| All directors and Insider Participation. During fiscal year 2022, none of the members of the Compensation Committee was an officer or employee of the Company, was a former officer of the Company, nor had a relationship with the Company requiring disclosureexecutive officers as a related party transaction under Item 404 of Regulation S-K of the Securities Act of 1933. None of the Company’s executive officers served on the compensation committee or board of directors of another entity whose executive officer(s) served as a director on the Company’s Board or on the Compensation Committee. group
| 2023 PROXY STATEMENT
| | 54(15 people)
| | | 688,183 | | | 594,091 | | | 553,192 | | | 1,835,466 | | | 2.28% | |
*
| Represents beneficial ownership of less than 1%. |
1.
| The numbers of shares stated are based on information provided by each person listed and include shares personally owned of record and shares that, under applicable regulations, are considered to be otherwise beneficially owned. |
TABLE OF CONTENTS 2.
| The “Deferred Stock Units, Sole Voting and/or Investment Power” column of the table above does not include the following time-vested restricted stock units and performance units owned by directors and NEOs as of March 4, 2024: |
| Andersen | | | 9,515 | | | — | | | Boromisa | | | 34,023* | | | — | | | Bricker | | | 9,515 | | | — | | | Gerber | | | 9,515 | | | — | | | Hoffman | | | — | | | 393,763 | | | Hufnagel | | | 119,004 | | | 625,364 | | | Klimek | | | 76,175 | | | 64,689 | | | Kollat | | | 14,105* | | | — | | | Lauderback | | | 9,515 | | | — | | | Long | | | 37,326* | | | — | | | Price | | | 9,515 | | | — | | | Soriano | | | 78,761 | | | 72,128 | | | Stornant | | | 34,917 | | | 159,004 | | | Wilson-Thompson | | | 19,798 | | | — | | | Zwiers | | | 31,136 | | | 63,342 | |
*
| Includes 24,508, 4,590, and 20,593 fully vested restricted stock units held by each of Mr. Boromisa, Dr. Kollat, and Mr. Long respectively, that were deferred and will be settled on the date elected by the director. |
Summary Compensation Table3.
| These numbers include shares over which the listed person is legally entitled to share voting or investment power by reason of joint ownership, trust or other contract or property right and shares held by spouses, children or other relatives over whom the listed person may have influence by reason of such relationship. |
4.
| The numbers represent shares that may be acquired within 60 days after March 4, 2024, by the exercise of stock options granted under Wolverine's various stock option plans, or upon the vesting of restricted stock units. These numbers are also included in the Total Beneficial Ownership column.
|
5.
| As of March 4, 2024, based on 79,910,836 shares outstanding on that date plus the number of stock options exercisable and restricted stock units vesting that are held by the specified person(s) within 60 days of March 4, 2024, as indicated in the “Stock Options and RSUs Vesting Within 60 Days” column. |
| 2024 PROXY STATEMENT | | Brendan Hoffman
President and
CEO, Wolverine
Worldwide | | | 2022 | | | $997,308 | | | | | | $5,183,029 | | | $144,007 | | | $— | | | $195,310 | | | $6,519,654 | | | 2021 | | | $924,231 | | | | | | $5,083,847 | | | $1,073,446 | | | $— | | | $113,015 | | | $7,194,539 | | | 2020 | | | $259,615 | | | $300,0002 | | | $4,755,398 | | | $133,396 | | | $— | | | $58,083 | | | $5,506,492 | | | Chris Hufnagel
President, Active
Group | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 | | | $606,377 | | | | | | $665,652 | | | $97,162 | | | $— | | | $43,405 | | | $1,412,596 | | | Isabel Soriano7
President,
International Group | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 | | | $463,850 | | | | | | $454,094 | | | $280,390 | | | $— | | | $991,681 | | | $2,190,015 | | | 2021 | | | $480,641 | | | | | | $597,096 | | | $326,554 | | | $— | | | $1,075,445 | | | $2,479,736 | | | Michael D. Stornant
Executive Vice
President,
CFO, Treasurer and
Chief Accounting Officer | | | 2022 | | | $691,356 | | | | | | $1,113,295 | | | $49,881 | | | $— | | | $31,931 | | | $1,886,463 | | | 2021 | | | $657,865 | | | | | | $1,819,680 | | | $577,880 | | | $86,187 | | | $30,883 | | | $3,172,495 | | | 2020 | | | $477,346 | | | | | | $1,223,257 | | | $232,470 | | | $1,113,604 | | | $31,141 | | | $3,077,818 | | | James D. Zwiers
Executive Vice
President and
President, Global
Operations Group | | | 2022 | | | $711,962 | | | | | | $988,296 | | | $48,057 | | | $— | | | $37,310 | | | $1,785,625 | | | 2021 | | | $683,856 | | | | | | $1,578,188 | | | $481,625 | | | $70,550 | | | $38,953 | | | $2,853,172 | | | 2020 | | | $519,019 | | | | | | $1,161,805 | | | $249,786 | | | $1,253,808 | | | $39,634 | | | $3,224,052 | |
1.
| Includes any amounts deferred under the Company's qualified 401(k) plan or Deferred Compensation Plan. |
2.
| Reflects a one-time sign-on bonus paid in connection with recruiting Mr. Hoffman for the position of President, Wolverine Worldwide, and subject to an obligation to return the bonus under certain conditions described in his employment agreement. |
3.
| Includes the grant date fair value of restricted stock unit awards, and performance unit awards, as follows for 2022: |
| Hoffman | | | $1,440,004 | | | $3,743,025 | | | $5,183,029 | | | Hufnagel | | | $331,452 | | | $334,200 | | | $665,652 | | | Soriano | | | $170,010 | | | $284,084 | | | $454,094 | | | Stornant | | | $416,811 | | | $696,484 | | | $1,113,295 | | | Zwiers | | | $370,012 | | | $618,284 | | | $988,296 | |
| Restricted stock units were valued using the closing market price of Wolverine Worldwide common stock on the date of the grant of the respective award. Performance units were valued using the closing market price of Wolverine Worldwide common stock on the date of grant of the respective award and assuming target performance for all performance periods, with an adjustment to value for the TSR modifier where applicable, all consistent with ASC Topic 718. The target performance unit grant values without accounting adjustments: $3,360,000 for Mr. Hoffman; $300,000 for Mr. Hufnagel, $255,000 for Ms. Soriano; $625,200 for Mr. Stornant; and $555,000 for Mr. Zwiers (all with de minimis differences based on rounding up to the nearest unit)). Assuming maximum payout, the aggregate grant date fair value of performance units awarded in 2022 for each NEO (and, in parentheses, the maximum value is combined with the grant date fair value of restricted stock unit awards and restricted stock awards for 2022) would have been $22,458,152; ($23,898,156) for Mr. Hoffman; $2,005,202 ($2,336,654) for Mr. Hufnagel, $1,704,503 ($1,874,513) for Ms. Soriano; $4,178,903 ($4,595,714) for Mr. Stornant; and $3,709,705 ($4,079,717) for Mr. Zwiers. Restrictions on such performance unit awards will lapse in the February following the last year of the performance period, if at all, based on the Company's performance for the period (capped at 200%), potential +/- 25% adjustments for relative TSR performance and target bonus level over the three-year performance period. The actual value of shares that vest is also dependent on the stock price at the time of vesting. For additional valuation assumptions, see the Stock Based Compensation footnote to Wolverine Worldwide's Consolidated Financial Statements for the fiscal year ended December 31, 2022 included in its Form 10-K for this year. | 39 | |
TABLE OF CONTENTS | Reflects the sum of performance bonus and individual bonus amounts, as adjusted by any applicable modifier, earned in 2022, 2021 and 2020, respectively, and paid in 2023, 2022 and 2021 respectively. | | | | | | | The Company's Compensation Discussion and Analysis (“CD&A”) provides an overview and analysis of the executive compensation program for the Company's named executive officers (“NEOs”). For fiscal year 2023, the Company's NEOs were: | | | Christopher Hufnagel | | | President and Chief Executive Officer | | | Amy Klimek | | | Executive Vice President, Chief Human Resources Officer | | | Isabel Soriano | | | President, International Group | | | Michael D. Stornant | | | Executive Vice President, Chief Financial Officer and Treasurer | | | James D. Zwiers | | | Executive Vice President and President, Global Operations Group | | | Brendan Hoffman | | | Former President and Chief Executive Officer | |
COMPENSATION PHILOSOPHY AND OBJECTIVES The Company's compensation philosophy is to provide executives with a competitive compensation package that is heavily weighted towards performance-based (performance units and annual bonus opportunity) and variable (restricted stock units) compensation in order to encourage superior business and financial performance over the short and longer term and, by linking compensation with stock price performance, to closely align the interests of the Company's NEOs with those of its shareholders without encouraging excessive risk-taking. The Compensation and Human Capital Committee (the “Committee”) oversees the Company's executive compensation program. The executive compensation program has four primary objectives: Attract and retain talented NEOs who will lead Wolverine Worldwide and drive superior business and financial performance Provide incentives for achieving specific pre-established near-term strategic, business unit and corporate goals and reward the attainment of those goals Provide incentives for achieving specific pre-established longer-term corporate financial goals and reward the attainment of those goals Align the interests of NEOs with those of the shareholders through incentives based on achieving performance objectives that enable increased shareholder value Compensation Decisions in Context: Key 2023 Accomplishments We took bold and fast action in 2023 to develop a new vision to become consumer-obsessed, global brand builders, and to develop a comprehensive turnaround plan to stabilize the Company, transform the organization, and ultimately inflect to growth. Some highlights are listed below: A Focused Portfolio – We rationalized our portfolio through a host of significant actions, including the divestiture of the Sperry brand, the Keds brand, and several other non-core assets. As a result, our portfolio is tightly aligned around brands that design innovative, trend-right apparel and footwear to allow their consumers to live healthier and more productive lives. A Consumer-Obsessed, Brand-Building Organization – We completed the largest restructure and redesign in the Company’s history, resulting in a more efficient and more capable organization aligned with our Vision to become a consumer-obsessed builder of great global brands. We added consumer-focused talent in many of our key brand roles and established The Collective, a center-of-excellence created to elevate consumer insights, market intelligence, trend monitoring, and innovation. A More Profitable Business – We developed a plan to meaningfully expand operating margin in 2024 and again generate strong cash flow – as our model has done so effectively in the past – driven by significant gross margin expansion and aggressive profit improvement initiatives executed over the past few months. 5.
| All amounts in this column reflect, where applicable, the aggregate change in the actuarial present value of the accumulated benefits under the Wolverine Worldwide Employees' Pension Plan (“Pension Plan”) and Wolverine World Wide, Inc. 409A Supplemental Executive Retirement Plan (“SERP”) for Messrs. Stornant, Hufnagel and Zwiers. The amounts in the table were determined using assumptions consistent with those used in Wolverine Worldwide's Consolidated Financial Statements for each respective year. See the “Pension Plans and 2022 Pension Benefits” section starting on page 63. |
6.
| The amounts listed in this column for 2022 include Wolverine Worldwide's contributions to the accounts of the NEOs under Wolverine Worldwide's 401(k) plans (or, in the case of Ms. Soriano, a payment in lieu of a retirement plan contribution) and the Wolverine Worldwide Deferred Compensation Plan, payments made by Wolverine Worldwide for the premiums on certain life insurance policies, tax, housing/relocation expenses and estate planning services and health care reimbursements in the amounts listed in the table below. Unlike the other NEOs, Mr. Hoffman and Ms. Soriano are not participants in the Company's Pension Plan, and instead receive either a deferred compensation plan contribution (Mr. Hoffman) or a retirement benefit payment (Ms. Soriano). |
| Hoffman | | | $16,775 | | | $8,895 | | | $21,564 | | | $2,789 | | | $70,7571 | | | $74,530 | | | $0 | | | $0 | | | Hufnagel | | | $9,150 | | | $10,230 | | | $21,795 | | | $2,230 | | | $0 | | | $0 | | | $0 | | | $0 | | | Soriano | | | $37,108 | | | $35,720 | | | $14,393 | | | $1,364 | | | $121,193 | | | $0 | | | $0 | | | $781,903 | | | Stornant | | | $9,150 | | | $0 | | | $19,764 | | | $3,017 | | | $0 | | | $0 | | | $0 | | | $0 | | | Zwiers | | | $9,150 | | | $8,895 | | | $18,488 | | | $777 | | | $0 | | | $0 | | | $0 | | | $0 | |
1.
| Temporary housing and costs related to relocation. |
7.
| The cash compensation for Ms. Soriano is paid in Pounds Sterling. Her cash compensation was converted into U.S. dollars using the fiscal year-end rate of 1.20 for fiscal year 2022 and 1.33 for fiscal year 2023.TABLE OF CONTENTS
Grants of Plan-Based Awards in
Fiscal Year 2022
The following table provides information concerning each grant of an award made to the NEOs in fiscal year 2022:
| Hoffman | | | Annual Bonus | | | | | | $598,385 | | | $1,196,769 | | | $3,111,600 | | | | | | | | | | | | | | | | | | FY22-FY24
Performance Units | | | 02/09/2022 | | | | | | | | | | | | 62,177 | | | 124,353 | | | 746,118 | | | | | | $3,743,025 | | | Restricted Units | | | 02/09/2022 | | | | | | | | | | | | | | | | | | | | | 53,294 | | | $1,440,004 | | | Hufnagel | | | Annual Bonus | | | | | | $151,594 | | | $303,189 | | | $788,290 | | | | | | | | | | | | | | | | | | FY22-
FY24 Performance
Units | | | 02/09/2022 | | | | | | | | | | | | 5,552 | | | 11,103 | | | 66,618 | | | | | | $334,200 | | | Restricted
Units | | | 02/08/2022 | | | | | | | | | | | | | | | | | | | | | 5,000 | | | $131,450 | | | Restricted Units | | | 02/09/2022 | | | | | | | | | | | | | | | | | | | | | 7,402 | | | $200,002 | | | Soriano | | | Annual Bonus | | | | | | $115,963 | | | $231,925 | | | $603,005 | | | | | | | | | | | | | | | | | | FY22-
FY24 Performance
Units | | | 02/09/2022 | | | | | | | | | | | | 4,719 | | | 9,438 | | | 56,628 | | | | | | $284,084 | | | Restricted Units | | | 02/09/2022 | | | | | | | | | | | | | | | | | | | | | 6,292 | | | $170,010 | | | Stornant | | | Annual Bonus | | | | | | $224,691 | | | $449,381 | | | $1,168,391 | | | | | | | | | | | | | | | | | | FY22-
FY24 Performance
Units | | | 02/09/2022 | | | | | | | | | | | | 11,570 | | | 23,139 | | | 138,834 | | | | | | $696,484 | | | Restricted
Units | | | 02/09/2022 | | | | | | | | | | | | | | | | | | | | | 15,426 | | | $416,811 | | | Zwiers | | | Annual Bonus | | | | | | $213,588 | | | $427,177 | | | $1,110,660 | | | | | | | | | | | | | | | | | | FY22-FY24 Performance Units | | | 02/09/2022 | | | | | | | | | | | | 10,271 | | | 20,541 | | | 123,246 | | | | | | $618,284 | | | Restricted Units
| | | 02/09/2022 | | | | | | | | | | | | | | | | | | | | | 13,694 | | | $370,012 | |
1.
| Estimated payout levels relating to the performance bonus and individual bonus. Maximum amount assumes stretch revenue and pretax earnings performance and achievement of the maximum eCommerce revenue adjustment. For a description of these bonuses and the payouts under them, see pages 43-46. Ms. Soriano's payout levels have been converted to U.S. dollars from Pounds Sterling based on the fiscal year-end exchange rate of 1.20 for fiscal year 2022 and 1.33 for fiscal year 2021. |
2.
| Estimated payout levels as of the grant date of performance stock units granted under the Stock Incentive Plan of 2016, as amended (the “Stock Incentive Plan of 2016”). Restrictions on such performance unit awards typically lapse in the February following the last year of the performance period, if at all, based on the Company's performance for the period (capped at 200%), potential +/- 25% adjustments for relative TSR performance, and target bonus levels over the performance period. The actual value of shares that vest is also dependent on the stock price at the time of vesting. The Company accrues, but does not pay, dividends on the performance shares during the performance period. At the end of the performance period, the Company will pay to the NEO the accrued dividends (if any) on the performance units that vest. The Target performance unit grant values without accounting adjustments are: ($3,360,000 for Mr. Hoffman; $255,000 for Ms. Soriano; $625,200 for Mr. Stornant; $300,000 for Mr. Hufnagel; and $555,000 for Mr. Zwiers (all with de minimis differences based on rounding up to the nearest unit)). For a description of the performance units granted in 2022 under the Stock Incentive Plan of 2016, see pages 47-48. |
TABLE OF CONTENTS The Capacity to Invest – Through our profit improvement work, we created the capacity to invest in elevated brand marketing and key strategic capabilities. We believe these investments are essential to better position our brands for growth, while still taking an important step in our transformation to meaningfully improve profitability – a balanced approach committed to long-term, sustainable performance and returns. A Healthier Balance Sheet – We aggressively reduced our inventory throughout the year, and our portfolio management actions generated approximately $380 million of proceeds in 2023 through the first month of 2024. As a result, the Company’s debt level is the lowest in over two and half years, and its balance sheet is much healthier, with line of sight to drive further improvement in 2024. 2023 Compensation Program Overview The Company's executive compensation program consists of base salary, annual bonus opportunity, long-term incentive compensation and benefits. A breakdown of base salary, annual performance bonus, and long-term incentive compensation is illustrated below: 3.
| The Company awarded service-based restricted stock unit awards in February 2022 under the Stock Incentive Plan of 2016 to all NEOs. 20% of the units received under the awards reflected in this column vest on each of the first and second anniversaries of the date of grant of the award and 30% on the third and fourth anniversaries of the date of grant of the award. All restricted stock units vest upon an NEO's death, disability or retirement. Holders of restricted stock units and awards are entitled to receive dividend equivalents on restricted stock units and awards. The retention grant made to Mr. Hufnagel on February 8, 2022 vests in full on the second anniversary of the grant date. | | | | | | | | | | | | | | Base
Salary | | | | • Cash | | | | • Fixed amount based on responsibilities, experience and market data | | | | • Scope of core responsibilities, years of experience, and potential to affect the Company's overall performance | | | | | | | | | | | | | | | | | | | Annual
Performance
Bonus | | | | • Company/Business Unit Cash Bonus | | | | • 75% revenue and adjusted pretax earnings
• 25% annual strategic performance targets | | | | • Achieving specific corporate business and/or divisional financial objectives over which the NEO has reasonable control
• Achieving specific annual strategic priorities | | | | | | | | | | | | | | | | | | | Long-Term
Incentive
Compensation | | | | • Performance-based restricted stock units
• Time-vested restricted stock units | | | | • Uses the following performance metrics (weighted as indicated)
• 60% Operating Profit
• 40% Relative Total Shareholder Return
• Three-year vesting for time-vested restricted stock units | | | | • Balances focus on near-term profitability with longer-term shareholder value creation
• Achieving long-term corporate objectives
• Driving long-term shareholder value
• Continued, long-term employment at Wolverine Worldwide
• Significant weighting on relative TSR performance
• Time-vested restricted stock units reward increases in stock price | |
Under the Company's compensation program, a significant portion of the compensation awarded to the NEOs generally, and to the CEO in particular, is at risk (contingent upon the attainment of various pre-established short and long-term financial goals) and variable (contingent on the performance of the Company's stock price). NEO compensation that is significantly at risk and variable incentivizes superior business and financial performance and, by linking compensation with stock price performance, aligns the interests of executives with those of shareholders. For more information on the relation between Company performance and the impact on CEO and other NEO pay, please see the tables and related information under the heading “Pay vs. Performance” on page 70. 4.
| Represents the award date fair value for performance stock units and service-based stock unit awards made in fiscal year 2022, determined as described in footnote 3 to the “Summary Compensation Table.” The grant date fair values reflect a higher amount than the target amounts discussed in the CD&A section due to accounting adjustments to the grant date fair value relating to the TSR modifier for grants that include the modifier.TABLE OF CONTENTS
Outstanding Equity Awards at
2022 Fiscal Year-End
The following table provides information concerning options and stock awards that have not vested for each NEO outstanding as of December 31, 2022:
| Hoffman | | | | | | | | | | | | | | | | | | | | | | | | | | | Various | | | | | | | | | | | | 122,516 | | | $1,339,100 | | | | | | | | | Various | | | | | | | | | | | | | | | | | | 246,895 | | | $2,698,562 | | | Hufnagel | | | | | | | | | | | | | | | | | | | | | | | | | | | Various | | | | | | | | | | | | 23,525 | | | $257,128 | | | | | | | | | Various | | | | | | | | | | | | | | | | | | 29,200 | | | $319,156 | | | 02/11/14 | | | 17,022 | | | $27.13 | | | 02/10/24 | | | | | | | | | | | | | | | 02/11/15 | | | 16,789 | | | $28.00 | | | 02/10/25 | | | | | | | | | | | | | | | 02/10/16 | | | 32,294 | | | $16.51 | | | 02/09/26 | | | | | | | | | | | | | | | Soriano | | | | | | | | | | | | | | | | | | | | | | | | | | | Various | | | | | | | | | | | | 14,769 | | | $161,425 | | | | | | | | | Various | | | | | | | | | | | | | | | | | | 21,046 | | | $230,033 | | | Stornant | | | | | | | | | | | | | | | | | | | | | | | | | | | Various | | | | | | | | | | | | 37,987 | | | $415,198 | | | | | | | | | Various | | | | | | | | | | | | | | | | | | 59,233 | | | $647,417 | | | 02/11/14 | | | 11,912 | | | $27.13 | | | 02/10/24 | | | | | | | | | | | | | | | 02/11/15 | | | 11,765 | | | $28.00 | | | 02/10/25 | | | | | | | | | | | | | | | 06/12/15 | | | 12,687 | | | $29.31 | | | 06/11/25 | | | | | | | | | | | | | | | 02/10/16 | | | 70,948 | | | $16.51 | | | 02/09/26 | | | | | | | | | | | | | | | Zwiers | | | | | | | | | | | | | | | | | | | | | | | | | | | Various | | | | | | | | | | | | 33,646 | | | $367,751 | | | | | | | | | Various | | | | | | | | | | | | | | | | | | 51,845 | | | $566,666 | | | 02/11/15 | | | 33,514 | | | $28.00 | | | 02/10/25 | | | | | | | | | | | | | | | 02/10/16 | | | 64,465 | | | $16.51 | | | 02/09/26 | | | | | | | | | | | | | |
TABLE OF CONTENTS 1.The following graphic illustrates the percentage of 2023 NEO target compensation that is at risk, reflecting the grant values and salary information for Mr. Hufnagel's regular annual compensation package as CEO (not inclusive of promotion RSU grants), and from the February 2023 Compensation and Human Capital Committee actions for the other NEOs. Long-Term Incentive Program Mix The long-term incentive program is heavily weighted to at-risk compensation, with a mix for February 2023 grants of 70% performance stock units and 30% time vested restricted stock units for Mr. Hoffman (who was CEO at that time) and 60% performance stock units and 40% time vested restricted stock units for the other NEOs. Compensation Best Practices | The following table sets forth the vesting dates for the unvested service-based restricted stock or stock unit awards of each NEO as of December 31, 2022:TABLE OF CONTENTS Compensation Discussion and Analysis 2023 COMPENSATION PROGRAM OVERVIEW Each February, the Committee recommends (and the independent directors approve) target compensation for the CEO for the upcoming year after considering the latest available information, including the Company's total shareholder return (“TSR”) and other business and financial performance, information provided by the Committee's compensation consultant regarding executive compensation trends and compensation paid to other chief executive officers of companies in the compensation peer group (described below), and information provided by management on recent Company performance and the Company's future business and financial outlook. The Committee's goal is to set the CEO's compensation in line with experience and the anticipated market median compensation for that year. Given the significant weight the Company's executive compensation program places on at risk and variable compensation, the compensation realized by the CEO and other NEOs can be significantly affected, both positively and negatively, by performance against the various operational and financial performance metrics pre-established by the Committee and by the performance of the Company's stock. The Board and Committee believe such a compensation program aligns the interests of the CEO and other NEOs with the interests of the shareholders. The Company's executive compensation program consists of four primary elements: base salary, annual bonus opportunity, long-term incentive compensation and benefits. These elements are described in greater detail below. As part of approving an NEO's base salary, the Committee considers a variety of factors including individual responsibilities, experience, skills, and potential to affect Wolverine Worldwide's overall performance, as well as market surveys and peer group information. The Committee considers these compensation factors subjectively, and no single factor or combination of factors was determinative in setting base salaries for any NEO for fiscal year 2023. Based on the above factors, the Committee approved the 2023 base salaries for the NEOs as noted in the following table. The base salary increases for the NEOs were based on their performance evaluations as well as consideration of peer group and broad-based industry compensation data, as described in detail below. The cash compensation for Ms. Soriano is paid in Pounds Sterling and was converted into U.S. dollars using the fiscal year-end rate (1.27 for fiscal 2023 and 1.20 for fiscal 2022) here and throughout the CD&A and related disclosures. | Hufnagel1 | | | $609,800 | | | $1,000,000 | | | Klimek | | | $448,800 | | | $471,240 | | | Soriano2 | | | $465,972 | | | $575,017 | | | Stornant | | | $695,250 | | | $695,250 | | | Zwiers | | | $716,000 | | | $716,000 | | | Hoffman | | | $1,000,000 | | | $1,000,000 | |
1.
| Mr. Hufnagel's increase is due to his 2023 promotion to President and CEO of the Company. Mr. Hufnagel's 2023 base salary is reflected in this table as his annualized salary at the end of 2023. |
2.
| Ms. Soriano’s 2022 base salary was GBP 388,310, and her 2023 base salary was GBP 452,769. |
TABLE OF CONTENTS In 2023, each NEO had the opportunity to earn annual cash incentive compensation (“annual bonus”), consisting of a performance bonus and an annual strategic priorities bonus: | Performance Bonus
(75% weighting) | | | • | | | Based on performance measured against Company and/or business unit performance criteria established at the beginning of 2023 | | | •
• | | | Revenue (50%)
Adjusted pretax earnings (50%) | | | • | | | Payout determined by comparing performance against three performance levels: threshold, target, and stretch | | | | | | | | | Annual Strategic
Priorities (ASP)
(25% weighting) | | | • | | | Measured against company/function ASP | | | • | | | Vary for each NEO | | | • | | | Each NEO's payout was determined by comparing performance on ASPs against specific criteria set at the beginning of 2023 | | | | | | | | | • | | | Payouts can range from 0% to 200% depending on the NEO's performance against ASPs | | | | | | | | |
A percentage of each NEO's 2023 base salary, as determined in February 2023, was set as the annual bonus target percentage (the “Target Bonus Percentage”), or adjusted thereafter. The Target Bonus Percentage represents the percentage of each NEO's base salary that could be earned as annual incentive compensation at a “target” performance level (100% payout) for each of the performance bonus and annual strategic priorities. Generally, the Committee sets higher Target Bonus Percentages for individuals with greater influence on business strategy, profit or sales. This puts a larger percentage of an NEO's total potential cash compensation at risk, in line with the NEO's ability to influence these factors. For 2023, the NEOs had the following Target Bonus Percentages: Mr. Hufnagel 120%, Ms. Soriano 55%, Mr. Stornant 65%, Mr. Zwiers 60%, Ms. Klimek 50% and Mr. Hoffman 120%. The Committee selected fiscal year 2023 revenue and adjusted pretax earnings as metrics for the performance bonus because it believes a strong correlation exists between performance on these financial measures and increases in shareholder value. Messrs. Hufnagel, Stornant, Zwiers, and Hoffman, and Ms. Klimek had significant influence on the Company's overall business performance and, accordingly, their respective performance bonus opportunity (75% of their total annual bonus opportunity) is based on the Company performance criteria only. Ms. Soriano was directly responsible for a specific business unit and exerted a significant influence on that business unit in particular, in addition to influencing Company performance. Accordingly, a large percentage of her overall annual bonus opportunity was based on business unit performance, as reflected in the table on page 46. As shown in the table below, the Committee also set three performance levels for each criterion: threshold (25% payout for adjusted pretax; 50% for revenue), target (100% payout), and stretch (200% payout). The Committee set the revenue and adjusted pretax earnings goals for these performance levels following a review of the Company's operating plan, historical performance, and industry and macroeconomic conditions. The performance targets were set aggressively, including setting the revenue performance target required for 100% payout at revenue growth of over 3% versus the prior fiscal year, after adjusting for businesses sold or discontinued in 2023 (most notably, the Keds brand business). The performance targets required for 100% payout on adjusted pretax goals were also set aggressively – at growth of over 46% versus the prior fiscal year’s adjusted pretax results. 2023 performance targets were set based on planned performance in 2023 and as compared to actual 2022 results. | Threshold (25% for pretax; 50% for revenue) | | | $2,530 | | | $172.2 | | | Target (100%) | | | $2,590 | | | $191.0 | | | Stretch (200%) | | | $2,700 | | | $206.0 | |
1.
| The maximum payout an NEO can receive is 200% of his or her Target Bonus Percentage, even if performance is above stretch. An NEO would receive 0% of his or her Target Bonus Percentage if performance is below threshold. |
10/26/23
| | | 14,739 | 2024 PROXY STATEMENT | | 44 | | | 10/26/24
| | | 14,739
|
TABLE OF CONTENTS For each business unit, the Committee sets the revenue and adjusted pretax earnings at substantially similar levels of difficulty as the goals for the Company and with a similar degree of difficulty as in prior years. The below table shows historical weighted performance levels achieved by the business unit included as part of an NEO performance bonus in 2023. | International Group | | | Below threshold | | | Between target and stretch | | | Between target and stretch | | | Below threshold | | | Between threshold and target | |
| Wolverine Worldwide | | | Below Threshold | | | —% | | | International Group | | | Below Threshold | | | —% | | |
Company and International Group revenue and pre-tax performance for 2023 was below threshold and resulted in no payout, as shown in the table below. | Hufnagel | | | 75% | | | 0 - 200% | | | —% | | | $0 | | | Klimek | | | 75% | | | 0 - 200% | | | —% | | | $0 | | | Soriano | | | 75% | | | 0 - 200% | | | —% | | | $0 | | | Stornant | | | 75% | | | 0 - 200% | | | —% | | | $0 | | | Zwiers | | | 75% | | | 0 - 200% | | | —% | | | $0 | | | Hoffman2 | | | 75% | | | 0 - 200% | | | —% | | | N/A | |
1.
| Not including Annual Strategic Priorities Bonus. |
2.
| In connection with his termination of employment, Mr. Hoffman was not eligible for a performance bonus payout and instead received a pro-rata target bonus in accordance with the terms of his employment agreement. |
Annual Strategic Priorities At the same time Target Bonus Percentages are set, the CEO approves measurable annual strategic priorities for each NEO's individual bonus, other than for himself. The CEO submits, and the Committee reviews and approves, with such changes as it considers appropriate, the CEO's annual strategic priorities. Such measurable priorities may include goals such as executing strategies supporting the Company's vision, developing employees, and driving operational excellence. Performance is evaluated by the CEO (or, in the case of the CEO, by the Committee and the other independent directors) based on qualitative and quantitative factors. Each strategic priority is given an achievement rating with weighted performance ratings and payouts consistent with the following table: 02/09/23
| | | 20,594 | Stretch | | | 200% | | | Target | | | 100% | | | Threshold | | | 50% | | | |
The CEO recommended, and the Committee approved, the 2023 cumulative weighted annual strategic priority scores and payout levels for each of the NEOs other than himself. The Committee and the other independent directors of the Board met with the CEO at the end of the year to evaluate his performance against his strategic priorities, considering various factors. The Committee determined the cumulative weighted strategic priorities score for the CEO and recommended to the independent directors of the Board the CEO's payout level. 02/09/24
| | | 25,563 | 2024 PROXY STATEMENT | | 45 | | | |
TABLE OF CONTENTS Summaries of the strategic priorities for each NEO are outlined in the table below, along with performance information about each objective in parentheses, based on the scale set forth above. This year's annual strategic priorities related to key initiatives intended to drive strategic transformation and shareholder value. 02/09/25
| | | 30,892
| | | 02/09/26
| | | 15,989 | Hufnagel | | | Stabilization (Target), Transformation (Target), Inflection (Target), People & Culture (Target) | | | Klimek | | | Transform culture (Target), Continue DE&I Journey (Threshold), Create an amazing employee experience to attract and retain talent (Target), Leverage organizational design (Stretch), Create our digital HR journey (Target) | | | Soriano | | | Achieve healthy operational basis (Target), Grow with our largest international brands (Below Threshold), Strategic DTC approach (Below Threshold), Expand penetration of our brands in APAC (Target), People & Culture (Target) | | | Stornant | | | Integrate financial forecast, inventory planning, and Q-reviews (Target), PIO Cost Savings (Target), Normalize working capital and optimize cash flow (Threshold), Improve work-life balance for team members (Target) | | | Zwiers | | | Reduce cost and lead times (Stretch), Restore foundational brand health (Stretch), Sourcing Strategy (Stretch), Digitize Supply Chain (Stretch), People and Culture (Target), Navigate supply chain crisis (Stretch), Modernize distribution platform (Stretch), Modernize logistics platform (Target) | |
| Hufnagel | | | 25% | | | 0 - 200% | | | 100% | | | $300,000 | | | Klimek | | | 25% | | | 0 - 200% | | | 115% | | | $66,998 | | | Soriano | | | 25% | | | 0 - 200% | | | 109% | | | $81,688 | | | Stornant | | | 25% | | | 0 - 200% | | | 90% | | | $112,978 | | | Zwiers | | | 25% | | | 0 - 200% | | | 150% | | | $161,100 | | | Hoffman1 | | | 25% | | | 0 - 200% | | | N/A | | | N/A | |
1.
| In connection with his termination of employment, Mr. Hoffman was not eligible for a performance bonus payout and instead received a pro-rata target bonus in accordance with the terms of his employment agreement. |
Each NEO's total annual bonus opportunity for 2023 ranged from 0% to 200% of the Target Bonus Percentage. The accompanying table shows the aggregate annual incentive compensation payout earned by each NEO for 2023, as well as the portion of that aggregate number that is attributable to the performance bonus and annual strategic priorities bonus.
| Hufnagel | | | 120% | | | 25% | | | 75% | | | | | | $— | | | $300,000 | | | $300,000 | | | 25% | | | Klimek | | | 50% | | | 25% | | | 75% | | | | | | $— | | | $66,998 | | | $66,998 | | | 28% | | | Soriano | | | 55% | | | 25% | | | 30% | | | 45% 2 | | | $— | | | $81,688 | | | $81,688 | | | 26% | | | Stornant | | | 65% | | | 25% | | | 75% | | | | | | $— | | | $112,978 | | | $112,978 | | | 25% | | | Zwiers | | | 60% | | | 25% | | | 75% | | | | | | $— | | | $161,100 | | | $161,100 | | | 38% | | | Hoffman3 | | | 120% | | | 25% | | | 75% | | | | | | N/A | | | N/A | | | N/A | | | N/A | |
TABLE OF CONTENTS 1.
| Based on revenue and pretax earnings performance criteria for the Company, as described above under “Annual Bonus — Performance Bonus.” |
2.
| Based on revenue and pretax earnings as the performance criteria for the International Group. |
3.
| In connection with his termination of employment, Mr. Hoffman was not eligible for a performance bonus payout and instead received a pro-rata target bonus in accordance with the terms of his employment agreement. |
LONG-TERM INCENTIVE COMPENSATION In 2023, each NEO had the opportunity to earn long-term incentive compensation comprised of a mix of performance stock units and time-based restricted stock unit awards. The 2023 grants were based on the following: | Performance Stock Units | | | • | | | Performance stock units are based on performance criteria covering three-year periods | | | • | | | Operating Profit (60%)1 | | | • | | | Awards balance focus on near term profitability with longer term shareholder value creation | | | • | | | Relative Total Shareholder Return (“TSR”) (40%)2 | | | Time-Based Restricted Stock Unit Awards | | | • | | | Encourages employee retention and rewards increases in stock price | | | | | | | | |
1.
| Operating Profit is the total earnings from the Company’s core business function for a fiscal year after deducting selling, general and administrative costs. |
2.
| Relative TSR is as compared to TSR for the S&P Composite 1500 Consumer Durables & Apparel Index. |
Performance Awards for the 2023-2025 Performance Period In the beginning of 2023, the Committee evaluated each NEO's long-term incentive target payout opportunity expressed as a dollar amount at target grant value for the grant of performance units for the 2023-2025 period. Performance units are eligible to vest based on achievement of adjusted constant-currency Operating Profit goals (weighted 60%) and relative total shareholder return goals (weighed 40%). 02/05/23
| | | 1,553 | Hufnagel | | | $390,000 | | | Klimek | | | $285,000 | | | Soriano | | | $330,000 | | | Stornant | | | $715,200 | | | Zwiers | | | $645,000 | | | Hoffman | | | $4,060,009 | | | |
The Company accrues, but does not pay, any dividends on any performance units during the performance period. Once the Committee certifies the Company's performance compared to the pre-determined performance criteria, the restrictions on some, all, none, or multiple of the performance share units awarded to each NEO will vest, and the NEO will receive accrued dividends only on the shares actually earned. The Committee goes through a rigorous process in setting performance targets, including a careful review of the Company's prior year business and financial performance, current year operating plan and future expectations. To achieve target level Operating Profit for the first year of the performance period would require a more than 30% increase over 2022 actual performance, and to achieve target level Operating Profit for years two and three of the performance period would require double digit growth percentages over the prior year's actual Operating Profit results. Wolverine believes disclosing specific Operating Profit targets while the applicable performance period is ongoing could cause competitive harm. However, such targets will be disclosed once the applicable performance periods have ended as part of our discussion and analysis on awards earned by the NEOs. For the relative TSR metric, threshold was set at the 25th percentile relative to the S&P Composite 1500 Consumer Durables & Apparel Index, target at the 50th percentile, and stretch at the 75th percentile. In addition, if the Company’s absolute TSR for the three-year period is negative, payouts on this measure are capped at target, regardless of whether the Company outperformed the Index. 02/06/23
| | | 1,466 | 2024 PROXY STATEMENT | | 47 | | | |
TABLE OF CONTENTS 2021-2023 Performance Stock Units The following tables list the performance levels set by the Committee for performance stock unit awards granted for the 2021-2023 performance period: | Threshold (50%) | | | $1.90 | | | 4.0% | | | 6.8% | | | Target (100%) | | | $2.00 | | | 7.7% | | | 11.5% | | | Goal (150%) | | | $2.05 | | | 12.0% | | | 17.5% | | | Stretch (200%) | | | $2.10 | | | 16.5% | | | 23.5% | |
| Threshold (50%) | | | $155 | | | 3.7% | | | 4.5% | | | Target (100%) | | | $161 | | | 9.7% | | | 10.8% | | | Goal (150%) | | | $169 | | | 14.1% | | | 18.0% | | | Stretch (200%) | | | $177 | | | 20.4% | | | 23.6% | |
In February 2024, the Committee evaluated and certified the Company's performance for the 2021-2023 performance period against the criteria set forth in the table above. These targets and the related results exclude revenue attributable to the Sweaty Betty brand, which was acquired during the 2021 fiscal year. During the 2021-2023 performance period, the Company's TSR performance against the Russell 3000 Index was at the 11th percentile so the actual shares vesting was reduced by 25% pursuant to the TSR adjustment mechanism built into the awards. The table below showing shares vested for each NEO under the 2021-2023 performance stock unit grant reflects this adjustment. After the adjustment, vesting was at 19.3% of target. In calculating the number of stock units that vest, the Company uses the stock price on the date of the grant, which results in the NEOs bearing the risk of stock price performance during the performance period. 02/09/23
| | | 2,941 | Hufnagel | | | 4,716 | | | Klimek | | | 1,428 | | | Soriano | | | 1,445 | | | Stornant | | | 3,494 | | | Zwiers | | | 3,088 | | | Hoffman | | | 13,9501 | | |
1.
| Based on actual performance and prorated to reflect Mr. Hoffman's time of
|
employment during this performance period. Restricted Stock Unit Awards The following table reflects the grant date value of the service-based restricted stock unit awards granted to each NEO: 04/29/23
| | | 353 | Hufnagel | | | $1,260,019 | | | Klimek | | | $690,010 | | | Soriano | | | $743,353 | | | Stornant | | | $476,815 | | | Zwiers | | | $430,007 | | | Hoffman | | | $1,740,012 | | | |
The Committee generally grants annual equity awards at its regularly scheduled February meeting, and the independent directors of the Board approve equity grants to the CEO generally on the same day that the Committee meets. Restricted stock units awarded vest one-third on each of the anniversaries. Mr. Hufnagel's amount includes promotion grants of $1,000,117 in connection with his promotion to President and later in the year, President and CEO. Mses. Klimek's and Soriano's amounts each include a retention grant of $500,008. These grants were made to encourage retention of these key individuals while the Company was experiencing a CEO transition and beginning a strategic transformation. All promotional and retention grants have the Company’s standard three-year vesting schedule, as described above. 02/05/24
| | | 1,553 | 2024 PROXY STATEMENT | | 48 | | | |
TABLE OF CONTENTS Retirement, Deferred Compensation and Welfare Plans The NEOs in the United States participate in Wolverine Worldwide's medical and dental plans and receive life and disability insurance. In 2023, Messrs. Hufnagel, Stornant and Zwiers and Ms. Klimek also participated in the Wolverine Worldwide Employees' Pension Plan (a defined benefit plan) and Messrs. Hufnagel, Stornant, and Zwiers participated in the Wolverine World Wide, Inc. 409A Supplemental Executive Retirement Plan (an unfunded, non-qualified plan). For a description of the benefits under Wolverine Worldwide's retirement plans, see “Pension Plans and 2023 Pension Benefits” below. Ms. Soriano is located outside of the United States and participates in local medical, life and disability insurance plans and receives an annual retirement benefit payment consistent with the benefits generally made available to employees in the UK. All full-time employees of the Company in the United States, including the NEOs located in the United States, are also eligible to participate in one of Wolverine's 401(k) Plans (the “401(k) Plan”). Pursuant to the 401(k) Plan, employees, including the NEOs in the United States, may elect to defer a portion of their salary and receive a Company match on eligible deferrals of up to 3% of salary for 2023 (5.5% for those who do not participate in the Pension Plan), subject to limits set forth in the Internal Revenue Code of 1986, as amended. In 2016, the Company adopted the Deferred Compensation Plan. This plan allows directors, executives and other eligible senior employees of the Company to elect to defer a portion of their eligible compensation. Wolverine Worldwide may, but need not, credit a participant with an additional discretionary Company contribution. The Company adopted the Deferred Compensation Plan as a retention and recruitment tool to facilitate retirement savings and provide financial flexibility for key employees, and because many of the companies with which it competes for executive talent provide similar plans to their key employees. For a description of the benefits under the Deferred Compensation Plan, see “Non-Qualified Deferred Compensation” below. The Company generally provides limited perquisites to NEOs other than to account for relocation assignments. The Company feels the perquisites are necessary to provide a competitive total compensation package for each NEO. For details on perquisites, see footnote 5 to the “Summary Compensation Table” on page 54. Ms. Soriano also receives benefits generally made available to Company employees located in the U.K., a car and travel allowance, and tax equalization tied to her relocation to the U.K. when she was hired by the Company in 2018. POST-EMPLOYMENT COMPENSATION Each NEO is party to an Executive Severance Agreement that provides for certain payments and benefits upon termination of employment after a change in control of Wolverine Worldwide. The Board believes Executive Severance Agreements will motivate management to actively pursue a business transaction that is in the best interests of the shareholders, even if it could ultimately result in his or her job elimination, and also will promote management stability during the transition period accompanying a change in control. Each NEO is eligible to receive compensation if his or her employment is terminated within two years following a change in control of Wolverine Worldwide. Even following a change in control, an NEO does not receive payment under the Executive Severance Agreement if his or her employment terminates: Due to death or retirement in accordance with Wolverine Worldwide's policy or as otherwise agreed, For cause or disability, or By resignation of the NEO, other than for “good reason,” which is discussed under the heading “Benefits Triggered Upon a Change in Control.” NEOs may also be eligible under Wolverine Worldwide's retirement plans or equity plans to receive certain payments and benefits upon termination of employment or in connection with a change in control as described in the “Potential Payments Upon Termination or Change in Control” section of this Proxy Statement. Mr. Hufnagel is also party to an Employment Agreement under which he is eligible to receive certain payments and benefits if the Company terminates his employment, even if not following a change in control, other than for “cause” or if he terminates his employment for “good reason.” The Committee determined upon appointing Mr. Hufnagel as the President and CEO that, given the Company's strategic initiatives the Board asked him to lead, it was appropriate for the Company to enter into such arrangement. 02/09/24
| | | 3,672 | 2024 PROXY STATEMENT | | 49 | | | |
TABLE OF CONTENTS The Company includes accelerated retirement vesting provisions for equity awards, provided certain conditions are met, and for the payout of a prorated annual bonus for a qualifying retirement more than six months into the fiscal year. Details on these provisions and information on benefits payable to Mr. Hufnagel under his Employment Agreement, and to each of the NEOs under the Executive Severance Agreements, as well as information on the other retirement and equity plans of Wolverine Worldwide, are included in the “Potential Payments Upon Termination or Change in Control” section of this Proxy Statement. Upon termination of his employment with the Company, the Company made payments and offered benefits to Mr. Hoffman in accordance with his employment agreement; a narrative description of Mr. Hoffman’s employment agreement and actual payments and benefits provided to Mr. Hoffman are reflected in the “Potential Payments Upon Termination or Change in Control” section of this Proxy Statement. We asked shareholders to vote on a “say-on-pay” advisory vote on our executive compensation in 2023. Shareholders expressed substantial support for the compensation of our named executive officers, with approximately 98% of the votes cast for the “say-on-pay” advisory vote. The Committee carefully evaluated the results of the 2023 advisory vote. The Committee also considers many other factors in evaluating our executive compensation programs as discussed in this Compensation Discussion and Analysis, including the Committee's assessment of total shareholder return, the interaction of our compensation programs with our corporate business objectives, evaluations of our programs by external consultants, and review of peer group and survey data, each of which is evaluated in the context of the Committee's fiduciary duty to act as the directors determine to be in shareholders' best interests. While each factor bore on the Committee's decisions regarding our named executive officers' compensation, the Committee made no changes to our executive compensation program and policies directly as a result of the 2023 say-on-pay advisory vote. COMPENSATION SETTING PROCESS The Committee goes through a rigorous process in setting performance targets, including a careful review of the Company's prior year business and financial performance, current year operating plan, and future expectations. The Committee engages with management in this process over several months leading up to setting final annual bonus and three-year performance targets in February. Competitive Philosophy and Competitive Market Data When making compensation recommendations and decisions, the Committee considers the CEO's assessment of the performance of each NEO, other than himself; the performance of the individual and the individual's respective business unit or function; the scope of the individual's responsibilities, years of experience with the Company (or in similar positions with other companies), skills and knowledge; market compensation data; market and economic conditions; Company performance; retention considerations; and Wolverine Worldwide's compensation philosophy (collectively, the “compensation factors”). The Committee considers these compensation factors both subjectively and objectively, and no single factor or combination of factors is determinative. With respect to CEO compensation, the Committee seeks to set compensation in line with experience and the anticipated market median for a given year. The Committee uses market surveys and Peer Group (as defined below) information provided by its compensation consultant as market reference points. The Committee also considers information the Company learns through recruiting NEOs and the experience levels and responsibilities of NEOs prior to joining the Company as reference points in setting NEO compensation. As part of its competitive data review in connection with determining 2023 compensation, the Committee considered information presented by its consultant Frederic W. Cook & Co. (“FW Cook”) based on publicly-disclosed Peer Group information and on the Willis Towers Watson (WTW) CDB Executive Compensation Survey Report (General Industry and Retail/Wholesale). 04/29/24
| | | 353 | 2024 PROXY STATEMENT | | 50 | | | 02/09/25
|
TABLE OF CONTENTS Below is the peer group used in late 2022 and early 2023 in connection with 2023 compensation decisions. In determining the Peer Group, the Committee considered each potential peer company's industry, channels of distribution, revenue and market capitalization. The Company also considered the typicality of a company's pay practices, excluding companies whose chief executive may not receive market compensation because of a founder relationship, family ownership position, or other similar relationships. | | | 4,413 | Abercrombie & Fitch Co. | | | Chico's FAS, Inc. | | | G-III Apparel Group, Ltd. | | | Hanesbrands Inc. | | | The Children's Place, Inc. | | | American Eagle Outfitters Inc. | | | Deckers Outdoor Corporation | | | Genesco Inc. | | | Kontoor Brands, Inc. | | | | | | Caleres, Inc. | | | Designer Brands, Inc. | | | Gildan Activewear, Inc. | | | Skechers USA, Inc. | | | | | | Carter's, Inc. | | | Foot Locker, Inc. | | | Guess?, Inc. | | | Tapestry, Inc. | | | | | | |
Within the framework of the Company's executive compensation program, the CEO recommends the level of base salary, annual bonus, long-term incentive compensation, equity awards and other compensation components for his direct reports, including the other NEOs. The CEO bases his recommendation upon his assessment of the compensation factors applicable to each NEO. The CEO considers these compensation factors both objectively and subjectively, and no single factor is determinative. The Committee discusses these recommendations with the CEO prior to setting the compensation for each NEO, other than the CEO. The Committee, however, ultimately determines all compensation for NEOs other than the CEO, whose compensation is determined by the independent directors as a whole. Compensation Consultant Role FW Cook was first engaged as the Committee's independent compensation consultant in 2016 and reports directly to the Committee. The Committee determines the scope of engagement and may replace the consultant or hire additional consultants at any time. The Committee has evaluated FW Cook's independence under the rules established by the NYSE and has determined that FW Cook is “independent” as defined by NYSE rules. In addition, the Committee has evaluated whether the engagement of FW Cook raised any conflicts of interest and has determined that no such conflicts of interest exist. At the Committee's invitation, a representative of FW Cook generally attends all Committee meetings and also communicates with the Committee Chair and management regularly between meetings. However, the Committee makes all decisions regarding NEO compensation. FW Cook provides various executive compensation services to the Committee pursuant to a consulting agreement with the Committee. Generally, these services include advising the Committee on the principal aspects of the Company's executive compensation program, evolving industry practices, and providing market information and analysis regarding the competitiveness of the Company's program design. During 2023, FW Cook performed the following specific services: Attended Committee meetings, as requested Reviewed the Company's peer group and advised the Committee on the composition of the peer group Reviewed survey data for competitive comparisons Provided market data and recommendations on CEO and other NEO compensation Advised the Committee on market trends related to compensation policies and programs Proactively advised the Committee on best practice approaches for governance features of executive compensation programs Reviewed the Compensation Discussion & Analysis and other executive compensation related disclosures included in the Company's Proxy Statement The total fees the Company paid to FW Cook for services to the Committee in 2023 were $131,485, less than 1% of FW Cook's total consulting income during the same period. The Company did not pay or incur any other fees to or with FW Cook. TABLE OF CONTENTS OTHER COMPENSATION POLICIES AND PRACTICES NEO Stock Ownership Guidelines Each NEO, as well as each non-employee director, must attain (and maintain) a minimum stock ownership level prior to being able to gift or sell any Company stock. The equity that qualifies for determining the NEOs’ minimum stock ownership level includes owned shares and unvested restricted stock units that vest based on time (up to a maximum of value of 50% of the applicable ownership requirement), but excludes performance shares and units and unexercised options (or any portion thereof, such as the current “in the money” value). During 2023, each NEO complied with the requirements of these guidelines by not selling or transferring shares while their respective stock ownership levels were below the minimum ownership level. | CEO | | | 6x Annual Salary | | | President | | | 3x Annual Salary | | | Other NEOs | | | 2x Annual Salary | | | Non-Employee Directors | | | 6x Annual Cash Retainer | |
Stock Hedging and Pledging Policies Under the Company's Insider Trading Policy, all directors, officers and other employees are prohibited from engaging in any hedging transactions involving Company securities beneficially owned by them. The Company also considers it inappropriate for any such person to engage in speculative transactions in the Company's securities, including short sales, publicly traded options, margin accounts and pledges and standing and limit orders. Also, all directors, officers and other employees are prohibited from pledging Company securities as collateral for a loan. The Company has adopted a Policy for Recovery of Incentive Compensation (“Clawback Policy”) which empowers the Board or a committee of the Board to seek recovery of specified incentive compensation covering both cash and equity received by executive officers under specific circumstances where there is a material restatement of the Company's financial results that would have led to a lower level of incentive compensation payout. On July 31, 2023, the Company revised the Clawback Policy to comply with the requirements of NYSE Listing Standard 303A.14 implementing Rule 10D-1 under the Exchange Act. In the event the Company is required to prepare an accounting restatement of the Company’s financial statements due to material non-compliance with any financial reporting requirement under the federal securities laws, the Company will recover, on a reasonably prompt basis, the excess incentive-based compensation received by any covered executive, including the NEOs, during the prior three fiscal years that exceeds the amount that the executive otherwise would have received had the incentive-based compensation been determined based on the restated financial statements. Impact of Accounting and Tax Treatments on Compensation As one of the factors in the review of compensation matters, the Committee considers the anticipated tax treatment to the Company. Under Section 162(m) of the Internal Revenue Code, a limitation exists on the deductibility of compensation paid to certain “covered employees,” including all of our NEOs, in excess of $1 million per year and thus we are unable to deduct compensation payable to our NEOs in excess of such limit. While the Committee considers the impact of this tax treatment, the primary factors influencing program design are the support of our business objectives and the Committee’s commitment to structuring the Company’s executive compensation programs in a manner designed to align pay with performance. Accordingly, the Committee retains flexibility to structure our compensation programs in a manner that is not tax-deductible in order to achieve a strategic result that the Committee determines to be more appropriate. TABLE OF CONTENTS Compensation and Human Capital Committee
Report The Committee has reviewed and discussed with management the information provided under the heading “Compensation Discussion and Analysis.” Based on this review and discussion, the Committee recommended to the Board of Directors that the Company include the Compensation Discussion and Analysis section in this Proxy Statement and incorporate it by reference into the Company's Annual Report on Form 10-K. Respectfully submitted, Kathleen Wilson-Thompson (Chair)
William K. Gerber
David Kollat
DeMonty Price Compensation and Human Capital Committee Interlocks and Insider Participation. During fiscal year 2023, none of the members of the Compensation and Human Capital Committee was an officer or employee of the Company, was a former officer of the Company, nor had a relationship with the Company requiring disclosure as a related party transaction under Item 404 of Regulation S-K of the Securities Act of 1933. None of the Company's executive officers served on the compensation committee or board of directors of another entity whose executive officer(s) served as a director on the Company's Board or on the Compensation and Human Capital Committee. TABLE OF CONTENTS Summary Compensation Table
| Christopher Hufnagel
President and
CEO, Wolverine
Worldwide | | | | | | | | | | | | | | | | | | | | | | | | | | | 2023 | | | $813,672 | | | $— | | | $1,650,032 | | | $300,000 | | | $366,393 | | | $44,380 | | | $3,174,477 | | | 2022 | | | $606,377 | | | $— | | | $665,652 | | | $97,162 | | | $— | | | $43,405 | | | $1,412,596 | | | Amy Klimek
Executive Vice
President, Chief
Human Resources
Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | 2023 | | | $465,199 | | | $— | | | $975,015 | | | $66,998 | | | $97,489 | | | $37,157 | | | $1,641,858 | | | Isabel Soriano6
President,
International Group | | | 2023 | | | $543,831 | | | $— | | | $1,073,356 | | | $81,688 | | | $— | | | $1,015,643 | | | $2,714,518 | | | 2022 | | | $463,850 | | | $— | | | $454,094 | | | $280,390 | | | $— | | | $991,681 | | | $2,190,015 | | | 2021 | | | $480,641 | | | $— | | | $597,096 | | | $326,554 | | | $— | | | $1,075,445 | | | $2,479,736 | | | Michael D. Stornant
Executive Vice
President,
CFO, Treasurer and
Chief Accounting Officer | | | 2023 | | | $695,250 | | | $— | | | $1,192,022 | | | $112,978 | | | $417,090 | | | $33,304 | | | $2,450,644 | | | 2022 | | | $691,356 | | | $— | | | $1,113,295 | | | $49,881 | | | $— | | | $31,931 | | | $1,886,463 | | | 2021 | | | $657,865 | | | $— | | | $1,819,680 | | | $577,880 | | | $86,187 | | | $30,883 | | | $3,172,495 | | | James D. Zwiers
Executive Vice
President and
President, Global
Operations Group | | | 2023 | | | $716,000 | | | $— | | | $1,075,018 | | | $161,100 | | | $440,351 | | | $44,047 | | | $2,436,516 | | | 2022 | | | $711,962 | | | $— | | | $988,296 | | | $48,057 | | | $— | | | $37,310 | | | $1,785,625 | | | 2021 | | | $683,856 | | | $— | | | $1,578,188 | | | $481,625 | | | $70,550 | | | $38,953 | | | $2,853,172 | | | Brendan Hoffman
Former
President and
CEO, Wolverine
Worldwide | | | 2023 | | | $634,615 | | | $— | | | $5,800,021 | | | $— | | | $— | | | $1,144,079 | | | $7,578,715 | | | 2022 | | | $997,308 | | | $— | | | $5,183,029 | | | $144,007 | | | $— | | | $195,310 | | | $6,519,654 | | | 2021 | | | $924,231 | | | $— | | | $5,083,847 | | | $1,073,446 | | | $— | | | $113,015 | | | $7,194,539 | |
1.
| Includes any amounts deferred under the Company's qualified 401(k) plan or Deferred Compensation Plan. |
2.
| Includes the grant date fair value of restricted stock unit awards, and performance unit awards, as follows for 2023: |
| Hufnagel
| | | $1,260,020 | | | $390,012 | | | $1,650,032 | | | Klimek | | | $690,011 | | | $285,004 | | | $975,015 | | | Soriano | | | $743,353 | | | $330,003 | | | $1,073,356 | | | Stornant | | | $476,815 | | | $715,207 | | | $1,192,022 | | | Zwiers | | | $430,007 | | | $645,011 | | | $1,075,018 | | | Hoffman | | | $1,740,012 | | | $4,060,009 | | | $5,800,021 | |
| Restricted stock units were valued using the closing market price of Wolverine Worldwide common stock on the date of the grant of the respective award. Performance units were valued using the closing market price of Wolverine Worldwide common stock on the date of grant of the respective award and assuming target performance for all performance periods. Assuming maximum payout, the aggregate grant date fair value of performance units awarded in 2023 for each NEO (and, in parentheses, the maximum value is combined with the grant date fair value of restricted stock unit awards and restricted stock awards for 2023) would have been $8,120,017; ($9,860,029) for Mr. Hoffman; $780,023 ($2,040,043) for Mr. Hufnagel, $660,006 ($1,403,359) for Ms. Soriano; $1,430,414 ($1,907,229) for Mr. Stornant; $1,290,022 |
TABLE OF CONTENTS ($1,720,029) for Mr. Zwiers; and $570,008 ($1,260,019) for Ms. Klimek. Restrictions on such performance unit awards will lapse in the February following the last year of the performance period, if at all, based on the Company's performance for the period (capped at 200%). The actual value of shares that vest is also dependent on the stock price at the time of vesting. For additional valuation assumptions, see the Stock Based Compensation footnote to Wolverine Worldwide's Consolidated Financial Statements for the fiscal year ended December 30, 2023 included in its Form 10-K for this year. 3.
| Reflects the sum of performance bonus and individual bonus amounts, as adjusted by any applicable modifier, earned in 2023, 2022 and 2021, respectively, and paid in 2024, 2023 and 2022 respectively. |
4.
| All amounts in this column reflect, where applicable, the aggregate change in the actuarial present value of the accumulated benefits under the Wolverine Worldwide Employees' Pension Plan (“Pension Plan”) and Wolverine World Wide, Inc. 409A Supplemental Executive Retirement Plan (“SERP”) for Messrs. Stornant, Hufnagel, Zwiers, and Klimek (Pension Plan only). The amounts in the table were determined using assumptions consistent with those used in Wolverine Worldwide's Consolidated Financial Statements for each respective year. See the “Pension Plans and 2023 Pension Benefits” section starting on page 61. |
5.
| The amounts listed in this column for 2023 include Wolverine Worldwide's contributions to the accounts of the NEOs under Wolverine Worldwide's 401(k) plans (or, in the case of Ms. Soriano, a payment in lieu of a retirement plan contribution) and the Wolverine Worldwide Deferred Compensation Plan, payments made by Wolverine Worldwide for the premiums on certain life insurance policies, tax, housing/relocation expenses and estate planning services and health care reimbursements in the amounts listed in the table below. Unlike the other NEOs, Ms. Soriano is not a participant in the Company's Pension Plan, and instead received a retirement benefit payment. |
| Hufnagel | | | $9,900 | | | $11,000 | | | $22,625 | | | $855 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | Klimek | | | $9,900 | | | $11,000 | | | $15,720 | | | $537 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | Soriano | | | $43,506 | | | $50,510 | | | $15,269 | | | $1,599 | | | $128,262 | | | $0 | | | $0 | | | $776,497 | | | $0 | | | Stornant | | | $9,900 | | | $0 | | | $20,136 | | | $3,268 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | Zwiers | | | $9,900 | | | $11,204 | | | $19,740 | | | $3,203 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | Hoffman | | | $0 | | | $6,570 | | | $0 | | | $0 | | | $7,4301 | | | $0 | | | $0 | | | $0 | | | $1,130,0792 | |
1.
| Temporary housing and costs related to relocation. |
2.
| Termination payments and benefits paid out under Mr. Hoffman's separation agreement. For details, please see the “Potential Payments upon
|
Termination or Change in Control” section of this Proxy Statement. 6.
| The cash compensation for Ms. Soriano is paid in Pounds Sterling. Her cash compensation was converted into U.S. dollars using the fiscal year-end rate of $1.35 for fiscal year 2021, $1.20 for fiscal year 2022 and 1.27 for fiscal year 2023. |
TABLE OF CONTENTS Grants of Plan-Based Awards in
Fiscal Year 2023 The following table provides information concerning each grant of an award made to the NEOs in fiscal year 2023:
| Hufnagel | | | Annual Bonus | | | | | | $488,203 | | | $976,406 | | | $1,952,812 | | | | | | | | | | | | | | | | | | FY23-FY25
Performance Units | | | 02/08/2023 | | | | | | | | | | | | 12,940 | | | 25,880 | | | 51,760 | | | | | | $390,012 | | | Restricted Units | | | 02/08/2023 | | | | | | | | | | | | | | | | | | | | | 17,253 | | | $260,003 | | | Restricted Units | | | 07/31/2023 | | | | | | | | | | | | | | | | | | | | | 39,464 | | | $500,009 | | | Restricted Units | | | 10/30/2023 | | | | | | | | | | | | | | | | | | | | | 61,051 | | | $500,008 | | | Klimek | | | Annual Bonus | | | | | | $116,300 | | | $232,599 | | | $465,199 | | | | | | | | | | | | | | | | | | FY23-FY25
Performance
Units | | | 02/08/2023 | | | | | | | | | | | | 9,456 | | | 18,912 | | | 37,824 | | | | | | $285,004 | | | Restricted Units | | | 02/08/2023 | | | | | | | | | | | | | | | | | | | | | 12,608 | | | $190,003 | | | Restricted Units | | | 10/30/2023 | | | | | | | | | | | | | | | | | | | | | 61,051 | | | $500,008 | | | Soriano | | | Annual Bonus | | | | | | $141,310 | | | $282,621 | | | $565,242 | | | | | | | | | | | | | | | | | | FY23-FY25
Performance
Units | | | 02/08/2023 | | | | | | | | | | | | 10,949 | | | 21,898 | | | 43,796 | | | | | | $330,003 | | | Restricted Units | | | 02/08/2023 | | | | | | | | | | | | | | | | | | | | | 14,599 | | | $220,007 | | | Restricted Units | | | 07/31/2023 | | | | | | | | | | | | | | | | | | | | | 1,842 | | | $23,338 | | | Restricted Units | | | 10/30/2023 | | | | | | | | | | | | | | | | | | | | | 61,051 | | | $500,008 | | | Stornant | | | Annual Bonus | | | | | | $225,956 | | | $451,913 | | | $903,825 | | | | | | | | | | | | | | | | | | FY23-FY25
Performance
Units | | | 02/08/2023 | | | | | | | | | | | | 23,730 | | | 47,459 | | | 94,918 | | | | | | $715,207 | | | Restricted Units | | | 02/08/2023 | | | | | | | | | | | | | | | | | | | | | 31,640 | | | $476,815 | | | Zwiers | | | Annual Bonus | | | | | | $214,800 | | | $429,600 | | | $859,200 | | | | | | | | | | | | | | | | | | FY23-FY25
Performance
Units | | | 02/08/2023 | | | | | | | | | | | | 21,401 | | | 42,801 | | | 85,602 | | | | | | $645,011 | | | Restricted Units | | | 02/08/2023 | | | | | | | | | | | | | | | | | | | | | 28,534 | | | $430,007 | | | Hoffman | | | Annual Bonus | | | | | | $380,769 | | | $761,538 | | | $1,523,077 | | | | | | | | | | | | | | | | | | FY23-FY25
Performance
Units | | | 02/08/2023 | | | | | | | | | | | | 134,705 | | | 269,410 | | | 538,820 | | | | | | $4,060,009 | | | Restricted Units | | | 02/08/2023 | | | | | | | | | | | | | | | | | | | | | 115,462 | | | $1,740,012 | |
1.
| Estimated payout levels relating to the performance bonus and strategic priorities bonus. Maximum amount assumes stretch revenue and pretax earnings performance. For a description of these bonuses and the payouts under them, see pages 44-47. Ms. Soriano's payout levels have been converted to U.S. dollars from Pounds Sterling based on the fiscal year-end exchange rate of 1.27. |
2.
| Estimated payout levels as of the grant date of performance stock units granted under the Stock Incentive Plan of 2016, as amended (the “Stock Incentive Plan of 2016”). Restrictions on such performance unit awards typically lapse in the February following the last year of the performance period, if at all, based on the Company's performance for the period (capped at 200%). The actual value of shares that vest is also dependent on the stock price at the time of vesting. The Company accrues, but does not pay, dividends on the performance shares during the performance period. At the end of the performance period, the Company will pay to the NEO the accrued dividends (if any) on the performance units that vest. For a description of the performance units granted in 2023 under the Stock Incentive Plan of 2016, see pages 47. |
3.
| The Company awarded service-based restricted stock unit awards in February 2023 under the Stock Incentive Plan of 2016 to all NEOs. One third of the shares vest on each of the first three anniversaries of the date of grant of the award. All restricted stock units vest upon an NEO's death, disability or retirement. Holders of restricted stock units and awards are entitled to receive dividend equivalents on restricted stock units and awards. Mr. Hufnagel's grants include promotion grants on July 31, 2023 and October 30, 2023. Mses. Klimek's and Soriano's grants each include an October 30, 2023 retention grant, and Ms. Soriano's grants include a July 31, 2023 promotion grant. |
4.
| Represents the award date fair value for performance stock units and service-based stock unit awards made in fiscal year 2023, determined as described in footnote 2 to the “Summary Compensation Table.” |
TABLE OF CONTENTS Outstanding Equity Awards at
2023 Fiscal Year-End The following table provides information concerning options and stock awards that have not vested for each NEO outstanding as of December 30, 2023:
| Hufnagel | | | | | | | | | | | | | | | | | | | | | | | | | | | Various | | | | | | | | | | | | 134,980 | | | $1,199,972 | | | | | | | | | Various | | | | | | | | | | | | | | | | | | 82,588 | | | $734,207 | | | 02/11/14 | | | 17,022 | | | $27.13 | | | 02/10/24 | | | | | | | | | | | | | | | 02/11/15 | | | 16,789 | | | $28.00 | | | 02/10/25 | | | | | | | | | | | | | | | 02/10/16 | | | 32,294 | | | $16.51 | | | 02/09/26 | | | | | | | | | | | | | | | Soriano | | | | | | | | | | | | | | | | | | | | | | | | | | | Various | | | | | | | | | | | | 87,560 | | | $778,408 | | | | | | | | | Various | | | | | | | | | | | | | | | | | | 29,638 | | | $263,482 | | | Klimek | | | | | | | | | | | | | | | | | | | | | | | | | | | Various | | | | | | | | | | | | 86,019 | | | $764,709 | | | | | | | | | Various | | | | | | | | | | | | | | | | | | 27,376 | | | $243,373 | | | 02/10/16 | | | 10,214 | | | $16.51 | | | 02/09/26 | | | | | | | | | | | | | | | 07/13/16 | | | 18,676 | | | $22.92 | | | 07/12/26 | | | | | | | | | | | | | | | Stornant | | | | | | | | | | | | | | | | | | | | | | | | | | | Various | | | | | | | | | | | | 56,643 | | | $503,556 | | | | | | | | | Various | | | | | | | | | | | | | | | | | | 66,387 | | | $590,180 | | | 02/11/14 | | | 11,912 | | | $27.13 | | | 02/10/24 | | | | | | | | | | | | | | | 02/11/15 | | | 11,765 | | | $28.00 | | | 02/10/25 | | | | | | | | | | | | | | | 06/12/15 | | | 12,687 | | | $29.31 | | | 06/11/25 | | | | | | | | | | | | | | | 02/10/16 | | | 70,948 | | | $16.51 | | | 02/09/26 | | | | | | | | | | | | | | | Zwiers | | | | | | | | | | | | | | | | | | | | | | | | | | | Various | | | | | | | | | | | | 50,532 | | | $449,229 | | | | | | | | | Various | | | | | | | | | | | | | | | | | | 59,590 | | | $529,755 | | | 02/11/15 | | | 33,514 | | | $28.00 | | | 02/10/25 | | | | | | | | | | | | | | | 02/10/16 | | | 64,465 | | | $16.51 | | | 02/09/26 | | | | | | | | | | | | | | | Hoffman | | | | | | | | | | | | | | | | | | | | | | | | | | | Various | | | | | | | | | | | | — | | | $0 | | | | | | | | | Various | | | | | | | | | | | | | | | | | | 366,303 | | | $3,256,434 | |
TABLE OF CONTENTS 1.
| The following table sets forth the vesting dates for the unvested service-based restricted stock or stock unit awards of each NEO as of December 30, 2023: |
| Hufnagel | | | | | | | | | 02/05/24 | | | 1,553 | | | 02/08/24 | | | 10,751 | | | 02/09/24 | | | 3,672 | | | 04/29/24 | | | 353 | | | 07/31/24 | | | 13,155 | | | 10/30/24 | | | 20,351 | | | 02/08/25 | | | 5,751 | | | 02/09/25 | | | 4,413 | | | 07/31/25 | | | 13,154 | | | 10/30/25 | | | 20,350 | | | 02/08/26 | | | 5,751 | | | 02/09/26 | | | 2,221 | | | 07/31/26 | | | 13,155 | | | 10/30/26 | | | 20,350 | | | Klimek | | | | | | | | | 02/05/24 | | | 1,736 | | | 02/08/24 | | | 4,203 | | | 02/09/24 | | | 3,905 | | | 10/30/24 | | | 20,351 | | | 02/08/25 | | | 4,202 | | | 02/09/25 | | | 4,609 | | | 10/30/25 | | | 20,350 | | | 02/08/26 | | | 4,203 | | | 02/09/26 | | | 2,110 | | | 10/30/26 | | | 20,350 | | | Soriano | | | | | | | | | 02/05/23
| | | 1,096
| | | 02/06/23
| | | 1,035
| | | 02/09/23
| | | 2,310
| | | 08/02/23
| | | 260
| | | 02/05/24 | | | 1,096 | | | 02/08/24 | | | 4,867 | | | 02/09/24 | | | 2,836 | | | 07/31/24 | | | 614 | | | 08/02/24 | | | 390 | | | 10/30/24 | | | 20,351 | | | 02/08/25 | | | 4,866 | | | 02/09/25 | | | 3,467 | | | 07/31/25 | | | 614 | | | 08/02/25 | | | 391 | | | 10/30/25 | | | 20,350 | | | 02/08/26 | | | 4,866 | | | 02/09/26 | | | 1,888 | | | 07/31/26 | | | 614 | | | 10/30/26 | | | 20,350 | |
TABLE OF CONTENTS | Stornant | | | | | | | | | 02/05/23
| | | 3,526
| | | 02/06/23
| | | 3,328
| | | 02/09/23
| | | 6,130
| | | 02/05/24 | | | 3,526 | | | 02/08/24 | | | 10,547 | | | 02/09/24 | | | 7,653 | | | 02/08/25 | | | 10,546 | | | 02/09/25 | | | 9,196 | | | 02/08/26 | | | 10,547 | | | 02/09/26 | | | 4,628 | |
| Zwiers | | | | | | | 2023 PROXY STATEMENT
| | 60
| | | 02/05/24 | | | 3,248 | | | 02/08/24 | | | 9,512 | | | 02/09/24 | | | 6,636 | | | 02/08/25 | | | 9,511 | | | 02/09/25 | | | 8,005 | | | 02/08/26 | | | 9,511 | | | 02/09/26 | | | 4,109 | |
2.
| The dollar values are calculated using a per share stock price of $8.89, the closing price of Wolverine Worldwide common stock on December 29, 2023, the last business day of fiscal year 2023. |
3.
| Following the end of the applicable performance period, performance units vest depending upon the Company's achievement of the relevant performance criteria. Shares actually vested for the 2021-2023 cycle are included in the “Number of Shares or Units of Stock That Have Not Vested” column. Performance between threshold and target level was assumed for the 2022-2024 cycle and performance at target was assumed for the 2023-2025 cycle. For Mr. Hufnagel, shares included for the 2022-2024 cycle were adjusted to reflect the structure of the performance award agreement for that cycle. |
TABLE OF CONTENTS | Zwiers
| | | | | | | | | 02/05/23
| | | 3,247
| | | 02/05/24
| | | 3,248
| | | 02/06/23
| | | 3,065
| | | 02/09/23
| | | 5,336
| | | 02/09/24
| | | 6,636
| | | 02/09/25
| | | 8,005
| | | 02/09/26
| | | 4,1092.
| The dollar values are calculated using a per share stock price of $10.93, the closing price of Wolverine Worldwide common stock on December 30, 2022, the last business day of fiscal year 2022. |
3.
| Following the end of the applicable performance period, performance units vest depending upon the Company's achievement of the relevant performance criteria. Shares actually vested for the 2021-2022 cycle are included in the “Number of Shares or Units of Stock That Have Not Vested” column. Performance between threshold and target level was assumed for both the 2021-2023 cycle and the 2022-2024 cycle. |
TABLE OF CONTENTS
Option Exercises and Stock
Vested in Fiscal Year 2022
| Hoffman | | | — | | | — | | | 54,739 | | | $1,349,878 | | | Hufnagel | | | — | | | — | | | 15,794 | | | $418,021 | | | Soriano | | | — | | | — | | | 12,686 | | | $319,767 | | | Stornant | | | — | | | — | | | 33,459 | | | $887,971 | | | Zwiers | | | — | | | — | | | 29,882 | | | $792,685 | |
1.
| The Company calculates the dollar values using the closing price of Wolverine Worldwide common stock on the date of vesting. |
TABLE OF CONTENTS
Pension Benefits
Wolverine Worldwide maintains the following defined benefit retirement plans covering Messrs. Hufnagel, Stornant and Zwiers:
TABLE OF CONTENTS Pension Benefits Wolverine Worldwide maintains the following defined benefit retirement plans: (1) the Wolverine Worldwide Employees' Pension Plan (“Pension Plan”), which is a funded and tax-qualified defined benefit plan under the Internal Revenue Code that covers eligible employees, and (2) the Wolverine World Wide, Inc. 409A Supplemental Executive Retirement Plan (“SERP”), which is an unfunded, non-qualified plan that covers individuals recommended by the CEO and approved by the Compensation and Human Capital Committee. Messrs. Hufnagel, Stornant, and Zwiers participate in the Pension Plan and SERP and Ms. Klimek participates in the Pension Plan. Participants vest in the Pension Plan after five years of qualifying service. Subject to the limitations imposed by the Internal Revenue Code, the Pension Plan generally pays a monthly benefit in an amount equal to a percentage of the participant's final average monthly earnings multiplied by his or her number of years of service less a monthly social security allowance. For purposes of this benefits formula, the Pension Plan caps years of service at 30 (25 for SERP participants), and the percentages of final average monthly earnings are 1.6% (2.0% for SERP participants). “Earnings” under the Pension Plan generally includes all W-2 compensation and pre-tax benefit plan deferrals other than taxable fringe benefits and deferred compensation, and for 2023 was capped at $330,000, the IRS limit applicable to tax qualified plans. Upon retirement, a participant may elect to receive the benefit in the form of a life annuity, 5 or 10-year certain and life annuities, or joint and 50%, joint and 75%, or joint and 100% survivor annuities. The payments are actuarially adjusted based on the participant's election. Any election, other than an election to receive life annuity benefits, reduces the monthly benefit payable. The “normal” age at which benefits may be drawn under the Pension Plan generally includes all W-2 compensation and pre-tax benefit plan deferrals other than taxable fringe benefits and deferred compensation, and for 2022 was capped at $305,000, the IRS limit applicable to tax qualified plans. Upon retirement, a participant may elect to receive the benefit in the form of a life annuity, 5 or 10-year certain and life annuities, or joint and 50%, joint and 75%, or joint and 100% survivor annuities. The payments are actuarially adjusted based on the participant's election. Any election, other than an election to receive life annuity benefits, reduces the monthly benefit payable. The “normal” age at which benefits may be drawn under the plan is 65.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN Messrs. Hufnagel, Stornant and Zwiers participate in the SERP, which provides retirement benefits above amounts available under the Company's tax qualified Pension Plan. The SERP benefit generally equals the difference between the participant's retirement benefit under the Pension Plan and the benefits the participant would have received if there were no IRS imposed cap on earnings when calculating the Pension Plan benefit. The SERP caps years of service at 25 in calculating a participant's benefit. The SERP also allows a retired participant who has five years of service to draw earlier (beginning at age 55) and on different terms than under the Pension Plan. A participant's earnings percentage multiplier is the same under the SERP as it is under the Pension Plan. The Compensation and Human Capital Committee may grant additional deemed years of service under the SERP to a participant, subject to the cap of 25 years. The full benefit of any additional years of deemed service is paid under the SERP. If a retired participant draws the SERP benefit prior to age 65, the reduction factor is 0.333% for each month prior to age 60, and 0.1666% for each month between age 60 and age 65. As of the end of fiscal year 2023, Mr. Stornant and Mr. Zwiers are the only NEOs eligible to retire and begin drawing benefits under the SERP. SERP benefits are paid monthly, and the SERP has a lump sum payment option which may apply to certain terminations of employment after a change in control or, if elected, upon death. The SERP also includes a disability benefit and a death benefit payable to the participant's designated beneficiary if the participant dies before retiring. The SERP provides for lump sum payments equal to 125% of the net present value of accrued benefits without regard to any reduction for early payment to participants who resign for good reason or are terminated by Wolverine other than for cause or due to death or disability within two years after a change in control. The SERP also contains non-competition, confidentiality and employee non-solicitation provisions in favor of Wolverine Worldwide. Under the SERP non-competition provisions, a participant is not entitled to any benefit payment if the participant enters into certain relationships with a competing business prior to the date on which such benefit payment is due. If the participant's employment is terminated for serious misconduct, or if Wolverine Worldwide cannot collect under an insurance policy purchased to fund SERP benefits for certain reasons, the Company may terminate a participant's benefits under the SERP. Wolverine Worldwide may terminate the SERP or stop further accrual of SERP benefits for a participating NEO at any time, but termination will not affect previously accrued benefits. TABLE OF CONTENTS PENSION BENEFITS IN FISCAL YEAR 2023 The following table provides for each NEO certain information concerning each plan that provides for payments or other benefits at, following, or in connection with retirement: | Hufnagel | | | SERP | | | 15 | | | $864,343 | | | — | | | Pension | | | 15 | | | $567,487 | | | — | | | Klimek2 | | | SERP | | | — | | | — | | | — | | | Pension | | | 19 | | | $431,656 | | | — | | | Soriano2 | | | SERP | | | — | | | — | | | — | | | Pension | | | — | | | — | | | — | | | Stornant | | | SERP | | | 25 | | | $2,719,932 | | | — | | | Pension | | | 25 | | | $1,288,786 | | | — | | | Zwiers | | | SERP | | | 25 | | | $2,981,468 | | | — | | | Pension | | | 25 | | | $1,167,711 | | | — | | | Hoffman 3 | | | SERP | | | — | | | — | | | — | | | Pension | | | — | | | — | | | — | |
1.
| These values are as of December 30, 2023, and are calculated assuming the participants will commence their benefits at age 65 (or current age if older), and that those benefits will be paid in the form according to each participant's 409A election and use the PRI-2012 mortality tables for males and females (white collar for SERP and no collar for Pension Plan), projected forward from base year 2012 with generational projection using an unmodified MP-2021 projection scale, with contingent annuitant mortality tables applied after the death of the participant and using the following discount rates: 5.28% Pension Plan; 5.33% SERP. |
2.
| Ms. Soriano does not participate in the SERP which provides retirement benefits above amounts available under the Company's tax qualified Pension Plan. The SERP benefit generally equals the difference between the participant's retirement benefit under theor Pension Plan and the benefits the participant would have received if there were no IRS imposed cap on earnings when calculating the Pension Plan benefit. The SERP caps years of service at 25Ms. Klimek does not participate in calculating a participant's benefit. The SERP also allows a retired participant who has five years of service to draw earlier (beginning at age 55) and on different terms than under the Pension Plan. A participant's earnings percentage multiplier is the same under the SERP as it is under the Pension Plan. The Compensation Committee may grant additional deemed years of service under the SERP to a participant, subject to the cap of 25 years. The full benefit of any additional years of deemed service is paid under the SERP. |
3.
If a retired participant draws the SERP benefit prior to age 65, the reduction factor is 0.333% for each month prior to age 60, and 0.1666% for each month between age 60 and age 65. As of the end of fiscal year 2022,
| Mr. Stornant is the only NEO eligible to retire and begin drawing benefits under the SERP.SERP benefits are paid monthly, and the SERP has a lump sum payment option which may apply to certain terminations of employment after a changeHoffman did not participate in control or, if elected, upon death. The SERP also includes a disability benefit and a death benefit payable to the participant's designated beneficiary if the participant dies before retiring. The SERP provides for lump sum payments equal to 125% of the net present value of accrued benefits without regard to any reduction for early payment to participants who resign for good reason or are terminated by Wolverine other than for cause or due to death or disability within two years after a change in control.
The SERP also contains non-competition, confidentiality and employee non-solicitation provisions in favor of Wolverine Worldwide. Under the SERP non-competition provisions, a participant is not entitled to any benefit payment if the participant enters into certain relationships with a competing business prior to the date on which such benefit payment is due. If the participant's employment is terminated for serious misconduct, or if Wolverine Worldwide cannot collect under an insurance policy purchased to fund SERP benefits for certain reasons, the Company may terminate a participant's benefits under the SERP. Wolverine Worldwide may terminate the SERP or stop further accrual of SERP benefits for a participating NEO at any time, but termination will not affect previously accrued benefits.
| 2023 PROXY STATEMENT
| | 63
| Pension Plan. |
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2024 PROXY STATEMENT
| | PENSION BENEFITS IN FISCAL YEAR 202262The following table provides for each NEO certain information concerning each plan that provides for payments or other benefits at, following, or in connection with retirement:
| Hoffman2 | | | SERP | | | — | | | — | | | — | | | | | | Pension | | | — | | | — | | | — | | | Hufnagel | | | SERP | | | 14 | | | $612,244 | | | — | | | Pension | | | 14 | | | $453,193 | | | — | | | Soriano2 | | | SERP | | | — | | | — | | | — | | | Pension | | | — | | | — | | | — | | | Stornant | | | SERP | | | 25 | | | $2,471,706 | | | — | | | Pension | | | 25 | | | $1,119,922 | | | — | | | Zwiers | | | SERP | | | 25 | | | $2,698,018 | | | — | | | Pension | | | 25 | | | $1,010,810 | | | — | |
1.
| These values are as of December 31, 2022, and are calculated assuming the participants will commence their benefits at age 65 (or current age if older), and that those benefits will be paid in the form according to each participant's 409A election and use the PRI-2012 mortality tables for males and females (white collar for SERP and no collar for Pension Plan), projected forward from base year 2012 with generational projection using an unmodified MP-2021 projection scale, with contingent annuitant mortality tables applied after the death of the participant and using the following discount rates: 5.54% Pension Plan; 5.60% SERP. |
2.
| Neither Mr. Hoffman nor Ms. Soriano participate in the SERP or Pension Plan. | |
TABLE OF CONTENTS
Compensation Wolverine Worldwide maintains a Deferred Compensation Plan. This unfunded and non-qualified plan allows executives and other eligible senior employees of the Company to elect to defer all or a portion of their base salary, cash bonus, or other performance-based cash compensation. Wolverine Worldwide may, but need not, credit a participant's account under the plan with additional discretionary Company contributions, which may be subject to a vesting schedule and which would vest in full on a change in control. Amounts deferred pursuant to the Deferred Compensation Plan may be invested, at the direction of the participant, in an investment fund, index, or other investment vehicle, as designated by the Compensation and Human Capital Committee to be available under the plan, and earnings, if any, are credited to the participant's account. Accounts are paid out upon the earliest to occur of (i) a qualifying separation from service, (ii) a change in control (as such term is defined in the Deferred Compensation Plan), and (iii) a termination of the Deferred Compensation Plan. Payment must generally be made, or installment payments must begin, (as elected by the participant at the time of deferral), within 60 days of the event triggering payment. Mr. Stornant is defined in the Deferred Compensation Plan), and (iii) a termination of the Deferred Compensation Plan. Payment must generally be made, or installment payments must begin, (as elected by the participant at the time of deferral), within 60 days of the event triggering payment.
In 2023, Mr. Hufnagel was the only NEO who has elected to defer amounts under the Deferred Compensation Plan and no NEOs received a Company contribution. Mr. Stornant is the only other NEO who has previously elected to defer amounts under the Deferred Compensation Plan. | Hufnagel | | | $74,810 | | | — | | | $32,949 | | | — | | | $408,028 | | | Stornant | | | — | | | — | | | $643 | | | — | | | $14,774 | |
1.
| Reflects market-based earnings on amounts credited to Mr. Stornant and Mr. Hufnagel under the Deferred Compensation Plan, and Mr. Hoffman is the only NEO who received a Company contribution. | Hoffman | | | — | | | $74,5301 | | | $565 | | | — | | | $48,023 | | | Stornant | | | — | | | — | | | $166 | | | — | | | $14,131 | |
1.
| Company contributions for 2022 were deposited to Mr. Hoffman's Deferred Compensation Plan in February 2023 and were included in the “All Other Compensation” column in the “Summary Compensation Table” on page 55. Plan. |
2.
| Reflects market-based earnings on amounts credited to Mr. Stornant and Mr. Hoffman under the Deferred Compensation Plan.TABLE OF CONTENTS
Termination or Change in
Control
Wolverine Worldwide has entered into an Executive Severance Agreement with each NEO that provides certain rights, including the right to receive payments in the event of a termination of employment following a change in control. The Company also has entered into an agreement with Mr. Hoffman and Ms. Soriano regarding certain termination benefits in the event of termination of employment under certain other circumstances described below.
BENEFITS TRIGGERED BY TERMINATION FOR CAUSE OR VOLUNTARY TERMINATIONAn NEO is not entitled to receive any additional forms of severance payments or benefits upon termination of employment for Cause or upon the NEO's voluntary decision, other than for Good Reason, to terminate his or her employment, as discussed in further detail below.
BENEFITS TRIGGERED BY TERMINATION OTHER THAN FOR CAUSE OR FOR GOOD REASON NOT IN CONNECTION WITH A CHANGE IN CONTROLMr. Hoffman entered into an Employment Agreement on August 7, 2020, which was amended on December 17, 2021, which states that upon termination of his employment by Wolverine Worldwide without Cause, or termination by Mr. Hoffman with Good Reason, as such terms are defined in Mr. Hoffman’s Employment Agreement, Wolverine Worldwide will pay Mr. Hoffman the following payments in exchange for a general release of claims in favor of Wolverine Worldwide: (1) continued base salary for 18 months offset by the amount of salary and guaranteed compensation, if any, he is entitled to from another employer; (2) payment of Company COBRA premiums for 18 months, or, if earlier, until eligible for coverage through another employer; and (3) a pro rata target bonus opportunity for the year of termination.
“Cause” generally is defined in Mr. Hoffman’s Employment Agreement to mean: (1) any intentional act of fraud, embezzlement, theft, dishonesty, misrepresentation or breach of fiduciary duty with respect to the Company or its subsidiaries; (2) gross negligence or willful misconduct in the performance of duties; (3) material failure or refusal to follow any reasonable directive of the Board or the officer to whom Mr. Hoffman reports, and if such failure and refusal is curable, if such failure or refusal is not cured within ten (10) days after written notice; (4) breach of any noncompetition, nonsolicitation, confidentiality or other covenant with the Company, material breach of any material written policy of the Company which if curable, is not cured within ten (10) days after the Company’s written notice of such breach, or material breach of Mr. Hoffman’s Employment Agreement, which if curable, is not cured within ten (10) days after the Company’s written notice of such breach; or (5) conviction of or indictment for or entering of a guilty plea or plea of no contest or nolo contendere with respect to any felony or any crime involving an act of moral turpitude.
“Good Reason” generally is defined in Mr. Hoffman’s Employment Agreement to mean: (1) a material diminution in duties or a reduction of title, (2) a material breach by the Company of the Employment Agreement, (3) relocation of Mr. Hoffman’s principal place of employment to a location that is more than fifty (50) miles from the Company’s corporate headquarters or Waltham, Massachusetts office as of January 2, 2022, without Mr. Hoffman’s consent, (4) termination of the Employment Agreement by the Company serving a notice of nonextension or (5) a reduction in Mr. Hoffman’s base salary, unless such reduction is part of an across the board reduction for senior executives of the Company.
On June 8, 2018, Ms. Soriano entered into a Service Agreement with Wolverine Europe Limited, which is typical for senior executives based in the United Kingdom. Ms. Soriano’s agreement states that upon certain terminations of her employment by Wolverine Europe Limited, Wolverine Europe Limited will provide Ms. Soriano with written notice nine (9) months prior to such termination or, alternatively, will pay Ms. Soriano her base salary for such period (or any portion thereof) in lieu of such notice. In addition, upon voluntary termination of Ms. Soriano’s employment by Ms. Soriano for any reason, she is required to give written notice six (6) months prior to such termination and
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Wolverine Europe Limited may pay Ms. Soriano her base salary for such period (or any portion thereof) in lieu of such notice. If Wolverine Europe Limited chooses to pay Ms. Soriano her base salary in lieu of notice, in either case, such amounts will be in full and final settlement of all claims Ms. Soriano may have against Wolverine and its affiliates and, further, such amounts will be reduced by any income earned from subsequent employment.
For purposes of Ms. Soriano’s Service Agreement, Wolverine Europe Limited will generally not be required to provide notice to terminate her employment if she (1) commits, repeats or continues any material breach of her Service Agreement or her obligations thereunder, (2) commits an act of gross misconduct or serious/gross incompetence or negligence including any deliberate act of discrimination or harassment, (3) acts in a manner which prejudices or is likely in the reasonable opinion of the Board to prejudice the interests or reputation of Ms. Soriano, Wolverine or its affiliates, (4) commits any material breach of the Code of Conduct, (5) commits or is charged or convicted of any criminal offense other than an offense which does not affect her position or any road traffic violation, (6) is declared bankrupt, (7) is prohibited by law from being a director of a company, (8) is removed as a director of Wolverine Europe Limited or any affiliate for a reason related to misconduct, (9) is in breach of the warranties contained in the Service Agreement, (10) breaches a material policy of Wolverine or its affiliates, (11) becomes incapacitated and no longer able to perform her duties for a period exceeding 26 weeks in any 12 month period, or (12) ceases to hold any necessary qualification to carry out her duties and/or is in breach of any rules and regulations or any relevant regulatory body.
BENEFITS TRIGGERED UPON A CHANGE IN CONTROLBenefits Upon Termination Following a Change in Control. Under the Executive Severance Agreements entered into with the NEOs, payments and benefits are triggered when employment is terminated without “Cause” or when an executive terminates employment for “Good Reason” within two years following a change in control of Wolverine Worldwide.
Upon such a qualifying termination, Wolverine Worldwide will pay the lump sum severance payment under the Executive Severance Agreement composed of the following: (1) unpaid base salary and bonus payments that had been earned; (2) in lieu of a bonus payment under the Annual Bonus Plan, an amount equal to the quotient of the number of days the NEO was employed by Wolverine Worldwide, or any successor company in the year of termination, divided by the number of days in the year; multiplied by 100% of the greater of either (a) the bonus awarded to the NEO under the annual bonus plan for the preceding year and (b) the average paid to the NEO over the preceding two year period under the annual bonus plan; (3) in lieu of payments under the various three year performance periods that remain open on the date of termination, if any, an amount equal to the bonus the NEO would have received based on actual and assumed performance measures, multiplied by the quotient of the number of days the NEO participated in the performance period prior to the termination, divided by the total number of days in the performance period (in determining the earnings per share or other performance measures that can be determined annually for any year subsequent to the year of termination, performance will equal the level required to attain the maximum goal under the three year plan for that year); (4) two times the sum of (a) the NEO's highest annual base salary during the 12 month period prior to termination and (b) the greater of (i) the average amount earned by the NEO during the previous two years under the annual bonus plan and (ii) the amount earned during the previous year under the Annual Bonus Plan; (5) 100% of the positive spread for any stock options held by the NEO on the date of termination, whether or not vested; (6) in the case of Mr. Zwiers, an excise tax gross up adjustment (note: the agreements
TABLE OF CONTENTS Termination or Change in
Control Wolverine Worldwide has entered into an Executive Severance Agreement with each NEO that provides certain rights, including the right to receive payments in the event of a termination of employment following a change in control. The Company also has entered into an agreement with Messrs. Hufnagel and Hoffman Hufnagel and Stornant and Ms. Soriano regarding certain termination benefits in the event of termination of employment under certain other circumstances described below. BENEFITS TRIGGERED BY TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION An NEO is not entitled to receive any additional forms of severance payments or benefits upon termination of employment for Cause or upon the NEO's voluntary decision, other than for Good Reason, to terminate his or her employment, as discussed in further detail below. BENEFITS TRIGGERED BY TERMINATION OTHER THAN FOR CAUSE OR FOR GOOD REASON NOT IN CONNECTION WITH A CHANGE IN CONTROL Mr. Hufnagel entered into an Employment Agreement upon his appointment as President and CEO of the Company in August 2023. The Employment Agreement states that upon termination of his employment by Wolverine Worldwide without Cause, or termination by Mr. Hufnagel with Good Reason, as such terms are defined in his Employment Agreement, Wolverine Worldwide will pay Mr. Hufnagel the following payments in exchange for a general release of claims in favor of Wolverine Worldwide: (1) continued base salary for 24 months; (2) payment of Company COBRA premiums for up to 24 months, or, if earlier, until eligible for coverage through another employer; (3) a pro rata target bonus opportunity for the year of termination; (4) pro rata vesting of outstanding performance-based equity awards as though Mr. Hufnagel had retired as of the date of termination, and pro-rata vesting of outstanding time-based equity awards that would have vested over the 12 month period following the date of termination; and (5) 12 months of outplacement assistance. “Cause” generally is defined in Mr. Hufnagel’s Employment Agreement to mean: (1) any intentional act of fraud, embezzlement, theft, dishonesty, misrepresentation or breach of fiduciary duty with respect to the Company or its subsidiaries; (2) gross negligence or willful misconduct in the performance of duties; (3) material failure or refusal to follow any reasonable directive of the Board or the officer to whom Mr. Hufnagel reports, and if such failure and refusal is curable, if not cured within ten (10) days after written notice; (4) material breach of any noncompetition, nonsolicitation, confidentiality or other covenant with the Company, material breach of any material written policy of the Company which if curable, is not cured within ten (10) days after the Company’s written notice of such breach, or material breach of Mr. Hufnagel’s Employment Agreement, which if curable, is not cured within ten (10) days after the Company’s written notice of such breach; or (5) conviction of or indictment for or entering of a guilty plea or plea of no contest or nolo contendere with respect to any felony or any crime involving an act of moral turpitude. “Good Reason” generally is defined in Mr. Hufnagel’s Employment Agreement to mean: (1) a material diminution in duties or a reduction of title, (2) a material breach by the Company of the Employment Agreement, (3) relocation of Mr. Hufnagel’s principal place of employment to a location that is more than fifty (50) miles from the Company’s corporate headquarters without Mr. Hufnagel’s consent, (4) termination of the Employment Agreement by the Company serving a notice of nonextension or (5) a reduction in Mr. Hufnagel’s base salary, unless such reduction is part of an across the board reduction for senior executives of the Company. On June 8, 2018, Ms. Soriano entered into a Service Agreement with Wolverine Europe Limited, which is typical for senior executives based in the United Kingdom. Ms. Soriano’s agreement states that upon certain terminations of her employment by Wolverine Europe Limited, Wolverine Europe Limited will provide Ms. Soriano with written notice nine (9) months prior to such termination or, alternatively, will pay Ms. Soriano her base salary for such period (or any portion thereof) in lieu of such notice. In addition, upon voluntary termination of Ms. Soriano’s employment by Ms. Soriano for any reason, she is required to give written notice six (6) months prior to such termination and TABLE OF CONTENTS Wolverine Europe Limited may pay Ms. Soriano her base salary for such period (or any portion thereof) in lieu of such notice. If Wolverine Europe Limited chooses to pay Ms. Soriano her base salary in lieu of notice, in either case, such amounts will be in full and final settlement of all claims Ms. Soriano may have against Wolverine and its affiliates and, further, such amounts will be reduced by any income earned from subsequent employment. For purposes of Ms. Soriano’s Service Agreement, Wolverine Europe Limited will generally not be required to provide notice to terminate her employment if she (1) commits, repeats or continues any material breach of her Service Agreement or her obligations thereunder, (2) commits an act of gross misconduct or serious/gross incompetence or negligence including any deliberate act of discrimination or harassment, (3) acts in a manner which prejudices or is likely in the reasonable opinion of the Board to prejudice the interests or reputation of Ms. Soriano, Wolverine or its affiliates, (4) commits any material breach of the Code of Conduct, (5) commits or is charged or convicted of any criminal offense other than an offense which does not affect her position or any road traffic violation, (6) is declared bankrupt, (7) is prohibited by law from being a director of a company, (8) is removed as a director of Wolverine Europe Limited or any affiliate for a reason related to misconduct, (9) is in breach of the warranties contained in the Service Agreement, (10) breaches a material policy of Wolverine or its affiliates, (11) becomes incapacitated and no longer able to perform her duties for a period exceeding 26 weeks in any 12 month period, or (12) ceases to hold any necessary qualification to carry out her duties and/or is in breach of any rules and regulations or any relevant regulatory body. Mr. Hoffman entered into an Employment Agreement on August 7, 2020, which was amended on December 17, 2021, which states that upon termination of his employment by Wolverine Worldwide without Cause, or termination by Mr. Hoffman with Good Reason, as such terms are defined in Mr. Hoffman’s Employment Agreement, Wolverine Worldwide will pay Mr. Hoffman the following payments in exchange for a general release of claims in favor of Wolverine Worldwide: (1) continued base salary for 18 months offset by the amount of salary and guaranteed compensation, if any, he is entitled to from another employer; (2) payment of Company COBRA premiums for 18 months, or, if earlier, until eligible for coverage through another employer; and (3) a pro rata target bonus opportunity for the year of termination. “Cause” generally is defined in Mr. Hoffman’s Employment Agreement to mean: (1) any intentional act of fraud, embezzlement, theft, dishonesty, misrepresentation or breach of fiduciary duty with respect to the Company or its subsidiaries; (2) gross negligence or willful misconduct in the performance of duties; (3) material failure or refusal to follow any reasonable directive of the Board or the officer to whom Mr. Hoffman reports, and if such failure and refusal is curable, if such failure or refusal is not cured within ten (10) days after written notice; (4) breach of any noncompetition, nonsolicitation, confidentiality or other covenant with the Company, material breach of any material written policy of the Company which if curable, is not cured within ten (10) days after the Company’s written notice of such breach, or material breach of Mr. Hoffman’s Employment Agreement, which if curable, is not cured within ten (10) days after the Company’s written notice of such breach; or (5) conviction of or indictment for or entering of a guilty plea or plea of no contest or nolo contendere with respect to any felony or any crime involving an act of moral turpitude. “Good Reason” generally is defined in Mr. Hoffman’s Employment Agreement to mean: (1) a material diminution in duties or a reduction of title, (2) a material breach by the Company of the Employment Agreement, (3) relocation of Mr. Hoffman’s principal place of employment to a location that is more than fifty (50) miles from the Company’s corporate headquarters or Waltham, Massachusetts office as of January 2, 2022, without Mr. Hoffman’s consent, (4) termination of the Employment Agreement by the Company serving a notice of nonextension or (5) a reduction in Mr. Hoffman’s base salary, unless such reduction is part of an across the board reduction for senior executives of the Company. Amounts in the table below reflect actual payments and benefits paid or provided to Mr. Hoffman in connection with the termination of his employment with the Company in August 2023. BENEFITS TRIGGERED UPON A CHANGE IN CONTROL Benefits Upon Termination Following a Change in Control. Under the Executive Severance Agreements entered into with the NEOs, payments and benefits are triggered when employment is terminated without “Cause” or when an executive terminates employment for “Good Reason” within two years following a change in control of Wolverine Worldwide. Upon such a qualifying termination, Wolverine Worldwide will pay the lump sum severance payment under the Executive Severance Agreement composed of the following: (1) unpaid base salary and bonus payments that had been earned; (2) in lieu of a bonus payment under the Annual Bonus Plan, an amount equal to the quotient of the number of days the NEO was employed by Wolverine Worldwide, or any successor company in the year of termination, divided by the number of days in the year; multiplied by 100% of the greater of either (a) the bonus awarded to the NEO under the annual bonus plan for the preceding year and (b) the average paid to the NEO over the preceding two year period under the annual bonus plan; (3) in lieu of payments under the various three year performance periods that remain open on the date of termination, if any, an amount equal to the bonus the NEO would have received based on actual and assumed performance measures, multiplied by the quotient of the number of days the NEO participated in the performance period prior to the termination, divided by the total number of days in the performance period (in determining the earnings per share or other performance measures that can be TABLE OF CONTENTS determined annually for any year subsequent to the year of termination, performance will equal the level required to attain the maximum goal under the three year plan for that year); (4) two times the sum of (a) the NEO's highest annual base salary during the 12 month period prior to termination and (b) the greater of (i) the average amount earned by the NEO during the previous two years under the annual bonus plan and (ii) the amount earned during the previous year under the Annual Bonus Plan; (5) 100% of the positive spread for any stock options held by the NEO on the date of termination, whether or not vested; (6) in the case of Mr. Zwiers, an excise tax gross up adjustment (note: the agreements with Messrs. Hoffman, Hufnagel and Stornant, Ms. Soriano and Ms. Klimek were entered into after 2008, and the Committee determined to not provide such gross ups after that date); and (7) in the case of Mr. Hufnagel, the present value of an additional three years of deemed service under the Pension Plan and SERP (this benefit does not apply to Mr. Hoffman and Ms. Soriano since they do not participate in the Pension Plan or SERP or to Messrs. Zwiers or Stornant since they have maximum years of service under these plans). Upon a termination of employment following a change of control, Wolverine Worldwide or any successor company will maintain for a period of six months to one year the NEO's benefits under the then current benefit plans, programs or arrangements that the NEO was entitled to participate in immediately prior to the termination date. In addition, Wolverine Worldwide or any successor company will provide outplacement services through the last day of the second calendar year following the calendar year of termination. “Change in Control” under the Executive Severance Agreements generally means certain changes in composition of the Board of Directors, certain acquisitions of 20% or more of Wolverine Worldwide's common stock or combined outstanding voting power of Wolverine World Wide, Inc., and other specified reorganizations, mergers, consolidations, liquidations, dissolutions or distributions of substantial assets (unless such transactions result in the creation of an entity in which at least 50% of the common stock and combined voting power is owned by the owners of record prior to the transaction, no single shareholder owns more than 20% of the combined voting power and a majority of the board remains unchanged). In all cases, an event will not qualify as a change in control unless it qualifies as “a change in the ownership or effective control” of the Company or “a change in the ownership of a substantial portion of the assets of the Company,” each as determined under the stringent requirements of Section 409A of the Tax Code. Under this standard, for example, transactions must be consummated, not just approved by shareholders. “Cause” is defined under the Executive Severance Agreements to generally mean the willful and continued failure to substantially perform duties or willfully engaging in gross misconduct that is injurious to the Company. “Good Reason” is defined under the Executive Severance Agreements to generally mean: (1) any materially adverse change in position, duties, responsibilities or title, or any removal, involuntary termination or failure to re-elect an officer; (2) a reduction in annual base salary; (3) any relocation or requirement to substantially increase business travel; (4) the failure to continue providing any executive incentive plans or bonus plans; (5) the failure to continue any employee benefit plan or compensation plan unless a comparable plan is available; (6) the failure to pay any salary, bonus, deferred compensation or other compensation; (7) the failure to obtain an assumption agreement from any successor; (8) any purported termination of the employment which is not effected in a manner prescribed by the Executive Severance Agreement; or (9) any other material breach by Wolverine Worldwide or any successor company of its obligations under the Executive Severance Agreement. Benefits Upon a Change in Control Only. The Company has double-trigger equity vesting upon a change in control, meaning that vesting only accelerates upon a qualifying termination of employment after a change in control. To the extent that the Company has made discretionary contributions under the Deferred Compensation Plan that are subject to a vesting schedule, any unvested portion of these contributions will vest on a change in control. Change in control for this purpose generally means certain changes in the composition of the Board of Directors, certain acquisitions of 20% of Wolverine Worldwide's common stock (50% in the case of the Deferred Compensation Plan) and other specified reorganizations, mergers, consolidations, liquidations, dissolutions or dispositions of substantial assets. Excise Tax Gross Up. The Compensation and Human Capital Committee previously determined that Wolverine Worldwide would not provide excise tax gross up payments in employment agreements entered into after 2008. Mr. Zwiers is the only NEO who has excise tax gross up protection in his agreement. BENEFITS TRIGGERED BY RETIREMENT, DEATH OR PERMANENT DISABILITY Pension Plan. In the event of death before retirement, the Pension Plan provides the surviving spouse of a vested participant a death benefit equal to the qualified pre-retirement survivor annuity as defined in the Internal Revenue Code (generally 50% of the participant's accrued normal retirement benefit). This benefit is paid annually to the surviving spouse beginning when the participant would have turned 60 and continues for the life of the surviving spouse. For participants with at least three years of service as of December 31, 2003, and who have at least 10 years of service and are employed by the Company at the time of death, the amount of the survivor benefit under the Pension Plan is calculated as though the participant had continued as an employee of the Company until age 65 at the compensation level as of the date of death TABLE OF CONTENTS and the benefit begins upon the date of death, unreduced for early commencement. The survivor benefit for participants who meet all the criteria set forth in the preceding sentence, but who die when they are not employed by the Company, are entitled to a joint and survivor benefit commencing upon the date of death, unreduced for early commencement. SERP. If a SERP participant dies before beginning to receive benefits under the SERP, the Company must, based on the participant's election, pay the beneficiary either a monthly annuity or a lump sum death benefit equal to the present value of the benefit computed as if the participant had retired on the date of death, had begun receiving benefits at age 55, and had continued to receive benefits for the remainder of the participant's life expectancy. If the participant dies after beginning to receive benefit payments, benefits cease unless the participant was receiving benefits in the form of one of the joint and survivor annuity optional elections under the plan or had elected benefits in a form that provides for a continuation of benefits. If a participant becomes disabled (as defined in the SERP), the SERP provides a disability benefit equal to 60% of the normal retirement accrued benefit based upon years of service up to the date that the participant became disabled through the date the participant reaches age 65 (at which point, the participant would begin drawing full SERP benefits) or is no longer disabled. Annual Bonus Plan. Upon termination of employment at least six months after the beginning of a fiscal year due to death, disability, or early or normal retirement, an NEO is entitled to receive a pro rata portion of any annual bonus award earned under the Annual Bonus Plan based on the NEO's service during such fiscal year and actual performance under the Annual Bonus Plan. The annual bonus is payable at the same time and in the same manner as awards are paid to other NEOs for the fiscal year. Stock Incentive Plans. Upon death, disability or voluntary termination of employment after attaining age 59 with ten years of service with the Company, subject to certain conditions, the restrictions on time-vested units vest. Upon death, disability or voluntary termination of employment after attaining age 59 with ten years of service with the Company, subject to certain conditions, the restrictions on performance units will vest on a prorated basis based on Company performance for each open three-year cycle. Deferred Compensation Plan. Upon death, disability, or other qualifying separation from service, including retirement, all in accordance with Section 409A of the Internal Revenue Code, all amounts deferred by the NEOs under the Deferred Compensation Plan, including any vested amounts credited to the NEOs pursuant to a discretionary Company contribution, shall generally be paid, or commence payment, within 60 days of the termination in accordance with the schedule elected by the NEO at the time of deferral. DESCRIPTION OF RESTRICTIVE COVENANTS THAT APPLY DURING AND AFTER TERMINATION OF EMPLOYMENT The SERP contains non-competition, confidentiality, and employee non-solicitation provisions in favor of Wolverine Worldwide. Under the non-competition provisions of the SERP, the participant will not be entitled to any benefit payment if, prior to the date on which such benefit payment is due, the participant enters into certain relationships with a competing business. TABLE OF CONTENTS ESTIMATED PAYMENTS ON TERMINATION OR CHANGE IN CONTROL The following table summarizes the potential payments and benefits payable to each NEO upon a change in control or termination of employment following each of the triggering events set forth in the table. As required, the amounts in the table assume that the termination of employment or change in control of Wolverine Worldwide took place on the Company's last day of fiscal year 2023, which was December 30, 2023. The amounts set out below are in addition to benefits that are generally available to the Company's employees such as distributions under the Company's 401(k) savings plan, disability or life insurance benefits and accrued vacation. Due to the many factors that affect the nature and amount of any benefits provided upon the termination events discussed below, any actual amounts paid or distributed to NEOs may be different. Factors that may affect these amounts include timing during the year of the occurrence of the event, Wolverine Worldwide's stock price and the NEO's age and years of service. The value of the accelerated vesting of unvested equity-based compensation awards was computed using the closing market price $8.89 of Wolverine Worldwide's common stock on December 29, 2023, the last business day in fiscal year 2023. The value for unvested restricted stock is computed by multiplying $8.89 by the number of shares of the NEO's restricted stock that would vest as a result of an event. Each of the hypothetical events described in the following table (the highlighted blue headings in the left-hand column) is calculated and reported as a discrete event. For example, the amounts disclosed under the “Change in Control Only” heading are not cumulative with the amounts disclosed under the “Change in Control/Termination” heading. Notwithstanding the foregoing, the amounts for Mr. Hoffman reflect actual payments and benefits paid or provided to him under his employment agreement in connection with the termination of his employment with the Company in August 2023. | | | | | | | | | | | | | | | | | | | | | | | | Termination by Company for Cause or Voluntary Termination (other than for Good Reason or due to Retirement) | | | — | | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | Termination by Company Other Than for Cause or by Executive for Good Reason or In Lieu of Notice | | | $3,967,336 | | | — | | | $431,26211 | | | — | | | — | | | $1,123,41212 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Change in Control / Termination | | | | | | | | | | | | | | | | | | | | | | | Executive Severance Agreement1 | | | $5,605,615 | | | $2,925,759 | | | $3,293,524 | | | $4,914,785 | | | $6,572,165 | | | — | | | | | Benefits under Executive Severance Agreement2 | | | $40,704 | | | $33,073 | | | $34,868 | | | $48,160 | | | $41,065 | | | — | | | | | Stock Incentive Plans3 | | | $1,199,963 | | | $764,725 | | | $778,394 | | | $503,550 | | | $449,218 | | | — | | | | | Lump sum payment under the SERP4 | | | $2,008,656 | | | — | | | — | | | $5,366,224 | | | $6,657,249 | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | Death | | | | | | | | | | | | | | | | | | | | | | | SERP5 | | | $1,827,497 | | | — | | | — | | | $4,159,565 | | | $4,465,493 | | | — | | | | | Pension Plan6 | | | $309,013 | | | $192,544 | | | — | | | $994,004 | | | $998,185 | | | — | | | | | Stock Incentive Plans3 | | | $1,199,963 | | | $764,725 | | | $778,394 | | | $503,550 | | | $449,218 | | | — | | | | | Earned Incentive Compensation7 | | | $1,877,034 | | | $364,835 | | | $428,767 | | | $839,311 | | | $455,486 | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | Disability | | | | | | | | | | | | | | | | | | | | | | | SERP8 | | | $1,628,197 | | | — | | | — | | | $3,800,606 | | | $4,561,013 | | | — | | | | | Stock Incentive Plans3 | | | $1,199,963 | | | $764,725 | | | $778,394 | | | $503,550 | | | $449,218 | | | — | | | | | Earned Incentive Compensation7 | | | $1,877,034 | | | $364,835 | | | $428,767 | | | $839,311 | | | $455,486 | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | Retirement | | | | | | | | | | | | | | | | | | | | | | | SERP9 | | | $1,342,553 | | | — | | | — | | | $3,932,037 | | | $4,416,531 | | | — | | | | | Pension Plan9 | | | $637,588 | | | $486,297 | | | — | | | $1,466,000 | | | $1,323,837 | | | — | | | Stock Incentive Plans3 | | | — | | | — | | | — | | | — | | | — | | | — | | | | | Earned Incentive Compensation7 | | | — | | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | Change in Control Only | | | | | | | | | | | | | | | | | | | | | | | Stock Incentive Plans10 | | | — | | | | | | — | | | — | | | — | | | — | | | |
1.
| Payments would be triggered after termination of employment under certain circumstances within two years following a change in control. Includes amounts payable in cash under the terms of the Executive Severance Agreement, excluding the value of the cash payout to each NEO of the option spread for already vested options. The timing of the payment would be delayed to the extent earlier payment would trigger Section 409A of the tax code. The value of service-based restricted units that vest upon a change in control under the terms of the Company's stock incentive plans are included in the Stock Incentive Plans row. |
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| These estimates assume that Wolverine Worldwide, or any successor company, maintains the benefit plans for a period of one year after termination and the outplacement services for a period beginning with the date of termination and ending on the last day of the second calendar year following the calendar year in which the date of termination.termination occurred. |
3.
“Change in Control” under
| Reflects the Executive Severance Agreements generally means certain changes in compositionvalue of unvested shares of restricted stock units that would vest because of the Board of Directors, certain acquisitions of 20% or more of Wolverine Worldwide's common stock or combined outstanding voting power of Wolverine World Wide, Inc., and other specified reorganizations, mergers, consolidations, liquidations, dissolutions or distributions of substantial assets (unless such transactions result inevent. |
4.
| Reflects the creation of an entity in which at least 50%entire lump sum benefit payable to applicable NEOs, including any accumulated benefit. The timing of the common stock and combined voting power is owned by the owners of record priorpayment would be delayed to the transaction, no single shareholder owns more than 20% of the combined voting power and a majority of the board remains unchanged). In all cases, an event will not qualify as a change in control unless it qualifies as “a change in the ownership or effective control” of the Company or “a change in the ownership of a substantial portion of the assets of the Company,” each as determined under the stringent requirements ofextent earlier payment would trigger Section 409A of the Tax Code. Under this standard, for example, transactions must be consummated, not just approved by shareholders. |
5.
“Cause” is defined under
| Reflects the Executive Severance Agreementsentire lump sum death benefit payable to generally meana participating NEO's beneficiary, including any accumulated benefit. |
6.
| Amounts reflect the willful and continued failure to substantially perform duties or willfully engaging in gross misconduct that is injurious to the Company.TABLE OF CONTENTS
“Good Reason” is defined under the Executive Severance Agreements to generally mean: (1) any materially adverse change in position, duties, responsibilities or title, or any removal, involuntary termination or failure to re-elect an officer; (2) a reduction in annual base salary; (3) any relocation or requirement to substantially increase business travel; (4) the failure to continue providing any executive incentive plans or bonus plans; (5) the failure to continue any employee benefit plan or compensation plan unless a comparable plan is available; (6) the failure to pay any salary, bonus, deferred compensation or other compensation; (7) the failure to obtain an assumption agreement from any successor; (8) any purported terminationnet present value of the employment which is not effected in a manner prescribed by the Executive Severance Agreement; or (9) any other material breach by Wolverine Worldwide or any successor company of its obligations under the Executive Severance Agreement.
Benefits Upon a Change in Control Only. For 2017 and future years, the Company adopted double-trigger equity vesting, meaning that vesting only accelerates upon a qualifying termination of employment after a change in control. For grants prior to 2017, upon a change in control of Wolverine Worldwide, absent a determination by the Compensation Committee to the contrary, outstanding stock options become immediately exercisable in full and will remain exercisable during their remaining term, regardless of whether the NEO remains an employee of Wolverine Worldwide, or any successor company. The Committee may determine that one or all of the NEOs shall receive cash in an amount equal to the positive spread amount associated with these options. To the extent that the Company has made discretionary contributions under the Deferred Compensation Plan that are subject to a vesting schedule, any unvested portion of these contributions will vest on a change in control. Change in control for this purpose generally means certain changes in the composition of the Board of Directors, certain acquisitions of 20% of Wolverine Worldwide's common stock (50% in the case of the Deferred Compensation Plan) and other specified reorganizations, mergers, consolidations, liquidations, dissolutions or dispositions of substantial assets.
Excise Tax Gross Up. The Compensation Committee previously determined that Wolverine Worldwide would not provide excise tax gross up payments in employment agreements entered into after 2008. Mr. Zwiers is the only NEO who has excise tax gross up protection in his agreement.
BENEFITS TRIGGERED BY RETIREMENT, DEATH OR PERMANENT DISABILITYPension Plan. In the event of death before retirement, the Pension Plan provides the surviving spouse of a vested participant a death benefit equal to the qualified pre-retirement survivor annuity as defined in the Internal Revenue Code (generally 50% of the participant's accrued normal retirement benefit). This benefit is paid annually to the surviving spouse beginning whencalculated using the participant would have turned 60same discount rate and continues formortality assumptions used in the lifePension Benefits table under the heading “Pension Benefits in Fiscal Year 2023” under the heading “Pension Plans and 2023 Pension Benefits.” In accordance with the terms of the surviving spouse. For participants with at least three years of service as of December 31, 2003, and who have at least 10 years of service and are employed by the Company at the time of death, the amount of the survivor benefit under the Pension Plan, isthe death benefit for Messrs. Stornant and Zwiers was calculated as though the participantNEO had continued as an employee of the CompanyWolverine Worldwide until age 65 at the compensation level as of the date of deathdeath.
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7.
| Under the Annual Bonus Plan and the benefit begins upon the dateterms of death, unreduced for early commencement. The survivor benefit for participants who meet all the criteria set forth in the preceding sentence, but who die when they are not employed by the Company, are entitled to a joint and survivor benefit commencing upon the date of death, unreduced for early commencement.SERP. If a SERP participant dies before beginning to receive benefits under the SERP, the Company must, based on the participant's election, pay the beneficiary either a monthly annuity or a lump sum death benefit equal to the present value of the benefit computed as if the participant had retired on the date of death, had begun receiving benefits at age 55, and had continued to receive benefits for the remainder of the participant's life expectancy. If the participant dies after beginning to receive benefit payments, benefits cease unless the participant was receiving benefits in the form of one of the joint and survivor annuity optional elections under the plan or had elected benefits in a form that provides for a continuation of benefits.
If a participant becomes disabled (as defined in the SERP), the SERP provides a disability benefit equal to 60% of the normal retirement accrued benefit based upon years of service up to the date that the participant became disabled through the date the participant reaches age 65 (at which point, the participant would begin drawing full SERP benefits) or is no longer disabled.
Annual Bonus Plan. Upon termination of employment at least six months after the beginning of a fiscal year due to death, disability, or early or normal retirement, anperformance unit awards, each NEO is entitledmay be eligible to receive a pro rata portion of any annual bonus award earnedif employment is terminated as a result of any of the specified events in the table. The amount reported represents (a) actual payout under the Annual Bonus Plan for fiscal year 2023, (b) actual payout under the 2021-2023 performance cycle and (c) target performance for the 2022-2024 and 2023-2025 performance cycles. Performance units would vest on a prorated basis based on actual Company performance.
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8.
| Reflects the NEO's service during such fiscal year and actual performance undernet present value of the Annual Bonus Plan. The annual bonus is payable atannuity using the same timediscount rate and mortality assumptions used in the same mannerPension Benefits table and assuming the NEO drew the disability benefit until age 65 followed by the normal retirement benefit. |
9.
| Reflects the net present value of benefits according to actual elections in place and assuming SERP benefits begin at age 55 (or immediately if older than 55) and pension benefits as awards are paid to other NEOs for the fiscal year.Stock Incentive Plans. Upon death, disability, or voluntary termination of employment after attaining age 5960 with ten10 years of service with the Company, subject to certain conditions, the restrictions applicable to each NEO's shares ofservice.
|
10.
| Unvested restricted stock terminate. Upon death, disability or voluntary termination of employment after attaining age 59 with ten years of service with the Company, subject to certain conditions, the restrictionsunits (including performance share awards) do not vest based on time-vested shares lapse or units vest.TABLE OF CONTENTS
Deferred Compensation Plan. Upon death, disability, or other qualifying separation from service, including retirement, all in accordance with Section 409A of the Internal Revenue Code, all amounts deferred by the NEOs under the Deferred Compensation Plan, including any vested amounts credited to the NEOs pursuant to a discretionary Company contribution, shall generally be paid, or commence payment, within 60 days of the termination in accordance with the schedule elected by the NEO at the time of deferral.
DESCRIPTION OF RESTRICTIVE COVENANTS THAT APPLY DURING AND AFTER TERMINATION OF EMPLOYMENTThe SERP contains non-competition, confidentiality, and employee non-solicitation provisions in favor of Wolverine Worldwide. Under the non-competition provisions of the SERP, the participant will not be entitled to any benefit payment if, prior to the date on which such benefit payment is due, the participant enters into certain relationships with a competing business.
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ESTIMATED PAYMENTS ON TERMINATION OR CHANGE IN CONTROLThe following table summarizes the potential payments and benefits payable to each NEO upon a change in control or terminationonly.
|
11.
| Represents 9 months of base salary and is the maximum amount payable if the company chooses to terminate her employment following eachwithout notice. If Ms. Soriano voluntarily terminates, the maximum payout in lieu of notice is six months of base salary ($287,508). |
12.
| Represents actual amounts paid and benefits provided under the triggering events set forthterms of Mr. Hoffman's employment agreement in the table. As required, the amounts in the table assume thatconnection with the termination of Mr. Hoffman's employment or change in control of Wolverine Worldwide took place on the Company's last day of fiscal year 2022, which was December 31, 2022. The amounts set out below are in addition to benefits that are generally available to the Company's employees such as distributions under the Company's 401(k) savings plan, disability or life insurance benefits and accrued vacation. Due to the many factors that affect the nature and amount of any benefits provided upon the termination events discussed below, any actual amounts paid or distributed to NEOs may be different. Factors that may affect these amounts include timing during the year of the occurrence of the event, Wolverine Worldwide's stock price and the NEO's age and years of service.The value of the accelerated vesting of unvested equity-based compensation awards was computed using the closing market price $10.93 of Wolverine Worldwide's common stock on December 30, 2022, the last business day in fiscal year 2022. The value for unvested restricted stock is computed by multiplying $10.93 by the number of shares of the NEO's restricted stock that would vest as a result of an event.
Each of the hypothetical events described in the following table (the highlighted blue headings in the left-hand column) is calculated and reported as a discrete event. For example, the amounts disclosed under the “Change in Control Only” heading are not cumulative with the amounts disclosed under the “Change in Control/Termination” heading.
| | | | | | | | | | | | | | | | | | | Termination by Company for Cause or Voluntary Termination (other than for Good Reason or due to Retirement) | | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | Termination by Company Other Than for Cause or by Executive for Good Reason or In Lieu of Notice | | | $2,141,764 | | | — | | | $349,47911 | | | — | | | — | | | | | | | | | | | | | | | | | | | | | Change in Control / Termination | | | | | | | | | | | | | | | | | | Executive Severance Agreement1 | | | $12,900,842 | | | $7,584,807 | | | $2,864,667 | | | $5,582,539 | | | $11,250,134 | | | Benefits under Executive Severance Agreement2 | | | $48,379 | | | $40,488 | | | $34,801 | | | $48,391 | | | $40,961 | | | Stock Incentive Plans3 | | | $1,339,100 | | | $257,128 | | | $161,425 | | | $415,198 | | | $367,751 | | | Lump sum payment under the SERP4 | | | — | | | $2,388,449 | | | — | | | $7,699,491 | | | $9,566,147 | | | | | | | | | | | | | | | | | | | | | Death
| | | | | | | | | | | | | | | | | | SERP5 | | | — | | | $2,518,439 | | | — | | | $5,552,802 | | | $6,007,174 | | | Pension Plan6 | | | — | | | $249,334 | | | — | | | $938,275 | | | $942,268 | | | Stock Incentive Plans3 | | | $1,339,100 | | | $257,128 | | | $161,425 | | | $415,198 | | | $367,751 | | | Earned Incentive Compensation7 | | | $3,232,070 | | | $485,608 | | | $536,820 | | | $841,899 | | | $736,597 | | | | | | | | | | | | | | | | | | | | | Disability
| | | | | | | | | | | | | | | | | | SERP8 | | | — | | | $1,266,507 | | | — | | | $3,729,972 | | | $4,456,782 | | | Stock Incentive Plans3 | | | $1,339,100 | | | $257,128 | | | $161,425 | | | $415,198 | | | $367,751 | | | Earned Incentive Compensation7 | | | $3,232,070 | | | $485,608 | | | $536,820 | | | $841,899 | | | $736,597 | | | | | | | | | | | | | | | | | | | | | Retirement
| | | | | | | | | | | | | | | | | | SERP9 | | | — | | | $986,392 | | | — | | | $3,706,823 | | | $4,120,819 | | | Pension Plan9 | | | — | | | $513,223 | | | — | | | $1,282,879 | | | $1,153,898 | | | Stock Incentive Plans3 | | | — | | | — | | | — | | | — | | | — | | | Earned Incentive Compensation7 | | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | Change in Control Only
| | | | | | | | | | | | | | | | | | Stock Incentive Plans10 | | | — | | | — | | | — | | | — | | | — | |
1.
| Payments would be triggered after termination of employment under certain circumstances within two years following a change in control. Includes amounts payable in cash under the terms of the Executive Severance Agreement, excluding the value of the cash payout to each NEO of the option spread for already vested options. The timing of the payment would be delayed to the extent earlier payment would trigger Section 409A of the tax code. The value of service-based restricted shares or units that vest upon a change in control under the terms of the Company's stock incentive plans are included in the Stock Incentive Plans row. |
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2.
| These estimates assume that Wolverine Worldwide, or any successor company, maintains the benefit plans for a period of one year after termination and the outplacement services for a period beginning with the date of termination and ending on the last day of the second calendar year following the calendar year in which the date of termination occurred.2023. |
3.
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Christopher Hufnagel, the Company's Chief Executive Officer during fiscal year 2023. We calculated the CEO's annual total compensation by annualizing the compensation of Mr. Hufnagel, the CEO on the date used to identify the median employee. For 2023, our last completed fiscal year, the annual total compensation of the employee of the Company identified at median was $50,238 and the annual total compensation of the CEO utilizing the method outlined above was $3,360,805. Based on this information, the 2023 ratio of the annual total compensation of Mr. Hufnagel to the median of the annual total compensation of all employees was estimated to be 67 to 1. The methodology and the material assumptions, adjustments and estimates that we used to identify the median of the annual total compensation of all our employees in 2023, as well as to determine the annual total compensation of our “median employee” and our CEO, are described below. We determined that, as of December 30, 2023, our employee population consisted of approximately 4,098 (2,251 in the U.S. and 1,847 outside the U.S.) individuals globally. After excluding employees from Austria (2), Belgium (1), Cayman Islands (1), Chile (13), Dominican Republic (4), Hong Kong (29), India (8 employees), Ireland (58), and Thailand (1) pursuant to the “de minimis” exception provided for in the rules, we used a base of 3,981 employees for purposes of determining the “median employee.” We selected December 30, 2023, as the date upon which we would identify the median employee in order to align with year-end. To identify the median employee from our employee population, we used annual base salary, plus bonus and other cash incentives paid for the 12-month period ending December 30, 2023 as our consistently applied compensation measure - the same approach used in prior years. ○ | Reflects the value of unvested shares of restricted stock or stock units that would vest because of the event. |
4.
| Reflects the entire lump sum benefit payable to applicable NEOs, including any accumulated benefit. The timing of the payment would be delayed to the extent earlier payment would trigger Section 409A of the Tax Code. |
5.
| Reflects the entire lump sum death benefit payable to a participating NEO's beneficiary, including any accumulated benefit. |
6.
| Amounts reflect the net present value of the annuity paid to the surviving spouse calculated using the same discount rate and mortality assumptions used in the Pension Benefits table under the heading “Pension Benefits in Fiscal Year 2022” under the heading “Pension Plans and 2022 Pension Benefits.” In accordance with the terms of the Pension Plan, the death benefit for Messrs. Stornant and Zwiers was calculated as though the NEO had continued as an employee of Wolverine Worldwide until age 65 at the compensation level as of the date of death. |
7.
| Under the Annual Bonus Plan and the terms of performance share awards, each NEO may be eligible to receive a pro rata portion of any award if employment is terminated as a result of any of the specified events in the table. The amount reported represents (a) actual payout under the Annual Bonus Plan for fiscal year 2022, (b) actual payout under the 2021-2022 performance cycle and (c) target performance for the 2021-2023 and 2022-2024 performance cycles. Performance units would vest on a prorated basis based on actual Company performance. |
8.
| Reflects the net present value of the annuity using the same discount rate and mortality assumptions used in the Pension Benefits table and assuming the NEO drew the disability benefit until age 65 followed by the normal retirement benefit. |
9.
| Reflects the net present value of benefits according to actual elections in place and assuming SERP benefits begin at age 55 (or immediately if older than 55) and pension benefits as of age 60 with 10 years of service. |
10.
| Unvested shares of restricted stock/stock units (including performance share or unit awards) do not vest based on a change in control only. |
11.
| Represents 9 months of base salary and is the maximum amount payable if the company chooses to terminate her employment without notice. If Ms. Soriano voluntarily terminates, the maximum payout in lieu of notice is six months of base salary ($232,986). |
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Brendan Hoffman, the Company's Chief Executive Officer during fiscal year 2022.
For 2022, our last completed fiscal year, the annual total compensation of the employee of the Company identified at median was $60,287 and the annual total compensation of the CEO, as reported in the Summary Compensation Table above, was $6,519,654
Based on this information, the 2022 ratio of the annual total compensation of Mr. Hoffman to the median of the annual total compensation of all employees was estimated to be 108 to 1.
The methodology and the material assumptions, adjustments and estimates that we used to identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our “median employee” and our CEO, are described below.
We determined that, as of December 31, 2020, our employee population consisted of approximately 3,273 (2,544 in the U.S. and 729 outside the U.S.) individuals globally. After excluding employees from India (12 employees), Dominican Republic (2 employees), Mexico (1 employees), Netherlands (57 employees), Thailand (2 employees) and Vietnam (47 employees) pursuant to the “de minimis” exception provided for in the rules, we used a base of 3,152 employees for purposes of determining the “median employee.” We selected December 31, 2020, as the date upon which we would identify the median employee in order to align with year-end.
To determine the median employee in 2020 we used annual base salary as well as bonus and other cash incentives paid for the 12-month period ending December 31, 2020 as our consistently applied compensation measure. In making this determination, we annualized the compensation of all newly hired regular employees during this period. Since the median employee selected in 2020 no longer works
|
○ | Additionally, for the Company, an employee was selected whose compensation is substantially similar to the original median employee's compensation based on the compensation measureour full-time population, we used to select the original median employee in 2020; this same employee was usedannualized salary; for 2021 and 2022. There has not been a change in employeeour part-time population, or Company compensation arrangements that the Company believes would significantly impact the pay ratio.Once we identified our median employee, we combined the elements of such employee's compensation for fiscal 2022 in accordance with the SEC's rules, resulting in annual total compensation of $60,287.
With respect to the annual total compensation of our CEO, we used the amount reported inhourly rate of pay multiplied by the “Total” column of our 2022 Summary Compensation Table included in this Proxy Statement. regularly scheduled hours expected to work. |
Once we identified our median employee, we combined the elements of such employee's compensation for fiscal 2023 in accordance with the SEC's rules, resulting in annual total compensation of $50,238. With respect to the annual total compensation of our CEO, we annualized the compensation of Christopher Hufnagel, our CEO on the date used to identify the median employee. | | PAY VS. PERFORMANCE
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, the following information is provided about the relationship between Compensation shown on the Summary Compensation Table (SCT), Compensation Actually Paid (CAP), Total Shareholder Return (TSR), Net Income, and Non-GAAP Pre-Tax Income as the Company Selected Measure.
| For the 2020-2022 measuring period included in the table below, CEO Compensation Actually Paid was approximately 68% lower than CEO compensation disclosed in the Summary Compensation Table, while for the same period Company TSR was down 66%, demonstrating strong alignment between the CEOs’ realizable compensation and the performance of Company stock.69
| 2022 | | | N/A | | | $6,519,654 | | | N/A | | | $207,454 | | | $1,818,674 | | | $868,826 | | | $34.23 | | | $108.19 | | | ($189) | | | $133.1 | | | 2021 | | | $14,405,857 | | | N/A | | | $3,570,244 | | | N/A | | | $3,924,986 | | | $2,336,212 | | | $87.98 | | | $151.51 | | | $67 | | | $191.5 | | | 2020 | | | $9,519,491 | | | N/A | | | $5,934,954 | | | N/A | | | $3,547,178 | | | $2,591,063 | | | $94.28 | | | $120.84 | | | ($138.6) | | | $92.4 | |
| |
TABLE OF CONTENTS PAY VS. PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, the following information is provided about the relationship between Compensation shown on the Summary Compensation Table (SCT), Compensation Actually Paid (CAP), Total Shareholder Return (TSR), Net Income, and Non-GAAP Pre-Tax Income as the Company Selected Measure. | 2023 | | | N/A | | | $7,578,715 | | | $3,174,477 | | | N/A | | | $3,230,490 | | | $2,691,339 | | | $2,310,884 | | | $1,841,974 | | | $28.98 | | | $134.84 | | | ($39.2) | | | $4.8 | | | 2022 | | | N/A | | | $6,519,654 | | | N/A | | | N/A | | | $207,454 | | | N/A | | | $1,818,674 | | | $868,826 | | | $34.33 | | | $108.06 | | | ($189) | | | $133.1 | | | 2021 | | | $14,405,857 | | | N/A | | | N/A | | | $3,570,244 | | | N/A | | | N/A | | | $3,924,986 | | | $2,336,212 | | | $88.24 | | | $151.33 | | | $67 | | | $191.5 | | | 2020 | | | $9,519,491 | | | N/A | | | N/A | | | $5,934,954 | | | N/A | | | N/A | | | $3,547,178 | | | $2,591,063 | | | $94.56 | | | $120.70 | | | ($138.6) | | | $92.4 | |
(a)
| NEOs included in these columns reflect the following: |
| 2023 | | | Brendan Hoffman (through 8/5/2023) &
Christopher Hufnagel (through end of year) | | | Isabel Soriano, Michael Stornant, James Zwiers, Amy Klimek | | | 2022 | | | Brendan Hoffman
| | | Isabel Soriano, Michael Stornant, James Zwiers, Christopher Hufnagel | | | 2021 | | | Blake Krueger
| | | Brendan Hoffman, Isabel Soriano, Michael Stornant, James Zwiers | | | 2020 | | | Blake Krueger | | | Brendan Hoffman, Michael Jeppesen, Michael Stornant, James Zwiers | | | 2020
| | | Blake Krueger
| | | Brendan Hoffman, Michael Jeppesen, Michael Stornant, James Zwiers
| |
(b)
| The following table details the adjustment to the Summary Compensation Table Total Pay for our CEO, as well as the average for our other NEOs, to determine “compensation actually paid,” as computed in accordance with Item 402(v), with dividends accounted for in the change in fair value of the awards. Amounts do not reflect actual compensation earned by or paid to our NEOs during 2023. |
(b)
| The following table details the adjustment to the Summary Compensation Table Total Pay for our CEO, as well as the average for our other NEOs, to determine “compensation actually paid”, as computed in accordance with Item 402(v), with dividends accounted for in the change in fair value of the awards. Amounts do not reflect actual compensation earned by or paid to our NEOs during the applicable year. |
| Summary Compensation Table Total | | | $6,519,654 | | | $14,405,857 | | | $9,519,491 | | | $1,818,674 | | | $3,924,986 | | | $3,547,178 | | | Less: Reported Fair Value of Equity Awards(1) | | | $5,183,029 | | | $10,945,024 | | | $6,652,134 | | | $805,334 | | | $2,269,703 | | | $2,050,266 | | | Add: Year-End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year(2) | | | $1,925,515 | | | $9,418,773 | | | $5,856,777 | | | $304,048 | | | $1,936,075 | | | $1,838,005 | | | Add: Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year(2) | | | ($208,392) | | | ($1,101,043) | | | ($369,878) | | | ($43,229) | | | ($300,778) | | | ($62,688) | | | Add: Year Over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years(2) | | | ($2,896,168) | | | ($8,282,156) | | | ($1,362,942) | | | ($639,680) | | | ($1,123,620) | | | ($172,005) | | | Add: Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Reflected in Fair Value or Total Compensation | | | $49,874 | | | $73,838 | | | $94,912 | | | $10,850 | | | $18,511 | | | $17,586 | | | Less: Change in Pension Value Reported in the Summary Compensation Table | | | $— | | | $— | | | $1,151,272 | | | $— | | | $39,184 | | | $742,418 | | | Add: Pension Service Cost for Services Rendered During the Year | | | $— | | | $— | | | $— | | | $223,497 | | | $189,926 | | | $215,671 | | | Compensation Actually Paid | | | $207,454 | | | $3,570,244 | | | $5,934,954 | | | $868,826 | | | $2,336,212 | | | $2,591,063 | |
| Summary Compensation Table Total | | | $7,578,715 | | | $3,174,477 | | | $2,310,884 | | | Less: Reported Fair Value of Equity Awards(1) | | | $5,800,021 | | | $1,650,032 | | | $1,078,853 | | | Add: Year-End Fair Value of Outstanding and Unvested Equity Awards Granted in the Year(2) | | | $2,693,615 | | | $1,323,518 | | | $822,604 | | | Add: Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year(2) | | | $219,399 | | | $55,401 | | | $62,459 | | | Add: Year Over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years(2) | | | ($464,034) | | | ($84,675) | | | ($89,668) | | | Less: Fair Value at the End of Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year(2) | | | $1,114,007 | | | $— | | | $— | | | Add: Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Reflected in Fair Value or Total Compensation | | | $116,824 | | | $25,586 | | | $26,233 | | | Less: Change in Pension Value Reported in the Summary Compensation Table | | | $— | | | $366,393 | | | $330,331 | | | Add: Pension Service Cost for Services Rendered During the Year | | | $— | | | $213,457 | | | $118,647 | | | Compensation Actually Paid | | | $3,230,490 | | | $2,691,339 | | | $1,841,974 | |
(1)
| The amounts reflect the aggregate grant-date fair value reported in the “Stock Awards” columns in the Summary Compensation Table for the applicable year. |
(2)
| In accordance with Item 402(v) requirements, the fair values of unvested and outstanding equity awards to our NEOs were measured as of the end of each fiscal year, and as of each vesting date, during the years displayed in the table above. For performance-based awards, the fair values reflect the probable outcome of the performance vesting conditions as of each measurement date. Dividends are accounted for in the change in fair value calculations. We did not grant any equity awards that vested in the year of grant. |
(c)
| Peer Group reflects the same S&P 1500 Consumer Durables & Apparel Index used for the performance graph included in the 10-K as required under S-K Item 201(e)(1)(ii). |
(d)
(d)
| For a reconciliation of GAAP Pre-tax Income to non-GAAP Pre-tax Income, as used in the third table below, see | For a reconciliation of GAAP Pre-tax Income to non-GAAP Pre-tax Income, as used in the third table below, See the Non-GAAP reconciliation table in Appendix A. |
| 2023 PROXY STATEMENT
TABLE OF CONTENTS Tabular list of Company Performance Measures The four measures listed below, in no particular order, represent the most important metrics to link Compensation Actually Paid for FY 2023 as further described in our Compensation Discussion and Analysis (CD&A) within the sections titled “Short-Term Incentive Compensation” and “Long-Term Incentive Compensation.” | | 72 | Non-GAAP Pre-Tax Income | | | Revenue | | | Non-GAAP Operating Profit | | |
TABLE OF CONTENTS
Tabular list of Company Performance Measures
The three measures listed below, in no particular order, represent the most important metrics to link Compensation Actually Paid for FY 2022 as further described in our Compensation Discussion and Analysis (CD&A) within the sections titled “Short-Term Incentive Compensation” and “Long-Term Incentive Compensation.”
Compensation Actually Paid versus Total Shareholder Return The Chart below compares CEO and other NEOs’ Compensation Actually Paid to the Company’s TSR and Peer Group TSR. The TSR calculation assumes a $100 investment made on 12/28/2019. Non-GAAP Pre-Tax Income | 2024 PROXY STATEMENT | | 71 | | | Revenue
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TABLE OF CONTENTS Compensation Actually Paid versus Net Income The chart below compares the CEO and other NEOs’ Compensation Actually Paid to our Company’s GAAP Net Income. | | | Fully Diluted Adjusted EPS
| | |
Compensation Actually Paid versus Total Shareholder Return
As shown in the chart below, the CEO and other NEOs’ Compensation Actually Paid amounts are aligned with the Company’s TSR. Alignment is primarily due to the Company’s use of equity incentives, which are tied directly to stock price in addition to the Company’s financial performance. The TSR calculation assumes a $100 investment made on 1/1/2020.
TABLE OF CONTENTS
Compensation Actually Paid versus Net Income
As shown in the chart below, the Company’s net income increased from 2020 to 2021, followed by a decrease in 2022. The CEO and NEO’s Compensation Actually Paid have varied significantly from these changes in large part due to the significant emphasis the Company places on equity incentives, which are sensitive to changes in stock price.
Compensation Actually Paid versus Non-GAAP Pre-Tax Income The chart below compares the CEO and other NEOs’ Compensation Actually Paid to our Company Selected Measure, Non-GAAP Pre-Tax Income. | 20232024 PROXY STATEMENT
| | 7472
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Proposal 2 — Advisory Resolution to Approve Executive Compensation The Company is asking its shareholders to indicate their support for Wolverine Worldwide's NEO compensation, as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives the Company's shareholders the opportunity to express their view on compensation for the Company's NEOs. The say-on-pay vote is advisory and, therefore, not binding on the Company, the Compensation and Human Capital Committee or the Board. Even though non-binding, the Board and Compensation and Human Capital Committee value the opinions of Wolverine Worldwide's shareholders and will review and consider the voting results when making future decisions regarding the Company's executive compensation program. At the 20172023 annual meeting of shareholders, the Company held an advisory vote on the frequency of future say-on-pay votes. Our shareholders approved, on an advisory basis, an annual say-on-pay vote, and after consideration of the shareholders’ vote, the Board determined to proceed with an annual say-on-pay vote. After the 20232024 Annual Meeting of Shareholders, our next advisory vote to approve executive compensation will occur at our 20242025 annual meeting of shareholders unless the Company announces otherwise following the Board’s consideration of the advisory vote provided in Proposal 3 of this Proxy Statement regarding the frequency of future advisory votes to approve executive compensation.shareholders. Further, in accordance with Rule 14a-21(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shareholders will be asked to vote again on how frequently the Company should hold future say-on-pay votes at the Company's 2029 annual meeting of shareholders. The Company encourages shareholders to read the “Compensation Discussion and Analysis” (“CD&A”) section of this Proxy Statement beginning on page 3940. As described in the CD&A section, the Compensation and Human Capital Committee has structured the executive compensation program to achieve the following key objectives: Align the interests of NEOs with those of the shareholders through incentives based on achieving performance objectives that enable increased shareholder value Provide incentives for achieving specific, near term corporate, business unit and individualstrategic goals and reward the achievement of those goals Provide incentives for achieving pre-established, longer-term corporate financial goals and reward achievement of those goals Attract and retain talented NEOs who will lead Wolverine Worldwide and drive superior business and financial performance The executive compensation program is designed to achieve these objectives, in part, by: Weighting at-risk and variable compensation (annual bonuses and long-term incentives) much more heavily than fixed compensation (base salaries) Rewarding annual performance while maintaining emphasis on longer-term objectives Blending cash, non-cash, long- and short-term compensation components and current and future compensation components The Company encourages shareholders to read the Summary Compensation Table and other related compensation tables and narrative, appearing on pages 5554- 7472, which provide detailed information on the compensation of the Company's NEOs. The Compensation and Human Capital Committee and the Board of Directors believe the Company's compensation program and its policies and procedures articulated in the CD&A section are effective in aligning the interests of the Company's NEOs with the interests of shareholders, promoting the achievement of the Company's near and long-term objectives and increasing shareholder value. In accordance with the rules under Section 14A of the Exchange Act, and as a matter of good corporate governance, the Company asks shareholders to approve the following advisory resolution at the 20232024 Annual Meeting of Shareholders: RESOLVED, that the shareholders of Wolverine World Wide, Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company's named executive officers disclosed in the Compensation Discussion and Analysis section, the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement for the Company's 20232024 Annual Meeting of Shareholders. BOARD RECOMMENDATION The Board recommends that you vote “FOR” approval of the advisory resolution to approve executive compensation. | 20232024 PROXY STATEMENT
| | 7573
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TABLE OF CONTENTS Proposal 3 — Advisory Vote on the Frequency of Future Advisory Votes to Approve Executive Compensation Pursuant to Section 14A of the Exchange Act, the Company is asking its shareholders to cast an advisory vote on the frequency of future advisory votes to approve executive compensation. Shareholders may specify whether they prefer such votes to occur every year, every two years or every three years, or they may abstain. As noted above, at the 2017 annual meeting of shareholders, the Company held an advisory vote on the frequency of future say-on-pay votes. Our shareholders approved, on an advisory basis, an annual say-on-pay vote, and after consideration of the shareholders’ vote, the Board determined to proceed with an annual say-on-pay vote.
Shareholders are not voting to approve or disapprove the Board’s recommendation. This advisory vote on the frequency of future advisory votes to approve executive compensation is non-binding on the Board of Directors. Notwithstanding the Board’s recommendation and the outcome of the shareholder vote, the Board may decide that it is in the best interests of the Company’s shareholders and the Company to hold an advisory vote to approve executive compensation on a more or less frequent basis and may vary its practice based on factors such as discussions with shareholders and the adoption of material changes to compensation programs.
BOARD RECOMMENDATION
The Board recommends that you vote for conducting future advisory votes to approve executive compensation every “ONE YEAR.”
TABLE OF CONTENTS
Proposal 4 —– Ratification of Appointment of Independent Registered Public Accounting Firm
Ernst & Young LLP (“Ernst & Young”) was the Company’sCompany's independent registered public accounting firm for the fiscal year ended December 31, 2022.30, 2023. The Audit Committee has reappointed Ernst & Young as the Company’sCompany's independent registered public accounting firm for the current fiscal year. As a matter of good corporate governance, the Audit Committee has determined to submit its appointment of Ernst & Young to the Company’sCompany's shareholders for ratification. If this appointment is not ratified by the holders of a majority of votes cast affirmatively or negatively on the matter, the Audit Committee will review its future selection of an independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm any time during the year if it determines that such a change would be in the best interests of the Company and the Company’sCompany's shareholders. The Audit Committee reviewed Ernst & Young’sYoung's performance prior to appointing it as the Company’sCompany's independent registered public accounting firm, and considered: The historical and recent performance of Ernst & Young on the Company’sCompany's audit, including the quality of the engagement team and Ernst & Young’sYoung's experience, client service, responsiveness and technical expertise The Public Company Accounting Oversight Board (“PCAOB”) report of selected Ernst & Young audits The appropriateness of fees charged Ernst & Young’sYoung's familiarity with the Company’sCompany's accounting policies and practices and internal control over financial reporting Ernst & Young’sYoung's financial strength and performance Representatives of Ernst & Young are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions from shareholders. BOARD RECOMMENDATION The Board recommends that you vote “FOR” ratification of the Audit Committee’sCommittee's selection of the firm of Ernst & Young LLP as the Company’sCompany's independent registered public accounting firm for fiscal year 2023.2024. | 20232024 PROXY STATEMENT
| | 7774
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TABLE OF CONTENTS The Audit Committee of the Board of Directors consists of four directors who are independent under the Company's Director Independence Standards, the NYSE listed company standards and applicable SEC standards. The Audit Committee represents and assists the Board in fulfilling its oversight responsibility regarding the Company's financial statements and the financial reporting process, the internal control over financial reporting, the performance of the internal audit function and the independent registered public accounting firm, the qualifications and independence of the independent registered public accounting firm, the annual independent audit of Wolverine Worldwide's financial statements and internal control over financial reporting and compliance with legal and regulatory requirements. The Audit Committee is directly responsible for appointing, retaining, compensating, overseeing, evaluating and terminating (if appropriate) Wolverine Worldwide's independent registered public accounting firm. Wolverine Worldwide's management has primary responsibility for the financial statements and the financial reporting process, including the application of accounting and financial principles, the preparation, presentation and integrity of the financial statements and the systems of internal controls and other procedures designed to promote compliance with accounting standards and applicable laws and regulations. Wolverine Worldwide's independent registered public accounting firm is responsible for expressing an opinion on the conformity of Wolverine Worldwide's financial statements with generally accepted accounting principles and for auditing the effectiveness of Wolverine Worldwide's internal control over financial reporting. The Audit Committee has taken steps to provide assurances regarding Audit Committee composition and procedures, the independence of Wolverine Worldwide's independent registered public accounting firm and the integrity of Wolverine Worldwide's financial statements and disclosures. These steps include: (i) reviewing the Audit Committee Charter; (ii) reviewing with legal counsel and the independent registered public accounting firm the Accounting and Finance Code of Ethics; (iii) maintaining financial, accounting and business ethics complaint procedures to allow employees, shareholders and the public to report concerns regarding Wolverine Worldwide's financial statements, internal controls and disclosures; and (iv) reviewing procedures for the Audit Committee to pre-approve all audit and non-audit services provided by Wolverine Worldwide's independent registered public accounting firm. As part of its supervisory duties, the Audit Committee has reviewed Wolverine Worldwide's audited financial statements for the fiscal year ended December 31, 2022,30, 2023, and has discussed those financial statements with Wolverine Worldwide's management and internal financial staff, and the internal auditors and independent registered public accounting firm with and without management present. The Audit Committee has also reviewed and discussed the following with Wolverine Worldwide's management and the financial staff, and with the internal auditors and independent registered public accounting firm with and without management present: Accounting and financial principles and significant assumptions, estimates and matters of judgment used in preparing the financial statements Allowances and reserves for accounts receivable, inventories and taxes Accounting for acquisitions, pension plans and equity-based compensation plans Goodwill and intangible asset impairment analysis Other significant financial reporting issues and practices The Audit Committee has discussed with Wolverine Worldwide's independent registered public accounting firm the results of its examinations and its judgments concerning the quality, as well as the acceptability, of Wolverine Worldwide's accounting principles and such other matters that it is required to discuss with the independent registered public accounting firm under applicable rules, regulations or generally accepted auditing standards, including the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. In addition, the Audit Committee has received from the independent registered public accounting firm the written disclosures and the letter required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm's communications with the Audit Committee concerning independence and has discussed their independence from Wolverine Worldwide and Wolverine Worldwide's management with them, including a consideration of the compatibility of non-audit services with their independence, the scope of the audit and the scope of all fees paid to the independent registered public accounting firm during the year. After, and in reliance upon the reviews and discussions described above, the Audit Committee recommended to the Board that the audited financial statements for the fiscal year ended December 31, 2022,30, 2023, be included in Wolverine Worldwide's Annual Report on Form 10-K for the year then ended to be filed with the SEC. Respectfully submitted, Jeffrey M. Boromisa (Chair)
Stacia Andersen
William K. Gerber
David T. Kollat
Brenda J. Lauderback
| 20232024 PROXY STATEMENT
| | 7875
| |
TABLE OF CONTENTS Independent Registered Public Accounting Firm The Company's Audit Committee has adopted a policy under which the Audit Committee must approve all audit and non-audit services provided by the Company's independent registered public accounting firm, Ernst & Young LLP, and which prohibits Ernst & Young LLP from providing any non-audit services that are prohibited by the SEC or the PCAOB. The Company's Audit Committee provides categorical pre-approval for routine and recurring services, with specific service descriptions and budgets that include sufficient information to confirm the determination that the provision of such service will not impair the independent registered public accounting firm’s independence. All services not within the specifically pre-approved service descriptions and budgets require engagement specific pre-approval. With certain exceptions (such as pre-approval of audit services), the Audit Committee may delegate engagement specific pre-approval to one or more Audit Committee members, and has so delegated in certain instances to the Audit Committee Chairperson. Management must communicate to the Audit Committee at its next regularly scheduled meeting any services approved by an Audit Committee member. Wolverine Worldwide's Audit Committee pre-approved all fees paid to Ernst & Young LLP for services performed in 20222023 and 2021.2022. The aggregate fees billed by Ernst & Young LLP for audit and non-audit services were: | Audit Fees1 | | | $2,781,300 | | | $2,758,000 | | | Audit-Related Fees2 | | | $— | | | $270,000 | | | Total Audit & Audit-Related Fees | | | $2,781,300 | | | $3,028,000 | | | Tax Fees3 | | | | | | | | | Tax Compliance | | | $1,027,900 | | | $978,400 | | | Tax Planning & Advisory | | | $211,300 | | | $214,000 | | | Total Tax Fees | | | $1,239,200 | | | $1,192,400 | | | All Other Fees | | | — | | | — | | | TOTAL FEES | | | $4,020,500 | | | $4,220,400 | |
| Audit Fees1 | | | $3,027,500 | | | $2,781,300 | | | Audit-Related Fees | | | $— | | | $— | | | Total Audit & Audit-Related Fees | | | $3,027,500 | | | $2,781,300 | | | Tax Fees2 | | | | | | | | | Tax Compliance | | | $596,500 | | | $1,027,900 | | | Tax Planning & Advisory | | | $140,500 | | | $211,300 | | | Total Tax Fees | | | $737,000 | | | $1,239,200 | | | All Other Fees | | | $— | | | — | | | TOTAL FEES | | | $3,764,500 | | | $4,020,500 | |
1
| “Audit Fees” are comprised of fees for the annual audit, including the audit of internal control over financial reporting, interim reviews of the financial statements included in Wolverine Worldwide's Quarterly Reports on Form 10-Q, foreign statutory audits, consultations concerning accounting matters associated with the annual audit, and audit services performed in connection with registration statements and issuance of comfort letters and consents. |
2
| “Audit-Related Fees” consist of due diligence in connection with acquisitions. |
3
| “Tax Fees” are comprised of fees for the preparation of domestic and foreign tax returns, tax compliance services, and routine tax advisory and tax planning services. |
Wolverine Worldwide's Audit Committee has adopted a policy restricting the Company's hiring of current or former partners or employees of the independent registered public accounting firm retained by the Company. | 20232024 PROXY STATEMENT
| | 7976
| |
TABLE OF CONTENTS Proposal 5 —4 – Approval of Amended and Restated Stock Incentive
2024On February 8, 2023 (the “Amendment Date”),March 7, 2024, the Board of Directors unanimously adopted and approved the Wolverine World Wide, Inc. Stock Incentive Plan of 2016, as amended and restated2024 (the “Plan”), subject to shareholder approval. The Plan amends and restatessupersedes the Wolverine World Wide, Inc. Stock Incentive Plan of 2016, which was approved by Company shareholders at the 2016 annual meeting and approved in a restated and amended form by Company shareholders at the 2018 annual meeting, at the 2021 annual meeting and again at the 20212023 annual meeting (the “Current Plan”). The Plan allows grants of cash awards, stock options, stock appreciation rights, restricted stock, restricted stock units and stock awards, any of which may be performance-based, and for incentive bonuses. The only other equity planIf shareholders approve the Plan, the Company will not grant any additional awards under which common stockthe Current Plan and the number of shares remaining available under the Current Plan as of the Company mayeffective date of the Plan will become available for grant under the Plan. Awards previously granted under the Current Plan would be issued isunaffected by the Outside Directors’ Deferred Compensationadoption of the Plan, and they would remain outstanding under the terms pursuant to which authorizes the issuance of shares only to non-employee directors.they were previously granted. If shareholders do not approve the Plan, the Current Plan will remain in existence, but the Company will not have sufficient shares under it to meetmake its short- or long-term needs. The amendment and restatement of the Plan is generally effective on the Amendment Date and makes the following changes, as described in more detail under “Plan Summary” below:
Increases the shares available under the Plan by 6.1 million shares, subject to shareholder approval;
Extends the term of the Plan by approximately two years, fromanticipated February 8, 2031 to February 7, 2033, subject to shareholder approval; and
Makes other technical changes.
Notwithstanding the foregoing, the terms of the Plan, as amended and restated on the Amendment Date, will only apply to awards granted after the Amendment Date.2025 employee grants.
Why You Should Vote For the Plan The Board of Directors recommends that the Company’s shareholders approve the Plan because it believes that equity awards are a critical part of the Company’s compensation program and are essential to the Company’s ability to effectively compete for and appropriately motivate and reward key talent. The Board of Directors believes that it is in the interests of both the Company and its shareholders to strengthen the Company’s ability to attract, motivate and retain high quality employees directors and consultants anddirectors to incentivize such persons to achieveachievement of the Company’s financial and strategic goals through the issuance of equity and other performance-based awards. The Company is seeking shareholder approval of the Plan because the Board of Directors does not believe that the shares available for issuance with respect to equity awards under the Current Plan are sufficient to meet even the Company’s short- or long-termshort-term needs. There are not enough shares available under the Current Plan to make anticipated employee grants in February 2025 in accordance with the Company’s compensation program, as described in connection with NEO compensation in the CD&A Section of this Proxy Statement. The Plan is broad-based, with 377 employees receiving grants under the Current Plan in February 2024, aligning employee and shareholder interests during a time of significant transformation of the Company. Equity grants are a key feature of the Company’s compensation program, which has been approved by an average 97% shareholder say-on-pay vote over the last three years. Equity grants include performance share units (PSUs) that tie executive compensation to both the Company’s stock price and the Company’s financial and relative TSR performance. PSUs are the most at-risk component of executive compensation at the Company and are an effective way to link executive compensation to Company performance. The Company heavily weights CEO and NEO equity awards to this form of grant (70% for the CEO and 60% for other NEOs in 2024). Without shareholder approval of additional shares under the Plan, the Company’s ability to grant shares and focus on at-risk compensation that aligns executive and shareholder interests would be jeopardized at a time when the Company is seeking to make transformational changes under challenging industry conditions. The Company would also potentially face negative cash-flow, accounting and financial implications if it had to shift its compensation programs to be more heavily cash weighted because of insufficient available shares. The Company believes that the availability of an additional 6.13.3 million shares under the Plan in addition to the remaining shares under the Current Plan (approximately 1.1 million shares as of February 9, 2023)the Company’s March 4, 2024 record date) would provide sufficient additional shares to continue to make awards at historical average rates for two years.one year. Management of Dilution and Burn Rate The Company has demonstrated responsible use of shares under the Current Plan and reasonable management of overall dilution. This is explained below in more detail under the “Reasonable Annual Grant Levels” and “Overhang” headings. The Company understands the dilutive effect of equity grants and weighs this effect against the benefits of equity grants under its executive compensation program. TABLE OF CONTENTS Reasonable Annual Grant Levels The Company tracks the number of shares subject to equity awards that it grants annually, commonly referred to as the burn rate. Burn rate shows how rapidly a company is depleting its shares reserved for equity compensation awards and equals the number of equity awards granted as incentives during the year divided by the weighted average number of shares of common stock outstanding during the year. Below is the Company’s burn rate for the past three years: | 2023 | | | — | | | 2,364,879 | | | 79,400,000 | | | 2.98% | | | 2022 | | | 20,171 | | | 1,417,709 | | | 79,700,000 | | | 1.80% | | | 2021 | | | 23,610 | | | 1,285,894 | | | 82,300,000 | | | 1.59% | |
The above burn rate is reasonably aligned to market levels. The Company also tracks an alternative burn rate measure that includes PSUs that vest during a year rather than PSUs that were granted during a year. This measure reflects how many PSUs are earned by executives, providing valuable supplemental information on actual share usage. As the table below shows, when looking at PSU shares earned, the Company’s burn rates are even lower than under the standard measure: | 2023 | | | — | | | 1,864,992 | | | 79,400,000 | | | 2.35% | | | 2022 | | | 20,171 | | | 1,323,746 | | | 79,700,000 | | | 1.67% | | | 2021 | | | 23,610 | | | 836,555 | | | 82,300,000 | | | 1.03% | |
The Company has demonstrated responsible grant rates and share usage. The following table provides information regarding equity awards outstanding and shares available for future awards under all Company stock incentive plans as of February 29, 2024. | Total shares underlying all outstanding stock options | | | 1,608,079 | | | Weighted average exercise price of outstanding stock options | | | $21.57 | | | Weighted average remaining contractual life of outstanding stock options (years) | | | 1.9 | | | Total shares underlying all outstanding and unvested performance shares and units | | | 2,030,192 | | | Total shares underlying all outstanding and unvested restricted stock and units (excluding performance shares and units) | | | 3,145,095 | | | Shares available for future awards that could be issued under Current Plan | | | 1,090,272 | | | New shares requested under the Plan | | | 3,300,000 | | | Total Shares Outstanding | | | 79,900,000 | |
The Board believes that the additional one-year share request is reasonable in light of the Company’s historic share usage rates, the importance of supporting the Company’s at-risk compensation philosophy, and the limited request to cover one additional year. The Board requests shareholder approval of the Plan, further details of which are included below. Promotion of Good Corporate Governance Practices The Plan includes a number of provisions that we believe promote good corporate governance and the interests of shareholders. Under the Plan: Stock options and stock appreciation rights may not be granted with exercise prices lower than the fair market value of the underlying shares on the grant date The administrator may not, without prior approval of the Company’s shareholders, “reprice” any previously granted underwater stock options or stock appreciation rights | 20232024 PROXY STATEMENT
| | 8078
| |
TABLE OF CONTENTS Shares subject to an award under the Plan may not again be made available for issuance under the Plan if such shares were: (i) subject to a stock-settled stock appreciation right and were not issued upon the net settlement or net exerciseNo liberal share recycling of such stock appreciation right, (ii) used to pay the exercise price of a stock option or the purchase price, if any, for an award, (iii) delivered to or withheld by the Company to pay the withholding taxes related to an award, or (iv) repurchased on the open market with the proceeds of a stock option exercise
The Plan has a fungible share feature whereby so-called “full value” awards are counted against the share pool at a higher rate (2.6:1) than stock options or stock appreciations rights
Outstandingfull-value awards under the Plan may be forfeited in the event a participant engages in an act of misconduct
The Plan administrator may recover awards made under the Plan and payments under or gain in respect of any award in accordance with the Company’s Policy for Recovery of Incentive Compensation or any other clawback policy maintained by the Company Awards generally must be granted with vesting schedules pursuant to which they will not vest or become exercisable for at least one year The Plan limits the aggregate grant date value of awards that may be granted to non-employee directors No dividends or dividend equivalents will be paid with respect to restricted stock units or restricted stock, including any performance-based restricted stock units or performance-based restricted stock, until the underlying performance awards vest or are earned, as applicable No dividends or dividend equivalents will be paid with respect to shares subject to stock options or stock appreciation rights Awards generally may not be transferred except by will or the laws of descent and distribution or, if approved by the administrator, to certain family members, family trusts, or family partnerships pursuant to a gift or domestic relations order Awards subject to time-based vesting are subject to “double-trigger” vesting on a change in control of the Company The following table provides information regarding equity awards outstanding and shares available for future awards under all of the Company’s equity plans as of February 9, 2023 (and without giving effect to approval of the Plan under this Proposal 5). We have no equity awards outstanding other than stock options, restricted stock, restricted stock units and performance awards (in the form of both performance restricted stock and performance restricted stock units).
| Total shares underlying all outstanding stock options
| | | 2,070,547
| | | Weighted average exercise price of outstanding stock options
| | | $22.55
| | | Weighted average remaining contractual life of outstanding stock options (years)
| | | 2.5
| | | Total shares underlying all outstanding and unvested performance shares and units
| | | 1,245,341
| | | Total shares underlying all outstanding and unvested restricted stock and units (excluding performance shares)
| | | 1,626,562
| | | Shares available for future awards that could be issued under Current Plan1
| | | 1,070,808
| | | Shares available for future issuance under the Outside Directors’ Deferred Compensation Plan1
| | | 104,499
| |
Section 162(m) of the CodeThe Tax Cuts and Jobs Act on December 22, 2017 eliminated the Section 162(m) performance-based compensation exemption, so the grants and awards made under the Plan are not eligible for such exemption from the $1,000,000 cap on deductibility of NEO compensation.
The following summary of the material terms of the Plan is qualified in its entirety by reference to the complete statement of the Plan, which is set forth in Appendix B to this Proxy Statement. TABLE OF CONTENTS
The Plan will be administered by the Compensation and Human Capital Committee, which is referred to in this summary in its capacity as administrator of the Plan as the “administrator.” Any power of the Compensation and Human Capital Committee as administrator may also be exercised by the Board, of Directors, except to the extent that the grant or exercise of such authority would cause any award or transaction to become subject to (or lose an exemption under) the short-swing profit recovery provisions of Section 16 of the Exchange Act. Subject to the express provisions of the Plan, the administrator is authorized and empowered to do all things that it determines to be necessary or appropriate in connection with the administration of the Plan. All decisions, determinations and interpretations by the Compensation and Human Capital Committee regarding the Plan and awards granted under the Plan will be final and binding on all participants and other persons holding or claiming rights under the Plan or to an award under the Plan. The Compensation and Human Capital Committee may authorize one or more officers of the Company to perform any or all things that the administrator is authorized and empowered to do or perform under the Plan; provided, however, that no such officer may designate himself or herself as a recipient of any awards granted under the authority delegated to such officer and that any delegation of the power to grant awards to an officer must otherwise be consistent with the requirements of Section 157(c) of the Delaware General Corporation Law. The Compensation and Human Capital Committee has designated the Company’s CEO, CFO, general counsel and secretary, and head of the human resource function to assist in administering the Plan and executing award agreements and other documents entered into under the Plan. In addition, the Compensation and Human Capital Committee may delegate any or all aspects of the day-to-day administration of the Plan to one or more officers or employees of the Company or any subsidiary, and/or to one or more agents. Any person who is a current or, to the extent consistent with Section 409A of the Code, prospective officer or employee of the Company or of any Company subsidiary, will be eligible for selection by the administrator for the grant of awards under the Plan. In addition, non-employee directors and any service providers who have been retained to provide consulting, advisory or other services to the Company or to any Company subsidiary will be eligible for the grant of awards under the Plan. Stock options intended to qualify as “incentive stock options” (“ISOs”) within the meaning of Section 422 of the Code may only be granted to employees of the Company or a Company subsidiary. As of March 6, 2023,4, 2024, approximately 74 executive officers, 468377 total employees, and 89 non-employee directors would be eligible to participate in the Plan. As of this same date, the closing price of a share of common stock of the Company was $16.50.$9.63. TABLE OF CONTENTS Shares Subject to the Plan and to Awards Subject to changes in the Company’s capitalization, as of May 3, 2023,2, 2024 (the “Effective Date”), the number of shares of the Company’s common stock authorized for future grant under the Plan will equal 7,170,8083,300,000 shares (theplus the number of shares remaining available for grant under the Current Plan as of February 9, 2023, plus an additional 6,100,000 shares)the Effective Date (as of March 4, 2024, such number is equal to approximately 1.1 million), plus any shares of the Company’s common stock underlying awards outstanding as of February 9, 2023,the Effective Date granted under the Current Plan or the Company’s Stock Incentive Plan of 2013 and the Company’s Stock Incentive Plan of 2010 (collectively, the “Prior Plans”), that, after February 9, 2023,the Effective Date, cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent they are exercised for or settled in vested and non-forfeitable shares), less one share for every share that was subject to an option or stock appreciation right granted. In addition, if, after February 9, 2023 and prior to May 3, 2023 under the Current Plan and 2.6Effective Date, any shares for every share subject to an award other than an option or stock appreciation right granted after February 9, 2023 and prior to May 3, 2023 under the Current Plan. AnyPlan are forfeited, the award expires or is settled for cash (in whole or in part), the shares granted under stock options or stock appreciation rights on or after May 3, 2023 will be counted against this limit on a one-for-one basis, and any shares granted on or after May 3, 2023 under any other awards will be counted against this limit as 2.6 shares for every one share subject to such award.award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future awards under the Plan. The shares issued pursuant to awards granted under the Plan may be shares that are authorized and unissued or issued shares that were reacquired by the Company, including shares purchased in the open market. No fractional shares will be delivered under the Plan. For purposes of determining the share limits described in the paragraph above, the aggregate number of shares issued under the Plan at any time will equal only the number of shares actually issued (as calculated above) upon exercise or settlement of an award. Notwithstanding the foregoing, shares subject to an award under the Plan or the Prior Plans may not again be made available for issuance under the Plan if such shares were: (i) subject to a stock-settled stock appreciation right and were not issued upon the net settlement or net exercise of such stock appreciation right, (ii) used to pay the exercise price of a stock option or the purchase price, if any, for an award, (iii) delivered to or withheld by the Company to pay the withholding taxes related to an award, or (iv) repurchased on the open market with the proceeds of a stock option exercise. Shares subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares subject to awards settled in cash will not count as shares issued under the Plan for purposes of the above limit. Subject to certain adjustments, the aggregate number of shares that may be delivered, or the value of which could be paid in cash or other property, under awards granted under the Plan during any calendar year to any one participant may not exceed 3,600,000 and the aggregate number of shares that may be issued pursuant to the exercise of ISOs granted under the Plan may not exceed 3,600,000. The maximum amount TABLE OF CONTENTS
payable pursuant to that portion of an incentive bonus granted in any calendar year to any participant under the Plan may not exceed $20,000,000.3,300,000. The aggregate grant date fair value of awards (computed as of the date of grant in accordance with applicable financial accounting rules) granted under the Plan during any calendar year to any one non-employee director will not exceed $600,000.
In addition, (i) no portion of any grant of restricted stock will be scheduled to vest prior to the date that is one year following the date the restricted stock is granted; (ii) no portion of any grant of an option or stock appreciation right will be scheduled to become exercisable prior to the date that is one year following the date the option or stock appreciation right is granted; and (iii) no portion of any grant of a restricted stock unit or incentive bonus will be scheduled to vest or be settled, paid or distributed prior to the date that is one year following the date the award is granted; provided; however, that awards that result in the issuance of an aggregate of up to 5% of the gross number of shares ever reserved for issuance under the Plan which gross share reserve will equal 25,600,000 shares, may be granted to eligible persons without regard to the minimum vesting, exercisability, settlement, payment and distribution provisions described in this paragraph. Stock options granted under the Plan may either be ISOs or stock options that are not intended to qualify as ISOs (“nonqualified stock options” or “NQSOs”). The administrator will establish the exercise price per share under each stock option, which will not be less than the fair market value (or 110% of the fair market value in the case of ISOs granted to individuals who own more than 10% of the Company’s common stock) of a share on the date the stock option is granted, except in certain cases where substitute or replacement awards are granted in connection with a merger or acquisition. The administrator will establish the term of each stock option, which in no case may exceed a period of 10 years from the date of grant (or five years in the case of ISOs granted to individuals who own more than 10% of the Company’s common stock). Unless the administrator determines otherwise, (i) upon termination of employment other than due to death, disability, retirement or termination for cause, to the extent vested on the date of such termination, stock options remain exercisable for three months following such date (or until the expiration date of the stock option, if earlier), (ii) upon death or disability, stock options become fully vested and remain exercisable for one year following such event (or until the expiration date of the stock option, if earlier), (iii) upon retirement, stock options become fully vested and remain exercisable until their expiration date, and (iv) upon termination of employment for cause, all stock options are forfeited. No dividends or dividend equivalents may be paid or granted in respect of shares subject to stock options or stock appreciation rights and no holder of a stock option is entitled to any dividends with respect to the shares subject to stock options or appreciation rights unless and until such awards have vested and have been exercised in accordance with the terms of the Plan and the applicable award agreement and such shares are reflected as issued and outstanding. TABLE OF CONTENTS Stock Appreciation Rights A stock appreciation right provides the right to receive the monetary equivalent of the increase in value of a specified number of the shares over a specified period of time after the right is granted. Stock appreciation rights may be granted to participants either in tandem with or as a component of other awards granted under the Plan (“tandem SARs”) or not in conjunction with other awards (“freestanding SARs”). All freestanding SARs will be granted subject to the same terms and conditions applicable to options as set forth above and in the Plan, and all tandem SARs will have the same exercise price, vesting, exercisability, forfeiture and termination provisions as the award to which they relate. Restricted Stock and Restricted Stock Units Restricted stock is an award or issuance of shares the grant, issuance, retention, vesting and/or transferability of which is subject during specified periods of time to certain conditions (including continued employment or performance conditions) determined by the administrator. Restricted stock units are awards denominated in units of shares under which the issuance of shares is subject to such conditions (including continued employment or performance conditions) and terms as the administrator deems appropriate. Notwithstanding the satisfaction of any performance goals, the number of shares granted, issued, retainable and/or vested under an award of restricted stock or restricted stock units on account of either financial performance or personal performance evaluations may be reduced, but not increased, by the administrator on the basis of such further consideration as the administrator may determine. Unless the administrator determines otherwise, (i) upon termination of employment for any reason other than death, disability or retirement, all restricted stock and restricted stock units still subject to restrictions as of the date of termination will be forfeited, and (ii) upon death, disability or retirement, in general, the restrictions remaining on a participant’s restricted stock and restricted stock units will lapse, except that any applicable qualifying performance criteria will not lapse upon a participant’s retirement. Unless otherwise determined by the administrator, participants holding shares of restricted stock granted under the Plan may exercise full voting rights with respect to those shares during the period of restriction, but participants will have no voting rights with respect to shares underlying restricted stock units unless and until such shares are reflected as issued and outstanding shares on the Company’s stock ledger. TABLE OF CONTENTS
The administrator will determine the extent to which participants are entitled to receive dividends or dividend equivalents with respect to restricted stock and shares underlying restricted stock units. Any cash or stock dividends and dividend equivalents with respect to restricted stock and restricted stock units, granted as performance awards, if any, will be withheld by the Company for the participant’s account and will be paid, if at all, (i) in the case of restricted stock, upon the achievement of the applicable performance measure(s) and the satisfaction of any other restrictions imposed on the restricted stock in respect of which the dividends were paid (including, if applicable, the achievement of applicable performance measure(s)) and (ii) in the case of restricted stock units, at the time the shares and/or cash underlying such restricted stock units is paid, and any dividends deferred in respect of any restricted stock and restricted stock units granted as performance awards will be forfeited upon the forfeiture of such restricted stock and restricted stock units. Any non-cash dividends or distributions paid with respect to restricted stock and restricted stock units granted as performance awards will be subject to the same restrictions that apply to the award to which they relate. Stock awards may be granted under the Plan with such terms and conditions as determined by the administrator, consistent with the 5% limit set forth above under “Shares Subject to the Plan and to Awards.” Participants will have all voting, dividend, liquidation and other rights with respect to shares underlying a stock award upon becoming a shareholder of record, but such awards may be subject to restrictions on transfer as determined by the administrator. An incentive bonus will confer upon the participant the opportunity to earn a future payment, in cash or shares, tied to the level of achievement with respect to one or more performance criteria established for a performance period of not less than one year. The administrator will establish the terms and conditions to which the award is subject, including performance criteria and the level of achievement of the criteria that will determine the target and maximum amounts payable under an incentive bonus award, which criteria may be based on financial performance and/or personal performance evaluations. Notwithstanding the satisfaction of any performance goals, the amount paid under an incentive bonus award on account of either financial performance or personal performance evaluations may be adjusted by the administrator as set forth in the Plan. TABLE OF CONTENTS The administrator may, in an award agreement or otherwise, provide for the deferred delivery of shares upon settlement, vesting or other events with respect to restricted stock or restricted stock units, or for the deferred payment or satisfaction of an incentive bonus. However, in no event will any deferral of the delivery of shares or any other payment with respect to any award be allowed if the administrator determines, in its sole and absolute discretion that the deferral would result in the imposition of the additional tax under Section 409A of the Code. Notwithstanding the foregoing and to the extent compliant with Section 409A of the Code, if the administrator permits any deferral of shares or any other payment as described above, payment of any vested award that a participant has elected to defer will be made regardless of any deferral election within thirty (30) days of a change in control or the participant’s separation from service (including death). Qualifying Performance Criteria With respect to performance-based awards the administrator may establish performance criteria and level of achievement of such criteria that will determine the number of shares to be granted, retained, vested, issued or issuable under or in settlement of or the amount payable pursuant to an award, which criteria may be based on “qualifying performance“performance criteria” (as described below) or other standards of financial performance and/or personal performance evaluations. For purposes of the Plan, the term “qualifying performance“performance criteria” means an objectively determinable measure of performance relating to any one or more of the following performance criteria, or derivations of such performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit, division, line or subsidiary, either individually, alternatively or in any combination, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to an index or indices or a designated comparison group or groups, in each case as specified by the administrator: (i) net earnings or earnings per share (including earnings before interest, taxes, depreciation and/or amortization), (ii) income, net income or operating income, (iii) revenues, (iv) net sales, (v) return on sales, (vi) return on equity, (vii) return on capital (including return on total capital or return on invested capital), (viii) return on assets or net assets, (ix) earnings per share, (x) economic or business value added measurements (xi) return on invested capital, (xii) return on operating revenue, (xiii) cash flow (before or after dividends), (xiv) stock price, (xv) total shareholder return, (xvi) market capitalization, (xvii) economic value added, (xviii) debt leverage (debt to capital), (xix) operating profit or net operating profit, (xx) operating margin or profit margin, (xxi) cash from operations, (xxii) market share, (xxiii) product development or release schedules, (xxiv) new product innovation, (xxv) cost reductions, (xxvi) customer acquisition or retention, (xxvii) customer service, (xxviii) customer satisfaction, or (xxix) other performance criteria selected by the Administrator. 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The administrator may adjust performance results for any recapitalization, reorganization, merger, acquisition, divestiture, consolidation, spin-off, combination, liquidation, dissolution, sale of assets or other similar corporate transaction or event, or any other extraordinary event or circumstance occurs which has the effect, as determined by the Administrator, in its sole and absolute discretion, of distorting the applicable performance criteria involving the Company. Suspension or Termination of Awards Unless otherwise determined by the administrator, (i) if the Company’s chief executive officer or any other person designated by the administrator reasonably believes that a participant may have committed an act of misconduct (as defined in the Plan), then the participant’s rights to exercise any stock option, vest in any award and/or receive payment for or shares in settlement of an award, may be suspended pending a determination of whether such misconduct has been committed, and (ii) if the administrator, the Company’s chief executive officer or any other person designated by the administrator determines that a participant has committed an act of misconduct, then the participant (a) may not exercise any stock option or stock appreciation right, vest in any award, have restrictions on an award lapse or otherwise receive payment of an award, (b) will forfeit all outstanding awards, and (c) may be required, at the discretion of the administrator, to return or repay to the Company any then unvested shares previously issued under the Plan. In addition, the administrator may seek to recover awards made under the Plan and payments under or gain in respect of any award in accordance with the Company’s Policy for Recovery of Incentive Compensation or any successor or additional clawback or recoupment policy or as otherwise required by applicable law or applicable stock exchange listing standards. Awards (other than stock awards), may be settled in shares, cash or a combination thereof, as determined by the administrator. TABLE OF CONTENTS No Repricing Without Shareholder Approval Other than in connection with certain changes in the Company’s capitalization, the administrator may not, without prior approval of the Company’s shareholders, effect any “repricing” of a previously granted stock option or stock appreciation right that is “underwater” (i.e., the fair market value of the shares underlying such award is less than the exercise price of such award) by (i) amending or modifying the terms of the award to lower the exercise price; (ii) canceling the underwater award and granting either (a) replacement stock options or stock appreciation rights, as applicable, having a lower exercise price or (b) restricted stock, restricted stock units, performance awards or stock awards in exchange; or (iii) cancelling or repurchasing the underwater award for cash or other securities. Amendment and Termination The Board of Directors may amend, alter or discontinue the Plan, and the administrator may amend or alter any agreement or other document evidencing an award made under the Plan, except that, unless in connection with a change in the capitalization of the Company or a change in control, no such amendment or alteration may, without the approval of the shareholders of the Company: (i) increase the maximum number of shares for which awards may be granted under the Plan, (ii) reduce the minimum price set forth in the Plan at which stock options or stock appreciation rights may be granted, (iii) reduce the exercise price of outstanding stock options or stock appreciation rights, (iv) extend the term of the Plan, (v) change the class of persons eligible to be participants, (vi) otherwise amend the Plan in any manner requiring shareholder approval by law or under the New York Stock Exchange listing requirements (or the listing requirements of any successor exchange that is the primary stock exchange for trading of the Company’s shares), or (vii) increase the individual maximum limits set forth in the Plan. Except as set forth in the Plan, no amendment or alteration to the Plan or an award or award agreement may be made that would impair the rights of the holder of an award without such holder’s consent. In addition, the Plan may not be amended in any way that causes the Plan to fail to comply with or be exempt from Section 409A of the Code, unless the Board of Directors expressly determines to amend the Plan to be subject to Section 409A of the Code. The administrator may, in its sole and absolute discretion, modify the provisions of the Plan or an award as they pertain to a participant who is employed or providing services outside the United States in order to comply with applicable foreign law or to recognize differences in local law, currency or tax policy. TABLE OF CONTENTS
Awards granted under the Plan that are subject to vesting based on continuous employment or service, to the extent awards are assumed or substituted by an acquirer in the change in control (as defined in the Plan) awards shall not immediately vest upon the change in control and instead shall continue to vest in accordance with their terms, provided that if a participant experiences a termination of employment (as defined in the Plan) by the Company without cause (as defined in the Plan) or by the participant for good reason (as defined in the Plan), in each case, within the twenty-four (24) month period following the change in control, the awards shall immediately vest and become exercisable or shall be settled upon such qualifying termination. If, at any time during the vesting period of an award, a participant is or becomes eligible to terminate his or her employment with the Company or its Subsidiaries due to retirement, the award shall immediately vest in full upon the change in control. For awards granted under the Plan that are subject to performance conditions, if a change in control occurs prior to the end date of a performance period, to the extent the performance award is outstanding immediately prior to such change in control, such award will vest (a) based on actual performance through the date of the change in control as determined by the administrator (treating the change in control as the end of the applicable performance period) without proration for the time elapsed in such performance period prior to such change in control for purposes of determining performance, but in the discretion of the administrator, prorated for purposes of elapsed time in a manner consistent with subsection (b) below, (b) assuming that target level of performance is attained and prorated based on the number of days in the performance period that elapsed prior to the change in control over the total number of days in the performance period, or (c) a combination of (a) and (b) (without double counting). Any portion of the performance award (or the full award as applicable) that does not vest in connection with a change in control as contemplated herein will automatically terminate upon such change in control. Subject to and limited by the requirements of the preceding paragraphs, the administrator shall determine the effect of a change in control (as defined in the Plan) on outstanding awards. These effects, which need not be the same for all participants, may include, but are not limited to (i) substituting for the shares subject to an outstanding award or portion thereof the stock or securities of the surviving corporation or any successor corporation (or parent or subsidiary thereof), in which event the aggregate exercise price of the award will remain the same, and/or TABLE OF CONTENTS (ii) converting any outstanding award or portion thereof into a right to receive cash or other property following the consummation of the change in control in an amount equal to the value of the consideration to be received for one share of the Company’s common stock in connection with such transaction less the purchase or exercise price of the shares subject to the award, if any, multiplied by the number of shares subject to the award or portion thereof. The administrator may determine that some or all participants holding vested and exercisable stock options or stock appreciation rights will receive with respect to some or all of the shares subject to such awards cash in an amount equal to the excess of (i) the greater of (a) the highest sales price of the shares on the New York Stock Exchange (or any successor exchange that is the primary stock exchange for trading of the Company’s shares) on the date immediately prior to the change in control and (b) the highest price per share actually paid in connection with the change in control, over (ii) the exercise price of the award. The number and kind of shares available for issuance under the Plan, and the number and kind of shares subject to the individual and ISO limits set forth under the Plan, will be equitably adjusted by the administrator to reflect any reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend or distribution of securities, property or cash (other than regular, quarterly cash dividends), or any other event or transaction that affects the number or kind of shares of the Company outstanding. The terms of any outstanding award will also be equitably adjusted by the administrator as to price, number or kind of shares subject to such award and other terms to reflect the foregoing events, which adjustments need not be uniform as between different awards or different types of awards. In the event there is a change in the number or kind of outstanding shares under the Plan as a result of a change of control, other merger, consolidation or otherwise, then the administrator will determine the appropriate and equitable adjustment to be effected. In addition, in the event of such a change, the administrator may accelerate the time or times at which any award may be exercised (subject to the limitations described above under the “Change in Control” heading) and may provide for cancellation of such accelerated awards that are not exercised within a time prescribed by the administrator in its sole discretion. Unless the administrator determines otherwise, awards may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated by a participant other than by will or the laws of descent and distribution, and each stock option or stock appreciation right may be exercisable only by the participant during his or her lifetime. To the extent permitted by the administrator, the person to whom an award is initially granted may transfer awards, in certain limited circumstances, to certain family members, family trusts, or family partnerships. TABLE OF CONTENTS
No Right to Company Employment Nothing in the Plan or an award agreement will interfere with or limit in any way the right of the Company, its subsidiaries and/or its affiliates to terminate any participant’s employment, service on the Board of Directors or service for the Company at any time or for any reason not prohibited by law, nor will the Plan or an award itself confer upon any participant any right to continue his or her employment or service for any specified period of time. Neither an award nor any benefits arising under the Plan will constitute an employment contract with the Company, any subsidiary and/or its affiliates. Effective Date and Termination of the Plan The Plan was adopted by the Board of Directors on February 8, 2023,March 7, 2024, subject to shareholder approval. The Plan will remain available for the grant of awards until February 7, 2033,March 6, 2034, unless earlier terminated by the Board of Directors.Board. If shareholders do not approve this proposal, the Company can continue to make awards under the Current Plan to the extent of the number of shares authorized and remaining available under the Current Plan as of immediately prior to the Amendment Date. Any award granted on or after the Amendment Date, to the extent that the number of shares subject to such award, or portions thereof, exceeds the number of shares authorized under the Current Plan as of the Amendment Date, shall be void as determined by the Administrator if shareholder approval of the Plan is not obtained.Plan. Federal Income Tax Treatment The following discussion is a general summary as of the date of this Proxy Statement of the significant U.S. federal income tax consequences to the Company and the participants in the Plan. The discussion is intended solely for general information and does not make specific representations to any participant. The discussion does not address state, local or foreign income tax rules or other U.S. tax provisions, such as estate or gift taxes. A recipient’s particular situation may be such that some variation of the basic rules is applicable to him or her. In addition, the federal income tax laws and regulations are frequently revised and may change at any time. Therefore, each recipient is urged to consult a TABLE OF CONTENTS tax advisor before exercising any award or before disposing of any shares acquired under the Plan both with respect to federal income tax consequences as well as any foreign, state or local tax consequences. The Company does not anticipate that awards granted under the Plan will qualify as performance-based compensation under Section 162(m) of the Code. ISOs and NQSOs are treated differently for federal income tax purposes. ISOs are intended to comply with the requirements of Section 422 of the Code. NQSOs do not comply with such requirements. In general, a participant is not taxed on the grant or exercise of an ISO. The difference between the exercise price and the fair market value of the shares on the exercise date may, however, be a preference item for purposes of the alternative minimum tax. If a participant holds the shares acquired upon exercise of an ISO until the later of two years following the stock option grant date and one year following exercise, the gain, if any, upon a subsequent disposition of such shares will be long-term capital gain. The amount of the gain will be the difference between the proceeds received on disposition and the participant’s basis in the shares (which generally equals the exercise price). If a participant disposes of stock acquired pursuant to exercise of an ISO before satisfying these holding periods, the participant will recognize as ordinary income in the year of disposition an amount equal to the excess of the fair market value of the shares at the time of exercise (or, if less, the amount realized on the disposition of the shares), over the exercise price paid for the shares, and capital gain or loss for any other difference between the sale price and the exercise price. The Company is not entitled to an income tax deduction on the grant or exercise of an ISO or on the participant’s disposition of the shares after satisfying the holding period requirement described above. If the holding periods are not satisfied, the Company generally will be entitled to a deduction in the year the participant disposes of the shares in an amount equal to the ordinary income recognized by the participant. The Company does not guarantee that any option intended to be an ISO will qualify for the tax treatment of ISOs described above. If an option intended to be an ISO fails to so qualify, it will be taxed as an NQSO, as described below. In general, a participant is not taxed on the grant of an NQSO. On exercise, the participant recognizes ordinary income equal to the difference between the exercise price and the fair market value of the shares acquired on the date of exercise. The Company is generally entitled to an income tax deduction in the year of exercise in the amount recognized by the participant as ordinary income. The participant’s gain (or loss) on subsequent disposition of the shares is long-term capital gain (or loss) if the shares are held for at least one year following exercise, and otherwise is short-term capital gain (or loss). The Company does not receive a deduction for any such capital gain. TABLE OF CONTENTS
Stock Appreciation Rights In general, the recipient of a freestanding SAR will not recognize any taxable income at the time the freestanding SAR is granted. If the freestanding SAR is settled in cash, the cash will be taxable as ordinary income to the recipient at the time that it is received. If the freestanding SAR is settled in shares, the recipient will recognize ordinary income equal to the excess of the fair market value of the shares on the day the freestanding SAR is exercised over any amounts paid by the recipient for the shares. With respect to tandem SARs, if a holder elects to surrender the underlying stock option in exchange for cash or stock equal to the appreciation inherent in the underlying stock option, the tax consequences to the employee will be the same as discussed above relating to freestanding SARs. If the employee elects to exercise the underlying stock option, the holder will be taxed at the time of exercise as if he or she had exercised an NQSO (discussed above). The Company generally is entitled to a deduction with respect to a SAR at the same time the recipient recognizes ordinary income with respect thereto. Restricted Stock and Restricted Stock Units A participant who is awarded or purchases shares subject to a substantial risk of forfeiture, or restricted stock, generally does not recognize income at the time of the grant. When the risk of forfeiture lapses, the participant generally recognizes ordinary income in an amount equal to the excess of the fair market value of the shares over the purchase price, if any, and a deduction is generally available to the Company in the same year that the participant recognizes income. However, a participant may make an election under Section 83(b) of the Code to recognize taxable ordinary income at the time the shares are transferred to the participant, rather than later, when the risk of forfeiture lapses, in an amount equal to the fair market value of the shares at the time of such transfer. Such election must be made no later than 30 days after the date the shares are transferred to the participant. If the participant makes a timely and effective election, when the restrictions on the shares lapse, the participant will not recognize any additional income. For purposes of determining capital gain or loss on a sale of shares acquired under a restricted stock award under the Plan, the holding period in the shares begins when the participant recognizes taxable income with respect to the transfer. The participant’s tax basis in the shares equals the amount paid for the shares plus any income realized with respect to the transfer. If the participant TABLE OF CONTENTS forfeits the shares to the Company (e.g., upon the participant’s termination prior to vesting), the participant may not claim a deduction with respect to the income recognized as a result of the election. Dividends (if any) paid with respect to unvested shares of restricted stock generally will be taxable as ordinary income to the participant at the time the dividends are paid, if an effective 83(b) election was not made with respect to the shares. A participant who is awarded restricted stock units generally does not recognize income at the time of grant. Instead, the participant is generally taxed upon settlement of the award (and a corresponding deduction is generally available to the Company), unless he or she has made a proper election to defer receipt of the shares (or cash if the award is cash settled) under Section 409A of the Code. (FICA taxes will apply upon the vesting of the restricted stock unit award.) If the shares delivered are restricted for tax purposes, the participant will instead be subject to the rules described above for restricted stock. A participant who receives a stock award generally is required to recognize ordinary income in an amount equal to the excess of the fair market value of the shares on the date the shares are granted over the purchase price (if any) paid for the shares. The Company generally will be entitled to a deduction with respect to stock awards at the same time the recipient recognizes ordinary income with respect thereto. A participant will have taxable income at the time an incentive bonus is paid. At that time, the participant will recognize ordinary income equal to the value of the amount then payable and, the Company generally will be entitled to a corresponding deduction. Certain Change in Control Payments Under Section 280G of the Code, the vesting or accelerated exercisability of stock options or the vesting and payments of other awards in connection with a change in control of a corporation may be required to be valued and taken into account in determining whether participants have received compensatory payments, contingent on the change in control, in excess of certain limits. If these limits are exceeded, a substantial portion of amounts payable to the participant, including income recognized by reason of the grant, vesting or exercise of awards, may be subject to an additional 20% federal tax, which is non-deductible to the Company. TABLE OF CONTENTS
The benefits that will be awarded or paid under the Plan are not currently determinable. Awards granted under the Plan are within the discretion of the Compensation and Human Capital Committee. NoInformation about awards madegranted in fiscal year 2023 under the Current Plan prior to the date of the Annual Meeting were granted subject to shareholder approval. The following table sets forth the number of PSUs (at target), restricted stock units, restricted stock awards and stock options that have been granted to theCompany’s named executive officers andcan be found in the specified groups set forth below sincetable under the Plan’s inception:heading “Grants of Plan-Based Awards in Fiscal Year 2023” on page 56 of this proxy statement. As of December 29, 2023, the closing price of a share of Wolverine common stock on the NYSE was $8.89. | Brendan Hoffman
President and CEO, Wolverine Worldwide | | | 321,607 | | | — | | | 158,466 | | | Chris Hufnagel
President, Active Group | | | 62,993 | | | 32,294 | | | 56,421 | | | Isabel Soriano
President, International Group | | | 37,651 | | | — | | | 34,976 | | | Michael D. Stornant
EVP, CFO, Treasurer and Chief
Accounting Officer | | | 135,491 | | | 70,948 | | | 94,273 | | | James D. Zwiers
EVP and President, Global Operations Group | | | 123,866 | | | 64,465 | | | 85,920 | | | All executive officers as a group | | | 681,608 | | | 167,707 | | | 430,056 | | | All non-employee directors and director nominees as a group | | | 753,713 | | | 115,431 | | | 701,796 | | | Each associate of the above-mentioned executive officers, directors and director nominees | | | — | | | — | | | — | | | Each other person who received or is to receive 5% of such options, warrants or rights | | | — | | | — | | | — | | | All employees as a group, excluding executive officers | | | 567,109 | | | 440,010 | | | 2,032,412 | |
Registration with the SEC The Company intends to file with the SEC a registration statement on Form S-8 covering the new shares reserved for issuance under the Plan in the second quarter of 2023.2024. Equity Compensation Plan Information The following table provides information about the Company’s equity compensation plans as of December 31, 202230, 2023 (and does not include the 6.13.3 million shares of common stock that are the subject of this Proposal 5)4): | Equity compensation plans approved by security holders | | | 2,333,4102,3 | | | $22.43 | | | 5,648,3104 | | | Equity compensation plans not approved by security holders | | | — | | | — | | | — | | | Total | | | 2,333,410 | | | $22.43 | | | 5,648,310 | |
| Equity compensation plans approved by security holders | | | 1,961,0162,3 | | | $22.56 | | | 8,085,4254 | | | Equity compensation plans not approved by security holders | | | — | | | — | | | — | | | Total | | | 1,961,016 | | | $22.56 | | | 8,085,425 | |
1.
| Each plan for which aggregated information is provided contains customary anti-dilution provisions that are applicable in the event of a stock split, stock dividend or certain other changes in the Company’s capitalization. |
2.
| Includes: (i) 2,086,8641,772,382 stock options awarded to employees under the Amended and Restated Stock Incentive Plan of 1999, the Amended and Restated Stock Incentive Plan of 2001, the Amended and Restated Stock Incentive Plan of 2003, the Amended and Restated Stock Incentive Plan of 2005, the Stock Incentive Plan of 2010, the Stock Incentive Plan of 2013 and the Stock Incentive Plan of 2016, as amended and restated (Current Plan);restated; and (ii) and 246,546188,634 stock options awarded to non-employee directors under the Amended and Restated Stock Incentive Plan of 2005, the Stock Incentive Plan of 2010, the Stock Incentive Plan of 2013 and the Stock Incentive Plan of 2016, (Current Plan). Column (a) does not include stock units credited to outside directors’ fee accounts or retirement accounts under the Outside Directors’ Deferred Compensation Plan. Stock units do not have an exercise price. Each stock unit credited to a director’s fee accountas amended and retirement account under the Outside Directors’ Deferred Compensation Plan will be converted into one share of common stock upon distribution. Column (a) also does not include shares of restricted or unrestricted common stock previously issued under the Company’s equity compensation plans. |
TABLE OF CONTENTS restated. Column (a) does not include stock units credited to outside directors’ fee accounts or retirement accounts under the Outside Directors’ Deferred Compensation Plan. Stock units do not have an exercise price. Each stock unit credited to a director’s fee account and retirement account under the Outside Directors’ Deferred Compensation Plan will be converted into one share of common stock upon distribution. Column (a) also does not include shares of restricted or unrestricted common stock previously issued under the Company’s equity compensation plans. 3.
| Of this amount, 36,90910,959 options were not exercisable as of December 31, 202230, 2023 due to vesting restrictions. |
4.
| Comprised of: (i) 104,49993,742 shares available for issuance under the Outside Directors’ Deferred Compensation Plan upon the retirement of the current directors or upon a change in control; and (ii) 5,543,8117,991,683 shares issuable under the Stock Incentive Plan of 2016.2016, as amended and restated. |
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The Outside Directors’ Deferred Compensation Plan is a supplemental, unfunded, nonqualified deferred compensation plan for non-employee directors. Beginning in 2006, the Company began paying an annual equity retainer to non-management directors in the form of a contribution under the Outside Directors’ Deferred Compensation Plan. Non-management directors may also voluntarily elect to receive, in lieu of some or all directors’ fees, a number of stock units equal to the amount of the deferred directors’ fees divided by the fair market value of the Company’s common stock on the date of payment. These stock units are increased by a dividend equivalent based on dividends paid by the Company and the amount of stock units credited to the participating director’s fee account and retirement account. Upon distribution, the participating directors receive a number of shares of the Company’s common stock equal to the number of stock units to be distributed at that time. Distribution is triggered by termination of service as a director or by a change in control of the Company and can occur in a lump sum, in installments or on another deferred basis. A total of 309,164303,702 shares have been issued to a trust to satisfy the Company’s obligations when distribution is triggered and are included in shares the Company reports as issued and outstanding. The Stock Incentive Plan of 2016, as previously amended and restated, is an equity-based incentive plan for officers, key employees, and directors. Such plan authorizes awards of stock options, restricted common stock, common stock, restricted stock units and/or stock appreciation rights. The Stock Incentive Plan of 2016, as amended and restated, provides that each share of restricted or unrestricted common stock and each restricted stock unit issued under the plan is counted as 2.6 shares against the total number of shares authorized for issuance under the plan. The number of securities listed as remaining available in column (c) of the table assumes only stock options will be issued under the plan in the future; each stock option counts as only one share against the total number of shares authorized for issuance under the plan. Actual shares available under the plan will be less to the extent that the Company awards restricted common stock, unrestricted common stock or restricted stock units under the plan. The numbers provided in this footnote and in column (c) will increase to the extent that options relating to the number of shares listed in column (a) of the table or other outstanding awards (e.g., shares of restricted or unrestricted stock, restricted stock units or stock appreciation rights) previously issued under the plan are canceled, surrendered, modified, exchanged for substitutes, expire or terminate prior to exercise or vesting because the number of shares underlying any such awards will again become available for issuance under the plan under which the award was most recently approved by Company shareholders at the 2018 annual meeting and at the 2021 annual meeting and is the subject of this Proposal 5.granted. Of the total number of shares available under column (c), the number of shares with respect to the following plans may be issued other than upon the exercise of an option, warrant or right outstanding as of December 31, 2022:30, 2023: Outside Directors’ Deferred Compensation Plan: 104,49993,742 Current Plan: 2,132,235Stock Incentive Plan of 2016, as amended and restated: 3,073,724
VOTE REQUIRED AND BOARD RECOMMENDATION Approval of the Wolverine World Wide, Inc. Stock Incentive Plan of 2016, as amended and restated,2024, requires the affirmative vote of a majority of votes cast affirmatively or negatively on the matter for approval. BOARD RECOMMENDATION The Board recommends that you vote “FOR” approval of the Stock Incentive Plan of 2016, as Amended and Restated.2024. | 20232024 PROXY STATEMENT
| | 9087
| |
TABLE OF CONTENTS CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Since January 2, 2022,1, 2023, the Company has not engaged in any “related person” transactions with any person who is or was during the last fiscal year a director, executive officer, nominee for director or holder of 5% or more of Company voting securities, affiliate or any member of the immediate family of the foregoing persons. RELATED PERSON TRANSACTIONS POLICY Wolverine Worldwide's Board adopted written policies and procedures regarding related person transactions. They require the Governance Committee to review and either approve or disapprove the Company entering into any Interested Transactions (defined below). If advance approval is not feasible, then the Governance Committee must review and ratify the Interested Transaction at its next meeting. | Interested Transaction | | | Any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which: | | | | | | (1) | | | The aggregate amount involved isexceeds or is expected to exceed $120,000 since the beginning of Wolverine Worldwide's last completed fiscal year; | | | | | | (2) | | | Wolverine WorldwideThe Company or any of its subsidiaries is a participant; and
| | | | | | (3) | | | Any Related Person (defined below) has or will have a direct or indirect interest. | | | | | | | | | | | | | | | An Interested Transaction does not include: | | | | | | (1) | | | Any employment compensation paid to an executive officer of the Company if the Compensation Committee approved or recommended to the Board of Directors for approval of such compensation; | | | | | | (2) | | | Any compensation paid to a director for service as a director of the Company; | | | | | | (3) | | | Any transaction in which a Related Person has an indirect interest solely as a result of being (i) a director or, together with all other Related Persons, as defined below, a less than 10% beneficial owner of an equity interest in another entity, or both, or (ii) a limited partner in a partnership in which the Related Person, together with all other Related Persons, has an interest of less than 10%; | | | | | | (4) | | | Any transaction in which the Related Person's interest arises solely from the ownership of the Company's common stock and all holders of the Company's common stock received the same benefit on a pro rata basis (e.g., a dividend); or | | | | | | (5) | | | Any transaction with another publicly traded company where the Related Person's interest arises solely from the ownership of more than 5% of the Company's common stock and the ownership of a non-controlling interest in the other publicly traded company. | | | Related Person | | | Any: | | | | | | (a) | | | Person who is or was at(at any point duringtime since the beginning of the Company’s last completed fiscal year for which Wolverine Worldwide filed an Annual Report on Form 10-K and Proxy Statement,even if they do not presently serve in that role), an executive officer, a director or, to the extent information regarding such nominee is being presented in a proxy or information statement relating to the election of that nominee as a director, a nominee for election as a director; | | | | | | (b) | | | Beneficial owner of greater than five percent of Wolverine Worldwide's common stock; or | | | | | | (c) | | | Immediate family member* of any of the foregoing. | |
*
| Immediate family member is defined as a person's spouse, parents, stepparents, children, stepchildren, siblings, mothers and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law, and anyone residing in such person's home (other than a tenant or employee). |
The Governance Committee considers whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, the extent of the Related Person's interest in the transaction, and other factors that it deems relevant. No director participates in any discussion or approval of an Interested Transaction for which he or she is a Related Person, except to provide information to the Governance Committee. | 20232024 PROXY STATEMENT
| | 9188
| |
TABLE OF CONTENTS For information about how to view the list of shareholders entitled to vote at the Annual Meeting during the ten days preceding the Annual Meeting, please visit our 20232024 Annual Meeting website at www.wolverineworldwide.com/2023annualmeeting.2024annualmeeting. DIRECTOR AND OFFICER INDEMNIFICATION The Company indemnifies its directors and NEOs to the fullest extent permitted by law so that they will be free from undue concern about personal liability in connection with their service to the Company. DELINQUENT SECTION 16 REPORTS Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who beneficially own more than 10% of the outstanding shares of the Company’s common stock, to file reports of ownership and changes in ownership of shares of common stock with the SEC. Directors, executive officers and greater than 10% beneficial owners are required by SEC regulations to furnish Wolverine Worldwide with copies of all Section 16(a) reports they file. Based on its review of the copies of such reports received by it, or written representations from certain reporting persons, the Company believes that during fiscal year 2023, its officers and directors filed the required reports under Section 16(a) on a timely basis, except two transactions each for Mr. Rasch, Ms. Klimek, Mr. Stornant and Mr. Zwiers, due to administrative errors. SHAREHOLDER PROPOSALS FOR INCLUSION IN NEXT YEAR'S PROXY STATEMENT Pursuant to SEC Rule 14a-8, some shareholder proposals may be eligible for inclusion in Wolverine Worldwide's 2024 Proxy Statement and proxy card. Any such shareholder proposals must be submitted in writing to the Secretary of Wolverine Worldwide no later than the close of business on November 23, 2023.20, 2024. You should address all shareholder proposals to the attention of Secretary, Wolverine World Wide, Inc., 9341 Courtland Drive, NE, Rockford, Michigan 49351. OTHER SHAREHOLDER PROPOSALS FOR PRESENTATION AT NEXT YEAR'S ANNUAL MEETING The Company's By-Laws require that any shareholder proposal that is not submitted for inclusion in next year's Proxy Statement under SEC Rule 14a-8, but is instead sought to be presented directly at the 20242025 Annual Meeting of Shareholders, must be received at the Company's principal executive offices by the close of business not less than 90 days nor more than 120 days prior to the first anniversary of the 20232024 Annual Meeting. As a result, proposals, including director nominations submitted pursuant to these provisions of the By-Laws, must provide the information set forth in the By-Laws (which includes information required under Rule 14a-19) and be received no earlier than January 4, 20242, 2025 and no later than the close of business on February 3, 2024.1, 2025. You should address a proposal to Secretary, Wolverine World Wide, Inc., 9341 Courtland Drive, NE, Rockford, Michigan 49351, and include the information and comply with the requirements set forth in those By-Laws, which the Company has posted on its website. SEC rules permit management to vote proxies in its discretion in certain cases if the shareholder does not comply with this deadline, and in certain other cases notwithstanding the shareholder's compliance with this deadline. Shareholders of record at the close of business on March 6, 2023,4, 2024, are eligible to vote at the Annual Meeting. The Company's voting securities consist of its $1.00 par value common stock, and there were 79,421,31679,910,836 shares outstanding and entitled to vote on the record date. Each share outstanding on the record date will be entitled to one vote on each director nominee and one vote on each other matter. Treasury shares are not voted. Individual votes of shareholders are kept private, except as appropriate to meet legal requirements. Access to proxies and other individual shareholder voting records is limited to the independent inspectors of election and certain employees of the Company and its agents who acknowledge their responsibility to comply with this policy of confidentiality. TABLE OF CONTENTS A majority of the outstanding shares of common stock as of the record date must be present at the Annual Meeting in order to hold the Annual Meeting and conduct business. This is called a “quorum.” Your shares are counted as present at the meeting if you are present at the Annual Meeting and vote, a proxy card has been properly submitted by you or on your behalf, or you have submitted your proxy by telephone or by internet, or by completing, signing, dating and returning your proxy form in the enclosed envelope. Both abstentions and broker non-votes (explained below in “Vote Required for Election and Approval”) are counted as present for the purpose of determining the presence of a quorum. TABLE OF CONTENTS
VOTE REQUIRED FOR ELECTION AND APPROVAL For Proposal 1, Election of Directors for Terms Expiring in 2026,2027, directors are elected by a majority of votes cast unless the election is contested, in which case directors are elected by a plurality of votes cast. A majority of votes cast means that the number of shares voted “for” a Director nominee exceeds the number of votes cast “against” the Director nominee. If an incumbent director in an uncontested election does not receive a majority of votes cast for his or her election, under the Company's Corporate Governance Guidelines, the director is required to submit a letter of resignation to the Board for consideration by the Governance Committee. The Governance Committee will then make a recommendation to the Board as to whether to accept or reject the tendered resignation. The Governance Committee and the Board, in making their decisions, may implement any procedures they deem appropriate and may consider any factor or other information that they deem relevant. The Board will then act on the tendered resignation, taking into account the Governance Committee's recommendation, and will publicly disclose its decision regarding the resignation within 90 days after the results of the election are certified. A director whose resignation is under consideration shall abstain from participating in any recommendation or decision regarding that resignation. If the resignation is not accepted, the director will continue to serve until the next annual meeting of shareholders at which such director faces re-election and until such director's successor is elected and qualified. Proposal 2, Advisory Vote to Approve Executive Compensation, requires the affirmative vote of a majority of votes cast affirmatively or negatively on the matter for approval. Proposal 3, Advisory Vote on the Frequency of Future Advisory Votes to Approve Executive Compensation, requires the affirmative vote of a majority of votes cast affirmatively or negatively on the matter for approval. Proposal 4, Ratification of Appointment of Independent Registered Public Accounting Firm, requires the affirmative vote of a majority of votes cast affirmatively or negatively on the matter for approval.
Proposal 5,4, Approval of the Stock Incentive Plan of 2016 (as amended and restated),2024, requires the affirmative vote of a majority of votes cast affirmatively or negatively on the matter for approval. Generally, brokers holding shares must vote according to specific instructions they receive from the beneficial owners of those shares. If brokers do not receive specific instructions, brokers may in some cases vote the shares in their discretion, but are not permitted to vote on certain proposals and may elect not to vote on any of the proposals unless you provide voting instructions. If you do not provide voting instructions and the broker elects to vote your shares on some but not all matters, it will result in a “broker non-vote” for the matters on which the broker does not vote. Abstentions occur when you provide voting instructions but instruct the broker to abstain from voting on a particular matter instead of voting for or against the matter. Abstentions and broker non-votes are not considered “votes cast.” Abstentions and broker non-votes, if any, will have no effect on the outcome of the election of directors and will have no effect on the outcome of any other matters proposed for a vote at the Annual Meeting. VOTING RESULTS OF THE ANNUAL MEETING The Company will announce preliminary voting results at the Annual Meeting and publish final results in a Form 8-K within four business days following the Annual Meeting. If final results are not known within four business days of the Annual Meeting, then the Company will file a Current Report on Form 8-K with the preliminary results and file an amended Current Report on Form 8-K within four business days of the availability of the final results. TABLE OF CONTENTS ATTENDING THE ANNUAL MEETING You may vote shares held directly in your name as the shareholder of record at the Annual Meeting. If you choose to vote at the meeting, please access instructions as set forth in the Notice of annual meeting. Even if you plan to attend the Annual Meeting, Wolverine Worldwide recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the Annual Meeting. You may vote shares held in “street name” through a brokerage account or by a bank or other nominee if you obtain a proxy from the record holder giving you the right to vote the shares. Each shareholder may appoint only one proxy holder or representative to attend the meeting on his or her behalf. TABLE OF CONTENTS
MANNER FOR VOTING PROXIES The shares represented by all valid proxies received by telephone, by internet or by mail will be voted in the manner specified. Where the shareholder has not indicated a specific choice, the shares represented by all valid proxies received will be voted in accordance with the Board's recommendations as follows: (1) for each of the nominees for directors named earlier in this Proxy Statement, (2) for approval of the advisory resolution to approve executive compensation, (3) for one year frequency of advisory votes to approve executive compensation, (4) for ratification of the appointment of the independent registered public accounting firm and (5)(4) for the approval of the Stock Incentive Plan of 2016 (as amended and restated).2024. The Board has not received timely notice of any other matter that may come before the Annual Meeting. However, should any matter not described above be properly presented at the Annual Meeting, the persons named in the proxy form will vote in accordance with their judgment, as permitted. A shareholder who gives a proxy may revoke it at any time before it is exercised by voting at the Annual Meeting in the manner described in the Notice of 20232024 Annual Meeting of Shareholders, by delivering a subsequent proxy or by notifying the inspectors of election in writing of such revocation. The accompanying proxy is solicited by and on behalf of the Board, and the Company will pay the expenses of solicitation of proxies for the Annual Meeting. Solicitations may be made in person or by telephone, by officers and employees of the Company, or by nominees or other fiduciaries who may mail materials to or otherwise communicate with the beneficial owners of shares held by the nominees or other fiduciaries. These individuals will not be paid any additional compensation for any such solicitation. Upon request, the Company will reimburse brokers, dealers, banks and trustees, or their nominees, for reasonable expenses incurred by them in forwarding material to beneficial owners of the Company's common stock. DELIVERY OF DOCUMENTS TO SHAREHOLDERS SHARING AN ADDRESS If you are the beneficial owner, but not the record holder, of shares of Wolverine Worldwide stock, your broker, bank or other nominee may only deliver one copy of this Proxy Statement and the Company's 20222023 Annual Report to multiple shareholders who share an address, unless that nominee has received contrary instructions from one or more of the shareholders. The Company will deliver promptly, upon written or oral request, a separate copy of this Proxy Statement and its 20222023 Annual Report to a shareholder at a shared address to which a single copy of the documents was delivered. A shareholder who wishes to receive a separate copy of the Proxy Statement and annual report, now or in the future, or shareholders who share an address and receive multiple copies of the Proxy Statement and annual report but would like to receive a single copy, should submit this request to Broadridge Financial Solutions, Inc. at 1-866-540-7095 or in writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. Beneficial owners sharing an address who are receiving multiple copies of proxy materials and who wish to receive a single copy of such materials in the future should make a request directly to their broker, bank or other nominee. ACCESS TO PROXY STATEMENT AND ANNUAL REPORT Distribution of this Proxy Statement and enclosed proxy card to shareholders is scheduled to begin on or about March 22, 2023.20, 2024. Wolverine Worldwide's financial statements for the fiscal year ended December 31, 2022,30, 2023, are included in the Company's 20222023 Annual Report, which the Company is providing to shareholders at the same time as this Proxy Statement. Wolverine Worldwide's Proxy Statement for the 20232024 Annual Meeting and the Annual Report to Shareholders for the fiscal year ended December 31, 202230, 2023 are available at www.wolverineworldwide.com/2023annualmeeting2024annualmeeting. If you have not received or do not have access to the 20222023 Annual Report, write to: Wolverine World Wide, Inc., 9341 Courtland Drive, NE, Rockford, Michigan 49351, Attn: Investor Relations or call (616) 866-5500 and ask for Investor Relations, and the Company will send a copy to you without charge. | 20232024 PROXY STATEMENT
| | 9491
| |
TABLE OF CONTENTS APPENDIX A
APPENDIX A – Forward-Looking Statements and Non-GAAP Reconciliation Tables | 20232024 PROXY STATEMENT
| | A-1 | |
TABLE OF CONTENTS APPENDIX A
FORWARD-LOOKING STATEMENTS This document contains “forward-looking statements,” which are statements relating to future, not past, events.events, including without limitation, statements relating to: the Company's plans to build a foundation for sustainable growth, expand operating margin, generate strong cash flow, invest in elevated brand marketing and key strategic capabilities, and improve profitability; and the benefits of the Company’s corporate structure. In this context, forward-looking statements often address management’s current beliefs, assumptions, expectations, estimates and projections about future business and financial performance, national, regional or global political, economic and market conditions, and the Company itself. Such statements often contain words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “is likely,” “plans,” “predicts,” “projects,” “should,” “will,” variations of such words, and similar expressions. Forward-looking statements, by their nature, address matters that are, to varying degrees, uncertain. Uncertainties that could cause the Company’s performance to differ materially from what is expressed in forward-looking statements include, but are not limited to, the following: changes in general economic conditions, employment rates, business conditions, interest rates, tax policies and other factors affecting consumer spending in the markets and regions in which the Company’s products are sold; the inability for any reason to effectively compete in global footwear, apparel and direct-to-consumer markets; the inability to maintain positive brand images and anticipate, understand and respond to changing footwear and apparel trends and consumer preferences; the inability to effectively manage inventory levels; increases or changes in duties, tariffs, quotas or applicable assessments in countries of import and export; foreign currency exchange rate fluctuations; currency restrictions; supply chain and capacity constraints, production disruptions, including reduction in operating hours, labor shortages, and facility closures resulting in production delays at the Company’s manufacturers, due to disruption from the effects of the COVID-19 pandemic, quality issues, price increases or other risks associated with foreign sourcing; the cost, including the effect of inflationary pressures and availability of raw materials, inventories, services and labor for contract manufacturers; labor disruptions; changes in relationships with, including the loss of, significant wholesale customers; risks related to the significant investment in, and performance of, the Company’s direct-to-consumer operations; risks related to expansion into new markets and complementary product categories as well as direct-to-consumer operations; the impact of seasonality and unpredictable weather conditions; the impact of changes in general economic conditions and/or the credit markets on the Company’s manufacturers, distributors, suppliers, joint venture partners and wholesale customers; changes in the Company’s effective tax rates; failure of licensees or distributors to meet planned annual sales goals or to make timely payments to the Company; the risks of doing business in developing countries and politically or economically volatile areas; the ability to secure and protect owned intellectual property or use licensed intellectual property; | 20232024 PROXY STATEMENT
| | A-2 | |
TABLE OF CONTENTS APPENDIX A
the impact of regulation, regulatory and legal proceedings and legal compliance risks, including compliance with federal, state and local laws and regulations relating to the protection of the environment, environmental remediation and other related costs, and litigation or other legal proceedings relating to the protection of the environment or environmental effects on human health; risks of breach of the Company’s databases or other systems, or those of its vendors, which contain certain personal information, payment card data or proprietary information, due to cyberattack or other similar events; problems affecting the Company's supply chain and distribution system, including service interruptions at shipping and receiving ports; • | strategic actions, including new initiatives and ventures, acquisitions and dispositions, and the Company’s success in integrating acquired businesses, including Sweaty Betty®strategic actions, including new initiatives and ventures, acquisitions and dispositions, and the Company’s success in integrating acquired businesses, including Sweaty Betty®, and implementing new initiatives and ventures; |
risks related to stockholder activism; the potential effects of theoutbreaks of COVID-19 pandemic or future health crises on the Company’s business, operations, financial results and liquidity; the risk of impairment to goodwill and other intangibles; the success of the Company’s restructuring and realignment initiatives undertaken from time to time; and changes in future pension funding requirements and pension expenses. These or other uncertainties could cause a material difference between an actual outcome and a forward-looking statement. The uncertainties included here are not exhaustive and are described in more detail in Part I, Item 1A: “Risk Factors” of ourthe Annual Report on Form 10-K. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company does not undertake an obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise. Any standards of measurement and performance made in reference to our environmental, social, governance and other sustainability plans and goals are developing and based on assumptions, and no assurance can be given that any such plan, initiative, projection, goal, commitment, expectation or prospect can or will be achieved. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document. | 20232024 PROXY STATEMENT
| | A-3 | |
TABLE OF CONTENTS APPENDIX A
NON-GAAP RECONCILIATION TABLES The following tables containtable contains information regarding the non-GAAP adjustments used by the Company in the presentation of its financial results: RECONCILIATION OF REPORTED REVENUE
TO ADJUSTED REVENUE ON A CONSTANT CURRENCY BASIS*
(Unaudited)
(In millions)
| Revenue | | | $2,684.8 | | | $70.0 | | | $2,754.8 | | | $2,414.9 | | | 14.1% | | | 11.2% | |
RECONCILIATION OF REPORTED EARNINGS (LOSS) BEFORE INCOME TAXES
TO ADJUSTED EARNINGS (LOSS) BEFORE INCOME TAXES*TAXES (PRE-TAX INCOME)*
(Unaudited)
(In millions) | | | GAAP Basis | | Adjustments(1) | | As Adjusted | | | | GAAP Basis | | Adjustments (1) | | As Adjusted | | | Earnings (loss) before income taxes - Fiscal 2022 | | $(252.9) | | $386.0 | | $133.1 | | Earnings (loss) before income taxes - Fiscal 2023 | | $(134.2) | | $139.0 | | $4.8 | | | Earnings (loss) before income taxes - Fiscal 2021 | | $80.3 | | $111.2 | | $191.5 | | Earnings (loss) before income taxes - Fiscal 2022 | | $(252.9) | | $386.0 | | $133.1 | | | Earnings (loss) before income taxes - Fiscal 2020 | | $(184.1) | | $276.5 | | $92.4 | | Earnings (loss) before income taxes - Fiscal 2021 | | $80.3 | | $111.2 | | $191.5 | | | | Earnings (loss) before income taxes - Fiscal 2020 | | $(184.1) | | $276.5 | | $92.4 | |
1.(1)
| 2023 adjustments reflect $185.3 million for non-cash impairments of long-lived assets, $50.8 million of reorganization costs, $5.5 million of costs associated with divestitures, partially offset by $90.4 million gain on the sale of businesses, trademarks and long-lived assets, $10.4 million of environmental and other related costs net of recoveries, $1.0 million SERP curtailment gain and $0.8 million earnings associated with the Keds business and Wolverine Leathers business results included in the consolidated condensed statement of operations. 2022 adjustments reflect $428.7 million for a non-cash impairment of the Sperry® trade name and the Sweaty Betty® trade name and goodwill, $9.1 million for reorganization costs, $33.7 million of environmental and other related costs net of recoveries, $3.7 million of costs associated with Sweaty Betty® integration and $0.8 million of receivables securitization transaction costs, partially offset by $90.0 gain on the sale of the Champion trademarks. 2021 adjustments reflect $56.4 million of environmental and other related costs net of recoveries, $34.3 million of debt extinguishment costs, $18.7 million of costs associated with the acquisition of Sweaty Betty® and $1.8 million for non-cash impairment related to one of the Company's joint ventures. 2020 adjustments reflect $222.2 million for a non-cash impairment of the Sperry® trade name, $37.7 million of expenses related to the COVID-19 pandemic including $10.9 million of severance expenses, $8.5 million of credit loss expenses, $4.9 million of inventory charges, $3.9 million of air freight charges related to production delays, $3.6 million of facility exit costs and $5.9 million of other costs, $5.5 million of debt extinguishment costs and $11.1 million of environmental and other related costs net of recoveries. |
To supplement the consolidated condensed financial statements presented in accordance with Generally Accepted Accounting Principles (“GAAP”), the Company describes what certain financial measuresearnings would have been if environmental and other related costs net of recoveries, non-cash impairmentimpairments of the Sperry® trade name and the Sweaty Betty® trade nameassets and goodwill, SERP curtailment gain, earnings associated with the Keds and Wolverine Leathers businesses included in the 2023 consolidated condensed statement of operation, Sweaty Betty® integration costs, reorganization costs, receivable securitization transaction costs, Sweaty Betty® acquisition costs associated with acquisitions and divestitures, debt extinguishment costs, non-cash impairment related to one of the Company's joint ventures, gaingains on the sale of the Champion trademarkbusinesses and assets and costs related to the COVID-19 pandemic including air freight costs, credit loss expenses, severance expenses and other related costs were excluded. The Company believes thesethis non-GAAP measures providemeasure provides useful information to both management and investors by increasing comparability to the prior period by adjusting for certain items that may not be indicative of core operating measures and to better identify trends in the Company's business. The adjusted financial results are used by management to, and allow investors to, evaluate the operating performance of the Company on a comparable basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. The Company believes providing constant currency information provides valuable supplemental information regarding results of operations, consistent with how the Company evaluates performance. The Company calculates constant currency by converting the current-period local currency financial results using the prior period exchange rates and comparing these adjusted amounts to the Company's current period reported results.
Management does not, nor should investors, consider such non-GAAP financial measures in isolation from, or as a substitution for, financial information prepared in accordance with GAAP. A reconciliation of all non-GAAP measures included in this Proxy Statement, to the most directly comparable GAAP measures are found in the financial tables above. | 20232024 PROXY STATEMENT
| | A-4 | |
TABLE OF CONTENTS APPENDIX B
WOLVERINE WORLD WIDE, INC. STOCK INCENTIVE PLAN OF 2016 (AS AMENDED AND RESTATED2024 (EFFECTIVE AS OF FEBRUARY 8, 2023)MAY 2, 2024) 1. Purpose The purpose of the Wolverine World Wide, Inc. Stock Incentive Plan of 20162024 (as amended and restated as of February 8, 2023 (the “Third Amendment Date”) and as it may be further amended or amended and restated from time to time, the “Plan”) is to advance the interests of Wolverine World Wide, Inc. (the “Company”) by stimulating the efforts of employees, officers, non-employee directors and other service providers, in each case who are selected to be participants, by heightening the desire of such persons to continue working toward and contributing to the success and progress of the Company. The Plan supersedes the Company's Stock Incentive Plan of 2010 and(the “2010 Plan”), the Company's Amended and Restated Stock Incentive Plan of 2013 (the “2013 Plan”), and the Company’s Stock Incentive Plan of 2016, as amended and restated (the “2016 Plan” and together with the 2010 Plan and the 2013 Plan, the “Prior Plans”), with respect to future awards, and provides for the grant of Incentive and Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units and Stock Awards, any of which may be performance-based, and for Incentive Bonuses, which may be paid in cash or stock or a combination thereof, as determined by the Administrator. No new awards shall be issued under the Prior Plans after April 21, 2016 (thethe date the Plan was initiallyis approved by the Company's stockholders). The Plan was previously amended and restated on February 7, 2018 (the “First Amendment Date”) and February 9, 2021 (the “Second Amendment Date”).stockholders. 2. Definitions As used in the Plan, the following terms shall have the meanings set forth below: (a)
| “Act” means the Securities Exchange Act of 1934, as amended from time to time and in effect, or any successor statute as from time to time. |
(b)
| “Act of Misconduct” means an act of embezzlement, fraud, dishonesty, nonpayment of any obligation owed to the Company or any Subsidiary, breach of fiduciary duty, or deliberate disregard of the Company or Subsidiary rules resulting in loss, damage or injury to the Company or any Subsidiary, or if a Participant makes an unauthorized disclosure of any Company or Subsidiary trade secret or confidential information, solicits any employee or service provider to leave the employ or cease providing services to the Company or any Subsidiary, breaches any intellectual property or assignment of inventions covenant, engages in any conduct constituting unfair competition, breaches any non-competition agreement (to the extent enforceable under applicable law), induces any Company or Subsidiary customer to breach a contract with the Company or any Subsidiary or to cease doing business with the Company or any Subsidiary, or induces any principal for whom the Company or any Subsidiary acts as agent to terminate such agency relationship in effect. |
(c)
| “Administrator” means the Administrator of the Plan in accordance with Section 19 of the Plan. |
(d)
| “Award” means an Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right, share of Restricted Stock, Restricted Stock Unit, Stock Award or Incentive Bonus granted to a Participant pursuant to the provisions of the Plan, any of which the Administrator may structure to qualify in whole or in part as a Performance Award. |
(e)
| “Award Agreement” means a written agreement or other instrument as may be approved from time to time by the Administrator implementing the grant of each Award. An Award Agreement may be in the form of an agreement to be executed by both the Participant and the Company (or an authorized representative of the Company) or certificates, notices or similar instruments (which do not need to be executed) as approved by the Administrator.Administrator |
(f)
| “Board” means the board of directors of the Company. |
| 20232024 PROXY STATEMENT
| | B-1 | |
TABLE OF CONTENTS (g)
| “Cause” means, in the case of any Participant who is party to an employment or severance-benefit agreement that contains a definition of “Cause,” the definition set forth in such agreement will apply with respect to such Participant under the Plan for so long as such agreement remains in effect; if a Participant is party to multiple such agreements, any Cause determination must meet the standards of all such agreements to qualify as for Cause under this Plan. In the case of any other Participant, “Cause” means (i) a substantial failure of the Participant to perform the Participant's duties and responsibilities to the Company or its Subsidiaries or substantial negligence in the performance of such duties and responsibilities; (ii) the commission by the Participant of a felony or a crime involving moral turpitude; (iii) the commission by the Participant of theft, fraud, embezzlement, material breach of trust or any material act of dishonesty involving the Company or any of its Subsidiaries, including, but not limited to, any Act of Misconduct; (iv) a significant violation by the Participant of the code of conduct of the Company or its Subsidiaries of any material policy of the Company or its Subsidiaries, or of any statutory or common law duty of loyalty to the Company or its Subsidiaries, including, but not limited to, any Act of Misconduct; or (v) a material breach of any of the terms of the Plan or any Award made under the Plan, or of the terms of any other agreement between the Company or subsidiaries and the Participant. |
(h)
| “Change in Control” unless otherwise defined in an Award Agreement, means (i) the failure of the Continuing Directors at any time to constitute at least a majority of the members of the Board; (ii) the acquisition by any Person other than an Excluded Holder of beneficial ownership (within the meaning of Rule 13d-3 issued under the Act) of twenty percent (20%) or more of the outstanding Shares or the combined voting power of the Company's outstanding securities entitled to vote generally in the election of directors; (iii) the consummation of a reorganization, merger, or consolidation of the Company, unless such reorganization, merger or consolidation is with or into a Permitted Successor and clauses (i), (ii), or (iv) of this Section 2(h) have not been triggered; or (iv) a complete liquidation or dissolution of the Company or the sale or disposition of all or substantially all of the assets of the Company other than to a Permitted Successor. |
Notwithstanding the foregoing, in any case where the occurrence of a Change in Control could affect the vesting of or payment under an Award subject to the requirements of Section 409A of the Code, to the extent required to comply with Section 409A of the Code, the term “Change in Control” shall mean an occurrence that both (i) satisfies the requirements set forth above in this definition and (ii) is a “change in control event” as that term is defined in the regulations under Section 409A of the Code. (i)
| “Code” means the Internal Revenue Code of 1986, as amended from time to time and in effect, or any successor statute as from time to time in effect, and the rulings and regulations issued thereunder. |
(j)
| “Company” means Wolverine World Wide, Inc., a Delaware corporation. |
(k)
| “Continuing Directors” mean the individuals constituting the Board as of the date this Plan was adopted and any subsequent directors whose election or nomination for election by the Company's stockholders was approved by a vote of three-quarters (3∕4) of the individuals who are then Continuing Directors, but specifically excluding any individual whose initial assumption of office occurs as a result of either an actual or threatened solicitation subject to Rule 14a-12(c) of Regulation 14A issued under the Act or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board. |
(k)
| “Company” means Wolverine World Wide, Inc., a Delaware corporation. |
(l)
| “Determination Period” means the fourteen (14) day period following a Termination of Employment by a Participant. |
(m)
| “Disability” has the meaning set forth in the Company's long-term disability plan. The determination of the Administrator as to an individual's Disability shall be conclusive on all parties. |
(n)
| “Employee Benefit Plan” means any plan or program established by the Company or a Subsidiary for the compensation or benefit of employees of the Company or any of its Subsidiaries. |
(o)
| “Excluded Holder” means (i) any Person who at the time this Plan was adopted was the beneficial owner of twenty percent (20%) or more of the outstanding Shares; or (ii) the Company, a Subsidiary or any Employee Benefit Plan of the Company or a Subsidiary or any trust holding Shares or other securities pursuant to the terms of an Employee Benefit Plan. |
(p)
| “Factors” means such considerations as would result in a determination by the Administrator that a Termination of Employment does not constitute a Retirement, and shall include the Participant's: (i) inadequate job performance; (ii) inadequate notice of resignation; (iii) intention for comparable future employment at a third party organization; (iv) intention for future employment or other service or advisory relationship with a competitor of the Company; or (iv) any other similar consideration. |
(q)
| “Fair Market Value” means, as of any date, the closing price per share at which the Shares are sold in the regular way on the New York Stock Exchange (or any successor exchange that is the primary stock exchange for trading of Shares) or, if no Shares are |
| 20232024 PROXY STATEMENT
| | B-2 | |
TABLE OF CONTENTS traded on the New York Stock Exchange (or any successor exchange that is the primary stock exchange for trading of Shares) on the date in question, then for the next preceding date for which Shares were traded on the New York Stock Exchange (or any successor exchange that is the primary stock exchange for trading of Shares). (r)
| “Gross Share Reserve” means, 25,600,000 Shares, the total number of Shares reserved and available for grant and issuance pursuant to this Plan since the Effective Date (the Plan’s original inception date), subject to adjustment pursuant to Sections 5(b) and 13. |
(s)
| “Good Reason” means, in the case of a Participant who is party to an employment or other severance-benefit agreement that contains a definition of “Good Reason,” the definition set forth in such agreement will apply with respect to such Participant under the Plan so long as such agreement remains in effect; provided, however, that if the Participant is party to multiple such agreements, “Good Reason” under any such agreement shall count as “Good Reason” for purposes of this Plan. If the Participant is not party to any such agreement, “Good Reason” shall mean any of the following, with the below notice provision applying: (i) a reduction in the Participant's base salary, annual bonus opportunity, or long-term incentive opportunity below the level in effect immediately prior to a Change in Control; (ii) failure by the Company or its Subsidiaries to pay amounts owed to the Participant as salary, bonus, deferred compensation or other compensation; (iii) any material adverse change to the Participant's position, duties, responsibilities, reporting responsibilities or title from that or those in effect immediately prior to a Change in Control; or (iv) any requirement that the Participant be based at a location that is more than twenty-five (25) miles from his or her regular place of employment immediately prior to a Change in Control, unless such change results in a shorter commute for the Participant. Notwithstanding the foregoing, no Termination of Employment shall be for Good Reason unless (i) such Termination of Employment occurs during the twenty-four (24) month period following a Change in Control and (ii) the Participant gives the Company written notice within ninety (90) days of the Participant obtaining knowledge of circumstances giving rise to Good Reason (describing in reasonable detail the circumstances and the Good Reason event that has occurred) and the Company does not remedy these circumstances within thirty (30) days of receipt of such notice and the Participant terminates employment not later than thirty (30) days thereafter. |
(s)
| “Gross Share Reserve” means the total number of Shares reserved and available for grant and issuance pursuant to Section 5(a) of this Plan, subject to adjustment pursuant to Sections 5(b) and 13. |
(t)
| “Incentive Bonus” means a bonus opportunity awarded under Section 10 of the Plan pursuant to which a Participant may become entitled to receive an amount based on satisfaction of such performance criteria as are specified in the Award Agreement or otherwise. |
(u)
| “Incentive Stock Option” means a stock option that is intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code. |
(v)
| “Nonemployee Director” means each person who is, or is elected to be, a member of the Board and who is not an employee of the Company or any Subsidiary. |
(w)
| “Nonqualified Stock Option” means a stock option that is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Code. Each stock option granted pursuant to the Plan will be treated as providing by its terms that it is to be a Nonqualified Stock Option unless, as of the date of grant, it is expressly designated as an Incentive Stock Option.
|
(x)
| “Option” means an Incentive Stock Option and/or a Nonqualified Stock Option granted pursuant to Section 6 of the Plan. |
(x) “Option” means an Incentive Stock Option and/or a Nonqualified Stock Option granted pursuant to Section 6 of the Plan. (y)
| “Participant” means any individual described in Section 3 of the Plan to whom Awards have been granted from time to time by the Administrator and any authorized transferee of such individual. |
(z)
| “Performance Award” means an Award, the grant, issuance, retention, vesting or settlement of which is subject to satisfaction of one or more performance-based criteria established pursuant to Section 14 of the Plan or otherwise by the Administrator. |
(aa)
| “Permitted Successor” means a company that, immediately following the consummation of a transaction specified in clauses (iii) and (iv) of the definition of “Change in Control” above, satisfies each of the following criteria: (i) 50% or more of the outstanding common stock of the company and the combined voting power of the outstanding securities of the company entitled to vote generally in the election of directors (in each case determined immediately following the consummation of the applicable transaction) is beneficially owned, directly or indirectly, by all or substantially all of the Persons who were the beneficial owners of the Company's outstanding Shares and outstanding securities entitled to vote generally in the election of directors (respectively) immediately prior to the applicable transaction; (ii) no Person other than an Excluded Holder beneficially owns, directly or indirectly, 20% or more of the outstanding common stock of the company or the combined voting power of the outstanding securities of the company entitled to vote generally in the election of directors (for these purposes the term Excluded Holder shall include the company, any subsidiary of the company and any employee benefit plan of the company or any such subsidiary or any trust holding common stock or other securities of the company pursuant to the terms of any such employee benefit plan); and (iii) at least a majority of the board of directors of the company is comprised of Continuing Directors. |
| 20232024 PROXY STATEMENT
| | B-3 | |
TABLE OF CONTENTS include the company, any subsidiary of the company and any employee benefit plan of the company or any such subsidiary or any trust holding common stock or other securities of the company pursuant to the terms of any such employee benefit plan); and (iii) at least a majority of the board of directors of the company is comprised of Continuing Directors. (aa)(bb)
| “Person” has the same meaning as set forth in Sections 13(d) and 14(d)(2) of the Act. |
(bb)
| “Performance Award” means an Award, the grant, issuance, retention, vesting or settlement of which is subject to satisfaction of one or more performance-based criteria established pursuant to Section 14 of the Plan or otherwise by the Administrator. |
(cc)
| “Restricted Stock” means Shares granted pursuant to Section 8 of the Plan. |
(dd)
| “Restricted Stock Unit” means an Award granted to a Participant pursuant to Section 8 of the Plan that is an unfunded and unsecured promise pursuant to which Shares or cash in lieu thereof may be issued in the future. |
(ee)
| “Retirement” means the voluntary Termination of Employment by a Participant after the Participant has attained 59 years of age and ten years of service (as a director and/or an employee of the Company or a Subsidiary, provided, for the avoidance of doubt, that any service by a Participant for a Subsidiary prior to the time when such Subsidiary is owned directly or indirectly by the Company shall be disregarded for purposes of a “Retirement” determination hereunder), absent a determination to the contrary by the Administrator (after taking into consideration the Factors) within the Determination Period; Retirement shall be deemed to occur on the date immediately following the last day of the Determination Period in the absence of a determination to the contrary by the Administrator. |
(ff)
| “Share” means a share of the Company's common stock, par value $1.00, subject to adjustment as provided in Section 13 of the Plan. |
(gg)
| “Stock Appreciation Right” means a right granted pursuant to Section 7 of the Plan that entitles the Participant to receive, in cash or Shares or a combination thereof, as determined by the Administrator, value equal to or otherwise based on the excess of (i) the Fair Market Value of a specified number of Shares at the time of exercise over (ii) the exercise price of the right, as established by the Administrator on the date of grant. |
(hh)
| “Stock Award” means an award of Shares to a Participant pursuant to Section 9 of the Plan. |
(ii)
| “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company where each of the corporations in the unbroken chain other than the last corporation owns stock possessing at least 50 percent or more of the total combined voting power of all classes of stock in one of the other corporations in the chain, and if specifically determined by the Administrator in the context other than with respect to Incentive Stock Options, may include an entity in which the Company has a significant ownership interest or that is directly or indirectly controlled by the Company. |
(jj)
| “Substitute Awards” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines. |
(kk)
| “Termination of Employment” means ceasing to serve as a full-time employee of the Company and its Subsidiaries or, with respect to a Nonemployee Director or other service provider, ceasing to serve as such for the Company, except that with respect to all or any Awards held by a Participant (i) the Administrator may determine, subject to Section 6(d) of the Plan, that an approved leave of absence or approved employment on a less than full-time basis is not considered a Termination of Employment; (ii) the Administrator may determine that a transition of employment to service with a partnership, joint venture or corporation not meeting the requirements of a Subsidiary in which the Company or a Subsidiary is an equity owner is not considered a Termination of Employment; (iii) unless otherwise determined by the Administrator, service as a member of the Board or other service provider shall not constitute continued employment with respect to Awards granted to a Participant while he or she served as an employee; and (iv) service as an employee of the Company or a Subsidiary shall constitute continued employment with respect to Awards granted to a Participant while he or she served as a member of the Board or other service provider. The Administrator shall determine whether any corporate transaction, such as a sale or spin-off of a division or subsidiary that employs a Participant, shall be deemed to result in a Termination of Employment with the Company and its Subsidiaries for purposes of any affected Participant's Awards, and the Administrator's decision shall be final and binding. |
3. Eligibility Any person who is a current or, to the extent consistent with Section 409A of the Code, prospective officer or employee of the Company or of any Subsidiary shall be eligible for selection by the Administrator for the grant of Awards hereunder. In addition, Nonemployee Directors and any other service providers who have been retained to provide consulting, advisory or other services to the Company or to any Subsidiary shall | 2024 PROXY STATEMENT | | B-4 | |
TABLE OF CONTENTS be eligible for the grant of Awards hereunder as determined by the Administrator. Options intending to qualify as Incentive Stock Options may | 2023 PROXY STATEMENT
| | B-4
| |
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only be granted to employees of the Company or any subsidiary of the Company within the meaning of the Code, as selected by the Administrator. Eligibility for Options other than Incentive Stock Options is limited to individuals described this Section 3 who are providing direct services on the date of grant of the Option (or it is reasonably anticipated that the individuals will begin to provide direct services) to the Company or to a subsidiary of the Company that would be described in the first sentence of Treasury Regulation § 1.409A-1(b)(5)(iii)(E). 4. Effective Date, AmendmentApproval Date and Termination of Plan The Plan was initially adopted by the Board as of February 10, 2016on March 7, 2024 (the “Effective“Approval Date”) and previously amended and restated by the Board on the First Amendment Date and Second Amendment Date, and, in each case, subsequently approved, subject to approval by the Company’s stockholders. With respect to any Award granted on or after the Second Amendment Date, to the extent that the number of Shares subject to such Awards, or portions thereof, exceeds the number of shares authorized under theThe Plan as of the Second Amendment Date, such Awards, or portions thereof, shall be subject to, and may not be exercised before,will become effective upon the approval of this Plan by the stockholders of the Company prior toat the first anniversaryCompany’s Annual Meeting of Shareholders scheduled for May 2, 2024 (if so approved, the Second Amendment Date“Effective Date”) by the affirmative vote of the holders of a majority of the outstanding Shares of the Company present, or represented by proxy, and entitled to vote, at asuch meeting of the Company's stockholders or by written consent in accordance with the laws of the State of Delaware; and, if such approval is not so obtained, the Plan shall be terminated and no Awards (or portions thereof) shall by void as determined by the Administrator.will be issued hereunder. The Plan shall remain available for the grant of Awards until the tenth (10th) anniversary of the Second AmendmentApproval Date. Notwithstanding the foregoing, the Plan may be terminated at such earlier time as the Board may determine. Termination of the Plan will not affect the rights and obligations of the Participants and the Company arising under Awards theretofore granted and then in effect. 5. Shares Subject to the Plan and to Awards (a)
| Aggregate Limits. Subject to adjustment as provided in Sections 5(b) and 13, and as of May 3, 2023, the number of Shares that shall be authorized for future grant under the Plan shall equal a total of (i) 7,170,8083,300,000 Shares, plus (ii) any Shares that, as increased pursuant to paragraph (b) of this Section, less (ii) one (1) Sharethe Effective Date, remain available for every one (1) Share that wasfuture grant (and not subject to an Option or Stock Appreciation Right granted after February 9, 2023 and prior to May 3, 2023outstanding awards) under the Plan and two and six tenths (2.6) Shares for every one (1) Share subject Award other than an Option or Stock Appreciation Right granted after February 9, 2023 and prior to May 3, 2023 under the2016 Plan. Any Shares granted under Options or Stock Appreciation RightsAwards shall be counted against this limit on a one-for-one basis and any Shares granted as Awards other than Options or Stock Appreciation Rights shall be counted against this limit as two and six tenths (2.6) Shares for every one (1) Share subject to such Award.basis. The Shares issued pursuant to Awards granted under this Plan may be shares that are authorized and unissued or shares that were reacquired by the Company, including shares purchased in the open market. No fractional Shares will be delivered under the Plan. The aggregate number of Shares that may be issued pursuant to the exercise of Incentive Stock Options granted under this Plan shall not exceed 3,300,000, which aggregate number shall be calculated and adjusted pursuant to Section 13 of the Plan only to the extent that such calculation or adjustment will not affect the status of any option intended to qualify as an Incentive Stock Option under Section 422 of the Code. |
(b)
| Issuance of Shares. For purposes of Section 5(a) and Section 5(f)5(e) of the Plan, the aggregate number of Shares issued under this Plan at any time shall equal only the number of Shares actually issued upon exercise or settlement of an Award. If after February 9, 2023,the Effective Date (i) any Shares subject to an Award are forfeited, an Award expires or an Award is settled for cash (in whole or in part), or (ii) any Shares subject to an award under the Prior Plans are forfeited, or an award under the Prior Plans expires or is settled for cash (in whole or in part), the Shares subject to such Award or award under the Prior Plans shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future Awards under the Plan. Notwithstanding the foregoing, Shares subject to an Award under the Plan may not again be made available for issuance under the Plan if such Shares are: (i) Shares that were subject to a stock-settled Stock Appreciation Right (or after the Effective Date, a stock appreciation right granted under a Prior Plan) and were not issued upon the net settlement or net exercise of such Stock Appreciation Right (or after the Effective Date, a stock appreciation right granted under a Prior Plan); (ii) Shares used to pay the exercise price of an Option (or after the Effective Date, an option granted under a Prior Plan) or the purchase price, if any, for an Award (or after the Effective Date, an award granted under a Prior Plan); (iii) Shares delivered to or withheld by the Company to pay the withholding taxes related an Award (or after the Effective Date, an award granted under a Prior Plan); or (iv) Shares repurchased on the open market with the proceeds of an Option (or after the Effective Date, an option granted under a Prior Plan) exercise. |
(c)
| Award Limits. The aggregate number of Shares that may be delivered, or the value of which could be paid in cash or other property, under Awards granted under this Plan during any calendar year to any one Participant shall not exceed 3,600,000, which aggregate number shall be calculated and adjusted pursuant to Section 13 of the Plan and which number shall not count any tandem SARs (as defined in Section 7 of the Plan). The aggregate number of Shares that may be issued pursuant to the exercise of Incentive Stock Options granted under this Plan shall not exceed 3,600,000, which aggregate number shall be calculated and adjusted pursuant to Section 13 of the Plan only to the extent that such calculation or adjustment will not affect the status of any option intended to qualify as an Incentive Stock Option under Section 422 of the Code. The maximum cash amount payable pursuant to that portion of an Incentive Bonus granted in any calendar year to any Participant under this Plan shall not exceed $20,000,000.
|
(d)
| Director Awards. Notwithstanding any other provision of the Plan to the contrary, the aggregate grant date fair value of Awards (computed as of the date of grant in accordance with applicable financial accounting rules) granted under this Plan during any calendar year to any one Nonemployee Director shall not exceed $600,000. |
| 2023 PROXY STATEMENT
| | B-5
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(e)(d)
| Substitute Awards. Substitute Awards shall not reduce the Shares authorized for issuance under the Plan or authorized for grant to a Participant in any calendar year. Additionally, in the event that a company acquired by the Company or any Subsidiary, or with which the Company or any Subsidiary combines, has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for issuance under the Plan; provided, however, that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms |
| 2024 PROXY STATEMENT | | B-5 | |
TABLE OF CONTENTS of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were employees, directors or other service providers of such acquired or combined company before such acquisition or combination and shall be subject to such other terms and limitations as required by the stock exchange on which the Shares are then listed or traded. |
(f)(e)
| Award Vesting/Exercisability/Distribution Limitations. Notwithstanding any other provision of the Plan to the contrary, equity-based Awards granted under the Plan shall vest no earlier than the first anniversary of the date the Award is granted (excluding, for this purpose, any (i) Substitute Awards, (ii) ) Shares delivered in lieu of fully earned Nonemployee Director cash compensation obligations, and (iii) Awards to Nonemployee Directors that vest on the earlier of the one year anniversary of the date of grant or the next annual meeting of stockholders which is at least 50 weeks after the immediately preceding year’s annual meeting); provided, that, the Administrator may grant equity-based Awards without regard to the foregoing minimum vesting requirement with respect to a maximum of five percent (5%) of the Gross Share Reserve; and, provided further, for the avoidance of doubt, that the foregoing restriction does not apply to the Administrator’s discretion to provide for accelerated exercisability or vesting of any Award, including in cases of retirement, death, disability or a Change in Control, in the terms of the Award or otherwise. |
6. Options (a)
| Option Awards. Options may be granted at any time and from time to time prior to the termination of the Plan to Participants as determined by the Administrator. No Participant shall have any rights as a stockholder with respect to any Shares subject to Options hereunder until such Shares have been issued. Each Option shall be evidenced by an Award Agreement. Options granted pursuant to the Plan need not be identical but each Option must contain and be subject to the terms and conditions set forth below. |
(b)
| Price. The Administrator will establish the exercise price per Share under each Option, which in no event will be less than the Fair Market Value of the Shares on the date of grant; provided, however, that the exercise price per Share with respect to an Option that is granted in connection with a merger or other acquisition as a substitute or replacement award for options held by optionees of the acquired entity may be less than 100% of the Fair Market Value of the Shares on the date such Option is granted if such exercise price is based on a formula set forth in the terms of the options held by such optionees or in the terms of the agreement providing for such merger or other acquisition. The exercise price of any Option may be paid in Shares, cash or a combination thereof, as determined by the Administrator, including an irrevocable commitment by a broker to pay over such amount from a sale of the Shares issuable under an Option, the delivery of previously owned Shares and withholding of Shares deliverable upon exercise, or in such other form as is acceptable to the Administrator. |
(c)
| No Repricing Without Stockholder Approval. Other than in connection with a change in the Company's capitalization (as described in Section 13 of the Plan), the Administrator may not, without prior approval of the Company's shareholders, seek to effect any repricing of any previously granted underwater Option by: (i) amending or modifying the terms of the Option to lower the exercise price; (ii) canceling the underwater Option and granting either (A) replacement Options having a lower exercise price or (B) Restricted Stock, Restricted Stock Units, Performance Awards or Stock Awards in exchange; or (iii) cancelling or repurchasing the underwater Options for cash or other securities. An Option will be deemed to be “underwater” at any time when the Fair Market Value of the Shares covered by such Award is less than the exercise price of the Award. |
(d)
| Provisions Applicable to Options. Subject to Section 5(f)5(e), the date on which Options become exercisable shall be determined at the sole and absolute discretion of the Administrator and set forth in an Award Agreement. Unless provided otherwise in the applicable Award Agreement, to the extent that the Administrator determines that an approved leave of absence or employment on a less than full-time basis is not a Termination of Employment, the vesting period and/or exercisability of an Option shall be adjusted by the Administrator during or to reflect the effects of any period during which the Participant is on an approved leave of absence or is employed on a less than full-time basis. No dividends or dividend equivalents shall be paid or granted in respect of Shares subject to Options and no holder of an Option shall be entitled to any dividends with respect to the Shares subject to Options unless and until such Options have vested and have been exercised in accordance with the terms of the Plan and the applicable Award Agreement and such Shares are reflected as issued and outstanding. |
| 2023 PROXY STATEMENT
| | B-6
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(e)
| Term of Options and Termination of Employment. The Administrator shall establish the term of each Option, which in no case shall exceed a period of ten (10) years from the date of grant. Unless an Option earlier expires upon the expiration date established pursuant to the foregoing sentence, upon the Participant's Termination of Employment, his or her rights to exercise an Option then held shall be only as follows, unless the Administrator specifies otherwise: |
| 2024 PROXY STATEMENT | | B-6 | |
TABLE OF CONTENTS (1)
| General. If a Participant's Termination of Employment is for any reason other than the Participant's death, Disability, Retirement or termination for Cause, Options granted to the Participant may continue to be exercised in accordance with their terms for the lesser of (i) a period of three (3) months after such Termination of Employment or (ii) the period ending on the latest date on which such Options could have been exercised without regard to this Section 6(e)(1), but only to the extent the Participant was entitled to exercise the Options on the date of such termination. |
(2)
| Death. If a Participant dies either while an employee or officer of the Company or a Subsidiary or member of the Board, or after the Termination of Employment other than for Cause but during the time when the Participant could have exercised an Option, the Options issued to such Participant shall become fully vested (in the case of Termination of Employment due to death) and exercisable by the personal representative of such Participant or other successor to the interest of the Participant for the lesser of (i) a period of one (1) year after the Participant's death or (ii) the period ending on the latest date on which such Options could have been exercised without regard to this Section 6(e)(2), but only to the extent the Participant was entitled to exercise the Options on the date of such termination. |
(3)
| Disability. If a Participant's Termination of Employment is due to Disability, then all of the Participant's Options shall immediately fully vest, and the Options held by the Participant at the time of such Termination of Employment shall be exercisable by the Participant or the personal representative of such Participant for the lesser of (i) a period of one (1) year after the Participant's Termination of Employment or (ii) the period ending on the latest date on which such Options could have been exercised without regard to this Section 6(e)(3), but only to the extent the Participant was entitled to exercise the Options on the date of such termination. |
(4)
| Participant Retirement. Upon a Participant's Retirement as an employee of the Company and its Subsidiaries or Retirement from service as a member of the Board, then all of the Participant's Options shall immediately fully vest, and the Options held by the Participant at the time of such Retirement shall be exercisable by the Participant or the personal representative of such Participant during the remaining term of the Options. |
(5)
| Termination for Cause. If a Participant is terminated for Cause, the Participant shall have no further right to exercise any Options previously granted. The Administrator or officers designated by the Administrator shall determine, in its or their reasonable discretion, whether a termination is for Cause. |
(f)
| Incentive Stock Options. Notwithstanding anything to the contrary in this Section 6, in the case of the grant of an Option intending to qualify as an Incentive Stock Option: (i) if the Participant owns stock possessing more than 10 percent (10%) of the combined voting power of all classes of stock of the Company, the exercise price of such Option must be at least 110 percent of the Fair Market Value of the Shares on the date of grant and the Option must expire within a period of not more than five (5) years from the date of grant and (ii) Termination of Employment will occur when the person to whom an Award was granted ceases to be an employee (as determined in accordance with Section 3401(c) of the Code and the regulations promulgated thereunder) of the Company and its Subsidiaries. Notwithstanding anything in this Section 6 to the contrary, options designated as Incentive Stock Options shall not be eligible for treatment under the Code as Incentive Stock Options (and will be deemed to be Nonqualified Stock Options) to the extent that either (a) the aggregate Fair Market Value of Shares (determined as of the time of grant) with respect to which such Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Subsidiary) exceeds $100,000, taking Options into account in the order in which they were granted, or (b) such Options otherwise remain exercisable but are not exercised within three (3) months of Termination of Employment (as defined in this subsection (f)) (or such other period of time provided in Section 422 of the Code). |
7. Stock Appreciation Rights (a)
| General. Stock Appreciation Rights may be granted to Participants from time to time either in tandem with or as a component of other Awards granted under the Plan (“tandem SARs”) or not in conjunction with other Awards (“freestanding SARs”) and may, but need not, relate to a specific Option granted under Section 6 of the Plan. The provisions of Stock Appreciation Rights need not be the same with respect to each grant or each recipient. Any Stock Appreciation Right granted in tandem with an Award may be granted at the same time such Award is granted or at any time thereafter before exercise or expiration of such Award. All freestanding SARs shall be granted subject to the same terms and conditions applicable to Options as set forth in Section 6 of the Plan and all tandem SARs shall have the same |
| 2023 PROXY STATEMENT
| | B-7
| |
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exercise price, vesting, exercisability, forfeiture and termination provisions as the Award to which they relate. Subject to the provisions of Sections 5(f) exercise price, vesting, exercisability, forfeiture and termination provisions as the Award to which they relate. Subject to the provisions of Sections 5(e) and 6 of the Plan and the immediately preceding sentence, the Administrator may impose such other conditions or restrictions on any Stock Appreciation Right as it shall deem appropriate. Stock Appreciation Rights may be settled in Shares, cash or a combination thereof, as determined by the Administrator and set forth in the applicable Award Agreement.
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| 2024 PROXY STATEMENT | | B-7 | |
TABLE OF CONTENTS (b)
| No Repricing Without Stockholder Approval. Other than in connection with a change in the Company's capitalization (as described in Section 13 of the Plan), the Administrator may not, without prior approval of the Company's shareholders, seek to effect any repricing of any previously granted underwater Stock Appreciation Right by: (i) amending or modifying the terms of the Stock Appreciation Right to lower the exercise price; (ii) canceling the underwater Stock Appreciation Right and granting either (A) replacement Stock Appreciation Rights having a lower exercise price or (B) Restricted Stock, Restricted Stock Units, Performance Awards or Stock Awards in exchange; or (iii) cancelling or repurchasing the underwater Stock Appreciation Rights for cash or other securities. A Stock Appreciation Right will be deemed to be “underwater” at any time when the Fair Market Value of the Shares covered by such Award is less than the exercise price of the Award. |
8. Restricted Stock and Restricted Stock Units (a)
| Restricted Stock and Restricted Stock Unit Awards. Restricted Stock and Restricted Stock Units may be granted at any time and from time to time prior to the termination of the Plan to Participants as determined by the Administrator. Restricted Stock is an award or issuance of Shares the grant, issuance, retention, vesting and/or transferability of which is subject during specified periods of time to such conditions (including continued employment or performance conditions) and terms as the Administrator deems appropriate. Restricted Stock Units are Awards denominated in units of Shares under which the issuance of Shares is subject to such conditions (including continued employment or performance conditions) and terms as the Administrator deems appropriate. Each grant of Restricted Stock and Restricted Stock Units shall be evidenced by an Award Agreement. Unless determined otherwise by the Administrator, each Restricted Stock Unit will be equal to one Share and will entitle a Participant to either the issuance of Shares or payment of an amount of cash determined with reference to the value of Shares. To the extent determined by the Administrator, Restricted Stock and Restricted Stock Units may be satisfied or settled in Shares, cash or a combination thereof. Restricted Stock and Restricted Stock Units granted pursuant to the Plan need not be identical but each grant of Restricted Stock and Restricted Stock Units must contain and be subject to the terms and conditions set forth below. |
(b)
| Contents of Agreement. Each Award Agreement shall contain provisions regarding (i) the number of Shares or Restricted Stock Units subject to such Award or a formula for determining such number; (ii) the purchase price of the Shares, if any, and the means of payment; (iii) the performance criteria, if any, and level of achievement versus these criteria that shall determine the number of Shares or Restricted Stock Units granted, issued, retainable and/or vested; (iv) such terms and conditions on the grant, issuance, vesting and/or forfeiture of the Shares or Restricted Stock Units as may be determined from time to time by the Administrator; (v) the term of the performance period, if any, as to which performance will be measured for determining the number of such Shares or Restricted Stock Units; and (vi) restrictions on the transferability of the Shares or Restricted Stock Units. Shares issued under a Restricted Stock Award may be issued in the name of the Participant and held by the Participant or held by the Company, in each case as the Administrator may provide. |
(c)
| Vesting and Performance Criteria. Subject to Section 5(f)5(e), the grant, issuance, retention, vesting and/or settlement of shares of Restricted Stock and Restricted Stock Units will occur when and in such installments as the Administrator determines or under criteria the Administrator establishes, which may include performance-based criteria established pursuant to Section 14 of the Plan or otherwise by the Administrator. |
(d)
| Termination of Employment. Unless the Administrator provides otherwise: |
(i)
| General. In the event of Termination of Employment for any reason other than death, Disability or Retirement, any Restricted Stock or Restricted Stock Units still subject in full or in part to restrictions at the date of such Termination of Employment shall automatically be forfeited and returned to the Company. |
(ii)
| Death, Retirement or Disability. In the event a Participant's Termination of Employment is because of death, Disability or Retirement, the restrictions remaining on any or all Shares remaining subject to a Restricted Stock or Restricted Stock Unit Award shall lapse. |
(e)
| Discretionary Adjustments and Limits. Notwithstanding the satisfaction of any performance goals, the number of Shares granted, issued, retainable and/or vested under an Award of Restricted Stock or Restricted Stock Units on account of either financial performance or personal performance evaluations may, to the extent specified in the Award Agreement, be reduced, but not increased, by the Administrator on the basis of such further considerations as the Administrator shall determine. |
| 2023 PROXY STATEMENT
| | B-8
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(f)
| Voting Rights. Unless otherwise determined by the Administrator, Participants holding shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those shares during the period of restriction. Participants shall have no voting rights with respect to Shares underlying Restricted Stock Units unless and until such Shares are reflected as issued and outstanding shares on the Company's stock ledger. |
| 2024 PROXY STATEMENT | | B-8 | |
TABLE OF CONTENTS (g)
| Dividends and Distributions. |
(i)
| Participants in whose name Restricted Stock is granted shall be entitled to receive dividends and other distributions paid with respect to those Shares only to the extent provided by the Administrator, in which case the Administrator will determine whether any such dividends or distributions will be automatically reinvested in additional shares of Restricted Stock and subject to the same restrictions on transferability as the Restricted Stock with respect to which they were distributed or whether such dividends or distributions will be paid in cash. Shares underlying Restricted Stock Units shall be entitled to dividends or dividend equivalents only to the extent provided by the Administrator. |
(ii)
| Notwithstanding the foregoing Section 8(g)(1), any cash or stock dividends and dividend equivalents with respect to Restricted Stock and Restricted Stock Units granted as Performance Awards, if any, will be withheld by the Company for the Participant's account and will be paid, if at all, (i) in the case of Restricted Stock, upon the achievement of the applicable performance measure(s) and the satisfaction of any other restrictions imposed on the Restricted Stock in respect of which the dividends were paid (including, if applicable, the achievement of applicable performance measure(s)) and (ii) in the case of Restricted Stock Units, at the time the Shares and/or cash underlying such Restricted Stock Units is paid, and any dividends deferred in respect of any Restricted Stock and Restricted Stock Units granted as Performance Awards will be forfeited upon the forfeiture of such Restricted Stock and Restricted Stock Units. Any noncash dividends or distributions paid with respect to Restricted Stock and Restricted Stock Units granted as Performance Awards shall be subject to the same restrictions as those relating to the Restricted Stock and Restricted Stock Units. |
(h)
| Payment of Restricted Stock Units. In all events, unless payment with respect to a Restricted Stock Unit is deferred in a manner consistent with Section 409A of the Code, the Shares and/or cash underlying such Restricted Stock Unit shall be paid to the Participant no later than two and one-half months following the end of the year in which the Restricted Stock Unit is no longer subject to a substantial risk of forfeiture. |
(i)
| Legending of Restricted Stock. The Administrator may also require that certificates representing shares of Restricted Stock be retained and held in escrow by a designated employee or agent of the Company or any Subsidiary until any restrictions applicable to shares of Restricted Stock so retained have been satisfied or lapsed. Any certificates evidencing shares of Restricted Stock awarded pursuant to the Plan shall bear the following legend: |
The shares represented by this certificate were issued subject to certain restrictions under the Wolverine World Wide, Inc. Stock Incentive Plan of 20162024 (the “Plan”). This certificate is held subject to the terms and conditions contained in a restricted stock agreement that includes a prohibition against the sale or transfer of the stock represented by this certificate except in compliance with that agreement and that provides for forfeiture upon certain events. Copies of the Plan and the restricted stock agreement are on file in the office of the Secretary of the Company. 9. Stock Awards (a)
| Grant. Stock Awards may be granted at any time and from time to time prior to the termination of the Plan to Participants as determined by the Administrator, consistent with the 5% limit set forth in Section 5(f)5(e) of the Plan. Stock Awards shall be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Administrator. |
(b)
| Rights as a Stockholder. A Participant shall have all voting, dividend, liquidation and other rights with respect to Shares issued to the Participant as a Stock Award under this Section 9 upon the Participant becoming the holder of record of the Shares granted pursuant to such Stock Award;Award (and shall have no rights to dividends or dividend equivalents prior to such time); provided, however, that the Administrator may impose such restrictions on the assignment or transfer of Shares awarded pursuant to a Stock Award as it considers appropriate. |
10. Incentive Bonuses (a)
| General. Each Incentive Bonus Award will confer upon the Participant the opportunity to earn a future payment tied to the level of achievement with respect to one or more performance criteria established for a performance period of not less than one year. |
| 2023 PROXY STATEMENT
| | B-9
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(b)
| Incentive Bonus Document. Unless otherwise determined by the Administrator, the terms of any Incentive Bonus will be set forth in an Award Agreement. Each Award Agreement evidencing an Incentive Bonus shall contain provisions regarding (i) the target and maximum amount payable to the Participant as an Incentive Bonus; (ii) the performance criteria and level of achievement versus these criteria that shall determine the amount of such payment; (iii) the term of the performance period as to which performance shall be measured for determining the amount of any payment; (iv) the timing of any payment earned by virtue of performance; (v) restrictions on the alienation or transfer of the Incentive Bonus prior to actual payment; (vi) forfeiture provisions; and (vii) such further terms and conditions, in each case not inconsistent with this Plan (including Section 5(f) |
| 2024 PROXY STATEMENT | | B-9 | |
TABLE OF CONTENTS measured for determining the amount of any payment; (iv) the timing of any payment earned by virtue of performance; (v) restrictions on the alienation or transfer of the Incentive Bonus prior to actual payment; (vi) forfeiture provisions; and (vii) such further terms and conditions, in each case not inconsistent with this Plan (including Section 5(e), if applicable), as may be determined from time to time by the Administrator. |
(c)
| Performance Criteria. The Administrator shall establish the performance criteria and level of achievement versus these criteria that shall determine the target and maximum amounts payable under an Incentive Bonus, which criteria may be based on financial performance and/or personal performance evaluations. |
(d)
| Timing and Form of Payment. The Administrator shall determine the timing of payment of any Incentive Bonus. Payment of the amount due under an Incentive Bonus may be made in cash or in Shares (with any such Share payment subject to the dividend and dividend equivalent limitations as set forth in section 8(g)(ii)), as determined by the Administrator. The Administrator may provide for or, subject to such terms and conditions as the Administrator may specify, may permit a Participant to elect for the payment of any Incentive Bonus to be deferred to a specified date or event. In all events, unless payment of an Incentive Bonus is deferred in a manner consistent with Section 409A of the Code, any Incentive Bonus shall be paid to the Participant no later than two and one-half months following the end of the year in which the Incentive Bonus is no longer subject to a substantial risk of forfeiture. |
(e)
| Discretionary Adjustments. Notwithstanding satisfaction of any performance goals, the amount paid under an Incentive Bonus on account of either financial performance or personal performance evaluations may, to the extent specified in the Award Agreement or other document evidencing the Award, be reduced, but not increased, by the Administrator on the basis of such further considerations as the Administrator shall determine. |
11. Deferral of Gains (a)
| Deferral of Payment. The Administrator may, in an Award Agreement or otherwise, provide for the deferred delivery of Shares upon settlement, vesting or other events with respect to Restricted Stock Units, or in payment or satisfaction of an Incentive Bonus. Notwithstanding anything herein to the contrary, in no event will any deferral of the delivery of Shares or any other payment with respect to any Award be allowed if the Administrator determines, in its sole and absolute discretion, that the deferral would result in the imposition of the additional tax under Section 409A(a)(1)(B) of the Code. No award shall provide for deferral of compensation that does not comply with Section 409A of the Code, unless the Board, at the time of grant, specifically provides that the Award is not intended to comply with Section 409A of the Code. The Company shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Administrator or the Board. |
(b)
| Conditions of Deferral. Notwithstanding anything herein to the contrary, if the Administrator permits any initial or subsequent deferral elections pursuant to Section 11(a) of this Plan, subject to the requirements of Section 409A of the Code, the terms of this Plan and the applicable Award Agreement and any applicable deferral election form, the Participant may elect to defer payment (that would otherwise occur upon the lapse of a substantial risk of forfeiture) for a fixed period of time measured from the date the Award is granted; provided, however, that in each case (i) the deferral election is made before the end of the election period established by the Administrator, and (ii) to the extent compliant with Section 409A of the Code, payment of any vested Award that the Participant has elected to defer will be made regardless of any deferral election (including any subsequent deferral election) within thirty (30) days of a change in control or the Participant's separation from service (including death). For purposes of this Section 11, “change in control” and “separation from service” shall be defined in the applicable Award Agreement and have the meanings set forth in Section 409A of the Code and the regulations thereunder (and, with respect to the definition of “separation from service”, after giving effect to the presumptions contained therein), and, notwithstanding anything herein to the contrary, if the Administrator allows deferral elections under an Award Agreement subject to Section 409A of the Code, neither Disability nor Retirement shall accelerate the time of payment of any Award (even if it accelerates vesting) unless there has been a “separation from service” or “disability” within the meaning of Section 409A of the Code and the regulations promulgated thereunder (and, with respect to the definition of “separation from service”, after giving effect to the presumptions contained therein). To the extent applicable, this provision, the Plan and any Awards hereunder are intended to comply with Section 409A of the Code and shall be interpreted accordingly. Should any payments made in accordance with the Plan to a specified employee, as defined by Section 409A of the Code, be determined to be payments from a nonqualified deferred compensation plan, as defined by Section 409A of the Code and are payable in connection with a Participant’s separation from service, that are not exempt from |
| 2023 PROXY STATEMENT
| | B-10
| |
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Section 409A of the Code as a short-term deferral or otherwise, these payments, to the extent otherwise payable within six (6) months after the Participant’s date of separation from service, will be paid in a lump sum on the earlier of the date that is six (6) months after the Participant’s date of separation from service or the date of the Participant’s death, to the extent necessary in order to avoid the imposition of taxes under Section 409A of the Code. |
| 2024 PROXY STATEMENT | | B-10 | |
TABLE OF CONTENTS 12. Conditions and Restrictions Upon Securities Subject to Awards The Administrator may provide that the Shares issued upon exercise of an Option or Stock Appreciation Right or otherwise subject to or issued under an Award shall be subject to such further agreements, restrictions, conditions or limitations as the Administrator in its sole and absolute discretion may specify prior to the exercise of such Option or Stock Appreciation Right or the grant, vesting or settlement of such Award, including without limitation, conditions on vesting or transferability, forfeiture or repurchase provisions and method of payment for the Shares issued upon exercise, vesting or settlement of such Award (including the actual or constructive surrender of Shares already owned by the Participant) or payment of taxes arising in connection with an Award. Without limiting the foregoing, such restrictions may address the timing and manner of any resales by the Participant or other subsequent transfers by the Participant of any Shares issued under an Award, including without limitation (i) restrictions under an insider trading policy or pursuant to applicable law; (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by Participant and holders of other Company equity compensation arrangements; (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers; and (iv) provisions requiring Shares to be sold on the open market or to the Company in order to satisfy tax withholding or other obligations. 13. Adjustment of and Changes in the Stock (a)
| General. The number and kind of Shares available for issuance under this Plan (including under any Awards then outstanding), and the number and kind of Shares subject to the limits set forth in Section 5 of this Plan, shall be equitably adjusted by the Administrator to reflect any reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend or distribution of securities, property or cash (other than regular, quarterly cash dividends), or any other event or transaction that affects the number or kind of Shares outstanding. Such adjustment may be designed to comply with Sections 409A and 424 of the Code as applicable, or except as otherwise expressly provided in Section 5(c) of this Plan, may be designed to treat the Shares available under the Plan and subject to Awards as if they were all outstanding on the record date for such event or transaction or to increase the number of such Shares to reflect a deemed reinvestment in Shares of the amount distributed to the Company's security holders. The terms of any outstanding Award shall also be equitably adjusted by the Administrator as to price, number or kind of Shares subject to such Award, vesting and other terms to reflect the foregoing events, which adjustments need not be uniform as between different Awards or different types of Awards. |
In the event there shall be any other change in the number or kind of outstanding Shares, or any stock or other securities into which such Shares shall have been changed, or for which it shall have been exchanged, by reason of a change of control, other merger, consolidation or otherwise, then the Administrator shall determine the appropriate and equitable adjustment to be effected. In addition, in the event of such change described in this paragraph, the Administrator may accelerate the time or times at which any Award may be exercised and may provide for cancellation of such accelerated Awards that are not exercised within a time prescribed by the Administrator in its sole and absolute discretion. No right to purchase fractional shares shall result from any adjustment in Awards pursuant to this Section 13. In case of any such adjustment, the Shares subject to the Award shall be rounded up to the nearest whole share for Awards other than Options and Stock Appreciation Rights, and shall be rounded down to the nearest whole Share with respect to Options and Stock Appreciation Rights. The Company shall notify Participants holding Awards subject to any adjustments pursuant to this Section 13 of such adjustment, but (whether or not notice is given) such adjustment shall be effective and binding for all purposes of the Plan. (b)
| Change in Control. Subject to and limited by the requirements of subsections (i), and (ii) and (iii) below, the Administrator shall determine the effect of a Change in Control on outstanding Awards. Such effects, which need not be the same for every Participant, may include, without limitation: (x) the substitution for the Shares subject to any outstanding Award, or portion thereof, of stock or other securities of the surviving corporation or any successor corporation to the Company, or a parent or subsidiary thereof, in which event the aggregate purchase or exercise price, if any, of such Award, or portion thereof, shall remain the same, and/or (y) the conversion of any outstanding Award, or portion thereof, into a right to receive cash or other property upon or following the consummation of the Change in Control in an amount equal to the value of the consideration to be received by holders of Shares in connection with such transaction for one Share, less the per share purchase or exercise price of such Award, if any, multiplied by the number of Shares subject to such Award, or a portion thereof. Notwithstanding the foregoing, Awards shall be treated as follows in connection with a Change in Control: |
(i)
| Acceleration of Vesting. The following provisions shall apply to Awards granted prior to the First Amendment Date: Without action by the Administrator or the Board: (a) all outstanding Options and Stock Appreciation Rights shall become immediately exercisable
|
| 2023 PROXY STATEMENT
| | B-11
| |
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in full and, notwithstanding any other provision of the Plan or the Award Agreement to the contrary and to the extent the Administrator does not determine that a cash payment shall be made with respect to such Options and Stock Appreciation Rights pursuant to the following Section 13(b)(iv), shall remain outstanding and exercisable during the remaining original terms thereof, regardless of whether the Participants to whom such Options and Stock Appreciation Rights have been granted remain in the employ or service of the Company or any Subsidiary; and (b) all other outstanding Awards shall become immediately fully vested and exercisable and non-forfeitable;
(ii)
| Double-Trigger Acceleration of Vesting of Time-Based Awards. The following provisions shall apply to Awards granted on or after the First Amendment Date that are subject to vesting based on continuous employment or service: To the extent an Award is assumed or substituted by an acquiror in connection with a Change in Control as contemplated by Section 13(b) above, such Award shall not immediately vest upon a Change in Control and instead shall continue to vest in accordance with its terms, provided, however, that if a Participant experiences a Termination of Employment by the Company without Cause or by the Participant for Good Reason, in either case, within the twenty-four- (24-) month period immediately following the Change in Control, the Award shall immediately vest and become exercisable or shall be settled upon such qualifying termination. The Participant's rights under this Section 13(b)(ii)(i) are in addition to any other rights Participant has in the event of death, Disability or Retirement. Notwithstanding anything in this Section 13(b)(ii) to the contrary, if, at any time during the vesting period of an Award, the Participant is or becomes eligible to terminate his or her employment with the Company or its Subsidiaries due to Retirement (without regard to the application of any Factor or any Determination Period) the Award shall immediately vest in full upon the Change in Control. In the event of acceleration in connection with a Termination of Employment as contemplated by this Section 13(b)(ii) |
| 2024 PROXY STATEMENT | | B-11 | |
TABLE OF CONTENTS to any other rights Participant has in the event of death, Disability or Retirement. Notwithstanding anything in this Section 13(b)(i) to the contrary, if, at any time during the vesting period of an Award, the Participant is or becomes eligible to terminate his or her employment with the Company or its Subsidiaries due to Retirement (without regard to the application of any Factor or any Determination Period) the Award shall immediately vest in full upon the Change in Control. In the event of acceleration in connection with a Termination of Employment as contemplated by this Section 13(b)(i), all outstanding Options and Stock Appreciation Rights shall remain outstanding and exercisable during the remaining original terms thereof; |
(iii)(ii)
| Treatment of Performance Awards. The following provisions shall apply to Awards granted on or after the First Amendment Date:not covered by Section 13(b)(i): If a Change in Control occurs prior to the end date of a performance period for a Performance Award, to the extent the Performance Award is outstanding immediately prior to such Change in Control, such Award will vest (A) based on actual performance through the date of the Change in Control as determined by the Administrator (treating the Change in Control as the end of the applicable performance period), without proration for the time elapsed in such performance period prior to such Change in Control for purposes of determining performance, but, in the discretion of the Administrator, prorated for purposes of elapsed time in a manner consistent with subsection (B), below, (B) assuming that target level of performance is attained and prorated based on the number of days in the performance period that elapsed prior to the Change in Control over the total number of days in the performance period, or (C) a combination of (A) and (B) (without double counting). Any portion of the Performance Award (or the full Award, as applicable) that does not vest in connection with a Change in Control as contemplated herein will automatically terminate upon such Change in Control; and |
(iv)
| Cash Payment for Stock Options/Stock Appreciation Rights. Without the consent of any Participant affected thereby, the Administrator may determine that some or all Participants holding outstanding vested and exercisable Options and/or Stock Appreciation Rights shall receive, with respect to some or all of the Shares subject to such Options and/or Stock Appreciation Rights, as of the effective date of any such Change in Control, cash in an amount equal to the greater of the excess of (A) the highest sales price of the shares on the New York Stock Exchange (or any successor exchange that is the primary stock exchange for trading of Shares) on the date immediately prior to the effective date of such Change in Control or (B) the highest price per share actually paid in connection with any Change in Control over the exercise price per share of such Options and/or Stock Appreciation Rights. |
14. Performance-Based Compensation (a)
| General. The Administrator may establish performance criteria and level of achievement versus such criteria that shall determine the number of Shares to be granted, retained, vested, issued or issuable under or in settlement of or the amount payable pursuant to an Award, which criteria may be based on performance criteria established by the Administrator, including, without limitation, standards of financial performance and/or personal performance evaluations. |
(b)
| Performance Criteria. For purposes of this Plan, the performance criteria selected by the Administrator may include, without limitation, an objectively determinable measure of performance relating to any one or more of the following performance criteria, or derivations of such performance criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit, division, line or Subsidiary, either individually, alternatively or in any combination, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years' results or to an index or indices or a designated comparison group or groups, in each case as specified by the Administrator: (i) net earnings or earnings per share (including earnings before interest, taxes, depreciation and/or amortization); (ii) income, net income or operating income; (iii) revenues; (iv) net sales; (v) return on sales; (vi) return on equity; (vii) return on capital (including return on total capital or return on invested capital); (viii) return on assets or net assets; (ix) earnings per share; (x) economic or business value added measurements; (xi) return on |
| 2023 PROXY STATEMENT
| | B-12
| |
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invested capital; (xii) return on operating revenue; (xiii) cash flow (before or after dividends); (xiv) stock price; (xv) total stockholder return; (xvi) market capitalization; (xvii) economic value added; (xviii) debt leverage (debt to capital); (xix) operating profit or net operating profit; (xx) operating margin or profit margin; (xxi) cash from operations; (xxii) market share; (xxiii) product development or release schedules; (xxiv) new product innovation; (xxv) cost reductions; (xxvi) customer acquisition or retention; (xxvii) customer service; (xxviii) customer satisfaction; or (xxix) any other performance target established by the Administrator as it deems appropriate. In the event that, during any performance period, any recapitalization, reorganization, merger, acquisition, divestiture, consolidation, spin-off, combination, liquidation, dissolution, sale of assets or other similar corporate transaction or event, or any other extraordinary event or circumstance occurs which has the effect, as determined by the Administrator, in its sole and absolute discretion, of distorting the applicable performance criteria involving the Company, including, without limitation, changes in accounting standards, the Administrator may adjust or modify, as determined by the Administrator, in its sole and absolute discretion, the calculation of the performance goals, to the extent necessary to prevent reduction or enlargement of the Participants’ Awards under the Plan for such performance period attributable to such transaction, circumstance or event. All determinations that the Administrator makes shall be conclusive and binding on all persons for all purposes. The Administrator retains the right to reduce any Award below the maximum amount that could be paid based on the degree to which the performance criteria related to such Award were attained. |
| 2024 PROXY STATEMENT | | B-12 | |
TABLE OF CONTENTS 15. Transferability Unless the Administrator determines otherwise, each Award may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated by a Participant other than by will or the laws of descent and distribution, and each Option or Stock Appreciation Right shall be exercisable only by the Participant during his or her lifetime. To the extent permitted by the Administrator, the person to whom an Award is initially granted (the “Grantee”) may transfer an Award to any “family member” of the Grantee (as such term is defined in Section 1(a)(5) of the General Instructions to Form S-8 under the Securities Act of 1933, as amended (“Form S-8”)), to trusts solely for the benefit of such family members and to partnerships in which such family members and/or trusts are the only partners; provided, however, that (i) as a condition thereof, the transferor and the transferee must execute a written agreement containing such terms as specified by the Administrator and (ii) the transfer is pursuant to a gift or a domestic relations order to the extent permitted under the General Instructions to Form S-8. Except to the extent specified otherwise in the agreement the Administrator provides for the Grantee and transferee to execute, all vesting, exercisability and forfeiture provisions that are conditioned on the Grantee's continued employment or service shall continue to be determined with reference to the Grantee's employment or service (and not to the status of the transferee) after any transfer of an Award pursuant to this Section 15. 16. Suspension, Termination or Recovery of Awards and Payments Thereunder Except as otherwise provided by the Administrator, if at any time (including after a notice of exercise has been delivered or an award has vested) the Company's chief executive officer or any other person designated by the Administrator (each such person, an “Authorized Officer”) reasonably believes that a Participant may have committed an Act of Misconduct as described in this Section 16, the Authorized Officer, Administrator or the Board may suspend the Participant's rights to exercise any Option, to vest in an Award, and/or to receive payment for or receive Shares in settlement of an Award pending a determination of whether an Act of Misconduct has been committed. If the Administrator or an Authorized Officer determines a Participant has committed an Act of Misconduct, then except as otherwise provided by the Administrator, including through any agreement approved by the Administrator, (i) neither the Participant nor his or her estate nor transferee shall be entitled to exercise any Option or Stock Appreciation Right whatsoever, vest in or have the restrictions on an Award lapse, or otherwise receive payment of an Award, (ii) the Participant will forfeit all outstanding Awards and (iii) the Participant may be required, at the Administrator's sole and absolute discretion, to return and/or repay to the Company any then unvested Shares previously issued under the Plan. In making such determination, the Administrator or an Authorized Officer shall give the Participant an opportunity to appear and present evidence on his or her behalf at a hearing before the Administrator or its designee or an opportunity to submit written comments, documents, information and arguments to be considered by the Administrator. In addition to the foregoing, the Administrator may recover Awards made under the Plan and payments under or gain in respect of any Award in accordance with the Company's Policy for Recovery of Incentive Compensation or any successor or additional clawback or recoupment policy, as such policy or policies may be amended and in effect from time to time, or as otherwise required by applicable law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Act. | 2023 PROXY STATEMENT
| | B-13
| |
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17. Compliance with Laws and Regulations This Plan, the grant, issuance, vesting, exercise and settlement of Awards thereunder, and the obligation of the Company to sell, issue, deliver or remove any restrictions on Shares under such Awards, shall be subject to all applicable foreign, federal, state and local laws, rules and regulations, stock exchange rules and regulations, and to such approvals by any governmental or regulatory agency as may be required. The Company shall not be required to register in a Participant's name or deliver any Shares prior to the completion of any registration or qualification of such shares under any foreign, federal, state or local law or any ruling or regulation of any government body which the Administrator shall determine to be necessary or advisable. To the extent the Company is unable to or the Administrator deems it infeasible to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, the Company and its Subsidiaries shall be relieved of any liability with respect to the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. No Option shall be exercisable and no Shares shall be issued and/or transferable under any other Award unless a registration statement with respect to the Shares underlying such Option is effective and current or the Company has determined that such registration is unnecessary. In the event an Award is granted to or held by a Participant who is employed or providing services outside the United States, the Administrator may, in its sole and absolute discretion, modify the provisions of the Plan or of such Award as they pertain to such individual to comply with applicable foreign law or to recognize differences in local law, currency or tax policy. The Administrator may also impose conditions on the grant, issuance, exercise, vesting, settlement or retention of Awards in order to comply with such foreign law and/or to minimize the Company's obligations with respect to tax equalization for Participants employed outside their home country. | 2024 PROXY STATEMENT | | B-13 | |
TABLE OF CONTENTS 18. Withholding To the extent required by applicable federal, state, local or foreign law, a Participant shall be required to satisfy, in a manner satisfactory to the Company, any withholding tax obligations that arise by reason of an Option exercise, disposition of Shares issued under an Incentive Stock Option, the grant, vesting or settlement of an Award, an election pursuant to Section 83(b) of the Code or otherwise with respect to an Award. To the extent a Participant makes an election under Section 83(b) of the Code, within ten days of filing such election with the Internal Revenue Service, the Participant must notify the Company in writing of such election. The Company and its Subsidiaries shall not be required to issue Shares, make any payment or to recognize the transfer or disposition of Shares until all such obligations are satisfied. The Administrator may provide for or permit these obligations to be satisfied through the mandatory or elective sale of Shares and/or by having the Company withhold a portion of the Shares that otherwise would be issued to him or her upon exercise of the Option or the vesting or settlement of an Award, or by tendering Shares previously acquired. 19. Administration of the Plan (a)
| Administrator of the Plan. The Plan shall be administered by the Administrator who shall be the Compensation Committee of the Board or, in the absence of a Compensation Committee, the Board itself. Any power of the Administrator may also be exercised by the Board, except to the extent that the grant or exercise of such authority would cause any Award or transaction to become subject to (or lose an exemption under) the short-swing profit recovery provisions of Section 16 of the Act. To the extent that any permitted action taken by the Board conflicts with action taken by the Administrator, the Board action shall control. The Compensation Committee may by resolution authorize one or more officers of the Company to perform any or all things that the Administrator is authorized and empowered to do or perform under the Plan, and for all purposes under this Plan, such officer or officers shall be treated as the Administrator; provided, however, that no such officer shall designate himself or herself as a recipient of any Awards granted under authority delegated to such officer and that any delegation of the power to grant Awards to an officer shall otherwise be consistent with the requirements of Section 157(c) of the Delaware General Corporation Law. The Compensation Committee hereby designates the Company's chief executive officer, the Company's chief financial officer, the Secretary of the Company, and the head of the Company's human resource function to assist the Administrator in the administration of the Plan and execute agreements evidencing Awards made under this Plan or other documents entered into under this Plan on behalf of the Administrator or the Company. In addition, the Compensation Committee may delegate any or all aspects of the day-to-day administration of the Plan to one or more officers or employees of the Company or any Subsidiary and/or to one or more agents. |
| 2023 PROXY STATEMENT
| | B-14
| |
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(b)
| Powers of Administrator. Subject to the express provisions of this Plan, the Administrator shall be authorized and empowered to do all things that it determines to be necessary or appropriate in connection with the administration of this Plan, including, without limitation: (i) to prescribe, amend and rescind rules and regulations relating to this Plan and to define terms not otherwise defined herein; (ii) to determine which persons are Participants, to which of such Participants, if any, Awards shall be granted hereunder and the timing of any such Awards; (iii) to grant Awards to Participants and determine the terms and conditions thereof, including the number of Shares subject to Awards and the exercise or purchase price of such Shares and the circumstances under which Awards become exercisable or vested or are forfeited or expire, which terms may but need not be conditioned upon the passage of time, continued employment, the satisfaction of performance criteria, the occurrence of certain events, or other factors; (iv) to establish and verify the extent of satisfaction of any performance goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any Award; (v) to prescribe and amend the terms of the agreements or other documents evidencing Awards made under this Plan (which need not be identical) and the terms of or form of any document or notice required to be delivered to the Company by Participants under this Plan; (vi) to determine the extent to which adjustments are required pursuant to Section 13 of the Plan; (vii) to interpret and construe this Plan, any rules and regulations under this Plan and the terms and conditions of any Award granted hereunder, and to make exceptions to any such provisions if the Administrator, in good faith, determines that it is necessary to do so in light of extraordinary circumstances and for the benefit of the Company; (viii) to approve corrections in the documentation or administration of any Award; and (ix) to make all other determinations deemed necessary or advisable for the administration of this Plan. The Administrator may, in its sole and absolute discretion, without amendment to the Plan, waive or amend the operation of Plan provisions respecting exercise after termination of employment or service to the Company or an Affiliateaffiliate and, except as otherwise provided herein, adjust any of the terms of any Award. The Administrator may also (A) accelerate the date on which any Award granted under the Plan becomes exercisable or (B) accelerate the vesting date or waive or adjust any condition imposed hereunder with respect to the vesting or exercisability of an Award, provided that the Administrator, in good faith, determines that such acceleration, waiver or other adjustment is necessary or desirable. For the avoidance of doubt, notwithstanding anything in the Plan to the contrary, no Award outstanding under the Plan may be repriced, re-granted through cancellation or otherwise amended to reduce the exercise price applicable thereto (other than with respect to adjustments made in connection with a transaction or other change in the Company's capitalization as described in Section 13 of the Plan) without the approval of the Company's stockholders. |
| 2024 PROXY STATEMENT | | B-14 | |
TABLE OF CONTENTS (c)
| Determinations by the Administrator. All decisions, determinations and interpretations by the Administrator regarding the Plan, any rules and regulations under the Plan and the terms and conditions of or operation of any Award granted hereunder, shall be final and binding on all Participants, beneficiaries, heirs, assigns or other persons holding or claiming rights under the Plan or any Award. The Administrator shall consider such factors as it deems relevant, in its sole and absolute discretion, to making such decisions, determinations and interpretations including, without limitation, the recommendations or advice of any officer or other employee of the Company and such attorneys, consultants and accountants as it may select. |
(d)
| Subsidiary Awards. In the case of a grant of an Award to any Participant employed by a Subsidiary, such grant may, if the Administrator so directs, be implemented by the Company issuing any subject Shares to the Subsidiary, for such lawful consideration as the Administrator may determine, upon the condition or understanding that the Subsidiary will transfer the Shares to the Participant in accordance with the terms of the Award specified by the Administrator pursuant to the provisions of the Plan. Notwithstanding any other provision hereof, such Award may be issued by and in the name of the Subsidiary and shall be deemed granted on such date as the Administrator shall determine. |
(e)
| Indemnification of Administrator. Neither any member nor former member of the Administrator nor any individual to whom authority is or has been delegated shall be personally responsible or liable for any act or omission in connection with the performance of powers or duties or the exercise of discretion or judgment in the administration and implementation of the Plan. Each person who is or shall have been a member of the Administrator shall be indemnified and held harmless by the Company from and against any cost, liability or expense imposed or incurred in connection with such person's or the Administrator's taking or failing to take any action under the Plan. Each such person shall be justified in relying on information furnished in connection with the Plan's administration by any employee, officer, agent or expert employed or retained by the Administrator or the Company. |
20. Amendment of the Plan or Awards The Board may amend, alter or discontinue this Plan and the Administrator may amend or alter any agreement or other document evidencing an Award made under this Plan but, except as provided pursuant to the provisions of Section 13 of the Plan, no such amendment shall, without the approval of the stockholders of the Company: (a)
| increase the maximum number of Shares for which Awards may be granted under this Plan; |
| 2023 PROXY STATEMENT
| | B-15
| |
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(b)
| reduce the price at which Options or Stock Appreciation Rights may be granted below the price provided for in Section 6(a) of the Plan; |
(c)
| reduce the exercise price of outstanding Options or Stock Appreciation Rights; |
(d)
| extend the term of this Plan; |
(e)
| change the class of persons eligible to be Participants; or |
(f)
| otherwise amend the Plan in any manner requiring stockholder approval by law or under the New York Stock Exchange listing requirements (or the listing requirements of any successor exchange that is the primary stock exchange for trading of Shares). |
No amendment or alteration to the Plan or an Award or Award Agreement shall be made which would impair the rights of the holder of an Award, without such holder's consent, provided that no such consent shall be required if the Administrator determines in its sole and absolute discretion and prior to the date of any Change in Control that such amendment or alteration either is required or advisable in order for the Company, the Plan or the Award to satisfy any law or regulation or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard. In addition, the Plan may not be amended in any way that causes the Plan to fail to comply with or be exempt from Section 409A of the Code, unless the Board expressly determines to amend the Plan to be subject to Section 409A of the Code. 21. No Liability of Company The Company and any Subsidiary or affiliate which is in existence or hereafter comes into existence shall not be liable to a Participant or any other person as to: (a) the non-issuance or sale of Shares as to which the Company has been unable to obtain from any regulatory body having jurisdiction the authority deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder and (b) any tax consequence expected, but not realized, by any Participant or other person due to the grant, receipt, exercise, settlement of any Award granted hereunder. | 2024 PROXY STATEMENT | | B-15 | |
TABLE OF CONTENTS 22. Non-Exclusivity of Plan Neither the adoption of this Plan by the Board nor the submission of this Plan to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or the Administrator to adopt such other incentive arrangements as either may deem desirable, including without limitation, the granting of restricted stock or stock options otherwise than under this Plan, , and such arrangements may be either generally applicable or applicable only in specific cases. 23. Governing Law This Plan and any agreements or other documents hereunder shall be interpreted and construed in accordance with the laws of Delaware and applicable federal law. Any reference in this Plan or in the agreement or other document evidencing any Awards to a provision of law or to a rule or regulation shall be deemed to include any successor law, rule or regulation of similar effect or applicability. 24. Waiver of Jury Trial By accepting an Award under the Plan, each Participant waives any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under any amendment, waiver, consent, instrument, document or other agreement delivered or which in the future may be delivered in connection therewith, and agrees that any such action, proceedings or counterclaim will be tried before a court and not before a jury. By accepting an Award under the Plan, each Participant certifies that no officer, representative, or attorney of the Company has represented, expressly or otherwise, that the Company would not, in the event of any action, proceeding or counterclaim, seek to enforce the foregoing waivers. Notwithstanding anything to the contrary in the Plan, nothing herein is to be construed as limiting the ability of the Company and a Participant to agree to submit disputes arising under the terms of the Plan or any Award made hereunder to binding arbitration or as limiting the ability of the Company to require any eligible individual to agree to submit such disputes to binding arbitration as a condition of receiving an Award hereunder. | 2023 PROXY STATEMENT
| | B-16
| |
TABLE OF CONTENTS
25. No Right to Employment, Reelection or Continued Service Nothing in this Plan or an Award Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries and/or its affiliates to terminate any Participant's employment, service on the Board or service for the Company at any time or for any reason not prohibited by law, nor shall this Plan or an Award itself confer upon any Participant any right to continue his or her employment or service for any specified period of time. Neither an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company, any Subsidiary and/or its affiliates. Subject to Sections 4 and 20 of the Plan, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Board without giving rise to any liability on the part of the Company, its Subsidiaries and/or its affiliates. 26. Unfunded Plan The Plan is intended to be an unfunded plan. Participants are and shall at all times be general creditors of the Company with respect to their Awards. If the Administrator or the Company chooses to set aside funds in a trust or otherwise for the payment of Awards under the Plan, such funds shall at all times be subject to the claims of the creditors of the Company in the event of its bankruptcy or insolvency. Effective as of February 8, 2023May 2, 2024 | 20232024 PROXY STATEMENT
| | B-17B-16
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0000110471 4 2023-01-01 2023-12-30 |
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