DEF 14A of Smith Midland Corp, Jun 24, 2024

DEF 14A of Smith Midland Corp

Filed Jun 24, 2024 · FY20230001654954-24-008105

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Five Directors, constituting the entire Board of Directors, are to be elected at the Annual Meeting. Each Director of the Company is elected at the Company’s Annual Meeting of Stockholders and serves until his or her successor is elected and qualified. Vacancies and newly created directorships resulting from any increase in the number of authorized Directors may be filled by a majority vote of Directors then remaining in office. Officers are elected by and serve at the discretion of the Board of Directors. Shares represented by all proxies received by the Board of Directors and not so marked as to withhold authority to vote for an individual Director will be voted (unless one or more nominees are unable or unwilling to serve) for the election of the nominees named below. The Board of Directors knows of no reason why any such nominee should be unwilling to serve, but if such should be the case, proxies will be voted for the election of some other person or for fixing the number of Directors at a lesser number. The Board unanimously recommends that Stockholders vote FOR election of the five nominees for Director. The following table sets forth certain information concerning each nominee for election as a Director of the Company:

  2. ELECTION OF DIRECTORS

    | Name | Age | Director Since | Position | | Ashley B. Smith | 62 | 1994 | Chairman of the Board of Directors, Chief Executive Officer, and President | | James Russell Bruner | 68 | 2018 | Director | | Matthew I. Smith | 57 | 2023 | Director, Vice President of Sales & Marketing, and President of Concrete Safety Systems | | Read Van de Water | 60 | 2023 | Director | | Richard Gerhardt | 57 | 2016 | Director |

  3. Background

    Background The following is a brief summary of the background of each nominee for Director of the Company: Ashley B. Smith. Chairman of the Board of Directors, Chief Executive Officer, and President. Ashley B. Smith has served as Chairman of the Board of Directors since January 2023, Chief Executive Officer of the Company since 2018, President of the Company since 2012, and as a Director since 1994. Mr. Smith was Vice President of the Company from 1990 to 2011. He is a past Chairman of the National Precast Concrete Association. Mr. Smith serves on the Board of Trustees of Bridgewater College in Bridgewater, Virginia. Mr. Smith holds a Bachelor of Science degree in Business Administration from Bridgewater College. The Company believes that Mr. Smith’s education, experience in the precast concrete industry and business experience gives him the qualifications and skills necessary to serve in the capacity as a director of the Company. James Russell Bruner. Director. Mr. Bruner has served as a member of the Board of Directors of the Company since 2018. Mr. Bruner has served as Chairman of Maersk Line, Limited (“Maersk Line”) since November 2016 and was President and Chief Executive Officer of Maersk Line from 2014 to 2017. Maersk Line owns and operates a fleet of container and tanker ships that are under the flag of the United States. These ships support military, government and humanitarian missions through the transportation of United States government cargo on an international basis. Maersk Line operates as a subsidiary of A.P. Moller-Maersk A/S, an integrated transport and logistics company headquartered in Copenhagen, Denmark. Mr. Bruner attended Bridgewater College in Virginia. He is a graduate of the University of Michigan Executive Program and Harvard Business School's Advanced Management Program. The Company believes that Mr. Bruner's current and past business-related experience provides him with the knowledge and skills necessary to serve in the capacity as a director of the Company. Matthew I. Smith. Director, Vice President of Sales & Marketing, and President of Concrete Safety Systems. Mr. Smith has served as a member of the Board of Directors of the Company since December 2023. Mr. Smith is the Vice President of Sales & Marketing of the Company and the President of Concrete Safety Systems, the barrier rental division of Smith-Midland. He has served in these roles since 2008 and 2015, respectively. Prior to his appointment as a member of the Board of Directors, Mr. Smith served as an Advisor to the Board. He is active in the local community, serving as a member of the Board of Directors for Leadership Fauquier and as a Fauquier County Planning Commissioner. Mr. Smith is a past president and current board member of the Precast Concrete Association of Virginia. He has a bachelor’s degree in Business Administration from Bridgewater College. The Company believes that Mr. Smith’s education, experience in the precast concrete industry and business experience gives him the qualifications and skills necessary to serve in the capacity as a director of the Company. Read Van de Water. Director. Ms. Van de Water has served as a member of the Board of Directors of the Company since December 2023. She has served as Senior Vice President of External Affairs of Safran USA since 2011. Safran USA is an international high-technology aerospace, defense, and space company. Ms. Van de Water served as Chairman of the Board for the National Mediation Board from 2005 to 2009 and was a board member from 2003 to 2009. Ms. Van de Water served as the Assistant Secretary for Aviation & International Affairs for the U.S. Department of Transportation from 2001 to 2003 and as Legislative Counsel of International Trade and Health Care for The Business Roundtable from 1997 to 2001. Ms. Van de Water received her J.D. from The Georgetown University Law Center. She is also a graduate of Elliot School of International Affairs at George Washington University, and The University of the South: Sewanee. The Company believes that Ms. Van de Water’s current and past business and government-related experience provides her with the knowledge and skills necessary to serve in the capacity as a director of the Company. Richard Gerhardt. Director. Mr. Gerhardt has served as a member of the Board of Directors of the Company since 2016. He is currently the Corporate Development Officer for Paladin Technologies, LLC, a building systems network company. Mr. Gerhardt previously served as the President of Sales Services International, Inc., a consulting firm, and Chief Sales Officer for IMEX Global Solutions, Inc., a logistics company, since April 2020, and is serving as a Fauquier County, Virginia Supervisor for the Cedar Run Magisterial District since 2016. From 2003 to 2014, Mr. Gerhardt served in an escalating succession of positions for three global shipping and logistic companies: DHL Global Mail, ESI Global Logistic and MSI Worldwide. His eight years as President, Chief Operating Officer, and shareholder of MSI Worldwide culminated in its acquisition by Belgian Post. Mr. Gerhardt holds a Bachelor of Arts in Business Administration with a minor in Economics from Washington College in Chestertown, Maryland. The Company believes that Mr. Gerhardt's current and past business-related experience provides him with the knowledge and skills necessary to serve in the capacity as a director of the Company.

  4. GENERAL INFORMATION RELATING TO THE BOARD OF DIRECTORS AND OFFICERS

    GENERAL INFORMATION RELATING TO THE BOARD OF DIRECTORS AND OFFICERS

  5. Compensation Committee

    | • | approving the corporate goals and objectives applicable to the compensation for the Chief Executive Officer, evaluating at least annually the Chief Executive Officer’s performance in light of those goals and objectives and determining and approving the Chief Executive Officer’s compensation level based on this evaluation; | | • | reviewing and approving other executive officers’ annual base salaries and annual incentive opportunities (after considering the recommendation of our Chief Executive Officer with respect to the form and amount of compensation for executive officers other than the Chief Executive Officer); | | • | evaluating the level and form of compensation for Board of Directors and committee service by non-employee members of our Board and recommending changes when appropriate; | | • | advising the Board on compensation and benefits matters, including making recommendations and decisions where authority has been granted regarding our equity-based compensation plans and benefit plans generally, including employee bonus and retirement plans and programs; | | • | approving the amount of and vesting of equity awards; | | • | evaluating the need for, and provisions of, any employment contracts/severance arrangements for the Chief Executive Officer and other executive officers; and | | • | reviewing and discussing with management our disclosure relating to executive compensation proposed by management to be included in our proxy statement and recommending that such disclosures be included in our annual report on Form 10-K and proxy statement. |

  6. Director Compensation

    Director Compensation For 2023, non-executive officer Directors received $3,000 per meeting as compensation for their services as Directors, with an additional $3,000 annual fee for service as the chair of the Audit Committee and a $3,000 annual fee for service as the chair of the Compensation Committee. Effective January 1, 2024, all non-executive officer Directors receive $40,000 per year, with $10,000 paid quarterly, as compensation for their services as Directors. Additionally, all non-executive officer Directors receive $15,000 in stock annually which vests immediately. The Company does not pay any additional compensation to directors who are members of management, but the Company reimburses all directors for out-of-pocket expenses incurred in connection with attending Board and committee meetings or otherwise in their capacity as directors.

  7. Director Compensation Table for 2023

    Director Compensation Table for 2023

  8. Director Compensation Table for 2023

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation | Non- Qualified Deferred Compensation Earnings | All Other Compensation | Total ($) | | Ashley B. Smith (1) | — | — | — | — | — | — | — | | James Russell Bruner | 12,000 | — | — | — | — | — | 12,000 | | Matthew I. Smith (2) | — | — | — | — | — | — | — | | Read Van de Water (3) | — | — | — | — | — | — | — | | Richard Gerhardt | 12,000 | — | — | — | — | — | 12,000 | | Wesley A. Taylor (4) | 9,000 | — | — | — | — | — | 9,000 |

  9. Director Compensation Table for 2023

    | (1) All compensation for Ashley B. Smith is reported in Compensation of Executive Officers. | | (2) Matthew I. Smith was appointed as a Director in December 2023. He is a member of management and does not receive additional compensation as a director. | | (3) Read Van de Water was appointed as a Director in December 2023 and did not attend any meetings in 2023. | | (4) Wesley A. Taylor retired in December 2023. |

  10. EQUITY COMPENSATION PLAN INFORMATION

    EQUITY COMPENSATION PLAN INFORMATION The following table sets forth information as of December 31, 2023 regarding the Company's equity compensation plans:

  11. EQUITY COMPENSATION PLAN INFORMATION

    | Plan Category | (a) Number of securities to be issued upon exercise of outstanding options, warrants and rights | (b) Weighted average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(1) | | Equity compensation plans approved by security holders | — | — | — | | Equity compensation plans not approved by security holders | — | — | 89,303 | | Total | — | — | 89,303 |

  12. EQUITY COMPENSATION PLAN INFORMATION

    (1) The Equity Plan has a balance of 89,303 shares of stock unissued and available for award at December 31, 2023. On October 13, 2016, the Company's Board of Directors adopted the Equity Plan. Employees, directors and consultants of the Company are eligible to participate in the Equity Plan. The Equity Plan is administered by the Compensation Committee of the Board of Directors or the full Board during such times as no committee is appointed by the Board or during such times as the Board is acting in lieu of the committee (the "Committee"). The Equity Plan provides for the grant of equity-based compensation in the form of restricted stock, restricted stock units, performance shares, performance cash and other share-based awards. The Committee has the authority to determine the type of award, as well as the amount, terms and conditions of each award, under the Equity Plan subject to the limitations and other provisions of the Equity Plan. An aggregate of 400,000 shares of the Company's common stock, par value $.01 per share, were authorized for issuance under the Equity Plan, subject to adjustment for stock splits, dividends, distributions, recapitalizations and other similar transactions or events, of which amount 89,303 remains available for issuance at December 31, 2023. If any shares subject to an award are forfeited, expire, or otherwise terminate without issuance of such shares, such shares shall, to the extent of such forfeiture, expiration, or termination, again be available for issuance under the Equity Plan.

  13. Summary Compensation Table

    Summary Compensation Table

  14. Summary Compensation Table

    | | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($) | All Other Compensation ($) | Total ($) | | Ashley B. Smith | 2023 | 329,059 | 24,150 | — | 11,982 | 365,191 | | Chief Executive Officer and President (3) | 2022 | 321,769 | 155,256 | — | 12,200 | 489,225 | | Stephanie Poe | 2023 | 147,290 | 10,000 | — | 6,292 | 163,582 | | Chief Financial Officer, Secretary, and Treasurer (4) | | | | | | |

  15. Summary Compensation Table

    | (1) Represents salaries paid in 2023 and 2022 for services provided by each named executive officer serving in the capacity listed. | | (2) Represents amounts paid for annual performance-based bonus related to operations for the prior year. | | (3) “All Other Compensation” includes Company matching contributions to the 401(k) plan in the amounts of $11,982 and $12,200 for the years 2023 and 2022, respectively. | | (4) “All Other Compensation” includes Company matching contribution to the 401(k) plan in the amount of $6,292 for the year 2023. |

  16. Summary Compensation Table

    The following table sets forth information for the named executive officers regarding any common share purchase options, stock awards or equity incentive plan awards that were outstanding as of December 31, 2023.

  17. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End

  18. Outstanding Equity Awards at Fiscal Year-End

    | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($/Sh) | Option Expiration Date | Number of Shares or Units of Stock that have not Vested (#) | Market Value of Shares or Units of Stock that have not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not Vested | | Ashley B. Smith | — | — | — | — | — | — | — | — | | Stephanie Poe | — | — | — | — | — | — | — | — | | TOTAL | — | — | | | — | — | — | — |

  19. Outstanding Equity Awards at Fiscal Year-End

    Employment Contracts and Termination of Employment and Change in Control Arrangements. The Company has entered into an employment agreement (the “Employment Agreement”), dated as of November 11, 2020, with Ashley B. Smith pursuant to which Mr. Smith serves as the Chief Executive Officer and President of the Company. The Employment Agreement was initially for a term of three years commencing on November 11, 2020 (the “Effective Date”) through and including November 10, 2023 (the “Employment Period”). Commencing on the first anniversary of the Effective Date, and on each annual anniversary thereafter (such date and each annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless previously terminated, the Employment Period shall be automatically extended so as to terminate three years from such Renewal Date, unless at least 180 days prior to the Renewal Date the Company shall give notice to Mr. Smith, or Mr. Smith shall give notice to the Company, that the Employment Period shall not be so extended. The Employment Agreement provided for an initial base salary (“Base Salary”) of $300,000 per year, with an increase of no less than 3% per annum, based on advice provided by a compensation consultant in 2019. Mr. Smith’s Base Salary shall be reviewed annually by the Compensation Committee of the Board of Directors (the “Compensation Committee”) pursuant to its normal performance review policies for senior executives and may be increased but not decreased. Mr. Smith is also entitled to receive an annual bonus incentive payment (the “Incentive Bonus Payment”) as determined by the Compensation Committee in its discretion and, if applicable, in accordance with the terms of any applicable incentive plan of the Company and subject to the achievement of any performance goals established by the Compensation Committee with respect to such fiscal year. Mr. Smith shall also be eligible to participate in long term cash and equity incentive plans and programs applicable to senior officers of the Company. The Employment Agreement further provides that if Mr. Smith is terminated by the Company without Cause or leaves the Company with Good Reason (generally, for material diminution in Mr. Smith’s Base Salary, target Incentive Bonus Payment, or position, authority, duties or responsibilities, relocation of Mr. Smith’s principal place of business to a location more than 30 miles from Mr. Smith’s principal place of business or material breach by the Company of the Employment Agreement), Mr. Smith shall be paid his Base Salary pro-rated through the date of termination, any Incentive Bonus Payment earned for a prior award period but not yet paid, any accrued vacation or paid time off to the extent not paid and unreimbursed business expenses (collectively, the “Accrued Obligations”) and any other amounts or benefits required to be paid or provided or which Mr. Smith is eligible to receive through the date of termination (the “Other Benefits”). In the event such termination occurs within two years following a change of control, Mr. Smith shall also be entitled to a lump sum payment equal to the product of (a) 2.99 multiplied by (b) the sum of Mr. Smith’s Base Salary in effect prior to such termination and the Target Incentive Bonus Payment for the year of termination of employment (or, if higher, or if no Target Incentive Bonus Payment has been established for such year, the Incentive Bonus Payment for the year prior to the date of termination). In the event such termination does not occur within two years following a change of control, Mr. Smith shall be entitled to receive an aggregate amount, payable in equal monthly cash payments over a period of 24 months, equal to the product of (a) 2.0 multiplied by (b) the sum of Mr. Smith’s Base Salary in effect prior to such termination and the Target Incentive Bonus Payment for the year of termination of employment (or, if higher, or if no Target Incentive Bonus Payment has been established for such year, the Incentive Bonus Payment for the year prior to the date of termination). The Company shall also continue to provide Mr. Smith and his dependents with health and other insurance coverage for 24 months following such termination. If Mr. Smith’s employment is terminated for Cause, because Mr. Smith voluntarily resigns without Good Reason or due to the death of Mr. Smith, Mr. Smith, or his estate, as applicable, shall be paid the Accrued Obligations and the Other Benefits. If Mr. Smith’s employment is terminated due to disability, Mr. Smith shall be paid his Base Salary in equal monthly payments for one year commencing on the date of termination, the Target Incentive Bonus Payment for the year of termination of employment (or, if no Target Incentive Bonus Payment has been established for such year, the Incentive Bonus Payment for the year prior to the date of termination), the Accrued Obligations and the Other Benefits. Mr. Smith is also subject to non-competition and non-solicitation restrictions during the Employment Period and for a period of two years thereafter. The Company entered into a Change of Control Severance Agreement, dated as of January 8, 2024, with Stephanie Poe, the Company’s Chief Financial Officer, Secretary and Treasurer. The Severance Agreement provides that, in the event of departure of Ms. Poe, upon Ms. Poe’s last day of employment with the Company (the “Termination Date”), Ms. Poe shall receive her accrued but unpaid Base Pay and vacation along with reimbursement for valid business expenses and any vested Employee Benefits, regardless of whether Ms. Poe signs a release of claims against the Company (a “Release”). In addition, if Ms. Poe sustains a Qualifying Termination (the Company terminates Ms. Poe without Cause or Ms. Poe leaves the Company for Good Reason (generally, for material diminution in Ms. Poe’s Base Pay, or position, authority, duties or responsibilities, relocation of Ms. Poe’s principal place of business to a location more than 30 miles from Ms. Poe’s principal place of business or material breach by the Company of the Severance Agreement)) and executes and delivers a Release to the Company, the Company shall provide Ms. Poe with cash payments equal to one year of Base Pay, payable in substantially equal monthly installments over the twelve (12) month period following the Termination Date. For a twelve (12) month period, the Company shall also continue to provide Ms. Poe with Employee Benefits that are reasonably equivalent (and at the same cost to Ms. Poe) to the Employee Benefits provided to Ms. Poe immediately prior to the Termination Date and Ms. Poe shall be entitled to receive a single lump sum cash payment equal to the average of her prior three (3) year annual cash bonuses. In addition, if Ms. Poe’s Qualifying Termination occurs within 24 months following a Change in Control, as of the effective date of the Release, all of Ms. Poe’s (i) outstanding and unvested stock options shall become fully vested and exercisable and (ii) outstanding and unvested time-based restricted stock units shall become fully vested. Ms. Poe is also subject to non-competition and non-solicitation restrictions during her employment with the Company and for a period of one year after the Termination Date. The Company has an agreement with its former Chief Executive Officer and former Chairman of the Board, Rodney I. Smith. Mr. Smith ceased providing services as Chief Executive Officer in May 2018. The agreement provides for an annual royalty fee of $99,000 payable as consideration for his assignment to the Company of all of Mr. Smith’s rights, title and interest in certain patents. Payment of the royalty continues for as long as the Company is using the inventions underlying the patents. Mr. Smith is currently being compensated with respect to royalty payments in accordance with the agreement.

  20. Pay Versus Performance

    Pay Versus Performance 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 our sole Non-PEO named executive officer (“NEO”) 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.

  21. Pay Versus Performance

    | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (1)(2)(3) | Summary Compensation Table Total for Sole Non-PEO NEO (1) | Compensation Actually Paid to Sole Non-PEO NEO (1)(2)(3) | Value of Initial Fixed $100 Investment Based on TSR (4) | Net Income | | 2023 | $365,191 | $665,971 | $163,582 | $163,507 | $418 | $795,000 | | 2022 | $489,225 | $(101,387) | $230,725 | $(5,115) | $262 | $800,000 | | 2021 | $745,440 | $1,652,666 | $387,190 | $838,430 | $497 | $7,570,000 |

  22. Pay Versus Performance

    | (1) The PEO for fiscal years 2023, 2022, and 2021 was Ashley B. Smith. The sole non-PEO NEO for fiscal year 2023 was Stephanie Poe and for fiscal year 2022 and 2021 was Adam J. Krick, the Company’s former Chief Financial Officer. | | (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 and Non-PEO in each of 2023, 2022, and 2021, the following adjustments were made to the PEO’s and Non-PEO NEO Summary Compensation Table Total for each respective year: |

  23. Pay Versus Performance

    | | 2023 | | 2022 | | 2021 | | | Elements Subtracted/Added to Calculate Compensation Actually Paid | PEO | Non-PEO NEO | PEO | Non-PEO NEO | PEO | Non-PEO NEO | | Summary Compensation Table Total | $365,192 | $163,582 | $489,225 | $230,725 | $745,440 | $387,190 | | Plus fair value of equity compensation granted in the current fiscal year outstanding and unvested at the end of the current fiscal year and valued at the end of the current fiscal year | — | — | — | — | 902,541 | 418,817 | | (Minus) Fair value of equity compensation granted in current fiscal year outstanding and unvested at the end of the current fiscal year shown in the Summary Compensation Table | — | — | — | — | (275,446) | (135,667) | | Change in fair value from the end of the prior fiscal year of equity compensation outstanding and unvested at the end of the current fiscal year for equity awards granted in prior fiscal years | 301,530 | — | (464,704) | — | 125,154 | 75,100 | | Plus fair value as of the vesting date of equity compensation granted and vested in the current fiscal year | — | — | — | — | 29,283 | 17,890 | | Change in fair value from the end of the prior fiscal year to the vesting date of any equity compensation granted in prior fiscal years and vested in the current fiscal year | (750) | (75) | (126,359) | (75,800) | 125,124 | 75,100 | | (Minus) fair value of equity forfeited in the current fiscal year | — | — | — | (160,040) | — | — | | Compensation Actually Paid | $665,971 | $163,507 | $(101,837) | $(5,115) | 1,652,666 | 838,430 |

  24. Pay Versus Performance

    | (4) Total Shareholder Return (“TSR”) is cumulative for the measurement periods beginning on December 31, 2020 and ending on the last fiscal day in 2023, 2022, and 2021 respectively, calculated in accordance with Item 201(e) of Regulation S-K. |

  25. Pay Versus Performance

    Overall, Compensation Actually Paid (“CAP”) tracked very closely with the Company’s stock price, which has primarily driven the fluctuations in our CAP values as shown above. For fiscal 2023, CAP was significantly higher than the Summary Compensation Table (“SCT”) Total due to the high volatility (increase) in stock price at the end of fiscal year 2023 from the end of fiscal year 2022. In fiscal year 2022, CAP was significantly lower than the SCT total and lower than the respective CAP values in fiscal 2021 due to the Company’s decrease in stock price performance in 2022 from 2021. In fiscal year 2022, CAP was significantly lower than the SCT total and lower than the respective CAP values in fiscal 2021 due to the Company’s decrease in stock price performance in 2022 from 2021. The increase in the Company’s stock price that contributed significantly to the CAP in fiscal 2023 also drove the Company’s TSR as of the end of fiscal year 2023. The decrease in the Company’s stock price that contributed significantly to the lower CAP in fiscal 2022 also drove the reduction in the Company’s TSR. The close relationship between TSR and CAP was evident across the fiscal years in the table above. Our CAP at the end of fiscal 2023 significantly increased as a direct result of our strong TSR through the end of fiscal 2023. Through fiscal 2022, our TSR decreased (although still greater than the initial fixed $100 investment), and the CAP to our NEOs declined significantly. Through fiscal 2022, our TSR decreased, which led to our CAP values declining relative to fiscal 2022 SCT totals. Our net income was not as strongly correlated with CAP given a significant portion of our executive compensation program is granted in equity, thereby directly tied to our stock price performance. However, in fiscal 2023, our net income performance was the strongest and the CAP values to our NEOs were the highest. The increase in net income from fiscal 2022 to 2023 was also aligned with an increase in CAP over this period.