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The meeting'sAnnual Meeting will be held entirely online live via audio webcast due to the public health impact of the coronavirus outbreak (COVID-19) and to support the health and well-being of our directors, employees, stockholders, and other stakeholders. You will be able to attend and participate in the Annual Meeting online by visiting
AAnnual Meeting.
The list of stockholders will also be available during the Annual Meeting through the Annual Meeting website for those stockholders who choose to attend.
| BY ORDER OF THE BOARD OF DIRECTORS, | ||||||
 | ||||||
| /s/ Daniel P. Hart | ||||||
Daniel P. Hart Executive Vice President, Chief Legal and | ||||||
24, 2020
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Frequently Asked Questions About Voting and the Annual Meeting | ||||||||
Proposal | ||||||||
| Corporate Governance | ||||||||
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Board of Directors and Committees of the Board | ||||||||
Executive Officers | ||||||||
Beneficial Ownership of our Securities | ||||||||
Certain Relationships and Related Person Transactions | ||||||||
Director Compensation | ||||||||
| A Letter from the Chair of our Compensation Committee | ||||||||
| Executive Compensation | ||||||||
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Compensation Discussion and Analysis | ||||||||
| Compensation Committee Report | ||||||||
Compensation | ||||||||
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Report of the Audit Committee | ||||||||
Proposal | ||||||||
Proposal | ||||||||
Proposal | ||||||||
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| Equity Compensation Plan Information | ||||||||
| Other Matters | ||||||||
| Stockholder Proposals and Nominations | ||||||||
| Householding | ||||||||
| Appendix A-Crocs, Inc. 2020 Equity Incentive Plan | ||||||||
Information about the 2017 Annual Meeting of Stockholders
2016 Business and Financial Highlights
Business and financial highlights from 2016 include:
•We sold 56.1 million pairs16-digit control number or otherwise vote through your bank, broker, or other holder ofshoes worldwide;record.
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•Net loss attributable to common stockholders decreased $66.3 million to a net loss of $31.7 million compared to a net loss of $98.0 million for 2015;•We continued to focus on improving the efficiency and effectiveness of our operations, including the closure of underperforming retail stores and transferring owned retail distributors in subscale markets. During the year ended December 31, 2016, we opened 50 outlet stores and closed 66 full-price stores. In total, during the year ended December 31, 2016 we opened 83 stores and closed 84 stores; and•We continued to focus on simplifying our product line and disciplined inventory management, which enabled us to reduce our inventory at December 31, 2016 by $21.2 million or 12.6% from $168.2 million to $147.0 million at December 31, 2015.
| ($ in millions) | 2016 | 2015 | |||
|---|---|---|---|---|---|
Annual revenues | $1,036 | $1,091 | |||
Annual gross profit | $500 | $511 | |||
Annual gross margin | 48.3 | % | 46.8 | % | |
Annual selling, general and administrative costs as a % of revenue | 48.6 | % | 51.3 | % | |
Inventory as of December 31 | $147 | $168 | |||
Cash and cash equivalents as of December 31 | $148 | $143 |
| 2019 Business and Financial Highlights | ||||||
| Strong Total Shareholder Return in 2019 Compared to Peer Group | |||||
| 1 year | 3 year | |||||||||||||
| Crocs TSR | 61% | 511% | ||||||||||||
| Crocs Percent Rank in Peer Group * | 86th percentile | Highest | ||||||||||||
| COVID-19 Impact | |||||
| Proposals and our | Board Recommendation | Page | |||||||||||||||||
| Election of Class III Directors (Proposal 1) | |||||||||||||||||||
| |||||||||||||||||||
Thomas J. Smach | FOR | ||||||||||||||||||
| FOR | ||||||||||||||||||
| Ratification of our Independent Auditor (Proposal 2) | FOR | ||||||||||||||||||
Advisory Vote to Approve the Compensation of our Named Executive Officers (Proposal 3) | FOR | ||||||||||||||||||
Approval of the | FOR | ||||||||||||||||||
| Proposal 1—Election of Class III Directors (page 11) | |||||
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Name | Age | Primary Occupation | Committee Memberships | Independent | ||||||||||||||||||||||
| Thomas J. Smach | Partner at Riverwood Capital Management | Yes | ||||||||||||||||||||||||
| Yes | |||||||||||||||||||||||||
The Board recommends a vote “FOR” each of the Class III directors listed above. | ||
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| Proposal 2—Ratify Independent Auditors (page 50) | |||||
The Board recommends a vote “FOR” the proposal Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year | ||
| Proposal 3—Advisory Vote to Approve Named Executive Officer Compensation (Advisory Say-on-Pay Vote) (page 51) | |||||
•Align our executives’ compensation with our stockholders’ interests Hold our executives accountable to stockholders Assure that our total compensation program aligns with good corporate governance and best practices
| Attract and retain exemplary executive talent who are able to succeed in our fast-paced, rapidly evolving company | Motivate our executives to achieve our financial and strategic business objectives by paying them for performance | |||||||||||||
| GOVERNANCE BEST PRACTICES: | ||||||||
| • Majority independent Board | • Reasonable change in control protections | |||||||
| • Fully independent Compensation Committee | • No excise tax gross-ups | |||||||
| • Independent compensation consultant to the Compensation Committee | • Reasonable severance benefits | |||||||
| • No compensation policies and programs that give rise to excessive risks | • Limited executive perquisites and benefits | |||||||
| • Annual say-on-pay vote (receiving 96% support in 2019) | • No hedging or pledging permitted by executive officers, other employees, and directors | |||||||
| • Robust stock ownership guidelines for both executive officers and directors | • No repricing of stock options or stock appreciation rights | |||||||
| • Clawback of incentive-based compensation | • Majority vote director resignation policy | |||||||
| • Reasonable Board tenure and refreshment | • No single-trigger vesting of equity awards that are assumed in the event of a change in control | |||||||
| • Independent chairperson of the Board | • Regular executive sessions of independent directors | |||||||
| • Annual self-evaluation of Board and committees | • Committed to sustainable business practices | |||||||
Over 80% of our targeted 2019 compensation for our Chief Executive Officer was in the form of performance-based bonuses or long-term equity awards.
- •
AlignOur Compensation Committee made no major changes to ourexecutives' compensation with our stockholders' interests•Assure that our totaloverall executive compensation program in 2019, as they believe the program supports our pay for performance compensation philosophy, aligns executives withgood corporate governancestockholders’ interests, drives performance in key areas of the business, andbest practices
In order
The Board recommends a vote “FOR” the advisory vote to approve the compensation of the Company’s named executive officers. | ||
| Proposal 4—Approval of the Crocs, Inc. 2020 Equity Incentive Plan (page 52) | |||||
addition of 3,835,920 shares;
no recycling of shares or “liberal share counting” practices;
•Reasonable change in control protections•No excise tax gross-ups•Reasonable severance benefits•Limited executive perquisites and benefits•No hedging or pledging permitted•No repricings of stock options or stock appreciation rights•Majority vote director resignation policy•Nono single-trigger vesting of equity awards that are assumed in the event of a change incontrol
We strive
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is lower than industry standards.
Proposal 4—Advisory Vote on the Frequency of Future Advisory Votes to approve the Compensation of our Named Executive Officers (page 51)
We are required to hold an advisory vote on the frequency of the advisory vote to approve the compensation of our named executive officers every six years. When we last held this vote in 2011 our stockholders selected a frequency ofevery year. We have held an advisory vote on the compensation of our named executive officers every year since 2011. We believe that continuing to hold an advisory vote on an annual basis is in the best interest of our stockholders.
The Board recommends a vote |
Proposal 5—Approve the Amendment and Restatement of the 2008 Cash Incentive Plan (page 52)
We are seeking stockholder approval of an Amendment and Restatement of the 2008 Cash Incentive Plan in order to permit us to pay tax deductible cash incentive awards pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended.
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24, 2020.
as recommended by our Board. If you are a beneficial owner and you return your signed voting instruction form but do not indicate your voting preferences, your broker, trustee, bank, or other holder of record may not vote your uninstructed shares on any proposal other than Proposal 2. All of directors who served on the Board responsibilities of our Compensation Committee are set forth in the Compensation Committee Charter. The Compensation Committee may also delegate its authority under its charter to a subcommittee or one or more of our officers as it deems appropriate from time to time. practices. In furtherance of this purpose, the Governance and Nominating Committee identifies individuals qualified to become indicated below, the address for each director and named executive officer listed below is in care of Crocs, Inc., 7477 East Dry Creek Parkway, Niwot, Colorado 80503. 5% Stockholders: Blackstone Capital Partners VI L.P.(1) Blackrock, Inc.(2) Wellington Management Group LLP(3) AllianceBernstein L.P.(4) The Vanguard Group(5) JPMorgan Chase & Co.(6) Directors: Ian M. Bickley Ronald L. Frasch Jason Giordano Prakash A. Melwani Thomas J. Smach(7) Douglas J. Treff Doreen A. Wright(8) Officers: Gregg S. Ribatt(9) Andrew Rees(10) Carrie W. Teffner Daniel P. Hart(11) All current directors and executive officers as a group (11 persons)(12) As obligations and a covenant that we would bear all costs, fees and expenses in connection with any resale of the Blackstone Purchasers’ shares of common stock. On November 4, 2019, the Blackstone Purchasers sold all 6,864,545 shares of our common stock in an underwritten public offering and we incurred approximately $0.6 million of expenses under the Registration Rights Agreement in connection with the sale of such shares by the Blackstone Purchasers. As of such date, the Registration Rights Agreement was terminated in accordance with its terms. Ian M. Bickley Ronald L. Frasch Jason Giordano Prakash A. Melwani Thomas J. Smach Doreen A. Wright Douglas J. Treff Ian M. Bickley Ronald L. Frasch Jason Giordano Prakash A. Melwani Thomas J. Smach Doreen A. Wright Douglas J. Treff COVID-19 pandemic impacts, in March 2020, we implemented temporary base salary reductions for executives, including base salary reductions of 20% for our current named executive officers. Annual revenues* Annual gross profit Annual gross margin Annual selling, general and administrative costs as a % of revenue Inventory as of December 31 Cash and cash equivalents as of December 31 Role of Compensation Committee, Chief Executive Officer and Compensation Consultant Things We Fixed component; evaluated annually Variable, performance-based component Variable, performance-based Contingent component; only payable if the industry stock price. showing the fixed and performance-based and Gregg S. Ribatt Andrew Rees Carrie Teffner Daniel P. Hart executives, including base salary reductions of 20% for Messrs. Rees and Hart and Ms. Mehlman. target; there are no payouts for below-threshold performance. Adjusted earnings before interest and taxes(1): $55 million Adjusted free cash flow(2): $71 million Objectives associated with: direct to consumer growth, product delivery, new product success and global SKU alignment Based on 2019. Revenue(1): $1,147 million Operating margin: 4.8% 2011 2012 2013 2014 2015 2016 strategic priorities. insurance and annual executive physical examinations beyond those covered by our general health insurance programs. period following the Principal Executive Officer Financial Officer Legal and Administrative Officer Gregg S. Ribatt Andrew Rees Annual Incentive Award — — — — — — Carrie W. Teffner Annual Incentive Award — — — — — — Daniel P. Hart Annual Incentive Award — — — — — — Gregg S. Ribatt Andrew Rees Carrie W. Teffner Daniel P. Hart Gregg S. Ribatt Andrew Rees Carrie W. Teffner Daniel P. Hart non-competition covenants. Company; (v) any willful violation by the participant of the Company’s separation agreement and general release. Gregg S. Ribatt Andrew Rees Carrie W. Teffner Daniel P. Hart 1. For 2019, we used the same median employee that was originally identified in 2017 because there has been no change in our employee population or compensation arrangements that we believe would significantly impact our pay ratio disclosure. We believe this ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Audit fees(1) Audit-related fees(2) Tax fees(3) All other fees Total fees ” Plan directors. Section the date awards or grants could have been made under the terms of such preexisting plans, absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the Company or an Affiliate immediately prior to such acquisition or combination. In the event that a written agreement between the Company and an Acquired Entity pursuant to which a merger or consolidation is completed is approved by the Board and that agreement sets forth the terms and conditions of the substitution for or assumption of outstanding awards of the Acquired Entity, those terms and conditions shall be deemed to be the action of the Committee without any further action by the Committee, except as may be required for compliance with Rule 16b-3 under the Exchange Act, and the persons holding such awards shall be deemed to be Participants. A-22TableContentsInternet Availability of Proxy Materials, on your proxy card or on the instructions that accompanied your proxy materials. If your sharesfivefour proposals at the Annual Meeting:threethe two Class III directorsdirector nominees named in this proxy statement to serve until the 20202023 Annual Meeting of Stockholders.2017.An advisory vote on the frequency of future advisory votes to approve the compensation of our named executive officers.5.The approvalamendment and restatement of the 2008 CashCrocs, Inc. 2020 Equity Incentive Plan.("(“street name"name” holders) may vote by accessing the website specified on the voting instructions forms provided by their brokers, trustees, banks or other nominees.("(“street name"name” holders) may vote by calling the number specified on the voting instruction forms provided by their brokers, trustees, banks, or other nominees. and completing, signing, and dating the printed proxy cards and mailing them in the postage-paid envelope that will accompany the printed proxy materials. Beneficial owners ("(“street name"name” holders) may vote by completing, signing, and dating the voting instruction form provided and mailing it in the postage-paid envelopes accompanying the voting instruction forms.don'tdon’t provide voting instructions?in Person atonline by attending the Annual Meeting11, 2017,13, 2020, the record date, can vote in person at the Annual Meeting. You can also be represented by another persononline at the Annual Meeting by executing a proper proxy designating that person.attending the Annual Meeting online and following the instructions posted at www.virtualshareholdermeeting.com/CROX2020. If you are a beneficial owner who does not have a control number, you must obtain a legal proxy frommay gain access to the Annual Meeting by logging into your brokerage firm’s website and selecting the shareholder communications mailbox to link through to the Annual Meeting. Instructions should also be provided on the voting instruction card provided by your broker, trustee, bank, or other holder of record and present it to the inspector of election with your ballot to be able to vote in person at the Annual Meeting.record. Even if you plan to attend the Annual Meeting online, we recommend that you also vote either by telephone,Internet, by Internet,telephone, or by mail so that your vote will be counted if you later decide not to attend.Directors.Directors The threetwo Class III director nominees receiving the highest number of "for"“for” votes cast in persononline at the Annual Meeting or by proxy at the Annual Meeting will be elected as directors. Proxies marked withhold and broker non-votes will have no effect on the outcome of this proposal. Cumulative voting is not permitted. See "Corporate“Corporate Governance—Majority Vote Director Resignation Policy"Policy” (below) regarding the requirement that director nominees tender their resignation if they receive a greater number of votes "withheld"“withheld” from their election than votes "for"“for” such election.LLP.LLP The affirmative vote of a majority of the voting power of the shares present in person, or by remote communication, or by proxy and entitled to vote on the proposal is required for the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017.2020. Abstentions will have the effect of voting against this proposal. Broker non-votes will have no effect on the outcome of this proposal.Officers.Officers The affirmative vote of a majority of the voting power of the shares present in person, or by remote communication, or by proxy and entitled to vote on the proposal is required to approve the advisory resolution to approve the compensation of our named executive officers. Abstentions will have the effect of voting against this proposal. Broker non-votes will have no effect on the outcome of this proposal. - Advisory Vote on the Frequency of Future Advisory Votes to approve the Compensation of our Named Executive Directors. The voting frequency option that receives the highest number of votes cast by the holders of the shares present in person or by proxy and entitled to vote on the proposal will be deemed the frequency for the advisory vote on executive compensation. Abstentions and broker non-votes will have no effect on the outcome of this proposal.Proposal 5 - Approval of the Amendment and Restatement of the 2008 CashCrocs, Inc. 2020 Equity Incentive Plan.Plan The affirmative vote of a majority of the voting power of the shares present in person, or by remote communication, or by proxy and entitled to vote on the proposal is required to approve the amendment and restatement of the 2008 Cash Incentiveour Plan. Abstentions will have the effect of voting against this proposal. Broker non-votes will have no effect on the outcome of this proposal.Proposals.Proposals With respect to any other matters properly brought before the Annual Meeting, the affirmative vote of a majority of the voting power of the shares present in person, or by remote communication, or by proxy and entitled to vote on such proposals will be the act of the stockholders. Abstentions will have the effect of voting against these proposals. Broker non-votes will have no effect on the outcome of these proposals.Board'sBoard’s Recommendations?Board of Directors'Board’s recommendation is set forth together with the description of each proposal. In summary, our Board of Directors recommends a vote:20172020 (Proposal 2);•For a frequency ofEVERY YEAR for future advisory votes to approve the compensation of our named executive officers (Proposal 4); and•amendment and restatement of the 2008 CashCrocs, Inc. 2020 Equity Incentive Plan (Proposal 5)4).don'tdon’t provide voting instructions?5, for EVERY YEAR on Proposal 4 and in the best judgment of the proxy holders as to other matters that may properly come before the Annual Meeting.in personby following the instructions at www.virtualshareholdermeeting.com/CROX2020.Meeting.Meeting online will not, by itself, constitute revocation of your proxy.$20,000,$9,000, plus reasonable out-of-pocket expenses incurred in the process of soliciting proxies. We may also reimburse brokers, custodians, nominees and other fiduciaries for normal handling charges incurred for forwarding proxy materials to beneficial owners. Solicitation of proxies may be made personally or by mail, telephone, email or otherwise by our directors, officers and other employees, who will receive no additional compensation for such services.Contentsour effort to maintain a safe and healthy environment for our directors, members of management, and stockholders who wish to attend the Annual Meeting, in light of the public health impact of the coronavirus outbreak (COVID-19), we believe that hosting a virtual meeting is in the best interest of the Company and its stockholders and enables increased stockholder attendance and participation because stockholders can participate from any location around the world. We plan to resume holding an in-person meeting in 2021.PROPOSAL 1—PROPOSAL 1 - ELECTION OF DIRECTORSeightnine members divided into three classes, with each director elected to a three-year term. Class I consists of Ronald L. Frasch and Gregg S. Ribatt, whose terms will expire at the 2018 annual meeting. Class II consists of Ian M. Bickley, Doreen A. Wright and Douglas J. Treff, whose terms will expire at the 2019 annual meeting. Class III consists of Jason Giordano, Prakash A. Melwani and Thomas J. Smach, whose terms will expire at the Annual Meeting to be held on June 6, 2017. Under our amended and restated bylaws, each of our directors holds office until his or her successor has been elected and qualified or until such director'sdirector’s earlier resignation or removal.On January 27, 2014, we issued to Blackstone Capital Partners VI L.P. ("Blackstone") and certain of its permitted transferees (including Mr. Ribatt), an aggregate of 200,000 shares of our Series A convertible preferred stock for an aggregate purchase price of $198 million, or $990 per share, pursuant to an Investment Agreement between us and Blackstone, dated December 28, 2013 (as amended, the "Investment Agreement"). The Investment Agreement grants Blackstone certain rights to designate directors to serve on the Board. For so long as Blackstone and its permitted transferees (i) beneficially own at least 95% of the convertible preferred stock or the as-converted common stock purchased pursuant to the Investment Agreement or (ii) maintain beneficial ownership of at least 12.5% of our outstanding common stock (the "Two-Director Threshold"), Blackstone will have the right to designate for nomination two directors to the Board. For so long as Blackstone and its permitted transferees beneficially own shares of convertible preferred stock or the as-converted common stock purchased pursuant to the Investment Agreement that represent less than the Two-Director Threshold but more than 25% of the number of shares of the as-converted common stock purchased pursuant to the Investment Agreement, Blackstone will have the right to designate for nomination one director to the Board. Blackstone's ownership currently exceeds the Two-Director Threshold. Messrs. Melwani and Giordano were designated by Blackstone for election to the Board in accordance with the terms of the Investment Agreement. In 2014, Blackstone designated Mr. Ribatt for nomination to the Board but upon Mr. Ribatt's appointment as our Chief Executive Officer in January 2015, Blackstone nominated Mr. Giordano in place of Mr. Ribatt.Class III terms expire at the 2020 annual meeting: Thomas J. Smach William Gray Beth J. Kaplan Prakash A. Melwani Class I terms expire at the 2021 annual meeting: Ronald L. Frasch Andrew Rees Class II terms expire at the 2022 annual meeting: Ian M. Bickley Doreen A. Wright Douglas J. Treff eight.nine. However, assuming the election of the Class III director nominees at the Annual Meeting, there will only be seven continuing directors following the Annual Meeting, leaving two vacancies. The authorized number of directors may be changed by resolution of the Board, subject to the terms of the Investment Agreement and the certificate of designations of the convertible preferred stock.Board. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. Vacancies on the Board can be filled by resolution of the Board.Messrs. Giordano, MelwaniMs. Kaplan and Mr. Smach for re-election as Class III directors to serve for a three-year term expiring at the 20202023 annual meeting of stockholders. As noted, Messrs. Melwani and Giordano were designated by Blackstone for election to the Board as Class III directors in accordance with the terms of the Investment Agreement.threetwo nominees. Each of the director nominees has consented to serve for a three-year term. We do not contemplate that any of the nominees will be unable to stand for election, but should any nominee become unable to serve or will not serve for any reason, all proxies will be voted for the election of a substitute nominee as the Board may recommend.TableContentsour Company. There are no family relationships among our executive officers and directors. Jason GiordanoMr. Giordano, age 38, is a Blackstone director designee and has served as a member of the Board since January 2015. Mr. Giordano is a Managing Director at Blackstone Group, L.P. Since joining Blackstone in 2006, Mr. Giordano has been involved in the execution of the firm's investments in Crocs, Inc., Pinnacle Foods Inc., Polymer Group, Inc., and Outerstuff Ltd., and in analyzing investment opportunities across various industries, including Consumer Products, Chemicals, and Industrials. Before joining Blackstone, Mr. Giordano was an Associate at Bain Capital where he evaluated and executed global private equity investments in a wide range of industries. Prior to that, Mr. Giordano worked in investment banking at Goldman, Sachs & Co. Mr. Giordano also serves on the Board of Directors of HealthMarkets, Inc. and Outerstuff Ltd.Mr. Giordano's significant knowledge and diverse expertise in finance, business, and strategic investments provide a valuable perspective to the Board. Mr. Giordano also led the day-to-day management of Blackstone's investment in our company and, therefore, has extensive knowledge regarding our operations. Thomas J. Smach(Class III)Mr. Smach, age 56,59, has served as the Chairperson of the Board since June 2011, and as a member of the Board since April 2005. Since 2008, Mr. Smach has been a co-founding partner of Riverwood Capital Management, a private equity firm. From January 2005 to June 2008, Mr. Smach served as the Chief Financial Officer of Flextronics International ("Flextronics"(“Flextronics”), a NASDAQ-listedNasdaq-listed electronics manufacturing services (EMS)(“EMS”) provider. From April 2000 to December 2004, Mr. Smach served as Senior Vice President—FinancePresident-Finance of Flextronics. From 1997 to April 2000, he served as the Senior Vice President, Chief Financial Officer and Treasurer of The Dii Group, Inc., an EMS provider and publicly-traded company that merged with Flextronics in early 2000 ("The Dii Group").2000. In addition to currently serving on the board of various private companies around the world, Mr. Smach also served on the board of various public companies in both the United States and Germany. Mr. Smach is a certified public accountant (inactive).
Mr. Smach has extensive accounting and financial management experience having served as the chief financial officer of global public companies and on the boards of both public and private companies. In addition, Mr. Smach has significant experience with international manufacturing and business from his leadership positions at Riverwood Capital Management and Flextronics. This experience is useful in light of our international operations. Mr. Smach is also well versed in SEC compliance and risk oversight, which makes him particularly well suited to serve as the chairperson of theon our Audit Committee and as the Board'sBoard’s Chairperson. 
Ms. Kaplan, age 62, has served as a member of the Board since January 2020. She is the managing member of Axcel Partners, LLC, a venture capital firm investing in early stage and growth companies. Ms. Kaplan served as President and Chief Operating Officer at Rent the Runway, Inc. from 2013 to 2015 and continues to serve on its board of directors. She also serves on the boards of Framebridge and Care/of, both early stage growth companies. Previously, Ms Kaplan served as President and Chief Merchandising and Marketing Officer, and as a director, at General Nutrition Centers (“GNC”) from 2008 to 2011, where she played an integral role in GNC’s 2011 initial public offering. Prior to GNC, Ms. Kaplan served as Executive Vice President and General Manager at Bath & Body Works, LLC from 2002 to 2005, Executive Vice President of Marketing and Merchandising at Rite Aid Corporation from 1996 to 1999, and President and General Manager of the U.S. Cosmetics and Fragrance division at The Procter & Gamble Company. Ms. Kaplan has served as a member of the board of directors of Meredith Corporation, a publicly traded media conglomerate, since January 2017 and is a member of its Finance/Audit Committee. In addition, Ms. Kaplan joined the board of Howard Hughes Corporation, a publicly traded commercial, residential and mixed-use real estate company, in December 2017 and currently serves on its Audit and Risk Committees.
Ms. Kaplan has decades of executive experience in consumer products, retail and digital commerce, brings valuable perspective to the Board and management in terms of understanding consumer trends. brand management and operational expertise. Ms. Kaplan also has public board experience, and serves on multiple audit and risk committees.
Table of ContentsMr. Gray, age 68, is a Blackstone director designee and has served as a member of the Board since June 2018. He has served as a Senior Advisor to Blackstone’s Private Equity Group since October 2010, advising various Blackstone portfolio companies on sales and marketing strategies to further brand development, as well as on issues management, user experience, channel expansion and digital transformation. Mr. Gray also serves as an investor and/or an advisor to a number of digitally oriented ventures including QF (QuickFrame) Video (a short form Video content creator), Dagne Dover (fashion handbag and accessory start up), and KARD (a charge card digital loyalty rewards start up). Prior to joining Blackstone, Mr. Gray spent 32 years at The Ogilvy Group, a communications firm, where he held a succession of leadership positions culminating in the roles of CO-CEO Ogilvy Group North America (2005-2009). Mr. Gray serves as a Director of SeaWorld Entertainment and he previously served as a Director of the Harleysville Property Casualty Insurance, HealthMarkets, Inc. and Zinio Digital Newsstand and as a Trustee of Century Capital Family of Mutual Funds. Mr. Gray graduated from Harvard College and received his MBA from the Darden School University of Virginia.
Mr. Gray brings significant communications, digital marketing and sales and brand building experience to the Board. His senior leadership role with a leading communications firm also contributes significant advertising and public relations expertise to the Board. Mr. Gray further provides the Board with substantial perspective relating to sales and marketing strategies and branding.
Mr. Melwani, age 58,61, is a Blackstone director designee and has served as a member of the Board since January 2014. Mr. Melwani is a Senior Managing Director at Blackstone Group, L.P. and is based in New York. He is the Chief Investment Officer of the Private Equity Group and chairs each of its Investment Committees. Since joining Blackstone in 2003, Mr. Melwani has led Blackstone'sBlackstone’s investments in Crocs, Inc., Kosmos Energy, Foundation Coal, Texas Genco, Ariel Re, Pinnacle Foods, RGIS Inventory Specialists, and Performance Food Group.Group, and Ascend Learning. Before joining Blackstone, Mr. Melwani was a founding partner of Vestar Capital Partners and served as its Chief Investment Officer. Mr. Melwani currently serves on the Board of Directors of Kosmos Energy, Performance Food Group,Ascend Learning, RGIS Inventory Specialists, and Blackstone strategic partner, Patria. From 2007 to December 2015, Mr. Melwani served on the Board of Directors of Pinnacle Foods, Inc. through December 2015, Kosmos Energy through May 2017 and Performance Food Group through June 2017.
Mr. Melwani'sMelwani’s significant knowledge and expertise in finance, business, and strategic investments provide a valuable perspective to the Board. In addition, Mr. Melwani brings to the Board extensive leadership experience through his service on the boards of various companies, including other public companies in the consumer goods industry.
THE BOARD RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE-NAMED NOMINEES FOR DIRECTOR. Mr. Frasch, age 68,71, has served as a member of the Board since October 2006 and as our Lead Director from November 2012 to January 2016. Since February 2014, Mr. Frasch has served as Operating Partner at Castanea Partners, a private equity firm.firm, from February 2014 until June 2019. From June 2014 to June 2015, Mr. Frasch has served as a director of EVINE Live, Inc., a NASDAQ-listedNasdaq-listed digital commerce company. Mr. Frasch also served as a director of Burberry Ltd. since 2017. Mr. Frasch served as President and Chief Merchandising Officer of Saks Fifth Avenue, a division of Saks, Incorporated, a NYSE-listed luxury fashion retailer, from February 2007 until the merger of Saks, Incorporated with Hudson'sHudson’s Bay Company in November 2013. From November 2004 until January 2007, he held the post of Vice Chairperson and Chief Merchant of Saks Fifth Avenue. From January 2004 to November 2004, he was employed by Saks in a non-executive capacity. From April 2000 to January 2004, Mr. Frasch served as Chairperson and Chief Executive Officer of Bergdorf Goodman (a subsidiary of Neiman Marcus Group, Inc.) and served as President of GFT North America (a subsidiary of Gruppo GFT, based in Turin, Italy, a global producer, marketer, and distributor of fine men'smen’s and women'swomen’s clothing, sportswear, and furnishings) from 1996 to 2000. Mr. Frasch also served as President and Chief Executive Officer of Escada USA from 1994 to 1996.
Mr. Frasch has extensive executive expertise in the fashion retail industry, which is valuable to the Board and management in understanding the consumer retail and fashion industry, including current buying trends by our wholesale customers. 
Gregg S. RibattMr. Ribatt, age 48, has served as a member of the Board since January 2014 and has served as our Chief Executive Officer since January 2015. From February 2014 to July 2014, Mr. Ribatt served as the interim Chief Executive Officer of Spanx Inc., one of the leading global shapewear, apparel and accessory companies. From January 2008 to January 2013, Mr. Ribatt was the President and Chief Executive Officer of the Performance + Lifestyle Group (formerly, The Stride Rite Corporation) of Collective Brands, Inc., a branded lifestyle footwear company. The Performance + Lifestyle Group included the Sperry Top-Sider, Saucony, Keds and Stride Rite brands. The Performance & Lifestyle Group was acquired by Wolverine Worldwide in October 2012. Before joining Collective Brands, Mr. Ribatt served as President and Chief Executive Officer of Stuart Weitzman Holdings LLC. Mr. Ribatt's prior experience also includes thirteen years with Bennett Footwear Group, where he was Executive Vice President & Chief Operating Officer. Bennett was a leading women's fashion footwear company, which included the Franco Sarto, Via Spiga, and Etienne Aigner brands.Mr. Ribatt's extensive experience in senior management roles at large branded footwear companies provides the Board and management with valuable insights into the global footwear industry. In addition, Mr. Ribatt brings leadership experience and vast knowledge of global footwear brands and consumer retail operations. Class II Directors Ian M. Bickley(Class II)Mr. Bickley,Andrew Rees, age 53, has served as a member of the Board since April 2015.June 2017 and is currently the President, Chief Executive Officer and Principal Executive Officer of Crocs, Inc., overseeing the brand’s global strategy and operations. Mr. Rees joined Crocs as President in June 2014, and became Chief Executive Officer in June 2017. Mr. Rees has more than 25 years of experience in the footwear and retail industry. Prior to joining Crocs, Mr. Rees served as Managing Director of L.E.K. Consulting in Boston where he founded and led the firm’s Retail and Consumer Products Practice for 13 years. While at L.E.K., Mr. Rees served as a consultant for Crocs from 2013 to 2014, supporting the development and execution of the Company’s strategic growth plan. Previously, Mr. Rees served as Vice President of Strategic Planning and Vice President of Retail Operations for Reebok International. He also held a variety of positions at Laura Ashley from 1994 to 1996.
Mr. Rees has extensive executive expertise in the footwear and retail industry and day-to-day knowledge of our operations as Chief Executive Officer.
Mr. Bickley, age 56, has served as President, International Group,a member of Coach,the Board since April 2015. Until December 2018, Mr. Bickley served as an Executive Officer of Tapestry, Inc. ("Coach"(“Tapestry”), a leading New York designNYSE-listed house of modern luxury accessorieslifestyle and lifestyle collections, since August 2013. Effectiveaccessory brands including Coach, Kate Spade, and Stuart Weitzman. Mr. Bickley held a number of executive roles at Tapestry (formerly Coach, Inc.) between 1993 and 2018. From July 2017 to December 2018, Mr. Bickley will serveserved as President, Global Business Development and Strategic Alliances for Coach.Tapestry. Prior to his currentlast role Mr. Bickleywith Tapestry, he served as President, International Group for Coach from August 2013 to July 2017, President, Coach International from February 2006 to August 2013, President and Chief Executive Officer of Coach Japan from August 2001 to JanuaryFebruary 2006, Vice President, Coach Japan from 1997 to 2001 and other successively senior positions since joining Coach in May 1993. Mr. Bickley has served on the board of directors and strategy committee of Natura & Co. Holding S.A., a NYSE-listed Brazilian global beauty and cosmetics company, since April 2019.
Mr. Bickley brings more than 25 years of global retailmulti-channel fashion and lifestyle brand building and distribution experience to the Board. Since joining Coach in 1993,At Tapestry, Mr. Bickley has beenwas an important leader and architect in the development and executionglobal expansion of its international businesses, through direct retail, wholesale and distributor-run businesses. Mr. Bickley also oversees development of all new and emerging markets globally for the Coach brand. Thisbrand in addition to the transformation of the company into a global multi-brand business and organization with three brands, more than 21,000 employees, and distribution in over 70 countries. His experience provides the Board with significant expertiseperspective and perspective relating toinsight into the development of global retail operations,brands, multi-channel retailing, and emerging marketsmarket and branding.channel opportunities. 
Ms. Wright, age 60,63, has served as a member of the Board since June 2011. She served as Senior Vice President and Chief Information Officer of Campbell Soup Company from 2001 to 2008. Ms. Wright also served as Interim Chief of Human Resources for Campbell Soup Company in 2002. From 1999 to 2001, Ms. Wright served as Executive Vice President and Chief Information Officer for Nabisco Inc. From 1995 to 1998, Ms. Wright held the position of Senior Vice President, Operations & Systems, Prudential Investments, for Prudential Insurance Company of America. Prior to that, she held various positions with American Express Company, Bankers Trust Corporation, and Merrill Lynch & Co. She also servesFrom 2012 to 2017, Ms. Wright served on the Board of Directors of the WhiteWave Foods Company, a U.S. and European organic and plant based food and beverage company.Company. From 2009 to 2013, Ms. Wright served on the Board of Directors of Dean Foods Company, a leading food and beverage company. In addition, Ms. Wright served on the Board of Directors ofof: Citadel Broadcasting Corporation from 2010 to 2011, where she chaired the Compensation Committee; Thethe Oriental Trading Company from 2008 to 2011, where she served on the Audit and Compensation Committees; Yankee Candle Company from 2003 to 2007, where she served on the Compensation and Audit Committees; and Conseco, Inc. from 2007 to 2010, where she served on the Audit and Enterprise Risk Committee.
Ms. Wright brings more than 30 years of leadership experience in the financial services and consumer products industries, with emphasis in the area of information technology, operations, and human resources. Ms. Wright also has extensive experience as a public company director, including service on audit, compensation, and corporate governance committees. 
Mr. Treff, age 59,62, has served as a member of the Board since June 6, 2016. He currently serves as the Senior Vice President and Chief Financial Officer of World Vision, Inc., an international relief and development organization. He served as Executive Vice President and Chief Administrative Officer of Payless Holdings, Inc. from September 2007 to July 2015 and also as its Chief Financial Officer from 2012 to 2015. Payless declared bankruptcy in 2017 subsequent to Mr. Treff’s departure. Mr. Treff served as Executive Vice President and Chief Administrative Officer of Sears Canada Inc. from 2006 to 2007, having been seconded to Sears Canada from Sears Holdings. Mr. Treff served as the Senior Vice President and Chief Financial Officer of Deluxe Corporation from 2000 to 2006. From 1990 to 2000, he held Chief Financial Officer and other leadership roles in finance at Wilsons The Leather Experts Inc., including serving as Vice President, Finance of Wilsons since 1993 and as Chief Financial Officer and Assistant Secretary since 1996.
Mr. Treff brings significant knowledge and expertise in accounting, finance, information technology, and operations in the global retail industry. As a chief financial officer or chief administrative officer for more than 20 years, Mr. Treff has extensive experience in SEC reporting, risk management and the footwear industry.industry, which makes him well suited to serve as the chairperson of our Audit Committee. This experience provides the Board with significant expertise and perspective relating to financial management, audit committee oversight, and global retail operations. 
CORPORATE GOVERNANCECorporate Governance GuidelinesIn 2005, the Board adopted the Crocs, Inc. Corporate Governance Guidelines, which are designed to assure the continued vitality of the Board and excellence in the execution of its duties. Our Corporate Governance Guidelines establish the practices and procedures of the Board with respect to board composition and member selection, board independence, board meetings and involvement of senior management, management succession planning, board committees and the evaluation of senior management and the Board. The Board periodically reviews our Corporate Governance Guidelines and updates them as necessary to reflect improved corporate governance practices and changes in regulatory requirements. A copy of our Corporate Governance Guidelines is available on our website at www.crocs.com.Majority Vote Director Resignation PolicyOur Corporate Governance Guidelines contain a Director Resignation Policy. Under this policy, any nominee for director who receives a greater number of votes "withheld" from his or her election than votes "for" such election is required to offer his or her resignation to the Board following certification of the stockholder vote. Within 90 days following the certification of the vote, the independent directors on the Board would consider the offer of resignation and determine whether to accept or reject the tendered resignation. This policy does not apply in contested elections.Director IndependenceNASDAQ listing standards require that the Board consist of a majority of independent directors. The Board has determined that all of the current non-management members of the Board (Messrs. Bickley, Frasch, Giordano, Melwani, Smach and Treff and Ms. Wright) are independent directors as defined by NASDAQ listing standards.The Board makes a determination regarding the independence of each director annually based on relevant facts and circumstances. Applying the standards and independence criteria defined by the NASDAQ listing standards, the Board has made a determination as to each independent director that no relationships exist which, in the opinion of the Board, would interfere with the exercise of his or her independent judgment in carrying out the responsibilities of a director. In making its determination of Messrs. Melwani's and Giordano's independence, the Board considered Mr. Melwani's role as a Senior Managing Director and Mr. Giordano's role as Managing Director of the Blackstone Group.The independent directors of the Board regularly hold executive sessions without members of management present.Communicating with DirectorsStockholders or other interested parties who wish to communicate with the Board or with specified individual directors may do so by mailing such written communication to: Corporate Secretary, Crocs, Inc., 7477 East Dry Creek Parkway, Niwot, Colorado 80503. The Corporate Secretary will review all correspondence and will forward to the Board or an individual director a summary of the correspondence received and copies of correspondence that the Corporate Secretary determines is required to be directed to the attention of the Board or such individual director. The Board or any individual director may at any time request copies and review all correspondence received by the Corporate Secretary that is intended for the Board or such individual director.Board LeadershipThe Board does not have a policy regarding separation of the roles of Chief Executive Officer and Chairperson of the Board. The Board believes it is in our best interests to make that determination based on current circumstances. The Board has determined that an independent director serving as Chairperson is in the best interests of our stockholders at this time. This structure ensures a greater role of independent directors in the active oversight of our business, including risk management oversight, and in setting agendas and establishing Board priorities and procedures. This structure also allows the Chief Executive Officer to focus to a greater extent on the management of our day-to-day operations. Effective January 1, 2016, the Board eliminated the position of Lead Director.Risk OversightThe full Board is actively involved in oversight of risks that could affect us. The Board implements its risk oversight function both as a whole and through delegation to its committees. These committees meet regularly and report back to the full Board. The Audit Committee has primary oversight responsibility with respect to financial risks as well as oversight responsibility for our overall risk assessment and risk management policies and systems. The Audit Committee oversees our procedures for the receipt, retention and treatment of complaints relating to accounting and auditing matters and oversees our management of legal and regulatory compliance systems. The Audit Committee regularly interacts with our accounting and legal personnel, internal audit team and our outside auditors in fulfillment of this oversight function. The Compensation Committee oversees risks relating to our compensation plans and programs. The Compensation Committee has reviewed and considered our compensation policies and programs in light of the Board's risk assessment and management responsibilities and will do so in the future on an annual basis. The Compensation Committee believes that we have no compensation policies and programs that give rise to risks reasonably likely to have a material adverse effect on us. The Compensation Committee also, on at least an annual basis, considers and evaluates the independence and potential conflicts of interest of its advisors, including our compensation consultants Meridian Compensation Partners. The Information Technology Committee oversees risks related to our information technology systems, processes and procedures, including risk related to cybersecurity.The Chief Legal and Administrative Officer serves as our chief compliance officer, and is charged with assessing and managing our legal, regulatory and other compliance obligations on a global basis. The Chief Legal and Administrative Officer regularly reports to the Audit Committee, and the full Board as appropriate, regarding our legal and compliance affairs. The Chief Legal and Administrative Officer and Chief Financial Officer also coordinate the day-to-day risk management process and report directly to the Audit Committee. The internal audit team performs an enterprise risk assessment annually, and updates the Audit Committee regarding our risk analyses, assessments, risk mitigation strategies and activities. Senior management updates the Audit Committee at least annually, or more frequently asneeded, regarding our directors and officers insurance coverage and on matters regarding certain financial risks.Code of Business Conduct and Ethics and Committee ChartersWe have adopted a Code of Business Conduct and Ethics that applies to all directors and employees, including our principal executive, financial and accounting officers. The Code of Business Conduct and Ethics is posted on our website at www.crocs.com. We intend to satisfy the requirements under Item 5.05 of Form 8-K regarding disclosure of amendments to, or waivers from, provisions of our Code of Business Conduct and Ethics that apply to our directors and principal executive, financial and accounting officers by posting such information on our website. The Audit Committee Charter, Compensation Committee Charter, Governance and Nominating Committee Charter and Information Technology Committee Charter are also available on our website at www.crocs.com. Any person may request a copy of the Code of Business Conduct and Ethics or committee charters free of charge by submitting a written request to: Corporate Secretary, Crocs, Inc., 7477 East Dry Creek Parkway, Niwot, Colorado 80503.BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD2016,2019, the Board met five times, and all directors who served during 20162019 attended 75% or more of the Board'saggregate of the (i) Board’s meetings and the(ii) meetings of the Board committees on which they served.served, in each case, during the periods that he or she served as a director. We encourage, but do not require, our directors to attend the annual meeting of stockholders. Messrs. Frasch, Ribatt and Smach and Ms. Wright attended our 2016 Annual Meeting of Stockholders.Committeesat the time attended our 2019 Annual Meeting of Stockholders, except for Mr. Melwani.Thehasis highly qualified and active, consisting of directors with a diverse set of relevant experience, qualifications, and skills. This table provides a summary view of the authority to appoint committees to perform certain managementqualifications and administrative functions and has established the following committees.Qualifications and Attributes Ian M. Bickley Ronald L. Frasch William Gray Beth J. Kaplan Prakash A. Melwani Andrew Rees Thomas J. Smach Douglas J. Treff Doreen A. Wright CEO Experience l l l l Corporate Governance/Ethics l l l l l l l l l Financial/Accounting Expertise l l l l l Public Company Board Service l l l l l l l l l Footwear/Retail Industry Experience l l l l l Independence l l l l l l l l Global Management and Business Perspective l l l l l l l l l Consumer Product and Branding Expertise l l l l l l l l Information Technology Expertise l l l Supply Chain and Manufacturing Expertise l l l l Human Resources/Compensation Expertise l l l l l Demographic Background Tenure (Years) 5 13 2 1 6 3 15 4 9 Age (Years) 56 71 68 62 61 53 59 62 63 NameAuditCommitteeCompensationCommitteeGovernance andNominating CommitteeInformation TechnologyCommittee Name Audit
CommitteeCompensation
CommitteeGovernance and Nominating Committee China Growth Acceleration Committee Thomas J. Smach* ü **ü Ian Bickley ü Ronald L. Frasch ü ü William Gray Beth J. Kaplan ü **üPrakash A. Melwani Jason Giordanoü ü Andrew Rees Prakash A. Melwaniüü Gregg S. Ribatt Doreen A. Wright ü**ü** Douglas J. Treff üü Chairman Chairperson of the BoardSmachTreff (Chairperson), FraschBickley, and Treff.Smach. The Audit Committee met tennine times in 2016.2019. The functions of the Audit Committee include, among other things, oversight of the integrity of our financial statements, our compliance with legal and regulatory requirements, the performance, qualifications, and independence of our independent auditors, and the performance of our internal audit function. The Audit Committee is directly responsible for the appointment, retention, compensation, evaluation, termination, and oversight of the work of any independent auditor engaged for the purpose of preparing or issuing an audit report or related work. The Audit Committee is also tasked with evaluating our significant information technology (“IT”) strategies, and oversight of management in its management of risks related to our IT systems, processes, and procedures, including risk related to cybersecurity. The purpose and responsibilities of the Audit Committee are set forth in the Audit Committee Charter. The Audit Committee Charter can be found on our website at www.crocs.com.NASDAQNasdaq listing standards applicable to Audit Committee members and relevant federal securities laws and regulations. The Board has determined that Mr.Messrs. Treff and Smach qualifieseach qualify as an "audit“audit committee financial expert"expert” as defined by the applicable regulations of the SEC.Ms.Mses. Wright (Chairperson) and Kaplan and Messrs. BickleyFrasch and Melwani. The Compensation Committee met fivesix times in 2016.2019. The Compensation Committee has overall responsibility for defining, articulating, evaluating, and approving our executive officer compensation, benefits, severance, equity-based or other compensation plans, policies, and programs. The Compensation Committee is also responsible for approving our Compensation Discussion and Analysis for inclusion in this proxy statement. The purpose andCharter, which can be found on our website at www.crocs.com.NASDAQNasdaq listing standards applicable to Compensation Committee members and relevant federal securities laws and regulations.theour Chief Executive Officer'sOfficer’s compensation; (iii) oversee management'smanagement’s decisions concerning the performance and compensation of other executive officers; (iv) oversee the compensation structure for our employees generally; (v) review and make recommendations to the Board with respect to the establishment of any new incentive compensation and equity-based plans; (vi) supervise the administration of our equity-based incentive plans, including the authorization of equity grants under such plans; (vii) review and recommend to the Board the terms of written employment agreements, post-employment consulting agreements and severance arrangements for executive officers; (viii) assist the Board in developing and evaluating potential candidates for executive officer positions and oversee the development of succession plans for executive officers; (ix) review and recommend to the Board compensation to be paid tooutsidenon-employee directors; and (x) review and evaluate the relationship between our incentive compensation arrangements and our corporate strategy and risk management policies and practices.theour Chief Executive Officer'sOfficer’s compensation. The Compensation Committee also reviews the recommendations of theour Chief Executive Officer with respect to compensation of the otherour named executive officers, other than himself, and, after reviewing such recommendations, sets the compensation of theour other named executive officers. The Compensation Committee relies on its judgment when making compensation decisions after reviewing our performance and evaluating each executive'sexecutive’s performance against established goals, leadership ability and responsibilities, and current compensation arrangements. When evaluating total compensation for each of our executive officers, the Compensation Committee reviews the executive officer'sofficer’s current compensation, including equity- and non-equity-based compensation. The Compensation Committee also evaluates surveys and other available data regarding the executive compensation programs of comparative companies. The compensation program for executive officers and the Compensation Committee assessment process are designed to be flexible so as to better respond to the evolving business environment and individual circumstances. See "Risk Oversight"“Corporate Governance—Risk Oversight” (above) for the Compensation Committee'sCommittee’s evaluation of our compensation program risk.2016,2019, the Compensation Committee engaged an outside independent compensation consultant, Meridian, Compensation Partners ("Meridian"), to provide consulting services to the Compensation Committee in connection with 20172019 executive compensation matters. See "Compensation“Compensation Discussion and Analysis"Analysis” (below) for further discussion.Charter.Charter and Nasdaq listing requirements. The Compensation Committee determined that Meridian is independent and did not identify any conflicts of interest.Smach.Smach and Ms. Kaplan. The Governance and Nominating Committee met fourthree times in 2016.2019. The Governance and Nominating Committee assists the Board in promoting our best interests and thatthose of our stockholders through the implementation of sound corporate governance principles andboardBoard members and recommends to the Board the director nominees for election at each annual meeting of stockholders. It also reviews the qualifications and independence of the members of the Board and its various committees and makes any recommendations the Governance and Nominating Committee members may deem appropriate concerning any changes in the composition of the Board and its committees. The Governance and Nominating Committee also recommends to the Board the corporate governance guidelines and standards regarding the independence of outsidenon-employee directors applicable to us and reviews the provisions of the Governance and Nominating Committee Charter on a regular basis to confirm that such guidelines, standards and charter remain consistent with sound corporate governance practices and with any applicable legal or regulatory requirements and the NASDAQNasdaq listing standards. The Governance and Nominating Committee also monitors and leads the Board in its periodic review of the Board'sBoard’s performance.The Governance and Nominating Committee Charter can be found on our website at www.crocs.com. All of the members of the Governance and Nominating Committee are independent, as determined in accordance with the NASDAQNasdaq listing standards.Director Nomination Process and Director QualificationsExcept with respect to director nominees designated by Blackstone pursuant to the Investment Agreement, as described above, the Governance and Nominating Committee's process for identifying potential director candidates and the factors considered by the Governance and Nominating in evaluating potential candidates are described below. In identifying potential director candidates, the Governance and Nominating Committee relies on recommendations from a number of sources, including current directors and officers. The Governance and Nominating Committee may also hire outside consultants, search firms or other advisors to assist in identifying director candidates. The Governance and Nominating Committee will consider director candidates recommended by stockholders on the same basis as it considers other candidates. Any stockholder wishing to recommend a candidate for consideration by the Governance and Nominating Committee may do so by submitting a written recommendation to the Governance and Nominating Committee in accordance with the procedures set forth under "Other Matters–Stockholder Proposals and Nominations for 2018 Annual Meeting."In evaluating a candidate for director, our Governance and Nominating Committee considers, among other things, the candidate's judgment, knowledge, integrity, diversity, expertise and business and industry experience, and other expertise, which are likely to enhance the Board's ability to govern our affairs and business. We do not have a separate policy regarding consideration of diversity in identifying director nominees but the Governance and Nominating Committee strives to nominate directors with a variety of complementary skills and backgrounds so that, as a group, the Board will possess a broad perspective and the appropriate talent, skills and expertise to oversee our business. The Governance and Nominating Committee also takes into account independence requirements imposed by law or regulations (including the NASDAQ listing standards). In the case of director candidates recommended by stockholders, the Governance and Nominating Committee may also consider the number of shares held by the recommending stockholder, the length of time that such shares have been held and the relationship, if any, between the recommending stockholder and the recommended director nominee.Information Technology CommitteeInformation TechnologyChina Growth Acceleration Committee are Ms. WrightMessrs. Bickley (Chairperson) and Messrs. GiordanoFrasch. The China Growth Acceleration Committee was formed in January 2019 with a fixed one-year term, which the Board extended in December 2019 for an additional one-year term, such that the term will now expire on December 31, 2020. The China Growth Acceleration Committee assists the Board in its ongoing overview of our long-term strategic planning and Treff, along with Mike O'Hair, Senior Operating Advisorgrowth initiatives and offers advice and insights related to Blackstone. The Information Technology Committee met seven times in 2016. The Information Technology Committee oversees major information technology ("IT") related strategies, projects and technology architecturedecisions. The Information Technology Committee also monitors whether our IT programs effectively supporta new growth plan for our business objectivesin China and strategiesorganizational structure in the Asia Pacific region and reportsspecifically as it relates to the Board on IT related matters.China business. The Information TechnologyChina Growth Acceleration Committee is also tasked with evaluating our significant IT strategies, and assessing and managing risks relatedproviding guidance with respect to our IT systems, processes and procedures, including risk related to cybersecurity. The purpose and responsibilitiesassessment of the Information Technology Committee are set forthbrand potential in its charter, which can be found onChina; review our website at www.crocs.com.Tableplans and timeline for growth by channel in China; contribute to our understanding of Contentsthe changing market landscape and market specific risks in China; act in an advisory capacity to help us prioritize alternative investment options for the China market; and interface with designated management team/groups regarding China business and potential opportunities.
EXECUTIVE OFFICERS11, 201713, 2020 include the following individuals:NameAgePosition(s)Gregg S. Ribatt48AgePosition(s) Andrew Rees 53 President and Chief Executive Officer Andrew Rees5039PresidentDaniel P. Hart58Executive Vice President, Chief Legal and Administrative OfficerCarrie W. Teffner50Executive Vice President and Chief Financial Officer Daniel P. Hart 61 Executive Vice President, Chief Legal and Risk Officer Elaine Boltz 51 Executive Vice President, Chief Operations and Transformations Officer Michelle Poole 52 Executive Vice President, Chief Product and Merchandising Officer Ribatt'sRees’ biographical information is disclosed above under "Proposal 1–“Proposal 1—Election of Directors."”Andrew ReesAnne Mehlmanhas served as our Executive Vice President and Chief Financial Officer since June 2014 andAugust 2018. From November 2016 until August 2018, she served as Chief Financial Officer of Zappos.com, Inc., an online shoe retailer owned by Amazon.com, Inc. Previously, Ms. Mehlman served as our Interim Principal Executive OfficerVice President, Corporate Finance from June 2014 through January 2015.2011 to November 2016. Prior to joining us, Mr. Rees served as Managingthat time, she was Division Finance Director of L.E.K. Consulting in Boston where he founded and led the firm's Retail and Consumer Products Practice for 13 years. While at L.E.K. Consulting, Mr. Rees served as a consultant for us from 2013 to 2014, supporting the development and execution of our strategic growth plan. Previously, Mr. Rees served as Vice President of both Strategic Planning and Retail Operations for Reebok International, a global footwear and apparel company. HeRSC Holdings, Inc. (acquired by United Rentals, Inc.). Ms. Mehlman also held a variety of positionsvarious financial roles at Laura Ashley, a fashion and home furnishings brand.Corporate Express (acquired by Staples, Inc.).AdministrativeRisk Officer since January 2010. From June 2009 through December 2009, he served as our Executive Vice President of Administration and Corporate Development. Prior to joining us, Mr. Hart was employed by Océ North America, a digital printing and document management division of Océ, N.V., a manufacturing and engineering company publicly traded on the Euronext Amsterdam stock exchange, where he served as Senior Vice President and General Counsel from 2006 to 2009. From 2004 to 2006, Mr. Hart served as Senior Vice President –- General Counsel and Human Resources for Invensys Controls, a global manufacturing and engineering operation within Invensys plc, a public U.K. conglomerate. From 2002 to 2004, Mr. Hart served as Chief Staff Officer for the Development Division of Invensys, a large portfolio of disposal companies within Invensys plc. Previously, Mr. Hart'sHart’s experience included service in senior legal positions at Dictaphone Corporation and Brooke Group Ltd. and private legal practice in New York City.Carrie W. TeffnerChief FinancialMerchandising Officer since December 2015. She also served as a member of our Board from June 2015April 2020. Prior to December 2015. From June 2013 through June 2015,this, she served as Executiveour Senior Vice President and Chief FinancialProduct and Merchandising Officer since 2014. In addition to her product and merchandising responsibilities, Ms. Poole assumed responsibility for our Marketing function in 2017. She has more than 25 years of PetSmart, Inc., a specialty providerexperience and proven success in the development of pet productsleading global fashion and services.lifestyle brands. Prior to joining PetSmart, Ms. Teffner served as Executive Vice President and Chief Financial OfficerCrocs, she spent five years at Weber-Stephen Products LLC, a manufacturer of charcoal and gas grills and accessories,Sperry Top-Sider from October 20112008 to May 2013. Prior to that,2013, where she served as Senior Vice President of Product. Ms. Poole was responsible for the creation and Chief Financial Officer for The Timberland Company,implementation of the global product strategy and led several key initiatives, including the launch of a manufactureryear-round women’s business and retailer of outdoors wear, from September 2009 to September 2011. From 1988 to 2009, she worked in various leadershipspecialty retail stores and sperrytopsider.com. Her footwear industry experience also includes brand-building roles at Sara Lee Corporation, a consumer goods company, including Senior Vice PresidentTimberland from 2004 to 2008 and Chief Financial Officer, Sara Lee International Household and Body Care; Senior Vice President and Chief Financial Officer, Sara Lee Foodservice; and Senior Vice President, Financial Planning and Analysis and Treasurer, Sara Lee Corporation.
BENEFICIAL OWNERSHIP OF OUR SECURITIESand convertible preferred stock as of March 31, 20172020 by:stock or convertible preferred stock;
••
••the “Compensation Tables—Summary Compensation Table below;Table” (below); and
••person'sperson’s percentage ownership of common stock, (a) shares of common stock subject to options or restricted stock units (“RSUs”) held by that person that are currently exercisable, or exercisable (or, in the case of restricted stock units,RSUs, scheduled to vest and settle) within 60 days after March 31, 2017, and (b) shares of common stock into which shares of convertible preferred stock are convertible,2020, are deemed to be outstanding and beneficially owned by that person. None of these shares, however, are deemed outstanding for the purpose of computing the percentage ownership of any other person.stockholder'sstockholder’s name. Percentage ownership is based on 74,081,97167,375,060 shares of our common stock and 200,000 shares of our convertible preferred stock outstanding on March 31, 2017.2020. Unless otherwiseCommon Stock Name of Beneficial Owner Shares Percent 5% Stockholders: 10,718,918 15.90% 6,880,118 10.21% 4,801,332 7.13% Named Executive Officers, Directors, and Director Nominees: Ian M. Bickley 92,207 * Ronald L. Frasch 119,065 * William Gray 10,530 * Beth J. Kaplan 1,060 * Prakash A. Melwani — * 224,576 * Douglas J. Treff 93,728 * 55,680 * 748,986 1.11% Anne Mehlman 13,099 * Daniel P. Hart 204,793 * Carrie W. Teffner — * 1,563,724 2.32% Common Stock Series A Convertible
Preferred Stock Shares Percent Shares Percent 2,479 * 200,000 100% 8,165,421 11.0% - - 8,164,368 11.0% - - 7,013,406 9.5% - - 6,184,164 8.3% - - 6,202,454 8.4% - - 36,296 * - - 96,641 * - - - * - - - * - - 251,183 * - - 21,888 * - - 39,050 * - - 181,797 * 1,000 * 151,178 * - - 46,687 * - - 203,277 * - - 1,027,997 1.4% 1,000 * Reflects 198,503 shares of convertible preferred stock directly held by Blackstone Capital Partners VI L.P. ("BCP VI"), 497 shares of convertible preferred stock directly held by Blackstone Family Investment Partnership VI-ESC L.P., and 2,479 shares of common stock directly held by Blackstone Management Partners L.L.C., an indirect subsidiary of The Blackstone Group L.P. Also reflects 1,000 shares of convertible preferred stock held directly by Mr. Ribatt that BCP VI may be deemed to beneficially own pursuant to an Assignment and Assumption Agreement between Gregg S. Ribatt and BCP VI.Blackstone Management Associates VI L.L.C. is the general partner of BCP VI. BMA VI L.L.C. is the sole member of Blackstone Management Associates VI L.L.C. Blackstone Holdings III L.P. is the managing member of BMA VI L.L.C. BCP VI Side-by-Side GP L.L.C. is the general partner of Blackstone Family Investment Partnership VI-ESC L.P. Blackstone Holdings III L.P. is the managing member of BCP VI Side-by-Side GP L.L.C. Blackstone Holdings III GP L.P. is the general partner of Blackstone Holdings III L.P. Blackstone Holdings III GP Management L.L.C. is the general partner of Blackstone Holdings III GP L.P. The Blackstone Group L.P. is the sole member of Blackstone Holdings III GP Management L.L.C. Blackstone Group Management L.L.C. is the general partner of The Blackstone Group L.P. Blackstone Group Management L.L.C. is wholly-owned by Blackstone's senior managing directors and controlled by its founder, Stephen A. Schwarzman. Each of such Blackstone entities (other than BCP VI, Blackstone Family Investment Partnership VI-ESC L.P. and Blackstone Management Partners L.L.C. to the extent of each of their direct holdings) and Mr. Schwarzman may be deemed to beneficially own the shares beneficially owned by BCP VI, Blackstone Family Investment Partnership VI-ESC L.P. and Blackstone Management Partners L.L.C. to the extent directly or indirectly controlled by it or him, but each disclaims beneficial ownership of such shares. The address of each of Mr. Schwarzman and each of the entities listed in this footnote is c/o The Blackstone Group L.P., 345 Park Avenue, New York, New York 10154.(2)8, 2017.4, 2020. The address for Blackrock,BlackRock, Inc. is 55 East 52nd52nd Street, New York, New YorkNY 10055.(3)9, 2017. The shares are beneficially owned by Wellington Management Group LLP and its affiliates consisting of Wellington Group Holdings LLP, Wellington Investment AdvisorsHoldings LLP and Wellington Management Company LLP.12, 2020. The address of Wellington Managementfor The Vanguard Group LLP and its affiliates is c/o Wellington Management Company LLP, 280 Congress Street, Boston, Massachusetts 02210.(4)10, 2017.13, 2020. The address for AllianceBernstein L.P.Renaissance Technologies LLC is 1345800 Third Avenue, of the Americas, New York, New York 10105.NY 10022.(5)Based solely onSchedule 13G/A filed withchange in control.SEC on February 10, 2017. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.(6)Based solely onearlier of Ms. Wright’s separation of service from the Board or upon a Schedule 13G/A filed with the SEC on January 13, 2017. The address for JPMorgan Chase & Co. is 270 Park Ave., New York, New York 10017.(7)Shares beneficially owned include (i) 85,000change in control.2017; (ii) 70,310 restricted stock units that become immediately vested upon the earlier of Mr. Smach's separation of service from the Board or upon a change in control;2020 and (iii) 12,200 shares held as custodian for Mr. Smach's child under the New York Uniform Gifts to Minors Act, over which Mr. Smach exercises voting and investment power.(8)Includes 29,083 restricted stock units that become immediately vested upon the earlier of Ms. Wright's separation of service from the Board or upon a change in control.(9)Includes 1,000 shares of convertible preferred stock held directly by Mr. Ribatt that BCP VI may be deemed to beneficially own pursuant to an Assignment and Assumption Agreement between Mr. Ribatt and BCP VI.(10)Includes 151,788289,905 shares held by the V&M Rees Revocable Trust, in which Mr. Rees in a trustee and exercises voting and investment power.(11)20,831193,334 shares subject to options that are exercisable within 60 days of March 31, 2017.(12)Shares beneficially owned include 105,831 shares of common stock subject to options that are exercisable or issuable within 60 days of March 31, 20172020 and 99,393 restricted stock units132,795 RSUs that become immediately vested upon the earlier of certain directors'directors’ separation of service from the Board or upon a change in control.Section 16 Beneficial Ownership Reporting ComplianceSection 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires our directors and executive officers and persons who own more than ten percent of our common stock to file with the SEC and any exchange or other system on which such securities are traded or quoted, initial reports of ownership and reports of changes in ownership of our common stock.To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations from certain of our officers and directors that no other reports were required, we believe that all required reports of our officers, directors and greater than ten percent stockholders under Section 16(a) were timely filed during the year ended December 31, 2016.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS(together with Blackstone,(collectively, the "Blackstone Purchasers"“Blackstone Purchasers”), an aggregate of 200,000 shares of our Series A Preferred Convertible Preferred Stock (“convertible preferred stockstock”) for an aggregate purchase price of $198 million, or $990 per share, pursuant to an Investment Agreement between us and Blackstone, dated December 28, 2013 (as amended, the Investment Agreement.“Investment Agreement”). In connection with the issuance of the convertible preferred stock (the "Closing"“Closing”) and pursuant to the Investment Agreement, we paid Blackstone a closing fee of $2 million and reimbursed Blackstone'sBlackstone’s transaction fees and expenses of approximately $4 million. As of March 31, 2017, the Blackstone Purchasers collectively owned allMr. Ribatt, our former Chief Executive Officer and former member of our outstanding shares of convertible preferred stock and, on an as-converted basis, approximately 15.7% of our outstanding common stock. Mr. RibattBoard, was a permitted transferee of Blackstone and purchased 1,000 shares of our Series A convertible preferred stock.discussed above under "Proposal 1 - Electiona result, Blackstone became a beneficial owner of Directors," the Investment Agreement grants Blackstone certain rights to designate directors to serve on our Board. For so long as the Blackstone Purchasers (i) beneficially own at least 95% of our convertible preferred stock or the as-converted common stock purchased pursuant to the Investment Agreement or (ii) maintain beneficial ownership of at least 12.5% of the our outstanding common stock (the "Two-Director Threshold"), Blackstone will have the right to designate for nomination two directors to our Board. For so long as the Blackstone Purchasers beneficially own shares of our convertible preferred stock or the as-converted common stock purchased pursuant to the Investment Agreement that represent lessgreater than the Two-Director Threshold but more than 25% of the number of shares of the as-converted common stock purchased pursuant to the Investment Agreement, Blackstone will have the right to designate for nomination one director to our Board. The directors designated by Blackstone are entitled to serve on Board committees, subject to applicable law and stock exchange rules. Blackstone's ownership currently exceeds the Two-Director Threshold. Blackstone designated Messrs. Melwani and Giordano for nomination to our Board and had previously nominated Mr. Ribatt.Pursuant to the Investment Agreement, Blackstone is subject to certain standstill restrictions which generally restrict Blackstone from acquiring more than 25%5% of our outstanding common stock until the date on which Blackstone is no longer entitled to designate any directors to our Board. In addition, subject to certain customary exceptions, Blackstone was restricted from transferring any shares of the convertible preferred stock until the second anniversary of the Closing and, for so long as any convertible preferred stock is outstanding, may not transfer anystock. On December 5, 2018, we repurchased 100,000 shares of convertible preferred stock to certain of our competitors (as defined infrom the Investment Agreement) or holders of 25% or more of our common stock. Blackstone also has certain preemptive rights and information rights under the Investment Agreement, which are subject to certain conditions.Certificate of DesignationsPursuant to the Certificate of Designations of Series A Convertible Preferred Stock filed with the Delaware Secretary of State on January 24, 2014, which establishes the designations, preferences, and other rights of the convertible preferred stock:•The convertible preferred stock ranks senior to our common stock with respect to dividend rights and rights on liquidation, winding-up and dissolution;•The Blackstone Purchasers are entitled to cumulative dividends payable quarterly in cash at a rate of 6% per annum ofand the stated value of $1,000 per share;•If we fail to make timely dividend payments to the holders of our convertible preferred stock, the dividend rate will increase to 8% per annum until such time as all accrued but unpaid dividends have been paid in full;•The Blackstone Purchasers are entitled to receive any dividends declared or paid on our common stock and are entitled to vote together with the holders of our common stock as a single class, in each case, on an as-converted basis;•The Blackstone Purchasers have certain limited special approval rights, including with respect to the issuance by us ofpari passu or senior equity securities;•The Blackstone Purchasers may, at any time, require us to convertconverted their remaining shares of convertible preferred stock into an aggregate of 6,896,548 shares of our common stock at an implied conversion price of $14.50 per share, subject to certain adjustments;•At our election, all or a portion of the convertible preferred stock will be convertible into the relevant number ofstock. In October 2019, Mr. Ribatt sold his 34,482 shares of our common stock on or after the third anniversary of the Closing, if the closing price of the common stock equals or exceeds $29.00 for 20 consecutive trading days;•The conversion rate is subject to customary anti-dilution and other adjustments subject to certain share caps and other restrictions;•At any time after the eighth anniversary of the Closing, we will have the right to redeem, andstock. On November 4, 2019, the Blackstone Purchasers will havesold their 6,864,545 shares of our common stock in an underwritten public offering. As of such date, the right to require us to repurchase, all or any portionInvestment Agreement was terminated in accordance with its terms. In connection with the termination of the convertible preferred stockInvestment Agreement, Mr. Melwani and Mr. Gray, who were designated by Blackstone under the Investment Agreement, are not standing for re-election and their terms expire at 100% of the stated value, plus all accrued but unpaid dividends; andAnnual Meeting.•Upon certain change in control events involving us, the Blackstone Purchasers can require us to repurchase their shares of convertible preferred stock at 101% of the stated value plus all accrued but unpaid dividends."Registration“Registration Rights Agreement"Agreement”), pursuant to which we have agreed to provide to the Blackstone Purchasers certain customary demand and piggyback registration rights in respect of theits shares of convertible preferred stock and any shares of common stock issued upon conversion of the convertible preferred stock. The Registration Rights Agreement containscontained customary terms and conditions, including certain customary indemnification obligations.receivereceived inventory count services from RGIS, LLC ("RGIS"(“RGIS”), an affiliate of Blackstone. During 2016,Through November 4, 2019 (the date Blackstone ceased to be an affiliate of us), we paid RGIS approximately $400,000$282,000 for inventory services received.("Optiv"(“Optiv”), an affiliate of Blackstone. During 2016,Through November 4, 2019 (the date Blackstone ceased to be an affiliate of us), we paid Optiv approximately $200,000$1.6 million for such services.("Kronos"(“Kronos”), an affiliate of Blackstone. During 2016,Through November 4, 2019 (the date Blackstone ceased to be an affiliate of us), we paid Kronos approximately $200,000$312,000 for such services. Business Conduct and Ethics requires that any transaction involving us in which one of our directors, nominees for director, executive officers, or greater than five percent stockholders, or one of the aforementioned'saforementioned’s immediate family members (each, a "related person"“related person”), have a material interest be approved or ratified by the Audit Committee if the amount involved, when aggregated with the amount of all other transactions between the related person and us, exceeds $100,000 in a fiscal year. The full Board reviews ordinary course of business transactions in which directors have an interest as part of the Board'sBoard’s annual director independence review, and our Worldwide Code of Business Conduct and Ethics permits the full Board to waive any conflicts of interest between us and any director or officer. In determining whether to approve or ratify any such transaction, the Audit Committeeattorneys'attorneys’ fees), judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including any action by us or in our right, arising out of such person'sperson’s services as a director or executive officer of ours, any subsidiary of ours or any other company or enterprise to which the person provided services at our request. We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers.
DIRECTOR COMPENSATIONProgram.Programdirector'sdirector’s election, and annual equity grants. DirectorsMr. Rees, who are employeesis an employee of the Company, areis not eligible to receive this compensation. Directors do not receive additional fees for attendance at meetings. The following describes amountsAmounts payable to our non-employee directors under our director compensation program. Non-employeeprogram are described under “2019 Retainer” below. The former non-employee directors designated by Blackstone under the Investment Agreement, areMessrs. Melwani and Gray, were entitled to receive the standard compensation for non-employee directors; however, such compensation maywas permitted to be paid to Blackstone or its designee, pursuant to the terms of the Investment Agreement.Philosophy/Approach.organizations suppliedgroup approved by the Compensation Committee'sCommittee, based on analysis and recommendations from Meridian, the Compensation Committee’s independent compensation consultant. Changes to director compensation levels or program structure are presented to the full Board for approval. While the program is not targeted to any specific market percentile or position, the overall philosophy is to ensure that overall compensation levels are competitive and appropriate given relevant market practice.2016 Retainer.2016,2019, the Chairman of the Board received an annual retainer of $150,000. The other non-employee directors received an annual retainer of $100,000. Directors who served as chairpersons of Board committees received additional committee retainers, as follows: Audit Committee $30,000; Compensation Committee $25,000; Governance and Nominating Committee $10,000; China Growth Acceleration Committee $50,000; and Information Technology Committee $30,000, 50% of which was paid prior to the Information Technology Committee $30,000.Committee’s termination on January 1, 2020. Directors who served as non-chair members of Board committees receivereceived additional annual committee retainers for committee service, as follows: Audit Committee $15,000; Compensation Committee $10,000; Governance and Nominating Committee $5,000; and Information Technology Committee $10,000.$10,000, 50% of which was paid prior to the Information Technology Committee’s termination on January 1, 2020. These annual retainers are denominated in cash and payable in quarterly installments unless the director elects to be paid in shares of restricted stock or a combination of cash and restricted stock. The number of shares of restricted stock is determined based on the fair market value of our common stock on the date the retainer is payable. The restricted stock vests in four successive quarterly installments from the issuance date. During 2016,2019, Messrs. Giordano, Melwani, Frasch, Gray, and Smach and Ms. Wright elected to receive their annual retainers in cash. Messrs.Mr. Bickley elected to receive his annual retainer 50% in cash and 50% in stock. Mr. Treff elected to receive theirhis annual retainer alland committee retainers in stock.Awards.Awards In 2016, directorsawards for Board serviceaward consisting of a grant of $180,600 in value of our common stock for the Chairman of the Board andstock. The other non-employee directors received a grant of $100,000 in value of our common stock for each of our other non-employee directors. Rather than this common stock grant, directorsstock. Directors can elect to receive restricted stock unitsRSUs that vest upon their cessation of service on the Board.Board in lieu of the common stock grant. Ms. Wright made that election. Messrs. Giordano andMr. Melwani dodid not receive the annual grant of common stock but arewas instead paidcompensated with an additional $100,000 in cash. For 2017, it is anticipated that director equity compensation will be reduced by 10%.2016.Name Fees Earned or
Paid in Cash ($) Stock Awards
($)(1) Option Awards ($) Total ($) — 209,999 — 209,999 107,252 100,003 — 207,255 210,643 — — 210,643 215,643 — — 215,643 186,287 180,599 — 366,886 166,859 100,003 — 266,862 — 225,008 — 225,008 Name Fees Earned or
Paid in Cash ($)Total ($) Ian M. Bickley 37,083 199,153 236,236 Ronald L. Frasch 122,500 99,994 222,494 William Gray 110,000 99,994 209,994 215,000 — 215,000 Thomas J. Smach (Chairman) 170,000 180,598 350,598 — 239,990 239,990 Doreen A. Wright 155,000 99,994 254,994
2019.("FASB"(“FASB”) Accounting Standards Codification ("ASC"(“ASC”) Topic 718-Stock Compensation), excluding the effect of estimated forfeitures. Assumptions used in to calculate these values are included in Note 1112 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2016.2016,2019, each non-employee director who served during 20162019 had the following number of stock options and unvested restricted stock awards outstanding:Name Ian M. Bickley — 1,483 Ronald L. Frasch — — William Gray — — Prakash A. Melwani — — Thomas J. Smach (Chairman) 80,000 80,014 Douglas J. Treff — 3,610 Doreen A. Wright — 52,781 Options
Outstanding at
December 31, 2016 Unvested Restricted
Stock Awards
Outstanding at
December 31, 2016 — 5,350 — — — — — — 100,000 70,310 — 29,083 — 6,080 current director stock ownership guidelines require that each of our directors own shares of our common stock in an amount equal in value to a specified multiple (5x for the Chairman of the Board and 3x for all other directors) of such director'sdirector’s annual cash retainer for Board service (not including any retainers for service on Board committees), to be achieved by. Directors have until the fifth anniversary of (i) the adoption of the modified guidelines in June 2013 (for our existing directors)directors as of June 2013) or (ii) the date of appointment for new directors. As affiliates of Blackstone, Messrs. Melwani and Giordano are not subjectdirectors, to meet the stock ownership guidelines. Currently, all of our directors have met or are withinon track to meet their respective ownership guidelines by the five-year phase-in period for compliance.required deadline.EXECUTIVE COMPENSATIONA LETTER FROM THE CHAIR OF OUR COMPENSATION COMMITTEE20162019 of our named executive officers. We also describe actions regarding compensation taken after fiscal 2016 when it enhances the understanding of our executive compensation program."named“named executive officers"officers” whose compensation information is presented in the tables and discussed in this report include:•Gregg S. Ribatt, Chief Executive Officerformer Interim PrincipalChief Executive Officer
••Carrie W. Teffner,Anne Mehlman, Executive Vice President and Chief Financial Officer
••AdministrativeRisk OfficerIn March 2017, we announced that Mr. Rees will assumeChiefCompany as Executive Officer role effective JuneVice President Finance and Strategic Projects until April 1, 2017. 2019.suchthe date Mr. Ribattof this proxy statement, our stock price has declined significantly since February 2020, consistent with our broader industry, due largely to the COVID-19 pandemic. We remind stockholders that compensation disclosures in this proxy statement focus on our 2019 compensation programs and decisions relative to our 2019 performance. As described herein, our executive compensation program is designed to strongly align realizable compensation with performance and thus, for example, the value of executives’ stock awards is aligned with, and impacted by, changes in our stock price. Consequently, the impact of COVID-19 on our stock price will step downhave a corresponding impact on the 2020 compensation of our named executive officers, which will be described in the next year’s proxy statement. Furthermore, as Chief Executive Officer but will provide consulting services through June 1, 2018 and will remain a membernoted below, in light of the Board.Executive Summary Executive Summary20162019 Business and Financial Highlights20162019 programs and plan designs for our 20172020 programs, the Compensation Committee (the "Committee"“Committee”) considered a number of factors, including the strategic and financial performance and position of our company in 2016. 2019. We had another outstanding year in 2019, as we achieved our second consecutive year of top-line growth, which drove significant selling, general and administrative (“SG&A”) leverage, and returned us to profitability.20162019 included:56.167.1 million pairs of shoes worldwide;worldwide, an increase of 12.1% from 59.8 million pairs in 2018.•Delivered industry leading on time deliveriesGross margin was 50.1% compared to customers;•Our51.5% in 2018, a decline of 140 basis points, partially as a result of transition costs associated with relocation of our distribution center in the U.S. in 2019 and our distribution center in the Netherlands, which is expected to replace our existing facility in 2021. Unfavorable changes in foreign exchange rates decreased gross profit percentageby $13.9 million and offset the improvement of further refined product mix, reduced promotional activities, and increased 150prices on select products.48.3%39.7% of revenues. SG&A expense included $2.9 million of non-recurring charges associated with various cost reduction initiatives compared to 46.8%$21.1 million of non-recurring charges in 2015, in spite of unfavorable exchange rates which reduced our gross profit by $2.2 million;•We continued to optimize our organizational structure, elevating key talent and driving greater management efficiencies;•Selling, general and administrative expenses decreased $55.9 million, or 10.0%, to $503.2 million compared to 2015;•We restructured our marketing program2018 associated with the launchcompletion of our "Come As You Are" campaign and the engagement of celebrity talent such as Drew Barrymore and John Cena in early 2017;•Net loss attributable to common stockholders decreased $66.3 million to a net loss of $31.7 million compared to a net loss of $98.0 million for 2015;•We continued to focus on improving the efficiency and effectiveness of our operations, including the closure of underperforming retail storesour company-operated manufacturing and transferring owned retail distributorsdistribution facilities in subscale markets. DuringMexico and Italy and our SG&A reduction plan, and some prior year charges related to the relocation of our corporate headquarters, which is expected to be completed in 2020.2016, we opened 50 outlet stores and closed 66 full-price stores. In total, during2019 compared to income from operations of $62.9 million for the year ended December 31, 20162018. Our operating margin rose to 10.5% compared to 5.8% in 2018.opened 83closed or transferred to distributors 31 stores in 2019, 48.4% of which were full-priced locations, for a net reduction of 16 company-operated retail stores. Since we began our store reduction program early in 2017, we have closed a net total of 191 stores and closed 84 stores; andTablereduced our total company-operated store count to 367 from 558 at the end of Contents•continued to focushave also placed greater priority on simplifying our product line and disciplined inventory management, which enabled us to reduce our inventory at December 31, 2016 by $21.2 million or 12.6% from $168.2 million to $147.0 million at December 31, 2015.As additional context for the Committee decisions regarding executive compensation, the following table highlights someoutlet stores, so that they now represent 52.6% of our key financial results forstore base, up from 41.6% at the end of 2016.($ in millions) 2016 2015 $ 1,036 $ 1,091 $ 500 $ 511 48.3 % 46.8 % 48.6 % 51.3 % $ 147 $ 168 $ 148 $ 143
•During 2019, we repurchased 6.1 million shares of common stock at an aggregate cost of $147.2 million.
common stock.*Indicates metrics that were specified as performance measures in•In the fourth quarter of 2019, Blackstone and certain of its permitted transferees sold their remaining 6,899,027 shares of our 2016 incentive plans.20162019pay-for-performancepay for performance and align our incentive compensation metrics to key strategic initiatives to further promote long term strategies being undertaken to improve our profitability.Performance Metrics Established in 2016 Eliminated Overlap Between Long- and Short-Term Incentive ProgramsEmphasis on Pay-for-Performance: For 2016,In 2019, the Committee selectedcontinued to use multiple performance metrics and focus on objective, performance-based and “at-risk” pay arrangements. We believe these performance metrics help align the interests of our named executive officers with those of stockholders by making a significant portion of their compensation contingent upon results beneficial to stockholders, and thereby incenting our named executive officers to create long-term value for stockholders. The Committee believes the performance metrics are appropriately aligned with stockholder value as demonstrated by the 50% increase in our stock price during 2019. The performance metrics used for our annual incentive plan are adjusted earnings before interestEBIT (as defined below) and taxes, adjusted free cash flow, along with strategic operative objectives relating to clog and certainsandal silhouette growth, regional-specific channel prioritization, and regional-specific strategy. The non-financial objectives were updated in 2019 to reflect strategic priorities, including the addition of regional-specific objectives. For our named executive officers, the regional-specific, non-financial objectives were e-commerce growth and successful execution of the first phase of our China Long-Term Growth Plan. See “Board of Directors and Committees of the Board—China Growth Acceleration Committee” above. The performance metrics used for our RSU awards were adjusted revenue and adjusted operating measures asmargin, which we believe drive long-term shareholder value creation.Performance Metric 2019 Target Goal as a % of 2018 Actual Results 2019 Target Goal as a % of 2018 Target Goal 149% 212% 61% 94% 106% 113% 128% 147% andis calculated by adjusting GAAP revenue for non-recurring entries.asis calculated by modifying adjusted EBIT and dividing by adjusted revenue.performance measures for the performance-based RSU awards.Committee believes such targets were rigorous and difficult to achieve requiring significant improvements over 2018. The selection of these metrics further diversifies the performance goals and eliminates overlapping metrics between the shortamong our short- and long-term programs.incentive programs and also supports our strategic priorities. The Committee believes using a one-year performance period for the performance-based RSU awards continues to be an appropriate measurement period given our recent growth and continuing turnaround efforts. To further drive stockholder alignment and retention, any earned performance-based RSUs are subject to continued vesting and service requirements, as further described below.
2019 Pay Decisions Rewarded Another Year of Very Strong Company Performance: In 2019, our annual cash incentive plan paid out at 161% of target and our performance-based RSUs were earned at 122% of target. The Committee believes these payouts recognize and reward the named executive officers for a second consecutive year of strong Company financial performance.Addition of Non-FinancialNo Increases in Base Salaries or Target Bonus Percentages for our Named Executive Officers: The Committee approved no increases to the base salaries for the named executive officers for 2019.ProgramProgram:: The In addition to adjusted EBIT and adjusted free cash flow performance targets, the Committee weighted 25% of the target 2016 short-term2019 annual incentive awards to non-financial objectives associated with direct to consumerclog and sandal silhouette growth, product delivery, new product successe-commerce growth, and global SKU alignment.successful execution of the first phase of our China Long-Term Growth Plan. The non-financial measuresoperating objectives are measurable performance metrics, other than with respect to the successful execution of the first phase of our China Long-Term Growth Plan, which was determined in the Committee’s discretion, and, in each case, contain rigorous and difficult to achieve goals. The Committee believes that these non-financial performance goals are key drivers in Crocs' shortour continued short- and long-term transformation,growth, which, if achieved, will ultimately help drive additional stockholder value over the long-term.No Increases2020 Executive Pay Reductions:In light of the COVID-19 pandemic impacts, in Named Executive Officer Salaries for Second Straight Year: In 2016, as with 2015, theMarch 2020, we implemented temporary base salary reductions for executives, including base salary reductions of all named executive officers remained the same salary as was paid in 2014.20% for Messrs. Rees and Hart and Ms. Mehlman.•Sign-On Performance Award Thresholds Not Earned: The performance thresholds have not been achieved on the significant sign-on performance-based RSU grants made to Mr. Ribatt in early 2015, Mr. Rees in 2014 or Ms. Teffner in late 2015. Although the value of such awards are reflected in the Summary Compensation Table below, for the applicable years, none of these performance-based RSUs have actually been earned to date. Further, such awards will not be earned unless the Company's stock price increases significantly from its current price.•Minimal Payouts for the 2016 Annual Incentive Plan: The 2016 annual cash incentive award payout was 25% of the target amount due to achievement of only the non-financial performance goals and the failure to achieve the threshold amounts for the adjusted EBIT and adjusted free cash flow performance measures that represented 75% of the target weighting. In 2015 theannual cash payout was only 5% due to achievement of only the SAP project implementation performance goal (weighted at 10%) and failure to achieve the threshold amounts for the adjusted earnings before interest and taxes and adjusted free cash flow performance measures. The Committee believes this modest payout for the second year in a row demonstrates the difficulty of achievement of the performance goals set by the Committee and the Committee's very strong alignment of pay with performance.•Minimal Vesting of Performance-Based RSUs Granted in 2016: The 2016 performance-based RSU grants were earned at 33% of target due to achievement exceeding the threshold performance level of the revenue performance target and failure to achieve threshold performance for the operating margin performance metric. The Committee believes this payout demonstrates the difficulty of achievement of the performance goals set by the Committee and the Committee's very strong alignment of pay with performance. In addition, 67% of the RSUs that were earned in 2016 remain subject to an additional 2 years of time-based vesting contingent on the executive's continued service with the Company.Officer'sOfficer’s compensation, and those of our other executive officers. The Committee generally considers the recommendations of the Chief Executive Officer with respect to the compensation of the other named executive officers. During 2016,2019, the Committee worked with Meridian, Compensation Partners, an independent executive compensation consultant, for advice and perspective regarding executive compensation market trends and best practices.•Independent Compensation Committee.•Independent compensation consultant. The Committee retains an independent compensation consultant.•Assessment of compensation risk. The Committee assessed our compensation policies and programs and determined that we have no compensation policies and programs that give rise to risks reasonably likely to have a material adverse effect on the Company.•Performance-based pay. The Committee focused on paying our executives for their performance. The Committee believes that the 2016 payout of 25% of the targeted annual cash incentive and achievement of 33% of the targeted performance-based RSUs demonstrate the difficulty of achievement of the performance goals set by the Committee and the Committee's alignment of pay with performance.•Annual say-on-pay vote. We hold annual advisory say-on-pay votes to approve executive compensation and in 2016 received support of over 98% on such proposal.•Mix of CEO's pay. Approximately 75% of the 2016 total target compensation for Mr. Ribatt was performance-based or at-risk.•Weight of financial metrics. The Committee continued to weight 2016 performance measures towards those impacting profitability and added non-financial measures that it believed were key to the success of our turnaround.•Use of multiple performance metrics. The Committee used multiple weighted performance measures for the 2016 annual incentive and performance RSUs in an attempt to better connect executive compensation to overall company performance. The Committee also eliminated overlap between the performance measures used in our annual incentive program and performance RSUs.•Double-trigger vesting and reasonable change in control protections. We maintain a reasonable change in control plan ("CIC Plan"). The CIC Plan provides for "double-trigger" vesting with a definition of "change in control" consistent with our stockholder-approved equity plans. In order to keep management focused on the best interests of our stockholders during potentially uncertain periods, the CIC Plan provides our named executive officers with reasonable compensation protections upon a change in control followed by a termination without cause or for good reason.•Stock ownership guidelines. Our Board adopted robust stock ownership guidelines that our officers and non-employee directors are expected to meet within five years.•Clawback. In the case of a financial restatement, annual and long-term incentive awards are subject to the Company's Recovery of Executive Compensation Policy and any clawback or recoupment policy adopted by us pursuant to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act.Don'tDon’t Do:•No excise tax gross-ups. We do not provide our management with "excise tax gross-ups"•Ban on hedging and pledging. We do not allow our management or directors to engage in hedging transactions in our stock or to pledge our stock to secure loans or other obligations.•No repricings. Our equity plans do not allow repricing of stock option or stock appreciation rights without stockholder approval.•No excessive executive benefit programs. We do not provide our management with pensions or any other enhanced benefit programs beyond those that are typically available to all other employees other than a voluntary deferred compensation plan for senior executives and a limited supplemental retirement plan.•No excessive perquisites. Our management receives minimal perquisites.•No "single trigger" vesting. Our CIC Plan provides for "double-trigger" vesting upon a change in control.2016, we held2019, stockholders signaled their strong support for our sixth advisory stockholder vote to approve theexecutive compensation of our named executive officers ("say-on-pay"). The compensation of our named executive officers reported in our 2016 proxy statement was approved by over 98%program where 96% of the votes cast at the 2016 annual meeting.approved our 2019 say-on-pay proposal. These results were similar to the results at our 2011 through 20152018 annual meetings. The Committee did not change its approach to our executive compensation practices in 2016. The Committee has considered and will continue to consider the outcome of our say-on-paysay-on-•Attract and retain exemplary executive talent who are able to succeed in our fast-paced, rapidly evolving company;Align our executives’ compensation with our stockholders’ interests Hold our executives accountable to stockholders Assure that our total compensation program aligns with good corporate governance and best practices Attract and retain exemplary executive talent who are able to succeed in our fast-paced, rapidly evolving company Motivate our executives to achieve our financial and strategic business objectives by paying them for performance •Hold our executives accountable to stockholders;•Motivate our executives to achieve our financial and strategic business objectives by paying them for performance;•Align our executives' compensation with our stockholders' interests; and•Assure that our total compensation program aligns with good corporate governance and best practices.•Base salary;•Annual cash incentive awards;•Long-term incentives (in the form of equity awards); and•Limited executive benefits and perquisites.Information on the key elements of our executive compensation program are summarized below: Compensation ElementObjective CharacteristicsCompensation ElementsObjectiveCharacteristics Base Salary: CompensatesCompensate executives for their level of experience, responsibility and individual performance •Helps attract and retain talent Annual Cash Incentives: PromotesPromote achieving our annual corporate financial goals, as well as other objectives deemed important to our long-term successFurther alignsAlign management and stockholder intereststhe executive'sfactors such as executive’s job responsibilities, and sustained performance in role/potential,
internal equity, and competitive market practicesthe Company'sour performance and individual contribution Long-Term Incentives: PromotesPromote achieving our long-term corporate financial goals with the acquisition of common stock through RSUsFurther alignsAlign management andwith stockholder interestscomponent; annualcomponentthe executive'sfactors such as executive’s job responsibilities, and sustained performance in role/potential,
internal equity, and competitive market practices Time-based component aids in retention
3-year vesting period (67% are earned based on achievement of performance goals and 33% vest based on continued service)companyCompany performance and stock price Severance and Change in Control Programs: Facilitates attractingFacilitate attraction and retainingretention of high caliber executives in a competitive labor market in which formal severance plans are commonexecutive'sexecutive’s employment is terminated under certain circumstances and, in the case of a change in control, to help provide continuity of management through the transition The Committee strives to use a consistent peer group. There were no differences between the peer group used in 2016 and the peer group used in the 2015 executive compensation review process. and generally reviews the compensation data of our peer companies and industry to understand relevant market competitive compensation.practices. The Committee focuses on ensuring that the performance-based elements of ourtrends. However, thetrends, when appropriate for our business. The Committee does not benchmark compensation to a specific percentage of the compensation of peer companies. has approved a peer group based on analysis and recommendations from Meridian, an independent compensation consultant. The peer group is selected based on the key industry criteria noted below, and takes into consideration each company'scompany’s revenue, market capitalization and other key financial metrics. Thismetrics (e.g., international sales and direct to consumer sales). The peer group is comprised of 14 publicly tradedreferenced for 2019 pay decisions included 13 companies. As of December 31, 2016, our market capitalization and revenues were both below the 25th percentile of this group, based on annual revenue as of the most recent available fiscal year end. Compensation Committee when reviewing the peer group data. We believe these companies are broadly comparable to us as they are made up of footwear and apparel companies with sophisticated and often international operations and represent our labor market for talent for key leadership positions. The Committee regularly reviews our peer group to determine if adjustments are necessary to ensure that it continues to be relevant or if additional peer companies are necessary to provide appropriate information on market practices and compensation levels.20162019 peer companies are listed below:Caleres, Inc. Columbia Sportswear Co.CompanyDeckers Outdoor Corporation DSW Inc. Fossil Group, Inc. G III Apparel Group, Ltd. Sketchers USA, Inc.Deckers Outdoor Corp.Genesco Inc. lululemon athletica inc. Oxford Industries, Inc. Skechers U.S.A., Inc. Steven Madden, LTDDSW Inc.Ltd.Oxford Industries, Inc.Under Armour,Vera Bradley, Inc.Fossil, Inc.Perry Ellis International, Inc.Wolverine Worldwide, Inc. Genesco Inc.Quiksilver, Inc.Total TargetPositioningCommittee removed Perry Ellis International, as it was acquired in a take-private transaction in the third quarter of 2018. Kate Spade & Co. was also removed from the peer group, as it was acquired by Coach, Inc. in the second quarter of 2017.well over 50%a significant majority of each named executive officer'sofficer’s total target compensation should be in the form of annual cash performance-based awards and equity awards that are earned upon performance. We believe that the total target compensation opportunities offered toachievement of performance goals and aligned with our executives are sufficient to reduce the need for anything other than limited executive perquisites or enhanced benefit programs beyond those that are typically available to all other employees.2016, about 25%2019, 17% of the total targeted compensation (base salary, annual cash incentive and long-term equity incentive) of our Chief Executive Officer was base salary and 75%83% was performance-based or at-risk.at-risk consisting of our annual cash incentive and long-term equity incentive grants. In 2016,2019, the Committee also continued to ensure that a significant proportion of the annual long-term incentive grants vest based on achievement of performance factors. Below are chartsat riskat-risk compensation for Mr. RibattRees and our other current named executive officers based on the targeted 20162019 compensation amounts:Target Compensation
As shown in the graph above, approximately 25% of our CEO's and average named executive officer's total potential performance-based and at-risk compensation was realized in 2016. Realized performance-based and at-risk compensation consists of 2016 actual cash bonus payments, market value of earned performance-based RSUs on the date of the Committee's performance certification and market value of time-based RSUs on the date of vesting.2016factors. factors (e.g., internal equity and succession planning). No adjustments were made to 2019 base salaries for our named executive officers.20162019 are below:Andrew Rees 950,000 Anne Mehlman 550,000 Daniel P. Hart 523,688 Named Executive Officer 2016 Base Salary Increase Over
2015 Base Salary $ 950,000 0% $ 700,000 0% $ 650,000 0% $ 523,688 0% There were no changes to(1) Because Ms. Teffner ceased being an executive officer in April 2019, she is not included in the 2016tables throughout this section because did not receive a base salary increase or incentive compensation awards for our executive officers2019.the second year in a row.companyCompany performance goals provides our officers additional incentive to outperformmeet or exceed our peer companiesstrategic Company goals and ensures that we attract and retain talented named executive officers.2016,2019, the Committee introduced non-financial goalscontinued to weight 75% of the annual incentive program representingon financial metrics and 25% of the bonus opportunity in orderon strategic operating goals to provide focus and incentive to achieve key strategic non-financial objectives during the Company's turnaround.Company’s turnaround and continued growth. The Committee also established non-overlapping performance goals fornon-financial objectives were updated in 2019 to reflect strategic priorities, including the annual incentive program and performance-based RSU grants to further diversify performance goals and eliminate metrics that measure and reward the same performance under both programs.Tableaddition of Contentsregional-specific objectives.executive'sexecutive’s base salary, based on factors such as: the estimated contribution and responsibility of the individual named executive officer, market practices, internal equity and considering market practices. the recommendation of the Chief Executive Officer (for all named executive officers excluding himself).2016,2019, the targets for our named executive officers remained the same as of December 31, 2016 were:Named Executive Officer Annual Incentive Plan Target
(as a percentage of Base Salary)Gregg S. Ribatt115120 % Andrew Rees10075 % Carrie Teffner8575 % Daniel P. HartN/A 75%zero50% to 200% of the incentive plan target.20162019 performance year, the Committee selected adjusted earnings before interest and taxes,EBIT, adjusted free cash flow, and objectives associated with direct to consumerclog and sandal silhouette growth, product delivery, new product successregional-specific channel prioritization, and global SKU alignmentregional-specific strategy as performance measures in the annual incentive program becauseprogram. The non-financial objectives were updated in 2019 to reflect strategic priorities, including the Committee believed that those measures encouraged participants to focus on key financialaddition of regional-specific objectives. For our named executive officers, the regional-specific non-financial objectives were e-commerce growth and non-financial objectives.successful execution of the first phase of our China Long-Term Growth Plan. The Committee also continued to include adjusted earnings before interestEBIT and taxesadjusted free cash flow to more closely align compensation with a key performance metricmetrics associated with restructuring and profitability.During 2016, each of these performance measures had a threshold payout of 50% of the named executive officer's annual incentive award target and a maximum payout of 200% of the target. For 2016, these goals and their applicable weightings were:2016 Performance Goal Targets Weighting Actual
Performance Weighted 2016
Actual
Performance as a
Percentage of
Target 37.5 % Threshold Not Achieved 0% 37.5 % Threshold Not Achieved 0% 25 % Targets Achieved 25% (1)Adjusted earnings before interest and taxes is calculated by excluding interest expense, tax expense, foreign currency changes and prior period entries from GAAP net income (loss) attributable to common stockholders.(2)Adjusted free cash flow is calculated by modifying adjusted earnings before interest and taxes (as defined in the footnote above) by: subtracting capital expenditures; adding year-over-year changes in inventory, accounts receivable and accounts payable; and adding depreciation, amortization and stock based compensation expense.The non-financial performance targets required: (1) 2016 global direct to consumer (ecommerce and retail combined) performance to be positive vs. 2015; (2) on time deliveries in 2016 meeting customer expectations 85% of the time; and (3) 2016 seasonal global SKU alignment between our threeoperating regions at 50% or higher and seasonal new product introduction growth of 20% or higher vs. 2015. Each of these objectives was met.20162019 actual results, and applying the weighting described above, our named executive officers were eligible to be paid annual cash incentive awards at 25%161% of their respective target annual incentive award amounts. The Committee has discretion to depart from the formula in approving the annual incentive awards by decreasing, but not increasing, incentive awards after general results are known, butknown. The Committee did not exercise that discretion in 2016.2019 Performance Targets Weighting Actual Performance Weighted 2019 Actual Performance as a Percentage of Target 37.5% Exceeded Target Goal (162% payout) 61% 37.5% Exceeded Maximum Goal (200% payout) 75% 25% All 3 Targets Achieved 25% TOTAL: 161% officer'sofficer’s compensation should be in the form of equity awards. Each yearFor 2019, the Committee considers the numberamount of shareslong-term incentive awards granted to grant and the appropriate type and combination of equity-based awards in makingour named executive officer grant decisions.officers was based on a review of market practices by Meridian, our independent compensation consultant, the recommendations of the Chief Executive Officer (for executive officers other than himself), personal performance, internal equity, and expected future contributions, among other factors.2016Program.Program. In 2016,2019, all of our named executive officers received grants of RSUs, 67% of which are earned based on satisfaction of performance goals and 33% of which vest based on continued service. This represented an increase in the proportion of performance-based awards from prior years further underscoring the Committee's focus on paying for performance. The material terms of these 20162019 RSU awards are as follows:Time-Based RSUs Performance-Based RSUs Time-Based RSUsPerformance GoalGoals Potential AwardAwards Further Time Vesting Vest in three annual installments beginning one year after the date of grant Achievement of 20162019 adjusted revenue and adjusted operating margin targetsExecutive may earn from 50% to 200% of the target number of RSUs based on the level of achievement of the performance goal - no RSUs are earned if performance falls below established threshold goals Earned RSUs vest 33% upon satisfaction of performance goal and 33% in each of the next two years For 2016, the amount of RSU awards granted to these named executive officers was based on a review of the equity compensation of our peer companies, input from the independent compensation consultant and the Committee's assessment of each named executive officer's personal performance, internal equity and expected future contributions, among other factors.further demonstratesupport our pay-for-performance philosophy and better align the interests of our named executive officers with those of our stockholders. The Committee grants RSUs because it generally believes that full valuefull-value awards such as RSUs offer a stronger retention incentive than do stock options.options while also providing alignment with stockholders. In addition, RSUs are less dilutive to our current stockholders as fewer RSUs are necessary to provide the same equity benefit compared to stock options.selected 2016retained adjusted revenue and adjusted operating margin as the performance metrics used infor the 20162019 RSU grant because it views these metrics as primary drivers of enhanced stockholder value and appropriate measures of performance given the Company's current restructuring plans.our continued, successful transformation efforts. The performance-based RSUs granted in 20162019 were earned at 33%121.8% of target because 20162019 adjusted revenue was less thanapproximately 123.1% of target resulting in 65% of the revenue performance shares being earned. In total only 33% of the2016 performance shares were earned after factoring inand adjusted operating margin performance which did not meet threshold performance.2016 Performance RSU Goal Targets Actual Performance Weighting Weighted 2016 Actual
Performance as a
Percentage of Target $1,027 million 50 % 33% Threshold not achieved 50 % 0% 2019 Performance RSU Targets Actual Performance Weighting Weighted 2019 Actual Performance as a Percentage of Target $1,238.5 million 50% 61.6% 14.0% 50% 60.2% TOTAL: 121.8% constant currency.non-recurring entries.Vesting-2011Vesting - 2013 through 20162019very challenging, further demonstratingappropriate, drive executive performance and demonstrate the Committee'sCommittee’s pay-for-performance philosophy. To illustrate the challenging performance goals, the below chart reflects the percentage of performance-based RSU awards that were earned by our executives since 2011.Grant Years Percent Earned 2013 —% 2014 39% 2015 25% 2016 33% 2017 91% 2018 129% 2019 122% Grant Year Percent Earned 99% 0% 0% 39% 25% 33% 20172017,2020, the Committee has retained the financial metrics used in the 20162019 incentive programs, specifically adjusted revenue and adjusted operating margin for the long-term incentive program and adjusted earnings before interest and taxesEBIT and adjusted free cash flow for the annual cash incentive program. Similar to 2016,2019, the annual cash incentive program provides that 25% of the annual cash award will be determined by three non-financialstrategic operating metrics. The 20172020 non-financial metrics in the annual incentive plan have been newly selected to reflect current priorities and consist of on time deliveries, e-commerce growth and growth in the clog silhouette sales. In connection with the 2017 long term incentive equity awards, the Committee has taken steps to award shares to a smaller employee population and reduce the number of shares granted under the program. In addition, as noted above, Mr. Ribatt will step down from his position as Chief Executive Officer, effective June 1, 2017. He will not be eligible to receive an annual cash incentive for 2017 and was not granted a long-term incentive plan award in 2017."All“All Other Compensation,"” are reasonable, competitive and consistent with our overall executive compensation program. Those benefits consist principally of employer-paid premiums on health insurance.("which was amended and restated in 2014, and further amended and restated in 2018 (“CIC Plan"Plan”), for eligible employees, including the named executive officers. The CIC Plan contains a "double-trigger"“double-trigger” whereby if a "change“change in control"control” occurs and the participant'sparticipant’s employment is terminated by us without "cause"“cause” or the participant resigns for "good reason"“good reason” within the two-yearchange“change in control,” the participants will be entitled to accelerated vesting of certain equity awards and a multiple of salary and bonus and certain continuing health care benefits.bonus. The Committee believes that this approach will enhance stockholder value in the context of an acquisition, and align executives with the interests of our stockholders. The 2018 amendment and restatement of the CIC Plan made certain changes to further align the CIC Plan with market practices and good governance such as, among other things, removing the right to certain continued health coverage benefits and expressly requiring participants to agree to certain restrictive covenants, including non-competition and non-solicitation, in order to receive benefits under the CIC Plan following a “change in control.” For a more detailed discussion of the CIC Plan and definitions of "change“change in control," "cause,"” “cause,” and "good reason"“good reason” under the CIC Plan, see the "Potential“Potential Payments on Termination or Change in Control"Control” below."cause"“cause”) or his resignation for "good“good reason."” For a more detailed discussion of the agreement and definitions of "cause"“cause” and "good“good reason,"” see "Potential“Potential Payments on Termination or Change in Control"Control” below.Messrs. Ribatt andMr. Rees and Ms.Mses. Mehlman and Teffner setting forth, among other things, the initial terms of their base salary, target bonus, and long-term equity targets along with the terms of certain sign-on equity awards. The offer letters also provide that if the executive is terminated by us without "cause"“cause” (as defined in the offer letter) or if the executive resigns for "good reason"“good reason” (as defined in the offer letter), subject to execution of a general release of claims, the executive will be entitled to receive a lump sum payment equal to the executive'sexecutive’s then-current base salary plus an amount equal to the then-current target annual bonus. If the executive is terminated by us without cause,“cause,” resigns for good reason“good reason” or in the event of death or "disability"“disability” (as defined in the Company'sCompany’s equity incentive plan), the executive will be entitled to certain vesting of equity awards. The offer letters also provide that the executives are eligible to participate in the CIC Plan. The offer letters contain noncompetitionnon-competition and non-solicitation covenants which restrict the executives from taking part in certain competitive activities for a period of one year following their termination of employment with us. For a more detailed discussion of the offer letters and definitions of "cause"“cause” and "good“good reason,"” see "Potential“Potential Payments on Termination or Change in Control"Control” below.Mr. Rees' Supplemented Offer LetterIn addition, on February 23, 2017, in connection with his appointment to Chief Executive Officer, we supplemented Mr. Rees' offer letter to provide that effective June 1, 2017, Mr. Rees' annual salary will be increased to $950,000 and his annual incentive target will be increased to 115% of his annual salary. In addition, the value of Mr. Rees' long-term annual incentive award for 2017 was $1.62 million and he will be granted a one-time award of options to purchase 200,000 shares of common stock, vesting ratably on each of the first three anniversaries of the effective date of his appointment.Additional Considerations Additional Considerations�� Stock Ownership
GuidelinesIn June 2013, the Committee modifiedWe maintain our stock ownership guidelines to ensure that our executive officers have a meaningful stake in theour equity of the Company and to further align the interests of our executives with the long-term interests of our stockholders. The guidelines require that each of our named executive officers own shares of our common stock in an amount equal in value to a specified multiple (5x for our Chief Executive Officer and 3x for all other named executive officers) of such named executive officer'sofficer’s base salary, to be achieved by the fifth anniversary of (i) the adoption of the modified guidelines (for our existing executive officers) or (ii) the date of hire for new executive officers. The ownership guidelines are based on analysis of peer and market practices, as prepared by the Committee's independent compensation consultant and are more stringent than the previous ownership guidelines. All of our executive officers are making progress towards their respective ownership multiples and are still within the five-year phase-in period for compliance.compliance, with the exception of our Chief Legal and Risk Officer, who is outside of this phase-in period and is in compliance with the stock ownership guidelines. Clawback Policy Under our Recovery of Executive Compensation Policy, at the discretion of the Committee, executives may be required to repay awards to us if within two years of an award under our annual incentive plan and equity incentive plan: (i) we are required to restate our financial statements due to fraud or willful misconduct involving the executive; or (ii) the executive took part in any fraud, negligence or breach of fiduciary duty.
We have also adopted a policy whereby any annual and longer-term incentive compensation awards granted to management will be subject to any other clawback or recoupment policy adopted by us, including pursuant to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Prohibition on Hedging and Pledging We do not allow our management or directors to engage in hedging transactions inon our stock or to pledge our stock to secure loans or other obligations. A description of our anti-hedging and anti-pledging policy can be found in “Corporate Governance—Anti-Hedging and Anti-Pledging Policy”. No Tax Gross-Ups in our CIC Agreements None of our change in control agreements with our executive officers contain excise tax gross-up provisions. Double Trigger Provisions in our CIC Agreements We maintain a reasonable change in control plan. The CIC Plan provides for "double-trigger"“double-trigger” vesting with a definition of "change“change in control"control” consistent with our stockholder-approved equity plans. In order to keep management focused on the best interests of our stockholders during potentially uncertain periods, the CIC Plan provides our named executive officers with reasonable compensation protections upon a change in control followed by a termination without cause or for good reason. Equity Granting Practices The Committee has generally determined to make our annual equity award grants at the regular meeting of the Committee held in the first quarter of each year. The Committee meeting date, or the next business day if the meeting falls on a day where the NASDAQNasdaq Global Select Market is closed for trading, is typically the effective grant date for the grants.
We also may grant equity awards (e.g., options, restricted stock) to recognize increased responsibilities or special contributions, attract new hires, retain executives or recognize certain other special circumstances that occur throughout the year. The effective date of these grants is determined based on the timing of the recognition or recruitment event and approved on or in advance of the effective date of the grant. The exercise/grant price is the fair market value of our common stock on the effective date. The Committee approves all equity grants to executive officers. We do not permit repricing of stock options without stockholder approval. Deductibility of Executive Compensation Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended (the "Code"(“the Code”), imposes limits the deductibility of certain compensation to $1 million paid to certain officers as a $1.0business expense in any tax year. For taxable years beginning after December 31, 2017, legislation signed into law in December 2017 (“Tax Reform”) expanded the number of individuals covered by the Section 162(m) deductibility limit and repealed the exception that qualified “performance-based” compensation as excluded from the $1 million deductibility limit if, among other requirements, the compensation is payable only upon attainment of pre-established, objective performance goals under a plan approved by our stockholders.
Long-term incentive compensation and annual limit onincentive awards approved by the amount thatCommittee prior to Tax Reform for our Chief Executive Officer and those executive officers whose overall compensation was likely to exceed $1 million was generally structured to meet the requirements for the “performance-based” compensation exception under Section 162(m). As a public company may deduct forresult of Tax Reform, compensation paid to our chiefcovered executive officer orofficers in excess of $1 million may not be deductible, unless it qualifies for transition relief applicable to anycertain arrangements in place as of November 2, 2017. Compensation granted in the past may not qualify as “performance-based compensation” under certain circumstances. While the Committee considers the impact of Section 162(m) as well as other tax and accounting consequences when developing and implementing the Company’s executive compensation programs, the Committee retains the flexibility to design and administer compensation programs that are in the best interests of the Company and its stockholders.Accounting Considerations three other most highly compensated executive officers (other than the chief financial officer) who are still employed at the end of the applicable tax year. The limit does not apply to compensation that meets the requirements of the Code for "qualified performance-based" compensation.The Committee reviews and considers the deductibility ofequity awards with our overall executive compensation under Section 162(m) of the Code each year. In certain situations, the Committee may approve compensation that does not meet the requirements for performance-based compensation under Section 162(m) of the Code in order to ensure competitive levels of total compensation for our executive officers.philosophy and objectives.
COMPENSATION COMMITTEE REPORTdiscussion,discussions, the Compensation Committee recommended to the Board that the foregoing Compensation Discussion and Analysis be included in this proxy statement.Ian M. Bickley
COMPENSATION TABLES2016, 20152019, 2018 and 20142017 for each of our named executive officers. Name and Principal Position
($)
($)
($)
Incentive Plan
Compensation
($)
Compensation(2)
($)
($) Gregg S. Ribatt(3) 2016 950,000 — 1,799,998 273,125 25,469 3,048,592 Chief Executive Officer 2015 883,616 — 4,095,934 43,856 11,496 5,034,902 Andrew Rees(4) 2016 700,000 — 1,500,002 175,000 26,781 2,401,783 President and former Interim 2015 700,000 — 1,867,224 35,000 25,626 2,627,850 2014 390,385 200,000 2,517,691 392,000 12,646 3,512,722 Carrie W. Teffner(5) 2016 650,000 — 951,090 138,125 33,030 1,772,245 Executive Vice President and Chief 2015 70,000 75,000 1,255,660 — 142 1,400,802 Daniel P. Hart 2016 523,688 — 618,211 98,192 26,619 1,266,710 Executive Vice President, Chief 2015 523,688 125,000 557,500 15,711 26,233 1,248,132 2014 523,496 105,800 896,199 138,254 30,116 1,693,865 Name and Principal Position Year Salary ($) Non-Equity Incentive Plan Compensation ($) Total ($) Andrew Rees 2019 950,000 — 3,409,982 — 1,831,980 25,785 6,217,747 President and Chief Executive Officer 2018 950,000 — 6,132,539 — 1,995,000 23,275 9,100,814 2017 841,396 — 1,564,000 474,800 1,024,634 19,480 3,924,311 2019 550,000 — 749,988 — 662,888 31,294 1,994,170 Executive Vice President and Chief Financial Officer 2018 181,923 200,000 199,997 — 238,774 56,398 877,092 Daniel P. Hart 2019 523,688 — 499,967 — 631,174 30,967 1,685,796 Executive Vice President, Chief Legal and Risk Officer 2018 523,688 — 489,984 — 687,340 28,513 1,729,525 2017 523,688 — 476,000 — 415,939 20,837 1,436,463 2019 186,375 — — — — 42,630 229,005 Former Executive Vice President, Finance and Strategic Projects 2018 682,500 — 979,996 — 1,015,219 47,121 2,724,836 2017 673,850 — 952,000 — 605,351 50,457 2,281,838 1112 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2016.2019. The grant date fair value of stock awards, which are comprised of time-based and performance-based RSUs, includes the grant date fair value for the performance-based RSUs calculated based on the target amount for the award period commencing in the year indicated. For 2016,2019, the total aggregate grant date fair value of stock awards, including the time-based RSUs and the performance-based RSUs assuming the highest level of payout for performance against assigned targets would be as follows: $3.0 million for Mr. Ribatt, $2.5$5.7 million for Mr. Rees, $1.6$1.3 million for Ms. TeffnerMehlman, and $1.0$0.8 million for Mr. Hart.(2)20162019 represents the following for each of our named executive officers: (i) Company matches to employee 401(k) contributions in the amounts of $10,600 for each of Messrs. Ribatt, Rees and Hart and $0 for Ms.Mses. Mehlman and Teffner; (ii) incremental healthcare premiums paid by us that are not offered to other non-executive employees in the amount of $12,855$12,084 for each named executive officer;Mr. Rees, $12,031 for Ms. Mehlman, $12,083 for Mr. Hart, and $3,577 for Ms. Teffner; (iii) group term life insurance premiums paid-in full by us in the Companyamount of $2,601 for each named executive officer,Mr. Rees, $1,026 for Ms. Mehlman, $7,524 for Mr. Hart, and $557 for Ms. Teffner; (iv) certain housingcommuting expenses of $18,026$630 for Ms. Teffner; and (iv) certain recognition gifts made(v) deferred compensation of $27,216 to Ms. Teffner. Messrs. Rees and Hart and Ms. Mehlman also are provided the named executive officers.(3)Mr. Ribatt commenced service as our Chief Executive Officer on January 28, 2015.(4)Mr. Rees commenced service as our President and interim principal executive officer on June 9, 2014.TeffnerMehlman commenced service as our Executive Vice President and Chief Financial Officer on August 24, 2018.2015.2015 through August 24, 2018 and continued as our Executive Vice President Finance and Strategic Projects until April 1, 2019. The base salary noted represents a prorated amount for the period beginning January 1, 2019 and ended April 1, 2019.restricted stock unitsRSUs granted during fiscal year 2016. Grant
Date
Fair
Value of
Stock
and
Option
Awards(1)
($) All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards Estimated Future Payouts
Under Equity Incentive Plan
Awards Name Type of Award Grant Date Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) Annual Incentive Award — 1,092,500 2,185,000 — — — — — Time-Based RSUs 3/8/2016 — — — — — — 62,990 593,996 Performance-Based RSUs 3/8/2016 — — — 63,945 127,890 255,780 — 1,206,002
700,000
1,400,000 Time-Based RSUs 3/8/2016 — — — — — — 52,492 495,000 Performance-Based RSUs 3/8/2016 — — — 53,288 106,575 213,150 — 1,005,002
552,500
1,105,000 Time-Based RSUs 3/1/2016 — — — — — — 34,686 317,030 Performance-Based RSUs 3/1/2016 — — — 34,686 69,372 138,744 — 634,060
392,766
785,532 Time-Based RSUs 3/1/2016 — — — — — — 22,546 206,070 Performance-Based RSUs 3/1/2016 — — — 22,546 45,092 90,184 — 412,141 Estimated Future Payouts Under Non-Equity Incentive Plan Awards Estimated Future Payouts Under Equity Incentive Plan Awards All Other Stock Awards: Number of Shares of Stock or Units
(#) Name Type of Award Andrew Rees Annual Incentive Award — 1,140,000 2,280,000 — — — — — Time-Based RSUs 3/7/19 — — — — — — 44,355 1,125,286 Performance-Based RSUs 3/7/19 — — — 45,028 90,055 180,110 — 2,284,695 Anne Mehlman Annual Incentive Award — 412,500 825,000 — — — — — Time-Based RSUs 3/7/19 — — — — — — 9,853 249,971 Performance-Based RSUs 3/7/19 — — — 9,855 19,709 39,418 — 500,017 Daniel P. Hart Annual Incentive Award — 392,766 785,532 — — — — — Time-Based RSUs 3/7/19 — — — — — — 6,568 166,630 Performance-Based RSUs 3/7/19 — — — 6,570 13,139 26,278 — 333,336 Carrie W. Teffner N/A — — — — — — — —
stock awards, including the time-based RSUs and the performance-based RSUs assuming the highest level of payout for performance against assigned targets would be as follows: $5.7 million for Mr. Rees, $1.3 million for Ms. Mehlman, and $0.8 million for Mr. Hart.aggregategrant date fair value of stock awards, which are comprised of time-based and performance-based RSUs, includes the grant date fair value for the performance-based RSUs for all named executive officers was calculated based on the target numberamount for the award period commencing in the year indicated. For 2019, the total aggregate grant date fair value of RSUs.Awards.Awards. In 2016,2019, annual incentive amounts were paid at 25%161% of target, as reflected in the "Non-Equity“Non-Equity Incentive Plan Compensation"Compensation” column of the "Summary“Summary Compensation Table"Table” set forth above.The amounts shown for non-equity incentive plan awards represent the target and maximum amounts of annual cash incentive compensation that, depending on performance results, might have been paid to each executive for 20162019 performance contingent on achievement of specified levels of adjusted earnings before interest and taxes,EBIT, adjusted free cash flow, and certain non-financial metrics. The potential payments were contingent on achieving the target level of performance with ranges from zero to 200% of the executive'sexecutive’s annual incentive target. These awards are described in further detail under "Compensation“Compensation Discussion and Analysis"Analysis” above.("RSUs"(“RSUs”).. The amounts shown for equity incentive plan awards represent the number of RSUs awarded to the executivesnamed executive officers in 20162019 and the grant date fair valuevalues of the RSUs determined in accordance with FASB ASC 718, as follows.718. The amounts shown for RSUs granted to our named executive officers represent awards of restricted stock unitsRSUs as part of a performance incentive plan. One-third of theseTime-based RSUs vest in three equal annual installments beginning one year after the date of grant based on continued employment. Performance-based RSUs vest in three equal annual installments beginning one year after the grant date, pending certification of performance achievement by the Compensation Committee and subject to continued employment. The other two-thirdsnumber of performance-based RSUs awarded may be earned frombetween 50% toand 200% of the target number of RSUs, contingent on the level of adjusted revenue and adjusted operating margin performance goals and, if achieved, vest in three equal annual installments, 33% on certification of the achievement of performance by the Compensation Committee and 33% in each of the next two years subject to continued employment.achieved. These RSU awards are described in further detail under "Compensation“Compensation Discussion and Analysis"Analysis” above.Letters.Letters. We have entered into offer letters with Mr. Ribatt, Mr. Rees and Ms.Mses. Mehlman and Teffner, providingwhich provide for certain initial compensation and other benefits that are described under "Offer Letters" in "Compensation Discussion and Analysis" above.benefits."Compensation“Compensation Discussion and Analysis"Analysis” above, we believe that a substantial portion of each named executive officer'sofficer’s compensation should be in the form of performance-based annual incentive awards and equity awards. Base salary of the named executive officers is set at levels that the Compensation Committee believes are competitive with our peer companies, with the expectation that shortfalls in base pay, if any, will be recouped through performance bonuses. The Compensation Committee believes that our current program substantially aligns the compensation of our named executive officers with the compensation of executive officers of our peer companies, while also permitting the Compensation Committee to provide incentives to the named executive officers to pursue performance that increases stockholder value. Please see "Compensation“Compensation Discussion and Analysis"Analysis” for a description of the objectives of our compensation program and overall compensation philosophy.restricted stock unitRSU awards held by our named executive officers as of December 31, 2016.2019. Market values for outstanding stock awards are presented as of the end of 20162019 based on the closing price of our common stock on the NASDAQNasdaq Global Select Market on December 30, 2016, the last trading day31, 2019 of 2016, of $6.86$41.89 per share. Option Awards Stock Awards Name Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable Option
Exercise
Price
($) Option
Expiration
Date Number of
Shares or
Units of
Stock
That Have
Not Vested
(#) Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested
($) Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)(1) Equity
Incentive Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($) — — — — 171,650 (2) 1,177,519 616,859 (2) 4,231,653 — — — — 120,934 (3) 829,607 339,601 (3) 2,329,663 — — — — 88,118 (4) 604,489 149,520 (4) 1,025,707 20,831 — 3.99 6/15/2019 48,768 (5) 334,548 45,092 (5) 309,331 Option Awards Stock Awards Name Number of Securities Underlying Unexercised Options (#)
ExercisableNumber of Securities Underlying Unexercised Options (#)
UnexercisableOption Exercise Price
($)Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested
($)Andrew Rees 133,334 66,666 6.98 06/01/27 294,658 12,343,224 194,588 8,151,291 Anne Mehlman — — — 16,035 671,706 19,709 825,610 Daniel P. Hart — — — 53,054 2,222,432 13,139 550,393 Carrie W. Teffner — — — — — — — threefour RSU grants for: (i) 162,990 RSUs awarded on February 11, 2015 that vest annually in equal installments on January 28, 2016, January 28, 2017 and January 28, 2018 contingent on continued employment; and (ii) 488,969 RSUs that vest contingent on achievement of certain share price levels before the fourth anniversary of Mr. Ribatt's start date, subject to his continued employment; and (iii) 190,880230,000 RSUs awarded on March 8, 201617, 2017 of which 33% of the RSUs vest in three equal annual installments on March 8, 2017,17, 2018, March 8, 201817, 2019 and March 8, 2019 based on continued employment and 67% of the RSUs (up to 200%) based on achievement of performance metrics, of which 41,628 shares were "earned" pursuant to the Compensation Committee certification on February 14, 2017 and will vest in three equal installments on March 1, 2017, March 1, 2018 and March 1, 2019 based on continued employment.(3)Represents the unvested portion of four RSU grants for: (i) 12,868 RSUs awarded on June 9, 2014 that vest annually in three equal installments on June 9, 2015, June 9, 2016 and June 9, 2017 based on continued employment; (ii) 233,026 RSUs that vest contingent on achievement of certain share price levels before the fourth anniversary of Mr. Rees' start date, subject to his continued employment; (iii) 167,464 RSUs awarded on March 1, 2015 of which 43% of the RSUs vest in three equal annual installments on March 1, 2016, March 1, 2017 and March 1, 2018 based on continued employment and up to 57% of the RSUs (up to 200%) based on achievement of performance metrics, of which 24,217 shares were "earned" pursuant to the Compensation Committee certification on February 24, 2016 and will vest in three equal installments on March 1, 2016, March 1, 2017 and March 1, 2018 based on continued employment; and (iv) 159,067 RSUs awarded onMarch 8, 2016 of which 33% of the RSUs vest in three equal annual installments on March 8, 2017, March 8, 2018 and March 8, 201917, 2020 based on continued employment and up to 67% of the RSUs (up to 200%) based on achievement of performance metrics, of which 34,689140,072 shares were "earned"“earned” pursuant to the Compensation Committee certification on February 14, 20179, 2018 and will vest in three equal annual installments on March 1, 2017,17, 2018, March 1, 201817, 2019 and March 1, 2019 based on continued employment.(4)Represents the unvested portion of three RSU grants for: (i) 80,148 RSUs awarded on December 16, 2015 that vest annually in equal installments on December 16, 2016, December 16, 2017 and December 16, 201817, 2020 based on continued employment; (ii) 80,148 RSUs that vest based on achievement of certain share price levels before the fourth anniversary of Ms. Teffner's start date, subject to her continued employment; and (iii) 104,058155,917 RSUs awarded on March 1, 20168, 2018, of which 33% of the RSUs vest in three equal annual installments on March 1, 2017,8, 2019, March 1, 20188, 2020, and March 1, 20198, 2021 based on continued employment and up to 67% of the RSUs (up to 200%) based on achievement of performance metrics, of which 22,578134,760 shares were "earned"“earned” pursuant to the Compensation Committee certification on February 14, 2017March 7, 2019 and will vest in three equal installments on March 1, 2017, March 1, 2018 and March 1, 2019 based on continued employment.(5)Represents the unvested portion of three RSU grants for: (i) 54,348 RSUs awarded on January 2, 2014 of which one-half of the RSUs vest in three equal annual installments on January 2, 2015, January 2, 2016 and January 2, 2017 based on continued employment and up to one-half of the RSUs based on achievement of performance metrics of which 10,702 shares were "earned" and became vested in two equal annual installments on March 1, 2015 and March 1, 2016; (ii) 50,000 RSUs awarded on March 1, 2015 of which 35% of the RSUs vest in three equal annual installments on March 1, 2016,8, 2019, March 1, 20178, 2020, and March 1, 2018 based on continued employment and 65% of the RSUs (up to 200%) based on achievement of performance metrics of which 8,245 shares were "earned" pursuant to the Compensation Committee certification on February 24, 2016 and will vest in three equal installments on March 1, 2016, March 1, 2017 and March 1, 20188, 2021 based on continued employment; and (iii) 67,638134,410 RSUs awarded on March 1, 20167, 2019, of which 33% of the RSUs vest in three equal annual installments on March 1, 2017,7, 2020, March 1, 20187, 2021, and March 1, 20197, 2022 based on continued employment and up to 67% of the RSUs (up to 200%) based on achievement of performance metrics, of which 14,676109,638 shares were "earned"“earned” pursuant to the Compensation Committee certification on February 14,13, 2020 and will vest in three equal annual installments on March 7, 2020, March 7, 2021, and March 7, 2022 based on continued employment. Additionally, 209,067 RSUs awarded on June 11, 2018, of which 100% of the target number of shares would be earned if the closing price of our common stock during any consecutive 30-day trading period met or exceeded 200% (the “2x Performance Condition”) of $16.74 per share (the “Starting Price”), 50% of the target number of shares would be earned if the closing price of our common stock during any consecutive 30-day trading period met or exceeded 175% (the “1.75x Performance Condition”) of the Starting Price and 25% of the target number of shares would be earned if the closing price of our common stock during any consecutive 30-day trading period met or exceeded 150% (the “1.5 Performance Condition”) of the Starting Price, and once a performance hurdle was met or exceeded, 33% of the “earned” portion of the RSUs would vest immediately, and the remaining 67% will be subject to his continued employment, with 33% vesting one year later and the remaining 33% vesting two years later, but in no case later than the fourth anniversary of the award. On February 7, 2019, the 1.5x Performance Condition was met and 52,267 shares were earned. On November 18, 2019, the 1.75x Performance Condition was met and 52,267 were earned On January 15, 2020, the 2x Performance Condition was met and 104,534 shares were earned.1, 2017,8, 2019, March 1, 20188, 2020 and March 1, 20198, 2021 based on continued employment; and (iii) 19,707 RSUs awarded on March 7, 2019, of which 33% of the RSUs vest in three equal annual installments on March 7, 2020, March 7, 2021 and March 7, 2022 based on continued employment and up to 67% of the RSUs (up to 200%) based on achievement of performance metrics, of which 15,990 shares were “earned” pursuant to the Compensation Committee certification on February 13, 2020 and will vest in three equal annual installments on March 7, 2020, March 7, 2021 and March 7, 2022 based on continued employment.2016.Stock Awards Name Number of Shares Acquired on Vesting
(#)Andrew Rees 197,965 5,177,025 Anne Mehlman 3,090 83,461 Daniel P. Hart 48,129 1,205,447 Carrie W. Teffner — — Option Awards Stock Awards Name Number of
Shares Acquired
on Exercise
(#) Value
Realized on
Exercise
($)(1) Number of
Shares Acquired
on Vesting
(#) Value
Realized on
Vesting
($)(1) — — 54,330 484,080 — — 36,364 339,358 — — 26,716 189,416 50,000 234,500 32,601 308,026 For option awards, the value realized is the difference between the closing price of our common stock on the date of exercise and the exercise price. For stock awards, the value realized is based on the closing price of our common stock on the vesting date.(CIC Plan)(“CIC Plan”)2014.2014, and further amended and restated in September 2018. Under the CIC Plan, if a "change“change in control"control” (as defined below) occurs, and the named executive officer'sofficer’s employment is terminated by us without "cause"“cause” (as defined below) or the named executive officer resigns for "good reason"“good reason” (as defined below) within the two-year period following the change in control (a so-called "double-trigger"“double-trigger”), the named executive officer will be entitled to the following payments and benefits:officer'sofficer would have received for the fiscal year of such named executive officer’s termination of employment but for the fact that such termination occurred, as determined by the Compensation Committee, multiplied by a fraction the numerator of which is the number of days such named executive officer was employed by the Company during such fiscal year and the denominator of which is 365, and (B) such named executive officer’s severance payment percentage times the sum of (i) the named executive officer'sofficer’s annual base salary in effect on the date immediately prior to the change in control and (ii) the greater of (x) the named executive officer'sofficer’s target annual bonus for the year in which the change in control occurs and (y) the average annual bonus payments actually made to the named executive officer in the three years prior to the year in which the change in control occurs;
••
••officer;officer.•if the named executive officer is age 55 or over, payment by usemployerforegoing benefits is conditioned on the participant executing a release of claims in favor of us following termination. The CIC Plan also contains certain confidentiality, non-solicitation and employee premiums for continued health coverage for the named executive officer and his/her covered dependents until the named executive officer becomes eligible to enroll in Medicare Part A or until the named executive officer becomes eligible for coverage under a subsequent employer's health plan; and•if the named executive officer is under age 55, payment by us of the employer and employee premiums for continued health coverage for the named executive officer and his/her covered dependents for the lesser of: (i)18 months following cessation of employment or (ii) the period for which the named executive officer is eligible for and elects such continued health coverage."change“change in control"control” in the CIC Plan is consistent with the definition in our stockholder-approved equity plan. "Change“Change in control"control” is generally defined in the CIC Plan to mean any one of the following: (i) any person becomes the beneficial owner of 35% or more of our common stock or voting securities, with certain exceptions; (ii) incumbent directors (includingor consolidation, or sale or other disposition of all or substantially all of the assets of the Company, unless (a) after the transaction, the beneficial owners of our common stock and voting securities immediately prior to the transaction retain more than 50% of such common stock and voting securities of the entity resulting from the transaction, (b) no person immediately after the merger beneficially owns 35% or more of the voting power of the entity resulting from the transaction (except to the extent that such ownership existed with respect to the Company prior to the transaction), and (c) at least a majority of the members of the board of directors of the entity resulting from the transaction shall have been members of the incumbent board at the time of the execution of the initial agreement, or of the action of the Board, providing for such transaction; or (iv) stockholder approval of a complete liquidation or dissolution of the Company."Cause"participant'sparticipant’s conviction, or guilty or no contest plea, to any felony; (ii) any act of fraud by the participant related to or connected with the participant'sparticipant’s employment by the Company; (iii) the participant'sparticipant’s material breach of his or her fiduciary duty to the Company; (iv) the participant'sparticipant’s gross negligence or gross misconduct in the performance of duties reasonably assigned to the participant which causes material harm to theCompany'sCompany’s codes of conduct or other rules or policies of the Company; or (vi) any entry of any court order or other ruling that prevents the participant from performing his or her material duties and responsibilities."Reason"reason” is defined in the CIC Plan to mean the existence of any one or more of the following conditions without the written consent of the participant: (i) the Company'sCompany’s assignment to the participant of any duties inconsistent in any material negative respect with the participant'sparticipant’s authority, duties or responsibilities immediately prior to the change in control or any other action by the Company that results in a material diminution in such authority, duties or responsibilities; (ii) a material reduction in the participant'sparticipant’s base salary, as in effect immediately prior to the change in control; (iii) a material reduction in the participant'sparticipant’s target bonus and/or target long-term incentive opportunity, as in effect immediately prior to the change in control; (iv) relocation of the participant'sparticipant’s office more than 50 miles from the Company'sCompany’s principal office immediately prior to the change in control; or (v) a material breach by the Company of the CIC Plan. To resign for "good“good reason,"” a participant must provide certain notice to the Company, and the Company must fail to remedy the condition believed to constitute "good reason"“good reason” within a specified time period.Mr. Ribatt, and Ms. Teffner Offer LettersLetterlettersletter for Mr. Ribatt, Mr. Rees and Ms. Teffner provideprovides that if such personhe is terminated by us without "cause"“cause” (as defined in his or her respective offer letter) or if he or she resigns for "good reason"“good reason” (as defined in his or her respective offer letter), he or she will be entitled to receive a lump sum payment equal to his or her then-current base salary plus his or her then-current target annual bonus. In addition, if such personhe is terminated by us without cause, resigns for good reason, or as a result of his or her death or disability (each a "Qualifying Termination"“Qualifying Termination”), a pro-rated percentage of the performance-based RSUs awarded to him or her pursuant to the offer letters will remain outstanding and eligible to vest as follows:•if a Qualifying Termination occurs prior to the fourth anniversary of his or her respective start date and prior to satisfaction of the Tier I Performance Condition or 2x Performance Condition, as applicable (each as defined in his or her respective offer letter), then a pro-rated percentage of such RSU award will remain outstanding and eligible to vest in full if and when the performance condition is satisfied prior to the fourth anniversary of his or her respective start date, with such pro-rated percentage equal to the number of full months to have elapsed between his or her start date and the date of such Qualifying Termination divided by 48; and•if a Qualifying Termination occurs prior to the fourth anniversary of his or her respective start date and prior to satisfaction of the Tier I Performance Condition or 2x Performance Condition, as applicable, then a pro-rated percentage of the RSU award will remain outstanding and eligible to vest on the fourth anniversary of his or her respective start date at a 20% level (subject to further proration) if the Tier III Performance Condition or 1.5x Performance Condition, as applicable (each as defined in his or her respective offer letter) is satisfied or at a 40% level (subject to further proration) if the Tier II Performance Condition or 1.75x Performance Condition, as applicable (each as defined in his or her respective offer letter) is satisfied, in each case, at any time during the three-month period ending on the fourth anniversary of his or her respective start date, with such pro-rated percentage equal to the number of full months to have elapsed between his or her respective start date and the date of such Qualifying Termination divided by 48.Upon a Qualifying Termination: (i) his or her outstanding time-based equity awards that would otherwise have vested in the calendar year of the Qualifying Termination (and any performance-based equity awards for which the performance metrics have already been satisfied prior to the Qualifying Termination, other than the performance-based RSU award granted in connection with their respectiveoffer letters)Termination) will vest based on the number of full months that have elapsed since the later of (A) the grant date of the applicable equity award and (B) the most recent vesting date of such equity award divided by 12; and (ii) a pro-rated percentage of yourhis performance-based equity awards (other than the performance-based RSU award granted in connection with their respective offer letters) for which the performance period remains open at the time of the Qualifying Termination will remain outstanding and eligible to vest if the applicable performance metrics are satisfied for such performance-based equity awards by the end of the applicable performance period, with such percentage equal to the number of full months that have elapsed between the grant date of such award and the Qualifying Termination divided by 24 months.total number of months inExecutive Vice President Level conditioned upon her signing the applicable performance period (or 24 months with respect to Mr. Rees).Hart'sHart’s employment agreement provides certain benefits in the event of certain terminations of employment. Mr. Hart'sHart’s employment agreement was modified by the CIC Plan to provide that the terms of the CIC Plan supersede and replace the terms of the employment agreement with respect to a change in control. Mr. Hart'sHart’s employment agreement provides that if Mr. Hart is terminated by us involuntarily without "cause"“cause” (as defined in his employment agreement) or if he resigns for "good reason"“good reason” (as defined in his employment agreement), he will receive: (i) a lump sum payment equal to one year of his base pay as2016. Involuntary Termination without
Cause or Resignation for
Good Reason Involuntary Termination without Cause or Resignation
for Good Reason within Two Years Following
a Change in Control Name Severance
($) Acceleration
of Equity
Awards
($)(1) Total
($) Severance
($) Bonus
($) Health
Benefits
($) Acceleration
of Equity
Awards
($)(1) Total
($) 2,042,500 — 2,042,500 2,375,000 2,731,250 20,186 5,409,172 10,535,608
1,400,000
—
1,400,000
1,750,000
1,750,000
20,186
3,159,270
6,679,457
1,202,500
—
1,202,500
1,625,000
1,381,250
20,186
1,630,196
4,656,632
1,361,090
282,989
1,644,079
1,047,374
785,531
88,596
643,880
2,565,381 Involuntary Termination without Cause or Resignation for Good Reason Involuntary Termination without Cause or Resignation for Good Reason within Two Years Following a Change in Control Name Total
($)Severance
($)Bonus
($)Total
($)Andrew Rees 2,090,000 — 2,090,000 5,225,000 1,831,980 20,494,515 27,551,495 Anne Mehlman 550,000 — 550,000 1,925,000 662,888 1,497,316 4,085,204 Daniel P. Hart 1,361,586 1,803,239 3,164,825 1,848,355 631,174 2,445,371 4,924,900 $6.86$41.89 per share, which was the closing price of our common stock on December 30, 2016,31, 2019, the last trading day of 2016,2019, as reported on the NASDAQNasdaq Global Select Market.Contentsthe annual total compensation of our Chief Executive Officer to our estimated median employee for 2019 was approximately 373 to
REPORT OF THE AUDIT COMMITTEECompany'sCompany’s audited financial statements for the fiscal year ended December 31, 20162019 with our management and Deloitte & Touche LLP, our independent registered public accounting firm. Management is responsible for the preparation, presentation and integrity of the financial statements, accounting and financial reporting principles and internal control over financial reporting. Deloitte & Touche LLP is responsible for performing an independent audit of the financial statements in accordance with generally accepted auditing standards and for expressing opinions on the conformity of the financial statements with accounting principles generally accepted in the United States.Statement on Auditing Standards No. 61, as amended,Communication With Audit Committees, andthe applicable requirements of the Public Company Accounting Oversight Board ("PCAOB"(“PCAOB”) AS Section 1301,Communications with Audit Committees,and the SEC, and has received the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements of the PCAOB regarding the independent auditor'sauditor’s communications with the Audit Committee concerning Deloitte & Touche LLP’s independence. The Audit Committee has also discussed with Deloitte & Touche LLP their independence.20162019 for filing with the SEC.THE AUDIT COMMITTEE (Chairperson)Ronald L. FraschDouglas J. TreffPROPOSAL 2—PROPOSAL 2 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRM2017.2020. Deloitte & Touche LLP has served as our independent public accounting firm since 2005. We are not required to submit this appointment to the stockholders for approval, but the Board believes it is desirable as a matter of policy. We expect that a representative of Deloitte & Touche LLP will attend the Annual Meeting online and will have the opportunity to make any statements if he or she so desires and to respond to appropriate stockholder questions.20162019 and 20152018 by Deloitte & Touche LLP and its affiliates. The Audit Committee is required to pre-approve all audit and non-audit services provided by Deloitte & Touche LLP. All of the services provided by, and fees paid to, Deloitte & Touche LLP during 20162019 and 20152018 were pre-approved by the Audit Committee. 2016 2015 $ 2,830,450 $ 3,322,815 501,025 525,950 198,200 14,567 — — $ 3,529,675 $ 3,863,332 2019 2018 $ 2,003,013 $ 2,229,765 551,015 403,900 145,920 188,300 Total fees $ 2,699,948 $ 2,821,965 filings;filings and (ii) accounting consultation related to the audit; and (iii) statutory audit requirements in foreign countries.audits.THE BOARD RECOMMENDS A VOTE "FOR" THE RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2017.PROPOSAL 3—ADVISORYTHE BOARD RECOMMENDS A VOTE TO APPROVE“FOR” THE COMPENSATIONRATIFICATION OF DELOITTE & TOUCHE LLP AS OUR NAMED EXECUTIVE OFFICERSINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2020."Say-on-Pay"“Say-on-Pay” proposal, gives stockholders the opportunity to approve or reject our executive pay program. Accordingly, we ask our stockholders to vote "FOR"“FOR” the following resolution at the Annual Meeting:"ourthe Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables and any other related disclosure in this proxy statement.""Compensation“Compensation Discussion and Analysis,"” the primary objective of our executive compensation program is to create long-term value for our stockholders by attracting and retaining talented executives, holding our executives accountable to stockholders, motivating our executives to achieve superior financial and business objectives and aligning the interests of our executives with those of our stockholders. We believe our executive compensation strikes the appropriate balance between utilizing responsible, measured pay practices and effectively incentivizing our named executive officers to dedicate themselves fully to value creation for our stockholders. Please see "Compensation“Compensation Discussion and Analysis"Analysis” section above for an explanation of our executive compensation."Say-on-Pay"“Say-on-Pay” proposal allows our stockholders to express their view regarding the decisions of the Compensation Committee on the 20162019 compensation of our named executive officers. Your advisory vote will serve as a tool to guide the Board and the Compensation Committee in continuing to improve the alignment of our executive compensation programs with the objective of creating long-term value for our stockholders. See Proposal 4 below regarding the advisory vote on the frequency of future advisory votes to approve our named executive officer compensation.THE BOARD RECOMMENDS A VOTE "FOR" TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.PROPOSAL 4—ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERSOFFICERS.Stockholders have an opportunity to indicate how frequently we should seek an advisory votenamedhistorical levels of equity compensation utilization, which compare favorably to industry peers and standards.at least every 6 years. Our stockholders last voted onhave a financial interest in this matter in 2011. Stockholders may indicate whetherproposal because they would prefer an advisory vote on executive compensation once every one, two or three years or they may abstain from voting.Our Board has discussed and carefully consideredbe eligible to receive awards under the alternatives regardingPlan.frequency of say-on-pay proposals in an effort to determine the approachPlanwould best serve the Company and our stockholders. Our Board has considered several factors supporting an annual vote, including:•An annual say-on-pay vote isare consistent with past practice, as we have been conducting an annual vote since 2011 and have received over 98% support each year we have conducted a say-on-pay vote.•An annual say-on-pay vote provides us with immediate and direct input from our stockholders on our compensation principles and practices as disclosed in the proxy statement every year.•An annual advisory vote provides frequent communication from our stockholders, which is consistent with our efforts to seek input from our stockholders regarding corporate governance and our compensation philosophy.•The lack of an annual say-on-pay advisory vote might make it more difficult for us to understand the outcome of a stockholder vote as to whether the stockholder vote pertains to the compensation disclosed in the current year proxy statement or pay practices relating to previous years. As a result, a frequency other than annual might make it more difficult for the Board to understand and respond appropriately to the message being communicated by our stockholders.After such consideration, our Board believes that it is most appropriate to continue to conduct an advisory vote on executive compensation every year and, therefore, our Board recommends that you vote for an annual advisory vote on executive compensation.The option of every year, every two years or every three years that receives the highest number of votes cast by stockholders will be deemed to be the frequency recommended by stockholders and will be taken into consideration by the Board when determining the frequency for the advisory vote on executive compensation. This vote is advisory and, therefore, not binding, and the Board may decide in the future that it is in the best interests of our stockholders and sound corporate governance practices, including the Company to hold an advisory vote on executive compensation more or less frequently than the option approved by our stockholders.THE BOARD RECOMMENDS A VOTE FOR A FREQUENCY PERIOD OF "EVERY YEAR" FOR FUTURE ADVISORY VOTES TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.No recycling of shares or “liberal share counting” practices Shares tendered to us or retained by us in the exercise or settlement of an award or for tax withholding in connection with the exercise or settlement of an award may not become available again for issuance under the Plan. No automatic share replenishment or “evergreen” provision There is no evergreen feature pursuant to which the shares authorized for issuance under the Plan can be automatically replenished. Double-trigger change in control vesting Awards assumed by a successor company in connection with a change in control will not automatically vest and pay out solely as a result of the change in control. No liberal change in control definition Change in control benefits are triggered only by the occurrence, rather than stockholder approval, of a merger or other change in control event. No discounted stock options or SARs All stock options and SARs must be issued with an exercise or grant price at or above fair market value. No repricing or cash buyouts without stockholder approval Repricing or cash buyouts of underwater stock options and SARs is prohibited without prior stockholder approval. Minimum vesting The aggregate number of shares that may be issued pursuant to awards that contain no restrictions or restrictions based solely on continuous employment or service over less than one year may not exceed 5% of the aggregate maximum number of shares authorized for issuance under the Plan, except in limited circumstances after the time of grant. Awards subject to clawback Awards under the Plan are subject to recoupment as provided in our Recovery of Executive Compensation Policy and any clawback or recoupment policy adopted by us pursuant to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. 10-year term for stock options and SARs Stock option and SARs have a maximum term of 10 years. No dividends or dividend equivalents paid on unvested stock awards No dividends or dividend equivalents accrue on stock options or SARs and no dividends or dividend equivalents are paid on unvested stock awards. Annual limit on employee awards The Plan establishes a maximum number of shares subject to awards that may be granted to any individual employee in any calendar year. PROPOSAL 5—VOTE TO APPROVE THE AMENDMENT AND RESTATEMENT OF THE 2008 CASH INCENTIVE PLANAnnual limit on non-employee director compensation The Plan establishes a maximum limit on the aggregated amount of cash and equity compensation that may be paid to a non-employee director in any calendar year. IntroductionBoard directed thatPlan authorizes the Amended and Restated Crocs, Inc. 2008 Cash Incentiveissuance of an additional 3,835,920 shares. If the Plan is approved, the number of shares of our common stock authorized for grant under the Plan will be submittedequal to the stockholderssum of up to (i) the number of shares authorized under the Plan plus (ii) the number of shares remaining available for approval sogrant under the 2015 Plan as of the effective date of the Plan and (iii) the number of shares subject to awards granted under the 2015 Plan that paymentswere outstanding as of the effective date of the Plan and subsequently expire, terminate or are otherwise surrendered, cancelled or forfeited. As of March 31, 2020, we had the following awards outstanding under such plan can qualifyour equity compensation plans, which consist only of the 2015 Plan:295,000 Weighted-average exercise price of outstanding options $10.03 Weighted-average remaining contractual life of outstanding options 5.28 years 1,770,939 Total shares of common stock outstanding 67,375,060 1,364,080 deductibilitythe unsettled award.federal income tax purposes.In March 2017,issuance under the Board, upon recommendation byPlan, the Compensation Committee approved and adopted an amendmentthe Board considered the number of outstanding equity awards and restatementshares available for grant under the 2015 Plan, our historical granting practices and burn rate, and the level of potential dilution that will result from adoption of the 2008 Cash Incentive Plan (the existingPlan.2017 2018 2019 Stock options granted 200,000 — — RSU/restricted stock awards granted 2,469,000 1,417,000 829,000 Weighted-average (basic) common stock outstanding 72,255,000 68,421,000 70,357,000 Annual equity plan utilization rate (“burn rate”) 3.7 % 2.1 % 1.2 % is referred to as the "Original Plan" and the plan as proposednumber of shares subject to outstanding equity awards plus the number of the shares available for grant under the 2015 Plan and the new shares to be amendedauthorized under the Plan (an aggregate of approximately 7.3 million shares), represented approximately 10.8% of our outstanding common stock. We believe our three-year average annual burn rate and level of potential dilution assuming the Plan is referredapproved by stockholders compare favorably to asour industry peers and standards."Amended Plan"),number of participants in the Plan, the price per share of our common stock, any changes to be effective June 6, 2017our compensation strategy, changes in business practices or industry standards, the compensation practices of our competitors or changes in compensation practices in the market generally, and subjectthe methodology used to stockholder approval, to governestablish the equity award and paymentmix.cash incentive awards to certain executive officersa share of our common stock on the Nasdaq Global Select Market on April 13, 2020 was $20.67 per share.Company.purposecomplete text of the Amended Plan is to obtain shareholder approval to permit the payment of cash incentive awards that may qualify as "performance-based compensation" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended ("Section 162(m)"); however, there can be no guarantee that amounts payable under the Amended Plan will be treated as qualified performance-based compensation under Section 162(m).The Board believes that it is in the best interests of the Company and its stockholders for the Company to have a stockholder-approved plan under which cash incentive awards granted to its executives could be designed in a manner intended to qualify as "performance-based compensation" within the meaning of Section 162(m). Accordingly, the Amended Plan is being submitted for approval by stockholders. In general, under Section 162(m), in order for the Company to be able to deduct compensation in excess of $1,000,000 paid in any one year to our chief executive officer or any of our three other most highly compensated executive officers (other than our chief financial officer), such compensation must qualify as "performance-based." One of the requirements of "performance-based" compensation for purposes of Section 162(m) is that the material terms of the performance goals under which compensation may be paid be disclosed to and approved by the Company's stockholders at least once every five years. Stockholders last approved the material terms of the Original Plan at the 2012 annual meeting of stockholders. For purposes of Section 162(m), the material terms include (i) the individuals eligible to receive compensation; (ii) a description of the business criteria on which the performance goal is based; and (iii) the maximum amount of compensation that can be paid to an individual under the performance goal. Each of these aspects is discussed below, and stockholder approval of this Proposal 5 is intended to constitute reapproval of each of these aspects of the Amended Plan for purposes of the stockholder approval requirements of Section 162(m).Key Changes from the Original PlanIf approved, the Amended Plan would make the following changes to the Original Plan, as described in more detail under "Description of the Amended Plan" below: (i) include changes to the performance measures and adjustments that can be made to established performance goals in a manner that is intended to satisfy the requirements of Section 162(m) and that is consistent with our 2015 Equity Incentive Plan; and (ii) subject certain awards under the Amended Plan to the Company's Executive Compensation Recovery Policy.Description of the Amended PlanThe significant features of the Amended Plan are described below. A copy of the Amended Plan is attached to this proxy statement as this discussion is qualified in its entirety by reference to the full text of the Amended Plan.TableContentsthe PlanOurconsisting exclusivelywhich is composed of outsideat least two independent directors will administerwho are also “non-employee” directors for purposes of Section 16 of the Amended Plan.Exchange Act. The Compensation Committee has the authority to establish, amend and waive rules relating to the Plan and to determine the identity of participants, the timing and amount of any awards and other terms and conditions of awards. The Compensation Committee may delegate to one or more of our officers the authority to grant awards under the Plan within specifically prescribed limits, including the limitation that no such officer will have the authority to grant awards upon such terms, not inconsistent with the terms of the Amended Plan, as it considers appropriate. In addition, the Compensation Committee will have complete authority to interpret all provisions of the Amended Plan, to adopt, amend, and rescind rules and regulations pertaining to the administration of the Amended Plan, and to make all other determinations necessaryemployees who are executive officers or advisable for the administration of the Amended Plan, and to reduce or eliminate, in its discretion, the amount of any award otherwise payable under the Amended Plan.who currently number approximately 5,000, will beand those of our affiliates are eligible to participate under the Amended Plan. Our Compensation Committee determines which employees will be participants under the Amended Plan. However, the criteria for participation may change in subsequent years. Other annual or short-term bonus arrangements will be made available to employees who are not considered "covered employees" for purposes of Section 162(m).Performance MeasuresParticipants will receive awards under the AmendedPlan. Awards other than incentive stock options (see “Types of Awards” below) also may be awarded to individuals who are not employees but who provide services to us or our affiliates in the capacity of a non-employee director or an independent contractor. As of March 31, 2020, approximately 4,200 employees and nine non-employee directors were eligible to receive awards under the Plan.whose payoutis 3,835,920, plus up to (i) 1,364,080 shares of our common stock not issued or subject to outstanding awards under the 2015 Plan as of the effective date of the Plan and (ii) 2,065,939 shares of our common stock subject to outstanding awards under the 2015 Plan as of the effective date of the Plan that subsequently cease to be subject to such awards (other than by reason of exercise or settlement of the awards in vested or nonforfeitable shares). The number of shares authorized for issuance under the Plan is subject to adjustment for future stock splits, stock dividends and similar changes in our capitalization. Subject to adjustment as provided in the Plan, (i) the maximum number of shares that may be issued pursuant to incentive stock options under the Plan is 5,200,000 shares and (ii) the maximum number of shares that may be granted to any individual in any calendar year may not exceed an aggregate of 1,000,000 shares for stock options and/or SARs and an additional aggregate of 1,000,000 shares for restricted stock, RSU or performance unit awards.contingentcounted as 1.79 shares for each one Share subject to the forfeited award.degreeamount or percentage of attainmenttotal appreciation that the Compensation Committee may determine at the time the right is granted. The recipient receives all or a portion of the amount by which the fair market value of a specified number of shares, as of the date the SAR is exercised, exceeds a base price specified by the Compensation Committee at the time the right is granted. The base price specified by the Compensation Committee must be at least 100% of the fair market value (determined as described above) of the specified number of shares of our common stock to which the right relates determined as of the date the SAR is granted. A SAR may be granted in connection with a previously or contemporaneously granted option, or independent of any option. Payments with respect to SARs may be paid, as determined by the Compensation Committee, in cash, shares of our common stock, or a combination of cash and shares.overduring a specified term. Payments with respect to performance units may be paid, as determined by the applicableCompensation Committee, in cash, shares of our common stock, or a combination of cash and shares. Dividends and dividend equivalents may be accrued on unvested performance period. units but may not be paid until the award vests.arefor any award of performance-based compensation must be set by ourthe Compensation Committee at the start of each performance period and aremay, without limitation, be based on one or a combination of two or more of the following performance criteria: net sales; net earnings; earnings before income taxes; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per share (basic or diluted); profitability as measured by return ratios (including return on assets, return on equity, return on investment and return on net sales) or by the degree to which any of the foregoing earnings measures exceed a percentage of net sales; cash flow; market share; margins (including one or more of gross, operating and net earnings margins); stock price; total stockholder return; asset quality; non-performing assets; revenue growth; operating income; pre- or after-tax income; cash flow per share; operating assets; improvement in or attainment of expense levels or cost savings; economic value added; and improvement in or attainment of working capital levels. Any performance measure utilized may be expressed in absolute amounts, on a per share basis, as a growth rate or change from preceding performance periods, or as a comparison to the performance of specified companies or other external measures, and may relate to one or any combination of corporate, group, unit, division, affiliate or individual performance.Plan Category Number of Securities
Remaining Available
for Future
Issuance Under
Plans, Excluding
Securities Available
in First Column2,003,022 $ 10.45 2,359,145 Equity compensation plans not approved by stockholders — — — Total 2,003,022 $ 10.45 2,359,145 direct to consumer comparative sales; product delivery targets; and improvement in or attainment of working capital levels.Any performance measure utilized may be expressed in absolute amounts, on a per share basis, as a growth rate or change from preceding performance periods, as a percentage of another criterion, or as a comparison to the performance of specified companies or other external measures, and may relate to corporate, group, unit, division, affiliate or individual performance.The Compensation Committee may provide in any award that any evaluation of performance may include or exclude any of the following events that occurs during a performance period: asset write-downs; litigation or claim judgments or settlements; the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results; any reorganization and restructuring programs; extraordinary, unusual and/or non-recurring items, that in all of the foregoing the Company identifies in its audited financial statements, including notes to the financial statements, or the Management's Discussion and Analysis section of the Company's periodic reports; certain extraordinary nonrecurring items; acquisitions or divestitures; foreign exchange gains and losses; gains and losses on asset sales; and impairments. To the extent such inclusions or exclusions affect awards to covered employees, they will be established and administered in a manner that satisfies the requirements for "performance-based compensation" within the meaning of Section 162(m).Performance PeriodsA performance period is the measure of time specified by our compensation committee over which the degree of attainment of the specified performance measures will be measured.Payment of Awards; Maximum Amount of AwardsAll awards under the Amended Plan for a performance period will be paid in cash following the end of such performance period and our Compensation Committee's certification of the degree to which applicable performance measures were attained. The maximum individual award payment that can be made under the Amended Plan may not exceed $8 million for an annual performance period or, for performance periods longer or shorter in duration, an amount equal to $2.0 million multiplied by the number of quarters in the performance period.RecoupmentWith respect to participants who are subject to the Company's Executive Compensation Recovery Policy (the "Policy"), all amounts earned under the Amended Plan are subject to the Policy. In addition, awards shall be subject to the requirements of (a) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations thereunder, (b) similar rules under the laws of any other jurisdiction, (c) any compensation recovery or clawback policies adopted by the Company to implement any such requirements or (d) any other compensation recovery or clawback policies as may be adopted from time to time by the Company, all to the extent determined by the Committee in its discretion to be applicable to a participant.Termination of EmploymentExcept as otherwise provided below, no award for a performance period will be paid to a participant who is not actively employed by us at the end of the performance period. If a participant's employment ends during a performance period, our compensation committee has the discretion to approve payment to the participant, or his or her beneficiaries, of a pro-rata portion of the award payment the participant would have received but for the fact that the participant's employment ended.Amendment and TerminationOur Compensation Committee or our Board may amend, suspend or terminate the Amended Plan from time to time. An amendment will be subject to the approval of our stockholders only if such approval is necessary to maintain the Amended Plan in compliance with Section 162(m) or other applicable laws and regulations.Federal Income Tax ConsequencesThe following is a brief summary of the U.S. federal income tax consequences of the Amended Plan generally applicable to us and to participants in the Amended Plan who are subject to U.S. federal taxes. The summary is based on the U.S. Internal Revenue Code of 1986, as amended, applicable Treasury Regulations and administrative and judicial interpretations thereof, each as in effect on the date of this proxy statement and is, therefore, subject to future changes in the law, possibly with retroactive effect. The summary is general in nature and does not purport to be legal or tax advice. Furthermore, the summary does not address issues relating to any U.S. gift or estate tax consequences or the consequences of any state, local or foreign tax laws.A participant in the Amended Plan will be taxed at ordinary income rates on an award in the year in which a cash payment under the award, if any, is received, unless such cash is subject to deferral undera Company plan or a substantial risk of forfeiture. If a participant elects to defer a portion of the bonus, the participant may be entitled to defer the recognition of income. Generally, and subject to Section 162(m), the Company will receive a U.S. federal income tax deduction on the amount of income recognized by the participants at the same time such income is recognized by participants. Please note that the rules and regulations promulgated under Section 162(m) are complicated and subject to change from time to time, sometimes with retroactive effect. As such, and as noted above, there can be no guarantee that amounts payable under the Amended Plan will be treated as qualified performance-based compensation under Section 162(m) and/or deductible by the Company.We intend that awards granted under the Amended Plan comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code, but make no representation or warranty to that effect.We are authorized to deduct or withhold from any payment due under the Amended Plan, or require a participant to remit to us, the amount of any withholding taxes due in respect of the payment and to take such other action as may be necessary to satisfy all obligations for the payment of applicable withholding taxes. We are not required to settle an award under the Amended Plan until all tax withholding obligations are satisfied.New Plan BenefitsThe specific individuals who will be granted awards under the Amended Plan and the type and amount of any such awards will be determined by the Compensation Committee, subject to limits on the maximum amounts that may be awarded to any individual, as described above. Accordingly, future awards to be received by or allocated to particular individuals under the Amended Plan are not presently determinable.The approval of the Amended Plan requires the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the proposal.THE BOARD RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2008 CASH INCENTIVE PLANOTHER MATTERSWe do not intend to bring before the Annual Meeting any matters other than the proposals specifically described above, and we know of no matters other than those to come before the Annual Meeting. If any other matters properly come before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote such proxy in accordance with the recommendation of our management on such matters, including any matters dealing with the conduct of the Annual Meeting.STOCKHOLDER PROPOSALS AND NOMINATIONS FOR 2018 ANNUAL MEETINGAny proposal of a stockholder intended to be included in our proxy statement for the 2018 annual meeting of stockholders pursuant to SEC Rule 14a-8, must be received by us no later than December 26, 2017 unless the date of our 2018 annual meeting is more than 30 days before or after June 6, 2018, in which case the proposal must be received a reasonable time before we begin to print and mail our proxy materials. All proposals should be addressed to the Corporate Secretary, Crocs, Inc., 7477 East Dry Creek Parkway, Niwot, Colorado 80503.In order for a stockholder to nominate a candidate for director for election or to bring other business before the 2018 annual meeting, we must receive timely notice of the nomination or business in writing by the close of business not later than March 8, 2018 and not earlier than February 6, 2018. However, in the event that the 2018 annual meeting is called for a date that is not within 30 days before or 60 days after June 6, 2018, notice by the stockholder to be timely must be delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the date on which public announcement of the date of the 2018 annual meeting is made.CROCS, INC.2008 CASH INCENTIVE PLAN(As Amended and Restated Effective June 6, 2017)1.Purpose. The purpose of the Crocs, Inc. 2008 Cash Incentive Plan (the "Plan") is to advance the interests of Crocs, Inc. ("Crocs") and its stockholders by promoting Crocs's pay for performance philosophy, attracting and retaining key employees of Crocs and its subsidiaries, and stimulating the efforts of such employees toward the continued success and growth of Crocs's business. Amounts paid pursuant to the Plan are intended to qualify as "performance-based compensation" within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.2.Definitions. When the following terms are used with capital letters in the Plan, they will have the meanings indicated:(a) "Award" means an incentive award which, subject to the terms and conditions prescribed by the Committee, entitles a Participant to receive a cash payment from the Company in accordance with Section 3.(b) "Board" means the Board of Directors of Crocs.(c) "Code" means the Internal Revenue Code of 1986, as amended.(d) "Committee" means the Compensation Committee of the Board or such other committee as may be designated by the Board to administer the Plan.(e) "Company" means Crocs and its subsidiaries.(f) "Covered Officer" means any Participant whose compensation, in the Performance Period for which an the incentive under the Plan is calculated, is subject to the compensation expense deduction limitations set forth in Section 162(m) of the Code.(g) "Eligible Employee" means any employee of the Company.(h) "Participant" means an Eligible Employee designated by the Committee to participate in the Plan as provided in Section 3.1. Designation by the Committee as a Participant for a specific Performance Period or series of Performance Periods does not confer on the Participant the right to participate in the Plan for any other Performance Periods.(i) "Performance-Based Compensation" means an Award that is intended to constitute "performance-based compensation" within the meaning of Section 162(m)(4)(C) of the Code and the regulations promulgated thereunder.(j) "Performance Measures" means one or a combination of two or more of the following performance criteria: net sales; net earnings; earnings before income taxes; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per share (basic or diluted); profitability as measured by return ratios (including return on assets, return on equity, return on investment, return on invested capital, and return on net sales) or by the degree to which any of the foregoing earnings measures exceed a percentage of net sales; cash flow; market share; margins (including one or more of gross, operating and net earnings margins); stock price; total stockholder return; asset quality; non-performing assets; revenue growth; operating income; pre- or after-tax income; cash flow per share; operating assets; improvement in or attainment of expense levels or cost savings; economic value added; direct to consumer comparative sales; product delivery targets; and improvement in or attainment of working capital levels. In addition, for any Award to a Participant who is not, and is not likely to be as of the end of the Company's relevant tax year, a Covered Officer or that is not intended to constitute Performance-Based Compensation, Performance Measures may include, alone or in combination with any of the foregoing Performance Measures, any other measure of performance as determined by theCommittee. Any Performance Measure utilized may be expressed in absolute amounts, on a per share basis, as a growth rate or change from preceding Performance Periods,periods, or as a comparison to the performance of specified companies or other external measures, and may relate to one or any combination of corporate, (including such direct and indirect subsidiaries of the Company as the Committee may determine or on such consolidated basis as the Committee may determine), group, unit, division, affiliateAffiliate or individual performance.(k) "Performance Period" means the period of time specified by the Committee over which the degree of attainment of specified Performance Measures will be measured.3.Awards.3.1 Allocation of Awards. Prior to the earlier of (i) 90 days following the commencement of a Performance Period or (ii) the passage of 25 percent of the duration of such Performance Period, the Committee will designate such Eligible Employees as it deems appropriate to participate in the Plan for such Performance Period. The Committee's designation of an Eligible Employee as entitled to participate in the Plan may be for a single Performance Period, or for a fixed or indefinite series of future Performance Periods, in its discretion. A designation for more than one Performance Period shall be subject to the Participant's continued employment by the Company, and may be rescinded at any time as to future Performance Periods by the Committee. Awards may be granted to a Participant in such amounts and on such terms as may be determined by the Committee. At the time an Award is made, the Committee will specify the terms and conditions that will govern the Award, which will include that the Award will be earned only upon, and to the extent that, the applicable Performance measures as described in Section 3.2 are satisfied over the course of the applicable Performance Period. Different terms and conditions may be established by the Committee for different Awards and for different Participants.3.2 Performance Measures. The payment of an Award will be contingent upon the degree of attainment of such Performance Measures over the applicable Performance Period as are specified by the Committee. Performance Measures for any Performance Period will be established by the Committee prior to the earlier of (i) 90 days following the commencement of the Performance Period or (ii) the passage of 25 percent of the duration of the Performance Period.3.3 Adjustments to Performance Measures. The Committee may provide in anyan Award that any evaluation of performance may include or exclude, but are not limited to, any of the following events that occurs during a Performance Period: (i) asset write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (iv) any reorganization and restructuring programs, (v) extraordinary, unusual and/or non-recurring items, that in all of the foregoing the Company identifies in its audited financial statements, including notes to the financial statements, or the Management'sManagement’s Discussion and Analysis section of the Company'sCompany’s periodic reports, (vi) acquisitions or divestitures, (vii) foreign exchange gains and losses, (viii) gains and losses on asset sales, and (ix) impairments. Toextentright to receive the Fair Market Value of one Share upon the achievement of specified levels of one or more Performance Measures in accordance with an Award granted under Section 11.inclusionsShares remains subject to conditions or exclusions affect Awardsrestrictions.Covered Employees, they shall be establishedreceive, in cash and/or Stock as determined by the Committee, the Fair Market Value of one Share, and administeredthe retention, vesting and/or settlement of which is subject to conditions or restrictions.manner“subsidiary corporation” as that satisfiesterm is defined in Section 424(f) of the requirements for "performance-based compensation" within the meaning of Section 162(m),Code or any successor provision thereto.provision.The Committee alsoat any time duringby bequest or afterinheritance, or pursuant to the terms of an Award, acquire the right to exercise an Option or Stock Appreciation Right or to receive cash and/or Shares issuable in satisfaction of an Award in the event of the Participant’s death.Performance Period, in its sole and absolute discretion, modify the Performance Measures applicable toBusiness Combination. “Parent Company” means a Performance Period in addition to any adjustments specified for the Performance Period in accordance with the immediately preceding paragraph if it determines thatcompany or other entity which as a result of changed circumstances, such modification is required to reflecta Business Combination owns the original intent of such Performance Measures. However, no such modification may be made to the extent it would increase the amount of compensation that would otherwise be payable to any Participant who is a Covered OfficerCompany or is likely to be a Covered Officer asall or substantially all of the endCompany’s assets either directly or through one or more subsidiaries.Company's relevant tax year.Participant.3.43. Administration and Indemnification Maximum Amount of Awards.. No Participant who is a Covered Officer shall be entitled to receive an Award payment for any Performance Period that exceeds $8,000,000 for an annual Performance Period or, if the Performance Period is longer or shorter in duration than one year, an amount equal to the product of (i) $2,000,000, multiplied by (ii) the number of quarters in the Performance Period.3.5Administration Authority to Reduce or Eliminate Amount of Award.. The Committee is authorized at any time during or after a Performance Period, in its sole and absolute discretion, to reduce or eliminate the amount of an Award otherwise payable to any Participant for any reason. No reduction in the amount of an Award payable to any Participant shall increase the amount of an Award payable to any other Participant.3.6 Payment of Awards. Following the completion of each Performance Period, the Committee shall certify in writing the degree to which the Performance Measures were attained and the Awards payable to Participants. Each Participant shall receive payment in cash of the Award as soon as practicable following the Committee's determination and certification made pursuant to this Section 3.6, but in no event later than March 15 of the calendar year immediately following the last day of the Performance Period to which such payment relates.4.Administration.4.1 Authority of Committee.subject to the limitations contained in the Plan, to(1) make Awards and toAwards; (2) determine when and to whom Awards will be granted, and the form of each Award, the amount of each Award, and any other terms andor conditions of each Award subjectconsistent with the Plan; (3) prescribe and amend the terms of Agreements evidencing Awards; and (4) determine whether, to the provisions of the Plan. The Committee shall have the authority to interpret the Planwhat extent and any Award made under the Plan, to establish, amend, waive and rescind any rules and regulations relating to the administration of the Plan, and to make allwhat circumstances, Awards may be settled, paid or exercised in cash, Shares or other determinations necessaryAwards, or advisable for the administration of the Plan. The Committee may correct any defect, supply any omissionother property or reconcile any inconsistency in the Plancanceled, forfeited or in any Award in the manner and to the extent it shall deem desirable. The determinations of the Committee in the administration of the Plan, as described herein, shall be final, binding and conclusive, subject to the provisions of the Plan.suspended. A majority of the members of the Committee shall constitute a quorum for any meeting of the Committee.4.2 Indemnification. To the greatest extent permitted by law, (i) no member or former memberCommittee, and acts of a majority of the Committee shall be liable formembers present at any actionmeeting at which a quorum is present or determination taken or madethe acts unanimously approved in good faith with respect to the Plan or any Award made under the Plan, and (ii) the members or formerwriting by all members of the Committee shall be entitledthe acts of the Committee. Notwithstanding the foregoing, the Board shall perform the duties andindemnificationAwards made to Non-Employee Directors.membersperson in connection with or resulting from any claim, action, suit or proceeding to which such person may be a party or in which such person may be involved byactionsgrant shall not be effective until such individual becomes an Employee or Non-Employee Director, as the case may be. The granting of Awards is solely at the discretion of the Committee, except that Incentive Stock Options may only be granted to Employees. References herein to “employed,” “employment” or similar terms (except “Employee”) shall include the providing of services in any capacity, including as a director. Neither the transfer of employment of a Participant between any of the Company or its Affiliates, nor a leave of absence granted to such Participant and determinations.approved by the Committee, nor any change in status from an Employee to a consultant of the Company shall be deemed a termination of employment for purposes of the Plan.5.6. General Terms of Awards.EffectiveAmount of Award. Each Award shall be evidenced by an Agreement setting forth the number of Shares subject to the Award together with such other terms and conditions applicable to the Award (and not inconsistent with the Plan) as determined by the Committee, which may include conditions on vesting, exercisability, lapsing of restrictions or payment that are tied to Performance Measures.Plan.Stock Appreciation Right. Each Stock Appreciation Right may be exercisable in whole or in part on the terms provided in the Agreement. Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Stock Appreciation Right, the maximum term of a Stock Appreciation Right shall be ten years from the Grant Date. No Stock Appreciation Right shall be exercisable at any time after its scheduled expiration. When a Stock Appreciation Right is no longer exercisable, it shall be deemed to have terminated. Upon exercise of a Stock Appreciation Right, payment to the Participant or a Successor or Transferee shall be made at such time or times as shall be provided in the Agreement in the form of cash, Shares or a combination of cash and Shares as determined by the Committee. The Agreement may provide for a limitation upon the amount or percentage of the total appreciation on which payment (whether in cash and/or Shares) may be made in the event of the exercise of a Stock Appreciation Right. as amended and restated effective June [ · ], 2017 shall become effective as of January 1, 2017; provided thaton the Plan as so amended and restateddate it is approved by Crocs'sthe requisite vote of the Company’s stockholders within 12 monthsat the 2020 Annual Meeting of such date.Stockholders or any adjournment thereof (the “Effective Date”).has beenshall be distributed, all Awards have expired or terminated, the Plan is terminated pursuant to Section 8.6.16, or the tenth anniversary of the Effective Date, whichever occurs first (the “Termination DateRight”). Awards made before the Termination Date may be exercised, vested or otherwise effectuated beyond the Termination Date unless limited in the Agreement or otherwise.Terminate Employment.that eligible Employee or to eligible Employees generally.theany right to continue in the employment of the Company orwhichthat the Company or any Affiliate may have to change such person’s compensation, other benefits, job responsibilities, or title, or to terminate the employment of a Participantsuch person with or without cause.7.15. Tax WithholdingTax Withholding.. The Company shall have the right to withhold from any cash paymentspayment under the Plan to a Participant or other person (including a Successor or a Transferee) an amount sufficient to cover any required withholding taxes. The Company shall have the right to require a Participant or other person receiving Shares under the Plan to pay the Company a cash amount sufficient to cover any required withholding taxes before actual receipt of those Shares. In lieu of all or any part of a cash payment from a person receiving Shares under the Plan, the Committee may permit the individual to cover all or any part of the minimum required withholdings through a reduction in the number of Shares delivered or a delivery or tender to the Company of Shares held by the Participant or other person, in each case valued in the same manner as used in computing the withholding taxes under applicable laws; provided, however, that, in the discretion of the Committee, the value of shares so withheld or tendered may exceed the minimum required tax withholding rate, so long as the exercise of such discretion by the Committee would not result in adverse treatment for financial accounting purposes.8.16. Amendment Modification and Termination of the Plan.Plan and Agreements The.terminate, suspendalter or modifyamend any or all Agreements under the Plan. The Company shall submit any amendment of the Plan to its stockholders for approval if the rules of the Nasdaq Global Select Market or other applicable laws or regulations require stockholder approval of such amendment.terms and provisionsexercise or strike price of such Awards) to the extent such other Awards would not otherwise automatically adjust in the equity restructuring; provided, in each case, that with respect to Incentive Stock Options, no such adjustment shall be authorized to the extent that such adjustment would cause such Incentive Stock Options to violate Section 422(b) of the Code or any Awardsuccessor provision. Notwithstanding anything in this Plan to the contrary, (a) any Participant which has not been paid. Amendmentsadjustments made pursuant to this Section 17 to Awards that are subject to approvalconsidered “deferred compensation” within the meaning of Crocs's stockholders only if such approval is necessary to maintain the PlanSection 409A shall be made in compliance with the requirements of162(m)409A. In the event of any other change in corporate capitalization, which may include a merger, consolidation, any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code, its successor provisionsCode), or any other applicable lawpartial or regulation. No Awardcomplete liquidation of the Company to the extent such events do not constitute equity restructurings or business combinations within the meaning of FASB ASC Topic 718, such equitable adjustments described in the foregoing sentence may be granted duringmade as determined to be appropriate and equitable by the Committee to prevent dilution or enlargement of rights. In either case, any suspensionsuch adjustment shall be conclusive and binding for all purposes of the Plan. Unless otherwise determined by the Committee, the number of Shares subject to an Award shall always be a whole number.its termination.9.21. Unfunded PlanUnfunded Plan.. The Plan shall be unfunded and the Company shall not be required to segregate any assets that may at any time be represented by Awards under the Plan. NoNeither the Company, its Affiliates, the Committee, nor the Board of Directors shall be deemed to be a trustee of any amounts to be paid under the Plan nor shall anything contained in the Plan or any action taken pursuant to its provisions create or be construed to create a fiduciary relationship between the Company and/or its Affiliates, and a Participant or Successor or Transferee. To the extent any person acquires a right to receive an Award under the Plan, this right shall be no greater than the right of an unsecured general creditor of the Company.virtuethe Plan and the Award Agreement.interestliability to any party for any action taken, or not taken, in any specific assetsgood faith under the Plan.Company.Shares complies with all applicable legal requirements including, without limitation, compliance with the provisions of applicable state securities laws, the Securities Act of 1933, as amended and in effect from time to time or any successor statute, the Exchange Act and the requirements of the exchanges on which the Company’s Shares may, at the time, be listed.10.24. Deferrals and Settlements. The Committee may require or permit Participants to elect to defer the issuance of Shares or the settlement of Awards in cash under such rules and procedures as it may establish under the Plan. It may also provide that deferred settlements include the payment or crediting of interest on the deferral amounts. The terms of any deferrals under this Section 24 shall comply with all applicable law, rules and regulations, including, without limitation, Section 409A.Programs.Programs Neither the adoption of the Plan by the Board nor its submission to the stockholders of the Company shall be construed as creating any limitation on the power of the Board or Committee to adopt such. Payments and other incentive arrangements as it may deem appropriate. Paymentsbenefits received by a Participant under an Award made pursuant to the Plan shall not be deemed a part of a Participant'sParticipant’s regular, recurring compensation for purposes of the termination, indemnity or severance pay lawlaws of any statecountry and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company or an Affiliate unless expressly so provided by such other plan, contract or arrangement, or unless the Committee expressly determines otherwise.that an Award or portion of an Award should be included to accurately reflect competitive compensation practices or to recognize that an Award has been made in lieu of a portion of competitive cash compensation.11.26. Beneficiary Upon Participant’s Death. To the extent that the transfer of a Participant’s Award at death is permitted by this Plan or under an Agreement, (a) a Participant’s Award shall be transferable to the beneficiary, if any, designated on forms prescribed by and filed with the Committee and (b) upon the death of the Participant, such beneficiary shall succeed to the rights of the Participant to the extent permitted by law and this Plan. If no such designation of a beneficiary has been made, the Participant’s legal representative shall succeed to the Awards, which shall be transferable by will or pursuant to laws of descent and distribution to the extent permitted by this Plan or under an Agreement.participantsParticipants subject to the Company'sCompany’s Recovery of Executive Compensation Policy (the "Policy"“Policy”), all amounts earned under the Amended Plan are subject to the Policy, as in effect from time to time, a current copy of which may be requested from the Company at any time, and the terms and conditions of which are hereby incorporated by reference into the Amended Plan. In addition, Awards shall be subject to the requirements of (a) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations thereunder, (b) similar rules under the laws of any other jurisdiction, (c) any compensation recovery or clawback policies12.28. Requirements of Law.Governing Law.Federalfederal laws do not otherwise control, the Plan and all determinations made and actions taken pursuant to the Plan shall be governed by the laws of the State of ColoradoDelaware without regard to its conflicts-of-law principles and shall be construed accordingly.13.Other Provisions.13.1 Non-transferability. Participants and beneficiarieshaveaffect the right to assign, pledgeremaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or otherwise dispose of any part of an Awardinvalid provision had not been included.Plan.13.2 TerminationPlan are intended to comply with or be exempt from the requirements of Employment. Except as otherwiseSection 409A to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4), the exclusion applicable to stock options and stock appreciation rights under Treasury Regulation Section 1.409A-1(b)(5), or otherwise. To the extent Section 409A is applicable to the Plan or any Award granted under the Plan, it is intended that the Plan and any such Awards granted under the Plan comply with the deferral, payout and other limitations and restrictions imposed under Section 409A. Notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, the Plan and any Award granted under the Plan shall be interpreted, operated and administered in a manner consistent with such intentions; provided, in this section,however, that the Committee makes no representations or warranties that Awards granted under the Plan shall be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to Awards granted under the Plan. No provision of the Plan or any Award shall be interpreted or construed to transfer any liability resulting from or arising out of any such consequences from a Participant or any other individual to the Company or any of its Subsidiaries. Without limiting the generality of the foregoing, and notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, with respect to any payments and benefits under the Plan or any Award granted under the Plan to which Section 409A applies, all references in the Plan or any Award granted under the Plan to the termination of the Participant’s employment or service are intended to mean the Participant’s “separation from service,” within the meaning of Section 409A(a)(2)(A)(i) to the extent necessary to avoid subjecting the Participant to the imposition of any additional tax under Section 409A. In addition, if the Participant is a “specified employee,” within the meaning of Section 409A(2)(B)(i), then to the extent necessary to avoid subjecting the Participant to the imposition of any additional tax under Section 409A, amounts that would otherwise be payable under the Plan or any Award granted under the Plan during the six-month period immediately following the Participant’s “separation from service,” within the meaning of Section 409A(a)(2)(A)(i), shall not be paid to athe Participant who is not actively employed by the Company as of the end of the applicable Performance Period. If a Participant's employment with the Company ends during a Performance Period, the Committee may, in its discretion, determine thatsuch period, but shall instead be accumulated and paid to the Participant (or, his or her beneficiaries) shall be paid a pro rata portionin the event of the Participant’s death, the Participant’s estate) in a lump sum on the first business day after the earlier of (a) the date that is six months following thepaymentgranted under the Plan so that the Participant would have received butAward qualifies for the fact that the Participant's employment ended. Any such pro rated Award payment will be paid at the same time as other Award paymentsexemption from or complies with respect to the applicable Performance Period.
Section 409A.1234567 VOTE BY MAIL 123,456,789,012.12345 TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. For All Withhold All For All Except To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the The Board of Directors recommends you vote FOR the following: nominee(s) on the line below. 0 0 0 1. Election of Directors Nominees 01 Jason Giordano 02 Prakash A. Melwani 03 Thomas J. Smach The Board of Directors recommends you vote FOR proposals 2 and 3. 2Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2017. For 0 Against 0 Abstain 0 NOTE: Such other business as may properly come before the meeting or any adjournment thereof. 0 2 years 0 0 3 years 0 0 Abstain 0 3An advisory vote to approve the compensation of our named executive officers. The Board of Directors recommends you vote 1 YEAR on proposal 4. 1 year 0 4An advisory vote on the frequency of future advisory votes to approve the compensation of our named executive officers. Investor Address Line 2 the 2008 Cash Incentive Plan. Investor Address Line 4 John Sample attorney, executor, administrator, or other fiduciary, please give full ANY CITY, ON A1A 1A1 partnership name, by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 02 0000000000 1 OF 1 1 2 0000332707_1 R1.0.1.15 The Board of Directors recommends you vote FOR proposal 5. ForAgainst Abstain 5Approval of the amendment and restatement of 000 Please sign exactly as your name(s) appear(s) hereon. When signing as title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or Investor Address Line 1 Investor Address Line 3 Investor Address Line 5 1234 ANYWHERE STREET SHARES CUSIP # JOB #SEQUENCE # VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 John Sample 234567P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. 1234567 Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. NAME THE COMPANY NAME INC. - COMMON THE COMPANY NAME INC. - CLASS A THE COMPANY NAME INC. - CLASS B THE COMPANY NAME INC. - CLASS C THE COMPANY NAME INC. - CLASS D THE COMPANY NAME INC. - CLASS E THE COMPANY NAME INC. - CLASS F THE COMPA N Y NAME INC. - 401 K CONTROL # SHARES123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 x PAGE1 OF 2 CROCS, INC. ATTN: CORPORATE SECRETARY 7477 EAST DRY CREEK PARKWAY NIWOT, CO 80503 Investor Address Line 1 Investor Address Line 2 Investor Address Line 3 Investor Address Line 4 Investor Address Line 5 8 8 8 1 1234 ANYWHERE STREET ANY CITY, ON A1A 1A1 234567 234567 234567 234567
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, Form 10-K is/are available at www.proxyvote.com CROCS, INC. Annual Meeting of Stockholders June 6, 2017 9:00 AM MDT This proxy is solicited by the Board of Directors The undersigned hereby appoints Andrew Rees and Daniel P. Hart and each of them, with power of substitution, as proxies of the undersigned, to attend the Annual Meeting of Stockholders of Crocs, Inc. (the "Company"), to be held at the St. Julien Hotel, 900 Walnut Street, Boulder, Colorado, on June 6, 2017 at 9:00 a.m. Mountain Time, and all adjournments thereof, and to vote, as indicated on the reverse side, the shares of Common Stock of the Company which the undersigned is entitled to vote with all the powers the undersigned would possess if present at the meeting. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO SPECIFIC DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED, "FOR" PROPOSALS 2, 3 AND 5 AND "1 YEAR" ON PROPOSAL 4. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE. Continued and to be signed on reverse side 0000332707_2 R1.0.1.15
