UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DCD.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.)
Filed by the Registrant x☒
Filed by a Party other than the Registrant ¨☐
Check the appropriate box:
☐ Preliminary Proxy Statement
☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material under §240.14a-12
LIFETIME BRANDS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)all boxes that apply):
☒ No fee required
☐ Fee paid previously with preliminary materials
☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
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MESSAGE FROM THE CHAIRMAN BOARD OF DIRECTORS |
Dear Fellow Stockholder:
I invite you to attendparticipate in our 2016 Annual Meeting of Stockholders on Thursday, June 9, 201622, 2023 at 10:30 a.m. Eastern Time, online via live webcast at our office, located at 1000 Stewart Avenue, Garden City, New York 11530.www.meetnow.global/MDCWV2T. This year’s Annual Meeting will be virtual only. Information on how to participate in the Annual Meeting can be found on page 10 of the Proxy Statement.
At the Annual Meeting, you will be askedasked: to elect a board of tennine directors; to cast a vote to ratify the appointment of our independent registered public accounting firm; and to approve an amendmentthe 2022 compensation of the Company’s named executive officers.
We are taking advantage of the Securities and Exchange Commission rule that allows companies to provide their stockholders with access to proxy materials over the Internet. On or about May 3, 2023, we will begin mailing a Notice of Internet Availability of Proxy Materials (the “Notice”) to our Certificate of Incorporation to increase the number of shares of authorized common stock. We will also be sharing with you recent news about the Company, and you will be given the opportunity to ask questions and express your opinions about Lifetime Brands, not to mentionstockholders informing them that you also will be able to see many of the outstanding, innovative products and brands that we proudly feature in our portfolio of kitchenware, tableware and other products.
Please visit our website, www.lifetimebrands.com, where you will find our Proxy Statement, and our Annual Report for the fiscal year ended December 31, 2015.2022 (the “2022 Annual Report”) and voting instructions are available online. As more fully described in that Notice, all stockholders may choose to access our proxy materials on the Internet or may request to receive paper copies of the proxy materials. This allows us to conserve natural resources and reduces the costs of printing and distributing the proxy materials, while providing our stockholders with access to the proxy materials in a fast and efficient manner. You can also visit our website, www.lifetimebrands.com, where you will find this Proxy Statement and our 2022 Annual Report.
On behalf of our directors and our management team, I thank you for your continued support of Lifetime Brands.
Best regards, |
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/s/ Jeffrey Siegel
Jeffrey Siegel
Chairman of the Board of Directors
April 27, 2023
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting To Be Held on June 22, 2023: On or about May 3, 2023, we will begin mailing a notice called the Notice of Internet Availability of Proxy Materials to our stockholders advising them that this Proxy Statement, the 2022 Annual Report and voting instructions can be accessed over the Internet at www.envisionreports.com/LCUT. You may then access these proxy materials over the Internet, or you may request that a printed copy of the materials be sent to you. If you want to receive a paper or e-mail copy of these proxy materials, you must request one over the Internet at www.envisionreports.com/LCUT, by calling toll free 1-866-641-4276, or by sending an e-mail toinvestorvote@computershare.com with “Proxy Materials Lifetime Brands, Inc.” in the subject line. There is no charge to you for requesting a copy.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 9, 2016,22, 2023, 10:30 a.m. Eastern Time
1000 Stewart Avenue, Garden City, New York 11530
Notice is hereby given that the Annual Meeting of Stockholders of Lifetime Brands, Inc., a Delaware corporation (the “Company”), will be held online via live webcast at the office of the Company, 1000 Stewart Avenue, Garden City, New York 11530www.meetnow.global/MDCWV2T on Thursday, June 9, 201622, 2023 at 10:30 a.m., Eastern Time (the “Annual Meeting”), for the following purposes:
(1) | To elect a board of directors |
(2) | To ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for |
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(3) | To |
In addition to the foregoing, the Annual Meeting will include the transaction of such other business as may properly come before the meeting, or any adjournment(s), continuation(s), rescheduling(s) or postponement(s) thereof.
Stockholders of record at the close of business on April 18, 201625, 2023 are entitled to notice of and to vote at the Annual Meeting and any adjournment(s), continuation(s), rescheduling(s) or postponement(s) thereof. A complete list of the stockholders entitled to vote at the Annual Meeting willmay be available for examination by any stockholder at the Company’s office, 1000 Stewart Avenue, Garden City, New York 11530, for any purpose germane to the Annual Meeting, during ordinary business hours, for a period of at least 10accessed electronically, upon request, starting ten (10) days prior to the Annual Meeting by contacting our Corporate Secretary via email at sara.shindel@lifetimebrands.com. In addition, such stockholder list will be posted on the virtual meeting website and will be accessible during the Annual Meeting.
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By Order of the Board of Directors,
/s/ Sara Shindel
Sara Shindel
Secretary
Garden City, New York
April 27, 2023
Forward-Looking Statements
The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this Proxy Statement involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the Company’s control. Words such as “approximate,” “outlook,” “estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “goal,” “should,” and similar expressions may identify forward-looking statements. The following factors, in addition to those disclosed in “ITEM 1A. RISK FACTORS” of our 2022 Annual Report and in our other filings made with the SEC could cause actual results to differ materially from those expressed or implied in any of the forward-looking statements included in this Proxy Statement: the ongoing impact of COVID-19 to our business; changes in global economic and financial conditions; failure to appropriately address emerging environmental, social, and governance matters, including new and emerging government regulations designed to address climate change; failure to protect our reputation; adverse conditions affecting our supply chain; or ability to attract or retain talent. There can be no assurance that the forward-looking statements included in this Proxy Statement will prove to be accurate, and new risks may emerge from time to time. Except as may be required by applicable law, the Company assumes no obligation to publicly update or revise our forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 12 | |||
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2015 Highlights
In 2015,2022 PERFORMANCE
The Company’s financial results for 2022 included the following:
Net sales were $727.7 million in 2022, as compared to net sales of $862.9 million in the Company’s U.S. wholesale segment grew by 3.9%. Sales2021.
• | Adjusted income from operations was $34.8 million in 2022, as compared to $67.2 million in 2021.(1) |
Net loss was $(6.2) million in 2022, as compared to a net income of kitchenware, tableware and home solutions products all rose, with a particularly strong increase$20.8 million in our home décor product category. The strength in the Company’s U.S. operations was offset by currency challenges in the U.K., where our businesses were adversely affected by the weakness2021.
• | Adjusted net income was $6.7 million in 2022, as compared to $36.8 million in 2021.(1) |
• | Adjusted EBITDA was $58.2 million, as compared to $95.1 million in 2021.(1) |
(1) These amounts represent non-GAAP financial measures. A reconciliation of the British pound relativethese measures to the dollar, which on a relative basis increased cost of goods, which are sourcedmost directly comparable GAAP measure is included in dollars, and by the weakness of the euro relative to the pound, which hurt export sales. Nevertheless, improved operating margins produced a 5.5% increase in consolidated EBITDA, which grew to $44.9 million.
In the fourth quarter of 2015, with the assistance of a major international consulting firm, we began an in-depth review of Lifetime’s U.S. wholesale businesses to ensure that we have the right structure to grow and thrive in today’s complex business environment. This review will serve as a blueprint to right size Lifetime’s expense base, realign our operating structure and redirect our operating activities to increase our efficiency and effectiveness. When fully implemented, we believe our business will be in a stronger position to achieve future growth and improved profitability.
To succeed with today’s consumers, housewares manufacturers need to deliver improved performance, expanded function and great design. The wide array of new products we offered clearly showed that Lifetime is leading this effort, keeping ahead of the curve on the ever-evolving kitchenware industry. While we believe that our strong position with major retailers in the U.S. and the U.K., our expanding footprint with independent retailers world-wide and the breadth of new product offerings should enable us to grow at an accelerated pace, we are mindful of the risks posed by the possibility of some weakness in the U.S. retail sector, continued foreign exchange challenges and economic uncertainty in some key international markets.Appendix A.
VOTING MATTERS & BOARD RECOMMENDATIONS
Proposal No. | Proposal | Board Recommends | ||
1 | To elect a board of directors | FOReach nominee | ||
2 | To ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for | FOR | ||
3 | To approve, | FOR |
BOARD NOMINEES AND COMMITTEE ASSIGNMENTS
There are 10 Directornine director nominees for election at our 2016 Annual Meeting, to hold office until the next2024 Annual Meeting of Stockholders and until their respective successors have beenare duly elected and qualified. All of the nominees are currently serving as directors of the Company and were elected to the boardBoard of directorsDirectors (the “Board”) at the last2022 Annual Meeting and are currently serving as Directors of the Company, except for Ms. Sara Genster Robling who was appointed to theStockholders. Our current Board in January 2016. Ms. Robling was initially identified as a potential nominee by an executive search firm retained by the Companymember John Koegel is retiring and recommended for nomination by the Nominating & Corporate Governance Committee. Mr. David Dangoor is not standing for re-election.re-election at the Annual Meeting, at which time the Board size will be reduced from ten to nine directors.
Name | Age | Main Occupation | Joined Board | Committee Assignment | ||||
Jeffrey Siegel | 73 | Chairman/CEO, Lifetime Brands, Inc. | 1967 | SP | ||||
Ronald Shiftan | 71 | Vice Chairman/COO, Lifetime Brands, Inc. | 1984 | |||||
Michael J. Jeary | 69 | President, Laughlin Constable | 2005 | Nom/Gov, SP (Chair), Comp | ||||
John Koegel* | 64 | Principal, Jo-Tan, LLC | 2008 | Nom/Gov (Chair), SP, Comp | ||||
Craig Phillips | 65 | Retired, Senior VP - Distribution1, Lifetime Brands, Inc. | 1974 | |||||
Cherrie Nanninga | 67 | Partner, Real Estate Solutions Group | 2003 | Nom/Gov, Audit, Comp (Chair) | ||||
Dennis E. Reaves | 73 | Consultant | 2013 | Nom/Gov, SP | ||||
Michael J. Regan | 74 | Retired Certified Public Accountant | 2012 | Nom/Gov, Audit | ||||
Sara Genster Robling | 59 | Principal, Robling Advisors, LLC | 2016 | Nom/Gov, SP | ||||
William U. Westerfield | 84 | Retired Certified Public Accountant | 2004 | Nom/Gov, Audit (Chair) |
Name | Age | Main Occupation | Joined Board | Committee Assignment | ||||||||
Jeffrey Siegel | 80 | Chairman of the Board, Former, Executive Chairman1, Lifetime Brands, Inc. | 1967 | Exec (Chair), ESG | ||||||||
Robert B. Kay | 61 | CEO, Lifetime Brands, Inc. | 2018 | Exec, ESG | ||||||||
Rachael A. Jarosh | 54 | Former President and CEO, Enactus | 2020 | Nom/Gov, ESG | ||||||||
Cherrie Nanninga | 74 | Partner, Real Estate Solutions Group, LLC | 2003 | Nom/Gov, Comp (Chair) | ||||||||
Craig Phillips | 72 | Retired, Senior VP – Distribution2, Lifetime Brands, Inc. | 1974 | Nom/Gov, Audit | ||||||||
Veronique Gabai-Pinsky | 57 | Former Global President, The Vera Wang Group | 2020 | Nom/Gov, ESG (Chair) | ||||||||
Bruce G. Pollack | 64 | Managing Partner, Centre Partners Management, LLC | 2018 | Nom/Gov, Comp | ||||||||
Michael J. Regan | 81 | Retired Certified Public Accountant | 2012 | Nom/Gov, Audit (Chair) | ||||||||
Michael Schnabel | 45 | Senior Partner, Centre Partners Management, LLC | 2018 | Nom/Gov |
Abbreviations:Nom/Gov = Nominating/Governance Committee; Audit = Audit Committee; SP = Strategic Planning Committee; Comp = Compensation Committee; Exec = Executive Committee; ESG = ESG Committee
* Lead Independent Director
1 Mr. J. Siegel ceased serving as Executive Chairman, effective March 31, 2023.
2 Mr. Phillips retired and resigned as Senior Vice-President – Distribution, effective January 2, 2015.
INFORMATION ABOUT THE BOARD OF DIRECTORS
Diversity
Board Diversity Matrix (as of April 27, 2023) | ||||||||||||||||||||
Board Size: | ||||||||||||||||||||
Total Number of Directors | 10 (as of April 27, 2023) | |||||||||||||||||||
Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||||||||
Part I: Gender Identity | ||||||||||||||||||||
Directors | 3 | 7 | — | — | ||||||||||||||||
Part II: Demographic Background | ||||||||||||||||||||
African American or Black | — | — | — | — | ||||||||||||||||
Alaskan Native or Native American | — | — | — | — | ||||||||||||||||
Asian | — | — | — | — | ||||||||||||||||
Hispanic or Latinx | — | 1 | — | — | ||||||||||||||||
Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||||||||
White | 3 | 7 | — | — | ||||||||||||||||
Two or More Races or Ethnicities | — | 1 | — | — | ||||||||||||||||
LGBTQ+ | — | — | — | — | ||||||||||||||||
Did Not Disclose Demographic Background | — | — | — | — |
CORPORATE GOVERNANCE PRACTICES
Our integrated suite of corporate governance practices includesinclude the following:following best practices:
● | a majority |
● | a |
with the annual election of directors, |
● | a compensation philosophy for named executive officers aligning compensation with short-term and long-term performance, including drivers of stockholder value, |
● | stock ownership guidelines for directors, |
● | stock ownership guidelines for our executive officers, |
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● | anti-hedging provisions, |
● | stockholders have the right to remove directors with or without cause, |
● | our strong corporate citizenship, including our donation practices, our partnership with organizations |
● | our commitment to having a diverse Board as a total of 40% of our Board (four of ten) is composed of female and/or racially diverse directors, with 10% of our Board (one of ten) composed of a director who self-identifies as an underrepresented minority (in each case, as of April 27, 2023). |
ESG STRATEGY
We believe that our practices and procedures should align, where practicable, with our environment, social and governance (“ESG”) strategies. We continue to formalize some of the ways we manage ESG-related activities and undertook the following actions.
The Board formed an ESG Committee in 2021 that is tasked with overseeing the Company’s overall ESG strategy. The ESG Committee will consider strategies relevant to the Company’s ESG practices in a manner aligned with the Company’s overall business strategy. The ESG Committee also oversees and monitors the Company’s strategies relating to human capital management and diversity and inclusion initiatives.
The Company engaged The Good Company Consulting LLC, d/b/a Good.Lab, an ESG consulting firm, to assist the Company in prioritizing initiatives and goals in ESG areas for its U.S. operations.
The Company’s U.K. subsidiary, Lifetime Brands Europe Limited (“LBE”), launched its own sustainability program and initiatives, engaging Earthly, a company that specializes in carbon removal solutions, to assist in analyzing environmental factors impacting various stakeholders and further support LBE in its mission of having a positive impact in the areas of climate, health and safety, and charitable efforts within the local community.
THE BOARD OF DIRECTORS EXTENDS A CORDIAL INVITATION TO ALL STOCKHOLDERS TO ATTENDPARTICIPATE IN THE MEETING.ANNUAL MEETING ONLINE VIA LIVE WEBCAST AT WWW.MEETNOW.GLOBAL/MDCWV2T. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN AS PROMPTLY AS POSSIBLE THE ENCLOSED PROXYPARTICIPATE IN THE ACCOMPANYING REPLY ENVELOPE.ANNUAL MEETING, IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED. PLEASE VOTE YOUR SHARES USING THE INTERNET OR THE DESIGNATED TOLL-FREE TELEPHONE NUMBER, OR BY REQUESTING A PRINTED COPY OF THE PROXY MATERIALS AND COMPLETING AND RETURNING BY MAIL THE PROXY CARD OR VOTING INSTRUCTION FORM YOU WILL RECEIVE IN RESPONSE TO YOUR REQUEST. STOCKHOLDERS WHO ATTEND THE MEETINGHAVE SUBMITTED COMPLETED PROXY CARDS OR VOTING INSTRUCTION FORMS MAY REVOKE THEIR PROXIES AND VOTE IN PERSON.DURING THE ANNUAL MEETING.
LIFETIME BRANDS, INC.
1000 Stewart Avenue,
Garden City, New York 11530
ANNUAL MEETING OF STOCKHOLDERS
To be held on June 9, 201622, 2023
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Lifetime Brands, Inc., a Delaware corporation (the “Company”,“Company,” “us” or “we”), for use at our Annual Meeting of Stockholders (the “Meeting”“Annual Meeting”) to be held on the date,June 22, 2023 at the time and place and for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders.10:30 a.m. Eastern Time online via live webcast at www.meetnow.global/MDCWV2T. Stockholders of record at the close of business on April 18, 201625, 2023 are entitled to notice of and to vote at the Annual Meeting. This Proxy Statement and the accompanying proxy shall be mailed to stockholders on
On or about May 2, 2016.3, 2023, we will begin mailing a notice, called the Notice of Internet Availability of Proxy Materials (the “Notice”), to our stockholders advising them that this Proxy Statement, the 2022 Annual Report and voting instructions can be accessed over the Internet atwww.envisionreports.com/LCUT. You may then access these proxy materials over the Internet, or you may request that a printed copy of the materials be sent to you. If you want to receive a paper or e-mail copy of these proxy materials, you must request one over the Internet at www.envisionreports.com/LCUT, by calling 1-866-641-4276 toll free, or by sending an e-mail toinvestorvote@computershare.com with “Proxy Materials Lifetime Brands, Inc.” in the subject line. There is no charge to you for requesting a copy.
THE ANNUAL MEETING
On April 18, 2016,25, 2023, there were 14,223,44221,693,322 shares of the Company’s common stock, $0.01 par value, issued and outstanding. Each share of the Company’s common stock entitles the holder thereof to one vote on each matter submitted to a vote of stockholders at the Annual Meeting.
All shares of common stock represented by properly executed proxies or voting instruction forms will be voted at the Annual Meeting in accordance with the directions marked on the proxies or voting instruction forms unless such proxies or voting instruction forms have previously been revoked. If no directions are indicated on such proxies or voting instruction forms, they will be voted FOR Proposal 1 – the election of each nominee named under Election of Directors, FOR Proposal 2 – the ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for 2016the fiscal year ending December 31, 2023, and FOR Proposal 3 – the approval, of an amendment to Article Fourthon a non-binding advisory basis, of the Second Restated Certificate of Incorporation2022 compensation of the Company to increase the Company’s authorized common stock from 25,000,000 shares to 50,000,000 shares.named executive officers. If any other matters are properly presented at the Annual Meeting for action, the proxy holders will vote the proxies (which confer discretionary authority upon such holders to vote on such matters) in accordance with their best judgment.judgment, subject to compliance with Rule 14a-4(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Each proxy executed and returned by a stockholder by any of the methods indicated below may be revoked at any time before it is voted by timely submission of a written notice of revocation or by submission of a duly executed proxy bearing a later date (in either case directed to the Secretary of the Company), or, if a stockholder is present atparticipates online in the Annual Meeting, he or she may elect to revoke his or her proxy and vote his or her shares personally.
VOTE REQUIRED FOR APPROVAL
A majority of our outstanding shares of common stock representedpresent at the Annual Meeting, in personby virtual participation or by proxy, and entitled to vote shall constitute a quorum. Abstentions and broker non-votes will be counted for purposes of determining the presence or absence of a quorum. Assuming a quorum is present, (1) the affirmative vote ofdirectors shall be elected by a plurality of the shares so represented is necessary forvotes cast in the election of directors, (2) the affirmative vote of a majority of the shares so representedpresent at the Annual Meeting, by virtual participation or by proxy, and entitled to vote is necessary to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm, and (3) the affirmative vote of a majority of the shares ofpresent at the Company’s common stock issuedAnnual Meeting, by virtual participation or by proxy, and outstanding as of the record dateentitled to vote is necessary to approve, an amendment to Article Fourthon a non-binding advisory basis, the compensation of the Second Restated Certificate of Incorporation of the Company to increase the number of shares of authorized common stock.Company’s named executive officers.
With respect to Proposal 1, you may vote for all nominees, withhold your vote as to all nominees, or vote for all nominees except those specific nominees from whom you withhold your vote. The tennine nominees receiving the most “FOR” votes will be elected. Properly executed proxies marked “WITHHOLD” with respect to the election of one or more directors will not be voted with respect to the director or directors indicated. Proxies may not be voted for more than tennine directors and stockholders may not cumulate votes for the election of any directors.
With respect to Proposals 2 and 3, you may vote for, against or abstain from voting on eitherany of these proposals.
If a stockholder, present in personby virtual participation or by proxy, abstains on a matter, such stockholder’s shares of common stock, although included in the quorum, will not be voted on such matter. Thus, an abstention from voting on either Proposal 2 or 3 has the same legal effect as a vote “against” the matter.
Brokers, banks or other nominees who hold shares of our common stock for a beneficial owner have the discretion to vote on routine proposals when they have not received voting instructions from the beneficial owner at least ten days prior to the Meeting. New York Stock Exchangeowner. Applicable rules prohibit brokers from voting on ProposalProposals 1 and 3 without receiving instructions from the beneficial owner of the shares. Brokers may vote on Proposal 2 and Proposal 3 absent instructions from the beneficial owner.
A broker non-vote occurs when a broker or other nominee does not receive voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares. Broker non-votes will be counted for purposes of calculating whether a quorum is present at the Annual Meeting, but, in the absence of instructions, shares subject to such broker non-votes will not be counted for purposes of determining the number of votes present in personby virtual participation or represented by proxy and entitled to vote with respect to a particular proposal. Thus, a broker non-vote will not impact our ability to obtain a quorum.
In determining whether a proposal has received the requisite number of votes, broker non-votes will have no effect on the outcome of the vote on a proposal that requires a plurality of votes cast (Proposal 1) and will have no effect on the same effect as aoutcome of the vote againston a proposal that requires the affirmative vote of a majority of the outstanding shares present at the Annual Meeting, by virtual participation or by proxy, and entitled to vote (Proposal 2 and 3).
HOW TO VOTE
You may vote your shares by one of the following methods:
INTERNET:To vote your shares by Internet, please visit the website listed on your proxy card or voting instruction form and follow the on-screen instructions. If you vote by Internet, you do not need to mail your proxy card.card or voting instruction form.
TELEPHONE: To vote your shares by telephone, please follow the instructions on your proxy card or voting instruction form. If you vote by telephone, you do not need to mail your proxy card.card or voting instruction form.
MAIL: To vote your shares by mail, please follow the instructions on your proxy card or voting instruction form. Please be sure to sign and date your completed proxy card or voting instruction form before mailing. If you do not sign your proxy card or voting instruction form, your votes cannot be counted. Please mail your proxy card or voting instruction form in the pre-addressed, postage-paid envelope.
IN PERSON:VOTE ONLINE DURING THE MEETING: You may alsovote online during the Annual Meeting by visiting the link www.meetnow.global/MDCWV2T. If you are the registered holder of your shares, meaning that you hold your shares through Computershare Investor Services (“Computershare”), our transfer agent, you do not need to register in advance
for the Annual Meeting. The 15-digit control number provided on your Notice, proxy card or voting instruction form is necessary to access this site. If you hold your shares in “street name,” meaning that you hold your shares through a broker, bank or other nominee, please follow the directions below to register in advance for the Annual Meeting. Guests may virtually attend the Annual Meeting but will not be able to vote during the Annual Meeting.
PARTICIPATING IN THE ANNUAL MEETING
You are entitled to participate in the Annual Meeting only if you were a stockholder of record or a beneficial owner of shares of our common stock as of the close of business on the Record Date, April 25, 2023, or you hold a valid proxy for the Annual Meeting. Our Annual Meeting will be a completely virtual meeting. There will be no physical meeting location. The meeting will be conducted only via live webcast. Guests may virtually attend the meeting but will not be able to vote or ask questions.
You will be able to virtually attend the Annual Meeting, examine our shareholder list, and vote in person. Please bring photo identification. If you ownsubmit your stock in “street name” and wishquestions during the meeting by visiting www.meetnow.global/MDCWV2T. You also will be able to vote your shares online by participating in personthe Annual Meeting.
To participate in the Annual Meeting, visit www.meetnow.global/MDCWV2T and enter the 15-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card or on the instructions that accompanied your proxy materials. If you hold your shares in “street name,” please contact the broker, bank, or other nominee that holds your shares to receive proof of your beneficial ownership and submit such proof, along with your name and email information, to Computershare in advance of the Annual Meeting no later than 5:00 p.m. Eastern Time on June 12, 2023. Requests for registration must be labeled as “Legal Proxy,” and may be submitted (i) via email to legalproxy@computershare.com by forwarding the email from your broker regarding your beneficial ownership or sending an image of your legal proxy, or (ii) sending proof of your beneficial ownership via mail to: Computershare, Lifetime Brands, Inc. Legal Proxy, P.O. Box 43001, Providence, Rhode Island 02940-3001. Upon receipt of such proof of beneficial ownership, Computershare will then register you for virtual attendance at the Annual Meeting and provide you must obtainwith an email confirming your registration.
The Annual Meeting will begin promptly at 10:30 a.m. Eastern Time on June 22, 2023. Participants should also give themselves plenty of time to log in and bringensure that they can hear streaming audio prior to the start of the Annual Meeting. Help and technical support for accessing and participating in the virtual meeting will be available by following the instructions on the virtual meeting website.
If you are a legal proxy fromstockholder and wish to submit questions prior to or during the bankAnnual Meeting, log into the virtual meeting platform at www.meetnow.global/MDCWV2T. Questions pertinent to meeting matters will be answered during the meeting, subject to time constraints. To ensure the meeting is conducted in a manner that is fair to all stockholders, the chair of the meeting may exercise broad discretion in recognizing stockholders who wish to participate, the order in which questions are asked, and the amount of time devoted to any one question. We reserve the right to edit or reject questions we deem inappropriate. By virtually attending the brokerage firm holding your shares.Annual Meeting, stockholders agree to abide by the agenda and procedures for the Annual Meeting.
MAJORITY VOTING GOVERNANCE PRINCIPLE
Although our Bylaws provide for a plurality voting standard for the election of directors, our Board has adopted, as a governance principle, a majority voting standard for uncontested director elections and a plurality voting standard for contested director elections. For this purpose, a “majority of votes cast” means that the number of votes cast “for” a nominee’s election exceeds the number of votes cast “against” that nominee’s election. Accordingly, subsequent to the election of directors at the Annual Meeting, any elected director who is not elected by an affirmative vote of a majority of the votes cast at the Annual Meeting shall submit his or her resignation to our Board.Board, to be effective upon the Board’s determination of whether to accept or reject the resignation. Upon receipt by our Board of such resignation, our Board shall, in its sole judgment and discretion, within 90 days from the submission of such director’s resignation as a director of the Company, determine whether to accept or reject such director’s resignation. If our Board rejects such director’s resignation as a director of the Company, then we shall prepare and file a Current Report on Form 8-K to explain our Board’s rationale for its rejection of such director’s resignation.
PROXY SOLICITATION
We will bear the cost of preparing, printing, assembling and mailing the Notice, form of proxy, this Proxy Statement, the 2022 Annual Report and other materialmaterials that may be sent to stockholders in connection with this solicitation. We have
retained Georgeson, Inc., a proxy solicitation firm, at an estimatedanticipated cost of $7,500$10,000 plus reimbursement of expenses, to assist in soliciting proxies from brokers, banks, nominees, and institutional holders. Georgeson Inc. may solicit votes personally or by telephone, mail or electronic means. In addition, Georgeson and certain related persons will be indemnified against certain liabilities arising out of or in connection with the engagement.
It is contemplated that brokerage houses will forward the proxy materials to beneficial holders at our request. In addition to the solicitation of proxies by the use of mail, our officers and other employees may solicit proxies personally, by telephone or by electronic means without being paid any additional compensation. We will reimburse such persons for their reasonable out-of-pocket expenses in accordance with the regulations of the Securities and Exchange Commission (“SEC”). expenses.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership of our common stock as of April 18, 201620, 2023 (except where otherwise noted) based on a review of information filed with the SECSecurities and Exchange Commission (“SEC”) and our records with respect to (i) each person known to be the beneficial owner of more than 5% of the outstanding shares of our common stock, (ii) each of our directors, (iii) each of our named executive officers, and (iv) all our directors and executive officers as a group.
Name of beneficial owner | Number of shares beneficially owned | Percent of shares beneficially owned* | ||||||
DIRECTORS AND NAMED EXECUTIVE OFFICERS(1) | ||||||||
Jeffrey Siegel | 1,395,290 (2) | 9.55% | ||||||
Craig Phillips | 687,973 (3) | 4.84 | ||||||
Daniel Siegel | 409,475 (4) | 2.86 | ||||||
Ronald Shiftan | 371,022 (5) | 2.57 | ||||||
Laurence Winoker | 173,122 (6) | 1.20 | ||||||
Michael J. Jeary | 73,255 (7) | † | ||||||
David E. R. Dangoor | 56,885 (8) | † | ||||||
Cherrie Nanninga | 52,255 (9) | † | ||||||
William U. Westerfield | 34,937 (10) | † | ||||||
John Koegel | 26,740 | † | ||||||
Michael J. Regan | 13,789 | † | ||||||
Dennis E. Reaves | 8,213 | † | ||||||
Sara Genster Robling | 1,674 | † | ||||||
All directors and executive officers as a group (13 persons) | 3,304,630 | 21.82 | ||||||
Name of beneficial owner | Number of shares beneficially owned | Percent of shares beneficially owned | ||||||
Wellington Management Group LLP 280 Congress Street Boston, Massachusetts 02210
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1,880,789 (11) |
13.22 | ||||||
Mill Road Capital II, L.P. 382 Greenwich Avenue, Suite One Greenwich, Connecticut 06830
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1,439,929 (12) |
10.12 | ||||||
Wellington Trust Company, NA c/o Wellington Management Company LLP 280 Congress Street Boston, Massachusetts 02210
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1,190,197 (13) |
8.37 | ||||||
Dimensional Fund Advisors LP 6300 Bee Cave Road Austin, Texas 78746
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1,151,883 (14) |
8.10 |
Name of beneficial owner | Number of shares beneficially owned | Percent of shares beneficially owned* | ||||||||
DIRECTORS AND EXECUTIVE OFFICERS (1) | ||||||||||
Jeffrey Siegel | 1,347,255 (2) | 6.1% | ||||||||
Robert B. Kay | 904,765 (3) | 4.1% | ||||||||
Rachael A. Jarosh | 27,068 | † | ||||||||
John Koegel | 69,556 | † | ||||||||
Cherrie Nanninga | 71,831 | † | ||||||||
Craig Phillips | 588,510 | 2.7% | ||||||||
Veronique Gabai-Pinsky | 22,871 | † | ||||||||
Bruce G. Pollack | 6,030,673 (4) | 27.8% | ||||||||
Michael J. Regan | 56,605 | † | ||||||||
Michael Schnabel | 37,557 | † | ||||||||
Daniel Siegel | 411,801 (5) | 1.9% | ||||||||
Laurence Winoker | 122,873 (6) | † | ||||||||
All directors and executive officers as a group (12 persons) | 9,691,365 | 43.3% |
Name of beneficial owner | Number of shares beneficially owned | Percent of shares beneficially owned | ||||||||
Centre Partners V, L.P. 601 Lexington Avenue, 55th Floor New York, New York 10022. | 5,993,116 (7) | 27.6% | ||||||||
Dimensional Fund Advisors LP 6300 Bee Cave Road Austin, Texas 78746 | 1,350,667(8) | 6.2% | ||||||||
Mill Road Capital II, L.P. 382 Greenwich Avenue, Suite One Greenwich, Connecticut 06830 | 1,208,503 (9) | 5.6% |
Notes:
* |
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† | Less than 1%. |
(1) | The address of such individuals is c/o the Company, 1000 Stewart Avenue, Garden City, New York 11530. |
(2) | Consists of: (i) |
(3) | Consists of: (i) |
(4) | Consists of: (i) |
(5) | Consists of: (i) 364,601 shares owned directly by Mr. Daniel Siegel, (ii) |
Consists of: (i) |
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(7) |
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Based solely on Forms 4 filed with the SEC on behalf of Centre Partners LP and Mr. Pollack on May 17, 2019 and June 27, 2022, respectively. Consists of: (i) 5,593,116 shares held by Taylor Parent, and (ii) 400,000 shares held by Centre Investors. See footnote 4 above for a further description of the beneficial ownership of these shares. |
(8) | Based on solely on Amendment No. |
Based solely on |
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ELECTION OF DIRECTORS
A board of ten
Nine directors isare proposed to be elected at the Annual Meeting to hold office until the next2024 Annual Meeting of Stockholders, and each director shall hold office until their successors are duly elected and qualified or until their earlier resignation or removal. The following nominees have been recommended by the Board. Each of the nominees is one of our current directors.
With respect to Messrs. Kay, Pollack and Schnabel, as previously disclosed, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Taylor Parent, LLC, a Delaware limited liability company (“Taylor Parent”), and Taylor Holdco, LLC, a Delaware limited liability company (dba Filament Brands, and which the Company refers to as “Filament”) and related entities, providing for the acquisition of Filament by the Company (the “Filament Acquisition”). In connection with the Merger Agreement, the Company entered into a stockholders’ agreement (the “Stockholders Agreement”) by and among the Company, Taylor Parent and other related stockholders. Pursuant to the Merger Agreement and the Stockholders Agreement, the Company was required to appoint three Taylor Parent designees to the Board. On March 1, 2018, effective upon the closing of the Filament Acquisition, the Board unanimously voted to expand the Board and to appoint Messrs. Kay, Pollack and Schnabel to fill the newly created vacancies on the Board. Messrs. Kay, Pollack and Schnabel were subsequently elected to the Board by the Company’s stockholders at the 2018 through 2022 Annual Meetings and are standing for re-election to the Board at the 2023 Annual Meeting.
The following nine nominees have been recommended by the Board. It is the intention of the persons named as proxies in the enclosed proxy card to vote the shares covered thereby FOR the election of the tennine persons named below, unless thea proxy card received by them contains contrary instructions:
Director Nominees
Jeffrey Siegel is Chairman of | ||||
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Cherrie Nanninga has been a partner of Real Estate Solutions Group, LLC, a privately-held real estate consulting firm, since May 2014 and prior to that was the Chief Operating Officer of the New York Tri-State Region of CBRE, a commercial real estate firm, since 2002. For 23 years prior thereto, Ms. Nanninga was employed by The Port Authority of New York and New Jersey where she most recently served as Deputy Chief Financial Officer and Director of Real Estate. |
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Michael J. Regan is a retired certified public accountant. From 1996 to 2002, Mr. Regan was the Vice Chairman and Chief Administrative Officer of KPMG LLP, a leading independent public accounting firm, and was the lead audit partner for many Fortune 500 companies during his 40-year tenure with KPMG (1962 to 2002). Mr. Regan currently |
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Key Qualifications of Director Nominees
The following chart sets forth the specific experience, qualifications, attributes or skills that led to the Board’s determination that each director nominee is qualified to serve on the Board. Because it is a summary, it does not include all of the skills, experiences, and qualifications that each director offers, and the fact that a particular experience, skill, or qualification is not listed does not mean that a director does not possess it. All of our directors exhibit high integrity, an appreciation for diversity of background and thought, innovative thinking, a proven record of success, and deep knowledge of corporate governance requirements and best practices.
Nominee | Key Qualifications | |
Jeffrey Siegel | Service as our Executive Chairman | |
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Robert B. Kay | Service as our | |
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Rachael A. Jarosh |
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Cherrie Nanninga |
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Craig Phillips |
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Veronique Gabai-Pinsky | Expert in brand building, product development, creative and innovation, global business management, organizational design, talent management, brand portfolio management through senior leadership positions in the beauty and fragrance industry and the ready to wear apparel industry. | |
Bruce G. Pollack |
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Michael J. Regan | Notable career with extensive public company board experience; experience as an audit partner in a large international accounting firm; financial, business and strategic acumen and knowledge of the retail and consumer products industries. | |
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Michael Schnabel |
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Each of the nominees have consented to being named in this proxy statement and to serve on the Board if elected. We have no reason to believe that any of the nominees will not be a candidate or will be unable to serve. However, should any of the foregoing nominees become unavailable for any reason, the persons named as proxies in the enclosed proxy card intend to vote for such other person or persons as the Board may nominate.
Our director nominees are highly qualified and, as a group, embody an effective and robust mix of skills and experience, as shown in the matrix below.
Skills Matrix
R. Jarosh | R. Kay | C. Nanninga | C. Phillips | V. Gabai- Pinsky | B. Pollack | M. Regan | M. Schnabel | J. Siegel | ||||||||||||||||||||||||||||
Knowledge, Skills and Experience | ||||||||||||||||||||||||||||||||||||
Public Company Board Experience | X | X | X | X | X | |||||||||||||||||||||||||||||||
Financial | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||||
Risk Management | X | X | X | X | X | X | X | |||||||||||||||||||||||||||||
Accounting | X | X | X | X | ||||||||||||||||||||||||||||||||
Corporate Governance | X | X | X | X | X | X | ||||||||||||||||||||||||||||||
Legal/Regulatory | X | |||||||||||||||||||||||||||||||||||
Human Capital/Compensation | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||||
Executive Experience | X | X | X | X | X | X | X | X | X | |||||||||||||||||||||||||||
Strategic Planning/Oversight | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||||
Cybersecurity/Technology | ||||||||||||||||||||||||||||||||||||
Mergers and Acquisition | X | X | X | X | X | X | ||||||||||||||||||||||||||||||
Housewares/Retail Industry | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||||
Environmental, Social and Governance | X | X | X | X | X | X | X |
Our Board unanimously recommends that stockholders vote FOR
the election of each of the nominated directors.
Signed proxies that are returned will be so voted unless otherwise instructed on the proxy card.
The following table sets forth the names and ages of each of our executive officers.officers as of April 27, 2023.
Name | Age | Positions/Offices with Company | ||
Robert B. Kay | ||||
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Laurence Winoker |
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EXECUTIVE OFFICER BACKGROUNDS
SeeElection of Directors for biographies, names and agesthe biography of those executive officers who are directors.Mr. Kay.
All of our officers are elected annually by our Board, and hold office at the pleasure of the Board and serve until their successors are duly elected and qualified. Certain directors are executives of the Company for a contractual term pursuant to employment agreements. See theCompensation Discussion and Analysis section for summarized terms of these agreements.
Daniel Siegel has served in various positions since joining us in 1992, including as President since 2013. Prior thereto, Mr. Siegel was Executive Vice President of Sales from 2006 to 2008, Executive Vice President of Corporate Invention Strategies from 2008 to 2010 and more recently aswas an Executive Vice President from 2010 to 2013. Mr. Siegel is a director of Vasconia and GSI. Mr. Siegel is the son of Jeffrey Siegel, Chairman of our Board and our Chief Executive Officer.Board.
Laurence Winoker has been ouris the Company’s Executive Vice-President – Treasurer and Chief Financial Officer. Previously, Mr. Winoker held the position of Senior Vice-PresidentVice President – Finance, Treasurer and Chief Financial Officer since July 2007. Prior thereto, Mr. Winoker was Senior Vice-President, Controller and Treasurer of MacAndrews & Forbes Holdings Inc., a holding company with controlling interests in a diversified portfolio of public and private companies including Revlon, Inc. Mr. Winoker was Senior Vice-President, Treasurer and Controller of Revlon, Inc. from 1999 to 2003.
BOARD INDEPENDENCE
Our Board has determined that our director nominees, Michael J. Jeary, John Koegel,Rachael A. Jarosh, Cherrie Nanninga, Dennis E. Reaves, Sara Genster Robling,Craig Phillips, Veronique Gabai-Pinsky, Bruce G. Pollack, Michael J. Regan and William U. WesterfieldMichael Schnabel, are independent directors under the listing standards of The NASDAQNasdaq Stock Market LLC.LLC (“Nasdaq”). John Koegel, who currently serves on our Board, but is not standing for re-election, is also an independent director. Under the Nasdaq rules, Jeffrey Siegel and Ronald Shiftan are our employees and areis not considered to be an independent directors. Craig Phillips was onedirector as certain relatives of Jeffrey Siegel are employed by us. Robert B. Kay is our employees within the last three years, until his retirement in January 2015,employee and is not considered to be an independent director. Our Board has also determined that David E. R. Dangoor, who is not standing for re-election this year, is an independent director.
BOARD LEADERSHIP STRUCTURE
Jeffrey Siegel serves as Chairman of our Board and our Chief Executive Officer.Board. Mr. Siegel has served the Company in various capacities, and has been one of our directors since 1967 and is our largest individual stockholder. Mr. Siegel provides effective leadership and guidance as our Chairman of the Board in the development and pursuit of our strategic goals, recognition of business opportunities that present themselves and oversight of our risk profile. As stated above, Jeffrey Siegel does not meet the definition of an independent director under the Nasdaq rules.
The Board does not have a policy regarding the separation of the roles of Chairman and Chief Executive Officer and believes that it is in the best interest of the Company and its stockholders for the Board periodically to evaluate and make a determination regarding whether or not to separate the roles of Chairman and Chief Executive Officer based upon the circumstances. The Board has determined that separating the roles of Chairman and Chief Executive Officer is the most effective leadership structure for the Company at this time, as it this structure permits Mr. Siegel to focus on active leadership of the Board, thus fostering clear accountability, effective decision making and alignment of corporate strategies, while allowing Mr. Kay to better focus on the day-to-day operations of the Company.
Furthermore, given Mr. Siegel’s prior role as Executive Chairman, our Board believed that it was appropriate and in the best interests of the Company and its stockholders to have a lead independent director during 2022.
John Koegel serves as theour lead independent director.director, a role that he has held since 2013. The duties of the lead independent director include:
● | Chairing meetings of our Board at which |
● | Reviewing the agenda approved by the Chairman of our Board for Board meetings and, with input from the other independent directors, suggesting to the Chairman of our Board additional agenda items for Board meetings, as well as the substance and timeliness of information to be sent to the members of our Board in connection with Board meetings and in between Board meetings; |
● | Reviewing with the Chairman of our Board the schedule for meetings of our Board to help assure that there is sufficient time allocated for discussion of all agenda items; |
● | Maintaining constant communication with the Chairman of our Board between meetings of our Board; |
● | Collaborating with and acting as a resource for, and counsel to, the Chairman of our Board; |
● | Chairing meetings of the independent directors; |
● | Reviewing with the Chairman of our Board the schedule for meetings of the independent directors and, with input from the other independent directors, setting the agenda for such meetings; |
● | Reviewing with the Chairman of our Board after meetings of the independent directors matters discussed by the independent directors at such meetings; |
● | Facilitating communication and serving as the principal liaison on Board-related issues between the Chairman of our Board and the independent directors. Notwithstanding the foregoing, each director is free to communicate directly with the Chairman of our Board, |
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● | At least annually, |
Our Board is currently composed of eleventen directors, eight of whom are independent of the Company. Seven of our independent directors will stand for re-election in 2016. Our independent directors, and our governance practices, provide effective and independent oversight of management. The independent directors meet in periodic executive sessions, the results of which are discussed by the lead independent director with the Chief Executive Officer.
STOCK OWNERSHIP GUIDELINES
Effective July 31, 2012, ourOur Board has adopted stock ownership guidelines applicable to our directors. Under these guidelines, a director must, on or prior to the compliance deadline, own shares of our stock with a value in an amount equal to or in excess of three times the non-employee director annual cash retainer, with such value determined at the time of the receipt of the stock based on the amount paid or contributed by the director for the stock. The compliance deadline is five years after the director’s election or appointment to our Board. For the purpose of the stock ownership guidelines, unexercised stock options are not considered in calculating stock ownership, but restricted shares are included at the time the restriction lapses. All our directors are in compliance with the stock ownership guidelines.
Effective August 4, 2015, ourOur Board has also adopted stock ownership guidelines (including holding requirements until ownership levels are achieved) for our named executive officers, which are intended to align their long-term interests with those of our stockholders and to encourage a long-term focus in managing our Company. The requirements for named executive officers are expressed as a multiple of base salary. The Chief Executive Officer is required to maintain a minimum ownership of three times his base salary. All other named executive officers are required to maintain one times their base salary. The named executive officers are requiredneed to achieve the requirements within five years. Compliance with the guidelines will be determined based on the currentthen-current base salary. For purposes of the stock ownership guidelines, the following forms of equity holdings qualify: (1) direct ownership of shares (e.g. shares purchased on the open market or upon the exercise of stock options and restricted stock that shall have vested); (2) indirect ownership of shares (e.g. shares held in trusts for the benefit of the named executive officer or his/her immediate family members or shares held by family members that reside in the same household as the named executive officer); and (3) restricted stock that shall have vested: (i) upon the achievement of performance of goals established by the Board or a Committee of the Board; or (ii) over a period of time. All directors and named executive officers have satisfied or are on track to satisfy within the five-year grace period, the Board’s stock ownership guidelines.
ANTI-HEDGING POLICY
We have a policy with respect to hedging in the Company’s securities that is contained in our Insider Trading Policy. In this regard, we prohibit our directors and executive officers from engaging in transactions that are designed to or have the effect of hedging or offsetting any decrease in the market value of our securities. With respect to employees of the Company that are not executive officers, the policy strongly discourages those employees from engaging in hedging transactions involving the Company’s securities.
BOARD OVERSIGHT OF RISK
Our Board bears the responsibility for maintaining oversight over our exposure to risk. Our Board, itself and through its committees, meets with various members of management regularly and discusses our material risk exposures, the potential impact on us and the efforts of management it deems appropriate to deal with the risks that are identified. The Audit Committee considers our risk assessment and risk management practices including those relating to regulatory risks, financial liquidity and accounting risk exposure, reserves and our internal controls. The Nominating and Governance Committee considers the risks associated with our corporate governance principles and procedures with the guidance of corporate and outside counsel. Our Compensation Committee, in connection with the performance of its duties, considers risks associated with our compensation programs.
CODE OF BUSINESS CONDUCT AND ETHICS
We have adopted a Code of Business Conduct and Ethics, as supplemented by a Code of Conduct, which applies to all of our directors, officersemployees (including executive officers) and our Chief Executive Officer, Chief Financial Officer and Controller) and employees.directors.
A copy of our Code of Business Conduct and Ethics can be found on our website, www.lifetimebrands.com, in the Corporate Governance subsection under Investor Relations. We intend to post any amendments to or waivers from our Code of Business Conduct and Ethics that apply to our executive officers on our website.
BOARD AND COMMITTEE MEETINGS; ATTENDANCE
All of our directors who served as directors at the time, virtually attended our 20152022 Annual Meeting of Stockholders. Directors are expected, but not required, to attend the Annual Meeting of Stockholders.Meeting. Our Board holds meetings on at least a quarterly
basis and more often, if necessary, to fulfill its responsibilities. Our Board held sixeight regularly scheduled meetings during the fiscal year ended December 31, 2015.2022. During the 2015 fiscal year ended December 31, 2022, each director attended a minimum75% or more of 75%the total number of the meetings of the Board and his or her respective committees (for the period that such director served on which the director served.
The independent directors meet at regularly scheduled executive sessions without members of management present.
STOCKHOLDER COMMUNICATION WITH DIRECTORS
Stockholders and other interested parties who wish to communicate with members of our Board, including the independent directors, individually or as a group, may send correspondence to them care of the Secretary at our principal office, 1000 Stewart Avenue, Garden City, New York 11530. Alternatively, the directors may be contacted via e-mail at BoardofDirectors@lifetimebrands.com. All such communications will be relayed to the members of our Board generally or individually, as specified.
BOARD NOMINATION PROCESS
Our Board nominates candidates to serve as directors based on recommendations of the Board’s Nominating and Governance Committee.
Our Nominating and Governance Committee’s procedures for identifying and evaluating candidates include requests for candidate recommendations from within the housewares industry and from outside independent professional advisors, as the case may be. In selecting a director nominee, our Nominating and Governance Committee focuses on skills, expertise and backgroundbackgrounds that would complement those of the existing members of our Board, recognizing the nature of our business.
Directors are elected annually by our stockholders and serve until the next annual meeting of the stockholders and shall hold office until their successors have been duly elected and qualified or until their earlier resignation or removal.
Our Board has adopted, as a governance principle, a majority voting standard for uncontested director elections and a plurality voting standard for contested elections. Therefore, when the number of director nominees exceeds the number of board seats, a plurality voting standard shall apply.elections. Any director elected by a plurality voting standard,vote, as provided for in our Bylaws, at an annual meeting of our stockholders in an uncontested election thatwho does not receive a majority of the votes cast at such annual meeting shall submit his or her resignation to our Board.Board, to be effective upon the Board’s determination of whether to accept or reject the resignation. Our Board shall then, in its sole judgment and discretion, within 90 days from submission of such director’s resignation, determine whether to accept or reject such director’s resignation. If our Board rejects the director’s resignation, then we shall prepare and file a Current Report on Form 8-K to explain our Board’s rationale for rejecting such director’s resignation.
NOMINATING AND GOVERNANCE COMMITTEE
Our Nominating and Governance Committee is currently composed of all eight of our independent directors: John Koegel (Chair), David E. R. Dangoor, Michael J. Jeary,Rachael A. Jarosh, Cherrie Nanninga, Dennis E. Reaves,Craig Phillips, Veronique Gabai-Pinsky, Bruce G. Pollack, Michael J. Regan Sara Genster Robling and William U. Westerfield.Michael Schnabel. The Nominating and Governance Committee held fourmeetings in 2015.2022.
Our Nominating and Governance Committee has the following responsibilities:
● | To evaluate the qualifications of candidates for Board membership and, following consultation with the Chief Executive Officer and Executive Chairman, recommend to our Board nominees for open or newly created director positions; |
● | To consider nominees recommended by stockholders as long as such recommendations are received at least 120 calendar days |
● | To periodically review the composition of our Board to determine whether it may be appropriate to add or subtract individuals with different backgrounds or skill sets from those already on our Board, and submit to our Board on an annual basis a report summarizing its conclusions regarding these matters; |
● | To |
● | To develop and make recommendations to our Board regarding governance principles applicable to us; |
● | To periodically assess the structure and operations of the committees of our |
● | To develop and recommend to the Board corporate governance guidelines and to review such guidelines at least annually; |
● | To develop and recommend procedures for the evaluation and self-evaluation of our Board and its committees and to oversee the evaluation process; |
● | To perform an evaluation of the committee’s performance at least annually; |
● | To periodically review the compensation of our Board and recommend changes to our Board; and |
● | To perform such other duties as our Board may assign to the committee. |
Our Nominating and Governance Committee charter is available on our website, www.lifetimebrands.com, in the Corporate Governance subsection under Investor Relations.
STOCKHOLDER NOMINATION PROCESS FOR STOCKHOLDERS TO RECOMMEND DIRECTOR NOMINEES
AlthoughOur Board, through our Nominating and Governance Committee, has not adopted a policy on stockholder nominations of director candidates, under our Bylaws, any stockholder of record (bothwill consider nominees recommended by stockholders as of the time notice of such nomination is given andlong as, of the record date) of the Company who is entitled to vote at a meeting may nominate candidates for election as directors. Any such stockholder who seeks to make such a nomination, or its representative, must be present in person at the meeting. Notice of nomination must be given in writing and delivered to, or mailed and received by our Secretary, not earlier than the close of business on the 120th calendar day and not later than the close of business on the 90th calendar day prior to the one-year anniversary of the prior year’s annual meeting. In the case of a special meeting of stockholders called in accordanceconsistent with our Bylaws for the purpose of electing directors, or in the event that the annual meeting of stockholders is called for a date that is more than 30 calendar days before or more than 60 calendar days after the on year anniversary of the prior year’s annual meeting, or if the Corporation did not hold an annual meeting (or special meeting in lieu of an annual meeting) in the preceding fiscal year, notice by the stockholder to be timely must be so delivered, or mailed and received, not later than the later of the close of business on the 90th calendar day prior to the scheduled date of such stockholders’ meeting or the close of business on the 10th calendar day following the day on which public disclosure of the date of such stockholders’ meeting was first made (or if that day is not a business day for the Corporation, on the next succeeding business day). The form of the notice must include the requirements in Section 2.9 of our Bylaws.
There are no differences in the manner in which our Nominating and Governance Committee evaluatescharter, such recommendations are received at least 120 calendar days prior to the one-year anniversary date of the immediately preceding year’s annual meeting of stockholders. A stockholder wishing to recommend a candidate for director, whether an individualmust submit the following documents to the Secretary, Lifetime Brands, Inc., 1000 Stewart Avenue, Garden City, New York 11530, not less than 120 calendar days prior to the one-year anniversary date of the immediately preceding year’s annual meeting of stockholders:
● | A recommendation that identifies the candidate and provides contact information for that candidate; |
● | The written consent of the candidate to serve as a director of the Company, if elected; and |
● | If the candidate is to be evaluated by the Nominating and Governance Committee, the Secretary will request from the candidate a detailed resume, an autobiographical statement explaining the candidate’s interest in serving as a director of the Company, a completed statement regarding conflicts of interest, and a waiver of liability for a background check. |
The Nominating and Governance Committee evaluates all candidates, regardless of who recommended by a stockholder or otherwise.the candidate, based on the same criteria.
BOARD DIVERSITY
Our diversity policy provides that, while diversity and the variety of experiences and viewpoints represented on our Board should always be considered, a director nominee should not be chosen nor excluded because of race, color, gender, national origin or sexual orientation or identity. Our Nominating and Governance Committee assesses the effectiveness of the diversity policy by periodically reviewing the skills, expertise and background of each of the existing members of our Board to determine whether it may be appropriate to add individuals with different backgrounds or skill sets from those existing members of our Board. Our Board is committed to having a diverse Board as a total of 40% of our Board (four of ten) is composed of female and/or racially diverse directors, with 10% of our Board (one of ten) composed of a director who self-identifies as an underrepresented minority (in each case, as of April 27, 2023). Refer to page 7 for the Diversity Matrix.
AUDIT COMMITTEE
Our Audit Committee is currently composed of fourthree directors, each of whom is independent, as required by the Audit Committee charter, the Securities Exchange Act, of 1934 and the Nasdaq listing requirements for The NASDAQ Stock Market, LLCrules and the SEC rules. The current members are William U. WesterfieldMichael J. Regan (Chair), David E. R. Dangoor, Cherrie NanningaJohn Koegel and Michael J. Regan.Craig Phillips. Our Board has determined that William U. Westerfield and Michael J. Regan areis an “Audit Committee Financial Experts,Expert,” as defined by the SEC rules.rules The Audit Committee held fourmeetings during 2015.2022.
Our Audit Committee, among other things:
● | Considers the qualifications of and appoints and oversees the activities of our independent registered public accounting firm, i.e., our independent auditor; |
● | Reviews with the independent auditor any audit problems or difficulties encountered in the course of audit work; |
● | Preapproves all audit and non-audit services provided by the independent auditor; |
● | Discusses with the internal auditors and the independent auditor the overall scope and plans for their respective audits, including the adequacy of staffing and budget or compensation; |
● | Reviews our financial statements and reports and meets with management and the independent auditor to review, discuss and approve our financial statements, ensuring the completeness and clarity of the disclosures in the financial statements; |
● | Monitors compliance with our internal controls, policies, procedures and practices; |
● | Reviews management’s report on its assessment of the effectiveness of internal control over financial reporting as of the end of each fiscal year and the independent auditor’s report on the effectiveness of internal control over financial reporting; |
● | Reviews the performance of our internal audit function and approves our Internal Audit Department’s annual audit plan and all major changes to the plan; |
● | Discusses our policies on risk assessment and risk management, our major financial risk exposures and the steps management has taken to monitor and control such exposures; |
● | Reviews our compliance and ethics programs, including legal and regulatory requirements, and reviews with management our periodic evaluation of the effectiveness of such programs; |
● | Reviews and approves related-party transactions; and |
● | Undertakes such other activities as our Board from time to time may delegate to it. |
Our Audit Committee charter is available on our website, www.lifetimebrands.com, in the Corporate Governance subsection under Investor Relations.
STRATEGIC PLANNING COMMITTEE
Our Strategic Planning Committee is composed of six directors. The current members are Michael J. Jeary (Chair), John Koegel, David E. R. Dangoor, Dennis E. Reaves, Sara Genster Robling and Jeffrey Siegel. Our Strategic Planning Committee held three meetings in 2015.
Our Strategic Planning Committee, among other things, provides assistance to our Board in fulfilling its responsibilities to our stockholders with respect to the following:
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Our Strategic Planning Committee regularly receives updates from the Chairman of our Board and Chief Executive Officer and, from time to time, meets with our Division Presidents.
Our Strategic Planning Committee charter is available on our website, www.lifetimebrands.com, in the Corporate Governance subsection under Investor Relations.
COMPENSATION COMMITTEE
Our Compensation Committee is composed of three directors, each of whom is independent. The current members are Cherrie Nanninga (Chair), John Koegel, and Michael J. Jeary.Bruce G. Pollack. Our Compensation Committee held sixnine meetings during 2015.in 2022.
Our Compensation Committee advises our Board with respect to our compensation practices and administers our Amended and Restated 2000 Incentive Bonus Compensation Plan and our Amended and Restated 2000 Long-Term Incentive Plan.
The principal duties and responsibilities of our Compensation Committee include:
● | Reviewing and approving compensation principles that apply generally to our |
● | Establishing and reviewing corporate goals and objectives relevant to the compensation of the Chief Executive Officer and |
● | Reviewing, based primarily on the evaluations and recommendations of the Chief Executive Officer, |
● | Overseeing our compliance with the requirements under the |
● | Reviewing and discussing compensation programs that may create incentives that can affect our risk and management of that risk. |
The Compensation Committee may delegate any of its responsibilities to one or more subcommittees, each of which shall be composed of two or more members, as the Compensation Committee may deem appropriate.
Our Compensation Committee charter is available on our website, www.lifetimebrands.com, in the Corporate Governance subsection under Investor Relations.
ESG COMMITTEE
Our ESG Committee is currently composed of four directors: Veronique Gabai-Pinsky (Chair), Rachael A. Jarosh, Jeffrey Siegel and Robert B. Kay. Our ESG Committee was formed in November 2021 for the purpose of providing guidance and oversight for the Company’s environmental, social and governance initiatives. The ESG Committee held twomeetings during 2022.
The Company engaged The Good Company Consulting LLC, d/b/a Good.Lab, an ESG consulting company, to assist the Company and the Board in identifying environmental and social factors that pose both risk and opportunities to the Company and its business domestically in order to ensure success in the long-term. Internationally, in 2021, the Company, through its LBE operations, launched a sustainability strategy that considers a balance of environmental, human, social and economic factors. LBE has partnered with Earthly, a science backed carbon removal solution, to invest in the fight against climate change. Current LBE initiatives include continuing to be climate positive in our shipping by offsetting 1,600 tons of CO2 in 2022 and recycling 93.1% of our operational waste at our “HUB” distribution facility in Birmingham, U.K.; LBE also remains on track to have 100% of our packaging to be fully recyclable by end of 2023. Additionally, LBE aims to move our HUB energy to renewable energy in order to reduce our operational carbon footprint.
Our ESG Committee has the following responsibilities:
● | To review and monitor the Company’s sustainability and corporate responsibility practices, including ESG reporting and disclosure practices; |
● | To oversee strategies relevant to the Company’s ESG practices in a manner aligned with the Company’s overall business strategy; |
● | To consider and/or define, as appropriate, ESG-related goals; |
● | To oversee the Company’s support of charitable, educational, and non-profit business organizations; |
● | To monitor external developments and oversee management’s plans for mitigating developments that are likely to have a significant influence on the Company’s reputation or its ability to conduct its business responsibly; |
● | To oversee and monitor the Company’s strategies relating to human capital management and diversity and inclusion initiatives; and |
● | To perform such other duties as the Board may assign to the Committee. |
Our ESG Committee charter is available on our website, www.lifetimebrands.com, in the Corporate Governance subsection under Investor Relations.
EXECUTIVE COMMITTEE
Our Executive Committee is composed of three directors. The current members are Jeffrey Siegel (Chair), John Koegel and Robert B. Kay. Our Executive Committee held no meetings in 2022.
Our Executive Committee was formed in 2016, at the recommendation of the Nominating and Governance Committee, for authorizing the opening and closing of bank accounts for the Company and other matters delegated by the Board of Directors to the Executive Committee.
EXECUTIVE SESSIONS
The independent directors meet at regularly scheduled executive sessions without members of management present.
Fees paid to our non-employee directors are based on the following schedule:schedule.
Board of Directors Annual Retainer Cash Restricted Common Stock Total Committee Chair Annual Cash Retainer Chair of Audit or Compensation Committee Chair of Nominating/Governance or ESG Committee Committee Member Annual Cash Retainer Lead Independent Director Annual Cash Retainer Chairman Annual Cash Retainer(1) Cash Fee for Each Meeting Attended Board Meeting Committee Meeting Note: (1) On March 8, 2023, our Board approved an annual cash retainer of $50,000 for our Chairman of the Board, effective April 1, 2023.
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The following table sets forth compensation paid to our non-employee directors for 2015:2022.
Name
| Fees earned or paid in cash
| Stock awards (1)
| Total
| Fees earned or paid in cash | Stock awards (1) (2) | All Other Compensation | Total | |||||||||||||||
John Koegel | $ | 128,000 | $ | 80,000 | $ | — | $ | 208,000 | ||||||||||||||
Cherrie Nanninga | $73,000 | $50,000 | $123,000 | 104,000 | 80,000 | — | 184,000 | |||||||||||||||
William U. Westerfield | 68,000 | 50,000 | 118,000 | |||||||||||||||||||
John Koegel | 92,500 | 50,000 | 142,500 | |||||||||||||||||||
Michael J. Jeary | 62,500 | 50,000 | 112,500 | |||||||||||||||||||
David E. R. Dangoor (2) | 53,500 | 50,000 | 103,500 | |||||||||||||||||||
Craig Phillips | 84,000 | 80,000 | — | 164,000 | ||||||||||||||||||
Bruce G. Pollack | 86,000 | 80,000 | — | 166,000 | ||||||||||||||||||
Michael J. Regan | 50,000 | 50,000 | 100,000 | 100,000 | 80,000 | — | 180,000 | |||||||||||||||
Dennis E. Reaves | 49,500 | 50,000 | 99,500 | |||||||||||||||||||
Craig Phillips | 42,000 | 50,000 | 92,000 | |||||||||||||||||||
Michael Schnabel | 80,000 | 80,000 | — | 160,000 | ||||||||||||||||||
Rachael A. Jarosh | 83,000 | 80,000 | — | 163,000 | ||||||||||||||||||
Veronique Gabai-Pinsky | 91,000 | 80,000 | — | 171,000 |
Note:
(1) | Represents the aggregate grant date fair value of the awards as determined under Financial Accounting Standards Board Accounting Standards Codification Topic No. 718-20, Awards Classified as Equity, recognized by the Company for awards granted during 2022. For information, including assumptions, regarding the valuation of these awards refer to Note 10 to the Company’s Consolidated Financial Statements for the year ended December 31, 2022 included in the 2022 Annual Report, and the Company’s discussion of Significant Accounting Policies under the heading “Share-based compensation” included on page F-13 of the 2022 Annual Report. |
(1) Consists of restricted stock awards valued at the closing market price of our
(2) | Consists of restricted stock awards valued at the closing market price of the Company’s common stock on the date of grant. |
(2) Mr. Dangoor is not standing for re-election at the 2016 Annual Meeting.
The following table sets forth the aggregate number of restricted shares of our common stock and shares of our common stock issuable upon the exercise of stock options held by each non-employee director at December 31, 2015:2022. None of the non-employee directors have any outstanding stock options.
Name | Restricted shares (1) | Vested stock options | Unvested stock options | |||
Cherrie Nanninga |
3,369 |
25,000 |
-- | |||
William U. Westerfield | 3,369 | -- | -- | |||
John Koegel | 3,369 | -- | -- | |||
Michael J. Jeary | 3,369 | 25,000 | -- | |||
David E. R. Dangoor (2) | 3,369 | 25,000 | -- | |||
Michael J. Regan | 3,369 | -- | -- | |||
Dennis E. Reaves | 3,369 | -- | -- | |||
Craig Phillips | 3,369 | -- | -- |
Name | Restricted shares | Vested stock options | Unvested stock options | |||||||||
John Koegel (1) | 6,986 | — | — | |||||||||
Cherrie Nanninga (1) | 6,986 | — | — | |||||||||
Craig Phillips (1) | 6,986 | — | — | |||||||||
Bruce G. Pollack (1) | 6,986 | — | — | |||||||||
Michael J. Regan (1) | 6,986 | — | — | |||||||||
Michael Schnabel (1) | 6,986 | — | — | |||||||||
Rachael A. Jarosh (1) | 6,986 | — | — | |||||||||
Veronique Gabai-Pinsky (1) | 6,986 | — | — |
Note:
(1) |
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The table of Security Ownership of Certain Beneficial Owners and Management sets forth the beneficial ownership of each director of our common stock at April 18, 2016.
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY
We achieved certain financialAbout Our Business
Lifetime Brands is a leading global provider of kitchenware, tableware and strategic goals during 2015. Our U.S. wholesale business grew by 3.9% and was partially offset by currency challengesother products used in the U.K.home. We offer brands you trust, value without compromise and an unwavering commitment to innovation. Our products make it easier for you to prepare food, serve meals, entertain guests, and decorate your home.
We market products under well-known kitchenware brands, including Farberware, KitchenAid, Sabatier, Amco Houseworks, Chef’n, Chicago Metallic, Copco, Fred & Friends, Rabbit, Houdini, KitchenCraft, Kamenstein, MasterClass, Misto, Swing-A-Way, and Taylor Kitchen; respected tableware and giftware brands, including Mikasa, Pfaltzgraff, Fitz and Floyd, Empire Silver, Gorham, International Silver, Towle Silversmiths, Wallace, Wilton Armetale, V&A and Royal Botanic Gardens Kew and Year & Day; and valued home solutions brands, including BUILT NY, Taylor Bath, Taylor Weather, Planet Box and S’well. We also provide exclusive private label products to leading retailers worldwide.
Our highlights for 2015 included the following:products can be found in specialty stores, department stores, national chains, mass merchants, warehouse clubs, home centers, supermarkets, e-commerce retailers and off-price retailers, as well as our branded websites.
Our Executives
Our named executive officers (“NEOs”) are:
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● | Laurence Winoker, Executive Vice-President – Treasurer and Chief Financial Officer |
(1) Mr. J. Siegel ceased serving as Executive Chairman, effective March 31, 2023.
2022 Performance
The Company’s financial results for 2022 included the following:
Net sales were $727.7 million in 2022, as compared to net sales of $862.9 million in 2021.
• | Adjusted income |
Our compensation program, which reflects our long-standing philosophy and objectives,
Net loss was $(6.2) million in 2022, as compared to a net income of $20.8 million in 2021.
• | Adjusted net income was $6.7 million in 2022, as compared to $36.8 million in 2021.(1) |
• | Adjusted EBITDA was $58.2 million, as compared to $95.1 million in 2021.(1) |
(1) These amounts represent non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measure is designed to align executive compensation with financial results and the achievements of the executives, yielding a high level of correlation between pay and performance. The financial results are evaluated and adjusted by our Compensation Committee to exclude income and expenses which our Compensation Committee believes should be excluded, to provide for a direct correlation of financial results and executive compensation.included in Appendix A.
Say-On-Pay
In 2011 and 2014,2022, our Board provided stockholders with the opportunity to cast an advisory vote on executive compensation. We received overwhelming support fromAt our stockholders on the advisory vote in both 2011 and 2014. At the Company’smost recent Annual Meeting of Stockholders held on June 16, 2011,23, 2022, approximately 97.8%90% of the shares present at the meeting voted to approvevotes cast, approved on an advisory basis, the compensation of our named executive officers. At our Annual Meeting of Stockholders held on June 19, 2014, approximately 92.5% of the shares present at the meeting voted to approve the compensation of our named executive officers.NEOs. Although these votes were non-binding and advisory, our Compensation Committee believes that the outcome strongly affirms stockholder support of our approach to executive compensation. In view of the overwhelming support demonstrated by the stockholders, our Board and Compensation Committee are continuing their existing approach to determining executive compensation when considering executive compensation decisions. The next advisoryBased on the 2021 Say-on-Pay vote onresults, the Compensation Committee determined that no specific changes would be made to the executive compensation along with a Say on Pay Frequency vote will occur at our Annual Meeting of Stockholders in 2017. Both our Board andprogram, however, the Compensation Committee expectwill continue to takeevaluate the Company’s executive compensation programs, taking into account the outcome of these votes when considering future executive compensation decisions.stockholder feedback.
COMPENSATION PHILOSOPHY AND OBJECTIVES
Our compensation program has historically been designed to attract, reward and retain capable executives and to provide incentives for the attainment of short-term performance objectives and strategic long-term performance goals. A number
of key principles guide management and our Compensation Committee in determining compensation for hiring, motivating, rewarding and retaining executive officers who create both short-short-term and long-term stockholder value, for us, including:
● | A significant amount of compensation should be linked to measurable success in business performance; |
● | Management’s interests should be aligned with those of the |
● | Both |
● | Compensation should be set at levels that will be competitive with the compensation offered by those companies against whom we compete for executive talent so that we are able to attract and retain |
In an effort to balance the need to retain executive talent yet motivate executives to achieve superior performance, we have adopted a compensation philosophy that contains both fixed and variable elements of compensation. Our compensation philosophy is to reward executives with compensation aligned with our short-term and long-term financial goals and the establishment of performance targets that do not promote excessive risk-taking. The elements of our total executive compensation are base salary, cash bonus and stock incentives. The compensation program was designed to create a substantial percentage of variable compensation for executives, subject to increases or decreases based on the attainment of specified achievements and targets. Consistent with our goal of linking pay and performance, the performance-based compensation of our Chief Executive Officer and Chief Operating Officer amounted to 55% and 44%, respectively, of their total compensation for 2015.
Our Compensation Committee uses its judgment in allocating compensation between long- and short-term incentives and cash and non-cash components. Although long-term incentive isincentives are considered of great significance in aligning performance with stockholder interests, it hasthey have traditionally been a smaller component of aggregate compensation. The Compensation Committee has also historically awarded larger long-term incentive compensation awards as consideration for NEOs entering into a new employment agreement.
The following charts indicate the elementsBased on 2022 target compensation, long-term incentives for our Chief Executive Officer comprised 54% of his total compensation for 2022 (with 27% attributable to restricted stock and mix27% attributable to performance share awards), while short-term incentives comprised 46% of his total compensation for 2022 (with 21% attributable to base salary, 24% attributable to annual bonus, and 1% attributable to other compensation). Based on 2022 target compensation, long-term incentives for all other NEOs comprised 14% of their total compensation for 2022 (with 7% attributable to restricted stock and 7% attributable to performance share awards), while short-term incentives comprised 86% of their total compensation for 2022 (with 43% attributable to base salary, 41% attributable to annual bonus, and 2% attributable to other compensation). In addition, based on 2022 target compensation, 51% of our Chief Executive OfficerOfficer’s 2022 compensation consisted of performance-based compensation and 48% of all other NEOs for 2015:NEOs’ 2022 compensation consisted of performance-based compensation (which, in each case, includes target annual bonus and the target award value of performance shares granted).
Chief Executive Officer - 2015 CompensationROLE OF COMPENSATION COMMITTEE
All Other Named Executive Officers (Average) - 2015 Compensation
Note:
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Our Compensation Committee has the authority to review and approve compensation principles and practices that apply generally to our executiveexecutives and senior employees. Our Compensation Committee reviews corporate goals and objectives relevant to the compensation of our Chief Executive Officer, and our Chief Operating Officer, evaluates theirhis performance in light of the established goals and objectives and approves theirhis annual compensation. It also reviews the corporate goals and objectives established by our Chief Executive Officer and our Chief Operating Officer relevant to the compensation of all other executive officers and all direct reports of the Chief Executive Officer and Chief Operating Officer. Based primarily on the evaluations and recommendations of our Chief Executive Officer and our Chief Operating Officer of the performance of such executive officers and direct reports in light of the established goals and objectives, our Compensation Committee approves their annual compensation. It also reviews the evaluation process and compensation structure for the other members of our senior management and provides oversight regarding management’s decisions concerning the performance and compensation of such members of senior management. Our Compensation Committee relies ontakes into account and considers reports of its independent compensation consultant, Pearl Meyer & Partners, LLC (“Pearl Meyer”), as to the elements of compensation among our peer group of companies (discussed under Role of Compensation Consultant) and the proportion of each component relative to the total compensation.
Our named executive officers (“NEOs”) are:
ROLE OF COMPENSATION CONSULTANT
Our Compensation Committee has engaged Pearl Meyer as its independent outside compensation consultant to provide services related to executive and non-employee director compensation. Pearl Meyer does not provide us with other services unless approved by our Compensation Committee.
In 2022, Pearl Meyer provided competitive data and a market analysis, which was used by our Compensation Committee in evaluating the compensation of our Chief Executive Officer and Chief Financial Officer.Pearl Meyer assists our Compensation Committee in its evaluation of our compensation philosophy and with the development of relevant metrics used by our Compensation Committee to assure internal pay equity and market parity. It also provides compensation benchmark data and information relative to our peer group.
As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, our Compensation Committee analyzed whether the services of Pearl Meyer could result in any conflicts of interest, giving consideration to the following factors:
● | Pearl Meyer does not provide any services to us other than as approved by our Compensation Committee; |
● | The fees we paid amount to less than |
● | The policies and procedures of our Compensation Committee were designed to ensure independence; |
● | Pearl Meyer does not have any business or personal relationship with any of our executive officers or any member of our Compensation Committee; and |
● | Neither Pearl Meyer nor any of its consultants who provide services to our Compensation Committee own any of our stock. |
Our Compensation Committee has determined based on its own analysis, that the services of Pearl Meyer, including the individual compensation advisors employed by it, have not created any conflicts of interest. On an annual basis, our Compensation Committee will continue to monitor the independence of its compensation consultant.
PEER GROUP DEVELOPMENT
Pearl Meyer developed a peer group of companies with characteristics generallyof comparable to our revenueindustry, size, and market capitalizationbusiness operations for review and approval by our Compensation Committee. The peer group companies usedwere selected to represent companies in the analysis are:household durables, leisure products, and textiles, apparel, and luxury goods industries that are within an appropriate revenue and market capitalization size range to Lifetime Brands. No changes to the 2021 peer group were made for 2022. The peer group is composed of the following companies:
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● | Crocs, Inc. |
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● | Helen of Troy Limited |
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● | Johnson Outdoors Inc. |
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● | Movado Group, Inc. |
● | Oxford Industries, Inc. |
● | The Buckle, Inc. |
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● | Unifi, Inc. |
● | Universal Electronics Inc. |
● | Vera Bradley, Inc. |
● | YETI Holdings, Inc. |
Our Compensation Committee believes that the companies included in the peer group are the most comparable public companies; however, most of our direct competitors are either smaller, international or privately-held. Our Compensation Committee considers the competitive data compiled by Pearl Meyer as reference points, but does not “benchmark” to specific pay levels when establishing goals and objectives relevant to our compensation policy. In 2015, Pearl Meyer provided competitive data and a market analysis, which was used by our Compensation Committee in evaluating executive compensation.
ELEMENTS OF NEO COMPENSATION
Base Salary
Salary is intended to compensate our executives for performance of core job responsibilities and duties. The base salary for each NEO per their respective employment agreements for 2022 and 2021 was as follows:
Executive
| 2022 Base Salary
| 2021 Base Salary
|
% Increase
| ||||||||||||
Robert Kay
Chief Executive Officer | $900,000 | $900,000 | 0% | ||||||||||||
Jeffrey Siegel
Chairman of our Board, Executive Chairman | $675,000 | $700,000 | (3.6)% | ||||||||||||
Daniel Siegel
President | $650,000 | $650,000 | 0% | ||||||||||||
Laurence Winoker
Executive Vice President - Treasurer and Chief Financial Officer | $425,000 | $425,000 | 0% |
The base salaries of Jeffrey Siegel, and Ronald ShiftanRobert B. Kay are fixed by employment agreements that were negotiated between Messrs. Siegel and Shiftan and our Compensation Committee.agreements. The amount and components of aggregate compensation for comparable positions in our peer group of companies as well as the preferences of Messrs. Siegel and Shiftan were taken into account by our Compensation Committee in determining their compensation.
In determining Mr. Siegel’s base salary, our Compensation Committee took into account Mr. Siegel’s long-standing executive role with us, his extensive knowledge of and experience in the housewares industry and his role in directing our growth. Our Compensation Committee views Mr. Siegel as one of the most experienced and successful executives in the housewares industry. The decrease in Mr. Siegel’s base salary from $700,000 in 2021 to $675,000 in 2022 reflects the terms of the J. Siegel Employment Agreement. In connection with Mr. Siegel’s transition to part-time employment for the period beginning on January 1, 2023 and ending on March 31, 2023, the date on which his employment with us terminated, Mr. Siegel’s rate of base salary was reduced to $14,000 per month (i.e., $168,000 per year).
In determining Mr. Shiftan’sKay’s base salary, our Compensation Committee took into account Mr. Kay’s role with Filament and his significantrole with us, his extensive knowledge of and experience in the housewares industry and his role in developing, structuringdirecting our growth. Pursuant to an amendment to Mr. Kay’s employment agreement, Mr. Kay’s annual rate of base salary was increased from $900,000 to $1,000,000 effective March 2, 2023 so that we could continue to provide competitive compensation and implementing our growth and acquisition strategies. Our Compensation Committee also consideredmore closely align Mr. Shiftan’s role in assisting Mr. Siegel in various aspectsKay’s base salary with those of our business.peers.
The base salaries of Daniel Siegel and Laurence Winoker are also set forth in their employment agreements, with us. The employment agreements were negotiated between Messrs. Siegel and Winoker with the Chief Executive Officer and the Chief Operating Officer, in consultation with our Compensation Committee. The salaries set forth in their employment agreements wereas determined by the Chief Executive Officer and Chief Operating Officer, in consultation with our Compensation Committee, taking into consideration their roles and responsibilities within the Company, as well as the amount and components of aggregate compensation for comparable positions in our peer group of companies.companies. Pursuant to amendments to their employment agreements, Mr. Siegel’s base salary was increased from $650,000 to $663,000, and Mr. Winoker’s base salary was increased from $425,000 to $446,250, in each case, effective January 1, 2023, in order to more closely align the executives’ base salaries with those of our peers.
Non-Equity Incentive Plan Compensation (Annual Cash Bonus)Annual Bonuses
Non-equity incentive plan compensation isAnnual bonuses are intended to compensate an executiveNEO for achievement of specific short-term performance goals for a specified performance period. Cash bonuses wereperiod and are based on achievement of both a Company performance metric and individual performance goals. Bonuses are awarded to Messrs. Jeffrey Siegel, Shiftan, Daniel Siegel and Winoker pursuant to the Company’s Amended and Restated 2000 Incentive Bonus Compensation Plan (the “Amended 2000 Bonus Plan”)and each NEO’s employment agreement. For 2022, our Compensation Committee determined that the Company performance metric applicable to annual bonuses would be based on Adjusted EBITDA (as defined below). All of our NEOs were eligible to receive annual bonuses for 2022.
The purpose
For each NEO eligible to receive an annual bonus for 2022, the weighting for both of the Amended 2000 Bonus Plan is: (i) to retainAdjusted EBITDA and motivate our key executives who have been designated as participantsIndividual Goal components are shown in this plan for a given performance period (usually one year) by providing them with the opportunity to earn bonus awards that are based on specified performance goals for the specified performance period and (ii) to structure bonus opportunities in a way that will qualify the awards as “performance-based” for purposes of Section 162(m) of the Internal Revenue Code (the “Code”) so that we will be entitled to a tax deduction for the payment of such incentive bonus awards to the designated participants.table below.
Executive |
Adjusted EBITDA Weighting as a % of Target |
Individual Goals Weighting as a % of Target | ||||||||
Robert Kay
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78.0%
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22.0%
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Jeffrey Siegel
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75.0%
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25.0%
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Daniel Siegel
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67.0%
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33.0%
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Laurence Winoker
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60.0%
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40.0%
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Our Compensation Committee has determined that Adjusted IBIT bestEBITDA is an appropriate measure because the Company uses this financial measure in evaluating the Company’s on-going financial results and trends. In addition, management uses this non-GAAP information as an indicator of business performance. It is also one of the measures the efforts and productivity of Messrs. Jeffrey Siegel, Shiftan, Daniel Siegel and Winoker. The term “Adjusted IBIT,” as it appliesused to any particular year, means that amount for such year equalcalculate financial covenants required to be provided to the Company’s income before income taxes and equity in earnings, as reported in our Form 10-K, subjectlenders pursuant to such adjustments as are set forth in the Adjusted IBIT Performance Bonus Table for such year.
its credit facilities. In determining tothe use of Adjusted IBITEBITDA as the Company performance measure for the purpose of the Amended 2000 Bonus Plan,metric, our Compensation Committee was also guided by the extent to which this measuremetric is within the control of the respective named executive officer. NEO.
For the purpose of establishing the targetportion of the annual bonus that is based on Adjusted IBITEBITDA for the named executive officers entitled to cash bonus incentive awards in a given year,NEOs, our Compensation Committee relied onconsidered data provided by Pearl Meyer as to benchmarks among our peer group of companies.Meyer. Our Compensation Committee also relied on our annual budget, which was approved by our Board, in establishing the threshold, targetpotential thresholds, targets and maximum bonusbonuses tied to achievement of these targets for the Chief Executive Officer and Chief Operating Officer and for the otherour NEOs.
In additionEach NEO’s employment agreement provides for a target annual bonus based on Adjusted EBITDA (“Adjusted EBITDA Target Bonus”) and a target annual bonus based on individual goal achievement (“Individual Goal Target Bonus”).
The portion of the Adjusted EBITDA Target Bonus payable to each NEO for each year (the “Annual Adjusted IBIT, individual goals are establishedEBITDA Performance Bonus”), if any, is based on an Annual Adjusted EBITDA Performance Table prepared by our Compensation Committee and the annual budget reviewed and approved by the Board and in accordance with the NEO’s employment agreement. The percentage of each NEO’s Annual Adjusted EBITDA Performance Bonus in the event of threshold, target, and maximum performance goal achievement is as follows:
Executive |
Threshold Payout (% of Adjusted |
Target Payout (% of Adjusted |
Maximum Payout (% of Adjusted | ||||||||||||
Robert Kay
|
50%
|
100%
|
200%
| ||||||||||||
Jeffrey Siegel
|
50%
|
100%
|
200%
| ||||||||||||
Daniel Siegel
|
50%
|
100%
|
150%
| ||||||||||||
Laurence Winoker
|
50%
|
100%
|
200%
|
Each NEO is entitled to receive sliding scale payout percentages if Adjusted EBITDA is between Adjusted EBITDA Performance Bonus levels. The Adjusted EBITDA Performance Bonus for any year will be zero if the Adjusted EBITDA achieved by the Company for such year is less than the threshold Adjusted EBITDA goal for such year, and in no event will an Annual Adjusted EBITDA Performance Bonus be more than 200% of the Adjusted EBITDA Target Bonus, in the case of Messrs. Kay, Jeffrey Siegel, and ShiftanWinoker, and 150% of the Adjusted EBITDA Target Bonus in the case of Mr. Daniel Siegel.
The portion of the Individual Goal Target Bonus payable to each NEO for each year (the “Annual Individual Goal Bonus”), if any, is determined based on the NEO’s satisfaction of individual performance objectives set by our Compensation Committee. With respect toCommittee, in the case of Messrs. WinokerKay and DanielJeffrey Siegel, individual goals based on financial and performance objectives are established by the Chief Executive Officer and Chief Operating OfficerMr. Kay in consultation with our Compensation Committee.Committee, in the case of Messrs. Daniel Siegel and Winoker. If each NEO satisfies 100% of such objectives, he is entitled to an Annual Individual Goal Bonus equal to 100% of the Individual Goal Target Bonus in accordance with the NEO’s employment agreement. If each NEO satisfies less than 100% of such objectives but at least 50% of such objectives, he is entitled to an Annual Individual Goal Bonus equal to at least 50% of the Individual Goal Target Bonus, and if he meets less than 50% of such objectives, he is not entitled to receive any Annual Individual Goal Bonus. The individual goals established for each of the NEOs for 20152022 are discussed below. At the end of the 2022 fiscal year, Messrs. Kay and Jeffrey Siegel and Shiftan prepareprepared written materials for our Compensation Committee with their assessments of whether their respective individual goals were achieved during the year. Messrs. Winoker and Daniel Siegel prepared written materials for Mr. Kay, for presentation to and consultation with our Compensation Committee, with their assessments of whether their respective individual goals were achieved during the year. Our Compensation Committee reviewsreviewed these materials and assessesassessed independently the extent to which their individual goals were achieved.
As permitted by our 2000 Long-Term Incentive Plan, approximately 60% of the cash incentive compensation payable to Messrs. Jeffrey Siegel, Shiftan, Daniel Siegel and Winoker in respect of fiscal year 2015 was paid in the form of shares of our common stock at the closing price therefor on the date of grant.
As set forth in detail in the table below, we achieved an Adjusted EBITDA of $58.2 million for the 2022 fiscal year, which was below the target performance metriclevel of the plan of $93.5 million and also below the threshold level. Adjusted EBITDA for 2022 is equal to the Company’s adjusted earnings before interest (including mark to market gain on interest rate derivatives), income taxes, depreciation, and amortization, adjusted to exclude undistributed equity in losses of investments, non-cash share based compensation expense, acquisition related expenses, integration costs, restructuring expenses, warehouse relocation and redesign expenses, and Wallace facility remediation expense, as determined by the Company and derived from the Company’s audited financial statements. Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of the Company’s net income (the most directly comparable GAAP measure) to Adjusted EBITDA is included in Appendix A.
2022 Annual Bonus Metric and Achievement
| ||||||||||||||||||||||||
Financial Metric |
Threshold Performance Level |
Target Performance Level |
Maximum Performance Level |
Maximum Level (Kay and J. Siegel) |
Actual Performance Achieved |
Payout % of (Kay, and J. |
Payout % of (D. Siegel) |
Payout % of (Winoker) | ||||||||||||||||
Adjusted EBITDA |
$78,551,760 |
$93,514,000 |
$108,476,240 |
$123,438,480 |
$58,202,000 |
0% |
0% |
0% |
Mr. Kay’s individual goals for 2022 included: improving profitability in international operations; launching of the distribution center in the Netherlands; generating revenues through the country manager initiative; growing the Company’s Tmall program; achievement of growth for the 2015 fiscal yearMikasa hospitality business; integration of S’well; achievement of positive contribution margin for Adjusted IBIT was $22.8 million. We achieved an Adjusted IBITS’well post integration; development of $21.5 milliona strategic share optimization plan; development of a proactive mergers and acquisitions program for the 2015 fiscal year.
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|
|
|
|
| ||||
|
|
|
|
|
Jeffrey Siegel
Jeffrey Siegel’s employment agreement entitles him to receive (a) an Annual Adjusted IBIT Performance Bonus at a targetBoard’s review; development and relaunch of the Company’s direct-to-consumer strategy; and providing support for the Company’s ESG efforts. Our Compensation Committee evaluated Mr. Kay’s achievement of his individual goals and determined that 100% of salary based on an Adjusted IBIT Performance Bonus Table prepared by our Compensation Committeethe goals were met and the annual budget reviewed and approved by our Board and (b) an Annualthat Mr. Kay would receive 100% of his Individual Goal Bonus based on certain measurable objectives (discussed below for 2015). Pursuant to Mr. Siegel’s employment agreement, the threshold Adjusted IBIT for any such year would be 50% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Siegel to receive 50% of the target bonus for such year consistent with the Adjusted IBIT Performance Bonus Table for such year. Similarly, the maximum Adjusted IBIT for such year would be 200% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Siegel to receive 200% of the target bonus for such year consistent with the Adjusted IBIT Performance Bonus Table for such year. The employment agreement also provides that the Adjusted IBIT Performance Bonus for any such year would be zero if the Adjusted IBIT we achieved for such year was less than the threshold Adjusted IBIT for such year.Target Bonus.
Mr. Siegel’s employment agreement further entitles him to receive an Annual Individual Goal Bonus equal to 25% of his salary for such year based on meeting individual measurable performance objectives set by our Compensation Committee in consultation with Mr. Siegel. If Mr. Siegel satisfies at least 50% of such objectives, he is entitled to an Annual Individual Goal Bonus equal to 12.5% of his salary for such year. If Mr. Siegel meets less than 50% of such objectives, he is not entitled to receive any Annual Individual Goal Bonus for such year.
Mr.Jeffrey Siegel’s individual goals for 20152022 included: continued development of alternative sources of supply overseas for the integrationCompany’s major divisions; development of our European subsidiaries; the continued expansionCompany’s ESG statement; advising divisions on methods to reduce product costs in a period of our international sales initiatives;high inflationary pressures within the supply chain; and development of a comprehensive plan to capture the market sharelist of millennial focused brands; an increase of our e-commerce presence; a reduction of the 2014 loss of the Home Décor business; an increase our margins through sourcing and division focus; leading the development of the Sabatier brand and; to update our executive succession plan.potential acquisitions. Our Compensation Committee evaluated Mr. Siegel’s achievement of his individual performance objectivesgoals and determined that 100% of the objectivesgoals were met at target.
For 2015, Mr. Siegel was awarded a total bonus of $1,194,812, based upon the attainment of the 2015 performance objectives. For the year ended December 31, 2015, the Adjusted IBIT amounted to $21.5 million, resulting in a payment of 94.5% of his target payment opportunity. The details of the results of Mr. Siegel’s full bonus payment opportunity (including individual target bonus opportunity) are provided in the table below.
Bonus Opportunity
| ||||||||||
Threshold |
Target |
Maximum |
Actual Bonus Paid |
% of Target | ||||||
TOTAL | $625,000 | $1,250,000 | $2,250,000 | 1,194,812 | 95.6% | |||||
Individual | $125,000 | $250,000 | $250,000 | $250,000 | 100% | |||||
Adjusted IBIT | $500,000 | $1,000,000 | $2,000,000 | $944,812 | 94.5% |
Ronald Shiftan
Mr. Shiftan’s third amended and restated employment agreement entitles Mr. Shiftan to receive (a) an Annual Adjusted IBIT Performance Bonus at a target of 90% of salary based on an Adjusted IBIT Performance Bonus Table prepared by our Compensation Committee and the annual budget reviewed and approved by our Board and (b) an Annual Individual Goal Bonus based on certain measurable objectives (discussed below for 2015). Pursuant to the third amended and restated employment agreement, the threshold Adjusted IBIT for any such year would be 50% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Shiftan to receive 50% of the target bonus for such year consistent with the Adjusted IBIT Performance Bonus Table for such year. Similarly, the maximum Adjusted IBIT for such year would be 200% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Shiftan to receive 200% of the target bonus for such year consistent with the Adjusted IBIT Performance Bonus Table for such year. The third amended and restated employment agreement also provides that the Adjusted IBIT Performance Bonus for any such year would be zero if the Adjusted IBIT we achieved for such year was less than the threshold Adjusted IBIT for such year.
Mr. Shiftan’s third amended and restated employment agreement further entitles him to receive an Annual Individual Goal Bonus equal to 15% of his salary for such year based on meeting individual measurable objectives set by the Chief Executive Officer and monitored by our Compensation Committee. If Mr. Shiftan satisfies at least 50% of such objectives, he is entitled to an Annual Individual Goal Bonus equal to at least 7.5% of his salary for such year. If Mr. Shiftan meets less than 50% of such objectives, he is not entitled to receive any Annual Individual Goal Bonus for such year.
Mr. Shiftan’s individual goals for 2015 included: pursuing merger and acquisition opportunities for us; identifying and pursuing opportunities to manufacture products in North America; driving our benchmarking project with the goal of reducing Selling, General and Administrative expenses as a percentage of net sales; identifying new systems to reduce costs; consolidating the Company’s distribution centers and software systems in the United Kingdom; upgrading our business operating system; implementing new order management systems; developing and implementing a new long-term incentive compensation scheme; expanding our in-house legal capacity; and monitoring and providing solutions to improve coordination and enhance profitability at our international affiliate and partner companies. Our Compensation Committee evaluated Mr. Shiftan’s achievement of his individual performance objectives and determined that the objectives were met at target.
For 2015, Mr. Shiftan was awarded a total bonus of $650,215, based on the attainment of the 2015 performance objectives. For the year ended December 31, 2015, Adjusted IBIT amounted to $21.5 million, resulting in a payment of 94.5% of his target payment opportunity. The details of the results of Mr. Shiftan’s full bonus payment opportunity (including individual target bonus opportunity) are provided in the table below.
Bonus Opportunity
| ||||||||||
Threshold |
Target |
Maximum |
Actual Bonus Paid |
% of Target | ||||||
TOTAL | $341,250 | $682,500 | $1,397,500 | $650,215 | 95.3% | |||||
Individual | $48,750 | $97,500 | $97,500 | $97,500 | 100% | |||||
Adjusted IBIT | $292,500 | $585,000 | $1,300,000 | $552,715 | 94.5% |
Daniel Siegel
Mr. Siegel’s employment agreement, as amended, entitles Mr. Siegel to receive (a) an Annual Adjusted IBIT Performance Bonus at a target of 75% of salary based on an Adjusted IBIT Performance Bonus Table prepared by management and the annual budget reviewed and approved by our Board and (b) an Annual Individual Goal Bonus based on certain measurable objectives (discussed below for 2015). Pursuant to the employment agreement, as amended, the threshold
Adjusted IBIT for the 2015 year, and thereafter, would be 50% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Siegel to receive 50% of the target bonus for such year consistent with the Adjusted IBIT Performance Bonus Table for such year. Similarly, the maximum Adjusted IBIT for such year would be 150% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Siegel to receive 150% of the target bonus for such year, consistent with the Adjusted IBIT Performance Table for such year. The employment agreement, as amended, also provides that Mr. Siegel is entitled towould receive sliding scale percentages100% of the target bonus set forth in the Adjusted IBIT Performance Table based upon Adjusted IBIT being more than the threshold Adjusted IBIT but less than the target Adjusted IBIT, or more than the target Adjusted IBIT but less than the maximum Adjusted IBIT. The Adjusted IBIT Performance Bonus for any such year will be zero if the Adjusted IBIT achieved by the Company for such year is less than the threshold Adjusted IBIT for such year, and in no event will an Adjusted IBIT Performance Bonus for any such year be more than the maximum target bonus for such year even if the Adjusted IBIT achieved by the Company for such year exceeds the maximum Adjusted IBIT for such year.his Individual Goal Target Bonus.
Mr. Siegel is also entitled to receive an Annual Individual Goal Bonus for the 2015 year and each year thereafter equal to 37.5% of his Base Salary for such year based on meeting individual measurable objectives set by the Chief Executive Officer and the Chief Operating Officer in consultation with Mr. Siegel, as determined by the Chief Executive Officer and the Chief Operating Officer in their sole discretion; provided, however, if, in the sole discretion of the Chief Executive Officer and the Chief Operating Officer, (y) Mr. Siegel meets at least 50% of such objectives, he shall be entitled to an Annual Individual Goal Bonus equal to not less than 18.75% of his Base Salary for such year and (z) Mr. Siegel meets less than 50% of such objectives, he shall not be entitled to receive any Annual Individual Goal Bonus for such year.
Mr.Daniel Siegel’s individual goals for 20152022 included: fulfilling his oversight responsibility for development of innovation in all areasmaximizing the design of the Company, including design, marketing and trends; fulfilling his responsibility for oursales organization; maintaining best in class showrooms, trade shows and showrooms in orderpacking efficiencies; continuing to enhance our strong position ingrow the market; increasing our brand development to achieve synergies across divisions; identifying strategic opportunities to achieve international growth; expanding our strategic plan;Company’s innovation pipeline; establishing a retail data team; and increasing his involvement in human resources and sales. The amount payable in connection with individual goals was subject to adjustment if we earned less than $10 million.establishing a three pillar strategy for the North American business. Our Chief Executive Officer and Chief Operating Officer, in consultation with our Compensation Committee, evaluated Mr. Daniel Siegel’s achievement of his individual performance objectivesgoals and determined that 100% of the objectivesgoals were met, at target.
For 2015,and that Mr. Daniel Siegel was awarded a total bonus of $514,714, based upon the attainment of the 2015 performance objectives. For the year ended December 31, 2015, Adjusted IBIT amounted to $21.5 million, resulting in a payment of 94.5%would receive 100% of his target payment opportunity. The details of the results of Mr. Siegel’s full bonus payment opportunity (including individual target bonus opportunity) are provided in the table below.
Bonus Opportunity
| ||||||||||
Threshold |
Target |
Maximum |
Actual Bonus Paid |
% of Target | ||||||
TOTAL | $267,188 | $534,375 | $712,500 | $514,714 | 96.3% | |||||
Individual | 89,063 | 178,125 | 178,125 | $178,125 | 100% | |||||
Adjusted IBIT | 178,125 | 356,250 | 534,375 | 336,589 | 94.5% |
Laurence Winoker
Mr. Winoker’s amended and restated employment agreement entitles Mr. Winoker to receive (a) an Annual Adjusted IBIT Performance Bonus at a target of 37.5% of salary based on an Adjusted IBIT Performance Bonus Table prepared by management and the annual budget reviewed and approved by our Board and (b) an Annual Individual Goal Bonus based on certain measurable objectives (discussed below for 2015). Pursuant to the amended and restated employment agreement, the threshold Adjusted IBIT for any such year would be 50% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Winoker to receive 50% of the target bonus for such year consistent with the Adjusted IBIT Performance Bonus Table for such year. Similarly, the maximum Adjusted IBIT for such year would be 150% of the target Adjusted IBIT for such year which, if achieved, would entitle Mr. Winoker to receive 200% of the target bonus for such year consistent with the Adjusted IBIT Performance Bonus Table for such year. The amended and restated employment agreement also provides that Mr. Winoker is entitled to receive sliding scale percentages of the target bonus set forth in the Adjusted IBIT Performance Table based upon Adjusted IBIT being more than the threshold Adjusted IBIT but less than the target Adjusted IBIT, or more than the target Adjusted IBIT but less than the maximum Adjusted IBIT. The amended and restated employment agreement also provides that the Adjusted IBIT Performance Bonus for any such year would be zero if the Adjusted IBIT we achieved for such year was less than the threshold Adjusted IBIT for such year, and in no event will an Adjusted IBIT Performance Bonus for any such year be more than the maximum target bonus for such year even if the Adjusted IBIT achieved by the Company for such year exceeds the maximum Adjusted IBIT for such year.
Mr. Winoker’s amended and restated employment agreement further entitles him to receive an Annual Individual Goal Bonus equal to 25% of his salary for such year based on meeting individual measurable objectives set by the Chief Executive Officer and Chief Operating Officer. If Mr. Winoker satisfies at least 50% of such objectives, he is entitled to an Annual Individual Goal Bonus equal to at least 12.5% of his salary for such year. If Mr. Winoker meets less than 50% of such objectives, he is not entitled to receive any Annual Individual Goal Bonus for such year.Target Bonus.
Mr. Winoker’s individual goals for 20152022 included: debt refinancing of the improvementCompany’s revolving credit facility; ensuring effective SOX controls for a remote work environment; continued driving of our income tax ratepositive cash flow to further improve the Company’s liquidity and implementationstrengthening the Company’s balance sheet; redesigning the Company’s long-term financial, planning & analysis process; and continued further development of further tax savings strategies; succession planning for key finance positions; raising new capital to increase liquidity; develop and implement plans to reduce Selling, General and Administrative expenses; and strengthen the financing department to improve forecasting accuracy. The amount payable in connection with individual goals was subject to adjustment if we earned less than $10 million.Company’s U.K. financial organization. Our Chief Executive Officer and Chief Operating Officer, in consultation with our Compensation Committee, evaluated Mr. Winoker’s achievement of his individual performance objectivesgoals and determined that approximately 75%100% of the objectivesgoals were met, at target.
For 2015,and that Mr. Winoker was awarded a total bonus of $230,905, based upon the attainment of the 2015 performance objectives. For the year ended December 31, 2015, Adjusted IBIT amounted to $21.5 million, resulting in a payment of 94.5%would receive 100% of his target payment opportunity. The details of the results of Mr. Winoker’s fullIndividual Goal Target Bonus.
Each NEO’s 2022 annual bonus payment opportunity (including individual target bonus opportunity) are providedis set forth in the table below.
Bonus Opportunity
| ||||||||||
Threshold |
Target |
Maximum |
Actual Bonus Paid |
% of Target | ||||||
TOTAL | 132,813 | 265,625 | 425,000 | 230,905 | 86.9% | |||||
Individual | 53,125 | 106,250 | 106,250 | 80,327 | 75.6% | |||||
Adjusted IBIT | 79,688 | 159,375 | 318,750 | 150,578 | 94.5% |
Executive |
Annual Adjusted EBITDA
|
Annual Individual Goal
|
Total 2022 Annual
|
% of Target
| ||||||||||||
Robert Kay |
|
$0 |
|
|
$225,000 |
|
|
$225,000 |
|
|
22% |
| ||||
Jeffrey Siegel |
|
$0 |
|
|
$168,750 |
|
|
$168,750 |
|
|
25% |
| ||||
Daniel Siegel |
|
$0 |
|
|
$243,750 |
|
|
$243,750 |
|
|
33% |
| ||||
Laurence Winoker |
|
$0 |
|
|
$106,250 |
|
|
$106,250 |
|
|
40% |
|
Equity Compensation
Equity compensation is intended to incentivize employees and to promote a closer identity of interestalignment between our employees and our stockholders. Additionally, performance shares reward NEOs if the Company achieves specified performance goals, and stock options and restricted stock are also aimed atincentivize retention asbased on the vesting period or the period during which the restrictions lapse, which generally ranges from one to four years.
Our Compensation Committee granted stock options and/ or restricted stockequity awards to Robert Kay, Jeffrey Siegel, Ronald Shiftan, Daniel Siegel and Laurence Winoker in connection with their entering into their respective employment agreements. In addition, each NEO generally receives an annual equity compensation grant once a year in connection with annual performance reviews based on an assessment of such person’sNEO’s individual performance and, where appropriate, the performance of such person’sNEO’s business unit (division), as well as our overall performance and the dilutive effect of the equity awards.
In 2015, upon the recommendation of our Compensation Committee, our Board restructured the Company’s historicalOur annual equity compensation program to be a program consistinggenerally consists of a mix of 50% time-based restricted stock awards and 50% performance-based stock awards.awards called performance shares. The time-based restricted stock vests 25% per year in four equal installments commencing on the first anniversary of the date of grant. The performance shares provide an opportunity for shares to be earned at the end of a three-year performance period if pre-established financial goals are met. Net Sales and adjustedThese goals have been tailored to be challenging to achieve, so as to incentivize our NEOs to maximize their performance. Adjusted EBITDA werewas established as the performance metricsmetric for our performance share awards granted in 2015,2020, 2021 and 2022,each with a three-year performance period ending on December 31, 2017.period. The final number of shares earned pursuant to aour performance share awardawards granted in 2020 is dependent on the cumulative net sales and cumulative adjusted EBITDA results over the three-year2020 through 2022 performance period with threshold, target and maximum awards equal to 75%, 100% and 150%, respectively, of the target number of performance share awards granted. The maximum potential payout of the stock awards would be 150% of the target shares awarded on the grant date. The maximum valueFor purposes of the performance share awards granted in 2020, “Adjusted EBITDA” is defined as our consolidated earnings before interest (including mark to market gain/loss on interest rate derivatives), income taxes, depreciation, and amortization, adjusted to exclude undistributed equity in earnings of investments, non-cash charges for 2015 determined asgoodwill and intangible impairments, non-cash share based compensation expense, restructuring expenses, integration costs, acquisition related expenses, warehouse relocation and redesign expenses and Wallace facility remediation expense. Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of Adjusted EBITDA to the grant would be as followsmost directly comparable GAAP measure is included in Appendix A.
Our performance shares granted in 2020 for the three-year performance period that ended on December 31, 2022, resulted in the following percentage payouts:
Performance Metrics | Weight | Target (in thousands) | Actual (in thousands) | % Target Earned | ||||||||||||
Adjusted EBITDA |
|
100% |
|
$ |
198,000 |
|
$ |
230,645 |
|
|
116.5% |
|
Actual performance share awards earned for the 2020 performance cycle are shown in the table below for each respective executive officer: Messrs. Jeffrey Siegel, Shiftan, and Daniel Siegel: $111,300, Mr. Winoker: $55,650. If the minimum financial goals are not met at the end of the three-year period, no awards will be paid out under the program.executive.
Stock options, restricted shares and performance awards granted in 2015, 2014 and 2013 were granted pursuant to our Amended and Restated 2000 Long-Term Incentive Plan (the “2000 Plan”). Under the 2000 Plan, awards for up to 4,850,000 shares of our common stock may be granted by our Board, or a duly appointed committee thereof, to directors, officers, employees, consultants and other service providers to us and our affiliates in the form of stock options or other equity-based awards. At December 31, 2015, 604,460 shares of the 4,850,000 shares authorized under the 2000 Plan were available for awards that could be granted.
Executive |
Performance Shares |
Performance Shares Earned |
Actual Performance | |||||||||
Robert Kay
|
|
10,000
|
|
|
116.5%
|
|
|
11,649
|
| |||
Daniel Siegel
|
|
6,250
|
|
|
116.5%
|
|
|
7,281
|
| |||
Laurence Winoker
|
|
4,500
|
|
|
116.5%
|
|
|
5,242
|
|
Other Compensation
We maintain a defined contribution 401(k) plan for all employees, including the NEOs. We also offer perquisites that we believe are customary and reasonable, such as Company-paid automobile expenses, and with respect to Messrs. Jeffrey Siegel Shiftan and Daniel SiegelKay, reimbursement or payment of certain insurance and professional expenses.
ACCOUNTING AND TAX CONSIDERATIONS
Section 162(m) of the Internal Revenue Code (the “Code”) generally disallows a tax deduction to public companies for compensation in excess of $1 million paid to any of the companies’company’s chief executive officer and certain other NEO’s. Qualifying performance-basedexecutive officers in any taxable year. Although our Compensation Committee considers tax consequences as a factor when it makes compensation is not subjectdecisions, it retains the discretion and flexibility to make compensation decisions resulting in the grant of non-deductible compensation to the deduction limitation if certain requirements are met. We periodically review potential consequences of Section 162(m) and may structure the performance-based portion of an executive’s compensation to comply with certain exemptions in Section 162(m). However, we reserve the right to use our judgment to authorize compensation paymentsextent it deems that do not comply with the exemptions provided for in Section 162(m), when we believe that such payments are appropriate and in the best interests of the stockholders, after taking into consideration changing business conditions and the executive officer’s performance.it is appropriate.
POLICY REGARDING RESTATEMENTS
We do not have a formal policy regarding adjustment or recovery of awards or payments if the relevant performance measures upon which they are based are restated or otherwise adjusted in a manner that would reduce the size of the award or payment. Under those circumstances, our Board or our Compensation Committee would evaluate whether adjustments or recoveries of awards would be appropriate based upon the facts and circumstances surrounding the restatement. We will comply with any future regulatory requirements as mandatedIn October 2022, the SEC adopted new Rule 10D-1 under the Dodd-FrankExchange Act, as they become effective.which requires national securities exchanges, including Nasdaq, to establish listing standards relating to executive officer incentive compensation clawback and disclosure rules. We intend to monitor the development of Nasdaq’s final listing standards and adopt an appropriate clawback policy in accordance with requirements of Nasdaq’s final listing standards.
COMPENSATION COMMITTEE REPORT
Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Our Compensation Committee also annually evaluates the levels of risks arising from our compensation policies and practices and reviews suggested practices to mitigate such risks. The risks considered by our Compensation Committee included the following:
|
|
|
We concluded that the risks arising from our compensation policies and practices are not reasonably likely to have a material adverse effect on us. Based on this review discussion and evaluation of risks,discussion, our Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in our Proxy Statement.
This report is not soliciting material, is not deemed to be filed with the SEC, and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
The Compensation Committee Cherrie Nanninga – Chair John Koegel Bruce G. Pollack COMPENSATION RISK MANAGEMENT The Company has reviewed its compensation policies and practices and concluded that any risks arising from the Company’s policies, plans and programs are not reasonably likely to have a material adverse effect on the Company. Accordingly, no material adjustments were made to the Company’s compensation policies and practices as a result of its risk profile. The Company reviewed the elements of compensation to determine whether any portion of the compensation programs encouraged excessive risk-taking and concluded: the allocation of compensation between cash compensation and equity compensation, combined with the vesting schedule under the equity plan, discourages short-term risk-taking; and the approach to goal setting, setting of targets with payouts at multiple levels of performance, capping the amount of the Company’s incentive payouts, and the evaluation of performance results assist in mitigating excessive risk-taking. To complement the existing risk-reducing features of the Company’s compensation policies and practices, the Company has stock ownership guidelines and an anti-hedging policy. The Compensation Committee will continue to monitor the Company’s compensation policies and practices to determine whether its risk management objectives are being met. | ||||
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| ||||
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during the 20152022 fiscal year were Michael J. Jeary, John Koegel, Bruce G. Pollack and Cherrie Nanninga. During the 20152022 fiscal year, no member of our Compensation Committee was an officer, former officer or employee of the Company or had any direct or indirect material interest in a transaction with us or in a business relationship with the Company that would require disclosure under the applicable rules of the SEC. In addition, no interlocking relationship existed between any member of our Compensation Committee, any member of our Board, or one of our executive officers, on the one hand, and any member of our Compensation Committee (or committee performing equivalent functions, or the full board of directors)directors or an executive officercompensation committee of any other entity, on the other hand.company.
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation of our NEOs.
Name, Principal Position | Year | Salary | Non-Equity Incentive Plan Compensation | Stock (1) (2) | Option Awards (1) | All Other (7) | Total | |||||||||||||
Jeffrey Siegel (3)
Chairman of our Board, Chief Executive Officer
| 2015 | $ | 1,000,000 | $ 1,194,812 | $ | 148,400 | $ | - | $ 117,122 | $ 2,460,334 | ||||||||||
2014 | 1,000,000 | 865,757 | - | 1,091,760 | 116,239 | 3,073,756 | ||||||||||||||
2013 | 1,000,000 | 1,535,091 | - | 155,520 | 97,576 | 2,788,187 | ||||||||||||||
Ronald Shiftan (4)
Vice Chairman of
|
2015 | 650,000 | 650,215 | 215,300 | 200,000 | 95,400 | 1,810,915 | |||||||||||||
2014 | 650,000 | 457,718 | - | 157,760 | 104,507 | 1,369,985 | ||||||||||||||
2013 | 649,677 | 886,340 | - | 610,680 | 102,126 | 2,248,823 | ||||||||||||||
Daniel Siegel (5)
President |
2015 | 475,000 | 514,714 | 148,400 | - | 28,239 | 1,166,353 | |||||||||||||
2014 | 460,481 | 323,418 | 74,700 | 157,760 | 9,600 | 1,025,959 | ||||||||||||||
2013 | 450,000 | 441,614 | - | 103,680 | 9,600 | 1,004,894 | ||||||||||||||
Laurence Winoker (6)
| 2015 | 425,000 | 230,905 | 74,200 | - | 12,044 | 742,149 | |||||||||||||
Senior Vice |
2014 | 425,000 | 204,386 | - | 78,880 | 11,843 | 720,109 | |||||||||||||
2013 | 425,000 | 333,664 | - | 51,840 | 12,090 | 822,594 |
Name, Principal Position | Year | Salary (1) | Non-Equity Incentive Plan Compensation | Stock (2) (3) (4) | All Other Compensation (5) | Total | ||||||||||||||||||
Robert Kay | 2022 | $ | 900,000 | $ | 225,000 | $ | 2,401,430 | $ | 55,175 | $ | 3,581,605 | |||||||||||||
Chief Executive Officer | 2021 | 883,846 | 1,545,866 | 2,097,633 | 32,375 | 4,559,720 | ||||||||||||||||||
2020 | 763,077 | 1,250,000 | 517,624 | 21,500 | 2,552,201 | |||||||||||||||||||
Jeffrey Siegel Chairman of our Board, | 2022 | 675,000 | 168,750 | — | 31,441 | 875,191 | ||||||||||||||||||
2021 | 700,000 | 1,075,023 | — | 32,351 | 1,807,374 | |||||||||||||||||||
2020 | 667,692 | 962,500 | 537,942 | 124,005 | 2,292,139 | |||||||||||||||||||
Daniel Siegel President | 2022 | 650,000 | 243,750 | 402,270 | 18,000 | 1,314,020 | ||||||||||||||||||
2021 | 650,000 | 975,000 | 425,400 | 18,000 | 2,068,400 | |||||||||||||||||||
2020 | 534,135 | 825,000 | 336,091 | 18,000 | 1,713,226 | |||||||||||||||||||
Laurence Winoker Executive Vice President -Treasurer and Chief Financial Officer | 2022 | 425,000 | 106,250 | 195,040 | 12,000 | 738,290 | ||||||||||||||||||
2021 | 425,000 | 425,000 | 177,250 | 12,000 | 1,039,250 | |||||||||||||||||||
2020 | 412,740 | 425,000 | 170,568 | 12,000 | 1,020,308 |
Notes:
(1) | In 2020, each of our NEOs voluntarily took a temporary base salary reduction from April 13, 2020 through July 5, 2020 as part of the Company’s cost reduction efforts in light of the effects of the COVID-19 pandemic. |
Represents the aggregate grant date fair value of the awards as determined under Financial Accounting Standards Board Accounting Standards Codification Topic No. 718-20, Awards Classified as Equity, which |
For 2020, includes restricted stock awards granted in 2020 in respect of 2019 annual bonuses. Such awards were subject to a one year vesting period. |
(4) | The grant date fair value of the performance share awards included in this column is the target payout based on the probable outcome of the performance-based conditions determined as of the grant date. The maximum potential payout of the stock awards would be 150% of the target shares awarded on the grant date. The maximum value of the performance share |
|
2014 –As permitted by our 2000 Long-Term Plan, $545,777 of Mr. Siegel’s non-equity incentive plan compensation was paid in the form of shares of our common stock at the closing price therefor on the date of grant. Option awards granted in 2014 includes options granted pursuant to Mr. Siegel’s employment agreement dated as of March 12, 2014.
|
2014 –As permitted by our 2000 Long-Term Plan, $268,144 of Mr. Shiftan’s non-equity incentive plan compensation was paid in the form of shares of our common stock at the closing price therefor on the date of grant.
2013 –Option awards granted in 2013 includes options granted pursuant to Mr. Shiftan’s second amended and restated employment agreement dated as of December 20, 2012.
(5) |
|
2014 – As permitted by our 2000 Long Term Plan, $195,742 of Mr. Siegel’s non-equity incentive plan compensation was paid in the form of shares of our common stock at the closing price therefor on the date of grant. Stock awards granted in 2014 includes restricted shares granted pursuant to Mr. Siegel’s employment agreement dated November 28, 2014.
|
2014 – As permitted by our 2000 Long Term Plan, $115,997 of Mr. Winoker’s non-equity incentive plan compensation was paid in the form of shares of our common stock at the closing price therefor on the date of grant.
All Other Compensation includes the following: |
Name | Year | Insurance Reimbursement | Automobile Related | Professional fees | Total All Other Compensation | |||||
Jeffrey Siegel |
2015
|
$ 75,000
|
$ 27,122
|
$ 15,000
|
$ 117,122
| |||||
2014
|
75,000
|
36,239
|
5,000
|
116,239
| ||||||
2013
|
60,000
|
31,376
|
6,200
|
97,576
| ||||||
Ronald Shiftan |
2015
|
60,000
|
20,400
|
15,000
|
95,400
| |||||
2014
|
60,000
|
36,297
|
8,210
|
104,507
| ||||||
2013
| 60,000
| 29,501
| 12,625
| 102,126
| ||||||
Daniel Siegel |
2015
| -
| 21,739
| 6,500
| 28,239
| |||||
2014
| -
| 9,600
| -
| 9,600
| ||||||
2013
| -
| 9,600
| -
| 9,600
| ||||||
Laurence Winoker |
2015
|
-
|
12,044
|
-
|
12,044
| |||||
2014
|
-
|
11,843
|
-
|
11,843
| ||||||
2013
|
-
|
12,090
|
-
|
12,090
|
Name |
Year |
Insurance |
Automobile |
Professional |
Misc. |
Total All Other | ||||||||||||||||||
Robert Kay | 2022 | $ | 29,425 | $ | 18,000 | $ | 7,750 | $ | — | $ | 55,175 | |||||||||||||
2021 | — | 18,000 | 14,375 | — | 32,375 | |||||||||||||||||||
2020 | — | 18,000 | 3,500 | — | 21,500 | |||||||||||||||||||
Jeffrey Siegel | 2022 | — | 23,909 | 7,533 | — | 31,441 | ||||||||||||||||||
2021 | — | 28,351 | 4,000 | — | 32,351 | |||||||||||||||||||
2020 | 100,000 | 24,005 | — | — | 124,005 | |||||||||||||||||||
Daniel Siegel | 2022 | — | 18,000 | — | — | 18,000 | ||||||||||||||||||
2021 | — | 18,000 | — | — | 18,000 | |||||||||||||||||||
2020 | — | 18,000 | — | — | 18,000 | |||||||||||||||||||
Laurence Winoker | 2022 | — | 12,000 | — | — | 12,000 | ||||||||||||||||||
2021 | — | 12,000 | — | — | 12,000 | |||||||||||||||||||
2020 | — | 12,000 | — | — | 12,000 |
COMPENSATIONEMPLOYMENT AGREEMENTS OF THE NEOs
Jeffrey SiegelRobert B. Kay
During 2015, Jeffrey Siegel2022, Robert B. Kay was employed by us as Chairman of our Board,the Chief Executive Officer and directorof the Company pursuant to an employment agreement with the Company, dated as of December 22, 2017, which became effective upon the closing of the Filament Acquisition on March 12, 2014.
Mr. Siegel’s employment agreement, which2, 2018 and was effectiveamended as of January 1, 2014, extended2019, March 3, 2021, and March 2, 2023 (the “Kay Employment Agreement”).
The Kay Employment Agreement provides for a term through the termthird anniversary of Mr. Siegel’s employment through December 31, 2016,the consummation of the Filament Acquisition, March 2, 2021, with an automatic renewalrenewals for an additional one-year period periods unless his employmentnotice of non-renewal is terminatedprovided by either us or Mr. Siegel, and provides forKay, an annual base salary of $1,000,000; Company-paid$900,000 (for 2022) and an automobile expenses;allowance of up to $1,500 per month. The Kay Employment Agreement further provides for the reimbursement to Mr. Kay of certainup to a total of $40,000 during any calendar year for legal, financial and other professional services upservices. On March 8, 2023, the Kay Employment Agreement was amended, effective as of March 2, 2023, to $15,000 during any 12-month period; and reimbursement of insurance premiums upincrease Mr. Kay’s annual base salary to $75,000 per year.$1,000,000.
Pursuant toThe Kay Employment Agreement provides Mr. Siegel’s employment agreement, we granted him an option to purchase 100,000 shares of our common stock at a price per share equal toKay with the closing stock price on March 12, 2014. Such stock option vests in three installments, the last of which becomes exercisable on December 31, 2016 and the option will expire ten years from the date of grant. The employment agreement also entitles Mr. Siegelopportunity to receive an Annual Adjusted IBIT Performance Bonus and an Annual Individual Goal Bonus as described underNon-Equity Incentive Plan Compensation.
Mr. Siegel’s employment agreement further provides for payments due to Mr. Siegel upon the termination of his employment as described underPotential Payments Upon Termination or Change in Control.
The complete text of Mr. Siegel’s employment agreement was filed with the SEC as an exhibit to a Form 8-K dated March 18, 2014. Mr. Siegel’s employment agreement is incorporated here by reference and the foregoing description of such agreement is qualified by the text of such agreement.
Ronald Shiftan
During 2015, Ronald Shiftan was employed by us as our Vice Chairman and Chief Operating Officer pursuant to an employment agreement dated August 10, 2009, as amended as of November 9, 2010, as amended and restated as of December 20, 2012 and as amended and restated as of November 24, 2015 (the “Shiftan Third Amended and Restated Employment Agreement”).
The Shiftan Third Amended and Restated Employment Agreement extended the term of Mr. Shiftan’s employment through December 31, 2018, with automatic renewal for additional one-year periods unless his employment is terminated by either us or Mr. Shiftan, and provides for an annual base salary of $650,000; Company-paid automobile expenses; and reimbursement of insurance premiums, certain legal, financial and other professional services up to $75,000 during any calendar year.
Pursuant to the Shiftan Third Amended and Restated Employment Agreement, we granted Mr. Shiftan an option to purchase 50,000 shares of our common stock at a price per share equal to the closing stock price on December 31, 2015. The option shall vest as to 16,667 shares on each of December 31, 2016 and December 31, 2017 and as to 16,666 shares on December 31, 2018. Pursuant to the Shiftan Third Amended and Restated Employment Agreement, we granted Mr. Shiftan 5,000 restricted shares of our common stock. The restrictions on 1,667 restricted shares shall terminate on each of December 31, 2016 and December 31, 2017 and the restrictions on 1,666 restricted shares shall terminate on December 31, 2018.
The Shiftan Third Amended and Restated Employment Agreement also entitles Mr. Shiftan to receive an Annual Adjusted IBITEBITDA Performance Bonus and an Annual Individual Goal Bonus based on certain measurable objectives as described underNon-Equity Incentive Plan Compensation.Annual Bonuses.
The Shiftan Third Amended and RestatedKay Employment Agreement further provides for payments due to Mr. ShiftanKay upon the termination of his employment under certain circumstances, as described underPotential Payments Upon Termination or Change in Control.of Control.
The complete text of Mr. Shiftan’s Amended and Restated Employment Agreement dated August 10, 2009 was filed with the SEC as an exhibit to a Form 8-K dated August 12, 2009. The complete text of the amendment dated as of November 9, 2010 was filed with the SEC as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2010. The complete text of the Shiftan Second Amended and RestatedKay Employment Agreement was filed with the SEC as an exhibit to a Form 8-K dated filed on December 20, 2012.29, 2017. The complete text of the Shiftan Third Amended and Restatedfirst amendment to the Kay Employment Agreement was filed with the SEC on October 15, 2019 as an exhibit to a Form 8-K, dated November 30, 2015. The Amended and Restated the complete text of the second amendment to the Kay Employment Agreement dated August 10, 2009, the amendment dated November 9, 2010, the amendment dated December 20, 2012was filed on February 5, 2021 as an exhibit to a Form 8-K, and the Shiftan Third Amended and Restatedcomplete text of the third amendment to the Kay Employment Agreement was filed on March 9, 2023 as an exhibit to a Form 10-K. The Kay Employment Agreement and the amendments thereto are incorporated hereherein by reference and the foregoing descriptionsdescription of such agreements areis qualified in its entirety by the text of such agreements.
DanielJeffrey Siegel
During 2015, Daniel2022, Jeffrey Siegel was employed by us as our President. PriorExecutive Chairman of the Board pursuant to thean employment agreement, dated as of June 27, 2019, which was subsequently amended on October 11, 2019 (as amended, the “J. Siegel Employment Agreement”). Certain provisions of the J. Siegel Employment Agreement were amended by the Transition Agreement between Jeffrey Siegel and the Company, dated November 28, 2014,1, 2022 (the “Transition Agreement”).
The J. Siegel Employment Agreement first became effective as of AugustJanuary 1, 2014, and as amended as2020. When it was entered into, the J. Siegel Employment Agreement had a fixed three-year term that expired on December 31, 2022. The J. Siegel Employment Agreement did not include a provision for renewal because the Board expected that Jeffrey Siegel’s employment with the Company would terminate on December 31, 2022. In November of April 27, 2015,2022, the Company entered into the Transition Agreement in order to retain Mr. Siegel did not have anon a part-time basis for a short transition period from December 31, 2022 until March 31, 2023 so that Mr. Siegel could support certain business matters related to the 2022 fiscal year, including advice and consultation with respect to the Company’s 2022 Annual Report. During Mr. Siegel’s part-time employment agreementpursuant to the Transition Agreement, he received only reduced base salary (described below) and the ability to participate in Company benefit plans, to the extent consistent with us.applicable plan terms.
Mr. Siegel’s employment agreement,with the Company terminated on March 31, 2023, and Mr. Siegel was appointed as amended, establishedChairman of the Board effective April 1, 2023.
During the term of the J. Siegel Employment Agreement, the Company recommended that Mr. Siegel be nominated by the Board for re-election to the Board and be re-elected by the Board as Chairman.
Under the J. Siegel Employment Agreement, Mr. Siegel’s employment through Decemberbase salary was $700,000 for each of 2020 and 2021, and was $675,000 for 2022. For the period beginning on January 1, 2023 and ending on March 31, 2017, with automatic renewal for additional one-year periods unless his employment is terminated by either us or2023, pursuant to the terms of the Transition Agreement, Mr. Siegel’s base salary was reduced to $14,000 per month ($168,000 per year).
For 2022, the J. Siegel Employment Agreement provided Mr. Siegel and provides for an annual base salary of $475,000 and certain perquisites including fringe benefits, Company-paid automobile expenses and a one-time reimbursement of certain legal professional services, up to $6,500. The employment agreement, as amended, also entitles Mr. Siegelwith the opportunity to receive an Annual Adjusted IBITEBITDA Performance Bonus and an Annual Individual Goal Bonus based on certain measurable objectives as described underNon-Equity Incentive Plan CompensationAnnual Bonuses.. Mr. Siegel is not eligible to receive an annual bonus for 2023.
PursuantUntil December 31, 2022, the Company provided Mr. Siegel with the automobile provided to Mr. Siegel’s employment agreement, we granted him 5,000 restricted shares of our common stock on November 28, 2014. The restrictions on one-thirdas an officer of the restricted shares terminates on eachCompany during the year ending December 31, 2019 or a monthly cash payment equal to the monthly lease payment paid by the Company in respect of August 1, 2015, 2016such automobile and 2017.
Mr. Siegel’s employment agreement, as amended, further providesreimbursement for payments due toautomobile insurance premiums. Until December 31, 2022, Mr. Siegel also received reimbursement of insurance premiums and certain legal, financial and other professional services up to $100,000 during any calendar year.
The J. Siegel Employment Agreement provided Mr. Siegel with certain payments and benefits upon the termination of his employment, as described underPotential Payments Upon Termination or Change in Control.of Control.
The complete text of Mr. Siegel’s employment agreement, dated as of November 28, 2014,the J. Siegel Employment Agreement was filed with the SEC as an exhibit to a Form 8-K dated December 3, 2014.June 27, 2019. The complete text of the first amendment to his employment agreementthe J. Siegel Employment Agreement was filed with the SEC as an exhibit to a Form 8-K dated April 29, 2015. Mr. Siegel’s employment agreementOctober 11, 2019, and the amendmentTransition Agreement was filed with the SEC as an exhibit to a Form 10-Q dated November 3, 2022. The J. Siegel Employment Agreement and the amendments thereto (including the Transition Agreement) are incorporated hereherein by reference and the foregoing description of such agreements areis qualified in its entirety by the text of such agreements.
Laurence WinokerDaniel Siegel
During 2015, Laurence Winoker2022, Daniel Siegel was employed by us as our Senior Vice-President — Finance, Treasurer and Chief Financial OfficerPresident pursuant to an employment agreement dated as of June 28, 2007,November 8, 2017, effective as of January 1, 2018 and amended as of March 8, 2010January 1, 2019, January 1, 2021 and April 12, 2012 and as amended and restated as of September 10, 2015January 1, 2023 (the “Winoker Amended and Restated“D. Siegel Employment Agreement”).
The Winoker Amended and RestatedD. Siegel Employment Agreement provides that the term of Mr. Siegel’s employment is through December 31, 2020, with automatic renewals for anadditional one-year periods unless notice of non-renewal is provided by us or Mr. Siegel. On March 8, 2023, the D. Siegel Employment Agreement was amended, effective as of January 1, 2023, to increase Mr. Siegel’s annual base salary from $650,000 (for 2022) to $663,000.
The D. Siegel Employment Agreement provides certain perquisites including an automobile allowance of $425,000 for 2015 and$1,500 per month. The D. Siegel Employment Agreement also entitles Mr. Siegel to receive an Annual Adjusted IBITEBITDA Performance Bonus and an Annual Individual Goal Bonus based on certain measurable objectives as described underNon-Equity Incentive Plan CompensationAnnual Bonuses.
The D. Siegel Employment Agreement further provides for payments to Mr. Siegel upon the termination of his employment under certain circumstances as described under Potential Payments Upon Termination or Change of Control.
The complete text of the D. Siegel Employment Agreement, dated as of November 8, 2017, was filed with the SEC on November 9, 2017 as an exhibit to a Form 10-Q. The complete text of the first amendment to the D. Siegel Employment Agreement was filed with the SEC on October 15, 2019 as an exhibit to a Form 8-K, the complete text of the second amendment to the D. Siegel Employment Agreement was filed on February 5, 2021 as an exhibit to a Form 8-K, and the complete text of the third amendment to the D. Siegel Employment Agreement was filed on March 9, 2023 as an exhibit to a Form 10-K. The D. Siegel Employment Agreement and the amendments thereto are incorporated herein by reference and the foregoing description of such agreements is qualified in its entirety by the text of such agreements.
Laurence Winoker
During 2022, Laurence Winoker was employed by us pursuant to an employment agreement, amended and restated as of September 10, 2015 and further amended as of November 8, 2017, January 1, 2019, August 1, 2022 and January 1, 2023 (the “Winoker Amended and Restated Employment Agreement”). Prior to August 1, 2022, Mr. Winoker served as Senior Vice President – Finance, Treasurer and Chief Financial Officer, and effective August 1, 2022, Mr. Winoker was promoted to Executive Vice President – Treasurer and Chief Financial Officer.
The Winoker Amended and Restated Employment Agreement provides for an annual base salary (for 2022) of $425,000, and on March 8, 2023, the Winoker Amended and Restated Employment Agreement was amended, effective as of January 1, 2023, to provide for an annual base salary of $446,250.
The Winoker Amended and Restated Employment Agreement also provides for an Annual Adjusted EBITDA Performance Bonus and an Annual Individual Goal Bonus based on certain measurable objectives as described under Annual Bonuses and certain perquisites, including fringe benefits and Company-paidan automobile related expenses.allowance of $1,000 per month.
The Winoker Amended and Restated Employment Agreement further provides for payments to Mr. Winoker upon the termination of his employment under certain circumstances as described underPotential Payments Upon Termination or Change inof Control.
The complete text of Mr. Winoker’s employment agreement, dated as of June 28, 2007, was filed with the SEC as an exhibit to a Form 8-K dated July 3, 2007. The complete text of the first amendment to Mr. Winoker’s employment agreement was filed with the SEC as an exhibit to a Form 8-K dated March 10, 2010. The complete text of the second amendment to Mr. Winoker’s employment agreement was filed with the SEC as an exhibit to a Form 8-K dated April 16, 2012. The complete text of theWinoker Amended and Restated Employment Agreement was filed with the SEC as an exhibit to a Form 8-K dated September 16, 2015. Mr. Winoker’s employment agreement,The complete text of the first amendment to his employment agreement,the Winoker Amended and Restated Employment Agreement was filed with the SEC on November 9, 2017 as an exhibit to a Form 10-Q, the complete text of the second amendment to his employment agreementthe Winoker Amended and Restated Employment Agreement was filed with the SEC on October 15, 2019 as an exhibit to a Form 8-K, the complete text of the third amendment to the Winoker Amended and Restated Employment Agreement was filed with the SEC on August 4, 2022 as an exhibit to a Form 10-Q, and the complete text of the fourth amendment to the Winoker Amended and Restated Employment Agreement was filed with the SEC on March 9, 2023 as an exhibit to a Form 10-K. The Winoker Amended and Restated Employment Agreement and the amendments to the Winoker Amended and Restated Employment Agreement are incorporated hereherein by reference and the foregoing descriptionsdescription of such agreements areis qualified in its entirety by the text of such agreements.
GRANTS OF PLAN-BASED AWARDS DURING FISCAL YEAR ENDED DECEMBERDecember 31, 20152022
The following table sets forth information regarding grants of plan-based compensation to the NEOs during 2015.2022.
Name | Grant date | Estimated future payouts under non-equity incentive plan awards (1) | Estimated future payouts plan awards(2) | All other stock shares of stock (#) | All other option options (#) | Exercise or base option ($) | Grant date fair value of awards ($) | Grant date | Estimated possible payouts under non-equity incentive plan awards (1) | Estimated future payouts under equity incentive plan awards (2) | All other stock awards: Number of shares of stock (#) | All other option awards: Number of securities underlying options (#) | Exercise or base price of option awards ($) | Grant date fair value of stock and option awards ($) | ||||||||||||||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey Siegel | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Robert Kay | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Plan | $ | 625,000 | $ | 1,250,000 | $ | 2,250,000 | 506,250 | 1,012,500 | 1,800,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | June 10, 2015 | 5,000 (3) | $ | 74,200 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance shares | June 10, 2015 | 3,750 | 5,000 | 7,500 | 74,200 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ronald Shiftan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Plan | 341,250 | 682,500 | 1,397,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option | December 31, 2015 | 50,000 (4) | $ 13.26 | 200,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | June 10, 2015 | 5,000 (3) | 74,200 | March 8, 2022 | 98,500 (3) | 1,200,715 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
November 24, 2015 | 5,000 (5) | 66,900 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance shares | June 10, 2015 | 3,750 | 5,000 | 7,500 | 74,200 | March 8, 2022 | 73,875 | 98,500 | 147,750 | 1,200,715 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey Siegel | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Plan | 337,500 | 675,000 | 1,181,250 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Daniel Siegel | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Plan | 267,188 | 534,375 | 712,500 | 365,625 | 731,250 | 975,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | June 10, 2015 | 5,000 (3) | 74,200 | March 8, 2022 | 16,500 (3) | 201,135 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance shares | June 10, 2015 | 3,750 | 5,000 | 7,500 | 74,200 | March 8, 2022 | 12,375 | 16,500 | 24,750 | 201,135 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Laurence Winoker | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive Plan | 132,813 | 265,625 | 425,000 | 132,813 | 265,625 | 425,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares | June 10, 2015 | 2,500 (3) | 37,100 | March 8, 2022 | 8,000 (3) | 97,520 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance shares | June 10, 2015 | 1,875 | 2,500 | 3,750 | 37,100 | March 8, 2022 | 6,000 | 8,000 | 12,000 | 97,520 |
Notes:
(1) | The threshold, target and maximum payouts disclosed in the table above include the Annual Adjusted |
(2) | The threshold, target and maximum performance share |
(3) | Represents restricted stock granted under the Amended and Restated 2000 |
OPTION EXERCISES AND STOCK VESTED DURING FISCAL YEAR ENDED DECEMBERDecember 31, 20152022
Restricted Stock Awards | Option Awards | Restricted Stock Awards and Performance Share Awards | ||||||||||||||||||
Name |
Number of shares acquired on vesting | Value realized on exercise |
Number of shares exercise |
Value realized |
Number of shares vesting |
Value realized on | ||||||||||||||
Robert Kay | — | $ — | 105,472 | $ 1,307,568 | ||||||||||||||||
Jeffrey Siegel | 30,000 | 50,700 | 34,834 | 270,060 | ||||||||||||||||
Daniel Siegel | 1,667 | $24,238 | 10,000 | 12,038 | 14,736 | 183,731 | ||||||||||||||
Laurence Winoker | 10,000 | 18,900 | 9,123 | 112,017 |
(1) | Stock awards value realized is determined by multiplying (i) the closing market price of the Company’s common stock on the vesting date by (ii) the number of shares of common stock that vested on that date. |
OUTSTANDING EQUITY AWARDS HELD BY NEOs AT DECEMBERDecember 31, 20152022
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) | Option exercise price ($) | Option expiration date | Number of Shares or Units of Stock that have not vested (#) | Market Value of Shares or Units of Stock That have not vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that have not vested ($) | ||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey Siegel | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | 15,000 | (1) | 4.60 | November 9, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||
100,000 | (2) | 13.27 | May 6, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||
150,000 | (3) | 11.73 | March 3, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||
22,500 | (4) | 7,500 | (4) | 11.64 | April 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
12,000 | (5) | 12,000 | (5) | 12.79 | May 6, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||
66,667 | (6) | 33,333 | (6) | 18.04 | March 12, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
4,000 | (7) | 12,000 | (7) | 19.10 | April 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Shares | 5,000 | (8) | 66,300 | (10) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Shares | 5,000 | (9) | 66,300 | (10) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Ronald Shiftan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
15,000 | (11) | 4.60 | November 9, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
50,000 | (2) | 13.27 | May 6, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||
20,000 | (12) | 10.79 | June 15, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | 15,000 | (4) | 5,000 | (4) | 11.64 | April 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
100,000 | (13) | 10.72 | January 2, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
8,000 | (5) | 8,000 | (5) | 12.79 | May 6, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||
4,000 | (7) | 12,000 | (7) | 19.10 | April 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
50,000 | (14) | 13.26 | January 1, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Shares | 5,000 | (8) | 66,300 | (10) | ||||||||||||||||||||||||||||||||||||||||||||||||||
5,000 | (15) | 66,300 | (10) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Shares | 5,000 | (9) | 66,300 | (10) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Daniel Siegel | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
12,000 | (16) | 29.96 | May 1, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||
25,000 | (2) | 13.27 | May 6, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options | 3,750 | (12) | 10.79 | June 15, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||
11,250 | (4) | 3,750 | (4) | 11.64 | April 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
8,000 | (5) | 8,000 | (5) | 12.79 | May 6, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||
4,000 | (7) | 12,000 | (7) | 19.10 | April 29, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Shares | 5,000 | (8) | 66,300 | (10) | ||||||||||||||||||||||||||||||||||||||||||||||||||
3,333 | (17) | 44,196 | (10) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Shares | 5,000 | (9) | 66,300 | (10) |
Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||
Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Option exercise price ($) | Option
| Number of Shares or Units of Stock have not vested (#) | Market Value of Shares or Units of Stock That have not vested ($) | Equity | Equity Incentive Plan Market or Payout Value Shares, Units or Other have not vested ($) | |||||||||||||||||||||||||||||
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Robert Kay | |||||||||||||||||||||||||||||||||||||
Stock Options | |||||||||||||||||||||||||||||||||||||
Restricted Shares | 15,625 (3) | 118,594 (4) | |||||||||||||||||||||||||||||||||||
5,000 (5) | 37,950 (4) | ||||||||||||||||||||||||||||||||||||
55,473 (6) | 421,040 (4) | ||||||||||||||||||||||||||||||||||||
98,500 (7) | 747,615 (4) | ||||||||||||||||||||||||||||||||||||
Performance Shares | 10,000 (8) | 75,900 (4) | |||||||||||||||||||||||||||||||||||
73,965 (9) | 561,394 (4) | ||||||||||||||||||||||||||||||||||||
98,500 (10) | 747,615 (4) | ||||||||||||||||||||||||||||||||||||
Jeffrey Siegel | |||||||||||||||||||||||||||||||||||||
Stock Options | 24,000 (11) | $12.79 | May 6, 2023 | ||||||||||||||||||||||||||||||||||
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75,000 (14) | $16.60 | ||||||||||||||||||||||||||||||||||||
Daniel Siegel | |||||||||||||||||||||||||||||||||||||
Stock Options | 16,000 (11) | $12.79 | May 6, 2023 | ||||||||||||||||||||||||||||||||||
16,000 (13) | $19.10 | April 29, 2024 | |||||||||||||||||||||||||||||||||||
Restricted Shares | 1,563 (3) | 11,863 (4) | |||||||||||||||||||||||||||||||||||
3,125 (5) | 23,719 (4) | ||||||||||||||||||||||||||||||||||||
11,250 (6) | 85,388 (4) | ||||||||||||||||||||||||||||||||||||
16,500 (7) | 125,235 (4) | ||||||||||||||||||||||||||||||||||||
Performance Shares | 6,250 (8) | 47,438 (4) | |||||||||||||||||||||||||||||||||||
15,000 (9) | 113,850 (4) | ||||||||||||||||||||||||||||||||||||
16,500 (10) | 125,235 (4) | ||||||||||||||||||||||||||||||||||||
Laurence Winoker | |||||||||||||||||||||||||||||||||||||
Stock Options | 8,000 (11) | $12.79 | May 6, 2023 | ||||||||||||||||||||||||||||||||||
8,000 (13) | $19.10 | April 29, 2024 | |||||||||||||||||||||||||||||||||||
Restricted Shares | 1,000 (3) | 7,590 (4) | |||||||||||||||||||||||||||||||||||
2,250 (5) | 17,078 (4) | ||||||||||||||||||||||||||||||||||||
4,688 (6) | 35,582 (4) | ||||||||||||||||||||||||||||||||||||
8,000 (7) | 60,720 (4) | ||||||||||||||||||||||||||||||||||||
Performance Shares | 4,500 (8) | 34,155 (4) | |||||||||||||||||||||||||||||||||||
6,250 (9) | 47,438 (4) | ||||||||||||||||||||||||||||||||||||
8,000 (10) | 60,720 (4) |
Notes:
(1) | This option was granted on |
(2) | This option was granted on June 27, 2019 and vested 33% a year in three equal annual installments commencing on the first anniversary of the date of grant. |
(3) | These restricted shares were granted on June 27, 2019 and vest 25% per year in four equal annual installments commencing on the first anniversary of the date of grant. |
(4) | Calculated using a price per share of $7.59, the closing market price of the Company’s common stock as reported by the Nasdaq Stock Market on December 31, 2022, the end of the Company’s last completed fiscal year. |
(5) | These restricted shares were granted on June 25, 2020 and vest 25% per year in four equal annual installments commencing on the first anniversary of the date of grant. |
(6) | These restricted shares were granted on March 9, 2021 and vest 25% per year in four equal annual installments commencing on the first anniversary of the date of grant. |
(7) | These restricted shares were granted on March 8, 2022 and vest 25% per year in four equal annual installments commencing on the first anniversary of the date of grant. |
(8) | These performance shares were granted on June 25, 2020. These awards vest upon the achievement of performance measures based on cumulative performance metrics over a three-year performance period (January 1, 2020 through December 31, 2022), with threshold, target and maximum awards equal to 75%, 100% and 150%, respectively, of the number of performance shares granted.The number of shares reflected assumes the target level of performance achievement which would result in the performance shares vesting at 100% of the target. |
(9) | These performance shares were granted on March 9, 2021. These awards vest upon the achievement of performance measures based on a cumulative performance metrics over a three-year performance period (January 1, 2021 through December 31, 2023), with threshold, target and maximum awards equal to 75%, 100% and 150%, respectively, of the number of performance shares granted.The number of shares reflected assumes the target level of performance achievement which would result in the performance shares vesting at 100% of the target. |
(10) | These performance shares were granted on March 8, 2022. These awards vest upon the achievement of performance measures based on a cumulative performance metrics over a three-year performance period (January 1, 2022 through December 31, 2024), with threshold, target and maximum awards equal to 75%, 100% and 150%, respectively, of the number of performance shares granted.The number of shares reflected assumes the target level of performance achievement which would result in the performance shares vesting at 100% of the target. As of December 31, 2022, the Company determined that achievement of the performance goals for the performance share awards granted in 2022 is likely to be below the threshold level. |
(11) | This option was granted on May 7, |
(12) | This option was granted on March 13, 2014 and vested 33% a year in three equal annual installments on each of December 31, 2014, 2015 and 2016. |
(13) | This option was granted on April 30, 2014 and vested 25% a year in four equal annual installments commencing on the first anniversary of the date of grant. |
This option was granted on |
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE INOF CONTROL
The employment agreements that we have entered into with each of the NEOs require us to make certain payments to these individuals in the event of a termination of their employment outside of or in connection with a change inof control of the Company. We believe that the arrangements with respect to a change inof control termination are appropriate to allow the NEOs to focus on our interests in a change of control situation without distractions relating to their employment. Notwithstanding provisions contained in the respective NEO’s employment agreement, all equity awards are subject to the provisions of the Amended and Restated 2000 Long-Term Incentive Plan, as it may be amended from time to time.
TheOther than with respect to Jeffrey Siegel, whose termination payments are described in a separate table below, the following table shows estimated payments that would have been made to each of our NEOs pursuant to their current employment agreements and outstanding equity award agreements as of December 31, 2022 under various scenarios involving a termination of employment outside of or in connection with a change inof control of the Company, assuming that each individual’s employment was terminated or a change in control of the Company had occurred on December 31, 20152022 and using the closing market price of our common stock as of December 31, 2015:2022:
Upon Termination as a Result of a Disability
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Upon Termination as a Result of a Disability
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Upon Termination as a Result of a Disability
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Payment | Jeffrey Siegel | Ronald Shiftan | Daniel Siegel | Laurence Winoker |
Robert Kay |
Daniel Siegel |
Laurence Winoker | |||||||||||||
Cash severance | $6,601,272 | $3,966,087 | $237,500 | $212,500 | $450,000 | $325,000 | $212,500 | |||||||||||||
Awarded but unpaid bonus | 944,812 | 552,715 | 514,714 | 230,905 | $225,000 | $243,750 | $106,250 | |||||||||||||
Options (intrinsic value) | 17,790 | 11,860 | -- | -- | — | — | — | |||||||||||||
Restricted shares (intrinsic value) | -- | 132,600 | -- | -- | — | — | — | |||||||||||||
Accrued salary | 15,385 | 10,000 | 7,308 | 6,538 | — | — | — | |||||||||||||
Accrued vacation | 38,462 | 25,000 | 18,269 | 16,346 | $207,692 | $25,000 | $16,346 | |||||||||||||
Unreimbursed expenses | — | — | — | |||||||||||||||||
TOTAL | $7,617,721 | $4,698,262 | $777,791 | $466,289 | $882,692 | $593,750 | $335,096 | |||||||||||||
Upon Termination as a Result of a Death
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Payment | Jeffrey Siegel | Ronald Shiftan | Daniel Siegel | Laurence Winoker | ||||||||||||||||
Cash severance | $6,601,272 | $3,966,087 | $-- | $-- | ||||||||||||||||
Awarded but unpaid bonus | 944,812 | 552,715 | 514,714 | 230,905 | ||||||||||||||||
Options (intrinsic value) | 17,790 | 11,860 | -- | -- | ||||||||||||||||
Accrued salary | 15,385 | 10,000 | 7,308 | 6,538 | ||||||||||||||||
Accrued vacation | 38,462 | 25,000 | 18,269 | 16,346 | ||||||||||||||||
TOTAL | $7,617,721 | $4,565,662 | $540,291 | $253,789 | ||||||||||||||||
Upon Termination by the Company for Cause or by the Executive Without Good Reason
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Payment | Jeffrey Siegel | Ronald Shiftan | Daniel Siegel | Laurence Winoker | ||||||||||||||||
Awarded but unpaid bonus | $-- | $-- | $514,714 | $230,905 | ||||||||||||||||
Accrued salary | 15,385 | 10,000 | 7,308 | 6,538 | ||||||||||||||||
Accrued vacation | 38,462 | 25,000 | 18,269 | 16,346 | ||||||||||||||||
TOTAL | $53,847 | $35,000 | $540,291 | $253,789 |
Upon Termination as a Result of a Death
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Payment | Robert Kay | Daniel Siegel | Laurence Winoker | |||||||||
Cash severance | — | — | — | |||||||||
Awarded but unpaid bonus | $225,000 | $243,750 | $106,250 | |||||||||
Options (intrinsic value) | — | — | — | |||||||||
Restricted shares (intrinsic value) | — | — | — | |||||||||
Accrued salary | — | — | — | |||||||||
Accrued vacation | $207,692 | $25,000 | $16,346 | |||||||||
Unreimbursed expenses | — | — | — | |||||||||
TOTAL | $432,692 | $268,750 | $122,596 |
Upon Termination by the Company for Cause or by the Executive without Good Reason
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Payment | Robert Kay | Daniel Siegel | Laurence Winoker | |||||||||
Awarded but unpaid bonus | — | — | $106,250 | |||||||||
Accrued salary | — | — | — | |||||||||
Accrued vacation | $207,692 | $25,000 | $16,346 | |||||||||
Unreimbursed expenses | — | — | — | |||||||||
TOTAL | $207,692 | $25,000 | $122,596 |
Upon Termination as a Result of a Change in Control of the Company Cash severance Awarded but unpaid bonus Options (intrinsic value) Restricted shares (intrinsic value) Health benefits Insurance reimbursement Accrued salary Accrued vacation TOTAL Upon All Other Termination by the Company or by the Executive for Good Reason Cash severance Awarded but unpaid bonus Options (intrinsic value) Restricted shares (intrinsic value) Health benefits Insurance reimbursement Accrued salary Accrued vacation TOTAL Payment Jeffrey Siegel Ronald Shiftan Daniel Siegel Laurence Winoker $6,601,272 $3,966,087 $1,715,032 $1,388,050 944,812 552,715 514,714 230,905 17,790 11,860 9,835 5,930 -- 132,600 110,496 33,150 787 2,361 7,526 5,524 75,000 180,000 -- -- 15,385 10,000 7,308 6,538 38,462 25,000 18,269 16,346 $7,693,508 $4,880,623 $2,383,180 $1,686,443 Payment Jeffrey Siegel Ronald Shiftan Daniel Siegel Laurence Winoker $6,601,272 $3,966,087(1) $1,715,032(2) $1,388,050(3) 944,812 552,715 514,714 230,905 17,790 11,860 9,835 5,930 -- 132,600 110,496 33,150 787 2,361 7,526 5,524 75,000 180,000 -- -- 15,385 10,000 7,308 6,538 38,462 25,000 18,269 16,346 $7,693,508 $4,880,623 $2,383,180 $1,686,443
Upon Termination in Connection with a Change of Control of the Company by the Company without Cause or by
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Payment | Robert Kay | Daniel Siegel | Laurence Winoker | |||||||||
Cash severance | $3,825,000 | $2,762,500 | $1,381,250 | |||||||||
Awarded but unpaid bonus | $225,000 | $243,750 | $106,250 | |||||||||
Options (intrinsic value) | — | — | — | |||||||||
Restricted shares and performance shares (intrinsic value) (1) | $2,710,108 | $532,728 | $263,283 | |||||||||
Health benefits | $6,349 | $11,566 | $8,293 | |||||||||
Unreimbursed expenses | — | — | — | |||||||||
Accrued salary | — | — | — | |||||||||
Accrued vacation | $207,692 | $25,000 | $16,346 | |||||||||
TOTAL | $6,974,149 | $3,575,544 | $1,775,422 |
Upon All Other Termination by the Company or by the Executive for Good Reason
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Payment | Robert Kay (2) | Daniel Siegel (3) | Laurence Winoker (4) | |||||||||
Cash severance | $3,825,000 | $2,762,500 | $1,381,250 | |||||||||
Awarded but unpaid bonus | $225,000 | $243,750 | $106,250 | |||||||||
Options (intrinsic value) | — | — | — | |||||||||
Restricted shares (intrinsic value) | $1,325,199 | $246,204 | $120,970 | |||||||||
Health benefits | $6,349 | $11,566 | $8,293 | |||||||||
Accrued salary | — | — | — | |||||||||
Accrued vacation | $207,692 | $25,000 | $16,346 | |||||||||
TOTAL | $5,589,240 | $3,289,020 | $1,633,109 |
Note:Notes:
(1) | Includes the vesting at target value of performance shares with open performance periods as of December 31, 2022, which would vest in the event of such termination within 24 months following change of control of the Company. |
(2) | $ |
$ |
$425,000 of such cash severance amount would be payable to Mr. Winoker pursuant to his employment agreement if |
Jeffrey Siegel
As described above under Employment Agreements of the NEOs, Jeffrey Siegel’s employment agreement dated aswith the Company terminated on March 31, 2023 upon the expiration of March 12, 2014the term of the J. Siegel Employment Agreement (as extended by the Transition Agreement).
The table below sets forth the amounts that the Company would be required to pay to Mr. Siegel pursuant to the J. Siegel Employment Agreement if his employment had terminated under the circumstances described below.
Payment | Termination by the Company for Cause or by the Executive without Good Reason | Termination by the Company without by the Executive for Good Reason, or on account of Death or Disability | Termination upon Agreement Term(1) | |||||||||
Cash payments | — | $4,050,000 | $1,427,091 (2) | |||||||||
Awarded but unpaid bonus | — | $168,750 | — | |||||||||
Options (intrinsic value) | — | — | — | |||||||||
Restricted shares (intrinsic value) | — | — | — | |||||||||
Health benefits | — | $4,670 | — | |||||||||
Unreimbursed expenses | — | — | — | |||||||||
Accrued salary | — | — | — | |||||||||
Accrued vacation | $103,846 | $103,846 | $103,846 | |||||||||
TOTAL | $103,846 | $4,327,266 | $1,530,937 |
Notes:
(1) | The amounts in this column were paid to Mr. J. Siegel on April 7, 2023, as required by the terms of the J. Siegel Employment Agreement. |
(2) | This amount represents the amount payable to Mr. J. Siegel upon his termination of employment on account of the expiration of the term of the J. Siegel Employment Agreement pursuant to the terms of the J. Siegel Employment Agreement. Such amount is equal to the sum of: (i) 1.0 times the average annual base salary provided to Mr. Siegel under the J. Siegel Employment Agreement for each of 2020, 2021, and 2022 (i.e., $691,667) and (ii) 1.0 times the average of the annual bonuses provided to Mr. Siegel under the J. Siegel Employment Agreement for each of 2020, 2021, and 2022 (i.e., $735,424). |
Robert B. Kay
The Kay Employment Agreement contains the following provisions regarding the termination of Mr. Kay’s employment andoutside of or in connection with a change of control.control of the Company.
Termination for cause; resignation without good reasonCause; Resignation Without Good Reason
If Mr. Siegel’sKay’s employment is terminated by us for causeCause or if Mr. SiegelKay resigns other than for good reason,Good Reason (in each case, as defined by the Kay Employment Agreement), Mr. Siegel shallKay will be entitled to be paid the following amounts (collectively, the “Accrued“Kay Accrued Obligations”):
His base salary accrued up to and including the date of |
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Notwithstanding anything to the contrary in his employment agreement, Mr. Siegel shall be entitled to exercise any then-outstanding stock options granted to Mr. Siegel that shall have vested on or prior to such termination or resignation of employment.his employment;
An amount in lieu of any accrued but unused vacation time;
The amount of any unreimbursed expenses; and
All benefits that are accrued and vested through the date of termination under all employee benefit plans of the Company.
Involuntary TerminationDeath
If Mr. Siegel’sKay’s employment terminates on account of his death, then Mr. Kay’s estate will receive the Kay Accrued Obligations plus any Pro-Rated Performance Bonus accrued through the date of his termination of employment. The “Pro-Rated Performance Bonus” for a particular fiscal year is the amount equal to the Annual Adjusted EBITDA Performance Bonus for the fiscal year that would have been payable to Mr. Kay, if his employment had not terminated during the year, pro-rated for the months during the year up to and including the month of the termination.
Termination Due to Disability
If Mr. Kay’s employment terminates on account of Total Disability (as defined by the Kay Employment Agreement), then in addition to the Kay Accrued Obligations, Mr. Kay will receive, conditioned on his execution and non-revocation of a release of claims against the Company, continued payments of base salary for six months following his termination of employment (except that payment will be made in a lump sum if Mr. Kay’s termination due to Total Disability occurs within two years following a “Change of Control”, as defined by the Kay Employment Agreement) and any Pro-Rated Performance Bonus (as defined above) accrued through the date of his termination.
Termination by the Company without Cause; Resignation by the Executive for Good Reason
If Mr. Kay’s employment is terminated (i) by us for any reason other than cause,without Cause or (ii) by Mr. SiegelKay for good reason, (iii) by us orGood Reason, in each case outside of the context of a Change of Control, then in addition to the Kay Accrued Obligations, Mr. Siegel dueKay will receive, conditioned on his execution and non-revocation of a release of all claims against the Company:
Reimbursement for certain medical and dental expenses set forth in the Kay Employment Agreement for a period of 12 months;
2.0 times Mr. Kay’s base salary as in effect at the date of termination payable over a period of 24 months following the date of termination;
The Pro-Rated Performance Bonus for the fiscal year in which termination occurs, payable at the same time as the performance bonus for such fiscal year would otherwise have been paid;
2.0 times an amount equal to Mr. Siegel’s disability or (iv) by reason112.5% of Mr. Siegel’s death (such a resignation or termination being hereinafter referred to as an “Involuntary Termination”), Mr. Siegel shall be entitled to payment of the Accrued Obligations.
In addition,Kay’s annual base salary in the event of Mr. Siegel’s Involuntary Termination, we shall pay to Mr. Siegel as severance (the “Severance Payments”) the following amounts:
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Anything in his employment agreement to the contrary notwithstanding, no such Severance Payments shall be payable if Mr. Siegel’s employment with us ends at the expiration or non-renewal of the term of his employment under his employment agreement.
In addition, Mr. Siegel shall continue to participate, at our expense, in the Company’s health and medical plans and in any other benefits provided by us to Mr. Siegeleffect at the time of termination (such amount, the “Kay Target Bonus”) payable within 60 days following the termination date; and
Mr. Kay’s then-outstanding stock options will immediately vest and become exercisable in their entirety and all restrictions on his shares of restricted stock will immediately terminate, subject to the terms of the LTIP.
Termination upon Expiration of Term
If Mr. Kay’s employment is terminated by reason of our failure to renew his employment agreement, outside the context of a Change of Control, then in addition to the Kay Accrued Obligations, Mr. Kay will receive, conditioned upon his execution and non-revocation of a release of all claims against the Company:
Reimbursement for certain medical and dental benefits set forth in the Kay Employment Agreement for a period of 12 months;
1.0 times Mr. Kay’s base salary as in effect at the date of termination payable over a period of 12 months following the date of termination;
The Annual Adjusted EBITDA Performance Bonus for the fiscal year in which termination occurs, payable at the same time as the Annual Adjusted EBITDA Performance Bonus for such Involuntary fiscal year would otherwise have been paid; and
Mr. Kay’s then-outstanding stock options will immediately vest and become exercisable in their entirety and all restrictions on his shares of restricted stock will immediately terminate, subject to the terms of the LTIP.
Termination untilby the endCompany without Cause or on account of Non-Renewal, Resignation by the Executive for Good Reason in Connection with Certain Changes of Control
If Mr. Kay’s employment is terminated by Mr. Kay for Good Reason or by us without Cause or by us upon expiration of the term following delivery of a notice of non-renewal, in each case upon or within two years following a Change of Control, then in addition to the Kay Accrued Obligations, Mr. Kay will receive, conditioned upon his execution and non-revocation of a release of all claims against the Company:
Reimbursement for certain medical and dental benefits set forth in the Kay Employment Agreement for a period of 12 months;
2.0 times Mr. Kay’s annual base salary in effect at the effective date of the Change of Control, or if greater, 2.0 times his annual base salary in effect as of his termination of employment payable in a lump sum within 60 days following the date of termination;
The Pro-Rated Performance Bonus for the fiscal year in which termination occurs, payable at the same time as the Annual Adjusted EBITDA Performance Bonus for such fiscal year would otherwise have been paid;
2.0 times the Kay Target Bonus, using the greater of Mr. Kay’s base salary in effect at the time of termination and base salary in effect at the time of the Change of Control, payable in a lump sum within 60 days following the date of termination; and
Mr. Kay’s then-outstanding stock options will vest and become immediately exercisable and all restrictions on his shares of restricted stock will immediately terminate, subject to the terms of the LTIP.
If Mr. Kay’s employment is terminated by Mr. Kay for Good Reason or untilby us without Cause or upon expiration of the term following delivery of a notice of non-renewal, and in each case, within 90 days following such termination, a Change of Control occurs, then Mr. Siegel obtains other employment, whichever occurs first.
In addition,Kay will be entitled to receive a payment equal to the excess of the base salary severance payments that would have been due to him had he been terminated within two years following a Change of Control, less the amount of base salary severance payments already paid to him. Additionally, in the event that such termination is on account of our delivery of a notice of non-renewal,Mr. Siegel’s Involuntary Termination, all of Mr. Siegel’s then-outstanding stock options shall be immediately vested and exercisable.
Involuntary Termination in connection with certain changes in control
If, during the term of his employment we undergo a change in control and either (i) Mr. Siegel’s employment is thereafter terminated under circumstances that would constitute an Involuntary Termination or (ii) Mr. Siegel undergoes an Involuntary Termination and within 90 days of the Involuntary Termination we execute a definitive agreement to enter into a transaction the consummation of which would result in a change in control and such transaction is actually consummated, then Mr. Siegel shallKay will be entitled to all payments, benefitsreceive two times the Kay Target Bonus, and stock-based compensation as outlined underboth amounts are payable within 60 days following the Involuntary Termination section above. We shall make the payments and provide the benefits to be paid and provided under his employment agreement. However, ifChange of Control.
If all or any portion of the payments and benefits would constitute a “parachute payment” within the meaning of Section 280G of the Code (or a similar or successor provision), we shallwill reduce such payments to the extent necessary so that (i) no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code (or a similar or successor provision); and (ii)if by reason of such reduction, the net after-tax benefit to Mr. Siegel shallKay will exceed the net after-tax benefit to him if such reduction were not made.
Jeffrey Siegel
Involuntary Termination due to disability
In the event of Mr. Siegel’s disability, either we or Mr.
The J. Siegel shall be entitled to terminate Mr. Siegel’s employment. In the event that Mr. Siegel elects to terminate his employment due to disability, such termination shall be deemed to be an Involuntary Termination and Mr. Siegel shall be entitled to payment of the Accrued Obligations, the Severance Payments and any disability benefits that are provided under the terms of any pension, medical, disability or life insurance plan applicable to our senior executives, applicable to Mr. Siegel at the time of his disability. In addition, in the event Mr. Siegel’s employment is terminated due to disability, all of Mr. Siegel’s then-outstanding stock options shall be immediately vested and exercisable.
Death
Except in certain circumstances, no further salary or benefits shall be payable under the Employment Agreement contains the following the date of Mr. Siegel’s death. In the event of Mr. Siegel’s death, the Accrued Obligations and the Severance Payments shall be paid to Mr. Siegel’s beneficiary. Mr. Siegel’s beneficiary shall also be entitled to any death benefits that are provided under the terms of any pension, medical, disability or life insurance plan applicable to our senior executives, applicable to Mr. Siegel at the time of death. In addition, in the event of Mr. Siegel’s death, all of Mr. Siegel’s then-outstanding stock options shall be immediately vested and exercisable.
Continuation of life insurance
Notwithstandingprovisions regarding the termination of Mr. Siegel’s employment (other than for causeoutside of or by reason of his death) we shall continue in force and pay the premiums on life insurance on the life of Mr. Siegel that we are required to maintain and pay the premiums on pursuant to the Employment Agreement.
Ronald Shiftan
Ronald Shiftan’s Amended and Restated Employment Agreement dated as of August 10, 2009, as amended as of November 9, 2010, as amended and restated as of December 20, 2012 and as amended and restated as of November 24, 2015 contains the following provisions regarding termination of employment andconnection with a change of control.control of the Company.
Termination for cause; resignationCause; Resignation without good reasonGood Reason
If Mr. Shiftan’sSiegel’s employment ishad been terminated by us for causeCause or if Mr. Shiftan resignsSiegel resigned other than for good reason,Good Reason (as such terms are defined in the J. Siegel Employment Agreement), Mr. Shiftan shall beSiegel would have been entitled to be paid the following amounts (collectively, the “Accrued“J. Siegel Accrued Obligations”):
His base salary accrued up |
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Notwithstanding anything to and including the contrarydate of termination or resignation of his employment;
An amount in his employment agreement, lieu of any accrued but unused vacation time; and
The amount of any unreimbursed expenses.
Mr. Shiftan shall beSiegel would also have been entitled to exercise any then-outstanding stock options granted to Mr. ShiftanSiegel that shall have vested on or prior to such termination or resignation of employment.
Involuntary Termination by the Company without Cause; Resignation by the Executive for Good Reason; Termination due to Disability; Death
IfUnder the J. Siegel Employment Agreement, if Mr. Shiftan’sSiegel’s employment ishad been terminated prior to December 31, 2022 (i) by us for any reason other than cause,Cause, (ii) by Mr. ShiftanSiegel for good reason,Good Reason, (iii) by us or Mr. ShiftanSiegel due to Mr. Shiftan’s disabilitySiegel’s Disability (as defined in the J. Siegel Employment Agreement) or (iv) by reason of Mr. Shiftan’sSiegel’s death (such(collectively, a resignation or termination being hereinafter referred to as an “Involuntary“Siegel Involuntary Termination”), Mr. Shiftan shallSiegel would have been be entitled to payment of the J. Siegel Accrued Obligations.Obligations, and subject to Mr. Siegel’s execution and non-revocation of a release of claims against the Company (except in the case of death), he would have received the following severance payments (the “J. Siegel Severance Payments”):
3.0 times Mr. Siegel’s base salary in effect at the time of termination (or, if such payment had been made in connection with a Change of Control, as defined by the J. Siegel Employment Agreement, the greater of base salary in effect at the time of termination or the base salary amount as specified under the J. Siegel Employment Agreement);
3.0 times Mr. Siegel’s target bonus (which is equal to 100% of his base salary in effect for the year in which the termination occurs); and
An amount equal to the Annual Adjusted EBITDA Performance Bonus for the fiscal year in which termination occurs that would have been payable to Mr. Siegel if his employment had not terminated during the year; provided that, if such Involuntary Termination occurred on or prior to June 30 of a fiscal year, such amount would have been pro-rated for the months during the year up to and including the month of termination.
The payments described above would have been made in a lump sum within 60 days of termination, except for the payment in respect of Mr. Siegel’s Annual Adjusted EBITDA Performance Bonus, which would have been paid in the calendar year following termination. In addition, in the event of Mr. Shiftan’s Involuntary Termination, we shall pay to Mr. Shiftan as severance (the “Severance Payments”) the following amounts:
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Anything in his employment agreement to the contrary notwithstanding, no such Severance Payments shall be payable ifextent permitted by the applicable plans, Mr. Shiftan’s employment with us ends at the expiration or non-renewal of the term of his employment under his employment agreement.
In addition, Mr. Shiftan shall continueSiegel would have continued to participate, at our expense, in our health and medical plans and in any other benefits provided by us to Mr. ShiftanSiegel at the time of such Involuntary Termination until December 31, 2022 or until Mr. Siegel obtained other employment, whichever occurred first. All of Mr. Siegel’s then outstanding stock options would have been immediately vested and exercisable and the endrestrictions on his restricted stock would have immediately terminated, to the extent permitted under the LTIP.
Solely in the event Mr. Siegel’s employment had been terminated on account of his death or Disability, then in addition to the payments and benefits described above, he would also be eligible to receive any death or disability benefits (as applicable) that are provided under the terms of any pension, medical, disability and life insurance plan to which Mr. Siegel is entitled.
Termination upon Expiration of Term
In accordance with the terms of the J. Siegel Employment Agreement (as extended by the Transition Agreement), Mr. Siegel’s employment terminated on March 31, 2023, on account of the expiration of the term of the J. Siegel Employment Agreement. Under the terms of the J. Siegel Employment Agreement, Mr. Siegel became entitled to payment of the J. Siegel Accrued Obligations. In addition, and subject to Mr. Siegel’s execution and non-revocation of a release of claims against the Company, Mr. Siegel became entitled to the following payments and benefits pursuant to the J. Siegel Employment Agreement:
1.0 times the average base salary provided to Mr. Siegel under the J. Siegel Employment Agreement for each of 2020, 2021, and 2022 (i.e., $691,667); and
1.0 times the average of the annual bonuses provided to Mr. Siegel under the J. Siegel Employment Agreement for each of 2020, 2021 and 2022 (i.e., $735,424).
Both payments were paid in a lump sum on April 7, 2023. In addition, any unvested stock options would have become vested and any restrictions on outstanding restricted stock would have terminated; however, Mr. Siegel did not have any outstanding unvested stock options or restricted stock at the time of his termination of employment.
In connection with Mr. Siegel’s appointment as Chairman of the Board, the Compensation Committee extended the exercise period under Mr. Siegel’s outstanding vested stock options so that they remain exercisable until 90 days following termination of Mr. Siegel’s service on the Board (12 months in the event such termination is on account of Mr. Siegel’s death or disability), or if earlier, the otherwise applicable fixed expiration date.
Continuation of Life Insurance
Upon termination of Mr. Siegel’s employment for any reason other than by reason of his death, Mr. Siegel had the right to assume the life insurance policies in his name owned by the Company.
Section 280G
If Mr. Siegel had received the J. Siegel Severance Payments in connection with a Change of Control and all or any portion of the payments and benefits would have constituted a “parachute payment” within the meaning of Section 280G of the Code (or a similar or successor provision), we would have reduced such payments if by reason of such reduction, the net after-tax benefit to Mr. Siegel would have exceeded the net after-tax benefit to him if such reduction were not made.
Daniel Siegel
The D. Siegel Employment Agreement contains the following terms regarding the termination of Mr. Siegel’s employment and a change of control of the Company.
Termination for Cause; Resignation without Good Reason
If Mr. Siegel’s employment is terminated by us for Cause or by Mr. Siegel without Good Reason (in each case, as defined by the D. Siegel Employment Agreement), Mr. Siegel will be entitled to be paid the following amounts (collectively, “D. Siegel Accrued Obligations”):
His base salary for the period accrued up to and including the date of termination of his employment;
An amount in lieu of any accrued but unused vacation time;
The amount of any unreimbursed expenses; and
All benefits that are accrued and vested through the date of termination under all employee benefit plans of the Company.
Death
If Mr. Siegel’s employment terminates on account of his death, then Mr. Siegel’s estate will receive the D. Siegel Accrued Obligations plus any Pro-Rated Performance Bonus accrued through the date of his termination of employment. The “Pro-Rated Performance Bonus” for a particular fiscal year is the amount equal to the Annual Adjusted EBITDA Performance Bonus for the fiscal year that would have been payable to Mr. Siegel, if his employment had not terminated during the year, pro-rated for the months during the year up to and including the month of the termination.
Termination Due to Disability
If Mr. Siegel’s employment terminates on account of Total Disability (as defined by the D. Siegel Employment Agreement), then in addition to the D. Siegel Accrued Obligations, Mr. Siegel will receive, conditioned upon his execution and non-revocation of an effective release of all claims against the Company, continued payments of base salary for six months following his termination of employment (except that payment will be made in a lump sum if Mr. Siegel’s termination due to Total Disability occurs within two years following a Change of Control, as defined by the D. Siegel Employment Agreement) and any Pro-Rated Performance Bonus accrued through the date of his termination.
Termination by the Company without Cause; Resignation by the Executive for Good Reason
If (i) Mr. Siegel’s employment is terminated by us without Cause, or (ii) Mr. Siegel’s employment is terminated by Mr. Siegel for Good Reason, in each case outside of the context of a Change of Control, then in addition to the D. Siegel Accrued Obligations, Mr. Siegel will receive, conditioned upon his execution and non-revocation of a release of all claims against the Company:
Certain medical and dental benefits set forth in the D. Siegel Employment Agreement for a period of 12 months;
2.0 times Mr. Siegel’s base salary as in effect at the date of termination payable over a period of 24 months following the date of termination;
The Pro-Rated Performance Bonus for the fiscal year in which the termination occurs, payable at the same time as the Performance Bonus for such fiscal year would otherwise have been paid;
2.0 times an amount equal to 112.5% of Mr. Siegel’s annual base salary in effect at the time of termination (such amount, the “D. Siegel Target Bonus”) payable within 60 days following termination; and
Mr. Siegel’s then-outstanding stock options will immediately vest and become exercisable in their entirety and all restrictions on his shares of restricted stock will immediately terminate, subject to the terms of the LTIP.
Termination upon Expiration of Term
If Mr. Siegel’s employment is terminated by reason of our failure to renew the term of his employment or untilunder his employment agreement, then in addition to the D. Siegel Accrued Obligations, Mr. Shiftan obtains other employment, whichever occurs first. Furthermore,Siegel will be entitled to receive, conditioned on his execution and non-revocation of a release of all claims against the Company:
Certain medical and dental benefits set forth in the eventD. Siegel Employment Agreement for a period of 12 months;
1.0 times Mr. Shiftan’s Involuntary Termination, allSiegel’s base salary as in effect at the date of termination payable over a period of 12 months following the date of termination;
The Annual Adjusted EBITDA Performance Bonus for the fiscal year in which termination occurs; and
Mr. Shiftan’sSiegel’s then-outstanding stock options shallwill immediately vest and become exercisable in their entirety and all restrictions on his shares of restricted stock will immediately terminate, subject to the terms of the LTIP.
Termination by the Company without Cause or on Account of Non-Renewal in Connection with Certain Changes of Control, Resignation by the Executive for Good Reason in Connection with Certain Changes of Control
If Mr. Siegel’s employment is terminated by Mr. Siegel for Good Reason or by us without Cause or upon expiration of the term following our delivery of a notice of non-renewal, in each case upon or within two years following a Change of Control, then in addition to the D. Siegel Accrued Obligations, Mr. Siegel will be entitled to receive, conditioned on his execution and non-revocation of a release of all claims against the Company:
Certain medical and dental benefits set forth in his employment agreement for a period of 12 months;
2.0 times his annual base salary in effect at the effective date of the Change of Control, or if greater, 2.0 times his annual base salary in effect as of his termination of employment, payable in a lump sum within 60 days following termination;
The Pro-Rated Performance Bonus for the fiscal year in which termination occurs, payable at the same time as the Annual Adjusted EBITDA Performance Bonus for such fiscal year would otherwise have been paid;
2.0 times the D. Siegel Target Bonus, using the greater of Mr. Siegel’s base salary in effect at the time of termination and base salary in effect at the time of the Change of Control, payable in a lump sum within 60 days following termination; and
All of Mr. Siegel’s then-outstanding stock options will vest and become immediately vested and exercisable and all restrictions on Mr. Shiftan’shis shares of restricted shares shallstock granted will immediately terminate.terminate, subject to the terms of the LTIP.
Involuntary Termination in connection with certain changes in control
If duringMr. Siegel’s employment is terminated by Mr. Siegel for Good Reason or by us without Cause or upon expiration of the term following our delivery of his employment we undergo a changenotice of non-renewal, and in control and either (i) Mr. Shiftan’s employment is thereafter terminated under circumstances that would constitute an Involuntary Termination or (ii) Mr. Shiftan undergoes an Involuntary Termination andeach case, within 90 days following such termination, a Change of the Involuntary Termination we execute a definitive agreement to enter into a transaction the consummation of which would result in a change in control and such transaction is actually consummated,Control occurs, then Mr. Shiftan shallSiegel will be entitled to allreceive a payment equal to the excess of the base salary severance payments benefits and stock-based compensation as outlined underthat would have been due to him had he been terminated within two years following a Change of Control, less the Involuntary Termination section above. We shall makeamount of base salary severance payments already paid to him. Additionally, in the payments and provideevent that such termination is on account of our delivery of a notice of non-renewal, Mr. Siegel will be entitled to receive two times the benefits to be paid and provided under his employment agreement. However, ifD. Siegel Target Bonus, payable within 60 days following the Change of Control.
If all or any portion of the payments and benefits would constitute a “parachute payment” within the meaning of Section 280G of the Code (or a similar or successor provision), we shallwill reduce such payments to the extent necessary so that (i) no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code (or a similar or successor provision) and (ii)if by reason of such reduction, the net after-tax benefit to Mr. Shiftan shallSiegel will exceed the net after-tax benefit to him if such reduction were not made.
Involuntary Termination due to disability
In the event of Mr. Shiftan’s disability, either we or Mr. Shiftan shall be entitled to terminate Mr. Shiftan’s employment. In the event that Mr. Shiftan elects to terminate his employment due to disability, such termination shall be deemed to be an Involuntary Termination and Mr. Shiftan shall be entitled to payment of the Accrued Obligations, the Severance Payments and any disability benefits that are provided under the terms of any pension, medical, disability or life insurance plan applicable to our senior executives, applicable to Mr. Shiftan at the time of his disability. In addition, in the event Mr. Shiftan’s employment is terminated due to disability, all of Mr. Shiftan’s then-outstanding stock options shall be immediately vested and exercisable and all restrictions on Mr. Shiftan’s restricted shares shall immediately terminate.
Death
Except in certain circumstances, no further salary or benefits shall be payable under Mr. Shiftan’s employment agreement following the date of Mr. Shiftan’s death. In the event of Mr. Shiftan’s death, the Accrued Obligations and the Severance Payments shall be paid to Mr. Shiftan’s beneficiary. Mr. Shiftan’s beneficiary shall also be entitled to any death benefits that are provided under the terms of any pension, medical, disability or life insurance plan applicable to our senior executives, generally applicable to Mr. Shiftan at the time of death. In addition, in the event of Mr. Shiftan’s death, all of Mr. Shiftan’s then-outstanding stock options shall be immediately vested and exercisable.
Termination upon expiration of term
If Mr. Shiftan’s employment is terminated by reason of the expiration of the term of his employment thereunder (the “Term”), Mr. Shiftan is entitled to payment of the Accrued Obligations. In addition, in such event, we shall pay Mr. Shiftan as severance an amount equal to:
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Daniel SiegelLaurence Winoker
Daniel Siegel’s
The Winoker Employment Agreement dated as of November 28, 2014 and amended as of April 27, 2015, contains the following terms regarding the termination of his employment and a change of control.
General
Without limiting the generalitycontrol of the termination provisions contained inCompany.
Termination for Cause; Resignation Without Good Reason
If Mr. Siegel’s employment agreement, as amended, if Mr. Siegel’sWinoker’s employment is terminated duringby us for Cause or by Mr. Winoker without Good Reason (in each case, as defined by the term of his employment agreement for any reason, we shall payWinoker Employment Agreement), Mr. SiegelWinoker will be entitled to the following amounts (collectively, “Accruedthe “Winoker Accrued Obligations”):
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His base salary accrued up to and including the date of termination of his employment;
An amount in lieu of any accrued but unused vacation time;
Any accrued but unpaid bonus;
The amount of any unreimbursed expenses; and
Any vested rights that Mr. Winoker may have pursuant to any insurance or other death benefit, bonus, retirement, or stock award plans or arrangements of the Company or any other employee benefit program.
Termination due to deathDeath
If Mr. Siegel’sWinoker’s employment is terminated by reason of Mr. Siegel’sWinoker’s death, then Mr. Siegel’sWinoker’s estate shallwill receive payment of the amounts provided asWinoker Accrued Obligations.
Termination due to permanent disability
In the event that hisaddition, if Mr. Winoker’s employment is terminated dueprior to total disability,December 1 of any year, Mr. Winoker’s estate will receive any Pro-Rated Adjusted EBITDA Performance Bonus accrued through the date of termination of employment. The “Pro-Rated Adjusted EBITDA Performance Bonus” for a particular fiscal year is the amount equal to the Adjusted EBITDA Performance Bonus for the fiscal year that would have been payable to Mr. Winoker by the Company, as determined by the Board, if Mr. Winoker’s employment had not terminated during the year, pro-rated for the months during the year up to and including the month of the termination.
Termination Due to Disability
If Mr. Winoker’s employment is terminated on account of Total Disability (as defined by the Winoker Employment Agreement), then in addition to the Winoker Accrued Obligations, Mr. Siegel shallWinoker will receive, an amount equal toconditioned on his execution and non-revocation of a release of all claims against the Company, continued payments of his base salary for a period of six months fromfollowing the date of termination, and if such termination occurs prior to December 1, the Pro-Rated Adjusted EBITDA Performance Bonus for the year of termination.
Termination by Mr. Siegel voluntarily;
terminationthe Company without Cause, Resignation by the CompanyExecutive for causeGood Reason
Upon any termination ofIf (i) Mr. Siegel’sWinoker’s employment either (i) voluntarilyis terminated by us without Cause, or (ii) Mr. Winoker’s employment is terminated by Mr. Siegel (except if he is voluntarily terminatingWinoker for Good Reason, in each case outside of the context of a Change of Control (as defined by the Winoker Amended and Restated Employment Agreement), then in addition to the Accrued Obligations, Mr. Winoker will be entitled to receive, conditioned on his employment due toexecution and non-revocation of a changerelease of control orall claims against the Company:
Certain medical and dental benefits set forth in Winoker Amended and Restated Employment Agreement for good reason) or (ii) by us for cause, all payments,a period of 12 months;
2.0 times Mr. Winoker’s base salary and other benefits thereunder shall ceaseas in effect at the date of termination withpayable over a period of 24 months from the exceptiondate of termination;
The Pro-Rated Annual Bonus for the fiscal year in which termination occurs, payable at the same time as the Performance Bonus for such fiscal year would otherwise have been paid. The “Pro-Rated Annual Bonus” for a particular fiscal year is the amount equal to the annual bonus for the fiscal year that would have been payable to Mr. Winoker by the Company, as determined by the Board, if Mr. Winoker’s employment had not terminated during the year, pro-rated for the months during the year preceding the termination; and
2.0 times an amount equal to 62.5% of Mr. Winoker’s annual base salary in effect at the time of termination (such amount, the “Winoker Target Bonus”), payable within 60 days following termination.
Mr. Winoker’s then-outstanding stock options will immediately vest and become exercisable in their entirety and all restrictions on his shares of restricted stock will immediately terminate, subject to the terms of the LTIP.
Termination Upon Expiration of Term
If Mr. Winoker’s employment is terminated by reason of our failure to renew the Winoker Amended and Restated Employment Agreement, outside the context of a Change of Control, then in addition to the Accrued Obligations.Obligations, Mr. Winoker will receive, conditioned on his execution and non-revocation of a release of all claims against the Company:
Reimbursement for certain medical and dental benefits set forth in the Winoker Amended and Restated Employment Agreement for a period of 12 months;
An amount equal to Mr. Winoker’s base salary as in effect upon termination, payable over a period of 12 months from the date of termination; and
The annual bonus for the fiscal year in which the effective date of the termination occurs, payable at the same time as the annual bonus for such fiscal year would otherwise have been paid.
Mr. Winoker’s then-outstanding stock options will immediately vest and become exercisable and all restrictions on shares of restricted stock granted by us to Mr. Winoker will immediately terminate, subject to the terms of the LTIP.
Termination by the Company without cause;Cause or on Account of Non-Renewal, Resignation by the Executive for Good Reason in Connection with Certain Changes of Control
If, during the term of Mr. Winoker’s employment, Mr. Winoker is terminated by the Company without Cause, Mr. Winoker voluntarily terminates his employment for Good Reason, or Mr. Winoker’s employment terminates upon expiration of the term following a notice of non-renewal provided by us, in each case upon or within two years following a Change of Control, then in addition to the Winoker Accrued Obligations, Mr. Winoker will be entitled to receive, conditioned upon his execution and non-revocation of a release of all claims against the Company:
Reimbursement for certain medical and dental benefits set forth in the Winoker Amended and Restated Employment Agreement for a period of 12 months.
A cash payment equal to 200% of Mr. Winoker’s base salary in effect at the effective date of the Change of Control or if greater, 200% of Mr. Winoker’s base salary in effect at the effective date of termination, bypayable in a lump sum within 60 days following termination;
The Pro-Rated Performance Bonus for the fiscal year in which termination occurs, payable at the same time as the annual bonus for such fiscal year would otherwise have been paid; and
2.0 times the Winoker Target Bonus, using the greater of Mr. Siegel for good reason;Winoker’s annual base salary in effect at the time of termination and annual base salary in effect at the time of the Change of Control, payable in a lump sum within 60 days following termination.
All of Mr. Winoker’s then-outstanding stock options will vest and become immediately exercisable and all restrictions on his shares of restricted stock will immediately terminate, subject to the terms of the LTIP.
election not to offer new employment
In the event that (i) his employment is terminated by us without cause, or (ii) his employment agreement is terminated by Mr. Siegel for good reason or (iii) we choose not to offer further employment to Mr. Siegel beyond the initial term or any renewal term, if applicable, on terms and conditions that are, in the aggregate, no less favorable to Mr. Siegel than the terms and conditions of his employment agreement, and a change of control has not occurred, then the following conditions shall apply.
If Mr. Siegel’s employment is terminated by us without cause, then Mr. Siegel shall be entitled to receive:
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If Mr. Siegel’sWinoker’s employment is terminated by Mr. SiegelWinoker for good reason,Good Reason or by us without Cause or upon expiration of the term following delivery of a notice of non-renewal provided by us, and in each case, within 90 days of the termination, we execute a definitive agreement to enter into a transaction the consummation of which would result in a Change of Control and such transaction is actually consummated, then Mr. Siegel shallWinoker will be entitled to receive:
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If we do not offer employmentreceive a payment equal to Mr. Siegel beyond the initial term or any renewal term, as applicable, on terms and conditionsexcess of the base salary severance payments that are,would have been due to him had he been terminated within two years following a Change of Control, less the amount of base salary severance payments already paid to him. Additionally, in the aggregate, no less favorable toevent that such termination is on account of our delivery of a notice of non-renewal, Mr. Siegel than the terms and conditions of his employment agreement, as amended, then, subject to the provisions of his employment agreement, as amended, upon the normal expiration of the initial term or any renewal term of his employment, as applicable, Mr. Siegel shallWinoker will be entitled to receive:receive two times the Winoker Target Bonus within 60 days following the date of the Change of Control.
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Termination by Mr. Siegel or the Company
due to a change of control
In the event that his employment is terminated by Mr. Siegel or us due to a change of control, Mr. Siegel shall be entitled to receive:
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If however, all or any portion of the payments and benefits would constitute a “parachute payment” within the meaning of Section 280G of the Code (or a similar or successor provision), we shallwill reduce such payments to the extent necessary so that (i) no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code (or a similar or successor provision) and (ii)if by reason of such reduction, the net after-tax benefit to Mr. Siegel shallWinoker will exceed the net after-tax benefit to him if such reduction were not made.
Pay Ratio
Laurence WinokerAs required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act Item 402(u) of Regulation S-K, the Company is providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Robert Kay, our Chief Executive Officer (our “CEO”) in fiscal 2022:
Laurence Winoker’s Employment Agreement datedThe median of annual compensation of all employees excluding the CEO – $38,070
The annual total compensation of the CEO in 2022 – $3,581,605
The ratio of the CEO’s annual total compensation to the median employee’s compensation – 94.08:1
In order to determine the median employee from a compensation perspective, the Company collected cash compensation (salary and cash bonuses) paid in 2022 for all employees worldwide that were compensated during 2022, as of June 28, 2007, as amended asDecember 31, 2022 (the “determination date”). For those employees compensated in foreign currencies, exchange rates at year-end were used to convert their compensation into U.S. dollars. To determine the ratio disclosed above, the Company calculated the median employee’s compensation for fiscal 2022 in accordance with the rules applicable to the compensation elements included in the Summary Compensation Table and compared such compensation to the compensation of March 8,our CEO, Mr. Robert Kay set forth in the Summary Compensation Table.
In making this pay ratio disclosure, other companies may use assumptions, estimates, and methodologies different than ours. As a result, the foregoing information may not be directly comparable to the information provided by other companies in our peer group or otherwise. We believe the pay ratio included above is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
Pay Versus Performance
In accordance with rules adopted by the Securities and Exchange Commission (“SEC”) pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended as of April 12, 2012 and as amended and restated as of September 10, 2015, containswe provide the following termsdisclosure regarding terminationexecutive “compensation actually paid” (“CAP”, as calculated in accordance with the SEC rules) and change of control.certain Company performance measures for the fiscal years listed below. For information regarding the Company’s pay-for-performance philosophy and how the Company aligns executive pay with performance, refer to our Compensation Discussion & Analysis (“CD&A”).
General
Without limiting the generality of the termination provisions contained in Mr. Winoker’s employment agreement, as amended and restated, if Mr. Winoker’s employment is terminated during the term of his employment agreement for any reason, we shall pay Mr. Winoker the following amounts (collectively, “Accrued Obligations”):
Robert Kay (1) | Non-CEO NEOs (2) | |||||||||||||||||||||||||||
Summary Compensation Table Total | Compensation (3)(4) | Average Summary Compensation Table Total | Average (3)(4) | Year-end value of initial fixed $100 investment on December 31, 2020 based on total shareholder return | Net Income (in millions) | |||||||||||||||||||||||
Year | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
2022 | 3,581,605 | (361,402) | 975,834 | 514,930 | 51.24 | (6.2) | ||||||||||||||||||||||
2021 | 4,559,720 | 5,123,891 | 1,638,341 | 1,723,854 | 106.23 | 20.8 |
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Termination due to death
If Mr. Winoker’s employment is terminated by reason of Mr. Winoker’s death, then Mr. Winoker’s estate shall receive payment for amounts provided as Accrued Obligations.
Termination due to permanent disability
In the event that his employment is terminated due to total disability, in addition to the Accrued Obligations, Mr. Winoker shall receive an amount equal to his base salary for a period of six months from the date of termination.
Termination by Mr. Winoker voluntarily;
termination by the Company for cause
Upon any termination of Mr. Winoker’s employment agreement either (i) voluntarily by Mr. Winoker (except if he is voluntarily terminating his employment due to a change of control or for good reason) or (ii) by us for cause, all payments, salary and other benefits thereunder shall cease at the date of termination, with the exception of Accrued Obligations.
Termination by the Company without cause;
termination by Mr. Winoker for good reason;
election not to offer new employment
In the event that (i) Mr. Winoker’s employment is terminated by us without cause, or (ii) Mr. Winoker’s employment is terminated by Mr. Winoker for good reason or (iii) we choose not to offer further employment to Mr. Winoker beyond the initial term or any renewal term, if applicable, on terms and conditions that are, in the aggregate, no less favorable to Mr. Winoker than the terms and conditions of his amended and restated employment agreement, and a change of control has not occurred, then the following conditions shall apply;
If Mr. Winoker’s employment is terminated by us without cause, then Mr. Winoker shall be entitled to receive:
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(3) | To calculate the |
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2022 | 2021 | |||||||||||||||||||||||
Robert Kay | Average Non- CEO NEOs | Robert Kay | Average Non- CEO NEOs | |||||||||||||||||||||
Total Compensation from Summary Compensation Table | $ | 3,581,605 | $ | 975,834 | $ | 4,559,720 | $ | 1,638,341 | ||||||||||||||||
Adjustments for Equity Awards | ||||||||||||||||||||||||
Adjustment for grant date values in the Summary Compensation Table | $ | (2,401,430) | $ | (199,103) | $ | (2,097,633) | $ | (200,883) | ||||||||||||||||
Year-end fair value of unvested awards granted in the current year | $ | 760,174 | $ | 63,026 | $ | 2,622,542 | $ | 251,152 | ||||||||||||||||
Year-over-year difference of year-end fair values for unvested awards granted in prior years | $ | (1,663,103) | $ | (201,540) | $ | 289,154 | $ | 36,035 | ||||||||||||||||
Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | $ | (638,648) | $ | (123,287) | $ | (249,892) | $ | (791) | ||||||||||||||||
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Total Adjustments for Equity Awards | $ | (3,943,007) | $ | (460,904) | $ | 564,171 | $ | 85,513 | ||||||||||||||||
Compensation Actually Paid (as calculated)* | $ | (361,402) | $ | 514,930 | $ | 5,123,891 | $ | 1,723,854 | ||||||||||||||||
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If Mr. Winoker’s employment is terminated by Mr. Winoker*No adjustments were made for good reason, then Mr. Winoker shall be entitled to receive:pension or dividends not otherwise included in total compensation.
(4) | The |
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If we do not offer employment to Mr. Winoker beyond the initial term or any renewal term, as applicable, on terms and conditions that are, in the aggregate, no less favorable to Mr. Winoker than the terms and conditions of his amended and restated employment agreement, then, subject to the provisions of his amended and restated employment agreement, upon the normal expiration
Pay Versus Performance: Graphical Description
The illustrations below provide graphical descriptions of the initial term or any renewal term of his employment, as applicable, Mr. Winoker shall be entitled to receive:relationships between the following:
The NEO’s CAP and the Company’s cumulative total shareholder return (“TSR”); and
The NEO’s CAP and the Company’s net income.
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Termination by Mr. Winoker or the Company
due to a change of control
In the event that Mr. Winoker’s employment is terminated by Mr. Winoker or us due to a change of control, Mr. Winoker shall be entitled to receive:
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If, however, all or any portion of the payments and benefits would constitute a “parachute payment” within the meaning of Section 280G of the Code (or a similar or successor provision), we shall reduce such payments to the extent necessary so that (i) no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code (or a similar or successor provision) and (ii) by reason of such reduction, the net after-tax benefit to Mr. Winoker shall exceed the net after-tax benefit if such reduction were not made.
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 20162023
Our Audit Committee appointed the firm of Ernst & Young LLP (“Ernst & Young”) as the independent registered public accounting firm to audit our financial statements for the fiscal year endedending December 31, 2016.2023. Ernst & Young has audited our financial statements since 1984.
Our Audit Committee has adopted a policy that requires advance approval of all audit, audit-related and tax services and other services performed by the independent auditor. The policy provides for pre-approval by our Audit Committee of specifically defined audit and non-audit services. Unless the specific service has been previously pre-approved with respect to that year, our Audit Committee must approve the permitted service before the independent auditor is engaged to perform it. Our Audit Committee has delegated to the Chair of the Audit Committee authority to approve permitted services costing up to $50,000 provided that the Chair reports any decisions to the Audit Committee at its next scheduled meeting.
The following table sets forth fees paid or payable to Ernst & Young for services provided in each of the years ended December 31, 20152022 and 2014:2021:
2015
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Audit fees | $1,652,000 | $1,609,000 | $ | 1,722,900 | $ | 1,706,950 | ||||||
Audit-related fees | 13,000 | 145,000 | 177,328 | 37,904 | ||||||||
Tax fees | 391,000 | 461,500 | 340,130 | 263,796 | ||||||||
All other fees | 2,000 | 2,000 | — | 3,000 | ||||||||
TOTAL | $2,058,000 | $2,217,500 | $ | 2,240,358 | $ | 2,011,650 |
Audit fees
Audit fees are fees paid to Ernst & Young for the annual audit of our financial statements, the quarterly reviews of our financial statements included in our Forms Quarterly Reports on Form 10-Q, fees related to our annual audit of internal controls over financial reporting, statutory audit fees and fees for regulatory filings.
Audit-related fees
Audit related fees are fees paid to Ernst & Young for assurance and related services that are related to the performance of the audit or review of the financial statements but not reported as audit fees as well as other audit and due diligence procedures in connection with acquisitions or dispositions.
Tax fees
Tax fees are billed for services rendered for tax compliance including the preparation of tax returns and tax advisory services.
All other fees
All other fees consist of fees paid to Ernst & Young for access to Ernst & Young’s online accounting research tool.
In making its appointment of Ernst & Young to audit our financial statements for the fiscal year ending December 31, 2016,2023, our Audit Committee reviewed past audit, audit related and other non-audit services performed during 2015.2022. In selecting Ernst & Young, our Audit Committee carefully considered their independence. Our Audit Committee has determined that the performance of such non-audit services did not impair the independence of Ernst & Young.
Ernst & Young has confirmed to our Audit Committee that it is in compliance with all rules, standards and policies of the Public Company Accounting Oversight Board and the SEC governing auditor independence.
Although stockholder approval is not required for the appointment of an independent accounting firm, the Audit Committee and the Board believe that soliciting the Company’s stockholders’ input is a matter of good corporate practice. If the stockholders do notfail to ratify this appointment, ourthe selection, it will be considered as a directive to the Audit Committee will reconsiderto consider the appointment.appointment of another independent accounting firm for the following year, but the Audit Committee is not required to do so. Even if stockholders ratify the appointment of Ernst & Young, the Audit Committee retains the right to appoint a different independent registered public accounting firm for fiscal 2023 if it determines that it would be in the Company’s and its stockholders’ best interests.
Representatives of Ernst & Young are expected to be presentavailable to respond to appropriate questions of stockholders at the Annual Meeting of stockholders and will have the opportunity to make a statement at the Annual Meeting if they desire and to respond to appropriate questions of stockholders.desire.
Our Board and Audit Committee unanimously recommend that stockholders vote FOR
the ratification of the appointment of Ernst & Young.
The Audit Committee of our Board of Directors (the “Audit Committee”) reviewed and discussed the consolidated financial statements of the Company and our subsidiaries that are set forth in our 20152022 Annual Report to Stockholders and in Item 8 of our 2022 Annual Report on Form 10-K for the year ended December 31, 2015 with our management and with Ernst & Young LLP, our independent registered public accounting firm.
Our Audit Committee discussed with Ernst & Young LLP the matters required to be discussed by Statement on Auditing StandardsStandard No. 61, Communication1301, Communications with Audit Committees, as amended, which includes, among other items, matters relating to the conduct of an audit of our financial statements and the adequacy of internal controls.
Our Audit Committee received the written disclosures and the letter from Ernst & Young LLP required by Rule 3256 of the Public Company Accounting Oversight Board, Communications Concerning Independence, and discussed with Ernst & Young LLP that firm’s independence from the Company. The Committee concluded that the provision by Ernst & Young LLP of non-audit services, including tax preparation services, to the Company is compatible with its independence.
Based on the review and discussions with our management and with Ernst & Young LLP, referred to above, our Audit Committee recommended to ourthe Board that we publishand the consolidatedBoard has approved the inclusion of the audited financial statements in the Company’s 2022 Annual Report.
This report is not soliciting material, is not deemed to be filed with the SEC, and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and our subsidiaries for the year ended December 31, 2015irrespective of any general incorporation language in our Annual Report on Form 10-K for the year ended December 31, 2015.any such filing.
April 21, 2016The Audit Committee
LIMITATION ON DIRECTORS AND OFFICERS LIABILITYJohn Koegel
Our Second Restated Certificate of Incorporation contains a provision which eliminates the personal liability of a director for monetary damages other than for breaches of the director’s duty of loyalty to us or our stockholders, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law or violations under Section 174 of the Delaware General Corporation Law or for any transaction from which the director derived an improper personal benefit.
We have entered into indemnification agreements with each of our officers and directors which provide that we will indemnify the indemnitee against expenses, including reasonable attorney’s fees, judgments, penalties, fines and amounts paid in settlement, actually and reasonably incurred by him or her in connection with any civil or criminal action or administrative proceeding arising out of the performance of his or her duties as our director, officer, employee or agent. Such indemnification is available if the acts of the indemnitee were in good faith, if the indemnitee acted in a manner he or she reasonably believed to be in or not opposed to our best interests and, with respect to any criminal proceeding, the indemnitee had no reasonable cause to believe his or her conduct was unlawful.
We maintain directors and officers liability insurance policies. The policies insure our directors and officers against loss arising from certain claims made against such directors or officers by reason of certain wrongful acts.Craig Phillips
CERTAIN RELATIONSHIPS
Certain relatives of Jeffrey Siegel, theour Chairman of ourthe Board, and our Chief Executive Officer, are employed by us, as follows:
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Clifford Siegel, a son of Jeffrey Siegel, is employed by us as our Executive Vice-President – Global Supply Chain. His compensation in 2022 included earned cash compensation of $511,250, a grant of 5,000 restricted shares of our common stock, and a grant of 5,000 performance share awards.
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James Wells, a son-in-law of Jeffrey Siegel, is employed by us as our Executive Vice-President and Group President of the Kitchenware Division. His compensation in 2022 included earned cash compensation of $499,600, a grant of 3,000 restricted shares of our common stock, and a grant of 3,000 performance share awards.
As previously described, Jeffrey Siegel is also the father of Daniel Siegel, who is aan NEO, and a cousin of Craig Phillips, who is a director. Other than these employment relationships, there were no transactions with related persons requiring disclosure pursuant to Item 404 of Regulation S-K.
RELATED-PARTY TRANSACTIONS
Our policies and procedures regarding transactions with related persons are set forth in writing in our Code of Ethics, as supplemented by the Code of Conduct, which requiresand require that our Audit Committee must review and approve any “related party” transaction, as defined in Item 404(a) of Regulation S-K, before it is consummated. The Audit Committee of our Board is responsible for reviewing such policies and procedures pursuant to its charter, which states that the Audit Committee will “review and approve all related-party transactions submitted byrequired to be disclosed according to SEC Regulation S-K, Item 404, and discuss with management after management’s evaluation of the terms of such transaction.”business rationale for the transactions and whether appropriate disclosures have been made. We also attempt to identify related party transactions each year by requiring directors and executive officers to complete a questionnaire that provides relevant information to assist in identifying such transactions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our directors and officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of any of our equity securities. During 2015, the following persons failed to file a Form 4 on a timely basis:
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To the best of our knowledge, with the exception of the persons named above, all required reports were filed on a timely basis. In making this statement, we have relied on the written representations of our directors and officers and copies of Forms 3, 4 and 5 provided to us.
APPROVAL OF AMENDMENT TO ARTICLE FOURTH OF THE SECOND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF SHARES OF AUTHORIZED COMMON STOCKADVISORY VOTE ON EXECUTIVE COMPENSATION
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Company is providing stockholders with an advisory (non-binding) vote on the overall 2022 compensation of the Company’s named executive officers.
As described in detail under the heading “Compensation Discussion and Analysis – Compensation Philosophy and Objectives,” the Company’s compensation program has been designed to attract, reward and retain capable executives and to provide incentives for the attainment of short-term performance objectives and strategic long-term performance goals. A strong link between compensation and performance provides incentives for achieving short-term and long-term financial and business objectives and increasing the value of the Company’s common stock, thereby increasing value to the Company’s stockholders. The Company is committed to tying pay to performance. Reflecting this commitment, the Company’s annual equity compensation program generally consists of a mix of time-based restricted stock awards and performance-based stock awards. The performance shares provide an opportunity for shares to be earned at the end of a three-year performance period if pre-established financial goals are met. The Company also uses selected performance measures for the 2022 Annual Bonuses awarded pursuant to the Company’s Amended and Restated 2000 Incentive Bonus Compensation Plan and each executive’s employment agreement. Please read the “Compensation Discussion and Analysis” for additional details about the Company’s executive compensation programs, including information about the fiscal year 2022 compensation of the Company’s named executive officers.
The Board has declared advisable and approved, subject to stockholder approval, an amendment to Article FOURTHrequests stockholders indicate their support of the Second Restated Certificate of Incorporation of the Company to increase the Company’s authorized common stock from 25,000,000 shares to 50,000,000 shares (the named executive officers’ compensation as described in this Proxy Statement. This proposal, commonly known as a “Common Stock Amendment”).
If the Common Stock Amendment is approved bysay-on-pay” proposal, gives the Company’s stockholders the opportunity to express their views on the Company’s named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, the Board asks its stockholders to vote FOR the following resolution at the Annual Meeting,Meeting:
“RESOLVED, that the Company intends to fileCompany’s stockholders approve, on an advisory basis, the Common Stock Amendment, substantiallycompensation of the named executive officers, as disclosed in the form of Appendix I hereto with the Secretary of State of Delaware as soon as practicable following stockholder approval and the certification of the vote related thereto. The Common Stock Amendment has the effect of increasing our authorized shares of common stock from 25,000,000 shares to 50,000,000 shares.
Purpose of the Amendment
The Company’s Second Restated Certificate of Incorporation currently authorizes the Board to issue a maximum of 27,000,100 shares of the Company’s capital stock, consisting of 25,000,000 shares of common stock, par value $0.01 per share, 100 shares of Series A preferred stock, par value $1.00 per share, and 2,000,000 shares of Series B Preferred Stock, par value $1.00 per share.
Of the 25,000,000 shares of common stock currently authorized, as of April 18, 2016, 14,223,442 shares are issued and outstanding and approximately 2,752,666 shares of common stock are reserved for future issuance under our equity compensation plans. The Company, therefore, only has approximately 8,023,892 shares of unreserved common stock available for future issuance. If the Common Stock Amendment is approved by stockholders, the Company would have 33,023,892 shares of common stock available for issuance (after taking into consideration the shares of common stock required to be held in reserve as set forth above).
The Board believes the Common Stock Amendment is advisable in order to maintain our financing and capital raising flexibility in connection with our working capital needs and for general corporate purposes. Other possible business and financial usesProxy Statement for the additional authorized shares of common stock include, without limitation, future stock splits, acquiring other companies, businesses or products in exchange for shares of common stock, attracting and retaining employees by the issuance of additional securities under our equity compensation plans and other transactions and corporate purposes that the Board deems to be in the best interest of the Company and its stockholders. The additional authorized shares would enable us to act quickly in response to opportunities that may arise for these types of transactions, in most cases without the necessity of obtaining further stockholder approval and incurring expenses associated with holding a special stockholders’ meeting before such issuance(s) could proceed, except as otherwise required under applicable Delaware law or under applicable NASDAQ rules.
Other than issuances pursuant to equity compensation plans, as of the date of this Proxy Statement, the Company has not adopted any plans to issue any additional shares of common stock and has not heretofore entered into any arrangements or understandings with respect thereto. However, the Company reviews and evaluates potential capital raising activities, transactions and other corporate actions on an ongoing basis to determine if such actions would be in the best interests of the Company and its stockholders and, accordingly, the Company reserves the right to issues shares of common stock, from time to time, pursuant to such actions.
Once authorized, the additional shares of common stock may be issued with approval of the Board but without further approval of the stockholders unless stockholder approval is required by applicable law, rule or regulation, including, but not limited to, applicable Delaware law and applicable NASDAQ rules. Accordingly, approval of this proposal may facilitate the ability of the Company to issue shares of common stock in connection with financings, acquisitions, benefit plans and other corporate transactions and it is possible that no further stockholder approval will be required in connection with any such transactions.
The Common Stock Amendment would be effective following the filing of the Certificate of Amendment with the Delaware Secretary of State, which will occur as soon as reasonably practicable after stockholder approval at the Annual Meeting and the certification of the vote related thereto, and will increase our authorized shares of common stock from 25,000,000 shares to 50,000,000 shares.
Effects of Common Stock Amendment
The proposed additional shares of authorized common stock would become part of the existing class of common stock and, if and when issued, would have the same rights and privileges as the shares of common stock presently issued and outstanding. Adoption of the Common Stock Amendment would not have any immediate dilutive effect on the proportionate voting power of existing stockholders. The increase in the authorized shares of common stock will not itself cause any changes in our capital accounts or have any immediate effect on the rights of existing stockholders. Current stockholders do not have any preemptive or similar rights and, accordingly, current stockholders do not have a prior right to purchase shares of any newly-issued common stock in order to maintain their proportionate ownership thereof.
As is true for shares of common stock presently authorized but unissued, the future issuance of common stock authorized by the Common Stock Amendment may, among other things, decrease existing stockholders’ percentage equity ownership, result in the issuance of shares of common stock at prices lower than the prices at which existing stockholders purchased their stock and could be dilutive to the voting rights of existing stockholders. In addition, depending on the price at which they are issued, the issuance of additional shares of common stock may have a negative effect on the market price of the common stock. It is also possible that shares of common stock may be issued at a time and under circumstances that may increase or decrease earnings per share and increase or decrease the book value per share of shares currently outstanding.
This proposal, if approved, could, under certain circumstances, have an anti-takeover effect. For example, if the Company was to become concerned that it may be a potential target of an unsolicited acquisition attempt, it could try to impede the acquisition by issuing additional shares of common stock or rights or other equity interests related thereto, thereby diluting the voting power of the other outstanding shares and increasing the potential cost to the bidder of the acquisition. The Board is not currently aware of any attempt or plan to acquire control of the Company.
Recommendation and Vote
The affirmative vote of a majority of the shares of common stock issued and outstanding as of the record date is required to approve the Common Stock Amendment to increase our authorized shares of common stock from 25,000,000 shares to 50,000,000 shares. Abstentions and broker non-votes will have the same effect as votes cast against the proposal. If the proposal is approved, it will become effective upon the filing of the Certificate of Amendment with the Delaware Secretary of State, which will occur as soon as reasonably practicable after approval.
The Board unanimously recommends that the stockholders voteFOR the Common Stock Amendment.
STOCKHOLDER PROPOSALS
A stockholder proposal intended to be presented at our 20172023 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission in accordance with Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the 2022 Summary Compensation Table and other related tables and disclosures.”
The “say-on-pay” vote is advisory and therefore not binding on the Company, the Compensation Committee or the Board. The Board and Compensation Committee, which is comprised entirely of independent directors, value the opinions of our stockholders and to the extent there are any significant votes against any named executive officer compensation as disclosed in this Proxy Statement, the Board will consider stockholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns. However, neither the Board nor the Compensation Committee will have any obligation to take such actions. The “say-on-pay” vote is proposed annually, and will be on the ballot for the 2024 Annual Meeting of Stockholders.
Our Board of Directors unanimously recommends that stockholders vote FOR the approval of the 2022 compensation of the Company’s named executive officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC.
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Stockholder Proposals Submitted Pursuant to Rule 14a-8 as promulgated under of the Exchange Act must
To be received by us at our principal executive office on or before December 31, 2016, to be includedconsidered for inclusion in ournext year’s proxy statement and form of proxy relatingpursuant to that meetingRule 14a-8 of the Exchange Act, and must comply withacted upon at the requirements of Rule 14a-8. A stockholder proposal intended to be presented at our 20172024 Annual Meeting of Stockholders (the “2024 Annual Meeting”), stockholder proposals must be submitted in writing to the attention of our Secretary at our principal office, no later than December 29, 2023. In order to avoid controversy, stockholders should submit proposals by means (including electronic) that is made outsidepermit them to prove the date of delivery. Such proposals also need to comply with Rule 14a-8 under of the Exchange Act and the interpretations thereof, and may be omitted from the Company’s proxy materials for the 2024 Annual Meeting if such proposals are not in compliance with applicable requirements of the Exchange Act.
Director Nominations and Stockholder Proposals Not Submitted Pursuant to Rule 14a-8 of the Exchange Act
Our Amended and Restated Bylaws also establish advance notice procedures with regard to stockholder proposals or director nominations that are not submitted for inclusion in the proxy statement. With respect to such stockholder proposals or director nominations, a stockholder’s advance notice must comply withbe made in writing, must meet the requirements of Section 1.3 ofset forth in our Bylaws. Under Section 1.3 of the Company’sAmended and Restated Bylaws a stockholder or its representative must be present in person at the meeting. Notice of a proposaland must be delivered to, or mailed by first class United States mail, postage prepaid, and received by, to our Secretary notat our principal office no earlier than February 23, 2024 and no later than the close of business on March 25, 2024. However, in the 120th calendar day andevent the 2024 Annual Meeting is scheduled to be held on a date before May 23, 2024, or after August 21, 2024, then such advance notice must be received by us not later than the close of business on the 90thlater of (1) the ninetieth (90th) calendar day prior to the one-year anniversary of2024 Annual Meeting and (2) the prior year’s annual meeting or special meeting in lieu thereof; provided, however that in the event that the date of the annual meeting of stockholders is more than 30 calendar days before or more than 60 calendar days after the one-year anniversary date of the previous year’s annual meeting, or if we did not hold an annual meeting of stockholders or special meeting in lieu thereof in the preceding fiscal year, notice by the stockholder to be timely must be delivered, or mailed and received, not later than the later of the close of business on the 90th calendar day prior to such annual meeting or the close of business on the 10thtenth (10th) calendar day following the day on which we first make public disclosure of the date of the 2024 Annual Meeting (or if that day is not a business day for the Company, on the next succeeding business day). Stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees under Exchange Act Rule 14a-19 must comply with the notice required under Exchange Act Rules 14a-19.
General Requirements
Each proposal submitted must be a proper subject for stockholder action at the 2024 Annual Meeting, and all proposals and nominations must be submitted to: Secretary, Lifetime Brands, Inc., 1000 Stewart Avenue, Garden City, New York 11530. The stockholder proponent must appear in person to present the proposal or nomination at the 2024 Annual Meeting or send a qualified representative to present such annual meeting was first made. The formproposal or nomination. If a stockholder gives notice after the applicable deadlines or otherwise does not satisfy the relevant requirements of Rule 14a-8 of the notice must satisfyExchange Act or our Bylaws, the requirements set forth in Section 1.3 of our Bylaws.stockholder will not be permitted to present the proposal or nomination for a vote at the 2024 Annual Meeting.
Additionally, the makingDiscretionary Authority Pursuant to Rule 14a-4(c) of the Exchange Act
If a stockholder who wishes to present a proposal must be permittedbefore the 2024 Annual Meeting outside of Rule 14a-8 of the Exchange Act fails to notify us by law,the required dates indicated above for the receipt of advance notices of stockholder proposals and proposed director nominations, the proxies that our CertificateBoard solicits for the 2024 Annual Meeting will confer discretionary authority on the person named in the proxy to vote on the stockholder’s proposal if it is properly brought before that meeting subject to compliance with Rule 14a-4(c) of Incorporation and our Bylaws.the Exchange Act. If a stockholder makes timely notification, the proxies may still confer discretionary authority to the person named in the proxy under circumstances consistent with the SEC’s proxy rules, including Rule 14a-4(c) of the Exchange Act.
HOUSEHOLDING OF MATERIALS
We, in addition to some banks, brokers, and other nominee record holders participate in the practice of “householding” notices of internet availability of proxy materials, proxy statements and annual reports. This means that only one copy of our Notice, proxy statement or annual report is sent to multiple stockholders in the same household unless we or such bank, broker or other nominee holder have received contrary instructions from one or more of the stockholders. We will promptly deliver a separate copy of either documentthese documents to any stockholder upon request by writing the Company at the following address: Lifetime Brands, Inc., 1000 Stewart Avenue, Garden City, New York 11530, Attention: Mr. Laurence Winoker, SeniorExecutive Vice President – Finance, Treasurer and Chief Financial Officer; or by calling us at the following phone number: (516) 683-6000. Any stockholder who wants to receive separate copies of the Notice, annual report and proxy statement in the future, or who is currently receiving multiple copies and would like to receive only one copy for his or her household, should contact his or her bank, broker, or other nominee record holder, or contact us at the above address and phone number.
OTHER MATTERS
Our management does not know of any matters other than those stated in this Proxy Statement which are to be presented for action at the Annual Meeting. If any other matters should properly come before the Annual Meeting, it is intended that proxies in the accompanying form will be voted on such other matters in accordance with the judgment of the persons voting such proxies.proxies, subject to compliance with Rule 14a-4(c) of the Exchange Act. Discretionary authority to vote on such matters is conferred by such proxies upon the persons voting them.
Our financial statements are included in our Annual Report for the fiscal year ended December 31, 2015.2022.
Upon the written request of any person who on the record date was a record owner of our common stock, or who represents in good faith that he or she was on such date a beneficial owner of our common stock, we will send to such person, without charge, a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015,2022, including financial statements and schedules, as filed with the SEC. Requests for this report should be directed to Mr. Laurence Winoker, SeniorExecutive Vice President – Finance, Treasurer and Chief Financial Officer, Lifetime Brands, Inc., 1000 Stewart Avenue, Garden City, New York 11530.
By Order of our Board of Directors, |
/s/ Sara Shindel |
Sara Shindel |
Secretary |
Dated: April |
Appendix IA
CERTIFICATE OF AMENDMENTReconciliation of Non-GAAP Financial Measures
OF
SECOND RESTATED CERTIFICATE OF INCORPORATION
OFAdjusted EBITDA:
LIFETIME BRANDS, INC.
Year Ended December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
(in thousands) | ||||||||||||
Net (loss) income as reported | $ | (6,166) | $ | 20,801 | $ | (3,007) | ||||||
Undistributed equity losses (earnings), net | 9,467 | (807) | (1,258) | |||||||||
Income tax provision | 5,728 | 16,541 | 9,866 | |||||||||
Interest expense | 17,205 | 15,524 | 17,277 | |||||||||
Depreciation and amortization | 19,536 | 22,520 | 24,664 | |||||||||
Mark to market (gain) loss on interest rate derivatives | (1,971) | (1,062) | 2,144 | |||||||||
Goodwill and other intangible asset impairments | — | 14,760 | 20,100 | |||||||||
Stock compensation expense | 3,846 | 5,217 | 5,951 | |||||||||
Restructuring expenses | 1,420 | — | 211 | |||||||||
Warehouse relocation and redesign expenses(1) | 629 | 450 | 1,093 | |||||||||
S’well integration costs(2) | 1,895 | — | — | |||||||||
Acquisition related expenses | 1,473 | 673 | 285 | |||||||||
Wallace facility remediation expense | 5,140 | 500 | — | |||||||||
Adjusted EBITDA, before limitation | 58,202 | 95,117 | 77,326 | |||||||||
Pro forma projected synergies adjustment(3) | 3,590 | — | — | |||||||||
Pro forma adjusted EBITDA, before limitation(5) | 61,792 | 95,117 | 77,326 | |||||||||
Permitted non-recurring charge limitation(4) | (3,589) | — | — | |||||||||
Pro forma Adjusted EBITDA(5) | $ | 58,203 | $ | 95,117 | $ | 77,326 | ||||||
(1) For the year ended December 31, 2022, warehouse relocation expenses included $0.5 million of expenses related to the International segment and $0.1 million of expenses related to the U.S. segment. For the year ended December 31, 2021, warehouse relocation expenses included $0.1 million of expenses related to the International segment and $0.3 million of expenses related to the U.S. segment. For the year ended December 31, 2020, warehouse relocation expenses related to the International segment.
Pursuant(2) For the year ended December 31, 2022, S’well integration costs included $0.5 million of expenses related to Section 242inventory step up adjustment in connection with S’well acquisition.
(3) Pro forma projected synergies represents the projected cost savings of $2.3 million associated with the
General Corporation Law reorganization of the StateInternational segment’s workforce, $0.9 million associated with the Executive Chairman’s cessation of Delaware
LIFETIME BRANDS, INC., a corporation organizedservice in such role, and existing under and by virtue$0.4 million associated with reorganization of the General Corporation Law ofU.S. segment’s sales management structure.
(4) Permitted non-recurring charges include restructuring expenses, integration charges, Wallace facility remediation expense, and warehouse relocation and redesign expenses. These are permitted exclusions from the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, at a meeting of its members duly called and heldCompany’s adjusted EBITDA, subject to limitations, pursuant to the General Corporation LawCompany’s Debt Agreements.
(5) Adjusted EBITDA is a non-GAAP financial measure which is defined in the Company’s debt agreements. Adjusted EBITDA is defined as net income (loss), adjusted to exclude undistributed equity in (earnings) losses, income tax provision (benefit), interest expense, depreciation and amortization, mark to market (gain) loss on interest rate derivatives, stock compensation expense, and other items detailed in the table above that are consistent with exclusions permitted by our debt agreements.
Adjusted net income (in thousands):
Year Ended December 31, | ||||||||
2022 | 2021 | |||||||
Net income (loss) as reported | $ | (6,166 | ) | $ | 20,801 | |||
Adjustments: | ||||||||
Acquisition related expenses | 1,473 | 673 | ||||||
Restructuring expenses | 1,420 | — | ||||||
S’well Integration costs(1) | 1,895 | — | ||||||
Warehouse relocation and redesign expenses(2) | 629 | 450 | ||||||
Impairment of Grupo Vasconia investment | 6,168 | — | ||||||
Mark to market (gain) on interest rate derivatives | (1,971) | (1,062) | ||||||
Intangible assets impairments | — | 14,760 | ||||||
Gain on change in ownership in equity method investment | — | (2,703) | ||||||
Foreign currency translation loss reclassified from Accumulated Other Comprehensive Loss | — | 3,404 | ||||||
Wallace facility remediation expense | 5,140 | 500 | ||||||
Income tax effect on adjustments | (1,922) | (28) | ||||||
Adjusted net income (3) | $ | 6,666 | $ | 36,795 |
(1) For the year ended December 31, 2022, S’well integration costs included $0.5 million of expenses related to inventory step up adjustment in connection with S’well acquisition.
(2) For the Stateyear ended December 31, 2022 warehouse relocation expenses included $0.5 million of Delaware, duly adopted a resolution proposing and declaring advisable the following amendmentexpenses related to the Second Restated CertificateInternational segment and $0.1 million of Incorporation of said corporation.
RESOLVED, that the Second Restated Certificate of Incorporation of Lifetime Brands, Inc. be amended by changing the first sentence of Article FOURTH thereof so that, as amended said first sentence of Article FOURTH shall be, and read in its entirety, as follows:
“FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is fifty-two million one hundred (52,000,100) shares, of which one hundred (100) shares, of the par value of One Dollar ($1.00) each, are to be of a class designated Series A Preferred Stock, two million (2,000,000) shares, of the par value of One Dollar ($1.00) each, are to be of a class designated Series B Preferred Stock and fifty million (50,000,000) shares, of the par value of One Cent ($.01) each, are to be of a class designated Common Stock.”
SECOND: That thereafter, pursuant to resolution of its Board of Directors, an annual meeting of the stockholders of said corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares as required by statute were voted in favor of the amendment.
THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Section 242 of the General Corporation Law of the State of Delaware.
FOURTH: That this Certificate of Amendmentexpenses related to the Second Restated CertificateU.S. segment. For the year ended December 31, 2021, warehouse relocation expenses included $0.1 million of Incorporation shall become effective upon the filing of the Certificate of Amendment with the Delaware Secretary of State, which will occur as soon as reasonably practicable after approval.
IN WITNESS WHEREOF, said Lifetime Brands, Inc. has caused this Certificate of Amendmentexpenses related to the Second Restated CertificateInternational segment and $0.3 million of Incorporationexpenses related to be executed, acknowledgedthe U.S. segment.
(2) Adjusted net income in the year ended December 31, 2022, excludes acquisition related expenses, restructuring expenses, S’well integration costs, warehouse relocation and filed by its Chief Executive Officer this [•] dayredesign expenses, impairment of June 2016.Grupo Vasconia investment, mark to market (gain) on interest rate derivatives, and Wallace facility remediation expense. The income tax effect on adjustments reflects the statutory tax rates applied on the adjustments. Adjusted net income in the year ended December 31, 2021, excludes acquisition expenses, warehouse relocation expenses, mark to market (gain) on interest rate derivatives, intangible asset impairments, gain on change in ownership in equity method investment, foreign currency translation loss reclassified from Accumulated Other Comprehensive Loss, and Wallace facility remediation expense. The income tax effect on adjustments reflects the statutory tax rates applied on the adjustments.
Adjusted income from operations (in thousands):
Year Ended December 31, | ||||||||
2022 | 2021 | |||||||
Income from operations | $ | 24,263 | $ | 50,842 | ||||
Excluded non-cash charges: | ||||||||
Acquisition related expenses | 1,473 | 673 | ||||||
Restructuring expenses | 1,420 | — | ||||||
S’well integration costs | 1,895 | — | ||||||
Warehouse relocation and redesign expenses(1) | 629 | 450 | ||||||
Intangible asset impairments | — | 14,760 | ||||||
Wallace facility remediation expense | 5,140 | 500 | ||||||
Total adjustments | $ | 10,557 | $ | 16,383 | ||||
Adjusted income from operations (2) | $ | 34,820 | $ | 67,225 | ||||
(1) For the year ended December 31, 2022, the warehouse relocation and redesign expenses included $0.5 million of expenses related to the International segment and $0.1 million of expenses related to the U.S. segment. For the year ended December 31, 2021, warehouse relocation expenses included $0.1 million of expenses related to the International segment and $0.3 million of expenses related to the U.S. segment.
(2) Adjusted income from operations for the year ended December 31, 2022 and December 31, 2021, excludes acquisition related expenses, restructuring expenses, S’well integration costs, warehouse relocation and redesign expenses, intangible asset impairments, and Wallace facility remediation expense.
qC123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext ENDORSEMENT LINE SACKPACK 000001 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Online Go to www.envisionreports.com/LCUT or scan the QR code – login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/LCUT Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Annual Meeting Proxy Card 1234 5678 9012 345 IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION,VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Proposals – The Board of Directors recommends a vote FOR all nominees for director, FOR Proposal 2 and FOR Proposal 3. 1. ELECTION OF DIRECTORS 01 - Jeffrey Siegel For Against Abstain 02 - Robert B. Kay For Against Abstain 03 - Rachael A. Jarosh For Against Abstain 04 - Cherrie Nanninga 05 - Craig Phillips 06 - Veronique Gabai-Pinsky 07 - Bruce G. Pollack 08 - Michael J. Regan 09 - Michael Schnabel 2. TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2023. For Against Abstain 3. TO APPROVE, ON A qNON-BINDING
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TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016. |
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(Please ADVISORY BASIS, THE 2022 COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS. For Against Abstain Authorized Signatures – This section must be completed for your vote to be counted. – Date and Sign Below (Please sign proxy as name appears on corporate records. Joint owners should each sign personally. Trustees and others signing in a representative capacity should indicate the capacity in which they sign.) Date (mm/dd/yyyy) – Please print date below. Signature 1 – Please keep signature within the box. Signature 2 – Please keep signature within the box. MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND J N T C 1234567890 1 U P X 5 7 6 2 5 9 03T0BD
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The 2023 Annual Meeting of Stockholders of Lifetime Brands, Inc. will be held on Thursday, June 22, 2023 at 10:30 a.m., Eastern Time, virtually via the internet at www.meetnow.global/MDCWV2T. To access the virtual meeting, you must have the information that is printed in the shaded bar located on the reverse side of this form. Proxy materials for the Annual Meeting
of ShareholdersStockholders are available at:
www.envisionreports.com/LCUT
q Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/LCUT IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION,VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
PROXY — Proxy – LIFETIME BRANDS, INC.
This Proxy is solicited on behalf of the Board of Directors
Jeffrey Siegel and Ronald ShiftanRobert B. Kay, and each of them, are hereby constituted and appointed the lawful attorneys and proxies of the undersigned, with full power of substitution to vote and otherwise act on behalf of the undersigned with all powers that the undersigned would have if personally present at the 20162023 Annual Meeting, with respect to all shares of Common Stock, $.01$0.01 par value, of LIFETIME BRANDS, INC. standing in the name of the undersigned on the Company’s books at the close of business on April 18, 2016,25, 2023, at the Annual Meeting of Stockholders to be held at 1000 Stewart Avenue, Garden City, NY 11530,virtually via the Internet at 10:30 A.M.a.m., Eastern Time, on June 9, 201622, 2023 or at any adjournment(s) or postponement(s) thereof (the “2016“2023 Annual Meeting”), as directed on the reverse side. The undersigned acknowledges receipt of the Notice of the Annual Meeting and Proxy Statement dated April 21, 2016.
Statement. The powers hereby granted may be exercised by any of said attorneys or proxies or their substitutes present and acting at the above-described 20162023 Annual Meeting or any adjournment(s) or postponement(s) thereof. The undersigned hereby revokes any and all proxies heretofore given by the undersigned to vote at said meeting.
The proxy holder is authorized to act, in accordance with his or her discretion, upon all matters incident to the conduct of the meeting and upon other matters that properly come before the 20162023 Annual Meeting, subject to compliance with Rule 14a-4(c) of the Securities Exchange Act of 1934, as amended. This proxy when properly executed will be voted in the manner directed herein. If no direction is made with respect to any proposal, this proxy will be voted FOR all nominees listed in Proposal 1, FOR Proposal 2 and FOR Proposals 2 andProposal 3.
(Continued (Continued and to be signed on reverse side.)Non-Voting Items Change of Address – Please print new address below. Comments – Please print your comments below.