Blue Bird Corp

This management proposal asks stockholders to approve an amendment and restatement of Blue Bird’s 2015 Omnibus Equity Incentive Plan that (i) increases the total share reserve available for awards by 900,000 shares from 5,200,000 to 6,100,000, (ii) increases the maximum number of shares that may be issued as Full Value Awards by 900,000 shares (from 2,500,000 to 3,400,000), and (iii) extends the plan’s term to November 21, 2035. Management is seeking shareholder approval because NASDAQ rules and federal tax rules require stockholder consent for these types of increases and material amendments to equity compensation plans; without approval the company would be limited in granting equity awards and potentially unable to make additional grants within a year. The Board frames the proposal as essential to the company’s ability to attract and retain talent by offering competitive equity awards (noting a recent shift toward RSUs and full-value awards), to align executives’ and employees’ interests with long-term stockholder value, and to avoid increasing cash compensation in lieu of equity. The proposal includes protective features management highlights for stockholders — no evergreen provision, prohibition on repricing without stockholder approval, limits on non-employee director compensation, clawback/forfeiture provisions, stock ownership guidelines, and administration by an independent Compensation Committee — intended to mitigate dilution and governance concerns. Management also explains the Committee’s process in determining the size of the request, including use of an independent compensation consultant and consideration of burn rate, projected recruiting needs, outstanding awards, stock price/volatility, and proxy advisory guidelines. Approving the amendment will permit the company to file an S-8 to register the newly authorized shares and continue making equity grants as part of its total compensation strategy. The Board unanimously recommends a FOR vote, arguing that failure to approve would materially disadvantage Blue Bird in recruiting and retaining key personnel and could force an undesirable shift toward higher cash compensation. Institutional investors and proxy advisors will likely focus on the increase in full-value shares and the absence of an evergreen mechanism; the inclusion of governance safeguards and independent committee administration are management’s responses to those potential concerns. Finally, shareholders should weigh the expected dilution from the additional authorized shares against the operational and retention benefits management ties to long-term value creation.

This management proposal requests stockholder approval to amend the company’s Certificate of Incorporation to add officer exculpation language consistent with amendments to Section 102(b)(7) of the Delaware General Corporation Law that permit corporations to limit officer liability for breaches of the duty of care in direct stockholder actions to the fullest extent permitted by Delaware law. Management seeks this charter amendment to align protections for officers with existing director protections, citing recruitment and retention benefits, reduced distractions and litigation risk for officers making business decisions, and better alignment of incentives to pursue stockholder interests. The amendment explicitly excludes exculpation for breaches of the duty of loyalty, acts or omissions not in good faith or involving intentional misconduct or knowing violations of law, and transactions where an officer derived an improper personal benefit; it also preserves corporate and derivative claims by or in the right of the corporation. The Board’s rationale emphasizes the practical realities of modern litigation and the potential deterrent effect that exposure to duty-of-care claims could have on highly qualified officer candidates, asserting that charter exculpation will mitigate those concerns while preserving key fiduciary protections. The proposal will amend a specific section (Article VIII, Section 8.1) to clarify that references to “officer” are limited to the definition in Delaware law and to ensure the amendment will not adversely affect exculpation rights for acts occurring prior to any future amendments. Because the amendment could influence the company’s exposure in certain types of suits and change the risk calculus for officers, institutional investors may scrutinize the narrowness of the carve-outs and the safeguards described by management; the Board underscores that this change does not eliminate liability for bad-faith or disloyal conduct. The required vote is a majority of outstanding voting power, and the Board unanimously recommends approval, emphasizing recruiting and governance alignment benefits while noting the Board retains discretion over whether and when to file the Certificate of Amendment even if stockholders approve.

This management proposal seeks a non-binding, advisory approval from stockholders for the compensation of the company’s Named Executive Officers as disclosed in the CD&A and related compensation tables. Management and the Compensation Committee present the program as pay-for-performance: a significant portion of executive pay is variable and equity-based (including RSUs and performance-based awards) and short-term incentives are tied to Adjusted EBITDA and individual objectives. For fiscal 2025 the Committee used Adjusted EBITDA as the primary financial metric and established threshold, target and maximum payout levels, with actual performance substantially exceeding target and resulting in high payout levels; the Committee also adjusted base salaries and granted long-term incentives to align retention and market competitiveness and provided sign-on and transition arrangements related to the CEO change. The vote is advisory and non-binding, but the Compensation Committee states it will consider the vote outcome when making future compensation decisions; the Board recommends an annual say-on-pay and specifically recommends stockholders vote “FOR” the current NEO compensation disclosures. Key investor considerations include the magnitude of payouts tied to exceptional Adjusted EBITDA performance in 2025, the structure and vesting mechanics of performance-based RSUs, CEO sign-on and transition arrangements, and the company’s clawback and governance safeguards; proxy advisory firms and large institutional holders will weigh these features in assessing the proposal. Management frames the program as necessary to attract and retain executive talent and to incentivize achievement of multi-year strategic goals, and emphasizes the Committee’s use of an independent compensation consultant and stockholder outreach to inform plan design. Given the advisory nature of the vote, a strong affirmative result would validate the Committee’s approach; a weak result would likely prompt further shareholder engagement and potential design changes by the Committee.

This management proposal asks stockholders to indicate, on a non-binding advisory basis, the preferred frequency—one, two, or three years—for future advisory say-on-pay votes. The Board has recommended that the vote be held every year, reasoning that an annual advisory vote provides more frequent stockholder feedback and allows management and the Compensation Committee to respond promptly to investor sentiment and governance developments. The choice is advisory, so the Board will consider the outcome but is not legally bound by it; nonetheless, many institutional investors expect companies to adopt the frequency supported by the majority. Management’s recommendation for annual votes reflects a governance posture favoring ongoing engagement and regular accountability; proponents of less frequent votes typically argue that multi-year cycles allow time to implement long-term pay programs and reduce administrative costs. The proposal is likely to be evaluated by institutional holders in light of the company’s recent engagement record and the results of the 2023 say-on-pay approval; the Board references prior strong approval and ongoing stockholder outreach. If stockholders prefer a one-year frequency, the company will continue to hold annual advisory votes and use the results to guide compensation decisions; if the vote indicates another frequency, the Board will weigh investor preferences alongside the benefits of timely feedback when setting its policy. Given prevailing investor governance norms, a vote for annual frequency aligns with many institutional investor expectations and with the Board’s stated commitment to responsiveness and transparency.