MPAA Motorcar Parts and Associates Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No.  )

Filed by the Registrant ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

Payment of Filing Fee (Check the appropriate box):

 

Dear Valued Shareholders:

Fiscal 2024 was a period of meaningful accomplishments for Motorcar Parts of America – particularly with regard to strong cash flow generation, the pay down of net bank debt and other initiatives focused on enhancing near- and long-term shareholder value. Highlights include:

Our strategy moving forward includes four major initiatives: 1) to grow sales in all product lines with an emphasis on our branded products, 2) increase gross margins, 3) neutralize working capital, and 4) continue to enhance cash flow generation.

With respect to sales, we have secured large commitments for new business for our three largest product lines and our rotating electrical diagnostic business. In addition, we have ongoing smaller sales gains in most of our product lines. Our focus is on maintaining industry leading service levels for our customers and providing value added services along with superior quality products. Of significant importance, besides gaining market share in all our product lines, we are focused on building national recognition for our professional installer line, Quality Built. This business increased 40% over the past two years. As we increase our share in these key professional installer categories for any one product line, it will enable us to sell our other categories, leading to additional overhead absorption and margin accretion.

With respect to margin accretion, we are focused on two areas: firstly, reducing costs, through efficiency improvements and secondly, on increasing our average price point. Most recently, we reduced our workforce by finalizing the relocation of our Torrance remanufacturing and warehouse facilities, resulting in annualized savings of approximately $7 million, with $6 million to be realized immediately. In addition, we have identified opportunities

for significant margin accretion in our fast-emerging brake product lines. We believe this margin accretion will result in a significant increase to EBITDA. We are continuously evaluating the impact of inflation and interest rates, trying to mitigate these forces with appropriate efficiency improvements and timely price increases.

The neutralization of working capital will continue to be a key area of focus moving forward. As highlighted above, we instituted a vendor supply chain financing program in Fiscal 2024 designed to extend payment terms, while improving cash flow for both valued vendors and the company. The reduction of working capital from this financing program -- coupled with margin accretion from less mature brake-related products and better overhead absorption through increasing volume -- will support growth and additional opportunities to enhance shareholder value. To date, we have added a net 30 days to our days outstanding -- which should reduce working capital by $20 million. While we have had great initial success, we believe this opportunity will add further meaningful value.

All these initiatives, when coupled together, will result in a continual increase in cash generation. We expect cash from profits as well as working capital enhancements.

In short, as Fiscal 2025 evolves, we expect to gain further sales momentum and profitability. Our financial strength, highly regarded product offerings of non-discretionary aftermarket parts and solid customer relationships distinguish our company. Equally important, recent record heat levels throughout the country will certainly contribute to increasing demand as drivers hit the road and parts fail and wear out. We are dedicated to being the industry leader for Parts and Solutions that Move our World Today and Tomorrow and confident in our ability to capitalize on our sizable infrastructure, global footprint, capabilities and expertise.

Our Industry

We are fortunate to operate in an industry that has exciting fundamentals with a predictable future. According to recently available data, there are 289 million vehicles on the road in the United States with an average age of 12.6 years. Along with these increasing car parc statistics, vehicles travel approximately 3 trillion miles per year. Each of these vehicles have critical non-discretionary components that will need replacement due to wear or failure. These statistics grow exponentially when considering the global markets where the car parc exceeds 1.4 billion vehicles.

Our industry is serviced by Original Equipment car companies; three large automotive retailers; and a large network of professional installer distributors. Many of these distributors have a retail presence in their model. We have excellent distribution with a number of OE car companies for their warranty replacement and aftermarket branded offering. In addition, we supply all the retailers and many of the large professional distributors with one or more of our product lines. We have the opportunity for growth within our existing customer base and with new customers. The potential in the United States alone for our product lines is approximately $8 billion at manufacturers sales price, and exponentially greater on a global basis.

Our company has state-of-the-art worldwide leading factories that produce non-discretionary parts for substantially all the car parc. In addition, our factories are now positioned in global low-cost locations. We have cutting edge facilities in Malaysia, Mexico, China, India, Canada and the United States. We can leverage these factories which operate with industry leading manufacturing, quality control and distribution capabilities and know-how, to capture significant market share. Firstly, in the North American marketplace, we have very strong customer relationships and recognition -- leading to other markets throughout the rest of the world. This is evidenced by our recent very early success in the Mexican aftermarket. This strategy is also closely aligned with our existing customer base who are expanding their businesses globally. Our current share in our legacy rotating electrical business in the USA is an industry leading 49%. These products continue to grow and are in particular fast growing in Canada and Mexico. We also have a strong presence in the around the wheel and brake industry. We have recently opened up a new wheel hub factory in Malaysia to enable us to ship customers worldwide directly from this facility, representing a cost-saving considering the impact of relatively smaller imposed tariffs on Malaysian goods.

Over the past few years, we have aggressively expanded our hard parts offering to the brake business. These opportunities have been developed by evaluating the significant growth opportunities, the return on invested capital and knowledge that this category is for the most part technology agnostic. At the initial stages of startup for these product lines, it is natural that margins would be reduced. However, it is our thesis that as we gain share, the opportunity to enhance these margins is real. We are fast approaching inflection points across most of our business to increase margins -- despite continuing inflation headwinds. While we are still in the early stages of proving out our thesis for our brake business, we are convinced that we have an excellent opportunity and that it will result in significant profit and cash flow growth.

We remain focused on our current product offerings and believe growth from these lines will sustain us for years to come.

Committed to the Environment, Social and Corporate Responsibility

Our environmental focus remains an important priority throughout our organization, as we are constantly seeking ways to better manage resources, improve operating efficiencies, and encourage conservation. The automotive aftermarket parts industry has inherent energy-savings benefits compared with the requirements to produce new parts. For example, the remanufacturing process enables us to repurpose a variety of parts and components, utilizing rigorous testing and analysis processes. I might add that we recycled more than 41.8 million pounds of metal scrap, paper and plastic items in Fiscal 2024.

Our state-of-the-art distribution facility is environmentally friendly, serving multiple categories and capable of shipping multiple product lines from a single, low-cost location. This enables our customers to combine purchase orders for different product lines. This capability also allows our customers to reach minimum order levels more easily, while minimizing LTL (less-than-a-truckload) shipments and leveraging freight costs.

We recently completed an energy audit of our 1.1 million square feet facilities in Mexico and are proud to report that the auditors found our systems to be top notch. We will be implementing the auditor recommendations over the next few years to further enhance our energy footprint. To further reduce our environmental footprint, we utilize a highly efficient electric battery charging system to power forklifts. It employs a self-diagnostic design to achieve optimal recharging levels and minimal operator input, requiring significantly less floor space due to its vertical-station design.

We are also passionately committed to social responsibility, including proactive health and safety initiatives to protect employees, offer subsidized food programs, donations to community organizations, sponsorships of sport teams and weekend family events.

With regard to corporate responsibility, we are engaged in a refreshment process of our board. This process, based in part on constructive feedback from shareholders, is ongoing. Our new candidates offer a variety of skill sets, including industry knowledge, corporate governance, public company experience and financial acumen. I look forward to fresh ideas and input from these directors and our renewed board membership.

To reiterate, we have built a scalable platform for growth, with exciting and meaningful opportunities to enhance shareholder value. We greatly appreciate your ongoing support and confidence in our vision.

We are proud of our accomplishments and look forward to reporting further milestones in the quarters ahead.

 

MOTORCAR PARTS OF AMERICA, INC.

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held On September 5, 2024

To Our Shareholders:

We will hold our annual meeting of the shareholders of Motorcar Parts of America, Inc. (the “Company”) on September 5, 2024, at 10:00 a.m. (PT) at the offices of the Company at 2929 California Street, Torrance, California 90503. As further described in the accompanying proxy statement, at this meeting we will consider and act upon:

Our Board of Directors (the “Board”) has fixed the close of business on July 16, 2024, as the record date for the determination of shareholders entitled to vote at the meeting or any meetings held upon adjournment or postponement of the meeting. Only record holders of our common stock at the close of business on that day will be entitled to vote. A copy of our Annual Report on Form 10-K for the year ended March 31, 2024, that we filed with the Securities and Exchange Commission (the “SEC”) on June 11, 2024, and the Form 10-K/A for the year ended March 31, 2024, that was filed with the SEC on June 28, 2024 are enclosed with this notice, but are not part of the proxy soliciting material.

We invite you to attend the meeting and vote in person. If you cannot attend, to ensure that you are represented at the meeting, please sign and return the enclosed proxy card as promptly as possible in the enclosed postage prepaid envelope. If you attend the meeting, you may vote in person, even if you previously returned a signed proxy.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on September 5, 2024.

Our proxy statement and our Annual Report on Form 10-K for the year ended March 31, 2024, that we filed with the SEC on June 11, 2024, and the Form 10-K/A filed with the SEC on June 28, 2024 are available at https://materials.proxyvote.com/620071 and are first being made available on July 26, 2024.

By order of the Board of Directors

 

Juliet Stone, Secretary

Torrance, California

July 26, 2024

YOUR VOTE IS EXTREMELY IMPORTANT

In order to assure your representation at the Annual Meeting, you are requested to vote, at your earliest convenience, by any of the methods described in the accompanying proxy statement. If you decide to attend the Annual Meeting and vote in person, any previous vote by proxy will be revoked automatically and only your vote at the Annual Meeting will be counted.

YOUR vote is extremely important.

If you have questions or need assistance voting your shares, please contact:

 

1407 Broadway, 27^th Floor

New York, New York 10018

proxy@mackenziepartners.com

Call Collect: (212) 929-5500

or

Toll-Free (800) 322-2885

Your vote is extremely important, no matter how many or how few shares you own. Even if you plan to attend the Annual Meeting in person, please promptly sign, date and return the enclosed proxy card in the enclosed postage-paid envelope by following the instructions provided on the enclosed proxy card to be sure that your shares are voted at the Annual Meeting.

TABLE OF CONTENTS

 

MOTORCAR PARTS OF AMERICA, INC.

2929 California Street

Torrance, California 90503

GENERAL INFORMATION

We are making this proxy statement available, on or about July 26, 2024, in connection with the solicitation of proxies by our Board of Directors. The proxies are for use at our annual meeting of shareholders, which we will hold at 10:00 a.m. (PT) on September 5, 2024, at the offices of the Company at 2929 California Street, Torrance, California 90503. The proxies will remain valid for use at any meetings held upon adjournment or postponement of that meeting. The record date for the meeting is the close of business on July 16, 2024. All holders of record of our common stock at the close of business on the record date are entitled to notice of the meeting and to vote at the meeting and any meetings held upon adjournment or postponement of that meeting. Our principal executive offices are located at 2929 California Street, Torrance, California 90503, and our telephone number is (310) 212-7910. The date of this proxy statement is July 26, 2024.

A proxy form is enclosed. Whether or not you plan to attend the meeting in person, please date, sign and return the enclosed proxy as promptly as possible, in the postage prepaid envelope provided, or online at www.proxyvote.com, to ensure that your shares will be voted at the meeting. If you are a shareholder of record, you may revoke your proxies at any time prior to the voting at the meeting by submitting a later dated proxy, giving timely written notice of revocation to our secretary or attending the meeting and voting in person. If you are a holder in street name, you may revoke your proxy by following the specific voting directions provided to you by your bank, broker or other intermediary to change or revoke any instructions you have already provided to your bank, broker or other intermediary.

Unless you instruct otherwise in the proxy, any proxy, if not revoked, will be voted at the meeting:

Our only voting securities are the outstanding shares of our common stock. At the record date, we had 19,753,585 shares of common stock outstanding and approximately 10 shareholders of record. If the shareholders of record present in person or represented by their proxies at the meeting hold at least a majority of our outstanding shares of common stock, a quorum will exist for the transaction of business at the meeting. Shareholders of record who abstain from voting, including brokers holding their customers’ shares who cause abstentions to be recorded, are counted as present for quorum purposes.

For each share of common stock, you hold on the record date, you are entitled to one vote on each of the matters that we will consider at this meeting. You are not entitled to cumulate your votes. Brokers holding shares of record for their customers generally are not entitled to vote on certain matters unless their customers give them specific voting instructions. If the broker does not receive specific instructions, the broker will note this on the proxy form or otherwise advise us that it lacks voting authority. The votes that the brokers would have cast if their customers had given them specific instructions are commonly called “broker non-votes.” Broker non-votes will be counted for purposes of determining whether a quorum is present but will not be counted or deemed to be present or represented for the purpose of determining whether shareholders have approved a matter.

Pursuant to our Amended and Restated Bylaws, the voting standard for the election of directors of the Company in an uncontested election is a majority voting standard. The majority voting standard provides that to be elected in an uncontested election, a director nominee must receive a majority of the votes cast in the election such that the number of shares properly cast “for” the nominee exceeds the number of votes properly cast “against” that nominee, with abstentions and broker non-votes not counting as votes “for” or “against.” “Votes cast” means the votes actually cast “for” or “against” a particular proposal, whether in person or by proxy. In contested elections where the number of nominees exceeds the number of directors to be elected, the voting standard is a plurality of votes cast.

We also have adopted a director election and resignation policy (the “Director Election Policy”). The Director Election Policy requires an incumbent director, in order to be nominated by our Board of Directors for re-election as a director, to tender an irrevocable resignation effective upon (1) the failure to receive the required number of votes for re-election and (2) the acceptance of the director’s resignation by our Board of Directors. The Nominating and Corporate Governance Committee of our Board of Directors will assess the appropriateness of such nominee continuing to serve as a director and will recommend to our Board of Directors the action to be taken with respect to such tendered resignation. The Director Election Policy requires that we promptly disclose the decision of our Board of Directors with respect to the tendered resignation in a filing with the “SEC” of a current report on Form 8-K.

The affirmative vote of a majority of the votes cast at the meeting by the holders of shares entitled to vote is required to approve Proposal No. 2 (ratification of Ernst & Young LLP as our independent registered public accountants for the fiscal year ending March 31, 2025). The affirmative vote of a majority of the votes cast at the meeting by the holders of shares entitled to vote is required to approve, on a non-binding advisory basis, Proposal No. 3 (advisory vote on the compensation of our named executive officers). The affirmative vote of a majority of the votes cast at the meeting by the holders of shares entitled to vote is required to approve Proposal No. 4 (approval of First Amendment to 2022 Incentive Award Plan). An abstention from voting on these matters will be treated as “present” for quorum purposes. However, since an abstention is not treated as a “vote” for or against these matters, it will have no effect on the outcome of the vote. Broker non-votes will not be counted and will have no effect on the outcome of the voting for these matters.

We will pay for the cost of preparing, assembling, printing, and mailing this proxy statement and the accompanying form of proxy to our shareholders, if requested, as well as the cost of soliciting proxies relating to the meeting. We have requested banks and brokers to solicit their customers who beneficially own our common stock in nominee name. We will reimburse these banks and brokers for their reasonable out-of-pocket expenses regarding these solicitations. Our officers, directors and employees may supplement this solicitation of proxies by telephone and personal solicitation. We will pay no additional compensation to our officers, directors, and employees for these activities. We have engaged MacKenzie Partners, Inc. as our proxy solicitor to solicit proxies for us, at an anticipated cost of approximately $25,000. In addition to the use of mail, solicitation may be made by our proxy solicitor or our employees personally or by telephone, facsimile, or electronic transmission.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

On July 25, 2024, each of Mr. Borneo, Chair of the Compensation Committee and Director and Ms. Rankin a Director, notified the Board that they intend to retire from the Board at the expiration of their current term and consequently, will not stand for re-election at the Annual Meeting, although each will remain a member of the Board and in Mr. Borneo’s case the Chair of the Compensation Committee until the conclusion of the Annual Meeting. We are asking our shareholders to elect ten members to serve on our Board of Directors for a one-year term of office or until their respective successors are elected and qualified. Our Board of Directors has nominated the ten individuals named below for election as directors. Each nominee has agreed to serve as a director if elected.

Each of our nominees, Selwyn Joffe, Joseph Ferguson, Philip Gay, Barbara Whittaker, Dr. David Bryan, Jeffrey Mirvis, Douglas Trussler, and Patricia (Tribby) W. Warfield is currently serving as a director, and were elected at our last annual meeting of shareholders. Frederic Jack Liebau Jr. and Anil Shrivastava are not currently serving as a director of the Company. Our directors will hold office until the next annual meeting of shareholders, or until their successors are elected and qualified.

The persons named as proxies in the accompanying form of proxy have advised us that at the meeting, they will vote for the election of the nominees named below, unless a contrary direction is indicated. If any of these nominees becomes unavailable for election to our Board of Directors for any reason, the persons named as proxies have discretionary authority to vote for one or more alternative nominees designated by our Board of Directors.

Pursuant to the Convertible Note Transaction that closed on March 31, 2023 (the “Note Transaction), and at the recommendation of the Nominating and Corporate Governance Committee of the Board, the Board appointed Douglas Trussler to the Board to serve until the Company’s 2024 Annual Meeting of Shareholders, at which he was elected to serve by the Company’s shareholders. The Nominating and Corporate Governance Committee and the Board have determined that, due to the Company’s ongoing obligations related to the Note Transaction, Mr. Trussler is not independent.

The Board of Directors recommends that shareholders vote FOR each of the nominees named below.

 

Information Concerning our Board of Directors and our Nominees to our Board of Directors

The nominees for election to our Board of Directors, their ages and present positions with the Company, are as follows:

Selwyn Joffe, 66, has been our Chairman of the Board of Directors, President and Chief Executive Officer since February 2003. He has been a director of our Company since 1994 and Chairman since November 1999. From 1995 until his election to his present positions, he served as a consultant to us. Prior to February 2003, Mr. Joffe was Chairman and Chief Executive Officer of Protea Group, Inc. a company specializing in consulting and acquisition services. From September 2000 to December 2001, Mr. Joffe served as President and Chief Executive Officer of Netlock Technologies, a company that specializes in securing network communications. In 1997, Mr. Joffe co-founded Palace Entertainment, Inc., a roll-up of amusement parks and served as its President and Chief Operating Officer until August 2000. Prior to the founding of Palace Entertainment, Inc., Mr. Joffe was the President and Chief Executive Officer of Wolfgang Puck Food Company from 1989 to 1996. Mr. Joffe serves on the board of directors of the California, Arizona and Nevada Automotive Wholesaler’s Association (CAWA), an industry trade association. Mr. Joffe was a founding director of MERA (Motor and Equipment Remanufacturers Association). Mr. Joffe is a graduate of Emory University with degrees in both Business and Law and is a Certified Public Accountant. As our most senior executive, Mr. Joffe provides the Board of Directors with insight into our business operations, management and strategic opportunities. His history with our Company and industry experience has led the Board of Directors to conclude that he should serve as a director and Chairman for of our Company.

Dr. David Bryan, 72, joined our Board of Directors on June 9, 2016. Dr. Bryan is a member of our Compensation and Nominating and Corporate Governance Committees. Dr. Bryan currently directs The Center for The Common Good, a joint venture of The Herb Alpert Foundation and New Roads School to incubate creative innovation in business, education and community partnerships. In addition, Dr. Bryan consults privately with several Los Angeles based not-for-profit and for-profit businesses on matters of board and workplace organization, employee training and online education, and generational workplace dynamics. Dr. Bryan is also an active content creator and co-producer for his podcast, Curiosity Invited. Previously Dr. Bryan lectured in the Economics Department of University of

California at Santa Cruz from 2014 to 2020. Dr. Bryan was Co-founder and Founding Head of New Roads School from 1995 to 2013. Dr. Bryan is currently the Chair of the c3 and c4 boards at Los Angeles based Brave New Films. Dr. Bryan received a B.A. from the State University of New York at Stony Brook, an M.S. from the University of California at Los Angeles and a J.D. and Ph.D. from the State University of New York at Buffalo. Dr. Bryan’s extensive experience in the education industry and a variety of businesses, as well as his extensive experience with information security and communication, have led the Board of Directors to conclude that he should serve as a director of our Company.

Joseph Ferguson, 57, joined our Board of Directors on June 9, 2016. Mr. Ferguson is our Lead Independent Director, and a member of our Audit Committee. Mr. Ferguson is a Co-Founder and Managing Partner at Vicente Capital Partners, a Los Angeles-based investment firm providing capital to privately held growth companies across North America. Over the past 28 years, Mr. Ferguson‘s private equity firm has made 65 investments. He has served on numerous boards and has served as Board Chairman and on compensation and audit committees. Prior to co-founding Vicente in 2009, Mr. Ferguson was a partner at Kline Hawkes & Company, which he joined at the firm’s inception in 1995. Mr. Ferguson began his career as an investment banker for Merrill Lynch & Co where he was a member of the Energy and Natural Resources Group and the General Corporate Finance Group. From 1989 to 1994, he worked on over 30 public and private transactions for numerous emerging growth and middle market companies. Mr. Ferguson currently serves on the board of directors of SMT, Intellectual Technology, Inc., and Global LT each of which is privately held. He also serves on the board of directors of Oaktree Strategic Credit Fund and Oaktree Gardens OLP, each a public closed end fund. Mr. Ferguson is a member of the Board of Trustees for The Wildwood School, the Toigo Board of Directors and a member of the Board of Advisors at UCLA Anderson. Mr. Ferguson received a B.B.A in Finance from Southern Methodist University and an M.B.A from the UCLA Anderson School of Management. Mr. Ferguson’s business skills and experience, leadership expertise, knowledge of complex global business and financial matters have led the Board of Directors to conclude that he should serve as our lead independent director of our Company.

Philip Gay, 66, joined our Board of Directors on November 30, 2004. He chairs our Audit Committee. Mr. Gay currently serves as a partner at Paperchase, since October 2022, a global business accounting and advisory service firm that assists mid-cap sized companies with financing, mergers and acquisitions and strategic financing. Mr. Gay sold his firm Triple Enterprises to Paperchase in September 2022, which he had run from October 2010 till then (operating in same key areas). From April 2018 through January 2020, Mr. Gay served as co-CEO of Giggles N Hugs, Inc., a publicly traded company. From March 2015 to May 2015 Mr. Gay served as a director and chief executive officer at Diego Pellicer Worldwide Inc., a publicly traded company. From July 2006 until June 2010, Mr. Gay served as President, Chief Executive Officer and a Director of Grill Concepts, Inc., a company that operates a chain of upscale casual restaurants throughout the United States. From March 2000 to November 2001, Mr. Gay served as an independent consultant with El Paso Energy from time to time and assisted El Paso Energy with its efforts to reduce overall operating and manufacturing overhead costs. Previously he has served as chief financial officer for California Pizza Kitchen (1987 to 1994) and Wolfgang Puck Food Company (1994 to 1996), and he has held various Chief Operating Officer and Chief Executive Officer positions at Color Me Mine and Diversified Food Group from 1996 to 2000. Mr. Gay a retired Certified Public Accountant, was an audit manager at Laventhol and Horwath and a graduate of the London School of Economics. Mr. Gay’s leadership experience, general business and public company knowledge, financial literacy and expertise, accounting skills and competency and overall financial acumen have led the Board of Directors to conclude that he should serve as a director of our Company.

F, Jack Liebau, 60, is nominated for appointment to our Board of Directors. Mr. Liebau has been a director since 2015 and Chairman of NYSE-listed Myers Industries since 2016, a director since 2023 and Chairman of NASDAQ-listed STRATTEC Security Corp. since 2024. He has been a managing director of Beach Investment Counsel since 2020. Mr. Liebau previously was a director of publicly listed Media General, Herley Industries, and Pep Boys. He is also a Director, since its formation in 2020 of the BNY Mellon ETF Trust. Mr. Liebau has been a partner and equity portfolio manager at Primecap Management (1986-2003) where he co-managed two Vanguard Funds, at Liebau Asset (2003-2011), and at Davis Funds (2011-2013). He was President and CEO of Roundwood Asset Management (2013-2015). He is currently CFO and Director of the Edwin Gregson Foundation. He graduated from Phillips Academy, Andover and Stanford University. Mr. Liebau’s vast financial, strategic, and executive experience, working with companies in a variety of industries, along with his public board and governance experience give him pertinent insights to communicate with various constituencies and have led the Board of Directors to conclude that he should serve as a director of our Company.

Jeffrey Mirvis, 60, joined our Board of Directors on February 3, 2009. Mr. Mirvis is a member of our Audit, Compensation and Nominating and Corporate Governance Committees. Mr. Mirvis is currently the Chief Executive Officer of MGT Industries, Inc. (“MGT”), a privately held apparel company based in Los Angeles. As Chief Executive Officer of MGT, Mr. Mirvis successfully moved all production and sourcing to Asia. During his twenty-three year tenure as chief executive, Mr. Mirvis has gained valuable knowledge of manufacturing in Asia. Prior to joining MGT in 1990, Mr. Mirvis served as a commercial loan officer at Union Bank of California following his completion of the Union Bank of California’s Commercial Lending Program. He earned a Bachelor of Arts degree in economics from the University of California at Santa Barbara. He served as a board member of Wildwood School in Los Angeles, for nine years. Mr. Mirvis’ international business experience, operational and production expertise, leadership experience and organizational management have led the Board of Directors to conclude he should serve as a director of our Company.

Anil Shrivastava, 55, is nominated for appointment to our Board of Directors. Mr. Shrivastava was the Founder of 325 Capital in 2020 and is currently its Managing Partner. He has spent 16 years investing in companies and has served on the board of five private companies including three as Chairman. Prior to 325 Capital, Anil was a Partner at Sagard Capital from 2012 – 2018 where he focused on blueprint development, management relationships, and team development. He was also a Managing Director in the Healthcare group at Vestar Capital, a $5B private equity firm, from 2007 - 2023. He spent 15 years at Bain & Company where he was a partner in the Private Equity and Healthcare Practices and supported clients in Boston, Sydney, London, and New York offices. He is currently a Trustee at the New York Hall of Science. Mr. Shrivastava graduated with honors in Economics from Harvard College and earned an MBA at Harvard Business School. Mr. Shrivastava’s extensive financial experience, and detailed understanding of microcap and small cap companies and their investors have led the Board of Directors to conclude that he should serve as a director of the Company.

Douglas Trussler, 53, joined our Board on March 31, 2024. Mr. Trussler was the co-founder of Bison Capital in 2001 and serves as their General Partner of Funds. Mr. Trussler has been responsible for the management of 6 institutional private equity funds totaling more than $1.0 billion in capital commitments from some of the largest institutional investors in the US. Previously, from 1993 to 2000, Mr. Trussler was at Windward Capital Partners LP and at Credit Suisse First Boston. Mr. Trussler is currently a member of the Board of Directors of Sentinel Offender Services, LLC, Silicon Recycling Services, LLC, FinFit, LLC, TwinMed, LLC, Aqua Expeditions, Pte, Ltd., Curtin Maritime, Ocean Media, LLC and Lapmaster Holdings, LLC, all private companies. In the past ten years, Mr. Trussler was formerly a member of the Board of Directors of General Finance Corporation, KeyTech Limited, Ease Entertainment Services, LLC, MVConnect Holdings, LLC, Clinical Research Laboratories, LLC, Performance Team Freight Systems, Inc., Big Rock Sports, LLC, and Global Benefits Group, Inc. In total, Mr. Trussler has served on more than 30 public and private company board in businesses located around the world. Mr. Trussler earned an Honors in Business Administration (HBA) degree from the Ivey Business School at the University of Western Ontario. Other than set forth in the Certain Relationships and Related Transactions section below, there are no transactions between Mr. Trussler and the Company that would be reportable under Item 404(a) of Regulation S-K. Mr. Trussler’s vast financial experience, worldwide and strategic understanding of the aftermarket auto parts space have led the Board of Directors to conclude that he should serve as a director of the Company.

Patricia (Tribby) W. Warfield, 64, joined our Board in January 2022. Ms. Warfield most recently served as the chairman and CEO of APC Automotive Technologies, from 2019 to 2020, overseeing a restructuring and a strategic refocusing of the business on braking and exhaust related products. During Ms. Warfield’s tenure, APC instituted bankruptcy proceedings in the US Bankruptcy Court for the District of Delaware under Chapter 11 of the US Bankruptcy Code on June 4, 2020. APC confirmed its Chapter 11 reorganization on July 10, 2020, effective July 24, 2020. From 2017 - 2019, she served as SVP, business development and strategy for Nitta Corporation, a Japanese global provider of power transmission and conveyor belting products for Europe, Middle East & Africa. Previously, while from 2014 - 2017, Ms. Warfield held dual positions at Kaman Corporation, as SVP and general manager for Kaman Fluid Power and Kaman Automation. Her career includes 25 years, from 1988 - 2013 with the Gates Corporation (NYSE: GTES) including 11 consecutive years in Europe in key executive management and operational positions. Ms. Warfield currently serves on the Canadian publicly-traded board of Badger Infrastructure Solutions Ltd. (BDGI-TSX) where she is a member of the Audit and HR & Compensation Committee as well as a board advisor to four private equity sponsored diversified manufacturing and distribution portfolio companies. She is an advisor board member of the University of Colorado Denver Business School, and formally served as an adjunct professor and guest lecturer at the Daniels College of Business at the University of Denver. She is a member of the Institute of Corporate Directors, as well as The Committee of 200, comprised of the world’s most successful women

entrepreneurs and corporate innovators. Ms. Warfield graduated cum laude with a bachelor’s degree in Business Administration from National University, San Diego. Ms. Warfield’s automotive and manufacturing experience, strategic understanding of our core customer, and strong understanding of markets outside the United States have led the Board of Directors to conclude that she should serve as a director of Company.

Barbara L. Whittaker, 73, joined our Board of Directors on February 21, 2017. Ms. Whittaker chairs our Nominating and Governance Committee. Ms. Whittaker is a business strategist and procurement and supply chain expert with extensive experience in the automotive industry, at original equipment manufacturers, suppliers, and the aftermarket. In 2010 Ms. Whittaker founded BW Limited LLC, which focuses on providing companies business and procurement strategies that lead to improvements in operating performance. She led a majority supplier joint venture team in 2011 that created and launched Detroit Manufacturing systems, a direct supplier to the automotive industry, supplying interior components. She held a position there as Vice President and Corporate Secretary until 2018. Her more recent work with companies has been in business strategy development, joint venture creation and diversity development in the business and non-profit sectors. Her career started with General Motors Corporation and Delphi Automotive where she held leadership positions of increasing responsibility over many years both in the United States and in Europe. Prior to her retirement from General Motors, Ms. Whittaker’s position was Executive Director of Global Purchasing. Ms. Whittaker holds a Bachelor of Industrial Administration degree from General Motors Institute (now Kettering University), MBA degree from Wayne State University, and has also completed the Advanced Management Program at INSEAD in France, and the Executive Development program at University of Michigan. In addition to this formal education, she holds Six Sigma Green Belt certification and has completed the Kellogg, Women’s Director Development Program. She currently serves on the board of directors of Hall Capital Partners and has also held board positions at ChanelNet, Detroit Manufacturing Systems, a $1 billion revenue company, and Piston Group in the past, each of which is privately held. Ms. Whittaker’s automotive experience, supply chain expertise, global leadership experience and strategy development skills have led the Board of Directors to conclude that she should serve as a director of the Company.

The following tables provide summary information about our director nominees. Additional information about our director nominees can be found above in their biographies.

(C) Committee Chair

Corporate Governance Overview

Our corporate governance policies and practices reflect our values and allow our Board to effectively oversee the Company in the interest of creating long-term value. The key elements of our program and their benefits to our shareholders are described below.

Our Core Values

The mission of MPA is to be The Global Leader for Parts and Solutions that Move Our World Today and Tomorrow — driven by an EPICQ set of core values embraced by our employees and directors:

E – Excellence

P – Passion / Productivity

I – Integrity / Innovation

C – Community

Q – Quality

Environmental, Social Responsibility and Corporate Governance

The Company is a dedicated, responsible corporate citizen and an environmental leader, with policies focused to better manage resources, improve operating efficiencies, and promote conservation.

Highlights of MPA’s ESG Commitments:

Our Climate Change Commitment

As a remanufacturer of auto parts, the Company has always been committed to environmental responsibility and stewardship of the land. The Company recently finalized its collection of Scope 1 and Scope 2 emissions (though they have not yet been audited by a third party). The Company’s Scope 1 and Scope 2 emissions in 2022, were 15,758.93 tCO2e₂. In 2023, the Company’s Scope 1 and Scope 2 emissions, reduced by 12% to 13,868.18 tCO2e₂. Our emission intensity per million dollars of revenue is 19.32 tCO2e₂ which is a quarter of the emission intensity of our peer group, based on last year’s data. MPA is very proud of our environmental footprint and the Company is dedicated to continual improvement.

Our Environmental Commitment in Practice

Since its establishment in 1968, environmental and sustainable processes have been a hallmark of the Company.

With the potential to reduce material and energy consumption by up to 95 percent, industry sources believe that remanufacturing is the most efficient and sustainable process for producing aftermarket replacement parts, making MPA’s business practices green by nature, supported by the processes noted below. The Company recently completed an energy audit of our Mexican Facilities and will implement the recommendations over the next few years to improve our already low environmental footprint further.

Highlights of the Company’s eco-friendly remanufacturing processes and its industry leadership, include:

How Remanufacturing Can Address Climate Change

The remanufacturing process preserves the energy required in forging and forming durable components, an advantage to recycling alone; and it allows for recycling of metal scrap, such as copper, aluminum, and steel. Equally important, by reclaiming and reconditioning components, the remanufacturing process also conserves the energy and materials that would be required to create new parts. Manufacturing one new starter for instance requires more than ten times the amount of energy and nine times the number of materials compared with producing remanufactured parts. Manufacturing a new alternator requires approximately seven times the amount of energy and eight times the amount of raw material necessary to produce a remanufactured part. One recent study found that a remanufactured brake caliper saves 95% of the raw materials by weight of new manufacturing and can be completed at least twice with the same core, leading to additional life cycle savings. As highlighted above, the Company reduced raw material usage in manufacturing by nearly 88,632 tons in Fiscal 2024 through its remanufacturing and recycling process. The energy savings translates into lower carbon dioxide output and overall lower consumption. In fact, industry sources estimate, remanufactured products conserve roughly the equivalent of 400 trillion BTUs of energy per year. The remanufacturing process and recycling employed by MPA takes real steps to mitigate the effects of climate change, by drastically reducing the greenhouse gas emissions that are normally generated by producing new parts.

Committed to Social Responsibility in Action

Motorcar Parts of America is firmly committed to social responsibility. Safety, respect and inclusion have always been fundamental to the Company and is part of our core values. Medical professionals are onsite or within close proximity to the Company’s operations, to ensure the health of our staff. In addition, socially responsible initiatives include subsidized food programs for certain employees and donations to community organizations, sponsorship of sport teams and weekend family events.

Human Rights Policy

As part of our Supplier Code of Conduct, suppliers are required to acknowledge compliance with MPA’s polices, and state, federal and international law, as applicable. MPA expects its suppliers to comply with all applicable laws, rules, and regulations, including, without limitation, the specific laws, rules, and regulations referenced below, and to refrain from any illegal conduct, including, without limitation, conduct that is illegal under the U.S. Foreign Corrupt Practices Act and applicable foreign anti-bribery laws. The Company expects its domestic and international suppliers to abide by the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC) – Sanctions Programs.

Health and Safety

MPA’s operations in Torrance, California follows all local, state, and federal laws, rules, regulations and ordinances. Accordingly, management conducts ongoing audits, evaluations and reports for each of our subsidiaries. Our wholly

owned Mexican subsidiaries’ health and safety policies meet and/or exceed applicable local and federal regulations and laws. They are also shared with, reviewed annually and supported by union, Sindicato Mexico Moderno. Our wholly owned Canadian subsidiaries’ health and safety policies are reviewed and approved annually by management teams, as per the ESA and the Ontario Occupational Health & Safety Act. Monthly and quarterly meetings and inspections are conducted with the Company's safety committees. Management reviews all health and safety issues monthly and creates a report. Our operations in Malaysia follow similar procedures and comply with local laws and regulations including health and safety requirements.

Governance Policies and Guidelines

We have adopted a Code of Business Conduct and Ethics that provides policies for various matters relating to the conduct of our business, including the following key matters:

We have adopted an Insider Trading Compliance Policy that provides policies for various matters relating to the trading of our stock, including the following key matters:

We have adopted a charter for the Nominating and Corporate Governance Committee Charter that provides an overview of the responsibilities and policies used by the Nominating and Corporate Governance Committee, including the following key matters:

The Code of Business Conduct and Ethics is filed with the SEC and a copy is posted on our website at www.motorcarparts.com. We intend to disclose future amendments to certain provisions of the code, or waivers of such provisions granted to executive officers and directors, on our website within four business days following the date of such amendment or waivers. We will provide a copy of the Code of Business Conduct and Ethics to any person without charge, upon request addressed to the Corporate Secretary at Motorcar Parts of America, Inc., 2929 California Street, Torrance, CA 90503. Our Board has adopted a number of other policies and guidelines that are intended to ensure good governance and the alignment of interests between the directors and management, on the one hand, and shareholders on the other. Among the written policies are:

Related Person Transaction Policy. This policy makes certain material transactions between a company and related persons subject to approval or ratification in order to avoid conflicts of interest or the perception thereof. The policy includes the following terms:

Clawback Policy. We have adopted a compensation recovery policy that requires the recovery of certain erroneously paid incentive compensation received by our Section 16 officers on or after October 2, 2023, as required by new SEC

rules and NASDAQ listing standards implemented pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), and which can be recovered from time-vesting or performance-vesting equity compensation (in addition to other forms of compensation, such as cash awards). The policy includes the following terms:

Stock Ownership Guidelines. These guidelines serve to align the interests of directors and officers with those of our shareholders by requiring them to acquire and hold an amount of stock with an aggregate market value equal to a specified multiple of their base salary or cash retainer (as applicable). The guidelines allow: 1) unvested restricted stock vesting purely on a time basis, and 2) shares held in trust to be counted toward the stock owned under the guidelines. Vested but unexercised stock options do not count toward stock ownership. Once a director and/or officer meets the stock ownership guidelines they will not fall out of compliance based solely on a stock price decline.

The guidelines include the following terms:

Certain Relationships and Related Transactions

As discussed above, we have a written policy applicable to any transaction, arrangement or relationship between us and a related party. Our practice with regards to related party transactions has been for our Audit Committee to review, approve and/or ratify such transactions as they arise in accordance with the policy.

Bison Transaction - Issuance and Sale of 10.0% Convertible Notes due 2029

On March 31, 2023, the Company entered into a note purchase agreement (the “Note Purchase Agreement”) with Bison Capital Partners VI, L.P. and Bison Capital Partners VI-A, L.P. (collectively, “Bison”), relating to the issuance and sale by the Company to Bison of $32,000,000 in aggregate principal amount of the Company’s 10% Convertible Notes due 2029 (the “Notes”). The Notes will bear interest at a rate of 10.0% per annum, and compounded annually, payable (i) in kind or (ii) in cash, annually in arrears on April 1 of each year, commencing on April 1, 2024 (collectively described as “Bison Transaction”).

On March 31, 2023 in connection with the Bison Transaction and at the recommendation of the Nominating and Corporate Governance Committee of the Board and in connection with the bylaws of the Company, the Board appointed Douglas Trussler to the Board, effective immediately, to serve until the Company’s 2024 Annual Meeting

of Shareholders and until his successor is duly elected and qualified. Mr. Trussler was then elected to serve as a director by the Company’s shareholders at its 2024 Annual Meeting of Shareholders. The Nominating and Corporate Governance Committee and the Board has determined that Mr. Trussler is not independent, as he is the current General Partner of their Funds and a co-founder of Bison Capital.

Mr. Trussler’s initially agreed to receive compensation consistent with the Company’s previously disclosed standard compensation practices for non-employee directors, described below. However, after further consideration, he determined to accept the cash board fees and reimbursement of certain professional fees paid by Bison, but waived the annual grant of restricted stock units made to non-employee directors.

For a full description of the transaction please see the Form 8-K filed on March 31, 2023 and related exhibits.

Director Independence, Board of Directors and Committees of the Board of Directors

Board Independence. Each of Rudolph J. Borneo, Dr. David Bryan, Joseph Ferguson, Philip Gay, F. Jack Liebau, Jr. (nominee), Jeffrey Mirvis, Jamy P. Rankin, Anil Shrivastava (nominee), Patricia (Tribby) W. Warfield and Barbara J. Whittaker are independent within the meaning of the applicable SEC rules and the NASDAQ listing standards, and all of our committee members are independent within the meaning of the applicable SEC rules and NASDAQ listing standards.

The Nominating and Corporate Governance Committee found that, Douglas Trussler is not independent within the meaning of the applicable SEC rules and the NASDAQ listing standards.

Board Leadership Structure. The Board of Directors does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board as the Board of Directors believes it is in the best interests of our Company to make that determination based on the position and direction of our Company and the membership of the Board of Directors. The roles of Chairman of the Board and Chief Executive Officer are currently held by the same person, Selwyn Joffe. The Board of Directors believes that Mr. Joffe’s service as both Chairman of the Board and Chief Executive Officer is in the best interest of our Company and its shareholders. Mr. Joffe possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing our Company and its business and is in the best position to develop agendas that ensure that our Board of Directors’ time and attention are focused on the most critical matters. We believe that our Company has been well served by this model because the combined role of Chairman of the Board and Chief Executive Officer has ensured that our directors and senior management act with a common purpose and in the best interest of our Company. This model enhances our ability to communicate clearly and consistently with our shareholders, employees, customers and suppliers.

Lead Independent Director. Our Board has appointed Joseph Ferguson as our Lead Independent Director to preside at executive sessions of independent directors. Mr. Ferguson was appointed as the Lead Independent Director by a majority vote of our independent directors, upon review and consideration of the Nominating and Corporate Governance Committee. The Lead Independent Director’s duties will include, but are not limited to: (1) presiding at all executive sessions of the independent directors and Board meetings at which the Chairman is not present; (2) serving as liaison between the Chairman and the independent directors; (3) coordinating with the Chairman on the Board meeting agendas and schedules and the subject matter of the information to be sent to the Board; (4) the authority to call meetings of the independent directors; (5) ensuring he is available for consultation and direct communication if requested by major shareholders; and (6) performing such other duties as the Board deems appropriate. Mr. Ferguson sits on the Audit Committee and is also invited to attend Compensation Committee meetings and discussions related to the setting of goals and metrics to ensure the goals properly align with the Company’s strategic initiatives, are in line with the budget and robust in nature and promote shareholder value.

Board’s Role in Risk Oversight. Our Board of Directors as a whole has responsibility for risk oversight with certain categories of risk being reviewed by particular committees of the Board of Directors, which report to the full Board of Directors as needed. The Audit Committee reviews the financial risks, including internal control, audit, information and cyber security, financial reporting and disclosure matters including related person transactions, by discussing these risks with management and our internal and external auditors. The Compensation Committee reviews risks relating to our executive compensation plans and arrangements, human capital management, succession planning, corporate culture and diversity, equity, and inclusion. The Nominating and Corporate Governance Committee reviews risks related to our governance structure and processes, and our overall response to environmental, social and governance (ESG) issues. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board of Directors is regularly informed about our overall

risk profile and is charged with strategic planning oversight and risk mitigation. We believe this structure is appropriate for the Company as it assigns specific areas of risk and its mitigation to the committee best suited to understand and proactively manage such risk as part of its overall oversight of the Company, while having the full Board charged with oversight of the Company’s overall risk profile and mitigation.

Attendance of Board and Committees. Our Board of Directors met eleven times during Fiscal 2024. Each of our then directors attended 75% or more of the total number of meetings of the Board of Directors and committees thereof during Fiscal 2024. Our last annual meeting of shareholders was held on September 14, 2023. All of our then directors attended our last annual meeting of shareholders. Each director is encouraged to attend each meeting of the Board of Directors and the annual meeting of our shareholders.

Audit Committee. The current members of our Audit Committee are Philip Gay, Joseph Ferguson and Jeffrey Mirvis, with Mr. Gay serving as chair. The Board of Directors has determined that all of the Audit Committee members are independent within the meaning of the applicable SEC rules and NASDAQ listing standards. Our Board of Directors has also determined that Mr. Gay, Mr. Ferguson and Mr. Mirvis are financial experts within the meaning of the applicable SEC rules. The Audit Committee oversees our auditing procedures, received and accepts the reports of our independent registered public accountants, oversees our internal systems of accounting and management controls, oversees information security risks, and makes recommendations to the Board of Directors concerning the appointment of our auditors. The Audit Committee met four (4) times in Fiscal 2024.

Compensation Committee. The current members of our Compensation Committee are Rudolph Borneo, Dr. David Bryan, and Jeffrey Mirvis, with Mr. Borneo serving as chair. The Compensation Committee is responsible for developing our executive compensation policies. The Compensation Committee is also responsible for evaluating the performance of our Chief Executive Officer and other senior officers and making determinations concerning the salary, bonuses and equity-based awards to be awarded to these officers, as well as human capital management, management succession planning and administering our clawback policy. No member of the Compensation Committee has a relationship that would constitute an interlocking relationship with the executive officers or directors of another entity. For further discussion of our Compensation Committee, see below “Compensation Committee Interlocks and Insider Participation.” The Compensation Committee met eight times in Fiscal 2024.

Nominating and Corporate Governance Committee. The current members of our Nominating and Corporate Governance Committee are Dr. David Bryan, Jeffrey Mirvis and Barbara Whittaker, with Ms. Whittaker serving as chair. Each of the members of the Nominating and Corporate Governance Committee is independent within the meaning of applicable SEC rules. Our Nominating and Corporate Governance Committee is responsible for maintaining strong corporate governance within the Board and the Company as a whole, as well as identifying, vetting and ultimately nominating candidates to our Board of Directors, Board succession planning, as well as oversight of our response to ESG issues. Our Nominating and Corporate Governance Committee met twice during Fiscal 2024.

In evaluating potential director nominees, including those identified by shareholders, for recommendation to our Board of Directors, our Nominating and Corporate Governance Committee seeks individuals with talent, ability and experience from a wide variety of backgrounds to provide a diverse spectrum of experience and expertise relevant to a diversified business enterprise such as ours. Our Company does not maintain a separate policy regarding the diversity of its Board members. However, the Nominating and Corporate Governance Committee considers individuals with diverse and varied professional and other experiences for membership. A candidate should represent the interests of all shareholders, and not those of a special interest group, have a reputation for integrity and be willing to make a significant commitment to fulfilling the duties of a director. Our Nominating and Corporate Governance Committee will screen and evaluate all recommended director nominees based on the criteria set forth above, as well as other relevant considerations. Our Nominating and Corporate Governance Committee will retain full discretion in considering its nomination recommendations to our Board of Directors.

Information about Our Executive Officers

Our executive officers (other than executive officer who is also a member of our Board of Directors), their ages and present positions with our Company, are as follows:

Our executive officers are appointed by and serve at the discretion of our Board of Directors. A brief description of the business experience of each of our executive officers other than executive officer who is also a member of our Board of Directors.

David Lee has been our Chief Financial Officer since February 2008. Prior to this, Mr. Lee served as our Vice President of Finance and Strategic Planning since January 2006, focusing primarily on financial management and strategic planning. Mr. Lee joined us in February 2005 as a Director of Finance and Strategic Planning. His primary responsibilities as Chief Financial Officer are treasury, budgeting and financial management. From August 2002 until he joined us in 2005, he served as corporate controller of Palace Entertainment, Inc., an amusement and water park organization. Prior to this, Mr. Lee held various corporate controller and finance positions for several domestic companies and served in the audit department of Deloitte LLP (formerly known as Deloitte & Touche LLP). Mr. Lee is a Certified Public Accountant. Mr. Lee earned his Bachelor of Arts degree in economics from the University of California, San Diego, and a Master’s in Business Administration degree from the UCLA Anderson School of Management.

Douglas Schooner has been our Chief Manufacturing Officer since June 2014 and an SVP since 2018. Mr. Schooner joined us in 1993 and became the Vice President, Global Manufacturing Operations in January 2001 until his promotion in June 2014. Mr. Schooner has held the positions of Engineer, Production Manager, Assistant Vice President, Production and Vice President, Manufacturing prior to assuming his current position with Company. As Chief Manufacturing Officer, Mr. Schooner is responsible for all manufacturing, materials and logistic operations for our facilities. Mr. Schooner has a Bachelor of Science degree in Mechanical Engineering from the California State University, Long Beach.

Kamlesh Shah has been our Chief Accounting Officer since November 2019. Prior to this, Mr. Shah served as our Vice President, Corporate Controller since 2016, and has been with the Company since 2007, having joined as an Assistant Controller. Before joining us in 2007, he served as an Assistant Controller for Leiner Health Products Inc., a private label manufacturer of vitamins and pharmaceutical products. Prior to joining Leiner in 2000, Mr. Shah held various accounting positions at both domestic and international companies. Mr. Shah is a Certified Public Accountant. In addition, he holds a degree in Finance and Accounting from the University of Bombay, along with a diploma in Financial Management and Computer Management.

Juliet Stone has been our Vice President, General Counsel and Corporate Secretary since September 2019. She acted as Senior Corporate Counsel at Stamps.com from February 2017 to August 2019, as General Counsel at Hanmi Financial Corporation from November 2013 to January 2017 and in various legal roles including General Counsel at BBCN Bancorp, Inc. FNA Nara Bancorp. Inc from 2006 to 2013. Prior to joining Nara Bancorp, Ms. Stone held various legal positions at law firms and professional services companies. Ms. Stone is admitted to practice law in California and is a graduate of The University of Southern California Law Center and a recipient of a Bachelor of Arts in Economics-Business from University of California at Los Angeles.

There are no family relationships among our directors or named executive officers. There are no material proceedings to which any of our directors or executive officers or any of their associates, is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries. To our knowledge, none of our directors or executive officers has been convicted in a criminal proceeding during the last ten years (excluding traffic violations or similar misdemeanors), and none of our directors or executive officers was a party to any judicial or administrative proceeding during the last ten years (except for any matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. To our knowledge, other than as disclosed in Proposal No. 1 of this proxy statement, none of our directors or executive officers are subject to any petition under federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which she was a general partner at or within two years before the time of such filing, or any corporation or business association of which she was an executive officer at or within two years before the time of such filing.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our executive officers, directors and holders of more than 10% of our common stock to file with the SEC initial reports of ownership of our common stock on a Form 3 and reports of changes in such ownership on a Form 4 or Form 5. Executive officers, directors and holders of more than 10% of our common stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. We submit all applicable Section 16(a) filing requirements on behalf of our executive officers and directors. To our knowledge, based solely on the reports filed by us, copies of such reports furnished to us and written representations made by our executive officers and directors regarding their filing obligations, all Section 16(a) filing requirements applicable to our executive officers and directors were satisfied with respect to the fiscal year ended March 31, 2024, but reports related to the following transactions were subsequently filed: one transaction for Philip Gay which was filed late on one Form 4 on June 21, 2024; four transactions for Kamlesh Shah which were filed late on one Form 4 on June 24, 2024.

Compensation Discussion and Analysis

A strong commitment to enhancing shareholder value has been a guiding force throughout the Company’s history. Consistent with the overall objective to enhance shareholder value, management strives to achieve key target metrics derived from our strategic plans overseen by the Board. These metrics are developed by the Compensation Committee with input from management and oversight by the Board. During Fiscal 2024 it was determined that priority be given to generating positive cash flow from operations, with emphasis on gross profit and EBITDA.

In Fiscal 2024, our goals continued to focus on financial targets to benefit the Company and our shareholders:

Along with the identified metrics for our annual cash incentive plan we also accomplished the following, all of which will bode well for our ongoing progress in enhancing shareholder value:

Executive Compensation Summary.

The Company’s strategic planning process “OGSM” has a singular objective each year – to build shareholder value.

OGSM stands for Objective, Goals, Strategies, and Measures. As mentioned above, the Objective is singular and has always been to build shareholder value; the Goals are the items to be accomplished that will result in building shareholder value; the Strategies are all the executables that must take place to accomplish the Goals and Measures are used to track the progress and serve as a benchmark for executive compensation and bonuses. The Board meets annually to discuss, develop and refine the Company’s management proposed strategic plan, and subsequently the executive management team meets to develop the specific OGSM process keyed off the Board approved strategic planning initiatives Once the executive OGSM is completed by management a detailed business plan and budget is developed and presented to the Board for approval.

The CEO’s goals each year are set by the Board and Compensation Committee to align with the strategic planning initiatives set at OGSM each year. In turn each named executive officer is assigned goals meant to cascade off the CEO/Company goals. As such, OGSM serves as the backbone of designing and measuring our executive compensation.

The retention of experienced, highly capable and dedicated executives is crucial to the long-term success of our Company. To achieve the goal of recruiting, retaining and motivating our executives, our Compensation Committee has developed an overall executive compensation program that rewards these employees for their contributions to our Company.

The primary objectives of our practices with respect to executive compensation are to:

Actions Taken

Our Compensation Committee and Board took the following actions in Fiscal 2024 to improve the alignment of our compensation practices with shareholder return and better align executive compensation with Company performance (“pay for performance”):

Compensation Components and Key Elements.

With our compensation objectives in mind, as further described below, our executive officer compensation program consists of five primary elements:

Base Salary. Base salary is the “fixed” component of our executive compensation intended to meet the objective of attracting and retaining executive officers of superior talent that are necessary to manage and lead our Company.

Annual Cash Incentive Plan. We use a cash-based incentive plan to motivate the achievement of key short-term pre-determined financial corporate and individual performance goals meant to enhance shareholder value.

With respect to our Annual Cash Incentive Plan, the individual performance metrics employed in recent years focused on the transformation of our business including the launch of our new full line brake program, consolidation of our operations into low-cost countries, and electric vehicle and aerospace initiatives. For Fiscal 2024, our Compensation Committee removed the individual performance component from our Annual Cash Incentive Plan for executive officer participants, so that 100% of each named executive officers’ cash-based incentive compensation opportunity was based solely on corporate objectives, as further described below.

The following table includes the target cash-based incentive compensation opportunities and weightings for each named executive officer in Fiscal 2024:

Long-term, Equity-Based Incentive Plan. Equity awards are a part of our overall executive compensation program to align the interests of our executives with those of shareholders while rewarding individual performance and ensuring we offer competitive compensation levels. In Fiscal 2023, half of the value of the equity awards granted to our named executive officers (not including Mr. Joffe’s performance-based restricted stock award) were performance based and included PSUs requiring three years of performance to vest. Mr. Joffe received 67% performance-based equity awards in Fiscal 2023. In Fiscal 2024, 100% of our annual equity awards (which were granted in June 2023) are performance based and tied to stock price performance goals. Though Mr. Joffe, Mr. Lee and Mr. Shah were granted a one-time retention stock option award in September 2023. These stock options have a ten-year term and were granted with a premium exercise price. Please see below for further details.

Deferred Compensation Benefits. We offer participation in a non-qualified deferred compensation plan to selected executive officers which provides unfunded, non-tax qualified deferred compensation benefits. We believe this program helps promote the retention of our senior executives. Participants may elect to contribute a portion of their cash compensation to the plan. We made matching contributions of 100% of each participant’s elective contributions to the plan up to 3% of the participant’s cash compensation until February 5, 2023, when the Company temporarily halted the Company’s matching contributions, until it was restarted February 8, 2024.

Employee Benefits. All of our full-time employees, including our named executive officers, are eligible to participate in our health and welfare plans. The Company does not provide pension benefits, other than matching contributions under the Company’s 401(k) retirement plan, which were temporarily halted effective February 5, 2023, until it was restarted February 8, 2024.

We believe that a significant portion of executive officer compensation should be at-risk and dependent upon the achievement of measurable and objective performance metrics tied to increased shareholder value. In Fiscal 2024, the awards under the Annual Cash Incentive Plan for all named executive officers were based on the achievement of pre-determined objective metrics of the Company, including Gross Profit after adjustments, EBITDA after adjustments and Cash from Operating Activities, which were weighted, 25%, 25% and 50%. As described further

below, our Annual Cash Incentive Plan requires the Company to meet at least 50% of the target corporate performance objectives to pay out any bonus. In Fiscal 2024, the Company met 183% of its Cash from Operating Activities goal (weighted at 50%), but did not meet threshold performance for EBITDA after adjustments or Gross Profit after adjustments (each weighted at 25%), and thus an annual short term cash based incentive bonus of 75% (50% weighting x 150% maximum goal multiplier) of the target bonus opportunity was paid to executives.

A portion of our Chief Executive Officer’s total direct Fiscal 2024 compensation is comprised of equity awards (the “Equity Component”), including PSUs. A majority of Mr. Joffe’s Equity Component consists of performance-based awards focused on achievement of goals that we believe enhance shareholder value, even better aligning his compensation with the interests of our shareholders. As discussed above, in Fiscal 2024, 100% of the equity awards granted to the named executive officers and other employees throughout the Company under our annual equity award program consisted of PSUs that are 100% dependent on increasing the value of Company common stock.

Moreover, we believe that the executive compensation program should serve the interests of shareholders. Accordingly, we have adopted various policies and practices that we believe are in shareholders’ interests, including:

As discussed above under “Governance Policies and Guidelines—Stock Ownership Guidelines,” we have also adopted stock ownership guidelines, pursuant to which each of our directors and executive officers are required to hold a certain number of shares of our common stock, within a specified timeframe.

Say on Pay Vote.

At the Annual Meeting held on September 14, 2023, 88% of the votes cast by our shareholders approved the non-binding advisory vote related to executive compensation. In Fiscal 2024, we continued to regularly engage with our shareholders to ensure we understand any thoughts or concerns with our executive compensation program, with the goal of continually enhancing our shareholder communications. Please see Engagement of Shareholders section below for further details. In Fiscal 2024, we held discussions with nearly all of our major shareholders, representing a majority of the holders of Company common stock, regarding executive compensation and other governance and business performance issues. In response to the feedback we received in these meetings, we continued to enhance our incentive compensation goals focusing on fulfilling our long-term strategic objectives and building shareholder value. The Annual Cash Incentive Plan for Fiscal 2024 employs objective corporate metrics focused on building shareholder value and return, including 50% of the Company goal being based on the generation of cash from operations, as we continue to hear that cash generation is a top priority of our shareholders. In response to the decline in the stock price, the Compensation Committee changed course for Fiscal 2024 to align management with our shareholders’ interests.

The annual equity grants for Fiscal 2024 (which were granted in June 2023) changed from 50% time-based RSU awards and 50% PSU awards with multiple performance goals granted in Fiscal 2023 to 100% PSU grants with one absolute TSR performance goal, namely to increase the Company stock price, as compared to Fiscal 2023 when

the Company had a relative TSR performance goal weighting of 30% for PSU awards (and the remaining 70% weighting was comprised of financial operations goals). PSU awards granted in Fiscal 2024 were comprised of three performance-vesting tranches under which 1/3 of the target PSUs may be eligible to vest, including the (i) achievement of a $10 stock price target (49.7% increase from stock price at grant), (ii) achievement of a $15 stock price target (124.5% increase from stock price at grant), and (iii) achievement of a stock price between $17.50 and $25 (with vesting ranging between 50% and 150% of the tranche, depending on the stock price achieved between the two goals, with 100% of the tranche vesting at a $20 stock price) (199.4% increase from stock price at grant). Each performance-vesting tranche may be met over a three-year performance period, commencing June 19, 2023, and all price targets must be met for thirty consecutive trading days.

Engagement with Shareholders

We openly encourage direct dialogue between management and shareholders, and try at least on a quarterly basis to make contact with our shareholder base. We host an open conference call to discuss earnings and have a “no restriction” question and answer session for our participants. In addition we actively engage with our shareholders in person, by phone, and through written correspondence. During Fiscal 2024, we met via conference call / video and in person with most of our largest shareholders and many other shareholders. We consider the shareholders’ feedback offered during those meetings and continue to improve our corporate governance, communication and executive compensation practices.

Shareholders expressed a desire that a majority of equity awards granted to our named executive officers be based on metrics directly related to enhancing shareholder value. Starting in Fiscal 2022, of the equity awards granted to our named executive officers (other than Mr. Joffe’s restricted stock award) approximately fifty percent (50%) of the value of such awards were granted as RSUs that vest ratably over a three-year period subject to continued service, and approximately fifty percent (50%) of the value of such awards were granted as PSUs that are eligible to vest at the end of a three-year period based on the Company’s achievement of financial performance metrics tied to our projected budget for Fiscal 2024, at the time of grant. We continued the same program in Fiscal 2023 with slight changes to the weighting of each PSU performance measure tied to our projected budget in Fiscal 2025, at the time of the grant (increasing TSR from 20% to 30% and decreasing EBITDA, after adjustments from 50% to 40%) to the PSU performance metrics. These metrics were: 1) EBITDA after certain adjustments (40% weighting), 2) Relative TSR to Russell 3000, with financial and real estate companies excluded (30% weighting), and 3) Net Sales after adjustments (30% weighting), each of which, the Company believes focuses on driving shareholder value. Each metric, other than TSR which is defined above, is defined in Appendix A of our Proxy Statement on Schedule 14A filed with the SEC on July 28, 2023. These three metrics are viewed as key indicators of our performance that our CEO, CFO and VP Investor Relations discussed with most of our shareholders.

In Fiscal 2024, our shareholders expressed that they were generally happy with our financial results, and wanted us to focus on share price. As a direct result of these discussions, the Compensation Committee implemented an annual equity grant that was congruent with our shareholders focused only on increased share price. In Fiscal 2024, with respect to our annual equity awards, we only granted PSUs that vest based on the achievement of target stock price increases of between 49.7% and 199.4% of the stock price on the date of grant.

When talking to shareholders in Fiscal 2022 we received input that shareholders wanted incentive-based compensation based on the generation of positive cash flow from operations and as a result we included such metric in our Fiscal 2023 incentive plans. In Fiscal 2023, we continued to emphasize our focus on shareholder value and return by adding Net Cash Provided by Operating Activities as the largest portion of the performance metric in our short term incentive plan, as the Compensation Committee and the Board emphasized the ever increasing importance of positive cash flow in today’s fiscal environment. In Fiscal 2024 and Fiscal 2025 we continued this trend by increasing the weighting of positive cash flow to 50% for the Company portion of our Annual Cash Incentive Plan opportunity.

With respect to our Fiscal 2024 Annual Cash Incentive Plan for executive officers, the following three key metrics were set as: 1) Cash from Operating Activities (50% weighting), 2) EBITDA, after adjustments (25% weighting), and 3) Gross Profit after adjustments (25% weighting), each as explained in Appendix A. These three metrics are viewed as key indicators of our performance that our CEO, CFO and VP Investor Relations discussed with most of our shareholders. The Compensation Committee deemed that these key executable metrics in Fiscal 2024 were critical to the future success of the Company and would directly translate to building shareholder value. Importantly, the Net Sales after adjustments performance goal (used in Fiscal 2023) was replaced with Gross Profit after adjustment, due to input from shareholders providing that the latter is a better measure of Company success.

In Fiscal 2024, the CEO, General Counsel, Investor Relations and the Lead Independent Director and other directors reached out to shareholders representing the majority of ownership and receiving feedback from most. They exchanged perspectives with the shareholders and listened carefully to their concerns. We heard that shareholders want incentive compensation directly tied to financial results, and the blueprint to implement ESG disclosure to better capture the benefits of remanufacturing in general and MPA specifically.

As a direct result of shareholder feedback:

Determination of Compensation Decisions.

The Compensation Committee is responsible for establishing, developing and maintaining our executive compensation program. The role of the Compensation Committee is to oversee our compensation and benefits plans and policies, administer our equity incentive plans and review and approve all compensation decisions relating to all executive officers and directors. For the Compensation Committee to perform its function, the following process for determining executive compensation decisions has been followed.

Engagement of Compensation Committee Consultant.

In Fiscal 2024, the Compensation Committee continued to retain Willis Towers Watson (“WTW”) to review the Board’s overall compensation. Please see Director Compensation below for a full discussion.

WTW has assisted the Company to respond to our shareholders, focusing our incentive compensation with shareholder return metrics. WTW does not perform any other consulting work or any other services for our Company, other than valuation work related to Monte Carlo simulations for the Fiscal 2022, Fiscal 2023 and Fiscal 2024 relative TSR metrics in the PSUs and Pay for Performance and CAP calculations for Fiscal 2023 and Fiscal 2024, reports directly to the Compensation Committee, and takes direction from the Chair of the Compensation Committee. The Compensation Committee has assessed the independence of WTW pursuant to the rules prescribed by the SEC and has concluded that no conflict of interest existed or currently exists that would prevent WTW from serving as an independent consultant to the Compensation Committee.

The Compensation Committee considered analysis and advice from WTW when making compensation decisions for the Chief Executive Officer and other senior executives with regard to Fiscal 2023 compensation, including WTW’s input on performance-based metrics for the annual cash and equity awards made, as well as the use of long term cliff vesting performance-based stock units.

Peer Group. WTW reviewed our peer group in Fiscal 2021 and determined that there were no meaningful changes that would improve our peer group, due to the lack of other public companies of similar market capitalization providing a similar product mix. As such the following peer group was maintained from Fiscal 2021 through Fiscal 2024, other than Horizon Global Corporation which was removed as it merged into another company: Dorman Products Inc., Fox Factor Holding Corp., Modine Manufacturing Co., Myers Industries, Inc., Shyft Group Inc., Standard Motor Products Inc., Stoneridge Inc., Strattec Security Corp., Gentherm, Inc., Superior Industries International Inc. and Voxx International Corporation. Given the limitations of our peer group, WTW recommended that we assess compensation in relation to our peer group as well as other companies with similar revenue to obtain

a more fulsome view of the market. Though the Compensation Committee does not itself undertake a formalized benchmarking process, it did engage WTW to perform such a review detailing the competitiveness of our executive compensation relative to that of a peer group and survey data of other companies with similar revenue.

Fiscal 2024 Total Executive Compensation Review.

In reaching its executive compensation decisions for Fiscal 2024, WTW gave advice on the performance-based equity granted, the Committee also considered analysis and advice contained in the WTW Fiscal 2022 review regarding the competitiveness of our executive compensation program in comparison to our peer group and compensation surveys. The Compensation Committee also reviewed materials from Fiscal 2023 and Fiscal 2024, using our peer data that reviewed and compared our named executive officers against their peers. The Compensation Committee believes that executive compensation, in aggregate, was within a competitive range around the market 50^th percentile for base salary, target total cash and target total direct both inclusive and exclusive of the CEO with variation by individual. The compensation levels assessed by WTW were based on actual base salary, target bonus and fair value of our most recent long-term incentives. When managing executive compensation towards our compensation philosophy, we focus on competitiveness in the aggregate with the understanding and expectation of individual variation relative to market. Though some of our named executive officers were well below the 50^th percentile, given the current financial climate no base salary adjustments were made, though Ms. Stone’s target bonus was adjusted upward by 10% and additional equity was given in Fiscal 2024 to get certain individual named executive officers closer to the 50^th percentile target.

Determining Executive Compensation.

Base Salaries. Our general policy is to initially set the base salaries of our named executive officers at levels that are competitive with our peers, and we generally only increase salaries in the case of promotions or significant increases to an officer’s duties and responsibilities. In Mr. Joffe’s case, his employment agreement provides for review of his base salary from time to time. Any increases to base salaries are reviewed by the Compensation Committee on a case-by-case basis. Mr. Joffe, Mr. Lee, Mr. Schooner, Mr. Shah and Ms. Stone did not receive a base salary increase in Fiscal 2024. The following table sets forth the Fiscal 2024 base salaries for each named executive officer:

Annual Cash Incentive Plan. Historically, each year we administer a cash-based incentive compensation program that aims to reward our named executive officers for the achievement of key financial (80%) and individual (20%) performance goals. However, in Fiscal 2024, the Compensation Committee determined that the named executive officers should be wholly focused as “One Team” on achieving the Company Performance Goals and removed the individual performance component from our cash-based incentive compensation program. 100% of the named executive officers’ target bonus opportunity was based on the following Company performance-based metrics (and their weightings): (1) Cash from Operating Activities (50%), (2) EBITDA after adjustments, (25%), which is calculated as earnings before interest expense, income tax expense, depreciation and amortization and other adjustments described in our earnings releases attached as exhibits to the Company’s Reports on Form 8-K reporting the Company’s results of operations and financial condition for the applicable fiscal year as filed with the SEC, and (3) Gross Profit after adjustments (25%), which means the Company’s gross profit as calculated including items impacting the results as described in the Company’s earnings releases filed with the SEC on Form 8-K (collectively, the “Company Performance Goals”).

The Company Performance Goals were established by the Compensation Committee following its review of the Company’s strategic initiatives and budget and are shown in the chart below. It should be noted that the Cash from Operating Activities goal in Fiscal 2024, was set lower than the same goals in Fiscal 2023, but much higher than actual achievement in Fiscal 2023. The Board approves a strategic business plan and puts into place targets that they believe will drive shareholder value. The Compensation Committee then creates goals, considering its analysis of the

current state of the overall economy, our industry’s outlook and the Company budget, to strengthen the Company’s financials and ultimately create shareholder value. The Board and Compensation Committee strive to set meaningful goals that give our named executive officers the opportunity to positively affect the Company and increase the stock price.

The actual numbers for each goal’s threshold, target and maximum were chosen based on the approved Company budget. The target for each goal equates to the Company budget and the threshold and maximum are a percentage below and above said target. The Compensation Committee changed the third goal from Net Sales after adjustments to Gross Profit after adjustments to focus the Company and its executives on the creation of profitable sales and growing our margins.

Though the Company increased our sales, margin and gross profit over the prior year on an adjusted basis, the Company did not meet its threshold goals for gross profit and EBITDA, due to softness of demand in the market, in the fourth quarter of Fiscal 2024, even though the Company implemented successful cost controls in SG&A.

Company Performance Goal

The Company’s actual performance with respect to the Company Performance Goals with respect to Fiscal 2024 is shown in the chart below:

The named executive officers received credit for 75% of the Company Performance Goals (50% weighting x 150% maximum goal multiplier), as the Company met 183% of its Cash from Operating Activities performance goal, representing 83% above the Maximum goal.

In a year where the Company meets at least 50% of the Company Performance Goals, in alignment with the threshold percentage, each named executive officer is eligible to receive payment with respect to a Company Performance Goal provided the Company achieved that goal at the threshold amount or above (the “Threshold Goal”). If the Company’s actual performance was lower or higher than the target amount established for the relevant metric the bonus earned with respect to that goal was interpolated between either the threshold and the target amounts (50% and 100%) or the target amount and the maximum amount (100% and 150%) for each goal, multiplied by the percentage weighting for that goal.

The following table sets forth each named executive officer’s aggregate cash-based incentive opportunity and actual incentive payment in Fiscal 2024.

Equity-Based Incentive Program. The goal of our long-term, equity-based incentive awards is to align the interests of our named executive officers with the interests of our shareholders. Because vesting is generally based on

continued service, in addition to performance-based metrics in most cases, our equity-based incentives also encourage the retention of our named executive officers during the award vesting period. In determining the mix of equity and size of awards to be granted to our named executive officers, we consider the value of equity awards issued by peer group companies, the total value of the compensation opportunity afforded to each named executive officer, and the individual’s position, scope of responsibility, and ability to affect profits and shareholder value. In line with shareholder recommendations, in Fiscal 2022, WTW recommended including in the total equity awards granted to our named executive officers a multi-year performance-based equity award. Since Fiscal 2022 we have continued to follow this recommendation.

Fiscal 2024 Equity Grants

In Fiscal 2024, the Company granted to all of our named executive officers long-term PSUs, vesting 100% on absolute total shareholder return, as well as time-based stock options to Mr. Joffe, Mr. Lee and Mr. Shah. The following table sets forth the number of shares and grant date fair value of the equity awards granted to the named executive officers in Fiscal 2024.

In June 2023, the Compensation Committee approved PSU awards to our named executive officers that vest based on the achievement of an absolute shareholder return performance goal to align management with our shareholders’ interests. PSU awards granted in Fiscal 2024 were comprised of three performance-vesting tranches under which 1/3 of the target PSUs may be eligible to vest, including the (i) achievement of a $10 stock price target (49.7% increase from stock price at grant), (ii) achievement of a $15 stock price target (124.5% increase from stock price at grant), and (iii) achievement of a $15 stock price target (124.5% increase from stock price at grant), and (iii) achievement of a stock price between $17.50 and $25 (with vesting ranging between 50% and 150% of the tranche, depending on the stock price achieved between the two goals, with 100% of the tranche vesting at a $20 stock price) (199.4% increase from stock price at grant). Each performance-vesting tranche may be met over a three-year performance period, commencing June 19, 2023, and all price targets must be met for thirty consecutive trading days.

In September 2023, Mr. Joffe, Mr. Lee and Mr. Shah were each granted a one-time retention stock option award. These stock options have a ten-year term and were granted with a premium exercise price of $9.32 per share, as opposed to an exercise price of $7.41 which was the closing price of our common stock on the date of grant. These options will vest over a three-year period, with 1/3 of the stock options vesting on the first, second and third anniversaries of the grant date, subject to continued employment.

For a description of the accelerated vesting applicable to our named executive officers’ stock awards, see “Employment Agreements” and “Potential Payments Upon Termination or Change in Control Table” below.

Achievement of 2023 Performance-based Restricted Stock Awards

Mr. Joffe’s performance-based Fiscal Year 2023 restricted stock award, granted on June 20, 2022, vested below the target of 66,667 shares, at 27.058% of the maximum, and 27,508 shares of stock vested on June 20, 2023.

Accounting Considerations

ASC Topic 718, Compensation-Stock Compensation, or ASC Topic 718 requires us to recognize an expense for the fair value of equity-based compensation awards. Grants of stock options and restricted stock under our equity incentive award plans are accounted for under ASC Topic 718. The Compensation Committee regularly considers the

accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.

Compensation Committee Report

The following Compensation Committee Report is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to the SEC proxy rules or the liabilities of Section 18 of the Exchange Act and the report shall not be deemed to be incorporate by reference into any prior or subsequent filing by the Company under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates this Report by Compensation Committee by reference therein.

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and based on such review and discussions, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

By Members of the Compensation Committee

Compensation Risk Analysis

The preceding “Compensation Discussion and Analysis” section generally describes our compensation policies, plans and practices that are applicable for our executives and management. Our Compensation Committee reviews the relationship between our risk management policies and practices, corporate strategy, and compensation practices. Our Compensation Committee has determined that these plans and practices, as applied to all our employees, including our executive officers, does not encourage excessive risk taking at any level of our Company. The Compensation Committee does not believe that risks arising from its compensation plans, policies or practices are reasonably likely to have a material adverse effect on our Company. Risk related to compensation is also reviewed as part of the Company’s overall compliance process overseen by the Audit Committee of the Company.

Summary Compensation Table

The following table sets forth information concerning Fiscal 2024, 2023, and 2022 compensation of our named executive officers.

Fiscal 2024 Grants of Plan-Based Awards

Outstanding Equity Awards at Fiscal Year End

The following table summarizes information regarding equity awards granted to our named executive officers that remain outstanding as of March 31, 2024. Unless as otherwise noted below, all awards were granted under the Company’s 2022 Incentive Award Plan (“2022 Plan”).