DEF 14A of Geospace Technologies Corp
Filed Dec 27, 2024 · FY20240001437749-24-038442
Proposal I: Election of Directors
Proposal I: Election of Directors At the Annual Meeting, the stockholders will elect two Class III directors. The Board is divided into three classes, each class being composed as equally in number as possible. The classes have staggered three-year terms, with the term of one class expiring at each Annual Meeting of stockholders. The nominating and corporate governance committee of the Company has nominated Edgar R. Giesinger, Jr., whose term expires at the 2025 Annual Meeting, and Richard J. Kelley, the Company’s President and Chief Executive Officer, to serve as Class III directors for a three-year term expiring at the 2028 Annual Meeting of Stockholders. Gary D. Owens, a current Class III director, has elected to retired from the Board and not seek re-election at the 2025 Annual Meeting. The nominating and corporate governance committee considered various criteria to evaluate the potential candidates including, without limitation, (1) independence, (2) qualification to serve on the committees of the Board, (3) knowledge of water utility, energy and industrial industries, (4) continuing overall contributions and valuable input to the Board and its committees, and (5) a collaborative, persuasive and articulate personality. The nominating and corporate governance committee also considers such person’s diversity attributes (e.g., perspectives, professional experience, experiences derived from high-quality business, skills, background and gender) as a whole and does not necessarily attribute any greater weight to one attribute. Each candidate is considered in the context of their contribution to the Board as a whole with the objective of assembling a group that best contributes to the success of the Company and represents stockholder interests through the exercise of sound judgment, using its diversity of perspectives, skills and experiences. After discussions, the nominating and corporate governance committee determined that Mr. Giesinger and Mr. Kelley satisfied the criteria considered by the nominating and corporate governance committee, and nominated Mr. Giesinger and Mr. Kelley to stand for election as Class III director on the Board of the Company. Mr. Giesinger and Mr. Kelley have been nominated by the nominating and corporate governance committee to serve as Class III directors for a three-year term expiring at the 2028 Annual Meeting of Stockholders. The directors in Class I are serving terms that expire at the 2026 Annual Meeting of Stockholders. The directors in Class II are serving terms that expire at the 2027 Annual Meeting of Stockholders. Ms. Ashworth, Mr. Jumper, Dr. Thomas L. Davis, Ph.D., Mr. Richard F. Miles and Mr. Edgar R. Giesinger, Jr. are independent, as defined in Rule 5605(a)(2) of the NASDAQ Stock Market Rules, as currently applicable to the Company. The Board has determined that of the persons nominated to serve as Class III directors, Mr. Giesinger is independent under the criteria established by the NASDAQ Stock Market Rules. Information regarding the director nominees and directors whose terms will continue after the Annual Meeting follows.
Proposal I: Election of Directors
| Nominees for Election Class III Directors | Age | Position | Director Since | | Edgar R. Giesinger, Jr. (a)(b) | 68 | Director | 2015 | | Richard J. Kelley | 56 | Director | N/A |
Proposal I: Election of Directors
| Other Current Directors Class I Directors (Terms Expiring at the 2026 Annual Meeting of Stockholders) | | | | | Thomas L. Davis, Ph.D. (a)(c) | 77 | Director | 1997 | | Richard F. Miles (a)(b)(c) | 76 | Director | 2013 | | Walter R. Wheeler | 71 | Director | 2015 |
Proposal I: Election of Directors
| Class II Directors (Terms Expiring at the 2027 Annual Meeting of Stockholders) | | | | | Margaret Sidney Ashworth (c)(b) | 73 | Director | 2020 | | Stephen C. Jumper (a)(b)(c) | 63 | Director | 2023 |
Proposal I: Election of Directors
| (a) Member of the audit committee, in which Mr. Giesinger is chairman. |
Proposal I: Election of Directors
| (b) Member of the compensation committee, in which Mr. Miles is chairman. |
Proposal I: Election of Directors
| (c) Member of the nominating and corporate governance committee, in which Ms. Ashworth is chairman. |
Background of Nominees and Continuing Directors
Background of Nominees and Continuing Directors Richard J. Kelley became the Company’s President and Chief Executive Officer on October 1, 2024. Mr. Kelley served as the Company’s Chief Operating Officer from April to September 30, 2024. Before joining the Company, Mr. Kelley spent 17 years at Sercel, Inc. where he served in various leadership roles including President as well as Vice President of Operations. Prior to that, he was a Vice President at both KMT Waterjet Systems and Uson. He also was Director of Manufacturing at Varco. Mr. Kelley has an extensive background in operational management within manufacturing organizations. Mr. Kelley earned his Bachelor of Science in Mechanical Engineering at the University of Texas in Austin and his Masters of Business Administration from the University of Houston. Edgar R. Giesinger, Jr. has been a director since November 2015. Mr. Giesinger retired as a managing partner from KPMG LLP on September 30, 2015. He has 35 years of accounting and finance experience working mainly with publicly traded corporations. Over the years, he has advised a number of clients in accounting and financial matters, capital raising, international expansions and in the dealings with the Securities and Exchange Commission. While working with companies in a variety of industries, his primary focus has been energy and manufacturing clients. Mr. Giesinger is a Certified Public Accountant in the State of Texas and former Chairman of the Texas Tri-Cities Chapter of the National Association of Corporate Directors. He has lectured and led seminars on various topics dealing with financial risks, controls and financial reporting. Mr. Giesinger serves as director and audit committee member on the board of Solaris Energy Infrastructure, Inc. (ticker symbol “SEI”), a NYSE listed manufacturer and provider of proppant management systems for oil and gas well sites. Mr. Giesinger also serves as director and audit committee member on the board of Mach Natural Resources LP (ticker symbol “MNR”), a NYSE listed independent upstream oil and gas company. The Board believes that Mr. Giesinger’s extensive financial and accounting experience, including that related to the energy and manufacturing industries, enables him to effectively serve as a director. Thomas L. Davis, Ph.D. became a director in connection with the Company’s initial public offering in November 1997. Dr. Davis was appointed University Professor Emeritus by the Colorado School of Mines in 2016, where he has worked since 1980. He has also been a coordinator of the Reservoir Characterization Project, an industry consortium of the Colorado School of Mines, since it was founded in 1985, with the objective of characterizing reservoirs through development and application of 3-D and time lapse 3-D multicomponent seismology. Dr. Davis consults and lectures worldwide and has written and co-edited numerous papers and other works in the field of seismic interpretation. The Board believes that Dr. Davis’ industry specific experience and expertise and the unique perspective gained from serving as a professor at the Colorado School of Mines enable him to effectively serve as a director. Richard F. Miles has been a director since May 2013. Mr. Miles is the former Chief Executive Officer and a former director of Geokinetics Inc. He held that position from August 2007 until his retirement in November of 2012. Mr. Miles also served as President of Geokinetics from August 2007 until May 2012, Chief Operating Officer from March 2007 until August 2007, and President-International Operations from September 2006 until March 2007 following Geokinetics’ acquisition of Grant Geophysical Inc. Mr. Miles served as Director, President and Chief Executive Officer of Grant Geophysical from January 2001 until September 2006. From 1990 to 2000, he was President and Chief Executive Officer of Syntron Inc., a unit of Tech-Sym Corporation. Prior to that, he held various executive positions of increasing responsibility with Geosource Marine Inc. and Geophysical Services Inc. Mr. Miles has over 50 years of international experience in the seismic industry both operationally and in manufacturing. Mr. Miles has served on the Board of Directors of three other public companies as well as several non-profit boards including the International Association of Geophysical Contractors from 1992 – 2007, where he served as Chairman from 1997 –1998. Mr. Miles has an MBA from Southern Methodist University. The Board believes that Mr. Miles’ extensive history and depth of understanding in the seismic industry enables him to effectively serve as a director. Walter R. Wheeler has been a director since November 2015. Mr. Wheeler currently serves as the Company’s Senior Strategic Officer, which he will hold until his retirement on December 31, 2024. Mr. Wheeler served as the Company’s President and Chief Executive Officer from January 2014 to September 30, 2024. He served as the Company’s Executive Vice President and Chief Operating Officer from 2012 until December 31, 2013. He had been a design engineer with the Company since 1997. Prior to 1997, Mr. Wheeler worked for 13 years as a design engineer at Input/Output, Inc. Mr. Wheeler received his Bachelor of Science degree in Electrical Engineering from Rice University. The Board believes that Mr. Wheeler’s depth of understanding of the Company’s operations and strategy, his strong leadership skills, his extensive employment experience with the Company, and his significant industry and management expertise enable him to effectively serve as a director. Margaret Sidney Ashworth has been a director since December 2020. Ms. Ashworth is the former Vice President of Government Relations for Northrop Grumman Corporation. She held that position from 2010 until her retirement in 2017. Ms. Ashworth has served as a Board member of PDS Technologies Inc. since 2018. In 2010, she served as Vice President of Washington Operations for GE Aviation Systems. Prior to that, she spent 14 years as a professional staff member with the U.S. Senate Committee on Appropriations from 1994 until 2009. For more than a decade, Ms. Ashworth has worked as a civilian in the Department of the Army, focused on resource management, force structure, and strategy. Ms. Ashworth earned a master’s degree in business administration from Campbell University and a bachelor’s degree in management from the University of Maryland. The Board believes that Ms. Ashworth’s management expertise and extensive experience in government relations enable her to effectively serve as a director. Stephen C. Jumper has been a director since December 2023. Mr. Jumper was appointed Chairman of the Board in November 2024. Mr. Jumper is the former President, Chief Executive Officer and Chairman of the Board of Directors of Dawson Geophysical Inc. During his thirty-eight year career with Dawson Geophysical, he held the positions of President and Chief Executive Officer from February 2015 until December 2023 and served as Chairman of the Board of Directors from February 2015 to March 2023. Mr. Jumper joined Legacy Dawson in 1985, was elected Vice President in September 1997, and President, Chief Operating Officer and Director in January 2001. In January 2013, Mr. Jumper was elected Chairman of the Board of Directors of Legacy Dawson. Prior to that, Mr. Jumper served Legacy Dawson as manager of technical services with an emphasis on 3-D processing. Graduating from the University of Texas at Austin in December of 1984, Jumper received a Bachelor of Science degree in Geological Sciences. Mr. Jumper has formerly served as the Permian Basin Geophysical Society Second Vice President in 1991, First Vice President in 1992 and as President in 1993. The Board believes that Mr. Jumper’s broad seismic industry experience and connections enable him to effectively serve as a director.
Director Nominees and Continuing Directors Skills Matrix
Director Nominees and Continuing Directors Skills Matrix
Director Nominees and Continuing Directors Skills Matrix
| | Demographics | | | | Functional | | | | | | Industry | | | | Intl. | | | Age | Total Public Directorships | Independent | Gender | CEO | Senior Officer/COO | Financial Expertise | Applied Science & Engineering | Government Relations & Contracts | Human Resource Management | Geophysics & Seismology | Oil & Gas | Defense, Homeland Security & Intelligence. | Capital Intensive Mfg. | Global | | Richard J. Kelley | 56 | - | | M | * | * | × | * | × | * | * | + | × | * | + | | Walter R. Wheeler | 70 | 1 | | M | * | * | × | * | × | * | × | + | × | * | + | | Richard F. Miles | 75 | 1 | ✔ | M | * | * | × | + | × | * | * | × | | * | * | | Thomas L. Davis, Ph.D. | 77 | 1 | ✔ | M | | | × | * | | + | * | + | | | + | | Edgar R. Giesinger, Jr. | 68 | 3 | ✔ | M | | + | * | | | * | | × | | | + | | Margaret Sidney Ashworth | 73 | 1 | ✔ | F | | + | × | | * | * | | | * | | * | | Stephen C. Jumper | 62 | 1 | ✔ | M | * | * | + | * | × | + | * | * | × | × | + |
Director Nominees and Continuing Directors Skills Matrix
| Key | | | * | Expert | | + | Proficient | | × | Competent | | | Limited |
Compensation of Directors
Compensation of Directors The following table summarizes compensation paid to each non-employee director during the fiscal year ended September 30, 2024. For details of compensation paid to Mr. Wheeler, please see “Summary Compensation Table.”
Director Compensation
Director Compensation
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | All Other Compensation ($) (2) | Total ($) | | Gary D. Owens | 82,513 | 65,856 | -- | 148,369 | | Thomas L. Davis, Ph.D. | 79,513 | 65,856 | -- | 145,369 | | Edgar R. Giesinger, Jr. | 79,513 | 65,856 | -- | 145,369 | | Richard F. Miles | 79,513 | 65,856 | -- | 145,369 | | Margaret Sidney Ashworth | 79,513 | 65,856 | -- | 145,369 | | Stephen C. Jumper (3) | 51,256 | 65,856 | -- | 117,112 |
Director Compensation
| (1) Represents 4,200 restricted stock units granted to each director on February 7, 2024. Restricted stock units represent a contingent right to receive one share of Common Stock upon vesting. The units vest on February 6, 2025. As required by SEC rules, amounts in this column represent the aggregate grant date fair value of stock-based compensation expense as required by FASB ASC Topic 718 Stock Based Compensation. A discussion of the assumptions used to value the restricted stock awards is contained in the notes to the Company’s financial statements. |
Director Compensation
| (2) All directors of the Company are reimbursed for ordinary and necessary expenses incurred in attending Board and committee meetings, however no director was reimbursed more than $10,000 in other compensation during the fiscal year ended September 30, 2024. |
Director Compensation
| (3) Mr. Jumper joined the Board effective December 21, 2023. |
Director Compensation
For the fiscal year ended September 30, 2024, each non-employee director received $31,013 for the first six months of the fiscal year and $35,000 for the last six months of the fiscal year, in cash, paid in four equal quarterly installments. The Chairman of the Board receives an additional $15,000 per year and the Lead Independent Director (which position was terminated when Mr. Jumper was elected Chairman of the Board) and each committee chairperson receives an additional $12,000 per year. The additional fees are paid in cash, in four equal quarterly installments. The Board considers director compensation at other energy companies when targeting compensation for its non-employee directors and believes that its target compensation is below the median. The following table indicates the aggregate number of shares of Common Stock subject to outstanding unvested stock awards that each non-employee director held as of September 30, 2024:
Director Compensation
| Name | Stock Awards # | | Gary D. Owens | 4,200 | | Edgar R. Giesinger, Jr. | 4,200 | | Thomas L. Davis, Ph.D. | 4,200 | | Tina M. Langtry | 4,200 | | Richard F. Miles | 4,200 | | Stephen C. Jumper | 4,200 | | Margaret Sidney Ashworth | 4,200 |
Director Compensation
Based upon input and benchmarking from Fredrick W. Cook & Co., Inc., an independent compensation consultant (the “Compensation Consultant”) the Company closely aligns its allocation of cash and equity compensation for directors with its peer group and broader current public company practice. To enhance alignment, the Company intends to adjust the allocation by gradually decreasing the annual cash retainer over time, while increasing the annual equity grant to a more market competitive mix with equal weighting between cash and equity.
Elements of Compensation
Annual Performance Bonuses For fiscal year 2024, the Board adopted comprehensive company-wide bonus compensation criteria (the “2024 Bonus Criteria”) for all employees. The 2024 Bonus Criteria, which follows the same principles, goals and criteria as in the bonus program and criteria previously established for prior fiscal years, set forth various targets and criteria for the Company’s operating performance and established a cash bonus, assessed on an individual basis, for employees of the Company. The financial targets were designed to provide incentives for the employees to work as a team to improve the Company’s financial results. Under the 2024 Bonus Criteria, every employee of the Company is eligible to participate in Tier I of the bonus plan. Under Tier I, employees share proportionally in the Company’s profits based on each employee’s relative payroll. The Tier I bonus pool is established by accruing 20% of consolidated pretax profits (before bonus) above a specified range. Various management teams, including the executive officers, and selected key employees are eligible to participate in Tier II of the 2024 Bonus Criteria, which applies after Tier I is fully funded. The Tier II bonus pool is established by accruing 20% of consolidated pretax profits (before bonus) within a specified range above Tier I. Under Tier II, certain participants share in the bonus pool depending on the satisfaction of predefined goals by their respective working groups. Should the Company’s pretax profits (before bonus) exceed the amount required to achieve fully funded Tier I and Tier II bonus pools, the bonus pools will be additionally funded at the rate of 10% of subsequent excess pretax profits (before bonus), divided between Tier 1 and Tier II according to the ratio of their initial targeted amounts. None of the NEOs were required to satisfy individual predefined goals under the 2024 Bonus Criteria. Tier I bonuses are paid if the Company reaches a predetermined pretax profit (before bonus) level. Tier II is based on attaining a predetermined consolidated pretax profits (before bonus) level as well as, in most cases (but not in the case of NEOs), specific performance criteria of the group eligible for the bonus. The predetermined pretax profits (before bonus) levels as well as the specific performance criteria are re-evaluated annually. The groups eligible for Tier II bonuses in one year are not necessarily eligible the following year. The eligible groups are selected based on management’s goals for improvement across the Company. The Company’s NEOs were not required to achieve individual performance targets in order to earn their respective annual cash incentive payments under the 2024 Bonus Criteria. However, the consolidated pretax profits (before bonus) of the Company must reach a predetermined threshold before Tier I or Tier II bonus payments will be made. The difficulty of attaining the performance criteria fluctuates in response to the Company’s industry, market and overall performance. While each of the Company’s NEOs had the ability to influence the Company’s financial performance, none of them can ensure that the Company’s performance will rise to the level of satisfying the Tier I or Tier II thresholds. For fiscal year 2024, the Tier I bonus pool was funded in the amount of $1,050,000. No Tier II bonuses were funded or paid for fiscal year 2024. The bonuses were paid in December 2024. The Tier I bonuses earned by the Company’s NEOs for fiscal year 2024 were $9.958 for Mr. Wheeler, $7,668 for Mr. Curda and $9,020 for Mr. Adams. For fiscal year 2023, the Tier I bonus pool was funded in the amount of $1,622,000. No Tier II bonuses were funded or paid for fiscal year 2023. The Tier I bonuses earned by the Company’s NEO’s for fiscal year 2023 were $15,812 for Mr. Wheeler, $11,294 for Mr. Curda and $14,005 for Mr. Adams. Goal Oriented Discretionary Cash Bonuses If certain executive officers do not receive any payments under the bonus program described above, they are eligible to receive goal oriented discretionary cash bonuses up to 30% of their respective base salary based on individualized goals and other factors which are evaluated on an on-going basis by the compensation committee and Board. For fiscal year 2024 and 2023 no goal-oriented bonuses paid. Long-Term Stock-Based Compensation The Company believes that long-term incentive compensation is an important component of its compensation program and that the value of this compensation should be directly related to increases in stockholder value. In addition to base salaries, annual performance bonuses, and goal-oriented discretionary cash bonuses, the executive officers have historically participated in the 2014 Plan, which allows the Company to grant long-term incentive compensation to its executive officers and directors in the form of stock options, restricted stock awards, restricted stock unit (“RSU”) awards, and other awards. RSU awards represent a contingent right to receive one share of Common Stock upon vesting. Historically, equity incentive compensation awards were determined based on an individual’s annual compensation and his or her contribution to the Company. The compensation committee independently sets and recommends stock option grants, restricted stock awards, and RSU awards for the Company’s executive officers to the full Board for approval. Such awards may include service-based vesting and performance goal based vesting provisions. Proposals for stock option, restricted stock awards, and RSU awards to non-executives is presented by the President and Chief Executive Officer and approved by the Board upon the recommendation of the compensation committee. Mr. Wheeler abstains from voting with respect to his own compensation and grants of equity awards. On November 21, 2022, the Company granted the following RSU awards, with Mr. Wheeler receiving 4,000 RSU awards with service-based vesting provisions and 15,000 RSU awards with both service-based and performance-based vesting provisions; and each of Messrs. Curda and Adams receiving 3,500 RSU awards with service-based vesting provisions and 14,500 RSU awards with both service-based and performance-based vesting provisions. The vesting of the performance-based RSU awards were conditioned on the achievement of consolidated revenue growth thresholds for fiscal year 2023. No restricted stock awards or stock options were awarded in fiscal year 2023. On November 16, 2023, based on the Company’s total revenue for fiscal year 2023, the compensation committee determined that all of the vesting provisions had been met on the performance-based RSU awards granted on November 21, 2022, with the exception of Mr. Sheen, in which 3,250 of his awards were forfeited. On November 16, 2023, the Company granted the following RSU awards, with Mr. Wheeler receiving 4,000 RSU awards with service-based vesting provisions and 15,000 RSU awards with both service-based and performance-based vesting provisions; each of Messrs. Curda and Adams receiving 3,500 RSU awards with service-based vesting provisions and 14,500 RSU awards with both service-based and performance-based vesting provisions. The vesting of the performance-based RSU awards were conditioned on the achievement of consolidated revenue growth thresholds for fiscal year 2024. No restricted stock awards or stock options were awarded in fiscal year 2024. On November 21, 2024, based on the Company’s total revenue for fiscal year 2024, the compensation committee determined that none of the vesting provisions had been met on the performance-based RSU awards granted on November 16, 2023 and these awards were forfeited.
Elements of Compensation
The Board and the compensation committee intend to make annual grants of RSU awards to the Company’s executive officers which may include service-based vesting and performance-based vesting provisions to be determined by the compensation committee each year. The compensation committee will review the long-term incentive program each year to ensure that the key elements of the program continue to meet the objectives described above. Benefits The Company offers a variety of health and welfare and retirement programs to all eligible employees. Executive officers generally are eligible for the same benefit programs on the same basis as the rest of the broad-based employees. The health and welfare programs are intended to protect employees against catastrophic loss and encourage a healthy lifestyle. The Company’s health and welfare programs include medical, wellness, pharmacy, dental, life insurance and accidental death and disability. Each employee receives life insurance equal to the employee’s annual salary with a maximum payout of $100,000 and accidental death and dismemberment coverage. The Company maintains a defined contribution retirement plan that is intended to qualify under Section 401(k) of the Code. The plan covers all full-time employees who meet age and service requirements. The plan provides for pre-tax, elective employee contributions with a matching contribution from us ranging from 50% to 100% of employee contributions, up to a maximum of 3.5% of the employee’s annual salary. The Company offers vacation time determined by years of service. As of September 30, 2024, Mr. Curda had accrued 190 hours of vacation; Mr. Adams had accrued 290 hours of vacation; and Mr. Wheeler had accrued 274 hours of vacation. Employees, including executive officers, may roll over up to 160 hours of unused vacation time to subsequent years. The Company also maintains a key man life insurance policy on Mr. Curda exclusively for its benefit.
Summary Compensation Table
Summary Compensation Table The following table sets forth certain information regarding compensation paid for services rendered during the fiscal years ended September 30, 2024 and 2023, respectively, to each of the Company’s NEOs:
2024 Summary Compensation Table
2024 Summary Compensation Table
2024 Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1)(2) | Non-Equity Incentive Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Walter R. Wheeler, President and | 2024 | 379,615 | 164,780 | 9,958 | 13,634 | 567,987 | | Chief Executive Officer | 2023 | 350,000 | 63,000 | 15,812 | 10,927 | 439,739 | | Robert L. Curda, Vice President, | 2024 | 292,308 | 154,972 | 7,668 | 10,369 | 465,317 | | Chief Financial Officer and Secretary | 2023 | 250,000 | 59,250 | 11,294 | 8,877 | 329,421 | | Robbin B. Adams, Senior Vice President and | 2024 | 343,846 | 154,972 | 9,020 | 12,797 | 520,635 | | Chief Technical Officer | 2023 | 310,000 | 59,250 | 14,005 | 10,562 | 393,817 |
2024 Summary Compensation Table
| (1) As required by SEC rules, amounts in this column represent the aggregate grant date fair value of stock-based compensation expense as required by FASB ASC Topic 718 Stock Based Compensation. A discussion of the assumptions used to value the restricted stock units are contained in the notes to the Company’s financial statements for the fiscal year ended September 30, 2024 under Note 14 “Stockholders’ Equity”. |
2024 Summary Compensation Table
| (2) Includes restricted stock units with service-based only vesting provisions and restricted stock units with both service-based and performance-based vesting provisions. The value reported with respect to units with both service-based and performance-based vesting provisions is based on probable outcome. For fiscal year 2024, the value at grant date, assuming the achievement of the highest level of performance conditions, was $223,600 for Mr. Wheeler and $211,860 for each of Mr. Curda and Mr. Adams. For fiscal year 2023, the value at grant date, assuming the achievement of the highest level of performance conditions, was $85,500 for Mr. Wheeler and $59,250 for each of Mr. Curda and Mr. Adams. |
2024 Summary Compensation Table
| (3) The values listed were awarded under the 2024 and 2023 Bonus Plan, but not paid until December 2024 and 2023, respectively. The Bonus Plan was designed with a two-tier structure. For fiscal years 2024 and 2023, the Tier I pool, which is allocated among all employees based upon relative payroll amounts was capped at $3,300,000 and $3,000,000, respectively. The Tier I pool for fiscal years 2024 and 2023 was funded by an accrual of 20% of any pretax profits in excess of the minimum predetermined threshold (5% return on stockholder equity). For fiscal years 2024 and 2023, the Tier II pool was capped at $3,300,000 and $3,000,000, respectively, funding at 20% of any pretax profits in excess of the minimum predetermined threshold. For fiscal years 2024 and 2023, bonuses of $1,050,000 and $1,622,000, respectively, were funded from Tier I. No bonuses were funded for Tier II for fiscal years 2024 and 2023. |
2024 Summary Compensation Table
| (4) Represents compensation related to participation in the Company's 401(k) retirement matching program and group term life insurance. |
2024 Summary Compensation Table
Narrative Disclosure to Summary Compensation Table In December 2024, the Company entered into a termination agreement (the “Agreement”) with Mr. Wheeler effective January 1, 2025. Pursuant to the terms of the Agreement, Mr. Wheeler will receive a severance of $350,000, which will be paid in cash on July 1, 2025. The Company also agreed to vest Mr. Wheeler’s 14,750 outstanding restricted stock units effective January 1, 2025. Mr. Adams has an employment agreement with the Company which automatically renews each January 1 for an additional two years unless the Company provides notification no fewer than 30 days prior to such January 1 date that it will not be extending the agreement. Pursuant to the employment agreement Mr. Adams may be entitled to severance benefits upon termination as discussed in the “Potential Payments upon Termination or Change-in-Control” section below.
Pay Versus Performance Table
Pay Versus Performance Table The following table shows the total compensation for the NEO as set forth in the Summary Compensation Table, the compensation “actually paid” (“CAP”) to the NEOs, the Company’s total shareholder return (“TSR”), and our net income (loss) for the fiscal years ended September 30, 2024, 2023 and 2022:
Pay Versus Performance Table
| Fiscal Year | Summary Compensation Table Total For CEO ($)(1) | Compensation Actually Paid to CEO ($)(1)(4) | Average Summary Compensation Table Total for Non-CEO NEOs ($)(2) | Average Compensation Actually Paid to Non-CEO NEOs ($)(4) | Value of Initial Fixed $100 Investment Based on TSR ($)(3) | Net Income (Loss)($) | | 2024 | 567,987 | 628,730 | 492,976 | 555,375 | 108.27 | (6,578,000) | | 2023 | 439,739 | 700,716 | 361,619 | 610,114 | 135.60 | 12,206,000 | | 2022 | 502,505 | 263,554 | 411,642 | 188,568 | 46.18 | (22,856,000) |
Pay Versus Performance Table
| (1) The Company’s Chief Executive Officer (“CEO”) was Mr. Wheeler. |
Pay Versus Performance Table
| (2) The Company’s Non-CEO NEOs were Messrs. Adams and Curda. |
Pay Versus Performance Table
| (3) TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
Pay Versus Performance Table
| (4) SEC rules require that certain adjustments be made to the Summary Compensation Table totals to determine CAP, as reported in the Pay versus Performance Table above. The following table details the applicable adjustments that were made to determine CAP. |
Pay Versus Performance Table
| Fiscal Year | Summary Compensation Table Total For CEO ($) | Deduct Stock Awards from Summary Compensation Table ($) | Add Year- End Fair Value of Unvested Awards Granted in the Year ($) | Add Change in Fair Value of Unvested Awards Granted in Prior Years ($) | Add Fair Value of Awards Granted and Vested in the Year ($) | Add Change in Fair Value of Prior Years’ Awards Vested in the Year ($) | Deduct Fair Value at End of Prior Year of Awards that Failed to Meet Vesting Conditions in the Year ($) | Compensation Actually Paid to CEO ($) | | 2024 | 567,987 | 164,780 | 196,460 | 36,806 | -- | (7,743) | -- | 628,730 | | 2023 | 439,739 | 63,000 | 246,050 | 120,628 | -- | 1,399 | 44,100 | 700,716 | | 2022 | 502,505 | 141,103 | 83,790 | (81,448) | -- | (4,690) | 95,500 | 263,554 |
Pay Versus Performance Table
| Fiscal Year | Average Summary Compensation Table for Non- CEO NEOs ($) | Deduct Average Stock Awards from Summary Compensation Table ($) | Add Average Year-End Fair Value of Unvested Awards Granted in the Year ($) | Add Average Change in Fair Value of Unvested Awards Granted in Prior Years ($) | Add Average Fair Value of Awards Granted and Vested in the Year ($) | Add Average Change in Fair Value of Prior Years’ Awards Vested in the Year ($) | Deduct Average Fair Value at End of Prior Year of Awards that Failed to Meet Vesting Conditions in the Year ($) | Average Compensation Actually Paid to Non-CEO NEOs ($) | | 2024 | 492,976 | 154,972 | 186,120 | 38,450 | -- | (7,199) | -- | 555,375 | | 2023 | 361,619 | 59,250 | 233,100 | 111,020 | -- | 1,110 | 37,485 | 610,114 | | 2022 | 411,642 | 133,497 | 79,380 | (78,287) | -- | (4,720) | 85,950 | 188,568 |
Description of Relationships Between Compensation Actually Paid and Performance
Description of Relationships Between Compensation Actually Paid and Performance
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table summarize certain information regarding unvested stock and equity incentive plan awards outstanding as of the end of the fiscal year ended September 30, 2024 for each of the named executive officers:
2024 Outstanding Equity Awards at Fiscal Year-End Table
2024 Outstanding Equity Awards at Fiscal Year-End Table
2024 Outstanding Equity Awards at Fiscal Year-End Table
| | Stock Awards | | | | | Name | Number of Shares of Stock That Have Not Vested (#)(1) | Market Value of Shares of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market Value or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4) | | Walter R. Wheeler (3) | 40,250 | 416,185 | 15,000 | 155,100 | | Robert L. Curda | 37,875 | 391,628 | 14,500 | 149,930 | | Robbin B. Adams | 38,125 | 394,213 | 14,500 | 149,930 |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (1) Represents (i) restricted stock units granted on November 19, 2020, which vest in four equal annual installments with the first installment vesting on the anniversary date of the date of grant, (ii) restricted stock units granted on November 18, 2021, which vest in four equal annual installments with the first installment vesting on the anniversary date of the date of grant and (iii) restricted stock units granted on November 21, 2022, which vest in four equal annual installments with the first installment vesting on the anniversary date of the date of grant and (iv) restricted stock units granted on November 16, 2023, which vest in four equal annual installments with the first installment vesting on the anniversary date of the date of grant. Restricted stock units represent a contingent right to receive one share of Common Stock upon vesting. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (2) Represents restricted stock units granted on November 16, 2023 with both service-based and performance-based vesting provisions. The performance-based criteria required for the vesting of these awards were based on the achievement of revenue thresholds for the Company’s fiscal year ended September 30, 2024. In November 2024, the Company’s compensation committee determined that the criteria required to lapse the performance-based vesting provisions for these awards were not achieved and were forfeited. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (3) Pursuant to Mr. Wheeler’s termination agreement effective December 31, 2024, his remaining unvested restricted stock units, which total 14,750, will vest on January 1, 2025. |
2024 Outstanding Equity Awards at Fiscal Year-End Table
| (4) Represents the closing price of $10.34 per share of Common Stock on September 30, 2024. |
Potential Payments upon Termination or Change-in-Control
Potential Payments upon Termination or Change-in-Control Pursuant to his employment agreement, as amended, Mr. Adams is entitled to receive the severance benefits described below upon termination of his employment unless the termination:
Potential Payments upon Termination or Change-in-Control
| ● | results from his death, disability or retirement; |
Potential Payments upon Termination or Change-in-Control
| ● | is by the Company for Cause; or |
Potential Payments upon Termination or Change-in-Control
| ● | is by the employee other than for Good Reason. |
Potential Payments upon Termination or Change-in-Control
“Cause” is defined to mean the employee’s willful and continued failure to perform his duties after a demand for his performance of those duties or the employee’s willfully engaging in gross misconduct materially and demonstrably injurious to the Company. “Good Reason” is defined to mean a demotion, a reduction in base salary, a relocation of the employee’s base location of employment, the discontinuation of any employee benefit without comparable substitution, the failure of any successor of the Company to assume the employment agreement or a purported termination not in compliance with the employment agreement. The severance benefits to Mr. Adams would be entitled on termination would be an amount equal to the product of (a) his then-current annual salary plus the average of the bonus payments paid to the executive in respect of the three fiscal years preceding the fiscal year in which the termination occurs, multiplied by (b) two. Mr. Adams would also receive any relocation and indemnity payments to which he is entitled and any costs and legal fees incurred in connection with any dispute over his employment agreement. These payments would be due in a lump sum on the tenth day following the date of termination. The amounts paid are based on the salary rate in effect at the time of termination, unless the employee is terminating employment for Good Reason due to a reduction in salary, in which case the salary rate shall be the rate in effect prior to such reduction. So long as Mr. Adams is terminated without Cause, he is not required to perform any further agreement or action in order to receive these benefits. However, in connection with his employment agreement, he has agreed that he will not disclose or misappropriate any confidential information of the Company and that all intellectual property developed by him is the property of the Company.