DEF 14A of Clarus Corp
Filed Apr 24, 2025 · FY20240001558370-25-005417
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our Second Amended and Restated Bylaws (the “Bylaws”) provide that our Board of Directors will consist of not less than three, nor more than seven members, with such number to be fixed by the Board of Directors. The current number of directors has been fixed at seven by the Board of Directors. Messrs. Michael A. Henning and Donald L. House have advised the Company that they will not stand for re-election as directors of the Company and will resign as of the date of the Meeting. Upon the resignation of Messrs. Henning and House, the current number of directors on the Board of Directors will be reduced and fixed from seven directors to five directors. Our Nominating/Corporate Governance Committee and our Board of Directors have selected the five nominees for directors that are listed in this Proxy Statement for election at the Meeting. Our directors are elected annually at the Annual Meeting of Stockholders. Their respective terms of office will continue until the next Annual Meeting of Stockholders and until their successors have been duly elected and qualified in accordance with our Bylaws. There are no family relationships among any of our directors, nominees for director or executive officers. Except as otherwise specified or in the case of broker non-votes, each Proxy Card received will be voted for the election of the five nominees for director named below to serve until the next Annual Meeting of Stockholders and until their successors shall have been duly elected and qualified. Each of the nominees named below has been nominated by the Nominating/Corporate Governance Committee of the Board of Directors and has consented to be named a nominee in this Proxy Statement and to serve as a director, if elected. Should any nominee become unable or unwilling to accept a nomination for election, the persons named in the enclosed Proxy Card will vote for the election of a nominee designated by the Board of Directors or will vote for such lesser number of directors as may be prescribed by the Board of Directors in accordance with our Bylaws. When considering whether directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of the Company’s business and structure, the Nominating/Corporate Governance Committee and the Board of Directors focused primarily on the information discussed in each of the nominee’s individual biographies set forth below, which contains information regarding the person’s service as a director, business experience and director positions held currently or at any time during the last five years. The age and principal occupation of each person nominated as a director is set forth below: Warren B. Kanders, 67, our Executive Chairman, has served as one of our directors since June 2002 and as Executive Chairman of our Board of Directors since December 2002. Since 1990, Mr. Kanders has served as the President of Kanders & Company, Inc., a private investment firm principally owned and controlled by Mr. Kanders, which makes investments in and provides consulting services to public and private entities. Since April 2012, Mr. Kanders has served as the Chief Executive Officer and Chairman of the Board of Directors of Cadre Holdings, Inc., a company listed on the New York Stock Exchange since the closing of its initial public offering in November 2021, and a global leader in the manufacture and distribution of safety equipment for professionals. From January 1996 until its sale to BAE Systems plc (“BAE Systems”) on July 31, 2007, Mr. Kanders served as the Chairman of the Board of Directors, and from April 2003 as the Chief Executive Officer, of Armor Holdings, Inc. (“Armor Holdings”), formerly a New York Stock Exchange-listed company and a manufacturer and supplier of military vehicles, armored vehicles, and safety and survivability products and systems to the aerospace and defense, public safety, homeland security, and commercial markets. Mr. Kanders received an A.B. degree in Economics from Brown University. Based upon Mr. Kanders’ role as Executive Chairman of the Company, service as a chairman and a director of a wide range of other public companies, financial background and education, as well as his extensive investment, capital raising, acquisition and operating expertise, the Company believes that Mr. Kanders has the requisite set of skills to serve as a member of the Board of Directors of the Company. Nicholas Sokolow, 75, has served as one of our directors since June 2002, and has been designated as the “lead independent director” of the Company’s Board of Directors since June 2016. From April 2012 until January 2025, Mr. Sokolow served as a member of the Board of Directors of Cadre Holdings, Inc., a company listed on the New York Stock Exchange since the closing of its initial public offering in November 2021, and a global leader in the manufacture and distribution of safety equipment for professionals. From January 1996 until its sale to BAE Systems on July 31, 2007, Mr. Sokolow served as a member of the Board of Directors of Armor Holdings. Mr. Sokolow served as a member of the Board of Directors of Stamford Industrial Group, Inc. from October 2006 until September 2009. From 2007 until December 31, 2014, Mr. Sokolow practiced law at the firm of Lebow & Sokolow LLP. From 1994 to 2007, Mr. Sokolow was a partner at the law firm of Sokolow, Carreras & Partners. From June 1973 until October 1994, Mr. Sokolow was an associate and partner at the law firm of Coudert Brothers. Mr. Sokolow graduated with Economics and Finance degrees from the Institut D’Etudes Politiques, a Law degree from the Faculte de Droit and a Masters of Comparative Law degree from the University of Michigan. Mr. Sokolow is also an honorary member of the French Bar. Based upon Mr. Sokolow’s role as the Chairman of the Nominating/Corporate Governance Committee of the Company’s Board of Directors, education, legal background involving mergers and acquisitions, corporate governance expertise and extensive experience serving as a member of the boards of directors and committees of other public companies, the Company believes that Mr. Sokolow has the requisite set of skills to serve as a member of the Board of Directors of the Company and/or its committees.
ELECTION OF DIRECTORS
Susan Ottmann, 59, has served as one of our directors since June 2021. Ms. Ottmann has more than 25 years of industrial engineering experience in multiple engineering, marketing, manufacturing and leadership roles for a number of multinational companies. Since August 2018, Ms. Ottmann has served as the graduate program director for Engineering Professional Development in the College of Engineering at the University of Wisconsin-Madison where she also teaches courses in technical leadership and technical project management for both credit and professional development programs. From October 2015 to August 2018, Ms. Ottmann was the business and program director in the College of Engineering at the University of Wisconsin-Madison where she managed the manufacturing systems online master’s program, led technical leadership short course programs and managed the Engineering Professional Development department’s human resource and finance staff as well as business process teams. From September 2013 to July 2015, Ms. Ottmann was the general manager for Thermo Fisher Scientific’s global analytical instrument business where she managed a team of 770 associates with operations in the US, UK, Germany and China, as well as sales teams worldwide. From April 2006 to September 2013, Ms. Ottmann served in various roles at Danaher Corporation, including serving as President and Vice President in certain of its global business units. Ms. Ottmann received B.S. degrees in Mechanical Engineering and Engineering & Public Policy from Carnegie Mellon as well as an M.S. degree in Management from North Carolina State University. Based upon Ms. Ottmann’s diverse global business, educational and leadership experience in a variety of engineering, commercial, financial, product development, marketing, and manufacturing roles, the Company believes that Ms. Ottmann has the requisite set of skills to serve as a member of the Board of Directors of the Company and/or its committees. Roger Werner, 75, has served as one of our directors since March 2024. Mr. Werner has extensive marketing experience in the automotive industry as well as in the television programming industry having designed, built and managed some of television’s most successful sports networks. From April 2015 until September 2023, Mr. Werner served as an advisor and a director at The MotorTrend Group, a producer of digital automotive related content and a Discovery Communications company. From October 2006 until May 2013, Mr. Werner served as a member of the Board of Directors of Outdoor Channel Holdings, Inc, a NASDAQ listed entertainment and media company, and served as its President as well as Chief Executive Officer from February 2007 until January 2012. Mr. Werner also served as the Co-Chairman of the Board of Directors of Outdoor Channel Holdings, Inc, from February 2012 until May 2013. From January 1995 until October 2001, he served as the founder, President and CEO of Speedvision (now Fox Sports 1) and Outdoor Life Network (now NBC Sports). From November 1990 to August 1994, Mr. Werner served as President and CEO of Daniels Programming Ventures, LLC, where he managed Daniels’ interest in Prime Ticket Network (now Fox Sports West), and Prime Sports Network Group (now Fox Sports Net), a joint venture with Liberty Media, along with a number of other sports media properties. From March 1982 to August 1988 he was the Chief Operating Officer of ESPN, and from August 1988 to November 1990 he was its President and Chief Executive Officer. Prior to working at ESPN, he served as a management consultant for McKinsey and Company from October 1979 to March 1982. Mr. Werner received a B.A from Trinity College and holds an M.B.A. from the University of Virginia’s Darden School where he served two terms as a trustee. Mr. Werner also serves as Chairman of ACCUS (the Automobile Competition Committee of the United States) America’s representative to the FIA (International Automobile Federation) and the American Motorsport industry’s trade association. Based upon Mr. Werner’s extensive marketing expertise in the automotive industry as well as in the television programming industry and extensive experience serving as a member of the boards of directors of other public companies, the Company believes that Mr. Werner has the requisite set of skills to serve as a member of the Board of Directors of the Company and/or its committees. Mark M. Besca, 65, has served as one of our directors since December 2024. Mr. Besca over 40 years of accounting and financial expertise as well as extensive audit committee experience serving large public companies as an audit partner and as a member of a board of directors and an audit committee of a public company. Since January 2025, Mr. Besca has served as a member of the Board of Directors of Las Vegas Sands Corp., a New York Stock Exchange listed developer and operator of world-class Integrated Resorts. Since November 2020, Mr. Besca served as a member of the Board of Directors of Markel Group Inc., a New York Stock Exchange listed financial holding company with diverse operations primarily in insurance, reinsurance, and investment. From January 2017 until July 2020, Mr. Besca served as the Leader of Long-Term Value and Stakeholder Capitalism initiative at EY LLP, formerly Ernst & Young, LLP (“EY”). From July 2012 to June 2018, Mr. Besca served as Managing Partner of EY’s New York City office. From July 2009 to June 2011, he served as Northeast Managing Partner of EY’s Assurance and Advisory Business. In addition, during Mr. Besca’s 40 years at EY until his retirement, he served as lead and senior advisory audit partner of Fortune 500 companies in the media and entertainment, consumer products and airline industries. Mr. Besca received a BBA in Accounting from Pace University – Lubin School of Business and holds an MBA from Columbia Business School. Mr. Besca holds the position of Chairman Emeritus of the Pace University Board of Trustees and is on the board of the Roundabout Theatre Production Company. Mr. Besca is also a David Rockefeller Fellow of the NYC Partnership. Based upon Mr. Besca’s role as the Chairman of the Audit Committee of the Company’s Board of Directors, extensive accounting and financial expertise, as well as extensive audit committee experience serving large public companies as an audit partner, board member and audit committee chairman, the Company believes that Mr. Besca has the requisite set of skills to serve as a member of the Board of Directors of the Company and/or its committees. The affirmative vote of a plurality of the votes cast virtually at the Meeting or represented by proxy at the Meeting is necessary for the election as directors of the five nominees named in this Proxy Statement (assuming a quorum of a majority of the outstanding shares of common stock is present). THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE ABOVE-NAMED DIRECTOR NOMINEES.
GOVERNANCE OF THE COMPANY
GOVERNANCE OF THE COMPANY
Corporate Governance
Corporate Governance Our Board of Directors is committed to sound and effective corporate governance practices. The Company’s management and our Board of Directors reviewed our corporate governance practices in light of the Sarbanes-Oxley Act of 2002 as well as the rules of the SEC and the NASDAQ Global Select Market (“NASDAQ”). Based on that review, the Board of Directors maintains codes of ethics and conduct, corporate governance guidelines, committee charters, complaint procedures for accounting and auditing matters, an Audit Committee pre-approval policy, an insider trading policy and a compensation recovery policy. The Company is listed on the NASDAQ, and therefore, it has modeled its corporate governance practices after the listing requirements of NASDAQ.
Corporate Governance Guidelines and Documents
Corporate Governance Guidelines and Documents The Code of Ethics for Senior Executive Officers and Senior Financial Officers, the Code of Business Conduct and Ethics, Complaint Procedures for Accounting and Auditing Matters, the Corporate Governance Guidelines, and the Charters of our Audit, Compensation and Nominating/Corporate Governance Committees were adopted by Clarus for the purpose of promoting honest and ethical conduct, promoting full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by Clarus, and promoting compliance with all applicable rules and regulations that apply to Clarus and its officers and directors. These policies are available on our Internet website, at www.claruscorp.com, under the tab “Governance Documents” within the section called “Governance.” In addition, you may request a copy of any such materials, without charge, by submitting a written request to: Clarus Corporation, Attention: Secretary, 2084 East 3900 South, Salt Lake City, UT 84124.
Board of Directors
Board of Directors Our Board of Directors is currently comprised of the following seven members: Warren B. Kanders, Michael A. Henning, Donald L. House, Susan Ottmann, Nicholas Sokolow, Roger Werner and Mark M. Besca. The Company’s Board of Directors appointed Mr. Besca to serve on the Company’s Board of Directors effective as of December 5, 2024, until the Meeting and until his successor is duly elected and qualified. Messrs. Henning and House have advised the Company that they will not stand for re-election as directors of the Company and will resign as of the date of the Meeting. During fiscal 2024, the Board of Directors held seven meetings, and acted by unanimous written consent in lieu of a meeting three times. During fiscal 2024, all of the directors attended 75% or more of the aggregate number of meetings of (i) the full Board of Directors held during the period in which he or she was a director in fiscal 2024, and (ii) the committees of the Board of Directors of which he or she was a member. The Company does not have a formal policy as to Board of Directors attendance at our Annual Meetings of Stockholders. All of the members of our Board of Directors who served as directors during fiscal 2024 attended last year’s virtual Annual Meeting of Stockholders, which was held on May 30, 2024.
Compensation Committee
| ● | to review on an annual basis director compensation and benefits. |
Discussion of Director Compensation
Discussion of Director Compensation We pay three primary components of compensation to our non-management directors: an annual cash retainer, committee chairman fees, and equity awards, generally comprising of stock equity awards such as stock options. In setting director compensation, the Company considers the significant amount of time that directors expend in fulfilling their duties on our Board of Directors and its committees as well as the skill level required by the Company of members of the Board of Directors and the need to continue to attract highly qualified candidates to serve on our Board of Directors. Director compensation arrangements are reviewed annually to maintain such standards. In 2024, members of our Board of Directors, other than Mr. Besca, were compensated as follows: (i) the non-employee directors serving on the Board of Directors each received an annual stock option grant at the Annual Meeting of Stockholders of 20,000 shares at an exercise price equal to the closing price of the Company’s common stock on the date of such grant, and vesting and becoming exercisable in four equal consecutive quarterly tranches; (ii) the non-employee directors serving on the Board of Directors each received an annual cash payment, payable in equal quarterly installments, in consideration for their services on the Board of Directors (with the annual cash compensation increased from $35,000 to $40,000 effective as of the third quarter, such that payments for the first and second quarters were made at the $35,000 rate and payments for the third and fourth quarters were made at the $40,000 rate); (iii) the non-employee directors serving on the Board of Directors each received a one-time stock option grant of 60,000 shares at an exercise price equal to the closing price of the Company’s common stock on the date of such grant, and vesting and becoming exercisable in three equal consecutive annual tranches beginning on the grant date; (iv) Mr. Sokolow, the lead independent director of the Board of Directors, received an additional annual payment of $10,000, payable in equal, quarterly installments, in consideration of his service as the lead independent director of the Board of Directors, (v) the chairmen of the respective committees of the Board of Directors, other than the Board of Directors’ Audit Committee, received an additional annual payment of $10,000, payable in equal quarterly installments, in consideration for their services as chairmen on the respective Board of Directors’ committees; and (vi) the chairman of the Board of Directors’ Audit Committee received an additional annual payment of $15,000, payable in equal quarterly installments, in consideration for his service as the chairman of the Board of Directors’ Audit Committee. Mr. Werner, who joined the Board of Directors during the first quarter, did not receive a payment for that quarter. Mr. Besca received a stock option grant of 10,000 shares on December 5, 2025, in connection with his appointment to the Board of Directors, at an exercise price equal to the closing price of the Company’s common stock on the date of such grant and vesting and becoming exercisable in two equal consecutive quarterly tranches. In addition, upon the closing of the sale of the Company’s Precision Sport Segment on February 29, 2024, the independent members of the Board of Directors and the members of the Special Committee serving on the Board of Directors at that time received the following additional compensation in connection with their respective additional responsibilities as part of reviewing, considering, evaluating, negotiating, and ultimately determining whether to approve a possible sale of the Company’s Precision Sport Segment: (i) each of the then serving independent directors of the Board of Directors received a one-time payment in the amount of $15,000; (ii) each member of the Special Committee received a one-time payment in the amount of $25,000; (iii) Mr. Henning, as a special advisor to the Company and the Special Committee regarding internal audit matters, received a one-time payment in the amount of $25,000; and (iv) Mr. Sokolow, as chairman of the Special Committee, received a one-time payment in the amount of $15,000. In 2024, our current employee director, Mr. Kanders, was compensated pursuant to his employment agreement (which is described below under the heading “Employment Agreements”).
Overview
Overview The Compensation Committee assists the independent members of the Board of Directors in establishing a compensation package for Clarus’ Executive Chairman and assists the Board of Directors in establishing compensation packages for Clarus’ other Named Executive Officers, its key employees and non-employee directors as well as administering Clarus’ incentive plans. The Compensation Committee is generally responsible for setting and administering the policies which govern annual salaries of named executive officers, raises and bonuses and certain awards of stock options and common stock under the Company’s 2015 Stock Incentive Plan (or any predecessor or successor plan) and otherwise, and such responsibility is generally limited to the actions taken by the Compensation Committee, although at times the full Board of Directors has determined annual executive officer and key employee salaries, raises and bonuses as well as grants of stock options and common stock without having first received recommendations from the Compensation Committee. From time to time, the Compensation Committee reviews our compensation packages to ensure that they remain competitive with the compensation packages offered by similarly situated companies and continue to incentivize management and align management’s interests with those of our stockholders. Although we do not target executive compensation to any peer group median, we strive to provide a compensation package that is competitive in the market and rewards each executive officer’s performance. The Compensation Committee is comprised of four directors, each of whom has considerable experience in executive compensation issues. Each member of the Compensation Committee meets the independence requirements specified by NASDAQ and by Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). No member of the Compensation Committee has ever been an officer or employee of the Company, nor is there a direct or indirect relationship between any of the members of the Committee and any of the Company’s executive officers. The Compensation Committee operates under a written charter adopted by the Board of Directors that is available on our Internet website, at www.claruscorp.com, under the tab “Governance Documents” within the section called “Governance.”
Compensation Program Components
Compensation Program Components Our executive compensation program emphasizes company performance, individual performance and an increase in stockholder value over time in determining executive pay levels. Our executive compensation program consists of three key elements: (i) annual base salaries; (ii) a performance-based annual bonus; and (iii) periodic grants of stock options and restricted stock awards. The Compensation Committee believes that this three-part approach best serves our and our stockholders’ interests by motivating executive officers to improve our financial position, holding executives accountable for the performance of the organizations for which they are responsible and by attracting key executives into our service. Under our compensation program, annual compensation for Named Executive Officers is composed of a significant portion of pay that is “at risk”, specifically, the annual bonus, stock options and restricted stock. For the fiscal year ended December 31, 2024, the components of compensation for Named Executive Officers were: (i) cash compensation; (ii) equity-based compensation; and (iii) perquisites and other personal and additional benefits. Additional details on each element of our compensation program are outlined below.
Cash Compensation
Cash Compensation Base Salary. In reviewing and approving the base salaries of our Named Executive Officers, the Compensation Committee considers the scope of work and responsibilities and other individual-specific factors; the recommendations of our Executive Chairman (except in the case of his own compensation); compensation for similar positions at similarly situated companies; and the executive officer’s experience. The Compensation Committee generally reviews executive officer and key employee salaries annually at the end of the fiscal year and establishes the base salaries for the upcoming fiscal year in connection with establishing the Company’s budget for the upcoming fiscal year. The employment agreements of our Named Executive Officers, other than Mr. Yates, are described below under the heading “Employment Agreements”. The Company does not have an employment agreement with Mr. Yates, who was appointed to serve as the Company’s Chief Financial Officer effective as of January 3, 2022. On November 13, 2020, Mr. Kanders’ annual base salary of $350,000 that was previously established pursuant to his employment agreement dated June 1, 2017 was increased to $425,000 effective as of January 1, 2021. On March 4, 2022, Mr. Kanders’ annual base salary was increased to $550,000 effective as of January 1, 2022. On March 14, 2023, Mr. Kanders’ annual base salary was increased to $600,000 effective as of January 1, 2023, pursuant to the terms of his new employment agreement, dated as of March 14, 2023 (the “Kanders Employment Agreement”), which annual base salary did not increase in 2024. In establishing the 2024 salary of Mr. Kanders, the Compensation Committee and the Board of Directors considered his extensive investment, capital raising, acquisition and operating expertise, as well as the responsibilities and duties required by his role as executive chairman of a public company. The Compensation Committee and the Board of Directors also considered, among other things, Mr. Kanders’ increased responsibilities as a result of the 2023 departures of Messrs. Walbrecht and Kuehne and his importance to the operations and continued future success of the Company. Mr. Kanders devotes only as much of his time as is necessary to the affairs of the Company and also serves in various capacities with other public and private entities, including not-for-profit entities. In 2022 and 2023, the annual base salary for Mr. Yates was $400,000. On January 1, 2024, Mr. Yates’ annual base salary was increased to $432,000. In establishing Mr. Yates base salary, the Compensation Committee considered, among other things, the compensation for similar positions at similarly situated companies, as well as the responsibilities and duties required by his role as chief financial officer of a public company. The Compensation Committee and the Board of Directors also considered, among other things, Mr. Yates’ increased responsibilities as a result of the 2023 departures of Messrs. Walbrecht and Kuehne. Performance-Based Annual Bonus. With regard to the performance-based compensation of any Named Executive Officer, the Compensation Committee generally establishes the performance goals and then certifies the satisfaction of such performance goals prior to the payment of the performance-based bonus compensation. In reviewing and approving the annual performance-based bonus for our executive officers, the Compensation Committee may also consider an executive officer’s contribution to the overall performance of Clarus, as well as annual bonuses awarded to persons holding similar positions at similarly situated companies. On July 1, 2024, Mr. Kanders received a discretionary cash performance bonus in the amount of $500,000. In establishing the discretionary bonus, the Compensation Committee and the Board of Directors considered Mr. Kanders’ exceptional leadership in connection with redefining, reinvigorating and repositioning the Company for success following the divesture of the Company’s Precision Sport segment, his efforts to improve shareholder outreach resulting in significant shareholders showing support for the Company by increasing their ownership in shares of the Company’s common stock, as well as improving the quality of the Company’s management through hiring highly experienced and dedicated executives to guide the Company’s Outdoor and Adventure segments. The Compensation Committee and the Board of Directors also considered, among other things, that Mr. Kanders had not received a cash performance bonus since the year ended December 31, 2020. On March 5, 2025, Mr. Kanders received a discretionary annual cash performance bonus in the amount of $330,000 for the performance of his services in 2024. In establishing the discretionary annual cash bonus, the Compensation Committee and the Board of Directors considered, among other factors, Mr. Kanders’ contributions to the Company’s performance and achievement of key milestones during the year ended December 31, 2024, including, but not limited to, the Company’s attainment of certain revenue, EBITDA, and net working capital targets, as well as improvements in cash flow following the divestiture of the Company’s Precision Sport segment. On February 20, 2024, the Compensation Committee and the Board of Directors determined to award Mr. Yates a discretionary cash bonus for the performance of his services in 2023, pursuant to which he was paid $300,000, representing a target of 75% of his 2023 base salary. In determining to award a discretionary cash bonus to Mr. Yates, the Compensation Committee took into account, among other things, his contributions to the Company’s performance and achievement of certain milestones during the year ended December 31, 2023, including, but not limited to: (i) Mr. Yates’ increased responsibilities as result of the 2023 departures of Messrs. Walbrecht and Kuehne; and (ii) Mr. Yates’ material contributions to the Company’s successful sale of its Precision Sports Segment on February 29, 2024, pursuant to a Purchase and Sale Agreement dated as of December 29, 2023, by and among Bullseye Acquisitions, LLC, Everest/Sapphire Acquisition, LLC and the Company. On March 5, 2025, Mr. Yates received a discretionary cash performance bonus in the amount of $178,000 for the performance of his services in 2024. In establishing the discretionary bonus, the Compensation Committee and the Board of Directors considered, among other factors, Mr. Yates’ contributions to the Company’s performance and achievement of key milestones during the year ended December 31, 2024, including, but not limited to, the Company’s attainment of certain revenue, EBITDA, and net working capital targets, as well as improvements in cash flow following the divestiture of the Company’s Precision Sport segment. Base salary, incentive compensation and the amount of discretionary bonus (total cash compensation) earned in 2024, 2023 and 2022 by the Named Executive Officers are reflected in the “Salary,” and “Bonus,” columns in the Summary Compensation Table set forth on page 26 of this Proxy Statement.
Equity-Based Compensation
Equity-Based Compensation 2015 Stock Incentive Plan We believe that equity-based compensation is the most effective means of creating a long-term link between the compensation provided to executive officers and other key management personnel and the returns realized by the stockholders. In 2024, the Company maintained the 2015 Stock Incentive Plan to incentivize executive officers and other key employees. The 2015 Stock Incentive Plan is designed to give the Board of Directors discretion and flexibility in designing incentive compensation packages to align the goals of management with those of our stockholders and to motivate executive officers and key employees to improve the operations of the Company, thereby maximizing stockholder value. Pursuant to the 2015 Stock Incentive Plan, the Board of Directors may issue to employees, officers, directors, consultants, independent contractors and advisors of the Company and its subsidiaries incentive stock options, nonqualified stock options, and restricted stock awards. Awards under the 2015 Stock Incentive Plan help relate a significant portion of an employee’s long-term remuneration directly to stock price appreciation realized by all our stockholders and align an employee’s interests with that of our stockholders. The Compensation Committee believes equity-based incentive compensation aligns executive and stockholder interests because (i) the use of a multi-year lock-up or vesting schedule or milestone based vesting schedule for equity awards encourages executive retention and emphasizes long-term growth, and (ii) paying a significant portion of management’s compensation in our equity provides management with a powerful incentive to increase stockholder value over the long-term. The specific types and size of awards to be granted (other than options granted to non-employee directors) and the terms and conditions of such awards are determined by the Compensation Committee subject to the provisions of the 2015 Stock Incentive Plan. On January 3, 2022, the Company issued and granted to Mr. Yates options to purchase 30,000 shares of the Company’s common stock pursuant to the Company’s 2015 Stock Incentive Plan, having an exercise price per share of $27.65, which vested in three equal consecutive annual tranches on each of December 31, 2022, December 31, 2023, and December 31, 2024, respectively. On March 4, 2022, the Company issued and granted to Mr. Kanders restricted stock awards comprised of 500,000 restricted shares of the Company’s common stock, pursuant to the 2015 Stock Incentive Plan, all of which will vest if, on or before March 4, 2032, the closing share price of the Company’s common stock shall have equaled or exceeded $50.00 per share for twenty consecutive trading days. In determining to grant the restricted stock awards to Mr. Kanders, the Compensation Committee and the Board of Directors took into account, among other things, Mr. Kanders’ contributions to the Company’s performance and achievement of certain milestones during the year ended December 31, 2021, including, but not limited to: (i) revenues achieved by the Company in 2021 as compared to 2020, (ii) helping the Company to successfully navigate through challenges of the COVID-19 pandemic, including corresponding supply chain and logistic challenges, (iii) the increased total shareholder return as of December 31, 2021 compared to as of December 31, 2020, (iv) acquiring and integrating Rhino-Rack and MAXTRAX in 2021, and (v) completing a secondary public offering in the amount of $85 million. Pursuant to the terms of the Kanders Employment Agreement, a restricted stock award consisting of 500,000 restricted shares of common stock was granted to Mr. Kanders on March 14, 2023 under the Company’s 2015 Stock Incentive Plan of which (i) 250,000 shares shall vest if on or before March 14, 2033, the Fair Market Value (as defined in the 2015 Stock Incentive Plan) of the common stock shall have equaled or exceeded $15.00 per share for twenty consecutive trading days; and (ii) 250,000 shares shall vest if on or before March 14, 2033, the Fair Market Value (as defined in the 2015 Stock Incentive Plan) of the common stock shall have equaled or exceeded $18.00 per share for twenty consecutive trading days. On March 11, 2024, the Company issued and granted to Mr. Kanders options to purchase 500,000 shares of the Company’s common stock pursuant to the Company’s 2015 Stock Incentive Plan, having an exercise price per share of $6.75, of which, (i) 250,000 shares of common stock vested and became exercisable on March 11, 2025, and (ii) 250,000 shares of common stock will vest and become exercisable on March 11, 2026. In determining to grant the options to Mr. Kanders, the Compensation Committee and the Board of Directors took into account, among other things, the substantial additional responsibilities of Mr. Kanders in connection with reinvigorating the Company following the expected divesture of the Company’s Precision Sport segment. On March 11, 2024 the Company issued and granted to Mr. Yates (i) options to purchase 118,000 shares of the Company’s common stock pursuant to the Company’s 2015 Stock Incentive Plan, having an exercise price per share of $6.75, of which, (A) 59,000 shares of common stock vested and became exercisable on March 11, 2025, and (B) 59,000 shares of common stock will vest and become exercisable on March 11, 2026, and (ii) restricted stock awards comprised of 50,000 restricted shares of the Company’s Stock, pursuant to the 2015 Stock Incentive Plan, of which, (A) 25,000 shares of common stock vested and became non-forfeitable on March 11, 2025, and (B) 25,000 shares of common stock will vest and become non-forfeitable on March 11, 2026. In determining to grant the options and restricted stock awards to Mr. Yates, the Compensation Committee and the Board of Directors took into account, among other things, the substantial additional responsibilities of Mr. Yates in connection with reinvigorating the Company following the expected divesture of the Company’s Precision Sport segment. Equity based compensation earned in 2024, 2023 and 2022 by the Named Executive Officers are reflected in the “Stock Awards,” and “Option Awards,” columns in the Summary Compensation Table set forth on page 26 of this Proxy Statement.
Timing of Equity Awards
Timing of Equity Awards The timing of our equity award grants is not intended to be influenced by the release of material nonpublic information. Equity awards, including stock options and other stock-based compensation, are generally granted at previously scheduled meetings of the Board of Directors and the Compensation Committee. In accordance with the Company’s 2015 Stock Incentive Plan, all stock options and stock awards are granted with an exercise price and value equal to the fair market value of the Company’s common stock, determined as the closing price on the date of grant. The Compensation Committee may also approve equity-based grants in connection with the hiring or promotion of executive officers. To ensure compliance with best governance practices and mitigate the risk of improper grant timing, the Company generally seeks to avoid granting equity awards within the period beginning four business days before the filing of a periodic report on Form 10-Q or Form 10-K, or the filing or furnishing of a current report on Form 8-K that discloses material nonpublic information (including earnings results), and ending at least one business day after such disclosure. This is intended to prevent the appearance of opportunistic grant practices and align with regulatory expectations. The Compensation Committee periodically reviews its equity grant policies, including timing considerations, to ensure ongoing compliance with applicable laws, regulations, and best corporate governance practices.
Post-Employment and Other Events
Post-Employment and Other Events Termination, death, disability and change-in-control events may trigger the payment of certain compensation to the Named Executive Officers that is not available to all salaried employees. Such compensation payable to our current Named Executive Officers is discussed under the headings “Employment Agreements” and “Potential Payments Upon Termination or Change in Control.”
Summary Compensation Table
Summary Compensation Table The following summary compensation table sets forth information concerning the annual and long-term compensation earned for the periods presented below by our Named Executive Officers.
Summary Compensation Table
| | | | | | | Non-Equity | Non-qualified | | | | | | | | Stock | Option | Deferred | Deferred | All Other | | | Name and Principal | | Salary | Bonus | Awards | Awards | Compensation | Compensation | Compensation | Total | | Position | Year | ($) | ($) | ($)(1) | ($)(2) | Earnings | Earnings | ($) | ($) | | Warren B. Kanders | 2024 | 604,616 | 830,000 | — | 1,532,250 | — | — | 75,796(3) | 3,042,662 | | Executive Chairman | 2023 | 601,923 | — | 4,045,819 | — | — | — | 76,368 | 4,724,110 | | | 2022 | 550,000 | — | 7,686,720 | — | — | — | 77,288 | 8,314,008 | | Michael J. Yates(4) | 2024 | 430,240 | 178,000 | 337,500 | 361,611 | — | — | 34,738(5) | 1,342,089 | | Chief Financial Officer, Secretary and Treasurer | 2023 | 400,000 | 300,000 | — | — | — | — | 41,040 | 741,040 | | | 2022 | 400,000 | — | — | 312,255 | — | — | 27,267 | 739,522 |
Summary Compensation Table
| (1) Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for awards made during the applicable year. For discussions on the relevant assumptions, see the footnote titled “Stock-Based Compensation Plan” in the financial statements contained in the Annual Reports on Form 10-K for the years ended December 31, 2024, December 31, 2023, and December 31, 2022. |
Summary Compensation Table
| (2) Represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for awards made during the applicable year. For discussions on the relevant assumptions, see the footnote titled “Stock-Based Compensation Plan” in the financial statements contained in the Annual Reports on Form 10-K for the years ended December 31, 2024, December 31, 2023, and December 31, 2022. |
Summary Compensation Table
| (3) “All Other Compensation” amount for Mr. Kanders in 2024 consists of the following items: health, short-term and long-term disability, and AD&D, $68,799; and life insurance, $6,997. |
Summary Compensation Table
| (4) Mr. Michael J. Yates was appointed to serve as the Company’s Chief Financial Officer effective as of January 3, 2022, and has also served as our Secretary and Treasurer since August 31, 2023. |
Summary Compensation Table
| (5) “All Other Compensation” amount for Mr. Yates in 2024 consists of the following items: 401(k) matching contributions, $11,247; health, short-term and long-term disability, $21,325; and life insurance and AD&D, $2,166. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth information concerning grants of plan-based awards in fiscal year 2024 to our Named Executive Officers.
Grants of Plan-Based Awards
| | | | | | | | | | All Other | | | | | | | | | | | | All Other | Option | | Grant | | | | | | | | | | Stock Awards: | Awards: | Exercise | Date Fair | | | | Estimated Future Payouts | | | Estimated Future Payouts | | | Number of | Number of | or Base | Value of | | | | Under Non-Equity Incentive | | | Under Equity Incentive | | | Shares | Securities | Price of | Stock and | | | | Plan Awards | | | Plan Awards | | | of Stock | Underlying | Option | Option | | | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Options | Awards | Awards | | Name | Date | ($) | ($) | ($) | ($) | ($) | ($) | (#) | (#) | ($) | ($) | | Warren B. Kanders | 3/11/2024 | — | — | — | — | — | — | 500,000(1) | — | — | $1,532,250 | | Michael J. Yates | 3/11/2024 | — | — | — | — | — | — | 118,000(2) | — | — | $361,611 | | Michael J. Yates | 3/11/2024 | — | — | — | — | — | — | — | 50,000(3) | — | $337,500 |
Grants of Plan-Based Awards
| (1) Stock option award granted pursuant to the Company’s 2015 Stock Incentive Plan. |
Grants of Plan-Based Awards
| (2) Stock option award granted pursuant to the Company’s 2015 Stock Incentive Plan. |
Grants of Plan-Based Awards
| (3) Restricted stock award granted pursuant to the Company’s 2015 Stock Incentive Plan. |
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table sets forth information concerning stock options and stock awards held by the Named Executive Officers at December 31, 2024:
Outstanding Equity Awards at Fiscal Year End
| | Option Awards | | | | | Stock Awards | | | | | | | | | | | | | | Equity | | | | | | | | | | Equity | Incentive | | | | | | | | | | Incentive | Plan Awards: | | | | | | | | | | Plan Awards: | Market or | | | | | Equity Incentive | | | | Market | Number of | Payout Value | | | | | Plan Awards: | | | | Value of | Unearned | of Unearned | | | Number of | Number of | Number of | | | Number of | Shares or | Shares, | Shares, | | | Securities | Securities | Securities | | | Shares or | Units of | Units or | Units or | | | Underlying | Underlying | Underlying | | | Units of | Stock That | Other Rights | Other Rights | | | Unexercised | Unexercised | Unexercised | Option | Option | Stock That | Have Not | That Have | That Have | | | Options (#) | Options (#) | Unearned | Exercise | Expiration | Have Not | Vested | Not Vested | Not Vested | | Name | Exercisable | Unexercisable | Options (#) | Price ($) | Date | Vested (#) | ($) | (#) | ($) | | Warren B. Kanders | 500,000(1) | — | — | 6.80 | 3/9/28 | — | — | — | — | | | 150,000(2) | — | — | 13.21 | 6/5/29 | — | — | — | — | | | 255,997(3) | — | — | 14.39 | 12/2/30 | — | — | — | — | | | — | — | — | — | — | 500,000(4) | 2,255,000 | — | — | | | — | — | — | — | — | 500,000(5) | 2,255,000 | — | — | | | — | 500,000(6) | — | 6.75 | 3/11/34 | — | — | — | — | | Michael J. Yates | 30,000(7) | — | — | 27.65 | 1/3/32 | — | — | — | — | | | — | 118,000(8) | — | 6.75 | 3/11/34 | — | — | — | — | | | — | — | — | — | — | 50,000(9) | 225,500 | — | — |
Outstanding Equity Awards at Fiscal Year End
| (1) Stock option award granted pursuant to the Company’s 2015 Stock Incentive Plan on March 9, 2018. Options to purchase 100,000 shares of common stock vested and became exercisable on each of December 31, 2018, December 31, 2019, December 31, 2020, December 31, 2021, and December 31, 2022, respectively. |
Outstanding Equity Awards at Fiscal Year End
| (2) Stock option award granted pursuant to the Company’s 2015 Stock Incentive Plan on June 5, 2019. Options to purchase 50,000 shares of common vested and became exercisable on each of June 5, 2020, June 5, 2021 and June 5, 2022, respectively. |
Outstanding Equity Awards at Fiscal Year End
| (3) Stock option award granted pursuant to the Company’s 2015 Stock Incentive Plan on December 2, 2020. Options to purchase (i) 85,331 shares of common stock vested and became exercisable on December 2, 2021; and (ii) 85,333 shares of common stock vested and became exercisable on each of December 2, 2022 and December 2, 2023, respectively. |
Outstanding Equity Awards at Fiscal Year End
| (4) Restricted stock award granted pursuant to the Company’s 2015 Stock Incentive Plan on March 4, 2022, of which 500,000 shares of common stock will vest if on or before March 4, 2032, the Fair Market Value (as defined in the 2015 Stock Incentive Plan) of the common stock shall have equaled or exceeded $50.00 per share for twenty consecutive trading days. |
Outstanding Equity Awards at Fiscal Year End
| (5) Restricted stock award granted pursuant to the Company’s 2015 Stock Incentive Plan on March 14, 2023 of which (i) 250,000 shares of common stock shall vest if on or before March 14, 2033, the Fair Market Value (as defined in the 2015 Stock Incentive Plan) of the common stock shall have equaled or exceeded $15.00 per share for twenty consecutive trading days; and (ii) 250,000 shares of common stock shall vest if on or before March 14, 2033, the Fair Market Value (as defined in the 2015 Stock Incentive Plan) of the common stock shall have equaled or exceeded $18.00 per share for twenty consecutive trading days. |
Outstanding Equity Awards at Fiscal Year End
| (6) Stock option award granted pursuant to the Company’s 2015 Stock Incentive Plan on March 11, 2024. Options to purchase (i) 250,000 shares of common stock vested and became exercisable on March 11, 2025, and (ii) 250,000 shares of common stock shall vest and become exercisable on March 11, 2026. |
Outstanding Equity Awards at Fiscal Year End
| (7) Stock option award granted pursuant to the Company’s 2015 Stock Incentive Plan on January 3, 2022. Options to purchase 10,000 shares of common stock vested and became exercisable on each of December 31, 2022, December 31, 2023 and December 31, 2024, respectively. |
Outstanding Equity Awards at Fiscal Year End
| (8) Stock option award granted pursuant to the Company’s 2015 Stock Incentive Plan on March 11, 2024. Options to purchase (i) 59,000 shares of common stock vested and became exercisable on March 11, 2025, and (ii) 59,000 shares of common stock shall vest and become exercisable on March 11, 2026. |
Outstanding Equity Awards at Fiscal Year End
| (9) Restricted stock award granted pursuant to the Company’s 2015 Stock Incentive Plan on March 11, 2024, of which (i) 25,000 shares of common stock vested and became exercisable on March 11, 2025, and (ii) 25,000 shares of common stock shall vest on March 11, 2026. |
Option Exercises and Stock Vested During Fiscal 2024
Option Exercises and Stock Vested During Fiscal 2024 The following table sets forth information concerning the exercise of stock option awards and vesting of stock awards in fiscal year 2024 to our Named Executive Officers.
Option Exercises and Stock Vested During Fiscal 2024
| | Option Awards | | Stock Awards | | | | Number of | | Number of | | | | Shares | | Shares | | | | Acquired on | Value Realized | Acquired on | Value Realized | | Name | Exercise (#) | on Exercise ($) | Vesting (#) | on Vesting ($) | | Warren B. Kanders | — | $— | 116,666(1) | $722,163 |
Option Exercises and Stock Vested During Fiscal 2024
| (1) Restricted stock award granted pursuant to the Company’s 2015 Stock Incentive Plan on January 7, 2019, of which 116,666 shares of common stock vested on January 28, 2024. The restricted stock award vested upon the Fair Market Value (as defined in the 2015 Stock Incentive Plan) of the common stock equaling or exceeding $15.00 per share for twenty consecutive trading days, which condition was satisfied on January 28, 2021. The closing price of the common stock on the vesting date was $6.19. |
Pension Benefits — Fiscal 2024
Pension Benefits — Fiscal 2024 There were no pension benefits earned by our Named Executive Officers during the fiscal year ended December 31, 2024.
Non-qualified Defined Contribution and Other Non-qualified Deferred Compensation Plans
Non-qualified Defined Contribution and Other Non-qualified Deferred Compensation Plans The Company does not have any non-qualified defined contribution or other non-qualified deferred compensation plans covering its Named Executive Officers.
Potential Payments Upon Termination or Change-in-Control
Potential Payments Upon Termination or Change-in-Control The tables below reflect the amount of compensation payable to each of the current Named Executive Officers of the Company in the event of termination of such executive officer’s employment. The amount of compensation payable to each current Named Executive Officer upon voluntary termination; retirement; involuntary not-for-cause termination; involuntary for cause termination; termination following a change-in- control; retention following a change-in-control; and in the event of disability or death of the executive is shown below. The amounts shown assume that such termination was effective as of December 31, 2024. The amounts shown thus include amounts earned through such times and are estimates of the amounts which would be paid out to the executives upon their termination. The actual amounts to be paid out can only be determined at the time of such executive officer’s separation from the Company. Payments Made Upon Termination Regardless of the manner in which a Named Executive Officer’s employment terminates, he may be entitled to receive amounts earned during his term of employment. In the event that Mr. Kanders’ employment is terminated by the Company without “cause”, by Mr. Kanders for “Good Reason” (as such terms are defined in the “Kanders Employment Agreement” described below under the heading “Employment Agreements), which includes the Company’s uncured breach of any material provision of the Kanders Employment Agreement, any material diminution in the authority or responsibilities delegated to Mr. Kanders, or any reduction in Mr. Kanders’ annual base salary), or if the Company, or its applicable successors and assigns, does not offer to renew the Employment Agreement upon expiration of the term on substantially similar terms, Mr. Kanders will be entitled to receive, among other things, in one lump sum within thirty days of such termination: (A) five times the sum of (i) his highest annual base salary, plus (ii) the annual bonus for such year, in each case since January 1, 2020; plus (B) the amount of any accrued annual bonus; however, if Mr. Kanders is terminated without cause or Mr. Kanders terminates the Kanders Employment Agreement for Good Reason, any accrued annual bonus shall be payable only to the extent that the applicable performance targets for the year of termination are actually achieved; plus (C), except in the case of Mr. Kanders’ death or disability, five times the greatest annual amount of the full cost of maintaining his principal office. In addition, all grants of stock options and common stock granted under the Kanders Employment Agreement or otherwise shall vest and become immediately exercisable and saleable and any lock-up provisions applicable thereto, or to any options granted to Mr. Kanders, shall terminate. Also, in the event of any termination of Mr. Kanders’ employment as described above, the following shall occur, and be provided or made available to Mr. Kanders at the times specified: (i) (A) all of Mr. Kanders’ benefits accrued under any employee pension, retirement, savings and deferred compensation plans of the Company shall become vested in full upon the date of such a termination; (B) any and all unvested stock options, restricted stock and other equity or equity-based awards (including, but not limited to, the shares of restricted stock granted to Mr. Kanders pursuant to the Kanders Employment Agreement) shall immediately vest as of the date of such termination; and (C) amounts which are vested or which Mr. Kanders is otherwise entitled to receive under the terms of or in accordance with any plan, policy, practice or program of, or any contract or agreement with, the Company or any of its subsidiaries, on or after his termination without regard to the performance by Mr. Kanders of further services or the resolution of a contingency shall be payable in accordance with the terms of the plan, policy, practice, program, contract or agreement under which such benefits have been awarded or accrued; (ii) Mr. Kanders (and any of his dependents) will be entitled to continue participation in all of the Company’s health benefit plans, for the period for which Mr. Kanders could elect COBRA continuation coverage under the Company’s health benefit plans as a result of his termination; and (iii) Mr. Kanders will have the right to have the Company’s (or applicable subsidiary’s) office lease that is used by Mr. Kanders assigned to him, and the Company will pay the lease payments for a period of five years from the date of such termination, and Mr. Kanders shall have the right to purchase any fixed assets in connection therewith (including but not limited to automobiles) that he enjoyed the use of during the term at such assets’ then-depreciated book value. The foregoing payments and benefits described in this paragraph with respect to Mr. Kanders are referred to herein as the “Additional Kanders Termination Benefits”. Payments Made Upon Retirement In the event of the retirement of a Named Executive Officer, no additional benefits are paid. Payments Made Upon Permanent Disability or Death In the event of Mr. Kanders’ death, his designees would be entitled to $134,000 from a Company group term life policy that is maintained for the benefit of all of the Company’s employees. The Company also maintains term life insurance on Mr. Kanders in the amount of $2,000,000 for the benefit of his designees. Additionally, in the event of his termination due to permanent disability or death, the Kanders Employment Agreement provides that Mr. Kanders will be entitled to receive, among other things, in one lump sum within thirty days of such termination: (A) five times the sum of (i) his highest annual base salary, plus (ii) the annual bonus for such year, in each case since January 1, 2020; plus (B) the amount of any accrued annual bonus. In addition, all grants of stock options and common stock granted under the Kanders Employment Agreement or otherwise shall vest and become immediately exercisable and saleable and any lock-up provisions applicable thereto, or to any options granted to Mr. Kanders, shall terminate. Mr. Kanders will also be entitled to receive the Additional Kanders Termination Benefits. In the event of Mr. Yate’s death, his beneficiary would be entitled to receive $300,000 from a Company group term life policy that is maintained for the benefit of all of the Company’s employees. Payments Made Upon a Change-in-Control
Potential Payments Upon Termination or Change-in-Control
Pursuant to the terms of the Kanders Employment Agreement, in the event that Mr. Kanders’ employment is terminated by Mr. Kanders or the Company or its successor or assigns within two years following the occurrence of a “change in control” of the Company (other than a termination by the Company for cause during such period), Mr. Kanders will be entitled to receive, among other things, in one lump sum within thirty days of such termination: (A) five times the sum of (i) his highest annual base salary, plus (ii) the annual bonus for such year, in each case since January 1, 2020; plus (B) the amount of any accrued annual bonus; plus (C), five times the greatest annual amount of the full cost of maintaining his principal office provided, however, that in the event of a change in control, if the Company or the acquiror requests Mr. Kanders to provide consulting services described in the Kanders Employment Agreement, then the lump sum payment described above shall be payable upon the expiration of such consulting period, and during such consulting period, Mr. Kanders will be entitled to a consulting fee equal to what he would have otherwise been entitled to be paid under the Employment Agreement during such period. In addition, all grants of stock options and common stock granted under the Kanders Employment Agreement or otherwise shall vest and become immediately exercisable and saleable and any lock-up provisions applicable thereto, or to any options granted to Mr. Kanders, shall terminate. Mr. Kanders will also be entitled to receive the Additional Kanders Termination Benefits. Pursuant to the terms of the Kanders Employment Agreement, a change-in-control is deemed to occur in the event that:
Potential Payments Upon Termination or Change-in-Control
| ● | the members of the Board of Directors as of March 14, 2023, cease to constitute a majority of the Board of Directors provided, however, that any individual becoming a director subsequent to such date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Board of Directors shall be considered as though such individual was a member of the Board of Directors as of such date; |
Potential Payments Upon Termination or Change-in-Control
| ● | the Company shall have been sold by either (A) a sale of all or substantially all its assets, or (B) a merger or consolidation, other than any merger or consolidation pursuant to which the Company acquires another entity, or (C) a tender offer, whether solicited or unsolicited; or |
Potential Payments Upon Termination or Change-in-Control
| ● | any party, other than the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of voting securities of the Company representing 50% or more of the total voting power of all the then-outstanding voting securities of the Company. |
Pay Ratio Disclosure
Pay Ratio Disclosure The 2024 annual total compensation of the median compensated of all our employees who were employed as of December 31, 2024, other than our Executive Chairman, was $67,021. The 2024 annual total compensation of Mr. Kanders, our Executive Chairman, was $3,042,662, and the ratio of these amounts was 45 to 1. The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below. For these purposes, we identified the median compensated employee using total taxable wages paid to our employees in fiscal 2024, annualizing the salaries paid to new employees that did not work the full fiscal year. After identifying such median compensated employee, we calculated annual total compensation for such employee using the same methodology we used for our Executive Chairman and other Named Executive Officers. Using this methodology, the annual total compensation in 2024 for our median employee was $67,021. We determined our total workforce, excluding our Executive Chairman, to consist of 492 employees.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required and set forth by Section 953(a) of the Dodd-Frank Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation paid to our named executive officers and the financial performance of the Company.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| | | | | | Value of Initial | | | | | | | | Average | | Fixed $100 | | | | | | | | Summary | Average | Investment | | | | | | Summary | | Compensation | Compensation | Based on: | | | | | | Compensation | Compensation | Table Total for | Actually Paid | Total | Peer Group | | | | | Table Total for | Actually Paid | Non-PEO | to Non-PEO | Shareholder | Shareholder | Net | Adjusted | | | PEO | to PEO | NEOs | NEOs | Return | Return | Income | EBITDA | | Year | ($) | ($)(1) | ($) | ($)(1) | ($)(2) | ($)(3) | ($)(4) | ($)(5) | | 2024 | 3,042,662 | 245,518 | 1,342,089 | 1,023,408 | 35.28 | 178.14 | (88,437) | 6,875 | | 2023 | 4,724,110 | 2,973,299 | 443,435 | 208,285 | 52.81 | 146.81 | (15,788) | 1,214 | | 2022 | 8,314,008 | (17,349,302) | 1,662,173 | (3,273,967) | 59.15 | 112.11 | (69,780) | 62,959 | | 2021 | 7,721,987 | 16,860,440 | 2,016,345 | 9,081,793 | 206.49 | 155.34 | 26,093 | 61,503 | | 2020 | 5,167,252 | 6,158,606 | 1,755,471 | 2,503,523 | 114.31 | 130.70 | 5,545 | 22,389 |
Pay Versus Performance Table
| (1) Amounts represent compensation actually paid to our PEO and the average compensation actually paid to our remaining NEOs for the relevant fiscal year, as computed in accordance with Item 402(v) of Regulation S-K, which includes the individuals indicated in the table below for each respective fiscal year. Amounts do not reflect the actual amount of compensation earned by or paid to the PEO or other NEOs during the applicable year. Each of Mr. Walbrecht’s and Mr. Kuehne’s employment with the Company were terminated on March 31, 2023 and August 31, 2023, respectively. |
Pay Versus Performance Table
| Year | PEO | Non-PEO NEOs | | 2024 | Warren B. Kanders | Michael J. Yates | | 2023 | Warren B. Kanders | John C. Walbrecht, Aaron J. Kuehne, and Michael J. Yates | | 2022 | Warren B. Kanders | John C. Walbrecht, Aaron J. Kuehne, and Michael J. Yates | | 2021 | Warren B. Kanders | John C. Walbrecht and Aaron J. Kuehne | | 2020 | Warren B. Kanders | John C. Walbrecht and Aaron J. Kuehne |
Pay Versus Performance Table
Compensation actually paid to our NEOs represents the “Total” compensation reported in the Summary Compensation Table for the applicable fiscal year, as adjusted as follows:
Pay Versus Performance Table
| | | Starting | | | | | Adjusted | | | | Amount: | Deducted: | Added: | Added: | Added | Amount: | | | | | | | | The change | | | | | | | | The change | (positive or | | | | | | | | (positive or | negative) as of | | | | | | | | negative) as of | the vesting date | | | | | | | | the end of the | (from the end | | | | | | | The fair value | covered fiscal | of the prior | | | | | | | as of the end of | year (from the | fiscal year) in | | | | | | | the covered | end of the prior | fair value of | | | | | | | fiscal year of all | fiscal year) in | any stock | | | | | | | stock awards | fair value of any | awards granted | | | | | | The grant date | granted during | stock awards | in any prior | | | | | | fair value of all | the covered | granted in any | fiscal year for | | | | | | stock awards | fiscal year | prior fiscal | which all vesting | | | | | | granted in the | that were | year that are | conditions were | | | | | | applicable year, | outstanding and | outstanding and | satisfied at the | | | | | | as reported in | unvested as of | unvested as of | end of or | | | | Named | Summary | the Summary | the end of the | the end of the | during the | Compensation | | | Executive | Compensation | Compensation | covered | covered | covered | Actually | | Year | Officers | Table Total | Table | fiscal year | fiscal year | fiscal year | Paid | | 2024 | PEO | 3,042,662 | 1,532,250 | 737,900 | (1,919,962) | (82,832) | 245,518 | | | Non-PEO NEOs | 1,342,089 | 699,111 | 385,550 | — | (5,120) | 1,023,408 | | 2023 | PEO | 4,724,110 | 4,045,819 | 2,509,095 | (379,217) | 165,131 | 2,973,299 | | | Non-PEO NEOs | 443,435 | — | — | (290,994) | 55,845 | 208,285 | | 2022 | PEO | 8,314,008 | 7,686,720 | 1,532,741 | (15,549,564) | (3,959,767) | (17,349,302) | | | Non-PEO NEOs | 1,662,173 | 1,128,981 | 210,784 | (2,634,635) | (1,383,308) | (3,273,967) | | 2021 | PEO | 7,721,987 | 7,230,085 | 9,656,730 | 4,306,153 | 2,405,655 | 16,860,440 | | | Non-PEO NEOs | 2,016,345 | 1,176,020 | 3,040,100 | 3,438,208 | 1,763,161 | 9,081,793 | | 2020 | PEO | 5,167,252 | 4,750,626 | 1,608,634 | 830,665 | 3,302,681 | 6,158,606 | | | Non-PEO NEOs | 1,755,471 | 1,144,187 | 1,565,179 | 213,150 | 113,910 | 2,503,523 |
Pay Versus Performance Table
| (2) Cumulative Total Shareholder Return is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
Pay Versus Performance Table
| (3) Represents the peer group Total Shareholder Return of the companies included in the NASDAQ Global Select Market Composite and the Russell 2000 Index. |
Pay Versus Performance Table
| (4) Represents the amount of net income reflected in the Company’s audited financial statements for the applicable year. On February 29, 2024, the Company completed the sale of the Company’s Precision Sport segment. The activities of the Precision Sport segment have been segregated and reported as discontinued operations for the years ended December 31, 2023 and December 31, 2024, and as a result are excluded from net income for the 2023 and 2024 fiscal years, respectively. |
Pay Versus Performance Table
| (5) Adjusted EBITDA is a non-GAAP measure. We define “EBITDA” as earnings before interest, taxes, other income or expense, depreciation and amortization. We define “Adjusted EBITDA” as EBITDA further adjusted for the impact of certain noncash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, transaction costs, contingent consideration, inventory fair value of purchase accounting, impairment of goodwill and indefinite-lived intangible assets, stock-based compensation, and other one-time items. For a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, see our press release announcing the Company’s results for the fourth quarter and year ended December 31, 2024, attached as Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on March 6, 2025. We selected Adjusted EBITDA as the Company-selected measure due to it being an important financial performance measure that helps link compensation actually paid to the Company’s NEOs to the Company’s performance for the most recently |
Pay Versus Performance Table
| completed fiscal year. In particular, Adjusted EBITDA is utilized by the Compensation Committee and the Board of Directors as part of their evaluation and consideration to award annual performance-based compensation to our NEOs. On February 29, 2024, the Company completed the sale of the Company’s Precision Sport segment. The activities of the Precision Sport segment have been segregated and reported as discontinued operations for the years ended December 31, 2023, and December 31, 2024, and as a result are excluded from Adjusted EBITDA for the 2023 and 2024 fiscal years, respectively. |
Relationship between Performance Measures and Compensation Actually Paid
Relationship between Performance Measures and Compensation Actually Paid The following graphs represent the relationship between “compensation actually paid,” as reflected in the Pay Versus Performance Table, to the Company’s PEO and other Named Executive Officers (expressed as an average) and the performance measures included in the Pay Versus Performance Table (Total Shareholder Return, Peer Group Total Shareholder Return, Net Income and Adjusted EBITDA).