DEF 14A of NRC Health, Apr 10, 2025

DEF 14A of NRC Health

Filed Apr 10, 2025 · FY20240001437749-25-011693

Open on EDGAR

  1. PROPOSAL NO. 1 – ELECTION OF DIRECTORS

    PROPOSAL NO. 1 – ELECTION OF DIRECTORS Our Bylaws provide that the directors shall be divided into three classes, with staggered terms of three years each. At the Annual Meeting, the shareholders will elect two directors to hold office until the 2028 annual meeting of shareholders and until their successors are duly elected and qualified. Unless shareholders otherwise specify, the shares represented by the proxies received will be voted in favor of the election as directors of the two persons named as nominees herein. The Board has no reason to believe that the listed nominees will be unable or unwilling to serve as directors if elected. However, in the event that any nominee should be unable to serve or for good cause will not serve, the shares represented by proxies received will be voted for another nominee selected by the Board. Each director will be elected by a majority of the votes cast at the Annual Meeting (assuming a quorum is present) in an uncontested election. Consequently, any shares not voted at the Annual Meeting, whether due to abstentions, broker non-votes or otherwise, will have no impact on the election of the directors. Votes will be tabulated by an inspector of elections appointed by the Board. The following sets forth certain information about the Board’s nominees for election at the Annual Meeting and each director of the Company whose term will continue after the Annual Meeting.

  2. Nominees for Election at the Annual Meeting

    Nominees for Election at the Annual Meeting Term expiring at the 2028 Annual Meeting Donald M. Berwick, 78, has served as a director of the Company since October 2015. Dr. Berwick is the former President and Chief Executive Officer of the Institute for Healthcare Improvement, which he co-founded and led for almost 20 years, and where he now serves as President Emeritus and Senior Fellow. He is also currently a Lecturer in the Department of Health Care Policy at Harvard Medical School. From July 2010 to December 2011, Dr. Berwick served as the Administrator of the Centers for Medicare and Medicaid Services as an appointee of President Barack Obama. Dr. Berwick previously served on the faculty of the Harvard Medical School and the Harvard School of Public Health (from 1974 to 2010). He was also vice chair of the U.S. Preventive Services Task Force (from 1990 to 1995), the first “Independent Member” of the Board of Trustees of the American Hospital Association (from 1996 to 1999) and the chair of the National Advisory Council of the Agency for Healthcare Research and Quality (from 1995 to 1999). Dr. Berwick’s expertise as a professional, administrator, lecturer and educator in the field of healthcare led to the conclusion that he should serve as a director of the Company. Stephen H. Lockhart, 66, has served as a director of the Company since May 2021. Dr. Lockhart served as senior vice president and chief medical officer for Sutter Health Network, a not-for-profit system of hospitals, physician organizations, and research institutions in Northern California, from 2015 to 2021. Prior to that role, Dr. Lockhart served as Sutter Health Network’s regional chief medical officer for the East Bay Region from 2010 to 2015. From 2008 to 2010, Dr. Lockhart served as the chief administrative officer at the St. Luke’s campus of Sutter’s California Pacific Medical Center. In 2017, Dr. Lockhart was named to California Governor Brown’s Advisory Committee on Precision Medicine as part of California’s effort to use advanced computing and technology to better understand, treat, and prevent disease. Dr. Lockhart serves on the board of Molina Healthcare, Inc. (NYSE: MOH), a health plan provider under Medicaid and Medicare programs and in state insurance marketplaces. Dr. Lockhart also serves on the boards of the ECRI Institute, Recreational Equipment, Inc., the David and Lucile Packard Foundation, and is chairman of Parks California – a nonprofit dedicated to supporting California's parks and public lands. Dr. Lockhart’s 36 years of experience in the healthcare industry and his background as medical provider and administrator in a large healthcare system led to the conclusion that he should serve as a director of the Company. THE BOARD UNANIMOUSLY RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS DIRECTORS AND URGES EACH SHAREHOLDER TO VOTE “FOR” SUCH NOMINEES. SHARES OF THE COMPANY’S COMMON STOCK REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED “FOR” SUCH NOMINEES.

  3. Directors Continuing in Office

    Directors Continuing in Office Terms expiring at the 2026 Annual Meeting Parul Bhandari, 49, has served as a director of the Company since May 2022. Ms. Bhandari has more than 20 years of experience driving growth and innovation at the world’s leading technology and business development companies. Since 2012, she has held various leadership roles at Microsoft Corporation (NASDAQ: MSFT). Currently, Ms. Bhandari is the Director, Partner Strategy, Worldwide Media and Communications at Microsoft, where she contributes to global partner recruiting, enablement and engagement. Previously, Ms. Bhandari was focused on leading Data and AI for Microsoft’s Worldwide Public Sector. Prior to joining Microsoft, Ms. Bhandari served as Vice President of Business Development and Alliances for the management consulting firm Acelsior, teaming with large defense contractors. Ms. Bhandari has served as a director of Timberland Bancorp, Inc. (NASDAQ: TSBK) since 2021. Ms. Bhandari also served as a director of Cartica Acquisition Corp (NASDAQ: CITE), a blank check company, from January 2022 to May 2023. Ms. Bhandari’s expertise as an accomplished technology leader, leveraging data and AI, as well as her experience driving industry solutions and engaging in digital transformation initiatives, led to the conclusion that she should serve as a director of the Company. Penny A. Wheeler, 66, has served as a director of the Company since May 2021. From 2015 to 2021, Dr. Wheeler served as the chief executive officer of Allina Health, a not-for-profit healthcare system serving over 1.5 million individuals in Minnesota and western Wisconsin. Prior to that role she served as chief clinical officer since 2006. For 20 years, Dr. Wheeler has also served as a board certified obstetrician/gynecologist where she spent considerable time interacting with, and caring for, patients and the community. In 2015, Minnesota Governor Mark Dayton appointed Dr. Wheeler to the Taskforce for Health Care Financing, and Dr. Wheeler has been named as one of the top 25 women in health care by Modern Healthcare magazine. Dr. Wheeler also serves on the board of Portico Healthnet, a not-for-profit organization dedicated to helping uninsured Minnesotans receive affordable health coverage and care, St. Thomas University, and the University of Minnesota Foundation. She is also on the Board of Cedar Cares, an organization that eases the patient billing experience through customized engagement. Dr. Wheeler’s past leadership experiences in the healthcare industry led to the conclusion that she should serve as a director of the Company. Terms expiring at the 2027 Annual Meeting Michael D. Hays, 70, has served as Chief Executive Officer and a director since he founded the Company in 1981. He also served as President of the Company from 1981 to 2004, from July 2008 to July 2011, and from October 2020 to present. Prior to founding the Company, Mr. Hays served for seven years as a Vice President and a director of SRI Research Center, Inc. (n/k/a the Gallup Organization). Mr. Hays’ background as founder of the Company, and his long and successful tenure as Chief Executive Officer and a director, led to the conclusion that he should serve as a director of the Company. John N. Nunnelly, 72, has served as a director of the Company since December 1997, and lead director since May 2012. Mr. Nunnelly is a retired Group President from McKesson Corporation, a leader in pharmaceutical distribution and healthcare information technology. During his 28-year career at McKesson, Mr. Nunnelly served in a variety of other positions, including Vice President of Strategic Planning and Business Development, Vice President and General Manager of the Amherst Product Group and Vice President of Sales-Decision Support. These responsibilities included leading several business units, including one with over $360 million in annual revenue. In addition, he was involved in managing a number of mergers and acquisitions. Mr. Nunnelly has also served as an adjunct professor at the University of Massachusetts, School of Nursing, advising students and faculty on matters pertaining to healthcare information technology. These experiences and Mr. Nunnelly’s expertise as a professional and educator in the field of healthcare information technology led to the conclusion that he should serve as a director of the Company.

  4. CORPORATE GOVERNANCE

    CORPORATE GOVERNANCE

  5. Independent Directors and Annual Meeting Attendance

    Independent Directors and Annual Meeting Attendance Of the six directors currently serving on the Board, the Board has determined that Donald M. Berwick, Parul Bhandari, Stephen H. Lockhart, John N. Nunnelly, and Penny A. Wheeler are “independent directors” as that term is defined in the listing standards of The NASDAQ Stock Market. Directors are typically expected to attend our annual meeting of shareholders each year. For the 2025 Annual Meeting, such attendance will be through the Internet via live webcast. Each of the directors attended our 2024 annual meeting of shareholders. Currently, we do not have a chairman, and the Board does not have a policy on whether the roles of chief executive officer and chairman should be separate. The Board has, however, designated a lead director since 2007, with Mr. Nunnelly serving as the lead director since May 2012. In February 2025, our Board of Directors appointed Trent Green as our Chief Executive Officer and to serve as a director, both effective June 1, 2025. Mr. Green brings more than 25 years of healthcare leadership experience, most recently serving as Chief Executive Officer of Amazon One Medical and previously as Chief Operating Officer of Legacy Health. Upon the effectiveness of Mr. Green’s appointment as Chief Executive Officer, Mr. Hays will transition to the role of Chairman. The lead director is an independent director who is appointed by the independent directors and who works closely with the chief executive officer. In addition to serving as the principal liaison between the independent directors and the chief executive officer in matters relating to the Board as a whole, the primary responsibilities of the lead director are as follows:

  6. 2024 DIRECTOR COMPENSATION

    2024 DIRECTOR COMPENSATION Directors who are executive officers of the Company receive no compensation for service as members of either the Board or committees thereof. Directors who are not executive officers of the Company receive

  7. 2024 DIRECTOR COMPENSATION

    | ● | an annual fixed fee of $75,000 for the lead director and $50,000 for each other director; |

  8. 2024 DIRECTOR COMPENSATION

    | ● | (ii) a cash payment of up to $50,000 (payable in two $25,000 increments), contingent on each director’s participation in each of the two in-person meetings for the year, to be paid in $25,000 increments upon the condition being met) (the “Director Cash Payment”); |

  9. 2024 DIRECTOR COMPENSATION

    | ● | (iii) a grant of an option to purchase shares of our Common Stock with a target grant date fair value of approximately $50,000, rounded to the nearest whole share and computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”), or successor rule, contingent on each director’s participation in two in-person meetings for the year (the “Director Equity Award”); and |

  10. 2024 DIRECTOR COMPENSATION

    | ● | (iv) pursuant to the National Research Corporation 2004 Non-Employee Director Stock Plan, as amended (the “2004 Director Stock Plan”), each director who is not an associate (i.e., employee) of the Company also receives an annual grant of an option to purchase shares of our Common Stock on the date of each Annual Meeting of Shareholders with a target grant date fair value of approximately $100,000, rounded to the nearest whole share and computed in accordance with FASB ASC Topic 718, or successor rule, an exercise price equal to the fair market value of our Common Stock on the date of grant, a schedule to vest the day immediately preceding the next Annual Meeting. |

  11. 2024 DIRECTOR COMPENSATION

    Directors are also reimbursed for out-of-pocket expenses associated with attending meetings of the Board and committees thereof. Mr. Nunnelly has served as our lead director since May 2012. The options granted to our directors during 2024 were granted in accordance with our Board’s standard practice of making annual options grants effective on the date of the annual meeting of shareholders. The timing of the grants was not tied to the timing of any release of material nonpublic information. The following table sets forth information regarding the compensation received by each of our directors during 2024:

  12. 2024 DIRECTOR COMPENSATION

    | Director | Fees Earned or Paid in Cash (1) | Option Awards(2) | Total | | Donald M. Berwick | $75,000 | $100,008 | $175,008 | | Parul Bhandari | $75,000 | $100,008 | $175,008 | | Stephen H. Lockhart | $75,000 | $100,008 | $175,008 | | John N. Nunnelly | $100,000 | $100,008 | $200,008 | | Penny A. Wheeler | $75,000 | $100,008 | $175,008 |

  13. 2024 DIRECTOR COMPENSATION

    (1) Includes $25,000 for the earned portion of the Director Cash Payment. (2) Represents the aggregate grant date fair value of option awards granted during the year, computed in accordance with FASB ASC Topic 718. See Note 9 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, for a discussion of assumptions made in the valuation of share-based compensation. As of December 31, 2024, the outstanding option awards for each director were as follows: Dr. Berwick – 51,659 options; Ms. Bhandari – 42,448 options; Dr. Lockhart – 44,481 options; Mr. Nunnelly – 55,238 options; and Dr. Wheeler – 44,481 options. No shares were earned for the Director Equity Award.

  14. Overview of Executive Compensation Philosophy

    | ✔ | Appropriate balance between short- and long-term compensation that discourages short-term risk taking at the expense of long-term results |

  15. Overview of Executive Compensation Philosophy

    | ● | Competitive Pay for Our Market. We strive to compensate our executive officers at levels to ensure that we continue to attract and retain a highly competent and committed management team. |

  16. Short-Term Cash Incentive

    Short-Term Cash Incentive During 2024, certain of our Named Executive Officers were eligible to earn a cash bonus under the 2024 short-term cash incentive plan (the “2024 Short-Term Cash Plan”). We intended for our 2024 Short-Term Cash Plan to provide an incentive to meet our minimum total recurring contract value, excluding project based and other non-recurring revenue (“TRCV”) goals for 2024, while maintaining a certain Adjusted EBITDA Margin. “Adjusted EBITDA” means net income, plus net interest expense (or minus net interest income), plus book income taxes, plus depreciation, plus amortization, plus or minus adjustments for non-recurring, extraordinary, or other gains, losses, revenues, or expenses as may be determined by the Compensation Committee. “Adjusted EBITDA Margin” means Adjusted EBITDA as a percentage of total revenue minus any non-recurring revenue excluded from Adjusted EBITDA. The 2024 Short-Term Cash Plan provided the opportunity to earn cash compensation for meeting the short-term performance goals of the Company. Under the 2024 Short-Term Cash Plan, Mr. Hays was eligible to earn a cash bonus of up to $63,700 and each of Ms. Hrdy and Messrs. Hahn and Louvion was eligible to earn a cash bonus of up to $200,000 upon attainment of certain TRCV goals measured as of December 31, 2024, as follows (with linear interpolation between the goals):

  17. Short-Term Cash Incentive

    | Named Executive Officer | Threshold (TRCV of $144 million) | Target (TRCV of $149 million) | Maximum (TRCV of $154 million) | | Michael D. Hays | $31,850 | $47,775 | $63,700 | | Helen L. Hrdy | $100,000 | $150,000 | $200,000 | | Jason Hahn | $100,000 | $150,000 | $200,000 | | Christophe Louvion | $100,000 | $150,000 | $200,000 |

  18. Short-Term Cash Incentive

    The amount of any bonus earned could be reduced by the Compensation Committee if the Adjusted EBITDA Margin for the year ended December 31, 2024 was less than 25%. The Compensation Committee determined that TRCV as of December 31, 2024 was below the threshold at $133 million. Therefore, no bonuses were earned under the 2024 Short-Term Cash Plan. Mr. Karas and Ms. Stacy did not participate in the 2024 Short-Term Cash Plan.

  19. Long-Term Cash Incentive

    Long-Term Cash Incentive Certain of our Named Executive Officers were eligible to participate in the 2024 long-term cash incentive plan (the “2024 Long-Term Cash Plan”). The 2024 Long-Term Cash Plan was approved in connection with the adoption of a three-year strategic growth plan and the hiring and promotion of individuals to serve as Chief Customer Officer, Chief Revenue Officer, Chief Corporate Development Officer, and Chief Product Technology Officer. We intended for our 2024 Long-Term Cash Plan to provide an incentive to meet our long-term TRCV goals, while maintaining a certain Adjusted EBITDA Margin. . Under the 2024 Long-Term Cash Plan, Ms. Hrdy and Messrs. Hahn and Louvion were eligible to earn, a payout under the 2024 Long-Term Cash Plan as follows: (i) if the Company’s TRCV as of December 31, 2026 is less than $170 million, then the payout would be $0 or (ii) if the Company’s TRCV as of December 31, 2026 is equal to or greater than $170 million, then the payout would be $2,000,000 plus $0.10476 per dollar of TRCV exceeding $170 million, up to the maximum payout of $8,862,000. The amount of any payout earned may be reduced by the Compensation Committee if the Adjusted EBITDA Margin for the year ended December 31, 2026 is less than 33%. The Compensation Committee had the option to make any payout earned in equity, instead of cash. Messrs. Hays and Karas and Ms. Stacy did not participate in the 2024 Long-Term Cash Plan. As described in more detail under the heading Compensation Decisions with Respect to 2025 below, Ms. Hrdy’s participation in the 2024 Long-Term Cash Plan was terminated without payout in consideration for compensation granted to Ms. Hrdy in April 2025. As described in more detail under the heading Potential Payments Upon Termination or Change in Control below, due to Mr. Hahn’s termination on March 13, 2025 and Mr. Louvion’s resignation on January 17, 2025, neither Mr. Hahn nor Mr. Louvion will receive any payout under the 2024 Long-Term Cash Plan.

  20. Long-Term Equity Incentive

    Long-Term Equity Incentive Certain of our Named Executive Officers were eligible to participate in the 2024 long-term equity incentive plan (the “2024 Long-Term Equity Plan”). Like the 2024 Long-Term Cash Plan, the 2024 Long-Term Equity Plan was approved in connection with the adoption of a three-year strategic growth plan and the hiring and promotion of individuals to serve as Chief Customer Officer, Chief Revenue Officer, Chief Corporate Development Officer, and Chief Product Technology Officer. We intended for our 2024 Long-Term Equity Plan to provide an incentive to meet our long-term TRCV goals. If earned, the value of the stock option will be dependent on the future market value of the Common Stock, which we believe helps to align the economic interests of participants in the 2024 Long-Term Equity Plan with the interests of our shareholders. Under the 2024 Long-Term Equity Plan, on January 19, 2024, each of Ms. Hrdy and Messrs. Hahn and Louvion received an option to purchase 100,000 shares of Common Stock, and Mr. Hays received an option to purchase 4,833 shares of the Company’s Common Stock (each such option, a “2024 Option”). The Compensation Committee desired to provide Mr. Hays one-half of his salary in the 2024 Option, so it was determined by dividing $63,700 by the closing price of the Company’s Common Stock on January 18, 2024 and then multiplying by three. The award of 100,000 to each of Ms. Hrdy and Messrs. Hahn and Louvion was based upon their overall compensation package (and the desired percentage of equity in relation to the overall package) and their expected contribution to attaining our three-year strategic plan. Each of the 2024 Options will vest upon achievement of a minimum TRCV of $170 million measured as of December 31, 2026 (the “2024 Equity Performance Goal”). The 2024 Options were granted under the National Research Corporation 2006 Equity Incentive Plan (the “2006 Equity Plan”), have exercise prices equal to the closing price of the Common Stock on January 18, 2024, and are subject to termination, forfeiture, and acceleration provisions. Mr. Karas and Ms. Stacy did not participate in the 2024 Long-Term Equity Plan. At the time they were awarded, the 2024 Long-Term Equity Plan and the 2024 Long-Term Cash Plan were intended to cover the entire three-year period for Ms. Hrdy and Messrs. Hahn and Louvion and no additional equity awards or long-term cash incentives were anticipated to be awarded to these individuals for periods prior to 2027. As described in more detail under the heading Compensation Decisions with Respect to 2025 below, Ms. Hrdy’s 2024 Option was forfeited in consideration for compensation granted to Ms. Hrdy in April 2025. Since Mr. Hahn was terminated without cause, his 2024 Option will continue to be eligible for vesting and will vest if (and only if) the 2024 Equity Performance Goal is satisfied and, in such event, the shares earned will be prorated for the portion of the period of his employment at the Company between January 19, 2024 and December 31, 2026. Due to Mr. Louvion’s resignation on January 17, 2025, his rights to the 2024 Option terminated. The Compensation Committee does not grant equity awards in anticipation of the release of material nonpublic information. Similarly, we do not time the release of material nonpublic information about the Company for the purpose of affecting the value of executive compensation.

  21. Mr. Louvion’s Signing Bonus

    Mr. Louvion’s Signing Bonus Upon joining as our Chief Product Technology Officer, Mr. Louvion received a $350,000 cash signing bonus.

  22. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control Mr. Hays and Ms. Hrdy are employed at will and do not have an employment agreement. Ms. Hrdy was party to a Long-Term Incentive Award Notice and Severance Agreement (a “Severance Agreement”), which has since been terminated and replaced as described under described in more detail under the heading Compensation Decisions with Respect to 2025. The Severance Agreement had provided for the following:

  23. Potential Payments Upon Termination or Change in Control

    | ● | In the event of termination without cause, resignation with good reason, death, or disability (as defined in Section 22(e) of the Internal Revenue Code of 1986, as amended (the “Code”)) prior to December 31, 2026, payout (the “Alternate Payout”) under the 2024 Long-Term Cash Plan determined as follows: (i) if the Company’s TRCV as of the most recent week ended prior to such termination is less than $170 million, then the Alternate Payout will be $0 or (ii) if the Company’s TRCV as of the most recent week ended prior to such termination is equal to or greater than $170 million, then the Payout will be $2.0 million plus $0.10476 per dollar of TRCV exceeding $170 million, up to the maximum payout of $8,862,000. The amount of the Alternate Payout may be reduced by the Compensation Committee if the Adjusted EBITDA Margin for the most recent twelve calendar months ended prior to such termination is less than the interpolated Adjusted EBITDA Margin goal, which is equal to the Adjusted EBITDA Margin for the most recent twelve calendar months that would apply using straight line interpolation between 25% at the end of 2024 and 33% at the end of 2026. |

  24. Potential Payments Upon Termination or Change in Control

    | ● | In the event of termination without cause or resignation with good reason prior to December 31, 2026, (i) one year of base salary continuation payments at the base salary in effect as of the termination, plus (ii) a lump sum payment equal to the actual cash bonus earned for the year in which such termination occurred, prorated for the number of days during the year served prior to termination as a percentage of the entire calendar year (the “Severance Payments”). |

  25. Potential Payments Upon Termination or Change in Control

    | ● | In the event of termination without cause or resignation with good reason between the date 45 days prior to the execution of a definitive agreement in contemplation of a change in control and continuing until payout under the 2024 Long-Term Cash Plan, a cash payout of $8,862,000 (representing the maximum amount under the 2024 Long-Term Cash Plan), paid promptly after (i) the consummation of a change in control or (ii) the date of such termination (if due otherwise). |

  26. Potential Payments Upon Termination or Change in Control

    Payment of the Alternate Payout and the Severance Payments was conditioned on the execution of a general release of claims. The Severance Agreement included non-competition, non solicitation, non-interference, and non-disclosure provisions that run through the one-year anniversary of the date of termination. Any breach of such restrictive covenants would result in forfeiture of any then-unpaid portion of the Alternate Payout or Severance Payments. The award agreements for the 2024 Options (the “2024 Option Award Agreements”) provide for the following:

  27. Potential Payments Upon Termination or Change in Control

    | ● | In the event of termination without cause, resignation with good reason, death, or disability (as defined in Section 22(e) of the Code) prior to the complete vesting of the 2024 Option, the 2024 Option will continue to be eligible for vesting and will vest if (and only if) the 2024 Equity Performance Goal is satisfied and, in such event, the shares earned will be prorated for the portion of the period of employment at the Company between January 19, 2024 and December 31, 2026. |

  28. Potential Payments Upon Termination or Change in Control

    | ● | In the event termination without cause or resignation with good reason between the date 45 days prior to the execution of a definitive agreement in contemplation of a change in control and continuing until it is determined whether the 2024 Equity Performance Goal is satisfied, the 2024 Equity Performance Goal will be deemed to have been attained and any restrictions on the 2024 Option will lapse as of the change in control. |

  29. Potential Payments Upon Termination or Change in Control

    The 2024 Option Award Agreements include non-competition, non solicitation, non-interference, and non-disclosure provisions that run through the one-year anniversary of the date of termination. Any breach of such restrictive covenants would result in forfeiture of any then-unexercised portion of the 2024 Option. The option award agreements for currently outstanding options, other than the 2024 Options, provide for acceleration of vesting upon death or disability. The following table summarizes the benefits that would have been payable upon termination of employment in various circumstances, assuming the triggering event occurred on December 31, 2024:

  30. Potential Payments Upon Termination or Change in Control

    | Name/Form of Compensation | Termination without Cause or Resignation with Good Reason in connection with a Change in Control | Termination without Cause or Resignation with Good Reason | Death or Disability | | Michael D. Hays | | | | | Accelerated Vesting of 2024 Option(1) | — | — | — | | Accelerated Vesting of Options other than the 2024 Option(1) | — | — | — | | Total | — | — | — | | Helen L. Hrdy | | | | | Accelerated Vesting of 2024 Option(1) | — | — | — | | Accelerated Vesting of Options other than the 2024 Option(1) | — | — | — | | Payout under 2024 Long-Term Cash Plan | $8,862,000 | —(2) | —(2) | | Salary Continuation | $400,000 | $400,000 | — | | Annual Bonus(3) | — | — | — | | Total | $9,262,000 | $400,000 | — |

  31. Potential Payments Upon Termination or Change in Control

    | (1) Accelerated options were out-of-the-money on December 31, 2024. |

  32. Potential Payments Upon Termination or Change in Control

    | (2) The Company’s TRCV as of the most recent week ended prior to December 31, 2024 was less than $170 million. |

  33. Potential Payments Upon Termination or Change in Control

    | (3) No bonuses were earned under the 2024 Short-Term Cash Plan. |

  34. Potential Payments Upon Termination or Change in Control

    As described in more detail under the heading Compensation Decisions with Respect to 2025 below, Ms. Hrdy’s Severance Agreement and participation in the 2024 Long-Term Cash Plan were terminated and her 2024 Option was forfeited in consideration for compensation granted to Ms. Hrdy in April 2025. In April 2025, Ms. Hrdy received a new severance agreement that provides for one year of continued payment of her then-current annual base salary in the event of her termination without cause or resignation with good reason after April 7, 2028. The amounts payable to Mr. Karas in connection with his retirement are described above under the heading Karas Retirement Transition Agreement. Ms. Stacy did not receive any severance or other similar payments in connection with her resignation. Mr. Hahn had a Severance Agreement and 2024 Option Award Agreement. Due to his termination without cause on March 13, 2025, Mr. Hahn will receive one year of base salary continuation payments (a total of $400,000) under the Severance Agreement. Since there was no cash bonus plan for 2025 in effect as of March 13, 2025, Mr. Hahn will not receive any cash bonus payment under the Severance Agreement. Mr. Hahn will not receive any payout under the 2024 Long-Term Cash Incentive Plan, as the Company’s TRCV as of the most recent week ended prior to his termination was less than $170 million. Since Mr. Hahn was terminated without cause, his 2024 Option will continue to be eligible for vesting and will vest if (and only if) the 2024 Equity Performance Goal is satisfied and, in such event, the shares earned will be prorated for the portion of the period of his employment at the Company between January 19, 2024 and December 31, 2026. While Mr. Louvion had a Severance Agreement and 2024 Option Award Agreement, because he resigned without good reason, he did not receive any benefits under the Severance Agreement or 2024 Option Award Agreement. Upon his resignation on January 17, 2025, Mr. Louvion’s 2024 Option was forfeited and his participation in the 2024 Long-Term Cash Plan terminated without payout.

  35. Compensation Decisions with Respect to 2025

    Compensation Decisions with Respect to 2025 In February 2025, the Board appointed Trent Green, the former Chief Executive Officer of Amazon One Medical and Chief Operating Officer of Legacy Health, as our Chief Executive Officer, effective June 1, 2025 (the “Green Effective Date”). Upon the effectiveness of Mr. Green’s appointment as Chief Executive Officer, Mr. Hays will transition to the role of Chairman of the Board. The Compensation Committee approved a compensation package for Mr. Green in connection with his appointment as Chief Executive Officer, including: (i) an annualized base salary of $1,250,000; (ii) a grant of 500,000 shares of Common Stock (the “Green Shares”), subject to the following restrictions: (a) we have the option to repurchase the Green Shares for $1.00 if Mr. Green is terminated for cause or resigns without good reason prior to the third anniversary of the Green Effective Date, (b) prior to the third anniversary of the Green Effective Date, the Green Shares may not be transferred, except (1) with our consent or (2) to certain family members, trusts for the benefit of such family members, or upon death, incompetency, or disability, and (c) after the third anniversary of the Green Effective Date, only fifty (50%) percent of the Green Shares may be transferred during Mr. Green’s employment by the Company; (iii) a cash signing bonus equal to the value of the Green Shares (based on the closing price of Common Stock on the trading day prior to the Green Effective Date) multiplied by 66 2/3%; and (iv) in the event of Mr. Green’s termination without cause or resignation with good reason after the third anniversary of the Green Effective Date, he will be entitled to one year of continued payment of his then-current annual base salary. The Green Shares are expected to be issued under the 2025 Omnibus Incentive Plan. The compensation package discussed above is meant to align Mr. Green’s compensation with our shareholders’ interests and perspectives, as Mr. Hays as Chief Executive Officer has been so aligned with shareholders through the significant number of shares owned by trusts for the benefit of his family. In light of the appointment of Mr. Green as our Chief Executive Officer and changes to our strategic plan associated with his appointment, the Compensation Committee, with assistance from Mr. Hays, reevaluated the compensation packages of our executive officers (other than Mr. Green and Mr. Hays). Similar to the compensation package offered to Mr. Green, the Compensation Committee desired to align the compensation of such executive officers with our shareholders’ interests and perspectives through stock ownership. In April 2025, the Compensation Committee approved a new compensation program for Ms. Hrdy, including: (i) a grant of 100,000 shares of Common Stock (the “Hrdy Shares”) under the 2006 Equity Incentive Plan on April 7, 2025 (the “Hrdy Grant Date”), subject to the following restrictions: (a) we have the option to repurchase the Hrdy Shares for $1.00 if Ms. Hrdy is terminated for cause or resigns without good reason prior to the third anniversary of the Hrdy Grant Date, (b) prior to the third anniversary of the Hrdy Grant Date, the Hrdy Shares may not be transferred, except (1) with our consent or (2) to certain family members, trusts for the benefit of such family members, or upon death, incompetency, or disability, and (c) after the third anniversary of the Hrdy Grant Date, only fifty (50%) percent of the Hrdy Shares may be transferred during Ms. Hrdy’s employment by the Company; (ii) a cash bonus equal to the value of the Hrdy Shares (based on the closing price of Common Stock on the trading day prior to the Hrdy Grant Date) multiplied by 66 2/3%; and (iii) in the event of Ms. Hrdy’s termination without cause or resignation with good reason after the third anniversary of the Hrdy Grant Date, she will be entitled to one year of continued payment of her then-current annual base salary. In consideration for foregoing compensation, Ms. Hrdy’s Severance Agreement and participation in the 2024 Long-Term Cash Plan were terminated and her 2024 Option was forfeited. Ms. Hrdy’s annualized base salary remained at $400,000. The compensation changes described above also were made for Andrew Monnich, our Chief Corporate Development Officer. The Compensation Committee did not change the compensation of Mr. Hays.

  36. 2024 Summary Compensation Table

    2024 Summary Compensation Table Set forth below is information regarding compensation earned by or paid or awarded to the Named Executive Officers. The identification of such Named Executive Officers is determined based on the individual’s total compensation for 2024, as reported below in the Summary Compensation Table. The following table sets forth information concerning the total compensation of each of our Named Executive Officers with respect to 2024, 2023, and 2022.

  37. 2024 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Michael D. Hays | 2024 | $127,400 | — | $55,000(4) | — | $2,462(5) | $184,862 | | Chief Executive Officer, President | 2023 | $127,400 | — | $64,455 | — | $3,711 | $195,566 | | | 2022 | $127,400 | — | $49,527 | — | $4,246 | $181,173 | | Helen L. Hrdy | 2024 | $397,788 | $3,539(2) | $1,138,000(4) | — | $6,559(6) | $1,545,886 | | Chief Operating Officer(1) | 2023 | $285,000 | — | $144,181 | — | $6,507 | $435,688 | | | 2022 | $285,000 | — | $110,792 | — | $6,305 | $402,097 | | Kevin R. Karas | 2024 | $76,731 | — | — | — | $347,862(7) | $424,593 | | Former Senior Vice President- Finance, Chief Financial Officer, Treasurer, and Secretary(1) | 2023 | $285,000 | — | $144,181 | — | $7,417 | $436,598 | | | 2022 | $285,000 | — | $110,792 | — | $7,814 | $403,606 | | Linda Stacy | 2024 | $245,395 | — | — | — | $7,481(6) | $252,876 | | Former Principal Accounting Officer, Principal Financial Officer, and Secretary and Current Principal Financial Officer(1) | | | | | | | | | Jason Hahn | 2024 | $384,615 | — | $1,138,000(4) | — | $4,231(8) | $1,526,846 | | Former Chief Revenue Officer(1) | | | | | | | | | Christophe Louvion | 2024 | $376,923 | $350,000(3) | $1,138,000(4) | — | $7,571(6) | $1,872,494 | | Former Chief Product Technology Officer(1) | | | | | | | |

  38. 2024 Summary Compensation Table

    | (1) Ms. Hrdy served as our Chief Growth Officer until January 16, 2024. Ms. Hrdy was promoted to Chief Customer Officer on January 16, 2024 and to Chief Operating Officer on October 14, 2024. During 2024, Mr. Karas served as our Senior Vice President – Finance, Chief Financial Officer, Treasurer, and Secretary until his retirement on March 31, 2024. Ms. Stacy served as our Vice President of Finance until March 31, 2024, our Principal Accounting Officer from March 31, 2024 until December 31, 2024, and as our Principal Financial Officer and Secretary from May 7, 2024 until December 31, 2024. Also, Ms. Stacy served as our Interim Principal Financial Officer from February 26, 2025 until March 31, 2025. Mr. Hahn served as our Chief Revenue Officer from January 16, 2024 until March 13, 2025. Mr. Louvion served as our Chief Product Technology Officer from January 16, 2024 until January 17, 2025. |

  39. 2024 Summary Compensation Table

    | (2) Represents a cash anniversary bonus awarded to Ms. Hrdy. |

  40. 2024 Summary Compensation Table

    | (3) Upon joining as our Chief Product Technology Officer, Mr. Louvion received a $350,000 cash signing bonus. |

  41. 2024 Summary Compensation Table

    | (4) Represents grant date fair value 2024 Options granted under the 2024 Long-Term Equity Plan, as set forth in the Grants of Plan-Based Awards Table below. |

  42. 2024 Summary Compensation Table

    | (5) Represents 401(k) matching contributions and health saving account matching contributions. |

  43. 2024 Summary Compensation Table

    | (6) Represents 401(k) matching contributions, health saving account matching contributions, and lifestyle spending AEB benefit. |

  44. 2024 Summary Compensation Table

    | (7) Represents 401(k) matching contributions, health saving account matching contributions, lifestyle spending AEB benefit, payout of his personal time off ($35,250) and the following amounts payable under the Karas Retirement Transition Agreement: (i) $285,000 in base salary continuation, which is equal to his annual base salary in effect as of the date of his separation and is payable for a period of twelve months following his retirement ($208,269 of this amount was paid during 2024) and (ii) $25,210 in continued payment of health insurance benefits ($18,423 of this amount was paid during 2024). The Karas Retirement Transition Agreement is discussed in more detail under the heading Karas Retirement Transition Agreement above. |

  45. 2024 Summary Compensation Table

    | (8) Represents 401(k) matching contributions. |

  46. Grants Of Plan-Based Awards in 2024

    Grants Of Plan-Based Awards in 2024 We maintain the 2006 Equity Plan pursuant to which grants may be made to our executive officers. The following table sets forth information regarding all such incentive plan awards that were made to the Named Executive Officers in 2024.

  47. Grants Of Plan-Based Awards in 2024

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Exercise or Base Price of Option Awards ($) | Grant Date Fair Value of Stock and Option Awards ($) | | Michael D. Hays | —(1) | $31,850 | $47,775 | $63,700 | — | — | — | — | — | | | 01/19/24(2) | — | — | — | — | 4,833 | — | $39.54 | $55,000 | | Helen L. Hrdy | —(1) | $100,000 | $150,000 | $200,000 | — | — | — | — | — | | | 01/19/24(2) | — | — | — | — | 100,000 | — | $39.54 | $1,138,000 | | | —(3) | $2,000,000 | $5,431,000 | $8,862,000 | — | — | — | — | — | | Kevin R. Karas | — | — | — | — | — | — | — | — | — | | Linda Stacy | — | — | — | — | — | — | — | — | — | | Jason Hahn | —(1) | $100,000 | $150,000 | $200,000 | — | — | — | — | — | | | 01/19/24(2) | — | — | — | — | 100,000 | — | $39.54 | $1,138,000 | | | —(3) | $2,000,000 | $5,431,000 | $8,862,000 | — | — | — | — | — | | Christophe Louvion | —(1) | $100,000 | 150,000 | $200,000 | — | — | — | — | — | | | 01/19/24(2) | — | — | — | — | 100,000 | — | $39.54 | $1,138,000 | | | —(3) | $2,000,000 | $5,431,000 | $8,862,000 | — | — | — | — | — |

  48. Grants Of Plan-Based Awards in 2024

    | (1) Represents potential payouts under the 2024 Short-Term Cash Plan. The material terms of the 2024 Short-Term Cash Plan are discussed in more detail under the heading 2024 Short-Term Cash Plan above. No payouts were earned under the 2024 Short-Term Cash Plan. |

  49. Grants Of Plan-Based Awards in 2024

    | (2) Represents the 2024 Options under the 2024 Long-Term Equity Plan. The FASB ASC Topic 718 grant date fair value of the 2024 Options of $11.38 per share was calculated using a Black-Scholes valuation model. The material terms of the 2024 Options are discussed in more detail under the heading 2024 Long-Term Equity Plan above. See Note 9 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of assumptions made in the valuation of share-based compensation. Since Mr. Hahn was terminated without cause, his 2024 Option will continue to be eligible for vesting and will vest if (and only if) the 2024 Equity Performance Goal is satisfied and, in such event, the shares earned will be prorated for the portion of the period of his employment at the Company between January 19, 2024 and December 31, 2026. Upon his resignation on January 17, 2025, Mr. Louvion’s 2024 Option was forfeited. |

  50. Grants Of Plan-Based Awards in 2024

    | (3) Represents potential payouts under the 2024 Long-Term Cash Plan. The material terms of the 2024 Long-Term Cash Plan are discussed in more detail under the heading 2024 Long-Term Cash Plan above. As described in more detail under the heading Compensation Decisions with Respect to 2025 above, Ms. Hrdy’s participation in the 2024 Long-Term Cash Plan was terminated without payout in consideration for compensation granted to Ms. Hrdy in April 2025. Mr. Hahn will not receive any payout under the 2024 Long-Term Cash Incentive Plan, as the Company’s TRCV as of the most recent week ended prior to his termination on March 13, 2024 was less than $170 million. Upon his resignation on January 17, 2025, Mr. Louvion’s participation in the 2024 Long-Term Cash Plan terminated without payout. |

  51. Outstanding Equity Awards at December 31, 2024

    Outstanding Equity Awards at December 31, 2024 The following table sets forth information on outstanding option awards held by the Named Executive Officers on December 31, 2024, including the number of shares underlying exercisable, unexercisable, and unearned portions of each stock option, the exercise price and expiration date of each outstanding option.

  52. Outstanding Equity Awards at December 31, 2024

    | | | Option Awards | | | | | Name | No. of Securities Underlying Unexercised Options (Exercisable) (#) | No. of Securities Underlying Unexercised Options (Unexercisable) (#) | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option Exercise Price ($) | Option Expiration Date | | Michael D. Hays | 10,014(1)(2) | - | - | $13.17 | 01/06/25 | | | 9,145(1)(3) | - | - | $15.23 | 01/05/26 | | | 7,478(1)(4) | - | - | $18.80 | 01/04/27 | | | 5,193(1)(5) | - | - | $36.80 | 01/03/28 | | | 4,990(1)(6) | - | - | $38.30 | 01/03/29 | | | - | 2,904(1)(7) | - | $65.80 | 01/03/30 | | | - | 4,452(1)(8) | - | $42.92 | 01/05/31 | | | - | 4,523(1)(9) | - | $42.25 | 01/04/32 | | | - | 4,909(1)(10) | - | $38.93 | 01/04/33 | | | - | - | 4,833(1)(11) | $39.54 | 01/19/34 | | Helen L. Hrdy | 12,346(1)(3) | - | - | $15.23 | 01/05/26 | | | 12,619(1)(4) | - | - | $18.80 | 01/04/27 | | | 8,764(1)(5) | - | - | $36.80 | 01/03/28 | | | 8,420(1)(6) | - | - | $38.30 | 01/03/29 | | | - | 5,699(1)(7) | - | $65.80 | 01/03/30 | | | - | 9,960(1)(8) | - | $42.92 | 01/05/31 | | | - | 10,118(1)(9) | - | $42.25 | 01/04/32 | | | - | 10,981(1)(10) | - | $38.93 | 01/04/33 | | | - | - | 100,000(1)(11)(12) | $39.54 | 01/19/34 | | Kevin R. Karas | 20,458(1)(3) | - | - | $15.23 | 01/05/26 | | | 16,728(1)(4) | - | - | $18.80 | 01/04/27 | | | 11,617(1)(5) | - | - | $36.80 | 01/03/28 | | | 11,162(1)(5) | | - | $38.30 | 01/03/29 | | Jason Hahn | - | - | 100,000(1)(11)(13) | $39.54 | 01/19/34 | | Linda Stacy | - | - | - | - | - | | Christophe Louvion | - | - | 100,000(1)(11)(14) | $39.54 | 01/19/34 |

  53. Outstanding Equity Awards at December 31, 2024

    | (1) Option to purchase shares of Common Stock. | | (2) Options vest in full on the fifth anniversary of the grant date. These options vested on January 6, 2020. | | (3) Options vest in full on the fifth anniversary of the grant date. These options vested on January 5, 2021. | | (4) Options vest in full on the fifth anniversary of the grant date. These options vested on January 4, 2022. | | (5) Options vest in full on the fifth anniversary of the grant date. These options vested on January 3, 2023. |

  54. Outstanding Equity Awards at December 31, 2024

    | (6) Options vest in full on the fifth anniversary of the grant date. These options vested on January 3, 2024. | | (7) Options vest in full on the fifth anniversary of the grant date. These options vested on January 3, 2025. | | (8) Options vest in full on the fifth anniversary of the grant date. These options will vest on January 5, 2026. | | (9) Options vest in full on the fifth anniversary of the grant date. These options will vest on January 4, 2027. | | (10) Options vest in full on the fifth anniversary of the grant date. These options will vest on January 4, 2028. | | (11) Represents a 2024 Option granted pursuant to 2024 Long-Term Equity Plan. The material terms of the 2024 Long-Term Equity Plan are discussed in more detail under the heading 2024 Long-Term Equity Plan above. | | (12) As described in more detail under the heading Compensation Decisions with Respect to 2025 above, Ms. Hrdy’s 2024 Option was forfeited in consideration for compensation granted to Ms. Hrdy in April 2025. | | (13) Since Mr. Hahn was terminated without cause, his 2024 Option will continue to be eligible for vesting and will vest if (and only if) the 2024 Equity Performance Goal is satisfied and, in such event, the shares earned will be prorated for the portion of the period of his employment at the Company between January 19, 2024 and December 31, 2026. | | (14) Mr. Louvion’s 2024 Option was forfeited upon his resignation on January 17, 2025. |

  55. Option Exercises and Stock Vested in 2024

    Option Exercises and Stock Vested in 2024

  56. Option Exercises and Stock Vested in 2024

    | | Option Awards | | | Name | Number of Shares Acquired on Exercise (#)(1) | Value Realized on Exercise ($)(2) | | Michael D. Hays | 2,904 | $60,287 | | Helen L. Hrdy | - | - | | Kevin R. Karas | - | - | | Linda Stacy | - | - | | Jason Hahn | - | - | | Christophe Louvion | - | - |

  57. Option Exercises and Stock Vested in 2024

    | (1) Shares of Common Stock. | | (2) Amounts represent the product of the number of shares acquired on exercise multiplied by the excess of market price at exercise over the exercise price per share. |

  58. Pay Versus Performance

    Pay Versus Performance

  59. Pay Versus Performance

    | | | | | | Value of initial fixed $100 investment based on: | | | | | Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO (1) | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs (2) | Total Shareholder Return | Peer group Total Shareholder Return(3) | Net Income | Revenue | | | | | | | | | (in thousands) | | | 2024 | $184,862 | $(43,480) | $1,124,539 | $296,563 | $29.28 | $142.93 | $24,783 | $143,060 | | 2023 | $195,566 | $202,165 | $428,157 | $443,660 | $64.34 | $128.14 | $30,971 | $148,580 | | 2022 | $181,173 | $184,526 | $410,113 | $418,936 | $59.60 | $109.59 | $31,800 | $151,568 | | 2021 | $217,094 | $207,809 | $490,467 | $469,883 | $64.98 | $137.74 | $37,466 | $147,954 | | 2020 | $254,504 | $(329,929) | $524,435 | $(1,183,288) | $65.91 | $119.96 | $37,260 | $133,277 |

  60. Pay Versus Performance

    | (1) Mr. Hays was the Principal Executive Officer (“PEO”) for 2024, 2023, 2022, 2021, and 2020. The following amounts were deducted and added to determine the compensation actually paid to the PEO: |

  61. Pay Versus Performance

    | Year | Summary Compensation Table Total for PEO | Deduct Stock and Option Awards Reported in the Summary Compensation Table | Add Awards Granted During the Covered FY that are Outstanding and Unvested as of the End of the Covered FY | Add Change in Fair Value as of the End of the Covered FY for Awards Granted in a Prior FY that are Outstanding and Unvested as of the End of the Covered FY | Add Change in Fair Value as of the Vesting Date for Awards Granted in a Prior FY that Vested During the Covered FY | Compensation Actually Paid to PEO | | 2024 | $184,862 | $(55,000) | $1,406 | $(179,760) | $5,012 | $(43,480) | | 2023 | $195,566 | $(64,455) | $70,289 | $(4,749) | $5,514 | $202,165 | | 2022 | $181,173 | $(49,527) | $54,018 | $(2,257) | $1,119 | $184,526 | | 2021 | $217,094 | $(49,595) | $45,549 | $(7,756) | $2,517 | $207,809 | | 2020 | $254,504 | $(60,258) | $18,190 | $(564,781) | $22,416 | $(329,929) |

  62. Pay Versus Performance

    | (2) Mr. Hahn, Ms. Hrdy, Mr. Karas, Ms. Stacy, and Mr. Louvion were Non-PEO Named Executive Officers (“NEOs”) during 2024. Ms. Hrdy, Mr. Karas, and Jona S. Raasch (our former Chief Operating Officer) were Non-PEO NEOs during 2023, 2022, 2021, and 2020. Steven D. Jackson, our former President, was a non-PEO NEO during 2020. The following average amounts were deducted and added to determine the average compensation actually paid to the non-PEO NEOs: |

  63. Pay Versus Performance

    | Year | Average Summary Compensation Table Total for Non-PEO NEOs | Deduct Stock and Option Awards Reported in the Summary Compensation Table | Add Awards Granted During the Covered FY that are Outstanding and Unvested as of the End of the Covered FY | Add Change in Fair Value as of the End of the Covered FY for Awards Granted in a Prior FY that are Outstanding and Unvested as of the End of the Covered FY | Add Change in Fair Value as of the Vesting Date for Awards Granted in a Prior FY that Vested During the Covered FY | Subtract Awards Granted in a Prior FY that Failed to Meet the Applicable Vesting Conditions During the Covered FY | | Add Dividends Paid on Awards in the Covered FY Prior to the Vesting Date that are Not Otherwise Included in Total Compensation for the Covered FY | Average Compensation Actually Paid to Non-PEO NEOs | | 2024 | $1,124,539 | $(682,800) | $17,457 | $(79,628) | $3,933 | $(86,939 | )(4) | - | $296,563 | | 2023 | $428,157 | $(146,711) | $159,990 | $(9,317) | $11,541 | - | | - | $443,660 | | 2022 | $410,113 | $(112,737) | $122,960 | $(3,742) | $2,342 | - | | - | $418,936 | | 2021 | $490,467 | $(112,904) | $103,693 | $(16,358) | $4,985 | - | | - | $469,883 | | 2020 | $524,435 | $(134,221) | $29,808 | $(869,318) | $(98,275) | $(637,647 | ) (5) | $1,930 | $(1,183,288) |

  64. Pay Versus Performance

    | (3) Utilizes the Russell 2000 Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Form 10-K for the year ended December 31, 2024. Because of the uniqueness of our markets and products and lack of publicly traded peers, we do not believe that a combination of peer issuers can be selected on an industry or line-of-business basis to provide a meaningful basis for comparing shareholder return. Accordingly, the Russell 2000 Index, which is comprised of issuers with generally similar market capitalizations to that of the Company, is included in the table as permitted by applicable regulations. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the Russel 2000 Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. |

  65. Pay Versus Performance

    | (4) Represents options held by Mr. Karas that were forfeited upon his retirement in March 2024. |

  66. Pay Versus Performance

    | (5) Represents options held by Mr. Jackson that were forfeited upon his resignation in October 2020. |

  67. Pay Versus Performance

    The relationship between the compensation actually paid to the PEO and the average compensation actually paid to the non-PEO NEOs and the cumulative total shareholder return of the Company and the Russell 2000 Index for 2024, 2023, 2022, 2021, and 2020 is represented by the graph below: The relationship between the compensation actually paid to the PEO and the average compensation actually paid to the non-PEO NEOs and the Company’s net income for 2024, 2023, 2022, 2021, and 2020 is represented by the graph below: The relationship between the compensation actually paid to the PEO and the average compensation actually paid to the non-PEO NEOs and the Company’s revenue for 2024, 2023, 2022, 2021, and 2020 is represented by the graph below: The following tabular list includes the financial performance measures which in the Company’s assessment represent the most important financial performance measures used by the Company to link compensation actually paid to the Company’s NEO’s for 2024 to Company performance.

  68. Pay Versus Performance

    | Important Financial Measures | | Net Income | | Revenue Stock | | Total Recurring Contract Value | | Adjusted EBITDA Margin |

  69. CEO Pay Ratio

    CEO Pay Ratio As required by Item 402(u) of Regulation S-K promulgated under the Exchange Act, we are providing the following information about the ratio of the median annual total compensation of our associates (i.e., employees) and the annual total compensation of Michael D. Hays, our Chief Executive Officer. For the year ended December 31, 2024:

  70. CEO Pay Ratio

    | ● | the median of the annual total compensation of all associates of the Company was reasonably estimated to be $85,490; and |

  71. CEO Pay Ratio

    | ● | the annual total compensation of Mr. Hays was $184,862. |

  72. CEO Pay Ratio

    | ● | Based on this information, the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all other associates is estimated to be 2.16 to 1. |

  73. CEO Pay Ratio

    We identified the median associate by examining total cash compensation (i.e., base wages plus cash bonuses and/or commissions) for 2024 of all individuals employed by us on December 31, 2024 (other than Mr. Hays), whether full-time, part-time or on a seasonal basis. We annualized total cash compensation for all permanent associates who were hired after January 1, 2024, as permitted by the rules of the Securities and Exchange Commission. To calculate the 2024 annual total compensation of our median associate for purposes of this disclosure, we added together all of the elements of our median associate’s compensation for 2024 in the same way that we calculate the annual total compensation of our Named Executive Officers in the Summary Compensation Table. To calculate Mr. Hays’ annual total compensation, we used the amount reported in the “Total” column of our 2024 Summary Compensation Table. To calculate our ratio, we divided Mr. Hays’ annual total compensation by the annual total compensation of our median associate.