the closing price on the NYSE of our common stock on that date (the “Fair Market Value”). From time to time, our Board will consider making grants under other special circumstances, such as when recruiting new executive talent, upon the promotion of an executive and to retain key individuals. Any and all other grants (other than the Marchspring grants) are effective as of the date of the event (e.g.(e.g., new hire or promotion date) and are priced at the Fair Market Value of our common stock on that date.
Restricted Stock. RestrictedStock Options. Stock options represent the right to purchaseis a share of our common stock at a fixed price (the exercise price) for a specified period of time (the option term). The exercise price isthat has vesting restrictions tied to continued employment. Restricted Stock provides executive officers with the Fair Market Valueopportunity to earn full value shares of our common stockstock. The Committee views Restricted Stock as an excellent mechanism to align executive interests with those of shareholders by supporting increased share ownership for key executives. Restricted Stock is also an effective employee retention tool based on the datevesting schedule which occurs over a period of grant. The executive officer benefits only if our stock value appreciates fromseveral years. Depending on the grant date through the exercise date. In Fiscal 2011, we did not grant stock options to any executive officers, but we have granted them in past years.
Most of the stock options we have awarded our executive officersagreement, Restricted Stock grants may either cliff-vest, which means they vest all at the rate of 25% per year over the first four years following the date of grant and some stock options vestonce at the end of three years followinga specified vesting period, or step vest, which means they vest in pro rata increments over a specified vesting period. The Committee’s preferred vesting schedule is a four year pro rata vesting (25% per year) structure. If the date of grant. Stock options issued prior to January 29, 2005 will generally expire if not exercised ten years from the date of grant while stock options granted after January 29, 2005 will generally expire if not exercised seven years from the date of grant. If an executive officer dies, unvested stock options will immediately vest and the executive officer’s estate will have one year from the date of death to exercise all stock options. If an executive officer’s employment is terminated by reason of retirement or disability (retirement as determined by our Board), unvested stock options will immediately vest and he or she will normally have one year from the date of termination to exercise all stock options. Upon the termination of an executive officer’s employmentleaves for any reason other than death, retirement (as determined by our Board) or disability before vesting, the unvested portion of the Restricted Stock award will be forfeited. If the executive officer dies, becomes disabled or retires, the Restricted Stock award will have sixty days from the date of termination to exercise all vested stock options.fully vest. In the event of a Change in Control, as that term is defined on page 57 of this Proxy Statement, allthe restricted stock optionsaward will immediately vest and will be exercisable bypayable to the executive officer. In any event, the exercise must occurofficer within the remaining termthirty days of the stock option. Any portionChange in Control.
Performance Shares. As with Restricted Stock,Performance Shares provide executive officers with the opportunity to earn full value shares of our stock. However, a three-year performance cycle (the “Performance Cycle”) is established at the beginning of each grant and the amount of the stock option not exercised withinaward is determined by our performance on total shareholder return relative to the remaining termPerformance Group at that time over the Performance Cycle. If an executive officer’s employment is terminated for any reason other than death, retirement or disability before the end of the stock optionPerformance Cycle, the Performance Share award is forfeited. If an executive officer’s employment is terminated due to death, retirement or disability during the Performance Cycle, he or she will terminate.receive the target number of shares set forth in his or her Performance Share Award Agreement within thirty days of the triggering event. In the event of a Change in Control, the Target Number of Performance Shares will immediately vest and will be payable to the executive officer within thirty days of the Change in Control. The Committee views Performance Shares as a critical link between management compensation accumulation and the creation of shareholder value.
Stock Appreciation Rights (“SARs”). Althoughbeginning in Fiscal 2012 the use of SARs was discontinued except in extraordinary circumstances, the following narrative is provided because some of our Named Executive Officers hold SARS granted them prior to Fiscal 2012 as indicated in the “2013 Outstanding Equity Awards at Fiscal Year-End Table” beginning on page 50 of this Proxy Statement, the “2013 Option Exercises and Stock Vested Table” beginning on page 53 of this Proxy Statement and as referenced in “Potential Payments Upon Termination or Change In Control” beginning on page 55 of this Proxy Statement
A stock appreciation rightis similar to a stock option in that it allows the recipient to benefit from any appreciation in our stock price from the grant date through the exercise date. However, with a SAR, the executive officer is not required to actually purchase all of the exercised shares (as with a stock option), but rather he or she just receives the amount of the increase in the form of shares of our stock. SARs may not be settled in cash. The 2001 and 2008 Plans provide that SARs may not be granted at less than 100% of the Fair Market Value of our common stock on the date of grant.
SARs have a seven-year term and vest either (i) one-fourth (25%) on each of the first, second, third and fourth anniversaries of the date of the grant, or (ii) one-half (50%) on the second year and one-fourth (25%) on each of the third and fourth anniversaries of the date of the grant. If an executive officer dies, unvested SARs will immediately vest and the executive officer’s estate will have one year from the date of death to exercise all SARs. If an executive officer’s employment is terminated by reason of retirement or disability (retirement as determined by our Board), unvested SARs will immediately vest and he or she will normally have one year from the date of termination to exercise all SARs. Upon the termination of an executive officer’s employment for reason other than death, retirement or disability, the executive officer will have sixty days from the date of termination to exercise all vested SARs. In the event of a Change in Control, all SARs will immediately vest and will be exercisable by the executive officer. In any event, the exercise must occur within the remaining term of the SARs. Any portion of the SARs not exercised within the remaining term of the SARs will terminate.
Restricted Stock. Restricted Stock is a share of our common stock that has vesting restrictions tied to continued employment. Restricted Stock provides executive officers with the opportunity to earn full value shares of our common stock. The Committee views Restricted Stock as an excellent mechanism to align executive interests with those of shareholders by supporting increased share ownership for key executives. Restricted Stock is also an effective employee retention tool based on the vesting schedule which occurs over a period of several years. Depending on the agreement, Restricted Stock grants may either cliff-vest, which means they vest all at once at the end of a specified vesting period, or step vest, which means they vest in pro rata increments over a specified vesting period. The Committee’s preferred vesting schedule is a four year pro-rata vesting (25% per year) structure. If the executive officer leaves for any reason other than death, retirement (as determined by our Board) or disability before vesting, the unvested portion of the Restricted Stock award will be forfeited. If the executive officer dies, becomes disabled or retires, the Restricted Stock award will fully vest. In the event of a Change in Control, the restricted
stock award will immediately vest and will be payable to the executive officer within thirty days of the Change in Control.
Performance Shares. As with Restricted Stock, Performance Shares provide executive officers with the opportunity to earn full value shares of our stock. However, a three-year performance cycle (the “Performance Cycle”) is established at the beginning of each grant and the amount of the award is determined by our performance on total shareholder return relative to the Performance Group over the Performance Cycle. If an executive officer’s employment is terminated for any reason other than death, retirement or disability before the end of the Performance Cycle, the Performance Share award is forfeited. If an executive officer’s employment is terminated due to death, retirement or disability during the Performance Cycle, he or she will receive the target number of shares set forth in his or her Performance Share Award Agreement within thirty days of the triggering event. In the event of a Change in Control, the Target Number of Performance Shares will immediately vest and will be payable to the executive officer within thirty days of the Change in Control. The Committee views Performance Shares as a critical link between management compensation accumulation and the creation of shareholder value.
Benefits and Perquisites
The Committee supports a compensation philosophy for our executive officers that is more heavily weighted toward annual and long-term performance-based compensation than toward benefits and perquisites.
The perquisites and other benefits we provide our Named Executive Officers are summarized in the 20112013 Summary Compensation Table, the 20112013 All Other Compensation Table and the 20112013 Nonqualified Deferred Compensation Table, including footnotes, in this Proxy Statement. In addition, we provide our executive officers with core benefits available to all full-time employees (e.g.(e.g., coverage for medical, dental, prescription drugs, basic life insurance and long-term disability coverage) as well as a supplemental Executive Officer Medical Plan. The supplemental Executive Officer Medical Plan is an insured plan which provides current officers at the Executive Vice President level and above reimbursement for medical and dental out of pocket expenses that are not covered by the underlying medical plan. Typical payments are for deductibles, co-pays and similar expenses.
Retirement Plans
We do not provide a qualified retirement program for our Named Executive Officers norand there is therenot a supplemental executive retirement plan or any other retirement plan available to them other than our 401(k) Plan and our Nonqualified Deferred Compensation Plan. Please see the 20112013 Pension Benefits Table on page 4854 and “Retirement Benefits” beginning on page 4854 of this Proxy Statement.
Termination and Change Inin Control Arrangements
In General. Pursuantto theiremployment agreements, our Named Executive Officers are entitled to compensation and other benefits if their employment terminates or if there is a Change in Control, as described beginning on page 49 55of this Proxy Statementunder “Potential Payments upon Termination or Change Inin Control”. Termination and Change in Control compensation and other benefits are established at the time a Named Executive Officer signs an employment agreement.
Termination. Our Named Executive Officers are entitled to compensation and other benefits in an amount the Committee believes is appropriate, taking into account the time it is expected to take a terminated employee to find another job. Compensation and other benefits upon termination are intended to ease the consequences to an employee of an unexpected termination of employment. We benefit in that the employment agreements contain restrictive covenants that continue for a period of time following termination.
Change in Control-In General. The Committee and our Board recognize the importance to us and our shareholders of avoiding the distraction and loss of key management personnel that may occur in connection with any rumored, threatened or actual Change in Control of the Company. To that end, the Committee and our Board believe that properly designed Change in Control provisions in our Named Executive Officer’s employment agreements protect shareholder interests by enhancing executive focus during rumored or actual Change in Control activity through:
incentives to remain with us despite uncertainties while a transaction is under consideration or pending;
· | incentives to remain with us despite uncertainties while a transaction is under consideration or pending; |
assurances of severance and other benefits in the event of termination; andimmediate vesting of equity elements of total compensation after a Change in Control.
· | assurances of severance and other benefits in the event of termination; and |
· | immediate vesting of equity elements of total compensation after a Change in Control. |
To diminish the potential distraction due to personal uncertainties and risks that inevitably arise when a Change in Control is rumored, threatened or pending, the Committee and our Board have provided our Named Executive Officers with what the Committee and our Board determined to be competitive Change in Control compensation and benefit provisions in their employment agreements. The employment agreements of our Named Executive Officers provide for specific enhanced payments and benefits in the event of a Change in Control.
Change in Control-Double Trigger. The enhanced termination benefits payable in connection with a Change in Control require a “double trigger” which means that (i) if a Change in Control occurs and (ii) during the period beginning six (6) months before the Change in Control and ending twenty-four (24) months after the Change in Control, (a) an executive officer’s employment agreement is terminated by us or our successor without good cause, or (b) the executive officer’s employment agreement is terminated by the executive officer with good reason, the executive officer will be eligible for the Change in Control compensation and benefits. A double trigger was selected in order to enhance the likelihood that an executive officer will remain with us after a Change in Control, since the executive officer will not receive the change in control compensation payments and benefits if he or she voluntarily resigns after the Change in Control event. Thus, the executive officer is protected from actual or constructive dismissal for twenty-four months after a Change in Control, while any new controlling party or group is better able to retain the services of a key corporate asset.
Committee Actions in Fiscal 20112013 Concerning Named Executive Officer Compensation
In General
In General
At its March 2011April 2013 meeting, the Committee reviewed the market data and analyses provided by Hay Group and determined that our overall compensation program is reasonably competitive and consistent with the Committee’s compensation objectives. In determining compensation for our Named Executive Officers for Fiscal 2011,2013, the Committee considered many factors, including:
our Board’s judgment and satisfaction with the Company’s performance;
· | our Board’s judgment and satisfaction with the Company’s performance; |
assessment of the individual executive officer’s performance and potential for future contribution to the Company;the nature and scope of the executive officer’s responsibilities and his effectiveness in leading our initiatives to successfully increase customer satisfaction, enhance our growth, and ensure compliance with our policies;
· | assessment of the individual executive officer’s performance; |
desired competitive positioning of compensation; and· | the nature and scope of the executive officer’s responsibilities and his effectiveness in leading our initiatives to successfully increase customer satisfaction, enhance our growth, and propose, implement and ensure compliance with our policies; |
· | desired competitive positioning of compensation; |
· | future potential for the executive officer; and |
The Committee also considered the compensation practices and performances of our Peer Group and our Performance Group.
Base Salaries
Based on their performance during Fiscal 2010,2012, and with input from Hay Group with respect to market salary data of our Peer Group, the Committee recommended, and the Board approved, the following base salaries for our Named Executive Officers for Fiscal 2011.2013. The base salaries were adjusted effective April 1, 2011.
2013.
FISCAL 20112013 BASE SALARIES
Executive | 2010 Base Salary | 2011 Base Salary | Base Salary Increase |
| Mr. Hall | $800,000 | $850,000 | 6.25% |
| Mr. Shein | $350,000 | $350,000 | (1) |
| Mr. Maloney | $550,000 | $561,000 | 2.00% |
| Mr. Record | $550,000 | $572,000 | 4.00% |
| Mr. Hunter | $375,000 | $400,000 | 6.67% |
|
| | | | | | |
| Executive |
| 2012 Base Salary |
| 2013 Base Salary |
| Base Salary Increase |
| Mr. Glazer |
| $850,000 |
| $950,000 |
| 11.8% |
| Mr. Shein |
| $355,000 |
| $370,000 |
| 4.2% |
| Mr. Record |
| $585,000 |
| $620,000 |
| 6.0% |
| Mr. Lawrence |
| $560,000 |
| $620,000 |
| 10.7% |
| Mr. Hunter | | $405,000 | | $425,000 | | 4.9% |
| Mr. Searles |
| $450,000 |
| $450,000 |
| N/A |
(1) | As Mr. Shein joined the Company on January 10, 2011, his base salary was not adjusted. |
Based on Hay Group’s analysis, it was determinedThe Committee believes that the base salaries of our Named Executive Officers are generally at orcompetitive although the Hay Group Survey (the “Survey”), in which the Company continues to participate, indicates that all but Mr. Hunter’s salaries are below the medianSurvey median. There is a wide range of our Peer Group.
companies in terms of revenue and market capitalization in the Survey. Additionally, job responsibilities sometimes vary from company to company despite similar job titles.
Establishment of 20112013 Senior Executive Incentive Bonus Plan
At its March 2011April 2013 meeting, the Committee recommended, and the Board approved, the parameters for the 20112013 Senior Executive Incentive Bonus Plan (the “2011“2013 Bonus Plan”) and approved the annual cash incentive opportunities for the Named Executive Officers for the Company’s 2011 fiscal yearFiscal 2013 as set forth in the Potential 2013 Bonus Plan Awards table below.on page 37 of this Proxy Statement. The methodology and measurement parameters for the 20112013 Bonus Plan were unchangedchanged from the 20102012 Bonus Plan. However,Plan in that (i) the weighting of the Pre-Tax Earnings Parameter was decreasedincreased from 75%60% under the 20102012 Bonus Plan to 66 2/3rd percent3% under the 20112013 Bonus Plan, and(ii) the weighting of the Comparable Store Sales Parameter was increased from 25%20% under the 20102012 Bonus Plan to 33 1/3rd percent3% under the 20112013 Bonus Plan.Plan and (iii) the Mission Based Goals Parameter was deleted.
2013 BONUS PLAN PARAMETERS
While the methodology and measurement parameters for the 20112013 Bonus Plan were unchanged from the 20102012 Bonus Plan except for the weighting described above and the deletion of a Mission Based Goals parameter, the Pre-Tax Earnings Target Level for the Financial Plan was increased from $57,000,000$53.6 million under the 20102012 Bonus Plan to $71,200,000$69.0 million under the 20112013 Bonus Plan (an(a $8.6 million increase of 20.9%(14.3%) over actual Fiscal 20102012 Pre-Tax Earnings)Earnings of $60.4 million) to provide incentive to our management team in view of the improving economy.a realistic target based on Fiscal 2012 actual performance and market conditions. The 20112013 Bonus Plan design was as follows:is set forth in the following tables and is subject to the following: (i) actual bonus payments will be prorated for Pre-Tax Earnings results between maximum and threshold levels and (ii) in order to earn any portion of the Comparable Store Sales Parameter, the Company must achieve 75% of the Pre-Tax Earnings target level.
Pre-Tax Earnings Parameter
This parameter of the bonus formula is weighted to determineat two-thirds (66 2/3rd percent)(66.7%) of the year-endeach executive’s target bonus amount earned. Actual bonus paymentand its achievement will be prorated formeasured per the metrics below. Pre-Tax Earnings results between the Maximum and Threshold levels.will be measured as a GAAP number.
|
| | | | |
|
| Fiscal 20112013 Pre-Tax Earnings |
| |
Threshold (minimum) bonus payment will be earned at one-half of Target by achieving Fiscal 2013 Pre-Tax Earnings of $65.0M, an increase of 7.7% vs. actual Fiscal 2012 Pre-Tax Earnings of $60.4 million.
|
| $65.0 million |
| 5.8% Below Target |
Target bonus amount will be paid by achieving Fiscal 20112013 Pre-Tax Earnings atof $69.0 million, an increase of 20.9%14.3% vs. actual Fiscal 20102012 Pre-Tax Earnings.GAAP Earnings of $60.4 million.
| $71,200,000
| $69.0 million |
| Target Level |
Maximum bonus amount will be paid at 2 times Target by achieving Fiscal 20112013 Pre-Tax Earnings at 117%108.7% of Target Level, an increase of 41.4%24.2% vs. actual Fiscal 20102012 Pre-Tax Earnings.Earnings of $60.4 million.
|
| $83,300,00075.0 million | 17%
| 8.7% Above Target |
Minimum (Threshold) bonus amount will be paid at ¼ of Target at Fiscal 2011 Pre-Tax Earnings of 83% of Target Level, an increase of 0.4% vs. actual Fiscal 2010 Pre-Tax Earnings. | $59,100,00 | 17% Below Target |
Comparable Store Sales Parameter
This parameter of the bonus formula is weighted to determineat one-third (33 1/3rd percent)(33.3%) of the year-endeach executive’s target bonus amount earned. Measurement is based on fiscal year-end comparable store sales percent change, compared to our Performance Group. Notwithstanding, in order to earn any portion of the Comparable Store Sales bonus
payment, the Company must achieve 75% of the 2011 Pre-Tax Earnings Target level ($53,400,000). Actual bonus paymentand its achievement will be prorated for results betweenmeasured per the Maximum and Threshold levels.
metrics below.
|
|
Threshold (minimum)bonus amount (1/4 of Target) will be paid if the Company’s ranking of total year-end Comparable Store Sales change is at the twenty-fifth percentile among the Company’s Performance Group, provided that 2013 Pre-Tax earnings are $51.8 million or higher. |
Target amount will be paid if ourthe Company’s ranking for total year-end comparable store salesComparable Store Sales change is at the fiftieth percentile (or middle mark) among ourthe Company’s Performance Group.
|
Maximum amount (2 times Target) will be paid if ourthe Company’s ranking of total year-end comparable store salesComparable Store Sales change is at the one-hundredth percentile (or highest rank) among ourthe Company’s Performance Group. |
Threshold bonus amount (1/4 of Target) will be paid if our ranking of total year-end comparable store sales change is at the twenty-fifth percentile among our Performance Group.
|
Potential 20112013 Bonus Plan Awards
Depending on our Pre-Tax Earnings and our ranking among our Performance Group with respect to total year-end Comparable Store Sales, our Named Executive Officers had the opportunity to earn bonuses under the 20112013 Bonus Plan as follows, with actual bonus payment to be prorated for results between the Maximum and Threshold levels:
POTENTIAL 20112013 BONUS PLAN AWARDS
|
| | | | | | |
| Executive |
| Base Salary($) | |
| Bonus Range % (1) (Threshold/Target/Maximum) | |
| Bonus Range $ (2) (Threshold/Target/Maximum) | |
Mr. HallGlazer |
| 950,000 | 850,000
| 41.7% - 100% - 200%
|
| 25-100-200 | | | | 212,500-850,000-1,700,000 | $396,150 - $950,000 - $1,900,000
|
| Mr. Shein |
| 370,000 | 350,000
| 20.8% - 50% - 100%
|
| 12.5-50-100 | | | | 43,750-175,000-350,000 | |
Mr. Maloney | | | 561,000 | | | 17.5-70-140 | | | | 98,175-392,700-785,400 | $76,960 - $185,000 - $370,000
|
| Mr. Record |
| 620,000 | 572,000
| 29.2% - 70% - 140%
|
| 17.5-70-140$181,040 - $434,000 - $868,000
|
| Mr. Lawrence |
| 620,000 |
| 100,100-400,400-800,80029.2% - 70% - 140%
|
| $181,040 - $434,000 - $868,000
|
| Mr. Hunter | | | 400,000425,000 | | | 12.5-50-10020.8% - 50% - 100%
| | $88,400 - $212,500 - $425,000
|
| Mr. Searles (3) |
| 50,000-200,000-400,000450,000 |
| 25% - 60% - 120%
|
| $112,500 - $270,000 - $540,000
|
_________________________
| |
| (1) | Percentage of base salary. |
| |
| (2) | Amount to be paid dependswill depend upon the extent to which the Company achieves Fiscal 2011the Pre-Tax Earnings and Comparable Store Sales parameters established by the Board.set forth above. Actual bonus payments will be prorated for Fiscal 2011 Pre-Tax Earnings results between the maximum and threshold levels. In order to earn any portion of the Comparable Store Sales results betweenParameter, the ThresholdCompany must achieve 75% of the Pre-Tax Earnings target level. |
| |
| (3) | Due to the South Hill Consolidation, Mr. Searles position was eliminated and Maximum levels.he was not offered a position at the Company’s Houston headquarters. However, Mr. Searles remained eligible to participate in the 2013 Bonus Plan on a pro-rata basis (i.e., 19 out of 52 weeks). |
Please see “Committee Actions in 2012Fiscal 2014 Concerning Named Executive Officer Compensation –2011- 2013 Bonus Plan Awards” on page 3742 of this Proxy Statement.Statement for the amounts of bonuses actually paid under the 2013 Bonus Plan.
Long-Term Incentive Compensation Awards
At its March 2011April 2013 meeting, the Committee (i) reviewed the final Total Shareholder Return (“TSR”) results for the three year performance cyclePerformance Cycle that ended on January 29, 2011February 2, 2013 for the March 20082010 Performance Based Restricted Share Grants for Senior Executives,senior executives, (ii) discussed the attainment level based on our TSR results versus our Performance Group, (iii) reviewed the current standing and attainment levels for LTI grants made in March 20092011 and March 20102012 based on the TSR matrix of our Performance Group, (iv) discussed individual LTI grants for senior management executives recommended by management, (v) reviewed and discussed proposed SAR equity grants for mid-management executives, (vi) reviewed estimated shares needed for 2011Fiscal 2013 awards, and (vii)(vi) reviewed shares available for future grants. To determine the size of each equity award, the Committee reviewed market data, prior years’ LTIlong-term equity incentive (“LTI”) decisions, the performance of the Named Executive Officers and recommendations from Hay Group.
Based upon the recommendation of the Committee and the approval of the Board, the following long-term equity incentive (“LTI”)LTI awards were granted to the Named Executive Officers on March 29, 2011April 4, 2013 in consideration of their 2010 performance and as incentive for their future performance:
2011 LTI AWARDS
Executive | Target Performance Shares (1) | SARs (2) | Restricted Stock (3) |
| Mr. Hall | 22,500 | 68,500 | 36,000 |
| Mr. Shein | 2,900 | 0 | 4,700 |
| Mr. Maloney | 7,250 | 22,250 | 11,700 |
| Mr. Record | 7,250 | 22,250 | 11,700 |
| Mr. Hunter | 2,900 | 8,850 | 10,008 |
(1) | The Performance Shares cliff vest after a three-year measurement performance cycle (the “Performance Cycle”) which began on the first day of our 2011 Fiscal Year (January 30, 2011) and ends on the last day of our 2013 Fiscal Year (February 1, 2014). The number of Performance Shares earned will be based on our total shareholder return relative to the “Performance Group”. The number of shares reflected in the table above are the “Target Shares”, which means the number of shares of the Company’s common stock the Named Executive Officer will earn (and receive) at the end of the Performance Cycle if the Company’s results are in the middle (fiftieth percentile) of the Performance Group. On a sliding scale, the shares earned can vary as follows: |
| Percentile Ranking of Performance Group | Performance Shares Earned * |
| 100% | 200% |
| 75% | 150% |
| 50% | 100% |
| 25% | 25% |
| < 25% | 0% |
| * As a percentage of Target Performance Shares shown in the 2011 LTI Awards table above.
|
(2) | The SARs have a grant price of $18.84 (the closing price of our common stock on March 29, 2011) and will vest on a pro rata basis over four years (i.e., 25% per year).
|
(3) | In general, the Restricted Stock will vest on a pro rata basis over four years (i.e., 25% per year). However, 5,308 shares of the Restricted Stock granted Mr. Hunter will cliff vest in three years (i.e., on March 29, 2014).
|
Performance Shares Earned in 2011 Upon Completion of the 2008 Performance Cycle
As the performance criteria for the three-year Performance Cycle that began on the first day of our 2008 Fiscal Year (February 3, 2008) and ended on the last day of our 2010 Fiscal Year (January 29, 2011) (the “2008 Performance Cycle”) were met, the Named Executive Officers who were granted Performance Shares at the beginning of the 2008 Performance Cycle were issued shares of our common stock at 114.3% attainment of the Target Shares as follows:
| | Target Shares | Performance | Payout |
Executive (1) | Target # Shares | Target $ Shares | Attainment | # Shares Earned | $ Shares Earned |
| Mr. Hall | 26,000 | $486,720 | | 29,718 | $556,321 |
| Mr. Record | 15,000 | $280,800 | | 17,145 | $320,954 |
____________________________
(1) | Messrs. Shein, Maloney and Hunter were not employed by the Company at the beginning of the 2008 Performance Cycle; therefore, they were not entitled to receive Performance Shares as a result of the completion of the 2008 Performance Cycle. |
Significant Events Related to the Employment of our Named Executive Officers
Entry Into Employment Agreements
On January 10, 2011, we entered into an Employment Agreement with Mr. Shein for which he received a lump sum payment of $200,000. On April 11, 2011, we entered into Employment Agreements with Messrs. Hall, Record, Maloney and Hunter for which they received shares of Restricted Stock, with a three-year pro rata vesting period, as follows: Mr. Hall (50,000), Mr. Record (30,000), Mr. Maloney (30,000) and Mr. Hunter (8,000). A brief description of the terms and conditions of the Employment Agreements is found under “Executive Officer Employment Agreements” on page 37 of this Proxy Statement.
Vesting Period for Restricted Stock
In prior years Restricted Stock generally cliff vested at the end of three years. However, in their January 2011 meetings, the Committee and the Board decided that beginning with grants in Fiscal 2011 and subject to the discretion of the Board, Restricted Stock will generally vest pro-rata over a four year period (i.e., 25% per year).
Discontinuation of SARS
In their January 2012 meetings, the Committee and the Board decided to discontinue the use of SARs from the equity plan mix except in extraordinary circumstances. The Committee and the Board’s target structure will be to award 45% of a given equity grant in Restricted Stock with a four year pro-rata vesting (i.e., 25% per year) and the remaining 55% in Performance Stock based on the Performance Group then in place. Hay Group, the Committee’s compensation consultant, will collect competitive stock grant (dollar value) information to guide the Committee and the Board with respect to the magnitude of the equity award that should be granted to the Named Executive Officers.
Senior Executive Incentive Bonus Plan
In their January 2012 meetings, the Committee and the Board decided that, unlike in Fiscal 2011 and prior years, beginning in Fiscal 2012 the Named Executive Officers and other key senior executives will be tasked with specific business goals, which will account for a portion of their bonus opportunity within the Senior Executive Incentive Bonus Plan. Historically, a cash bonus under a Senior Executive Incentive Bonus Plan was awarded based only on the achievement of the full year Pre-Tax Earnings Targets and Comparable Store Sales. The Committee and the Board believe these parameters are important and that system should remain for at least half of the cash bonus earnings opportunity for the Named Executive Officers and other members of senior management. However, the Committee and the Board also believe that they can focus our executive officers and other members of senior management on accomplishing key business objectives within the given fiscal year which can support increased profits and shareholder return over a period of years.
Adoption of New Performance Group
In January 2012, our Board adopted a new Performance Group for the Company’s 2012 fiscal year to measure the Company’s relative performance with respect to comparable store sales for purposes of the Senior Executive Incentive Bonus Plan and the Company’s total shareholder return for the purpose of awarding Performance Shares. Please see “Key Considerations in Setting Compensation-Adoption of New Performance Group” on page 25 of this Proxy Statement.
Resignation of Richard Maloney
On January 30, 2012, Richard Maloney, our Chief Merchandising Officer, resigned from the Company to pursue other interests. Mr. Maloney joined the Company in October 2008 and served as Chief Merchandising Officer since February 2010. On February 21, 2012, we entered into a Separation Agreement with Mr. Maloney. The approximate value of the transaction is $1,431,000. We intend to file a copy of the Separation Agreement as an Exhibit to our Form 10-Q for the period ending April 28, 2012. Please see “Transactions with Related Persons-Richard Maloney” on page 18 of this Proxy Statement.
Resignation of Andrew Hall
On March 28, 2012, Andrew Hall, our President and Chief Executive Officer, resigned from the Company to pursue other interests. Mr. Hall joined the Company in February 2006 as President and Chief Operating Officer and
assumed the position of President and Chief Executive Officer in November 2008. Please see “Transactions with Related Persons-Andrew Hall” on page 18 of this Proxy Statement.
Appointment of Michael Glazer as President and Chief Executive Officer
On March 28, 2012, Michael Glazer, a Director of the Company, was appointed to the position of President and Chief Executive Officer on an interim basis. Biographical information concerning Mr. Glazer is provided in “Information Relating to Directors and Director Nominees-Board Composition” beginning on page 3 of this Proxy Statement. Mr. Glazer’s base salary is $850,000, which was Mr. Hall’s base salary at the time of his resignation.
Committee Actions in 2012 Concerning Named Executive Officer Compensation
Fiscal 2011 Overview
The Company’s strategy for Fiscal 2011 was to build on its Fiscal 2010 achievements and to pursue meaningful sales and earnings growth. Total sales for the fiscal year increased 2.8% to $1,512 million and comparable store sales increased 0.5%. SG&A expenses achieved a 50 basis point improvement in the rate, while operating 27 net additional stores. The Company also managed inventory levels and ended the year with comparable store inventories up 1.7%. The Company’s strong balance sheet and cash flow allowed the Company to increase its quarterly dividend rate by 20% and spend $110 million to repurchase 6.8 million shares of its common stock.
Operationally, the Company continued to make progress on a number of its strategic initiatives during 2011. The Company opened 28 new Goody’s stores, rebranded 148 non-Goody’s stores with the Goody’s name and ended the year with 243 Goody’s stores. The Company added 10 Estee Lauder and 10 Clinique counters throughout the year, which helped drive a comparable store sales increase of 9% in cosmetics. During the year, the Company moved forward on the development of an off-price concept, with the goal to leverage its small market expertise with a complementary format to its department store model. Steele’s, its off-price concept, was launched November 1, 2011 with the opening of three stores. The Company also expanded its eCommerce business in 2011 as the number of offerings on the eCommerce website has grown from less than 1,000 products at the beginning of the year to approximately 13,200 products at January 28, 2012. Total eCommerce sales reached $8.6 million for 2011. The Company also completed the roll-out of its markdown optimization tool.
The Company operated throughout the year as a financially sound company. However, the Company did not achieve the Threshold Pre-Tax Earnings and Comparable Store Sales parameters described under “Establishment of 2011 Senior Executive Incentive Bonus Plan” on page 31 of this Proxy Statement.
CEO Fiscal 2011 Performance and Compensation
The Committee focuses much of its time on CEO and senior executive compensation to assure that it reflects operating and financial performance and demonstrates our commitment to enforcing a strong pay for performance philosophy.
Mr. Hall and the management team responded to the economic and market conditions in Fiscal 2011 by focusing on the following: 27 net additional stores in Fiscal 2011, growing its eCommerce business, launching a new “off-price” division (“Steele’s”), completion of the roll-out of the markdown optimization tool, strong inventory and expense controls, and aggressive promotional programs focused on our customer’s needs. Corporate results in Fiscal 2011 included:
· | total sales for the year increased 2.8% to $1,512 million and comparable store sales increased 0.5%; |
· | fiscal 2011 earnings were $31.0 million compared to $37.6 million in Fiscal 2010; |
· | SG&A expenses achieved a 50 basis point improvement in rate while operating 27 net additional stores; |
· | sales productivity by square footage increased and the net number of stores increased by 27 from 786 in 39 states to 813 in 40 states; |
· | the Company’s eCommerce sales grew from $0.4 million in Fiscal 2010 to $8.6 million; and |
· | the Company successfully launched Steele’s by opening 3 stores in 2 states. |
On March 28, 2012, Mr. Hall resigned as President and Chief Executive Officer to pursue other interests.
Other Named Executive Officers Fiscal 2011 Performance and Compensation
Oded Shein. As Chief Financial Officer, Mr. Shein’s responsibilities were to oversee the Company’s finance functions, which include accounting, tax, treasury, financial planning and analysis, private label credit card program, loss prevention and investor relations. He was instrumental in the Company’s fiscal management and the achievement of growth objectives. His financial expertise has added tremendous value to the Company.
The Committee believes that Mr. Shein performed well in Fiscal 2011.
As a result of Mr. Shein’s performance in Fiscal 2011 and as an incentive for future performance, he was granted 10,000 Performance Shares and 8,200 shares of Restricted Stock on March 28, 2012.
Richard Maloney. On January 30, 2012, Mr. Maloney resigned as Chief Merchandising Officer to pursue other interests.
Edward Record. As Chief Operating Officer, Mr. Record’s responsibilities were to (i) oversee real estate and store construction and (ii) oversee the Company’s finance, information technology, internal audit, logistics, risk management and legal functions. He was instrumental in the Company’s achievement of growth objectives including the increase of 27 net new stores in Fiscal 2011. He was also instrumental in the growth of the Company's eCommerce platform and the launching of Steele’s in Fiscal 2011.
The Committee believes that Mr. Record performed well in Fiscal 2011.
As a result of Mr. Record’s performance in Fiscal 2011 and as an incentive for future performance, he was granted 20,800 Performance Shares and 17,000 shares of Restricted Stock on March 28, 2012.
Steven Hunter. As Executive Vice President, Chief Information Officer, Mr. Hunter's responsibilities were to oversee all of the Company's technology strategies, investments and implementations. He was instrumental in the growth of the Company's eCommerce platform in Fiscal 2011 and in the successful launching of Steele’s.
The Committee believes that Mr. Hunter performed well in Fiscal 2011.
As a result of Mr. Hunter’s performance in Fiscal 2011 and as an incentive for future performance, he was granted 8,300 Performance Shares and 6,800 shares of Restricted Stock on March 28, 2012.
At their March 2012 meetings, the Compensation Committee and the Board took the following actions with respect to the compensation of the Company’s Named Executive Officers:
Base Salaries
The Committee, with input from Hay Group with respect to market salary data of our Peer Group and based upon the Company’s performance in Fiscal 2011, recommended to our Board, and our Board approved, the following base salaries for our Named Executive Officers in Fiscal 2012. The base salaries were adjusted effective April 2, 2012.
FISCAL 2012 BASE SALARIES
Executive | 2011 Base Salary | 2012 Base Salary | Base Salary Increase |
| Mr. Glazer (1) | N/A | $850,000 | N/A |
| Mr. Shein | $350,000 | $355,000 | 1.43% |
| Mr. Record | $572,000 | $585,000 | 2.27% |
| Mr. Hunter | $400,000 | $405,000 | 1.25% |
___________________________
| (1) | Although he is not a Named Executive Officer in this Proxy Statement, as our President and Chief Executive Officer, Mr. Glazer’s base salary will be $850,000, which was Mr. Hall’s base salary at the time of his resignation. |
Based on Hay Group’s analysis, it was determined that the base salaries of Mr. Glazer and our Named Executive Officers are generally at or below the median of our Peer Group.
2011 Bonus Plan Awards
The Company did not achieve the Threshold Pre-Tax Earnings and Comparable Store Sales parameters described under “Establishment of 2011 Senior Executive Incentive Bonus Plan” on page 31 of this Proxy Statement. Therefore, our Named Executive Officers were not entitled to, and were not paid, performance based bonuses under the 2011 Bonus Plan.
Long-Term Incentive Compensation Awards
The following long-term equity incentive (“LTI”) awards were granted to our currently employed Named Executive Officers on March 28, 2012 in consideration of their 2011 performance and in recognition of their critical role in the future success and long-term growth of the Company:
20122013 LTI AWARDS
| | | Executive | Performance Shares (1) | Restricted Stock (2) |
| Target Performance Shares (55%)(1) |
| Restricted Stock (45%)(2) |
| Mr. Glazer | |
| 39,600 |
| 32,400 |
| Mr. Shein | 10,000 | 8,200 |
| 7,700 |
| 6,300 |
| Mr. Record | 20,800 | 17,000 |
| 22,000 |
| 18,000 |
| Mr. Lawrence | |
| 22,000 |
| 18,000 |
| Mr. Hunter | 8,300 | 6,800 | | 7,700 | | 6,300 |
| Mr. Searles | |
| N/A |
| N/A |
| |
| (1) | The Performance Shares cliff vest after a three-year measurement performance cycle (the “Performance Cycle”) which began on the first day of the Company’s 20122013 Fiscal Year (January 29, 2012)(February 3, 2013) and ends on the last day of the Company’s 20142015 Fiscal Year (January 31, 2015)30, 2016). The number of Performance Shares earned will be based on the Company’s total shareholder return relative to the Fiscal 20122013 Performance Group. The number of shares reflected in the table above are the “Target Shares”, which means the number of shares of the Company’s common stock the Named Executive Officer will earn (and receive) at the end of the Performance Cycle if the Company’s results are in the middle (fiftieth percentile) of the Fiscal 20122013 Performance Group. On a sliding scale, the shares earned can vary as follows: |
|
| | |
| Percentile Ranking of Performance Group | | Performance Shares Earned * |
| 100% | | 200% |
| 75% | | 150% |
| 50% | | 100% |
| 25% | | 25% |
| < 25% | | —% |
|
| |
| * As a percentage of Target Performance Shares shown in the 2013 LTI Awards table above. |
| |
| (2) | The Restricted Stock will vest on a pro rata basis over four years (i.e., 25% per year). |
Performance Shares Earned in 2013 Upon Completion of the 2010 Performance Cycle
As the performance criteria for the three-year Performance Cycle that began on the first day of our 2010 Fiscal Year (January 31, 2010) and ended on the last day of our 2012 Fiscal Year (February 2, 2013) (the “2010 Performance Cycle”) were met, the Named Executive Officers who were granted Performance Shares at the beginning of the 2010 Performance Cycle were issued shares of our common stock at 135.7% attainment of the Target Shares as follows:
|
| | | | | | | | | | |
|
| Target Shares |
|
|
| Payout |
| Executive (1) |
| Target # Shares |
| Target $ Shares (2) |
| Performance Attainment |
| # Shares Earned |
| $ Shares Earned (3) |
| Mr. Record |
| 20,000 |
| $397,000 |
| 135.7% |
| 27,140 |
| $711,882 |
| Mr. Hunter | | 6,000 | | $119,100 | | 135.7% | | 8,142 | | $213,565 |
____________________________
| |
| (1) | Messrs. Glazer, Shein, Lawrence and Searles were not employed by the Company at the beginning of the 2010 Performance Cycle; therefore, they were not entitled to receive Performance Shares as a result of the completion of the 2010 Performance Cycle. |
| |
| (2) | Based on the fair value ($19.85) of the shares on March 26, 2010, the grant date. |
| |
| (3) | Based on the average of the high and low market price ($26.23) of our common stock on April 4, 2013, the date of issuance. |
Significant Events Related to the Employment of our Named Executive Officers
Resignation of Michael Searles
On June 14, 2013, Michael Searles resigned as President and Chief Operating Officer, South Hill Division of the Company to pursue other interests due to the South Hill Consolidation. Please see “Transactions with Related Persons-Michael Searles” on page 21 of this Proxy Statement.
Resignation of Edward Record
On February 12, 2014, Edward Record resigned as Chief Operating Officer of the Company to pursue other interests.
Senior Executive Incentive Bonus Plan;Mission Based Goals
In their April 2013 meetings, the Committee and the Board decided that, unlike in Fiscal 2012 but consistent with years prior to Fiscal 2012, in Fiscal 2013 the Named Executive Officers and other key senior executives would not be tasked with specific business goals (“Mission Based Goals”) that would account for a portion of their bonus opportunity within the 2013 Bonus Plan. As a result and consistent with plans prior to Fiscal 2012, a cash bonus under the 2013 Bonus Plan would be awarded based only on Pre-Tax Earnings and Comparable Store Sales parameters.
Committee Actions in Fiscal 2014 Concerning Named Executive Officer Compensation
Fiscal 2013 Overview
Strategy. The Company’s strategy for Fiscal 2013 was to build on its 2012 achievements and to pursue meaningful sales and earnings growth. Fiscal 2013 contained 52 weeks, while the Company’s fiscal year ended February 2, 2013 (“Fiscal 2012”) contained 53 weeks. The Company achieved the following results in Fiscal 2013:
Financial Results
Total sales were $1.634 billion versus $1.646 billion for Fiscal 2012, a decrease of approximately 1%, but still the second highest total sales in the Company’s history.
Comparable store sales decreased 1.5%, while on a shifted basis which excludes the first week of 2012, comparable store sales decreased 1.1%.
Gross profit margin was 26.4% versus 27.9% in Fiscal 2012.
Selling general and administrative expense was 24.4% of revenue versus 23.9% on Fiscal 2012.
Earnings were $16.6 million, or $0.51 per diluted share, compared to earnings of $38.2 million, or $1.19 per diluted share, for Fiscal 2012. Adjusting for charges related to the South Hill Consolidation, asset impairment charges related to the Steele's off price division and the Steele's results of operations, adjusted earnings were $40.0 million, or $1.22 per share as compared to adjusted earnings in Fiscal 2012 of $46.3 million, or $1.44 per share.
Direct-To-Consumer sales (eCommerce) increased by approximately $7.0 million to $30.0 million, an increase of 31% over Fiscal 2012.
For the one-year period ended February 1, 2014, the Company had a total shareholder return (“TSR”) of (11.72%), including the reinvestment of dividends. However, over the three-year period ended February 1, 2014, annualized TSR was 34.06%, including the reinvestment of dividends.
The Company increased its quarterly dividend rate by 25%.
Operational Results
The Company opened 28 traditional stores and one Steele’s stores during Fiscal 2013 and had a net increase of 19 stores, growing from 864 stores in 40 states to 883 stores in 40 states.
The South Hill Consolidation was completed in June 2013, resulting in ongoing annual total savings of $5 million in payroll and benefits, not including savings in margin from increased purchasing power and simplified processes.
The tough retail environment also heightened the need to reduce the Company’s cost structure by an additional $5 million. Therefore, approximately 50 positions were eliminated in November.
The Company added several high profile brands across merchandise categories.
The Company increased its private label credit card penetration rate by 290 basis points.
CEO Fiscal2013 Performance and Compensation
In General. The Committee focuses much of its time on CEO and senior executive compensation to assure that it reflects operating and financial performance and demonstrates our commitment to enforcing a strong pay for performance philosophy.
Mr. Glazer and the management team responded to the economic and market conditions in Fiscal 2013 by continuing to implement a top-line growth focused business strategy. Mr. Glazer, in part through his significant retail experience and expertise and his understanding of the Company by virtue of his service as a Director since 2001, has added tremendous value to the Company. As a result, the Company achieved the results set forth in “Fiscal 2013 Overview”, above.
Fiscal 2013 CEO Performance Objectives and Results. Mr. Glazer’s Fiscal 2013 performance objectives and the extent to which he met those performance objectives are reflected in the following table:
|
| | |
Performance Objective
| | Result |
Comparable Store Sales growth of 4%
| | Did not achieve performance objective
|
15% Pre-Tax Earnings growth offsetting all but $6 million of South Hill Consolidation cost synergies
| | Did not achieve performance objective
|
Develop a Succession Plan focusing on the top 5 management positions
| | Achieved - Plan developed and presented to Board
|
Develop a comprehensive marketing plan for Board approval, focused on the customer, incorporating the role of eCommerce, and defining the role of brands and areas of geographic focus
| | In Progress - Conducting consumer market research required for strategy development
|
Develop a 5 year growth plan including plans for Steele’s and incorporating the role of real estate to support the planned growth
| | Growth plan in progress. Steele’s sold to independent buyer.
|
2013 was a challenging year for the retail industry and the Company. Financial results were below expectations. However, under Mr. Glazer’s leadership several actions were taken to strengthen the Company and prepare for future growth. These actions included the South Hill Consolidation, developing a plan for the disposition of the Steele’s off price division and further enhancement of the eCommerce platform.
CEO Compensation. As a result of Mr. Glazer’s performance in Fiscal 2013 and as an incentive for future performance,
his base salary was increased from $950,000 to $969,000 effective April 1, 2014;
he was granted 50,417 Performance Shares and 41,250 shares of Restricted Stock on April 3, 2014; and
his target bonus percentage (100%) under the 2014 Senior Executive Incentive Bonus Plan remained the same as it was under the 2013 Bonus Plan.
Other Named Executive Officers Fiscal2013 Performance and Compensation
Oded Shein. As Chief Financial Officer, Mr. Shein’s responsibilities were to oversee the Company’s finance functions, which include accounting, tax, treasury, financial planning and analysis, private label credit card program, loss prevention and investor relations. He was instrumental in the Company’s fiscal management. His financial expertise has added tremendous value to the Company.
As a result of Mr. Shein’s performance in Fiscal 2013, to adjust his base salary up to a level closer to the 25th percentile of the Peer Group range and as an incentive for future performance,
his base salary was increased from $370,000 to $400,000 effective April 1, 2014;
he was granted 9,167 Performance Shares and 7,500 shares of Restricted Stock on April 3, 2014; and
his target bonus percentage (50%) under the 2014 Senior Executive Incentive Bonus Plan remained the same as it was under the 2013 Bonus Plan.
Edward Record. Mr. Record resigned on February 12, 2014.
Steven Lawrence. As Chief Merchandising Officer, Mr. Lawrence’s responsibilities were to oversee all of the Company’s merchandising strategies. He was instrumental in bringing new brands into our store that our customers desired. Mr. Lawrence’s merchandising expertise has added tremendous value to the Company.
As a result of Mr. Lawrence’s performance in Fiscal 2013 and as an incentive for future performance,
his base salary was increased from $620,000 to $632,400 effective April 1, 2014;
he was granted 34,375 Performance Shares and 28,125 shares of Restricted Stock on April 3, 2014; and
his target bonus percentage (70%) under the 2014 Senior Executive Incentive Bonus Plan remained the same as it was under the 2013 Bonus Plan.
Steven Hunter. As Chief Information Officer, Mr. Hunter’s responsibilities were to oversee all of the Company’s information technology, systems, ancillary sales, eCommerce platform and customer service functions. He was instrumental in an increase in the Company’s direct-to-consumer revenue of 31% and he made significant contributions to our earnings. Mr. Hunter’s expertise has added tremendous value to the Company.
As a result of Mr. Hunter’s performance in Fiscal 2013 and as an incentive for future performance,
his base salary was increased from $425,000 to $433,500 effective April 1, 2014;
he was granted 11,458 Performance Shares and 9,375 shares of Restricted Stock on April 3, 2014; and
his target bonus percentage (50%) under the 2014 Senior Executive Incentive Bonus Plan remained the same as it was under the 2013 Bonus Plan.
Michael Searles. Mr. Searles resigned on June 14, 2013.
At their April 2014 meetings, the Compensation Committee and the Board took the following actions with respect to the compensation of the Company’s Named Executive Officers:
Base Salaries
Based on their performance during Fiscal 2013, with input from Towers Watson with respect to market salary data of our Peer Group and based upon the Company’s performance in Fiscal 2013, the Committee recommended to our Board, and our Board approved, the following base salaries for our currently employed Named Executive Officers in Fiscal 2014. The base salaries were adjusted effective April 1, 2014.
FISCAL 2014 BASE SALARIES
|
| | | | | | |
Executive |
| 2013 Base Salary |
| 2014 Base Salary |
| Base Salary Increase |
| Mr. Glazer |
| $950,000 |
| $969,000 |
| 2.0% |
| Mr. Shein |
| $370,000 |
| $400,000 |
| 8.1% |
| Mr. Lawrence |
| $620,000 |
| $632,400 |
| 2.0% |
| Mr. Hunter | | $425,000 | | $433,500 | | 2.0% |
Based on Towers Watson’s analysis, it was determined that the base salaries of our currently employed Named Executive Officers are all below the median of our Peer Group.
2013 Bonus Plan Awards
The Company did not achieve the Threshold Pre-Tax Earnings and Comparable Store Sales parameters described under “Establishment of 2013 Senior Executive Incentive Bonus Plan” on page 35 of this Proxy Statement. Therefore, our Named Executive Officers were not entitled to, and were not paid, performance based bonuses under the 2013 Bonus Plan.
Long-Term Incentive Compensation Awards
The following long-term equity incentive (“LTI”) awards were granted to our currently employed Named Executive Officers on April 3, 2014 in consideration of their 2013 performance and in recognition of their critical role in the future success and long-term growth of the Company:
2014 LTI AWARDS
|
| | | | |
| Executive |
| Performance Shares (55%)(1) |
| Restricted Stock (45%) (2) |
| Mr. Glazer |
| 50,417 |
| 41,250 |
| Mr. Shein |
| 9,167 |
| 7,500 |
| Mr. Lawrence |
| 34,375 |
| 28,125 |
| Mr. Hunter | | 11,458 | | 9,375 |
| |
| (1) | The Performance Shares cliff vest after a three-year measurement performance cycle (the “Performance Cycle”) which began on the first day of the Company’s 2014 Fiscal Year (February 2, 2014) and ends on the last day of the Company’s 2016 Fiscal Year (January 28, 2017). The number of Performance Shares earned will be based on the Company’s total shareholder return relative to the Fiscal 2014 Performance Group. The number of shares reflected in the table above are the “Target Shares,” which means the number of shares of the Company’s common stock the Named Executive Officer will earn (and receive) at the end of the Performance Cycle if the Company’s results are in the middle (fiftieth percentile) of the Fiscal 2014 Performance Group. |
| |
| (2) | The Restricted Stock will vest on a pro-ratapro rata basis over four years (i.e., 25% per year). |
Executive OfficerEmployment Agreements
The Company has three-year, automatically renewable Employment Agreements (the “Agreements”) with threeall of the currently employed Named Executive Officers (individually an “Executive”). Mr. Glazer is employed as President and Chief Executive Officer; Mr. Shein is employed as Executive Vice President, Chief Financial Officer; Mr. RecordLawrence is employed as Chief OperatingMerchandising Officer; and Mr. Hunter is employed as Executive Vice President, Chief Information Officer. Prior to his resignation,their resignations, Mr. HallRecord was employed as Chief Operating Officer and Mr. Searles was employed as President and Chief ExecutiveOperating Officer, South Hill Division. Mr. Record and Mr. Searles also had a three-year automatically renewable Employment Agreement. Prior to his resignation, Mr. Maloney was employed as Chief Merchandising Officer and had a three-year renewable Employment Agreement.Agreements. The Agreements provide for a base salary and annual incentive (bonus) compensation. The Agreements also provide for perquisites such as an automobile allowance and a financial planning allowance and the Executive’s participation in all other bonus and benefit plans available to executive officers of the Company. Provisions of the Agreements related to termination and Change in Control are discussed in “Potential Payments Upon Termination or Change In Control” beginning on page 4955 of this Proxy Statement.
We filed copiesa copy of theMr. Glazer’s Employment AgreementsAgreement as ExhibitsExhibit 10.25 to our Quarterly Report on Form 10-Q for the period endingended July 28, 2012, which we filed with the SEC on September 6, 2012. We filed a copy of Mr. Lawrence’s Employment Agreement as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the period ended April 5, 2013, which we filed with the SEC on June 13, 2013. We filed copies of Messrs. Record and Shein’s Employment Agreements as Exhibits 10.3 and 10.4 to our Quarterly Report on Form 10-Q for the period ended April 30, 2011, which we filed with the SEC on June 9, 2011. We filed a copy of Mr. Searles’ Employment Agreement as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended October 29, 2011, which we filed with the SEC on December 7, 2011. We filed a copy of Mr. Hunter’s Employment Agreement as Exhibit 10.5 to our Quarterly Report on Form 10-Q for the period ended April 30, 2011, which we filed with the SEC on June 9, 2011. The Employment Agreements can be reviewed on the SEC’s EDGAR database at www.sec.gov.
Stock Ownership by Executive Officers
Our Board believes that an officer who has reached the level of Executive Vice President or above should be a shareholder and should have a financial stake in the Company. On March 29, 2011, the Board adopted a Stock Ownership and Retention Policy for Senior Management (the “Policy”). Among the provisions of the Policy are the following:
1. Target Ownership Level. On and after the later of (i) the fifth anniversary of his or her appointment as an Executive Vice President or higher of the Company, or (ii) March 29, 2016 (i.e., the fifth anniversary of the effective date of this Policy)(in either case, the “Target Date”), each executive officer of the Company must have developed and must thereafter maintain a stock ownership position in the Company (the “Target Ownership Level”) with a minimum value (the “Value”) as follows:
· | A Target Ownership Level for the CEO having a Value equal to three times his or her base salary; and |
· | A Target Ownership Level for all other Executive Vice Presidents or higher having a Value equal to one times his or her base salary. |
2. Eligible Stock. In determining whether the executive officer has achieved his or her Target Ownership Level, the executive officer may include the Value of any Stock owned outright or beneficially owned (e.g., trusts) and shares held in qualified and nonqualified benefit plans, in any event acquired by him or her (i) in open market purchases, (ii) from vested Restricted Stock, (iii) from net shares held following the exercise of Stock Options and Stock Appreciation Rights, (iv) from earned Performance Shares, and (v) from the purchase of Stock in any deferred compensation plan. The executive officer may also include the share value equivalents of gains on vested but unexercised Stock Options and Stock Appreciation Rights. Individual and joint holdings of Stock with an executive officer’s spouse shall count toward achieving the Target Ownership Level.
3. Determination of Stock Value. For purposes of assessing compliance with this Policy, the “Value” of Stock means the greater of (i) the then current fair market value (as defined below) of such Stock held of record by an executive officer and his or her spouse, or (ii) the value of the Stock at the time of acquisition. The Compensation Committee may, in its sole discretion, determine the value of Stock other than those referenced in Section 2 above. For purposes of this paragraph, “fair market value” will mean the closing price of the Stock on the New York Stock Exchange for such date or, if there was no trading of the Stock on such date, for the next preceding date on which there was such trading.
4. Financial Hardship. In the event of a Financial Hardship (e.g., illness, tuition, mortgage), an executive officer, with the prior written consent of the Compensation Committee, may sell Company stock acquired by him or her (such approval would not include any shares of Company stock in any Company sponsored deferred compensation plan) which was acquired to satisfy the Target Ownership Level requirement of this Policy.
The Compensation Committee monitors annual progress toward achieving the Target Ownership Levels set forth in the Policy.
Tax, Accounting and Other Implications
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the company’s CEO or any of the company’s three other most highly compensated executive officers (other than the Chief Financial Officer) who are employed as of the end of the year. This limitation does not apply to compensation that meets the requirements under Section 162(m) for “qualifying performance-based” compensation (i.e.(i.e., compensation paid only if the individual’s performance meets pre-established objective goals based on performance criteria approved by the shareholders.) The Committee’s policy is to design compensation programs that further our best interests and those of our shareholders and that preserve the tax deductibility of compensation expenses.
Incentive bonuses paid to executive officers under our Senior Executive Incentive Bonus Plan and awards granted under our 2001 Plan and our 2008 Plan, other than restricted stock awards, are designed to qualify as performance-based compensation. The Committee also believes, however, that it must maintain the flexibility to take actions that it deems to be in our best interests but which may not qualify for tax deductibility under Section 162(m). In this regard, if the amount of base salary for any of our executive officers exceeds $1 million, which is not currently anticipated to be the case, any amounts over $1 million will not be deductible for federal income tax purposes.
As required under the tax rules, the Company must obtain shareholder approval of the material terms of the performance goals for qualifying performance-based compensation every five years. We last requested and received shareholder approval in 2008. We are seeking shareholder approval at the 2012 Annual Meeting. Therefore, we will seek shareholder approval again on or before the 2017 Annual Meeting.
Committee Considerations
The Committee considered (i) the impact of the $1 million limit on the deductibility of non-performance based compensation imposed by Code Section 162(m), (ii) the accounting treatment of various types of equity-based compensation under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, and (iii) the non-deductibility of excess parachute tax payments under Code Section 280G (and the related excise tax imposed on covered employees under Code Section 4999) in its design of executive compensation programs. In addition, the Committee considered other tax and accounting provisions in developing the compensation programs
for our Named Executive Officers. These included the special rules applicable to non-qualified deferred compensation arrangements under Code Section 409A as well as the overall income tax rules applicable to various forms of compensation. While the Committee strives to compensate our Named Executive Officers in a manner that produces favorable tax and accounting treatment, its main objective is to develop fair, equitable and competitive compensation arrangements that appropriately motivate, reward and retain those executives.
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with our management. Based on that review and discussion, the Compensation Committee recommended to our Board that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for 2011Fiscal 2013 and in this Proxy Statement.
Mr. Glazer was a member of the Compensation Committee during all of Fiscal 2011 and until March 28, 2012, at which time he became employed by the Company as our President and Chief Executive Officer on an interim basis. Since as an employee he is no longer deemed to be independent, as that term is defined by the NYSE and our Corporate Governance Guidelines, Mr. Glazer resigned from the Compensation Committee effective March 28, 2012, which is why this Compensation Committee Report is dated March 28, 2012.
This Compensation Committee Report is provided by the following Independent Directors, as of March 28, 2012, who constitutedconstitute all of the members of the Compensation Committee on that date, with the exception of Mr. Scozzafava, who did not become a Director and a member of the Compensation Committee until February 21, 2012 and who did not attend his first Compensation Committee meeting until March 27, 2012:
Committee:
Earl J. Hesterberg (Chairman)
Alan J. Barocas
Michael L. GlazerDiane M. Ellis
Lisa R. Kranc
C. Clayton Reasor
Ralph P. Scozzafava
The following table summarizes the compensation of our Named Executive Officers for our three fiscal years ended February 1, 2014 (“Fiscal 2013”), February 2, 2013 (“Fiscal 2012”) and January 28, 2012 (“Fiscal 2011”), January 29, 2011 (“Fiscal 2010”) and January 30, 2010 (“Fiscal 2009”), with the exception of Mr. SheinGlazer and Mr. Hunter,Lawrence who were not Named Executive Officersemployed by the Company in Fiscal 2009.
| Named and Principal Position | | Fiscal Year | | | | | Bonus ($) (1) | | Stock Awards ($) (2) | | Option Awards ($) (3) | | Non-Equity Incentive Plan Compensation ($) (4) | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | | All Other Compensation ($) (5) | | Total ($) |
Salary ($) | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Andrew T. Hall | | 2011 | | 841,346 | | | - | | 2,207,765 | | 595,265 | | - | | (3,519) | | 175,667 | | 3,816,524 |
| President and | | 2010 | | 791,346 | | | - | | 496,250 | | 719,000 | | 630,000 | | 89,709 | | 150,398 | | 2,876,703 |
| Chief Executive Officer | | 2009 | | 750,000 | | | - | | 381,900 | | 402,000 | | 408,000 | | 34,176 | | 119,744 | | 2,095,820 |
| | | | | | | | | | | | | | | | | | | | |
| Oded Shein | | 2011 | | 350,000 | | | - | | 161,309 | | - | | - | | (1,086) | | 142,365 | | 652,588 |
| Executive Vice President, | | 2010 | | 20,192 | (6) | 200,000 | | 163,100 | | 222,600 | | - | | (16) | | 22,780 | | 628,656 |
| Chief Financial Officer | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Richard A. Maloney | | 2011 | | 559,096 | | | - | | 981,331 | | 193,353 | | - | | 13 | | 166,379 | | 1,900,171 |
| Chief Merchandising Officer | 2010 | | 547,116 | (7) | - | | 720,500 | | 587,000 | | 336,875 | | 1 | | 280,597 | | 2,472,089 |
| | | 2009 | | 475,000 | | | - | | 190,950 | | 180,900 | | 193,800 | | 53 | | 156,276 | | 1,196,979 |
| | | | | | | | | | | | | | | | | | | | |
| Edward J. Record | | 2011 | | 568,192 | | | - | | 981,331 | | 193,353 | | - | | (17,156) | | 116,508 | | 1,842,227 |
| Chief Operating Officer | | 2010 | | 540,442 | (8) | - | | 720,500 | | 587,000 | | 336,875 | | 90,659 | | 102,774 | | 2,378,250 |
| | | 2009 | | 460,000 | | | - | | 190,950 | | 180,900 | | 203,300 | | 85,191 | | 182,570 | | 1,302,911 |
| | | | | | | | | | | | | | | | | | | | |
| Steven L. Hunter | | 2011 | | 395,673 | | | - | | 415,712 | | 76,907 | | - | | 132 | | 47,591 | | 936,014 |
| Executive Vice President, | | 2010 | | 372,116 | (9) | - | | 119,100 | | 129,420 | | 164,063 | | 2,117 | | 37,325 | | 824,141 |
| Chief Information Officer | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
2011.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Named and Principal Position |
| Fiscal Year |
| Salary ($) |
| Bonus ($) (1) |
| Stock Awards ($) (2) |
| Option Awards ($) (3) |
| Non-Equity Incentive Plan Compensation ($) (4) |
| Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
| All Other Compensation ($) (5) |
| Total ($) |
| Michael L. Glazer (6) | | 2013 | | 932,693 |
| | — |
| | 2,195,856 |
| | — |
| | — |
| | (18,339 | ) | | 289,878 |
| | 3,400,088 |
|
President and Chief Executive Officer | | 2012 | | 709,423 |
| | — |
| | 2,638,923 |
| | — |
| | 1,488,945 |
| | 10,515 |
| | 95,108 |
| | 4,942,914 |
|
| | | | | | | | | | | | | | | | | | | |
| Oded Shein | | 2013 | | 367,404 |
| | — |
| | 426,972 |
| | — |
| | — |
| | 45,896 |
| | 94,846 |
| | 935,118 |
|
| Executive Vice President, | | 2012 | | 354,135 |
| | — |
| | 326,728 |
| | — |
| | 308,318 |
| | 19,161 |
| | 62,417 |
| | 1,070,759 |
|
| Chief Financial Officer | | 2011 | | 350,000 |
| | — |
| | 161,309 |
| | — |
| | — |
| | (1,086 | ) | | 142,365 |
| | 652,588 |
|
| | | | | | | | | | | | | | | | | | | |
| Edward J. Record (6) | | 2013 | | 613,942 |
| | — |
| | 1,219,920 |
| | — |
| | — |
| | 249,435 |
| | 162,969 |
| | 2,246,266 |
|
| Chief Operating Officer | | 2012 | | 582,750 |
| | — |
| | 678,668 |
| | — |
| | 732,186 |
| | 159,792 |
| | 83,703 |
| | 2,237,099 |
|
| | | 2011 | | 568,192 |
| | — |
| | 981,331 |
| | 193,353 |
| | — |
| | (17,156 | ) | | 116,508 |
| | 1,842,228 |
|
| | | | | | | | | | | | | | | | | | | |
| Steven P. Lawrence (6) | | 2013 | | 609,616 |
| | — |
| | 1,219,920 |
| | — |
| | — |
| | 24,805 |
| | 154,976 |
| | 2,009,317 |
|
Chief Merchandising Officer | | 2012 | | 420,000 |
| | — |
| | 1,378,039 |
| | — |
| | 690,704 |
| | 5,055 |
| | 116,896 |
| | 2,610,694 |
|
| | | | | | | | | | | | | | | | | | | |
| Steven L. Hunter | | 2013 | | 421,539 |
| | — |
| | 426,972 |
| | — |
| | — |
| | 20,669 |
| | 56,910 |
| | 926,090 |
|
| Executive Vice President, | | 2012 | | 404,135 |
| | — |
| | 271,085 |
| | — |
| | 360,045 |
| | 10,437 |
| | 43,056 |
| | 1,088,758 |
|
| Chief Information Officer | | 2011 | | 395,673 |
| | — |
| | 415,712 |
| | 76,907 |
| | — |
| | 132 |
| | 47,590 |
| | 936,014 |
|
| | | | | | | | | | | | | | | | | | | |
| Michael M. Searles (6) | | 2013 | | 173,077 |
| | — |
| | — |
| | — |
| | — |
| | 70,584 |
| | 524,173 |
| | 767,834 |
|
President and Chief Operating Officer, | | 2012 | | 450,000 |
| | — |
| | 326,728 |
| | — |
| | 478,440 |
| | 12,939 |
| | 95,691 |
| | 1,363,798 |
|
| South Hill Division | | 2011 | | 173,077 |
| | 25,000 |
| | 554,400 |
| | — |
| | — |
| | — |
| | 50,263 |
| | 802,740 |
|
| |
| (1) | Any amounts shown in this column are discretionary cash bonuses awarded for performance in the fiscal year indicated, but paid during the subsequent fiscal year. In consideration for his decision to acceptaccepting employment with the Company on January 10,September 12, 2011, Mr. SheinSearles received a lump sum payment of $200,000.$25,000. |
| |
| (2) | The amounts shown in this column reflect the grant date fair value for performance stock and restricted stock for the Named Executive Officers with respect to the fiscal year in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 913 to our audited consolidated financial statements for Fiscal 2011, Note 9 to our audited consolidated financial statements for Fiscal 2010 and Note 8 to our audited consolidated financial statements for Fiscal 2009 included in our Annual ReportsReport on Form 10-K for those fiscal years.Fiscal 2013. Further information regarding the 20112013 awards is included in the “2011“2013 Plan-Based Awards” and “2011“2013 Outstanding Awards at Fiscal Year-End” tables later in this Proxy Statement. The grant date fair value of the performance-based awards reflected in this column (the “2011“2013 Performance Shares”) is the Target payout based on the probable outcome of the performance criteria, determined as of the grant date. The maximum potential values for the 20112013 Performance Shares would be 200% of Target and would be as follows: Mr. SheinGlazer ($145,522)2,677,752), Mr. RecordShein ($363,805)520,674), Mr. Lawrence ($1,487,640) and Mr. Hunter ($145,522)520,674). As a result of his resignation, Mr. MaloneySearles forfeited his 20112012 Performance Shares as well as his unvested restricted stock awards as of June 14, 2013. As a result of his resignation, Mr. Record forfeited his 2013 and 20102012 Performance Shares as well as his unvested restricted stock awards as of February 15, 2012. As a result of his resignation, Mr. Hall forfeited his 2011 and 2010 Performance Shares as well as his unvested restricted stock awards as of April 12, 2012.27, 2014. |
Includes the fair market value of a grant of 33,333 shares of Restricted Stock ($506,662) in 2012 in the case of Michael Glazer and the fair market value of a grant of 20,000 shares of Restricted Stock ($305,400) in 2012 in the case of Steven Lawrence associated with a 2-year non-compete provision contained in their Employment Agreements.
| |
| (3) | The amounts shown in this column reflect the grant date fair value for SARs for the Named Executive Officers with respect to the fiscal year in accordance with FASB ASC Topic 718. No SARs were awarded in Fiscal 2012 or Fiscal 2013. Assumptions used in the calculation of these amounts are included in Note 913 to our audited consolidated financial statements for Fiscal 2011, Note 9 to our audited consolidated financial statements for Fiscal 2010 and Note 8 to our audited consolidated financial statements for Fiscal 2009 included in our Annual ReportsReport on Form 10-K for those fiscal years.Fiscal 2013. Further information regarding the 2011 SAR awards is included in the “2011“2013 Outstanding Awards at Fiscal Year-End” table later in this Proxy Statement. Further information regarding the 2013 awards is included in the “2013 Plan-Based Awards” and “2011“2013 Outstanding Awards at Fiscal Year-End” tables later in this Proxy Statement. As a result of his resignation, |
| Mr. MaloneyRecord forfeited his unvested SARs awards as of February 15, 2012. As a result of his resignation, Mr. Hall forfeited his unvested SARs awards as of April 12, 2012.27, 2014. |
| |
| (4) | Non-Equity Incentive Plan Compensation (performance based cash bonus) amounts include any amounts deferred under the Executive Deferred Compensation Plan. Amounts reflect performance based bonuses earned during the fiscal year covered (and paid during the subsequent fiscal year) under the applicable Senior Executive Incentive Bonus Plan. |
| |
| (5) | All other compensation includes deferred compensation matching contributions, auto allowances, estate planning allowances, insurance premiums and other compensation, as set forth in the 20112013 All Other Compensation Table below. |
| |
| (6) | Mr. Shein joined the Company on January 10, 2011 at a base salary of $350,000.The following clarifying information is provided: |
Mr. Glazer joined the Company on March 28, 2012, at a base salary of $850,000.
Mr. Record resigned from the Company on February 12, 2014.
(7) | On February 15, 2010, Mr. Maloney was promoted to Chief Merchandising Officer. Mr. Maloney had been serving as President and Chief Operating Officer of our South Hill Division. In connection with his promotion, Mr. Maloney’s base salary was increased from $475,000 to $550,000. |
Mr. Lawrence joined the Company on April 30, 2012 at a base salary of $560,000.Mr. Searles resigned from the Company on June 14, 2013.
(8) | On February 15, 2010, Mr. Record was promoted to Chief Operating Officer. Mr. Record had been serving as our Chief Financial Officer. In connection with his promotion, Mr. Record’s base salary was increased from $460,000 to $550,000. |
45
(9) | On February 26, 2010, Mr. Hunter was promoted to Executive Vice President, Chief Information Officer. Mr. Hunter had been serving as Senior Vice President, Chief Information Officer. In connection with his promotion, Mr. Hunter’s base salary was increased from $325,000 to $375,000. |
The following table provides information concerning the compensation of our Named Executive Officers found in the “All Other Compensation” column of the 20112013 Summary Compensation Table on page 40.38 of this Proxy Statement.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name |
| Fiscal Year |
| Deferred Compensation Matching Contributions ($) |
| Auto Allowances ($) |
| Estate Planning Allowances ($) |
| Life Insurance Premiums ($) |
| Health Insurance Premiums ($) |
| Relocation Expense Reimburse- ments ($) |
| Tax Reimburse- ments ($) |
| Other ($) (1) |
| Total ($) |
| Michael L. Glazer | | 2013 | | 244,176 |
| | 12,000 |
| | 10,000 |
| | 15,583 |
| | 8,119 |
| | — |
| | — |
| | — |
| | 289,878 |
|
| | | 2012 | | 67,060 |
| | 9,231 |
| | — |
| | 6,869 |
| | 8,110 |
| | 2,439 |
| | 1,399 |
| | — |
| | 95,108 |
|
| | | | | | | | | | | | | | | | | | | | | |
| Oded Shein | | 2013 | | 69,807 |
| | 12,000 |
| | — |
| | 2,686 |
| | 10,353 |
| | — |
| | — |
| | — |
| | 94,846 |
|
| | | 2012 | | 37,625 |
| | 12,000 |
| | — |
| | 2,676 |
| | 10,116 |
| | — |
| | — |
| | — |
| | 62,417 |
|
| | | 2011 | | 37,038 |
| | 12,000 |
| | — |
| | 2,446 |
| | 8,757 |
| | 52,190 |
| | 29,934 |
| | — |
| | 142,365 |
|
| | | | | | | | | | | | | | | | | | | | | |
| Edward J. Record | | 2013 | | 136,827 |
| | 12,000 |
| | 2,100 |
| | 1,903 |
| | 10,139 |
| | — |
| | — |
| | — |
| | 162,969 |
|
| | | 2012 | | 60,465 |
| | 12,000 |
| | — |
| | 1,337 |
| | 9,901 |
| | — |
| | — |
| | — |
| | 83,703 |
|
| | | 2011 | | 92,698 |
| | 12,000 |
| | 600 |
| | 1,301 |
| | 9,669 |
| | — |
| | — |
| | 240 |
| | 116,508 |
|
| | | | | | | | | | | | | | | | | | | | | |
| Steven P. Lawrence | | 2013 | | 131,852 |
| | 12,000 |
| | — |
| | 1,710 |
| | 6,198 |
| | 1,867 |
| | 1,349 |
| | — |
| | 154,976 |
|
| | | 2012 | | 42,462 |
| | 8,769 |
| | 7,027 |
| | 987 |
| | 3,525 |
| | 34,397 |
| | 19,729 |
| | — |
| | 116,896 |
|
| | | | | | | | | | | | | | | | | | | | | |
| Steven L. Hunter | | 2013 | | 31,411 |
| | 12,000 |
| | 1,770 |
| | 1,456 |
| | 10,273 |
| | — |
| | — |
| | — |
| | 56,910 |
|
| | | 2012 | | 18,031 |
| | 12,000 |
| | 1,625 |
| | 1,396 |
| | 10,004 |
| | — |
| | — |
| | — |
| | 43,056 |
|
| | | 2011 | | 19,975 |
| | 12,000 |
| | 4,585 |
| | 1,361 |
| | 9,669 |
| | — |
| | — |
| | — |
| | 47,590 |
|
| | | | | | | | | | | | | | | | | | | | | |
| Michael M. Searles | | 2013 | | 65,911 |
| | 4,615 |
| | 5,000 |
| | 2,592 |
| | 2,978 |
| | — |
| | — |
| | 443,077 |
| | 524,173 |
|
| | | 2012 | | 46,965 |
| | 12,000 |
| | 5,000 |
| | 6,740 |
| | 7,653 |
| | 10,174 |
| | 7,159 |
| | — |
| | 95,691 |
|
| | | 2011 | | 20,415 |
| | 4,615 |
| | — |
| | 1,296 |
| | 1,455 |
| | 13,015 |
| | 9,467 |
| | — |
| | 50,263 |
|
| |
| (1) | Other Compensation includes cell phone allowances, in the case of Mr. Record, and severance pay, in the case of Mr. Searles. |
| Name | | Fiscal Year | | Deferred Compensation Matching Contributions ($) | | Auto Allowances ($) | | Estate Planning Allowances ($) | | Life Insurance Premiums ($) | | Health Insurance Premiums ($) | | Relocation Expense Reimburse- ments ($) | | Tax Reimburse-ments ($) | | Cell Phone Allowances ($) | | Total ($) |
| | | | | | | | | | | | | | | | | | | | | |
| Andrew T. Hall | | 2011 | | 149,336 | | 12,000 | | 1,395 | | 2,919 | | 9,777 | | - | | - | | 240 | | 175,667 |
| | | 2010 | | 122,233 | | 12,000 | | 2,078 | | 3,105 | | 9,422 | | - | | - | | 1,560 | | 150,398 |
| | | 2009 | | 93,236 | | 12,000 | | 2,003 | | 2,070 | | 8,875 | | - | | - | | 1,560 | | 119,744 |
| | | | | | | | | | | | | | | | | | | | | |
| Oded Shein | | 2011 | | 37,038 | | 12,000 | | - | | 2,446 | | 8,757 | | 52,190 | | 29,934 | | - | | 142,365 |
| | | 2010 | | 22,088 | | 692 | | - | | - | | - | | - | | - | | - | | 22,780 |
| | | | | | | | | | | | | | | | | | | | | |
| Richard A. Maloney | 2011 | | 91,557 | | 12,000 | | 5,165 | | 8,450 | | 7,354 | | 26,445 | | 15,168 | | 240 | | 166,379 |
| | | 2010 | | 76,164 | | 12,000 | | 6,500 | | 8,041 | | 7,168 | | 137,117 | | 32,047 | | 1,560 | | 280,597 |
| | | 2009 | | 52,032 | | 12,000 | | 3,742 | | 7,107 | | 6,755 | | 43,743 | | 29,337 | | 1,560 | | 156,276 |
| | | | | | | | | | | | | | | | | | | | | |
| Edward J. Record | | 2011 | | 92,698 | | 12,000 | | 600 | | 1,301 | | 9,669 | | - | | - | | 240 | | 116,508 |
| | | 2010 | | 77,284 | | 12,000 | | 1,298 | | 1,210 | | 9,422 | | - | | - | | 1,560 | | 102,774 |
| | | 2009 | | 48,244 | | 12,000 | | 1,338 | | 1,041 | | 8,875 | | 69,595 | | 39,917 | | 1,560 | | 182,570 |
| | | | | | | | | | | | | | | | | | | | | |
| Steven L. Hunter | | 2011 | | 19,975 | | 12,000 | | 4,585 | | 1,361 | | 9,669 | | - | | - | | - | | 47,591 |
| | | 2010 | | 12,094 | | 11,769 | | 3,292 | | 1,105 | | 9,065 | | - | | - | | - | | 37,325 |
46
The following table provides information concerning each grant of an award made to a Named Executive Officer in Fiscal 20112013 under any plan. Definitions of Performance Shares and Restricted Stock and SARs as used in the footnotes to this table are found in the CD&A beginning on page 19 32of this Proxy Statement.
| | | | | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) (3) | |
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | All Other Stock Awards: Number of Shares of Stock or Units (#) (3) | | All Other Options Awards: Number of Securities Underlying Options (#) (4) | | Exercise or Base Price of Option Awards ($/Sh) | | Grant Date Fair Value of Stock and Option Awards ($) (5) | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards
(1) | | Estimated Future Payouts Under Equity Incentive Plan Awards
(2) | | | Grant Date
Fair Value
of Stock and
Option
Awards
($) (4) |
| Name | | Grant Date | Threshold ($) | Target ($) | Maximum ($) | | Threshold (#) | Target (#) | Maximum (#) | | | | Grant
Date | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | |
| | | | | | | | | | | | | | | | | |
| Andrew T. Hall | | | 212,500 | 850,000 | 1,700,000 | | - | | - | | - | | - | | - | |
| | | 3/29/2011 | - | - | - | | 5,625 | 22,500 | 45,000 | | - | | - | | - | | 564,525 | |
| | | 3/29/2011 | - | - | - | | - | | - | | 68,500 | | 18.84 | | 595,265 | |
| Michael L. Glazer | | | 396,150 | | 950,000 | | 1,900,000 | | — | | — | | — | | — | | — |
| | | 3/29/2011 | - | - | - | | - | | 36,000 | | - | | - | | 678,240 | | 4/4/2013 | | — | | — | | — | | 9,900 | | 39,600 | | 79,200 | | — | | 1,338,876 |
| | | 4/11/2011 | - | - | - | | - | | 50,000 | | - | | - | | 965,000 | | 4/4/2013 | | — | | — | | — | | — | | — | | — | | 32,400 | | 856,980 |
| | | | | | | | | | | | | | | | | |
| Oded Shein | | | 43,750 | 175,000 | 350,000 | | - | | - | | - | | - | | - | | 76,960 | | 185,000 | | 370,000 | | — | | — | | — | | — | | — |
| | | 3/29/2011 | - | - | - | | 725 | 2,900 | 5,800 | | - | | - | | - | | 72,761 | | 4/4/2013 | | — | | — | | — | | 1,925 | | 7,700 | | 15,400 | | 260,337 |
| | | 3/29/2011 | - | - | - | | - | | 4,700 | | - | | - | | 88,548 | | 4/4/2013 | | — | | — | | — | | — | | — | | — | | 6,300 | | 166,635 |
| | | | | | | | | | | | | | | | | |
| Richard A. Maloney | | | 98,175 | 392,700 | 785,400 | | - | | - | | - | | - | | - | |
| Edward J. Record | | | 181,040 | | 434,000 | | 868,000 | | — | | — | | — | | — | | — |
| | | 3/29/2011 | - | - | - | | 1,813 | 7,250 | 14,500 | | - | | - | | - | | 181,903 | | 4/4/2013 | | — | | — | | — | | 5,500 | | 22,000 | | 44,000 | | — | | 743,820 |
| | | 3/29/2011 | - | - | - | | - | | - | | 22,250 | | 18.84 | | 193,353 | | 4/4/2013 | | — | | — | | — | | — | | — | | — | | 18,000 | | 476,100 |
| | | 3/29/2011 | - | - | - | | - | | 11,700 | | - | | - | | 220,428 | |
| | | 4/11/2011 | - | - | - | | - | | 30,000 | | - | | - | | 579,000 | |
| | | | | | | | | | | | | | | | | |
| Edward J. Record | | | 100,100 | 400,400 | 800,800 | | - | | - | | - | | - | | - | |
| | | 3/29/2011 | - | - | - | | 1,813 | 7,250 | 14,500 | | - | | - | | - | | 181,903 | |
| | | 3/29/2011 | - | - | - | | - | | - | | 22,250 | | 18.84 | | 193,353 | |
| Steven P. Lawrence | | | 181,040 | | 434,000 | | 868,000 | | — | | — | | — | | — | | — |
| | | 3/29/2011 | - | - | - | | - | | 11,700 | | - | | - | | 220,428 | | 4/4/2013 | | — | | — | | — | | 5,500 | | 22,000 | | 44,000 | | — | | 743,820 |
| | | 4/11/2011 | - | - | - | | - | | 30,000 | | - | | - | | 579,000 | | 4/4/2013 | | — | | — | | — | | — | | — | | — | | 18,000 | | 476,100 |
| | | | | | | | | | | | | | | | | |
| Steven L. Hunter | | | 50,000 | 200,000 | 400,000 | | - | | - | | - | | - | | - | | 88,400 | | 212,500 | | 425,000 | | — | | — | | — | | — | | — |
| | | 3/29/2011 | - | - | - | | 725 | 2,900 | 5,800 | | - | | - | | - | | 72,761 | | 4/4/2013 | | — | | — | | — | | 1,925 | | 7,700 | | 15,400 | | — | | 260,337 |
| | | 3/29/2011 | - | - | - | | - | | - | | 8,850 | | 18.84 | | 76,907 | | 4/4/2013 | | — | | — | | — | | — | | — | | — | | 6,300 | | 166,635 |
| | | 3/29/2011 | - | - | - | | - | | 10,008 | | - | | - | | 188,551 | |
| | | 4/11/2011 | - | - | - | | - | | 8,000 | | - | | - | | 154,400 | |
| Michael M. Searles | | | 112,500 | | 270,000 | | 540,000 | | — | | — | | — | | — | | — |
| |
| (1) | Shown are the Threshold, Target and Maximum payouts for which each executive was eligible under our 2011 Senior Executive Incentive2013 Bonus Plan (the “2011 Bonus Plan”).Plan. Amounts actually earned with respect to these awards are included in the 20112013 Summary Compensation Table as Non-Equity Incentive Plan Compensation. Further detail regarding potential 20112013 Bonus Plan awards can be found in “Establishment of 20112013 Senior Executive Incentive Bonus Plan” beginning on page 3135 and “2011“2013 Bonus Plan Awards” on page 3742 of this Proxy Statement. |
(2) These columns reflect Performance Shares that vest over time in an amount depending on performance criteria. The Performance Shares will vest after a three-year Performance Cycle based on the Company’s total shareholder return relative to the Performance Group, as described in the CD&A. As a result of his resignation, Mr. Searles was not granted Performance Shares in Fiscal 2013.
The “Threshold” number of shares refers to the lowest number of shares of our common stock the Named Executive Officer can earn (and receive) at the end of the Performance Cycle if the results are at the twenty-fifth percentile of the Performance Group. Performance results below the twenty-fifth percentile at the end of the performance cycle will result in the executives earning no shares under this equity grant.
The “Target” number of shares refers to the number of shares of our common stock the Named Executive Officer can earn (and receive) at the end of the Performance Cycle if the results are at the fiftieth percentile of the Performance Group.
The “Maximum” number of shares refers to the number of shares of our common stock the Named Executive Officer can earn (and receive) at the end of the Performance Cycle if the results are at the one hundredth percentile of the Performance Group, which is twice the Target number of shares.
(2) | These columns reflect Performance Shares that vest over time in an amount depending on performance criteria. The Performance Shares will vest after a three-year Performance Cycle based on the Company’s total shareholder return relative to the Performance Group, as described in the CD&A. As a result of his resignation, Mr. Maloney forfeited his 2011 Performance Shares. As a result of his resignation, Mr. Hall forfeited his 2011 Performance Shares. |
(3) This column reflects Restricted Stock. Restricted Stock vests ratably over a four-year period (i.e., 25% per year). As a result of his resignation, Mr. Searles was not granted any stock awards in Fiscal 2013.(4) The grant date fair value of the performance-based awards reflected in this column (the “Performance Shares”) is the payout based on the probable outcome of the performance criteria, determined as of the grant date. As a result of his resignation, Mr. Searles was not granted any Performance Shares in Fiscal 2013.
| The “Threshold” number of shares refers to the lowest number of shares of our common stock the Named Executive Officer can earn (and receive) at the end of the Performance Cycle if the results are at the twenty-fifth percentile of the Performance Group. Performance results below the twenty-fifth percentile at the end of the performance cycle will result in the executives earning no shares under this equity grant.
The “Target” number of shares refers to the number of shares of our common stock the Named Executive Officer can earn (and receive) at the end of the Performance Cycle if the results are at the fiftieth percentile of the Performance Group.
|
| The "Maximum" number of shares refers to the number of shares of our common stock the Named Executive Officer can earn (and receive) at the end of the Performance Cycle if the results are at the one hundredth percentile of the Performance Group, which is twice the Target number of shares.
|
(3) | This column reflects Restricted Stock. Restricted stock granted on March 29, 2011 vest ratably over a four-year period (i.e. 25% per year) and Restricted Stock granted on April 11, 2011 vest ratably over a three-year period (i.e. 33 1/3rd % per year). As a result of his resignation, Mr. Maloney forfeited his unvested restricted stock awards as of February 15, 2012. As a result of his resignation, Mr. Hall forfeited his unvested restricted stock awards as of April 12, 2012.
|
(4) | This column reflects SARs. The SARs vest ratably over a four-year period (i.e., 25% per year). As a result of his resignation, Mr. Maloney forfeited his unvested SARs awards as of February 15, 2012. As a result of his resignation, Mr. Hall forfeited his unvested SARs awards as of April 12, 2012. |
(5) | The grant date fair value of the performance-based awards reflected in this column (the “Performance Shares”) is the Target payout based on the probable outcome of the performance criteria, determined as of the grant date. As a result of his resignation, Mr. Maloney forfeited his 2011 Performance Shares. As a result of his resignation, Mr. Hall forfeited his 2011 Performance Shares. |
The following table provides information, on an award by award basis, concerning unexercised options,SARs, unvested restricted stock, that has not vested, and equity incentive planperformance share awards for each Named Executive Officer outstanding as of the end of Fiscal 2011.2013. As a result of his resignation, Mr. MaloneySearles forfeited all awards that had not vested as of June 14, 2013. As a result of his resignation, Mr. Record forfeited all awards that had not vested as of February 15, 2012. As a result of his resignation, Mr. Hall forfeited all awards that had not vested as of April 12, 2012.27, 2014. Market value is computed using the closing market price of our common stock on January 27, 2012,31, 2014, the last trading day prior to the end of our last completed fiscal year ($15.80)19.60).
| | | Options/SARs Awards | | Stock Awards |
| Name | | Number of Securities Underlying Unexercised Options/SARs Exercisable (#) | | Number of Securities Underlying Unexercised Options/SARs Unexercisable (#) (1) | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options /SARs (#) | | Option/ SARs Exercise Price ($/Sh) | | Option/ SARs Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) (2) | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Equity Incentive Plans Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) (3) | | Equity Incentive Plans Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($) |
| | | | | | | | | | | | | | | | | | | |
| Andrew T. Hall | | 150,000 | | - | | - | | 18.74 | | 2/20/2013 | | - | | - | | - | | - |
| | | 50,000 | | - | | - | | 22.96 | | 3/28/2014 | | - | | - | | - | | - |
| | | 64,500 | | 21,500 | | - | | 15.87 | | 3/28/2015 | | - | | - | | - | | - |
| | | 75,000 | | 25,000 | | - | | 7.07 | | 11/3/2015 | | - | | - | | - | | - |
| | | 50,000 | | 50,000 | | - | | 9.77 | | 3/27/2016 | | - | | - | | - | | - |
| | | 25,000 | | 75,000 | | - | | 15.50 | | 3/26/2017 | | - | | - | | - | | - |
| | | - | | 68,500 | | - | | 18.84 | | 3/29/2018 | | | | | | | | |
| | | - | | - | | - | | - | | - | | 86,000 | | 1,358,800 | | 47,500 | | 750,500 |
| | | | | | | | | | | | | | | | | | | |
| Oded Shein | | - | | 30,000 | | - | | 16.31 | | 1/10/2018 | | - | | - | | - | | - |
| | | - | | - | | - | | - | | - | | 14,700 | | 232,260 | | 2,900 | | 45,820 |
| | | | | | | | | | | | | | | | | | | |
| Richard A. Maloney | | 75,000 | | 25,000 | | - | | 11.03 | | 10/6/2015 | | - | | - | | - | | - |
| | | 22,500 | | 22,500 | | - | | 9.77 | | 3/27/2016 | | - | | - | | - | | - |
| | | 25,000 | | 75,000 | | - | | 12.94 | | 2/15/2017 | | - | | - | | - | | - |
| | | - | | 22,250 | | - | | 18.84 | | 3/29/2018 | | - | | - | | - | | - |
| | | - | | - | | - | | - | | - | | 66,700 | | 1,053,860 | | 27,250 | | 430,550 |
| | | | | | | | | | | | | | | | | | | |
| Edward J. Record | | 100,000 | | - | | - | | 19.96 | | 5/14/2014 | | - | | - | | - | | - |
| | | 33,750 | | 11,250 | | - | | 15.87 | | 3/28/2015 | | - | | - | | - | | - |
| | | 22,500 | | 22,500 | | - | | 9.77 | | 3/27/2016 | | - | | - | | - | | - |
| | | 25,000 | | 75,000 | | - | | 12.94 | | 2/15/2017 | | - | | - | | - | | - |
| | | - | | 22,250 | | - | | 18.84 | | 3/29/2018 | | - | | - | | - | | - |
| | | - | | - | | - | | - | | - | | 66,700 | | 1,053,860 | | 27,250 | | 430,550 |
| | | | | | | | | | | | | | | | | | | |
| Steven L. Hunter | | 11,250 | | 3,750 | | - | | 13.26 | | 6/2/2015 | | - | | - | | - | | - |
| | | 7,500 | | 7,500 | | - | | 9.77 | | 3/27/2016 | | - | | - | | - | | - |
| | | 4,500 | | 13,500 | | - | | 15.50 | | 3/26/2017 | | - | | - | | - | | - |
| | | - | | 8,850 | | - | | 18.84 | | 3/29/2018 | | - | | - | | - | | - |
| | | - | | - | | - | | - | | - | | 18,008 | | 284,526 | | 8,900 | | 140,620 |
|
| | | | | | | | | | | | | | | | | | | |
| | Options/ SARs Awards | | Stock Awards |
| Name | Number of Securities Underlying Unexercised Options/SARs Exercisable
(#) | Number of Securities Underlying Unexercised Options/SARs Unexercisable
(#) (1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options /SARs
(#) | Option/ SARs Exercise Price
($/Sh) | Option/ SARs Expiration Date | | Number of Shares or Units of Stock That Have Not Vested
(#) (2) | Market Value of Shares or Units of Stock That Have Not Vested
($) | Equity Incentive Plans Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested
(#) (3) | Equity Incentive Plans Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested
($) |
| Michael L. Glazer | 5,625 |
| — |
| — |
| 16.67 |
| 6/3/2014 |
| | — |
| — |
| — |
| — |
|
| | — |
| — |
| — |
| — |
| — |
| | 102,400 |
| 2,007,040 |
| 112,933 |
| 2,213,487 |
|
| | | | | | | | | | | |
| Oded Shein | 22,500 |
| 7,500 |
| — |
| 16.31 |
| 1/10/2018 |
| | — |
| — |
| — |
| — |
|
| | — |
| — |
| — |
| — |
| — |
| | 14,800 |
| 290,080 |
| 20,600 |
| 403,760 |
|
| | | | | | | | | | | |
| Edward J. Record | 100,000 |
| — |
| — |
| 19.96 |
| 4/28/2014 |
| * | — |
| — |
| — |
| — |
|
| | 45,000 |
| — |
| — |
| 15.87 |
| 4/28/2014 |
| * | — |
| — |
| — |
| — |
|
| | 45,000 |
| — |
| — |
| 9.77 |
| 4/28/2014 |
| * | — |
| — |
| — |
| — |
|
| | 75,000 |
| 25,000 |
| — |
| 12.94 |
| 4/28/2014 |
| * | — |
| — |
| — |
| — |
|
| | 11,125 |
| 11,125 |
| — |
| 18.84 |
| 4/28/2014 |
| * | — |
| — |
| — |
| — |
|
| | — |
| — |
| — |
| — |
| — |
| | 46,600 |
| 913,360 |
| 50,050 |
| 980,980 |
|
| | | | | | | | | | | |
| Steven P. Lawrence | — |
| — |
| — |
| — |
| — |
| | 55,500 |
| 1,087,800 |
| 58,667 |
| 1,149,873 |
|
| | | | | | | | | | | |
| Steven L. Hunter | 15,000 |
| — |
| — |
| 13.26 |
| 6/2/2015 |
| | — |
| — |
| — |
| — |
|
| | 13,500 |
| 4,500 |
| — |
| 15.50 |
| 3/26/2017 |
| | — |
| — |
| — |
| — |
|
| | 4,425 |
| 4,425 |
| — |
| 18.84 |
| 3/29/2018 |
| | — |
| — |
| — |
| — |
|
| | | | | | | | 21,725 |
| 425,810 |
| 18,900 |
| 370,440 |
|
| | | | | | | | | | | |
| Michael M. Searles | — |
| — |
| — |
| — |
| — |
| | — |
| — |
| — |
| — |
|
* As a result of Mr. Record's resignation, the expiration date of his awards was accelerated to April 28, 2014.
(1) The future vesting dates of the SARs, other than those forfeited by Mr. Record on February 27, 2014, are as follows:
(1) |
| All SARs have vested. The future vesting dates of the SARs are as follows: | | | | |
| Name | | Number of SARs (#) | | Vesting Date |
| | | | | |
Andrew T. Hall | | 25,000 | | 3/26/2012 |
| | 25,000 | | 3/27/2012 |
| | 21,500 | | 3/28/2012 |
| | 17,125 | | 3/29/2012 |
| | 25,000 | | 11/3/2012 |
| | 25,000 | | 3/26/2013 |
| | 25,000 | | 3/27/2013 |
| | 17,125 | | 3/29/2013 |
| | 25,000 | | 3/26/2014 |
| | 17,125 | | 3/29/2014 |
| | 17,125 | | 3/29/2015 |
| | | | |
| Oded Shein | | 15,000 | | 1/10/2013 |
| | 7,500 | | 1/10/2014 |
| | 7,500
| | 1/10/2015 |
| | | | | |
Richard A. Maloney | | 25,000 | | 2/15/2012 |
| | 11,250 | | 3/27/2012 |
| | 5,562 | | 3/29/2012 |
| | 25,000 | | 10/6/2012 |
| | 25,000 | | 2/15/2013 |
| | 11,250 | | 3/27/2013 |
| | 5,563 | | 3/29/2013 |
| | 25,000 | | 2/15/2014 |
| | 5,562 | | 3/29/2014 |
| | 5,563 | | 3/29/2015 |
| | | | |
| Edward J. Record | | 25,000 |
| | 2/15/2012 |
| | 11,250 | | 3/27/2012 |
| | 11,250 | | 3/28/2012 |
| | 5,562 | | 3/29/2012 |
| | 25,000 | | 2/15/2013 |
| | 11,250 | | 3/27/2013 |
| | 5,563 | | 3/29/2013 |
| | 25,000 | | 2/15/2014 |
| | 5,562 | | 3/29/2014 |
| | 5,563 | | 3/29/2015 |
| | | | |
Steven L. Hunter | | 4,500 | | 3/26/2012 |
| | 3,750 | | 3/27/2012 |
| | 2,212 | | 3/29/2012 |
| | 3,750 | | 06/2/2012 |
| | 4,500 | | 3/26/2013 |
| | 3,750 | | 3/27/2013 |
| | 2,213 | | 3/29/2013 |
| | 4,500 | | 3/26/2014 |
| | 2,212 | | 3/29/2014 |
| | 2,213 | | 3/29/2015 |
(2) | The future vesting dates of Restricted Stock are as follows: |
Name | | Number of Restricted Stock (#) | | Vesting Date |
| | | | |
Andrew T. Hall | | 9,000 | | 3/29/2012 |
| | 16,667 | | 4/11/2012 |
| | 9,000 | | 3/29/2013 |
| | 16,666 | | 4/11/2013 |
| | 9,000 | | 3/29/2014 |
| | 16,667 | | 4/11/2014 |
| | 9,000 | | 3/29/2015 |
| | | | |
Oded Shein | | 1,175 | | 3/29/2012 |
| | 1,175 | | 3/29/2013 |
| | 10,000 | | 1/10/2014 |
| | 1,175 | | 3/29/2014 |
| | 1,175 | | 3/29/2015 |
| | | | |
Richard A. Maloney | | 2,925 | | 3/29/2012 |
| | 10,000 | | 4/11/2012 |
| | 25,000 | | 2/15/2013 |
| | 2,925 | | 3/29/2013 |
| | 10,000 | | 4/11/2013 |
| | 2,925 | | 3/29/2014 |
| | 10,000 | | 4/11/2014 |
| | 2,925 | | 3/29/2015 |
| | | | |
Edward J. Record | | 2,925 | | 3/29/2012 |
| | 10,000 | | 4/11/2012 |
| | 25,000 | | 2/15/2013 |
| | 2,925 | | 3/29/2013 |
| | 10,000 | | 4/11/2013 |
| | 2,925 | | 3/29/2014 |
| | 10,000 | | 4/11/2014 |
| | 2,925 | | 3/29/2015 |
| | | | |
Steven L. Hunter | | 1,175 | | 3/29/2012 |
| | 2,667 | | 4/11/2012 |
| | 1,175 | | 3/29/2013 |
| | 2,666 | | 4/11/2013 |
| | 1,175 | | 3/29/2014 |
| | 5,308 | | 3/29/2014 |
| | 2,667 | | 4/11/2014 |
| | 1,175 | | 3/29/2015 |
(3) | Reflects Target amount of Performance Shares, which cliff vest after a three-year Performance Cycle based on our total shareholder return relative to the Performance Group, as described in the CD&A. The vesting dates of these Performance Shares are as follows: |
Name | | Number of Performance Shares (#) | | Vesting Date |
| | | | |
Andrew T. Hall | | 25,000 | | 2/2/2013 |
| | 22,500 | | 2/1/2014 |
| | | | |
Oded Shein | | 2,900 | | 2/1/2014 |
| | | | |
Richard A. Maloney | | 20,000 | | 2/2/2013 |
| | 7,250 | | 2/1/2014 |
| | | | |
Edward J. Record | | 20,000 | | 2/2/2013 |
| | 7,250 | | 2/1/2014 |
| | | | | |
| Steven L. Hunter | | 6,0004,500 |
| | 2/2/20133/26/2014 |
| | 2,212 |
| | 3/29/2014 |
| | 2,213 |
| | 3/29/2015 |
(2) The future vesting dates of Restricted Stock, other than those forfeited by Mr. Record on February 27, 2014, are as follows:
|
| | | | | |
| Name | | Number of Restricted Stock (#) | | Vesting Date |
| Michael L. Glazer | | 8,100 |
| | 4/4/2014 |
| | 23,333 |
| | 4/19/2014 |
| | 8,100 |
| | 4/4/2015 |
| | 23,333 |
| | 4/19/2015 |
| | 8,100 |
| | 4/4/2016 |
| | 23,334 |
| | 4/19/2016 |
| | 8,100 |
| | 4/4/2017 |
| | | | | |
| Oded Shein | | 2,050 |
| | 3/28/2014 |
| | 1,175 |
| | 3/29/2014 |
| | 1,575 |
| | 4/4/2014 |
| | 2,050 |
| | 3/28/2015 |
| | 1,175 |
| | 3/29/2015 |
| | 1,575 |
| | 4/4/2015 |
| | 2,050 |
| | 3/28/2016 |
| | 1,575 |
| | 4/4/2016 |
| | 1,575 |
| | 4/5/2017 |
| | | | |
| Steven P. Lawrence | | 4,500 |
| | 4/4/2014 |
| | 12,500 |
| | 4/30/2014 |
| | 4,500 |
| | 4/4/2015 |
| | 12,500 |
| | 4/30/2015 |
| | 4,500 |
| | 4/4/2016 |
| | 12,500 |
| | 4/30/2016 |
| | 4,500 |
| | 4/4/2017 |
| | | | |
| Steven L. Hunter | | 1,700 |
| | 3/28/2014 |
| | 6,483 |
| | 3/29/2014 |
| | 1,575 |
| | 4/4/2014 |
| | 2,667 |
| | 4/11/2014 |
| | 1,700 |
| | 3/28/2015 |
| | 1,175 |
| | 3/29/2015 |
| | 1,575 |
| | 4/4/2015 |
| | 1,700 |
| | 3/28/2016 |
| | 1,575 |
| | 4/4/2016 |
| | 1,575 |
| | 4/4/2017 |
(3) Reflects Target amount of Performance Shares, which cliff vest after a three-year Performance Cycle based on our total shareholder return relative to the Performance Group, as described in the CD&A. Excludes Performance Shares forfeited by Mr. Record on February 27, 2014. The performance cycle measurement dates of these Performance Shares are as follows:
|
| | | | | |
| Name | | Number of Performance Shares (#) | | Performance Cycle Measurement Date |
| Michael L. Glazer | | 73,333 |
| | 1/31/2015 |
| | 39,600 |
| | 1/30/2016 |
| | | | |
| Oded Shein | | 2,900 |
| | 2/1/2014 |
| | 10,000 |
| | 1/31/2015 |
| | 7,700 |
| | 1/30/2016 |
| | | | |
| Edward J. Record | | 7,250 |
| | 2/1/2014 |
| | | | |
| Steven P. Lawrence | | 36,667 |
| | 1/31/2015 |
| | 22,000 |
| | 1/30/2016 |
| | | | |
| Steven L. Hunter | | 2,900 |
| | 2/1/2014 |
| | 8,300 |
| | 1/31/2015 |
| | 7,700 |
| | 1/30/2016 |
The following table provides information concerning each exerciseexercises of stock options, stock appreciation rights and similar instruments, and eachSARs, vesting of stock, including restricted stock restricted stock units and similar instruments,performance share awards earned during Fiscal 20112013 for each of our Named Executive Officers on an aggregated basis.
| | | | | Options/SARs Awards | | Stock Awards | | Options/SARs Awards | | Stock Awards |
| Name | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) (1) | | Number of Shares Acquired on Exercise
(#) | | Value Realized on Exercise
($) | | Number of Shares Acquired on Vesting
(#) (2) | | Value Realized on Vesting
($) (1) |
| | | | | | | | | | |
| Andrew T. Hall | | - | | - | | 59,718 | (2) | 990,571 | |
| | | | | | | | | | |
| Michael L. Glazer | | | 5,625 |
| | 78,891 |
| | 23,333 |
| | 650,874 |
|
| Oded Shein | | - | | - | | - | | - | | — |
| | — |
| | 13,225 |
| | 294,711 |
|
| | | | | | | | | | |
| Richard A. Maloney | | - | | - | | 30,000 | (3) | 439,800 | |
| | | | | | | | | | |
| Edward J. Record | | - | | - | | 17,145 | (4) | 320,954 | | — |
| | — |
| | 69,315 |
| | 1,786,366 |
|
| | | | | | | | | | |
| Steven P. Lawrence | | | — |
| | — |
| | 12,500 |
| | 347,000 |
|
| Steven L. Hunter | | - | | - | | 5,000 | (3) | 86,300 | | 15,000 |
| | 245,163 |
| | 13,683 |
| | 365,093 |
|
| Michael M. Searles | | | — |
| | — |
| | 2,050 |
| | 53,403 |
|
| |
| (1) | Based on the average of the high and low market price of our common stock on the date of issuance. |
| |
| (2) | Reflects shares earned on the 20082010 Performance Shares that were distributed in Fiscal 2013 and Restricted Stock that vested during Fiscal 2011.2013. |
(3) | Reflects Restricted Stock vested during Fiscal 2011. |
(4) | Reflects shares earned on the 2008 Performance Shares. |
52
None of our Named Executive Officers were participants under the defined benefit plan sponsored by the Company as it was closed to new participants and was frozen effective June 30, 1998.
The following table provides Fiscal 20112013 information with respect to each defined contribution or other plan that provides for the deferral of compensation on a basis that is not tax-qualified to a Named Executive Officer.
| | | Name | | Executive Contributions in Last Fiscal Year ($) (1) | | Registrant Contributions in Last Fiscal Year ($) | | Aggregate Earnings in Last Fiscal Year ($) | | Aggregate Withdrawals/ Distributions ($) | | Aggregate Balance at Last FYE ($) | | Executive Contributions in Last Fiscal Year
($) | | Registrant Contributions in Last Fiscal Year
($) (1) | | Aggregate Earnings in Last Fiscal Year
($) | | Aggregate Withdrawals/ Distributions
($) | | Aggregate Balance at Last FYE
($) |
| | | | | | | | | | | | |
| Andrew T. Hall | | 149,336 | | 149,336 | | (3,519) | | - | | 1,252,932 | |
| | | | | | | | | | | | |
| Michael L. Glazer | | | 244,176 |
| | 244,176 |
| | (18,339 | ) | | — |
| | 614,648 |
|
| Oded Shein | | 37,324 | | 37,038 | | (1,086) | | - | | 117,436 | | 79,872 |
| | 69,807 |
| | 45,896 |
| | — |
| | 411,185 |
|
| | | | | | | | | | | | |
| Richard A. Maloney | | 91,557 | | 91,557 | | 13 | | - | | 483,013 | |
| | | | | | | | | | | | |
| Edward J. Record | | 204,469 | | 92,698 | | (17,156) | | - | | 948,104 | | 361,643 |
| | 136,827 |
| | 249,435 |
| | — |
| | 2,074,409 |
|
| | | | | | | | | | | | |
| Steven P. Lawrence | | | 131,852 |
| | 131,852 |
| | 24,805 |
| | — |
| | 378,488 |
|
| Steven L. Hunter | | 19,975 | | 19,975 | | 132 | | - | | 68,623 | | 31,411 |
| | 31,411 |
| | 20,669 |
| | — |
| | 198,613 |
|
| Michael M. Searles | | | 65,911 |
| | 65,911 |
| | 70,584 |
| | 352,203 |
| | — |
|
__________________________
(1) Included in the amount reported in the 2011 Summary2013 All Other Compensation Table.
Retirement Benefits
Deferred Compensation Plan
We provide a deferred compensation plan (the “Deferred Compensation Plan”) that provides executives and certain officers with the opportunity to participate in an unfunded, deferred compensation program that is not qualified under the Internal Revenue Code of 1986, as amended (the “Code”). Generally the Code and the Employee Retirement Income Security Act of 1974, as amended, restrict contributions to a 401(k) plan by highly compensated employees. The Deferred Compensation Plan is intended to allow participants to defer income on a pre-tax basis. Under the Deferred Compensation Plan, participants may defer up to 50% of their base salary and up to 100% of their bonus and earn a rate of return based on actual investments chosen by each participant. We have established a grantor trust for the purpose of holding assets to provide benefits to the participants. We will match 100% of each participant’s contributions, up to 10% of the sum of their base salary and bonus.
The Named Executive Officers have the opportunity to allocate the investment of the funds in their Participant Employee Account among sixteenthirty-six investment options, including a Company Stock Investment Option. In the case of the Company Stock Investment Option, the Deferred Compensation Plan provides the opportunity for increased pre-tax shareholding.
401(k) Savings Plan
We have a contributory 401(k) savings plan (the “401(k) Plan”) covering substantially all qualifying employees. Under the 401(k) Plan, participants may contribute up to 25%50% of their qualifying earnings, subject to certain restrictions. We currently match 50% of each participant’s contributions, up to 6% of each participant’s compensation under the 401(k) Plan. We may make discretionary bi-weekly matching contributions during the year.
Frozen Defined Benefit Plan
We sponsor a defined benefit plan, which covers substantially all employees who had met eligibility requirements and were enrolled prior to June 30, 1998 (the “Stage Plan”). The Stage Plan was frozen effective June 30, 1998. None of our Named Executive Officers are participants in the Stage Plan.
In General
The tables below reflect the amount of compensation to be paid to each of our currently employed Named Executive Officers in the event of termination of that executive’s employment under different circumstances pursuant to the terms of their Employment Agreements. Specific information concerning the resignation of Mr. MaloneySearles is found under “Transactions with Related Persons-Richard Maloney”Persons-Michael Searles” on page 1821 of this Proxy Statement and under “Significant Events Related to the Employment of Our Named Executive Officers-Resignation of Richard Maloney”Michael Searles” on page 3439 of this Proxy Statement. Specific information concerning the resignation of Mr. HallRecord is found under “Transactions with Related Persons-Andrew Hall” on page 18 of this Proxy Statement and under “Significant Events Related to the Employment of Our Named Executive Officers-Resignation of Andrew Hall”Edward Record” on page 3439 of this Proxy Statement.
Generally, under the post-termination arrangements described below, other than pursuant to a termination without Good Cause or by the executive for Good Reason,as defined on page 5763 or pursuant to a Change in Control,as defined on page 57,64, a Named Executive Officer who terminates his employment, or whose employment is terminated, is entitled to receive solely those amounts earned by the Named Executive Officer through the date of termination.
The amount of compensation payable to each currently employed Named Executive Officer upon (i) termination without Good Cause or by the executive for Good Reason, (ii) termination without Good Cause or by the executive for Good Reason after a Change in Control, (iii) termination by the Company for Good Cause or by the executive without Good Reason, (iv) retirement, (v) death or (vi) disability, is shown below. The amounts shown assume that the termination was effective as of January 28, 2012, and thus include amounts earned through that date and are estimates of the amounts that would be paid out to the executives upon their termination. The dollar value of stock-based compensation is calculated using the closing share price of our common stock on Friday, January 27, 2012, the last trading day prior to the end of Fiscal 2011, which was $15.80.February 1, 2014. The actual amounts to be paid out can only be determined at the time of the Named Executive Officer’s separation from the Company.
Payments Made Upon Termination
Depending upon the manner in which a Named Executive Officer’s employment terminates, he may be entitled to receive the following payments and benefits:
any base salary and fringe benefits earned and unpaid through the date of termination;
· | any base salary and fringe benefits earned and unpaid through the date of termination; |
severance pay equal to a multiple of the executive’s base salary plus the executive’s annual bonus target amount;any incentive (performance) bonus for the fiscal year in which the termination occurs pro-rated through the date of termination provided the Board determines, in good faith, that the executive would have been entitled to receive a performance bonus for the fiscal year in which the termination occurred;
· | severance pay equal to a multiple of the executive’s base salary plus the executive’s annual bonus target amount; |
continuation of medical, vision and dental insurance (“Fringe Benefits”) under which the executive is participating for a specified period;payment for outplacement services up to a specified maximum amount;
· | any incentive (performance) bonus for the fiscal year in which the termination occurs pro-rated through the date of termination provided the Board determines, in good faith, that the executive would have been entitled to receive a performance bonus for the fiscal year in which the termination occurred; |
payment for financial/estate planning (“Financial Planning”) up to a specified maximum amount;amounts accrued and vested through the Deferred Compensation Plan; and
· | continuation of medical and dental insurance (“Fringe Benefits”) under which the executive is participating for a specified period; |
· | payment for outplacement services up to a specified maximum amount; |
· | payment for financial/estate planning (“Financial Planning”) up to a specified maximum amount; |
· | amounts accrued and vested through the Deferred Compensation Plan; and |
· | vesting of outstanding Stock Options,vesting of outstanding stock options, SARs, Restricted Stock and Performance Shares. |
The currently employed Named Executive Officers will not receive any compensation for any unused vacation days and upon termination of employment for any reason, any unused vacation days will be forfeited.
Payments Made Upon Termination Without Good Cause or by the Executive For Good Reason
The following table shows the amounts payable to each of our currently employed Named Executive Officers assuming that we terminated him without Good Cause or that he terminated his employment agreement for Good Reason on January 28, 2012.February 1, 2014.
|
| | | | | | | |
| Name | Severance | Incentive
Bonus ($) | Fringe
Benefits
($) (1) | Max Outplacement
($) | Max Financial
Planning ($) | Deferred
Compensation ($) | Stock Options, SARs,
Restricted Stock and
Performance Shares ($) |
| Mr. Glazer | $1.9 million | Amount earned and prorated through date of termination | $30,971 | Provided for up to 1 year with $15,000 maximum | None | (2) | Immediate vesting of all Restricted Shares and pro-rated vesting of Performance Shares. |
| Mr. Shein | $0.6 million | Amount earned and prorated through date of termination | $23,199 | Provided for up to 1 year with $15,000 maximum | None | (2) | All unvested awards are forfeited. |
| Mr. Lawrence | $1.6 million | Amount earned and prorated through date of termination | $28,490 | Provided for up to 1 year with $15,000 maximum | None | (2) | All unvested awards are forfeited. |
| Mr. Hunter | $0.6 million | Amount earned and prorated through date of termination | $23,119 | Provided for up to 1 year with $15,000 maximum | None | (2) | All unvested awards are forfeited. |
| Name | Severance | Incentive Bonus ($) | Fringe Benefits ($) (1) | Max Outplacement ($) | Max Financial Planning ($) | Pension and Deferred Compensation ($) | Stock Options, SARs, Restricted Stock and Performance Shares ($) |
| | | | | | | | |
| Mr. Hall | $3.4 million | Amount earned and prorated through date of termination | $34,404 | Provided for up to 1 year with $15,000 maximum | None | (2) | All unvested awards are forfeited. |
| | | | | | | | |
| Mr. Shein | $0.5 million | Amount earned and prorated through date of termination | $17,458 | Provided for up to 1 year with $15,000 maximum | None | (2) | All unvested awards are forfeited. |
| | | | | | | | |
| Mr. Maloney | $1.4 million | Amount earned and prorated through date of termination | $22,200 | Provided for up to 1 year with $15,000 maximum | None | (2) | All unvested awards are forfeited. |
| | | | | | | | |
| Mr. Record | $1.5 million | Amount earned and prorated through date of termination | $25,666 | Provided for up to 1 year with $15,000 maximum | None | (2) | All unvested awards are forfeited. |
| | | | | | | | |
| Mr. Hunter | $0.6 million | Amount earned and prorated through date of termination | $17,111 | Provided for up to 1 year with $15,000 maximum | None | (2) | All unvested awards are forfeited. |
________________________
| |
| (1) | The amount shown reflects the estimated premiums to be paid by the Company on behalf of the Named Executive Officer for medical, vision and dental insurance. |
| |
| (2) | Please see the 2011 Pension Benefits Table and the 20112013 Nonqualified Deferred Compensation Table for these amounts. |
Payments Made Upon Termination Without Good Cause or by the Executive For Good Reason After a Change In Control
The following table shows the amounts payable to each of our currently employed Named Executive Officers assuming that we terminated him without Good Cause or that he terminated his employment agreement for Good Reason on January 28, 2012 as a result ofFebruary 1, 2014 after a Change In Control.
Payments that a Named Executive Officer would be entitled to receive under a Change in Control are not considered by the Compensation Committee when making annual compensation decisions for the Named Executive Officers and do not factor into decisions made by the Company regarding other compensation elements. Rather, these provisions in the employment agreements are intended to help provide us with continuity of management and continued focus on the business by senior management in the event of a Change In Control.
|
| | | | | | | |
| Name | Severance | Incentive
Bonus ($) | Fringe
Benefits
($) (1) | Max Outplacement
($) | Max Financial
Planning ($) | Deferred
Compensation ($) | Stock Options, SARs,
Restricted Stock and
Performance Shares ($) |
| Mr. Glazer | $5.7 million | Amount earned and prorated through date of termination | $61,943 | Provided for up to 1 year with $15,000 maximum | Provided for up to 3 years with $10,000 annual maximum | (2) | Unvested Stock Options, SARs and Restricted Stock automatically vest; all Performance Shares are vested at target level and are payable to the Executive within 30 days of the effective date of the Change in Control. |
| Mr. Shein | $1.1 million | Amount earned and prorated through date of termination | $46,398 | Provided for up to 1 year with $15,000 maximum | Provided for 2 years with $5,000 annual maximum | (2) | Unvested Stock Options, SARs and Restricted Stock automatically vest; all Performance Shares are vested at target level and are payable to the Executive within 30 days of the effective date of the Change in Control. |
| Mr. Lawrence | $3.2 million | Amount earned and prorated through date of termination | $56,980 | Provided for up to 1 year with $15,000 maximum | Provided for 3 years with $10,000 annual maximum | (2) | Unvested Stock Options, SARs and Restricted Stock automatically vest; all Performance Shares are vested at target level and are payable to the Executive within 30 days of the effective date of the Change in Control. |
| Mr. Hunter | $1.3 million | Amount earned and prorated through date of termination | $46,238 | Provided for up to 1 year with $15,000 maximum | Provided for 2 years with $5,000 annual maximum | (2) | Unvested Stock Options, SARs and Restricted Stock automatically vest; all Performance Shares are vested at target level and are payable to the Executive within 30 days of the effective date of the Change in Control. |
| Name | Severance | Incentive Bonus ($) | Fringe Benefits ($) (1) | Max Outplacement ($) | Max Financial Planning ($) | Pension and Deferred Compensation ($) | Stock Options, SARs, Restricted Stock and Performance Shares ($) |
| | | | | | | | |
| Mr. Hall | $5.1 million | Amount earned and prorated through date of termination | $51,606 | Provided for up to 1 year with $15,000 maximum | Provided for up to 3 years with $10,000 annual maximum | (2) | Unvested Stock Options, SARs and Restricted Stock automatically vest; all Performance Shares are vested at target level and are payable to the Executive within 30 days of the effective date of the Change in Control. |
| | | | | | | | |
| Mr. Shein | $1.1 million | Amount earned and prorated through date of termination | $34,916 | Provided for up to 1 year with $15,000 maximum | Provided for 2 years with $5,000 annual maximum | (2) | Unvested Stock Options, SARs and Restricted Stock automatically vest; all Performance Shares are vested at target level and are payable to the Executive within 30 days of the effective date of the Change in Control. |
| | | | | | | | |
| Mr. Maloney | $2.9 million | Amount earned and prorated through date of termination | $44,400 | Provided for up to 1 year with $15,000 maximum | Provided for 3 years with $7,500 annual maximum | (2) | Unvested Stock Options, SARs and Restricted Stock automatically vest; all Performance Shares are vested at target level and are payable to the Executive within 30 days of the effective date of the Change in Control. |
| | | | | | | | |
| Mr. Record | $2.9 million | Amount earned and prorated through date of termination | $51,332 | Provided for up to 1 year with $15,000 maximum | Provided for 3 years with $7,500 annual maximum | (2) | Unvested Stock Options, SARs and Restricted Stock automatically vest; all Performance Shares are vested at target level and are payable to the Executive within 30 days of the effective date of the Change in Control. |
| | | | | | | | |
| Mr. Hunter | $1.2 million | Amount earned and prorated through date of termination | $34,222 | Provided for up to 1 year with $15,000 maximum | Provided for 2 year with $5,000 annual maximum | (2) | Unvested Stock Options, SARs and Restricted Stock automatically vest; all Performance Shares are vested at target level and are payable to the Executive within 30 days of the effective date of the Change in Control. |
_________________________
| |
| (1) | The amount shown reflects the estimated premiums to be paid by the Company on behalf of the Named Executive Officer for medical, vision and dental insurance. |
| |
| (2) | Please see the 2011 Pension Benefits Table and the 20112013 Nonqualified Deferred Compensation Table for these amounts. |
Payments Made Upon Termination by the Company for Good Cause or by the Executive without Good Reason
The following table shows the amounts payable to each of our currently employed Named Executive Officers assuming that we terminated him for Good Cause or that he terminated his employment without Good Reason on January 28, 2012.February 1, 2014.
|
| | | | | | | |
| Name | Severance | Incentive
Bonus ($)
| Fringe
Benefits
($)
| Max Outplacement
($)
| Max Financial
Planning ($) | Pension and Deferred
Compensation ($) | Stock Options, SARs,
Restricted Stock and
Performance Shares ($) |
| | | | | | | |
Mr. HallGlazer | None | None | None | None | None | (1) | All unvested awards are forfeited. |
| | | | | | | |
| Mr. Shein | None | None | None | None | None | (1) | All unvested awards are forfeited. |
| | | | | | | |
Mr. MaloneyLawrence | None | None | None | None | None | (1) | All unvested awards are forfeited. |
| | | | | | | |
Mr. Record | None | None | None | None | None | (1) | All unvested awards are forfeited. |
| | | | | | | |
| Mr. Hunter | None | None | None | None | None | (1) | All unvested awards are forfeited. |
__________________________
| |
| (1) | Please see the 2011 Pension Benefits Table and the 20112013 Nonqualified Deferred Compensation Table for these amounts. |
Payments Made Upon Retirement
The following table shows the amounts payable to each of our currently employed Named Executive Officers assuming that he retired as of January 28, 2012.February 1, 2014.
|
| | | | | | | |
| Name | Severance | Incentive
Bonus ($)
| Fringe
Benefits
($)
| Max Outplacement
($)
| Max Financial
Planning ($) | Pension and Deferred
Compensation ($) | Stock Options, SARs,
Restricted Stock and
Performance Shares ($) |
| | | | | | | |
Mr. HallGlazer | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
| | | | | | | |
| Mr. Shein | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
| | | | | | | |
Mr. MaloneyLawrence | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
| | | | | | | |
Mr. Record | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
| | | | | | | |
| Mr. Hunter | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
_________________________(1) Please see the 2013 Nonqualified Deferred Compensation Table for these amounts.
(1) | Please see the 2011 Pension Benefits Table and the 2011 Nonqualified Deferred Compensation Table for these amounts. |
58
Payments Made Upon Death
The following table shows the amounts payable to each of our currently employed Named Executive Officers assuming that his employment was terminated as a result of death as of January 28, 2012.February 1, 2014.
|
| | | | | | | |
| Name | Severance | Incentive
Bonus ($)
| Fringe
Benefits
($)
| Max Outplacement
($)
| Max Financial
Planning ($) | Pension and Deferred
Compensation ($) | Stock Options, SARs,
Restricted Stock and
Performance Shares ($) |
| | | | | | | |
Mr. HallGlazer | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
| | | | | | | |
| Mr. Shein | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
| | | | | | | |
Mr. MaloneyLawrence | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
| | | | | | | |
Mr. Record | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
| | | | | | | |
| Mr. Hunter | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
________________________
| |
| (1) | Please see the 2011 Pension Benefits Table and the 20112013 Nonqualified Deferred Compensation Table for these amounts. |
Payments Made Upon Disability
The following table shows the amounts payable to each of our currently employed Named Executive Officers assuming that his employment was terminated as a result of disability as of January 28, 2012.February 1, 2014.
|
| | | | | | | |
| Name | Severance | Incentive
Bonus ($)
| Fringe
Benefits
($)
| Max Outplacement
($)
| Max Financial
Planning ($) | Pension and Deferred Compensation ($) | Stock Options, SARs, Restricted Stock and Performance Shares ($) |
| | | | | | | |
Mr. HallGlazer | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
| | | | | | | |
| Mr. Shein | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
| | | | | | | |
Mr. MaloneyLawrence | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
| | | | | | | |
Mr. Record | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
| | | | | | | |
| Mr. Hunter | None | None | None | None | None | (1) | Unvested Stock Options, SARs and Restricted Stock fully vest and are exercisable within one year from termination date; all Performance Shares are vested at target level and are payable to the Executive. |
_________________________ | |
| (1) | Please see the 2011 Pension Benefits Table and the 20112013 Nonqualified Deferred Compensation Table for these amounts. |
Timing of Payments
Thepaymentsreflected in the foregoing tables will be paid as follows:
Severance payment will be made to the executive in regular payroll payments throughout the severance period;
· | Severance payment will be made to the executive in regular payroll payments throughout the severance period; |
Incentive bonus payments will be made to the executive in a lump sum on or before April 1 following the end of the fiscal year in which the termination occurred;Fringe Benefits will be provided in accordance with our standard policies and practices;
· | Incentive bonus payments will be made to the executive in a lump sum on or before April 1 following the end of the fiscal year in which the termination occurred; |
Outplacement payments will be made directly to the entity providing outplacement services following receipt of an invoice or statement from the entity providing the outplacement services;Financial Planning reimbursements will be made in accordance with our or our successor’s policies and procedures; and
· | Fringe Benefits will be provided in accordance with our standard policies and practices; |
· | Outplacement payments will be made directly to the entity providing outplacement services following receipt of an invoice or statement from the entity providing the outplacement services; |
· | Financial Planning reimbursements will be made in accordance with our or our successor’s policies and procedures; and |
· | Pension and Deferred Compensation payments will be made in accordance with the provisions of the respective plan. |
Termination
Termination
In General. The Employment Agreements of our Named Executive Officers provide (and provided in the case of Messrs. Hall and Maloney) that if the Executive is terminated by us for Good Cause (as defined below), the Executive will be entitled to receive any base salary earned and unpaid, and certain fringe benefits accrued and unpaid, through the date of termination, and the Executive will automatically forfeit any unvested stock options, warrants or similar rights as of the date of termination.
If the Executive is terminated by us without Good Cause or terminates his employment for Good Reason (as defined below), the Executive will be entitled to receive: (i)
| |
| (i) | earned and unpaid Base Salary, and certain fringe benefits accrued and unpaid through the date of termination, (ii) an amount equal to two times in the case of Mr. Hall, one and one-half times in the case of Messrs. Record and Maloney, and one time in the case of Messrs. Shein and Hunter the aggregate of (x) his Base Salary plus (y) the Incentive Compensation at the Target Rate (as defined below) in effect as of the date of termination, (iii) the Incentive Compensation for the fiscal year in which the termination occurs pro-rated through the date of termination; provided, however, the Executive will not receive any portion of the Incentive Compensation unless the Board determines that the Executive would have been entitled to receive any Incentive Compensation for the fiscal year in which the termination occurred as set forth in the Employment Agreement, (iv) continuation of certain fringe benefits accrued and unpaid through the date of termination, |
| |
| (ii) | an amount equal to two times in the case of Mr. Glazer, one and one-half times in the case of Mr. Lawrence, and one times in the case of Messrs. Shein and Hunter, the aggregate of (x) his Base Salary plus (y) the Incentive Compensation at the Target Rate (as defined below) in effect as of the date of termination, |
| |
| (iii) | the Incentive Compensation for the fiscal year in which the termination occurs pro-rated through the date of termination; provided, however, the Executive will not receive any portion of the Incentive Compensation unless the Board determines that the Executive would have been entitled to receive any Incentive Compensation for the fiscal year in which the termination occurred as set forth in the Employment Agreement, |
| |
| (iv) | continuation of medical and dental benefits to which the Executive is participating as of the date of termination for a period of 18 months in the case of Messrs. Glazer and Lawrence and 12 months in the case of Messrs. Shein and Hunter from the date of termination, and |
| |
| (v) | payment of outplacement services for a period of 12 months from the date of termination with payments not to exceed $15,000. |
If the Executive is participating as of the date of terminationterminated by us for a period of 24 months in the case of Mr. Hall, 18 months for Messrs. Record and Maloney and 12 months in the case of Messrs. Shein and Hunter from the date of termination, and (v) payment of outplacement services for a period of 12 months from the date of termination with payments not to exceed $15,000, andGood Cause, the Executive will automatically forfeit any unvested stock options, warrantsRestricted Stock, SARs, or similar rights in the Company as of the date of termination.
If the Executive terminates his employment without Good Reason, the Executive will be entitled to receive any base salary earned and unpaid, and certain fringe benefits accrued and unpaid, through the date of termination, and the Executive will automatically forfeit any unvested stock options, warrantsRestricted Stock, SARs, or similar rights as of the date of termination.
Change in Control. If a Change in Control (as defined below) occurs, and during the period beginning 6 months before and ending 24 months after the Change in Control, we or our successor terminates the Employment Agreement without Good Cause or the Executive terminates his employment with us or our successor with Good Reason, the
Executive will be entitled to receive any base salary earned and unpaid, and certain fringe benefits accrued and unpaid, through the date of the Change in Control or termination, and the following:
| |
| (i) | an amount equal to three times (two times in the case of Messrs. Shein and Hunter) the aggregate of the base salary plus the Incentive Compensation at the Target Rate in effect as of the date of the Change in Control or termination; |
| |
| (ii) | the Incentive Compensation for the fiscal year in which the Change in Control or termination occurs pro-rated through the date of the Change in Control or termination; |
| |
| (iii) | continuation of certain fringe benefits to which the Executive is participating as of the date of Change in Control or termination for a period of 36 months (24 months in the case of Messrs. Shein and Hunter) from the date of the Change in Control or termination; |
| |
| (iv) | payment of outplacement services for a period of 12 months from the date of the Change in Control or termination with payments not to exceed $15,000; and |
| |
| (v) | continuation of the financial planning allowance for a period of 36 months (24 months in the case of Messrs. Shein and Hunter) from the date of the Change in Control or termination, with payments not to exceed $10,000 for any 12 month period in the case of Mr. Hall, $7,500 for any 12 month period in the case of Messrs. Record and Maloney, and $5,000 for any 12 month period in the case of Messrs. Shein and Hunter.termination. |
In addition, all the Executive’s stock options, warrants or similar rights will immediately become fully and completely vested and exercisable as of the date of the Change in Control or termination and we or our successor shall be obligated to compensate the Executive for any options or rights the Executive does not exercise within 60 days of the date of the Change in Control or termination at the price and in the manner described in the Employment Agreement.
No Gross-Up Payments. If any payment to the Executive due to a Change in Control subjects the Executive to any excise tax, we will not pay to the Executive a gross-up payment to compensate the Executive for the amount of the excise tax.
Defined Terms. Definitions forsome of the terms used in this discussion in the order they are first used are as follows:
“Good Cause” means (i) the Executive’s criminal conviction of a felony by a federal or state court of competent jurisdiction including any plea of guilty or no contest; (ii) a material and significant act of dishonesty by the Executive relating to the Company; (iii) a failure to comply with the Company’s “Code of Ethics and Business Conduct” policy; or (iv) the Executive’s failure to follow a direct, reasonable and lawful order from the Company’s Board within the reasonable scope of his position, which failure, if remediable, is not remedied within thirty (30) days after written notice to the Executive.
“Good Reason���Reason” shall exist if, without the Executive’s express written consent, the Company: (i) materially reduces or decreases the Executive’s Base Salary or Incentive Compensation opportunity level from the level in effect on the Effective Date of the Employment Agreement (or some subsequent higher level put into effect by the Board subsequent to the Effective Date of the Employment Agreement), unless such reduction or decrease is in connection with an across-the-board reduction or decrease in the Base Salaries or Incentive Compensation opportunity levels of all the Company’s other senior level executives, (ii) willfully fails to include the Executive in any incentive compensation plans, bonus plans, or other plans and benefits provided by the Company to other executive level executives, (iii) materially reduces, decreases or diminishes the nature, status or duties and responsibilities of the Executive’s position from those in effect on the Effective Date of the Employment Agreement, and such reduction, decrease or diminution is not reasonably related to or the result of an adverse change in the Executive’s performance of assigned duties and responsibilities, (iv) hires an executive senior to the Executive; or (v) requires the Executive to (A) regularly perform the duties and responsibilities of his position at, or (B) relocate the Executive’s principal place of employment to, a location which is more than fifty (50) miles from the location of the Executive’s principal place of employment as of the Effective Date of the Employment Agreement. Notwithstanding the above, Good Reason shall not include the death, disability or voluntary retirement of the Executive or any other voluntary action taken by or agreed to by the Executive related to his position or his employment with the Company or its Subsidiaries.
“Change in Control” shall be deemed to have occurred:
(a) on such date within the 12-month period following the date that any one person, or more than one person acting as a group (as defined in §1.409A 3(i)(5)(v)(B) of the Treasury Regulations), acquires ownership of stock that represents twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding securities (the “Trigger Date”), that a majority of the individuals who, as of the Trigger Date, constitute the Board (the “Incumbent Board”) are replaced by new members whose appointment or election is not endorsed by a majority of the members of the Incumbent Board before the date of such appointment or election;
(b) as of the date that any one person, or more than one person acting as a group (as defined in §1.409A-3(i)(5)(v)(B) of the Treasury Regulations), acquires ownership of stock that, together with stock held by such person or group, constitutes more than 50% of either (1) the then outstanding shares of common stock of the Company or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; provided, however, if any one person or more than one person acting as a group, is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons shall not be considered to cause a Change in Control; or
(c) the date any one person, or more than one person acting as a group (as defined in §1.409A-3(i)(5)(v)(B) of the Treasury Regulations), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) all, or substantially all, of the assets of the Company, except for any sale, lease exchange or transfer resulting from any action taken by any creditor of the Company in enforcing its rights or remedies against any assets of the Company in which such creditor holds a security interest. Provided further, a transfer of assets by the Company shall not be treated as a Change in Control if the assets are transferred to:
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| (i) | A shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock; |
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| (ii) | An entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company; |
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| (iii) | A person, or more than one person acting as a group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or |
(iv) An entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (iii) herein.
| (iv) | An entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (iii) herein. |
For purposes of subsection (c) and except as otherwise provided in paragraph (i), a person’s statusisstatus is determined immediately after the transfer of the assets.
“Incentive Compensation” means compensation based upon the Company’s operating results for and the Executive’s performance during such fiscal year and such other performance objectives, targets and criteria for the Executive that the Board may establish and adjust for that fiscal year.
“Target Rate” means the amount of Incentive Compensation calculated as a percentage of the Base Salary in effect during that fiscal year, which percentage shall be determined and may be adjusted by the Board based on the Company’s operating results, the Executive’s performance and other performance objectives.
The following table provides information concerning the compensation of all persons who served as our Independent Directors during any part of Fiscal 20112013 for their service as Directors during Fiscal 2011.2013.
| | | Name | | Fees Earned or Paid in Cash ($) (1) | | Stock Awards ($) (2) | | Option Awards ($) (3) | | Non-Equity Incentive Plan Compensation ($) | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (4) | | All Other Compensation ($) | | Total ($) | | Fees Earned or Paid in Cash
($) (1) | | Stock
Awards
($) (2) | | Option
Awards
($) (3) | | Non-Equity
Incentive Plan Compensation
($) | | Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) (4) | | All Other
Compensation
($) | | Total
($) |
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| Alan J. Barocas | | 59,000 | | 102,562 | | - | | - | | - | | - | | 161,562 | | 69,000 | | 100,001 | | — | | — | | — | | — | | 169,001 |
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| Michael L. Glazer | | 65,000 | | 102,562 | | - | | - | | - | | - | | 167,562 | |
| | | | | | | | | | | | | | | | |
| Gabrielle E. Greene | | 57,000 | | 102,562 | | - | | - | | - | | - | | 159,562 | | 61,500 | | 100,001 | | — | | — | | — | | — | | 161,501 |
| | | | | | | | | | | | | | | | |
| Diane M. Ellis | | | 63,500 | | 100,001 | | — | | — | | — | | — | | 163,501 |
| Earl J. Hesterberg | | 60,417 | | 102,562 | | - | | - | | - | | - | | 162,979 | | 73,500 | | 100,001 | | — | | — | | — | | — | | 173,501 |
| | | | | | | | | | | | | | | | |
| Lisa R. Kranc | | | 58,500 | | 100,001 | | — | | — | | — | | — | | 158,501 |
| William J. Montgoris | | 153,000 | | 102,562 | | - | | - | | - | | - | | 255,562 | | 184,500 | | 100,001 | | — | | — | | — | | — | | 284,501 |
| | | | | | | | | | | | | | | | |
| C. Clayton Reasor | | | 57,500 | | 100,001 | | — | | — | | — | | — | | 157,501 |
| David Y. Schwartz | | 73,000 | | 102,562 | | - | | - | | (7,642) | | - | | 167,920 | | 81,000 | | 100,001 | | — | | — | | (26,994) | | — | | 154,007 |
| | | | | | | | | | | | | | | | |
| Cheryl Nido Turpin (5) | 24,416 | | - | | - | | - | | - | | - | | 24,416 | |
| Ralph P. Scozzafava | | | 64,500 | | 100,001 | | — | | — | | — | | — | | 164,501 |
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| (1) | The amounts shown in this column reflect the amount of cash compensation earned forin Fiscal 20112013 for Board and committee service. Directors may elect to receive the Annual Retainer, the Chairman Retainer, Special Board Meeting Fees, Committee Meeting Fees, Committee Chairman Fees and such other compensation as the Board may deem appropriate, as the case may be, either (a) in restricted stock, deferred stock units (“DSU”("DSU"), cash, or a combination of restricted stock, deferred stock units and cash at the time that such compensation is earned, or (b) in cash or restricted stock at a later date. Please see “Compensation"Compensation of Directors”Directors" below. |
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| (2) | The amounts shown in thisthe column reflect the dollar amounts of the aggregate grant date fair value of stock awards granted in 2011 for2013 to the named Directors valued in accordance with SEC rules.Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation ("ASC Topic 718") and is equal to the closing market price of 4,417 shares on the date of grant. |
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| (3) | No stock options were awarded to Directors in 2011.2013. |
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| (4) | The amounts shown reflect deferred compensation as well as the increase (decrease) in value related to the DSUs from dividends and changes in market price of our common stock. |
(5) | Ms. Nido Turpin did not stand for reelection and retired from the Board after the 2011 Annual Meeting held on June 9, 2011. |
Compensation of Directors
The compensation of our Independent Directors is set by the Board at the recommendation of the Corporate Governance and Nominating Committee (the “CGNC”). In developing its recommendations, the CGNC is guided by the following objectives: compensation should fairly pay Independent Directors for work required in a company our size and compensation should align the Independent Directors’ interests withand the long-term interest of our shareholders. Hay GroupThe CGNC’s Director compensation consultant prepares competitive compensation analyses regarding both the Peer Group and the broader market for similarly situated companies and advises the CGNC on the level and design of compensation programs for the Independent Directors. The Chairman of the CGNC works directly with Hay Groupthe CGNC’s Director compensation consultant to determine the scope of the work needed to assist the CGNC in its decision making processes.
Directors who are our full-time employees receive no additional compensation for serving on the Board. Directors who are not our full-time employees receive the following compensation:
Annual Retainer. In Fiscal 2013, Directors receivereceived a $50,000 Annual Retainer, which iswas earned and paid pro rata over their term at the beginning of each month. The Annual Retainer is intended to compensate the Director for attendance at regularly scheduled quarterly Board meetings, as well as consultation and participation in teleconference meetings held for periodic Board updates.
Chairman Retainer. In Fiscal 2013 and in addition to the Annual Retainer, the Chairman of the Board receivesreceived a $100,000$125,000 retainer (the “Chairman Retainer”), which iswas earned and paid pro rata over his or her term at the beginning of each month. The Chairman Retainer is intended to compensate the Chairman for the additional duties set forth in the Governance Guidelines.
Special Board Meeting Fee. In Fiscal 2013, Directors receivereceived a Special Board Meeting Fee of $1,500 per meeting for their preparation and attendance at special meetings of the Board (may be by teleconference) called for the purpose of specific actions by the Board (consents, resolutions, etc.) and held at times other than in conjunction with regular quarterly meetings of the Board. No additional meeting fee is to bewas paid for attendance at regular quarterly board meetings.
Committee Meeting Fees. In Fiscal 2013, Directors receivereceived (i) a Regular Committee Meeting Fee of $1,000 per meeting for their preparation and attendance at regular quarterly meetings of the Committees on which they serve, and (ii) a Special Committee Meeting Fee of $1,000 per meeting for (a) their preparation and attendance at Committee meetings (may be by teleconference) called for the purpose of specific actions by their Committees (consents, resolutions, etc.) and held at times other than in conjunction with regular quarterly meetings of their Committees, and (b) their preparation and attendance at “ad hoc” Board Committee assignments held at times other than in conjunction with regular quarterly meetings of their Committees or the Board.
Committee Chairman Fees. The In Fiscal 2013, the Chairman of the Audit Committee receivesreceived a Committee Chairman Fee of $17,500 per year; the Chairman of the Compensation Committee receivesreceived a Committee Chairman Fee of $15,000 per year; and the Chairman of the Corporate Governance and Nominating Committees receivesreceived a Committee Chairman Fee of $12,500 per year. The Committee Chairman Fee iswas earned and paid pro rata over the Chairman’s term at the beginning of each month.
Stock Options and Restricted Stock Grants.Grants
Initial Grant. Upon a Director’s initial appointment or election, the Director will be granted restricted shares of the Company’s common stock valued at $100,000 based on the closing price of the Company’s stock on the date of his or her appointment or election, but pro-rated for the number of months the Director will serve until the next Annual Meeting of Shareholders (the “Initial Grant”). For example, a Director initially appointed or elected three months after the last Annual Meeting would serve a term of nine months and would be entitled to restricted shares of the Company’s common stock valued at $75,000 based on the closing price of the Company’s stock on the date of his or her appointment or election, while a Director initially appointed or elected nine months after the last Annual Meeting would serve a term of three months and would be entitled to restricted shares of the Company’s common stock valued at $25,000 based on the closing price of the Company’s stock on the date of his or her appointment or election.
· | Initial Grant. Upon a Director’s initial election to the Board, the Director will be granted, at the Director’s election, either (i) stock options to purchase our common stock, or (ii) restricted shares of our common stock, in either case valued at $50,000 based on a Net Present Value (the “Initial Grant”). The exercise price and the share price used in granting stock options and the share price used in granting restricted shares shall be equal to the closing price of our common stock on the date the Director is elected to the Board. The Initial Grant will vest 25% perThe Initial Grant will vest, on a cliff basis, on the earliest of (i) one year over four years from the date of grant and if stock options are granted, they will expire if not exercised within seven years from the date of grant or (ii) the date of the first Annual Meeting of the Company’s shareholders following the date of grant.
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Reelection Grant. Upon a Director’s reelection to the Board, the Director will be granted restricted shares of the Company’s common stock valued at $100,000 based on the closing price of the Company’s stock on the date of his or her reelection (the “Reelection Grant”). The Reelection Grant will vest, on a cliff basis, on the earliest of (i) one year from the date of grant or (ii) the date of the first Annual Meeting of the Company’s shareholders following the date of grant.
· | Reelection Grant. Upon a Director’s reelection to the Board, the Director will be granted restricted shares of our common stock valued at $100,000 based on a Net Present Value (the “Reelection Grant”). The share price used in granting the restricted shares shall be equal to the closing price of our common stock on the date the Director is reelected to the Board. The Reelection Grant will vest, on a cliff basis, one year from the date of grant.Forfeiture of Grants. A Director will forfeit any unvested Initial Grant and Reelection Grants if the Director ceases to be a Director at any time prior to their vesting date other than due to (i) the fact that the Director’s age prohibits the Director from serving as a Director, (ii) death, (iii) permanent disability (as determined by the Board), or (iv) a Change in Control (as defined in the applicable equity incentive plan), at which time the unvested Initial Grant and Reelection Grants will fully vest. |
· | Forfeiture of Grants. A Director will forfeit any unvested Initial Grant and Reelection Grants if the Director ceases to be a Director at any time prior to their vesting date other than due to (i) the fact that the Director’s age prohibits the Director from serving as a Director, (ii) death, or (iii) disability (as determined by the Board), at which time the unvested Initial Grant and Reelection Grants will fully vest.
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Reimbursement of Expenses. Directors shall be reimbursed for actual expenses they incur while attending, or otherwise participating in, Board meetings, Board Committee meetings and “ad hoc” committee assignments.
Election Concerning Receipt of Certain Compensation. Under our Amended and Restated 2003 Non-Employee Director Equity Compensation Plan (the “Plan”), a Director may elect to receive the Annual Retainer, the Chairman Retainer, Special Board Meeting Fees, Committee Meeting Fees, Committee Chairman Fees, and such other compensation as the Board may deem appropriate, as the case may be, either (i)(a) in restricted stock, deferred
stock units, cash, or a combination of restricted stock, deferred stock units and cash at the time that such compensation is earned, or (ii)(b) in cash or restricted stock at a later date. Any issuance of restricted stock in lieu of cash will be made by usthe Company on such terms and conditions as the Board may establish. In any event, in order to receive restricted stock, a Director must, at a minimum, (i)(a) notify usthe Company of his or her current election to receive restricted stock by executing an applicable Election Form, and (ii)(b) execute a Shareholder Agreement by which the Director agrees not to sell any of the restricted stock until the Directordirector leaves the Board.
Health Benefits. We have made arrangements with our medical provider to offer medical and dental coverage to the Directors and their eligible family members. The cost to the Directors will be the same premiums our active employees pay through their payroll deductions.
Stock Ownership by Directors
Our Board believes that Directors should be shareholders and have a financial stake in the Company in an amount that a Director deems appropriate. Each Director must develop and maintain a stock position in the Company with an original investment of at least four times the Annual Retainer, which is currently $50,000 for Independent Directors (the “Original Investment”), within three years of the date of the Director’s initial election to the Board. In determining whether the Director has achieved the Original Investment, the Director can include (i) a Director’s tax basis in any stock acquired by the Director in open market purchases, (ii) a Director’s tax basis in any stock acquired by the Director through the exercise of Stock Options or the vesting of Restricted Stock and (iii) the amount of any Director fees which the Director has designated to be used for the acquisition of Restricted Stock or Deferred Stock Units under our 2003 Amended and Restated Non-Employee Director Equity Compensation Plan. As of April 12, 2012, all of our Directors had met or exceeded the Original Investment requirement, with the exception of (i) Mr. Hesterberg, who was appointed to the Board on July 1, 2010 and has until July 1, 2013 to meet the Original Investment requirement, (ii) Ms. Greene, who was appointed to the Board on September 21, 2010 and has until September 21, 2013 to meet the Original Investment requirement and (iii) Mr. Scozzafava, who was appointed to the Board on February 21, 2012 and has until February 21, 2015 to meet the Original Investment requirement.
For additional information concerning the stock ownership of our Directors as of April 12, 2012, please see the table in “Security Ownership of Certain Beneficial Owners and Management-Security Ownership of Management” on page 16 of this Proxy Statement,
Section 14A of the Securities Exchange Act of 1934 provides that not less frequently than once every 3 years we must provide our shareholders with the opportunity to vote to approve, on a nonbinding, advisory basis, the compensation of our Named Executive Officers as disclosed in our Proxy Statement in accordance with the compensation disclosure rules of the SEC. This vote is often referred to as a “Say-on-Pay” vote.
Section 14A of the Securities Exchange Act of 1934 also provides that not less frequently than once every 6 years we must provide our shareholders with the opportunity to vote, on a nonbinding, advisory basis, for their preference as to how frequently (1, 2 or 3 years) we should seek future advisory votes on the compensation of our Named Executive Officers. This vote is often referred to as a “Frequency of Say-on-Pay” vote.
At the 2011 Annual Meeting of Shareholders, a majority of the votes cast by the shareholders voted, on an advisory basis, to hold an advisory vote to approve executive compensation every year. In line with this recommendation by the shareholders, the Board decided that it will include an advisory shareholder vote on executive compensation in its proxy materials every year until the next required advisory vote on the frequency of shareholder votes on executive compensation, which will occur no later than our 2017 Annual Meeting of Shareholders. Therefore, we are asking our shareholders to approve an advisory resolution on the Company’s executive compensation as reported in this Proxy Statement.
As described above in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Compensation Committee has structured our executive compensation program to achieve the following key objectives:
to enable us to recruit, motivate and retain the executive talent required to successfully manage and grow our business and to achieve our short and long-term business objectives;
· | to enable us to recruit, motivateto maximize the long-term commitment of our executive officers to our success by providing compensation elements that align their interests and our shareholders in that the compensation elements are directly related to financial metrics that the Committee believes influence the creation of long-term shareholder value; and retain the executive talent required to successfully manage and grow our business and to achieve our short and long-term business objectives; |
· | to maximize the long-term commitment of our executive officers to our success by providing compensation elements that align their interests and our shareholders in that the compensation elements are directly related to our stock performance and other financial metrics that the Committee believes influence the creation of long-term shareholder value; and |
· | to reward our executive officers upon the achievement of short-term and long-term business objectives and enhanced shareholder value. |
We urge our shareholders to read the “Compensation Discussion and Analysis” beginning on page 1923 of this Proxy Statement, which describes in greater detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narratives, appearing on pages 4045 through 58,67, which provide detailed information on the compensation of our Named Executive Officers. The Compensation Committee and the Board believe that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our Named Executive Officers reported in this Proxy Statement has contributed to the Company’s recent and long-term success.
Most Recent Say-On-Pay Vote
At the 20112013 Annual Meeting of Shareholders, approximately 97%99% of the votes cast by theour shareholders voted, on an advisory basis, to approve the compensation paid to the Company’s Named Executive Officers in Fiscal 20102012 as disclosed in the 20112013 Proxy Statement pursuant to Item 402 of SEC Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion (the “2011“2013 Say-on-Pay Vote”). The Committee and the Board believe that the 20112013 Say-on-Pay Vote confirmed shareholder support for the Company’s executive officer compensation policies and decisions. As a result our approach to Fiscal 20112013 policies and decisionsdecision making approach remained consistent with our 2010Fiscal 2012 approach.
Fiscal 20112013 Overview
Strategy.The Company’s strategy for Fiscal 20112013 was to build on its Fiscal 20102012 achievements and to pursue meaningful sales and earnings growth. Fiscal 2013 contained 52 weeks, while the Company’s fiscal year ended February 2, 2013 (“Fiscal 2012”) contained 53 weeks. The Company achieved the following results in Fiscal 2013:
Financial Results
Total sales were $1.634 billion versus $1.646 billion for Fiscal 2012, a decrease of approximately 1%, but still the fiscal year increased 2.8% to $1,512 million andsecond highest total sales in the Company’s history.
Comparable store sales decreased 1.5%, while on a shifted basis which excludes the first week of 2012, comparable store sales decreased 1.1%.
Gross profit margin was 26.4% versus 27.9% in Fiscal 2012.
Selling general and administrative expense was 24.4% of revenue versus 23.9% on Fiscal 2012.
Earnings were $16.6 million, or $0.51 per diluted share, compared to earnings of $38.2 million, or $1.19 per diluted share, for Fiscal 2012. Adjusting for charges related to the South Hill Consolidation, asset impairment charges related to the Steele's off price division and the Steele's results of operations, adjusted earnings were $40.0 million, or $1.22 per share as compared to adjusted earnings in Fiscal 2012 of $46.3 million, or $1.44 per share.
Direct-To-Consumer sales (eCommerce) increased 0.5%. SG&A expenses achievedby $7.0 million to $30.0 million, an increase of 31% over Fiscal 2012.
For the one-year period ended February 1, 2014, the Company had a 50 basis point improvement intotal shareholder return (“TSR”) of (11.72%), including the rate, while operating net 27 additional stores. reinvestment of dividends. However, over the three-year period ended February 1, 2014, annualized TSR was 34.06%, including the reinvestment of dividends.
The Company also managed inventory levels and ended the year with comparable store inventories up 1.7%. The Company’s strong balance sheet and cash flow allowed the Company to increaseincreased its quarterly dividend rate by 20% and spend $110 million to repurchase 6.8 million shares of its common stock.25%.
Operational Results
Operationally, the Company continued to make progress on a number of its strategic initiatives during 2011. The Company opened 28 new Goody’straditional stores rebranded 148 non-Goody’sand one Steele’s stores withduring Fiscal 2013 and had a net increase of 19 stores, growing from 864 stores in 40 states to 883 stores in 40 states.
The South Hill Consolidation was completed in June 2013, resulting in ongoing annual total savings of $5 million in payroll and benefits, not including savings in margin from increased purchasing power and simplified processes.
The tough retail environment also heightened the Goody’s name and endedneed to reduce the year with 243 Goody’s stores. Company’s cost structure by an additional $5 million. Therefore, approximately 50 positions were eliminated in November.
The Company added 10 Estee Lauder and 10 Clinique counters throughout the year, which helped drive a comparable store sales increase of 9% in cosmetics. During the year, the Company moved forward on the development of an off-price concept, with the goal to leverage its small market expertise with a complementary format to its department store model. Steele’s, its off-price concept, was launched November 1, 2011 with the opening of three stores. several high profile brands across merchandise categories.
The Company also expandedincreased its eCommerce business in 2011 as the number of offerings on the eCommerce website has grown from less than 1,000 products at the beginning of the year to approximately 13,200 products at January 28, 2012. Total eCommerce sales reached $8.6 million for 2011. The Company also completed the roll-out of its markdown optimization tool. The Company operated throughout the year as a financially sound company.
private label credit card penetration rate by 290 basis points.
Non-Binding Nature of Vote
This shareholder vote on executive compensation is advisory and non-binding on the Board or the Company in any way. Although non-binding, the Compensation Committee and the Board will consider the results
of the most recent shareholder advisory vote on executive compensation in determining compensation policies and decisions concerning Named Executive Officers.
Required Vote; Broker Discretionary Voting Not Permitted
The affirmative vote of a majority of the shares presented or represented and entitled to vote either in person or by proxy is required to approve this advisory resolution. Broker discretionary voting of uninstructed shares is not permitted for a shareholder vote on executive compensation.
Approval of Compensation Paid to the Company’s Named Executive Officers
As required by Section 14A of the Exchange Act, we are asking shareholders to vote on the following advisory resolution at the Annual Meeting:
RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed in this Proxy Statement pursuant to Item 402 of SEC Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.
Recommendation of the Board
Your Board of Directors recommends a vote “FOR” the advisory resolution.
At the 2008 Annual Meeting, our shareholders approved the material terms of performance goals to be used by the Compensation Committee for awarding certain compensation to executives from the date of that meeting until the date of the 2013 Annual Meeting. In this proposal, the Board is requesting that shareholders again approve the material terms of the performance goals to enable the Company to continue to have a shareholder-approved arrangement under which certain compensation awarded to executives until the date of the 2017 Annual Meeting may qualify as performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended.
Section 162(m) imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the company’s Chief Executive Officer or any of the company’s three other most highly compensated executive officers (other than the Chief Financial Officer) who are employed as of the end of the year. This limitation does not apply to compensation that meets the requirements under Section 162(m) for “qualifying performance-based” compensation (i.e., compensation paid only if the individual’s performance meets pre-established objective goals based on performance criteria approved by shareholders). One of the requirements for compensation to qualify as performance-based under Section 162(m) is that the material terms of the performance goals for such compensation be disclosed to and approved by shareholders every five years. In accordance with Section 162(m), the material terms that the shareholders approve constitute the framework for the Compensation Committee (the “Committee”) to establish programs and awards under which compensation provided by the Company can qualify as performance-based compensation for purposes of Section 162(m); however, there can be no guarantee that amounts payable under these programs and awards will be treated as qualified performance-based compensation under Section 162(m).
The performance goals pertain to two specified forms of compensation that may be awarded to the executive officers of the Company during the next five years: (i) annual bonuses under the Company’s Senior Executive Incentive Bonus Plan (the “Bonus Plan”), and (ii) stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares or units, or other stock based awards granted under the Company’s Amended and Restated 2001 Equity Incentive Plan (the “2001 Plan”) and the Company’s Second Amended and Restated 2008 Equity Incentive Plan (the “2008 Plan”).
Material Terms of the Executive Officer Performance Goals
In General. For purposes of Section 162(m), the material terms of the performance goals include: (i) the group of employees whose compensation would be subject to the performance goals, (ii) the business criteria on which each of the performance goals is based; and (iii) the maximum amounts payable to any executive officer under each performance goal. Each of these aspects is discussed below and shareholder approval of this proposal constitutes approval of each of these aspects for purposes of the Section 162(m) shareholder approval requirements.
Employees Eligible to Receive Compensation. The group of employees whose compensation would be subject to the performance goals would include the Company’s executive officers, as defined in SEC rules. Currently the Company has seven executive officers. These executive officers are listed annually in the Company’s Form 10-K filed with the SEC. Although Section 162(m) only limits deductibility for compensation paid to the Chief Executive Officer or any of the Company’s three other most highly compensated executive officers (other than the Chief Financial Officer) who are employed as of the end of the year, we may apply the performance goals to all executive officers in the event that any of them becomes a covered employee under Section 162(m) during the time that they hold an award described in this proposal.
Business Criteria on Which Each of the Performance Goals is Based
Annual Incentive (Bonus) Compensation. The business criteria upon which the performance goals for annual incentive (bonus) compensation under the Bonus Plan are currently based are Company Pre-Tax Earnings Relative to Target and Comparable Store Sales Relative to Performance Group. However, with respect to future Bonus Plans, the Committee has the right to base performance goals on (a) those business criteria, (b) the following business criteria: (i) Earnings Per Share, (ii) earnings before interest, taxes, depreciation and amortization (EBITDA), (iii) earnings before interest and taxes (EBIT), or (iv) Pre-Tax Income, (c) other appropriate business goals and criteria on an executive officer by executive officer basis or otherwise, or (d) a combination thereof.
Long-Term Incentive Compensation. The business criteria upon which the performance goals for long-term performance (“LTI”) awards (stock options, stock appreciation rights, restricted stock, performance shares, or other stock based awards) under the 2001 Plan and the 2008 Plan are currently based on the total shareholder return of the Company as compared with the total shareholder return of a designated group of department store and apparel industry peers. The Committee will target an amount that brings the executive officers to approximately the 50th percentile of the market for total compensation (base salary and bonus and long-term incentives). Company performance better than the target will result in higher compensation levels. The Committee believes that long-term incentives should make up a significant portion of an executive officer’s total compensation.
While the business criteria upon which the performance goals for LTI are currently based is the total shareholder return of the Company as compared with the total shareholder return of a designated group of department store and apparel store industry peers, the Committee has the right to base LTI performance goals on (a) those business criteria, (b) the following business criteria: (i) Earnings Per Share, (ii) earnings before interest, taxes, depreciation and amortization (EBITDA), (iii) earnings before interest and taxes (EBIT), (iv) Pre-Tax Earnings, or (v) Pre-Tax Income, (c) other appropriate business goals, objectives and criteria on an executive officer by executive officer basis or otherwise, or (d) a combination thereof.
All of the business criteria described above, whether related to annual incentive (bonus) compensation or to LTI compensation, would be subject to adjustments by the Committee to remove or add the effect of unusual events.
Maximum Amounts Payable to Any Executive Officer Under Performance Goals. The aggregate maximum amount payable to any executive officer under the Bonus Plan during any one calendar year is $5,000,000. No executive officer may be granted awards under the 2001 Plan or the 2008 Plan that comprise more than 500,000 shares, restricted stock units and performance units in any calendar year.
The Committee has established business criteria and maximum amounts that it considers to be appropriate in light of foreseeable contingencies and future business conditions. If approved by the shareholders, this proposal would not limit the Company’s right to award or pay other forms of compensation (including, but not limited to, salary or other stock-based awards under the 2001 Plan and the 2008 Plan) to the Company’s executive officers, regardless of whether or not the performance goals for annual bonuses and LTI performance awards are achieved in any future year, and whether or not payment of such other forms of compensation would be tax deductible.
Background: Terms of Awards and Plans
The following sections describe both the general terms of the awards that will be subject to the performance goals and the material features of the plans under which the awards will be granted.
Annual Bonuses and Material Features of the Bonus Plan
Annual bonuses for executive officers and other key employees of the Company are determined and paid under a Bonus Plan established each year. The Bonus Plan is administered by the Committee. The Committee selects employees eligible to participate in the Bonus Plan.
In March of each year, the Committee evaluates the Company’s annual strategic plan to determine the business criteria that are appropriate to measure achievement of the Company’s objectives and to motivate our executives. Based on discussions with our Chief Executive Officer and our Executive Vice President, Human Resources, the Committee approves the business criteria to be included in the Bonus Plan for that year. In the case of Pre-Tax Earnings and Comparable Store Sales criteria or parameters, for example, an incentive matrix establishes threshold (minimum), target and maximum performance levels for each business criteria based on the level of perceived difficulty in achieving our financial plan. The incentive matrix clearly outlines a minimum level of performance below which no bonus will be paid and the relationship between the business criteria that will generate payouts at or between the minimum and maximum performance levels. In the case of an “Individual Objectives criteria or parameter, the bonus formula is weighted to determine a specified percentage of the year-end bonus amount earned and the measurement is based on four to six specific objectives related to the executive’s area of responsibility which supports the Company’s Financial Plan for that fiscal year.
Annual incentive compensation targets for each executive officer under the Bonus Plan are expressed as a percentage of each executive officer’s base salary with the target percentage increasing with job scope and complexity. Normal performance bonus amounts paid could range from 0% up to 200% of Base Salary based upon actual results, subject to certain adjustments specified by the Committee in writing, and will also be subject to the maximum annual limit indicated above.
The Committee can exercise discretion to reduce the amount of any awards under the Bonus Plan. For additional information on the 2011 Senior Executive Incentive Bonus Plan and the formula used to calculate annual bonus amounts, please see “Committee Actions in Fiscal 2011 Concerning Named Executive Officer Compensation-“Establishment of 2011 Senior Executive Incentive Bonus Plan” beginning on page 31 of this Proxy Statement.
At its March meeting, the Committee also reviews the Company’s stated financial results for the recently completed fiscal year, certifies the calculation of proposed bonus amounts, and reports them to the full Board.
The Board may amend, suspend, or terminate the Bonus Plan for a given year, including amending the Bonus Plan in a way that might increase the Company’s costs.
No bonuses were paid to the Named Executive Officers under the 2011 Bonus Plan. Please see “Committee Action in 2012 Concerning Named Executive Officer Compensation-2011 Bonus Plan Awards” on page 37 of this Proxy Statement. The amount of bonuses to be paid to Bonus Incentive Plan participants for the 2012 fiscal year, if this proposal is approved, cannot presently be determined.
For additional information concerning annual bonuses and material features of the Bonus Plan, please see “Annual Incentive (Bonus) Compensation” on page 27 of this Proxy Statement and “Establishment of 2011 Senior Executive Incentive Bonus Plan” on page 31 of this Proxy Statement.
Long-Term Performance Awards Under, and Material Features of, the Amended and Restated 2001 Equity Incentive Plan and the Second Amended and Restated 2008 Equity Incentive Plan
The Committee considers long-term incentive compensation (“LTI”) critical to the alignment of executive compensation with the creation of shareholder value and LTI awards are designed to focus executives on the long-term success of the Company, as reflected in increases to the Company’s stock price, growth in its earnings per share and other elements.
At its March meeting, the Committee reviews the portfolio of long-term incentive vehicles, the targeted award size and the performance measures associated with any awards. The Committee also reviews recommendations provided by management and the Committee’s compensation consultant regarding LTI design. The Board’s practice is to make annual grants of equity awards, including stock options, SARs, restricted stock and
performance shares, upon recommendation of the Committee at that time. However, the Committee and the Board have decided to discontinue SARs from the equity plan mix except in extraordinary circumstances. The Committee believes that the use of multiple equity vehicles balances a focus on equity-driven growth with the retention and performance aspects of restricted stock. The grant date is the same date that the Board approves the awards. The equity award is priced at the closing price on the NYSE (the “Fair Market Value”) of our common stock on that date. From time to time, the Board will consider making grants under other special circumstances, such as, recruiting new executive talent, upon the promotion of an executive and to retain key individuals. Any and all other grants (other than the March grants) are effective as of the date of the triggering event (e.g., new hire or promotion date) and are priced at the Fair Market Value of our common stock on that date.
A copy of the 2001 Plan is attached as Appendix B to the Company’s 2004 Proxy Statement filed with the SEC on April 16, 2004. A copy of the 2008 Plan is attached as Appendix A to the Company’s 2011 Proxy Statement filed with the SEC on April 18, 2011. The 2001 Plan and the 2008 Plan are administered by the Committee, which has the power to determine the appropriate business criteria for any awards, to select the key employees and non-employee Directors to be granted awards under the 2001 Plan and the 2008 Plan, to determine the size, type and terms of awards to be made to each individual selected, to modify the terms of any award that has been granted, to determine the time when awards will be granted, to establish performance objectives and to prescribe the form of the instruments embodying awards under the 2001 Plan and the 2008 Plan. Key employees and non-employee Directors are eligible to receive awards under the 2001 Plan and the 2008 Plan. Awards under the 2001 Plan and the 2008 Plan include, but need not be limited to, stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares or units, or other stock based awards. Nothing contained in the 2001 Plan and the 2008 Plan prevents the Company from adopting or continuing in effect other or additional compensation arrangements. The Committee’s determination and interpretations under the 2001 Plan and the 2008 Plan will be binding on all interested persons. Awards generally are granted for no cash consideration, and are generally not-transferable except upon the death of a participant.
The exercise price per share of stock purchasable under any stock option and the grant price of a SAR, if any are awarded, will not be less than the Fair Market Value of our stock on the date of grant. The Board may amend, alter, or discontinue the 2001 Plan or the 2008 Plan at any time, including amending it in ways that might increase the cost to the Company, provided that shareholder approval must be obtained for any amendment that would increase the number of shares available for awards.
Subject to adjustment as described below, a limited number of shares of the Company’s common stock including treasury shares as of the first day of each calendar year (including any partial year) during which the 2001 Plan and the 2008 Plan, are in effect are available for granting awards in such year.
As of April 12, 2012, approximately 867,569 shares remain available for issuance under the 2001 Plan and approximately 2,231,488 shares remain available for issuance under the 2008 Plan.
Under either the 2001 Plan or the 2008 Plan, all shares available for granting as awards in any year that are not used will be available for use in subsequent years. In the event of a stock split, stock dividend, or other change in corporate structure, the Committee will adjust the number and type of shares which may be made the subject of new awards or are then subject to outstanding awards and other award terms. The Committee is also authorized, for similar purposes, to make adjustments in performance award criteria or in the terms and conditions of other awards in recognition of unusual or nonrecurring events affecting the Company or its financial statements or of changes in applicable laws, regulations, or accounting principles.
The awards that will be granted under the 2001 Plan and the 2008 Plan following the 2012 Annual Meeting cannot presently be determined.
For additional information concerning long-term incentive awards and material features of our long-term incentive compensation, please see “Long-Term Incentive Compensation” on page 27 of this Proxy Statement, “Long-Term Incentive Compensation Awards” on page 32 of this Proxy Statement, “Performance Shares Earned in 2011 Upon Completion of the 2008 Performance Cycle” on page 33 of this Proxy Statement, the 2011 Grants of Plan-Based Awards Table on page 42 of this Proxy Statement, and the 2011 Outstanding Awards at Fiscal Year-End Table on page 44 of this Proxy Statement.
Conclusion
If the shareholders approve this proposal, the material terms of the executive officer performance goals described above will constitute the framework within which the Committee will establish specific performance goals for the forms of performance-based compensation to be paid and awarded to executive officers of the Company between the dates of the 2012 and 2017 Annual Meetings, and therefore preserve the Company’s ability to obtain tax deductions for such performance-based compensation.
Your Board of Directors recommends a vote FOR the following proposal:69
RESOLVED, that the material terms of the executive officer performance goals are hereby approved.
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ITEM 3 – RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2014 |
In General
The Board has approved the Audit Committee’sCommittee's selection of Deloitte & Touche LLP as our independent registered public accounting firm for our 20122014 Fiscal Year (“("Fiscal 2012”2014"). This selection is being presented to the shareholders for their ratification. Proxies solicited by the Board will, unless otherwise directed, be voted to ratify the selection by the Board of Deloitte & Touche LLP as our independent registered public accounting firm for Fiscal 2012.2014. Deloitte & Touche LLP has been our independent auditor since our 20002001 Fiscal Year. The Board has been advised by Deloitte & Touche LLP that it is an independent registered public accounting firm with respect to the Company within the meaning of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
A representative of Deloitte & Touche LLP is expected to be present at the Annual Meeting. He or she will have the opportunity to make a statement, if he or she so desires, and will be available to respond to appropriate questions during the meeting. For additional information regarding our relationship with Deloitte & Touche LLP, please refer to the Audit Committee Report below.
The Audit Committee selected, and we retained, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu and their respective affiliates (collectively, the “Deloitte Entities”"Deloitte Entities"), as our independent registered public accounting firm to audit our consolidated financial statements for Fiscal 20112013 and Fiscal 2010 and to provide various advisory, auditing and consulting services in 2010 and 2009.2012. We understand the need for the Deloitte Entities to maintain objectivity and independence in their audit of our financial statements and internal controls. We do not use the Deloitte Entities for internal audit work and will only use the Deloitte Entities for non-audit work when the Audit Committee concludes that the Deloitte Entities are the most appropriate provider of that service. The Audit Committee annually evaluates whether our use of the Deloitte Entities for non-audit services is compatible with the Deloitte Entities’Entities' independence.
The aggregate fees billed by the Deloitte Entities in 20112013 and 2010for 2012 for these various services were as follows:
| | | Description of Professional Service | Amount Billed | Amount Billed |
| | 2011 | 2010 | Fiscal 2013 | Fiscal 2012 |
Audit Fees are fees for (i) the audit of our annual financial statements, (ii) review of financial statements in our quarterly reports on Form 10-Qs, (iii) the audit of the effectiveness of our internal control over financial reporting, and (iv) for services that are provided by the independent registered public accounting firm in connection with statutory and regulatory filings. | | $976,200 | | $901,725 | | $1,044,000 | | $1,014,200 |
Audit-Related Fees are for professional services rendered in connection with the application of financial accounting and reporting standards, as well as acquisition related matters. | | - | | - | | — | | — |
Tax Fees are fees for compliance, tax advice, and tax planning. | | - | | - | | — | | — |
All Other Fees are fees for any service not included in the first three categories. Indicates fees for services related to the audit of the financial statements of our Nonqualified Deferred Compensation Plan (Senior Executives) (the “Plan”), which are included in the Plan’s Annual Report on Form 11-K. All services were approved by the Audit Committee. | | $17,800 | | $16,500 | | $23,700 | | $18,300 |
Pre-Approval Policies
The Audit Committee has the direct responsibility to select, retain, terminate, determine compensation and oversee the work of our independent registered public accounting firm. Pre-approval by the Audit Committee is required for any engagement of our independent registered public accounting firm and the Audit Committee has established the following pre-approval policies and procedures. Annually, the Audit Committee pre-approves services to be provided by our independent registered public accounting firm. The Audit Committee also considers the engagement of our independent registered public accounting firm to provide other services during the year. Requests for approval are submitted to the Audit Committee by our management. Requests are required to include an adequate explanation of the services in sufficient detail for the Audit Committee to determine whether the request is consistent with the SEC’sSEC's rules on auditor independence. In determining whether to approve the engagement of our independent registered public accounting firm, the Audit Committee considers whether such service is consistent with the independence of the registered public accounting firm. The Audit Committee also considers the amount of audit related fees in comparison to all other fees paid to the registered public accounting firm and reviews such comparison each year.
The Audit Committee reviewed and discussed the Company’sCompany's audited financial statements with management, which has primary responsibility for the financial statements, and with the Company’sCompany's independent registered public accounting firm, Deloitte & Touche LLP, which is responsible for expressing an opinion on whether the consolidated financial statements present fairly, in all material respects, the Company’sCompany's financial position, results of operations and the related cash flows in conformity with accounting principles generally accepted in the United States of America and whether the Company maintained, in all material respects, effective internal control over financial reporting based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The Audit Committee met regularly with Deloitte & Touche LLP and the Company’sCompany's internal audit staff, with and without management present, to discuss the results of their audits, management’smanagement's assessment of the Company’sCompany's internal control over financial reporting, Deloitte & Touche LLP’sLLP's opinions regarding the Company’sCompany's internal control over financial reporting, and the overall quality of the Company’sCompany's financial reporting. The Audit Committee also reviewed Management’sManagement's Report on Internal Control Over Financial Reporting contained in the Company’sCompany's Annual Report on Form 10-K for the year ended January 28, 2012February 1, 2014 as filed with the SEC, as well as Deloitte & Touche LLP’sLLP's Report of Independent Registered Public Accounting Firm included in the same Annual Report on Form 10-K related to its audits of (i) the Company’sCompany's consolidated financial statements, and (ii) the effectiveness of internal control over financial reporting.
The Audit Committee discussed with Deloitte & Touche LLP the matters that are required to be discussed under AU Section 380, “Communication"Communication with Audit Committees”Committees" as adopted by the Public Company Accounting Oversight Board. The Audit Committee also discussed with internal audit and management any significant matters as a result of the internal audit work.
The Audit Committee has received the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte & Touche LLP’sLLP's communications with the Audit Committee concerning independence, and has discussed with Deloitte & Touche LLP its independence. The Audit Committee has concluded that Deloitte & Touche LLP did not provide any prohibited non-audit services to the Company and its affiliates.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the Company’sCompany's audited financial statements be included in the Company’sCompany's Annual Report on Form 10-K for Fiscal 20112013 for filing with the SEC. The Audit Committee also selected Deloitte & Touche LLP as the Company’sCompany's independent registered public accounting firm for Fiscal 2012.2014.
This Audit Committee Report is provided by the following Independent Directors, who constitute all of the members of the Audit Committee:
David Y. Schwartz (Chairman)
Alan J. BarocasDiane M. Ellis
Gabrielle E. Greene
William J. Montgoris
Ralph P. Scozzafava
Ratification of the Selection of Deloitte & Touche LLP as Independent Registered Public Accounting Firm For Fiscal 20122014
Deloitte & Touche LLP has been selected by the Audit Committee as the independent registered public accounting firm for the Company and its subsidiary for Fiscal 2012.2014. Consequently, the Board has approved the selection of Deloitte & Touche LLP as the Company’sCompany's independent registered public accounting firm for Fiscal 2012.2014.
Your Board of Directors recommends a vote FOR the following proposal:
RESOLVED that the selection of Deloitte & Touche LLP, as Independent Registered Public Accounting Firm for Fiscal 2012,2014, is hereby ratified.
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| SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS |
The following tables provide information as of January 28, 2012February 1, 2014 concerning (i) our Amended and Restated 2001 Equity Incentive Plan (the “2001 Plan”) and our Second Amended and Restated 2008 Equity Incentive Plan (the “2008 Plan”), under both of which our common stock is authorized for issuance to officers, Directors and other key employees in the form of Restricted Stock, upon the exercise of Stock Optionsstock options and Stock Appreciation Rightsstock appreciation rights (SARs) granted to them, and as the result of performance sharesPerformance Shares granted to them, and (ii) our Amended and Restated 2003 Non-Employee Director Compensation Plan (the “2003 Director Plan”), under which our common stock is authorized for issuance to non-employee Directors in lieu of all or a portion of their cash compensation if they so elect.
AS OF JANUARY 28, 2012FEBRUARY 1, 2014
| Plan category | | Number of securities to be issued upon exercises of outstanding options, warrants and rights (a) | | Weighted-average exercise price of outstanding options, warrants and rights (b) | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | | |
| | | | | | | | | | |
| Equity compensation plans approved by security holders: | | | | | | | | |
| | 2001 Plan (1) | | 1,805,157 | (2) | $18.43 | | 840,755 | | |
| | 2008 Plan | | 2,199,100 | (2) | $14.19 | | 2,089,400 | | | | | | | | | | | | | |
| | 2003 Director Plan | | 10,947 | (3) | (4) | | 204,511 | (5) | |
| | | | | | | | | | |
| Plan category | | | Number of securities to
be issued upon exercises
of outstanding options,
warrants and rights (a) | | | | Weighted-average
exercise price of
outstanding options,
warrants and rights (b) | | | | Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a)) (c) | | |
| Equity compensation plans approved by security holders: | | | | | | | | | | | | | |
| 2001 Plan (1) | | | 349,676 |
| | (2) | | $18.56 | | | | 506,318 |
| | |
| 2008 Plan | | | 715,175 |
| | (2) | | $15.53 | | | | 2,640,846 |
| | |
| 2003 Director Plan | | | 11,351 |
| | (3) | | — |
| | (4) | | 213,649 |
| | (5) |
| Equity compensation plans not approved by security holders | Equity compensation plans not approved by security holders | | None | | None | | None | | | None |
| | | | None |
| | | | None |
| | |
| Total | Total | | 4,015,204 | | $16.10 | | 3,134,666 | | | 1,076,202 |
| | | | $16.52 | | | | 3,360,813 |
| | |
| |
| (1) | The number of securities remaining available for future issuance under the 2001 Plan has been reduced to reflect an aggregate of 278,725378,100 shares at the Target Number that may be issued as a result of the grant of Performance Shares and 336,965649,900 shares of restricted stock issued under the 2001 Plan and 40,0002,559 shares of restricted stock under the 2008 Plan. |
| |
| (2) | The weighted average remaining contractual life of these outstanding options and SARs is 1.910.6 years for the 2001 Plan and 5.063.37 years for the 2008 Plan. The weighted average remaining contractual life for the 2001 Plan and the 2008 Plan together is 3.642.46 years. |
| |
| (3) | Reflects Deferred Stock Units (“DSUs”("DSUs") issued under the 2003 Director Plan. The number of DSUs credited to a Director’sDirector's account is computed by dividing (i) the amount of compensation the Director has elected to defer by (ii) the average of the high and low prices of the Company's stock for the five trading days prior to the first day of the term of the Director during which the election has been made. An election, once made, is irrevocable for the applicable period to which it relates. The number of shares of common stock to be distributed to a Director will be equal to the number of DSUs credited to a Director’sDirector's account. |
| |
| (5) | Shares granted under the 2003 Director Plan are solely for non-employee Directors that elect to receive their fees or retainers in DSUs in lieu of cash. There is no Company match or premium applied to compensation received in the form of equity. |
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our Directors and executive officers (“reporting persons”Reporting Persons”) to file reports with the SEC disclosing their ownership and changes in their ownership of our common stock. Copies of these reports must also be furnished to us.
Based solely upon our review of the copies of reports furnished to us and written representations that no other reports are required, during 2012, we believe that all of our Directors and executive officers made all required filings during Fiscal 2013 on a timely basis except as described below.
On March 29, 2011, eight executive officerswhich were filed by the Company on behalf of the CompanyReporting Persons (officers) in Fiscal 2013:
|
| | | | | | | | | | | | | |
| Reporting Person | | Transaction Date | | Form 4 Due Date | | Form 4 Filing Date | | Days Late* | | Shares in Transaction | | Explanation |
| Michael Glazer | | April 8 | | April 10 | | April 16
| | 4 | | 5,636 |
| | (1) |
| Ron Lucas | | April 8 | | April 10 | | April 16
| | 4 | | 757 |
| | (1) |
| Edward Record | | April 11 | | April 15 | | April 16
| | 1 | | 4,195 |
| | (2) |
| Steven Hunter | | April 11 | | April 15
| | April 16
| | 1 | | 1,119 |
| | (2) |
| Ron Lucas | | April 11 | | April 15
| | April 16
| | 1 | | 140 |
| | (2) |
| Michael Glazer | | July 2 | | July 5 | | July 8 | | 1 | | 160 |
| | (1) |
| Ron Lucas | | July 2 | | July 5 | | July 8 | | 1 | | 34 |
| | (1) |
| Michael Glazer | | December 18 | | December 20 | | December 26 | | 3 | | 72 |
| | (1) |
| Ron Lucas | | December 18 | | December 20 | | December 26 | | 3 | | 192 |
| | (1) |
| Edward Record | | December 18 | | December 20 | | December 26 | | 3 | | 20 |
| | (1) |
| Russ Lundy II | | December 18 | | December 20 | | December 26 | | 3 | | 12 |
| | (1) |
| Richard Stasyszen | | December 18 | | December 20 | | December 26 | | 3 | | 25 |
| | (1) |
* Business days
(1) These shares were granted Restricted Stock and/or SARs. On March 31, 2011, eachacquired pursuant to the Company’s Deferred Compensation Plan (the “Plan”). The delay in filing was due to the delay in receiving the transaction details from the Trustee of the eight executive officers filed a Form 4Plan, who is not affiliated with the SEC on a timely basis reporting those grants. However,Company.
(2) These shares reflect the payment of tax liability by withholding shares incident to the vesting of Restricted Stock. The delay in filing was due to a miscommunication,delay in the sharestransfer of Restricted Stock and the SARs were incorrectly over reported. On April 11, 2011, each of the eight executive officers filed an amended Form 4 (a Form 4/A) with the SEC reporting the correct number of shares of Restricted Stock and SARs. The following table reflects the shares of Restricted Stock and SARs reported on the Form 4 and Form 4/A filings.shares.
Reporting Person | Form 4 Restricted Stock (shares) Reported | Form 4/A Restricted Stock (shares) Reported | Form 4 SARs Reported | Form 4/A SARs Reported |
| Andrew Hall | 39,000 | 36,000 | 74,500 | 68,500 |
| Steven Hunter | 10,700 | 10,008 | 10,000 | 8,850 |
| Ron Lucas | 5,000 | 4,700 | 10,000 | 8,850 |
| Richard Maloney | 13,000 | 11,700 | 24,000 | 22,250 |
| Edward Record | 13,000 | 11,700 | 24,000 | 22,250 |
| Oded Shein | 5,000 | 4,700 | N/A | N/A |
| Richard Stasyszen | 3,500 | 3,050 | 6,000 | 5,800 |
| Joanne Swartz | 5,000 | 4,700 | 10,000 | 8,850 |
Voting Securities
Shareholders of record at the close of business on April 12, 2012,the Record Date (April 17, 2014), will be eligible to vote at the Annual Meeting. The voting securities of the Company consist of its $0.01 par value common stock. On the Record Date, there were 30,658,29431,693,850 shares of our common stock, par value $0.01, outstanding and entitled to vote at the Annual Meeting. In addition, on the Record Date, holders of 343,406450,978 shares of unvested Restricted Stock are entitled to vote at the Annual Meeting. Each share outstanding and each share of unvested Restricted Stock on that date will be entitled to one vote. Treasury shares are not voted. Individual votes of shareholders are kept private, except as appropriate to meet legal requirements. Access to proxies and other individual shareholder voting records is limited to the independent Inspector of Election and certain employees of the Company and its agents who must acknowledge in writing their responsibility to comply with this policy of confidentiality.
Vote Required for Approval
Item 1 –- Election of Directors. Pursuant to our Amended and Restated ByLaws and Section 78.330 of the Nevada Revised Statutes, the nominees receiving the sevennine highest vote totals (a plurality) of the votes cast at the Annual Meeting in person or by proxy will be elected as Directors.
Item 2 –- Advisory Resolution to Approve Executive Compensation. This shareholder vote on executive compensation is advisory and non-binding on the Board or the Company in any way. The affirmative vote of a majority of the shares presented or represented and entitled to vote either in person or by proxy is required to approve this advisory resolution.
Item 3 – Approval- Ratification of Material Termsthe Selection of Executive Officer Performance Goals.Deloitte & Touche LLP as Independent Registered Public Accounting Firm for Fiscal 2014. The affirmative vote of a majority of the shares presented or represented and entitled to vote either in person or by proxy is required to approve this proposal.
Item 4 – Ratification of the Selection of Deloitte & Touche LLP as Independent Registered Public Accounting Firm for Fiscal 2012. The affirmative vote of a majority of the shares presented or represented and entitled to vote either in person or by proxy is required to approve this proposal.
Other Matters. All other matters require for approval the favorable vote of a majority of shares voted at the Annual Meeting in person or by proxy.
Abstentions. Abstentions, if any, will not be counted as votes cast. Therefore, they will have no effect on the outcome of the other matters to be voted on at the Annual Meeting.
Broker Discretionary Voting Not Permitted
Broker discretionary voting of uninstructed shares is not permitted for a shareholder vote on any matter other than Item 43 (Ratification of the Selection of Deloitte & Touche LLP as Independent Registered Public Accounting Firm for Fiscal 2012)2014).
Broker Non-Vote
If you are a beneficial owner whose shares are held of record by a broker, you must instruct the broker how to vote your shares. If you do not provide voting instructions, your shares will not be voted on any proposal on which the broker does not have discretionary authority to vote. This is called a “broker non-vote.” In these cases, the broker can register your shares as being present at the Annual Meeting for purposes of determining the presence of a quorum but will not be able to vote on those matters for which specific authorization is required under the rules of the NYSE.
If you are a beneficial owner whose shares are held of record by a broker, your broker has discretionary voting authority under NYSE rules to vote your shares on Item 43 (Ratification of the Selection of Deloitte & Touche LLP as Independent Registered Public Accounting Firm for Fiscal 2012)2014) even if the broker does not receive voting instructions from you. However, your broker does not have discretionary authority to vote on Items 1 (Election of Directors), and 2 (Advisory Resolution to Approve Executive Compensation) and 3 (Approval of Material Terms of Executive Officer Performance Goals) without instructions from you, in which case a broker non-vote will occur and your shares will not be voted on those matters. Accordingly, it is particularly important that beneficial owners instruct their brokers how they wish to vote their shares.
Manner for Voting Proxies
The shares represented by all valid proxies received by mail, or submitted by telephone or the Internet will be voted in the manner specified. Where specific choices are not indicated, the shares represented by all valid proxies received will be voted: FOR Items 1 (Election of Directors), 2 (Advisory Resolution to Approve Executive Compensation), and 3 (Approval of Material Terms of Executive Officer Performance Goals) and 4 (Ratification of the Selection of Deloitte & Touche LLP as Independent Registered Public Accounting Firm for Fiscal 2012)2014). Should any matter not described above be properly presented at the Annual Meeting, the persons named in the Proxy Card will vote in accordance with their judgment.
Voting in Person at the Annual Meeting
We encourage shareholders to submit proxies in advance by telephone, by the Internet, or by mail. Shareholders may also vote in person at the Annual Meeting, or may execute a proxy designating a representative to vote for them at the meeting. If your shares are held in street name and you wish to have your shares voted for Items 1 (Election of Directors), and 2 (Advisory Resolution to Approve Executive Compensation) and 3 (Approval of Material Terms of Executive Officer Performance Goals), you must either (i) instruct your broker how to vote your shares, (ii) vote your shares by phone or the Internet, or (iii) bring a brokerage statement, written proxy from your broker, or other proof of ownership of the Company’s common stock as of the Record Date with you to the Annual Meeting.
Other Matters to be Presented
The Board knows of no other matters which may be presented at the Annual Meeting. If any other matters properly come before the Annual Meeting, including any adjournment or adjournments thereof, proxies received in response to this solicitation will be voted upon such matters in the discretion of the person or persons named in the Proxy Card.
Solicitation of Proxies
Proxies will be solicited on behalf of the Board by mail or in person, and all solicitation costs will be paid by the Company. Upon written request, copies of this Proxy Statement, the Proxy Card and our Annual Report for Fiscal 20112013 will be furnished to holders of record, as well as to brokers, dealers, banks and voting trustees, or their nominees, for the purpose of soliciting proxies from beneficial owners, and we will reimburse such holders for their reasonable expenses. AST Phoenix Advisory PartnersAdvisors has been retained to assist in soliciting proxies at a fee of $7,000 plus reasonable out-of-pocket costs.
Shareholders of Record Requesting Copies of the Company’s 20112013 Annual Report on Form 10-K
A copy of our 20112013 Annual Report on Form 10-K will be furnished without charge to shareholders beneficially or of record at the close of business on April 12, 2012,17, 2014, on written request to Bob Aronson, Vice President, Investor Relations, at 10201 Main Street, Houston, TX 77025.
Electronic Access to Proxy Statement and Annual Report
This Proxy Statement, our Annual Report to Shareholders for Fiscal 20112013 and our Annual Report on Form 10-K for Fiscal 20112013 are available to review at http://bnymellon.mobular.net/bnymellon/ssi.www.envisionreports.com/SSI for shareholders of record and at www.edocumentview.com/SSI for beneficial owners. This Proxy Statement (DEF 14A) and our Annual Report on Form 10-K for Fiscal 20112013 are also available on the SEC’s EDGAR database at www.sec.gov.
Documents Available in Print
In addition to being posted with printer friendly versions on the Investor Relations/Corporate Governance site on our website (www.stagestoresinc.com), our Audit Committee, Corporate Governance and Nominating Committee and Compensation Committee Charters, our Corporate Governance Guidelines, our Code of Ethics for Senior Officers, and our Code of Ethics and Business Conduct are available in print to any shareholder who requests them. Written requests should be made to Bob Aronson, Vice President, Investor Relations, at 10201 Main Street, Houston, TX 77025.
