United States Securities And Exchange CommissionUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.___)
Filed by the Registrant þ Filed by a Party other than the Registrant ¨
Check the appropriate box:
| Preliminary Proxy Statement | ||||
| ¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||
| þ | Definitive Proxy Statement | |||
| ¨ | Definitive Additional Materials | |||
| ¨ | Soliciting Material | |||
ULTA SALON, COSMETICS & FRAGRANCE, INC. | ||||
| (Name of Registrant as Specified In Its Charter) | ||||
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||
| Payment of Filing Fee (Check the appropriate box): | ||||
| þ | No fee required. | |||
| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||||
| (1) | Title of each class of securities to which transaction applies: | |||
| (2) | Aggregate number of securities to which transaction applies: | |||
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
| (4) | Proposed maximum aggregate value of transaction: | |||
| (5) | Total fee paid: | |||
| ¨ | Fee paid previously with preliminary materials. | |||
| Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||||
| (1) | Amount Previously Paid: | |||
| (2) | Form, Schedule or Registration Statement No.: | |||
| (3) | Filing Party: | |||
| (4) | Date Filed: | |||
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 16, 20106, 2013
TO THE STOCKHOLDERS OF ULTA SALON, COSMETICS & FRAGRANCE, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Ulta Salon, Cosmetics & Fragrance, Inc. (“Ulta” or the “Company”), a Delaware corporation, will be held on Wednesday,Thursday, June 16, 2010,6, 2013, at 10:00 A.M. local time, at Ulta’s headquarters located at 1000 Remington Blvd., Suite 120, Bolingbrook, Illinois 60440, for the following purposes:
| 1. | To elect Charles Heilbronn | |
| 2. | To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm, for our fiscal year | |
| 3. | To vote on an advisory resolution to approve the Company’s executive compensation; and |
| 4. | To transact such other business as may properly come before the meeting or any adjournment or postponement thereof. |
The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice.
The Board of Directors has fixed the close of business on April 19, 2010,8, 2013, as the record date for the determination of stockholders entitled to notice of and to vote on the items listed above at thisthe Annual Meeting of Stockholders and at any adjournment or postponement thereof.
| By Order of the Board of Directors |
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Robert S. Guttman Senior Vice President, General Counsel and Secretary |
April 24, 2013
INTERNET AVAILABILITY OF PROXY MATERIALS
We are furnishing proxy materials to our stockholders primarily via the internet. On April 24, 2013, we mailed most of our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our Proxy Statement and our 2012 Annual Report on Form 10-K. The Notice of Internet Availability of Proxy Materials also instructs you on how to vote via the internet. Other stockholders, in accordance with their prior requests, received e-mail notification of how to access our proxy materials and vote via the internet, or have been mailed paper copies of our proxy materials and a proxy card or voting form.
Internet distribution of our proxy materials is designed to expedite receipt by stockholders, lower the cost of the Boardannual meeting, and conserve natural resources. However, if you would prefer to receive paper copies of Directors
Important notice regarding availability of proxy materials
for Ulta’s 20102013 Annual Meeting of Stockholders to be held on June 16, 2010:6, 2013:
The Proxy Statement and Annual Report to Stockholders onForm 10-K
for the year ended January 30, 2010February 2, 2013 are available athttp://ir.ulta.com.ir.ulta.com.
Brokers cannot vote for ProposalProposals 1 or 3 without your instructions.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, WE ENCOURAGE YOU TO READ THIS PROXY STATEMENT AND SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS AS SOON AS POSSIBLE. FOR SPECIFIC INSTRUCTIONS ON HOW TO VOTE YOUR SHARES, PLEASE REFER TO THE INSTRUCTIONS ON THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS YOU RECEIVED IN THE MAIL. IF YOU RECEIVED PAPER COPIES OF THE PROXY MATERIALS, KINDLY MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE (WHICH IS POSTAGE PREPAID, IF MAILED IN THE UNITED STATES). EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES OF RECORD ARE HELD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
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Bolingbrook, IL 60440
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
JUNE 16, 20106, 2013
ARTICLE I. PROXY MATERIALS AND ANNUAL MEETING
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
| Q: | General — Why am I receiving these materials? |
A: | On or about | |||
| Q: | Delivery of Materials — Why did I receive a notice in the mail regarding the internet availability of proxy materials instead of a full set of proxy materials? | |||
| A: | In accordance with rules adopted by the Securities and Exchange Commission (the “SEC”), we may furnish proxy materials, including this Proxy Statement and our 2012 Annual Report and Form 10-K for fiscal 2012, to our stockholders by providing access to such documents on the internet instead of mailing printed copies. Most stockholders will not receive printed copies of the proxy materials unless they request them. Instead, the Notice, which was mailed to most of our stockholders, will instruct you as to how you may access and review all of the proxy materials on the internet. The Notice also instructs you as to how you may submit your proxy on the internet. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting such materials in the Notice. | |||
| Q: | Date, Time and Place — When and where is the Annual Meeting of Stockholders? | |||
| A: | The Annual Meeting of Stockholders will be held on | |||
| Q: | Purpose — What is the purpose of the Annual Meeting of Stockholders? | |||
| A: | At our Annual Meeting, stockholders will act upon the matters outlined in this Proxy Statement and in the Notice of Annual Meeting on the cover page of this Proxy | |||
| Q: | Attending the Annual Meeting — How can I attend the Annual Meeting? |
| A: | You will be admitted to the Annual Meeting if you were an Ulta stockholder or joint holder as of the close of business on April | |||
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| order to be admitted to the Annual Meeting, all attendees must provide photo identification and comply with the other procedures outlined above upon request. |
| Q: | Multiple Sets of Proxy Materials — What should I do if I receive more than one set of voting materials? | |||
| A: | You may receive more than one set of voting materials, including multiple copies of this Proxy Statement and multiple | |||
| Q: | Record Holders and Beneficial Owners — What is the difference between holding shares as a Record Holder versus a Beneficial Owner? | |||
| A: | Most Ulta stockholders hold their shares through a broker or other nominee rather than directly in their own name. There are some distinctions between shares held of record and those owned beneficially: | |||
Record Holders — If your shares are registered directly in your name with our Transfer Agent, American Stock Transfer & Trust Company, you are considered, with respect to those shares, the stockholder of record or Record Holder and the Notice was sent directly to you by Ulta. As the stockholder of record, you have the right to grant your voting proxy directly to Ulta or to vote in person at the Annual Meeting.
Beneficial Owner — If your shares are held in a brokerage account or by another nominee, you are considered the Beneficial Owner of shares held in street name, and these proxy materials are beingthe Notice was forwarded to you automatically, along with a voting instruction card from your broker, trustee or nominee. As a Beneficial Owner, you have the right to direct your broker, trustee or nominee how to vote and are also invited to attend the Annual Meeting. Since a Beneficial Owner is not the stockholder of record, you may not vote these shares in person at the meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the meeting. Your broker, trustee or nominee has enclosed or provided voting instructions for you to use in directing how to vote your shares. If you do not provide specific voting instructions to your broker by June 6, 2010May 27, 2013 (10 days before the Annual Meeting), your broker can vote your shares with respect to “discretionary” items, but not with respect to “non-discretionary” items. The election of Directors is(Proposal 1) and the advisory vote on executive compensation (Proposal 3) are considered a non-discretionary item,items, while the ratification of the appointment of our independent registered public accounting firm (Proposal 2) is considered a discretionary item. On non-discretionary items for which you do not give your broker instructions, the shares will be treated as broker non-votes.
| Q: | Voting — Who can vote and how do I vote? |
Only holders of our common stock at the close of business on April 8, 2013 will be entitled to notice of and to vote at the Annual Meeting. At the close of business on April 8, 2013, we had outstanding and entitled to vote 63,674,528 shares of common stock. Each holder of our common stock on such date will be entitled to one vote for each share held on all matters to be voted upon at the Annual Meeting.
To ensure that your vote is recorded promptly, please vote as soon as possible, even if you plan to attend the Annual Meeting in person. Most stockholders have two options for submitting their votes:
| Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct how your shares are voted without attending the Annual Meeting. If you are a stockholder of record, you may vote by | ||
If you attend the Annual Meeting, you may also submit your vote in person, and any previous votes that you submitted by mail will be superseded by the vote that you cast at the Annual Meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you must obtain from the Record Holder a legal proxy issued in your name.
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| Q: | Revocation of Proxy — May I change my vote after I return my proxy? | ||||
| A: | Yes. Even after you have submitted your proxy/vote, you may revoke or change your vote at any time before the proxy is exercised by (i) the timely delivery of a valid, later-dated proxy, timely written notice of revocation with our | ||||
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Presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the common stock outstanding on April 8, 2013 will constitute a quorum, permitting the Annual Meeting to proceed and business to be conducted. As of April 8, 2013, 63,674,528 shares of common stock, representing the same number of votes, were outstanding. Thus, the presence of the holders of common stock representing at least 31,837,265 votes will be required to establish a quorum. Proxies received but marked as abstentions and broker non-votes will be included in the calculation of the number of votes considered to be present at the meeting.
We will publish final results on a Current Report on Form 8-K within four business days of the Annual Meeting.
We will bear the entire cost of solicitation of proxies, including preparation, assembly, printing and distribution of this Proxy Statement and any additional information furnished to stockholders. If you choose to access the proxy materials and/or vote over the internet, you are responsible for internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding shares of common stock beneficially owned by others to forward to such Beneficial Owners. We may reimburse persons representing Beneficial Owners of common stock for their reasonable costs of forwarding solicitation materials to such Beneficial Owners. Original solicitation of proxies may be foundsupplemented by electronic means, mail, facsimile, telephone or personal solicitation by our Directors, officers or other employees. No additional compensation will be paid to our Directors, officers or other regular employees for such services.
ARTICLE II. CORPORATE GOVERNANCE AND THE BOARD OF DIRECTORS
Over the course of Ulta’s history, the Board of Directors has developed corporate governance practices consistent with its duties of good faith, due care and loyalty, to help fulfill its responsibilities to our stockholders.
Board of Directors meetings and committees
During the fiscal year ended February 2, 2013, the Board of Directors held twelve meetings. Commencing fiscal year 2003, Mr. Eck became our Non-Executive Chairman and typically presides over meetings of the full Board as well as executive sessions. Effective February 21, 2013, Mr. Eck began serving as our Interim Chief Executive Officer until our Board of Directors is able to identify and hire a permanent Chief Executive Officer. In addition, as previously announced, Mr. Eck intends to step down from his position as Chairman effective at the conclusion of the 2013 Annual Meeting of Stockholders, but will remain a member of the Board. The Board of Directors has an audit committee, a nominating and corporate governance committee and a compensation committee. During fiscal year 2012, no Director attended fewer than 75% of the aggregate meetings of the Board of Directors and of the committees on which he or she served that were held during the period for which he or she was a Director or committee member, respectively. Directors are invited and are expected to attend the Annual Meeting of Stockholders, and all but one of our Directors then in office attended our 2012 Annual Meeting of Stockholders.
Committee Composition: Unless otherwise noted, the following table provides the composition of each of our committees as of February 2, 2013:
| (2) | Additional information regarding the |
| (3) | Mr. Heilbronn was appointed Chairman of the |
| (4) | Mr. MacDonald was appointed to the Board of Directors |
| (5) | Mr. Rubin resigned from the Board of |
| * | Non-Executive Chairman of the Board. |
| † | Committee chairman. |
Board leadership structure
The Ulta Corporate Governance Guidelines (the “Corporate Governance Guidelines”) provide that the offices of the Chief Executive Officer and the Chairman of the Board of Directors may be either combined or
separated at the discretion of the Board of Directors. Currently, our Chairman, Dennis K. Eck, is serving as our Interim Chief Executive Officer until our Board of Directors is able to identify and hire a permanent Chief Executive Officer. Once a permanent Chief Executive Officer is hired, the roles of Chief Executive Officer and Chairman of the Board will again be separated in recognition of the differences between these two roles. We believe that this leadership structure enhances the accountability of the Chief Executive Officer to the Board, strengthens the Board’s independence from management and ensures a greater role for the independent Directors in the oversight of our Company. In addition, separating these roles allows our Chief Executive Officer to focus his efforts on running our business and managing our Company in the best interests of our stockholders, while the Chairman provides guidance to the Chief Executive Officer and, in consultation with management, helps to set the agenda for Board meetings and establishes priorities and procedures for the work of the full Board. The Chairman presides over meetings of the full Board as well as executive sessions (without management), which the Board generally holds several times a year, both telephonically and in conjunction with each in-person meeting of the full Board.
Our Corporate Governance Guidelines also provide that from time to time, the independent directors may determine that the Board of Directors should have a lead director. In the event that the independent directors make such a determination, a majority of the independent directors will appoint a lead director. In the event that a lead director is designated, his or her duties would include: assisting the Chairman of the Board and Board of Directors in assuring compliance with and implementation of the Company’s Corporate Governance Guidelines, coordinating the agenda for and moderating sessions of the Board of Directors’ non-management directors and facilitating communications between the non-management directors and the other members of the Board and the management of the Company. The Company currently has seven independent directors and to date they have not determined that the Board of Directors should have a lead director.
The Board believes that the current board leadership structure is in the best interests of the Company and its stockholders at this time. The Board recognizes that no single leadership model is right for all companies and at all times and that, depending on the circumstances, other leadership models, such as combining the Chairman and Chief Executive Officer roles, might be appropriate. Accordingly, the Board periodically reviews its leadership structure. Our Corporate Governance Guidelines provide the flexibility for the Board to modify or continue our leadership structure in the future, as it deems appropriate.
Independence
Board member independence is an essential element of Ulta corporate governance. The Board of Directors has determined that each of the current non-employee Directors and each nominee for Director is free of any relationship that would interfere with his or her individual exercise of independent judgment with regard to Ulta. Each member of the nominating and corporate governance committee, compensation committee and audit committee satisfy the current independence requirements of NASDAQ and the SEC.
Board role in risk oversight
Our Board of Directors oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance stockholder value. Management is responsible for the Company’s day-to-day risk management activities and processes, and our Board’s role is to engage in informed oversight of and provide direction with respect to such risk management activities and processes. The Board recognizes that a fundamental part of risk management is not only understanding the risks our Company faces and the steps management is taking to manage those risks, but also understanding what level of risk is appropriate for our Company. As such, the Board focuses on understanding the nature of our enterprise risks, including operational, financial, legal and regulatory, strategic and reputational risks, as well as the adequacy of our risk assessment and risk management processes. To facilitate such an understanding, the Board and its committees receive management updates on our business operations, financial results and strategy, and the Board discusses and provides direction with respect to risks related to those topics.
While the Board has the ultimate oversight responsibility for the risk management process, various committees of the Board also have responsibility for risk management. The audit committee oversees risks associated with financial accounting and audits, as well as internal control over financial reporting. The audit committee assists the Board in its oversight by discussing with management our Company’s risk assessment and management policies, the Company’s significant financial risk exposures and the actions taken by management to limit, monitor or control such exposures. The compensation committee oversees the risks relating to the Company’s compensation policies and practices. In setting compensation, the compensation committee strives to create incentives that encourage a level of risk-taking behavior consistent with the Company’s business strategy. The compensation committee also oversees the risks relating to the Company’s management development and leadership succession. The nominating and corporate governance committee oversees the implementation of the Company’s Code of Business Conduct and monitors compliance therewith.
Nominating and corporate governance committee
The nominating and corporate governance committee acts under a written charter that was approved by the Board of Directors and has been published under “Corporate Governance” in the Investor Relations section of the Ulta website at http://ir.ulta.com. The primary responsibility of the nominating and corporate governance committee is to recommend to the Board of Directors candidates for nomination as Directors and membership on committees of the Board. The committee reviews the performance and independence of each Director, and in appropriate circumstances, may recommend the removal of a Director for cause. The committee oversees the evaluation of the Board of Directors and makes recommendations to improve performance. The committee also recommends to the Board of Directors policies with respect to corporate governance. During fiscal year 2012, the nominating and corporate governance committee was composed of the following independent Directors: Messrs. Stevens and Heilbronn and Ms. Nagler. Mr. Stevens serves as the current Chairman of the committee. The Board of Directors has determined that each committee member qualifies as a “nonemployee director” under rules and regulations of the SEC, as well as the independence requirements of NASDAQ. The nominating and corporate governance committee met five times during fiscal year 2012.
Nominating and corporate governance committee charter
The nominating and corporate governance committee charter identifies the roles and responsibilities that govern the nominating and corporate governance committee, such as:
| — | identifying qualified candidates to become Board members; |
| — | selecting nominees for election as Directors at the next annual meeting of stockholders (or special meeting of stockholders at which Directors are to be elected); |
| — | selecting candidates to fill any vacancies on the Board; |
| — | reviewing the composition of the committees of the Board and making recommendations to the |
| — | overseeing the implementation of and monitoring compliance with Ulta’s Code of Business Conduct (other than with respect to complaints regarding accounting issues, as |
| — | overseeing the |
Nomination process — qualifications
The nominating and corporate governance committee is responsible for reviewing the appropriate skills and characteristics required of Directors in the context of prevailing business conditions, and in its nominating committee capacity, for making recommendations regarding the size, composition and desired complementary skill sets of the Board of Directors. The objective of the nominating and corporate governance committee is to
create and sustain a Board of Directors that brings to Ulta a variety of perspectives and skills derived from high-quality business and professional experience. Pursuant to its charter, the nominating and corporate governance committee annually assesses the experience, expertise, capabilities, skills and diversity of the members of the Board, individually and collectively, and considers these factors when evaluating Director candidates. In this regard, both the Board and the nominating and corporate governance committee believe that it is essential for Board members to represent diverse viewpoints based upon differences in professional experience, education, skill and other individual qualities and attributes that contribute to an active, effective Board. Although there are no specific minimum qualifications that a Director candidate must possess, the nominating and corporate governance committee recommends those candidates who possess the highest personal and professional integrity, have prior experience in corporate management and the industry, maintain academic or operational expertise in an area of our business and demonstrate practical and mature business judgment.
We will consider all stockholder recommendations for candidates for the Board of Directors and, to date, we have not received any Director nominees from a stockholder. Stockholders who want to suggest a candidate for consideration should send a written notice, addressed to the Corporate Secretary at our principal executive offices at 1000 Remington Blvd., Suite 120, Bolingbrook, IL 60440. Further details about the nomination process may be found in the answer to Question 15 above, entitled “Nomination of Directors — How do I submit a proposed Director nominee to the Board of Directors for consideration?”
This notice must include the following information for each candidate the stockholder proposes to nominate: (i) name, age, business address and residence address, (ii) principal occupation or employment, (iii) class and number of shares of capital stock beneficially owned by such candidate and (iv) and any other information relating to the candidate that is required to be disclosed in solicitations for proxies for the election of Directors pursuant to applicable SEC rules. In addition, the stockholder giving such notice must include his or her (i) name and record address and (ii) the class and number of shares such stockholder beneficially owns.
We have engaged the services of search firms to provide us with candidates, especially when we are looking for a candidate with a particular expertise, quality, skill or background. We also consider potential Director candidates recommended by current Directors, officers, employees and others. The nominating and corporate governance committee screens all potential candidates in the same manner, regardless of the source of the recommendation. Our review is typically based on any written materials provided with respect to potential candidates, and we review such materials to determine the qualifications, experience and background of the candidates. Final candidates are typically interviewed by members of the committee and other members of the Board, as appropriate. In making its determinations, the committee evaluates each individual in the context of our Board of Directors as a whole, with the objective of assembling a group that can best perpetuate the success of our Company and represent stockholder interests through the exercise of sound judgment. After review and deliberation of all feedback and data, the committee makes a recommendation to the full Board of Directors regarding whom should be nominated by the Board of Directors.
Code of Business Conduct
All Ulta employees, officers and members of the Board of Directors must act ethically at all times and in accordance with the policies comprising the Ulta Code of Business Conduct. We demand full compliance with this policy from employees, officers and members of the Board of Directors, including our Chief Executive Officer, Chief Financial Officer and such other individuals performing similar functions. Moreover, all corporate employees, officers and members of the Board of Directors have signed a certificate acknowledging that they have read, understand and will continue to comply with the policy, and all corporate employees and officers are required to read and acknowledge this policy on an annual basis. Ulta includes the Code of Business Conduct in new hire materials for all corporate employees. The policy is published and any amendments or waivers thereto will be published under “Corporate Governance” in the Investor Relations section of the Ulta website located athttp://ir.ulta.com.
Corporate Governance Guidelines
Our Board of Directors adopted the Corporate Governance Guidelines to assist the Board in the exercise of its responsibilities. The Corporate Governance Guidelines have been published under “Corporate Governance” in the Investor Relations section of the Ulta website located athttp://ir.ulta.com.
Disclosure committee
The disclosure committee is a management committee that acts under a written charter approved by the audit committee. Its primary responsibility is to assist our Chief Executive Officer and Chief Financial Officer in fulfilling their responsibility for oversight of the accuracy and timeliness of our disclosures. Management and the disclosure committee have established disclosure controls and procedures designed to ensure that disclosures required by the SEC and other written information to be disclosed to the investment community are recorded, processed, summarized and reported accurately on a timely basis. These disclosure controls and procedures are monitored and evaluated for their effectiveness on a regular basis. The disclosure committee, in conjunction with management, reviews and approves the preparation of SEC filings and various documents distributed to the investment community containing financial information or other material information. The disclosure committee discusses all relevant information with our Chief Executive Officer and Chief Financial Officer and, if needed, the Chairman of the disclosure committee then discusses all relevant information with the Board of Directors and the audit committee.
Stockholder communication
Any stockholder is free to communicate in writing with the Board of Directors on matters pertaining to Ulta by addressing their comments to the Board of Directors, c/o General Counsel, Ulta Salon, Cosmetics & Fragrance, Inc., 1000 Remington Blvd., Suite 120, Bolingbrook, IL 60440, or by e-mail at InvestorRelations@ulta.com. Our General Counsel will review all correspondence addressed to our Board of Directors, or any individual Director, for any inappropriate correspondence and correspondence more suitably directed to management. Our General Counsel will forward appropriate stockholder communications to our Board of Directors prior to the next regularly scheduled meeting of our Board of Directors following the receipt of the communication. Our General Counsel will summarize all correspondence not forwarded to our Board of Directors and make the correspondence available to our Board of Directors for its review upon our Board of Directors’ request.
PROPOSAL ONE
Our Amended and Restated Certificate of Incorporation provides that our Board of Directors be divided into three classes designated Class I, Class II and Class III, with each class consisting, as nearly as possible, of one-third of the total number of Directors. Each class serves a three-year term with one class being elected at each year’s annual meeting of stockholders, beginning in 2008. Vacancies on our Board of Directors may be filled by persons elected by a majority of the remaining Directors. A Director elected by our Board of Directors to fill a vacancy, including a vacancy created by an increase in size of our Board of Directors, will serve for the remainder of the full term of the class of Directors in which the vacancy occurred and until that Director’s successor is elected and qualified.
The Board of Directors is presently composed of eight members, seven of whom are non-employee, independent Directors. Each Director was elected to the Board of Directors to serve until a successor is duly elected and qualified or until his or her death, resignation or removal. Mr. Heilbronn is the Class III Director whose term expires in 2013 and is a nominee for re-election and Mr. MacDonald is a Class III Director nominee for election to the Board of Directors. Mr. MacDonald, who is standing for election by the stockholders at this Annual Meeting for the first time, was first identified as a candidate for the Board of Directors by a third party
search firm and was recommended by the nominating and corporate governance committee.If elected at the Annual Meeting, each of the nominees would serve until the 2016 Annual Meeting of Stockholders and until their successors are elected and qualified, or until their death, resignation or removal. Messrs. Eck, Philippin and Stevens are the Class I Directors with terms expiring in 2014 and Mr. DiRomualdo, Ms. Halligan and Ms. Nagler are the Class II Directors with terms expiring in 2015.
The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting will be required to approve the nominees for election and re-election. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the stockholders and will have the same effect as negative votes. Broker non-votes will be counted towards a quorum, but will not be counted for any purpose in determining whether this matter has been ratified.
Set forth below is biographical information for each nominee for election for a three-year term expiring at the 2016 Annual Meeting:
| Name | Age | Positions with Us / Principal Occupations / Business Experience | Director Since | |||||||
Charles Heilbronn | 58 | Mr. Heilbronn has been Executive Vice President and Secretary of Chanel, Inc. since 1998. Since December 2004, he has served as Executive Vice President of Chanel Limited, a privately-held international luxury goods company selling fragrance and cosmetics, women’s clothing, shoes and accessories, leather goods, fine jewelry and watches. From 1987 to December 2004, Mr. Heilbronn was Vice President and General Counsel of Chanel Limited and Senior Vice President, General Counsel and Secretary of Chanel, Inc. Mr. Heilbronn is currently a director of Doublemousse B.V., Mousseless, Inc., Chanel, Inc. (U.S.) and various other Chanel companies and affiliates in the U.S. and worldwide. He is also a Membre du Conseil de Surveillance (a non-executive board of trustees) of Bourjois SAS.
Mr. Heilbronn has over 20 years of experience at one of the world’s leading luxury goods companies and brings a broad domestic and international perspective to issues considered by the Board. His business background and industry experience enable him to provide substantial expertise on relevant business matters and in the governance of publicly held corporations as the current chair of our compensation committee and as a member of our nominating and corporate governance committee. | 1995 | |||||||
Michael R. MacDonald Mr. MacDonald has been the President and Chief Executive Officer and member of the Board of Directors of DSW Inc. since April 2009. Prior to joining DSW Inc., Mr. MacDonald served as Chairman and Chief Executive Officer of Shopko Stores, a retail company, from May 2006 to March 2009. Prior to that time, Mr. MacDonald held executive positions at Saks Incorporated from 1998 to 2006, most recently as Chairman and Chief Executive Officer of the Northern Department Stores Group for six years. Prior to serving in that capacity, Mr. MacDonald held executive positions at Carson Pirie Scott, including the position of Chairman and Chief Executive Officer. With over 30 years of business experience in all phases of retail, including managing merchandising, marketing, stores, operations and finance functions, Mr. MacDonald brings strong leadership abilities and in-depth retail knowledge to our Board. Additionally, his current role as President and Chief Executive Officer of another public company provides him with expertise in executive compensation programs which positions him well to serve as a member of our compensation committee.Name Age Positions with Us / Principal Occupations / Business
Experience Director
Since 61 2012
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE
INFORMATION ABOUT OUR BOARD OF DIRECTORS
Directors continuing in office until the 2014 Annual Meeting:
| Name | Age | Positions with Us / Principal Occupations / Business Experience | Director Since | |||||||
Dennis K. Eck | 69 | Mr. Eck has been the Non-Executive Chairman of our Board since October 2003 and is currently serving as our Interim Chief Executive Officer. From November 1997 to September 2001, Mr. Eck served as Chief Executive Officer and a director of Coles Myer LTD Australia, one of Australia’s largest retailers. Prior to that, Mr. Eck served in various other executive roles with Coles Myer, including as Chief Operating Officer and a director from April 1997 to November 1997, Managing Director of Basic Needs from November 1996 to April 1997, and Managing Director of Supermarkets from May 1994 to November 1996. Prior to 1994, Mr. Eck served as President, Chief Operating Officer and a director of The Vons Companies Inc., as the Vice Chairman of the Board and Executive Vice President of American Stores, Inc., as Chairman and Chief Executive Officer of American Food and Drug, as President, Chief Executive Officer and a director of American Food and Drug, and as President and Chief Operating Officer of Acme Markets, Inc. He also served in executive roles of increasing responsibility at Savon Drug Inc. and Jewel Food Stores. Mr. Eck is currently a director of Securus Inc. In 2000, Mr. Eck was named the Astute Business Leader of the Year in Australia by the Association of Chartered Accountants.
As the Interim Chief Executive Officer of the Company, Mr. Eck is able to provide the Board with valuable insight regarding the Company’s operations, its management team and associates as a result of his day-to-day involvement in the operations of the business. Additionally, the Board benefits from Mr. Eck’s demonstrated leadership at a large international corporation with operations worldwide. Running a public company exposed Mr. Eck to many of the issues facing public companies, including on the operational, financial and corporate governance fronts. His years of executive and managerial experience also enable him to bring demonstrated management ability at senior levels to the Board. | 2003 | |||||||
Charles J. Philippin Mr. Philippin was a principal of Garmark Advisors, a mezzanine investment fund, from 2002 until his retirement in February 2008. From 2000 to 2002, Mr. Philippin served as Chief Executive Officer of Online Retail Partners. From 1994 to 2000, Mr. Philippin was a member of the Management Committee of Investcorp International Inc., a global investment group. Prior to 1994, Mr. Philippin was a partner of PricewaterhouseCoopers, where he served as National Director of Mergers & Acquisitions. Mr. Philippin is a director and chairman of the audit committee of Alliance Laundry Systems. Mr. Philippin has also served as a director and chairman of the audit committee of CSK Auto, Inc., as a director, audit committee member and compensation committee member of Competitive Technologies, as a director and audit committee member of Aquilex, and as a director of Samsonite Corporation and Saks Fifth Avenue. Mr. Philippin brings to the Board a wealth of experience dealing with and overseeing the implementation of accounting principles and financial reporting rules and regulations. With his extensive experience chairing public company audit committees and in various senior management positions in the financial services sector, Mr. Philippin provides relevant expertise on investment and financial matters. His accounting experience, together with his knowledge of financial reporting rules and regulations, makes him well-positioned to serve as the Chairman of our audit committee.Name Age Positions with Us / Principal Occupations / Business
Experience Director
Since 63 2008
Kenneth T. Stevens Mr. Stevens is currently an Operating Partner with Advent International, a global private equity investor. Mr. Stevens was the Chief Executive Officer and a director of philosophy, Inc., a skin care and beauty company, from 2009 to April 2011. From 2007 to 2008, he served as President and Chief Operating Officer of Tween Brands, Inc., a publicly traded retailer. From 2002 until 2006, Mr. Stevens held various executive positions at Limited Brands, Inc. and its subsidiaries, including Executive Vice President and Chief Financial Officer of Limited Brands, Inc., Chief Executive Officer of Express and President of Bath & Body Works. Prior to 2002, Mr. Stevens held senior leadership positions at several public and private companies, including in Chord Communications, Bank One Retail Group, Taco Bell Corporation and PepsiCo, Inc. From 1983 to 1991, Mr. Stevens was a partner at McKinsey & Company, Inc. Mr. Stevens currently serves as the non-executive chairman of the board of Charlotte Russe. He previously served as a director and audit committee member of Cost Plus, Inc., Spartan Stores, Inc. and La Quinta Inns, Inc. and as a director, audit committee member and chairman of the compensation committee of Virgin Mobile USA, Inc. Mr. Stevens brings over twenty years of executive experience to the Board, including expertise in financial, management, strategic and operational matters. Additionally, as the Chief Executive Officer of a cosmetics company, Mr. Stevens had firsthand exposure to many of the issues facing retailers, including companies like Ulta. The insight Mr. Stevens has gained through his service as a board and committee member of four public companies and from his knowledge of accounting principles and financial reporting rules and regulations, makes him a valued member of our audit committee and Chairman of our nominating and corporate governance committee.Name Age Positions with Us / Principal Occupations / Business
Experience Director
Since 61 2011
Directors continuing in office until the 2015 Annual Meeting:
| Name | Age | Positions with Us / Principal Occupations / Business Experience | Director Since | |||||||
Robert F. DiRomualdo | 68 | Mr. DiRomualdo is Chairman and Chief Executive Officer of Naples Ventures, LLC, a private investment company that he formed in 2002. Prior to 2002, Mr. DiRomualdo served in various roles at Borders Group, Inc. and its predecessor companies, including as Chairman of the Board and Chief Executive Officer, and as President and Chief Executive Officer of Hickory Farms. Mr. DiRomualdo currently serves as a director of Gordon Brothers Group and was previously a director of Bill Me Later, Inc., where he served as chairman of the compensation committee and as a member of the audit committee. Mr. DiRomualdo has lectured frequently at the Wharton School of the University of Pennsylvania and Harvard Business School, in addition to other educational institutions, on a pro bono basis. He holds a master’s degree in business administration from Harvard Business School.
Mr. DiRomualdo’s qualifications for the Board include his ability to provide the insight and perspectives of a successful and long-serving Chairman and Chief Executive Officer of a major retail company, during which time he was instrumental in the development and implementation of a growth strategy that led to the company’s expansion into major domestic and international markets. He also oversaw a public stock offering and listing on the New York Stock Exchange by Borders Group as well as its birth into the Fortune 500. Due to his experience supervising the principal financial officer of Borders Group as well as his previous committee experience, Mr. DiRomualdo provides valuable insight as a member of our audit committee. | 2004 | |||||||
Catherine A. Halligan Ms. Halligan served as Senior Vice President, Sales & Marketing of PowerReviews Inc. from July 2010 to December 2011. Prior to joining PowerReviews Inc., Ms. Halligan held several executive level positions with prominent retailers. From 2005 to 2010, Ms. Halligan served in various executive positions with Walmart, including Chief Marketing Officer of Walmart.com from 2007 to 2009 and Vice President Market Development, Global eCommerce of Walmart.com from 2009 to 2010. From 1996 to 1999, Ms. Halligan held retail management positions with Williams Sonoma Inc., including Vice President and General Manager, Internet and Vice President, Marketing. Ms. Halligan also has previous retail experience with Blue Nile, Inc. and the Gymboree Corporation. Ms. Halligan began her career as a Marketing and Planning analyst for Lands’ End from 1987 to 1991. With over 20 years of experience in marketing and e-commerce within the retail industry, Ms. Halligan provides valuable insight and expertise on strategic marketing issues, Internet technology and multichannel business capabilities. In addition, Ms. Halligan’s business experience with large retail companies makes her a valued addition to our audit committee.Name Age Positions with Us / Principal Occupations / Business
Experience Director
Since 50 2012
Lorna E. Nagler Ms. Nagler is President of Bealls Department Stores, Inc. and has served in this position since January 2011. She served as President and Chief Executive Officer of Christopher & Banks Corporation, a specialty retailer of women’s clothing, from August 2007 to October 2010. She also served as a director of Christopher & Banks. From 2004 to 2007, Ms. Nagler was President of Lane Bryant, a division of Charming Shoppes, Inc., a women’s apparel company. From 2002 to 2004, she was President of Catherines’ Stores, also a division of Charming Shoppes, Inc. From 1996 to 2002, Ms. Nagler held various retail management positions with Kmart Corporation, including Senior Vice President, General Merchandise Manager of Apparel and Jewelry from 2000 to 2002 and Divisional Vice President, General Merchandise Manager of Kids and Menswear from 1998 to 2000. From 1994 to 1996, Ms. Nagler was a Vice President, Divisional Merchandise Manager for Kids R Us. Ms. Nagler also has previous retail experience with Montgomery Ward and Main Street Department Stores. With years of experience as a senior-level executive in a wide variety of retail companies, including as the President and Chief Executive Officer of a public retail company, Ms. Nagler provides considerable expertise on strategic, management and operational issues facing a multi-state retailer. Running a public company gave Ms. Nagler front-line exposure to many of the issues facing public retail companies, particularly on the operational, financial and corporate governance fronts. The Board also benefits from Ms. Nagler’s extensive experience in the retail industry and the informed perspectives such experience facilitates. Additionally, her past role as President and Chief Executive Officer positions her well to serve as a member of our compensation committee and nominating and corporate governance committee.Name Age Positions with Us / Principal Occupations / Business
Experience Director
Since 56 2009
Directors not standing for reelection at the 2013 Annual Meeting:
| Name | Age | Positions with Us / Principal Occupations / Business Experience | Director Since | |||||||
Chuck Rubin | 53 | Mr. Rubin served as our President and Chief Executive Officer from September 2010 until his resignation in February 2013. Prior to joining Ulta, he served as President of the North American Retail division of Office Depot Inc. beginning in January 2006. Mr. Rubin first joined Office Depot as Executive Vice President, Chief Marketing Officer and Chief Merchandising Officer in 2004. Before that time, Mr. Rubin spent six years at Accenture (including three years as a partner), where he worked with a range of retail clients across department store, specialty store and e-commerce venues. Prior to that, he spent six years in the sporting goods specialty retail business, where he served as a general merchandise manager and a member of the executive committees for two publicly held companies. He began his career with Federated Department Stores, where he spent 11 years in merchandising and store management. Mr. Rubin served as a member of the executive committee of the board of directors of the National Retail Federation from January 2007 through March 2010. | 2010 | |||||||
NON-EXECUTIVE DIRECTOR COMPENSATION FOR FISCAL 2012
The following table provides information related to the compensation of our non-employee Directors earned for fiscal 2012:
Name | Fees Earned or Paid in Cash ($) | Stock Awards(1)(2) ($) | Total ($) | |||||||||
Dennis K. Eck | 130,000 | 85,080 | 215,080 | |||||||||
Robert F. DiRomualdo | 75,000 | 85,080 | 160,080 | |||||||||
Catherine A. Halligan | 75,000 | 85,080 | 160,080 | |||||||||
Charles Heilbronn | 75,000 | 85,080 | 160,080 | |||||||||
Michael R. MacDonald (3) | 18,750 | 42,505 | 61,255 | |||||||||
Lorna E. Nagler | 75,000 | 85,080 | 160,080 | |||||||||
Charles J. Philippin | 87,500 | 85,080 | 172,580 | |||||||||
Kenneth T. Stevens | 83,500 | 85,080 | 168,580 | |||||||||
| (1) | Amounts shown represent the grant date fair value as computed in |
| (2) | The |
| (3) | Mr. MacDonald was appointed to the fiscal year 2012 was prorated in accordance with his service period. |
The following table sets forth the outstanding options and restricted stock held by our non-employee Directors as of February 2, 2013:
Name | Options | Restricted Stock | ||||||
Dennis K. Eck | — | 952 | ||||||
Robert F. DiRomualdo | — | 952 | ||||||
Catherine A. Halligan | — | 952 | ||||||
Charles Heilbronn | — | 952 | ||||||
Michael R. MacDonald | — | 447 | ||||||
Lorna E. Nagler | 50,000 | 952 | ||||||
Charles J. Philippin | 50,000 | 952 | ||||||
Kenneth T. Stevens | — | 952 | ||||||
We strive to promote an ownership mentality among our key leadership and Board of Directors. As such, the Company utilizes equity compensation to encourage our Directors to maintain a stock ownership investment in the Company under appropriate circumstances. As a result, in September 2011 the Board approved an annual equity retainer totaling $85,000 to be granted to each non-employee Director in the form of restricted stock valued based on the share price of our common stock on the date of grant, with the full retainer beginning with the first annual meeting occurring in the 2012 fiscal year. As a result, each non-employee Director received a grant of 952 shares of restricted stock that will vest on May 31, 2013. Upon joining our Board, Ms. Nagler was granted options to purchase 50,000 shares of our common stock, to be granted in three annual installments beginning in 2009, with each installment vesting equally over four years. During fiscal 2008, upon joining our Board, Mr. Philippin was granted an option to purchase 50,000 shares of our common stock which vest equally over four years.
In September 2011 the Board also approved an annual cash retainer totaling $75,000 to be granted to each non-employee Director, with quarterly payments beginning at the end of each quarter during the 2012 fiscal year. In addition, the Board approved an annual cash retainer of $45,000 for the Non-Executive Chairman of the Board, $12,500 for the audit committee chairman, $10,000 for the compensation committee chairman, and $8,500 for the nominating and corporate governance committee chairman. In September 2012 the Board approved increasing the annual cash retainer to $20,000 for the audit committee chairman, commencing with the 2013 fiscal year.
ARTICLE III. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
AND AUDIT COMMITTEE
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee of the Board of Directors has appointed Ernst & Young LLP as our independent registered public accounting firm for the fiscal year 2013, ending February 1, 2014. Services provided to Ulta by Ernst & Young LLP in fiscal year 2012 are described under “Fees to Independent Registered Public Accounting Firm” below. Additional information regarding the audit committee is provided on page 21.
Ernst & Young LLP has audited the financial statements of Ulta since 1997. Representatives of Ernst & Young LLP will be present at the Annual Meeting to respond to appropriate questions and to make such statements as they may desire.
Stockholder ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm is not required by our Bylaws or otherwise. However, the Board of Directors is submitting the selection of Ernst & Young LLP to the stockholders for ratification as a matter of good corporate governance practice. If the stockholders fail to ratify the selection, the audit committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the audit committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of Ulta and our stockholders.
The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting will be required to ratify the selection of Ernst & Young LLP. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the stockholders and will have the same effect as negative votes. Broker non-votes will be counted towards a quorum, but will not be counted for any purpose in determining whether this matter has been ratified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL TWO
FEES TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The following table sets forth the aggregate fees billed or expected to be billed by Ernst & Young LLP for professional services rendered for fiscal years 2012 and 2011:
| 2012 | 2011 | |||||||
Audit Fees (1) | $ | 822,000 | $ | 611,400 | ||||
Audit-Related Fees | — | — | ||||||
Tax Fees | — | — | ||||||
All Other Fees (2) | 1,995 | 1,995 | ||||||
|
|
|
| |||||
Total | $ | 823,995 | $ | 613,395 | ||||
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| (1) | Represents fees billed for professional services rendered for
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| (2) | Represents fees relating to online research software. |
The audit committee has approved all professional fees paid to Ernst & Young LLP.
The audit committee has established procedures for the pre-approval of all audit and permitted non-audit-related services provided by our independent registered public accounting firm. The procedures include, in part, that: (i) the audit committee, on an annual basis, shall pre-approve the independent registered public accounting firm’s engagement letter/annual service plan; (ii) the audit committee must pre-approve any permitted service not included in the annual service plan; (iii) the audit committee chairman has limited ability to pre-approve any permitted service between regularly scheduled meetings, as applicable, and a report of such services and related fees are to be disclosed to the full audit committee at the next scheduled meeting; and (iv) the audit committee will review a summary of the services provided and the fees paid on an annual basis.
The audit committee provides assistance to the Board of Directors in fulfilling its responsibility to our stockholders, potential stockholders, the investment community and other stakeholders relating to corporate accounting, financial, management and reporting practices, the system of internal controls and the auditing process. Specifically, the audit committee assists the Board of Directors in monitoring the integrity of our financial statements, our independent registered public accounting firm’s qualifications and independence, the performance of our internal audit function and independent registered public accounting firm, our compliance with legal and regulatory requirements and our policies with respect to risk assessment and risk management. The audit committee has direct responsibility for the appointment, compensation, retention (including termination) and oversight of our independent registered public accounting firm, and our independent registered public accounting firm reports directly to the audit committee.
During fiscal year 2012, the audit committee was composed of the following independent Directors: Messrs. DiRomualdo, Philippin and Stevens and Ms. Halligan beginning on February 14, 2012. Charles J. Philippin serves as the current Chairman of the audit committee. Each of Messrs. DiRomualdo, Philippin and Stevens has been designated by the Board of Directors as an “audit committee financial expert” as defined in applicable SEC rules. The Board of Directors made a qualitative assessment of each member’s level of knowledge and experience based on a number of factors, including education and work, management and director experience. The Board of Directors has determined that each committee member qualifies as a “nonemployee director” under SEC rules and regulations, as well as the independence requirements of NASDAQ. All members of our audit committee are financially literate and are independent, as independence is defined in Rule 5605(a)(2) of the NASDAQ listing standards and Section 10A(m)(3) of Exchange Act. The audit committee met ten times during fiscal year 2012, and its report is presented below. The audit committee acts under a written charter that was adopted by the Board of Directors and has been published under “Corporate Governance” in the Investor Relations section of the Ulta website located athttp://ir.ulta.com.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS1
The audit committee assists the Board of Directors in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting practices of Ulta.
The audit committee oversees Ulta’s financial process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. Ulta has an Internal Audit Department that is actively involved in examining and evaluating Ulta’s financial, operational and information systems activities and reports functionally to the audit committee and administratively to management. In fulfilling its oversight responsibilities, the audit committee reviewed and discussed with management the periodic reports, including the audited financial statements in our Annual Report on Form 10-K. This included a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements.
AUDIT COMMITTEE
21
The audit committee discussed with Ulta’s independent registered public accounting firm the overall scope and plans for their audit and developed a pre-approval process for all independent registered public accounting firm services. The audit committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of their examination, their evaluation of Ulta’s internal and disclosure controls and the overall quality of Ulta’s financial reporting. TheAs noted, the audit committee held 12ten meetings during fiscal year 2009.
In reliance on the reviews and discussions referred to above, the audit committee recommended to the Board of Directors, and the Board of Directors approved, that the audited financial statements be included in Ulta’s Annual Report onForm 10-K for the fiscal year 2009,2012, ended January 30, 2010,February 2, 2013, for filing with the SEC. The audit committee has appointed Ernst & Young LLP to be Ulta’s independent registered public accounting firm for the fiscal year 2010,2013, ending January 29, 2011.
Audit Committee of the Board of Directors
Charles J. Philippin (Chairman)
Robert F. DiRomualdoCharles J. Philippin
Catherine A. Halligan
Kenneth T. Stevens
| 1 | |
This report is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference into any Ulta filing under the Securities Act of 1933 |
22
COMPENSATION DISCUSSION AND ANALYSIS
The compensation committee met 16eleven times during fiscal year 2009,2012, and its report is presented below. During fiscal year 2009,2012, the compensation committee was composed of the following independent Directors: Messrs. Eck (Chairman), and Heilbronn and Lebow. LornaMs. Nagler, also an independent Director,and Mr. MacDonald, who joined the committee immediately following her election to the Board at the 2009 annual meeting.beginning on December 12, 2012. The Board of Directors has determined that each current committee member qualifiesqualified as a “nonemployee director” under the rules and regulations of the SEC, as well as the independence requirements of NASDAQ.NASDAQ, during fiscal year 2012. Mr. Heilbronn currently serves as the Chairman of the compensation committee. Due to Mr. Eck’s current service as Interim Chief Executive Officer, he is no longer a member of the compensation committee. The compensation committee acts under a written charter that was adopted by the Board of Directors and has been published under “Corporate GovernanceGovernance” in the Investor Relations section of the Ulta website located athttp://ir.ulta.com.ir.ulta.com. Under this charter, the compensation committee is responsible for:
setting our compensation philosophy; | |||
reviewing and approving the compensation for all | |||
reviewing and recommending compensation for non-employee directors; | |||
supervising compensation policies for all employees including | |||
recommending to the Board the employment, appointment and removal of officers in accordance with the bylaws; | |||
establishing, amending and terminating compensation and benefits plans and administering such plans; and | |||
annually reviewing its own performance and reporting findings and action plans to the Board. |
The compensation committee may under its charter delegate any of its responsibilities to a subcommittee, but only to the extent consistent with our bylaws, articlesBylaws, Articles of incorporation, sectionIncorporation, Section 162(m) of the Internal Revenue Code and NasdaqNASDAQ rules. In connection with the performance of its duties, the compensation committee has sought the input of our Chief Executive Officer with respect to her compensation, as well as, other executives’ compensation.
Compensation consultant
During 2009fiscal 2012 the compensation committee engaged Towers Perrin, anPay Governance, as its outside consultant, to provide information regarding market comparisons for certain positions and generalassist the compensation committee with executive compensation advice. Towers Perrinprogram design, advise and consult with the committee on general compensation issues, and to keep the committee apprised of regulatory, legislative, and accounting developments and competitive practices related to executive compensation. In those capacities, Pay Governance was engaged directly by the compensation committee. Pay Governance is an independent executive compensation consulting firm and does not determine or recommend the exact amount or form of executive compensation for any executive officers. Pay Governance reports directly to the compensation committee, and neither Towers Perrin nora representative of Pay Governance, when requested, attends meetings of the committee, is available to participate in executive sessions and communicates directly with the Chair of the compensation committee or its affiliates performedmembers outside of meetings. Pay Governance does no other work for Ultathe Company. The compensation committee has reviewed the nature of and extent of the relationship between the compensation committee, the Company and Pay Governance with respect to any potential conflicts of interest or our affiliates. Towers Perrin merged with Watson Wyatt in January 2010similar concerns. Based on that review, the compensation committee believes that there are no conflicts of interest or potential conflicts of interest that would unduly influence Pay Governance’s provision of advice that is independent of management to the compensation committee. Management engaged its own compensation and became Towers Watson. This merger had no material effectbenefit consultants for advice on the services providedmanagement of the compensation and benefit programs and to Ulta.
Compensation risk
The Company has reviewed its compensation plans, practices and policies and has determined that it does not have any such plans, practices and policies that create risks that are reasonably likely to have a material adverse effect on the Company.
| — | The Company’s variable compensation programs are linked to specific performance goals set by the compensation committee for executive officers and for other employees by supervisors consistent with the Company’s compensation philosophy and business goals; |
| — | The performance periods for the pay programs are designed to match the period for which the employee has influence on the results and incorporate incentives of a longer term nature to tie the employee to the actual results; |
| — | Payments under the incentives are capped; |
| — | Payments are reviewed by the compensation committee, management, payroll, human resources and subject to spot audits; |
| — | The mix between fixed and variable pay is balanced as to neither discourage proper risk taking, nor encourage excessive risk taking; and |
| — | No participant is allowed to approve their own performance goals, nor their own payout. |
Compensation committee interlocks and insider participation
During the 2012 fiscal year, none of the members of our compensation committee hashad at any time been one of our officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any entity that has one or more executive officers serving on our Board of Directors or compensation committee.
23
The compensation committee has reviewed and discussed the following Compensation Discussion and Analysis (CD&A)(“CD&A”) with management. Based on this review and discussion, the compensation committee recommended to the Board of Directors, and the Board of Directors approved, that the CD&A be included in Ulta’s 2009fiscal 2012 Annual Report onForm 10-K and this Proxy Statement.
Compensation Committee of the Board of Directors
Charles HeilbronnSteven E. Lebow
(Chairman)
Michael R. MacDonald
Lorna Nagler
| 2 | ||
This report is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference into any Ulta filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing. |
24
COMPENSATION DISCUSSION AND ANALYSIS
Executive summary
Our strong financial performance in 2008 under the supervision of Towers Perrin.
| — | net income increase of 43.5% to $172.5 million in fiscal 2012 compared to $120.3 million in fiscal 2011; |
income per diluted share increase of 41.1% to $2.68 in fiscal 2012 compared to $1.90 in fiscal 2011; |
| — | net sales increase of 25.0% to $2.2 billion in fiscal 2012 compared to $1.8 billion in fiscal 2011; and |
| — | stock price increase of 26% from $77.31 on January 27, 2012 to $97.54 on February 1, 2013. |
Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed on April 3, 2013 for a more detailed description of our fiscal year 2012 financial results.
The alignment of performance and pay in 2012 reflects our compensation philosophy to attract and retain talent through well-designed performance-based compensation programs that provide for the opportunity to earn meaningful compensation upon achievement of superior performance.
At our 2012 Annual Meeting of Stockholders, the Company held an advisory vote to approve executive compensation (“say-on-pay”), thereby affording stockholders the opportunity to cast an advisory vote on the compensation programs for our named executive officers (“NEOs”). The result of this advisory vote indicated 97.6% stockholder approval of the compensation paid to our NEOs. The compensation committee believes that the overwhelming shareholder support evidenced by this vote thereby affirms stockholder support of the Company’s approach to executive compensation, and did not change its approach in 2012. The compensation committee will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for our named executive officers.
The Company’s strong financial performance in 2012 coupled with last year’s positive stockholder advisory vote and our ongoing attention and commitment to providing executive compensation that is strongly aligned with financial performance, reinforces the compensation committee’s view that our executive compensation program is achieving its objectives.
Named executive officers
During the 2012 fiscal year, our NEOs included: Chuck Rubin, President and Chief Executive Officer; Gregg R. Bodnar, Chief Financial Officer and Assistant Secretary (through September 6, 2012); Bruce L. Hartman, Chief Financial Officer and Assistant Secretary (September 7, 2012 through October 17, 2012); Scott M. Settersten, Acting Chief Financial Officer and Assistant Secretary (effective October 18, 2012); and Robert S. Guttman, Senior Vice President, General Counsel and Secretary.
Philosophy
Our executive compensation philosophy is to provide compensation opportunities that attract, retain and motivate talented key executives. We accomplish this by:
| — | evaluating the competitiveness and effectiveness of our compensation programs against other comparable businesses based on industry, size, results and other relevant business factors; |
| — | linking annual incentive compensation to our performance on key measurable financial, operational and strategic goals that support stockholder value; |
| — | focusing a significant portion of the executive’s compensation on equity-based incentives to align interests closely with stockholders; and |
| — | |||||
managing pay for performance such that pay is tied to business and individual performance. |
Our 2012 fiscal year compensation program consisted of a fixed base salary, variable cash incentive, stock option awards, and, in certain circumstances, restricted stock units (“RSUs”), with a significant portion weighted towards the variable components. This mix of compensation is intended to ensure that total compensation reflects our overall success or failure, to motivate executive officers to meet appropriate performance measures and to align management with shareholders’ long-term interests.
Overview of 2012 compensation
In fiscal year 2012, the Company continued to deliver outstanding shareholder value by exceeding growth targets. As part of our continued emphasis on creating shareholder value, we continue to utilize a single goal of performance against budget for earnings before taxes as reported to shareholders for the corporate annual incentive for all officers. This focus on a single company performance objective reflects the Company’s strong linkage between shareholder value creation and management incentives. For the 2012 fiscal year, the overachievement resulted in bonuses for the officers payable at 102.0% of their target annual incentives.
We continued to use stock options as our primary means of providing long-term incentives for our NEOs and made grants in accordance with our normal 2012 fiscal year annual program.
Competitive market data
In considering NEO pay levels for fiscal year 2012, the compensation committee reviewed competitive market data from two survey sources: (i) the Hay Group’s Retail Survey for companies with less than $4B in revenues and (ii) the Towers Watson General Industry Executive Compensation Database for companies with revenues from $1B to $4.9B. We do not use a defined peer group of companies for compensation benchmarking because we do not believe a sufficient number of relevant peers nor comparable companies in terms of business orientation and dynamic exist.
The compensation committee does not rely solely on the peer group or surveymarket data in making its individual compensation determinations, but rather the compensation committee considers Ms. Kirby’sour Chief Executive Officer’s input as to thean executive’s performance and internal pay equity among current executives and newly hired executives. The compensation committee also considers the accounting and tax impact of each element of compensation and in the past has tried to minimize the compensation expense impact of equity grants on our financial statements, while minimizing the tax consequences to executives.
For fiscal year 2012, the only changes made to NEO compensation levels were in the form of base salary increases. These were made based on the recommendation of our Chief Executive Officer due to individual
performance and internal equity and were supported by aggregated data the compensation committee reviewed from the following surveys in order to determine the market level of salary increases:
| — | Mercer Compensation Planning Survey for 2012/2013; |
| — | Hewitt: 2012-2013 Salary Increase Budget Survey; |
| — | World at Work Salary Budget Survey 2012/2013 (Retail Industry 1-3B Revenue); |
| — | World at Work Salary Budget Survey 2012/2013 (General Industry); and |
| — | Towers Watson Data Services Total Rewards 2012/2013 (General Industry) |
Base salary
Base salaries are reviewed annually and are set based on individual contractagreements and hiring negotiation, competitiveness versus the external market and internal merit increase budgets. Based on a review of marketplace salary increases contained in survey data reviewed by the compensation committee,surveys described above, as well as itsthe compensation committee’s assessment of current economic and other market conditions, each year management proposes a merit baseline percentage increase in salaries. Ms. KirbyOur Chief Executive Officer then recommends to the compensation committee individual adjustments to the baseline percentage (either up or down) based on herhis assessment of an individual’s performance, with input from the human resources department.
Annual bonusesincentives
Under the terms of her contract entered into in 2008, Ms. Kirby’shis employment agreement, Mr. Rubin’s target bonus isannual incentive was set at 100% of herhis base salary with a maximum bonusannual incentive equal to 200% of herhis base salary. Her target and maximum were set based on Towers Perrin’s input during the 2008 contract negotiations to be median for chief executive officers in the survey data and peer group discussed above. As discussed above, Mr. Bodnar’s target bonusannual incentive was increased to 50% of his base salary in 2009. Mr. Guttman and Mr. L’Heureux have aMessrs. Settersten and Guttman’s target bonus ofannual incentive was 40% of their base pay.
In fiscal 2009,year 2012, the bonusesannual incentives for Ms. Kirby, Mr. Bodnar, Mr. Guttman and Mr. L’Heureuxour NEOs were based on achievement of one quantifiable objective performance target weighted at 80% of the bonus opportunity. The
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For fiscal year 2012, no annual incentive was payable unless performance under the EBT goal exceeded 80%80.1% of the target. A maximum annual incentive opportunity of 250% of their individual targets could be earned by Messrs. Bodnar, L’HeureuxHartman, Settersten and Guttman and 200% under her contractMr. Rubin’s employment agreement. Mr. Bodnar was eligible for Ms. Kirby. In settinga pro-rated annual incentive award through his last day of service on September 29, 2012 in order to facilitate an orderly transition after the EBT target, the compensation committee believes that excluding the impactappointment of non-recurring charges and certain other accounting charges is appropriate because these are items over which management has no control.Mr. Hartman. Actual EBT for fiscal 20092012 was $63.7$279.8 million (vs. target of $47 million) resulting in a payout of $1,540,032 for Ms. Kirby and $350,002, $232,228 and $228,900 for Messrs Bodnar, Guttman and L’Heureux, respectively.
Mr. Settersten’s compensation committee also soughtfor the input2012 fiscal year reflects both his position as Vice President of the full board of directors. Based on this assessment,Accounting and as Acting Chief Financial Officer and Assistant Secretary. In connection with his promotion to Acting Chief Financial Officer and Assistant Secretary, Mr. BodnarSettersten’s base salary and target annual incentive was increased, and he received $38,500, Mr. Guttman received $23,223 and Mr. L’Heureux received $22,890 (representing 110%, 100% and 100% of the 20% discretionary portion of their bonus, respectively). The EBT portion of Ms. Kirby’s bonus reached the maximum limit for hera retention bonus of 200%$150,000. Mr. Settersten was appointed permanent Chief Financial Officer and Assistant Secretary effective March 12, 2013.
LTIP
We provide long-term incentives through annual grants of her salary under the terms of her contract. However, the compensation committee used its discretion to pay Ms. Kirby an additional $80,000 bonus in recognition of the Company’s performance during an unpredictableoptions and difficult retail environment.
Option grants under the LTIP generally have the following characteristics:
all options have an exercise price equal to the fair market value of our common stock on the date of grant; | |||
options vest ratably, on an annual basis over a four-year period; and | |||
options |
RSU grants under the LTIP.
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| — | each RSU entitles the holder to receive an equal number of shares of common stock, par value $0.01 per share at settlement; and |
| — | RSUs cliff vest 100% at the end of three years from grant date. |
In connection with his hiring, we agreed to grant Mr. Hartman equity with a value of $2,000,000 split evenly between options and RSUs. Mr. Hartman forfeited this equity upon his termination of employment.
Policy on investments related to Ulta stock
OptionLong-term incentive granting policy
We have adopted a general policy of making LTIP grants (options and other stock option grantsRSUs) and setting the exercise price for such options based on the closing price of our stock on the third business day following the date our earnings announcement is made for each fiscal quarter. This timing of option and RSU grants is, thus, generally consistent with when our executives and directors would be allowed to trade in our common stock under our insider trading policy. The compensation committee determined that setting the exercise price for stock options at this time was prudent in that it allowed for the market to process all reported public information prior to pricing of stock options, including officers and directors.doing so. Such a practice thereby eliminates any potential manipulation regarding the timing of stock option grants. All stock option and RSU grants are approved in advance by the compensation committee.
Benefits, perquisites andtax-gross-ups
Executives are allowed to defer compensation under our non-qualified deferred compensation plan, which is more fully described in the narrative to the 2012 Non-Qualified Deferred Compensation Table below. For all eligible employees, we offer a 401(k) plan with matching contributions equal to 50%100% of contributions made up to 3%3.0% of eligible compensation. We also offer to eligible employees group health, life, accident and disability insurance. In addition, all employees are entitled to a discount on purchases at our stores.
Severance
Mr. Guttman is concentrated in New York, we require certain of our employees to travel to and work in New York from time to time. However, as the income tax rates applicable in New York are substantially higher than those in Illinois, it was more expensive for our employees, on a tax basis, if we asked them to work in New York. Because we did not want to provide a disincentive to our employees to work from time to time in New York, and because the nature of their work requires travel to New York, the compensation committee determined that it was in our best interests togross-up non-New York employees for any differences in taxes paid on income in New York versus the rate that such employees would have paid in their home state. This taxgross-up is applicable to all employees impacted, not just executives. Accordingly, the compensation committee determined to reimburse employees for this difference in taxes each year.
Accounting and tax considerations
The compensation committee also considers the accounting and tax impact of each element of compensation and in the past has tried to minimize the compensation expense impact of equity grants on our financial statements, while minimizing the tax consequences to executives.
A goal of the compensation committee is to comply with the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended.Code. Section 162(m) limits the tax deductibility for public companies of annual
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The compensation committee considers the anticipated tax treatment to us and our executive officers when reviewing executive compensation and our compensation programs. While the tax impact of any compensation arrangement is one factor to be considered, such impact is evaluated in light of the compensation committee’s overall compensation philosophy and objectives. The compensation committee will consider ways to maximize the deductibility of executive compensation, while retaining the discretion it deems necessary to compensate officers in a manner commensurate with performance and the competitive environment for executive talent. From time to time, the compensation committee may award compensation to our executive officers which is not fully deductible if it determines that such award is consistent with its philosophy and is in our and our stockholders’ best interests.
Our 20072011 Incentive Award Plan has been designed and implemented with the intent to allow us to pay performance-based annual and long-term incentive compensation under Section 162(m) of the Internal Revenue Code. Accordingly, our annual incentive and stock option grants under the 20072011 Incentive Award Plan should be performance based and therefore deductible under Section 162(m).
Summary compensation tableSUMMARY COMPENSATION TABLE
The following table sets forth the compensation of our Chief Executive Officer, Chief Financial Officer and our other most highly compensated executive officersNEOs for ourthe fiscal year ending January 30, 2010. We refer to these individuals collectively as the NEOs.
| Non-Equity | ||||||||||||||||||||||||||||
| Option | Incentive Plan | All Other | ||||||||||||||||||||||||||
| Salary | Bonus | Awards | Compensation | Compensation | Total | |||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($) | (1) ($) | ($) | ($)(2) | ($) | |||||||||||||||||||||
| Lynelle P. Kirby | 2009 | 770,016 | 80,000 | 1,322,472 | 1,540,032 | 16,882 | 3,729,402 | |||||||||||||||||||||
| President, Chief Executive | 2008 | 770,014 | 80,000 | 2,750,000 | — | 158,043 | 3,758,057 | |||||||||||||||||||||
| Officer and Director (Principal Executive Officer) | 2007 | 650,960 | 812,500 | 2,549,994 | — | 26,149 | 4,039,603 | |||||||||||||||||||||
| Gregg R. Bodnar | 2009 | 337,889 | 38,500 | 469,300 | 350,002 | 3,278 | 1,198,969 | |||||||||||||||||||||
| Chief Financial Officer | 2008 | 320,007 | 17,000 | 1,401,410 | — | 3,098 | 1,741,515 | |||||||||||||||||||||
| (Principal Financial Officer) | 2007 | 295,430 | 85,000 | 335,999 | 101,702 | 80,109 | 898,240 | |||||||||||||||||||||
| Robert S. Guttman | 2009 | 290,285 | 23,223 | 235,201 | 232,228 | 3,999 | 784,936 | |||||||||||||||||||||
| Senior Vice President, General Counsel & Secretary | ||||||||||||||||||||||||||||
| Wayne D. L’Heureux | 2009 | 278,127 | 22,890 | 163,800 | 228,900 | 3,412 | 697,129 | |||||||||||||||||||||
| Senior Vice President — | ||||||||||||||||||||||||||||
| Human Resources | ||||||||||||||||||||||||||||
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) (2) | Total ($) | ||||||||||||||||||||||||
Chuck Rubin | 2012 | 878,096 | — | 255,082 | 1,445,034 | 867,013 | — | 3,445,225 | ||||||||||||||||||||||||
President, Chief Executive Officer and Director (Principal Executive Officer) (4) |
| 2011 2010 |
|
| 795,430 547,896 |
|
| — 2,800,000 | (3) |
| — 2,715,512 |
|
| 1,819,500 3,694,022 |
|
| 1,108,071 1,121,177 |
|
| 41,740 230,355 |
|
| 3,764,741 11,108,962 |
| ||||||||
Scott M. Settersten (5) Chief Financial Officer (Principal Financial Officer) | 2012 | 249,444 | 150,000 | 108,780 | 59,137 | 132,600 | — | 699,961 | ||||||||||||||||||||||||
Bruce L. Hartman (6) | 2012 | 66,506 | — | 1,000,077 | 1,000,010 | — | 28,607 | 2,095,200 | ||||||||||||||||||||||||
Chief Financial Officer | ||||||||||||||||||||||||||||||||
(Principal Financial Officer) | ||||||||||||||||||||||||||||||||
Gregg R. Bodnar (7) | 2012 | 326,360 | — | 36,145 | 204,654 | 146,230 | — | 713,389 | ||||||||||||||||||||||||
Chief Financial Officer | 2011 | 435,795 | — | — | 545,850 | 303,147 | 1,193 | 1,285,985 | ||||||||||||||||||||||||
(Principal Financial Officer) | 2010 | 383,698 | 53,126 | — | 576,800 | 425,006 | 1,097 | 1,439,727 | ||||||||||||||||||||||||
Robert S. Guttman | 2012 | 338,022 | — | 117,128 | 158,985 | 138,829 | 4,143 | 757,107 | ||||||||||||||||||||||||
Senior Vice President, | 2011 | 317,634 | — | — | 363,900 | 180,050 | 3,391 | 864,975 | ||||||||||||||||||||||||
General Counsel & Secretary | 2010 | 295,934 | 29,696 | — | 259,560 | 237,569 | 2,112 | 824,871 | ||||||||||||||||||||||||
| (1) | Amounts shown represent the grant date fair value of options granted in the year indicated as computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions made in the valuation reflected in these columns, see Note | |
| (2) | All other compensation includes relocation expense reimbursement of $18,409 and tax reimbursement gross ups of $10,198 for |
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| (3) | ||
Reflects Mr. Rubin’s special cash payment made as an inducement to commence employment with |
| 401(k) Matching | Life Insurance | New York State Tax | ||||||||||||||
| Name | Contributions | Premiums | Reimbursement | Legal Fees | ||||||||||||
| Lynelle P. Kirby | — | 1,549 | 3,706 | 11,627 | ||||||||||||
| Gregg R. Bodnar | 2,760 | 518 | — | — | ||||||||||||
| Robert S. Guttman | 2,760 | 1,239 | — | — | ||||||||||||
| Wayne D. L’Heureux | 2,760 | 652 | — | — | ||||||||||||
| (4) | Mr. Rubin resigned as President, Chief Executive Officer and Director effective February 21, 2013. |
| (5) | Mr. Settersten was appointed Acting Chief Financial Officer and Assistant Secretary effective October 18, 2012 and permanent Chief Financial Officer and Assistant Secretary effective March 12, 2013. |
| (6) | Mr. Hartman resigned as Chief Financial Officer and Assistant Secretary effective October 17, 2012. |
| (7) | Mr. Bodnar resigned as Chief Financial Officer and Assistant Secretary effective September 6, 2012. |
Grants of plan-based awardsGRANTS OF PLAN-BASED AWARDS
The following table sets forth certain information with respect to grants of plan-based awards for fiscal 20092012 to the NEOs.
| Exercise | ||||||||||||||||||||||||||||||||
| Estimated Future Payouts Under | Number of | or Base | Grant Date | Closing Price | ||||||||||||||||||||||||||||
| Non-Equity Incentive Plan Awards | Securities | Price of | Fair Value | of Common | ||||||||||||||||||||||||||||
| Grant | Threshold | Target | Maximum | Underlying | Option | of Option | Stock on | |||||||||||||||||||||||||
| Name | Date | $(1) | $ | $ | Options | Awards $ | Award $(2) | Grant Date $ | ||||||||||||||||||||||||
| Lynelle P. Kirby | 184,800 | 616,000 | 1,540,000 | |||||||||||||||||||||||||||||
| 6/9/2009 | 200,000 | 10.34 | 4.65 | 10.34 | ||||||||||||||||||||||||||||
| 10/25/2009 | 63,200 | 16.02 | 6.21 | 16.02 | ||||||||||||||||||||||||||||
| Gregg R. Bodnar | 42,000 | 140,000 | 350,000 | |||||||||||||||||||||||||||||
| 6/17/2009 | 40,000 | 9.75 | 5.59 | 9.75 | ||||||||||||||||||||||||||||
| 9/9/2009 | 30,000 | 14.41 | 8.19 | 14.41 | ||||||||||||||||||||||||||||
| Robert S. Guttman | 27,867 | 92,891 | 232,228 | |||||||||||||||||||||||||||||
| 3/24/2009 | 20,000 | 6.29 | 3.57 | 6.29 | ||||||||||||||||||||||||||||
| 9/9/2009 | 20,000 | 14.41 | 8.19 | 14.41 | ||||||||||||||||||||||||||||
| Wayne D. L’Heureux | 27,468 | 91,560 | 228,900 | |||||||||||||||||||||||||||||
| 9/9/2009 | 20,000 | 14.41 | 8.19 | 14.41 | ||||||||||||||||||||||||||||
| Compensation Committee Approval Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Number of Shares of Stock | Number of Securities Underlying Options | Exercise or Base Price of Option Awards $ | Grant Date Fair Value of Option Award $ (2) | |||||||||||||||||||||||||||||||
Name | Grant Date | Threshold $ (1) | Target $ | Maximum $ | ||||||||||||||||||||||||||||||||
Chuck Rubin | 5,950 | 850,013 | 1,700,026 | |||||||||||||||||||||||||||||||||
| 5/10/2012 | 3/20/2012 | — | 32,939 | 86.06 | 1,445,034 | |||||||||||||||||||||||||||||||
| 5/10/2012 | 3/20/2012 | 2,964 | — | — | — | |||||||||||||||||||||||||||||||
Scott M. Settersten | 910 | 130,000 | 325,000 | |||||||||||||||||||||||||||||||||
| 5/10/2012 | 3/20/2012 | — | 1,348 | 86.06 | 59,137 | |||||||||||||||||||||||||||||||
| 5/10/2012 | 3/20/2012 | 1,264 | — | — | — | |||||||||||||||||||||||||||||||
Bruce L. Hartman | 944 | 134,908 | 337,270 | |||||||||||||||||||||||||||||||||
| 9/12/2012 | 8/14/2012 | — | 19,585 | 98.90 | 1,000,010 | |||||||||||||||||||||||||||||||
| 9/12/2012 | 8/14/2012 | 10,112 | — | — | — | |||||||||||||||||||||||||||||||
Gregg R. Bodnar | 1,003 | 143,362 | 358,405 | |||||||||||||||||||||||||||||||||
| 5/10/2012 | 3/20/2012 | — | 4,665 | 86.06 | 204,654 | |||||||||||||||||||||||||||||||
| 5/10/2012 | 3/20/2012 | 420 | — | — | — | |||||||||||||||||||||||||||||||
Robert S. Guttman | 953 | 136,107 | 340,268 | |||||||||||||||||||||||||||||||||
| 5/10/2012 | 3/20/2012 | — | 3,624 | 86.06 | 158,985 | |||||||||||||||||||||||||||||||
| 5/10/2012 | 3/20/2012 | 1,361 | — | — | — | |||||||||||||||||||||||||||||||
| (1) | Threshold assumes performance exceeds 80% of each performance target, resulting in a payout of | |
| (2) | Represents the grant date fair value of stock |
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| Option Awards | ||||||||||||||||
| Number of | Number of | |||||||||||||||
| Securities | Securities | |||||||||||||||
| Underlying | Underlying | Option | ||||||||||||||
| Unexercised | Unexercised | Exercise | Option | |||||||||||||
| Options | Options | Price Per | Expiration | |||||||||||||
| Exercisable | Unexercisable | Share ($) | Date | |||||||||||||
| Lynelle P. Kirby(1) | 237,000 | 79,000 | 15.81 | 07/18/2017 | ||||||||||||
| 237,000 | 79,000 | 25.32 | 07/18/2017 | |||||||||||||
| 250,000 | 375,000 | 14.06 | (2) | 03/24/2018 | ||||||||||||
| — | 63,200 | (3) | (3 | ) | (3 | ) | ||||||||||
| — | 200,000 | (4) | 10.34 | 06/09/2019 | ||||||||||||
| — | 200,000 | (4) | (4 | ) | (4 | ) | ||||||||||
| — | 63,200 | (3) | 16.02 | 10/25/2019 | ||||||||||||
| Gregg R. Bodnar(5) | 94,800 | 31,600 | 9.18 | 10/24/2016 | ||||||||||||
| 22,120 | 22,120 | 15.81 | 07/18/2017 | |||||||||||||
| 50,000 | 150,000 | 14.06 | (6) | 03/24/2018 | ||||||||||||
| 6,250 | 18,750 | 13.44 | 09/09/2018 | |||||||||||||
| — | 40,000 | 9.75 | 06/17/2019 | |||||||||||||
| — | 30,000 | 14.41 | 09/09/2019 | |||||||||||||
| Robert S. Guttman(7) | 31,600 | 31,600 | 18.00 | 10/24/2017 | ||||||||||||
| 5,000 | 15,000 | 13.44 | 09/09/2018 | |||||||||||||
| — | 20,000 | 6.29 | 03/24/2019 | |||||||||||||
| — | 20,000 | 14.41 | 09/09/2019 | |||||||||||||
| Wayne D. L’Heureux(8) | 84,800 | — | 2.62 | 10/26/2014 | ||||||||||||
| 15,800 | — | 3.33 | 10/25/2015 | |||||||||||||
| 11,850 | 3,950 | 9.18 | 10/24/2016 | |||||||||||||
| 3,160 | — | 9.18 | 10/24/2016 | |||||||||||||
| 7,900 | 7,900 | 15.81 | 07/18/2017 | |||||||||||||
| 25,000 | 75,000 | 14.06 | 03/24/2018 | |||||||||||||
| 5,000 | 15,000 | 13.44 | 09/09/2018 | |||||||||||||
| — | 20,000 | 14.41 | 09/09/2019 | |||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||
| Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price Per Share ($) | Option Expiration Date | Number of Shares of Stock that have not Vested | Market Value of Shares that have not Vested | |||||||||||||||||||
Chuck Rubin (1) | 130,279 | 79,682 | 22.82 | 5/10/2020 | ||||||||||||||||||||
| 12,500 | 37,500 | 69.96 | 9/13/2021 | |||||||||||||||||||||
| — | 32,939 | 86.06 | 5/10/2022 | 2,964 | 255,082 | |||||||||||||||||||
Scott M. Settersten (2) | — | 750 | 14.41 | 9/9/2019 | ||||||||||||||||||||
| — | 12,500 | 24.53 | 6/14/2020 | |||||||||||||||||||||
| 1,250 | 3,750 | 69.96 | 9/13/2021 | |||||||||||||||||||||
| — | 1,348 | 86.06 | 5/10/2022 | 1,264 | 108,780 | |||||||||||||||||||
Bruce L. Hartman (3) | — | — | — | — | — | — | ||||||||||||||||||
Gregg R. Bodnar (4) | — | — | — | — | — | — | ||||||||||||||||||
Robert S. Guttman (5) | 10,000 | 5,000 | 6.29 | 3/24/2019 | ||||||||||||||||||||
| 14,907 | 5,000 | 14.41 | 9/9/2019 | |||||||||||||||||||||
| 8,545 | 9,000 | 26.71 | 9/8/2020 | |||||||||||||||||||||
| 2,500 | 7,500 | 69.96 | 9/13/2021 | |||||||||||||||||||||
| — | 3,624 | 86.06 | 5/10/2022 | 1,361 | 117,128 | |||||||||||||||||||
| (1) | Mr. Rubin’s options with an Option Expiration Date of 5/10/2020 vest 25% on |
options with an Option Expiration Date of 5/10/2022 vest 25% on March 23, 2013 and each anniversary of | ||
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Mr. Settersten’s options with an Option Expiration Date of | ||
| (3) | All of Mr. Hartman’s unexercisable options and unvested stock awards were canceled upon his resignation on October 18, 2012. |
All of Mr. Bodnar’s unexercisable options and unvested stock awards were canceled upon his last day of service on September 29, 2012. |
| (5) | Mr. |
OPTION EXERCISESAND STOCK VESTED
| Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise | Value Realized on Exercise ($) (1) | Number of Shares Acquired on Vesting | Value Realized on Vesting ($) | ||||||||||||
Chuck Rubin | 104,382 | 7,840,903 | — | — | ||||||||||||
Scott M. Settersten | 19,750 | 1,571,913 | — | — | ||||||||||||
Bruce L. Hartman | — | — | — | — | ||||||||||||
Gregg R. Bodnar | 227,075 | 18,418,865 | — | — | ||||||||||||
Robert S. Guttman | 41,348 | 3,366,885 | — | — | ||||||||||||
| (1) | The value realized on exercise of options is based on the closing sales price of our common stock on the date of exercise as reported on the NASDAQ Global Select Market less the aggregate exercise price. The value realized was determined without considering any taxes that may have been owed or withheld. |
2009 Non-qualified Deferred Compensation2012 NON-QUALIFIED DEFERRED COMPENSATION
The table below sets forth certain information as of January 30, 2010February 2, 2013 with respect to the non-qualified deferred compensation plans in which our named executive officersNEOs may participate.
| Executive | ||||||||||||||||
| Contributions in | Aggregate | Aggregate Balance | ||||||||||||||
| Last Fiscal | Aggregate Earnings | Withdrawals/ | at Last Fiscal Year | |||||||||||||
| Name | Year(1)(2) | in Last Fiscal Year | Distributions | End | ||||||||||||
| Robert S. Guttman | $ | 135,338 | — | — | $ | 135,338 | ||||||||||
| Wayne D. L’Heureux | $ | 58,301 | $ | (237 | ) | — | $ | 58,504 | ||||||||
Name | Executive Contributions in Last Fiscal Year (1)(2) | Aggregate Earnings in Last Fiscal Year | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last Fiscal Year End (3) | ||||||||||||
Scott M. Settersten | $ | 24,104 | $ | 4,381 | $ | — | $ | 49,247 | ||||||||
Robert S. Guttman | $ | — | $ | 20,771 | $ | — | $ | 221,811 | ||||||||
| (1) | Included in the amount listed under the “Salary”, “Bonus” and “Non-Equity Incentive Plan Compensation” columns in the Summary Compensation Table above. | |
| (2) | Contributions include salary and bonus deferrals, including bonuses earned in fiscal |
| (3) | $201,040 was previously reported as compensation to Mr. Guttman in the Summary Compensation Table for prior years. |
The Ulta Nonqualified Deferred Compensation Plan became effective January 1, 2009. Participants mayallows participants to defer up to 75% of their base salary and 100% of their annual cash bonus. We do not match or make any other contributions to the plan. Participants may direct the investment of their contributions to the plan among several mutual funds, similar to those available under our 401(k) plan.
Severance and Changechange in Control Benefitscontrol benefits
Except as described below, in the event that Ms. Kirby’sMr. Guttman’s employment is terminated without cause, or she terminates for “good reason” prior to the later of March 17, 2011 or the date on which we announce our fiscal 2010 earnings, then she will be entitled to the following as severance subject to her providing of a general release of claims:
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32
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| Involuntary | Involuntary | |||||||||||
| Not for Cause | Termination in | |||||||||||
| Termination/ | Death/ | Connection with | ||||||||||
| Name | Good Reason | Disability | Change in Control | |||||||||
| Lynelle P. Kirby | $ | 1,551,756 | $ | 770,000 | $ | 5,863,482 | ||||||
| Gregg R. Bodnar | $ | 175,000 | $ | 0 | $ | 2,025,813 | ||||||
| Robert S. Guttman | $ | 145,142 | $ | 0 | $ | 640,782 | ||||||
| Wayne D. L’Heureux | $ | 143,062 | $ | 0 | $ | 801,492 | ||||||
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Name | Involuntary Not for Cause Termination / Good Reason | Death / Disability | Involuntary Termination in Connection with Change in Control | |||||||||
Scott M. Settersten | $ | 170,668 | $ | 1,217,164 | $ | 1,387,832 | ||||||
Robert S. Guttman | $ | 175,168 | $ | 1,890,576 | $ | 2,065,744 | ||||||
PROPOSAL THREE
The Board of Directors is committed to excellence in governance. As part of that commitment, Ulta is asking stockholders to vote on a resolution to approve the compensation of our named executive officers as disclosed in this Proxy Statement. This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Company and the Board of Directors. However, the Board and the compensation committee value the opinions of the stockholders and will carefully consider the outcome of the vote when making future compensation decisions. In accordance with the results of the non-binding advisory vote at our 2011 Annual Meeting of Stockholders concerning the frequency of an advisory vote on the compensation paid to our named executive officers, this non-binding advisory vote will be held on an annual basis until the Board elects to implement a different frequency, or until the next required non-binding advisory vote on frequency. Following this year’s non-binding advisory vote, the next scheduled advisory vote will take place at the 2014 Annual Meeting of Stockholders.
As described more fully in the Compensation Discussion and Analysis (“CD&A”) section of this Proxy Statement, our executive compensation program is structured to provide compensation opportunities that: (i) reflect the competitive marketplace in which the Company operates; (ii) link annual incentive compensation to Company performance goals that support stockholder value; (iii) focus a significant portion of an executive’s compensation on equity-based incentives to align interests closely with stockholders; and (iv) attract, motivate and retain key executives who are critical to our long-term success. A significant portion of the Company’s executive compensation is performance-based, and we emphasize such incentives to ensure that total compensation reflects our overall success or failure and to motivate executive officers to meet appropriate performance measures.
We believe that the fiscal 2012 compensation of our named executive officers was appropriate and aligned with the Company’s performance. We urge stockholders to read the CD&A section of this Proxy Statement, as well as the Summary Compensation Table and the related tables and disclosures, for a more complete understanding of how our executive compensation policies and procedures operate.
The Company is asking stockholders to approve the following advisory resolution at the 2013 Annual Meeting:
RESOLVED, that the stockholders of Ulta Salon, Cosmetics & Fragrance, Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion thereto.
Because the vote is advisory, it will not be binding upon the Board or the compensation committee. However, the compensation committee will consider the outcome of the vote in determining future compensation policies and decisions.
The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting will be required to approve the advisory resolution on executive compensation. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the stockholders and will have the same effect as negative votes. Broker non-votes will be counted towards a quorum, but will not be counted for any purpose in determining whether this matter has been ratified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL THREE
The following table presents information concerning the beneficial ownership of the shares of our common stock as of April SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT19, 20108, 2013 by
each person we know to be the beneficial owner of 5% or more of our outstanding shares of common stock; | |||
each of our | |||
all of our |
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned by them, subject to community property laws where applicable. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of April 19, 20108, 2013 are deemed to be outstanding and to be beneficially owned by the person holding the options for the purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
The following table lists applicable percentage ownership based on 58,293,39963,670,003 shares of common stock outstanding as of March 25, 2010,28, 2013, as reported in our Annual Report onForm 10-K filed with the SEC on March 31, 2010.April 3, 2013. Unless otherwise indicated, the address for each of the beneficial owners in the table below isc/o Ulta Salon, Cosmetics & Fragrance, Inc., 1000 Remington Blvd., Suite 120, Bolingbrook, IL 60440.
| Number of Shares | Percentage | |||||||
| Name and Address of Beneficial Owner | Beneficially Owned | Beneficially Owned | ||||||
5% stockholders: | ||||||||
| GRP AQ, L.P. and affiliated entities(1) 2121 Avenue of the Stars 31st Floor Los Angeles, California90067-5014 Attn: Steven Dietz | 9,467,321 | 16.2 | % | |||||
| Doublemousse B.V.(2) Boerhaavelaan 22 2713 HX Zoetermeer The Netherlands Attn: Charles Heilbronn | 11,029,471 | 18.9 | % | |||||
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Name and Address of Beneficial Owner | Number of Shares Beneficially Owned | Percentage Beneficially Owned | ||||||
5% stockholders: Wells Fargo & Company (1) 420 Montgomery Street San Francisco, California 94104 | 3,636,699 | 5.7 | % | |||||
Lone Pine Capital LLC (2) Two Greenwich Plaza Greenwich, Connecticut 06830 | 4,235,300 | 6.7 | % | |||||
Name and Address of Beneficial Owner | Number of Shares Beneficially Owned | Percentage Beneficially Owned | ||||||
| NEOs, Directors and nominees: | ||||||||
Scott M. Settersten (3) | 8,792 | * | ||||||
Robert S. Guttman (4) | 65,958 | * | ||||||
Robert F. DiRomualdo | 458,037 | * | ||||||
Dennis K. Eck | 485,113 | * | ||||||
Catherine Halligan | 952 | * | ||||||
Charles Heilbronn (5) | 3,082,922 | 4.8 | % | |||||
Michael R. MacDonald | 447 | * | ||||||
Lorna E. Nagler (6) | 26,560 | * | ||||||
Charles J. Philippin (7) | 136,559 | * | ||||||
Kenneth T. Stevens | 1,559 | * | ||||||
All current Directors and executive officers as a group | 4,266,899 | 6.7 | % | |||||
| Number of Shares | Percentage | |||||||
| Name and Address of Beneficial Owner | Beneficially Owned | Beneficially Owned | ||||||
NEOs, Directors and nominees: | ||||||||
| Lynelle P. Kirby(3) | 2,944,723 | 5.0 | % | |||||
| Gregg R. Bodnar(4) | 247,170 | * | ||||||
| Wayne L’Heureux(5) | 188,510 | * | ||||||
| Robert S. Guttman(6) | 47,600 | * | ||||||
| Hervé J.F. Defforey(7) | 4,357,977 | 7.5 | % | |||||
| Robert F. DiRomualdo | 665,978 | 1.1 | % | |||||
| Dennis K. Eck(8) | 751,424 | 1.3 | % | |||||
| Charles Heilbronn(9) | 11,201,363 | 19.2 | % | |||||
| Steven E. Lebow(10) | 3,770,397 | 6.5 | % | |||||
| Lorna E. Nagler(11) | 4,167 | * | ||||||
| Charles J. Philippin(12) | 87,500 | * | ||||||
| Yves Sisteron(13) | 4,263,440 | 7.3 | % | |||||
| Carl “Chuck” Rubin(14) | 0 | * | ||||||
All current Directors and executive officers as a group (13 persons)(15) | 21,706,764 | 36.3 | % | |||||
| * | ||
Less than 1%. | ||
| (1) | Based solely on the Schedule 13G/A filed by | |
| (2) | Based solely on the Schedule 13G/A filed by | |
| (3) | Includes options to purchase | |
| (4) |
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| Includes options to purchase | ||
Mr. Heilbronn holds |
Includes options to purchase 12,500 shares of common stock exercisable at |
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| (7) | Includes options to purchase 50,000 shares of | |
Total percentage equals the quotient of total holdings over the sum of shares outstanding and the options referenced in |
Section 16(a) of the Exchange Act requires our Directors and executive officers and persons who own more than 10% of a registered class of our equity securities to file reports of beneficial ownership and changes in beneficial ownership with the SEC. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEToIn 2012, due to an administrative error by the Company, which prepares and files Section 16 reports on behalf of its executive officers and Directors, one ownership report on Form 4 was filed late for Michael R. MacDonald, one of our Directors.To our knowledge, based solely on a review of the copies of such forms furnished to us and written representations that no other forms were required during the fiscal year ended January 30, 2010,February 2, 2013, except as noted above, all Section 16(a) filing requirements applicable to our Directors, executive officers and greater than 10% beneficial owners were complied with, except that Lynelle P. Kirby, our Chief Executive Officer and a Director untimely filed one report.38with.
Related party transaction approval policy
Our Board of Directors has adopted written policies and procedures for the approval or ratification of any “related party transaction,” defined as any transaction, arrangement or relationship in which we are a participant, the amount involved exceeds $120,000 and one of our executive officers, Directors, Director nominees, 5% stockholders (or their immediate family members) or any entity with which any of the foregoing persons is an employee, general partner, principal or 5% stockholder, each of whom we refer to as a “related person,” has a direct or indirect interest as set forth in Item 404 ofRegulation S-K. The policy provides that management must present to the audit committee for review and approval each proposed related party transaction (other than related party transactions involving compensation matters, certain ordinary course transactions, transactions involving competitive bids or rates fixed by law, and transactions involving services as a bank depository, transfer agent or similar services). The audit committee must review the relevant facts and circumstances of the transaction, including if the transaction is on terms comparable to those that could be obtained in arms’-length dealings with an unrelated third party and the extent of the related party’s interest in the transaction, take into account the conflicts of interest and corporate opportunity provisions of our codeCode of business conduct,Business Conduct, and either approve or disapprove the related party transaction. If advance approval of a related party transaction requiring the audit committee’s approval is not feasible, the transaction may be preliminarily entered into by management upon prior approval of the transaction by the chairChair of the audit committee subject to ratification of the transaction by the audit committee at its next regularly scheduled meeting. No Director may participate in approval of a related party transaction for which he or she is a related party.
Related party transactions and relationships
Since the beginning of fiscal 2009,2012, we have engaged in the following related party transactions with our Directors, executive officers and holders of 5% or more of our common stock.
Registration rights agreement
Charles Heilbronn, one of our Directors, is Executive Vice President and Secretary, as well as a director, of Chanel, Inc. In fiscal 2009,2012, Chanel, Inc. sold to Ulta approximately $5.4$10.9 million of fragrance on an arms’ length basis pursuant to Chanel’s standard wholesale terms and is expected to continue to sell fragrance to Ulta during fiscal 2010.
392013.
Other Matters
The Board of Directors knows of no other matters that will be presented for consideration at the 2013 Annual Meeting of Stockholders. If any other matters are properly brought before the Annual Meeting, of Stockholders, it is the intention of the persons named on the accompanying Proxy Cardproxy holders, Scott M. Settersten, our Chief Financial Officer, and Robert S. Guttman, our Senior Vice President, General Counsel and Secretary, to vote on such matters in accordance with their best judgment.
Your vote is important that proxies be returned promptly.important. Whether or not you expectplan to attend the Annual Meeting in person, we hope you are requested to complete, date, sign and return the proxy cardwill vote as soon as possible.
| By Order of the Board of Directors |
|
Robert S. Guttman Senior Vice President, General Counsel and Secretary |
April 24, 2013
A COPY OF ULTA’S ANNUAL REPORT TO THE SEC ONFORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 30, 2010,FEBRUARY 2, 2013 IS AVAILABLE WITHOUT CHARGE THROUGH THE INVESTOR RELATIONS SECTION OF OUR WEBSITE ATHTTP://IR.ULTA.COM, AND UPON WRITTEN REQUEST TO: INVESTOR RELATIONS, ULTA SALON, COSMETICS & FRAGRANCE, INC., 1000 REMINGTON BLVD., SUITE 120, BOLINGBROOK, IL 60440.
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ULTA SALON, COSMETICS & FRAGRANCE, INC. 1000 REMINGTON BLVD. SUITE 120 BOLINGBROOK, IL 60440 | VOTE BY INTERNET -www.proxyvote.com | |||||||||||||||||||||||||
| Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on June 5, 2013. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||||||||||||||||||||||||||
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS | ||||||||||||||||||||||||||
| If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. | ||||||||||||||||||||||||||
VOTE BY PHONE - 1-800-690-6903 | ||||||||||||||||||||||||||
| Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on June 5, 2013. Have your proxy card in hand when you call and then follow the instructions. | ||||||||||||||||||||||||||
VOTE BY MAIL | ||||||||||||||||||||||||||
| Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | ||||||||||||||||||||||||||
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M59129-P34534 | KEEP THIS PORTION FOR YOUR RECORDS |
| DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ULTA SALON, COSMETICS & FRAGRANCE, INC. | For All | |||||||||||||||||||||||||||||||||
Withhold All | ||||||||||||||||||||||||||||||||||
For All
Except
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To withhold authority to vote for any individual nominee(s), mark | ||||
| line below. | ||||||||||||||||||||||||||||||||||
| The Board of | ||||||||||||||||||||||||||||||||||
1. | Election of Directors | |||||||||||||||||||||||||||||||||
Nominees | ||||||||||||||||||||||||||||||||||
01) | Charles Heilbronn | |||||
02) | Michael R. MacDonald | |||||
The Board of Directors recommends you vote “FOR” proposals 2 and 3. | For | Against | Abstain | |||||||||||||||||||||||||||||||
2. | Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year 2013, ending February 1, 2014 | |||||||||||||||||||||||||||||||||
3. | Advisory resolution to approve the Company’s executive compensation | |||||||||||||||||||||||||||||||||
Please sign exactly as your | ||||||||||||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||||||||||||||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Proxy Statement and Annual Report on Form 10-K are available atwww.proxyvote.com or at the Investor Relations section of the Company’s website athttp://ir.ulta.com.
M59130-P34534
ULTA SALON, COSMETICS & FRAGRANCE, INC. Annual Meeting of Stockholders June 6, 2013 10:00 AM This proxy is solicited on behalf of the Board of Directors The undersigned hereby appoints Scott M. Settersten and Robert S. Guttman as proxies, with full power of substitution, to represent and vote as designated on the reverse side, all the shares of Common Stock of Ulta Salon, Cosmetics & Fragrance, Inc. held of record by the undersigned on April 8, 2013, at the Annual Meeting of Stockholders to be held at the Company’s headquarters located at 1000 Remington Boulevard, Bolingbrook, IL 60440, on June 6, 2013, or any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. Continued and to be signed on reverse side | ||||||||
