UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant:  ☒                             Filed by a Party other than the Registrant  ☐

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 Preliminary Proxy Statement
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 Definitive Proxy Statement
 Definitive Additional Materials
 Soliciting Material Pursuant to Rule 14a-12

CONN’S, INC.

(Name of Registrant as Specified in Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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CONN’S, INC.

NOTICE OF 20182021 ANNUAL MEETING OF STOCKHOLDERS

To Be Held May 30, 201825, 2021

Location Information

2445 Technology Forest Blvd.

Building 4, Suite 800

The Woodlands, Texas 77381

To the Stockholders of Conn’s, Inc.:

NOTICE IS HEREBY GIVEN that the 20182021 annual meeting of stockholders of Conn’s, Inc. will be held on Wednesday,Tuesday, May 30, 2018,25, 2021, at 2445 Technology Forest Blvd., Building 4, Suite 800, The Woodlands, Texas 77381, commencing at 1:12:00 P.M., Central Daylight Time, for the following purposes:

 

 1.

to elect the eight directors nominated by our Board of Directors and named in this proxy statement;

 

 2.

to ratify the Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2019;2022;

 

 3.

to hold anon-binding advisory vote to approve the compensation of our named executive officers; and

 

 4.

to transact such other business as may properly come before the meeting.

Only stockholders of record at the close of business on April 4, 20181, 2021 are entitled to notice of, and to vote at, the 20182021 annual meeting of stockholders, or any postponement or adjournment thereof. A list of such stockholders, arranged in alphabetical order and showing the address of and the number of shares registered in the name of each such stockholder, will be available for examination by any stockholder for any purpose relating to the meeting during ordinary business hours for a period of at least ten days prior to the meeting at our principal executive offices located at 2445 Technology Forest Blvd., Building 4, Suite 800, The Woodlands, Texas 77381. If you plan on attending in person, you will need to provide proof of stock ownership, such as an account or brokerage statement reflecting stock ownership as of the record date, and a form of valid government-issued picture identification, such as a driver’s license or passport.

We are pleased to take advantage of the U.S. Securities and Exchange Commission (“SEC”) rule that allows companies to furnish proxy materials to their stockholders over the Internet. As a result, on or about April 16, 2018,13, 2021, we are mailing to our stockholders, other than those who previously requested electronic or paper delivery of proxy materials, aNotice of Internet Availability of Proxy Materials (the “Notice”) for the fiscal year ended January 31, 2018.2021. The Notice contains instructions on how to access those documents over the Internet. The Notice also contains instructions on how to request a paper copy of our proxy materials, including this proxy statement, our Annual Report on Form10-K for the fiscal year ended January 31, 2018,2021, and a form of proxy card or voting instruction card.It is very important that your shares are represented and voted at the meeting. As explained in further detail in the Notice, your shares may be voted via a toll-free telephone number, on the Internet, or by signing, dating and returning the enclosed proxy card in the envelope provided. Your proxy card will not be used if you are present at the meeting and prefer to vote in person, or if you revoke your proxy.

By Order of the Board of Directors,

Mark Prior

Vice President, General Counsel and Secretary

By Order of the Board of Directors,
Mark L. Prior
Vice President, General Counsel and Secretary

April 13, 20182021

The Woodlands, Texas


IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 30, 201825, 2021

The Company’s Proxy Statement for the 20182021 Annual Meeting of Stockholders and the Annual Report onForm 10-K for the fiscal year ended January 31, 20182021 are available free of charge on our website atwww.conns.com, atwww.proxyvote.com, and at the SEC’s website atwww.sec.gov.


PROXY STATEMENT

20182021 ANNUAL MEETING OF STOCKHOLDERS

 

Date:  May 30, 201825, 2021
Time:  1:12:00 P.M., Central Daylight Time
time
Location of Meeting:  

Conn’s, Inc. (“we,” “us” or the “Company”)

2445 Technology Forest Blvd.

Building 4, Suite 800

The Woodlands, Texas 77381

Record Date and Number of Votes:  The close of business on April 4, 2018.1, 2021. Holders of our Common Stock, par value $0.01 per share (“Common Stock”) are entitled to one vote for each share of Common Stock they owned as of the close of business on April 4, 2018.1, 2021. You may not cumulate votes.
Agenda:  

1.  To elect the eight directors nominated by our Board of Directors and named in this proxy statement;

2.  To ratify the Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending January 31, 20192022 (“fiscal year 2019”2022);

3.  To hold anon-binding advisory vote to approve the compensation of our named executive officers; and

4.  To transact such other business as may properly come before the meeting.

Proxies:  

Unless you tell us on the form of proxy to vote differently, the named proxies will vote signed returned proxies:

1.  “FOR” the election of the eight directors nominated by the Board of Directors and named in this proxy statement;

2.  “FOR” the proposal to ratify the appointment by the Audit Committee of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2019;2022; and

3.  “FOR” the approval, on anon-binding, advisory basis, of the compensation of our named executive officers.

The proxy holders will use their discretion on other matters. If a nominee for the Board of Directors cannot serve as a director, the proxy holders will vote for a person whom they believe will carry on our present policies.

Proxies Solicited By:  The board of directors of the Company (the “Board ofDirectors” or “Board”).
Distribution
Date:
  The Notice or the proxy materials, including this proxy statement, proxy card or voting instruction card and our Annual Report on Form10-K, are being distributed and made available on or about April 16, 2018.13, 2021.
YOUR VOTE IS IMPORTANT. PLEASE VOTE PROMPTLY.

YOUR VOTE IS IMPORTANT. PLEASE VOTE PROMPTLY.

Prompt return of your proxy will help reduce the costs to the Company ofre-solicitation.


Table of Contents

 

GENERAL INFORMATION REGARDING THE 20182021 ANNUAL MEETING OF STOCKHOLDERS

   1 

PROPOSAL ONE: ELECTION OF DIRECTORS

   5 

PROPOSAL TWO: RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

   8 

AUDIT COMMITTEE REPORT

   109 

PROPOSAL THREE: ADVISORY VOTE FOR APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

10
BOARD OF DIRECTORS   11 

BOARD OF DIRECTORSDIRECTOR NOMINEES FOR 2021 – 2022

   1211 

BOARD OF DIRECTOR NOMINEES FOR 2018—2019:NOMINATION POLICIES AND PROCEDURES

   1213 

NOMINATION POLICIES AND PROCEDURESINDEPENDENT BOARD COMPOSITION

   14 

INDEPENDENT BOARD COMPOSITIONMEETINGS

14
POLICY REGARDING DIRECTOR ATTENDANCE AT THE ANNUAL MEETING OF STOCKHOLDERS   15 

COMMITTEES OF THE BOARD MEETINGS

   15 

POLICY REGARDING DIRECTOR ATTENDANCE AT THE ANNUAL MEETING OF STOCKHOLDERSENVIRONMENTAL, SOCIAL AND GOVERNANCE

   16 

COMMITTEES OF THE BOARD

16

COMPENSATION OFNON-EMPLOYEE DIRECTORS

   17 

COMPENSATION DISCUSSION AND ANALYSIS

   2119 

EXECUTIVE SUMMARY

   2119 

BUSINESS HIGHLIGHTS AND OUTLOOK

   2119 

FISCAL YEAR 2018 PAY FOR PERFORMANCE HIGHLIGHTSSTOCKHOLDER OUTREACH

22
COMPENSATION PHILOSOPHY AND OBJECTIVES   23 

COMPENSATION PHILOSOPHY AND OBJECTIVES

23

DETERMINING COMPENSATION

   24 

ELEMENTS OF COMPENSATION

   26 

TIMING OF EQUITY AWARDS

28
FISCAL YEAR 2018 SPECIAL2021 EQUITY AWARDS TO NAMED EXECUTIVE OFFICERS

28
CERTAIN FISCAL YEAR 2020 EQUITY AWARDS TO NAMED EXECUTIVE OFFICERS OTHER THAN THE CEO28
CERTAIN FISCAL YEAR 2019 RETENTION EQUITY AWARDS TO CEO AND COO   29 

SETTLEMENT OF FISCAL YEAR 2017 PERFORMANCE-BASED RSU AWARDSHEALTH, RETIREMENT, PERQUISITES AND OTHER BENEFITS

29
STOCK OWNERSHIP GUIDELINES29


CLAWBACK FEATURES29
PROHIBITION ON HEDGING AND PLEDGING   30 

FISCAL YEAR 2019 SALARY INCREASES AND EQUITY AWARDS TO CEO AND CFOOTHER COMPENSATION

   30 

TIMING OF EQUITY GRANTSEMPLOYMENT AND RELATED AGREEMENTS

   31


HEALTH, RETIREMENT, PERQUISITES AND OTHER BENEFITS

3130 

ANNUAL ADVISORY VOTE ON EXECUTIVETAX IMPLICATIONS OF OUR COMPENSATION POLICIES

   3130 

STOCK OWNERSHIP GUIDELINESCOMPENSATION COMMITTEE REPORT

   3130 

PROHIBITION ON HEDGING AND PLEDGINGSUMMARY COMPENSATION TABLE

   32 

OTHER COMPENSATION

32

EMPLOYMENT AND RELATED AGREEMENTS

32

TAX IMPLICATIONSGRANTS OF OUR COMPENSATION POLICIES

32

COMPENSATION COMMITTEE REPORTPLAN-BASED AWARDS

33

SUMMARY COMPENSATION TABLE

   34 

GRANTSOUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2021

35
OPTION EXERCISES AND STOCK VESTED35
TERMINATION OF PLAN-BASED AWARDSEMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS

   36 

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2018EXECUTIVE SEVERANCE AGREEMENTS FOR MESSRS. MILLER AND WRIGHT

   3736 

OPTION EXERCISES AND STOCK VESTEDFISCAL YEAR 2021 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

   38 

TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROLINDEMNIFICATION ARRANGEMENTS

   39 

EXECUTIVE SEVERANCE AGREEMENTSCEO PAY RATIO DISCLOSURE AND ADDITIONAL CEO PAY RATIO DISCLOSURE

   39 

FISCAL YEAR 2018 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGECORPORATE GOVERNANCE

40
CORPORATE GOVERNANCE POLICIES AND PROCEDURES40
LEAD INDEPENDENT DIRECTOR40
SEPARATION OF CONTROLCHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER

   41 

INDEMNIFICATION ARRANGEMENTSRISK OVERSIGHT

41
STOCKHOLDER COMMUNICATIONS WITH THE BOARD   42 

CEO PAY RATIO DISCLOSURE AND ADDITIONAL CEO PAY RATIO DISCLOSUREEXECUTIVE OFFICERS

42
BIOGRAPHICAL INFORMATION42
EQUITY INCENTIVE PLANS   43 

CORPORATE GOVERNANCEEMPLOYEE STOCK PURCHASE PLAN

   44 

CORPORATE GOVERNANCE POLICIES AND PROCEDURESEQUITY COMPENSATION PLANS

44

LEAD INDEPENDENT DIRECTOR

44

SEPARATION OF CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER

   45 

RISK OVERSIGHTSTOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL STOCKHOLDERS

   45 

STOCKHOLDER COMMUNICATIONS WITH THE BOARD

45

EXECUTIVE OFFICERSCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

46

BIOGRAPHICAL INFORMATION

46

EQUITY INCENTIVE PLANS

47

AMENDED AND RESTATED 2003 INCENTIVE STOCK OPTION PLAN

47


2011 OMNIBUS INCENTIVE PLAN

   48 

EMPLOYEE STOCK PURCHASE PLANREVIEW AND APPROVAL OF RELATED PARTY TRANSACTIONS

   48 

2003NON-EMPLOYEE DIRECTOR STOCK OPTION PLANSECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

   48 

2011NON-EMPLOYEE DIRECTOR RESTRICTED STOCK PLANSTOCKHOLDERS SHARING THE SAME LAST NAME AND ADDRESS

   48 

2016 AMENDED OMNIBUS INCENTIVE PLAN

48

EQUITY COMPENSATION PLANS

49

STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL STOCKHOLDERS

49

PERFORMANCE-BASED AWARDS

51

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

52

REVIEW AND APPROVAL OF RELATED PARTY TRANSACTIONS

52

RELATED PARTY TRANSACTIONS

52

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

53

STOCKHOLDERS SHARING THE SAME LAST NAME AND ADDRESS

53

FORM OF PROXY CARD

  54


GENERAL INFORMATION REGARDING THE 20182021 ANNUAL MEETING OF STOCKHOLDERS

Our fiscal year ends on January 31. References to a fiscal year throughout this proxy statement refer to the calendar year in which the fiscal year ends.

What constitutes a quorum? What is the Record Date? How many shares are outstanding?

The holders of a majority of the outstanding shares of our common stock (the “Common Stock”) entitled to vote at the 20182021 annual meeting of stockholders (the “20182021 annual meeting” or the “meeting”), represented in person or by proxy, will constitute a quorum at the meeting. However, if a quorum is not present or represented at the meeting, the stockholders entitled to vote at the meeting, present in person or represented by proxy, have the power to adjourn the meeting, without notice, other than by announcement at the meeting, until a quorum is present or represented. At any such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the original meeting.

On April 4, 2018,1, 2021, the “Record Date,” there were 31,564,72129,357,728 shares of our Common Stock issued and outstanding and entitled to vote, meaning that 15,782,36114,678,865 shares of our Common Stock must be present in person or by proxy to have a quorum.

What matters will be voted on at the 20182021 annual meeting?

The following matters will be voted on at the 20182021 annual meeting:

 

 1.

the election of eight directors nominated to the Board of Directors;Directors and named in this proxy statement;

 

 2.

a proposal to ratify the Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2019;2022;

 

 3.

anon-binding advisory resolution to approve the compensation of our named executive officers; and

 

 4.

such other business as may properly come before the meeting.

How does the Board of Directors recommend that I vote?

The Board of Directors recommends that you vote:

 

 1.

FOR the election of the eight directors nominated by the Board of Directors and named in this proxy statement.

 

 2.

FOR the ratification of the appointment by the Audit Committee of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2019.2022.

 

 3.

FOR the approval, on anon-binding advisory basis, of the compensation of our named executive officers, as disclosed in this proxy statement.

What is the effect of a brokernon-vote?

Brokers or other nominees who hold shares of our Common Stock for a beneficial owner only have the discretion to vote on routine proposals when they have not received voting directions from the beneficial owner at least ten days prior to the 20182021 annual meeting. Rule 452 of the New York Stock Exchange, which governs all brokers (including those holding NASDAQ-listed securities), provides that a broker or other nominee holding shares for a beneficial owner may generally vote on routine matters, but notnon-routine matters, without receiving voting instructions. Other than with respect to the proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm (Proposal Two), which is considered routine, all of the other proposals are considerednon-routine matters. Please provide instructions to your broker or nominee on how to vote your shares. If you do not provide such voting instructions to your broker, they will not be able to vote for Proposals One or Three for you and a “broker non-vote” will result. Shares that constitute brokernon-votes will be counted as present at the meeting for the purpose of determining a quorum, but will only be considered entitled to vote on the proposal to ratify the appointment by the audit committee of our Board of Directors (the “Audit Committee”) of our independent registered public accounting firm and any other routine matters that may properly come before the meeting. To minimize the number of brokernon-votes and to ensure that your voice is heard in the election of directors and the other matters to be voted on at the 20182021 annual meeting, we encourage you to provide voting instructions to the broker or other organization that holds your shares by carefully following the instructions in the Notice.

1


What vote is required to approve the proposals?

Provided a quorum exists, the following votes are required for each proposal:

Proposal One: Election of Directors - To be elected, each director must receive amajority of the votes cast with respect to the director. For purposes of this vote, a majority of the votes cast means that the number of shares voted “for” a director’s election exceeds the number of shares voted “against” that director’s election. Abstentions and brokernon-votes will have no effect on this proposal.

Proposal Two: Ratify the Appointment of Ernst & Young LLP as our Independent Registered Public Accounting Firm - An affirmative vote of amajority of shares present in person or represented by proxy and entitled to vote on the subject matter at the meeting is required to ratify the Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2019.2022. Abstentions and brokernon-votes will have the same effect as votes against this proposal.

Proposal Three: Advisory Vote on Executive Compensation – An affirmative vote of amajority of the shares present in person or represented by proxy and entitled to vote on the subject matter at the meeting is required to give advisory(non-binding) approval of the compensation of our named executive officers as disclosed in this proxy statement. Because your vote is advisory, it will not be binding on the Board of Directors or on us; however, the Board of Directors and we will review the voting results and take them into consideration when making future decisions regarding executive compensation. Abstentions will have the same effect as a vote against this proposal and brokernon-votes will have no effect on this proposal.

Who is entitled to vote at the Annual Meeting?

Only stockholders of record as of the close of business on April 4, 2018,1, 2021, the Record Date, are entitled to notice of and to vote at the meeting or any adjournments of the meeting. Each share of Common Stock entitles the holder thereof to one vote per share.

What will happen if I do not specify how my shares are to be voted, but do submit a proxy?

Stockholders of Record. If you are a stockholder of record and you submit a proxy, but you do not provide voting instructions, your shares will be voted:

 

FOR the election of the eight directors nominated by our Board of Directors and named in this proxy statement;

 

FOR the ratification of the Audit Committee’s appointment of Ernst & Young LLP, as our independent registered public accounting firm for fiscal year 2018;2022; and

 

FOR the approval, on anon-binding advisory basis, of the compensation of our named executive officers, as disclosed in this proxy statement;statement.

Beneficial Owners. If you are a beneficial owner and you do not provide voting instructions to the broker or other nominee that holds your shares, the broker or other nominee will determine if it has the discretionary authority to vote on a particular proposal, and may not be able to vote on all proposals presented for a vote at the annual meeting.

What will happen if I do not vote my shares?

Stockholders of Record.If you are the stockholder of record and you do not vote by proxy card, by telephone, by the Internet or in person at the 20182021 annual meeting, your shares will not be voted at the 20182021 annual meeting. For each of the proposals, if you are not present at the meeting in person or by proxy, the failure to vote will not affect the outcome of the proposal.

Beneficial Owners.If you are the beneficial owner of shares, your broker or nominee may vote your shares only on those proposals on which it has discretion to vote. See “What is the effect of a brokernon-vote?” for more information.

How do I vote and what are the voting deadlines?

Stockholders of Record.If you are a stockholder of record, you may vote by any of the following methods:

 

By Mail.You may submit your vote by completing, signing and dating your proxy card and returning it in the prepaid envelope so that it is received no later than May 29, 2018.24, 2021.

 

2


By Internet or Telephone.You may vote your shares by Internet or telephone, by following the instructions in your Notice. If you vote by Internet or telephone, you should not return your proxy card. These votes must be received by 11:59 P.M., Eastern Time, on May 29, 2018.24, 2021.

 

In Person at the Annual Meeting.You may vote your shares in person at the 20182021 annual meeting. Proxy cards will be available for you at the meeting, or you may bring the one provided to you, and deliver the completed and executed card to the inspector of election at the 20182021 annual meeting.

Beneficial Owners.If you are a beneficial owner of your shares, you should receive a Notice or voting instructions from the broker or nominee holding your shares. You should follow the instructions provided to you by your broker in order to properly advise them of your voting instructions. Shares held beneficially may be voted at the 20182021 annual meeting only if you obtain a legal proxy from your broker or nominee giving you the right to vote, and presenting that legal proxy together with your vote to the inspector of election at the 20182021 annual meeting.

Can I revoke or change my proxy?

Stockholders of Record.If you are a stockholder of record, you may revoke or change your proxy at any time before the final vote at the 20182021 annual meeting by:

 

signing and returning a new proxy card at a later date;

 

submitting a vote by telephone or the Internet at a later date;

 

attending the 20182021 annual meeting and voting in person; or

 

delivering a written revocation to our Corporate Secretary at the address of our principal executive offices provided to you in this proxy statement or toBroadridge Financial Services, 51 Mercedes Way, Edgewood, NY 11717, Attn: Vote Processing.

Beneficial Owners.If you are the beneficial owner of your shares, you must contact your broker or nominee holding your shares and follow their instructions for revocation or changing your proxy.

Your attendance at the 20182021 annual meeting will not automatically revoke your proxy unless you vote again at the 20182021 annual meeting.

Who will count the votes?

Broadridge Financial Solutions, Inc. has been engaged as our independent agent to receive and tabulate our stockholder votes and will act as our independent inspector of election who will certify the election results and perform any other acts required by the Delaware General Corporation Law.

How are stockholder proposals included in the proposals submitted to stockholders for voting? How is any other business voted on by stockholders?

Stockholders have the right to present proposals for inclusion in our proxy statement for consideration at our 20192022 annual meeting of stockholders. To be considered at our next annual meeting, you must submit your proposals, in addition to meeting other legal requirements, within the appropriate time periods, as set forth below. If you want to make a proposal for consideration at our 20192022 annual meeting and have it included in the Company’s proxy materials relating to our 20192022 annual meeting, we must receive your proposal at our principal executive office by no later than December 12, 2018,14, 2021, and such proposal must otherwise comply with Rule14a-8

(“ (“Rule14a-8”) of the Securities Exchange Act of 1934 (the “Exchange Act”) and other applicable SEC rules. If you want to make a proposal or nominate a director for consideration at our 20192022 annual meeting without having the proposal included in the Company’s proxy materials, you must comply with the then-current advanced notice provisions and other requirements set forth in our Third Amended and Restated Bylaws (“Bylaws”). Under our current Bylaws, our Corporate Secretary must receive such proposals for possible consideration at our 20192022 annual meeting at our principal executive offices no earlier than December 12, 2018January 25, 2022 and no later than January 11, 2019.February 24, 2022. However, if the date of the 20192022 annual meeting changes by more than 30 days from the first anniversary date of this year’s meeting, we will then provide notice of the new date of the 20192022 annual meeting in our earliest possible quarterly report on Form10-Q. If we do not receive your proposal or nomination by the appropriate deadline, then it may not be brought before the 20192021 annual meeting even if it meets the other proposal or nomination requirements.

3


We do not intend to bring any business before the 20182021 annual meeting other than the matters described in this proxy statement and have not been informed of any matters or proposals that may be presented at the meeting by stockholders. If, however, any other business should properly arise and be properly submitted for a vote at the 20182021 annual meeting, the persons appointed in the proxy have discretionary authority to vote in accordance with their best judgment.

Who is paying the cost of solicitation of proxies?

We will bear the cost of soliciting proxies. In addition to the solicitation of proxies by mail, solicitation may be made by our directors, officers and employees by other means, including telephone,e-mail or in person. No special compensation will be paid to directors, officers or employees for the solicitation of proxies. To solicit proxies, we may also request the assistance of banks, brokerage houses and other custodians, nominees or fiduciaries, and, upon request, will reimburse such organizations or individuals for their reasonable expenses in forwarding the Notice and other soliciting materials to beneficial owners and in obtaining authorization for the execution of proxies.

Do we provide for Electronic Delivery of Proxy Materials?

Pursuant to rules adopted by the SEC, we provide access to the proxy materials over the Internet. Accordingly, we are sending aNotice of Internet Availability of Proxy Materials(“Notice”)to our stockholders owning shares of our Common Stock on or about April 16, 2018.13, 2021. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. The Notice also contains instructions on how to request a paper copy of our proxy materials, including this proxy statement, our Annual Report on Form10-K for the fiscal year ended January 31, 20182021 (“fiscal year 20182021”), and a form of proxy card or voting instruction card. In addition, the Notice will provide stockholders with instructions on how to request to receive proxy materials in printed form by mail or bye-mail on an ongoing basis. A stockholder’s election to receive proxy materials by mail or bye-mail will remain in effect until the stockholder terminates such election. We encourage stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of the 20182021 annual meeting and lower the costs of printing and distributing our proxy materials. If you choose to receive future proxy materials bye-mail, you will receive ane-mail message each successive year with instructions containing a link to those materials and a link to the proxy voting website.

Our proxy materials are also available free of charge on our website atwww.conns.com, atwww.proxyvote.com, and at the SEC’s website atwww.sec.gov.

How can I find the result of the voting at the 20182021 annual meeting?

Preliminary voting results will be announced at the 20182021 annual meeting. Final results will be published in a current report on Form8-K or in our Form10-Q for the quarter ending April 30, 2018,2021, which will be posted on our website atwww.conns.com, under “Investor Relations.”

4

PROPOSALS FOR STOCKHOLDER ACTION


PROPOSAL ONE:

ELECTION OF DIRECTORS

Number of Directors to be Elected

Our Board currently consists of ten director positions and we currently have eight members on our Board. We intend for the two vacancies to remain until our Board of Directors desires to fill such vacancies or reduce the size of the Board. At this time the Board of Directors believes that eight is the appropriate number of directors and does not intend to fill the two director vacancies. The eight directors to be elected at the 20182021 annual meeting will hold office until the 20192022 annual meeting of stockholders, or until their respective successors have been elected and qualified or earlier upon their death, resignation or removal. You may not vote for a greater number of directors than those nominated.

Criteria for Nomination to the Board of Directors.Those persons nominated to our Board of Directors are selected by the nominating and corporate governance committee of our Board (the “Nominating and Corporate Governance Committee”) in accordance with the committee’s charter, our certificate of incorporation (“Certificate of Incorporation”) and Bylaws, our Corporate Governance Guidelines, and the criteria determined by the Board for our director candidates. In considering the nomination of the directors identified below to serve until the 20192022 annual meeting, the Nominating and Corporate Governance Committee sought and considered individuals with strong personal reputations and experience in business and other areas that are relevant and important to the financing, strategy and operations of the Company, as well as financial expertise to qualify as a “financial expert” for our Audit Committee. Each nominee for election as a director at the 20182021 annual meeting holds or has held senior executive positions in organizations providing such background and expertise, and each has the necessary business and financial experience sought by the Company in those areas, including strategic and financial planning, public company financing and reporting, compliance, risk management and leadership. Each of the director nominees also has experience of serving on boards or in senior executive management of publicly held companies or governmental services requiring strong business and leadership acumen and implementation.

The Nominating and Corporate Governance Committee also considered and believes that each of the director nominees has valuable personal and business attributes that have and will continue to be valuable to the Company in their advice and guidance to executive management of the Company. The Nominating and Corporate Governance Committee takes into account in its consideration diversity in range of backgrounds, perspectives and experience of the individuals it recommends for nomination to our Board of Directors. Information on the specific experience of each nominee can be found under the caption “Board of Directors – Board of Director Nominees for 201820212019.2022.

Board Nominees

Our Board of Directors met in March 20182021 and considered the candidates for nomination for election to the Board at the 20182021 annual meeting. The Nominating and Corporate Governance Committee, consisting of three independent members of the current Board of Directors, recommended that the full Board nominate the following individuals forre-election to the Board of Directors at the 20182021 annual meeting.

In making these recommendations, the Nominating and Corporate Governance Committee considered the experience, qualifications, attributes and skills of each of the nominees as described above and the requirements and qualifications discussed under “Board of Directors- Nomination Policies and Procedures.” Based on this recommendation, our Board of Directors has nominated the following individuals to be elected by the stockholders at the 20182021 annual meeting.

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Name

  

Position

  

Age

  

Term of Office

  

Committee Membership

James H. Haworth

  Independent Director  5659  March 2016 - Current  

Compensation Committee

 

Nominating and Corporate Governance Committee

Kelly M. Malson

Sue E. Gove  Independent Director  4762  August 2012 –March 2020 - Current  

Audit Committee (Chair – Current)

(Financial Expert)

Credit Risk Committee

 

Nominating and Corporate Governance Committee

Bob L. Martin

  Lead Independent Director  6972  September 2003 - Current  

Nominating and Corporate Governance Committee (Chair)

 

Compensation Committee (Chair)

Douglas H. Martin

  Director  6467  February 200 –2003 - Current  

Credit Risk Committee

Compliance Committee

Norman L. Miller

  President, Chief Executive Officer and Chairman of the Board  5760  September 2015 - Current  

Compliance Committee

(Chair)

William E. Saunders, Jr.

  Independent Director  4447  August 2014 - Current  

Audit Committee (Financial Expert)

 

Credit Risk Committee (Chair)

 

Compliance Committee

William (David) Schofman

  Independent Director  4649  May 2012 - Current  Compensation Committee

Oded Shein

  Independent Director  5659  March 2016 - Current  

Audit Committee (Chair – Incoming)(Chair)

(Financial Expert)

Credit Risk Committee

Compliance Committee

Ms. Malson currently serves as the Chair of the Audit Committee until the 2018 annual meeting and Mr. Shein has been nominated to serve as Chair of the Audit Committee following the 2018 annual meeting.

Each director nominee currently serves as a member of the Board, each having been elected at our 20182020 annual meeting and served on the Board of Directors throughout fiscal year 2018.2021.

Those nominees identified in the table above as “independent director” have been determined by our Board to be independent under NASDAQ rules. All nominees have consented to serve as directors. The Board has no reason to believe that any of the nominees will be unable or unwilling to act as a director. In the event any nominated director is unable to stand for election, the Board of Directors may either reduce the size of the Board or designate a substitute.

For biographical information and the experience, qualifications, attributes and skills of each director nominee that the Nominating and Corporate Governance Committee and our Board of Directors considered to determine that such nominee should serve as one of our directors, please refer to the section captioned “Board of Directors – Board of Director Nominees for 201820212019,2022,” below.

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Each director nominee will be elected by the vote of a majority of the votes cast with respect to such director nominee. This means the number of votes cast “for” a director nominee must exceed 50% of the votes cast with respect to that director nominee (excluding abstentions and brokernon-votes). Each director nominee has tendered his or her resignation from the Board, which shall be effective only in the event that (i) the votes cast “for” such director nominee are equal to or less than 50% of the votes cast with respect to that director nominee, and (ii) the Board of Directors accepts such resignation. The Nominating and Corporate Governance Committee will make a recommendation to the Board of Directors whether to accept any resignation in the event any director nominee fails to receive over 50% of the votes cast “for” such director nominee. The Board of Directors will then consider the recommendation and publicly disclose its decision within 90 days after the certification of the election results.

The Board of Directors Unanimously Recommends That You Vote “FOR” the Election of Each of the Eight Board Nominees.

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PROPOSAL TWO:

RATIFICATION OF THE SELECTION OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

Ernst & Young LLP served as our independent registered public accounting firm for fiscal year 2018.2021. The Audit Committee has appointed Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2019.2022. Our Board of Directors has further directed that we submit the selection of our independent registered public accounting firm for ratification by the stockholders at the 20182021 annual meeting. Stockholder ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm is not required by our Bylaws or otherwise. However, the Board is submitting the selection of Ernst & Young LLP to the stockholders for ratification, on an advisory, non-binding basis, as a matter of good corporate practice. The Audit Committee believes it to be in the best interests of our stockholders to retain Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2019.2022. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain Ernst & Young LLP. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent public accounting firm at any time during the year if it determines that such a change would be in our best interests and those of our stockholders. The Audit Committee annually reviews the performance of our independent public accountants and the fees charged for their services. The Audit Committee anticipates, from time to time, obtaining competitive proposals from other independent public accounting firms for our annual audit. Based upon the Audit Committee’s analysis of this information, we will determine which independent public accounting firm to engage to perform our annual audit each year. Representatives of Ernst & Young LLP will attend the 20182021 annual meeting and will be available to respond to appropriate questions that may be asked by stockholders. These representatives will also have an opportunity to make a statement at the meeting if they desire to do so.

The Board of Directors and the Audit Committee Recommend That You Vote “FOR” the Ratification of Ernst & Young LLP as Our Independent Registered Public Accounting Firm.

Principal Accounting Firm Fees and Services

Fees for professional services rendered by Ernst & Young LLP to the Company during the fiscal years ended January 31, 20182021 and 20172020 in each of the following categories, including related expenses, are:

 

  Fiscal Years Ended
January 31,
   Fiscal Years Ended
January 31,
  2018   2017   2021  2020

Audit

  $1,229,401   $1,205,355   $1,694,883  $1,777,298

Audit-Related Fees

  $210,000   $131,039   $90,000  $180,000

Tax Fees

   —      —     $107,991  —  

All Other Fees

   —      —     —    —  

Audit fees: Consists of fees for professional services rendered for the annual audit of the Company’s consolidated financial statements, including the audit of internal control over financial reporting, reviews of the interim financial statements included in the Company’s Quarterly Reports on Form10-Q and work performed to support the Company’s debt and equity issuances, including SEC registration statements and filings and the issuance of consents.

Audit-related fees: Fees for fiscal year 2018years 2021 and fiscal year 20172020 consist of work performed to support the Company’s securitization transactions.

Tax fees: Consists of fees billed for professional services related to tax compliance, tax advice, and other tax planning services and advice. There were none of these services performed in fiscal year 2017 or in fiscal year 2018.

All Other Fees: Consists of fees billed for all other services and are unrelated to specific audit or audit-related services described above. There were none of these services performed in fiscal year 2017years 2021 or fiscal year 2018.2020.

Our Audit Committee charter requirespre-approval of all services to be rendered by our independent auditors. All of the audit, audit-related fees, tax fees, and all other fees were approved by our Audit Committee for the fiscal years ended January 31, 20182021 and 2017.2020. The Audit Committee determined that no services rendered by our outside auditors during fiscal year 20182021 were prohibited under the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). In addition, the Audit Committee has considered whether Ernst & Young LLP’s

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provision of services, other than services rendered in connection with the audit of our annual financial statements and reviews of our financial statements included in our Quarterly Reports on Form10-Q during fiscal year 2018,2021, is compatible with maintaining Ernst & Young LLP’s independence and has determined that such services rendered met the requirements of independence under applicable SEC rules.

AUDIT COMMITTEE REPORT

The Committee

Our Board of Directors established the Audit Committee to be responsible for the appointment, compensation, retention and oversight of the work of our independent auditors and to oversee our (i) financial reporting process; (ii) internal audits, internal control policies and procedures; (iii) implementation and compliance with Sarbanes-Oxley Section 404 requirements and authorities; and (iv) financial, tax, and risk management policies. The Audit Committee is composed of three independent,non-employee directors and operates under a written charter, a copy of which is published on our website atwww.conns.com under “Investor Relations – Corporate Governance.” The Audit Committee has prepared the following report on its activities with respect to our financial statements for fiscal year 2018.2021.

Review and Discussion

Management is responsible for our financial reporting process (including our system of internal controls) and for the preparation of Conn’s, Inc.’s consolidated financial statements in accordance with generally accepted accounting principles. Ernst & Young LLP, our independent registered public accounting firm, is responsible for auditing those financial statements and for attesting to the effectiveness of our internal control over financial reporting. It is the Audit Committee’s responsibility to monitor and review these processes. The members of the Audit Committee are not employees of the Company and do not represent themselves to be, or to serve as, accountants or auditors by profession or experts in the field of accounting or auditing.

In connection with the preparation of our audited financial statements for fiscal year 2018,2021, the Audit Committee:

 

reviewed and discussed our Annual Report on Form10-K, including our audited consolidated financial statements and Management’s Report on Internal Control over Financial Reporting for fiscal year 2018,2021, with management;

 

discussed with Ernst & Young LLP the matters required to be discussed by auditing standards, including Auditing Standard No. 16, as adopted by the Public Company Accounting Oversight Board (“PCAOB”); and

discussed with Ernst & Young LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the SEC; and

 

received the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the PCAOB concerning independence, and discussed with Ernst & Young LLP its independence, including whether Ernst & Young LLP’s provision ofnon-audit services to the Company is compatible with the auditors’ independence.

The Audit Committee meets separately with our independent auditors to discuss the results of their examinations, their evaluations of our internal controls and the overall quality of our financial reporting.

Recommendation

Based on the review and discussion referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form10-K for fiscal year 2018,2021, for filing with the SEC.

AUDIT COMMITTEE:

Oded Shein, Chair

William E. Saunders, Jr.

Sue E. Gove

Kelly M. Malson, Chair9

William E. Saunders, Jr.

Oded Shein


PROPOSAL THREE:

ADVISORY VOTE FOR APPROVAL OF THE COMPENSATION

OF OUR NAMED EXECUTIVE OFFICERS

The Dodd-Frank Wall Street Reform and Consumer ProtectionIn accordance with Section 14A of the Exchange Act, of 2010 enableswe are asking our stockholders to vote to approve or disapprove, in aon an advisory, non-binding advisory vote,basis to approve the compensation of our named executive officers and this vote is provided as required pursuant to Section 14A of the Exchange Act.for fiscal year 2021. At our annual meeting held on May 31, 2017, our stockholders again recommended that we hold the advisory vote for approval of the compensation of our named executive officers annually. Our Board of Directors has agreed with this advisory vote and has determined to hold this vote annually. At our 20172018, 2019 and 2020 annual meeting, 92%meetings, 83.8%, 60.5%, and 81.7% of the votes cast, respectively, were in favor of the advisory resolution on our executive compensation.

As described in the “Compensation Discussion and Analysis” section of this proxy statement, our compensation program for our named executive officers is designed to (i) motivate and reward performance that increases our stockholder value, including individual measured goals and objectives, (ii) attract and retain executive talent by offering competitive compensation opportunities, and (iii) build and encourage ownership of shares of our Common Stock. Toward these goals, our executive compensation program has been designed and administered to reward our named executive officers based on our financial and operating performance, their individual performance, and to align their interests with those of our stockholders. In addition, our executive compensation program is designed to encourage the long-term commitment of our named executive officers to the Company. We believe that our executive compensation program, which primarily consists of a base salary, an annual performance-based cash bonus opportunity, and time and performance-based equity awards, promotes these objectives. Please read the section captioned “Compensation Discussion and Analysis” for a discussion of these objectives, the determination of and the elements of compensation and awards for our executive officers, as well as the elements paid and awarded during our fiscal year 2018.2021.

In applying these objectives, the compensation committee of our Board of Directors (“Compensation Committee”) relied upon:

 

direct input from our stockholders through stockholder engagement during the latter half of fiscal 2020 and into fiscal 2021;

input and recommendations received from our Chairman and Chief Executive Officer regarding the performance of each executive officer (other than the Chief Executive Officer), each of whose performance is analyzed by the Compensation Committee, the documentation provided to support the attainment by individual executive officers of their respective goals and objectives, and areas of responsibilities and expectations for future performance and goal attainment;

 

publicly available information with respect to the executive compensation practices of certain public companies in our industry and peer groups;

 

the analysis and recommendations regarding our compensation programs for our executive officers composed by Frederic W. Cook & Co., the Compensation Committee’s independent compensation consultant; and

 

the knowledge of the individual members of the Compensation Committee of industry compensation practices and programs.

For the reasons discussed above, the Board of Directors unanimously recommends that stockholders vote in favor of the following resolution:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 ofRegulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion contained in this proxy statement,the 2021 Proxy Statement, is hereby APPROVED on anon-binding, advisory basis.”

While the resolution isnon-binding, the Board of Directors values the opinions that stockholders express in their votes and in any additional dialogue. ItThe Board of Directors will consider the outcome of the vote and those opinions when making future compensation decisions. To the extent there is any significant vote against the named executive officers’ compensation, the Compensation Committee will consider our stockholders’ advisory vote, and evaluate whether, and to what extent, any actions are necessary to address our named executive officers’ compensation program.

The Board of Directors Unanimously Recommends That You Vote “FOR” the Approval, on aNon-Binding Advisory Basis, of the Compensation of Our Named Executive Officers.

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BOARD OF DIRECTORS

Board of Director Nominees for 2018 – 20192021 - 2022

Norman L. Miller was appointed as our President and Chief Executive Officer, and to our Board of Directors, effective September 7, 2015. Mr. Miller was appointed as our Chairman of the Board in May 2016. In March 2018, Mr. Miller was nominated to serve as chair of the newly formed Compliance Committee.

Prior to joining the Company, Mr. Miller most recently served as the Senior Vice President and President, Automotive at Sears Holdings, which, operatesduring his service, operated over 700 Sears Auto Center locations. Previously, he served as President and Chief Operating Officer of DFC Global Corp (formerly Dollar Financial Corp) from 2007 to 2014. Prior to his employment at DFC Global Corp, Mr. Miller served as Group President, Sports and Entertainment unit at ARAMARK, where he worked for a decade. He was named to the role after serving as the President of ARAMARK’s Correctional Services unit from 2002 to 2003. Mr. Miller’s career also includes nine years with Nestle, Kraft General Foods and PepsiCo, serving in management positions in sales, marketing and operations. Mr. Miller received a Bachelor’sBachelor of Science degree from the United States Military Academy at West Point.

Mr. Miller has extensive financial knowledge and provides valuable guidance to our Board of Directors in overseeing various aspects of our operations. In addition, his prior experience as an executive of Sears Holdings and DFC Global Corp provides valuable experience from both the retail and credit operations perspective. His service to our Company as our Chairman, Chief Executive Officer and President provides Mr. Miller with additional and particular knowledge of our Company that he brings to our Board of Directors.

Bob L. Martinhas served as a director since September 2003 and was appointed as our Lead Independent Director in August 2012. Mr. Bob Martin was elected as an Operating Partner of The Stephens Group LLC, a family-owned investment company in March 2012, and currently holds such position. Mr. Bob Martin is also the Chief Executive Officer (part-time) of Mcon Management Services, Ltd., a consulting company, since 2002. He was previously a consultant to that entity. Mr. Bob Martin has over 35 years of retailing and merchandising experience. Prior to retiring from the retail industry in 1999, he headed the international operations ofWal-Mart International, Inc. for 15 years. From 1968 to 1983, Mr. Bob Martin was responsible for technology services for Dillard’s, Inc. Mr. Bob Martin has also served as a director of Dillard’s, Inc., Sabre Holdings Corporation, Furniture Brands International and Guitar Center, Incorporated. Mr. Bob Martin currently serves as Executive Chairman on the board of directors of Gap, Inc. He has experience as chairman of a corporate governance and compensation committee, and has been a member of an audit committee, in each case, of publicly held companies. Mr. Bob Martin attended South Texas University and holds an Honorary Doctorate degree from Southwest Baptist University.

Mr. Bob Martin was selected to serve on our Board of Directors due to his extensive experience in information technology and the retail industry, as well as his service and experience on a host of other public company boards. While Mr. Bob Martin is age 72, and pursuant to the Company’s Corporate Governance Guidelines in effect through March 2021 would not normally stand for re-election at such age, the Board discussed the qualifications and importance of Mr. Bob Martin to the Company and resolved to nominate him for further service and further resolved to increase the retirement age as set forth in the Corporate Governance Guidelines to age 75. Mr. Bob Martin’s experiences contribute to our Board of Directors’ understanding of innovations and issues affecting information technologies and retail strategies in our industry and marketplace. Mr. Bob Martin is the chair of the Nominating and Corporate Governance Committee and the Compensation Committee.

Kelly M. MalsonSue Gove was appointed as a director in August 2012March 2020 and chair of the Audit Committee in November 2012. Ms. Malson will serve as Audit Committee chair until the 2018 annual meeting. Ms. Malson was also appointed to the Company’s Audit Committee and Credit Risk Committee. In March 2021, Ms. Gove was also appointed to the Nominating and Corporate Governance Committee in December 2015.Committee. Ms. MalsonGove is President of Excelsior Advisors, LLC, a retail consulting and advisory firm, and served as a Senior Vice President, Chief Financial Officer and Treasurer of World Acceptance CorporationAdvisor to Alvarez & Marsal, a corporate consulting firm from May 2009 until stepping down from those positions in December 2013. She remained employed by World Acceptance Corporation from December 2013 until her retirement in February 2014.March 2017 to March 2019. Prior to that,founding Excelsior Advisors in August 2014, she heldwas the titlesPresident and Chief Executive Officer of ViceGolfsmith International Holdings, Inc., an American golf specialty retailer, from October 2012 to April 2014 and President, andfrom February 2012 to April 2014. Ms. Gove also served Golfsmith as Chief Operating Officer from September 2008 to October 2012, as Chief Financial Officer from March 2006 until May 2009 to July 2012, and as Executive Vice President of Internal Audit from September 20052008 to March 2006 at World Acceptance Corporation.February 2012. From 1980 to 2008, Ms. Malson served as Finance Compliance Manager for ITRON, Inc., IEM Unit from 2004 to 2005. Prior to 2004, she served in variousGove held senior level positions with KPMG, LLPnational retailers and Arthur Andersen LLP.consulting firms in the retail sector. Ms. MalsonGove currently serves on the boards of Bed Bath & Beyond Inc., an omni-channel retailer of goods and services that help make a house a home since 2019, and IAA, Inc., a leading North American salvage auto auction since July 2019. Ms. Gove obtained her Bachelor’s DegreeBachelor of Business Administration in AccountancyAccounting from Southern Illinoisthe University in 1993.of Texas, Austin.

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Ms. Malson was selected to serve on our Board becauseGove brings significant knowledge of her extensive experiencefinancial, consumer finance and operational matters in the financialconsumer retail industry, her executive positions at World Acceptance Corporation, a consumer finance business, and her substantive knowledge aboutto the variety of issues related to our business.Board.

Douglas H. Martinserved as a director of the predecessor to the Company beginning in 1998 and was appointed as one of our directors in February 2003. Mr. Doug Martin is ana Senior Executive Vice President of Stephens Inc., an investment bank, where he has been employed since 1981. He is responsible for the investment of the firm’s capital in private companies. Mr. Doug Martin serves as a member of the board of directors of numerous privately held companies. He received his B.A.Bachelor of Arts in Physics and Economics from Vanderbilt University and his M.B.A.Master of Business Administration from Stanford University.

Mr. Doug Martin brings to our Board of Directors diverse experience in investment analysis and valuation and has extensive experience and insights into debt and equity financing and structuring, capital markets and capitalization strategies. Mr. Doug Martin brings historical working knowledge of our Company to our Board of Directors due to his long tenure and relationship with us. Mr. Doug Martin’s relationship with Stephens, Inc., which owns a substantial amount of the Company’s Common Stock, also helps the Board of Directors to have more direct insight into how its decisions impact our stockholders. Mr. Doug Martin was a member of each of the Credit Risk Committee and Compliance Committee in fiscal year 20182021 and will remain as a member of each of the Credit Risk Committee and the Compliance Committee in fiscal year 2019.2022.

There is no relation between Mr. Bob Martin and Mr. Doug Martin.

William E. Saunders, Jr. was appointed as a director in August 2014 and has served on the Company’s Audit Committee since his appointment. He has also chaired the Company’s Credit Risk and Compliance Committee sincefrom the committee’s formation in December 2014. In2014 until it became two separate committees, the Credit Risk Committee and the Compliance Committee in March 2018, when Mr. Saunders was then nominated to serve onas chair of the newly formedCredit Risk Committee and as a member of the Compliance Committee.Committee, both roles he continues to serve in today. Mr. Saunders has served as the Chief Executive Officer of Community Choice Financial Inc., a leading retailer of alternative consumer financial services products since June 2008, and Chairman of its Board of Directors since May 2014, after joining the company as its Chief Financial Officer in March 2006. Prior to joining Community Choice Financial (previously CheckSmart Financial Holdings), Mr. Saunders was a Vice President for Stephens Inc., an investment bank, from 2004 to 2006 and, prior to that was an associate at Houlihan Lokey, an investment bank, SunTrust Equitable Securities, an investment bank, and Arthur Andersen, an accounting firm. He also serves on the board of FactorTrust, a global credit reporting agency. Mr. Saunders holds a B.S.Bachelor of Science in Business with Special Attainment in Accounting and Commerce from Washington & Lee University and is a certified public accountant in the State of Georgia.

Mr. Saunders brings extensive investment banking, finance, management, credit and regulatory experience to our Board.

William (David) Schofman was appointed as a director in March 2012. Mr. Schofman is an active executive, investor and board member for several companies including: PureWRX, Inc., a value-added distributor and reseller of information technology hardware; Coro Health, LLC, a new media healthcare company and CPO Commerce, Inc., the largest online tool retailer. In addition, Mr. Schofman participates in several other business ventures through his private equity and management services business, AnderSchof Investments, LLP. Mr. Schofman previously served as the Chief Executive Officer of Callaway Golf Interactive from June 2004 to September 2007, and as the Executive Vice President Global Ecommerce of Callaway Golf from 2004 to 2007. Mr. Schofman was theco-founder and CEO of FrogTrader from 2000 until 2004, before the Company was sold to Callaway Golf. Prior to that, Mr. Schofman was theco-founder and CEO of International Golf Outlet from 1995 until 1999, which was sold to CBS Sportsline. Mr. Schofman graduated from the University of Texas at Austin in 1994.

Mr. Schofman has varied and valuable experience in marketing, electronic media,E-commerce, retail operations, branding and merchandising strategies. Having built and operated several business ventures, Mr. Schofman brings invaluable background to our Board of Directors. He also brings to our Board of Directors a high level of executive experience due to his serving as chief executive officer of businesses, as well as his serving as a director of and advisor to other companies. Mr. Schofman serves on our Compensation Committee.

Oded Shein was appointed as a director in March 2016 and was appointed to the Company’s Audit Committee and Credit Risk and Compliance Committee concurrent with his joining the Board. Mr. Shein has beenwas nominated to serve as chair of the Audit Committee for fiscal year 2019.2020 and will continue to serve in that role. In March 2018, the Credit Risk and Compliance Committee became two separate committees, the Credit Risk Committee and the Compliance Committee. Mr. Shein was then nominated to serve on both the newly formedCredit Risk Committee and the Compliance Committee, roles he no longer serves. In March 2020, Mr. Shein was appointed to serve on the Nominating and Corporate Governance Committee and served in such role through March 2021. Mr. Shein continues to serve as chair of the Audit Committee. Mr. Shein has served as the Chief Financial Officer of Shift Technologies, Inc. since March 2021. Mr. Shein served as Chief Financial Officer of The Fresh Market, Inc. from August 2018 to September 2020. On September 8, 2020,

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Mr. Shein, as required by our Corporate Governance Guidelines, submitted his conditional resignation to the Board due to his resignation as Chief Financial Officer of The Fresh Market, Inc. On March 19, 2021, Mr. Shein, also as required by our Corporate Governance Guidelines, submitted his conditional resignation to the Board due to his new position as Chief Financial Officer of Shift Technologies, Inc. The Nominating and Corporate Governance Committee considered both conditional resignations and in both cases the Board accepted the Nominating and Corporate Governance Committee’s recommendation to decline Mr. Shein’s conditional resignation. Mr. Shein previously served as Executive Vice President and Chief Financial Officer of Stage Stores sincefrom January 2011.2011 to August 2018. From July 2004 until January 2011, Mr. Shein served in various financial positions at Belk, Inc., including as its Vice President, Finance and Treasurer. Prior to joining Belk, Inc., Mr. Shein served as the Vice President, Treasurer of Charming Shoppes, Inc. Mr. Shein holds a B.B.A.Bachelor of Business Administration in Information Systems from Baruch College and an M.B.A.a Master of Business Administration in Finance from Columbia University.

Mr. Shein brings significant knowledge of financial and operational matters in the retail industry, including his experience as a public company Chief Financial Officer, to the Board.

James H. Haworth was appointed as a director in March 2016 and was appointed to the Company’s Compensation Committee and Nominating and Corporate Governance Committee concurrent with his joining the Board. In August 2016, Mr. Haworth joined Outdoor Cap, a privately held company in Bentonville, Arkansas, as President and Chief Executive Officer. Prior to Outdoor Cap, Mr. Haworth served as Chairman and Chief Executive Officer of Professional Bull Riders Inc. from 2011 to 2016. From 2010 through 2011 he served as Executive Vice President and President, Retail Services for Sears Holding Corporation. Prior to that, he served as Chairman, President and Chief Executive Office for Chia Tai Enterprises International Limited & CP Lotus, an investment holding company principally engaged in the operation of shopping centers in China, from 2006 to December 2009. Mr. Haworth is also the founder and President of Business Decisions Inc., a consulting firm specializing in strategic product marketing for the retail, merchandising and supply chain industries. Previous to Business Decisions Inc., Mr. Haworth spent 20 years withWal-Mart Stores, Inc., in roles of increasing responsibility including Executive Vice President of Operations for Sam’s Club and Executive Vice President and Chief Operating Officer,Wal-Mart Stores, Inc. Mr. Haworth received a Bachelor’sBachelor of Science in Business Administration from Central Missouri State University.

Mr. Haworth brings extensive leadership experience in retail and strategic planning through his positions with other public companies to our Board.

If elected these director nomineesby our stockholders, each nominee will serve one year terms, which will expirefor a one-year term expiring at our 20192022 annual meeting of stockholders. Each director will hold office until his or her successor has been elected and qualified or until the director’s earlier resignation or removal.

Nomination Policies and Procedures

The goal of our Board has been, and continues to be, to identify nominees for service on the Board of Directors who will bring diverse and varied perspectives and skills from their professional and business experience, including financial and accounting experience, as appropriate. In carrying out its function to nominate candidates for election to our Board, the Nominating and Corporate Governance Committee considers the mix of skills, experience, character, commitment, and diversity – diversity being broadly construed to mean a variety of opinions, perspectives, experiences and backgrounds, such as gender, race and ethnicity differences, as well as other differentiating characteristics – all in the context of the requirements of our Board at the time of such consideration. The Nominating and Corporate Governance Committee assesses the effectiveness of its charter annually in connection with the nomination of directors for election at the annual meeting of stockholders. In addition, our Corporate Governance Guidelines, which are available on our website atwww.conns.com under “Investor Relations – Corporate Governance,” contain provisions regarding the identification and selection of our director nominees.

The Nominating and Corporate Governance Committee assists the Board in fulfilling its responsibilities by (1) identifying individuals believed to be qualified to become members of the Board, consistent with Board approved criteria, (2) recommending candidates to the Board for election or reelection as directors, including director candidates submitted by our stockholders, and (3) overseeing, reviewing and making periodic recommendations to the Board concerning our corporate governance policies. The Nominating and Corporate Governance Committee does not have a specific written policy or process regarding the nominations of directors, nor does it maintain minimum standards for director nominees other than as set forth in its charter and the Company’s Corporate Governance Guidelines.

The Nominating and Corporate Governance Committee will consider candidates for nomination proposed by stockholders so long as they are made in accordance with the provisions of Section 2.142.15 of our Bylaws. Section 2.142.15 of our Bylaws requires that a

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stockholder provide written notice to our Secretary no later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the anniversary date of the mailing of the proxy statement for the immediately preceding annual meeting of the stockholders. The notice to our Secretary must set forth (a) as to each person whomBylaws specify the stockholder proposes to nominate for election orre-election as a director, information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serve as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of such business, the reasons for conducting such business at the meeting and any material interest in the business by the stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c)requirements as to the stockholder giving the noticeform and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address, as they appear on the Company’s books,substance of such stockholder and

beneficial owner; and (ii) the class and numbernotice. Details of sharessuch provisions of the Company that are owned beneficially and heldBylaws may be obtained by any stockholder from the Secretary of record by such stockholder and such beneficial owner.the Company. Notwithstanding this procedure,the above, the Board may, in its discretion, exclude from any proxy materials sent to stockholders any matters that may properly be excluded under the Exchange Act, SEC rules or other applicable laws. The Nomination and Corporate Governance Committee treats recommendations for directors that are received from the Company’s stockholders equally with recommendations received from any other source, so long as the recommendations comply with the procedures for stockholder recommendations set forth in the Company’s Bylaws, as outlined above.

The charter of the Nominating and Corporate Governance Committee sets forth the minimum requirements for a person to be qualified to be a member of the Board of Directors, which are that a person must (i) be an individual of the highest character and integrity and have an inquiring mind, a vision and a willingness to ask hard questions, and the ability to work well with others; (ii) be free of any conflict of interest that would violate any applicable law or regulation or interfere with the proper and reasonable performance of the responsibilities of a director; (iii) be willing and able to devote sufficient time to the affairs of the Company and be diligent in fulfilling the responsibilities of a director and Board committee member (including developing and maintaining sufficient knowledge of the Company and its industry; reviewing and analyzing reports and other information important to the Board and committee responsibilities; preparing for, attending and participating in Board and committee meetings; and satisfying appropriate orientation and continuing education guidelines); and (iv) have the capacity and desire to represent the balanced, best interest of the stockholders as a whole and not primarily a special interest group or constituency. The Nominating and Corporate Governance Committee evaluates whether certain individuals possess the foregoing qualities and recommends to the Board for nomination candidates for election orre-election as directors at the annual meeting of stockholders, or if applicable, at a special meeting of stockholders. This process is the same regardless of whether the nominee is recommended by our Board or by one of our stockholders.

As discussed above with respect to the nomination of Mr. Bob Martin to the Board, in March 2021, the Board resolved to increase the retirement age as set forth in the Corporate Governance Guidelines from age 72 to age 75.

Independent Board Composition

NASDAQ requires that a majority of the board of directors of a listed company be “independent.” NASDAQ’s rules provide that an independent director is a person other than an officer or employee of the Company or its subsidiaries or any other individual having a relationship that, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has determined that each of Ms. Malson,Gove, Mr. Bob Martin, Mr. Saunders, Mr. Schofman, Mr. Shein and Mr. Haworth is “independent” as defined under applicable SEC and NASDAQ rules. Mr. Bob Martin was appointed our Lead Independent Director in August 2012 and has since served as our Lead Independent Director.

The independent directors of the Board held executive sessions at each regular meeting of the Board of Directors during fiscal year 2018.2021.

At the meeting of the Nominating and Corporate Governance Committee held in March 2018,2021, the Committee discussed the relationships of Mr. Bob Martin with The Stephens Group, LLC, and whether his relationship or ownership interest impacted his ability to exercise independent judgment in carrying out his responsibility as a director. The Committee discussed the current position of Mr. Bob Martin with The Stephens Group, LLC, and the fact that the position is not substantively different from the consulting work that Mr. Bob Martin has done in previous years for The Stephens Group, LLC, the continuous exercise of independent judgment by Mr. Bob Martin since his election to our Board in 2003, and his lack of control of voting of Common Stock owned by The Stephens Group, LLC or any of its affiliates, includingSG-1890 LLC. The Committee has determined that Mr. Martin is properly considered an independent director and recommended to the Board of Directors that it approve Mr. Bob Martin’s independence as defined under the SEC and the NASDAQ rules.

At its meeting in March 2018,2021, our Board of Directors approved the independence of Mr. Bob Martin.

Board Meetings

During fiscal year 2018,2021, the Board of Directors held seventwenty-four meetings. With the exception of one director, eachEach director attended 75%80% or more of all meetings of the Board and the committees on which such director served during fiscal year 2018. Mr. Schofman was unable to attend Board and Committee meetings at the 75% attendance threshold. Mr. Schofman provided prior notice of his unavailability to attend meetings to the Board.

2021.

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Policy Regarding Director Attendance at the Annual Meeting of Stockholders

It is our policy that each member of the Board of Directors is encouraged to attend our annual meeting of stockholders. All of our directors serving at the time of last year’s annual meeting attended our May 31, 201728, 2020 annual meeting of stockholders.

Committees of the Board

Audit Committee

The Audit Committee is responsible for the appointment, compensation, retention and oversight of the work of our independent auditors. It also approves audit reports and plans, accounting policies, audit fees and certain other expenses. In connection with the rules adopted by the SEC and NASDAQ, we adopted a written charter for the Audit Committee, which is posted on our website atwww.conns.com under “Investor Relations – Corporate Governance.” The Audit Committee reviews and reassesses the adequacy of the written charter on an annual basis.

The current members of our Audit Committee are Mr. Shein, Mr. Saunders, and Ms. Malson, who was appointed as chairChair of the Audit Committee in November 2012.May 2018, Mr. Saunders and Ms. Malson will serve as Audit Committee chair until the 2018 annual meeting. Mr. Shein has been nominated to become chair of the Audit Committee at the 2018 annual meeting.Gove who was appointed on March 24, 2020. The Audit Committee held foursix meetings during fiscal year 2018.2021. The Board has determined that Mr. Shein, Ms. Malson,Gove and Mr. Saunders are “audit committee financial experts” as described in Item 407(d)(5) of RegulationS-K. In addition, each of the members of the Audit Committee is “independent” as defined by the NASDAQ listing standards and Sarbanes-Oxley, as determined by our Board of Directors.

Compensation Committee

The Compensation Committee establishes, reviews and approves the compensation program for the Chief Executive Officer and other executive officers based upon recommendations by its independent compensation consultant. Our Chief Executive Officer does not play a role, nor does he make any recommendations in respect of, the determination of his own compensation. The Compensation Committee also evaluates the compensation plans, policies and programs of the executive officers of the Company and makes recommendations to the Board of Directors concerning such plans, policies and programs. ItIn addition, it advises the Board regarding compensation plans, policies and programs applicable tonon-employee directors for their services as members of our Board, and administers our stock option, stock purchase and other equity plans. The Compensation Committee also evaluates the competitiveness of our compensation and the performance of our Chief Executive Officer and other executive officers. In connection with rules adopted by the SEC and NASDAQ, the Company adopted a written charter for the Compensation Committee, which was amended by our Board in March 2014 to provide that, before engaging a compensation adviser (other thanin-house legal counsel), the Compensation Committee shall consider all factors that could affect the independence of such consultant, counsel or advisor as may be identified from time to time in the rules and regulations of the SEC and the listing standards of NASDAQ relevant to that adviser’s independence from management. A copy of the Compensation Committee charter, as amended, is posted on our website atwww.conns.com under “Investor Relations – Corporate Governance.”

The current members of the Compensation Committee are Mr. Bob Martin (Chair), Mr. Schofman and Mr. Haworth.

The Compensation Committee held fivefour meetings during fiscal year 2018.2021. All members of the Compensation Committee were determined by the Board of Directors to be independent directors, as defined by NASDAQ listing standards. Additional information on the Compensation Committee’s processes and procedures for consideration of executive compensation are addressed in the section of this proxy statement captioned “Compensation Discussion and Analysis” below.

Compensation Committee Interlocks and Insider Participation

For fiscal year 2018,2021, the Compensation Committee consisted of Mr. Haworth, Mr. Bob Martin and Mr. Schofman, each of whom our Board determined was independent in accordance with NASDAQ listing requirements. No member of the Compensation Committee during fiscal year 20182021 is or was formerly an officer or employee of the Company or any of its subsidiaries or was a related person in a related person transaction with the Company required to be disclosed under applicable SEC rules.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee assists the Board in identifying and recommending individuals for election or reelection as directors, including director candidates submitted by our stockholders, and advises the Board with respect to corporate governance policies and procedures. The Nominating and Corporate Governance Committee will periodically review and

15


make recommendations regarding our corporate governance policies and procedures, which are discussed in part below under the caption “Corporate Governance” and copies of which are posted on our website atwww.conns.com under “Investor Relations – Corporate Governance.” We adopted a written charter for the Nominating and Corporate Governance Committee, and a summary “corporate governance policies and procedures” which are posted on our website atwww.conns.com under “Investor Relations – Corporate Governance.”

The Nominating and Corporate Governance Committee is also responsible for overseeing a formal evaluation process to assess the composition and performance of the Board, each committee, and each individual director on an annual basis. The assessment is conducted to identify opportunities for improvement and skill set needs, as well as to ensure that the Board, committees, and individual members have the appropriate blend of diverse experiences and backgrounds and are effective and productive. As part of the process, each member of the Board completes a questionnaire that includes Board, committee and individual assessments. While results are aggregated and summarized for discussion purposes, individual responses are not attributed to any member and are kept confidential to ensure honest and candid feedback is received.

Members of the Nominating and Corporate Governance Committee are appointed by the Board. The members of the Nominating and Corporate Governance Committee serve until their successors are duly elected and qualified, and they may be removed by the Board of Directors in its discretion. Each member of the Nominating and Corporate Governance Committee is an independent director (who, for the avoidance of doubt, is not an employee of the Company or any of its subsidiaries).

Our Nominating and Corporate Governance Committee currently consists of Mr. Bob Martin (Chair), Ms. MalsonGove and Mr. Haworth.

All members of the Nominating and Corporate Governance Committee were determined by the Board to be “independent” as defined by the SEC and NASDAQ listing standards. The Nominating and Governance Committee held two meetingsone meeting during fiscal year 2018.2021.

Credit Risk and Compliance Committee

In December 2014, the Board established a Credit Risk and Compliance Committee. The Credit Risk and Compliance Committee is responsible for reviewing credit risk, underwriting strategy, compliance activities, the provision methodology, and monitoring trends in the Company’s loan portfolio. We adopted a written charter for the Credit Risk and Compliance Committee, which is posted on our website atwww.conns.com under “Investor Relations – Corporate Governance.” Our Credit Risk and Compliance Committee currently consists of Mr. Saunders (Chair), Mr. Doug Martin and Mr. Shein. The Credit Risk and Compliance Committee held nine meetings during fiscal year 2018. In March 2018, the Board approved the continuation of the Credit Risk Committee and the formation of a separate Compliance Committee. The Credit Risk Committee is responsible for reviewing credit risk, underwriting strategy, the provision methodology, and monitoring trends in the Company’s loan portfolio. We have adopted written charters for the Credit Risk Committee and Compliance Committee, which are posted on our website at www.conns.com under “Investor Relations – Corporate Governance.” Our Credit Risk Committee currently consists of Mr. Saunders (Chair), Mr. Doug Martin and Ms. Gove. The Credit Risk Committee held sixteen meetings during fiscal year 2021.

Compliance Committee

The Compliance Committee is responsible for reviewing the Company’s compliance activities and the Company’s compliance management system. We adopted a written charter for the Compliance Committee, which is posted on our website atwww.conns.com under “Investor Relations – Corporate Governance.” Our Compliance Committee will consistconsists of Mr. Miller (chair), Mr. Saunders and Mr. Shein.Doug Martin. The Compliance Committee held eleven meetings during fiscal year 2021.

Environmental, Social and Governance (ESG)

The Company is committed to making a difference throughout our communities and creating a sustainable future for our employees, consumers, investors, and other stakeholders. It is important to define our success beyond just financial growth and profitability and look at business practices that promote environmental, social and governance (ESG) issues. The Board continues to actively look for ways to improve our company and partners along these fronts and to be good corporate citizens. You can learn more about our ESG efforts at www.conns.com/esg.

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Compensation ofNon-Employee Directors

The Compensation Committee periodically reviews director compensation for service on the Board and for service on any Board committees and recommends director compensation and any changes to such compensation to the Board for approval. The Board annually reviews and approves director compensation for Board and committee service based on the recommendations of the

Compensation Committee. The Compensation Committee engagedpartners with Frederic W. Cook & Co. (“F.W. Cook”) to review the competitiveness of the compensation program for ournon-employee directors. Based on a review by F.W. Cook, in May 2014 the Compensation Committee recommended to the Board that the director compensation program be adjusted for fiscal year 2015 for Board and committee retainers and annual equity grants tonon-employee directors to align with median peer group compensation. For fiscal years 2016, 2017 and 2018, the Compensation Committee recommended no changes to the compensation program.on a regular basis. The following table summarizes the fiscal year 20182021 non-employee director compensation plan:program:

Fee

  

Fiscal
Year
2018

 

Annual Cash Retainer (1)

  $70,000 

Additional Annual Retainer for:

  

•  Lead Independent Director

  $20,000 

•  Audit Committee Chair

  $15,000 

•  Credit Risk and Compliance Committee Chair

  $10,000 

•  Compensation Committee Chair

  $10,000 

•  Nominating & Corporate Governance Committee Chair

  $7,500 

Annual Equity Awards (2)

  $75,000 

 

Fee

Annual Amount

Annual Cash Retainer (1)(2)

$80,000

Additional Annual Retainer for:

•  Lead Independent Director

$25,000

•  Audit Committee Chair

$20,000

•  Credit Risk Committee Chair

$15,000

•  Compliance Committee Chair

$10,000

•  Compensation Committee Chair

$15,000

•  Nominating & Corporate Governance Committee Chair

$10,000

Annual Equity Award (3)

$100,000

(1)

For fiscal year 2021, effective April 19, 2020, the Annual Cash Retainer was reduced by 25% for one quarter of the year (3 months) as a result of measures taken in response to the COVID-19 outbreak. The Annual Cash Retainer is paid at the beginning of the annual service period that commences immediately following our annual stockholders meeting.

(2)

In addition to the following fees,annual cash retainers and equity awards, the Company reimburses all directors for reasonable travel andout-of-pocket expenses incurred in connection with their duties as directors, including attendance at meetings.

(2)(3)

Annual equity awards issued under our 2011Non-Employee Director Restricted Stock Plan are granted on the first day following the date of the annual stockholders meeting, are payable in the form of restricted stock units (“RSUs”), are valued at the grant date, and fully vest on theone-year anniversary of the date of grant. The number of shares of restricted stockRSUs granted pursuant to each such RSU grant to the directors is determined by dividing the total dollar amount awarded by the closing price of the Company’s common stock on the date of grant.

In November 2017, the Compensation Committee approved, and the Board ratified, the stock ownership guidelines for non-employee directors to attain aggregate equity in Conn’s stock valued at four times the annual cash retainer before the five year anniversary of their appointment as non-employee directors. As of January 31, 2021, Messrs. Bob Martin, Doug Martin, Haworth, Shein, Schofman and Saunders met these ownership requirements, while Ms. Gove continues to make progress toward the ownership threshold as she is still within the five-year achievement period.

Directors who are also employees of the Company do not receive any compensation for service as a Board or Committee member. Non-employee directors are eligible to participate in the employee discount program and are subject toon the same terms of the program as Company employees. Pursuant to the employee discount program,non-employee directors can purchase Conn’s merchandise at product cost plus ten percent.

At our 20112020 annual meeting, our stockholders approved the adoption of the Company’s 2020 Omnibus Equity Plan. The 2020 Omnibus Equity Plan replaces the previously adopted 2011Non-Employee Director Restricted Stock Plan. ThisThe 2020 Omnibus Equity Plan is administered by our Compensation Committee and onlynon-employee directors are eligible recipients of awards under the Plan. The Plan permits the awarding ofprovides for equity grants, including but not limited to restricted stock, restricted stock units and RSUsstock options to ourboth employees and non-employee directors.

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In May 2017,2020, all non-employee directors received 4,42513,851 RSUs with an aggregate fair value of approximately $75,000.$100,000. The following table presents the total compensation for eachnon-employee director for fiscal year 2018:2021:

 

DIRECTOR COMPENSATION

DIRECTOR COMPENSATION

 

DIRECTOR COMPENSATION

Name

  

Fees Earned
or Paid in
Cash ($)1

   

Stock
Awards
($)2

   

Option
Awards
($)

   

Non-Equity
Incentive Plan
Compensation
($)

   

Change in Pension and
Nonqualified Deferred
Compensation Earnings
($)

   

All Other
Compensation
($)

   

Total ($)

   Fees Earned
or Paid in
Cash ($)1
  Stock
Awards
($)2
  Option
Awards
($)
  Non-Equity
Incentive Plan
Compensation
($)
  Change in Pension and
Nonqualified Deferred
Compensation Earnings
($)
  All Other
Compensation
($)
  Total ($)

Bob L. Martin

  $107,500   $75,000    —      —      —      —     $182,500   $125,000  $100,004  —    —    —    —    $225,004

Douglas H. Martin

  $70,000   $75,000    —      —      —      —     $145,000   $75,000  $100,004  —    —    —    —    $175,004

James H. Haworth

  $70,000   $75,000    —      —      —      —     $145,000   $75,000  $100,004  —    —    —    —    $175,004

Kelly M. Malson

  $85,000   $75,000    —      —      —      —     $160,000 

Sue E. Gove

  $88,334  $100,004  —    —    —    —    $188,338

Oded Shein

  $70,000   $75,000    —      —      —      —     $145,000   $95,000  $100,004  —    —    —    —    $195,004

William (David) Schofman

  $70,000   $75,000    —      —      —      —     $145,000   $75,000  $100,004  —    —    —    —    $175,004

William E. Saunders, Jr.

  $80,000   $75,000    —      —      —      —     $155,000   $90,000  $100,004  —    —    —    —    $190,004

(1)

Reflects a reduced cash retainer fee of $70,000$75,000 per year (reduced from $80,000 in response to measure taken in response to the COVID-19 outbreak) paid to each director in fiscal year 2021. Also reflects annual Committee chair fees paid to Mr. Bob Martin ($20,00025,000 for serving as Lead Independent Director, $10,000$15,000 for serving as chair of the Compensation Committee, and $7,500$10,000 for serving as chair of the Nominating and Corporate Governance Committee), Ms. MalsonMr. Shein ($15,00020,000 for serving as chair of the Audit Committee), and Mr. Saunders ($10,00015,000 for serving as chair of the Credit Risk and Compliance Committee). Directors who begin theirReflects an additional $13,334 in cash retainer fees paid to Sue Gove for serving on the Board servicemid-year receive apro-rata portionfor the months of the cash retainersMarch and annual equity compensation.April 2020.

(2)

Represents aggregate grant date fair value of awards granted during the year in accordance with FASB ASC Topic 718. Information regarding the assumptions used in calculating the fair value under FASB ASC Topic 718 can be found in Note 1 to the financial statements contained in the Company’s Annual Report on Form10-K for fiscal year 2018.2021. Each of ournon-employee directors was issued 4,42513,851 RSUs pursuant to the Company’s 2011Non-Employee Director Restricted Stock2020 Plan on May 30, 2017.29, 2020. All of thethese awards vest on May 30, 2018.29, 2021.

In November 2017, the Compensation Committee approved, and the Board ratified, the stock ownership guidelines fornon-employee directors to attain aggregate equity in Conn’s stock valued at four times the value of the annual cash retainer before the first five-year anniversary of their appointment asnon-employee directors. As of January 31, 2018, Mr. Bob Martin, Mr. Doug Martin, Ms. Malson, Mr. Saunders, Mr. Schofman and Mr. Shein met these ownership requirements, and Mr. Haworth continues to make progress toward his ownership threshold.

Based on a review by F.W. Cook, in November 2017, the Compensation Committee approved, and the Board ratified, the following increases in the annual cash retainers and stock awards fornon-employee directors, effective for fiscal year 2019:

Fee

  

Fiscal year 2019

 

Annual Cash Retainer

  $80,000 

Additional Annual Retainer for:

  

•  Lead Independent Director

  $25,000 

•  Audit Committee Chair

  $20,000 

•  Credit Risk Committee Chair

  $15,000 

•  Compliance Committee Chair (1)

  $10,000 

•  Compensation Committee Chair

  $15,000 

•  Nominating & Corporate Governance Committee Chair

  $10,000 

Annual Equity Awards

  $100,000 

(1)Mr. Miller will not receive a retainer fee as chair of the Compliance Committee as he is employed by the Company.

Listed below are the aggregate outstanding stock awards and option awards (by number of underlying shares)(unvested) held by eachnon-employee director as of January 31, 2018:2021:

Name

  

Stock Awards

   

Option Awards
(1)

 

Bob L. Martin

   4,425    30,000 

Douglas H. Martin

   4,425    30,000 

James H. Haworth

   4,425    —   

Kelly M. Malson

   4,425    —   

Oded Shein

   4,425    —   

William (David) Schofman

   4,425    —   

William E. Saunders, Jr.

   4,425    —   

 

(1)Both Mr. 

Name

Stock Awards

Bob L. Martin and Mr. 

13,851

Douglas H. Martin had 10,000 stock options expire unexercised during fiscal year 2018. The options that expired were granted on July 2, 2007 with an exercise price of $29.24.

13,851

James H. Haworth

13,851

Sue E. Gove

13,851

Oded Shein

13,851

William (David) Schofman

13,851

William E. Saunders, Jr.

13,851

 

The remaining options held by Mr. Bob Martin and Mr. Doug Martin will expire according to the following schedule, unless otherwise exercised:

18

# of Options

  

Expiration
Date

   

Exercise
Price

 

10,000

   06/03/18   $16.93 

10,000

   06/02/19   $10.21 

10,000

   05/25/20   $7.54 


COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

This Compensation Discussion and Analysis provides stockholders with an understanding of our compensation philosophy, objectives, policies and practices in place during fiscal year 2018,2021, as well as the factors considered by our Compensation Committee in making compensation decisions for fiscal year 2018.2021. This Compensation Discussion and Analysis focuses on the compensation of our Chief Executive Officer, our Chief Financial Officer, and our three other most highly compensated executive officers forserving as of the end of fiscal year 20182021 (the “named executive officers”).

 

Name

  

Title

Norman L. Miller

  

President, Chief Executive Officer and Chairman of the Board

Lee A. Wright

George L. Bchara  

Executive Vice President, Chief Financial Officer

Coleman R. Gaines

Lee A. Wright*  

President and Chief Operating Officer, Retail

George L. Bchara

Executive Vice President, Chief AccountingOperating Officer

Rodney D. LastingerPresident, Retail
Mark L. Prior

  

Vice President, General Counsel and Secretary

* Mr. Wright’s position was eliminated on February 19, 2021, resulting in his departure from the Company.

Continuing Investment in Leadership and Business Highlights and InitiativesOutlook

Continuing Investment in Leadership

Mr. Miller has worked to assemble an executive leadership team focused on setting the Company on a path to profitable growth aligned with shareholder value creation interests. In fiscal year 2018, our executive team, led by Mr. Miller, made significant investments in both personnel and key functional areas including credit analytics, warehouse, delivery and distribution, and our loan management system platform.

Business Highlights and Company Initiatives During the Unprecedented Fiscal Year 2021

We are a leading specialty retailer that offers a broad selection of quality, branded durable consumer goods and related services in addition to a proprietary credit solution for our core credit-constrained consumers. We operate an integrated and scalable business through our retail stores and website. Our complementary product offerings include furniture and mattresses, home appliances, consumer electronics and home office products from leading global brands across a wide range of price points. Our credit offering provides financing solutions to a large, under-served population of credit-constrained consumers who typically have limited financing options. We provide customers the opportunity to comparison shop across brands with confidence in our competitive prices as well as affordable monthly payment options,next-day delivery and installation in the majoritymost of our markets, and product repair service. We believe our large, attractively merchandised stores and credit solutions offer a distinctive shopping experience compared to other retailers that target our core customer demographic. We are generally classified as an essential business by government authorities in the jurisdictions in which we operate as we provide essential goods and services to our communities.

Fiscal year 2018The COVID-19 pandemic was a transformative year for our Company. We maintained our focus on enhancing our credit platform to supportunfolding around the pursuitworld at the beginning of our long-term growth objectives. Our credit segment delivered solid results, reflectingfiscal year 2021 and its impact on society and the higher yieldglobal economy was unascertainable at that time. Despite widespread stay-at home orders and mandates for consumer facing businesses to temporarily close or suspend face-to-face operations, most of our stores were able to remain open, although we earnoperated, at times, on reduced schedules due to state and local mandates. In response to the COVID-19 pandemic, we initiated several measures to ensure the safety of Company personnel and our direct loan product, more sophisticated underwriting which has ledcustomers.

Throughout fiscal year 2021, the Company, like nearly all other companies, constantly adjusted to lower delinquency ratesnational, state and losses,local restrictions on retail sales activities, particularly for consumer retail companies with in-person sales and better executionpurchases. Despite these unprecedented challenges, the Company continued to offer, sell and performancedeliver essential home merchandise such as refrigerators and computers to consumers as they also adjusted to the societal and employment impacts during the pandemic. Throughout fiscal year 2021, the Company successfully executed the following operational initiatives and goals in the capital markets which has ledface of the pandemic:

Instituted health and safety measures, including enhanced cleaning in our stores and offices, a mask requirement for in-store personnel, and social distancing;

Adopted information technology initiatives to lower costfacilitate work-from-home that allowed a majority of funds. We continueadministrative and support personnel to see the benefitwork from home;

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Maintained store openings in nearly all of our stores while observing local and state emergency declaration restrictions;

Initiated curb-side sales and pick-up in our stores;

Secured highly sought-after home merchandise such as refrigerators and home computers and safely executed home-stop deliveries to our customers;

Implemented payment deferral programs to provide relief to credit customers who were economically impacted by COVID-19;

Increased operating cash flow year-over-year by approximately 477% compared to fiscal year 2020 with approximately 48% of sales in cash, or by credit card or third-party financing;

Captured new customers who purchased merchandise using cash and credit cards while also de-levering risk in our credit operations fromportfolio by restricting credit underwriting terms and increased down-payments;

Expanded our credit underwriting strategies with development and testing;

Improved our underwriting infrastructure with additional hiring of e-commerce personnel and integration of new systems;

Increased liquidity by successfully launching an ABS transaction; and

Completed a tender offer for approximately $85.8 million in aggregate principal amount of our outstanding 7.250% high yield notes.

In the structural changes we have mademidst of the most disruptive societal, health-care and global economic crisis of the last 50 years, in fiscal year 2021, the Company saw the resilience of its unique hybrid retail and credit business model as the Company intentionally de-risked its credit business while continuing to increase yield, reduce losses and improve overallsupport retail demand through its diverse credit performance.offerings. Retail operating margins also remained strong, demonstrating our differentiated business model, improved product mix and emphasis on disciplined cost management. We demonstratedStockholders experienced total return of 79.6% during the resiliency of our business modelfiscal year and the significant value we provide our customers as we endured the challenges caused by Hurricane Harvey.

WeCompany delivered the following financial and operational results in fiscal year 2018:2021:

 

Returned

Increased cash and third-party credit sales by 32%, reflecting strong demand for home-related products and our ability to full-year profitability, driven by an 80% increase in operating income inserve a broader customer segment;

Same store sales declined 12.8% for the fiscal year, 2018primarily due to a nearly 22.9% decline in sales financed by Conn’s in-house credit because of tighter underwriting associated with the COVID-19 crisis;

Increased e-commerce sales by $13.7 million, or 109.4% during fiscal year 2021, compared to the prior fiscal year period;

Improved net cash provided by operating activities to $462.1 million for fiscal year 2021 as compared to $80.1 million for fiscal year 2020;

Reduced overall debt balance by $416.6 million as compared to fiscal year 2017;2020;

 

Delivered

Reduced customer accounts receivable 60+ days past due at January 31, 2021 by 24% as compared to January 31, 2020; and

Reduced re-aged customer accounts receivable at January 31, 2021 by 33% as compared to January 31, 2020.

Employment and Compensation Actions in Fiscal Year 2021

The Company was proactive at the onset of the COVID-19 pandemic to improve liquidity by reducing expenses in light of the uncertainty of the pandemic’s impact on the business. Immediately following the widespread shutdown of consumer facing businesses, the Company took the following employment and compensation related actions:

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Furloughed approximately 400 employees for a record quarterly yield on our customer receivables portfolioperiod of 20.5%4 to 6 weeks in response to changes in consumer demand and brought the fourth quartervast majority back to employment as business conditions improved;

Eliminated approximately 160 positions;

Temporarily reduced base salaries of the top 140 paid employees by 10 to 25%; and

Negotiated deferrals for store and facility lease expenses for fiscal year 2018 as2021.

As a result of the successful transitionuncertainty of the impact of the COVID-19 pandemic in early fiscal 2021, the Board decided to defer its consideration of fiscal year 2021 financial and performance metrics for our higher-yielding direct loan program;

ForAnnual Incentive Plan. The Company’s preliminary forecasts and budgets were rendered obsolete as individuals, consumers, companies, governments and nations fundamentally adjusted their activities on a near daily basis as the pandemic continued to spread. The Board continued its “wait-and-see” approach on the Company’s fiscal year performance metrics during the first time in five years, reduced, year-over-year,half of fiscal year 2021.

In late summer, the balance of accounts 60 days past due as a percentageBoard discussed setting financial and performance metrics for fiscal year 2021 that considered both strategic enterprise-wide goals that were determined to be critical to the ongoing success of the customer receivables portfolioCompany. These goals were determined to 9.9% at January 31, 2018 from 10.7% at January 31, 2017;

Delivered recordbe critical to future sustainable sales and stock price growth for the future. The strategic goals included the following: 1) Expansion of our underwriting strategies with development and testing and recruitment of additional technical experts in the e-commerce and Credit departments to enhance underwriting, analytics, risk-grading and forecasting capabilities; 2) Integration of multiple lease-to-own (“LTO”) providers on-line and the ability to offer multiple LTO providers throughout our retail gross margin of 39.6% instore network; 3) Compliance with the Company’s ABL lending facility for fiscal year 2018, an2021; 4) Reduction of $20 million in SG&A expenses in the second-half of the year from initial forecasts; and 5) Maintenance of at least $150 million in liquidity.

During our March 2021 Board meeting, the Board approved a payout under the Annual Incentive Plan that was set at 75% of the target bonus. This approval was based upon the Company having successfully achieved its strategic and financial performance goals for fiscal year 2021 including 1) recruiting several credit department personnel to enhance the Company’s underwriting, analytics and forecasting capabilities, 2) integrating and launching two additional lease-to-own providers throughout our network of stores, 3) maintaining compliance with our ABL debt covenants, 4) reducing SG&A expenses by $20 million in the second half of the fiscal year, and 5) maintaining a minimum liquidity of at least $150 million.

In evaluating fiscal year 2021 performance, the Board recognized that while the Company’s same store sales declined by 12.8% during the fiscal year, this decline was largely attributable to the decisive action undertaken and strategic choice made by the Company to forgo same store sales and tighten its credit underwriting and credit granting in response to the COVID-19 pandemic. For example, with the start of the pandemic the Company took active steps to reduce the number of no-down payment offers, increase cash down-payment requirements and limited the maximum loan amounts for new customers. The Company estimates that the conservative underwriting actions adopted by the Company impacted same store retail sales negatively by 22.9%, but materially improved the credit quality and composition of the Company’s customer accounts receivable portfolio. Despite these proactive measures, the Company, still, among other things, increased cash and third-party financed sales by 32% over 220 basis pointsfiscal year 2020, improved net cash from operating activities to $462.1 million, in part due to strong cash collections and the tightening of underwriting standards, compared to 37.4%net cash from operating activities of $80.1 million in the prior fiscal year, 2017, driven primarilyand reduced the overall debt balance by improved product margins across all product categories, favorable product mix, and continued focus on increasing efficiencies;

Extended our successful asset-backed securitization program, securitizing $1.2 billion of customer receivables in two transactions in fiscal year 2018. These securitizations led to the early redemption of the Series2015-A Class B Notes and the Series2016-A Class B Notes, which contributed to an 18.7% reduction in interest expense in fiscal year 2018approximately $416.6 million compared to fiscal year 2017;

Increased sales financed with2020, resulting in net debt as a percent of thelease-to-own product offered through Progressive Leasing, which we offer to our customers who do not qualify for our proprietary credit programs, to 6.5% portfolio balance of 45% at January 31, 2021, representing the lowest level in seven fiscal years. The Board took into consideration that these strategic and financial performance goals in fiscal year 2021 were accomplished in the fourth quartermidst of fiscal year 2018 from 3.8% in the second quarterCOVID-19 pandemic when nearly every part of fiscal year 2018, the quarter in which we transitioned to Progressive Leasing;Company’s sales, staffing, recruitment, delivery, marketing and

Stock price performance responded positively to the results summarized above such that as of January 31, 2018, our fiscal year end, our annualized total shareholder return was up 215.6% on aone-year basis merchandise supply chain processes and 28.4% on a three-year basis compared to 13.2% and 0.0%, respectively, at the median for Conn’s executive compensation peers discussed under the section captioned “Industry Peer Group” below.
routines were fundamentally impacted.

Outlook

TheAs of April 12, 2021, substantially all our stores are open and conduct regular in-store shopping hours. We have returned all furloughed employees to active employment and restored temporary salary reductions. We continue to maintain and follow COVID -19 related health and safety measures, including the mask requirement for in-store personnel, and social distancing, to ensure safety. Our business and industry continue to be impacted by the COVID-19 outbreak. However, we believe are well positioned to continue serving our customers and supporting our employees as we continue forward.

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We believe that the broad appeal of the Conn’sour value proposition to our geographically diverse core demographic, the unit economics of our business and the current retail real estate market conditionsshould provide us ample opportunity for continued expansion. Ourthe stability necessary to maintain our business. As the COVID-19 outbreak is contained, we expect our brand recognition and long history in our core markets should give us the opportunity to further penetrate our existing footprint, particularly as we leverage existing marketing spend, logistics infrastructure, and service footprint. There are also many markets in the United StatesU.S. with demographic characteristics similar to those in our existing footprint, which provides substantial opportunities for future growth. We plan to continue to improve our operating results by leveraging our existing infrastructure and seeking to continually optimize the efficiency of our marketing, merchandising, distribution and credit operations. As we expand in existing markets and penetrate new markets, we expect to increase our purchase volumes, achieve distribution efficiencies and strengthen our relationships with our key vendors. WeOver time, we also expect our increased store base and higher net sales to further leverage our existing corporate and regional infrastructure.

Stockholder Outreach

At our 2020 annual meeting, approximately 81.7% of shares cast were voted in favor of our advisory vote on executive compensation (commonly referred to as “Say-on-Pay”). This was an improvement from the 60.5% stockholder support we received at the 2019 annual meeting and put us back on track with the substantial support stockholders expressed in the 2017 and 2018 Say-on-Pay votes (approximately 91% and 84% in favor, respectively).

Following our extensive stockholder engagement leading up to the 2020 Annual Meeting which led to the significant inprovement on say-on-pay, we continued engaging with our stockholders to understand their concerns. For example, in August 2020, Mr. Bob L. Martin and members of our management team held a telephonic meeting with one of our stockholders, among the largest pension funds in the world, to discuss our executive compensation plan and philosophy and address its questions.

In conversations with stockholders during our extensive stockholder engagement in fiscal year 2020 and continuing into fiscal year 2021, we have emphasized that the Compensation Committee is committed to its pay-for-performance philosophy and designed the programs such that management’s real pay delivery is aligned with the achievement of superior financial performance and value created for stockholders. Starting in fiscal year 2020 and continuing into fiscal year 2021, equity compensation to management has consisted of 50% RSUs and 50% PSUs with the PSUs awarded to management requiring the achievement of multi-year EBITDA targets with a total stockholder return (TSR) modifier that aligns pay outcomes with stockholder results. Our CEO’s stock options also reflect our pay-for-performance philosophy and require stock appreciation from the date of grant for him to realize any value.

We believe that our stockholder outreach efforts have been effective in understanding our stockholder concerns and we have laid the foundationplan to executecontinue to engage with our long-term growth strategystockholders going forward and prudently manage financialuse stockholder and operational risk while maximizing shareholder value. We have identified the following strategic priorities for fiscal year 2019:proxy advisor firm concerns and input to further implement and emphasize pay-for-performance.

 

Increase net income by improving performance across our core operational and financial metrics: same store sales, retail margin, portfolio yield,charge-off rate, and interest expense;

22

Open five to nine new stores in our current geographic footprint to leverage our existing infrastructure;

Increase interest income on our loan portfolio by continuing to originate higher-yielding loans;

Continue to refine and enhance our underwriting platform;

Reduce our interest expense despite a rising rate environment;

Optimize our mix of quality, branded products and reduce warehouse, delivery and transportation costs to increase our retail gross margin;

Continue to grow ourlease-to-own sales; and

Maintain disciplined oversight of our selling, general and administrative expenses.

Fiscal Year 2018 Pay for Performance Highlights

Annual Cash Incentive Bonuses. Bonuses under our annual cash incentive Plan are based upon the achievement of adjusted EBITDA performance goals that were established at the start of fiscal year 2018. As determined by the Compensation Committee, the Company exceeded fiscal year 2018 adjusted EBITDA target goals. Accordingly, Annual Cash Incentive Plan bonuses were paid to our named executive officers. The Compensation Committee, in its discretion, also approved increasing the amounts of the cash bonuses paid to our named executive officers as a result of the transformative performance results produced by the Company in fiscal year 2018.

Base Salary Increases. As discussed below in “Elements of Compensation – Base Salary,” adjustments were made to the base salaries for fiscal year 2018 (compared to fiscal year 2017) for certain named executive officers who were employed with the Company as of the start of fiscal year 2018.


Compensation Philosophy and Objectives

We have developed a compensation program for our named executive officers designed to: (i) reward and motivate individual and Company performance; (ii) attract and retain executive talent with competitive compensation opportunities; and (iii) build and encourage ownership of our Common Stock.Stock by our named executive officers. Toward these goals, our compensation program has been designed and administered to reward our named executive officers based on our financial and operating performance and their individual performance, and to align their interests with those of our stockholders. In addition, these goals are intended to encourage long-term commitment to the Company by our named executive officers. We believe that our executive compensation program, which consists primarily of a base salary, an annual performance-based cash bonus opportunity, and long-term time-based and performance-based equity incentive awards, promotes these objectives.

Compensation Philosophy

The following is the executive compensation philosophy that has been adopted by our Compensation Committee:

Compensation realized by executives should reflect the individual skills and contributions of the executive, as well as the Company’s overall performance against its business plan and changes in stockholder value.

The basic objectives of the Company’s executive compensation program include:

 

Attracting, motivating and retaining skilled executives necessary to execute its business strategy;

 

Motivating executives by linking compensation opportunity to the achievement of the Company’s short-term and long-term growth and profitability goals as well as execution of its business strategy;

 

Aligning interests of management and stockholders by linking realized compensation directly to increases in stockholder value and requiring ownership of Company stockour Common Stock over a sustained period; and

 

Promoting apay-for-performance culture on a risk-appropriate basis with a majority of the named executive officer’s compensation to be earned, or increase in value, based on Company and stock performance.

In addition, the efficiency of the overall program from a tax, accounting, cash flow and stockholder dilution perspective should be balanced against the above objectives. In support of the stated objectives, the Company delivers an executive compensation program that includes the following fundamental elements:

 

 1.

Base salary;

 

 2.Short-term

Annual cash incentive bonuses; and

 

 3.

Long-term equity incentives in the form of time-based nonqualified stock options (“Options”), time-based RSUs and performance-based RSUs.

Additional benefits and perquisites may be included when appropriate. A named executive officer’s total direct compensation opportunity (i.e., base salary, short-termannual cash incentives and long-term equity incentives) should be competitive with market practice. “Market practice” generally means the median (i.e., 50th percentile) of the total direct compensation opportunity of peer executives at companies in our peer group (defined below). However, the Compensation Committee may, in its discretion, provide a named executive officer with a total direct compensation opportunity above or below market practice, based on the following factors:

The named executive officer’s individual skills, experience, and performance; and

 

The difficulty of replacing the named executive officer and importance of the position to the Company.

Actual compensation earned by a named executive officer may be above or below market level depending on the named executive officer’s individual performance and the Company’s absolute or relative performance compared with its peers.

Compensation Objectives

Reward Performance: A significant portion of the total direct compensation of each of our named executive officers is performance-based. One way in which we reward performance is through grants of equity, the value of which is tied to changes in our

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stock price. While we recognize that stock price performance is onea closely monitored measure of performance, given the volatile nature of business conditions in our industry and the financial markets, we believe that it may not always be the most appropriate performance measure for incentive plan purposes. As a result, in fiscal year 2018,2021, a portion of our named executive officers’ total direct compensation is based on the Company’s financialstrategic and operational results, as measured by performance on certain key initiatives in the areas of credit, retail and e-commerce, maintaining compliance with debt covenants, meeting budget reductions for the second half of fiscal year 2021, and maintaining a minimum liquidity of $150 million. While adjusted EBITDA in the case ofhas often been used to determine our annual cash incentive bonuses, due to the impact of COVID-19 our Compensation Committee and fiscal year 2018 performance-based RSUs and by return on invested capital in the caseBoard felt these measures of performance-based RSUs granted prior to fiscal year 2018.operational performance were more appropriate measures of management performance than adjusted EBITDA or other financial performance measures. The Compensation Committee may also award discretionary bonuses based on its review of individual performance.

Attract, Retain and Motivate: We structure the compensation of our named executive officers with the goal of attracting and retaining excellent executives in our significant areas of operations – sales, merchandising, financial and liquidity, consumer credit, distribution, product service and training. We promote these objectives by ensuring that our compensation is competitive within our industry and by providing that equity awards vest over a three or four-year period (subject to our Compensation Committee’s discretion in determining a different vesting schedule as it deems appropriate under the circumstances) for purposes of retention. In addition, a significant portion of a named executive officer’s total direct compensation opportunity is tied to performance-based incentives that motivate our named executive officers to achieve strong financial and operational results.

Encourage Ownership of our Common Stock: We believe that ownership of our Common Stock by our named executive officers directly aligns their interests with those of our stockholders. To reinforce this belief, our Compensation Committee adopted stock ownership guidelines for our named executive officers, as further described under the caption “Compensation Discussion and Analysis – “StockAnalysis-Stock Ownership Guidelines.”

Determining Compensation

The Compensation Committee is responsible for administering the executive compensation program for each of the named executive officers, including the Chief Executive Officer. The Chief Executive Officer assists the Compensation Committee with administering the executive compensation program for the other named executive officers, except with regard to certain actions and responsibilities that are specifically reserved to the Compensation Committee or Board of Directors. The Chief Executive Officer plays no role in the compensation process, and is not present during voting or deliberations, with respect to his own compensation. The Compensation Committee’s responsibilities are identified in its charter posted on our website atwww.conns.com under “Investor Relations – Corporate Governance.”

Our Compensation Committee seeks to structure compensation of our named executive officers in such a manner as to avoid encouraging excessive risk taking. To align shareholderstockholder interests and appropriate risk-taking the Compensation Committee: (i) caps the annual incentive target bonus opportunity at 200%; of the target bonus; (ii) adopted equitystock ownership guidelines for our named executive officers; and (iii) imposes varying time horizons for short and long-term incentive compensation, intending to balance the executive’s attention to our short and long-term performance goals and business objectives. The Compensation Committee also periodically reviews and adjusts the cash and equity award amounts tied to our short- and long-term performance goals and objectives to better address changes in the market and Company risks as they arise and adjust our direction and actions to compensate for such risks. We believe that these actions ensure ongoing alignment of ourpay-for-performance objectives and our stockholder interests with a view to long-term value creation.

In applying the above-described objectives for our executive compensation program, the Compensation Committee, in making its final determination, primarily relies upon:

input and recommendations received from the Chief Executive Officer regarding theday-to-day performance, areas of responsibilities and expectations for future performance of executive officers other than the Chief Executive Officer;

 

publicly available information with respect to the executive compensation practices of our peer group companies;

 

the analysis and recommendations of its independent compensation consultant, F.W. Cook, regarding our compensation programs for our executive officers; and

 

its own judgment and knowledge of the industry.

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Input Received from our Chief Executive Officer

The Compensation Committee has historically reliedrelies in part on the input and recommendations of our Chief Executive Officer in making its determination regarding base salaries of the executive officers (other than the Chief Executive Officer), individual levels for annual incentive bonus compensation, and whether to grant long-term equity awards to such executive officers and if so, in what forms and amounts. The Compensation Committee believes that our Chief Executive Officer, by virtue of his role in overseeing theday-to-day performance of such individuals and his experience in the industry, is appropriately suited to make informed recommendations to the Compensation Committee with respect to the foregoing elements of our executive compensation program. The Compensation Committee alone, with input and guidance from its independent compensation consultant, F.W. Cook, determines the compensation for our Chief Executive Officer.

Industry Peer Group

While the Compensation Committee does not rely solely on any comparative analyses of the amounts and forms of compensation which are paid to the named executive officers with comparable roles at other public companies, it does review annually and take into consideration such analyses for public companies of comparable size and nature to our businesses (i.e., retail businesses including those that providein-house financing of their merchandise sales), as well as similarly situated public companies outside the retail business industry. We refer to such companies collectively as our peer group. InFor fiscal year 2018,2021, the peer group was reviewed and updated by the Compensation Committee based on refined selection criteria that better reflect the Company’s size and business. The selection criteria were based on industry classification, revenue, and market capitalization, and developed by the Compensation Committee’s independent compensation consultant acting at the Compensation Committee’s direction. The companies that comprised our peer group were: Restoration Hardware, Pier 1 Imports, Aaron’s,Rent-A-Center,La-Z-Boy, Ethan Allen, EZCORP, Enova International, Encore Capital, Haverty Furniture, Tuesday Morning, Kirkland’s, First Cash Financial, PRA Group, Sears Hometown and Outlet, and Select Comfort. This peer group was used for purposes of reviewing the compensation of our named executive compensation analysis for Messrs. Miller, Wright, Gaines, Bchara and Priorofficers for fiscal year 2018.2021.

The Compensation Committee considers the amount and structure of peer company compensation when determining the compensation of executive officers, but the Compensation Committee does not target compensating our named executive officers to a specific benchmark level relative to our peer group, since our business model and resulting areas of responsibility are not directly comparable with those of named executives within our peer group. Instead, the Compensation Committee utilizes the competitive peer group compensation data to confirm that our compensation and incentive opportunities are appropriate and competitive relative to the market. The Compensation Committee may determine to modify the compensation levels of our named executive officers if they are deemed to not be competitive. The Compensation Committee also relies on its knowledge of the industry practices and our peers in determining our named executive officers’ base salary, annual bonus and long-term equity awards, as it deems appropriate and necessary to reward overall performance and achievements and to promote retention and stability within our executive team.

Compensation Consultant

The Compensation Committee has engaged F.W. Cook as its independent compensation consultant. F.W. Cook is responsible for preparing and presenting a comprehensive competitive market study of the compensation levels and practices for a group of industry peers on an annuala periodic basis. The fiscal year 20182021 Compensation Committee-approved industry peer group is listed and described in more detail in the above section captioned “Compensation Discussion and Analysis – Determining Compensation - Industry Peer Group.” F.W. Cook is also responsible for preparing and presenting an outside director compensation study using the same industry peer group. The Compensation Committee relies on F.W. Cook for input on pay philosophy, current market trends, regulatory considerations and prevalence of benefit and perquisite programs.

The Compensation Committee considered whether F.W. Cook is independent from management, utilizing, among other things, the independence factors required by the SEC and NASDAQ. Based on this review, the Compensation Committee determined that F.W. Cook is independent from Company management and that F.W. Cook has no conflicts of interest in performing its work.

A representative of F.W. Cook attends Compensation Committee meetings as requested by the Compensation Committee. F.W. Cook works with management only under the direction of the Compensation Committee and does not provide any other advice or consulting services to the Company.

Other Factors

The Compensation Committee will also considerconsiders our financial performance and business outlook to the extent that the Compensation Committee believes it may be fairly attributed to or related to the performance of a particular named executive officer. The Compensation Committee will also considerconsiders the contribution of each named executive officer relative to histheir individual responsibilities and capabilities. Generally, our stock price performance is not used as an explicit performance measure to determine incentive payouts given the fact that stock price reflects a variety of factors not within the direct control of our named executive officers, including, but not limited to, the business conditions of the industry within which we operate and the broader economy in general. Nonetheless, in evaluating fiscal year 2018 financial performance and the turn-around strategies being executive by our named executive officers, the Compensation Committee recognized that the Company’s stock experienced a sustained and material appreciation in share price over the last 12 months.

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Elements of Compensation

The compensation of our named executive officers consists of three basic elements: (i) base salary; (ii) annual cash incentive bonus(pre-determined based (based on Company performance (and, in some cases, individual performance) and with discretionary aspects to reward outstanding performance); and (iii) equity awards. These components work together in determining the overall compensation of our named executive officers.

Base Salary

Each named executive officer receives a base salary determined by the Compensation Committee to be commensurate with the officer’s area of responsibility and that officer’s area and extent of responsibility in relation to our performance as a whole. Individual salaries take into account our established salary policies, the individual’s level of responsibility, contribution and value to the Company, individual performance, and prior relevant experience. No specific formula is applied to determine the weight of each factor, and the factors are considered by our Compensation Committee in its discretion. Salary reviews are conducted annually in which individual performance is evaluated; however, individual salaries are not necessarily adjusted each year. Our Compensation Committee generally establishes base salaries at levels that are competitive with market practice, as further described above under the caption “Compensation Discussion and Analysis- Compensation Philosophy and Objectives.”

TheIn response to the COVID-19 outbreak, the base salaries of our named executive officers were reduced for the 12-week period beginning on April 19, 2020 and ending on July 11, 2020 as follows:

Name

  Base Salary
Reduction %
  Total Salary
Reduction $
 

Norman L. Miller

   25.00 $57,692 

George L. Bchara

   20.00 $18,462 

Lee A. Wright

   20.00 $30,000 

Rodney D. Lastinger

   20.00 $24,923 

Mark L. Prior

   20.00 $15,231 

Following the restoration of salaries in July 2020, the Compensation Committee increased the base salaries of certain of the following named executive officers during fiscal year 2018 due to: (i) the Company’s performance in fiscal year 2018;internal pay equity considerations, (ii) overall market conditions; and (iii) the Compensation Committee’s belief that these salary increases are competitive when compared to recent market survey data.

 

Name

  FY18 Annual
Base Salary
   FY17 Annual
Base Salary
   % Change   FY 21 Annual Base
Salary
   FY 20 Annual Base
Salary
   % Change 

Norman L. Miller

  $925,000   $875,000    5.8  $1,000,000   $1,000,000    0.0

Lee A. Wright

  $550,000   $480,000    14.5

Coleman R. Gaines (1)

  $475,000    N/A    N/A 

George L. Bchara (1)

  $310,000   $310,000    0

George L. Bchara

  $475,000   $400,000    18.8

Lee A. Wright (1)

  $650,000   $650,000    0.0

Rodney D. Lastinger

  $540,000   $540,000    0.0

Mark L. Prior

  $330,000   $300,000    10  $365,000   $330,000    10.6

(1)

Mr. Gaines beganWright’s position of Chief Operating Officer was eliminated effective February 19, 2021, resulting in his employment withdeparture from the Company on the commencement of fiscal year 2018; Mr. Bchara began his employment six weeks prior to the commencement of fiscal year 2018; therefore, neither Mr. Gaines nor Mr. Bchara received a base salary increase in fiscal year 2018.Company.

Annual Cash Incentive Plan

The Company uses annual cash incentives to focus attention on current strategic priorities and drive achievement of annual and short-term objectives. The annual cash incentive plan for fiscal year 2018 wasis designed to focus executive officers towards continuing to improve both corporate and individual performance. The Compensation Committee establishes our bonus program for all named executive officers, as well as certain other executive officers and employees, after receiving recommendations from the Chief Executive Officer. The annual incentive bonus opportunity is stated as a percentage of base salary consistent with the competitive market for executives in similar positions. TheTypically, the named executive officers receive annual cash incentive bonus payments based on the achievement ofpre-determined Company

26


performance goals (and in some cases, individual performance goals) approved by the Compensation Committee each fiscal year. Upon completion of each fiscal year, the Compensation Committee determines the annual cash incentive bonuses based on the results of the bonus plan and each named executive officer’s bonus target percentage. The Compensation Committee discusses and approves the annual cash incentive bonus payments annually, considering the factors stated above.

Individual named executive officers may also receive bonus payments based on individual performance. These bonus levels, in the case of named executive officers other than the Chief Executive Officer, are recommended by the Chief Executive Officer, and in all cases, are determinedestablished by the Compensation Committee, based on the applicable named executive officer’s level of responsibility and ability to affect the performance of his area of responsibility and the Company’s performance. At the end of each fiscal year, the Compensation Committee may additionally establish individual performance bonus awards for each named executive officer upon recommendation of the Chairman and Chief Executive Officer (for named executive officers other than the Chief Executive Officer), or as separately determined by the Compensation Committee.

The Compensation Committee also believes that it is important to have the flexibility to grant discretionary bonuses if the Company achieves or exceeds one or more specific financial metrics,performance goals, and if the Compensation Committee determines that management’s overall performance during the year merits special financial recognition. Further, the Chief Executive Officer may recommend discretionary bonuses, outside of our annual incentive bonus program, for executive officers (other than himself) to the Compensation Committee when deemed appropriate and provide the Compensation Committee with his rationale for the recommended bonus amounts. The Compensation Committee makes all final decisions as to the compensation of the named executive officers including the award of any discretionary bonuses.

For fiscal year 2018, theThe Compensation Committee has historically selected adjusted EBITDA as the properprimary performance benchmark for purposes of the annual incentive bonus program, because it believes adjusted EBITDA serves as an appropriate measure of the Company’s operating cash flow and overall financial performance prior to the effects of capital structure, taxes and depreciation policies. The calculationHowever, for fiscal year 2021, EBITDA goals were not pre-established under the annual incentive bonus program due to the unknown impact of the COVID-19 pandemic. Instead, in the second quarter of fiscal year 2021, certain strategic goals and specific financial performance objectives were established for fiscal year 2021. Ultimately, the Compensation Committee selected performance benchmarks for fiscal year 2021 that included success with key strategic initiatives in the areas of credit, retail and e-commerce, compliance with debt covenants, meeting budget reductions for the second half of fiscal year 2021 and maintaining a minimum liquidity of $150 million. While adjusted EBITDA and other benchmarks have been used as the performance criteria for our annual cash incentive bonuses in the past, including last year, due to the impact of COVID-19, our Compensation Committee, as well as our Board and Chief Executive Officer, concluded that these alternative measures of operational performance were more appropriate benchmarks of management performance for the unprecedented year. Given the uncertain business outlook caused by the pandemic-related economic conditions, the Compensation Committee deferred approving these operational benchmarks until its November 2020 meeting, although it began the process of establishing these alternative measures in late summer 2020.

The Compensation Committee determined that payout at 75% percent of the target bonus under the annual cash incentive plan was based on net income plusappropriate as benchmarks were met by management, including maintaining liquidity during the pandemic, successfully launching an asset-backed notes transaction in an aggregate amount of approximately $303 million, completing a tender offer of approximately $85.8 million of its outstanding 7.250% high yield notes to decrease interest expense, plus provisionand growing the e-commerce business 109.4% year-over-year. The following chart details the threshold, target and maximum annual cash incentive opportunity for income taxes, plus depreciation, plus amortization, plus loss from early extinguishment of debt, plusnon-cash stock compensation expense and plus charges and credits. For fiscal year 2018, the Compensation Committeepre-determined adjusted EBITDA based company performance targets to determine Threshold ($140 million), Target ($165 million) and Maximum ($190 million)2021 for the Company’s annual incentive cash award opportunities (aseach named executive officer as a percentage of base salary) for our named executive officers set forth below.salary in effect at the end of the year:

 

Name

  Threshold
$140 million
 Target
$165 million
 Maximum
$190 million
  Threshold* Target* Maximum* 

Norman L. Miller (1)

  50% 100% 200%   75  150  300

George L. Bchara

   50  100  200

Lee A. Wright (1)

  30%   60% 120%   50  100  200

Coleman R. Gaines (1)

  30%   60% 120%

George L. Bchara (1)

  25%   50% 100%

Rodney D. Lastinger

   37.5  75  150

Mark L. Prior (1)

    22.5%   45%   90%   37.5  75  150

 

(1)

Mr. Wright’s position of Chief Operating Officer was eliminated effective February 19, 2021, resulting in his departure from the Company.

*

Percentages represent the incentive cash award opportunity as a percentage of the named executive officer’s base salary at the end of fiscal year 2018.2021.

Target bonus opportunities summarized in the table above for Messrs. Gaines, Bchara, and Prior are inclusive of bonus opportunities for individual performance.

Fiscal year 2018 adjusted EBITDA performance was in the range between Target and Maximum, at $167.3 million, 9.2% above the Target performance goal. Therefore, pursuant to the Annual Cash Incentive Plan program, the Compensation Committee authorized the payment of cash bonuses at 9.2% above Target. These payments are included in the Summary Compensation Table in the column titled“Non-Equity Incentive Plan Compensation.”

In March 2018, in light of the Company’s transformative performance in fiscal year 2018, the Compensation Committee, in its discretion, considered and approved the payment of increased bonuses to the named executive officers. The increased payouts were based on each named executive officer’s achievement of individual management objectives for fiscal year 2018 as established at the start of fiscal year 2018. The additional bonus amounts paid for fiscal year 2018 are listed in the Summary Compensation Table in the column titled “Bonus.” The primary purpose for approving the payment of these increased bonuses to the individual named executive officers was to recognize and reward their contributions for the transformative performance in the Company’s fiscal year 2018 results beyond only adjusted EBITDA. Specifically, the turn-around strategies executed by the Company in fiscal year 2018 under the leadership of the named executive officers produced the following results:

 

Returned to full-year profitability

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Increased operating income in fiscal year 2018 by 80% compared to fiscal year 2017

Delivered a record quarterly yield on the receivables portfolio of 20.5% in the fourth quarter of fiscal year 2018

Delivered record retail gross margin of 39.6% in fiscal year 2018, an increase of over 220 basis points compared to 37.4% in fiscal year 2017

Extended the asset-backed securitization program, securitizing $1.2 billion of customer receivables, which contributed to an 18.7% reduction in interest expense in fiscal year 2018 compared to fiscal year 2017

Successfully transitioned and launched ourlease-to-own program with a new partner, Progressive Leasing

Achieved a material appreciation in the Company’s share price in fiscal year 2018 such that as of January 31, 2018, our fiscal year end, our annualized total shareholder return was up 215.6% on aone-year basis and 28.4% on a three-year basis

The following table details the bonus amounts paid to our named executive officers for Company achievement and individual performance in fiscal year 2018:

Name

  Bonus Amount for
Achievement of
Adjusted EBITDA
   Bonus Increase
for Individual
Executive
Performance
   Total Bonus
Paid
 

Norman L. Miller

  $1,010,100   $608,650   $1,618,750 

Lee A. Wright

  $360,360   $217,140   $577,500 

Coleman R. Gaines

  $311,220   $116,280   $427,500 

George L. Bchara

  $169,260   $101,990   $271,250 

Mark L. Prior

  $162,162   $82,863   $245,025 

Equity Awards

The purpose of our long-term incentive program is to ensure that our executives focus not only on short-term returns but also on achieving long-term Company goals, growth and creation of stockholder value. We further believe that equity ownership by our executive officers aligns executive interests with those of our stockholders. For fiscal year 2018, the Compensation Committee continued its practice of using time-based RSUs and performance-based RSUs for long-term incentive compensation.

Fiscal Year 2018 Special Equity Awards

The Compensation Committee may, in its discretion, grant other equity awards to the named executive officers fromtime-to-time, which may include time-based stock options, restricted stock, time-based RSUs, and performance-based RSUs pursuant to our 2016 Amended Omnibus Incentive Plan. In making any such awards, the Compensation Committee will consider:

the number of equity awards previously granted to the named executive officer; and

the named executive officer’s past and expected future contributions to the Company.

Compensation under our equity incentive program is intended to align the long-term interests of our named executive officers with those of our stockholders and to provide long-term performance incentives to our named executive officers to complement the other forms of compensation they receive.

In making long-term incentive compensation decisions, no formal weighting formula is used in deciding award amounts under our equity incentive programs. Our Compensation Committee instead considers each executive’s ability and individual responsibility to directly impact our Company’s overall performance in the long-term, and makes equity awards based on considerations for each individual executive.

We use equity awards to counterbalancecomplement base salary and short-term cash incentive bonus compensation components provided to our named executive officers and to further align executive pay with the long-term financial performance of the Company. We do not target any set mix of compensation components. Our Compensation Committee reviews the goals of our Company and the status of the markets in which we compete to determine the appropriate combination of short-term and long-term incentive compensation should be structured in order to properly incentivize our executives to best implement both the short-term and long-term elements of our Company strategies. We further believe that stock ownership by our executive officers aligns executive interests with those of our stockholders.

SpecialTiming of Equity Awards

On February 23, 2017,Prior to fiscal year 2021, annual equity awards have typically been granted to our named executive officers at the Company’s regular meeting of the Board scheduled for the fourth quarter of Directors approved specialeach fiscal year. At the beginning of fiscal year 2021, annual equity awards were granted to our named executive officers were during the first quarter of the fiscal year in order to align the annual equity award granting process with the beginning of our fiscal year and industry practice. Off-cycle (non-annual) awards may be made if our Chief Executive Officer and the Compensation Committee deem it appropriate for Messrs. Miller, Wright, Bcharathose not receiving grants on the regular schedule, newly-promoted employees, strategic new hires, or in other special or unique circumstances.

The Compensation Committee may, in its discretion, grant equity awards to the named executive officers from time-to-time, which may include time-based Options, restricted stock, RSUs, and Prior (asPSUs, as well as other forms of equity awards, pursuant to our 2020 Omnibus Equity Plan. In making any awards, the Compensation Committee will consider:

the number of equity awards previously granted to the named executive officer; andnon-executive officers)

the named executive officer’s past and expected future contributions to the Company.

In making long-term incentive compensation decisions, no formal weighting formula is used in deciding award amounts under our equity incentive programs. Our Compensation Committee instead considers each executive’s ability and individual responsibility to directly impact our Company’s overall performance in the long-term and makes equity awards based on considerations for retentioneach individual executive.

Fiscal Year 2021 Equity Awards to Named Executive Officers

For fiscal year 2021, the Compensation Committee elected to grant time-based RSUs and motivation purposes during our business turnaround. The recipients were selected in partperformance-based PSUs with vesting based on the criticalityattainment of their respective rolesspecific stock price targets to our named executive officers. Fifty percent (50%) of the awards were granted in executing our business turnaround strategies, the leadership characteristic these individuals have displayed and continue to displayform of time-based RSUs that vest ratably over the three-year period beginning on the first anniversary of the grant date. The remaining fifty percent (50%) of the award was granted in recruiting other highly talented managers in their respective disciplines, and their efforts and performance in putting the Companyform of performance-based PSUs that vest, if at all, at the end of the three-year period following the date of grant based on a path to sustainable profitability.

These specialthe attainment of specific stock price targets at the end of the three-year vesting period. The value of the equity awards consistedgranted was determined by multiplying each executive’s target annual incentive cash opportunity percentage by their annual salary on the date of both performancegrant. The value of the fiscal year 2021 equity awards granted on February 6, 2020 is as follows: Mr. Miller - $1,405,860; Mr. Bchara - $281,174; Mr. Wright - $609,208; Mr. Lastinger - $379,591; and time-based RSUs. TheMr. Prior - $231,974. Additional details regarding the fiscal year 2021 equity awards to our named executive officers are described in the Grant of Plan Based Awards table below.

Certain Fiscal Year 2020 Equity Awards to Named Executive Officers other than the CEO

Effective June 1, 2019, Mr. Wright was promoted to Executive Vice President and Chief Operating Officer and Mr. Bchara was promoted to Executive Vice President and Chief Financial Officer. In connection with their promotions, Mr. Wright and Mr. Bchara received equity grants valued at $674,360 and $311,264, respectively, of which 50% are time based RSUs vesting ratably over three years beginning on the first anniversary of the grant date, and 50% are performance-based RSUs (PSUs) are aligned with stockholder value creation interests because the PSUs, that will vest, if at all, only upon satisfaction of cumulative EBITDA growth performance targets achieved in fiscal years 2021 and 2022. In addition, these PSUs are subject to a modifier based on the certification byCompany’s total stockholder return (“TSR”) performance during the Compensation Committeevesting period. Vesting levels will be determined after completion of the satisfaction30-day period following the end of the annual and cumulative adjusted EBITDA performance conditions over the three fiscal years commencing with fiscal year 2018 and ending2022.

Effective June 3, 2019, in connection with fiscal year 2020. When establishing these adjusted EBITDA performance conditions the Compensation Committee determined that these conditions were challenging but attainable with superior operational execution and financial performance over the three year period. Further, a Total Shareholder Return modifier comparing the Company’s stock price appreciation between February 2017 and February 2020 can be applied to increase the numberhis appointment as President of potential PSUs granted after fiscal year 2020.

The time-based RSUs granted on February 23, 2017 to Messrs. Wright, Bchara and Prior and toRetail, Mr. Miller on May 31, 2017, will vest in three equal installments over a three-year period. The first installment vested on February 23, 2018. The second installment will vest on February 23, 2019; and the third installment will vest on February 23, 2020. At the timeLastinger received an equity grant of these grants in February and May 2017, these special equity awards were intended at that time to motivate and retain these recipients for three fiscal years and to cover those prospective annual equity grants that Messrs. Miller, Wright, Bchara and Prior, would have received in each of fiscal years 2018, 2019, and 2020. Due to the timing of his hire, equity grants to Mr. Gaines were provided under a different grant schedule than the other named executive officers. As detailed$500,010 in the table below, Mr. Gaines was granted time based RSUs and PSUs on May 30, 2017. Mr. Gainesform of time-based RSUs. The RSUs vest ratably over a4-year period. The four-year period beginning on first vesting of RSUs will occur in May, 2018. The potential vesting conditions and the required financial performance requirements for vesting for Mr. Gaines’ PSUs are the same as those terms discussed in the paragraph above with the exception that Mr. Gaines’ PSUs will vest, if at all, in fiscal year 2021.

The table below details the special equity awards granted to Messrs. Miller, Wright, Bchara and Prior and the fiscal year 2018 awards granted to Mr. Gaines. The awards were granted to Mr. Wright, Bchara and Prior on February 23, 2017. A portion of Mr. Miller’s award was granted on February 23, 2017 (200,000 PSUs) and a portionanniversary of the award was granted on May 31, 2017 (258,000 time based RSUs and 58,000 PSUs) as it was contingent upon stockholder approval of the Company’s Amended 2016 Omnibus Incentive Plan.grant date.

 

Name

  

Award Granted

  Award
Approval Date
   Award
Approved
(# of Units)
   Approval Date
Fair Value
   Grant Date   Grant Date Fair
Value
 

Norman L. Miller

  Time Based RSUs   2/23/2017    258,000   $2,554,200    5/31/2017   $4,411,800 
  Performance Based RSUs   2/23/2017    200,000   $2,138,000    2/23/2017   $2,138,000 
  Performance Based RSUs   2/23/2017    58,000   $620,020    5/31/2017   $1,070,680 

Lee A. Wright

  Time Based RSUs   2/23/2017    71,000   $702,900    2/23/2017   $702,900 
  Performance Based RSUs   2/23/2017    71,000   $758,990    2/23/2017   $758,990 

Coleman R. Gaines

  Time Based RSUs   2/1/2017    24,631   $250,005    2/1/2017   $250,005 
  Time Based RSUs   5/30/2017    14,012   $237,503    5/30/2017   $237,503 
  Performance Based RSUs   5/30/2017    14,012   $258,662    5/30/2017   $258,662 

George L. Bchara

  Time Based RSUs   2/23/2017    30,000   $297,000    2/23/2017   $297,000 
  Performance Based RSUs   2/23/2017    30,000   $320,700    2/23/2017   $320,700 

Mark L. Prior

  Time Based RSUs   2/23/2017    20,000   $198,000    2/23/2017   $198,000 
  Performance Based RSUs   2/23/2017    20,000   $213,800    2/23/2017   $213,800 

28


Settlement of Fiscal 2017 Performance-Based Restricted Stock Unit Awards

In May 2016, the Compensation Committee granted 75,107 performance-based RSUs to Mr. Miller. The vesting and payout of this award was based on the Company’s return on invested capital (“ROIC”) over thetwo-year period ended January 31, 2018. Mr. Miller was eligible to earn between 0% and 150% of the performance based RSUs granted, depending on our ROIC during the measurement period. The ROIC goal for vesting at Threshold level (50% of RSUs granted) was 10%, the ROIC goal for vesting at Target level (100% of RSUs granted) was 15% and the ROIC goal for vesting at Maximum level (150% of RSUs granted) was 18%. If any of the RSUs are earned, 50% of the earned RSU’s would vest on May 25, 2018, 25% on May 25, 2019 and 25% on May 25, 2020. In March 2018, the Compensation Committee determined the ROIC for the measurement period fell below the Threshold level. As a result, the Compensation Committee did not approve the vesting or issuance of any of the fiscal year 2017 performance-based RSUs awarded to Mr. Miller and all such fiscal year 2017 performance-based RSUs were forfeited.

Certain Fiscal Year 2019 Salary Increases and Retention Equity Awards to the Chief Executive Officer and Chief FinancialOperating Officer

On March 28, 2018, the Compensation Committee approved annual base salary increases for Messrs. Miller and Wright, effective March 28, 2018, and also approved the grant of retention equity awards.awards to Messrs. Miller and Wright. The primary purpose of the salary increases and retention equity awards iswere, at the time of grant, to ensuremaintain the continuity of the highly successful leadership under our Chief Executive Officer and our former Chief Financial Officer, who became our Chief Operating Officer, and to ensure their retention over the next three to five years.four years (i.e. through fiscal year 2023). Additionally, the purpose of the retention equity grants iswas to ensure that they continue to focus on achieving the Company’s long-term goals in growing a sustainable business model and in creating shareholderstockholder value. We further believe that increased potential equity ownership by our Chief Executive OfficerMessrs. Miller and our Chief Financial Officer alignsWright would align our executives’ interests with those of our shareholders.stockholders.

TheSpecifically, the Compensation Committee increased Mr. Miller’s base salary from $925,000 to $1,000,000 and granted a retention equity award to Mr. Miller of 500,000non-qualified stock options (“Options”), which are scheduled to vest in time-based Options, vesting ratably over two equal installmentsyears as follows: 250,000 Options will vestvesting on March 28, 2021 (fiscal year 2022), and 250,000 Options will vestvesting on March 28, 2022 (fiscal year 2023).

The In addition, the Compensation Committee increased Mr. Wright’s base salary from $550,000 to $600,000 and granted a retention equity award to Mr. Wright of 77,280 Restricted Stock Unitstime-based RSUs and 120,166 Options. The RSUs and Options are scheduled to vest ratably in two equal installments with 38,640 RSUs and 60,083 Options vesting on March 28, 2021 (fiscal year 2022), and the same number of RSUs and Options vesting on March 28, 2022 (fiscal year 2023). The Options granted to Messrs. Miller and Wright are exercisable at the strike price of $32.35, the Company’s closing stock price on the date of these awards.

These awards are designed such that there is no overlap in the annual vesting of the equity that was awarded to Messrs. Miller and Wright in February and May 2017 when compared to these equity awards granted in March 2018. The PSUs granted in February and May 2017 will vest, if at all, in or about February 2020, and thereafter, absent the March 2018 equity grants, Messrs. Miller and Wright would have relatively reduced potential for equity-based compensation in 2021 and 2022. In order to ensure their retention and commitment to the Company to March 2022 and beyond, the Compensation Committee approved these retention equity grants that are scheduled to vest in March 2021 and March 2022.

Timing of Equity Grants

Annual equity awards are generally granted to our named executive officers at the Company’s regular meeting of the Board of Directors scheduled for the first or fourth quarter of each fiscal year.Off-cycle(non-annual) awards may be made if our Chief Executive Officer and the Compensation Committee deem it appropriate for those not receiving grants on the regular first or fourth quarter schedule, newly-promoted employees, strategic new hires, or in other special or unique circumstances.

Health, Retirement, Perquisites and Other Benefits

Our named executive officers are eligible to participate in the same retirement and other health and welfare benefit plans, including medical, dental, vision, long-term and short-term disability, life insurance, employee discount, and in the Company’s employee stock purchase plan, in each case on the same basis as our other eligible employees.

Annual Advisory Vote on Executive Compensation

At our 2017 annual meeting, approximately 92% of the votes cast were in favor of the advisory resolution on our executive compensation. The Compensation Committee believes that the positive outcome of this vote supports the compensation arrangements established by it for our named executive officers, and therefore continued to apply the samepay-for-performance principles and philosophies when making decisions relating to the compensation of our named executive officers for fiscal year 2018.

Stock Ownership Guidelines

In August 2011, our Board of Directors adopted stock ownership guidelines for our named executive officers to align their interests more closely with the interests of our stockholders. During fiscal year 2015, the Compensation Committee increased the stock ownership guidelines for our Chief Executive Officer and other named executive officers. WithinUnder these guidelines, within five years from the date of hire, the Company’s Chief Executive Officer is required to own shares of Common Stock with a value equal to at least five times his or her annual base salary, and each other named executive officer is required to own shares of our Common Stock with a value equal to at least four times his or her annual base salary. All beneficially owned shares of Common Stock, including vested options, options that will vest within 60 days and unvested RSUs are counted towards achievement of the ownership guideline.requirements. Individuals are required to achieve the applicable level of ownership within five years after first becoming subject to the guidelines. If an individual becomes subject to the stock ownership guidelines or is subject to a greater ownership amount due to promotion or an increase in base salary, the individual is expected to meet the applicable ownership amount within the later of the original period or 12 months from the effective date of the promotion or salary change. If an individualindividual’s ownership level falls below the applicable guideline due solely to a decline in the value of the Common Stock, the individual will not be required to acquire additional shares to meet the guideline, but he or she will be required to retain all shares then held (except for shares withheld to pay withholding taxes or the exercise price of options) until such time as the individual again attains the stock ownership threshold.

As of January 31, 2021, Mr. Miller met the stock ownership guidelines. Messrs. Miller, Wright, Bchara, Lastinger and Prior have attained their required level of equity ownership. Mr. Gaines (who joined the Company on February 1, 2017), has not yet attained his required level of ownership, but continuescontinue to make progress toward the requiredtowards meeting their ownership threshold.

The guidelines no longer apply to Mr. Wright as his position was eliminated as of February 19, 2021, resulting in his departure from the Company.

Clawback Features

Consistent with our 2020 Omnibus Equity Plan, our equity award agreements include clawback features which allow the Company to recoup and clawback compensation, payments, equity grants, equity vesting and any other equity payments pursuant to a Company plan in the event of the recipient’s termination for cause or violation of plan terms, and to the extent necessary to comply with the requirements of any applicable law, including but not limited to, Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Section 304 of the Sarbanes-Oxley Act of 2002, any Securities and Exchange Commission rule, and any implementing rules and regulations thereunder.

29


Prohibition on Hedging and Pledging

The Company’s insider trading policy, a copy of which is available on our website atwww.conns.com under “Investor Relations – Corporate Governance”, restricts all officers, directors and certain employees from engaging in any of the following activities with respect to the securities of the Company:

 

Purchases on margin (where money is borrowed to make the purchase);

 

Short sales;

 

Buying or selling puts or calls;

 

Hedging or monetization transactions, such aszero-cost collars and forward sale contracts, that allow an employee to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential upside appreciation in the stock; or

 

Holding Company securities in a margin account or pledging Company securities as collateral for a loan without adequate financial resources to prevent a forced sale.

To the Company’s knowledge, none of our officers or directors have entered into any hedging transactions with respect to Company stock,our Common Stock, nor have they pledged any Company stockCommon Stock to secure any personal indebtedness or deposited Company stock into any margin account. To Thethe Company’s knowledge, none of our officers or directors have entered into any of the foregoing restricted transactions.

Other Compensation

We provide our named executive officers with limited perquisites and other benefits, as reflected in the All Other Compensation column in the “Summary Compensation Table” below, which the Compensation Committee believes are reasonable, competitive and consistent with the objectives of our executive compensation program.

Employment and Related Agreements

Certain of the named executive officers have entered into Executive Severance Agreements with the Company and others are party to the Company’s Amended and Restated Executive Severance Plan adopted by the Company in December 2015,September 2020, the material terms of which are explained in more detail under the section “Termination of Employment and Change of Control Arrangements” below.

Tax Implications of Our Compensation Policies

Section 162(m) of the Internal Revenue Code (Code) places a limit of $1,000,000 on the amount of compensation that we may deduct in any given year with respect to the CEO and certain of our other most highly paid executive officers. There was an exception to the $1,000,000 limitation prior to calendar year 2018 for performance-based compensation meeting certain requirements. Our stock option awardsOptions and performance-based restricted stock unit awardsPSUs generally are performance-based compensation meeting those requirementsfor these purposes and, as such, were typically fully deductible. Performance-based cash bonus compensation awards under our Management Incentive Compensation Program were also possibly tax deductible. Our annual base salary and time-based restricted stock units are generally subject to the Section 162(m) deduction limitations. Effective withAs a result of the Tax Cut and Jobs Act, the performance-based exception to Section 162(m) has been eliminated, resulting in paythe foregoing performance compensation in excess of $1,000,000 in calendar year 2018 or later generally not being deductible for the Company, subject to the transition rule for plans and agreements in place on November 2, 2017. To maintain flexibility in compensating executive officers in view of the overall objectives of our compensation program, the Compensation Committee has not adopted a policy requiring that all compensation be tax deductible.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed the Compensation Discussion and Analysis and discussed it with the Company’s management. Based on its review and discussions with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form10-K for fiscal year 20182021 and the Company’s 20182021 Proxy Statement on Schedule 14A related to the 20182021 annual meeting, for filing with the SEC.

Compensation Committee:

Bob L. Martin (Chair)30


Compensation Committee:
Bob L. Martin (Chair)
William (David) Schofman
James H. Haworth

James Haworth31


Summary Compensation Table

 

Name

  Fiscal
Year
   Salary ($)   Bonus
($)(1)
   Stock
Awards

($)(2)
   Option
Awards
($)(3)
   Non-Equity
Incentive Plan
Compensation
($)(4)
   All Other
Compensation
($)(5)
   Total ($) 
Norman L. Miller (6)   2018   $891,667   $608,650   $7,620,480    —     $1,010,100   $135,728   $10,266,625 
President, Chief Executive   2017   $875,000   $700,000   $1,749,993   $920,483    —     $253,273   $4,498,749 
Officer and Chairman of the Board   2016   $351,325   $300,000   $1,999,994    —      —     $37,858   $2,689,177 
Lee A. Wright(6)(7)   2018   $503,333   $217,140   $1,461,890    —     $360,360   $8,100   $2,550,823 
Executive Vice President and Chief Financial Officer   2017   $280,000   $400,000   $479,998    —      —     $3,000   $1,162,998 
Coleman R. Gaines(7)   2018   $475,000   $116,280   $746,170    —     $311,220   $27,493   $1,676,163 
President & Chief Operating Officer – Retail                
George L. Bchara(7)   2018   $310,000   $101,990   $617,700    —     $169,260   $12,831   $1,211,781 
Vice President, Chief Accounting Officer                
Mark L. Prior(6)(7)   2018   $310,000   $82,863   $411,800    —     $162,162   $136,374   $1,103,199 
Vice President, Secretary and General Counsel                

Name

  Fiscal
Year
   Salary ($)(1)   Bonus
($)(2)
   Stock
Awards ($)(3)
   Option
Awards ($)(4)
   Non-Equity
Incentive Plan
Compensation
($)(5)
   All Other
Compensation
($)(6)
   Total ($) 

Norman L. Miller

   2021   $942,308    —     $1,405,860    —     $1,125,000   $12,000   $3,485,168 

President, Chief Executive Officer and Chairman of the Board

   2020   $1,000,000    —      —      —      —     $43,158   $1,043,158 
   2019   $987,500    —      —     $10,418,952   $3,000,000   $37,773   $14,444,225 

George L. Bchara(7)

   2021   $419,038    —     $281,174    —     $356,250    —     $1,056,462 

Executive Vice President and Chief Financial Officer

   2020   $375,000    —     $311,264    —      —     $11,200   $697,464 

Lee A. Wright

   2021   $620,000   $400,000   $609,208    —      —      —     $1,629,208 

Executive Vice President and Chief Operating Officer

   2020   $633,333    —     $674,360    —      —     $37,990   $1,345,683 
   2019   $591,667    —     $2,500,000   $2,504,005   $1,200,000   $23,354   $6,819,026 

Rodney D. Lastinger(7)

   2021   $515,077    —     $379,591    —     $303,750    —     $1,198,418 

President, Retail

   2020   $353,077    —     $500,011    —      —     $22,626   $875,714 

Mark L. Prior (7)

   2021   $332,269    —     $231,974    —     $205,313    —     $769,556 

Vice President and General Counsel

                

 

(1)

Salary paid in fiscal year 2021 reflects a temporary 12-week reduction in base salary of 25% for Mr. Miller and 20% for Messrs. Bchara, Wright, Lastinger and Prior as well as the following increases in base salary effective July 26, 2020: Mr. Bchara – base salary increased from $400,000 to $475,000, and Mr. Prior – base salary increased from $330,000 to $365,000.

Salary paid in fiscal year 2020 reflects the following increases in base salary effective June 1, 2019: Mr. Bchara – base salary increased from $325,000 to $400,000 in connection with his promotion to Chief Financial Officer, and Mr. Wright – base salary increased from $600,000 to $650,000 in connection with his promotion to Chief Operating Officer. Mr. Lastinger’s base salary represents the pro-rata portion of his annual base salary ($540,000) paid in fiscal year 2020 based on his commencement of employment on June 3, 2019.

(2)

Bonus amounts paid to the named executive officers upon the achievement ofpre-established Company goals appear in the“Non-Equity Incentive Plan Compensation” column. ForRepresents Mr. Wright’s employment through fiscal year 2018, represents amounts2021 and the amount paid to the named executive officers for the achievement of extraordinary business results and performance. For fiscal year 2017, represents discretionary bonus awards paidhim as severance benefits pursuant to Messrs. Miller and Wright in recognition of their contributions to the Company’s business turnaround objectives. Mr. Wright’s fiscal year 2017 payment includes $288,000 that was guaranteed as part of his employment offer. Mr. Miller’s fiscal year 2016 payment represents asign-on bonus paid in connection with his commencementagreement and termination of employment on September 7, 2015.without cause.

(2)(3)

Represents aggregate grant date fair value of restricted stock units (“RSUs”) granted during the year in accordance with FASB ASC Topic 718, “Compensation-Stock Compensation”, which may be greater or less than the value that the named executive officer realizes upon vesting of the RSUs.awards. Information regarding the assumptions used in calculating the fair value under FASB ASC Topic 718 can be found in NoteNotes 1 and 9 to the financial statements contained in the Company’s Annual Report on Form10-K for fiscal year 2018. In fiscal year 2018, the named executive officers, except for Mr. Gaines, were granted the following time-based RSUs that vest ratably over a3-year period beginning February 23, 2018: Mr. Miller – 258,000 RSUs, Mr. Wright – 71,000 RSUs, Mr. Bchara – 30,000 RSUs, and Mr. Prior – 20,000 RSUs. Mr. Gaines was granted a total of 38,643 time-based RSUs in fiscal year 2018 that vest ratably over a4-year period beginning on the first anniversary of the grant dates. In fiscal year 2018, the following performance based restricted stock units (“PSUs”) were also granted: Mr. Miller – 258,000 PSUs, Mr. Wright – 71,000 PSUs, Mr. Gaines – 14,012 PSUs, Mr. Bchara – 30,000 PSUs, and Mr. Prior – 20,000 PSUs. The PSUs for all the named executive officers, except Mr. Gaines, will vest on February 23, 2020, if at all, based on the achievement of annual and cumulative adjusted EBITDA performance targets over the next three fiscal years commencing with fiscal year 2018 and ending with fiscal year 2020. The PSUs granted to Mr. Gaines will vest, if at all, on May 30, 2021, based on the same EBITDA performance targets as the grants to the other named executive officers.2021.

For fiscal year 2021, represents the value of the following RSUs and PSUs granted: Mr. Miller – 78,452 RSUs and 78,452 PSUs, Mr. Bchara – 15,691 RSUs and 15,690 PSUs, Mr. Wright – 33,996 RSUs and 33,996 PSUs, Mr. Lastinger – 21,183 RSUs and 21,182 PSUs, and Mr. Prior – 12,945 RSUs and 12,945 PSUs. The RSUs vest ratably over the three-year period beginning on the first anniversary of the grant date. The PSUs vest, if at all, at the end of the three-year period following the date of grant based on the attainment of specific stock price targets at the end of the three-year vesting period. The fiscal year 2021 annual equity awards are discussed in more detail under “Compensation Discussion and Analysis.”

32


For fiscal year 2020, represents the value of the following RSUs and PSUs granted to Messrs. Bchara, and Wright: Mr. Bchara – 6,894 RSUs and 6,894 PSUs, and Mr. Wright – 14,936 RSUs and 14,936 PSUs. Messrs. Bchara and Wright’s awards were granted in connection with their promotions during fiscal year 2020 and are discussed in more detail under “Compensation Discussion and Analysis”. The RSUs granted to Messrs. Bchara and Wright vest ratably over a 3-year period beginning on the first anniversary of the grant date. The PSUs vest, if at all, upon satisfaction of cumulative EBITDA growth and TSR performance targets achieved in fiscal years 2021 and 2022. Mr. Lastinger received a grant of 30,563 RSUs on June 3, 2019 in connection with his commencement of employment. Mr. Lastinger’s grant vests ratably over a 4-year period beginning on the first anniversary of the grant date.

In fiscal year 2019, Mr. Wright received a grant of 77,280 RSUs on March 28, 2018 that vests ratably over a 2-year period beginning on March 28, 2021. Mr. Wright’s award was granted for retention purposes and is discussed in more detail under “Compensation Discussion and Analysis.”

(3)(4)

Represents aggregate grant date fair value of awards granted during the year in accordance with FASB ASC Topic 718, “Compensation-Stock Compensation,” which may be greater or less than the value that the named executive officer realizes upon vesting of the options. Information regarding the assumptions used in calculating the fair value under FASB ASC 718 can be found in Note 9 to the financial statements contained in the Company’s Annual Report on Form10-K forIn fiscal year 2018. Mr.2019, Messrs. Miller and Wright received a grantthe following grants of 100,000 nonqualified stock options in fiscal year 2017 that vest ratably over a4-year period.One-third of theon March 28, 2018: Mr. Miller – 500,000 options grantedand Mr. Wright – 120,166 options. The options have an exercise price of $12.65,one-third of the options$32.35 and vest in two equal installments on March 28, 2021 and March 28, 2022. Messrs. Miller and Wright’s awards were granted have an exercise price of $18.98for retention purposes andone-third of the options granted have an exercise price of $25.30. are discussed in more detail under “Compensation Discussion and Analysis.”

(4)(5)

Represents amounts paid to the named executive officers under the Annual Cash Incentive Plan as a resultannual cash incentive plan for achievement of achievement ofpre-determined adjusted EBITDA based company performance goals asspecified critical business objectives established by the Compensation Committee for fiscal year 2018.2021, as discussed above in more detail under “Compensation Discussion and Analysis.”

For fiscal year 2020, the Company did not achieve the pre-determined adjusted EBITDA goals established by the Compensation Committee for the annual cash incentive plan; therefore, no cash incentive bonuses were paid.

For fiscal year 2019, represents amounts paid to the named executive officers under the annual cash incentive Plan as a result of achievement of pre-determined adjusted EBITDA based company performance goals.

(5)(6)

All Other Compensation for fiscal year 20182021 consists of:of an automobile allowance for Mr. Miller in the amount of $12,000.

Matching contributions under the Company’s 401(k) plan for Messrs. Miller, Wright, Bchara and Prior in the amount of $8,100 each.

Automobile and gas allowances for Messrs. Miller and Gaines in the amount of $12,000 each.

Relocation assistance for Mr. Miller in the amount of $115,628, for Mr. Gaines in the amount of $15,493, for Mr. Bchara in the amount of $4,731 and for Mr. Prior in the amount of $128,274.

Name

  401(k)
Match
   Car
Allowance
   Relocation   Total 

Norman L. Miller

  $8,100   $12,000   $115,628   $135,728 

Lee A. Wright

  $8,100   $0   $0   $8,100 

Coleman R. Gaines

  $0   $12,000   $15,493   $27,493 

George A. Bchara

  $8,100   $0   $4,731   $12,831 

Mark L. Prior

  $8,100   $0   $128,274   $136,374 

(6)Mr. Miller’s base salary in fiscal year 2016 represents thepro-rata portion of his annual base salary ($875,000) paid that year based on his commencement of employment on September 7, 2015. Mr. Wright’s base salary in fiscal year 2017 represents thepro-rata portion of his annual base salary ($480,000) paid that year based on his commencement of employment on June 26, 2016. Salary paid in fiscal year 2018 to Messrs. Miller, Wright and Prior reflects the following increases that were effective as of October 1, 2017: Mr. Miller’s base salary increased from $875,000 to $925,000; Mr. Wright’s base salary increased from $480,000 to $550,000; and Mr. Prior’s base salary increased from $300,000 to $330,000.

(7)

With respect to Mr. Wright,Bchara, information is not included for fiscal year 20162019 because he was not a named executive officer. With respect to Mr. Lastinger, information is not included for fiscal year 2019 because he joined the Company in June 2016 (fiscalduring fiscal year 2017) as Chief Financial Officer.2020. With respect to Messrs. Bchara andMr. Prior, information is not included for fiscal years 20162019 and 20172020 because both joined the Company during fiscal year 2017 but didhe was not becomea named executive officers until fiscal year 2018. With respect to Mr. Gaines, information is not included for fiscal years 2016 and 2017 because he joined the Company as of the first day of fiscal year 2018.officer.

33


Grants of Plan-Based Awards

 

 Estimated Future Payouts Under Non- Estimated Future Payouts Under         
 Equity Incentive Plan Awards(1) Equity Incentive Plan Awards         

Name

 

Grant Type

 Grant Date Threshold
($)
 Target ($) Maximum
($)
 Threshold
(#)(2)
 Target
(#)(2)
 Maximum
(#)(2)
 All Other Stock
Awards;
Number of
Shares of Stock
or Stock Units

(#)(3)
 All Other
Option Awards;
Number of
Securities
Under-Lying
Options (#)
 Exercise or
Base Price of
Option
Awards

($/sh)
 Grant Date Fair
Value of Stock
and Option
Awards ($)(4)
   

Grant Type

  Grant
Date
   Threshold
($)(1)
   Target
($)(1)
   Maximum
($)
   Threshold
(#)(2)
   Target
(#)(2)
   Maximum
(#)(2)
   All Other
Stock
Awards;
Number of
Shares of
Stock or
Stock Units
(#)(3)
   All Other
Option
Awards;
Number of
Securities
Under-Lying
Options (#)
   Exercise or
Base Price
of Option
Awards
($/sh)
   Grant Date
Fair Value
of Stock and
Option
Awards ($)  (4)
 

Norman L. Miller

 Annual Cash Incentive N/A $462,500  $925,000  $1,850,000   —     —     —     —     —     —     —     

Annual Cash Incentive

   N/A   $750,000   $1,500,000   $3,000,000    —      —      —      —      —      —      —   
 Time Based RSUs 5/31/2017  —     —     —     —     —     —    258,000   —     —    $4,411,800   

Time Based RSUs

   2/6/2020    —      —      —      —      —      —      78,452    —      —     $750,001 
 Performance Based RSUs 2/23/2017  —     —     —    100,000  200,000  300,000   —     —     —    $2,138,000   

Performance Based RSUs

   2/6/2020    —      —      —      39,226    78,452    117,678    —      —      —     $655,859 
 Performance Based RSUs 5/31/2017  —     —     —    29,000  58,000  87,000   —     —     —    $1,070,680 

George L. Bchara

  

Annual Cash Incentive

   N/A   $237,500   $475,000   $950,000    —      —      —      —      —      —      —   
  

Time Based RSUs

   2/6/2020    —      —      —      —      —      —      15,691    —      —     $150,006 
  

Performance Based RSUs

   2/6/2020    —      —      —      7,845    15,690    23,535    —      —      —     $131,168 

Lee A. Wright

 Annual Cash Incentive N/A $165,000  $330,000  $660,000   —     —     —     —     —     —     —     

Annual Cash Incentive

   N/A   $325,000   $650,000   $1,300,000    —      —      —      —      —      —      —   
 Time Based RSUs 2/23/2017  —     —     —     —     —     —    71,000   —     —    $702,900   

Time Based RSUs

   2/6/2020    —      —      —      —      —      —      33,996    —      —     $325,002 
 Performance Based RSUs 2/23/2017    35,500  71,000  106,500   —     —     —    $758,990   

Performance Based RSUs

   2/6/2020    —      —      —      16,998    33,996    50,994    —      —      —     $284,207 

Coleman R. Gaines

 Annual Cash Incentive N/A $142,500  $285,000  $570,000   —     —     —     —     —     —     —   
 Time Based RSUs 2/1/2017  —     —     —     —     —     —    24,631   —     —    $250,005 

Rodney D. Lastinger

  

Annual Cash Incentive

   N/A   $202,500   $405,000   $810,000    —      —      —      —      —      —      —   
 Time Based RSUs 5/30/2017  —     —     —     —     —     —    14,012   —     —    $237,503   

Time Based RSUs

   2/6/2020    —      —      —      —      —      —      21,183    —      —     $202,509 
 Performance Based RSUs 5/30/2017  —     —     —    7,006  14,012  21,018   —     —     —    $258,662 

George L. Bchara

 Annual Cash Incentive N/A $77,500  $155,000  $310,000   —     —     —     —     —     —     —   
 Time Based RSUs 2/23/2017  —     —     —     —     —     —    30,000   —     —    $297,000   

Performance Based RSUs

   2/6/2020    —      —      —      10,591    21,182    31,773    —      —      —     $177,082 
 Performance Based RSUs 2/23/2017  —     —     —    15,000  30,000  45,000   —     —     —    $320,700 

Mark L. Prior

 Annual Cash Incentive N/A $74,250  $148,500  $297,000   —     —     —     —     —     —     —     

Annual Cash Incentive

   N/A   $136,875   $273,750   $547,500    —      —      —      —      —      —      —   
 Time Based RSUs 2/23/2017  —     —     —     —     —     —    20,000   —     —    $198,000   

Time Based RSUs

   2/6/2020    —      —      —      —      —      —      12,945    —      —     $123,754 
 Performance Based RSUs 2/23/2017  —     —     —    10,000  20,000  30,000   —     —     —    $213,800   

Performance Based RSUs

   2/6/2020    —      —      —      6,473    12,945    19,418    —      —      —     $108,220 

 

(1)

Represents fiscal year 20182021 award opportunities under the Company’s Annual Cash Incentive Plan.annual cash incentive plan. The Company achieved the predetermined adjusted EBITDA based performance goalsspecified critical business objectives established by the Compensation Committee for fiscal year 20182021 in excesslight of the target level but less than the maximum level.COVID-19 pandemic. Actual annual cash incentive awards paid to the named executive officers are reflected in the“Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table” and are discussed on more detail under “Compensation Discussion and Analysis.”

(2)

Represents the threshold (50% of target), target and maximum (150% of target) number of performance-based RSUsPSUs granted that may vest, if at all, upon certification, after fiscal year 2020, byat the Compensation Committeeend of the satisfactionthree-year period following the date of predetermined annual and cumulative EBITDA performancegrant based on the attainment of specific stock price targets overat the three fiscal years commencing with fiscal year 2018 and ending with fiscal year 2020. A further Total Shareholder Return modifier may also be applied to the performance based RSUs awarded based upon a comparisonend of the Company’s stock price in February 2017 and February 2020.three-year vesting period. The maximum number of performance based RSUsPSUs that can vest is 150% of the target number of units granted. IfIn connection with Mr. Wright’s departure from the Company, the PSUs granted to Mr. Wright will vest or be forfeited, subject to attainment of the performance targets are achieved,goals thereunder, at the RSUs will vest for Messrs. Miller, Wright, Bchara and Priorend of the 18-month period following his termination of employment on February 23, 2020 and for Mr. Gaines on May 30,19, 2021.

(3)

Represents time-based RSUs granted in fiscal year 2018.2021. The time-based RSUs granted to Messrs. Miller, Wright, Bchara, Lastinger and Prior vest ratably over athe 3-year period beginning on February 23, 2018.6, 2021. The RSUs granted to Mr. Gaines wasWright were granted on the same terms as the awards to Messrs. Miller, Bchara, Lastinger and Prior. In connection with Mr. Wright’s departure from the Company, a totalportion of 38,643 time-basedthe RSUs in fiscal year 2018 thatgranted to Mr. Wright will vest ratably over aduring the 4-year18-month period beginningfollowing his termination of employment on February 19, 2021, and the first anniversaryremainder of the grant dates.RSUs will be forfeited at the end of the 18-month period.

(4)

The amounts in the “Grant Date Fair Value of Stock and Option Awards” column were determined in accordance with FASB ASC Topic 718, which may be greater or less than the value than the respective named executive officer realizes upon the vesting of the performance-basedtime-based RSUs and time-based RSUs.and/or PSUs. Information regarding the assumptions used in calculating the fair value under FASB ASC Topic 718 can be found in NoteNotes 1 and 9 to the financial statements contained in the Company’s Annual Report on Form10-K for fiscal year 2018.2021.

34


Outstanding Equity Awards at Fiscal Year End 20182021

 

 Option Awards Stock Awards    Option Awards Stock Awards 

Name

 Grant Date Number of
Securities
Underlying
Unexercised
Options -
Exercisable
(#)
 Number of
Securities
Underlying
Unexercised
Options -
UnExercisable
(#)
 Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
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 ($)(1)
 Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested (#)
 Equity Incentive
Plan Awards or
Payout Value of
Unearned
Shares, Units or
Other Rights That
Have Not Vested
($)(1)
  Grant Date Number of
Securities
Underlying
Unexercised
Options -
Exercisable
(#)
 Number of
Securities
Underlying
Unexercised
Options -
UnExercisable
(#)
 Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
 Option
Exercise
Price ($)
 Option
Expiration
Date
 Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
 Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1)
 Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested (#)
 Equity Incentive
Plan Awards or
Payout Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested ($)(1)
 

Norman L. Miller

 9/7/2015      37,270  $1,241,091 (2)     1/2/2017   33,333    $12.65   1/2/2027     
 5/25/2016      56,331  $1,875,822 (3)     1/2/2017   33,333    $18.98   1/2/2027     
 5/25/2016        75,107  $2,501,063 (4)   1/2/2017   33,334    $25.30   1/2/2027     
 1/2/2017 8,333  25,000 (5)   $12.65  1/2/2027       3/28/2018   0   250,000 (2)   $32.35   3/28/2028     
 1/2/2017 8,333  25,000 (5)   $18.98  1/2/2027       3/28/2018   0   250,000 (2)   $32.35   3/28/2028     
 1/2/2017 8,333  25,001 (5)   $25.30  1/2/2027       2/6/2020        78,452  $1,234,050 (3)   78,452  $1,234,050 (4) 
 2/23/2017        200,000  $6,660,000 (6) 

George L. Bchara

  5/29/2019        4,596  $72,295 (5)   6,894  $108,443 (6) 
 5/31/2017        58,000  $1,931,400 (6)   2/6/2020        15,691  $246,819 (3)   15,690  $246,804 (4) 
 5/31/2017      258,000  8,591,400 (7)   

Lee A. Wright

 6/22/2016      44,445  $1,480,019 (8)     3/28/2018   0   120,166 (7)   $32.35   3/29/2028   77,280  $1,215,614 (8)   
 2/23/2017      71,000  $2,364,300 (7)     5/29/2019        9,957  $156,624 (5)   14,936  $234,943 (6) 
 2/23/2017        71,000  $2,364,300 (6)   2/6/2020        33,996  $534,757 (3)   33,996  $534,757 (4) 

Coleman R. Gaines

 2/1/2017      24,631  $820,212 (9)   
 5/30/2017      14,012  $466,600 (10)   
 5/30/2017        14,012  $466,600 (11) 

George L. Bchara

 12/14/2016      8,622  $287,113 (12)   

Rodney D. Lastinger

  6/3/2019        22,923  $360,579 (9)   
 2/23/2017      30,000  $999,000 (7)     2/6/2020        21,183  $333,209 (3)   21,182  $333,193 (4) 
 2/23/2017        30,000  $999,000 (6) 

Mark L. Prior

 7/14/2016      16,173  $538,561 (13)     7/14/2016        4,044  $63,612 (10)   
 12/1/2016      9,041  $301,065 (14)     2/6/2020        12,945  $203,625 (3)   12,945  $203,625 (4) 
 2/23/2017      20,000  $666,000 (7)   
 2/23/2017        20,000  $666,000 (6) 

 

(1)

Values of awards that are unvested or not earned at the end of fiscal year 20182021 are based on our closing stock price on January 31, 201829, 2021 of $33.30.$15.73.

(2)On January 2, 2017, the Compensation Committee approved the reduction of the vesting period of Mr. Miller’s initial new hire equity grant from five to four years.

Fifty percent of unvested RSUsstock options vest on September 7, 2018March 28, 2021 and the remaining 50% vest on September 7, 2019.March 28, 2022.

(3)

One-third of RSUs vest on May 25, 2018,February 6, 2021, one-third vest on February 6, 2022 and one-third vest on February 6, 2023.

(4)

Represents target number and the value of PSUs that will vest, if at all, following the end of fiscal year 2023 (January 31, 2023), based on our closing stock price on January 29, 2021 of $15.73. Vesting is contingent upon achievement of specific stock price targets at the end of the three-year vesting period. PSUs may vest at up to 150% of target.

(5)

Fifty percent of RSUs vest on May 25, 201929, 2021 andone-third fifty percent vest on May 25, 2020.29, 2022.

(4)(6)Reflects the

Represents target number and the value of performance-based RSUsPSUs that may be issuedwill vest, if at all, following the end of fiscal year 2022 (January 31, 2022), based on our closing stock price on January 29, 2021 of $15.73. Vesting is contingent upon achievement of Return on Invested Capital (ROIC)cumulative EBITDA and TSR performance targets forconditions over the twenty-four month period ending January 31, 2018. The performance-based RSUs vest 50% on May 25, 2018,2021 and 25% on May 25, 2019 and May 25, 2020 if the performance targets are achieved. In March 2018, the Compensation Committee determined the Company did not meet threshold-level for ROIC for such performance period and all performance-based RSUs issued to Mr. Miller in2022 fiscal year 2017 relating to such performance period were forfeited.years.

(5)(7)One-third

Fifty percent of unvested stock options vest on January 2, 2019,one-third of stock optionsMarch 28, 2021 and the remaining 50% vest on January 2, 2020 andone-third vest on January 2, 2021.

(6)Represents target number of performance based RSUs that will vest, if at all, on February 23, 2020. Vesting is contingent upon achievement of annual and cumulative EBITDA performance conditions over the three fiscal years commencing with fiscal year 2018 and ending with completion of fiscal year 2020.
(7)One-third of RSUs vested on February 23, 2018,one-third of RSUs will vest on February 23, 2019 andone-third of RSUs will vest on February 23, 2020.March 28, 2022.

(8)

Fifty percent of RSUs vest on March 28, 2021 and the remaining 50% vest on March 28, 2022

(9)

One-third of RSUs vest on June 22, 2018,one-third of RSUs vest on June 22, 2019 and3, 2021, one-third vest on June 22, 2020.

(9)Twenty-five percent of RSUs vested on February 1, 2018, 25% of RSUs vest on February 1, 2019, 25% of RSUs vest on February 1, 20203, 2022 and 25% of RSUs vest on February 1, 2021.

(10)Twenty-five percent of RSUs vest on May 30, 2018, 25% of RSUs vest on May 30, 2019, 25% of RSUs vest on May 30, 2020 and 25% of RSUs vest on May 30, 2021.
(11)Represents target number of performance based RSUs that will vest, if at all, on May 30, 2021. Vesting is contingent upon achievement of annual and cumulative EBITDA performance conditions over the three fiscal years commencing with fiscal year 2018 and ending with completion of fiscal year 2020.
(12)One-third of RSUs vest on December 14, 2018,one-third of RSUs vest on December 14, 2019 andone-third vest on December 14, 2020.June 3, 2023.

(13)(10)Twenty-five percent of RSUs vest on July 14, 2018, 25% of RSUs vest on July 14, 2019, 25% of RSUs vest on July 14, 2020 and 25% of

RSUs vest on July 14, 2021.

(14)One-third of RSUs vest on December 1, 2018,one-third of RSUs vest on December 1, 2019 andone-third vest on December 1, 2020.

Option Exercises and Stock Vested in Fiscal Year 20182021

 

  Option Awards   Stock Awards   Option Awards   Stock Awards 

Name

  Number of Shares
Acquired on Exercise
(#)
   Value Realized on
Exercise ($)
   Number of Shares
Acquired on
Exercise (#)
   Value Realized on
Vesting ($)
   Number of
Shares
Acquired on
Exercise (#)
   Value Realized
on Exercise ($)
   Number of
Shares Acquired
on Exercise (#)
   Value Realized
on Vesting ($)
 

Norman L. Miller

   —      —      37,411   $701,972    —      —      304,916   $1,885,548 

George L. Bchara

   —      —      38,445   $254,122 

Lee A. Wright

   —      —      14,814   $251,097    —      —      98,538   $656,764 

Coleman R. Gaines

   —      —      —      —   

George L. Bchara

   —      —      2,873   $93,373 

Rodney D Lastinger

   —      —      7,640   $63,641 

Mark L. Prior

   —      —      7,056   $169,415    —      —      29,240   $210,871 

35


TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS

On September 2, 2020, the Board of Directors, upon the recommendation of the Compensation Committee, adopted the Amended and Restated Executive Severance AgreementsPlan (the “Severance Plan”). Participation in the Severance Plan is limited to officers of the Company with a title of Vice President or more senior, and other employees who are designated by the Committee, provided that no person or officer who is otherwise party to an individual agreement with the Company providing for severance benefits (“Agreement”) may participate in the Severance Plan. The Severance Plan provides that any employee who has entered into an individual Executives Agreement with the Company prior to the adoption of the Severance Plan may make an election within 30 days of the effective date of the Severance Plan, to rescind and terminate their individual Agreement and elect to participate in the Severance Plan.

We have entered into executive severance agreementsAgreements with each of Messrs. Miller, Wright and Gaines (collectively, the “Agreements”).Lastinger. The Agreements are designed to (i) provide a level of transition assistance in the event of an involuntary terminationcertain terminations of employment with the goal of keeping the subject named executive officers focused on our business rather than their personal circumstances, and (ii) encourage the subject named executive officers to continue to devote their full attention to the business of the Company in the event of a potential change in control to allow for a smooth transition. The Compensation Committee believes the Agreements promote the objectives of the Company and align with the interests of our stockholders by encouraging continuity of leadership in termination or change in control situations. Mr. Lastinger elected, on September  16, 2020, to rescind and terminate his Agreement with the Company and become a participant in the Severance Plan.

Executive Severance Agreements for Messrs. Miller and Wright

The term of each Agreement is for one year and automatically renews for successiveone-year periods unless terminated by the Company upon prior written notice to the subject named executive officer. If the subject named executive officer is involuntarily terminated without cause (as defined below) or if the subject named executive officer voluntarily terminates histheir employment for good reason (as defined below), then (i) the executive will receive salary continuation payments (at the rate in effect on the day before hissuch termination) for 18a specified number of months following termination (other than with respect to(24 months for Mr. Miller who will receive continued paymentsand 18 months for 24 months)Mr. Wright) (the “Severance Period”), (ii) the executive will receive continuation coverage during the Severance Period under the Company’s medical, dental, life, disability and other welfare benefit plans, and (iii) for Mr. Miller, all awards held by the executive under any of our 2003 Incentive Stock Option Plan, and 2011 Omnibus Incentive Plan, and the 2016 Amended Omnibus Incentive Planequity plans will continue to vest and, if applicable, be exercisable during the Severance Period as if the executive had continued his employment for the duration of the Severance Period; for Mr. Wright, all awards held by the executive under the 2016 Amended Omnibus Incentive Plan will continue to vest, and if applicable, be exercisable during the Severance Period as if the executive had continued histheir employment for the duration of the Severance Period.

Under each Agreement,the Agreements, “cause” is defined as (i) behavior of the subject executive whichthat is adverse to the Company’s interests, (ii) the subject executive’s dishonesty, criminal charge or conviction, grossly negligent misconduct, willful misconduct, acts of bad faith, or neglect of duty or (iii) the subject executive’s material breach of the Agreement.

Under each Agreement,the Agreements, “good reason” means, without the subject executive’s express written consent, (i) the material diminution of the subject executive’s title, duties, authority or responsibilities relative to the subject executive’s duties, authority or responsibilities as in effect immediately prior to such reduction, or the assignment to the subject executive of such reduced duties, authority or responsibilities, (ii) a substantial reduction, without good business reasons, of the facilities and perquisites (including office space and location) available to the subject executive immediately prior to such reduction, (iii) a material reduction of the subject executive’s base salary or annual bonus opportunity, each as in effect as of the effective date of the Agreement, (iv) a material reduction in the kind or level of employee benefits, including additional bonus opportunities, to which the subject executive was entitled immediately prior to such reduction with the result that the subject executive’s overall benefits package is significantly reduced, (v) upon a change of control (as defined below), the failure of the Company to obtain the assumption of the Agreement by the successor, (vi) upon a change of control, the transfer of the subject executive’s principal place of employment to a location that is more than 100 miles from the subject executive’s principal place of employment immediately prior to the change of control, or (vii) any act or set of facts or circumstances that would, under case law or statute, constitute a constructive termination of the subject executive, provided, in each case, that the subject executive terminates employment within 60 days of the occurrence of such circumstances.

Each Agreement providesThe Agreements provide that if, during the period beginning one year prior to a change of control (as defined below) and ending one year following the change in control, the subject executive is terminated without cause (as defined above) or if the subject executive voluntarily terminates histheir employment for good reason (as defined above), then (i) the subject executive will receive a lump sum severance payment equal

36


to three timesa specified multiple of the subject executive’s annual base salary (as in effect on the day prior to the date of such termination),. Each of Messrs. Miller’s and (ii) the subject executiveWright’s Agreement provide that he will receive continuationa lump sum severance payment equal to three times base salary. The Agreements also provide that following termination of employment during the period described above, the executive is eligible to enroll in continued coverage under the Company’s medical, dental, life, disability and other welfare

benefit for 18 months following termination (other than with respect to Mr. Miller, whoplans under COBRA. The Agreements further provide that each executive will receive a lump sum cash payment equal to 24 timesthe amount that the Company would have paid for such executive’s coverage for a specified time period. Mr. Miller will receive a lump sum cash payment equal to 24-times the portion of the monthly premium that would have been paid by the Company for the same level of health and dental coverage he had in effect immediately prior to such termination).termination and Mr. Wright’s payment is based on the cost the Company would have paid for coverage for an 18-month period. Mr. Miller’s agreementAgreement provides that all outstanding equity awards granted under our 2003 Incentive Stock Option Plan, 2011 Omnibus Incentive Plan and our 2016 Amended Omnibus Incentive Plan will immediately vest on the later of the date of termination or the date of the change of control, and if applicable, these equity awards will continue to be exercisable for 24 months following his date of termination as if he had remained an employee of the Company. Messrs. Wright and Gaines’ agreements provideMr. Wright’s Agreement provides that all equity awards granted under our and 2016 Amended Omnibus Incentive Plan will immediately vest on the later of the date of termination or the date of the change of control, and if applicable, these equity awards will continue to be exercisable for 18 months following the subject executive’s termination as if the executivehe had remained an employee of the Company.

Each Agreement definesThe Agreements define a “change of control” as (i) a person acquiring 35% or more of the voting power of the Company, (ii) a change in the composition of our Board of Directors during any12-month period as a result of which less than a majority of the directors are “incumbent directors” (as defined in each Agreement), (iii) a merger or consolidation of the Company (unless it still controls a majority of the voting stock), (iv) a complete liquidation or dissolution of the Company, or (v) a sale, disposition, lease, or exchange of all or substantially all of the Company’s assets or of one of the significant operating divisions, including the retail and credit segment.

By entering into their respective Agreements, each of the subject executives agreed to be subject to and bound by the confidentiality,non-compete,non-disclosure andnon-solicitation provisions therein.

The Agreements also provide that if payments that are triggered by a change of control would be subject to an excise tax under Section 4999 of the Internal Revenue Code, as amended, then the payments either (i) would be reduced by the amount needed to avoid triggering the excise tax or (ii) would not be reduced, depending on which alternative left the subject executive in the bestafter-tax position.

On December 2, 2015, the Board of Directors, upon the recommendation of the Compensation Committee, adopted an Executive Severance Plan for senior officers (the “Severance Plan”). Participation in the Severance Plan is limited to officers of the Company with a title of Vice President or more senior, and other employees who are designated by the Committee, provided that no person or officer who is otherwise party to an individual agreement with the Company providing for severance benefits may participate in the Severance Plan. Messrs. Bchara, Lastinger and Prior are participants in the Severance Plan and are not otherwise party to any other severance agreement.Plan. Messrs. Bchara, Lastinger and Prior are eligible to receive salary continuation payments for a cash severance benefit equal to 50%specified number of such participant’s annual base salarymonths (the “Severance Period”), if the individualparticipant is terminated for any reason other than (i) resignation from employment, other than for good reason, (ii) cause (as defined in the Severance Plan), (iii) death or (iv) disability (as defined in the Severance Plan). Such benefitThe Severance Period for Mr. Bchara is to be paid in substantially equal installments on18-months, and the Company’s regularly scheduled payroll datesSeverance Period for the six months following the participant’s termination (the “Executive Severance Period”).Messrs. Lastinger and Prior is 12-months. In addition to the cash severance payment,continued salary payments, Messrs. Bchara, Lastinger and Prior (and their eligible dependents) will also be entitled to receive continued coverage under the Company’s group health plan during the Executive Severance Period at the same cost paid by active employees.

In the event that the termination of employment described above is in connection with a change in control (as defined in the Severance Plan), the Severance Period will increase to 24-months for Messrs. Bchara and Lastinger and to 18-months for Mr. Prior. Additionally, the cash severance will be paid in the form of a lump sum rather than as salary continuation payments and will be calculated based on the terminated participant’s annual cash compensation (sum of base salary and target bonus) in effect at the time of termination. The terminated participant will also be entitled to a pro rata annual cash incentive bonus, calculated at target, if employment is terminated in connection with a change in control. The Severance Plan also provides for the accelerated vesting of all equity awards in connection with a change in control.

The Severance Plan may be amended or terminated by the Compensation Committee at any time; provided, however, that (i) no amendment materially adverse to any Severance Plan participant will be effective without such participant’s written consent until one year after its adoption, and (ii) termination of the Severance Plan will not be effective until one year following Compensation Committee or other corporate action authorizing termination of the Severance Plan.

37


The following table provides the quantitative disclosure of the severance and change of control payments that would be made to our named executive officers assuming the applicable payment event occurred on January 31, 2018:2021:

Fiscal 2018Year 2021 Potential Payments Upon Termination or Change in Control

 

Named Executive

Officer

  

Benefit

  Voluntary
Resignation or
Retirement ($)
   Voluntary
Termination
for Good
Reason ($)
   Involuntary
Termination
without
Cause ($)
   Voluntary
Termination
for Good
Reason in
Connection
with a
Change in
Control
($)(6)
   Involuntary
Termination in
Connection
with a Change
in Control
($)(6)
   Termination
as a Result
of Death($)
   

Benefit

  Voluntary
Resignation or
Retirement ($)
   Voluntary
Termination for
Good Reason ($)
   Involuntary
Termination
without Cause ($)
   Voluntary
Termination for Good
Reason in Connection
with a Change in
Control ($)(6)
   Involuntary
Termination in
Connection with a
Change in Control
($)(6)
   Termination as a
Result of
Death($)
 

Norman L. Miller

  

Stock Options (1)

  $358,069   $1,074,218   $1,074,218   $1,432,327   $1,432,327   $358,069   

Stock Options (1)

  $102,666   $102,666   $102,666   $102,666   $102,666   $102,666 
  

Restricted Stock Units (2)

   —      822,695    822,695    1,234,050    1,234,050    —   
  

Performance-Based RSUs (3)

   —      0    0    1,234,050    1,234,050    —   
  

Cash Severance (4)

   —      2,000,000    2,000,000    3,000,000    3,000,000    —   
  

Welfare Benefits (5)

   —      28,366    28,366    28,366    28,366    1,010,000 
  Totals  $102,666   $2,953,727   $2,953,727   $5,599,132   $5,599,132   $1,112,666 

George L. Bchara

  

Stock Options

   —      —      —      —      —      —   
  

Restricted Stock Units (2)

   —      —      —      319,115    319,115    —   
  

Performance-Based RSUs (3)

   —      —      —      355,246    355,246    —   
  

Restricted Stock Units (2)

   —      8,219,239    8,219,239    11,708,313    11,708,313    —     

Cash Severance (4)

   —      712,500    712,500    1,900,000    1,900,000    —   
  

Performance-Based RSUs (3)

   —      —      —      11,092,463    11,092,463    —     

Pro rata Bonus (7)

   —      —      —      475,000    475,000    —   
  

Cash Severance (4)

   —      1,850,000    1,850,000    2,775,000    2,775,000    —     

Welfare Benefits (5)

   —      5,990    5,990    7,986    7,986    10,000 
  

Welfare Benefits (5)

   —      27,148    27,148    27,148    27,148    510,000   Totals  $0   $718,490   $718,490   $3,057,347   $3,057,347   $10,000 
  

Totals

  $358,069   $11,170,605   $11,170,605   $27,035,252   $27,035,252   $868,069 

Lee A. Wright

  

Stock Options

   —      —      —      —      —      —     

Stock Options (1)

   0    0    0    0    0    0 
  

Restricted Stock Units (2)

   —      2,562,868    2,562,868    3,844,319    3,844,319    —     

Restricted Stock Units (2)

   —      1,728,743    1,728,743    1,906,995    1,906,995    —   
  

Performance-Based RSUs (3)

   —      —      —      2,364,300    2,364,300    —     

Performance-Based RSUs (3)

   —      234,943    234,943    769,700    769,700    —   
  

Cash Severance (4)

   —      825,000    825,000    1,650,000    1,650,000    —     

Cash Severance (4)

   —      975,000    975,000    1,950,000    1,950,000    —   
  

Welfare Benefits (5)

   —      18,945    18,945    18,945    18,945    510,000   

Welfare Benefits (6)

   —      20,532    20,532    20,532    20,532    10,000 
  

Totals

  $0   $3,406,813   $3,406,813   $7,877,564   $7,877,564   $510,000   Totals  $0   $2,959,218   $2,959,218   $4,647,227   $4,647,227   $10,000 

Coleman R. Gaines

  

Stock Options

   —      —      —      —      —      —   

Rodney D. Lastinger

  

Stock Options

   —      —      —      —      —      —   
  

Restricted Stock Units (2)

   —      —      —      1,286,812    1,286,812    —     

Restricted Stock Units (2)

   —      —      —      693,787    693,787    —   
  

Performance-Based RSUs (3)

   —      —      —      466,600    466,600    —     

Performance-Based RSUs (3)

   —      —      —      333,193    333,193    —   
  

Cash Severance (4)

   —      712,500    712,500    1,425,000    1,425,000    —   
  

Welfare Benefits (5)

   —      19,461    19,461    19,461    19,461    160,000 
  

Total

  $0   $731,961   $731,961   $3,197,873   $3,197,873   $160,000 

George L. Bchara

  

Stock Options

   —      —      —      —      —      —   
  

Restricted Stock Units (2)

   —      —      —      1,286,113    1,286,113    —     

Cash Severance (4)

   —      540,000    540,000    1,890,000    1,890,000    —   
  

Performance-Based RSUs (3)

   —      —      —      999,000    999,000    —     

Pro rata Bonus (7)

   —      —      —      405,000    405,000    —   
  

Cash Severance (4)

   —      —      155,000    —      155,000    —     

Welfare Benefits (5)

   —      13,583    13,583    27,166    27,166    760,000 
  

Welfare Benefits (5)

   —      —      1,942    —      1,942    10,000   Totals  $0   $553,583   $553,583   $3,349,147   $3,349,147   $760,000 
  

Total

  $0   $0   $156,942   $2,285,113   $2,442,054   $10,000 

Mark L. Prior

  

Stock Options

   —      —      —      —      —      —     

Stock Options

   —      —      —      —      —      —   
  

Restricted Stock Units (2)

   —      —      —      1,505,626    1,505,626    —     

Restricted Stock Units (2)

   —      —      —      267,237    267,237    —   
  

Performance-Based RSUs (3)

   —      —      —      666,000    666,000    —     

Performance-Based RSUs (3)

   —      —      —      203,625    203,625    —   
  

Cash Severance (4)

   —      —      165,000    —      165,000    —     

Cash Severance (4)

   —      365,000    365,000    958,125    958,125    —   
  

Welfare Benefits (5)

   —      —      6,615    —      6,615    10,000   

Pro rata Bonus (7)

   —      —      —      273,750    273,750    —   
  

Total

  $0   $0   $171,615   $2,171,626   $2,343,241   $10,000   

Welfare Benefits (5)

   —      13,688    13,688    20,532    20,532    10,000 
  Totals  $0   $378,688   $378,688   $1,723,269   $1,723,269   $10,000 

 

(1)

Represents the value (spread) of stock options based on the Company’s closing stock price at the end of fiscal year 20182021 of $33.30.$15.73. For terminations due to voluntary resignation, retirement or death, represents the value of stock options vested as of January 31, 2018.2021. For voluntary terminations for good reason or involuntary terminations without cause, also includes the value of stock options that will continue to vest during the Severance Period for Messrs. Miller and Wright, as described above, based on the Company’s closing stock price at the end of fiscal year 20182021 of $33.30.$15.73. For change in control related terminations, includes the value of all stock options based on the Company’s closing stock price at the end of fiscal year 20182021 as vesting of options will either accelerate as provided in the Agreements described above or may be accelerated in connection with a change in control related termination of employment at the discretion of the Board of Directors Board. We have assumed for purposes of this disclosure that the Board would take such action in connection with a change in control.Agreements.

(2)

For voluntary terminations for good reason or involuntary terminations without cause, represents the value of time based RSUs that will continue to vest during the Severance Period for Messrs. Miller and Wright, as described above, based on the Company’s closing stock price at the end of fiscal year 20182021 of $33.30.$15.73. For change in control related terminations, includes the value of all RSUs based on the Company’s closing stock price at the end of fiscal year 20182021 as vesting of RSUs will accelerate in connection with a change in control related termination of employment either in accordance with the Agreements described above or by the discretion of the Board, as provided for in our 2016 Amended Omnibus IncentiveSeverance Plan. We have assumed for purposes of this disclosure that the Board would take such action in connection with a change in control.

(3)

For change in control related terminations, includes the value of all PSUs at target level, based on the Company’s closing stock price at the end of the fiscal year 20182021 of $33.30$15.73 as vesting of PSUs will accelerate in connection with a change in control related termination of employment either in accordance with the Agreements or the Severance Plan as described above or by the discretion of the Board, as provided for in our 2016 Amended Omnibus Incentive Plan. We have assumed for purposes of this disclosure that the Board would take such action in connection with a change in control.above.

38


(4)

For voluntary terminations for good reason represents the cash severance payable to Mr. Miller(24-months’ salary) and Messrs. Wright and Gaines(18-months’ salary). For involuntary terminations without cause, represents the cash severancesalary continuation payable to Mr. Miller(24-months’ salary), Messrs. Bchara and Wright and Gaines(18-months’ salary), and Messrs. BcharaLastinger and Prior(6-months’12-months’ salary). For change in control related terminations, represents the cash lump sum severance payable to Messrs. Miller, and Wright and Gaines(36-months’ salary), and Messrs. Bchara and PriorLastinger (6-months’24-months’ salary)base salary plus target bonus) and Mr. Prior (18-months’ base salary plus target bonus).

(5)

For voluntary terminations for good reason, and involuntary terminations without cause, represents the cost to continue Company paid welfare benefits for Mr. Miller for a period of24-months, for Messrs. Bchara and Wright for a period of 18-months and for Messrs. WrightLastinger and GainesPrior for a period of18-months.12-months. For involuntary terminations without cause and for change in control related terminations, represents the cost to continue Company paid welfare benefits for Mr.Messrs. Miller, Lastinger and Bchara for a period of24-months, for Messrs. Wright and Gaines for a period of18-months and for Messrs. Bchara and Prior for a period of6-months.18-months. For terminations as a result of death, represents the value of group term life insurance currently in place for the named executive officers.

For terminations as a result of death, represents the value of group term life insurance currently in place for the named executive officers. An additional payment of $510,000 is payable to Messrs. Miller and Lastinger’s named beneficiaries in connection with termination of employment as a result of accidental death.

(6)

The amounts reported are the maximum amounts and do not reflect any potential cutbacks triggered by application of Section 280G of the Internal Revenue Code under the terms of the Agreement described above.

(7)

Represents the pro rata bonus amounts payable to Messrs. Bchara, Lastinger and Prior under the Severance Plan in the event of a change in control on the last day of the fiscal year.

Indemnification Arrangements

As permitted by the Delaware General Corporation Law, we have adopted provisions in our Certificate of Incorporation and Bylaws that provide for the indemnification of our directors and certain executive officers, to the fullest extent permitted by applicable law. These provisions, among other things, provide for the indemnification of each of our directors and certain officers for certain expenses, including judgments, fines and amounts paid in settling or otherwise disposing of actions or threatened actions, incurred by reason of the fact that such person was a director or officer of the Company or of any other corporation which such person served in any capacity at the request of the Company.

In addition, we have entered into indemnification agreements with each of our directors pursuant to which we will indemnify them against judgments, claims, damages, losses and expenses incurred as a result of the fact that any director, in histheir capacity as a director, is made or threatened to be made a party to any suit or proceeding. The indemnification agreements also provide for the advancement of certain expenses (such as attorney’s fees, witness fees, damages, judgments, fines and settlement costs) to our directors in connection with any such suit or proceeding.

We maintain a directors’ and officers’ liability insurance policy to insure our directors and officers against certain losses resulting from acts committed by them in their capacities as our directors and officers, including liabilities arising under the Securities Act of 1933, as amended.

CEO Pay Ratio Disclosure

We are providing the following disclosure about the relationship of the annual total compensation of our employees to the annual total compensation of Norman Miller, our CEO, for fiscal year 2018.2021.

Our CEO to median employee pay ratio was calculated in accordance with Item 402(u) of RegulationS-K. We identified the median employee by examining 20172020 W-2 earnings for all individuals, excluding our CEO, who were employed by us on December 31, 2017,2020, the last day of our payroll year. We had approximately 4,2434,144 employees on that date. We included all employees in the foregoing count, whether employed on a full-time or part-time basis. For those full and part-time associates with less than one year of service and not in temporary or seasonal roles, we annualizedW-2 earnings for comparison purposes.

After identifying the median employee based onW-2 earnings, we calculated annual total compensation of the median employee, in accordance with Item 402(c)(2)(x) of RegulationS-K, as required pursuant to the SEC executive compensation disclosure rules. Additionally, we elected to include the company-paid portion of health insurance premiums, which we exclude from the calculation of total compensation for purposes of the Summary Compensation Table, since it is available to all eligible employees on a nondiscriminatory basis. Mr. Miller’s compensation for purposes of the pay ratio calculation was also adjusted to include the company-paid portion of health insurance premiums. As a result, Mr. Miller’s compensation for purposes of this disclosure differs from his compensation shown in the Summary Compensation Table.

CEO Pay Ratio Calculation:

39


The pay ratio is 291:133:1 for fiscal year 2018.2021. The calculation is based on median annual total compensation of all employees, other than Mr. Miller, was $35,353. Mr. Miller’sour CEO, of $26,264 and our CEO’s annual total compensation was $10,278,795.

Additional CEO Pay Ratio Disclosure

A meaningful portion of the reported compensation to our CEO in fiscal year 2018 included a special equity grant in February 2017 that was intended to cover Mr. Miller’s long-term incentives for fiscal years 2018, 2019, and 2020. This three-year award was granted for retention and motivation purposes during an important period of time when business turnaround strategies were being executed by Mr. Miller and his executive team. Refer to the discussion of Fiscal 2018 Special Equity Awards in the “Compensation Discussion and Analysis” section of this proxy statement for additional details.$3,485,168.

Our fiscal year 2018 CEO pay ratio includes the entire value of the three-year special equity award ($7,620,480) in the calculation of Mr. Miller’s annual total compensation. Since the special award is intended to cover three fiscal years, we have also calculated an additional CEO pay ratio for fiscal year 2018 with the special equity award annualized to better reflect a regular annual grant by including onlyone-third of the special equity grant value ($2,540,160).

The additional CEO pay ratio for fiscal year 2018 based on the annualized equity award to Mr. Miller is 147:1. The median annual total compensation for all employees, other than Mr. Miller, was $35,353. Mr. Miller’s annual total fiscal year 2018 compensation on an annualized basis was $5,198,475, when including onlyone-third of the February 2017 special equity grant value.

CORPORATE GOVERNANCE

Corporate Governance Policies and Procedures

The Company believes that sound corporate governance practices are essential to maintain the trust of our stockholders, customers, employees and other stakeholders. We believe we operate under governance practices that are transparent,up-to-date and appropriate for our industry. The following materials are related to our corporate governance and related matters:

 

Audit Committee Charter

 

Compensation Committee Charter

 

Nominating and Corporate Governance Committee Charter

 

Credit Risk Committee Charter

 

Compliance Committee Charter

 

Code of Business Conduct and Ethics for Employees

 

Code of Ethics for the Chief Executive Officer, President and Senior Financial Professionals

 

Code of Business Conduct and Ethics for Members of the Board of Directors

 

Whistle Blower Policy

 

Corporate Governance Guidelines

 

Amended and Restated Insider Trading Policy

Each of the aforementioned is available on the Company’s websitewww.conns.com under “Investor Relations – Corporate Governance.” There were no amendments to, or waivers from, any of our Codes of Business Conduct for any of our named executive officers during fiscal 2018.2021.

Lead Independent Director

Our Board of Directors determined at its meeting held in August 2012 that our interests would be better served by the designation and appointment of a lead independent director, and appointed Mr. Bob Martin to serve in that capacity until his successor is appointed. The lead independent director is responsible for coordinating the activities of the independent directors of the Board of Directors and shall perform such other duties and assume such other responsibilities as the Board may determine. Certain of the specific responsibilities of the lead independent director are to:

 

Act as the principal liaison between the independent directors and the Chairman of the Board;

 

Develop the agenda for and preside at executive sessions of the independent directors;

 

Approve with the Chairman of the Board the agenda for Board and committee meetings and the need for special meetings of the Board;

 

Advise the Chairman of the Board as to the quality, quantity and timeliness of the information submitted by the Company’s management that is necessary or appropriate for the independent directors to effectively and responsibly perform their duties;

 

Recommend to the Board the retention of advisors and consultants who report directly to the Board;

 

Interview, along with the chair of the Nominating and Corporate Governance Committee, all Board candidates and make recommendations to the Nominating and Corporate Governance Committee;

 

Assist the Board and Company officers in better ensuring compliance with and implementation of the Corporate Governance Guidelines;

 

40


Serve as Chairman of the Board when the Chairman is not present; and

 

Serve as a liaison for consultation and communication with stockholders.

In March 2018,2021, the independent members of the Boardre-appointed Mr. Bob Martin as the Lead Independent Director. Mr. Bob Martin has significant Board experience and has served on the Company’s Board since 2003 and on other public company boards, as well as serving as the Chair of the Nominating and Corporate Governance Committee and Chair of the Compensation Committee. Mr. Bob Martin serves as a liaison between Mr. Miller and the other independent directors, and his longevity on the Board enhances this leadership role and provides for continuity among thenon-employee directors.

Separation of Chairman of the Board and Chief Executive Officer

The Board has determined that the most appropriate form of leadership for the Board of Directors currently is for the CEO, who is responsible for theday-to-day operations of the Company, to serve as Chairman, with strong and independent oversight by the Lead Independent Director and the othernon-management directors. The Board of Directors appointed Mr. Miller as Chairman of the Board in May 2016. As discussed above under the section “Corporate Governance- Lead Independent Director,” the independent directors havere-appointed Mr. Bob Martin as the Lead Independent Director.

The Board believes that the combined role promotes a unified direction and leadership for the Board and gives a single, clear focus for the chain of command for our organization, strategy and business plans. In addition, the Board believes that the combined position enables decisive leadership, ensures clear accountability, and enhances our ability to communicate our message and strategy clearly and consistently to our stockholders, employees and customers. However, the Board does not have a fixed policy regarding the separation of the offices of Chairman of the Board and the Chief Executive Officer and believes that it should maintain the flexibility to select the Chairman of the Board and its Board leadership structure, from time to time, based on the criteria that it deems to be in the best interests of the Company and its stockholders.

Risk Oversight

The Board is actively involved in oversight of risks that could affect the Company. Management is responsible for theday-to-day management of risks we face, while the Board, as a whole and through its committees, including its Audit Committee, and its Credit Risk Committee and its Compliance Committee, has the responsibility for oversight of risk management. The Audit Committee is charged by its charter with the responsibility to review and discuss the Company’s policies and practices with respect to risk assessment and risk management at each of its regularly scheduled meetings, and to report to the Board of Directors various areas of risk, including technology, regulatory, liquidity and operational, that should receive further attention and discussions among the Board of Directors and Company management. The Audit Committee also monitors the effectiveness of the Company’s internal control over financial reporting and legal and regulatory compliance and confers with our independent registered public accounting firm the results of its processes to assess risk in the context of its audit engagement. The Credit Risk and Compliance Committee provides oversight of the Company’s credit risk and underwriting policies and practices. The Compliance Committee oversees the implementation of its compliance management system and other policies and procedures related to state and federal consumer finance laws governing the Company’s business. Our management presents specifically to the Audit Committee, the Credit Risk Committee and Compliance Committee, and the Board of Directors, as requested, with respect to various areas of risk concerns and management practices relative thereto, including enterprise risk management, which is the subject of oversight by the Audit Committee. Additionally, at various regularly scheduled Audit Committee meetings, our management presents on and discusses a particular area of risk, either independently as a result of its assessment of materiality or at the request of the Audit Committee, in addition to its standard general discussion of enterprise risk management. The Audit Committee works regularly with management in assessing and addressing Company policies’ strengths and weaknesses. The full Board of Directors receives at each regularly scheduled meeting, and more often as necessary, a presentation from management on our operations, including presentations regarding liquidity and credit reports and risks. Upon request by the Board of Directors, representatives of management commit to and do subsequently or simultaneously provide to the Board of Directors additional information, revisions and explanations pertaining to their respective areas of management.

41


Stockholder Communications with the Board

The Company’s Board of Directors has a process for stockholders and other interested parties to send communications to the Board. Communications should be addressed to the intended recipient or recipients and sent by mail to:

Lead Independent Director

c/o Corporate Secretary

Conn’s, Inc.,

2445 Technology Forest Blvd., Building 4, Suite 800, The Woodlands, Texas 77381

generalcounsel@conns.com

Our General Counsel reviews all communications directed to the Audit Committee and the Chairman of the Audit Committee is promptly notified of any significant communications relating to accounting, internal accounting controls, auditing matters or other significant communication. Communications addressed to a named director are promptly sent to the director. Communications directed to thenon-management directors are promptly sent to the Lead Independent Director. All communications submitted to the Board or any committee of the Board will be compiled by the Secretary and submitted to the Lead Independent Director on a periodic basis.

All communications received as described above and intended for the Board of Directors, a committee of the Board of Directors, an individual director, or thenon-management directors as a group will be relayed to the appropriate directors.

EXECUTIVE OFFICERS

Biographical Information

The Board appoints our executive officers at its meeting immediately following our annual meeting of stockholders. Our executive officers serve at the discretion of the Board and until their successors are elected and qualified or until the earlier of their death, resignation or removal.

The following sets forth certain biographical information regarding our executive officers.officers, as of the record date. Biographical information for Norman L. Miller is included above under the caption “Board of Directors- Board of Director Nominees for 201820212019.2022.

 

Name  Age  Position  Length of Service

Norman L. Miller

  5760  President, Chief Executive Officer and Chairman of the Board  25 years 7 months

Lee A. Wright

George L. Bchara
  4637  Executive Vice President and Chief Financial Officer  1 year 114 years 6 months

Coleman R. Gaines    

Rodney D. Lastinger
  5241  President and Chief Operating Officer—Retail  1 year 410 months

George L. Bchara

Ryan Nelson
  3438  Vice President and Chief Accounting Officer  1 year 63 years 0 months

Brian A. Daly

  4750  Vice President and Chief Human Resources Officer  25 years 5 months

Todd F. Renaud

  4750  Vice President and Chief Information Officer  36 years 8 months

JamieMark L. Pierce

Prior
  33Vice President and Chief Marketing Officer4 years 3 months

Mark L. Prior

5053  Vice President, General Counsel and Secretary  1 year4 years 10 months

Lee A. Wrightwas appointed as the Company’s Executive Vice President and Chief Financial Officer in June 2016. Prior to joining the Company,Mr. Wright served as CEO of Professional Directional Enterprises, Inc., an energy services company, since 2015 and served as its President from 2012 into 2015. Prior to joining Professional Directional Enterprises, Inc., he was a Senior Managing Director at the private equity firm of Diamond Castle from 2005 to 2012. From 2000 to 2005, Mr. Wright was a Director at DLJ Merchant Banking Partners, a private equity firm. From 1996 to 2000, Mr. Wright was a VP and Associate in Credit Suisse First Boston’s (“CSFB”) Private Equity division and was an analyst from 1994 to 1996 in CSFB’s Investment Banking division. Mr. Wright holds a B.S., magna cum laude, from Washington & Lee University.

Coleman R. Gaines was appointed President and Chief Operating Officer, Retail, in February 2017. Previously, Mr. Gaines served as Executive Vice President (“EVP”) of TMX Finance (“TMX”), a consumer finance company based in Savannah, Georgia, from January 2016 to January 2017. During his employment with TMX starting in 2010, Mr. Gaines was promoted to roles of increasing responsibility, and by 2016, as EVP of Store Operations, he was responsible for leading 1,300 TMX retail stores in 18 states. Prior to TMX, Mr. Gaines worked for the Tractor Supply Company (“TSC”), a leading publicly traded U.S. retailer offering products for home improvements, agriculture, farm, lawn and garden maintenance, and livestock care, from 2002 to 2010. At TSC, Mr. Gaines’ various responsibilities as a Divisional Vice President included operating 470 TSC stores. Prior to TSC, Mr. Gaines was employed with Scotty’s Home Centers, from 1989 to 2002, starting as an assistant manager and rising to Vice President of Hardware Stores responsible for 70 regional hardware stores. Mr. Gaines holds a B.A. in Theology from Freed Hardeman University.

George L. Bchara joined the Company as Vice President and Chief Accounting Officer in December 2016. In June 2019, he was promoted to Executive Vice President and Chief Financial Officer. Prior to joining the Company, he served as Senior Vice President and Chief Accounting Officer of BankUnited, based in Miami Lakes, Florida, from March 2013 to December 2016, and served as Vice President and Loan Controller from June 2011 to February 2013. Prior to BankUnited, Mr. Bchara was a Manager with the global professional services firm, PwC, where he worked from January 2007 until May 2011. Mr. Bchara holds an M.B.A.a Masters of Business Administration in Finance and Entrepreneurial Management from The Wharton School of the University of Pennsylvania and a B.S.Bachelor of Science in Accounting and Finance from Florida State University. Mr. Bchara is a Certified Public Accountant licensed in the State of New York and a Chartered Financial Analyst charterholder.Analyst.

Rodney Lastinger joined the Company in June 2019 as President of Retail. Prior to joining the Company, he spent 18 years at Target Corporation from 2001 to 2019. From 2016 to 2019, he served as Senior Vice President, Stores and was responsible for managing the southern U.S. region, which comprised of over $21 billion in sales, 85,000 team members and 565 stores. Prior to 2016, Mr. Lastinger worked in multiple leadership roles including Senior Group Vice President, Group Vice President, District Store Director and Store Director. Mr. Lastinger holds a Master of Business Administration in Management from Stetson University and a Bachelor of Science in Marketing and Management from Florida State University.

42


Ryan Nelson joined the Company as Vice President and Controller in May 2018. In June 2019, he was promoted to Vice President and Chief Accounting Officer. Prior to joining the Company, he spent seven years with EnLink Midstream Partners, a midstream energy services company, from 2011 to 2018, where he worked in several leadership roles, including Director of Operations Accounting and Director of Financial Reporting. Mr. Nelson started his career at KPMG from 2006 to 2010. Mr. Nelson holds a Bachelor of Arts in Accounting and a Master of Accounting from the University of Mississippi and is a Certified Public Accountant.

Brian A. Dalywas appointed Vice President and Chief Human Resource Officer in November 2015. Prior to joining the Company, from June 2007 until November 2015, Mr. Daly served in several positions with DFC Global Corp, a global alternative financial services company, including as Senior Vice President and Chief People Officer. Prior to DFC Global, he worked in human resources and operational leadership roles at Marsh & McLennan, from 2006 to 2007, ARAMARK Corporation from 2000 to 2005, and Florida, Power & Light from 1997 to 1999. Mr. Daly has a B.S.Bachelor of Science in Management from the University of Richmond and an M.B.A. –a Master of Business Administration in Human Resources and Finance from the University of Florida.

Todd F. Renaud joined the Company as Vice President and Chief Information Officer in August of 2014 with over 20 years of technology experience across multiple industries. Prior to joining the Company, Mr. Renaud served as Vice President, Management Information Systems for Security Service Federal Credit Union (“SSFCU’SSFCU”). Prior to joining SSFCU in 2002, he worked as Director of Technology for Enron Corporation. Mr. Renaud is a graduate of Texas A&M University where he earned a BBABachelor of Business Administration in Management Information Systems.

Jamie L. Piercejoined the Company as Vice President and Chief Marketing Officer in January 2014 and has over 10 years of retail marketing experience. From May 2010 to January 2014, Ms. Pierce served as Senior Director of Marketing and Communication for Tempur Sealy International, Inc. From June 2007 through May 2010, Ms. Pierce held several positions at the Whirlpool Corporation in both Sales and Marketing, including Senior Sales Manager. From March 2004 through June 2007, Ms. Pierce worked for DURA Automotive Systems, Inc., where she held several positions of increasing responsibility, including Marketing Manager. Ms. Pierce holds an M.B.A. from Michigan State University. Ms. Pierce has tendered her resignation and will resign from her current position, effective on the close of business on May 3, 2018.

Mark L. Priorwas appointed the Company’s Vice President, General Counsel and Secretary in July 2016. Previously, from March 2007 to July 2016, Mr. Prior was employed by DFC Global Corp as General Counsel and Deputy General Counsel, Senior Vice President and Secretary. Previously, he was Corporate Counsel for the Philadelphia Stock Exchange from August 2005 to March 2007 and firm partner with Rubin Fortunato, P.C., from September 1998 to July 2005. Mr. Prior holds a B.A.Bachelor of Arts from Dickinson College, magna cum laude, Phi Beta Kappa, and a J.D.Juris Doctor from Penn State University – Dickinson Law. Mr. Prior is licensed in the Commonwealth of Pennsylvania.

EQUITY INCENTIVE PLANS

2020 Omnibus Equity Plan

On May 28, 2020, our stockholders approved the Conn’s, Inc. 2020 Omnibus Incentive Plan and authorized the issuance of 1,800,000 shares of our Common Stock under the plan. Upon adoption of the 2020 Omnibus Incentive Plan, all shares then available for issuance under all other existing equity plans (the Amended 2016 Omnibus Incentive Plan, the 2011 Omnibus Incentive Plan, the 2011 Non-Employee Director Restricted Stock Plan, 2003 Non-Employee Director Stock Option Plan and the Amended and Restated 2003 Incentive Stock Option Plan) were transferred to the 2020 Omnibus Incentive Plan and made available for grant. Shares awarded under the prior plans that expire or forfeit in the future will also be transferred to the 2020 Omnibus Incentive Plan and available for future grants. No future grants will be made under the prior plans. During fiscal year 2021, a total of 937,514 shares were transferred to the 2020 Omnibus Equity Plan from the prior plans as follows: 746,299 shares from the Amended 2016 Omnibus Incentive Plan, 2,224 shares from the 2011 Omnibus Incentive Plan, 48,991 shares from the 2011 Non-Employee Director Restricted Stock Plan, and 140,000 shares from the 2003 Non-Employee Director Stock Option Plan. As of January 31, 2021, there were RSUs issued that are convertible into 105,387 shares of our Common Stock.

2016 Amended Omnibus Incentive Plan

In May 2016, our stockholders approved our 2016 Omnibus Incentive Plan. The plan is administered by the Compensation Committee and replaced our 2011 Omnibus Incentive Plan and our Amended and Restated 2003 Incentive Stock Option Plan described below. The maximum number of shares of our Common Stock that could be issued under this plan, as initially adopted, was 1,200,000 shares. All options issued vest equally over a five-year term or less, as determined in connection with each grant. In May 2017, our stockholders approved our Amended 2016 Omnibus Incentive Plan. The plan is administered by the Compensation Committee and amended our 2016 Omnibus Incentive Plan. The maximum number of shares of our Common Stock that were authorized to be issued under the Amended 2016 Omnibus Incentive Plan as initially adoptedwas 2,600,000 shares.

As of January 31, 2021, there were options to purchase 720,166 shares of our Common Stock issued and outstanding under the plan. Additionally, as of January 31, 2021, there were PSUs issued that are convertible into a minimum of 0 shares and a maximum of

43


269,580 shares of our Common Stock, determinable by the performance of our Company over a period specified in the grant agreements. As of January 31, 2021, there were RSUs issued that are convertible into 644,153 shares of our Common Stock. All remaining shares that were available for grant were transferred to the 2020 Omnibus Equity Plan in fiscal year 2021. No further grants will be made under the 2016 Amended Omnibus Incentive Plan.

2011 Omnibus Incentive Plan

In May 2011, our stockholders approved our 2011 Omnibus Incentive Plan. The plan is administered by the Compensation Committee. The maximum number of shares of our Common Stock that may be issued under this plan as initially adopted, was 1,200,000 shares. RSUs that have been issued under the plan vest on various time horizons, depending on the recipient and the criteria of measurement for performance based RSUs, but none longer than five years. As of January 31, 2021, there were outstanding time-based RSUs issued under the 2011 Omnibus Incentive Plan that were convertible to 354 shares of our Common Stock. As of February 28, 2021, these RSUs have been fully converted into shares of our Common Stock. All remaining shares that were available for grant were transferred to the 2020 Omnibus Equity Plan in fiscal year 2021. No further grants will be made under the 2011 Omnibus Incentive Plan.

Amended and Restated 2003 Incentive Stock Option Plan

In February 2003, we adopted our Amended and Restated 2003 Incentive Stock Option Plan and amended the plan in both June 2004 and May 2006. The plan is administered by the Compensation Committee. Our employees and employees of our subsidiaries, subject to certain exclusions, are eligible to participate in the plan. Option grants have been made at the discretion of the Compensation Committee, for such terms as the Compensation Committee may determine, but not for terms greater than ten years from the date of grant. The maximum number of shares of our Common Stock that may be issued under this plan isas most recently adopted, was 3,859,767 shares, subject to adjustment. All options issued vest equally over a five-year term or less, as determined in connection with each grant. As of January 31, 2018, noNo further grants will be made under the Amended and Restated 2003 Incentive Stock Option Plan. Any shares subject to an award under the Amended and Restated 2003 Incentive

2011 Non-Employee Director Restricted Stock Plan that lapse, expire, are forfeited or terminated, or are settled in cash will again become available for future grant under the 2016 Amended Omnibus Incentive Plan, as discussed below.

2011 Omnibus Incentive Plan

In May 2011 our stockholders approved our 2011 Omnibus IncentiveNon-Employee Director Restricted Stock Plan. The plan is administered by the Compensation Committee. Our employees and employees ofOnly our subsidiaries, subject to certain exclusions,non-employee directors are eligible to participate in the plan. The maximum number of shares of our Common Stock that may be issued under this plan is 1,200,000 shares, subject to adjustmentas initially adopted was 300,000 shares. Only restricted stock and a cap of 300,000 to any one participant in any one taxable year.RSUs may be awarded under the Plan. RSUs that have been issued under the plan vest on various time horizons, depending on the recipient and the criteria of measurement for performance-based RSUs, but none longer than five years.have one-year vesting periods. As of January 31, 2018,2021, there were outstanding time-basedno RSUs issued and outstanding under the 2011plan. All remaining shares that were available for grant were transferred to the 2020 Omnibus IncentiveEquity Plan that are convertible to 137,834 shares of our Common Stock.in fiscal year 2021. No further grants will be made under the 2011 Omnibus IncentiveNon-Employee Director Restricted Stock Plan. Any

2003 Non-Employee Director Stock Option Plan

In February 2003, we adopted the 2003 Non-Employee Director Stock Option Plan. The maximum number of shares of our Common Stock that may be issued under this plan as initially adopted was 600,000 shares, subject to an awardadjustment. All options issued to a director when he or she becomes a director currently vest equally over a three-year term, while those issued to a director on his or her fourth anniversary date and those issued immediately following each annual stockholders’ meeting upon the director’s election by the stockholders as a director, vest on the first anniversary date of the grant. As a result of the approval by the stockholders of the 2011 Non-Employee Director Restricted Stock Plan, discussed above, the Compensation Committee determined to issue no further options under this 2003 Non-Employee Director Stock Option Plan. As of January 31, 2021, there were no options outstanding and all remaining shares that were available for grant were transferred to the 2020 Omnibus Equity Plan in fiscal year 2021. No further grants will be made under the 2011 Omnibus Incentive Plan that lapse, expire, are forfeited or terminated, or are settled in cash will again become available for future grant under the 2016 Amended Omnibus Incentive Plan, as discussed below.2003 Non-Employee Director Stock Option Plan.

Employee Stock Purchase Plan

In February 2003, we adopted our Employee Stock Purchase Plan (“ESPP”). The ESPP was amended on November 30, 2011 to permit highly compensated employees to participate. The plan is administered by the Compensation Committee. Our employees and employees of our subsidiaries, subject to certain exclusions, are eligible to participate in the plan. Eligible employees are able tomay purchase shares of our Common Stock without brokerage commissions and at a discount from market prices. The maximum number of shares of our Common Stock that may be issued under this plan is 1,267,085 shares, subject to adjustment. AtAs of January 31, 2018,2021, there were 460,441 shares issued and 806,644577,591 shares available for future issuance under the plan.

2003Non-Employee Director Stock Option Plan

In February 2003, we adopted the 2003Non-Employee Director Stock Option Plan. The maximum number of shares of our Common Stock that may be issued under this plan is 600,000 shares, subject to adjustment. All options issued to a director when he or she becomes a director currently vest equally over a three-year term, while those issued to a director on his fourth anniversary date and those issued immediately following each annual stockholders’ meeting upon the director’s election by the stockholders as a director, vest on the first anniversary date of the grant. As a result of the approval by the stockholders of the 2011Non-Employee Director Restricted Stock Plan, discussed below, the Compensation Committee has determined at this time to issue no further options under this 2003Non-Employee Director Stock Option Plan. At January 31, 2018, there were options to purchase 60,000 shares of our Common Stock under this plan and 120,000 shares remaining for future issuance under the plan.44

2011Non-Employee Director Restricted Stock Plan

In May 2011 our stockholders approved our 2011Non-Employee Director Restricted Stock Plan. The plan is administered by the Compensation Committee. Only ournon-employee directors are eligible to participate in the plan. The maximum number of shares of our Common Stock that may be issued under this plan is 300,000 shares. Only restricted stock and RSUs may be awarded under the Plan. RSUs that have been issued under the Plan haveone-year vesting periods. At January 31, 2018, there were RSUs issued to purchase 30,975 shares of our Common Stock issued and outstanding under the plan and 112,628 shares remaining for future issuance under the plan.

2016 Amended Omnibus Incentive Plan

Our Board, in March 2016, and our stockholders, in May 2016, approved our 2016 Omnibus Incentive Plan. The plan is administered by the Compensation Committee and replaces our 2011 Omnibus Incentive Plan and our Amended and Restated 2003 Incentive Stock Option Plan. The maximum number of shares of our Common Stock that may be issued under this plan, as initially adopted, is 1,200,000 shares. All options issued vest equally over a five-year term or less, as determined in connection with each grant. Our Board, in March 2017, and our stockholders, in May 2017, approved our 2016 Amended Omnibus Incentive Plan. The plan is administered by the Compensation Committee and amended our 2016 Omnibus Incentive Plan. The maximum number of shares of our Common Stock that may be issued under this plan, is 2,600,000 shares.

At January 31, 2018, there were options to purchase 100,000 shares of our Common Stock issued and outstanding under the plan. Additionally, at January 31, 2018, there were PSUs issued that are convertible into a minimum of 0 shares and a maximum of

922,761 shares of our Common Stock, determinable by the performance of our Company over a stated period of time ending May 30, 2021. At January 31, 2018, there were RSUs issued that are convertible into 1,053,200 shares of our Common Stock and 1,137,248 shares remaining for future issuance under the plan.


The table below provides information regarding the number of shares of our Common Stock that may be issued on exercise of outstanding stock options and will be issued under RSU awards under our existing equity compensation plans as of January 31, 2018.2021. These plans are as follows:

 

the Amended and Restated 2003 Incentive Stock Option Plan;

 

the 2011 Omnibus Incentive Plan;

 

the 2003 Non-Employee Director Stock Option Plan;

 

the 2011Non-Employee Director Restricted Stock Plan;

 

the 2016 Amended Omnibus Incentive Plan; and

 

2020 Omnibus Equity Plan; and

the Employee Stock Purchase Program.

EQUITY COMPENSATION PLANS

The following table summarizes information as of January 31, 2021, relating to our equity compensation plans to which grants of options, restricted stock units or other rights to acquire shares of our common stock may be granted from time to time:

Plan Category  Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options,
Warrants and
Rights
(a)
   Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
(b)
  Number of
Securities
Remaining
Available for
Future
Issuance
Under Equity
Compensation
Plans
(Excluding
Securities
Reflected in
Column (a))
 

Equity Compensation Plans Approved by Stockholders

   2,026,668   $14.39(1)   2,176,520 

Equity Compensation Plans Not Approved by Stockholders

   —      —     —   

Total

   2,026,668   $14.39   2,176,520(2) 

   Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options,
Warrants and
Rights (a) (1)
   Weighted-
Average Exercise
Price of
Outstanding
Options,
Warrants and
Rights (b) (2)
   Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans (Excluding
Securities Reflected
in Column (a))
 

Plan Category:

      

Equity compensation plans approved by stockholders

   1,739,640   $12.62    3,209,718 

Equity compensation plans not approved by stockholders

   —      —      —   
  

 

 

   

 

 

   

 

 

 

Total

   1,739,640   $12.62    3,209,718 
  

 

 

   

 

 

   

 

 

 

 

(1)

Inclusive of 189,485720,166 stock options, and 1,837,183749,894 restricted stock units.units (“RSUs”) and 269,580 performance-based RSUs (“PSUs”).

(2)$14.39 represents

The $12.62 is inclusive of the 749,894 shares related to RSUs which only have a service requirement and the 269,580 PSUs that have a service, performance and market requirement. Neither the RSUs nor PSUs have an exercise price. The weighted-average exercise price of the 189,485720,166 outstanding stock options.options is $30.49.

STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS

AND PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of our Common Stock for each person who is known by us to be the beneficial owner of more than 5% of our voting securities, for each director and named executive officer, and for all directors and executive officers as a group. Unless otherwise indicated in the footnotes, each person named below has sole voting and investment power over the shares indicated. For purposes of this table, a person is also deemed to be the “beneficial owner” of the number of shares of Common Stock that such person has the right to acquire within 60 days of April 4, 20181, 2021 through the exercise of any option, warrant or right, through the conversion of any security, through the power to revoke a trust, discretionary account, or similar arrangement, or through the automatic termination of a trust, discretionary account or similar arrangement. The percentage of total Common Stock beneficially owned is based on 31,564,72129,357,728 shares of Common Stock outstanding as of April 4, 2018,1, 2021, which is the record date for the annual meeting.

Name

  

Shares of Common
Stock Beneficially
Owned

   

Percent of
Common Stock

 

Warren A. Stephens (1)

   6,221,765    19.71

The Stephens Group, LLC and its affiliates (2)

   4,817,109    15.26

Anchorage Capital Group, L.L.C. (3)

   2,953,958    9.35

PAR Capital Management, Inc. (4)

   3,027,500    9.59

Norman L. Miller

   401,428    1.27

Douglas H. Martin (5)

   186,614    * 

Lee A. Wright

   197,645    * 

Bob L. Martin (6)

   58,945    * 

Mark L. Prior

   48,593    * 

George L. Bchara

   38,796    * 

Coleman R. Gaines

   37,014    * 

William A. Saunders, Jr.

   24,653    * 

Kelly Malson

   24,063    * 

William (David) Schofman

   20,384    * 

Oded Shein

   11,817    * 

James H. Haworth

   4,425    * 

All Directors and Executive Officers, as a group (12 persons)

   1,054,377    3.34
45


Name

  Shares of Common
Stock Beneficially
Owned
   Percent of
Common Stock
 

Warren A. Stephens (1)

   5,482,932    18.68

The Stephens Group, LLC and its affiliates (2)

   4,817,109    16.41

BlackRock, Inc. (3)

   3,013,846    10.27

Dimensional Fund Advisors LP (4)

   2,176,690    7.41

Norman L. Miller

   627,336    2.14

Lee A. Wright (5)

   247,486    * 

Douglas H. Martin (6)

   213,556    * 

Bob L. Martin

   120,810    * 

George L. Bchara

   85,258    * 

Mark L. Prior

   65,813    * 

Rodney Lastinger

   67,726    * 

William A. Saunders, Jr.

   57,594    * 

William (David) Schofman

   44,826    * 

Oded Shein

   37,759    * 

James H. Haworth

   29,607    * 

Sue E. Gove

   13,851    * 

All Directors and Executive Officers, as a group (11 persons) (7)

   1,364,136    4.65

 

*

Represents less than 1% of the outstanding Common Stock.

(1) 

The address of Warren A. Stephens is 111 Center Street, Little Rock, Arkansas, 72201. Includes 2,792,920640,516 shares owned by Stephens Investments Holdings LLC as to which Mr. Stephens, as Manager of the LLC, may be deemed to have sole voting power and sole dispositive power. Also includes 82,430 shares owned by Stephens Inc. as to which Mr. Stephens, as President of Stephens Inc., may be deemed to have sole voting power and sole dispositive power, and 203,05492,951 shares held in discretionary trading accounts on behalf of clients of Stephens Inc. as to which Mr. Stephens, as President of Stephens Inc., may be deemed to have shared voting power and shared dispositive power. Also includes 6,352 shares owned by each of Warren Miles Amerine Stephens Trust, John Calhoun Stephens Trust, and Laura Whitaker Stephens Trust, as to which Mr. Stephens, as sole Trustee of the trusts, has sole voting power and sole dispositive power. Also includes 285,000 shares owned by Warren A. Stephens Roth IRA. Also includes 279,831342,081 shares owned by Harriet C. Stephens Trust, 385,350143,333 shares owned by each of Warren A.Miles Amerine Stephens GrantorFamily Trust 430,000One and John Calhoun Stephens Family Trust One, 143,334 shares owned by WASLaura Whitaker Stephens Family Trust One, 22,619 shares owned by Warren Miles Amerine Stephens 2012 Trust, and 56,6331,500,000 shares owned by each of Warren M. A.WAS Family Trust Five, and 128,450 shares owned by Laura W. Stephens 95 Trust, John Calhoun Stephens 95 Trust, and Laura Whitaker Stephens 95WAS Grantor Trust, as to which Harriet C. Stephens is Trustee of the trusts and as to which Mr. Stephens may be deemed to have shared voting and dispositive power with Ms. Stephens. Also includes 310,346 shares owned by Warren & HarrietLaura Whitaker Stephens ChildrensWHCT Trust, Harriet C. Stephens,Co-Trustee, as as to which Mr. Stephens may be deemed to have shared voting and dispositive power with Ms. Stephens. Also includes 403,452 shares owned by Paula W. and John P. Calhoun Family Trust UID6-29-2016, as to which Mr. Stephens, as Trustee, may be deemed to have shared voting power and shared dispositive power with Ms. Stephens. Also includes 11,000 shares owned by Harriet and Warren Stephens Family Foundation as to which Mr. Stephens, asco-trustee, may be deemed to have shared voting power and shared dispositive power with Ms. Stephens. Also includes 68,706131,691 shares owned by Warren Miles Amerine Stephens Revocable Trust, and 310,346 shares owned by Warren Miles Amerine Stephens WHCT Trust, and 128,450 shares owned by Miles A. Stephens WAS Grantor Trust, as to which Warren Miles Amerine Stephens is Trustee and as to which Mr.Warren Stephens may be deemed to have shared voting and dispositive power with Warren Miles Amerine Stephens. Also includes 68,705131,690 shares owned by John Calhoun Stephens Revocable Trust, and 310,346 shares owned by John Calhoun Stephens WHCT Trust, and 128,450 shares owned by John C. Stephens WAS Grantor Trust, as to which John CalhounC. Stephens is Trustee and as to which Mr.Warren Stephens may be deemed to have shared voting and dispositive power with John CalhounC. Stephens. Also includes 68,705131,690 shares owned by Laura Whitaker Stephens Revocable Trust as to which Laura Whitaker Stephens is Trustee and as to which Mr.Warren Stephens may be deemed to have shared voting and dispositive power with Laura Whitaker Stephens. Also includes 113,744 shares owned by each of Paula W. & John P. Calhoun Family Trust – WMAS, Paula W. & John P. Calhoun Family Trust –

46


JCS, and Paula W. & John P. Calhoun Family Trust – LWS, as to which Warren Miles Amerine Stephens, John Calhoun Stephens, and Laura Whitaker Stephens are co-trustees and as to which Warren Stephens may be deemed to have shared voting and dispositive power with the co-trustees. Also includes 11,000 shares owned by Harriet and Warren Stephens Family Foundation as to which Mr. Stephens, as co-trustee, may be deemed to have shared voting power and shared dispositive power with Ms. Stephens. Also includes 23,674 shares owned by Warren A. Stephens Trust UID 9/30/87 for which Mr. Stephens is sole trustee. The information with respect to Warren A. Stephens is based on the Schedule 13D/A filed by such entities and person with the SEC on January 8, 2021.
(2) 

The Stephens Group, LLC and its affiliates address is 100 Morgan Keegan Drive, Suite 500, Little Rock, AR 72202. The beneficial ownership described above includes 4,305,343 shares owned bySG-1890, LLC, for which The Stephens Group, LLC is the manager. Wilton R. Stephens, Jr. and Elizabeth Stephens Campbell have shared power to vote and dispose of such shares as members of the Executive Committee of The Stephens Group, LLC. It also includes 54,163 shares held by Snow Lake Holdings, Inc., 50,755 shares held by the Arden Jewell Stephens 2012 Trust, 50,755 shares held by the W. R. Stephens III 2012 Trust, 373 shares held by the Arden Jewell Stephens Trust dtd 10/20/99, 373 shares held by the W. R. Stephens III Trust dtd 7/2/01, 49,655 shares held by the Elizabeth Chisum Campbell 2012 Trust, 49,655 shares held by the Susan Stephens Campbell 2012 Trust, 49,655 shares held by the Craig Dobbs Campbell, Jr. 2012 Trust, 12,720 shares held by Carol M. Stephens, 140,645 shares owned directly by the W.R. Stephens, Jr. Revocable Trust, to which Mr. Stephens, as sole trustee, has sole power to vote and dispose, 53,017 shares held by the Elizabeth S. Campbell Trust A, to which Mrs. Campbell, asco-trustee, has shared power to vote and dispose All of the above are members of a group with The Stephens Group, LLC. The information with respect to The Stephens Group, LLC are based on the Schedule 13D/A filed by such entities and person with the SEC on July 14,20, 2017.

(3) The

BlackRock, Inc. holds sole dispositive power over 3,013,846 shares of Common Stock are held for the accountand sole voting power over 2,994,528 shares of Anchorage Capital Master Offshore, Ltd., a Cayman Island exempted company (“ACMO”). Anchorage Advisors Management, L.L.C. (“Anchorage Management”) is the sole managing member of Anchorage Capital Group, L.L.C. (“Anchorage Capital Group”), which is the investment advisor to ACMO Kevin M. Ulrich is the Chief Executive Officer of Anchorage Capital Group and the senior managing member of Anchorage Management. The mailing address of ACMO is 610 Broadway, 6th Floor, New York, NY 10012.Common Stock. The information with respect to the ACMO is based onBlackRock, Inc. comes from the Schedule 13G/A filed jointly by ACMO, Anchorage Capital Group, Kevin M. Ulrich and Anchorage Managementwith the SEC on December 20, 2017.January 27, 2021. The mailing address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.

(4)PAR Investment Partners, L.P. (“PAR Investment Partners”)

Dimensional Fund Advisors LP holds sole voting power and sole dispositive power over 3,027,5002,176,690 shares of Common Stock. PAR Group, L.P. (“PAR Group”) is theStock and sole general partnervoting power over 2,103,490 shares of PAR Investment Partners, and may be deemed to be the beneficial owner of the 3,027,500 shares owned directly by PAR Investment Partners. PAR Capital Management, Inc. (“PAR Capital Management”) is the sole general partner of PAR Group, and may be deemed to be the beneficial owner of the 3,027,500 shares held beneficially by PAR Group.Common Stock. The information with respect to PAR Investment Partners, PAR Group and PAR Capital ManagementDimensional Fund Advisors LP comes from the Schedule 13G filed by such entities with the SEC on February 14, 2018.12, 2021. The mailing address of PAR Capital ManagementDimensional Fund Advisors LP is 200 Clarendon Street, FL 48, Boston, MA 02116.Building One, 6300 Bee Cave Road, Austin, Texas, 78746.

(5)

The number of shares set forth for Mr. Wright are based on the Form 4 filed on June 24, 2020 for Mr. Wright. Mr. Wright ceased to be employed by the Company on February 19, 2021 and is no longer required to report his holdings in the Company’s securities pursuant to Section 16(a) of the Securities Act..

(6)

Includes 47,00932,482 shares owned by Martin Family 2016 Trust UID6-14-2016, and and 57,795119,897 shares owned by Douglas H. Martin Trust UID4-18-2014, as as to which Mr. Doug Martin, as sole Trustee of the trusts, has sole voting power and sole dispositive power. Also includes 1,633 shares owned directly as to which Mr. Doug Martin has sole voting power and sole dispositive power. Also includes 800 shares owned by Douglas Martin Custodian for Haven Celeste Martin as to which Mr. Doug Martin has sole voting power and sole dispositive power, and 1,600 shares owned by Mr. Doug Martin’s children as to which Mr. Doug Martin has shared voting and dispositive power pursuant to powers of attorney. Also includes 38,827 shares owned through Roth IRA accounts as to which Mr. Doug Martin has sole voting and dispositive power, and includes 4,25054,077 shares owned through a traditionalRoth IRA account as to which Mr. Doug Martin has sole voting and dispositive power. Also includes 3,100 shares owned by Mr. Doug Martin’s spouse as custodian for a minorMr. Martin’s child, as to which Mr. Doug Martin may be deemed to have shared voting and dispositive power. Also includes 1,600 shares owned by a charitable foundation of which Mr. Doug Martin is aco-trustee, as as to which Mr. Doug Martin has shared voting and dispositive power. Also includes 30,000 shares whichThe information with respect to Mr. Doug Martin hasis based on the right to receive upon the exercise of options, and as to which Mr. Doug Martin would have sole voting power and sole dispositive power.Schedule 13D/A filed on February 8, 2021.

(6)(7) Includes options to purchase 30,000

Excludes shares owned by Mr. Wright, who was no longer an executive officer of Common Stock.the Company on the record date.

To our knowledge, except as noted above, no person or entity is the beneficial owner of more than 5% of the voting power of Common Stock.

Performance-Based Awards

In order to preserve the deductibility of an award under Section 162(m) of the Code, as discussed below, the Compensation Committee may determine that any award granted to the Chief Executive Officer or any of the three most highly paid executive officers other than the Chief Executive Officer or the Chief Financial Officer will be conditioned on performance goals that are based on criteria allowed under Section 162(m), including any of the following:47


Net income measures: earnings, net earnings, operating earnings, earnings before taxes, EBIT (earnings before interest and taxes), EBITA (earnings before interest, taxes, and amortization) EBITDA (earnings before interest, taxes, depreciation, and amortization), EBITDAR (earnings before interest, taxes, depreciation, amortization and rent) and earnings per share;

Stock price measures: growth measures and total stockholder return (stock price plus reinvested dividends) relative to a defined comparison group or target andprice-earnings multiples;

Cash flow measures: net cash flow, net cash flow before financing activities, economic value added (or equivalent metric), debt reduction, debt to equity ratio, or establishment or material modification of a credit facility;

Return measures: return on equity, return on average assets, return on capital,risk-adjusted return on capital, return on investors’ capital and return on average equity;

Operating measures: operating income, cash from operations,after- tax operating income, sales volumes, same store sales, production volumes, credit portfolio delinquency rate, credit portfolio netcharge-off rate, gross margins and production efficiency;

Expense measures: overhead cost and general and administrative expense;

Asset measures: specified target, or target growth in sales, stores or credit portfolio, market capitalization or market value, proceeds from dispositions, strategic acquisitions, or raising capital;

Corporate values measures: ethics, employee or customer satisfaction, legal, enterprise risk management, regulatory, and safety; or

Any combination of the above.

The Compensation Committee may select one criterion or multiple criteria for measuring performance, and the measurement may be based upon Company, segment, subsidiary, division, business unit or subunit or asset group performance, or the individual performance of the participant, either absolute or by relative comparison to other companies, other participants or any other external measure of the selected criteria. The applicable performance goals may be applied on apre- orpost-tax basis and may be adjusted in accordance with Section 162(m) to include or exclude objectively determinable components of any performance measure, including foreign exchange gains and losses, asset write downs, acquisitions and divestitures, change in fiscal year, unbudgeted capital expenditures, special charges such as restructuring or impairment charges, debt refinancing costs, extraordinary or noncash items, unusual, infrequently occurring, nonrecurring orone-time events affecting the Company or its financial statements or changes in law or accounting principles.

If an award is made on this basis, the Compensation Committee will establish goals not later than 90 days after the commencement of the period of services to which the performance criteria relate or, if earlier, within the first quarter of such period. The Compensation Committee has the right for any reason to reduce (but not increase) the award, notwithstanding the achievement of a specified goal. Any payment of an award will be conditioned on the written certification of the Compensation Committee in each case that the performance criteria and any other material conditions were satisfied.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Review and Approval of Related Party Transactions

The Board has adopted a written statement of policy with respect to all relationships and transactions in which our Company and our directors and executive officers or their immediate family members are participants. The Audit Committee reviews all related

party relationships and transactions to determine whether such persons have a direct or indirect material interest, and if so, if the transactions are at arm’s length and are acceptable to the Board of Directors. Each related party transaction must be entered into on terms that are comparable to those that could be obtained as a result of arm’s length dealings with an unrelated third party to be approved and accepted by the Board of Directors. As required under SEC rules, transactions that are reportable under Item 404(a) of RegulationS-K are disclosed in our proxy statement. The Audit Committee reviews any related person transaction that is required to be disclosed as set forth in the preceding sentence. Since the beginning of fiscal year 2018,2021, there have been no transactions reportable under Item 404(a) of RegulationS-K. In the course of its review of these relationships, the Audit Committee observes how each relates to a potential conflict of interest with the Company:

 

the nature of the related person’s interest in the transaction;

 

the material terms of the transaction, including, without limitation, the amount and type of transaction, and the timing of the entering of such transaction;

 

the importance of the transaction to the related person;

 

the importance of the transaction to the Company;

 

whether the transaction would impair the judgment of a director or executive officer to act in our best interest; and

 

any other matters the committee deems appropriate.

DELINQUENT SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS

Section 16(a) of the Exchange Act requires that our directors, executive officers as well as other persons who own more than 10% of our outstanding Common Stock file initial reports of ownership and reports of changes in ownership of our Common Stock with the SEC. Officers, directors and other stockholders who own more than 10% of our outstanding Common Stock are required by the SEC to furnish us with copies of all Section 16(a) reports they file. These reports are required to be submitted by specified deadlines, and the Company is required to report in this proxy statement any failure by directors, officers and beneficial owners of more than ten percent of its Common Stock to file such reports on a timely basis during the Company’s most recent fiscal year or, in the case of such a failure that has not previously been so disclosed, prior fiscal years.

To our knowledge, based solely on a review of reports and information furnished to us by those persons who were directors, executive officers and/or the beneficial holders of 10% or more of our Common Stock at any time during fiscal year 20182021 and upon representations from such persons, we believe that all stock ownership reports required to be filed under Section 16(a) by such reporting persons during fiscal year 20182021 were timely made, except one Form 4 filing for Mr. SchofmanDoug Martin relating to shares purchaseda transaction that occurred on December 11, 2017.September 25, 2020, with the Form 4 filing having been made on February 10, 2021.

STOCKHOLDERS SHARING THE SAME LAST NAME AND ADDRESS

To reduce the expense of delivering duplicate proxy materials to stockholders who may have more than one account holding our Common Stock but who share the same address, we have adopted a procedure approved by the SEC called “householding.” Under this procedure, certain stockholders of record who have the same address and last name, and who do not participate in electronic delivery of proxy materials, will receive only one copy of ourNotice of Internet Availability of Proxy Materials and, as applicable, any additional proxy materials that are delivered until such time as one or more of these stockholders notifies us that they want to receive separate copies. This procedure reduces duplicate mailings and saves printing costs and postage fees, as well as natural resources. Stockholders who participate in householding will continue to have access to and utilize separate proxy voting instructions.

If you receive a single set of proxy materials as a result of householding, and you would like to have separate copies of ourNotice of Internet Availability of Proxy Materials, annual report, or proxy statement mailed to you, please submit a request or notice, as applicable, to our Corporate Secretary at 2445 Technology Forest Blvd., Building 4, Suite 800, The Woodlands, Texas 77381, or call

48


our Investor Relations department at (936)230-5899, and we will promptly send you what you have requested. However, please note that if you want to receive a paper proxy or voting instruction form or other proxy materials for purposes of this year’s annual meeting, follow the instructions included in theNotice of Internet Availability of Proxy Materials that was sent to you. You can also contact our Investor Relations department at the phone number or address set forth above if you received multiple copies of the annual meeting materials and would prefer to receive a single copy in the future, or if you would like to opt out of householding for future mailings.

49


Conn’s, Inc.

20182021 ANNUAL MEETING OF STOCKHOLDERS

May  30, 201825, 2021

FORM OF PROXY CARD

YOU CAN VOTE OVER THE INTERNET OR BY TELEPHONE

QUICK * EASY * IMMEDIATE * AVAILABLE * 24 HOURS A DAY * 7 DAYS A WEEK

Conn’s, Inc. encourages you to take advantage of convenient ways to vote. If voting by proxy, you may vote over the Internet, by telephone or by mail. Your Internet or telephone vote authorizes the named proxies to vote in the same manner as if you marked, signed, and returned your proxy card. To vote over the Internet, by telephone, or by mail, please read the accompanying proxy statement and then follow these easy steps:

VOTE BY INTERNET - www.proxyvote.com

Use the Internetinternet to transmit your voting instructions and for electronic delivery of information up until 11:59 PM Eastern Time on May 29, 2018.24, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

VOTE BY PHONE – (800)690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 PM Eastern Time on May 29, 2018.24, 2021. Have your proxy card in hand when you call and then follow the instructions.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

If you would like to reduce the costs incurred by Conn’s, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in the future.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, or Conn’s Corporate Secretary, 2445 Technology Forest Blvd., Building 4, Suite 800, The Woodlands, Texas 77381.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

If you would like to reduce the costs incurred by Conn’s, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically viae-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in the future.

Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting:

The Notice and Proxy Statement, and Annual Report on Form10-K are available atwww.conns.com and www.proxyvote.com.www.proxyvote.com. By my signature below, I revoke all previous proxies and appoint Mark L. Prior or Lee A. WrightGeorge L. Bchara as proxy, with full power of substitution and resubstitution,re-substitution, to represent and to vote, as designated below, all shares of Common Stock of Conn’s, Inc. that I held of record as of the close of business on April 4, 2018,1, 2021, at the 20182021 annual meeting of stockholders to be held at 2445 Technology Forest Blvd., Building 4, Suite 800, The Woodlands, Texas 77381, on May 30, 2018,25, 2021, at 1:12:00 p.m. Central Daylight Time, or any postponements or adjournments thereof. The above named proxy is hereby instructed to vote as specified.


THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

PLEASE MARK YOUR VOTE IN THE BOXES BELOW USING DARK INK ONLY

Proposals:

 

   

FOR

  

AGAINST

  

ABSTAIN

1. To elect the eight directors listed below:
James H. Haworth      
Kelly M. MalsonSue E. Gove      
Bob L. Martin      
Douglas H. Martin      
Norman L. Miller      
William E. Saunders, Jr.      
William (David) Schofman      
Oded Shein      

FOR

  

AGAINST

  

ABSTAIN

2.To ratify the Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending January 31, 2019.2022.      
3. To approve, on anon-binding advisory basis, named executive officers’ compensation.      

IMPORTANT – This proxy must be signed and dated where provided on the reverse side.

If you execute and return this proxy it will be voted in the manner you have specified. If no specification is made, this proxy will be voted “FOR” each of the director nominees in Proposal 1, “FOR” Proposal 2 and “FOR” Proposal 3. Furthermore,3 and in theirthe discretion of the proxies are authorized to voteabove named person acting as proxy on such other business asmatters that may properly come before the meeting or any adjournment thereafter.meeting.

Please sign exactly as your name appears on this proxy. Joint owners should each sign. When signing as a fiduciary, such as an attorney, executor, administrator, trustee, guardian, etc., please give your full title as such. Please return this form of proxy promptly in the enclosed envelope.

The undersigned acknowledge(s) receipt of the Notice of 20182021 annual meeting of stockholders and the Proxy Statement accompanying such Notice, each dated April 16, 2018.13, 2021.

 

Print Name 

  Print Name 

Signature(s) 

  Signature(s) 

Date 

  Date 

54