DEF 14A of Lakeland Industries Inc, May 1, 2023

DEF 14A of Lakeland Industries Inc

Filed May 1, 2023 · FY20230001654954-23-005468

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS As permitted by Delaware law, the Board is divided into three classes, the classes being divided equally as possible and each class having a term of three years. Each year, the term of office of one class expires. A director elected to fill a vacancy, including a vacancy resulting from an increase in the number of directors constituting the Board, serves for the remaining term of the class in which the vacancy exists. The Board presently consists of seven members, with two directors serving in Class I, two directors serving in Class II, and three directors serving in Class III. At the recommendation of the Nominating and Governance Committee, the Board has proposed that each of Ronald Herring and Melissa Kidd be nominated for election as a Class I director at the Annual Meeting to serve for a term expiring at the 2026 Annual Meeting of Stockholders and until his or her successor is duly elected and qualified or until such director’s earlier resignation or removal. After their election at the Annual Meeting, Mr. Herring and Ms. Kidd will succeed Christopher J. Ryan and A. John Kreft, our current Class I directors, whose terms expire at the Annual Meeting. Unless otherwise indicated, the enclosed proxy will be voted for the election of each of Mr. Herring and Ms. Kidd as a director, to serve for the term set forth above. Should any nominee become unable to serve for any reason, which is not anticipated, the Board may designate a substitute nominee, in which event the persons named in the enclosed proxy will vote for the election of such substitute nominee. Each person nominated by the Board for election has agreed to serve if elected. We have no reason to believe that any Board nominee will be unavailable or, if elected, will decline to serve.

  2. Terms Expiring in 2024

    Terms Expiring in 2024

  3. Terms Expiring in 2024

    | Name | Age | Position | Director Since | | Jeffery Schlarbaum | 56 | Director | 2017 | | Charles D. Roberson | 60 | Chief Executive Officer President, Secretary and Director | 2020 |

  4. Terms Expiring in 2024

    Jeffrey Schlarbaum has served as a director since 2017. He has served as Chief Executive Officer of Spartronics, a contract manufacturer of complex electronic and electromechanical devices for commercial aerospace, defense, medical devices, life sciences, instrumentation and control, and space applications, since December 2022. Prior to Spartronics, Mr. Schlarbaum was President and Chief Executive Officer of IEC Electronics Corp., a publicly traded electronic manufacturing services company, from February 2015 until December 2022. From February 2013 to June 2013 and from June 2014 to February 2015, Mr. Schlarbaum pursued personal interests. From June 2013 to June 2014, Mr. Schlarbaum served as Chief Operations Officer for LaserMax, Inc., a manufacturer of laser gun sights for law enforcement and the shooting sports community. From October 2010 to February 2013, Mr. Schlarbaum served as President of IEC Electronics Corp. Prior to that, Mr. Schlarbaum served as Executive Vice President and President of Contract Manufacturing of IEC Electronics Corp. from October 2008 to October 2010, Executive Vice President from November 2006 to October 2008 and Vice President, Sales and Marketing from May 2004 to November 2006. Mr. Schlarbaum received a BBA in marketing from National University and an MBA from Pepperdine University. Mr. Schlarbaum’s qualifications to serve on our Board include his business education and multiple prior executive positions at several companies. Charles D. Roberson has served as a director, and our Chief Executive Officer, President and Secretary since February 1, 2020. Mr. Roberson was our Chief Operating Officer from July 2018 to January 31, 2020. From 2009 to July 2018, he was our Senior Vice President, International Sales. Mr. Roberson joined our Company in 2004 as Technical Marketing Manager and later served as International Sales Manager. Prior to joining our Company, Mr. Roberson was employed by Precision Fabrics Group, Inc. as a Market Manager from 1995 to 2001 and as a Nonwovens Manufacturing Manager from 1991 to 1995. He began his career as a manufacturing manager for Burlington Industries, Inc. in its Menswear Division from 1985 to 1991. Collectively, he has over 30 years’ experience in the protective clothing industry as a manufacturer of both roll goods and garments. Mr. Roberson’s qualifications to serve on our Board include his prior business experience and knowledge of our industry and of our company.

  5. INCUMBENT DIRECTORS – CLASS III

    INCUMBENT DIRECTORS – CLASS III

  6. Terms Expiring in 2025

    Terms Expiring in 2025

  7. Terms Expiring in 2025

    | Name | Age | Position | Director Since | | Thomas J. McAteer | 70 | Director | 2011 | | James M. Jenkins | 58 | Director | 2016 | | Nikki L. Hamblin | 46 | Director | 2021 |

  8. Terms Expiring in 2025

    Thomas J. McAteer has served as a director since 2011. Mr. McAteer has served as Executive Vice President of Management Development and Strategic Initiatives of Suffolk Transportation since March 2013 and Chairman of the Board of New World Medical Network, a private healthcare organization, since 2015. He also served as the Vice Chair of the Board and Chair of the Compensation and Personnel Committee for the Long Island Power Authority from December 2014 until January 2020. He served as the Senior Vice President and Regional Market Head for Aetna's Medicaid Division from March 2007 until March 2013. Prior to joining Aetna’s Medicaid Division, Mr. McAteer served as the President and CEO of Vytra Health Plans. In a thirteen-year career at Vytra, Mr. McAteer played an executive leadership role in growing Vytra from annual revenues of $70 million in 1993 to over $375 million in 2005. In 2001, Mr. McAteer facilitated the sale of Vytra to HIP Health Plans and, thereafter assumed the additional responsibilities of Executive Vice President for Brand Leadership, as well as joining the Executive Committee of the enterprise. Before joining Vytra, Mr. McAteer served as the Chief Deputy County Executive in Suffolk County, New York and prior to that as the Director of Human Resources for the Metropolitan Transportation Authority. Mr. McAteer's qualifications to serve on our Board include his business experience and multiple prior executive positions. James M. Jenkins has served as a director since 2016. Mr. Jenkins is the General Counsel and Vice President of Corporate Development for Transcat, Inc. (Nasdaq: TRNS), a provider of calibration, repair, inspection and laboratory services, where he serves as Transcat’s chief risk officer and advises management and the board of directors over matters of corporate governance and securities law. He also leads Transcat’s acquisition strategy. He joined Transcat in September 2020. Prior to joining Transcat, he was a partner at Harter Secrest & Emery LLP, a regional law firm located in New York State. His practice focused in the areas of corporate governance, and general corporate law matters, including initial and secondary public offerings, private placements, mergers and acquisitions, and securities law compliance. Mr. Jenkins joined the firm in 1989 as an associate and was elected a partner effective January 1, 1997. He is a Chambers rated attorney and served as the Chair of the firm's Securities Practice Group from 2001 to 2020 and as a member of the firm’s Management Committee from January 2007 to January 2013. From 2018 until September 2020, he served as the Partner in Charge of the firm's New York City office. Mr. Jenkins holds a BA from Virginia Military Institute and a J.D. from West Virginia University College of Law. Mr. Jenkins previously served on our Board from 2012 to 2015 and was a member of our Audit and Corporate Governance Committees. Mr. Jenkins’s qualifications to serve on our Board include his corporate governance experience as well his current business-related experience. Nikki L. Hamblin has served as a director since April 2021. Ms. Hamblin has served as the Director of Advisor Service at Manning & Napier Advisors, LLC, a publicly traded investment management company, since September 2019. In addition to her current role, she is a member of the firm’s Committee for Diversity & Inclusion. Previously, she was the Director of Retirement Plan Services at GRP Financial California, LLC, a retirement plan consulting firm, from September 2017 to August 2019 and she served as Vice President, Key Accounts at Manning & Napier from January 2013 to August 2017. Prior to her experience at Manning & Napier, she served as an investment banker specializing in middle-market private and publicly owned mergers and acquisitions and financing transactions. She obtained a Bachelor of Science degree from Syracuse University and a Master of Business Administration with a concentration in finance from the William E. Simon Graduate School of Business Administration at the University of Rochester and has attained multiple securities and financial planning licenses and designations. Ms. Hamblin’s qualifications to serve on our Board include her investment banking and finance experience.

  9. OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”

    OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”

  10. THE NOMINEES FOR DIRECTOR

    THE NOMINEES FOR DIRECTOR

  11. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION For the fiscal year ended January 31, 2023, the compensation structure for our non-employee directors was as follows:

  12. DIRECTOR COMPENSATION

    | • | an annual Board retainer in the amount of $70,000; | | • | an annual Board grant of shares of common stock in the Company having a value equal to $65,000; | | • | an additional annual retainer of $20,000 for each of the Vice Chair of the Board, lead independent director (if applicable), and Audit Committee Chair; | | • | an additional annual retainer of $10,000 for the lead independent director (if applicable); | | • | an additional annual retainer of $7,500 for each of the Compensation Committee Chair and each member of the Audit Committee; | | • | an additional annual retainer of $6,000 for the Nominating and Governance Committee Chair; | | • | an additional annual retainer of $3,750 for each member of the Compensation Committee; and | | • | an additional annual retainer of $3,000 for each member of the Nominating and Governance Committee. |

  13. DIRECTOR COMPENSATION

    Our independent directors no longer have the option to receive their fees in shares of our common stock or other equity awards. For the fiscal year ended January 31, 2023, Christopher J. Ryan received $125,000 for his services as Executive Chairman. Mr. Ryan also received a performance bonus of $6,703. On June 15, 2022, each of our non-employee directors, including Mr. Ryan, received awards of 3,918 time-based restricted stock units under our 2017 Equity Incentive Plan, which vest in full on the first anniversary of the date of grant, assuming the director’s continuous service on the Board of Directors on such date. Members of the Board of Directors are reimbursed for all travel-related expenses to and from meetings of the Board and committees. Directors who are also officers of the Company are not compensated for their duties as directors.

  14. DIRECTOR COMPENSATION - FISCAL 2023

    DIRECTOR COMPENSATION - FISCAL 2023 The following table sets forth compensation paid by the Company to our directors during the fiscal year ended January 31, 2023.

  15. DIRECTOR COMPENSATION - FISCAL 2023

    | Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards(2) ($) | Option Awards ($) | Non-equity incentive plan Compensation ($) | All Other Compen-sation ($) | Total ($) | | A. John Kreft | $106,750 | $65,000 | -- | -- | -- | $171,750 | | Thomas McAteer | $79,750 | $65,000 | -- | -- | -- | $144,750 | | James Jenkins | $108,000 | $65,000 | -- | -- | -- | $173,000 | | Jeffrey Schlarbaum | $90,000 | $65,000 | -- | -- | -- | $155,000 | | Nikki L. Hamblin | $75,063 | $65,000 | -- | -- | -- | $140,063 | | Christopher J. Ryan(3) | $125,923 | $65,000 | -- | $6,703 | $13,862(4) | $210,911 |

  16. DIRECTOR COMPENSATION - FISCAL 2023

    | (1) Charles D. Roberson, our Chief Executive Officer, is not included in the table above as he was an employee of the Company during fiscal 2023 and, therefore, did not receive any additional compensation for the services that he provided as director. The compensation that Mr. Roberson received is included in the Summary Compensation Table. | | (2) Represents the aggregate grant date fair value of restricted stock units granted to our non-employee directors during the fiscal year ended January 31, 2023. The assumptions used to calculate the fair value are set forth in footnote 8 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023, as filed with the SEC. | | (3) Mr. Ryan served as our Executive Chairman during fiscal 2023 and received the compensation described above for serving in that role. | | (4) Represents Company contributions to 401(k) Plan of $4,727 and automobile allowance of $9,135. |

  17. EXECUTIVE COMPENSATION OVERVIEW

    While the Company seeks to maintain competitive compensation arrangements for its executives, it also strongly believes that the competitiveness of the compensation packages should be based on the total compensation achievable by the executive officers and that a significant portion of that compensation should be incentive based - linked to the performance of the Company. Consistent with Company philosophy and objectives, executive compensation is weighted heavily toward incentive compensation that is based on target performance metrics that are common to all incentive compensation throughout the Company. These targets are recommended by the executive team and are subject to approval by the Compensation Committee. Accordingly, the executive compensation packages provided to the Chief Executive Officer and the other executive officers are structured to include, among other things and in addition to base salary, cash bonus, benefits, and equity incentives. The Company seeks to have incentive compensation comprise between 50% and 60% of total executive compensation, at target performance levels. A reasonable portion of the compensation packages for executive officers is in the form of restricted stock unit grants, which are intended to provide incentives to executive officers to achieve long-term growth in the earnings and price of the Company’s common stock and enhance executive retention. Additional annual cash bonus opportunities based on pre-established performance goals as determined by the Compensation Committee are utilized to make adjustments necessary to maintain the competitiveness of executive compensation without compromising the Company’s commitment to keeping executive incentive compensation greater that 50% of total compensation. Overall compensation levels are intended to be set such that there must be growth in the market price of the Company’s common stock and growth in the Company’s financial performance parameters in order for executive officers to achieve a competitive compensation level. The Compensation Committee believes that executive officer compensation should seek to align the interests of executives with those of the Company’s stockholders, by seeking to reward long-term growth (not short-term) in the value of the Company’s common stock and to reward the achievement of financial goals by the Company. For fiscal 2023, incentive components of restricted stock unit grants and incentive-based cash bonuses were based upon levels of revenues, Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) margins, and free cash flow. These incentives were intended to keep the executive team focused on the core goal of overall long-term corporate performance. When setting or recommending compensation levels, the Compensation Committee considers the overall performance of the Company, the individual performance of each of the executive officers, and their individual contributions to and ability to influence the Company’s performance, and also seeks to encourage teamwork amongst the executives. The Compensation Committee believes that the level of total compensation, including base salary, bonus, equity grants and benefits of executives should generally be maintained to compete with other public and private companies of comparable size and complexity. The Compensation Committee bases its determinations on a variety of factors, including the personal knowledge of market conditions that each member of the Compensation Committee has gained in his or her own experience managing businesses, salary surveys available to the Company, the knowledge of the Chief Executive Officer and other executives as to local market conditions, information learned regarding the compensation levels at other small cap companies in the industrial apparel industry and other similarly sized businesses and information provided by independent compensation consultants. The Compensation Committee periodically evaluates the types and levels of compensation paid by the Company to ensure that it is able to attract and retain qualified executive officers and that their compensation remains comparable to compensation paid to similarly situated executives in comparable companies. The following describes in more specific terms the elements of compensation that implement the compensation philosophy and objectives described above, with specific reference to compensation earned by the named executive officers for the fiscal year ended January 31, 2023. “Named executive officers” refers to those executive officers named in the Summary Compensation Table that immediately follows this discussion. Base Salaries. The base salary of each of our named executive officers is fixed pursuant to the terms of their respective employment agreements with us and is determined by evaluating the responsibilities of the position, the experience and knowledge of the individual and the competitive marketplace at that time for executive talent, including a comparison to base salaries for comparable positions (considered in the context of the total compensation paid by such companies). Salaries are reviewed from time to time thereafter, generally in connection with the expiration of employment agreements or when other considerations warrant such review in the discretion of the Compensation Committee and the Board, considering the foregoing factors as well as the executive’s performance and the other factors considered in setting total compensation described above. When salary adjustments are considered, they are made in the context of the total compensation for executive officers, consistent with the core principles discussed above. In each case, the participants involved in recommending and approving salary adjustments consider the performance of each executive officer, including consideration of new responsibilities and the previous year’s corporate performance. Individual performance evaluations take into account such factors as achievement of specific goals that are driven by the Company’s strategic plan and attainment of specific individual objectives. The factors impacting base salary levels are not assigned specific weights but are considered as a totality, against the backdrop of the Company’s overall compensation philosophy, and salary adjustments are determined in the discretion of the Compensation Committee and the Board. Bonuses. The Company has historically granted its annual bonuses to executive officers based on corporate performance, as measured by reference to factors which the Compensation Committee believes reflect objective performance criteria over which management generally has the ability to exert some degree of control. With respect to the fiscal year ended January 31, 2023, the Compensation Committee approved a bonus program pursuant to which the named executive officers, as well as other key employees, would earn bonuses based upon defined corporate performance goals and individual financial and operational parameters. The Compensation Committee set corporate performance goals tied to revenues (weighted at 40%), EBITDA margin (weighted at 40%) and free cash flow (weighted at 20%) for the annual cash bonus program for the fiscal year ended January 31, 2023, with payouts ranging from 50% of target for minimum level of performance, 100% of target for target level performance, and 200% of target for performance at the maximum level. Mr. Roberson’s target bonus for fiscal 2023 was 65% of his base salary, Mr. Dillard’s target bonus for fiscal 2023 was 40% of his base salary, and Mr. Harvey’s target bonus for fiscal 2023 was 30% of his base salary.

  18. EXECUTIVE COMPENSATION OVERVIEW

    Equity Awards/Restricted Stock Unit Grants. A third component of executive officers’ compensation is grants of shares of restricted stock or restricted stock units issued pursuant to our stock plans then in effect; although the Compensation Committee may consider using other equity-based incentives in the future and in fact issued a stock option to Allen E. Dillard, the Company’s former Chief Operating and Financial Officer, upon the commencement of his employment in August 2019, to Steven Harvey, Executive Vice President for Global Sales and Marketing, upon the commencement of his employment in January 2021, and to Roger Shannon, Chief Financial Officer, upon the commencement of his employment in February 2023. The Compensation Committee grants restricted stock units to the Company’s executive officers in order to align their interests with the interests of the stockholders. Restricted stock and restricted stock unit grants are considered by the Company to be an effective long-term incentive because the executives’ gains are linked to increases in stock value, which in turn provides stockholder gains. Our executive officers received grants of restricted stock units in fiscal 2022 and fiscal 2023, each in accordance with the terms of our 2017 Equity Incentive Plan. Half of the restricted stock units granted in fiscal 2023 vest based solely on the passage of time (ratably over three years beginning with the first anniversary of the date of grant), and the other half of the restricted stock units vest at the end of a three-year performance period, based upon revenue growth (25%) and EBITDA margin (25%). At the end of the applicable performance period, a number of shares will vest, if any, based on the performance levels achieved, with payouts ranging from 50% of target for minimum level of performance, 100% of target for target level performance, and 150% of target for performance at the maximum level. Setting Executive Compensation. Base salaries and other compensation for the Chief Executive Officer and other executive officers are set by the Compensation Committee and reflect a number of elements including recommendations by our Chief Executive Officer as to the other executive officers based on evaluation of their performance and the other factors described above. The Compensation Committee also considers the recommendations and analysis of Willis Towers Watson, its independent compensation consultant, on matters of executive officer and director compensation. The Compensation Committee works closely with the Chief Executive Officer in establishing compensation levels for the other executive officers. Mr. Roberson and the individual executives engage in discussions regarding the executive’s salary, and Mr. Roberson reports on such discussions and makes his own recommendations to the Compensation Committee. The Compensation Committee will separately discuss with Mr. Roberson any proposed adjustment to his own compensation. The Compensation Committee reports to the Board on all proposed changes in executive compensation after it has formed a view on appropriate adjustments and makes recommendations for consideration of the Board for executive officers other than the Chief Executive Officer. The Compensation Committee sets the compensation level for the Chief Executive Officer, and, with recommendations from the Board, for the other executive officers. Salary levels and other aspects of compensation for the Chief Executive Officer and the Chief Financial Officer historically have been set forth in employment agreements. The Compensation Committee is charged with the responsibility for approving the compensation package for the Chief Executive Officer. The Chief Executive Officer is not present during voting or deliberation on his performance or compensation. Retirement Benefits. The Company does not provide any retirement benefits to its executive officers, other than matching a portion of employee contributions to the Company’s 401(k) plan. Employment Agreements. The Company entered into employment agreements with each of its named executive officers for fiscal year 2023. These employment agreements are described in more detail under the caption “Narrative to Compensation Table” below. Taxation and Accounting Matters. The Compensation Committee has considered the accounting and tax impact of various elements of compensation provided to our executive officers to balance the potential cost to us with the benefit and value of the compensation to the executive officers, but those considerations have generally not been a material factor in determining amounts of compensation for our executive officers. Stock Ownership and Clawback Requirements. The Compensation Committee has established Equity Retention Requirements and restrictions on equity awards for directors and executives. These retention requirements and restrictions are consistent with practices within the Company’s peer group and are designed to increase alignment of executive and shareholder interests. The retention requirements establish minimum equity positions, as a multiple of annual salary, that must be maintained by directors and executives prior to disposing of any shares acquired under the incentive plan. These requirements are outlined below:

  19. EXECUTIVE COMPENSATION OVERVIEW

    | ○ | Shares obtained or available under the equity award plan may not be hedged or pledged for any purpose. |

  20. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE The table below sets forth all salary, bonus and other compensation paid (or payable in respect of bonuses) to our principal executive officer and each of the two highest paid executive officers other than the principal executive officer (our “named executive officers”) for the fiscal years ended January 31, 2023 and 2022. As used in this Proxy Statement, FY refers to a fiscal year ended January 31. For example, FY23 refers to the fiscal year ended January 31, 2023.

  21. SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards (1) ($) | Option Awards (1) ($) | Nonequity Incentive Plan Compensation ($) | All Other Compensation(2) ($) | Total ($) | | Charles D. Roberson Chief Executive Officer, President and Secretary | 2023 2022 | $425,000 $376,923 | -- -- | $425,000 $375,000 | -- -- | $67,111 $232,318 | $10,709 $10,386 | $927,820 $994,627 | | Allen E. Dillard Former Chief Operating and Financial Officer (3) | 2023 2022 | $325,000 $286,442 | -- -- | $243,750 $213,750 | -- -- | $30,000 $119,615 | $10,702 $11,318 | $609,452 $631,125 | | Steven L. Harvey Executive Vice President for Global Sales and Marketing | 2023 2022 | $344,619(4) $348,803(5) | -- -- | $96,000 $96,000 | -- -- | $17,491 $57,546 | $10,737 $5,603 | $468,847 $507,952 |

  22. SUMMARY COMPENSATION TABLE

    | (1) The amounts in this column represent the aggregate grant date fair value of the stock awards and option awards, as applicable. Generally, the grant date fair value is the amount that we would expense in our financial statements over the vesting period of the award based on the probable outcome of the award conditions. Assumptions used in the calculation of this amount are included in Note 8 to our audited financial statements for the fiscal year ended January 31, 2023, which were included in our Annual Report on Form 10-K filed with the SEC on April 18, 2023. The amounts reported in the stock awards column for 2023 assume performance at the target level. If maximum performance is achieved, the amounts would be: Mr. Roberson ($531,250); Mr. Dillard ($304,688); and Mr. Harvey ($120,000). | | (2) For fiscal 2022 and 2023, represents Company contributions to 401(k) Plan. | | (3) Mr. Dillard served as Chief Operating and Financial Officer of the Company until February 1, 2023. Upon the hiring of Mr. Shannon as the Company’s Chief Financial Officer, Mr. Dillard became the Chief Operating Officer of the Company, and he served in that role until April 6, 2023, at which time Ms. An was appointed as Chief Operating Officer of the Company. | | (4) Includes commissions of $104,619. | | (5) Includes commissions of $108,803. |

  23. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END The following table sets forth information with respect to outstanding equity-based awards at January 31, 2023 for our named executive officers.

  24. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Un-exercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (#) | Market Value of Shares or Units of Stock that have not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#)(1) | Equity Incentive Plan Awards: Market or Payout of Unearned Shares, Units or Other Rights that have not Vested ($)(1) (2) | | Charles D. Roberson, CEO | -- | -- | -- | -- | -- | -- | -- | 16,957(3) 21,591(4) 24,556(5) | $245,537 $312,638 $355,571 | | Allen E. Dillard, Former CFO/COO | 16,600 | -- | -- | $11.17 | 8/12/2030 | -- | -- | 11,559(3) 12,307(4) 14,333(5) | $167,374 $178,205 $207,542 | | Steven L. Harvey, Executive VP for Global Sales and Marketing | 6,800(6) | 3,400(6) | -- | $28.21 | 1/3/2031 | -- | -- | 5,527(4) 5,547(5) | $80,031 $80,321 |

  25. OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END

    | (1) The level of award (minimum, target or maximum) and final vesting is based on the Company’s levels of revenue growth, EBITDA margin, free cash flow, as well as Board discretion and retention of employment. The amounts reported assume maximum level of performance. The actual total number of shares that vest may differ. | | (2) Market value is based on the closing price of our common stock on January 31, 2023 of $14.48. | | (3) The award is subject to a three-year performance period that began February 1, 2021 and ended January 31, 2023. The amounts earned, as determined by the Compensation Committee in April 2023 based on actual performance, including the time-based portion of such awards, were as follows: Mr. Roberson, 15,904 shares; and Mr. Dillard, 10,841 shares. | | (4) The award is subject to a three-year performance period that began February 1, 2022 and ends January 31, 2024 and vests January 31, 2024. | | (5) The award is subject to a three-year performance period that began February 1, 2023 and ends January 31, 2025 and vests January 31, 2025. | | (6) The stock options are for a term of 10 years, exercisable at $28.21 per share. One-third of the options vested on January 4, 2022 and one-third vested on January 4, 2023. The remaining one-third (3,400) of the options vest on January 4, 2024, subject to continued employment through such vesting date. |

  26. POTENTIAL PAYMENTS UPON TERMINATION

    POTENTIAL PAYMENTS UPON TERMINATION

  27. PAY VERSUS PERFORMANCE(1)

    PAY VERSUS PERFORMANCE(1) In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO named executive officers (“NEOs”) and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.

  28. PAY VERSUS PERFORMANCE(1)

    | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (1)(2)(3) | Average Summary Compensation Table Total for Non-PEO NEOs (1) | Average Compensation Actually Paid to Non-PEO NEOs (1)(2)(4) | Value of Initial Fixed $100 Investment Based on TSR (5) | Net Income | | 2023 | $927,820 | $587,316 | $539,100 | $363,453 | $52 | $2,000,000 | | 2022 | $994,627 | $746,108 | $569,289 | $403,640 | $76 | $11,000,000 |

  29. PAY VERSUS PERFORMANCE(1)

    | (1) The PEO for fiscal years 2023 and 2022 was Charles D. Roberson. The non-PEO NEOs for fiscal years 2023 and 2022 were Allen E. Dillard (our former Chief Operating and Financial Officer) and Steven L. Harvey (Executive Vice President for Global Sales and Marketing). | | (2) The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnotes 3 and 4 below. Equity values are calculated in accordance with FASB ASC Topic 718. | | (3) To calculate the amounts of Compensation Actually Paid to the PEO in each of 2023 and 2022, the following adjustments were made to the PEO’s Summary Compensation Table Total for each respective year: |

  30. PAY VERSUS PERFORMANCE(1)

    | a. | Fiscal Year 2023: |

  31. PAY VERSUS PERFORMANCE(1)

    | i. | We deducted $425,000 reported in the Summary Compensation Table, reflecting the grant date fair value of equity-based awards granted to the PEO in fiscal year 2023; | | ii. | we added $328,204, reflecting the fair value of such equity-based awards as of the end of fiscal year 2023; | | iii. | we deducted $132,790, reflecting the change in the fair value during fiscal year 2023 of equity-based awards granted to the PEO before fiscal year 2023 that were outstanding and unvested as of the end of fiscal year 2023; and | | iv. | we deducted $110,918, reflecting, as of the applicable vesting date, the change in the fair value during fiscal year 2023 of equity-based awards granted to the PEO before fiscal year 2023 that vested during fiscal year 2023. |

  32. PAY VERSUS PERFORMANCE(1)

    __________________________ (1) Numbers included in this section are based on preliminary calculations of Willis Towers Watson. Updates needed as numbers are finalized.

  33. PAY VERSUS PERFORMANCE(1)

    | b. | Fiscal Year 2022: |

  34. PAY VERSUS PERFORMANCE(1)

    | i. | We deducted $375,000 reported in the Summary Compensation Table, reflecting the grant date fair value of equity-based awards granted to the PEO in fiscal year 2022; | | ii. | we added $363,078, reflecting the fair value of such equity-based awards as of the end of fiscal year 2022; | | iii. | we deducted $126,133, reflecting the change in the fair value during fiscal year 2022 of equity-based awards granted to the PEO before fiscal year 2022 that were outstanding and unvested as of the end of fiscal year 2022; and | | iv. | we deducted $110,465, reflecting, as of the applicable vesting date, the change in the fair value during fiscal year 2022 of equity-based awards granted to the PEO before fiscal year 2022 that vested during fiscal year 2022. |

  35. PAY VERSUS PERFORMANCE(1)

    | (4) To calculate the amounts of Compensation Actually Paid, on average, to our non-PEO NEOs in each of 2023 and 2022, the following adjustments were made to the Average Summary Compensation Table Total for Non-PEO NEOs for each respective year: |

  36. PAY VERSUS PERFORMANCE(1)

    | a. | Fiscal Year 2023: |

  37. PAY VERSUS PERFORMANCE(1)

    | i. | We deducted $169,875 reported in the Summary Compensation Table, reflecting the grant date fair value of equity-based awards granted to the non-PEO NEOs in fiscal year 2023; | | ii. | we added $131,189, reflecting the fair value of such equity-based awards as of the end of fiscal year 2023; | | iii. | we deducted $87,998, reflecting the change in the fair value during fiscal year 2023 of equity-based awards granted to the non-PEO NEOs before fiscal year 2023 that were outstanding and unvested as of the end of fiscal year 2023; and | | iv. | we deducted $48,962, reflecting, as of the applicable vesting date, the change in the fair value during fiscal year 2023 of equity-based awards granted to the PEO before fiscal year 2023 that vested during fiscal year 2023. |

  38. PAY VERSUS PERFORMANCE(1)

    | b. | Fiscal Year 2022: |

  39. PAY VERSUS PERFORMANCE(1)

    | i. | We deducted $154,875 reported in the Summary Compensation Table, reflecting the grant date fair value of equity-based awards granted to the non-PEO NEOs in fiscal year 2022; | | ii. | we added $149,957, reflecting the fair value of such equity-based awards as of the end of fiscal year 2022; | | iii. | we deducted $117,703, reflecting the change in the fair value during fiscal year 2022 of equity-based awards granted to the non-PEO NEOs before fiscal year 2022 that were outstanding and unvested as of the end of fiscal year 2022; and | | iv. | we deducted $43,027, reflecting, as of the applicable vesting date, the change in the fair value during fiscal year 2022 of equity-based awards granted to the non-PEO NEOs before fiscal year 2022 that vested during fiscal year 2022. |

  40. PAY VERSUS PERFORMANCE(1)

    | (5) The values disclosed in this TSR column represent the measurement period value of an investment of $100 in our common stock as of January 31, 2021, and then valued again on each of January 31, 2022 and January 31, 2023. Historical stock performance is not necessarily indicative of future stock performance. |

  41. PAY VERSUS PERFORMANCE(1)

    Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”) The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and the Company’s cumulative TSR over the two most recently completed fiscal years. Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and our Net Income during the two most recently completed fiscal years.