DEF 14A of Virco MFG Corporation
Filed May 7, 2024 · FY20240001628280-24-020770
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The Certificate of Incorporation of the Company provides for the division of the Board of Directors into three classes as nearly equal in number as possible, with the term of one class expiring each year. The Company currently has seven members on its Board of Directors, with two members in Class I, three members in Class II, and two members in Class III. At the Annual Meeting, the stockholders will be asked to elect three Class II directors, with terms expiring at the 2027 Annual Meeting of Stockholders. It is intended that the proxies solicited by this Proxy Statement will be voted in favor of the election of all nominees to the Board of Directors, unless authority to do so is withheld. Should any of such nominees be unable to serve as a director or should any additional vacancy occur before the election (which events are not anticipated), proxies may be voted for a substitute nominee selected by the Board of Directors. The following table sets forth certain information with respect to each of the three nominees and our continuing directors. The Board of Directors recommends that you vote “FOR” the election of each of the nominees.
ELECTION OF DIRECTORS
| Name | Age | Biographical Information, Skills and Qualifications | Director Since | Class of Director (term expires) | | Nominees for Class II Directors Whose New Terms Will Expire in 2027: | | | | | | Robert A. Virtue | 91 | Mr. Virtue has served as Chairman of the Board and Chief Executive Officer of the Company since 1990, and President of the Company from August 1982 to November 2014. Mr. Virtue brings to the Board over 60 years of experience and knowledge of the Company’s business, operations, and culture. Mr. Virtue is the father of Douglas A. Virtue and Kathy Virtue Young. | 1956 | II (2024) | | Kathy Virtue Young | 60 | Ms. Virtue Young has been employed by the Company in various sales positions since 1986, most recently as a Vice President of Sales. She brings to the Board over 30 years of experience and knowledge of the Company’s business, operations, and culture. Ms. Virtue Young is the daughter of Robert A. Virtue and sister of Douglas Virtue. | 2018 | II (2024) | | Agnieszka Winkler | 78 | Ms. Winkler is the founder and former Chairperson of The Winkler Group, a San Francisco based management consultancy specializing in branding and marketing efficiency and effectiveness. She is also the founder and former Chairperson and Chief Executive Officer of Winkler Advertising, founded in 1984, and Team Toolz Inc., founded in 1999, both of which were acquired. Ms. Winkler has also served on the Boards of Directors of the following public and private companies: The Cheesecake Factory Inc., Inter-Tel Inc., Reno Air, Inc., SuperCuts, Inc., Ascension Health Care Network and Iplocks. Ms. Winkler currently serves on the Board of Trustees of Santa Clara University, as Chair of the Board of Directors of the Jesuit School of Theology, on the Board of Directors of African Diaspora Network. and on the Executive Committee of the Advisory Board for the Miller Center for Social Entrepreneurship. Ms. Winkler is the author of the book, “Warp Speed Branding” published by Wiley in the United States, China, and Turkey and editor of “Emigrant: Fight For Freedom 1939 to 2000.” Ms. Winkler brings to the Board extensive experience in leadership, management and marketing. | 2018 | II (2024) |
ELECTION OF DIRECTORS
| Name | Age | Biographical Information, Skills and Qualifications | Director Since | Class of Director (term expires) | | Continuing Class I Directors Whose Terms Expire in 2026: | | | | | | Robert R. Lind | 75 | Mr. Lind has been Managing Partner of Berkshire Bridge Capital, LLC, a consulting firm and formerly an investment banking firm, since October 2005. Mr. Lind also served as Managing Partner of Berkshire Bridge Partners, LLC, a licensed investment advisor, and Nevada Growth Capital Fund from October 2012 to March 2014, and as a Director of Nevada Capital Investment Corporation, a statutory public benefit corporation formed by the State of Nevada to provide venture funding for Nevada businesses, from July 2011 to April 2012. From 2016- 2023 Mr. Lind served as a member of the Advisory Board of Longenecker & Associates which provides highly specialized, fast-response technical and management support to the nuclear and environmental industries. Mr. Lind previously was a Managing Director and a board member of SAIC’s Venture Capital Corporation, served as Head of Corporate Development at Rockwell International, was a Managing Director at Lehman Brothers Holdings, Inc. and served as a board member on the Yosemite Conservancy Board of Trustees until December 31, 2014; Currently he is a Council Member for the Yosemite Conservancy. Mr. Lind brings many years of investment banking, venture capital investing, corporate management and commercial banking experience and qualifies as an “audit committee financial expert.” | 2014 | I (2026) | | Craig L. Levra | 65 | Mr. Levra is a seasoned executive with deep expertise in operations, technology and ecommerce. He is a Founding Member of GoodwillFinds.com, a recently launched social enterprise comprising a re-commerce technology platform and second-hand marketplace. He also serves as Executive Vice President - Chief Operating Officer for Goodwill Southern California, the nation’s largest Goodwill entity operating 120 stores and donation centers, five distribution centers and multiple ecommerce sites generating significant operating earnings to support Goodwill’s mission of transforming lives through the power of work. In 2018, Mr. Levra served as President of Gear Coop, Inc, an outdoor specialty online retailer and a leading supplier of over one hundred fifty technical brands providing comprehensive brand management on Amazon.com. Mr. Levra led Sport Chalet, Inc., formerly a publicly traded specialty sports retailer, from 1997 until May 2015, and served as Chairman and CEO from 2001 until the sale to a private equity firm in 2014. He serves on the Board and as a strategic advisor of several privately held retail and sports companies, including Open 4 Sale Technologies and Gameday in the USA. Mr. Levra also serves on the Board of Directors – Executive Committee of the Los Angeles Sports and Entertainment Commission. Early in his career, he was a client of the Company when he headed furniture merchandising for office specialty retailer HQ Office Supplies Warehouse. Mr. Levra received a bachelor’s and MBA degree from the University of Kansas, and a Certificate in Public Company Governance from the University of California, Irvine. Mr. Levra brings to the Board extensive experience in leadership, management, operations and marketing. | 2016 | I (2026) |
ELECTION OF DIRECTORS
| Name | Age | Biographical Information, Skills and Qualifications | Director Since | Class of Director (term expires) | | Continuing Class III Directors Whose Terms Expire in 2025: | | | | | | Bradley Richardson | 65 | Mr. Richardson has served as a director of Brady Corporation since 2007 and became Chairman of the Board in May 2021. He also serves as Chair of the Audit Committee of Brady Corporation and is a member of its Corporate Governance, Finance and Management Development Committees and Compensation Committee. Mr. Richardson served as EVP and CFO of Avient Corporation from 2013 to 2020. He previously served as EVP and CFO of Diebold, Inc. and EVP Corporate Strategy and CFO of Modine Manufacturing. Prior to Modine, he spent 21 years with BP Amoco, serving in various financial and operational roles. Mr. Richardson has served on the Boards of Modine Manufacturing and Tronox, Inc. Mr. Richardson received a bachelor’s degree in finance and economics from Miami University, and an MBA degree in accounting and finance from Indiana University. Mr. Richardson brings to the Company extensive knowledge and global experience in the areas of operations, strategy, accounting, tax accounting and finance, which are areas of critical importance and focus of the Company. | 2023 | III (2025) | | Douglas A. Virtue | 65 | Mr. Virtue has served as President of the Company since November 2014, and Executive Vice President of the Company from December 1997 to November 2014. Prior to that, he was General Manager of the Torrance Division of the Company. Mr. Virtue brings to the Board 30 years of experience and knowledge of the Company’s business, operations and culture. Mr. Virtue is Robert A. Virtue’s son and Kathy Virtue Young’s brother. | 1992 | III (2025) |
Summary Compensation Table
Summary Compensation Table The table below sets forth the compensation awarded to, earned by or paid to, each of the Named Executive Officers for the fiscal years ended January 31, 2024 and 2023. The Company has no written employment agreements with any of its executives. While employed, executives are entitled to base salary, participation in the executive compensation programs identified in the tables below and other benefits common to all employees. The amounts shown in the following table are based on the same assumptions used in the preparation of the Company’s 2024 financial statements, which are described in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2024 under the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and in Note 4 to the consolidated financial statements included therein. The Pension Plans that the Named Executive Officers participate in were frozen in 2003 and the Named Executive Officers did not accrue any additional benefits under the Pension Plans during 2024 or 2023.
Summary Compensation Table
| Name and | | Salary | Bonus | Stock Awards | Non-Equity Incentive Plan Compensation | Change in Pension | All Other Compensation | Total | | Position | Year | ($) | ($) | ($)(1) | ($) | ($)(2) | ($)(3) | ($) | | Robert A. Virtue | 2024 | 364,252 | — | — | 181,275 | — | 11,500 | 557,027 | | Chairman & CEO | 2023 | 352,148 | — | — | 155,302 | — | 15,000 | 522,450 | | Douglas A. Virtue | 2024 | 334,373 | — | — | 167,625 | — | 10,602 | 512,600 | | President | 2023 | 324,953 | — | — | 143,608 | — | 9,103 | 477,664 | | Robert E. Dose | 2024 | 332,352 | — | — | 165,325 | — | 17,500 | 515,177 | | Sr. Vice President | 2023 | 321,642 | — | — | 141,637 | — | 15,000 | 478,279 | | Finance | | | | | | | | | | (1) The amounts shown in this column are the aggregate grant date fair value of stock awards granted during the applicable fiscal year, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB 718”). The assumptions used to calculate these figures are described in Note 5 of the Company’s Form 10-K for the applicable fiscal year. | | | | | | | | | | (2) The aggregate change in the actuarial present value of the executive’s accumulated benefits under the Employee Plan and VIP Plan was negative during the current year and for Robert Virtue and Doug Virtue in the prior year. The aggregate change in the prior year for Robert Dose was attributable to changes in discount rate and passage of time. NEO’s did not earn any additional pension benefits. | | | | | | | | | | (3) The amounts in this column include automobile allowances and the value of personal use of a Company provided vehicle. | | | | | | | | |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth outstanding equity awards held by the Named Executive Officers as of January 31, 2024:
Outstanding Equity Awards at Fiscal Year-End
| | | Stock Awards | | | Name and Title | Year of Award | Shares or Units of Stock that have not Vested (#)(1) | Market Value of Shares or Units of Stock that have not Vested ($)(2) | | Robert A. Virtue | 2020 | 4,000 | 47,920 | | Chairman and CEO | | | | | Douglas A. Virtue | 2020 | 4,000 | 47,920 | | President | | | | | Robert E. Dose | 2020 | 4,000 | 47,920 | | Sr. Vice President | | | | | Finance | | | | | (1) All RSUs vest at 20% per year for five years from the grant date. For the 4,000 RSUs remaining from the June 21, 2019 RSU award there is one remaining vesting on June 21, 2024. | | | | | (2) All year-end dollar values were computed based on the fiscal year-end closing price of $11.98 per share of common stock less the $0.01 par value of the share of Common Stock that is paid by the Named Executive Officer. | | | |
Potential Payments upon Termination or Change-in-Control
Potential Payments upon Termination or Change-in-Control The Company does not have written employment agreements with any of the Named Executive Officers. Retirement, death, disability and change-in-control events do not trigger the payment of compensation to the Named Executive Officers that is not available to all salaried employees (including the amounts included in the “Retirement Benefits” discussion above). Named Executive Officers do not have a contractual right to receive severance benefits. The Company’s 2019 Omnibus Equity Incentive Plan provides that awards under such Plan may be subject to acceleration upon a “Change of Control” (as defined in the Plan).
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Act and Item 402(v) of Regulation S-K, we are providing the following disclosure about the relationship between “compensation actually paid” for our principal executive officer, or PEO, and non-PEO named executive officers, or Non-PEO NEOs, and certain financial performance of the Company. As a smaller reporting company we are permitted and have elected to provide scaled pay versus performance disclosure. For further information regarding our compensation philosophy and how we seek to align executive compensation with the Company’s performance, please see above in this “Executive Compensation” section. The following table presents the pay versus performance information for our Named Executive Officers. The amounts set forth below have been calculated in accordance with Item 402(v) of Regulation S-K. Use of the term “compensation actually paid” is required by the SEC’s rules and, as a result of the calculation methodology required by the SEC. Such amounts differ from compensation actually received by the individuals.
Pay Versus Performance
| Fiscal Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(3) | Average Compensation Actually Paid to Non-PEO NEOs ($)(4) | Year-End Value of $100 Investment Based On Total Stockholder Return ($)(5) | Net Income (Loss) (thousand $)(6) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | | 2024 | 557,027 | 581,827 | 513,889 | 538,689 | 436 | 21,910 | | 2023 | 522,450 | 544,650 | 477,971 | 500,171 | 178 | 16,547 | | 2022 | 341,139 | 351,099 | 340,091 | 319,568 | 108 | (15,136) |
Pay Versus Performance
| (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Robert A. Virtue (our Chief Executive Officer, or PEO) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Summary Compensation Table.” | | (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Virtue, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Virtue during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to Mr. Virtue’s Summary Compensation Table Total compensation for each year to determine the compensation actually paid. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. |
Pay Versus Performance
| | | PEO | | | | | | 2022 | 2023 | 2024 | | | Summary Compensation Table Total | $341,139 | $522,450 | $557,027 | | Less: | Stock Award Values Reported in Summary Compensation Table for the Covered Year | $0 | $0 | $0 | | Plus: | Fair value of Equity Awards Granted During Covered Year | $0 | $0 | $0 | | | Change in Fair Value of Outstanding Unvested Stock Awards from Prior Years | $3,520 | $15,440 | $28,320 | | | Change in Fair Value of Stock Awards from Prior Years that Vested in the Covered Year | $6,440 | $6,760 | $(3,520) | | Less: | Fair Value of Equity Awards Forfeited During Covered Year | $0 | $0 | $0 | | Less: | Change in Pension Value Reported in Summary Compensation Table | $0 | $0 | $0 | | Plus: | Pension Value Service Cost | $0 | $0 | $0 | | | Compensation Actually Paid | $351,099 | $544,650 | $581,827 |
Pay Versus Performance
| (3) The dollar amounts reported in column (d) represent the average of the amounts reported for the NEOs as a group (excluding our PEO) in the “Total” column of the Summary Compensation Table in each applicable year. The Non-PEO NEOs included for purposes of calculating the average amounts in each applicable year are Douglas A. Virtue and Robert E. Dose. | | (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the Non-PEO NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding our PEO) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to average total compensation for the Non-PEO NEOs as a group for each year to determine the compensation actually paid, using the same methodology described above in Note (2). |
Pay Versus Performance
| | | Average of Non-PEO NEOs | | | | | | 2022 | 2023 | 2024 | | | Summary Compensation Table Total | $340,091 | $477,971 | $513,889 | | Less: | Stock Award Values Reported in Summary Compensation Table for the Covered Year | $0 | $0 | $0 | | Plus: | Fair value of Equity Awards Granted During Covered Year | $0 | $0 | $0 | | | Change in Fair Value of Outstanding Unvested Stock Awards from Prior Years | $3,520 | $15,440 | $28,320 | | | Change in Fair Value of Stock Awards from Prior Years that Vested in the Covered Year | $6,440 | $6,760 | $(3,520) | | Less: | Fair Value of Equity Awards Forfeited During Covered Year | $0 | $0 | $0 | | Less: | Change in Pension Value Reported in Summary Compensation Table | $(30,483) | $0 | $0 | | Plus: | Pension Value Service Cost | $0 | $0 | $0 | | | Compensation Actually Paid | $319,568 | $500,171 | $538,689 |
Pay Versus Performance
| (5) Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
Pay Versus Performance
| (6) The dollar amounts reported represent the amount of net income (loss) reflected in the Company’s audited financial statements for the applicable fiscal year. |
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table above. Compensation Actually Paid and Net Income The chart below shows the relationship between the compensation actually paid to our PEO and the average compensation actually paid to our Non-PEO NEOs to the Company’s net income over the three fiscal years presented in the table. Compensation Actually Paid and Cumulative TSR The chart below shows the relationship between the compensation actually paid to our PEO and the average compensation actually paid to our Non-PEO NEOs to the Company’s cumulative total stockholder return, or TSR, over the three fiscal years presented in the table. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Directors who are also employees of the Company receive no additional compensation for their services as directors. Non-employee directors receive an annual retainer of $150,000 comprised of (i) $75,000 in monthly cash payments and (ii) $75,000 in shares of restricted common stock granted on the date of the Annual Meeting of Stockholders based on the closing trading price of the common stock on such date, although directors may elect to receive all or a portion of this amount in cash if they have achieved the Company’s minimum stock ownership guidelines for directors. The Directors are reimbursed for travel and related expenses incurred to attend meetings. The Company’s guidelines with regard to common stock ownership by directors are for each director to own common stock with a market value of at least four times the amount of the annual cash retainer. The following table sets forth the compensation paid to each individual, other than the Named Executive Officers, who served as a director of the Company during our fiscal year ended January 31, 2024:
DIRECTOR COMPENSATION
| | Fees Earned | | | | | | or Paid | Stock | All Other | | | | in Cash | Awards | Compensation | Total | | Name | ($) | ($) | ($) | ($) | | Alexander Cappello (former director) (1) | 68,750 | — | — | 68,750 | | Craig Levra | 106,250 | 75,000 | — | 181,250 | | Robert Lind | 120,833 | 50,000 | — | 170,833 | | Bradley Richardson (2) | 43,750 | 75,000 | — | 118,750 | | Agnieszka Winkler | 106,250 | 75,000 | — | 181,250 | | Kathy Virtue Young | — | — | 313,149 (3) | 313,149 | | (1) Departed the Board on June 20, 2023. | | | | | | (2) Joined the Board on June 20, 2023. | | | | | | (3) Reflects compensation for service as a Vice President of Sales, including base salary, incentive sales programs, and personal use of a Company car. | | | | |