UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.DC 20549

SCHEDULE 14A

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Insteel Industries Inc.

INSTEEL INDUSTRIES INC.

(Name of Registrant as Specified Inin Its Charter)

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Dear

Shareholder

FEBRUARY 15, 202213, 2024

9:00 a.m., Eastern Timetime

 

Cross Creek Country Club

1129 Greenhill Road

Mount Airy, North Carolina 27030

HOW TO VOTE: Even if you plan to attend the Annual Meeting, we encourage you to provide your proxy as soon as possible using one of the following methods.
		BY TELEPHONE In the U.S. or Canada, you can authorize a proxy to vote your shares toll-free by calling 1-800-690-6903.
		BY INTERNET You can authorize a proxy to vote your shares online at www.proxyvote.com.
		BY MAIL You can authorize a proxy to vote by mail by marking, dating, and signing your proxy card or voting instruction form and returning it in the enclosed envelope.

of Contents

Proxy Summary

This summary highlights certain information that is described in more detail elsewhere in this proxy statement. This summary does not contain all the information you should consider before voting on the issues at our annual meeting,the 2024 Annual Meeting of Shareholders (the “Annual Meeting”), so we ask that you read the entire proxy statement carefully. Page references are provided to help you quickly find further information.

20222024 Annual Meeting of Shareholders

Eligibility to Vote

You can vote at our annual meetingthe Annual Meeting if you were a shareholder of record of our common stock at the close of business on December 15, 2021.13, 2023.

Governance Highlights

We are committed to high standards of corporate governance, and our Board of Directors (the “Board”) is committed to acting in the long-term best interests of our shareholders. Our Nominating and Governance Committee continually reviews our policies and practices in light of recent trends in corporate governance, but with its primary focus on the long-term interest of shareholders. Below is a summary of our corporate governance highlights with respect to our Board of Directors.highlights.

VOTING MATTERS

Election of Directors

We typically elect approximately one-third of our directors each year to serve three-year terms. Our Board of Directors currently consists of seven directors. We are seeking shareholder approval forthe election of two director nominees: Jon M. RuthH.O. Woltz III and Joseph A. Rutkowski,G. Kennedy (“Ken”) Thompson, each of whom have been nominated for three-year terms.

Advisory Vote on the Compensation of our Named Executive Officers

Our executive compensation program emphasizes performance-based compensation, so the amount of compensation paid to our executive officers varies significantly based on our financial performance. We seekare primarily to buildfocused on building long-term shareholder value,value. A significant portion of our executives’ total compensation is composed of equity-based long-term incentive compensation, and therefore we base the payment of annual cash bonuses on our return on capital, a metric that has been shown to be closely associated with long-term growth in shareholder value. CompensationOur compensation practices include:

✔	StockRobust share ownership guidelines;
✔	Double triggers in our change in control severance agreements;
✔	Clawback policy;A mandatory clawback policy for incentive-based compensation awarded to executive officers;
✔	Significant vesting periods for equity awards;
✔	No significant perquisites;
✔	No employment agreements for our executive officers;
✔	Prohibition of hedging of our shares;
✔	Long-term incentives that are entirely equity-based; and
✔	Prohibition of stock option repricing.repricing; and
✔	Engagement of an independent compensation consultant.

Ratify the Appointment of Grant Thornton LLP as our Independent Public Accounting Firm for Fiscal 20222024

Proxy Statement

This proxy statement is furnished in connection with the solicitation of proxies by our Board of Directors (the “Board”) for use at the Annual Meeting of Shareholders (the “Annual Meeting”) to be held on February 15, 202213, 2024, at 9:00 a.m., Eastern Time,time, and at any adjournments or postponements of the Annual Meeting. The meeting will take place at the Cross Creek Country Club, 1129  Greenhill Road, Mount Airy, North Carolina. This proxy statement, accompanying proxy card and the 20212023 Annual Report, which includes a copy of our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), are first being mailed or made available to our shareholders on or about January 4, 2022.3, 2024.

This proxy statement summarizes certain information you should consider before you vote at the Annual Meeting. However,Whether or not you do not needplan to attend the Annual Meetingmeeting, we urge you to authorize a proxy to vote your shares. If you do not expect to attendshares via the toll-free telephone number or prefer to vote by proxy,over the Internet, as described in the enclosed materials. Alternatively, you may followsign, date and return your proxy card by mail in the voting instructions on the enclosed proxy card. envelope provided.

In this proxy statement, Insteel Industries Inc. is generally referred to as “we,” “our,” “us,” “Insteel Industries,” “Insteel” or “the Company.”

The enclosed proxy card indicates the number of shares of Insteel common stock that you own as of the record date of December 15, 2021.13, 2023. In this proxy statement, outstanding Insteel common stock (no par value) is sometimes referred to as the “Shares.”

References to Website

Website addresses and hyperlinks are included for reference only. The information contained on or available through websites referred to and/or linked to in this proxy statement (other than the Company’s website to the extent specifically referred to herein as required by SEC rules) is not part of this proxy solicitation and is not incorporated by reference into this proxy statement or any other proxy materials.

Corporate Governance Guidelines and Board Matters

The Board of Directors

Our bylaws provide that our Board of Directors will have not less than five nor more than 10ten directors, with the preciseexact number to be established by resolution of the Board from time to time. We currently have seven directors. Our Nominating and Governance Committee annually considers and makes recommendations to the Board regarding whether the size of the Board is optimal, given its work-load,workload, the Committees on which directors serve and the Company’s size and complexity. We believe that the current size of the Board is appropriate for our Company.

The Board is elected by and responsible to the shareholders of Directorsthe Company. The Board oversees our business affairs and monitors the performance of management. In accordance with basic principles of corporate governance, the Board does not involve itself in day-to-day operations. The directors keep themselves informed through discussions with the Chairman, our lead independent director,Lead Director, key executive officers and our principal external advisers (legal counsel, auditors, investment bankers and other consultants), by reading reports and other materials that are sent to them and by participating in Board and committee meetings. In carrying out its responsibilities, the Board reviews and assesses Insteel’s long-term strategy and its strategic, competitive and financial performance.

At its meeting on August 25, 2009, theIn fiscal 2023, our Board of Directors adoptedmet four times and also held regularly scheduled executive sessions without management, presided over by our independent Lead Director. In addition, during fiscal 2023 our Audit Committee met four times, our Executive Compensation Committee met three times and our Nominating and Governance Committee met four times. Directors are expected to make every effort to attend the Annual Meeting, all Board meetings and the meetings of the Committees on which they serve. All of our directors attended our 2023 Annual Meeting of Shareholders. In fiscal 2023, each director also attended over 75% of the meetings of the Board and of the committees of which he or she was a member.

Director Independence

Our Board Governance Guidelines which were amended most recently on May 18, 2021. The Board Governance Guidelines are available on our website at https://investor.insteel.com/corporate-governance/governance-documents.

The Board of Directors, at its meeting on November 16, 2021, determinedprovide that the following members of theCompany’s Board which constitutewill have a majority thereof, each satisfyof directors who meet the definition of “independent director,” as that term is defined undercriteria for independence required by the New York Stock Exchange (“NYSE”) listing standards:and any other applicable regulatory requirement. The Board has determined that six of the seven current members of our Board of Directors, Abney S. Boxley III, Anne H. Lloyd, W. Allen Rogers II, Jon M. Ruth, Joseph A. Rutkowski and G. Kennedy Thompson.Thompson, are independent under NYSE listing standards. Our Chairman and Chief Executive Officer, H.O. Woltz III, is currently our only non-independent director. In addition to considering the objectivedetermining director independence, criteria established by NYSE, the Board also made a subjective determination as to each of these directors that noDirectors did not discuss, and was not aware of, any related person transactions, relationships or arrangements exist that in the opinionexisted with respect to any of these directors.

Our Audit Committee charter requires that each of the Board, would interfere with the exercisemembers of the director’sAudit Committee be an independent judgment in carrying out his responsibilities as onedirector under NYSE listing standards and meet the enhanced standards of our directors. In making these determinations, the Board reviewed information provided by the directors and us with regardindependence applicable to each director’s business and personal activities as they may relate to us and our management.

Directors are expected to attend all meetings of the Board of Directors and all meetings of Board committees on which they serve. The independent directors meet in executive session with noaudit committee members of management present before or after each regularly scheduled meeting (see “Executive Sessions” below). The Board of Directors met four times in fiscal 2021. Each director attended at least 75% of the meetings of the Board and committees on which he or she served during fiscal 2021.

Director Attendance at Annual Meetings

under applicable SEC rules. The Board has determined that it is ineach of the current members of our best interest forAudit Committee and those serving during our 2023 fiscal year meets such standards. The Board has also determined that all of the members of the BoardAudit Committee are financially literate and that each of Directors to attendMs. Lloyd, Mr. Rogers and Mr. Thompson qualifies as an “audit committee financial expert” under applicable SEC rules.

Our Executive Compensation Committee charter requires that all of the Annual Meeting of Shareholders. All members of our Boardthe Executive Compensation Committee be independent under NYSE listing standards, including the enhanced independence requirements applicable to compensation committee members and “non-employee directors” within the meaning of Directors attended our 2021 annual meeting.

Committees of the Board

The Audit Committee

The Board has an Audit Committee, which assists the Board in fulfilling its responsibilities to shareholders concerning our accounting, financial reporting and internal controls, and facilitates open communication between the Board, outside auditors and management. The Audit Committee discusses the financial information prepared by management, our internal controls and our audit process with management and with outside auditors. The Audit Committee is charged with the responsibility of selecting our independent registered public accounting firm. The independent registered public accounting firm meets with the Audit Committee (both with and without the presence of management) to review and discuss various matters pertaining to the audit process, including our financial statements, the scope and terms of its work, the results of its

year-end audit and quarterly reviews, and its recommendations concerning the financial practices, controls, procedures and policies we employ. The Board has adopted a written charter for the Audit Committee as well as a Pre-Approval Policy regarding all audits, audit-related, tax and other non-audit related services to be performed by the independent registered public accounting firm.

The Audit Committee is a separately-designated standing Audit Committee established in accordance with section 3(a) (58)(A) ofRule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that consists of directors Lloyd, Rogers and Thompson. Mr. Thompson served as chair of the Audit Committee during fiscal 2021.. The Board at its meeting in November 2021,has determined that each of the current members of the Audit Committee meets the definition of “independent director” and certain audit committee-specific independence requirements under NYSE rules and SEC requirements. At the same meeting, the Board also determined that each of Mr. Rogers, Mr. Thompson and Ms. Lloyd qualify as an “Audit Committee Financial Expert” as defined under SEC rules. The Board of Directors has also determined that each of the Audit Committee members is financially literate as such qualification is interpreted in the Board’s judgment. The functions of the Audit Committee are further described herein under “Report of the Audit Committee.”

The Audit Committee met six times during fiscal 2021, and members of the Audit Committee consulted with management of the Company, the internal auditor and the independent registered public accounting firm at various times throughout the year. The charter for the Audit Committee, as most recently revised on February 16, 2021, is available on our website at https://investor.insteel.com/corporate-governance/ governance-documents.

The Executive Compensation Committee

The Executive Compensation Committee and those serving during our 2023 fiscal year is responsible for (i) determining appropriate compensation levels for our executive officers, including any employment, severance or change in control arrangements; (ii) evaluating officeran independent director under NYSE listing standards and a non-employee director compensation plans, policies and programs; (iii) reviewing benefit plans for officers and employees; and (iv) producing an annual report on executive compensation for inclusion inwithin the proxy statement.meaning of Rule 16b-3 under the Exchange Act.

The Executive Compensation Committee Report is included in this proxy statement. The Executive Compensation Committee also reviews, approves and administers our incentive compensation plans and equity-based compensation plans and has sole authority for making awards under such plans, including their timing, valuation and amount. In addition, the Executive Compensation Committee reviews and recommends the structure and level of outside director compensation to the full Board. The Executive Compensation Committee has the discretion to delegate any of its authority to a subcommittee, but did not do so during fiscal 2021. The Executive Compensation Committee is chaired by Mr. Ruth and includes directors Boxley, Lloyd, Rutkowski and Thompson. The Executive Compensation Committee met three times during fiscal 2021. At its meeting in November 2021, the Board of Directors determined that each of the members of the Executive Compensation Committee meets the definition of “independent director” and certain compensation committee-specific independence requirements under NYSE rules and SEC requirements. The charter of the Executive Compensation Committee, as most recently revised on February 16, 2021, is available on our website at https://investor.insteel.com/corporate-governance/governance-documents.

The Executive Compensation Committee consults with members of our executive management team on a regular basis regarding our executive compensation program. Our executive compensation program, including the role members of our executive management team and outside compensation consultants play in assisting with establishing compensation, is discussed in more detail below under “Executive Compensation - Compensation Discussion and Analysis.” Our Executive Compensation Committee has retained Pearl Meyer & Partners, LLC to serve as its outside consultant during fiscal 2021.

The Nominating and Governance Committee

The Nominating and Governance Committee is responsible for establishing Board membership criteria, identifying individuals qualified to become Board members consistent with such criteria and recommending nominations of individuals for director when openings exist, recommending the appointment of Board committee members and chairs, and reviewing corporate governance issues. Specifically, this Committee periodically reviews our classified board structure, our director election qualifications and procedures, and makes recommendations as appropriate to our Board.

The Committee also reviews and recommends changes as necessary to the Board Governance Guidelines and our Code of Business Conduct and facilitates an annual Board self-assessment process.

The Nominating and Governance Committee, which consists of Messrs. Rogers, Boxley, Ruth and Rutkowski, met four times during fiscal 2021. The Nominating and Governance Committee was chaired by Mr. Rutkowski during fiscal 2021. The Board of Directors, at its meeting in November 2021, determinedCommittee’s charter requires that eachall of the members of the Nominating and Governance Committee meets the definition of “independent director” as that term is definedbe independent under NYSE rules.listing standards. The charterBoard has determined that each of the current members of our Nominating and Governance Committee as most recently revised on February 16, 2021, is available on our website at https://investor.insteel.com/corporate-governance/governance-documents.an independent director under NYSE listing standards.

Executive Sessions

Pursuant to the listing standards of NYSE, the independent directors are required to meet regularly in executive sessions. Generally, those sessions are chaired by the lead independent director. During fiscal 2021, the lead independent director was W. Allen Rogers II. During the Board’s executive sessions, the lead independent director has the power to lead the meeting, set the agenda and determine the information to be provided. During fiscal 2021, the Board held four executive sessions.

The lead independent director can be contacted by writing to Lead Independent Director, Insteel Industries Inc., c/o Secretary, 1373 Boggs Drive, Mount Airy, North Carolina 27030. We screen mail addressed to the lead independent director for security purposes and to ensure that it relates to discrete business matters that are relevant to the Company. Mail that satisfies these screening criteria will be forwarded to the lead independent director.

Board Governance Guidelines

In conjunction with the Board’s establishment of the Nominating and Governance Committee in 2009, the Board adopted Board Governance Guidelines to set forth the framework pursuant to which the Board governs the Company. Among other things, the Board Governance Guidelines describe the expectations regarding attendance at the Annual Meeting and at Board meetings, require regular meetings of independent directors in executive session, describe the functions of the Board’s standing committees, including an annual self-assessment process facilitated by the Nominating and Governance Committee, and set forth the procedure pursuant to which shareholders may communicate with directors. Our Board Governance Guidelines provide that a director who fails to receive a majority of the shares voted in an uncontested election shall tender his or her resignation to the board, within 10 days of the certification of election results. The Nominating and Governance Committee will consider the tendered resignation and recommend to the Board the action to be taken with respect to the resignation. The Board will act on the tendered resignation, taking into account such recommendation, and publicly disclose its decision regarding the tendered resignation within 90 days from the date of the certification of the election results.

Board Leadership Structure

Our CEO also servesBoard leadership structure consists of:

Our Board Governance Guidelines provide that the position of Chairman of the Board may be combined with the position of Chief Executive Officer at the discretion of the Board, in which case the Board will designate an independent Lead Director. The Board believes it is in the best interests of our Company to make this determination from time to time based on the position and direction of our Company and the constitution of the Board and management team rather than based on any self-imposed requirement.

Mr. Woltz has served as our Chief Executive Officer since 1991 and as Chairman of ourthe Board since 2009. In connection with that decision, the Board created the position of Directors, and we have a lead independent director.Lead Director. Mr. Rogers has served as Lead Director since 2009. The Board believes that Mr. Woltz’s service as both Chairman of the Board and Chief Executive Officer puts him in the best position to execute our business strategy and business plans to maximize shareholder value. Because Mr. Woltz has determinedprimary management responsibility with respect to the day-to-day business operations of the Company, he is best able to ensure that thisregular meetings of the Board are focused on the most important issues facing us at any given time. Our Board leadership structure also demonstrates to all our stakeholders (shareholders, employees, customers and communities around the country) that we are under strong leadership, with Mr. Woltz setting the tone and having primary management responsibility.

The Lead Director and other independent directors actively oversee Mr. Woltz’s management of our operations and strategy execution. They take an active role in overseeing Insteel’s management and key issues related to strategy, risk, integrity, compensation and governance. For example, only independent directors serve on the Audit Committee, Executive Compensation Committee and Nominating and Governance Committee. Non-management and independent directors regularly hold executive sessions outside the presence of the Chief Executive Officer and other Insteel employees. Finally, as detailed below, the Lead Director has many important duties and responsibilities that enhance the independent oversight of management.

The Lead Director chairs all meetings of the independent directors in executive session and also has other authority and responsibilities, including:

We believe our Board’s leadership structure is appropriate because it believes that at this time it is optimalbest suited to have one person speak for and leadthe needs of the Company and the Board, and that the CEO should be that person. We believe thatstrength of our lead independent directorLead Director position, the number and strength of our independent directors and our overall governance practices minimize any potential conflicts that otherwise could result fromrisks of combining the positionsroles of Chairman of the Board and CEO.Chief Executive Officer.

The lead independent director presides at meetings of our independent directors, which are held prior to or following all of our regularly scheduled Board meetings. As noted above, the lead independent director may call for other meetings

Committees of the independent directors or of the full Board if he deems it necessary. The lead independent director also consults with the Chairman regarding meeting agendas, and serves as the principal liaison between the independent directors and the Chairman.

Risk Oversight

Our Board of Directors has overall responsibilitythree standing committees: the Audit Committee, the Executive Compensation Committee and the Nominating and Governance Committee. The following is a list of committee memberships, which is accompanied by a description of each committee. The directors who are nominated for risk oversight. election as directors at the Annual Meeting will, if re-elected, retain the committee memberships described in the following list immediately following the Annual Meeting, and the chairs of the Audit Committee and the Executive Compensation Committee will also remain the same. Immediately following the Annual Meeting, Mr. Boxley will become chair of the Nominating and Governance Committee.

The Audit Committee

The Audit Committee is responsible for assisting the Board of Directors in fulfilling its oversight of:

As part of these responsibilities, the Audit Committee:

Under SEC rules and the Audit Committee’s charter, the Audit Committee must prepare a report that is to be included in our Proxy Statement relating to the Annual Meeting of Stockholders or our Annual Report on Form 10-K. This report is provided under “Report of the Audit Committee” on page 44. In addition, the Audit Committee reviews and discusses our annual audited financial statements and quarterly financial statements with management and the independent auditor and recommends, based on its review, that the Board of Directors include the annual financial statements in our Annual Report on Form 10-K.

The Executive Compensation Committee

The Executive Compensation Committee is responsible for:

The Executive Compensation Committee is also responsible for preparing a report on executive compensation that is to be included in our proxy statement relating to our Annual Meeting. This report is provided under “Executive Compensation Committee Report” on page 29.

The Nominating and Governance Committee

The Nominating and Governance Committee is responsible for:

The Nominating and Governance Committee also reviews and provides guidance with respect to the Company’s strategy, programs and initiatives related to environmental, social and governance (“ESG”) matters.

Risk Oversight

The Board as a whole exercises itsis ultimately responsible for the oversight responsibilities with respect toof our risk management function, including strategic, operational and competitive risks, as well as risks related to crisis management and executive succession issues. The Board has delegated oversight of certain other types of risks to its committees. The Audit Committee oversees our policies and processes related to our financial statements and financial reporting, risks relating to our capital, credit and liquidity status and risks related to related person transactions. The Executive Compensation Committee oversees risks related to our compensation programs and structure, including our ability to motivate and retain talented executives and other employees. The Nominating and Governance Committee oversees risks related to our governance structure and succession planning for Board membership. Beginning in fiscal 2010, we instituted a formal process in which the major business risks facing the company are identifiedManagement of Insteel undertakes, and assessed, and appropriate strategies are identified to respond to such risks. This risk assessment process is conducted and reviewed with the Board reviews and discusses, an annual assessment of our risks on an ongoingenterprise-wide basis.

The Board believes We conduct a rigorous enterprise risk management program that its ability to oversee risk is enhanced by having one person serve as the Chairman of the Boardupdated regularly and CEO. With his in-depth knowledge and understanding of the Company’s operations, Mr. Woltz as Chairman and CEO is better abledesigned to bring key strategic and business issues and risks to the Board’s attention than would a non-executive Chairman of the Board.

Code of Business Conduct

Consistent with the Board’s commitment to sound corporate governance, the Board adopted a Code of Business Conduct (the “Code of Conduct”) in 2003, which applies to all of our employees, officers and directors. The Code of Conduct was amended on February 16, 2021. The Code of Conduct incorporates an effective reporting and enforcement mechanism. The Board has adopted this Code of Conduct as its own standard. We adopted the Code of Conduct to help employees, officers and directors understand our standard of ethical business practices and to promote awareness of ethical issues that may be encountered in carrying out their responsibilities. We include the Code of Conduct in an employment manual, which is supplied to all of our employees and officers and in a Board of Directors Manualmost material risks for directors, each of whom are expected to read and acknowledge in writing that they understand the policies set forth in the Code.

Stock Ownership Guidelines

We have stock ownership guidelines that apply to our directors and executive officers. Under the guidelines, the CEO is expected to own Company stock valued at three times his annual salary, while our other executive officers are expected to own stock valued at one-and-one-half times their annual salary. A newly-appointed executive officer would have five years to comply from the date upon which he or she becomes covered under the guidelines. Directors are required to own three times their annual cash retainers, and have three years from the date they joined the Board in which to comply. All directors and executive officers who have the respective minimum service times in their positions are in compliance with our guidelines.

Policy Regarding Hedging or Pledging of Insteel Stock

We also have a policy prohibiting Insteel directors and officers who are subject to Section 16 reporting requirements (“Section 16 Officers”) from entering intoevaluation, including strategic, operational, financial, transactions designed to hedge or offset any decrease in the market value of our stock. In addition, the policy requires that directors and Section 16 Officers pre-disclose to the Board any intention to enter into a transaction involving the pledge or other use of our stock as collateral to secure personal loans. As of the record date, December 15, 2021, no current directors or Section 16 Officers have pledged any shares of Insteel Common Stock.

Availability of Bylaws, Board Governance Guidelines, Code of Conduct and Committee Charters

Our Bylaws, Board Governance Guidelines, Code of Business Conduct, Audit Committee Charter, Audit Committee Pre-Approval Policy, Executive Compensation Committee Charter and Nominating and Governance Committee Charter are available on our website at https://investor.insteel.com/corporate-governance/governance-documents, and in print to any shareholder upon written request to our Secretary.

Corporate Responsibility

We are committed to operating our business responsibly and creating long-term value for our shareholders. We fulfill our commitment to creating long-term value by striving to operate our business in a sustainable way, since long-term success requires that we maintain a healthy and satisfied workforce, protect the environment of the communities in which we operate and conserve natural resources.

Our Board and Board committees review with management our programs related to maintenance of safe operations of our workforce, management succession, compensation and benefits, compliance withsustainability, cybersecurity, legal and regulatory requirements, compliance with our Code of Conduct and other topics relevant to the responsible and sustainable operation of the Company. Safe operations with zero harm to employees, the environment and Company assets is a key goal and is the first item covered at our meetings of senior management and the first item covered inrisks.

each business operations report that management provides at board meetings. While we are proud that we maintain an OSHA recordable injury average significantly lower than the average for our industry, we continually strive to attain our goal of zero harm.

We have continued to operate our factories and our business during the global COVID-19 pandemic. While we instituted numerous safety protocols and made substantial changes in many aspects of our business, we had no significant furloughs or reductions in force due to the pandemic, and in fact increased our total employment from 881 at the beginning of fiscal 2021 to 913 at the end of fiscal 2021. On July 13, 2021, we announced that, in recognition of the work of our employees during the pandemic, a special award of $1,000 would be paid to substantially all of our employees on December 3, 2021.

For additional information on our approach to environmental and human capital issues, please see our website at www.insteel.com and our Annual Report on Form 10-K for fiscal 2021.

Shareholder Recommendations and Nominations

The Nominating and Governance Committee Charter provides that the Committee will review the qualifications of any director candidates that have been properly recommended to the Committee by shareholders. Shareholders should submit any such recommendations in writing c/o Insteel Industries Inc., 1373 Boggs Drive, Mount Airy, North Carolina 27030, Attention: Secretary. In addition, in accordance with our bylaws, any shareholder entitled to vote for the election of directors at the applicable meeting of shareholders may nominate persons for election to the Board if such shareholder complies with the notice procedures set forth in the bylaws and summarized in “Shareholder Proposals for the 2023 Annual Meeting” below.

Process for Identifying and Evaluating Director Candidates

Pursuant to its charter and our Board Governance Guidelines, theThe Nominating and Governance Committee is responsible for developing and recommending to the Board criteria for identifying and evaluating candidates to serve as directors.directors, as well as for screening potential director candidates and recommending qualified candidates to the full Board for nomination. The Nominating and Governance Committee believes that Insteel benefits by fostering a mix of experienced directors with a deep understanding of our industry, including its highly cyclical nature, and who will represent the long-term interests of our shareholders. The criteria considered by the committee inIn evaluating potential director candidates, for director include:the Nominating and Governance Committee considers the following qualifications:

TheWe do not have a standalone policy regarding diversity in the nomination process; however, the Board seeks to ensure that its membership consists of directors who have diverse backgrounds, experience and view-pointsviewpoints that are relevant in the context of our highly cyclical and competitive business but does notbusiness. Historically, Insteel’s Board has included diverse directors whose backgrounds and experience have a written diversity policy.fit these criteria. For example, Frances Johnson, the president of Johnson Concrete Company and the Managing Partner of Carolina Stalite, served with distinction on the Company’s Board from 1982 until 2006. Gary Pechota, the prior chairman and CEO of Giant Cement Holdings and an enrolled member of the Rosebud Sioux Tribe, also served with distinction on the Company’s Board from 1998 until his untimely death in 2016. In 2019, Anne Lloyd, the former Chief Financial Officer of Martin Marietta Materials, was added to the Board. Each of Ms. Johnson, Mr. Pechota and Ms. Lloyd were vetted and found to be qualified for service on the Company’s Board based on their track records of successfully managing industrial enterprises that operated in highly cyclical construction related markets and their proven records of delivering consistent shareholder value. The Board continues to believe that broad management experience in cyclical industries is an important antecedent for Board service at Insteel and is in the best interest of its shareholders.

The Nominating and Governance Committee annually considers and makes recommendations to the Board sharesregarding the concernoptimal size of many institutional shareholders concerningthe Board, diversity as that term relates to race, ethnicity, gender and other factors. While one director is considered diverse today,given its workload, the Company has a long history of board diversity that predates the recent high profile of this issue. One diverse board member served for 24 years prior to her retirementcommittees on which directors serve and the other passed away unexpectedly after 19 yearsCompany’s size and complexity. As a small-cap company that is strategically focused on narrow markets, the Nominating and Governance Committee feels the current size of Board service. Each of these diverse individuals was selected for Board service based on leadership skills, integrity and proven performance managing in highly cyclical industries. There is currently not an opening on our Board and the Board does not believe it– seven directors – is in the best interests of shareholders. As currently constituted, our Board of Directors is agile, entirely capable of representing the interests of shareholders and cost effective. As future Board vacancies occur, the Nominating and Governance Committee is committed to expandsourcing a diverse slate of qualified director nominees for consideration.

Any recommendation submitted by a shareholder to the sizeNominating and Governance Committee should include information relating to each of the Board. As we planrequired qualifications for director succession, we are committed to a process of identifying diverse candidates who are qualified to serve on our Board.

Communicationsthe potential candidate along with the Board of Directors

other information specified in our bylaws for shareholder nominations. The Board has approved a process for communicatingNominating and Governance Committee applies the same standards in evaluating candidates submitted by shareholders as it does in evaluating candidates submitted by other sources. Suggestions regarding potential director candidates, together with the Board. Shareholders and interested parties can send communications to the Board and, if applicable, to any of its committees or to specified individual directorsrequired information described above, should be submitted in writing c/oto Insteel Industries Inc., 1373 Boggs Drive, Mount Airy, North Carolina 27030, Attention: Secretary. Shareholders who want to directly nominate a director for consideration at next year’s Annual Meeting should refer to the procedures described under “Shareholder Proposals for the 2025 Annual Meeting” on page 51.

Communicating with our Board of Directors

Any shareholders or interested parties who wish to communicate directly with our Board, with our non-management directors as a group or with our Lead Director, may do so by writing to Insteel Industries Inc., 1373 Boggs Drive, Mount Airy, North Carolina 27030, Attention: Secretary. Shareholders or other interested parties also may communicate with members of the Board by sending an e-mail to our Secretary at secretary@insteel.com. To ensure proper handling, any mailing envelope or e-mail containing the communication intended for the Board must contain a clear notation indicating that the communication is a “Shareholder/Board Communication” or an “Interested Party/Board Communication.”

We screen mail addressed to theour Board its Committees or any specified individual director for security purposes and to ensure that the mailit relates to discrete business matters that are relevant to the Company. As part of that process, our Company. MailSecretary reviews all such correspondence and regularly forwards to the Board copies of all correspondence that, satisfies these screening criteria is required toin her opinion, deals with the functions of the Board or its Committees or that she otherwise determines requires their attention. Advertisements, solicitations for business, requests for employment, requests for contributions, matters that may be better addressed by management or other inappropriate material will not be forwarded to the appropriate director orour directors.

Code of Business Conduct

Our Code of Business Conduct and Ethics (the “Code of Conduct”), which serves as our code of ethics, applies to all directors and officers and other employees of the Company and its subsidiaries. We adopted the Code of Conduct to help employees, officers and directors understand our standard of ethical business practices and to promote awareness of ethical issues that may be encountered in carrying out their responsibilities. Any waiver of applicable requirements in the Code of Conduct that is granted to any of our directors, to our principal executive officer, to any of our senior financial officers (including our principal financial officer, principal accounting officer or controller) or to any other person who is an executive officer of Insteel requires the approval of the Board. Any such waiver of or amendment to the Code of Conduct will be disclosed on our corporate website, www.insteel.com, or in a Current Report on Form 8-K.

Corporate Responsibility

We are committed to operating our business responsibly and creating long-term value for our shareholders. We fulfill our commitment to creating long-term value by striving to operate our business in a sustainable way, since long-term success requires that we maintain a healthy and satisfied workforce, protect the environment of the communities in which we operate and conserve natural resources.

Our Board and its committees review with management our programs related to maintenance of safe operations of our workforce, management succession, compensation and benefits, compliance with legal and regulatory requirements, compliance with our Code of Conduct and other topics relevant to the responsible and sustainable operation of the Company. Safe operations with zero harm to employees, the environment and Company assets is a key goal and is the first item covered at our meetings of senior management and in each business operations report that management provides at Board meetings. While we are proud that we maintain an OSHA recordable injury average significantly lower than the average for our industry, we continually strive to attain our goal of zero harm.

For additional information on our approach to environmental and human capital issues, please see our website at www.insteel.com and our Annual Report on Form 10-K for fiscal 2023.

Availability of Bylaws, Board Governance Guidelines, Code of Conduct and Committee Charters

Our bylaws, Board Governance Guidelines, Code of Conduct, Audit Committee Charter, Executive Compensation Committee Charter and Nominating and Governance Committee Charter are available on our website at https://investor.insteel.com/corporate-governance/ governance-documents, and in print to any shareholder upon written request to our Secretary.

Security Ownership of Certain Beneficial Owners

On the record date, December 15, 2021,13, 2023, to our knowledge, no one other than the shareholders listed below beneficially owned more than 5% of the outstanding shares of our common stock.

Name and Address of Beneficial Owner		Number of Shares		Percentage of Shares
BlackRock, Inc. and affiliates(1) 55 East 52nd Street New York, NY 10055		3,009,149		15.5%
Franklin Mutual Advisers, LLC and affiliates(2) 101 John F. Kennedy Parkway Short Hills, NJ 07078-2789		1,543,224		8.0%
T. Rowe Price Associates, Inc.(3) 100 E. Pratt Street Baltimore, MD 21202		1,341,037		6.9%
The Vanguard Group(4) 100 Vanguard Blvd. Malvern, PA 19355		1,220,212		6.3%
Dimensional Fund Advisors LP(5) Building One 6300 Bee Cave Road		1,162,496		6.0%

Name and Address of Beneficial Owner		Number of Shares		Percentage of Shares
BlackRock, Inc. and affiliates(1) 55 East 52nd Street New York, NY 10055		3,448,632		17.7%
The Vanguard Group(2) 100 Vanguard Blvd. Malvern, PA 19355		1,330,467		6.8%
Dimensional Fund Advisors LP(3) Building One 6300 Bee Cave Road Austin, TX 78746		1,157,662		6.0%
Royce & Associates, LP(4) 745 Fifth Avenue New York, NY 10151		994,903		5.1%

(1)	Based upon information set forth in a Schedule 13G filed with the SEC by BlackRock, Inc. on January 25, 202126, 2023, reporting sole power to vote or direct the vote of 2,981,2593,425,685 shares and sole power to dispose or direct the disposition of 3,009,1493,448,632 shares. In its Schedule 13G/A, BlackRock, Inc. reported that the interest of iShares Core S&P Small-Cap ETF in the specified shares is more than 5% of the outstanding shares of our common stock.
(2)	Based upon information set forth in a Schedule 13G/A filed with the SEC by Franklin Mutual Advisers, LLC on February 4, 2021 reporting sole power to vote or direct the vote of 1,415,277 shares and sole power to dispose or direct the disposition of 1,543,224 shares. Franklin Mutual Advisers, LLC disclaimed beneficial ownership of such shares.
(3)	Based upon information set forth in a Schedule 13G/A filed with the SEC by T. Rowe Price Associates, Inc. on February 16, 2021 reporting sole power to vote or direct the vote of 401,452 shares and sole power to dispose or direct the disposition of 1,341,037 shares.
(4)	Based upon information set forth in a Schedule 13G/A filed with the SEC by The Vanguard Group on February 10, 20219, 2023 reporting shared power to vote or direct the vote of 19,95836,068 shares, sole power to dispose or direct the disposition of 1,185,5401,277,424 shares and shared power to dispose or direct the disposition of 34,67253,043 shares.
(5)(3)	Based upon information set forth in a Schedule 13G/A filed with the SEC by Dimensional Fund Advisors LP on February 12, 202110, 2023, reporting that it or its subsidiaries may possess sole power to vote or direct the vote of 1,103,0021,136,602 shares and sole power to dispose or direct the disposition of 1,162,4961,157,662 shares. Dimensional Fund Advisors LP and its subsidiaries disclaimed beneficial ownership of such shares.
(4)	Based upon information set forth in a Schedule 13G filed with the SEC by Royce & Associates, LP on January 23, 2023, reporting that it or its subsidiaries may possess sole power to vote or direct the vote of 994,903 shares and sole power to dispose or direct the disposition of 994,903 shares.

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Security Ownership of Directors and Executive Officers

 

The following table shows the number of shares of our common stock, beneficially owned on December 15, 2021,13, 2023, the record date, by each of our directors, each of our named executive officers, and by all such directors and executive officers as a group. The table also shows the number of restricted stock units (“RSUs”) held by each individual and the number of shares of our common stock that each individual had the right to acquire by exercise of stock options within 60 days after the record date. Beneficial ownership is determined in accordance with the rules of the SEC. Except as indicated in the footnotes to this table and under applicable community property laws, each shareholder named in the table has sole voting and dispositive power with respect to the shares set forth opposite the shareholder’s name. The address of all listed shareholders is c/o Insteel Industries Inc., 1373 Boggs Drive, Mount Airy, North Carolina 27030.

 

		Number of				Options
		Shares of				Exercisable
Name of Beneficial Owner		Common Stock		RSUs(1)		Within 60 days		Total		%		Number of Shares of Common Stock		RSUs(1)		Options Exercisable Within 60 days		Total	%
Abney S. Boxley, III		10,498		2,039				10,498
Abney S. Boxley III												14,094		2,478				14,094	*
Anne H. Lloyd		2,716		2,039				2,716		*		6,312		2,478				6,312	*
W. Allen Rogers II		85,232		2,039				85,232		*		88,828		2,478				88,828	*
Jon M. Ruth		13,631		2,039				13,631		*		17,620		2,478				17,620	*
Joseph A. Rutkowski		13,619		2,039				13,619		*		17,215		2,478				17,215	*
G. Kennedy Thompson		23,182		2,039				23,182		*		26,778		2,478				26,778	*
H. O. Woltz III(2)		668,874		38,196		70,899		739,773		3.8		667,421		29,340		117,937		785,358	4.0
Scot R. Jafroodi												40,580		7,531		30,448		71,028
Mark A. Carano		0		6,764		2,354		2,354		*		—		—		—		—	*
Richard T. Wagner												42,765		12,349		13,176		55,941	*
James F. Petelle		17,746		9,550		13,389		31,135		*		15,954		5,526		9,969		25,923	*
Richard T. Wagner		35,133		17,506		54,432		89,565		*
James R. York		468		7,003		11,728		12,196		*		4,604		6,157		20,694		25,298	*
All Directors and Executive Officers as a Group (11 Persons)		871,099				152,802		1,023,901		5.2
All Directors and Executive Officers as a Group (11 Persons)(3)												926,217				182,255		1,108,472	5.6

(1)	The economic terms of RSUs are substantially similar to shares of restricted stock. However, because shares of restricted stock carry voting rights while RSUs do not, pursuant to SEC rules shares of restricted stock would be included in the “Total” column, while RSUs are not so included. We show them here because we believe it provides additional information to our shareholders regarding the equity interests our executive officers and directors hold in the Company.
(2)	Includes 170,610 shares held in various trusts for which Mr. Woltz serves as co-trustee. Mr. Woltz shares voting and investment power for these shares. He disclaims beneficial ownership of such shares except to the extent of his pecuniary interest in them.
(3)	Includes Elizabeth C. Southern, Vice President Administration, Secretary and Chief Legal Officer. Excludes Messrs. Carano and Petelle, who left the Company on December 30, 2022, and September 30, 2023, respectively.
(*)	Less than 1%.

 

Delinquent Section 16(a) Reports

 

Section 16(a) of the Exchange Act requires our directors, officers and greater than 10% owners to report their beneficial ownership of our common stock and any changes in that ownership to the SEC, on forms prescribed by the SEC. Specific dates for such reporting have been established by the SEC and we are required to report in our proxy statement any failure to file such report by the established dates during the last fiscal year. Based upon our review of the copies of such forms furnished to us for the year ended October 2, 2021,September 30, 2023, and information provided to us by our directors, officers and ten percent shareholders, we believe that all forms required to be filed pursuant to Section 16(a) were filed on a timely basis, except that a single transaction on one Form 4 for Mr. Wagner was filed late due to administrative error.basis.

 

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Item Number OneElection of Directors

 

Introduction

 

Our bylaws as last amended December 19, 2016, provide that the number ofour Board will have between five and ten directors, as determined from time to time by the Board, shall be not less than five nor more than 10, with the preciseexact number to be determined from time to time by resolution of the Board. TheOur Board currently has most recently set the number ofseven directors. Our bylaws also provide for directors at seven. The bylaws further provide that directors shallto be divided into three classes serving staggered three-year terms, with each class to be as nearly equal in number as possible.

Accordingly, if elected Mr. Woltz and Mr. Thompson are currently serving three-year terms that will expire at the 2024 Annual Meeting. If Mr. Woltz and Mr. Thompson are re-elected by our shareholders, at this Annual Meeting, Messrs. Ruth and Rutkowskithey will serve additional three-year terms expiring at the 20252027 Annual Meeting of Shareholders or until their successors are elected and qualified. Each of the nominees presently serve as our directors. Meeting.

It is not contemplated that any of the nomineeseither Mr. Woltz or Mr. Thompson will be unable or unwilling for good cause to serve, but if that should occur, it is the intention of the agents named in the proxy toholders may vote for the election of such other person or persons to serve as a director as the Board may recommend. If any director resigns, dies or is otherwise unable to serve out his or her term, or the Board increases the number of directors, the Board may fill the vacancy until the expiration of such director’s term.

 

Vote Required

 

The nominees for directorelection of directors will be electeddetermined by a plurality of the votes cast at the meeting at which a quorum representing a majority of all outstanding Shares is present and voting, either by proxy or in person.Annual Meeting. This means that the two nominees receiving the highest number of “FOR” votes will be elected as directors. However, pursuant to the charter of our Nominating and Governance Committee and our Board Governance Guidelines, a nominee who receives the affirmative vote of less than a majority of the votes cast in an uncontested election would beis required to submit his or her resignation to the Board. See “Board Governance Guidelines” on p. 11.Shareholders cannot cumulate votes in the election of directors.

 

Board Recommendation

 

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FORTHE ELECTION OF EACH OF THE FOLLOWINGTHESE TWO NOMINEES TO SERVE AS DIRECTORS FOR THE TERMS DESCRIBED HEREIN.NOMINEES.

 

Information Regarding Nominees, Continuing Directors and Executive Officers

 

We have set forth below certain information regarding our nominees for director, our continuing directors and our executive officers. The age shown for each such person is his or her age on December 15, 2021,13, 2023, our record date.

 

				Executive	Nominating and
		Director	Audit	Compensation	Governance
	Age	Since	Committee			Independent		Age		Director Since		Audit Committee		Executive Compensation Committee		Nominating and Governance Committee		Independent
Abney S. Boxley III	63	2018				Y		65		2018								Y
Anne H. Lloyd	60	2019				Y		62		2019								Y
W. Allen Rogers II	75	1986				Y		77		1986								Y
Jon M. Ruth	66	2016				Y		68		2016								Y
Joseph A. Rutkowski	66	2015				Y		68		2015								Y
G. Kennedy Thompson	71	2017				Y		73		2017								Y
H. O. Woltz III	65	1986				N		67		1986								N

 

Chair

 

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Nominees for DirectorsDirector with terms expiring at the 20252027 Annual Meeting

JON M. RUTH

Age 66
Director since: 2016
INDEPENDENT

Mr. Ruth retired from Cargill Incorporated, a global provider of food, agricultural, industrial and financial products and services in August of 2015, following 35 years of service to Cargill. Mr. Ruth served in various senior executive positions with Cargill, most recently as vice president leading its SAP enterprise resource planning implementation across its businesses in Europe and North America from 2005 to 2015, as a director of North Star BlueScope Steel, a joint venture between Cargill and BlueScope Steel from 2004 to 2015, and as President of North Star Steel from 2003 to 2005. Our Board determined that he should continue to serve as director because of his extensive experience as a senior executive of a large multi-national company with specific experience in the steel industry.

Committee Memberships:

•	Executive Compensation Committee (Chair)
•	Nominating and Governance Committee

JOSEPH A. RUTKOWSKI

Age 66
Director since: 2015
INDEPENDENT

Mr. Rutkowski has been a Principal at Winyah Advisors LLC, a management consulting firm, since 2010. Previously, Mr. Rutkowski spent 21 years at Nucor Corporation (Nucor), the largest steel producer in the United States. Mr. Rutkowski began his career with Nucor in 1989, most recently serving as Executive Vice President of Business Development, International and North America, for Nucor from November 1998 until his retirement on February 28, 2010. He served as Vice President of Nucor from 1993 to 1998 and previously as General Manager of a number of Nucor steel mills. Our Board determined that he should continue to serve as a director because of his extensive background as a senior executive in the steel industry and because he also contributes his experience as a current director of Cenergy Holdings S.A., a Belgian company, and as a former director of Cleveland Cliffs, Inc., a U.S. public company.

Committee Memberships:

•	Executive Compensation Committee
•	Nominating and Governance Committee (Chair)

Current Directorship:

Cenergy Holdings S.A.

Continuing Directors with terms expiring at the 2023 Annual Meeting

ABNEY S. BOXLEY, III

Age 63
Director since: 2018
INDEPENDENT

Mr. Boxley was an employee of Boxley Materials Company beginning in 1980, and president and CEO of that company from 1988 until its acquisition by Summit Materials Inc. in 2016. Mr. Boxley currently serves as Summit Materials’ Executive Vice President. In addition to our Board, Mr. Boxley serves on the boards of two other public companies: Pinnacle Financial Partners, Inc. and RGC Resources, Inc., as well as on a number of non-profit boards. Our board determined that Mr. Boxley should continue to serve as a director because of his in-depth knowledge of the construction aggregates business, a business that is related to ours, and because he brings to our board his experience as a CEO of a substantial business enterprise and his experience as a director of two other public companies.

Committee Memberships:

•	Executive Compensation Committee
•	Nominating and Governance Committee

Current Directorships:

•	Pinnacle Financial Partners, Inc.
•	RGC Resources, Inc.

ANNE H. LLOYD

Age 60
Director since: 2019
INDEPENDENT

Ms. Lloyd served as Executive Vice President and Chief Financial Officer of Martin Marietta Materials, Inc., a publicly traded global supplier of building materials, from 2005 until her retirement in 2017. She joined Martin Marietta in 1998 as Vice President and Controller and was named Chief Accounting Officer in 1999. Ms. Lloyd currently serves as a director of Highwood Properties, Inc., a publicly traded company and as a director of James Hardie Industries p.l.c., an Irish publicly traded company. We believe that Ms. Lloyd should continue to serve as a director because of her financial expertise, her deep knowledge of the construction aggregates business, a business that is related to ours, and because of her extensive public-company experience, including as a director of two other public companies.

Committee Memberships:

•	Audit Committee
•	Executive Compensation Committee

Current Directorships:

•	Highwood Properties, Inc.
•	James Hardie Industries p.l.c.

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W. ALLEN ROGERS II

Age 75
Director since: 1986
INDEPENDENT

Mr. Rogers is a Principal of Ewing Capital Partners, LLC, an investment banking firm founded in 2003 and a partner in Peter Browning Partners, LLC, a provider of advisory services to public-company boards. From 2002 to 2003, he was a Senior Vice President of Intrepid Capital Corporation, an investment banking and asset management firm. From 1998 until 2002, Mr. Rogers was President of Rogers & Company, Inc., a private investment banking boutique. From 1995 through 1997, Mr. Rogers served as a Managing Director of KPMG BayMark Capital LLC, and the investment banking practice of KPMG. Mr. Rogers served as Senior Vice President �� Investment Banking of Interstate/Johnson Lane Corporation from 1986 to 1995 and as a member of that firm’s Board of Directors from 1990 to 1995. He is a director of Ewing Capital Partners, LLC, a private company. Mr. Rogers serves as our Lead Independent Director. Our Board determined that Mr. Rogers should continue to serve as a director due to his expertise in public capital markets, investment banking and finance, some of which is attributable to his participation as an investment banker in our initial public offering, as well as his expertise in public-company governance.

Committee Memberships:

•	Audit Committee
•	Nominating and Governance Committee

Current Directorship:

Ewing Capital Partners, LLC

Continuing Directors with terms expiring at the 2024 Annual Meeting

 

H. O. WOLTZ III

 

Age 65
67
Director since: February 4, 1986

 

Mr. Woltz is our Chairman, President and Chief Executive Officer, having been employed by us and our subsidiaries in various capacities since 1978. He was named President and Chief Operating Officer in 1989, CEOChief Executive Officer in 1991 and Chairman of the Board in February 2009. He served as our Vice President from 1988 to 1989 and as President of Rappahannock Wire Company, formerly a subsidiary of our Company, from 1981 to 1989. He also serves as President of Insteel Wire Products Company, a current subsidiary of our Company. Mr. Woltz served as President of Florida Wire and Cable, Inc., also formerly a subsidiary of our Company, until its merger with Insteel Wire Products Company in 2002. He has been employed by us for 4345 years and has been our President for 3234 years. Our Board determined that he should continue to serve as a director because he has an intimate knowledge of our products, manufacturing processes, customers and markets, and draws on that knowledge to provide the Board with detailed analysis and insight regarding the Company’s performance as well as extensive knowledge of our industry.

 

GG. KENNEDY (“KEN”) THOMPSON

 

Age 71
73
Director since: September 6, 2017

INDEPENDENT

 

Mr. Thompson retired in April 2019 from Aquiline Capital Partners LLC, a private equity firm investing in the global financial services sector where he had been a partner since 2009. Prior to joining Aquiline, Mr. Thompson was Chairman, President and Chief Executive Officer of Wachovia Corporation, a publicly traded regional bank from 1999 to 2008. Previously, Mr. Thompson was the chairman of The Clearing House, The Financial Services Roundtable and the Financial Services Forum. He is a former president of the International Monetary Conference and was also president of the Federal Advisory Council of the Federal Reserve Board. Mr. Thompson currently serves as a director of two other publicly traded companies: Lending Tree, Inc. and Pinnacle Financial Partners, Inc. We determined Mr. Thompson should continue to serve as a director because of his financial expertise, public company leadership experience and executive management experience.

 

Committee Memberships:

•	Executive Compensation Committee
•	Audit Committee (Chair)

Current Directorships:

•	Lending Tree, Inc.
•	Pinnacle Financial Partners, Inc.

Continuing Directors with terms expiring at the 2025 Annual Meeting

JON M. RUTH

Age 68
Director since: April 1, 2016
INDEPENDENT

Mr. Ruth retired from Cargill Incorporated (“Cargill”), a global provider of food, agricultural, industrial and financial products and services in 2015, following 35 years of service to Cargill. Mr. Ruth served in various senior executive positions with Cargill, most recently as Vice  President leading its SAP enterprise resource planning implementation across its businesses in Europe and North America from 2005 to 2015, as a director of North Star BlueScope Steel, a joint venture between Cargill and BlueScope Steel from 2004 to 2015, and as President of North Star Steel from 2003 to 2005. Our Board determined that he should continue to serve as director because of his extensive experience as a senior executive of a large multi-national company with specific experience in the steel industry.

Committee Memberships:

 

•	Executive Compensation Committee (Chair)
•	AuditNominating and Governance Committee

JOSEPH A. RUTKOWSKI

Age 68
Director since: September 18, 2015
INDEPENDENT

Mr. Rutkowski has been a Principal at Winyah Advisors LLC, a management consulting firm, since 2010. Previously, Mr. Rutkowski spent 21 years at Nucor Corporation (“Nucor”), the largest steel producer in the United States. Mr. Rutkowski began his career with Nucor in 1989, most recently serving as Executive Vice President of Business Development, International and North America, for Nucor from 1998 until his retirement in 2010. He served as Vice President of Nucor from 1993 to 1998 and previously as General Manager of a number of Nucor steel mills. Our Board determined that he should continue to serve as a director because of his extensive background as a senior executive in the steel industry and because he also contributes his experience as a current director of Cenergy Holdings S.A., and Viohalco, S.A., both Belgian public companies, and as a former director of Cleveland Cliffs, Inc., a U.S. public company.

Committee Memberships:

•	Executive Compensation Committee
•	Nominating and Governance Committee (Chair)

Current Directorship:

•	Cenergy Holdings S.A.
•	Viohalco S.A.

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Continuing Directors with terms expiring at the 2026 Annual Meeting

ABNEY S. BOXLEY III

Age 65
Director since: April 1, 2018
INDEPENDENT

Mr. Boxley served as President and Chief Executive Officer of Boxley Materials Company from 1988 through its acquisition by Summit Materials Inc. (“Summit Materials”) in 2016 and continuing until 2018. Mr. Boxley then served as Summit Materials’ Regional Vice President and later as its Executive Vice President until his retirement in 2021. He currently serves as a consultant to Summit Materials and as President of Boxley Family, LLC and Chairman of Boxley Ready Mix, LLC, both private companies. In addition to our Board, Mr. Boxley serves on the boards of two other public companies: Pinnacle Financial Partners, Inc. and RGC Resources, Inc., as well as on a number of non-profit boards. Our Board determined that Mr. Boxley should continue to serve as a director because of his in-depth knowledge of the construction aggregates business, a business that is related to ours, and because he brings to our Board his experience as a Chief Executive Officer of a substantial business enterprise and his experience as a director of two other public companies.

Committee Memberships:

•	Executive Compensation Committee
•	Nominating and Governance Committee

 

Current Directorships:

 

•	Lending Tree, Inc.
•	Pinnacle Financial Partners, Inc.
•	RGC Resources, Inc.

 

W. ALLEN ROGERS II

Age 77
Director since: February 4, 1986
INDEPENDENT

Mr. Rogers is a partner in Peter Browning Partners, LLC, a provider of advisory services to public company boards. He was a principal of Ewing Capital Partners, an investment banking firm which he co-founded, from 2003 until 2022. During 2002 and 2003, he was a Senior Vice President of Intrepid Capital Corporation, an investment banking and asset management firm. From 1998 until 2002, Mr. Rogers was President of Rogers & Company, Inc., a private investment banking boutique. From 1995 through 1997, Mr. Rogers served as a Managing Director of KPMG BayMark Capital LLC, and the investment banking practice of KPMG. Mr. Rogers served as Senior Vice President – Investment Banking of Interstate/Johnson Lane Corporation from 1986 to 1995 and as a member of that firm’s Board of Directors from 1990 to 1995. Mr. Rogers serves as our independent Lead Director. Our Board determined that Mr. Rogers should continue to serve as a director due to his expertise in public capital markets, investment banking and finance, some of which is attributable to his participation as an investment banker in our initial public offering, as well as his expertise in public company governance.

Committee Memberships:

•	Audit Committee
•	Nominating and Governance Committee

ANNE H. LLOYD

Age 62
Director since: April 16, 2019
INDEPENDENT

Ms. Lloyd served as Executive Vice President and Chief Financial Officer of Martin Marietta Materials, Inc. (“Martin Marietta”), a publicly traded global supplier of building materials, from 2005 until her retirement in 2017. She joined Martin Marietta in 1998 as Vice President and Controller and was named Chief Accounting Officer in 1999. Ms. Lloyd currently serves as a director of Highwoods Properties, Inc. and as a director and non-executive chair of James Hardie Industries p.l.c. We believe that Ms. Lloyd should continue to serve as a director because of her financial expertise, her deep knowledge of the construction aggregates business, a business that is related to ours, and because of her extensive public-company experience, including as a director of two other public companies.

Committee Memberships:

•	Audit Committee
•	Executive Compensation Committee

Current Directorships:

•	Highwoods Properties, Inc.
•	James Hardie Industries p.l.c.

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Executive Officers Who Are Not Continuing Directors or Nominees

 

In addition to Mr. Woltz, thelisted below are our other executive officers. Each of our executive officers listed below were appointedis elected annually by the Board of Directors to the offices indicated for a term that will expire at the next annual meeting of the Board of Directorsserve until his or her successor is elected and qualifies or until their successors are elected and qualify. The next meeting at which officers will be appointed is scheduled for February 15, 2022, at which eachhis or her death, resignation or removal. No family relationship exists between any of our directors or executive officers is expected to be reappointed.officers.

 

Mark A. Carano,Scot R. Jafroodi, 52, has served54, currently serves as SeniorInsteel’s Vice President, Chief Financial Officer and Treasurer and has served in various capacities with the Company since October2005. From 2020 andto January 2023, he served as Vice President, Corporate Controller and Chief FinancialAccounting Officer. He previously held the role of Corporate Controller and Chief Accounting Officer from 2007 to 2020 and Treasurer since joining us in May 2020.Corporate Controller from 2005 to 2007. Before joining us, Mr. Caranohe was a Senior Manager at BDO Seidman, LLP from 2003 through 2005 and, prior to that, had been employed by Big River Steel,for ten years at Deloitte & Touche USA, LLP, most recently as a privately-held manufacturerSenior Manager. Mr. Jafroodi earned a Bachelor of steel products, having servedScience in business administration and a Master of Science in accounting degree from Appalachian State University. Mr. Jafroodi is a certified public accountant in the State of North Carolina.

Elizabeth C. Southern, 42, joined Insteel in June 2023 and currently serves as Insteel’s Vice President Administration, Secretary and Chief Financial Officer since April 2019. PriorLegal Officer. From 2012 to Big River Steel, heJune 2023, she served in various senior management finance roles with Babcock & Wilcox Enterprises from June 2013 to October 2018. Mr. Carano also has 14 years of combined investment banking experience with Bank of America, Merrill Lynch, Deutsche Bank and First Union Securities.

James F. Petelle, 71, has served as Vice-President-Administration, Secretary and Chief Legal Officer since October 2020. He joined us in October 2006 and he was elected Vice PresidentHanesbrands Inc., a publicly held apparel company, including Deputy General Counsel and Assistant Secretary in November 2006 and Vice President, - AdministrationHuman Resources. Earlier in her career, Ms. Southern was an associate attorney at Womble Bond Dickinson (US) LLP. She earned a Bachelor of Arts degree from the University of North Carolina at Chapel Hill and Secretary in January 2007. He was previously employed by Andrew Corporation, a publicly-held manufacturerlaw degree from the University of telecommunications infrastructure equipment, having served as Secretary from 1990 to May 2006, and Vice President - Law from 2000 to October 2006.Texas.

 

Richard T. Wagner, 62,64, has served as Senior Vice President and Chief Operating Officer since October 2020. He joined us in 1992 and has served as Vice President and General Manager of the Concrete Reinforcing Products Business Unit of our subsidiary, Insteel Wire Products Company, since 1998. He was appointed Vice President of the parent company, Insteel Industries Inc., in February 2007. From 1977 until 1992, Mr. Wagner served in various positions with Florida Wire and Cable, Inc., a manufacturer of PC strand and galvanized strand products, which was later acquired by us in 2000. He earned a Bachelor of Business Administration degree from the University of North Florida.

 

James R. York, 63,65, has served as Senior Vice President, Sourcing and Logistics since October 2020 and as Vice President, Sourcing and Logistics since joining us in 2018. Prior to Insteel, he served in various senior management roles with Leggett & Platt, a publicly-heldpublicly held manufacturer of diversified engineered products, from 2002 to 2018, including Group President-Rod and Wire Products, Unit President-Wire Products and Unit President-Specialty Products. Mr. York served in a range of leadership positions at Bekaert Corporation, A U.S. subsidiary of N.V. Bekaert A.S. of Belgium, from 1983 to 2002. He earned a Bachelor of Science degree from the University of Missouri.

 

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Item Number Two Advisory Vote on the Compensation of our Named Executive Officers

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires us to hold a “Say-on-Pay” vote at least every three years. In light of the vote of the shareholders at our 2023 Annual Meeting of Shareholders, we determined to continue to hold Say-on-Pay votes annually.

As described in detail under the heading “Executive Compensation – Compensation Discussion and Analysis,” we design our executive officer compensation programs to attract, motivate and retain the key executives who drive our success and to align the interests of our executive officers with the interest of our shareholders. We are committed to “pay for performance,” meaning that a substantial proportion of our executive officer compensation is variable and will be determined based on our performance. In addition, we design our executive compensation to encourage long-term commitment by our executive officers to Insteel.

Please read the “Executive Compensation” section of this proxy statement, which includes our Compensation Discussion and Analysis, executive officer compensation tables and related narrative discussion and describes in detail our compensation programs and policies for our executive officers and the decisions made by our Executive Compensation Committee for fiscal 2023. Highlights of our executive officer compensation programs and policies are as follows:

•	We closely monitor the compensation programs of companies of similar size and similar industries, with the objective of providing total compensation opportunities to our executive officers that are near the median of our peer group.
•	To motivate our executive officers and to align their interests with those of our shareholders, we provide annual incentives which are designed to reward our executive officers for the attainment of short-term goals and long-term incentives, which are designed to reward them for increases in our shareholder value over time.
•	We provide executive officers with long-term incentives in the form of stock options and restricted stock units (“RSUs”). These equity-based awards, which vest over a period of three years (except in the case of retirement, death or disability), link compensation with the long-term price performance of our stock and also provide a substantial retention incentive.
•	After consultation with our independent compensation consultant, we believe that while our long-term incentives may be viewed as less performance-based than those of our peers because they do not include performance contingent vesting, our annual incentive plan is generally more performance-based than plans of our peers, and therefore, taken as a whole, our compensation program is appropriately tied to Company performance. We also believe that time-based vesting of equity awards is appropriate due to the cyclicality of our business and volatility of our financial results.
•	We have entered into change in control severance agreements with each of our executive officers. These agreements provide certain benefits in the event of a termination following a change in control, also known as a “double-trigger” requirement. We do not provide for tax gross-up payments on any severance payments that would be made in connection with a change in control.
•	We do not provide significant perquisites to our executive officers.
•	We have a clawback policy to recoup performance-based payments.
•	We have a policy prohibiting our executive officers from entering into financial transactions designed to hedge or offset any decrease in the market value of our stock. This policy also requires our executive officers to disclose to the Board any intention to enter into a transaction involving the pledge of our stock as collateral to secure personal loans.

We are requesting shareholder approval of the compensation of our named executive officers as disclosed in this proxy statement. This proposal, commonly known as a “Say-on-Pay” proposal, gives our shareholders the opportunity to express their views on our executive officers’ compensation. The vote is not intended to address any specific item of compensation but rather the overall compensation of our executive officers and the philosophy, policies and practices described in this proxy statement.

The Say-on-Pay vote is an advisory vote which is not binding on us. However, the Board and our Executive Compensation Committee value the opinions expressed by shareholders in their vote on this proposal and will carefully consider the outcome of the vote when making future compensation decisions with respect to our executive officers.

Board Recommendation

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FORTHE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.

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Executive Compensation

 

	TABLE OF CONTENTS

	Compensation Discussion and Analysis	2021
	I. Executive Summary	2021
	II. Overall Objectives	2223
	III. How We Make Executive Compensation Decisions	24
	IV. Elements of Compensation	2425
	Executive Compensation Committee Report	2829

 

Compensation Discussion and Analysis

 

I.	Executive Summary

I.   Executive Summary

 

Introduction

 

This section of our proxy statement provides you with a description of our executive compensation policies and programs, the decisions made by our Executive Compensation Committee (the “Committee”) regarding fiscal 20212023 compensation for our named executive officers (“NEOs”) and the factors that were considered in making those decisions. In fiscal 2021,2023, our executive officersNEOs consisted of the following individuals:

 

H. O. WOLTZ III	President and Chief Executive Officer
SCOT R. JAFROODI	Vice President, Chief Financial Officer and Treasurer
MARK A. CARANO	Former Senior Vice President, Chief Financial Officer and TreasurerTreasurer*
JAMES F. PETELLE	Vice President – Administration, Secretary and Chief Legal Officer
RICHARD T. WAGNER	Senior Vice President and Chief Operating Officer
JAMES R. YORK(1)	Senior Vice President – Sourcing and Logistics

(1)JAMES F. PETELLE

Mr. York was appointed an executive officer of the Company on February 16, 2021.Former Vice President Administration, Secretary and Chief Legal Officer**

 

*	Resigned effective December 30, 2022.
**	Retired effective September 30, 2023.

Results of 20212023 Say-On-Pay Vote

 

At our annual meeting on February 16, 2021, 96%2023 Annual Meeting of Shareholders, our shareholders approved the shareholders who cast votes votedcompensation of Insteel’s named executive officers with over 98% support. Our Board of Directors, and the Executive Compensation Committee in favor of our Say-on-Pay proposal. The Committeeparticular, considered the results of this vote and believesseveral factors in determining that the consistent high levelfundamental characteristics of support from our Shareholders for ourInsteel’s executive compensation program overshould continue this year, including the strong support of our shareholders, the executive compensation programs of our peer group companies, our past several years is a result of the Committee’s commitment to compensating our executive officers in a way that provides a close linkage between payoperating performance and performance.planned strategic initiatives.

 

Compensation Program Changes for Fiscal 2021

Prior to the compensation changes shown below, which were effective at the end of the first quarter of fiscal 2021, we most recently adjusted executive officer compensation in the fourth quarter of fiscal 2018. The Committee does not typically adjust base salaries of our executive officers each fiscal year, but did make the following adjustments to base salaries during fiscal 2021:

Executive Officer	Previous Base Salary Approved July 15, 2018	Current Base Salary Approved December 15, 2020
H. O. Woltz III	$635,000	$675,000
James F. Petelle	$225,000	$250,000
Richard T. Wagner	$330,000	$350,000
James R. York	$230,000	$250,000

In addition, in connection with his appointment as an executive officer of the Company, Mr. York’s targeted annual incentive award under our Return on Capital Incentive Compensation Plan (“ROCICP”) was increased from 40% of base salary to 60% of base salary. Subsequent to the end of fiscal 2021, the targeted amount of Mr. York’s annual equity awards was increased from $110,000 to $150,000.

The Committee did not adjust the base salary of Mr. Carano in fiscal 2021, as his employment with us began May 18, 2020.

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Business and Financial Performance During Fiscal 2021

2023

 

We are the nation’s largest manufacturer of steel wire reinforcing products for concrete construction applications. As such, our revenues normally are driven by the level of nonresidential construction activity. We achievedIn the wake of record revenuesfinancial results in 2022, fiscal year 2023 presented a highly challenging business environment that required rebalancing our supply chain, a significant downward reset of steel prices, ongoing weakness in the residential construction market and earnings during fiscal 2021,inventory rebalancing

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by customers serving non-residential markets. These headwinds resulted in narrowing spreads and higher unit manufacturing costs due to highlower production levels of demand fortogether with inflationary pressures. Nevertheless, our productsfinancial condition remains strong, allowing us to continue making the strategic investments necessary to strengthen our market leadership positions and favorable spreads between the cost of steel wire rod, our primary raw material, and average selling prices. We achieved these record results in the face of continued headwinds from sporadic shortfalls of raw material supplies and staffing challenges, which adversely impacted our operational efficiency.low-cost producer status as well as pursue additional growth opportunities. Highlights of our fiscal 20212023 performance are as follows:

 

•	Our revenues increased 25%decreased 21.5% to $590.6M, while our shipments were essentially flat.$649.2 million from $826.8 million in the prior year driven by a 17.1% decrease in average selling prices and a 5.3% decrease in shipments.
•	Net earnings increased 250%decreased 74.1% to $66.6M$32.4 million, or $3.41$1.66 per diluted share.share, from a record $125.0 million, or $6.37 per diluted share, in the prior year.
•	Return on capital, as calculated under our Return on Capital Incentive Compensation Plan (“ROCICP”), was 36.9%9.1%.
•	We invested $17.5M$30.7 million in our facilities during fiscal 2021 in support2023 primarily to advance the growth of our ongoing effortsengineered structural mesh business and to reduce production costs, enhance our manufacturing capabilitiessupport cost and strengthen our market leadership position.productivity improvement initiatives as well as recurring maintenance requirements.
•	We ended fiscal 20212023 debt-free with $89.9Ma record $125.7 million of cash, providing us with ample liquidity to meet our funding requirements and pursue growth opportunities.
•	Following the end of fiscal 2021,2023, our Board again decidedelected to return excess cash to shareholders in the form of a special dividend of $2.00$2.50 per share, paid on December 17, 2021.22, 2023.

How Our Performance Affected Executive Officers’ Compensation

 

We designprovide annual incentives designed to reward our executive officer compensation programsexecutives for the attainment of short-term goals, and long-term incentives designed to maintainreward increasing shareholder value over the long term.

Our annual incentive program, the ROCICP, is designed to promote a close alignment between our financial performance and total executive compensation based on the Company’s return on capital. We believe return on capital is more closely correlated with the creation of shareholder value than any other performance measurement. For Fiscal 2021,fiscal 2023, we made short-term incentive payments at the plan maximum of 200%93.5% of the targeted amounts, based on our return on capital.

 

The alignment between pay and performance in our programs is reflected in the correlation between the incentive payments under our ROCICP and our financial results. Because our markets are highly cyclical, we anticipate that the short-term incentive compensation of our executive officers will experience similar volatility, and we do not apply subjective factors to adjust compensation during periods where our failure to meet our return on capital targets may be due to factors outside the control of our executive officers. The following chart shows the substantial variability of our short-term incentive payments to our executive officers over the previous 1013 years:

 

FY	Short-Term Incentive Payments As Percent of Target	Return on Capital (As Calculated Under Our ROCICP)		Short-Term Incentive Payments As Percent of Target		Return on Capital (As Calculated Under Our ROCICP)
2011				0.0%		5.1%
2012	0.0%	1.4%		0.0%		1.4%
2013	85.6%	7.7%		85.6%		7.7%
2014	140.0%	10.4%		140.0%		10.4%
2015	153.1%	11.1%		153.1%		11.1%
2016	200.0%	23.1%		200.0%		23.1%
2017	163.0%	12.5%		163.0%		12.5%
2018	200.0%	16.6%		200.0%		16.6%
2019	0.0%	1.8%		0.0%		1.8%
2020	85.4%	9.7%		85.4%		9.7%
2021	200.0%	36.9%		200.0%		36.9%
2022				200.0%		47.6%
2023				93.5%		9.1%

 

In addition, a significant portion of our executives’ total compensation is composed of equity-based long-term incentive awards. These awards, which consist of stock options and restricted stock units, further tie our executives’ compensation to our performance by linking their value to changes in our stock price.

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Our Key Compensation Practices

 

Our Board and the Committee maintain governance standards applicable to our executive compensation practices include a number of features we believe reflect responsible compensation and also maintain active oversightgovernance practices and promote the interests of our program, through the following key practices:shareholders:

 

	A Committee comprised solely of independent directors.directors
	An independent compensation consultant that reports to and is directed by the Committee, and that provides no other services to the Company.Company
	A mandatory clawback policy in the event of a financial restatement.for performance-based incentive compensation awarded to executive officers
	ChangeDouble triggers for change in control payments that are contingent upon a qualifying transaction and a qualifying termination of employment (commonly referred to as a “Double Trigger”).
	Share ownership guidelines.Significant vesting periods for equity awards
	Robust share ownership guidelines
	No tax gross-ups of any kind, including for any excise taxes in conjunction with payments that are contingent upon a change in control.control payments
	No significant perquisites.perquisites
	No repricing or replacing of underwater stock options without shareholder approval
	Award caps that apply to both our ROCICP and to our long-term incentives.equity incentives
	Mitigation of risk, in that responsible management of our assets is an integral component of the calculation of annual incentives payable under our ROCICP.ROCICP

 

The remainder of this section of our proxy statement more fully describes our compensation program.

 

II.	Overall Objectives

II.   Overall Objectives

 

The Committee believes that the success of the Company requires experienced leadership that fully understands the realities of Insteel’s challenging business environment and has demonstrated superior business judgment as well as the ability to effectively manage and operate the business. The Committee’s goal in developing its executiveOur compensation system has been:program is designed to:

 

•	to attract, motivate and retain executives who will be successful in this environment;
•	to align executives’ interests with those of our shareholders; and
•	to provide appropriate rewards based on the financial performance of our business.

 

The Company is committed to “pay for performance” at all levels of the organization, and accordingly a substantial proportion of each executive officer’s total compensation is variable, meaning that it is determined based upon the Company’s financial performance. The Committee does not have a fixed formula to determine the percentage of pay that should be variable but reviews the mix between base salary and variable compensation on an annuala regular basis to ensure that its goal of paying for performance will be achieved.

 

The Committee also believes it is critically important to retain executive officers who have demonstrated their value to the Company. Accordingly, severalSeveral elements of our compensation system are intended to provide strong incentives for executive officers to remain employed by us. For example, we provide a non-qualified supplemental retirement benefit to executive officers that requires a minimum of 10ten years of service before any benefit vests and 30 years of service to earn the full benefit provided (50% of base salary per year for 15 years following retirement).

 

The Committee developed its executiveInsteel’s compensation system withphilosophy is intended to further the assistance of an independent consultant, Pearl Meyer & Partners, LLC (“Pearl Meyer”). The consultant reports directly to the Committee and provides a scope of services that is defined by the Committee.

Consistent with the Committee’s policy, Pearl Meyer performed no other services for us during fiscal 2021. The Committee is responsible for establishing the CEO’s compensation, and it reviews and evaluates recommendations from the CEO regarding the compensation of other executive officers. The Committee regularly meets in executive session without members of management present, and solicits input from its consultant as necessary during its deliberations. In connection with its engagement of Pearl Meyer, the Committee conducted a conflict of interest assessment by using the factors applicable to compensation consultants under SEC and NYSE rules. After reviewing these and other factors, the Committee determined that Pearl Meyer was independent and that its engagement did not present any conflicts of interest.

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Following are the features of the compensation system that support the attainment of the Committee’s fundamental objectives:following goals:

 

•	Attract, motivate and retain key executives by providing total compensation opportunities competitive with those provided to executives employed by companies of a similar size and/or operating in similar industries.

In formulating our approach to total compensation, the Committee utilizes peer group data to assess our executive officers’ compensation opportunities against those of similarly situated executives at other companies in similar industries, as well as comparably-sized companies in other industries (as described in “How We Make Executive Compensation Decisions” on page 24). We generally aim to provide total compensation opportunities to our executive officers that are near the median of our peer group. In keeping with our pay for performance culture, we expect our executive officers to deliver overall results that exceed the target level of performance in order to receive above median market compensation. Performance below the target level of performance is expected to result in below median market compensation.

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	In formulating our approach

Back to total compensation each year, the Committee requires its consultant to compile peer group data and benchmark our compensation system against systems of other companies in similar industries, as well as comparably-sized companies in other industries. The objective of our benchmarking process is to provide total compensation opportunities to our executive officers that are near the median of our peer group. Although comparisons to compensation levels in other companies are considered helpful in assessing the overall competitiveness of our compensation practices, the Committee does not believe it needs to adhere precisely to the mathematical median, and it places a relatively greater emphasis on overall compensation opportunities rather than on setting each element of compensation at or near the median for that element.Contents

•	Align executives’ interests with those of our shareholders by closely linking performance-based compensation to corporate performance.
	•	Annual Incentive. Our primary objective is to create shareholder value. To motivate our executive officers and align their interests with those of our shareholders, we provideproviding annual incentives which are designed to reward them for the attainment of short-term goals, and long-term incentives which are designed to reward them for increases in our shareholder value over time.

	•	Annual Incentive. Our primary objective is to create shareholder value. The annual incentive for our executive officers is based entirely on the Company’s return on capital, which is a measure that incorporates both the generation of earnings and the management of the Company’s balance sheet and is closely correlated with long-term shareholder returns.
	•	Long-Term Incentives. Our long-term incentives are entirely equity-based, comprised of 50% RSUsrestricted stock units (“RSUs”) and 50% stock options. Use of these equity-based incentives ensures that their value is directly linked to changes in the price of our common stock. Following much consideration, we believe that time-based vestingstock and inherently performance-based. In addition, these awards build ownership among our executives and help to promote commonality of equity awards is most appropriate for us in view of the highly volatile nature ofinterest between our markets and financial performance,executives and our policy of making no subjective adjustments to the annual incentive when we do not achieve our return on capital targets. Our long-term incentive program does not include a cash component.shareholders.

•	Encourage long-term commitment to the Company.

We believe that the value provided by our executives increases over time as they become increasingly knowledgeable about our industry, customers and competitors, as well as our business processes, people and culture. We believe that providing incentives for executive officers to remain with the Company will enhance its long-term value. Accordingly, we include elements such as our Supplemental Retirement Plan (“SRP”) and Change in Control Severance (“CIC”) Agreements as components of our executive compensation program to provide such incentives. The full benefit under our SRP is not earned until an executive officer is employed by us for 30 years, and the minimum benefit under these agreements requires ten years of service. We believe that our long-term equity incentives, which fully vest over a three-year period, are also a key element of our effort to ensure retention of our key executives.

•	We believe that the value provided by employees increases over time as they become increasingly knowledgeable about our industry, customers and competitors, as well as our business processes, people and culture. We believe that providing incentives for executive officers to remain with the Company will enhance its long-term value. Accordingly, we include programs such as our Supplemental Retirement Plan (“SRP”) and Change-in-Control Severance Agreements as components of our executive compensation system to provide such incentives. The full benefit under our SRP is not earned until an executive officer is employed by us for 30 years, and the minimum benefit under these agreements requires 10 years of service. We believe that our long-term incentives are also a key element of our effort to ensure retention of our key executives.
•	Administrative simplicity and direct line of sight to performance.
	Each component of the Company’s compensation program is formulaic and focused on creating short-term and long-term shareholder value. The absence of subjective and behavioral criteria in the plan simplifies administration and promotes clear line of sight for participants between performance and their compensation.

 

Each component of the Company’s compensation program is formulaic and focused on creating short-term and long-term shareholder value. The absence of subjective and behavioral criteria in the plan simplifies administration and promotes clear line of sight for executives between performance and their compensation.

III.   How We Make Executive Compensation Decisions

The Committee, advised by its independent compensation consultant, is responsible for overseeing and approving the compensation program for our executive officers.

Pearl Meyer & Partners, LLC (“Pearl Meyer”) serves as the Committee’s executive compensation consultant. Pearl Meyer was engaged by, and reports directly to the Committee, and the Committee has the sole authority to terminate or replace Pearl Meyer at any time. Pearl Meyer assists in the development of compensation programs for our executive officers and our non-employee directors by providing compensation information from our peer group companies, relevant market trend data, information on current issues in the regulatory environment, recommendations for program design and best practices and corporate governance guidance.

The Committee realizes that it is extremely valuable to receive objective advice from its compensation advisors. Prior to the retention of a compensation consultant or any other external advisor, and from time to time as the Committee deems appropriate (but at least annually), the Compensation Committee assesses the independence of the advisor from management, taking into consideration all factors relevant to the advisor’s independence, including the factors specified in NYSE listing standards. The Committee has assessed the independence of Pearl Meyer based on these criteria and concluded that Pearl Meyer’s work for the Committee does not raise any conflict of interest.

Pearl Meyer provides the Committee and our Chief Executive Officer with information about the compensation competitiveness of our executive officers. Our Chief Executive Officer uses this information to make recommendations to the Committee regarding compensation of these officers, other than himself, and Pearl Meyer provides guidance to the Committee about those recommendations. Pearl Meyer also makes independent recommendations to the Committee regarding the compensation of our Chief Executive Officer without the involvement of management. The Committee uses this information and considers these recommendations in making decisions about executive compensation for all our executive officers. All decisions regarding compensation of our executive officers are made solely by the Committee.

The Committee does not generally make regular annual adjustments in pay. Instead, the Committee uses judgment when making compensation decisions and reviews executive pay from a holistic perspective, including reference to compensation peer group pay practices and norms, general industry pay levels as gathered from publicly-available survey sources, individual performance, experience, strategic importance of the position to Insteel and internal equity considerations. Other than adjustments relating to Mr. Jafroodi’s promotion to Vice President, Chief Financial Officer and Treasurer in January 2023, our named executive officers’ compensation was last adjusted in the third quarter of fiscal 2022.

To determine what constitutes a “competitive” compensation package, the Committee generally considers the total compensation opportunities for executives at our peer group companies. Because of significant differences in the pay practices of our peer group companies, the Committee does not view this market data as a prescriptive determinant of individual compensation. Rather, it is used by the Committee as a general

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guide in its decisions on the amount and mix of total target direct compensation. Ultimately, executive officer compensation is based on the Committee’s judgment, considering factors described elsewhere in this Compensation Discussion and Analysis that are particular to Insteel and our executive officers, including, most importantly, actual performance.

The custom peer group constructed by the Committee and used by Pearl Meyer to benchmark the most recently implemented compensation changes consisted of the following publicly traded companies:

III.Company Name	Elements of CompensationTicker		Company Name	Ticker
Quanex Building Products Corp.	NX		Northwest Pipe Co.	NWPX
Gibraltar Industries, Inc.	ROCK		PGT Innovations, Inc.	PGTI
Simpson Manufacturing Co.	SSD		TimkenSteel Corporation	TMST
Eagle Materials, Inc.	EXP		Ampco-Pittsburgh Corporation	AP
L.B. Foster Company	FSTR		Ascent Industries Co.	ACNT
United States Lime & Minerals, Inc.	USLM		Titan Machinery, Inc.	TITN
Apogee Enterprises, Inc.	APOG

 

Our executive compensation system is comprised

IV.   Elements of base salary; our ROCICP, which provides for annual incentive payments; long-term incentives (consisting of RSUs and stock options); a supplemental retirement plan provided through individual agreements with each executive officer; Change-in-Control Severance Agreements and (in the case of our CEO) a Severance Agreement, each of which specifies payments and benefits upon, respectively, a change in control and involuntary termination; and certain other benefits such as medical, life and disability insurance and participation in the Company’s 401(k) retirement savings plan. We do not provide significant perquisites to executive officers.

Compensation

 

A brief description of each element of our executive compensation systemprogram and the objective of each element is set forth below.

 

Compensation Element	Description	Objective
Base Salary	Fixed cash compensation.compensation	•  Provide basic levelProvides a foundation of income.
•  Compensate executive officerscash compensation for fulfilling basicthe fulfilment of fundamental job responsibilities.
•  Provide base pay commensurate with median salaries of peer group.
•  Attract and retain key executive officers.responsibilities
ROCICP Annual Incentive Program	VariablePerformance-based cash compensation paid pursuant to a plan in which all of our sales and administrative employees participate.determined based on Company performance against pre-established targets	•Align executive compensation with shareholder interests through the payment of an incentive that is based on return on capital, a metric closely correlated with the creation of shareholder value.
value •Reward executive officers based on actual returns generated relative to the Company’s cost of capital.capital
Long-Term Incentives	VariableEquity compensation granted 50% as RSUs (normally vesting(vesting after three years) and 50% as stock options (normally vesting(vesting one-third each year for three years).	•Further align executive compensation with long-termlong- term shareholder interests by linking the value of these incentives to changes in the Company’s common stock price.
price •Aid in retention and encourage long-term commitment to the Company.Company
Supplemental Retirement Plan (“SRP”)	Non-qualified retirement plan providing additional income for 15 years following retirement to executive officers who meet age and service requirements for 15 years following retirement.	•Aid in retention and encourage long-term commitment to the Company.
Company •Compensate for federal limits on contributions to qualified retirement plans.plans
Severance/Change-in-ControlChange in Control Severance (“CIC”) Agreements	Our CEO has a severance agreement that specifies payments to him in the event of involuntary termination. All executive officers have CICContractual agreements specifying theirexecutives’ rights related tofollowing a termination of employment followingin connection with a change in control of the Company.Company (all executive officers) or in the event of involuntary termination (CEO only)	•  Encourage long-term commitment to the Company. Focus executives on shareholder interests.
Support executive retention goals and encourage executives’ independence and objectivity in considering potential change in control transactions •Provide transition assistance in the event of job loss.loss
Other Benefits	Medical, life and disability insurance; 401(k) savings plan.plan	•  Provide insurancePromote wellness and basic retirement benefitssupport executives in attaining financial security as part of the same nature that other Companya broad-based program available to all employees receive.

 

The following discussion below provides more detailed information regarding the elements of our compensation programs for executive officers.

 

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Base Salaries

 

Base salaries are established by the Committee and reviewed, but not necessarily adjusted, annually. Other than adjustments related to Mr. Jafroodi’s promotion to Vice President, Chief Financial Officer and Treasurer in January 2023, our executive officers’ base salaries were last adjusted in the third quarter of fiscal 2022. In establishing and adjusting base salaries, the Committee considers the following factors:

 

•	Thethe executive’s performance;
•	Thethe executive’s responsibilities;
•	Thethe strategic importance of the position;
•	Competitivecompetitive market compensation information;
•	Skills,skills, experience and the amount of time the executive has served in the position; and
•	Thethe Company’s recent performance and current business outlook.

 

The annual base salaries for our named executive officers for fiscal 2023 are set forth below:

Executive Officer	Base Salary
H. O. Woltz III	$700,000
Scot R. Jafroodi	$310,000*
Mark A. Carano	$370,000**
Richard T. Wagner	$370,000
James R. York	$270,000
James F. Petelle	$275,000

*	Reflects Mr. Jafroodi’s base salary effective January 2, 2023, when he was promoted to Vice President, Chief Financial Officer and Treasurer and became a named executive officer.
**	Mr. Carano resigned effective December 30, 2022.

Annual Incentives

 

The annual incentive compensation ofopportunity for our executive officers is based on our financial performance pursuant to the terms of our ROCICP. This plan also applies to allAll of our sales and administrative employees also participate in this plan, with target annual incentive payments ranging from 10% to 70%100% of annual base salary during fiscal 2021, and payments capped at twice the target incentive level. Based on peer group information, the Committee believes our annual incentive opportunity for executive officers at targeted award levels, when added to base salary levels, brings potential total cash compensation near the median total cash compensation for our peer group. When the annual incentive is at maximum

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levels, reflecting excellent Company performance, the potential total cash compensation would be above the median for our peer group. The Committee believes this balance between base salaries and annual cash incentives is appropriate, in that our executive officers’ cash compensation will be near the median for our peer group only if our short-term goals are achieved, and our goal is that such compensation exceeds the median in the event of superior performance during the fiscal year.

 

For fiscal 2021, we calculated2023, the Committee established our weighted average cost of capital (“WACC”), for purposes of calculating incentive awards under the ROCICP, to be 9.5% based on a weighted average of (i) our after-tax interest rate for debt and (ii) the after-tax return that we believe would be expected by a prudent investor in our stock (which our Committee set at 9.5%).stock. Attaining a return equal to our WACC would have resulted in the payout of incentive compensation at the target bonus level. The performance level at which the maximum incentive payment would be earned was set at 14.5% of the beginning of the year invested capital (WACC + 5%) while the minimum threshold at which an incentive payment would be earned was set at 4.5% of the beginning of year invested capital (WACC - 5%). The actual return on our WACCcapital as calculated under our ROCICP for fiscal 20212023 was 36.9%9.1% resulting in incentive payments to our executive officers at 200%93.5% of the targeted amounts.

 

The target, maximum and actual payout levels for each named executive officer under the ROCICP for fiscal 2023 are set forth below:

Executive Officer		Target (% of base salary)		Target		Maximum		Actual
H. O. Woltz III		100%		$700,000		$1,400,000		$654,500
Scot R. Jafroodi		60%		$186,000		$372,000		$153,341*
Mark A. Carano		60%		$222,000		$444,000		—**
Richard T. Wagner		60%		$222,000		$444,000		$207,570
James R. York		60%		$162,000		$324,000		$151,470
James F. Petelle		60%		$165,000		$330,000		$154,275

*	Mr. Jafroodi’s ROCICP target opportunity was increased from 40% of base salary to 60% of base salary as a result of his promotion to Vice President, Chief Financial Officer and Treasurer effective January 2, 2023. His actual fiscal 2023 ROCICP payment was prorated to reflect the change in his base salary and ROCICP opportunity as a result of this promotion.
**	Mr. Carano resigned effective December 30, 2022, and was ineligible to receive an ROCICP payment for fiscal 2023.

For fiscal 2022,2024, the Committee determined that the WACC, for purposes of the ROCICP, will again be 9.5%,10.0% based on current estimates of the Company’s cost of debt and equity and its anticipated capital structure.

 

The Committee believes that return on invested capital is the most appropriate metric for theour executives’ annual incentivesincentive opportunity in that it is driven off both the generation of earnings and responsible management of our balance sheet, and it is closely correlated with the creation of shareholder value. Since responsible management of our assets is an integral component of the annual incentive calculation, the Committee believes that use of this program inherently restrains excessive risk-taking on the part of management. The amounts earned annually under the ROCICP are established strictly by formula. The ROCICP does not provide for adjustments to the annual incentive based on subjective factors.

 

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The ROCICP provides that,Pursuant to the terms of our Clawback Policy for Executive Officers, if we are required to file an accounting restatement with the SEC to correct an error in the event of a material restatement of earnings, the Board has the right topreviously issued financial statements, then we will recover payments previously made under the ROCICP, or to reduce future payments. In making a determination whetherfrom our current and from whom to recover previously paid awards, or to reduce future awards, the Committee will consider the magnitude of the restatement, the reason for the restatement, the role played by anyformer executive officers inany incentive-based compensation received by those executives during the actions and decisions leadinglast three fiscal years that exceeds the amount of incentive-based compensation that otherwise would have been received by the executive had it been determined based on the restated amounts, computed without regard to the restatement as well as any other factors the Committee deems relevant.taxes paid.

 

Long-Term Incentives

 

Our executives’ long-term incentives areincentive opportunity is entirely equity-based, consisting of 50% RSUs and 50% stock options. Prior to fiscal 2015, these awards were granted under our 2005 Equity Incentive Plan, as amended. On February 17, 2015 our shareholders approved our 2015 Equity Incentive Plan (the “2015 Plan”), which was amended by our shareholders on February 11, 2020, and equity awards since 2015 have been made under the 2015 Plan. All long-term equity incentives granted to our executive officers during fiscal 2021 were granted under the 2015 Plan. The targeted amount of the awards was established by the Committee early in fiscal 2007 based on input from our independent consultant at that time, Mercer. Targeted amounts for Messrs. York and Carano were established by the Committee prior to their respective hire dates. These targeted amounts were most recently reviewed by the Committee early in fiscal 2021 and were maintained during fiscal 2021 at the same rate. The targeted value of the long-term incentives for each executive officer during fiscal 2021 was as follows: Mr. Woltz: $600,000; Mr. Carano: $250,000; Mr. Wagner: $275,000; Mr. Petelle: $150,000; and Mr. York: $110,000.2023 is set forth below:

Executive Officer	Target Value
H. O. Woltz III	$700,000
Scot R. Jafroodi	$250,000*
Mark A. Carano	$250,000**
Richard T. Wagner	$275,000
James R. York	$150,000
James F. Petelle	$150,000***

*	Reflects Mr. Jafroodi’s target long-term incentive opportunity effective January 2, 2023, when he was promoted to Vice President, Chief Financial Officer and Treasurer and became a named executive officer.
**	Mr. Carano resigned effective December 30, 2022 and did not receive any long-term incentive awards in fiscal 2023.
***	Mr. Petelle retired effective September 30, 2023 and received pro-rated long-term incentive awards for fiscal 2023.

 

The RSUs and stock options are awarded in two equal tranches, with the first tranche effectivegranted on the date of our February annual meeting of shareholders meetingeach February and the second tranche effective on the date that is six months after the annual shareholdersdate of such meeting. These dates are typically about three weeks after the announcement of our quarterly financial results. The Committee believes that providing these awards on predetermined dates that closely follow the reporting of our quarterly financial results is the most appropriate approach. RSUs generally vest after three yearson the third anniversary of the grant date and stock options generally vest one-third each year for three years. Generally, stockon the anniversary of the grant date. Stock options and RSUs are subject to forfeiture if an executive officer leaves our employ for reasons other than death, disability or retirement prior to vesting or lapse of restrictions.vesting.

 

The number of RSUs and stock options to be awarded to each of our executive officers on each grant date is calculated based on the closing stock price on such date. For example,The strike price of the target value of long-term incentives granted to Mr. Woltz during fiscal 2021 was established by the Committee at $600,000. Accordingly, Mr. Woltz received the awards of RSUs and stock options in the amounts shown belowto be awarded to our executive officers on each grant date is based on the dates indicated.closing price on such date and the number of options to be granted is calculated based on their aggregate fair value on that date. Since the value of each grant of options and RSUs is pre-determined by the Committee, and the awards occur on pre-established dates, management does not participate in the process of granting these options and RSUs.

 

Date		Type of Grant		No. of Units		Closing Price		ASC Topic 718 Grant Date Value
2/16/21		RSUs		5,097		$29.43		$150,005
2/16/21		Stock Options		12,165		$29.43		$149,994
8/16/21		RSUs		3,583		$41.87		$150,020
8/16/21		Stock Options		8,656		$41.87		$150,008

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The value of each share of Company stock subject to a stock option was established with the assistance of a financial consultant retained by us to calculate the value of our option grants for financial reporting purposes using a Monte Carlo option valuation model. The value of each share of stock subject to a grant of option was established at $12.33 per option share on February 16, 2021 and at $17.33 per option share on August 16, 2021.

Retirement Benefits

Our executive officers each participate in theour 401(k) “defined contribution”retirement savings plan that is available to substantially all our employees. Under this plan, the Company will match 100% of salary deferrals on the first 1% of the participant’s eligible compensation and 50% of the next 5% of eligible compensation. However, Internal Revenue Service (“IRS”) regulations place significant limits on the ability of our executive officers to defer the same portion of their compensation as other participants. To help compensate for these limits, but in a manner that provides significant incentives for executives to remain employed by us, the Committee has established the SRP, which is implemented through individual agreements in which certain of our executives, including all our executive officers, participate. An executive officer is eligible for the full benefit under the SRP if the executive officer remains employed by us for a period of at least 30 years. In that case, we will pay the executive officer, during the 15-year period following the later of (i) retirement or (ii) reaching age 65, a supplemental retirement benefit equal to 50% of the executive officer’s average annual base salary for the five consecutive years in which he or she received the highest base salary in the 10ten years preceding retirement.

An executive officer may receive reduced benefits under the SRP if the executive officer retires prior to completing 30 years of service, so long as the executive has reached at least age 55 and has completed at least 10ten years of service. If the executive officer does not complete 10ten years of service, no benefit is paid under the SRP. If the executive officer completes at least 10ten years, but less than 30, the amount of the benefit will be reduced by 1/360^th for each month short of 360 months that the executive officer was employed by us.

Under the SRP, we also provide for pre-retirement disability and death benefits. The disability benefit is payable to an executive officer if, due to disability, the executive officer’s employment terminates before reaching “normal retirement age” as defined for Social Security purposes, or completing 30 years of service. In this event, we would pay the executive officer, during the 10-yearten-year period following the date of disability, a supplemental retirement benefit equal to the early retirement benefit described in the preceding paragraph, except that such early retirement benefit, when added to the benefits received (if any) by the executive officer under our long-term disability insurance plan for employees, may not exceed 100% of the executive officer’s highest average annual base salary for five consecutive years in the 10-yearten-year period preceding the date on which his disability occurred. If the long-term disability insurance payments end prior to the end of the 10-yearten-year period, the pre-retirement disability benefit will continue for the remainder of the 10-yearten-year period in an amount equal to 50% of the executive officer’s highest average annual base salary for five consecutive years in the 10-yearten-year period preceding the date on which the executive officer’s disability occurred.

The death benefit is payable in the event that the executive officer dies while employed by us. In this event, we will pay to the executive officer’s beneficiary, for a term of 10ten years following the executive officer’s death, a supplemental death benefit in an amount equal to 50% of the executive officer’s highest average annual base salary for five consecutive years in the 10-yearten-year period preceding the date of his or her death.

Change-in-Control

Change in Control Severance (“CIC”) Agreements

We have entered into change-in-control severance agreementsCIC Agreements with each of our executive officers. These agreements specify the terms of separation in the event thatif termination of employment occurs following a change in control. These agreements are considered “double-trigger” change-in-control severance agreements, since no benefits are payable under them unless both a change in control and loss of employment occur. The initial term of each agreement is two years, and the agreements automatically renew for successive one-year terms unless we or the executive officer provides notice of termination. The agreements do not provide assurances of continued employment, nor do they specify the terms of an executive officer’s termination should the termination occur in the absence of a change in control.

The Committee first provided change-in-control severance agreements to our executive officers in May 2003 because it believed that such agreements should be provided to individuals serving in executive positions that can materially affect the consummation of a change-in-control transaction and are likely to be materially affected by a change in control.

These agreements are consistent with the Committee’s overall objective of aligning the interests of executive officers and shareholders in that they provide protection to the executive officers in the event of job loss following a transaction. Absent this protection, the executive may be distracted by personal uncertainties and risks in the event of a proposed transaction or may not vigorously pursue certain transactions that would benefit shareholders due to potential negative personal consequences.

Under the terms of these agreements, in the event of termination within two years of a change in control, Mr. Woltz would receive severance benefits equal to two times base salary, plus two times the average bonus for the prior three years and the continuation of health and welfare benefits (including payment of premiums for “COBRA” coverage) for two years following termination. Messrs. Jafroodi, Carano, Wagner, PetelleYork and YorkPetelle would receive severance benefits equal to one times base salary, plus one times the average bonus for the prior three years and the continuation of health and welfare benefits (including payment of premiums for “COBRA” coverage) for one year following termination. In addition, all stock options and RSUs outstanding immediately prior to termination would vest and, in the case of options, become exercisable for the remainder of the term provided for in the original agreement relating to each grant of options. Finally, we would pay up to $15,000 for outplacement services for Messrs. Woltz, Carano, Wagner, Petelle and York.

The termseach of the change-in-control severance agreements were based on prevailing practice at the time the agreements were executed, and are responsive to market forces affecting securing

and retaining the services ofour executive officers. The Committee determined to provide relatively greater change-in-control severance benefits for Mr. Woltz, our CEO, because it believed he would likely be most engaged in any negotiations leading to a transaction that would result in a change in control, and that he would be less likely to retain his position following a change in control.

Any termination benefits payable under a change-in-control severance agreementCIC Agreement are subject to reduction, if necessary, to avoid the application of the “golden parachute” rules of Section 280G and the excise tax imposed under Section 4999 of the Internal Revenue Code. The agreements do not provide for a “gross up” of any payments to cover any tax liability that may be imposed on our executive officers.

The CIC Agreements for Mr. Carano and Mr. Petelle terminated upon their departures from the Company on December 30, 2022, and September 30, 2023, respectively.

The Committee periodically reviews the payments that could be received by executive officers pursuant to their respective Severance CIC Agreements but does not consider the amount of the potential benefits under these agreements when it establishes the elements of each executive officer’s ongoing compensation.

Severance Agreement

We have a severance agreementSeverance Agreement with Mr. Woltz. The severance agreementSeverance Agreement provides certain termination benefits in the event thatif we terminate the employment of Mr. Woltz without cause (as defined in the severance agreement)Severance Agreement). The severance agreementSeverance Agreement provides for automatic one-year renewal terms unless we or Mr. Woltz provide prior notice of termination.

We first entered into the severance agreement with Mr. Woltz in December 2004. At that time, the Committee concluded that Mr. Woltz, who was leading efforts to restructure the Company, required additional protection in the event that he lost his position under circumstances in which he would not be entitled to benefits under his change-in-control severance agreement.

Mr. Woltz would not be entitled to termination benefits under a severance agreement (i) if his employment with us is terminated for cause, or (ii) if he is entitled to receive benefits under the change-in-control severance agreementhis CIC Agreement described above.

Under the terms of the severance agreement,Severance Agreement, if Mr. Woltz was terminated without cause, he would receive a lump sum severance payment equal to one and one-half times his annual base salary and the continuation of health and welfare benefits (including payments of premiums for “COBRA” coverage), for 18 months following termination. In addition, all stock options and RSUs outstanding immediately prior to termination would vest and, in the case of options, become exercisable for the remainder of the term provided for in the original agreement relating to each grant of options. Finally, we would pay up to $15,000 for outplacement services for Mr. Woltz. At the time this agreement was entered into, the Committee believed its terms were comparable to those provided to senior officers of similar public companies.

Any termination benefits payable under a severance agreementMr. Woltz’s Severance Agreement are subject to reduction, if necessary, to avoid the application of the “golden parachute” rules of Section 280G and the excise tax imposed under Section 4999 of the Internal Revenue Code.

TheWe first entered into the Severance Agreement with Mr. Woltz in December 2004. At that time, the Committee periodically reviewsconcluded that Mr. Woltz, who was leading efforts to restructure the paymentsCompany, required additional protection in the event that couldhe lost his position under circumstances in which he would not be received by executive officers pursuantentitled to their respective severance and change-in-control severance agreements, but does not consider the amount of the potential benefits under these agreements when it establishes the elements of each executive officer’s ongoing compensation.his CIC Agreement.

Broad-Based Employee Benefits

Our executive officers participate in employee benefit plans that are offered to all employees, such as health, life and disability insurance and our 401(k) retirement savings plan. Our salaried employees are entitled to designate a beneficiary who will receive a death benefit in the event of the employee’s death while employed by us. The amount of the death benefit is determined by the employee’s salary grade. The death benefit payable to beneficiaries of each of our executive officers is $500,000. We maintain “split dollar” life insurance policies on a broad group of employees, including each of our executive officers, to fund the payment of the death benefit. Proceeds of these policies are payable to us.

Our broad-based employee benefit programs are reviewed periodically to ensure that these programs are adequate based on competitive conditions as well as cost considerations.

Peer Group

As previously noted, we adjusted the compensation of our executive officers at the end of the first quarter of fiscal 2021. The custom peer group constructed by the Committee and used by the consultant to benchmark the compensation changes that were implemented at that time consisted of the following publicly-traded companies:

Executive Compensation Committee Report

The Executive Compensation Committee of the Company’s Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with Company management. Based on this review and discussion, the Executive Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for fiscal 2021.2023.

This Executive Compensation Committee report shall be deemed furnished in our Annual Report on Form 10-K for fiscal 2021,2023, is otherwise not incorporated by reference into any of our previous filings with the SEC and is not to be deemed “soliciting material” or incorporated by reference into any of our future filings with the SEC, irrespective of any general statement included in any such filing that incorporates the Annual Report on Form 10-K referenced above or this proxy statement by reference, unless such filing explicitly incorporates this report.

Executive Compensation Committee

Jon M. Ruth (Chair)

Abney S. Boxley III

Anne H. Lloyd

Joseph A. Rutkowski

G. Kennedy Thompson

Summary Compensation Table

The following table and accompanying footnotes provide information regarding compensation of our Chief Executive Officer, our current Chief Financial Officer, our former Chief Financial Officer and our three other most highly compensated executive officers for the fiscal year ended October 2, 2021.September 30, 2023.

SUMMARY COMPENSATION TABLE