UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2)) |
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material Pursuant to §240.14a-12 |
American Outdoor Brands Corporation
Smith & Wesson Brands, Inc. |
(Name of Registrant as Specified in its Charter) |
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) |
Payment of Filing Fee (Check the appropriate box):
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AMERICAN OUTDOOR BRANDS CORPORATION
MEETING AND PROXY STATEMENT 2022 NOTICE OF ANNUAL STOCKHOLDER MEETING AND PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
September 24, 2019
Date: Monday, September 12, 2022 | Time: 10a.m. Eastern Time | Location: www.virtualshareholder meeting.com/SWBI2022 |
The Annual Meeting of Stockholders of American OutdoorSmith & Wesson Brands, Corporation,Inc., a Nevada corporation, will be held at 12:10:00 p.m.a.m., Eastern Time, on Tuesday,Monday, September 24, 2019.12, 2022 (the “2022 Annual Meeting”). The 2022 Annual Meeting of Stockholders will be a virtual meeting of stockholders. You will be able to attend the 2022 Annual Meeting, of Stockholders, vote, and submit your questions during the live webcast of the meeting by visitingwww.virtualshareholdermeeting.com/AOBC2019SWBI2022 and entering the16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials. The Annual Meeting of Stockholders will be held for the following purposes:
1. To elect directors to serve until our next annual meeting of stockholders and until their successors are elected and qualified.
2. To provide anon-binding advisory vote on the compensation of our named executive officers for fiscal 2019(“say-on-pay”).
3. To ratify the appointment of Deloitte & Touche LLP, an independent registered public accounting firm, as the independent registered public accountant of our company for the fiscal year ending April 30, 2020.
4. To vote upon a stockholder proposal, if properly presented at the meeting.
5. To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
These items of business are more fully described in the proxy statement accompanying this notice.
Only stockholders of record at the close of business on July 31, 2019 are entitled to notice of and to vote at the meeting or any adjournment or postponement thereof.
All stockholders are cordially invited to attend the meeting and vote electronically during the meeting. To assure your representation at the meeting, however, you are urged to vote by proxy as soon as possible over the Internet, by telephone or by mail by following the instructions on the proxy card. You may vote electronically during the meeting even if you have previously given your proxy.
Sincerely,
Robert J. Cicero
Secretary
Springfield, Massachusetts
August 16, 2019
AMERICAN OUTDOOR BRANDS CORPORATION
2100 Roosevelt Avenue
Springfield, Massachusetts 01104
PROXY STATEMENT
General
The enclosed proxy is being solicited on behalf of American Outdoor Brands Corporation, a Nevada corporation, by our Board of Directors for use at our Annual Meeting of Stockholders to be held at 12:00 p.m., Eastern Time, on Tuesday, September 24, 2019, or at any adjournment or postponement thereof, for the purposes set forth in this proxy statement and in the accompanying notice. The Annual Meeting of Stockholders will be a virtual meeting. You will be able to attend the Annual Meeting of Stockholders during the live webcast of the meeting by visitingwww.virtualshareholdermeeting.com/AOBC2019 and entering the16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials.
These proxy solicitation materials were first released on or about August 16, 2019 to all stockholders entitled to vote at the meeting.
Important Notice Regarding the Availability of Proxy MaterialsThe 2022 Annual Meeting will be held for the Stockholder Meeting To Be Held on September 24, 2019. These proxy materials, which include the notice of annual meeting, this proxy statement, and our 2019 Annual Report for the fiscal year ended April 30, 2019, are available atwww.proxyvote.com.
How Does the Board of Directors Recommend That You Vote
The Board of Directors recommends that you vote as follows:following purposes:
ITEMS OF BUSINESS | |
1 |
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2 | Advisory vote to approve executive compensation |
3 | Approval of the |
4 |
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5 | Stockholder proposals, if properly presented | ||
And such other business as may properly come before the |
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Stockholders Entitled to Vote; Record Date; How to Vote
Stockholders of record at the close of business on July 31, 2019, which we have set as the record date, are entitled to notice of and to18, 2022 may vote at the meeting. On2022 Annual Meeting.
These proxy materials were first made available to our stockholders on the record date, there were outstanding 54,820,526 sharesinternet on August 3, 2022.
Sincerely,
Kevin A. Maxwell
Senior Vice President,
General Counsel, Chief Compliance Officer, and Secretary
August 3, 2022
1 | |
3 | |
7 | |
16 | |
16 | |
17 | |
24 | |
38 | |
45 | |
Proposal Four – Ratification Of Appointment Of Independent Registered Public Accountant | 45 |
47 | |
52 | |
54 | |
54 | |
55 | |
55 | |
Frequently Asked Questions Regarding The 2022 Annual Meeting And Voting | 55 |
A-1 | |
This summary highlights information contained elsewhere in this Proxy Statement. You should read this entire Proxy Statement carefully before voting.
MEETING INFORMATION | |||||||
Time and Date | 10:00 a.m., Eastern Time, on Monday, September 12, 2022 | ||||||
Location | Online via webcast at www.virtualshareholdermeeting.com/SWBI2022 | ||||||
Record Date | July 18, 2022 | ||||||
MEETING AGENDA |
Proposals |
| Board Recommendation |
| Page | |
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1. | Election of Eight Directors |
| FOR each nominee |
| 3 |
2. | Advisory Vote to Approve Executive Compensation |
| FOR |
| 16 |
3. | Approval of Smith & Wesson Brands, Inc. 2022 Incentive Stock Plan |
| FOR |
| 17 |
4. | Ratification of Appointment of Deloitte & Touche, LLP |
| FOR |
| 45 |
5-6. | Vote on Stockholder Proposals |
| AGAINST |
| 47, 52 |
Name | Age | Director Since | Experience | Committee Memberships | Other Public Company Boards |
Anita D. Britt * | 59 | 2018 | Former CFO of Perry Ellis International, Inc. | AC **, CC, ESG | 3 |
Fred M. Diaz * | 56 | 2021 | Former President and CEO of Mitsubishi Motor North America, Inc. | CC, ESG | 3 |
John B. Furman * | 78 | 2004 | Former Senior Member of the law firm of O’Connor, Cavanagh, Anderson, Killingsworth & Beshears | AC, CC, NCG ** | 0 |
Michael F. Golden *§§ | 68 | 2004 | Former President and CEO of a predecessor of Smith & Wesson Brands, Inc. | ESG** | 1 |
Barry M. Monheit * | 75 | 2004 | Senior Managing Director of J.S. Held, LLC | CC **, NCG | 1 |
Robert L. Scott *§ | 76 | 2004 | Former President of a predecessor of Smith & Wesson Brands, Inc. | AC, NCG | 0 |
Mark P. Smith | 46 | 2020 | President and CEO of Smith & Wesson Brands, Inc. |
| 0 |
Denis G. Suggs * | 56 | 2021 |
CEO of LCP Transportation LLC
| AC, NCG | 1 |
* = Independent Nominee; ** = Committee Chair; § =Chairman; §§ = Vice Chairman
AC = Audit Committee; CC = Compensation Committee; ESG = Environmental, Social, and Governance Committee; NCG = Nominations and Corporate Governance Committee
2022 Proxy Statement I 1 |
Proxy Statement Summary | |
PERFORMANCE HIGHLIGHTS AND KEY ACCOMPLISHMENTS
Our performance highlights for the fiscal year ended April 30, 2022 (“fiscal 2022”) include:
$864 million Net Sales | $375 million Gross Profit (43% Gross Profit Margin) | $105 million Returned to Stockholders (Dividends and Repurchases) |
Our fiscal 2022 key accomplishments include:
Announced the Relocation of our Corporate Headquarters In September 2021, we announced our plan to move our headquarters and significant elements of our operations to Maryville, TN (the “Relocation”). We considered many factors in evaluating the Relocation, including legislation introduced in the MA legislature that would prohibit us from manufacturing certain types of firearms and accessories in MA. We responded to this significant risk to our business by taking decisive action that we believe is in our best interests and in the best interests of our stockholders. Similarly, we considered many factors in selecting Maryville, TN, including the state’s general support for the 2nd Amendment and its business-friendly environment, and the city’s favorable location for distribution efficiency. |
GOVERNANCE HIGHLIGHTS
Board Refreshment
We recognize the importance of board refreshment. Among our common stock. Eacheight director nominees, four have joined the Board since 2018 and two joined last year. These changes demonstrate the Board’s commitment to refreshment, including with independent nominees who provide perspectives and experience to advance our business. Our director nominees include one woman, one racial minority, and one ethnic minority.
Enhanced Disclosure
In response to feedback that we received from our investors, we have expanded our public disclosures both in documents filed with the Securities and Exchange Commission (“SEC”) and through the publication of other relevant material. In November 2021, we published our first Environmental Factsheet, which, among other things, highlighted our commitment to responsible environmental practices and described our approach to environmental management. In June 2022, we published our first Firearm Market Factsheet, which was intended to increase transparency around our business practices by, among other things, describing our go-to-market sales approach and highlighting our commitment to promoting responsible firearm ownership.
ESG Oversight
We recognize that progress on environmental, social, and governance (“ESG”) matters is an ongoing journey of continuous improvement. We are continuously improving our ESG strategy. In 2021, the Board formed the Environmental, Social, and Governance Committee (the “ESG Committee”) to assist the Board and its committees in fulfilling the Board’s oversight responsibilities with various environmental, social, health, safety, and governance policies and operational control matters relevant to us.
Stockholder Engagement
We recognize the importance of stockholder voting atengagement. We engage year-round with our stockholders to ensure that we understand and consider the issues that matter most to them. For example, prior to our annual meeting either electronically during the meeting or by proxy, may cast one vote per share of common stockstockholders held on all mattersSeptember 27, 2021 (the “2021 Annual Meeting”), we met with our largest investors to be voteddiscuss the stockholder proposal that was included in our proxy materials. In March and July 2022, we met again with some of those investors to discuss the progress we have made on atour ESG journey. In addition to engaging with our largest investors, we have devoted significant resources engaging with the meeting.stockholder proponent for Proposal #5 – we spoke directly with the proponent on four occasions since the 2021 Annual Meeting.
2 I 2022 Proxy Statement |
PROPOSAL ONE – ELECTION OF DIRECTORS
What am I voting on? Stockholders are being asked to elect each of the eight director nominees named in this Proxy Statement to hold office until the annual meeting of stockholders in 2023 (the “2023 Annual Meeting”) and until his or her successor is elected and qualified. |
Voting Recommendation: FORthe election of each of the eight director nominees | ||||
Vote Required: |
If, on July 31, 2019, your shares were registered directly in your name with our transfer agent, Issuer Direct Corporation, then you are a stockholder of record. As a stockholder of record, you may vote electronically during the meeting. Alternatively, you may vote by proxy over the Internet as instructed on the enclosed proxy card, by mail by filling out and returning the accompanying proxy card, or by telephone as instructed on the enclosed proxy card. Whether or not you plan to attend the meeting, we urge you to vote by proxy over the Internet as instructed on the enclosed proxy card, by mail by filling out and returning the enclosed proxy card, or by telephone as instructed on the enclosed proxy card to ensure your vote is counted. Even if you have submitted a proxy before the meeting, you may still attend the meeting and vote electronically during the meeting.
If, on July 31, 2019, your shares were held in an account at a brokerage firm, bank, or similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the meeting. As a beneficial owner, you have the right to direct your broker, bank, or other nominee on how to vote the shares in your account. You should have received voting instructions with these proxy materials from that organization rather than from us. You should follow the instructions provided by that organization to submit your proxy. You are also invited to attend the meeting. However, since you are not the stockholder of record, you may not vote your shares electronically during the meeting unless you obtain a “legal proxy” from the broker, bank, or other nominee that holds your shares giving you the right to vote the shares at the meeting.
How to Attend the Meeting; Asking Questions
You are entitled to attend the meeting only if you were a stockholder of record at the close of business on July 31, 2019, which we have set as the record date, or you hold a valid proxy for the meeting. You may attend the meeting by visitingwww.virtualshareholdermeeting.com/AOBC2019 and using your16-digit control number included on your proxy card or in the instructions that accompanied your proxy materials to enter the meeting. If, on July 31, 2019, your shares were held in an account at a brokerage firm, bank, or similar organization, then you are the beneficial owner of shares held in “street name,” and you will be required to provide proof of beneficial ownership, such as your most recent account statement as of the record date, a copy of the voting instruction form provided by your broker, bank, trustee, or nominee, or other similar evidence of ownership. If you do not comply with the procedures outlined above, you will not be admitted to the virtual annual meeting.
Stockholders who wish to submit a question for the meeting may do so live during the meeting atwww.virtualshareholdermeeting.com/AOBC2019.
Quorum
The presence, in person or by proxy, of the holders of a majority of the total number of shares of common stock entitled to vote constitutes a quorum for the transaction of business at the meeting. Votes cast electronically during the meeting or by proxy at the meeting will be tabulated by the election inspector appointed for the meeting, who will determine whether a quorum is present.
Required Vote
Assuming that a quorum is present, the affirmative vote of a majority of the votes cast will be required for the election of each director nominee, to ratify the appointment of Deloitte & Touche LLP, an independent registered public accounting firm, as the independent registered public accountant of our company for the fiscal year ending April 30, 2020, and to approve the stockholder proposal. The
Broker Discretionary Voting Allowed? No – broker non-votes have no effect Abstentions: No effect | |
Director Nominees
advisory vote onThe Board has eight members. Pursuant to the compensation of our named executive officers for fiscal 2019(“say-on-pay”) isnon-binding, but our Board of Directors will consider the input of stockholders based on a majority of votes cast for thesay-on-pay proposal.
BrokerNon-Votes and Abstentions
Brokers, banks, or other nominees that hold shares of common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion if permitted by the stock exchange or other organization of which they are members. Brokers, banks, and other nominees are permitted to vote the beneficial owner’s proxy in their own discretion as to certain “routine” proposals when they have not received instructions from the beneficial owner, such as the ratificationrecommendation of the appointment of Deloitte & Touche LLP asNCG Committee, the independent registered public accountant of our company for the fiscal year ending April 30, 2020. If a broker, bank, or other nominee votes such “uninstructed” shares for or against a “routine” proposal, those shares will be counted towards determining whether or not a quorum is present and are considered entitled to vote on the “routine” proposals. However, where a proposal is not “routine,” a broker, bank, or other nominee is not permitted to exercise its voting discretion on that proposal without specific instructions from the beneficial owner. Thesenon-voted shares are referred to as “brokernon-votes” when the nomineeBoard has voted on othernon-routine matters with authorization or voted on routine matters. These shares will be counted towards determining whether or not a quorum is present, but will not be considered entitled to vote on the“non-routine” proposals.
Please note that brokers, banks, and other nominees may not use discretionary authority to vote shares on the election of directors, thesay-on-pay proposal, or the stockholder proposal if they have not received specific instructions from their clients. For your vote to be counted in the election of directors, thesay-on-pay proposal, and the stockholder proposal, you will need to communicate your voting decisions to your broker, bank, or other nominee before the date of the meeting.
As provided in our bylaws, a majority of the votes cast means that the number of shares voted “for” a nomineenominated each current director for election to our Board of Directors or any other proposal exceeds the number of shares voted “against” such nominee or other proposal. Because abstentions and brokernon-votes do not represent votes cast “for” or “against” a proposal, abstentions and brokernon-votes will have no effect on the election of directors, thesay-on-pay proposal, the proposal to ratify the appointment of Deloitte & Touche LLP as the independent registered public accountant of our company for the fiscal year ending April 30, 2020, or the stockholder proposal, as each such proposal is determined by reference to the votes actually cast by the shares present in person or by proxy at the meeting2022 Annual Meeting. If elected, each director nominee will hold office until the 2023 Annual Meeting and entitled to vote.
In accordance with our director resignation policy, an incumbent director who does not receive the requisite majority of votes cast in an uncontested election is expected to submituntil his or her offer of resignation to our Board of Directors. Our Board of Directors, upon recommendation of the Nominationssuccessor is elected and Corporate Governance Committee, will make a determination as to whether to accept or reject the offered resignation within 90 days after the stockholder vote. A director whose offered resignation is under consideration will abstain from any decision or recommendation regarding the offered resignation, but will otherwise continue to serve as a director until our Board of Directors makes its determination regarding the offered resignation. We will publicly disclose our Board of Directors’ decision regarding the tendered resignation and the rationale behind the decision in a filing of a Current Report on Form8-K with the Securities and Exchange Commission, or the SEC.
Voting of Proxies
When a proxy is properly executed and returned, the shares it represents will be voted at the meeting as directed. Except as provided above under “BrokerNon-Votes and Abstentions,” if no specification is indicated, the shares will be voted (1) “for” the election of each of the nine director nominees set forth in this proxy statement, (2) “for” the approval of the compensation of our named executive officers for fiscal 2019, (3) “for” the ratification of the appointment of Deloitte & Touche LLP as the independent registered public accountant of our company for the fiscal year ending April 30, 2020, and (4) “against” the stockholder proposal.qualified. If any other matter is properly presented at the meeting, the individuals specified in the proxy will vote your shares using their best judgment.
Revocability of Proxies
Any person giving a proxy may revoke the proxy at any time before its use by delivering to us either a written notice of revocation or a duly executed proxy bearing a later date or by attending the meeting and voting electronically during the meeting (as provided under “Stockholders Entitled to Vote; Record Date; How to Vote”). Attendance at the meeting will not cause your previously granted proxy to be revoked unless you specifically so request.
Solicitation
We will bear the cost of this solicitation. In addition, we may reimburse brokerage firms and other persons representing beneficial owners of shares for expenses incurred in forwarding solicitation materials to such beneficial owners. Proxies also may be solicited by certain of our directors and officers, personally or by telephone ore-mail, without additional compensation.
We have retained Morrow Sodali, a proxy solicitation firm, to perform various solicitation services in connection with the Annual Meeting of Stockholders. We will pay Morrow Sodali a fee not to exceed $10,000, plus phone and other related expenses, in connection with its solicitation services. Morrow Sodali has engaged approximately 15 of its employees to assist us in connection with the solicitation of proxies.
Annual Report and Other Matters
Our 2019 Annual Report to Stockholders, which was made available to stockholders with or preceding this proxy statement, contains financial and other information about our company, but is not incorporated into this proxy statement and is not to be considered a part of these proxy materials or subject to Regulations 14A or 14C or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The information contained in the “Compensation Committee Report” and the “Report of the Audit Committee” shall not be deemed “filed” with the SEC or subject to Regulations 14A or 14C or to the liabilities of Section 18 of the Exchange Act.
We will provide, without charge, a copy of our Annual Report on Form10-K for the fiscal year ended April 30, 2019 as filed with the SEC to each stockholder of record as of the record date that requests a copy in writing. Any exhibits listed in our Annual Report on Form10-K also will be furnished upon request at the actual expense we incur in furnishing such exhibits. Any such requests should be directed to our Secretary at the address of our executive offices set forth in this proxy statement.
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Nominees
Our articles of incorporation and bylaws provide that the number of directors shall be fixed from time to time by resolution of our Board of Directors. The number of directors is currently fixed at ten. Our Board has fixed the number of directors at nine effective immediately following the retirement of Robert H. Brust from the Board and prior to the Annual Meeting of Stockholders. Our articles of incorporation and bylaws provide that all directors are elected at each annual meeting of our stockholders for a term of one year and hold office until their successors are elected and qualified.
A board of 9 directors is to be elected at this meeting. Unless otherwise instructed, the proxy holders will vote the proxies received by them “for” each of the nominees named below. All of the nominees currently are directors of our company. In the event that anydirector nominee is unable or declines to serve as a director at the time of the meeting,2022 Annual Meeting, the proxies will be voted for any nominee designated by our current Board of Directors to fill the vacancy. It isWe do not expectedexpect that any director nominee will be unable or will decline to serve as a director.
Our
All director nominees have held senior-level positions in business or professional service firms and have experience in dealing with complex issues. We believe that all director nominees are individuals of high character and integrity, are able to work well with others, and have committed to devote sufficient time to our business and affairs. Information about the director nominees, including about their qualifications and skills to serve on the Board, of Directors recommends a vote “for” the nominees listedis set forth below.
The following table sets forth certain information regarding the nominees for directors of our company:
ANITA D. BRITT | |||||
Director Since: 2018 Independent Board Committees: • Audit • Compensation • ESG Other public company boards: • Delta Apparel, Inc. • urban-gro, Inc. • VSE Corporation Other public company boards within five years: • None | Background: Ms. Britt served as CFO of Perry Ellis International, Inc. from 2009 to 2017. From 2006 to 2009, she served as CFO of Urban Brands, Inc. From 1993 to 2006, Ms. Britt served in various positions, including as EVP, Finance, for Jones Apparel Group, Inc. She served on the Board of Trustees and Finance Committee of St. Thomas University from 2013 to 2018 and as its CFO for a part of 2018. Ms. Britt is a CPA and a member of the American Institute of Certified Public Accountants and the Pennsylvania Institute of Certified Public Accountants. She is also a Board Leadership Fellow, as designated by the National Association of Corporate Directors. Ms. Britt has received the Carnegie Mellon Cybersecurity Oversight Certificate. | ||||
Key Qualifications and Skills: We believe Ms. Britt is qualified to serve on the Board due, in part, to her financial leadership experience at a number of public and private companies, experience with consumer-oriented companies, and experience with other public company boards of directors. |
2022 Proxy Statement I 3 |
Proposal One | |
FRED M. | |
Age: 56 Director Since: 2021 Independent Board Committees: • Compensation • ESG Other public company boards: • SiteOne Landscape Supply, Inc. • Valero Energy Corporation • Archer Aviation Inc. Other public company boards within five years: • None | Background: Mr. Diaz served as President and CEO of Mitsubishi Motor North America, Inc. from 2018 to 2020 and as General Manager, Performance Optimization Global Marketing and Sales of Mitsubishi Motors Corporation in Tokyo, Japan from 2017 to 2018. He served in various executive level positions with Nissan North America Inc. for four years and Chrysler Corporation LLC for 24 years as the President and CEO of both the Ram Truck Brand and Chrysler of Mexico. |
Key Qualifications and Skills: We believe Mr. Diaz is qualified to serve on the Board due, in part, to his executive experience (including service as a CEO), management and marketing experience, and experience with other public company boards of directors. | |
JOHN B. FURMAN | |
Age: 78 Director Since: 2004 Independent Board Committees: • Audit • NCG • Compensation Other public company boards: • None Other public company boards within five years: • None | Background: Mr. Furman served as a senior partner of the law firm of O’Connor, Cavanagh, Anderson, Killingsworth & Beshears from 1983 to 1998. Since leaving the practice of law, he has served as a consultant to, or an executive of, a number of companies, with a focus on restructurings, business transactions, capital formation, and product commercialization. Mr. Furman formerly served as President and CEO of Infinity Resources LLC (now Quest Resource Holding Corporation), as President and CEO of GameTech International, a publicly traded company, and as President and CEO and a director of Rural/Metro Corporation, a publicly traded company. Prior to joining O’Connor, Cavanagh, Anderson, Killingsworth & Beshears, he served as an Associate General Counsel for Waste Management, Inc., a publicly traded company, and as Vice President, Secretary and General Counsel of the Warner Company, a publicly traded company. Mr. Furman previously served as a director and Chairman of the Compensation Committee of MarineMax, Inc., a publicly traded company. |
Key Qualifications and Skills: We believe Mr. Furman is qualified to serve on the Board due, in part, to his experience as a CEO and consultant to multiple companies, experience as a lawyer in private practice and for corporations, and experience with other public company boards of directors. | |
MICHAEL F. GOLDEN | |
Age: 68 Director Since: 2004 Independent Board Committees: • ESG Other public company boards: • Trex Company, Inc. Other public company boards within five years: • Quest Resource Holding Corporation | Background: Mr. Golden has served as our Vice Chairman since August 2020. He served as our President and CEO from 2004 to 2011. Mr. Golden served in various executive positions with the Kohler Company from 2002 to 2004, including as President of its Cabinetry Division. He served as President of Sales for the Industrial/Construction Group of the Stanley Works Company from 1999 until 2002; Vice President of Sales for Kohler’s North American Plumbing Group from 1996 until 1998; and Vice President — Sales and Marketing for a division of The Black & Decker Corporation where he was employed from 1981 until 1996. |
Key Qualifications and Skills: We believe Mr. Golden is qualified to serve on the Board due, in part, to his past service as our President and CEO, his intimate knowledge of and experience leading our Company, his long business career at major companies, and his experience with other public company boards of directors. |
4 I 2022 Proxy Statement |
Proposal One | |
BARRY M. MONHEIT | ||||
Age: 75 Director Since: 2004 Independent Board Committees: • NCG • Compensation Other public company boards: • American Outdoor Brands, Inc. Other public company boards within five years: • None | Background: Mr. Monheit served as Chairman of the Board | |||
We believe Mr. Monheit is qualified to serve on the Board due, in part, to his extensive experience in financial and operational consulting gained as an executive of major restructuring firms, executive experience with major and emerging companies, and experience with other public company boards of directors. | ||||
ROBERT L. | ||||
Age: 76 Director Since: 1999 Independent Board Committees: • Audit • NCG Other public company boards: • None Other public company boards within five years: • None |
Mr. Scott has served as our Chairman since August 2020. He also serves as Chairman of the | |||
We believe Mr. Scott is qualified to serve on the Board due, in part, to his past service as our President, his intimate knowledge of and experience leading our Company, and his extensive knowledge of our industry. |
2022 Proxy Statement I 5 |
Proposal One |
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Director Since: 2020 Not Independent Board Committees: • None Other public company boards: • None Other public company boards within five years: • None | Background: Mr. Smith has served as our President and CEO and as a director since August 2020. Since joining us in 2010, he has served in a number of roles with increasing responsibility, including Vice President of Supply Chain Management from 2010 to 2011, Vice President of Manufacturing and Supply Chain Management from 2011 to 2016, President, Manufacturing Services from 2016 to 2020, and Co-President and Co-Chief Executive Officer from January 2020 to August 2020. Prior to joining us, Mr. Smith served as Director | |||||
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Director Since: 2021 Independent Board Committees: • Audit • NCG Other public company boards: • Patrick Industries Other public company boards within five years: • None | Background: Mr. Suggs has served as CEO of LCP Transportation LLC, a non-emergency medical transportation provider, since 2020. From 2014 to 2020, he served as President and CEO of Strategic Materials, Inc., a provider of environmental services. Mr. Suggs previously served in executive capacities with Belden, Inc., Danaher Corporation, and Public Storage Inc. | |||||
We believe Mr. Suggs is qualified to serve on the Board due, in part, to his executive experience, including as CEO of multiple companies, managerial experience, and experience with other public company boards of directors. |
6 I 2022 Proxy Statement |
GOVERNANCE FRAMEWORK
Our business and affairs are managed under the direction of our board of directors (the “Board”), subject to limitations and other requirements in our charter documents or in applicable statutes, rules, and regulations, including those of the SEC and the Nasdaq Stock Market (“Nasdaq”).
Our governance framework supports independent oversight and accountability.
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Independent Oversight | Accountability | ||||
• 7 of 8 director nominees are independent • Non-Executive Chairman and Vice- Chairman • All independent committees • Demonstrated commitment to Board refreshment – half of the | • Majority voting in uncontested elections • Annual election of directors • Annual “say on pay” advisory vote • Robust over-boarding policy • Proxy access right |
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Barry M. Monheit has served
Our governance framework is based on our Amended and Restated Bylaws (our “Bylaws”), as well as the key governance documents listed below:
Code of Conduct and Ethics
Code of Ethics for CEO and Senior Financial Officers
Corporate Governance Guidelines (the “Guidelines”)
Charters of the Audit Committee, the Compensation Committee, Nominations and Corporate Governance Committee (the “NCG Committee”) and the ESG Committee
Copies of these documents are available on our website, www.smith-wesson.com, or upon written request sent to our Corporate Secretary at our principal executive offices located at 2100 Roosevelt Avenue, Springfield, Massachusetts 01104. The information on our website is not part of this Proxy Statement.
BOARD COMPOSITION
Director Nomination Process
The NCG Committee is responsible for identifying and evaluating Board nominees. In identifying candidates, the NCG Committee may take into account all factors it considers appropriate, which may include strength of character, mature judgment, career specialization, relevant technical skills, diversity, and the extent to which the candidate would fill a directorpresent need on the Board.
Stockholder-Recommended Candidates. The NCG Committee will consider persons recommended by our stockholders for inclusion as Board nominees if the information required by our Bylaws is submitted in writing in a timely manner addressed and delivered to our Secretary.
Stockholder-Nominated Candidates. We have a “Proxy Access for Director Nominations” bylaw that permits a stockholder, or a group of up to 20 stockholders, owning 3% or more of our company since February 2004. Mr. Monheit has been since December 2015 Vice Chairmanoutstanding common stock continuously for at least three years to nominate and include in our proxy materials Board nominees constituting up to two individuals or 20% of the Board (whichever is greater); provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in our Bylaws.
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Director Independence and Other Qualifications
Under the Guidelines and the Nasdaq listing standards, the Board must consist of That’s Eatertainment Corp. (formerly Modern Round Entertainment Corporation), a company formed to createmajority of independent directors. The Board annually reviews director independence and roll out nationally an entertainment concept centered around a virtual interactive shooting experience utilizing laser technology-based replica firearms and extensive food and beverage offerings, and was a principal of its predecessor, Modern Round LLC, from February 2014 until December 2015.has determined that all director nominees, except for Mr. Monheit served as theSmith (who is our President and Chief Executive OfficerCEO), are independent, as “independence” is defined by the SEC and the Nasdaq listing standards.
The NCG Committee is responsible for reviewing with the Board annually the requisite skills and characteristics required for new Board members, as well as Board composition. The assessment, which is made based on the perceived needs of Quest Resource Holding Corporation,the Board from time to time, may include, among others, consideration of the following:
diversity, age, background, skills, and business experience;
personal qualities and characteristics, individual character and integrity, accomplishments, and reputation in the business community;
knowledge and contacts in the communities in which we conduct business and in our business industry or other industries relevant to our business;
leadership ability and strategic planning skills, ability, and experience;
ability and willingness to devote sufficient time to serve on the Board and its committees;
knowledge and expertise in various activities deemed appropriate by the Board, such as marketing, production, distribution, technology, accounting, finance, and law; and
fit of the individual’s skills, background, education, qualifications, experience, and personality with those of other directors in maintaining an effective, collegial, and responsive Board and a mix of diversity in personal and professional experience, background, viewpoints, perspectives, knowledge, and abilities.
Diversity Considerations. The Board does not have a specific diversity policy; however, diversity is among a number of factors the NCG Committee may consider in connection with its annual review of requisite skills and characteristics required for new Board members. We have posted a board diversity matrix on our website, www.smith-wesson.com, to comply with a Nasdaq rule. The information on our website is not part of this Proxy Statement. Pursuant to our Guidelines, nominees are not to be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability, or any other basis proscribed in law. | Governance Spotlight Our eight director nominees include one woman, one racial minority, and one ethnic minority. Each of these director nominees has joined the Board since 2018. In addition, half of our executive officers are female. |
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Majority Voting Standard
Our directors are elected by a majority of the votes cast for them in uncontested elections. If an incumbent director does not receive the requisite majority of votes cast, then the director is expected to submit his or her resignation to the Board. Based on the recommendation of the NCG Committee, the Board would determine whether to accept the resignation and would publicly traded environmental solutions companydisclose its decision and its rationale. A director who tenders his or her offer of resignation would abstain from any decision or recommendation regarding the offered resignation.
Board Refreshment
We recognize the importance of Board refreshment. Directors are elected each year at the annual meeting of stockholders to hold office until the next annual meeting of stockholders and until their successors are elected and qualified. The NCG Committee regularly considers Board composition and how Board composition changes over time. | Governance Spotlight We have added four highly qualified directors in the past four years – accounting for half of the Board’s members. |
Ms. Britt and Mr. Smith joined the Board in 2018 and 2020, respectively, and Messrs. Diaz and Suggs joined the Board in 2021.
The Board has not established a mandatory retirement age. Pursuant to the Guidelines, the Board and the NCG Committee will review, in connection with the process of selecting nominees for election at annual stockholder meetings, each director’s continuation on the Board.
The Board has not established term limits because it believes that servesterm limits involve the disadvantage of losing the contribution of directors who have been able to develop, over a period of time, increasing insight into us and our operations and, therefore, provide an increasing contribution to the Board as a single-service providerwhole. However, the NCG Committee reviews each director’s continuation on the Board at least every three years, which, among other things, allows the Board, through the NCG Committee, to consider the appropriateness of recyclingthe director’s continued service.
Over-Boarding Policy
Our directors may not serve on more than three other public company boards, unless it is determined, based on the individual facts, that such service will not interfere with service on the Board. None of our director nominees serves on more than three other public company boards and environment-related programs, services,our CEO does not serve on any other public company board.
BOARD AND COMMITTEE GOVERNANCE
Risk Oversight
The Board recognizes that risk is inherent in every business. As is the case in virtually all businesses, the Board recognizes that we face a number of risks, including operational, economic, financial, legal, regulatory, and information, from June 2011 until July 2013 and servedcompetitive risks. While our management is responsible for the day-to-day management of the risks we face, the Board, as a directorwhole and through its committees, is responsible for the oversight of risk management.
The Board’s involvement in our business strategy and strategic plans plays a key role in its oversight of risk management, its assessment of management’s risk appetite, and its determination of the appropriate level of enterprise risk. The Board receives updates at least quarterly from senior management and periodically from outside advisors regarding the various risks we face, including operational, economic, financial, cybersecurity, legal, regulatory, and competitive risks. The Board also reviews the various risks we identify in our SEC filings, as well as risks relating to various specific developments, such as acquisitions, securities repurchases, and new product introductions. In addition, the Board regularly receives reports from senior members of our Internal Audit function and our General Counsel and Chief Compliance Officer.
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See Part I, “Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended April 30, 2022 (the “Form 10-K”) to learn more about the risks we face. The risks described in the Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known or that company or its predecessors from June 2011 until July 2019. Mr. Monheit served as amay currently be deemed to be immaterial based on the information known to us also may materially and adversely affect our business, operating results, and financial and operational consultant from April 2010 until June 2011. From May 2009 until April 2010, Mr. Monheit was a Senior Managing Director of FTI Palladium Partners, a financial consulting division of FTI Consulting, Inc., a New York Stock Exchange-listed global advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal,condition.
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• Oversees our financial and reporting processes and the audit of our financial statements • Assists the Board with respect to: - the oversight and integrity of our financial statements - our compliance with legal and regulatory matters - our policies and practices related to information security, including cybersecurity - the independent registered public accountant’s qualification and independence - the performance of the independent registered public accountant • Meets separately on a regular basis with representatives of our independent registered public accountant and our internal audit function | • Considers the risk that our compensation policies and practices may have in attracting, retaining, and motivating valued employees • Endeavors to assure that it is not reasonably likely that our compensation plans and policies would have a material adverse effect on us NCG COMMITTEE • Oversees governance-related risk, such as board independence, conflicts of interest, and management and succession planning ESG COMMITTEE • Reviews emerging risks associated with ESG matters |
Cybersecurity Risk Oversight. We recognize the importance of cybersecurity risk governance. The Audit Committee receives regular reports from management on, among other things, the emerging threat landscape and our cybersecurity risks and threats. The Audit Committee regularly briefs the full Board on these matters. We have adopted a Cyber Incident Response Plan.
ESG Risk Oversight. We recognize the importance to our stakeholders of ESG matters. In 2021, the Board formed the ESG Committee to assist the Board and its committees in fulfilling the Board’s oversight responsibilities with various environmental, social, health, safety, and governance policies and operational control matters relevant to us. In part, the ESG Committee reviews emerging risks and opportunities associated with ESG matters.
Board Leadership Structure
Our Corporate Governance Guidelines support flexibility in the structure of the Board by not requiring the separation of the roles of CEO and Chairman. We maintain separate roles between our CEO and Chairman in recognition of the differences between the responsibilities of these roles. The Board believes this leadership structure is the most effective for us at this time because it allows our CEO to focus on running our business and our Chairman to focus on pursuing sound governance practices that benefit the long-term interests of our stockholders.
regulatory, and economic environment. Mr. Monheit was a consultant focusing on financial and operational issues in the corporate restructuring field from January 2005 until May 2009. From July 1992 until January 2005, Mr. Monheit was associated in various capacities with FTI Consulting, Inc., serving as the President of its Financial Consulting Division from May 1999 through November 2001. Mr. Monheit was a partner with Arthur Andersen & Co. from August 1988 until July 1992, serving aspartner-in-charge of its New York Consulting Division andpartner-in-charge of its U.S. Bankruptcy and Reorganization Practice. We believe Mr. Monheit’s extensive experience in financial and operational consulting gained as an executive of major restructuring firms and his executive experience with major and emerging companies provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors.
Robert L. Scott has served as a director of our company since December 1999. Mr. Scott is the Chairman of the National Shooting Sports Foundation and a Governor of the Sporting Arms and Ammunition Institute. Mr. Scott served as a consultant to our company from May 2004 until February 2006; President of our company from December 1999 until September 2002; Chairman of our wholly owned subsidiary, Smith & Wesson Corp., from January 2003 through December 2003; and President of Smith & Wesson Corp. from May 2001 until December 2002. From December 1989 to December 1999, Mr. Scott served as Vice President of Sales and Marketing and later as Vice President of Business Development of Smith & Wesson Corp. prior to its acquisition by our company. Prior to joining Smith & Wesson Corp., Mr. Scott was employed for eight years in senior positions with Berkley & Company and Tasco Sales Inc., two leading companies in the outdoor industry. Mr. Scott previously served as a director and a member of the Compensation Committee of OPT Holdings, a private company marketing hunting accessories. We believe Mr. Scott’s prior extensive service with our company and his very extensive industry knowledge and expertise provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors.
P. James Debney has served as President and Chief Executive Officer of our company and as a member of our Board of Directors since September 2011. Mr. Debney was Vice President of our company from April 2010 until September 2011, and President of our firearm division from November 2009 until September 2011. Mr. Debney was President of Presto Products Company, formerly a business unit of Alcoa Consumer Products, a manufacturer of plastic products, from January 2007 until February 2009. He was Managing Director of Baco Consumer Products, a business unit of Alcoa Consumer Products, a manufacturer of U.K.-branded and private label foil, film, storage, food, and trash bag consumer products, from January 2006 until December 2006; Manufacturing and Supply Chain Director from August 2003 until December 2005; and Manufacturing Director from April 1998 until July 2003. Mr. Debney joined Baco Consumer Products in 1989 and held various management positions in operations, production, conversion, and materials. We believe Mr. Debney’s position as the President and Chief Executive Officer of our company and as the President of our firearm division, his intimate knowledge and experience with all aspects of the operations, opportunities, and challenges of our company, and his long business career at major companies provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors.
Anita D. Britt has served as a director of our company since February 2018. Ms. Britt served as Chief Financial Officer for Perry Ellis International, Inc., a publicly traded apparel company, from March 2009 until her retirement in March 2017. From August 2006 to February 2009, Ms. Britt served as Executive Vice President and Chief Financial Officer of Urban Brands, Inc., a privately held apparel company. From 1993 to 2006, Ms. Britt served in various positions, including that of Executive Vice President, Finance, for Jones Apparel Group, Inc., an apparel company. Ms. Britt has served as a member of the Board of Directors since 2018 and is a member of the Audit Committee and the
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Corporate Governance CommitteeBoard Committees
The Board has four standing committees, each of Delta Apparel, Inc., a New York Stock Exchange-listed designer, manufacturer, and marketerwhich is comprised of lifestyle basics and branded active wear apparel, headwear, and related accessory products. Ms. Britt previously served onindependent directors: the Board of Trustees and FinanceAudit Committee, of St. Thomas University from April 2013 to January 2018 and as its Chief Financial Officer from January 2018 to March 2018. Ms. Britt is a Certified Public Accountant and is a member of the American Institute of Certified Public Accountants, the Pennsylvania Institute of Certified Public Accounts, and the National Association of Corporate Directors. We believe Ms. Britt’s extensive financial leadership at a number of public and private companies and her extensive experience with consumer-oriented companies provide the requisite qualifications, skills, perspectives, and experience that make her well qualified to serve on our Board of Directors.
John B. Furman has served as a director of our company since April 2004. Since leaving the practice of law in August 1998, Mr. Furman has served as a consultant to or an executive of a number of companies, including serving as the chief executive officer of two public companies, with his focus being on restructurings, business transactions, capital formation, and product commercialization. From February 2009 until December 2009, Mr. Furman was the President and Chief Executive Officer of Infinity Resources LLC (now Quest Resource Holding Corporation), a privately held environmental solutions company that served as a single-source provider of recycling programs. Mr. Furman served as President and Chief Executive Officer of GameTech International, a publicly traded company involved in interactive bingo systems, from September 2004 until July 2005. Mr. Furman served as President and Chief Executive Officer and a director of Rural/Metro Corporation, a publicly traded provider of emergency and fire protection services, from August 1998 until January 2000. Mr. Furman was a senior member of the law firm of O’Connor, Cavanagh, Anderson, Killingsworth & Beshears, a professional association, from January 1983 until August 1998; he was Associate General Counsel of Waste Management, Inc., a New York Stock Exchange- listed provider of waste management services, from May 1977 until December 1983; and Vice President, Secretary, and General Counsel of the Warner Company, a New York Stock Exchange-listed company involved in industrial mineral extractions and processing, real estate development, and solid and chemical waste management, from November 1973 until April 1977. Mr. Furman previously served as a director and Chairman of the Compensation Committee, of MarineMax, Inc., a New York Stock Exchange-listed company that is the nation’s largest recreational boat dealer. We believe Mr. Furman’s experience as a chief executive officerNCG Committee, and a consultant to multiple companies, his experience as a lawyer in private practice and for corporations, and his experience as a public company director provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors.
Gregory J. Gluchowski, Jr. has served as a director of our company since June 2015. Mr. Gluchowski has since September 2015 served as the President and Chief Executive Officer of The Hillman Group, Inc., a leading provider of hardware solutions focused on industry leading sales and service. Prior to his role with Hillman, Mr. Gluchowski served for six years as President of the $1.2 billion Hardware and Home Improvement (HHI) division of Spectrum Brands Holdings, Inc. and a former division of Stanley Black and Decker. Mr. Gluchowski was Vice President, Global Operations of Black & Decker Corporation from October 2005 to December 2009; General Manager, Mexican Operations & Director North American Operations from March 2003 to September 2005; and General Manager, Kwikset Waynesboro Operation from January 2002 to June 2003. Prior to joining Black & Decker Corporation, Mr. Gluchowski served in various executive leadership positions with Phelps Dodge Corporation — Wire & Cable Group from 1988 to 2001, with his most recent position being Senior Vice President, Customer Satisfaction. Since July 2017, Mr. Gluchowski has served as a member of the Board of Directors of Milacron Holdings Corp., a New York Stock Exchange-listed industrial technology company serving the plastics processing industry. We believe Mr. Gluchowski’s extensive experience in consumer-focused, high-volume manufacturing companies and his executiveESG Committee.
leadership of global businesses with over 7,000 employees provides the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors.
Michael F. Golden has served as a director of our company since December 2004. Mr. Golden served as the President and Chief Executive Officer of our company from December 2004 until his retirement in September 2011. Mr. Golden served as Interim Chief Executive Officer of Quest Resource Holding Corporation, a publicly traded environmental solutions company that serves as a single source provider of recycling and environment-related programs, services and information, from October 2015 to February 2016. Mr. Golden has served on its board of directors since October 2012 and serves as Chairman of the Compensation Committee and a member of the Strategic Planning Committee. Mr. Golden was employed in various executive positions with the Kohler Company from February 2002 until joining our company, with his most recent position being the President of its Cabinetry Division. Mr. Golden was the President of Sales for the Industrial/Construction Group of the Stanley Works Company from 1999 until 2002; Vice President of Sales for Kohler’s North American Plumbing Group from 1996 until 1998; and Vice President — Sales and Marketing for a division of The Black & Decker Corporation where he was employed from 1981 until 1996. Since February 2013, Mr. Golden has served as a member of the board of directors of Trex Company, Inc., a New York Stock Exchange-listed manufacturer of high-performance wood-alternative decking and railing, and serves as a member of the Nominating/Corporate Governance Committee and Chairman of the Compensation Committee. We believe Mr. Golden’s service as the former President and Chief Executive Officer of our company, his intimate knowledge and experience with all aspects of the operations, opportunities, and challenges of our company, and his long business career at major companies provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors.
Mitchell A. Saltz has served as a director of our company since October 1998. Mr. Saltz has been since December 2015 Chairman of the Board of That’s Etertainment Corp. (formerly Modern Round Entertainment Corporation), a company formed to create and roll out nationally an entertainment concept centered around a virtual interactive shooting experience utilizing laser technology-based replica firearms and extensive food and beverage offerings, and was a principal of its predecessor, Modern Round LLC, from February 2014 until December 2015. Mr. Saltz has served as the Chairman and Managing Partner of Southwest Capital Partners, an investment banking firm, since 2009. Since 2016, Mr. Saltz has served as a member of the board of directors, a member of the Audit Committee, Chairman of the Compensation Committee, and a member of the Nominating and Corporate Governance Committee of VirTra, Inc., a developer and seller of judgmentaluse-of-force training simulators and firearms training simulators for law enforcement, military, and commercial uses. Mr. Saltz served as the Chairman of Quest Resource Holding Corporation, a publicly traded environmental solutions company that serves as a single service provider of recycling and environment-related programs, services, and information, or its predecessors from 2005 until April 2019. Mr. Saltz served as Chairman of the Board and Chief Executive Officer of our company from February 1998 through December 2003. Mr. Saltz foundedSaf-T-Hammer in 1997, which developed and marketed firearm safety and security products designed to prevent the unauthorized access to firearms, which acquired Smith & Wesson Corp. from Tomkins, PLC in May 2001 and changed its name to Smith & Wesson Holding Corporation. We believe Mr. Saltz’s history as a founder of our company, his service as a former officer of our company, and his financial, investment, and management experience provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors.
I. Marie Wadecki has served as a director of our company since September 2002. Ms. Wadecki served as the Corporate Budget Director of the McLaren Health Care Corporation, a
AUDIT COMMITTEE
Members: Anita Britt (Chair) John Furman Bob Scott Denis Suggs Meetings in Fiscal 2022: 4 Member Independence: 4 of 4 * All members meet the independence requirements of Nasdaq and Rule 10A-3 of the Exchange Act. The Board has determined that each member is an “audit committee financial expert” within the meaning of SEC regulations. | Purpose: • Overseeing our financial and reporting processes and the audits of our financial statements. • Providing assistance to the Board with respect to its oversight of: - the integrity of our financial statements - our compliance with legal and regulatory requirements - the independent auditor’s qualifications and independence - the performance of our internal audit function, if any, and independent auditor - our policies and practices related to information security, including cyber security, protection of personally identifiable information, and training of employees around such items • Preparing the report that SEC rules require be included in our annual proxy statement. Principal Responsibilities: • Appointing, retaining, compensating, evaluating, and terminating any accounting firm engaged to prepare or issue an audit report or performing other audit, review, or attest services, and overseeing the work of such firm. • Overseeing our accounting and financial reporting process and audits of our financial statements. | |||
COMPENSATION COMMITTEE Members: Barry Monheit (Chair) Anita Britt Fred Diaz John Furman Meetings in Fiscal 2022: 8 | Member Independence: 4 of 4 * All members meet the independence requirements of Nasdaq and qualify as “non-employee directors” under Rule 16b-3(b)(3)(i) of the Exchange Act. |
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• Determining, or recommending to the Board for determination, the compensation of our CEO and other executive officers.
• Discharging the Board’s responsibilities relating to our compensation programs and compensation of our executives.
• Producing an annual compensation committee report on executive compensation for inclusion in our annual proxy statement.
Principal Responsibilities:
• Setting compensation for executive officers and directors.
• Monitoring incentive- and equity-based compensation plans.
• Appointing, compensating, and overseeing the work of any compensation consultant, legal counsel, and other retained advisor.
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Michigan-based $3.5 billion eight-hospital health care system, from January 2001 until her retirement in September 2007. Ms. Wadecki was employed by McLaren for more than 30 years, holding positions of increasing responsibility. In November 2008, Ms. Wadecki was appointed to the McLaren Flint Medical Center’s Foundation Board of Trustees. Since October 2012, Ms. Wadecki has served as a member of the board of directors, a member of the Nominations and Corporate Governance Committee, a member of the Audit Committee, and previously served as the Chairperson of the Nominations and Corporate Governance Committee of Quest Resource Holding Corporation, a publicly traded environmental solutions company that serves as a single-service provider of recycling and environment-related programs, services, and information. Ms. Wadecki is a member of the National Association of Corporate Directors, the American College of Healthcare Executives, Women Business Leaders of the U.S. Healthcare Industry Foundation, and Women Corporate Directors. Ms. Wadecki is recognized as a Board Leadership Fellow by the National Association of Corporate Directors, which is an organization devoted to advancing exemplary board leadership by providing support and educational opportunities to directors and boards. We believe Ms. Wadecki’s long employment history with a major health care organization, her financial background, and her corporate governance expertise provide the requisite qualifications, skills, perspectives, and experience that make her well qualified to serve on our Board of Directors.
There are no family relationships among any of our directors and executive officers.
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NCG COMMITTEE Members: John Furman (Chair) Barry Monheit Bob Scott Denis Suggs Meetings in Fiscal 2022: 7 Member Independence: 4 of 4 * All members meet the independence requirements of Nasdaq. | Purpose: • Selecting, or recommending to the Board for selection, the individuals to stand for election as directors at each election of directors. • Overseeing the selection and composition of Board committees and, as applicable, overseeing management continuity planning processes. Principal Responsibilities: • Developing and recommending to the Board corporate governance principles applicable to us. • Overseeing the evaluation of the Board and management. | |
ESG COMMITTEE Members: Michael Golden (Chair) Anita Britt Fred Diaz Meetings in Fiscal 2022: 3 Member Independence: 3 of 3 | Purpose: • Assisting the Board and its committees in fulfilling the oversight responsibilities of the Board with various environmental, social, health, safety, and governance policies and operational control matters relevant to us. Principal Responsibilities: • Reviewing the status and effectiveness of our ESG performance, metrics, and goals. • Reviewing emerging risks and opportunities associated with ESG. • Assessing whether to adopt ESG goals, metrics, and targets, and adopting such goals, metrics, and targets, if deemed appropriate. |
Meeting Attendance in Fiscal 2022
In fiscal 2022, the Board held six meetings and its committees held a total of 22 meetings. Each director attended 75% or more of the aggregate of all meetings of the Board and the committees on which he or she served. We encourage our directors to attend our annual meetings of stockholders. All directors attended the 2021 Annual Meeting.
Executive Sessions
We regularly schedule executive sessions in which independent directors meet without the presence or participation of management. Our Chairman serves as the presiding director of these executive sessions during Board meetings, and our committee chairs preside at the sessions held during committee meetings.
Stockholder Engagement
We meet with investors throughout the year and consider investor feedback on emerging issues, which allows us to better understand their priorities and perspectives. This year-round engagement provides us with useful input and enables us to consider developments proactively. In addition, from time to time, we conduct stockholder outreach programs. Prior to the 2021 Annual Meeting, we requested meetings with the corporate governance teams at stockholders representing 32% of our outstanding shares, as a result of which we engaged with teams at stockholders representing 25% of our outstanding shares. We primarily discussed the stockholder proposal that was included in our proxy materials for the 2021 Annual Meeting. In March 2022 and July 2022, we requested meetings with the corporate governance teams at stockholders representing 29% and 27%, respectively, of our outstanding shares, as a result of which we engaged with teams at stockholders representing 14% and 10%, respectively, of our outstanding shares. These discussions included our CEO, CFO, and General Counsel, as well as the Chair of the ESG Committee and, on one occasion, our Chairman. Among the topics discussed were opportunities to improve our public disclosures related to topics of importance to our stakeholders, workforce diversity, and risk oversight.
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Environmental Factsheet. CORPORATE GOVERNANCEIn November 2021, we published our first Environmental Factsheet, which, among other things, highlighted our commitment to responsible environmental practices, described our approach to environmental management, and listed a number of environmental impact highlights.
Director IndependenceFirearm Market Factsheet. In June 2022, we published our first Firearm Market Factsheet, which was intended to increase transparency around our business practices by, among other things, describing our go-to-market approach to both domestic and international sales and highlighting our commitment to promoting responsible firearm ownership.
Our Board of Directors has determined, after considering allCopies of the relevant factsEnvironmental Factsheet and circumstances, that Anita D. Britt, Robert H. Brust, John B. Furman, Gregory J. Gluchowski, Jr., Michael F. Golden, Barry M. Monheit, Mitchell A. Saltz, Robert L. Scott, and I. Marie Wadeckithe Firearm Market Factsheet are independent directors, as “independence” is defined by the listing standards of the Nasdaq Stock Market, or Nasdaq, and by the SEC, because they have no relationship with us that would interfere with their exercise of independent judgment in carrying out their responsibilities as a director. P. James Debney is an employee director.
Committee Charters, Corporate Governance Guidelines, and Codes of Conduct and Ethics
Our Board of Directors has adopted charters for the Audit, Compensation, and Nominations and Corporate Governance Committees describing the authority and responsibilities delegated to each committee by our Board of Directors. Our Board of Directors has also adopted Corporate Governance Guidelines, a Code of Conduct, and a Code of Ethics for the CEO and Senior Financial Officers. We postavailable on our website, at www.aob.com, the charterswww.smith-wesson.com. The information on our website is not part of our Audit, Compensation, and Nominations and Corporate Governance Committees; our Corporate Governance Guidelines, Code of Conduct, and Code of Ethics for the CEO and Senior Financial Officers, and any amendments or waivers thereto; and any other corporate governance materials specified by SEC or Nasdaq regulations. These documents are also available in print to any stockholder requesting a copy in writing from our Secretary at the address of our executive offices set forth in this proxy statement.Proxy Statement.
Policy
In addition to engaging with our largest investors, we have devoted significant resources engaging with the proponent for Proposal #5. We spoke directly to the proponent on four separate occasions since the 2021 Annual Meeting: in December 2021, January 2022, April 2022, and July 2022. Each time, the discussions were conducted in a respectful manner and we came away with a better understanding of the proponent’s positions regarding gun control generally and the proposal specifically. | Governance Spotlight Since the 2021 Annual Meeting, we have spoken directly with the proponent for Proposal #5 four times in order to better understand the proponent’s views and objectives. |
ADDITIONAL GOVERNANCE MATTERS
Corporate Political Contributions and Expenditures
In 2014, our Board of Directors adoptedWe have a Policy on Corporate Political Contributions and Expenditures which is postedpolicy to post on our website atwww.aob.com.In accordance with this policy, for each fiscal year beginning in 2015, we have posted on our website during the applicable fiscal year an annual report disclosing all political contributions or expenditures in the United States that are not deductible as “ordinary and necessary” business expenses under Section 162(e) of the Internal Revenue Code in excess of $50,000.Non-deductible amounts generally include contributions to or expenditures in support of or opposition to political candidates, political parties, or political committees.
Executive Sessions
We regularly schedule executive sessions in which independent directors meet without the presence or participation of management. The Chairman of our Board of Directors serves as the presiding director of such executive sessions.
Board Committees
Our bylaws authorize our Board of Directors to appoint from among its members one or more committees consisting of one or more directors. Our Board of Directors has established an Audit Committee, a Compensation Committee, and a Nominations and Corporate Governance Committee, each consisting entirely of independent directors as “independence” is defined by the listing standards of Nasdaq and by the SEC.
The Audit Committee
The purpose of the Audit Committee includes overseeing the financial and reporting processes of our company and the audits of the financial statements of our company and providing assistance to
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our Board of Directors with respect to its oversight of the integrity of the financial statements of our company, our company’s compliance with legal and regulatory matters, the independent registered public accountant’s qualifications and independence, and the performance of our company’s independent registered public accountant. The primary responsibilities of the Audit Committee are set forth in its charter and include various matters with respect to the oversight of our company’s accounting and financial reporting process and audits of the financial statements of our company on behalf of our Board of Directors. The Audit Committee also selects the independent registered public accountant to conduct the annual audit of the financial statements of our company; reviews the proposed scope of such audit; reviews accounting and financial controls of our company with the independent registered public accountant and our financial accounting staff; and reviews and approves any transactions between us and our directors, officers, and their affiliates, also referred to as related-person transactions.
The Audit Committee currently consists of Messrs. Brust and Furman and Mses. Britt and Wadecki. Our Board of Directors has determined that each of Messrs. Brust and Furman and Mses. Britt and Wadecki, whose backgrounds are described above, qualifies as an “audit committee financial expert” in accordance with applicable rules and regulations of the SEC. Mr. Brust chairs the Audit Committee.
The Compensation Committee
The purpose of the Compensation Committee includes determining, or, when appropriate, recommending to our Board of Directors for determination, the compensation of the Chief Executive Officer and other executive officers of our company and discharging the responsibilities of our Board of Directors relating to compensation programs of our company. The Compensation Committee currently makes all decisions with respect to executive compensation. The Compensation Committee currently consists of Messrs. Furman, Gluchowski, and Monheit and Ms. Wadecki. Mr. Furman chairs the Compensation Committee.
The Nominations and Corporate Governance Committee
The purpose of the Nominations and Corporate Governance Committee includes the selection or recommendation to our Board of Directors of nominees to stand for election as directors at each election of directors, the oversight of the selection and composition of committees of our Board of Directors, the oversight of the evaluations of our Board of Directors and management, and the development and recommendation to our Board of Directors of corporate governance principles applicable to our company. The Nominations and Corporate Governance Committee currently consists of Messrs. Gluchowski, Monheit, and Scott and Ms. Wadecki. Ms. Wadecki chairs the Nominations and Corporate Governance Committee.
The Nominations and Corporate Governance Committee will consider persons recommended by stockholders for inclusion as nominees for election to our Board of Directors if the information required by our bylaws is submitted in writing in a timely manner addressed and delivered to our Secretary at the address of our executive offices set forth in this proxy statement. The Nominations and Corporate Governance Committee identifies and evaluates nominees for our Board of Directors, including nominees recommended by stockholders, based on numerous factors it considers appropriate, some of which may include strength of character, mature judgment, career specialization, relevant technical skills, diversity, and the extent to which the nominee would fill a present need on our Board of Directors.
Risk Assessment of Compensation Policies and Practices
We have assessed the compensation policies and practices with respect to our employees, including our executive officers, and have concluded that they do not create risks that are reasonably likely to have a material adverse effect on our company.
Board’s Role in Risk Oversight
Risk is inherent in every business. As is the case in virtually all businesses, we face a number of risks, including operational, economic, financial, legal, regulatory, and competitive risks. Our management is responsible for theday-to-day management of the risks we face. Our Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management.
In its oversight role, our Board of Directors’ involvement in our business strategy and strategic plans plays a key role in its oversight of risk management, its assessment of management’s risk appetite, and its determination of the appropriate level of enterprise risk. Our Board of Directors receives updates at least quarterly from senior management and periodically from outside advisors regarding the various risks we face, including operational, economic, financial, legal, regulatory, and competitive risks. Our Board of Directors also reviews the various risks we identify in our filings with the SEC as well as risks relating to various specific developments, such as acquisitions, securities repurchases, debt and equity placements, and product introductions. In addition, our Board of Directors regularly receives reports from our Vice President, Internal Audit, our General Counsel, and our Chief Compliance Officer.
Our board committees assist our Board of Directors in fulfilling its oversight role in certain areas of risk. Pursuant to its charter, the Audit Committee oversees the financial and reporting processes of our company and the audit of the financial statements of our company and provides assistance to our Board of Directors with respect to the oversight and integrity of the financial statements of our company, our company’s compliance with legal and regulatory matters, the independent registered public accountant’s qualification and independence, and the performance of our independent registered public accountant. The Compensation Committee considers the risk that our compensation policies and practices may have in attracting, retaining, and motivating valued employees and endeavors to assure that it is not reasonably likely that our compensation plans and policies would have a material adverse effect on our company. Our Nominations and Corporate Governance Committee oversees governance related risk, such as board independence, conflicts of interest of members of the Board of Directors and executive officers, and management and succession planning.
Board Diversity
We seek diversity in experience, viewpoint, education, skill, and other individual qualities and attributes to be represented on our Board of Directors. We believe directors should have various qualifications, including individual character and integrity; business experience; leadership ability; strategic planning skills, ability, and experience; requisite knowledge of our industry and finance, accounting, and legal matters; communications and interpersonal skills; and the ability and willingness to devote time to our company. We also believe the skill sets, backgrounds, and qualifications of our directors, taken as a whole, should provide a significant mix of diversity in personal and professional experience, background, viewpoints, perspectives, knowledge, and abilities. Nominees are not to be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability, or any other basis proscribed by law. The assessment of prospective directors is made in the context of the perceived needs of our Board of Directors from time to time.
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All of our directors have held senior-level positions in business or professional service firms and have experience in dealing with complex issues. We believe that all of our directors are individuals of high character and integrity, are able to work well with others, and have committed to devote sufficient time to the business and affairs of our company. In addition to these attributes, the description of each director’s background set forth above indicates the specific qualifications, skills, perspectives, and experience necessary to conclude that each individual should continue to serve as a director of our company.
Board Leadership Structure
We believe that effective board leadership structure can depend on the experience, skills, and personal interaction between persons in leadership roles as well as the needs of our company at any point in time. Our Corporate Governance Guidelines support flexibility in the structure of our Board of Directors by not requiring the separation of the roles of Chief Executive Officer and Chairman of the Board.
We currently maintain separate roles between the Chief Executive Officer and Chairman of the Board in recognition of the differences between the two responsibilities. Our Chief Executive Officer is responsible for setting our strategic direction andday-to-day leadership and performance of our company. The Chairman of the Board provides input to the Chief Executive Officer, sets the agenda for board meetings, and presides over meetings of the full Board of Directors as well as executive sessions of the Board of Directors.
Director and Officer Derivative Trading and Hedging
We have a policy prohibiting our directors and officers, including our executive officers, and any family member residing in the same household, from engaging in derivatives trading and hedging involving our securities or pledging or margining our common stock.
Stock Ownership Guidelines
During fiscal 2014, we adopted enhanced stock ownership guidelines for ournon-employee directors and executive officers. Ournon-employee directors and executive officers are required to own shares of our common stock or share equivalents with a value equal to at least the lesser of the following:
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Each individual has five years from the later of the date of adoption of these guidelines or the date of appointment of the individual as a director or an executive officer to achieve the required ownership levels. We believe that these guidelines promote the alignment of the long-term interests of our executive officers and members of our Board of Directors with our stockholders.
Stock ownership generally includes the shares directly owned by the individual (including any shares over which the individual has sole ownership, voting, or investment power); the number of shares owned by the individual’s minor children and spouse and by other related individuals and
entities over whose shares the individual has custody, voting control, or power of disposition; shares underlying RSUs that have vested and are deliverable or will be vested and deliverable within 60 days; shares underlying PSUs that have vested but are not deliverable within 60 days if the performance requirements have been satisfied; shares underlying stock options that have vested or will vest within 60 days; and shares held in trust for the benefit of the individual or the individual’s immediate family members.
If an individual achieves the required ownership level on the first day of any fiscal year, the value of the individual’s stock ownership on that date will be converted into a number of shares to be maintained in the future by dividing the value of such stock ownership by the price of our common stock on the prior day, which is the last day of the preceding fiscal year.
The failure to satisfy the required ownership level may result in the ineligibility of the individual to receive stock-based compensation in the case of an executive officer or director or the inability to be a nominee for election to the Board of Directors in the case of a director.
ClawbackWhistleblower Policy
We maintain a compensation recovery, or clawback, policy. In the event we are required to prepare an accounting restatement of our financial results as a result of a material noncompliance by us with any financial reporting requirement under the federal securities laws, we will have the right to use reasonable efforts to recover from any current or former executive officers who received incentive compensation (whether cash or equity) from us during the three-year period preceding the date on which we were required to prepare the accounting restatement, any excess incentive compensation awarded as a result of the misstatement. This policy is administered by the Compensation Committee of our Board of Directors. Once final rules are adopted by the SEC regarding clawback requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, we will review this policy and make any amendments necessary to comply with the new rules.
Compensation Committee Interlocks and Insider Participation
During our fiscal year ended April 30, 2019, Messrs. Furman, Gluchowski, and Monheit and Ms. Wadecki served on the Compensation Committee. None of these individuals had any material contractual or other relationships with us during such fiscal year except as directors. During our fiscal year ended April 30, 2019, none of our executive officers served on the compensation committee or board of directors of any entity whose executive officers serve as a member of our Board of Directors or Compensation Committee.
Board and Committee Meetings
Our Board of Directors held a total of five meetings during the fiscal year ended April 30, 2019. During the fiscal year ended April 30, 2019, the Audit Committee held five meetings; the Compensation Committee held 10 meetings; and the Nominations and Corporate Governance Committee held six meetings. No director attended fewer than 75% of the aggregate of (i) the total number of meetings of our Board of Directors, and (ii) the total number of meetings held by all committees of our Board of Directors on which he or she was a member.
Annual Meeting Attendance
We encourage each of our directors to attend each annual meeting of stockholders. To that end, and to the extent reasonably practicable, we regularly schedule a meeting of our Board of Directors on the same day as our annual meeting of stockholders. All of our then current directors attended our 2018 Annual Meeting of Stockholders.
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Majority Voting for Directors
We have a director resignation policy covering the policies and procedures for (i) the receipt, retention, and treatment of complaints that provides that any incumbent director who does notwe receive regarding accounting, internal controls, or auditing matters; and (ii) the requisite majorityconfidential, anonymous submission by our employees of votes castconcerns regarding questionable accounting or auditing matters.
Corporate Stewardship Policy
We have a policy, pursuant to which, in an uncontested election is expected to submit his or her offer of resignation to our Board of Directors. For more detailed information regarding this policy see “Voting and Other Matters — BrokerNon-Votes and Abstentions.”
Proxy Access
In April 2019, we amended our Amended and Restated Bylaws to implement “proxy access,” a means for our stockholders to include stockholder-nominated director candidates in our proxy materials for annual meetings of stockholders. A stockholder, or group of not more than 20 stockholders, that meet specific eligibility requirements are generally permitted to nominate the greater of (i) two director nominees or (ii) 20% of the total number of directors in office at the deadline for proxy access nominations. In order to be eligible to use the proxy access process, an eligible stockholder must,meet our objective of being a good corporate steward, we will consider, among other requirements, have owned 3% or more ofthings, our outstanding common stock continuously for at least three years. Use ofresponsibilities with respect to employee, safety, and governance risks, including the proxy access process to submit stockholder nominees is subject to additional eligibility, procedural, and disclosure requirements as set forth in our Amended and Restated Bylaws.
Investor Engagement
Our relationship with our stockholders is an important part of our corporate governance commitment. We meet with a broad base of investors throughout the year to discuss strategy and other important matters. We consider investor feedback and emerging issues allowing us to better understand our stockholders’ priorities and perspectives. This year-round engagement process provides us with useful input concerning our corporate strategy and enables us to consider developments proactively and to act responsibly. During the solicitation for the 2018 Annual Meeting of Stockholders, we reached out to stockholders holding approximately 58% of our outstanding shares and had discussions with stockholders holding approximately 35% of our outstanding shares. During our offseason outreach, we reached out on two separate occasions to stockholders holding approximately 22% of our outstanding shares and met with stockholders representing approximately 21% of our outstanding shares regarding the stockholder proposal approved at our 2018 Annual Meeting of Stockholders, the report issued by us in response to the stockholder proposal entitled “Shareholder Requested Report on Product Safety Measures and Monitoring of Industry Trends,” or the Report, and other important matters.
The Report, issued in February 2019, which was prepared and posted on our website within the time frame requested in the stockholder proposal, responded fully to the issues raised in the stockholder resolution submittedrisks caused by the Sistersunlawful or improper use of firearms.
Communicating with the Holy Names of Jesus and Mary, U.S.-Ontario, addressing the issue ofgun-related violence, or the Resolution, was prepared in good faith after extensive engagement with many of our stockholders, and addressed in detail the three components of the Resolution, including an ongoing media monitoring program designed to address in the future the issues raised by the Resolution. For these reasons, we believe the Report fulfilled our responsibilities to our stockholders. For a more detailed discussion of the Report and our stockholder engagement activities, see Appendix A.Board
Communications with Directors
Interested partiesYou may communicate with ourthe Board of Directors or specific members of our Board of Directors,directors, including our independent directors and the members of our various board committees, by submitting a letter addressed to the Board of Directors of American OutdoorSmith & Wesson Brands, Corporation,Inc., c/o any specified individual director or directors, at our principal executive offices.
2022 Proxy Statement I 13 |
Board and Governance Matters | |
Clawback Policy
We maintain a compensation recovery, or clawback policy. See “Compensation Matters – Compensation Discussion and Analysis – Administration – Clawback Policy” for more information.
Certain Relationships
Unless delegated to the addressCompensation Committee by the Board, the Audit Committee charter requires the Audit Committee to review and approve all related party transactions and to review and make recommendations to the full Board, or approve, any contracts or other transactions with any of our current or former executive offices set forthofficers, including consulting arrangements, employment agreements, change-in-control agreements, termination arrangements, and loans to employees made or guaranteed by us. We have a policy that we will not enter into any such transaction unless the transaction is determined by our disinterested directors to be fair to us or is approved by our disinterested directors or by our stockholders. Any determination by our disinterested directors is based on a review of the particular transaction, applicable laws and regulations, our policies, and the Nasdaq listing standards. As appropriate, the disinterested directors of the applicable committees of the Board will consult with our legal counsel or internal auditor. There was no transaction during fiscal 2022, and there are no currently proposed transactions, in this proxy statement. Anywhich we were or are to be a participant in which an executive officer, director, director nominee, a beneficial owner of 5% or more of our common stock, or any immediate family members of such letters are sentpersons had or will have a direct material interest.
We have entered into indemnification agreements with each of our directors and executive officers that require us to indemnify such individuals, to the indicatedfullest extent permitted by Nevada law, for certain liabilities to which they may become subject as a result of their affiliation with us.
DIRECTOR COMPENSATION
The Compensation Committee, with advice from its independent compensation consultant, determines, or recommends to the Board for determination, the compensation of our directors. We pay each non-employee director an annual retainer in the amount of $70,000. We also pay additional sums to our Chairman, Vice Chairman, Chairs of our committees, and members of our committees as follows:
Chairman |
| $ | 62,500 |
| (1) |
Vice Chairman |
| $ | 23,000 |
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Chair, Audit Committee |
| $ | 25,000 |
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Chair, Compensation Committee |
| $ | 25,000 |
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Chair, NCG Committee |
| $ | 25,000 |
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Chair, ESG Committee |
| $ | 25,000 |
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Non-Chair Audit Committee Members |
| $ | 8,000 |
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Non-Chair Compensation Committee Members |
| $ | 5,000 |
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Non-Chair NCG Committee Members |
| $ | 5,000 |
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Non-Chair ESG Committee Members |
| $ | 5,000 |
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(1) | Effective October 1, 2021, the fee for the Chairman was increased from $55,000 to $62,500. |
In addition, each member of the Audit Committee receives an additional $1,500 per Audit Committee meeting attended in excess of seven meetings per year; each member of the Compensation Committee receives an additional $1,500 per Compensation Committee meeting attended in excess of six meetings per year; each member of the NCG Committee receives an additional $1,500 per NCG Committee meeting attended in excess of four meetings per year; and each member of the ESG Committee receives an additional $1,500 per ESG Committee meeting attended in excess of four meetings per year. We also reimburse each director for travel and related expenses incurred in connection with attending Board and committee meetings. Employees who also serve as directors receive no additional compensation for their services as a director.
14 I 2022 Proxy Statement |
Board and Governance Matters | |
Each non-employee director receives a stock-based grant to acquire shares of our common stock on the date of his or her first appointment or election to the Board. Each non-employee director also receives a stock-based grant at the meeting of the Board held immediately following our annual meeting of stockholders for that year. Stock-based grants were in the form of restricted stock units (“RSUs”) for 4,570 shares of common stock in fiscal 2022. Mssrs. Diaz and Suggs each received 5,356 shares of common stock in fiscal 2022 upon joining the Board. The RSUs vest one-twelfth each month.
The following table sets forth the compensation paid by us to each non-employee director for fiscal 2022. Mr. Smith did not receive any compensation for service on the Board.
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Name (1) |
| Cash (2) |
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| Awards (3) |
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| Compensation |
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| Total |
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Anita D. Britt |
| $ | 104,167 |
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| $ | 99,992 |
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| $ | 2,895 |
| (6) |
| $ | 207,054 |
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Fred M. Diaz |
| $ | 78,333 |
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| $ | 199,988 |
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| $ | 10,442 |
| (6) |
| $ | 288,763 |
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John B. Furman |
| $ | 118,500 |
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| $ | 99,992 |
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| $ | — |
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| $ | 218,492 |
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Michael F. Golden |
| $ | 113,833 |
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| $ | 99,992 |
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| $ | — |
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| $ | 213,825 |
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Barry M. Monheit |
| $ | 110,500 |
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| $ | 99,992 |
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| $ | 884 |
| (4) |
| $ | 211,376 |
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Robert L. Scott |
| $ | 152,875 |
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| $ | 99,992 |
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| $ | 11,410 |
| (5) |
| $ | 264,277 |
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Mark P. Smith |
| $ | — |
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| $ | — |
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| $ | — |
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| $ | — |
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Denis G. Suggs |
| $ | 80,833 |
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| $ | 199,988 |
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| $ | 3,189 |
| (4) |
| $ | 284,010 |
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(1) | As of April 30, 2022, each of the non-employee directors had the following number of stock awards outstanding, which represent undelivered shares underlying vested RSUs: Mr. Monheit 5,665; Mr. Scott 5,665; Ms. Britt 2,665; Mr. Furman 2,665; Mr. Golden 2,665; Mr. Diaz 7,574; and Mr. Suggs 7,574. As of April 30, 2022, there were no stock options outstanding for the directors. |
(2) | All fees were paid in cash. |
(3) | The amounts shown in this column represent the grant date fair value for stock awards granted to the directors calculated in accordance with Accounting Standards Codification (“ASC”) Topic 718. The assumptions used in determining the grant date fair value of these awards are set forth in Note 13 to our consolidated financial statements, which are included in the Form 10-K. |
(4) | Consists of costs for certain products provided without cost. |
(5) | Consists of reimbursement of medical coverage costs. |
(6) | Consists of costs for certain products provided without cost and spousal travel. |
We maintain stock ownership guidelines for our directors and executive officers. See “Compensation Matters — Administration — Stock Ownership and Retention Requirements.”
2022 Proxy Statement I 15 |
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What am I voting on? The Board is asking our stockholders to approve, on an advisory basis, the compensation of our named executive officers (“NEOs”) as disclosed in this Proxy Statement Voting Recommendation: FORthe proposal Vote Required: The affirmative vote of a majority of the votes cast is required to approve the proposal Broker Discretionary Voting Allowed? No – broker non-votes have no effect Abstentions: No effect |
Pursuant to SEC rules, our stockholders are being asked to approve, on an advisory basis, the compensation of our NEOs as disclosed in this Proxy Statement. We have received high levels of support from our stockholders on advisory votes to approve executive compensation.
Recent Support for Say-on-Pay Proposal | |
2020: 93% | 2021: 97% |
As described in the Compensation Discussion and Analysis section, we believe our compensation policies and procedures are competitive, focused on pay-for-performance principles, and aligned with the long-term interests of our stockholders. Our executive compensation philosophy is to pay base salaries to our executive officers at levels that, in the context of unfavorable industry factors beyond the control of management, enable us to attract, motivate, and retain highly qualified executives. Our executive compensation program is designed to link annual performance-based cash incentive compensation to the achievement of pre-established performance objectives, based primarily on our financial results and achievement of other corporate goals.
We believe our executive compensation program is designed appropriately and is working to ensure that management’s interests are aligned with our stockholders’ interests to support long-term value creation.
The advisory vote on this resolution is not intended to address any specific element of compensation; rather, it relates to the overall compensation of our NEOs, as well as the compensation philosophy, policies, and practices described in this Proxy Statement. Our stockholders may vote for or against, or to abstain from voting on, the following resolution:
RESOLVED, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis, executive compensation tables, and narrative discussion set forth in this Proxy Statement.
This advisory vote will not be binding on the Board. The Compensation Committee will, however, take the outcome of the vote into account when considering future executive compensation decisions. We provide our stockholders with this advisory vote on an annual basis and expect that the next such vote will occur at the 2023 Annual Meeting.
16 I 2022 Proxy Statement |
Compensation Matters | |
What am I voting on? The Board is asking our stockholders to approve the Smith & Wesson Brands, Inc. 2022 Incentive Stock Plan | ||||
Voting Recommendation: FORthe proposal | ||||
Vote Required: The affirmative vote of a majority of the votes cast is required to approve the proposal Broker Discretionary Voting Allowed? No – broker non-votes have no effect Abstentions: No effect |
The Board is asking our stockholders to approve the Smith & Wesson Brands, Inc. 2022 Incentive Stock Plan (the “2022 LTI Plan”). The Board believes the 2022 LTI Plan will advance our long-term success by encouraging stock ownership among award recipients and further aligning the interests of award recipients with those of our stockholders.
BACKGROUND
Our stockholders previously approved the Smith & Wesson Holding Corporation 2013 Incentive Stock Plan (the “2013 LTI Plan”). On July 12, 2022, the Board adopted the 2022 LTI Plan, subject to stockholder approval. The 2022 LTI Plan is intended to be used to make future awards that were previously made under the 2013 LTI Plan, modernize our incentive award grant practices, and set forth the principles our stockholders expect us to adhere to in designing and administering compensation programs.
If approved, the 2022 LTI Plan will become effective upon stockholder approval. No further awards will be made under the 2013 LTI Plan after the 2022 LTI Plan’s effective date. If our stockholders do not approve the 2022 LTI Plan, the 2013 LTI Plan will continue in its current state. However, the 2013 LTI Plan will expire in 2023, and we will lose a key tool we use to hire, retain, and motivate high-quality personnel.
Our recent annual use of equity has been well below industry guidelines published by ISS. From fiscal 2020 through fiscal 2022, our average gross burn rate (awards granted divided by shares outstanding) was approximately 1% per year. We are requesting an additional 1,000,000 shares be added under the 2022 LTI Plan, representing incremental potential dilution of 2.1% over the 10-year duration of the 2022 LTI Plan.
KEY FEATURES
Awards subject to maximum limits. The 2022 LTI Plan provides maximum limits on the number of shares of common stock subject to awards that can be granted to any employee or director during any fiscal year under the 2022 LTI Plan.
No payouts of dividends until underlying award vests. The 2022 LTI Plan prohibits the payout of dividends with respect to shares of common stock subject to any awards granted thereunder prior to the vesting (and delivery) of the underlying award.
Awards subject to clawback. Awards under the 2022 LTI Plan will be subject to recoupment under certain circumstances.
Double-trigger vesting upon a change in control. Subject to the applicable award agreement, if awards granted under the 2022 LTI Plan are assumed by an acquirer in connection with a change in control, they will not automatically vest or pay out solely on consummation of the change in control.
No repricing of options or stock appreciation rights (“SARs”). Stockholder approval will be required to reprice options or SARs with an exercise price that is less than the original exercise price.
No discount options or SARs. The 2022 LTI Plan prohibits the grant of options or SARs with an exercise price that is less than fair market value of a share of common stock as of the grant date.
2022 Proxy Statement I 17 |
Compensation Matters | |
POTENTIAL COMPENSATION SHARE NEEDS
In considering the appropriate number of shares of common stock to request under the 2022 LTI Plan, we reviewed our historical grant practices, our anticipated share needs with respect to future awards, our expectations for business growth, and our desire to have sufficient shares to make grants to prospective and current employees and non-employee directors for the next several years. We also considered equity overhang (the percentage of shares of our common stock subject to stock-based compensation grants, which was approximately 2.6% at April 30, 2022), our historical gross burn rate (awards granted divided by shares outstanding, which was approximately 1% for each year during the past three fiscal years), and our desire to limit the dilutive impact to our stockholders.
The table below shows the total potential equity awards that may be made under the 2022 LTI Plan, together with outstanding unvested awards.
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| Share Allocation and Potential Dilution | |
Common Stock outstanding as of record date |
| 45,763,388 |
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Maximum requested shares under the 2022 LTI Plan |
| 1,000,000 |
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Shares available for future grants under the 2013 LTI Plan as of April 30, 2022 |
| 3,969,345 |
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Number of full value awards outstanding (RS/RSU/PSU) |
| 628,790 | (1) |
Number of appreciation awards outstanding (Options/SARs) |
| — |
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The weighted average exercise price on outstanding appreciation awards |
| — |
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The weighted average term to expiration on outstanding appreciation awards |
| — |
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Total potential dilution |
| 5,598,135 |
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| 12.2 | % |
(1) | Includes PSUs at target. |
SUMMARY OF 2022 LTI PLAN
The 2022 LTI Plan was adopted by the Board on July 12, 2022. The following summary of the 2022 LTI Plan is qualified in its entirety by reference to the full text of the 2022 LTI Plan. See Appendix A.
Administration and Eligibility
The 2022 LTI Plan is to be administered by the Compensation Committee. The Compensation Committee is authorized to select eligible persons to receive awards, grant awards, determine the type, number, and other terms and conditions of, and all other matters relating to, awards, prescribe award agreements, and the rules and regulations for the administration of the 2022 LTI Plan, construe and interpret the 2022 LTI Plan and award agreements, correct defects, supply omissions, or reconcile inconsistencies therein, and make all other decisions and determinations as the Compensation Committee may deem necessary or advisable for the administration of the 2022 LTI Plan. The Committee may delegate the performance of certain functions under the 2022 LTI Plan to members of the Board, our officers, or managers, among others.
As of the record date, approximately 170 officers, directors, employees, and consultants were eligible to participate in the 2022 LTI Plan.
18 I 2022 Proxy Statement |
Compensation Matters | |
Award Types
Under the 2022 LTI Plan, the Compensation Committee may grant:
stock options, including incentive stock options intended to qualify for special tax treatment under Section 422 of the Tax Code, as well as nonqualified stock options,
SARs, in tandem with stock options or freestanding,
stock, which could or could not be subject to issuance or forfeiture conditions,
stock units, which could or could not be subject to forfeiture conditions, and
cash bonus incentives.
The Compensation Committee is authorized to grant (i) shares of common stock as a bonus free of restrictions, or to grant shares of common stock or other awards authorized under the 2022 LTI Plan in lieu of our obligations to pay cash under the 2022 LTI Plan or other plans or compensatory arrangements and (ii) awards that are denominated or payable in, valued by reference to, or otherwise based on or related to shares of common stock. The Compensation Committee determines the terms and conditions of such awards.
Shares Available for Issuance
The number of shares of common stock available for issuance under the 2022 LTI Plan on or after its effective date is 1,000,000 shares, plus any shares that are reserved and remain available for grant and delivery under the 2013 LTI Plan as of the date the 2022 LTI Plan is effective. Any shares that are subject to an award under the 2022 LTI Plan will be counted against this limit as one share for every one share granted.
If any shares subject to (i) any award under the 2022 LTI Plan, or after the effective date of the 2022 LTI Plan, shares subject to any awards granted under the 2013 LTI Plan, are forfeited, expire, or otherwise terminate without issuance of such shares, or (ii) any award under the 2022 LTI Plan, or after the effective date of the 2022 LTI Plan, shares subject to any award granted under the 2013 LTI Plan, that could have been settled with shares is settled for cash or otherwise does not result in the issuance of all or a portion of the shares, the shares to which those awards were subject, will, to the extent of such forfeiture, expiration, termination, cash settlement, or non-issuance, again be available for delivery with respect to awards under the 2022 LTI Plan. Any share that again becomes available for delivery pursuant to the provisions described above will be added back as one share.
To the extent any shares subject to an award are tendered and/or withheld in settlement of any exercise price and/or any tax withholding obligation associated with that award, those shares will not be available again for grant under the 2022 LTI Plan.
In the event of any merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, dividend in kind, or other like change in capital structure or distribution to our stockholders in the nature of a liquidating distribution or a distribution pursuant to a plan of dissolution, the Compensation Committee may make a proportionate adjustment to each outstanding award that the Compensation Committee considers appropriate, and the Compensation Committee has the authority to adjust: (i) the number and kind of securities that may be received in respect of any award under the 2022 LTI Plan; (ii) the number and kind of securities subject to outstanding awards; (iii) the exercise price of outstanding options; and (iv) the fair market value of the common stock and other value determinations applicable to outstanding awards, in each case in a manner that reflects equitably the effects of such event or transaction.
Outstanding awards granted under the 2013 LTI Plan will continue to be governed by the terms of the 2013 LTI Plan, but no awards may be made under the 2013 LTI Plan after the effective date of the 2022 LTI Plan. Regardless of whether the 2022 LTI Plan is approved, we will retain the ability to grant awards under the 2013 LTI Plan until it has expired in accordance with its terms.
2022 Proxy Statement I 19 |
Compensation Matters | |
Award Limits
The 2022 LTI Plan includes the following award limits:
in any fiscal year, no participant may be granted (i) stock options and/or SARs with respect to more than 500,000 shares of common stock or (ii) restricted stock and/or other stock-based awards, that may be settled by the issuance of more than 500,000 shares of common stock, in each case, subject to adjustment in certain circumstances.
the aggregate fair market value of our common stock on the date of grant underlying incentive stock options that can be exercisable by any individual for the first time during any year cannot exceed $100,000 (or such other amount as specified in Section 422 of the Code) – any excess will be treated as a non-qualified stock option;
the maximum number of shares that may be delivered under the 2022 LTI Plan as a result of the exercise of incentive stock options is 1,000,000 shares, subject to certain adjustments; and
the aggregate grant date fair value of all awards granted to any continuing outside director during any fiscal year will not exceed $500,000.
The closing price of our common stock on Nasdaq on July 25, 2022 was $13.84 per share.
Other Terms of Awards
Awards may be settled in the form of cash, shares of common stock, other awards, or other property, in the discretion of the Compensation Committee. The Compensation Committee may require or permit participants to defer the settlement of all or part of an award in accordance with such terms and conditions as the Compensation Committee may establish. The Compensation Committee is authorized to place cash, shares of common stock, or other property in trusts or make other arrangements to provide for payment of our obligations under the 2022 LTI Plan. The Compensation Committee may condition any payment relating to an award on the withholding of taxes and may provide that a portion of any shares of common stock or other property to be distributed will be withheld to satisfy withholding and other tax obligations.
Awards generally are granted without a requirement that the participant pay consideration in the form of cash or property for the grant (as distinguished from the exercise), except to the extent required by law. The Compensation Committee may, however, grant awards in exchange for other awards under the 2022 LTI Plan, awards under other of our plans, or other rights to payment from us, and may grant awards in addition to and in tandem with such other awards or rights.
Dividend Equivalents
The Compensation Committee is authorized to grant dividend equivalents conferring on participants the right to receive, currently or on a deferred basis, cash, shares of common stock, other awards, or other property equal in value to dividends paid on a specific number of shares of common stock or other periodic payments. Dividend equivalents may be granted in connection with another award, may be paid currently or on a deferred basis and, if deferred, may be deemed to have been reinvested in additional shares of common stock, awards, or otherwise as specified by the Compensation Committee. Notwithstanding the foregoing, dividend equivalents credited in connection with an award that vests based on the achievement of performance goals will be subject to restrictions and risk of forfeiture to the same extent as the award with respect to which such dividend equivalents have been credited.
No award may permit the payment of any dividends or dividend equivalents with respect to a share of common stock underlying the award prior to the delivery of the underlying award (or shares underlying the award, if applicable), and then only to the extent in a manner that does not violate the requirements of Section 409A of the Tax Code or other applicable law.
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Change in Control
In the event of a “change in control” as defined in the 2022 LTI Plan, any restrictions, deferral of settlement, and forfeiture conditions applicable to an award will not lapse, and any performance goals and conditions applicable to an award will not be deemed to have been met, as of the time of the change in control, unless either (i) we are the surviving entity in the change in control and the award does not continue to be outstanding after the change in control on substantially the same terms and conditions as were applicable immediately prior to the change in control or (ii) the successor company does not assume or substitute for the applicable award, as determined in accordance with the terms of the 2022 LTI Plan. In the event of a change in control and either, (i) we are the surviving entity in the change in control and the award does not continue to be outstanding after the change in control on substantially the same terms and conditions as were applicable immediately prior to the change in control or (ii) the successor company does not assume or substitute for the applicable award, as determined in accordance with the terms of the 2022 LTI Plan, the applicable award agreement may provide that any restrictions, deferral of settlement, and forfeiture conditions applicable to an award will lapse, and any performance goals and conditions applicable to an award shall be deemed to have been met, as of the time of the change in control. If the award continues to be outstanding after the change in control on substantially the same terms and conditions as were applicable immediately prior to the change in control, or the successor company assumes or substitutes for the applicable award, as determined in accordance with the 2022 LTI Plan, the applicable award agreement may provide that with respect to each award held by such participant at the time of the change in control, in the event a participant’s employment is terminated without “cause” by our company or any related entity or by such successor company or by the participant for “good reason,” as those terms are defined in the 2022 LTI Plan, within 24 months following such change in control, any restrictions, deferral of settlement, and forfeiture conditions applicable to each such award will lapse, and any performance goals and conditions applicable to each such award will be deemed to have been met, as of the date on which the participant’s employment is terminated.
Subject to any limitations contained in the 2022 LTI Plan, including those described above, relating to the vesting of awards in the event of any merger, consolidation, or other reorganization in which we do not survive, or in the event of any “change in control,” the agreement relating to such transaction and/or the Compensation Committee may provide for (i) the continuation of the outstanding awards by us, if we are a surviving entity, (ii) the assumption or substitution for outstanding awards by the surviving entity or its parent or subsidiary pursuant to the provisions contained in the 2022 LTI Plan, (iii) full exercisability or vesting and accelerated expiration of the outstanding awards, or (iv) settlement of the value of the outstanding awards in cash or cash equivalents or other property followed by cancellation of such awards. The foregoing actions may be taken without the consent or agreement of a participant in the 2022 LTI Plan and without any requirement that all such participants be treated consistently.
Clawback of Benefits
We may (i) cause the cancellation of any award, (ii) require reimbursement by a participant of any previously paid award or part of an award, and (iii) effect any other right of recoupment of equity or other compensation provided under the 2022 LTI Plan in accordance with any of our policies that currently exists or that may from time to time be adopted or modified in the future by us in order to comply with the applicable laws or exchange requirements, which we refer to each as a “clawback policy.” By accepting an award, a participant is also agreeing to be bound by any clawback policy that currently exists or may from time to time be adopted or modified in the future to comply with applicable laws or stock exchange requirements. By accepting an award, a participant is further agreeing that all of the participant’s award agreements (and/or awards issued under the 2013 LTI Plan) may be unilaterally amended by us, without the participant’s consent, to the extent required to comply with any clawback policy, adopted or modified, in order to comply with applicable laws or exchange requirements.
Except as otherwise provided in any employment, consulting, or other agreement for the performance of services between the participant and us or a related entity or any severance agreement or plan covering the participant, if the participant, without our consent, violates a non-competition, non-solicitation, or non-disclosure covenant or agreement, as determined by a court of competent jurisdiction, then any outstanding, vested or unvested, earned or unearned portion of the award may, at the Compensation Committee’s discretion, be canceled.
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Amendment and Termination
The Board may amend, alter, suspend, discontinue, or terminate the 2022 LTI Plan or the Compensation Committee’s authority to grant awards without further stockholder approval, except that stockholder approval must be obtained for any amendment or alteration if such approval is required by law or regulation or under the rules of any stock exchange or quotation system on which shares of our common stock are then listed or quoted; provided that, except as otherwise permitted by the 2022 LTI Plan or an award agreement, without the consent of an affected participant, no such Board action may materially and adversely affect the rights of such participant under the terms of any previously granted and outstanding award.
The Compensation Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or terminate any award theretofore granted and any award agreement relating thereto, except as otherwise provided in the 2022 LTI Plan; provided that, except as otherwise permitted by the 2022 LTI Plan or award agreement, without the consent of an affected participant, no such Compensation Committee or Board action may materially and adversely affect the rights of such participant under the terms of such award.
Life of the Plan
The 2022 LTI Plan will terminate at the earliest of (i) such time as no shares of common stock remain available for issuance, (ii) termination of the 2022 LTI Plan by the Board or (iii) the tenth anniversary of the effective date of the 2022 LTI Plan. Awards outstanding upon expiration of the 2022 LTI Plan will remain in effect until they have been exercised or terminated, or have expired.
United States Federal Income Tax Consequences
The following discussion is a general summary of the principal U.S. federal income tax consequences under U.S. law relating to awards granted to employees under the 2022 LTI Plan. This summary is not intended to be exhaustive and, among other things, does not describe state, local, or foreign income and other tax consequences. The federal income tax law and regulations are frequently amended, and participants should rely on their own tax counsel for advice regarding federal income tax treatment under the 2022 LTI Plan.
Stock Options and SARs. The grant of an option or SAR will create no tax consequences for the participant or us. A participant will generally have no taxable income upon exercise of an incentive stock option, except that the aggregate fair market value of the shares acquired minus the aggregate exercise price will count as “alternative minimum taxable income” which, depending on the facts, could result in the alternative minimum tax applying. Upon exercise of an option other than an incentive stock option, a participant generally must recognize ordinary income equal to the aggregate fair market value of the shares acquired minus the aggregate exercise price. Upon exercise of a SAR, a participant generally must recognize ordinary income equal to the value of the cash received (generally the difference between the fair market value of the common stock and the base price of the SAR). When disposing of shares acquired by exercise of an incentive stock option before the end of the later of the two-year anniversary of the grant of the option and the one-year anniversary of the exercise of the option (a “disqualifying disposition”), the participant generally must recognize ordinary income equal to the lesser of the aggregate fair market value of the shares at the date of exercise minus the aggregate exercise price or the amount realized upon the disposition of the shares minus the aggregate exercise price. Otherwise, a participant’s disposition of shares acquired upon the exercise of an option (including an incentive stock option other than pursuant to a disqualifying disposition) generally will result in a capital gain or loss.
Stock Awards. Generally, the participant who receives a stock award will recognize ordinary compensation income at the time the shares of our common stock are received equal to the excess, if any, of the fair market value of the shares of common stock received over any amount paid by the participant in exchange for the shares of common stock. If, however, the shares of common stock are not vested when they are received under the 2022 LTI Plan (e.g., if the participant is required to work for a period of time in order to have the right to sell the shares of common stock), the participant generally will not recognize income until the shares of common stock become vested, at which time the participant will recognize ordinary compensation income equal to the excess, if any, of the fair market value of the shares of common stock
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on the date they become vested over any amount paid by the participant in exchange for the shares of common stock. A participant may, however, file an election with the Internal Revenue Service, within 30 days of his or her receipt of the award, to recognize ordinary compensation income, as of the date the recipient receives the award, equal to the excess, if any, of the fair market value of the shares of our common stock on the date the award is granted over any amount paid by the recipient in exchange for the shares of common stock. The participant’s basis for the determination of gain or loss upon the subsequent disposition of shares of our common stock acquired as awards will be the amount paid for the shares of common stock plus any ordinary income recognized either when the shares of common stock are received or when the shares of common stock become vested. Upon the disposition of any shares of our common stock received as a stock award under the 2022 LTI Plan, the difference between the sales price and the participant’s basis in the shares of common stock will be treated as a capital gain or loss and generally will be characterized as long-term capital gain or loss if the shares of common stock have been held for more the one year from the date as of which he or she would be required to recognize any compensation income. We generally will be entitled to a deduction for federal income tax purposes equal to the amount of ordinary income taxable to the participant, provided that amount constitutes an ordinary and necessary business expense for us, is reasonable in amount, and is not precluded by the deduction limitations imposed by Section 162(m) of the Code, and either the recipient includes that amount in income or we timely satisfy our reporting requirements with respect to that amount.
Dividend Equivalents. Generally, the recipient of a dividend equivalent award will recognize ordinary compensation income at the time the dividend equivalent award is received equal to the fair market value of the amount received. We generally will be entitled to a deduction for federal income tax purposes equal to the amount of ordinary income that the recipient is required to recognize as a result of the dividend equivalent award, provided that the deduction is not otherwise disallowed under the Code.
Other Awards. Other awards under the 2022 LTI Plan generally will result in ordinary income to the participant at the later of the time of delivery of cash, shares, or other property underlying such awards, and the time that either the risk of forfeiture or restriction on transferability lapses on previously delivered cash, shares, or other awards.
Company Deduction. Except as discussed below, we are generally entitled to a tax deduction equal to the amount recognized as ordinary income by the participant in connection with options, SARs, or other awards, but not for amounts the participant recognizes as capital gain. Thus, we will not be entitled to any tax deduction with respect to an incentive stock option if the participant does not dispose of the shares in a disqualifying disposition. Our ability to claim a deduction will be contingent on applicable reporting requirements having been met and that the income is not an “excess parachute payment” within the meaning of Section 280G of the Tax Code and is not disallowed by reason of the $1 million limitation on certain executive compensation under Section 162(m) of the Tax Code.
Section 162(m) Limitation. Section 162(m) of the Tax Code generally disallows a public company’s tax deduction for compensation to covered employees in excess of $1 million in any tax year. Compensation, for this purpose, includes taxable income attributable to awards granted under the 2022 LTI Plan and, therefore, some awards may not be fully deductible by us under Section 162(m) of the Tax Code.
Section 409A. Section 409A of the Tax Code provides special tax rules applicable to certain compensation arrangements that provide for a deferral of compensation. Failure to comply with those requirements will result in accelerated recognition of income for tax purposes along with an additional 20% penalty tax. The 2022 LTI Plan and awards thereunder are generally intended to be designed and administered so that any awards that are considered to be deferred compensation will not give rise to any negative tax consequences to the recipient under these provisions.
Plan Benefits
All future awards to directors, executive officers, and employees will be made at the discretion of the Compensation Committee or the Board. Therefore, we cannot determine future benefits under the 2022 LTI Plan at this time. Information regarding our recent practices with respect to equity-based compensation under our 2013 LTI Plan is presented elsewhere in this Proxy Statement and in the Form 10-K.
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Executive SummaryANALysis
EXECUTIVE SUMMARY
Named Executive Officers
This Compensation Discussion and Analysissection describes our executive compensation program, outlines the core principles behind that program, and reviews the actions taken by ourthe Compensation Committee concerning the fiscal 20192022 compensation of the executive officers named in the Fiscal 2019 Summary Compensation Table below, or the named executive officers. Thesefollowing named executive officers are as follows:(“NEOs”):
Name | Title | |
Mark P. | President and | |
| Executive Vice President, Secretary | |
| Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary | |
| Vice President, Sales | |
Robert J. Cicero (2) | Former Senior Vice President, Compliance Officer, and Secretary |
(1) | Mr. Maxwell joined us on November 8, 2021. |
(2) | Mr. Cicero retired from his executive positions with us on August 1, 2021 and left us on September 10, 2021. |
Program Emphasis
Our executive compensation program emphasizes our pay-for-performance philosophy and is designed to help us attract, motivate, and retain highly qualified executives.
Compensation Governance and Practices
Our executive compensation program demonstrates our ongoing commitment to good corporate governance practices and aligns our executive officers’ interests with those of our stockholders.
Risk Mitigation | Program Features | |||
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• Clawback policy • Stock ownership guidelines • Derivatives trading and hedging policy • Annual review of compensation plans and policies includes risk assessment | • Annual “say on pay” advisory vote • Independent compensation consultant • Double trigger vesting acceleration in the event of a change-in-control • No tax gross ups in connection with severance or change-in control payments | |||
The Compensation CommitteeSay-on-Pay Results
Our Board of Directors has appointed a Compensation Committee, consisting exclusively of independent directors. The charterAt the 2021 Annual Meeting, 97% of the votes cast were in favor of the advisory vote to approve executive compensation. We have received high levels of support from our stockholders on advisory votes to approve executive compensation.
Recent Support for Say-on-Pay Proposal | |
2020: 93% | 2021: 97% |
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Summary of Fiscal 2022 Compensation Committee authorizes the Compensation Committee to determine and approve, or to make recommendations to our Board of Directors with respect to, the compensationProgram
The following highlights aspects of our Chief Executive Officer and other executive officers. Our Board of Directors has authorizedfiscal 2022 compensation program:
Base Salary— Consistent with past practice, in April 2021 the Compensation Committee to make all decisions with respect to such executive compensation. Among other things, the Compensation Committee is authorized to determine and approve the base salary of our Chief Executive Officer and other executive officers. Additionally, the Compensation Committee establishes annual cash and stock-based compensation programs for our Chief Executive Officer and other executive officers, providing our executives with variable compensation opportunities, a majority of which are based on the achievement of key measures, determined at the start of the fiscal year, tying pay to performance. Once the Compensation Committee determines key measures for the forthcoming fiscal year, the measures are not subject to change during the fiscal year. The Compensation Committee, with advice from its independent compensation consultant, also determinesreviewed the compensationbase salaries of our Board of Directors.
executive officers and compared them with peer group and broad market data. The Compensation Committee strongly recommends that stockholders vote “FOR” this year’s resolutionadjusted base salary levels to approve the compensationmore closely align with comparable positions at our peer group, to reflect additional experience and responsibilities of our namedCEO and CFO, and to take into account cost-of-living factors.
Annual Cash Incentive Bonuses— Our executive officersannual cash incentive program for fiscal 20192022 continued to focus on the achievement of objective annual financial goals; specifically, Net Sales and Adjusted EBITDAS. NEO annual target cash incentive compensation as a percentage of base salary was 100% in the case of our CEO, 70% in the case of our CFO, and 65% for the reasons set forth in more detail below. These reasons include our company’s strongother NEOs. When setting the financial performance especially compared togoals at the beginning of fiscal 2022, the Compensation Committee considered the difficult and unpredictable environment for our direct competitors inbusiness, and the relative lack of control that our management has over external, social, political, health, and economic factors that impact us. In accordance with our pay-for-performance philosophy, Mr. Smith, Ms. McPherson, and Ms. Cupero each was awarded a very difficult industry environment, the alignment of compensation withcash incentive bonus payout at 92.7% based on ourpay-for-performance philosophy, financial performance and the achievement of the performance targetsprior established targets. Mr. Maxwell was awarded 28.7% based on his prorated term with us during the fiscal year. Mr. Cicero was not awarded a cash incentive bonus, as he left us prior to the end of fiscal 2022.
Long-Term Incentive Compensation— Consistent with past practice, the Compensation Committee granted stock-based awards to our executive officers in fiscal 2022, consisting of a mix of RSUs and performance-based restricted stock units (“PSUs”). The RSUs vest one-fourth following each of the first, second, third, and fourth anniversaries of the grant date. The number of shares of common stock, if any, to be delivered under our 2019 Cash Incentive Plan, andPSUs depends on the 94.87% stockholder vote for approvalrelative performance of our executive compensation program in fiscal 2018. This recommendation is consistentcommon stock compared with ourpay-for-performance philosophy, which resulted in no cash bonuses under our Cash Incentive Plans in twothe performance of the last five fiscal years, including last year, because ofRussell 2000 Index (the “RUT”), with a target payout requiring our performance to be higher than the failure in those two years to achieve thepre-establishedRUT over a three-year period. performance targets, and no issuance of stock under the Performance Share Units, or PSUs, for the performance periods in the past two years.
Factors Affecting Fiscal 20192022 Compensation
Historically, the firearm industry has been very cyclical, with previouspast expansions and contractions due,driven, in large part, toby unpredictable political, economic, social, legislative, and regulatory factors beyond the control of industry participants and their management teams. Fiscal 2019 was a challenging year for the firearm industry as overall consumerFor example, we experienced historic levels of demand for firearmsour products in parts of fiscal 2021 and firearm accessories declined forfiscal 2022, in part, as a result of the second consecutive year. These factors also affected that portionimpact of our Outdoor Products & Accessories segment that relates to firearms. The factors that we believe have affected all participantsCOVID-19 and the social unrest experienced in the industry, as well as our company, included changes inUnited States during the social and political environment, unsettling news events, potential legislative restrictions on the sale or designsummer of firearms, actual and potential legislative and regulatory actions at the federal and state levels, economic changes, and fears surrounding crime and terrorism. Our fiscal 2019 performance was also affected by other factors, including a perception by consumers that the political and regulatory environment was more favorable toward consumer firearm ownership, which reduced the overall2020. Since then, demand for firearmsour products has begun to return to more normalized levels, which adversely impacted our year-over-year financial and accessories that are attached to firearms (such as laser sights), unfavorable inventory valuation adjustments, a declineoperating results in manufacturing fixed-cost absorption, and increased depreciation expenses related to our investment in our newly constructed national logistics facility. The firearm industry challenges during fiscal 2019 are evidenced by an 8.8% year-over-yeardecrease in overall consumer demand as indicated by adjusted background checks reported in the National Instant Criminal Background Check System, or NICs.
2022. Despite this very difficult industry environment,tough comparisons, we achieved a number of significant accomplishments in fiscal 20192022 that demonstrated progress toward our long-term strategyobjective of being the leading provider of quality products for the shooting, hunting, and rugged outdoor enthusiast. These accomplishments include the following:
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Highlights of Fiscal 2019 Compensation Program
Facing an environment characterized by very challenging conditions for the entire firearm industry, the Compensation Committee reduced the fiscal 2019 financial performance metrics for the annual cash incentive bonus relative to the prior year. The fiscal 2019 metrics were established to provide the executive officers with objectives that were difficult, but attainable, in order to motivate and incentivize them to drive increases of net sales and EBITDAS over the prior year’s results. While challenging conditions across the industry did, in fact, continue throughout fiscal 2019, the executive officers drove our company to deliver a strong performance, increasing net sales and EBITDAS for fiscal 2019. Given these positive results, the Compensation Committee believes it is important to continue to incentivize and retain our executive officers on apay-for-performance basis with compensation programs similar to previous years.
The following highlights aspects of our fiscal 2019 compensation program:
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Our Compensation Committee believes that,undisputed market leader in the context of the various factors facing the primary industry in which we operate, the executive compensation program continues to illustrate our company’s strong commitment to align pay with performance. In light of our operational accomplishmentsfirearm industry.
EXECUTIVE COMPENSATION PROGRAM OVERVIEW
Philosophy and taking into consideration potential management retention issues in a difficult market environment as well as the Compensation Committee’spay-for-performance philosophy, the Compensation Committee recommends that our stockholders vote “FOR” this year’s resolution to
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approve on an advisory basis the compensation of our named executive officers for fiscal 2019 as described in this Proxy Statement.
Corporate Governance Policies and Practices
We maintain corporate governance policies and practices designed to align executive and director compensation with stockholder interests.
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OverviewObjectives
Our executive compensation program consists primarily of base salary, annual performance-based cash incentive compensation opportunities, stock-based compensation, severance andchange-in-control payments and benefits, health and welfare benefits generally available to employees and other executives of our company, and limited perquisites as described herein. The Compensation Committee considers each element of compensation individually and collectively with other elements of compensation when establishing the various forms, elements, and levels of compensation for our executive officers.
Our philosophy with respect to executive compensation is to pay base salaries to our executive officers at levels that, in the context of unfavorable industry factors beyond the control of management, enable us to attract, motivate, and retain highly qualified executives. In addition, our executive compensation program is designed to link annual performance-based cash incentive compensation to the achievement ofpre-established performance objectives, based primarily on our company’s financial results and the achievement of other corporate goals, but also, in certain limited cases, on individual performance objectives that contribute to our long-term goal of building stockholder value. For more detailed information regarding our annual performance-based cash incentive compensation plan, see “Compensation Discussion and Analysis — Components of Compensation — Annual Performance-Based Cash Incentive Compensation.”results. Similarly, our executive compensation program is designed so that stock-based compensation focuses our executive officers’ efforts on increasing stockholder value by aligning their economic interests with those of our stockholders. To that end, ourwe generally intend for stock-based compensation generally is intended to result in more limited or no rewards if the market price of our common stock does not appreciate or does not appreciate in an amount equal to or above certain levels, but may provide substantial rewards to our executive officers (as well as to our stockholders in general) if our common stock appreciates or appreciates in an amount equal to or above certain levels. For more detailed information regarding our stock-based compensation program, see “Compensation Discussion and Analysis — Components of Compensation — Stock-Based Compensation.”
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Total compensation levels for our executive officers reflect corporate positions, responsibilities, and the achievement of performance objectives. As a result of our continuing“pay-for-performance”“pay-for-performance” philosophy, compensation levels may vary significantly fromyear-to-year and among our various executive officers. In general, we expect the compensation level of our Chief Executive Officer will be higher than that of our other executive officers. This assumes relatively equal achievement of individual performance objectives, since the Compensation Committee sets our base salaries, cash incentive compensation, and stock-based compensation after reviewing similar compensation elements of the executives at comparable companies, which generally compensate their chief executive officers at higher levels because of their roles and their importance to overall company success.
We believe that the overallaverage compensation levels for our executive officers,executives, including our named executive officers, are and continue to be in alignmentNEOs, align with our“pay-for-performance” “pay-for-performance” philosophy and have been consistent with our performance.
The Compensation Committee has developed anGoals
Our executive compensation programprogram’s objectives include the following:
Attracting, motivating, and retaining highly qualified executives, especially in the context of challenging business conditions.
Reflecting our culture and approach to total rewards, which include health and welfare benefits, a safe work environment, and professional development opportunities.
Reflecting our “pay-for-performance” philosophy.
Providing a rational and consistent approach to compensation that demonstratesis understood by senior leadership.
Aligning compensation with our ongoing commitment to good corporate governance practices and aligns our
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executive officers’ interests, withas well as those of our stockholders. This includes maintaining
Recognizing corporate stewardship and fiscal responsibility.
ADMINISTRATION
The Board has appointed a Compensation Committee, consisting exclusively of independent directors. The charter of the Compensation Committee authorizes the Compensation Committee to determine and approve, or to make recommendations to the Board with respect to, the compensation recovery, or clawback, policyof our CEO and stock ownership guidelines, maintainingother executive officers. The Board has authorized the Compensation Committee to make all decisions with respect to executive compensation. Among other things, the Compensation Committee is authorized to determine and approve the base salary of our CEO and other executive officers. Additionally, the Compensation Committee establishes annual cash and stock-based incentive stock and incentive bonus plans intended to align our incentive award grant practices with current market practices and to set forth the principles to which our stockholders expect us to adhere in designing and administering compensation programs for our CEO and prohibitingother executive officers and provides our executives with variable compensation opportunities, a majority of which is based on the repricingachievement of options and stock appreciation rights, or SARs, without approval by our stockholders. In addition, we dokey operating measures determined at the beginning of the fiscal year. Once the Compensation Committee determines key operating measures for the upcoming fiscal year, the measures generally are not provide for any taxgross-ups in connectionsubject to material changes during the fiscal year. The Compensation Committee, with severance orchange-in-control payments.
Goals
The goalsadvice from its independent compensation consultant, also determines the compensation of our executive compensation program are as follows:directors.
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Role of the Compensation Committee and Chief Executive Officerour CEO
The Compensation Committee determines the compensation of our Chief Executive Officer andexecutive officers, including our other executive officers. AtCEO, at least annually the Compensation Committee evaluates the performance of our Chief Executive Officer and determines his compensation in light of the goals and objectives of our compensation program for that fiscal year. Theyear’s compensation program. Together with our CEO, the Compensation Committee together with our Chief Executive Officer, annually assesses the performance of our other executive officers. After receiving recommendations from our Chief Executive Officer,CEO, the Compensation Committee, with input from its independent compensation consultant, determines the compensation forof our other executive officers.
At the request of the Compensation Committee, our Chief Executive Officer may attend a portion of some of the Compensation Committee meetings, including meetings at which our independent compensation consultant is present. This enables the Compensation Committee to review with our Chief Executive Officer the corporate and individual goals that the Chief Executive Officer regards as important to achieve our overall success. The Compensation Committee also requests that our Chief Executive Officer assess the performance of and our goals for our other executive officers. However, the Compensation Committee, with the assistance of its independent compensation consultant, rather than our Chief Executive Officer, makes the decisions regarding individual and corporate goals and targets for our other executive officers. Our Chief Executive Officer does not attend any portion of meetings at which his compensation is determined.
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Compensation Surveys and Independent Compensation Consultant
Compensation Matters | |
In determining executive officer compensation levels, the Compensation Committee periodically reviews compensation levels of executives of companies that it deemsdeemed to be generally similar to our company
ours based on their size, industry, and competitive factors to enable our company to attract executives from other industries and to establish compensation levels that it deems appropriate to retain and motivate our executive officers.factors. The Compensation Committee uses this peer group information, as well as published executive compensation survey data from a broader group of companies with similar revenue to our companyours, as points of reference butreference; however, the Compensation Committee does not benchmark or target our compensation levels to a specific percentile against this competitive information.
At the invitation of the Compensation Committee, our CEO may attend portions of Compensation Committee meetings, except those at which his compensation is discussed or determined. This enables the Compensation Committee to review with our CEO the goals that the CEO regards as important to achieving our success and to receive our CEO’s assessment of the performance of, and goals for, our other executive officers. However, the Compensation Committee, with the assistance of its independent compensation consultant, rather than our CEO, determines goals, targets, and compensation for our other executives.
Role of the Independent Compensation Consultant
The Compensation Committee has sole discretion to retain a compensation consultant and is directly responsible for the appointment, compensation, and oversight of the work of the compensation consultant. The Compensation Committee retains the services of an independenta compensation consultant to assist in setting the design and goals of the executive compensation program, to review trends in executive compensation, assist with the identification ofto identify relevant peer companies, and to conduct an assessment and analysis of executive market compensation. The Compensation Committee makes all determinations regarding the engagement, fees, and services of its compensation consultant, and its compensation consultant reports directly to the Compensation Committee. From time to time,
Compensia, Inc. served as the Compensation Committee’s independent compensation consultant for fiscal 2022. For fiscal 2022, the compensation consultant identified for the Compensation Committee may retainpeer group companies, provided an assessment and analysis of those companies, determined the servicespositioning of outside legal counseleach executive officer’s compensation by element among the peer companies and the survey data, developed recommendations and guidelines for the structure of our executive compensation program, reviewed the overall compensation package, and advised the Compensation Committee regarding the appropriateness of our executive compensation program. In addressing Compensia’s independence in light of applicable SEC rules and Nasdaq standards, the Compensation Committee considered relevant factors and concluded that Compensia is independent and the engagement would not raise any conflicts of interest under the applicable rules and standards.
Peer Group for Fiscal 2022
The Compensation Committee’s independent compensation consultant identified for the Compensation Committee a peer group for fiscal 2022. In selecting peer companies for the Compensation Committee’s final review, the consultant identified companies deemed generally relevant to adviseus with a focus on those involved in durables and apparel and consumer products companies, especially those with high dollar value products. The consultant then supplemented the list with companies involved in manufacturing. Within these industries, the consultant used a “rules-based” approach to select companies based on similar financial characteristics; specifically, it on compensation matters.targeted companies with revenue from approximately $500 million to $2 billion and a market capitalization from approximately $300 million to $3 billion.
Components of
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Compensation Matters | |
Fiscal 2022 Peer Group | |
Callaway Golf Company | Movado Group, Inc. |
Ethan Allen Interiors, Inc. | National Presto Industries, Inc. |
Go Pro, Inc. | NN, Inc. |
Haverty Furniture Companies, Inc. | Standard Motor Products |
Hooker Furniture Corporation | Standex International Corporation |
iRobot Corporation | Stoneridge, Inc. |
Johnson Outdoors Inc. | Sturm, Ruger & Company, Inc. |
Malibu Boats, Inc. | Universal Electronics Inc. |
MarineMax, Inc. | Vista Outdoor Inc. |
MasterCraft Boat Holdings, Inc. | Wolverine World Wide, Inc. |
Motorcar Parts of America, Inc. |
COMPENSATION ELEMENTS
Our executive compensation program continuesconsists primarily of base salary, annual performance-based cash incentive compensation opportunities, stock-based compensation, and severance benefits, together with health and welfare benefits generally available to emphasizemost employees and our“pay-for-performance” philosophy with the opportunity to receive higher total compensation based on successful performance against objective metrics, financial other executives, and otherwise, and above- market stock price appreciation.
Base Salary
limited perquisites. The Compensation Committee setsconsiders each element of compensation individually and collectively with other elements of compensation when establishing the base salariesvarious forms, elements, and levels of our executive officers at levels that it believes are required to attract, motivate, and retain highly qualified individuals assuming that they will not receive incentive compensation but reflecting the possible receipt of incentive compensation. Base salaries for our executive officersofficers.
Our fiscal 2022 executive compensation program included the following direct compensation components: base salary, annual performance-based cash incentives, and stock-based compensation.
Factors | Base Salary | Annual Performance -Based Cash Incentive | PSUs | RSUs |
Form of Compensation | Cash | Equity | ||
Fixed | Performance-Based | Performance-Based | Time-Based | |
Performance Timing | Short-Term Emphasis | Long-Term Emphasis | ||
Measurement Period | Annual and Ongoing | 1 year | Vests 25% each year over 4-year period | Vests at end of 3-year period |
Key Performance Metrics Applicable | — | Net Sales; EBITDAS | Relative TSR | Stock Price |
Determination of Performance-Based Payouts | — | Formulaic | Formulaic | — |
28 I 2022 Proxy Statement |
Compensation Matters | |
Base Salaries
Base salaries are establisheddesigned to provide competitive levels of compensation to our executives based on an individual’stheir position, responsibilities, skills, experience, performance, and contributions. In determining base salaries, theThe Compensation Committee also considers individual performance and contributions, future potential, competitive salary levels for comparable positions at other companies, salary levels relative to other internal positions, within our company, corporate needs, and the advice of the Compensation Committee’sits independent compensation consultant. The Compensation Committee’s evaluation of the foregoingthese factors is subjective, and the Compensation Committeeit does not assign a particular weight to any one factor.
The Compensation Committee independently determines the base salary of our Chief Executive Officer. The base salaries for our other executive officers, other than the Chief Executive Officer, are determined by the Compensation Committee following consultations with the Chief Executive Officer. The Compensation Committee considers the recommendations of our Chief Executive Officer as one of the factors described above.
Given the high-profile nature of the firearmsour industry, it has become increasingly difficult to attract, motivate, and retain highly qualified individuals willing to be associated with us and our company and the firearms industry as a whole.industry. The Compensation Committee has become increasingly aware of the impact this factor has had not only on existing and potential future employees, but also the pressures this factor places on the families of these individuals.
Fiscal 2022 Base Salaries. The Compensation Committee generally sets base salary levelssalaries for our executive officers at the beginning of each fiscal year, although it can make changes to base salary levels at any time during the fiscal year. For more detailed information regardingBased on an evaluation of the amounts paid asfactors listed above, the Compensation Committee’s desire to reward and retain our executive officers, the general industry range for base salary toincreases, and the competitiveness of our named executive officers inbase salaries as measured against the peer and market data, the Compensation Committee set our NEOs’ annual base salaries for fiscal 2019, see “Compensation Discussion and Analysis — Fiscal 2019 Compensation — Base Salaries.”2022 as follows:
Name and Position |
| Annualized Fiscal 2021 Base Salary |
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| Annualized Fiscal 2022 Base Salary |
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| Percentage Change |
| ||||
Mark P. Smith |
| $ |
| 500,000 |
|
|
| $ |
| 700,000 |
| (1) |
|
| 40 | % |
Deana L. McPherson |
| $ |
| 365,000 |
|
|
| $ |
| 400,000 |
| (2) |
|
| 9.6 | % |
Kevin A. Maxwell |
| $ |
| — |
| (3) |
| $ |
| 340,000 |
|
|
| n/a |
| |
Susan J. Cupero |
| $ |
| 275,000 |
|
|
| $ |
| 300,000 |
| (4) |
|
| 9.1 | % |
Robert J. Cicero |
| $ |
| 357,414 |
|
|
| $ |
| 375,000 |
| (5) |
|
| 4.9 | % |
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| The increase took into account peer company comparisons, the added responsibility of being the sole CEO following the Separation, and additional experience in the position. |
(2) | The increase took into account peer company comparisons and the CFO’s successful succession to her role. |
(3) | Mr. Maxwell joined us during fiscal 2022. |
(4) | The increase took into account peer company comparisons. |
(5) | The increase took into account additional efforts required in connection with transitioning roles related to an impending retirement – Mr. Cicero retired from his executive positions with us on August 1, 2021. |
Annual Performance-Based Cash Incentive Compensation
As it has in the past, at the start of fiscal 2019, the Compensation Committee established aAnnual performance-based cash incentive compensation plan foris designed to motivate our executive officers.executives and reward the achievement of specific performance goals that support our business strategy. In designing the cash incentive compensation plan for any particular year or period, the Compensation Committee establishes performance objectives, based primarily on theour financial results of our company, one of our divisions (in one circumstance), and the achievement of other corporate goals. In some limited cases, the Compensation Committee also considersmay consider individual objectives, responsibilities, and performance in determining the amounts payable, underbut it did not do so in fiscal 2022.
The Compensation Committee determines the plan. The target annual compensation opportunities for our executive officers, are determined by the Compensation Committee. These objective target incentive compensationwith these opportunities arebeing subject to change from year to year but not during a fiscal year, based on the Compensation Committee’sits periodic review of economic, industry, and competitive data; changes in individual responsibilities; and our overall compensation philosophy. The Compensation Committee confirms, with its independent compensation consultant and our company’s independent audit firm, the achievement of the objectives and approves the payment, if any, of annual cash incentive compensation in the first quarter of the following fiscal year. For more detailed information regarding
2022 Proxy Statement I 29 |
Compensation Matters | |
Fiscal 2022 Executive Annual Cash Incentive Program. In April 2021, the amounts paid as annualCompensation Committee established the 2022 Executive Annual Bonus Plan, a performance-based cash incentive compensation plan for our executives, including our NEOs (the “2022 Bonus Plan”). The 2022 Bonus Plan provided each participant an opportunity to earn cash incentive compensation based on attaining pre-established objective financial performance metrics and, from time to time, individual performance goals. Each participant was assigned an incentive bonus opportunity expressed as a percentage of base pay and objective financial performance metrics were established with varying weightings totaling 100%. For each metric, threshold, budget, target, and maximum performance levels were set. Final cash incentive compensation was calculated by multiplying each participant’s target percentage by the weighted average percentage calculated for each metric. Cash incentive compensation could not exceed 200% of a participant’s target bonus opportunity, and eligibility for payment of any award was subject to the participant continuing to be employed by us through the end of the fiscal year.
Fiscal 2022 Performance Metrics. For fiscal 2022, the Compensation Committee established Net Sales and Adjusted EBITDAS as the performance metrics for our named executive officersexecutives, with a weighting of 40% for Net Sales and 60% for Adjusted EBITDAS. Adjusted EBITDAS also served as the threshold for which the failure to achieve this performance metric would result in no bonus payments regardless of the achievement of the other performance metric.
The target award percentages for fiscal 2019, see “Compensation Discussion2022 as a percentage of base pay were 100% for Mr. Smith, 70% for Ms. McPherson, and Analysis — Fiscal 201965% for Messrs. Maxwell and Cicero and Ms. Cupero. There were no individual performance goals for fiscal 2022.
For these purposes, “Adjusted EBITDAS” means our net income as reported in the Form 10-K adding back interest, taxes, depreciation, amortization, non-cash stock compensation expense and any nonrecurring expenses as determined by the Compensation — Annual Performance-Based Cash Incentive Compensation.”Committee as set forth in the 2022 Bonus Plan or at any time thereafter. For fiscal 2022, the Compensation Committee determined to include the following nonrecurring expenses: (i) accelerated expenses related to the refinance of our Credit Facility; (ii) fair value inventory step-up and backlog expense; (iii) all acquisition or merger related expenses associated with negotiating, conducting diligence, and closing for any acquired company or merger; (iv) any costs related to the spin-off of the Outdoor Products & Accessories division; (v) changes in contingent consideration; (vi) impairment charges for goodwill, tangible, or intangible assets; (vii) costs incurred relating to shareholder activism; (viii) any gain or loss incurred on a sale or disposal of a product line, which sale or disposal is approved by the Board; (ix) costs directly related to inventory that cannot be sold or otherwise used, which unsaleable or unusable inventory is the result of a change in Federal firearms law; (x) any costs/impact related to the implementation of any new accounting pronouncements that become effective during the fiscal year; and (xi) any costs associated with the relocation of operations to Maryville, TN, including but not limited to severance, relocation, recruiting, construction, and duplication of costs. To the extent practicable, each amount was calculated based upon the numbers used in the audited financial statements and, if possible, in the same amount as reported in the Form 10-K.
The financial performance metrics established under the 2022 Bonus Plan were as follows:
Performance Metrics |
|
| Target Performance (in 000's) |
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| Potential Maximum Payout of Target Bonus |
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| Performance Required to Earn Maximum Payout (as a % of Target Performance) |
| |||
Net Sales |
| $ |
| 1,059,195 |
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| 200.0 | % |
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| 115.0 | % |
Adjusted EBITDAS |
| $ |
| 366,632 |
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| 200.0 | % |
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| 115.0 | % |
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The failure to reach the threshold metric of at least $217,638,000, or 59.4% of target, for the Adjusted EBITDAS metric would result in no bonus payments regardless of the achievement of the Net Sales metric.
30 I 2022 Proxy Statement |
Compensation Matters | |
In fiscal 2022, Net Sales and Adjusted EBITDAS, for purposes of compensation, were $864.0 million and $299.6 million, respectively, compared with $1.1 billion and $366.6 million, respectively, in fiscal 2021. We experienced historic levels of demand for our products in parts of fiscal 2021 and fiscal 2022, in part because of the impact of COVID-19 and the social unrest experienced in the U.S. during the summer of 2020. Since then, and particularly in the second half of fiscal 2022, demand for our products has begun to return to more normalized levels, which adversely impacted our year-over-year financial and operating results in fiscal 2022. Despite tough comparisons, we achieved a number of significant accomplishments in fiscal 2022 that demonstrated progress toward our objective of being the undisputed market leader in the firearm industry.
The table below sets forth for each NEO the annual fiscal 2022 base salary, the target bonus percentage, the annualized target cash bonus opportunity, and the actual bonus paid for fiscal 2022 reflected as a percentage of target bonus opportunity and in cash:
Name |
| Annual Fiscal 2022 Base Salary |
|
| Target Bonus Percentage |
|
|
| Annualized Target Cash Bonus Opportunity |
|
| Actual Bonus paid for Fiscal 2022 (as a % of Target Bonus Opportunity |
|
| Actual Bonus Paid for Fiscal 2022 |
| ||||||
Mark P. Smith |
| $ |
| 700,000 |
|
|
| 100 | % |
| $ |
| 700,000 |
|
|
| 92.7 | % |
| $ | 648,895 |
|
Deana L. McPherson |
| $ |
| 400,000 |
|
|
| 70 | % |
| $ |
| 280,000 |
|
|
| 92.7 | % |
| $ | 259,558 |
|
Kevin A. Maxwell (1) |
| $ |
| 340,000 |
|
|
| 65 | % |
| $ |
| 221,000 |
|
|
| 28.7 | % |
| $ | 97,662 |
|
Susan J. Cupero |
| $ |
| 300,000 |
|
|
| 65 | % |
| $ |
| 195,000 |
|
|
| 92.7 | % |
| $ | 180,764 |
|
Robert J. Cicero (2) |
| $ |
| 375,000 |
|
|
| 65 | % |
| $ |
| 243,000 |
|
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| — |
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| $ | — |
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(1) | Mr. Maxwell received a pro rata bonus reflecting his start date (November 8, 2021) with us. |
(2) | Mr. Cicero did not receive a bonus because he was not employed by us at the end of the fiscal year. |
Stock-Based Compensation
Our stock-based compensation is equity based and includes both RSUs and PSUs. We believe stock-based compensation is critical in aligning our executives’ and stockholders’ interests. Together, we believe that these incentives focus our executives on making decisions that will benefit our stockholders.
The Compensation Committee strongly believes in tying executive rewards directly to our long-term success and focusing our executive officers’executives’ efforts on increasing stockholder value by aligning their interests with those of our stockholders. To that end, our stock-based compensation generally is intended to result in more limited rewards if the price of our common stock does not appreciate or does not appreciate above certain levels, but may provide substantial rewards to our executive officers (as well as to our stockholders in general) if our common stock appreciates above certain levels. Our stock-based compensation also enables our executive officersexecutives to developearn and maintain a significant stock ownership position in our company.us. The amount of stock-based compensation granted takes into account the performance of our company;performance; the grant date value of awards; previous grants to an executive officer; an executive officer’s position with our company;position; the performance, contributions, skills, experience, and responsibilities of the executive officer; the cost to our company;us; the executive officer’s total compensation in relation to peers at our peer companies; and other factors that the Compensation Committee deems necessary or appropriate from time to time, including retention, overhang, and burn rate.
Our stock-based compensation consists primarily of stock options, RSUs, and PSUs. The Compensation Committee generally sets the vesting schedule for stock options and RSUs over multiple year periods to encourage executive retention. The Compensation Committee generally establishes multi-year performance requirements for the earning of PSUs to reward long-term companyCompany performance. PSUs are earned only if the relative performance of our common stock achieves the then-applicablepre-established metric compared with the performance of the RUT. Similarly, stock options provide value only in the event of stock price increases. At times, we may require a holding period after vesting that provides for the delivery of the shares of our common stock underlying stock-based awards on a delayed basis.RUT’s performance. In addition, we may institutegenerally maintain a value cap on PSUs.
As has been true in the case of base salary and cash-based incentive compensation, given
2022 Proxy Statement I 31 |
Compensation Matters | |
Given the high-profile nature of the firearmsour industry, it has become increasingly difficult to attract, motivate, and retain highly qualified individuals willing to be associated with the industry as a wholeus and therefore our company. Accordingly, theindustry. The Compensation Committee continues to recognize the importance of long-
termlong-term incentive stock-based compensation even though the investment community generally has not recently looked favorably upon the positive financial performance of our company given the unfavorable factors attributed to the firearm industry as a whole.factor in executive compensation.
Benefits and Perquisites
Our executive officers are eligible to participate in those health, welfare, and retirement plans, including our profit sharing, 401(k), employee stock purchase, and medical and disability plans generally available to employees of our company who meet applicable eligibility requirements. For more detailed information regarding the retirement benefits for which our named executive officers are eligible and contributions made to retirement plans on behalf of our named executive officers, see “Executive Compensation — Retirement Plans.”
In addition, from time to time, we provide certain of our executive officers with other benefits and perquisites that we believe are reasonable. These benefits and perquisites include severance andchange-in-control benefits, car allowances, housing allowances, relocation assistance, a nonqualified supplemental deferred compensation plan, and, for our Chief Executive Officer, reimbursement of insurance premiums. For more detailed information regarding these other benefits and perquisites for which our named executive officers are eligible, see “Executive Compensation.”
We do not view perquisites and other personal benefits as a significant element of our executive compensation program, but do believe they can be useful in attracting, motivating, and retaining the executive talent for which we compete. We believe that these additional benefits may assist our executive officers in performing their duties and provide time efficiencies for our executive officers in appropriate circumstances.
In the future, we may provide additional benefits and perquisites to our executive officers as an element of their overall compensation. All future practices regarding benefits and perquisites will be approved and subject to periodic review by the Compensation Committee.
Policies for the Pricing and Timing of Stock-Based Compensation
Awards. The Compensation Committee sets the exercise or strike pricevalue of stock optionsRSUs and PSUs at the fair market value of our common stock, which is the closing price of our common stock on the Nasdaq Global Select Market on the effective date of grant and sets the value of RSUs and PSUs.grant. The Compensation Committee generally grants stock-based compensation to our executive officers annually within the same time frame each year. In the case of new hires, grant prices generally are determined by the closing price of our common stock on the 15th day of the month following the date on which the employee reports for service. The Compensation Committee authorizes our Chief Executive OfficerCEO to grant stock-based compensation to employees who are not executive officers, subject to limitations on the amount and subsequent reportingan obligation to subsequently report the grant activity to the Compensation Committee.
Fiscal 2019 Compensation
Compensation Consultant
The Compensation Committee engaged Compensia, Inc., or Compensia, an independent national compensation consulting firm, to assist in the design of our executive compensation program for fiscal 2019. The Compensation Committee has the sole authority to retain and dismiss its compensation consultants and approve the fees of its compensation consultant. No member of the Compensation Committee or any named executive officer has any affiliation with Compensia, and Compensia did not provide any services to our company during fiscal 2019 other than services to the
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Compensation Committee. In accordance with the requirements of applicable SEC rules, the Compensation Committee has reviewed the independence of Compensia and has determined that Compensia did not have any conflicts of interest under the criteria established under such rules.
As a part of its evaluation of our executive compensation program, Compensia assisted the Compensation Committee in determining an appropriate group of peer companies. The Compensation Committee uses the peer companies at the beginning of the fiscal year as one source of competitive market information for cash compensation and at the end of the fiscal year to provide competitive market information for equity compensation. Because the Compensation Committee reviews market data at different times to determine cash and equity compensation, it used two peer groups — the peer group developed in fiscal 2018 to set cash compensation and the peer group developed in fiscal 2019 to set equity compensation. In selecting peer companies for the Compensation Committee’s consideration, Compensia identified companies deemed generally relevant to us with a focus on companies involved in leisure or cyclical and consumer products companies, especially those with high dollar value products, and supplementing this list with companies involved in manufacturing. Within these industries, Compensia used a “rules-based” approach to select companies based on similar financial characteristics. Specifically, Compensia selected companies with revenue from 50% to 200% of our revenue, market capitalizations from 30% to 300% of our market capitalization, and positive revenue growth at the time of the peer group review.
The selected peer group for our cash compensation review in late fiscal 2018, as approved by the Compensation Committee, consisted of the following companies:
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The selected peer group for our equity compensation review in fiscal 2019, as approved by the Compensation Committee, consisted of the following companies:
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The Compensation Committee refreshed the fiscal 2019 peer group by replacing iRobot with Malibu Boats to better align the peers with our most recent financial results. In addition, the Compensation Committee continued to include a supplemental peer company, Vista Outdoor, because of its close business similarities to our company despite the fact that it exceeds our revenue selection range. Information from Vista Outdoor was not included in the overall peer market data, however, but was shown on a supplemental basis to help the Compensation Committee better understand how competitors compensate their key executives. With the exception of Sturm Ruger & Company and Vista Outdoor, our peer group generally was not faced with the substantial industry challenges that we faced in fiscal 2019 as described above.
Compensia provided an assessment and analysis of the compensation practices of our peer companies, along with executive compensation data drawn from a national survey of a broader group of companies with similar revenue to our company, determined the positioning of each executive officer’s compensation by element among the peer companies and the survey data, developed recommendations and guidelines for the structure of our executive compensation program, and reviewed the overall compensation package and advised the Compensation Committee regarding the appropriateness of our executive compensation program.
Base Salaries
As is our practice, the Compensation Committee generally, although not always, sets base salaries for our executive officers at the beginning of the fiscal year based on a review of the position and function of each executive officer, the competitiveness of their current base salaries in comparison to the peer and market data, and their individual performance on a subjective basis. Based on an evaluation of the foregoing factors, the Compensation Committee’s desire to reward and retain the key executive officers who it believes are instrumental to our success, the general industry range for base salary increases, and the competitiveness of our base salaries as measured against the peer and market data, the Compensation Committee set the annual base salaries for our executive officers during fiscal 2019 as follows:
Name | Annualized Fiscal 2018 Base Salary | Annualized Fiscal 2019 Base Salary | Percentage Change | |||||||||
P. James Debney | $ | 735,000 | $ | 749,700 | 2.0 | % | ||||||
President and Chief Executive Officer | ||||||||||||
Jeffrey D. Buchanan | $ | 403,200 | $ | 411,264 | 2.0 | % | ||||||
Executive Vice President, Chief Financial Officer, Chief Administrative Officer, and Treasurer | ||||||||||||
Robert J. Cicero | $ | 340,200 | $ | 347,004 | 2.0 | % | ||||||
Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary | ||||||||||||
Mark P. Smith | $ | 339,990 | $ | 346,698 | 2.0 | % | ||||||
Senior Vice President, Manufacturing Services Division | ||||||||||||
Brian D. Murphy | $ | 283,250 | $ | 291,748 | 3.0 | % | ||||||
President, Outdoor Products & Accessories Division |
For more information regarding the amounts paid as base salary to our named executive officers, see “Executive Compensation — Fiscal 2019 Summary Compensation Table.”
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Annual Performance-Based Cash Incentive Compensation
Our fiscal 2019 Executive Annual Cash Incentive Program is an annual performance-based cash incentive program. The program provides each participant, including our named executive officers, with an opportunity to earn cash incentive compensation based on attainment ofpre-established company-wide or division financial performance metrics and, in the case of Mr. Cicero, individual performance goals. Each participant is assigned an incentive opportunity expressed as a percentage of base pay, or a target percentage, and financial performance metrics are established with varying weightings totaling 100%. For each financial performance metric, threshold, target, and maximum performance levels are set. A participant’s final cash incentive compensation is calculated by multiplying the participant’s target percentage by the weighted average percentage calculated for each financial performance metric. A participant’s cash incentive compensation cannot exceed 300% of the target percentage, and eligibility for the payment of any award is subject to the continued employment of the participant through the end of the fiscal year.
Fiscal 2019 Performance Metrics
For fiscal 2019, the Compensation Committee established the following performance metrics and weightings for the named executive officers for company-wide performance and Outdoor Products & Accessories division performance metrics and weightings for Mr. Murphy as set forth below.
Company-Wide Performance Metrics
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Company threshold Adjusted EBITDAS also served as a hurdle, for which the failure to achieve such performance metric would result in no bonus payments regardless of the achievement of the other company-wide or individual performance metrics.
Adjusted EBITDAS is defined as our company’s net income as reported in our Annual Report on Form10-K adding back interest, taxes, depreciation, amortization,non-cash stock compensation expense, and any nonrecurring expenses as determined by the Compensation Committee. For fiscal 2019, the Compensation Committee determined that such nonrecurring expenses included accelerated expenses related to the purchase of outstanding bonds; fair value inventorystep-up and backlog expense; amortization of acquired intangible assets; acquisition-related expenses associated with negotiation, conducting diligence and closing, any acquired company; unbudgeted transition costs related to the construction and operation of a national logistics facility in Boone County, Missouri not exceeding $275,000; severance/retention and impairment costs related to the closing of our Jacksonville, Florida facility; and the tax effect onnon-GAAP adjustments.
Performance Metrics for the Outdoor Products & Accessories Division
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Division Adjusted EBITDAS also served as a hurdle, for which the failure to achieve such performance metric would result in no bonus payments regardless of the achievement of the other division performance metrics.
Individual Performance Goals
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In establishing the company-wide and division performance metrics, the Compensation Committee recognized the very challenging economic environment for the firearm industry discussed above.
The company-wide financial performance metrics established under the fiscal 2019 program were as follows:
Performance Metrics | Target Performance (in 000’s) | Potential Maximum Payout of Target Bonus | Performance Required to Earn Maximum Payout (as a % of Target Performance) | |||||||||
Revenue | $ | 585,711 | 300.0 | % | 117.5 | % | ||||||
Adjusted EBITDAS | $ | 85,453 | 300.0 | % | 130.0 | % |
The failure to reach the threshold metric of at least $68,362,000 of the Adjusted EBITDAS metric for our company would result in no bonus payments regardless of the achievement of the revenue or individual performance metrics.
The financial performance metrics established under the fiscal 2019 program for the Outdoor Products & Accessories division were as follows:
Performance Metric | Target Performance (in 000’s) | Potential Maximum Payout of Target Bonus | Performance Required to Earn Maximum Payout (as a % of Target Performance) | |||||||||
Revenue | $ | 145,715 | 300.0 | % | 121.0 | % | ||||||
Adjusted EBITDAS | $ | 25,500 | 300.0 | % | 130.0 | % |
The failure to reach the threshold metric of at least $20.4 million of the Adjusted EBITDAS metric for the Outdoor Products & Accessories division would result in no bonus payments regardless of the achievement of the revenue metric for such division for Mr. Murphy.
Mr. Murphy’s division performance metric was the relative portion of his division’s share of the Outdoor Products & Accessories segment. Mr. Cicero had a target bonus opportunity of 65% of his base salary, of which 50% was based on the company-wide financial performance metrics and 15% was based on his individual performance goals for fiscal 2019. Mr. Cicero’s individual performance goals consisted of enumerated individual performance objectives related to his roles and responsibilities as our General Counsel and Chief Compliance Officer, which were unrelated to our company-wide financial performance, as determined by the Compensation Committee, although those individual performance goals were subject to the company Adjusted EBITDAS hurdle, which had to be met prior to any payment on those goals.
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As discussed above, the Compensation Committee reduced the fiscal 2019 financial performance metrics relative to the prior year due to an economic environment characterized by very challenging conditions for the entire firearm industry. The fiscal 2019 metrics were set to provide our executive officers with objectives that were difficult, but attainable, in order to motivate and incentivize them to drive increases of net sales and EBITDAS over the prior year’s results. The Compensation Committee also maintained a potential maximum payout of target bonus at 300% to incentivize the executive officers to deliver a strong financial performance and to retain the executive officers in a difficult economic environment and strong employment market outside the firearm industry.
In fiscal 2019, consolidated revenue and Adjusted EBITDAS were $638.3 million and $111.3 million, respectively, compared with $606.8 million and $89.4 million, respectively, in fiscal 2018. This compared very favorably to the financial performance of our direct competitors, Vista Outdoor Inc. and Sturm, Ruger & Co., that reported declines of 40.4% and 10.0%, respectively, in EBITDAS, and declines of 10.8% and 5.2%, respectively, in revenues. For additional information on the reconciliation of ournon-GAAP Adjusted EBITDAS to our reported GAAP net income, see AppendixB-Adjusted EBITDAS.
The table below sets forth for each named executive officer the annual fiscal 2019 base salary, the target bonus percentage, the annualized target cash bonus opportunity, and the actual bonus paid for fiscal 2019 reflected as a percentage of target bonus opportunity and in cash:
Name | Annual Fiscal 2019 Base Salary (1) | Target Bonus Percentage | Annualized Target Cash Bonus Opportunity | Actual Bonus Target Bonus | Actual Bonus Paid for Fiscal 2019 | |||||||||||||||
P. James Debney | $ | 749,700 | 100.0 | % | $ | 749,700 | 226.26 | % | $ | 1,696,285 | ||||||||||
Jeffrey D. Buchanan | $ | 411,264 | 75.0 | % | $ | 308,448 | 226.26 | % | $ | 697,900 | ||||||||||
Robert J. Cicero (2) | $ | 347,004 | 65.0 | % | $ | 225,553 | 226.26 | % | $ | 510,339 | ||||||||||
Mark P. Smith | $ | 346,698 | 65.0 | % | $ | 225,354 | 226.26 | % | $ | 509,889 | ||||||||||
Brian D. Murphy | $ | 291,748 | 65.0 | % | $ | 189,636 | 138.40 | % | $ | 262,461 |
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Each of our named executive officers received cash incentive compensation for our company-wide or divisional financial performance as a result of our achievingthe pre-established targets set out in our Fiscal 2019 Cash Incentive Compensation Program. In addition to receiving cash incentive compensation as a result of our achievingthe pre-existing targets set forth in our Fiscal 2019 Cash Incentive Program, Mr. Cicero, who was our only executive officerwith pre-established individual performance goals unrelated to our company-wide financial performance, also received cash incentive compensation of $117,771 as a result of satisfying his individual goals related to his roles and responsibilities as our General Counsel and Chief Compliance Officer. This is in contrast to Fiscal 2018 where no cash bonus was paid under the Fiscal 2018 Cash Incentive Program because thepre-established performance targets were not achieved.
2022 Stock-Based Compensation
. During fiscal 2019,2022, grants of annual stock-based compensation to our named executive officersNEOs consisted of RSUs and PSUs, with a weighting of 40% for RSUs and 60% for PSUs. In determining the equity awardawards granted to each executive
officer, during fiscal 2019, the Compensation Committee considered the dollar value of the awards granted to each executive officer; previous grants to our executive officers; each executive officer’s position with our company; the performance, contributions, skills, experience, and responsibilities of each executive officer; the cost of the stock-based compensation to our company; each executive officer’s total compensation in relationship to the market data; and the overall performance of our company.
The Compensation Committee maintained stock holding requirements (originally adopted in fiscal 2015) for the shares underlying outstanding stock-based awards granted to our executive officers in fiscal 2019 so that vested shares generally will not be delivered and therefore, at a minimum, cannot be sold until the first anniversary of each applicable vesting date. The Compensation Committee implemented this requirement to further align our executive officers with our stockholders, to enhance the long-term focus of our stock-based awards, and to foster executive retention.factors discussed above.
During fiscal 2019,2022, we granted the following RSUs and PSUs to our named executive officers, which equaled the number granted during fiscal 2018. While the number of PSUs granted during fiscal 2019 remained the same as was granted during fiscal 2018 for most of our named executed officers, the value of such PSUs was significantly lower.NEOs:
Name |
| RSUs |
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| PSUs at Threshold |
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| PSUs at Target |
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| PSUs at Maximum |
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Mark P. Smith |
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| 27,852 |
|
|
| 15,876 |
|
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| 41,778 |
|
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| 83,556 |
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Deana L. McPherson |
|
| 8,570 |
|
|
| 4,885 |
|
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| 12,854 |
|
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| 25,708 |
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Kevin A. Maxwell (1) |
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| 16,241 |
|
|
| — |
|
|
| — |
|
|
| — |
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Susan J. Cupero |
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| 5,892 |
|
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| 3,358 |
|
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| 8,837 |
|
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| 17,674 |
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Robert J. Cicero |
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| 6,963 |
|
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| 3,969 |
|
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| 10,444 |
|
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| 20,888 |
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Name | PSUs at Threshold | PSUs at Target | PSUs at Maximum | |||||||||||||||||||||||||
P. James Debney | 26,638 | 70,100 | 140,200 | |||||||||||||||||||||||||
Jeffrey D. Buchanan | 9,538 | 25,100 | 50,200 | |||||||||||||||||||||||||
Robert J. Cicero | 5,472 | 14,400 | 28,800 | |||||||||||||||||||||||||
Mark P. Smith | 5,472 | 14,400 | 28,800 | |||||||||||||||||||||||||
Brian D. Murphy | 5,472 | 14,400 | 28,800 |
These
(1) | Relates to a sign-on equity award Mr. Maxwell received with a grant date of November 8, 2021. Mr. Maxwell did not receive an annual equity award for fiscal 2022 because he was not employed by us at the time of those awards. |
RSUs vest one-fourth following each of the first, second, third, and fourth anniversaries of the grant date.
PSUs are earned and vest based on the relative performance of our common stock against the RUT over the approximately three-year performance period following the date of grant. If the relative performance of our common stock (measured based on the average closing price of our common stock during the90-calendar-day-period preceding approximately the third anniversary of the date of grant against the average closing price of our common stock during the90-calendar-day-period immediately following the date of grant) does not equal or exceed the relative performance of the RUT (measured based on the average closing price of the RUT during the90-calendar-day-period preceding approximately the third anniversary of the date of grant against the average closing price of the RUT during the90-calendar-day-period immediately following the date of grant), then no PSUs subject to the awards will be earned and vest. If the relative performance of our common stock equals the relative performance of the RUT, then 38% of the PSUs subject to the awards (at target) will be earned and vest, or the threshold award. If the relative performance of our common stock exceeds the relative performance of the RUT by up to five points, then the PSUs subject to the awards will be earned and vest on a straight-line basis from the threshold award level up to the target award level, with 100% of the PSUs subject to the awards (the target number of PSUs) being earned and vesting if the relative performance of our common stock exceeds the relative performance of the RUT by five points. If the relative performance of our common stock exceeds the relative performance of the RUT by over five points up to a level of 10 points, then the PSUs subject to the awards will be earned and vest on a straight-line basis up to the maximum award, with 200% of the PSUs subject to the awards (the maximum number of PSUs) being earned and vesting if the relative performance of our common stock exceeds the relative performance of the RUT by 10 points or more.
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The underlying shares of our common stock earned, if any, relatedrelating to these PSUs will be delivered onas soon as practical after the first anniversary of the May 1st ending date of the performance period.period and confirmation by the Compensation Committee of the performance achievement. The maximum
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number of shares that can be delivered with respect to the fiscal 20192022 PSU awards is limited to a dollar value, determined as of the vesting date, of 600% of the grant date value. See “Compensation Discussion and Analysis — Introduction — Highlights of Fiscal 2019 Compensation Program.”
Upon a change in control of our companythe Company prior to the three year anniversary of the date of any PSU grant, each named executive officerPSU award recipient will earn a number of PSUs subject to the award in accordance with the formula described above, provided that (i) the relative performance of our common stock will be measured based on the consideration offered for one share of our common stock in the change in control to calculate our market capitalization (or in the event of a change in control that does not involve an acquisition of our stock, based on the trading price of our common stock on the date of the change in control)control to calculate our market capitalization) against the average closing price of our common stock during the90-calendar-day period immediately following the date of grant; and (ii) the relative performance of the RUT will be measured based on the average closing price of the RUT during the90-calendar-day-period immediately prior to the change in control against the average closing price of the RUT during the90-calendar-day-period immediately following the date of grant. The PSUs earned pursuant to the formula described above will then be converted into RSUs that will vest upon the earlier of (i) a qualifying termination of employment or (ii) the original vesting date.
During fiscal 2019 we also granted the following RSUs to our named executive officers, which equaled the number of RSUs granted during fiscal 2018. While the number of RSUs granted during fiscal 2019 remained the same as was granted during fiscal 2018 for most of our named executive officers, the value of such RSUs was significantly lower.
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These RSUs vestone-fourth on May 1st following each of the first, second, third, and fourth anniversaries of the date of grant, subject to each named executive officer’s continued service with us, and the underlying shares are delivered on theone-year anniversary of the applicable vesting date. These RSUs will vest in the event of a qualifying termination of employment following a change in control of our company (as defined in the applicable award agreements).
For more information regarding the grants of stock-based compensation to our named executive officers in fiscal 2019, see “Executive Compensation — Fiscal 2019 Grants of Plan-Based Awards.”
Each named executive officer forfeits the unvested portion, if any, of this stock-based compensation if his service to our company is terminated for any reason, except as otherwise set forth in the applicable award agreement, in any employment or severance agreement between our company and the named executive officer, in any policy or plan of our company applicable to the named executive officer, or as may otherwise be determined by the administrator of the applicable equity plan. See “Executive Compensation — Potential Payments Upon Termination or Change in Control.”
Certain Stock-Based Compensation Arrangements Granted in Prior Fiscal Years
Results for Previous PSU Awards
Payout. The PSUs granted in fiscal 20162019 to our executive officers, which had a three-year performance period ending at the conclusion of fiscal 2019,May 1, 2022, were not earned because our common stock did not
meetmarket capitalization combined with the thresholdmarket capitalization of AOUT met the maximum performance requirements compared with the RUT. Over the three-year performance period, our stock price declined 56.91%market capitalization combined with the market capitalization of AOUT appreciated 87.5% while the RUT appreciated 34.68%, which resulted in our stock price trailing the RUT by 91.59%30.6%. As a result, the Compensation Committee confirmed that this underperformanceoutperformance resulted in none of the PSUs granted in fiscal 20162019 being earned, and therefore, our named executive officers did not receive anyNEOs that had received the 2019 award received 200.0% of the target shares of common stock underlying the PSUs granted in fiscal 2016.2019.
Other ElementsAdjustments for the Separation. In connection with the Separation, our outstanding stock-based awards were adjusted in a manner intended to maintain the intrinsic value of Fiscal 2019the RSUs and PSUs immediately prior to the Separation. The RSUs and PSUs held by our directors and executives generally were converted into RSUs or PSUs of us and AOUT, such that each such holder would (i) continue to hold the existing RSU or PSU in us covering the same number of shares of our common stock that were subject to the RSU or PSU prior to the Separation and (ii) receive an identical RSU or PSU covering one share of AOUT common stock for each four shares of our common stock covered by the RSU or PSU in us, resulting in the RSUs or PSUs for us, and AOUT, having a combined intrinsic value immediately after the Separation as before the Separation, taking into account any necessary adjustments to the exercise price to maintain such intrinsic value. In addition, to the extent the existing award of us is subject to the achievement of certain company performance-based target goals, appropriate adjustments were made to such target goals and incorporated into the new awards to reflect the changes to the businesses as a result of the Separation. The number of shares covered by RSUs in us held by other employees were adjusted so that the RSUs had the same intrinsic value immediately following the Separation as before the Separation. To the extent the existing award is subject to vesting based upon continued service, the new awards also remained subject to the same vesting conditions based upon continued employment with the holder’s post-Separation employer.
Benefits and Perquisites
Our executives are eligible to participate in those health, welfare, and retirement plans generally available to employees who meet applicable eligibility requirements – including our profit sharing, 401(k), employee stock purchase, and medical and disability plans. In addition, from time to time, we may provide our executive officers with other benefits and perquisites that we believe are reasonable – including severance and change-in-control benefits, car allowances, housing allowances, relocation assistance, a nonqualified supplemental deferred compensation plan, and insurance premium reimbursement.
2022 Proxy Statement I 33 |
Compensation Matters | |
We do not view perquisites and other personal benefits as a significant element of our executive compensation program, but believe they can be useful in attracting, motivating, and retaining executive talent. We believe these additional benefits may assist our executives in performing their duties and provide time efficiencies in appropriate circumstances. We may provide additional benefits and perquisites to our executives in the future as an element of their overall compensation. All future practices will be approved and subject to periodic review by the Compensation Committee.
ADMINISTRATION
Consideration of Risk in Compensation Policies
We have assessed the compensation policies and practices with respect to our employees, including our executive officers, and concluded that they do not create risks that are reasonably likely to have a material adverse effect on us.
Deductibility of Executive Compensation
Section 162(m) of the Code generally limits our deductibility, for federal income tax purposes, of compensation paid to each of our NEOs in excess of $1 million per person per year.
Taxation of “Parachute” Payments
Sections 280G and 4999 of the Code provide that executive officers and directors and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of a company that exceeds certain prescribed limits and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We did not provide any executive officer, including any NEO, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G and 4999 during fiscal 2022, and we have not agreed and are not otherwise obligated to provide any executive officer with such a “gross-up” or other reimbursement.
Derivative Trading and Hedging
See “Board and Governance Matters—Additional Governance Matters—Director and Officer Derivative Trading and Hedging.”
Clawback Policy
We maintain a compensation recovery, or clawback, policy. In the event we are required to restate our financial results as a result of a material noncompliance by us with any financial reporting requirement under the federal securities laws, we will have the right to use reasonable efforts to recover from any current or former executive officer who received incentive compensation (whether cash or equity) from us during the three-year period preceding the date on which we were required to prepare the accounting restatement, any excess incentive compensation awarded as a result of the misstatement. This policy is administered by the Compensation Committee. If final rules are adopted by the SEC regarding clawback requirements under the Dodd-Frank Act, we will review this policy and make any amendments as necessary to comply with the new rules.
This clawback policy applies to cash and stock-based incentive compensation programs, including our 2013 Incentive Stock Plan and our 2013 Incentive Bonus Plan.
Derivative Trading and Hedging
We have a policy prohibiting our directors and officers, including our executive officers, and any family member residing in the same household, from engaging in derivatives trading and hedging involving our securities or pledging or margining our common stock.
Tax and Accounting Considerations
Deductibility of Executive Compensation
Section 162(m) of the Code generally limits our deductibility, for federal income tax purposes, of compensation paid to each of our chief executive officer and the next three highest-paid named executive officers (other than the chief financial officer solely for taxable years beginning prior to January 1, 2018) in excess of $1 million per person per year. For taxable years beginning prior to January 1, 2018, certain compensation, including qualified performance-based compensation, was not subject to this annual deduction limit if certain requirements were met.
For taxable years beginning prior to January 1, 2018, when reasonably practicable, the Compensation Committee sought to qualify the variable incentive compensation paid to our executive officers for the qualified performance-based compensation exemption from the deductibility limit. The Compensation Committee, however, had the discretion to authorize compensation payments that did not comply with this exemption when it believed that such payments were in the best interests of our company and our stockholders, such as, for example, in order to attract or retain executive talent.
Effective for tax years beginning after December 31, 2017, this $1 million annual deduction limit will apply to all our named executive officers, including our chief financial officer, and the exemption for qualified performance-based compensation will no longer be available. As a result, compensation paid to each of our named executive officers in any taxable year in excess of $1 million
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Compensation Matters | ||||
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Stock Ownership and Retention Requirements
We maintain stock ownership guidelines for our non-employee directors and executive officers. Our non-employee directors and executive officers are required to own shares of our common stock or share equivalents with a value equal to at least the lesser of the following:
Position | Target Ownership |
Non-Employee Directors | 3x cash retainer or 21,000 shares or share equivalents |
CEO | 3x base salary or 161,000 shares or share equivalents |
CFO | 2x base salary or 34,000 shares or share equivalents |
Other Executive Officers | 2x base salary or 26,000 shares or share equivalents |
Each individual has five years from the date of his or her appointment as a director or an executive officer to achieve the required ownership levels. For these purposes, stock ownership generally includes shares directly owned by the individual (including any shares over which the individual has sole ownership, voting, or investment power); shares owned by the individual’s minor children and spouse and by other related individuals and entities over whose shares the individual has custody, voting control, or power of disposition; shares underlying RSUs that have vested and are deliverable or will be vested and deliverable within 60 days; shares underlying PSUs that have vested, but are not be deductible unless it qualifiesdeliverable within 60 days if the performance requirements have been satisfied; and shares held in trust for the transition relief applicable to certain compensation arrangements in place as of November 2, 2017, including certain stock options and performance shares granted prior to such date. Becausebenefit of the absenceindividual. Failure to satisfy the required ownership level may result in the ineligibility of formal guidancethe individual to receive stock-based compensation, in the case of an executive officer or director, or inability to be a nominee for election to the Board, in the case of a director.
Employment Agreements and Severance Arrangements
We do not maintain employment agreements with any of our NEOs, except Mr. Smith.
Mr. Smith. On April 4, 2020, we entered into an employment agreement with Mr. Smith, pursuant to which he is (a) entitled to an annual base salary that is subject to annual review by the Board and (b) eligible to participate in our executive compensation programs, to receive a discretionary annual cash bonus under our annual cash incentive program as determined by the Board, and to receive annual and periodic stock-based compensation awards as determined by the Board. Mr. Smith is entitled to receive other standard benefits, including a car allowance of $1,500 per month; participation in any group health insurance, pension, retirement, vacation, expense reimbursement, relocation program, and other plans, programs, and benefits approved by the Board and made available from time to time to our other executives; and certain insurance benefits.
If we unilaterally terminate Mr. Smith’s employment without cause, he will receive (i) his base salary for 18 months after the termination; (ii) a pro rata portion of his annual cash bonus for the fiscal year in which the termination occurs to the extent earned under the transition relief provisions, though, we cannot guarantee that any compensation arrangements intendedthen applicable executive annual cash incentive program; (iii) a car allowance for 18 months after termination; (iv) at our option, either (x) coverage under our medical plan to qualifythe extent provided for him pursuant to his employment agreement at termination, such benefits to be received for 18 months thereafter or (y) reimbursement for the exemption under Section 162(m) will actually receiveCOBRA premium for such treatment.
Taxation of “Parachute” Payments
Sections 280G and 4999coverage through the earlier of the 18-month period or the COBRA eligibility period; and (v) a vested pro rata portion of stock-based awards scheduled to vest in the fiscal year of the termination.
If Mr. Smith’s employment is terminated by reason of his death or disability, if Mr. Smith unilaterally terminates his employment, or if Mr. Smith engages in an act or acts involving a crime, moral turpitude, fraud or dishonesty, or he willfully violates in a material respect our Corporate Governance Guidelines, Code of Conduct, or Sections 280GCode of Ethics for the Chief Executive Officer and 4999, provideSenior Financial Officers, he will receive no further base compensation under his employment agreement.
2022 Proxy Statement I 35 |
Compensation Matters | |
If Mr. Smith’s employment is terminated by reason of his death or disability, if we unilaterally terminate Mr. Smith’s employment without cause, or if Mr. Smith voluntarily terminates his employment, or is terminated by us, following a qualifying change in control event as described below, he will receive, for the fiscal year of the notice of termination, any earned bonus, on a pro-rated basis, based on the performance goals actually achieved for the fiscal year of the notice of termination, as determined in the sole discretion of the Board, at the time such bonuses are paid to our other employees.
The agreement provides that, executive officers and directors and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection withthe event of a change in control (as defined therein), Mr. Smith may, at his option and upon written notice to us, terminate his employment, unless (i) the provisions of his employment agreement remain in full force and effect and (ii) he suffers no reduction in his status, duties, authority, or compensation following the change in control, provided that he will be considered to suffer a reduction in his status, duties, or authority if, after the change in control, (a) he is not the CEO of the company that succeeds to our business; (b) such company’s stock is not listed on a national stock exchange; or (c) such company terminates his employment or reduces his status, duties, authority, or compensation within one year of the change in control. If, within one year of a change of control, Mr. Smith terminates his employment because of the change in control following which the employment agreement does not remain in full force and effect or his status, duties, authority, or compensation have been reduced, or such company that exceeds certain prescribed limits,terminates Mr. Smith, he will receive (A) his base salary for 18 months; (B) an amount equal to 150% of the average of his cash bonus paid for each of the two fiscal years immediately preceding his termination, which will be paid over the 18-month period; (C) his car allowance for 18 months; and that(D) at our option, either (x) coverage under our medical plan to the company (or a successor) may forfeit a deductionextent provided for him at the date of termination for 18 months or (y) reimbursement for the COBRA premium for such coverage through the earlier of such 18-month period or the COBRA eligibility period. In addition, all unvested stock-based compensation held by Mr. Smith in his capacity as an employee on the amounts subject to this additional tax. We did not provide any executive officer, including any named executive officer, with a“gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a resulteffective date of the applicationtermination will vest as of Sections 280Gthe effective date of such termination.
The employment agreement includes non-competition and 4999 during fiscal 2019,non-solicitation provisions that apply for 18 months following termination.
Mr. Cicero. On May 24, 2021, in connection with Mr. Cicero’s retirement, we and Mr. Cicero entered into a separation and release agreement. Pursuant to the agreement, Mr. Cicero’s roles as our General Counsel, Chief Compliance Officer, and Secretary ceased on August 1, 2021 (the “Transition Date”); however, from the Transition Date through September 10, 2021 (the “Termination Date”), he continued to be employed by us and assisted with respect to all transition matters. Pursuant to the agreement, we have not agreed and are not otherwise obligated to provide any executive officer with suchpay Mr. Cicero his annual base salary for a“gross-up” or other reimbursement.
Accounting for Stock-Based Compensation
We account for stock-based employee compensation arrangements period of 26 weeks in accordance with our normal payroll processing and the provisionscost of Financial Accounting Standards Board Accounting Standards Codification Topic 718 “Compensation — Stock Compensation,” COBRA premiums until the earlier of 26 weeks following the Termination Date,or ASC Topic 718. ASC Topic 718 requires companiesthe termination of his rights under COBRA. The treatment of Mr. Cicero’s outstanding equity awards is governed by the terms and conditions set forth in his existing equity award agreements and the applicable equity award plan under which the awards were granted.
Severance Plan Benefits
The Smith & Wesson Brands, Inc. Executive Severance Pay Plan (the “Executive Severance Plan”) is intended to measure the compensation expense for all stock-based payment awards madeprovide severance pay to employees and directors, including stock options and deferred stock units, based on the grant date “fair value”certain eligible executives whose employment is terminated under certain circumstances. All of these awards. This calculation is performed for accounting purposes and reportedour NEOs participated in the compensation tables below, even though ourExecutive Severance Plan during fiscal 2022, except Mr. Smith, whose severance eligibility is covered under other agreements. In addition, following his retirement, Mr. Cicero was covered under his separation agreement.
Subject to certain conditions, if we terminate a participating executive officers may never realize any value from their awards. ASC Topic 718 also requires companieswithout good cause (other than due to recognizedeath or disability) or a participating executive resigns for good reason (each as defined therein), he or she will receive certain payments and benefits, subject to the compensationterms and conditions set out in the Executive Severance Plan. These payments and benefits include continuation of base salary, payment of a pro rata portion of his or her cash incentive bonus, and reimbursement for the cost of their stock-based compensation awards in their income statements over the period that an executive officer is required to render service in exchangehealthcare continuation coverage for the optionparticipating executive and his or other award.her eligible dependents. In determining stock-based compensation, the Compensation Committee considers the potential expense of these awards under ASC Topic 718 and the impact on our company.addition, if we terminate a participating executive during a Potential Change in Control Protection Period or Change in Control Protection Period or a participating executive resigns following an Adverse Change in Control Effect (each
36 I 2022 Proxy Statement |
Compensation Matters | ||||
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statementProxy Statement and, based on such review and discussions, the Compensation Committee recommended to ourthe Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.Proxy Statement.
Respectfully submitted,
Compensation Committee: Barry Monheit, Chairman; Anita D. Britt; Fred M. Diaz; and John B. Furman.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2022, Messrs. Diaz, Furman, Chairman
Gregory J. Gluchowski, Jr.
Barry M.and Monheit
I. Marie Wadecki and Ms. Britt served on the Compensation Committee. None of these individuals had any material contractual or other relationships with us during the fiscal year, except as directors. During fiscal 2022, none of our executive officers served on the compensation committee or board of directors of any entity whose executive officers serve as a member of the Board or Compensation Committee.
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Fiscal 2019 Summary Compensation TableFISCAL 2022 SUMMARY COMPENSATION TABLE
The following table sets forth, for the fiscal years ended April 30, 2019, 2018,2022, 2021, and 2017,2020, information with respect to compensation for services in all capacities to us and our subsidiaries earned by our Chief Executive Officer, our Chief Financial Officer,NEOs, and each of our three other most highly compensatedone additional individual who served as an executive officersofficer during fiscal 2021 but was not serving as ofan executive officer at the end of our last completed fiscal year, or collectively our named executive officers.2022.
Name and Principal Position | Year | Salary | Bonus (1) | Stock Awards (2) | Option Awards | Non-Equity Incentive Plan Compensation (3) | All Other Compensation (4) | Total (5) | ||||||||||||||||||||||||
P. James Debney | 2019 | $ | 749,361 | $ | – | $ | 1,263,474 | – | $ | 1,696,285 | $ | 49,903 | $ | 3,759,023 | ||||||||||||||||||
President and Chief Executive Officer | 2018 | $ | 734,039 | $ | – | $ | 1,448,758 | – | $ | – | $ | 46,039 | $ | 2,228,836 | ||||||||||||||||||
2017 | $ | 683,538 | $ | – | $ | 2,855,209 | – | $ | 1,683,952 | $ | 79,169 | $ | 5,301,868 | |||||||||||||||||||
Jeffrey D. Buchanan | 2019 | $ | 411,078 | $ | – | $ | 453,198 | – | $ | 697,900 | $ | 54,372 | $ | 1,616,548 | ||||||||||||||||||
Executive Vice President, Chief Financial Officer, Chief Administrative Officer, and Treasurer | 2018 | $ | 402,831 | $ | – | $ | 519,658 | – | $ | – | $ | 50,290 | $ | 972,779 | ||||||||||||||||||
2017 | $ | 383,780 | $ | – | $ | 1,024,141 | – | $ | 707,997 | $ | 86,053 | $ | 2,201,971 | |||||||||||||||||||
Robert J. Cicero | 2019 | $ | 346,847 | $ | – | $ | 258,800 | – | $ | 510,339 | $ | 30,325 | $ | 1,146,311 | ||||||||||||||||||
Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary | 2018 | $ | 339,715 | $ | – | $ | 296,752 | – | $ | – | $ | 25,501 | $ | 661,968 | ||||||||||||||||||
2017 | $ | 314,553 | $ | – | $ | 584,838 | – | $ | 503,342 | $ | 60,495 | $ | 1,463,228 | |||||||||||||||||||
Mark P. Smith | 2019 | $ | 346,541 | $ | – | $ | 258,800 | – | $ | 509,889 | $ | 28,683 | $ | 1,143,913 | ||||||||||||||||||
Senior Vice President, Manufacturing Services Division | 2018 | $ | 339,709 | $ | – | $ | 296,752 | – | $ | – | $ | 22,877 | $ | 659,338 | ||||||||||||||||||
2017 | $ | 330,000 | $ | – | $ | 584,838 | – | $ | 527,310 | $ | 55,375 | $ | 1,497,523 | |||||||||||||||||||
Brian D. Murphy (6) | 2019 | $ | 291,551 | $ | – | $ | 258,800 | – | $ | 262,461 | $ | 87,014 | $ | 899,826 | ||||||||||||||||||
President, Outdoor Products & Accessories Division | 2018 | $ | 283,091 | $ | 160,000 | $ | 296,752 | – | $ | – | $ | 15,238 | $ | 755,081 | ||||||||||||||||||
Name and Principal Position |
| Year |
| Salary |
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| Bonus (1) |
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| Stock Awards (2) |
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| Non-Equity Incentive Plan Compensation (3) |
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| All Other Compensation (4) |
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| Total (5) |
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Mark P. Smith |
| 2022 |
| $ | 700,000 |
|
| $ | — |
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| $ | 1,371,850 |
|
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| 648,895 |
|
| $ | 101,153 |
|
| $ | 2,821,898 |
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President and Chief |
| 2021 |
| $ | 519,231 |
|
| $ | — |
|
| $ | 1,068,599 |
|
|
| 1,000,000 |
|
| $ | 117,110 |
|
| $ | 2,704,939 |
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Executive Officer |
| 2020 |
| $ | 394,193 |
|
| $ | — |
|
| $ | 643,457 |
|
|
| 359,341 |
|
| $ | 31,616 |
|
| $ | 1,428,607 |
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Deana L. McPherson |
| 2022 |
| $ | 400,000 |
|
| $ | — |
|
| $ | 422,095 |
|
| $ | 259,558 |
|
| $ | 65,880 |
|
| $ | 1,147,533 |
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Executive Vice President, |
| 2021 |
| $ | 379,038 |
|
| $ | 25,000 |
|
| $ | 173,500 |
|
| $ | 474,500 |
|
| $ | 66,976 |
|
| $ | 1,119,014 |
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Chief Financial Officer, Treasurer, and Assistant Secretary |
| 2020 |
| $ | 307,965 |
|
| $ | — |
|
| $ | 265,913 |
|
| $ | 182,650 |
|
| $ | 30,489 |
|
| $ | 787,018 |
|
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|
Kevin A. Maxwell (6) |
| 2022 |
| $ | 163,462 |
|
| $ | 50,000 |
|
| $ | 349,994 |
|
| $ | 97,662 |
|
| $ | 7,362 |
|
| $ | 668,480 |
|
Senior Vice President, |
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|
General Counsel, Chief |
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|
Compliance Officer, and |
|
| �� |
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Secretary |
|
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|
Susan J. Cupero |
| 2022 |
| $ | 299,519 |
|
| $ | — |
|
| $ | 290,190 |
|
| $ | 180,764 |
|
| $ | 62,575 |
|
| $ | 833,048 |
|
Vice President, Sales |
| 2021 |
| $ | 285,577 |
|
| $ | — |
|
| $ | 451,250 |
|
| $ | 357,500 |
|
| $ | 61,073 |
|
| $ | 1,155,400 |
|
|
| 2020 |
| $ | 215,388 |
|
| $ | — |
|
| $ | 63,323 |
|
| $ | 113,214 |
|
| $ | 23,938 |
|
| $ | 415,862 |
|
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|
Robert J. Cicero (7) |
| 2022 |
| $ | 160,184 |
|
| $ | — |
|
| $ | 342,952 |
|
| $ | — |
|
| $ | 194,582 |
|
| $ | 697,718 |
|
Senior Vice President, |
| 2021 |
| $ | 371,161 |
|
| $ | 25,000 |
|
| $ | 173,500 |
|
| $ | 464,638 |
|
| $ | 66,416 |
|
| $ | 1,100,716 |
|
General Counsel, Chief |
| 2020 |
| $ | 357,134 |
|
| $ | — |
|
| $ | 280,125 |
|
| $ | 210,847 |
|
| $ | 31,489 |
|
| $ | 879,595 |
|
Compliance Officer, and |
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Secretary |
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|
(1) | The amounts shown in this column |