Smith & Wesson Brands : 2025 Proxy Statement 16 MB

About this update from Smith & Wesson Brands, Inc.

2025 NOTICE OF ANNUAL STOCKHOLDER MEETING AND PROXY STATEMENT NOTICE OF ANNUAL MEETING OF STOCKHOLDERS Date: Monday, September 15, 2025 Time: 10 a.m. Eastern Time Location: www.virtuaIsharehoIder meeting.com/SWBI2025 The Annual Meeting of Stockholders of Smith & Wesson Brands, Inc., a Nevada corporation, will be held at 10:00 a.m., Eastern Time, on Monday, September 15, 2025 (the "2025 Annual Meeting"). The 2025 Annual Meeting will be a virtual meeting of stockholders. You will be able to attend the 2025 Annual Meeting, vote, and submit your questions during the live webcast of the meeting by visiting https://www.virtuaIshareholdermeeting.com/SWBI2025 and entering the 16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials. The 2025 Annual Meeting will be held for the following purposes: Election of directors Advisory vote on executive compensation ("say-on-pay") Ratification of appointment of independent registered public accounting firm And such other business as may properly come before the 2025 Annual Meeting or any adjournment or postponement thereof. Stockholders of record at the close of business on July 25, 2025 may vote at the 2025 Annual Meeting. These proxy materials were first made available to our stockholders on the internet on August 5, 2025. Sincerely, Kevin A. Maxwell Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary August 5, 2025 TABLE OF CONTENTS Proxy Statement Summary. 1 Board And Governance Matters 3 Proposal One - Election of Directors. 3 Compensation Matters 17 Proposal Two - Advisory Vote on Executive Compensation 17 Compensation Discussion And Analysis 18 Executive Compensation. 31 Audit Matters. 44 Proposal Three - Ratification of Appointment of Independent Registered Public Accounting Firm. 44 Other Important Information 46 Beneficial Ownership of Common Stock. 46 Annual Report on Form 10-K 47 Delinquent Section 16(a) Reports 47 Frequently Asked Questions Regarding the 2025 Annual Meeting and Voting. 47 Stockholder Proposals or Director Nominations for 2026 Annual Meeting 50 PROXY STATEMENT SUMMARY This summary highlights information contained elsewhere in this Proxy Statement. You should read this entire Proxy Statement carefully before voting. In this Proxy Statement, Smith & Wesson Brands, Inc. (together with its subsidiaries) is referred to as "the Company," "we," "us," or "our." MEETING INFORMATION Time and Date 10:00 a.m., Eastern Time, on Monday, September 15, 2025 Location Online via webcast at https://www.virtuaIsharehoIdermeeting.com/SWBI2025 Record Date July 25, 2025 MEETING AGENDA Board Proposals Recommendation Page Election of Directors FOR each nominee 3 Advisory Vote on Executive Compensation FOR 17 Ratification of Appointment of Independent Registered Public FOR 44 Accounting Firm rry Ellis International, AC "", cc, SC 2 cc, 3 AC, CC, SC 1 cc "', NCG 1 AC, NCG 0 0 AC, 1 Anita D. Britt * 2018 Former CFO of Pe Inc. Fred M. Diaz * 59 2021 Former President Motor North Amer Michelle J. Lohmei 2023 Former Strategic Spirit AeroSystems Barry M. Monheit * 2004 Former President Division of FTI Con Robert L. Scott *§ 1999 Former President Smith & Wesson Mark P. Smith 2020 President and CEO Brands, Inc. Denis G. Suggs * 2021 CEO of LCP Trans and CEO of Mitsubishi ica, Inc. Advisor to CEO I f , Inc. of Financial Consulting sulting of a predecessor of Brands, Inc. of Smith & Wesson portation LLC " = Independent Nominee; ** = Committee Chair; § = Chairman AC = Audit Committee; CC = Compensation Committee; SC = Sustainability Committee; NCG = Nominations and Corporate Governance Committee KEY ACCOMPLISHMENTS Our key accomplishments for the fiscal year ended April 30, 2025 ("fiscal 2025") include the following: Executed Disciplined Capital Allocation Strategy In fiscal 2025, We returned $48.6 million to stockholders through dividends ($23.1 million) and share repurchases ($25.5 million) We invested $21.6 million in capital expenditures. GOVERNANCE HIGHLIGHTS Board Refreshment We recognize the importance of board refreshment. More than 70% of our director nominees have joined our board of directors (the "Board") since 2018, demonstrating the Board's commitment to refreshment, including with independent nominees who provide perspectives and experience to support our strategy. Risk Oversight Given the nature of our business, the Board remains focused on overseeing risk management. In addition to the Audit Committee receiving periodic presentations on enterprise risk management, during fiscal 2025, the Sustainability Committee discussed the campaign against the firearm industry at each of its meetings. Stockholder Engagement We recognize the importance of stockholder engagement. In addition to our regular, year-round stockholder engagement initiatives, prior to the annual meeting of stockholders held on September 17, 2024 (the "2024 Annual Meeting"), we met with certain of our largest stockholders to discuss, among other things, the stockholder proposal that was included in our proxy materials for the 2024 Annual Meeting and the progress we have made on various corporate governance initiatives. In the first half of 2025, we again met with certain of our largest stockholders. We used these meetings to, among other things, provide an update on the progress we have made on various corporate governance initiatives. COMPENSATION HIGHLIGHTS Pay for Performance Our executive compensation program emphasizes our pay-for-performance philosophy. For fiscal 2025: 100% of our named executive officers' ("NEOs") annual cash incentive goals were tied to Company performance (Net Sales and Adjusted EBITDAS). Adjusted EBITDAS also served as the threshold for which the failure to achieve this performance metric would result in no bonus payments regardless of the achievement of the other performance metric. 50% of our NEOs' stock-based award value was tied to Company performance, as reflected by Adjusted EBITDAS Growth (as defined herein), subject to a modifier based on relative total shareholder return ("rTSR") value. Our NEOs received no annual cash incentive for fiscal 2025 because we failed to achieve the threshold target for Adjusted EBITDAS. Our NEOs received none of the target shares of common stock for the performance-based restricted stock unit ("PSU") portion of the stock-based award in 2022 because we failed to meet the minimum performance requirements. BOARD AND GOVERNANCE MATTERS PROPOSAL ONE - ELECTION OF DIRECTORS What Am I Voting On? Stockholders are being asked to elect each of the seven director nominees named in this Proxy Statement to hold office until the annual meeting of stockholders in 2026 (the "2026 Annual Meeting") and until his or her successor is elected and qualified. oting Recommendation: FOR the election of each of the seven director nominees Vote Required: A director will be elected if that director nominee receives a majority of the votes cast Broker Discretionary Voting AIIowed'7 No - broker non-votes have no effect Abstentions: No effect GOVERNANCE FRAMEWORK Our business and affairs are managed under the direction of the Board, subject to limitations and other requirements in our charter documents or in applicable statutes, rules, and regulations, including those of the Securities and Exchange Commission (the "SEC") and the Nasdaq Stock Market ("Nasdaq"). Our governance framework supports independent oversight and accountability. Independent Oversight 6 of 7 director nominees are independent Non-Executive Chairman All independent committees More than 70% of directors have joined the Board since 2018 Accountability Majority voting in uncontested elections Annual election of directors Annual advisory say-on-pay vote Robust over-boarding policy Stockholder right to call special meetings Proxy access right Our governance framework is based on our Amended and Restated Bylaws (our "Bylaws"), as well as the key governance documents listed below: Code of Conduct and Ethics Code of Ethics for CEO and Senior Financial Officers Corporate Governance Guidelines (the "Guidelines") Charters of the Audit Committee, the Compensation Committee, the Nominations and Corporate Governance Committee (the "NCG Committee") and the Sustainability Committee. Copies of these documents are available on our website, https://www.smith-wesson.com , or upon written request sent to our Secretary at our principal executive offices located at 1852 Proffitt Springs Road, Maryville, Tennessee 37801. The information on our website is not part of this Proxy Statement. BOARD COMPOSITION Director Skills and Qualifications The NCG Committee, using a matrix of director skills and experiences that the Board believes are needed to address existing and emerging business and governance issues relevant to us (the "Skills Matrix"), reviews with the Board annually the desired experiences, mix of skills, and other qualities required for new Board members, as well as Board composition. The Board seeks director candidates who possess the requisite judgment, background, skill, expertise, and time to strengthen and increase the breadth of skills and qualifications of the Board. In particular, the Board may consider, among other things, the fit of the individual's skills, background, qualifications, experience, and personality with those of other directors in maintaining an effective, collegial, and responsive Board and a mix of diversity in personal and professional experience, background, viewpoints, perspectives, knowledge, and abilities. The Board does not have a specific diversity policy. Skills Matrix. The NCG Committee developed the Skills Matrix in response to requests from certain of our stockholders for more detailed information concerning our directors' qualifications. The NCG Committee adopted the Skills Matrix to facilitate the comparison of our directors' skills and experiences to those that the Board believes are needed to address existing and emerging business and governance issues relevant to us. The table below lists those skills and experiences, along with the total number of director nominees who possess the particular skill or experience. Executive Experience serving as a CEO or a senior executive provides a practical understanding of a complex business like ours. 7 of 7 Public Company Board Service on other public company boards facilitates an understanding of corporate 5 of 7 governance practices and trends, and insights into board management. Regulated Industry / Government Experience with regulated industries and government provides insight and perspective in working constructively and proactively with government agencies. of 7 Sales and Marketing Experience in sales, brand management, marketing, and marketing strategy provides a perspective on how to better market our products. 3 of 7 Risk Management Given the importance of the Board's role in risk oversight, we seek directors who O 7 can help identify, manage, and mitigate key risks. Financial Understanding financial reporting and accounting processes enables monitoring and assessment of operating and strategic performance and facilitates accurate financial reporting and robust controls. O 7 Manufacturing Functional experience in a senior operating position with a manufacturing company can help us drive operating performance. 6 of 7 Sustainability Experience with sustainability matters, including environmental sustainability, human capital management and corporate ethics, enables management of sustainability risks and opportunities. 4 of 7 Director Independence Under the Guidelines and the Nasdaq listing standards, the Board must consist of a majority of independent directors. The Board annually reviews director independence and has determined that all director nominees, except for Mr. Smith (who is our President and CEO), are independent, as "independence" is defined by the SEC and the Nasdaq listing standards. Governance Spotlight Five of our seven director nominees have joined the Board since 2018. Board Refreshment We recognize the importance of Board refreshment. Directors are elected each year at our annual meeting of stockholders to hold office until the next annual meeting of stockholders and until their successors are elected and qualified. The NCG Committee regularly considers Board composition and how Board composition changes over time. The Board has not established a mandatory retirement age or term limits; however, pursuant to the Guidelines, the Board and the NCG Committee review, in connection with the process of selecting nominees for election at annual stockholder meetings, each director's continuation on the Board. Director Nomination Process The NCG Committee is responsible for identifying and evaluating Board nominees. In identifying candidates, the NCG Committee may take into account all factors it considers appropriate, which may include personal qualities and characteristics, individual character and integrity, mature judgment, career specialization, relevant technical skills and accomplishments, and the extent to which the candidate would fill a present need on the Board. Stockholder-Recommended Candidates. The NCG Committee will consider persons recommended by our stockholders for inclusion as Board nominees if the information required by our Bylaws is submitted in writing in a timely manner addressed and delivered to our Secretary. Stockholder-Nominated Candidates. Our Bylaws include a "Proxy Access for Director Nominations" provision that permits a stockholder, or a group of up to 20 stockholders, owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials Board nominees constituting up to two individuals or 20% of the Board (whichever is greater), provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in our Bylaws. Majority Voting Standard Our directors are elected by a majority of the votes cast for them in uncontested elections. If an incumbent director does not receive the requisite majority of votes cast, then the director is expected to submit his or her resignation to the Board. Based on the recommendation of the NCG Committee, the Board would determine whether to accept the resignation and would publicly disclose its decision and its rationale. A director who tenders his or her offer of resignation would abstain from any decision or recommendation regarding the offered resignation. Director Time Commitments Our directors may not serve on more than three other public company boards, unless it is determined, based on the individual facts, that such service will not interfere with service on the Board. In connection with evaluating these facts, the Chairman of the Board and Chair of the NCG Committee will consider the time commitment required by the director's service, if any, in leadership positions (e.g., board chair, committee chair, lead independent director, etc.) on the Board and any other public company board of directors. None of our director nominees serves on more than three other public company boards, and our CEO does not serve on any other public company board. We track the time commitments of our independent directors, and the NCG Committee reviews this information annually. Director Nominees The Board has seven members. Pursuant to the recommendation of the NCG Committee, the Board has nominated each current director for election at the 2025 Annual Meeting. If elected, each director nominee will hold office until the 2026 Annual Meeting and until his or her successor is elected and qualified. If any director nominee is unable or declines to serve as a director at the time of the 2025 Annual Meeting, the proxies will be voted for any director nominee designated by our current Board to fill the vacancy. We do not expect that any director nominee will be unable or will decline to serve as a director. Set forth below is information about each director nominee, including a description of his or her qualifications to serve on the Board and a listing of certain key skills and experiences from the Skills Matrix possessed by each director nominee. Age: 62 Director since: 2018 Independent Board committees: Audit Compensation Sustainability Background: Ms. Britt served as CFO of Perry Ellis International, Inc. from 2009 to 2017 and held senior financial leadership positions at Jones Apparel Group, Inc. (1993 to 2006) and Urban Brands, Inc. (2006 to 2009). Ms. Britt is a CPA and a member of the American Institute of Certified Public Accountants. She is also a Board Leadership Fellow, as designated by the National Association of Corporate Directors. Ms. Britt holds a Carnegie Mellon Cybersecurity Oversight Certification and a Harvard Kennedy School Executive Education Certificate in Cybersecurity: The Intersection of Policy and Technology. Other public company boards: Key Qualifications and Skills Include: urban-gro, Inc. Financial. Extensive corporate finance, investor relations, and capital markets VSE Corporation experience gained through service as a public company CFO and other senior Other public company boards within five years: Delta Apparel, Inc. financial roles; certified public accountant Public Company Board. Service on two other boards (see related caption) Risk Management. Certified public accountant; former public company CFO; holds multiple cybersecurity certifications (see above) Age: 59 Director since: 2021 ! n d e P e * d e I t Board committees: Compensation Sustainability Other public company boards: Background: Mr. Diaz served as President, CEO, and Chairman of Mitsubishi Motor North America, Inc. from 2018 to 2020 and as General Manager, Performance Optimization Global Marketing and Sales of Mitsubishi Motors Corporation in Tokyo, Japan from 2017 to 2018. He served in various executive level positions Wlth Nissan North America Inc. for four years and Chrysler Corporation LLC for 24 years, including as the President and CEO of the Ram Truck Brand and Chrysler of Mexico. Archer Aviation Inc. Key Qualifications and Skills Include: SiteOne Landscape Supply, Executive. Former President and CEO of Mitsubishi Motor North America, the Inc. Ram Truck Brand, and Chrysler of Mexico Valero Energy Corporation Manufacturing. Extensive operations experience gained through service as Other public company boards executive of multinational manufacturers, including Mitsubishi and Chrysler within five years: Public Company Board. Service on three other boards (see related caption) None Sales and Marketing. Former SVP, Sales & Marketing and Operations USA for Nissan North America and Head of National Sales of Ram Truck Brand Age: 62 Director since: 2023 Independent Board committees: Audit Compensation Sustainability Other public company boards: Mistras Group, Inc. Other public company boards within five years: Kaman Corp. Age: 78 Director since: 2004 Independent Board committees: Compensation NCG Other public company boards: American Outdoor Brands, Other public company boards within five years: Background: Ms. Lohmeier is a former senior advisor to the CEO of Spirit AeroSystems Holdings, Inc., having served in that position from 2019 to 2021. Prior to that, she had served as SVP and General Manager of Airbus Programs at Spirit AeroSystems. Before joining Spirit AeroSystems, Ms. Lohmeier held senior positions at Raytheon Company, including VP of the Land Warfare Systems product line at Raytheon Missile Systems. Previously, she was the program director at Raytheon for the design, development, and production implementation of the Standard Missile-6 weapon system for the U.S. Navy. She began her career with Hughes Aircraft Company as a system test engineer in 1985. Key Qualifications and Skills Include: Manufacturing. Extensive operations experience gained through roles with Spirit AeroSystems, Raytheon, and Hughes Aircraft Public Company Board. Service on another board (see related caption) Regulated Industry/Government. Extensive experience in the highly regulated aerospace and defense industries Background: Mr. Monheit served as Chairman of the Board from 2004 until the completion (on August 24, 2020) of the spin-off of our former outdoor products and accessories business (the "Separation"). Since the Separation, he has served as Chairman of American Outdoor Brands, Inc. From 2020 to July 2023, Mr. Monheit served as a Senior Managing Director of J.S. Held, LLC, a consulting company providing services in forensic accounting, fraud investigations, receivership and restructuring, and lost profit exams. He formerly served as President and CEO of Quest Resource Holding Corp., a publicly traded company, as a Senior Managing Director of FTI Palladium Partners, in various capacities with FTI Consulting, Inc., including President of its Financial Consulting Division, and as a partner with Arthur Andersen & Co., where he served as partner-in-charge of its New York Consulting Division and its U.S. Bankruptcy and Reorganization Practice. None Key Qualifications and Skills Include: Executive. Former CEO of Quest Resource; Division President of FTI Consulting; and partner of Arthur Andersen Financial. Retired certified public accountant; former partner of Arthur Andersen Public Company Board. Current Chairman of American Outdoor Brands, Inc. Age: 79 Director since: 1999 Independent Board committees: Audit NCG Other public company boards: None Other public company boards within five years: None Age: 49 Director since: 2020 Not Independent Board committees: None Other public company boards: None Other public company boards within five years: None Background: Mr. Scott has served as our Chairman since 2020. He also serves as Chairman of the National Shooting Sports Foundation ("NSSF"), and served from 2005 to 2008 on the board of directors of the Sporting Arms and Ammunition Manufacturers' Institute ("SAAMI"). Mr. Scott served as a consultant to us (2004 to 2006); our President (1999 to 2002); Chairman of our wholly owned subsidiary, Smith & Wesson Corp. (2003); and President of Smith & Wesson Corp. (2001 to 2002). From 1989 to 1999, he served as Vice President of Sales and Marketing and later as Vice President of Business Development of Smith & Wesson Corp. prior to its acquisition by us. Prior to that, Mr. Scott served in senior positions with Berkley & Company and Tasco Sales Inc., two leading companies in the outdoor industry. He previously served as a director of Primos Hunting, a leader in the hunting category, and OPT Holdings, a hunting accessories marketer. Key Qualifications and Skills Include: Executive. Our former President, VP of Sales and Marketing, and VP of Business Development Regulated Industry/Government. Extensive leadership experience in firearm and outdoor industries through affiliations with us, NSSF, SAAMI, Primos Hunting, and OPT Holdings Sales and Marketing. Our former VP of Sales and Marketing; previously served in senior sales roles with Berkley and Tasco Sales Background: Mr. Smith has served as our President and CEO and as a director since 2020. Since joining us in 2010, he has served in a number of roles with increasing responsibility, including Vice President of Supply Chain Management (2010 to 2011), Vice President of Manufacturing and Supply Chain Management (2011 to 2016), President, Manufacturing Services (2016 to 2020), and Co-President and Co-Chief Executive Officer (January 2020 to August 2020). Prior to joining us, Mr. Smith served as Director Supply Chain Solutions for Alvarez & Marsal Business Consulting, LLC (2007 to 2010), in various positions with Ecolab, Inc. (2001 to 2007) and as a Production Supervisor for Bell Aromatics (1999 to 2001). Key Qualifications and Skills Include: Executive. Our President and CEO Manufacturing. Extensive operations experience gained through roles with us, including as President, Manufacturing Services and VP of Manufacturing and Supply Chain Management, and Alvarez & Marsal Regulated Industry/Government. Extensive leadership experience in firearm industry through affiliation with us Age: 59 Director since: 2021 Independent Board committees: Audit NCG Background: Mr. Suggs has served as CEO of LCP Transportation LLC, a non-emergency medical transportation provider, since 2020. From 2014 to 2020, he served as President and CEO of Strategic Materials, Inc., a provider of environmental services. Mr. Suggs previously served in executive capacities with Belden, Inc., Danaher Corporation, and Public Storage Inc. Key Qualifications and Skills Include: Sustainability. Experience as President and CEO of Strategic Materials, a Other public company boards: leading glass and plastics recycler, as well as through service on board of Patrick Industries directors of Glass Packaging Institute, which focuses on sustainability Other public company boards within five years: None issues Manufacturing. Extensive operations experience gained through service as executive of Belden and Danaher Regulated Industry/Government. Experience as CEO of LCP Transportation, which operates in a heavily regulated industry, as well as leading organizations that serve highly regulated sectors, such as aerospace and defense BOARD AND COMMITTEE GOVERNANCE Risk Oversight The Board recognizes that risk is inherent in every business. As is the case in virtually all businesses, the Board recognizes that we face a number of risks, including operational, economic, financial, cybersecurity, legal, regulatory, and competitive risks. While our management is responsible for the day-to-day management of the risks we face, the Board, as a whole and through its committees, is responsible for the oversight of risk management. The Board's involvement in our business strategy and strategic plans plays a key role in its oversight of risk management, its assessment of management's risk appetite, and its determination of the appropriate level of enterprise risk. The Board receives updates at least quarterly from senior management and periodically from outside advisors regarding the various risks we face, including operational, economic, financial, cybersecurity, legal, regulatory, and competitive risks. The Board also reviews the various risks we identify in our SEC filings, as well as risks relating to various specific developments, such as new product introductions. In addition, the Board regularly receives reports from senior members of our Internal Audit function and our General Counsel and Chief Compliance Officer. Governance Spotlight Our Audit Committee Chair communicates directly with our Chief Compliance Officer at least quarterly (in between meetings of the Audit Committee) in order to enhance the Board's oversight of risk and the independence of our compliance function. See Part I, "Item 1A. Risk Factors," in our annual report on Form 10-K for fiscal 2025 (the "Form 10-K") to learn more about the risks we face. The risks described in the Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known or that may currently be deemed to be immaterial based on the information known to us also may materially and adversely affect our business, operating results, and financial condition. Given the nature of our business, the Board remains focused on overseeing risk management. During fiscal 2025, the Sustainability Committee discussed the campaign against the firearm industry at each of its meetings. Set forth below are the key responsibilities of the committees in assisting the Board in fulfilling its risk oversight role. AUDIT COMMITTEE COMPENSATION COMMITTEE • Oversees our financial and reporting processes and the audit of our financial statements Assists the Board with respect to: the oversight and integrity of our financial statements our compliance with legal and regulatory matters our policies and practices related to information security, including cybersecurity • • Considers the risk that our compensation policies and practices may have in attracting, retaining, and motivating valued employees Endeavors to ensure that it is not reasonably likely that our compensation plans and policies would have a material adverse effect on us Ncs COMMITTEE the independent registered public £ l CCOIJ F l tE I F I t ' S Oversees governance-related risk, such as board independence, conflicts of interest, and management and succession planning • qualification and independence the performance of the independent registered public accountant Meets separately on a regular basis with representatives of our independent registered publiC accountant and our internal audit function SUSTAINABILITY COMMITTEE e Reviews emerging risks associated with sustainability matters Cybersecurity Risk Oversight. We recognize the importance of cybersecurity risk governance. The Audit Committee receives regular reports from management on, among other things, the emerging cybersecurity threat landscape and our cybersecurity risks and threats. The Audit Committee regularly briefs the full Board on these matters. We maintain a Cyber Incident Response Plan. Board Leadership Structure We maintain separate roles between our CEO and Chairman in recognition of the differences between the responsibilities of these roles. The Board believes this leadership structure is the most effective for us at this time because it allows our CEO to focus on running our business and our Chairman to focus on pursuing sound governance practices that benefit the long-term interests of our stockholders. Board Committees The Board has four standing committees, each of which is comprised of independent directors: the Audit Committee, the Compensation Committee, the NCG Committee, and the Sustainability Committee. AUDIT COMMITTEE Members: Anita D. Britt (Chair) Michelle J. Lohmeier Robert L. Scott Denis G. Suggs Meetings in Fiscal 2025: 5 Member Independence: 4 of 4 All members meet the independence requirements of Nasdaq and Rule 10A-3 of the Exchange Act. The Board has determined that each member is an "audit committee financial expert" within the meaning of SEC regulations. Purpose: Overseeing our financial and reporting processes and the audits of our financial statements. Providing assistance to the Board with respect to its oversight of: the integrity of our financial statements; our compliance with legal and regulatory requirements; the independent auditor's qualifications and independence; the performance of our internal audit function, if any, and independent auditor; and our policies and practices related to information security, including cyber security, protection of personally identifiable information, and training of employees around such items. Preparing the report that SEC rules require be included in our annual proxy statement. Principal Responsibilities: Appointing, retaining, compensating, evaluating, and terminating any accounting firm engaged to prepare or issue an audit report or performing other audit, review, or attest services, and overseeing the work of such firm. Overseeing our accounting and financial reporting process and audits of our financial statements. COMPENSATION COMMITTEE Purpose: Members: Barry M. Monheit (Chair) Anita D. Britt Fred M. Diaz Michelle J. Lohmeier Meetings in Fiscal 2025: 7 Determining, or recommending to the Board for determination, the compensation of our CEO and other executive officers. Discharging the Board's responsibilities relating to our compensation programs and compensation of our executives. Producing an annual compensation committee report on executive compensation for inclusion in our annual proxy statement. Member Independence: 4 Of Principal Responsibilities: All members meet the independence Setting compensation for executive officers and directors. requirements of Nasdaq and qualify as "non-employee directors™ under Rule 16b-3(b)(3)(i) of the Exchange Act. Monitoring incentive- and equity-based compensation plans. Appointing, compensating, and overseeing the work of any compensation consultant, legal counsel, and other retained advisor. NCG COMMITTEE Members: Denis G. Suggs (Chair) Barry M. Monheit Robert L. Scott Meetings in Fiscal 2025: 4 Member Independence: 3 of 3 * All members meet the independence requirements of Nasdaq. Purpose: Selecting, or recommending to the Board for selection, the individuals to stand for election as directors at each election of directors. Overseeing the selection and composition of Board committees and, as applicable, overseeing management continuity planning processes. Principal Responsibilities: Developing and recommending to the Board corporate governance principles applicable to us. Overseeing the evaluation of the Board and management. Maintaining the Skills Matrix. SUSTAINABILITY COMMITTEE Purpose: Members: Fred M. Diaz (Chair) Anita D. Britt Michelle J. Lohmeier Meetings in Fiscal 2025: 4 Member Independence: 3 of 3 Assisting the Board and its committees in fulfilling the oversight responsibilities of the Board with various environmental policies and related operational control matters relevant to us. Principal Responsibilities: Reviewing the status and effectiveness of our environmental initiatives. Reviewing emerging risks and opportunities associated with sustainability. Meeting Attendance in Fiscal 2025 In fiscal 2025, the Board held seven meetings and its committees held a combined total of 20 meetings. Each director attended 75% or more of the aggregate of all meetings of the Board and the committees on which he or she served. We encourage our directors to attend our annual meetings of stockholders. All directors attended the 2024 Annual Meeting. Executive Sessions We regularly hold executive sessions in which independent directors meet without the presence or participation of management. Our Chairman serves as the presiding director of these executive sessions during Board meetings, and our committee chairs preside at the sessions held during committee meetings. Right to Call Special Meetings Our Bylaws provide stockholders owning a combined 25% of our outstanding shares of common stock the right to request a special meeting, provided that a requesting stockholder satisfies the requirements specified in our Bylaws. Stockholder Engagement We meet with investors throughout the year and consider investor feedback on emerging issues, which allows us to better understand their priorities and perspectives. This year-round engagement provides us with useful input and enables us to consider developments proactively. In addition, from time to time, we conduct stockholder outreach programs. Prior to the 2024 Annual Meeting, we requested meetings with the corporate governance teams of stockholders representing approximately 40% of our outstanding shares, as a result of which we engaged with the corporate governance teams of stockholders representing approximately 19% of our outstanding shares. We primarily discussed the stockholder proposal that was included in our proxy materials for the 2024 Annual Meeting and the progress we have made on various corporate governance initiatives. In the first half of 2025, we requested meetings with the corporate governance teams of stockholders representing 29% of our outstanding shares, as a result of which we engaged with teams at stockholders representing 11% of our outstanding shares. We used these meetings to, among other things, provide an update on the progress we have made on various corporate governance initiatives. Responding to Stockholder Engagement. We value the feedback that we receive from our investors and seek opportunities to respond to their feedback, when appropriate. For example, in response to stockholder feedback, we have expanded our public disclosures both in SEC-filed documents and through the publication of other relevant documents, such as our Environmental Factsheet, which we began publishing annually in 2021, and our Firearm Market Factsheet, which we published in 2022 and 2025. Copies of the Environmental Factsheet and the Firearm Market Factsheet are available on our website, https://www.smith-wesson.com . The information on our website is not part of this Proxy Statement. ADDITIONAL GOVERNANCE MATTERS Certain Relationships Unless delegated to the Compensation Committee by the Board, the Audit Committee charter requires the Audit Committee to review and approve all related party transactions and to review and make recommendations to the full Board, or approve, any contracts or other transactions with any of our current or former executive officers, including consulting arrangements, employment agreements, change-in-control agreements, termination arrangements, and loans to employees made or guaranteed by us. We have a policy that we will not enter into any such transaction unless the transaction is determined by our disinterested directors to be fair to us or is approved by our disinterested directors or by our stockholders. Any determination by our disinterested directors is based on a review of the particular transaction, applicable laws and regulations, our policies, and the Nasdaq listing standards. As appropriate, the disinterested directors of the applicable committees of the Board will consult with our legal counsel or internal auditor. There was no transaction during fiscal 2025, and there are no currently proposed transactions, in which we were or are to be a participant in which an executive officer, director, director nominee, a beneficial owner of 5% or more of our common stock, or any immediate family members of such persons had or will have a direct material interest. We have entered into indemnification agreements with each of our directors and executive officers that require us to indemnify such individuals, to the fullest extent permitted by Nevada law, for certain liabilities to which they may become subject as a result of their affiliation with us. Clawback Policy We maintain a compensation recovery, or clawback, policy. See "Compensation Matters - Compensation Discussion and Analysis - Additional Compensation Matters - Clawback Policy" for more information. Communicating with the Board Stockholders may communicate with the Board or specific directors, including our independent directors and the members of our board committees, by submitting a letter addressed to the Board of Directors of Smith & Wesson Brands, Inc., c/o any specified individual director or directors, at our principal executive offices. Corporate Political Contributions and Expenditures We have a policy to post on our website each fiscal year an annual report disclosing all political contributions or expenditures in the United States in excess of $50,000 that are not deductible as "ordinary and necessary" business expenses under Section 162(e) of the Internal Revenue Code, as amended (the "Code"). Non-deductible amounts generally include contributions to or expenditures in support of or opposition to political candidates, political parties, or political committees. Corporate Stewardship Policy We maintain a policy that discusses our objective of being a good corporate steward and our consideration of our responsibilities with respect to employee, safety, and governance risks, including the risks caused by the unlawful or improper use of firearms, and preserving the right to keep and bear Arms. Director and Officer Derivative Trading and Hedging We maintain a policy prohibiting our directors and officers, including our executive officers, and any family member residing in the same household, from engaging in derivatives trading and hedging involving our securities or pledging or margining our common stock. Policy on Inside Information and Insider Trading We maintain a policy governing the purchase, sale, and/or other disposition of our securities by our directors, officers, employees, and other covered persons. We believe this policy is reasonably designed to promote compliance with insider trading laws, rules, and regulations, and the exchange listing standards applicable to us. A copy of this policy is filed as Exhibit 19.1 to the Form 10-K. Whistleblower Policy We maintain a policy covering the policies and procedures for the receipt, retention, and treatment of complaints that we receive regarding accounting, internal controls, or auditing matters, and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters. DIRECTOR COMPENSATION The Compensation Committee, with advice from its independent compensation consultant, determines, or recommends to the Board for determination, the compensation of our directors. For fiscal 2025, the compensation consultant analyzed the competitive position of our director compensation program against the peer group used for executive compensation purposes and examined how each element of our director compensation program compared to those for peer group members. After reviewing these results and considering other factors, including unique challenges associated with serving on the board of directors of a firearm company, the Compensation Committee approved increasing the value of (i) the annual stock award to non-employee directors from $100,000 to $120,000; (ii) the annual retainer paid to each non-employee director from $70,000 to $87,000; and (iii) the additional retainers paid to our Chairman from $62,500 to $90,000, to non-Chair members of our Audit Committee from $8,000 to $10,000, and to non-Chair members of our other committees from $5,000 to $7,500. For fiscal 2025, we paid each non-employee director an annual retainer of $87,000. We also paid additional retainers to our Chairman, Chairs of our committees, and members of our committees as follows: Chairman 90,00 Chair, Audit Committee 25,0 Chair, Compensation Committee 25,00 Chair, NCG Committee 25,0 Chair, Sustainability Committee 25,00 Non-Chair Audit Committee Members 10,0 Non-Chair Compensation Committee Members 7,50 Non-Chair NCG Committee Members 7,5 Non-Chair Sustainability Committee Members 7,50 Each Board and committee member was entitled to receive an additional $1,500 per committee meeting attended in excess of seven meetings per year (for the Board and the Audit Committee), in excess of six meetings per year (for the Compensation Committee), in excess of four meetings per year (for the NCG Committee and the Sustainability Committee). No such payments were made in fiscal 2025, except for a $1,500 payment made to each of Mr. Monheit, Ms. Britt and Ms. Lohmeier for attending seven Compensation Committee meetings during fiscal 2025. We reimburse directors for travel and related expenses incurred in connection with attending Board and committee meetings. Mr. Smith receives no additional compensation for his service as a director. Each non-employee director receives a stock-based award to receive shares of our common stock in the form of restricted stock units ("RSUs"). Each non-employee director receives an RSU award on the date of his or her first appointment or election to the Board and then receives an RSU award at the Board meeting held immediately following our annual meeting of stockholders for that year. In fiscal 2025, each non-employee director received an annual RSU award for 9,111 shares of common stock. The RSUs vest one-twelfth each month after the grant. The following table sets forth the compensation paid by us to each non-employee director for fiscal 2025. Michelle J. Lohmeier Barry M. Monheit Robert L. Scott Mark P. Smith Denis G. Suggs 109,722 121,000 194,500 119,992 119,992 119,992 15,1 6,91 40,56 244, 247,9 355, 122,000 119,992 4,163 246,1 255,741 256,211 7,24 16,7 119,992 119,992 128,500 119,500 Anita D. Britt Fred M. Diaz As of April 30, 2025, each of the non-employee directors had the following number of stock awards outstanding, which represent undelivered shares underlying vested RSUs: Mr. Monheit 8,314, Mr. Scott 8,314; Ms. Britt 5,314; Mr. Diaz 5,314, Ms. Lohmeier 5,314, and Mr. Suggs 5,314. As of April 30, 2025, there were no stock options outstanding for the directors. The amounts shown in this column represent the grant date fair value for stock awards granted to the directors calculated in accordance with Accounting Standards Codification ("ASC") Topic 718. The assumptions used in determining the grant date fair value of these awards are set forth in Note 12 to our consolidated financial statements, which are included in the Form 10-K. Consists of costs for certain products provided without cost, spousal travel, and dividends paid on shares delivered within fiscal year. Consists of costs for certain products provided without cost and dividends paid on shares delivered within fiscal year. Consists of reimbursement of medical coverage costs, costs for certain products provided without cost, spousal travel, and dividends paid on shares delivered within fiscal year. We maintain stock ownership guidelines for our directors and executive officers. See "Compensation Matters - Compensation Discussion and Analysis - Additional Compensation Matters - Stock Ownership and Retention Requirements." COMPENSATION MATTERS PROPOSAL TWO - ADVISORY VOTE ON EXECUTIVE COMPENSATION What Am I Voting On? The Board is asking our stockholders to approve, on an advisory basis, the compensation of our NEOs as disclosed in this Proxy Statement Voting Recommendation: FOR the advisory vote on the compensation of our NEOs for fiscal 2025 Vote Required: The affirmative vote of a majority of the votes cast is required to approve the proposal Broker Discretionary Voting Allowed† No - broker non-votes have no effect Abstentions: No effect Pursuant to SEC rules, our stockholders are being asked to approve, on an advisory basis, the compensation of our NEOs as disclosed in this Proxy Statement. We have recently received high levels of support from our stockholders on advisory votes to approve executive compensation. 2024: 95 0 /o 2023: 97 0 /o 2022: 95 0 /o As described in the Compensation Discussion and Analysis section, we believe our compensation policies and procedures are competitive, focused on pay-for-performance principles, and aligned with the long-term interests of our stockholders. Our executive compensation philosophy is to pay base salaries to our executive officers at levels that, in the context of unfavorable industry factors beyond the control of management, enable us to attract, motivate, and retain highly qualified executives. Our executive compensation program is designed to link annual performance-based cash incentive compensation to the achievement of pre-established performance objectives, based primarily on our financial results and achievement of other corporate goals. Consistent with our pay-for-performance philosophy: Our NEOs received no annual cash incentive for fiscal 2025 because we failed to achieve the threshold target for Adjusted EBITDAS. Our NEOs received none of the target shares of common stock for the PSU portion of the stock-based award in 2022 because we failed to meet the minimum performance requirements. The advisory vote on this resolution is not intended to address any specific element of compensation; rather, it relates to the overall compensation of our NEOs, as well as the compensation philosophy, policies, and practices described in this Proxy Statement. Our stockholders may vote for or against, or abstain from voting on, the following resolution: RESOLVED, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company's named executive officers, as disclosed in the Compensation Discussion and Analysis, executive compensation tables, and narrative discussion set forth in the Proxy Statement for the 2025 Annual Meeting of Stockholders. This advisory vote will not be binding on the Board. The Compensation Committee will, however, take the outcome of the vote into account when considering future executive compensation decisions. We provide our stockholders with this advisory vote on an annual basis and expect that the next such vote will occur at the 2026 Annual Meeting. 2025 Proxy Statement 117 COMPENSATION DISCUSSION AND ANALYSIS EXECUTIVE SUMMARY Named Executive Officers This section describes our executive compensation program, outlines the core principles behind that program, and reviews the actions taken by the Compensation Committee concerning the fiscal 2025 compensation of the following NEOs: President and CEO Mark P. Smith Deana L. McPherson Executive Vice President, CFO, Treasurer, and Assistant Secretary Kevin A. Maxwell Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary Susan J. Cupero( 1 * Vice President, Sales (1) Ms. Cupero retired from the Company effective May 4, 2025. Program Emphasis Our executive compensation program emphasizes our pay-for-performance philosophy and is designed to help us attract, motivate, and retain highly qualified executives. Compensation Governance and Practices Our executive compensation program demonstrates our ongoing commitment to good corporate governance practices and aligns our executive officers' interests with those of our stockholders. Risk Mitigation Clawback policy Stock ownership guidelines Derivatives trading and hedging policy Annual review of compensation plans and policies includes risk assessment Program Features Annual say-on-pay advisory vote Independent compensation consultant "Double trigger" vesting acceleration in the event of a change-in-control No tax gross ups in connection with severance or change-in control payments Say-on-Pay Results We have recently received high levels of support from our stockholders on advisory votes to approve executive compensation. At the 2024 Annual Meeting, 95% of the votes cast were in favor of the advisory vote to approve executive compensation. Based on these high levels of support, the Compensation Committee determined not to make any material changes to our executive compensation program, except certain changes to our long-term incentive compensation structure (as described below). 2024: 95% 2023: 97 0 /o 2022: 95 0 /o Summary of Fiscal 2025 Compensation Program The following highlights aspects of our fiscal 2025 compensation program: Base Salary - Consistent with past practice, in April 2024, the Compensation Committee, with advice from its independent compensation consultant, reviewed the base salaries of our executive officers and compared them with peer group and broad market data. The Compensation Committee adjusted base salary levels to pay competitively in comparison to comparable positions at our peer group, to enhance retention value, to reflect executive performance, and to take into account cost-of-living factors. In fiscal 2025, base salary increases for our NEOs ranged from 11.6% to 15.0%. For the fiscal year ending April 30, 2026 ("fiscal 2026"), the Compensation Committee determined not to increase the base salaries of our NEOs . Annual Cash Incentive Bonuses - Our executive annual cash incentive program for fiscal 2025 continued to focus on the achievement of objective annual financial goals; specifically, Net Sales and Adjusted EBITDAS. NEO annual target cash incentive compensation as a percentage of base salary was 100% for our CEO, 75% for our CFO, and 65% for our other NEOs. When setting the financial performance goals at the beginning of fiscal 2025, the Compensation Committee considered the difficult and unpredictable environment for our business and the relative lack of control that our management has over external, social, political, health, and economic factors that impact us. In accordance with our pay-for-performance philosophy, our NEOs received no bonus payment for fiscal 2025 because we failed to achieve the threshold target for Adjusted EBITDAS. Long-Term Incentive Compensation - Consistent with past practice, the Compensation Committee granted stock-based awards to our executive officers in fiscal 2025, consisting of a mix of RSUs and PSUs. For fiscal 2025, the Compensation Committee made two changes to the stock-based awards. First, the Compensation Committee changed the mix of RSUs and PSUs from 40%/60% to 50%/50% in order to better align with broader market practices and enhance the retention quality of the equity awards. The RSUs granted during fiscal 2025 vest over four years with one-fourth vesting on each anniversary of the grant date. Second, the Compensation Committee changed the performance metric for PSUs from the relative performance of our common stock compared with the performance of the Russell 2000 Index (the "RUT") to Adjusted EBITDAS growth, with a modifier driven by the relative performance of our common stock compared with the performance of the RUT. EXECUTIVE COMPENSATION PROGRAM OVERVIEW Philosophy and Objectives Our executive compensation philosophy is to pay base salaries to our executive officers at levels that, in the context of unfavorable industry factors beyond the control of management, enable us to attract, motivate, and retain highly qualified executives. Our executive compensation program is designed to link annual performance-based cash incentive compensation to the achievement of pre-established performance objectives, based on our financial results. Similarly, our executive compensation program is designed so that stock-based compensation focuses our executive officers' efforts on increasing stockholder value by aligning their economic interests with those of our stockholders. Total compensation levels for our executive officers reflect corporate positions, responsibilities, and the achievement of performance objectives. Due to our pay-for-performance philosophy, realized compensation levels may vary significantly from year-to-year and among our executive officers. Goals Our executive compensation program's objectives include: Attracting, motivating, and retaining highly qualified executives, especially in the context of challenging business conditions. Reflecting our culture and approach to total rewards, which include health and welfare benefits, a safe work environment, and professional development opportunities. Reflecting our "pay-for-performance" philosophy. Providing a rational and consistent approach to compensation that is understood by senior leadership. Aligning compensation with our interests, as well as those of our stockholders. Recognizing corporate stewardship and fiscal responsibility. ADMINISTRATION The Board has appointed a Compensation Committee, consisting exclusively of independent directors. The charter of the Compensation Committee authorizes the Compensation Committee to determine and approve, or to make recommendations to the Board with respect to, the compensation of our CEO and other executive officers. The Board has authorized the Compensation Committee to make all decisions with respect to executive compensation, including determining and approving the base salary of our CEO and other executive officers. The Compensation Committee also establishes annual cash and stock-based incentive compensation programs for our CEO and other executive officers and provides our executives with variable compensation opportunities, a majority of which is based on the achievement of key operating measures determined at the beginning of the fiscal year. Once the Compensation Committee determines key operating measures for an upcoming fiscal year, the measures generally are not subject to material changes during the fiscal year. The Compensation Committee, with advice from its independent compensation consultant, also determines the compensation of our directors. Role of the Compensation Committee and our CEO The Compensation Committee determines the compensation of our executive officers, including our CEO, at least annually in light of the goals and objectives of that fiscal year's compensation program. Together with our CEO, the Compensation Committee annually assesses the performance of our other executive officers. After receiving recommendations from our CEO, the Compensation Committee, with input from its independent compensation consultant, determines the compensation of our other executive officers. In determining executive officer compensation levels, the Compensation Committee periodically reviews compensation levels of executives of companies deemed to be generally similar to ours based on their size, industry, and competitive factors. The Compensation Committee uses this peer group information, as well as published executive compensation survey data from a broader group of companies with similar revenue to ours, as points of reference; however, the Compensation Committee does not benchmark or target our compensation levels to a specific percentile against this competitive information. At the invitation of the Compensation Committee, our CEO may attend portions of Compensation Committee meetings, except those at which his compensation is discussed or determined. This enables the Compensation Committee to review with him the goals he regards as important to our business and to receive his assessment of the performance of, and goals for, our other executive officers. However, the Compensation Committee, with the assistance of its independent compensation consultant, rather than our CEO, determines goals, targets, and compensation for our other executives. Role of the Independent Compensation Consultant The Compensation Committee has sole discretion to retain a compensation consultant and is directly responsible for its appointment, compensation, and the oversight of its work. The Compensation Committee retains a compensation consultant to assist in setting the design and goals of the executive compensation program, to review trends in executive compensation, to identify relevant peer companies, and to conduct an assessment and analysis of executive market compensation. The compensation consultant reports directly to the Compensation Committee. Compensia, Inc. served as the Compensation Committee's independent compensation consultant for fiscal 2025. For fiscal 2025, the compensation consultant identified peer group companies, provided a compensation assessment and analysis of those companies, determined the positioning of each executive officer's compensation by element among the peer companies and the survey data, developed recommendations and guidelines for the structure of our executive compensation program, assisted with designing the 2025 Bonus Plan (as defined below) and the PSU awards, reviewed director compensation, advised the Compensation Committee regarding the appropriateness of our executive compensation program, and assisted the Compensation Committee with its annual compensation risk assessment. In addressing Compensia's independence in light of applicable SEC rules and Nasdaq standards, the Compensation Committee considered relevant factors and concluded that Compensia is independent and the engagement would not raise any conflicts of interest under the applicable rules and standards. Peer Group for Fiscal 2025 The Compensation Committee's independent compensation consultant identified for the Compensation Committee a peer group for fiscal 2025. In recommending peer companies for the Compensation Committee's final review, the consultant identified companies deemed generally relevant to us with a focus on those in the leisure industry and consumer sporting products companies primarily in the consumer discretionary GICS industry sector. Within these industries, the consultant used a "rules-based" approach to select companies based on similar financial characteristics; specifically, the consultant targeted companies with revenue from approximately $260 million to $1 billion and a market capitalization from approximately $204 million to $1.8 billion. The consultant proposed, and the Compensation Committee adopted, changes to the peer group for fiscal 2025 in order to improve our alignment with the peer group's median revenue and market capitalization selection criteria. Specifically, the Compensation Committee added five companies (Cadre Holdings, Inc., Clarus Corp., Marine Products Corp., National Presto Industries Inc., and XPEL, Inc.) to the 2025 peer group and removed five companies (Lifetime Brands, Inc., MarineMax, Inc., OneWater Marine Inc., Universal Electronics Inc., and Wolverine World Wide, Inc.) - a sixth company (Vista Outdoor Inc.) was removed from the peer group and designated a "reference peer", meaning the Compensation Committee could refer to its compensation information to understand the broader market and differences in pay for companies of different financial size. MasterCraft Boat Holdings, Inc. Cadre Holdings, Inc. Clarus Corp. Motorcar Parts of America, Inc. Ethan Allen Interiors, Inc. Movado Group, Inc. Go Pro, Inc. National Presto Industries Inc. Haverty Furniture Companies, Inc. Quanex Building Products Corp. Hooker Furniture Corporation Standard Motor Products iRobot Corporation Standex International Corporation Johnson Outdoors Inc. Stoneridge, Inc. Marine Products Corp. Sturm, Ruger & Company, Inc. Malibu Boats, Inc. XPEL, Inc. COMPENSATION ELEMENTS Our executive compensation program consists primarily of base salary, annual performance-based cash incentive compensation opportunities, stock-based compensation, and severance benefits, together with health and welfare benefits generally available to most employees and our other executives, and limited perquisites. The Compensation Committee considers each element of compensation individually and collectively with other elements of compensation when establishing the various forms, elements, and levels of compensation for our executive officers. Our fiscal 2025 executive compensation program included the following direct compensation components: base salary, annual performance-based cash incentives, and stock-based compensation. Form of Compensation Cash Equity Fixed Performance-Based Performance- Time-Based Based Performance Timing Short-Term Emphasis Long-Term Emphasis Key Performance Metrics Applicable Net Sales; Adjusted EBITDAS Adjusted Measurement Period Annual and Ongoing 1 year Vests at end of 3-year period Vests 25% each year over 4-year period EBITDAS growth; Relative TSR Stock Price Determination of Performance-Based Payouts - Formulaic Formulaic Base Salaries Base salaries are designed to provide competitive levels of compensation to our executives based on their position, responsibilities, skills, experience, performance, and contributions. The Compensation Committee also considers individual performance and contributions, future potential, competitive salary levels for comparable positions at other companies, salary levels relative to other internal positions, corporate needs, and the advice of its independent compensation consultant. The Compensation Committee's evaluation of these factors is subjective, and it does not assign a particular weight to any one factor. Given the high-profile nature of our industry, it has become increasingly difficult to attract, motivate, and retain highly qualified individuals willing to be associated with us and our industry. The Compensation Committee has become increasingly aware of the impact this factor has had not only on existing and potential future employees, but also the pressures this factor places on the families of these individuals. Fiscal 2025 Base Salaries. The Compensation Committee generally sets base salaries for our executive officers at the beginning of the fiscal year. Based on an evaluation of the factors listed above, the Compensation Committee's desire to reward and retain our executive officers, the general industry range for base salary increases, and the Compensation Committee's desire to increase the competitiveness of our base salaries as measured against the peer and market data, the Compensation Committee set our NEOs' annual base salaries for fiscal 2025 as follows: Mark P. Smith 743,000 850,0 14.4% Deana L. McPherson 424,000 475,00 12.0% Kevin A. Maxwell 361,000 415,0 15.0% Susan J. Cupero 318,000 355,00 11.6% The Compensation Committee adjusted base salary levels to pay competitively in comparison to comparable positions within our peer group, to enhance retention value, to reflect executive performance, and to take into account cost-of-living factors. Ms. Cupero retired from the Company effective May 4, 2025. For fiscal 2026, the Compensation Committee determined not to increase the base salaries of our NEOs. Annual Performance-Based Cash Incentive Compensation Annual performance-based cash incentive compensation is designed to motivate our executives and reward the achievement of specific performance goals that support our business strategy. In designing the cash incentive compensation plan for any particular year or period, the Compensation Committee establishes performance objectives, based primarily on our financial results and the achievement of other corporate goals. In limited cases, the Compensation Committee may consider individual objectives, responsibilities, and performance in determining the amounts payable, but it did not do so in fiscal 2025. The Compensation Committee determines the target annual compensation opportunities for our executive officers, with these opportunities being subject to change from year to year based on its periodic review of economic, industry, and competitive data; changes in individual responsibilities; and our overall compensation philosophy. The Compensation Committee confirms, with its independent compensation consultant and our independent audit firm, the achievement of the objectives and approves the payment, if any, of annual cash incentive compensation in the first quarter of the following fiscal year. Fiscal 2025 Executive Annual Cash Incentive Program. In April 2024, the Compensation Committee established the 2025 Executive Annual Bonus Plan, a performance-based cash incentive compensation plan for our executives, including our NEOs (the "2025 Bonus Plan"). The 2025 Bonus Plan provided each participant an opportunity to earn cash incentive compensation based on attaining pre-established objective financial performance metrics and, from time to time, individual performance goals. Each participant was assigned an incentive bonus opportunity expressed as a percentage of base pay and objective financial performance metrics were established with varying weightings totaling 100%. For each metric, threshold, target, and maximum performance levels were set. Final cash incentive compensation was calculated by multiplying each participant's target percentage by the weighted average percentage calculated for each metric. Cash incentive compensation could not exceed 200% of a participant's target bonus opportunity, and eligibility for payment of any award was subject to the participant continuing to be employed by us through the end of the fiscal year. Fiscal 2025 Performance Metrics. For fiscal 2025, the Compensation Committee established Net Sales and Adjusted EBITDAS as the performance metrics for our executives, with a weighting of 40% for Net Sales and 60% for Adjusted EBITDAS. Adjusted EBITDAS also served as the threshold for which the failure to achieve this performance metric would result in no bonus payments regardless of the achievement of the other performance metric. The target award percentages for fiscal 2025 as a percentage of base pay were 100% for Mr. Smith, 75% for Ms. McPherson, and 65% for Mr. Maxwell and Ms. Cupero. There were no individual performance goals. For these purposes, "Adjusted EBITDAS" means our net income as reported in the Form 10-K adding back interest, taxes, depreciation, amortization, non-cash stock compensation expense, and any nonrecurring expenses as determined by the Compensation Committee as set forth in the 2025 Bonus Plan or at any time thereafter. For fiscal 2025, the Compensation Committee determined to include the following nonrecurring expenses: (i) accelerated expenses related to the refinance of our credit facility, if any; (ii) fair value inventory step-up and backlog expense; (iii) all acquisition or merger related expenses associated with negotiating, conducting diligence, and closing for any acquired company or merger; (iv) any costs associated with the move of our headquarters and significant elements of our operations to Maryville, Tennessee (the "Relocation"), including severance, relocation, recruiting, construction, and duplication of costs; (v) changes in contingent consideration; (vi) impairment charges for goodwill, tangible, or intangible assets; (vii) costs incurred relating to shareholder activism; (viii) any gain or loss incurred in an asset sale or disposal, which sale or disposal is approved by the Board; (ix) costs directly related to inventory that cannot be sold or otherwise used by us, which unsaleable or unusable inventory is the result of a change in federal firearms law; and (x) any costs/impact related to the implementation of any new accounting pronouncements that become effective during the fiscal year. The Compensation Committee also determined that the proceeds from the sale of certain intangible assets would not be deducted. To the extent practicable, each amount was calculated based upon the numbers used in the audited financial statements and, if possible, in the same amount as reported in the Form 10-K. The financial performance metrics established under the 2025 Bonus Plan were as follows: Net Sales 570,22 200.0% 115.0% Adjusted EBITDAS 102,002 200.0% 115.0% The failure to reach the threshold metric of at least $86,702, or 85.0% of target, for the Adjusted EBITDAS metric would result in no bonus payments regardless of the achievement of the Net Sales metric. In fiscal 2025, Net Sales and Adjusted EBITDAS, for purposes of compensation, were $474.7 million and $67.3 million, respectively, compared with $535.8 million and $96.6 million, respectively, in the fiscal year ended April 30, 2024. The table below sets forth for each NEO the annual fiscal 2025 base salary, the target bonus percentage, the annualized target cash bonus opportunity, and the actual bonus paid for fiscal 2025 reflected as a percentage of target bonus opportunity and in cash: Mark P. Smith 850,000 100% 850,0 0.0% Deana L. McPherson 475,000 75% 356,25 0.0% Kevin A. Maxwell 415,000 65% 26 0.0% Susan J. Cupero 355,000 65% 230,75 0.0% Stock-Based Compensation Our stock-based compensation is comprised of both RSUs and PSUs. We believe stock-based compensation is critical in aligning our executives' and stockholders' interests. Together, we believe that these incentives focus our executives on making decisions that will benefit our stockholders. The Compensation Committee believes in tying executive rewards directly to our long-term success and focusing our executives' efforts on increasing stockholder value by aligning their interests with those of our stockholders. Our stock-based compensation enables our executives to earn and maintain a significant stock ownership position in the Company. The amount of stock-based compensation granted takes into account our performance; the grant date value of awards; previous grants to an executive officer; an executive officer's position; the performance, contributions, skills, experience, and responsibilities of the executive officer; the cost to us; the executive officer's total compensation in relation to peers at our peer companies; and other factors that the Compensation Committee deems necessary or appropriate from time to time, including retention, overhang, and burn rate. The Compensation Committee generally sets the vesting schedule for RSUs over multiple year periods to encourage executive retention. The Compensation Committee generally establishes multi-year performance requirements for the earning of PSUs to reward long-term Company performance. PSUs have historically been earned only based on the relative performance of our common stock in comparison to the RUT's performance. For fiscal 2025, the Compensation Committee changed the performance metric for PSUs to Adjusted EBITDAS growth, with a modifier driven by the relative performance of our common stock compared with the performance of the RUT. In addition, we generally maintain a value cap on PSUs. We changed the design of the PSU awards to (i) provide an additional performance metric to evaluate longterm performance, (ii) focus on our Adjusted EBITDAS growth over a multi-year period, as we believe this is a key metric to measure our success, and (iii) more closely align Company performance with executive rewards in light of our stock price historically having a high degree of volatility in comparison to the RUT. Given the high-profile nature of our industry, it has become increasingly difficult to attract, motivate, and retain highly qualified individuals willing to be associated with us and our industry. The Compensation Committee continues to recognize the importance of long-term incentive stock-based compensation as a factor in retaining our key executives. Timing oF Stock-Based Awards. The Compensation Committee sets the value of RSUs and PSUs at the fair market value of our common stock, which, for annual awards, is the average closing price of our common stock on Nasdaq for the five-day period ending on the effective date of grant and, for new hires or special awards, is the closing price of our common stock on Nasdaq on the effective date of grant. The Compensation Committee generally grants stock-based compensation to our executive officers annually within the same time frame each year. In the case of new hires, grant prices generally are determined by the closing price of our common stock on the 15th day of the month following the date on which the employee reports for service. Dividend Equivalent After consulting with the Compensation Committee's independent compensation consultant and reviewing the practices of a peer group competitor, among other factors, in September 2023 the Compensation Committee granted dividend equivalents to directors and NEOs effective immediately with respect to outstanding RSU awards and future RSU awards. Dividends on those awards will not pay out unless and until the awards vest. Fiscal 2025 Stock-Based Compensation. During fiscal 2025, grants of annual stock-based compensation to our NEOs consisted of RSUs and PSUs, with a weighting of 50% for RSUs and 50% for PSUs. In determining the equity awards granted to each executive officer, the Compensation Committee considered the factors discussed above. During fiscal 2025, we granted the following RSUs and PSUs to our NEOs: Mark P. Smith 82,489 32,995 82,488 181, Deana L. McPherson 25,041 10,016 25,040 55,0 Kevin A. Maxwell 17,676 7,070 17,675 38,8 Susan J. Cupero 17,676 7,070 17,675 38,8 RSUs granted in fiscal 2025 vest one-fourth following each of the first, second, third, and fourth anniversaries of the grant date, in line with market practice and to provide retentive value. PSUs granted in fiscal 2025 vest at the end of a three-year performance period, with the primary performance metric being Adjusted EBITDAS Growth, subject to a modifier (+/- 10%) based on rTSR. Adjusted EBITDAS Growth will be measured over three successive (and equally weighted) one-year periods during the performance period, with each year's target being set at the beginning of the applicable year based on 5% Adjusted EBITDAS Growth from the prior year. Performance in each one-year period will be compared to the following payout scale: >10% 200 5 100 1 50 <1% 0 "To the extent performance falls between these goal levels, the actual percentage of the award that will vest will be interpolated on a linear basis, with the corresponding number of vested award units resulting from such determination rounded up to the next whole unit. For the avoidance of doubt, no award units will vest if performance is below 1% and any performance in excess of the maximum goal level will not result in vesting in excess of 200% of the target award. At the end of the three-year performance period, the Compensation Committee will determine the average annual Adjusted EBITDAS Growth % and the payout (as determined in accordance with the scale above) for each of the three one-year periods during the performance period, which amount will be multiplied by a rTSR modifier, which may increase or decrease the final payout by up to 10%. For these purposes, "Adjusted EBITDAS Growth" means the year-over-year increase in our net income as reported in the Form 10-K, adjusted to add back interest, taxes, depreciation, amortization, non-cash stock compensation expense, and any non-recurring expenses as determined by the Compensation Committee. For the fiscal 2025 awards, the Compensation Committee determined Adjusted EBITDAS Growth to include the following non-recurring expenses: (i) accelerated expenses related to the refinance of our credit facility, if any; (ii) fair value inventory step-up and backlog expense; (iii) all acquisition or merger related expenses associated with negotiating, conducting diligence, and closing for any acquired company or merger; (iv) any costs associated with the Relocation, including severance, relocation, recruiting, construction, and duplication of costs; (v) changes in contingent consideration; (vi) impairment charges for goodwill, tangible, or intangible assets; (vii) costs incurred relating to shareholder activism; (viii) any gain or loss incurred on a sale or disposal of a product line, which sale or disposal is approved by the Board; (ix) costs directly related to inventory that cannot be sold or otherwise used by us, which unsaleable or unusable inventory is the result of a change in federal firearms law; (x) any costs/impact related to the implementation of any new accounting pronouncements that become effective during the fiscal year; and (xi) the one-time settlement costs related to a Massachusetts wage and hour case. The Compensation Committee also determined that the proceeds from the sale of certain intangible assets would not be deducted. To the extent practicable, each amount would be calculated based upon the numbers used in the audited financial statements and, if possible, in the same amount as reported in the Form 10-K. The final payout will be modified up or down by up to 10% based on the relative performance of our common stock compared with the performance of the RUT. The performance of our common stock

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