UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )No.____)

Filed by the Registrant  ☐☒                            Filed by a partyParty other than the Registrant  ☐

Check the appropriate box:

Orion Energy Systems, Inc.

(Name of Registrant as Specified In Itsin its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than Theother than the Registrant)

Payment of Filing Fee (Check the appropriate box):

July 18, 2017June 22, 2020

Dear Fellow Shareholders:

Thank you for your investment in Orion and the confidence you have placed in our Board of Directors. We are excited to share with you the significant progress we have made in fiscal 2020, which we believe represents not only an endorsement of the values, expertise, product quality, and customer commitment of the entire Orion organization, but also a confirmation of our customers’ satisfaction with our solutions and service. Some of our highlights from fiscal 2020 include:

Revenue Growth.In fiscal 2020, our efforts to win new work and grow revenue were successful as we achieved our goal of growing revenue in fiscal 2020, with revenues increasing by 129% from $65.8 million in fiscal 2019 to $150.8 million in fiscal 2020.

Positive Net Income.In fiscal 2020, we achieved our goal of generating positive net income, with our net income increasing from $(6.7) million in fiscal 2019 to $12.6 million in fiscal 2020.

Positive EBITDA.In fiscal 2020, we achieved our goal of generating positive adjusted EBITDA, with EBITDA increasing from $(4.3) million in fiscal 2019 to $14.7 million in fiscal 2020.

Stock Appreciation.Our 2017stock price increased by 307% from $0.91 per share on April 1, 2019 to $3.70 per share on March 31, 2020 and our market capitalization increased by 310% from approximately $27.3 million to approximately $112.0 million.

We are proud of the accomplishments we were able to deliver to our shareholders in fiscal 2020 and cordially invite you to attend our 2020 Annual Meeting of Shareholders, which will be held online atwww.virtualshareholdermeeting.com/OESX2020 on Thursday, August 6, 2020, at 1:00 p.m., Central Time. A replay of our Annual Meeting of Shareholders will be held on Wednesday, August 30, 2017, at 1:00 p.m., Central Time, on the 40^th Floor of the U.S. Bank Center, located at 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

Like the last two years, we have made access to our meeting easier due to the growing number of our institutional shareholders across the country and the world. So, rather than having to attend our meeting in person, you will be able to listen to our meeting live via the internet. We will broadcast the meeting as a live audio webcast through our website,www.orionlighting.com, and a replay willalso be available on our website during the month of September. Also, if you desire to ask an appropriate question at the meeting of our Board of Directors, management or auditors, you may do so by submitting your question in writing by Friday, August 25, 2017 to Nicole Passini (npassini@oesx.com).

Despite access to our audio webcast, if you still desire to attend the meeting in person, you will need to comply with our admission procedures. All shareholders as of the meeting record date, July 6, 2017, may attend the meeting, but must have an admission badge and photo identification in order to enter. You may request an admission badge by sending a request via mail or e-mail using the following contact information:

Orion Energy Systems, Inc.

2210 Woodland Drive

Manitowoc, Wisconsin 54220

Attn: Nicole Passini

npassini@oesx.com

(920) 892-5423

In order to allow sufficient time for us to mail you an admission badge, your request must bereceived prior to 5:00 p.m., Central Time, on Friday, August 25, 2017. Admission badges will only be distributed via mail and will not be available for pick-up at the Annual Meeting.

If you are a shareholder of record (your shares are held in your name) as of the meeting record date, you must write your name on the request exactly as it appears on your stock ownership records from Wells Fargo Shareowner Services. If you are a beneficial shareholder (your shares are held through a broker, bank or nominee) as of the meeting record date, you must provide current evidence of your ownership of shares as of the meeting record date with your admission request, which you can obtain from your broker, bank or nominee. No person will be allowed entry into the meeting if such person is deemed by the Company, in its discretion, to be a potential disruption to the meeting or a potential danger to the health or safety of other meeting participants.

August. We hope that by making accessyou will be able to attend our annual meeting easier through our website we’ll be able to reach a broader audienceonline to hear about the exciting progress we are makingon the horizon at Orion.

Orion Energy Systems, Inc.

2210 Woodland Drive

Manitowoc, Wisconsin 54220

(800)660-9340

NOTICE OF 20172020 ANNUAL MEETING OF SHAREHOLDERS

To the Shareholders of Orion Energy Systems, Inc.:

Our 20172020 Annual Meeting of Shareholders will be held on Wednesday,Thursday, August 30, 2017,6, 2020, at 1:00 p.m., Central Time, on the 40th Floor of the U.S. Bank Center, locatedonline at 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.

As we did the last two years, we have made access to our meeting easier for all of our shareholders. So, rather than having to attend our meeting in person, youwww.virtualshareholdermeeting.com/OESX2020. You will be able to listen to ourthe annual meeting live, viasubmit questions and vote online. A replay of the internet. We will broadcast theannual meeting as a live audio webcast through our website,www.orionlighting.com, and a replay will be available on our website during the month of September. Despite access to our audio webcast, if you still desire to attend the meeting in person, you will need to comply with our admission procedures. All shareholders as of the meeting record date, July 6, 2017, may attend the meeting, but must have an admission badge and photo identification in order to enter. You may request an admission badge by following the procedure described in the accompanying proxy statement.August.

At the annual meeting, as we describe in the accompanying proxy statement, we will ask you to vote on the following matters:

1. the election of two nominees named in the attached proxy statement as Class IIIII directors to serve for a term expiring at the 2019 annual meeting of shareholders and two nominees named in the attached proxy statement as Class I directors to serve for a term expiring at the 20202021 annual meeting of shareholders, and, in each case, until their successors have been duly elected and qualified;

2. an advisory vote to approve the compensation of our named executive officers as disclosed in the accompanying proxy statement;

3. an advisory vote on the frequency of future advisory stockholder votes on the compensation of our named executive officers;

4. the ratification of BDO USA, LLP to serve as our independent registered public accounting firm for our fiscal year 2018;2021; and

5.4. such other business as may properly come before the annual meeting, or any adjournment or postponement thereof.

As explained in the attached proxy statement, our board has, in consultation with Michael J. Potts and Ellen B. Richstone determined that each of Mr. Potts and Ms. Richstone will be nominatedfor re-election as Class II directors, which will result in Mr. Potts and Ms. Richstone servingone-year terms expiring at the 2021 annual meeting of shareholders.

You are entitled to vote at the annual meeting only if you were a shareholder of record at the close of business on July 6, 2017.June 10, 2020. A proxy statement and proxy card are enclosed.

In order to provide our shareholders a more convenient, cost-effective method of attending, and, in light of the coronavirus(COVID-19) pandemic, to provide our shareholders with a means to attend the annual meeting in a manner that does not endanger the health and well-being of our shareholders, we have elected to hold our annual meeting via remote communication. You may attend the virtual annual meeting and vote your shares during the meeting by visiting our annual meeting website atwww.virtualshareholdermeeting.com/OESX2020. You are entitled to participate in and submit questions in writing during the annual meeting if you were a shareholder as of the close of business on June 10, 2020. To be admitted to the annual meeting atwww.virtualshareholdermeeting.com/OESX2020, you will need the16-digit control number included on your notice, your proxy card or the instructions that accompanied your proxy materials. The annual meeting will begin promptly 1:00 p.m., Central Time. Onlinecheck-in will begin at 12:45 p.m., Central Time. Please allow ample time for the onlinecheck-in procedures. If you have difficulty accessing the virtual annual meeting, please call the technical support number that will be posted on the virtual annual meeting log in page for assistance. We will have personnel available to assist you. If you hold shares through a bank, broker or other nominee, you will need to contact such bank, broker or other nominee for assistance with your16-digit control number.

Whether or not you expect to attend the annual meeting, it is important that you promptly complete, sign, date and submit the proxy card via internet, telephone or mail in accordance with its instructions so that you may vote your shares. If you hold your shares in a brokerage account, you should be aware that, if you do not instruct your broker how to vote, your broker will not be permitted to vote your shares for the election of directors or on the advisory vote to approve the compensation of our named executive officers or on the advisory vote on the frequency of future advisory stockholder votes on the compensation of our named executive officers. Therefore, you must affirmatively take action to vote your shares at our annual meeting. If you do not, your shares will not be voted on these items.

Manitowoc, Wisconsin

July 18, 2017June 22, 2020

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting To Be Held on August 30, 2017. The Orion Energy Systems, Inc.6, 2020. Our proxy statement for the 2017our 2020 Annual Meeting of Shareholders and the 2017our 2020 Annual Report to Shareholders are available atwww.proxyvote.com. www.proxyvote.com.

Our Annual Report on Form10-K is enclosed with this notice and proxy statement.statement for shareholders who have elected to receive paper copies of our proxy materials.

PROXY STATEMENT

FOR THE 20172020 ANNUAL MEETING OF SHAREHOLDERS

To be Held August 30, 20176, 2020

We are providing these proxy materials to you because our board of directors is soliciting proxies for use at our 20172020 Annual Meeting of Shareholders to be held online on Wednesday,Thursday, August 30, 2017,6, 2020, at 1:00 p.m., Central Time, on the 40th Floor of the U.S. Bank Center, located at 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, and at any adjournment or postponement thereof (which we refer to collectively as our “annual meeting”), for the purposes set forth in the attached Notice of 20172020 Annual Meeting of Shareholders and as described herein. We either (i) mailed you a notice of internet availability of our proxy materials on or before July 18, 2017June 22, 2020 notifying each shareholder entitled to vote at the annual meeting how to vote and how to electronically access a copy of this proxy statement and form or proxy or (ii) mailed you a printed copy of such proxy materials and a proxy card in paper format.

In order to provide our shareholders a more convenient, cost-effective method of attending, and, in light of the coronavirus(COVID-19) pandemic, to provide our shareholders with a means to attend the annual meeting in a manner that does not endanger the health and well-being of our shareholders, we have elected to hold our annual meeting via remote communication. You may attend the virtual annual meeting and vote your shares during the meeting by visiting our annual meeting website atwww.virtualshareholdermeeting.com/OESX2020. A replay will be available on our website during the month of August. You are entitled to participate in the annual meeting if you were a shareholder as of the close of business on June 10, 2020. To be admitted to the annual meeting at www.virtualshareholdermeeting.com/OESX2020, you will needthe 16-digit control number included on your notice, your proxy card or the instructions that accompanied your proxy materials. The annual meeting will begin promptly 1:00 p.m., Central Time.Online check-in will begin at 12:45 p.m., Central Time. Please allow ample time for theonline check-in procedures. If you have difficulty accessing the virtual annual meeting, please call the technical support number that will be posted on the virtual annual meeting log in page for assistance. We will have personnel available to assist you. If you hold shares through a bank, broker or other nominee, you will need to contact such bank, broker or other nominee for assistance withyour 16-digit control number.

This year,year’s shareholder question and answer session will include questions submitted in advance of, and questions submitted live during, the annual meeting. You may submit a question in advance of the meeting at www.proxyvote.com after logging in withyour 16-digit control number. Questions may be submitted during the annual meeting throughwww.virtualshareholdermeeting.com/OESX2020. We expect to respond to questions during the annual meeting, and may also respond to questions on an individual basis or by posting answers on our investor relations website after the meeting.

Consistent with prior years, we are using the “notice and access” system adopted by the SEC relating to the delivery of our proxy materials over the internet. The SEC’s notice and access rules allow us to deliver our proxy materials to our shareholders by posting the materials on an internet website, notifying shareholders of the availability of our proxy materials on the internet and sending paper copies of our proxy materials upon shareholder request. We believe that the notice and access rules allow us to use internet technology that many shareholders prefer, continue to provide our shareholders with the information that they need and, at the same time, ensure more prompt delivery of our proxy materials. The notice and access rules also lower our cost of printing and delivering our proxy materials and minimize the environmental impact of printing paper copies.

As a result, we mailed to many of our shareholders a notice of internet availability of our proxy materials instead of a paper copy of our proxy materials. Shareholders who received the notice will have the ability to access our proxy materials over the internet and to request a paper copy of our proxy materials by mail, bye-mail or by telephone. Instructions on how to access our proxy materials over the internet or to request a paper copy

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may be found on the notice. In addition, the notice contains instructions on how shareholders may request our proxy materials in printed form by mail or electronically bye-mail on an ongoing basis. The notice of internet availability of our proxy materials also serves as a notice of meeting.

Like the last two years, we have made access to our meeting easier due to the growing number of our institutional shareholders across the country and the world. Rather than having to attend our meeting in person, you will be able to listen to our meeting live via the internet. We will broadcast the meeting as a live audio webcast through our website,www.orionlighting.com, and a replay will be available on our website during the month of September. Also, if you desire to ask an appropriate question at the meeting of our board of directors, management or auditors, you may do so by submitting your question in writing by Friday, August 25, 2017 to Nicole Passini (npassini@oesx.com). Despite access to our audio webcast, if you still desire to attend the meeting in person, you will need to comply with our admission procedures. All shareholders as of the meeting record date, July 6, 2017, may attend the meeting, but must have an admission badge and photo identification in order to enter. You may request an admission badge by sending a request via mail or e-mail using the following contact information:

Orion Energy Systems, Inc.

2210 Woodland Drive

Manitowoc, Wisconsin 54220

Attn: Nicole Passini

npassini@oesx.com

(920) 892-5423

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In order to allow sufficient time for us to mail you an admission badge, your request must be received prior to 5:00 p.m., Central Time, on Friday, August 25, 2017. Admission badges will only be distributed via mail and will not be available for pick-up at the annual meeting.

If you are a shareholder of record (your shares are held in your name) as of the meeting record date, you must write your name on the request exactly as it appears on your stock ownership records from Wells Fargo Shareowner Services. If you are a beneficial shareholder (your shares are held through a broker, bank or nominee) as of the meeting record date, you must provide current evidence of your ownership of shares as of the meeting record date with your admission request, which you can obtain from your broker, bank or nominee. No person will be allowed entry into the meeting if such person is deemed by us, in our discretion, to be a potential disruption to the meeting or a potential danger to the health or safety of other meeting participants.

Execution of a proxy will not affect your right to attend and vote at the annual meeting and to vote in person,virtually, nor will your presence revoke a previously submitted proxy. You may revoke a previously submitted proxy at any time before the annual meeting by giving written notice of your intention to revoke the proxy to our board secretary or by notifyingattending the appropriate personnel at the registration deskannual meeting virtually and voting at the annual meeting in writing or by voting in person upon entry to the annual meeting.online. Unless revoked, the shares represented by proxies received by our board of directors will be voted at the annual meeting in accordance with the instructions thereon. If no instructions are specified on a proxy, the votes represented thereby will be voted: (1) for the board’s fourtwo director nominees set forth below; (2) for the advisory vote to approve the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis section and the executive compensation tables set forth below in this proxy statement; (3) for holding the advisory vote on the compensation of our named executive officers every year; (4) for ratification of BDO USA, LLP to serve as our independent registered public accounting firm for our fiscal year 2018;2021; and (5)(4) on such other matters that may properly come before the annual meeting in accordance with the best judgment of the persons named as proxies. Our board of directors has designated Michael W. Altschaefl and William T. Hull, and each or anyeither of them, as proxies to vote the shares of our common stock solicited on its behalf.

IMPORTANT: If you hold your shares in a brokerage account, you should be aware that, if you do not instruct your broker how to vote, your broker will not be permitted to vote your shares for the election of directors or the advisory vote to approve the compensation of our named executive officers or the advisory vote on the frequency of future advisory shareholder votes on the compensation of our named executive officers. Therefore, you must affirmatively take action to vote your shares at our annual meeting. If you do not, your shares will not be voted on these items.

The fourtwo nominees receiving the highest vote totals of the eligible shares of our common stock, no par value per share (“Common Stock”), will be elected as our directors. With regard to the election of directors, votes may be cast in favor or withheld; votes that are withheld will be excluded entirely from the vote and will have no effect. The advisory vote to approve the compensation of our named executive officers and the appointment of BDO USA, LLP to serve as our independent registered public accounting firm for our fiscal year 20182021 will be approved if the votes cast in favor of approval exceed the votes cast against approval. The frequency of the advisory vote on the compensation of our named executive officers receiving the greatest number of votes cast in favor of such frequency, whether every year, every two years or every three years, will be the frequency of the advisory vote on executive compensation that shareholders are deemed to have approved. Abstentions and brokernon-votes will be counted for purposes of determining the presence of a quorum but will be disregarded in the calculation of votes cast.

Only holders of record of shares of our Common Stock as of the close of business on July 6, 2017June 10, 2020 (the “Record Date”) are entitled to vote at the annual meeting. As of the Record Date, we had 30,688,58330,419,701 shares of Common Stock outstanding and entitled to vote. The record holder of each share of Common Stock outstanding on the Record Date is entitled to one vote per share on each matter submitted for shareholder consideration at the annual meeting. In order for us to validly transact business at the annual meeting, we must have a quorum

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present. A majority of the votes of the shares of Common Stock entitled to be cast, or shares representing at least 15,344,29215,209,851 votes, will represent a quorum for the purposes of the annual meeting.

WE INTEND TO BEGIN MAKING THIS PROXY STATEMENT AND THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS AVAILABLE TO SHAREHOLDERS ON OR ABOUT JULY 18, 2017.JUNE 22, 2020.

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RETIRING DIRECTOR TRIBUTE

We would like to formally extend our gratitude to three membersa member of our board of directors, Mr. Kenneth M. Young, who areis retiring at the annual meeting, for theirhis years of service and contributions to our company, our board and our shareholders. We extend to Mr. Young our sincere appreciation for theirhis valued service, guidance, advice and dedication to our company and wish each of themhim the best in theirhis future endeavors.

		James R. KackleyKenneth M. Young 123 Years of Service as a Director Non-Executive Chairman of the Board (2010-2016); Former President and Chief Operating Officer (2009-2010)
		Elizabeth Gamsky Rich 7 years of Service as a Director Chair of the Nominating and Corporate Governance Committee Member of the Compensation Committee
		Kenneth L. Goodson, Jr. 4 Years of Service as a Director Chair of the CompensationNominating and Corporate Governance Committee Member of the Audit and FinanceCompensation Committee

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PROPOSAL ONE:

ELECTION OF DIRECTORS

We maintain a staggered board of directors divided into three classes. Currently, there are fourthree directors in Class I (2014-2017)(2017-2020) (Ms. RichRichstone and Messrs. Kackley, Potts and Goodson)Young), threetwo directors in Class II (2015-2018)(2018-2021) (Messrs. Altschaefl Otten and Williamson), no and two directors in Class III (2016-2019)(2019-2022) (Messrs. Howe and one director whose class will be assigned in connection with the election of directors at the annual meeting (Ms. Richstone)Otten). In addition, we have nominated Mr. Young to serve as a new Class I (2017-2020) director at the annual meeting. Each director generally serves for a term ending on the date of the third annual shareholders’ meeting following the annual shareholders’ meeting at which such director’s class was most recently elected and until his or her successor is duly elected and qualified.

In connection with the election of directors at the annual meeting our board of directors is continuing its planned restructuring with the intent to create a board that is smaller, more nimble and better able to address important issues with greater speed and lower cost. This board restructuring plan began last year when, at our 2016 annual meeting, each of Thomas N. Schueller. Tryg C. Jacobson and James D. Leslie retired as then serving members of our board of directors and our boardboard’s continuing effort to become smaller and committee structure was reorganized to reflect the decrease in the number of our directors. This year, each of Ms. Richmore streamlined and Messrs. Kackley and Goodson have,cost-effective, Mr. Young, in consultation with the board of directors, voluntarily agreed not to stand forre-election and will retire at the annual shareholders’ meeting.

We have also nominated two new directors to serve on our board of directors. During 2017, we appointed Ms. Richstone to our board of directors and are asking our shareholders to confirm her appointment by electing her as a Class I (2017-2020) director at the annual meeting. In addition, we have, nominated Mr. Young for election as a Class I (2017-2020) director at the annual meeting. We believe that the breadth and diversity ofin consultation with Ms. Richstone’sRichstone and Mr. Young’s experiencePotts, determined that Ms. Richstone and expertiseMr. Potts will provide us with fresh perspectives in the boardroom, while continuing to allow us to further our plan to create a smaller, more flexible board of directors.

We believe that the changes to the size and composition of our board ofeach be nominatedfor re-election as Class II directors, described abovewhich will result in a more streamlinedMs. Richstone and effective corporate governance structure that will better utilize our continuing directors’ multi-disciplinary expertise through greater individual involvement and participation inMr. Pottsserving one-year terms expiring at the operation2021 annual meeting of our board of directors and its committees. Further, we believe that these changes will allow our board to operate at a lower cost to us, while providing our board with increased flexibility to respond to the challenges and opportunities that we face.shareholders.

At the annual meeting, the terms of all four of our three current Class I (2014-2017)(2017-2020) directors (Ms. Richstone and Messrs. Potts and Young) will expire. As discussed above, Ms. Rich and Messrs. Goodson and KackleyMr. Young will retire at the annual meeting. In addition, our board of directors currently does not have any Class III (2016-2019) directors as a result of the recent retirement from our board of John H. Scribante, our former chief executive officer and director. In order to maintain an evenly balanced staggered board, our nominating and corporate governance committee and our board has nominated Mr. Otten to serve as Class III (2016-2019) director following the annual meeting and have nominated Ms. Richstone and Mr. Young to servePotts will stand forre-election as Class I (2017-2020) directors following the annual meeting. In addition, Mr. Potts has agreed to remain on the board following his announced retirement asII directors. Assuming both of our chief risk officer and executive vice president on August 30, 2017 and will be nominated to serve as Class III (2016-2019) director following the annual meeting.

Accordingly, assuming Ms. Richstone and Messrs. Otten, Potts and Youngnominees are elected, at the annual meeting, Messrs. Potts and Otten will have their current class designations changed to Class III and our board will then have two directors in Class II (2015-2018) (Messrs. Altschaefl and Williamson), with terms expiring at the 2018 annual shareholders’ meeting, two directors in Class III (2016-2019) (Messrs. Potts and Otten), with terms expiring at the 2019 annual shareholders’ meeting and two directors in Class I (2017-2020) (Ms. Richstone and Mr. Young), with terms expiring at the 2020 annual shareholders’ meeting. In addition, effective upon the election of directors atfollowing the annual meeting the size of theour board will be reduced from eightseven to six directors. Information about each of our director nominees is set forth below.

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The following tables set forth the structure of the board of directors both before and after the annual meeting, assuming that Ms. Richstone and Messrs. Otten, Potts and Young are elected to the board of directors at the annual meeting:

The individuals named as proxy voters in the accompanying proxy, or their substitutes, will vote for the board’s nominees with respect to all proxies we receive unless instructions to the contrary are provided. If any nominee becomes unavailable for any reason, the votes will be cast for a substitute nominee designated by our board. Our directors have no reason to believe that any of the nominees named below will be unable to serve if elected.

The following sets forth certain information, as of July 17, 2017,June 22, 2020, about each of the board’s nominees for election at the annual meeting and each director of our company whose term will continue after our annual meeting.

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Nominees For Election at the Annual Meeting

Class IIIII Directors (2016-2019)(2018-2021) — Terms Expiring 20192021

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Class I Directors (2017-2020) — Terms Expiring 2020

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RECOMMENDATION OF THE BOARD: The board of directors recommends a voteTHE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR the above director nominees.THE ABOVE DIRECTOR NOMINEES.

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Directors Continuing in Office

Class II Directors (2015-2018)(2018-2021) — Terms Expiring 20182021

6

Class III Directors (2019-2022) — Terms Expiring 2022

We strongly encourage our directors to attend our annual meeting, and it is expected that they will do so. TenSix of our elevenseven then-serving directors attended our 20162019 annual meeting in person.

CORPORATE GOVERNANCE

Board of Directors — General

Our board of directors met 13 times during fiscal 2017,2020, consisting of five mandatory meetings of the board of directors and eight optional meetings of the board of directors. All of our incumbent directors attended at least 75% of the aggregate of (a) the total number of mandatory meetings of the board held during the fiscal year while they were a director and (b) the total number of meetings held by all committees of the board on which they served during the fiscal year while they were serving on the committees.

Our board has determined that each of Ms. Rich and Richstone and Messrs. Goodson, Kackley,Howe, Otten, Williamson and Young is independent under the listing standards of the Nasdaq Capital Market. Our board generally uses the director independence standards set forth by the Nasdaq Capital Market as its subjective independence criteria for directors, and then makes an affirmative determination as to each director’s independence by taking into account other, objective criteria as applicable.

Standing Board Committees

Our board of directors has established the following standing committees: an audit and finance committee, a compensation committee and a nominating and corporate governance committee. Our board has adopted charters for each standing committee describing their respective responsibilities. The charters are available on our website atwww.orionlighting.com. In connection with his appointment as our chief executive officer, our board of directors determined that Mr. Altschaefl was no longer an independent director and, accordingly, reorganized the structure of our standing board committees to remove Mr. Altschaefl from each committee in order to comply with the committee independence standards established by the Nasdaq Capital Market.

Our audit and finance committee is currently comprised of Ms. Richstone and Messrs. Kackley, Goodson, Otten and Williamson, with Mr. Otten acting as chair until June 13, 2017 and Ms. Richstone currently acting as chair. Mr. Altschaefl also served on our audit and finance committee prior to his appointment as our chief executive officer. As a result of the restructuring of the board of directors described above, following the annual meeting, our audit and finance committee will be comprised of Ms. Richstone and Messrs. Otten and Williamson,Howe, with Ms. Richstone acting as chair. Each member of the audit and finance committee is an audit committee financial expert, as defined under rules of the Securities and Exchange Commission (the “SEC”) implementing Section 407 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). The principal responsibilities and functions of our audit and finance committee are to (i) oversee the reliability of our financial reporting, the effectiveness of our internal control over financial reporting, and the independence of our internal and external auditors and audit functions and (ii) oversee the capital structure of our company and assist our board of directors in assuring that appropriate capital is available for operations and strategic initiatives. In carrying out its accounting and financial reporting oversight responsibilities and functions, our audit and finance committee, among other things, oversees and interacts with our independent auditors regarding the auditors’ engagement and/or dismissal, duties, compensation, qualifications and performance; reviews and discusses with our independent auditors the scope of audits and our accounting principles, policies and practices; reviews and discusses our audited annual financial statements with our independent auditors and management; and reviews and approves or ratifies (if appropriate) related party transactions. Our audit and finance committee also is directly responsible for the appointment, compensation, retention and oversight of our independent auditors. Our audit and finance committee met sevensix times in fiscal 2017.2020. Each member of our audit and finance committee meets the requirements for independence under the current rules of the Nasdaq Capital Market and the SEC.

Our compensation committee is currently comprised of Ms. Rich and Messrs. Goodson and Williamson, with Mr. Goodson acting as chair. Mr. Altschaefl also served on our compensation committee prior to his appointment as our chief executive officer. As a result of the restructuring of the board of directors described above, following the annual meeting, our compensation committee will be comprised of Messrs. Otten, Williamson and Young, with Mr. Williamson acting as chair. Following the retirement of Mr. Young after our annual meeting, our compensation committee will be comprised of Ms. Richstone and Messrs. Otten and Williamson, with Mr. Williamson continuing to act as chair. The principal functions of our compensation committee include (i) administering our incentive compensation plans; (ii) establishing performance criteria for, and

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evaluating the performance of, our executive officers;officers (including, in the absence of a lead director, our CEO); (iii) annually setting the salary and other compensation for our executive officers; (iv) overseeing the company’s response to the outcome of theour shareholders’ advisory votevotes on our executive compensation; and (v) annually reviewing the compensation paid to ournon-employee directors. directors; (vi) annually reviewing the compensation committee’s charter, our equity compensation plans and the compensation committee’s current practices, procedures and controls in order to develop, maintain and implement equity compensation compliance procedures; (vii) providing our board of directors with an annual report on our compliance with our procedures, policies, and guidelines for issuing equity awards; and (viii) reviewing and approving all disclosures in our SEC filings, including our annual proxy statement, concerning our equity compensation plans and executive and director compensation matters. In addition,

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members of our compensation committee are required to receive periodic training concerning our operative equity compensation plans and compensation procedures, as well as general best practices for executive compensation. Our compensation committee met sevenfour times in fiscal 2017.2020. Each member of our compensation committee meets the requirements for independence under the current Nasdaq Capital Market and SEC rules. Our compensation committee did not engage the services of a compensation consultant to determine executive compensation for anyeither of fiscal 2014-2018.2020 or fiscal 2021. In general, the compensation committee has determined to engage an independent compensation consultant only if relevant factors or circumstances change significantly.

Our nominating and corporate governance committee is comprised of Ms. RichRichstone and Messrs. KackleyOtten and Otten,Young, with Ms. RichMr. Young acting as chair. Following the retirement of Mr. Altschaefl also served onYoung at our nominating and corporate governance committee prior to his appointment as our chief executive officer. As a result of the restructuring of the board of directors described above, following the annual meeting, our nominating and corporate governance committee will be comprised of Ms. Richstone and Messrs. Otten and Young,Williamson, with Mr. YoungOtten acting as chair. The principal functions of our nominating and corporate governance committee are, among other things, to (i) establish and communicate to shareholders a method of recommending potential director nominees for the committee’s consideration; (ii) develop criteria for selection of director nominees; (iii) identify and recommend persons to be selected by our board of directors as nominees for election as directors; (iv) plan for continuity on our board of directors; (v) recommend action to our board of directors upon any vacancies on the board; and (vi) consider and recommend to our board other actions relating to our board of directors, its members and its committees. Our nominating and corporate governance committee met four times in fiscal 2017.2020. Each member of our nominating and corporate governance committee meets the requirements for independence under the Nasdaq Capital Market and SEC rules.

Board Leadership Structure and Role in Risk Oversight

Our board of directors does not have a policy on whether or not the roles of chief executive officer and board chair should be separate. Our board reserves the right to assign the responsibilities of the chief executive officer and board chair into different individuals or into the same individual if, in the board’s judgment, a combined chief executive officer and board chair position is determined to be in the best interest of our company. In the circumstance where the responsibilities of the chief executive officer and board chair are vested in the same individual or in other circumstances when deemed appropriate, the board will designate an independent lead director from among the independent directors. The duties of the lead director include (i) conferring with the board chair on, and approving, meeting agendas and meeting schedules to assure there is sufficient time for discussion of all agenda items; (ii) calling and presiding over all meetings of the board at which the board chair is not present, including executive sessions; (iii) leading the annual performance reviews of the chief executive officer and the board; (iv) ensuring that there is open communication between our independent directors, the board chair and other management members; (v) being available, when deemed appropriate by the board, for consultation and direct communication with shareholders; and (vi) reviewing, at his or her discretion, information to be sent to the board.

The positions of chief executive officer and board chair had been separate since August 25, 2010, when our board elected Mr. Kackley as the non-executive board chair. In connection with the initial restructuring of the board of directors in August 2016, our board elected Mr. Altschaefl to serve as the non-executive board chair following our 2016 annual meeting of shareholders. On2010; however, on May 25, 2017, our board restructured our management team and appointed Mr. Altschaefl (our then servingnon-executive board chair) to serve as our chief executive officer, thereby combining the positions of chief executive officer and board chair. InAs a result, in June 2017, our board designated Mr. Otten to serve as our board’s independent lead director. Our board believes that this leadership structure will assistassists our board in implementing our companywide realignment focused on cost reductions intended to accelerate our path to profitability,strategic plan, creates streamlined accountability for our performance, and facilitates our board’s efficient and effective functioning. Our board also believes that having Mr. Altschaefl serve as both our chief executive officer and our board chair will allowallows him to leverage the information gained from both roles to effectively lead our company, while having Mr. Otten serve as our lead director will continuecontinues to help our board execute independent oversight of our

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management team. Our board retains the authority to modify this structure to best address our company’s unique circumstances as and when appropriate.

Our full board is responsible for the oversight of our enterprise risk management process. Our board is responsible for overseeing our management team’s identification of certain enterprise risks that could adversely affect our company and the steps management has taken or plans to take to monitor, control and report such risks, including risks relating to the execution of our strategy to achieve profitability, our changing sales and distribution model, the sufficiency of our liquidity and capital, customer concentration, competitive pressures on the average sales

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price of our products, adapting to convergence and commoditization in the lighting industry, the introduction of new, low-cost competitors in the lighting industry, uncertain political and economic conditions, the impact of changes in trade policies and tariffs on our components and products, cybersecurity risk, component inventory supply, retention of key employees, innovation and product development, creating shareholder value, adapting to convergencesupply chain and communization in the lighting industry, uncertain economic conditions,inventory management, communication with investors, certain actions of our competitors, the protection of our intellectual property, inventory investment and risk of obsolescence, security of information systems and data, implementation of new information systems, credit risk, exchange rate risk, product liability, costs of reliance on external advisors and addition of new renewable energy technologies. Our management reports on these risks periodically to our board. Our board relies on our compensation committee to address significant risk exposures facing our company with respect to compensation. As described herein under the heading “Risk Assessment of our Compensation Policies and Practices,” each year, our compensation committee conducts a review of our compensation policies and practices to assess whether any significant risks arising from such policies and practices are reasonably likely to materially adversely affect our company. In addition, our audit committee supports the board’s risk oversight function by overseeing and managing risks relating to the reliability of our financial reporting and the effectiveness of our internal control over financial reporting, as well as risks related to our liquidity and capital structure. Our board’s role in the oversight of our risk management has not affected our board’s determination that the combined chief executive officer and board chair position (with the designation of an independent lead director) constitutes the most appropriate leadership structure for our company at this time. Our audit and finance committee and our full board review and comment on the draft risk factors for disclosure in our annual and quarterly reports and use the receipt of such draft risk factors to initiate discussions with appropriate members of our senior management if such risk factors raise questions or concerns about the status of enterprise risks then facing our company.

Nominating and Corporate Governance Committee Procedures

Our nominating and corporate governance committee will consider shareholder recommendations for potential director nominees, which should be sent to the nominating and corporate governance committee, c/o board secretary, Orion Energy Systems, Inc., 2210 Woodland Drive, Manitowoc, Wisconsin 54220. The time by which such recommendations must be received in order to be timely is set forth below under “Shareholder Proposals.” The information to be included with recommendations is set forth in our Amended and Restated Bylaws, and factors that our nominating and corporate governance committee will consider in selecting director nominees are set forth in our Corporate Governance Guidelines. Our Corporate Governance Guidelines are available on our website atwww.orionlighting.com. Our nominating and corporate governance committee evaluates all potential nominees in the same manner, and may consider, among other things, a candidate’s strength of character, mature judgment, career specialization, relevant technical skills or financial acumen, industry knowledge and experience and geographic, gender, age, and ethnic diversity. Our nominating and corporate governance committee believes that directors should display the highest personal and professional ethics, integrity and values and sound business judgment. The committee also believes that, while diversity and variety of experiences and viewpoints represented on our board should always be considered, a director nominee should not be chosen nor excluded solely or largely because of geographic, gender, age or ethnic diversity. Our nominating and corporate governance committee evaluates each incumbent director to determine whether he or she should be nominated to stand forre-election, based on the types of criteria outlined above, as well as the director’s contributions to the board during their current term. As part of its periodic self-assessment, our nominating and corporate governance committee assesses the effectiveness of its director selection policy described in this paragraph, including its provisions relating to the consideration of diversity.

Code of Conduct

We have adopted a Code of Conduct that applies to all of our directors, employees and officers, including our principal executive officer, our principal financial officer, our controller and persons performing similar

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functions. Our Code of Conduct is available on our web site atwww.orionlighting.com. Any material amendments or waivers relating to the Code of Conduct will be disclosed on our web site referenced in this paragraph within four business days following the date of such amendment or waiver.

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EXECUTIVE OFFICERS

The following table sets forth information as of July 17, 2017June 22, 2020 regarding our current executive officers:

The following biographies describe the business experience of our executive officers. (For biographiesa biography of Messrs.Mr. Altschaefl, and Potts, see “Proposal One: Election of Directors” above.)

William T. Hull has served as our chief financial officer, chief accounting officer and treasurer since October 2015 and became an executive vice president on April 1, 2017. Prior to his joining our company, Mr. Hull previously served as an executive of RTI International Metals, Inc., a formerly NYSE listed producer and global supplier of titanium mill products, and a manufacturer of fabricated titanium and specialty metal components, serving most recently as senior vice president and chief risk officer since July 2014 and, prior to that time, serving as senior vice president and chief financial officer since April 2007 and as vice president and chief accounting officer since August 2005. Prior to joining RTI International Metals, Inc. in 2005, Mr. Hull served as corporate controller of Stoneridge, Inc., a NYSE listed global designer and manufacturer of highly engineered electrical and electronic components, modules and systems for the commercial vehicle, automotive, agricultural andoff-highway vehicles vehicle markets, where he was employed since 1986. Mr. Hull is a certified public accountant.

Scott A. Greenhas served as our chief operating officer since May 25, 2017, and our executive vice president since August 2016. Mr. Green previously served as our division president: innovation, project engineering and construction management from July 2015 to August 2016, our division president: Orion Engineered Systems from February 2014 to July 2015 and our division president: Harris Lighting from July 2013 to February 2014. Prior to joining us in connection with our acquisition of Harris Manufacturing, Inc. and Harris LED, LLC in July 2013 (“Harris”), Mr. Green served as the executive vice president of Harris from January 2011 until July 2013 and as chief executive officer of Harris from June 1997 to January 2011. Mr. Green graduated from Central Michigan University with a bachelor of science in business.

Marc Meade has served as our executive vice president since January 2014. Mr. Meade had previously served as our senior vice president of finance and operations since November 2012, as vice president of finance and operations of Orion Asset Management and director of finance from February 2012 until November 2012, as finance and taxation manager from 2010 until February 2012 and as director of business development from 2009 to 2010. Prior to joining us in May 2009, Mr. Meade was staff assistant at Schenck SC in the government and not-for-profit solutions division from January 2009 until May 2009. Mr. Meade graduated from Lakeland College in May 2009 with a Bachelor of Arts in accounting with an emphasis in taxation and minor in economics.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This compensation discussion and analysis describes the material elements of compensation awarded to, earned by, or paid to each of our named executive officers, whom we refer to as our “NEOs,” during our fiscal 20172020 and describes our policies and decisions made with respect to the information contained in the following tables, related footnotes and narrative for our fiscal 2017. The2020. Our NEOs are identified below in the table titled “Summary Compensation Table for Fiscal 2017.2020.” In this compensation discussion and analysis, we also describe various actions regarding NEO compensation taken before or after our fiscal 20172020 when we believe it enhances the understanding of our executive compensation program, including actions taken with respect to the material elements of compensation awarded to our NEOs for our fiscal 2018.2021.

Overview of Our Executive Compensation Philosophy and Design

General

We believe that a skilled, experienced and dedicated senior management team is essential to the future performance of our company and to building shareholder value. We have sought to establish competitive compensation programs that enable us to attract and retain executive officers with these qualities. The other objectives of our compensation programs for our executive officers are the following:

In light of these objectives, we have sought to reward our NEOs for achieving our financial performance goals, creating value for our shareholders, and for loyaltytheir extraordinary effort and dedication to our company. WeOver the recent past, we have historically implemented executive incentive compensation plans that have focused on achieving positive net income and EBITDA (defined as our earnings before interest, tax, depreciation and amortization), along with revenue growth. Our fiscal 2017 compensation program was designed to incentivize and reward short-term and long-term decisions that benefited growth in revenue and EBITDA and increased shareholder value. value enhancements.

In early fiscal 2018, we completed a restructuring of our management team, and are in the process of implementingimplemented a new corporate culture focused on cutting costs and accelerating our path to profitability.profitability while continuing to increase our revenue. As a result, in early fiscal 2018, our executive compensation program was restructured, based on the voluntary recommendation of our management, to decrease our overall executive compensation expense and incentivize decisions that helped us achieve positive net income and EBITDA, while continuing to increase our revenue.

In fiscal 2019 and 2020, we continued to focus our executive incentive compensation program on achieving profitability and positive cash flow, which resulted in our executive annual bonus program being based on achieving positive EBITDA and net income.

Our financial and shareholder value results in fiscal 2020 were impressive, including:

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For fiscal 2021, we have focused our executive incentive compensation program on sustaining the financial success we achieved in fiscal 2020. As a result, our fiscal 2018 compensation2021 executive annual bonus program is designed to incentivize decisions that help us achieve our goals related tobased on achieving positive EBITDA and accelerating our path to profitabilityat least $10 million of net income in fiscal 2018.2021.

Fiscal 2020

In late fiscal 2016,2019, in consultation with the chair of our management teamcompensation committee, our chief executive officer recommended, and our compensation committee approved, the following attributes for our fiscal 20172020 executive compensation program:

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In late fiscal 2017, our compensation committee initially approved the attributes of our fiscal 2018 executive compensation program, including (i) a freeze on all NEO salaries, other than Mr. Potts, whose salary was decreased to reflect his change in title, responsibilities and compensation structure in connection with his transition to the role of chief risk officer and executive vice president, (ii) freezing the level of long-term equity awards for all NEOs, other than Mr. Potts, whose award was decreased in connection with his decrease in salary, (iii) implementing

Fiscal 2021

In lightlate fiscal 2020, after consultation with the chair of these events, our management team and our compensation committee, reevaluatedour chief executive officer recommended, and substantially revised our fiscal 2018 executive compensation program in furtherance of our initiative to reduce costs and achieve profitability. Following this reevaluation, our compensation committee approved, the following revised attributes for our fiscal 20182021 executive compensation program, effective as of June 2017:program:

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Following the determination of our fiscal 2021 executive compensation program, our compensation committee, upon the recommendation our executive team, delayed the implementation of the previously approved fiscal 2021 NEO salary increases for the first quarter of fiscal 2021. This decision was made in connection with our efforts to control costs and reduce our cash spend in order to help mitigate the effects of the global economic slowdown caused by theCOVID-19 pandemic. Following the first quarter of fiscal 2021, it is expected that the previously approved salary increases will go into effect, but the compensation committee has reserved the right to further delay the planned salary increases if necessary.

In early fiscal 2021, our compensation committee reconsidered our fiscal 2021 annual cash bonus program in light of the economic and operational uncertainty created by theCOVID-19 pandemic and implemented a revised fiscal 2021 annual cash bonus program. The revised fiscal 2021 annual cash bonus program provides that our NEOs will be eligible to split a bonus pool equal to 50% of our net income (calculated after taking into account all bonuses) in excess of an amount to be determined in the discretion of the compensation committee

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based on its evaluation of all relevant factors, including particularly the impact of theCOVID-19 pandemic on our results of operations and the effectiveness of management’s responses thereto. The total bonus pool remains capped at a maximum of $775,000 and is further subject to individual caps based on each NEO’s target bonus amount (which are unchanged). In addition, our compensation committee similarly determined to revise our $100,000 discretionary financial performance bonus pool to provide that the net income performance criteria will be reduced by an amount equal to any projectdetermined at the discretion of the compensation committee based on the same criteria as our revised fiscal 2021 annual cash bonus payments earned by Mr. Potts. We believeprogram. While our compensation committee has historically followed the additiongenerally-encouraged practice of these additional bonus opportunities further evidencesestablishing objective financial performance criteria for the achievement of annual cash incentive bonuses, our commitment of “paying for performance” as it puts a greater percentage of our NEOs’ total potential compensation “at risk” if certain performance goals are not satisfied. The committee believes thatit is appropriate to not determine a fixed performance criteria at this structure will further motivate managementtime given the current unprecedented uncertainty of being able to achievereasonably and objectively establish a baseline forecast or budget for our fiscal 2021 results of operations due to the company’s financial and strategic objectives and thereby enhance shareholder value;

Continuing to implement new initiatives to support our continued transition to LED products;Fiscal 2020 Executive Compensation

Additionally, in preparation for deciding the personal income tax liabilities incurredfiscal 2021 executive compensation levels, our chief executive officer and compensation committee reviewed several outside expert reports, surveys and public company peer comparisons. In particular, the committee noted that our closest public company peer, LSI Industries, Inc., currently provides its chief executive officer, chief financial officer and chief operating officer with base salaries of $550,000, $340,000 and $325,000, respectively, together with annual bonus opportunities of up to 160% of base salary and long-term incentive compensation opportunities of up to 150% of base salary.

Our compensation committee then considered the dramatic financial improvements experienced by our Company since our Company’s management changes were effected in May 2017, including:

Our chief executive officer and the compensation committee then reviewed the compensation levels of our Company’s management team over the past three fiscal years, compared to the compensation levels of our management team prior to the management change in May 2017. Specifically, our compensation committee noted that our Company’s prior chief executive officer had a compensation package of base salary, target annual bonus potential and long-term incentive grant totaling over $1.6 million.

Our chief executive officer and the compensation committee also reviewed the proposed base salary increases for our NEOs. They noted that, even with the proposed fiscal 2021 salary increases for our Company’s current three NEOs, uponas the vestingresult of the departure of Mr. Meade as an NEO, the total of all base salaries payable to our Company’s three current NEOs will be virtually the same as the total base salaries initially approved for our Company’s four executive officers in fiscal 2020. With respect to the recommended fiscal 2021 salary increases for Messrs. Hull and Green, Mr. Altschaefl recommended equivalent base pay for both officers given their strong recent performance and critical role played in our dramatic financial improvements in fiscal 2020.

Our chief executive officer and the compensation committee thereafter determined to structure our proposed fiscal 2021 annual bonus plan on the same basis as our fiscal 2020 net income-based plan, with a proposed potential fiscal 2021 NEO annual bonus pool equal to 50% of our net income in excess of $10 million (after taking into account all bonuses), but with individual bonus payments capped at 100% of the fiscal 2021 salary for our chief executive officer and 50% of fiscal 2021 salary for both the chief financial officer and chief operating officer. In addition, consistent with our Company’s fiscal 2020 bonus plan structure, our compensation committee determined that an additional NEO discretionary financial performance bonus pool of $100,000 would be made available for allocation by our chief executive officer among our NEOs (other than the chief executive officer) if we achieve at least $10 million in fiscal 2021 net income. The committee noted that, as a result of the departure of Mr. Meade as an NEO, the total targeted NEO annual bonus pool for fiscal 2021 will be only 5.9% higher than the initial total targeted NEO bonus pool for fiscal 2020.

Following the initial determination of our fiscal 2021 annual bonus plan and discretionary financial performance bonus pool, our chief executive officer and the compensation committee reevaluated these programs in light of the economic and operational uncertainty created by theCOVID-19 pandemic. Our chief executive officer and the compensation committee determined that while it was appropriate for our fiscal 2021 annual bonus plan and discretionary financial performance bonus pool to retain their previously approved structure, the performance thresholds triggering bonus eligibility and the availability of the $100,000 financial performance bonus pool would be left to the discretion of our compensation committee given the current uncertainty of being able to

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reasonably and objectively establish a baseline forecast or budget for our fiscal 2021 results of operations due to theCOVID-19 pandemic. Our chief executive officer and compensation committee believe that this approach allows the compensation committee time to take into account all relevant factors and establish a challenging, but obtainable goal in light of the unprecedented effect ofCOVID-19 on the economy and our business.

Our chief executive officer and the compensation committee also determined that our NEOs’ fiscal 2021 annual long-term incentive grants should remain the same on apercentage-of-salary basis as in fiscal 2020, with the grant to be awarded in the form of shares of restricted stock awards. The revisedthat vest on apro-rata basis over a three-year employment period after their effective grant date. As a result, our NEOs would be granted fiscal 20182021 annual restricted stock grants valued at 85% of each NEO’s fiscal 2021 base salary compensation. However, given our exceptional financial performance during fiscal 2020 and the substantial additional share availability under the 2016 Plan approved by our shareholders at our 2019 Annual Meeting of Shareholders, our chief executive officer proposed, and our compensation committee approved, reverting for fiscal 2021 to our prior practice of allowing each NEO to choose whether to accept his annual long-term incentive awards represent a 43% reductiongrant either in 100% restricted stock, or in the form of 60% of the dollar value of the total NEO long term incentive awards approved for fiscal 2017award in restricted stock and a 45% reduction in40% of the dollar value of the total NEO long term incentive awards initially approved for fiscal 2018.

In addition, our compensation committee considered and approved changes to our annual incentive cash bonus opportunityaward in order to better motivate our NEOs to achieve the company’s strategic and financial objectives and thereby enhance shareholder value. The committee determined that it would be in the best interest of the company to adopt a cash bonus program that rewards management for generating positive EBITDA in fiscal 2018. Under the revised fiscal 2018 cash bonus program, our NEOs will participate in a bonus pool of up to 50% of our positive fiscal 2018 EBITDA (calculated after taking into account all bonuses), with the total bonus pool capped at a maximum of $710,000 (a 29% decrease from the target bonus pool under our original fiscal 2018 cash bonus program and a 27% decrease from the target bonus pool approved in fiscal 2017). Payments made to our NEOs from the EBITDA-based bonus pool will be on a pro rata basis based on each NEO’s percentage share of the total target bonus pool determined by their relative target bonus amount compared to the total target bonus amount.restricted cash. Our compensation committee believes that the changes to our annual incentive cash bonus opportunity align the interests of management with our directive to accelerate our path to profitability in fiscal 2018, while also imposing limitations that mitigate compensation risk and ensure that our shareholders will be able to benefit (through the appreciation of our stock price) in at least 50% of any positive EBITDA.

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Our compensation committee also considered and approved: (i) a maximum $75,000 project-based bonus opportunity for Mr. Potts based on his successful completion of certain cash generating projects, which will continue to apply to Mr. Potts following his retirement and (ii) a maximum $150,000 discretionary financial performance bonus pool (triggered if we achieve at least $500,000 in EBITDA for fiscal 2018) for our NEOs. The discretionary financial performance bonus pool will be reduced by an amount equal to any project bonus payments earned by Mr. Potts. In establishing these new cash bonus opportunities, the compensation committee considered the board’s focus on accelerating our path to achieving profitability, the decisions to decrease both of our NEO base salaries and their long-term incentive awards, and that Mr. Potts’ base salary had separately been reduced as a result of his new title and responsibilities prior to the board’s cost reduction initiative and prior to Mr. Potts’ announced retirement. The compensation committee also considered the company’s recent financial performance. Based on these considerations, the compensation committee favored the creation of additional bonus opportunities because the committee believed that any potential additional incentive compensation earned by our NEOs should be tied to the achievement of the company’s financial and strategic goals. In addition, our compensation committee favored the creation of a project-based bonus opportunity for Mr. Potts to be rewarded based on the successful completion of cash generating projects that will enhance our liquidity.

In connection with Mr. Altschaefl’s promotion to chief executive officer we provided Mr. Altschaefl withand compensation committee noted that the following compensation arrangements: (i) an initial annual base salary of $325,000 (40% less than our prior chief executive officer); (ii) a grant of $260,000 (52% less than our prior chief executive officer), or 113,044 shares, in restricted stock vesting annually pro rata over a three-year period; and (iii) participation by Mr. Altschaefl in our annual and/or long-term bonus plans as well as our employee benefit plans made available to other senior executives. Mr. Altschaefl was also permitted to participate in our fiscal 2018 cash bonus program for executives, with a target maximum bonus equal to 100% of his base salary (with the actualtotal dollar amount being 40%of proposed fiscal 2021 long-term incentives to be granted to the Company’s three NEOs would be slightly less than the maximum bonus available to our prior chief executive officer). In setting the compensation package for Mr. Altschaefl, our compensation committee considered our cost reduction initiatives, the compensationtotal dollar amount of our other NEOs, Mr. Altschaefl’s new role and responsibilities, Mr. Altschaefl’s prior and expected contributions to our company, Mr. Altschaefl’s personal and professional sacrifices undertaken to assume the role of our chief executive officer, as well as general competitive factors.

Summary of Changes to Executive Compensation

The following graph illustrates the changeslong-term incentive grants made to the major elements of our executive compensation program for fiscal 2018 as a result of the events described above:

Base Salary

We pay our NEOs a base salary to compensate them for services rendered and to provide them with a steady source of income for living expenses throughout the year.

In late fiscal 2016, management2019, in consultation with the chair of our compensation committee, our chief executive officer recommended, and our compensation committee approved, freezes onthree percent increases to the fiscal 20172020 salaries for each of our NEOs. TheOur NEOs’ fiscal 2020 salaries for each ofwere increased due to the committee’s desire to reward management’s efforts in reducing our NEOs were frozen duecosts, as well as our relative financial and stock price performance in fiscal 2016.2019, all taking into account the decrease in NEO salaries in fiscal 2018 and freeze on NEO salaries in fiscal 2019.

In late fiscal 2017, management2020, in consultation with the chair of our compensation committee, our chief executive officer recommended, and our compensation committee approved, freezes onincreases to the fiscal 20182021 base salaries forof each of our NEOs other than Michael J. Potts, whose salary was decreasedso that they are now more commensurate with their levels prior to reflect his change in title, responsibilities and compensation structure in connection with his transition to the role of chief risk officer and executive vice president. The salaries for each of our NEOs were frozen due to our fiscal 2017 financial results.

Promptly after our management restructuring and voluntary compensation reductions in early June 2017, our management andfiscal 2018. Our compensation committee conducted a reevaluation of the fiscal 2018 salaries for each of our NEOs in view of our new goals of reducing costs, accelerating our path to profitability and increasing our revenue. Asalso believed that such salary increases were warranted as a result of such reevaluation and our review ofhighly successful financial performance in fiscal 2020, as well as being more generally consistent with our new fiscal 2018 goals and objectives, our management recommended, and our compensation committee approved, decreases to the salaries ofclosest publicly-traded peer company, LSI Industries, Inc. Even with these increases, because our NEOs other than Mr. Green, whose salary was increasednow only total three as opposed to reflect his additional responsibilities following his appointmentfour as of April 1, 2019, our chief operating officer. In addition, Mr. Potts’ salary was pro-ratedtotal NEO base salaries in fiscal 2021 will not exceed their initially approved total for fiscal 2018 to reflect his decision to retire on August 30, 2017. The change in the base salaries of our NEOs represents a 26% reduction from the base salaries approved in fiscal 2017 and a 24% reduction in the base salaries initially approved for fiscal 2018.2020.

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The revised fiscal 20182021 base salaries for our NEOs compared to their original fiscal 2018 base salaries and fiscal 20172020 base salaries are as follows:

Following the determination of our fiscal 2021 executive compensation program, our compensation committee, upon the recommendation our executive team, delayed the implementation of the previously approved fiscal 2021 NEO salary increases for the first quarter of fiscal 2021. This decision was made in connection with our efforts to control costs and reduce our cash spend in order to help mitigate the effects of the global economic slowdown caused by theCOVID-19 pandemic. Following the first quarter of fiscal 2021, it is expected that the previously approved salary increases will go into effect, but the compensation committee has reserved the right to further delay the planned salary increases if necessary.

Incentive Compensation — Fiscal 20172020

For fiscal 2017,2020, in consultation with the chair of our managementcompensation committee, our chief executive officer proposed, and our compensation committee approved, an incentive compensation program for our NEOs that

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consisted of (i) an annual incentive cash bonus opportunityopportunities and (ii) long-term equity-based incentive compensation, consisting of awards of three-year pro rata vesting restricted stock grants (representing 60% of the total dollar amountvalue of the long-term equity-based incentive award) and cash awards payablein one-third increments upon the annual vesting of the tandem restricted stock awards (representing 40% of the total dollar amountvalue of the long-term equity-based incentive award) in order to provide liquidity to our NEOs for the personal incometheir tax liabilities incurred by our NEOs upon the vesting of the restricted stock awards; provided, however, that we permitted our NEOs to elect (prior to the grant of the award) to forego theawards. These annual cash portion ofbonus opportunities and the long-term incentive award and receive the entire long-term incentive award in the form of three-year pro rata vesting restricted stock. The annual incentive cash bonus opportunity and the long-termequity-based incentive compensation for fiscal 20172020 for our NEOs are discussed in detail below.

Annual Incentive Cash Bonus OpportunityOpportunities for Fiscal 20172020

Under theour fiscal 20172020 executive annual cash bonus program, forour NEOs no bonuses were eligible to be paid unless we achieved at least (i) $500,000 of profit before taxes and (ii) revenue growth of 10% more than our fiscal year 2016 revenue. Under the fiscal 2017 bonus program, for every $1.00 of profit before taxes and bonus expenses earned over the $500,000 threshold up to $1.0 million, aparticipate in an annual bonus pool of $0.38 would have been earned, and for every $1.00 of profit before taxes and bonus expenses earned over $1.0 million up to $3.5 million, a bonus pool50% of $0.25 would have been earned. The maximumour positive fiscal 2020 net income (calculated after taking into account all bonuses), with the total bonus pool capped at a maximum of $732,000 (a three percent increase from fiscal 2019 to correspond with the increase in NEO salaries for fiscal 2020) and with individual awards further capped at each NEO’s target bonus amount. Payments made to our NEOs was $994,247.from this net income-based bonus pool were made on a pro rata basis based on each NEO’s percentage share of the total target bonus pool determined by their relative target bonus amount compared to the total target bonus amount, subject to each NEO’s individual cap based on their target bonus amount. Our compensation committee selected net income as the sole component of our fiscal 2020 annual cash bonus program due to management’s and our committee’s goal to incentivize the generation of actual, unadjusted positive net income in fiscal 2020. Since our Company achieved net income of $12.6 million in fiscal 2020, each NEO (other than Mr. Meade) received the maximum annual bonus amount payable.

The following table sets forth information on our NEO annual bonuses for fiscal 2020:

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The compensation committee established a target maximum bonus for each of our NEOs as follows for fiscal 2017:

revenue from a major customer. As a result, Mr. Altschaefl was granted a $50,000 discretionary bonus and Messrs. Hull, Green and Meade were each granted a $25,000 discretionary bonus.

Long-Term Equity-Based Incentive Compensation for Fiscal 20172020

Our managementIn consultation with the chair of our compensation committee, our chief executive officer proposed, and our compensation committee approved, annual long-term equity-based incentive awards for fiscal 20172020 initially valued upon grant at $542,991$285,800 for Mr. Scribante, $305,371 for Mr. Potts, $305,371Altschaefl, $248,200 for Mr. Hull, $227,817$240,600 for Mr. MeadeGreen and $151,878$186,200 for Mr. Green. Mr. Hull’s and Mr. Green’s awards consisted of three-year pro rata vesting restricted stock. The remainder ofMeade. In order to preserve share availability under our NEOs were provided2016 Plan, our compensation committee required that 60% of theirthe dollar value of each award be granted in the form of three-year pro rata vesting restricted stock and 40% of the dollar value of the award be granted in the form of cash payable inone-third increments upon the annual vesting of the tandem restricted stock awards in order to provide liquidity to our NEOs for their personal income tax liabilities incurred upon the vesting of the restricted stock awards. In prior years, our NEOs had been permitted to elect whether to receive their long-term equity-based incentive awards either in the form of 100% restricted stock or in the form of 60% restricted stock and 40% restricted cash.

Our compensation committee grantedcontinued to grant our NEOs awards of three-year pro rata vesting restricted stock in fiscal 2020 because it continued to believe that granting restricted stock rewards our NEOs for increasing shareholder value and also helps to motivate and retain our NEOs while aligning their economic interests with our shareholders through long-term equity ownership.

into account all bonuses), with the total bonus pool capped at a maximum of $710,000. The revised fiscal 2018$775,000 and individual awards capped at the NEO’s target bonus pool represents a 29% decrease from the target bonus pool under our original fiscal 2018 cash bonus program and a 29% decrease from the target bonus

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pool approved for fiscal 2017.bonus. Payments made to our NEOs from the EBITDA-basednet income-based bonus pool willare to be made on a pro rata basis based on each NEO’s percentage share of the total target bonus pool determined by their relative target bonus amount compared to the total target bonus amount, subject to each NEO’s individual cap based on their target bonus amount.

Under our 2018 Our compensation committee selected net income as the sole component of the fiscal 2021 cash bonus program EBITDA is defined asdue to management’s and our earnings before interest, tax, depreciation and amortization.committee’s goal to incentivize the generation of sustainable net income in fiscal 2021 compared to fiscal 2020.

The revised fiscal 2018 cashcompensation committee established a target maximum bonus program targets for each of our NEOs compared to their originalas follows for fiscal 2018 cash bonus program targets and fiscal 2017 cash bonus program targets are as follows:2021:

Our compensation committee has the discretion to adjust the achievement of the financial goals under the fiscal 20182021 cash bonus program for unusual and nonrecurring factors and events, such as acquisitions and other unusual events, costs and expenses.

Initial Long-Term Equity-Based Incentive Compensation for Fiscal 20182021

In late fiscal 2017,consultation with the chair of our managementcompensation committee, our chief executive officer proposed, and our compensation committee approved, long-term equity-based incentive awards for fiscal 20182021 initially valued upon grant at $545,000$361,250 for Mr. Scribante, $315,000Altschaefl, $297,500 for Mr. Hull $260,000and $297,500 for Mr. Potts, $235,000 for Mr. Meade and $225,000 for Mr. Green.

Revised Long-Term Equity-Based Incentive Compensation for Fiscal 2018

In early June, 2017, following the restructuring of our management team and comprehensive reevaluation of our the fiscal 2018 long-term incentive awards, our management proposed, and our Our compensation committee approved, revised long-term incentive awards for fiscal 2018 initially valued upon grant at $260,000 for Mr. Altschaefl, $226,800 for Mr. Hull, $220,000 for Mr. Green and $169,200 for Mr. Meade. The revised fiscal 2018 long-term incentive awards represent a 45% reductionreturned to ourpre-fiscal 2020 practice of allowing our NEOs to choose accepting their award either in the form of 100% restricted stock or in the form of 60% of the dollar value of the long term incentive awards initially approved for fiscal 2018 and a 43% reduction in the dollar value of the long term incentive awards approved for fiscal 2017. Mr. Potts did not receive a long-term incentive award in fiscal 2018 as a result of his decision to retire on August 30, 2017.

The revised fiscal 2018 long-term incentive awards for our NEOs compared to their original fiscal 2018 long-term incentive awards and fiscal 2017 long-term incentive awards are as follows:

Severance and Change of Control Arrangements

Fiscal 2021 Employment Agreement Amendments

In early fiscal 2021, at the request of our NEOs, our compensation committee approved amended and restated employment agreements with Messrs. Altschaefl, Hull and Green. The purpose of these amendments were to update and harmonize the terms of employment for each of our NEOs, including harmonizing the conditions under which the employment of our NEOs could be terminated and the benefits our NEOs would receive upon termination. The most significant changes were to provide that (i) that our NEOs’ employment agreements will remain in place at all times while employed with Orion (rather than providing for a specific term with automatic renewals), (ii) upon a qualifying termination not in connection with a change in control, we would accelerate the vesting of a portion of their unvested equity awards, and (iii) each of Messrs. Hull and Green will receive apro-rata cash bonus for their year of termination as part of their severance benefit (which was previously only available to Mr. Altschaefl) upon a qualifying employment termination.

General

We provide certain protections to our NEOs in the event of certain terminations of their employment, including enhanced protections for certain terminations that may occur after a change of control of our company. However, our NEOs (other than Mr. Altschaefl) will only receive the enhanced severance benefits following a change in control if their employment terminates without cause or for good reason. We describe this type of severance arrangement as being subject to a “double trigger.”

Mr. Altschaefl’s Amended and Restated Executive Employment and Severance Agreement contains protections that would provide Mr. Altschaefl with certain enhanced severance benefits in the event that (i) a change of control of our Company occurs prior to the end of Mr. Altschaefl’s employment period or (ii) prior to the occurrence of a change of control of our Company, but following our entry into a legally binding written agreement, arrangement or understanding that would result in a change of control, Mr. Altschaefl’s employment is terminated by us without cause or Mr. Altschaefl terminates his employment with us for good reason. We describe this type of change of control arrangement as being subject to a “single trigger.” Our compensation committee determined that it was in the best interest of our Company to provide Mr. Altschaefl with a single trigger change of control provision in his employment agreement in consideration of Mr. Altschaefl’s goals and objectives and his personal and professional sacrifices undertaken to assume the role of our chief executive officer following our management transition in early fiscal 2018 and Mr. Altschaefl’s willingness to receive significantly less in total annual compensation than our prior chief executive officer and the chief executive officers of our “peer companies” (as identified by ISS in fiscal 2018).

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All payments, including any severance payments, to be made to our NEOs in connection with a change of control under their employment agreements and any other of our agreements or plans will be subject to a potential “cut-back”“cut-back” in the event any such severance payments or other benefits become subject tonon-deductibility or excise taxes as “excess parachute payments” under Code Section 280G or 4999. Thecut-back provisions have been structured such that all amounts payable under their employment agreements and other of our agreements or plans that constitute change of control payments will be cut back to one dollar less than three times the executive’s “base amount,” as defined by Code Section 280G, unless the executive would retain a greater amount by receiving the full amount of the payment and paying the related excise taxes (aso-called “valley provision”).

Our 2003 Stock Option Plan, 2004 Stock and Incentive Awards Plan and 2016 Omnibus Incentive Plan also provide potential protections to our NEOs in the event of certain changes of control. Under these plans, our NEOs’ stock options and restricted stock that are unvested at the time of a change of control may become vested on an accelerated basis in the event of certain changes of control. In addition, our restricted stock award agreements under the 2004 Stock and Incentive Awards Plan and 2016 Omnibus Incentive Plan provide for the automatic vesting of all unvested shares of restricted stock upon a change of control. Moreover, each of our NEOs’ Executive Severance and Employment Agreements were amended and restated in fiscal 2021 to provide that any unvested equity awards held by our NEOs will be automatically accelerated upon a qualifying termination prior to a change of control, but only to the extent such equity awards would have vested within two years following the date of such qualifying termination.

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We selected these triggering events to afford our NEOs some protection in the event of a termination of their employment, particularly after a change of control of our company.Company. We believe these types of protections better enable our NEOs to focus their efforts on behalf of our companyCompany without undue concern over the impact on their employment or financial security of a change of control of our company.Company. We also provide severance benefits in order to obtain from our NEOs certain concessions that protect our interests, including their agreementagreements with respect to confidentiality, intellectual property rights waiver,non-solicitation and non-competition provisions.non-competition. See below under the heading “Payments upon Termination or Change of Control” for a description of the specific circumstances that would trigger payment or the provision of other benefits under these arrangements, as well as a description, explanation and quantification of the payments and benefits under each circumstance.

Management Changes in Early Fiscal 2018

On May 25, 2017, we announced the restructuring of our management team, including the departure of Mr. Scribante as our chief executive officer. In connection with this management restructuring, Mr. Altschaefl was appointed by our board as our new chief executive officer.

Scribante Severance Agreement.In connection with Mr. Scribante’s departure, we and Mr. Scribante entered into a Mutual Termination and Severance Agreement and Complete and Permanent Release of All Claims (the “Severance Agreement”) on June 8, 2017. Pursuant to the Severance Agreement, we have affirmed our obligation to provide certain severance payments and benefits required to be provided to Mr. Scribante as a result of a termination without “cause” pursuant to the terms of his Executive Employment and Severance Agreement with us, including a lump sum severance payment of $1,172,123.29 (calculated in accordance with Mr. Scribante’s Executive Employment and Severance Agreement as (i) two times Mr. Scribante’s base salary, plus (ii) Mr. Scribante’s fiscal 2018 annual target bonus of one-hundred percent of his annual base salary (pro-rated based on the number of days that Mr. Scribante was our chief executive officer in fiscal 2018)), less applicable taxes and other withholdings. We also paid Mr. Scribante his accrued salary through May 31, 2017 and vacation pro-rated fiscal 2018 vacation (totaling $61,487.12) through the date of his departure (the “termination date”) and agreed to pay the employer’s portion of the premiums for Mr. Scribante’s COBRA continuation coverage for 18 months after the termination date.

In addition, under the Severance Agreement, Mr. Scribante retained all vested restricted stock and stock option awards that vested as of the date of the Severance Agreement, and will be permitted to exercise any vested stock options within 90 days of the termination date. We also agreed to assign all the policies of insurance on Mr. Scribante’s life currently in effect to Mr. Scribante and obtain a six-year tail director and officer insurance policy covering Mr. Scribante.

In consideration of the foregoing severance payments, Mr. Scribante agreed to retire as a director and provide a mutual general release of claims, as well as agreeing to a covenant not to sue. Mr. Scribante has also reaffirmed the application of certain covenants contained in his Executive Employment and Severance Agree-

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ment, including two year non-solicitation and non-competition covenants and a two-year nondisclosure and confidentiality covenant.

Altschaefl Employment Agreement. Following Mr. Scribante’s departure as our chief executive officer, we entered into an Executive Employment and Severance Agreement with Mr. Altschaefl as our new chief executive officer.

Mr. Altschaefl’s Executive Employment and Severance Agreement entitles Mr. Altschaefl to certain pre-change of control severance payments and other benefits upon a qualifying employment termination. If Mr. Altschaefl’s employment is terminated without cause or for good reason prior to the end of his employment period and prior to us experiencing a change of control, Mr. Altschaefl will be entitled to (i) a severance benefit payable in a lump sum equal to two times the sum of his base salary plus the average of his prior three years’ bonuses; (ii) a pro rata bonus for the year of termination based on Mr. Altschaefl’s annual target cash bonus opportunity (if any) for such year multiplied by a fraction representing the portion of the annual performance period that has elapsed at the time of termination; and (iii) pay COBRA premiums at the active employee rate for the duration of Mr. Altschaefl’s COBRA continuation coverage period. To receive these benefits, Mr. Altschaefl must execute and deliver to us (and not revoke) a general release of claims acceptable to us.

In addition, Mr. Altschaefl’s Executive Employment and Severance Agreement contains protections that would provide Mr. Altschaefl with certain payments in the event that (i) a change of control of our company occurs prior to the end of Mr. Altschaefl’s employment period or (ii) prior to the occurrence of a change of control of our company, but following our entry into a legally binding written agreement, arrangement or understanding that would result in a change of control, Mr. Altschaefl’s employment is terminated by us without cause or Mr. Altschaefl terminates his employment with us for good reason. We describe this type of change of control arrangement as being subject to a “single trigger.” The compensation committee determined that it was in the best interest of our company to provide Mr. Altschaefl with a single trigger change of control provision in his employment agreement in consideration of Mr. Altschaefl’s goals and objectives and his personal and professional sacrifices undertaken to assume the role of our chief executive officer and Mr. Altschaefl’s willingness to receive significantly less in total annual compensation than our prior chief executive officer and the chief executive officers of our “peer companies” (as identified by ISS).

Potts Retirement Agreement. Following the restructuring of our management team, Mr. Potts subsequently agreed to retire as our chief risk officer and executive vice president, effective as of August 30, 2017. In connection with Mr. Potts’ retirement, we and Mr. Potts entered into a Mutual Retirement and Severance Agreement and Complete and Permanent Release of All Claims (the “Retirement Agreement”) on June 30, 2017.

Pursuant to the Retirement Agreement, we have affirmed our obligation to provide certain severance payments and benefits required to be provided to Mr. Potts as a result of his mutual termination without “cause” pursuant to the terms of his Executive Employment and Severance Agreement with us, including a severance payment of $292,410.96 payable in variable monthly installments over a period of 10 months (calculated in accordance with Mr. Potts’ Executive Employment and Severance Agreement as (i) Mr. Potts’ base salary, plus (ii) Mr. Potts’ initial fiscal 2018 annual target bonus of fifty percent of his annual base salary (pro-rated based on the number of days that Mr. Potts was our chief risk officer and executive vice president in fiscal 2018)), less applicable taxes and other withholdings. In addition, we have agreed to pay Mr. Potts his accrued salary and other compensation through August 30, 2017 and pro-rated fiscal 2018 vacation through the date of his retirement. We have also affirmed our obligation under Mr. Potts’ Executive Employment and Severance Agreement to continue to provide Mr. Potts with his current family health insurance plan coverage, or equivalent, and we will pay both the employer and employee portion of such coverage until Mr. Potts is eligible for Medicare coverage.

In addition, under the Retirement Agreement, all of Mr. Potts’ unvested restricted stock (and any related restricted cash) awards shall continue to vest in accordance with such award’s applicable vesting schedule pursuant to the terms of the applicable award agreements during the period that Mr. Potts remains a member of our board. In addition, on the date that Mr. Potts ceases to be a member of our board, Mr. Potts will retain all vested restricted stock and stock option awards that have vested as of such date, and will be permitted to exercise any

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vested stock options during the period provided in the applicable option award agreement. We also agreed to assign all the policies of insurance on Mr. Potts’ life currently in effect to Mr. Potts and obtain a six-year tail director and officer insurance policy covering Mr. Potts after he ceases to be a member of our board.

The Retirement Agreement also contains certain provisions concerning Mr. Potts’ continued service as a director. During Mr. Potts continued service as director, Mr. Potts will not be entitled to receive any compensation (whether cash or equity-based) as a non-employee director until January 1, 2019, other than the reimbursement of ordinary out of pocket expenses. From and after January 1, 2019 and for the remainder of Mr. Potts’ term (which, assuming Mr. Potts’ re-election at the annual meeting, would expire at the 2019 annual meeting of shareholders), Mr. Potts will be entitled to receive customary non-employee director cash compensation (but not any equity-based compensation), as well as the reimbursement of ordinary out of pocket expenses.

We have also agreed to retain Mr. Potts as a consultant for a term expiring on June 15, 2018. During this term, Mr. Potts will be paid a $150 per hour fee for consulting services performed as and when requested by us, together with the reimbursement of all ordinary out of pocket expenses. In addition, Mr. Potts will continue to remain eligible to receive his $75,000 project-based bonus previously approved by the compensation committee.

In consideration of the foregoing agreements, Mr. Potts agreed to a mutual general release of claims, as well as agreeing to a covenant not to sue. Mr. Potts has also reaffirmed the application of certain covenants contained in his Executive Employment and Severance Agreement, including two-year non-solicitation and non-competition covenants and two-year nondisclosure and confidentiality covenant.

Other Policies

Policies On Timing of Equity Awards.Our compensation committee and board of directors have adopted a general policy on the timing of equity awards under which our compensation committee generally will make annual equity awards beginning effective as of the date three business days after our next quarterly (or fiscalyear-end) earnings release following the decision to make the grant, regardless of the timing of the decision. Our compensation committee has elected to grant equity awards shortly following our earnings releases so that the restricted stock awards are granted (and valued) at a point in time when the most important information about our companyCompany then known to management and our board is likely to have been disseminated in the market.

Our board of directors has also delegated limited authority to our chief executive officer, acting as a subcommittee of our compensation committee, to grant certain equity-based awards under our 2016 Omnibus Incentive Plan. Our chief executive officer may grant awards covering up to 250,000a total of 50,000 shares of our Common Stock per fiscal year to certainnon-executive officers in connection with offers of employment, promotions and certain other circumstances. Shares subject to awards granted under this delegated authority which are subsequently cancelled or forfeited may be added back to the delegated share authority grant amount. Under this delegation of authority, any restricted stock awards granted by our chief executive officer must have an effective grant date on the first business day of the month following the event giving rise to the award.

Our equity incentive plans do not permit awards of stock options or stock appreciation rights with an effective grant date prior to the date our compensation committee or our chief executive officer takes action to approve the award.

Executive Officer Stock Ownership Guidelines.One of the key objectives of our executive compensation program is alignment of the interests of our executive officers with the interests of our shareholders. We believe that ensuring that our executive officers are also significant shareholders and have a significant financial interest in our companyCompany is an effective means to accomplish this objective.

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The number of shares required to be held by our executive officers is as follows:

executive officer and other NEOs, excluding the chief financial officer. However, compensation that is considered “performance-based” compensation under Section 162(m) is not subject to the $1.0 million limit on deductibility. We obtained shareholder approval of the material terms of the performance goals under our 2016 Omnibus Incentive Plan at our 2016 annual shareholders meeting to enable us to qualify awards granted under such plan as performance-based compensation toofficers. To the extent the other applicable requirementsvalue of Section 162(m) are satisfied. Ourany individual’s compensation exceeds $1.0 million in value, our compensation committee intendsbelieves that such level of compensation is appropriate to consider the deductibilityfurther our Company’s objectives of performance-based compensation under Section 162(m) in setting compensation formotivating, attracting and retaining our NEOs, but it may approvedespite a portion of such compensation that will not meet the requirements of Section 162(m) in order to ensure competitive compensation levels and structures for our executive officers. For example, as disclosed in this Compensation Discussion and Analysis, we have granted restricted stock to our NEOs that vests based solely on continued service. Such restricted stock will not qualify as performance-based compensation under Section 162(m) and, therefore, will not be exempt from the $1.0 million limit on deductibility under Section 162(m). Despite not being eligible for deductibility under Section 162(m) to the extent the value of any individual’s restricted stock exceeds $1.0 million in value, our compensation committee believed that such awards were appropriate to provide motivational and retention incentives to our NEOs that are tied directly to the value of the Common Stock. In addition, notwithstanding our intentions, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, no assurance can be given that compensation intended to satisfy the requirements for deductibility under Section 162(m) will so qualify..

We also maintain certain deferred compensation arrangements for our employees andnon-employee directors that are potentially subject to Code Section 409A. If such an arrangement is neither exempt from the application of Code Section 409A nor complies with the provisions of Code Section 409A, then the employee ornon-employee director participant in such arrangement is considered to have taxable income when the deferred compensation vests, even if not paid at such time, and such income is subject to an additional 20% income tax. In such event, we are obligated to report such taxable income to the IRS and, for employees, withhold regular income taxes (but no withholding is required on the 20% additional income tax). If we fail to do so, we could be liable for the withholding taxes and interest and penalties thereon. Stock options with an exercise price lower than the fair market value ofAs a result, our Common Stock on the date of grant are not exempt from coverage under Code Section 409A. We believe that all of our stock option grants are exempt from coverage under Code Section 409A. Our deferred compensation arrangements are intended to either qualify for an exemption from, or to comply with, Code Section 409A.

Anti-Hedging Policy.We maintain a policy prohibiting our employees, officers and directors from engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the value of our securities, including through financial instruments such as prepaid variable forwards, equity swaps collars and exchange funds. Our employees, officers and directors are also prohibited from trading on an exchange in puts, calls and other derivative securities related to our common stock.

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Compensation Committee Interlocks and Insider Participation

During the last fiscal year,2020, no member of theour compensation committee had a relationship with us that required disclosure under Item 404 of RegulationS-K. During the past fiscal year,2020, none of our executive officers served as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any entity that has one or more executive officers who served as members of our board of directors or our compensation committee. None of the members of our compensation committee is an officer or employee of our company,Company, nor have they ever been an officer or employee of our company.Company.

Compensation Committee Report

Our compensation committee has reviewed and discussed the “Compensation Discussion and Analysis” contained in this proxy statement with management. Based on our compensation committee’s review and discussions with management, our compensation committee recommended to our board of directors that the Compensation Discussion and Analysis be included in this proxy statement.

Kenneth L. Goodson, Jr., Chair

Elizabeth Gamsky Rich

Mark A. Williamson, Chair

Anthony L. Otten

Kenneth M. Young

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Summary Compensation Table for Fiscal 20172020

The following table sets forth for our NEOs the following information for each of the past three fiscal years or for such shorter period as the NEO has been a NEO: (i) the dollar amount of base salary earned; (ii) the dollar value of bonuses andnon-equity incentive plan compensation earned; (iii) the grant date fair value, determined under Accounting Standards Codification Topic 718 (“ASC Topic 718”), for all equity-based awards held by our NEOs; (iv) all other compensation and (v) the dollar value of total compensation.