aaon-20230330

SCHEDULE 14A

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_______________________AAON, INC.________________________

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AAON, INC.

Notice of

Annual Meeting

May 16, 2023

and

Proxy Statement

AAON, INC.

NOTICE OF 2023 ANNUAL MEETING OF STOCKHOLDERS

May 16, 2023

Notice is hereby given that the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of AAON, Inc., a Nevada corporation (the “Company”), will be held on Tuesday, May 16, 2023 at 10:00 A.M. (Local Time), at 2440 South Yukon Avenue, Tulsa, Oklahoma, for the following purposes, as more fully described in the accompanying proxy statement (“Proxy Statement”):

1. To elect three Class II Directors for terms ending in 2026;

2. To approve (on a non-binding, advisory basis) the compensation of our named executive officers;

3. To ratify the selection of Grant Thornton LLP as our independent registered public accounting firm for 2023; and

4. To transact such other business as may properly come before the meeting or any adjournment thereof.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON May 16, 2023.

We have elected to take advantage of the Securities and Exchange Commission’s rules that allow us to furnish our proxy materials to our stockholders over the Internet. We believe electronic delivery will expedite the receipt of materials and, by printing and mailing a smaller volume, will reduce the environmental impact of our annual meeting materials and help lower our costs. A Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) is being mailed concurrently to our stockholders. The Notice contains instructions on how to access the Notice of Annual Meeting, Proxy Statement and Annual Report to Stockholders online. You will not receive a printed copy of these materials, unless you specifically request one. The Notice of Internet Availability contains instructions on how to receive a paper copy of the proxy materials.

It is important that your shares be represented and voted at the meeting. You may vote your shares in person at the meeting, by internet, by telephone or by completing, signing, dating and returning a proxy card which will be mailed to you if you request delivery of a full set of proxy materials.

Our Proxy Statement and Annual Report on Form 10-K, are available at www.proxyvote.com


									By Order of the Board of Directors

Tulsa, Oklahoma									Luke A. Bomer
March 31, 2023									Secretary

AAON, INC.

2425 South Yukon Avenue

Tulsa, Oklahoma 74107

PROXY STATEMENT

This statement is furnished in connection with the solicitation by the Board of Directors of AAON, Inc., for proxies to be used at our Annual Meeting of Stockholders (the "Annual Meeting") to be held on May 16, 2023, at the time and place set forth in the Notice of Annual Meeting accompanying this Proxy Statement. Unless the context otherwise requires, references herein to “AAON”, “we”, “us”, “our” or “ours” refers to AAON, Inc., a Nevada corporation.

Pursuant to provisions of our Bylaws and action of our Board of Directors, the close of business on March 20, 2023, has been established as the time and record date for determining the stockholders entitled to notice of and to vote at this Annual Meeting. The stock transfer books will not be closed.

Stockholders of record on the record date are entitled to cast their votes at the Annual Meeting in person or by internet, telephone or properly executed proxy. The presence, by any of these means, of at least a majority of the Common Stock outstanding on the record date is necessary to constitute a quorum at the Annual Meeting. Abstentions and broker non-votes are counted as shares present in determining whether the quorum requirement is satisfied. If a quorum is not present at the time the Annual Meeting is convened, we may adjourn or postpone the meeting.

Determination of whether a proposal specified in the Notice of 2023 Annual Meeting of Stockholders has been approved will be determined, assuming a quorum is present either in person or by proxy, as follows:

•Proposal No. 1. A nominee for director will be elected if a majority of the stockholders voting on the nominee’s election vote in favor such nominee’s election. Accordingly, abstentions and broker non-votes will have no effect on the outcome of the vote on the director nominees.

•Proposal No. 2. The proposal to approve, on an advisory basis, the compensation of our named executive officers will require the affirmative vote of a majority of the voting shares that are present at the Annual Meeting in person or by proxy and entitled to vote on this proposal. An abstention will have the effect of a vote against this proposal. A broker non-vote will have no effect on the outcome of the vote on this proposal.

•Proposal No. 3. The proposal to ratify Grant Thornton LLP as our independent registered public accounting firm for the year ending December 31, 2023 will require the affirmative vote of a majority of the shares of Common Stock present at the Annual Meeting in person or by proxy and entitled to vote on the proposal. An abstention will have the effect of a vote against this proposal. Brokers have discretionary authority and may vote on the proposal without having instructions from the beneficial owners or persons entitled to vote thereon.

You may vote in several different ways:

In person at the Annual Meeting

You may vote in person at the Annual Meeting. You may also be represented by another person at the meeting by executing a proxy properly designating that person. If you are the beneficial owner of shares held in “street name,” you must obtain a legal proxy from your broker, bank or other holder of record and present it to the inspectors of election with your ballot to be able to vote at the meeting.

By telephone

You may vote by calling the toll-free telephone number indicated on the voting instructions you will receive. Easy-to-follow voice prompts allow you to vote your shares and confirm that your voting instructions have been properly recorded.

By Internet

You may vote by going to the Internet web site indicated on the voting instructions you will receive. Confirmation that your voting instructions have been properly recorded will be provided.

By mail

You may vote by completing, signing, dating and returning a proxy card which will be mailed to you if you request delivery of a full set of proxy materials. A postage-paid envelope will be provided along with the proxy card.

Telephone and Internet voting for stockholders of record will be available until 11:59 p.m. Central time on May 15, 2023. A mailed proxy card must be received by May 15, 2023, in order to be voted at the Annual Meeting. The availability of telephone and Internet voting for beneficial owners of other shares held in “street name” will depend on your broker, bank or other holder of record and we recommend that you follow the voting instructions on the Notice of Internet Availability that you receive from them.

If you are mailed a set of proxy materials and a proxy card or voting instruction card and you choose to vote by telephone or by Internet, you do not have to return your proxy card or voting instruction card. However, even if you plan to attend the Annual Meeting, we recommend that you vote your shares in advance so that your vote will be counted if you later decide not to attend the meeting.

Proxies received in advance of the meeting may be revoked at any time prior to the voting thereof, either by giving notice to the Secretary of AAON or by personal attendance at the meeting.

We have adopted a procedure approved by the SEC called “householding” pursuant to which stockholders of record who have the same address and last name and who request a written copy of our Annual Report and Proxy Statement will receive only one copy of such materials unless one or more of these stockholders notify us that they wish to receive individual copies. Stockholders who participate in householding will continue to receive separate proxy cards.

We will pay the costs of the solicitation of proxies. We may reimburse brokerage firms and other persons for expenses incurred in forwarding the proxy materials to their customers who are beneficial owners and obtaining their voting instructions. Stockholders electing to vote over the Internet should understand that there may be costs associated with electronic access (such as charges from their Internet access provider) and that these costs must be borne by the stockholder.

Stockholders currently receiving multiple copies of our Annual Report and Proxy Statement at their household can request householding by contacting our transfer agent at 1-801-277-1400 or writing to Issuer Direct Corporation, One Glenwood Avenue, Suite 1001, Raleigh, North Carolina 27603. Stockholders now participating in householding who wish to receive a separate document in the future may do so in the same manner. Those owning shares through a bank, broker or other nominee may request householding by contacting the nominee.

This Proxy Statement, the Notice of Annual Meeting and accompanying proxy card, as well as our 2022 Annual Report (which includes our Annual Report on Form 10-K for the year ended December 31,

2022), can also be found at our website (www.aaon.com). Copies of exhibits omitted from the Annual Report on Form 10-K are available without charge upon written request to Rebecca Thompson, 2425 S. Yukon Avenue, Tulsa, Oklahoma 74107, or may also be obtained at the Securities and Exchange Commission’s website at www.sec.gov.

We recognize the importance our stockholders place on the Annual Meeting and also appreciate the opportunity it affords for them to engage with senior management. We also understand that it provides a convenient forum for our stockholders to acquire first-hand exposure to, and ask questions of our management. In an attempt to preserve the benefits of the traditional meeting format, while also recognizing not all stockholders can attend in-person, we suggest that our stockholders not able to attend in-person consider availing themselves of the following opportunities:

•Questions for Management?

◦Stockholders are encouraged to submit questions for management without having to attend the Annual Meeting in person. To do so, questions may be submitted to annualmeeting@aaon.com. Appropriate questions will be presented for management to respond at the Annual Meeting. We retain discretion to reject questions that are improper, irrelevant, substantially similar to questions submitted by other stockholders or are otherwise derogatory or not in good taste.

•Recording of Management Presentation and Q&A Session.

◦We plan to record the management presentation and question and answer portions of the Annual Meeting and make these recordings available on our website (www.aaon.com) promptly following the Annual Meeting.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

As of March 20, 2023 (the record date), we had issued a total of 54,125,422 shares of $.004 par value Common Stock, our only class of stock outstanding. Each share is entitled to one vote on all matters submitted to a vote by stockholders.

The following table sets forth as of March 20, 2023, the aggregate number of our shares of Common Stock owned by each person known by us to be the beneficial owner of more than 5% of our Common Stock:


Name and address of beneficial owner	Number of shares owned		Percent of Class
Norman H. Asbjornson	9,753,669	(1)	18.02%
2425 South Yukon Ave.
Tulsa, OK 74107

Blackrock, Inc.	6,596,108	(2)	12.19%
55 East 52nd Street
New York, NY 10055

Kayne Anderson Rudnick Investment Management LLC, Virtus Investment Advisers, Inc and Virtus Equity Trust, on behalf of Virtus KAR Small Cap Growth Fund	3,237,296	(3)	5.98%
1800 Avenue of the Stars, 2nd Floor
Los Angeles, CA 90067

The Vanguard Group	4,629,236	(4)	8.55%
100 Vanguard Blvd.
Malvern, PA 19355

(1) Includes 7,120 shares under AAON's 401(k) plan, 504,713 shares issuable upon exercise of stock options exercisable currently or within 60 days of the Annual Meeting, 1,387 shares of restricted stock that will vest within 60 days of the Annual Meeting, 154,000 shares owned by his foundation and 8,984,453 shares held as trustee of trusts for the benefit of his grandchildren. Mr. Asbjornson has sole voting and investment powers with respect to all shares beneficially owned by him.

(2) This share ownership information was provided in a Schedule 13G/A filed January 26, 2023, which discloses that BlackRock, Inc. possesses sole voting power of 6,543,715 shares and sole dispositive power of all of the reported shares.

(3) This share ownership information was provided in a Schedule 13G/A filed on February 14, 2023, which discloses that Kayne Anderson Rudnick Investment Management LLC possesses sole voting power of 768,424 shares and sole dispositive power of 856,952 shares, and with Virtus Investment Advisers, Inc. possesses shared voting power and shared dispositive power of 2,380,344 shares.

(4) This share ownership information was provided in a Schedule 13G/A filed on February 9, 2023, which discloses that The Vanguard Group possesses shared voting power of 74,439 shares, sole dispositive power of 4,512,405 shares and shared dispositive power of 116,831 shares.

The following table sets forth as of March 20, 2023, the aggregate number of shares of our Common Stock owned of record or beneficially by each current director, nominee for director, each person named in the Summary Compensation Table (herein, “Named Executive Officers”) and all directors, nominees for director and Named Executive Officers as a group:


Name of beneficial owner		Number of shares owned	(1)	Percent of Class
Norman H. Asbjornson		9,753,669	(2)	18.02	%
Gary D. Fields		167,963	(3)	*
Casey R. Kidwell		6,341	(4)	*
Angela E. Kouplen		20,800	(5)	*
Caron A. Lawhorn		8,532	(6)	*
Stephen O. LeClair		17,126	(7)	*
A. H. McElroy II		85,763	(8)	*
David R. Stewart		3,251	(9)	*
Larry G. Stewart		1,238	(10)	*
Rebecca A. Thompson		111,070	(11)	*
Stephen E. Wakefield		144,517	(12)	*
Bruce Ware		1,442	(13)	*
Gordon D. Wichman		46,201	(14)	*

Directors, nominees and Named Executive Officers as a group (13 persons) (15)		10,367,913	(15)	19.16	%

(1)	All shares are held beneficially and of record and the owner has sole voting and investment power with respect thereto, except as otherwise noted.

(2)	Includes 7,120 shares under AAON's 401(k) plan, 504,713 shares issuable upon exercise of stock options exercisable currently or within 60 days of the Annual Meeting, 1,387 shares of restricted stock that will vest within 60 days of the Annual Meeting, 154,000 shares owned by his foundation and 8,984,453 shares held as trustee of trusts for the benefit of his grandchildren.

(3)	Includes 3,289 shares under AAON's 401(k) plan, 136,358 shares issuable upon exercise of stock options exercisable currently or within 60 days of the Annual Meeting, 724 shares of restricted stock that will vest within 60 days of the Annual Meeting and 4.500 shares held as custodian for the benefit of his grandchildren.

(4)	Includes 852 shares under AAON's 401(k) plan, 4,804 shares issuable upon exercise of stock options exercisable currently or within 60 days of the Annual Meeting and 334 shares of restricted stock that will vest within 60 days of the Annual Meeting.

(5)	Includes 1,387 shares of restricted stock that will vest within 60 days of the Annual Meeting.

(6)	Includes 3,178 shares of restricted stock that will vest within 60 days of the Annual Meeting.

(7)	Includes 3,178 shares of restricted stock that will vest within 60 days of the Annual Meeting.

(8)	Includes 612 shares of restricted stock that will vest within 60 days of the Annual Meeting.

(9)	Includes 1,836 shares of restricted stock that will vest within 60 days of the Annual Meeting and 1,000 shares held by the beneficial owner's IRA.

(10)	Includes 1,238 shares under AAON's 401(k) plan.

(11)	Includes 1,984 shares under AAON's 401(k) plan and 102,178 shares issuable upon exercise of stock options exercisable currently or within 60 days of the Annual Meeting.

(12)	Includes 6,814 shares under AAON's 401(k) plan and 133,150 shares issuable upon exercise of stock options exercisable currently or within 60 days of the Annual Meeting.

(13)	Includes 612 shares of restricted stock that will vest within 60 days of the Annual Meeting.

(14)	Includes 2,228 shares under AAON's 401(k) plan and 42,518 shares issuable upon exercise of stock options exercisable currently or within 60 days of the Annual Meeting.

(15)	Includes 923,721 shares issuable upon the exercise of stock options that are exercisable currently or within 60 days of the Annual Meeting and 13,248 shares of restricted stock that will vest within 60 days of the Annual Meeting by all directors and Named Executive Officers.
	* Less than 1%.

DIRECTORS AND EXECUTIVE OFFICERS

General

Our Board of Directors is currently comprised of eight members. Our Bylaws (the "Bylaws") divide the Board of Directors into three classes having staggered terms of three years each, with Classes II, III and I having terms expiring at the Annual Meeting of Stockholders in 2023, 2024 and 2025, respectively. The Bylaws provide that a stockholder may nominate a director for election at an annual meeting if written notice is given to us not less than 90 and not more than 120 days in advance of the anniversary date of the immediately preceding annual meeting.

On the recommendation of our Governance Committee, the Board of Directors has nominated Caron A. Lawhorn, Stephen O. LeClair and David R. Stewart, current members of the Class II Directors, whose terms expire at the 2023 Annual Meeting, for re-election to the Board. The persons named in the proxy will vote for the election of each of Ms. Lawhorn, Mr. LeClair and Mr. Stewart. Each of the above named nominees have consented to being named in this Proxy Statement and to serve if elected.

If any nominee becomes unavailable for any reason, the shares represented by the proxies will be voted for such other person, if any, as may be designated by the Board of Directors. However, the Board has no reason to believe that any nominee will be unavailable.

Nominees:

Class II - Terms Expire in 2023


Name	Age	Current Position	Director Since
Caron A. Lawhorn	62	Director, Independent Vice Chair	2019
Stephen O. LeClair	54	Director	2017
David R. Stewart	67	Director	2021

Directors Continuing in Office:

Class III - Terms Expire in 2024


Name	Age	Current Position	Director Since
Norman H. Asbjornson	87	Director	1988
Gary D. Fields	63	Director, President and CEO	2015
Angela E. Kouplen	49	Director	2016

Class I - Terms Expire in 2025


Name	Age	Current Position	Director Since
A.H. McElroy II	60	Director, Independent Chair	2007
Bruce Ware	47	Director	2021

After the Annual Meeting, assuming the stockholders elect the three nominees of the Board of Directors as set forth above, the Board of Directors of the Company will be:


Name	Age	Position
Norman H. Asbjornson (1)	87	Director
Gary D. Fields	63	Director, Chief Executive Officer and President
Angela E. Kouplen	49	Director
Caron A. Lawhorn	62	Director, Independent Vice Chair
Stephen O. LeClair	54	Director
A.H. McElroy II	60	Director, Independent Chair
David R. Stewart	67	Director
Bruce Ware	47	Director
(1) Mr. Asbjornson retired as Executive Chairman effective May 12, 2022.

Biographical Information

Set forth below is a description of the background of each of our continuing directors, nominees for director (* indicates nominees for director) and executive officers. The term of office of each officer ends on the date of the Annual Meeting, subject to extension upon re-election.

Directors

Norman H. Asbjornson served as Chief Executive Officer of AAON since its inception until May 2020, when he transitioned to the position of Executive Chairman. He retired as Executive Chairman in May 2022. Mr. Asbjornson also served as President of AAON from its inception until November 2016, when the Board of Directors appointed Mr. Gary D. Fields as President. Additionally, Mr. Asbjornson served as the Executive Chairman of the Board of AAON-Oklahoma and Chairman of AAON Coil Products, Inc., both our wholly-owned subsidiaries until his retirement in May 2022. He has served as a director of AAON since its inception, and currently serves in the class of directors whose terms will expire at the 2024 Annual Meeting.

Mr. Asbjornson is the founder of the Company, and his intimate knowledge of the HVAC industry, both from a technical and a business perspective, brings to the Board a unique insight into the Company’s operations in particular, as well as the environment in which the Company operates.

Gary D. Fields has served as President of AAON since November 2016 and Chief Executive Officer since May 2020. He was elected as a director of AAON in 2015, and currently serves in the class of directors whose terms will expire at the 2024 Annual Meeting. Mr. Fields has been involved in the HVAC industry for more than 35 years. From 1983 to 2012, Mr. Fields was an HVAC equipment sales representative at (and, from 2002 to 2012, a member of the ownership group of) Texas AirSystems, the largest independent HVAC equipment and solutions provider in the state of Texas, with locations in Dallas, Fort Worth, Houston, Austin and San Antonio. Mr. Fields has been significantly involved with the Fort Worth, Texas Chapter of ASHRAE (the American Society of Heating, Refrigerating and Air-Conditioning Engineers), having served as Chairman of various ASHRAE committees and ultimately serving as President of the Society. Mr. Fields is currently an owner and President of GKR Partners LTD, an HVAC business development consulting firm, which provided business development advice and consultation to the Company and its sales representatives from 2013 to 2016. Mr. Fields also serves as the President and Chief Executive Officer of AAON, Inc., an Oklahoma Corporation ("AAON-Oklahoma"), Chief Executive Officer of AAON Coil Products, Inc. and Chief Executive Officer of BASX, Inc.

Mr. Fields' extensive experience in the HVAC industry provides the Board with valuable insight and knowledge on HVAC markets, including market trends. Mr. Fields' lengthy experience at a large independent HVAC equipment provider also allows him to provide the Board guidance on the Company's sales and marketing activities. In addition, Mr. Fields' detailed knowledge of the Company's product lines (as well as the product lines of the Company's competitors) enables him to provide the Board with unique insight into the Company's strengths and strategic opportunities to improve its position in the marketplace.

Angela E. Kouplen was elected for an initial two-year term as a director of AAON in 2016, and currently serves in the class of directors whose terms will expire at the 2024 Annual Meeting of stockholders. She serves as Chair of our Compensation Committee and a member of our Audit Committee. Ms. Kouplen has over 25 years of experience at multiple energy companies, with an emphasis on information technology (“IT”), contract management, sourcing/vendor relations, human resource management, strategy and governance. From 1997 through 2007, Ms. Kouplen worked at CITGO Petroleum, a petroleum refining, marketing and transportation company, in various IT related positions, including Manager - E-Business Strategy and Alliance, as well as Manager - Third Party Applications and Applications Development. From 2007 through 2010, Ms. Kouplen served Williams Companies, a Tulsa based publicly traded energy company, in the position of Manager - Sourcing Management Office. From 2010 through 2011, Ms. Kouplen served Williams Companies as Manager - IT Strategy and Governance.

In 2012, Ms. Kouplen transitioned from Williams Companies to WPX Energy, a Tulsa based stand-alone publicly traded energy company previously part of the Williams Companies. Following the move to WPX Energy, from 2012 through 2014, Ms. Kouplen served as Director - Talent Acquisition and Leadership, from 2015 to 2016 she served as Vice President - Information Technology, from 2016 to November 2018, she served as Vice President of Administration and Chief Information Officer and from November 2018 to March 2021 served as Senior Vice President of Administration and Chief Information Officer. Ms. Kouplen now serves as the Vice President of Administration and Chief Information Officer at the University of Tulsa. Ms. Kouplen holds a bachelor’s degree in Management from Oklahoma State University and an M.B.A from the University of Tulsa.

Ms. Kouplen’s extensive experience in IT related positions provides the Board with valuable insight and enhanced knowledge on IT matters, which are increasingly vital to the Company’s operations and success. Additionally, Ms. Kouplen brings to the board experience in sourcing/vendor relations and human resources; two areas which the Board views as vital to the future growth and profitability of the Company. Ms. Kouplen's diverse and lengthy experience in senior management and executive level positions at large publicly traded companies allows her to provide the Board guidance on the Company’s IT practices, human resources programs and sourcing/vendor relations activities, while also giving her the ability to compare such practices against those of other publicly traded companies, all of which strengthen the effectiveness and broaden the skill set of our Board.

*Caron A. Lawhorn was elected as a director of AAON in January 2019, and currently serves in the class of directors whose terms will expire at the 2023 Annual Meeting. She is a certified public accountant and serves as Chair of our Audit Committee and a member of our Governance Committee. Additionally, the Board elected Ms. Lawhorn as Independent Vice Chair of the Board at the 2022 Annual Meeting. Ms. Lawhorn has over 35 years of experience in various accounting, finance, operational and executive positions. Ms. Lawhorn currently serves as Senior Vice President and Chief Financial Officer of ONE Gas, Inc. (a position she has held since March 1, 2019), and in such role is responsible for finance, accounting, treasury functions, investor relations, and environmental, social, and governance ("ESG") reporting. Prior to her current role, she served as Senior Vice President, Commercial, a position she held from ONE Gas’s separation from ONEOK, Inc. in January 2014. Prior to ONE Gas’s separation from ONEOK, Ms. Lawhorn served in the same role at ONEOK. Prior to assuming the role of Senior Vice President, Commercial for ONEOK, Ms. Lawhorn was the President of ONEOK’s natural gas distribution

segment. From July 2009 to March 2011, she served as Senior Vice President, Corporate Planning and Development of ONEOK and ONEOK Partners, responsible for business development, strategic and long-range planning and capital investment. Ms. Lawhorn became Senior Vice President and Chief Accounting Officer of ONEOK in 2007, adding responsibility for ONEOK Partners in 2008. Prior to that, she was Senior Vice President of Financial Services and Treasurer of ONEOK. Ms. Lawhorn joined ONEOK in 1998, after serving as a Senior Manager at KPMG and Chief Financial Officer of Emergency Medical Services Authority in Tulsa.

Ms. Lawhorn’s extensive background in various accounting, finance, operational and executive positions provides the Board with significant accounting and financial expertise and assists the Board’s ongoing efforts to advance the Company’s accounting and corporate governance practices. Ms. Lawhorn’s public company experience also allows her to compare our practices against those of other public companies and provide input and guidance on strengthening our practices and procedures.

*Stephen O. (“Steve”) LeClair was elected as a director of AAON in 2017 and currently serves in the class of directors whose terms will expire at the 2023 Annual Meeting. He is a member of our Audit Committee and Governance Committee. Mr. LeClair has over 25 years of experience in various executive, manufacturing, finance, sales and operational positions. Mr. LeClair currently serves as Chief Executive Officer of Core & Main, Inc. (NYSE: CNM) (a position he has held since August 2017), and in such role is responsible for leading the nation’s largest distributor of water, sewer, storm and fire protection products. Prior to his current role, he served as President of HD Supply Waterworks from December 2011 to August 2017, Chief Operating Officer from 2008 to 2011, and President of Lumber and Building Materials from April 2007 until its divestiture to ProBuild Holdings in 2008. Mr. LeClair joined Core & Main in 2006 as Senior Director of Operations. Prior to joining Core & Main, Mr. LeClair was a Senior Vice President at General Electric (GE) Capital Equipment Services from 2002 to 2005, and from 1992 to 2002 held various roles at GE Appliances and Power Generation in distribution, manufacturing and sales. Mr. LeClair is a graduate of GE Power Generation’s Manufacturing Management Program. He was previously a member of the Saint Louis University’s International Business School Advisory Board. Mr. LeClair holds a bachelor’s degree in Mechanical Engineering from Union College and an M.B.A. degree from the University of Louisville.

Mr. LeClair’s extensive experience in operations, distribution, manufacturing and sales at two large public companies brings to the Board strategic and operational expertise that provides valuable insight to the Board across several phases of AAON’s business. Mr. LeClair’s public company experience also allows him to compare and assess the differences in our operations and functions against other publicly traded companies, which enables him to provide input and guidance on strengthening the practices of AAON.

A.H. (“Chip”) McElroy II, P.E. was elected as a director of AAON in 2007, and currently serves in the class of directors whose terms will expire at the 2025 annual meeting of stockholders. He is Chair of our Governance Committee and serves as a member of our Compensation Committee. Additionally, the Board elected Mr. McElroy as Independent Chairman of the Board at the 2022 Annual Meeting. Since 1997 Mr. McElroy has served as President, CEO and Chairman of McElroy Manufacturing, Inc., a privately held manufacturing company based in Tulsa, Oklahoma. Since 2002, Mr. McElroy has also served as Chairman of Southern Specialties Co., a privately held specialty sheet metal manufacturer. Since 2016, Mr. McElroy has served on the board of directors of Pryer Aerospace, a privately held Tulsa, Oklahoma based aerospace structural component and sheet metal manufacturer, and from 2016 to June 2019, served on the Advisory Board of HydroHoist Marine Group, a privately held Claremore, Oklahoma based boat lift manufacturer. Since 2017, Mr. McElroy has served as a member on the local advisory board of directors of Ascension St. John Health System, a healthcare system in northeastern Oklahoma and Southern Kansas.

Mr. McElroy’s extensive experience in managing a privately held manufacturing company and product development brings to the Board substantial knowledge of operational and budgetary efficiencies, as well as technology-related applications which benefit the Company's general manufacturing processes.

*David R. Stewart was elected as a director of AAON in October 2021, and currently serves in the class of directors whose terms will expire at the 2023 Annual Meeting. Mr. Stewart serves as a member of our Audit Committee and Governance Committee. He brings over 40 years of professional experience to the Board. Mr. Stewart currently serves as Chief Administrative Officer and Trustee of the Oklahoma Ordnance Works Authority located in Pryor, Oklahoma, an industrial public trust that owns and operates MidAmerica Industrial Park. He was appointed to his current position in December 2012 by the former Governor of Oklahoma, Mary Fallin.

MidAmerica Industrial Park consists of 9,000 acres and is home to over 80 companies in diverse industries (including Google, Siemens and Chevron Phillips), employing approximately 4,500 people. MidAmerica Industrial Park is one of the largest industrial parks in the U.S. and top ten in the world with on-site rail, water and electric power. Prior to his current position, Mr. Stewart, a member of the Cherokee Nation, served as Chief Executive Officer of Cherokee Nation Businesses, LLC. During his tenure as CEO of Cherokee Nation Businesses, LLC, he helped negotiate the Tribal-State Gaming Compact in 2004 and led the Cherokee Nation’s efforts to successfully diversify its business portfolio to include a wide range of non-gaming enterprises employing over 3,500 people.

Mr. Stewart earned his Master of Science and Bachelor of Science degrees from Oklahoma State University and is a certified public accountant. Governor Kevin Stitt appointed Mr. Stewart as a member to the Governor's Council of Workforce and Economic Development. He was also appointed by the Governor to the Oklahoma State Board of Career and Technology Education, which provides oversight of the career technical training system in the state of Oklahoma. Mr. Stewart currently is a member of the Board of Directors for the Tulsa Regional Chamber, Executive Committee for Tulsa's Future and is chair-elect of the Board of Directors for the Oklahoma Business Roundtable. He also serves on the Board of Directors of the State Chamber of Oklahoma and Tulsa Community College Foundation.

Mr. Stewart's extensive executive leadership and operations experience brings the Company valuable skills and insight to the Board in several strategic areas. His experience previously serving as the CEO of the Cherokee Nations Businesses, LLC and current role as Chief Administrative Officer of MidAmerica Industrial Park, benefit the Company's executive leadership practices.

Bruce Ware was elected as a director of AAON in October 2021, and currently serves in the class of directors whose terms will expire at the 2025 Annual Meeting. Mr. Ware serves as a member of our Audit Committee and Compensation Committee. Mr. Ware brings significant experience serving in multiple executive and leadership roles at publicly traded companies. Presently, he serves as a Corporate Vice President and Group Head of Joint Venture Capital Raising for DaVita Inc. DaVita is a Fortune 500 NYSE publicly traded health care services company and one of the largest providers of kidney care services in the U.S., with over 2,800 outpatient dialysis centers in the U.S. and over 330 outpatient dialysis centers in ten other countries.

Mr. Ware earned a Master of Business Administration from Harvard Business School, a Master in Public Affairs from The University of Texas at Austin and a Bachelor degree in Business Administration in Banking and Finance from The University of Mississippi at Oxford. He also serves on the Board of Directors of Blackhawk Bancorp, Inc., the parent company of Blackhawk Bank, a Beloit, Wisconsin headquartered financial institution operating eleven full-service banking centers in Wisconsin and Illinois, as well as the University of Mississippi National Alumni Board. Additionally, Mr. Ware served as a Trustee of Uplift Charter Schools, a high-performing, multi-site K-12 public charter school system in Dallas, Texas, which serves over 17,000 students.

Mr. Ware's executive roles at multiple publicly traded companies brings experience and skills to help the Company strengthen our practices and policies. Additionally, his extensive experience working with large financial institutions provides AAON with a broader skill-set to further compliment the Board's capabilities and better serve the Company.

Executive Officers

In addition to Gary D. Fields (who is both a director and executive officer of the Company, and whose biographical information may be found in the section above entitled “Directors”), the named executive officers of the Company are:


Name	Age	Current Position

Rebecca A. Thompson	44	Vice President, Finance, Chief Financial Officer and Treasurer
Larry G. Stewart (1)	54	Former Executive Vice President
Stephen E. Wakefield	46	Vice President and Chief Operating Officer
Casey R. Kidwell (2)	44	Vice President, Administration
Gordon D. Wichman (3)	35	Vice President, President of AAON Coil Products
(1) Mr. Stewart was hired as Vice President of the Company and President of AAON Coil Products, Inc. effective April 1, 2020. He was promoted to Executive Vice President of AAON, Inc. effective January 1, 2022. Mr. Stewart resigned from the Company effective August 16, 2022.
(2) Mr. Kidwell was hired as Director of Administration in June 2021. He was promoted to Vice President, Administration effective May 12, 2022.
(3) Mr. Wichman was promoted to Executive Vice President of AAON Coil Products effective January 1, 2022 and President of AAON Coil Products effective February 24, 2023.

Rebecca A. Thompson, age 44, has served as Vice President, Finance, and Chief Financial Officer of AAON since 2021. Prior to this promotion, Ms. Thompson served as Chief Accounting Officer and Treasurer of the Company since 2017, and Chief Accounting Officer of the Company since 2012. Ms. Thompson previously served as a Senior Manager at Grant Thornton, LLP where she had 11 years of experience in the assurance division. Ms. Thompson has a Bachelor's of Science in Accounting and Master's of Information Systems and Accounting from the University of Tulsa. Ms. Thompson is also a licensed certified public accountant. Ms. Thompson also serves as Chief Financial Officer and Treasurer of AAON-Oklahoma and AAON Coil Products, Inc., and Chief Financial Officer of BASX, Inc.

Larry G. ("Gene") Stewart, age 54, served as Executive Vice President of the Company from January 2022, until his resignation in August 2022. Prior to that, Mr. Stewart served as Vice President of the Company and President of AAON Coil Products since April 2020. From February 2015 to March 2020, Mr. Stewart was a co-owner and the President of North Texas Farm & Garden, a small power engine shop specializing in sales, parts and service of commercial and residential lawn and garden equipment located in Lewisville, Texas. Mr. Stewart previously served as the Aftermarket Business Leader – Parts and Warranty Service for the Company from January 2013 through January 2015. Mr. Stewart was the Parts Sales and Distribution Leader for Texas AirSystems from April 2009 through 2012 and prior to that spent over 11 years in several positions at Trane, including Parts and LCU Equipment Business Leader from January 2006 to April 2009.

Stephen E. Wakefield, age 46, Vice President and Chief Operating Officer, joined the Company in 1999. He most recently served as Vice President of Engineering until May 2020, and prior to that held several engineering roles, including Director of Design and Engineering Operations from 2017 to 2018, Senior Manager of Research and Development from 2015 to 2017, and Design Engineering Manager from 2005 to 2015. Mr. Wakefield also serves as Chief Operating Officer of AAON-Oklahoma and AAON Coil Products. Mr. Wakefield has extensive knowledge and experience with all aspects of AAON operations and engineering and product design processes. Mr. Wakefield has a Bachelor's of Science in Mechanical Engineering Technology from Oklahoma State University.

Casey R. Kidwell, age 44, has served as Vice President, Administration since May 2022. Prior to this promotion, Mr. Kidwell served as Director of Administration since joining the Company in 2021. Prior to joining the Company, Mr. Kidwell served almost 10 years in various roles at WPX Energy, including Human Resources Operations Manager. Mr. Kidwell has a Bachelor's of Science in Human Resources Management from Oklahoma State University.

Gordon D. ("Doug") Wichman, age 35, Vice President of the Company and President of AAON Coil Products, Inc., joined the Company in 2013. He most recently served as Director of Manufacturing for our AAON-Oklahoma facilities until January 2022, and prior to that held several roles, including Plant Manager from 2017 to 2018 and Manufacturing Engineer from 2013 to 2017. Mr. Wichman has extensive knowledge and experience with all aspects of the Company's manufacturing processes. Mr. Wichman has a Bachelor's of Science in Mechanical Engineering from The University of Montana Tech and a Master's of Business Administration from the University of Montana.

BOARD, COMMITTEE MATTERS AND CORPORATE GOVERNANCE

Leadership Structure of the Board

The business of AAON is managed under the direction of our Board of Directors (“Board”). In accordance with our Bylaws, we have an Independent Chair of the Board, who presides at all meetings of the Board and stockholders. Our Board has also chosen to elect an Independent Vice Chair of the Board to perform the duties and responsibilities as the Board may determine.

The Board has determined that our current Board structure, having the Independent Chair of the Board serve as the presiding officer at all Board and stockholder meetings, and having an Independent Vice Chair, is currently the most appropriate leadership structure for the Company and its stockholders. This fosters clear accountability, effective decision-making, alignment with corporate strategy, direct oversight of management, full engagement of the remaining directors and continuity of leadership. Having an Independent Chair and Vice Chair demonstrates the Board's recognition of the importance of independent leadership and identifies the individuals, elected by and from the independent directors, selected to act as the leaders of the independent directors and help ensure appropriate discussions take place, in an open and forthright manner, at the Board level. The Board considers and reviews its leadership structure annually by the independent directors in connection with its self-evaluation process. The Board believes its current leadership structure is reasonable, appropriate and in the best interests of the Company and its stockholders.

The Board’s Role in Risk Oversight

The Board has ultimate responsibility for oversight of our risk management processes. The Board discharges this oversight responsibility through regular reports received from and discussions with senior management on areas of material risk exposure to the Company. These reports and Board discussions include, among other things, operational, financial, legal, regulatory and strategic risks. Additionally, our risk management processes are intended to identify, manage and control risks so that they are appropriate considering our size, operations and business objectives. The full Board (or the appropriate committee in the case of risks in areas for which responsibility has been delegated to a particular committee) engages with the appropriate members of senior management to enable its members to understand and provide input to and oversight of our risk identification, risk management and risk mitigation strategies. In addition, each of our Board committees considers the risks within its areas of responsibility. For example, the Audit Committee reviews risks related to financial reporting; discusses material violations, if any, of Company governance, ethics and compliance policies brought to its attention; considers the Company’s enterprise risk assessment that is part of the Company's strategic planning which identifies control risks and drives the internal audit plan for the ensuing year; reviews the external audit plan; and considers the impact of risk on our financial position and the adequacy of our risk-related internal controls. The Compensation Committee reviews compensation and human resource risks. This enables the Board to coordinate risk oversight, particularly with respect to interrelated or cumulative risks that may involve multiple areas for which more than one committee has responsibility. The Board or applicable committee also has authority to engage external advisors as necessary.

Actions taken by the Board outside of Board meetings are consented to in writing by a memorandum of action in lieu of a meeting, to which all incumbent directors subscribe. Directors meet their responsibilities not only by attending Board and committee meetings but also through communication with members of management on matters affecting us.

A description of the fees paid to the directors and members of the Audit Committee, Compensation Committee and Governance Committee can be found under “Executive Compensation - Director Compensation”, herein.

Communicating with the Board

Stockholders may communicate with the Board, including the non-management directors, by sending a letter to the Board of Directors of AAON, Inc., c/o Corporate Secretary, 2425 South Yukon Avenue, Tulsa, Oklahoma 74107. The Corporate Secretary has the authority to disregard any inappropriate communications. If deemed an appropriate communication, the Corporate Secretary will submit the correspondence to the Board or to any specific director to whom the correspondence is directed.

Board Meetings and Annual Meeting Attendance

Our directors are expected to attend Board meetings, meetings of Board committees on which they serve and the Annual Meeting of Stockholders. The Board met five times during 2022, and each director participated in 75% or more of the total number of meetings of the Board. We encourage all of our directors to attend AAON’s annual meeting of stockholders and all Board members who were in office at such time attended the 2022 annual meeting.

Executive Sessions

Our Board and Board committees regularly conduct executive sessions with independent directors. Our Independent Chair and Vice Chair preside over each executive session of the independent directors and the committee chairs preside over executive sessions of each of their respective committees.

Board Committee Structure

Currently, the Board has a standing Audit Committee, Compensation Committee and Governance Committee to assist the Board in carrying out its functions. The Board has determined that each of the Chairs, as well as all committee members are independent under applicable NASDAQ and SEC rules for committee memberships. The members of the committees are shown in the table below, followed by a brief description of each committee.

Director

Audit

Committee

Compensation

Committee

Governance

Committee

Norman H. Asbjornson

Angela E. Kouplen

Member

Chair

Caron A. Lawhorn

Chair

Member

Stephen O. LeClair

Member

A.H. McElroy II

Member

Chair

David R. Stewart

Member

Bruce Ware

Member

Audit Committee

The Audit Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity of our accounting, auditing and financial reporting practices. Among other things, the Audit Committee is responsible for: selecting and retaining our independent public accountants; preapproving the engagement of the independent accountants for all audit-related services and permissible, non-audit related services; reviewing in advance the scope and focus of the annual audit; and reviewing and discussing with management and the auditors our financial reports, the audited financial statements, the auditor's report, the management letter and the quality and adequacy of our internal controls. In addition, the Audit Committee is responsible for oversight and review of the activities of the Company's internal audit function. The Board has determined that the Chair and the other Audit Committee members are independent under applicable NASDAQ and SEC rules for Audit Committee memberships. The Audit Committee is governed by a written charter, a copy of which is available on our website, at www.aaon.com. The “Audit Committee Report” for year 2022 is set forth below.

The Audit Committee met a total number of four times during 2022 and the Chair and each committee member participated in 75% or more of the total number of Audit Committee meetings.

The Board has determined that Ms. Lawhorn qualifies as an “audit committee financial expert” as defined by applicable SEC rules and that each member of the Audit Committee meets the additional criteria for independence of audit committee members set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 5605(c) of the NASDAQ Stock Market Listing Standards.

Compensation Committee

The responsibilities of the Compensation Committee, as set forth in its charter, include the direct responsibility and authority to review and approve our goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, to evaluate the performance of such officers in accordance with the policies and principles established by the Compensation Committee and to determine and approve, either as a Committee, or (as directed by the Board) with the other “independent” Board members (as defined by the NASDAQ listing standards), the compensation level of the Chief Executive Officer and the other executive officers. The Compensation Committee is composed of the three independent (non-employee) directors, named in the table above, each of whom is “independent” as defined by applicable NASDAQ and SEC rules for committee memberships. The Compensation Committee is governed by a written charter, a copy of which is available on our website, at www.aaon.com. In accordance with its charter, our Compensation Committee has the sole authority to retain and terminate its compensation consultant and to review its compensation consultant's independence on an annual basis.

The Compensation Committee met a total of six times during 2022 and the Chair and each committee member participated in 75% or more of the total number of Compensation Committee meetings.

Governance Committee

The responsibilities of the Governance Committee include proposing to the Board a slate of nominees for election by the stockholders at the Annual Meeting and maintaining a list of prospective director candidates in the event of the resignation, death, removal or retirement of directors or a change in the Board composition requirements. The Committee is also charged with reviewing with the Board the desired experience, mix of skills and other qualities to assure appropriate Board composition. The Board has determined that the Chair and all Governance Committee members are independent under applicable NASDAQ and SEC rules for committee memberships.

The responsibilities of the Governance Committee also includes the periodic reviews and monitoring of the Company’s corporate governance guidelines (including the Company’s Code of Conduct), recent developments in corporate governance concepts, the Company’s plans for CEO and senior management succession, regulatory requirements relevant to the Company’s corporate governance guidelines to assure the Company’s compliance therewith, and the Company’s Articles of Incorporation and Bylaws.

The Board has determined that the Chair and all Governance Committee members are independent under applicable NASDAQ and SEC rules for committee memberships.

The Governance Committee met a total of three times during 2022 and the Chair and each committee member participated in 75% or more of the total number of Governance Committee meetings.

Our Bylaws also provide that a stockholder may nominate a director for election at an annual meeting if written notice is given to us not less than 90 and not more than 120 days in advance of the anniversary date of the immediately preceding annual meeting.

If and when new vacancies occur in the future, the Board will consider director nominees recommended by stockholders, in accordance with our Bylaws. The Board does not have a formal policy regarding the consideration of, procedures to be followed by, minimum qualifications of or process for identifying or evaluating nominees recommended by stockholders.

Among the criteria developed by the Governance Committee for qualification for director nominees as well as director retention, a candidate must have demonstrated accomplishment in his or her chosen field, character and personal integrity, and the ability to devote sufficient time to carry out the duties of a director. The Governance Committee considers whether the candidate is independent under the standards described below under “Director Independence.” In addition, the Governance Committee considers all information relevant in their business judgment to the decision of whether to nominate a particular candidate, taking into account the then-current composition of the Board and assessment of the Board’s collective requirements. These factors may include: a candidate’s age, professional and educational background, reputation, industry knowledge and business experience and relevance to the Company and the Board (including the candidate’s understanding of markets, technologies, financial matters and international operations); whether the candidate will complement or contribute to the mix of talents, skills and other characteristics that are needed to maintain the Board’s effectiveness; and the candidate’s ability to fulfill responsibilities as a director and as a member of one or more of our standing Board committees. Although the Board does not have a formal diversity policy for Board membership, the Governance Committee considers whether a director nominee contributes or will contribute to the Board in a way that can enhance the perspective and experience of the Board as a whole through diversity in gender, ethnicity, geography and professional experience.

Nomination of a candidate is not based solely on the factors noted above. When current Board members are considered for nomination for re-election, the Governance Committee also takes into consideration their prior Board contributions, performance and meeting attendance records. The Governance Committee does not assign specific weights to particular criteria, and no particular criterion is a prerequisite for Board membership. We believe that the backgrounds and qualifications of our directors, considered as a group, provide an appropriate mix of experience, knowledge and abilities to allow the Board to fulfill its responsibilities. The effectiveness of the Board’s skills, expertise and background is also considered as part of each Board and committee annual self-assessment evaluation process conducted at the direction of the Governance Committee.

Code of Ethics

We have adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer and principal accounting officer or persons performing similar functions, as well as our other employees and directors. Our Code of Business Conduct and Ethics can be found on our website at www.aaon.com. We will also provide any person without charge, upon request, a copy of such Code of Business Conduct and Ethics. Requests may be directed to AAON, 2425 South Yukon Avenue, Tulsa, Oklahoma 74107, attention Rebecca Thompson, or by calling (918) 382-6216.

Transactions with Related Persons

The Company sells products to Fields Mechanical Systems, which is owned by the brother of our President and CEO, Gary Fields. This entity is also one of the Company's independent sales representatives and as such, the Company makes payments to the entity for third party products, which are reflected in our financial statement as amounts Due to Representatives. In 2022, the Company had sales to Fields Mechanical Systems for approximately $5.8 million, made purchases from Fields Mechanical Systems of approximately $0.5 million and had $0.4 million in outstanding receivables from Fields Mechanical Systems at December 31, 2022.

The Company purchases signs and other items from Mid-State Signs, which is owned by Norman Asbjornson. In 2022, the Company purchased approximately $1.8 thousand.

The Company sometimes makes sales to Mr. Fields, President and CEO and Norman Asbjornson. In 2022, the Company had total combined sales to Mr. Fields, President and CEO and Norman Asbjornson of approximately $6.2 thousand.

In 2022, the Company made payments to Kvichak Lodge, a hunting and fishing lodge in Alaska, which is partially owned by Mr. Fields, President and CEO, for approximately $217.5 thousand.

Our Code of Business Conduct and Ethics guides the Board in its actions and deliberations with respect to related party transactions. Under the Code, conflicts of interest, including any involving the directors or any Named Executive Officers, are prohibited except under any guidelines approved by the Board. Only the Board may waive a provision of the Code of Business Conduct and Ethics for a director or a Named Executive Officer, and only then in compliance with all applicable laws, rules and regulations.

Policy Against Hedging Stock

Our Insider Trading Policy (which was adopted by the Board in November 2014) prohibits our directors, officers and other employees, and their designees, from engaging in short sales or from hedging transactions of any nature that are designed to hedge or offset a decrease in market value of such person’s ownership of the Company's equity securities. Our Insider Trading Policy also prohibits our directors, officers and other employees, and their designees, from purchasing financial instruments or engaging in other problematic transactions involving the Company’s equity securities, including, puts, calls, collars, forward contracts or other derivative securities concerning the Company's equity securities. We prohibit such conduct since purchasing such financial instruments or engaging in such transactions would result in the individual no longer being exposed to the full risks of ownership of the Company’s equity securities, which may weaken the alignment of such individual with the objectives of the Company’s stockholders. Additionally, our directors, officers and other employees may not hold their Company equity securities in a margin account.

Whistleblower Procedures

The Audit Committee has established procedures for the submission of complaints regarding accounting, internal accounting controls, audit and other matters. These procedures include processes for the confidential and anonymous submission of concerns of any such matters by our employees. Our Code of Business Conduct and Ethics prohibits retaliation against employees who report suspected violations of the Code of Business Conduct and Ethics or other misconduct.

Sustainability

Our Company is widely recognized as a leader in the design, manufacture and sale of energy efficient HVAC products. Our product offerings include some of the most energy efficient products in our industry. We have a proud history of challenging conventional wisdom and forging our own path through a never-ending commitment to innovation and continuous improvement of our products and manufacturing methodologies. These underlying principles guide our commitment to environmental stewardship, sustainability and social responsibility. We endeavor to utilize Company resources in a manner that creates long-term value for our stockholders while minimizing our impact on natural resources and the environment.

In 2022, we published our fourth annual environmental, social, and governance ("ESG") report sharing our approach in the material areas of stakeholder engagement, innovation and efficiency, environmental responsibility, climate change, occupational health and safety, talent attraction and retention, diversity and inclusion, community engagement and investment, corporate governance and ethics and compliance. The report also highlights achievements, and long-term targets related to greenhouse gas emissions, hazardous waste recycling, and non-fossil fuel consuming products. We participate in a sustainability benchmarking initiative (The Sustainability Alliance Scor3card) through which we monitor and report in the key areas of energy, material management, water, community stewardship, transportation, communication, and health. We achieved Platinum level in this program in 2022 and 2021. Our ESG committee provides oversight for ESG activities and ESG report development

and an internal grassroots sustainability committee provides education opportunities, communications and recommendations to the Company on a regular basis.

We are committed to environmental responsibility and continue to make progress toward reducing greenhouse gas emissions ("GHG") emissions, increasing hazardous waste recycling from our facilities and increasing the percentage of non-fossil fuel powered units we produce. Our approach toward emissions reduction and climate change includes product solutions for our customers and improvements to our own facilities. Approximately one-quarter of our energy portfolio is currently derived from renewable sources, and the Company’s Scope 1 and 2 emissions (emissions that occur from sources that are controlled or owned by an organization and emissions associated with the purchase of electricity, steam, heat, or cooling) are being tracked. We opted into an additional percentage of renewable energy at our Tulsa, Oklahoma facilities in 2022, continued to invest and partner on projects that reduce GHG emissions globally and selected to begin the transition to the lower global warming potential R-454B refrigerant starting in 2023. We continue to develop and manufacture non-fossil fuel consuming units to provide the most sustainable commercial HVAC equipment in the market and announced the zero degree cold air-source heat pump in 2022 as a critical solution that meets the increasing demand for building decarbonization in cold climates.

In the area of energy efficiency and conservation, our Tulsa, Oklahoma and Longview, Texas facilities have transitioned to over 95% LED lighting in our facilities leading to considerable cost savings and reduced energy consumption. Our Redmond, Oregon facilities are installing LED lights into any new fixtures in their current facility and working towards retrofitting old fixtures to LED. We participate in an energy demand response program through the public utility provider to reduce demand during peak hours. Energy efficiency has been a priority not only in product development, but also in overall capital investments which include the acquisition of new, energy efficient equipment for the production floor, new high-speed overhead facility doors, the installation of new HVAC equipment, building control systems, the application of heat and light reflective material to production facilities, along with other behavioral-based energy efficiency changes. We are tracking our energy usage intensity before and after these updates.

In the area of material management, we focus on recycling, reducing, reusing and sourcing more environmentally friendly materials into our processes. At our Tulsa, Oklahoma and Longview, Texas facilities, we recycled over 14,928 tons and 13,793 tons of metal in 2022 and 2021, respectively. Also, through our partnership with a waste to energy facility, we successfully diverted over 668 tons and 460 tons of waste from landfills in 2022 and 2021, respectively. The Company has identified hazardous waste recycling partners for paint products at both the Tulsa, Oklahoma and Longview, Texas facilities. We also recycle paper, wood, and cardboard where available. We continue to innovate ways to reduce and reuse shipping packaging between facilities and identify new opportunities to reduce or reuse items in our production and administrative areas.

We also strive to add value and support to the communities in which our employees live and work, through financial contributions, employee volunteerism and donations.

We endeavor to attract, employ and retain a well-rounded, diverse team of individuals. Additionally, we place priorities on developing and maintaining an inclusive and safe workplace and strive to emphasize and support opportunities for our team members to engage in professional and personal development.

Our commitment to these practices runs deep and not only improves the well-being of our workforce, but also contributes to the communities in which we operate and provides the Company the best opportunity to continue to deliver value to our stockholders, team members and all other stakeholders.

Director Diversity

Our directors have a diverse mix of backgrounds, qualifications, skills and experiences that we believe contribute to a well-rounded Board that is positioned to effectively oversee our strategy. We have a balance of new and tenured directors, reflecting our commitment to proactive Board refreshment. Assuming the re-election of the three Class II directors to the Board, the average age of our directors will be 62 years; the median tenure will be 6.5 years; six of our eight directors or 75% are independent; and 50% of our directors are diverse.

Board Diversity Matrix for AAON, Inc.

As of December 31, 2022

Total Number of Directors

Part I: Gender Identity

Female

Male

Non-Binary

Did Not Disclose Gender

Directors

Part II: Demographic Background

African American or Black

Alaskan Native or American Indian

Asian

Hispanic or Latino

Native Hawaiian or Pacific Islander

White

Two or More Races or Ethnicities

LGBTQ+

Did Not Disclose Demographic Background

Director Independence

The Board has adopted director independence standards that meet and/or exceed listing standards set by NASDAQ. NASDAQ has set forth six applicable tests and requires that a director who fails any of the tests be deemed not independent. The Board has affirmatively determined that Ms. Kouplen, Ms. Lawhorn and Messrs. LeClair, McElroy, Stewart and Ware are independent under the Company's guidelines and independence standards of NASDAQ and the SEC. Messrs. Asbjornson and Fields do not qualify as independent under the standards set forth below.

Our director independence standards are as follows:

It is the policy of the Board that a majority of the members of the Board consist of directors independent of AAON and our management. For a director to be deemed “independent,” the Board must affirmatively determine that (apart from his or her status as a director) the director has no material relationship with AAON or its affiliates or any member of the senior management of AAON or his or her affiliates. In making this determination, the Board applies, at a minimum and in addition to any other standards for independence established under applicable statutes and regulations as outlined by the NASDAQ listing standards, the following standards, which it may amend or supplement from time to time:

▪A director who is, or has been within the last three years, one of our employees, or whose immediate family member is, or has been within the last three years a Named Executive Officer, cannot be deemed independent. Employment as an interim Chair or Chief Executive Officer will not disqualify a director from being considered independent following that employment.

▪A director who has received, or who has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from us, other than director and committee fees and benefits under a tax-qualified retirement plan, or non-discretionary compensation for prior service (provided such compensation is not contingent in any way on continued service), cannot be deemed independent. Compensation received by a director for former service as an interim Chair or Chief Executive Officer and compensation received by an immediate family member for service as a non-executive employee will not be considered in determining independence under this test.

▪A director who (A) is, or whose immediate family member is, a current partner of a firm that is our external auditor; (B) is a current employee of such a firm; or (C) was, or whose immediate family member was, within the last three years (but is no longer) a partner or employee of such a firm and personally worked on our audit within that time cannot be deemed independent.

▪A director who is, or whose immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of our present Named Executive Officers at the time serves or has served on that company’s compensation committee cannot be deemed independent.

▪A director who is a current employee or general partner, or whose immediate family member is a current executive officer or general partner, of an entity that has made payments to, or received payments from us for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $200,000 or 5% of such other entity’s consolidated gross revenues, other than payments arising solely from investments in AAON’s securities or payments under non-discretionary charitable contribution matching programs, cannot be deemed independent.

For purposes of the independence standards set forth above, the terms:

▪“affiliate” means any consolidated subsidiary of AAON and any other company or entity that controls, is controlled by or is under common control with AAON;

▪“executive officer” means an “officer” within the meaning of Rule 16a-1(f) under the Exchange Act, as amended; and

▪“immediate family” means spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law and anyone (other than employees) sharing a person’s home, but excluding any person who is no longer an immediate family member as a result of legal separation or divorce, death or incapacitation.

In addition to the director independence standards set forth above, the Board also requires the Chairs and all other committee members to satisfy the heightened independence standards set forth under applicable NASDAQ and SEC rules for committee memberships. In connection with its assessment of the independence of the directors as set forth above, the Board also determined that our Audit Committee Chair and all other Audit Committee members meet the additional independence standards of NASDAQ and the SEC applicable to members of the Audit Committee.

The Board undertakes an annual review of the independence of all non-employee directors. In advance of the meeting at which this review occurs, each non-employee director is asked to provide the Board with full information regarding the director’s business and other relationships with us and our affiliates and with senior management and their affiliates to enable the Board to evaluate the director’s independence.

Directors have an affirmative obligation to inform the Board of any material changes in their circumstances or relationships that may impact their designation by the Board as “independent”. This obligation includes all business relationships between, on the one hand, directors or members of their immediate family, and, on the other hand, AAON and our affiliates or members of senior management and their affiliates, whether or not such business relationships are subject to any other approval requirements by us.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This compensation discussion and analysis provides information regarding our executive compensation program in 2022 for the following executive officers of the Company (collectively, the "named executive officers" or “NEOs”):


Gary D. Fields			President and Chief Executive Officer
Rebecca A. Thompson			Vice President, Finance, Chief Financial Officer and Treasurer
Larry G. Stewart (1)			Former Executive Vice President
Stephen E. Wakefield			Vice President and Chief Operating Officer
Casey R. Kidwell (2)			Vice President, Administration
Gordon D. Wichman (3)			Vice President, Executive Vice President of AAON Coil Products
(1) Mr. Stewart was hired as Vice President of the Company and President of AAON Coil Products, Inc. effective April 1, 2020. He was promoted to Executive Vice President of AAON, Inc. effective January 1, 2022. Mr. Stewart resigned from the Company effective August 16, 2022.
(2) Mr. Kidwell was hired as Director of Administration in June 2021. He was promoted to Vice President, Administration effective May 12, 2022.
(3) Mr. Wichman was promoted to Executive Vice President of AAON Coil Products effective January 1, 2022 and President of AAON Coil Products effective February 24, 2023.

Mr. Gary Fields and Ms. Rebecca Thompson are NEOs by reason of their positions as the principal executive officer ("PEO") and principal financial officer ("PFO"), respectively, of the Company during 2022. Mr. Stephen Wakefield, Mr. Casey Kidwell and Mr. Gordon Wichman are NEOs as they were our three most highly compensated executive officers (other than our PEO and PFO) who were serving at the end of 2022. Mr. Gene Stewart is an NEO as he would have been included but for the fact that he was not serving as an executive officer at the end of 2022.

Executive Summary

During 2022, our executive officers led our efforts to increase sales, execute our internal capital expenditure programs and position the Company to capitalize on anticipated growth. Some of the key accomplishments during 2022 include:

•Our backlog has been at record levels during all of 2022. New bookings from BASX were a record for that business as it benefited from a strong pipeline of projects in the data center and semiconductor markets. Revenue synergies from the BASX acquisition has increased bookings for AAON Coil Products as well. Bookings continue to be strong primarily due to our favorable lead times and strong end-market demand.

•Net sales for 2022 grew 66.3% to $888.8 million due to organic growth, the addition of BASX revenues and price increases realized during the year.

•Overall gross margin increased 90 basis points in 2022, as the increased costs of material and labor were offset by increased efficiencies of operations as well as price increases.

•We invested in the future growth of the Company as evidenced by our $54.0 million in capital expenditures and $22.0 million for the purchase of the BASX building.

•We were able to attract and retain talent in a tight labor market to meet the robust demands for our products and services, growing headcount 36.2% in 2022.

The following outlines key features of our compensation program, in addition to typical "best practices" that we adhere to:


What We Do						What We Do Not Do
Pay for Performance: Our executive compensation plan is aligned with stockholder interests by rewarding for strong financial performance and stock price appreciation.						No Stock Option Re-Pricing: We do not permit re-pricing of equity awards without stockholder approval.
Stock Ownership /Retention Requirements: Our directors, executive officers and certain other key employees are subject to robust stock ownership and retention requirements.						No Tax Gross-Ups: We do not provide tax gross-ups.
At-Will Employment: Our executive officers are employed at-will and we do not use employment agreements.						No Hedging in Company Securities: Our directors, executive officers and other employees are prohibited from engaging in hedging transactions, short sales or derivative transactions with respect to AAON securities.
Independent Compensation Consultant: We utilize an independent compensation consultant reporting directly to the Compensation Committee.						Perquisites: We do not offer perquisites to our NEOs. Benefits available to our NEOs are consistent with those offered to all employees.
Compensation Clawback: Our executive officers are subject to a compensation clawback policy (with a three-year look-back period) that requires reimbursement of any bonus or incentive compensation (as well as the cancellation of unvested, restricted or deferred equity awards) in the event of officer misconduct that was a material factor causing a restatement of the Company’s financial statements.

Our executive compensation programs are determined and approved by our Compensation Committee, after consideration of recommendations by the PEO (for individuals other than himself) and information provided by the Compensation Committee's independent compensation consultant. The Compensation Committee, however, uses its own judgment to ultimately make the final decisions concerning compensation paid to our NEOs.

The Compensation Committee has the direct responsibility and authority to review and approve our goals and objectives relative to the compensation of the NEOs, and to determine and approve (either as a committee or with the other members of our Board who qualify as “independent” directors under applicable guidelines adopted by NASDAQ) the compensation levels of the NEOs. However, when making pay decisions for the NEOs, we consider input and recommendations from the Company's PEO (for individuals other than himself).

Our historical executive compensation programs have intended to achieve two objectives:

•To enhance our profitability and stockholder value; and

•To attract, motivate, reward and retain high quality employees, including executive personnel, who contribute to our long-term success.

As described in more detail below, the material elements of our historical executive compensation program for NEOs include a base salary, annual incentive bonuses, equity-based compensation and Company contributions to AAON’s 401(k) plan.

We believe that each element of the executive compensation program helps to achieve one or both of the compensation objectives outlined above. The table below lists each material element of our executive compensation program and the compensation objective or objectives that it is designed to achieve.


Compensation Element						Compensation Objectives

Base Salary						- Attract and retain qualified executives
						- Motivate and reward executives’ performance
						- Stay competitive in the marketplace



Bonus Compensation						- Motivate and compensate executives’ performance
						- Stay competitive in the marketplace



Equity-Based Compensation – performance						- Enhance profitability of AAON and stockholder value by
share units, restricted stock awards and						aligning executives with stockholders' interests
stock options						- Attract and retain qualified executives



Retirement Benefits – 401(k) and Health						- Attract and retain qualified executives
Savings Account						- Stay competitive in the marketplace

Compensation Philosophy

Our executive compensation program is designed to reward performance for enhanced profitability, revenue growth and ultimately increased stockholder value. We believe in a compensation plan that fosters a culture of ownership and allows us to attract and retain top talent who are similarly focused on the creation of long-term value. We reward our executive officers with a pay mix that emphasizes long-term compensation through performance share units, stock options and restricted stock awards to align stockholders' and executives’ interests. We strive to provide total compensation that aligns with our peer group market median for NEOs and utilize an annual bonus and equity program to incentivize executive officers to meet Company performance goals. We maintain a compensation program that operates in the best interests of AAON and our stockholders, rewarding NEOs based on performance.

Under the terms of the Compensation Committee Charter, the Compensation Committee is authorized to engage independent advisors, at the Company's expense, to advise the Compensation Committee on any matters within the scope of the Committee's duties. For 2022, the Compensation Committee retained Meridian Compensation Partners, LLC ("Meridian") to serve as an independent consultant to the Committee to provide information and objective advice regarding executive compensation. The Committee did not direct Meridian to perform its services in any particular manner or under any particular method. The Committee has the final authority to hire and terminate the compensation consultant and the Committee evaluates the compensation consultant annually. Meridian does not provide any services to the Company other than in its role as advisor to the Committee, and the Committee has determined that no conflicts of interest exist as a result of the engagement of Meridian.

Benchmarking and Peer Group

The Compensation Committee evaluates executive compensation by benchmarking our NEOs’ target total compensation relative to comparable market data provided by our independent compensation consultant. Market references are provided for our NEOs, where available, from our peer group which consists of 17 publicly-traded companies in similar industries to AAON (detailed below). This group is reviewed and approved annually, with changes made as needed, considering changes to business characteristics, size, M&A, etc. Where data may be limited for certain roles, or as an additional market reference, survey data is also used and is reflective of manufacturing organizations with revenue approximately 0.3 to 3x that of AAON.

Each element of compensation is benchmarked against peer and/or survey-reported pay information, as applicable. Target total compensation is generally targeted within a reasonable range of median; however, variation may exist based on individual and company performance, tenure in role, future potential, internal equity, etc.

When making compensation-related decisions, the Committee considers individual and company performance, tenure, future potential, etc. The Committee generally sets target total direct compensation for our NEOs to be competitive with the Company’s peer group and other market data.


Peer Group Used for 2022 Pay Decisions
Ameresco, Inc.			Powell Industries, Inc.
Armstrong World Industries, Inc.			Quanex Building Products Corporation
CECO Environmental Corp.			Raven Industries, Inc.
CSW Industrials, Inc.			Simpson Manufacturing Co., Inc.
Encore Wire Corporation			The Gorman-Rupp Company
Gibraltar Industries, Inc.			Thermon Group Holdings, Inc.
Insteel Industries, Inc.			Trex Company, Inc.
Lyndall, Inc.			Vicor Corporation
PGT Innovations, Inc.

Based on the Committee’s 2021 peer group review (to determine the peer group used to establish 2022 pay levels), Powell Industries was added as they are similar in size, business characteristics and complexity.

Say-On-Pay

We annually provide our stockholders the opportunity to cast an advisory vote to approve the compensation of our NEOs as disclosed pursuant to the SEC's compensation disclosure rules.

Proposal No. 2 in this Proxy Statement provides our stockholders an opportunity to cast an advisory vote to approve the compensation of our NEOs. The results of this advisory vote (commonly known as a "say-on-pay proposal"), while not binding on the Company, are considered by the Compensation Committee in its determinations regarding the key components, design and implementation of our executive compensation program.

At our 2022 Annual Meeting of Stockholders, the ballot included our most recent say-on-pay proposal. The vote was not binding on the Company, the Board of Directors or the Compensation Committee. Of the votes cast, including abstentions, 95.01% were “FOR” the compensation of the NEOs. Taking into consideration these results, the Compensation Committee determined that the Company's executive compensation practices for 2022 continued to be appropriate and therefore did not make any specific changes to them in response to the 2022 say-on-pay vote.

2022 Executive Compensation Program Elements

The following discussion, as well as the historical information contained in the tables below, are based upon our historical and current compensation plans, in effect in 2022 and in the previous reported year.

Base Salaries

Below is a summary of 2022 annual base salaries for our NEOs:


Named Executive Officer	2021 Base Salary	2022 Base Salary (4)	Percent Increase
Gary D. Fields	$700,000	$725,000	4%
Rebecca A. Thompson	$325,000	$345,000	6%
Larry G. Stewart (1)	$265,000	$330,000	25%
Stephen E. Wakefield	$300,000	$315,000	5%
Casey R. Kidwell (2)	$—	$275,000
Gordon D. Wichman (3)	$—	$250,000
(1) Mr. Stewart was hired as Vice President of the Company and President of AAON Coil Products, Inc. effective April 1, 2020. He was promoted to Executive Vice President of AAON, Inc. effective January 1, 2022. Mr. Stewart resigned from the Company effective August 16, 2022.
(2) Mr. Kidwell was hired as Director of Administration in June 2021. He was promoted to Vice President, Administration effective May 12, 2022.
(3) Mr. Wichman was promoted to Executive Vice President of AAON Coil Products effective January 1, 2022 and President of AAON Coil Products effective February 24, 2023.
(4) Base salary represents ending salary, inclusive of increases due to promotions in 2022.

Mr. Stewart's large increase in salary was a result of his promotion to Executive Vice President of the Company effective January 1, 2022 from President of AAON Coil Products, Inc.

In approving these executives’ salary levels, the Committee took into account certain factors, including, recommendations of the principal executive officer (except as it related to himself), each executives’ individual experience and responsibilities, and the Company’s performance. Further, as shown in the comprehensive benchmarking study conducted by the independent compensation consultant, base salary levels for each of our NEOs were positioned below the median of the applicable market benchmark. Base salary increases were based on individual and Company performance, market data (with market adjustments made with the intention of beginning to close the “gap” to the market median, over time) and other internal considerations.

Annual Cash Incentive Bonuses

We have an “at risk” annual incentive bonus which is intended to facilitate alignment of management with corporate objectives and stockholder interests in order to achieve outstanding performance and to meet specific financial goals by:

•providing the employees designated by the Committee, incentive compensation tied to stockholder interests and goals for the Company;

•providing competitive compensation to attract, motivate, reward and retain employees who achieve outstanding performance;

•fostering accountability and teamwork throughout the Company; and

•contributing to the long-term success of the Company.

We believe the annual incentive bonus should be a substantial component of total compensation and based upon achievement of the Company’s annual "Opportunity Budget" and is weighted on the following two components which drive stockholder value:

1.Operating Profit (67%) - The Company's Operating Profit calculated as the Company's budgeted net sales and the net income before “profit sharing” and income taxes, but after bonus accrual; and

2.Net Sales (33%) - The Company’s budgeted net sales.

The Annual Incentive compensation opportunity is expressed as a percentage of the executive officer’s base salary multiplied by a bonus factor. Bonus factors for each Named Executive Officer are as follows:


Named Executive Officer	2021 Bonus Target	2022 Bonus Target

Gary D. Fields	100%	100%
Rebecca A. Thompson	65%	65%
Larry G. Stewart (1)	60%	—%
Stephen E. Wakefield	65%	65%
Casey R. Kidwell (2)	—%	50%
Gordon D. Wichman (3)	—%	50%
(1) Mr. Stewart was hired as Vice President of the Company and President of AAON Coil Products, Inc. effective April 1, 2020. He was promoted to Executive Vice President of AAON, Inc. effective January 1, 2022. Mr. Stewart resigned from the Company effective August 16, 2022.
(2) Mr. Kidwell was hired as Director of Administration in June 2021. He was promoted to Vice President, Administration effective May 12, 2022.
(3) Mr. Wichman was promoted to Executive Vice President of AAON Coil Products effective January 1, 2022 and President of AAON Coil Products effective February 24, 2023.

The following table reflects performance and payout level percentages for the Annual Incentive compensation opportunity:


Metric	Weighting	Performance Level (% of Target) (1)			Payout Level (% of Target) (1)
		Threshold	Target	Maximum	Threshold	Target	Maximum
Operating Profit	67%	80%	100%	125%	33.33%	100%	200%
Net Sales	33%	95%	100%	105%	33.33%	100%	200%
(1) For performance between stated levels shown, payouts are determined based on straight-line, linear interpolation. No payout will be made if threshold performance is not met.

For 2022, we utilized two distinct Opportunity Budgets. We believe the use of two distinct Opportunity Budgets is appropriate based upon the responsibilities as well as the scope of influence of our PEO, PFO and our other NEOs.

The first Opportunity Budget includes Mr. Fields and Ms. Thompson, as the PEO and PFO of the Company, have significant influence over and are accountable for the results of the entire Company, AAON, Inc. (a Nevada Corporation). Thus the Opportunity Budget for Mr. Fields and Ms. Thompson was based upon the Company's consolidated results, including the results of BASX, Inc.

The second Opportunity Budget applies to the other NEOs, as they have significant influence over and are accountable for the results of the legacy companies, AAON-Oklahoma and AAON Coil Products, Inc. For the other NEOs, the Opportunity Budget for 2022 was based upon the consolidated results of the legacy companies.

The following table details the actual results for the fiscal year ended December 31, 2022 for the Company:

Metric

Opportunity Budget

Actual Results

% of Opportunity Budget

Bonus Factor

Operating Profit

$130.2 million

$130.5 million

100%

.68

Net Sales

$756.5 million

$888.8 million

117%

.66

Weighted Bonus Factor

1.34

The following table details the actual results for the fiscal year ended December 31, 2022 for the legacy companies:

Metric

Opportunity Budget

Actual Results

% of Opportunity Budget

Bonus Factor

Operating Profit

$119.7 million

$122.0 million

102%

.72

Net Sales

$656.8 million

$771.1 million

117%

.66

Weighted Bonus Factor

1.38

The eligible bonus amounts for our NEOs are shown in the table below:


Named Executive Officer	Base Salary		Eligible % of Base Salary	Bonus Target	Weighted Bonus Factor		Annual Incentive Bonus Amount
Gary D. Fields	$720,192	(1)	100%	$720,192	1.34	(5)	$1,106,626
Rebecca A. Thompson	$341,154	(1)	65%	$221,750	1.34		$296,291
Larry G. Stewart (2)	$240,855	(1)	—	—	—		—
Stephen E. Wakefield	$312,115	(1)	65%	$202,875	1.38		$280,453
Casey R. Kidwell (3)	$238,246	(1)	50%	$119,123	1.38		$164,675
Gordon D. Wichman (4)	$250,000	(1)	50%	$125,000	1.38	(5)	$198,719
(1) Salary is cash compensation for the year and reflects varying pay levels during the year.
(2) Mr. Stewart was hired as Vice President of the Company and President of AAON Coil Products, Inc. effective April 1, 2020. He was promoted to Executive Vice President of AAON, Inc. effective January 1, 2022. Mr. Stewart resigned from the Company effective August 16, 2022.
(3) Mr. Kidwell was hired as Director of Administration in June 2021. He was promoted to Vice President, Administration effective May 12, 2022.
(4) Mr. Wichman was promoted to Executive Vice President of AAON Coil Products effective January 1, 2022 and President of AAON Coil Products effective February 24, 2023.
(5) Mr. Fields and Mr. Wichman both received additional 15% discretionary amounts as part of the Annual Incentive Bonus

For our NEOs to be eligible to qualify for the Company’s annual incentive cash bonus, the Company’s actual performance must equal at least 80% of the annual Opportunity Budget threshold amount for Operating Profit and at least 95% of the annual Opportunity Budget threshold amount for Net Sales which is set in advance (typically in December for the following year) by the Compensation Committee.

At the recommendation of the Compensation Committee, the Board has the discretion in the case of Mr. Fields and Mr. Fields has the discretion in the case of other NEOs to increase or decrease the bonus amount earned by each NEO up to 15% based upon how such individual has performed in relation to his or her annual objectives. No such adjustments were made for 2020 or 2021. For 2022, Mr. Fields' bonus was increased $144,343 and Mr. Wichman's bonus was increased $25,920.

The annual incentive bonus, when awarded, is reported in the "Summary Compensation Table" for each NEO. The "Non-Equity Incentive Plan Compensation" column is the result of the bonus target multiplied by the bonus factor and the "Bonus" column represents any discretionary adjustments made to the Non-Equity Incentive Plan Compensation value.

Equity-Based Compensation

Our policy is that the NEOs’ long-term compensation should be directly linked to enhancing profitability and value provided to our stockholders. Accordingly, the Compensation Committee grants equity awards under our 2016 Incentive Plan, designed to link an increase in stockholder value to compensation. Such grants are largely based upon the recommendation of the principal executive officer (except as to himself) based on the NEOs performance in the prior year and his or her expected future contribution to our performance.

Positive overall Company performance (financial as well as stock price performance) is a primary element associated with the grant of equity-based compensation to the executive officers as a group. When determining the total value of compensation provided to our executive officers, our Compensation Committee, with the advice of our CEO, evaluates various aspects of Company performance in light of general economic conditions, as well as comparison of the Company's performance against similar competitors in the industry. Performance elements considered may include improvement in sales performance, cost containment initiatives, product and marketing development, risk management, or successful completion of major capital projects, including enhancements to manufacturing operations. These elements have not been specifically weighted in determining the amount of the equity incentive awards because the relative importance of each element may change from time to time and the responsibilities of each executive officer, as they contribute to the achievement of any particular objective, may vary.

Factors considered when determining any specific equity-based award include:

•the responsibilities of the executive officer;

•the scope, level of expertise and experience required for the executive officer’s position and the period during which the officer has performed these responsibilities;

•the strategic impact of the officer’s position; and

•the potential future contribution of the officer.

Beginning with grants made in 2021, the Compensation Committee initiated the use of Performance Share Units (PSUs) for NEOs tied to long-term performance criteria and the equity award mix was changed to 50% stock options, 25% restricted shares and 25% PSUs. The PSUs will measure AAON’s three-year total shareholder return (TSR) relative to the constituents of the S&P 600 SmallCap Capital Goods Industry Group (as constituted at the beginning of the performance period). In addition, the vesting horizon for the time-vested restricted shares and stock options was changed to three years to align with the three-year performance period/vesting horizon of the PSUs. Please see the exhibit below

for the relative TSR performance and payout scale:


TSR Percentile Ranking			Payout as a % of Target
80th Percentile or Above			200%
55th Percentile			100%
30th Percentile			50%
Below 30th Percentile			—%

Results between points are interpolated on a straight-line basis. In the event that AAON's absolute TSR is negative over the 3-year performance period, the payout will be capped at 100% of target, regardless of relative performance.

The Committee further increased the emphasis on PSUs in 2022, where the current equity award mix is now 50% PSUs, 25% restricted shares and 25% stock options. These changes have been made considering market “best practices” to balance the need for retention with motivation of long-term performance and shareholder alignment. Over time, the increased use of PSUs and restricted shares as a key component of our Long-Term Incentive Plan will reduce the dilutive effect inherent with the use of stock options.

Awards may be granted to new key employees on their hire date. Other grant date determinations are made by the Compensation Committee, which are based upon the date the Committee met and proper communication was made to the NEO or key employee as defined in the definition of grant date by FASB ASC Topic 718. Stock option exercise prices are equal to the value of AAON stock on the close of business on the determined grant date. We have no program or practice to coordinate timing of grants with release of material, nonpublic information.

We believe it is important for a significant portion of our total compensation to executive officers be in the form of equity. This approach helps ensure the interests of our executive officers are properly aligned with our stockholders and also rewards our executive officers for driving results that enhance profitability and increase stockholder value.

Retirement Benefits - Defined Contribution Plan, 401(k) and Health Savings Account

We sponsor a defined contribution plan (the "Plan”). Eligible employees may make contributions in accordance with the Plan and IRS guidelines. In addition to the traditional 401(k), eligible employees are given the option of making an after-tax contribution to a Roth 401(k) or a combination of both. The Plan provides for automatic enrollment and for an automatic increase to the default deferral percentage at January 1st of each year. Eligible employees are automatically enrolled in the Plan at a 6% deferral rate and currently contributing employees' deferral rates are increased to 6% each year, unless their current rate is above 6% or the employee elects to decline the automatic enrollment or increase.

The Company presently matches 175% up to 6% of employee contributions of eligible compensation. Administrative expenses for the Plan are paid for by Plan participants. Additionally, Plan participant forfeitures are used to reduce the cost of the Company contributions. We contribute in the form of cash and direct the investment to shares of AAON stock. Employees are 100% vested in salary deferral contributions and vest 20% per year at the end of years two through six of employment in employer matching contributions.

The amounts contributed by us to each NEO under the 401(k) plan are based on actual contributions and the base salary, bonus and equity compensation of the employee, and are reported in the “All Other Compensation” column of the “Summary Compensation Table” for each NEO, if applicable, and if the threshold reporting requirements were met. Our employees participate in a high-deductible

health savings plan wherein they may open a Health Savings Account. We match 175% of employee contributions to their Health Savings Account.

Equity Ownership and Retention Guidelines

The Board approved robust equity ownership and retention guidelines for directors, executive officers and other key employees in order to further align the interest of our directors and executive officers with those of our stockholders. Our equity ownership and retention guidelines are as follows:

•Amount of Ownership: determined as a multiple of the individual’s base salary or a specified dollar value, as noted below. These amounts represent the minimum amount of AAON stock an individual should seek to acquire and maintain:


Position			Minimum Stock Ownership Requirements
CEO			6 times base salary
President (when separate from CEO)			4 times base salary
Other Executive Officers			3 times base salary
Non-Officer Senior Leadership Team Members			2 times base salary
Chair and Vice Chair			6 times base retainer plus chair fee
Directors			6 times base retainer

•Eligible Forms of Equity to Determine Value:

◦Shares actually owned by the individual will be valued at market value if the individual provides documentation of such ownership

◦Shares held in the Company's 401(k) plan

◦Unvested restricted stock awards

•Retention Requirements for Equity Awards:

◦In the event a Subject Person is not meeting the Minimum Stock Ownership requirements, the Subject Person must retain 75%, net of taxes, of each award as it vests.

As of March 20, 2023, all current non-employee directors, except Mr. Stewart and Mr. Ware satisfy the ownership requirement. As of March 20, 2023, all current non-employee directors are in compliance with the Company's Retention Requirements. Since Mr. Fields is an executive officer of the Company (in addition to being a director), he must comply with the equity ownership guidelines applicable to his respective officer position. As of March 20, 2023, Ms. Thompson and Mr. Wakefield satisfy the minimum ownership requirement and all other NEOs are in compliance with the Company's Retention Requirements.

Prohibition on Hedging Stock

Our Insider Trading Policy prohibits our directors, NEOs and all other insiders (including each of their designees) from engaging in short sales or from hedging transactions of any nature that are designed to hedge or offset a decrease in market value of such person’s ownership of the Company's equity securities. Our Insider Trading Policy also prohibits our directors, NEOs and all other insiders (including each of their designees) from purchasing financial instruments or engaging in other problematic transactions involving the Company’s equity securities, including, puts, calls, collars, forward contracts or other derivative securities concerning the Company's equity securities. We prohibit such conduct since purchasing such financial instruments or engaging in such transactions would result in our

insiders no longer being exposed to the full risks of ownership of the Company’s equity securities, which may weaken the alignment of our insiders with the objectives of the Company’s stockholders. Additionally, our directors, NEOs and all other insiders may not hold their Company equity securities in a margin account.

Clawback Policy

Our Company has a Compensation Adjustment and Recovery Policy for our NEOs. Pursuant to this policy (commonly referred to as a clawback policy), our NEOs are subject to a compensation clawback (with a three-year look-back period) that requires reimbursement of any bonus or incentive compensation (as well as the cancellation of unvested, restricted or deferred equity awards) in the event of officer misconduct that was a material factor causing a restatement of the Company’s financial statements.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the disclosures contained in the Compensation Discussion and Analysis section of this Proxy Statement required by Item 402(b) of Regulation S-K. Based upon this review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis section be included in this Proxy Statement and incorporated by reference in our Form 10-K.


Compensation Committee of the Board of Directors:

Angela E. Kouplen, Chair
A.H. McElroy II, Member
Bruce Ware, Member

The information contained in this Compensation Committee Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates such information by reference in any such filing.

Compensation Committee’s Interlocks and Insider Participation

No member of the Compensation Committee is or has been a former or current NEO of AAON or had any relationships requiring disclosure by us under the SEC’s rules requiring disclosure of certain relationships and related-party transactions. None of our NEOs identified herein served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity.

Compensation of Named Executive Officers

The “Summary Compensation Table” set forth below should be read in connection with the tables and narrative descriptions that follow. The “Grants of Plan-Based Awards Table”, and the description of the material terms of the non-qualified options and restricted stock awards granted in 2022, 2021 and 2020 that follows it, provide information regarding the long-term equity incentives awarded to NEOs in 2022, 2021 and 2020 that are also reported in the “Summary Compensation Table”. The “Outstanding Equity Awards at Fiscal Year End Table” and “Option Exercises and Stock Vesting Table” provide further information on the NEOs’ potential realizable value and actual value realized with respect to their equity awards.

Except for the separation agreement with Mr. Stewart, we did not have any pension plans, non-qualified deferred compensation plans or severance, retirement, termination, written or unwritten constructive termination or change in control arrangements for any of our NEOs for the year ended December 31, 2022.


Summary Compensation Table
Name and Principal Position(8)	Year	Salary ($)	Bonus ($)	Restricted Stock Awards(1) ($)	Option Awards(1) ($)	Performance Share Units(1) ($)	Non-Equity Incentive Plan Compensation ($)	All Other Compensation ($)		Total ($)

Gary D. Fields President and CEO	2022	720,192	144,343	418,216	419,259	690,696	962,283	46,473	(2)	3,401,462
	2021	676,923	—	417,035	623,176	397,117	722,700	75,157	(2)	2,912,108
	2020	532,098	—	272,071	1,038,471	—	487,036	57,997	(2)	2,387,673

Rebecca A. Thompson Vice President, Finance, Chief Financial Officer, and Treasurer	2022	341,154	—	86,128	86,312	142,184	296,291	35,793	(3)	987,862
	2021	296,731	—	93,393	178,033	113,500	188,887	36,217	(3)	906,761
	2020	248,092	—	79,756	320,907	—	124,208	34,453	(3)	807,416

Larry G. Stewart Former Vice President, President of AAON Coil Products	2022	240,855	—	81,190	81,380	134,086	—	416,641	(4)	954,152
	2021	255,770	—	76,925	146,895	93,486	163,840	35,031	(4)	771,947
	2020	201,638	—	43,941	193,170	—	102,602	26,973	(4)	568,324

Stephen E. Wakefield Vice President, Chief Operating Officer	2022	312,115	—	77,473	77,681	128,001	280,453	36,096	(5)	911,819
	2021	287,308	—	139,982	267,050	170,118	199,379	22,387	(5)	1,086,224
	2020	238,058	—	121,553	490,104	—	152,388	34,271	(5)	1,036,374


Casey R. Kidwell Vice President, Administration	2022	238,246	—	63,350	70,111	127,062	164,675	36,224	(6)	699,668



Gordon D. Wichman, Vice President, Executive Vice President of AAON Coil Products	2022	250,000	25,920	55,330	55,486	91,404	172,799	39,702	(7)	690,641


(1) See discussion of assumptions made in valuing these awards in the notes to our financial statements. The values reflect grant date fair value of awards. Compensation costs are recognized for options, performance share units and restricted stock awards over their requisite service period.
(2) Consists of (i) contributions to our 401(k) plan by AAON in the amount of $14,135, $17,866 and $15,728 in 2022, 2021 and 2020, respectively; (ii) director fees in the amount of $30,000, $55,000 and $40,000 in 2022, 2021 and 2020, respectively; (iii) matching contributions to a Health Savings Account in the amount of $1,733, $2,291 and $2,259 in 2022, 2021 and 2020, respectively; (iv) $10 PPE bonus in 2020; and (v) Company paid life insurance premiums in the amount of $605 in 2022.
(3) Consists of (i) contributions to our 401(k) plan by AAON in the amount of $32,025, $31,635 and $29,925, in 2022, 2021 and 2020, respectively; (ii) matching contributions to a Health Savings Account in the amount of $3,012, $4,582 and $4,518 in 2022, 2021 and 2020, respectively; (iii) $10 PPE bonus in 2020; (iv) $150 years of service bonus in 2022; and (v) Company paid life insurance premiums in the amount of $606 in 2022.
(4) Consists of (i) contributions to our 401(k) plan by AAON in the amount of $28,756, $30,450 and $21,173 in 2022, 2021 and 2020, respectively; (ii) matching contributions to a Health Savings Account in the amount of $3,080, $4,582 and $3,658 in 2022, 2021 and 2020, respectively; (iii) $10 PPE bonus in 2020; (iv) $2,132 relocation bonus in 2020; (v) moving expense reimbursement of $49,233 in connection with his resignation effective August 16, 2022; (vi) $335,077 in connection with his resignation effective August 16, 2022; (vii) Company paid life insurance premiums of $108 in 2022; and (viii) $387 for a deduction refund in 2022.
(5) Consists of (i) contributions to our 401(k) plan by AAON in the amount of $32,025, $17,805 and $29,925 in 2022, 2021 and 2020, respectively; (ii) matching contributions to a Health Savings Account in the amount of $3,465, $4,582 and $4,336 in 2022, 2021 and 2020, respectively; (iii) $10 PPE bonus in 2020; and (iv) Company paid life insurance premiums of $606 in 2022.
(6) Consists of (i) contributions to our 401(k) plan by AAON in the amount of $30,998 in 2022; (ii) matching contributions to a Health Savings Account in the amount of $4,620 in 2022; and (iii) Company paid life insurance premiums in the amount of $606 in 2022.
(7) Consists of (i) contributions to our 401(k) plan by AAON in the amount of $35,875 in 2022; (ii) matching contributions to a Health Savings Account in the amount of $3,221 in 2022; and (iii) Company paid life insurance premiums in the amount of $606 in 2022.
(8) Mr. Fields was promoted to his position as President and CEO effective May 12, 2020. Ms. Thompson was promoted from Chief Accounting Officer to Vice President, Finance, Chief Financial Officer and Treasurer effective April 30, 2021. Mr. Wakefield was promoted to Vice President and Chief Operating Officer on May 4, 2020. Mr. Kidwell was promoted to Vice President, Administration effective May 12, 2022. Mr. Wichman was promoted to Vice President and Executive Vice President of AAON Coil Products, Inc. effective January 1, 2022 and subsequently promoted to President of AAON Coil Products effective February 24, 2023. Mr. Stewart was hired as Vice President of the Company and President of AAON Coil Products, Inc. effective April 1, 2020. He was promoted to Executive Vice President of AAON, Inc. effective January 1, 2022. Mr. Stewart resigned from the Company effective August 16, 2022 and all of his unvested equity awards were forfeited.

We award stock incentives to key employees and the NEOs either on the initial date of employment or due to performance incentives throughout the year. The 2022, 2021 and 2020 grants to NEOs are reported in the table below. All share numbers and prices have been adjusted to reflect stock splits.


Grants of Plan-Based Awards
Name	Grant Date	All Other Stock Awards: Number of Shares of Stock or Units (#)	All Other Option Awards: Number of Securities Underlying Options (#)	All Other Performance Awards: Number of Shares of Stock or Units (#)	Exercise or Base Price of Option Awards ($/sh)	Grant Date Fair Value of Stock/Option Awards ($) (1)

Gary D. Fields	3/15/22	7,876				418,216
	3/15/22		28,562		54.20	419,259
	3/15/22			15,438		690,626
	3/11/21	4,524				326,769
	3/11/21		31,461		73.36	623,176
	3/11/21			4,524		397,117
	5/11/21	1,408				90,267
	3/11/20	2,900				123,685
	3/11/20		43,040		44.22	498,442
	5/12/20	3,187				148,386
	5/12/20		39,300		47.54	540,029

Rebecca A. Thompson	3/15/22	1,622				86,128
	3/15/22		5,880		54.20	86,312
	3/15/22			3,178		142,184
	3/11/21	1,293				93,393
	3/11/21		8,988		73.36	178,033
	3/11/21			1,293		113,500
	3/11/20	1,870				79,756
	3/11/20		27,710		44.22	320,907

Larry G. Stewart (2)	3/15/22	1,529				81,190
	3/15/22		5,544		54.20	81,380
	3/15/22			2,997		134,086
	3/11/21	1,065				76,925
	3/11/21		7,416		73.36	146,895
	3/11/21			1,065		93,486
	4/01/20	970				43,941
	4/01/20		14,390		46.88	193,170

Stephen E. Wakefield	3/15/22	1,459				77,473
	3/15/22		5,292		54.20	77,681
	3/15/22			2,861		128,001
	3/11/21	1,938				139,982
	3/11/21		13,482		73.36	267,050
	3/11/21			1,938		170,118
	3/11/20	2,850				121,553
	3/11/20		42,320		44.22	490,104

(1) The grant date fair value of the stock awards is calculated in accordance with ASC Topic 718.
(2) Mr. Stewart was hired as Vice President of the Company and President of AAON Coil Products, Inc. effective April 1, 2020. He was promoted to Executive Vice President of AAON, Inc. effective January 1, 2022. Mr. Stewart resigned from the Company effective August 16, 2022 and all of his unvested equity awards were forfeited.


Grants of Plan-Based Awards
Name	Grant Date	All Other Stock Awards: Number of Shares of Stock or Units (#)	All Other Option Awards: Number of Securities Underlying Options (#)	All Other Performance Awards: Number of Shares of Stock or Units (#)	Exercise or Base Price of Option Awards ($/sh)	Grant Date Fair Value of Stock/Option Awards ($) (1)

Casey R. Kidwell (2)	5/30/22	343				17,843
	5/30/22		1,662		53.11	24,489
	5/30/22			1,160		51,899
	3/15/22	857				45,507
	3/15/22		3,108		54.20	45,622
	3/15/22			1,680		75,163

Gordon D. Wichman (3)	3/15/22	1,042				55,330
	3/15/22		3,780		54.20	55,486
	3/15/22			2,043		91,404

(1) The grant date fair value of the stock awards is calculated in accordance with ASC Topic 718.
(2) Mr. Kidwell was hired as Director of Administration in June 2021. He was promoted to Vice President, Administration effective May 12, 2022.
(3) Mr. Wichman was promoted to Executive Vice President of AAON Coil Products effective January 1, 2022 and President of AAON Coil Products effective February 24, 2023.

The aggregate amount of stock compensation expense as determined under FASB ASC Topic 718, Compensation - Stock Compensation, for 2022, 2021 and 2020 with respect to outstanding options and restricted stock awards granted to the NEOs is shown in the “Summary Compensation Table”. The grant date fair value of the options and restricted stock awards granted to the NEOs in 2022, 2021 and 2020 as determined under FASB ASC Topic 718 for purposes of our financial statements is shown in the “Grants of Plan-Based Awards Table". The “Grants of Plan-Based Awards Table” provides additional detail regarding the options and restricted stock awards granted to NEOs in 2022, 2021 and 2020, including the vesting and other terms that apply to the options and restricted stock awards.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

A discussion of 2022 salaries, bonuses and long-term incentive awards is included in “Executive Compensation”.

NEOs are not separately entitled to receive dividend equivalent rights with respect to each stock option; however, dividends are paid for restricted stock awards (retroactively upon vesting). Each non-qualified stock option award described in the “Grants of Plan-Based Awards Table” above expires on the tenth anniversary of its associated grant date and vests in equal installments over three years for Board members and five years for executives. As of March 2021, all new non-qualified stock option grants vest in equal installments over three years for both Board members and executives.

Restricted stock awards vest in equal installments over the course of one, two or three years for Board members (with such vesting period determined by, and equal to, the amount of time remaining on such Board member's then current term). Restricted stock awards granted to Gary D. Fields vest over a three, two or one-year period (in the case of awards relating to his service as a director). In the case of awards relating to his service as an officer, historically, restricted stock awards vested over five years. However, as of March 2021, all new grants of restricted stock awards vest over three years.

The following table presents information regarding outstanding equity awards as of December 31, 2022:


Outstanding Equity Awards at Fiscal Year End
	Option Awards					Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Exercise Price ($)	Grant Date	Expiration Date	Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested		Equity Incentive Plan Awards: Market Value of Shares of Stock That Have Not Vested ($)

Gary D. Fields				1/2/18	N/A	1,200	(1)	90,384
		12,660	36.95	1/2/18	1/2/28
	25,000	37,600	41.37	3/11/19	3/11/29
				3/11/19	N/A	2,000	(1)	150,640
	17,216	25,824	44.22	3/11/20	3/11/30
				3/11/20	N/A	1,740	(1)	131,057
				5/12/20	N/A	765	(1)	57,620
	15,720	23,580	47.54	5/12/20	5/12/30
	10,487	20,974	73.36	3/11/21	3/11/31
				3/11/21	N/A	3,016	(2)	227,165
				3/11/21	N/A	4,524	(3)	340,748
				5/11/21	N/A	939	(2)	70,725
	—	28,562	54.20	3/15/22	3/15/32
				3/15/22	N/A	15,438	(4)	1,162,790
				3/15/22	N/A	7,876	(2)	593,220

Rebecca A. Thompson				1/2/18	N/A	260	(1)	19,583
	23,040	5,760	36.95	1/2/18	1/2/28
	36,600	24,400	41.37	3/11/19	3/11/29
				3/11/19	N/A	400	(1)	30,128
	11,084	16,626

SEC Form DEF 14A filed by AAON Inc.