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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
(e) Compensatory Arrangements for Certain Officers.
On
April 9, 2024, the Compensation Committee of the Board of Directors (the “Committee”) of Profire Energy, Inc. (the “Company”) approved the 2024 Executive Incentive Plan (the “EIP”) for Ryan W. Oviatt, the Company’s Co-CEO, Co-President, and CFO, Cameron M. Tidball, the Company’s Co-CEO and Co-President, and Patrick D. Fisher, the Company’s Vice President of Product Development. The EIP provides for the potential award of incentive compensation to the participants based on the
Company’s financial performance in fiscal 2024.If earned, the incentive compensation will be payable in cash and stock, and the stock portion of the incentive compensation is intended to constitute an award under the Company’s 2023 Equity Incentive Plan (the “Plan”).In addition to the EIP, the Board also approved as a long-term incentive plan the grants of restricted stock unit awards to Messrs. Oviatt, Tidball, and Fisher pursuant to the Plan (the “2024 LTIP”).
2024 EIP
Under the terms of the EIP, each participating executive officer has been assigned a target incentive compensation amount for fiscal 2024. The target incentive compensation
amount for Mr. Oviatt is $233,108, the target incentive compensation amount for Mr. Tidball is $233,108, and the target incentive compensation for Mr. Fisher is $80,420 CAD. Under no circumstance can the participants receive more than two times the assigned target incentive compensation.
Participants will be eligible to receive incentive compensation based upon reaching or exceeding performance goals established by the Committee for fiscal 2024. The performance goals in the EIP are based on the Company’s total revenue, EBITDA, and two non-financial factors including revenue source diversification, and safety and other.Each of the revenue, EBITDA, and revenue source diversification performance goals will be weighted 30% while the safety and other goal
will be weighted 10% in calculating incentive compensation amounts.
The incentive compensation amounts earned under the EIP, if any, will be paid 50% in cash and 50% in shares of restricted stock under the Plan. In no event shall the total award exceed 200% of the target incentive compensation amount for each participant, or exceed any limitations otherwise set forth
in the Plan. The actual incentive compensation amounts, if any, will be determined by the Committee upon the completion of fiscal 2024 and paid by March 15, 2025, subject to all applicable tax withholding.
2024 LTIP
The
2024 LTIP consists of total awards of up to 204,651 restricted stock units (“Units”) to Mr. Oviatt, up to 204,651 Units to Mr. Tidball, and up to 36,195 Units to Mr. Fisher, pursuant to two separate restricted stock unit award agreements (collectively, the “Restricted Stock Unit Award Agreements”) to be entered between the Company and each participant.One such agreement will cover 33% of each award recipient’s Units that are subject to time-based vesting, and the other such agreement will cover the remaining 67% of such award recipient’s Units that may vest based on performance metrics. Upon vesting the award agreements entitle the award recipients to receive one share of the Company’s common stock for each vested Unit. The vesting period
of the 2025 LTIP began on January 1, 2024 and terminates on December 31, 2026 (the “Performance Vesting Date”).
The Units subject to time-based vesting, including 68,217 Units to Mr. Oviatt, 68,217 Units for Mr. Tidball, and 12,065 Units to Mr. Fisher, will vest in three equal and annual installments beginning December 31, 2024 and ending on December 31, 2026 if the award recipients’ employment continues with the Company through such dates.
The performance-vesting Units, including up to
136,434 Units for Mr. Oviatt, 136,434 Units for Mr. Tidball, and 24,130 Units to Mr. Fisher, may vest over a three-year performance period beginning January 1, 2024 (the “Performance Period”) based upon the following Company performance metrics:
Performance Metric
Weight
Target
Above Target
Outstanding
Total
Shareholder Return (based on the Company’s closing price of its common stock at the end of the Performance Period relative to its closing price as of the last trading day in 2023)
1/3
26%
47.9%
77.5%
Relative Total Shareholder Return (based on the Company’s ranked performance in closing stock price growth relative to a peer group of companies during the Performance Period)
1/3
Third
Quartile
Second Quartile
First Quartile
EBITDA as a Percentage of Total Revenue
1/3
17.5%
20%
22.5%
One-third of such performance-vesting Units, consisting of 45,478 Units for Mr. Oviatt, 45,478 Units for Mr. Tidball, and 8,043 Units for each of the Total Shareholder Return and Relative Total Shareholder Return metrics and 8,044 Units for the EBITDA metric for Mr. Fisher, may vest for each of the three performance metrics identified
in the table above.The number of Units that will vest for each performance metric on the Performance Vesting Date shall be determined as follows:
a.if the “Target” level for such performance metric is not achieved, none of the Units relating to such performance metric will vest;
b.if the “Target” level (but no higher level) for such performance metric is achieved, 50% of the Units relating to such performance metric will vest;
c.if the “Above Target” level (but no higher level) for such performance metric is achieved, 75% of the Units relating to such performance metric will vest; and
d.if the “Outstanding” level for
such performance metric is achieved, 100% of the Units relating to such performance metric will vest.
The foregoing summary of the 2024 Executive Incentive Plan and the Restricted Stock Unit Award Agreements is qualified in its entirety by the text of the 2024 Executive Incentive Plan and each of the Restricted Stock Unit Award Agreements, which the Company intends to file as exhibits to its Quarterly Report on Form 10-Q for the quarter ending March 31, 2024.
Item
9.01.
Financial Statements and Exhibits
(d) Exhibits
Exhibit Number
Description
104
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
