DEF 14A of Bassett Furniture Industries Inc
Filed Feb 14, 2025 · FY20240001437749-25-003830
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS At the meeting, eight Directors will be elected to serve, subject to the provisions of the Bylaws, until the 2026 Annual Meeting of Stockholders and until their successors are duly elected and qualified. It is the intention of the persons named in the accompanying proxy to vote all proxies solicited by the Board of Directors FOR the eight nominees listed below unless authority to vote for the nominees or any individual nominee is withheld by a stockholder in such stockholder’s proxy. If for any reason any nominee shall not become a candidate for election as a Director at the meeting, an event not now anticipated, the proxies will be voted for the eight nominees including such substitutes as shall be designated by the Board of Directors. The eight nominees for election as Directors are listed below. All of the nominees are currently members of the Board of Directors. All were elected to their current terms, which expire in 2025, at the Annual Meeting of Stockholders held on March 6, 2024. We are asking our stockholders to re-elect each of our current directors at the Annual Meeting of Stockholders. The information set forth below includes, with respect to each nominee for election as Director, his or her age, principal occupation and employment during the past five years, the year in which he or she first became a Director of the Company, directorships held by each at other public companies during the past five years and the specific experience, qualifications, attributes and skills that led the Board to conclude that he or she should serve as a Director. In addition, our Board believes that each individual below has demonstrated outstanding achievement in his or her professional career; broad experience; wisdom, personal and professional integrity; ability to make independent, analytical inquiries; experience with and understanding of the business environment; and willingness and ability to devote adequate time to Board duties.
ELECTION OF DIRECTORS
| Name and director since | Age | Occupation during past five years, directorships and qualifications | | Emma S. Battle 2020 | 64 | President and CEO of Market Vigor, LLC, a business services company she founded in 2003. Since 2017, she has served as the President and CEO of Higher Ed Works, a nonpartisan public charity that supports higher public education in North Carolina. From 2015 to 2017, Ms. Battle was Vice President, Client Success of Windsor Circle, an e-commerce marketing company. Previously, she served in executive and senior marketing roles at Red Hat and Sara Lee Branded Apparel (Hanesbrands). She currently serves on the Board of Advisors of Elon University’s Love School of Business, and on the Executive Leadership Board of the Frank Porter Graham Child Development Institute. Ms. Battle was a member of the Board of the Southeastern Wind Coalition from 2018 to 2021 and the Board of Directors of Primo Water Corporation (PRMW) from 2019 to 2020 and has been a member of the Boards of Directors of Unifi, Inc. (UFI) and Nu Skin Enterprises, Inc. (NUS) since 2021. Ms. Battle’s knowledge and expertise in e-commerce, digital technology, sales and marketing bring much needed skills to the Board as do her commitments to sustainability and social responsibility. | | John R. Belk 2016 | 66 | Private Investor. President and Chief Operating Officer of Belk, Inc., from 2004 to 2016. As former president of a major department store chain and a director of other public companies (including Harris Teeter Supermarkets, Inc. from 1997-2014) over the last twenty years, Mr. Belk’s knowledge of retail, real estate, emerging technologies, information security, merchandising and marketing is of great value to the Company, especially in the areas of retail and enhancing the consumer’s connection with our brand. |
ELECTION OF DIRECTORS
| Name and director since | Age | Occupation during past five years, directorships and qualifications | | Kristina Cashman 2007 | 58 | Chief Executive Officer, Guy and Larry Restaurants, LLC since 2024; President and Chief Executive Officer, Cashman Restaurant & Retail Consulting since 2019; Chief Financial Officer, Hopdoddy Burger Bar, Inc. from 2014 to 2018; President of Guy and Larry Restaurants, Inc. from 2011 to 2014; Chief Financial Officer of Eddie V’s Restaurants, Inc. from 2006 through 2011; Chief Financial Officer and Secretary of P.F. Chang’s China Bistro, Inc. from 2001 to 2006; Director, Vera Bradley (VRA) since 2020 and Munchkin Inc. since 2022. As president of one restaurant chain and chief financial officer of four restaurant chains over most of the last 20 years, including a public company, with her service on boards of other retailers and manufacturers, and as an audit manager with Ernst & Young LLP prior to her employment at P.F. Chang’s, Ms. Cashman brings development, management, financial and accounting experience to the Board and its Audit Committee. | | Virginia W. Hamlet 2018 | 62 | Founder and owner of Hamlet Vineyards and Hamlet Kitchen; former Director of the Harvest Foundation. Ms. Hamlet is well qualified to serve as a member of the Board of Directors due to her entrepreneurial and marketing background, her retail and online sales experience, her experience in residential and commercial architectural design, and her experience as a civic leader in the community. | | J. Walter McDowell 2011 | 74 | Private Investor; Business Consultant. Chief Executive Officer, Carolinas/Virginia Banking – Wachovia Corporation from 2005 to 2007. Mr. McDowell’s more than 35 years of experience at Wachovia, including as the head of a major division of the bank, and later in financial and business consulting, provides valuable perspectives into the protection and deployment of the Company’s balance sheet and into its banking relationships, and provides the Audit Committee with valuable insights into the analysis of the Company’s financial statements. | | Robert H. Spilman, Jr. 1997 | 68 | Chairman since 2016 and President and Chief Executive Officer of the Company since 2000; President and Chief Operating Officer of the Company from 1997 to 2000. Director, Dominion Energy, Inc. (D), from 2009 to present. Mr. Spilman’s 40-year career at the Company, including more than 20 years as Chief Executive Officer, gives him an in-depth knowledge of the Company and the furniture industry. | | William C. Wampler, Jr. 2004 | 65 | Managing Member of Wampler Consulting Group, LLC since 1995 and of WSWRS, LLC since 2017; former Executive Director, New College Institute (2012 to 2015); former member of the Senate of the Commonwealth of Virginia (1988 to 2012); Retired Colonel, U.S. Army Reserve. As a former member of the Senate of Virginia and being the former ranking member of the Finance Committee for his party, Mr. Wampler brings to the Board over 25 years of experience in leadership, developing consensus and balancing budgets. | | William C. Warden, Jr. 2004 | 72 | Private Investor. Executive Vice President, Administration, Lowe’s Companies, Inc. (1996 to 2003). Vice Chair, Atrium Health Wake Forest Baptist. Through his senior management experience at a national retail chain, Mr. Warden brings to the Board expertise in real estate, legal, loss prevention and administrative matters that are particularly relevant to the Company’s retail operations. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
| Name | Fees earned or paid in cash (1) ($) | Stock awards ($)(2) | Total ($) | | Emma S. Battle | 55,000 | 39,995 | 94,995 | | John R. Belk | 55,000 | 39,995 | 94,995 | | Kristina Cashman | 65,000 | 39,995 | 104,995 | | Virginia W. Hamlet | 55,000 | 39,995 | 94,995 | | J. Walter McDowell | 55,000 | 39,995 | 94,995 | | William C. Wampler, Jr. | 60,000 | 39,995 | 99,995 | | William C. Warden, Jr. | 70,000 | 39,995 | 109,995 |
DIRECTOR COMPENSATION
| (1) Includes annual retainer fee, committee chairperson retainer fee and Lead Independent Director retainer fee. |
DIRECTOR COMPENSATION
| (2) Under the 2021 Stock Incentive Plan, each of the Company’s non-employee Directors received an award of 2,587 shares of restricted stock on March 6, 2024. These shares had a grant date fair value of $15.46 and will vest on March 6, 2025. |
Director Compensation
Director Compensation The Organization, Compensation and Nominating Committee is responsible for recommending director compensation to the Board of Directors. The following compensation arrangements have been recommended by the Organization, Compensation and Nominating Committee and approved by the Board of Directors. Directors who are not employees of the Company receive an annual retainer fee of $55,000. The Lead Independent Director receives an additional annual retainer fee of $15,000, the chairperson of the Audit Committee receives an additional annual retainer fee of $10,000 and the chairperson of the Organization, Compensation and Nominating Committee receives an additional annual retainer fee of $5,000. Under the 2021 Stock Incentive Plan, each non-employee director received an annual grant of $40,000 in restricted stock following the 2024 Annual Meeting of Stockholders. Directors who are also employees of the Company receive no additional compensation for serving as Directors.
Compensation Philosophy and Objectives
| ● | Motivate our executives to manage our business to meet our short-term and long-term corporate goals and business objectives, and to reward them for meeting these objectives. |
Determining Executive Compensation
In evaluating the compensation generally paid by similarly situated companies, we have historically taken into account available data relating to the compensation practices of other companies within and outside our industry, with advice from our independent compensation consultant, Korn Ferry. Our peer group for 2024 consisted of American Woodmark, Culp, Ethan Allen Interiors, Flexsteel Industries, Haverty Furniture, Hooker Furnishings, Kirkland’s, La-Z-Boy, Lovesac, Sleep Number and Purple Innovation. Korn Ferry does not provide any other services to the Company and the Compensation Committee has determined that Korn Ferry’s work does not present any conflict of interest with the Company. With advice from Korn Ferry, for our 2024 peer group we added Sleep Number, replacing Kimball International, which was acquired in 2023 and is no longer a publicly traded company, and we have removed Bowflex after the filing of its bankruptcy petition. During 2023, Korn Ferry, prepared for the Compensation Committee a report analyzing our named executive officers’ pay compared to our peers. The analysis relative to our peer group found that total direct compensation (i.e., salary, annual bonus and equity incentives combined) was below the 25th percentile for our CEO and for our other named executive officers. At the 2024 Annual Meeting of Stockholders, we received substantial support for the compensation of our named executive officers, with approximately 97% of the votes cast on the “say-on-pay” proposal approving such compensation.
Elements of our Executive Compensation Program
Elements of our Executive Compensation Program Our executive compensation primarily consists of base salary, annual performance-based bonus awards and retirement benefits designed to promote long-term employment. The Committee also periodically grants long-term equity incentive awards when it feels appropriate, based on advice from its compensation consultant regarding market trends, comparable pay levels at our compensation peer group, retention factors and other considerations; the last equity awards to our executive officers were granted in fiscal 2023. We discuss each of the primary elements of our executive compensation in detail below. While we have identified particular compensation objectives that each element of executive compensation serves, our compensation programs are designed to complement each other and collectively serve all of our executive compensation objectives described above. Base Salary Base salaries are intended to provide a level of compensation sufficient to attract and retain an effective management team when considered in combination with other components of our compensation program. The base salary of each executive officer is reviewed annually to determine if it is equitably aligned with our other executive officers and at a sufficient level to attract and retain top talent. Base salaries for two of the named executive officers were increased by 5.3% during the last month of fiscal 2024. Consistent with our emphasis on paying for performance and aligning our executives’ interests with those of our stockholders, our chief executive officer’s base salary has increased only 4.3% in the aggregate from fiscal 2022 to fiscal 2025. Annual Performance-Based Bonus Awards The primary objectives of our annual performance-based bonus awards are to provide incentive for superior work, to motivate our executives toward higher achievement and business results, to tie our executives’ goals and interests to our stockholders’ and to enable us to attract and retain highly qualified individuals. Annual incentives are established for each executive based on our attainment of performance goals set by the Committee at threshold, target and maximum levels. When applicable, the bonus earned is calculated ratably from the threshold to the target and from the target to the maximum. No bonus is earned unless and until performance exceeds the threshold performance level. Company operating income had been the single performance measure for the eight fiscal years prior to 2022. In 2022, we added consolidated net sales as an additional performance measure and in 2023 we added division measures. For the purposes of these awards, operating income, consolidated net sales and division measures are defined in the same manner as for financial reporting purposes. Having these performance measures for our executive officers is intended to align our executives’ focus on the Company’s overall improved profitability and sales growth. The performance levels required to earn the target level of bonus are based on the internal financial goals set in connection with our Board of Directors’ consideration and approval of our annual operating plan. Consistent with our emphasis on tying compensation to performance, bonus opportunities for executives are set at a significant percentage of base salary. For fiscal 2024, at least 75% of the bonus opportunity for each of our named executive officers was based on operating income before bonus expense with the remainder based on consolidated wholesale shipments to licensee and open market accounts for Mr. Cohenour. Threshold, target and maximum performance goals for operating income were set at $2.75 million, $5.5 million and $10.0 million, respectively, of Company operating income. Threshold, target and maximum performance goals for licensee and open market wholesale shipments were set at $79.2 million, $88.0 million and $96.8 million, respectively. The bonus opportunities for the named executive officers expressed as a percentage of salary are shown in the table below. The dollar equivalents of these bonus opportunities are shown in the Grants of Plan-Based Awards table on page 20 of this proxy statement.
Bonus Opportunity as a Percentage of Base Salary
Bonus Opportunity as a Percentage of Base Salary
Change in Control and Severance Arrangements
Change in Control and Severance Arrangements Our named executive officers are not entitled to any “single trigger” equity acceleration with a change in control. The 2021 Stock Incentive Plan includes a “double trigger” feature that provides that options and restricted stock awards will vest only upon a recipient’s qualifying termination of employment that occurs on or within two years after the date of a “change in control,” as defined in that plan, unless the award is not assumed by the acquiring or surviving company in such change in control. Accordingly, there are no outstanding unvested options or restricted stock awards that do not contain a double trigger. For this purpose, “qualifying termination of employment” means the recipient’s termination by the Company without cause or termination by the recipient for good reason. In addition, the Company has entered into Employment Continuity Agreements with certain executive officers, including each of the named executive officers. The terms of the agreements, which are described in greater detail elsewhere in this proxy statement, generally provide for certain lump sum payments and continued benefits in the event that an executive is terminated without cause or resigns with good reason within specified periods following a change in control. The Committee believes that the foregoing arrangements will help the Company retain continuity of management during the uncertain period leading up to an actual or potential change in control by giving the executives certain assurances of financial security. Such assurances should result in the executives being less distracted by personal risks and better able to devote their full time and best efforts to the performance of their duties. Each of the named executive officers also participate in the Bassett Furniture Industries, Incorporated Severance Program for Officers and Management Employees (the “Severance Program”). This program, which is described in greater detail elsewhere in this proxy statement, is designed to provide management with some assurances of financial security during difficult economic times. The Committee believes that these assurances will result in management being less distracted by the personal risks of being laid off and more focused on carrying out their duties to the best of their ability. None of these change in control or severance arrangements provide for an excise tax gross-up.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
| Name and principal position | Year | Salary ($) | Bonus ($) | Stock awards ($) | Option awards ($) | Non-equity incentive plan compensation ($) | All other compensation ($)(1) | Total ($) | | Robert H. Spilman, Jr., | 2024 | 485,000 | 0 | 0 | 0 | 0 | 6,900 | 491,900 | | Chief Executive Officer and President | 2023 | 474,500 | 0 | 52,650 | 0 | 0 | 6,600 | 533,750 | | Bruce R. Cohenour, | 2024 | 393,000 | 0 | 0 | 0 | 0 | 26,366 | 419,366 | | Senior Vice President and Chief Sales Officer | 2023 | 387,166 | 0 | 42,120 | 0 | 0 | 26,250 | 455,536 | | J. Michael Daniel, | 2024 | 286,250 | 0 | 0 | 0 | 0 | 20,305 | 306,555 | | Senior Vice President and Chief Financial and Admin. Officer | 2023 | 276,250 | 0 | 42,120 | 0 | 0 | 21,500 | 339,870 | | John E. Bassett, III, | 2024 | 286,250 | 0 | 0 | 0 | 0 | 20,468 | 306,718 | | Senior Vice President and Chief Operations Officer | 2023 | 276,250 | 0 | 42,120 | 0 | 0 | 20,672 | 339,042 |
SUMMARY COMPENSATION TABLE
| (1) No named executive officer received personal benefits in excess of $10,000 during fiscal 2024. This column also includes the value of any employer contributions to the Management Savings Plan for any named executive officer. |
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS The following table sets forth information concerning individual grants of plan-based awards.
GRANTS OF PLAN-BASED AWARDS
| | | Estimated possible payouts under non- equity incentive plan awards | | | All other stock awards: number of shares of stock | Grant date value of stock and | | Name | Grant date | Threshold ($) | Target ($) | Maximum ($) | or units (#) | option awards ($) | | Robert H. Spilman, Jr. Annual Cash Incentive Stock Grant | 1/10/2024 | 75,000 | 150,000 | 346,200 | - | - | | Bruce R. Cohenour Annual Cash Incentive Stock Grant | 1/10/2024 | 37,500 | 75,000 | 173,100 | - | - | | J. Michael Daniel Annual Cash Incentive Stock Grant | 1/10/2024 | 37,500 | 75,000 | 173,100 | - | - | | John E. Bassett III Annual Cash Incentive Stock Grant | 1/10/2024 | 37,500 | 75,000 | 173,100 | - | - |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table sets forth information concerning the fiscal year-end number and terms of unexercised options and unvested restricted stock held by each of the named executive officers.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#)(1) | Market value of shares or units of stock that have not vested ($) | | Robert H. Spilman, Jr. | 0 | 0 | - | - | 3,000 | 45,690 | | | | | - | - | | | | Bruce R. Cohenour | 0 | 0 | - | - | 2,400 | 36,552 | | | | | - | - | | | | J. Michael Daniel | 0 | 0 | - | - | 2,400 | 36,552 | | | | | - | - | | | | John E. Bassett, III | 0 | 0 | - | - | 2,400 | 35,552 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (1) For Mr. Spilman, 1,000 shares are scheduled to each vest on January 11, 2025 and 2026 and on January 12, 2025. For the other named executive officers 800 shares are scheduled to vest each on the same dates as Mr. Spilman’s shares are scheduled to vest. |
OPTION EXERCISES AND STOCK VESTED
OPTION EXERCISES AND STOCK VESTED The following table sets forth information concerning options exercised by, and stock awards that vested for, our named executive officers during fiscal 2024.
OPTION EXERCISES AND STOCK VESTED
| | Option Awards | | Stock Awards | | | Name | Number of shares acquired on exercise (#) | Value realized on exercise ($) | Number of shares acquired on vesting (#) | Value realized on vesting (1)($) | | Robert H. Spilman, Jr. | - | - | 2,000 | 31,130 | | Bruce R. Cohenour | - | - | 1,600 | 24,904 | | J. Michael Daniel | - | - | 1,600 | 24,904 | | John E. Bassett, III | - | - | 1,600 | 24,904 |
OPTION EXERCISES AND STOCK VESTED
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OPTION EXERCISES AND STOCK VESTED
| (1) The value realized is calculated by multiplying the number of shares acquired on vesting by the market price of our common stock on the date of acquisition. |
Potential Payments Upon Termination of Employment or Change in Control
Potential Payments Upon Termination of Employment or Change in Control In January 2009, the Board of Directors adopted the Severance Program. All executive officers and other management employees participate in the Severance Program. Also, the Company entered into Employment Continuity Agreements with Messrs. Spilman and Bassett in January 2009, and with Messrs. Cohenour and Daniel in January 2014. The Severance Program and the Employment Continuity Agreements are described below. Severance Program Under the terms of the Severance Program, in the event that the participant’s employment is terminated by the Company for reasons other than “cause” or the participant’s death or disability, the participant will be entitled to receive:
Potential Payments Upon Termination of Employment or Change in Control
| • | a monthly cash payment equal to (A) the product of (i) the participant’s base salary, (ii) a severance multiplier and (iii) the participant’s years of service (less any other cash severance or pay in lieu of notice under any other severance program, including the Employment Continuity Agreements, or applicable law) divided by (B) the number of months in the participant’s severance period; |
Potential Payments Upon Termination of Employment or Change in Control
| • | if the participant is an executive officer, a lump sum cash payment equal to the participant’s average annual performance bonus for the three fiscal years preceding the date of termination; |
Potential Payments Upon Termination of Employment or Change in Control
| • | if the participant is an executive officer, the prorated portion of the participant’s actual annual performance bonus for the fiscal year in which the participant’s employment is terminated, payable in cash concurrently with the payment to other participants in the Company’s annual bonus plan; |
Potential Payments Upon Termination of Employment or Change in Control
| • | continued health insurance coverage for the duration of the severance period; and |
Potential Payments Upon Termination of Employment or Change in Control
| • | outplacement services for the period and up to the limits specified in the program. |
Potential Payments Upon Termination of Employment or Change in Control
The term “cause” means (i) the willful and repeated failure of the executive to perform substantially his or her duties (other than failure resulting from incapacity due to physical or mental illness), (ii) conviction of, or plea of guilty or nolo contendere to, a felony which is materially and demonstrably injurious to the Company, or (iii) the willful engagement in gross misconduct in violation of Company policy. A participant’s total cash severance benefits may not exceed the maximum payout specified in the program for such participant. The following chart sets out the severance multiplier, maximum payout, severance period and outplacement period and cost limit for each category of participants:
Potential Payments Upon Termination of Employment or Change in Control
| Job classification | Multiplier | Maximum payout | Severance period | Outplacement period and cost limit | | President/CEO | .25 | 2 times Base Salary + Average Bonus + Prorated Bonus | 18 months | $6 months 15,000 limit | | Senior Vice President | .125 | 1 times Base Salary + Average Bonus + Prorated Bonus | 12 months | $3 months 7,500 limit | | Other Executive Officers | .125 | .75 times Base Salary + Average Bonus + Prorated Bonus | 9 months | $3 months 7,500 limit | | Non-Executive Officers | .0833 | .50 times Base Salary | 6 months | None | | Other Management Employees | .0833 | .25 times Base Salary | 3 months | None |
Potential Payments Upon Termination of Employment or Change in Control
A participant’s entitlement to benefits under the Severance Program ceases upon the participant’s employment by a competitor. Employment Continuity Agreements Under the terms of the Employment Continuity Agreements, in the event that a “change in control” has occurred and the executive’s employment is terminated by the Company before the second anniversary thereof for reasons other than “cause,” death or disability or by the participant for “good reason” within the 90 day period following the “change in control,” the participant will be entitled to receive:
Potential Payments Upon Termination of Employment or Change in Control
| • | a lump sum cash payment equal to the product of the executive’s “required base salary” and a change in control severance multiplier (which is equal to two for the President and Chief Executive Officer and one for the other executives); |
Potential Payments Upon Termination of Employment or Change in Control
| • | a lump sum cash payment equal to the executive’s most recently established target annual performance bonus plus the executive’s average annual performance bonus for the three fiscal years preceding the date of termination; |
Potential Payments Upon Termination of Employment or Change in Control
| • | continued health insurance coverage for the duration of the severance period (which is 18 months for the President and Chief Executive Officer and 12 months for the other executives); |
Potential Payments Upon Termination of Employment or Change in Control
| • | a lump sum cash payment equal to the present value of continued life insurance and long-term disability coverage for the duration of the severance period; and |
Potential Payments Upon Termination of Employment or Change in Control
| • | outplacement services (for a period of six months and three months for the President and Chief Executive Officer and the other executives, respectively, with a cost limit of $15,000 and $7,500 for the President and Chief Executive Officer and the other executives, respectively). |
Potential Payments Upon Termination of Employment or Change in Control
The term “change in control” is defined for purposes of the Employment Continuity Agreements the same as it is under the Company’s Employee Stock Plan. Under the Employee Stock Plan, a “change in control” includes generally (i) the acquisition by an individual, an entity or a group of beneficial ownership or voting power of 30% or more of the Company’s outstanding common stock, (ii) certain changes in the constitution of the Company’s Board of Directors that have not been approved by the current Board, (iii) stockholder approval of a reorganization, merger or consolidation in which the then-current stockholders cease to own at least 75% of the then outstanding shares of common stock, (iv) stockholder approval of a complete liquidation or dissolution of the Company and (v) the sale or other disposition of all or substantially all of the assets of the Company. An executive’s “required base salary” means the higher of (i) his base salary in effect immediately prior to the change in control and (ii) his highest base salary at any point in time after the change in control. The term “good reason” means (i) a material reduction in the executive’s base salary below the required base salary, (ii) a material diminution in the executive’s authority, duties or responsibilities, (iii) a material diminution in the authority, duties or responsibilities of the supervisor to whom the executive is required to report, including a requirement that the executive report to a corporate officer or other employee if the executive reported to the Board of Directors prior to the change in control; (iv) a material diminution in the budget over which the executive retains authority; or (v) a change at the request of the employer in the executive’s principal work location of more than 50 miles; in each case provided the executive gives notice to the employer of the existence of such condition within 30 days of its initial existence and the employer has not remedied the condition within 30 days of such notice. The term “cause” has the same meaning as under the Severance Program. The Employment Continuity Agreements may be amended or terminated by the Board of Directors at any time; provided that the agreements cannot be terminated or amended after the occurrence of a change in control, and provided further that the agreements cannot be terminated or amended in a manner that would adversely affect the rights of participants after the Board of Directors has knowledge of a potential change in control unless and until the Board of Directors has determined that such potential change in control will not be consummated and the Board of Directors does not have knowledge of any other potential change in control. General Each of the Severance Program and the Employment Continuity Agreements provides for severance benefits to be paid in a manner intended to comply with, or be exempt from, Section 409A of the Internal Revenue Code, including delaying certain benefits for a period of six months following termination if necessary. In addition, severance benefits are subject to reduction to avoid any excise tax on excess “parachute payments” under Section 280G of the Internal Revenue Code. All employees who accept benefits under the Severance Program or the Employment Continuity Agreements will be required to sign a release of claims and will be subject to certain covenants, including a one-year non-solicitation agreement.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The following table shows the past two fiscal years’ total compensation for our named executive officers as set forth in the Summary Compensation Table, the “compensation actually paid” to our named executive officers (as determined under SEC rules), our total shareholder return (TSR), and our net income. SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine Compensation Actually Paid as reported in the Pay Versus Performance Table. Compensation Actually Paid does not necessarily represent cash and/or equity value transferred to the applicable named executive officer without restriction, but rather is a valuation calculated under applicable SEC rules. In general, Compensation Actually Paid is calculated as summary compensation table total compensation adjusted to (a) include the value of any pension benefit (or loss) attributed to the past fiscal year, including on account of any amendments adopted during such year; and (b) include the fair market value of equity awards as of November 30, 2024 or, if earlier, the vesting date (rather than the grant date) and factor in dividends and interest accrued with respect to such awards. For purposes of the disclosure below, no pension valuation adjustments were required.
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for Principal Executive Officer (“PEO”)(1) | Compensation Actually Paid to PEO(3) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (“NEOs”)(2) | Average Compensation Actually Paid to Non- PEO NEOs(3) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return (“TSR”) (4) | Net Income (Loss) 000s | | 2024 | $491,900 | $485,570 | $344,213 | $339,149 | $112 | $(9,695) | | 2023 | $533,750 | $526,540 | $361,134 | $355,366 | $116 | $(3,171) | | 2022 | $956,060 | $964,460 | $554,263 | $560,983 | $124 | $65,345 |
PAY VERSUS PERFORMANCE
(1) The amounts in this column reflect the summary compensation table totals for Mr. Spilman for fiscal years 2022, 2023 and 2024. (2) The amounts in this column reflect the average summary compensation table totals of our non-CEO NEOs, which includes for 2024 Messrs. Cohenour, Daniel, Bassett and for 2022 and 2023 Messrs. Cohenour, Daniel, Bassett and David C. Baker. (3) SEC rules require certain adjustments be made for Summary Compensation Table totals to determine compensation “actually paid” as reported in the Pay versus Performance table. The following tables detail these adjustments. (4) Total shareholder return (TSR) is determined based on the value of an initial fixed investment of $100.
PAY VERSUS PERFORMANCE
| Year | Executives | Summary Compensation Table Total | Deduct Reported Value of Equity Awards(a) | Add Equity Award Adjustments(b) | Compensation Actually Paid | | | | ($) | ($) | ($) | ($) | | 2024 | CEO | 491,900 | 0 | (6,330) | 485,570 | | | Other NEOs | 344,213 | 0 | (5,064) | 339,149 | | 2023 | CEO | 533,750 | 52,650 | 45,440 | 526,540 | | | Other NEOs | 361,134 | 42,120 | 36,352 | 355,366 | | 2022 | CEO | 956,060 | 47,460 | 55,860 | 964,460 | | | Other NEOs | 554,263 | 37,968 | 44,688 | 560,983 |
PAY VERSUS PERFORMANCE
| (a) The amounts in this column represent the grant date fair value of equity awards as reported in the “Stock Awards” column of the Summary Compensation Table for each applicable year. |
PAY VERSUS PERFORMANCE
| (b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: |
PAY VERSUS PERFORMANCE
| i. | the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; |
PAY VERSUS PERFORMANCE
| ii. | the amount of change in fair value as of the end of the applicable year (from the end of the prior fiscal year) of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; |
PAY VERSUS PERFORMANCE
| iii. | for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; |
PAY VERSUS PERFORMANCE
| iv. | for awards granted in prior years that vest in the applicable year, the amount equal to the change in fair value as of the vesting date (from the end of the prior fiscal year); |
PAY VERSUS PERFORMANCE
| v. | for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and |
PAY VERSUS PERFORMANCE
| vi. | the dollar value of any dividends or other earnings paid on equity awards In the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. |
PAY VERSUS PERFORMANCE
The amounts deducted or added in calculating the equity award adjustments are as follows:
PAY VERSUS PERFORMANCE
| | | Unvested Awards | | Vested Awards | | | | | | Year | Executive | Year end fair value of equity awards granted during the year and outstanding and unvested at year end | Year over year change in fair value of outstanding and unvested equity awards at year end | Fair value as of vesting date of equity awards granted and vested in the year | Change as of vesting date from prior year end of prior awards that vested during year | Deduct forfeited awards (fair value at end of prior year) | Value of dividends or other earnings paid | Total equity award adjustments | | | | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | 2024 | CEO | 0 | (4,200) | 0 | (2,130) | 0 | 0 | (6,330) | | | Other NEOs | 0 | (3,360) | 0 | (1,704) | 0 | 0 | (5,064) | | 2023 | CEO | 49,890 | (3,980) | 0 | (470) | 0 | 0 | 45,440 | | | Other NEOs | 39,912 | (3,184) | 0 | (376) | 0 | 0 | 36,352 | | 2022 | CEO | 55,860 | 0 | 0 | 0 | 0 | 0 | 55,860 | | | Other NEOs | 178,752 | 0 | 0 | 0 | 0 | 0 | 178,752 |