Vera Bradley, Inc PRE 14A, filed Apr 26, 2021
Vera Bradley, Inc. (VRA)
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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
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
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Preliminary Proxy Statement | |
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Definitive Additional Materials | |
| ☐ |
Soliciting Material under §240.14a-12 | |
VERA BRADLEY, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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2021 PROXY STATEMENT
AND NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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Welcome to the Vera Bradley, Inc.
Annual Meeting of Shareholders
Dear Shareholder of Vera Bradley, Inc.:
You are cordially invited to attend the 2021 Annual Meeting of Shareholders of Vera Bradley, Inc., to be held at 9:30 a.m., Eastern Time, on June 3, 2021 at our Design Center at 12420 Stonebridge Road, Roanoke, IN 46783.
The attached Notice of 2021 Annual Meeting of Shareholders and Proxy Statement provide information concerning the matters to be considered and voted on at the Annual Meeting. Please take the time to carefully read each of the proposals.
Regardless of the number of shares you hold or whether you plan to attend the meeting in person, your vote is important. Accordingly, please vote your shares as soon as possible by following the instructions you received on your proxy card. Voting your shares prior to the Annual Meeting will not prevent you from voting your shares in person if you subsequently choose to attend the meeting.
To make it easier for you to vote, Internet and telephone voting are available. The instructions for voting via the Internet and telephone can be found on your proxy card.
In light of the ongoing COVID-19 pandemic, we are encouraging all shareholders to take advantage of Internet and telephone voting. Additionally, while we anticipate that the Annual Meeting will occur as planned on June 3rd, there is a possibility that due to the COVID-19 pandemic the meeting may be postponed or the location changed, including possibly holding a virtual meeting. Should this occur, we will notify you by issuing a press release and filing an announcement with the Securities and Exchange Commission as definitive additional soliciting material. If you plan to attend the meeting in person, please note that we will be holding the meeting in accordance with recommended and any required social distancing guidelines and you will be required to wear a face covering over the nose and mouth.
Thank you for your continued support of Vera Bradley.
Sincerely,
Robert Wallstrom
President and Chief Executive Officer
[●], 2021
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NOTICE OF 2021 ANNUAL MEETING OF SHAREHOLDERS
| Date: | June 3, 2021 | |
| Time: | 9:30 a.m., Eastern Time | |
| Place: | Vera Bradley Design Center 12420 Stonebridge Road Roanoke, IN 46783 | |
| Record Date: | April 1, 2021. You are entitled to vote at the Annual Meeting only if you were a shareholder at the close of business on the record date. | |
| Items of Business: | • To elect ten Directors for a one-year term to expire at the 2022 Annual Meeting of Shareholders
• To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2022
• To approve, on an advisory basis, the compensation of the Company’s named executive officers
• To approve a proposed amendment to our Second Amended and Restated Articles of Incorporation to allow shareholders to unilaterally amend our bylaws
• To transact any other business as may properly come before the meeting or at any adjournments or postponements thereof | |
| Proxy Voting: | Shareholders of record may vote in person at the Annual Meeting in Roanoke, but may also appoint proxies to vote their shares in one of the following ways, by: | |
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Via Internet
– cast your vote at
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Via Phone – cast your vote by phone
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Via Mail – Mark, sign and date your
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Shareholders whose shares are held by a bank, broker or other nominee (in “street name”) may instruct such record holders how to vote their shares. Any proxy may be revoked at any time prior to its exercise at the meeting by following the procedures described in the proxy solicitation materials. If you hold your shares in “street name” and wish to vote your shares in person at the Annual Meeting, you must obtain a legal proxy from your bank, broker or other holder of record, giving you the right to vote the shares.
By Order of the Board of Directors,
Mark C. Dely
Corporate Secretary
[●], 2021
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on June 3, 2021: This 2021 Proxy Statement and Notice of Annual Meeting of Shareholders and our Fiscal 2021 Annual Report are available in the “Investor Relations” section of our website at www.verabradley.com.
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PROXY SUMMARY
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider, and we encourage you to read the entire Proxy Statement before voting.
FISCAL 2021 BUSINESS HIGHLIGHTS
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PROXY SUMMARY
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PROXY SUMMARY
In the Company’s second fiscal quarter of the prior year (on July 16, 2019), Vera Bradley acquired a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”). Financial results for Pura Vida have been consolidated beginning July 17, 2019, the first full day following the acquisition. Figures prior to fiscal 2020 have not been restated to reflect the purchase transaction.
The graphs below provide a ‘‘snapshot’’ of our performance in accordance with accounting principles generally accepted in the United States (“GAAP”) in fiscal 2021 and the previous four fiscal years.
Net revenues totaled $468.3 million in fiscal 2021 compared to $495.2 million in fiscal 2020. Vera Bradley, Inc. net income in accordance with GAAP was $8.7 million, or $0.26 diluted EPS, in fiscal 2021, compared to $16.0 million, or $0.47 diluted EPS, in fiscal 2020.
Fiscal 2021 items impacting comparability. During fiscal 2021, Vera Bradley, Inc. net income was negatively impacted by $12.7 million of charges including after-tax charges of $4.8 million for amortization of definite-lived intangible assets; $4.5 million of store impairment charges; $2.1 million of technology-related re-platforming charges (“Project Novus”); $1.1 million of COVID-19-related charges including the cancellation of certain purchase orders and certain department store exit costs; and $0.2 million for an adjustment upon payment of the earn-out liability associated with the Pura Vida transaction. These charges negatively impacted diluted EPS by approximately $0.38 in fiscal 2021. The COVID-19 pandemic significantly impacted our operating results for the year.
Fiscal 2020 items impacting comparability. During fiscal 2020, Vera Bradley, Inc. net income was negatively impacted by $12.1 million of charges including after-tax Pura Vida purchase-related net charges of $9.7 million and after-tax charges of $2.4 million related to Project Novus, while net revenues were positively impacted by $65.9 million of incremental revenue attributable to Pura Vida. The Pura Vida purchase-related net charges and the Project Novus charges negatively impacted diluted EPS by approximately $0.35 in fiscal 2020. Refer to Note 16 of the Notes to the Consolidated Financial Statements set forth in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020 for additional information.
Fiscal 2018 and fiscal 2017 items impacting comparability. Refer to Note 14 in the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019 regarding Vision 20/20-related charges and other charges incurred during fiscal 2018, and other charges incurred during fiscal 2017 (January 31, 2016 through January 28, 2017).
Corporate Responsibility and our Environmental, Social and Governance Efforts
Every day, we have the privilege of inspiring and connecting women and girls through our two lifestyle brands, our amazing products, our wonderful people and our community and global efforts. Vera Bradley and Pura Vida both nurture and promote a culture of diversity, inclusion, equality and fairness and are steadfastly focused on creating a future that is not only better but is also more sustainable for all of our stakeholders. We want to ensure our Company continues to be a great place to work, shop and invest, and that the world around us is a better place to live.
Being a positive force in the environmental, social and governance (“ESG”) movement is something we are committed to, and it is an integral part of our long-term vision of being a purpose-driven, multi-brand, high-growth company. We strive to be a leader on ESG issues that matter most to our stakeholders — our customers, our associates, our shareholders and our communities.
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PROXY SUMMARY
To engage our stakeholders, generating financial returns is important, but having a sustainable business, a solid balance sheet and a clear long-term strategy supported by a strong ESG commitment is also critical. We are continuing to build a company that our stakeholders are excited to invest in and be a part of now and in the future. We will continue building upon and communicating our historical strengths of connecting and bringing women and girls together as well as our positive social and environmental impact.
During the past year, we have strengthened the communities we serve around the world, developed and nurtured our approximately 2,500 associates, openly engaged with the investment community and promoted good corporate governance. Our Corporate Responsibility and Sustainability Report shares more details about our progress and our plans going forward. This document can be found on verabradley.com, and as we continue our journey, we will routinely update you on our progress.
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PROXY SUMMARY
The Board maintains a process for shareholders and interested parties to communicate with the Board. Shareholders and interested parties may write or email our Board as provided below:
| Write: Corporate Secretary Vera Bradley, Inc. 12420 Stonebridge Road Roanoke, Indiana 46783
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Internet:
http://investors.verabradley.com/corporate-governance/contact-the-board or http://investors.verabradley.com/contact-us
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Email:
jbentley@verabradley.com
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We understand the importance of a robust shareholder engagement program. To that end, our Chief Executive Officer and appropriate members of management routinely attended meetings with shareholders and investor conferences, as well as regular meetings with institutional shareholders. Our meetings and interactions with shareholders are designed to help us better understand how our shareholders perceive Vera Bradley and to provide our shareholders an opportunity to discuss matters that they believe deserve attention. We believe our engagement has been productive and provides an open exchange of ideas and perspectives for both our shareholders and us.
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PROXY SUMMARY
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PROPOSAL NO. 1 ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
VOTE REQUIRED AND BOARD RECOMMENDATION
In 2019, the Board of Directors amended the Company’s Corporate Bylaws to provide for one-year terms for Directors instead of three-year terms beginning with those Directors elected at the 2019 annual meeting. Beginning with the 2021 annual meeting, all of the Company’s Directors will stand for election each year. As each term expires, the next term for the newly elected Director will be a one-year term. Vera Bradley’s Bylaws allow the Board to fix the number of directors by resolution, and our Board membership is currently set at ten directors.
Below are the directors nominated for election by shareholders to serve for a one-year term. The Board recommends a vote “FOR” each of the directors. Each director nominee will be elected by a plurality of votes cast, which means that the nominees receiving the highest number of votes will be elected as directors. Abstentions and broker non-votes will have no effect on the vote.
| NAME |
AGE | DIRECTOR SINCE |
OCCUPATION | INDEPENDENT (Y/N) |
OTHER PUBLIC BOARDS |
GENDER | ||||||
| Barbara Bradley Baekgaard |
82 | 1982 | Co-Founder, Vera Bradley, Inc. |
N | - | Female | ||||||
| Kristina Cashman |
54 | 2020 | Former Chief Financial Officer, several restaurant companies |
Y | 1 | Female | ||||||
| Robert J. Hall |
62 | 2007 | President, Green Gable Partners |
N | - | Male | ||||||
| Mary Lou Kelley |
60 | 2015 | Retired President, E-Commerce for Best Buy |
Y | 2 | Female | ||||||
| John E. Kyees |
74 | 2010 | Retired Chief Financial Officer, Urban Outfitters, Inc. |
Y | - | Male | ||||||
| Frances P. Philip |
63 | 2011 | Retired Chief Merchandising Officer, L.L. Bean, Inc. |
Y | 1 | Female | ||||||
| Edward M. Schmults |
58 | 2010 | CEO, UL Holdings, Inc. | Y | - | Male | ||||||
| Carrie M. Tharp |
40 | 2020 | VP, Retail and Consumer, Google Cloud |
Y | - | Female | ||||||
| Nancy R. Twine |
36 | - | CEO, Briogeo Hair Care |
Y | - | Female | ||||||
| Robert Wallstrom |
55 | 2013 | President and Chief Executive Officer, Vera Bradley, Inc. |
N | - | Male | ||||||
Additional information regarding each director nominee, as well as the other members who serve on our board, follows below.
The Board of Directors has no reason to believe that any of the nominees will be unable to serve as a director. If, however, any nominee becomes unable to serve as a director prior to the Annual Meeting, the proxies will have discretionary authority to vote for a substitute nominee. Unless authority to do so is withheld, the persons named as proxies will vote “FOR” the election of the nominees.
VERA BRADLEY’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE “FOR” THE ELECTION OF THE ABOVE-LISTED
NOMINEES TO THE BOARD OF DIRECTORS.
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PROPOSAL NO. 1 ELECTION OF DIRECTORS
DIRECTOR QUALIFICATIONS AND SELECTION PROCESS
DIRECTOR NOMINEES FOR ELECTION AT THE 2021 ANNUAL MEETING
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Age(1) | Director Since | ||
| Barbara Bradley Baekgaard – Co-Founder
Ms. Baekgaard co-founded Vera Bradley in 1982. From 1982 through June 2010, she served as Co-President, and in May 2010, she was appointed Chief Creative Officer. In 2017, Ms. Baekgaard became emeritus from the Chief Creative Officer role when Beatrice Mac Cabe assumed that role. She still serves as an active brand ambassador for the Vera Bradley brand. She also currently serves as a board member of the Indiana University Melvin and Bren Simon Cancer Center Development Board and the Vera Bradley Foundation for Breast Cancer. |
82 |
1982 | ||
| Qualifications: As Co-Founder of Vera Bradley, Ms. Baekgaard serves a key leadership role on our Board of Directors and provides the Board with a broad array of institutional knowledge and historical perspective. Since our founding, Ms. Baekgaard has provided leadership and strategic direction in our brand’s development by providing creative vision to areas such as marketing, product design, assortment planning and the design and visual merchandising of our stores.
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PROPOSAL NO. 1 ELECTION OF DIRECTORS
| Kristina Cashman |
54 | 2020 | ||
| Ms. Cashman served as the Chief Financial Officer of Upward Projects, a restaurant group, from May 2018 until March 2019. From 2013 until April 2018, she was Chief Financial Officer of Hopdoddy Burger Bar, Inc. Ms. Cashman’s prior experience includes President of Guy and Larry Restaurants and Chief Financial Officer of both Eddie V’s Restaurants, Inc. and P.F. Chang’s China Bistro, Inc. She was previously an Audit Manager with Ernst & Young.
Ms. Cashman serves as a director of and Chair of the Audit Committee for publicly-held Basset Furniture Industries, Inc. |
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| Qualifications: Ms. Cashman brings to the Board of Directors particular knowledge and experience in finance, accounting, tax, and capital structure, as well as strategic planning, real estate strategy and selection, operations and incentive compensation plan development.
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| Robert J. Hall – Chair |
62 | 2007 | ||
| Mr. Hall has served as Chair of the Board since September 2010. Mr. Hall is the President of Green Gables Partners, a private investment firm that he founded in 2010. Prior to founding Green Gables, Mr. Hall started Andesite Holdings, a private equity firm, where he served as principal from 2007 to 2014. Mr. Hall served as an Executive Director for UBS Financial Services from 2000 to 2007.
Mr. Hall serves as a director of FlyLow Gear Co., a privately-held manufacturer of outerwear; as Board Chair of The Holderness School; and serves as Co-Chair of the U.S. Biathlon Association. |
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| Qualifications: Mr. Hall provides our Board of Directors with insight and perspective on general strategic and financial matters stemming from his extensive experience in investment banking, investment management, financial planning and private placements.
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| Mary Lou Kelley |
60 | 2015 | ||
| Ms. Kelley served as President, E-Commerce for electronics retailer Best Buy from April 2014 through March 2017. Prior to joining Best Buy, Ms. Kelley served as Senior Vice President, E-Commerce for Chico’s FAS Inc. from June 2010 to March 2014. Ms. Kelley formerly held the posts of Vice President of Retail Real Estate and Marketing and Vice President of E-Commerce for L.L. Bean.
Ms. Kelley serves on the boards of YETI Holdings, Inc. a premium cooler and drinkware company and Finning International, a public company that is the world’s largest Caterpillar equipment dealer with operations in Canada, South America, the United Kingdom and Ireland. She also is an advisor to the Board of Directors and senior leadership of Falabella Retail, the largest department store retailer in South America. |
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| Qualifications: Ms. Kelley has deep capabilities in developing the retail omni-channel experience, as well as e-commerce, marketing and strategic planning experience. She provides insight and counsel on a variety of issues as the Company continues to pursue our long-term strategic plan, which includes elevating our digital first strategy and our marketing efforts.
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PROPOSAL NO. 1 ELECTION OF DIRECTORS
| John E. Kyees – Lead Independent Director |
74 | 2010 | ||
| From February 2014 through May 2014, Mr. Kyees served as the interim Chief Financial Officer of Destination XL Group, Inc., the largest multi-channel specialty retailer of big and tall men’s apparel. In 2010, Mr. Kyees retired as the Chief Investor Relations Officer from Urban Outfitters, Inc., a lifestyle retail chain, after serving as Chief Financial Officer from 2003 to 2010. Mr. Kyees formerly held the position of Chief Financial Officer and Chief Administrative Officer for bebe stores, Inc., a retail chain headquartered in San Francisco, California, from 2002 to 2003.
Mr. Kyees is currently a director of Arhaus Furniture, a privately-held retailer. |
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| Qualifications: Mr. Kyees brings to our Board of Directors over 40 years of experience in the consumer products retail and manufacturing industries. He has over 30 years of experience as a chief financial officer and nine years serving in that role for a public company. Institutional Investor magazine selected Mr. Kyees as a top specialty retail chief financial officer on five separate occasions, evidencing his strong skills in corporate finance, strategic and accounting matters.
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| Frances P. Philip |
63 | 2011 | ||
| From 1994 to 2011, Ms. Philip held positions of increasing responsibility at L.L. Bean, Inc., a privately-held outdoor apparel and equipment retailer based in Freeport, Maine, including Chief Merchandising Officer from 2002 to 2011. Prior to working at L.L. Bean, Ms. Philip was one of three principals who launched the innovative fresh flower catalog, Calyx & Corolla, and she served in a variety of roles with other specialty retailers, including The Nature Company, Williams-Sonoma and The Gap.
Ms. Philip also serves on the boards of Coats Group plc., a UK-based company traded on the London Stock Exchange that is the world’s leading industrial thread company; Vista Outdoor, a leading global designer, manufacturer and marketer of consumer products in the outdoor sports and recreation markets; Sea Bags, a privately-held manufacturer and retailer of handcrafted tote bags and accessories made from recycled sails; and Totes-Isotoner Corporation, a privately-held international umbrella, footwear and cold-weather accessory supplier. |
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| Qualifications: Ms. Philip brings to our Board of Directors extensive experience in product design and development, multi-channel merchandising and the retail and consumer products industry.
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| Edward M. Schmults |
58 | 2010 | ||
| Since early 2021, Mr. Schmults has served as the Chief Executive Officer of UL Holdings, Inc., which operates Urbn Leaf retail stores in the legal cannabis market. From 2018 until early 2021, Mr. Schmults was the Chief Executive Officer of Calyx Peak Companies, which operates and manages assets in the legal cannabis market. From 2009 until 2018 Mr. Schmults served as the Chief Executive Officer and a director of Wild Things, LLC, a privately-held company that provides technical apparel, packs and bags to the U.S. military, federal and state law enforcement agencies and the consumer market. From 2005 to 2009, Mr. Schmults served as the Chief Executive Officer of FAO Schwarz, a toy retailer. Mr. Schmults has also served as Chief Operating Officer at RedEnvelope, Inc. and Patagonia.
Mr. Schmults is a member of the board of privately-held Calyx Peak Companies. |
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| Qualifications: Mr. Schmults brings to our Board of Directors over 30 years of experience in branded consumer products, direct-to-consumer sales, finance, information technology and socially responsible business practices. Mr. Schmults also has significant experience in customization of consumer products as an early adopter in the apparel businesses in which he has worked.
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PROPOSAL NO. 1 ELECTION OF DIRECTORS
| Carrie M. Tharp |
40 | 2020 | ||
| Ms. Tharp has served as Vice President, Retail and Consumer, for Google Cloud, a global cloud provider, since August 2019. Between October 2016 and July 2019, she was Executive Vice President, Chief Digital Officer of luxury retailer Neiman Marcus Group and served as Interim Neiman Marcus Brand President from January 2019 until July 2019. From June 2013 until September 2016, Ms. Tharp served as Senior Vice President, Chief Marketing Officer and Head of eCommerce for Fossil Group, a multi-brand watch and accessories business. Prior to that, she held various management positions with Travelocity and Dean Foods. |
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| Qualifications: Ms. Tharp has extensive expertise in marketing, brand management, digital fluency, social media, customer insights, analytics, customer strategy, and omni-channel retailing.
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| Nancy R. Twine |
36 | - | ||
| Ms. Twine is the CEO of Briogeo Hair Care, a company she founded in 2014. Briogeo is a line of carefully crafted, clean hair care and is now one of the largest, independent Black-owned prestige beauty brands in the U.S. From 2007 until 2014, she was Vice President of Commodities Sales and Trading at Goldman Sachs in New York City.
Ms. Twine currently serves as an Advisor to the Sephora USA Diversity Advisory Counsel. |
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| Qualifications: Ms. Twine brings to our Board of Directors knowledge and perspective on financial matters stemming from her experience in the commodities and trading markets. In addition, by launching and operating her own thriving business, Ms. Twine has unique experience and a deep understanding of brand building, marketing, product design, consumer insights, e-commerce, wholesale relationships, and operations.
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| Robert Wallstrom – President and Chief Executive Officer |
55 | 2013 | ||
| Mr. Wallstrom joined Vera Bradley as its President and Chief Executive Officer in 2013. From 2007 to 2013, Mr. Wallstrom served as President of Saks Fifth Avenue OFF 5TH, the outlet chain operated by Saks Fifth Avenue. Previously, he was Group Senior Vice President and General Manager of Saks’ flagship New York store from 2002 to 2007. Prior to joining Saks, Mr. Wallstrom held a variety of roles at retailer Macy’s Inc. from 1987 to 1995.
Mr. Wallstrom serves on the Board of Directors of the privately-held Brotherhood Mutual Insurance Company. |
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| Qualifications: Mr. Wallstrom is a retail executive with extensive brand management experience, proven leadership abilities and a track record of driving growth. As President of Saks Fifth Avenue OFF 5TH, Mr. Wallstrom developed and implemented a strategic plan that repositioned the division as a growth engine, propelling it to a market-leading position. He has a deep background in strategic planning and execution, brand positioning, product development, store operations and merchandise planning and allocation.
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| (1) | Represents age as of the Annual Meeting date. |
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CORPORATE GOVERNANCE
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CORPORATE GOVERNANCE
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THE BOARD AND ITS COMMITTEES
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THE BOARD AND ITS COMMITTEES
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AUDIT COMMITTEE REPORT
Management is responsible for the preparation, presentation and integrity of Vera Bradley’s consolidated financial statements and the Company’s internal control over financial reporting. The independent registered public accounting firm of Deloitte & Touche LLP, or Deloitte, was responsible in fiscal 2021 for performing an integrated audit of the Company’s consolidated financial statements and the effectiveness of the Company’s controls over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes. The Audit Committee is also responsible for selecting and evaluating the independence of the Company’s independent registered public accounting firm and for pre-approving the services rendered by that firm.
In this context, the Audit Committee reports as follows:
| 1. | The Audit Committee has reviewed and discussed with management Vera Bradley’s audited consolidated financial statements for the fiscal year ended January 30, 2021; |
| 2. | The Audit Committee has discussed with Deloitte the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the Commission; |
| 3. | The Audit Committee has received and reviewed the written disclosures and the letter from Deloitte required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte’s communications with the Audit Committee concerning independence and has discussed with Deloitte its independence; and |
| 4. | The Audit Committee has considered whether the provision by Deloitte of non-audit services to Vera Bradley is compatible with maintaining Deloitte’s independence. |
Based on these procedures and discussions, the Audit Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements referred to above be included in Vera Bradley’s Annual Report on Form 10-K for the fiscal year ended January 30, 2021, for filing with the Securities and Exchange Commission.
SUBMITTED BY THE AUDIT COMMITTEE
Kristina Cashman
Mary Lou Kelley
John E. Kyees
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EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has reviewed and discussed the following Executive Compensation Discussion and Analysis with management and, based on such review and discussion, has recommended to the Board of Directors that the Executive Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2021.
SUBMITTED BY THE COMPENSATION COMMITTEE
Edward M. Schmults
Frances P. Philip
Carrie M. Tharp
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS (“CD&A”)
This CD&A provides a summary of the material elements of our compensation philosophy and practices, with a particular focus on our named executive officers or “NEOs.” As used in this CD&A, the “Committee” refers to the Compensation Committee of the Board of Directors.
The following is a list of our NEOs who served for fiscal 2021:
| NAME |
TITLE | |
| Robert Wallstrom |
President and CEO, Vera Bradley, Inc. | |
| John Enwright |
Chief Financial Officer, Vera Bradley, Inc. | |
| Daren Hull |
Brand President, Vera Bradley | |
| Beatrice Mac Cabe |
Chief Creative Officer, Vera Bradley | |
| Mary Beth Trypus |
Chief Revenue Officer, Vera Bradley | |
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EXECUTIVE COMPENSATION
To assist in understanding our NEO compensation program, we have included a discussion of our compensation policies and decisions for periods before and after fiscal 2021, where relevant. Our compensation program is designed to provide some common standards throughout the Company. Therefore, much of what is disclosed below applies to executives in general and is not limited to our NEOs. The Committee constantly evaluates industry and corporate governance best practices in its compensation programs. Below is a summary of what the Company does and does not do with respect to its compensation programs:
| CORPORATE GOVERNANCE BEST PRACTICES | ||
| WHAT WE DO | WHAT WE DON’T DO | |
| Pay for Performance: 50% of CEO compensation and 36% of other NEO compensation is tied to performance. |
No Hedging or Pledging: Under the Company’s Insider Trading Policy, executives are not allowed to enter into hedging/pledging or other monetization transactions with Company securities. | |
| Double-Trigger Change of Control: Following a change in control, severance payments will only be triggered upon an involuntary termination of employment or where employee terminates for good reason. |
Grant of Stock and Options Below Fair Market Value: All restricted stock units and options are priced and granted at the fair market value at the time of grant. Stock or options are not granted below fair market value. | |
| Use of Third-Party Consultants: We utilize compensation consultants and third-party benchmarking to evaluate and compare our compensation programs. |
Repricing of Underwater Options/RSUs: The Committee has not repriced any underwater options or otherwise changed the value of RSUs granted despite change in the value of the stock. | |
| Share Ownership Guidelines: Executive Officers are expected to hold Company common stock between 2 and 4 times their annual base salary, and non-employee directors are expected to hold common stock of 4 times their annual cash retainer. |
Short-Term Vesting of Equity: No short-term vesting of equity grants. The Company utilizes a three-year time horizon to vest equity granted as part of its Long-Term Incentive Program. | |
| Compensation Recoupment Policy: All cash incentive awards, or performance-based equity awards are subject to recoupment in the event of earnings restatements resulting from unlawful activity, or other unlawful activity, fraud or intentional misconduct. |
No Tax Gross-Ups: The Company does not utilize tax gross-ups for executives. | |
| Limited use of Employment Agreements: Only our CEO has an employment agreement. |
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EXECUTIVE COMPENSATION
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EXECUTIVE COMPENSATION
| FISCAL 2021 COMPENSATION PEER GROUP | ||||
| The Buckle, Inc. |
Boot Barn, Inc. | Crocs, Inc. | ||
| Duluth Holdings |
Land’s End, Inc. | Francesca’s Holdings Corp | ||
| Vince Holding Corp. |
Build-a-Bear Workshop, Inc. | J. Jill. Inc. | ||
| Movado Group, Inc. |
Oxford Industries, Inc. | RTW Retailwinds, Inc. | ||
| Destination XL Group, Inc. |
Tilly’s Inc. | Zumiez Inc. | ||
| YETI, Holdings, Inc. |
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ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM IN FISCAL 2021
| Vera Bradley, Inc. 2021 Proxy Statement | 21 |
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EXECUTIVE COMPENSATION
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FISCAL 2021 BASE SALARY CHANGES
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| FISCAL 2020 BASE SALARY RATE |
FISCAL 2021 BASE SALARY RATE |
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| Robert Wallstrom |
$ | 800,000 | $ | 850,000 | ||||
| John Enwright |
377,000 | 388,000 | ||||||
| Daren Hull |
490,000 | 504,000 | ||||||
| Beatrice Mac Cabe |
382,000 | 393,000 | ||||||
| Mary Beth Trypus |
365,000 | 376,000 | ||||||
| 22 | Vera Bradley, Inc. 2021 Proxy Statement |
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EXECUTIVE COMPENSATION
| ENTERPRISE ANNUAL INCENTIVE PLAN STRUCTURE | ||||||||||||||
| FINANCIAL METRICS |
Weight | Payout by Performance Level as a Percentage of Target Incentive |
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| Threshold | Target | Maximum | ||||||||||||
| Enterprise Operating Income |
25% | 25% | 100% | 200% | ||||||||||
| Enterprise Net Revenue |
25% | 25% | 100% | 200% | ||||||||||
| Total |
50% | |||||||||||||
| BRAND ANNUAL INCENTIVE PLAN STRUCTURE | ||||||||||||||
| FINANCIAL METRICS |
Weight | Payout by Performance Level as a Percentage of Target Incentive |
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| Threshold | Target | Maximum | ||||||||||||
| Brand Operating Income |
20% | 25% | 100% | 200% | ||||||||||
| Enterprise Operating Income |
10% | 25% | 100% | 200% | ||||||||||
| Brand Net Revenue |
20% | 25% | 100% | 200% | ||||||||||
| Total |
50% | |||||||||||||
| Vera Bradley, Inc. 2021 Proxy Statement | 23 |
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EXECUTIVE COMPENSATION
| 24 | Vera Bradley, Inc. 2021 Proxy Statement |
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EXECUTIVE COMPENSATION
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EXECUTIVE COMPENSATION
| 26 | Vera Bradley, Inc. 2021 Proxy Statement |
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EXECUTIVE COMPENSATION
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EXECUTIVE COMPENSATION
| 28 | Vera Bradley, Inc. 2021 Proxy Statement |
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EXECUTIVE COMPENSATION
The table below shows information concerning the annual compensation for services to the Company in all capacities of the Company’s NEOs during the last three completed fiscal years, each of which contained 52 weeks. The salary figures include a 75% reduction to base compensation for Mr. Wallstrom and a 30% reduction to base compensation for the other NEOs during a portion of fiscal 2021 to conserve cash as a result of the COVID-19 pandemic. Information regarding fiscals 2020 and 2019 for Ms. Trypus is omitted because she was not an NEO during the relevant years.
| NAME AND PRINCIPAL POSITION | FISCAL YEAR |
SALARY | BONUS | STOCK AWARDS(2) |
NON- EQUITY |
ALL OTHER COMPEN- SATION |
TOTAL COMPEN- SATION |
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| Robert Wallstrom |
2021 | $646,500 | — | $1,400,004 | $654,500 | $7,761 | (4) | $2,708,765 | ||||||||||||||||||||
| President and CEO, Vera Bradley, Inc. |
2020 | 796,156 | 200,000 | (1) | 1,100,008 | 583,848 | 11,288 | (4) | 2,691,300 | |||||||||||||||||||
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2019 | 750,022 | — | 750,020 | 1,113,783 | 11,000 | (4) | 2,624,825 | ||||||||||||||||||||
| John Enwright |
2021 | 343,677 | — | 275,000 | 117,564 | 11,251 | (4) | 747,492 | ||||||||||||||||||||
| Chief Financial Officer, Vera Bradley, Inc. |
2020 | 375,462 | 100,000 | (1) | 250,000 | 120,148 | 11,292 | (4) | 856,902 | |||||||||||||||||||
| 2019 | 356,462 | — | 350,002 | 205,322 | 11,032 | (4) | 922,818 | |||||||||||||||||||||
| Daren Hull |
2021 | 446,476 | — | 400,004 | 173,813 | 11,265 | (4) | 1,031,558 | ||||||||||||||||||||
| Brand President, Vera Bradley |
2020 | 488,846 | — | 399,996 | 168,652 | 12,062 | (4) | 1,069,556 | ||||||||||||||||||||
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2019 | 285,000 | — | 799,985 | 157,035 | 50,880 | (5) | 1,292,900 | ||||||||||||||||||||
| Beatrice Mac Cabe |
2021 | 348,131 | — | 324,996 | 110,669 | 9,915 | (4) | 793,711 | ||||||||||||||||||||
| Chief Creative Officer, Vera Bradley |
2020 | 380,077 | — | 325,012 | 131,127 | 11,315 | (4) | 847,531 | ||||||||||||||||||||
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2019 | 356,462 | — | 350,002 | 205,322 | 11,032 | (4) | 922,818 | ||||||||||||||||||||
| Mary Beth Trypus |
2021 | 332,989 | — | 275,000 | 109,642 | 3,868 | (4) | 721,499 | ||||||||||||||||||||
| Chief Revenue Officer, Vera Bradley |
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| (1) | Represents cash bonus payments made to Mr. Wallstrom and Mr. Enwright to reward work done for the Company’s successful July 2019 acquisition of Pura Vida. |
| (2) | Represents the aggregate grant date fair value of restricted stock units awarded during the fiscal year computed in accordance with FASB ASC Topic 718. The grant date fair value of each individual award of restricted stock units for fiscal 2021 is set forth in the Fiscal 2021 Grants of Plan-Based Awards table below. Additional information regarding the calculation of these values is included in Notes 2 and 8 to our consolidated financial statements. Performance-based awards are reflected at target. If the maximum level of performance-based awards were to be achieved for the awards granted in fiscal 2021, the aggregate grant date fair value would be $2,100,006 for Mr. Wallstrom; $412,500 for Mr. Enwright; $600,006 for Mr. Hull; $487,494 for Ms. Mac Cabe; and $412,500 for Ms. Trypus. |
| (3) | Represents annual incentive compensation paid under the Company’s Annual Incentive Bonus Program. |
| (4) | Represents 401(k) matching contributions made by the Company. |
| (5) | Represents reimbursement of relocation expenses. |
| Vera Bradley, Inc. 2021 Proxy Statement | 29 |
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EXECUTIVE COMPENSATION
Fiscal 2021 Grants of Plan-Based Awards
The following table sets forth information regarding grants of plan-based awards in fiscal 2021. In this table “TRSU” stands for time-based restricted stock unit and “PRSU” stands for performance-based restricted stock unit.
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ESTIMATED POSSIBLE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) |
ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS(2) |
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TYPE OF AWARD |
GRANT DATE |
THRESHOLD | TARGET | MAXIMUM | THRESHOLD | TARGET | MAXIMUM | ALL OTHER STOCK AWARDS |
GRANT DATE FAIR VALUE OF STOCK AWARDS(3) |
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| Robert Wallstrom |
Annual Incentive | $ | 318,750 | $ | 850,000 | $ | 1,700,000 | |||||||||||||||||||||||||||||||
| TRSUs | April 7, 2020 | 171,569 | $ | 700,002 | ||||||||||||||||||||||||||||||||||
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PRSUs | April 7, 2020 |
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42,892 | 171,569 | 343,138 |
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700,002 | ||||||||||||||||||||
| John Enwright |
Annual Incentive | $ | 58,200 | $ | 155,200 | $ | 310,400 | |||||||||||||||||||||||||||||||
| TRSUs | April 7, 2020 | 33,701 | 137,500 | |||||||||||||||||||||||||||||||||||
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PRSUs | April 7, 2020 |
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8,425 | 33,701 | 67,402 |
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137,500 | ||||||||||||||||||||
| Daren Hull |
Annual Incentive | $ | 75,600 | $ | 201,600 | $ | 403,200 | |||||||||||||||||||||||||||||||
| TRSUs | April 7, 2020 | 49,020 | 200,002 | |||||||||||||||||||||||||||||||||||
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PRSUs | April 7, 2020 |
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12,255 | 49,020 | 98,040 |
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200,002 | ||||||||||||||||||||
| Beatrice Mac Cabe |
Annual Incentive | $ | 58,950 | $ | 157,200 | $ | 314,400 | |||||||||||||||||||||||||||||||
| TRSUs | April 7, 2020 | 39,828 | 162,498 | |||||||||||||||||||||||||||||||||||
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PRSUs | April 7, 2020 |
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9,957 | 39,828 | 79,656 |
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162,498 | ||||||||||||||||||||
| Mary Beth Trypus |
Annual Incentive | $ | 56,400 | $ | 150,400 | $ | 300,800 | |||||||||||||||||||||||||||||||
| TRSUs | April 7, 2020 | 33,701 | 137,500 | |||||||||||||||||||||||||||||||||||
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PRSUs | April 7, 2020 |
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8,425 | 33,701 | 67,402 |
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137,500 | ||||||||||||||||||||
| (1) | Awards available under the Company’s fiscal 2021 Annual Incentive Bonus Program. For all NEOs amounts shown above are based upon the ending fiscal 2021 base salary rate excluding the base compensation reductions during a portion of fiscal 2021 as a result of the COVID-19 pandemic. |
| (2) | Awards made under the Incentive Plan to certain employees and directors, including our NEOs. TRSUs vest in three equal annual installments on the first, second and third anniversaries of the grant date. PRSUs have a three-year cliff-vesting schedule based on continued employment and performance. The performance feature is based on earnings per share growth over the three-year performance period. Vesting would be accelerated in the event of death, disability or a change in control. See “— Potential Payments on Termination or Change in Control.” If the Company were to declare any cash dividend on its common shares, an equivalent amount per RSU would be credited to an account for each holder and paid to the holder in cash (or forfeited) at the time the shares underlying the RSU are delivered to the holder (or forfeited). Amounts in this account would bear interest at the prime rate reported in the Midwest Edition of The Wall Street Journal from the date of deposit until paid to the holder or forfeited in accordance with the Incentive Plan. |
| (3) | Represents the grant date fair value of each award computed in accordance with FASB Topic 718. |
| 30 | Vera Bradley, Inc. 2021 Proxy Statement |
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EXECUTIVE COMPENSATION
Outstanding Equity Awards at 2021 Fiscal Year-End
The following table sets forth information regarding outstanding equity awards as of January 30, 2021.
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STOCK AWARDS | |||||||||||||||||||
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RESTRICTED STOCK UNIT GRANT DATE |
NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED |
MARKET SHARES OR UNITS OF HAVE NOT VESTED ($)(2) |
EQUITY (#)(1) |
EQUITY INCENTIVE ($)(2) |
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| Robert Wallstrom |
March 30, 2018 | 70,689 | (3) | $ | 597,322 | — | (4) | $ | — | |||||||||||
| April 5, 2019 | 60,737 | (5) | 513,228 | 27,990 | (6) | 236,516 | ||||||||||||||
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April 7, 2020 | 171,569 | (7) | 1,449,758 | 28,595 | (20) | 241,628 | |||||||||||||
| John Enwright |
March 30, 2018 | 32,987 | (8) | 278,740 | — | (4) | — | |||||||||||||
| April 5, 2019 | 13,804 | (9) | 116,644 | 6,362 | (6) | 53,759 | ||||||||||||||
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April 7, 2020 | 33,701 | (10) | 284,773 | 5,617 | (20) | 47,464 | |||||||||||||
| Daren Hull |
June 29, 2018 | 42,734 | (11) | 361,102 | — | (4) | — | |||||||||||||
| April 5, 2019 | 22,085 | (12) | 186,618 | 10,178 | (6) | 86,004 | ||||||||||||||
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April 7, 2020 | 49,020 | (13) | 414,219 | 8,170 | (20) | 69,037 | |||||||||||||
| Beatrice Mac Cabe |
March 30, 2018 | 32,987 | (14) | 278,740 | — | (4) | — | |||||||||||||
| April 5, 2019 | 17,945 | (15) | 151,635 | 8,270 | (6) | 69,882 | ||||||||||||||
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April 7, 2020 | 39,828 | (16) | 336,547 | 6,638 | (20) | 56,091 | |||||||||||||
| Mary Beth Trypus |
March 30, 2018 | 14,137 | (17) | 119,458 | — | (4) | — | |||||||||||||
| April 5, 2019 | 12,423 | (18) | 104,974 | 5,726 | (6) | 48,385 | ||||||||||||||
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April 7, 2020 | 33,701 | (19) | 284,773 | 5,617 | (20) | 47,464 | |||||||||||||
| (1) | Time-based restricted stock units (TRSUs) vest in three equal annual installments on the first, second and third anniversaries of the grant date. Performance-based restricted stock units (PRSUs) have a three-year cliff-vesting schedule based on continued employment and performance. The performance feature is based on earnings per share growth over the three-year performance period. See “— Potential Payments on Termination or Change in Control” for details of outstanding awards where vesting would be accelerated in the event of death, disability or upon a change in control. |
| (2) | Based on the closing price of $8.45 of the Company’s common shares on January 29, 2021 (the last trading day prior to the end of the fiscal year) as reported by The NASDAQ Stock Market. |
| (3) | Includes 11,782 TRSUs and 58,907 PRSUs granted under the Incentive Plan. The first, second and third installments of the TRSUs vested on March 30, 2019, March 30, 2020 and March 30, 2021, respectively. The PRSUs vested on March 30, 2021. |
| (4) | There are no unearned PRSUs for this award. |
| (5) | Includes 27,990 TRSUs and 32,747 PRSUs granted under the Incentive Plan. The first and second installments of the TRSUs vested on April 5, 2020 and April 5, 2021, respectively. The PRSUs reflect earned shares based upon actual performance to goal. |
| (6) | Includes the number of PRSUs subject to incomplete performance years. The shares are reflected at the maximum payout level, or 200% of target. |
| (7) | Includes 171,569 TRSUs granted under the Incentive Plan. The first installment of the TRSUs vested on April 7, 2021. |
| (8) | Includes 5,498 TRSUs and 27,489 PRSUs granted under the Incentive Plan. The first, second and third installments of the TRSUs vested on March 30, 2019, March 30, 2020 and March 30, 2021, respectively. The PRSUs vested on March 30, 2021. |
| Vera Bradley, Inc. 2021 Proxy Statement | 31 |
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EXECUTIVE COMPENSATION
| (9) | Includes 6,362 TRSUs and 7,442 PRSUs granted under the Incentive Plan. The first and second installments of the TRSUs vested on April 5, 2020 and April 5, 2021, respectively. The PRSUs reflect earned shares based upon actual performance to goal. |
| (10) | Includes 33,701 TRSUs granted under the Incentive Plan. The first installment of the TRSUs vested on April 7, 2021. |
| (11) | Includes 13,059 TRSUs and 29,675 PRSUs granted under the Incentive Plan. The first and second installments of the TRSUs vested on June 29, 2019 and June 29, 2020, respectively. The PRSUs reflect earned shares based upon actual performance to goal. |
| (12) | Includes 10,178 TRSUs and 11,907 PRSUs granted under the Incentive Plan. The first and second installments of the TRSUs vested on April 5, 2020 and April 5, 2021, respectively. The PRSUs reflect earned shares based upon actual performance to goal. |
| (13) | Includes 49,020 TRSUs granted under the Incentive Plan. The first installment of the TRSUs vested on April 7, 2021. |
| (14) | Includes 5,498 TRSUs and 27,489 PRSUs granted under the Incentive Plan. The first, second and third installments of the TRSUs vested on March 30, 2019, March 30, 2020 and March 30, 2021, respectively. The PRSUs vested on March 30, 2021. |
| (15) | Includes 8,270 TRSUs and 9,675 PRSUs granted under the Incentive Plan. The first and second installments of the TRSUs vested on April 5, 2020 and April 5, 2021, respectively. The PRSUs reflect earned shares based upon actual performance to goal. |
| (16) | Includes 39,828 TRSUs granted under the Incentive Plan. The first installment of the TRSUs vested on April 7, 2021. |
| (17) | Includes 2,357 TRSUs and 11,780 PRSUs granted under the Incentive Plan. The first, second and third installments of the TRSUs vested on March 30, 2019, March 30, 2020 and March 30, 2021, respectively. The PRSUs vested on March 30, 2021. |
| (18) | Includes 5,726 TRSUs and 6,697 PRSUs granted under the Incentive Plan. The first and second installments of the TRSUs vested on April 5, 2020 and April 5, 2021, respectively. The PRSUs reflect earned shares based upon actual performance to goal. |
| (19) | Includes 33,701 TRSUs granted under the Incentive Plan. The first installment of the TRSUs vested on April 7, 2021. |
| (20) | Includes the number of PRSUs subject to incomplete performance years. The shares are reflected at the threshold payout level, or 25% of target. |
Option Exercises and Shares Vested
We have no outstanding stock options.
The following table shows the number of restricted stock units which vested for each NEO in fiscal 2021:
| NUMBER OF SHARES OR UNITS ACQUIRED ON VESTING (#) |
NET VALUE REALIZED ON VESTING(1) | |||||||||
| Robert Wallstrom | 97,383 | $ | 400,087 | |||||||
| John Enwright | 31,055 | 129,043 | ||||||||
| Daren Hull | 18,146 | 69,369 | ||||||||
| Beatrice Mac Cabe | 17,689 | 71,416 | ||||||||
| Mary Beth Trypus | 13,274 | 53,655 | ||||||||
| (1) | Computed by multiplying the number of shares vested by the Company’s closing stock price the day prior to the scheduled vesting date(s). |
Aside from our 401(k) plan, we do not maintain any pension plan or arrangement under which our NEOs are entitled to participate or receive post-retirement benefits.
Nonqualified Deferred Compensation
We do not maintain any nonqualified deferred compensation plan or arrangements under which our NEOs are entitled to participate.
| 32 | Vera Bradley, Inc. 2021 Proxy Statement |
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EXECUTIVE COMPENSATION
Potential Payments upon Termination or Change in Control
Severance Benefits. The following table shows the value of cash severance benefits that would have been payable to each of our NEOs under arrangements or contracts described below, as well as the value of equity awards that would vest, assuming a termination of employment as of January 30, 2021. In this table “TRSU” stands for time-based restricted stock units and “PRSU” stands for performance-based restricted stock units.
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TERMINATION BY COMPANY WITHOUT CAUSE/ BY EXECUTIVE FOR GOOD REASON |
TERMINATION BY COMPANY FOR CAUSE/ BY EXECUTIVE WITHOUT GOOD REASON |
CHANGE IN CONTROL TERMINATION |
TERMINATION FOLLOWING DEATH OR DISABILITY(12) |
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| Robert Wallstrom |
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| Cash |
$ | 4,054,500 | (1) | — | $ | 5,754,500 | (2) | $654,500 | (3) | |||||||
| COBRA(4) |
25,403 | — | 25,403 | 25,403 | ||||||||||||
| Value of unvested shares that would be accelerated(5) |
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| - TRSU |
— | — | 1,785,831 | (6) | 1,785,831 | (6) | ||||||||||
| - PRSU |
— | — | 1,859,245 | (7) | 774,476 | (7) | ||||||||||
| Other(11) |
95,625 | 95,625 | 145,625 | 95,625 | ||||||||||||
| John Enwright |
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| Cash |
796,564 | (8) | — | 1,105,800 | (9) | 117,564 | (10) | |||||||||
| COBRA(4) |
16,936 | — | 16,936 | 16,936 | ||||||||||||
| Value of unvested shares that would be accelerated (5) |
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| - TRSU |
— | — | 384,990 | (6) | 384,990 | (6) | ||||||||||
| - PRSU |
— | — | 511,901 | (7) | 295,167 | (7) | ||||||||||
| Other(11) |
18,281 | 18,281 | 48,281 | 18,281 | ||||||||||||
| Daren Hull |
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| Cash |
1,055,813 | (8) | — | 1,436,400 | (9) | 173,813 | (10) | |||||||||
| COBRA(4) |
20,256 | — | 20,256 | 20,256 | ||||||||||||
| Value of unvested shares that would be accelerated (5) |
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| - TRSU |
— | — | 610,572 | (6) | 610,572 | (6) | ||||||||||
| - PRSU |
— | — | 670,516 | (7) | 351,368 | (7) | ||||||||||
| Other(11) |
34,408 | 34,408 | 64,408 | 34,408 | ||||||||||||
| Beatrice Mac Cabe |
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| Cash |
798,419 | (8) | — | 1,120,050 | (9) | 110,669 | (10) | |||||||||
| COBRA(4) |
16,936 | — | 16,936 | 16,936 | ||||||||||||
| Value of unvested shares that would be accelerated (5) |
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| - TRSU |
— | — | 452,886 | (6) | 462,886 | (6) | ||||||||||
| - PRSU |
— | — | 573,341 | (7) | 314,036 | (7) | ||||||||||
| Other(11) |
14,926 | 14,926 | 44,926 | 14,926 | ||||||||||||
| Mary Beth Trypus |
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| Cash |
767,642 | (8) | — | 1,071,600 | (9) | 109,642 | (10) | |||||||||
| COBRA(4) |
— | — | — | — | ||||||||||||
| Value of unvested shares that would be accelerated (5) |
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| - TRSU |
— | — | 353,075 | (6) | 353,075 | (6) | ||||||||||
| - PRSU |
— | — | 370,178 | (7) | 156,131 | (7) | ||||||||||
| Other(11) |
8,315 | 8,315 | 38,315 | 8,315 | ||||||||||||
| (1) | Pursuant to his employment agreement, upon a termination by the Company without cause or by Mr. Wallstrom for good reason, he is entitled to a cash payment equal to any bonus for the prior fiscal year which has been earned but is |
| Vera Bradley, Inc. 2021 Proxy Statement | 33 |
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EXECUTIVE COMPENSATION
| unpaid, a lump sum payment equal to two times the sum of his annual base salary rate plus his target bonus in the year of termination and a pro rata portion of the amount of bonus that he would have received for the year in which his employment terminated. For purposes of this table, the pro rata bonus has been assumed at the actual fiscal 2021 bonus payout. |
| (2) | Pursuant to his employment agreement, upon a termination in anticipation of, upon or within 24 months following a change in control, Mr. Wallstrom is entitled to a cash payment equal to any bonus for the prior fiscal year which has been earned but is unpaid, a lump sum payment equal to three times the sum of his annual base salary rate plus his target bonus in the year of termination and a pro rata portion of the amount of bonus that he would have received for the year in which his employment terminated. For purposes of this table, the pro rata bonus has been assumed at the actual fiscal 2021 bonus payout. |
| (3) | Pursuant to his employment agreement, upon a termination for death or disability, Mr. Wallstrom is entitled to a cash payment equal to any bonus for the current fiscal year which has been earned but is unpaid. For purposes of this table, the current year bonus has been assumed at the actual fiscal 2021 bonus payout. |
| (4) | COBRA continuation coverage reflects monthly payments made by the Company for a period of 18 months in the case of Mr. Wallstrom and 12 months in the case of the other NEOs and is based upon coverage elections in place as of January 30, 2021. This amount assumes the NEO elects COBRA coverage and is eligible to participate in COBRA for the payment period. |
| (5) | Based on the closing price of $8.45 of the Company’s common shares on January 29, 2021 (the last trading day prior to the end of the fiscal year) as reported by The NASDAQ Stock Market. |
| (6) | Figure includes grants of TRSUs which would vest in the event of death, disability or upon a change in control. |
| (7) | Figure includes grants of PRSUs which would vest in the event of death, disability or upon a change in control. For completed performance years, the number of shares reflects earned shares based on actual performance to goal. For incomplete performance years, upon a change in control, the shares above are reflected at target. In the event of death or disability, the grants would be prorated based on the number of full fiscal months in which the executive provided service during the performance period. |
| (8) | Pursuant to the Severance Plan (as described below), upon a termination by the Company without cause or by the executive for good reason, he or she is entitled to a cash payment equal to a pro rata portion of the amount of bonus that he or she would have received for the year in which his or her employment terminated, and a lump sum payment equal to one and one-quarter times the sum of his or her annual base salary rate plus target bonus in the year of termination. For purposes of this table, the pro rata bonus has been assumed at the actual fiscal 2021 bonus payout. |
| (9) | Pursuant to the severance plan, upon a termination in anticipation of, upon or within 24 months following a change in control, the executive is entitled to a cash payment equal to any bonus for the prior fiscal year which has been earned but is unpaid, a lump sum payment equal to one and three-quarters times the sum of his or her annual base salary rate plus target bonus in the year of termination and a payment equal to his or her target bonus in the year of termination prorated for the number of weeks the executive was employed for the fiscal year. |
| (10) | Pursuant to the severance plan, upon a termination for death or disability, the executive or his or her estate is entitled to a cash payment equal to a pro rata portion of the amount of bonus that he or she would have received for the year in which his or her employment terminated. For purposes of this table, the current year bonus has been assumed at the actual fiscal 2021 bonus payout. |
| (11) | Figure includes accrued vacation of 234 hours for Mr. Wallstrom, 98 hours for Mr. Enwright, 142 hours for Mr. Hull, 79 hours for Ms. Mac Cabe and 46 hours for Ms. Trypus. In the event of a change in control, this amount also includes a maximum of $50,000 of outplacement services for Mr. Wallstrom and $30,000 for all other NEOs. |
| (12) | As none of the NEOs met or exceeded the age of 65, the normal retirement age of the Company, as of January 30, 2021, severance benefits due to retirement were excluded. |
SEVERANCE AGREEMENTS AND ARRANGEMENTS
| 34 | Vera Bradley, Inc. 2021 Proxy Statement |
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EXECUTIVE COMPENSATION
| Vera Bradley, Inc. 2021 Proxy Statement | 35 |
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EXECUTIVE COMPENSATION
| 36 | Vera Bradley, Inc. 2021 Proxy Statement |
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EXECUTIVE COMPENSATION
| Vera Bradley, Inc. 2021 Proxy Statement | 37 |
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QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE 2021 ANNUAL MEETING OF SHAREHOLDERS
| Vera Bradley, Inc. 2021 Proxy Statement | 39 |
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QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE 2021 ANNUAL MEETING OF SHAREHOLDERS
| 40 | Vera Bradley, Inc. 2021 Proxy Statement |
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SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership of our common shares as of April 1, 2021 for the following individuals:
| v | each person known to us to own beneficially more than 5% of our outstanding common shares; |
| v | each of our executive officers named in the summary compensation table; |
| v | each of our directors; and |
| v | all of our executive officers and directors as a group. |
Beneficial ownership is determined in accordance with the rules of the SEC and generally means the power to vote or to direct disposition. Except as described below, in computing the number of shares beneficially owned by a person and the percentage ownership of that person, common shares subject to options or warrants held by that person that were currently exercisable or exercisable within 60 days of April 1, 2021, are deemed outstanding but are not deemed outstanding for computing the percentage ownership of any other person. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to such securities. All of the shares reflected in the table are common shares.
Percentage of beneficial ownership is based on 33,615,340 common shares outstanding as of April 1, 2021. Unless otherwise indicated, the address of each beneficial owner listed below is c/o Vera Bradley, Inc., 12420 Stonebridge Road, Roanoke, Indiana 46783.
|
|
COMMON SHARES BENEFICIALLY OWNED |
|||||||
| NAME OF BENEFICIAL OWNER |
SHARES | % | ||||||
| 5% Beneficial Owners |
||||||||
| Blackrock, Inc.(1) |
3,779,155 | 11.2% | ||||||
| Patricia R. Miller(2) |
3,438,658 | 10.2% | ||||||
| Michael C. Ray(3)(4) |
2,680,477 | 8.0% | ||||||
| Anne-Marie Ray(3)(5) |
2,680,477 | 8.0% | ||||||
| James B. Byrne(3)(6) |
2,675,347 | 8.0% | ||||||
| Thomas F. Byrne II(3)(7) |
2,675,347 | 8.0% | ||||||
| Joan B. Hall(3)(8) |
2,675,044 | 8.0% | ||||||
| Dimensional Fund Advisors LP(9) |
2,629,978 | 7.8% | ||||||
| Senvest(10) |
1,850,000 | 5.5% | ||||||
| Directors and Executive Officers |
||||||||
| Robert Wallstrom |
268,555 | * | ||||||
| Barbara Bradley Baekgaard |
28,636 | * | ||||||
| P. Michael Miller(2) |
3,438,658 | 10.2% | ||||||
| Robert J. Hall(3)(11) |
2,773,970 | 8.3% | ||||||
| John E. Kyees |
81,208 | * | ||||||
| Frances P. Philip |
57,217 | * | ||||||
| Edward M. Schmults |
51,509 | * | ||||||
| Mary Lou Kelley |
48,765 | * | ||||||
| Kristina Cashman |
— | * | ||||||
| Carrie M. Tharp |
— | * | ||||||
| Nancy R. Twine |
— | * | ||||||
| John Enwright |
48,487 | * | ||||||
| Daren Hull |
37,335 | * | ||||||
| Beatrice Mac Cabe |
55,769 | * | ||||||
| Mary Beth Trypus |
30,495 | * | ||||||
| Directors and Executive Officers as a Group (17 persons) |
7,008,863 | 20.9% | ||||||
| Vera Bradley, Inc. 2021 Proxy Statement | 41 |
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SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
| * | Represents beneficial ownership of less than one percent of the outstanding common shares. |
| (1) | Information contained in the columns above and this footnote is based on a report on Schedule 13G/A filed with the SEC on January 27, 2021 by BlackRock, Inc. Various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, these shares. The principal place of business for BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055. |
| (2) | P. Michael Miller and Patricia R. Miller are husband and wife. Collectively, they beneficially owned an aggregate of 3,438,658 common shares as of April 1, 2021. Of these shares 1,500,000 shares were held by the Miller Marital Trust of which Mrs. Miller is the trustee; 1,421,811 shares were held by Patricia R. Miller; 404,369 shares were held by the Patricia R. Miller 2020 Annuity Trust of which Mr. Miller is the trustee; and 112,478 shares were held by P. Michael Miller. |
| (3) | Michael C. Ray, Anne-Marie Ray, James B. Byrne, Thomas F. Byrne II, Robert J. Hall and Joan B. Hall, each of whom is related by blood or marriage to Barbara Bradley Baekgaard, share voting and investment power with regard to 2,276,867 shares held by the Barbara B. Baekgaard 2009 Grantor Retained Annuity Trust (the “Baekgaard Trust”) and 31,358 shares held by the Barbara Bradley Baekgaard Family Foundation, a trust from which distributions are made exclusively to charitable organizations (the “Foundation”). In the aggregate, Michael C. Ray, Anne-Marie Ray, James B. Byrne, Thomas F. Byrne II, Robert J. Hall and Joan B. Hall beneficially owned 3,880,466 shares as of April 1, 2021. |
| (4) | Represents 2,276,867 shares held by the Baekgaard Trust; 34,065 and 338,187 shares held by the Anne-Marie Ray 2017 Grantor Retained Annuity Trust #1 and the Anne-Marie Ray Revocable Trust, respectively (collectively the “Anne-Marie Trusts”), of which Mr. Ray’s spouse is the sole trustee; and 31,358 shares held by the Foundation, of which Mr. Ray’s spouse is a trustee. |
| (5) | Represents 2,276,867 shares held by the Baekgaard Trust; 372,252 shares held by the Anne-Marie Trusts, of which Mrs. Ray is the sole trustee; and 31,358 shares held by the Foundation, of which Mrs. Ray is a trustee. |
| (6) | Represents 2,276,867 shares held by the Baekgaard Trust; 31,358 shares held by the Foundation, of which Mr. Byrne is a trustee; and 34,065 and 333,057 shares held by the James B. Byrne 2017 Grantor Retained Annuity Trust #1 and James Bradley Byrne Revocable Trust, respectively, of which Mr. Byrne is the sole trustee. |
| (7) | Represents 2,276,867 shares held by the Baekgaard Trust; 31,358 shares held by the Foundation, of which Mr. Byrne is a trustee; and 34,065 and 333,057 shares held by the Thomas F. Byrne II 2017 Grantor Retained Annuity Trust #1 and Thomas F. Byrne II Revocable Trust, respectively, of which Mr. Byrne is the sole trustee. |
| (8) | Represents 2,276,867 shares held by the Baekgaard Trust; 31,358 shares held by the Foundation, of which Mrs. Hall is a trustee; and 34,065 and 332,754 shares held by the Joan Byrne Hall 2017 Grantor Retained Annuity Trust #1 and Joan Byrne Hall Revocable Trust, respectively (collectively the “Joan Byrne Hall Trusts”) of which Mrs. Hall is the sole trustee. |
| (9) | Information contained in the columns above and this footnote is based on a report on Schedule 13G/A filed with the SEC on February 12, 2021 by Dimensional Fund Advisors LP. Various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, these shares. The principal place of business for Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, Texas 78746. |
| (10) | Information contained in the columns above and this footnote is based on a report on Schedule 13G filed with the SEC on January 7, 2021 by Senvest Management, LLC. Various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, these shares. The principal place of business for Senvest Management, LLC is 540 Madison Avenue, 32nd Floor, New York, New York 10022. |
| (11) | Represents 98,926 shares held by Robert J. Hall; 2,276,867 shares held by the Baekgaard Trust; 366,819 shares held by the Joan Byrne Hall Trusts, of which Mr. Hall’s spouse is the sole trustee; and 31,358 shares held by the Foundation, of which Mr. Hall’s spouse is a trustee. |
| 42 | Vera Bradley, Inc. 2021 Proxy Statement |
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APPENDIX A
| A-2 | Vera Bradley, Inc. 2021 Proxy Statement |