UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

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FOOT LOCKER, INC.
(Name of Registrant as Specified in its Charter)
 
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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ANNUAL MEETING
OF SHAREHOLDERS

Proxy Statement

 

330 West 34th Street

New York, New York 10001

 

NoticeApril 12, 2019

Dear Fellow Shareholders:

Last year, I highlighted how our customers’ rapidly-changing preferences and shopping behaviors–fueled by access to information, influences, and ideas from around the world–were challenging for our Company and the broader retail industry. This year, I am pleased to report that, by focusing on our commitment to elevate the customer experience across each of 2016our channels and leveraging our strategic brand partnerships, we continued to differentiate our business and build positive momentum through each quarter of 2018. In 2019, we will continue to build on our strengths and seize opportunities to evolve our business by developing our internal assets and expanding into new markets.

New Strategic Framework. As we analyzed the ways in which our customers’ expectations have changed, it became clear to us that we needed to evolve in order to remain relevant and connected to our customers. To address this need, we redefined our purpose from being the leading global retailer of athletically inspired shoes and apparel toinspiring and empowering youth culture. We believe that we can achieve that vision at the heart of the sport and sneaker communities by leveraging our newcustomer connectedstrategic framework through the following five essential touchpoints—our Five Cs:

Everything we do starts with the customer. Our new strategic framework is built on knowing, engaging, and serving our customers–wherever and however they want to interact with us–in store or online. By executing against this framework, we believe we will have the focus and tools to achieve our four key strategic imperatives:

elevate the
customer experience		invest for
long-term growth		drive productivityleverage the power
of our people

New Long-Term Objectives. We have established new long-term financial targets for the 2019-23 period. Overall, we continue to aspire to consistently be a top quartile performer, with:

Sales

Mid-Single Digit

Compounded

Annual Growth Rate

Sales per Gross

Square Foot

$525 - $575

Earnings Before

Interest and Taxes Margin

Low Double-Digits*

Net Income Margin

High-Single

Digit

Return on

Invested Capital

Mid-Teens

Inventory

Turnover

3-4 Times*

*Because these non-GAAP measures are uncertain, these amounts have not been reconciled to GAAP.

Welcome to the Foot Locker, Inc. 2019 Annual Meeting of Shareholders

Investing in our Future. Throughout 2018, we allocated a significant portion of our capital and operating spending on enhancing our digital and logistics capabilities. In total, we invested $187 million into the business through our capital program in 2018. We have increased the program to $275 million for 2019 with a focus on the evolution of our store fleet—including more than a dozen new Power Store locations—and the further development of our digital and logistics capabilities. We are constantly looking at new ways to elevate the customer experience and harness the energy of youth culture. With these goals and our strategic imperatives in mind, we have invested $139 million to date in the following strategic minority investments:

○Carbon38 – a destination for women’s luxury activewear

○GOAT Group – a managed marketplace for customers to buy and sell authentic sneakers

○PENSOLE – a footwear design academy that, together with us and our vendor partners, will collaborate on new educational programs and the design and manufacture of exclusive products

○Rockets of Awesome – a children’s direct-to-customer apparel company

○Super Heroic – a lifestyle brand that designs, manufactures, and markets children’s footwear, clothing, and accessories

Expansion into Asia. This past year marked an important milestone for the Company, as we announced our expansion into Asia, reinforcing our commitment to bring sneaker culture to customers around the globe. To date, we have opened five stores and launched our digital channels across Singapore, Hong Kong, and Malaysia. In addition, we entered China through a limited offering in partnership with TMall (a Chinese business-to-consumer online retailer). Building upon that energy and passion for our brand and offerings, we’ve identified the need to evolve our organizational structure to support an accelerated growth strategy for the region. We opened an Asian headquarters in Singapore and realigned our organization into three distinct geographic regions: Europe, Middle East & Africa (EMEA), led by Vijay Talwar; Asia Pacific, led by Lewis P. Kimble; and North America, continues to be led by Stephen D. “Jake” Jacobs.

Environmental, Social, and Governance (ESG) Highlights.The Company and the Board of Directors (the “Board”) are focused on corporate social responsibility. Our ESG priorities are centered on:

OpportunityCommunityWorker DignitySustainability

We continuously look for new and better ways to foster a diverse and inclusive work environment, engage our surrounding communities, improve employee safety, and minimize our environmental impact, all while creating value for our shareholders.

Shareholder Engagement. We extended our proactive shareholder engagement program in 2018. These meetings provide an important platform to receive feedback from investors and are in addition to our Investor Relations team’s ongoing efforts. We believe this engagement program promotes transparency between the Board and our shareholders and builds informed and productive relationships. We appreciate this dialogue and the feedback we received and are committed to maintaining open lines of communication with shareholders.

The Notice of 2019 Annual Meeting of Shareholders and Proxy Statement contain details of the business to be conducted at the 2019 Annual Meeting.

Your vote is very important to us, so regardless of whether you attend the meeting, please vote your shares.

This is an exciting time for Foot Locker, Inc. We are proud of what we accomplished in 2018, but we are just getting started on our new journey toinspire and empower youth culture. By focusing on our strategic imperatives, leveraging our global presence, and putting the customer at the center of everything we do, we believe we will build upon last year’s momentum and deliver against our updated long-term goals. I look forward to sharing our success with each of you at the 2019 Annual Meeting.

Sincerely,

 

    

Richard A. Johnson

Chairman, President and

Chief Executive Officer

330 West 34th Street

New York, New York 10001

Date and Time:TimeLocationRecord Date

May 18, 201622, 2019 at 9:00 a.m.,

Eastern Daylight Time (“EDT”)

Location:

AMC Loews Theatre, 312

NYC33, 125 West 34th33rd Street,
New York, New York 10001 (please see Page 93

►   (see page 76 for directions
to the location of the 20162019 Annual Meeting of Shareholders)

Record Date:Meeting)

Shareholders of record as of March 21, 201625, 2019 can vote at this meeting

Items of Business

Items of Business:Proposal•Board’s Voting Recommendation
Elect sixten members to the Board of Directors (the “Board”) to serve for one-year terms✓  FOReach nominee
•Approve, on an advisory basis, our named executive officers’ (“NEOs”) compensation✓  FOR
Ratify the appointment of KPMG LLP as our independent registered public accounting firm for the 20162019 fiscal year✓ FOR

Transact such other business as may properly come before the meeting and at any adjournment or postponement of the meeting

Proxy Voting

You may vote using any of the following methods:

Telephone

 •ReapproveIf you are located within the performance goals underUnited States or Canada, you may vote your shares by calling 800-690-6903 and following the Foot Locker Annual Incentive Compensation Plan, as Amendedrecorded instructions. Telephone voting is available 24 hours a day and Restated (the “Annual Bonus Plan”)will be accessible until 11:59 p.m. EDT on May 21, 2019. The telephone voting system has easy to follow instructions and allows you to confirm that the system has properly recorded your vote. If you vote by telephone, you do NOT need to return a proxy card or voting instruction form.

Scanning

•ApproveYou may scan the Foot Locker Long-Term Incentive Compensation Plan, as AmendedQR Code provided to you to vote your shares through the internet with your mobile device. Internet voting is available 24 hours a day and Restated (the “LTIP”)will be accessible until 11:59 p.m. EDT on May 21, 2019. You will be able to confirm that the system has properly recorded your vote. If you scan your QR code to vote, you do NOT need to return a proxy card or voting instruction form.

Ballot

•Approve, on an advisory basis, our named executive officers’ compensation
 •Vote, on an advisory basis, on whetherYou may vote by ballot at the shareholderAnnual Meeting if you decide to attend in person. If your shares are held in the name of a bank, broker or other holder of record, you must obtain a proxy, executed in your favor, from the holder of record to be able to vote to approve our named executive officers’ compensation should occur every 1, 2, or 3 years
•Transact such other business as may properly come beforeat the meeting and at any adjournment or postponement
Proxy Voting:Your vote is important to us. Whether or notmeeting. If you plan to attendvote by ballot at the 2016 Annual Meeting, in person, please promptlyyou do NOT need to return a proxy card or voting instruction form.

Internet

You may vote your shares through the internet atproxyvote.com. Internet voting is available 24 hours a day and will be accessible until 11:59 p.m. EDT on May 21, 2019. As with telephone voting, you will be able to confirm that the system has properly recorded your vote. If you vote via the internet, you do NOT need to return a proxy card or voting instruction form.

Mail

If you received printed copies of the proxy materials by mail, you may vote by telephone or by Internet, or by completing, signing, dating, and returningmail. Simply mark your proxy card or votevoting instruction form, sodate and sign it, and return it in the postage-paid envelope that we included with your shares will be represented at the 2016 Annual Meeting.materials.

 

Sheilagh M. Clarke

SecretaryAll shares that have been properly voted and not revoked will be voted at the Annual Meeting. If you sign and return a proxy card but do not give voting instructions, the shares represented by that proxy card will be voted as recommended by the Board.

 

April 8, 2016Your vote is very important to us. Please exercise your right to vote.

 

Important Notice Regarding the Availability of Proxy Materials for
the Annual Meeting of Shareholders to be Held on May 18, 201622, 2019

The Company’s Proxy Statement and 20152018 Annual Report on Form 10-K are available athttp://materials.proxyvote.com/344849.

April 12, 2019

Sheilagh M. Clarke

Senior Vice President,

General Counsel and Secretary

1Proxy Statement Summary

Table of Contents

 Page
Proxy Statement Summary5iProposal 1Election of Directors
5General
5Nominees
5Director Qualifications
11Summary of Director Qualifications and Experience and Demographic Matrix
Proposal 1: Election of Directors131Corporate Governance
Corporate Governance139
Board Diversity9
Corporate Governance Guidelines9
Committee Charters9
Policy on Voting for Directors9
Director Independence10
Committee Rotation10
Independent Board Leader10
Board Leadership Structure10
Executive Sessions of Non-Management Directors11
Board Evaluations11
Board Members’ Attendance at Annual Meetings11
Director Orientation and Education11
Payment of Directors Fees in Stock11
Director Retirement11
Change in a Director’s Principal Employment12
Risk Oversight12
Stock Ownership Guidelines12
Political Contributions13
Communications with the Board13
Retention of Outside Advisors13
Code of Business Conduct14
Related Person Transactions14
Our Board of Directors
1517Our Board’s Oversight of Our Business
19Shareholder Engagement and Voting
20Environmental, Social, and Governance Highlights
Organization and Powers2515Board of Directors
Directors’ Independence2515
Committees of the Board
1728Director Compensation
31Directors and Officers Indemnification and Insurance
32Proposal 2Advisory Approval of Executive Compensation
33Executive Compensation
33Compensation Discussion and Management ResourcesAnalysis
50Compensation Committee Report
50Compensation Committee Interlocks and Insider Participation20
Directors’ Compensation and Benefits5020
Beneficial Ownership of the Company’s Stock25
Directors and Executive Officers25
Persons Owning More than Five-Percent of the Company’s Common Stock26
Section 16(a) Beneficial Ownership Reporting Compliance27
 Page
Executive Compensation28
Compensation and Risk28
Compensation Discussion and Analysis5228
Compensation and Management Resources Committee Report45
Summary Compensation Table45
54Employment Agreements
4856
Grants of Plan-Based Awards Table53
59Outstanding Equity Awards at Fiscal Year-End56
62Option Exercises and Stock Vested59
62Pension Benefits59
63Defined Benefit Retirement Plans60
2015 Nonqualified Deferred Compensation6562
Potential Payments Upon Termination or Change in Control
6367CEO Pay Ratio
Trust Agreement for Certain Benefit Plans6874
Equity Compensation Plan Information
75
69Proposal 2: 3Ratification of the Appointment of our Independent Registered Public Accounting Firm76
70Audit Committee Report
77
71Proposal 3: ReapprovalBeneficial Ownership of the Performance Goals underCompany’s Stock
71Directors and Executive Officers
72Persons Owning More Than Five-Percent of the Foot Locker Annual Incentive Compensation Plan, as Amended and RestatedCompany’s Common Stock
7872Section 16(a) Beneficial Ownership Reporting Compliance
Proposal 4: Approval of the Foot Locker Long-Term Incentive Compensation Plan, as Amended and Restated7381
Proposal 5: Advisory Approval of Executive Compensation85
Proposal 6: Advisory Vote on Frequency of Executive Compensation Vote87
Deadlines and Procedures for Nominations and Shareholder Proposals
8873Proposals for Inclusion in our 2020 Proxy Materials
73Director Nominations for Inclusion in our 2020 Proxy Materials (Proxy Access)
73Other Proposals or Nominations for the 2020 Annual Meeting
74Questions and Answers about this Annual Meeting and Voting89
Appendix A—Foot Locker Long-Term Incentive Compensation Plan, Amended and Restated as of March 23, 2016A-1

 

330 West 34th Street
New York, New York 10001

 

Proxy Statement Summary

We provide this summary of our Notice of 2016 Annual Meeting of Shareholders and Proxy Statement.

 

Proxies are being solicited by the Board of Directors of Foot Locker, Inc. (NYSE: FL) (“Foot Locker”Locker,” the “Company,” “we,” “our,” or the “Company”“us”) to be voted at our 20162019 Annual Meeting of Shareholders.Meeting. As this is a summary of our Proxy Statement, please refer to the complete Proxy Statement and 2015 Annual Report on Form 10-K before you vote.


for more complete information.

2016

2019 Annual Meeting of Shareholders

 

Date and Time:

May 18, 2016
at 9:00 a.m. EDT

Location:

AMC Loews Theatre
312 West 34th Street
New York, New York 10001

Record Date:

March 21, 2016

Board’s Voting
Proposal RecommendationProposalBoard’s Voting RecommendationPage

May 22, 2019

at 9:00 a.m. EDT

Location:

NYC33, 125 West 33rd Street,
New York, New York 10001

Record Date:

March 25, 2019

  
Proposal 1FOR EACH
NOMINEE		1
Election of six directorsElect ten members to the Board to serve for one-year terms✓FOReach nominee1
  Approve, on an advisory basis, our NEOs’ compensation✓FOR
Proposal 2FOR7632
  
Ratification ofRatify the appointment of KPMG LLP as our independent registered public accounting firm for the 20162019 fiscal year

✓FOR

69

On or about April 12, 2019, we started mailing a Notice Regarding the Internet Availability of Proxy Materials to our shareholders.

Director Nominees

Ten directors are standing for election at the 2019 Annual Meeting for one-year terms. The table below provides summary information about each of the nominees for director. See pages 6 through 12 for additional information about each nominee and pages 25 through 27 for additional information about the Committees of the Board. 

 

2019 Proxy Statement    

1

Proxy Statement Summary

Board Snapshot

Attendance

Over97%Attendance of Directors
at Board and Committee Meetings in 2018

 

Independence

9out of10directors are independent

 

All directors are independent, except the CEO



Diversity

Our directors represent a range of backgrounds and experience. The majority are women or ethnically diverse. Our Nominating and Corporate Governance Committee (the “Nominating and Governance Committee”) is focused on ensuring continued diversity on the Board—in terms of gender, age, ethnicity, skills, business experience, service on our Board and the boards of other organizations, and viewpoints—during refreshment activities by requiring that candidate pools include diverse individuals meeting the recruitment criteria.

 



Tenure

 

Directors with varied tenure contribute to a range of perspectives and ensure we transition knowledge and experience from longer-serving members to those newer to our Board. We have a good mix of new and longer-serving directors.

Refreshment

 

3 New Directors Added Over Past Five Years

3 Directors Retired Over Past Five Years

Age

 



2

    Foot Locker, Inc.

Proxy Statement Summary

Environmental, Social, and Governance Highlights

The Company and the Board are focused on corporate social responsibility. We continuously look for new and better ways to foster a diverse and inclusive work environment, engage our surrounding communities, improve employee safety, and minimize our environmental impact, all while creating value for our shareholders. Below are some recent highlights of our diversity and sustainability initiatives.

       
     
Proposal 3 FOR 78
  
     
Reapproval of●We have several women in senior leadership roles, including the performance goals under theChief Financial Officer, Chief Human Resources Officer, General Counsel and Secretary, Chief Accounting Officer, Vice President—Global Total Rewards, and Vice President and General Manager, Foot Locker Annual Incentive Compensation Plan, as AmendedPacific●Our independent directors represent a diverse range of backgrounds and Restatedexperience
●We strive to have a workforce that reflects the diversity of qualified talent that is available in the markets that we serve
       
     
Proposal 4 FOR81
Approval of the Foot Locker Long-Term Incentive Compensation Plan, as Amended and Restated    
     
Proposal 5 FOR
 85●Raised and donated over$9 millionfor scholarships since 2004, plus footwear and apparel donations to several organizations●U.S. non-store employees permitted paid time-off for volunteering in their communities
     
Advisory approval of our named executive officers’ compensation   
    
     
Proposal 6FOR EVERY
ONE YEAR		87
Advisory vote on whether the shareholder vote to approve our named executive officers’ compensation should occur every 1, 2, or 3 years  


On or about April 8, 2016, we started mailing to most of our shareholders in the United States a Notice Regarding the Availability of Proxy Materials.

2016 Proxy Statement  |  i

Director Nominees

Six directors are standing for election for one-year terms at this meeting. The table below provides summary information about each of the nominees for director. Please see Pages 2 through 8 for additional information about each nominee and Pages 17 through 20 for additional information about the Committees of the Board.

          Committee
          Membership**
Name and Primary Occupation Age* Director
Since		 Independent Other Public
Company Boards		 Audit Finance Compensation Nominating Executive
                   
Maxine Clark                  
Founder, Retired Chairman and Chief Executive Bear of Build-A-Bear Workshop, Inc. 67 2013  Build-A-Bear Workshop, Inc.
Gymboree Corp.		 • •      
                   
                   
Alan D. Feldman                  
Retired Chairman, President and Chief Executive Officer of Midas, Inc. 64 2005  GNC Holdings, Inc.
John Bean Technologies

Corporation

   •    •
                  
                  
Jarobin Gilbert, Jr.                  
President and Chief Executive Officer of DBSS Group, Inc. 70 1981  None •     •  
                  
                  
Richard A. Johnson                  
President and Chief Executive Officer of Foot Locker, Inc. 58 2014  H&R Block Inc.         •
                   
                   
Guillermo G. Marmol                  
President of Marmol & Associates 63 2011  Principal Solar, Inc.
Vitamin Shoppe, Inc.		  •     •
                   
                   
Dona D.Young                  
Retired Chairman, President and Chief Executive Officer of The Phoenix Companies, Inc. 62 2001  Aegon N.V.     •  •

Committee Chair
•Committee Member
*The ages shown are as of April 8, 2016.
**See Pages 17 through 20 for additional information about the Committees of the Board.

ii  |  2016 Proxy Statement

Board of Directors Highlights

 ●Non-Executive
Board of DirectorsChairman of the BoardGlobal Sourcing Guidelines (GSG) are distributed annually to our suppliers
    
Maxine ClarkRichard A. JohnsonSteven OaklandNicholas DiPaolo
Nicholas DiPaoloGuillermo G. MarmolCheryl Nido Turpin
Alan D. FeldmanMatthew M. McKennaDona D. Young
Jarobin Gilbert, Jr.

DiversityIndependence2015 Attendance
   

50%
are
female or
ethnically
diverse   		 3
are women		 1
is
African
American

All directors are
independent,
except the CEO
(9 out of 10 directors
are independent)		100%
Attendance at Board
and Committee
Meetings in 2015
    
  1
is
Hispanic		 

Named Executive Officers

Richard A. JohnsonPresident and Chief Executive Officer
Lauren B. PetersExecutive Vice President and Chief Financial Officer
Robert W. McHughExecutive Vice President—Operations Support
Jeffrey L. BerkSenior Vice President—Real Estate
Pawan VermaSenior Vice President and Chief Information Officer
Ken C. HicksRetired Executive Chairman

Fiscal 2015 Results

Our 2015 fiscal year was an outstanding year for Foot Locker. It was the fifth consecutive year that the Company’s sales and profit results represented the highest levels ever achieved in our history as an athletic footwear and apparel business. Our strong 2015 fiscal year results included:

•Net income, on a non-GAAP* basis, of $606 million;
   
 •●EarningsReduced energy (including the replacement of $4.29 per share, on a non-GAAP* basis, a 20% increase over 2014all fluorescent fixtures with LED lights—which consume 80% less energy than conventional lights—in our stores, warehouses, and the sixth consecutive year with a double-digit annual increase;
•An end-of-year market capitalization of $9.3 billion, a 24% increase over year-end 2014;
•Returning $558 million to our shareholders through dividend payments of $139 milliondistribution centers) and share repurchases of $419 million; and
•Total Shareholder Return (stock price appreciation plus reinvested dividends) of 28.9% compared to (12.5)% for the S&P 400 Retailing Index.eliminated waste

 

*A reconciliation to GAAP is provided on Pages 16 through 17 U.S. workforce represents 74% of our 2015 Annual Report on Form 10-K.global workforce.

2019 Proxy Statement

3

 

 

Proxy Statement Summary

Recognition

 

For additional information, seeEnvironmental, Social, and Governance Highlightsbeginning on page 20.

Fiscal 2018 Results

We built positive momentum and improved our financial results in 2018. Highlights include the following:

 

2016 Proxy Statement  |  iii*A reconciliation to GAAP is provided beginning on page 16 of our 2018 Annual Report on Form 10-K.

4

    Foot Locker, Inc. 

Proposal 1: Election of Directors(GRAPHIC) 

 

General

There are currently 10 directors on our Board. The Board has fixed the number of directors at 10. At our 2014 Annual Meeting, shareholders approved a proposal to declassify the Board beginning in 2015. Consequently, the sixAll current directors whose terms of office expire at this Annual Meeting are each standing for election for a one-year term. The four directors whose terms of office continue until 2017 will remain in office until the expiration of their current terms and, if nominated to stand for re-election, will be nominated to stand for one-year terms.

term at this meeting.

We have refreshed our Board over the past five years, as fivethree highly-qualified directors were added to the Board and fourthree directors retired. In May 2015, the Board elected Nicholas DiPaolo as Non-Executive Chairman of the Board. Mr. DiPaolo previously served as the lead director. We believe that the Board possesses the appropriate mix of diversity in terms of gender, age, ethnicity, skills, business experience, service on our Board and the boards of other organizations, and viewpoints.

Nominees

Maxine Clark, Alan D. Feldman, Jarobin Gilbert, Jr., Richard A. Johnson, Guillermo G. Marmol, Matthew M. McKenna, Steven Oakland, Ulice Payne, Jr., Cheryl Nido Turpin, Kimberly Underhill, and Dona D. Young will be considered for election as directors to serve for one-year terms expiring at the 20172020 Annual Meeting. Each nominee has been nominated by the Board for election and has consented to serve. Ms. Clark, Mr. Feldman, Mr. Gilbert, and Mr. Johnson were elected to serve for their present terms at the 2015 Annual Meeting, and Mr. Marmol and Mrs. Young were elected to serve for their present terms at the 2013 Annual Meeting. The four remaining directors will continue to serve until the expiration of their terms at the 2017 Annual Meeting. If, prior to the 20162019 Annual Meeting, any nominee is unable to serve, then the persons designated as proxies for this meeting (Sheilagh M. Clarke, John A. Maurer, and Lauren B. Peters) will have full discretion to vote for another person to serve as a director in place of that nominee.nominee or the Board may reduce the size of the Board.

Director Qualifications

In March 2015, the Company announced an updated set of growth initiatives, and a revised strategic framework, intended to further elevate our long-term financial performance for the period from 2015 through 2020 (the “2015-20 Long-Term Objectives”). In light of the 2015-20 Long-Term Objectives, theThe Nominating and Corporate Governance Committee (the “Nominating Committee”) reviewed and updated the director skill setskill-set matrix in light of the Company’s long-term strategic plan and then evaluated each of the directors’ skills, experience, and qualifications under the updated matrix, which is shown beginning on Page 8.

page 11.

The Board, acting through the Nominating and Governance Committee, considers its members, including those directors being nominated for reelection to the Board at the 20162019 Annual Meeting, to be highly qualified for service on the Board due to a variety of factors reflected in each director’s education, areas of expertise, and experience serving on the boards of directors of other organizations during the past five years. Generally, the Board seeks individuals ofwith broad-based experience who haveand the background, judgment, independence, and integrity to represent the shareholders in overseeing the Company’s management in their operation of the business rather than specific, niche areas of expertise.business. Within this framework, specific items relevant to the Board’s determination for each director are listed in each director’s biographical information beginning on Page 2.page 6. The ages shown are as of April 8, 2016.12, 2019. There are no family relationships among our directors or executive officers.

 

The Board recommends that shareholders vote
FORthe election of each of the
six identified nominees to the Board.

✓The Board recommends that shareholders voteFOR the election of each of the ten identified nominees to the Board.

 

20162019 Proxy Statement

5  |  1

Proposal 1

 

Nominees for Director
Terms Expiring in 2017

 

Proposal 1: Election of Directors

Maxine Clark

 

Founder and retired
Chief Executive Bear of
Build-A-Bear Workshop, Inc.

Age:67

Director since:2013
Independent Committees: Audit, Finance

 
(PHOTO) 

Independent Director

Age: 70

Director since: 2013

(GRAPHIC) 
Ms. Clark served as Chief Executive Bear of Build-A-Bear Workshop, Inc. (international retail company)(retail merchants) from her founding the company in 1997 tountil her retirement in June 2013, and served as its Chairman from April 2000 until November 2011. Following her retirement, Ms. Clark served as a consultant to Build-A-Bear Workshop until January 2014. Ms. Clark is a director of Build-A-Bear Workshop, Inc. Ms. Clark also serves as Chief Executive Officer of the Clark-Fox Family Foundation, Inspirator of The Delmar DivINe (real estate initiative for community development in St. Louis), Managing Partner of Prosper Women’s Capital, and Gymboree Corp.Executive in Residence of Washington University in St. Louis, John M. Olin School of Business. She serves as chairwoman of the St. Louis Regional Educational and Public Television Commission (KETC/-Channel 9 Public Television), and as a director of each of PBS, director of the Barnes-Jewish Hospital in St. Louis, director of the Goldfarb School of Nursing at Barnes-Jewish College, and New America (non-partisan think tank). She was previously a board memberdirector of the KIPP St. Louis Public Charter School. She isGymboree Corp. from November 2014 to September 2017 and a past trustee of the International Council of Shopping Centers.

Skills and Qualifications

Ms. Clark has extensive experience in both domestic and international retailing, including founding and leading Build-A-Bear Workshop, serving as President of Payless ShoeSource, Inc., and serving for 19 years as an executive of The May Department Stores Company. She adds significant experience to our Board in strategic planning, real estate, digital technology, and marketing. Her retail and business background, as well as her financial expertise, are particularly useful for her service as a member of the Finance and Strategic Planning Committee (the “Finance Committee”) and the Audit Committee.

.

 

Alan D. Feldman

 

Retired Chairman, President
and Chief Executive Officer
of Midas, Inc.

Age:64

Director since:2005
Independent Committees:

Compensation (Chair),
Finance, Executive

 
(PHOTO) 

Independent Director

Age: 67

Director since: 2005

(GRAPHIC) 
Mr. Feldman served as Chairman, President and Chief Executive Officer of Midas, Inc. (automotive repair and maintenance services) from May 2006 to April 2012, and as President and Chief Executive Officer of Midas, Inc. from January 2003 to April 2006. He was an independent consultant from March 2002 to January 2003. Mr. Feldman previously served as an executive at PepsiCo, Inc., Pizza Hut, Inc., and McDonald’s Corporation. Mr. Feldman is a director of John Bean Technologies Corporation and GNC Holdings, Inc. and is a member, the Chair of the Foundation Board of the University of Illinois.Illinois, and a member of the Governing Council of Good Samaritan Hospital. He was a director of Midas, Inc. from January 2003 to April 2012.

Skills and Qualifications

Mr. Feldman is a recognized business leader with a broad base of experience in independent, franchised retail operations, brand management, and customer relations. He previously served as Chairman, President and Chief Executive Officer of Midas, Inc. and currently serves on the boards of two other public companies, John Bean Technologies Corporation and GNC Holdings, Inc. Mr. Feldman’s leadership skills, his retail knowledge, financial expertise, and executive experience provide particularly useful background for his service as a member of the Finance Committee and as Chair of the Compensation and Management Resources Committee (the “Compensation Committee”).

 

2  |  2016 Proxy Statement
 

Proposal 1

Nominees for Director
Terms Expiring in 2017

Jarobin Gilbert, Jr.

 

President and Chief Executive Officer of DBSS Group, Inc.

Age:70

Director since:1981
Independent Committees:Audit, Nominating

Mr. Gilbert has served as President and Chief Executive Officer of DBSS Group, Inc. (management, planning, and trade consulting services) since 1992. He served as Non-Executive Chairman of the Atlantic Mutual Companies to 2010. He was a director of PepsiAmericas, Inc. from 1994 to 2010, and a director of Midas, Inc. from 1998 to April 2012.

Skills and Qualifications

Mr. Gilbert has extensive international experience, serving as a business consultant, with particular emphasis on international business arrangements in Europe. During the time he has served on our Board, he has developed considerable knowledge of our businesses, company history, and corporate governance. Mr. Gilbert’s multilingual capabilities and multicultural European business background are particularly useful given our global business operations and strategic priority of pursuing European expansion opportunities. He has served on the boards of several public companies, emphasizing in these roles executive succession and diversity, and he chaired the audit committees of PepsiAmericas, Inc. and Midas, Inc. He is a member of The American Council on Germany. Mr. Gilbert’s prior board service also includes serving as lead director and non-executive chairman of a mutual insurance company.

(GRAPHIC)

 

6

    Foot Locker, Inc.

Proposal 1: Election of Directors

Richard A. Johnson

 

President and Chief Executive Officer of Foot Locker, Inc.

Age:58

Director since:2014
Committee:Executive

 
(PHOTO) 

Chairman, President and

Chief Executive officer

Age: 61

Director since: 2014

(GRAPHIC) 
Mr. Johnson has served as the Company’s Chairman of the Board since May 2016, and President and Chief Executive Officer since December 2014. Mr. Johnson served as Executive Vice President and Chief Operating Officer from May 2012 to November 2014. He served as Executive Vice President and Group President—RetailPresident-Retail Stores from July 2011 to May 2012; President and Chief Executive Officer of Foot Locker U.S., Lady Foot Locker, Kids Foot Locker, and Footaction from January 2010 to June 2011; President and Chief Executive Officer of Foot Locker Europe from August 2007 to January 2010; and President and Chief Executive Officer of Footlocker.com/Eastbay from April 2003 to August 2007. Mr. Johnson has been a director of H&R Block Inc. since September 2015. He2015 and was previously a director of Maidenform Brands, Inc. from January 2013 to October 2013.

Skills and Qualifications

Mr. Johnson has extensive experience as a retail company executive, including 1922 years at the Company. He serves as our Chairman, President and Chief Executive Officer. Mr. Johnson has led almost all of the Company’s major businesses in the United States, International, and Direct-to-Customer and has extensive knowledge of all facets of the Company’s business. He has played an integral role in developing and executing the Company’s strategic plans. He also has experience serving as a director of a public company through his current service as a director of H&R Block Inc. (including on the audit and compensation committees) and past service at Maidenform Brands, Inc.

Mr. Johnson is also a director of the Retail Industry Leaders Association (RILA) and the Footwear Distributors and Retailers of America (FDRA) and serves on the University of Wisconsin—Eau Claire, National Leadership Council.

 

2016 Proxy Statement  |  3

Proposal 1

Nominees for Director
Terms Expiring in 2017

Guillermo G. Marmol

President of Marmol & Associates

Age:63

Director since:2011
Independent Committees:Audit (Chair), Finance, Executive

 
(PHOTO) 

Independent Director

Age: 66

Director since: 2011

(GRAPHIC) 
Mr. Marmol has served as President of Marmol & Associates (consulting firm that provides advisory services and investment capital to early stage technology companies) since March 2007 and, prior to that, from October 2000 to May 2003. He served as Division Vice President and a member of the Executive Committee of Electronic Data Systems Corporation a global(global technology services company,company) from June 2003 to February 2007, and as a director and Chief Executive Officer of Luminant Worldwide Corporation an internet(internet professional services company,company) from July 1998 to September 2000. He served as Vice President and Chair of the Operating Committee of Perot Systems Corporation an information(information technology and business solutions company,company) from December 1995 to June 1998. He began his career at McKinsey & Company a management(management consulting firm,firm) from 1990 to 1995, rising to Senior Partner, and was a leader of the organization and business process redesign practices. Mr. Marmol is a director of Vitamin Shoppe, Inc., Principal Solar Inc., and KERA/KXT North Texas Public Broadcasting Inc.,Morae Global Corporation, and he is a member of the Board of Trustees and Chair of the Finance Committee of the Center for a Free Cuba. Mr. Marmol was a director of Information Services Group, Inc. (to April 2013).

Skillsfrom 2012 to 2013, KERA/KXT North Texas Public Broadcasting Inc. from 2015 to 2017, and Qualifications

Principal Solar Inc.

Mr. Marmol has a significant background in information technology and systems, which continues to be highly important to the Company as we enhance our technology and systems and build a more powerful digital business to connect with our customers. He also serves as a director and Chair of two otherthe Nomination and Governance Committee of another public companies,company, Vitamin Shoppe, Inc. and Principal Solar, Inc.ThroughThrough his long tenure as a management consultant focusing on strategic analysis and business processes, he brings valuable knowledge and expertise to his service on the Board, as Chair of the Audit Committee and as a member on the Finance Committee.

 (GRAPHIC)

2019 Proxy Statement    

7

Proposal 1: Election of Directors

Matthew M. McKenna
(PHOTO) 

Independent Director

Age: 68

Director since: 2006

(GRAPHIC) 
Mr. McKenna has served as Executive in Residence of Georgetown University’s McDonough School of Business since February 2017 and General Partner of the Open Prairie Rural Opportunities Fund, L.P. (private equity fund) since April 2018. He served as Senior Advisor to the U.S. Secretary of Agriculture from July 2013 to January 2017; President and Chief Executive Officer of Keep America Beautiful, Inc. (non-profit community improvement and educational organization) from January 2008 to June 2013; and Senior Vice President of Finance of PepsiCo, Inc. (global snack and beverage company) from August 2001 to December 2007. Mr. McKenna serves on the board of Green Dot Bioplastics LLC (bioscience social enterprise and full-service bioplastics company), and MTC Productions, Inc., a non-profit affiliate of the Manhattan Theater Club. He is also an adjunct professor at Fordham University School of Law. Mr. McKenna was a director of PepsiAmericas, Inc. from 2001 to 2010.Mr. McKenna has extensive financial, tax, and legal expertise, having served as a partner at an international law firm in New York City, a senior financial officer of PepsiCo, Inc., and a general partner of a private equity fund, which is useful for his service as Chair of the Finance Committee and as a member of the Audit Committee. The Board has determined that Mr. McKenna qualifies as an “audit committee financial expert,” as defined by the rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, Mr. McKenna has government experience based on his experience as Senior Advisor to the U.S. Secretary of Agriculture. He also brings the perspective of the non-profit sector from his previous positions as President and Chief Executive Officer of Keep America Beautiful, Inc. and Chairman of Ignatian Volunteer Corps., as well as his current positions as Executive in Residence of Georgetown University and adjunct professor at Fordham University.

 

4  |  2016 Proxy StatementSteven Oakland
(PHOTO) 

Independent Director

Age: 58

Director since: 2014

(GRAPHIC) 
Mr. Oakland has served as Chief Executive Officer and President of TreeHouse Foods, Inc. (manufacturer of packaged foods and beverages) since March 2018. He previously served as Vice Chair and President, U.S. Food and Beverage of The J.M. Smucker Company (“Smucker’s”) (manufacturer of packaged foods and beverages) from May 2016 to March 2018; President, Coffee and Foodservice of Smucker’s from April 2015 to April 2016; President, International Food Service of Smucker’s from May 2011 to March 2015; and President, U.S. Retail-Smucker’s Jif, and Hungry Jack from August 2008 to May 2011. He also serves on the board of MTD Products, Inc., a privately-held manufacturing company, and Foster Farms, a privately-held poultry business.Mr. Oakland brings to our Board a broad-based business background and extensive experience in domestic and international consumer products operations, with particular strength in customer engagement, marketing, brand-building, and strategic planning. Additionally, Mr. Oakland is actively involved in management resources issues and governance matters as the chief executive of a public company, providing him with relevant expertise as a member of the Compensation Committee and Chair of the Nominating and Governance Committee. Mr. Oakland also has risk management, business development, and mergers and acquisitions experience.

 
 (GRAPHIC)

Proposal 1

Nominees for Director
Terms Expiring in 2017

 

Dona D. Young8

    Foot Locker, Inc.

Proposal 1: Election of Directors

Ulice Payne, Jr.
 (PHOTO)

Independent Director

Age: 63

Director since: 2016

(GRAPHIC) 
Mr. Payne has served as President and Managing Member of Addison-Clifton, LLC (global trade compliance advisory services provider) since May 2004. He previously served as President and Chief Executive Officer of the Milwaukee Brewers Baseball Club from September 2002 to December 2003; Managing Partner, from 2001 to 2002, and Partner, from February 1998 to September 2002, of Foley & Lardner, LLP, a Milwaukee-based law firm; and the Wisconsin Commissioner of Securities from February 1985 to December 1987. Mr. Payne presently serves as a director of ManpowerGroup Inc., and WEC Energy Group, Inc. He previously served as a director of Badger Meter, Inc. from 2000 to 2010, The Northwestern Mutual Life Insurance Company from 2005 to 2018, Midwest Air Group, Inc. from 1998 to 2007, and The Marcus Corporation from 1996 to 2000.Mr. Payne brings to our Board significant managerial, operational, financial, public service, and global experience as a result of the many senior positions he has held, including as President and Managing Member of Addison-Clifton, LLC, President and Chief Executive Officer of the Milwaukee Brewers Baseball Club, Managing Partner of Foley & Lardner, LLP, and the Wisconsin Commissioner of Securities. He also serves as a director of two other public companies, ManpowerGroup Inc., and WEC Energy Group, Inc. As Foot Locker is a global company, the Board also benefits from his broad experience in, and knowledge of, international business and global trade compliance. In addition, Mr. Payne’s past and present experience on the boards of several public corporations includes service as a member of either the audit or finance committee at each of these companies, which is beneficial to the Board.

 

Cheryl Nido Turpin
(PHOTO) 

 Independent Director

Age: 71

Retired Chairman,Director since: 2011

(GRAPHIC) 
Ms. Turpin served as President and Chief Executive Officer of The Phoenix Companies,Limited Stores (retail merchants), a division of Limited Brands, Inc.

Age:62

Director since:2001
Independent Committees:

, from June 1994 to August 1997. Prior to that, she served as President and Chief Executive Officer of Lane Bryant, a subsidiary of The Limited Stores, Inc., from January 1990 to June 1994. Ms. Turpin served as a director of The Warnaco Group, Inc. from 2004 to February 2013, and as a director of Stage Stores, Inc. from 2010 to 2011.

Ms. Turpin brings to our Board long experience as a retail executive, most recently as President and Chief Executive Officer of The Limited Stores, where she worked in a multi-divisional retail structure similar to our Company. She previously served as a director of two other public companies, The Warnaco Group, Inc. and Stage Stores, Inc., and she served as chair of the compensation committees of those companies. Her retail and brand marketing background strongly complements the expertise of the Board, and her past service as chair of the compensation committees of other public retail companies provides particularly useful background for her service on our Compensation Nominating (Chair), ExecutiveCommittee.

 (GRAPHIC)

 

2019 Proxy Statement    

9

Proposal 1: Election of Directors

Kimberly Underhill 
 (PHOTO)

Mrs.YoungIndependent Director

Age: 54

Director since: 2016

(GRAPHIC) 
Ms. Underhill has served as President, North America Consumer of Kimberly-Clark Corporation (global manufacturer of branded personal care, consumer tissue, and professional healthcare products) since May 2018. She previously served in other senior leadership positions with Kimberly-Clark, including Global President of Kimberly-Clark Professional from April 2014 to May 2018; President, Consumer Europe from August 2011 to April 2014; Vice President Country Manager, UK and Ireland from September 2009 to August 2011; and President, North America Group Products, Family Care from October 2006 to August 2009. She is also a member of the Board of Directors of the Network of Executive Women (women’s leadership organization serving retail and consumer goods industries).Ms. Underhill brings to our Board a broad-based business background and extensive experience in domestic and international consumer products operations, with particular strength in marketing, brand-building, strategic planning, and international business development. Additionally, Ms. Underhill is actively involved in management resources issues as a senior executive of a public company, which provides relevant expertise to both our Compensation Committee, of which she is Chair, and Finance Committee, of which she is a member. Through her senior executive position at Kimberly-Clark, Ms. Underhill also has significant international and business development experience.

Dona D. Young
(PHOTO) 

Independent Lead Director

Age: 65

Director since: 2001

(GRAPHIC) 
Mrs. Young retired in April 2009 as Chairman, President and Chief Executive Officer of The Phoenix Companies, Inc. (at the time an insurance and asset management company) after a nearly 30-year career. She currently engages in independent strategic advising and consulting, with a focus on corporate social responsibility and board governance issues. She also engages inissues, and CEO coaching and counseling. She is a member of the Supervisory Board of Aegon N.V. (a multinational(multinational life insurance, pension, and asset management company), a director of the National Association of Corporate Directors (NACD), a trustee of the Saint James School in Saint James, Maryland, and a director and Audit Committee Chair of Save the Children in Westport, Connecticut where she serves as Vice ChairUS, and a director of Save the Audit Committee.Children International and Save the Children Association (each a non-profit organization). She has previously served as a director of The Phoenix Companies, Inc.,Wachovia Corporation, Sonoco Products Company, and Wittenberg University in Springfield, Ohio.

Skills and Qualifications

Mrs.Young

Mrs. Young brings significant financial, business, governance, and legal experience to our Board. Her long experience in the financial services sector, includingprior service as bothGeneral Counsel, and later Chief Executive Officer, and General Counsel of Phoenix has exposed Mrs.Youngher to a number of areas, including financial reporting, leadership and talent development, and risk management.As an executive and board member, shemanagement. She also has extensive transactional experience, including mergers and acquisitions, divestitures, spin-offs, and restructurings. Mrs.Young’s recognizedMrs. Young’s leadership skills and broad corporate governance experience including with regard toconcerning board succession planning, board composition, and executive leadership, are useful for her service as Chair of the Nominating CommitteeLead Director and a member of both the CompensationNominating and Governance Committee and the Audit Committee. Mrs.YoungMrs. Young serves as a member of the Supervisory Board, Chair of the Risk Committee, and a member of both the risk committeeNominating and the audit committeeGovernance Committee and Audit Committee of Aegon N.V. Mrs.Young has had experience serving as an independentMrs. Young is a director onof the boards of two other public companies, as well as on the boards of non-profit organizations. Mrs.Young isNACD, a faculty member of the National Association of Corporate DirectorsNACD Board Advisory Services. SheServices, was a 2013 National Association of Corporate Directorsnamed to the NACD Directorship 100 for 2015, and has been an NACD Board Leadership Fellow andsince 2013. She was a 2012 Advanced Leadership Fellow at Harvard University. Mrs.Young was named toMrs. Young completed the NACD Directorship 100 for 2015.Cyber-Risk Oversight Program and earned a CERT Certificate in Cybersecurity Oversight conferred by Carnegie Mellon University.

 (GRAPHIC)

 

2016 Proxy Statement  |  5

Proposal 1

Directors Continuing in Office
Terms Expiring in 2017

Nicholas DiPaolo

 

Retired Vice Chairman of Bernard Chaus, Inc.

Age:1074

Director since:2002
Independent Committees:

Compensation, Finance, Executive (Chair)

    Foot Locker, Inc.

Mr. DiPaolo served as Vice Chairman of Bernard Chaus, Inc. (apparel designer and manufacturer) from November 2000 to June 2005 and as Chief Operating Officer of Bernard Chaus from November 2000 to October 2004. Mr. DiPaolo previously served as a director of Bernard Chaus, Inc. (to June 2005), JPS Industries, Inc. (to April 2013), and R.G. Barry Corporation (to September 2014).

Skills and Qualifications

Mr. DiPaolo has extensive experience as a senior executive of companies involved in the design and production of apparel, product development, and related financial matters. He served for four years as the Vice Chairman and Chief Operating Officer of Bernard Chaus, Inc., an apparel designer and manufacturer, and earlier in his career, as Chairman, President and Chief Executive Officer of Salant Corporation, a diversified apparel company, which is particularly useful background given the focus on building apparel penetration under the Company’s long-term strategic plan. He previously served on the boards of other public companies, namely JPS Industries, Inc. and R.G. Barry Corporation. Mr. DiPaolo’s recognized leadership skills and his broad base of business experience, depth of knowledge and experience with regard to financial matters, the retail industry, product development and apparel, as well as our business, make him particularly suitable to serve as our Non-Executive Chairman.

 

Matthew M.
McKenna

 

Senior Advisor to the U.S. Secretary of Agriculture

Age:65

Director since:2006
Independent Committees:Audit, Finance (Chair), Executive

Mr. McKenna has served as Senior Advisor to the U.S. Secretary of Agriculture since July 2013. He was President and Chief Executive Officer of Keep America Beautiful, Inc. (non-profit community improvement and educational organization) from January 2008 to June 2013. He was Senior Vice President of Finance of PepsiCo, Inc. (global snack and beverage company) from August 2001 through December 2007. Mr. McKenna serves on the board of MTC Productions, Inc., a non-profit affiliate of the Manhattan Theater Club. He is also an adjunct professor at Fordham University School of Law in New York City. Mr. McKenna was a director of PepsiAmericas, Inc. from 2001 to 2010.

Skills and Qualifications

Mr. McKenna has extensive legal, corporate taxation and financial expertise, having served as a partner at an international law firm in New York City, and as a senior financial officer of PepsiCo, Inc., which is particularly useful background for his service as Chair of the Finance Committee and as a member of the Audit Committee. In addition, Mr. McKenna has government experience based on his current position as Senior Advisor to the U.S. Secretary of Agriculture. He also brings the perspective of the non-profit sector from his previous positions as President and Chief Executive Officer of Keep America Beautiful, Inc., Chairman of Ignatian Volunteer Corps., and an adjunct professor at Fordham University.

 

6  |  2016 Proxy Statement

Proposal 11: Election of Directors

 

Directors Continuing in Office
Terms Expiring in 2017

Steven Oakland

 

President, Coffee and Foodservice of The J.M. Smucker Company

Age:55

Director since:2014
Independent Committees:

Compensation, Nominating

Mr. Oakland has served as President, Coffee and Foodservice of The J.M. Smucker Company (“Smucker’s”) (manufacturer and marketer of branded food products) since April 2015. He previously served as President, International Food Service of Smucker’s from May 2011 to March 2015; and President, U.S. Retail—Smucker’s Jif, and Hungry Jack from August 2008 to May 2011. Mr. Oakland has spent most of his career at Smucker’s, serving in increasingly senior positions, including General Manager of Smucker’s Canadian operations from 1995 to 1999. Effective May 1, 2016, Mr. Oakland will assume the position of Vice Chair and President, U.S. Food and Beverage of Smucker’s. He serves on the board of MTD Products, Inc., a privately-held company.

Skills and Qualifications

Mr. Oakland brings to our Board a broad-based business background and extensive experience in domestic and international consumer products operations, with particular strength in customer engagement, marketing, brand-building, and strategic planning.Additionally, Mr. Oakland is actively involved in management resources issues and governance matters as a senior executive of a public company, which provides relevant expertise to both our Compensation Committee and Nominating Committee, of which he is a member.Through his senior executive position at Smucker’s, Mr. Oakland also has risk management and business development / mergers and acquisitions experience.

Cheryl Nido Turpin

 

Retired President and Chief Executive Officer of the Limited Stores

Age:68

Director since:2001
Independent Committees:

Compensation, Nominating

Ms.Turpin served as President and Chief Executive Officer of the Limited Stores (retail merchants), a division of Limited Brands, Inc., from June 1994 to August 1997. Prior to that, she served as President and Chief Executive Officer of Lane Bryant, a subsidiary of The Limited Stores, Inc., from January 1990 to June 1994. Ms.Turpin served as a director of The Warnaco Group, Inc. from 2004 to February 2013, and as a director of Stage Stores, Inc. from 2010 to 2011.

Skills and Qualifications

Ms.Turpin brings to our Board long experience as a retail executive, most recently as President and Chief Executive Officer of Limited Stores, where she worked in a multi-divisional retail structure such as that of our Company. She previously served as a director of two other public companies,The Warnaco Group, Inc. and Stage Stores, Inc., and she served as chair of the compensation committees of those companies. Her strong retail and brand marketing background strongly complements the expertise of the Board, and her past service as chair of the compensation committees of other public retail companies provides particularly useful background for her service on our Compensation Committee.

2016 Proxy Statement  |  7

Proposal 1

Summary of Director Qualifications and Experience and Demographic Matrix

 

MaxineNicholasAlan D.JarobinRichard A.Guillermo G.Matthew M.StevenCheryl NidoDona D.
ClarkDiPaoloFeldmanGilbert, Jr.JohnsonMarmolMcKennaOaklandTurpinYoung
Accounting or Financialexpertise gained from experience as a CEO, audit professional, or finance executive is important because it assists our directors in understanding and overseeing our financial reporting and internal controls········
Broad-Based Businessexpertise provides a depth of experience from which to draw on in evaluating issues, deliberating, decision-making, and making business judgments··········
Business Development / Mergersand Acquisitionsexperience is important because it helps in assessing potential growth opportunities·········
Chief Executiveexperience is important because directors who have served as CEOs of public or substantial privately-held companies have experience working, communicating, and engaging with a variety of important external stakeholder groups, such as investors, shareholders, bondholders, and investment analysts·······
Digital and Channel Connectivity experience is important to the Company as we build a more powerful digital experience for our customers···
Information Securityexperience is relevant given the importance to the Company of protecting both the Company’s and our customers’ information·
Internationalexperience is important in understanding and reviewing our business and strategy outside of the United States, particularly in Europe as it is a strategic priority····
Retail, Brand Marketing, and SocialMediaexperience gives directors a practical understanding of developing, implementing, and assessing our marketing and customer engagement strategies······
Risk Managementexperience is critical to the Board’s role in overseeing the risks facing the Company·······
Strategic Planning and Analysis experience provides a practical understanding of developing, implementing, and assessing the metrics of our long-term financial objectives and strategic priorities········
Target Marketexperience is relevant to an understanding of our business and strategy as our brands keenly focus on their target customers····
Technology and Systemsexperience is relevant given the importance of technology to the retail marketplace, our internal operations, and our customer engagement initiatives··

8  |  2016 Proxy Statement

Corporate Governance

The Board is committed to good corporate governance and has adopted Corporate Governance Guidelines and other policies and practices to guide the Board and senior management.

Board Diversity

We believe that the Boardour slate of director nominees possesses the appropriate mix of diversity in terms of gender, age, ethnicity, skills, business experience, service on our Board and the boards of other organizations, and viewpoints. We have refreshed our Board over the past five years, as fivethree highly-qualified directors were added to the Board, and fourthree directors retired. In May 2015,Each director is individually qualified to make unique and substantial contributions. Collectively, our directors’ diverse viewpoints and independent-mindedness enhance the quality and effectiveness of Board elected Nicholas DiPaolo as Non-Executive Chairmandeliberations and decision making. This blend of the Board. Mr. DiPaolo previously served as the lead director.qualifications, attributes, and tenure results in highly effective leadership and is summarized below.

Knowledge, Skills, and ExperienceClarkFeldmanJohnsonMarmolMcKennaOaklandPayneTurpinUnderhillYoung
Leadership
(LOGO) Chief Executiveexperience is important because directors who have served as CEOs of public or substantial privately-held or non-profit companies have experience working, communicating, and engaging with a variety of important stakeholder groups, including shareholders, bondholders, and investment analysts●●●●●●●●
Strategy
(LOGO)Broad-Based Businessexpertise provides a depth of experience to leverage in evaluating issues, and making business judgments●●●●●●●●●●
(LOGO)Digital and Channel Connectivityexperience is important to the Company as we build a more powerful digital experience for our customers●●●
(LOGO)Public Serviceexperience is relevant to the Company as it is affected by government actions●●
(LOGO) Information Securityexperience is relevant given the importance of protecting both the Company’s and our customers’ information●●
(LOGO)Internationalexperience is important in understanding and reviewing our business and strategy outside of the United States, particularly in Europe and Asia●●●●●●
(LOGO)Retail, Brand Marketing, and Social Mediaexperience gives directors an understanding of assessing, developing, and implementing our marketing and customer engagement strategies●●●●●●
(LOGO)Strategic Investmentsexperience is important in evaluating our financial statements and investment strategy●●●
(LOGO) Strategic Planning and Analysisexperience provides a practical understanding of assessing, developing, and implementing the metrics of our long-term financial objectives and strategic priorities●●●●●●●●●
(LOGO)Supply Chainexperience is important to understand the omnichannel commerce distribution model with multiple fulfilment points to serve the customer●●●

2019 Proxy Statement

11

Proposal 1: Election of Directors

Knowledge, Skills, and ExperienceClarkFeldmanJohnsonMarmolMcKennaOaklandPayneTurpinUnderhillYoung
            
(LOGO)Technology and Systemsexperience is important given the importance of technology to the retail marketplace, our internal operations, and our customer engagement initiatives  ●  ●      
            
            
(LOGO)Youth Culture/Target Marketexperience is important to understand our business and strategy as our brands keenly focus on their target customers, particularly youth culture●  ●   ●  ●   
            
Governance          
            
Accounting or Financialexpertise gained from experience as a CEO, audit professional, or finance executive is important because it assists our directors in understanding and overseeing our financial reporting and internal controls● ● ● ● ●  ●  ● ● 
            
            
(LOGO)Business Development / Mergers and Acquisitionsexperience is important because it helps in assessing potential growth opportunities ●  ●● ●  ●● ● ● ● 
            
            
(LOGO)Environmental, Social, and Governanceexperience is important because it supports our goals of strong Board and management accountability, transparency, and protection of shareholder interests  ●  ● ●  ●● ● ● 
            
            
(LOGO)Risk Managementexperience is helpful to the Board’s role in overseeing the risks facing the Company ●  ● ●● ●    ● 
            
Demographic Background          
            
Board Tenure (Year Joined)2013200520142011200620142016200120162001
Years61458135318318
Gender  ● ● ● ●●  ●   
Male ●       ● ● ●
Female          
Age (at April 12, 2019)          
Years old70676166685863715465
Race/Ethnicity          
African American       ●   
Hispanic   ●      
White  ● ● ●  ●●   ● ●● 
Number of Other Public Company Boards1211—12——1

12

Foot Locker, Inc.

 

Corporate Governance Guidelines(GRAPHIC) 

The Board is committed to good corporate governance and has adopted Corporate Governance Guidelines.Guidelines and other policies and practices to guide the Board and senior management.

Our Board of Directors

(GRAPHIC)

Our By-Laws provide for a Board consisting of between 7 and 13 directors. The exact number of directors is determined from time to time by the entire Board. The Board periodically reviewshas fixed the guidelinesnumber of directors at 10, and may revise them when appropriate. Thethere are currently 10 directors on our Board.

Directors’ Independence

A director is not considered independent under New York Stock Exchange (“NYSE”) rules if he or she has a material relationship with the Company that would impair his or her independence. In addition to the independence criteria established by the NYSE, the Board has adopted categorical standards to assist it in making its independence determinations regarding individual directors. These categorical standards are contained in the Corporate Governance Guidelines, which are availableposted on the corporate governance section of the Company’s corporate website athttp://www.footlocker-inc.com/investors.cfm?page=corporate-governancefootlocker.com/corp. You may also obtain a printed copy of the guidelines by writing to the Secretary at the Company’s headquarters.

 

Committee Charters

The Board has adopted chartersdetermined that the following categories of relationships are immaterial for purposes of determining whether a director is independent under the NYSE listing standards:

Categorical RelationshipDescription
Investment Relationships with the CompanyA director and any family member may own equities or other securities of the Company.
Relationships with Other Business EntitiesA director and any family member may be a director, employee (other than an executive officer), or beneficial owner of less than 10% of the shares of a business entity with which the Company does business, provided that the aggregate amount involved in a fiscal year does not exceed the greater of $1 million or 2% of either that entity’s or the Company’s annual consolidated gross revenue.
Relationships with Not-for-Profit EntitiesA director and any family member may be a director or employee (other than an executive officer or the equivalent) of a not-for-profit organization to which the Company (including the Foot Locker Foundation) makes contributions, provided that the aggregate amount of the Company’s contributions in any fiscal year do not exceed the greater of $1 million or 2% of the not-for-profit entity’s total annual receipts.

We individually inquire of each of our directors and executive officers about any transactions in which the Company and any of these related persons or their immediate family members are participants. We also make inquiries within the Company’s records for information on any of these kinds of transactions. Once we gather the information, we then review all relationships and transactions of which we are aware in which the Company and any of our directors, executive officers, their immediate family members or five-percent shareholders are participants to determine, based on the facts and circumstances, whether the related persons have a direct or indirect material interest. The General Counsel’s office coordinates the related person transaction review process. The Nominating and Governance Committee reviews any reported transactions involving directors and their immediate family members in making its recommendation to the Board on the independence of the directors. In approving, ratifying, or rejecting a related person transaction, the Nominating and Governance Committee considers such

2019 Proxy Statement    

13

Corporate Governance

information as it deems important to determine whether the transaction is on reasonable and competitive terms and is fair to the Company. The Company’s written policies and procedures for related person transactions are included within both the Corporate Governance Guidelines and the Code of Business Conduct. There were no related person transactions in 2018.

The Board, upon the recommendation of the Nominating and Governance Committee, has determined that the following directors are independent under NYSE rules because they have no material relationship with the Company that would impair their independence:

 

Jarobin Gilbert, Jr. served as a director of the Company during 2018 until his retirement from the Board in May 2018. The Board determined that Mr. Gilbert was independent under NYSE rules through the end of his term as a director because he had no material relationship with the Company that would impair his independence.

In making its independence determination, the Board reviewed recommendations of the Nominating and Governance Committee and considered Dona D. Young and Ulice Payne, Jr.’s relationships as directors of companies with which we do business. The Board has determined that these relationships meet the categorical standard for Relationships with Other Business Entities and are immaterial with respect to determining independence.

The Board has determined that all members of the Audit Committee, the Compensation Committee, the Finance Committee, and the Nominating Committee. Copies ofand Governance Committee are independent as defined under the charters for these committees are available on the corporate governance section of the Company’s corporate website athttp://www.footlocker-inc.com/investors.cfm?page=corporate-governance. You may also obtain printed copies of these charters by writing to the Secretary at the Company’s headquarters.

Policy on Voting for Directors

Our Corporate Governance Guidelines provide that if a nominee for director in an uncontested election receives more votes “withheld” from his or her election than votes “for” election, thenNYSE listing standards and the director must offer his or her resignation for considerationindependence standards adopted by the Nominating Committee. The Nominating Committee will evaluate the resignation, weighing the best interests of the Company and its shareholders, and make a recommendation to the Board on the action to be taken. For example, the Nominating Committee may recommend (i) accepting the resignation, (ii) maintaining the director but addressing what the Nominating Committee believes to be the underlying cause of the withheld votes, (iii) resolving that the director will not be re-nominated in the future for election, or (iv) rejecting the resignation. When making its determination, the Nominating Committee will consider all factors that it deems relevant, including (i) any stated reasons why shareholders withheld votes from the director, (ii) any alternatives for curing the underlying cause of the withheld votes, (iii) the director’s tenure, (iv) the director’s qualifications, (v) the director’s past and expected future contributions to the Board and to the Company, and (vi) the overall composition of the Board, including whether accepting the resignation would cause the Company to fall below the minimum number of directors required under the Company’s By-laws or fail to meet any applicable U.S. Securities and Exchange Commission (the “SEC”) or New York Stock Exchange (the “NYSE”) requirements. We will promptly disclose the Board’s decision on whether to accept the director’s resignation, including, if applicable, the reasons for rejecting the offered resignation.

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Corporate Governance

Director Independence

The Board believes that a significant majority of its members should be independent, as determined by the Board based on the criteria established by the NYSE. Each year, the Nominating Committee reviews any relationships between outside directors and the Company that may affect independence. Currently, one of the ten members of the Board serves as an officer of the Company, and the remaining nine directors are independent under the criteria established by the NYSE. Please see Pages 15 through 16 for more information regarding director independence.

Committee Rotation

As a general principle, the Board believes that the periodic rotation of committee assignments on a staggered basis is desired and provides an opportunity to foster diverse perspective and develop breadth of knowledge within the Board.

 

Independent Board Leader

Our Board is led by Nicholas DiPaolo, who serves as our independent Non-Executive Chairman of the Board. The Board believes that Mr. DiPaolo is well-suited to serve in this role, given his business and financial background, his depth of knowledge of the Company, and his prior leadership role as lead director from 2012 through 2015. As Non-Executive Chairman, Mr. DiPaolo has the following roles and responsibilities:

•advises our Chief Executive Officer and other members of senior management, as appropriate;
•develops, with our Chief Executive Officer, the agenda for each Board meeting;
•chairs all meetings of our Board;
•serves as principal liaison between our independent directors and our Chief Executive Officer;
•chairs executive sessions of the Board and meetings of the independent directors, both of which are held in conjunction with each quarterly Board meeting; and
•leads the annual performance evaluation of our Chief Executive Officer.

Board Leadership Structure

Our Board evaluates, from time to time as appropriate, whether the same person should serve as Chairman and Chief Executive Officer, or whether the positions should be split,held by different persons, in light of all relevant factorsfacts and circumstances and what it considers to be in the best interests of the Company and our shareholders. Since May 2015,2016, the positions of Chairman and Chief Executive Officer have been separated, with Nicholas DiPaolo serving as Non-Executive Chairman, andheld by Richard A. Johnson, with Dona D. Young serving as Chief Executive Officer.independent Lead Director. The Board has utilized various leadership structures since 2001,2010, as shown below:

 

DateJanuary 2010December 2014May 2015May 2016
 Leadership Structure
March 2001 – February 2004 Positions separated, with an independent director serving as Non-Executive Chairman
February 2004 – August 2009Positions combined, with an independent lead director
August 2009 – January 2010Lead DirectorPositions separated, with the former Chairman and Chief Executive Officer serving as Executive Chairman, and an independent director serving as lead director
January 2010 – December 2014Positions combined, with an independent lead director
December 2014 – May 2015Positions separated, with the former Chairman and Chief Executive Officer serving as Executive Chairman, and an independent director serving as lead director
May 2015 – PresentLead DirectorPositions separated, with an independent director serving as Non-Executive Chairman

10  |  2016 Proxy Statement
Positions combined, with an independent Lead Director
The Board believes that, based on the Company’s current facts and circumstances, its Board leadership structure is appropriate.


Corporate Governance

Lead Director

 

The Board believes that, based onparticularly because the Company’s factspositions of Chairman and circumstances, its current leadership structureChief Executive Officer are held by the same person, the appointment of an independent lead director is appropriate.

 

The Lead Director’s responsibilities include:

presiding at executive sessions of the independent directors, and Board meetings at which the Chairman is absent;

attending meetings of each of the Board committees;

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Corporate Governance

encouraging and facilitating active participation by, and communication among, all directors;

serving as the liaison between the independent directors and the Chairman;

approving Board meeting agendas and schedules after conferring with the Chairman and other members of the Board, as appropriate, and adding agenda items in her discretion;

having the authority to call meetings of the independent directors;

leading the Board’s annual performance evaluation of the Chief Executive SessionsOfficer;

being available to advise the Chairman and the committee chairs in fulfilling their designated roles and responsibilities; and

performing such other functions as the Board or other directors may request.

The Board considers the periodic rotation of Non-Management Directorsthe Lead Director from time to time, taking into account experience, continuity of leadership, and the best interests of the Company.

Dona D. Young currently serves as the Lead Director. The Board believes that Mrs. Young is well suited to serve as Lead Director, given her business, financial, and governance background, as well as her more than eighteen years of service on our Board.

Director On-Boarding and Education

We have an on-boarding program for new directors that is intended to educate a new director on the Company and the Board’s practices. During the first year of the director’s service, the newly-elected director meets with the Company’s Chief Executive Officer, Chief Financial Officer, Chief Human Resources Officer, General Counsel and Secretary, and other members of senior management, to review the Company’s business operations, financial matters, strategy, investor relations, risk management, corporate governance, composition of the Board and its committees, and succession and development plans. Additionally, he or she visits our stores near the Company’s New York headquarters, and elsewhere, with senior management for an introduction to store operations. During this first year, new directors periodically meet with the Lead Director and with the committee chairs for an immersion into the work of the committees.

The second phase of the on-boarding program commences approximately 18 months after the director joins the Board and is specifically tailored to the individual director, taking into consideration his or her experience as a director of other public companies, the committees of our Board on which he or she serves, and areas of our business and strategy that the director would like to explore more thoroughly with management. For example, during this second phase of the program, directors participate in enhanced discussions in the areas of customer data, retail accounting and operations, and risk management, and meet with key talent. Regular check-ins with the Lead Director continue throughout the on-boarding program.

We also provide the Board with educational training, using both internal and external resources, in connection with each quarterly Board meeting and provide outside speakers on relevant topics during Board dinners. We encourage all directors to attend other continuing education programs to maintain their expertise and provide feedback to the other directors on these programs.

Mandatory Resignation or Retirement

The Board has established a policy whereby a non-employee director is required to advise the Chair of the Nominating and Governance Committee of any change to his or her principal employment. If requested by the Chair, after consultation with the members of the Committee, the director will submit a letter of resignation to the Chair of the Committee, and the Committee would then meet to consider whether to accept or reject the resignation.

The Corporate Governance Guidelines also require that directors retire from the Board at the annual meeting of shareholders following the director’s 72nd birthday.

Corporate Governance Guidelines

The Board has responsibility for establishing broad corporate policies, reviewing significant developments affecting the Company, overseeing the business strategy, and monitoring the general performance of the Company.

The Board has adopted Corporate Governance Guidelines. The Board periodically reviews the guidelines and revises them, as appropriate. The Corporate Governance Guidelines are available on the corporate governance section of the Company’s corporate website atfootlocker.com/corp. You may also obtain a printed copy of the guidelines by writing to the Secretary at the Company’s headquarters.

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Corporate Governance

Board Attendance

The Board held six meetings during 2018. All of our directors attended at least 75% of the aggregate of the meetings of the Board and of the committees on which they served in 2018.

The Board holds regularly scheduled executive sessions of non-management directors in conjunction with each quarterly Board meeting. Nicholas DiPaolo,Dona D. Young, as Chairman,Lead Director, presides at these executive sessions.

 

Directors are expected to attend annual meetings of shareholders. The annual meeting is normally scheduled on the same day as a quarterly Board meeting. In 2018, all of the directors attended the annual meeting.

Retention of Outside Advisors

The Board and all of its committees have authority to retain outside advisors and consultants that they consider necessary or appropriate in carrying out their respective responsibilities. The independent accountants are retained by, and report directly to, the Audit Committee. In addition, the Audit Committee is responsible for overseeing the qualifications, performance, and compensation of the internal auditors to which the Company has outsourced in part. Similarly, the consultant retained by the Compensation Committee to assist in the evaluation of senior executive compensation reports directly to that committee.

Board Evaluations

Each year, the Board and its committees conduct self-evaluations.engage in a robust evaluation process consistent with the Board’s goal of continuous improvement. The Nominating and Governance Committee oversees the evaluation process and reviews the procedures, which may vary from year to year, in advance of each year’s evaluation process.evaluation. The self-evaluation process is designed to elicit candid feedback regarding the areas wherein which the Board and its committees could improve their effectiveness. effectiveness and utilizes surveys, individual interviews, and action planning.

In addition, in 2015,2018, the Board enhanced its evaluation process and undertook a 360-degree peer evaluation process facilitated by an independent third party. Each director completed an evaluation and individual interview with the third party. The Chair of the Nominating and Governance Committee engaged a third partyand the Lead Director each received copies of the completed evaluations. The Lead Director met separately with each director, and the Chair of the Nominating and Governance Committee met with the Lead Director, to discuss the results of the individual evaluations. The Board plans to conduct a survey of the directors with regardpeer evaluations approximately every two to the assessment process and other governance areas and report to the full Board on the survey results and benchmark information.three years.

 

Board Members’ Attendance at Annual Meetings

Although we do not have a policy on our Board members’ attendance at annual shareholders’ meetings, we encourage each director to attend these important meetings. The annual meeting is normally scheduled on the same day as a quarterly Board meeting. In 2015, all of the directors then serving attended the annual shareholders’ meeting.Stock Ownership Guidelines

 

Director Orientation and Education

We have an orientation program for new directors that is intended to educate a new director on the Company and the Board’s practices. At the orientation, the newly elected director generally meets with the Company’s Chief Executive Officer, Chief Financial Officer, General Counsel and Secretary, and other senior officers of the Company, to review the Company’s business operations, financial matters, investor relations, corporate governance policies, composition of theThe Board and its committees, and succession and development plans. Additionally, he or she has the opportunity to visit our stores at the Company’s New York headquarters, or elsewhere, with a senior division officer for an introduction to store operations. We also provide the Board with educational training from time to time on subjectsadopted Stock Ownership Guidelines applicable to the Board, the Chief Executive Officer, and the Company, including with regard to retailing, accounting, financial reporting, and corporate governance, using both internal and external resources.other covered executives. The Guidelines are as follows:

 

Payment

Covered PositionStock Ownership Guidelines
Non-employee Director

4xAnnual Retainer Fee

(both Cash and Equity) 

 

Chief Executive Officer

6xAnnual Base Salary

 

Executive Vice President

3xAnnual Base Salary

Senior Vice President; Senior Vice President and General Manager

2xAnnual Base Salary

 

Corporate Vice President; Vice President and General Manager

0.5xAnnual Base Salary

 

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Shares of unvested restricted stock, unvested restricted stock units (“RSUs”), and deferred stock units (“DSUs”) are counted towards ownership for purposes of the Stock Ownership Guidelines. Performance-based RSUs (“PBRSUs”) are counted once earned. Stock options and shares held through the Foot Locker 401(k) Plan are disregarded in calculating ownership.

Directors, Feesthe Chief Executive Officer, and other covered executives are required to be in compliance within five years of becoming subject to these guidelines. In the event of any increase in the required ownership level, whether as a result of an increase in the annual retainer fee or base salary or an increase in the required ownership multiple, the target date for compliance with the increased ownership guideline would be five years after the effective date of such increase.

All executives and directors who were required to be in compliance with the guidelines as of the end of the 2018 fiscal year are in compliance. The Company measures compliance with the guidelines at the end of the prior fiscal year based on the market value of the Company’s stock at that time.

If a director, the Chief Executive Officer, or other covered executive fails to be in compliance with the guidelines as of the end of the prior fiscal year, he or she must hold the net shares obtained through future stock option exercises and restricted stock and RSU vestings, after payment of applicable taxes, until again regaining compliance with the guidelines. In order to take into consideration fluctuations in the Company’s stock price, any person who has been in compliance with the guidelines as of the end of at least one of the two preceding fiscal years and who has not subsequently sold shares will not be subject to this holding requirement. For non-employee directors, the Nominating and Governance Committee will consider a director’s failure to comply with the Stock Ownership Guidelines when considering that director for reelection.

The non-employee directors receive one-half of their annual retainer fees, including committee chair retainer fees, in shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), with the balance payable in cash. Directors may elect to receive up to 100% of their annual retainer fees in stock.

 

Director RetirementPolitical Contributions

Our Code of Business Conduct prohibits making contributions on behalf of the Company to political parties, political action committees, political candidates, or holders of public office. The Board has establishedCompany is a policy in its Corporate Governance Guidelines that directors retire from the Board at the annual meetingmember of shareholders following the director’s 72nd birthday. Asseveral trade associations which, as part of their overall activities, may engage in advocacy activities with regard to issues important to the Nominating Committee’s regular evaluation ofretail industry or the Company’s directors and the overall needs of the Board, the Nominating Committee may ask a director to remain on the Board for an additional period of time beyond age 72, or to stand for re-election after reaching age 72. For any director over age 72, the Nominating Committee evaluates that director each year in light of the retirement policy to consider his or her continued service on the Board. The Nominating Committee and the Board reviewed the continued service of our Non-Executive Chairman, Nicholas DiPaolo, age 74, on the Board and have asked him to continue his service through the end of his term in 2017.

2016 Proxy Statement  |  11

Corporate Governancebusiness community generally.

 

Change in a Director’s Principal Employment

The Board has established a policy whereby a director is required to advise the ChairOur Board’s Oversight of the Nominating Committee of any change to his or her principal employment. If requested by the Chair of the Committee, after consultation with the members of the Committee, the director will submit a letter of resignation to the Chair of the Committee, and the Committee would then meet to consider whether to accept or reject the letter of resignation.Our Business

 

Risk Oversight

The Board has oversight responsibilities regarding risks that could affect the Company. This oversight is conducted primarily through the Audit Committee.

The Audit Committee has established procedures for reviewing the Company’s risks. These procedures include regular risk monitoring by management to update current risks and identify potential new and emerging risks, quarterly risk reviews by management with the Audit Committee, and an annual risk report to the full Board. In addition, the Audit Committee receives regular briefings from our Chief Information and Customer Connectivity Officer, Chief Financial Officer, Chief Accounting Officer, General Counsel, head of our internal audit function, and outside experts on cybersecurity risks and cyber risk oversight. During these meetings, the Audit Committee and management discuss these risks, risk management activities and efforts, best practices, lessons learned from incidents at other companies, the effectiveness of our security measures, and other related matters. The Audit Committee Chair reports on the committee’s meetings, considerations, and actions to the full Board at the next Board meeting following each committee meeting. In addition, the

The Compensation Committee considers risk in relation to the Company’s compensation policies and practices. The Compensation Committee’s independent compensation consultant provides an annual report to the committee on risk relative to the Company’s compensation programs.

 

The Company believes that this process for risk oversight is appropriate in light of the Company’s business, size, and active senior management participation, including by the Chief Executive Officer, in managing risk and holding regular discussions on risk with the Audit Committee, the Compensation Committee, and the Board.

 

Stock Ownership Guidelines

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17

We have Stock Ownership Guidelines that cover the Board, the Chief Executive Officer, and Other Principal Officers. For non-employee directors, the guideline is four times their annual retainer fee; for the Chief Executive Officer, the guideline is six times his annual base salary; and for Other Principal Officers, the guideline is a multiple of their base salaries.

 

Shares of unvested restricted stock, unvested restricted stock units (“RSUs”), and deferred stock units are counted towards beneficial ownership. Performance-based RSUs are counted once earned. Stock options and shares held through the Foot Locker 401(k) Plan are disregarded in calculating beneficial ownership for purposes of the Stock Ownership Guidelines.

 

Non-employee directors and executives who are covered by the guidelines are required to be in compliance within five years after the effective date of becoming subject to these guidelines. In the event of any increase in the required ownership level, whether as a result of an increase in the annual retainer fee or base salary or an increase in the required ownership multiple, the target date for compliance with the increased ownership guideline is five years after the effective date of such increase.

 

All non-employee directors and executives who were required to be in compliance with the guidelines as of the end of the 2015 fiscal year are in compliance. The Company measures compliance with the guidelines at the end of each fiscal year based on the market value of the Company’s stock, with the compliance determination at that point in time applying for the next fiscal year, regardless of fluctuations in the Company’s stock price.

 

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Corporate Governance

 

If

Cybersecurity

We are subject to technology risks including failures, security breaches, and cybersecurity risks which could harm our business, damage our reputation, and increase our costs in an effort to protect against such risks. Our cybersecurity program includes the following elements:

Technology: We employ a director or covered executive failslayered “defense, detect, and respond” strategy.

Benchmarking and external engagement: We benchmark our security practices against other organizations and are active in the information security community.

Third-party assessments: We engage a range of outside experts to be inregularly assess our organizational security programs, processes, and capabilities.

Internal assessments: We regularly test and improve our information systems through security risk and compliance withreview, user access campaigns, and other strategies.

Privacy

Our Privacy Policy and Privacy Statement govern our treatment of customer data. Our policies provide explanations of the guidelines by the required compliance date, he or she must hold the net shares obtained through future stock option exercisestypes of customer personal information we collect, how we use and share that information and the vestingmeasures we take to protect the security of restricted stockthat information. Our policies provide multiple points of contact through which our customers may initiate inquiries and RSUs, after paymentraise concerns to us regarding our collection, sharing, and use of applicable taxes, until coming into compliance with the guidelines. In order to take into consideration fluctuationstheir personal data. Our privacy policies and practices in the Company’s stock price, any person who has beenEuropean Union were updated in compliance with2018 in response to the guidelines asEU Global Data Protection Regulation (GDPR) requirements. Our privacy statements and practices in the United States are currently being reviewed in response to the requirements of the end of at least one of the two preceding fiscal years and who has not subsequently sold shares will not be subjectCalifornia Consumer Privacy Act (CCPA), which is scheduled to this holding requirement. For non-employee directors, the Nominating Committee will consider a director’s failure to comply with the Stock Ownership Guidelines when considering that director for reelection.come into force in January 2020.

 

Political Contributions

Our Code of Business Conduct prohibits making contributions on behalf of the Company to political parties, political action committees, political candidates, or holders of public office. The Company is a member of several trade associations which, as part of their overall activities, may engage in advocacy activities with regard to issues important to the retail industry or the business community generally.

 

Communications with the Board

The Board has established a procedure for shareholders and other interested parties to send communications to the non-management members of the Board. Shareholders and other interested parties who wish to communicate directly with the non-management directors of the Company should send a letter to the Board of Directors, c/o Secretary, Foot Locker, Inc., 330 West 34th Street, New York, New York 10001.

The Secretary will promptly send a copy of the communication to the independent Board leader, who may direct the Secretary to send a copy of the communication to the other non-management directors and may determine whether a meeting of the non-management directors should be called to review the communication.

A copy of the Procedures for Communications with the Board is available on the corporate governance section of the Company’s corporate website athttp://www.footlocker-inc.com/investors.cfm?page=corporate-governance. You may obtain a printed copy of the procedures by writing to the Secretary at the Company’s headquarters.

Retention of Outside Advisors

The Board and all of its committees have authority to retain outside advisors and consultants that they consider necessary or appropriate in carrying out their respective responsibilities. The independent accountants are retained by, and report directly to, the Audit Committee. In addition, the Committee is responsible for the selection, assessment, and termination of the internal auditors to which the Company has outsourced a portion of its internal audit function, which is ultimately accountable to the Audit Committee. Similarly, the consultant retained by the Compensation Committee to assist in the evaluation of senior executive compensation reports directly to that committee.

2016 Proxy Statement  |  13

Corporate Governance

Code of Business Conduct

The Company has adopted a Code of Business Conduct for directors, officers, and other employees, including its Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer. The Company periodically reviews the Code of Business Conduct and revises it, as appropriate. A copy of the Code of Business Conduct is available on the corporate governance section of the Company’s corporate website athttp://www.footlocker-inc.com/investors.cfm?page=corporate-governancefootlocker.com/corp. You may obtain a printed copy of the Code of Business Conduct by writing to the Secretary at the Company’s headquarters.

 

Any waivers of the Code of Business Conduct for directors and executive officers must be approved by the Audit Committee. The Company promptly discloses amendments to the Code of Business Conduct and any waivers of the Code of Business Conduct for directors and executive officers on the corporate governance section of the Company’s corporate website athttp://www.footlocker-inc.com/investors.cfm?page=corporate-governancefootlocker.com/corp.

 

Global Sourcing Guidelines

The Company has adopted Global Sourcing Guidelines that set out standards applicable to the production of all products sold in our stores. The Company periodically reviews the guidelines and revises them, as appropriate. The Global Sourcing Guidelines are available on the corporate governance section of the Company’s corporate website atfootlocker.com/corp. You may also obtain a printed copy of the guidelines by writing to the Secretary at the Company’s headquarters.

Succession Planning

The Board engages in an effective planning process to identify, evaluate, and select potential successors to the Chief Executive Officer and other members of senior management. The Chief Executive Officer reviews senior management succession planning with the Board. Each director has complete and open access to any member of management. Members of management, including those several levels below senior management, are invited regularly to make presentations at Board and committee meetings and meet with directors in informal settings to allow the directors to form a more complete understanding of the executives’ skills and character.

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    Foot Locker, Inc.

Corporate Governance

Related Person TransactionsShareholder Engagement and Voting

We individually inquire of each ofvalue our directorsshareholders’ views and executive officersinsights, which is why last year we extended our proactive shareholder engagement program with a specific focus on corporate governance and compensation. This program complements the ongoing dialogue throughout the year among our shareholders and our Chief Executive Officer, Chief Financial Officer, and Investor Relations team on financial and strategic performance. Our engagement program is designed to reach out to our shareholders and hear their perspectives about any transactions in whichissues that are important to them, both generally and with regard to the Company, and gather feedback. We believe that this engagement program promotes transparency between the Board and our shareholders and builds informed and productive relationships.

Beginning in the fall of 2018, our Lead Director and a member of management met individually with seven of our larger shareholders, as well as proxy advisory firms, and discussed topics such as board refreshment and composition, the board evaluation process, boardroom and company culture, executive compensation, and environmental, social, and governance topics. The Lead Director shared the feedback gained from these meetings with the full Board and the Nominating and Governance Committee, as well as compensation-specific feedback with the Compensation Committee, and, as a result of the feedback, enhancements have been made to this proxy statement to further improve transparency. As reflected in the following engagement cycle, the Company oversees a rigorous and comprehensive shareholder engagement process:

 

Please continue to share your thoughts or concerns at any time. The Board has established a process to facilitate communication by shareholders with the Board, described below.

Communications with the Board

Shareholders and other interested parties who wish to communicate directly with the non-management directors of these related persons or their immediate family members are participants. We also make inquiries withinthe Company should send a letter to the Board of Directors, c/o Secretary, Foot Locker, Inc., 330 West 34th Street, New York, New York 10001.

The Secretary will promptly send a copy of the communication to the Lead Director, who may direct the Secretary to send a copy of the communication to the other non-management directors and may determine whether a meeting of the non-management directors should be called to review the communication.

A copy of the Procedures for Communications with the Board of Directors is available on the corporate governance section of the Company’s recordscorporate website atfootlocker.com/corp. You may obtain a printed copy of the procedures by writing to the Secretary at the Company’s headquarters.

2019 Proxy Statement    

19

Corporate Governance

Majority Voting in the Election of Directors

Directors must be elected by a majority of the votes cast in elections for information on any of these kinds of transactions. Once we gather the information, we then review all relationships and transactions in which the Companynumber of nominees for election does not exceed the number of directors to be elected. A plurality vote standard applies to contested elections where the number of nominees exceeds the number of directors to be elected. Our Corporate Governance Guidelines provide that any incumbent director who does not receive a majority of the votes cast in an uncontested election is required to tender his or her resignation for consideration by the Nominating and any of our directors, executive officers, their immediate family membersGovernance Committee. The Nominating and Governance Committee will make a recommendation to the Board whether to accept or five-percent shareholders are participants to determine, based onreject the facts and circumstances,resignation, or whether other action should be taken. The director who tenders his or her resignation will not participate in the CompanyCommittee’s or the related persons have a direct or indirect material interest. The General Counsel’s office coordinates the related person transaction review process. The Nominating Committee reviews any reported transactions involving directors and their immediate family members in makingBoard’s decision. In determining its recommendation to the Board, on the independenceNominating and Governance Committee will consider all factors that it deems relevant. Following such determination, the Company will promptly disclose publicly the Board’s decision, including, if applicable, the reasons for rejecting the tendered resignation.

Proxy Access

Under our proxy access by-law, a shareholder, or a group of up to 20 shareholders, owning at least 3% of the directors.Company’s outstanding Common Stock continuously for at least three years as of the date of the notice of nomination, may nominate and include in the Company’s proxy materials director nominees constituting up to two individuals or 20% of the Board, whichever is greater (subject to certain limitations set forth in the By-Laws), provided that the shareholder(s) and nominee(s) satisfy the requirements specified in the By-Laws.

Environmental, Social, and Governance Highlights

Foot Locker recognizes the importance of environmental, social, and governance (ESG) issues to shareholders and formed a global cross-functional team, including Legal, Human Resources, Supply Chain, Sourcing, and Real Estate/Construction, among other functions, to monitor our ESG efforts. The Company’s written policiesBoard oversees our ESG program and procedures for related person transactions are included within the Corporate Governance Guidelines and receives regular updates from management.

Foot Locker’s Code of Business Conduct. There were no related person transactions in 2015.ESG priorities are centered onOpportunity;Community;Worker Dignity; andSustainability.

 

14  |  2016 Proxy StatementOpportunity

Board

We aim to create opportunities for all of Directorsour employees.

 

Employ over 49,000 people globally

Organization

Provide great jobs and Powersinclusive advancement in retail

The Board has responsibility for establishing broad corporate policies, reviewing significant developments affecting the Company,

Women represent 46% of our total global workforce, 33% of executives, and monitoring the general performance44% of independent directors of the Company. Our By-laws provide for a Board consisting of between 7 and 13 directors. The exact number of directors is determined from time to time by the entire Board. The Board has fixed the number of directors at 10.

 

The Board held five meetings during 2015. All

84% of our directors attended at least 75%U.S. workforce* and 22% of the meetingsindependent directors of the Board are ethnically diverse

Initiated disability hiring program to attract, hire, and committees on which they servedretain employees with disabilities

944 employees promoted globally in 2015.2018

*U.S. workforce represents 74% of global workforce.

 

Directors’ Independence

A director is not considered independent under NYSE rules if he or she has a material relationship with the Company that would impair his or her independence. In addition to the independence criteria established by the NYSE, the Board has adopted categorical standards to assist it in making its independence determinations regarding individual directors. These categorical standards are contained in the Corporate Governance Guidelines, which are posted on the Company’s corporate website athttp://www.footlocker-inc.com/investors.cfm?page=corporate-governance.

The Board has determined that the following categories of relationships are immaterial for purposes of determining whether a director is independent under the NYSE listing standards:

 

Categorical Relationship20

    Foot Locker, Inc.

Corporate Governance

 Description
Fostering Diversity, Inclusion, and Equality
   
Investment Relationships

 

Our goal is to attract, develop, and retain employees from all walks of life. As of the fiscal year-end, women comprised 46% of our total employees globally, 33% of our executives, and 44% of our independent directors. At Foot Locker, women serve in several key leadership roles, including as Chief Financial Officer, Chief Human Resources Officer, General Counsel and Secretary, Chief Accounting Officer, Vice President—Global Total Rewards, and Vice President and General Manager, Foot Locker Pacific. As of the fiscal year-end, 84% of our U.S. employees, and 22% of the independent directors of the Board were ethnically diverse. Foot Locker treats all employees fairly regardless of their race, gender, age, ethnicity, sexual orientation, disability, or national origin. Foot Locker was recognized again in 2018 for our industry leading ESG practices with awards for Best Workplaces for Diversity, and Best Workplaces in Retail, both conferred by the Great Place to Work Institute. Foot Locker was also rated on Forbes’ Most Engaged Customer List in 2018 for its “relentless focus on the customer experience.” We are also committed to Board diversity; 66% of the independent directors are ethnically diverse or female, including our Lead Director. In 2018, the NACD honored the Board with an NACD NXT recognition award for excellence in harnessing board diversity and innovation as a strategy for building long-term value. According to NACD, Foot Locker was chosen “for its devotion to diversity and inclusion which is clearly systemic and strategic for the board, management, and operations.” We also recently created a disability hiring initiative in partnership with the CompanyNational Organization on Disability at one of our distribution centers in order to establish the appropriate conditions to attract, hire, and retain employees with disabilities. Our goal is to increase the number of qualified applicants by tapping talent pools of individuals with disabilities, including veterans, and train employees with respect to disability awareness. Our commitment to diversity and inclusion is also reinforced by the Code of Business Conduct (COBC), which includes a zero-tolerance policy for any form of discrimination, harassment, or retaliation.

 A director and any family member may own equities or other securities of the Company.
   
Relationships with Other Business EntitiesAdvancing Careers and Developing Talent A director and any family member may be a director, employee (other than an executive officer), or beneficial owner of less than 10% of the shares of a business entity with which the Company does business, provided that the aggregate amount involved in a fiscal year does not exceed the greater of $1 million or 2% of either that entity’s or the Company’s annual consolidated gross revenue.
   
RelationshipsWe strive to develop a diverse pipeline of talent and provide our employees with Not-for-Profit Entitiesadvancement opportunities. As a retailer that values hands-on experience in our stores, our store employees have opportunities to take on higher-level field and corporate positions. The best testaments to the opportunities we provide are our employees who started out at stores and rose through the ranks to senior management positions. Employees frequently work for multiple brands and in multiple functions throughout their careers. Average non-store employee tenure (at the manager and higher levels) is 12 years. We also offer employees at all levels a variety of training opportunities, ranging from online courses to in-person workshops and multi-day programs.
 A director
At Foot Locker, we are all about developing and supporting our people. E-learning, training, and scholarships are a few ways in which we enrich employees professionally. “You Develop,” our e-learning program, features an objectives worksheet to help employees have constructive career conversations with their managers. In 2018, we launched a “Leading in a Matrix Organization” training workshop across our global offices to skill-build in the areas of collaboration and trust to enable employees to work more effectively as a team. Internal and external speakers share lessons learned during “Shoe on This” trainings (sessions are recorded and posted on our employee portal) and our online learning platform, Lynda.com, offers video courses on software and professional skills. Our Foot Locker Associate Scholarship Program awards nine $5,000 scholarships, and one $10,000 scholarship (known as the Ken C. Hicks Associate Scholarship), annually to employees.

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21

Corporate Governance

Benefits
We believe we offer competitive compensation and benefits, including health and wellness benefits (i.e., medical, dental and vision coverage), financial benefits (i.e., pension, 401(k) Plan with Company matching contribution, Employee Stock Purchase Plan (ESPP) at a 15% discount, and commuter benefits), and work-life balance and lifestyle benefits (paid time off (PTO) and Employee Discount Program).
To be the best, employees need to feel their best. As part of our comprehensive benefits offering, we provide eligible employees with personalized wellness coaching. The one-on-one program integrates phone and mail-based communications with an online interactive health coach and is designed to target specific goals around nutrition, exercise, and heart health. Select facilities feature an on-site gym for convenient workouts and our employee discount platform, “YouDecide,” offers discounted rates for local fitness clubs. While health is a year-round priority, some corporate offices organize a Wellness Month with free workout classes, a health fair, and fresh fruit delivery.
We are our customers—our employees are true sneakerheads. One of the great aspects of our culture is our ability to celebrate and fuel the sneaker passion of not just our customers, but also our employees. To celebrate that passion, we offer employee product discounts and access to exclusive offerings from a range of vendors. With the ever-evolving retail landscape, Foot Locker is committed to fostering elevated in-store experiences featuring high-profile guests through vendor partnerships that make us stand out from the crowd. Our employees gain exposure to unique opportunities with athletes, celebrities, and other tastemakers who impact the youth culture that inspires and fuels the Company, as well as access to events like the New York City Marathon (employees can gain coveted entry in the race), NBA All Star Weekend, NBA Drafts, and concerts.
Ensuring Worker Safety
We are dedicated to fundamental worker safety. We strive to prevent and promptly address any family member mayemployee work-related injuries. Over time, we have experienced a decrease in the number of recorded accidents and lost time from employees out of work due to work-related injuries. We have a centralized online reporting system that tracks all incidents and injuries. We analyze the information at least quarterly to assess risks and develop preventive measures. Our Risk Management team analyzes recurring injuries and issues to determine trends and if current policies or practices need to be amended or if more training is required to address risks. Our field auditors review safety measures in their audit process.
Ethics and Compliance
Culture is the foundation of everything we do at Foot Locker. We define culture as our values in action. Our culture is one of high performance, and it is how we live out our values.How we do business is just as important aswhat we do. The COBC serves as our ethical compass for the commitment we make to our stakeholders, customers, and one another. Our Global Legal Department manages our COBC program by providing training and online education, and partners with the Internal Controls Department to audit employee assessments. Employees are required to certify COBC compliance annually. When issues arise, our employees are encouraged to speak up and use our open-door process for discussing any concerns. We also provide a director or employee (other than an executive officer orconfidential COBC hotline. The General Counsel reports to the equivalent) ofAudit Committee on the COBC program.
  Community
We aim to help strengthen and support local communities where we do business.
●      Raised and donated over $9 million for scholarships since 2004, plus footwear and apparel donations to several organizations
●      U.S. non-store employees permitted paid time-off for volunteering in their communities

22

    Foot Locker, Inc.

Corporate Governance

Adopt One Village Inc, a not-for-profit organization that provides aid to whichsmall villages in Ghana

At Foot Locker, we do well by doing good. Giving back to those in need and enriching people’s lives is a deep-rooted philosophy imbued in our corporate culture that extends to our employees around the Company (includingworld. That’s why we permit all U.S. non-store employees one paid day off each year to give back to their communities. In 2018, our employees exemplified our core value of community by uniting to effect positive change during times of need. In addition to monetary contributions from the Foot Locker Foundation) makes contributions, providedFoundation and our long-standing partner, the Two Ten Footwear Foundation, we donated footwear and apparel to families in need.

The Foot Locker Foundation channels our support to those in need through educational initiatives, namely the Foot Locker Scholar Athletes Program, which awards 19 $20,000 scholarships, and one $25,000 scholarship (known as the Ken C. Hicks Scholar Athletes Scholarship), annually to student athletes since 2011. The program has invested nearly $3 million in the education and future of some of America’s most promising student athletes since 2011. We have also raised millions of dollars in support of higher education through our annual “On Our Feet” fundraising gala, benefitting hundreds of students through a joint scholarship program with our partner, the United Negro College Fund, Inc. We have raised and donated over $9 million for scholarships since 2004. In addition, Kids Foot Locker collaborates with the Boys & Girls Clubs of America (BGCA) on the “In My Shoes Challenge” by inviting children from BGCA to share their interests and what it means to them—such as sports, music, art, writing, or photography—by posting a photo and caption through social media. Foot Locker also dedicates significant resources to many other important social causes around the world, such as the Fred Jordan Missions, the Two Ten Foundation, the American Red Cross, the American Cancer Society’s Making Strides Against Breast Cancer Walk, Adopt One Village Inc. (Ghana), the Pluryn Foundation (The Netherlands), the Starlight Children’s Foundation (Australia), and the Special Olympics (Canada).

  Worker Dignity
We respect all workers involved in our supply chain.
●     Global Sourcing Guidelines (GSG) are distributed annually to our suppliers
●     Foot Locker has consolidated its private label supplier base to work more closely with fewer suppliers with deeper partnerships
●     Private label products sourced by Foot Locker are produced in China (59%), Pakistan (27%), Vietnam (10%), and Other (Thailand, United States, Portugal, Turkey, and Honduras) (4%)
Foot Locker is concerned with the safety and fair treatment of all workers involved in our supply chain, wherever the workers are located. We work hard to choose reputable business partners who are committed to ethical standards and business practices. At a minimum, we expect our suppliers to comply, and to ensure that their subcontractors comply, with all legal requirements applicable to their business. Foot Locker will only do business with suppliers whose workers are, in all cases, present voluntarily, compensated fairly and allowed the aggregate amountright of the Company’s contributionsfree association and who are neither put at risk of physical harm, discriminated against, nor exploited in any fiscal year do not exceedway. To this end, Foot Locker has developed GSG, which are distributed annually and require all branded and private-label vendors and suppliers globally to respect certain standards, notwithstanding more relaxed standards, if any, imposed by applicable local law. We have also developed several other policies to address specific ESG concerns, including the greater of $1 millionAnti-Corruption Policy and Conflict Minerals Policy. The GSG are incorporated into our Vendor Standards Manual. Regular factory audits are performed by a third party or 2% ofour in-house auditors. Foot Locker also reserves the not-for-profit entity’s total annual receipts.right to make periodic, unannounced inspections to verify compliance with the GSG. Suppliers agree to maintain and provide, upon request, all documentation necessary to demonstrate compliance. In recent years, we have taken steps to consolidate our supplier base so that we are working more closely with fewer suppliers, and deepen our partnerships with suppliers to forge a more collaborative approach grounded in continuous engagement and improvement.

2019 Proxy Statement

23

 

2016 Proxy Statement  |  15

Corporate Governance

 
  Sustainability
We aim to enhance the sustainability of our operations and value chains.
●      Reduced energy and eliminated waste
Our dedication to reducing the environmental impact of our stores, distribution centers, and offices means implementing practices that are more efficient and reducing our waste production. These efforts both reduce our environmental impact and are cost-effective.
Energy
Foot Locker is in the process of a multi-year rollout to replace all of its fluorescent fixtures with LED lights—which consume 80% less energy than conventional lights—in its stores, warehouses, and distribution centers. Not only are these changes good for the environment, but they could reduce our annual energy costs over time and they last five to 10 times longer. We have also begun installing “lightstat” thermostats in many of our stores. These “smart” thermostats utilize a photocell to determine whether a space is occupied and resets the heating or cooling accordingly. We are also exploring other options that achieve significant energy reductions while balancing business needs. Our corporate headquarters in New York has partnered with our landlord to set corporate goals to reduce our energy consumption in our headquarters by 35%, aligning with the NYC Mayor’s commitment of reducing 80% of carbon emissions by 2050.
Distribution
Foot Locker has implemented measures to reduce its greenhouse gas emissions. We have committed to increasing the amount of freight we ship within each carrier and only shipping trucks or containers once full. We have committed to using cleaner modes of transportation and encouraging the use of fuel-saving strategies and technologies. We are also enhancing our data collection capabilities to better measure results. We are working with our vendor partners and adding mini-distribution centers into our supply chain network to accept and distribute product. This decreases shipping runs and accelerates speed of product to the customer. Our trucks frequently run overnight to reduce idling time and pollution. We also make efforts to ship intermodal when available.
Waste
Our biggest waste stream is from packaging, namely boxes used to transport and protect our merchandise as it moves from our distribution centers to stores. We curtail this waste, however, by reusing boxes within our supply chain system and for products returned to the vendors. We do not utilize hangers or tote bags for shipping. We primarily utilize corrugated and recycled boxes and sell back several thousand tons of corrugated boxes for recycling each year. We also continue to search for additional solutions, including through partnerships with our brands, suppliers, and the greater footwear and apparel industry, to reduce packaging weight and change packaging materials to decrease overall waste volume and allow for greater recycling. For example, the Retail Industry Leaders Association (RILA), of which we are a member, has convened retailers to explore ways to collect and recycle these major waste streams.

Board of Directors

 

The Board, upon the recommendation of the Nominating Committee, has determined that the following directors are independent under the NYSE rules because they have no material relationship to the Company that would impair their independence:

Maxine Clark

24

Jarobin Gilbert, Jr.    Foot Locker, Inc.Steven Oakland
Nicholas DiPaoloGuillermo G. MarmolCheryl Nido Turpin
Alan D. FeldmanMatthew M. McKennaDona D. Young

 

In making its independence determination, the Board reviewed recommendations of the Nominating Committee and considered Dona D. Young’s relationship as a non-employee member of the Supervisory Board of a company with which our European subsidiary does business. The Board has determined that this relationship meets the categorical standard for Relationships with Other Business Entities and is immaterial with respect to determining independence.

 

The Board also considered, in making its independence determination, Matthew M. McKenna’s relationship as an adjunct professor of Fordham University School of Law because the Foot Locker Foundation awarded a $5,000 scholarship to a Fordham University student. The Board has determined that this relationship meets the categorical standard for Relationships with Not-for-Profit Entities and is immaterial with respect to determining independence.

 

Ken C. Hicks served as a director during 2015 until his retirement from the Company in May 2015. The Board determined, on the recommendation of the Nominating Committee, that Mr. Hicks was not independent because he was an executive officer of the Company while serving as a director.

The Board has determined that all members of the Audit Committee, the Compensation Committee, the Finance Committee, and the Nominating Committee are independent as defined under the NYSE listing standards and the director independence standards adopted by the Board.

16  |  2016 Proxy Statement

Board of Directors

 

(GRAPHIC) 

Committees of the Board

The Board has delegated certain duties to committees, which assist the Board in carrying out its responsibilities. There are five standing committees of the Board. Each independent director serves on at least two committees. The key oversight responsibilities of the committees, the current committee memberships, and the number of meetings held during 2015, and the functions of the committees2018 are described below.

 

The Board has adopted charters for each of the Audit Committee, the Compensation Committee, the Finance Committee, and the Nominating and Governance Committee. Copies of the charters for these committees are available on the corporate governance section of the Company’s corporate website atfootlocker.com/corp. You may also obtain printed copies of these charters by writing to the Secretary at the Company’s headquarters.

As a general principle, the Board believes that the periodic rotation of committee assignments on a staggered basis is desirable and provides an opportunity to foster diverse perspective and develop breadth of knowledge within the Board. In 2018, Mr. Feldman rotated off as Chair of the Compensation Committee, remaining as a member of the Committee, and Ms. Underhill took on the role of Committee Chair.

Audit
Committee

Guillermo G. Marmol, Chair		 A
 (GRAPHIC)

Key Oversight Responsibilities

Members:●

•appoints the independent accountantsClark, Gilbert, Marmol,
McKenna

9 meetings in 2015
•auditors

●approves the independent accountants’auditors’ compensation

•

●assists the Board in fulfilling its oversight responsibilities in the following areas:

o

○accounting policies and practices

o

○the integrity of the Company’s financial statements

o

○compliance with legal and regulatory requirements

o

○ the Company’s risk oversight

oassessment and risk management policies

○ cybersecurity

○the qualifications, independence, and performance of the independent accountants

oauditors

○the qualifications, performance, and compensation of the internal auditors

•

○ reviews and monitors compliance with the Company’s Code of Business Conduct

●  establishes procedures for the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls, orand auditing matters

This committee consists of four independent directors, as independence is defined under the SECU.S. Securities and Exchange Commission (the “SEC”) and NYSE rules applicable to audit committee members. All of the members meet the expertise requirements under the NYSE rules. The Board has determined that Mr. McKenna qualifies as an “audit committee financial expert,” as defined by the rules under the Securities Exchange Act, of 1934, as amended (the “Exchange Act”), through his relevant experience as a former senior financial executive of a large multinational corporation. Mr. McKenna is independent under the applicable NYSE and Exchange Act rules.

TheAudit Committee Reportappears on page 70.

Chair

Guillermo G. Marmol

 
The Audit Committee Report appears on Page 77.

Other Members

McKenna, Payne, Young

9meetings in 2018

 

2016 Proxy Statement  |  17

 
2019 Proxy Statement

25

Board of Directors

 

Compensation
and Management
Resources
Committee

Alan D. Feldman,
Chair		 C
 (GRAPHIC)

Key Oversight Responsibilities

Members:●

•determines the compensation of the Chief Executive OfficerDiPaolo, Feldman,
Oakland, Turpin, Young

5 meetings in 2015
•

●reviews and approves all compensation for the Company’s executive management group, which consists of the executive officers and corporate officers

•determines significant elements of the compensation of the chief executives of our operating divisions
•

●responsible for decisions regarding equity compensation for other employees

•

●assesses risk in relation to the Company’s compensation policies and practices

•

●administers the Company’s various compensation plans, including the incentive plans, the equity-based compensation plans, and the employees’ stock purchase planESPP (other than the Company’s 2007 Stock Incentive Plan (the “Stock Incentive Plan”), committee members are ineligible to participate in these compensation plans)

•

●reviews and makes recommendations to the Board concerning executive development and succession

•meets jointly with the Nominating Committee to review

● reviews non-employee directors’ compensation and makemakes recommendations to the Board concerning the form and amount of non-employee directors’ compensation

This committee consists of five independent directors, as independence is defined under the NYSE rules applicable to compensation committee members.

 

Please seeSee theCompensation Discussion and Analysis(“CD&A”) on Pages 28pages 33 through 4450 for a discussion of the Compensation Committee’s procedures for determining compensation.compensation, and theCompensation Committee Reporton page 50.

Chair

Kimberly Underhill

Other Members

Clark, Feldman, Oakland, Turpin

6meetings in 2018

Finance  F
 (GRAPHIC)

Key Oversight Responsibilities

●reviews the Company’s financial plans and objectives

●reviews and makes recommendations to the Board regarding the Company’s annual operating budget and two-year plans

● reviews the Company’s allocation of capital, annual capital budget, and policies related to capital and other expenditures

● reviews and makes recommendations to the Board regarding the Company’s uses of cash, including capital expenditures, stock and bond repurchases, and dividend payments

● reviews and makes recommendations to the Board regarding the Company’s cash requirements and sources of cash, including debt or equity issuances, revolving credit facilities, or other debt instruments or facilities

● reviews the Company’s insurance and self-insurance reserves

● reviews the Company’s derivatives policy and its use of derivatives

● reviews and makes recommendations to the Board regarding proposed mergers, combinations, acquisitions, offers to purchase the Company’s shares or significant assets, divestitures, and strategic investments

● reviews the Company’s Corporate Development Approval process

● reviews reports from the Retirement Plan Committee regarding the asset allocation and investment performance of the Company’s North America pension funds

Chair

Matthew M. McKenna

Other Members

Clark, Feldman, Marmol, Underhill

9meetings in 2018 

26

Foot Locker, Inc.

Board of Directors

    
FinanceNominating and
Strategic
Planning
Committee Governance

Matthew M. McKenna, Chair		N
 (GRAPHIC) 

Key Oversight Responsibilities

Members:

•reviews the overall strategic and financial plans, including capital expenditure plans, proposed debt or equity issues, and the capital structureClark, DiPaolo, Feldman, Marmol, McKenna

4 meetings in 2015
•considers and makes recommendations to the Board concerning dividend payments and share repurchases
•reviews acquisition and divestiture proposals

18●  |  2016 Proxy Statement

Board of Directors

Nominating and Corporate Governance Committee

Dona D. Young, Chair		Key Oversight ResponsibilitiesMembers:
•oversees corporate governance matters affecting the Company, including developing and recommending criteria and policies relating to director service and tenure of directorsGilbert, Oakland, Turpin, Young

5 meetings in 2015
•

●  establishes criteria for Board candidates

•

●  retains the services of a third-party search firm from time to time to identify potential director candidates

•

●selects new director nominees to recommend to the Board and

●  considers the re-nomination of existing directors by considering a varietyafter it conducts an annual review of factors that it believes contribute to an individual’s ability to be an effective director, as well as the overall effectiveness of the Board, including an individual’s understanding of business, finance, corporate governance, marketing, and other disciplines relevant to the oversight of a large public company; understanding of our industry; independence; integrity; personal and professional ethics; business judgment; the ability and willingness to devote sufficient time to Board responsibilities; educational and professional background; international experience; personal accomplishment; community involvement; cultural and ethnic diversity; and other skills,each director’s qualifications, experience, and qualifications as may be relevant

•independence

●  reviews membership on the Board committees and, after consultation with the Non-Executive ChairmanChief Executive Officer and the Chief Executive Officer,Lead Director, makes recommendations to the Board annually regarding committee members and committee chair assignments

•meets jointly with

●  oversees the Compensation Committee to review non-employee directors’ compensation and make recommendations toannual self-assessment process for the Board concerning the form and amount ofcommittees

●  reviews trends and governance with regard to non-employee directors’directors' compensation

Shareholders who wish to recommend candidates for Board membership may contact the Nominating and Governance Committee in the manner described on Page 13page 19 underCommunications with the Board. Shareholder nominations must be made according to the procedures required under, and within the timeframe described in, the By-lawsBy-Laws and underDeadlines and Procedures for Nominations and Shareholder Proposalson Page 88.page 73. Shareholder-recommended candidates and shareholder nominees whose nominations comply with these procedures will be evaluated by the Nominating and Governance Committee in the same manner as the Company’s nominees.

Chair

Steven Oakland

 

Other Members

Payne, Turpin, Young

4meetings in 2018 

 

 

2016 Proxy Statement  |  19

Board of Directors

ExecutiveE
 (GRAPHIC)

Key Oversight Responsibilities

Members:●  

Committee•shares all of the powers of the Board during intervals between Board meetings, except for certain matters reserved to the BoardDiPaolo, Feldman,

Chair

Richard A. Johnson Marmol,

Nicholas DiPaolo,McKenna, Young
Chair

 

Other Members

Marmol, McKenna,

Oakland, Underhill, Young

No meetings in 20152018

 

2019 Proxy Statement

27

Board of Directors

Director Compensation

The Nominating and Management ResourcesGovernance Committee Interlocks and Insider Participation

Nicholas DiPaolo, Alan D. Feldman, Steven Oakland, Cheryl Nido Turpin, and Dona D. Young served on the Compensation Committee during 2015. Nonejointly oversee our non-employee director compensation program, and conduct annual reviews and make recommendations for adjustments, as appropriate, to the Board. The Compensation Committee reviews non-employee directors’ compensation and makes recommendations to the Board concerning the form and amount of the committee members was an officer or employee of the Company or any of its subsidiaries,non-employee directors’ compensation. The Nominating and there were no interlocksGovernance Committee reviews trends and governance with other companies within the meaning of the SEC’s proxy rules.regard to non-employee directors’ compensation.

 

Directors’ Compensation and Benefits

Non-employeeOur non-employee directors are paid an annual retainer fee and meeting fees for attendance at each Board and committee meeting. The Non-Executive ChairmanLead Director and the committee chairs are each paid additional retainer fees for service in these capacities. Our non-employee directors’ compensation program consists of a balance of cash and equity, with an emphasis on equity over cash.

In connection with the review conducted in fiscal year 2018, the independent outside consultant on director compensation retained by the Compensation Committee assessed the compensation paid to our non-employee directors against non-employee director compensation trends and data from our company peer group, including overall trends and governance principles, market competitiveness of our program, and the mix of cash and equity provided under our program. After consultation with the independent outside consultant, the Nominating and Governance Committee and Compensation Committee found the non-employee director compensation program to be appropriate, and no changes to the compensation program were recommended or implemented in 2018, as the compensation approximates the peer group median and the pay mix is aligned with peer and broad market practice.

In February 2019, on the recommendation of the Nominating and Governance Committee, the Board placed a cap of $600,000 on non-employee directors’ compensation, inclusive of cash and equity, for each non-employee director for each fiscal year.

Key Principles of Director Compensation Program

●Peer Groups: When establishing reference points for market comparisons of our outside directors’ compensation program, we consider the retail peer group used for our executive compensation purposes and general industry data for similarly-sized companies. SeeBenchmarking Approachon page 45 for more information on our peer group.

●Pay Evaluation Perspective: When assessing the competitive position of our outside directors’ compensation program, the primary focus is on total targeted compensation opportunity.

●Pay Position: The targeted pay position for our outside directors’ compensation program is the median of the retail and general industry market reference points.

●Pay Mix: Our outside directors’ compensation program consists of a balance of cash and equity, with an emphasis on equity over cash. SeeComponents of Director Compensation Programon page 29 for further information.

●Differentiation: The outside directors’ compensation provides additional compensation for leadership positions on the Board, including non-executive chair, lead director, and committee chair roles. SeeComponents of Director Compensation Programon page 29 for further information.

●Stock Ownership: Significant stock ownership guidelines established for outside directors encourage better alignment with shareholders’ interests, with compliance measured at least annually, as described further inStock Ownership Guidelineson page 16.

●Deferral Opportunities: Outside directors are provided with the opportunity to defer compensation by making additional investments in our Common Stock on an elective basis. SeeDeferral Electionon page 29 for further information.

●Total Compensation Limits: Meaningful limits on outside directors’ compensation have been established to ensure consistency with sound governance practices.

●Regular Review: The Nominating and Governance Committee conducts regular reviews of governance practices and trends in directors’ compensation to ensure consistency of our program with sound governance practices and makes recommendations, as appropriate, to the Board. The Compensation Committee conducts regular reviews of our outside directors’ compensation program and makes recommendations to the Board regarding the amount and form of directors’ compensation each year.

28

Foot Locker, Inc.

Board of Directors

Components of Director Compensation Program

Our non-employee directors are paid an annual retainer fee and meeting fees for attendance at each Board and committee meeting. The Lead Director and the committee chairs are each paid additional retainer fees for service in these capacities. We do not pay additional compensation to any director who is also ana Company employee of the Company for service on the Board or any committee. The independent compensation consultant retained by the Compensation Committee conducts an annual review and analysisNone of the directors’ compensation program and makes recommendationscurrent independent directors is entitled to the Compensation Committee and Nominating Committee, jointly, with regard to the program structure. receive any retirement benefits.

Below is a summary of the fees paid to the non-employee directors in 2015:2018:

 

Summary of Directors’ CompensationFeeAmount
Annual Retainer:Retainer$130,000140,000 payable 50% in cash and 50% in Common Stock. Directors may elect to receive up to 100% of their annual retainer, including their committee chair retainer, in Common Stock. We calculate the number of shares paid to the directors for their annual retainer by dividing their retainer fee by the closing price of a share of Common Stock on the last business day preceding the July stock payment date.
Committee Chair Retainers:Retainers$25,000:Audit Committee Chair
 $25,000:Compensation Committee Chair
 $15,000:Finance Committee Chair
 $15,000:Nominating and Governance Committee Chair
 N/A:None:Executive Committee Chair
 
 The committee chair retainers are paid in the same form as the annual retainer.
Lead Director Retainer 
Non-Executive Chairman Retainer:$125,00050,000 payable in cash.
Meeting Fees 
Meeting Fees:$2,000 per Board and committee meeting attended.
RSUs 
RSUs:1,024RSUs valued at $70,022 awarded to continuing directors following the 2018 Annual Meeting of Shareholders. In 2018, each director received an award of 1,555 RSUs. The number of RSUs granted in 2015 was calculated by dividing $65,000$70,000 by the closing price of a share of Common Stock on the grant date of grant ($63.49)45.03). The RSUs will vest in May 2016,2019, one year following the grant date, of grant.provided that the director continues to serve on the Board through the vesting date. Each RSU represents the right to receive one share of Common Stock on the vesting date. No dividends are paid or accrued on the RSU awards.

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Board of Directors

 

Deferral Election

 

Non-employee directors may elect to receive all or a portion of the cash component of their annual retainer fee, including committee chair retainers, in the form of deferred stock unitsDSUs or to have these amounts placed in an interest account. Directors may also elect to receive all or part of the stock component of their annual retainer fee in the form of deferred stock units.DSUs. A DSU is an accounting equivalent of one share of Common Stock. The interest account is a hypothetical investment account bearing interest at the rate of 120% of the applicable federal long-term rate, compounded annually, and set as of the first day of each plan year. A stock unitNone of the current directors have elected to place any amount of their annual retainer fee in an interest account.

Directors’ Retirement Plan

The Directors’ Retirement Plan was frozen as of December 31, 1995. No current directors are eligible to participate in this plan. Currently, two former directors participate in the plan. The retirement benefit under this plan is an accounting equivalent$24,000 per year, payable quarterly for the lesser of one share of Common Stock.10 years after the director leaves the Board or until the director’s death.

 

Miscellaneous

 

We reimburse non-employee directors for reasonable expenses incurred in attending Board and committee meetings, other meetings with management, and continuing education programs, including their transportation, hotel accommodations, and meals. Directors and their immediate families are eligible to receive the same discount on purchases of merchandise from our stores, catalogs, and Internet siteswebsites that is available to employees. We reimburse non-employee directors for reasonable expenses incurred in attending

2019 Proxy Statement

29

Board and committee meetings, including their transportation, hotel accommodations, and meals.of Directors

 

Fiscal 20152018 Director Compensation

The amounts paid to each non-employee director for fiscal 2015,2018, including amounts deferred under the Company’s Stock Incentive Plan, and the RSUs granted to each director are reported in the tables below:

 

Director Compensation

 

(a) (b) (c) (d) 
  Fees Earned Stock   
  or Paid in Awards Total 
Name Cash ($) ($)(1)(2) ($) 
M. Clark 103,000   130,014  233,014 
N. DiPaolo 187,905   139,596  327,501 
A. Feldman 105,536   168,527(3) 274,063 
J. Gilbert, Jr. 105,000   130,014  235,014 
G. Marmol 115,536   142,478  258,014 
M. McKenna 44,099   209,957  254,056 
S. Oakland 62,500   163,609(3) 226,109 
C. Turpin 95,000   171,751(3) 266,751 
D. Young 94,960   191,946(3) 286,906 

2016 Proxy Statement  |  21

Board of Directors

(a) (b) (c) (d) (e)
Name Fees Earned
or Paid in
Cash ($)		 Stock
Awards
($)(1)		 All Other
Compensation
($)		 Total
($)
M. Clark 112,028 139,994 — 252,022
A. Feldman 121,425 190,831 — 312,256
J. Gilbert, Jr.(2) 39,384 29,115 18,000(3)86,499
G. Marmol 130,550 152,472 — 283,022
M. McKenna 125,552 147,470 — 273,022
S. Oakland 111,552 149,616 — 261,168
U. Payne, Jr. 104,028 139,994 — 244,022
C. Turpin 104,028 201,456 — 305,484
K. Underhill 115,153 139,994 — 255,147
D. Young 120,417 263,200 — 383,617

 

Notes to Director Compensation Table

(1)Column (c) reflects the following threefour items:

 

(i)the grant date fair value determined in accordance with FASB ASC 718 for the portion of a director’s annual retainer fees (including committee chair retainer fees) for fiscal year 2018 paid in shares of Common Stock (including any portions deferred in the form of DSUs under the Stock Incentive Plan) ($52.65 per share representing the closing price of a share of Common Stock on June 29, 2018). Such shares of Common Stock are fully vested on grant, regardless of whether deferred into DSUs.

Retainer fees paid in stock or deferred by the director

(ii)the grant date fair value determined in accordance with FASB ASC 718 for the portion of a director’s quarterly retainer fees (including committee chair retainer fees) for fiscal year 2018 payable in cash but deferred in the form of DSUs under the Stock Incentive Plan ($47.29 per share for DSUs granted on January 1, 2018 (pro rated for two months of 2018 fiscal year), $43.83 per share for DSUs granted on April 1 2018, $52.04 per share for DSUs granted on July 1, 2018, and $50.20 per share for DSUs granted on October 1, 2018 representing the closing price of a share of stock on the quarterly grant date). Such shares of Common Stock are fully vested on grant.

(iii)the grant date fair value determined in accordance with FASB ASC 718 for RSUs granted in fiscal year 2018 ($45.03 per share representing the closing price of a share of Common Stock on the grant date). The RSUs will vest in May 2019. The amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions.

(iv)the grant date fair value, determined in accordance with FASB ASC 718, for dividend equivalents paid on DSUs and credited in the form of additional DSUs, made to Messrs. Feldman and Oakland and Mmes. Turpin and Young ($41.67 per share for DSUs granted on May 4, 2018, $47.16 per share for DSUs granted on August 3, 2018, $48.80 per share for DSUs granted on November 2, 2018, and $55.60 per share for DSUs granted on February 1, 2019, representing the closing price of a share of stock on the quarterly payment date). Such DSUs are fully vested on grant.

 

The fiscal 2015following table sets forth the grant date fair value for the portion of the annual retainer fees, including committee chair retainer fees, paidabove stock awards granted to our directors in shares of Common Stock or deferred by the director, is shown in the following table:fiscal year 2018:

 

    Grant Date
   Deferred Fair Value
NameShares (#) Stock Units (#) ($) Stock Fees
(including
DSUs)
($)		 RSUs
($)		 Dividend
Equivalents
($)		 Total
($)
M. Clark970  —  65,000  69,972 70,022 — 139,994
N. DiPaolo1,113 — 74,582 
A. Feldman1,156 — 77,464  82,450 70,022 38,359 190,831
J. Gilbert, Jr.970 — 65,000  29,115 — — 29,115
G. Marmol1,156 — 77,464  82,450 70,022 — 152,472
M. McKenna2,163 — 144,943  77,448 70,022 — 147,470
S. Oakland— 1,455 97,500  77,448 70,022 2,146 149,616
U. Payne, Jr. 69,972 70,022 — 139,994
C. Turpin970 — 65,000  69,972 70,022 61,462 201,456
K. Underhill 69,972 70,022 — 139,994
D. Young— 1,082 72,500  106,000 70,022 87,178 263,200

 

Stock portion of retainer fee.We made the annual stock payment to each director on July 1, 2015. Under the terms of the Stock Incentive Plan, the stock payment was valued at the closing price of a share of Common Stock on June 30, 2015, which was $67.01. The 2015 grant date fair value is equal to the number of shares received or deferred by the director multiplied by $67.01, calculated in accordance with stock-based compensation accounting rules (ASC Topic 718). Two directors, who deferred the stock portion of their annual retainer, were credited with deferred stock units on the annual payment date valued at $67.01 per unit.

Cash portion of retainer fee.For fiscal 2015, one director deferred part of the cash portion of her annual retainer fee and was credited during the fiscal year with deferred stock units on the quarterly cash retainer payment dates, valued at the fair market value on the payment dates, as follows: January 2, 2015 ($56.04; pro rated for 2 months of 2015 fiscal year), April 1, 2015 ($62.52), July 1, 2015 ($67.97), October 1, 2015 ($71.15), and January 4, 2016 ($65.31; pro rated for one month of 2015 fiscal year). The 2015 grant date fair value is equal to the number of deferred stock units received multiplied by the fair market value on the payment dates, calculated in accordance with stock-based compensation accounting rules (ASC Topic 718).

Dividend equivalents

The fiscal 2015 grant date fair value for dividend equivalents credited in the form of additional stock units to four directors during the year on the quarterly dividend payment dates, valued at the fair market value of the Common Stock on the dividend payment dates, is shown in the following table:

  05/01/15 07/31/15 10/30/15 01/29/16
  FMV: $60.28 FMV: $70.55 FMV: $67.75 FMV: $67.56
Name (#) (#) (#) (#)
A. Feldman 107  92  96  97 
S. Oakland —  5  5  5 
C. Turpin 172  148  154  155 
D. Young 221  193  202  204 

22  |  2016 Proxy Statement

Board of Directors

The total number of Deferred Stock Units credited to directors’ accounts for fiscal 2015, including the dividend equivalents and the units credited representing 2015 retainer fees reported in the above two tables, and the total number of units held at the end of fiscal 2015, is shown in the following table:

  Total Deferred Stock Units 
  Credited for Held at
Name 2015 (#) 1/30/16 (#)
A. Feldman 393  26,291 
S. Oakland 1,471  1,471 
C. Turpin 629  42,125 
D. Young 1,902  55,252 

Restricted Stock Units

The fiscal 2015 grant date fair value for the RSUs granted to the non-employee directors in 2015 is shown in the table below. The number of RSUs granted was calculated by dividing $65,000 by $63.49, which was the closing price of a share of Common Stock on the date of grant. The RSUs will vest in May 2016. The amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For additional information on the valuation assumptions, please refer to Note 2221 to the Company’s financial statements in our 20152018 Annual Report on Form 10-K. The following table shows the aggregate number

30

Foot Locker, Inc.

Board of RSUs granted in 2015 andDirectors

As of end of fiscal year 2018, the number of RSUs outstanding at the end of the 2015 fiscal year:and DSUs held by our directors was as follows:

 

   Grant Date RSUs
   Fair Value Outstanding on
Name RSUs Granted (#) ($) 1/30/2016 (#) RSUs Outstanding
on 02/02/19
(#)		 DSUs Outstanding
on 02/02/19
(#)
M. Clark 1,024 65,014  1,024  1,555 —
N. DiPaolo 1,024 65,014 1,024 
A. Feldman 1,024 65,014 1,024  1,555 28,279
J. Gilbert, Jr. 1,024 65,014 1,024 
G. Marmol 1,024 65,014 1,024  1,555 —
M. McKenna 1,024 65,014 1,024  1,555 —
S. Oakland 1,024 65,014 1,024  1,555 1,582
U. Payne, Jr. 1,555 —
C. Turpin 1,024 65,014 1,024  1,555 45,310
K. Underhill 1,555 —
D. Young 1,024 65,014 1,024  1,555 64,779

 

2016 Proxy Statement  |  23(2)Jarobin Gilbert, Jr. served as a director of the Company during 2018 until his retirement from the Board in May 2018.

Board of Directors

(2)No stock options were granted to the non-employee directors in 2015. The following table provides information on the number of stock options outstanding for each of the non-employee directors, if applicable, at the end of the 2015 fiscal year, all of which were exercisable:

Stock
Options Outstanding
Nameon 1/30/2016 (#)
N. DiPaolo2,208
A. Feldman2,208
J. Gilbert, Jr.2,208
M. McKenna4,287
C. Turpin2,208
D. Young2,208
(3)Stock payment deferred in the form of stock unitsReflects payments under the Stock IncentiveDirector Retirement Plan.

 

Directors’ Retirement Plan

The Directors’ Retirement Plan was frozen as of December 31, 1995. Consequently, only Jarobin Gilbert, Jr. is entitled to receive a benefit under this plan after he completes his service as a director because he completed at least five years of service as a director prior to December 31, 1995. The retirement benefit under this plan is $24,000 per year, payable quarterly for the lesser of 10 years after the director leaves the Board or until his death.

Directors and Officers Indemnification and Insurance

We have purchased directors and officers liability and corporation reimbursement insurance from a group of insurers comprising ACE American Insurance Co. (Chubb), Zurich American Insurance Co., ArchNorth American Specialty Insurance Co. (SwissRe), St. Paul Mercury Insurance Co.Company (Travelers), Freedom Specialty Insurance Co. (Nationwide), Berkley Insurance Co., NavigatorsArgonaut Insurance Co., Aspen AmericanBeazley Insurance Co.Company, Inc., XL InsuranceCatlin Bermuda Ltd., Illinois National Insurance Co.Union (AIG), and Endurance American Insurance Co. These policies insure the Company and all of the Company’sits wholly-owned subsidiaries. They also insure all of the directors and officers of the Company and the covered subsidiaries. The policies were written for a term of 12 months, from October 12, 20152018 until October 12, 2016.2019. The total annual premium for these policies, including fees and taxes, is $932,121.$914,448. Directors and officers of the Company, as well as all other employees with fiduciary responsibilities under the Employee Retirement Income Security Act of 1974, as amended, are insured under policies issued by a group of insurers comprising ArchZurich American Insurance Co., St. Paul Mercury Insurance Co., Federal Insurance Co.,Travelers Casualty, Surety Company of America, and ACE American Insurance Co. (Chubb), which have a total premium, including fees and taxes, of $380,945$330,250 for the 12-month period ending October 12, 2016.2019.

 

The Company has entered into indemnification agreements with its directors and officers, as approved by shareholders at the 1987 Annual Meeting.

 

24  |  2016 Proxy Statement

Beneficial Ownership of the Company’s Stock

Directors and Executive Officers

The table below shows the number of shares of Common Stock reported to us as beneficially owned by each of our directors and named executive officers as of March 21, 2016. The table also shows beneficial ownership by all directors, named executive officers, and executive officers as a group as of that date, including shares of Common Stock that they have a right to acquire within 60 days after March 21, 2016 by the exercise of stock options.

Ken C. Hicks, the Company’s retired Executive Chairman, beneficially owned 1% of the total number of outstanding shares of Common Stock as of March 21, 2016. No other director, named executive officer, or executive officer beneficially owned 1% or more of the total number of outstanding shares as of March 21, 2016. Each person has sole voting and investment power for the number of shares shown unless otherwise noted.

 Common Stock Stock Options      
 Beneficially Owned Exercisable Within RSUs and   
 Excluding 60 Days After Deferred   
 Stock Options 3/21/2016 Stock Units Total
Name(#) (a) (#) (#) (b) (#)
Jeffrey L. Berk28,539  144,666  6,892  180,097 
Maxine Clark6,067  —  1,024  7,091 
Nicholas DiPaolo72,394(c) 2,208  1,024  75,626 
Alan D. Feldman55,488  2,208  27,315  85,011 
Jarobin Gilbert, Jr.16,668  2,208  1,024  19,900 
Ken C. Hicks565,805  800,000  36,207  1,402,012 
Richard A. Johnson278,527  443,299  17,190  739,016 
Guillermo G. Marmol24,900  —  1,024  25,924 
Robert W. McHugh136,319  199,332  9,240  344,891 
Matthew M. McKenna58,844  4,287  1,024  64,155 
Steven Oakland2,060  —  2,495  4,555 
Lauren B. Peters117,114  229,332  7,759  354,205 
Cheryl Nido Turpin48,650  2,208  43,149  94,007 
Pawan Verma20,490  —  —  20,490 
Dona D. Young37,169  2,208  56,276  95,653 
All 21 directors and executive officers as a group, including the named executive officers1,667,579  2,060,086  240,543  3,968,208(d)

2016 Proxy Statement  |  25

Beneficial Ownership of the Company’s Stock

Notes to Beneficial Ownership Table

(a)This column includes shares held in the Company’s 401(k) Plan and, where applicable, executives’ unvested shares of restricted stock as listed below over which they have sole voting power but no investment power:

 2019 Proxy Statement    Unvested Shares
Nameof Restricted Stock (#)
R. Johnson78,520
L. Peters20,000
R. McHugh20,000
J. Berk—
P. Verma20,490
(b)This column includes (i) the number of deferred stock units credited as of March 21, 2016 to the directors’ accounts who elected to defer all or part of their annual retainer fee, and (ii) time-vested RSUs. The deferred stock units and RSUs do not have current voting or investment power.
(c)Includes 1,050 shares held by his spouse.
(d)This number represents approximately 2.9% of the shares of Common Stock outstanding at the close of business on March 21, 2016.

31

 

Persons Owning More Than Five-Percent of the Company’s Common Stock

The table below provides information on shareholders who beneficially own more than 5% of our Common Stock as of December 31, 2015 according to reports filed with the SEC. To the best of our knowledge, there are no other shareholders who beneficially own more than 5% of a class of the Company’s voting securities.

 

Amount and Nature ofPercent of
Name and Address of Beneficial OwnerBeneficial Ownership (#)Class
BlackRock, Inc.10,659,943(a)7.8%(a)
55 East 52nd Street
New York, New York 10055
The Vanguard Group, Inc.10,538,271(b)7.67%(b)
100 Vanguard Boulevard
Malvern, Pennsylvania 19355
FMR LLC7,391,515(c)5.384%(c)
245 Summer Street
Boston, Massachusetts 02210

26  |2016 Proxy Statement

Beneficial Ownership of the Company’s Stock

Notes to Table on Persons Owning More than Five-Percent of the Company’s Common Stock

(a)Reflects shares beneficially owned as of December 31, 2015 according to Amendment No. 6 to Schedule 13G filed with the SEC. As reported in this schedule, BlackRock, Inc., a parent holding company, holds sole voting power with respect to 9,709,431 shares and sole dispositive power with respect to 10,659,943 shares.
(b)Reflects shares beneficially owned as of December 31, 2015 according to Amendment No. 4 to Schedule 13G filed with the SEC. As reported in this schedule, The Vanguard Group, an investment adviser, holds sole voting power with respect to 134,406 shares, sole dispositive power with respect to 10,391,565 shares, and shared dispositive power with respect to 146,706 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 92,606 shares as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 95,900 shares as a result of its serving as investment manager of Australian investment offerings.
(c)Reflects shares beneficially owned as of December 31, 2015 according to Schedule 13G filed with the SEC. Each of FIAM LLC (formerly known as Pyramis Global Advisors, LLC), Fidelity Institutional Asset Management Trust Company (formerly known as Pyramis Global Advisors Trust Company), FMR Co., Inc, and Strategic Advisers, Inc. beneficially owns shares, with FMR Co., Inc. beneficially owning 5% or more of the shares outstanding. Abigail P. Johnson is a Director, the Vice Chairman, the Chief Executive Officer and the President of FMR LLC. Neither FMR LLC nor Ms. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company (“FMR Co”), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. FMR Co carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees.

 

Section 16(a) Beneficial Ownership Reporting Compliance(GRAPHIC) 

Section 16(a)

The Board is asking our shareholders to approve, on a non-binding, advisory basis, the compensation of our NEOs, as described in this Proxy Statement on pages 33 through 67. We currently hold our “Say-on-Pay” vote every year. Shareholders have an opportunity to cast an advisory vote on the frequency of Say-on-Pay votes at least every six years. The next advisory vote on the frequency of the Exchange Act requires that our directors, executive officers, and persons who own more than 10% ofSay-on-Pay vote is expected to occur at the Company’s Common Stock file reports of ownership and changes in ownership of Foot Locker’s Common Stock with the SEC. Based solely on our review of copies of such forms furnished to the Company and written representations that no other reports were required during the 2015 fiscal year, we believe that during the 2015 fiscal year, the persons subject to Section 16(a) reporting complied with all applicable SEC filing requirements, except that one Form 4 to report an open market sale of 2,987 shares by Peter D. Brown, a retired officer, from his 401(k) Plan account and one Form 4 to report a sale of 11,953 shares by Robert W. McHugh under a Rule 10b5-1 trading plan were inadvertently filed late due to administrative errors.

2016 Proxy Statement  |  27

Executive Compensation2022 Annual Meeting.

 

Compensation and Risk

The Company has completed a risk-related review and assessment of our compensation program and considered whether our executive compensation is reasonably likely to resultAs described in a material adverse effect ondetail under the Company. As part of this review, the independent compensation consultant to the Compensation Committee reviewed risk in relation to the Company’s compensation policies and practices with the Company’s human resources executives directly involved in compensation matters. The consultant reviewed the compensation policies and practices in effect for corporate and division employees through the manager level, store managers, and store associates and reviewed the features we have built into the compensation programs to discourage excessive risk taking by employees, including a balance between different elements of compensation, differing time periods for different elements, consistent Company-wide programs, plan performance targets based on the corporate budgeting process, and stock ownership guidelines for senior management.

Compensation Discussion and Analysis

This CD&A focusesbeginning on howpage 33, our named executive officers were compensated for 2015 and how their 2015 compensation aligns with our pay for performance philosophy. We also discuss actions taken in 2015, as well as certain changes to the program effective beginning in 2016, that relate to an understanding of the executives’ compensation. Our CD&A is divided into the following five sections:Executive Summary,Our Compensation Program Design and Structure,Compensation Program Changes for 2016,Procedures for Determining Compensation, andAdditional Information.

We have six named executive officers included in this CD&A and the related compensation tables. Our named executive officers include Ken C. Hicks, our retired Executive Chairman, who retired from the Company in May 2015.

Richard A. JohnsonPresident and Chief Executive Officer
Lauren B. PetersExecutive Vice President and Chief Financial Officer
Robert W. McHughExecutive Vice President—Operations Support
Jeffrey L. BerkSenior Vice President—Real Estate
Pawan VermaSenior Vice President and Chief Information Officer
Ken C. HicksRetired Executive Chairman

Executive Summary

Our executive compensation program is designed to attract, motivate and retain talented executives in order to achieve the Company’s short- and long-termresponsible for leading our strategic priorities and, in turn, deliver value to our shareholders. To accomplish this, we have aOur executive compensation program for our executives that ties pay closely to performance. A significant portion of the compensation provided to the NEOs is based upon the Company’s performance or the performance of our business strategyshare price, and Company performance.we believe this compensation structure closely aligns the interests of our NEOs with the interests of our shareholders. The more senior an executive’s position, the greater the portion of his or her compensation that is tied to performance.

At the 2018 Annual Meeting, almost 95% of the votes cast on the advisory vote to approve the compensation of our NEOs were voted in favor of the proposal. The Compensation Committee whichbelieves this affirms our shareholders’ support for the Company’s approach to executive compensation. We believe you should read the CD&A and the compensation tables beginning on page 33 in determining whether to approve this proposal.

The Board recommends approval of the following resolution:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of our NEOs, as disclosed in the Company’s Proxy Statement for the 2019 Annual Meeting pursuant to the SEC’s compensation disclosure rules, including the CD&A, the 2018 Summary Compensation Table, and the other related tables and disclosures.”

✔The Board recommends a voteFORProposal 2.

32

Foot Locker, Inc.

 

Compensation Discussion and Analysis

This Compensation Discussion and Analysis, or CD&A, describes our compensation philosophy and objectives and provides context for compensation decisions for our NEOs, and discusses how our 2018 compensation is linked to performance against the goals that were established for the annual and long-term incentive compensation programs. For 2018, our NEOs were as follows:

    
Richard A. JohnsonLauren B. PetersStephen D. “Jake” JacobsLewis P. Kimble*Pawan Verma
Chairman, President and Chief Executive OfficerExecutive Vice President and Chief Financial OfficerExecutive Vice President and Chief Executive Officer— North AmericaExecutive Vice President and Chief Executive Officer— Asia PacificExecutive Vice President and Chief Information and Customer Connectivity Officer

*Mr. Kimble served as Executive Vice President and Chief Executive Officer-International during 2018. He has been Executive Vice President and Chief Executive Officer-Asia Pacific since March 11, 2019.

Table of Contents

34Executive Summary
34Our Key Compensation Governance Policies
35Performance Highlights
35Impact of Company Performance on Annual and Long-Term Incentive Pay
36Say-on-Pay Shareholder Vote
362018 Compensation Design Changes
372018 Compensation Decisions
38Compensation Program Design and Structure
38Components of Executive Compensation Program
38Base Salaries
38Annual Bonus Plan
40AFG Award
41Long-Term Incentive Program
43Retirement Plan and Excess Cash Balance Plan
43401(k) Plan
43Supplemental Executive Retirement Plan
44International Assignment Compensation
44Perquisites
44Executive Employment Agreements
45Procedures for Determining Compensation
45Setting Compensation, Establishing Goals, and Evaluating Performance
45Benchmarking Approach
47Use of Compensation Consultants
47Management Involvement in Developing the Compensation Program
47Additional Information
47Key Compensation Governance Policies
48Compensation Plans and Risk
49Delegation of Authority
49Items Disregarded for Bonus Calculations
49Accounting and Tax Considerations of Executive Compensation

2019 Proxy Statement    

33


Executive Compensation

Executive Summary

Our Compensation Committee, comprised of five independent directors, oversees the executive compensation program.

28  |2016 Proxy Statement

Executive Compensation We design our executive compensation program to attract, motivate, and retain talented executives responsible for leading the Company’s short- and long-term strategic priorities and, in turn, deliver value to our shareholders. The centerpiece of our program is our pay-for-performance philosophy that aligns pay outcomes to the achievement of our annual operating plan and long-term strategy, and the creation of shareholder value. This is especially true at senior levels of the Company where a significant portion of compensation is tied to Company performance. As shown in the charts below, 92% of the CEO’s target compensation mix and 80%, on average, of the other NEOs’ target compensation mix for the compensation program represented performance-based compensation for 2018.

 

CEO’s 2018 Target Compensation Mix

 

Average of Other NEOs’ 2018 Target Compensation Mix

 



Our Key Compensation Governance Policies

 

What We Do

What We Do✔What We Do Not Do

  Closely align executive pay with performance and Company’s strategy

  
✔Set rigorous, objective performance goals

  
✔Maintain a clawback policy

  
✔Impose and monitor meaningful stock ownership guidelines

  
✔Require a one-year time-based vesting period for earned LTIPlong-term incentive plan (“LTIP”) payouts following attainment of performance goals

  
✔Include double-trigger change-in-controlchange in control provisions in employment agreements and equity awards

  
✔Mitigate undue risk in compensation programs

  
✔Provide reasonable perquisites

  
✔Retain independent compensation consultant to advise the Compensation Committee

  
✔Hold annual “Say-on-Pay” advisory vote

✔Conduct shareholder outreach
 

 

What We Do Not Do

  
✖No tax gross-ups for perquisites or change in control payments

  
✖No hedging of the Company’s sharesstock

  
✖No repricing of stock options without shareholder approval

  No dividends or dividend equivalents on time-vested or unearned performance RSUs

  
✖No stock options granted below fair market value

2015 Performance Highlights

Our 2015 fiscal year was an outstanding year for Foot Locker. It was the fifth consecutive year that the Company’s sales and profit results represented the highest levels ever achieved in our history as an athletic footwear and apparel business. Our strong 2015 fiscal year results included:

•✖Net income,No dividends or dividend equivalents on a non-GAAP* basis, of $606 million;time-based RSUs or unearned PBRSUs

✖No excessive severance benefits
   
 •Earnings of $4.29 per share, on a non-GAAP* basis, a 20% increase over 2014 and the sixth consecutive year with a double-digit annual increase;
   
 •An end-of-year market capitalization of $9.3 billion, a 24% increase over year-end 2014;
   
 •Returning $558 million to our shareholders through dividend payments of $139 million and share repurchases of $419 million; and
  
•Total Shareholder Return (stock price appreciation plus reinvested dividends) of 28.9% compared to (12.5)% for the S&P 400 Retailing Index.


 

34

    Foot Locker, Inc.

Executive Compensation

Performance Highlights

We built positive momentum and improved our financial results in 2018. Highlights include the following:

 

*A reconciliation to GAAP is provided beginning on Pagespage 16 through 17 of our 20152018 Annual Report on Form 10-K.

 

In 2015, the Company introduced a revised long-term strategic framework, which is depicted below. This framework established priorities over the near-term, intermediate-term, and long-term to enhance our performance and set even more challenging long-term financial objectives.

2016 Proxy Statement  |  29

Executive Compensation

Strategic FrameworkPriorities

•  Drive performance in theCore Businesswith compelling customer engagement

•  Expand our leading position in theKids’business

•  Aggressively pursueEuropean Expansionopportunities

•  Build ourApparelpenetration and profitability

•  Build a more powerfulDigitalbusiness with customer-focused channel connectivity

•  Deliver exceptional growth in ourWomen’sbusiness

•  Build on our industry-leading team by embracing the power of ourPeople

Results

In the first year of working towards our current long-term objectives under our new strategic plan, we already achieved one of the objectives, and made significant progress on the others, as shown in the chart below:

     2015-20
     Long-Term
Financial Metrics 2009 2014 2015 Objectives
Sales (billions) $4.9  $7.2  $7.4  $10 
Sales Per Gross Square Foot $333  $490  $504  $600 
Adjusted Earnings Before Interest and Taxes (EBIT) Margin 2.8% 11.4% 12.8% 12.5%
Adjusted Net Income Margin 1.8% 7.3% 8.2% 8.5%
Return on Invested Capital (ROIC) 5.3% 15.0% 15.8% 17%

The chart above reflects non-GAAP results. There is a reconciliation to GAAP on Pages 16 through 17 of our 2015 Annual Report on Form 10-K.

Impact of Company Performance on Annual and Long-Term Incentive Pay

Foot Locker strives to be a consistently high-performing company, with a history of setting very challenging performance goals.Only when we achieve or exceed our goals are incentive payouts earned.

Our most-recently completed performance periods illustrate our commitment to pay for performance. Overall, our 2018 fiscal year was very strong, and we were highly profitable; however, we fell short of our plan in certain areas of the business. As a result, Mr. Johnson, Ms. Peters, and Mr. Verma earned annual incentive payouts of our very strong performance in 2015, above-target84.5% of their respective target awards were earned under both of our performance-based programs—the for 2018.

Annual Bonus Plan and the long-term incentive plan (“LTIP”), as discussed further in this CD&A.for Corporate Executives

 

Please see Pages 34

Performance MetricTargetPayout

Financial Performance Metric

(in millions) 

Adjusted Pre-Tax Income 

(weighted 80%)


$766.8

Profit Payout

87.6%

Customer Connected Scorecard

Know Our Customers/ 

Satisfy Our Customers 

(weighted 20%)

Customer 

Connected Payout

72.1%

Total Annual Bonus Payout

(Corporate Executives)

84.5%

2019 Proxy Statement    

35

Executive Compensation

As division executives, Mr. Jacobs’s and Mr. Kimble’s annual incentive awards were based on their respective division’s omni-channel profit (weighted 80%) and customer connected scorecard (weighted 20%). Mr. Jacobs earned an annual incentive payout of 157.2% of his target award. Mr. Kimble did not earn a payout for 2018.

LTIP

For the two-year 2017-18 performance period under the LTIP, no payouts were earned by any of the NEOs because our performance over this two-year period did not meet the rigorous goals we established for the period.

Performance MetricsTargetPayout

Average Annual Adjusted Net Income

(in millions)


$727.2

0% of

Target Award

Two-Year Average ROIC
15.5%

See pages 38 through 37 and the Summary Compensation Table on Page 4542 for more details on these incentive programs and the named executive officers’ earned awards under the plans.

30  |2016 Proxy Statement

Executive Compensationperformance goals.

 

2015 Say-on-Pay Shareholder Vote

 

At our 20152018 Annual Meeting, 96%almost 95% of shareholders voting on the advisory vote on executive compensation supported the executive compensation program. The Compensation Committee considered the results of the 20152018 Say-on-Pay vote and our shareholders’ strong support of our executive compensation program in reviewing the executive compensation program for 2016.2019. In light of this support, the Compensation Committee decided to retain the general program design, which ties executive pay closely withbut added new customer connected objectives to the annual incentive plan, reflecting the Company’s customer-centric priorities, and granted a new long-term incentive intended to accelerate growth and better enable the Company performance.to compete in a rapidly changing retail landscape. In the future, the Compensation Committee will continue to considerassess the executive compensation program in light ofagainst changing circumstancesbusiness conditions and shareholder feedback. Our Say-on-Pay vote is currently held on an annual basis, consistent with the viewspreference expressed by a majority of our shareholders.


 

20152018 Compensation Design Changes

During the Compensation Committee’s 2018 compensation planning cycle, the Committee considered the Company’sstrategic initiatives and long-term goals, recognizing the significant disruption that was occurring in the retail industry, and discussed the actions and results that were critical to incentivize through the executive compensation program. As a result, the 2018 incentive compensation design represents a portfolio approach that is intended to motivate the right behaviors and reward achievement of our short- and long-term business results. In addition to providing incentives through the core annual cash incentive plan and LTIP, the Committee determined that an additional long-term incentive award distinctly focused on accelerating the Company’s growth, both organic and inorganic, in this disruptive environment was appropriate and in the best interests of the Company and our shareholders.

Our executive compensation program uses distinct metrics and varying time periods, which the Committee believes provide the appropriate incentives while also managing risk. The changes to the short- and long-term incentives for the NEOs, which are described below, are designed to incentivize the execution of the Company’s customer connected strategy, to accelerate our long-term growth, and to further align our executives’ and shareholders’ interests.

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Foot Locker, Inc.

Executive Compensation

Annual
Cash Incentive		●Incorporated strategic metrics in addition to financial metrics into the core design of the annual incentive plan. Knowing and focusing on the customers of each of our brands increases the opportunity to provide the products and experiences they desire and increases the opportunity to satisfy our customers. Given the Company’s customer-centric culture, the Committee added “customer connected” objectives and enablers composed of additional project milestones that support these objectives to the financial metrics in the annual cash incentive program. The customer connected objectives are weighted at 20%. The remaining 80% of the annual incentive is based on pre-tax income (for corporate executives) or division omni-channel profit (for division executives).
●Modified the maximum for the annual incentive performance range from 120% to 110%, which is consistent with our peers.
Long-Term
Equity Incentives		●Rebalanced the annual equity awards for executives by splitting the total value of the award between stock options and time-based RSUs, rather than granting the full value of the award in stock options, in order to increase the retentive aspect of the awards.
●Eliminated the cash portion of the payout for earned awards under the LTIP beginning with the 2018-19 performance period and paying the entire earned award in equity for all NEOs to further align our executives’ and shareholders’ interests.
●Provided an additional long-term incentive opportunity through the Accelerate Future Growth (“AFG”) award specifically focused on accelerating the Company’s growth, expanding our direct-to-customer business, and maintaining the profitability of our “brick and mortar” stores over a three-year period (2018-20). The AFG award is 100% performance-based for the CEO and 75% performance-based for the other NEOs and is payable in RSUs.

2018 Compensation Decisions

The Compensation Committee made certain compensation decisions for our named executive officersNEOs in 2015,2018, including setting and approving incentive compensation performance goals, which are described below. We had certain leadership changes during 2015 that impacted our named executive officers: Ken C. Hicks retired as Executive Chairmangoals. In making its decisions, the Committee considered (i) the significant disruption occurring in May 2015, and we hired Pawan Verma as our new Senior Vice President and Chief Information Officer in August 2015.

Base Salaries

As part of its annual review of compensation, the Compensation Committee approved base salary increases for Mr. Johnson and Ms. Peters as of May 1, 2015 of 5% and 7.1%, respectively, based onretail industry, (ii) each executive’s performance and a position-oriented analysis of market salaries. Based on the salary ranges for their positions, Mr. McHugh and Mr. Berk did not receive salary increases. Due to Mr. Hicks’ planned retirementcompensation components in May 2015, he did not receive a salary increase.

Mr. Verma joined the Company in August 2015, and his base salary was established at that time based upon the salary range for his position and his prior experience and compensation level.

Annual Bonus Plan

At the beginning of 2015, the Compensation Committee established a performance target under the Annual Bonus Plan based on the Company achieving pre-tax income of $866.5 million, a 6.8% increase over 2014 non-GAAP pre-tax income, in line with the Company’s financial plan and strategic objectives. Based on adjusted pre-tax income of $941.8 million, each of our named executive officers earned a bonus of 132.6% of their respective target awards under the Annual Bonus Plan for 2015.

Mr. Hicks’ annual bonus was prorated, reflecting his retirement in May 2015. While Mr. Verma joined the Company in August 2015, under the terms of his employment, he received an annual bonus based on the full 2015 plan year. Please see Pages 34 through 35 and the Summary Compensation Table on Page 45 for more details on the Annual Bonus Plan and the named executive officers’ earned payouts.

Long-Term Incentive Program

Our long-term incentive program includes (i) the performance-based LTIP delivered in cash under this plan and equity under the Stock Incentive Plan, and (ii) long-term equity awards under the Stock Incentive Plan in the form of stock options, time-based restricted stock and RSUs. Performance-based LTIP awards and stock options are granted annually, while time-vested restricted stock and RSU awards are granted in special circumstances, such as for new hires, promotions, or retention purposes.

LTIP.At the beginning of 2014, the Compensation Committee established performance targets for the 2014-15 performance period under the LTIP. The targets that the Compensation Committee established were based on the Company achieving average annual net income of $495.2 million (which accounts for 70% of the payout) and ROIC of 14.4% (which accounts for 30% of the payout). Based on actual results for the performance period, each of our named executive officers earned a

2016 Proxy Statement  |  31

Executive Compensation

payout of 162.9%light of his or her respective target award. The amounts earned for this two-year performance period will not be paid to participants until 2017, following the completion of a one-year time-based vesting period. Mr. Verma received a prorated award under the LTIP for the 2014-15 performance period. Please see Pages 35 through 37 and the Summary Compensation Table on Page 45 for more details on the LTIP and the named executive officers’ earned payouts.

In 2015, the Compensation Committee established LTIP performance targets for the 2015-16 performance period based on net income (70%) and ROIC (30%). Since this performance period is still on-going, the Committee will determine whether payouts have been earned following the end of the Company’s 2016 fiscal year. If awards are earned for the 2015-16 performance period, payment will be made to participating executives in 2018, following the completion of a one-year time-based vesting period.

Stock Options.The Compensation Committee granted stock options to each of the named executive officers, other than Mr. Hicks and Mr. Verma, as part of its normal annual compensation review in 2015. In deciding to grant the stock options and determining the number of shares, the Compensation Committee considered each executive’s position and the competitiveresponsibilities, (iii) internal peer pay comparisons, (iv) relevant market data for equivalent talent. These awards are showncomparable positions and, where applicable, year-over-year changes in the chart below. All of the stock options have a three-year vesting schedule, with one-third of each option grant vesting on the first, second,market data, and third anniversary of the grant date, subject to continuous service through each vesting date. The values shown for the stock option grants are based on a Black-Scholes value of $16.01 on the date of grant.

    Stock Options 
  Stock Options Black-Scholes Value 
Named Executive Officer (#) ($) 
R. Johnson 207,900  3,328,479  
L. Peters 32,000  512,320  
R. McHugh 32,000  512,320  
J. Berk 16,000  256,160  

Time-Vested Restricted Stock(v) retention and RSU Awards.Other than with regard to Mr. Verma, as described below, no awards of time-vested restricted stock or RSUs were granted to the named executive officers in 2015.

New Chief Information Officer

We hired Pawan Verma as Senior Vice President and Chief Information Officer, replacing the former Senior Vice President and Chief Information Officer who retired during 2015. Mr. Verma was recruited from outside the Company and, in connection with his employment, the Compensation Committee approved a compensation package that reflects the competition for talent in information technology, security, and strategy, particularly in retail companies. When Mr. Verma joined us in August 2015, the Compensation Committee set his annual base salary at $450,000. As additional sign-on compensation to compensate him for what he forfeited when he terminated his employment with his prior employer, Mr. Verma (1) received a cash sign-on bonus of $300,000 when he commenced employment, (2) was granted equity awards in the form of stock options and restricted stock having a value on the date of grant of $225,105 and $1.5 million, respectively, and (3) was eligible to receive an annual bonus at target of 50% of base salary for the full 2015 fiscal year. The sign-on stock option and restricted stock awards each have a three-year vesting schedule, with one-third of each award vesting on the first, second, and third anniversary of the grant date, subject to continuous service through each vesting date.

    Stock Options Restricted Restricted 
  Stock Options Black-Scholes Value Stock Stock Value 
Named Executive Officer (#) ($) (#) ($) 
P. Verma 11,346 225,105 20,490 1,500,073 

32  |2016 Proxy Statement 

Executive Compensationsuccession planning.

 

Our Compensation Program Design and Structure

Pay Components and Mix

The key concepts underlying our compensation program are alignment with our business strategy, alignment with shareholders interests, strong relationship to Company performance, and balance among compensation elements. Consistent with these key compensation concepts, a significant portion of compensation for our executives is performance-based. For 2015, of the total direct compensation delivered to our CEO and other named executive officers, 87% of the CEO’s compensation and 73% on average of the other named executive officers’ compensation (excluding the retired Executive Chairman) were performance based. The variability in performance-based compensation directly ties the executives’ pay to our performance, including our financial results, strategic priorities and stock price performance. The payment of a base salary provides a balance between fixed, cash compensation and compensation at risk through Company performance.

CEO Average of Other Named Executive Officers’
2015 Total Direct Compensation*Base Salaries●2015 Total Direct Compensation*No base salary increases were approved for the NEOs for 2018 given the Committee’s desire to provide accountability for the Company’s below-threshold performance in 2017.
   
Performance-Based Compensation=85% Performance-Based Compensation=66%
  (Excludes Retired Executive Chairman)CEO Annual
Incentive Award		●The Committee increased the target annual incentive award for Mr. Johnson to 200% of his annual base salary, from 150% in the prior year, which positions his target total cash compensation slightly above the peer median.
   
  
*Total Direct Compensation includes salary, Annual Bonus,AFG Award●The Committee granted the AFG award to the NEOs that is designed to incentivize efforts to accelerate the Company’s growth, expand our direct-to-customer business, and long-term incentives (“LTI”) (consistingmaintain the profitability of our stores over the three-year performance period.
Long-Term
Equity Incentives		●Beginning with the 2018-19 performance period, earned payouts for all NEOs will be in the form of equity, as the Committee eliminated the cash component of the LTIP stock options, and, where applicable, restricted stock).awards to further align the executives’ interests with shareholders. This decision is consistent with the payout structure the Committee instituted for the CEO beginning with the 2017-18 performance period.

 

Benchmarking Approach

We have established benchmarks for compensation, including cash and equity, for each named executive officer. These benchmarks are reviewed annually and are based upon compensation for comparable positions in a peer group consisting of publicly-traded global retail companies with revenues of approximately one-third to two and one-half times the Company’s revenue. We also use the peer group data to assess the competitiveness of total direct compensation awarded to our senior executives and as a data point in designing compensation plans, benefits, and perquisites.

The Compensation Committee has determined that the companies comprising our peer group reflect the appropriate peer group for executive compensation purposes based upon the nature of their businesses, their revenues, and the pool from which they recruit their executives. The companies included in our peer group for 2015 compensation decisions were:

Abercrombie & Fitch Co.2019 Proxy Statement    Caleres, Inc.Genesco Inc.
American Eagle Outfitters, Inc.Dick’s Sporting Goods Inc.L Brands, Inc.
Ann Inc.*DSW Inc.Petsmart, Inc.*
Ascena Retail Group, Inc.The Finish Line Inc.RadioShack Corp.*
Autozone, Inc.GameStop Corp.Ross Stores, Inc.
Bed, Bath & Beyond Inc.The Gap Inc.Williams-Sonoma, Inc.

37

 

*Removed from peer group in 2015.

 

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Executive Compensation

 

In May 2015, we made several changes to the peer group. We added one company, specialty retailer Signet Jewelers Limited. We removed Ann Inc.Compensation Program Design and Petsmart, Inc. since they were no longer publicly-traded companies, and RadioShack Corp. due to its market value and business situation in 2015.Structure

 

The goalComponents of theExecutive Compensation Committee is to provide competitive total compensation opportunities for the named executive officers that vary with Company performance. The Compensation Committee uses the peer group benchmark information as a reference point in evaluating executive compensation, assessing the competitiveness of total direct compensation awarded to our senior executives and designing compensation plans, benefits, and perquisites, but it does not attempt to match the compensation of each executive position in the Company precisely with that of an equivalent position in the peer group. In general, the Compensation Committee attempts to position an executive’s total compensation between the median and 75th percentile of comparable positions at peer companies, consistent with the Company’s revenue in relation to the peer companies. The Compensation Committee also considers other factors, including performance, responsibility, experience, tenure, and market positioning, when determining compensation.Program

 

Components of Our Executive Compensation Program

TheAnother goal of the Compensation Committee is to align the compensation program with our business strategy and our shareholders’ interests. In order to achieve these objectives, our executive compensation program includes a mix of annual and long-term compensation, as well as a mix of cash and equity compensation. The key components of our executive compensation program are:are described in the following chart:

 

 •Compensation
Component		Description and Purpose
(GRAPHIC) Base SalaryAnnual fixed compensation supports the objective of attracting and retaining talented executives.
Provides executives with market-competitive fixed compensation appropriate to their position, experience, and responsibilities.
ANNUALPerformance-Based
Annual Cash
Incentive		Links annual cash compensation to attainment of short-term performance goals based on the Company’s pre-tax income, division omni-channel profit, and customer connected objectives.
   
 •Annual BonusLTI ProgramComprises the performance-based LTIP, stock options, and time-based RSUs. These long-term incentives and awards, which are linked to multi-year performance goals and the Company’s stock price, provide an incentive to work towards achievement of long-term strategic objectives. Long-term incentives support executive retention.
LTIPTwo-year performance goals based on net income (70%) and ROIC (30%), with an additional one-year vesting period for earned awards. Earned awards are payable in equity.
LONG-TERMStock OptionsProvide the opportunity to purchase stock at the exercise price over a ten-year period from the grant date, subject to applicable vesting and exercisability conditions.
Link realized compensation over long-term appreciation in stock price and represent value to executives only if the stock price increases.
RSUsTime-based RSUs align executives’ and shareholders’ interests with value that fluctuates based on stock price performance.
AFG AwardAFG award incentivizes accelerated growth over a three-year period (2018-20) to build on our strength and grow our business in a disruptive retail environment. This award is 100% performance based for the CEO and 75% performance based for the other NEOs.
   
 •OTHERLong-Term Incentive ProgramRetirement
Benefits		Provide pension and retirement savings benefits, which align with the objective of attracting and retaining talented executives.
   
Perquisites•RetirementOffer reasonable perquisites similar to our peer companies, which also aid in attracting and Other Benefits
•Perquisitesretaining talented executives.

Base SalarySalaries

Base salaries represent the fixed portion of total direct compensation for our executives. We pay base salaries to provide our named executive officers with market-competitive fixed compensation that is appropriate to their position, experience, and responsibilities. Base salaries aid in attracting and retaining talented executives.

The Compensation Committee annually reviews the named executive officers’ salaries. Annualdid not approve any base salary increases are not automatic. Salary adjustments are made after consideration of pay for similar positions among our peer group, internal pay equity, and scope of responsibilitiesthe NEOs for each position. Base salaries of named executive officers rarely change materially from year-to-year unless there has been a promotion, other change2018, given the Committee’s desire to provide accountability for the Company’s below-threshold performance in responsibility, or other special factors apply.2017.

 

Performance-Based Annual Cash Bonus

We pay performance-based annual cash bonuses to our named executive officers under the Annual Bonus Plan in order to incentivize them to work toward

In 2018, the Compensation Committee considered the Company’s achievementstrategic initiatives relating to customer engagement and creating desired experiences in an environment where customers have many shopping choices. Given this, the Committee incorporated “customer connected” objectives into the annual incentive plan to further incentivize execution of annual performance goals established byour customer-centric initiatives, in addition to the Compensation Committee. Paymentsfinancial metrics that have historically been utilized for this performance-based plan. The financial targets are calculated as a percentage of actual base salary earned byweighted 80%, and the executive during the year.

34  |2016 Proxy Statement

Executive Compensationcustomer connected objectives are weighted 20%.

 

Our Annual Bonus Plan is formula driven, withThe financial targets established by the Compensation Committee under the annual incentive plan are based upon the business plan and budget reviewed and approved each year by our Finance Committee and the Board. Our Annual Bonus Plan allowsThe financial targets applicable to Mr. Johnson, Ms. Peters, and Mr. Verma were based on the Compensation Committee,Company achieving Adjusted Pre-Tax Income of $766.8 million for 2018, in establishingline with the Company’s financial plan and strategic objectives and reflects an increase of 2.2% compared to 2017 results. Actual Adjusted Pre-Tax Income totaled $754.1 million for 2018.

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Foot Locker, Inc.

Executive Compensation

As division executives, the 2018 annual incentive targets for Mr. Jacobs and Mr. Kimble were based on division omni-channel profit targets and customer connected objectives for the North America division and the International division, respectively, which include both store and direct-to-customer operations for these regions.

In 2018, the North America division comprised the store and direct-to-customer operations of

(GRAPHIC) 

In 2018, the International division included the store and direct-to-customer operations of

(GRAPHIC) 

For competitive reasons, we do not disclose the profit targets for the North America or International divisions, as we do not publicly disclose results of these divisions on a separate basis, and we consider it competitively harmful to make that information public. Consistent with our objective of setting challenging goals for executives throughout the Company, we believe that the achievement of the performance targets undergoals for these divisions was demanding in light of there being a zero bonus payout for one of the plan, to choose one or more performance measures from a list of factors that have been approved by shareholders. divisions despite being profitable in 2018.

The Compensation Committee established a performance target under the Annual Bonus Plancustomer connected objectives for the named executive officersNEOs based on:

Knowing our Customers- Increasing the percentage of identified customers through in-store, digital and app touch-points for 2015North America and International, and

Engaging and Servicing Our Customers- Improving overall customer satisfaction favorability percentage measured by results on purchaser surveys compared to the prior year.

Along with these objectives, the Committee established “enablers” for measuring progress based on:

Organizational Enrollment- Focusing all employees throughout the organization on the importance of customer-leading metrics to our go-forward strategy and communicating scorecard progress;

Brand Satisfaction- Establishing a methodology and tracking customer satisfaction both in-store and on-line; and

Digital Enhancements- Implementing the new point-of-sale system in our global store fleet and achieving 2018 milestones in our efforts to enhance our digital capabilities.

The evaluation of full-year customer connected objectives utilizes the Company’s global performance management rating scale, and performance can range from 25% - 200% based on the relative achievement of the metrics and enablers. As described above, payout percentages associated with ratings for the metrics and enablers were averaged and resulted in an overall corporate payout percentage of 72.1%.

The annual incentive plan for the NEOs makes bonus payments based upon the Company’s achievement ofCompany or relevant division’s results, without individual performance adjustments. Executives who receive a prescribed level of pre-tax income.“not meeting performance” rating in their annual performance review are ineligible to receive an annual bonus payment. All bonus targets and calculations are based on the results of continuing operations. The Annual Bonus Plan foroperations through the named executive officers makes bonus payments based uponend of the Company’s results, without individual performance adjustments. Executives who do not receive a “meets expectations” rating or higher in their annual performance review are ineligible to receive an annual bonus payment.2018 fiscal year.

 

The Company achieved adjusted pre-tax incomepayment of $941.8 million in 2015, a 16.2% increase over 2014, which resulted in above-targetperformance-based annual cash bonuses beingis calculated as a percentage of actual base salary earned by eachthe executive during the year. The maximum payout under this plan is 200% of the named executive officers. The Annual Bonus Plan targets, the actual amount of adjusted pre-tax profit achievedtarget, with a maximum payout in any year for 2015, and the corresponding payout percentages were as follows:any participant capped at $6 million.

 

  Threshold Target Maximum Actual 
Pre-tax profit $779.9 million $866.5 million $1,039.9 million $941.8 million 
Payout as Percentage of Target Award 25% 100% 175% 132.6% 

2019 Proxy Statement

39

Executive Compensation

The 2018 annual incentive target awards for the NEOs approved by the Compensation Committee are shown in the table below.

Name 2017 Annual Target Award 2018 Annual Target Award
R. Johnson 150% 200%
L. Peters 75% 75%
S. Jacobs 100% 100%
L. Kimble 75% 75%
P. Verma 75% 75%

 

Bonus payouts are calculated on the basis of straight-line interpolation between the threshold, target, and maximum points. If the Company does not achieve threshold performance, then no annual bonus is earned or paid.

 

  Target as a
Percentage of
Base Salary		 Actual 2018
Payout
Percentage
as a
Percent
of Target		 Actual 2018
Payout ($)
R. Johnson 200% 84.5% 1,859,000
L. Peters 75% 84.5% 427,781
S. Jacobs 100% 157.2% 1,336,200
L. Kimble 75% – —
P. Verma 75% 84.5% 348,562

Target payments under the Annual Bonus Plan

See page 35 for the namedtargets, along with the adjusted actual performance for the period.

AFG Award

(GRAPHIC) The Compensation Committee considered the significant disruption occurring in the retail industry and the strategic work that would be necessary by the executives to accelerate the Company’s long-term growth in this environment. In light of this, the Committee provided an additional long-term incentive award to the NEOs and other senior executives focused on accelerating the strategic growth initiatives, expanding our direct-to-customer business, and maintaining the profitability of our stores. This AFG award is designed to encourage and reward long-term strategic achievements, as well as serve a retentive purpose for executives who are critical to executing the Company’s strategic plan. The AFG award covers a three-year performance period-2018-20-and is based on three equally-weighted metrics: total revenue growth, direct-to-customer revenue growth, and EBIT margin. Prior to granting this new award, the Finance Committee reviewed and approved the 2018-19 financial plan and the forecast for 2020 on which the metrics are based.

In determining to grant this award and the behavior to be incentivized by it, the Committee first considered the existing executive officers,incentive programs, including the annual cash incentive awards which are based on a combination of pre-tax income (or division omni-channel profit) and actual payments for 2015 based uponcustomer-centric objectives, and the Company’s performance, are shownlong-term performance-based equity awards with metrics tied to a combination of average two-year net income and ROIC. Given the desire to accelerate the pace by which the Company drives growth, both organically and inorganically, the Committee believed that it was important to provide additional incentive directly focused on profitable top-line growth, which would complement the other incentive programs during this dynamic period.

40

    Foot Locker, Inc.

Executive Compensation

For Mr. Johnson, 100% of the award is in the chart below. form of PBRSUs, and he would earn a payout following the end of the performance period only if the performance goals are achieved. For each of the other NEOs, 75% of the award is in the form of PBRSUs and 25% is in the form of time-based RSUs, payable following the end of the performance period, subject to the achievement of the performance goals with regard to the PBRSUs.

  Target Value of
Performance-Based
Component ($)		 Target Value of
Time-Based Payout
Component ($)		 Total Target Value ($)
R. Johnson 5,000,000 – 5,000,000
L. Peters 750,000 250,000 1,000,000
S. Jacobs 1,125,000 375,000 1,500,000
L. Kimble 750,000 250,000 1,000,000
P. Verma 562,500 187,500 750,000

The amount shownpercentage of achievement of the performance goals at the end of the performance period will be applied to the target number of PBRSUs granted to each of the executives to determine the actual number of PBRSUs that may be earned. The percentage of the target number of PBRSUs that may be earned at threshold is 25% and at maximum is 200% for Mr. Hickseach executive. If the threshold performance goals are not met, no PBRSUs will be earned or paid out to any executive.

As the AFG performance period is prorated, reflecting his retirement in 2015. Underon-going, we have not disclosed the termsactual targets because we believe it would be competitively harmful to do so. At the end of Mr. Verma’s employment agreement, he received an annual bonus based on the full year 2015. The Company paid Mr. Verma a prorated bonus underperformance period-in 2021-the Committee will determine whether the Annual Bonus Plan, reflecting his plan participation beginning in August 2015 when he commenced employment,performance goals have been achieved, and paid himwe will provide specific disclosure regarding the difference between the prorated bonus amounttargets, performance results relative to those targets, and the annual bonus that he would have received under the planearned payouts, if he had participated in the planany, for the entire year ($155,095) outsidecompleted performance period. For the time-based component of the Annual Bonus Plan. The actual 2015 payout amount shownAFG applicable to the NEOs other than Mr. Johnson, the RSUs will vest in March 2021, subject to continuous employment by the table for Mr. Verma reflects the prorated payment under the Annual Bonus Plan.executives.

 

  Target as a Actual 2015    
  Percentage of Payout Actual 2015 
  Base Salary Percentage Payout ($) 
R. Johnson 125% 165.75% 1,719,656  
L. Peters 65% 86.19% 512,831  
R. McHugh 65% 86.19% 580,059  
J. Berk 50% 66.30% 323,891  
P. Verma 50% 66.30% 143,255  
K. Hicks 125% 165.75% 481,135  

Long-Term Incentive Program

Our long-term incentive program consists ofincludes the (i) performance-based LTIP delivered in cash under this planawards and equity under the Stock Incentive Plan, and (ii)other long-term equity awards granted under the Stock Incentive Plan in the form of stock options, time-based restricted stock, and RSUs. Performance-based LTIP awards, stock options, and time-based RSUs are granted annually. Time-vested restricted stock or time-vested RSUs. We provide long-term incentives and make thesespecial RSU awards to our named executive officersnormally are granted only in order to incentivize them to work toward the Company’s achievement of performance goals established by the Compensation Committee for each performance period. We provide equity-based long-term incentives to our named executive officers in order to provide alignment with shareholder value creation and enhance the retentive value of our compensation program. The long-term incentive program is the responsibility of the Compensation Committee, which is composed entirely of independent directors.

2016 Proxy Statement  |  35

Executive Compensationspecial circumstances, such as promotions, recruitment, or retention.

 

LTIP

The LTIP is designed to reward executives for achieving multi-year performance targets. OurThe LTIP is formula-driven, with targets established by the Compensation Committee based upon financial targets included in the business plan reviewed and approved each year by our Finance Committee and the Board. The LTIP pays out based upon the Company’s results, without individual performance adjustments. Key design features of the LTIP are:

 

Increased Equity ComponentThe payout structure of the LTIP award had been a mix of cash payable under the LTIP, and equity in the form of RSUs payable under the Stock Incentive Plan. Beginning with the 2018-19 performance period, 100% of earned payouts will be made in equity under the Stock Incentive Plan for all of the NEOs.
Two-Year Performance Period
and Additional One-Year
Vesting Period		The performance period is two years; however, while award payouts are calculated following the end of the two-year performance period, payments require continued employment and are subject to forfeiture, as well as stock price fluctuations, for another year—that is, payments are not made until the end of a three-year period.
Net Income and ROIC TargetsThe performance targets are based on adjusted net income (70%) and ROIC (30%) that are contained in the business and financial plan approved by the Finance Committee and the Board for the performance period.
Target Awards are a Percentage of Base SalaryThe target awards are expressed as a percentage of initial base salary—that is, the base salary paid to the executive following any salary adjustments that take place on May 1 of the first year of the performance period, adjusted only for promotion-related salary increases.

Mix of Cash and RSUs.Awards are denominated 50% in cash, payable under the LTIP, and 50% in RSUs, payable under the Stock Incentive Plan. The same performance target is established for both the cash and RSU portions of the award. Beginning with the 2016-17 performance period, the payout mix for these awards will be shifted to 75% RSUs and 25% cash.

 

Two-Year Performance Period and Additional One-Year Vesting Period.The performance period is two years; however, while award payouts are calculated following the end of the two-year performance period, payments require continued employment and are subject to forfeiture, as well as stock price fluctuations, for another year—that is, payments are not made until the end of a three-year period.

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Net Income and ROIC Targets.The performance targets are based on net income (70%) and ROIC (30%) that are contained in the business and financial plan adopted by the Finance Committee and the Board for the performance period.

Target Awards are Percentage of Base Salary.The target awards are expressed as a percentage of initial base salary—that is, the base salary paid to the executive following any salary adjustments that take place on May 1 of the first year of the performance period, adjusted only for promotion-related salary increases. Mr. Johnson has a 175% bonus target as Chief Executive Officer; prior to his promotion to Chief Executive Officer during the 2014-15 performance period, Mr. Johnson’s target payout was 100% of his initial base salary. The target award for the other named executive officers, excluding Mr. Hicks, is established by level of position and is 75% of initial base salary. When Mr. Hicks retired as Chief Executive Officer in December 2014, his bonus target was continued at 175% in his position as Executive Chairman through May 2015.Compensation

 

The target awards for the NEOs are listed in the following table:

NameTarget Award as
a Percentage of
Base Salary
R. Johnson250%
L. Peters100%
S. Jacobs100%
L. Kimble75%
P. Verma75%

Determination of Payout for 2017-18 LTIP Awards.Consistent with our high-performance culture, the Compensation Committee established therigorous net income and ROIC targets in 2014at the beginning of 2017 for the 2014-152017-18 performance period.period and set a “performance floor” for each performance measure. The targets the Compensation Committee established were based on the Company achievedachieving two-year average annual net income of $562.6$727.2 million (which accounts for 70% of the payout) and ROIC of 15.5% (which accounts for 30% of the payout). The Company achieved two-year average annual net income of $541.6 million and ROIC of 15.6%11.9% for this performance period, which resulted in above-target LTIP awards beingwere below the threshold performance floor. As a result, no payouts were earned byfor this performance period. See page 36 for the named executive officers. The LTIP awards are denominated 50% in cash and 50% in RSUs and will be paid out in 2017, following a one-year time-based vesting period. The targets, along with the adjusted actual performance for the period, and the calculation of ROIC are shown in the charts below:period.

 

  Threshold Target Maximum Actual 
Average Annual Net Income (weighted 70%) $431.2 million $495.2 million $594.3 million $562.6 million 
Two-Year Average ROIC (weighted 30%) 12.9% 14.4% 16.7% 15.6% 
Payout as Percentage of Target Award 25% 100% 200% 162.9% 

ForDetermination of Performance Targets for 2018-19 LTIP Awards.In 2018, the 2014-15Compensation Committee established LTIP performance targets for the 2018-19 performance period, LTIPwhich are also based on two-year average annual net income (70%) and ROIC (30%). For competitive reasons, since this performance period is still on-going, we have not disclosed the targets established for the period. The Committee will determine whether payouts were subject to a “performance gate,” which provided that no amounts would be paid out underhave been earned following the plan unlessend of the Company’s average annual after-tax income for2019 fiscal year, and we will provide specific information on the performance period exceededtargets and results after the Company’s after-tax income in the year prior to the commencementcompletion of the performance period. Once thisIf awards are earned for the current 2018-19 performance level is achieved, LTIP payouts are calculated onperiod, payment will be made to participating executives in 2021, following the basiscompletion of straight-line interpolation between the threshold, target, and maximum points. If the Company does not achieve threshold performance, then no LTIP is paid.

36  a one-year time-based vesting period.|2016 Proxy Statement

Executive Compensation

 

ROIC Calculation for LTIP.Return on Invested Capital, or ROIC, is a non-GAAP financial measure. For purposes of calculating this long-term incentive, we define ROIC as follows:

 

ROIC = Operating Profit After Taxes
 Average Invested CapitalPre-tax income

Operating Profit after Taxes (Numerator) = Average Invested Capital (Denominator) =
Pre-tax income+/-Average total assets
+/– interest expense/income –average cash, cash equivalents, and short-term investments
+implied interest portion of operating lease payments –average year-end inventory
+/– -Unusual/non-recurring items –non-interest-bearing current liabilities
+LTIP award expense +13-month average inventory
=Earnings before LTIP award expense, interest and taxes 
-Estimated income tax expense
=Operating Profit After Taxes
ROIC   =
Average Invested Capital
Average total assets
-average cash and cash equivalents
-average year-end inventory
-non-interest-bearing current liabilities
+13-month average inventory
+average estimated asset base of capitalized operating leases
–Estimated income tax expense  
=Operating Profit After Taxes=Average Invested Capital

  

Certain items used in the calculation of ROIC for bonus purposes, such as the implied interest portion of operating lease payments, certain unusual or non-recurring items, average estimated asset base of capitalized operating leases, and 13-month average inventory, while calculated from our financial records, cannot be calculated from our audited financial statements. Prior to the Compensation Committee determining whether bonus targets have been achieved, the Company’s independent registered public accounting firm, at the request and for the restricted use of the Compensation Committee, reviews the bonus calculations.calculations to ensure that the payout is calculated in accordance with the plan. There is a calculation of basic ROIC, which is not precisely the same as the calculation used for incentive compensation purposes because of the exclusion of certain items (please see Page 44(see page 49 for a discussion of disregarded items, and a reconciliation to GAAP on Pagespages 16 through 1719, of our 20152018 Annual Report on Form 10-K).

 

For the 2014-15 performance period, LTIP awards were denominated 50% in cash and 50% in RSUs. There is an additional one-year vesting period, so that the payouts earned for the 2014-15 performance period will not be made to executives until 2017. The RSUs allocated to each executive were valued at the closing price on the date of grant in March 2014. The target payment level, actual percentage payout, and cash

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Executive Compensation

Stock Options and RSUs earned, based on

The Compensation Committee granted equity awards to the Company’s actual performance measured againstNEOs in 2018, splitting the performance goalstotal value of the award between stock options and time-based RSUs in order to enhance the retentive value of the LTI awards. In prior years the annual equity award was made in the form of stock options only. In deciding to grant these awards and determining the value of the awards, the Compensation Committee considered each executive’s position and the competitive market for equivalent talent. For Mr. Johnson, the approximate grant date value of his awards was equivalent to 200% of his base salary. These awards are shown in the chart below. The information shown for Mr. Johnson reflects both his initial target LTIP award opportunity (100%) and his increased target LTIP award opportunity (175%) as Chief Executive Officer, prorated based on the period of time he served in each position. The earned payouts to Mr. Verma and Mr. Hicks for 2014-15 were calculated on a pro rata basis due to their service for a portion of the performance period.

  Target as a Actual as a   
  Percentage of Percentage of   
  Initial Base Salary Initial Base Salary Cash Earned ($) RSUs Earned (#) 
R. Johnson 100% 162.9% 312,542  6,934  
  175% 285.1% 834,080  14,802  
L. Peters 75% 122.2% 345,145  7,657  
R. McHugh 75% 122.2% 411,119  9,120  
J. Berk 75% 122.2% 298,427  6,620  
P. Verma 75% 122.2% 65,703  898  
K. Hicks 175% 285.1% 1,018,713  22,598  

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Executive Compensation

Long-Term Equity Awards

Equity awards are generally designed to reward executives for increasing our return to our shareholders through increases in our stockoption exercise price and are made under the Stock Incentive Plan, which has been approved by our shareholders. Equity awards may, in addition, serve to help retain key executives.

Stock Options

We grant stock options to our named executive officers to align their interests more closely with those of our shareholders. The Compensation Committee awards stock options with exercise pricesis equal to the fair market value of our stock on the date of grant. Therefore, executives who receive stock options will only realize value if there is appreciation in the share price.

Stock option grantsclosing price of the same value are normally made each year to executives holding comparable positions, with larger awards being made to those with greater responsibility. The Compensation Committee determines the number of options granted on a fixed value basis, using Black-Scholes values. Under theCommon Stock Incentive Plan, fair market value is defined as the closing price on the grant date. OptionsStock options normally vest at the rate of one-third of the total grant per year over the first three years of the ten-year option term, subject to continuous service through each vesting date and accelerated vesting in certain limited circumstances. The Compensation Committee does not normally consider an executive’s gains from prior stock awards in makinggranting new awards.

In 2015, when determining The Committee determines the number of stock options to grantgranted based on a fixed value, using the annual grant date, the Compensation Committee considered an assumed Black-Scholes value based on the closing price of a share of the Company’s Common Stock in the 20 trading-day period ending 10 days prior to the date the Committee met to authorize these awards. The option exercise price, as well as the actual Black-Scholes value of the awards, is based upon the closing price of a share of the Company’s Common Stock on the grant date. In 2016,The values shown below for the Compensation Committee used the closing stock priceoption grants are based on a Black-Scholes value of $12.35 on the annual grant date to determine the Black-Scholes value to simplify the methodology and to better align the accounting value of stock options with the reported value.date.

 

Restricted Stock and Restricted Stock Units

We normally make restricted stock or time-vested RSU awards only in special circumstances, such as related to promotions, recruitment, special performance, or retention, rather than as part of an executive’s normal compensation. Restricted stock and RSUs are valued based upon the share price at the time of grant.

Name Stock Options
(#)		 Grant Date Fair Value
($)		 RSUs
(#)		 Grant Date Fair Value
($)
R. Johnson 91,093 1,124,999 25,123 1,125,008
L. Peters 20,243 250,001 5,583 250,007
S. Jacobs 20,243 250,001 5,583 250,007
L. Kimble 18,219 225,005 5,025 225,020
P. Verma 12,146 150,003 3,350 150,013

 

Retirement and Other Benefits

Retirement Plan and Excess Cash Balance Plan

All U.S.-based associates and expatriate U.S. employees of the Company who meet the eligibility requirements are participants in the Foot Locker Retirement Plan (the “Retirement Plan”). The Retirement Plan and the method of calculating benefits payable under it are described on Pages 60 through 61.page 63. All of the named executive officers, other than Mr. Verma, who has not yet met the service requirement for eligibility, and Mr. Hicks, who has retired,NEOs are participants in the Retirement Plan. The Internal Revenue Code (“IRC”) limits the amount of compensation that may be taken into consideration in determining an individual’s retirement benefits. Therefore, those participants in the Retirement Plan whose compensation exceeds the Internal Revenue CodeIRC limit are also participants in the Excess Cash Balance Plan, described on Page 61,page 63, which provides a benefit equal to the difference between the amount a participant receives from the Retirement Plan and the amount the participant would have received were it not for the Internal Revenue CodeIRC limits. The Retirement Plan and Excess Cash Balance Plan take into account only base salary and annual bonus in determining pension benefits. Therefore, long-term incentives, stock options, and stock awards have no effect on the calculation of benefits or payments under these plans.

 

401(k) Plan

The Company has a 401(k) Plan that is available to employees whose primary place of employment is in the United States. TheStates, as well as to expatriate U.S. employees. Eligible associates may contribute to the 401(k) Plan limits participation to employees who have attained at least the agefollowing 28 days of twenty-oneemployment and have completedare eligible for Company matching contributions upon completion of one year of service consisting of at least 1,000 hours. All of the named executive officers, other than Mr. Verma, who has not yet met the service requirement for eligibility, Mr. Hicks, who has retired, and Mr. Berk,NEOs participate in the 401(k) Plan.AsPlan, other than Mr. Kimble. As of January 1, 2016,2019, the 401(k) Plan allows eligible employees to contribute up to 40% of their compensation on a pre-tax basis, subject to a maximum of $18,000.$19,000. The Company matches 25% of employees’ pre-tax contributions on up to the first 4% of the employees’ compensation (subject to certain limitations). The matching contribution is made in cash. Matching contributions are vested incrementally over the first five years of participation. See Note 6 to the Summary Compensation Table on Page 45 includes, under All

38  |2016 Proxy Statement

Executive Compensation

Other Compensation,pages 53 through 54 for the amount of the Company match for each of the named executive officers. Beginning with the 2015 plan year, the matching contribution is made in cash. Prior to this, it was made with Company Stock. The matching contributions are vested incrementally over the first 5 years of participation.NEOs.

 

Supplemental Executive Retirement Plan

The Company maintains a Supplemental Executive Retirement Plan (the “SERP”), described on Page 61,page 64, for certain senior officers of the Company and other key employees, including the named executive officers. Mr. Hicks participated in the SERP prior to his retirement.NEOs. The SERP is an unfunded plan that sets an annual target incentive award for each participant consisting of a percentage of base salary and annual bonus based on the Company’s performance against target. This is the same target as set under the Annual Bonus Plan. Contributions range from 4% to 12% of salary and annual bonus, depending on the Company’s performance against an established target, with an 8% contribution being made for target performance. The Compensation Committee establishes the SERP target each year, and it is normally the same as the performance target under

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Executive Compensation

the Annual Bonus Plan.annual bonus plan. In addition, performance-based participant accounts accrue interest at the rate of 6% annually. The SERP also provides for the continuation of medical and dental insurance benefits following retirement to vested participants who were participants in the SERP prior to the start of the 2014 fiscal year when this benefit was closed to new participants.

 

Based upon the Company’s performance in 2015,2018, a credit of 9.7%7.3% of 20152018 base salary and annual bonus was made to the SERP for each of the named executive officers.NEOs. Credits to the SERP are based only on base salary and annual bonus;bonus, if paid; therefore, long-term incentives, stock options, and stock awards have no effect on the calculation of benefits or payments under this plan. As of the end of 2015,2018, the account balances of the named executive officersNEOs ranged from approximately $34,855$178,053 for Mr. Verma to $1,680,213$2,449,041 for Mr. Johnson. Under the terms of the SERP, executives are vested in their account balances based upon a combination of age and service. As of the end of 2015,2018, all of the named executive officers,NEOs, other than Mr. Verma who has not yet met the age and service requirements, were vested in the SERP. Upon his retirement in May 2015,

International Assignment Compensation

We provide employees on long-term international assignments, such as Mr. Hicks became eligibleKimble, with additional benefits and allowances that are designed to receive payment under the SERP accordingminimize any financial detriment or gain to the terms ofemployee from an international assignment. For Mr. Kimble, who was the plan.only NEO who was an expatriate employee in 2018, we provided benefits and allowances for certain goods and services differential, housing, automobile costs, and tax preparation assistance.

 

Perquisites

We provide the named executive officersNEOs with certain perquisites, which the Compensation Committee believes to be reasonable and consistent with its overall objective of attracting and retaining talented executives. The Company provides the named executive officersNEOs with an automobile allowance, financial planning, medical expense allowance, annual physical, supplemental long-term disability insurance, and life insurance. In addition, the Company reimburses Mr. Johnson and reimbursed Mr. Hicks prior to his retirement, for reasonable expenses of using car service for transportation in the New York metropolitan area. We also provide for continuation of medical and dental insurance benefits following retirement to participants who vested in the SERP prior to the start of the 2014 fiscal year when the benefit became closed to new participants. We do not provide a gross-up to executives for the income tax liability they incur due to their receipt of these perquisites. Under

Executive Employment Agreements

As more fully described on pages 54 through 55, we have employment agreements with each of our relocation policy applicable to all executives, weNEOs. Other than the agreement with Mr. Johnson as CEO, the agreements are substantially in the same form.

Our employment agreements with the NEOs provide a gross-up to executives for moving and other relocation expenses that we reimburse, and under that policy we provided a gross-up to Mr. Verma relatedseverance payments to the relocation ofexecutive if we terminate the executive’s employment without cause or if the executive terminates his principal residenceor her employment for good reason. These payments to the New York metropolitan areaNEOs, calculated as if termination of employment occurred at the end of our last fiscal year, are set out in 2015.

Compensation Program Changes for 2016

The Compensation Committee has reviewed the executive compensation program for 2016 and, following its review, made certain changes to the LTIP design, which we describe below. The purpose of these changes is to continue to incentivize strong performance and provide the executives with competitive total compensation opportunities appropriate to their positions, while further aligning their interests with our shareholders.

 2016 Proxy Statement  |  39

Executive Compensationtables on pages 65 through 67.

 

Increased Equity PortionThe NEOs would receive an enhanced severance payment if the executive’s employment is terminated without cause or if the executive terminates employment for good reason within two years following a change in control. For an executive to receive the enhanced severance payment, two events must occur: first, employment must be terminated for one of LTIP Payout Vehicle Mix

The vehicle mix for earned awards beginning with the 2016-17 performance period under the LTIP will be increased to 75% RSUsspecified reasons, and decreased to 25% cash to further emphasize the equity component of any earned payout. Currently, the vehicle mix is 50% RSUs and 50% cash.second, this termination must occur within two years following a change in control. We believe that thisthese provisions, which we have had in place for a number of years, provide appropriate protection to our executives, comparable to that available at other public companies, and, with regard to the enhanced severance following a change will further align our executives’ interests with our shareholders’ becausein control, protect us from losing key executives during a greater proportionperiod when a change in control may be threatened or pending. None of the payout valueNEOs is subjectentitled to fluctuationsa gross-up payment for any excise taxes that may become payable in our stock price.connection with a change in control.

 

Instituted an LTIP Performance Floor

In making decisions for the 2016 compensation program, the Compensation Committee considered various factors (such as our long-term strategic plan and financial objectives, the consistent rigor of LTIP performance goals established by the Compensation Committee based on the financial plans approved by the Finance Committee and the Board, the market environment, and the overall objectives of our compensation program), and approved a “performance floor” set at 85%All of the target award. AsNEOs have agreed in their employment contracts not to compete with the Company for two years following their termination of employment and not to hire Company employees during that same period. This restriction does not apply following a result, no payouts would be earned for the 2016-17 period if the actual performance is below 85% of the target. The “performance gate,” whereby no amounts would be earned under the LTIP unless the Company’s average annual after-tax income for the performance period exceeded the Company’s after-tax incomechange in the year prior to the beginning of the relevant performance period, was removed. The Compensation Committee made this change to set a consistent performance threshold for each performance period and ensure that our LTIP is market-competitive among peer companies with similar program designs. We believe this change supports the goals of our overall compensation program, which are to attract, motivate, and retain executives most critical to the long-term success of the Company.control.

 

Procedures for Determining Compensation

44

    Foot Locker, Inc.

 

Executive Compensation

Procedures for Determining Compensation

Setting Compensation, Establishing Goals, and Evaluating Performance

The

As reflected in the following timeline, the Compensation Committee oversees a rigorous and comprehensive compensation approval, and goal setting, process. and performance review process:

Annual Review•The Compensation Committee reviews any feedback from shareholder engagement meetings
and Approvalsregarding the compensation program.
(January -•At its February meeting, the Committee discusses further refined planning and preliminary
March)recommendations for the following fiscal year’s compensation program.
 (GRAPHIC)•At its March meeting, final recommendations are presented, and the Committee approves the executive compensation design, components, and awards for each executive, and establishes the applicable annual bonus and LTIP performance goals. The Committee meets privately with the independent consultant to review and approve the CEO’s compensation.

Compensation
Planning
(May -
November)

 (GRAPHIC)

•During its meetings over this period, the Committee has preliminary discussions with management and compensation consultants regarding the compensation program design for the following year, including reviewing compensation trends, peer group composition, a competitive analysis of individual executives’ compensation relative to market, preliminary pay recommendations, and the current incentive payout forecast. The Committee provides feedback and direction regarding the program design for the next fiscal year.
•The Committee meets privately with the independent consultant regarding the CEO’s compensation.
Additional
Reviews
(During Year)		•The Compensation Committee meets at other times during the year with management and privately with the independent consultant to review performance against the established performance goals, discuss developments, emerging trends, and to review specific issues related to executive compensation or other issues related to management resources. The Compensation Committee also has
responsibility for annually reviewing the compensation paid to non-employee directors and making recommendations to the full Board regarding the directors’ compensation program.

Each year, in advance of making compensation decisions for the forthcoming year, the Compensation Committee meets with management and reviews the Company’s overall executive compensation program in light of the Company’s long-term strategy and financial objectives approved by the Finance Committee and the Board. The Compensation Committee meets with management, the Company’s compensation consultant, and the Compensation Committee’s independent compensation consultant to review the executive compensation environment, including recent developments and trends in executive compensation relative to the Company’s executive compensation program, and a historical view of the pay-for-performance correlation in the program and any changes to the program being recommended by management or either of the consultants.

 

After the financial results for the prior year have been finalized and audited, the Compensation Committee meets to review and approve bonus and incentive compensation payments for the prior year and to review and approve compensation arrangements—base salaries, stock awards, and incentive plan targets—for the upcoming year. The Compensation Committee meets privately with its independent compensation consultant for the purpose of establishing the compensation of the Chief Executive Officer,CEO, including establishing target awards under the Annual Bonus Plan and the LTIP, and making stock awards to him under the Stock Incentive Plan to him.Plan. Except in the case of promotions or other unusual circumstances, the Compensation Committee considers granting stock awards only at this meeting, which is normally held within a few weeks following the issuance of the Company’s full-year earnings release for the prior year.

 

Benchmarking Approach

We have established benchmarks for compensation, including cash and equity, for each NEO. These benchmarks are reviewed annually and are based upon compensation for comparable positions in a peer group consisting of publicly-traded athletic footwear and apparel retailers and other specialty retail companies having revenues of approximately one-third to two and one-half times the Company’s revenue. We also use the peer group data to assess the competitiveness of total direct compensation awarded to our senior executives and as a data point in designing compensation plans, benefits, and perquisites.

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Executive Compensation

The Compensation Committee may hold other meetings duringdetermined that the year to review specific issues related tofollowing companies, which comprised the peer group for 2018 compensations decisions, was the appropriate peer group for executive compensation new developments in executive compensation, or other issues related to management resources. It also has responsibility, along withpurposes based upon the Nominating Committee,nature of their businesses, revenues, and the pool from which they recruit their executives.

Peer Group for annually reviewing compensation paid to non-employee directors.2018 Compensation Decisions

 

40  |2016 Proxy Statement
Abercrombie & Fitch Co.Dick’s Sporting Goods Inc.Genesco Inc.
American Eagle Outfitters, Inc.DSW Inc.L Brands, Inc.
Ascena Retail Group, Inc.The Finish Line Inc.Ross Stores, Inc.
Autozone, Inc.GameStop Corp.Signet Jewelers Limited
Bed, Bath & Beyond Inc.The Gap Inc.Williams-Sonoma, Inc.
Caleres, Inc.

One goal of the Compensation Committee is to provide competitive total compensation opportunities for the NEOs that vary with Company performance. The Compensation Committee uses the peer group benchmark information as a reference point in evaluating executive compensation, assessing the competitiveness of total direct compensation awarded to our senior executives, and designing compensation plans, benefits, and perquisites; it does not, however, attempt to match the compensation of each executive position in the Company precisely with that of an equivalent position in the peer group. In general, the Compensation Committee looks to position an executive’s total compensation at the median of comparable positions at peer companies, consistent with the Company’s revenue in relation to peer companies. The Compensation Committee also considers other factors, including performance, responsibility, experience, tenure, internal equity, and market positioning, when determining compensation.

Changes to Peer Group for 2019 Compensation Planning

During 2018, the Committee reviewed the peer group in light of merger and acquisition activity affecting certain peer companies, as well as the standing of certain peer companies in terms of revenues and market capitalization relative to the peer group criteria and determined that a refresh of the peer group based on a revised set of criteria was appropriate. For 2019 compensation decisions, the peer group criteria is as follows: (i) companies having revenues of approximately 0.5 to 2 times the Company’s revenue and market capitalization of approximately 0.25 to 4 times the Company’s market capitalization; and (ii) select sub-industries within the consumer discretionary sector most comparable to the Company’s business-apparel retail; apparel, accessories, and luxury goods; footwear; home furnishing retail; internet and direct marketing retail; and specialty stores. Based on the updated criteria, the peer group for 2019 compensation planning, which is shown below, reflects a larger, more diverse group of peers:

 
(GRAPHIC) Deletions(GRAPHIC) AdditionsPeer Group for 2019 Compensation Planning
Abercrombie & Fitch Co.Burlington Stores, Inc.American Eagle Outfitters, Inc.Ralph Lauren Corp.
Ascena Retail Group, Inc.Expedia, Inc.Bed Bath & Beyond Inc.Sally Beauty Holdings, Inc.
Autozone, Inc.Hanesbrands, Inc.Burlington Stores, Inc.Signet Jewelers Ltd.
Caleres, Inc.Michaels Companies, Inc.Dick’s Sporting Goods, Inc.Skechers USA, Inc.
DSW Inc. (GRAPHIC)PVH Corp. (GRAPHIC)Expedia, Inc.Tapestry, Inc.
The Finish Line Inc.Qurate Retail, Inc.The Gap, Inc.Tiffany & Co.
GameStop Corp.Ralph Lauren Corp.Hanesbrands, Inc.Tractor Supply Co.
Genesco Inc.Sally Beauty Holdings, Inc.L Brands, Inc.Ulta Beauty, Inc.
Ross Stores, Inc.Skechers USA, Inc.Michaels Companies, Inc.Under Armour, Inc.
Williams Sonoma, Inc.Tapestry, Inc.PVH Corp.Urban Outfitters, Inc.
Tiffany & Co.Qurate Retail, Inc.Wayfair, Inc.
Tractor Supply Co.
Ulta Beauty, Inc.
Under Armour, Inc.
Urban Outfitters, Inc.
Wayfair, Inc.

46

Foot Locker, Inc.

Executive Compensation

 

Use of Compensation Consultants

The Compensation Committee has retained as its advisor a nationally-recognized executive compensation consultant—consultant, Compensation Advisory Partners—Partners (“CAP”), that is independent and performs no other work for the Company. Compensation Advisory Partnersmanagement. CAP reports directly to the Compensation Committee, meets with the Compensation Committee privately without management present, and regularly communicates privately with the Compensation Committee Chair. CAP also meets with the Nominating and Governance Committee regarding non-employee directors’ compensation and reports on related governance and trends. The Compensation Committee has assessed the independence of Compensation Advisory PartnersCAP based on standards promulgated by the SEC and concluded that no conflict of interest exists that would prevent it from serving as an independent consultant to the Compensation Committee. Each year, the Compensation Committee’s compensation consultantCAP reviews a report on risk in relation to the Company’s compensation policies and practices, provides a pay-for-performance analysis of our executive compensation program, and reviews the Chief Executive Officer’sCEO’s compensation. In addition, each year the Compensation Committee’s consultantCAP reviews and makes recommendations regarding the compensation program for non-employee directors, and the Compensation Committee together with the Nominating Committee, considerconsiders the consultant’s report on the program. Management utilizes the services of ClearBridge Compensation Group, a nationally-recognized compensation consultant, to provide advice on the executive compensation program and plan design.

 

Management Involvement in Developing the Compensation Program

Management is involved in various aspects of developing the executive compensation program. Our Senior Vice President and Chief Human Resources Officer, Vice President—Global Total Rewards, and staff in the Human Resources Department work with our Chief Executive OfficerCEO to develop compensation recommendations for all corporate and executive officers other than the Chief Executive Officer.CEO. The Chief Executive OfficerCEO or the Senior Vice President and Chief Human Resources Officer reviews these proposals with the Compensation Committee Chair, and may make changes to the recommendations based upon hisher input, before the recommendations are forwardedpresented to the Compensation Committee for review. Our Senior Vice President and General Counsel also attends meetings of the Compensation Committee and participates in some of these discussions and preparations.

 

Additional Information

Additional Information

 

Key Compensation Governance Policies

 

Independent Compensation Consultant

With regard to executive and director compensation matters, our Compensation Committee directly retains, and is advised by, an independent compensation consultant who performs no other work for the Company.

 

Clawback Policy

We have adopted a clawback policy that provides for the recovery of incentive compensation—paid in cash or equity—if the Compensation Committee determines that an executive (1) engaged in fraud or gross misconduct which results in an accounting adjustment, whether or not the adjustment results in a restatement of our financial statements.statements, or (2) committed a significant legal or compliance violation of the Company’s policies or Code of Business Conduct. The Compensation Committee is closely monitoring the proposed SEC proposed rules in 2015 on clawback policies,regarding recoupment of incentive-based compensation and we intend to review our clawbackwill amend the policy onceif necessary when the SEC and NYSE establish final rules governing clawbacks.are adopted.

 

Stock Ownership Guidelines

We have meaningful stock ownership guidelines for our senior executives. These are set at six times annual base salary for the Chief Executive Officer,CEO, three times annual base salary for executive vice presidents, two times annual base salary for senior vice presidents, and divisional chief executive officers, and a multiple of annual base salary for other covered executives. If an executive has not met the ownership requirements following a five-year phase-in period, the executive

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Executive Compensation

is required to hold 100% of net shares acquired from the vesting of restricted stock or RSUs or the exercise of stock options until they comply with the stock ownership guidelines. At the end of 2015,2018, all of the named executive officersNEOs met or exceeded their applicable ownership guidelines.

 

No Tax Gross-Ups

We do not provide a tax gross-up with regard to any compensation, benefit, or perquisite paid by the Company, other than our executiveinternational assignment policy (“IAP”) or relocation program that is applicable to all executives.employees. We also do not provide tax gross-ups for any amount paid to an executive upon termination of employment or in connection with a change-in-control.change in control.

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Executive Compensation

 

Anti-Hedging Policy

We do not permit our executive officersexecutives to take short positions in our shares or to hedge their economic interest in their shares.

 

No Stock Option Repricing

Our Stock Incentive Plan does not permit the repricing of stock options without shareholder approval.

 

Compensation Plans and Risk

We believe that our compensation program encourages our named executive officersNEOs to take energetic action to improve the Company’s performance without encouraging them to take undue risk. The performance-based annual cash bonusincentive and LTIP elements of the program are paid based upon performance as compared to the Company’s annual and two-year financial plans, which are prepared each year by the Company’s management and reviewed and approved by the Finance Committee and the Board. The AFG awards are based on the approved 2018-19 financial plan and 2020 forecast reviewed by the Finance Committee and the Board. No bonusesincentive awards are earned or paid unless the applicable performance goals are achieved. We believe that, on balance, the plans are reasonably achievable under normal business conditions. This encourages our executives to manage the business well without pressuring them to take undue risks in order to obtain a bonus payment.payout.

 

Our equity-based compensation for the named executive officersNEOs is designed with a similar goal in mind. We believe that our equity grants are reasonable in relation to overall compensation. Stock options normally vest ratably over a three-year period and have a 10-year term, reducing the risk that an executive will take short-term action to inflate the price of the Company’s stock for a brief period.

 

LTIP payouts are calculated at the conclusion of a two-year performance period, but are not actually paid to the participant until after an additional year of vesting has been satisfied. In addition to serving as a retention vehicle, this also requires that the executive continue to have the value of the stock portion of his or her award at risk, dependent on fluctuations in stock price, for an additional year. It also allows a year to pass in which any issues concerning the Company’s operating or financial performance may come to light before payments are made.

 

In addition, there are certain other factors related to our compensation programs for the named executive officersNEOs that we believe help reduce the likelihood that our compensation programs will encourage our executives to take undue risk, as described below. Please also see Page 28See page 50 for a discussion of compensation and risk in our compensation plans more generally, and the procedures we followed to evaluate this.risk.

 

42|2016 Proxy StatementFactor

Executive Compensation

Description
FactorDescription
Bonus Targets Based on Financial PlanAs the bonus targets are based on the financial plan, any significant deviation from the plan undertaken by management during the course of the year must be reviewed and approved by the Board.
ROIC as Bonus
Measurement		As a retail company, we believe that one of the potential risks we have is that management will attempt to achieve profit targets without taking into account the capital used, particularly working capital invested in inventory.inventory and operating leases. We have, therefore, designed our LTIP for senior management, including the named executive officers,NEOs, to take into account ROIC as well as net income in determining whether a bonus will be paid.
No Bonus Payments to
Executives with Poor
Performance Ratings		We have designed our plans so that executives who receive a “Not Meeting Expectations” or an “Unsatisfactory”Performance” rating under the Company’s annual performance appraisal process are not eligible to receive an annual bonus payment. This helps prevent an individual executive from taking any action inconsistent with the business plan or otherwise exposing the Company to undue risk.
Bonus TargetsBonus targets are based on the financial plan that is reviewed and approved by the Board.
Incentive Payments
Proportional to
Base Salary		We believe that our cash incentive payments are not outsized in relation to base salary. Mr. Johnson, as Chief Executive Officer,CEO, has the opportunity to earn at target 125%200% of his base salary in annual bonus and 175%250% of his base salary in LTIP award. Prior to his promotion to Chief Executive Officer, Mr. Johnson’s target LTIP award opportunity was 100%.LTIP. Comparable percentages for the Executive Vice Presidents are 65%other NEOs currently range from 75% to 100% for annual bonus and 75%; and for the Senior Vice Presidents, 50% and 75%. Prior to his retirement, Mr. Hicks’ comparable percentages were 125% and 175%.LTIP.
Bonus CapsAnnual cash bonus and the cash portion of the LTIP awards to executives are capped and do not include excessive leverage.
Mix of ComponentsWe use a mix of annual and long-term incentive components, as well as a mix between the use of cash and equity.

 

48

    Foot Locker, Inc.

Executive Employment Agreements

As more fully described on Pages 48 through 52, we have employment agreements with each of our named executive officers, other than Mr. Hicks, who retired in 2015. We had an employment agreement with Mr. Hicks prior to his retirement as Executive Chairman. Other than the agreements with Mr. Johnson as President and Chief Executive Officer, Mr. Verma as Senior Vice President and Chief Information Officer, and Mr. Hicks as Executive Chairman, the agreements with the named executive officers are in the same form.Compensation

 

Our employment agreements with the named executive officers provide for severance payments to the executive if we terminate the executive’s employment without cause or if the executive terminates his or her employment for good reason. These payments to the named executive officers, calculated as if termination of employment occurred at the end of our last fiscal year, are set out in the tables on Pages 63 through 74.

The named executive officers receive an enhanced severance payment if the executive’s employment is terminated without cause or if the executive terminates employment for good reason within two years following a change-in-control. For an executive to receive the enhanced severance payment, two events must occur: first, employment must be terminated for one of the specified reasons, and second, this termination must occur within two years following a change-in-control. We believe

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Executive Compensation

that these provisions, which we have had in place for a number of years, provide appropriate protection to our executives, comparable to that available at other public companies, and, with regard to the enhanced severance following a change-in-control, protect us from losing key executives during a period when a change-in-control may be threatened or pending. None of the named executive officers is entitled to a gross-up payment for any excise taxes that may become payable in connection with a change-in-control.

All of the named executive officers have agreed in their employment contracts not to compete with the Company for two years following the termination of employment and not to hire Company employees during that same period. This restriction does not apply following a change-in-control.

Delegation of Authority

The Compensation Committee currently has delegated authority to its Chair to approve, between committee meetings, time-vested RSU awards up to 7,500 RSUs per individual award and stock option awards of up to 25,000 shares per individual award, and time-vested RSU awards upin both cases only to a maximum of 7,500 RSUs per individual award to employees other thanexecutives who are not corporate or executive officers corporateof the Company, division chief executive officers, andor general managers of operating divisions.managers. It is expected that the Chair would use this authority to approve awards made during the course of the year in connection with promotions, new hires, or new hires.special retention purposes. Options are priced at fair market value on the date the Chair signs the approval, which is the grant date of grant for awards made under this delegation authority. Similarly, the value of RSU awards is based on the fair market value on the date the Chair signs the approval. The Chair did not use any delegationused this authority three times in 2015.2018, approving stock options and time-based RSU awards. The Compensation Committee has not delegated authority to management to make stock option, restricted stock, RSU, or other equity-based awards.

 

Items Disregarded for Bonus Calculations

Under normal circumstances, the Compensation Committee has no discretion to increase annual bonus or

Annual Bonus and LTIP payments which are formula-driven based upon Company performance, and our 2018 program for the named executive officersNEOs does not provide for discretionary adjustments based upon individual performance. The Compensation Committee may, however, in its sole discretion, determine to eliminate or reduce the amounts payable under these incentive programs, but has not adjusted any of the annual bonusno discretion to increase Annual Bonus or LTIP payments to the named executive officers shown in the Summary Compensation Table from payouts calculated based upon the applicable formula. When determining bonus and incentive payments, consistent with Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”), the Compensation Committee is required to disregard certain events that it determines to be unusual or non-recurring.payments. When establishing the targets, the Compensation Committee normally specifies certain items that it considers to be unusual or non-recurring, and these events, if they occur, are automatically excluded when calculating payments. All of the references in this CD&A to target and actual performance levels refer to amounts after taking these adjustments into consideration.

 

Accounting and Tax Considerations of Executive Compensation

While we review both the accounting and tax effects of various components of compensation, these effects are not a significant factor in the Compensation Committee’s allocation of compensation among the different components. In general,With respect to awards made before the 2017 tax reform legislation, it is our positionwas the Committee’s intent that compensation paid to executive officers should generally be fully deductible for U.S. tax purposes, and, we haveconsistent with this intent, the Committee structured our bonus, long-term incentive, and stock option programs so that payments made under them are deductible. Ingenerally qualified for the performance-based exception of Section 162(m) of the IRC (“Section 162(m)”). However, the Committee believes that in certain instances however, we believe that it is in the Company’s and our shareholders’ best interests and that of its shareholders, to have the flexibility to pay compensation that is not deductible under the limitations of Section 162(m) in order toso that we may provide compensation consistent with our program and objectives.

The portion2017 U.S. Tax Reform Legislation amended Section 162(m) to eliminate the “performance-based compensation” exception effective for tax years beginning after December 31, 2017, subject to a transition rule allowing companies to deduct compensation payable pursuant to a written binding contract in effect on November 2, 2017 and not materially modified after that date. Notwithstanding the change in the tax law, the Committee is committed to the principles of base salary paidlinking executive pay closely to Mr. Johnsonthe Company’s strategy and performance, establishing challenging and measurable performance goals, and providing payout limits under annual and long-term incentive plans. Further, the Compensation Committee reserves the right to modify compensation that exceeds $1 million, the value of time-based restricted stock awards made to Mr. Johnson, the taxable portion of certain perquisites provided to Mr. Johnson, and potentially a portion of the value of time-based restricted stock awards made to one or more of the other named executive officers, are not expectedwas initially intended to be deductible.exempt from Section 162(m) if it determines that such modifications are consistent with the Company’s business needs.

 

44  |  2016 Proxy Statement

 
2019 Proxy Statement

49

Executive Compensation

 

Compensation and Management Resources Committee Report

 

The Compensation Committee has reviewed and discussed the CD&A required by Item 402(b) of Regulation S-K with management and, based on that review and discussion, has recommended to the Board that the CD&A be included in this Proxy Statement.

 

Members of the Compensation Committee

 

 (GRAPHIC)(GRAPHIC) (GRAPHIC) (GRAPHIC) (GRAPHIC) 
Kimberly Underhill, ChairMaxine ClarkAlan D. FeldmanSteven OaklandCheryl Nido Turpin

Compensation Committee Interlocks and Insider Participation

Maxine Clark, Alan D. Feldman, Chair
Nicholas DiPaolo
Steven Oakland,
Cheryl Nido Turpin,
Dona D. Young and Kimberly Underhill served on the Compensation Committee during 2018. None of the committee members was an officer or employee of the Company or any of its subsidiaries, and there were no interlocks with other companies within the meaning of the SEC’s proxy rules.

Compensation and Risk

The Company has completed a risk-related review and assessment of our compensation program and concluded that our executive compensation is not reasonably likely to result in a material adverse effect on the Company. As part of this review, the independent compensation consultant to the Compensation Committee reviewed risk in relation to the Company’s compensation policies and practices with the Company’s human resources executives directly involved in compensation matters. The consultant reviewed the compensation policies and practices in effect for corporate and division employees through the manager level, store managers, and store associates, and reviewed the features we have built into the compensation programs to discourage excessive risk taking by employees, including a balance between different elements of compensation, differing time periods for different elements, consistent Company-wide programs, plan performance targets based on the corporate budgeting process, and stock ownership guidelines for senior management.

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Executive CompensationExecutive Compensation

 

Summary Compensation Table

 

(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
              Change    
              in Pension    
              Value and    
            Non-Equity Nonqualified    
            Incentive Deferred All  
        Stock Option Plan Compensation Other  
Name and Principal Position   Salary Bonus Awards Awards Compensation Earnings Compensation Total
(1) Year ($)(2) ($)(3) ($)(4)(5) ($)(4) ($)(6) ($)(7) ($)(8) ($)
Richard A. Johnson 2015 1,037,500 — 918,793 3,328,479 2,866,278  420,164  49,353  8,620,567
President and Chief 2014 931,250 — 4,728,272 1,596,328 1,690,209  365,092  427,558  9,738,709
Executive Officer 2013 887,500 — 450,016 512,869 1,510,966  229,672  36,866  3,627,889
Lauren B. Peters 2015 595,000 — 226,888 512,320 857,976  196,559  20,404  2,409,147
Executive Vice President 2014 561,250 — 1,196,558 506,437 762,160  231,420  377,010  3,634,835
and Chief Financial Officer 2013 537,500 — 206,262 458,308 721,929  130,619  10,133  2,064,751
Robert W. McHugh 2015 673,000 — 252,415 512,320 991,178  218,484  20,651  2,668,048
Executive Vice President— 2014 668,500 — 1,881,414 506,437 907,754  255,538  324,380  4,544,023
Operations Support 2013 650,000 — 245,638 458,308 895,793  150,471  19,528  2,419,738
Jeffrey L. Berk 2015 488,524 — 183,225 256,160 622,318  189,895  4,327  1,744,449
Senior Vice President— 2014 488,524 — 255,018 253,218 568,398  216,813  259,860  2,041,831
Real Estate 2013 488,524 — 183,218 229,154 608,945  147,539  7,039  1,664,439
Pawan Verma 2015 216,071 455,095 1,665,162 225,105 208,958  49,650  80,988  2,901,029
Senior Vice President                     
and Chief Information Officer                     
Ken C. Hicks 2015 290,278 — — — 1,499,848  —  37,716  1,827,842
Retired Executive Chairman 2014 1,075,000 — 870,540 3,291,817 3,068,544  440,639  243,149  8,989,689
  2013 1,100,000 — 3,496,281 5,669,402 3,290,375  291,428  218,739  14,066,225

(a)(b)(c)(d)(e)(f) (g) (h)(i)
  Salary Stock
Awards		 Option
Awards		 Non-Equity Incentive
Plan Compensation		 Change inPension Value
and Non-Qualified Deferred
CompensationEarnings		  All Other
Compensation		Total
Name and Principal PositionYear($)(1)($)(2)(3) ($)(2)($)(4) ($)(5) ($)(6) ($)
Richard A. Johnson20181,100,0008,875,0691,124,9991,859,000 380,307 62,60113,401,976
Chairman, President and20171,100,0002,750,0612,200,005— 294,161 48,9956,393,222
ChiefExecutive Officer20161,087,5002,062,5222,200,0162,599,932 403,443 572,4558,925,868
Lauren B. Peters2018675,0001,925,101250,001427,781 182,072 13,4043,473,359
ExecutiveVice President and2017675,000506,314500,009— 174,281 7,6461,863,250
Chief Financial Officer2016657,5001,579,759450,010714,088 205,626 84,0113,690,994
Stephen D.“Jake” Jacobs2018850,0002,600,048250,0011,336,200 246,502 23,9805,306,731
ExecutiveVice President and2017850,000637,554500,009— 179,511 32,9242,199,998
ChiefExecutive Officer—North America2016844,4452,654,792450,010952,238 222,934 117,5135,241,932
LewisP.Kimble2018650,0001,712,620225,005— 247,830 1,314,6034,150,058
ExecutiveVice President and2017650,000365,679450,013— 263,152 386,6412,115,485
ChiefExecutive Officer—AsiaPacific2016642,4601,365,680450,010635,262 326,186 235,9703,655,568
PawanVerma2018550,0001,312,563150,003348,562 90,599 42,5142,494,241
ExecutiveVicePresident and2017493,3331,785,721225,006— 49,737 43,8552,597,652
ChiefInformationandCustomer Connectivity Officer2016461,250261,603225,005360,252 70,795 239,9281,618,833

  

Notes to Summary Compensation Table

(1)Richard A. Johnson has served as President and Chief Executive Officer since December 1, 2014. Mr. Johnson served as Executive Vice President and Chief Operating Officer from May 16, 2012 to November 30, 2014. He served as Executive Vice President and Group President—Retail Stores from July 1, 2011 to May 15, 2012; President and Chief Executive Officer of Foot Locker U.S., Lady Foot Locker, Kids Foot Locker, and Footaction from January 8, 2010 to June 30, 2011; President and Chief Executive Officer of Foot Locker Europe from August 2007 to January 2010; and President and Chief Executive Officer of Footlocker.com/Eastbay from April 2003 to August 2007.
Lauren B. Peters has served as Executive Vice President and Chief Financial Officer since July 1, 2011. Ms. Peters previously served as Senior Vice President—Strategic Planning.
Robert W. McHugh has served as Executive Vice President—Operations Support since July 1, 2011. Mr. McHugh previously served as Executive Vice President and Chief Financial Officer from May 1, 2009 to June 30, 2011.

 

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Executive Compensation

Jeffrey L. Berk has served as Senior Vice President—Real Estate since February 9, 2000.
Pawan Verma has served as Senior Vice President and Chief Information Officer since the commencement of his employment with the Company on August 10, 2015.
Ken C. Hicks served as Executive Chairman from January 31, 2010 to May 20, 2015 and previously served as President and Chief Executive Officer from August 17, 2009 to November 30, 2014.
(2)The amounts in columncolumns (c) and (f) reflect the annual base salaries earned by our named executive officers for 2015. Including theand non-equity incentive plan compensation, included in column (g),respectively, earned by our NEOs for the designated years. For 2018, these combined amounts represented the following percentagespercentage of the named executive officers’NEOs’ total compensation for 2015:compensation: Mr. Johnson (45.3%(22.1%), Ms. Peters (60.3%(31.7%), Mr. McHugh (62.4%Jacobs (41.2%), Mr. Berk (63.7%), Mr. Verma (14.7%Kimble (15.7%), and Mr. Hicks (97.9%Verma (36.0%). Information on the named executive officers’NEOs’ employment agreements appears beginning on Page 48.page 54.

(3)The amount in this column reflects (i) the sign-on bonus of $300,000 that Mr. Verma received in connection with the commencement of his employment in August 2015, plus (ii) the difference between Mr. Verma’s prorated annual bonus paid to him under the Annual Bonus Plan for 2015 and the annual bonus payment that would have been paid to him under the Annual Bonus Plan if he had been a participant for the entire 2015 fiscal year.
(4)(2)The amounts in these columns reflect the stock and option awards granted in the designated years. The amounts represent the aggregate grant date fair value of the awards granted in each respective year calculated in accordance with stock-based compensation accounting rules (ASC Topic 718).rules. A discussion of the assumptions used in computing the award values may be found in Note 2221 to our financial statements in our 20152018 Annual Report on Form 10-K. As provided under the SEC’s rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions and include, for restricted stock awards, expected dividend payments at the same rate as paid on our shares of Common Stock. Please seeSee the Grants of Plan-Based Awards Table beginning on Page 53page 56 for additional information on awards granted in 2015.2018. The amounts shown in the table do not necessarily reflect the actual value that may be recognized by the named executive officers.NEOs.

(5)(3)The amounts in this column (e) include the grant date fair value of performance-based RSUsPBRSUs granted for the long-term performance measurement periods of 2015-16, 2014-15,2018-19, 2017-18, and 2013-14,2016-17, valued at grant date based upon the probable outcome of meeting the performance conditions.conditions, which is based on the target performance level. The amounts are consistent with the estimates of the aggregate compensation cost to be recognized over the service period determined at the grant date under FASB ASC Topic 718,stock-based compensation accounting rules, and exclude the effect of estimated forfeitures. Column (e)Assuming the maximum performance level, the grant date fair value of the PBRSUs granted for the long-term performance measurement period of 2018-19 would be $5,500,014 for Mr. Johnson, $1,350,027 for Ms. Peters, $1,700,028 for Mr. Jacobs, $975,040 for Mr. Kimble, and $825,027 for Mr. Verma. This column also includes restricted stock or time-based RSU awards, where applicable. Please seeSee the Grants of Plan-Based Awards Table beginning on Page 53page 56 for additional information on the awards granted in 2015.2018.

(6)(4)For 2015,2018, this column reflects the cash incentive payouts made in 2019 under the Annual Bonus Plan for 2018, as shown in Table I below. No LTIP payouts were earned for the 2017-18 performance measurement period. For 2017, there were no cash incentive payouts made under the Annual Bonus Plan for 2017 and no LTIP payouts were earned for the 2016-17 performance measurement period. For 2016, this column reflects the sum of the cash incentive payouts made in 20162017 under the Annual Bonus Plan for 2015 and the cash portion of the earned payout under the LTIP for the 2014-15 performance measurement period that is payable in 2017 if the executive continues to be employed by us on the payment date, as shown in Table I below. For 2014, this column reflects the sum of the cash incentive payouts made in 2015 under the Annual Bonus Plan for 20142016 and the cash portion of the earned LTIP payout for the 2013-142015-16 performance measurement period that was paid in 2016,2018, as shown in Table II below. For 2013, this column reflects the sum of the cash incentive payouts made in 2014 under the Annual Bonus Plan for 2013 and the cash portion of the earned LTIP payout for the 2012-13 performance measurement period that was paid in 2015, as shown in Table III below.

 

I—Cash Incentive Payouts for 20152018

 

  Payout in 2016 Payout in 2017  
    LTIP  
    2014-15 Performance Period Total
  Annual Bonus Plan (Cash Payout Earned— As Shown in Summary
Name Cash Payment for 2015 ($) Payable in 2017) ($) Compensation Table ($)
R. Johnson 1,719,656  1,146,622  2,866,278 
L. Peters 512,831  345,145  857,976 
R. McHugh 580,059  411,119  991,178 
J. Berk 323,891  298,427  622,318 
P. Verma 143,255  65,703  208,958 
K. Hicks* 481,135  1,018,713  1,499,848 
*Due to Mr. Hicks’ retirement in 2015, he earned the pro rata portion of his long-term incentive award for the 2014-15 performance measurement period, as shown in the table, and this amount will be paid to him at the same time as the payouts to the other named executive officers in 2017.

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Executive Compensation

 Payout in 2019 Payout in 2020 
   LTIP 2017-18 
   Performance PeriodTotal
 Annual Bonus Plan (Cash Payout Earned—As Shown in Summary
 Cash Payment for 2018 Payable in 2020)Compensation Table
Name($) ($)($)
R. Johnson1,859,000 N/A1,859,000
L. Peters427,781 —427,781
S. Jacobs1,336,200 —1,336,200
L. Kimble— ——
P. Verma348,562 —348,562

 

II—Cash Incentive Payouts for 20142016

 

Payout in 2017 Payout in 2018 
 Payout in 2015 Payout in 2016    LTIP 2015-16 
   LTIP    Performance PeriodTotal
   2013-14 Performance Period TotalAnnual Bonus Plan (Cash Payout Earned—As Shown in Summary
 Annual Bonus Plan (Cash Payout Earned— As Shown in SummaryCash Payment for 2016 Paid in 2018)Compensation Table
Name Cash Payment for 2014 ($) Paid in 2016) ($) Compensation Table ($)($) ($)
R. Johnson 1,063,990  626,219  1,690,209 1,301,738 1,298,1942,599,932
L. Peters 496,510 265,650 762,160 393,514 320,574714,088
R. McHugh 591,389 316,365 907,754 
J. Berk 332,441 235,957 568,398 
S. Jacobs521,867 430,371952,238
L. Kimble318,018 317,244635,262
P. Verma — — — 184,039 176,213360,252
K. Hicks 1,828,844 1,239,700 3,068,544 

 

III—Cash Incentive Payouts for 2013

  Payout in 2014 Payout in 2015   
     LTIP   
     2012-13 Performance Period Total
  Annual Bonus Plan (Cash Payout Earned— As Shown in Summary
Name Cash Payment for 2013 ($) Paid in 2015) ($) Compensation Table ($)
R. Johnson 660,966  850,000  1,510,966 
L. Peters 346,929  375,000  721,929 
R. McHugh 419,543  476,250  895,793 
J. Berk 242,552  366,393  608,945 
P. Verma —  —  — 
K. Hicks 1,365,375  1,925,000  3,290,375 
(7)Amounts shown(5)The amounts in this column (i) represent the annual change in pension value during each of our last three fiscal years for each of the executives. Please see Pages 59 through 60years. See page 62 for more information on 20152018 pension benefits.

(8)(6)ThisThe amounts in this column includesrepresent perquisites and other compensation attributable to the executives for 2015,2018, valued at the incremental cost to the Company of providing them, which represents the actual cost:
•The amounts shown for financial planning and medical expense reimbursement reflect amounts reimbursed in 2015, which may also include reimbursement of amounts submitted in 2015 for expenses incurred in 2014.
•The amounts shown in the table under the 401(k) Match column represent the Company’s matching contribution under the Foot Locker 401(k) Plan made to the named executive’s account.cost.

 

    Car    Med.                Tax   
 Auto. Service Univ. Life Expense Exec. Supp. LTD Financial 401(k) Relocation Gross   
 Allowance Reimb. Ins. Prem. Reimb. Physical Ins. Prem. Planning Match Payment Up Total
Name($) ($) ($) ($) ($) ($) ($) ($) ($) ($) ($)
R. Johnson13,216  8,743  5,223  3,644  907  6,075  8,945  2,600  —  —  49,353 
L. Peters13,489  —  2,708  1,607  —  —  —  2,600  —  —  20,404 
R. McHugh12,316  —  —  5,735  —  —  —  2,600  —  —  20,651 
J. Berk933  —  —  3,394  —  —  —  —  —  —  4,327 
P. Verma—  —  —  892  —  —  —  —  49,113  30,983  80,988 
K. Hicks4,893  11,432  —  3,589  —  6,257  8,945  2,600  —  —  37,716 

 

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53

Executive Compensation

The amounts shown under Universal Life Insurance Premium and Financial Planning reflect the total amounts paid, including fees.

The amounts shown under Medical Expense Reimbursement reflect amounts reimbursed in 2018, which may also include reimbursement of amounts submitted in 2018 for expenses incurred in 2017.

The amounts shown under 401(k) Match reflect the Company’s matching contribution under the Foot Locker 401(k) Plan made to the NEO’s account.

For Mr. Kimble, the amounts shown under Foreign Earnings and Expatriate Tax Payments reflect expatriate compensation for 2018 in his position as Executive Vice President and Chief Executive Officer—International in Vianen, The Netherlands. Under Foreign Earnings, the amount shown includes expatriate benefits and allowances for certain goods and services differential, housing, automobile costs, and tax preparation assistance in connection with his international assignment. Mr. Kimble received the majority of these benefits and allowances under the IAP, which applies to employees on international assignment and is designed to minimize any financial detriment or gain to the employee from the assignment. Under Expatriate Tax Payments, the amount shown includes tax equalization payments, and U.S. and foreign tax payments net of hypothetical tax deductions, in connection with his international assignment. These payments are made under the IAP and are designed to facilitate these assignments by holding these employees responsible for the tax liabilities they would have incurred had they remained in their home countries. The amount reported under Expatriate Tax Payments represents the sum of the actual tax payments and other tax items associated with his assignment less his hypothetical tax withholding.

  Car Med.Supp.   Expatriate 
 Auto.ServiceUniv. LifeExpenseLTD Ins.Financial401(k)ForeignTax 
 Allow.Reimb.Ins. Prem.Reimb.Prem.PlanningMatchEarningsPaymentsTotal
Name($)($)($)($)($)($)($)($)($)($)
R. Johnson4,84528,8724,9276,9333,66210,6122,750–—62,601
L. Peters3,963–2,7633,928––2,750–—13,404
S. Jacobs15,975––5,255––2,750–—23,980
L. Kimble––3,581766–––14,2431,296,0131,314,603
P. Verma18,161–2,8704,7783,31413,391––—42,514

The Company has established a trust for certain benefit plans, arrangements, and agreements, including the SERP, the Foot Locker Excess Cash Balance Plan, the executive employment agreements, and other benefit plans, agreements or arrangements that may be covered at a later date (collectively, the “Benefit Obligations”). Upon the occurrence of a Potential Change in Control of the Company as defined in the trust agreement, the Company is required to fund the trust with an amount sufficient to pay the total amount of the Benefit Obligations. Following the occurrence, and during the pendency, of a Potential Change in Control, the trustee would be required to make payments of Benefit Obligations to the extent these payments are not made by the Company.

 

Employment Agreements

 

We have employment agreements with each of the named executive officers,NEOs, and we describe the material terms of each of these agreements below. We had an employment agreement with Mr. Hicks prior to his retirement. Information on estimated potential payments and benefits upon termination of the agreements is described underPotential Payments Upon Termination or Change in Control, beginning on Page 63.page 65.

 

Richard A. Johnson

 

Position.We entered intohave an employment agreement with Mr. Johnson on November 6, 2014 in connection with his promotion to serveposition as our Chief Executive Officer.

 

Term.The term of this agreement began on December 1, 2014 and ends on January 31, 2018.2021. The agreement contains an “evergreen” renewal provision that provides for additional one-year renewals of the employment term, unless either party gives notice of non-renewal one year prior to the end of the then-current term.

 

Base Salary and Bonus.During the term of the agreement, the Company shall pay Mr. Johnson an annual base salary of not less than $1,000,000. Mr. Johnson’s 20152018 base salary rate was $1,050,000.$1,100,000. As Chief Executive Officer, for 2018, Mr. Johnson’s annual bonus at target under the Annual Bonus Plan is 125%was 200% of his base salary, and his annual bonus at target under the LTIP is 175%was 250% of his base salary at the start of the performance period.

Stock Awards.Mr. Johnson’s agreement provided for certain restricted stock and stock option awards effective December 1, 2014, with vesting subject to his continued employment with the Company.

 

Benefit Plans and Perquisites.Mr. Johnson is entitled to participate in all bonus, incentive, and equity plans offered to senior executives. He is also eligible to participate in all pension, welfare,executives, including company-paid life insurance, long-term disability coverage, and fringe benefit plansreimbursement for certain medical, transportation, and perquisites offered to senior executives. The benefits and perquisites available to Mr. Johnson include:financial planning expenses.

•Company-paid life insurance in the amount of his annual base salary;
•Long-term disability insurance coverage of $25,000 per month;
•Annual out-of-pocket medical expense reimbursement of up to $7,500;
•Reimbursement for financial planning expenses of up to $9,000 per year; and
•Automobile expense reimbursement for up to $40,000 annually and reimbursement of reasonable expenses for car service for transportation within the New York metropolitan area.

 

Non-Compete Provision.Mr. Johnson’s agreement provides that he may not compete with the Company or solicit our employees for two years following the termination of his employment agreement.

 

Certain Defined Terms in the Agreement:

“Cause”means with regard to Mr. Johnson:

•his refusal or willful failure to substantially perform his duties;

54

    Foot Locker, Inc. 
•his dishonesty, willful misconduct, misappropriation, breach of fiduciary duty or fraud with regard to the Company, its business or assets;
•his willful breach of any material provision of the agreement, which is not cured; or
•his conviction of a felony (other than a traffic violation) or any other crime involving moral turpitude.

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Executive Compensation

“Change in Control”means any of the following:

•the Company merges with another company or sells all (or substantially all) of its assets. This event would exclude, for example, mergers (or similar transactions) in which shareholders of the Company prior to the transaction continue to represent a majority of the stock outstanding after the transaction;
•the acquisition of 35% or more of the outstanding stock; or
•during any period of not more than 12 months, the directors at the start of the period, plus any new director whose election or nomination for election was approved by at least two-thirds of the directors then remaining on the Board who either were directors at the beginning of the period or whose election or nomination was approved in this manner, do not comprise at least a majority of the Board.

 

“Good Reason”means,

Executive Compensation

 

•prior to a Change in Control, (A) a reduction in his rate of base salary, other than a reduction that occurs in connection with, and in the same percentage as, an across-the-board reduction over any 3-year period in the base salaries of all senior executives and where the reduction is less than 20% of his base salary; or (B) a material and adverse change in the nature and status of his authority or responsibilities.
•on or after a Change in Control, (A) a reduction in his rate of base salary; (B) a failure to continue, or a reduction in, the benefits applicable to him without providing a substitute plan(s) providing materially similar benefits; or (C) any material demotion or reduction in his authority or responsibility.
•at any time, (A) a reduction in his annual bonus classification level; (B) any successor’s failure to assume in writing the Company’s obligations under the agreement; or (C) the Company’s failure to renew the agreement.

Certain Defined Terms. Mr. Johnson’s agreement includes definitions of certain terms such as “Cause” (i.e., for Mr. Johnson’s dismissal), “Good Reason” (i.e., for Mr. Johnson’s resignation), and “Change in Control” (which includes, among other things, the acquisition of 35% or more of the Company’s outstanding stock).

 

Lauren B. Peters, Robert W. McHugh, Jeffrey L. Berk, and Pawan VermaOther NEOs

 

Position/Term/Base Salary.We have substantially identical employment agreements (except as described below related to Mr. Verma) with these executives in their current positions, as follows:

 

  Current Base
Current Term2015 BaseSalary Rate
NamePositionEnd DateSalary Rate ($)
L. PetersExecutive Vice President and Chief Financial Officer1/31/20172020605,000675,000
R. McHughS. JacobsExecutive Vice President—Operations SupportPresident and Chief Executive Officer—North America1/31/20172020673,000850,000
J. BerkL. KimbleSeniorExecutive Vice President—Real EstatePresident and Chief Executive Officer—Asia Pacific1/31/20172020488,524650,000
P. VermaSeniorExecutive Vice President and Chief Information and Customer Connectivity Officer1/31/20182020450,000550,000

 

The terms of the agreements will automatically be extended for another year unless notice of non-renewal is given by the October 31 prior to the then-current expiration of the term. We pay these executives annual base salaries at rates not less than their salaries at the start of their agreements. The executives’ base salaries for 20152018 are shown in the table above.

 

Special Provisions Related to P. Verma’s Employment Agreement:

Sign-On Equity Awards.Mr. Verma was granted (i) a time-based restricted stock award having a value of $1.5 million on the date of grant, which will vest over a three-year period in annual installments beginning one year following the date of grant, subject to Mr. Verma’s continued employment (the “Sign-On Restricted Stock Award”); and (ii) a nonstatutory stock option having a Black-Scholes value on the date of grant of $225,000, which will vest over a three-year period in annual installments beginning one year following the date of grant, subject to Mr. Verma’s continued employment (the “Sign-On Stock Option Grant” and, together with the Sign-On Restricted Stock Award, the “Sign-On Equity Awards”).

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Executive Compensation

Annual Bonus.Solely with respect to the 2015 fiscal year, Mr. Verma was eligible to receive a payment equal to the difference between the prorated annual bonus payable to him under the Annual Bonus Plan and the annual bonus that would have been paid to him under the Annual Bonus Plan if he had been a participant in the Annual Bonus Plan for the entire 2015 fiscal year.

Accelerated Vesting.If Mr. Verma’s employment is terminated by the Company without Cause prior to the second anniversary of his employment commencement date, the first two installments of the Sign-On Equity Awards would, to the extent not already vested, vest on his termination date, and the balance of the Sign-On Equity Awards would be cancelled as of the termination date. If Mr. Verma terminates his employment without Good Reason or the Company terminates his employment with Cause prior to the second anniversary of his employment commencement date, Mr. Verma would be obligated to pay to the Company (a) the sign-on bonus and relocation payments he received, (b) the intrinsic value of the vested portion of his Sign-On Stock Option Grant, to the extent exercised either pre- or post-termination, net of taxes withheld by the Company upon exercise, and (c) the value of the vested portion of his Sign-On Restricted Stock Award at vesting, net of taxes that had been withheld by the Company upon vesting. No payment obligation is required if his termination of employment is due to his death or disability.

Benefit Plans and Perquisites.These executives are entitled to participate in all benefit plans and arrangements in effect at the start of the agreement, including retirement plans, Annual Bonus Plan, LTIP, medical, dental, and disability plans, and any other plans subsequently offered to our senior executives.

 

Non-Compete Provision.The executives’ agreements provide that they may not compete with the Company or solicit our employees for two years following the termination of their employment agreements.

 

Certain Defined TermsTerms. The executives’ agreements include definitions of certain terms such as “Cause” (i.e., for the executive’s dismissal), “Good Reason” (i.e., for the executive’s resignation), “Change in Control” (which includes, among other things, the Agreements:acquisition of 35% or more of the Company’s outstanding stock), and “Disability.”

 

“Cause”means each executive’s:

 •2019 Proxy Statement    refusal or willful failure to substantially perform his or her duties;
•dishonesty, willful misconduct, or fraud with regard to the Company’s business or assets;
•willful breach of his or her employment agreement and the executive does not correct the breach; or
•conviction of a felony (other than a traffic violation) or any other crime involving moral turpitude.

55

 

“Change in Control”means any of the following:

 

•the Company merges with another company or sells all (or substantially all) of its assets. This event would exclude, for example, mergers (or similar transactions) in which shareholders of the Company prior to the transaction continue to represent a majority of the stock outstanding after the transaction;
•the acquisition of 35% or more of the outstanding stock; or
•during any period of not more than 12 months, the directors at the start of the period, plus any new director whose election or nomination for election was approved by at least two-thirds of the directors then remaining on the Board who either were directors at the beginning of the period or whose election or nomination was approved in this manner, do not comprise at least a majority of the Board.

 

“Disability”means:

The executive is incapacitated due to physical or mental illness and, as a result, has not performed his or her duties on a full-time basis for six months, and does not return to perform his or her duties after the Company gives notice.

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Executive Compensation

“Good Reason”means:

Prior to a Change in Control,

•a reduction in base salary, other than an across-the-board reduction in senior executive salaries over a three-year period and the reduction is less than 20% of the executive’s salary from the beginning of the three-year period; or
•a material change in the executive’s authority or responsibilities, except temporarily as a result of illness or other absence;

Following a Change in Control,

•any reduction in base salary;
•failure to continue the benefit plans and programs that apply to the executive, or the reduction of his or her benefits, without providing substitute comparable plans and benefits; or
•a material demotion or reduction in executive’s authority or responsibility (except temporarily because of illness or other absence);

At any time,

•a reduction in the executive’s annual bonus classification level, other than in connection with a redesign that affects all other employees in the executive’s bonus level;
•failure by a successor to the Company to confirm in writing that it will assume the Company’s obligations under the agreement; or
•failure by the Company to renew the agreement.

Ken C. Hicks

Prior to his retirement, we had an employment agreement with Mr. Hicks substantially in the same form as Mr. Johnson’s agreement.

Position and Term.In connection with his retirement as part of a planned succession process, Mr. Hicks’s amended employment agreement provided that Mr. Hicks would serve as Executive Chairman until his planned retirement on May 20, 2015.

Base Salary and Bonus.Mr. Hicks’ annual base salary was $950,000 in his position as Executive Chairman. His annual bonus at target under the Annual Bonus Plan was 125% of his base salary, and his bonus at target under the LTIP was 175% of his base salary for performance periods prior to 2015-16. Mr. Hicks did not participate in the LTIP beginning with the 2015-16 performance period.

Benefit Plans and Perquisites.Mr. Hicks was entitled to participate in all bonus, incentive, and equity plans offered to senior executives. He was also eligible to participate in all pension, welfare, and fringe benefit plans and perquisites offered to senior executives. The benefits and perquisites available to Mr. Hicks included:

•Company-paid life insurance in the amount of his annual base salary;
•Long-term disability insurance coverage of $25,000 per month;
•Annual out-of-pocket medical expense reimbursement of up to $7,500;

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Executive Compensation

•Financial planning expenses of up to $7,500 annually, as adjusted for adviser fee increases;
•Reimbursement of up to $15,000 for legal fees in connection with his employment agreement; and
•Automobile expense reimbursement for up to $40,000 annually and reimbursement of reasonable expenses for car service for transportation within the New York metropolitan area.

Non-Compete Provision.Mr. Hicks’ agreement provided that he may not compete with the Company or solicit our employees for two years following the termination of his employment agreement.

Certain Defined Terms in the Agreement:

“Cause”means with regard to Mr. Hicks:

•his refusal or willful failure to substantially perform his duties;
•his dishonesty, willful misconduct, misappropriation, breach of fiduciary duty or fraud with regard to the Company, its business or assets;
•his willful breach of any material provision of the agreement, which is not cured;
•his conviction of a felony (other than a traffic violation) or any other crime involving moral turpitude; or
•his willful failure to take lawful and reasonable directions from the Board.

“Change in Control”means any of the following:

•the Company merges with another company or sells all (or substantially all) of its assets. This event would exclude, for example, mergers (or similar transactions) in which shareholders of the Company prior to the transaction continue to represent a majority of the stock outstanding after the transaction;
•the acquisition of 35% or more of the outstanding stock; or
•during any period of not more than 12 months, the directors at the start of the period, plus any new director whose election or nomination for election was approved by at least two-thirds of the directors then remaining on the Board who either were directors at the beginning of the period or whose election or nomination was approved in this manner, do not comprise at least a majority of the Board.

“Good Reason”means, following a Change in Control,

•a material demotion or reduction in Mr. Hicks’ authority or responsibility (except in connection with a termination for Cause or disability or temporarily because of illness or other absence);
•a reduction in his base salary rate;
•a reduction in his annual bonus classification level;
•failure to continue the benefit plans and programs that apply to him, or the reduction of his benefits, without providing substitute comparable plans, programs and benefits;
•failure by a successor company to assume in writing the Company’s obligations under the agreement; or
•the Company breaches a material provision of the agreement and does not correct the breach.

52  |  2016 Proxy Statement

Executive Compensation

 

Grants of Plan-Based Awards Table

 

The following table shows the awards made to the named executive officersNEOs in 20152018 under the Annual Bonus Plan and the LTIP, as well as the AFG awards and RSU and stock option awards under the Stock Incentive Plan:

 

    Estimated Future Payouts Estimated Future Payouts            
    Under Non-Equity Incentive Under Equity Incentive            
    Plan Awards Plan Awards            
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l)
                       All      
                    All Other    Grant
                    Other Option    Date
                    Stock Awards:    Fair
                    Awards: Number of Exercise Value of
                    Number of Securities or Base Stock
                    Shares Under- Price of and
                    of Stock lying Option Option
    Threshold TargetMaximum Threshold Target Maximum or Units Options Awards Awards
Name Grant Date ($) ($)($) (#) (#) (#) (#) (#) ($/Sh) ($)(5)
R. Johnson 03/25/15(1) 328,125  1,312,500 2,296,875                     
  03/25/15(2) 229,688  918,750 1,837,500                     
  03/25/15(2)         3,699  14,793 29,585           918,793 
  03/25/15(3)                    207,900  62.11  3,328,479 
L. Peters 03/25/15(1) 98,313  393,250 688,188                     
  03/25/15(2) 56,719  226,875 453,750                     
  03/25/15(2)         914  3,653 7,306           226,888 
  03/25/15(3)                    32,000  62.11  512,320 
R. McHugh 03/25/15(1) 109,363  437,450 765,538                     
  03/25/15(2) 63,094  252,375 504,750 ��                   
  03/25/15(2)         1,016  4,064 8,127           252,415 
  03/25/15(3)                    32,000  62.11  512,320 
J. Berk 03/25/15(1) 61,066  244,262 427,459                     
  03/25/15(2) 45,799  183,197 366,393                     
  03/25/15(2)         738  2,950 5,900           183,225 
  03/25/15(3)                    16,000  62.11  256,160 
P. Verma 08/10/15(1) 27,009  108,036 189,063                     
  08/10/15(2) 10,083  40,333 80,666                     
  08/10/15(2) 31,177  124,708 249,416                     
  08/10/15(2)         138  551 1,102           40,339 
  08/10/15(2)         426  1,704 3,407           124,750 
  08/10/15(3)                    11,346  73.21  225,105 
  08/10/15(4)                 20,490        1,500,073 
K. Hicks 03/25/15(1) 90,712  362,847 634,983                     

2016 Proxy Statement  |  53
  Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards		 Estimated Future Payouts
Under Equity Incentive
Plan Awards		    
(a)(b)(c)(d)(e) (f)(g)(h)(i)( j)(k)(l)
NameGrant DateThreshold
($)		Target
($)		Maximum
($)		 Threshold
(#)		Target
(#)		Maximum
(#)		All
Other
Stock
Awards:
Number of
Shares
of Stock
or Units
(#)		All
Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)		Exercise
or Base
Price of
Option
Awards
($/Sh)		Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(6)
R. Johnson03/28/18(1)550,0002,200,0004,400,000        
 03/28/18(2)    15,35361,412122,823   2,750,029
 04/12/18(3)    27,216108,862217,723   5,000,032
 03/28/18(4)        91,09344.781,124,999
 03/28/18(5)       25,123  1,125,008
L. Peters03/28/18(1)126,563506,2501,012,500        
 03/28/18(2)    3,76915,07430,148   675,014
 04/12/18(3)    4,08316,33032,659   750,037
 04/12/18(3)       5,444  250,043
 03/28/18(4)        20,24344.78250,001
 03/28/18(5)       5,583  250,007
S. Jacobs03/28/18(1)212,500850,0001,700,000        
 03/28/18(2)    4,74618,98237,964   850,014
 04/12/18(3)    6,12424,49448,988  1,125,009
 04/12/18(3)       8,165  375,018
 03/28/18(4)        20,24344.78250,001
 03/28/18(5)       5,583  250,007
L. Kimble03/28/18(1)121,875487,500975,000        
 03/28/18(2)    2,72210,88721,774   487,520
 04/12/18(3)    4,08316,33032,659   750,037
 04/12/18(3)       5,444  250,043
 03/28/18(4)        18,21944.78225,005
 03/28/18(5)       5,025  225,020
P. Verma03/28/18(1)68,750275,000481,250        
 03/28/18(2)    2,3039,21218,424   412,513
 04/12/18(3)    3,06212,24724,494   562,505
 04/12/18(3)       4,083  187,532
 03/28/18(4)        12,14644.78150,003
 03/28/18(5)       3,350  150,013

Executive Compensation

 

Notes to Grants of Plan-Based Awards Table

 

(1)(1)Annual Incentive Awards

Amounts shown reflect the payment levels at threshold, target, and maximum performance for the 20152018 fiscal year under the Annual Bonus Plan and reflect the potential amounts that would be paid at the end of the period if the applicable performance goals were achieved. The estimated bonus payouts are based on a percentage of the executive’s base salary, as shown in the table below:

 

Name Threshold Target Maximum
R. Johnson  31.25%   125%   218.75% 
L. Peters  16.25%   65%   113.75% 
R. McHugh  16.25%   65%   113.75% 
J. Berk  12.5%   50%   87.5% 
P. Verma  12.5%   50%   87.5% 
K. Hicks  31.25%   125%   218.75% 
NameThresholdTargetMaximum
R. Johnson50%200%400%
L. Peters, L. Kimble and P. Verma18.75%75%150%
S. Jacobs25%100%200%

 

The amounts shown for Mr. Verma are pro rated, as he commenced employment on August 10, 2015; the amounts shown for Mr. Hicks are pro rated, as he retired on May 20, 2015.

56

    Foot Locker, Inc.

Executive Compensation

The annual bonus payments actually made to the named executive officersNEOs for 20152018 are shown in Note 64 to the Summary Compensation Table on Pages 46 through 47.page 53.

 

(2)LTIP Awards

Provided the performance goals for the 2015-162018-19 long-term performance measurement period are achieved, the payout structure of the executives’ awards is as follows: (a) 50% of the award would be payable in cash under the LTIP, (b) 50%100% of the award would be payable in RSUs, under the Stock Incentive Plan, and (c) both the cash portion and the stock portion of(b) the payout would be subject to a time-based, one-year vesting period following the end of the performance measurement period before payout to the executives. The amounts shown in the table reflect the estimated payment levels in cash and number of RSUs at threshold, target, and maximum performance for the 2015-16 performance measurement period. Columns (c), (d), and (e) show the estimated cash payments and columns (f), (g), and (h) show the number of RSUs that would be paid out at threshold, target, and maximum performance if the applicable performance goals are achieved. The amounts shown for Mr. Verma are pro rated, as he commenced employment on August 10, 2015, and reflect amountsachieved for the 2014-15 and 2015-16 long-term2018-19 performance measurement periods.period.

 

The threshold, target, and maximum number of RSUs for each executive was calculated on the grant date of grant on the basis of that day’s closing stock price of a share of Common Stock. The closing price on the grant date of March 25, 201528, 2018 for each of the named executive officersNEOs was $62.11. The closing price on the grant date of August 10, 2015 for Mr. Verma was $73.21.$44.78. Similarly, the grant date fair valuesvalue of the RSU awards are based on the closing stock price on thesethis grant dates.date. The actual number of RSUs paid out will be based on the Company’s performance compared to targets. The value of the RSUs received by an executive will depend upon the Company’s stock price on the payment date in 2018.2021. No dividends are paid or accrued for the RSUs.

 

The aggregate payout in cash and stock at threshold, target, and maximum performance for each of the named executive officersNEOs is based on a percentage of the executive’s base salary in the first year of the performance period, adjusted for promotion-related salary increases. The percent of base salary for each executive at threshold, target, and maximum performance is shown in the table below:

 

Name Threshold Target Maximum
R. Johnson  43.75%   175%   350% 
L. Peters  18.75%   75%   150% 
R. McHugh  18.75%   75%   150% 
J. Berk  18.75%   75%   150% 
P. Verma  18.75%   75%   150% 
NameThresholdTargetMaximum
R. Johnson62.5%250%500%
L. Peters and S. Jacobs25%100%200%
L. Kimble and P. Verma18.75%75%150%

 

No amounts would be paid to the executives under the LTIP awards unless the performance goals for the performance measurement period are achieved.

 

(3)AFG Awards

The AFG Award is a special long-term incentive equity award covering a three-year performance period—2018-20. The payout structure of the executives’ awards is as follows: (a) for Mr. Johnson, 100% of the award is in the form of PBRSUs, and he would earn a payout following the end of the performance period only if the performance goals are achieved, and (b) for the other NEOs, 75% of the award is in the form of PBRSUs and 25% is in the form of time-based RSUs, payable following the end of the performance period, subject to the achievement of the performance goals with regard to the PBRSUs.

The threshold, target, and maximum number of RSUs for each executive was calculated on the grant date on the basis of that day’s closing stock price of a share of Common Stock. The closing price on the grant date of April 12, 2018 for each of the NEOs was $45.93. Similarly, the grant date fair value of the RSU awards are based on the closing stock price on this grant date. The actual number of RSUs paid out will be based on the Company’s performance compared to targets. The value of the RSUs received by an executive will depend upon the Company’s stock price on the payment date in 2021. No dividends are paid or accrued for the RSUs.

The percentage of achievement of the performance goals at the end of the performance period will be applied to the target number of PBRSUs granted to each of the executives to determine the actual number of PBRSUs that may be earned. If the threshold performance goals are not met, no PBRSUs will be earned or paid out to any executive.

The amounts shown in the table below reflect the estimated payment levels at threshold, target, and maximum performance for the 2018-20 performance measurement period.

 ThresholdTargetMaximum
Name($)($)($)
R. Johnson1,250,0005,000,00010,000,000
L. Peters and L. Kimble187,500750,0001,500,000
S. Jacobs281,2501,125,0002,250,000
P. Verma140,625562,5001,125,000

The amounts shown in the table represents the number of time-based RSUs awarded under the Stock Incentive Plan on the grant date. The award will vest according to the schedule below, provided that the executive remains employed by the Company through the vesting date. No dividends are paid or accrued for RSU awards.

Shares
NameGrant Date(#)Vest Date
L. Peters and L. Kimble04/12/185,44403/24/21
S. Jacobs04/12/188,16503/24/21
P. Verma04/12/184,08303/24/21

2019 Proxy Statement    

57

Executive Compensation

(4)Stock Option Grants

The amounts in column (j) reflect the number of stock options granted in 20152018 under the Stock Incentive Plan. The exercise price reflected in column (k) is equal to the closing price of a share of Common Stock on the grant date. In general, no portion of any

54  |  2016 Proxy Statement

Executive Compensation

stock option may be exercised until the first anniversary of its date of grant.grant date. Vested options may be exercised for ten years following the grant date, of grant, unless the option is cancelled or exercised sooner. If the executive retires, becomes disabled, or dies while employed by the Company or one of its subsidiaries, all unexercised options that are then exercisable, plus those options that would have become exercisable on the next anniversary of the grant date, will remain (or become) exercisable as of that date. For optionsOptions granted prior to May 21, 2014, outstanding options will become immediately exercisable upon the occurrence of a Change in Control. For options granted after May 21, 2014, outstanding options2018 will become exercisable upon a participant’s termination of employment on or within 24 months following a Change in Control. In general, options may remain exercisable for up to three years following a participant’s retirement or termination due to disability, and for up to one year for any other termination of employment for reasons other than cause.

 

The vesting schedule for options granted to the executives in 20152018 is as follows:

 

     Vest Date: Vest Date: Vest Date: SharesVest Date: Shares
Name Grant Date Shares (#) Shares (#) Shares (#) Shares (#)Grant Date(#) (#) (#) (#)
R. Johnson 03/25/15 207,900 03/25/16:69,300 03/25/17:69,300 03/25/18:69,30003/28/1891,09303/28/19:30,36403/28/20:30,36403/28/21:30,365
L. Peters 03/25/15 32,000 03/25/16:10,666 03/25/17:10,667 03/25/18:10,667
R. McHugh 03/25/15 32,000 03/25/16:10,666 03/25/17:10,667 03/25/18:10,667
J. Berk 03/25/15 16,000 03/25/16:5,333 03/25/17:5,333 03/25/18:5,334
L. Peters and S. Jacobs03/28/1820,24303/28/19:6,74703/28/20:6,74803/28/21:6,748
L. Kimble03/28/1818,21903/28/19:6,07303/28/20:6,07303/28/21:6,073
P. Verma 08/10/15 11,346 08/10/16:3,782 08/10/17:3,782 08/10/18:3,78203/28/1812,14603/28/19:4,04803/28/20:4,04903/28/21:4,049

 

(4)Restricted Stock(5)RSUs

The amounts shown in the table under column (i) represent the number of shares of restricted stock granted to Mr. VermaRSUs awarded under the Stock Incentive Plan. This restricted stockPlan on the grant date. The award will vest in equal annual installments beginning one year followingaccording to the date of grant,schedule below, provided that Mr. Verma continues to be in service withthe executive remains employed by the Company untilthrough the applicable vesting dates. Mr. Verma has the right to receive all regular cashdate. No dividends payable after the date of grant to all record holders of our Common Stock. The grant date fair value of the restricted stock award shown in column (l) includes expected dividend payments on the shares.are paid or accrued for RSU awards.

 

(5)Shares
NameGrant Date(#)Vest Date
R. Johnson03/28/1825,12303/28/21
L. Peters and S. Jacobs03/28/185,58303/28/21
L. Kimble03/28/185,02503/28/21
P. Verma03/28/183,35003/28/21

(6)Grant Date Fair Value

The amounts shown in column (l) reflect the aggregate grant date fair value of the restricted stock, RSU and stock option awards granted in 2015,2018, calculated in accordance with stock-based compensation accounting rules (FASB ASC Topic 718).rules. A discussion of the assumptions used in computing the award values may beare found in Note 2221 to our financial statements in our 20152018 Annual Report on Form 10-K. As provided under the SEC’s rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions and include, where applicable, expected dividend payments at the same rate as paid on our shares of Common Stock. For option awards, the value is calculated by multiplying the Black-Scholes value by the number of options granted. For restricted stock,RSUs, the fair value is calculated by multiplying the closing price of our Common Stock on the NYSE on the award date by the number of sharesRSUs granted. For the PBRSUs and the performance-based RSUs awardedportion of the AFG Awards granted under the Stock Incentive Plan, in connection with the 2015-16 long-term2018-19 and the 2018-20 performance measurement period,periods, respectively, the fair value is calculated based upon the probable outcome of meeting the performance conditions at the target performance level and multiplying the number of units that would be received at that level by the closing price of a share of our Common Stock on the grant date. This is consistent with the estimate of the aggregate compensation cost to be recognized over the service period determined at the grant date under FASB ASC Topic 718.stock-based compensation accounting rules. All of these values are shown in the table below.

 

   AFG
Black-ScholesLTIPTime-BasedAFG PBRSUTime-Based
Value for StockPBRSU AwardsRSU AwardsAwardsRSU Awards
Options Granted onGranted on
March 28, 2018April 12, 2018
Name Black-Scholes
Value for
Stock Options
Granted on
March 25, 2015
($)		 Black-Scholes
Value for
Stock Options
Granted on
August 10, 2015
($)		 Restricted
Stock Awards
Granted on
August 10, 2015
($)		 Performance-
Based RSU
Awards
Granted on
March 25, 2015
($)		 Performance-
Based RSU
Awards
Granted on
August 10, 2015
($)		($)
R. Johnson 16.01  —  —  62.11  — 12.3544.7845.93—
L. Peters 16.01 — — 62.11 — 12.3544.7845.93
R. McHugh 16.01 — — 62.11 — 
J. Berk 16.01 — — 62.11 — 
S. Jacobs12.3544.7845.93
L. Kimble12.3544.7845.93
P. Verma — 19.84 73.21 — 73.21 12.3544.7845.93
K. Hicks — — — — — 

Assuming the maximum performance level, the grant date fair value of the PBRSUs granted for the long-term performance measurement period of 2018-19 would be $5,500,014 for Mr. Johnson; $1,350,027 for Ms. Peters; $1,700,028 for Mr. Jacobs; $975,040 for Mr. Kimble; and $825,027 for Mr. Verma. Assuming the maximum performance level, the grant date fair value of the performance-based AFG awards would be $10,000,017 for Mr. Johnson; $1,500,028 for Ms. Peters; $2,250,019 for Mr. Jacobs; $1,500,028 for Mr. Kimble; and $1,125,009 for Mr. Verma.

 

58

2016 Proxy Statement  |  55    Foot Locker, Inc.
 

Executive Compensation

 

Outstanding Equity Awards at Fiscal Year-End

 

The following table shows the number of outstanding stock options, both vested and unvested, and the number of unvested shares of restricted stock and RSUs held by the named executive officersNEOs at the end of the 20152018 fiscal year:

 

 Option Awards Stock AwardsOption Awards Stock Awards
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)(b)(c)(d)(e)(f) (g)(h)(i)( j)
                 Equity Equity Equity
                 Incentive Incentive IncentiveIncentive Plan
               Equity Plan Awards: Plan Awards: MarketPlan Awards:Awards: Market
     Equity         Incentive Market orNumber of NumberValue ofNumber ofor Payout Value
     Incentive         Plan Awards: PayoutSecurities of SharesShares orUnearnedof Unearned
 Number of Number of Plan Awards:       Market Number of Value ofUnderlying or UnitsUnits ofShares, Units
 Securities Securities Number of     Number Value of Unearned UnearnedUnexercisedOption of StockStockor Other Rights
 Underlying Underlying Securities     of Shares Shares or Shares, Shares,OptionsUnearnedExerciseOption That HaveThat Have Not
 Unexercised Unexercised Underlying     or Units Units of Units or Units or(#)OptionsPriceExpiration Not VestedVested
 Options Options Unexercised Option   of Stock Stock Other Rights Other Rights
 (#) (#) Unearned Exercise Option That Have That Have That Have That Have
 Exercisable Unexercisable Options Price Expiration Not Vested Not Vested Not Vested Not Vested
Name (1) (1) (#) ($) Date (#)(2) ($)(3) (#)(2) ($)(3)Exercisable(1)Unexercisable(1)(#)($)Date (#)(2)($)(3)(#)(2)($)(3)
R. Johnson  20,000   —   —   23.42   03/28/2017   —   —   —   — 80,000—15.1003/23/2020 —
  20,000   —   —   18.80   07/30/2017   —   —   —   — 
  10,000   —   —   11.66   03/26/2018   —   —   —   — 
  25,000   —   —   9.93   03/25/2019   —   —   —   — 80,000—18.8403/23/2021 —
  80,000   —   —   15.10   03/23/2020   —   —   —   — 49,000—30.9203/21/2022 —
  80,000   —   —   18.84   03/23/2021   —   —   —   — 47,000—34.2403/28/2023 —
  49,000   —   —   30.92   03/21/2022   —   —   —   — 37,000—45.0803/26/2024 —
  31,333   15,667   —   34.24   03/28/2023   —   —   —   — 55,000—56.3512/01/2024 —
  12,333   24,667   —   45.08   03/26/2024   —   —   —   — 207,900—62.1103/25/2025 —
  18,333   36,667   —   56.35   12/01/2024   —   —   —   — 92,92046,460—63.7903/23/2026 —
  —   207,900   —   62.11   03/25/2025   —   —   —   — 47,06994,138—72.8303/22/2027 —
  —   —   —   —   —   60,000   4,053,600   —   — —91,093—44.7803/28/2028 —
  —   —   —   —   —   18,520   1,251,211   —   — — 25,1231,383,272—
  —   —   —   —   —   17,190   1,161,356   —   — — —9,440519,766
  —   —   —   —   —   —   —   21,736   1,468,484 — —15,353845,336
  —   —   —   —   —   —   —   29,585   1,998,763 — —27,2161,498,513
L. Peters  20,000   —   —   23.42   03/28/2017   —   —   —   — 40,000—24.7505/26/2021 —
  25,000   —   —   11.66   03/26/2018   —   —   —   — 44,000—30.9203/21/2022 —
  25,000   —   —   9.93   03/25/2019   —   —   —   — 42,000—34.2403/28/2023 —
  40,000   —   —   24.75   05/26/2021   —   —   —   — 34,000—45.0803/26/2024 —
  44,000   —   —   30.92   03/21/2022   —   —   —   — 32,000—62.1103/25/2025 —
  28,000   14,000   —   34.24   03/28/2023   —   —   —   — 19,0069,504—63.7903/23/2026 —
  11,333   22,667   —   45.08   03/26/2024   —   —   —   — 10,69721,396—72.8303/22/2027 —
  —   32,000   —   62.11   03/25/2025   —   —   —   — —20,243—44.7803/28/2028 —
  —   —   —   —   —   20,000   1,351,200   —   — — 18,8121,035,789—
  —   —   —   —   —   7,759   524,198   —   — — 5,583307,400—
  —   —   —   —   —   —   —   7,657   517,307 — 5,444299,747—
  —   —   —   —   —   —   —   7,306   493,593 — —1,73895,694
R. McHugh  80,000   —   —   15.10   03/23/2020   —   —   —   — 
— —3,769207,521
— —4,083224,810
S. Jacobs8,000—34.2403/28/2023 —
  80,000   —   —   18.84   03/23/2021   —   —   —   — 12,667—45.0803/26/2024 —
  44,000   —   —  ��30.92   03/21/2022   —   —   —   — 13,600—56.3512/01/2024 —
  28,000   14,000   —   34.24   03/28/2023   —   —   —   — 21,000—62.1103/25/2025 —
  11,333   22,667   —   45.08   03/26/2024   —   —   —   — 19,0069,504—63.7903/23/2026 —
  —   32,000   —   62.11   03/25/2025   —   —   —   — 10,69721,396—72.8303/22/2027 —
  —   —   —   —   —   20,000   1,351,200   —   — —20,243—44.7803/28/2028 —
  —   —   —   —   —   9,240   624,254   —   — — 23,5151,294,736—
  —   —   —   —   —   —   —   9,120   616,147 — 5,583307,400—
  —   —   —   —   —   —   —   8,127   549,060 — 8,165449,565—
J. Berk  20,000   —   —   23.42   03/28/2017   —   —   —   — 
— —2,189120,526
— —4,746261,315
— —6,124337,187
L. Kimble19,000—45.0803/26/2024 —
21,000—62.1103/25/2025 —
  25,000   —   —   11.66   03/26/2018   —   —   —   — 19,0069,504—63.7903/23/2026 —
  40,000   —   —   18.84   03/23/2021   —   —   —   — 9,62819,256—72.8303/22/2027 —
  22,000   —   —   30.92   03/21/2022   —   —   —   — —18,219—44.7803/28/2028 —
  14,000   7,000   —   34.24   03/28/2023   —   —   —   — — 15,677863,176—
  5,666   11,334   —   45.08   03/26/2024   —   —   —   — — 5,025276,677—
  —   16,000   —   62.11   03/25/2025   —   —   —   — — 5,444299,747—
  —   —   —   —   —   6,892   465,624   —   — — —1,25669,155
  —   —   —   —   —   —   —   6,620   447,247 — —2,722149,873
  —   —   —   —   —   —   —   5,900   398,604 — —4,083224,810
P. Verma  —   11,346   —   73.21   08/10/2025   —   —   —   — 11,346—73.2108/10/2025 —
  —   —   —   —   —   6,830   461,435   —   — 9,5034,752—63.7903/23/2026 —
  —   —   —   —   —   6,830   461,435   —   — 4,8149,628—72.8303/22/2027 —
  —   —   —   —   —   6,830   461,435   —   — —12,146—44.7803/28/2028 —
  —   —   —   —   —   —   —   898   60,669 — 43,0302,369,232—
  —   —   —   —   —   —   —   3,407   230,177 — 3,350184,451—
K. Hicks  200,000   —   —   10.10   08/25/2019   —   —   —   — 
  300,000   —   —   15.10   03/23/2020   —   —   —   — — 4,083224,810—
  400,000   —   —   18.84   03/23/2021   —   —   —   — — —2,303126,803
  —   —   —   —   —   36,207   2,446,145   —   — — —89849,444
  —   —   —   —   —   —   —   22,598   1,526,721 — —1136,222
— —573,138
— —3,062168,594

 

56  |  20162019 Proxy Statement

59

Executive Compensation

 

Notes to Table on Outstanding Equity Awards at Fiscal Year-End

(1)(1)TheVesting Schedulesfor the options shown in columns (b) and (c) are as follows:

 

 Total    
 Securities UnderlyingVesting Date for 1/3Vesting Date for 1/3Vesting Date for 1/3
NameUnexercised Options (#)Date of Grantof Total Grantof Total Grantof Total Grant
R. Johnson20,00003/28/200703/28/200803/28/200903/28/2010
20,00007/30/200707/30/200807/30/200907/30/2010
10,00003/26/200803/26/200903/26/201003/26/2011
25,00003/25/200903/25/201003/25/201103/25/2012
80,00003/23/201003/23/201103/23/201203/23/2013
80,00003/23/201103/23/201203/23/201303/23/2014
49,00003/21/201203/21/201303/21/201403/21/2015
47,00003/28/201303/28/201403/28/201503/28/2016
37,00003/26/201403/26/201503/26/201603/26/2017
55,00012/01/201412/01/201512/01/201612/01/2017
207,90003/25/201503/25/201603/25/201703/25/2018
630,900
L. Peters20,00003/28/200703/28/200803/28/200903/28/2010
25,00003/26/200803/26/200903/26/201003/26/2011
25,00003/25/200903/25/201003/25/201103/25/2012
40,00005/26/201105/26/201205/26/201305/26/2014
44,00003/21/201203/21/201303/21/201403/21/2015
42,00003/28/201303/28/201403/28/201503/28/2016
34,00003/26/201403/26/201503/26/201603/26/2017
32,00003/25/201503/25/201603/25/201703/25/2018
262,000
R. McHugh80,00003/23/201003/23/201103/23/201203/23/2013
80,00003/23/201103/23/201203/23/201303/23/2014
44,00003/21/201203/21/201303/21/201403/21/2015
42,00003/28/201303/28/201403/28/201503/28/2016
34,00003/26/201403/26/201503/26/201603/26/2017
32,00003/25/201503/25/201603/25/201703/25/2018
312,000
J. Berk20,00003/28/200703/28/200803/28/200903/28/2010
25,00003/26/200803/26/200903/26/201003/26/2011
40,00003/23/201103/23/201203/23/201303/23/2014
22,00003/21/201203/21/201303/21/201403/21/2015
21,00003/28/201303/28/201403/28/201503/28/2016
17,00003/26/201403/26/201503/26/201603/26/2017
16,00003/25/201503/25/201603/25/201703/25/2018
161,000
P. Verma11,34608/10/201508/10/201608/10/201708/10/2018
11,346
K. Hicks200,00008/25/200908/25/201008/25/201108/25/2012
300,00003/23/201003/23/201103/23/201203/23/2013
400,00003/23/201103/23/201203/23/201303/23/2014
900,000    
 Unexercised OptionsVesting Date for 1/3Vesting Date for 1/3Vesting Date for 1/3
Name(#)Grant Dateof Total Grantof Total Grantof Total Grant
R. Johnson80,00003/23/201003/23/201103/23/201203/23/2013
80,00003/23/201103/23/201203/23/201303/23/2014
49,00003/21/201203/21/201303/21/201403/21/2015
47,00003/28/201303/28/201403/28/201503/28/2016
37,00003/26/201403/26/201503/26/201603/26/2017
55,00012/01/201412/01/201512/01/201612/01/2017
207,90003/25/201503/25/201603/25/201703/25/2018
139,38003/23/201603/23/201703/23/201803/23/2019
141,20703/22/201703/22/201803/22/201903/22/2020
91,09303/28/201803/28/201903/28/202003/28/2021
927,580    
L. Peters40,00005/26/201105/26/201205/26/201305/26/2014
44,00003/21/201203/21/201303/21/201403/21/2015
42,00003/28/201303/28/201403/28/201503/28/2016
34,00003/26/201403/26/201503/26/201603/26/2017
32,00003/25/201503/25/201603/25/201703/25/2018
28,51003/23/201603/23/201703/23/201803/23/2019
32,09303/22/201703/22/201803/22/201903/22/2020
20,24303/28/201803/28/201903/28/202003/28/2021
272,846   
S. Jacobs8,00003/28/201303/28/201403/28/201503/28/2016
12,66703/26/201403/26/201503/26/201603/26/2017
13,60012/01/201412/01/201512/01/201612/01/2017
21,00003/25/201503/25/201603/25/201703/25/2018
28,51003/23/201603/23/201703/23/201803/23/2019
32,09303/22/201703/22/201803/22/201903/22/2020
20,24303/28/201803/28/201903/28/202003/28/2021
136,113
L. Kimble19,00003/26/201403/26/201503/26/201603/26/2017
21,00003/25/201503/25/201603/25/201703/25/2018
28,51003/23/201603/23/201703/23/201803/23/2019
28,88403/22/201703/22/201803/22/201903/22/2020
18,21903/28/201803/28/201903/28/202003/28/2021
115,613
P. Verma11,34608/10/201508/10/201608/10/201708/10/2018
14,25503/23/201603/23/201703/23/201803/23/2019
14,44203/22/201703/22/201803/22/201903/22/2020
12,14603/28/201803/28/201903/28/202003/28/2021
52,189    

 

(2)The vesting dates for the restricted stock and RSU awards shown in columns (g) and (i) are set forth in the table below. The RSU awards shown in column (g)(i) granted in 20132017 were not earned following the end of the 20142018 fiscal year when the Compensation Committee certified the achievement of the performance goals at above-targetbecause threshold performance for the 2013-14 long-term2017-18 performance measurement period and vested in March 2016; the RSU awards shown in column (i) granted in 2014 for the 2014-15 performance period were earned following the end of the 2015 fiscal year when the Compensation Committee

2016 Proxy Statement  |  57

Executive Compensation

certified the achievement of above-target performance for the 2014-15 long-term performance measurement period and will vest in 2017;was not achieved; and the RSU awards shown in column (i) granted in 20152018 will be earned only if the maximumthreshold performance goals for the 2015-162018-19 performance measurement period are achieved and, if earned, will vest in 2018. Due to Mr. Hicks’ retirement in 2015, he earned the pro rata portion 2021.

60

    Foot Locker, Inc.

Executive Compensation

TypeShares/RSUs
NameGrant Dateof his long-term incentive award for the 2014-15 performance measurement period, as shown in the table, and this amount will be paid to him at the same time as the payouts to the other named executive officers in 2017.Award(#)Vesting Date
R. Johnson03/22/2017RSU9,44003/22/2020
03/28/2018RSU15,35303/28/2021
03/28/2018RSU25,12303/28/2021
04/12/2018RSU27,21603/24/2021
L. Peters03/23/2016RSU9,40603/23/2019
03/23/2016RSU9,40603/23/2020
03/22/2017RSU1,73803/22/2020
03/28/2018RSU3,76903/28/2021
03/28/2018RSU5,58303/28/2021
04/12/2018RSU4,08303/24/2021
04/12/2018RSU5,44403/24/2021
S. Jacobs03/23/2016RSU11,75703/23/2019
03/23/2016RSU11,75803/23/2020
03/22/2017RSU2,18903/22/2020
03/28/2018RSU4,74603/28/2021
03/28/2018RSU5,58303/28/2021
04/12/2018RSU6,12403/24/2021
04/12/2018RSU8,16503/24/2021
L. Kimble03/23/2016RSU15,67703/23/2019
03/22/2017RSU1,25603/22/2020
03/28/2018RSU2,72203/28/2021
03/28/2018RSU5,02503/28/2021
04/12/2018RSU4,08303/24/2021
04/12/2018RSU5,44403/24/2021
P. Verma03/22/2017RSU89803/22/2020
09/28/2017RSU21,51509/28/2020
09/28/2017RSU21,51509/28/2021
10/01/2017RSU11310/01/2020
10/01/2017RSU5710/01/2020
03/28/2018RSU2,30303/28/2021
03/28/2018RSU3,35003/28/2021
04/12/2018RSU3,06203/24/2021
04/12/2018RSU4,08303/24/2021

 

NameDate of GrantType of AwardShares/RSUs (#)Vesting Date
R. Johnson03/28/2013RSU17,19003/28/2016
03/26/2014RSU21,73603/26/2017
03/26/2014Restricted Stock60,00003/26/2017
12/01/2014Restricted Stock18,52012/01/2017
03/25/2015RSU29,58503/25/2018
L. Peters03/28/2013RSU7,75903/28/2016
03/26/2014Restricted Stock20,00003/26/2017
03/26/2014RSU7,65703/26/2017
03/25/2015RSU7,30603/25/2018
R. McHugh03/28/2013RSU9,24003/28/2016
03/26/2014Restricted Stock20,00003/26/2017
03/26/2014RSU9,12003/26/2017
03/25/2015RSU8,12703/25/2018
J. Berk03/28/2013RSU6,89203/28/2016
03/26/2014RSU6,62003/26/2017
03/25/2015RSU5,90003/25/2018
P. Verma08/10/2015Restricted Stock6,83008/10/2016
08/10/2015RSU89803/26/2017
08/10/2015Restricted Stock6,83008/10/2017
08/10/2015RSU3,40703/25/2018
08/10/2015Restricted Stock6,83008/10/2018
K. Hicks03/28/2013RSU36,20703/28/2016
03/26/2014RSU22,598*03/26/2017
*Due to Mr. Hicks’ retirement in 2015, he earned the pro rata portion of his long-term incentive award for the 2014-15 performance measurement period, as shown in the table, and this amount will be paid to him at the same time as the payouts to the other named executive officers in 2017.
(3)Value calculated by multiplying the number of unvested shares or units by the closing price of $67.56$55.06 on January 29, 2016,February 2, 2019, which was the last business day of the 20152018 fiscal year. The values shown in columns (h) and (j)( j) for the RSUs are based on:

•●the number of RSUs at above-targetthreshold performance earned for the 2013-142017-18 performance period, which vested in March 2016;
•were not earned following the numberend of RSUs at above-targetthe 2018 fiscal year because threshold performance earned for the 2014-152017-18 performance measurement period which will vest in March 2017;was not achieved; and

•●the number of RSUs that may be earned at maximumthreshold performance for the 2015-162018-19 long-term performance period.

 

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2019 Proxy Statement    

61

Executive Compensation

 

Option Exercises and Stock Vested

The following table provides information on the stock options exercised by the named executive officersNEOs during 20152018 and restricted stock and RSU awards that vested during the year:

 

  Options Awards Stock Awards 
(a) (b) (c) (d) (e) 
  Number of Shares   Number of Shares   
  Acquired on Value Realized Acquired on Value Realized 
Name Exercise(#) on Exercise($) Vesting(#) on Vesting($) 
R. Johnson  —   —   27,491   1,723,686  
L. Peters  65,000   3,225,875   12,129   760,488  
R. McHugh  75,000   3,499,750   15,403   965,768  
J. Berk  50,000   1,736,625   11,850   742,995  
P. Verma  —   —   —   —  
K. Hicks  1,459,333*  56,079,633*  99,258   6,192,027  
*Includes 1,059,333 shares acquired upon exercise by Mr. Hicks after his retirement in 2015.
 Options Awards Stock Awards
(a)(b)(c) (d)(e)
 Number of Shares  Number of Shares 
 Acquired onValue Realized Acquired onValue Realized
 Exerciseon Exercise Vestingon Vesting
Name(#)($) (#)($)
L. Peters25,0001,048,000 ——
P. Verma—— 6,830327,635

 

Pension Benefits

The following table provides the present value of the accumulated benefit payable to each of the named executive officersNEOs and the years of service credited to each of them under the Retirement Plan, the Foot Locker Excess Cash Balance Plan (the “Excess Plan”), and the SERP determined using interest rate and mortality rate assumptions consistent with those used in our 20152018 financial statements:

 

(a) (b) (c) (d) (e)
    Number of Years Present Value of Payments During
    Credited Service Accumulated Benefit Last Fiscal Year
Name Plan Name (#)(1) ($)(1) ($)
R. Johnson Retirement Plan 17  155,347   — 
  Excess Plan 17  486,529     
  SERP 13  1,607,485     
       2,249,361     
L. Peters Retirement Plan 17  165,845   — 
  Excess Plan 17  277,593     
  SERP 14  1,070,905     
       1,514,343     
R. McHugh Retirement Plan 17  151,905   — 
  Excess Plan 17  370,700     
  SERP 11  1,036,917     
       1,559,522     
J. Berk Retirement Plan 18  158,491   — 
  Excess Plan 18  361,734     
  SERP 16  1,576,846     
       2,097,071     
P. Verma Retirement Plan 0  —   — 
  Excess Plan 0  —     
  SERP 1  49,650     
       49,650     
K. Hicks Retirement Plan 6  28,749   1,229 
  Excess Plan 6  —   272,807 
  SERP 7  1,547,256   388,933 
       1,576,005   662,969 
             

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Executive Compensation

(a)(b)(c)(d)(e)
  Number of YearsPresent Value ofPayments During
  Credited ServiceAccumulated BenefitLast Fiscal Year
NamePlan Name(#)(1)($)(1)($)
R. JohnsonRetirement Plan20211,688—
 Excess Plan20787,763 
 SERP162,327,821 
   3,327,272 
L. PetersRetirement Plan20225,859—
 Excess Plan20402,107 
 SERP171,448,356 
   2,076,322 
S. JacobsRetirement Plan19194,499—
 Excess Plan19404,670 
 SERP101,203,269 
   1,802,438 
L. KimbleRetirement Plan39778,509—
 Excess Plan39851,214 
 SERP9752,411 
   2,382,134 
P. VermaRetirement Plan216,530—
 Excess Plan224,613 
 SERP4219,638 
   260,781 

 

Notes to Pension Benefits Table

(1)In general, the present value of accumulated benefits was determined using the same measurement date (January 30, 2016)(February 2, 2019) and assumptions used for financial reporting purposes. Expected retirement age for the Retirement Plan and the Excess Plan is equal to normal retirement age as defined by the plans. For the SERP, the age at which participants become eligible for retirement under the plan is used as the expected retirement age. The following key assumptions were used in calculating the values in the table above:

 

•●ASC 715 discount rate of 4.1% for the Retirement Plan and ASC 715 discount rate of 3.3%3.8% for the Excess Plan and the SERP;

•●Retirement age is assumed to be 65 for the Retirement Plan and the Excess Plan; for the SERP, the retirement age is assumed to be when age plus years of service equals 65 for participants in the plan on May 26, 2011 and, for participants in the SERP after this date, when the participant reaches age 55 with 10 years of service; and

•●Form of payment for the Retirement Plan and the Excess Plan is a lump sum and form of payment for the SERP is 12 quarterly installments.

 

The years of service for the SERP reflect the number of years that the executive has been approved by the Compensation Committee as a participant in that plan. Mr. Verma’s and Mr. Hicks’ years of service under the Retirement Plan and the Excess Plan are less than the number of years of credited service under the SERP because of the requirement that an employee must complete a year of eligibility service before becoming eligible for participation in these plans.

62

    Foot Locker, Inc.

Executive Compensation

 

Defined Benefit Retirement Plans

 

Foot Locker Retirement Plan

The Retirement Plan is a defined benefit plan with a cash balance formula, which covers eligible employees of the Company and substantially all of its U.S. subsidiaries. All qualified employees who are at least 21 years old with one year of service are covered under the Retirement Plan. Plan participants become fully vested in their benefits under this plan generally upon completion of three years of service or upon reaching normal retirement age (age 65) while actively employed.

 

Under the cash balance formula, each participant has an account, for record keeping purposes only, to which credits are allocated annually based upon a percentage of the participant’s W-2 Compensation, as defined in the Retirement Plan. This percentage is determined by the participant’s years of service with the Company as of the beginning of each calendar year. The following table shows the percentages used to determine credits for each of the years of service indicated:

 

Years of ServicePercent of All W-2 Compensation (%)+Percent of W-2 Compensation Over $22,000 (%)
Fewer than 61.10 0.55
6–101.50 0.75
11–152.00 1.00
16–202.70 1.35
21–253.70 1.85
26–304.90 2.45
31–356.60 3.30
More than 358.90 4.45
Years of ServicePercent of All W-2 Compensation (%)+Percent of W-2 Compensation Over $22,000 (%)
< 61.10 0.55
6-101.50 0.75
11-152.00 1.00
16-202.70 1.35
21-253.70 1.85
26-304.90 2.45
31-356.60 3.30
> 358.90 4.45

 

In addition, all balances in the participants’ accounts earn interest at the fixed rate of 6%, which is credited annually. At retirement or other termination of employment, an amount equal to the vested balance then credited to the account under the Retirement Plan is payable to the participant in the form of a qualified joint and survivor annuity (if the participant is married) or a life annuity (if the participant is unmarried). The participant may elect to waive the annuity form of benefit and

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Executive Compensation

receive benefits under the plan upon retirement in an optional annuity form or an immediate or deferred lump sum, or, upon other termination of employment, in a lump sum. Additional optional forms of payment are available to participants who were participating in the Retirement Plan as of December 31, 1995.

 

Foot Locker Excess Cash Balance Plan

The Internal Revenue CodeIRC limits annual retirement benefits that may be paid to, and the compensation that may be taken into account in calculating benefits for, any person under a qualified retirement plan, such as the Retirement Plan. Accordingly, for any person covered by the Retirement Plan whose annual retirement benefit, calculated in accordance with the terms of the Retirement Plan, exceeds the limitations of the Internal Revenue Code,IRC, the Company has adopted the Foot Locker Excess Cash Balance Plan (the “Excess Plan”).Plan. The Excess Plan is an unfunded, nonqualifiednon-qualified benefit plan, under which the individual is paid the difference between the Internal Revenue CodeIRC limitations and the retirement benefit to which he or she would otherwise be entitled under the Retirement Plan.

 

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63

Executive Compensation

Early Retirement Eligibility

The Retirement Plan provides for a reduced benefit payment to a participant who retires after reaching early retirement age but prior to normal retirement age. Early retirement age is defined under the Retirement Plan and the Excess Plan as age 55 with at least 5 years of vesting service. OfAll of the named executive officers,NEOs other than Mr. Johnson, Mr. McHugh, and Mr. BerkVerma are currently eligible for early retirement under these plans. Mr. Hicks was eligible for early retirement under the plans and elected early retirement in 2015.

 

Foot Locker Supplemental Executive Retirement Plan

In addition, the SERP, which is an unfunded, nonqualifiednon-qualified benefit plan, provides for payment by the Company of supplemental retirement, death, and disability benefits to certain executive officers and certain other key employees of the Company and its subsidiaries who participate in this plan. The Compensation Committee sets an annual targeted incentive award under the SERP for each participant consisting of a percentage of salary and bonus based on the Company’s performance against the target. Achievement of the target causes an 8% credit to a participant’s account for that year. The applicable percentage for the year increases or decreases proportionately to the percentage of the Company’s performance in relation to the target, but may not be less than 4% or more than 12% in any year. Participants’ accounts accrue simple interest at the rate of 6% annually.

 

The named executive officersNEOs and fivesix other executive officers of the Company currently participate in the SERP. Participants in the SERP prior to May 26, 2011 are eligible to receive a benefit only if their age plus years of service at retirement equals at least 65. For persons who become participants in the SERP on or after this date, they would be eligible to receive a benefit only if they are at least age 55 at retirement with 10 years of service. Other than Mr. Verma, each of the named executive officersNEOs participated in the SERP on May 26, 2011 and has age plus years of service totaling at least 65. Mr. Verma became a participant in the SERP when he commencedupon his employment commencement date in August 2015 and he is not currently vested in the plan. Mr. Hicks met the age and service requirement at the time of his retirement and has begun receiving a benefit under the plan.

 

If a participant’s employment terminates due to death or disability, hethe participant (or histhe participant’s estate) would be entitled to payment of histhe participant’s SERP balance. A participant’s SERP benefit is paid in 12 quarterly installments following retirement, with the first two quarters payable no earlier than six months following retirement. Upon death or disability, a participant’s SERP benefit is paid in a lump sum. For participants in the plan prior to February 2, 2014, the SERP provides for the continuation of medical and dental insurance benefits if an executive meets the applicable age and service requirements when histhe participants’ employment terminates. The benefits would be substantially the same as those benefits to which senior executives are entitled under the Company’s medical and dental plans for active employees. The terminated executive would be required to pay the insurance premium applicable to actively employed senior executives, including any increases in the premiums, and the Company would pay the difference between the actual premium rate and the active employee rate.

 

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2016 Proxy Statement  |  61    Foot Locker, Inc.
 

Executive Compensation

 

2015 Nonqualified Deferred Compensation

(a) (b) (c) (d) (e) (f)
  Executive Registrant Aggregate Aggregate Aggregate
  Contributions Contributions Earnings Withdrawals/ Balance at
  in Last FY in Last FY in Last FY Distributions Last FYE
Name ($) ($)(1) ($) ($) ($)(2)
R. Johnson  —   1,146,622   —   —   1,772,841 
L. Peters  —   345,145   —   —   610,795 
R. McHugh  —   411,119   —   —   727,484 
J. Berk  —   298,427   —   —   534,384 
P. Verma  —   65,703   —   —   65,703 
K. Hicks  —   1,018,713   —   —   2,258,413 

(1)The amounts shown in column (c) in the table above are reported as 2015 compensation in the Summary Compensation Table and reflect the cash portion of the earned LTIP award for the 2014-15 performance measurement period. The payout of these amounts to the named executive officers is automatically deferred under the terms of the award and will be paid in March 2017, provided the executives, other than Mr. Hicks, continue in service with the Company on the payout date. Due to Mr. Hicks’ retirement in 2015, he earned the pro rata portion of his LTIP award for the 2014-15 performance measurement period shown in the table, and this amount will be paid to him at the same time as the payouts to the other named executive officers in 2017. No earnings are accrued on these amounts.
(2)The aggregate balances shown in column (f) equal the sum of the amounts shown in column (c) for the 2014-15 long-term performance measurement period plus the cash portion of the executives’ earned LTIP awards for the 2013-14 performance measurement period reported as 2014 compensation that was paid out in March 2016, as follows:

Earned Cash LTIP Award
For the 2013-14 Performance Period
NamePaid in March 2016 ($)
R. Johnson626,219
L. Peters265,650
R. McHugh316,365
J. Berk235,957
P. Verma—
K. Hicks1,239,700

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Executive Compensation

Potential Payments Upon Termination or Change in Control

 

The executives’NEOs’ employment agreements and certain of the plans and programs that executivesthe NEOs participate in require the Company to pay compensation to the executivesNEOs if their employment terminates inunder certain circumstances. The estimated amountEstimates of the compensation, benefits, and vesting of restricted stock, RSUs, and stock optionsequity grants that may be payable to the named executive officers followingNEOs upon termination of their employment or change in control, including amounts already vested, is statedare included in the tables below. Other than with regard to Mr. Hicks, who retired on May 20, 2015,These estimates reflect that no LTIP payouts were earned for the 2016-17 or 2017-18 performance measurement periods. The information in the tables assumes a termination date of January 30, 2016.February 2, 2019. At the close of trading on February 2, 2019, our stock price was $55.06 per share.

 

Richard A. Johnson

              Senior  
    Vesting of LTIP   Excess Continuation Executive  
Reason for Severance RS, RSUs and Payout SERP Cash Balance of Health Life  
Termination Payment ($) Options ($) Eligibility ($) Benefit ($) Plan Benefit ($) Benefits ($) Insurance ($) Total ($)
By Company Without Cause or By Executive if Company Breaches Employment Agreement  4,991,278   1,468,484   —   1,680,213   407,251   843,000   —   9,390,226 
   (1)   (2)       (3)   (4)             
Executive Resigns Before End of Term  —   —   —   1,680,213   407,251   843,000   —   2,930,464 
               (3)   (4)             
Following Change in Control: By Executive for Good Reason or By Company Without Cause  4,750,000   20,757,417   2,232,216   1,680,213   407,251   843,000   —   30,670,097 
(6)  (7)   (8)   (9)   (3)   (4)   (5)         
Disability  —   14,864,057   2,232,216   1,680,213   407,251   843,000   —   20,026,737 
       (10)   (11)   (12)   (4)   (5)(13)         
Death  —   14,864,057   2,232,216   1,680,213   407,251   —   1,050,000   20,233,737 
       (10)   (11)   (12)   (4)       (14)     
Retirement  —   9,559,245   2,232,216   1,680,213   407,251   843,000   —   14,721,925 
       (15)   (11)   (3)   (4)   (5)        
Cause  —   —   —   —   407,251   —   —   407,251 
                   (4)             
    Payments  
     Time-Based RSUs,     Excess Cash         
     PBRSUs, and     Balance  Health  Life   
  Severance  Options  SERP  Plan  Benefits  Insurance  Total
Termination Event ($)  ($)  ($)(1)  ($)(2)  ($)(3)  ($)(4)  ($)
R. Johnson                    
By Company w/o Cause 4,084,000(5) 4,625,125(6) 2,449,041  726,666  721,705  —  12,606,537
By Executive For Good Reason 4,084,000(5) 4,625,125(6) 2,449,041  726,666  721,705  —  12,606,537
Resignation —  —  2,449,041  726,666  721,705  —  3,897,412
Change in Control(7) 6,625,000(8) 6,008,398(9) 2,449,041  726,666  721,705  —  16,530,810
Disability —  5,384,104(10) 2,449,041  726,666  721,705  —  9,281,516
Death —  5,384,104(10) 2,449,041  726,666  —  1,100,000  9,659,811
Retirement —  2,002,814(11) 2,449,041  726,666  721,705  —  5,900,226
Cause —  —  —  726,666  —  —  726,666
L. Peters                    
By Company w/o Cause 1,012,500(12) —  1,523,777  345,211  874,219  —  3,755,707
By Executive for Good Reason 1,012,500(12)  69,359(13) 1,523,777  345,211  874,219  —  3,825,066
Resignation —  —  1,523,777  345,211  874,219  —  2,743,207
Change in Control(7) 1,856,250(8) 2,565,768(9) 1,523,777  345,211  874,219  —  7,165,225
Disability —  2,427,029(10) 1,523,777  345,211  874,219  —  5,170,236
Death —  2,427,029(10) 1,523,777  345,211  —  675,000  4,971,017
Retirement —  484,346(11) 1,523,777  345,211  874,219  —  3,227,553
Cause —  —  —  345,211  —  —  345,211
S. Jacobs                    
By Company w/o Cause 1,275,000(12) —  1,265,928  335,514  1,038,844  —  3,915,286
By Executive for Good Reason 1,275,000(12)  69,359(13) 1,265,928  335,514  1,038,844  —  3,984,645
Resignation —  —  1,265,928  335,514  1,038,844  —  2,640,286
Change in Control(7) 2,337,500(8) 3,231,938(9) 1,265,928  335,514  1,038,844  —  8,209,724
Disability —  3,093,199(10) 1,265,928  335,514  1,038,844  —  5,733,485
Death —  3,093,199(10) 1,265,928  335,514  —  850,000  5,544,641
Retirement —  591,934(11) 1,265,928  335,514  1,038,844     3,232,220
Cause —  —  —  335,514  —  —  335,514
L. Kimble(14)                    
By Company w/o Cause 975,000(12) —  791,591  782,368  721,705  —  3,270,664
By Executive for Good Reason 975,000(12) 62,430(13) 791,591  782,368  721,705  —  3,333,094
Resignation —  —  791,591  782,368  721,705  —  2,295,664
Change in Control(7) 1,787,500(8) 2,226,356(9) 791,591  782,368  721,705  —  6,309,520
Disability —  2,101,495(10) 791,591  782,368  721,705  —  4,397,159
Death —  2,101,495(10) 791,591  782,368  —  650,000  4,325,454
Retirement —  362,150(11) 791,591  782,368  721,705  —  2,657,814
Cause —  —  —  782,368  —  —  782,368
P. Verma                    
By Company w/o Cause 825,000(12) —  178,053  15,427  —  —  1,018,480
By Executive for Good Reason 825,000(12) 41,613(13) 178,053  15,427  —  —  1,060,093
Resignation —  —  178,053  15,427  —  —  193,480
Change in Control(7) 1,512,500(8) 3,381,770(9) 178,053  15,427  —  —  5,087,750
Disability —  3,298,523(10) 178,053  15,427  —  —  3,492,003
Death —  3,298,523(10) 178,053  15,427  —  550,000  4,042,003
Cause —  —  —  15,427  —  —  15,427

 

Notes to Table on Richard A. Johnson

(1)This severance amount includes the following items provided for under Mr. Johnson’s employment agreement:
 2019 Proxy Statement    
Salary continuation for 24 months.Payment of the first six months of salary continuation would be made six months following termination, and the remaining payments would then be made on a monthly basis ($2,100,000).
Annual bonus for 2015.Payment of this bonus would be made at the same time as payments are made to other participants in the plan and within two and one-half months following the end of the 2015 fiscal year ($1,719,656).
Cash portion of the LTIP award earned for the 2014-15 performance measurement period.The LTIP award earned for this performance period is payable one-half in cash and one-half in RSUs and is based on the achievement of the performance

65

 

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Executive Compensation

 

goals at the actual payout level. The cash portion of the earned LTIP award for this period would be paid out in March 2017 at the same time as the payouts are made to the other participants ($1,146,622).
Outplacement.The approximate cost of one year of outplacement services ($25,000).
(2)Represents the value of the 21,736 RSUs earned at the actual performance level for the 2014-15 long-term performance period, valued at the closing price ($67.56) of the Common Stock on January 29, 2016. This stock portion of the earned long-term bonus for this period would be paid out in March 2017 at the same time as the payouts are made to the other participants. The actual value of the stock portion of the LTIP award payable to the executive in March 2017 would depend upon the Company’s stock price at that time.
(3)(1)This amount is the total benefit payable under the SERP. TheSERP (other than health benefits reported in the “Health Benefits” column). Upon termination other than due to disability or death, the payments would be made quarterly over a three-year period. Theperiod with the first two quarterly payments would be made on the first day of the calendar quarter that occurs six months following the executive’s termination date, withand the remaining payments made quarterly during the remainder of the three-year period. Upon termination due to disability or death, payments would be made in lump sum following the disability or death.

(4)(2)Benefit payable as of January 30, 2016February 2, 2019 in a lump sum under the Foot Locker Excess Cash Balance Plan six months following the executive’s termination date. No information is provided with respect to the benefit under the Retirement Plan because that plan is available generally to all salaried employees and does not discriminate in terms of scope, terms, or operation in favor of the executive officers.

(5)(3)Executive would be entitled under the SERP to the continuation of medical and dental insurance benefits following termination. The benefits would be substantially the same as those benefits to which senior executives are entitled under the Company’s medical and dental plans for active employees. Executive would be required to pay the insurance premium applicable to actively employed senior executives, including any subsequent increases in the premiums. The amount shown in the table represents the actuarial present value of all future expected post-termination medical and dental benefits.insurance benefits under the SERP and the employment agreements. The benefits provided, and premiums (including any subsequent increases) required to be paid by the executive, would be substantially the same for active employees. The benefit amount assumes the executive does not qualify for disability benefits or other benefits under Medicare.

(4)Senior executive life insurance is payable following death in a lump sum to the executive’s beneficiary.

(5)This severance amount includes the following items provided for under Mr. Johnson’s employment agreement:

Salary continuation for 24 months. Payment of the first twelve months of salary continuation would be made in a lump sum within 10 days following the six-month anniversary of termination, and the remaining payments would then be made on a monthly basis beginning on the twelve-month anniversary of termination ($2,200,000).

Annual Bonus for Year of Termination. For the fiscal year in which termination occurs, payment of the annual bonus that would have otherwise been earned if such termination had not occurred, pro rated as of the Termination Date, to be paid at the same time as other annual bonuses for the fiscal year in which the termination occurs ($1,859,000).

Outplacement. The approximate cost of one year of outplacement services ($25,000).

(6)Pro Rata Payment of any Unearned LTIP and AFG Awards. Pursuant to Mr. Johnson’s employment agreement, with respect to any non-completed performance period during which termination occurs, payment of any LTIP and AFG awards that would have otherwise been earned if such termination had not occurred, as pro rated through the termination date. The amount shown includes the sum of the value of the PBRSUs that the executive would have been entitled to receive under the (A) LTIP based on the pro rated target level achievement of the performance goals for the 2018-19 performance measurement period (30,706 PBRSUs); and (B) AFG based on the pro rated target level achievement of the performance goals for the 2018-20 performance measurement period (36,288 PBRSUs). The PBRSUs would become immediately vested and payable. The PBRSUs were valued at $55.06.

Payment of any Earned and Unvested LTIP Award and Vesting of Stock Options. Pursuant to Mr. Johnson’s employment agreement, with respect to any completed performance period during which termination occurs, payment of any LTIP award that is earned and unvested as of the termination date. The amount shown includes the intrinsic value on February 2, 2019 of 231,691 stock options that would vest.

(7)This covers termination by the Company without Cause or by the executive for Good Reason during the two-year period following a Change in Control.
(7)The severance amount equals two timesControl (each as defined in the sum of executive’s annual base salary ($1,050,000) plus annual bonus at target ($1,312,500). Payment would be made in a lump sum six months following termination. The severance amount also includes the approximate cost of one year of outplacement services ($25,000)employment agreement). If the payments or benefits received by the executive following a Change in Control are subject to the excise tax under Section 4999 of the Internal Revenue Code (“Section 4999”),IRC, then the Company would automatically reduce the executive’s payments and benefits to an amount equal to $1 less than the amount that would subject himthe executive to the excise tax, as long as the reduced amount would result in a greater benefit to himthe executive compared to the unreduced amount on a net after-tax basis.

(8)The severance amount equals two times the sum of the executive’s annual salary plus annual bonus at target under the Annual Bonus Plan or other annual incentive plan applicable to the executive. With respect to Mr. Johnson, it also includes the approximate cost of one year of outplacement services ($25,000).

(8)(9)The amount shown represents the sum of the (A) value of 78,520 shares of restricted stockthe time-based RSUs that would vest; (B) value of the RSUsPBRSUs that the executive would have been entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals for the 2013-14 performance measurement period (17,190 RSUs), (ii) actual level of achievement of the performance goals for the 2014-15 performance period (21,736 RSUs), and (iii) pro rated target level achievement of the performance goals for the 2015-162018-19 performance measurement period (7,397 RSUs);period; (C) value of the PBRSUs that the executive would have been entitled to receive under the AFG based on the pro rated target level achievement of the performance goals for the 2018-20 performance measurement period; and (C)(D) intrinsic value on January 30, 2016February 2, 2019 of 215,601the stock options that would vest. The RSUs would become immediately vested and payable. The restricted stocktime-based RSUs and RSUsPBRSUs were valued at $67.56.$55.06.

  LTIPAFG 
 Time-Based RSUsPBRSUsPBRSUsStock Options
 (#)(#)(#)(#)
R. Johnson25,12330,70636,288231,691
L. Peters29,8397,5375,44451,143
S. Jacobs37,2639,4918,16551,143
L. Kimble26,1465,4445,44446,979
P. Verma50,4634,6064,08326,526

(9)Upon a Change in Control, the Compensation Committee may, but is not required to, approve a pro rata payment to a participant under the LTIP. The amount shown in the table assumes approval of a payout under the plan and represents the cash portion of the LTIP award for the (i) 2013-14 performance measurement period at the actual payout level ($626,219), (ii) 2014-15 performance period at the actual payout level ($1,146,622), and (iii) 2015-16 performance measurement period at the target payout level pro rated to the termination date ($459,375). The amounts would be payable to the executive on the date of the Change in Control, or as soon as practicable thereafter.
(10)The amount shown represents the sum of the (A) value of 78,520 shares of restricted stock, which the Compensation Committee may, but is not obligated to, accelerate vesting oftime-based RSUs, some or all of these shares;which may be accelerated by the Compensation Committee; (B) value of the RSUsPBRSUs that the executive would have been entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals for the 2013-14 performance measurement period (17,190 RSUs), (ii) actual level of achievement of the performance goals for the 2014-15 performance measurement period (21,736 RSUs), and (iii) target level achievement of the performance goals for the 2015-162018-19 performance period, pro rated to the termination date (7,397 RSUs);date; (C) value of the PBRSUs that the executive would have been entitled to receive under the AFG based on the target level achievement of the performance goals for the 2018-19 performance period, pro rated to the termination date; and (C)(D) intrinsic value on January 30, 2016February 2, 2019 of 115,633

66

    Foot Locker, Inc.

Executive Compensation

the stock options that would vest. The PBRSUs would be paid out at the same time as the payouts are made to the other participants in the plan for this performance period in 2021. The time-based RSUs and PBRSUs were valued at $55.06. The actual value of the time-based RSUs to the executive would depend upon the Company’s stock price on the payout date in 2021.

  LTIPAFG 
 Time-Based RSUsPBRSUsPBRSUsStock Options
 (#)(#)(#)(#)
R. Johnson25,12330,70636,288123,893
L. Peters29,8397,5375,44426,947
S. Jacobs37,2639,4918,16526,947
L. Kimble26,1465,4445,44425,204
P. Verma50,4634,6064,08313,614

(11)The amount shown represents the sum of the (A) value of the PBRSUs that the executive would have been entitled to receive under the LTIP based on the target level achievement of the performance goals for the 2018-19 performance period, pro rated to the termination date; and (B) intrinsic value on February 2, 2019 of the stock options that would vest. The RSUs would be paid out at the same time as the payouts are made to the other participants in the plan for these performance periods in 2016, 2017, and 2018, respectively.2021. The restricted stock and RSUsPBRSUs were valued at

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Executive Compensation

$67.56. $55.06. The actual value of the RSUsPBRSUs to the executive would depend upon the Company’s stock price on the payout datesdate in 2016, 2017, and 2018, respectively.
(11)The Compensation Committee may, but is not obligated to, approve a pro rata payment under the LTIP following the end of the applicable performance period, provided the performance goals for the period are met. The amount shown assumes the approval of a payout to the executive and represents the cash portion of the LTIP award for the (i) 2013-14 performance measurement period based on the actual level of achievement of the performance goals ($626,219), (ii) 2014-15 performance measurement period based on the actual level of achievement of the performance goals ($1,146,622), and (iii) 2015-16 performance measurement period, pro rated to the termination date, based on a target level of achievement of the performance goals ($459,375). The amounts would be payable to the executive at the same time as the payouts are made for these performance periods to the other participants in 2016, 2017, and 2018, respectively.
(12)Benefit under the SERP payable in a lump sum following the determination of disability or the date of death.
(13)The benefit amount assumes the executive does not qualify for disability benefits under Medicare.
(14)Senior executive life insurance is payable following death in a lump sum to the executive’s beneficiary.
(15)The amount shown represents the sum of the (A) value of the RSUs that the executive would have been entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals for the 2013-14 performance measurement period (17,190 RSUs), (ii) actual level of achievement of the performance goals for the 2014-15 performance measurement period (21,736 RSUs), and (iii) target level achievement of the performance goals for the 2015-16 performance period, pro rated to the termination date (7,397 RSUs); and (B) intrinsic value on January 30, 2016 of 115,633 stock options that would vest. The RSUs would be paid out at the same time as the payouts are made to the other participants in the plan for these performance periods in 2016, 2017, and 2018, respectively. The RSUs were valued at $67.56. The actual value of the RSUs to the executive would depend upon the Company’s stock price on the payout dates in 2016, 2017, and 2018, respectively.2021.

 

2016 Proxy Statement  |  65

Executive Compensation

 LTIP 
 PBRSUsStock Options
 (#)(#)
R. Johnson30,706123,893
L. Peters7,53726,947
S. Jacobs9,49126,947
L. Kimble5,44425,204
P. Verma4,60613,614

 

Lauren B. Peters

          Excess      
    Vesting of     Cash   Senior  
    RS, RSUs LTIP   Balance Continuation Executive  
Reason for Severance and Payout SERP Plan of Health Life  
Termination Payment ($) Options ($) Eligibility ($) Benefit ($) Benefit ($) Benefits ($) Insurance ($) Total ($)
By Company Without Cause  907,500   —   —   1,119,356   212,711   983,804   —   3,223,371 
   (1)           (2)   (3)   (4)         
By Executive for Good Reason  907,500   779,376   —   1,119,356   212,711   983,804   —   4,002,747 
   (1)   (5)       (2)   (3)   (4)         
Executive Resigns Before End of Term  —   —   —   1,119,356   212,711   983,804   —   2,315,871 
               (2)   (3)   (4)         
Following Change in Control: By Executive for Good Reason or By Company Without Cause  1,603,250   3,666,571   724,233   1,119,356   212,711   983,804   —   8,309,925 
(6)  (7)   (8)   (9)   (2)   (3)   (4)         
Disability  —   3,295,513   724,233   1,119,356   212,711   983,804   —   6,335,617 
       (10)   (11)   (12)   (3)   (4)(13)         
Death  —   3,295,513   724,233   1,119,356   212,711   —   605,000   5,956,813 
       (10)   (11)   (12)   (3)       (14)     
Cause  —   —   —   —   212,711   —   —   212,711 
                   (3)             

Notes to Table on Lauren B. Peters

(1)(12)The severance amount equals one-and-a-half times the executive’s annual salary.
(2)This amount is the total benefitsalary, payable under the SERP. The payments would be made quarterly over a three-year period. The first two quarterly payments would be made on the first dayin lump sum within 10 days of the calendar quarter that occurs six months following the executive’s termination date, with the remaining payments made quarterly during the remaindersix-month anniversary of the three-year period.
(3)Benefit payable as of January 30, 2016 in a lump sum under the Foot Locker Excess Cash Balance Plan six months following the executive’s termination date. No information is provided with respect to the benefit under the Retirement Plan because that plan is available generally to all salaried employees and does not discriminate in terms of scope, terms, or operation in favor of the executive officers.

(4)Executive would be entitled under the SERP to the continuation of medical and dental insurance benefits following termination. The benefits would be substantially the same as those benefits to which senior executives are entitled under the Company’s medical and dental plans for active employees. Executive would be required to pay the insurance premium applicable to actively employed senior executives, including any subsequent increases in the premiums. The amount shown in the table represents the actuarial present value of all future expected post-termination medical and dental benefits.
(5)(13)The amount shown represents the intrinsic value on January 30, 2016February 2, 2019 of 35,999the stock options that would vest.

 Stock Options
(6)This covers termination by the Company without Cause or by the executive for Good Reason within 24 months following a Change in Control.(#)
L. Peters26,947
S. Jacobs26,947
L. Kimble25,204
P. Verma13,614

 

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Executive Compensation

(7)The severance amount equals two times the executive’s annual salary plus annual bonus at target under the Annual Bonus Plan or other annual incentive plan applicable to the executive. If the payments or benefits received by the executive following a Change in Control are subject to the excise tax under Section 4999, then the Company would automatically reduce the executive’s payments and benefits to an amount equal to $1 less than the amount that would subject her to the excise tax, as long as the reduced amount would result in a greater benefit to her compared to the unreduced amount on a net after-tax basis.
(8)The amount shown represents the sum of the (A) value of 20,000 shares of restricted stock that would vest; (B) value of the RSUs that the executive would have been entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals for the 2013-14 performance measurement period (7,759 RSUs), (ii) actual level of achievement of the performance goals for the 2014-15 performance period (7,657 RSUs), and (iii) pro rated target level achievement of the performance goals for the 2015-16 performance measurement period (1,827 RSUs); and (C) intrinsic value on January 30, 2016 of 68,667 stock options that would vest. The RSUs would become immediately vested and payable. The restricted stock and RSUs were valued at $67.56.
(9)Upon a Change in Control, the Compensation Committee may, but is not required to, approve a pro rata payment to a participant under the LTIP. The amount shown in the table assumes approval of a payout under the plan and represents the cash portion of the LTIP award for the (i) 2013-14 performance measurement period at the actual payout level ($265,650), (ii) 2014-15 performance period at the actual payout level ($345,145), and (iii) 2015-16 performance measurement period at the target payout level pro rated to the termination date ($113,438). The amounts would be payable to the executive on the date of the Change in Control, or as soon as practicable thereafter.
(10)The amount shown represents the sum of the (A) value of 20,000 shares of restricted stock, which the Compensation Committee may, but is not obligated to, accelerate vesting of some or all of these shares; (B) value of the RSUs that the executive would have been entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals for the 2013-14 performance measurement period (7,759 RSUs), (ii) actual level of achievement of the performance goals for the 2014-15 performance measurement period (7,657 RSUs), and (iii) target level achievement of the performance goals for the 2015-16 performance period, pro rated to the termination date (1,827 RSUs); and (C) intrinsic value on January 30, 2016 of 35,999 stock options that would vest. The RSUs would be paid out at the same time as the payouts are made to the other participants in the plan for these performance periods in 2016, 2017, and 2018, respectively. The restricted stock and RSUs were valued at $67.56. The actual value of the RSUs to the executive would depend upon the Company’s stock price on the payout dates in 2016, 2017, and 2018, respectively.
(11)The Compensation Committee may, but is not obligated to, approve a pro rata payment under the LTIP following the end of the applicable performance period, provided the performance goals for the period are met. The amount shown assumes the approval of a payout to the executive and represents the cash portion of the LTIP award for the (i) 2013-14 performance measurement period based on the actual level of achievement of the performance goals ($265,650), (ii) 2014-15 performance measurement period based on the actual level of achievement of the performance goals ($345,145), and (iii) 2015-16 performance measurement period, pro rated to the termination date, based on a target level of achievement of the performance goals ($113,438). The amounts would be payable to the executive at the same time as the payouts are made for these performance periods to the other participants in 2016, 2017, and 2018, respectively.
(12)Benefit under the SERP payable in a lump sum following the determination of disability or the date of death.
(13)The benefit amount assumes the executive does not qualify for disability benefits under Medicare.
(14)Senior executive life insurance benefit is payable following death in a lump sum to the executive’s beneficiary.

2016 Proxy Statement  |  67

Executive Compensation

Robert W. McHugh

          Excess    
    Vesting of     Cash    
    RS, RSUs LTIP   Balance Continuation  
Reason for Severance and Payout SERP Plan of Health  
Termination Payment ($) Options ($) Eligibility ($) Benefit ($) Benefit ($) Benefits ($) Total ($)
By Company  1,009,500   —   —   1,083,831   306,917   843,000   3,243,248 
Without Cause                            
   (1)           (2)   (3)   (4)     
By Executive  1,009,500   779,376   —   1,083,831   306,917   843,000   4,022,624 
for Good                            
Reason                            
   (1)   (5)       (2)   (3)   (4)     
Executive  —   —   —   1,083,831   306,917   843,000   2,233,748 
Resigns Before                            
End of Term                            
               (2)   (3)   (4)     
Following  1,783,450   3,879,318   853,672   1,083,831   306,917   843,000   8,750,188 
Change in                            
Control:                            
By Executive                            
for Good                            
Reason or                            
By Company                            
Without Cause                            
(6)  (7)   (8)   (9)   (2)   (3)   (4)     
Disability  —   3,508,259   853,672   1,083,831   306,917   843,000   6,595,679 
       (10)   (11)   (12)   (3)   (4)(13)     
Death  —   3,508,259   853,672   1,083,831   306,917   —   5,752,679 
       (10)   (11)   (12)   (3)         
Retirement  —   2,157,059   853,672   1,083,831   306,917   843,000   5,244,479 
       (14)   (11)   (2)   (3)   (4)     
Cause  —   —   —   —   306,917   —   306,917 
                   (3)         

Notes to Table on Robert W. McHugh

(1)The severance amount equals one-and-a-half times the executive’s annual salary.
(2)This amount is the total benefit payable under the SERP. The payments would be made quarterly over a three-year period. The first two quarterly payments would be made on the first day of the calendar quarter that occurs six months following the executive’s termination date, with the remaining payments made quarterly during the remainder of the three-year period.
(3)Benefit payable as of January 30, 2016 in a lump sum under the Foot Locker Excess Cash Balance Plan six months following the executive’s termination date. No information is provided with respect to the benefit under the Retirement Plan because that plan is available generally to all salaried employees and does not discriminate in terms of scope, terms, or operation in favor of the executive officers.
(4)ExecutiveMr. Kimble would be entitled under the SERPIAP to the continuation of medical and dental insurancecertain benefits following termination. The benefits would be substantially the same as those benefits to which senior executives are entitled under the Company’s medical and dental plans for active employees. Executive would be required to pay the insurance premium applicable to actively employed senior executives, including any subsequent increases in the premiums. The amount shown in the table represents the actuarial present value of all future expected post-termination medical and dental benefits.
(5)The amount shown represents the intrinsic value on January 30, 2016 of 35,999 stock options that would vest.
(6)This covershis termination by the Company without Cause or by the executive for Good Reason within 24 months following a Change in Control.

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Executive Compensation

(7)The severance amount equals two times the executive’s annual salary plus annual bonus at target under the Annual Bonus Plan or other annual incentive plan applicable to the executive. If the payments or benefits received by the executive following a Change in Control are subject to the excise tax under Section 4999, then the Company would automatically reduce the executive’s payments and benefits to an amount equal to $1 less than the amount that would subject her to the excise tax, as long as the reduced amount would result in a greater benefit to her compared to the unreduced amount on a net after-tax basis.
(8)The amount shown represents the sum of the (A) value of 20,000 shares of restricted stock that would vest; (B) value of the RSUs that the executive would have been entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals for the 2013-14 performance period (9,240 RSUs), (ii) actual level of achievement of the performance goals for the 2014-15 performance period (9,120 RSUs), and (iii) pro rated target level achievement of the performance goals for the 2015-16 performance measurement period (2,032 RSUs); and (C) intrinsic value on January 30, 2016 of 68,667 stock options that would vest. The RSUs would become immediately vested and payable. The restricted stock and RSUs were valued at $67.56.
(9)Upon a Change in Control, the Compensation Committee may, but is not required to, approve a pro rata payment to a participant under the LTIP. The amount shown in the table assumes approval of a payout under the plan and represents the cash portion of the LTIP award for the (i) 2013-14 performance measurement period at the actual payout level ($316,365), (ii) 2014-15 performance period at the actual payout level ($411,119), and (iii) 2015-16 performance measurement period at the target payout level pro rated to the termination date ($126,188). The amounts would be payable to the executive on the date of the Change in Control, or as soon as practicable thereafter.
(10)The amount shown represents the sum of the (A) value of 20,000 shares of restricted stock, which the Compensation Committee may, but is not obligated to, accelerate vesting of some or all of these shares; (B) value of the RSUs that the executive would have been entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals for the 2013-14 performance measurement period (9,240 RSUs), (ii) actual level of achievement of the performance goals for the 2014-15 performance measurement period (9,120 RSUs), and (iii) target level achievement of the performance goals for the 2015-16 performance period, pro rated to the termination date (2,032 RSUs); and (C) intrinsic value on January 30, 2016 of 35,999 stock options that would vest. The RSUs would be paid out at the same time as the payouts are made to the other participants in the plan for these performance periods in 2016, 2017, and 2018, respectively. The restricted stock and RSUs were valued at $67.56. The actual value of the RSUs to the executive would depend upon the Company’s stock price on the payout dates in 2016, 2017, and 2018, respectively.
(11)The Compensation Committee may, but is not obligated to, approve a pro rata payment under the LTIP following the end of the applicable performance period, provided the performance goals for the period are met. The amount shown assumes the approval of a payout to the executive and represents the cash portion of the LTIP award for the (i) 2013-14 performance measurement period based on the actual level of achievement of the performance goals ($316,365), (ii) 2014-15 performance measurement period based on the actual level of achievement of the performance goals ($411,119), and (iii) 2015-16 performance measurement period, pro rated to the termination date, based on a target level of achievement of the performance goals ($126,188). The amounts would be payable to the executive at the same time as the payouts are made for these performance periods to the other participants in 2016, 2017, and 2018, respectively.
(12)SERP benefit payable in a lump sum following the determination of disability or the date of death.
(13)The benefit amount assumes the executive does not qualify for disability benefits under Medicare.
(14)The amount shown represents the sum of the (A) value of the RSUs that the executive would have been entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals for the 2013-14 performance measurement period (9,240 RSUs), (ii) actual level of achievement of the performance goals for the 2014-15 performance measurement period (9,120 RSUs), and (iii) target level achievement of the performance goals for the 2015-16 performance period, pro rated to the termination date (2,032 RSUs); and (B) intrinsic value on January 30, 2016 of 35,999 stock options that would vest. The RSUs would be paid out at the same time as the payouts are made to the other participants in the plan for these performance periods in 2016, 2017, and 2018, respectively. The RSUs were valued at $67.56. The actual value of the RSUs to the executive would depend upon the Company’s stock price on the payout dates in 2016, 2017, and 2018, respectively.

2016 Proxy Statement  |  69

Executive Compensation

Jeffrey L. Berk

          Excess     
    Vesting of     Cash     
    RS, RSUs LTIP   Balance Continuation   
Reason for Severance and Payout SERP Plan of Health   
Termination Payment ($) Options ($) Eligibility ($) Benefit ($) Benefit ($) Benefits ($) Total ($) 
By Company
Without Cause		 732,786 — — 1,648,188 322,904 650,938 3,354,816 
  (1)     (2) (3) (4)   
By Executive
for Good
Reason		 732,786 389,699 — 1,648,188 322,904 650,938 3,744,515 
  (1) (5)   (2) (3) (4)   
Executive
Resigns Before
End of Term		 — — — 1,648,188 322,904 650,938 2,622,030 
        (2) (3) (4)   
Following
Change in
Control:
By Executive
for Good
Reason or
By Company
Without Cause		 1,221,310 1,587,750 625,982 1,648,188 322,904 650,938 6,057,072 
(6) (7) (8) (9) (2) (3) (4)   
Disability — 1,402,221 625,982 1,648,188 322,904 650,938 4,650,233 
    (10) (11) (12) (3) (4)(13)   
Death — 1,402,221 625,982 1,648,188 322,904 — 3,999,295 
    (10) (11) (12) (3)     
Retirement — 1,402,221 625,982 1,648,188 322,904 650,938 4,650,233 
    (10) (11) (2) (3) (4)   
Cause — — — — 322,904 — 322,904 
          (3)     

Notes to Table on Jeffrey L. Berk

(1)The severance amount equals one-and-a-half times the executive’s annual salary.
(2)This amount is the total benefit payable under the SERP. The payments would be made quarterly over a three-year period. The first two quarterly payments would be made on the first day of the calendar quarter that occurs six months following the executive’s termination date, with the remaining payments made quarterly during the remainder of the three-year period.
(3)Benefit payable as of January 30, 2016 in a lump sum under the Foot Locker Excess Cash Balance Plan six months following the executive’s termination date. No information is provided with respect to the benefit under the Retirement Plan because that plan is available generally to all salaried employees and does not discriminate in terms of scope, terms, or operation in favor of the executive officers.
(4)Executive would be entitled under the SERP to the continuation of medical and dental insurance benefits following termination. The benefits would be substantially the same as those benefits to which senior executives are entitled under the Company’s medical and dental plans for active employees. Executive would be required to pay the insurance premium applicable to actively employed senior executives, including any subsequent increases in the premiums. The amount shown in the table represents the actuarial present value of all future expected post-termination medical and dental benefits.
(5)The amount shown represents the intrinsic value on January 30, 2016 of 18,000 stock options that would vest.
(6)This covers termination by the Company without Cause or by the executive for Good Reason within 24 months following a Change in Control.

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(7)The severance amount equals two times the executive’s annual salary plus annual bonus at target under the Annual Bonus Plan or other annual incentive plan applicable to the executive. If the payments or benefits received by the executive following a Change in Control are subject to the excise tax under Section 4999, then the Company would automatically reduce the executive’s payments and benefits to an amount equal to $1 less than the amount that would subject her to the excise tax, as long as the reduced amount would result in a greater benefit to her compared to the unreduced amount on a net after-tax basis.
(8)The amount shown represents the sum of the (A) value of the RSUs that the executive would have been entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals for the 2013-14 performance period (6,892 RSUs), (ii) actual level of achievement of the performance goals for the 2014-15 performance period (6,620 RSUs), and (iii) pro rated target level achievement of the performance goals for the 2015-16 performance measurement period (1,475 RSUs); and (B) intrinsic value on January 30, 2016 of 34,334 stock options that would vest. The RSUs would become immediately vested and payable. The restricted stock and RSUs were valued at $67.56.
(9)Upon a Change in Control, the Compensation Committee may, but is not required to, approve a pro rata payment to a participant under the LTIP. The amount shown in the table assumes approval of a payout under the plan and represents the cash portion of the LTIP award for the (i) 2013-14 performance measurement period at the actual payout level ($235,957), (ii) 2014-15 performance period at the actual payout level ($298,427), and (iii) 2015-16 performance measurement period at the target payout level pro rated to the termination date ($91,598). The amounts would be payable to the executive on the date of the Change in Control, or as soon as practicable thereafter.
(10)The amount shown represents the sum of the (A) value of the RSUs that the executive would have been entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals for the 2013-14 performance measurement period (6,892 RSUs), (ii) actual level of achievement of the performance goals for the 2014-15 performance measurement period (6,620 RSUs), and (iii) target level achievement of the performance goals for the 2015-16 performance period, pro rated to the termination date (1,475 RSUs); and (B) intrinsic value on January 30, 2016 of 18,000 stock options that would vest. The RSUs would be paid out at the same time as the payouts are made to the other participants in the plan for these performance periods in 2016, 2017, and 2018, respectively. The restricted stock and RSUs were valued at $67.56. The actual value of the RSUs to the executive would depend upon the Company’s stock price on the payout dates in 2016, 2017, and 2018, respectively.
(11)The Compensation Committee may, but is not obligated to, approve a pro rata payment under the LTIP following the end of the applicable performance period, provided the performance goals for the period are met. The amount shown assumes the approval of a payout to the executive and represents the cash portion of the LTIP award for the (i) 2013-14 performance measurement period based on the actual level of achievement of the performance goals ($235,957), (ii) 2014-15 performance measurement period based on the actual level of achievement of the performance goals ($298,427), and (iii) 2015-16 performance measurement period, pro rated to the termination date, based on a target level of achievement of the performance goals ($91,598). The amounts would be payable to the executive at the same time as the payouts are made for these performance periods to the other participants in 2016, 2017, and 2018, respectively.
(12)SERP benefit payable in a lump sum following the determination of disability or the date of death.
(13)The benefit amount assumes the executive does not qualify for disability benefits under Medicare.

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Executive Compensation

Pawan Verma

    Vesting of     Senior   
    RS, RSUs LTIP   Executive   
Reason for Severance and Payout SERP Life   
Termination Payment ($) Options ($) Eligibility ($) Benefit ($) Insurance ($) Total ($) 
By Company
Without Cause		 675,000 1,553,809 — — — 2,228,809 
  (1) (2)         
By Executive
for Good
Reason		 675,000 276,880 — — — 951,880 
  (1) (3)         
Following
Change in
Control:
By Executive
for Good
Reason or
By Company
Without Cause		 1,125,000 2,458,832 128,057 — — 3,711,889 
(4) (5) (6) (7)       
Disability — 1,905,071 128,057 34,855 — 2,067,983 
    (8) (9) (10)     
Death — 1,905,071 128,057 34,855 450,000 2,517,983 
    (8) (9) (10) (11)   

Notes to Table on Pawan Verma

(1)The severance amount equals one-and-a-half times the executive’s annual salary.
(2)The amount shown represents the sum of the (a) value of 13,660 shares of restricted stock that would vest; and intrinsic value on January 30, 2016 of 7,564 stock options that would vest. The restricted stock was valued at $73.21
(3)The amount shown represents the intrinsic value on January 30, 2016 of 3,782 stock options that would vest.
(4)This covers termination by the Company without Cause or by the executive for Good Reason within 24 months following a Change in Control.
(5)The severance amount equals two times the executive’s annual salary plus annual bonus at target under the Annual Bonus Plan or other annual incentive plan applicable to the executive. If the payments or benefits received by the executive following a Change in Control are subject to the excise tax under Section 4999, then the Company would automatically reduce the executive’s payments and benefits to an amount equal to $1 less than the amount that would subject her to the excise tax, as long as the reduced amount would result in a greater benefit to her compared to the unreduced amount on a net after-tax basis.
(6)The amount shown represents the sum of the (A) value of 20,490 shares of restricted stock that would vest; (B) value of the RSUs that the executive would have been entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals of the 2014-15 performance period (898 RSUs), and (ii) pro rated target level achievement of the performance goals for the 2015-16 performance measurement period (852 RSUs); and (C) intrinsic value on January 30, 2016 of 11,346 stock options that would vest. The RSUs under the LTIP would become immediately vested and payable. The restricted stock and RSUs were valued at $73.21.
(7)Upon a Change in Control, the Compensation Committee may, but is not required to, approve a pro rata payment to a participant under the LTIP. The amount shown in the table assumes approval of a payout under the plan and represents the cash portion of the LTIP award for the (i) 2014-15 performance period at the actual payout level ($65,703), and (ii) 2015-16 performance measurement period at the target payout level pro rated to the termination date ($62,354). The amounts would be payable to the executive on the date of the Change in Control, or as soon as practicable thereafter.

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Executive Compensation

(8)The amount shown represents the sum of the (A) value of 20,490 shares of restricted stock, which the Compensation Committee may, but is not obligated to, accelerate vesting of some or all of these shares; (B) value of the performance RSUs that the executive would have been entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals for the 2014-15 performance measurement period (898 RSUs), and (ii) target level achievement of the performance goals for the 2015-16 performance period, pro rated to the termination date (852 RSUs); and (C) intrinsic value on January 30, 2016 of 3,782 stock options that would vest. The RSUs under the LTIP would be paid out at the same time as the payouts are made to the other participants in the plan for these performance periods in 2016, 2017, and 2018, respectively. The restricted stock and RSUs were valued at $73.21. The actual value to the executive of the RSUs under the LTIP would depend upon the Company’s stock price on the payout dates in 2016, 2017, and 2018, respectively.
(9)The Compensation Committee may, but is not obligated to, approve a pro rata payment under the LTIP following the end of the applicable performance period, provided the performance goals for the period are met. The amount shown assumes the approval of a payout to the executive and represents the cash portion of the LTIP award for the (i) 2014-15 performance measurement period based on the actual level of achievement of the performance goals ($65,703), and (ii) 2015-16 performance measurement period, pro rated to the termination date, based on a target level of achievement of the performance goals ($62,354). The amounts would be payable to the executive at the same time as the payouts are made for these performance periods to the other participants in 2016, 2017, and 2018, respectively.
(10)SERP benefit payable in a lump sum following the determination of disability or the date of death.
(11)Senior executive life insurance benefit is payable following death in a lump sum to the executive’s beneficiary.

 

Ken C. HicksCEO Pay Ratio

 

        Excess     
        Cash     
  Vesting of Bonus   Balance Continuation   
Reason for RS, RSUs Payout SERP Plan of Health   
Termination and Options ($) Eligibility ($) Benefit ($) Benefit ($) Benefits ($) Total ($) 
Retirement 3,972,866 3,580,325 2,000,228 272,807 576,805 10,403,031 
  (1) (2) (3) (4) (5)   

The following information is a reasonable good faith estimate calculated in a manner consistent with the SEC pay ratio rules and methods for disclosure. The SEC rules do not specify a single methodology for identification of the median employee or calculation of the CEO pay ratio, and other companies may use different assumptions, adjustments, exclusions, or estimates in calculating their CEO pay ratio. Accordingly, CEO pay ratio disclosures may involve a degree of imprecision and may be inconsistent in methodology among different companies. Therefore, the CEO pay ratio disclosed by other companies may not be comparable to the Company’s CEO pay ratio as disclosed below. Using the methodology described below, our CEO pay ratio based on fiscal year 2018 compensation is approximately 1,627:1.

 

Notes to Table on Ken C. HicksTo calculate our CEO pay ratio, we used the same median employee identified as of December 31, 2017. We believe there have been no changes in our employee population or our compensation arrangements in 2018 that would result in a significant change in our pay ratio disclosure or our median employee.

 

We are a global retailer and approximately 70% of our employees are part-time employees. Our median employee is a part-time sales associate who worked an average of 16 hours per week in one of our stores in Hawaii, and whose annual compensation was $8,241 in fiscal year 2018. Our Chief Executive Officer’s compensation during the same time period was $13,411,422, including $9,446 for a health care benefit under a plan that is available generally to all salaried employees, which is not required to be reported as compensation for our Chief Executive Officer in the Summary Compensation Table, as disclosed on pages 52 through 54, under the SEC rules. See pages 20 through 24 for additional employee data.

(1)The amount shown represents the sum of the value of the RSUs that the executive is entitled to receive under the LTIP based on the (i) actual level of achievement of the performance goals for the 2013-14 performance measurement period (36,207 RSUs), and (ii) actual level of achievement of the performance goals for the 2014-15 performance measurement period (22,598 RSUs). The RSUs would be paid out at the same time as the payouts are made to the other participants in the plan for these performance periods in 2016 and 2017, respectively. The RSUs were valued at $67.56. The actual value of the RSUs to the executive would depend upon the Company’s stock price on the payout dates in 2016 and 2017, respectively.
 
(2)The Compensation Committee may, but is not obligated to, approve a pro rata payment under the LTIP following the end of the applicable performance period, provided the performance goals for the period are met. The amount shown assumes the approval of a payout to the executive and represents the cash portion of the LTIP award for the (i) 2013-14 performance measurement period based on the actual level of achievement of the performance goals ($1,925,000), and (ii) 2014-15 performance measurement period based on the actual level of achievement of the performance goals ($1,239,700). The amounts would be payable to the executive at the same time as the payouts are made for these performance periods to the other participants in 2016 and 2017, respectively.
(3)This amount is the total benefit payable under the SERP. The payments will be made quarterly over a three-year period. The first two quarterly payments were made in January 2016 (the first day of the calendar quarter that occurred six months following the executive’s termination date), and the remaining payments will be made quarterly during the remainder of the three-year period.

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Executive Compensation

(4)Benefit paid in a lump sum under the Foot Locker Excess Cash Balance Plan in December 2015 (six months following the executive’s termination date). No information is provided with respect to the benefit under the Retirement Plan because that plan is available generally to all salaried employees and does not discriminate in terms of scope, terms, or operation in favor of the executive officers.
(5)Executive is entitled under the SERP to the continuation of medical and dental insurance benefits. The benefits would be substantially the same as those benefits to which senior executives are entitled under the Company’s medical and dental plans for active employees. Executive is required to pay the insurance premium applicable to actively employed senior executives, including any subsequent increases in the premiums. The amount shown in the table represents the actuarial present value of all future expected post-termination medical and dental benefits.

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Trust Agreement for Certain Benefit Plans

 

The Company has established a trust for certain benefit plans, arrangements, and agreements, including the SERP, the Foot Locker Excess Cash Balance Plan, the executive employment agreements, and other benefit plans, agreements or arrangements that may be covered at a later date (collectively, the “Benefit Obligations”). Under the trust agreement, if there is a Change in Control of the Company (as defined in the Trust agreement), the trustee would pay to the persons entitled to the Benefit Obligations the amounts to which they may become entitled under the Benefit Obligations. Upon the occurrence of a Potential Change in Control of the Company as defined in the trust agreement, the Company is required to fund the trust with an amount sufficient to pay the total amount of the Benefit Obligations. Following the occurrence, and during the pendency, of a Potential Change in Control, the trustee would be required to make payments of Benefit Obligations to the extent these payments are not made by the Company.

 

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Equity Compensation Plan Information 

 

The following table provides information as of January 30, 2016February 2, 2019 for compensation plans under which equity securities may be issued:

 

 (a) (b) (c) 
     Number of Securities 
     Remaining Available 
     For Future Issuance 
 Number of Securities   Under Equity 
 to be Issued Upon Weighted-Average Compensation Plans 
 Exercise of Exercise Price of (Excluding Securities 
 Outstanding Options, Outstanding Options, Reflected in  (a) (b) (c) 
Plan Category Warrants and Rights (#) Warrants and Rights ($) Column(a)) (#)  Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
(#)		 Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
($)		 Number of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a))
(#)		 
Equity Compensation Plans Approved by Security Holders 3,693,787 32.62 15,753,244(1)(2) 
Equity Compensation Plans Not Approved by Security Holders — — — 
Equity Compensation Plans Approved 2,861,447 52.34 11,237,742(1)(2)
by Security Holders       
Equity Compensation Plans Not Approved – – – 
by Security Holders       
Total 3,693,787 32.62 15,753,244  2,861,447 52.34 11,237,742 

 

Notes to Equity Compensation Plan Table

 

(1)Includes 2,714,6472,475,669 shares available for future issuance under the 2013 Employees Stock Purchase Plan (the “2013 Purchase Plan”)ESPP other than upon the exercise of an option, warrantoptions, warrants, or right.
rights. Participating employees under the 2013 Purchase PlanESPP may contribute up to 10% of their annual compensation during a plan year to acquire shares of the Company’s Common Stock at 85% of the lower market price on one of two specified dates in each plan year. In no event may the number of shares purchased on behalf of any one participant in any plan year exceed the number determined by dividing $25,000 by the fair market value of a share on the date of grant.grant date.

(2)The Stock Incentive Plan currently is the only plan under which stock awards may be granted to directors, officers, and other employees of the Company.
Payouts under the LTIP may beare made in cash or shares of Common Stock. If shares are used, they would beStock and issued as Other Stock-Based Awards under the Stock Incentive Plan.

 

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2016 Proxy StatementFoot Locker , Inc  |  75.
 

 

 

Proposal 2: Ratification of the Appointment of Independent Registered Public Accounting Firm 

 

The Audit Committee is responsible for the appointment, compensation, retention, and oversight of the independent registered public accounting firm retained to audit the Company’s financial statements. The Audit Committee conducts an annual evaluation of the independent registered public accounting firm’s qualifications, performance, and independence. The Audit Committee exercises sole authority to approve all audit engagement fees. In addition to ensuring the regular rotation of the lead audit partner as required by law, the Audit Committee is involved in the selection of, and reviews and evaluates, the lead audit partner.

 

The Audit Committee engages in an evaluation of the lead audit partner and his or her qualifications. In evaluating and selecting the Company’s lead audit partner, the Audit Committee provides selection criteria to KPMG LLP to which KPMG LLP responds with a roster of qualified candidates. Two members of the Audit Committee, along with the Chair of the Committee and the Lead Director, interview the candidates. The Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer also interview the candidates. The Chair of the Committee and lead audit partner meet in executive session. The Chair of the Committee then recommends his selection to the full Audit Committee for its consideration and approval.

The Audit Committee has appointed KPMG LLP as our independent registered public accounting firm for the 20162019 fiscal year. We are asking shareholders at this meeting to ratify this appointment of KPMG LLP for 2016.2019. KPMG LLP has served as our independent registered public accounting firm since 1995. The Audit Committee and the Board believe that the continued retention of KPMG LLP to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its shareholders. Although ratification is not required by our By-lawsBy-Laws or otherwise, the Board is submitting the appointment of KPMG LLP to our shareholders for ratification because we value our shareholders’ views onregarding this appointment and because we view it as a matter of good corporate governance.governance practice. In the event that shareholders fail to ratify thethis appointment, it will be considered a recommendation to the Board and the Audit Committee to consider the selection ofselecting a different firm. Even if the appointment is ratified, the Audit Committee may in its discretion select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders.

 

Representatives of KPMG LLP will be present at the 20162019 Annual Meeting and will have an opportunity to make a statement and respond to appropriate questions.

 

 

✔    The Board recommends a voteFORProposal 2.3.

Audit and Non-Audit Fees

 

The following table shows the fees we paid to KPMG LLP for the audit of the Company’s annual financial statements for 20152017 and 2014,2018, as well as the fees billed for other services KPMG LLP provided during these two fiscal years:

 

 2015 2014 
Category ($) ($)  2017
($)		 2018
($)
Audit Fees(1) 2,908,000 3,068,000 
Audit-Related Fees(2) 170,000 165,000 
Tax Fees(3) 253,000 259,000 
Audit Fees(1) 3,438,000 4,378,000
Audit-Related Fees(2) 287,000 245,000
Tax Fees(3) 322,000 294,000
All Other Fees — —  – –
Total 3,331,000 3,492,000  4,047,000 4,917,000
     

 

Notes to Audit and Non-Audit Fees Table

 

(1)Audit fees consisted of professional services provided in connection with the audit of our annual financial statements, reviews of financial statements included in our Quarterly Reports on Form 10-Qs,10-Q, as well as work generally only the independent auditor can reasonably be expected to provide, such as statutory audits.

 

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Proposal 2

(2)Audit-related fees consisted principally of audits of financial statements of certain employee benefit plans.plans and the Foot Locker Foundation as well as due diligence related to an investment.

(3)Tax fees consisted principally of assistance with matters related to tax compliance.

 

2019 Proxy Statement    

69

Proposal 3: Ratification of the Appointment of our Independent Registered Public Accounting Firm

Audit Committee Preapproval Policies and Procedures

The Audit Committee has a policy that all audit and non-audit services to be provided by our independent accountants, including services for our subsidiaries and affiliates, are to be approved in advance by the Audit Committee, regardless of the estimated cost for providing such services. Between meetings of the Audit Committee, the Audit Committee has delegated this authority to the Audit Committee Chair. In practice, these fees are normally approved by the Audit Committee Chair and reviewed with the Audit Committee at a subsequent meeting. Management reviews with the Audit Committee at regularly scheduled meetings the total amount and nature of the audit and non-audit services provided by the independent accountants, including services for our subsidiaries and affiliates, since the Audit Committee’s last meeting. None of the services preapproved by the Audit Committee or the Chair of the Audit Committee during 2015 utilized the de minimis exception to preapproval contained in the applicable SEC rules.

 

Audit Committee Report

In accordance with the charter adopted by the Board, the Audit Committee assists the Board in fulfilling its oversight responsibilities in the areas of the Company’s accounting policies and practices and financial reporting. The Audit Committee has responsibilityis responsible for appointingthe appointment, compensation, and oversight of the independent registered public accounting firm. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting.

 

The Audit Committee consists of four independent directors named below, as independence is defined under the NYSE rules. All of the Audit Committee members meet the expertise requirements under the NYSE rules.

 

The Audit Committee held nine meetings in 2015.2018. At its meetings during 2015,2018, the Audit Committee discussed with management, the Company’s independent registered public accounting firm (KPMG LLP), and the Company’s internal auditors the assessment of the Company’s internal control over financial reporting. The Audit Committee also discussed with KPMG its attestation report and opinion on the Company’s internal control over financial reporting contained in the 20152018 Annual Report on Form 10-K. The Audit Committee also regularly meets privately with KPMG LLP, the internal auditors, and the Director of Internal Controls during the year.

 

The Audit Committee reviewed and discussed with management and KPMG LLP the audited financial statements for the 20152018 fiscal year, which ended January 30, 2016.February 2, 2019. The Audit Committee also discussed with KPMG LLP the matters required to be discussed by applicable Public Company Accounting Oversight Board (the “PCAOB”) Auditing Standard No. 16, Communications with Audit Committees.standards. The Audit Committee, both with and without management present, discussed and reviewed the results of KPMG’sKPMG LLP’s examination of the financial statements and the overall quality of the Company’s financial reporting.

 

The Audit Committee engages in an annual evaluation of the independent registered public accounting firm’s qualifications. In evaluating and selecting the Company’s independent registered public accounting firm, the Audit Committee considered, among other things:

●historical and recent performance of the current independent audit firm;

●an analysis of known significant legal or regulatory proceedings related to the firm;

●external data on audit quality and performance, including PCAOB reports;

●industry experience;

●audit fee revenues;

●firm capabilities and audit approach; and

●the independence, tenure, and partner rotation of the audit firm.

The Audit Committee also considers the advisability and potential impact of selecting a different independent registered public accounting firm. The Audit Committee obtained from KPMG LLP the written disclosures and the letter required by applicable PCAOB requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with KPMG LLP its independence and any relationships that may affect its objectivity. The Audit Committee also considered whether the non-audit services provided by KPMG LLP to the Company are compatible with maintaining KPMG’sKPMG LLP’s independence. The Audit Committee has satisfied itself that KPMG LLP is independent.

 

As a result of this evaluation, the Audit Committee approved the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 1, 2020, subject to shareholder ratification.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the 20152018 Annual Report on Form 10-K.

 

Members of the Audit Committee

Guillermo G. Marmol, Chair
Maxine Clark
Jarobin Gilbert, Jr.
Matthew M. McKenna

 

2016 Proxy Statement  |  77

Proposal 3: Reapproval of the Performance Goals under the Foot Locker Annual Incentive Compensation Plan, as Amended and Restated

The Annual Bonus Plan is designed to comply with the requirements of Section 162(m). Under Section 162(m), the Company cannot deduct certain compensation in excess of $1 million paid to each of the chief executive officer and the three other most highly paid executive officers (other than the chief financial officer) of the Company (each, a “Covered Employee”). Certain compensation, including compensation paid based on the achievement of pre-established performance goals, is excluded from this deduction limit if the material terms under which the compensation is to be paid, including the performance goals to be used, are approved by shareholders. Shareholders approved the Annual Bonus Plan at the 2008 annual meeting of shareholders and last approved the performance goals under the plan at the 2012 annual meeting. Section 162(m) generally requires that shareholders reapprove the performance goals under the plan at least every five years.

We are asking shareholders at this meeting to reapprove the performance goals under the Annual Bonus Plan, rather than waiting until next year’s meeting, so that the timing of the reapproval of the goals under this plan and the Long-Term Incentive Compensation Plan occurs on the same schedule. If shareholders do not reapprove the performance goals on or after the first meeting of the Company’s shareholders that occurs in the fifth year following the year of shareholder approval (i.e., by the 2017 meeting), any amounts paid under the Annual Bonus Plan after such date may not be deductible.

Material Features of the Annual Bonus Plan

The following is only a summary of the principal features of the Annual Bonus Plan. This summary is qualified in its entirety by the complete text of the plan. Capitalized terms that are used in this summary but that are not defined here have the meanings contained in the Annual Bonus Plan.

Purpose of the Plan.The purposes of the Annual Bonus Plan are to reinforce corporate, organizational, and business development goals; to promote the achievement of year-to-year financial and other business objectives; to reward the performance of individual officers and other employees in fulfilling their personal responsibilities for year-to-year achievements; and to serve as a qualified performance-based compensation program under Section 162(m) with regard to the Company’s Covered Employees.

Administration.The Annual Bonus Plan is administered by the Compensation Committee. Each member of this committee is an “outside director” under Section 162(m). The Committee has the authority to grant awards, determine performance criteria, certify attainment of performance goals, construe and interpret the Annual Bonus Plan and make all other determinations deemed necessary or advisable for the administration of this plan.

Participation.Participation in the Annual Bonus Plan is limited to those officers and other key employees of the Company, its subsidiaries and divisions, as selected by the Compensation Committee. In determining the persons to whom awards shall be granted, the Compensation Committee takes into account such factors as it considers appropriate to accomplish the purposes of the Annual Bonus Plan. Currently, 427 executives are eligible to participate in the Annual Bonus Plan.

Awards and Payment.Awards under the Annual Bonus Plan relate to a performance period coinciding with the Company’s fiscal year (the “Performance Period”). The individual target award for each participant is expressed as a percentage of Annual Base Salary. Payment for the awards is made only if the performance goals for the Performance Period are achieved and certified by the Compensation Committee and generally only if the participant remains employed by the Company through the Payment Date. Any payments under the plan must be made within two and one-half months following the end of the applicable performance period.

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Proposal 3

Limit on Payment.Payment to a Covered Employee may not exceed $3 million for any performance period.

Performance Goals.The Annual Bonus Plan provides that the Compensation Committee generally has the authority to determine the performance goals that will be in effect for a Performance Period and to determine them for the Covered Employees solely to the extent permitted by Section 162(m). The Compensation Committee also has the authority to incorporate provisions in the performance goals allowing for adjustments in recognition of unusual or non-recurring events affecting the Company or our financial statements or in response to changes in applicable laws, regulations or accounting principles.

The performance goals for the Covered Employees will be determined by the Compensation Committee based on attaining one or more of the following criteria:

target levels of, or percentage increase in,

  opre-tax profit;
     
Guillermo G. Marmol, Chair odivision profit;
Matthew M. McKenna 
Ulice Payne, Jr. oafter-tax profits of Foot Locker (or a subsidiary, division, or other operational unit of Foot Locker);
oafter-tax or pre-tax return on shareholders’ equity of Foot Locker (or any subsidiary, division or other operational unit of Foot Locker);

target levels of, or a specified increase in,

ooperational cash flow of Foot Locker (or a subsidiary, division, or other operational unit of Foot Locker);
oreturn on invested capital or return on investment;Dona D. Young

 

70

•a certain level of, a reduction of, or other specified objectives with regard to limiting the level of increase in, Foot Locker’s bank debt, other long-term or short-term public or private debt, or other similar financial obligations of Foot Locker if any, which may be calculated net of any cash balances and/or other offsets and adjustments as may be established by the Compensation Committee;
, Inc. 
•a specified percentage increase in earnings per share or earnings per share from continuing operations of Foot Locker (or a subsidiary, division or other operational unit of Foot Locker);
•target levels of, or a specified percentage increase in, revenues, net income, or earnings before interest, taxes, depreciation and/or amortization, of Foot Locker (or a subsidiary, division, or other operational unit of Foot Locker); and
•a certain target level of, or reduction in, selling, general and administrative expense as a percentage of revenue of Foot Locker (or any subsidiary, division or other operational unit of Foot Locker).

 

Amendment or Termination of Plan.The Compensation Committee may amend, suspend, or terminate the Annual Bonus Plan, or any part of it, but no amendment that requires shareholder approval in order for the plan to continue to comply with Section 162(m) will be effective unless it is approved by the required vote of our shareholders. Also, no amendment may adversely affect the rights of any participant without the participant’s consent under any awards previously granted under the plan.

 

2016 Proxy Statement  |  79

Proposal 3

 

Benefits Not Determinable.Because performance goal criteria may vary from year to year, benefits under the Annual Bonus Plan are not determinable. The Annual Bonus Plan is designed to provide payments only if the performance goals established by the Compensation Committee have been met and the attainment of the goals has been certified by the Compensation Committee. The payments made to the named executive officers under the Annual Bonus Plan for the 2015 fiscal year are set out in Note 6 to the Summary Compensation Table on Pages 46 through 47.

The Board recommends a voteFOR Proposal 3.

80  |  2016 Proxy Statement

 

 

Proposal 4: Approval of the Foot Locker Long-Term Incentive Compensation Plan, as AmendedDirectors and RestatedExecutive Officers

 

The Foot Locker Long-Term Incentive Compensation Plan was amended and restated (the “Restated LTIP”) on March 23, 2016 by the Compensation Committee, subject to our shareholders’ approval at the 2016 Annual Meeting as to Covered Employees. The Restated LTIP is designed to comply with the requirements of Section 162(m), under which the Company cannot deduct certain compensation in excess of $1 million paid to each of the chief executive officer and the three other most highly paid executive officers (other than the chief financial officer) of the Company, (each, a “Covered Employee”). Certain compensation, including compensation paid based on the achievement of pre-established performance goals, is excluded from this deduction limit if the material terms under which the compensation is to be paid, including the performance goals to be used, are approved by shareholders. Shareholders last approved the performance goals under the plan at the 2011 annual meeting. Section 162(m) generally requires that shareholders reapprove the performance goals under the plan at least every five years. If shareholders do not reapprove the performance goals on or after the first meeting of the Company’s shareholders that occurs in the fifth year following the year of shareholder approval (i.e., by the 2016 meeting), any amounts paid under this plan after such date may not be deductible.

We are asking shareholders at this meeting to approve the Restated LTIP, including the performance goals under this plan. Under the Restated LTIP, we have expanded the performance goal criteria so that the Compensation Committee may determine the performance goals for individual performance periods based on a wider range of metrics, which are describedtable below under the paragraph headed “Performance Goals.” The expanded goals incorporate the performance goals that shareholders previously approved in 2011 and include new criteria based on total shareholder return, enterprise value, and gross or operating margins of the Company. We believe that the broader range of metrics will provide the Compensation Committee with flexibility to utilize different metrics, as may be appropriate, in a manner that links the executive to the stated performance goal, which may change over time. A complete copy of the Restated LTIP is attached to this proxy statement asAppendix A.

2016 Amendments

As noted above, we have expanded the performance goal criteria in the Restated LTIP so that the Compensation Committee may determine the performance goals for individual performance periods based on a wider range of metrics. By expanding the criteria on which performance goals may be set, this will provide the Compensation Committee with greater flexibility to consider additional aspects of the Company’s business to incentivize executives with regard to the long-term goals of the Company.

Material Features of the Restated LTIP

The following is only a summary of the principal features of the Restated LTIP. This summary is qualified in its entirety by the complete text of the Restated LTIP. Capitalized terms used in this summary but that are not defined here have the meanings contained in the Restated LTIP.

Purpose of the Plan.The purposes of the Restated LTIP are to reinforce corporate, organizational, and business development goals; to promote the achievement of year-to-year and long-range financial and other business objectives; to reward the performance of individual officers and other employees in fulfilling their personal responsibilities for long-range achievements; and to serve as a qualified performance-based compensation program under Section 162(m) with regard to Covered Employees.

2016 Proxy Statement  |  81

Proposal 4

Administration.The Restated LTIP is administered by the Compensation Committee, each member of which is an “outside director” under Section 162(m). The Compensation Committee has the authority to approve the designation of eligible participants, determine performance criteria, certify attainment of performance goals, construe and interpret the Restated LTIP and make all other determinations deemed necessary or advisable for the administration of the Restated LTIP.

Participation.Participation in the Restated LTIP is limited to those officers and other key employees of the Company, its subsidiaries and divisions, as selected by the Compensation Committee. In determining the persons to whom awards shall be granted, the Compensation Committee takes into account such factors as the Compensation Committee deems appropriate to accomplish the purposes of the Restated LTIP. Currently, 23 executives participate in this plan.

Awards and Payment.Restated LTIP awards relate to a performance period of three consecutive fiscal years or such other period as determined by the Compensation Committee, beginning with the fiscal year in which the award is made (the “Performance Period”). The individual target award for each participant is expressed as a percentage of Annual Base Salary approved by the Compensation Committee at the time the award is made to the participant for a Performance Period. In general, payment for such awards shall be made only if and to the extent performance goals for the Performance Period are attained and only if the participant remains employed by the Company throughout the Performance Period. Payment to a participant for each Performance Period will be made in cash, shares of Common Stock, or a combination of these forms of payment. If payment is made in shares of Common Stock,shows the number of shares of Common Stock is determinedreported to us as beneficially owned by dividing the achieved percentageeach of our directors and NEOs as of March 25, 2019, and by all directors, NEOs, and executive officers as a participant’s Annual Base Salary by the Fair Market Valuegroup as of the Common Stock on the payment date. “Fair Market Value” of the Common Stock on thethat date, of payment, as defined in the Restated LTIP, is the average of the daily closing prices of a shareincluding shares of Common Stock duringthat they have a right to acquire within 60 days after March 25, 2019 by the 60-day period immediately preceding the payment date.exercise of stock options.

 

Limit on Payment.Payment for a Performance Period to a Covered Employee cannot be in an amount that exceeds the lesser of (a) 300% of that employee’s Annual Base SalaryNo director or (b) $5,000,000. Awards of Common Stock made pursuant to the Restated LTIP are Other Stock-Based Awards and are issued under, and subject to, the provisions of the Company’s 2007 Stock Incentive Plan.

Performance Goals.The Compensation Committee generally has the authority to determine the performance goals that will be in effect for a Performance Period. The Compensation Committee has the authority to determine the performance goals for the Covered Employees solely to the extent permitted by Section 162(m).

The performance goals for the Covered Employees will be determined by the Compensation Committee based on attaining oneNEO beneficially owned 1% or more of the following criteria selected bytotal number of outstanding shares as of March 25, 2019. Each person has sole voting and investment power for the Compensation Committee:number of shares shown unless otherwise noted.

Name Common Stock
Beneficially Owned
Excluding
Stock Options
(#)(a)		 Stock Options
Exercisable Within
60 Days After
3/25/19
(#)		 RSUs and
DSUs
(#)(b)		 Total
(#)		 
Maxine Clark 13,150 — 1,555 14,705 
Alan D. Feldman 65,498 — 29,834 95,332 
Stephen D. “Jake” Jacobs 77,449 111,919 — 189,368 
Richard A. Johnson 294,589 739,782 — 1,034,371 
Lewis P. Kimble 39,834 93,839 — 133,673 
Guillermo G. Marmol 32,702 — 1,555 34,257 
Matthew M. McKenna 30,459 — 1,555 32,014 
Steven Oakland 10,816 — 3,137 13,953 
Ulice Payne, Jr. 1,329 — 1,555 2,884 
Lauren B. Peters 143,527 248,652 — 392,179 
Cheryl Nido Turpin 47,941 — 46,865 94,806 
Kimberly Underhill 1,329 — 1,555 2,884 
Pawan Verma 66,189 39,277 — 105,466 
Dona D. Young 42,527 — 66,334 108,861 
All 21 directors and executive officers as a group, 1,036,412 1,471,168 153,945 2,661,525(c)
including the NEOs         

 

•(a)target levels of, or percentage increaseThis column includes shares held in Consolidated Net Income;
•target levels of, or a specified increase in, ROIC or return on investment;
•target levels of, or percentage increase in, pre-tax profit;
•target levels of, or a percentage increase in, after-tax profits of Foot Locker (or a subsidiary, division, or other operational unit of Foot Locker);
•target levels of, or a specified increase in, operational cash flow or economic value added of Foot Locker (or a subsidiary, division, or other operational unit of Foot Locker);the Company’s 401(k) Plan and, where applicable, executives’ unvested time-based RSUs over which they have sole voting power but no investment power, as follows:

 

82  |  2016 Proxy StatementNameUnvested RSUs
(#)
R. Johnson25,123
L. Peters29,839
S. Jacobs37,263
L. Kimble26,146
P. Verma50,463

Proposal 4

 

•(b)a certain levelThis column includes the number of reductionDSUs credited as of or other specified objectives with regardMarch 25, 2019 to limiting the levelaccounts of increase in,the directors who elected to defer all or a portionpart of Foot Locker’s bank debttheir annual retainer fee. The DSUs do not have current voting or other long-term or short-term public or private debt or other similar financial obligations of Foot Locker, if any, which may be calculated net of such cash balances and/or other offsets and adjustments as may be established by the Compensation Committee;investment power.

(c)
•a specified percentage increase in earnings per share or earnings per share from continuing operations of Foot Locker (or a subsidiary, division or other operational unit of Foot Locker);
•target levels of, or a specified percentage increase in, revenues, net income, or earnings before (a) interest, (b) taxes, (c) depreciation, and/or (d) amortization, of Foot Locker (or a subsidiary, division, or other operational unit of Foot Locker);
•target levels of, or a percentage increase in, after-tax or pre-tax return on shareholders’ equity of Foot Locker (or any subsidiary, division or other operational unit of Foot Locker);
•a certain target level of, or reduction in, selling, general, and administrative expense as a percentage of revenue of Foot Locker (or any subsidiary, division or other operational unit of Foot Locker);
•target levels of, or a specified increase in, enterprise value or value creation targets of Foot Locker (or any subsidiary, division or other operational unit of Foot Locker);
•a certain target level of, or a specified increase in, gross or operating margins of Foot Locker (or any subsidiary, division or other operational unit of Foot Locker); and
•target levels of, or a specified increase in, the fair market valueThis number represents approximately 2.4% of the shares of Common Stock or total shareholder return, includingoutstanding at the valueclose of an investment in Common Stock assuming the reinvestment of dividends.business on March 25, 2019.

To the extent permitted by law, unless the Compensation Committee determines otherwise at the time the performance goals are set, the Compensation Committee shall exclude the impact of any of the following events or occurrences:

 

 •2019 Proxy Statement    restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges;
•any acquisition or divestiture of an operating business during the plan year or performance period;
•impairment charges taken under relevant accounting rules;
•an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management; or
•a change in tax law or accounting standards required by generally accepted accounting principles.

71

 

Performance goals may also be based on individual participant performance goals, as determined by

Beneficial Ownership of the Compensation Committee, in its sole discretion.Company’s Stock

 

In addition, all performance goals may be based upon the attainment of specified levels of Company (or subsidiary, division or other operational unitPersons Owning More Than Five-Percent of the Company) performance under one or more of the measures described above relative to the performance of other corporations. The Compensation Committee may designate additional business criteria on which the performance goals may be based or adjust, modify, or amend those criteria.

Amendment or Termination of the Plan.The Compensation Committee may amend, suspend, or terminate the Restated LTIP, or any part of it, but no amendment that requires shareholder approval in order for the Restated LTIP to continue to comply with Section 162(m) will be effective unless it is approved by the required vote of our shareholders. Also, no amendment may adversely affect the rights of any participant without the participant’s consent under any awards previously granted under the plan.

2016 Proxy Statement  |  83

Proposal 4

Benefits Not Determinable.Because performance goal criteria may vary from year to year, benefits under the Restated LTIP are not determinable. The Restated LTIP is designed to provide payments only if the performance goals established by the Compensation Committee have been met and the attainment of the goals has been certified by the Compensation Committee. The Summary Compensation Table on Page 45 states the payouts under the plan to the named executive officers for the 2014-15, 2013-14, and 2012-13 Performance Periods.

The Board recommends a voteFORProposal 4.Company’s Common Stock

84  |  2016 Proxy Statement

Proposal 5: Advisory Approval of Executive Compensation

The Board is asking you to approve, on a nonbinding, advisory basis, the compensation of our named executive officers, as described in this Proxy Statement on Pages 28 through 74. This advisory “Say-on-Pay” vote is required under Section 14A of the Exchange Act. We currently hold our Say-on-Pay vote every year.

As described in detail under the CD&A beginning on Page 28, our compensation program is designed to attract, motivate and retain talented executives in order to maintain and enhance the Company’s performance and its return to shareholders. In order to accomplish this, we have a compensation program for our executives, including the named executive officers, that ties pay closely to performance. A significant portion of the compensation provided to the named executive officers is based upon the Company’s performance or the performance of our share price, and we believe this compensation structure closely aligns the interests of our named executive officers with the interests of our shareholders. The more senior an executive’s position, the greater portion of his or her compensation that is tied to performance. We believe you should read the CD&A and the compensation tables beginning on Page 28 and also consider the following factors in determining whether to approve this proposal:

2015 Results.Our 2015 fiscal year was the fifth consecutive year that our sales and profit results represented the highest levels ever achieved in our history as an athletic footwear and apparel business. As a result of our strong performance, we already achieved one of the objectives set in our long-range strategic plan adopted in early 2015, and made significant progress on the others, as shown in the table below:

      2015-20
      Long-Term
Financial Metrics 2014 2015 Objectives
Sales (billions)  $7.2   $7.4   $10 
Sales Per Gross Square Foot  $490  $504   $600 
Adjusted Earnings Before Interest and Taxes (EBIT) Margin  11.4%  12.8%  12.5%
Adjusted Net Income Margin  7.3%  8.2%  8.5%
Return on Invested Capital (ROIC)  15.0%  15.8%  17%

 

The table above includes non-GAAP results. We provide a reconciliation to GAAPbelow provides information on Pages 16 through 17shareholders who beneficially owned more than 5% of our 2015 Annual Report on Form 10-K.Common Stock as of December 31, 2018 according to reports filed with the SEC. To the best of our knowledge, there are no other shareholders who beneficially own more than 5% of a class of the Company’s voting securities.

Name and Address of Beneficial Owner Amount and Nature of
Beneficial Ownership
(#)		 Percent of Class 
The Vanguard Group, Inc. 12,206,275(a) 10.81%(a)
100 Vanguard Boulevard      
Malvern, Pennsylvania 19355      
AQR Capital Management, LLC and 7,055,107(b) 6.25%(b)
AQR Capital Management Holdings, LLC      
Two Greenwich Plaza      
Greenwich, Connecticut 06830      
BlackRock, Inc. 7,046,767(c) 6.2%(c)
55 East 52nd Street      
New York, New York 10055      

(a)Reflects shares beneficially owned as of December 31, 2018 according to Amendment No. 8 to Schedule 13G filed with the SEC. As reported in this schedule, The Vanguard Group, an investment adviser, holds sole voting power with respect to 110,211 shares, sole dispositive power with respect to 12,088,690 shares, and shared dispositive power with respect to 117,585 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 97,750 shares as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 30,761 shares as a result of its serving as investment manager of Australian investment offerings.

(b)Reflects shares beneficially owned as of December 31, 2018 according to Schedule 13G filed with the SEC. As reported in this schedule, AQR Capital Management, LLC, an investment adviser, is a wholly-owned subsidiary of AQR Capital Management Holdings, LLC. Each of AQR Capital Management, LLC and AQR Capital Management Holdings, LLC holds shared voting power and shared dispositive power with respect to 7,055,107 shares.

(c)Reflects shares beneficially owned as of December 31, 2018 according to Amendment No. 9 to Schedule 13G filed with the SEC. As reported in this schedule, BlackRock, Inc., a parent holding company, holds sole voting power with respect to 6,284,554 shares and sole dispositive power with respect to 7,046,767 shares.

Section 16(a) Beneficial Ownership Reporting Compliance

 

Meaningful Stock Ownership Requirements.The Company’s Stock Ownership Guidelines requireSection 16(a) of the Exchange Act requires that the namedour directors, executive officers, hold a significant amountand persons who own more than 10% of the Company’s Common Stock as a percentagefile reports of their base salaries. Mr. Johnson is required to hold six times his annual base salary; Ms. Petersownership and Mr. McHugh are required to hold three times their annual base salaries; and Messrs. Berk and Verma are required to hold two times their annual base salaries. Eachchanges in ownership of the named executive officers currently meets or exceeds these guidelines.

Pay for Performance Culture.Our executive compensation program is designedCompany’s Common Stock with the SEC. Based solely on our review of copies of such forms furnished to reinforce our pay-for-performance culture. Payouts under our Annual Bonus Plan and LTIP are earned only if the Company performs.and written representations that no other reports were required during the 2018 fiscal year, we believe that during the 2018 fiscal year, the persons subject to Section 16(a) reporting complied with all applicable SEC filing requirements, except as previously disclosed in the 2018 Proxy Statement.

 

72

2016 Proxy StatementFoot Locker , Inc  |  85.
 

Proposal 5

 

 

Earned PayoutsProposals for Performance.Based upon the Company’s performance, payments were made to the named executive officers under the Annual Bonus Plan for 2015. LTIP payouts were earned for the 2014-15 performance measurement period and will be paid outInclusion in 2017. As described on Page 36 of the CD&A, our LTIP is based on a two-year performance measurement period with an additional one-year vesting period, payable one-half in cash and one-half in equity under the Stock Incentive Plan if the goals are achieved. Beginning with the 2016-17 performance measurement period, earned awards under the LTIP will be paid out 25% in cash and 75% in equity.2020 Proxy Materials

 

The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers as a whole, as described in this Proxy Statement in accordance with the SEC’s compensation disclosure rules. The vote is advisory, which means that the vote is not binding on the Company, our Board or the Compensation Committee. Our Board and the Compensation Committee value the opinions of all of our shareholders. The Compensation Committee will review and consider the results of this advisory vote.

The Board recommends approval of the following resolution:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the Company’s Proxy Statement for the 2016 Annual Meeting of Shareholders pursuant to the SEC’s compensation disclosure rules, including the CD&A, the 2015 Summary Compensation Table, and the other related tables and disclosures.”

The Board recommends a voteFORProposal 5.

86  |  2016 Proxy Statement

Proposal 6: Advisory Vote on Frequency of Executive Compensation Vote

The Company is presenting the following proposal, which gives shareholders the opportunity to vote on a nonbinding, advisory basis, for their preference as to how frequently we should seek future advisory votes on the compensation of our named executive officers as disclosed pursuant to the SEC’s compensation disclosure rules (“Say-on-Pay”). By voting on this Proposal 6, shareholders may indicate whether they would prefer that we conduct future advisory votes on executive compensation every one, two, or three years.

Consistent with the views our shareholders expressed in 2011, we have held our Say-on-Pay vote every year since then. The Board is recommending that the annual Say-on-Pay vote be continued so that shareholders may continue to provide timely, direct input on our executive compensation program. The vote is advisory, which means that the vote is not binding on the Company, our Board, or the Compensation Committee. Our Board and the Compensation Committee value the opinions of all of our shareholders. The Compensation Committee will review and consider the results of this advisory vote. The Board recommends that you vote for the one-year interval for the advisory vote on executive compensation.

 

The Board recommends a vote for holding
an advisory vote on the compensation of our
named executive officersEVERY ONE YEAR.

2016 Proxy Statement  |  87

Deadlines and Procedures for Nominations and Shareholder Proposals

SEC Rule 14a-8

Under SEC Rule 14a-8, if a shareholder would like us to include a proposal in our proxy statement and form of proxy for the 20172020 Annual Meeting, our Secretary must receive the proposal at our corporate headquarters at 330 West 34th Street, New York, New York 10001 byno later than December 9, 201614, 2019 in order to be considered for inclusion in the 20172020 proxy statement.

 

Director Nominations for Inclusion in our 2020 Proxy Materials (Proxy Access)

Under our proxy access by-law, a shareholder, or a group of up to 20 shareholders, owning at least 3% of the Company’s outstanding Common Stock continuously for at least three years as of the date of the notice of nomination, may nominate and include in the Company’s proxy materials director nominees constituting up to two individuals or 20% of the Board, whichever is greater (subject to certain limitations set forth in the By-Laws), provided that the shareholder(s) and nominee(s) satisfy the requirements specified in the By-Laws. Our Secretary must receive the notice of a proxy access nomination for the 2020 Annual Meeting at our corporate headquarters at 330 West 34th Street, New York, New York 10001 no earlier than November 14, 2019 and no later than December 14, 2019. You should carefully review the requirements specified in the Company’s By-Laws, which are available on the corporate governance section of the Company’s corporate website atfootlocker.com/corp. You may also obtain a printed copy of the By-Laws by writing to the Secretary at the Company’s headquarters.

Other Proposals or Nominations for the 2020 Annual Meeting

For any shareholder proposal that is not submitted under SEC Rule 14a-8, including nominations forand any nomination of directors not submitted pursuant to our By-lawsproxy access by-law provision, our By-Laws describe the procedures that must be followed. Under these procedures, we must receive notice of a shareholder’s intention to introduce a nomination or proposed item of business for an annual meeting not less than 90 days nor more than 120 days before the first anniversary of the prior year’s annual meeting. For 2017,the 2020 Annual Meeting, we must receive this notice no earlier than January 18, 201723, 2020 and no later than February 17, 2017,22, 2020, assuming that our 20172020 Annual Meeting is held on schedule. However, if we hold the 20172020 annual meeting on a date that is not within 3025 days before or after the first anniversary of the prior year’s Annual Meeting, then we must receive the notice no later than ten days after the earlier of the date we first provide notice of the meeting to shareholders or announce it publicly.

Proposals for nomination for directors and other items of business should be addressed to the Secretary, 330 West 34th Street, New York, New York 10001 and must contain the information specified in the Company’s By-Laws, which are available on the corporate governance section of our corporate website athttp://www.footlocker-inc.com/investors.cfm?page=corporate-governancefootlocker.com/corp or from the Secretary.

 

 By Order2019 Proxy Statement    

73

 

Q:What is included in these proxy materials?

A:The proxy materials include our 2019 Proxy Statement and 2018 Annual Report on Form 10-K. If you received printed copies of these materials by mail, these materials also include the proxy card for the 2019 Annual Meeting.

Q:May I obtain an additional copy of the 2018 Annual Report on Form 10-K?

A:You may obtain an additional copy of our 2018 Annual Report on Form 10-K without charge by writing to our Investor Relations Department at Foot Locker, Inc., 330 West 34th Street, New York, New York 10001. It is also available free of charge through our corporate website atfootlocker.com/corp.

Q:What constitutes a quorum for the Annual Meeting?

A:We will have a quorum and will be able to conduct the business of the Annual Meeting if the holders of a majority of the shares outstanding and entitled to vote are present at the meeting, either in person or by proxy. We will count abstentions and broker non-votes, if any, as present and entitled to vote in determining whether we have a quorum.

Q:Who may vote at the Annual Meeting?

A:Only shareholders of record on the books of the Company as of March 25, 2019 (the record date) are entitled to vote at the Annual Meeting and any adjournments or postponements of the meeting on the items of business described in this Proxy Statement. There were 112,310,616 shares of Common Stock outstanding as of March 25, 2019. Each share of Common Stock is entitled to one vote.

Q:Can I vote shares held in employee plans?

A:If you hold shares of the Company’s Common Stock through the Foot Locker 401(k) Plan or the Foot Locker Puerto Rico 1165(e) Plan, your proxy card includes the number of shares allocated to your plan account. Your proxy card will serve as a voting instruction card for these shares for the plan trustee to vote the shares. The trustee will vote only those shares for which voting instructions have been given. To allow sufficient time for voting by the trustees of these plans, your voting instructions must be received by 11:59 p.m. EDT on May 19, 2019.

Q:What proposals are shareholders voting on at this meeting and what are the voting recommendations of the Board of Directors
Sheilagh M. Clarke
Secretaryand the vote requirements to approve the proposals?

 

April 8, 2016

A:The proposals that you are being asked to vote on at the Annual Meeting, our Board’s voting recommendations, and the vote required to approve each proposal are as follows:

 

88  Proposal|  2016 Proxy Statement

Questions and Answers about this Annual Meeting and Voting

Q: What is included in these proxy materials?

A:The proxy materials include our 2016 Proxy Statement and 2015 Annual Report on Form 10-K. If you received printed copies of these materials by mail, these materials also include the proxy card for the 2016 Annual Meeting.

Q: May I obtain an additional copy of the 2015 Annual Report on Form 10-K?

A:You may obtain an additional copy of our 2015 Annual Report on Form 10-K without charge by writing to our Investor Relations Department at Foot Locker, Inc., 330 West 34th Street, New York, New York 10001. It is also available free of charge through our corporate website athttp://www.footlocker-inc.com/investors.cfm?page=corporate-governance.

Q: What constitutes a quorum for the Annual Meeting?

A:We will have a quorum and will be able to conduct the business of the Annual Meeting if the holders of a majority of the shares outstanding and entitled to vote are present at the meeting, either in person or by proxy. We will count abstentions and broker non-votes, if any, as present and entitled to vote in determining whether we have a quorum.

Q: What is the record date for this meeting?

A:The record date for this meeting is March 21, 2016. If you were a Foot Locker shareholder on this date, you are entitled to vote on the items of business described in this Proxy Statement.

Q: Who may vote at the Annual Meeting?

A:Each share of Common Stock is entitled to one vote. Only shareholders of record on the books of the Company as of March 21, 2016 are entitled to vote at the Annual Meeting and any adjournments or postponements. There were 136,094,471 shares of Common Stock outstanding as of March 21, 2016.

Q: Can I vote shares held in employee plans?

A:If you hold shares of Foot Locker Common Stock through the Foot Locker 401(k) Plan or the Foot Locker Puerto Rico 1165(e) Plan, your proxy card includes the number of shares allocated to your plan account. Your proxy card will serve as a voting instruction card for these shares for the plan trustee to vote the shares. The trustee will vote only those shares for which voting instructions have been given. To allow sufficient time for voting by the trustees of these plans, your voting instructions must be received by 11:59 p.m. EDT on May 15, 2016.

2016 Proxy Statement  |  89

Questions and Answers

Q: What proposals are shareholders voting on at this meeting and what are the voting recommendations of the Board and the vote requirements to approve the proposals?

A:The proposals that you are being asked to vote on at the Annual Meeting, our Board’s voting recommendations, and the vote required to approve each proposal are as follows:

 Board’s Voting
Proposal
Recommendation		 Vote Required to Approve
Proposal 1Elect ten members to the Board to serve for one-year terms Election of Six Directors to Serve for One-Year Terms✔FOR EACH
NOMINEE		Plurality of Votes Cast by Shareholders (please see our policy described on Page 9 regarding resignations by directors who do not receive more “For” votes than “Withheld” votes)
Proposal 2Ratification of the Appointment of KPMG LLP as Our Independent Registered Public Accounting Firm for 2016FOReach nominee Majority of Votes Cast by Shareholders
Proposal 3Approve, on an advisory basis, our NEOs’ compensation Reapproval of the Performance Goals under the Foot Locker Annual Incentive Compensation Plan, as Amended and Restated✔FOR Majority of Votes Cast by Shareholders
Proposal 4Ratify the appointment of KPMG LLP as our independent registered public accounting firm for the 2019 fiscal year Approval of the Foot Locker Long-Term Incentive Compensation Plan, as Amended and Restated✔FORMajority of Votes Cast by Shareholders
Proposal 5Advisory Approval of the Compensation of our Named Executive OfficersFORMajority of Votes Cast by Shareholders
Proposal 6Advisory Vote on Whether the Shareholder Vote to Approve the Compensation of our Named Executive Officers Should Occur Every 1, 2, or 3 YearsFOR EVERY
ONE YEAR		 Majority of Votes Cast by Shareholders

 

Q:Could other matters be voted on at the Annual Meeting?

Q: Could other matters be voted on at the Annual Meeting?

A:We do not know of any other business that will be presented at the 2019 Annual Meeting. If any other matters are properly brought before the meeting for consideration, then the persons named as proxies will have the discretion to vote on those matters for you using their best judgment.

A:We do not know of any other business that will be presented at the 2016 Annual Meeting. If any other matters are properly brought before the meeting for consideration, then the persons named as proxies will have the discretion to vote on those matters for you using their best judgment.

74

Foot Locker , Inc.

 

Q: What happens if I do not vote my shares?

A:This depends on how you hold your shares and the type of proposal. If you hold your shares in “street name,” such as through a bank or brokerage account, it is important that you cast your vote if you want it to count for Proposals 1, 3, 4, 5, and 6. If you do not instruct your bank or broker how to vote your shares on these proposals, no votes will be cast on your behalf because the broker does not have discretionary authority to vote. This is called a “broker non-vote.” With regard to Proposal 2, your bank or broker will have discretion to vote any uninstructed shares for this proposal.

 

If you are a “shareholder of record” where your stock ownership is reflected directly on the booksQuestions and records of the Company’s transfer agent, or if you hold your shares through the Foot Locker 401(k) Plan or Foot Locker 1165(e) Plan, no votes will be cast on your behalf on any of the proposals if you do not cast your vote.Answers about this Annual Meeting and Voting

 

90  |  2016 Proxy StatementQ:What happens if I do not vote my shares?

Questions and Answers

Q: How will the votes be counted?

A:Votes will be counted and certified by an independent inspector of election.

Votes withheld for the election of one or more of the nominees for director will not be counted as votes cast for them. If you abstain from voting or there is a broker non-vote on any matter, your abstention or broker non-vote will not affect the outcome of such vote because abstentions and broker non-votes are not considered to be votes cast.

The Company’s Certificate of Incorporation and By-laws do not contain any provisions on the effect of abstentions or broker non-votes.

Q: How do I vote my shares?

A:You may vote using any of the following methods:

 

TelephoneA:Scanning Ballot
This depends on how you hold your shares and the type of proposal. If you are located within the United States or Canada, you can votehold your shares by calling 1-800-690-6903in “street name,” such as through a bank or brokerage account, it is important that you cast your vote if you want it to count for Proposals 1 and following the recorded instructions. Telephone voting is available 24 hours a day and will be accessible until 11:59 p.m. EDT on May 17, 2016.The telephone voting system has easy to follow instructions and allows you to confirm that the system has properly recorded your vote. 2. If you vote bytelephone, you do NOT need toreturn a proxy cardnot instruct your bank or votinginstruction form.You may also choose to scan the QR Code provided to youbroker regarding how to vote your shares, no votes will be cast on your behalf on Proposals 1 and 2 because the broker does not have discretionary authority to vote. This is called a “broker non-vote.” Your bank or broker will have discretion to vote any uninstructed shares on Proposal 3.

If you are a “shareholder of record,” meaning your stock ownership is reflected directly on the books and records of the Company’s transfer agent, or if you hold your shares through the Internet with your mobile device. Internet voting is available 24 hours a day andFoot Locker 401(k) Plan or Foot Locker 1165(e) Plan, no votes will be accessible until 11:59 p.m. EDTcast on May 17, 2016.Youyour behalf on any of the proposals if you do not cast your vote.

Q:How will the votes be counted?

A:Votes will be ablecounted and certified by an independent inspector of election.

If you abstain from voting or there is a broker non-vote on any matter, your abstention or broker non-vote will not affect the outcome of such vote because abstentions and broker non-votes are not considered to confirm thatbe votes cast.

Q:Can I change my mind after voting my shares?

A:Yes, you may revoke your proxy at any time before it is used by:

●sending a written notice to the system has properly recorded your vote.You do NOT need to returnSecretary at the Company’s corporate headquarters,

●delivering a valid proxy card or voting instruction form if you scan your QR code to vote.with a later date,

You may also●providing a later-dated vote by telephone or internet, or

●voting by ballot at the Annual Meeting if you decideMeeting.

Q:Will my vote be confidential?

A:Yes, we maintain the confidentiality of our shareholders’ votes. All proxy cards, electronic voting, voting instructions, ballots, and voting tabulations identifying shareholders are kept confidential from the Company, except:

●as necessary to satisfy any applicable legal requirements,

●when a shareholder requests disclosure or writes a comment on a proxy card,

●in a contested proxy solicitation, and

●to allow independent inspectors of election to tabulate and certify the vote.

Q:Do I need an admission ticket or proof of share ownership to attend in person. the Annual Meeting?

A:Yes, attendance at the meeting will be limited to shareholders as of March 25, 2019 (or their authorized representatives) having an admission ticket or proof of their share ownership, and guests of the Company. If you plan to attend the meeting, please indicate this when you vote, and we will promptly mail an admission ticket to you.

If your shares are held in the name of a bank, broker, or other holder of record you must obtain a proxy, executed in your favor, from the holder of record to be able to vote at the meeting. Ifand you plan tovote attend the meeting, you can obtain an admission ticket in advance by ballotproviding proof of your ownership, such as a brokerage account statement, to the Secretary at the AnnualMeeting,Foot Locker, Inc., 330 West 34th Street, New York, New York 10001. If you do not needhave an admission ticket, you must show proof of your ownership of the Company’s Common Stock at the registration table at the Annual Meeting.

Q:Who pays the cost of this proxy solicitation?

A:We will pay for the cost of the solicitation of proxies, including the preparation, printing, and mailing of the proxy materials.

Proxies may be solicited, without additional compensation, by our directors, officers, or employees by mail, telephone, facsimile, in person, or otherwise. We will request banks, brokers, and other custodians, nominees, and fiduciaries toreturn deliver proxy materials to the beneficial owners of the Company’s Common Stock and obtain their voting instructions, and we will reimburse those firms for their expenses under both SEC and NYSE rules. In addition, we have retained Innisfree M&A Incorporated to assist us in the solicitation of proxies for a fee of $12,500 plus out-of-pocket expenses.

2019 Proxy Statement    

75

Questions and Answers about this Annual Meeting and Voting

Q:Why did I receive a Notice of Internet Availability of Proxy Materials but no proxy materials?

A:We are furnishing proxy materials to our shareholders primarily over the internet under the SEC’s notice and access rules instead of mailing full sets of the printed materials. We believe that this procedure reduces costs, provides greater flexibility to our shareholders, and lessens the environmental impact of our Annual Meeting. On or about April 12, 2019, we started mailing a Notice of Internet Availability of Proxy Materials (the “Foot Locker Notice”) to most of our shareholders in the United States. The Foot Locker Notice contains instructions on how to access and read our 2019 Proxy Statement and our 2018 Annual Report on Form 10-K on the internet and to vote online. If you received a Foot Locker Notice by mail, you will not receive paper copies of the proxy materials in the mail, unless you request them. If you received a Foot Locker Notice by mail and would like to receive a printed copy of the materials, please follow the instructions on the Foot Locker Notice for requesting the materials, and we will promptly mail the materials to you.

We are mailing to shareholders, or making available to shareholders via the internet, this Proxy Statement, form of proxy card, and our 2018 Annual Report on Form 10-K on or about April 12, 2019.

Q:What is “householding” and how does it affect me?

A:The Company has adopted the “householding” procedure approved by the SEC, which allows us to deliver one set of documents to a household of shareholders instead of delivering a set to each shareholder in a household, unless we have been instructed otherwise. This procedure is more environmentally friendly and cost-effective because it reduces the number of copies to be printed and mailed. Shareholders who receive proxy materials in paper form will continue to receive separate proxy cards/votinginstruction form.forms to vote their shares. Shareholders who receive the Foot Locker Notice will receive instructions on submitting their proxy cards/voting instruction form via the internet.

If you would like to change your householding election, request that a single copy of the proxy materials be sent to your address, or request a separate copy of the proxy materials, please contact Broadridge Financial Solutions, Inc., by calling (866) 540-7095 or by writing to Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717. We will promptly deliver the proxy materials to you upon receipt of your request. If you hold your shares in street name, please contact your bank, broker, or other record holder to request information about householding.

Q:Where is the location of the 2019 Annual Meeting?

A:The annual meeting will be held at NYC33, 125 West 33rd Street, New York, New York 10001 (located between 6th Avenue and 7th Avenue).

 

Directions

By subway

Take any of these subway lines: the A, B, C, D, E, F, M, N, Q, R, or W, or the Number 1, 2, or 3 trains to 34th Street. The A, C, E, 1, 2, and 3 trains stop at 34th Street-Penn Station. The B, D, F, M, N, Q, R, and W trains stop at 34th Street-Herald Square. NYC33 is on the north side of 33rd Street between 6th Avenue and 7th Avenue.

By car

NYC33 is on the north side of 33rd Street between 6th Avenue and 7th Avenue.

By Order of the Board of Directors

Sheilagh M. Clarke

Senior Vice President, 

General Counsel and Secretary 

April 12, 2019


76

Foot Locker , Inc.

 

Y O U R   V O T E   I S   V E R Y   I M P O R T A N T
P L E A S E   V O T E   Y O U R   P R O X Y

Thank you
 
for being a shareholder and for
your trust in Foot Locker, Inc.

 

FOOT LOCKER, INC.
330 WEST 34TH STREET
NEW YORK, NY 10001

VOTE BY INTERNET -www.proxyvote.com or scan the QR Barcode above

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Follow the instructions to obtain your records and to create an electronic voting instruction form.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E65654-P16270-Z73729KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
 Mail
     
You can also choose to vote your shares through the Internet atwww.proxyvote.com. Internet voting is available 24 hours a day and will be accessible until 11:59 p.m. EDT on May 17, 2016. As with telephone voting, you will be able to confirm that the system has properly recorded your vote.If you vote via theInternet, you do NOT need toreturn a proxy card or votinginstruction form.If you received printed copies of the proxy materials by mail, you may choose to vote by mail. Simply mark your proxy card or voting instruction form, date and sign it, and return it in the postage-paid envelope that we included with your materials.

All shares that have been properly voted and not revoked will be voted at the Annual Meeting. If you sign and return a proxy card but do not give voting instructions, the shares represented by that proxy card will be voted as recommended by the Board.

2016 Proxy Statement  |  91

Questions and Answers

Q: Can I change my mind after voting my shares?

A:You may revoke your proxy at any time before it is used by (i) sending a written notice to the Company at its corporate headquarters, (ii) delivering a valid proxy card with a later date, (iii) providing a later dated vote by telephone or Internet, or (iv) voting by ballot at the Annual Meeting.

Q: Will my vote be confidential?

A:We maintain the confidentiality of our shareholders’ votes. All proxy cards, electronic voting, voting instructions, ballots, and voting tabulations identifying shareholders are kept confidential from the Company, except:

•as necessary to meet any applicable legal requirements,
•when a shareholder requests disclosure or writes a comment on a proxy card,
•in a contested proxy solicitation, and
•to allow independent inspectors of election to tabulate and certify the vote.

Q: Do I need a ticket to attend the Annual Meeting?

A:You will need an admission ticket to attend the Annual Meeting. Attendance at the meeting will be limited to shareholders as of March 21, 2016 (or their authorized representatives) having an admission ticket or proof of their share ownership, and guests of the Company. If you plan to attend the meeting, please indicate this when you are voting by telephone or Internet or check the box on your proxy card, and we will promptly mail an admission ticket to you.

If your shares are held in the name of a bank, broker, or other holder of record and you plan to attend the meeting, you can obtain an admission ticket in advance by providing proof of your ownership, such as a bank or brokerage account statement, to the Secretary at Foot Locker, Inc., 330 West 34th Street, New York, New York 10001. If you do not have an admission ticket, you must show proof of your ownership of the Company’s Common Stock at the registration table at the door.

Q: Who pays the cost of this proxy solicitation?

A:We will pay for the cost of the solicitation of proxies, including the preparation, printing, and mailing of the proxy materials.

Proxies may be solicited, without additional compensation, by our directors, officers, or employees by mail, telephone, fax, in person, or otherwise. We will request banks, brokers, and other custodians, nominees, and fiduciaries to deliver proxy materials to the beneficial owners of Foot Locker’s Common Stock and obtain their voting instructions, and we will reimburse those firms for their expenses under both SEC and NYSE rules. In addition, we have retained Innisfree M&A Incorporated to assist us in the solicitation of proxies for a fee of $12,500 plus out-of-pocket expenses.

Q: Why did I receive a Notice of Internet Availability of Proxy Materials but no proxy materials?

A:We are furnishing proxy materials to our shareholders primarily over the Internet under the SEC’s notice and access rules instead of mailing full sets of the printed materials. We believe that this procedure reduces costs, provides greater flexibility to our shareholders, and lessens the environmental impact of our Annual Meeting. On or about April 8, 2016, we started mailing to most of our shareholders in the United States a Notice of Internet Availability of Proxy Materials (the “Foot Locker Notice”). The Foot Locker Notice contains instructions on how to access and read our 2016 Proxy Statement and our 2015 Annual Report to Shareholders on the Internet and to vote online.If you received a Foot Locker Notice by mail, you will not receive paper copies of the proxy materials in the mail unless you request them.Instead, the Foot Locker Notice instructs you on how to access and read the Proxy Statement and Annual Report and how you may submit your proxy over the Internet. If you received a Foot Locker Notice by mail and would like to receive a printed copy of the materials, please follow the instructions on the Foot Locker Notice for requesting the materials, and we will promptly mail the materials to you.

92  |  2016 Proxy Statement

Questions and Answers

We are mailing to shareholders, or making available to shareholders via the Internet, this Proxy Statement, form of proxy card, and our 2015 Annual Report on Form 10-K on or about April 8, 2016.

Q: Where is the location of the 2016 Annual Meeting?

A:As we have moved our corporate headquarters, this year’s annual meeting will be held nearby at AMC Loews Theatre, 312 West 34th Street, New York, New York 10001 (located between 8th Avenue and 9th Avenue).

Directions

By subway

Take any of the A, C, E, 1, 2, or 3 subway lines to 34th Street–Penn Station. AMC Loews Theatre is on the south side of 34th Street between 8th Avenue and 9th Avenue.

By car or taxi

Take the Lincoln Tunnel into New York City, following the signs for 34th Street. Turn left onto West 34th Street. AMC Loews Theatre is on the south side of 34th Street between 8th Avenue and 9th Avenue.

2016 Proxy Statement  |  93

Appendix A

Foot Locker Long-Term Incentive Compensation Plan

Amended and Restated as of March 23, 2016

Effective as of February 1, 1981, the Board of Directors of Foot Locker Specialty, Inc. adopted a Long-Term Incentive Compensation Plan (the “Plan”) for certain executives of Foot Locker Specialty, Inc. and its subsidiaries. Effective as of August 7, 1989, Foot Locker, Inc. (“Foot Locker” or the “Company”) adopted the Plan, as amended. The Plan has been amended and restated from time to time, and in accordance with the requirements of “Section 162(m) of the Code” (as defined below), the performance goals under the Plan were initially approved at the 1996 annual meeting of shareholders and were reapproved in 2001, 2006 and 2011. The Plan is again amended and restated as of March 23, 2016 in the form set forth below, subject to shareholder approval of the performance goals set forth herein at the 2016 annual meeting of shareholders.

The objectives of the Plan are:

(a) to reinforce corporate organizational and business-development goals.

(b) to promote the achievement of year-to-year and long-range financial and other business objectives such as high quality of service and product, improved productivity and efficiencies for the benefit of our customers’ satisfaction and to assure a reasonable return to Foot Locker’s shareholders.

(c) to reward the performance of individual executives in fulfilling their personal responsibilities for long-range achievements.

(d) to serve as a qualified performance-based compensation program under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) or any successor section and the Treasury regulations promulgated thereunder (“Section 162(m) of the Code”).

(e) to award shares of Common Stock (as defined below) after attainment of pre-established performance goals and completion of the Performance Period (as defined below), which shall be considered “Other Stock-Based Awards” under the Foot Locker 2007 Stock Incentive Plan, amended and restated as of May 21, 2014, and as further amended from time to time, or other applicable stock incentive plan of the Company (the “Stock Incentive Plan”).

1.Definitions.The following terms, as used herein, shall have the following meanings:

(a)“Annual Base Salary”shall mean the annual base salary approved by the Committee with respect to the executive at the time the performance goals are established by the Committee, as described in Section 5(b) hereof without reduction for any amounts withheld pursuant to participation in a “cafeteria plan” under Section 125 of the Code, a cash or deferred arrangement under Section 401(k) of the Code or a qualified transportation arrangement under Section 132(f) of the Code. Notwithstanding the foregoing in the event of an executive’s promotion during a Performance Period, such participant’s Annual Base Salary shall reflect any salary increase paid as a result of the participant’s promotion.

(b)“Board”shall mean the Board of Directors of Foot Locker.

2016 Proxy Statement  |  A-1

(c)“Change in Control”shall mean any of the following: (i) the merger or consolidation of the Company with, or the sale or disposition of all or substantially all of the assets of the Company to, any person other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or parent entity) fifty percent (50%) or more of the combined voting power of the voting securities of the Company or such surviving or parent entity outstanding immediately after such merger or consolidation; or (B) a merger or capitalization effected to implement a recapitalization of the Company (or similar transaction) in which no person is or becomes the beneficial owner, directly or indirectly (as determined under Rule 13d-3 promulgated under the Securities Exchange Act of 1934), of securities representing more than the amounts set forth in (ii) below; (ii) the acquisition of direct or indirect beneficial ownership (as determined under Rule 13d-3 promulgated under the Securities Exchange Act of 1934), in the aggregate, of securities of the Company representing thirty-five percent (35%) or more of the total combined voting power of the Company’s then issued and outstanding voting securities by any person acting in concert; or (iii) during any period of not more than twelve (12) months, individuals who at the beginning of such period constitute the Board of Directors of the Company (referred to herein as the “Board”), and any new director whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (?) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof.

(d)“Committee”shall mean two or more members of the Compensation Committee of the Board, each of whom is an “outside director” within the meaning of Section 162(m) of the Code.

(e)“Common Stock”shall mean common stock of Foot Locker, par value $0.01 per share.

(f)“Consolidated Net Income”shall mean the net income of Foot Locker and its subsidiaries for each fiscal year determined in accordance with generally accepted accounting principles and reported upon by Foot Locker’s independent accountants but before provision for accrued expenses net of the related income tax reduction for payments to be made pursuant to this Plan.

(g)“Fair Market Value”of a share of Common Stock shall mean the average of the closing prices of a share of such Common Stock as reported on the Composite Tape for the New York Stock Exchange during the sixty (60) day period immediately preceding the payment date relating to the applicable Performance Period.

(h)“Individual Target Award”shall mean the targeted performance award for a Plan Year specified by the Committee as provided in Section 5 herein.

(i)“Performance Period”shall mean the period of three consecutive Plan Years or such other period as determined by the Committee, beginning with the Plan Year in which the award is made.

(j)“Plan Year”shall mean Foot Locker’s fiscal year during which the Plan is in effect.

2.Administration of the Plan.The Plan shall be administered by the Committee. No member of the Committee while serving as such shall be eligible for participation in the Plan. The Committee shall have exclusive and final authority in all determinations and decisions affecting the Plan and its participants. The Committee shall also have the sole authority to interpret the Plan, to establish and revise rules and regulations relating to the Plan, to delegate such responsibilities or duties as it deems desirable, and to make any other determination that it believes necessary or advisable for the administration of the Plan including, but not limited to: (i) approving the designation of eligible participants; (ii) setting the performance criteria within the Plan guidelines; and (iii) certifying attainment of performance goals and other material terms. To the extent any provision of the Plan, other than Section 7 herein, creates impermissible discretion under Section 162(m) of the Code or would otherwise violate Section 162(m) of the Code, such provision shall have no force or effect.

A-2  |  2016 Proxy Statement

3.Participation.Participation in the Plan is limited to officers or other key employees of Foot Locker or any subsidiary thereof, as selected by the Committee in its sole discretion. The Committee may from time to time designate additional participants who satisfy the criteria for participation as set forth herein, and shall determine when an officer or key employee of Foot Locker ceases to be a participant in the Plan.

4.Right to Payment.Unless otherwise determined by the Committee in its sole discretion, a participant shall have no right to receive payment under this Plan unless the participant remains in the employ of Foot Locker at all times during the applicable Performance Period; provided, however, that notwithstanding any other provision of the Plan, the Committee may make a pro-rata payment following the end of the Performance Period to any participant in circumstances the Committee deems appropriate including, but not limited to a participant’s death, disability, retirement, or other termination of employment during the Performance Period, provided the performance goals for the Performance Period are met. Furthermore, upon a Change in Control the Committee may, in its sole discretion, but only to the extent permitted under Section 162(m) of the Code (if applicable), make a payment to any participant who is a participant at the time of such Change in Control, on the date of the Change in Control, or as soon as practicable thereafter, and prior to the end of the Performance Period (to the extent determinable), which is equal to or less than the pro-rata portion (through the date of the Change in Control) of the Individual Target Award based on (a) the actual performance results achieved relative to the Performance Period’s performance goals with respect to the period from the commencement of the Performance Period to the date of the Change in Control, and (b) the performance results that would have been achieved had the Performance Period’s Target been met for the balance of such Performance Period. Any pro-ration required hereunder shall be based on a fraction, the numerator of which is the number of months completed before the termination of employment or Change in Control, as the case may be, and the denominator of which is the number of months in the Performance Period.

5.Payment.

(a) Payment to a participant under this Plan for each Performance Period shall be made in cash, shares of the Company’s Common Stock, or any combination thereof, as determined by the Committee for each Performance Period. If payment is to be made in shares of the Company’s Common Stock, the number of shares of Common Stock shall be determined by the Committee by dividing the achieved percentage of such participant’s Annual Base Salary payable in Common Stock (as determined by the Committee for each Performance Period) by the Fair Market Value of the Common Stock on the date of payment as determined in accordance with Section 4 or 6 herein. Such achieved percentage shall be based on the participant’s achievement of his or her Individual Target Award. Except to the extent provided for in Section 4 hereof, payment shall be made only if and to the extent the relevant performance goals with respect to the Performance Period are attained. Awards of Common Stock made pursuant to this Plan are Other Stock-Based Awards (as defined in the Stock Incentive Plan) and are issued under and subject to, the applicable provisions of the Stock Incentive Plan including, without limitation, Section 9 (Other Stock-Based Awards) and Section 5 (Stock Subject to the Plan; Limitation on Grants). In the event that any payment results in other than a whole number of shares of Common Stock, the value of the fractional share of Common Stock shall be paid in cash.

(b) At the beginning of each Performance Period (or within the time period prescribed by Section 162(m) of the Code), the Committee shall establish all performance goals and the Individual Target Awards for such Performance Period and Foot Locker shall inform each participant of the Committee’s determination with respect to such participant for such Performance Period. Individual Target Awards shall be expressed as a percentage of such participant’s Annual Base Salary. At the time the performance goals are established, the Committee shall prescribe a formula to determine the percentage of the Individual Target Award which may be payable based upon the degree of attainment of the performance goals during the Performance Period.

2016 Proxy Statement  |  A-3

(c) Notwithstanding anything to the contrary contained in this Plan,

(1) the performance goals in respect of awards granted to participants hereunder, shall be based on one or more of the following criteria:

(i) the attainment of certain target levels of, or percentage increase in, pre-tax profit;

(ii) the attainment of certain target levels of, or percentage increase in, division profit;

(iii) the attainment of certain target levels of, or a percentage increase in, after-tax profits of Foot Locker (or a subsidiary, division, or other operational unit of Foot Locker);

(iv) the attainment of certain target levels of, or a specified increase in, operational cash flow or economic value added of Foot Locker (or a subsidiary, division, or other operational unit of Foot Locker);

(v) the achievement of a certain level of, reduction of, or other specified objectives with regard to limiting the level of increase in, all or a portion of, Foot Locker’s bank debt or other long-term or short-term public or private debt or other similar financial obligations of Foot Locker, if any, which may be calculated net of such cash balances and/or other offsets and adjustments as may be established by the Committee;

(vi) the attainment of a specified percentage increase in earnings per share or earnings per share from continuing operations of Foot Locker (or a subsidiary, division or other operational unit of Foot Locker);

(vii) the attainment of certain target levels of, or a specified percentage increase in, revenues, net income, or earnings before (A) interest, (B) taxes, (C) depreciation and/or (D) amortization, of Foot Locker (or a subsidiary, division, or other operational unit of Foot Locker);

(viii) the attainment of certain target levels of, or a specified increase in, return on invested capital or return on investment;

(ix) the attainment of certain target levels of, or a percentage increase in, after-tax or pre-tax return on shareholders’ equity of Foot Locker (or any subsidiary, division or other operational unit of Foot Locker);

(x) the attainment of a certain target level of, or reduction in, selling, general and administrative expense as a percentage of revenue of Foot Locker (or any subsidiary, division or other operational unit of Foot Locker);

(xi) the attainment of a certain target level of, or percentage increase in, Consolidated Net Income;

(xii) the attainment of certain target levels of, or a specified increase in, enterprise value or value creation targets of Foot Locker (or any subsidiary, division or other operational unit of Foot Locker);

(xiii) the attainment of a certain target level of, or a specified increase in, gross or operating margins of Foot Locker (or any subsidiary, division or other operational unit of Foot Locker); and

(xiv) the attainment of certain target levels of, or a specified increase in, the fair market value of the shares of Common Stock or total shareholder return, including the value of an investment in Common Stock assuming the reinvestment of dividends.

In addition, performance goals may be based upon the attainment of specified levels of Foot Locker (or a subsidiary, division or other operational unit of Foot Locker) performance under one or more of the measures described above relative to the performance of other corporations. The Committee may designate additional business criteria on which the performance goals may be based or adjust, modify, or amend those criteria.

A-4  |  2016 Proxy Statement

(2) To the extent permitted under Section 162(m) of the Code, unless otherwise determined by the Committee at the time the performance goals are set and incorporated into the performance goals, the Committee shall exclude the impact of any of the following events or occurrences:

(i) restructurings, discontinued operations, extraordinary items or other special, unusual or non-recurring items or charges;

(ii) any acquisition or divestiture of an operating business during the Plan Year or Performance Period;

(iii) impairment charges taken under relevant accounting rules;

(iv) an event either not directly related to the operations of the Company (or any subsidiary, division or other operational unit of the Company) or not within the reasonable control of the Company’s management; or

(v) a change in tax law or accounting standards required by generally accepted accounting principles.

(3) In no event shall payment in respect of an award granted for a Performance Period be made to a participant as of the end of such Performance Period in a dollar value which exceeds the lesser of (i) 300% of such participant’s Annual Base Salary or (ii) $5,000,000.

6.Time of Payment.Subject to Section 4 herein, all payments earned by participants under the Plan shall be based on the achievement of performance goals established by the Committee and will be paid in accordance with Section 5 herein after performance goal achievements for the Performance Period have been finalized, reviewed, approved and certified by the Committee, but in no event later than two and one-half months following the end of the fiscal year for the last year of the applicable Performance Period. Foot Locker’s independent accountants shall examine as of the close of the Performance Period and communicate the results of such examination to the Committee as to the appropriateness of the proposed payments under the Plan.

7.Interim Participation.Notwithstanding anything else herein, the Committee may, in its sole discretion, grant an award hereunder to a participant who commences employment with Foot Locker during a Plan Year. Such award is not required to satisfy the exception for performance-based compensation set forth in Section 162(m) of the Code.

8.Miscellaneous Provisions.

(a) A participant’s rights and interests under the Plan may not be sold, assigned, transferred, pledged or alienated.

(b) In the case of a participant’s death, payment, if any, under the Plan shall be made to his or her designated beneficiary, or in the event no beneficiary is designated or surviving, to the participant’s estate.

(c) Neither the Plan nor any action taken hereunder shall be construed as giving any employee any right to be retained in the employ of Foot Locker or any subsidiary.

(d) Foot Locker and any of its subsidiaries shall have the right to make such provisions as it deems necessary or appropriate to satisfy any obligations it may have to withhold federal, state or local income or other taxes incurred by reason of payments made pursuant to the Plan.

(e) Except with regard to an award made pursuant to Section 7 herein, the Plan is designed and intended to comply with Section 162(m) of the Code and all provisions hereof shall be limited, construed and interpreted in a manner to so comply.

2016 Proxy Statement  |  A-5

(f) While neither Foot Locker nor any of its subsidiaries guarantee any particular tax treatment, the Plan is designed and intended to comply with the short-term deferral rules under Section 409A of the Code and the applicable regulations thereunder and shall be limited, construed and interpreted with such intent. All amounts payable under the Plan shall be payable within the short-term deferral period in accordance with Section 409A and regulations issued thereunder.

(g) The Board or the Committee may at any time and from time to time alter, amend, suspend or terminate the Plan in whole or in part; provided, that, no amendment which requires shareholder approval in order for the Plan to continue to comply with the exception for performance based compensation under Section 162(m) of the Code shall be effective unless the same shall be approved by the requisite vote of the shareholders of Foot Locker as determined under Section 162(m) of the Code. Notwithstanding the foregoing, no amendment shall affect adversely any of the rights of any participant, without such participant’s consent, under the award theretofore granted under the Plan.

(h) Notwithstanding anything herein to the contrary, amounts payable hereunder shall be subject to Foot Locker’s clawback policy with respect to the recovery of incentive compensation to the extent and in the manner provided therein.

A-6  |  2016 Proxy Statement

Thank youforbeing a shareholder
and for the trust you have in Foot Locker, Inc.
Y O U R  V O T E  I S  I M P O R T A N T
P L E A S E  V O T E  Y O U R  P R O X Y

FOOT LOCKER, INC.
330 WEST 34TH STREET
NEW YORK, NY 10001

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VIEW MATERIALS & VOTE

 

VOTE BY INTERNET -www.proxyvote.com or scan the QR Barcode above

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Follow the instructions to obtain your records and to create an electronic voting instruction form.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.


TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

E01289-P75627-Z67382KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

FOOT LOCKER, INC.   
    

A

Proposals - The Board of Directors recommends a vote FOR EACH NOMINEE for Director in Proposal 1.   
     
1.Election of SixTen Directors to Serve for One-Year Terms.   
      
 Nominees:For Withhold
      
  1a.  1a.  Maxine Clark£☐ £☐
      
  1b.1b.  Alan D. Feldman£☐ £☐
      
  1c.1c.  Jarobin Gilbert, Jr.Richard A. Johnson☐ ££☐
      
  1d.1d.  Richard A. JohnsonGuillermo G. Marmol☐ ££☐
      
  1e.1e.  Guillermo G. MarmolMatthew M. McKenna☐ ££☐
      
  1f.1f.  Dona D. YoungSteven Oakland☐ ££

☐

The Board of Directors recommends a vote FOR Proposals 2, 3, 4, and 5.ForAgainstAbstain
2.    Ratification of the Appointment of Independent Registered Public Accounting Firm.£££
3.Reapproval of the Performance Goals under the Foot Locker Annual Incentive Compensation Plan, as Amended and Restated.£££
4.Approval of the Foot Locker Long-Term Incentive Compensation Plan, as Amended and Restated.£££
5.Advisory Approval of the Company’s Executive Compensation.£££
The Board of Directors recommends a vote FOR EVERY ONE YEAR.1 Year2 Years3 YearsAbstain
6.    Advisory Vote Regarding Frequency of Advisory Approval of Executive Compensation.££££


For address changes and/or comments, please check this box and write them on the back where indicated.£
Please indicate if you plan to attend this meeting.££
      
  1g.Ulice Payne, Jr.☐☐
   Yes
 1h.Cheryl Nido Turpin☐ No☐
  
 1i.Kimberly Underhill☐☐
 1j.Dona D. Young☐☐
  
The Board of Directors recommends a vote FOR Proposals 2 and 3.ForAgainstAbstain
2.Advisory Approval of the Company’s Executive Compensation.☐☐☐
3.Ratification of the Appointment of Independent Registered Public Accounting Firm.☐☐☐
     
NOTE:Such other business as may properly come before the meeting or any adjournment thereof.   


Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
 
Signature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)Date

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report with Form 10-K are available atwww.proxyvote.com.

E01290-P75627-Z67382

FOOT LOCKER, INC.
Annual Meeting of Shareholders

May 18, 2016 at 9:00 A.M. Eastern Daylight Time

This proxy is solicited by the Board of Directors of Foot Locker, Inc.

Sheilagh M. Clarke, John A. Maurer, and Lauren B. Peters, or any of them, each with the power of substitution, are hereby authorized to vote the shares of the undersigned at the Annual Meeting of Shareholders of Foot Locker, Inc., to be held on May 18, 2016, at 9:00 A.M., local time, at AMC Loews Theatre, 312 West 34th Street, New York, New York 10001, and at any adjournment or postponement thereof, upon the matters set forth in Foot Locker, Inc.’s Proxy Statement and upon such other matters as may properly come before the Annual Meeting, voting as specified on the reverse side of this card with respect to the matters set forth in the Proxy Statement, and voting in the discretion of the above-named persons on such other matters as may properly come before the Annual Meeting.

IF YOU ARE NOT VOTING BY TELEPHONE OR INTERNET, PLEASE SIGN AND DATE THE REVERSE SIDE OF THIS PROXY CARD AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE. THE PERSONS NAMED ABOVE AS PROXIES CANNOT VOTE THE SHARES UNLESS YOU SIGN AND RETURN THIS CARD OR VOTE BY TELEPHONE OR INTERNET. YOU MAY SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS’ RECOMMENDATIONS.

EMPLOYEE PLANS

IF YOU ARE A PARTICIPANT IN THE FOOT LOCKER 401(k) PLAN OR THE FOOT LOCKER PUERTO RICO 1165(e) PLAN, BY SIGNING AND RETURNING THIS PROXY CARD (OR VOTING BY TELEPHONE OR INTERNET), YOU WILL AUTHORIZE THE PLAN TRUSTEES TO VOTE THOSE SHARES ALLOCATED TO YOUR ACCOUNT AS YOU HAVE DIRECTED.

Address Changes/Comments:   
    
    
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
    
Continued
For address changes and/or comments, please check this box and write them on the back where indicated.☐
Please indicate if you plan to be signed on reverse sideattend this meeting.☐☐
YesNo

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

 

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FOOT LOCKER, INC.
ANNUAL MEETING FOR HOLDERS AS OF 3/21/16
TO BE HELD ON 5/18/16
Your vote is important. Thank you for voting.

 
Read the Proxy Statement and have the voting instruction form below at hand. Please note that the telephone and Internet voting turns off at 11:59 p.m. ET the night before the meeting or cutoff date.
Vote by Internet:www.proxyvote.com, or scan the QR Barcode above.
  
Vote by Phone:Signature [PLEASE SIGN WITHIN BOX]1-800-454-8683Date
  
Vote by Mail:

Signature (Joint Owners)

Use the envelope enclosedDate

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Notice and Proxy Statement and Annual Report with Form 10-K are available atwww.proxyvote.com.

 

E65655-P16270-Z73729

 


TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:E01346-P75656

       
 

FOOT LOCKER, INC.

Annual Meeting of Shareholders
May 22, 2019 at 9:00 A.M. Eastern Daylight Time

 
Important Notice Regarding

This proxy is solicited by the AvailabilityBoard of Proxy Materials for the Shareholder Meeting. The following materials are available at www.proxyvote.com: Notice and Proxy Statement and Annual Report with Form 10-K

Directors of Foot Locker, Inc.

 
       
 

Sheilagh M. Clarke, John A. Maurer, and Lauren B. Peters, or any of them, each with the power of substitution, are hereby authorized to vote the shares of the undersigned at the Annual Meeting of Shareholders of Foot Locker, Inc., to be held on May 22, 2019, at 9:00 A.M., local time, at NYC33, 125 West 33rd Street, New York, New York 10001, and at any adjournment or postponement thereof, upon the matters set forth in Foot Locker, Inc.’s Proxy Statement and upon such other matters as may properly come before the Annual Meeting, voting as specified on the reverse side of this card with respect to the matters set forth in the Proxy Statement, and voting in the discretion of the above-named persons on such other matters as may properly come before the Annual Meeting.

 
       
 

 A IF YOU ARE NOT VOTING BY TELEPHONE OR INTERNET, PLEASE SIGN AND DATE THE REVERSE SIDE OF THIS PROXY CARD AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE. THE PERSONS NAMED ABOVE AS PROXIES CANNOT VOTE THE SHARES UNLESS YOU SIGN AND RETURN THIS CARD OR VOTE BY TELEPHONE OR INTERNET. YOU MAY SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS’ RECOMMENDATIONS.

Proposals - The Board of Directors recommends a vote FOR EACH NOMINEE for Director in Proposal 1.
   
 EMPLOYEE PLANS 
 1.Election of Six Directors to Serve for One-Year Terms.IF YOU ARE A PARTICIPANT IN THE FOOT LOCKER 401(k) PLAN OR THE FOOT LOCKER PUERTO RICO 1165(e) PLAN, BY SIGNING AND RETURNING THIS PROXY CARD (OR VOTING BY TELEPHONE OR INTERNET), YOU WILL AUTHORIZE THE PLAN TRUSTEES TO VOTE THOSE SHARES ALLOCATED TO YOUR ACCOUNT AS YOU HAVE DIRECTED. 
   
         
  Nominees: ForAddress Changes/Comments:Withhold
1a.  Maxine Clark££
1b.  Alan D. Feldman££
1c.  Jarobin Gilbert, Jr.££
1d.  Richard A. Johnson££
1e.  Guillermo G. Marmol££
1f.  Dona D. Young££

     
   
PLEASE “X” HERE ONLY IF YOU PLAN TO ATTEND THE MEETING AND VOTE THESE SHARES IN PERSON£
The Board of Directors recommends a vote FORForAgainstAbstain
Proposals 2, 3, 4, and 5.
2.    Ratification of the Appointment of Independent Registered Public Accounting Firm.£££
3.Reapproval of the Performance Goals under the Foot Locker Annual Incentive Compensation Plan, as Amended and Restated.£££
4.Approval of the Foot Locker Long-Term Incentive Compensation Plan, as Amended and Restated.£££
5.Advisory Approval of the Company’s Executive Compensation.£££
The Board of Directors recommends a vote FOR EVERY ONE YEAR.1 Year2 Years3 YearsAbstain
6.    Advisory Vote Regarding Frequency of Advisory Approval of Executive Compensation.££££
NOTE: Such other business as may properly come before the meeting or any adjournment thereof.     
         
         
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side

 

 

 
VOTING INSTRUCTIONS
As the record holder for your shares, we will vote your shares based on your instructions.
Please provide us with your voting instructions before the meeting. If you do not provide us with your voting instructions, we will vote your shares at our discretion on those proposals we are permitted to vote on by New York Stock Exchange rules.
If you sign and return this form, we will vote any unmarked items based on the board’s recommendations.
If your securities are held by a bank, your securities cannot be voted without your specific instructions.
FOOT LOCKER, INC.
THIS IS A VOTING INSTRUCTION FORM.
You are receiving this voting instruction form because you hold shares in theabove Security. You have the right to vote on proposals being presented at theupcoming Annual Meeting to be held on 05/22/19 at 09:00 A.M. EDT
Make your vote count.
Vote must be received by05/21/2019to be counted.
    
Visit
www.ProxyVote.com		Call
1-800-454-8683		Return this form
in the enclosed
postage-paid
envelope.		Vote in person
the day of the
meeting.
 Scan to view materials and vote via smartphone.
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Go to www.ProxyVote.com, enter the
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The following proxy material for the meeting are available at www.ProxyVote.com:
PROXY STATEMENT, ANNUAL REPORT

X
E74197-P16040
THIS VOTING INSTRUCTION FORM IS VALID ONLY WHEN SIGNED AND DATED. PLEASE USE BLUE OR BLACK INK AND RETURN ONLY THE BOTTOM PORTION.

FOOT LOCKER, INC.
The Board recommends you vote FOR the following proposal(s): 1 through 3
1.Election of Ten Directors to Serve for One-Year Terms.
NomineesForWithhold
1a.Maxine Clark☐☐
1b.Alan D. Feldman☐☐
1c.Richard A. Johnson☐☐
1d.Guillermo G. Marmol☐☐
1e.Matthew M. McKenna☐☐
1f.Steven Oakland☐☐
1g.Ulice Payne, Jr.☐☐
1h.Cheryl Nido Turpin☐☐
1i.Kimberly Underhill☐☐
1j.Dona D. Young☐☐
      
      
Yes No
HOUSEHOLDING ELECTION - Please indicate if you consent to receive certain future investor communications in a single package per household.☐ ☐

 
 Signature [PLEASE SIGN WITHIN BOX]Date
Please check this box if you plan to attend the Meeting and vote these shares in person.☐
ForAgainstAbstain
2.Advisory Approval of the Company’s Executive Compensation.☐☐☐
3.Ratification of the Appointment of Independent Registered Public Accounting Firm.☐☐☐
NOTE: Such other business as may properly come before the meeting or any adjournment thereof.