SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
the Securities Exchange Act of 1934 (Amendment No. )
901 S. Central ExpresswayRichardson, Texas 75080
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To the Stockholders of Fossil Group, Inc.:
NOTICE IS HEREBY GIVEN that the
1. To elect eleven (11)A.M. CT
2. To hold
3.
4.
5. To transact any and all other business that may properly come before30, 2023.
attend the meeting virtually.
over the Internet. Alternatively, if you request or receive a paper copy of the proxy materials by mail, you may vote by signing, dating and mailing the proxy card in the envelope provided. Voting in one of these ways will ensure that your shares are represented at the Annual Meeting. Your proxy will be revoked if you request its revocation in the manner provided in the enclosed proxy statement.
Vice President, General Counsel and Corporate Secretary
April 12, 2023
You are cordially invited to attend the meeting. Whether or not you expect to attend the meeting in person, however, you are urged to vote your shares as soon as possible so that your shares of stock may be represented and voted in accordance with your wishes and in order that the presence of a quorum may be assured at the meeting. You may vote your shares via a toll-free telephone number or over the Internet. Alternatively, if you request or receive a paper copy of the proxy materials by mail, you may vote by signing, dating and mailing the proxy card in the envelope provided. Voting in one of these ways will ensure that your shares are represented at the meeting. Your proxy will be returned to you if you are present at the meeting and request its return in the manner provided for revocation of proxies in the enclosed proxy statement.
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April 14, 2016Richardson, Texas
Important notice regarding the availability of proxy materials for the annual meeting to be held on May 25, 2016: Our official Notice of Annual Meeting of Stockholders,The 2023 Proxy Statement and 2022 Annual Report to Stockholders covering the Company's fiscal year ended January 2, 2016 are also available at http://viewproxy.com/fossil/2016/.
4.
5. 30, 2023.
receive a Notice of Internet Availability of Proxy Materials (the "Proxy Notice")Notice containing instructions on how to access and review the proxy materials, including the Annual Meeting Notice, this Proxy Statement and ourthe Annual Report,
| | 2023 PROXY STATEMENT | | | 1 | |
| | 2 | | | WWW.FOSSILGROUP.COM | |
The executive offices of the Company are located at, and the mailing address of the Company is, 901 S. Central Expressway, Richardson, Texas 75080.
This Proxy Statement and form of proxy are being mailed or made available to stockholders on or about April 14, 2016. The accompanying Annual Report covering the Company's fiscal year ended January 2, 2016 does not form any part of the materials for solicitation of proxies.
Management does not intend to present any business at the Annual Meeting for a vote other than the matters set forth in the Annual Meeting Notice and has no information that others will do so. If other matters requiring a vote of the stockholders properly come before the Annual Meeting, it is the intention of the persons named in the accompanying form of proxy to vote the shares represented by the proxies held by them in accordance with applicable law and their judgment on such matters.
The cost of preparing, assembling, posting on the Internet, printing and mailing the Proxy Notice, Annual Meeting Notice, Annual Report, this Proxy Statement, and the form of proxy, as well as the reasonable costs of forwarding solicitation materials to the beneficial owners of shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), and other costs of solicitation, will be borne by the Company. Officers and employees of the Company may solicit proxies, either through personal contact or by mail, telephone or other electronic means. These officers and employees will not receive additional compensation for soliciting proxies, but will be reimbursed for out-of-pocket expenses. The Company may retain a third party proxy solicitor in connection with soliciting proxies and will pay all expenses related thereto if it hires a proxy solicitor. Brokerage houses and other custodians, nominees, and fiduciaries, with shares of Common Stock registered in their names, will be requested to forward solicitation materials to the beneficial owners of such shares of Common Stock.
With respect to eligible stockholders who share a single address, we are sending only one Proxy Statement, Annual Report or Proxy Notice to that address unless we received instructions to the contrary from any stockholder at that address. This practice, known as "householding," is designed to reduce our printing and postage costs. However, if a stockholder of record residing at such address wishes to receive a separate Proxy Statement, Annual Report or Proxy Notice in the future, he or she may contact Investor Relations, Fossil Group, Inc., 901 S. Central Expressway, Richardson, Texas 75080 or call (972) 234-2525 and ask for Investor Relations. Eligible stockholders of record receiving multiple copies of our Proxy Statement, Annual Report or Proxy Notice can request householding by contacting us in the same manner. Stockholders who own shares through a bank, broker or other nominee can request householding by contacting the nominee.
We hereby undertake to deliver promptly, upon written or oral request, a copy of the Proxy Statement or Proxy Notice to a stockholder at a shared address to which a single copy of the document was delivered. Requests should be directed to the address or phone number set forth above.
The record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting is the close of business on March 30, 2016 (the "Record Date"). On the Record Date, there were 48,135,192 shares of Common Stock issued and outstanding.
Each holder of Common Stock is entitled to one vote per share on all matters to be acted upon at the meeting and neither the Company's Third Amended and Restated Certificate of Incorporation, as amended (the "Charter"), nor its Fourth Amended and Restated Bylaws, as amended (the "Bylaws"), allow for cumulative voting rights. The presence, in person or by proxy, of the holders of a majority of the issued and outstanding shares of Common Stock entitled to vote at the Annual Meeting is necessary to constitute a quorum to transact business. If a quorum is not present or represented at the Annual Meeting, the stockholders entitled to vote thereat, present in person or by proxy, may adjourn the Annual Meeting from time to time without notice or other announcement until a quorum is present or represented.
Assuming the presence of a quorum, in an uncontested election of directors, the affirmative vote of the holders of a majority of the votes cast at the Annual Meeting is required for the election of directors (Proposal 1). A "majority of the votes cast" means that the number of shares voted "for" a director must exceed the number of votes cast "against" that director. Votes cast shall exclude abstentions with respect to that director's election. Pursuant to the Company's Corporate Governance Guidelines, in an uncontested election of directors, any nominee for director who has a greater number of votes "against" his or her election than votes "for" such election (a "Majority Against Vote") is required to promptly tender his or her resignation following certification of the stockholder vote. The Nominating and Corporate Governance Committee will recommend to the Board of Directors whether to accept such resignation; however, if each member of the Nominating and Corporate Governance Committee received a Majority Against Vote at the same election, then the independent directors who did not receive a Majority Against Vote shall appoint a committee among themselves and recommend to the Board of Directors whether to accept such resignations. The Board of Directors will act upon such recommendation(s) within 90 days following certification of the stockholder vote.
Assuming the presence of a quorum, the affirmative vote of the holders of a majority of the shares of Common Stock present, in person or by proxy, and entitled to vote on Proposals 2, 3 and 4 is required to approve the compensation of the Company's named executive officers, to approve the Fossil Group, Inc. 2016 Long-Term Incentive Plan and to ratify the appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm. An automated system administered by an independent third party tabulates the votes. Each proposal is tabulated separately. Abstentions and broker non-votes are each included in the determination of the number of shares present for determining a quorum. Abstentions will have the effect of a vote against Proposals 2, 3 and 4. Abstentions will have no effect with respect to Proposal 1. Broker non-votes will have no effect with respect to Proposals 1, 2 and 3 and are inapplicable to Proposal 4.
You may vote by proxy or in person at the Annual Meeting. We suggest that you vote by proxy even if you plan to attend the meeting. If you are the stockholder of record, you can vote by proxy via a toll-free telephone number, over the Internet or by mail. Please refer to your Proxy Notice or the proxy card included with these proxy materials for instructions on how to access an electronic proxy card to vote on the Internet, vote by telephone, or to receive a paper copy of the proxy materials to vote by mail.
If you are not the record holder of your shares of Common Stock, please follow the instructions provided by your broker, bank or other nominee.
Any stockholder of the Company giving a proxy may revoke the proxy at any time before its exercise by voting in person at the Annual Meeting, by submitting a duly executed proxy bearing a later date by telephone, via the Internet or by mail or by giving written notice of revocation to the Company addressed to Randy S. Hyne, Vice President, General Counsel and Secretary, Fossil Group, Inc., 901 S. Central Expressway, Richardson, Texas 75080. No such revocation shall be effective, however, unless the notice of revocation has been received by the Company at or prior to the Annual Meeting.
To obtain directions to attend the Annual Meeting and vote in person, please contact Investor Relations at (972) 234-2525.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company's only outstanding class of equity securities is its Common Stock. The following table sets forth information regarding the beneficial ownership of Common Stock as of March 30, 2016 by (i) each Named Executive Officer (as defined in "Compensation Discussion and Analysis"); (ii) each director and director nominee of the Company; (iii) all present executive officers and directors of the Company as a group; and (iv) each other person known to the Company to own beneficially more than five percent (5%) of the Common Stock as of March 30, 2016. The address of each officer and director is c/o Fossil Group, Inc., 901 S. Central Expressway, Richardson, Texas 75080.
| | Shares Beneficially Owned(1)(2) | ||||||
|---|---|---|---|---|---|---|---|
Name of Beneficial Owner | Number | Percent | |||||
Darren E. Hart | 7,324 | * | |||||
Kosta N. Kartsotis | 6,021,118 | (3) | 12.5 | % | |||
Greg A. McKelvey | 3,804 | (4) | * | ||||
Dennis R. Secor | 8,245 | * | |||||
John A. White | 5,577 | * | |||||
Elaine B. Agather | 4,853 | (5) | * | ||||
Jeffrey N. Boyer | 11,237 | (6) | * | ||||
William B. Chiasson | 3,680 | (7) | * | ||||
Mauria A. Finley | 1,231 | (8) | * | ||||
Diane L. Neal | 5,918 | (9) | * | ||||
Thomas M. Nealon | 5,767 | (10) | * | ||||
Mark D. Quick | 32,588 | (11) | * | ||||
Elysia Holt Ragusa | 9,532 | (12) | * | ||||
Jal S. Shroff | 458,722 | (13) | * | ||||
James E. Skinner | 31,637 | (14) | * | ||||
James M. Zimmerman | 19,987 | (15) | * | ||||
All executive officers and directors as a group (18 persons) | 6,654,700 | (16) | 13.8 | % | |||
BlackRock, Inc. | 2,529,331 | (17) | 5.3 | % | |||
Eminence Capital, LP | 2,657,482 | (18) | 5.5 | % | |||
FMR, LLC | 7,217,560 | (19) | 15.0 | % | |||
The Bank of New York Mellon Corporation | 2,741,893 | (20) | 5.7 | % | |||
The Vanguard Group | 3,418,749 | (21) | 7.1 | % | |||
Vulcan Value Partners, LLC | 11,000,426 | (22) | 22.9 | % | |||
*Less than 1%(1)Beneficial ownership as reported in the above table has been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Beneficial ownership information is based on the most recent Forms 3, 4 and 5 and Schedule 13D and 13G filings with the SEC and reports made directly to the
Company. For purposes of this table, a person is deemed to have "beneficial ownership" of any shares when such person has the right to acquire them within 60 days after March 30, 2016. For restricted stock units, we report shares equal to the number of restricted stock units that will vest within 60 days of March 30, 2016. For stock appreciation rights ("SARs"), we report the shares that would be delivered upon exercise of SARs that are vested or that will vest within 60 days of March 30, 2016 (which is calculated by (i) multiplying the number of SARs by the difference between (x) the $44.05 closing price of our Common Stock on the Nasdaq Global Select Market on March 30, 2016 and (y) the exercise price of the applicable SAR and (ii) dividing by $44.05). For stock options, we report shares subject to options that are currently exercisable or exercisable within 60 days of March 30, 2016. Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them.
(2)The percentages indicated are based on 48,135,192 shares of Common Stock outstanding on March 30, 2016. Shares of Common Stock subject to stock options and SARs exercisable, and restricted stock units that will vest, within 60 days after March 30, 2016, are deemed outstanding for computing the percentage of the person or entity holding such securities but are not outstanding for computing the percentage of any other person or entity.(3)Includes 820,000 shares of Common Stock in grantor retained annuity trusts.(4)Includes 347 shares of Common Stock issuable upon vesting of restricted stock units.(5)Includes 1,664 shares of Common Stock issuable upon vesting of restricted stock units.(6)Includes 1,664 shares of Common Stock issuable upon vesting of restricted stock units.(7)Includes 1,664 shares of Common Stock issuable upon vesting of restricted stock units.(8)Includes 1,231 shares of Common Stock issuable upon vesting of restricted stock units.(9)Includes 1,664 shares of Common Stock issuable upon vesting of restricted stock units.(10)Includes 1,664 shares of Common Stock issuable upon vesting of restricted stock units.(11)Includes 9,413 shares of Common Stock issuable upon exercise of SARs and 1,664 shares of Common Stock issuable upon vesting of restricted stock units.(12)Includes 1,664 shares of Common Stock issuable upon vesting of restricted stock units.(13)Includes indirect ownership of 457,058 shares of Common Stock owned of record by Healing Light Limited, an entity controlled by Mr. Shroff. Mr. Shroff and his wife, Mrs. Pervin Shroff, share voting and investment power with respect to 457,058 shares of Common Stock. Includes 1,664 shares of Common Stock issuable upon vesting of restricted stock units.(14)Includes 15,000 shares of Common Stock issuable upon exercise of stock options and 1,664 shares of Common Stock issuable upon vesting of restricted stock units.(15)Includes 6,750 shares of Common Stock issuable upon exercise of stock options and 1,664 shares of Common Stock issuable upon vesting of restricted stock units.(16)Reflects the information in footnotes (3) through (14) above and an additional 23,480 shares of Common Stock beneficially owned by executive officers not named in the table above.
(17)Based on information contained in Amendment No. 1 to Schedule 13G filed with the SEC on January 26, 2016 by BlackRock, Inc. ("BlackRock"), which indicates that (i) BlackRock has sole voting power over 2,190,275 shares of Common Stock and sole dispositive power over 2,529,331 shares of Common Stock. The address of BlackRock is 55 East 52nd Street, New York, New York 10055.(18)Based on information contained in Amendment No. 2 to Schedule 13G filed with the SEC on February 16, 2016 by Eminence Capital, LP ("Eminence Capital"), which indicates that (i) Eminence Capital has shared voting power over 2,657,482 shares of Common Stock and shared dispositive power over 2,657,482 shares of Common Stock, and (ii) Eminence GP, LLC ("Eminence GP") has shared voting power over 2,365,864 shares of Common Stock and shared dispositive power over 2,365,864 shares of Common Stock, and (iii) Ricky C. Sandler ("Mr. Sandler") has sole voting power over 1,777 shares of Common Stock, shared voting power over 2,657,482 shares of Common Stock, sole dispositive power over 1,777 shares of Common Stock, and shared dispositive power over 2,657,482 shares of Common Stock. The address of the principal business and principal office of Eminence Capital and Eminence GP is 65 East 55th Street, 25th Floor, New York, New York 10022. The business address of Mr. Sandler is 65 East 55th Street, 25th Floor, New York, New York 10022.(19)Based on information contained in Amendment No. 3 to Schedule 13G filed with the SEC on February 12, 2016 by FMR LLC ("FMR"), which indicates that (i) FMR has sole voting power over 1,646,660 shares of Common Stock and sole dispositive power over 7,217,560 shares of Common Stock, and (ii) Abigail P. Johnson has sole dispositive power over 7,217,560 shares of Common Stock, and (iii) Fidelity Low-Priced Stock Fund has sole voting power over 4,150,000 shares of Common Stock. The address of FMR is 245 Summer Street, Boston, Massachusetts 02210.(20)Based on information contained in Schedule 13G filed with the SEC on January 26, 2016 by The Bank of New York Mellon Corporation ("BONY") which indicates that (i) BONY has sole voting power over 2,660,032 shares of Common Stock and sole dispositive power over 2,736,316 shares of Common Stock, and (ii) MBC Investments Corporation has sole voting power over 2,493,935 shares of Common Stock and sole dispositive power over 2,576,821 shares of Common Stock, and (iii) Mellon Capital Management Corporation has sole voting power over 2,493,935 shares of Common Stock and sole dispositive power over 2,576,821 shares of Common Stock. The address of BONY is 225 Liberty Street, New York, New York 10286.(21)Based on information contained in Amendment No. 3 to Schedule 13G filed with the SEC on February 10, 2016 by The Vanguard Group ("Vanguard"), which indicates that Vanguard has sole voting power over 66,986 shares of Common Stock, shared voting power over 2,300 shares of Common Stock, sole dispositive power over 3,352,063 shares of Common Stock, and shared dispositive power over 66,686 shares of Common Stock. The address of Vanguard is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.(22)Based on information contained in Amendment No. 3 to Schedule 13G filed with the SEC on February 10, 2016 by Vulcan Value Partners, LLC ("Vulcan") which indicates that (i) Vulcan has sole voting power over 10,187,115 shares of Common Stock and sole dispositive power over 11,000,426 shares of Common Stock. The address of Vulcan is Three Protective Center, 2801 Highway 280 South, Suite 300, Birmingham, Alabama 35223.
PROPOSAL 1: ELECTION OF DIRECTORS(Proposal 1)
Meeting.
Directors and Nominees
| | | NAME | | | | AGE | | | | POSITION | | | | TENURE (YEARS)* | | |
| | | Mark R. Belgya | | | | 62 | | | | Director | | | | 5 | | |
| | | William B. Chiasson | | | | 70 | | | | Director | | | | 10 | | |
| | | Susie Coulter | | | | 57 | | | | Director | | | | 0.5 | | |
| | | Kim Harris Jones | | | | 63 | | | | Director | | | | 3.5 | | |
| | | Kosta N. Kartsotis | | | | 70 | | | | Chairman of the Board and Chief Executive Officer | | | | 33 | | |
| | | Kevin Mansell | | | | 70 | | | | Lead Independent Director | | | | 4 | | |
| | | Marc R. Y. Rey | | | | 59 | | | | Director | | | | 3 | | |
| | | Gail B. Tifford | | | | 53 | | | | Director | | | | 6 | | |
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Elaine B. Agather
Jeffrey N. Boyer was appointed to the Board of Directors in December 2007. Mr. Boyer currently serves as Chairman of the Company's Finance Committee, and he is a member of the Audit Committee. Mr. Boyer has served as Executive Vice President and Chief Financial Officer for Pier 1 Imports, Inc. since June 2015. Prior to joining Pier I Imports, Mr. Boyer served as Executive Vice President, Chief Administrative Officer and Chief Financial Officer for Tuesday Morning Corporation from September 2013 until June 2015. Mr. Boyer served as Executive Vice President and Chief Operating Officer of 24 Hour Fitness Worldwide Holdings, Inc., an operator of fitness centers, from
June 2012 until September 2013 and as their Executive Vice President and Chief Financial Officer from April 2008 until June 2012. Mr. Boyer served as PresidentChair and Chief Financial Officer of Michaels Stores, Inc. (Michaels)The J.M. Smucker Company (NYSE: SJM), a leading manufacturer and distributor of consumer food, beverage, and pet food products (“Smucker”), from July 2007May 2016 until April 2008his retirement in September 2020. Mr. Belgya joined Smucker in an internal audit capacity in 1985 and Co-Presidentrose through finance positions of increasing responsibility becoming Corporate Controller in 1997, Treasurer in 2001, and Chief Financial Officer from March 2006 to July 2007. He also held the position of Executive Vice President and Chief Financial Officer of Michaels from January 2003 to March 2006.in 2005. Prior to joining Michaels,Smucker, Mr. Boyer servedBelgya was a staff auditor from 1982 until 1985 for
| | 2023 PROXY STATEMENT | | | 3 | |
Mauria A. Finley
| | 4 | | | WWW.FOSSILGROUP.COM | |
Kosta N. Kartsotis
Diane L. Neal
Thomas M. Nealonhas over 40 years of retail experience.
| | 2023 PROXY STATEMENT | | | 5 | |
Mark D. Quick was appointed to the Board of Directors in October 2012, and had most recentlyMs. Tifford served as Vice ChairmanPresident for Strategic Partnerships at MTV Networks, a cable and satellite television channel owned by Viacom Media Networks. Ms. Tifford has substantial experience in branding and marketing and a proven track record of building brands in an evolving digital landscape.
| | 6 | | | WWW.FOSSILGROUP.COM | |
Elysia Holt Ragusa was appointed to the Board of Directors of the Company in December 2007. Ms. Ragusa is a member of the Compensation Committee and the Nominating and Corporate
Governance Committee. She currently serves as a Senior Managing Director and International Director for Jones Lang LaSalle, which provides integrated real estate and investment management services to owner, occupier and investor clients worldwide, subsequent to the merger between Jones Lang LaSalle and The Staubach Company in 2008. Prior to the merger of Jones Lang LaSalle and The Staubach Company, she served as President, Corporate Services-East Staubach Holdings, Inc., overseeing all Staubach North American Corporate Services Operations from Phoenix to Boston and was a member of both the Executive Committee and The Staubach Company's Board of Directors. Ms. Ragusa served as President and Chief Operating Officer of The Staubach Company from July 2001 until June 2007. Prior to her role as President and Chief Operating Officer, Ms. Ragusa was President of The Staubach Company's Southwest Corporate Services Division. In January 2010, Ms. Ragusa was appointed to the Board of Directors of Texas Capital Bancshares, Inc. Ms. Ragusa has extensive experience in leading large organizations with special skills in operations, marketing, sales and developing people. She also has experience in commercial real estate acquisition and disposition.
James E. Skinner was appointed to the Board of Directors of the Company in December 2007. Mr. Skinner is currently Chairman of the Compensation Committee and he is a member of the Finance Committee. Mr. Skinner served as Vice Chairman of Neiman Marcus Group from July 2015 until his retirement in February 2016. From October 2010 until July 2015, he served as Executive Vice President, Chief Operating Officer and Chief Financial Officer of Neiman Marcus Group and, from 2007 to 2010, served as Executive Vice President and Chief Financial Officer. From 2001 until 2007, he held the position of Senior Vice President and Chief Financial Officer of Neiman Marcus Group. Mr. Skinner served as Senior Vice President and Chief Financial Officer of CapRock Communications Corp. in 2000. From 1991 until 2000, Mr. Skinner served in several positions with CompUSA Inc., including Executive Vice President and Chief Financial Officer beginning in 1994. Mr. Skinner also served as a partner with Ernst & Young from 1987 until 1991. Mr. Skinner has extensive leadership experience as Chief Financial Officer of large organizations and experience in accounting, finance, capital markets, strategic planning and risk management developed through his Chief Financial Officer and public accounting experience.
James M. Zimmerman was appointed to the Board of Directors of the Company in September 2007. Mr. Zimmerman is currently the Lead Independent Director and is also a member of the Finance Committee and Nominating and Corporate Governance Committee. He has served as a member of the Board of Directors of The Chubb Corporation since June 2008. Mr. Zimmerman retired from Federated Department Stores (Macy's) in February 2004 after serving for the previous six years as Chairman and Chief Executive Officer, and prior to that as President and Chief Operating Officer beginning in May 1988. Mr. Zimmerman has extensive executive experience in leading a large retail company and strong skills in retail operations, strategic planning and public company executive compensation. He also brings insights to our Board from his service on other public company boards.
Unless otherwise directed in the proxy, it is the intention of the persons named in the proxy to vote the shares represented by such proxy for the election of each of the director nominees. Each of the director nominees is presently a director of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THEELECTION OF EACH DIRECTOR NOMINEE ABOVE FOR THE BOARD OF DIRECTORS.
Board Committees and Meetings
The Board of Directors held 9 meetings during the fiscal year ended January 2, 2016. During 2015, each director attended 75% or more of the aggregate of the meetings of the Board of Directors and the meetings held by all committees of the Board on which such director served, except Mr. Jal S. Shroff. In addition, the Board of Directors holds regularly scheduled calls each fiscal quarter to review the Company's fiscal quarter earnings releases. The Board of Directors strongly encourages that
directors make a reasonable effort to attend the Company's Annual Meeting. All of the then current members of the Board of Directors attended the Company's 2015 Annual Meeting of Stockholders, except Ms. Neal who was unable to attend due to personal reasons.
The Board of Directors has established four standing committees: the Audit Committee, the Compensation Committee, the Finance Committee and the Nominating and Corporate Governance Committee. Each of these committees has a written charter approved by the Board. Copies of the charters can be obtained free of charge from the Company's web site,www.fossilgroup.com, by contacting the Company at the address appearing on the first page of this Proxy Statement to the attention of Investor Relations, or by telephone at (972) 234-2525.
The committees on which the directors serve as of March 30, 2016 and the number of committee meetings held in fiscal 2015 are shown in the chart below.
Director | Audit Committee | Compensation Committee | Finance Committee | Nominating and Corporate Governance Committee | ||||
|---|---|---|---|---|---|---|---|---|
Elaine B. Agather | X | X | ||||||
Jeffrey N. Boyer | X | X (Chairperson) | ||||||
William B. Chiasson | X (Chairperson) | X | ||||||
Mauria A. Finley | X | |||||||
Diane L. Neal | X | X (Chairperson) | ||||||
Thomas M. Nealon | X | X | ||||||
Elysia Holt Ragusa | X | X | ||||||
James E. Skinner | X (Chairperson) | X | ||||||
James M. Zimmerman | X | X | ||||||
Number of Committee Meetings in fiscal 2015: | 9 | 8 | 8 | 4 |
Audit Committee. The functions of the Audit Committee are to:
•appoint the Company's independent registered public accounting firm;•review the plan and scope of any audit of the Company's consolidated financial statements;•review the Company's significant accounting policies and other related matters;•review the Company's annual and quarterly reports and earnings releases;•oversee the surveillance of administration, disclosure and financial controls;•oversee the Company's compliance with legal and regulatory requirements;•oversee the Company's monitoring and enforcement of its Code of Conduct and Ethics;•review the qualifications and independence of any independent auditor of the Company; and•oversee the performance of the Company's internal audit function and the Company's independent auditors.
Deloitte & Touche LLP, the Company's principal independent registered public accounting firm, reports directly to the Audit Committee. The Audit Committee, consistent with the Sarbanes-Oxley Act of 2002 and the rules adopted thereunder, meets with management and the Company's independent registered public accounting firm prior to the filing of officers' certifications with the SEC to receive information concerning, among other things, significant deficiencies in the design or operation of internal control over financial reporting. The Audit Committee has adopted a procedure that enables confidential and anonymous reporting to the Audit Committee of concerns regarding questionable
accounting or auditing matters. The Company's internal audit group reports directly to the Audit Committee on a quarterly basis.
All members of the Audit Committee have been determined to be financially literate and to meet the appropriate Nasdaq and SEC standards for independence. See "Corporate Governance—Director Independence." The Audit Committee includes two independent directors, Messrs. Boyer and Chiasson, who have been determined by the Board of Directors to meet the qualifications of an "audit committee financial expert" in accordance with SEC rules.
Compensation Committee. The functions of the Compensation Committee are to:
•determine the compensation of the Company's executives;•produce annual reports on executive compensation for inclusion in the Company's proxy statement; and•oversee and advise the Board of Directors on the adoption of policies that govern, and to administer, the Company's compensation programs, including stock and benefit plans.
All members of the Compensation Committee have been determined to meet the appropriate Nasdaq standards for independence. See "Corporate Governance—Director Independence." Further, each member of the Compensation Committee is a "Non-Employee Director" as defined in Rule 16b-3 under the Exchange Act and an "outside director" as defined for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
Finance Committee. The functions of the Finance Committee are to oversee all areas of corporate finance for the Company, including capital structure, equity and debt financings, capital expenditures, cash management, banking activities and relationships, investments, foreign exchange activities, and share repurchase activities. All members of the Finance Committee have been determined to meet the Nasdaq standards for independence. See "Corporate Governance—Director Independence."
Nominating and Corporate Governance Committee. The functions of the Nominating and Corporate Governance Committee are to:
•identify qualified individuals for membership on the Board of Directors;•recommend to the Board of Directors the director nominees for the next annual meeting of stockholders;•review the Company's corporate governance guidelines on an annual basis and recommend to the Board any changes deemed necessary or desirable; and•oversee the corporate governance affairs of the Board of Directors and the Company.
The Nominating and Corporate Governance Committee's role includes periodically reviewing the compensation paid to non-employee directors and making recommendations to the Board for any adjustments. In addition, the Nominating and Corporate Governance Committee conducts an annual review of the Company's succession plans relating to the Chairman and Chief Executive Officer positions.stockholders. The Nominating and Corporate Governance Committee regularly reviewsmakes recommendations to the purposesBoard concerning the composition of the Board and its committees, recommends to the Board of Directors any necessary or desired changes to the purposes of such committeesincluding size and whether any committees should be created or discontinued. All members of thequalifications for membership. The Nominating and Corporate Governance Committee have been determined to meetevaluates prospective nominees against the Nasdaq standards for independence. See "Corporate Governance—Director Independence."
Risk Oversight
The Board of Directors takes an active role in overseeing management of the Company's risks through its review of risks associated with our operations and strategic initiatives and through each of the Board committees. As part of its oversight, the Board of Directors receives and reviews regular reports from members of senior management, including our Chief Risk Officer, who oversees our enterprise risk management program. Risk assessment results and mitigation plans for significant enterprise risks, such as financial, operational, security and cybersecurity, business continuity, legal and regulatory risks, are developed and monitored by management, including management "risk owners". Significant enterprise risks and mitigation plans are also regularly reviewed by the Company's Executive Risk Committee. The Board implements its risk oversight function both as a whole and through committees, which play a significant role in carrying out risk oversight. Our full Board reviews information concerning enterprise risks through regular reports of each Board committee, including information regarding financial reporting, accounting, cybersecurity and internal audit risk matters from the Audit Committee, corporate financial risk management from the Finance Committee, compensation-related risk from the Compensation Committee and governance-related risk from the Nominating and Corporate Governance Committee. In addition, our Audit, Compensation, Finance and Nominating and Corporate Governance Committees are comprised solely of independent directors and have responsibility for the review of certain risks as defined in their governing documents.
Report of the Audit Committee
The following report shall not be deemed to be "soliciting material" or to be "filed with the SEC" or subject to the liabilities of Section 18 of the Exchange Act nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference in such filing.
The role of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities related to the integrity of the Company's financial statements, the Company's internal control over financial reporting, the Company's compliance with legal and regulatory requirements, the qualifications and independence of the Company's independent registered public accounting firm, audit of the Company's financial statements, and performance of the Company's internal audit function and the Company's independent registered public accounting firm. The Audit Committee has the sole authority and responsibility to select, evaluate and, when appropriate, replace the Company's independent registered public accounting firm.
Management of the Company has the responsibility for the preparation, presentation and integrity of the Company's consolidated financial statements, for the appropriateness of the accounting principles and reporting policies that are used by the Company and for the establishment and maintenance of systems of disclosure controls and procedures and internal control over financial reporting. The Company's independent registered public accounting firm, Deloitte & Touche, LLP, is responsible for auditing the Company's consolidated financial statements and expressing an opinion on the fair presentation of those financial statements in conformity with accounting principles generally accepted in the United States, performing reviews of the unaudited quarterly financial statements and auditing and expressing an opinion on the effectiveness of the Company's internal control over financial reporting. In performing its functions, the Audit Committee acts only in an oversight capacity and necessarily relies on the work and assurances of the Company's management, internal audit group and independent registered public accounting firm.
During fiscal 2015, the Audit Committee met and held discussions with management, the internal auditor and the independent registered public accounting firm and met independently as a committee. Management represented to the Audit Committee that the Company's consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States. The
Audit Committee has reviewed and discussed the consolidated financial statements as of and for the fiscal year ended January 2, 2016 with management and the independent registered public accounting firm. These discussions included a review of the reasonableness of significant judgments, the quality, not just acceptability, of the Company's accounting principles, and such other matters as are required to be discussed with the Audit Committee under Auditing Standard No. 16, "Communications with Audit Committees." In addition, the Audit Committee reviewed and discussed with management and the independent registered public accounting firm the adequacy and effectiveness of the Company's financial reporting procedures, disclosure controls and procedures, and internal control over financial reporting, including the respective reports of management and the independent registered public accounting firm on the effectiveness of the Company's internal control over financial reporting. The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm its independence from the Company. The Audit Committee has concluded that the independent registered public accounting firm's provision of audit and non-audit services to the Company and its subsidiaries is compatible with the independent registered public accounting firm's independence.
Based on the Audit Committee's discussions with management, the Company's internal auditors and Deloitte & Touche LLP, and the Audit Committee's review of the audited financial statements, including the representations of management and Deloitte & Touche LLP with respect thereto, and subject in all cases to the limitations on the role and responsibilities of the Audit Committee referred to above and set forth in the Audit Committee Charter,Company’s Corporate Governance Guidelines, as well as other relevant factors it deems appropriate.
| | 2023 PROXY STATEMENT | | | 7 | |
| | | Board Diversity Matrix (As of April 12, 2023) | | | ||||||||||||||||||||||||||||
| | | Total Number of Directors | | | | 8 | | | ||||||||||||||||||||||||
| | | | | | | Female | | | | Male | | | | Non-Binary | | | | Did Not Disclose Gender | | | ||||||||||||
| | | Part I: Gender Identity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Directors | | | | | | 3 | | | | | | | 5 | | | | | | | 0 | | | | | | | 0 | | | |
| | | Part II: Demographic Background | | | ||||||||||||||||||||||||||||
| | | African American or Black | | | | | | 1 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | |
| | | Alaskan Native or Native American | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | |
| | | Asian | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | |
| | | Hispanic or Latinx | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | |
| | | Native Hawaiian or Pacific Islander | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | |
| | | White | | | | | | 2 | | | | | | | 5 | | | | | | | 0 | | | | | | | 0 | | | |
| | | Two or More Races or Ethnicities | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | |
| | | LGBTQ+ | | | | 0 | | | ||||||||||||||||||||||||
| | | Did Not Disclose Demographic Background | | | | 0 | | | ||||||||||||||||||||||||
| | 8 | ||
| | | WWW.FOSSILGROUP.COM | |
Corporate Governance
![[MISSING IMAGE: pc_independence-4c.jpg]](/files/DEF 14A/0001104659-23-044554/pc_independence-4c.jpg)
| | The Board of Directors unanimously recommends that stockholders vote “FOR” the election of each Director Nominee set forth above for the Board of Directors. | |
| | 2023 PROXY STATEMENT | | | 9 | |
Director Independence
| | | DIRECTOR | | | | AUDIT COMMITTEE | | | | COMPENSATION AND TALENT MANAGEMENT COMMITTEE | | | | NOMINATING AND CORPORATE GOVERNANCE COMMITTEE | | |
| | | Mark R. Belgya | | | | C | | | | X | | | | | | |
| | | William B. Chiasson | | | | X | | | | | | | | X | | |
| | | Susie Coulter | | | | | | | | | | | | X | | |
| | | Kim Harris Jones | | | | X | | | | | | | | X | | |
| | | Kosta N. Kartsotis | | | | — | | | | — | | | | — | | |
| | | Kevin Mansell | | | | | | | | C | | | | | | |
| | | Marc R. Y. Rey | | | | | | | | X | | | | | | |
| | | Gail B. Tifford | | | | | | | | | | | | C | | |
| | | Number of Committee Meetings in Fiscal Year 2022 | | | | 9 | | | | 5 | | | | 4 | | |
| | 10 | | | WWW.FOSSILGROUP.COM | |
| | 2023 PROXY STATEMENT | | | 11 | |
adoption, and anyone sharing the director'sdirector’s home) is or was at any time during the past three years an executive officer of the Company, would not be independent; (ii) a director who received, or whose immediate family member received, from the Company compensation of more than $120,000 during any twelve consecutive months within the three years preceding the determination of independence, except for certain permitted payments, would not be independent; (iii) a director who is or who has an immediate family member who is, a current partner of the Company'sCompany’s outside auditor or who was, or who has an immediate family member who was, a partner or employee of the Company'sCompany’s outside auditor who worked on the Company'sCompany’s audit at any time during any of the past three years would not be independent; (iv) a director who is, or whose immediate family member is, employed as an executive officer of another entity where at any time during the past three years any of the Company'sCompany’s executive officers served on the compensation committee would not be independent; and (v) a director who is, or who has an
Board Leadership Structure
CEO.
| | 12 | | | WWW.FOSSILGROUP.COM | |
year 2022.
is met by driving stock price growth.from 2005 through 2022. The Board believes that as a long-term executive officer, director and significant stockholder, Mr. Kartsotis is well qualified to serve as our Chairman and Chief Executive Officer,CEO, and his interests are sufficiently aligned with the Company'sCompany’s stockholders. Mr. Kartsotis has extensive experience and knowledge of the Company and the fashion retailing industry and substantial sales, marketing and merchandising experience. The Board believes the Company has been well-served by this leadership structure and by Mr. Kartsotis'Kartsotis’ service. Mr. Kartsotis is the person with primary responsibility for our day-to-day operations and the execution of our strategies. Since our performance is one of the most important topics at Board meetings, it makes sense for Mr. Kartsotis is well-suited to chair such discussions. This allows him to highlight important issues without unnecessary procedural delay. It also allows him to provide the proper context and background, including access to members of management and Company and industry reports, for each issue considered by the Board. Such background material is important given our size and complexity and the competitive nature of our industry. Mr. Kartsotis'Kartsotis’s extensive knowledge of the Company and involvement with day-to-day activities also helps ensure effective risk oversight for the Company. Mr. Kartsotis adheres to an "open door"“open door” policy in his communications with Board members and talks frequently with Board members. Furthermore, Board members are encouraged to freely communicate with any member of management at any time. The Board also believes it has been beneficial, in terms of its relationship with employees, stockholders, customers, business partners and others, to provide a single voice for the
Director Nomination Policy
| | 2023 PROXY STATEMENT | | | 13 | |
The Board and the Nominating and Corporate Governance Committee aim to assemble a diverse group of Board members and believe that no single criterion such as gender or minority status is determinative in obtaining diversity on the Board. The Board defines diversity as differences of viewpoint, professional experience, education and skills such as a candidate'scandidate’s range of experience serving on other public company boards, the balance of the business interest and experience of the candidate as compared to the incumbent or other nominated directors, and the need for any particular expertise on the Board or one of its committees.
Codes
through committees, which play a significant role in carrying out risk oversight. The Board reviews information concerning enterprise risks through regular reports of each Board committee, including information regarding financial reporting, accounting, cybersecurity, compliance and internal audit risk matters from the Audit Committee, compensation-related risk from the Compensation and Talent Management Committee and environmental, social and governance-related risk from the Nominating and Corporate Governance Committee. In addition, our Audit, Compensation and Talent Management and Nominating and Corporate Governance Committees are comprised solely of independent directors and have responsibility for the review of certain risks as defined in their governing documents. As part of its oversight, the Board receives and reviews regular reports from members of senior management, including our Chief Compliance Officer, who facilitates our Enterprise Risk Management Committee (the “ERM Committee”), comprised of a group of cross-functional executive leaders. The ERM Committee meets on a quarterly basis to review, prioritize, and address mitigation strategies for major risk exposures. The ERM Committee also considers
Self-assessment
Pledging of Company Securities
| | 14 | | | WWW.FOSSILGROUP.COM | |
Communication with
his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the stockholder to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the stockholder may no longer have the same objectives as the Company’s other stockholders. Therefore, under our Insider Trading Policy, directors, officers and employees are prohibited from engaging in any such hedging transactions.
Executive Officers
| | 2023 PROXY STATEMENT | | | 15 | |
Fiscal 2022 Audited Financial Statements
above under
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Randy C. Belcher has served as Executive Vice President, Asia Pacific, since March 2014. Mr. Belcher also served as Senior Vice President, Asia Pacific, from October 2005 to March 2014 and as Senior Vice President Europe from April 2001 to October 2005. Mr. Belcher joined the Company in 2001.
Hans-Peter Gehmacher has served as Executive Vice President, EMEA, since March 2014. Mr. Gehmacher served in various other roles as the head of our European operations from September 2007 until March 2014 and as Managing Director of our German subsidiary from August 1998 until August 2007. Mr. Gehmacher served as Controller and Financial Officer of our German subsidiary from May 1993 to August 1998. Mr. Gehmacher joined the Company in May 1993.
Darren E. Hart has served as Executive Vice President, Human Resources, since June 2011. From 2001 until June 2011, Mr. Hart served in various roles for Limited Brands, an international company that sells personal care and beauty products, apparel and accessories. At Limited Brands, Mr. Hart most recently served as Executive Vice President for Bath & Body Works, a national retailer of personal care products. From 2001 until 2005, Mr. Hart served as Director of Leadership and Organizational Development for Victoria's Secret Stores, a global retailer of intimate apparel, sleepwear, hosiery and other apparel and beauty products. From 2005 until 2006, he served as Vice President of HR for Stores for Limited Brands, and from 2006 until 2007, he served as Senior Vice President of HR for Retail Operations for Limited Brands.
Greg A. McKelvey has served as Executive Vice President, Chief Strategy and Digital Officer since December 2015. Mr. McKelvey joined Fossil Group in February 2012 and served as our Executive Vice President prior to his promotion to Executive Vice President, Chief Strategy and Digital Officer. From 2005 until February 2012, Mr. McKelvey served in several different strategy, marketing and transformation roles at Dean Foods, one of the United States' leading food and beverage companies, including his most recent role as Executive Vice President and Chief Strategy and Transformation Officer. From 2002 until 2005, Mr. McKelvey worked at Bain and Company, a leading global strategy consulting firm, as a Manager in Bain's consumer and private equity practices.
Dennis R. Secor has served as Executive Vice President, Chief Financial Officer and Treasurer since December 2012. From July 2006 until December 2012, Mr. Secor served as Senior Vice President and Chief Financial Officer for Guess?, Inc., a national retailer of contemporary apparel, denim, handbags, watches, footwear and other fashion accessories. From August 2004 until July 2006, Mr. Secor served as Vice President and Chief Financial Officer for Electronic Arts (Canada), Inc., a Canadian video game developer.
John A. White has served as Executive Vice President and Chief Operating Officer since September 2012. From March 2007 until September 2012, Mr. White served in various roles for Pandora, A/S ("Pandora"), a global jewelry company headquartered in Denmark. At Pandora, Mr. White most recently served as President of Pandora North America, a division of Pandora. Prior to joining Pandora, Mr. White served as a Strategy Consultant for the Operations and Supply Chain Strategy and Design Team for Booz -- Allen -- Hamilton from April 2006 until March 2007.
FISCAL 2015 DIRECTOR COMPENSATION TABLE
The following table provides information regarding director compensation during fiscal 2015. Non-employee directors who join the Board duringapproved, that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year receive a pro-rated annual cash retainer.
Name(1)(2) | Fees Earned or Paid in Cash ($)(3)(4) | Stock Awards ($)(5) | Total ($) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
Elaine B. Agather | 85,000 | 129,931 | 214,931 | |||||||
Jeffrey N. Boyer | 101,662 | 129,931 | 231,593 | |||||||
William B. Chiasson | 98,352 | 129,931 | 228,283 | |||||||
Mauria A. Finley | 21,820 | 71,607 | 93,427 | |||||||
Diane L. Neal | 90,014 | 129,931 | 219,945 | |||||||
Thomas M. Nealon | 85,000 | 129,931 | 214,931 | |||||||
Mark D. Quick | 60,000 | 129,931 | 189,931 | |||||||
Elysia Holt Ragusa | 84,986 | 129,931 | 214,917 | |||||||
Jal S. Shroff | 60,000 | 129,931 | 189,931 | |||||||
James E. Skinner | 99,986 | 129,931 | 229,917 | |||||||
James M. Zimmerman | 105,000 | 129,931 | 234,931 | |||||||
ended December 31, 2022.
(1)Mr. Kartsotis was a director and Named Executive Officer during fiscal 2015. Mr. Kartsotis did not receive any additional compensation for services as a director. As such, information about his compensation is listed in the Fiscal 2015, 2014 and 2013 Summary Compensation Table below.(2)Our directors' outstanding equity awards as of fiscal year end 2015 were as follows: Ms. Agather—1,664 restricted stock units; Mr. Boyer—1,664 restricted stock units; Mr. Chiasson—1,664 restricted stock units; Ms. Finley—1,231 restricted stock units; Ms. Neal—1,664 restricted stock units; Mr. Nealon—1,664 restricted stock units; Mr. Quick—1,664 restricted stock units and 8,481 shares of common stock issuable upon the exercise of SARs; Ms. Ragusa—5,000 options and 1,664 restricted stock units; Mr. Shroff—1,664 restricted stock units; Mr. Skinner—15,000 options and 1,664 restricted stock units; and Mr. Zimmerman—6,750 options and 1,664 restricted stock units.(3)Consists of retainer fees.(4)The following amounts included in the fees listed were earned in fiscal 2015, but not paid until fiscal 2016: Ms. Agather—$21,250; Mr. Boyer—$25,000; Mr. Chiasson—$26,250; Ms. Finley—$15,625; Ms. Neal—$23,750; Mr. Nealon—$21,250; Mr. Quick—$15,000; Ms. Ragusa—$20,000; Mr. Shroff—$15,000; Mr. Skinner—$23,750; and Mr. Zimmerman—$26,250.(5)Consists of an award of restricted stock units granted pursuant to the Company's 2008 Long-Term Incentive Plan (the "2008 Incentive Plan") to each director on May 20, 2015. All awards vest 100% on the earlier of (i) the next annual stockholders meeting or (ii) one year from the date of grant. The amounts shown were not actually paid to the directors. Rather, as required by the rules of the SEC, the amounts represent the aggregate grant date fair value of the restricted stock units awarded to each of them in fiscal 2015. These values were determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 ("FASB ASC Topic 718"). The aggregate grant date fair value of the restricted stock units is equal to the midpoint between the high and low sales prices of our Common Stock on the date of grant
Mark R. Belgya, Chair
William B. Chiasson
Kim Harris Jones
| | 16 | | | WWW.FOSSILGROUP.COM | |
multiplied by the number of shares granted. On May 20, 2015, the date of grant, the midpoint of the high and low sales prices of our Common Stock was $78.08 per share. The amounts reported do not include any reduction in the value of the awards for the possibility of forfeiture.
Director Compensation
| | | POSITION | | | | AMOUNT | | | |||
| | | Non-Employee Director | | | | | $ | 60,000 | | | |
| | | Lead Independent Director | | | | | $ | 35,000 | | | |
| | | Audit Committee Chairperson | | | | | $ | 25,000 | | | |
| | | Audit Committee Member | | | | | $ | 15,000 | | | |
| | | Compensation and Talent Management Committee Chairperson | | | | | $ | 20,000 | | | |
| | | Compensation and Talent Management Committee Member | | | | | $ | 10,000 | | | |
| | | Nominating and Corporate Governance Committee Chairperson | | | | | $ | 15,000 | | | |
| | | Nominating and Corporate Governance Committee Member | | | | | $ | 10,000 | | | |
Position | Amount | |||
|---|---|---|---|---|
Non-Employee Director | $ | 60,000 | ||
Lead Independent Director | $ | 25,000 | ||
Audit Committee Chairperson | $ | 20,000 | ||
Audit Committee Member | $ | 15,000 | ||
Compensation Committee Chairperson | $ | 15,000 | ||
Compensation Committee Member | $ | 10,000 | ||
Nominating and Corporation Governance Committee Chairperson | $ | 15,000 | ||
Nominating and Corporation Governance Committee Member | $ | 10,000 | ||
Finance Committee Chairperson | $ | 15,000 | ||
Finance Committee Member | $ | 10,000 | ||
Stock Awards. Prior to 2008, the Company made grants of stock options to non-employee directors pursuant to the Company's 1993 Non-employee Director Stock Option Plan. That plan was terminated when the 2008 Incentive Plan was adopted in May 2008, and the Company commenced granting stock options to non-employee directors under the 2008 Incentive Plan. The terms of the 1993 Non-employee Director Stock Option Plan continue to govern outstanding grants made under it prior to its termination. Effective January 2010, the Board terminated its practice of granting stock options to non-employee directors and instead grants restricted stock units. Each outside director of the Company who does not elect to decline to participate in the 2008Fossil Group, Inc. 2016 Long-Term Incentive Plan (the “2016 Plan”) is automatically granted restricted stock units (“RSUs”) as follows: (1) on the date of the annual stockholders meeting, each outside director is automatically granted restricted stock unitsRSUs with a fair market value of approximately $130,000, which restricted stock unitsRSUs will vest 100% on the earlier of (i)(a) the date of the next annual stockholders meeting or (ii)(b) one year from the date of grant, provided the outside director is providing services to the Company or a subsidiary on that date; and (2) each individual who first becomes an outside director is automatically granted a one-time grant, effective as of the date of appointment, equal to the grant he or she would have received if he or she had been elected at the previous annual stockholders meeting, pro-rated based on the number of days such director will actually serve before the one-year anniversary of such previous annual stockholders meeting, which restricted stock unitsRSUs will vest 100% one year from the date of grant, provided the outside director is providing services to the Company or a subsidiary on that date. Notwithstanding the foregoing, in the event of an outside director'sdirector’s termination of service due to his or her death, all unvested restricted stock unitsRSUs will immediately become 100% vested. Restricted stock unitsRSUs are awarded subject to such terms and conditions as established by the Compensation and Talent Management Committee, which may include the requirement that the holder forfeit the restricted stock unitsRSUs upon termination of service during the period of restriction.
| | 2023 PROXY STATEMENT | | | 17 | |
| | | NAME (1)(2) | | | | FEES EARNED OR PAID IN CASH ($)(3) | | | | STOCK AWARDS ($)(4) | | | | TOTAL ($) | | | |||||||||
| | | Mark R. Belgya | | | | | | 95,000 | | | | | | | 71,130 (5) | | | | | | | 166,130 | | | |
| | | William B. Chiasson | | | | | | 85,000 (6) | | | | | | | 71,130 (5) | | | | | | | 156,130 | | | |
| | | Susie Coulter (7) | | | | | | 4,402 | | | | | | | 44,640 | | | | | | | 49,042 | | | |
| | | Kim Harris Jones | | | | | | 85,000 | | | | | | | 71,130 (5) | | | | | | | 156,130 | | | |
| | | Kevin Mansell | | | | | | 115,000 | | | | | | | 71,130 | | | | | | | 186,130 | | | |
| | | Diane L. Neal (8) | | | | | | 30,549 | | | | | | | — | | | | | | | 30,549 | | | |
| | | Marc R. Y. Rey | | | | | | 70,000 | | | | | | | 71,130 | | | | | | | 141,130 | | | |
| | | Gail B. Tifford | | | | | | 75,000 | | | | | | | 71,130 | | | | | | | 146,130 | | | |
Plan as it deems necessary, but no amendment may adversely affect the rights of a participant with respect to an outstanding award without the participant's consent.
Stock Ownership Guidelines. In 2010, the Board in December 2022.
| | 18 | | | WWW.FOSSILGROUP.COM | |
| | 2023 PROXY STATEMENT | | | 19 | |
BENEFICIAL OWNERS AND MANAGEMENT
| | | | | | | SHARES BENEFICIALLY OWNED (1)(2) | | | ||||||||||
| | | NAME OF BENEFICIAL OWNER | | | | NUMBER | | | | PERCENT | | | ||||||
| | | Jeffrey N. Boyer | | | | | | 371,450 (3) | | | | | | | * | | | |
| | | Sunil M. Doshi | | | | | | 32,551 (4) | | | | | | | * | | | |
| | | Darren E. Hart | | | | | | 91,348 (5) | | | | | | | * | | | |
| | | Kosta N. Kartsotis | | | | | | 3,200,837 | | | | | | | 6.2% | | | |
| | | Greg A. McKelvey | | | | | | 840,918 (6) | | | | | | | 1.6% | | | |
| | | Mark R. Belgya | | | | | | 19,644 (7) | | | | | | | * | | | |
| | | William B. Chiasson | | | | | | 60,889 (8) | | | | | | | * | | | |
| | | Susie Coulter | | | | | | 0 | | | | | | | | | | |
| | | Kim Harris Jones | | | | | | 11,466 (9) | | | | | | | * | | | |
| | | Kevin Mansell | | | | | | 34,483 (10) | | | | | | | * | | | |
| | | Marc R. Y. Rey | | | | | | 25,300 (11) | | | | | | | * | | | |
| | | Gail B. Tifford | | | | | | 42,449 (12) | | | | | | | * | | | |
| | | All executive officers and directors as a group (14 persons) | | | | | | 4,764,556 (13) | | | | | | | 9.2% | | | |
| | | BlackRock, Inc. | | | | | | 3,118,437 (14) | | | | | | | 6.0% | | | |
| | | FMR, LLC | | | | | | 4,451,387 (15) | | | | | | | 8.6% | | | |
| | | Liechtensteinische Landesbank Aktiengesellschaft | | | | | | 2,805,194 (16) | | | | | | | 5.4% | | | |
| | | The Vanguard Group | | | | | | 2,607,668 (17) | | | | | | | 5.0% | | | |
| | 20 | | | WWW.FOSSILGROUP.COM | |
| | 2023 PROXY STATEMENT | | | 21 | |
| | | NAME | | | | AGE | | | | POSITION | | | |||
| | | Jeffrey N. Boyer | | | | | | 64 | | | | | Executive Vice President, Chief Operating Officer | | |
| | | Holly L. Briedis | | | | | | 36 | | | | | Executive Vice President, Chief Growth Officer | | |
| | | Sunil M. Doshi | | | | | | 51 | | | | | Executive Vice President, Chief Financial Officer and Treasurer | | |
| | | Darren E. Hart | | | | | | 60 | | | | | Executive Vice President, Chief Human Resources Officer | | |
| | | Melissa B. Lowenkron | | | | | | 48 | | | | | Chief Brand Officer | | |
| | | Greg A. McKelvey | | | | | | 50 | | | | | Executive Vice President, Chief Commercial Officer | | |
| | 22 | | | WWW.FOSSILGROUP.COM | |
Prior to rejoining the Company, Mr. Doshi most recently served as Chief Financial Officer at Mitra QSR, the third largest domestic franchisee for KFC, a fast food chain, from February 2019 until June 2020. Mr. Doshi served as Chief Financial Officer of Zoes Kitchen, a formerly publicly traded fast casual restaurant chain, from September 2015 to February 2019. Mr. Doshi also held various senior finance roles with L Brands, Inc. (“L Brands”), an international company that sells personal care and beauty products, apparel and accessories, from 1999 to 2012.
| | 2023 PROXY STATEMENT | | | 23 | |
| | | NAME | | | | POSITION | | |
| | | Kosta N. Kartsotis | | | | Chairman of the Board, Chief Executive Officer | | |
| | | Sunil M. Doshi | | | | Executive Vice President, Chief Financial Officer and Treasurer | | |
| | | Jeffrey N. Boyer | | | | Executive Vice President, Chief Operating Officer | | |
| | | Darren E. Hart | | | | Executive Vice President, Chief Human Resources Officer | | |
| | | Greg A. McKelvey | | | | Executive Vice President, Chief Commercial Officer | | |
| | | TITLE | | | | PAGE | | | |||
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| | | Additional Information | | | | | | | | | |
| | 24 | | | WWW.FOSSILGROUP.COM | |
Vice President.
| | 2023 PROXY STATEMENT | | | 25 | |
For fiscal 2015, Mr. Kartsotis, our CEO, continued to refuse all forms of compensation, expressing his belief that, given his level of stock ownership, his primary compensation is met by driving stock price growth, thereby aligning his interests with stockholders' interests. As a result, the following references to Named Executive Officers in this Compensation Discussion and Analysisthose practices we do not include Mr. Kartsotis.
employ.
| | | WHAT WE DO | | | | WHAT WE DON’T DO | | |
| | | ✓ Follow a primarily pay-for-performance philosophy ✓ Use multiple performance metrics within our annual compensation plan ✓ Use a thorough process for setting rigorous performance goals ✓ Maintain executive and director stock ownership guidelines ✓ Retain an independent compensation consultant ✓ Provide severance and change in control arrangements that are aligned with market practices ✓ Retain a double trigger equity acceleration upon a change in control. ✓ Provide modest perquisites with reasonable business rationale ✓ Regularly review share utilization and burn rate ✓ Maintain a clawback policy | | | | × No discounting, reloading or repricing of stock options without stockholder approval × No employment agreements × No excise tax gross-ups upon a change in control × No excessive perquisites × No guaranteed salary increases × No permitted pledging, hedging, short sales or derivative transactions in company stock. | | |
•net sales increased 6.1%compensation philosophy is to$3.5 billion, compared to $3.3 billion in fiscal 2013;•gross profit increased 5.3% to $2.0 billion, compared to $1.9 billion in fiscal 2013;•operating income increased 1.0% to $566.5 million, compared to $561.6 million in fiscal 2013;•net income decreased 0.4% to $376.7 million, compared to $378.2 million in fiscal 2013; and•diluted earnings per share increased 8.2% to $7.10 per diluted share on 53.1 million shares, compared to $6.56 per diluted share on 57.7 million shares.
In setting fiscal 2015 base salaries for the Named Executive Officers, our Compensation Committee considered our overall fiscal 2014 financial performance, the individual contributions of the Named Executive Officers to our overall fiscal 2014 financial performance, individual performance appraisals of the Named Executive Officers for fiscal 2014 and benchmarking data of our industry peer group. In addition, under the Fossil Group, Inc. 2010 Cash Incentive Plan, cash bonus amounts for our Named Executive Officers were based on our fiscal 2014 financial performance and individual performance appraisals of the Named Executive Officers for fiscal 2014.
As part of our annual merit review process, in the first quarter of fiscal 2015, the Compensation Committee approved:
•base pay increases ranging from 4.0% to 9.5% for our Named Executive Officers based on Company performance, individual performance ratings and an analysis of peer group companies and comparative,provide competitive compensationpackages; and•grants of restricted stock units, stock appreciation rights and performance shares with a total cash value on the date of grant of 150% of the Named Executive Officer's 2015 base salary, consistent with our pay-for-performance compensation philosophy.
In addition, in the fourth quarter of fiscal 2015, the Compensation Committee approved the following:
•discretionary grants of restricted stock units to each of our NEOs for retention purposes; and•discretionary grants of restricted stock units, stock appreciation rights and performance shares to Messrs. McKelvey and Secor to further incentivize them to drive sales of our wearable technology products.
In fiscal 2015, the Compensation Committee revised the performance metrics used to determine cash incentive awards from the single measure of operating income to a combination of operating income, net sales and strategic priorities. The Compensation Committee believes that using three performance metrics rather than a single metric better aligns the Named Executive Officers' bonus opportunities with the financial and strategic priorities of the Company and ultimately long-term value creation for the Company's stockholders. In addition, the strategic priorities bonus opportunity mitigates against the short-term financial impact of factors outside the Company's control, which can adversely impact the Named Executive Officers' bonus opportunities based solely on financial performance measures. As a result, the Compensation Committee set operating income and net sales target thresholds for fiscal 2015 cash incentive awards for payouts of 10%, 50%, 100% and 150% of each Named Executive Officer's eligible cash incentive bonus amount as determined by such Named Executive Officer's 2015 performance rating as follows:
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The Compensation Committee also established the fiscal 2015 strategic priorities as: ignite Fossil, ignite Skagen, lead in digital and wearables. After the end of the fiscal year, the Compensation Committee subjectively determines the overall attainment of the strategic priorities as "needs improvement" (0% award), "meets expectations" (50% award), "exceeds expectations" (100% award) and "outstanding" (150% award).
Fiscal 2015 was a very challenging year for us in achieving our financial goals. As a result, we did not achieve the minimum threshold for a payout under the Fossil Group, Inc. 2015 Cash Incentive Plan (the "2015 Cash Incentive Plan") for our operating income or net sales targets. However, the Compensation Committee did rate the Company as "outstanding" for the achievement of its strategic priorities. As a result of the outstanding rating, each Named Executive Officer received bonus payments equal to150% of their strategic priorities target bonus opportunity for fiscal 2015 performance under our 2015 Cash Incentive Plan.
In fiscal 2015, the Compensation Committee approved grants of performance shares to our Named Executive Officers for the first time. Performance shares are contractual rights to receive shares of our Common Stock at the end of a three-year measurement period, if performance and continued service vesting requirements are satisfied. They are designed to reward our Named Executive Officers when we
perform better than our peer group against certain financial metrics. The actual number of performance shares ultimately distributed to the Named Executive Officers is based on both our sales growth and operating margin compared to that of our peer group over that three-year period. Final distribution of the performance share awards for the 2015-2017 measurement period could range from 0% to 150% of the performance shares originally granted depending on our relative performance during the measurement period. The Compensation Committee decided to award performance shares in fiscal 2015 based on its review of external benchmarking data and competitive pay practices.
In fiscal 2015, we saw a number of new significant competitors enter into the watch business, particularly in the "smart watch" or wearable technology category. We made a strong push into this business with our own products and the acquisition of Misfit, Inc. in the fourth quarter of fiscal 2015. In the fourth quarter of fiscal 2015, the Compensation Committee approved discretionary equity grants to our Named Executive Officers for retention purposes and made additional performance share grants to certain of our Named Executive Officers tied to the sales of our wearable technology products and development of our wearable technology group.
Compensation Program
Compensation Program Objectives and Philosophy
Our compensation objectives are to maintain competitive pay practices that will enable usorder to attract, retain and reward executives who are capablemotivate top talent and to drive company success. Our goal is to target total direct compensation around the median of leading us in achieving our strategic business objectives. To meet these goals, we use base salary, performance-based short-term cash incentive compensation and long-term equity-based incentive awards. We believe this mix of short-term and long-term compensation rewards reinforces the value-added contributions and attainment ofmarket, with actual pay levels based on actual performance objectives that aid us in achieving profitability goals and creating stockholder value. A significant portion of senior management's compensation is equity-based in order to emphasize the link between executive compensation and the creation of stockholder value as measured by increases in the price of our shares of Common Stock.
above or below targets. We utilize external benchmarking data and a comparable industry peer groupgroups to establish competitive total compensation pay practices that are appropriate for our industry. We evaluate our executives' compensation on an annual basislevels and make changes accordingly. We also take into consideration current economic conditions and our financial projections. We target overall compensation for a Named Executive Officer achieving an "exceeds expectations" performance rating to be around the 50th percentile of the companies that we believe comprise our industry peer group and with whom we believe we principally compete for executive officer candidates. However, compensation may be set higher when considered necessary to attract or retain key executives or when an executive consistently achieves "outstanding" or "exceeds expectations" performance ratings.
Although substantial portions of our compensation program are performance-based, we do not believe that the risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on our company. In making this determination, our Executive Vice President of Human Resources (the "EVP of HR") and our Compensation Committee evaluated the risk profile of the Company's compensation programs and policies. In performing this evaluation, the EVP of HR and the Compensation Committee looked at each element of compensation and the associated risks and mitigating factors for each element of compensation. Specifically, the evaluation included the mix of short-term and long-term incentive compensation, extended vesting periods for long-term equity awards, the mix of corporate and specific business unit measures used in assessing performance, the use of multiple performance review criteria, the Compensation Committee's discretion in making individual awards and caps on individual compensation awards.
Overview of Compensation Program Design
Our compensation program is designed to achieve our objectives of attracting, retaining and motivating employees and rewarding them for achievements that we believe will bring us success and create stockholder value. This program is designed to be competitive with the companies in the industry with which we compete for talent. A significant portion of the compensation for our Named Executive Officers includes annual long-term equity awards that have extended time-based vesting periods and, in some cases, performance-based vesting criteria. The purpose of these awards is to serve as both a retention tool and incentive mechanism that will encourage recipients to remain with us and create value for both the award recipient and our stockholders.
In the first quarter of fiscal 2015, our Compensation Committee considered the following factors in establishing the base salaries of our Named Executive Officers for fiscal 2015:
•Our overall operating performance during fiscal 2014 and the contributions of the Named Executive Officers with respect to: (i) our overall performance; (ii) the results of each division and whether such division achieved its sales and/or expense goals; and (iii) the results of each division as compared to the budget for that division.•Individual performance appraisals of the Named Executive Officers and their contributions in furtherance of our performance goals in fiscal 2014 and other objectives as established by our CEO and the Compensation Committee, including a subjective evaluation of each Named Executive Officer's (i) vision and strategic direction with respect to his individual business responsibilities; (ii) ability to inspire and influence others; (iii) development of subordinates; (iv) execution of assigned tasks; and (v) ability to perform above and beyond the required scope and responsibilities of his enumerated role.•The compensation packages for executives who have similar positions and levels of responsibility at other companies in our industry peer group and relevant market benchmarking data.
Compensation Decision-Making
The Compensation Committee
The Compensation Committee is appointed by the Board to exercise the Board's authority to compensate the executive management team and administer our stock-based and incentive compensation plans. The Compensation Committee typically meets in separate sessions at least on a quarterly basis.practices. In addition, the Compensation and Talent Management Committee sometimes schedules special meetings or non-meeting "work sessions," either by telephone orbelieves in person, as necessarya pay-for-performance approach to fulfill its duties. Meeting agendas are established byexecutive compensation that aligns executive compensation with stockholder interests. This means that a significant portion of an executive’s compensation is at risk and will vary from the chairperson after consultation with other members of the Compensation Committee, the EVP of HR and Mr. Kartsotis, our CEO. The current members of the Compensation Committee are Mr. Skinner, who serves as chairperson, Ms. Agather, Ms. Neal and Ms. Ragusa. Each of these Compensation Committee members served on the Compensation Committee during all of fiscal 2015. The Compensation Committee's full responsibilities with respect to ourtargeted compensation practices are set forth in its charter and summarized above under "Board Committees and Meetings—Compensation Committee."
The Compensation Committee again engaged Frederic W. Cook & Co., Inc. ("FWC") to assist the Compensation Committee and management in reviewing and determining appropriate, competitive compensation for our executive officers for fiscal 2015. The Compensation Committee has engaged FWC since 2009 and believes FWC's familiarity with the Company and its compensation policies allows FWC to provide more meaningful insights to the Compensation Committee. FWC also reviewed the design and competitiveness of the Company's non-employee director compensation program. FWC has continued to provide to us, at our request, benchmarking, best practices and other data relevant to our
compensation programs and changes thereto. In fiscal 2015, FWC did not provide any other services to us.
The Compensation Committee determined that the work of FWC did not raise any conflicts of interest in fiscal 2015. In making this assessment, the Compensation Committee considered the independence factors enumerated in Rule 10C-1(b) under the Exchange Act, including the fact that FWC does not provide any other services to the Company,opportunity based upon the level of fees received fromachievement of specified performance objectives and stock price performance. We emphasize equity-based long-term incentives to ensure that our executives are focused on longer term operating and stock price performance in addition to short-term goals. Of the Company as a percentage of FWC'stargeted total revenue, policies and procedures employed by FWC to prevent conflicts of interest, and whether the individual FWC advisers to the Compensation Committee own any stock of the Company or have any business or personal relationships with members of the Compensation Committee or our executive officers.
Role of Executives in Establishing Compensation
Our CEO, other members of management (particularly the EVP of HR), and Compensation Committee members regularly discuss our compensation issues and the performance and retention of our Named Executive Officers. Mr. Kartsotis with the assistance of the EVP of HR typically recommends to the Compensation Committee for its review, modification and approval the annual base salary, bonus and equity awards (if any) for the other members of the executive management team.
The Compensation Committee would typically establish the base salary, bonus and equity incentive awards for the CEO, Mr. Kartsotis. However, Mr. Kartsotis again refused all forms ofdirect compensation for fiscal 2015. Mr. Kartsotis is oneyear 2022, approximately 57% to 69%* of the initial investorsNEO’s compensation would be at risk or tied to changes in our company and expressed his belief that his primary compensation is met by driving stock price growth.
Certain members ofor pre-determined performance objectives.
Use of Performance Rating
Each Named Executive Officer's performance is evaluated annually in a performance review process. The performance review leads to a performance rating, determined on the basis of both business metrics, which are quantitative measures of our performance and positioning, and position competencies, which are qualitative measures of individual performance and talent. Some of the business metrics include net sales, operating expense leverage, operating income, and gross margin. Some of the position competencies that are evaluated for each Named Executive Officer include setting direction and vision for the organization, cultivating corporate culture, managing resources, driving execution, decision making, leading communications, inspiring creativity and change, resolving conflict and collaborating, identifying and maximizing talent, coaching and developing, scorekeeping, and teambuilding. The overall performance review rating is used in determiningNEO’s base salary increasesin effect at the end of 2022, target short-term cash incentive and short-term incentive payouts.
Performance ratings for each Named Executive Officer range from "outstanding," "exceeds expectations," "meets expectations," "improvement needed" to "unsatisfactory." The Compensation Committee and CEO review the qualitative and quantitative measures and subjectively determine the appropriate performance rating. The Compensation Committee and CEO generally assign a weighting of 50% respectively to the qualitative and quantitative factors, but do not use any formulas to determine the appropriate performance rating. In addition, no one qualitative or quantitative factor is material to the ultimate determination of each Named Executive Officer's performance rating.
actual 2022 long-term equity incentive.
Performance ratings are used in setting base salaries and for determining cash bonus opportunities, as described further below.
Use of Industry Comparative Data
We operate in a highly competitive industry and retaining qualified personnel is critical to operating a successful business. As a result, we gather as much information as possible about the total compensation levels and practices at other companies in our industry peer group. Determining the companies to use for this comparison is a complex task. Because some of our competitors are not publicly traded, it is difficult to obtain information about their specific executive positions that are comparable to those of our executives. With the help of the Human Resources Department and FWC, the Compensation Committee has developed a peer group of companies that it reviews. The Compensation Committee reviews the group annually and makes any necessary adjustments. The peer group is comprised so that the median revenue size of the peer group is at or close to our annual revenue. In fiscal 2015, the peer group consisted of the following 15 companies:
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*In August 2015, Ann, Inc. was acquired by Ascena Retail Group, Inc. The Compensation Committee removed Ann, Inc. and added Asenca Retail Group, Inc. to the peer group list effective August 2015.
The Human Resources Department, with the assistance of FWC, obtains relevant data for each company from that company's SEC filings or as otherwise available. In addition, the Human Resources Department utilizes executive compensation surveys to benchmark comparable positions.
The data reviewed by the Compensation Committee in setting fiscal 2015 compensation included compensation information for each of the named executive officers identified by each company as well as each company's financial performance data. From this company-specific information as well as the surveys reviewed, our EVP of HR presented the data to the Compensation Committee by each compensation element. This data provided visibility into how the compensation of each of our Named Executive Officers compared to his peer group counterpart with respect to each compensation component and total compensation. The Compensation Committee evaluated base salaries, target bonuses, actual bonuses, stock option awards, restricted stock awards, and any other equity or incentive programs for which we could obtain data. The Compensation Committee did not assign any particular weights or formulas to the individual elements of compensation at peer companies or shown in the surveys. Rather, the Compensation Committee evaluated the compensation of each of the Named Executive Officers in light of the totality of the information reviewed for their peers.
Other Compensation Policies
Consistent with our compensation philosophies described above, our goal for fiscal 2015 was to provide each Named Executive Officer with an executive compensation program that was appropriate to our business, as well as competitive with the compensation paid to comparable executives in our industry peer group.
Historically, the Compensation Committee has not used a pre-established policy for allocating between either cash and non-cash or short-term and long-term incentive compensation. The CEO reviews information, surveys and other information he considers relevant, which includes information
from FWC, to determine the appropriate level and mix of incentive compensation for each Named Executive Officer and make recommendations to the Compensation Committee, which also has access to the background material reviewed by the CEO. The portion of an executive's total compensation that is contingent upon our performance tends to increase commensurate with the executive's position within the Company. This approach is designed to provide more upside potential and downside risk for executives in more senior positions.
We attempt to ensure that both cash and equity components of total compensation are tax deductible, to the maximum extent possible and applicable, by the use of stockholder-approved plans that are intended to comply, to the extent practicable, with Section 162(m) of the Code. In fiscal 2015, upon recommendation of the Compensation Committee, the Board of Directors adopted, and our stockholders approved, the 2015 Cash Incentive Plan, which formalized our annual cash incentive award program and made it compliant with Section 162(m) of the Code.
For fiscal 2015, our compensation program was structured to provide each Named Executive Officer with the opportunity to earn, through a combination of base salary and bonus target awards, total cash compensation around the 50th percentile of our industry peer group for an "exceeds expectations" performance rating. We also attempted to ensure that a substantial amount of each Named Executive Officer's total compensation was performance-based, was linked to our operating performance or achievement of strategic priorities, and derived its long-term value from the market price of our Common Stock.
Stockholder Say-on-Pay Votes
Following our 2015 Annual Meeting of Stockholders, the Compensation Committee also considered the advisory vote of our stockholders on executive compensation when reviewing our compensation decisions and policies. Of those stockholders voting, on an advisory basis, for or against the proposal, approximately 98% voted to approve our executive compensation. The Compensation Committee believes this affirms stockholders' support of our approach to executive compensation. The Compensation Committee will continue to consider the outcome of the Company's say-on-pay votes when making future compensation decisions for the Named Executive Officers.
Elements of Compensation
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Each component is described in detail below.
Salary
both financial and non-financial results. Typically,any adjustments to salaries are made in the first quarter of each fiscal year during our performance review process.
During
For fiscal 2015, based on an analysis of our peer group companies, comparative, competitive compensation packages and our fiscal 2014 operating performance and individual performance ratings, our CEO recommended to the Compensation Committee base pay increases of 4.0% to 9.5% for our Named Executive Officers. The Compensation Committee approved the recommended increases.
Vice President. The following table shows the base salary for each Named Executive Officer inNEO at the start of the fiscal 2015year and 2014 andat the end of the fiscal year, as well as the percentage change year-over-year:
Name | Fiscal 2015 | Fiscal 2014 | Change | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
Darren E. Hart | $ | 605,000 | $ | 575,000 | 5.2 | % | ||||
Greg A. McKelvey | $ | 575,000 | $ | 525,000 | 9.5 | % | ||||
Dennis R. Secor | $ | 575,000 | $ | 550,000 | 4.6 | % | ||||
John A. White | $ | 655,000 | $ | 630,000 | 4.0 | % | ||||
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Short-Term
| | | NAME | | | | START OF YEAR ANNUAL SALARY RATE | | | | CHANGE % | | | | END OF YEAR ANNUAL SALARY RATE | | | |||||||||
| | | Kartsotis | | | | | $ | 0 | | | | | | | 0.0% | | | | | | $ | 0 | | | |
| | | Doshi | | | | | $ | 490,000 | | | | | | | 7.14% | | | | | | $ | 525,000 | | | |
| | | Boyer | | | | | $ | 700,000 | | | | | | | 2.75% | | | | | | $ | 719,250 | | | |
| | | Hart | | | | | $ | 678,500 | | | | | | | 3.25% | | | | | | $ | 700,550 | | | |
| | | McKelvey | | | | | $ | 721,000 | | | | | | | 2.75% | | | | | | $ | 740,800 | | | |
General.Plan
Company’s stockholders.
Operating income and net sales targets are pre-approvedmetrics was our 2022 fiscal year (the “Measurement Period”).
| | | | | | | PERFORMANCE METRIC | | | | DESCRIPTION | | | | WEIGHTING | | | |||
| | | Financial goals: | | | | Net sales | | | | Target of $2.02 billion | | | | | | 30% | | | |
| | Adjusted operating income | | | | Target of $150 million | | | | | | 50% | | | | |||||
| | | Strategic goals: | | | | New consumers | | | | • Consumer email file size growth | | | | | | 10% | | | |
| | Digital capabilities | | | | • Digital roadmap execution • 1P marketplace launch • Marketing investment stewardship | | | | | | 10% | | | | |||||
Our Compensation Committee also set in the first quarter of fiscal 2015financial metrics. For the strategic prioritiesgoals, the new consumers goal included targets for threshold, target, and stretch payouts ranging from 50% to 200%, while the Company as a whole for the fiscal year. After the enddigital capabilities goals were measured individually with an achievement range of 0% to 200%. Each performance metric was measured independently of the fiscal year,other metrics. In setting these targets, key considerations of the Compensation and Talent Management Committee subjectively determines the overall attainment of the strategic priorities as "needs improvement" (0% award), "meets expectations" (50% award), "exceeds expectations" (100% award)included:
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rating for a minimum payoutintangible asset impairment and includes actual bonus payment total under the 2015 Cash Incentive Plan. The achievement of the strategic priorities is determined independently of our operating income and net sales targets.
| | | PERFORMANCE METRIC | | | | THRESHOLD* PERFORMANCE | | | | THRESHOLD* PAYOUT | | | | TARGET PERFORMANCE | | | | TARGET PAYOUT | | | | STRETCH* PERFORMANCE | | | | MAXIMUM* PAYOUT | | | |||||||||||||||
| | | Net sales | | | | | | 95% | | | | | | | 50% | | | | | $2.02 billion | | | | | | 100% | | | | | | | 109% | | | | | | | 200% | | | |
| | | Adjusted operating income | | | | | | 83% | | | | | | | 50% | | | | | $150 million | | | | | | 100% | | | | | | | 133% | | | | | | | 200% | | | |
Named Executive Officer Bonus Amount = (Named Executive Officer Salary × Performance Rating Percentage × Financial Payout Percentage × 80%) + (Named Executive Officer Salary × Performance Rating Percentage × Strategic Priorities Payout Percentage × 20%).
The CompensationTalent Management Committee approves the specific payments to the Named Executive OfficersNEOs under the 2015 Cash Incentive Plan. The Compensation and Talent Management Committee also retains discretion to reduce bonus compensation or recommend additional discretionary cash bonuses during the year based on factors such as promotions and business segment, department, individual or individualoverall Company performance.
Performance Ratings Percentage.
Financial Payout Percentage. The Financial Payout Percentage is based on the Company's operating income and net sales for the fiscal year. However, net sales are only measured if we first achieve the minimum threshold for operating income. For fiscal 2015, the Compensation Committee set the operating income and net sales targets as follows:
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At the time the Compensation Committee set the operating income and net sales target levels, it also set a scale of percentage award amounts, so that if we had achieved operating income and net sales between the threshold, midpoint, full and maximum amounts, the award percentage would be proportionately adjusted. In fiscal year 2015,Measurement Period, the Company achieved net sales of $1.769 million (using constant currency), which paid out at 0% of target, and adjusted operating income of $291.2$13 million, which was substantially lower than ourpaid out at 0% of target. For fiscal year 2014 operating income. Because we did not achieve2022, the minimum thresholdCompany achieved the strategic goals of new consumers at 191% and digital capabilities at 83.3%, resulting in an overall payout of 27.4%. The calculation for an initialthe Company payout based on our operating income results, our net sales results were not considered. As a result,percentage was the Financial Payout Percentagesum of weighting times achievement for each Named Executive Officer for our operating incomemetric (as defined), and net sales targets was 0% under the 2015 Cash Incentive Plan for fiscal 2015, and no bonuses were paid under the financial performance component of the 2015 Cash Incentive Plan.
Strategic Priorities Payout Percentage. For fiscal 2015, the Compensation Committee set four strategic priorities: (i) ignite Fossil; (ii) ignite Skagen; (iii) lead in digital; and (iv) wearables. For fiscal 2015, management recommended, and the Compensation Committee approved, a rating of "outstanding" for the achievement of our strategic priorities. The rating was subjective and was based in part on the accomplishment of the following in fiscal 2015 in a very challenging environment for the Company:
•Ignite Fossil: the Company's FOSSIL brand grew 4% in constant currencies;•Ignite Skagen: the SKAGEN brand grew 15% in constant currencies;
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•Lead in digital: the Company executed a global re-launch of the Fossil website and put in place a omni-channel roadmap and investment plan; and•Wearables: the Company launched its FOSSIL Q wearable technology watches and trackers and acquired Misfit, Inc.
As a result of the outstanding rating, each Named Executive Officer received 150% of their strategic priorities target bonus opportunity.
Darren E. Hart Greg A. McKelvey Dennis R. Secor John A. White Actual Bonus Awards.2015 Cash Incentive Plan for fiscal 2015year 2022 performance: NAME BASE SALARY PERCENTAGE COMPANY
PAYOUT % TOTAL BONUS AMOUNT Kartsotis — — — — Doshi $ 525,000 50% – 75%* 27.4% $ 93,731 Boyer $ 719,250 100% 27.4% $ 197,075 Hart $ 700,550 75% 27.4% $ 143,963 McKelvey $ 740,800 100% 27.4% $ 202,979 Base
Salary Performance
Rating
Percentage Target
Bonus
Opportunity
Amount Financial
Payout
Amount Strategic
Priorities
Payout
Amount Total Bonus
Amount $ 605,000 100 % $ 605,000 $ 0 $ 181,500 $ 181,500 $ 575,000 100 % $ 575,000 $ 0 $ 172,500 $ 172,500 $ 575,000 75 % $ 431,250 $ 0 $ 129,375 $ 129,375 $ 655,000 75 % $ 491,250 $ 0 $ 147,375 $ 147,375 2023 PROXY STATEMENT 29
Plan
In previous years, the CEO and Human Resources Department would recommend toNEOs.
For fiscal 2015, the CEO and Human Resources Department recommended, and the Compensation Committee approved, new guidelines for the grant of equity awards for each management level within the Company eligible to participate in the Company's equity plan.grant. The Compensation Committee approved the executive level employee's target of 150% of the Named Executive Officer's adjusted base salary following his annual performance review. This new guideline was recommended and approved based on external benchmarking against our industry peer group and competitive pay practices.
In recommending the size, frequency and type of long-term incentive grants to the Named Executive Officers, the Compensation Committee may also take into account tax implications to the Named Executive Officer and to the Company as well as the expected accounting impact and dilution
effects. The CompensationTalent Management Committee makes the ultimate determination regarding these grants and can increase or decrease the recommended awards in its subjective discretion.
For fiscal 2015,awards. In order to manage the CEOCompany’s burn rate, the target long-term incentive grants were (i) reduced by 25% and Human Resources Department also recommended, and the Compensation Committee approved, the granting of performance shares. The granting of performance shares was recommended and approved based on external benchmarking against our industry peer group and competitive pay practices and to further align Named Executive Officer compensation with shareholder interests.
In March 2015, the Compensation Committee granted to the Named Executive Officers a combination of restricted stock units and stock appreciation rights, both of which vest pro-rata over three years, and performance shares that vest on the three-year anniversary of the date of grant based on the achievement of the performance measures over the three year measurement period and continued employment with the Company. Stock appreciation rights are made at a specified strike price set forth in the applicable award agreement, which is generally the mean of the highest and lowest sales price of our Common Stock(ii) calculated on the date of grant using a $13.25 per share value instead of the award or on the last preceding trading date if no sales are madefair market value of $10.885 per share on the date of grant.
The grants of restricted stock units, stock appreciation rights Based on the foregoing, the Compensation and performance shares to our Named Executive Officers are made using a value-based granting system. Under our value-based granting system,Talent Management Committee approved the amount offollowing annual equity our Named Executive Officers receive is individually calculated at 150%awards which were granted on April 15, 2022:
| | | NAME | | | | ANNUAL EQUITY AWARD (1) | | | | RSUS (50%) | | | | PSUS (50%) | | | | RSU SHARES | | | | PSU SHARES | | | |||||||||||||||
| | | Kartsotis | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | Doshi | | | | | $ | 305,912 (2) | | | | | | $ | 305,912 (3) | | | | | | | — | | | | | | | 28,104 | | | | | | | — | | | |
| | | Boyer | | | | | $ | 862,570 | | | | | | $ | 431,285 | | | | | | $ | 431,285 | | | | | | | 39,622 | | | | | | | 39,622 | | | |
| | | Hart | | | | | $ | 629,850 | | | | | | $ | 314,925 | | | | | | $ | 314,925 | | | | | | | 28,932 | | | | | | | 28,932 | | | |
| | | McKelvey | | | | | $ | 888,456 | | | | | | $ | 444,228 | | | | | | $ | 444,228 | | | | | | | 40,811 | | | | | | | 40,811 | | | |
In addition, in connection with the annual equity grants as described above, the Compensation Committee approved in the first quarter of fiscal 2015 an additional equity grant to our Named Executive Officers for retention purposes. This additional equity grant was calculated as a percentage of the Named Executive Officer's adjusted base salary following his performance review and using 25% of base salary for an "outstanding" performance rating and 18.75% of base salary for an "exceeds expectations" performance rating. This grant was allocated 50% to restricted stock units, 25% to stock appreciation rights and 25% to performance shares. The terms of these awards were generally the same as the long-term equity awards granted during our annual merit equity granting process described above.
The Compensation Committee also approved in the fourth quarter of fiscal 2015 additional equity grants to our Named Executive Officers for retention purposes in the approximate values as follows: to Messrs. Hart and White $900,000 each and to Messrs. Secor and McKelvey $1,000,000 each. This grant was awarded 100% in restricted stock units to align their future value with our stock price. The terms of these awards were generally the same as the long-term equity awards granted during our annual merit equity granting process described above. These restricted stock units vest pro-rata over three years frombased on the date of grant.
In connection withCompany’s performance.
As described below under "Post-Termination Compensation," awards under the 2008 Incentive Plan and 2004 Long-Term Incentive Plan (the "2004 Incentive Plan") are subject to either optional vesting in the discretion of the Compensation Committee or immediate vesting following a "change in control." The events used to define "change in control" under these agreements were chosen because each reflects a circumstance in which, through a party's acquisition of a significant voting block, a shift in the control of the majority of the Board of Directors, or a corporate transaction, a person or group would be expected to obtain control or effective control over our policies and direction. In those circumstances, the Compensation Committee believes it may be appropriate to provide management the benefit of the awards that have been conveyed prior to such event and to waive the service and other conditions applicable to management's rights to such awards, because such change could reasonably be expected to materially alter our policies and objectives, and/or result in a material change in the composition of management.
Stock Ownership Guidelines
Effective January 2016, the Compensation Committee adopted stock ownership guidelines for our Chief Executive Officer and our other executive officers. The guidelines were adopted in lieu of stock retention requirements. Subject to transition periods and other provisions, the guidelines generally require that each officer beneficially hold shares of our stock with a value at least equal to the multiples of his base salary identified below:
| | 30 | | | WWW.FOSSILGROUP.COM | |
| | | | | | | VESTING | | | | 2022 ADJUSTED OPERATING MARGIN | | | ||||||
| | | Stretch | | | | | | 200% | | | | | | | 5.8% | | | |
| | | Maximum | | | | | | 150% | | | | | | | 4.8% | | | |
| | | Target | | | | | | 100% | | | | | | | 4.3% | | | |
| | | Threshold | | | | | | 50% | | | | | | | 3.8% | | | |
| | | | | VESTING | | | | 2022 ADJUSTED OPERATING INCOME | | | |||||
| | Stretch | | | | | 200% | | | | | $165 million | | | ||
| | | Maximum | | | | | | 150% | | | | | $150 million | | |
| | | Target | | | | | | 100% | | | | | $135 million | | |
| | | Threshold | | | | | | 50% | | | | | $120 million | | |
All named executive officers were in compliance with
Other Compensation and Benefit Elements
Employee Benefits
Benefit
| | 2023 PROXY STATEMENT | | | 31 | |
| | 32 | | | WWW.FOSSILGROUP.COM | |
| | Caleres, Inc. Chico’s FAS, Inc. Columbia Sportswear Company Crocs, Inc. Deckers Outdoor Corporation | | | Express, Inc. Genesco, Inc. G-III Apparel Group, Ltd. Guess?, Inc. Movado Group, Inc. | | | Oxford Industries, Inc. Steven Madden, Ltd. Urban Outfitters, Inc. Wolverine World Wide, Inc. | |
| | 2023 PROXY STATEMENT | | | 33 | |
| | | Position | | | | Base Salary Multiple | | |
| | | Chief Executive Officer | | | | Six Times | | |
| | | Other Executive Officers | | | | Two Times | | |
Mark R. Belgya
Marc R. Y. Rey
Compensation Committee Interlocks and Insider Participation
| | 34 | | | WWW.FOSSILGROUP.COM | |
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | All Other Compensation ($) | Total ($) | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Kosta N. Kartsotis(6) | 2015 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |||||||||||||||||
Chief Executive | 2014 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |||||||||||||||||
Officer and Director | 2013 | -0- | -0- | -0- | -0- | -0- | -0- | -0- | |||||||||||||||||
Dennis R. Secor | 2015 | 593,269 | -0- | 2,978,099 | 492,753 | 129,375 | 20,802 | (7) | 4,214,298 | ||||||||||||||||
Executive Vice | 2014 | 542,308 | -0- | 451,595 | 451.524 | -0- | 7,228 | 1,452,655 | |||||||||||||||||
President, Chief | 2013 | 500,000 | -0- | 506,350 | 306,282 | 500,000 | 138,195 | 1,950,827 | |||||||||||||||||
Financial Officer and Treasurer | |||||||||||||||||||||||||
Darren E. Hart | 2015 | 623,654 | -0- | 1,694,243 | 264,698 | 181,500 | 14,034 | (8) | 2,778,129 | ||||||||||||||||
Executive Vice | 2014 | 569,615 | -0- | 479,516 | 479,476 | -0- | 24,461 | 1,553,068 | |||||||||||||||||
President, HR | 2013 | 530,769 | 240,000 | 645,073 | 232,223 | 540,000 | 6,341 | 2,194,406 | |||||||||||||||||
Greg A. McKelvey(9) | 2015 | 589,423 | -0- | 3,005,051 | 501,748 | 172,500 | -0- | 4,268,722 | |||||||||||||||||
Executive Vice President, Chief Strategy and | |||||||||||||||||||||||||
Digital Officer | |||||||||||||||||||||||||
John A. White | 2015 | 676,346 | -0- | 1,729,217 | 276,337 | 147,375 | 10,155 | (10) | 2,839,430 | ||||||||||||||||
Executive Vice | 2014 | 626,923 | -0- | 380,719 | 380,620 | -0- | 6,929 | 1,395,191 | |||||||||||||||||
President and Chief | 2013 | 608,462 | -0- | 309,929 | 109,820 | 457,500 | 6,285 | 1,491,996 | |||||||||||||||||
Operating Officer | |||||||||||||||||||||||||
NAME AND PRINCIPAL
POSITION YEAR SALARY
($) BONUS
($) STOCK
AWARDS
($)(1) OPTION
AWARDS
($) NON-EQUITY
INCENTIVE PLAN
COMPENSATION
($)(2) CHANGE IN
PENSION
VALUE AND
NONQUALIFIED
DEFERRED
COMPENSATION
EARNINGS
($) ALL OTEHR
COMPENSATION
($) TOTAL
($) Kosta N. Kartsotis (3)Chief Executive Officer and Director 2022 -0- -0- -0- -0- -0- -0- -0- -0- 2021 -0- -0- -0- -0- -0- -0- -0- -0- 2020 -0- -0- -0- -0- -0- -0- -0- -0- Sunil M. DoshiExecutive Vice President, Chief Financial Officer and Treasurer (4) 2022 499,654 -0- 305,912 -0- 93,731 -0- 9,438 908,735 2021 435,442 -0- 260,284 -0- 313,600 -0- 8,211 1,017,537 Jeffrey N. BoyerExecutive Vice President, Chief Operating Officer 2022 716,288 -0- 862,571 -0- 197,075 -0- 27,066 (5) 1,803,000 2021 662,308 -0- 1,096,811 -0- 896,000 -0- 20,221 2,675,340 2020 630,000 87,500 387,300 -0- 576,450 -0- 20,324 1,701,574 Darren E. HartExecutive Vice President, Chief Human Resources Officer 2022 697,158 -0- 629,850 -0- 143,963 -0- 18,807 (6) 1,489,778 2021 641,965 -0- 837,191 -0- 651,360 -0- 21,775 2,152,291 2020 610,650 84,813 192,692 -0- 558,745 -0- 22,659 1,469,559 Greg A. McKelveyExecutive Vice President, Chief Commercial Officer 2022 737,754 -0- 888,455 -0- 202,979 -0- 8,176 1,837,364 2021 682,177 -0- 1,129,719 -0- 922,880 4,383 12,769 2,751,928 2020 648,900 67,594 393,264 -0- 593,744 -0- -0- 1,703,502 (1)The Company had one extra payroll date occur in fiscal 2015.(2)The bonus in 2013 for Mr. Hart was paid for retention purposes.(3)The amounts shown were not actually paid to theNamed Executive Officers.NEOs. Rather, as required by the rules of the SEC, the amounts represent the aggregate grant date fair value ofrestricted stock unitsRSUs andperformance sharesPSUs awarded to each of them in fiscal years2013, 20142020, 2021 and2015.2022. These values were determined in accordance with FASB ASC Topic 718. The grant date fair value of theperformance share awardsPSUs is based on our estimate on the grant date of the probable outcome of meeting the performance conditions of these awards. The aggregate grant date fair value of therestricted stock units and performance sharesRSUs is equal to the midpoint between the high and low sales prices of our Common Stock on the date of grant multiplied by the number of shares granted. The following are the aggregate grant date fair values of the2015 performance share awards2022 PSUs assuming we meet the highest level of the performance conditions of these awards as described in footnote (2) to the Fiscal20152022 Grants of Plan-Based Awards Table: Mr.Secor ($614,121),Boyer $862,571, Mr. Hart($397,185),$629,850 and Mr. McKelvey($627,597) and Mr. White ($414,632).$888,455. The amounts reported do not include any reduction in the value of the awards for the possibility of forfeiture.(4)ConsistsSee also Fiscal 2022 Grants ofawards of stock appreciation rights granted pursuant to the 2008 Incentive Plan. The amounts shown were not actually paid to the Named Executive Officers. Rather, as required by the
rules of the SEC, the amounts represent the aggregate grant date fair value of the stock appreciation rights awarded to each of them in fiscal years 2013, 2014 and 2015. These values were determined in accordance with FASB ASC Topic 718. See Note 15, Employee Benefit Plans, under the subheading entitled "Stock Options and Stock Appreciation Rights" in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for fiscal 2015 for the assumptions used in determining the aggregate grant date fair value of these awards. The amounts reported do not include any reduction in the value of the awards for the possibility of forfeiture.(5)- (2)
The amounts shown were earned in the fiscal year listed, but paid in the first quarter of the following fiscal year.(6)(3)Mr. Kartsotis refused all forms of compensation for fiscal years2013, 20142020, 2021 and2015.2022.(4)Mr.Kartsotis is one of the initial investors inDoshi, who joined the Companyand expressed his belief that his primary compensation is met by driving stock price growth.(7)- in 2020, was not an NEO in 2020.
(5)This amount represents annual wellness benefits, theCompany'sCompany’s contributions to Mr.Secor'sBoyer’s account under its 401(k) plan and Company-paid life insurance premiums.(8)(6)This amount represents annual wellness benefits, financial advisory services, theCompany'sCompany’s contributions to Mr.Hart'sHart’s account under its 401(k) plan and Company-paid life insurance premiums.(9)Mr. McKelvey was not a Named Executive Officer in 2014 or 2013.(10)This amount represents annual wellness benefits, the Company's contributions to Mr. White's account under its 401(k) plan and Company-paid life insurance premiums.
| | 2023 PROXY STATEMENT | | | 35 | |
| | | | | | | | | All Other Stock Awards: Number of Shares of Stock or Units(3) (#) | All Other Option Awards: Number of Securities Underlying Options(4) (#) | | | |||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | Grant Date Fair Value of Stock and Option Awards ($) | |||||||||||||||||||||||||||||
| | | Exercise of Base Price of Option Awards ($/Sh) | ||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold(5) ($) | Target(6) ($) | Maximum(7) ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||
Kosta N. Kartsotis(8) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | -0- | -0- | N/A | N/A | |||||||||||||||||||||||
Dennis R. Secor | 41,400 | 431,250 | 862,500 | |||||||||||||||||||||||||||||||
| 3/15/2015 | 0 | 3,026 | 4,540 | 242,731 | ||||||||||||||||||||||||||||||
| 3/15/2015 | 6,050 | 485,301 | ||||||||||||||||||||||||||||||||
| 3/15/2015 | 10,275 | 80.22 | 242,577 | |||||||||||||||||||||||||||||||
| 11/24/2015 | 26,614 | 1,000,021 | ||||||||||||||||||||||||||||||||
| 12/22/2015 | 0 | 6,808 | 6,808 | 250,024 | ||||||||||||||||||||||||||||||
| 12/22/2015 | 27,230 | 1,000,022 | ||||||||||||||||||||||||||||||||
| 12/22/2015 | 21,740 | 36.73 | 250,176 | |||||||||||||||||||||||||||||||
Darren E. Hart | 43,560 | 453,750 | 907,500 | |||||||||||||||||||||||||||||||
| 3/15/2015 | 0 | 3,301 | 4,952 | 264,790 | ||||||||||||||||||||||||||||||
| 3/15/2015 | 6,600 | 529,419 | ||||||||||||||||||||||||||||||||
| 3/15/2015 | 11,212 | 80.22 | 264,698 | |||||||||||||||||||||||||||||||
| 11/24/2015 | 23,953 | 900,034 | ||||||||||||||||||||||||||||||||
Greg A. McKelvey | 41,400 | 431,250 | 862,500 | |||||||||||||||||||||||||||||||
| 3/15/2015 | 0 | 3,138 | 4,708 | 251,715 | ||||||||||||||||||||||||||||||
| 3/15/2015 | 6,274 | 503,269 | ||||||||||||||||||||||||||||||||
| 3/15/2015 | 10,656 | 80.22 | 251,572 | |||||||||||||||||||||||||||||||
| 11/24/2015 | 26,614 | 1,000,021 | ||||||||||||||||||||||||||||||||
| 12/22/2015 | 0 | 6,808 | 6,808 | 250,024 | ||||||||||||||||||||||||||||||
| 12/22/2015 | 27,230 | 1,000,022 | ||||||||||||||||||||||||||||||||
| 12/22/2015 | 21,740 | 36.73 | 250,176 | |||||||||||||||||||||||||||||||
John A. White | 47,160 | 491,250 | 982,500 | |||||||||||||||||||||||||||||||
| 3/15/2015 | 0 | 3,446 | 5,170 | 276,421 | ||||||||||||||||||||||||||||||
| 3/15/2015 | 6,891 | 552,762 | ||||||||||||||||||||||||||||||||
| 3/15/2015 | 11,705 | 80.22 | 276,337 | |||||||||||||||||||||||||||||||
| 11/24/2015 | 23,953 | 900,034 | ||||||||||||||||||||||||||||||||
NAME GRANT DATE ESTIMATED FUTURE PAYOUTS UNDER NON-
EQUITY INCENTIVE PLAN AWARDS (1) ESTIMATED FUTURE PAYOUTS UNDER
EQUITY INCENTIVE PLAN AWARDS (2) ALL OTHER
STOCK AWARDS:
NUMBER OF
SHARES OF
STOCK OR
UNITS (3)(#) GRANT DATE
FAIR VALUE
OF STOCK
AND OPTION
AWARDS ($) THRESHOLD (4) TARGET (5) MAXIMUM (6) THRESHOLD (#) TARGET (#) MAXIMUM (#) Kosta N.
Kartsotis (7) N/A N/A N/A N/A N/A N/A N/A -0- N/A Sunil M.
Doshi 4/15/2022 157,500 393,750 787,500 — — — — — 4/15/2022 — — — — — 28,104 305,912 Jeffrey N.
Boyer 4/15/2022 287,700 719,250 1,438,500 19,811 39,622 79,244 — 431,285 4/15/2022 — — — — — 39,622 431,285 Darren E.
Hart 4/15/2022 210,165 525,413 1,050,826 14,466 28,932 56,864 — 314,925 4/15/2022 — — — — — 28,932 314,925 Greg A.
McKelvey 4/15/2022 296,320 740,800 1,481,600 20,405 40,811 81,622 — 444,228 4/15/2022 — — — — — 40,811 444,228 (1)The amounts shown were not actually paid to theNamed Executive Officers.NEOs. Rather, the amounts shown reflect potential payments under the2015Cash Incentive Plan. Actual payment amounts are shown in the"Fiscal 2015, 2014“Fiscal 2022, 2021 and20132020 Summary CompensationTable" aboveTable” in the column"Non-Equity“Non-Equity Incentive Plan Compensation."- ”
(2)The amounts shown are potential payments ofperformance share awardsPSUs to theNamed Executive Officers.NEOs. Final payments of these awards can range from 0% to150%200% of the shares originally granted,for the March 15, 2015 grant and 0% to 100% for the December 22, 2015 grant,depending onourCompany performance during the applicable measurement period.(3)Consists ofrestricted stock unitsRSUs awarded pursuant to the2008 Incentive2016 Plan. These awards vest one-third each year over three years following the grant date.(4)Consists of stock appreciation rights awarded pursuant to the 2008 Incentive Plan. All awards vest one-third each year over three years following the grant date.(5)Threshold payments assume that theexecutive received a "meets expectations" performance rating (40% award), theCompany achievedoperating income and net sales levelsthe financial metrics at the threshold payoutlevels (10%level (50% award) and theachievement ofstrategicpriorities by the Company is rated "meets expectations" (50% award).metrics at a 0% payout. See “Annual Cashincentive awards are paid if the executive's performance rating is a "meets expectations," "exceeds expectations" or "outstanding"Incentive Plan” in “Compensation Discussion andeither (i) the operating income and net sales targets or (ii) the strategic priorities are at least at the threshold payout level. We consider "meets expectations" to be the threshold performance rating.(6)- Analysis” for more information.
(5)Target payments assume that theexecutive received an "exceeds expectations" performance rating (75% award), theCompany achievedoperating income and net sales levelseach of the performance metrics at the targetlevelspayout level (100% award)and the achievement of strategic priorities by the Company is rated "exceeds expectations" (100% award).We consider "exceeds expectations" to be the target performance rating and the target strategic priorities rating..
(7)- (6)
Maximum payments assume that theexecutive received an "outstanding" performance rating (100% award), theCompany achievedoperating income and net sales levelseach of the performance metrics at themaximumstretch payout level(150%(200% award)and the achievement of strategic priorities by the Company is rated "outstanding" (150% award).We consider "outstanding" to be the maximum performance rating and the maximum strategic priorities rating.(8)(7)Mr. Kartsotis refused all forms of compensation for fiscalyears 2013, 2014 and 2015. Mr. Kartsotis is one of the initial investors in the Company and expressed his belief that his primary compensation is met by continuing to drive stock price growth.year 2022.Perquisites
| | 36 | | | WWW.FOSSILGROUP.COM | |
Employment Agreements
| | | Option Awards(1) | Stock Awards | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock that Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($) | |||||||||||||||||||
Kosta N. Kartsotis(3) | N/A | — | — | N/A | N/A | — | — | — | — | |||||||||||||||||||
Dennis R. Secor | 1/15/2013 | 4,207 | 2,103 | 101.64 | 1/15/2021 | 1,004 | 36,706 | — | — | |||||||||||||||||||
| 3/15/2013 | — | — | — | — | 626 | 22,827 | — | — | ||||||||||||||||||||
| 3/15/2014 | 3,823 | 7,646 | 113.04 | 3/15/2022 | 2,663 | 97,359 | — | — | ||||||||||||||||||||
| 3/15/2015 | — | 10,275 | 80.22 | 3/15/2023 | 6,050 | 221,188 | 3,026 | (4) | 110,631 | |||||||||||||||||||
| 11/24/2015 | — | — | — | — | 26,614 | 973,008 | — | — | ||||||||||||||||||||
| 12/22/2015 | — | 21,740 | 36.73 | 12/22/2023 | 27,230 | 995,529 | 6,808 | (5) | 248,900 | |||||||||||||||||||
Darren E. Hart | 7/15/2011 | 5,343 | — | 128.29 | 7/15/2019 | — | — | — | — | |||||||||||||||||||
| 3/15/2012 | 4,945 | — | 127.84 | 3/15/2020 | — | — | — | — | ||||||||||||||||||||
| 3/15/2013 | 3,076 | 1,538 | 106.4 | 3/15/2021 | 2,020 | 73,851 | — | — | ||||||||||||||||||||
| 3/15/2014 | 4,060 | 8,119 | 113.04 | 3/15/2022 | 2,828 | 103,392 | — | — | ||||||||||||||||||||
| 3/15/2015 | — | 11,212 | 80.22 | 3/15/2023 | 6,600 | 241,296 | 3,301 | (4) | 120,685 | |||||||||||||||||||
| 11/24/2015 | — | — | — | — | 23,953 | 875,722 | — | — | ||||||||||||||||||||
Greg A. McKelvey | 4/15/2013 | 1,666 | 833 | 95.91 | 4/15/2021 | 347 | 12,686 | — | — | |||||||||||||||||||
| 7/15/2013 | — | — | — | — | 869 | 31,771 | — | — | ||||||||||||||||||||
| 3/15/2014 | 909 | 1,816 | 113.04 | 3/15/2022 | 1,222 | 44,676 | — | — | ||||||||||||||||||||
| 3/15/2015 | — | 10,656 | 80.22 | 3/15/2023 | 6,274 | 229,377 | 3,138 | (4) | 114,725 | |||||||||||||||||||
| 11/24/2015 | — | — | — | — | 26,614 | 973,008 | — | — | ||||||||||||||||||||
| 12/22/2015 | — | 21,740 | 36.73 | 3/15/2022 | 27,230 | 995,529 | 6,808 | (5) | 248,900 | |||||||||||||||||||
John A. White | 10/15/2012 | 4,958 | — | 83.83 | 10/15/2020 | — | — | — | — | |||||||||||||||||||
| 3/15/2013 | 734 | 489 | 106.4 | 3/15/2021 | 653 | 23,874 | — | — | ||||||||||||||||||||
| 3/15/2014 | 1,673 | 5,155 | 113.04 | 3/15/2022 | 1,795 | 65,625 | — | — | ||||||||||||||||||||
| 3/15/2015 | — | 11,705 | 80.22 | 3/15/2023 | 6,891 | 251,935 | 3,446 | (4) | 125,986 | |||||||||||||||||||
| 11/24/2015 | — | — | — | — | 23,953 | 875,722 | — | — | ||||||||||||||||||||
NAME OPTION AWARDS (1) STOCK AWARDS GRANT DATE NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
EXERCISABLE NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS (#)
UNEXERCISABLE OPTION
EXERCISE
PRICE ($) OPTION
EXPIRATION
DATE NUMBER OF
SHARES OR
UNITS OF
STOCK THAT
HAVE NOT
VESTED (#)(2) MARKET VALUE
OF SHARES
OR UNITS
OF STOCK
THAT HAVE
NOT VESTED ($) EQUITY
INCENTIVE
PLAN AWARDS:
NUMBER OF
UNEARNED
SHARES,
UNITS OR
OTHER RIGHTS
THAT HAVE
NOT VESTED (#) EQUITY
INCENTIVE
PLAN AWARDS:
MARKET OR
PAYOUT VALUE
OF UNEARNED
SHARES,
UNITS OR
OTHER RIGHTS
THAT HAVE
NOT VESTED ($) Kosta N.
Kartsotis (3) N/A — — — — — — — — Sunil M.
Doshi 7/15/2020 — — — — 13,333 57,465 — — 4/15/2021 — — — — 13,096 56,444 — — 4/15/2022 — — — — 28,104 121,128 — — Jeffrey N.
Boyer 4/15/2020 — — — — 8,788 37,876 8,788 (4) 37,876 4/15/2020 — — — — 50,000 (5) 215,500 — — 4/14/2021 — — — — 23,773 102,462 23,773 (6) 104,462 4/15/2022 — — — — 39,622 170,771 39,662 (7) 170,771
| | 2023 PROXY STATEMENT | | | 37 | |
| | | NAME | | | | | | | | | | | OPTION AWARDS (1) | | | | STOCK AWARDS | | | ||||||||||||||||||||||||||||||||||||||||||||||||
| | GRANT DATE | | | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE | | | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXERCISABLE | | | | OPTION EXERCISE PRICE ($) | | | | OPTION EXPIRATION DATE | | | | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#)(2) | | | | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) | | | | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (#) | | | | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) | | | ||||||||||||||||||||||||||||||||
| | | Darren E. Hart | | | | | | | | | | | | | | | | | | | | — | | | | | | | | | | | | | | | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | 3/15/2015 | | | | | | | 11,212 | | | | | | | — | | | | | | | 80.22 | | | | | | | 3/15/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | |||||
| | | | 3/15/2016 | | | | | | | 18,515 | | | | | | | — | | | | | | | 47.99 | | | | | | | 3/15/2024 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | |||||
| | | | 4/15/2020 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 8,518 | | | | | | | 36,713 | | | | | | | 8,518 (4) | | | | | | | 36,713 | | | | |||||
| | | | 4/15/2021 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 17,359 | | | | | | | 74,817 | | | | | | | 17,359 (6) | | | | | | | 74,817 | | | | |||||
| | | | 4/15/2022 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 28,932 | | | | | | | 124,697 | | | | | | | 28,932 (7) | | | | | | | 124,697 | | | | |||||
| | | Greg A. McKelvey | | | | | | 3/15/2015 | | | | | | | 10,656 | | | | | | | — | | | | | | | 80.22 | | | | | | | 3/15/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | 12/22/2015 | | | | | | | 12,885 | | | | | | | — | | | | | | | 36.73 | | | | | | | 12/22/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | |||||
| | | | 3/15/2016 | | | | | | | 17,634 | | | | | | | — | | | | | | | 47.99 | | | | | | | 3/15/2024 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | |||||
| | | | 4/15/2020 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 9,052 | | | | | | | 39,014 | | | | | | | 9,052 (4) | | | | | | | 39,014 | | | | |||||
| | | | 4/15/2020 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 50,000 (5) | | | | | | | 215,500 | | | | | | | — | | | | | | | — | | | | |||||
| | | | 4/15/2021 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 24,486 | | | | | | | 105.535 | | | | | | | 24,486 (6) | | | | | | | 105,535 | | | | |||||
| | | | 4/15/2022 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 40,811 | | | | | | | 175,895 | | | | | | | 40,811 (7) | | | | | | | 175,895 | | | | |||||
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2004 Incentive Plan
employment, except as provided under the Executive Severance Agreements. See “Post-Termination Compensation” below for a definition of change in control and a discussion of the vesting terms under the Executive Severance Agreements.
| | Option Awards | Stock Awards | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | |||||||||
Kosta N. Kartsotis | -0- | -0- | -0- | -0- | |||||||||
Dennis R. Secor | -0- | -0- | 2,113 | 257,325 | |||||||||
Darren E. Hart | -0- | -0- | 3,232 | 356,315 | |||||||||
Greg A. McKelvey | -0- | -0- | 1,495 | 149,156 | |||||||||
John A. White | -0- | -0- | 2,166 | 216,512 | |||||||||
| | | NAME | | | | OPTION AWARDS | | | | STOCK AWARDS | | | ||||||||||||||||||||
| | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | | | | VALUE REALIZED ON EXERCISE ($) | | | | NUMBER OF SHARES ACQUIRED ON VESTING (#) | | | | VALUE REALIZED ON VESTING ($)(1) | | | |||||||||||||||||
| | | Kosta N. Kartsotis | | | | | | -0- | | | | | | | -0- | | | | | | | -0- | | | | | | | -0- | | | |
| | | Sunil M. Doshi | | | | | | -0- | | | | | | | -0- | | | | | | | 19,881 | | | | | | | 148,206 | | | |
2023 PROXY STATEMENT 39
| | | NAME | | | | OPTION AWARDS | | | | STOCK AWARDS | | | ||||||||||||||||||||
| | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | | | | VALUE REALIZED ON EXERCISE ($) | | | | NUMBER OF SHARES ACQUIRED ON VESTING (#) | | | | VALUE REALIZED ON VESTING ($)(1) | | | |||||||||||||||||
| | | Jeffrey N. Boyer | | | | | | -0- | | | | | | | -0- | | | | | | | 84,000 | | | | | | | 914,340 | | | |
| | | Darren E. Hart | | | | | | -0- | | | | | | | -0- | | | | | | | 72,894 | | | | | | | 793,451 | | �� | |
| | | Greg A. McKelvey | | | | | | -0- | | | | | | | -0- | | | | | | | 86,517 | | | | | | | 941,738 | | | |
Post-Termination Compensation
Post-Termination Arrangements. We have
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | | | | | | | | | | | | | ||||||||||
| | | Fiscal Year (a) | | | | Summary Compensation Table Total for PEO (b) | | | | Compensation Actually Paid to PEO (c) | | | | Average Summary Compensation Table Total for non-PEO NEOs (d) | | | | Average Compensation Actually Paid to non-PEO NEOs (e) | | | | Total Shareholder Return (f) | | | | Peer Group Total Shareholder Return (g) | | | | Net Income (in $m) (h) | | | | Adjusted EBITDA (in $m) (i) | | | ||||||||||||||||||||||||
| | | 2022 | | | | | $ | 0 | | | | | | $ | 0 | | | | | | $ | 1,509,719 | | | | | | $ | 553,910 | | | | | | $ | 55.68 | | | | | | $ | 114.12 | | | | | | $ | (44.2) | | | | | | $ | 36.1 | | | |
| | | 2021 | | | | | $ | 0 | | | | | | $ | 0 | | | | | | $ | 2,157,293 | | | | | | $ | 2,403,236 | | | | | | $ | 132.95 | | | | | | $ | 167.85 | | | | | | $ | 25.4 | | | | | | $ | 159.6 | | | |
| | | 2020 | | | | | $ | 0 | | | | | | $ | 0 | | | | | | $ | 1,603,279 | | | | | | $ | 1,818,903 | | | | | | $ | 112.02 | | | | | | $ | 141.19 | | | | | | $ | (96.1) | | | | | | $ | 7.7 | | | |
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| | 2023 PROXY STATEMENT | | | 41 | |
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| | | EMPLOYEE POPULATION | | | | TOTAL EMPLOYEES | | | |||
| | | U.S. Employees | | | | | | 2,488 | | | |
| | | Non-U.S. Employees* | | | | | | 5,602 | | | |
| | | Global Workforce | | | | | | 8,090 | | | |
| | 2023 PROXY STATEMENT | | | 45 | |
In addition, inSet forth below are the event of death oramounts that the NEO would have received upon a change in control or death as of December 31, 2022 under the 2016 Plan and 2008 Plan. In calculating the amounts in the table, the Company based the stock distribution values on a price of $4.31 per share, which was the closing price of the Company, all outstanding restricted stock units and stock appreciation rights under our 2004 Incentive Plan will become fully exercisable or vested. Unvested restricted stock units and stock appreciation rights granted under the 2004 Incentive Plan terminate upon any other terminationCommon Stock on Nasdaq as of employment.
A "change in control" under the 2004 Incentive Plan is generally defined as (i) the acquisition by any person of 30% or more of the combined voting power of our outstanding securities, or (ii) the occurrence of a transaction requiring stockholder approval and involving the sale of all or substantially all of our assets or the merger of our Company with or into another corporation.
December 30, 2022.
| | | POSITION | | | | RESTRICTED STOCK UNITS ($) | | | | STOCK APPRECIATION RIGHTS ($) | | | | PERFORMANCE STOCK UNITS ($) | | | | TOTAL ($) | | | ||||||||||||
| | | Kosta N. Kartsotis | | | | | | -0- | | | | | | | -0- | | | | | | | -0- | | | | | | | -0- | | | |
| | | Sunil M. Doshi | | | | | | 235,037 | | | | | | | -0- | | | | | | | -0- | | | | | | | 235,037 | | | |
| | | Jeffrey N. Boyer | | | | | | 526,609 | | | | | | | -0- | | | | | | | 311,109 | | | | | | | 837,718 | | | |
| | | Darren E. Hart | | | | | | 236,227 | | | | | | | -0- | | | | | | | 236,227 | | | | | | | 472,454 | | | |
| | | Greg A. McKelvey | | | | | | 535,944 | | | | | | | -0- | | | | | | | 320,444 | | | | | | | 856,388 | | | |
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| | | NAME | | | | TOTAL BASE SALARY | | | | TARGET BONUS | | | | HEALTHCARE AND INSURANCE BENEFITS (1) | | | | FAIR MARKET VALUE OF ADDITIONAL VESTING (2) | | | | TOTAL (3) | | | |||||||||||||||
| | | Boyer | | | | | $ | 1,084,125 | | | | | | $ | 1,806,875 | | | | | | $ | 17,070 | | | | | | $ | 764,982 | | | | | | $ | 3,673,052 | | | |
| | | Hart | | | | | $ | 1,050,825 | | | | | | $ | 1,313,533 | | | | | | $ | 23,965 | | | | | | $ | 419,342 | | | | | | $ | 2,807,665 | | | |
| | | McKelvey | | | | | $ | 1,116,750 | | | | | | $ | 1,861,250 | | | | | | $ | 23,064 | | | | | | $ | 781,470 | | | | | | $ | 3,782,534 | | | |
Awards,PSUs, (x) if the Termination Date occurs within the first half of the applicable performance period, full acceleration of vesting at target performance, and (y) if the Termination Date occurs within the second half of the applicable performance period, accelerated vesting of the award, based on actual performance of
| | 2023 PROXY STATEMENT | | | 47 | |
| | | NAME | | | | CHANGE IN CONTROL SUM | | | | HEALTHCARE AND INSURANCE BENEFITS (1) | | | | FAIR MARKET VALUE OF ACCELERATED VESTING (2) | | | | TOTAL (3) | | | ||||||||||||
| | | Boyer | | | | | $ | 3,613,750 | | | | | | $ | 17,070 | | | | | | $ | 837,717 | | | | | | $ | 4,468,537 | | | |
| | | Hart | | | | | $ | 2,977,339 | | | | | | $ | 23,965 | | | | | | $ | 472,454 | | | | | | $ | 3,473,758 | | | |
| | | McKelvey | | | | | $ | 3,722,500 | | | | | | $ | 23,064 | | | | | | $ | 856,388 | | | | | | $ | 4,601,952 | | | |
Post-Employment Compensation Table. Set forth below are the amounts that the Named Executive Officers would have received upon a change in control or death as of January 2, 2016. In calculating the amounts in the table, the Company based the stock distribution values on a price of $36.56 per share, which was the closing price of the Common Stock on the Nasdaq as of January 2, 2016.
Name | Restricted Stock Units ($) | Stock Appreciation Rights ($) | Performance Shares ($) | Total ($) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Kosta N. Kartsotis | -0- | -0- | -0- | -0- | |||||||||
Dennis R. Secor | 2,346,617 | -0- | 359,531 | 2,706,148 | |||||||||
Darren E. Hart | 1,294,261 | -0- | 120,685 | 1,414,946 | |||||||||
Greg A. McKelvey | 2,287,047 | -0- | 363,625 | 2,650,672 | |||||||||
John A. White | 1,217,156 | -0- | 125,986 | 1,343,142 | |||||||||
Equity Compensation Plan Information
The following table provides certain information as of January 2, 2016 with respect to our equity compensation plans under which our equity securities are authorized for issuance:
Plan Category | (a) Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights(1) | (b) Average Exercise Price of Outstanding Options, Warrants and Rights | (c) Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | |||
|---|---|---|---|---|---|---|
Equity compensation plans approved by security holders | 391,222 | $52.80(2) | 362,272 | |||
Equity compensation plans not approved by security holders | Not applicable | Not applicable | Not applicable | |||
Total | 391,222 | 362,272 |
(1)Includes 11,903 shares of Common Stock that would be issued upon exercise of all stock appreciation rights as of January 2, 2016 based on the closing price of our Common Stock on the Nasdaq on January 2, 2016, which was $36.56 per share.(2)Excludes restricted stock units and performance shares.
Section 16(a) Beneficial Ownership Reporting Compliance
Certain Relationships and Related Transactions
Mr. Rasheed Shroff (the son of Mr. Jal S. Shroff) is an employee of Fossil Asia Pacific Ltd., a wholly-owned subsidiary of the Company. Mr. Rasheed Shroff earned approximately $259,713 in cash compensation in fiscal 2015. In addition, under the 2008 Incentive Plan, Mr. Rasheed Shroff received a grant of 1,045 restricted stock units.
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| | 2023 PROXY STATEMENT | | | 49 | |
OF COMPENSATION PAID TO THE COMPANY’S NAMED
EXECUTIVE
OFFICERS
"
| | The Board of Directors unanimously recommends that stockholders vote “FOR” the approval, on an advisory basis, of the compensation of our Named Executive Officers as disclosed in the compensation discussion and analysis. | |
| | 50 | | | WWW.FOSSILGROUP.COM | |
OF
| | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE OPTION OF EVERY “1 YEAR” FOR FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION. | |
| | 2023 PROXY STATEMENT | | | 51 | |
2023 LONG-TERM INCENTIVE PLAN
Upon recommendation
As of March 31, 2016, 4,685,030 shares of Common Stock were authorized for issuance, in the aggregate, under the Company's 2008 Long-Term Incentive Plan, 4,462,486, of which have been issued or are issuable, leaving 222,544 shares currently available for future issuance under the plan.
Following the Board's approval of the 2016 Plan, the Compensation Committee approved grants of restricted stock units and performance awards under the 2016 Plan with respect to an aggregate of 434,755 shares of Common Stock, subject to stockholder approval of the 2016 Plan at the Annual Meeting or any adjournment thereof. These equity awards were granted subject to, and may not be exercised prior to, stockholder approval of the 2016 Plan. No other awards under the 2016 Plan have been granted subject to stockholder approval. Stockholder approval of the 2016 Plan will be deemed to constitute approval of the equity awards previously granted under the 2016 Plan and such equity awards will count against the shares authorized for issuance under the 2016 Plan. For additional information on these grants, see "—New Plan Benefits" below.
Replacement of Prior Incentive Plans
The 2016 Plan will replace the Company's 2008 Long-Term Incentive Plan described above. The Board of Directors of the Company has approved the termination of the 2008 Long-Term Incentive Plan, effective upon the date of stockholder approval of the 2016 Plan. If the 2016 Plan is approved, no new awards will be made under the Company's 2008 Long-Term Incentive Plan.
��success. It is the judgment of the Boardour board of Directors of the Companydirectors that the 20162023 Plan is in the best interestinterests of the Company and its stockholders.
| | The board of directors recommends that the stockholders vote “FOR” the approval of the 2023 Plan. | |
| | | PLAN CATEGORY | | | | (A) NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (1) | | | | (B) WEIGHTED-AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS | | | | (C) NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (A)) | | | |||||||||
| | | Equity compensation plans approved by security holders | | | | | | 1,967,257 | | | | | | $ | 55.31 (2) | | | | | | | 2,881,366 | | | |
| | | Equity compensation plans not approved by security holders | | | | Not applicable | | | | Not applicable | | | | Not applicable | | | |||||||||
| | | Total | | | | | | 1,967,257 | | | | | | $ | 55.31 | | | | | | | 2,881,366 | | | |
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Exempt Shares.
back to the Company or shares cancelled on account of termination, expiration, or lapse of an award shall again be available for grant of incentive stock options under the 2016 2023
| | 2023 PROXY STATEMENT | | | 53 | |
On March 30, 2016, the closing price of the Common Stock on the Nasdaq Global Select Market was $44.05 per share.
Financial Effects of Awards
The Company will receive no monetary consideration for the granting of awards under the 2016 Plan, unless otherwise provided when granting restricted stock or restricted stock units. The Company will receive no monetary consideration other than the option price for shares of Common Stock issued to participants upon the exercise of their stock options and the Company will receive no monetary consideration upon the exercise of SARs.
2023 Plan.
with irrevocable instructions from the participant to a broker or dealer, reasonably acceptable to the Company,us, to sell certain of the shares of Common Stock purchased upon the exercise of the option or to pledge such shares to the broker as collateral for a loan from the broker and to deliver to the Companyus the amount of sale or loan proceeds necessary to pay the purchase price, andprice; and/or (iv) by any other form of valid consideration that is acceptable to the Committee in its sole discretion.
Stock options will be exercisable as set forth in the option agreements pursuant to which they are issued, but in no event will stock options be exercisable after the expiration of ten years from the date of grant. Options are not transferable other than by will or the laws of descent and distribution (or with respect to non-qualified stock options, by qualified domestic relations order), except that the Committee may, in its discretion, permit further transferability of a non-qualified stock option and, unless otherwise provided in the option agreement, a non-qualified stock option may be transferred to: (1) one or more members of the immediate family of the participant; (2) a trust for the benefit of one or more members of the immediate family of the participant; (3) a partnership, the sole partners of which are the participant, members of the immediate family of the participant, and entities which are controlled by the participant and/or members of the immediate family of the participant; (4) an entity exempt from federal income tax pursuant to Section 501(c)(3) of the Code; or (5) a split interest trust or pooled income fund described in Section 2522(c)(2) of the Code, provided that (x) there shall be no consideration for any such transfer; (y) the option agreement must expressly provide for transferability; and (z) subsequent transfers are prohibited other than by will or the laws of descent and distribution.
freestanding SARs, may, but need not, relate to options. A SAR isor in conjunction with options granted under the right2023 Plan, or tandem SARs. SARs entitle a participant to receive an amount, in cash and/or common stock, equal to the excess of the fair market value of a share
| | 54 | | | WWW.FOSSILGROUP.COM | |
2023 Plan.
be contingent upon achieving pre-established performance goals (as discusseddescribed below) by the end of the performance period. The Committee will determine the length of the performance period, the maximum payment value of an award, and the minimum performance goals required before payment will be made, so long as such provisions are not inconsistent with the terms of the 20162023 Plan, and to the extent an award is subject to Section 409A of the Code, are in compliance with the applicable requirements of Section 409A of the Code and any applicable regulations or guidance.
Other Awards
The Committee may grant other forms of awards payable in cash or shares of Common Stock if If the Committee determines, in its sole discretion, that such other formthe established performance measures or objectives are no longer suitable because of award is consistent with the purposes and restrictions of the 2016 Plan. The terms and conditions of such other form of award shall be specified by the grant. Such other awards may be granted for no cash consideration, for such minimum consideration as may be required by applicable law,a change in our business, operations, corporate structure, or for such other consideration as may be specified byreasons that the grant.
Dividend Equivalent Rights
TheCommittee deems satisfactory, the Committee may grant a dividend equivalent right either as a component of another awardmodify the performance measures or as a separate award. The terms and conditions ofobjectives and/or the dividend equivalent right shall be specified by the grant. Dividend equivalents credited to the holder of a dividend equivalent right may be paid currently or may be deemed to be reinvested in additional shares of Common Stock. Any such reinvestment shall be at the fair market value at the time thereof. Dividend equivalent rights may be settled in cash, shares of Common Stock, or a combination thereof.
performance period.
| | 2023 PROXY STATEMENT | | | 55 | |
employee turnover; specified objective social goals; safety record; or store sales or productivity.productivity or any other criteria determined by the Committee. Any Performance Criteria may be used to measure the performance of the Company as a whole or any business unit of the Company and may be measured relative to a peer group or index. Any Performance Criteria may include or exclude (i) events that are of an unusual nature or indicate infrequency of occurrence, (ii) gains or losses on the disposition of a business, (iii) changes in tax or accounting regulations or laws, (iv) the effect of a merger or acquisition, as identified in the Company'sCompany’s quarterly and annual earnings releases, or (v) other similar occurrences. In all other respects, Performance Criteria shall be calculated in
grant.
Each outside directorAwards
Restrictedrestricted stock units granted to such outside directors shall become 100% fully vested and convertible into shares of Common Stockas follows: (i) for grants made on the date of an Annual Stockholders Meeting,annual stockholders meeting, on the earlier of the first anniversary of the date of grant or the first Annual Stockholders Meetingannual stockholders meeting following the date of grant that is held at least 50 weeks following the date of grant, and (ii) for grants made to an individual first appointed as an outside director other than on the date of an annual stockholders meeting, one year from the date of grant, in either case, provided the outside director is providing services to the Company or a subsidiary on such date; and (ii) for grants made to an individual first being appointed an outside director other than on the date of an Annual Stockholders Meeting, one year from the date of grant.vesting date. Notwithstanding the foregoing, in the event of an outside director'sdirector’s termination of service due to his or her death, all
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Vesting, of Awards
Except as otherwise provided below, theForfeiture, Assignment. The Committee, in its sole discretion, may determine thatshall establish the vesting terms applicable to an award, will be immediately vested in whole or in part, orprovided that all or any portion maysuch vesting terms shall not be vested until a date, or dates, subsequent to its date of grant, or until the occurrence of one or more specified events, subject in any case toinconsistent with the terms of the 20162023 Plan. If the Committee imposes conditions upon vesting, then, exceptExcept as otherwise provided below, subsequent toin the 2023 Plan, no award (nor any portion of an award, even on a pro rata basis) that would result in the issuance of our common stock may vest earlier than one year after the date of grant the Committee may, in its sole discretion, accelerate the date on which all or any portion of the award may be vested; provided, however, that shares of Common Stock underlying all or any portion of a non-qualified stock option or incentive stock option for which the Committee accelerates the vesting date(other than substitute awards) other than in the event of the participant'sa participant’s death, total and permanent disability, retirement, or the occurrence of a "changechange in control" shall be "exempt shares." As discussed above, only 10% of the shares of Common Stock that may be issued pursuant to an award under the 2016 Plan may be designated as exempt shares.
The Committee must grant all "full value awards" (i.e., awards with a net benefit to the participant, without regard to certain restrictions, equal to the aggregate fair market value of the total shares of Common Stock subject to the award) in accordance with the following provisions: (i) all full value awards granted by the Committee that constitute performance awards must vest no earlier than one (1) year after the date of grant; (ii) all full value awards granted by the Committee that constitute "tenure awards" (i.e., awards that vest over time based on the participant's continued employment with or service to the Company) must vest no earlier than over the three (3) year period commencing on the date of grant on a pro rata basis; and (iii) the Committee may not accelerate the date on which all or any portion of a full value award may be vested or waive the period an award is restricted on a full value award except upon the participant's death, total and permanent disability, retirement, or the occurrence of a "change in control." Notwithstanding the foregoing, for full value awards, the Committee may, in its sole discretion, grant awards with more favorable vesting provisions than set forth in the 2023 Plan, or accelerate the vesting or waive the restriction period an award is restricted,for awards at any time, provided that the shares of Common Stockour common stock subject to such awards shall be designated “Exempt Shares” (as defined in the 2023 Plan). The number of Exempt Shares is limited to 5% of the number of shares available for issuance under the 2023 Plan.
from federal income tax pursuant to Section 501(c)(3) of the Code or any successor provision; or (v) a split interest trust or pooled income fund described in Section 2522(c)(2) of the Code or any successor provision, provided that (x) there shall be no consideration for any such transfer, (y) the applicable award agreement pursuant to which such award is granted must be approved by the Committee and must expressly provide for such transferability, and (z) subsequent transfers of transferred awards shall be prohibited except those by will or the laws of descent and distribution.
| | 2023 PROXY STATEMENT | | | 57 | |
cause the 20162023 Plan or any stock option to violate Section 422 of the Code or Section 409A of the Code. All such adjustments must be made in accordance with the rules of any securities exchange, stock market, or stock quotation system to which the Company iswe are subject.
No Repricing
No awards under the 2016 Plan may be repriced or exchanged for awards with lower exercise prices because of a drop in market prices since grant, unless such repricings or exchanges are approved by the stockholders of the Company.
Any amendments made shall, to the extent deemed necessary or advisable by the Committee, be applicable to any outstanding awards theretofore granted under the 20162023 Plan, notwithstanding any contrary provisions contained in any award agreement. In the event of any such amendment to the 20162023 Plan, the holder of any award outstanding under the 20162023 Plan shall, upon request of the
Tax
thereon arewill be subject to tax as it vests, plus an interest charge at the underpayment rate plus 1% and a 20% penalty tax. Certain performance awards, stock options, SARs, restricted stock units, and certain types of restricted stock are subject to Section 409A of the Code.
| | 58 | | | WWW.FOSSILGROUP.COM | |
Non-qualifiedshares.
treated as compensation taxable as ordinary income to the participant. The participant'sparticipant’s tax basis for the shares of Common Stock acquired under a non-qualifiednonqualified stock option will be equal to the option price paid for such shares, of Common Stock, plus any amounts included in the participant'sparticipant’s income as compensation. When a participant disposes of shares of Common Stock acquired by exercise of a non-qualifiednonqualified stock option, any amount received in excess of the participant'sparticipant’s tax basis for such shares will be treated as short-term or long-term capital gain, depending upon how long the participant has held the shares of Common Stock.shares. If the amount received is less than the participant'sparticipant’s tax basis for such shares, the loss will be treated as short-term or long-term capital loss, depending upon how long the participant has held the shares.
| | 2023 PROXY STATEMENT | | | 59 | |
Stock Appreciation Rights
. Generally, a participant who receives a stand-alone SAR will not recognize taxable income at the time the stand-alone SAR is granted, provided that the SAR is exempt from or complies with Section 409A of the Code. If an employee receives the appreciation inherent in the SARs in cash, the cash will be taxed as ordinary income to the recipient at the time it is received. If a recipient receives the appreciation inherent in the SARs in stock, the spread between the then current market value and the grant price, if any, will be taxed as ordinary income to the employee at the time it is received. In general, there will be no federal income tax deduction allowed to the Companyus upon the grant or termination of SARs. However, upon the exercise of a SAR, the Companywe will be entitled to a deduction equal to the amount of ordinary income the recipient is required to recognize as a result of the exercise.
To satisfy federal income tax withholding requirements, the Companywe will have the right to require that, as a condition to the registration of the shares in the participant’s name or, if requested by the participant in writing in accordance with the terms of the 2023 Plan, to the delivery of any certificate for shares of Common Stock,common stock, the participant remit to the Companyus an amount sufficient to satisfy the withholding requirements. Alternatively,Such payment may be made (i) by the delivery of cash to the Company may withhold a portionin an amount that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the shares of Common Stock (valued at fair market value) that otherwise would be issued toCompany; (ii) if the Company, in its sole discretion, so consents in writing, the actual delivery by the participant to satisfy allthe Company of shares of common stock, which shares so delivered have an aggregate fair market value that equals or partexceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the withholding tax obligations or may,Company; (iii) if the Company, in its sole discretion, so consents in writing, accept deliverythe Company’s withholding of a number of shares to be delivered upon the exercise of the Common Stock witha stock option, which shares so withheld have an aggregate fair market value that equals or exceeds the required tax withholding payment.
obligations of the Company; or (iv) any combination of (i), (ii), or (iii). To the extent the number of shares delivered in satisfaction of the tax withholding requirements exceeds the required tax withholding due, the Company shall make a cash payment to the participant equal to the excess amount as soon as administratively practicable thereafter.
Deferred compensation that is subject to Section 409A of the Code will be subject to certain federal income tax withholding and reporting requirements.
| | 60 | | | WWW.FOSSILGROUP.COM | |
Million Dollar Deduction Limit and Other Tax Matters
. The Company may not deduct compensation of more than $1,000,000 that is paid to “covered employees” (as defined in Section 162(m) of the Code), which include an individual employed by the Company(or, in certain circumstances, his or her beneficiaries) who, on the last day ofat any time during the taxable year, either is the Company'sCompany’s principal executive officer, principal financial officer, or an individual who is among the three highest compensated officers for the taxable year (other than an individual who was either the Company’s principal executive officer or theits principal financial officer). Theofficer at any time during the taxable year), or anyone who was a covered employee for purposes of Section 162(m) of the Code for any tax year beginning on or after January 1, 2017. This limitation on deductions does not apply to certain types of compensation, including qualified performance-based compensation, and only applies to compensation paid by a publicly-traded corporation (and not compensation paid by non-corporate entities). and may not apply to certain types of compensation, such as qualified performance-based compensation, that is payable pursuant to a written, binding contract (such as an award agreement corresponding to a Prior Plan Award or an award granted under the 2023 Plan) that was in place as of November 2, 2017, so long as the contract is not materially modified after that date. To the extent that compensation is payable pursuant to a Prior Plan Award granted on or before November 2, 2017, and if the Company determines that Section 162(m) of the Code shallwill apply to any such awards, granted pursuant to the 2016 Plan, the Company intends that suchthe terms of those awards will not be
Effective March 15, 2016,
2016, the closing sale price of the Common Stock on The Nasdaq Global Select Market was $40.64our common stock is $3.18 per share.
Name and Position | Dollar Value ($)(1) | Number of Restricted Stock Units (#) | Number of Performance Shares (#)(2) | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
Kosta N. Kartsotis | -0- | -0- | -0- | |||||||
Dennis R. Secor | 675,000 | 9,378 | 4,689 | |||||||
Darren E. Hart | 708,750 | 9,847 | 4,924 | |||||||
Greg A. McKelvey | 675,000 | 9,378 | 4,689 | |||||||
John A. White | 765,000 | 10,629 | 5,315 | |||||||
Executive officers as a group | 4,220,314 | 58,636 | 29,320 | |||||||
Non-employee directors as a group | -0- | -0- | -0- | |||||||
Non-executive officer employees as a group | 17,120,252 | 346,799 | -0- | |||||||
(1)Dollar value isshare based on thenumber of shares indicated (at target payout (100%) in the case of the performance shares) multiplied by the midpoint of the high and low sales pricesclosing price of ourCommon Stock on The Nasdaq Global Select Marketcommon stock on March15, 2016, which was $47.99 per share.(2)The number of shares of Common Stock underlying performance shares assumes a target payout (100%) based on the Company's achievement of target performance rankings. The actual number of shares issued could range from 0% to 150% of the share amounts based on the Company's achievement of performance targets during the three year performance period.
proposal to approve the 2016 Plan requires the affirmative vote of the holders of a majority of the shares of Common Stock present,our voting securities represented in person or by proxy andat the Annual Meeting entitled to vote on such proposal that vote for or against such proposal is required for the subject matter.approval of the 2023 Plan. All members of the Board of Directors are eligible for awards under the 20162023 Plan and thus, have a personal interest in the approval of the 20162023 Plan.THE BOARD
| | The Board of Directors recommends a vote “FOR” the 2023 Plan. | |
| | 2023 PROXY STATEMENT | | | 61 | |
INCORPORATION TO PERMIT EXCULPATION OF OFFICERS
| | 62 | | | WWW.FOSSILGROUP.COM | |
| | THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE EXCULPATION AMENDMENT. | |
| | 2023 PROXY STATEMENT | | | 63 | |
OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
the fiscal year ending December 31, 2016.30, 2023. Stockholder ratification of the appointment is not required under the laws of the State of Delaware, but the Board has
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THERATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
FEES
| | | | | | | Fiscal Year 2022 | | | | Fiscal Year 2021 | | | ||||||
| | | Audit Fees (1) | | | | | $ | 3,155,850 | | | | | | $ | 3,256,528 | | | |
| | | Audit-Related Fees (2) | | | | | $ | 112,270 | | | | | | $ | 114,606 | | | |
| | | Tax Fees (3) | | | | | $ | 290,561 | | | | | | $ | 193,330 | | | |
| | | Other fees (4) | | | | | $ | 163,105 | | | | | | | — | | | |
| | | Total Fees | | | | | $ | 3,721,786 | | | | | | $ | 3,564,464 | | | |
| | Fiscal Year 2015 | Fiscal Year 2014 | |||||
|---|---|---|---|---|---|---|---|
Audit Fees(1) | $ | 3,858,861 | $ | 3,303,372 | |||
Audit-Related Fees(2) | 517,050 | 108,050 | |||||
Tax Fees(3) | 265,108 | 291,556 | |||||
All Other Fees(4) | 373,000 | 0 | |||||
| | | | | | | | |
Total | $ | 5,014,019 | $ | 3,702,978 | |||
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
- (1)
Pre-Approval of Independent Registered Public Accounting Firm Fees and Services Policy
firm services where the Company deems it necessary or advisable that such services commence prior to the next regularly scheduled Audit Committee meeting (provided that the Audit Committee chairperson must report to the full Audit Committee on any pre-approval determinations).
| | 64 | | | WWW.FOSSILGROUP.COM | |
| | | |
| | The Board of Directors unanimously recommends that the stockholders vote “FOR” the ratification of the appointment of Deloitte & Touche LLP as the company’s independent registered public accounting firm for the fiscal year ending December 30, 2023 | |
| | 2023 PROXY STATEMENT | | | 65 | |
Vice President, General Counsel and Secretary
| | It is IMPORTANT that proxies be voted promptly. Stockholders who do not expect to attend the meeting and wish their stock to be voted are urged to vote by internet, phone or mail as described in the proxy card or proxy notice. | |
| | 66 | | | WWW.FOSSILGROUP.COM | |
You may obtaina proxy card or notice or Proxy Notice, please click “Registration for Registered Holders” and enter your name, phone number and email address.
| | 2023 PROXY STATEMENT | | | 67 | |
| | | Proposal No. | | | | Description | | | | Board Voting Recommendations | | | | Page | | |
| | | 1 | | | | Election of Directors | | | | FOR All Director Nominees | | | | | | |
| | | 2 | | | | Advisory Vote to Approve the Compensation of our Named Executive Officers | | | | FOR | | | | | | |
| | | 3 | | | | Advisory Vote on Whether an Advisory Vote on Executive Compensation Should Be Held Every One, Two or Three Years | | | | EVERY ONE YEAR | | | | | | |
| | | 4 | | | | Approval of the Fossil Group, Inc. 2023 Long-Term Incentive Plan | | | | FOR | | | | | | |
| | | 5 | | | | Approval of the Amendment to the Certificate of Incorporation to permit exculpation of officers | | | | FOR | | | | | | |
| | | 6 | | | | Ratification of the Appointment of Independent Auditors | | | | FOR | | | | | |
| | 68 | | | WWW.FOSSILGROUP.COM | |
| | ![[MISSING IMAGE: ic_internet-4c.jpg]](/files/DEF 14A/0001104659-23-044554/ic_internet-4c.jpg) | | | ![[MISSING IMAGE: ic_mail-4c.jpg]](/files/DEF 14A/0001104659-23-044554/ic_mail-4c.jpg) | | | ![[MISSING IMAGE: ic_telephone-4c.jpg]](/files/DEF 14A/0001104659-23-044554/ic_telephone-4c.jpg) | |
| | INTERNET | | | TELEPHONE | | | MAIL | |
| | Vote your proxy on the Internet: Go to www.AALvote.com/FOSL Have your proxy card available when you access the above website. Follow prompts to vote your shares. | | | Vote your proxy by phone: Call 1-(866) 804-9616 Use any touch-tone telephone to vote your proxy. Have your proxy card available when you call. Follow the voting instructions to vote your proxy. | | | Vote your proxy by mail: Mark, sign and date your proxy card, then detach it, and return it in the postage-paid envelope provided. | |
| | 2023 PROXY STATEMENT | | | 69 | |
| | 70 | | | WWW.FOSSILGROUP.COM | |
| | 2023 PROXY STATEMENT | | | 71 | |
| | 72 | |
| | | |
| WWW.FOSSILGROUP.COM |
|
April 14, 2016Richardson, Texas
IT IS IMPORTANT THAT PROXIES BE VOTED PROMPTLY. STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING AND WISH THEIR STOCK TO BE VOTED ARE URGED TO VOTE BY INTERNET, PHONE OR MAIL AS DESCRIBED IN THE PROXY CARD OR PROXY NOTICE.
FOSSIL GROUP, INC.2016
2023 LONG-TERM INCENTIVE PLAN2016 Long-Term Incentive Plan (the "“Plan"”) was adopted by the Board of Directors of Fossil Group, Inc., a Delaware corporation (the "“Company"”), on March 1, 2023 (the “Board Approval Date”) to be effective as of March 15, 2016 (the "Effective Date"), subject to approvalthe date the Plan is approved by the Company's stockholders.
Company’s stockholders at the Company’s next Annual Shareholder Meeting (the “
PURPOSECompany'sCompany’s welfare;
DEFINITIONS"“Annual Stockholders Meeting” means the annual general meeting of the Company’s stockholders, as established by the Board, at which the members of the Company’s Board or any class thereof are elected."” means all legal requirements relating to the administration of equity incentive plans and the issuance and distribution of shares of Common Stock, if any, under applicable corporate laws, applicable securities laws, the rules of any exchange or inter-dealer quotation system upon which the Company'sCompany’s securities are listed or quoted, the rules of any foreign jurisdiction applicable to Incentives granted to residents therein, and any other applicable law, rule or restriction. 2.2 ""” is defined inSection 3.2(b) hereof. 2.3 ""” means the grant of any Incentive Stock Option, Nonqualified Stock Option, Restricted Stock, SAR, Restricted Stock Units,Unit, Performance Award, Dividend Equivalent Right or Other Award, whether granted singly or in combination or in tandem (each individually referred to herein as an "“Incentive"”). 2.4 ""” means a written agreement between a Participant and the Company which sets out the terms of the grant of an Award. 2.5 " 2023 PROXY STATEMENT A-1 "” means the period set forth in the Award Agreement during which one or more Incentives granted under an Award may be exercised. 2.6 "2.7 “Board"” means the board of directors of the Company. 2.7 ""” means the occurrence of the event set forth in any one of the following paragraphs, except as otherwise provided herein:Company'sCompany’s then outstanding securities, or if such Person is the Beneficial Owner, directly or indirectly, of securities of the Company representing 30% or more of the combined voting power of the Company'sCompany’s outstanding securities as of the date the particular Award is granted, such person becomes the Beneficial owner,Owner, directly or indirectly, of the combined voting power of additional securities representing 10% or more of the Company'sCompany’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (iii) below; orCompany'sCompany’s stockholders was approved or recommended by a vote of at least a majority of the directors then still in office who either were directors on the Effective Date of this Plan or whose appointment, election or nomination for election was previously so approved or recommended; orCompany'sCompany’s then outstanding securities; orCompany'sCompany’s assets, other than a sale or disposition by the Company of all or substantially all of the Company'sCompany’s assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. ""” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
“Beneficially Owned” with respect to any securities shall mean having “beneficial ownership” of such securities (as determined pursuant to Rule 13d-3 under the Exchange Act, including pursuant to any agreement, arrangement or understanding, whether or not in writing. Without duplicative counting of the same securities by the same holder, securities A-2 WWW.FOSSILGROUP.COM
"
The
2.8 "Code.
2.9 "
2.10 "
2.11 "
2.12 "
2.13 "
2.14 "
2.15 "
2.16 "
2.17 "
Subsidiary of the Company provided,Companyprovided, however, in the case of individuals whose employment status, by virtue of their employer or residence, is not determined under Section 3401(c) of the
| | 2023 PROXY STATEMENT | | | A-3 | |
2.18 "
2.19 "
2.20 "Exercise Notice" is defined inSection 9.3(b) below.
2.21 "Executive Officer" means an officer of the Company or a Subsidiary subject to Section 16 of the Exchange Act or a "covered employee" as defined in Section 162(m)(3) of the Code.
2.22 "
2.23 "“Exempt Shares.”
2.24 "Full Value Award" means any Award with a net benefit to the Participant, without regard to any restrictions such as those described inSection 6.4(b), equal to the aggregate Fair Market Value of the total shares of Common Stock subject to the Award. Full Value Awards include Restricted Stock and Restricted Stock Units, but do not include Stock Options and SARs.
2.31 "“Other Award"” means an Award issued pursuant toSection 6.9 hereof.
| | A-4 | | | WWW.FOSSILGROUP.COM | |
2.38 "
2.39 "
2.40 "
2.41 "
2.42 "applicable Award Agreement.
2.43 "
2.44 "
2.45 "
2.46 "
foregoing, an entity shall not be a "Subsidiary"“Subsidiary” for purposes of this Plan, unless at least twenty-five percent (25%) of such entity'sentity’s Voting Equity is owned either directly or indirectly by the Company.
2.47 "
2.48 "
| | 2023 PROXY STATEMENT | | | A-5 | |
2.49 "
2.50 "
| | A-6 | | | WWW.FOSSILGROUP.COM | |
Award.
limited by any provision of the Plan, including any provision which by its terms is applicable notwithstanding any other provision of the Plan to the contrary.
ELIGIBILITY
| | 2023 PROXY STATEMENT | | | A-7 | |
SHARES SUBJECT TO PLAN
(a) Subject to adjustment as provided in
(b) Exempt Shares. No more than ten percent (10%) of the shares of Common Stock that may be delivered pursuant to Awards underSection 5.1(a) may be shares designated as "Exempt Shares."
5.2 Reuse of Shares. To the extent that any Award under this Plan or any Prior Plan Awards shall be forfeited, shall expire or be canceled, in whole or in part, then the number of shares of Common Stock covered by the Award or stock optionPrior Plan Award so forfeited, expired or canceled may again be awarded pursuant to the provisions of this Plan. Awards that may be satisfied either by the issuance of shares of Common Stock or by cash or other consideration shall be counted against the maximum number of shares of Common Stock that may be issued under this Plan only during the period that the Award is outstanding or to the extent the Award is ultimately satisfied by the issuance of shares of Common Stock. Shares of Common Stock otherwise deliverable pursuant to an Award that are withheld upon exercise or vesting of an Award for purposes of paying the exercise price or tax withholdings shall be treated as delivered to the Participant and shall be counted against the maximum number of shares of Common Stock that may be issued under this Plan. Awards will not reduce the number of shares of Common Stock that may be issued pursuant to this Plan if the settlement of the Award will not require the issuance of shares of Common Stock, as, for example, a SAR that can be satisfied only by the payment of cash. Notwithstanding any provisions of the Plan to the contrary, only shares forfeited back to the Company or shares canceled on account of termination, expiration or lapse of an Award, shall again be available for grant of Incentive Stock Options under the Plan, but shall not increase the maximum number of shares described inSection 5.1 above as the maximum number of shares of Common Stock that may be delivered pursuant to Incentive Stock Options.
GRANT OF AWARDS
| | A-8 | | | WWW.FOSSILGROUP.COM | |
equivalents may be compounded and shall be paid upon such terms and conditions as may be specified by the grant.
No dividends or Dividend Equivalent Rights may be paid or granted with respect to any Stock Option granted hereunder.
| | 2023 PROXY STATEMENT | | | A-9 | |
(b)Restrictions and Conditions. Shares of Restricted Stock shall be subject to the following restrictions and conditions:
| | A-10 | | | WWW.FOSSILGROUP.COM | |
applicable requirements of Section 409A of the Code and the regulations or other guidance issued thereunder, and (iii) to the extent the Committee determines that a SAR shall comply with the requirements of Section 162(m) of the Code and the regulations and other guidance issued thereunder, in compliance with the applicable requirements of Section 162(m) of the Code and the regulations or other guidance issued thereunder. The grant of the SAR may provide that the holder may be paid for the value of the SAR either in cash or in shares of Common Stock, or a combination thereof. In the event of the exercise of a SAR payable in shares of Common Stock, the holder of the SAR shall receive that number of whole shares of Common Stock having an aggregate Fair Market Value on the date of exercise equal to the value obtained by multiplying (i)(a) the difference between the Fair Market Value of a share of Common Stock on the date of exercise over the SAR Price as set forth in such SAR (or other value specified in the agreementAward Agreement granting the SAR), by (ii)(b) the number of shares of Common Stock as to which the SAR is exercised, with a cash settlement to be made for any fractional shares of Common Stock. The SAR Price for any share of Common Stock subject to a SAR may be equal to or greater than the Fair Market Value of the share on the Date of Grant. The Committee, in its sole discretion, may place a ceiling on the amount payable upon exercise of a SAR, but any such limitation shall be specified at the time that the SAR is granted.
The value of Restricted Stock Units may be paid in shares of common stock, cash, or a combination of both, as determined by the Committee.
this Plan that may be applicable to such shares of Common Stock. Each Performance Award granted to one or more Participants shall have its own terms and conditions.
To the extent the Committee determines that a Performance Award shall comply with the requirements of Section 162(m) of the Code and the regulations and other guidance issued thereunder, and if it is determined to be necessary in order to satisfy Section 162(m) of the Code, at the time of the grant of a Performance Award (other than a Stock Option) and to the extent permitted under Section 162(m) of the Code and the regulations issued thereunder, the Committee shall provide for the manner in which the Performance Goals shall be reduced to take into account the negative effect on the achievement of specified levels of the Performance Goals which may result from enumerated corporate transactions, events that are of an unusual nature or indicate infrequency of occurrence, extraordinary events, accounting changes and other similar occurrences which were unanticipated at the time the Performance Goal was initially established. In no event, however, may the Committee increase the amount earned under such a Performance Award, unless the reduction in the Performance Goals would reduce or eliminate the amount to be earned under the Performance Award and the Committee determines not to make such reduction or elimination.
With respect to a Performance Award that is not intended to satisfy the requirements of Code Section 162(m), if
| | 2023 PROXY STATEMENT | | | A-11 | |
(c) Notwithstanding the foregoing, in order to comply with the requirements of Section 162(m) of the Code, if applicable, no Participant may receive in any calendar year Performance Awards intended to comply with the requirements of Section 162(m) of the Code which have an aggregate value of more than $1,000,000, and if such Performance Awards involve the issuance of shares of Common Stock, said aggregate value shall be based on the Fair Market Value of such shares on the time of the grant of the Performance Award. In no event, however, shall any Performance Awards not intended to comply with the requirements of Section 162(m) of the Code be issued contingent upon the failure to attain the Performance Goals applicable to any Performance Awards granted hereunder that the Committee intends to comply with the requirements of Section 162(m) of the Code.
(d) Notwithstanding anything to the contrary contained herein, any Performance Awards of Restricted Stock or Restricted Stock Units or other Performance Awards based on shares of Common Stock, or in whole or in part on the value of the underlying Common Stock or other securities of the Company, may not provide for the payment of dividends or dividend equivalents during the performance period, but may only provide that dividends or dividend equivalents
accrued during the performance period shall be payable at the time such Performance Awards vest and are paid.
6.8 Dividend Equivalent Rights. The Committee may grant a Dividend Equivalent Right to any Participant, either as a component of another Award or as a separate Award. The terms and conditions of the Dividend Equivalent Right shall be specified by the grant. Dividend equivalents credited to the holder of a Dividend Equivalent Right mayshall be paid currentlyonly as the applicable Award vests or may be deemed to be reinvested in additional shares of Common Stock (which may thereafter accrue additional dividend equivalents)., which shares of Common Stock shall be subject to the same vesting conditions as the Award to which they relate. Any such reinvestment shall be at the Fair Market Value at the time thereof. Dividend Equivalent Rights may be settled in cash or shares of Common Stock, or a combination thereof, in a single payment or in installments. A Dividend Equivalent Right granted as a component of another Award may provide that such Dividend Equivalent Right shall be settled upon exercise, settlement, or payment of, or lapse of restrictions on, such other Award, and that such Dividend Equivalent Right granted as a component of another Award may also contain terms and conditions different from such other Award.
Award; provided that (i) any Dividend Equivalent Rights with respect to such Award shall be withheld by the Company for the Participant’s account until such Award is vested, subject to such terms as determined by the Committee; and (ii) such Dividend Equivalent Rights so withheld by the Company and attributable to any particular Award shall be distributed to such Participant in cash or, at the discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such Dividend Equivalent Rights, if applicable, upon vesting of the Award and if such Award is forfeited, the Participant shall have no right to such Dividend Equivalent Rights. No Dividend Equivalent Rights may be paid or granted with respect to any Stock Option or SAR.
| | A-12 | | | WWW.FOSSILGROUP.COM | |
identified in the Company'sCompany’s quarterly and annual earnings releases, or (v) other similar occurrences. In all other respects, Performance Criteria shall be calculated in accordance with the Company'sCompany’s financial statements, under generally accepted accounting principles, or under a methodology established by the Committee prior to the issuance of an Award which is consistently applied and identified in the audited financial statements, including footnotes, or the Compensation Discussion and Analysis section of the Company'sCompany’s annual report and/or proxy. However, to the extent Section 162(m) of the Code is applicable, the Committee may not in any event increase the amount of compensation payable to an individual upon the attainment of a Performance Goal.
report.
OUTSIDE DIRECTOR AUTOMATIC GRANTS
pursuant to this
Section 7.1, such grant shall only be made if the number of shares subject to grant under thisSection 7.1 is sufficient to make all automatic grants required to be made pursuant to thisSection 7.1 on such Date of Grant.| | 2023 PROXY STATEMENT | | | A-13 | |
AWARD PERIOD; VESTING
(a)General.
(b)Full Value Award Vesting. Except as otherwise provided herein, no Incentive (nor any portion of an Incentive, even on a pro rata basis) that would result in the Committee must grant all Full Value Awards in accordance with the following provisions:
(i) All Full Value Awards granted by the Committee that constitute Performance Awards mustissuance of Common Stock may vest no earlier than one (1) year after the Date of Grant.
(ii) All Full Value Awards granted byGrant (other than substitute Incentives) other than in the Committee that constitute Tenure Awards must vest no earlier than overevent of the three (3) year period commencing on the Date of Grant on a pro rata basis.
(iii) The Committee may not accelerate the date on which all or any portion of a Full Value Award may be vested or waive the Restriction Period on a Full Value Award except upon the Participant'sParticipant’s death, Total and Permanent Disability or Retirement or the occurrence of a Change in Control.
Notwithstanding the foregoing, the Committee may, in its sole discretion, grant Full Value Awards with more favorable vesting provisions than set forth in this
EXERCISE OR CONVERSION OF INCENTIVE
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electronically) together with irrevocable instructions from the Participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares of Common Stock purchased upon exercise of the Stock Option or to pledge such shares as collateral for a loan and promptly deliver to the Company the amount of sale or loan proceeds necessary to pay such purchase price, and/or (d) in any other form of valid consideration that is acceptable to the Committee in its sole discretion. In the event that shares of Restricted Stock are tendered as consideration for the exercise of a Stock Option, a number of shares of Common Stock issued upon the exercise of the Stock Option equal to the number of shares of Restricted Stock used as consideration therefor shall be subject to the same restrictions and provisions as the Restricted Stock so tendered. If the Participant fails to deliver the consideration described in this
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Participant shall receive from the Company in exchange therefor in the discretion of the Committee, and subject to the terms of the Award Agreement:
AMENDMENT OR DISCONTINUANCE
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to a Participant under the Award shall not be considered to adversely affect the rights of the Participant.
TERM
CAPITAL ADJUSTMENTS
RECAPITALIZATION, MERGER AND CONSOLIDATION
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entitled; and in such event, such Incentive shall remain subject to the same restrictions and/or other vesting requirements as existed prior to such merger, consolidation or share exchange.
An Award that by its terms would be fully vested or exercisable upon a Change in Control will be considered vested or exercisable for purposes ofSection 13.4(a) hereof. Notwithstanding the foregoing, with respect to Performance Awards, the Committee only may approve the acceleration of vesting and/or cash-out if (i) the amount payable or vested is linked to the achievement of the
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LIQUIDATION OR DISSOLUTION
INCENTIVES IN SUBSTITUTION FOR
INCENTIVES GRANTED BY OTHER ENTITIES
MISCELLANEOUS PROVISIONS
16.3 Indemnification of Board and Committee. No member of the Board or the Committee, nor any officer or Employee of the Company acting on behalf of the Board or the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board and the Committee, each officer of the Company, and each Employee of the Company acting on behalf of the Board or the Committee shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination, or interpretation to the fullest extent provided by law. Except to the extent required by any unwaiveable requirement under Applicable Law, no member of the Board or the Committee (and no Subsidiary of the Company) shall have any duties or liabilities, including without limitation any fiduciary duties, to any Participant (or any Person claiming by and through any Participant) as a result of this Plan, any Award
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the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole discretion, so consents in writing, the actual delivery by the exercising Participant to the Company of shares of Common Stock, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding payment; (iii) if the Company, in its sole discretion, so consents in writing, the Company'sCompany’s withholding of a number of shares to be delivered upon the exercise of the Stock Option, which shares so withheld have an aggregate Fair Market Value that equals or exceeds the required tax withholding payment; or (iv) any combination of (i), (ii), or (iii). To the extent the number of shares delivered in accordance with
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or agency any Common Stock issuable or issued under a Nonqualified Stock Option or SAR that has been transferred by a Participant under this
Section 16.8."
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PROXY
(Continued and to be marked, dated and signed on other side) PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE The Notice and Proxy Statement, Annual Report and Form 10-K are available FOSSIL![[MISSING IMAGE: px_proxypg1-bw.jpg]](/files/DEF 14A/0001104659-23-044554/px_proxypg1-bw.jpg)
INC.AnnualINC.Annual Meeting of StockholdersMay 25, 2016StockholdersMay 24, 2023 at 9:00 a.m., local timeThistimeThis proxy is solicited by the Board of DirectorsThe undersignedDirectorsTheappointsappoint(s) Randy S. Hyne and Heather Foster or eitherany of them, as proxies, each with the power to appoint his or her substitute, and hereby authorizesauthorize(s) them to represent and to vote, as designated on the reverse side of this proxy card,ballot, all of the shares of common stock of Fossil Group, Inc. that the undersigned isstockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 9:00 a.m., local time,AM CT on May 25, 2016,24, 2023 and any adjournment or postponement thereof.This The Annual Meeting of Stockholders will be held virtually. In order to attend the meeting, you must register at http://viewproxy.com/fossil/2023/PROVIDED.ImportantPROVIDED.Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:at http:athttp://viewproxy.com/fossil/2016
![[MISSING IMAGE: px_proxypg2-bw.jpg]](/files/DEF 14A/0001104659-23-044554/px_proxypg2-bw.jpg)
Pleasenominees:1. Election of DirectorsFOR AGAINST ABSTAIN01 Mark R.
1. Election of Directors
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The Board of Directors recommends that you vote FOR proposals 2, 3 and 4:
2the following proposal:2. Proposal to approve, on an advisory basis, the compensation of the Company’s named executive officers.
oofficers.oFORoAGAINSToABSTAINThe Board of Directors recommends that you vote ONE YEAR for the following proposal:3. Proposal to hold an advisory vote on whether an advisory vote on executive compensation should be held every one, two or three years.o1 YEARo2 YEARS o3 YEARSoABSTAINThe Board of Directors recommends that you vote FORoAGAINSToABSTAIN
3 the following proposal:4. Proposal to approve the Fossil Group, Inc. 20162023 Long-Term Incentive Plan.
oPlan.oFORoAGAINSToABSTAINThe Board of Directors recommends that you vote FORoAGAINSToABSTAIN
4 the following proposal:5. Proposal to amend the Company’s Certificate of Incorporation to permit exculpation of officers.oFORoAGAINSToABSTAINThe Board of Directors recommends that you vote FOR the following proposal:6. Proposal to ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016.
oFORoAGAINSToABSTAIN
NOTE: 30, 2023.oFORoAGAINSToABSTAINNOTE: Such other business that may properly come before the meeting.
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CONTROL NUMBER
Date _________________________________________________________Signature _____________________________________________________Signature _____________________________________________________(Joint Owners)Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. PLEASE DETACH ALONG PERFORATED LINE AND MAIL IN THE ENVELOPE PROVIDED.
PROVIDED.VIRTUAL CONTROL NUMBER
PROXY VOTING INSTRUCTIONS
PleaseINSTRUCTIONSPlease have your 11-digit control number ready when voting by Internet or Telephone,
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2022-01-02 2022-12-31