, strategic and operational objectives and accomplishments for the Chief Financial Officer and the Vice President, Corporate Development and Investor Relations. The Committee approved a performance bonus of $124,728 for Mr. Wawrin and $65,000 for Mr. Griffin.

  17. Long Term Equity Incentives

    Long Term Equity Incentives Each year, the Compensation Committee determines the amount and character of any long term equity incentive grants to the Company’s executive officers and other eligible employees. The Committee considers equity grants to be an effective incentive to encourage stock ownership by officers and key employees increasing their proprietary interest in the success of the Company, while at the same time discouraging excessive risk through the implementation of the Company’s claw back policy. In February 2023, the Compensation Committee approved restricted stock units under the 2017 Incentive Plan for Mr. Glazer, Mr. Wawrin, and Mr. Griffin as part of the Compensation Committee’s annual consideration of appropriate incentive equity awards. The Company granted, as of March 3, 2023, 83,310 restricted stock units to Mr. Glazer, 8,331 restricted stock units to Mr. Wawrin and 5,550 restricted stock units to Mr. Griffin. The restricted stock units granted vest over three years (one-third one year from grant date, one-third two years from grant date, and one-third three years from grant date), provided that the named executive is still employed by the Company on the vesting date. The Compensation Committee intends to award restricted stock units under the 2017 Incentive Plan to Mr. Glazer, Mr. Wawrin, and Mr. Griffin in 2024 as part of the Compensation Committee’s annual consideration of appropriate incentive equity awards. The restricted stock units will vest over three years (one-third one year from grant date, one-third two years from grant date, and one-third three years from grant date), provided that the named executive continues to serve as an employee, director or consultant of the Company on the vesting date. The number of restricted stock units to be awarded in 2024 had not yet been determined prior to the finalization of this Proxy Statement.

  18. Summary Compensation Table

    Summary Compensation Table The following table sets forth information regarding compensation of the named executive officers of the Company for 2023 and 2022:

  19. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Cash Bonus ($) | Stock Awards ($) | Option Awards ($) | Restricted Stock Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | | Walter P. Glazer, Jr. President & Chief Executive Officer | 2023 2022 | 511,211 500,004 | - - | - 282,171 | - - | 1,064,702 1,895,175(1) | 181,323 - | - - | 501 33,431 | 1,757,737 2,710,781 | | Stephen R. Wawrin Chief Financial Officer, Vice President Finance and Secretary | 2023 2022 | 331,670 321,149 | - - | - - | - - | 106,470 100,275 | 124,728 193,657 | - - | 15,506 15,270 | 578,374 630,351 | | Patrick J. Griffin Vice President, Corporate Development & Investor Relations | 2023 2022 | 196,286 182,796 | - - | - 113,001 | - - | 70,929 66,850 | 65,000 - | - - | 10,910 11,611 | 343,125 374,258 |

  20. Summary Compensation Table

    | (1) Includes a one-time grant of 54,152 restricted stock units awarded to Mr. Glazer in connection with his agreement to become the Company’s full-time Chief Executive Officer and President, and the first award of restricted stock units (75,000 RSUs) for his service in that role. |

  21. Column (i) - Change in Pension Value and Nonqualified Deferred Compensation Earnings

    Column (i) - Change in Pension Value and Nonqualified Deferred Compensation Earnings See “Nonqualified Deferred Compensation”.

  22. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The following table outlines outstanding long-term equity-based incentive compensation awards for the Company’s named executive officers as of December 31, 2023.

  23. Outstanding Equity Awards at Fiscal Year End

    | | Option Awards | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (# ) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($/Share) (1) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($) (2) | | Walter P. Glazer, Jr. | - | - | - | - | - 169,412 | - 3,403,487 | | Stephen R. Wawrin | - | - | - | - | - 14,363 | - 288,553 | | Patrick J. Griffin | - | - | - | - | - 9,916 | - 199,212 |

  24. Outstanding Equity Awards at Fiscal Year End

    | (1) The option exercise price is equal to the closing market price on the date the options were granted. |

  25. Outstanding Equity Awards at Fiscal Year End

    | (2) The amounts set forth in this column equal the number of unvested restricted stock units multiplied by the closing market price of the underlying common stock ($20.09) on December 31, 2023. |

  26. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation The Company does not currently maintain any nonqualified deferred compensation plans.

  27. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control Other than benefits that are generally available to all other salaried employees of the Company, the named executive officers have no agreements that would provide them with any cash payments upon termination of employment with the Company. Upon a change in control of the Company, as defined in the Escalade, Incorporated 2017 Incentive Plan (approved by the Company’s stockholders at the 2017 annual meeting), the vesting of all outstanding restricted stock unit awards would be accelerated if not assumed or substituted for by the resulting company. Based upon the closing stock price of the Company’s common stock as of December 31, 2023 ($20.09), Mr. Glazer, Mr. Wawrin, and Mr. Griffin would potentially receive value for unvested stock awards of approximately $3,891,252. Mr. Glazer’s awards have a value of $3,403,487, Mr. Wawrin’s awards have a value of $288,553, and Mr. Griffin’s awards have a value of $199,212. All restricted stock units expire on or before March 3, 2026. The potential value of unvested stock awards is computed as the closing stock price multiplied by the number of shares.

  28. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE

  29. Pay vs. Performance Table

    Pay vs. Performance Table The following table reports the compensation of the Company’s Principal Executive Officer (“PEO”), referred elsewhere in this Proxy Statement as our Chief Executive Officer and President, and the average compensation of the Company’s other named executive officers as reported in the Summary Compensation Table under “EXECUTIVE COMPENSATION” for the past two fiscal years, as well as their “compensation actually paid” as calculated pursuant to Item 402(v) of Regulation S-K as adopted by the SEC and certain performance measures required thereunder.

  30. Pay vs. Performance Table

    | Fiscal Year(1) | Summary Compensation Table Total for Walter P. Glazer, Jr., Principal Executive Officer (PEO-1)(2) | Compensation Actually Paid to PEO-1 | Summary Compensation Table Total for Scott J. Sincerbeaux, Principal Executive Officer (PEO-2)(3) | Compensation Actually Paid to PEO-2 | Average Summary Compensation Table Total for non-PEO Named Executive Officers (NEOs)(4) | Average Compensation Actually Paid to NEOs | Value of initial fixed $100 investment based on Total Shareholder Return(5) | Company Net Income for the Fiscal Year | | 2023 | $1,757,737 | $3,299,422(6) | N/A | N/A | $460,750 | $577,249(6) | $100.05 | $9,829,000 | | 2022 | $2,710,781(7) | $2,110,565(8) | N/A | N/A | $502,305 | $438,011(8) | $52.28 | $17,989,000 | | 2021 | $964,687 | $1,038,574(9) | $582,138 | $(609,875)(9) | $554,052 | $481,842(9) | $74.92 | $24,405,000 |

  31. Pay vs. Performance Table

    (1)The Company’s 2023, 2022 and 2021 fiscal years ended on December 31, 2023, December 31, 2022 and December 25, 2021, respectively. All numbers reported in this table relate to the applicable fiscal year. Beginning January 1, 2023, the Company changed its fiscal year to be the calendar year. (2)Mr. Glazer served as the Company’s interim Chief Executive Officer and President from February 19, 2021 through December 31, 2021. Effective January 1, 2022, Mr. Glazer became the Company’s full time Chief Executive Officer and President. (3)Mr. Sincerbeaux served as the Company’s Chief Executive Officer and President until February 19, 2021. (4)The non-PEO named executive officers in each of the Company’s 2021, 2022 and 2023 fiscal years were Stephen R. Wawrin, the Company’s Chief Financial Officer, Vice President Finance, and Secretary, and Patrick J. Griffin, the Company’s Vice President, Corporate Development and Investor Relations. (5)Calculated based upon the closing price of a share of the Company’s common stock on the last day of its 2020, 2021, 2022 and 2023 fiscal years, which prices were $21.69, $15.69, $10.18 and $20.09, respectively. (6)The amounts reported as “Compensation Actually Paid” in 2023 to Messrs. Glazer, Wawrin and Griffin have been calculated in accordance with Item 402(v) of SEC Regulation S-K. As required by Item 402(v), the following adjustments were made to each such individual’s 2023 total compensation in order to compute “compensation actually paid”:

  32. Pay vs. Performance Table

    | | Walter P. Glazer, Jr. (PEO-1) | Average NEOs | | Total Compensation Reported in Summary Compensation Table(a) | $1,757,737 | $460,750 | | Minus Fair Value of Equity Awards made in 2023(b) | (1,346,873) | (145,200) | | Plus Fair Value of Equity Awards granted in 2023 that are outstanding and unvested at end of 2023(c) | 1,673,698 | 139,435 | | Plus Change in Fair Value of Equity Awards granted prior to 2023 that are outstanding and unvested at end of 2023(d) | 853,271 | 51,522 | | Plus Fair Value of Equity Awards granted in 2023 that vested in 2023 | 282,171 | 56,500 | | Plus Change in Fair Value of Equity Awards granted prior to 2023 that vested in 2023(e) | 79,418 | 14,242 | | Minus Fair Value of Equity Awards granted prior to 2023 that failed to meet applicable vesting conditions | 0 | 0 | | Total | $3,299,422 | $577,249 |

  33. Pay vs. Performance Table

    (a) See Column (k) of Summary Compensation Table under “EXECUTIVE COMPENSATION.” (b) See Columns (e) and (g) of Summary Compensation Table under “EXECUTIVE COMPENSATION.” (c) Calculated based on 12/31/23 stock price ($20.09). (d) Calculated based on difference between 12/31/23 stock price ($20.09) and 12/31/22 stock price ($10.18). (e) Calculated based on difference between vesting date stock price and 12/31/22 stock price ($10.18). (7)Includes $892,425 in restricted stock units awarded to Mr. Glazer as a one-time incentive in connection with his agreement to become the Company’s full time Chief Executive Officer and President. (8)The amounts reported as “Compensation Actually Paid” in 2022 to Messrs. Glazer, Wawrin and Griffin have been calculated in accordance with Item 402(v) of SEC Regulation S-K. As required by Item 402(v), the following adjustments were made to each such individual’s 2022 total compensation in order to compute “compensation actually paid”:

  34. Pay vs. Performance Table

    | | Walter P. Glazer, Jr. (PEO-1) | Average NEOs | | Total Compensation Reported in Summary Compensation Table(a) | $2,710,781 | $502,305 | | Minus Fair Value of Equity Awards made in 2022(b) | (1,895,175) | (83,563) | | Plus Fair Value of Equity Awards granted in 2022 that are outstanding and unvested at end of 2022(c) | 1,314,767 | 63,625 | | Plus Change in Fair Value of Equity Awards granted prior to 2022 that are outstanding and unvested at end of 2022(d) | (9,185) | (24,231) | | Plus Fair Value of Equity Awards granted in 2022 that vested in 2022 | 0 | 0 | | Plus Change in Fair Value of Equity Awards granted prior to 2022 that vested in 2022(e) | (10,623) | (20,125) | | Minus Fair Value of Equity Awards granted prior to 2022 that failed to meet applicable vesting conditions | 0 | 0 | | Total | $2,110,565 | $438,011 |

  35. Pay vs. Performance Table

    (a) See Column (k) of Summary Compensation Table under “EXECUTIVE COMPENSATION.” (b) See Columns (e) and (g) of Summary Compensation Table under “EXECUTIVE COMPENSATION.” (c) Calculated based on 12/31/22 stock price ($10.18). (d) Calculated based on difference between 12/31/22 stock price ($10.18) and 12/25/21 stock price ($15.69). (e) Calculated based on difference between vesting date stock price and 12/25/21 stock price ($15.69). (9)The amounts reported as “Compensation Actually Paid” in 2021 to Messrs. Glazer, Sincerbeaux, Wawrin and Griffin have been calculated in accordance with Item 402(v) of SEC Regulation S-K. For purposes of this footnote 9, except as otherwise noted, see the Company’s 2023 Proxy Statement for all references to the Summary Compensation Table under “EXECUTIVE COMPENSATION”. As required by Item 402(v), the following adjustments were made to each such individual’s 2021 total compensation in order to compute “compensation actually paid”:

  36. Pay vs. Performance Table

    | | Walter P. Glazer, Jr. (PEO-1) | Scott J. Sincerbeaux (PEO-2) | Average NEOs | | Total Compensation Reported in Summary Compensation Table(a) | $964, 687 | $582,138(b) | $554,052 | | Minus Fair Value of Equity Awards made in 2021(c) | (69,126)(d) | 0 | (64,190) | | Plus Fair Value of Equity Awards granted in 2021 that are outstanding and unvested at end of 2021(e) | 52,295 | 0 | 48,561 | | Plus Change in Fair Value of Equity Awards granted prior to 2021 that are outstanding and unvested at end of 2021(f) | (15,000) | 0 | (54,510) | | Plus Fair Value of Equity Awards granted in 2021 that vested in 2021(g) | 108,007(h) | 0 | 0 | | Plus Change in Fair Value of Equity Awards granted prior to 2021 that vested in 2021(i) | (2,289) | (25,546) | (2,071) | | Minus Fair Value of Equity Awards granted prior to 2021 that failed to meet applicable vesting conditions(j) | 0 | (1,166,467)(k) | 0 | | Total | $1,038,574 | $(609,875) | $481,842 |

  37. Pay vs. Performance Table

    (a) See Column (k) of Summary Compensation Table under “EXECUTIVE COMPENSATION” for Messrs. Glazer, Wawrin and Griffin. See Column (k) of Summary Compensation Table under “EXECUTIVE COMPENSATION” of the Company’s 2022 Proxy Statement as relates to Mr. Sincerbeaux. (b) Includes $435,373 in salary for Mr. Sincerbeaux, which was the amount owed to him for the full 2021 fiscal year pursuant to his Executive Severance Agreement. (c) See Column (g) of Summary Compensation Table under “EXECUTIVE COMPENSATION” for Messrs. Glazer, Wawrin and Griffin. See Column (g) of Summary Compensation Table under “EXECUTIVE COMPENSATION” of the Company’s 2022 Proxy Statement as relates to Mr. Sincerbeaux. (d) Consists of restricted stock units issued to Mr. Glazer for service as a non-employee director of the Company in 2021. (e) Calculated based on 12/25/21 stock price ($15.69). (f) Calculated based on difference between 12/25/21 stock price ($15.69) and 12/26/20 stock price ($21.69). (g) Calculated based on vesting date stock price. (h) Consists of shares of Company stock issued to Mr. Glazer in lieu of cash for services as a non-employee director of the Company in 2021. (i) Calculated based on difference between vesting date stock price and 12/26/20 stock price ($21.69). (j) Calculated based on 12/26/20 stock price ($21.69). (k) Consists of awards of restricted stock and restricted stock units that were forfeited in 2021 upon Mr. Sincerbeaux’s cessation of service as the Company’s Chief Executive Officer and President.

  38. Relationship Between Compensation Actually Paid and Presented Company Performance Measures

    Relationship Between Compensation Actually Paid and Presented Company Performance Measures Compensation Actually Paid. The amounts of “Compensation Actually Paid” shown in the above Pay vs. Performance Table have been calculated as required by Item 402(v) of SEC Regulation S-K. Such calculated amounts do not represent the actual amount of compensation earned by or paid to such individuals in the fiscal years shown. Item 402(v) also requires that the Company’s total shareholder return (TSR) and net income for each of the fiscal years shown be included in the Pay vs. Performance Table as Company performance measures. While the Compensation Committee considers TSR and net income in determining executive compensation, the Committee also utilizes various other performance measures in seeking to align executive compensation with the Company’s performance as well as certain subjective measures, all as described in more detail under “Compensation Discussion and Analysis (CD&A).” Relationship Between Compensation Actually Paid, TSR and Net Income. As discussed below in more detail, the Company believes that “compensation actually paid” with respect to its named executive officers generally aligns with the Company’s TSR and net income in fiscal years 2023, 2022 and 2021. In fiscal year 2023, the Company’s TSR increased significantly due to the Company’s stock price at December 31, 2023 being approximately 1.97 times the Company’s stock price at December 31, 2022. On the other hand, the Company’s net income in fiscal year 2023 decreased by approximately 45% compared to fiscal year 2022. Because executive officer compensation is substantially related to stock performance, “compensation actually paid” likewise substantially increased overall notwithstanding that the cash incentives paid to executive officers for fiscal year 2023 significantly decreased. In fiscal years 2022 and 2021, the relationship between the “compensation actually paid” to the Company’s Principal Executive Officers and the presented performance measures is impacted by the fact that the Company experienced a change in its Principal Executive Officer in 2021. That change resulted in certain severance payments to, and forfeitures of certain equity incentive awards by, Mr. Sincerbeaux, the former Principal Executive Officer, in 2021 and in certain one-time equity incentive awards to Mr. Glazer, the new Principal Executive Officer, in 2022. Because Mr. Sincerbeaux served as the Company’s Principal Executive Officer for less than two months in fiscal year 2021, changes in the Company’s TSR and net income for fiscal years 2021 and 2022 did not have any direct relationship on the amounts paid to Mr. Sincerbeaux as those amounts were fixed pursuant to the terms of contractual arrangements entered into with him in 2020. The Company’s cumulative total shareholder return increased by approximately 91% in fiscal year 2023 compared to fiscal year 2022, which increase followed an approximately 30% decline in TSR in fiscal year 2022 compared to fiscal year 2021. Net income for fiscal year 2023 decreased approximately 45% compared to fiscal year 2022, which decrease followed an approximately 26% decline in net income compared to fiscal year 2021. Accordingly, there does not appear to be a direct correlation between the Company’s TSR and net income, particularly with respect to fiscal year 2023. For fiscal year 2023 compared to fiscal year 2022, the “compensation actually paid” to Mr. Glazer, the Company’s Chief Executive Officer and President, increased approximately 56% and the average “compensation actually paid” to the Company’s non-PEO executive officers increased approximately 32%. These increases are attributable to their stock-based incentive compensation given that the Company’s year over year stock price increased to $20.09 from $10.18. The potential value of their respective outstanding equity awards increased materially as shown above in the footnotes to the Pay vs. Performance Table. However, the cash incentive compensation paid for fiscal year 2023 compared to fiscal year 2022 decreased by approximately 36% for Mr. Glazer and by approximately 39% for the non-PEO executive officers. With respect to fiscal year 2022 compared to fiscal year 2021 the “compensation actually paid” to Mr. Glazer increased due in part to a one-time award of restricted stock units in connection with his agreement to become the Company’s full-time Chief Executive Officer and President and his first award of restricted stock units received for his service in that role. The average “compensation actually paid” to the Company’s non-PEO named executive officers decreased approximately 9% in 2022 compared to 2021. The annual cash incentive compensation paid to Mr. Glazer in 2022 decreased approximately 37% compared to 2021 and the average annual incentive compensation paid to the Company’s non-PEO named executive officers in 2022 decreased approximately 34% compared to 2021. Also, with respect to fiscal year 2022, the value of their respective outstanding equity awards decreased substantially as shown above in the footnotes to the Pay vs. Performance Table given that the Company’s year over year stock price decreased to $10.18 from $15.69. Accordingly, notwithstanding that the Company’s TSR and net income are not necessarily in direct alignment, the Company believes that the amount of “compensation actually paid” bears a significant correlation to the Company’s total shareholder return, particularly as to stock-based incentive compensation, and to the Company’s net income, particularly as to cash incentive compensation, for the fiscal years shown above.