Wingstop Inc PRE 14A, filed Apr 14, 2020
Wingstop Inc. (WING)
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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 ☐
Check the appropriate box:
| ☒ | Preliminary Proxy Statement | |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| ☐ | Definitive Proxy Statement | |
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material Pursuant to §240.14a-12 | |
WINGSTOP 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):
| ☒ | No fee required. | |||
| ☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
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| (2) | Aggregate number of securities to which transaction applies:
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| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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| (4) | Proposed maximum aggregate value of transaction:
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| ☐ | Fee paid previously with preliminary materials. | |||
| ☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
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LETTER TO OUR STOCKHOLDERS
, 2020
Dear Stockholder:
We cordially invite you to attend the 2020 Annual Meeting of Stockholders of Wingstop Inc. to be held on Monday, June 8, 2020, at 10:00 a.m. central time. We will be holding the Annual Meeting virtually via the Internet to do our part to avoid the spread of coronavirus, or COVID-19, and maximize your ability to participate in the meeting despite the unprecedented challenges of the global pandemic we are all facing. We believe that our delivery and carryout business model positions us to continue to serve our communities as we all navigate this difficult situation, and we will continue to implement protocols as we strive to protect our employees and customers.
Enclosed are the Notice of Annual Meeting of Stockholders and Proxy Statement, which describe the business that will be acted upon at the meeting, as well as our 2019 Annual Report, which includes our audited financial statements.
For your convenience, we will take advantage of the Securities and Exchange Commission rule allowing companies to furnish proxy materials to stockholders over the Internet. We believe that this e-proxy process expedites stockholders’ receipt of proxy materials while also lowering the costs and reducing the environmental impact of our Annual Meeting. On or about , 2020, we began mailing a Notice of Internet Availability of Proxy Materials containing instructions on how to access our Proxy Statement and 2019 Annual Report and how to vote over the Internet or how to request and return a proxy card by mail. For information on how to vote your shares, please refer to the Notice of Internet Availability of Proxy Materials, proxy materials email, or proxy card you receive to assure that your shares will be represented and voted at the Annual Meeting even if you cannot attend. Copies of the Notice of Internet Availability of Proxy Materials, Proxy Statement, and 2019 Annual Report are available at www.proxydocs.com/WING.
Your vote is important. Even if you plan to attend the virtual meeting, please follow the instructions provided to you and vote your shares today. This will not prevent you from voting your shares during the virtual meeting if you are able to attend.
On behalf of your Board of Directors, thank you for your continued support of and interest in Wingstop.
Sincerely,
Charles R. Morrison
Chairman and Chief Executive Officer
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WINGSTOP INC.
5501 LBJ Freeway, 5th Floor,
Dallas, Texas 75240
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 8, 2020
| Time: | 10:00 a.m. central time | |||
| Date: | June 8, 2020 | |||
| Virtual Meeting Site*: | www.proxydocs.com/WING | |||
| Record Date: | Stockholders of record at the close of business on April 13, 2020 are entitled to notice of and to vote at the Annual Meeting or any adjournments, postponements, or recesses thereof. | |||
| Purpose: | (1) | Elect two Class II directors nominated by the Board of Directors for a term that expires at the 2023 Annual Meeting of Stockholders; | ||
| (2) | Ratify the appointment of KPMG LLP as our independent registered public accounting firm for fiscal year 2020; | |||
| (3) | Approve, on an advisory basis, the compensation of our named executive officers; | |||
| (4) | Approve amendments to our Certificate of Incorporation to remove provisions that provide favorable rights to RC II WS LLC that are no longer applicable; and | |||
| (5) | Consider and act upon such other business as may properly come before the Annual Meeting or any adjournments, postponements, or recesses thereof. | |||
| Stockholders Register: | A list of the stockholders entitled to vote at the Annual Meeting may be examined during regular business hours at our executive offices, 5501 LBJ Freeway, 5th Floor, Dallas, Texas 75240, during the ten-day period preceding the meeting. To access this list during the Annual Meeting, please visit www.proxydocs.com/WING. | |||
| Voting: | Your vote is important. Whether or not you plan to attend the Annual Meeting, we encourage you to read this Proxy Statement and submit your proxy or voting instructions as soon as possible. Please vote by telephone or electronically through the Internet or, if you requested a proxy card via mail, sign, date, and return the proxy card in the enclosed business reply envelope, to ensure your representation at the Annual Meeting. | |||
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON JUNE 8, 2020
This notice and the accompanying Proxy Statement, proxy card and 2019 Annual Report are available at www.proxydocs.com/WING.
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| * | In light of the coronavirus, or COVID-19, outbreak, for the safety of all of our people, including our stockholders, and taking into account recent federal, state and local guidance that has been issued, we have determined that the Annual Meeting will be held in a virtual meeting format only, via the Internet, with no physical in-person meeting. If you plan to participate in the virtual meeting, please see “Proxy Statement Summary—Virtual Annual Meeting of Stockholders” for more detailed information. Stockholders will be able to attend the Annual Meeting and vote from any location via the Internet. |
By order of the Board of Directors,
Albert G. McGrath
Senior Vice President, General Counsel & Secretary
, 2020
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Preliminary Copy
| PROXY STATEMENT SUMMARY |
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WINGSTOP INC. 5501 LBJ Freeway, 5th Floor, Dallas, Texas 75240 |
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider in making a voting decision, and you should read the entire Proxy Statement carefully before voting. Unless the context indicates otherwise, references to “Wingstop,” “we,” “our,” “us,” or the “Company” are to Wingstop Inc. and its consolidated subsidiaries. References to the “Board” or the “Board of Directors” are to the Board of Directors of Wingstop Inc.
Annual Meeting Information
| Time and Date: | June 8, 2020 at 10:00 a.m. central time | |
| Virtual Meeting Site*: | www.proxydocs.com/WING | |
| Record Date: | April 13, 2020 | |
| Proxy Materials Distribution Date:
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On or around , 2020 | |
| * | In light of the coronavirus, or COVID-19, outbreak, for the safety of all of our people, including our stockholders, and taking into account recent federal, state and local guidance that has been issued, we have determined that the Annual Meeting will be held in a virtual meeting format only, via the Internet, with no physical in-person meeting. If you plan to participate in the virtual meeting, please see “Proxy Statement Summary—Virtual Annual Meeting of Stockholders” for more detailed information. Stockholders will be able to attend the Annual Meeting and vote from any location via the Internet. |
Items of Business and Voting Recommendations
| Agenda Items | Board’s Voting Recommendation |
Page Reference (for more detail) | |||||
| 1. Election of two Class II directors (the “Director Election Proposal”)* |
FOR the election of each director nominee | 1 | |||||
| 2. Ratification of the appointment of KPMG LLP (the “Auditor Ratification Proposal”) |
FOR | 30 | |||||
| 3. Approval, on an advisory basis, of named executive officer compensation (the “Say-on-Pay Proposal”) |
FOR | 33 | |||||
| 4. Approval of amendments to our Certificate of Incorporation (the “Charter”) to remove provisions that provide favorable rights to RC II WS LLC (“RC II WS”) that are no longer applicable (the “Charter Amendment Proposal”) |
FOR | 34 | |||||
| * | Pursuant to our Corporate Governance Guidelines, each of the director nominees has tendered an irrevocable resignation that becomes effective if (i) such nominee fails to receive more “FOR” votes than “WITHHELD” votes in an uncontested election of directors at an annual meeting and (ii) the Board accepts such resignation. For additional information concerning this policy, see “Proposal 1—Election of Directors—Vote Required; Director Resignation Policy for Failure to Receive Majority Vote in Election” beginning on page 8. |
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WINGSTOP INC. 2020 PROXY STATEMENT | 1 |
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PROXY STATEMENT SUMMARY
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HIGHLIGHTS FOR THE FISCAL YEAR 2019
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Highlights of Wingstop’s performance during fiscal year 2019 include, among other things:
| (1) | Percentage of domestic restaurants with delivery as of December 28, 2019. |
Recent Corporate Governance Highlights
Recent highlights of enhancements to Wingstop’s corporate governance practices include, among other things:
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PROXY STATEMENT SUMMARY
Compensation Best Practices
The table below summarizes the Company’s key executive compensation practices, including practices the Company has implemented that the Compensation Committee believes will help to drive corporate performance, as well as those practices that the Company has chosen not to implement because the Company believes they do not serve its stockholders’ interests.
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What We Do
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What We DON’T Do
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✓ |
Pay for performance. Tie pay to performance by ensuring that a significant portion of executive compensation is performance-based and at-risk. |
O |
Repricing. Stock option exercise prices are set equal to the grant date fair market value and may not be repriced, except for certain adjustments that may be made in connection with extraordinary transactions, such as dividend equivalency adjustments. | |||
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✓ |
Performance metrics tied to Company performance. The performance metrics for our performance-based cash bonus plan and performance-based equity awards are tied to the Company’s performance, aligning executive and stockholder interests. We believe that cash-based performance compensation emphasizes pay-for-performance and rewards our executives for achieving performance goals, while equity-based performance compensation emphasizes the Company’s long-term performance and further aligns the interests of our executives with those of our stockholders. |
O |
Excess golden parachute agreements. The termination benefits payable to our senior officers, other than our Chief Executive Officer, under our Executive Severance Plan generally range from only 1.0 to 2.0 times base salary and target bonus, and the termination benefits payable to our Chief Executive Officer under his employment agreement generally range from only 2.0 to 2.5 times base salary and target bonus. | |||
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✓ |
Robust stock ownership and retention guidelines. Our stock ownership and retention policy has guidelines requiring our Chief Executive Officer to own five (5) times his annual base salary in common stock or common stock derivatives and our executive vice presidents and senior vice presidents to own three (3) and two (2) times their annual base salary in common stock or common stock derivatives, respectively. |
O |
Tax gross-ups. Our equity award agreements and our Chief Executive Officer’s employment agreement do not provide for excise tax gross-ups. | |||
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✓ |
Clawback policy. Our incentive-based compensation recoupment policy provides that, if we are required to prepare an accounting restatement due to our material noncompliance with any financial reporting requirement under the federal securities laws, we may seek to recover any payment received by any current or former executive officer made in settlement of an equity or incentive award during the three-year period preceding the accounting restatement. The amount to be recovered will be based on the excess of the amount paid under the award over the amount that would have been paid under the award if the financial statements had been correct. |
O |
Share Recycling. We do not recycle shares withheld for taxes, shares settled in cash, or other liberal share-counting features. | |||
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✓ |
Independent compensation consultant. The Compensation Committee uses Frederic W. Cook & Co. (“FW Cook”), an independent compensation consultant, to assist in designing its compensation policies. |
O |
Hedging or pledging shares. Our insider trading compliance policy prohibits our directors and named executive officers from any hedging or pledging of Company securities. | |||
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✓ |
Listen to our Stockholders. We hold an advisory vote on executive compensation annually and actively review the results of these votes when we make compensation decisions. In 2019, our stockholders voiced substantial support for our 2018 executive compensation plans and programs, with over 98.5% of stockholders that voted at our annual meeting casting votes in favor of approving our executive compensation practices. |
O |
Perquisites. We do not provide our executives with perquisites that differ materially from those available to employees generally. | |||
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WINGSTOP INC. 2020 PROXY STATEMENT | 3 |
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PROXY STATEMENT SUMMARY
Proposal 1—Director Election Proposal
Director Nominees
The Board of Directors is asking you to elect the two nominees named below as Class II directors for terms that expire at the 2023 annual meeting of stockholders. The following table provides summary information about the two director nominees. For more information about the director nominees, see page 9.
| Name
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Occupation
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Experience/Qualifications
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Independence
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Board Positions and Committees
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End of
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Lynn Crump-Caine |
Founder and Chief Executive Officer of OutsideIn Consulting
Former Executive Vice President of the Worldwide Operations for McDonald’s Corporation
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Corporate Governance, Diversity, Executive Management, International, Marketing, Operations, Restaurant Industry, Risk Management, Strategy |
Independent |
Lead Independent
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FY 2023 |
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Wesley S. McDonald |
Retired
Former Principal Officer, Chief Financial Officer of Kohl’s Corporation |
Corporate Governance, Executive Management, Financial & Accounting, Operations, Retail Industry, Risk Management, Strategy |
Independent |
Audit Committee
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FY 2023 |
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Vote Required
The election of the director nominees will be determined by a plurality of the votes cast at the 2020 Annual Meeting of Stockholders (the “Annual Meeting”). However, pursuant to our Corporate Governance Guidelines, each of the director nominees has tendered an irrevocable resignation that becomes effective if such nominee fails to receive more “FOR” votes than “WITHHELD” votes in an uncontested election of directors at an annual meeting and the Board accepts such resignation. For additional information concerning this policy, see “Proposal 1—Election of Directors—Vote Required; Director Resignation Policy for Failure to Receive Majority Vote in Election” beginning on page 8.
Proposal 2—Auditor Ratification Proposal
Auditor Ratification
The Board is asking you to ratify the selection of KPMG LLP (“KPMG”) as our independent registered public accounting firm for the fiscal year ending December 26, 2020. On March 6, 2019, the Audit Committee approved the dismissal of Ernst & Young LLP (“E&Y”), which had served as our independent registered public accounting firm since 2014, and approved the appointment of KPMG. This change in auditors was not the result of disagreements with E&Y with respect to accounting principles, financial statement disclosures, or auditing scope or procedures. For additional information concerning our change in auditors, see “Proposal 2—Ratification of the Appointment of the Independent Registered Public Accounting Firm” beginning on page 30. Also, set forth on page 32 is summary information with respect to the fees for services provided to us by KPMG during the fiscal years ended December 28, 2019 and December 29, 2018.
Vote Required
The approval of the Auditor Ratification Proposal requires the affirmative vote of the holders of a majority in voting power of the shares of our common stock that are present in person or by proxy and entitled to vote at the Annual Meeting. Virtual attendance at the Annual Meeting constitutes presence in person for purposes of the vote required.
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PROXY STATEMENT SUMMARY
Proposal 3—Say-on-Pay Proposal
Say-on-Pay
Pursuant to Section 14A(a)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are asking our stockholders to approve, on an advisory or non-binding basis, the compensation of our named executive officers as disclosed in this Proxy Statement. For a detailed description of our executive compensation program, see “Compensation Discussion and Analysis” beginning on page 38.
Vote Required
The approval of the Say-on-Pay Proposal requires the affirmative vote of the holders of a majority in voting power of the shares of our common stock that are present in person or by proxy and entitled to vote at the Annual Meeting. Virtual attendance at the Annual Meeting constitutes presence in person for purposes of the vote required.
Proposal 4—Charter Amendment Proposal
Charter Amendments
The Board is asking you to approve certain amendments to the Charter to remove the provisions that grant favorable rights to RC II WS, an affiliate of Roark Capital Management, LLC and our former majority stockholder, as these provisions are no longer applicable. The proposed amendments to the Charter will not impact your rights as a holder of our common stock. The Board of Directors believes that approving these amendments will benefit the Company by making the rights of all of our stockholders identical. In addition, the Board believes that without these amendments, RC II WS or its affiliates could reacquire a majority of our common stock and utilize these rights to exercise a disproportionate amount of control over us and our Board of Directors compared to other stockholders, which would materially limit your rights as a stockholder. For additional information regarding the proposed Charter amendments, see “Proposal 4—Approval of Charter Amendments” beginning on page 34. The full text of the Charter amendments is set forth on Appendix A to this Proxy Statement.
Vote Required
The approval of the Charter Amendment Proposal requires the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the outstanding shares of our common stock entitled to vote at the Annual Meeting.
Voting Procedures
Voting Rights of the Stockholders
Each share of our common stock is entitled to one vote on each matter to be acted upon at the Annual Meeting. Our stockholders are not entitled to cumulative voting rights, and dissenters’ rights are not applicable to the matters being voted upon at the Annual Meeting.
Only owners of record of shares of common stock at the close of business on April 13, 2020, the record date, are entitled to vote at the Annual Meeting, or at any adjournments, postponements, or recesses thereof. There were 29,583,394 shares of common stock issued and outstanding on the record date.
With respect to each of the proposals to be acted upon at the Annual Meeting, you may vote as follows:
| • | Director Election Proposal: “FOR” each of the nominees, “WITHHOLD” from each of the nominees, “FOR” individual nominees, or “WITHHOLD” from individual nominees; |
| • | Auditor Ratification Proposal: “FOR,” “AGAINST,” or “ABSTAIN”; |
| • | Say-on-Pay Proposal: “FOR,” “AGAINST,” or “ABSTAIN”; and |
| • | Charter Amendment Proposal: “FOR,” “AGAINST,” or “ABSTAIN.” |
All properly executed written proxies, and all properly completed proxies submitted by the Internet or telephone, that are delivered pursuant to this solicitation will be voted at the Annual Meeting in accordance with the directions given in the proxy, unless the proxy is revoked prior to completion of the voting at the Annual Meeting.
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PROXY STATEMENT SUMMARY
Quorum
The presence, in person, by a duly authorized representative in the case of a corporation or other legal entity, or through representation by proxy, of the holders of a majority of the combined voting power of the issued and outstanding shares of common stock entitled to vote at the Annual Meeting (including abstentions and broker non-votes) is necessary to constitute a quorum to transact business at the Annual Meeting. Virtual attendance at the Annual Meeting constitutes presence in person for purposes of a quorum at the meeting.
Effect of Votes Withheld, Abstentions and Broker Non-Votes
Abstentions and broker non-votes withheld are included in the number of shares of common stock present for determining a quorum for all proposals.
The election of directors will be determined by a plurality of votes cast. As a result, votes withheld will have no impact with respect to the election of directors, except that pursuant to our Corporate Governance Guidelines, each of the director nominees has tendered an irrevocable resignation that becomes effective if (i) such nominee fails to receive more “FOR” votes than “WITHHELD” votes in an uncontested election of directors at an annual meeting and (ii) the Board accepts such resignation. For additional information concerning this policy, see “Proposal 1—Election of Directors—Vote Required; Director Resignation Policy for Failure to Receive Majority Vote in Election” beginning on page 8.
Pursuant to our Bylaws, except as otherwise required by applicable law or regulation or by the Charter, all matters other than the election of directors are determined by the affirmative vote of the holders of a majority in voting power of the shares of our common stock that are present in person or by proxy and entitled to vote at the Annual Meeting. Pursuant to the Charter, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the outstanding shares of our common stock entitled to vote at the Annual Meeting is required to approve the Charter Amendment Proposal. An abstention is not an “affirmative vote,” but an abstaining stockholder is considered “entitled to vote” at the Annual Meeting. Accordingly, an abstention will have the effect of a vote against the Auditor Ratification Proposal, the Say-on-Pay Proposal and the Charter Amendment Proposal, as applicable.
Under applicable stock exchange rules, brokers who hold shares on behalf of beneficial owners have the authority to vote on certain proposals when they have not received instructions from the beneficial owners. A broker non-vote occurs when a broker holding shares for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power with respect to that item under applicable stock exchange rules and has not received voting instructions from the beneficial owner.
Your broker does not have discretionary authority to vote your common stock with respect to the Director Election Proposal or the Say-on-Pay Proposal in the absence of specific instructions from you. Where a broker does not have discretionary authority to vote your common stock, such broker is not considered “entitled to vote” with respect to a particular proposal at the Annual Meeting. Accordingly, a broker non-vote will have no effect on the Director Election Proposal or the Say-on-Pay Proposal. Broker non-votes are not applicable to the Auditor Ratification Proposal and the Charter Amendment Proposal because your broker has discretionary authority to vote your common stock with respect to such proposals.
Revocability of Proxy
Your proxy is revocable at any time before the polls close at the Annual Meeting. If you wish to revoke your proxy and change your vote, you may:
| • | vote again by the Internet or by telephone, if available, prior to the start of the Annual Meeting; |
| • | give written notice to our Corporate Secretary prior to the start of the Annual Meeting that you wish to revoke your proxy and change your vote; or |
| • | vote online during the Annual Meeting. |
Virtual Annual Meeting of Stockholders
This year’s Annual Meeting will be completely virtual and will be conducted via live webcast. You are entitled to participate in the Annual Meeting only if you were a stockholder as of the Record Date or if you hold a valid proxy for the Annual
| 6 | WINGSTOP INC. 2020 PROXY STATEMENT |
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PROXY STATEMENT SUMMARY
Meeting. You will be able to participate in the Annual Meeting online and submit your questions prior to the meeting by visiting www.proxydocs.com/WING. You also will be able to vote your shares electronically at the Annual Meeting.
In order to attend the virtual Annual Meeting, you must register in advance at www.proxydocs.com/WING prior to the deadline of June 4, 2020 at 5:00 p.m. Eastern Time. The control number located in the shaded gray box of your proxy card and/or voting authorization form will be required to register. Upon completing your registration, you will receive further instructions via email, including your unique link that will allow you access to the meeting, and you will have the ability to submit questions prior to the Annual Meeting. Please be sure to follow the instructions found on your proxy card and/or voting authorization form and subsequent instructions that will be delivered to you via email.
You can submit questions electronically prior to the Annual Meeting. During the Q&A session of the meeting, members of our management will answer the questions that were submitted in advance of the meeting, as time permits. To ensure the Annual Meeting is conducted in a manner that is fair to all stockholders, we reserve the right, in our sole discretion, to edit or reject questions we deem profane, repetitive, not relevant to the business of the Company, or otherwise inappropriate.
2021 Annual Meeting of Stockholders
Stockholder proposals submitted for inclusion in the proxy statement for our annual meeting of stockholders expected to be held in May 2021 pursuant to SEC Rule 14a-8 must be received by us by , 2020. Director nominations or other business to be brought before the 2021 Annual Meeting of Stockholders by a stockholder, other than Rule 14a-8 proposals described above, must be received by us between February 8, 2021 and March 10, 2021. For more information, see “Next Annual Meeting—Stockholder Proposals” on page 68.
Solicitation Matters
Proxies are being solicited by the Board of Directors on behalf of the Company. We have hired Innisfree M&A Inc. (“Innisfree”) to provide us with consulting and analytic services and solicitation services for banks, brokers, institutional investors, and individual shareholders. Innisfree’s annual fee for these services is $17,500, plus reimbursement of reasonable out-of-pocket expenses. We have agreed to indemnify Innisfree against certain liabilities and expenses, including liabilities under the federal securities laws.
Our officers, directors, and employees may also solicit proxies personally or in writing, by telephone, e-mail, or otherwise. These officers and employees will not receive additional compensation but will be reimbursed for out-of-pocket expenses. Brokerage houses and other custodians, nominees, and fiduciaries, in connection with shares of the common stock registered in their names, will be asked to forward solicitation material to the beneficial owners of shares of common stock. We will reimburse brokerage houses and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding solicitation materials and collecting voting instructions.
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WINGSTOP INC. 2020 PROXY STATEMENT | 7 |
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PROPOSAL 1—ELECTION OF DIRECTORS
Continuing Directors with Terms Expiring at the 2021 or 2022 Annual Meetings
The directors listed below will continue in office for the remainder of their terms and until their respective successor is duly elected and qualified or until their earlier death, resignation, or removal.
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PROPOSAL 1—ELECTION OF DIRECTORS
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PROPOSAL 1—ELECTION OF DIRECTORS
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Board Composition and Director Independence
The following table provides information about each director currently serving on our Board of Directors, including the director nominees.
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Committee Membership | ||||||||||||||
| Name
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Independent
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Director
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Director Class
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Audit
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Compensation
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Nominating
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| Lynn Crump-Caine
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✓
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2017 | Class II (2020)
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| Krishnan (Kandy) Anand |
✓
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2018 | Class I (2022)
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✓
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✓
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| David L. Goebel |
✓
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2017 | Class I (2022)
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✓
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✓
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| Michael J. Hislop |
✓
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2011 | Class I (2022)
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✓
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| Kate S. Lavelle
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✓
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2019 | Class III (2021)
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✓
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| Kilandigalu (Kay) M. Madati |
✓
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2017 | Class III (2021)
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✓
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✓
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| Wesley S. McDonald
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✓
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2016 | Class II (2020)
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✓
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| Charlie R. Morrison |
2012 | Class III (2021)
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Lead Independent Director |
Audit Committee Financial Expert |
Chair |
✓ Member |
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CORPORATE GOVERNANCE
Director Skills and Experience
Our Nominating and Corporate Governance Committee regularly evaluates the skills, qualifications, and competencies identified as important for directors to provide effective oversight to our Company. The matrix bellow shows the areas of experience and expertise that our Nominating and Corporate Governance Committee have identified that our directors bring to the Board.
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| Corporate Governance experience supports our goals of strong accountability, transparency, and shareholder-value protection
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✓
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✓
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✓
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✓
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✓
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✓
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✓
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✓
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||||||||||||
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Diversity is an important value that enhances the Board’s decision making
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✓
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✓
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✓
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✓
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Executive Management experience is important for leadership ability and talent development
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✓
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✓
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✓
(CEO) |
✓
(CEO) |
✓
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✓
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✓
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✓
(CEO) |
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Financial & Accounting experience is important for overseeing our financial reporting and internal controls and for evaluating our capital structure
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✓
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✓
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✓
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✓
(CFO) |
✓
(CFO) |
✓
(CFO) |
||||||||||||||
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International experience is valuable as the Company continues to extend its presence outside the U.S.
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✓
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✓
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✓
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✓
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✓
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Marketing experience is important in maintaining brand relevance and consumer engagement
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✓
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✓
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✓
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✓
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✓
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Operations experience is important for ensuring best practices and executing initiatives
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
|||||||||||||
|
Restaurant Industry experience is important because it is the Company’s core business |
✓
|
✓
|
✓
|
✓
|
✓
|
|||||||||||||||
|
Retail Industry experience is relevant for understanding
consumer behavior |
✓
|
✓
|
✓
|
✓
|
✓
|
|||||||||||||||
|
Risk Management experience is important for overseeing risks facing the Company
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
|||||||||||||
|
Strategy is especially important for competing in a dynamic market
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
||||||||||||
|
Technology experience is important for enhancing consumer experience and internal operations
|
✓
|
✓
|
✓
|
|||||||||||||||||
| 14 | WINGSTOP INC. 2020 PROXY STATEMENT |
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CORPORATE GOVERNANCE
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| 16 | WINGSTOP INC. 2020 PROXY STATEMENT |
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| 18 | WINGSTOP INC. 2020 PROXY STATEMENT |
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WINGSTOP INC. 2020 PROXY STATEMENT | 19 |
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CORPORATE GOVERNANCE
Stock Ownership and Retention Guidelines for Directors and Officers
In 2017, we adopted meaningful stock ownership and retention guidelines that apply to our directors and officers, which provide that each officer must own a multiple of annual base salary in our common stock or qualifying derivatives and each independent director must own a multiple of the annual cash director retainer in our common stock or qualifying derivatives. In March 2020, we amended our stock ownership and retention guidelines to increase the stock ownership requirement for our executive vice presidents from two (2) to three (3) times their annual base salary. The following table summarizes the requirements of our stock ownership and retention guidelines, as amended:
| Title
|
Stock Ownership Requirement
| |
| Chief Executive Officer
|
Five (5) times annual base salary
| |
| Independent Director
|
Four (4) times annual cash director retainer
| |
| Executive Vice Presidents
|
Three (3) times annual base salary
| |
| Senior Vice Presidents
|
Two (2) times annual base salary
| |
| Vice President
|
One (1) times annual base salary
| |
| 20 | WINGSTOP INC. 2020 PROXY STATEMENT |
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CORPORATE GOVERNANCE
Corporate Social Responsibility—The Wingstop Way
| At Wingstop, our mission is “To Serve the World Flavor.” It is a mission that we undertake quite literally with our 11 bold, distinctive flavors of chicken wings. Wingstop also believes that it is its responsibility to provide value to all of our stakeholders, including our guests, team members and brand partners, shareholders, supplier partners and the communities in which we do business.
Our corporate social responsibility platform is an integral part of our business and reflects our Company culture by embodying our core values of being Service Minded, Authentic, Fun, and Entrepreneurial.
The Nominating and Corporate Governance Committee periodically reviews and assess the Company’s sustainability, environmental, and social responsibility policies, goals and initiatives and makes recommendations to the Board as appropriate based on such review and assessment. |
|
|
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CORPORATE GOVERNANCE
Our goal is to fulfill our social and environmental responsibilities in many ways, including by adhering to the beliefs set forth below.
|
Focus Area
|
What We Believe and Do
| |
|
Shareholders |
We believe in demonstrating that we are a responsible and ethical steward of shareholder interest by conducting our business based on our code of business conduct and ethics, which emphasizes conducting all business relationships with honesty, integrity, and respect. We value diversity and inclusion in all its forms, including diversity of thought and embracing healthy conflict to arrive at thoughtful business decisions that are good for our bottom line and consistent with our core values.
| |
|
Guests |
We believe in serving our guests flavor through a high-quality product with a great guest experience. We take food safety very seriously and have robust cooking and cleaning procedures in place to ensure the highest standards of food quality are met for the safety of our guests and team members. We listen and respond to our guests through a variety of feedback channels, including survey, social, and online review platforms. This feedback loop helps us stay connected to our guests and understand the macro areas that are important to them, as well as retain them in the event an experience was not optimal. Leveraging our CRM platform, we seek to continuously provide personalized communication and content that speaks to the guest and their needs in a relevant and timely manner.
| |
|
Team Members & Brand Partners |
We believe in fostering an inclusive and diverse work environment that is intended to enable all of our team members to achieve goals and contribute. Wingstop has a highly engaged workforce that far exceeds the industry average as measured by a third-party benchmarking survey. Since our initial public offering in 2015, we, together with our brand partners, have provided jobs to over 10,000 individuals. Wingstop has been named a Certified Great Place to Work for four years in a row and was also recognized by Best & Brightest of DFW for five years in a row. In 2019, we were recognized as a “Best and Brightest Companies to Work for in the Nation” winner. We are dedicated to a talent development and performance management process aimed at ensuring each of our team members has a personal professional development plan to guide them through opportunities and creating their futures at Wingstop. We have conducted training in unconscious biases for team members, including executive management, to facilitate respectful treatment of our guests and fair hiring and labor practices. We are an active member of the Women’s Foodservice Forum, an organization dedicated to accelerating the advancement of women leaders in the food industry. We have made pay equity a key focus of our diversity and inclusion efforts, and we continually monitor and benchmark the pay practices of our peers. Based on benchmarking in this area, we believe that we are excelling at fair pay for performance. We also support college and university internship programs throughout the year, and several interns have gone on to join us as Wingstop team members.
Our cornerstone commitment to our people also guides us as we address the unprecedented challenges of the global pandemic we are all now facing. Our focus from the outset has been to protect our people and do our part in “flattening the curve,” through a Company-wide work-from-home policy for all of our corporate team members, while also taking safety measures intended to protect our restaurant team members and guests so that we can continue to serve the communities in which we operate during this difficult time.
| |
| 22 | WINGSTOP INC. 2020 PROXY STATEMENT |
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CORPORATE GOVERNANCE
|
Focus Area
|
What We Believe and Do
| |
|
Community |
We believe in strengthening the communities in which we operate by providing all team members with paid time off to volunteer at charitable organizations through a quarterly Day of Giving. This year, Wingstop team members donated their time to serve local organizations such as the Genesis Women’s Shelter & Support, the North Texas Food Bank, The Bridge Homeless Recovery Center, and Salvation Army Social Services Center. We also participate in the Corporate Work Study Programs of Cristo Rey Dallas College Prep and Cristo Rey Fort Worth High School, college preparatory high schools that educate young people of limited economic means, allowing them to fund the majority of their education by spending one day a week working at a sponsoring employer in the community. Wingstop Charities, a 501(c)(3) nonprofit corporation, was established in 2016 as a platform to support the community and our team members and is composed of two segments. One segment of Wingstop Charities has a mission to engage youth in the pursuit of their passions, whether through education, arts, sports, or career development. Wingstop Charities helps amplify the work of our brand partners in their communities through a grants process. The other segment of Wingstop Charites is the Team Member Foundation, which supports Wingstop team members across America who are experiencing a financial hardship due to an emergency. In 2019, Wingstop Charities donated more than $160,000 to these worthy causes.
| |
|
Supplier Partners |
We believe in minimizing our environmental impact and carbon emissions through working with our supplier partners to make improvements at our Company-owned and franchised restaurants. Each new Wingstop restaurant in the U.S. is designed and built in an environmentally conscious way. Much of our kitchen equipment, including fryers, water heaters, and line refrigeration units are ENERGYSTAR® or similar specification rated. Additionally, all refrigeration is CFC and HCFC-free. We specify LED lighting in our restaurants, which uses only about ten percent of the energy required by incandescent lighting. We only use Zero VOC paints and floor stains, and low VOC wood stains. Our iconic metal wall finishes are made from 100% recycled materials. Additionally, we try to utilize high efficiency roof top units for all HVAC. At our restaurants, frying oil is recycled through local and regional rendering companies and refined or recycled for use in animal feed or biodiesel production. At our corporate office, we eliminated trash cans from all offices and created centralized recycling areas, which include compost bins. In addition, we eliminated single use beverage containers and use recycled and/or compostable materials throughout our offices. We have also implemented an eSignature processes for all of our franchising contracts and disclosures to reduce paper usage. Additionally, we have been furnishing our proxy statement to our stockholders electronically since 2017 in order to reduce the environmental impact of our annual meeting.
| |
|
|
WINGSTOP INC. 2020 PROXY STATEMENT | 23 |
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CORPORATE GOVERNANCE
Our director compensation program is designed to attract and retain highly qualified directors and align their interests with those of our shareholders. We compensate non-employee directors with a combination of cash and equity awards as described below. Mr. Morrison receives no compensation for his service on the Board.
The Compensation Committee periodically reviews the director compensation program and recommends proposed changes for approval by the Board. As part of this review, the Compensation Committee considers the significant amount of time expended, and the skill level required, by each director not employed by Wingstop in fulfilling his or her duties on the Board, each director’s role and involvement on the Board and its committees, and market data prepared by its independent consultant, FW Cook. The following table sets forth the cash component of our non-employee director compensation policy:
| Recipient(s)
|
Annual Cash
|
|||
|
Non-employee directors
|
|
50,000
|
| |
|
Lead independent director
|
|
15,000
|
| |
|
Audit committee chair
|
|
15,000
|
| |
|
Audit committee members (excluding chair)
|
|
2,500
|
| |
|
Compensation committee chair
|
|
10,000
|
| |
|
Compensation committee members (excluding chair)
|
|
2,500
|
| |
|
Nominating and corporate governance committee chair
|
|
5,000
|
| |
|
Nominating and corporate governance committee members (excluding chair)
|
|
2,500
|
| |
| 24 | WINGSTOP INC. 2020 PROXY STATEMENT |
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CORPORATE GOVERNANCE
The following table sets forth information concerning the fiscal year 2019 compensation of our non-employee directors that served during any part of 2019. Because Charlie Morrison serves as our President and Chief Executive Officer, he did not receive additional compensation for his service as Chairman of the Board or as a director during 2019. See “Executive Compensation—Summary Compensation Table” for information concerning the compensation paid to Charlie Morrison during 2019.
| Name
|
Fees Earned or Paid in Cash
|
Stock Awards(1)(2)
|
Total ($)
|
|||||||||
| Directors and Director Nominees
|
||||||||||||
| Krishnan (Kandy) Anand
|
|
52,500
|
(3)
|
|
50,000
|
(4)
|
|
102,500
|
| |||
| Lynn Crump-Caine
|
|
75,000
|
(5)
|
|
50,000
|
(4)
|
|
125,000
|
| |||
| David L. Goebel
|
|
55,000
|
(6)
|
|
50,000
|
(4)
|
|
105,000
|
| |||
| Michael J. Hislop
|
|
57,500
|
(7)
|
|
50,000
|
(4)
|
|
107,500
|
| |||
| Kate S. Lavelle
|
|
39,375
|
(8)
|
|
58,506
|
(9)
|
|
97,881
|
| |||
| Kilandigalu (Kay) M. Madati
|
|
55,000
|
(10)
|
|
50,000
|
(4)
|
|
105,000
|
| |||
| Wesley S. McDonald
|
|
67,500
|
(11)
|
|
50,000
|
(4)
|
|
117,500
|
| |||
| (1) | Amounts shown do not reflect compensation actually received by the applicable director. Rather, the amounts represent the approximate aggregate grant date fair value of restricted stock granted to such director in 2019, computed in accordance with ASC 718, with the exception that the amounts shown assume no forfeitures. A discussion of the assumptions used in the calculation of these amounts is included in Note 14, “Stock-Based Compensation,” in the annual consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 28, 2019 filed with the Securities and Exchange Commission (the “SEC”) on February 19, 2020. |
| (2) | The aggregate number of unvested restricted stock awards held by each director listed in the table above as of December 28, 2019 was as follows: |
| Name
|
Unvested Shares of
|
|||
| Directors and Director Nominees
|
|
|
| |
| Krishnan (Kandy) Anand
|
|
1,263
|
| |
| Lynn Crump-Caine
|
|
1,816
|
| |
| David L. Goebel
|
|
1,736
|
| |
| Michael J. Hislop
|
|
1,816
|
| |
| Kate S. Lavelle
|
|
693
|
| |
| Kilandigalu (Kay) M. Madati
|
|
1,816
|
| |
| Wesley S. McDonald
|
|
1,816
|
| |
| (3) | Represents the cash retainer fees paid to Mr. Anand for services as a director and a member of the Audit Committee, each for the entire 2019 fiscal year. Mr. Anand was appointed to the Compensation Committee effective March 5, 2020. |
| (4) | Represents the approximate fair market value of an award of 653 shares of restricted stock granted on June 11, 2019. These shares of restricted stock will vest in equal annual installments on each of June 11, 2020, June 11, 2021, and June 11, 2022. |
| (5) | Represents the cash retainer fees paid to Ms. Crump-Caine for services as (i) a director, (ii) chair of the Compensation Committee, and (iii) the Lead Independent Director, each for the entire 2019 fiscal year. |
| (6) | Represents the cash retainer fees paid to Mr. Goebel for services as (i) a director, (ii) a member of the Nominating and Corporate Governance Committee, and (iii) as a member of the Compensation Committee, each for the entire 2019 fiscal year. |
|
|
WINGSTOP INC. 2020 PROXY STATEMENT | 25 |
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| (7) | Represents the cash retainer fees paid to Mr. Hislop for services as (i) a director, (ii) a member of the Audit Committee, and (iii) the chair of the Nominating and Corporate Governance Committee, each for the entire 2019 fiscal year. |
| (8) | Represents the cash retainer fees paid to Ms. Lavelle for services as a director and a member of the Audit Committee from March 7, 2019 through the remainder of the 2019 fiscal year. |
| (9) | Represents (i) an award of 130 shares of restricted stock with a fair market value of $8,506 granted on March 7, 2019, which will vest in full on May 3, 2020, and (ii) an award of 653 shares of restricted stock granted with a fair market value of $50,000 on June 11, 2019, which will vest in equal annual installments on each of June 11, 2020, June 11, 2021, and June 11, 2022. |
| (10) | Represents the cash retainer fees paid to Mr. Madati for services as (i) a director, (ii) a member of the Nominating and Corporate Governance Committee, and (iii) a member of the Compensation Committee, each for the entire 2019 fiscal year. |
| (11) | Represents the cash retainer fees paid to Mr. McDonald for services as (i) a director, (ii) the chair of the Audit Committee, and (iii) a member of the Nominating and Corporate Governance Committee, each for the entire 2019 fiscal year. |
| 26 | WINGSTOP INC. 2020 PROXY STATEMENT |
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BENEFICIAL OWNERSHIP OF THE COMPANY’S SECURITIES
The applicable percentage ownership is based on 29,583,394 shares of common stock outstanding at April 13, 2020, which includes shares of unvested restricted stock that are or were subject to vesting conditions.
| Shares Beneficially Owned | ||||||||||||
| Name and Address of Beneficial Owner(1)
|
Number(2)
|
Equity Awards
|
% of
|
|||||||||
| BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 |
4,516,361 | — | 15.3 | % | ||||||||
| The Vanguard Group(4) 100 Vanguard Blvd. Malvern, PA 19355 |
3,649,374 | — | 12.3 | % | ||||||||
| Alger Associates, Inc.(5) 360 Park Avenue South New York, NY 10010 |
1,647,839 | — | 5.6 | % | ||||||||
| Non-Employee Directors: |
||||||||||||
| Krishnan (Kandy) Anand(6) |
1,443 | — | * | |||||||||
| Lynn Crump-Caine(7) |
3,958 | — | * | |||||||||
| David L. Goebel(8) |
2,815 | — | * | |||||||||
| Michael J. Hislop(9) |
9,786 | — | * | |||||||||
| Kate S. Lavelle(10) |
693 | — | * | |||||||||
| Kilandigalu (Kay) M. Madati(11) |
3,298 | — | * | |||||||||
| Wesley S. McDonald(12) |
5,252 | — | * | |||||||||
| Named Executive Officers: |
||||||||||||
| Christina M. Clarke |
1,124 | — | * | |||||||||
| Maurice Cooper(13) |
1,200 | — | * | |||||||||
| Madison A. Jobe |
10,458 | — | * | |||||||||
| Lawrence D. Kruguer(14) |
136 | — | * | |||||||||
| Darryl R. Marsch(15) |
13,020 | — | * | |||||||||
| Charles R. Morrison(16) |
170,557 | 79,816 | * | |||||||||
| Michael J. Skipworth(17) |
18,330 | 5,450 | * | |||||||||
| All directors and current executive officers as a group (14 persons) |
228,815 | 85,266 | * | |||||||||
| * | Less than one percent of Common Stock outstanding. |
| (1) | Unless otherwise indicated, the address of each beneficial owner in the table above is c/o Wingstop Inc., 5501 LBJ Freeway, 5th Floor, Dallas, Texas 75240. |
| (2) | This column includes the amounts reported in the “Equity Awards Exercisable or Convertible within 60 days” column. |
| (3) | Amount reported is based solely on the Amendment No. 3 to Schedule 13G filed with the SEC on February 4, 2020 by BlackRock, Inc. As reported therein, BlackRock, Inc. has sole voting power with respect to 4,444,736 shares, shared voting power with respect to 0 shares, sole investment power with respect to 4,516,361 shares, and shared investment power with respect to 0 shares. |
| (4) | Amount reported is based solely on the Amendment No. 4 to Schedule 13G filed with the SEC on February 11, 2020 by The Vanguard Group. As reported therein, The Vanguard Group has sole voting power with respect to 59,453 shares, shared voting power with respect to 4,450 shares, sole investment power with respect to 3,589,483 shares, and shared investment power with respect to 59,891 shares. |
| (5) | Amount reported is based solely on the Schedule 13G filed with the SEC on February 14, 2020 by Alger Associates, Inc. As reported therein, Alger Associates, Inc. has sole voting power with respect to 1,647,839 shares, shared voting power with respect to 0 shares, sole investment power with respect to 1,647,839 shares, and shared investment power with respect to 0 shares. |
| 28 | WINGSTOP INC. 2020 PROXY STATEMENT |
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BENEFICIAL OWNERSHIP OF THE COMPANY’S SECURITIES
| (6) | Includes 1,263 shares of unvested restricted stock, with respect to which Mr. Anand has sole voting power but no investment power. |
| (7) | Includes 1,816 shares of unvested restricted stock, with respect to which Ms. Crump-Caine has sole voting power but no investment power. |
| (8) | Includes 1,736 shares of unvested restricted stock, with respect to which Mr. Goebel has sole voting power but no investment power. |
| (9) | Includes 1,816 shares of unvested restricted stock and 5,105 shares of common stock held by The Hislop Revocable Trust u/a/d 12/19/1997 (the “Hislop Trust”). Mr. Hislop is a co-trustee of the Hislop Trust, the beneficiary of which is a member of Mr. Hislop’s immediate family. As such, Mr. Hislop may be deemed to share voting and investment power with respect to all of the shares held by the Hislop Trust. Mr. Hislop has sole voting and no investment power with respect to his shares of unvested restricted stock. |
| (10) | Includes 693 shares of unvested restricted stock, with respect to which Ms. Lavelle has sole voting power but no investment power. |
| (11) | Includes 1,816 shares of unvested restricted stock, with respect to which Mr. Madati has sole voting power but no investment power. |
| (12) | Includes 1,816 shares of unvested restricted stock, with respect to which Mr. McDonald has sole voting power but no investment power. |
| (13) | Mr. Cooper’s employment was terminated effective September 4, 2019. The reported beneficial ownership amounts are based on the Company’s records and the information contained in the last Form 4 filed on behalf of Mr. Cooper on August 2, 2019. |
| (14) | Mr. Kruguer resigned from the Company effective March 7, 2020. The reported beneficial ownership amounts are based on the Company’s records and the information contained in the last Form 4 filed on behalf of Mr. Kruguer on May 23, 2019. |
| (15) | Mr. Marsch retired from the Company effective June 14, 2019. The reported beneficial ownership amounts are based on the Company’s records and the information contained in the last Form 4 filed on behalf of Mr. Marsch on June 18, 2019. |
| (16) | Includes 79,816 shares issuable upon the exercise of stock options that are exercisable within 60 days of April 13, 2020. |
| (17) | Includes 5,450 shares issuable upon the exercise of stock options that are exercisable within 60 days of April 13, 2020. |
|
|
WINGSTOP INC. 2020 PROXY STATEMENT | 29 |
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Table of Contents
PROPOSAL 2—RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Fees Billed By Independent Registered Public Accounting Firm
The following table sets forth the aggregate fees billed by KPMG during the fiscal years ended December 28, 2019 and December 29, 2018. As discussed above, KPMG was engaged as the Company’s independent registered accounting firm in March 2019. Accordingly, KPMG did not bill any audit fees during the fiscal year ended December 29, 2018.
| KPMG | ||||||||
| Name
|
Fiscal Year
|
Fiscal Year
|
||||||
| Audit Fees(1) |
$ | 660,000 | $ | — | ||||
| Audit-Related Fees(2) |
— | 72,000 | ||||||
| Tax Fees(3) |
13,400 | 222,500 | ||||||
| All Other Fees(4) |
— | — | ||||||
| Total Fees |
$ | 673,400 | $ | 294,500 | ||||
| (1) | Audit fees include fees for services rendered for the audit of our annual financial statements and the review of the interim financial statements. Audit fees also include fees associated with the review of filings made with the SEC. |
| (2) | Audit-related fees include amounts billed for valuation services related to certain equity awards and acquisitions prior to being appointed as the Company’s independent registered public accounting firm. |
| (3) | Tax fees consist of fees billed for professional services rendered for tax compliance (including the preparation, review, and filing of tax returns), tax advice and tax planning. These services include assistance regarding federal and state tax compliance. |
| (4) | KPMG did not provide any “other services” during the relevant periods. |
| 32 | WINGSTOP INC. 2020 PROXY STATEMENT |
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Table of Contents
|
The Board of Directors recommends that you vote FOR the approval of the compensation of our named executive officers, including the Compensation Discussion and Analysis, the compensation tables and narrative discussion following such compensation tables, and the other related disclosures in this Proxy Statement.
|
|
|
WINGSTOP INC. 2020 PROXY STATEMENT | 33 |
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PROPOSAL 4—APPROVAL OF CHARTER AMENDMENTS
|
The Board of Directors recommends that you vote FOR the approval of the amendments to the Charter.
|
|
|
WINGSTOP INC. 2020 PROXY STATEMENT | 35 |
Table of Contents
Below is information regarding each of our current executive officers. Executive officers are elected annually by the Board to serve at the Board’s discretion until their successor is duly elected and qualified or until their earlier death, resignation, or removal. There are no family relationships between any of our directors or executive officers.
| Name | Age | Executive Officer Since |
Title | |||||||
| Charles R. Morrison |
51 | 2012 | Chairman of the Board, Chief Executive Officer, and President | |||||||
| Nicolas Boudet |
49 | 2020 | Senior Vice President, President of International | |||||||
| Christina M. Clarke |
44 | 2019 | Senior Vice President and Chief Marketing Officer | |||||||
| Madison A. Jobe |
65 | 2017 | Senior Vice President and Chief Development Officer | |||||||
| Albert G. McGrath |
62 | 2020 | Senior Vice President, General Counsel, and Secretary | |||||||
| Mahesh G. Sadarangani |
43 | 2020 | Senior Vice President, Chief Operating Officer | |||||||
| Michael J. Skipworth |
42 | 2017 | Executive Vice President and Chief Financial Officer | |||||||
| 36 | WINGSTOP INC. 2020 PROXY STATEMENT |
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EXECUTIVE OFFICERS
|
|
WINGSTOP INC. 2020 PROXY STATEMENT | 37 |
Table of Contents
The purpose of this Compensation Discussion and Analysis is to provide our stockholders with a clear understanding of our compensation philosophy and objectives, compensation-setting process, and 2019 compensation programs and actions for our named executive officers. For fiscal year 2019, our named executive officers were as follows:
| Charles R. Morrison |
Chairman of the Board, Chief Executive Officer, and President (Principal Executive Officer) | |
| Michael J. Skipworth |
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |
| Lawrence D. Kruguer(1) |
Former Executive Vice President and Chief Operating Officer | |
| Christina M. Clarke |
Senior Vice President and Chief Marketing Officer | |
| Madison A. Jobe |
Senior Vice President and Chief Development Officer | |
| Maurice Cooper(2) |
Former Executive Vice President and Chief Growth and Experience Officer | |
| Darryl R. Marsch(3) |
Former Senior Vice President, General Counsel, and Secretary | |
| (1) | Mr. Kruguer resigned from the Company effective March 7, 2020. |
| (2) | Mr. Cooper’s employment was terminated effective September 4, 2019. |
| (3) | Mr. Marsch retired from the Company effective June 14, 2019. |
| 38 | WINGSTOP INC. 2020 PROXY STATEMENT |
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COMPENSATION DISCUSSION AND ANALYSIS
|
|
WINGSTOP INC. 2020 PROXY STATEMENT | 39 |
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COMPENSATION DISCUSSION AND ANALYSIS
| 40 | WINGSTOP INC. 2020 PROXY STATEMENT |
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COMPENSATION DISCUSSION AND ANALYSIS
To develop the composition of the peer group, our Compensation Committee, with the assistance of FW Cook, reviewed companies in the restaurant industry using a number of criteria, including, among other things: non-franchise sales, franchise sales and systemwide sales, market capitalization, enterprise value, EBITDA, industry, customer base, and geography. Based on this review, our Compensation Committee determined to remove Noodles & Company and add Jack in the Box Inc., Ruth’s Hospitality Group, Inc., and BJ’s Restaurants, Inc. In addition, the Compensation Committee determined to remove Sonic Corp., Jamba Inc., Bojangles, Inc., and Papa Murphy’s Holdings, Inc. because they are no longer public reporting companies. Accordingly, our peer group for 2019 consisted of 15 companies. The following graph sets forth each member of our peer group for 2019, as well as a comparison of our one-year total shareholder return to the one-year total shareholder return of each member of the peer group for the period of January 1, 2019 to December 31, 2019:
|
|
WINGSTOP INC. 2020 PROXY STATEMENT | 41 |
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
The following graph sets forth each member of our peer group for 2019, as well as a comparison of our three-year total shareholder return to the three-year total shareholder return of each member of the peer group for the period of December 31, 2016 to December 31, 2019:
Based on three-year total shareholder return, Wingstop outperformed each member of its peer group in fiscal year 2019.
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COMPENSATION DISCUSSION AND ANALYSIS
The following table summarizes the key elements of each component of our executive compensation program:
| Compensation Element
|
Type
|
Form
|
Primary
|
Additional
| ||||
| Base Salary
|
Fixed
|
Cash
|
Attract and retain
|
Reviewed annually based on market positioning and individual qualifications
| ||||
| Performance-Based Annual Cash Incentive
|
Variable
|
Cash
|
Short-term Company and individual performance
|
Earned based on achievement of financial performance targets (Adjusted EBITDA, average unit volume, and net new units)
| ||||
| Service-Based Equity Incentive
|
Variable
|
Service-Based Restricted Stock Units
|
Rewards long-term value creation; fosters retention and continuity
|
Vest ratably over 3 years
| ||||
| Performance-Based
|
Variable
|
Performance-Based Restricted Stock Units
|
Enhances stockholder alignment and rewards long-term value creation
|
Earned based on achievement of Adjusted EBITDA targets
| ||||
| Performance-Based Long-Term Equity Incentive
|
Variable
|
Performance-Based Restricted Stock Units
|
Enhances stockholder alignment and rewards long-term value creation
|
Earned based on achievement of net new units, new unit performance, and total stockholder return
| ||||
|
|
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COMPENSATION DISCUSSION AND ANALYSIS
| CEO 2019 Target Pay Mix
|
Other NEOs 2019 Target Pay Mix
| |
|
|
The following table provides information concerning the annual base salary of each of our named executive officers:
| Name | 2019 Base Salary ($) |
2018 Base Salary ($) |
||||||
| Charles R. Morrison(1) |
800,000 | 700,000 | ||||||
| Michael J. Skipworth(2) |
425,000 | 380,000 | ||||||
| Lawrence D. Kruguer(3) |
400,000 | 400,000 | ||||||
| Christina M. Clarke(4) |
340,000 | — | ||||||
| Madison A. Jobe(5) |
340,000 | — | ||||||
| Maurice Cooper(6) |
400,000 | — | ||||||
| Darryl R. Marsch(7) |
330,000 | 330,000 | ||||||
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| (1) | Mr. Morrison’s base salary was increased from $700,000 to $800,000 in November 2019 in connection with his renewed employment agreement. See “Compensation Discussion and Analysis—Leadership Continuity and CEO Contract Renewal” for details. |
| (2) | Mr. Skipworth’s base salary was increased from $380,000 to $425,000 in March 2019 in order to compensate him for his increased responsibilities as a result of an organizational restructuring. |
| (3) | Mr. Kruguer resigned from the Company effective March 7, 2020. |
| (4) | Ms. Clarke was appointed as our Chief Marketing Officer in November 2019. In connection with this change, Ms. Clarke’s base salary increased from $240,000 to $340,000. Information for 2018 is not included because Ms. Clarke was not a named executive officer during 2018. |
| (5) | Mr. Jobe’s base salary was increased from $300,000 to $340,000 in March 2019 in light of personal performance and alignment with market data. Information for 2018 is not included because Mr. Jobe was not a named executive officer during 2018. |
| (6) | Mr. Cooper’s base salary was increased from $320,000 to $400,000 in March 2019 in light of increased responsibilities as a result of organizational restructuring. Information for 2018 is not included because Mr. Cooper was not a named executive officer during 2018. Mr. Cooper’s employment was terminated effective September 4, 2019. |
| (7) | Mr. Marsch retired from the Company effective June 14, 2019. |
|
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COMPENSATION DISCUSSION AND ANALYSIS
The target Adjusted EBITDA achievement levels and payout percentages under the 2019 Bonus Plan were as follows:
| Target Adjusted EBITDA Achievement (%) |
Target Adjusted EBITDA ($) (in thousands) |
Bonus Payout (% of Target Bonus) | ||
| <93.5% | <52,769 | 0% | ||
| 93.5% | 52,769 | 50% | ||
| 94.6% | 53,380 | 70% | ||
| 95.7% | 53,991 | 80% | ||
| 96.7% | 54,602 | 90% | ||
| 97.8% | 55,213 | 96% | ||
| 98.9% | 55,825 | 98% | ||
| 100.0% | 56,437 | 100% | ||
| >100.0% | >56,437 | 100% | ||
The target new store growth and average unit volume achievement levels and payout percentages under the 2019 Bonus Plan were as follows:
| Net New Units(1) | ||||||||||||||||||||||
| 155 | 158 | 161 | 164 | 167 | 170 | 173 | 176 | 179 | 182 | |||||||||||||
| New ($) (in |
950 | 105.0% | 110.0% | 115.0% | 120.0% | 125.0% | 130.0% | 135.0% | 140.0% | 145.0% | 150.0% | |||||||||||
| 965 | 110.0% | 115.0% | 120.0% | 125.0% | 130.0% | 135.0% | 140.0% | 145.0% | 150.0% | 150.0% | ||||||||||||
| 980 | 115.0% | 120.0% | 125.0% | 130.0% | 135.0% | 140.0% | 145.0% | 150.0% | 150.0% | 150.0% | ||||||||||||
| 995 | 120.0% | 125.0% | 130.0% | 135.0% | 140.0% | 145.0% | 150.0% | 150.0% | 150.0% | 150.0% | ||||||||||||
| 1,010 | 125.0% | 130.0% | 135.0% | 140.0% | 145.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | ||||||||||||
| 1,025 | 130.0% | 135.0% | 140.0% | 145.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | ||||||||||||
| 1,040 | 135.0% | 140.0% | 145.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | ||||||||||||
| 1,055 | 140.0% | 145.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | ||||||||||||
| 1,070 | 145.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | ||||||||||||
| 1,085 | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | 150.0% | ||||||||||||
| (1) | Net new units is calculated by subtracting any restaurant closures during the year from the gross number of new restaurants opened during the year. |
| (2) | Average unit volume of new restaurant openings reflects the average annualized sales of all restaurants opened in 2019. |
If performance is achieved at a level that is between the achievement levels set forth above, the payout level is determined through straight-line interpolation.
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COMPENSATION DISCUSSION AND ANALYSIS
For fiscal year 2019, our Adjusted EBITDA for purposes of the 2019 Bonus Plan was $57.0 million ($60.9 million excluding bonus expense), well in excess of the $56.4 million of Adjusted EBITDA ($60.3 million excluding bonus expense) needed to achieve 100% of the target bonus amount. Our new restaurant openings average unit volume and net new units in fiscal year 2019 did not meet the threshold numbers necessary for our named executive officers to achieve the additional bonus payout. As a result, we made bonus payments under the 2019 Bonus Plan at 100% of the target bonus amount to our named executive officers in March of 2020 as follows:
| Name | 2019 Base Salary ($)(1) |
Target Bonus % of Base Salary |
Actual Bonus % of Base Salary(1) |
2019 Bonus Payout ($)(1) |
||||||||||||
| Charles R. Morrison |
800,000 | 100 | % | 100 | % | 700,000 | ||||||||||
| Michael J. Skipworth |
425,000 | 60 | % | 60 | % | 255,000 | ||||||||||
| Lawrence D. Kruguer |
400,000 | 60 | % | 60 | % | 240,000 | ||||||||||
| Christina M. Clarke |
340,000 | 50 | % | 50 | % | 125,700 | ||||||||||
| Madison A. Jobe |
340,000 | 50 | % | 50 | % | 170,000 | ||||||||||
| Maurice Cooper(2) |
400,000 | 60 | % | — | — | |||||||||||
| Darryl R. Marsch(3) |
330,000 | 50 | % | — | — | |||||||||||
| (1) | All bonuses were calculated and paid as a percentage of base salary as of December 28, 2019, with the exception of (i) Mr. Morrison’s, which was calculated and paid as a percentage of Mr. Morrison’s base salary as in effect prior to November 2019, which was $700,000, and (ii) Ms. Clarke’s, which was calculated and paid as a percentage of actual salary earned by Ms. Clarke in 2019. |
| (2) | Mr. Cooper’s employment was terminated effective September 4, 2019 and therefore he did not receive a bonus under the 2019 Bonus Plan. |
| (3) | Mr. Marsch retired from the Company effective June 14, 2019 and therefore did not receive a bonus under the 2019 Bonus Plan. |
|
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COMPENSATION DISCUSSION AND ANALYSIS
After weighing these factors, the Compensation Committee granted the following equity incentive awards to our named executive officers:
| Name | Service-Based Restricted Stock Units |
Performance- Based Restricted Stock Units | ||||||||
| Charles R. Morrison |
7,592 | 15,184 | ||||||||
| Michael J. Skipworth |
3,872 | 3,872 | ||||||||
| Lawrence D. Kruguer(1) |
3,645 | 3,645 | ||||||||
| Christina M. Clarke |
912 | 912 | ||||||||
| Madison A. Jobe |
2,582 | 2,582 | ||||||||
| Maurice Cooper(2) |
3,645 | 3,645 | ||||||||
| Darryl R. Marsch(3) |
2,506 | 2,506 | ||||||||
| (1) | Mr. Kruguer resigned from the Company effective March 7, 2020. In connection with his resignation, all unvested restricted stock units held Mr. Kruguer were automatically forfeited. |
| (2) | Mr. Cooper’s employment was terminated effective September 4, 2019; all unvested restricted stock units held Mr. Cooper were automatically forfeited. |
| (3) | Mr. Marsch retired from the Company effective June 14, 2019. In connection with Mr. Marsch’s retirement, he entered into a letter agreement with the Company (the “Marsch Letter Agreement”), pursuant to which, among other things, the Company (i) accelerated the vesting of 835 of the service-based restricted stock units granted to Mr. Marsch in 2019 and (ii) accelerated the vesting of 835 performance-based restricted stock units granted to Mr. Marsch in 2019 and waived the remaining performance conditions therefor. All such restricted stock units vested in full on June 22, 2019, and all of Mr. Marsch’s other unvested equity awards granted in 2019 were forfeited and cancelled. |
Additional One-Time Equity Grant. On March 6, 2019, the Compensation Committee approved a one-time special performance-based long-term incentive award to Mr. Cooper to serve as a retention incentive in light of his increased responsibilities as a result of an organizational restructuring. Mr. Cooper was granted a target of 3,796 performance-based restricted stock units (the “LTIP PSUs”). The LTIP PSUs would have vested at the end of a three-year performance period, beginning March 31, 2019 and ending March 6, 2022, based on the level of cumulative new sales achieved over such period, and potentially modified based on the Company’s total stockholder return (“TSR”) for the same period as measured against that of the companies in the S&P 600 Restaurant Index, as follows:
| Percentage of PRSUs Earned | ||||||||||
| 3-year Cumulative New Sales Level Achieved |
Company TSR at or Above Index TSR |
Company TSR Below Index TSR | ||||||||
| $390,888,000 | 25% | 25% | ||||||||
| $488,610,000 | 100% | 100% | ||||||||
| $612,910,000 and above | 500% | 250% | ||||||||
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COMPENSATION DISCUSSION AND ANALYSIS
If the 3-year Cumulative New Sales level fell between the levels provided above, straight-line interpolation would have been used to determine the percentage of LTIP PSUs earned. For the purposes of these awards, “3-year Cumulative New Sales” means the cumulative total sales during the performance period for all franchisee-operated stores, opened during the performance period, as determined by the Compensation Committee. Mr. Cooper’s employment was terminated effective September 4, 2019, and as a result, the LTIP PSUs were automatically forfeited.
|
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COMPENSATION DISCUSSION AND ANALYSIS
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COMPENSATION DISCUSSION AND ANALYSIS
| Wingstop’s History of Industry Leading Operational Performance | ||||||||
|
|
|
|
|
| ||||
| Revenue Growth
3-year compound annual growth |
5.2%
Restaurant Industry Peer Group Median |
6.6%
General Industry S&P 500 Median |
24.6%
|
Wingstop’s revenue growth exceeds the median growth among restaurant peers and the S&P 500. Wingstop ranks at the 97th percentile among peers. | ||||
|
|
|
|
|
| ||||
| EBITDA Growth
3-year compound annual growth |
-0.9%
Restaurant Industry Peer Group Median |
7.4%
General Industry S&P 500 Median |
18.3%
|
Wingstop’s EBITDA growth exceeds the median growth among restaurant peers and the S&P 500. Wingstop ranks highest among peers. | ||||
|
|
|
|
|
| ||||
| Unit Growth
3-year cumulative openings |
70
Restaurant Industry Peer Group Median |
N/A
General Industry S&P 500 Median |
432
|
Wingstop’s Unit growth exceeds the median growth among restaurant peers. Wingstop ranks at the 91st percentile among peers. | ||||
|
|
|
|
|
| ||||
| Market Capitalization Growth
3-year compound annual growth |
-7.3%
Restaurant Industry Peer Group Median |
10.6%
General Industry S&P 500 Median |
44.0%
|
Wingstop’s market cap growth exceeds the Wingstop ranks highest among peers. | ||||
Third-Party Data Source: Operating and market performance derived from data as reported in Standard and Poor’s Capital IQ financial database. Standard and Poor’s may adjust certain metrics for relative comparison purposes. These adjustments may or may not align with how each individual company, including Wingstop, reports its own performance on a GAAP or non-GAAP basis. References to the S&P 500 reflect median performance of index constituents based on available public information as of the closest fiscal year end as of March 15, 2020, each on an equal-weight basis. Information provided for illustrative purposes only.
|
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COMPENSATION DISCUSSION AND ANALYSIS
| Wingstop’s History of Best in Class Shareholder Returns | ||||||
|
Wingstop’s common stock has delivered best in class shareholder returns since IPO as demonstrated by its performance relative to the peer group and broader restaurant and general industry competitors.
The graph shows the cumulative total shareholder return on our common stock for the period starting on June 17, 2015, and ending on December 31, 2019. This is compared with the cumulative total returns over the same period of the peer group median, S&P 500 Stock Index, the S&P 500 Restaurant Sub-Industry Index, Russell 3000 Stock Index, and the Russell 3000 Restaurant Sub-Industry Index. The graph assumes that, on June 17, 2015, $100 was invested in our common stock and in each of the comparator groups, with dividends reinvested on the ex-dividend date without consideration for withholding taxes. Wingstop’s total return value ($388) as of December 31, 2019, is above each of the Peer Median ($88), S&P 500 ($169), S&P 500 Restaurants ($195), Russell 3000 ($164), and Russell 3000 Restaurants ($184) comparators over that same period.
Source: Standard & Poor’s Capital IQ. For illustrative purposes only. | |||||
| Wingstop’s History of Responsible CEO Pay (Pay for Performance) | ||||||||
| 100%
2017 Wingstop CEO Bonus Plan Payout (as % of target) |
100%
2018 Wingstop CEO Bonus Plan Payout (as % of target) |
100%
2019 Wingstop CEO Bonus Plan Payout (as % of target) |
Bonus Plan |
Wingstop’s CEO bonus payouts have aligned with target despite actual performance exceeding plan over the past three years | ||||
| 100%
2017-2019 Wingstop Performance-based Restricted Stock Unit Payout (% of target) |
TBD
2018-2020 Wingstop Performance-based Restricted Stock Unit Payout (% of target) |
TBD
2019-2021 Wingstop Performance-based Restricted Stock Unit Payout (% of target) |
Performance-based Restricted Stock Unit |
Wingstop’s CEO performance-based restricted stock unit payout for the period ending December 31, 2019, aligns with target despite actual performance exceeding plan | ||||
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COMPENSATION DISCUSSION AND ANALYSIS
2020 Executive Compensation Program Changes
In 2019 and early 2020, the Compensation Committee undertook a comprehensive review of our long-term compensation program. As part of this process, the Compensation Committee considered stockholder feedback, competitive market practices as observed in the restaurant industry and high-growth companies in the general industry, and feedback received from departing executives and new hires to better understand the compensation landscape in which we compete for executive talent.
|
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COMPENSATION DISCUSSION AND ANALYSIS
Based on such review, in March 2020, the Compensation Committee made changes to our long-term incentive program to ensure that our program is competitive and to support the attraction and retention of top caliber talent required to execute on our strategic priorities, maintain our industry leading position, continue to grow our Company, and drive stockholder value creation. The following table summarizes our 2020 long-term incentive compensation program:
| Award Type | Description | |
| Performance-based Restricted Stock Units
• CEO: 67% weight
• Other NEOs: 50% weight |
• Rewards long-term shareholder value creation
• Awards will be earned, if at all, subject to adjusted EBITDA growth, and relative total shareholder return against the peer group
• Performance is measured over a three-year period
• Award cliff vests following the three-year performance period
• Payouts can range from 0% of target for underperformance, 100% for target performance, and 250% of target for outperformance | |
| Stock Options
• CEO: 33% weight
• Other NEOs: 25% weight |
• Stock options provide value only to the extent our stock price increases, thereby aligning executives’ interests with those of our stockholders
• Awards vest ratably over a three-year service period
• Options must be exercised within the ten-year term | |
| Restricted Stock Units
• CEO: 0% weight
• Other NEOs: 25% weight |
• Service-based restricted stock units are common in our industry and primarily encourage retention and alignment with long-term stockholder interests
• Awards vest ratably over a three-year service period
• Our CEO is not eligible for service-vested restricted stock units | |
The changes to our executive compensation program for 2020 predated the recent global outbreak of COVID-19. While we do not anticipate any further changes to our executive compensation program at this time, our Compensation Committee is closely monitoring the situation and may determine to make further revisions to our executive compensation program, including the performance targets underlying our incentive-based compensation, in light of the potential impact of COVID-19 on our business.
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Table of Contents
The following table sets forth information concerning the total compensation awarded to, earned by, or paid to the named executive officers for 2019, 2018, and 2017, calculated in accordance with SEC rules and regulations.
| Year | Salary(1) ($) |
Bonus ($) |
Stock/Unit ($) |
Option Awards(2)(3) ($) |
Non-Equity Incentive Plan ($) |
All
Other ($) |
Total ($) |
|||||||||||||||||||||
|
Charles R. Morrison(6) Chairman of the Board, Chief Executive Officer, and President |
2019 |
|
711,539 |
|
|
500,000 |
(10) |
|
4,500,027 |
(11) |
— |
|
700,000 |
|
|
51,039 |
|
|
6,462,605 |
| ||||||||
| 2018 | 690,100 | — | 2,002,891 | (11) | — | 700,000 | 1,071,060 | 4,464,051 | ||||||||||||||||||||
| 2017 | 628,500 | — | 1,500,027 | (11) | — | 628,500 | 4,569 | 2,761,596 | ||||||||||||||||||||
|
Michael J. Skipworth Executive Vice President and Chief Financial Officer |
2019 |
|
416,346 |
|
|
— |
|
|
510,020 |
(11) |
— |
|
255,000 |
|
|
11,004 |
|
|
1,192,370 |
| ||||||||
| 2018 | 368,923 | 100,000 | (12) | 796,087 | (11) | — | 228,000 | 96,387 | 1,489,397 | |||||||||||||||||||
| 2017 | 263,893 | — | 369,663 | (11) | — | 131,947 | 11,312 | 776,815 | ||||||||||||||||||||
|
Lawrence D. Kruguer(13) Former Executive Vice President and Chief Operating Officer |
2019 |
|
400,000 |
|
|
— |
|
|
480,119 |
(11) |
— |
|
240,000 |
|
|
11,512 |
|
|
1,131,631 |
| ||||||||
| 2018 | 399,231 | — | 480,015 | (11) | — | 240,000 | 139,735 | 1,258,981 | ||||||||||||||||||||
| 2017 | 300,000 | — | 300,004 | (11) | — | 150,000 | 15,563 | 765,567 | ||||||||||||||||||||
|
Christina M. Clarke(14) Senior Vice President and Chief Marketing Officer |
2019 |
|
251,539 |
|
|
60,000 |
(15) |
|
120,129 |
(11) |
— |
|
125,700 |
|
|
5,146 |
|
|
562,514 |
| ||||||||
|
Madison A. Jobe(16) Senior Vice President and Chief Development Officer |
2019 |
|
332,308 |
|
|
— |
|
|
340,101 |
(11) |
— |
|
170,000 |
|
|
11,512 |
|
|
853,921 |
| ||||||||
|
Maurice Cooper(17) Former Executive Vice President and Chief Growth and Experience Officer |
2019 |
|
258,462 |
|
|
— |
|
|
730,124 |
(11) |
— |
|
— |
|
|
793,092 |
|
|
1,781,678 |
| ||||||||
|
Darryl Marsch(18) |
2019 |
|
152,308 |
|
|
— |
|
|
330,090 |
(11) |
— |
|
— |
|
|
942,894 |
|
|
1,425,292 |
| ||||||||
| Former Senior Vice President, General Counsel and Secretary |
2018 | 325,846 | — | 330,005 | (11) | — | 165,000 | 11,312 | 832,163 | |||||||||||||||||||
| (1) | Represents the amount of base salary actually earned by the named executive officer for fiscal year 2019. For additional information concerning our named executive officer base salaries, see “Compensation Discussion and Analysis—Elements of Executive Compensation—Base Salary.” |
| (2) | Amounts shown do not reflect compensation actually received by the named executive officers. Rather, the amounts represent the aggregate grant date fair value of awards granted to the named executive officer in 2019, 2018, and 2017, in each case computed in accordance with ASC 718, with the exception that the amount shown assumes no forfeitures. A discussion of the assumptions used in the calculation of these amounts is included in Note 14, “Stock-Based Compensation,” in the annual consolidated financial statements included in the Form 10-K filed with the SEC on February 19, 2020. |
| (3) | We adjusted the exercise prices of all eligible stock options that were outstanding at the time we paid two special dividends during fiscal year 2018 in order to maintain the relative economic value of such awards in connection with these special dividends. |
| (4) | Amounts shown represent bonuses earned by the named executive officers based on the achievement of performance goals. Bonuses paid to the named executive officers were determined in accordance with the terms of the 2019 Bonus Plan. See “Compensation Discussion and Analysis—Elements of Executive Compensation—Performance-Based Annual Cash Incentives” for additional information. |
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EXECUTIVE COMPENSATION
| (5) | Includes the following: Company match under the 401(k) plan, cash dividend equivalency payments accrued in connection with quarterly or special dividends declared in the respective years, accrued severance benefits, Company-paid premiums for long-term disability (“LTD”) coverage, and legal fees. |
| Year | 401(k) match ($) |
Dividend ($) |
Severance |
Company- ($) |
Legal Fees | |||||||||||||||||
|
Charles R. Morrison(6) Chairman of the Board, Chief Executive Officer, and President |
2019 |
|
10,527 |
|
|
— |
|
|
— |
|
|
512 |
|
|
40,000 |
(7) | ||||||
| 2018 | 10,637 | 1,059,911 | — | 512 | — | |||||||||||||||||
| 2017 | 4,057 | — | — | 512 | — | |||||||||||||||||
|
Michael J. Skipworth Executive Vice
President and |
2019 |
|
10,492 |
|
|
— |
|
|
— |
|
|
512 |
|
|
— |
| ||||||
| 2018 | 10,800 | 85,075 | — | 512 | — | |||||||||||||||||
| 2017 | 10,800 | — | — | 512 | — | |||||||||||||||||
|
Lawrence D. Kruguer Former Executive Vice President and Chief Operating Officer |
2019 |
|
11,000 |
|
|
— |
|
|
— |
|
|
512 |
|
|
— |
| ||||||
| 2018 | 10,800 | 128,423 | — | 512 | — | |||||||||||||||||
| 2017 | 10,800 | 4,251 | — | 512 | — | |||||||||||||||||
|
Christina M. Clarke Senior Vice
President and |
2019 |
|
4,634 |
|
|
— |
|
|
— |
|
|
512 |
|
|
— |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
Madison A. Jobe Senior Vice President and |
2019 |
|
11,000 |
|
|
— |
|
|
— |
|
|
512 |
|
|
— |
| ||||||
|
Maurice Cooper Former Executive Vice President and |
2019 |
|
5,708 |
|
|
— |
|
|
787,000 |
(8) |
|
384 |
|
|
— |
| ||||||
|
Darryl R. Marsch |
2019 |
|
11,000 |
|
|
— |
|
|
931,628 |
(9) |
|
256 |
|
|
— |
| ||||||
| Former Senior Vice President, General Counsel and Secretary |
2018 | 10,800 | — | — | 512 | — | ||||||||||||||||
| (6) | All amounts shown reflect compensation paid to Mr. Morrison for his service as our Chief Executive Officer and President. Mr. Morrison did not receive additional compensation for his service as a director or Chairman of the Board. |
| (7) | Represents the payment of legal fees incurred by Mr. Morrison in connection with his amended and restated employment agreement. |
| (8) | Mr. Cooper’s employment was terminated effective September 4, 2019. In connection with his departure, Mr. Cooper is entitled to a severance payment of $787,000, which consists of (i) 1.5 times his base salary ($600,000), (ii) the pro-rated portion of Mr. Cooper’s bonus that he would have earned under the 2019 Bonus Plan had he been employed at the end of the 2019 fiscal year ($167,000) and (iii) COBRA premium payments for the 18-month period following Mr. Cooper’s departure ($20,000). |
| (9) | Mr. Marsch retired from the Company effective June 14, 2019. Represents the value of the acceleration of the following equity awards pursuant to the Marsch Letter Agreement: (i) 1,404 shares underlying performance-based stock options, (ii) 1,405 shares underlying service-based options, (iii) 3,986 performance-based restricted stock units, and (iv) 3,985 service-based restrictive stock units, all of which were originally granted pursuant to the 2015 Omnibus Plan and were scheduled to vest by March 2020 based upon the Company meeting certain adjusted EBITDA thresholds for fiscal year 2019 (with respect to the performance-based awards) or the grant-date anniversary specified in the applicable award agreement (with respect to the service-based awards). |
| (10) | Reflects a one-time bonus paid in connection with the extension of Mr. Morrison’s employment agreement. |
| (11) | Represents the aggregate grant date fair value of restricted stock units issued to the named executive officer during 2019. See “Elements of Executive Compensation—Equity Incentive Awards—Fiscal Year 2019 Equity Grants.” |
| (12) | Reflects a one-time bonus paid in light of exceptional performance in connection with a significant transaction completed by the Company. |
| (13) | Mr. Kruguer resigned from the Company effective March 7, 2020. |
| (14) | Ms. Clarke was appointed as our Chief Marketing Officer on November 19, 2019. Information for 2017 and 2018 is not included because Ms. Clarke was not a named executive officer during those years. |
| (15) | Reflects the portion of a $105,000 signing bonus awarded to Ms. Clarke in October 2018 that was paid in 2019. |
| (16) | Information for 2017 and 2018 is not included because Mr. Jobe was not a named executive officer during those years. |
| (17) | Information for 2017 and 2018 is not included because Mr. Cooper was not a named executive officer during those years. |
| (18) | Information for 2017 is not included because Mr. Marsch was not a named executive officer during that year. |
The amounts reported in the Summary Compensation Table are described more fully under “Compensation Discussion and Analysis” herein.
|
|
WINGSTOP INC. 2020 PROXY STATEMENT | 57 |
Table of Contents
EXECUTIVE COMPENSATION
Grants of Plan-Based Awards Table
The following table sets forth information regarding the plan-based awards granted to each named executive officer during the 2019 fiscal year:
| Name
|
Grant
|
Estimated Future Payouts Under
|
Estimated Future Payouts
Under
|
All Other Stock (#)
|
Grant Date Fair Value of Stock Awards ($)(1)
|
|||||||||||||||||||||||||||||||||||
|
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Maximum
|
|||||||||||||||||||||||||||||||||||
|
Charles R. Morrison |
|
n/a |
(2) |
|
350,000 |
|
|
700,000 |
|
|
1,050,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||
| 3/6/2019 | (3) | — | — | — | 7,592 | 15,184 | 15,184 | — | 1,000,018 | |||||||||||||||||||||||||||||||
| 3/6/2019 | (4) | — | — | — | — | — | — | 7,592 | 500,009 | |||||||||||||||||||||||||||||||
| 11/13/2019 | (5) | — | — | — |
|
|
|
40,000 | 40,000 | 40,000 | — | 3,000,000 | ||||||||||||||||||||||||||||
|
Michael J. Skipworth |
|
n/a |
(2) |
|
127,500 |
|
|
255,000 |
|
|
382,500 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||
| 3/6/2019 | (3) | — | — | — | 1,936 | 3,872 | 3,872 | — | 255,010 | |||||||||||||||||||||||||||||||
| 3/6/2019 | (4) | — | — | — |
|
|
|
— | — | — | 3,872 | 255,010 | ||||||||||||||||||||||||||||
|
Lawrence D. Kruguer(6) |
|
n/a |
(2) |
|
120,000 |
|
|
240,000 |
|
|
360,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||
| 3/6/2019 | (3) | — | — | — | 1,823 | 3,645 | 3,645 | — | 240,060 | |||||||||||||||||||||||||||||||
| 3/6/2019 | (4) | — | — | — |
|
|
|
— | — | — | 3,645 | 240,060 | ||||||||||||||||||||||||||||
|
Christina M. Clarke |
|
n/a |
(2) |
|
62,850 |
|
|
125,700 |
|
|
188,550 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||
| 3/6/2019 | (3) | — | — | — | 456 | 912 | 912 | — | 60,064 | |||||||||||||||||||||||||||||||
| 3/6/2019 | (4) | — | — | — |
|
|
|
— | — | — | 912 | 60,064 | ||||||||||||||||||||||||||||
|
Madison A. Jobe |
|
n/a |
(2) |
|
85,000 |
|
|
170,000 |
|
|
255,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||
| 3/6/2019 | (3) | — | — | — | 1,291 | 2,582 | 2,582 | — | 170,051 | |||||||||||||||||||||||||||||||
| 3/6/2019 | (4) | — | — | — |
|
|
|
— | — | — | 2,582 | 170,051 | ||||||||||||||||||||||||||||
|
Maurice Cooper(7) |
|
n/a |
(2) |
|
120,000 |
|
|
240,000 |
|
|
360,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||
| 3/6/2019 | (3) | — | — | — | 1,823 | 3,645 | 3,645 | — | 240,060 | |||||||||||||||||||||||||||||||
| 3/6/2019 | (4) | — | — | — | — | — | — | 3,645 | 240,060 | |||||||||||||||||||||||||||||||
| 3/6/2019 | (8) | — | — | — |
|
|
|
949 | 3,796 | 18,980 | — | 250,005 | ||||||||||||||||||||||||||||
|
Darryl Marsch(9) |
|
n/a |
(2) |
|
82,500 |
|
|
165,000 |
|
|
247,500 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||
| 3/6/2019 | (3) | — | — | — | 1,253 | 2,506 | 2,506 | — | 165,045 | |||||||||||||||||||||||||||||||
| 3/6/2019 | (4) | — | — | — |
|
|
|
— | — | — | 2,506 | 165,045 | ||||||||||||||||||||||||||||
| (1) | Amounts represent the aggregate grant date fair value of restricted stock units granted to each named executive officer in 2019 computed in accordance with ASC 718, with the exception that the amount shown assumes no forfeitures. A discussion of the assumptions used in the calculation of these amounts is included in Note 14, “Stock-Based Compensation,” in the annual consolidated financial statements included in the Form 10-K filed with the SEC on February 19, 2020. |
| (2) | Represents possible payout amounts under the 2019 Bonus Plan based on the achievement of the performance goals described above in “Compensation Discussion and Analysis—Elements of Executive Compensation—Performance-Based Annual Cash Incentives.” Under the 2019 Bonus Plan, our Chief Executive Officer’s target bonus amount was set at 100% of base salary, our executive vice presidents’ target bonus amounts were set at 60% of base salary, and our senior vice presidents’ target bonus amounts were set at 50% of base salary. The percentage of base salary for each named executive officer was calculated based on such named executive officer’s base salary as of December 28, 2019, with the exception of (i) Mr. Morrison, which was calculated based on his base salary as in effect prior to November 2019, which was $700,000, and (ii) Ms. Clarke, which was calculated based on the actual salary earned by Ms. Clarke in 2019. Each named executive officer, including our Chief Executive Officer, was eligible to earn a bonus between 0% and 150% of the target bonus amount based on the Company’s achievement of performance goals. For purposes of this table, the “Threshold” column represents a 50% payout of the target bonus amount because it was the minimum amount payable under the 2019 Bonus Plan other than no award. See the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table for actual amounts paid to each of the named executive officers under the 2019 Bonus Plan for the 2019 performance period. |
| (3) | Represents an award of performance-based restricted stock units that vest based upon the achievement of EBITDA or Adjusted EBITDA goals. For additional information, see “Elements of Executive Compensation—Equity Incentive Awards—Fiscal Year 2019 Equity Grants.” |
| (4) | Represents an award of service-based restricted stock units that vest in three equal annual installments beginning on the first anniversary of the date of grant. Each vested unit is equivalent to one share of Wingstop common stock. For additional information, see “Elements of Executive Compensation—Equity Incentive Awards—Fiscal Year 2019 Equity Grants.” |
| (5) | Represents an award of performance-based restricted stock units that vest in four equal annual installments, beginning on the second anniversary of the date of grant, if, during the Company’s 2020 fiscal year, the Company maintains and sustains a domestic operations digital sales mix (from all channels, including delivery) of at least 40%. For additional information, see “Leadership Continuity and Chief Executive Officer Contract Renewal—Extension of Mr. Morrison’s Employment Agreement.” |
| 58 | WINGSTOP INC. 2020 PROXY STATEMENT |
|
Table of Contents
EXECUTIVE COMPENSATION
| (6) | Mr. Cooper’s employment was terminated effective September 4, 2019; all of Mr. Cooper’s unvested restricted stock units were automatically forfeited. |
| (7) | Mr. Kruguer resigned from the Company effective March 7, 2020. In connection with his resignation, all unvested restricted stock units held Mr. Kruguer were automatically forfeited. |
| (8) | Represents an award of performance-based restricted stock units that vest based upon the level of cumulative new sales achieved over a three-year period, beginning March 31, 2019 and ending March 26, 2022, and potentially modified based on the Company’s total stockholder return for the same period as measured against that of the companies in the S&P 600 Restaurant Index. For additional information, see “Elements of Executive Compensation—Equity Incentive Awards—Additional One-Time Equity Grants.” |
| (9) | Mr. Marsch retired from the Company effective June 14, 2019. Pursuant to the Marsch Letter Agreement, the Company (i) accelerated the vesting of 835 of the service-based restricted stock units granted to Mr. Marsch in 2019 and (ii) accelerated the vesting of 835 performance-based restricted stock units granted to Mr. Marsch in 2019 and waived the remaining performance conditions therefor. All such restricted stock units vested in full on June 22, 2019, and all of Mr. Marsch’s other unvested equity awards granted in 2019 were forfeited and cancelled. |
|
|
WINGSTOP INC. 2020 PROXY STATEMENT | 59 |
Table of Contents
EXECUTIVE COMPENSATION
Outstanding Equity Awards at Fiscal Year-End Table
The following table sets forth information regarding the outstanding equity awards held by our named executive officers as of the end of the 2019 fiscal year:
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
|
Number of Shares or Units of Stock That Have Not Vested |
Market Value of That ($) |
Equity Incentive Plan Number Unearned Shares, or Other Rights That Not (#) |
Equity Incentive Plan Market or Payout of Shares, or Other Rights That Have Not Vested | ||||||||||||||||||||||||||||||||||||||||
|
Charles R. Morrison |
|
8/30/2012 |
(2) |
|
79,816 |
|
|
— |
|
|
1.52 |
|
|
8/30/2022 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||||||||||||
| 1/31/2017 | (3) | — | — | — | — | — | — | 35,125 | 3,028,126 | |||||||||||||||||||||||||||||||||||||||||
| 1/31/2017 | (4) | — | — | — | — | 5,854 | 504,673 | — | — | |||||||||||||||||||||||||||||||||||||||||
| 2/20/2018 | (3) | — | — | — | — | — | — | 22,712 | 1,958,002 | |||||||||||||||||||||||||||||||||||||||||
| 2/20/2018 | (4) | — | — | — | — | 7,571 | 652,696 | — | — | |||||||||||||||||||||||||||||||||||||||||
| 7/31/2018 | (5) | — | — | — | — | — | — | 10,190 | 878,480 | |||||||||||||||||||||||||||||||||||||||||
| 3/6/2019 | (3) | — | — | — | — | — | — | 15,184 | 1,309,013 | |||||||||||||||||||||||||||||||||||||||||
| 3/6/2019 | (4) | — | — | — | — | 7,592 | 654,506 | — | — | |||||||||||||||||||||||||||||||||||||||||
|
|
11/13/2019 | (6) | — | — | — | — |
|
|
|
— | — | 40,000 | 3,448,400 | |||||||||||||||||||||||||||||||||||||
|
Michael J. Skipworth |
|
12/12/2014 |
(7) |
|
2,725 |
|
|
2,725 |
|
|
6.29 |
|
|
12/12/2024 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||||||||||||
| 2/28/2017 | (4) | — | — | — | — | 882 | 76,037 | — | — | |||||||||||||||||||||||||||||||||||||||||
| 8/1/2017 | (8) | — | — | — | — | — | — | 3,299 | 284,407 | |||||||||||||||||||||||||||||||||||||||||
| 8/1/2017 | (4) | — | — | — | — | 1,649 | 142,160 | — | — | |||||||||||||||||||||||||||||||||||||||||
| 2/20/2018 | (8) | — | — | — | — | — | — | 3,453 | 297,683 | |||||||||||||||||||||||||||||||||||||||||
| 2/20/2018 | (4) | — | — | — | — | 3,452 | 297,597 | — | — | |||||||||||||||||||||||||||||||||||||||||
| 9/5/2018 | (5) | — | — | — | — | — | — | 5,100 | 439,671 | |||||||||||||||||||||||||||||||||||||||||
| 3/6/2019 | (8) | — | — | — | — | — | — | 3,872 | 333,805 | |||||||||||||||||||||||||||||||||||||||||
|
|
3/6/2019 | (4) | — | — | — | — |
|
|
|
3,872 | 333,805 | — | — | |||||||||||||||||||||||||||||||||||||
|
Lawrence D. Kruguer(10) |
|
6/11/2015 |
(9) |
|
26,315 |
|
|
10,528 |
|
|
12.93 |
|
|
6/11/2025 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||||||||||||
| 5/18/2016 | (11) | — | — | — | — | 1,465 | 126,298 | — | — | |||||||||||||||||||||||||||||||||||||||||
| 2/28/2017 | (8) | — | — | — | — | — | — | 1,901 | 163,885 | |||||||||||||||||||||||||||||||||||||||||
| 2/28/2017 | (4) | — | — | — | — | 1,901 | 163,885 | — | — | |||||||||||||||||||||||||||||||||||||||||
| 2/20/2018 | (8) | — | — | — | — | — | — | 3,634 | 313,287 | |||||||||||||||||||||||||||||||||||||||||
| 2/20/2018 | (4) | — | — | — | — | 3,634 | 313,287 | — | — | |||||||||||||||||||||||||||||||||||||||||
| 3/6/2019 | (8) | — | — | — | — | — | — | 3,645 | 314,235 | |||||||||||||||||||||||||||||||||||||||||
|
|
3/6/2019 | (4) | — | — | — | — |
|
|
|
3,645 | 314,235 | — | — | |||||||||||||||||||||||||||||||||||||
|
Christina M. Clarke |
|
11/7/2018 |
(8) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
596 |
|
|
51,381 |
| |||||||||||||||||||||||
| 11/7/2018 | (4) | — | — | — | — | 596 | 51,381 | — | — | |||||||||||||||||||||||||||||||||||||||||
| 3/6/2019 | (8) | — | — | — | — | — | — | 912 | 78,624 | |||||||||||||||||||||||||||||||||||||||||
|
|
3/6/2019 | (4) | — | — | — | — |
|
|
|
912 | 78,624 | — | — | |||||||||||||||||||||||||||||||||||||
|
Madison A. |
|
3/13/2017 |
(8) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,926 |
|
|
166,040 |
| |||||||||||||||||||||||
| 3/13/2017 | (4) | — | — | — | — | 1,926 | 166,040 | — | — | |||||||||||||||||||||||||||||||||||||||||
| 2/20/2018 | (8) | — | — | — | — | — | — | 2,271 | 195,783 | |||||||||||||||||||||||||||||||||||||||||
| 2/20/2018 | (4) | — | — | — | — | 2,271 | 195,783 | — | — | |||||||||||||||||||||||||||||||||||||||||
| 3/6/2019 | (8) | — | — | — | — | — | — | 2,582 | 222,594 | |||||||||||||||||||||||||||||||||||||||||
|
|
3/6/2019 | (4) | — | — | — | — |
|
|
|
2,582 | 222,594 | — | — | |||||||||||||||||||||||||||||||||||||
|
Maurice |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| ||||||||||||||||||||
|
Darryl R. |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| ||||||||||||||||||||
| 60 | WINGSTOP INC. 2020 PROXY STATEMENT |
|
Table of Contents
EXECUTIVE COMPENSATION
| (1) | Amounts shown reflect the value of the underlying common stock calculated by multiplying the number of unvested restricted stock units by the closing price of our common stock on the Nasdaq on December 27, 2019, the last trading day of fiscal year 2019, which was $86.21 per share. |
| (2) | Represents a stock option representing the right to purchase 204,375 shares of common stock, which vested in four equal annual installments beginning on the first anniversary of the date of grant. The exercise price of this stock option was originally $3.80 per share but has been reduced to $1.52 to reflect the impact of special dividends paid to our stockholders. |
| (3) | Represents performance-based restricted stock units that vest based upon the achievement of EBITDA or Adjusted EBITDA goals for a three-year period. For additional information, see “Elements of Executive Compensation—Equity Incentive Awards—Fiscal Year 2019 Equity Grants.” |
| (4) | Represents an award of service-based restricted stock units that vest in three equal annual installments beginning on the first anniversary of the date of grant. |
| (5) | Represents the target number of performance-based restricted stock units that vest based upon the level of cumulative new sales achieved over a three-year period, beginning July 1, 2018 and ending June 26, 2021, and potentially modified based on the Company’s total stockholder return for the same period as measured against that of the companies in the S&P 600 Restaurant Index. The number of restricted stock units that would vest upon threshold performance achievement is equal to 25% of the target number of restricted stock units, and the number that would vest upon maximum performance achievement is equal to 500% of the target number. |
| (6) | Represents performance-based restricted stock units that vest in four equal annual installments, beginning on the second anniversary of the date of grant, if, during the Company’s 2020 fiscal year, the Company maintains and sustains a domestic operations digital sales mix (from all channels, including delivery) of at least 40%. For additional information, see “Leadership Continuity and Chief Executive Officer Contract Renewal—Extension of Mr. Morrison’s Employment Agreement.” |
| (7) | Represents stock options representing the right to purchase an aggregate of 27,250 shares of common stock, half of which vest based on the achievement of service-based conditions and half of which based upon the achievement of performance-based conditions. The 13,625 performance-based stock options vest in five equal annual installments upon the Company’s achievement of an annual Adjusted EBITDA target for each of the 2015, 2016, 2017, 2018, and 2019 fiscal years. The 13,625 service-based stock options vested in five equal annual installments beginning on the first anniversary of the date of grant. The exercise price of these stock options was originally $8.90 per share but has been reduced to $6.29 to reflect the impact of special dividends paid to our stockholders. |
| (8) | Represents performance-based restricted stock units that vest in three equal annual installments based upon the achievement of EBITDA or Adjusted EBITDA goals for each of three consecutive fiscal years. For additional information, see “Elements of Executive Compensation—Equity Incentive Awards—Fiscal Year 2019 Equity Grants.” |
| (9) | Represents stock options representing the right to purchase an aggregate of 52,632 shares of common stock, half of which vest based on the achievement of service-based conditions and half of which based upon the achievement of performance-based conditions. The 26,316 performance-based stock options vested in four equal annual installments upon the Company’s achievement of an annual Adjusted EBITDA target for each of the 2016, 2017, 2018, and 2019 fiscal years. The 26,316 service-based stock options vested in four equal annual installments beginning on the first anniversary of the date of grant. The exercise price of these stock options was originally $19.00 per share but has been reduced to $12.93 to reflect the impact of special dividends paid to our stockholders. |
| (10) | On January 14, 2020, in connection with Mr. Kruguer’s resignation, he entered into a letter agreement with the Company (the “Kruguer Letter Agreement”). Pursuant to the Kruguer Letter Agreement, on January 22, 2020, the Company accelerated the vesting of 5,246 shares of common stock underlying the service-based stock option granted to Mr. Kruguer on June 11, 2015. On March 7, 2020, the effective date of Mr. Kruguer’s resignation, all unvested shares of restricted stock, unvested restricted stock units, and unvested stock options held Mr. Kruguer were automatically forfeited. Mr. Kruguer may exercise vested stock options within the 90-day period following the effective date of his resignation, following which time any unexercised stock options will also be forfeited. |
| (11) | Represents an award of 5,862 shares of service-based restricted stock, which vest in four equal annual installments beginning on the first anniversary of the date of grant. In connection with Mr. Kruguer’s resignation, 1,465 unvested shares of restricted stock were automatically forfeited on March 7, 2020. |
| (12) | Mr. Cooper’s employment was terminated effective September 4, 2019; all of Mr. Cooper’s unvested equity awards were automatically forfeited. |
| (13) | Mr. Marsch retired from the Company effective June 14, 2019. Pursuant to the Marsch Letter Agreement, the Company accelerated the vesting of (i) 1,404 shares underlying performance-based stock options, (ii) 1,405 shares underlying service-based options, (iii) 3,986 performance-based restricted stock units, and (iv) 3,985 service-based restrictive stock units, all of which were originally granted pursuant to the 2015 Omnibus Plan and were scheduled to vest by March 2020 based upon the Company meeting certain adjusted EBITDA thresholds for fiscal year 2019 (with respect to the performance-based awards) or the grant-date anniversary specified in the applicable award agreement (with respect to the service-based awards). |
|
|
WINGSTOP INC. 2020 PROXY STATEMENT | 61 |
Table of Contents
EXECUTIVE COMPENSATION
Option Exercises and Stock Vested Table
The following table sets forth a summary of the option exercises and vesting of restricted stock units and shares of restricted stock during fiscal year 2019 for each of the named executive officers:
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||
| Name
|
Number of Shares
|
Value Realized
|
Number of Shares
|
Value Realized on Vesting(2) ($)
|
||||||||||||||||
| Charles R. Morrison |
60,009 | 4,180,117 | 9,640 | 643,407 | ||||||||||||||||
| Michael J. Skipworth |
5,450 | 387,852 | 7,634 | 542,873 | ||||||||||||||||
| Lawrence D. Kruguer |
5,263 | 267,470 | 7,437 | 493,208 | ||||||||||||||||
| Christina M. Clarke |
— | — | 594 | 42,706 | ||||||||||||||||
| Madison A. Jobe |
— | — | 6,124 | 411,441 | ||||||||||||||||
| Maurice Cooper |
— | — | 2,166 | 174,850 | ||||||||||||||||
| Darryl R. Marsch |
8,427 | 618,003 |
|
|
|
14,272 | 1,150,546 | |||||||||||||
| (1) | Amounts shown reflect the value of shares obtained upon exercise of the stock option by taking the difference between the market price of the underlying securities at exercise and the exercise price of the option. |
| (2) | Amounts shown reflect the value of shares obtained upon the vesting of restricted stock units by multiplying the number of vested restricted stock units by the closing price of our common stock on the Nasdaq on the date of vesting. |
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EXECUTIVE COMPENSATION
Potential Payments upon Termination or Change in Control
The following table shows potential payments to our named executive officers that were employed by us as of December 28, 2019, the last day of fiscal year 2019, pursuant to (i) with respect to our named executive officers other than Mr. Morrison, our Executive Severance Plan and (ii) with respect to Mr. Morrison, Mr. Morrison’s employment agreement, in each case for various scenarios involving a death, disability, change in control, termination without cause or termination for good reason, using, where applicable, the closing price of our common stock of $86.21 as reported on the Nasdaq as of December 27, 2019, the last trading day of fiscal year 2019, and assuming that the applicable triggering event occurred on December 28, 2019.
| Name | Benefit | Death ($) |
Disability ($) |
Change in ($) |
Termination ($) |
Termination by NEO for Good Reason ($) |
||||||||||||||||
| Charles R. Morrison |
Salary continuation (24 months) | — | — | 2,000,000 | 1,600,000 | 1,600,000 | ||||||||||||||||
|
|
2019 Bonus Plan bonus(2) | 700,000 | 700,000 | 1,750,000 | 1,400,000 | 1,400,000 | ||||||||||||||||
|
|
Continuation of health benefits | — | 50,786 | 50,786 | 50,786 | 50,786 | ||||||||||||||||
|
|
Vesting of equity awards | 4,087,591 | 4,087,591 | 12,433,896 | — | — | ||||||||||||||||
|
|
Total |
4,787,591 | 4,787,591 | 16,234,682 | 3,050,786 | 3,050,786 | ||||||||||||||||
| Michael J. Skipworth |
Salary continuation | — | — | 850,000 | 637,500 | 637,500 | ||||||||||||||||
|
|
2019 Bonus Plan bonus | — | — | 510,000 | (2) | 255,000 | (3) | 255,000 | (3) | |||||||||||||
|
|
Continuation of health benefits | — | — | 47,355 | 35,516 | 35,516 | ||||||||||||||||
|
|
Vesting of equity awards | 1,318,137 | 1,318,137 | 2,422,948 | — | — | ||||||||||||||||
|
|
Total |
1,318,137 | 1,318,137 | 3,830,303 | 928,016 | 928,016 | ||||||||||||||||
| Lawrence D. Kruguer |
Salary continuation | — | — | 800,000 | 600,000 | 600,000 | ||||||||||||||||
|
|
2019 Bonus Plan bonus | — | — | 480,000 | (2) | 240,000 | (3) | 240,000 | (3) | |||||||||||||
|
|
Continuation of health benefits | — | — | 47,355 | 35,516 | 35,516 | ||||||||||||||||
|
|
Vesting of equity awards | 1,236,294 | 1,236,294 | 2,094,859 | — | — | ||||||||||||||||
|
|
Total |
1,236,294 | 1,236,294 | 3,422,214 | 875,516 | 875,516 | ||||||||||||||||
| Christina M. Clarke |
Salary continuation | — | — | 510,000 | 340,000 | 340,000 | ||||||||||||||||
|
|
2019 Bonus Plan bonus | — | — | 188,550 | (2) | 125,700 | (3) | 125,700 | (3) | |||||||||||||
|
|
Continuation of health benefits | — | — | 37,751 | 25,168 | 25,168 | ||||||||||||||||
|
|
Vesting of equity awards | 103,797 | 103,797 | 260,009 | — | — | ||||||||||||||||
|
|
Total |
103,797 | 103,797 | 996,310 | 490,868 | 490,868 | ||||||||||||||||
| Madison A. Jobe |
Salary continuation | — | — | 510,000 | 340,000 | 340,000 | ||||||||||||||||
|
|
2019 Bonus Plan bonus | — | — | 255,000 | (2) | 170,000 | (3) | 170,000 | (3) | |||||||||||||
|
|
Continuation of health benefits | — | — | 25,380 | 16,920 | 16,920 | ||||||||||||||||
|
|
Vesting of equity awards | 676,145 | 676,145 | 1,168,835 | — | — | ||||||||||||||||
|
|
Total |
676,145 | 676,145 | 1,959,215 | 526,920 | 526,920 | ||||||||||||||||
| (1) | Assumes that, in connection with the change of control, (a) with respect to Mr. Morrison, his employment is terminated without cause or for good reason within a two-year period following a change of control, or (b) with respect to the other named executive officers, their respective employment is terminated without cause, for good reason, or as a result of the death of such officer within a two-year period following a change of control. |
| (2) | Calculated based on the target bonus amount that our named executive officers would have been eligible for under the 2019 Bonus Plan. |
| (3) | Calculated based on the amount of bonus our named executive officers would have been entitled to under the 2019 Bonus Plan based on the Company’s actual performance during the 2019 performance period, which is the same bonus amount actually paid to our named executive officers for 2019 and reported in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table. |
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EXECUTIVE COMPENSATION
Mr. Marsch retired from the Company effective June 14, 2019. Pursuant to the Marsch Letter Agreement, Mr. Marsch agreed to provide transition assistance through the effective date of his retirement, to not disclose confidential information, and to a general release of claims in favor of the Company. In exchange, the Company accelerated the vesting of (i) 1,404 shares underlying performance-based stock options, (ii) 1,405 shares underlying service-based stock options, (iii) 3,986 performance-based restricted stock units, and (iv) 3,985 service-based restrictive stock units, all of which were scheduled to vest by March 2020 based upon the Company meeting certain adjusted EBITDA thresholds for fiscal year 2019 (with respect to the performance-based awards) or the grant-date anniversary specified in the applicable award agreement (with respect to the service-based awards). All of Mr. Marsch’s other unvested equity awards that were scheduled to vest after June 14, 2019 were forfeited and cancelled.
Mr. Cooper’s employment was terminated effective September 4, 2019. Pursuant to the Executive Severance Plan, Mr. Cooper was entitled to severance benefits consisting of (i) 1.5 times his base salary, (ii) the pro-rated portion of Mr. Cooper’s bonus that he would have earned under the 2019 Bonus Plan had he been employed at the end of the 2019 fiscal year and (iii) COBRA premium payments for the 18-month period following termination. In exchange for such severance payments, Mr. Cooper signed a general release of claims in favor of the Company. All of Mr. Cooper’s unvested equity awards that were scheduled to vest after September 4, 2019 were forfeited and cancelled.
Mr. Kruguer resigned from the Company effective March 7, 2020. Pursuant to the Kruguer Letter Agreement, Mr. Kruguer agreed to a customary confidentiality provision and to a general release of claims in favor of the Company. In exchange, the Company agreed to accelerate the vesting of 5,264 shares underlying service-based stock options that were originally scheduled to vest on June 11, 2020 and provide severance benefits consisting of (i) 1.5 times his base salary and (ii) COBRA premium payments for the 18-month period following Mr. Kruguer’s resignation. All of Mr. Kruguer’s other unvested equity awards that were scheduled to vest after March 7, 2020 were forfeited and cancelled.
Equity Compensation Plan Table
The following table includes information regarding securities authorized for issuance under our equity compensation plans as of December 28, 2019:
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights(1) |
Weighted-average exercise price of outstanding options, warrants and rights(2) |
Number of securities remaining for future issuance under equity compensation plans |
|||||||||
| Equity compensation plans approved by security holders |
228,000 | $5.72 | 1,703,156 | |||||||||
| Equity compensation plans not approved by security holders |
— | — | — | |||||||||
| (1) | Includes restricted stock awards, service-based restricted stock units, and performance-based restricted stock units that vest based upon the achievement of EBITDA or Adjusted EBITDA goals. For additional information, see “Elements of Executive Compensation—Equity Incentive Awards—Fiscal Year 2019 Equity Grants.” |
| (2) | The amount reported in “Weighted-average exercise price of outstanding options, warrants and rights” does not take into account restricted stock awards or restricted stock units because they have no exercise price. |
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We know of no other business to be transacted, but if any other matters do come before the meeting, the persons named as proxies in the accompanying proxy, or their substitutes, will vote or act with respect to them in accordance with their best judgment.
| By order of the Board of Directors, |
| Albert G. McGrath |
| Senior Vice President, General Counsel & Secretary |
|
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PROPOSED CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION OF
WINGSTOP INC.
The text of the proposed amendment is marked to reflect the proposed changes. Additions to the proposed amendment are indicated by bolded underlined text, and deletions are indicated by strike-outs.
Wingstop Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), does hereby certify that:
1. This Certificate of Amendment (the “Certificate of Amendment”) amends the provisions of the Corporation’s Certificate of Incorporation filed with the Secretary of State on March 18, 2015, as subsequently amended and restated (the “Certificate of Incorporation”).
2. Article V(c) of the Certificate of Incorporation is hereby amended and restated in its entirety as follows:
Removal. Subject to the special rights of the holders of any series of Preferred Stock to elect directors, and notwithstanding any other
provision of this Certificate of Incorporation, directors of the Corporation may be removed only for cause at a meeting of stockholders called for that purpose, by the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66 2/3%) of the Voting Stock, voting together as a single class; provided, however, at any time RC II WS LLC (“RC II
WS”) and its Affiliates collectively own at least fifty percent (50%) of the Voting Stock, directors may be removed with or without cause upon the affirmative vote of RC II WS and its Affiliates that beneficially own outstanding shares of
Voting Stock. “Affiliate” means, with respect to any person, any other person that controls, is controlled by, or is under common control with such person (other than with respect to RC II WS, the Corporation and its subsidiaries); the
term “control,” as used in this definition, means the power to direct or cause the direction of the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or
otherwise, and “controlled” and “controlling” have meanings correlative to the foregoing. The term “person” means an individual, any general partnership, limited partnership, limited liability company, corporation,
trust, business trust, joint stock company, joint venture, unincorporated association, cooperative or association or any other legal entity or organization of whatever nature, and shall include any successor (by merger or otherwise) of such entity.
For the purpose of this Certificate of Incorporation, “beneficial ownership” shall be determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).
3. Article VII(a) of the Certificate of Incorporation is hereby amended and restated in its entirety as follows:
Action by Written Consent. The stockholders of the Corporation may take any action required or
permitted to be taken by the Corporation’s stockholders by written consent in lieu of a meeting, provided, however, at any time RC II WS and its Affiliates collectively own less than fifty percent (50%) of the outstanding shares of Common
Stock, a Any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any
consent in writing by such stockholders.
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APPENDIX A
4. Article VIII(c)(v) of the Certificate of Incorporation is hereby amended and restated in its entirety as follows:
“Exempted Person” means any of RC II WS, any affiliate of RC II WS (other than the Corporation and its subsidiaries), any of
their respective direct or indirect transferees of at least 15% of the Corporation’s outstanding common stock and any “group” of which any such person is a part under Rule 13d-5 of the Exchange
Act. Reserved.
5. Article VIII(c)(vi) of the Certificate of Incorporation is hereby amended and restated in its entirety as follows:
“interested stockholder” means any person (other than the Corporation and its
subsidiaries) that (A) is the owner of fifteen percent (15%) or more of the Voting Stock of the Corporation, or (B) is an affiliate or associate of the Corporation and was the owner of fifteen percent (15%) or more of the Voting Stock of
the Corporation at any time within the three (3) year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder; and the affiliates and associates of such person; but
“interested stockholder” shall not include (1) any Exempted Person, or (2) any person whose ownership of shares in excess of the fifteen percent (15%) limitation
set forth herein is the result of any action taken solely by the Corporation; provided that with respect to clause (2) such person shall be an interested stockholder if thereafter such person acquires
additional shares of Voting Stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an interested stockholder, the Voting Stock
of the Corporation deemed to be outstanding shall include stock deemed to be owned by the person through application of the definition of “owner” below but shall not include any other unissued stock of the Corporation which may be issuable
pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.
6. Article IX of the Certificate of Incorporation is hereby amended and restated in its entirety as follows:
(a) Certain Acknowledgments. In recognition and anticipation that
(i) the directors, officers and/or employees of RC II WS and its Affiliates may serve as directors and/or officers of the Corporation, (ii) RC II WS and its Affiliates
engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which
the Corporation, directly or indirectly, may engage, and (iii) that the Corporation may engage in material business transactions with RC II WS and its Affiliates and that the Corporation is expected to benefit
therefrom, the provisions of this Article IX are set forth to regulate and define the conduct of certain affairs of the Corporation as they may involve RC II WS or its Affiliates, and the powers, rights, duties and liabilities of the Corporation and
its officers, directors and stockholders in connection therewith.
(b) Competition and Corporate Opportunities. Neither of RC II WS nor any of its
Affiliates shall have any duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as the Corporation and neither RC II WS nor any officer or director thereof (except as provided in
paragraph (c) below) shall be liable to the Corporation or its stockholders for breach of any fiduciary duty solely by reason of any such activities of RC II WS or any of its Affiliates. In the event that RC II
WS or any of its Affiliates acquires knowledge of a potential transaction or matter which may be a corporate opportunity for itself and the Corporation, neither of RC II WS nor any of its Affiliates shall have any duty to communicate or offer such
corporate opportunity to the Corporation and shall not be liable to the Corporation or its stockholders for breach of any fiduciary duty as a stockholder of the Corporation solely by reason of the fact that RC II WS or any of its
Affiliates pursues or acquires such corporate opportunity for itself, directs such corporate opportunity to another person, or does not communicate information regarding such corporate opportunity to the Corporation.
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APPENDIX A
(c) Allocation of Corporate Opportunities. In the event that a director or officer of the
Corporation who is also a director or officer of RC II WS acquires knowledge of a potential transaction or matter which may be a corporate opportunity for the Corporation and RC II WS or any of its Affiliates, such director or officer of the
Corporation shall have fully satisfied and fulfilled the fiduciary duty of such director or officer to the Corporation and its stockholders with respect to such corporate opportunity, if such director or officer acts in a manner consistent with the
following policy:
i. A corporate opportunity offered to any person who is a
director or officer of the Corporation, and who is also a director or officer of RC II WS or any of its Affiliates, shall belong to the Corporation if such opportunity is expressly offered to such person in writing solely in his or her capacity as a
director or officer of the Corporation.
ii. Otherwise, such corporate opportunity
shall belong to RC II WS and its Affiliates.
(d) Certain Matters
Deemed Not Corporate Opportunities. In addition to and notwithstanding the foregoing provisions of this Article IX, a corporate opportunity shall not be deemed to belong to the Corporation if it is a business opportunity that the Corporation is not
permitted to undertake under the terms of Article III or that the Corporation is not financially able or contractually permitted or legally able to undertake, or that is, from its nature, not in the line of the Corporation’s business or is of
no practical advantage to it or that is one in which the Corporation has no interest or reasonable expectancy.
(e) Renouncement of Certain Corporate Opportunities. Except as provided in
paragraph (c)(i) above, if a director or officer of the Corporation who is also a director or officer of RC II WS or any of its Affiliates acquires knowledge of a potential transaction or matter which may be a corporate opportunity, the Corporation
shall have no interest in such corporate opportunity and no expectancy that such corporate opportunity be offered to it, any such interest or expectancy being hereby renounced, so that such person shall have no duty to present such corporate
opportunity to the Corporation and shall have the right to hold and exploit any such corporate opportunity for its (and its officers’, employees’, directors’, agents’, stockholders’, members’, partners’,
affiliates’ or subsidiaries’) own account or to direct, sell, assign or transfer such corporate opportunity to persons other than the Corporation. Such person shall not breach any fiduciary duty to the Corporation or to its stockholders by
reason of the fact that such person does not present such corporate opportunity to the Corporation or pursues, acquires or exploits such corporate opportunity for itself or directs, sells, assigns or transfers such corporate opportunity to another
person.
(f) Agreements and Transactions with RC II WS. In the
event that RC II WS or any of its Affiliates enters into an agreement or transaction with the Corporation, a director or officer of the Corporation who is also a director or officer of RC II WS or any of its Affiliates shall have fully satisfied and
fulfilled the fiduciary duty of such director or officer to the Corporation and its stockholders with respect to such agreement or transaction, if:
i. The agreement or transaction was approved by (A) an
affirmative vote of a majority of the members of the Board of Directors of the Corporation who are not persons with a material financial interest in the agreement or transaction (“Interested Persons”), (B) an affirmative vote of a majority
of the members of a committee of the Board of Directors of the Corporation consisting of members who are not Interested Persons or (C) one or more of the Corporation’s officers or
employees who are not Interested Persons and who were authorized by the Board of Directors of the Corporation or committee thereof in the manner set forth in (A) and (B) above, in each case after being made
aware of the material facts of the relationship between each of the Corporation and RC II WS or an Affiliate thereof and the material terms and facts of the agreement or transaction;
ii. The agreement or transaction was fair to the Corporation at the time the agreement or
transaction was entered into by the Corporation; or
iii. The agreement or
transaction was approved by an affirmative vote of a majority of the shares of the Corporation’s Common Stock entitled to vote, excluding shares beneficially owned by RC II WS, any Affiliate or Interested Person.
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APPENDIX A
(g) Termination. The provisions of this Article IX shall have no further force or
effect for RC II WS and its Affiliates at such time as RC II WS and any company controlling, controlled by or under common control with RC II WS shall first cease to be the owner, in the aggregate, of Common Stock representing five percent (5%) or
more of the votes entitled to be cast by the holders of all the then outstanding shares of Common Stock; provided, however, that such termination shall not terminate the effect of such provisions with respect to
(i) any agreement between the Corporation and RC II WS or any Affiliate thereof that was entered into before such time or any transaction entered into in the performance of such agreement, whether entered into
before or after such time, or (ii) any transaction or agreement entered into between the Corporation and RC II WS or any affiliate thereof.
(h) Deemed Notice. Any person or entity purchasing or otherwise acquiring any
interest in any shares of the Corporation shall be deemed to have notice or and to have consented to the provisions of this Article IX. Reserved.
7. Article XI of the Certificate of Incorporation is hereby amended and restated in its entirety as follows:
The Corporation reserves the right to alter, amend, repeal or adopt any provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by the DGCL, and all rights conferred upon stockholders herein are granted subject to this reservation. Notwithstanding anything to the contrary contained in this Certificate of Incorporation, and notwithstanding that a lesser
percentage may be permitted from time to time by applicable law, no provision of Article V, Article VI, paragraphs (a), (b) and (c) of Article VII, Article VIII, Article IX, Article X and this Article XI may be altered, amended or repealed in
any respect, nor may any provision or bylaw inconsistent therewith be adopted, unless in addition to any other vote required by this Certificate of Incorporation or otherwise required by law, (i) at any
time RC II WS and its Affiliates collectively own at least fifty percent (50%) of the Voting Stock, such alteration, amendment, repeal or adoption is approved by the affirmative vote of the holders of a majority of the Voting Stock, voting together
as a single class, and (ii) at any time RC II WS and its Affiliates collectively own less than fifty percent (50%) of the Voting Stock, such alteration, amendment, repeal or adoption is approved at a
meeting of the stockholders called for that purpose by, in addition to any other vote otherwise required by law, the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66 2/3%) of the Voting Stock, voting together as a single class.
8. The foregoing amendment to the Certificate of Incorporation was duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law.
9. This Certificate of Amendment shall become effective when it is filed with the Secretary of State of the State of Delaware.
[Remainder of Page Intentionally Left Blank]
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APPENDIX A
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by its duly authorized officer this day of , 2020.
| WINGSTOP INC., a Delaware corporation |
| By: |
| |
| Name: |
| |
| Title: |
| |
|
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WINGSTOP INC. 2020 PROXY STATEMENT | A-5 |
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Preliminary Copy
ANNUAL MEETING OF WINGSTOP INC. Annual Meeting of Wingstop Inc. Date: June 8, 2020 to be held on Monday, June 8, 2020 Time: 10:00 A.M. (Central Time) for Holders as of April 13, 2020 Place: Annual Meeting to be held live via the internet - please visit www.proxydocs.com/WING for more details. This proxy is being solicited on behalf of the Board of Directors Please make your marks like this: Use dark black pencil or pen only Board of Directors Recommends a Vote FOR all Nominees listed in . VOTE BY: INTERNET TELEPHONE proposal 1 and FOR proposals 2, 3, and 4. Call provided www Go To .proxypush.com/WING 866-243-5450 Cast your vote online Use any touch-tone telephone. 1: Election of Directors Directors . OR Recommend Meeting . Have your Proxy Card/Voting Instruction Form ready. For Withhold View Documents 01 Lynn Crump-Caine For Follow the simple recorded instructions. envelope MAIL 02 Wesley S. McDonald For the Mark, and in OR sign date your Proxy Card/Voting Instruction Form. Detach your Proxy Card/Voting Instruction Form. For Against Abstain Return your Proxy Card/Voting Instruction Form in the postage-paid envelope provided. 2: Ratify the appointment of KPMG LLP as our For portion independent registered public accounting The undersigned hereby appoints Charles R. Morrison and Michael J. Skipworth, and each or either of them, as the firm for fiscal year 2020.this true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes them, and 3: Approve, on an advisory basis, the just each of them, to vote all the shares of capital stock of Wingstop Inc. which the undersigned is entitled to vote at said For compensation of our named meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly executive officers. brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys return to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy 4: Approve amendments to our Certificate of Forand heretofore given. Incorporation to remove provisions that provide favorable rights to RC II WS LLC that THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION are no longer applicable IS GIVEN, SHARES WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS IN ITEM 1 AND FOR THE PROPOSALS IN ITEMS 2, 3, AND 4. 5: Consider may properly and come act upon before such the other annual business meeting as perforation or any adjournments or postponements the thereof. At To attend the meeting and vote your shares in PROXY TABULATOR FOR person, please mark this box. WINGSTOP INC. carefully P.O. BOX 8016 separate CARY, NC 27512-9903 Please Authorized Signatures - This section must be completed for your Instructions to be executed. Please Sign Here Please Date Above Please Sign Here Please Date Above Please sign exactly as your name(s) appears on your stock certificate. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy.
Table of Contents
Proxy —Wingstop Inc. Annual Meeting of Stockholders June 8, 2020 10:00 A.M. (Central Time) This Proxy is Solicited on Behalf of the Board of Directors The undersigned appoints Charles R. Morrison and Michael J. Skipworth, each with full power of substitution, to vote the shares of common stock of Wingstop Inc., a Delaware corporation (the “Company”), the undersigned is entitled to vote at the Annual Meeting of Stockholders on Monday, June 8, 2020 at 10:00 a.m. Central Time and any and all adjournment thereof, as set forth below. This proxy is revocable and will be voted as directed. However, if no instructions are specified, the proxy will be voted FOR the election of the director nominees Please specified in Item 1 and FOR the proposals in Items 2, 3, and 4. separate (CONTINUED AND TO BE SIGNED ON REVERSE SIDE) carefully at the perforation and return just this portion in the envelope provided .