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INFORMATION CONCERNING THE ANNUAL MEETING
Who can attend the annual meeting?
Annual Meeting?
All shareholders of Astronics Corporation who owned shares of record on April 5, 20214, 2023 may attend the meeting.Annual Meeting. If you want to vote in person and you hold Astronics Corporation common stockCommon Stock in street name (i.e., your shares are held in the name of a brokerage firm, bank or other nominee), you must obtain a proxy card issued in your name from your
broker and bring that proxy card to the meeting,Annual Meeting, together with a copy of
a brokerage statement reflecting your stock ownership as of the record date, and valid identification. If you hold stock in street name and want to attend the meetingAnnual Meeting but not vote in person at the meeting,Annual Meeting, you must bring a copy of a brokerage statement reflectinglegal proxy issued to you by your stock ownership as of the record date,broker or nominee and valid identification.
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PROXY SUMMARY
ENVIRONMENTAL, SOCIAL AND GOVERNANCE HIGHLIGHTS
ENVIRONMENT
Environmental Approach
Astronics is committed to minimizing the impact of its activities on the environment. The Company maintains a variety of formal policies and procedures related to protection of the environment, energy conservation and waste management, as well as general business practices that are part of its culture. These policies and procedures are specific to each subsidiary. In most instances, these policies and practices are embedded in Astronics’ Employee Handbook. Employees must certify – in many cases annually -- that they have read and will comply with the Employee Handbook. In fact, Astronics’ PECO facility is a Zero Liquid Discharge facility.
In addition, when considering an acquisition or partnership, the Company embeds questions specific to the environmentenvironmental matters within its due diligence approach. These include claims, policies, certifications and procedures relative to environmental management. Astronics Corporation asks these in an effort to both promote positive environmental policies and practices as well as to minimize any risk when assessing the acquisition candidate.
While Astronics does not currently track environmental metrics on a company-wide basis, the Company recognizes the value and importance of reducing its impact on the global environment.
Certifications and Training
One of the Company’s largest operations, Astronics Connectivity Systems & Certification Corp., is certified to and Astronics Advanced Electronic Systems Corp. have processes that comply with the requirements of ISO-14001, the international standard for effective environmental management, while its largest operation, Astronics Advanced Electronic Systems Corp., has processes that comply with the requirements for ISO-14001 certification.management.
Regardless of the formal certification, mostMost of the Company’s operations maintain formal programs that establish goals and measure progress towards those goals regarding reductions and disposal of hazardous substances, recycling and minimization of power consumption, among other efforts. In those operations that are not ISO-14001 certified,compliant, Astronics meets or exceeds all applicable environmental laws and
regulations by maintaining many initiatives and practices that reduce its impact on the
environment. Some examples of such initiatives and practices include policies to reduce paper, policies to reduce single occupancy commuting, replacement of older, less-efficient lighting with energy efficient motion-based LED lighting, active waste recycling, water consumption reduction programs, and providing electric car recharging stations and bicycle storage at its largest operation.
Each subsidiary is expected to conduct both government/regulatory mandated training as well as professional development training, depending upon that subsidiary’s areas of expertise. Specific certifications may be found at each subsidiary website: https://www.astronics.com/subsidiaries.
While Astronics Corporation does not have a separate vendor code of conduct, as part of its contracts, the Company Code of Conduct requires that its vendors adhere to the spirit of its Code of Ethics (see Social/Human Capital Management). In addition, language to this effect is often included in the Terms and
and Conditions portion of the Company’s contracts with suppliers and customers. When required as part of an agreement, Astronics Corporation has signed a customer’s Code of Conduct.
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Astronics strives to maintain the integrity of its supply chain to the best of its ability and, to date, the Company has not had a significant supply chain disruption.ability. Astronics Corporation files Form SD Conflict Minerals Disclosure to be compliant with SEC regulations and, in many instances, the Company also is
also is required to comply with government standards in evaluating and choosing suppliers. Each subsidiary works with its suppliers to determine if legal and regulatory requirements are met.
Astronics will complycomplies with all applicable conflict minerals regulations, including the US Securities and Exchange Commission’s Conflict Minerals Rule and the European Union’s Conflict Minerals Regulation.
Astronics’ Conflict Minerals Policy is to only use tin, tungsten, tantalum, or gold whose source can be traced to scrap/recycled materials or smelters and refiners that are conformant with the Responsible Minerals Initiative‘sInitiative’s (RMI) Responsible Minerals Assurance Process (RMAP). Astronics encourages the use of responsibly mined minerals from the Democratic Republic of the Congo and adjoining countries.
To ensure compliance with this policy, Astronics has put in place procedures that conform with the Five-Step Framework
for Risk-Based Due Diligence as described in OECD Due
Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
Astronics’ standard purchase order terms and conditions require our suppliers to adapt a conflict minerals policy similar to Astronics and to provide Astronics each year with an updated Conflict Minerals Reporting Template (CMRT), the industry-standard reporting form published by the RMI.
A copy of Astronics’ current Form SD may be found on its website at www.astronics.com/about/conflict-minerals.
While Astronics Corporation does not currently track environmental metrics on a company-wide basis, the Company recognizes the value and importance of reducing its impact on the global environment.
SOCIAL / HUMAN CAPITAL MANAGEMENT
Human Capital Management and Corporate Culture
Astronics Corporation greatly values its employees and recognizes that, without them, the Company would not have achieved the success it has accomplished since inception. Astronics strives to provide a positive, supportive work culture with a clear global vision and a collaborative work style. The Company strongly believes that a focus on learning and supporting career development can lead to success. With low attrition and high referral rates, Astronics Corporation regularly earns “best employer” awards.
As it relates to customers, investors, suppliers and partners, the Company is dedicated to conducting business with integrity and responsibility for the greater good. Astronics Corporation promotes honest and ethical conduct, compliance with applicable government regulations and accountability by
all of its directors, officers and employees.
When considering an acquisition or partnership, the Company embeds questions specific to human capital management within its due diligence approach. These questions are in the areas of culture, equal employment opportunity, compliance with governing bodies, ethics, as well as employee benefits. Astronics Corporation asks these in an effort to ensure that the acquisition candidate is a positive cultural fit and to minimize any risk when assessing the acquisition candidate.
Relative to collective bargaining agreements, the Company has hourly production employees at PECO who are subject to collective bargaining agreements. Astronics Corporation considers its relations with all of its employees to be good.
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Astronics Corporation’s Corporate Governance Guidelines outline expectations that the Board establish and promote policies that encourage a positive, supportive work culture. The Board recognizes that culture is critical to the
long-term success of Astronics and its strategy. Therefore, the policies referenced herein apply to the Board as well as to relationships among and between the Board and employees.
The lifeblood of any organization is its employee base. Astronics relies on its individual subsidiaries to regularly gather employee feedback, using the method each subsidiary believes is most appropriate. In some instances that feedback is obtained through “Town Hall” formats; in other instances
it is obtained through surveys. However the feedback is collected, the Company expects its managers to solicit and, where applicable, use employee feedback to improve its business practices and working environment.
Astronics believes that diversity and inclusion is critical for the attraction and retention of top talent. The Company employs policies and procedures to recruit women and minority talent as well as policies to ensure pay equality. Astronics Corporation has an Equal Employment Opportunity Policy whereby the Company commits to providing equal employment opportunity
for all qualified employees and applicants without regard to race,
color, sex, sexual orientation, gender identity, religion, national origin, disability, veteran status, age, marital status, pregnancy, genetic information or other legally protected status. This policy is posted on the Astronics Corporation website at https://www.astronics.com/docs/default-source/atro-legal/careers/equal-employment-opportunity-policy.pdfcareers.
Certifications and Training
The Board of Directors has adopted a Code of Business Conduct and Ethics that is applicable to its Chief Executive Officer and Chief Financial Officer as well as all other directors, officers and employees of the Company. The Company will disclose any amendment to this Code of Business Conduct and Ethics or waiver offrom a provision of thisits Code of Business Conduct and Ethics that applies to the Company’s Chief Executive Officer, Chief Financial Officer or Principal Accounting Officer or Controller, including the name of anysuch person to whom the waiver was granted, on its website.
Further, the Company has a policy on Combatting Human Trafficking to ensure that employees, agents and suppliers of the Company do not engage in human trafficking or human trafficking activities.
The Company’s explicit statement
regarding not tolerating human trafficking can be found at https://investors.astronics.com/corporate-governance/governance-documents.corporate-governance/governance-documents.
Each subsidiary is expected to conduct both government/regulatory mandated training as well as professional development training, depending upon that subsidiary’s areas of expertise. The Company requires all of its employees to certify that they have read and understood the Code of Ethics. Based upon the needs of, and regulations associated with, each of the Company’s businesses, Astronics Corporation requires training for both regulatory and corporate compliance purposes.
Astronics is committed to the safety of its customers and its employees. Each Astronics operation maintains environmental, health and safety policies that seek to promote the operation of its businesses in a manner that is protective of the health
and safety of the public and its employees. In fact, Astronics Luminescent Systems Inc. has received safety awards from the State of New Hampshire for working more than a year without a lost time accident.
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Astronics Corporation’s operations offer several health and welfare programs to employees to promote fitness and wellness and
to encourage preventative healthcare. In addition, Astronics’ employees are offered a confidential employee
assistance program that provides professional counseling to employees and their family members. Also, many of the Company’s operations offer greenspace for employees to use during their breaks.
It is Astronics’ intention to provide a safe, healthy working environment for its employees, to the extent possible. To achieve this, the Company has created the following policies,
someall of which are available publicly, as indicated, some of which are internal to the organization:
| • | Code of Business Conduct and Ethics: https://www.astronics.com/about/corporate-responsibilitydocs/default-source/atro-legal/code-of-ethics |
| • | Statement on Human Trafficking: https://investors.astronics.com/corporate-governance/governance-documents |
| • | EEOC policy: https://www.astronics.com/docs/default-source/atro-legal/careers/equal-employment-opportunity-policy.pdfcareers |
| • | Affirmative Action Policy:https://www.astronics.com/docs/default-source/atro-legal/careers/affirmative-action-policy.pdf?sfvrsn=5908a958_2careers |
| • | Drug-free workplace statement: https://www.astronics.com/docs/default-source/atro-legal/code-of-ethics |
| • | Improper conduct/discrimination/harassment statement: https://www.astronics.com/docs/default-source/atro-legal/code-of-ethics |
| • | Health and Safety statement: https://www.astronics.com/docs/default-source/atro-legal/code-of-ethics |
| • | Whistleblower (Reporting and Effect of Violations) statement: https://www.astronics.com/docs/default-source/atro-legal/code-of-ethicsatro-legal/code- of-ethics |
Additional documents and policies may be found at: https://investors.astronics.com/corporate-governance/governance-documents.
Benefits
Astronics offers a generous benefits program for its employees. The Company provides a drug-free work environment and
requires drug screening of all candidates accepting employment.
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Astronics Corporation is proud to have received numerous awards, recognizing both product quality as well as the Company’s ability to provide an excellent work environment.
A few of these awards include: 9th Best Large Company to Work For as part of Washington’s Best 100 Places to Work for 2022 by Seattle’s Business Magazine (included in 13 of last 16 years); 2021 America by Design: People’s Choice Award; 2020 Crain’s List: Chicago’s Largest Research and Development Labs; 2019 GOOD DESIGN Award; APEX 2019 Best Cabin Innovation Award; General Atomics Supplier
Excellence Award (2016, 2017, Supplier Excellence Award; Ballard Technology 2018 Supplier Excellence Award;2018); Washington’s 100 Best Companies to Work For; Tech Briefs 2017 Product of the Year; Chicago’s
101 Best and Brightest Companies to Work For;For (2021 and 2022); Intel Supplier Continuous Quality Improvement; 2017 and 2018 Military & Aerospace Electronics Innovators Awards-Platinum; 2018 Global Technology Award; 2018, 2019 and 20202014-2022 Top Workplace Award-Orange County Register (seven(eight consecutive years) and 2021 Top Workplace Manufacturing (National).
Customer feedback is critically important to advancing initiatives and improving service levels. To accomplish this, the Company actively seeks customer feedback on an ongoing basis, relying upon each subsidiary to engage as that business
sees fit. Customer feedback mechanisms employed by Astronics subsidiaries routinely include the use of customer “scorecards” as well as soliciting input through ongoing discussions.
Astronics’ employees participate in numerous community engagement activities. Astronics supports and encourages its employees to be active and participate in local charitable activities and believes that the employee should choose to support the organization which means the most to her/him.him/them. The Company supports its employees at the subsidiary level,
subsidiary level, providing them with needed time off and, at times with matching donations, to engage with the charities of their choice. Those charities have included supporting local food banks and Marine Corps Toys for Tots. For more information, please click on each of the Company’s individual subsidiaries at https://www.astronics.com/careers.
Information security is critical to the Company’s operations around the world. We employ industry-leading security practices, while leveraging software and product security engineering to protect our networks, systems and information from cyber threats. Our cybersecurity strategy prioritizes detection, analysis and response to known, anticipated or unexpected cyber threats, effective management of cyber risks, and resilience against cyber incidents. We continuously strive to exceed industry best practices and implement risk-based controls to protect our partners’ and the Company’s information and information systems. In order to protect both commercial and defense-related businesses and support our production operations, the Company has adopted security principles in accordance with the National Institute of Standards and Technology Cybersecurity Framework, contractual requirements and other global standards. We also leverage
industry and government associations, third-party benchmarking, audits, and threat intelligence feeds, among other things, to ensure the effectiveness of our cybersecurity efforts and proactively allocate resources.
The Company’s Director of Information Technology provides a report to the Board of Directors on an annual basis, or more frequently as needed, with respect to information security activity, security assessments, controls and investments.
The Company has in place a Cyber Risk Liability Insurance policy written by the Traveler’s for a twelve-month term expiring July 1, 2023. The twelve-month premium was $63,983. The policy has a limit of $3 million in the aggregate and provides coverage related to data breaches and other cyber security measures.
GOVERNANCE
Corporate Responsibility
Astronics Corporation is dedicated to conducting business with integrity and responsibility for the greater good.responsibility. The Company promotes honest and ethical conduct, compliance with applicable government regulations and accountability by all of its directors, officers and employees. The Company’s Board has adopted Corporate Governance Guidelines and a Code of Business Conduct and Ethics which, in conjunction with Board committee charters, form the framework for its governance and is applicable to its directors and all employees. The Board regularly reviews corporate governance developments and modifies its Corporate Governance Guidelines, committee charters and key policies as warranted. The Company will disclose on its website any amendment to its Code of Business Conduct and Ethics or waiver offrom a provision of this Code of Business Conduct and Ethics that applies to the Company’s Chief Executive Officer, Chief
Financial Officer or Principal Accounting Officer or Controller, including the name of anysuch person to whom the waiver is granted. Astronics Corporation’s business is conducted by its employees, managers and officers, under the direction of the Chief Executive Officer (CEO) and the oversight of the Board, to enhance the long-term value of Astronics Corporation for its shareholders. The Board of Directors stands in a fiduciary relation to the corporationCompany and, in discharging these fiduciary duties, Directorsdirectors shall act in a manner that they reasonably believe to be in the best long-term interests of the Company, in particular, the interests of the shareholders. The Board recognizes that the interests of the Company and its shareholders are advanced when they take into account the concerns of and the effect of any action upon employees, suppliers, customers, the communities in which operations are established, and other pertinent factors.
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Governance Highlights
| | | | | Supermajority of independent directors | |
| | | | | Independent Board Committees | |
| | | | | Annual Board member election | |
| | | | | Require double-trigger for equity acceleration under employment termination benefit agreements upon a change in control | |
| | | | | Maintain a competitive compensation package | |
| | | | | Strong lead independent director role and responsibilities | |
| | | | | Require stock ownership for the Board of Directors | |
| | | | | Annual Board and Committee self-evaluations | |
| | | | | Strategy and risk oversight by full Board | |
| | | | | Board and Committees have the right to retain independent outside financial, legal or other advisors | |
| | | | | Director “overboarding” limits | |
| | | | | Regular executive sessions of independent directors | |
| | | | | CEO succession plan | |
Astronics has several policies and charters to guide the conduct and action of the Company’s employees and Board of Directors. Some of the Company’s policies contain sensitive
information and are not made public, such as our policies on Social Media and Cybersecurity. Website links for those that are available to the public follow as indicated:
| • | Audit Committee Charter:
|
https://investors.astronics.com/corporate-governance/governance-documents
Compensation Committee Charter:
https://investors.astronics.com/corporate-governance/governance-documents
Nominating/Governance Committee Charter:
https://investors.astronics.com/corporate-governance/governance-documents
Corporate Governance Guidelines:
https://investors.astronics.com/corporate-governance/governance-documents
| • | Compensation Committee Charter:
|
https://investors.astronics.com/corporate-governance/governance-documents
| • | Nominating/Governance Committee Charter:
|
https://investors.astronics.com/corporate-governance/governance-documents
| • | Sustainability Committee Chater:
|
https://investors.astronics.com/corporate-governance/governance-documents
| • | Corporate Governance Guidelines:
|
https://investors.astronics.com/corporate-governance/governance-documents
| • | Political contributions statement: https://www.astronics.com/docs/default-source/atro-legal/code-of-ethics |
Social media policy
Cybersecurity policy; compliant with NIST 800-171
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PROPOSAL 1: ELECTION OF DIRECTORS
| | | | | THE BOARD RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES.
Nominees for Director Nominated by the Board of Directors for Terms Expiring in 20222024 | |
New Board Developments since the 2022 Proxy Statement
On February 24, 2023, Ms. Linda O’Brien joined the Board of Directors of Astronics Corporation.
Mr. Raymond Boushie was not nominated for re-election
at the Annual Meeting. Mr. Boushie has served on the Board since 2005. The Company and the Board of Directors are grateful for his service.
Astronics Corporation’s By-Laws, as amended, provide that the Board of Directors shall be composed of not less than three nor more than nine persons, as determined by the Board of Directors. Currently, the Board includes nine members, elected at each annual meetingAnnual Meeting of shareholders and who serve for a term of one year or until their successors are duly elected and qualified.
Each ofDirector Raymond Boushie will not stand for re-election at the Directors attended at least 75%Annual Meeting. As a result, there would be one vacancy on the Board following the Annual Meeting. However, the Nominating/ Governance Committee has recommended to the Board, and the Board has approved, a reduction in the size of the Board meetings held in 2020. With the exception of Peter Gundermann, eachas of the nominees is independent within the meaning of the NASDAQ Stock Market, LLC director independence standards as currently in effect.Annual Meeting from nine members to eight members.
Unless instructions to the contrary are received, it is intended that the shares represented by proxies will be voted for the election as Directors of Raymond W. Boushie, Robert T. Brady, Tonit M. Calaway, Jeffry D. Frisby, Peter J. Gundermann, Warren C. Johnson, Robert S. Keane, Neil Y. Kim, and Mark Moran, and Linda G. O’Brien, each of whom has been previously elected by Astronics Corporation shareholders.shareholders other than Ms. O’Brien. Ms. O’Brien was recommended to the Nominating/Governance Committee for consideration as a director by a non-management director. If any of these nominees should become unavailable for election for any reason, it is intended that the shares represented by the proxies solicited herewith will be voted for such other person as the Board of Directors shall designate. The Board of Directors has no reason to believe that any of these nominees will be unable or unwilling to serve if elected to office. The following information is provided concerning the nominees for director:
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PROPOSAL 1: ELECTION OF DIRECTORS
Included in the information below are current directors and/or director nominees of the Company who are presently serving, or have served during the preceding five years, on boards of directors of other publicly traded companies.
Raymond W. Boushie, 81
Compensation (Co-Chair) and Audit Committees; Director since 2005
Experience
Raymond W. Boushie retired in 2005 as President and Chief Executive Officer at Crane Co.’s Aerospace & Electronics segment, a position he had held since 1999. Previously he was President of Crane’s Hydro-Aire operation. Mr. Boushie has a B.A. from Colgate University, and has completed graduate work at the University of Michigan and the Wharton School of Finance at the University of Pennsylvania. Mr. Boushie has over 40 years of Aerospace industry experience.
Skills and Qualifications
Mr. Boushie’s past experience as President and CEO of a leading aerospace and electronics business has provided him with extensive management experience within the same industry as Astronics Corporation. His more than 40 years in the aerospace industry provide the Company with institutional knowledge and context that is extremely valuable regarding long-term strategy. This also includes his experience as past Chairman of several important industry associations – General Managers Council, Manufacturers Alliance; General Aviation Manufacturers Association; and the Aerospace Industries Association. In addition, his financial qualifications and ongoing education make him a strong asset to the Audit Committee.
Robert T. Brady, 8082
Lead Independent Director; Audit (Chair) and Nominating/GovernanceSustainability Committees; Director since 1990
Experience
Robert T. Brady retired in January 2014 as the Chairman of the Board of Moog Inc., a publicly traded company that is a designer and manufacturer of high performance motion and control systems for use in aerospace, defense, industrial and medical markets. Mr. Brady was Chief Executive Officer of Moog Inc. from 1988 to December 1, 2011, Chairman of the Board from 1996 until his retirement, and a director of Moog Inc. from 1984 until January 2014. Prior to joining Moog in 1966, Mr. Brady served as an officer in the U.S. Navy. Mr. Brady received his B.S. in Mechanical Engineering from the Massachusetts Institute of Technology and his M.B.A. from Harvard Business School.
Other Public Board Memberships
Director, M&T Bank Corporation
Skills and Qualifications
Mr. Brady’s past experience as Chairman of Moog Inc. and as director of other public companies provides Astronics Corporation with valuable insight into governance trends and metrics. Similarly, Mr. Brady’s former experience as CEO of Moog Inc. has provided him with extensive management experience within the same industry as Astronics Corporation. His institutional knowledge of the aerospace and defense industry provides helpful context in creating the Company’s long-term strategy. In addition, his financial qualifications and ongoing education make him a strong asset to the Audit Committee.
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PROPOSAL 1: ELECTION OF DIRECTORS
Tonit M. Calaway, 53
Director; Compensation (Co-Chair) and Nominating/Governance Committees; Director since 2019
Experience
Tonit M. Calaway has served as Executive Vice President, Chief Administrative Officer, General Counsel and Secretary of BorgWarner Inc. since October 2020. Prior to that she served as Chief Legal Officer, Executive Vice President and Secretary of BorgWarner Inc. from August 2018. Previously, Ms. Calaway served as Executive Vice President and Chief Human Resources Officer from 2016 to August 2018. Before joining BorgWarner, Ms. Calaway held various positions during her 18-year career at Harley-Davidson, Inc., including Vice President of Human Resources and President of The Harley-Davidson Foundation. A securities attorney by training, Ms. Calaway rose through the legal department, serving as Associate General Counsel - Motor Company Operations, Assistant General Counsel, Chief Compliance Counsel, and Assistant Secretary. Ms. Calaway is a graduate of the University of Wisconsin - Milwaukee, and received her juris doctorate from the University of Chicago Law School. She is a member of the State Bar of Wisconsin.
Other Public Company Board Memberships
W.P. Carey Inc.
Skills and Qualifications
Ms. Calaway brings deep legal expertise in addition to strong management leadership experience as a member of the Executive team for a large Fortune 500 company. In addition, Ms. Calaway played a significant role in modernizing Borg Warner’s business practices and strengthening its relationships with key stakeholders, and excels at driving transformational change. She has deep experience in designing compensation programs, interfacing with collective bargaining groups, and in building consensus. Her skillsets are particularly valuable in her role as Co-Chair of the Compensation Committee and her role on the Nominating/Governance Committee.
Jeffry D. Frisby, 6567
Director; Nominating/GovernanceSustainability (Chair) and Audit Committees; Director since 2016
Experience
Jeffry D. Frisby serves as the President and Chief Executive OfficerChairman of PCX Aerostructures, LLC, primarily a supplier of flight critical mechanical systems and assemblies, including rotor heads, complex shaftslanding gear and related components.external fuel tanks. He was President and Chief Executive Officer of PCX Aerostructures, LLC from April 2017 until September 2021. Previously, Mr. Frisby was Chief Executive Officer of Triumph Group, Inc., a publicly traded company that is a global leader in manufacturing and overhauling aerospace structures, systems and components, from July 2012 until April 2015, and its President from July 2009 until April 2015. Mr. Frisby served as Triumph’s Chief Operating Officer from July 2009 to July 2012. Previously, he had been Group President of Triumph Aerospace Systems Group, a group of companies that design, engineer and manufacture a wide range of proprietary and build-to-print components, assemblies and systems for the global aerospace original equipment manufacturers, from April 2003 to July 2009. He also held a variety of other positions within the Triumph Group as well as a predecessor group company, Frisby Aerospace, Inc. Mr. Frisby served as a Director of Triumph Group, Inc. from 2012 to April 2015. Mr. Frisby holds a B.S. in Business from Wake Forest University, Calloway School of Business. Mr. Frisby has over 40 years of Aerospace industry experience.
Other Public Company Board Memberships
Director, Quaker Houghton
Skills and Qualifications
Mr. Frisby brings significant aerospace experience spanning nearly 40 years, in addition to deep executive leadership, M&A and manufacturing expertise from his service as President and CEO of PCX Aerostructures as well as Triumph Group, Inc. Other skills include accounting/finance, financial reporting, industrial marketing, organizational development, global organizations, strategic planning and corporate development. Mr. Frisby brings complementary experience in corporate governance, audit and compensation through his service on the boards of other public and private companies.
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PROPOSAL 1: ELECTION OF DIRECTORS
Peter J. Gundermann, 5860
Chairman of the Board, Director, President and Chief Executive Officer of the Company; Director since 2001
Experience
Peter J. Gundermann has been a director of Astronics since 2001 and has held the position of President and Chief Executive Officer of the Company since 2003. Mr. Gundermann was named Chairman of the Board in June 2019. Mr. Gundermann had previously served as the President of Astronics’ Aerospace and Defense subsidiaries since 1991 and has been with the Company since 1988. He holds a B.A. in Applied Mathematics and Economics from Brown University and earned an M.B.A. from Duke University.
Other Public Company Board Memberships
Director, Moog Inc.
Skills and Qualifications
Mr. Gundermann brings his deep institutional knowledge of the aerospace industry and of Astronics Corporation based on his tenure with the Company of more than thirty years. During this time, he has gained experience in the areas of M&A, finance and accounting, manufacturing and logistics, strategy, product development, customer management, and public company processes.
Warren C. Johnson, 6163
Director, CompensationNominating/Governance and Nominating/GovernanceSustainability Committees; Director since 2016
Experience
Warren C. Johnson served as President of the Aircraft Group for Moog Inc. from 2007 to 2016. Mr. Johnson was Vice President and General Manager of Moog’s Aircraft Group from 1999 to 2007 and prior to that served as Chief Engineer and Military Aircraft Product Line Manager of the Moog Aircraft Group. Mr. Johnson holds a B.S. and M.S. in Mechanical Engineering from The Ohio State University. In 2004, Mr. Johnson completed a Sloan Fellows M.B.A. at the Massachusetts Institute of Technology.
Skills and Qualifications
Mr. Johnson brings noteworthy aerospace experience from his 33-year career at Moog Inc., a worldwide manufacturer of precisionhigh performance motion and control componentssystems for use in aerospace, defense, industrial and systems,medical markets, including leading Moog'sMoog’s efforts to streamline aerospace product development cycle time and lean activities. His experience includes global operations as well as evaluating and integrating acquisition candidates.
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PROPOSAL 1: ELECTION OF DIRECTORS
Robert S. Keane, 5860
Director, Compensation and AuditNominating/Governance Committees; Director since 2019
Experience
Robert S. Keane has served as President and Chief Executive Officer of Cimpress plc since he founded Cimpress in January 1995 and as Chairman of Cimpress plc’s Board of Directors since November 2018. Mr. Keane previously served as Chairman of Cimpress’s former Management Board from September 2009 to November 2018 and as the Chairman of its Board of Directors from January 1995 to August 2009. From 1988 to 1994, Mr. Keane was an executive at Flex-Key Corporation, a former subsidiary of Astronics Corporation. Mr. Keane earned his B.A. in Economics from Harvard College and his MBA from INSEAD (France).
Other Public Company Board Memberships
Chairman, Cimpress plc
Skills and Qualifications
Mr. Keane has extensive experience leading complex, global operations. He has a strong track record of growing successful companies both organically and by acquisition and is very experienced with public company processes. His previous experience with Astronics early in his career gives him a unique insight into the history and culture of the company.Company.
Neil Y. Kim, 6264
Director, Compensation (Chair) and Audit Committees; Director since 2016
Experience
Neil Kim served as Chief Technology Officer and Executive Vice President of Marvell Technology Group Ltd. from April 2017 until his retirement in May 2019. Prior to that, Mr. Kim served as Broadcom Corporation’s Executive Vice President of Operations and Central Engineering until 2016 and was responsible for the company’s global manufacturing including foundry operations, supply chain management and corporate procurement. Mr. Kim joined Broadcom in 2000 and held a variety of senior management positions including Senior Vice President and Vice President of Central Engineering, as well as Senior Vice President of Operations and Engineering. Prior to Broadcom, from 1993 to 2000, Mr. Kim held a variety of senior technical and management positions at Western Digital Corporation, a provider of products and services for storage devices. His roles included Vice President of Engineering, where he managed critical product development and technical transitions. Mr. Kim served on the board of the Global Semiconductor Association from 2009 to 2015. Mr. Kim is named as an inventor on 33 patents. He received a B.S. in Electrical Engineering from the University of California, Berkeley.
Other Public Company Board Memberships
Silicon Laboratories Inc.(1)
(1) Mr. Kim’s term as director of Silicon Laboratories Inc. expired in April 2017.
Skills and Qualifications
Mr. Kim brings deep expertise in global operations, supply chain and manufacturing, as well as executive leadership. In addition to his public and private company Board experience, Mr. Kim has significant experience working for and with global organizations and in identifying, executing and integrating acquisitions.
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PROPOSAL 1: ELECTION OF DIRECTORS
Mark Moran, 6567
Director, CompensationNominating/Governance (Chair) and Nominating/GovernanceCompensation Committees; Director since 2018
Experience
Mark Moran served as the Chief Operations Officer of Continental Airlines prior to his retirement in 2012. He spent 17 years with Continental prior to its acquisition by United Airlines. During his tenure, which included eight years as the head of Operations, Continental grew to the fifth largest U.S.US airline with 2,600 daily flights to over 260 airports. Since his retirement from Continental, Mr. Moran has served as an independent aviation consultant to several multinational OEMs and Tier 1 suppliers to OEMs. Prior to Continental, Mr. Moran served ten years with USAir/Piedmont, and before that, five years with Boeing Corporation. He is a graduate of Marquette University, where he earned a B.S. in Engineering.
Skills and Qualifications Mr. Moran brings strong aerospace experience to the Astronics board due to his career in the commercial airline industry. His perspective as a customer is a unique contribution to our deliberations. The Company is increasingly involved with promoting its products directly to operators, and his in-depth knowledge of airline operations and priorities complements the perspectives of others in the group.
Linda O’Brien, 59
Director; Director since 2023
Experience
Linda G. O’Brien has served as Vice President and Chief Engineer-Aeronautics of Lockheed Martin Aeronautics since September 2021. She was originally employed by Lockheed/General Dynamics from 1986 to 2006, rejoining Lockheed Martin Aeronautics in 2016. At Lockheed, Ms. O’Brien held a variety of positions before assuming her current role, including Program Management Director and Deputy Vice President of ISR and Unmanned Systems (June 2019-September 2021), Engineering Director-Deputy to the Vice President of Engineering and Technology (February 2018-May 2019) and Engineering Director-Chief Engineer of Advanced Pilot Training (April 2016 to February 2018). Prior to Lockheed, Ms. O’Brien was a Senior Program Manager at Sikorsky Aircraft Company and Director of Commercial Programs for Bell Helicopter Textron. Ms. O’Brien holds a B.S. in Mechanical Engineering from the University of Tennessee, a M.S. in Mechanical Engineering from Southern Methodist University and an M.B.A. from Texas Christian University.
Skills and Qualifications
Ms. O’Brien brings over 35 years of strong technical and aerospace industry experience to the Astronics board. Her perspective as an engineer is a unique contribution to our deliberations and complements the perspectives of others in the group.
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BOARD MATTERS
Board of Directors Independence
APursuant to the Nasdaq listing standards, a majority of the Directors shallare required to be independent, as that term is defined by applicable laws and regulations and in the NASDAQNasdaq listing standards. A Director will be considered independent only if the Board has affirmatively determined that the Director has no material relationship with Astronics, either directly or as a partner, shareholder or officer of an organization that has a relationship with Astronics that, based on the requirements of applicable laws and regulations and the NASDAQNasdaq listing standard, would impair his or her independent judgment. NotUnder the terms of the Company’s corporate governance guidelines, not more than three individuals who fail to be determined to be independent Directors shall serve on the Board at any one time, provided, however, that this limitation on the number of non-independent directors shall not require a Director to resign or retire from the Board prior to the expiration of a term to which he or she was duly elected by the shareholders so long as the Board then has a majority of independent Directors.
The Board will annually review all commercial and charitable relationships of Directors to determine if there is a material
relationship that would preclude the Board from making an affirmative determination that an individual Director is independent. To facilitate this review, each non-employee Director will annually provide information regarding the Director’s business and other relationships with Astronics, its affiliates and senior management to enable the Board to evaluate the Director’s independence. This determination will be disclosed in the proxy statement for Astronics Corporation’s annual meeting of shareholders.
The Board of Directors has determined that each of its current directors, except for Mr. Gundermann, is independent within the meaning of the NASDAQNasdaq Stock Market, LLC director independence standards as currently in effect. In addition, each member of the Audit Committee, the Compensation Committee, the Nominating/Governance Committee and the Nominating/GovernanceSustainability Committee is independent.
Board of Directors Ethics and Commitment
Directors shall possess the highest personal and professional ethics and integrity, and, in performance of their duties as directors, shall represent the long-term interests of the shareholders. The Board believes that its membership should reflect a diversity of experience, gender, race and ethnicity. Directors are selected on the basis of experience and personal capacities, including experience in industries similar to Astronics Corporation’s, managerial or other leadership experience; business acumen or particular expertise, business development experience, strategic capability, independence of judgment; familiarity with corporate governance, risk assessment and the responsibilities of directors; standing and reputation as a person of integrity; the potential contribution of each individual to the diversity of backgrounds, experience
and competencies which the Nominating/Governance Committee desires to have represented and ability to work constructively with the CEO and the Board.
Directors must devote sufficient time to carrying out their duties and responsibilities effectively and should be committed to serving on the Board for an extended period of time. Directors are expected to inform the Chairman if there is any significant change in their personal circumstances, including a change in their principal job responsibilities. Directors are expected to attend meetings of the Board and Committees of the Board on which they serve, except for good reason, and be prepared.
Board of Directors Meetings and Standing Committees
The Board of Directors and its committees meet regularly throughout the year and also hold special meetings and act by written consent from time to time as appropriate. All directors are expected to attend each meeting of the Board of Directors
and the committees on which s/he serves, and are also invited, but not required, to attend the Annual Meeting. During the year ended December 31, 2022, the Board of Directors held
eight meetings. Each director attended at least 75% of the total number of meetings of the Board of Directors and the committees on which she/he/they serves held in 2022, other than Mr. Gundermann attended the 2020 Annual Meeting, butBoushie and Mr. Keane. Mr. Boushie was unable to attend at least 75% of such meetings due to travel restrictions related to the COVID-19 pandemic, Ms. Calawayhealth issues.
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andMr. Gundermann attended the 2022 Annual Meeting, but due to the continuing COVID-19 pandemic, Messrs. Boushie, Brady, Frisby, Johnson, Keane, Kim and Moran were unable todid not attend.
The Board of Directors has threefour standing committees: an Audit Committee,Committee; a Compensation Committee,Committee; a Nominating/Governance Committee; and a Nominating/GovernanceSustainability Committee. During the
year ended December 31, 2020, the Board of Directors held six meetings. Each director attended at least 75% of the meetings of the Board of Directors heldThe Sustainability Committee was established in 2020.February 2022.
The Audit Committee consists of Messrs. Brady (Chair), Boushie, Frisby Keane and Kim, each of whom is independent within the meaning of the NASDAQNasdaq Stock Market, LLC director independence standards as currently in effect. The Board of Directors has determined that it has more than oneeach of Messrs. Brady, Boushie and Frisby qualify as an “audit committee financial expert” as defined under federal securities laws serving on its Audit Committee. Information regarding the functions performed by the Committee is set forth in the “Report of the Audit Committee” included in this proxy statement.
The Audit Committee held four meetings in 2020. Each member of the Audit Committee attended at least 75% of the meetings of the Audit Committee held in 2020. 2022.
The Audit Committee is governed by a written charter approved by the Board of Directors that is posted on the “Corporate Governance” section of the Company’s website at https://investors.astronics.com/corporate-governance.
Effective as of the date of the Annual Meeting, the Audit Committee will consist of Messrs. Brady (Chair), Frisby and Kim.
The Compensation Committee consists of Mr.Messrs. Kim (Chair), Boushie, (Co-Chair), Ms. Calaway (Co-Chair), Messrs. Johnson, Keane Kim and Moran, each of whom is independent within the meaning of the NASDAQNasdaq Stock Market, LLC director independence standards as currently in effect. The Compensation Committee is responsible for reviewing and approving compensation levels for the Company’s executive officers and reviewing and making recommendations to the Board of Directors with respect to other matters relating to the compensation practices of the Company. In appropriate circumstances, the Compensation Committee considers the recommendations of the Company’s Chief Executive Officer with respect to reviewing and approving compensation levels
for other executive officers. The Compensation Committee does not use outside compensation
consultants on a regular basis. The Committee may consult broad-based, third-party survey data to obtain a general understanding of current compensation practices of companies of similar size and industry in which the Company competes for employees.
The Compensation Committee held three meetings in 2020. Each of the Compensation Committee members attended at least 75% of the meetings of the Compensation Committee held in 2020. 2022.
The Compensation Committee is governed by a written charter approved by the Board of Directors that is posted on the “Corporate Governance” section of the Company’s website at https://investors.astronics.com/corporate-governance.
Effective as of the date of the Annual Meeting, the Compensation Committee will consist of Messrs. Kim (Chair), Keane and Moran, and Ms. O’Brien.
Nominating/Governance Committee
The Nominating/Governance Committee consists of Mr. FrisbyMoran (Chair), Ms. Calaway, and Messrs. Brady, Johnson and Moran,Keane, each of whom is independent within the meaning of the NASDAQNasdaq Stock Market, LLC director independence standards as currently in effect. The Nominating/Governance Committee is responsible for evaluating and selecting candidates for the Board of Directors and addressing and overseeing corporate governance matters on behalf of the Board of Directors.
In performing its duties to recommend nominees for the Board of Directors, the Nominating/Governance Committee seeks director candidates with the following qualifications, at minimum: high character and integrity; substantial life or work experience that is of particular relevance to the Company; sufficient time available to devote to his or her duties; and ability and willingness to represent the interests of all shareholders rather than any special interest group. The Nominating/Governance Committee may use third-party search
firms to identify Board of Director candidates. It also relies
upon recommendations from a wide variety of its contacts, including current executive officers, directors, community leaders and shareholders, as a source for potential candidates.
Shareholders wishing to submit or nominate candidates for election to the Board of Directors must supply information in writing regarding the candidate to the Nominating/Governance Committee at the Company’s executive offices in East Aurora, New York. This information should include the candidate’s name, biographical data and qualifications. Generally, the Nominating/Governance Committee will conduct a process of making a preliminary assessment of each proposed nominee based upon biographical data and qualifications. This information is evaluated against the criteria described above and the specific needs of the Company at the time. Additional information regarding proposed nominees may be requested. On the basis of the information
gathered in this process, the Nominating/Governance Committee determines which nominees to recommend to the
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Board of Directors. The Nominating/Governance Committee uses the same process for evaluating all nominees, regardless of the source of the recommendation.
The Nominating/Governance Committee held twofour meetings in 2020. Each of the members of the Nominating/Governance
Committee attended at least 75% of the meetings held in 2020.2022. The Nominating/Governance Committee is governed
by a written charter that is posted on the “Corporate Governance” section of the Company’s website at https://investors.astronics.com/corporate-governance.
Effective as of the date of the Annual Meeting, the Nominating/Governance Committee will consist of Messrs. Moran (Chair), Johnson and Keane and Ms. O’Brien.
In February 2022, the Board of Directors established a Sustainability Committee. The Sustainability Committee consists of Messrs. Frisby (Chair), Brady and Johnson. The Sustainability Committee held one meeting in 2022.
The Sustainability Committee is governed by a charter that was adopted on September 8, 2022. The Sustainability
Committee assists the Board in its assessment and evaluation of the Company’s sustainability programs and initiatives pertaining to the Company’s business, operations and employees. The charter is posted on the “Corporate Governance” section of the Company’s website at https://investors.astronics.com/corporate-governance.
Executive Sessions of the Board
Non-managementIndependent directors meet regularly in executive sessions. Non-management directors are all those directors who are not Company employees and includes directors, if any, who are not independent as determined by the Board of Directors. The Company’s non-management directors consist of all of its current directors except Mr. Gundermann. An executive
An executive session of the Company’s non-management directors is generally held in conjunction with each regularly scheduled Board of Directors meeting. Additional executive sessions may be called at the request of the Board of Directors, the Lead Independent Director or the non-management directors.
Role of the Lead Independent Director
In addition to the Chairman, the Board has a Lead Independent Director. Mr. Brady has served in this role since February 2020. The principal role of the Lead Independent Director is to serve as liaison between the Chairman and CEO and the Directors. The specific responsibilities of the Lead Independent Director are, among others, to:
(i) collaborate with the Chairman and CEO to ensure the appropriate flow of information to the Board;
(ii) consult with the Chairman and CEO regarding Board agenda items;
(iii) coordinate and develop the agenda for and preside at executive sessions and sessions of the Board’s independent Directors, and as appropriate, communicate to the Chairman and CEO the substance of the discussions;
(iv) in the absence of the Chairman, act as Chair of meetings of the Board;
(v) recommend, when necessary, special meetings of the Board; and
(vi) act as principal liaison between the Directors and the Chairman and CEO on sensitive issues.
The agenda for each Board meeting shall be established by the Chairman and the Lead Independent Director, and any Director may request items to be included on the agenda. Ample time is scheduled for each Board meeting to assure full discussion of important matters whether included on the agenda or not. Agendas always include financial and operating reports in addition to other reports, such as business unit and subject matter presentations, that could enhance a Director’s perspective and knowledge on various matters. Agenda and meeting materials are distributed in advance of Board and Committee meetings, and each Director has a duty to review the materials prior to the meeting.
Board Refreshment and Experience
The Board is committed to continuous improvement and employs a rigorous process to ensure that the composition of the Board is diverse, balanced and aligned with the evolving needs of the Company. The Board assesses the diversity of the directors’ experience, expertise, perspective, tenure and age, among other attributes, to ensure it has an appropriate mix of skills and experience to fulfill its oversight obligations.
The Board also considers the Company’s long-term strategy when evaluating which specific skills and experience are
required and weighs those skills when evaluating the current and potential directors. As part of the evaluation of the directors’ skills and experience, the Board reviews a director skillset chart which identifies expertise, experience and other characteristics that contribute to an effective and
well-functioningwell- functioning board. The skills and qualifications for each current Director may be found
within their biographies on pages
1214 to
1617.
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Annual Board Evaluation Process
The Board and each of the Committees shall performcommittees performs annual self-evaluations. The Nominating/Governance Committee will developdevelops and conductconducts the Board evaluation and will ensureensures that
that each Committeecommittee of the Board conducts its own self-evaluation. The Board of Directors then reviews this feedback and makes improvements, as necessary.
Limit on Other Directorships
Directors who also serve as CEOs or in equivalent positions should not serve on more than two boards of public companies in addition to the Astronics Board, and other Directors should not serve on more than four other boards of public companies in addition to the Astronics Board. Membership on moreadditional public company boards beyond the limits specified above by a director for exceptional reasons requires approval by the Nominating/Governance Committee or its chairperson. Directors are expected to notify the Nominating/Governance
Committee in writing before accepting
election or appointment to any public company board on which they did not serve when appointed to the Astronics Board.
The Board does not believe that arbitrary term limits on Directors’ service are appropriate nor does it believe that Directors should expect to be renominated annually. The Board self-evaluation process noted below will bedescribed above is an important determinant for Board tenure.
Board Interaction with Shareholders
Although the Company does not have a formal policy regarding communications with the Board of Directors, shareholders may communicate with the Board of Directors by writing to: Board of Directors, Astronics Corporation, 130 Commerce Way, East Aurora, New York 14052. Shareholders who would like their submission directed to a
particular director may so specify and the communication will be forwarded, as appropriate.
The Board believes that management should speak for the corporation.Company. Accordingly, each Director willmay refer all inquiries from shareholders, analysts, the press or customers to the CEO.
Proxy Access
Shareholder Director Nominations
A shareholder entitled to vote in the election of Directors, may nominate a candidate for the Board of Directors only if written notice of the shareholder’s intent to do so has been given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the corporationCompany and received by the corporationCompany (a) with respect to an election to be held at an annual meetingAnnual Meeting of shareholders, not later than
sixty (60) nor more than ninety (90) days prior to the first anniversary of the preceding year’s annual meetingAnnual Meeting (or, if the date of the annual meetingAnnual Meeting is changed by more than twenty (20) days from such anniversary date, within ten (10) days after the date the corporationCompany mails or otherwise give notice of the date of such meeting)Annual Meeting), and (b) with respect to an election to be held at a special meeting of
shareholders called for that purpose, not later than the close of business on the tenth (10th) day following the date on which notice of the special meeting was first mailed to the shareholders of the corporation.Company.
Each shareholder’s notice of intent to make a nomination shall set forth: (i) the name(s) and address(es) of the shareholder who intends to make the nomination and of the person or persons to be nominated; (ii) a representation that the shareholder (a) is a holder of record of stock of the corporationCompany entitled to vote at such meeting,Annual Meeting, (b) will continue to hold such stock through the date on which the meetingAnnual Meeting is held, and (c) intends to appear in person or by proxy at the meetingAnnual Meeting to nominate the person or persons specified in the notice; (iii) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination is to be made by the shareholder; (iv) such other information regarding each nominee proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to Regulation 14A promulgated under Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as now in effect or hereafter modified, had the nominee been nominated by the Board of Directors; and (v) consent of each nominee to serve as a director of the
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corporation Company if so elected. The corporationCompany may require any proposed nominee to furnish such other information as may reasonably be required by the corporationCompany to determine the qualifications of such person to serve as a director.
No person shall be eligible for election as a director unless nominated (i) by a shareholder in accordance with the foregoing procedure or (ii) by the Board of Directors or a committee designated by the Board of Directors.
Board Evaluation and Oversight of Risk
The Board of Directors oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance shareholder value. A fundamental part of risk management is to understand the specific risks the Company faces and what mitigating steps are being taken, while balancing what is an appropriate level of risk for the Company. The involvement of the full Board of Directors in setting and overseeing business strategy is a key part of its assessment of management’s appetite for risk and also a determination of what constitutes an appropriate level of risk for the Company. On a regular basis, senior leaders are invited to present to the Board of Directors on each business. These presentations include opportunities as well as risks and mitigating actions. On an ongoing basis, the Company relies on its business leaders to identify and mitigate risks wherever possible.
While the Board of Directors has the ultimate oversight responsibility for the risk management process, various
committees of the Board also have oversight responsibility for specific areas of risk management. In particular, the Audit Committee focuses on financial risk, including internal controls over financial reporting, as well as compliance risk. In addition, in setting compensation, the Compensation Committee strives to create incentives that encourage a level of risk-taking behavior consistent with the Company’s business strategy. The Sustainability Committee oversees the Company’s sustainability programs and assists in the integration of sustainability planning into the Company’s risk management process. The Company maintains a Cybersecurity policy as well as Complaintcomplaint procedures for accounting and auditing matters, (“Whistleblower”), the latter of which may be found on the Corporate Governance section of the Company’s website. The Company conducts regular periodic training of its employees as to the protection of sensitive information which includes security awareness training intended to prevent the success of “phishing” attacks.
Board Leadership Structure and Size
At present, the Board has determined that combining the roles of the Chief Executive Officer and Chairman is in the best interests of the corporation.Company. In addition to the Chairman, the Board has a Lead Director.Independent Director who has substantial and significant responsibility on Board matters. The Board should beis free to reconsider that determinationthe combination of Chief Executive Officer and Chairman roles in the future.future and may decide to do so if conditions change. It is the sense of the Board that a size of 7 to 9 members is about right for the corporationCompany in light of its size and complexity of its business. The Board proposes a
slate of nominees to the shareholders for election to the Board. Shareholders may also propose nominees
for consideration by the Nominating/Governance Committee by submitting the names and supporting information according to the deadlines set forth in the corporation’sCompany’s proxy statement for its most recent annual meetingAnnual Meeting to: Secretary, Astronics Corporation, 130 Commerce Way, East Aurora, New York 14052. Between annual shareholder meetings, the Board may elect Directors to fill vacancies to serve until the next annual meeting.Annual Meeting.
TheAmong its duties, the Board shall planplans for the succession of the CEO. To assist the Board, the CEO will presentprovides an annual succession planning summary to the Board and will adviseadvises the Board of his recommendations and evaluations of potential successors. The Compensation Committee will assureprovides assessment and feedback by the Board of Directors to the CEO on the strategic leadership, development, and internal and external representation of the Company.
The Board believes that the primary and most constructive interaction with management is through the normal process of scheduled Board and Committee meetings, whether they be on regular business or special matters, at which any discussions can
best be informed by the collective and varied knowledge and experience of Directors and management. The Board also recognizes, however, that matters of integrity and corporate conduct, were they to arise, may call for direct access to senior management. As is judicious under these circumstances, independent Directors are free to contact executive officers and other senior managers of the corporationCompany without senior corporate management present. As noted above in the Board Evaluation and Oversight of Risk discussion, senior leaders are invited on a regular basis to present to the Board of Directors on each business. In this manner, the Board becomes familiar with leadership beyond the office of the CEO and CFO.
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Directors’ and Officers’ Indemnification Insurance
The Company has in place Directors’ and Officers’ Liability Insurance policies written by the Chubb Group, Zurich, Travelers, C.N.A., AIG, AXA XL CAN, AWAC, Travelers and XL CatlinAce American Insurance Company, for a twelve-month term expiring July 1, 2021.2023. The twelve-month premium was $729,236.$828,464. The policies have limits of $55 million in the aggregate and provide indemnification benefits and the payment of expenses in actions instituted against any director or officer of the Company for claimed liability arising out of their conduct in such capacities.
The Company also has entered into indemnification agreements with its directors and certain of its officers. The indemnification agreements provide that the director or officer will be indemnified for expenses, investigative costs and judgments arising from certain threatened, pending or completed legal proceedings.
Board Composition and Diversity
The Nominating/Governance Committee is responsible for developing the general criteria, subject to approval of the Board of Directors, for use in identifying, evaluating and selecting qualified candidates for election or re-election to the Board. The Nominating/Governance Committee periodically reviews the appropriate skills and characteristics required of the Board members in the context of the current composition of the Board. The Nominating/Governance Committee, in recommending candidates to the Board, seeks to create a Board that is strong in its collective knowledge and has a diversity of skills and experience with respect to accounting and finance, management and leadership, vision and strategy, business operations, business judgment, industry knowledge, corporate governance and global markets. When the Nominating/Governance Committee reviews a potential new candidate, it looks specifically at the candidate’s qualifications in light of the needs of the Board and the Company at that time, given the attributes of the existing Directors. In identifying candidates for director, the Board of Directors takes into account:
(i)
| the comments and recommendations of board members regarding the qualifications and effectiveness of the existing Board of Directors or additional qualifications that may be required when selecting new board members, |
members regarding the qualifications and effectiveness of the existing Board of Directors or additional qualifications that may be required when selecting new board members;
(ii)
| the requisite expertise and sufficiently diverse backgrounds of the Board of Directors’ overall membership composition,composition; |
(iii)
| the independence of outside directors and other possible conflicts of interest of existing and potential members of the Board of Directors,Directors; and |
(iv)
| all other factors it considers appropriate. |
The Board of Directors believes that ethnic and gender diversity are important considerations when evaluating Director candidates along with such factors as background, skills, experience and expertise. At present, 11% of the BoardMs. O’Brien is diverse with respect to gender and 22% of the Board is diverse with respect to race/ethnicity. Ms. Calaway is diverse with respect to gender and race/ethnicity and Mr. Kim is diverse with respect to race/ethnicity. The Company will continue to consider all of these factors when proposing future candidates for the Board.
With respect to the current slate of Directors, the Board of Directors focused primarily on the information discussed in each of the directors’ individual biographies set forth elsewhere in this proxy statement. In particular, with regard to Ms. O’Brien and Messrs. Boushie, Brady, Frisby, Johnson and Moran, the Board of Directors considered their significant experience, expertise and background with regard to the aerospace
industry. With regard to Messrs. Kim and Keane, the Board of Directors considered their technical knowledge, significant mergers and acquisition experience, and expertise with complex, multinational organizations. With respect to Ms. Calaway, the Board of Directors considered her strong governance and human capital management experience. The Board of Directors also considered the more than thirty years of experience with the Company represented by Mr. Gundermann, the Company’s Chairman of the Board and Chief Executive Officer.
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BOARD MATTERS
| | Total Number of Directors | | | 9 | |
| | | | | Female | | | Male | | | Non-Binary | | | Did Not Disclose
Gender | |
| | Part I: Gender Identity | | | | | | | | | | | | | |
| | Directors | | | 1 | | | 8 | | | — | | | — | |
| | Part II: Demographic Background | | | | | | | | | | | | | |
| | African American or Black | | | — | | | — | | | — | | | — | |
| | Alaskan Native or Native American | | | — | | | — | | | — | | | — | |
| | Asian | | | — | | | 1 | | | — | | | — | |
| | Hispanic or Latinx | | | — | | | — | | | — | | | — | |
| | Native Hawaiian or Pacific Islander | | | — | | | — | | | — | | | — | |
| | White | | | 1 | | | 6 | | | — | | | — | |
| | Two or More Races or Ethnicities | | | — | | | 1(1) | | | — | | | — | |
| | LGBTQ+ | | | — | |
| | Did Not Disclose Demographic Background | | | — | |
(1)
| One director self-identifies as White and Hispanic. |
COMPENSATION OF DIRECTORS
The following table sets forth the cash compensation as well as certain other compensation of the Company’s directors for the year ended December 31, 2020:2022:
| | Name | | Fees Earned or Paid
in Cash | | Restricted
Stock Unit
Awards(4) | | Total | | Name | | Fees Earned or
Paid
in Cash | | Restricted
Stock Unit
Awards(6) | | Total | |
| | Raymond W. Boushie(1) | | $75,000 | | $110,264 | | $185,264 | | Raymond W. Boushie(1)(2) | | $75,000 | | $109,999 | | $184,999 | |
| | Robert T. Brady(1) | | $75,000 | | $110,264 | | $185,264 | | Robert T. Brady(1) | | $75,000 | | $109,999 | | $184,999 | |
| | Tonit M. Calaway(1) | | $75,000 | | $110,264 | | $185,264 | | Tonit M. Calaway(3) | | $29,670 | | $45,833 | | $75,503 | |
| | Jeffry D. Frisby(1) | | $75,000 | | $110,264 | | $185,264 | | Jeffry D. Frisby(1) | | $75,000 | | $109,999 | | $184,999 | |
| | Peter J. Gundermann(2) | | — | | — | | — | | Peter J. Gundermann(4) | | — | | — | | — | |
| | Warren C. Johnson(1) | | $75,000 | | $110,264 | | $185,264 | | Warren C. Johnson(1) | | $75,000 | | $109,999 | | $184,999 | |
| | Robert S. Keane(1)(3) | | $75,000 | | $110,264 | | $185,264 | | Robert S. Keane(1) | | $75,000 | | $109,999 | | $184,999 | |
| | Neil Kim(1) | | $75,000 | | $110,264 | | $185,264 | | Neil Kim(1) | | $75,000 | | $109,999 | | $184,999 | |
| | Mark Moran(1) | | $75,000 | | $110,264 | | $185,264 | | Mark Moran(1) | | $75,000 | | $109,999 | | $184,999 | |
| | | Linda O’Brien(5) | | — | | — | | — | |
(1)
| In 2020, Ms. Calaway and2022, each of Messrs. Boushie, Brady, Frisby, Johnson, Keane, Kim and Moran were awarded 5,6008,112 Restricted Stock Units under the Amended and Restated 2017 Long Term Incentive Plan. Each Restricted Stock Unit represents the right to receive, at settlement, one share of Common Stock. The Restricted Stock Units issued to Messrs. Boushie, Brady, Frisby, Johnson, Keane, Kim and Moran vested in full six months from the grant date on August 24, 2022, on which date each of Messrs. Boushie, Brady, Frisby, Johnson, Keane, Kim and Moran were issued 8,112 shares of Common Stock. At December 31, 2022, Messrs. Boushie, Brady, Frisby, Johnson and Kim had options to purchase 20,000; 20,000; 8,000; 8,000 and 8,000 shares of Common Stock, respectively, and 9,273; 9,273; 1,200; 1,200 and 1,200 shares of Class B Stock, respectively. The exercise price is 100% of the fair market value on date of grant. As of December 31, 2022, Mr. Keane and Mr. Moran did not have any options to purchase shares of Common Stock or Class B Stock. |
(2)
| Mr. Boushie’s term as director will expire on the date of the Annual Meeting. |
(3)
| Ms. Calaway did not stand for reelection at the Annual Meeting in 2022. In 2022, Ms. Calaway was awarded 3,380 Restricted Stock Units under the Amended and Restated 2017 Long Term Incentive Plan. Each Restricted Stock Unit represents the right to receive, at settlement, one share of Common Stock. The Restricted Stock Units issued to Ms. Calaway and Messrs. Boushie, Brady, Frisby, Johnson, Keane, Kim and Moran vested in full six monthsupon her exit from the grant dateBoard in May 23, 2022, and on August 28, 2020, on which dateMay 31, 2022, Ms. Calaway and each of Messrs. Boushie, Brady, Frisby, Johnson, Keane, Kim and Moran werewas issued 5,6003,380 shares of Common Stock. AtAs of December 31, 2020, Messrs. Boushie, Brady, Frisby, Johnson and Kim had2022, Ms. Calaway did not have any options to purchase 25,500; 25,500; 8,000; 8,000 and 8,000 shares of Common Stock respectively, and 18,255; 18,255; 1,200; 1,200 and 1,200 shares ofor Class B Stock, respectively. The exercise price is 100%Stock. |
(4)
| Mr. Gundermann receives no separate compensation as a director of the fair market value on date of grant. As ofCompany. |
(5)
| Ms. O’Brien joined the Board in February 2023 and did not receive any compensation in 2022. At December 31, 2020,2022, Ms. Calaway, Mr. Keane and Mr. MoranO’Brien did not have any options to purchase shares of Common Stock or Class B Stock. |
(2)
| Mr. Gundermann receives no separate compensation as a director of the Company. |
(3)
| At December 31, 2020, the Estate of Kevin T. Keane, the father of Mr. Robert Keane, had options to purchase 4,000 shares of Common Stock and 600 shares of Class B Stock. Mr. Robert Keane is one of multiple beneficiaries to a trust to be established by the estate. Mr. Robert Keane’s proportionate interest in the estate is below 25%. The options expire on June 10, 2021. |
(4)
(6)
| The total fair value of the award is determined under generally accepted accounting principles used to calculate the value of equity awards for purposes of the Company’s financial statements as described in Note 16 to the audited financial statements in Astronics Corporation’s Annual Report on Form 10-K for the year ended December 31, 2020.2022. The amounts do not reflect the actual amounts realized by the director. |
Compensation Committee Interlocks and Insider Participation
No interlocking relationship exists between any member of the Compensation Committee or any of the Company’s executive officers and any member of any other company’s board of directors or compensation committee (or equivalent).
No member of the Compensation Committee was, during 20202022 or prior thereto, an officer or employee of the Company
or any of its subsidiaries.subsidiaries, except that from 1988 to 1994, Mr. Keane was an executive at Flex-Key Corporation, a former subsidiary of Astronics Corporation.
Board of Directors Stock Ownership Requirement
The Board believes that, in order to align the interests of the Directors and shareholders, Directors should have a significant financial stake in the corporation.Company. The Corporate Governance Guidelines adopted by the Board in December 2019, as amended on February 26, 2021, provide that within four years of joining the Board or within four years of adoption of the
Guidelines, whichever is later, each non-employee Director is
expected to accumulate and maintain ownership of at least the number of shares equal to 400% of the annual cash retainer for the applicable calendar year, divided by the average of the closing price of a share of Astronics Corporation Common Stock for the previous calendar year.
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The Company’s Amended and Restated 2017 Long Term Incentive Plan authorizes it to grant stock options, stock appreciation rights, restricted stock, restricted stock units and stock bonuses to non-employee directors of the Company. The Compensation Committee has authority to grant awards under the Amended and Restated 2017 Long Term Incentive Plan. The Nominating/Governance Committee makes recommendations to the full BoardCompensation Committee as to equity grants for directors and awards are granted by the Board. The Nominating/Governance Committee reviews and approves equity awards to directors based upon a review of competitive compensation data, its assessment of individual performance and retention considerations. Awards to non-employee directors of stock options, stock appreciation rights and restricted stock units may not vest sooner than six months from the date of grant, except in certain circumstances such as death, disability, retirement or cessation of service as a director other than for cause. Recipients of RSUs may not sell or otherwise dispose of the shares issued upon settlement of RSUs until six months following the date of issuance of such shares.
On February 28, 2020, Ms. Calaway and24, 2022, each of Messrs. Boushie, Brady, Frisby, Johnson, Keane, Kim and Moran were awarded 5,600 8,112
Restricted Stock Units.Units and Ms. Calaway was awarded 3,380 Restricted Stock Units due to her term expiring at the Annual Meeting in May 2022. Each Restricted Stock Unit represents the right to receive, at settlement, one share of Common Stock.
The Restricted Stock Units issued to Ms. Calaway and Messrs. Boushie, Brady, Frisby, Johnson, Keane, Kim and Moran vested in full six months from the grant date on August 28, 2020,24, 2022, on which date Ms. Calaway and each of Messrs. Boushie, Brady, Frisby, Johnson, Keane, Kim and Moran were issued 5,6008,112 shares of Common Stock. The Restricted Stock Units issued to Ms. Calaway vested on May 23, 2022 upon her exit from the Board, and on May 31, 2022, Ms. Calaway was issued 3,380 shares of Common Stock.
The non-employee directors as a class currently hold
1.2%1.4% of the Common Stock and
12.7%13.4% of the Class B Stock of the Company. We believe this aligns
management’sthe Board’s interests with shareholder interests. See “Security Ownership of Certain Beneficial Owners and Management” on page
5354.
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Executive Officers
The executive officers of the Company, their ages, their positions and offices with the Company, and the date each assumed office with the Company, are as follows:
| Peter J. Gundermann, Age 58
| | | Chairman, President, Chief Executive Officer and Director of the Company
| | | 2001
| |
| David C. Burney, Age 58
| | | Executive Vice President – Finance and Chief Financial Officer of the Company
| | | 2003
| |
| James S. Kramer, Age 57
| | | Executive Vice President of the Company; President of Luminescent Systems, Inc. and Astronics DME LLC
| | | 2010
| |
| Michael C. Kuehn, Age 60
| | | Executive Vice President of the Company; President of Astronics Connectivity Systems & Certification Corp., Armstrong Aerospace, Inc. and Astronics Aerosat Corporation
| | | 2017
| |
| James F. Mulato, Age 60
| | | Executive Vice President of the Company; President of Astronics Test Systems, Inc.
| | | 2014
| |
| Mark A. Peabody, Age 62
| | | Executive Vice President of the Company; President of the Aerospace Segment of the Company
| | | 2010
| |
The principal occupation and employment for Messrs. Gundermann, Burney, Kramer, Mulato and Peabody for the past five years has been with the Company in their respective current roles.
Mr. Kuehn and Mr. Mulato became Executive Vice Presidents of the Company on January 1, 2019.
Mr. Kuehn has been the President of Astronics Connectivity Systems & Certification Corp. since its acquisition by the
Company in 2017. Prior to acquisition, Mr. Kuehn ran that business as President of Telefonix, Incorporated for eight years. Mr. Kuehn has also served as President of Armstrong Aerospace, Inc. since 2018 and President of Astronics Aerosat Corporation since 2021. Mr. Kuehn earned his undergraduate degree from Lewis University and is currently pursuing a graduate degree from Lewis as well.
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PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
| |
| | | THE BOARD RECOMMENDS THAT YOU VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG, LLP TO AUDITAS THE COMPANY’S CONSOLIDATED FINANCIAL STATEMENTSINDEPENDENT REGISTERED PUBLIC ACCOUNTING FORM FOR 2021.2023. | |
The Audit Committee, with the approval of the Board of Directors, has selected Ernst & Young LLP as the independent registered public accounting firm, to act as auditors of Astronics Corporation for 2021.2023. All services provided on the Company’s behalf by Ernst & Young LLP during 20202022 and
2019 2021 were approved in advance by the Audit Committee.
While the Audit Committee is responsible for the appointment, compensation, retention, termination and oversight of our independent registered public accounting firm, the Board of Directors believes, as a matter of good governance, that it is advisable to give shareholders an opportunity to ratify this
selection. If this proposal is not approved by our shareholders at the Annual Meeting, the Audit Committee may reconsider its selection of Ernst & Young LLP. Even if the selection is ratified by our shareholders, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of the Company and our shareholders.
Representatives of Ernst & Young LLP are expected to attend the Annual Meeting and will have the opportunity to make a statement if they desire and will be available to respond to appropriate questions.
Audit and Non-Audit Fees. The following table sets forth the fees billed to the Company for the last two years by the Company’s independent auditors, Ernst & Young LLP:
| | | | 2020 | | 2019 | | | | 2022 | | 2021 | |
| | Audit | | $1,350,000 | | $1,757,318 | | Audit | | $1,700,192 | | $1,336,125 | |
| | Audit-related | | — | | — | | Audit-related | | $— | | — | |
| | Tax | | $40,300 | | $— | | Tax | | $36,050 | | $89,065 | |
| | All Other | | $5,638 | | $7,200 | | All Other | | $6,220 | | $6,167 | |
| | | | | | | | |
The Audit Committee has adopted a policy that requires advance approval of all audit, audit-related, tax services, and other services performed by the independent registered public accounting firm. The policy provides for pre-approval by the Audit Committee of specifically defined audit and non-audit services. Unless the specific service has been previously pre-approved with respect to that year, the Audit Committee
must approve the permitted service before the independent registered public accounting firm is engaged to perform it. The Audit Committee may delegate to an Audit Committee member the authority to approve permitted services provided that the delegated member reports any decisions to the Committee at its next scheduled meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2021 YEAR.
2023.
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REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements in the Annual Report with management and the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.
The Audit Committee is comprised of the directors named below, each of whom is independent as defined under Section 10A(m)(3) of the Securities Exchange Act, of 1934, as amended (the “Exchange Act”), and under the NASDAQNasdaq Stock Market, LLC listing standards currently in effect. In addition, pursuant to the requirements of Section 407 of the Sarbanes-Oxley Act of 2002, the Board of Directors has determined that it has more than one “audit committee financial expert” as defined under federal securities laws serving on its Audit Committee.
The Audit Committee operates under a written charter which includes provisions requiring Audit Committee advance approval of all audit and non-audit services to be provided by independent public accountants.
The Audit Committee reviewed and discussed with management and Ernst & Young LLP, the Company’s independent registered public accounting firm, the Company’s audited consolidated financial statements for the year ended December 31, 2020.2022. In addition, the Audit Committee discussed with the independent registered public accounting firmauditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 1301, Communications with Audit Committees.and the Securities and Exchange Commission.
The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firmaccountant required by the applicable requirements of the PCAOB regarding the independent public accounting firm’saccountant’s communications with the Audit Committee concerning independence, and the Audit Committeehas discussed with the independent registered public accounting firm that firm’saccountant the independent accountant’s independence.
Based on the Audit Committee’s review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2020, filed2022, for filing with the Securities and Exchange Commission.
| | April 13, 202111, 2023 | | | Robert T. Brady, Chairman
Raymond W. Boushie
Jeffry D. Frisby
Robert S. Keane
Neil Kim | |
In accordance with and to the extent permitted by applicable law or regulation, the information contained in the Report of Audit Committee of Astronics Corporation shall not be incorporated by reference into any future filing under the
Securities Act of 1933, as amended, or the Exchange Act and shall not be deemed to be “soliciting material” or to be “filed” with the SECSecurities and Exchange Commission under the Securities Act of 1933, as amended, or the Exchange Act.
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PROPOSAL 3:
AMENDMENT AND RESTATEMENTADVISORY VOTE TO APPROVE THE COMPENSATION OF
ASTRONICS CORPORATION 2017 LONG TERM INCENTIVE PLANOUR NAMED EXECUTIVE OFFICERS
| |
| | | THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE AMENDMENT AND RESTATEMENTAPPROVAL OF THE ASTRONICS CORPORATION 2017 LONG TERM INCENTIVE PLAN.ADVISORY RESOLUTION INDICATING THE APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS. | |
Summary
On March 30, 2021, the Board approved an amendment and restatement of the Astronics Corporation 2017 Long Term Incentive Plan, as amended (the “Restated Plan”), subject to shareholder approval at the annual meeting. The Restated Plan is substantially similar to the current 2017 Long Term Incentive Plan (the “2017 Plan”), except that the Restated Plan:
increases the number of shares of stock with respect to which awards may be issued under the 2017 Plan from 1,757,040 to 3,144,774 shares under the Restated Plan, an increase of 1,387,734 shares; and
changes the annual limit on options or stock appreciation rights that may be awarded to any one employee from 100,000 to 200,000.
The Board is requesting this vote by shareholders to approve the increase to 3,144,774 shares available for issuance under the Restated Plan as well as the change to the annual limit on options or stock appreciation rights.
The 3,144,774 share amount includes 620,700 shares currently available for issuance under the 2017 Plan, plus an additional 1,387,734 shares, which will leave approximately 2,000,000 shares available for awards under the Restated Plan. The Board expects that, under the proposed equity compensation strategy, the Restated Plan will enable the Company to meet its equity compensation needs for the next four years.
A copy of the Restated Plan is attached as Exhibit A to this proxy statement. If the Restated Plan is approved by the shareholders, it will supersede the 2017 Plan in its entirety. If the shareholders do not approve the Restated Plan, the Restated Plan will not become effective and the Company may continue to grant awards under the 2017 Plan, subject to its current terms, conditions and limitation. Below is a summary of key provisions of the Restated Plan. The summary is qualified in its entirety by reference to the full text of the Restated Plan.
Reasons for the Proposed Changes to the 2017 Plan
The 2017 Plan currently provides for an aggregate 1,757,040 sharesCompany is required, pursuant to be issued underSection 14A of the 2017 Plan. AsExchange Act, to provide a non-binding advisory shareholder vote on the compensation of April 5, 2021, 620,700 shares remained available for grant under the 2017 Plan. Further, as of April 5, 2021, there were a total of (i) 1,107,659 shares subject to issuance upon exercise of outstanding stock options under the 2017 Plan, the 2005 Director Stock Option Plan and the 2011 Stock Option Plan (collectively, the “Existing Plans”) at a weighted average exercise price of $23.56 and a weighted average remaining life of 5.8 years; and (ii) 499,149 shares subject to outstanding restricted stock unit awards, including 115,058 shares subject to outstanding performance-based restricted stock unit awards toour named executive officers (assuming payout atas described in this proxy statement (commonly referred to as “Say-on-Pay”).
The advisory vote on executive compensation is a non-binding vote on the target level),compensation of the Company’s Named Executive Officers, as described in the Compensation Discussion and 330,091 shares subjectAnalysis section, the compensation tables, and the accompanying narrative disclosure, set forth in this Proxy Statement.
The Company maintains a compensation program that is comprehensive, consisting of base salary, annual incentives, long-term incentives and benefits, in support of our objective of providing superior value to shareholders and customers. The compensation program is designed to motivate and reward executives for sustained superior performance through the use of variable compensation tied to short, intermediate and long-term results. Astronics Corporation’s business success depends on our ability to attract and retain executive talent through competitive compensation opportunities provided by our program.
outstanding time-based restricted stock unit awards to other key employees,A significant majority of each Named Executive Officer’s, or NEOs, compensation is at-risk and 54,000 shares subject to outstanding time-based restricted stock unit awards to non-employee directors.
If Astronics does not increase the shares available for issuance under the 2017 Plan, then, baseddependent on the depletionperformance and execution of the share reserveCompany’s strategic priorities.
For the reasons discussed above, the Board of Directors unanimously recommends that would result from Astronics’ historical usage ratesshareholders vote in favor of shares under the 2017 Plan, Astronics could potentially exhaustfollowing resolution:
“RESOLVED, that the share limit undershareholders hereby APPROVE, on a non-binding, advisory basis, the 2017 Plan beforecompensation paid to the Company’s next opportunity to ask for an increase atnamed executive officers, as disclosed in the Company’s proxy statement prepared in connection with its 20222023 Annual Meeting of Shareholders at which time it would losepursuant to the compensation disclosure rules of the Securities and Exchange Commission (which disclosure includes the Compensation Discussion and Analysis, the executive compensation tables and narrative discussion).”
Although this proposal is an importantadvisory vote that will not be binding on the Compensation Committee or the Board of Directors, the Compensation Committee will consider the results of this shareholder advisory vote and the changes, if any, to our executive compensation tool aligned with stockholder interests to attract, motivatepolicies, practices and retain highly qualified talent.plans that may be warranted as a result of this vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE ADVISORY RESOLUTION INDICATING THE APPROVAL OF THE COMPENSATION OF THE
COMPANY’S NAMED EXECUTIVE OFFICERS.
TABLEPROPOSAL 4: ADVISORY VOTE ON FREQUENCY OF
CONTENTSFUTURE SHAREHOLDER VOTES ON EXECUTIVE COMPENSATION
The COVID-19 pandemic impacted the Company and its industry significantly. As part of its cost-saving measures to offset the impact, the Company implemented a wage freeze and suspended its bonus programs in 2020. The wage freeze continues into 2021 for senior management. In an effort to preserve cash and retain and incentivize key employees, in February 2021, the Compensation Committee awarded more restricted stock units than in prior years, and also awarded restricted stock units in lieu of cash raises to those in senior management who will not receive a wage increase at this time. As a result of this and a lower stock price than in previous years, in 2021, the Compensation Committee awarded 238,091 restricted stock units (including 29,716 restricted stock units issued in lieu of cash raises) with a grant date fair market value of $3,880,883 to named executive officers and other key employees, as compared to 145,300 restricted stock units awarded in 2020 with a grant date fair market value of $2,860,957.
While the Board believes the 2017 Plan has been successful in aligning the interests of key employees and shareholders, the Board believes that the amendment and restatement of the 2017 Plan is in the best interests of the Company and its shareholders. The Board believes the Company will be able to more effectively recruit, motivate and retain the caliber of employees essential to the Company’s success over the coming years with additional shares available for equity awards. In the Board’s view, equity awards are integral to the Company’s compensation strategy and will enhance the ability to align equity-based awards with business performance, while providing employees and non-employee directors with an opportunity to acquire a meaningful, significant and growing proprietary interest in the Company.
Equity is typically a significant component of total compensation for key employees, particularly for the named executive officers. If the Company were to grant fewer equity awards to key employees, the Board believes that it would need to provide compensation in other forms (such as cash) in order to provide a total compensation package that is competitive with other companies in the Company’s industry
and region. For these reasons, the Company believes that the increase is necessary for it to continue to be in a position to attract, motivate, and retain talented employees and non-employee directors.
In reaching its determination to approve the Restated Plan, the Board considered that:
If Astronics did not increase the shares available for issuance under the 2017 Plan, then, based on the depletion of the share reserve that would result from Astronics’ historical usage rates of shares under the 2017 Plan, Astronics could potentially exhaust the share limit under the 2017 Plan before the Company’s next opportunity to ask for an increase at its 2022 Annual Meeting of Shareholders, at which time it would lose an important compensation tool aligned with stockholder interests to attract, motivate and retain highly qualified talent.
In 2019 and 2020, Astronics granted equity awards representing a total of approximately 225,934 and 190,100 shares, respectively, assuming the performance-based restricted stock unit awards are paid out at the target level. This level of equity awards represents a two-year average burn rate of approximately 0.66% of fully diluted common shares outstanding.
To date in 2021, the Company has granted equity awards representing a total of approximately 505,741 shares (including 213,650 options awarded to named executive officers, 238,091 restricted stock units awarded to named executive officers and employees and 54,000 restricted stock units awarded to non-employee directors, assuming performance-based restricted stock unit awards to named executive officers are paid out at the target level).
If the Restated Plan is not approved, the 2017 Plan will remain in effect in accordance with its present terms, except to the extent that the 2017 Plan is amended by the Board in accordance with its terms.
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Plan Highlights
A summary of the principal features of the Restated Plan is provided below, but is qualified in its entirety by reference to the full text of the Restated Plan which is attached as Exhibit A to this proxy statement.
| | Plan Term
| | | The 2017 Plan became effective May 31, 2017 and was amended on December 14, 2018; no new awards under the Restated Plan may be granted after May 31, 2027, or earlier if terminated by the Board
| |
| Persons Eligible for Grants
| | | Employees and non-employee directors of Astronics Corporation and its subsidiaries
| |
| Shares Authorized
| | | 3,144,774 shares of Common Stock or Class B Stock. This includes 620,700 shares currently available for issuance under the 2017 Plan, plus an additional 1,387,734 shares, leaving approximately 2,000,000 shares available for awards under the Restated Plan.
| |
| Types of Awards Available
| | | •
| | | Non-Qualified Stock Options (“NQSOs”)
| |
| •
| | | Incentive Stock Options (“ISOs”)
| |
| •
| | | Stock Appreciation Rights (“SARs”)
| |
| •
| | | Restricted Stock
| |
| •
| | | Restricted Stock Units (“RSUs”)
| |
| •
| | | Stock Bonuses
| |
| Plan Features intended to protect shareholders’ interests
| | | •
| | | The additional 1,387,734 Shares requested (in addition to the 620,700 currently available for issuance under the 2017 Plan) represents an additional 4.49% of shares of the Stock outstanding as of December 31, 2020.
| |
| •
| | | The Restated Plan has a 10-year term from initial approval of the 2017 Plan on May 31, 2017, with a fixed number of shares authorized for issuance. It is not an “evergreen” plan.
| |
| •
| | | It prohibits the use of discounted stock options or SARs, reload options, and repricing without shareholder approval.
| |
| •
| | | It does not permit options or other benefits to be transferred to third parties for consideration.
| |
| •
| | | It contains, with certain exceptions, a minimum three-year pro-rata vesting schedule for time-based awards of restricted stock and RSUs other than to non-employee directors.THE BOARD RECOMMENDS THAT YOU VOTE TO HOLD FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION EVERY THREE YEARS.
| |
The Restated Plan contemplatesCompany is presenting a proposal, which gives you as a shareholder the use ofopportunity to inform the Company, on an advisory basis, as to how often you wish the Company to include a mix of equity award types, and the Compensation Committee will determine the optimal mix from yearproposal, similar to year with increasing emphasis on performance-based vesting. ItProposal 3, in our Proxy Statement. This advisory vote is anticipated that time-based stock options and SARs would generally become exercisable in a pro-rata method over a five-year period, provided that such awardscommonly referred to non-employee directors would vest at six-months. Further, the Committee anticipates that time-based restricted stock and RSUs would generally have a three year vesting schedule, provided that such awards to non-employee directors would vest at six-months. It is also expected that vesting of some awards will be based on satisfaction of certain performance criteria.as “Say-on-Frequency” or “Say-When-on-Pay”. This resolution
With respectis required pursuant to performance-based restricted stock or RSUs, while a variety of performance goals are permitted under the Restated Plan, the Compensation Committee presently contemplates establishing goals based on a variety of targets, including sales growth, margin improvement and free cash flow targets to be achieved over a three to five year performance period. Further, these awards generally will not fully vest unless a certain performance level has been met at the endSection 14A of the applicable performance period. The level of performance achieved generally will determine the amount of stock or units that vests and it is anticipated that performance would be judged onExchange Act. We are required to hold a cumulative basis.
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The Compensation Committee and“Say-When-on-Pay” vote every six years. While the Board consideredof Directors intends to carefully consider the expected shareowner value transfer and potential dilution that would result by adopting the Restated Plan and believe that the approximately 2,000,000 shares which would be available to be granted under the Restated Plan (consisting of 620,700 shares currently available for issuance under the 2017 Plan, plus an additional 1,387,734 shares to be made available under the Restated Plan) represent a prudent balance, enabling us to make competitive levels of equity based compensation awards while at the same time meeting the interests of shareholders.
The anticipated dilutionshareholder vote resulting from the Restated Planproposal, the final vote will not be reasonable. The total number of shares reserved for issuance under the Restated Plan, plus outstanding awardsbinding on us and available shares under the Company’s existing incentive compensation plans would be 3,606,808 as of April 5, 2021, representing potential dilution of approximately 10.43%.
Potential dilution is calculated by dividing (A) (i) the total shares available for equity awards that may be made under the Restated Plan (approximately 2,000,000) plus (ii) the total shares of Stock to be issued on exercise or settlement of outstanding equity awards (assuming the performance-based restricted stock units awards are paid out at the target level) under the Existing Plans, (collectively, “the numerator”) by (B) (i) the total number of outstanding shares of Common
Stock as of April 5, 2021 excluding treasury shares (24,136,728), plus (ii) the total number of shares of Class B Common Stock as of April 5, 2021 (6,839,388) plus (iii) the number of sharesadvisory in the numerator.
Potential Dilution = [2,000,000 + 1,606,808] / [24,136,728 + 6,839,388 + 3,606,808] = 10.43%
Any outstanding option or restricted stock unit grants under the 2017 Plan will remain in effect and will continue to be administered according to their terms and the provisions of the 2017 Plan.
The calculation above assumes all outstanding awards under the Existing Plans will be earned and settled with newly issued shares. Actual dilution will be impacted by the following factors:
Shares to be issued on exercise or settlement of outstanding equity awards under the Existing Plans are calculated for net settlement based upon appreciation of the fair market value at the time of exercise and, where applicable, mandatory tax withholdings for employees. As a result, the potential dilutive effect would be less.
To the extent shares of Stock issued pursuant to any of these incentive compensation plans are acquired through open market purchases or privately negotiated transaction, the potential dilutive effect will be less.nature.
Restated Plan Detail Overview
Proposed Resolution
In“RESOLVED, that the description below, those eligible for awards undershareholders wish the Restated Plan are referredcompany to as “Participants.” Participants include all employees and non-employee directors of Astronics Corporation and its subsidiaries. This section provides key detailsan advisory vote on the compensation of the Restated Plan, but is qualified in its entirety by referenceCompany’s named executive officers pursuant to the full textSection 14A of the Restated Plan which is attached as Exhibit A to this Proxy Statement.
Shares Available for Issuance
If the Restated Plan is approved by the shareholders, the maximum number of shares of Stock reserved for future grants under the Restated Plan will be approximately 2,000,000.
No awards will be made with respect to Class B Stock unless (i) permitted under the Company’s Certificate of Incorporation or (ii) shareholder approval is obtained where required. However, to the extent a dividend or distribution payable in the form of Class B Stock is declared with respect to
Common Stock, Options or SARs awards made in the form of Common Stock may be adjusted as described in the Adjustments paragraph below to allow for awards to be partially settled in the form of Class B Stock, and dividends, dividend equivalents or distributions may be paid in the form of Class B Stock with respect to Common Stock awards of Restricted Stock and Restricted Stock Units.
Administration and Eligibility
The Restated Plan will be administered by the Compensation Committee or such other committee as the Board may appoint from time to time (the “Committee”), provided that at all times the Committee will consist of two or more directors,
each of whom will satisfy the requirements established for administrators acting under plans intended to qualify for exemption under Rule 16b-3 under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”).every:
ONE YEAR;
TWO YEARS; or
THREE YEARS.”
This proposal gives shareholders the opportunity to express their views as to whether the non-binding advisory vote on the Company’s executive officer compensation practices should occur every one, two, or three years. Because your vote is advisory, it will not be binding upon the Board of Directors. However, the Board of Directors will take into account the outcome of the vote when deciding the frequency of the future non-binding advisory votes on executive officer compensation.
Our shareholders voted on a similar proposal in 2017 and 2011 with the majority voting in each case to hold an advisory vote on executive compensation every three years. After careful consideration of this item, the Company has determined that an advisory vote on executive compensation that occurs every three years remains the most appropriate alternative for the Company at this time. Therefore, the Company recommends that a non-binding advisory vote to approve the compensation of its executive officers as described in the annual proxy statements occur every three years. The Company believes that shareholder feedback every three years will be more useful as it will provide shareholders with a sufficient period of time to evaluate the overall compensation of the
named executive officers, the components of that compensation and the effectiveness of that compensation. The triennial Say-On-Pay vote will provide shareholders with the benefit of assessing over a period of years whether the components of the compensation paid to the named executive officers have achieved positive results for the Company.
The Company believes that holding this vote every three years will be the most effective timeframe because it will provide the Board of Directors and Compensation Committee with sufficient time to engage with shareholders following each such vote, to understand any concerns shareholders may have, and to implement any changes they deem appropriate in response to the vote results. In addition, one aspect of the Company’s executive compensation philosophy is the alignment of executive officers’ long-term interests with those of shareholders, and a vote every three years will provide shareholders with additional time to evaluate the effectiveness of the Company’s executive compensation philosophy as it relates to its performance. Nevertheless, although it is the Company’s current intention to hold such
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The Committee willadvisory vote every three years, the Company may determine that a different frequency is appropriate, either in response to the vote of shareholders on this Proposal or for other reasons.
While the Company believes its recommendation is appropriate at this time, shareholders are not voting to approve or disapprove this recommendation, but are instead asked to provide an advisory vote on whether the aggregate awards and the individual awards for the most senior elected officers and non-employee directors, subject to ratification of the Board. The Committee may delegate some of its authority under the Restated Plan in accordance with the terms of the Restated Plan.future non-binding
advisory votes on the Company’s executive officer compensation practices should be held every one, two or three years. The total numberoption among those choices that obtains a plurality of votes cast by the shares present or represented by proxy and entitled to vote at the Annual Meeting will be deemed to have received the advisory approval of Stock subject to options or SARs awarded to any one employee during any fiscal year may not exceed 200,000 shares. The total number of shares of Stock subject to awards granted to any one non-employee director during any fiscal year may not exceed 25,000 shares.our shareholders.
AwardsTHE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO HOLD FUTURE
Stock Options.
The Committee is authorized to grant stock options (“Options”) to Participants (“Optionees”), which may be either ISOs or NQSOs. The total number of shares of Common Stock or Class B Stock issuable under the Restated Plan on exercise of ISOs may not exceed 3,144,774 shares. The exercise price of any Option must be at least equal to the fair market value of the shares on the date of the grant. The Restated Plan prohibits repricing of Options without shareholder approval.
For purposes of the Restated Plan, “fair market value” means, for any particular date, (i) for any period during which Common Stock or Class B Stock (collectively, the “Company Stock”) is listed for trading on a national securities exchange, the closing price per share of Company Stock on the exchange on the last trading day immediately preceding the grant date, or (ii) for any period in which the stock is not listed on a national securities exchange, the market price per share of Company Stock as determined in good faith by the Board. In either case, the fair market value will be determined in accordance with the valuation requirements of the regulations to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
At the time of the grant, the Committee in its sole discretion will determine when Options are exercisable and when they expire, provided the term of an Option does not exceed 10 years.
Payment for shares purchased upon exercise of an Option must be made in full at the time of purchase. Payment may be made: (i) in cash or by certified or bank check, (ii) subject to the approval of the Committee, (A) by delivery to the Company of other shares, duly endorsed for transfer to the Company, with a fair market value on the date of delivery equal to the exercise price due for the number of shares being acquired, or by means of attestation whereby the Participant identifies for delivery specific shares that have an aggregate fair market value on the date of attestation equal to the exercise price and receives a number of shares equal to the difference between the number of shares thereby purchased and the number of identified attestation shares, (B) by a cashless exercise program established with a broker, (C) by reduction in the number of shares otherwise deliverable upon exercise of the option with a fair market value equal to the aggregate exercise price, (D) any combination of the foregoing methods, or (E) in such other manner as may be authorized by the Committee.
The Committee has the authority to grant SARs to Participants and to determine the number of shares subject to each SAR, the term of the SAR (provided it does not exceed 10 years), the time or times at which the SAR may be exercised, and all other terms and conditions of the SAR. A SAR is a right, denominated in shares, to receive upon exercise of the right, in whole or in part, without payment to us, an amount payable in shares that is equal to: (i) the fair market value of Common
Stock or Class B Stock on the date of exercise, minus (ii) the exercise price, multiplied by the number of shares for which the right is exercised. SARs will be settled in Common Stock or Class B Stock plus cash for fractional share amounts. The exercise price of any SAR must be at least equal to the fair market value of the shares on the date of the grant. The Restated Plan prohibits repricing of SARs without shareholder approval.
Restricted Stock and Restricted Stock Units.
Restricted stock consists of shares that the Company transfers or sells to a Participant that are subject to a substantial risk of forfeiture and to restrictions on their sale or other transfer by the Participant. RSUs are the right to receive shares at a future date after vesting upon the satisfaction of certain conditions and restrictions. The Committee determines the eligible Participants to whom, and the times at which, grants
of restricted stock or RSUs will be made, the number of shares or units to be granted, the price to be paid, if any, the times within which the shares covered by the grants will be subject to forfeiture, the times at which the restrictions will terminate, and all other terms and conditions of the grants. Restrictions or conditions could include, but not be limited to, the attainment of performance goals (as described below),
ADVISORY VOTES ON EXECUTIVE COMPENSATION EVERY THREE YEARS.
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continuous service with us, the passage of time or other restrictions or conditions. Awards of restricted stock may require that dividends paid on shares of restricted stock be withheld by the Company until all restrictions on the shares
have lapsed. At the discretion of the Committee, dividend equivalents may be granted with respect to RSUs, subject to such limitations as may be determined by the Committee.
A Participant who is granted a stock bonus has the right to receive shares of Stock in accordance with the terms of such grant.
Awards under the Restated Plan may be made subject to the attainment of performance goals relating to one or more business criteria, but limited to: net earnings (either before or after interest, taxes, depreciation or amortization), economic value-added (as determined by the Committee), total shareholder return, sales or revenue, net income (either before or after taxes), operating earnings or income, cash flow (including, but not limited to, operating cash flow and free cash flow), cash flow return on capital, return on investment, return on shareholders’ equity, return on assets or net assets,
return on capital, debt reduction, shareholder returns, return on sales, gross or net profit margin, productivity, expense, margins, operating efficiency, cost reduction or savings, customer or employee satisfaction, customer orders, development or certification of products, quality, delivery, safety, working capital, earnings or diluted earnings per share, price per share of Company Stock, and market share, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group (“Performance Criteria”).
Except as provided below, (a) any Option or SAR awarded to a Participant other than a non-employee director that vests solely on the basis of the passage of time may not vest more quickly than ratably over three years from the date of grant, and (b) any Option or SAR awarded to a non-employee director that vests solely on the basis of the passage of time may not vest sooner than six months from the date of grant. However, Options or SARs may vest sooner, in the event of: (i) the Participant’s death, disability or retirement, (ii) job loss due to workforce reduction, job elimination or divestiture, (iii) upon a change in control, or (iv) in connection with establishing the terms and conditions of employment of an individual necessary for the recruitment of the individual or as the result of a business combination or acquisition by the Company or its subsidiaries.
Except as provided below, (a) any restricted stock or RSUs awarded to a Participant other than a non-employee director that vests solely on the basis of the passage of time may not vest more quickly than ratably over three years from the date of grant, and (b) any restricted stock or RSUs awarded to a non-employee director that vest on the basis of passage of
time may not vest sooner than six months from the date of grant. However, restricted stock and RSUs may vest more quickly, in the event of (i) death or disability, (ii) job loss due to workforce reduction, job elimination or divestiture, or (iii) upon a change in control. RSUs may also vest more quickly in the event of retirement, and restricted stock and RSUs made in conjunction with the recruitment of new employees or as a result of a business combination or acquisition by the Company or its subsidiaries may not be subject to the same minimum time-based vesting requirement.
Notwithstanding the foregoing, the Committee may, in its absolute discretion, without amendment to the Restated Plan, (i) accelerate the date on which any Option or SAR granted under the Restated Plan becomes exercisable, (ii) waive or amend the operation of the Restated Plan provisions respecting exercise after termination of service, or otherwise adjust any of the terms of the Option or SAR, or (iii) accelerate the vesting date of an award, or waive any condition imposed under the Restated Plan with respect to any share of Restricted Stock or RSU, or otherwise adjust any of the terms applicable to an Award.
Amendment of the Restated Plan
The Board has the right and power to amend the Restated Plan, provided, however, that the Company will obtain shareholder approval of any amendment of the Restated Plan to the extent the Board determines in its judgment that approval is appropriate (i) for purposes of ensuring that
awards intended to be ISOs qualify under Section 422 of the Code, or (ii) as otherwise required under any applicable rule or listing standard of any stock exchange, automated quotation system or similar organization, or the New York Business Corporation Law.
Termination of the Restated Plan
The Board may suspend or terminate the Restated Plan at any time. The right to grant awards under the Restated Plan is scheduled to terminate on the 10-year anniversary of
shareholder approval of the 2017 Plan, or May 31, 2027. Termination will not in any manner impair or adversely affect any award outstanding at the time of termination.
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In connection with a Change in Control, the Committee is authorized to take one or more of the following actions: (i) to provide for either (a) termination of any award in exchange for an amount of cash or other property, if any, equal to the amount that would have been attained upon the exercise of the award or realization of the Participant’s rights, or (b) replacement of the award with other rights or property selected by the Committee in its sole discretion, (ii) to provide that an award be assumed by the successor or survivor corporation, or by a parent or subsidiary of the corporation, or be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or of a parent or subsidiary of the corporation, with appropriate adjustments as to the number and kind of shares and prices, (iii) to provide that an award may be exercisable or payable or fully vested with respect to all or a portion of the shares covered by the award, notwithstanding anything to the contrary in the Restated Plan or the applicable award agreement, or (iv) to provide that an award cannot vest, be exercised or become payable after the transaction or event.
For purposes of the Restated Plan, a “Change in Control” means:
(i)
| one person (or more than one person acting as a |
group) acquires ownership of Company Stock that, together with the stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the Company Stock;
(ii)
| one person (or more than one person acting as a group) acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) ownership of the Company Stock possessing 30% or more of the total voting power of the stock of such corporation; |
(iii)
| a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or |
(iv)
| one person (or more than one person acting as a group), acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately before such acquisition(s). |
In the event of changes in the outstanding Company Stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock distribution, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization, awards granted under the Restated Plan and
any award agreement, the exercise price of Options and SARs, the limitations on individual grants and the maximum number of shares of Company Stock or Class B Stock subject to all awards will be equitably adjusted or substituted, as to the number, price or kind of a share of Company Stock or other consideration subject to such awards to the extent necessary to preserve the economic intent of such award.
To the extent that an award under the Restated Plan terminates, expires, is cancelled, forfeited, or lapses for any reason, or if an award is settled by payment of cash, any shares of Stock subject to the award shall again be available for the grant of an award under the Restated Plan. Shares that are used to pay the exercise price of an Option, shares withheld to satisfy tax withholding obligations and shares covered by a stock-settled SAR or other award that were not issued upon the settlement of the award will not be available for further grants of awards
under the Restated Plan. To the extent permitted by applicable law or any exchange rule, shares of the Company’s Stock issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by the Company or any of the Company’s subsidiaries will not be counted against shares of Stock available for grant under the Restated Plan. Dividend equivalents payable in cash will not be counted against the shares available for issuance under the Restated Plan.
Any award that is subject to recovery under any law, government regulation, stock exchange listing requirement or policy adopted by the Company will be subject to such
deductions and clawback as may be required under the applicable law, regulation, listing requirement or Company policy.
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U.S. Federal Income Tax Consequences
The Company has been advised by counsel that the federal income tax consequences as they relate to awards are as follows:
ISOs.
A Participant does not generally recognize taxable income upon the grant or upon the exercise of an ISO, but the Company is generally not entitled to an income tax deduction upon the grant or exercise of an ISO. However, the exercise of an ISO may for some Participants trigger liability for the alternative minimum tax. Upon the sale of ISO shares, the Participant recognizes income in an amount equal to the difference, if any, between the exercise price of the ISO shares and the fair market value of those shares on the date of sale. The income is taxed at long-term capital gains rates if the Participant has not disposed of the stock within two years after the date of the grant of the ISO and has held the shares for at least one year after the date of exercise. The holding period requirements are waived when an Optionee dies. If an Optionee sells ISO shares before having held them for at least
one year after the date of exercise and two years after the date of grant (a “disqualifying disposition”), the Optionee recognizes ordinary income to the extent of the lesser of: (i) the gain realized upon the sale, or (ii) the difference between the exercise price and the fair market value of the shares on the date of exercise. Any additional gain in excess of fair market value of the shares on the date of exercise is generally treated as long-term or short-term capital gain depending upon how long the Optionee has held the ISO shares prior to disposition. In a year of a disqualifying disposition, the Company is allowed an income tax deduction in an amount equal to the ordinary income that the Optionee recognizes as a result of the disposition, subject to any applicable limitations under Section 162(m) of the Code.
A Participant receiving an NQSO will not recognize income, and the Company will not be allowed an income tax deduction, at the time the award is granted. Upon the exercise of the NQSO, the Participant recognizes ordinary income to the extent the fair market value of the shares received upon exercise of the NQSO on the date of exercise exceeds the exercise price, and the Company expects that it will be
allowed a corresponding income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Code. Any gain that the Participant realizes when he or she later sells or disposes of the shares will be short-term or long-term capital gain, depending on how long the shares were held.
A Participant receiving a SAR will not recognize income, and the Company will not be allowed an income tax deduction, at the time the award is granted. When the Participant exercises the SAR, the amount of cash and the fair market value of any
shares received will be ordinary income to the Participant and the Company expects that it will be allowed a corresponding income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Code.
Unless a Participant makes an election to accelerate recognition of income to the date of grant as described below, the Participant will not recognize income, and the Company will not be allowed a tax deduction, at the time the restricted stock award is granted, provided that the award is subject to restrictions on transfer and is subject to a substantial risk of forfeiture. When the restrictions lapse, the Participant will recognize ordinary income equal to the fair market value of the shares as of that date (less any amount he or she paid for the shares), and the Company will be allowed a corresponding income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Code. If the Participant files an election under Section 83(b) of the Code within 30 days after the date of grant of the restricted stock, he or she will recognize ordinary income as of the date of grant equal to the fair market value of the shares as of that date (less any
amount paid for the stock), and the Company will be allowed a corresponding income tax deduction at that time, subject to any applicable limitations under Section 162(m) of the Code. Any future appreciation in the stock will be taxable to the Participant at capital gains rates. However, if the shares are later forfeited, the Participant will not be able to recover tax previously paid pursuant to the Section 83(b) election. To the extent unrestricted dividends are paid during the restricted period under the applicable award agreement, any such dividends will be taxable to the Participant at ordinary income tax rates and will generally be deductible by the Company (subject to any applicable limitations under Section 162(m) of the Code), unless the Participant has made a Section 83(b) election, in which case the dividends will thereafter be taxable to the Participant as dividends and will not be deductible by the Company.
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A Participant will not recognize income, and the Company will not be allowed an income tax deduction, at the time an RSU award is granted. Upon receipt of any shares (or the equivalent value in cash) in settlement of the RSU, a Participant will recognize ordinary income equal to the fair
market value of the shares or other property as of that date, and the Company will be allowed a corresponding income tax deduction at that time, subject to any limitations under Section 162(m) of the Code.
A Participant will recognize ordinary income as of the date of grant of a stock bonus equal to the fair market value of the shares as of that date, and the Company will generally be allowed a corresponding income tax deduction at that time,
subject to any limitations under Section 162 of the Code. Any gain that the Participant realizes when he or she later sells or disposes of the shares will be short-term or long-term capital gain, depending on how long the shares were held.
Code Section 162(m) Deduction Limit
Generally, the Company is entitled to a deduction based on the amount of ordinary income a Participant recognizes with respect to an Award. However, Section 162(m) of the Code imposes a $1 million limit on the amount a public company may deduct for compensation paid in a year to the company’s principal executive officer, principal financial officer, or any of the company’s three other most highly compensated executive officers who are employed in such role at any time
during the year (each, a “covered employee”). Once an individual is a covered employee in a taxable year beginning after December 31, 2016, the individual remains a covered employee, even after termination of employment. While the Committee considers the impact of Section 162(m) of the Code when granting Awards, the Committee reserves the right to grant or approve Awards or compensation that are non-deductible.
Section 409A of the Code covers most programs that defer the receipt of compensation to a succeeding taxable year and provides strict rules for elections to defer (if any) and for timing of payouts. If the requirements of Section 409A of the Code are not met, the taxable events described above could apply earlier than described, and could result in the imposition
of additional taxes and penalties on the Participant. All awards that comply with the terms of the Restated Plan, however, are intended to be exempt from the application of Section 409A of the Code or meet the requirements of Section 409A of the Code, in order to avoid early taxation and penalties.
| THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL TO APPROVE THE AMENDMENT AND RESTATEMENT OF THE ASTRONICS CORPORATION 2017 LONG TERM INCENTIVE PLAN.
| |
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The Company’s named executive officers are: Peter J. Gundermann, Chairman, President and Chief Executive Officer of the Company; David C. Burney, Executive Vice President- Finance, Chief Financial Officer and Treasurer of the Company; James S. Kramer, Executive Vice President of the Company and President of Luminescent Systems, Inc. and Astronics DME LLC; Michael C. Kuehn, Executive Vice President of the Company and President of Astronics Connectivity Systems & Certification Corp. and Astronics AeroSat Corporation; James F. Mulato, Executive Vice President of the Company and President of Astronics Test Systems, Inc.; and Mark A. Peabody, Executive Vice President of the Company and President of the Aerospace Segment of the Company.
The Company’s compensation philosophy and program objectives are directed by two primary guiding principles. First, the program is intended to provide levels of compensation sufficient to attract, motivate and retain talented executives. Second, the program is intended to create an alignment of interests between the Company’s executives and shareholders such that a portion of each executive’s compensation is directly linked to maximizing long-term growth of shareholder value.
The Company’s goals are to outperform its industry, in terms of growth, financial performance, and innovation. In support of these goals, the executive compensation program is designed to energize its executive officers to outperform its industry and to reward performance that is directly relevant to the Company’s short-term and long-term success. As such, the
Company provides both short-term and long-term incentives. The Compensation Committee has structured the executive compensation program with three primary underlying components: base salary, cash bonus and long-term incentives. The Company’s
compensation objective is to (i) compensate its executive officers at a base level that is competitive with salaries near the average salaries paid by companies of similar size and nature, (ii) provide the opportunity for its executive officers to earn additional compensation in the form of annual cash bonuses, and (iii) design long-term incentive plans to focus executive efforts on the long-term goals of the Company and to maximize total return to the Company’s shareholders, while taking into account the Company’s performance and strategic goals.
The Compensation Committee utilizes its expertise and knowledge of the markets in which the Company competes for employees in determining compensation policy. In addition, the Compensation Committee may consult broad-based, third-party survey data to obtain a general understanding of current compensation practices of companies of similar size and industry.
The Company does not have a policy regarding hedgingthe ability of employees or pledging ofdirectors to purchase financial instruments (including prepaid forward variable contracts, equity swaps, collars, and exchange funds) or to otherwise hedge or pledge Company stock, and as such these types of hedging transactions are generally permitted.
The Compensation Committee approves the salaries paid to the Company’s executive officers and, as part of its responsibilities, reviews these salaries annually. Individual salary changes are based on a combination of factors such as the performance of the executive, salary level relative to the
competitive market, level of responsibility, growth of Company operations and experience of the executive. In appropriate circumstances, the Compensation Committee considers the recommendations of the Company’s Chief Executive Officer.
The Compensation Committee has the authority to award discretionary annual incentive cash bonuses to the Company’s executive officers. Annual incentive bonuses are intended to compensate officers for achieving financial, strategic and operational success. Bonuses are not tied to specific, objective targets such as achieving a particular profit level. The Compensation Committee considers a number of factors in determining bonuses. Factors considered include profitability, sales growth over the most recent two- or three-year period, the performance of the individual in the view of the Compensation Committee, comparisons to external broad-based compensation
data provided by a third party for the purpose of obtaining a general understanding of compensation practices of companies of similar size and industry and available information with respect to the aerospace and defense industry. Bonuses are not capped. Bonuses are reviewed and approved by the Compensation Committee. In appropriate circumstances, the Compensation Committee considers the recommendations of the Company’s Chief Executive Officer. In 2020 and 2021, cash bonuses were suspended as a result ofthe Company recovered from the impact of the COVID-19 pandemic on the Company. In 2022, no cash bonuses were paid due to financial performance of the Company as the Company and the aerospace industry continue to recover from the impact of the COVID-19 pandemic.
The Company believes that long-term performance is achieved through an ownership culture that incentivizes its executive officers through the use of stock-based awards. The Company’s stock option plans and the Company’s 2017 Long Term Incentive Plan, as Amended and Restated in May 2021 (the “LTIP”) werewas established to provide
certain of the Company’s employees, including its executive officers, with incentives to help align those employees’ interests with
the long-term interests of the Company’s shareholders. The Compensation Committee believes that the use of stock-based awards is an important element of achieving
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its compensation goals. The Company’s broad-based Employee Stock Purchase Plan, its prior stock option plans, and 2017 Long Term Incentive Planthe LTIP have provided the principal methods for its executive officers to acquire equity or equity-linked
interests in the Company. The proposed amendment and restatement of the LTIP to be submitted to a vote of shareholders at the Annual Meeting is consistent with these objectives.
Astronics Corporation 2017 Long Term Incentive Plan
In May 2017, the 2017 Long Term Incentive Plan was approved by shareholders, providing for the grant of 1,757,040 shares of stock-based awards. This amount included 757,040 shares previously available for issuance under the 2005 Director Stock Option Plan and the 2011 Stock Option Plan, plus an additional 1,000,000 shares. In May 2021, the Amended and Restated 2017 Long Term Incentive Plan was approved by shareholders, providing for an increase in the
number of shares of stock with respect to which awards may be issued under the LTIP from 1,757,040 to 3,144,774. The LTIP provides a more flexible framework that permits the development and implementation of a variety of stock-based incentives which
enables the Company to base awards on key performance metrics as well as to further align its long-term incentive compensation with peers and shareholder interests.
An amendment and restatement of the LTIP will be presented to shareholders for approval at the meeting on May 25, 2021. See discussion under Proposal 3 at page 28 for additional information.The LTIP authorizes the Company to grant options to purchase shares of common stock to its employees. Prior to approval of the LTIP, the Company issued options to executive officers and key employees under its 2011 Stock Option Plan. No new issuances will be made under the 2011 Stock Option Plan. The goal of stock options is to create long-term incentives for key employees to maximize future performance of the Company. The Compensation Committee is the administrator of the 2017 Long Term Incentive Plan.LTIP. Stock option grants generally are made annually or at the commencement of employment. Stock options awarded to employees that vests solely on the basis of time may not vest more quickly than ratably over three years from the date of grant, except in certain circumstances such as death, disability, retirement, termination of employment due to workforce reduction or job elimination, change in control or in connection with the establishment of terms and conditions of employment necessary for recruitment or as a result of a business combination or acquisition. Recipients may not dispose of any shares acquired pursuant to an exercise of stock options until a date which is at least two years from the date of grant of the stock option and at least one year after the date of exercise of the stock option. The Compensation Committee reviews and approves equity awards to executive officers based upon a review of competitive compensation data, its expectation of future individual
each executive’s existing long-term incentives and retention considerations. Periodic stock option grants are made at the discretion of the Compensation Committee to eligible employees and, in appropriate circumstances, the Compensation Committee considers the recommendations of the Company’s Chief Executive Officer.
The Compensation Committee’s practice has generally been to award options at its December meeting, except that no options were awarded in 2020 as the Compensation Committee’s meeting was delayed until January 2021.
In December 2022, the Named Executive Officers were awarded stock options under the LTIP in the amounts indicated in the section entitled “Grants of Plan-Based Awards” on page 43 below. Stock options granted by the Company have an exercise price equal to the fair market value of the Common Stock on the day of grant
typically straight-line vest 20% per annum based upon continued employment over a 5-year period, and generally expire 10 years after the date of grant.
The stock options awarded in December 2022 straight-line vest 33-1/3% per annum based on continued employment. Incentive stock options also include certain other terms necessary to assure compliance with the Internal Revenue Code of 1986, as amended.
No stock options were awarded in 2020. In 2020,2022, the Company issued performance-based restricted stock units (“RSUs”) to named executive officers and time-based restricted stock units to key employees. RSUs awarded to employees that vest solely on the basis of passage of time may not vest more quickly than ratably over three years from the date of grant, except in certain circumstances such as death, disability, retirement, termination of employment due to workforce reduction or job elimination, change in control or in connection with the
establishment of terms and conditions of employment necessary for recruitment or as a result of a business combination or acquisition. Recipients of RSUs may not sell or otherwise dispose of the shares issued upon settlement of RSUs until six months following the date of issuance of such shares. The Compensation Committee’s practice has been to award RSUs at its February meeting when the audit for the prior fiscal year is typically substantially complete.
In February
2020,2022, the Company issued performance-based restricted stock units to Messrs. Gundermann, Burney, Kramer, Peabody, Mulato and Kuehn in the amounts indicated in the section entitled “Grants of Plan-Based Awards” on page
4443 below. The performance criteria for issuance of such awards is based on the Company’s average annual Adjusted EBITDA for the period of January 1,
20202022 through December 31,
2022.2024. Adjusted EBITDA is defined as the Company’s earnings before interest, taxes, depreciation, and amortization, adjusted by the Compensation Committee in its sole discretion for any extraordinary, unusual or nonrecurring events, including, but not limited to
gains or losses on sales of businesses, insurance
proceeds, legal reserves or settlements, certain asset impairments or unique investments in R&D projects. The
For purposes of determining the vesting of the performance-based RSUs issued in 2022, the target number of RSUs will be earned if the Company’s mathematical average annual Adjusted EBITDA for the performance period of January 1, 2022 to December 31, 2024 is less than 15%, but at least equal to 10%, of the Company’s mathematical average annual revenue for the performance period. The threshold number of RSUs will be earned if the average annual Adjusted EBITDA is less than 10% of the average annual revenue for the performance period. The maximum number of RSUs will be earned if the average annual Adjusted EBITDA is greater than or equal to 15% of the average annual revenue for the performance period. Each RSU will be settled in one share of Common Stock.
While the Company does not presently have stock ownership guidelines for executive officers, the Named Executive Officers as a class currently hold 1.6%2.7% of the Common Stock and 23.3%24.7% of the Class B Stock of the Company. The Company believes this aligns management’s interests with shareholder
interests. See “Security Ownership of Certain Beneficial Owners and Management” on page
5354 below. As described on page
2325, the Company does require ownership by each member of the Board of Directors.
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The Company has entered into an Employment Termination Benefits Agreement with each of Messrs. Gundermann, Burney, Kramer and Peabody, as described on page
4948 below. In addition, as described in the “Pension Benefits” section beginning on page
4746 below, Mr. Gundermann is a participant
in the SERP, while Messrs. Burney, Kramer and Peabody are each participants in the SERP II. The Company has not entered into an Employment Termination Benefits Agreement with Mr. Kuehn or Mr. Mulato. Neither Messrs. Kuehn nor Mulato are participants in the SERP or SERP II.
The Role of Shareholder Say-on-Pay Votes
The Company provides its shareholders with the opportunity to cast an advisory vote every three years on its executive compensation program (referred to as a “say-on-pay proposal”). At the Company’s Annual Meeting of Shareholders held on May 21, 2020, approximately 88% of the votes cast on the say-on-pay proposal at that meetingAnnual Meeting were voted in favor of the proposal. The Compensation Committee believes
believes that this result affirms shareholders’ support of the Company’s approach to executive compensation, and therefore maintained this approach in 2020.2021 and 2022. The Compensation Committee will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for named executive officers.
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COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the “Committee”) determines the compensation of the Chief Executive Officer and other executive officers of the Company. The Committee is composed entirely of directors who are neither executive officers nor employees of the Company. In addition to determining the salary and bonus compensation for the Company’s executive officers, the Committee determines the grants under the Company’s Amended and Restated 2017 Long Term Incentive Plan and oversees the administration of other compensation plans and programs.
The Committee has reviewed the Compensation Discussion and Analysis contained elsewhere in this proxy statement and has discussed it with management. In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors (and the Board has approved) that the Compensation Discussion and Analysis be included in this proxy statement and in the Annual Report on Form 10-K for the year ended December 31, 20202022 for filing with the Securities and Exchange Commission.
| | April 13, 202111, 2023 | | | Neil Kim, Chairman
Raymond W. Boushie Co-Chairman
Tonit Calaway, Co-Chairman
Warren C. Johnson
Robert S. Keane
Neil Kim
Mark Moran | |
In accordance with and to the extent permitted by applicable law or regulation, the information contained in the Report of Audit Committee of Astronics Corporation shall not be incorporated by reference into any future filing under the Securities Act or the Exchange Act and shall not be deemed to be “soliciting material” or to be “filed” with the SEC under the Securities Act or the Exchange Act.
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Distinguishing “Awarded” Pay from “Reported” Pay
In reviewing executive compensation, it is important to distinguish the reported compensation provided to Named Executive Officers from the compensation that was actually awarded to Named Executive Officers. The Company has provided the following additional compensation table in order to remove the volatility related to the effects of changes in actuarial assumptions on the value of the Named Executive Officers’ pension benefits as required to be disclosed in the
Summary Compensation Table. This table is not a substitute for the Summary Compensation Table, which appears on the next page.
The table below shows the total compensation required to be reported in the Summary Compensation Table, but excluding any change in pension value.
| | Name and Principal Position | | Year | | Salary | | Bonuses | | Stock
Awards(1) | | Option
Awards(2) | | All Other
Compensation | | Total | | Name and Principal Position | | Year | | Salary | | Bonuses | | Stock
Awards(1) | | Option
Awards(2) | | All Other
Compensation | | Total | |
| | Peter J. Gundermann,
President and Chief Executive Officer | | | 2020 | | $571,460 | | — | | td00,346 | | — | | $59,410(3) | | $831,216 | | Peter J. Gundermann,
President and Chief Executive Officer | | | 2022 | | $588,604 | | — | | td00,010 | | $800,000 | | $51,713(4) | | td,640,327 | |
| | 2019 | | $560,300 | | $342,178 | | $65,970 | | $799,884 | | $76,930 | | td,845,262 | | | 2021 | | $571,460 | | — | | td17,230 | | td,600,279(3) | | $63,668 | | td,452,637 | |
| | 2018 | | $549,270 | | $478,827 | | $70,633 | | $531,243 | | td00,378 | | td,730,351 | | | 2020 | | $571,460 | | — | | td00,346 | | — | | $59,410 | | $831,216 | |
| | ���
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | David C. Burney,
Executive Vice President – Finance and Chief Financial Officer | | | 2020 | | $355,550 | | — | | td30,446 | | — | | $41,655(4) | | $527,651 | | David C. Burney,
Executive Vice President – Finance and Chief Financial Officer | | | 2022 | | $366,217 | | — | | td30,176 | | $150,054 | | $38,215(5) | | $684,662 | |
| | 2019 | | $343,500 | | td37,272 | | $39,827 | | td50,008 | | $55,929 | | $826,536 | | | 2021 | | $355,550 | | — | | td41,077 | | $300,238(3) | | $40,445 | | $837,310 | |
| | 2018 | | $331,888 | | td36,221 | | $42,856 | | td28,421 | | $43,941 | | $783,327 | | | 2020 | | $355,550 | | — | | td30,446 | | — | | $41,655 | | $527,651 | |
| |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | James S. Kramer,
Executive Vice President | | | 2020 | | td92,932 | | — | | td20,109 | | — | | $33,677(5) | | $446,718 | | James S. Kramer,
Executive Vice President | | | 2022 | | $301,720 | | — | | td20,006 | | $150,054 | | $28,846(6) | | $600,626 | |
| | 2019 | | td84,400 | | td69,596 | | $33,453 | | td50,008 | | $33,219 | | $770,676 | | | 2021 | | td92,932 | | — | | td28,754 | | $300,238(3) | | $30,889 | | $752,813 | |
| | 2018 | | td78,827 | | td18,952 | | $36,014 | | td07,806 | | $33,980 | | $675,579 | | | 2020 | | td92,932 | | — | | td20,109 | | — | | $33,677 | | $446,718 | |
| |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | Michael C. Kuehn,Executive Vice President(6) | | | 2020 | | $369,342 | | — | | td70,319 | | — | | $14,250(7) | | $553,911 | | Michael C. Kuehn,
Executive Vice President | | | 2022 | | $380,422 | | — | | td70,178 | | $200,072 | | $9,150(7) | | $759,822 | |
| | 2019 | | $362,100 | | td17,260 | | $88,765 | | td00,195 | | $14,000 | | $882,320 | | | 2021 | | $369,342 | | — | | td81,419 | | $400,521(3) | | $11,933 | | $963,215 | |
| |
| | | | | | | | | | | | | | | | | 2020 | | $369,342 | | — | | td70,319 | | — | | $14,250 | | $553,911 | |
| | James F. Mulato,
Executive Vice President(8) | | | 2020 | | $348,962 | | — | | td70,319 | | — | | td31,605(9) | | $650,886 | |
| | | | | | | | | | | | | | | |
| | 2019 | | $338,800 | | $426,410 | | $83,039 | | td00,195 | | $43,882 | | td,092,326 | | James F. Mulato,
Executive Vice President | | | 2022 | | $359,430 | | — | | td70,178 | | $200,072 | | $30,025(8) | | $759,705 | |
| | 2018 | | $332,194 | | td63,271 | | $85,134 | | td76,674 | | $49,895 | | $807,168 | | | 2021 | | $348,962 | | — | | td80,604 | | $400,521(3) | | $32,112 | | $962,199 | |
| |
| | | | | | | | | | | | | | | | | 2020 | | $348,962 | | — | | td70,319 | | — | | td31,605 | | $650,886 | |
| | Mark A. Peabody,
Executive Vice President and President of Aerospace Segment | | | 2020 | | $461,739(10) | | — | | td30,446 | | — | | $14,250(7) | | $606,435 | |
| | | | | | | | | | | | | | | |
| | 2019 | | $373,500 | | $322,544 | | $43,932 | | td50,008 | | $14,000 | | $903,984 | | Mark A. Peabody,
Executive Vice President and President of Aerospace Segment | | | 2022 | | $495,399 | | — | | td60,008 | | $150,054 | | $9,150(7) | | $814,611 | |
| | 2018 | | $366,231 | | $337,886 | | $47,145 | | td41,706 | | $14,126 | | $907,094 | | | 2021 | | $480,970 | | — | | td74,589 | | $300,238(3) | | $16,035 | | $971,832 | |
| | | | 2020 | | $461,739 | | — | | td30,446 | | — | | $14,250 | | $606,435 | |
(1)
| The amounts reported in the “Stock Awards” column reflect the fair value of restricted stock units (“RSUs”) on the grant date of the award. The total fair value of the RSU award is calculated in accordance with FASB ASC Topic 718. The amounts do not reflect the actual amount that may be realized by the executive officers. A discussion of the assumptions used in calculating these values is in Note 16 to the audited financial statements in the Astronics Corporation Annual Report on Form 10-K for the year ended December 31, 2020.2022. |
(2)
| The amounts reported in the “Option Awards” column reflect the fair value on the grant date of the award. The total fair value of the option award is calculated in accordance with FASB ASC Topic 718. The amounts do not reflect the actual amount that may be realized by the executive officers. A discussion of the assumptions used in calculating these values is in Note 16 to the audited financial statements in the Astronics Corporation Annual Report on Form 10-K for the year ended December 31, 2020.2022. |
(3)
| Stock options have historically been awarded in December of each year, but as the Compensation Committee did not meet in December 2020, no stock options were awarded in 2020 and were instead awarded in January 2021. Separate awards were made in December 2021 in accordance with the usual practice. |
(4)
| Represents personal use of company automobile, club fees and dues,personal use of company plane, contribution to a medical reimbursement plan, personal financial planning and tax return preparation expense, personal use of company plane of $12,278, gross up for income taxes related to benefits of $15,845$14,765 and the contribution to the Company’s Profit Sharing/401K Plan made by the Company of $14,250.Company. |
(4)
(5)
| Represents club fees and dues of $10,106, automobile allowance, contribution to a medical reimbursement plan, gross up for income taxes related to benefits and the contribution to the Company’s Profit Sharing/401K Plan made by the Company of $14,250.Company. |
(5)
(6)
| Represents club fees and dues, gross up for income taxes related to benefits of $10,005 and the contribution to the Company’s Profit Sharing/401K Plan made by the Company of $14,250. |
(6)
| Mr. Kuehn became a Named Executive Officer and Executive Vice President of the Company on January 1, 2019. Mr. Kuehn is not a participant in the SERP or SERP II.Company. |
(7)
| Represents the contribution to the Company’s Profit Sharing/401K Plan made by the Company of $14,250.Company. |
(8)
| Mr. Mulato is not a participant in the SERP or SERP II. |
(9)
| Represents relocation allowance of $67,148, club fees and dues, automobile allowance of $14,356, gross up for income taxes related to benefits of $25,855 and the contribution to the Company’s Profit Sharing/ 401K Plan made by the Company of $14,250. |
(10)
| Mr. Peabody’s salary was increased in 2020 as a result of his assumption of a new role as President of the Aerospace Segment of the Company. |
TABLE OF CONTENTS
Summary Compensation Table
The following table sets forth the cash compensation as well as certain other compensation earned by the Company’s Named Executive Officers during the years ended December 31, 2020, 20192022, 2021 and 2018.2020. Such amounts do not reflect actual cash received by the Named Executive Officers in 2020, 20192022, 2021 or 2018.2020.
Amounts reflected under the “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” are primarily the result of a decrease from the prior year in the discount rate applied to calculate the present value of such benefits. No payments were made and no changes were made under the SERP or SERP II.
| | Name and Principal Position | | Year | | Salary | | Bonuses | | Stock
Awards(1) | | Option
Awards(2) | | Change in Pension
Value and Non-Qualified
Deferred
Compensation Earnings(3) | | All Other
Compensation | | Total | | Name and Principal Position | | Year | | Salary | | Bonuses | | Stock
Awards(1) | | Option
Awards(2) | | Change in Pension
Value and
Non-Deferred
Compensation
Earnings(3) | | All Other
Compensation | | Total | |
| | Peter J. Gundermann,
President and Chief Executive Officer | | | 2020 | | $571,460 | | — | | td00,346 | | — | | td,953,301 | | $59,410(4) | | td,784,517 | | Peter J. Gundermann,
President and Chief Executive Officer | | | 2022 | | $588,604 | | — | | td00,010 | | $800,000 | | — | | $51,713(5) | | td,640,327 | |
| | 2019 | | $560,300 | | $342,178 | | $65,970 | | $799,884 | | td,916,098 | | $76,930 | | $3,761,360 | | | 2021 | | $571,460 | | — | | td17,230 | | td,600,279(4) | | — | | $63,668 | | td,452,637 | |
| | 2018 | | $549,270 | | $478,827 | | $70,633 | | $531,243 | | $— | | td00,378 | | td,730,351 | | | 2020 | | $571,460 | | — | | td00,346 | | — | | td,953,301 | | $59,410 | | td,784,517 | |
| |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | David C. Burney,
Executive Vice President – Finance and Chief Financial Officer | | | 2020 | | $355,550 | | — | | td30,446 | | — | | $843,997 | | $41,655(5) | | td,371,648 | | David C. Burney,
Executive Vice President – Finance and Chief Financial Officer | | | 2022 | | $366,217 | | — | | td30,176 | | $150,054 | | — | | $38,215(6) | | $684,662 | |
| | 2019 | | $343,500 | | td37,272 | | $39,827 | | td50,008 | | $952,705 | | $55,929 | | td,779,241 | | | 2021 | | $355,550 | | — | | td41,077 | | $300,238(4) | | — | | $40,445 | | $837,310 | |
| | 2018 | | $331,888 | | td36,221 | | $42,856 | | td28,421 | | $— | | $43,941 | | $783,327 | | | 2020 | | $355,550 | | — | | td30,446 | | — | | $843,996 | | $41,655 | | td,371,647 | |
| |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | James S. Kramer,
Executive Vice President | | | 2020 | | td92,932 | | — | | td20,109 | | — | | $648,629 | | $33,677(6) | | td,095,347 | | James S. Kramer,
Executive Vice President | | | 2022 | | $301,720 | | — | | td20,006 | | $150,054 | | — | | $28,846(7) | | $600,626 | |
| | 2019 | | td84,400 | | td69,596 | | $33,453 | | td50,008 | | $759,468 | | $33,219 | | td,530,144 | | | 2021 | | td92,932 | | — | | td28,754 | | $300,238(4) | | — | | $30,889 | | $752,813 | |
| | 2018 | | td78,827 | | td18,952 | | $36,014 | | td07,806 | | $— | | $33,980 | | $675,579 | | | 2020 | | td92,932 | | — | | td20,109 | | — | | $648,629 | | $33,677 | | td,095,347 | |
| |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | Michael C. Kuehn,
Executive Vice President(7) | | | 2020 | | $369,342 | | — | | td70,319 | | — | | — | | $14,250(8) | | $553,911 | | Michael C. Kuehn,
Executive Vice President(8) | | | 2022 | | $380,422 | | — | | td70,178 | | $200,072 | | — | | $9,150(9) | | $759,822 | |
| | 2019 | | $362,100 | | td17,260 | | $88,765 | | td00,195 | | — | | $14,000 | | $882,320 | | | 2021 | | $369,342 | | — | | td81,419 | | $400,521(4) | | — | | $11,933 | | $963,215 | |
| |
| | | | | | | | | | | | | | | | | | | 2020 | | $369,342 | | — | | td70,319 | | — | | — | | $14,250 | | $553,911 | |
| | James F. Mulato,
Executive Vice President(9) | | | 2020 | | $348,962 | | — | | td70,319 | | — | | — | | td31,605(10) | | $650,886 | |
| | | | | | | | | | | | | | | | | |
| | 2019 | | $338,800 | | $426,410 | | $83,039 | | td00,195 | | — | | $43,882 | | td,092,326 | | James F. Mulato,
Executive Vice President(10) | | | 2022 | | $359,430 | | — | | td70,178 | | $200,072 | | — | | $30,025(11) | | $759,705 | |
| | 2018 | | $332,194 | | td63,271 | | $85,134 | | td76,674 | | — | | $49,895 | | $807,168 | | | 2021 | | $348,962 | | — | | td80,604 | | $400,521(4) | | — | | $32,112 | | $962,199 | |
| |
| | | | | | | | | | | | | | | | | | | 2020 | | $348,962 | | — | | td70,319 | | — | | — | | td31,605 | | $650,886 | |
| | Mark A. Peabody,
Executive Vice President and President of Aerospace Segment | | | 2020 | | $461,739(11) | | — | | td30,446 | | — | | $784,914 | | $14,250(8) | | td,391,349 | |
| | | | | | | | | | | | | | | | | |
| | 2019 | | $373,500 | | $322,544 | | $43,932 | | td50,008 | | $895,920 | | $14,000 | | td,799,904 | | Mark A. Peabody,
Executive Vice President and President of Aerospace Segment | | | 2022 | | $495,399 | | — | | td60,008 | | $150,054 | | — | | $9,150(9) | | $814,611 | |
| | 2018 | | $366,231 | | $337,886 | | $47,145 | | td41,706 | | $— | | $14,126 | | $907,094 | | | 2021 | | $480,970 | | — | | td74,589 | | $300,238(4) | | $17,278 | | $16,035 | | $989,110 | |
| | | | 2020 | | $461,739 | | — | | td30,446 | | — | | $784,914 | | $14,250 | | td,391,349 | |
(1)
| The amounts reported in the “Stock Awards” column reflect the fair value of restricted stock units (“RSUs”) on the grant date of the award. The total fair value of the RSU award is calculated in accordance with FASB ASC Topic 718. The amounts do not reflect the actual amount that may be realized by the executive officers. A discussion of the assumptions used in calculating these values is in Note 16 to the audited financial statements in the Astronics Corporation Annual Report on Form 10-K for the year ended December 31, 2020.2022. |
(2)
| The amounts reported in the “Option Awards” column reflect the fair value on the grant date of the award. The total fair value of the option award is calculated in accordance with FASB ASC Topic 718. The amounts do not reflect the actual amount that may be realized by the executive officers. A discussion of the assumptions used in calculating these values is in Note 16 to the audited financial statements in the Astronics Corporation Annual Report on Form 10-K for the year ended December 31, 2020.2022. |
(3)
| Represents the annual change in the actuarial present value of accumulated benefits under the Supplemental Retirement Plan (“SERP”) and Supplemental Retirement Plan II (“SERP II”), not actual payments made to the participant or to an account on his behalf. Changes in the actuarial present value of the plans are due to year over year changes to the actuarial assumptions and service costs and are not the result of modifications to the plans. The actuarial estimate is based on a number of assumptions such as interest rates, retirement age, life expectancy and future wages, and assumes each participant will vest in the benefit and that the plan will continue to exist and pay benefits in the future. The change in the actuarial present value increaseddecreased significantly for Messrs. Gundermann, Burney, Kramer and Peabody from 20192021 to 20202022 for SERP and SERP II participants because of a change in the applied discount rate of 3.17%2.75% to 2.42%5.00%. As a result, the actuarial present value of accumulated benefits under the SERP to Mr. Gundermann decreased by $3,454,969, and the actuarial present value of accumulated benefits under SERP II to Messrs. Burney, Kramer and Peabody decreased by $1,379,250, $1,597,051 and $1,080,218, respectively, from 2021 to 2022. |
(4)
| Stock options have historically been awarded in December of each year, but as the Compensation Committee did not meet in December 2020, no stock options were awarded in 2020 and were instead awarded in January 2021. Separate awards were made in December 2021 in accordance with the usual practice. |
(5)
| Represents personal use of company automobile, club fees and dues,personal use of company plane, contribution to a medical reimbursement plan, personal financial planning and tax return preparation expense, personal use of company plane of $12,278, gross up for income taxes related to benefits of $15,845$14,765 and the contribution to the Company’s Profit Sharing/401K Plan made by the Company of $14,250.Company. |
(5)
(6)
| Represents club fees and dues of $10,106, automobile allowance, contribution to a medical reimbursement plan, gross up for income taxes related to benefits and the contribution to the Company’s Profit Sharing/401K Plan made by the Company of $14,250.Company. |
(6)
(7)
| Represents club fees and dues, gross up for income taxes related to benefits of $10,005 and the contribution to the Company’s Profit Sharing/401K Plan made by the Company of $14,250.Company. |
(7)
(8)
| Mr. Kuehn became a Named Executive Officer and Executive Vice President of the Company on January 1, 2019. Mr. Kuehn is not a participant in the SERP or SERP II. |
(8)
(9)
| Represents the contribution to the Company’s Profit Sharing/401K Plan made by the Company of $14,250.Company. |
(9)
(10)
| Mr. Mulato is not a participant in the SERP or SERP II. |
(10)
(11)
| Represents relocation allowance of $67,148, club fees and dues, automobile allowance of $14,356, gross up for income taxes related to benefits of $25,855 and the contribution to the Company’s Profit Sharing/ 401K Plan made by the Company of $14,250. |
(11)
| Mr. Peabody’s salary was increased in 2020 as a result of his assumption of a new role as President of the Aerospace Segment of the Company. |
TABLE OF CONTENTS
In accordance with the final rule issued under Section 953(b) of the Dodd-Frank Act, companies, including Astronics Corporation, are now required to disclose the ratio of the total annual compensation of their CEO to that of their median employee. The SEC rules require disclosure of (i) the median of the annual total compensation of all employees of Astronics Corporation, except the CEO, (ii) the annual total compensation of the CEO, and (iii) the ratio of the amount of the CEO to the amount of the median employee’s annual total compensation of all employees of Astronics Corporation. Because the SEC rules do not mandate a particular approach to determining the median employee, Astronics Corporation has employed the following approach:
Astronics Corporation elected to identify its median employee as of December 31, 2020. The median employee was identified by calculating the total cash compensation granted in 2020 to
all employees, excluding the CEO, employed as of
December 31, 2020. The fixed compensation of employees hired during the year or acquired through acquisition was annualized. As there were no material changes in the employee population or employee compensation arrangements in 2021 or 2022 that the Company reasonably believes would result in a significant change to its pay ratio disclosure, the Company has elected to use the same median employee for purposes of its pay ratio disclosure for 2022. The ratio disclosed below was calculated using the annual total compensation of Mr. Gundermann and of the median employee for 2020.2022.
As calculated using the methodology required for the Summary Compensation Table, the total annual compensation of Mr. Gundermann was $2,784,517$1,640,327 and the total annual compensation of the median employee was $59,020.$63,375. This yields a ratio of 47.18 to 1.
If the ratio were calculated based upon “awarded” pay rather than “reported” as described on page 41, the total annual compensation of Mr. Gundermann would have been $831,216 and the total annual compensation of the median employee would remain as $59,020. This would have yielded a ratio of 14.08 to 1, rather than 47.1825.88 to 1.
EXECUTIVE COMPENSATIONRequired Pay Versus Performance Disclosure
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, the table below includes information to demonstrate the relationship between NEO compensation and certain financial performance measures for fiscal years 2022,
2021 and 2020. For additional information about our performance-based pay philosophy and how we align executive compensation with the Company’s performance, refer to the Compensation Discussion and Analysis beginning on page 31.
| | 2022 | | | $1,640,327 | | | $636,063 | | | $723,885 | | | $474,950 | | | $36.85 | | | $124.79 | | | $(35,747,000) | | | 2.4%
| |
| | 2021 | | | $2,452,637 | | | $894,737 | | | $900,929 | | | $575,557 | | | $42.93 | | | $152.39 | | | $(25,578,000) | | | 7.1%
| |
| | 2020 | | | $2,784,517 | | | $697,168 | | | $1,012,628 | | | $502,327 | | | $47.33 | | | $118.40 | | | $(115,781,000) | | | 10.6%
| |
(1)
| The dollar amounts reported are the total compensation reported for Mr. Gundermann for each fiscal year in the “Total” column of the Summary Compensation Table. |
(2)
| The dollar amounts reported represent the “compensation actually paid” to Mr. Gundermann, who served as our PEO for each of the fiscal years 2022, 2021 and 2020, 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. Gundermann during such fiscal years and are based on valuation assumptions required by the SEC, which are unlikely to reflect actual amounts realized at vesting or exercise (as applicable). In accordance with the requirements of Item 402(v) of Regulation S-K, the reported “Total” in the Summary Compensation Table for the applicable year is adjusted to determine the “compensation actually paid” amount as follows: |
a.
| The amount reflected in the “Stock Award” and “Option Award” columns of the Summary Compensation Table with respect to each NEO has been deducted from the Summary Compensation Table Total and substituted with an equity award value for each year calculated by adding or subtracting, as applicable, the following: (i) the year-end fair value of any equity awards granted in the applicable fiscal year that are outstanding and unvested as of the end of such year; (ii) the change in fair value from the end of the prior fiscal year of any awards granted in prior fiscal years that are outstanding and unvested as of the end of the applicable fiscal year; and (iii) for awards granted in prior fiscal years that vested in the applicable fiscal year, the amount equal to the change in value as of the vesting date (from the end of the prior fiscal year). The valuation assumptions used to calculate fair values on equity awards other than options are the same as those disclosed at the time of grant. |
b.
| The pension benefit value reported in the “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” column of the Summary Compensation Table for each applicable year is adjusted to account for the aggregate of two components: (i) the actuarially determined service cost for services rendered by Mr. Gundermann during the applicable year (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment during the applicable year that are attributed by the benefit formula to services rendered in periods prior to the plan amendment (the “prior service cost”), in each case, calculated in accordance with U.S. GAAP. |
c.
| The following table discloses the amounts deducted from and added to the total compensation of our principal executive officer in determining our principal executive officer’s compensation actually paid for each fiscal year shown in the pay versus performance table: |
| | 2022 | | | $1,640,327 | | | — | | | — | | | $(1,000,010) | | | $221,925 | | | $(125,047) | | | $(101,132) | | | $636,063 | |
| | 2021 | | | $2,452,637 | | | — | | | — | | | $(1,817,509) | | | $260,670 | | | $(12,515) | | | $11,454 | | | $894,737 | |
| | 2020 | | | $2,784,517 | | | $(1,953,301) | | | — | | | $(200,346) | | | $134,615 | | | $(26,967) | | | $(41,350) | | | $697,168 | |
(3)
| The dollar amounts reported represent the average of the amounts reported for the Company’s named executive officers (“NEOs”) as a group (excluding the CEO) in the “Total” column of the Summary Compensation Table in each applicable fiscal year. The names of each of the NEOs included for purposes of calculating the average amounts in each applicable year are David C. Burney, James S. Kramer, Michael C. Kuehn, James F. Mulato and Mark A. Peabody. |
(4)
| The dollar amounts reported represent the average amount of “compensation actually paid” to the NEOs as a group (excluding the CEO), 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 the NEOs as a group (excluding the CEO) during such fiscal years and are based on valuation assumptions required by the SEC, which are unlikely to reflect actual amounts realized at vesting or exercise (as applicable). The average total compensation for the NEOs as a group (excluding the CEO) for each year was adjusted using the same methodology described in footnote (2) to determine the compensation actually paid. |
a.
| The following table discloses the amounts deducted from and added to the average total compensation of our NEOs (excluding the CEO) in determining the average compensation actually paid to our NEOs (excluding the CEO) for each fiscal year shown in the pay versus performance table: |
b.
| | 2022 | | | $723,885 | | | — | | | $27,517 | | | $(320,170) | | | $130,967 | | | $(28,633) | | | $(58,616) | | | $474,950 | |
| | 2021 | | | $900,929 | | | $(3,455) | | | $38,982 | | | $(501,639) | | | $142,908 | | | $(9,016) | | | $6,848 | | | $575,557 | |
| | 2020 | | | $1,012,628 | | | $(455,508) | | | $44,516 | | | $(144,327) | | | $96,976 | | | $(23,629) | | | $(28,329) | | | $502,327 | |
(5)
| Cumulative total shareholder return “TSR” is calculated using the volume-weighted average stock price over starting December 31, 2019 through December 31 of the applicable fiscal year. |
(6)
| Represents the peer group TSR using the volume-weighted average stock price starting December 31, 2019 through December 31 of the applicable fiscal year. The peer group used for this purpose is the S&P 500 Index. |
(7)
| As required by Item 402(v) of Regulation S-K, the Company has determined that average annual Adjusted EBITDA as a percentage of average annual revenue over a three-year period is the Company Selected Measure, as it is the most important financial performance measure (that is not otherwise disclosed in the table) used to link compensation actually paid to the Company’s NEOs to company performance for the most recently completed fiscal year. “Adjusted EBITDA” is defined as the Company’s earnings before interest, taxes, depreciation, and amortization, adjusted for any extraordinary, unusual or nonrecurring events, including, but not limited to insurance proceeds, legal settlements, impairments or unique investments in R&D projects. |
Comparative Analysis of the Pay Versus Performance Table
The Company’s compensation program is designed to attract and retain executives whose talents and contributions sustain long-term growth by aligning their interests with the drivers of shareholder returns and supporting their achievement of the Company’s primary business goals. The Company considers
several performance measures to ensure executives are incentivized to accomplish these objectives, many of which are not presented in the Pay Versus Performance Table. The charts below explain the relationship between the columns presented in the Pay Versus Performance Table.
Company TSR versus Peer Group TSR
Our 1 year, 2 year, and 3-year Total Shareholder Return (“TSR”) compares lower than the S&P 500 Index - Total Return TSR and was at (-52.67%), (-57.07%), and (-63.15%) respectively. TSR is calculated using the volume-weighted average stock price over a 2019-2022 performance period.
These Pay Versus Performance metrics are based on the Company’s TSR on a relative basis against the S&P 500 Index - Total Return. The graph below shows the Company’s cumulative TSR over the three-year period ending with December 31, 2022 as compared to the S&P 500 Index.
Comparison of “Compensation Actually Paid” to Company TSR
The chart below shows the “compensation actually paid” to Mr. Gundermann and average “compensation actually paid”
to the other NEOs as compared to the Company’s cumulative TSR in 2020, 2021 and 2022.
Comparison of “Compensation Actually Paid” to Net Income (Loss)
The chart below shows the “compensation actually paid” to Mr. Gundermann and average “compensation actually paid”
to the other NEOs as compared to the Company’s Net Income (Loss) for 2020, 2021 and 2022.
Comparison of “Compensation Actually Paid” to Company-Selected Measure (Average Annual Adjusted EBITDA as a Percentage of Average Annual Revenue Over a Three-Year Period)
The chart below shows the “compensation actually paid” to Mr. Gundermann and average “compensation actually paid” to the other NEOs as compared to the Company’s average annual Adjusted EBITDA as a percentage of the Company’s
average annual revenue over a three-year period for 2020, 2021 and 2022.
Most Important Performance Measures
The performance measures that Astronics Corporation uses in our executive compensation program are selected based on the objective of incentivizing NEOs to achieve long-term, sustainable growth in shareholder value. As required by
Item 402(v) of Regulation S-K, we have identified the following financial performance measures as being the most important in linking actual compensation paid to executives to the Company’s performance:
| | Average Annual Adjusted EBITDA as a Percentage of Average Annual Revenue Over a Three-Year Period
| |
| | Pre-Tax Income
| |
| | Sales Growth Over the Most Recent Two- or Three-Year Period
| |
Grants of Plan-Based Awards
The following table sets forth information with respect to plan-based awards granted in 20202022 to the executives named in the summary compensation table.
All options and RSUs were granted
pursuant to the Company’s 2017 Long Term Incentive Plan. No options were granted in 2020.LTIP.
| | Name | | Grant Date(1) | | | Estimated Future Payouts Under Equity
Incentive Plan Awards(2) | | | All Other
Option
Awards: Number
of Securities
Underlying
Award | | Exercise or
Base Price of
Option Awards
per share | | Grant Date
Fair Value of
Stock and
Option Awards(3) | | Name | | Grant Date(1) | | | Estimated Future Payouts Under Equity
Incentive Plan Awards (2) | | | All Other
Stock
of Shares
of Stock | | All Other
Option
Awards: Number
Underlying
Award(3) | | Exercise or
Option Awards
per share | | Grant Date
Stock and
Option Awards(4) | |
| | Threshold
(#) | | Target
(#) | | Maximum
(#) | | | Threshold (#) | | Target (#) | | Maximum (#) | |
| | Peter J. Gundermann | | | | | | | | | | | | | | | | Peter J. Gundermann | | | | | | | | | | | | | | | | | |
| | RSUs | | February 28, 2020 | | 7,632 | | 10,175 | | 11,702 | | — | | — | | $200,346 | | Options | | December 16, 2022 | | | | | | | | | | 125,000 | | $9.74 | | $800,000 | |
| | David C. Burney | | | | | | | | | | | | | | | | RSUs | | February 24, 2022 | | 11,063 | | 14,750 | | 16,963 | | | | | | | | $200,010 | |
| | RSUs | | February 28, 2020 | | 4,969 | | 6,625 | | 7,619 | | — | | — | | $130,446 | | David C. Burney | | | | | | | | | | | | | | | | | |
| | James S. Kramer | | | | | | | | | | | | | | | | Options | | December 16, 2022 | | | | | | | | | | 26,700 | | $9.74 | | $150,054 | |
| | RSUs | | February 28, 2020 | | 4,575 | | 6,100 | | 7,015 | | — | | — | | $120,109 | | RSUs | | February 24, 2022 | | 7,200 | | 9,600 | | 11,040 | | | | | | | | $130,176 | |
| | Michael C. Kuehn | | | | | | | | | | | | | | | | James S. Kramer | | | | | | | | | | | | | | | | | |
| | RSUs | | February 28, 2020 | | 6,488 | | 8,650 | | 9,948 | | — | | — | | $170,319 | | Options | | December 16, 2022 | | | | | | | | | | 26,700 | | $9.74 | | $150,054 | |
| | James F. Mulato | | | | | | | | | | | | | | | | RSUs | | February 24, 2022 | | 6,638 | | 8,850 | | 10,178 | | | | | | | | $120,006 | |
| | RSUs | | February 28, 2020 | | 6,488 | | 8,650 | | 9,948 | | — | | — | | $170,319 | | Michael C. Kuehn | | | | | | | | | | | | | | | | | |
| | Mark A. Peabody | | | | | | | | | | | | | | | | Options | | December 16, 2022 | | | | | | | | | | 35,600 | | $9.74 | | $200,072 | |
| | RSUs | | February 28, 2020 | | 4,969 | | 6,625 | | 7,619 | | — | | — | | $130,446 | | RSUs | | February 24, 2022 | | 9,413 | | 12,550 | | 14,433 | | | | | | | | $170,178 | |
| | | James F. Mulato | | | | | | | | | | | | | | | | | |
| | | Options | | December 16, 2022 | | | | | | | | | | 35,600 | | $9.74 | | $200,072 | |
| | | RSUs | | February 24, 2022 | | 9,413 | | 12,550 | | 14,433 | | | | | | | | $170,178 | |
| | | Mark A. Peabody | | | | | | | | | | | | | | | | | |
| | | Options | | December 16, 2022 | | | | | | | | | | 26,700 | | $9.74 | | $150,054 | |
| | | RSUs | | February 24, 2022 | | 8,850 | | 11,800 | | 13,570 | | | | | | | | $160,008 | |
(1)
| The grant date is the date the Compensation Committee of the Board of Directors meets to approve the awards. |
(2)
| Represents the potential payout range related to performance-based Restricted Stock Units awarded to NEOs, subject to achievement of performance targets. The RSUs are earned based upon the Company’s mathematical average annual Adjusted EBITDA as a percentage of the Company’s mathematical average annual revenue for the period beginning January 1, 20202022 and ending December 31, 2022.2024. Adjusted EBITDA is defined as the Company’s earnings before interest, taxes, depreciation, and amortization, adjusted by the Compensation Committee in its sole discretion for any extraordinary, unusual or nonrecurring events, including, but not limited to gains or losses on sales of businesses, insurance proceeds, legal reserves or settlements, certain asset impairments or unique investments in R&D projects. The target number of RSUs will be issued if the average annual Adjusted EBITDA for the performance period is less than 15%, but at least equal to 10%, of the Company’s mathematical average annual revenue for the performance period. |
(3)
| Represents the number of shares of Common Stock underlying options awarded to the named executives on the grant date. The options vest at the rate of 33-1/3% per year commencing on December 16, 2023 and expire 10 years after the date of grant. |
(4)
| Represents the full grant date fair value calculated in accordance with FASB ASC Topic 718. The amounts do not reflect the actual amounts that may be realized by the executive officers. Assumptions used to calculate these amounts are included in Note 16 of the audited financial statements in Form 10-K for the year ended December 31, 2020.2022. |
TABLE OF CONTENTS
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth information with respect to the executives named in the summary compensation table relating to unexercised stock options, stock that has not vested, and
equity incentive plan awards outstanding as of December 31, 2020:2022:
| | | | | Options(1) | | Restricted Stock Units | | | | | Options(1) | | Restricted Stock Units | |
| | Name | | Number of
Securities
Underlying
Unexercised
Options
Exercisable | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable | | Option
Exercise
Price | | Option
Expiration
Date | | Number of
Shares or Units
of Stock That
Have Not
Vested | | Market
Value of
Shares
or Units
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 | | Name | | Number of
Securities
Underlying
Unexercised
Options
Exercisable | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable | | Option
Exercise
Price | | Option
Expiration
Date | | Number of
Shares or Units
of Stock That
Have Not
Vested | | Market
Value of
Shares or Units
That
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 | |
| | Peter J. Gundermann, President and Chief Executive Officer | | | 10,700 | | — | | 13.59 | | December 1, 2021 | | | | | | 2,076(2) | | $70,633 | | Peter J. Gundermann,
President and Chief
Executive Officer | | | 8,300 | | — | | td8.45 | | December 11, 2023 | | 701(2) | | $7,220 | | 10,175(3) | | td04,803 | |
| | 16,249 | | — | | 13.59 | | December 1, 2021 | | | | | | 1,832(3) | | $65,970 | | | 6,848 | | — | | td8.45 | | December 11, 2023 | | | | | | 12,275(4) | | td26,433 | |
| | 18,700 | | — | | 9.20 | | November 29, 2022 | | | | | | 10,175(4) | | td00,346 | | | 10,100 | | — | | $30.83 | | December 11, 2024 | | | | | | 14,750(5) | | td51,925 | |
| | 22,254 | | — | | 9.20 | | November 29, 2022 | | | | | | | | | | | 5,261 | | — | | $30.83 | | December 11, 2024 | | | | | | | | | |
| | 8,300 | | — | | 28.45 | | December 11, 2023 | | | | | | | | | | | 13,700 | | — | | td7.72 | | December 3, 2025 | | | | | | | | | |
| | 6,848 | | — | | 28.45 | | December 11, 2023 | | | | | | | | | | | 4,418 | | — | | td7.72 | | December 3, 2025 | | | | | | | | | |
| | 10,100 | | — | | 30.83 | | December 11, 2024 | | | | | | | | | | | 14,460 | | — | | $31.76 | | December 14, 2026 | | | | | | | | | |
| | 5,261 | | — | | 30.83 | | December 11, 2024 | | | | | | | | | | | 2,169 | | — | | $31.76 | | December 14, 2026 | | | | | | | | | |
| | 13,700 | | — | | 27.72 | | December 3, 2025 | | | | | | | | | | | 26,300 | | — | | $35.61 | | December 12, 2027 | | | | | | | | | |
| | 4,418 | | — | | 27.72 | | December 3, 2025 | | | | | | | | | | | 3,945 | | — | | $35.61 | | December 12, 2027 | | | | | | | | | |
| | 11,568 | | 2,892 | | 31.76 | | December 14, 2026 | | | | | | | | | | | 27,832 | | 6,958 | | $31.57 | | December 13, 2028 | | | | | | | | | |
| | 1,735 | | 434 | | 31.76 | | December 14, 2026 | | | | | | | | | | | 36,720 | | 24,480 | | $30.04 | | December 9, 2029 | | | | | | | | | |
| | 15,780 | | 10,520 | | 35.61 | | December 12, 2027 | | | | | | | | | | | 19,780 | | 79,120 | | td4.45 | | January 22, 2031 | | | | | | | | | |
| | 2,367 | | 1,578 | | 35.61 | | December 12, 2027 | | | | | | | | | | | 38,600 | | 77,200 | | $11.13 | | December 9, 2031 | | | | | | | | | |
| | 13,916 | | 20,874 | | 31.57 | | December 13, 2028 | | | | | | | | | | | — | | 125,000 | | $9.74 | | December 16, 2032 | | | | | | | | | |
| | 12,240 | | 48,960 | | 30.04 | | December 9, 2029 | | | | | | | | | | David C. Burney,
Executive Vice
President— Finance
and Chief Financial | | | 2,600 | | — | | td8.45 | | December 11, 2023 | | 436(2) | | $4,491 | | 6,625(3) | | $68,238 | |
| | David C. Burney,
Executive Vice President— Finance and Chief Financial Officer | | | 3,600 | | — | | 13.59 | | December 1, 2021 | | | | | | 1,259(2) | | $42,856 | | | 2,145 | | — | | td8.45 | | December 11, 2023 | | | | | | 8,000(4) | | $82,400 | |
| | 5,467 | | — | | 13.59 | | December 1, 2021 | | | | | | 1,106(3) | | $39,827 | | | 3,150 | | — | | $30.83 | | December 11, 2024 | | | | | | 9,600(5) | | $98,880 | |
| | 6,400 | | — | | 9.20 | | November 29, 2022 | | | | | | 6,625(4) | | td30,446 | | | 1,641 | | — | | $30.83 | | December 11, 2024 | | | | | | | | | |
| | 7,616 | | — | | 9.20 | | November 29, 2022 | | | | | | | | | | | 4,100 | | — | | td7.72 | | December 3, 2025 | | | | | | | | | |
| | 2,600 | | — | | 28.45 | | December 11, 2023 | | | | | | | | | | | 1,322 | | — | | td7.72 | | December 3, 2025 | | | | | | | | | |
| | 2,145 | | — | | 28.45 | | December 11, 2023 | | | | | | | | | | | 4,370 | | — | | $31.76 | | December 14, 2026 | | | | | | | | | |
| | 3,150 | | — | | 30.83 | | December 11, 2024 | | | | | | | | | | | 656 | | — | | $31.76 | | December 14, 2026 | | | | | | | | | |
| | 1,641 | | — | | 30.83 | | December 11, 2024 | | | | | | | | | | | 6,350 | | — | | $35.61 | | December 12, 2027 | | | | | | | | | |
| | 4,100 | | — | | 27.72 | | December 3, 2025 | | | | | | | | | | | 953 | | — | | $35.61 | | December 12, 2027 | | | | | | | | | |
| | 1,322 | | — | | 27.72 | | December 3, 2025 | | | | | | | | | | | 6,728 | | 1,682 | | $31.57 | | December 13, 2028 | | | | | | | | | |
| | 3,496 | | 874 | | 31.76 | | December 14, 2026 | | | | | | | | | | | 8,160 | | 5,440 | | $30.04 | | December 9, 2029 | | | | | | | | | |
| | 525 | | 131 | | 31.76 | | December 14, 2026 | | | | | | | | | | | 4,050 | | 16,200 | | td4.45 | | January 22, 2031 | | | | | | | | | |
| | 3,810 | | 2,540 | | 35.61 | | December 12, 2027 | | | | | | | | | | | 8,167 | | 16,333 | | $11.13 | | December 9, 2031 | | | | | | | | | |
| | 572 | | 381 | | 35.61 | | December 12, 2027 | | | | | | | | | | | — | | 26,700 | | $9.74 | | December 16, 2032 | | | | | | | | | |
| | 3,364 | | 5,046 | | 31.57 | | December 13, 2028 | | | | | | | | | | James S. Kramer,
Executive Vice
President | | | 2,330 | | — | | td8.45 | | December 11, 2023 | | 349(2) | | $3,595 | | 6,100(3) | | $62,830 | |
| | 2,720 | | 10,880 | | 30.04 | | December 9, 2029 | | | | | | | | | | | 1,923 | | — | | td8.45 | | December 11, 2023 | | | | | | 7,375(4) | | $75,963 | |
| | James S. Kramer,
Executive Vice President | | | 3,200 | | — | | 13.59 | | December 1, 2021 | | | | | | 1,058(2) | | $36,014 | | | 2,720 | | — | | $30.83 | | December 11, 2024 | | | | | | 8,850(5) | | $91,555 | |
| | 4,859 | | — | | 13.59 | | December 1, 2021 | | | | | | 929(3) | | $33,453 | | | 1,417 | | — | | $30.83 | | December 11, 2024 | | | | | | | | | |
| | 5,700 | | — | | 9.20 | | November 29, 2022 | | | | | | 6,100(4) | | td20,109 | | | 3,500 | | — | | td7.72 | | December 3, 2025 | | | | | | | | | |
| | 6,784 | | — | | 9.20 | | November 29, 2022 | | | | | | | | | | | 1,129 | | — | | td7.72 | | December 3, 2025 | | | | | | | | | |
| | 2,330 | | — | | 28.45 | | December 11, 2023 | | | | | | | | | | | 3,670 | | — | | $31.76 | | December 14, 2026 | | | | | | | | | |
| | 1,923 | | — | | 28.45 | | December 11, 2023 | | | | | | | | | | | 551 | | — | | $31.76 | | December 14, 2026 | | | | | | | | | |
| | 2,720 | | — | | 30.83 | | December 11, 2024 | | | | | | | | | | | 5,340 | | — | | $35.61 | | December 12, 2027 | | | | | | | | | |
| | 1,417 | | — | | 30.83 | | December 11, 2024 | | | | | | | | | | | 801 | | — | | $35.61 | | December 12, 2027 | | | | | | | | | |
| | 3,500 | | — | | 27.72 | | December 3, 2025 | | | | | | | | | | | 5,648 | | 1,412 | | $31.57 | | December 13, 2028 | | | | | | | | | |
| | 1,129 | | — | | 27.72 | | December 3, 2025 | | | | | | | | | | | 8,160 | | 5,440 | | $30.04 | | December 9, 2029 | | | | | | | | | |
| | 2,936 | | 734 | | 31.76 | | December 14, 2026 | | | | | | | | | | | 4,050 | | 16,200 | | td4.45 | | January 22, 2031 | | | | | | | | | |
| | 441 | | 110 | | 31.76 | | December 14, 2026 | | | | | | | | | | | 8,167 | | 16,333 | | $11.13 | | December 9, 2031 | | | | | | | | | |
| | 3,204 | | 2,136 | | 35.61 | | December 12, 2027 | | | | | | | | | | | — | | 26,700 | | $9.74 | | December 16, 2032 | | | | | | | | | |
| | 481 | | 320 | | 35.61 | | December 12, 2027 | | | | | | | | | | |
| | 2,824 | | 4,236 | | 31.57 | | December 13, 2028 | | | | | | | | | | |
| | 2,720 | | 10,880 | | 30.04 | | December 9, 2029 | | | | | | | | | | |
TABLE OF CONTENTS
| | | | | Options(1) | | Restricted Stock Units | | | | | Options(1) | | Restricted Stock Units | |
| | Name | | Number of
Securities
Underlying
Unexercised
Options
Exercisable | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable | | Option
Exercise
Price | | Option
Expiration
Date | | Number of
Shares or Units
of Stock That
Have Not
Vested | | Market
Value of
Shares
or Units
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 | | Name | | Number of
Securities
Underlying
Unexercised
Options
Exercisable | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable | | Option
Exercise
Price | | Option
Expiration
Date | | Number of
Shares or Units
of Stock That
Have Not
Vested | | Market
Value of
Shares or Units
That
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 | |
| | Michael C. Kuehn,
Executive Vice President | | | 4,830 | | 3,220 | | 35.61 | | December 12, 2027 | | | | | | 2,465(3) | | $88,765 | | Michael C. Kuehn,
Executive Vice
President | | | 8,050 | | — | | $35.61 | | December 12, 2027 | | 453(2) | | $4,666 | | 8,650(3) | | $89,095 | |
| | 725 | | 483 | | 35.61 | | December 12, 2027 | | | | | | 8,650(4) | | td70,319 | | | 1,208 | | — | | $35.61 | | December 12, 2027 | | | | | | 10,450(4) | | td07,635 | |
| | 4,944 | | 7,416 | | 31.57 | | December 13, 2028 | | | | | | | | | | | 9,888 | | 2,472 | | $31.57 | | December 13, 2028 | | | | | | 12,550(5) | | td29,265 | |
| | 3,630 | | 14,520 | | 30.04 | | December 9, 2029 | | | | | | | | | | | 10,890 | | 7,260 | | $30.04 | | December 9, 2029 | | | | | | | | | |
| | James F Mulato,
Executive Vice President | | | 2,400 | | — | | $34.75 | | March 31, 2024 | | | | | | 2,501(2) | | $85,134 | | | 5,400 | | 21,600 | | td4.45 | | January 22, 2031 | | | | | | | | | |
| | 1,980 | | — | | 34.75 | | March 31, 2024 | | | | | | 2,306(3) | | $83,039 | | | 10,900 | | 21,800 | | $11.13 | | December 9, 2031 | | | | | | | | | |
| | 3,300 | | — | | 30.83 | | December 11, 2024 | | | | | | 8,650(4) | | td70,319 | | | — | | 35,600 | | $9.74 | | December 16, 2032 | | | | | | | | | |
| | 1,719 | | — | | 30.83 | | December 11, 2024 | | | | | | | | | | James F Mulato,
Executive Vice
President | | | 2,400 | | — | | $34.75 | | March 31, 2024 | | | | | | | | | |
| | 4,300 | | — | | 27.72 | | December 3, 2025 | | | | | | | | | | | 1,980 | | — | | $34.75 | | March 31, 2024 | | | | | | | | | |
| | 1,387 | | — | | 27.72 | | December 3, 2025 | | | | | | | | | | | 3,300 | | — | | $30.83 | | December 11, 2024 | | 420(2) | | $4,326 | | 8,650(3) | | $89,095 | |
| | 5,248 | | 1,312 | | 31.76 | | December 14, 2026 | | | | | | | | | | | 1,719 | | — | | $30.83 | | December 11, 2024 | | | | | | 10,450(4) | | td07,635 | |
| | 787 | | 197 | | 31.76 | | December 14, 2026 | | | | | | | | | | | 4,300 | | — | | td7.72 | | December 3, 2025 | | | | | | 12,550(5) | | td29,265 | |
| | 4,770 | | 3,180 | | 35.61 | | December 12, 2027 | | | | | | | | | | | 1,387 | | — | | td7.72 | | December 3, 2025 | | | | | | | | | |
| | 716 | | 477 | | 35.61 | | December 12, 2027 | | | | | | | | | | | 6,560 | | — | | $31.76 | | December 14, 2026 | | | | | | | | | |
| | 4,628 | | 6,942 | | 31.57 | | December 13, 2028 | | | | | | | | | | | 984 | | — | | $31.76 | | December 14, 2026 | | | | | | | | | |
| | 3,630 | | 14,520 | | 30.04 | | December 9, 2029 | | | | | | | | | | | 7,950 | | — | | $35.61 | | December 12, 2027 | | | | | | | | | |
| | Mark A. Peabody,
Executive Vice President | | | 4,300 | | — | | 13.59 | | December 1, 2021 | | | | | | 1,385(2) | | $47,145 | | | 1,193 | | — | | $35.61 | | December 12, 2027 | | | | | | | | | |
| | 6,530 | | — | | 13.59 | | December 1, 2021 | | | | | | 1,220(3) | | $43,932 | | | 9,256 | | 2,314 | | $31.57 | | December 13, 2028 | | | | | | | | | |
| | 7,400 | | — | | 9.20 | | November 29, 2022 | | | | | | 6,625(4) | | td30,446 | | | 10,890 | | 7,260 | | $30.04 | | December 9, 2029 | | | | | | | | | |
| | 8,807 | | — | | 9.20 | | November 29, 2022 | | | | | | | | | | | 5,400 | | 21,600 | | td4.45 | | January 22, 2031 | | | | | | | | | |
| | 2,990 | | — | | 28.45 | | December 11, 2023 | | | | | | | | | | | 10,900 | | 21,800 | | $11.13 | | December 9, 2031 | | | | | | | | | |
| | 2,467 | | — | | 28.45 | | December 11, 2023 | | | | | | | | | | | — | | 35,600 | | $9.74 | | December 16, 2032 | | | | | | | | | |
| | 3,470 | | — | | 30.83 | | December 11, 2024 | | | | | | | | | | Mark A. Peabody,
Executive Vice
President | | | 2,990 | | — | | td8.45 | | December 11, 2023 | | 590(2) | | $6,077 | | 6,625(3) | | $68,238 | |
| | 1,807 | | — | | 30.83 | | December 11, 2024 | | | | | | | | | | | 2,467 | | — | | td8.45 | | December 11, 2023 | | | | | | 9,825(4) | | td01,198 | |
| | 4,500 | | — | | 27.72 | | December 3, 2025 | | | | | | | | | | | 3,470 | | — | | $30.83 | | December 11, 2024 | | | | | | 11,800(5) | | td21,540 | |
| | 1,451 | | — | | 27.72 | | December 3, 2025 | | | | | | | | | | | 1,807 | | — | | $30.83 | | December 11, 2024 | | | | | | | | | |
| | 3,856 | | 964 | | 31.76 | | December 14, 2026 | | | | | | | | | | | 4,500 | | — | | td7.72 | | December 3, 2025 | | | | | | | | | |
| | 578 | | 145 | | 31.76 | | December 14, 2026 | | | | | | | | | | | 1,451 | | — | | td7.72 | | December 3, 2025 | | | | | | | | | |
| | 4,206 | | 2,804 | | 35.61 | | December 12, 2027 | | | | | | | | | | | 4,820 | | — | | $31.76 | | December 14, 2026 | | | | | | | | | |
| | 631 | | 421 | | 35.61 | | December 12, 2027 | | | | | | | | | | | 723 | | — | | $31.76 | | December 14, 2026 | | | | | | | | | |
| | 3,712 | | 5,568 | | 31.57 | | December 13, 2028 | | | | | | | | | | | 7,010 | | — | | $35.61 | | December 12, 2027 | | | | | | | | | |
| | 2,720 | | 10,880 | | 30.04 | | December 9, 2029 | | | | | | | | | | | 1,052 | | — | | $35.61 | | December 12, 2027 | | | | | | | | | |
| | | | 7,424 | | 1,856 | | $31.57 | | December 13, 2028 | | | | | | | | | |
| | 8,160 | | 5,440 | | $30.04 | | December 9, 2029 | | | | | | | | | |
| | 4,050 | | 16,200 | | td4.45 | | January 22, 2031 | | | | | | | | | |
| | 8,167 | | 16,333 | | $11.13 | | December 9, 2031 | | | | | | | | | |
| | — | | 26,700 | | $9.74 | | December 16, 2032 | | | | | | | | | |
(1)
| AllExcept for the options straight lineexpiring December 9, 2031 and December 16, 2032, all other options vest (20% per year)in equal increments over five years and expire ten years from the date of grant. The options expiring December 9, 2031 and December 16, 2032 vest in equal increments over three years and expire ten years from the date of grant. |
(2)
| Reflects RSUs to awarded in lieu of raises for 2021, which vest in equal increments over a three-year period. The amount reflected as of December 31, 2022 reflects 1/3 of the original award as vested on February 26, 2022. |
(3)
| Reflects RSUs to be earned at the target award level under the award agreements. The award earned will be adjusted based upon the Company’s mathematical average annual Adjusted EBITDA for the period beginning January 1, 2018 and ending December 31, 2020. All RSUs cliff vest on December 31, 2020. |
(3)
| Reflects RSUs to be earned at the target award level under the award agreements. The award earned will be adjusted based upon the Company’s mathematical average annual Adjusted EBITDA for the period beginning January 1, 2019 and ending December 31, 2021. All RSUs cliff vest on December 31, 2021. |
(4)
| Reflects RSUs to be earned at the target award level under the award agreements. The award earned will be adjusteddetermined based upon the Company’s mathematical average annual Adjusted EBITDA for the period beginning January 1, 2020 and ending December 31, 2022. All RSUs cliff vestvested on December 31, 2022. Shares underlying the RSUs were not issued until March 2023. |
(4)
| Reflects RSUs to be earned at the target award level under the award agreements. The award earned will be determined based upon the Company’s mathematical average annual Adjusted EBITDA for the period beginning January 1, 2021 and ending December 31, 2023. All RSUs vest on February 26, 2024. |
(5)
| Reflects RSUs to be earned at the target award level under the award agreements. The award earned will be determined based upon the Company’s mathematical average annual Adjusted EBITDA for the period beginning January 1, 2022 and ending December 31, 2024. All RSUs vest on February 26, 2025. |
TABLE OF CONTENTS
Option Exercises and Stock Vested
The following table sets forth information with respect to the executives named in the summary compensation table relating to the exercise of stock options, stock appreciation rights and
similar rights, and the vesting of stock in connection therewith, in 2020:2022:
| | | | | Option Awards | | | | | Option Awards | | Stock Awards | |
| | Name | | Number of Shares
Acquired on Exercise | | Value Realized
on Exercise | | Name | | Number of Shares
Acquired on Exercise | | Value Realized
on Exercise | | Number of Shares
Acquired on Vesting | | Value Realized
on Vesting | |
| | Peter J. Gundermann,
President and Chief Executive Officer | | 40,725 | | $62,757 | | Peter J. Gundermann,
President and Chief Executive Officer | | 40,954 | | $98,699 | | 1,725 | | $22,736 | |
| | David C. Burney,
Executive Vice President – Finance and Chief Financial Officer | | 13,852 | | $60,118 | | David C. Burney,
Executive Vice President – Finance and Chief Financial Officer | | — | | — | | 1,049 | | $13,826 | |
| | James S. Kramer,
Executive Vice President | | 12,051 | | $59,773 | | James S. Kramer,
Executive Vice President | | — | | — | | 872 | | $11,493 | |
| | Michael C. Kuehn,
Executive Vice President | | — | | — | | Michael C. Kuehn,
Executive Vice President | | — | | — | | 2,076 | | $27,362 | |
| | James F. Mulato,
Executive Vice President. | | — | | — | | James F. Mulato,
Executive Vice President. | | — | | — | | 1,940 | | $25,569 | |
| | Mark A. Peabody,
Executive Vice President | | 18,008 | | $83,197 | | Mark A. Peabody,
Executive Vice President | | — | | — | | 1,211 | | $15,961 | |
| | Name | | Plan Name | | Number of
Years
Credited
Service | | Present
Value of
Accumulated
Benefit
($) | | Payment
During
Last Fiscal
Year
($) | | Name | | Plan Name | | Number of
Years
Credited
Service | | Present
Value of
Accumulated
Benefit
($) | | Payment
During
Last Fiscal
Year
($) | |
| | Peter J. Gundermann,
President and Chief Executive Officer | | Astronics Corporation Supplemental Retirement Plan (SERP) | | 33 | | $11,658,125 | | — | | Peter J. Gundermann,
President and Chief Executive Officer | | Astronics Corporation Supplemental Retirement Plan (SERP) | | 35 | | $7,759,546 | | — | |
| | | | SERP-Retiree Medical, Dental and Long-Term Care | | 33 | | $ 507,196 | | — | | | | SERP-Retiree Medical, Dental and Long-Term Care | | 35 | | $ 310,918 | | — | |
| | David C. Burney,
Executive Vice President – Finance and Chief Financial Officer | | Astronics Corporation Supplemental Retirement Plan II (SERP II) | | 24 | | $5,254,196 | | — | | David C. Burney,
Executive Vice President – Finance and Chief Financial Officer | | Astronics Corporation Supplemental Retirement Plan II (SERP II) | | 26 | | $3,744,673 | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| | James S. Kramer,
Executive Vice President | | Astronics Corporation Supplemental Retirement Plan II (SERP II) | | 32 | | $4,168,070 | | — | | James S. Kramer,
Executive Vice President | | Astronics Corporation Supplemental Retirement Plan II (SERP II) | | 34 | | $2,417,738 | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| | Michael C. Kuehn,
Executive Vice President | | — | | — | | — | | — | | Michael C. Kuehn,
Executive Vice President | | — | | — | | — | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| | James F. Mulato,
Executive Vice President | | — | | — | | — | | — | | James F. Mulato,
Executive Vice President | | — | | — | | — | | — | |
| | | | | | | | | | | | | | | | | | | | | |
| | Mark A. Peabody,
Executive Vice President | | Astronics Corporation Supplemental Retirement Plan II (SERP II) | | 15 | | $5,370,884 | | — | | Mark A. Peabody,
Executive Vice President | | Astronics Corporation Supplemental Retirement Plan II (SERP II) | | 17 | | $4,307,944 | | — | |
The Company has two non-qualified supplemental retirement defined benefit plans for certain executives - the Supplemental Retirement Plan (“SERP”) and Supplemental Retirement Plan II (“SERP II”).
The SERP targets a retirement benefit based on 65% of the average of the highest consecutive three-year cash compensation, less a participant’s primary Social Security benefit at age 65 and the actuarially determined value of certain contributions made by Astronics to its tax-qualified defined contribution plan on
behalf of the participant. The plan is unfunded and has no assets. Except as described
below under “Other Potential Post-EmploymentPost- Employment Benefits”, SERP benefits are payable only to “retirement-eligible” participants, i.e., employees designated to participate in the SERP and each of whom, upon termination of employment, has at least 10 years of continuous service with the Company and (i) has attained age 65, or (ii) has attained age 60 or later with a combined total of age and years of service equal to 90. As of December 31, 2020,2022, Peter J. Gundermann was the only non-retired participant in the SERP. As Mr. Gundermann had attained age 60 and his
