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
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The Jones Group Inc. |
(Name of Registrant as Specified in its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
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_________________
Sincerely, Wesley R. Card Chief Executive Officer |
TO BE HELD ON JUNE 14, 2013
1. | Election of the 11 nominees for director named in our proxy statement; |
2. | Ratification of the selection of BDO USA, LLP as our independent registered public accountants for 2013; |
3. | An advisory vote to approve named executive officer compensation; and |
4. | Approval of an amendment to the 2009 Long Term Incentive Plan. |
By Order of the Board of Directors Wesley R. Card Chief Executive Officer |
Dated: May 15, 2013
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Name | Number of Shares Owned (1) | Restricted Stock (2) | Percent of Outstanding Shares | ||||
Wesley R. Card | 261,836 | 1,092,531 | 1.7% | ||||
Sidney Kimmel | 1,035,034 | (3) | 17,655 | 1.3% | |||
Matthew H. Kamens | 53,335 | 17,655 | * | ||||
Gerald C. Crotty | 68,335 | 17,655 | * | ||||
Lowell W. Robinson | 47,335 | 17,655 | * | ||||
Robert L. Mettler | 58,535 | 17,655 | * | ||||
Margaret H. Georgiadis | 58,535 | (4) | 17,655 | * | |||
John D. Demsey | 7,624 | 24,281 | * | ||||
Jeffrey D. Nuechterlein | 12,624 | 24,281 | * | ||||
Ann Marie C. Wilkins | 9,892 | 24,281 | * | ||||
James A. Mitarotonda | 1,834,400 | (5) | - | 2.3% | |||
John T. McClain | 123,338 | 266,305 | * | ||||
Richard L. Dickson | 79,120 | 851,004 | 1.2% | ||||
Ira M. Dansky | 67,556 | (6) | 191,192 | * | |||
Christopher R. Cade | - | 73,218 | * | ||||
Dimensional Fund Advisors LP 6300 Bee Cave Road Palisades West, Building One Austin, TX 78746 | 6,079,176 | (7) | - | 7.6% | |||
The Bank of New York Mellon Corporation One Wall Street, 31st Floor New York, NY 10286 | 5,879,907 | (8) | - | 7.3% | |||
BlackRock, Inc. 40 East 52nd Street New York, NY 10022 | 4,930,105 | (9) | - | 6.1% | |||
The Vanguard Group Inc. P.O. Box 2600, V26 Valley Forge, PA 19482 | 4,195,885 | (10) | - | 5.2% | |||
LSV Asset Management 155 N. Wacker Drive, Suite 4600 Chicago, IL 60606 | 4,081,906 | (11) | - | 5.1% | |||
AllianceBernstein L.P. 1345 Avenue of the Americas New York, NY 10105 | 4,028,489 | (12) | - | 5.0% | |||
All directors and current executive officers as a group (14 persons) | 1,883,099 | 2,653,023 | 5.6% |
(1) | Includes shares for which the named person has either sole or shared voting and investment power. Excludes shares of restricted stock and shares that can be acquired through the exercise of options. Also excludes "share units" (i.e., phantom stock) under our Deferred Compensation Plan for Outside Directors. Under that plan, non-management directors can elect to have the value of deferred amounts of all or a portion of their annual retainer and meeting attendance fees paid out based on an assumed investment in our Common Stock. The participants making that election do not have any right to vote or to receive Common Stock in connection with the assumed investments of the |
deferred amounts, and they are ultimately paid out in cash, but the assumed investments do represent an economic interest in our Common Stock. Such accounts are credited with additional share units for cash dividends paid on our Common Stock. Mr. Crotty has been credited with 19,468.607 share units under the plan as of May 2, 2013. See footnote 2 to the 2012 Director Compensation table in this proxy statement. |
(2) | Shares subject to a vesting schedule and other restrictions as to which the named individual has voting power. |
(3) | 1,035,034 shares are held by the Sidney Kimmel Revocable Indenture of Trust. |
(4) | 51,120 shares are held by Telendos, LLC. |
(5) | Amount includes 585,000 shares beneficially owned by Barington Companies Equity Partners, L.P. ("Barington Equity"), 642,200 shares beneficially owned by Barington SPV I, L.P. ("BSPV"), and 607,200 shares beneficially owned by an account that Barington Companies Investors, LLC ("BCI") manages on behalf of Hartz Capital Investments, LLC (the "Hartz Account"). Mr. Mitarotonda is the Chairman of the Board, President and Chief Executive Officer of BCI, the general partner of Barington Equity and BSPV. Mr. Mitarotonda is also the managing member of BCI. As the general partner of Barington Equity and BSPV and the investment advisor to the Hartz Account, BCI may be deemed to beneficially own the 585,000 shares beneficially owned by Barington Equity and the 642,200 shares beneficially owned by BSPV and may be deemed to share beneficial ownership of the 607,200 shares owned by the Hartz Account by virtue of its authority to vote and dispose of such shares. BCI is a majority-owned subsidiary of Barington Capital Group, L.P. ("Barington Capital"). As the majority member of BCI, Barington Capital may be deemed to beneficially own the 585,000 shares beneficially owned by Barington Equity and the 642,200 shares beneficially owned by BSPV and may be deemed to share beneficial ownership of the 607,200 shares owned by the Hartz Account. The general partner of Barington Capital is LNA Capital Corp. ("LNA Capital"). Mr. Mitarotonda is the sole stockholder and director of LNA Capital. As the general partner of Barington Capital, LNA Capital may be deemed to beneficially own the 585,000 shares beneficially owned by Barington Equity and the 642,200 shares beneficially owned by BSPV and may be deemed to share beneficial ownership of the 607,200 shares owned by the Hartz Account. As the sole stockholder and director of LNA Capital, Mr. Mitarotonda may be deemed to beneficially own the 585,000 shares beneficially owned by Barington Equity and the 642,200 shares beneficially owned by BSPV and may be deemed to share beneficial ownership of the 607,200 shares owned by the Hartz Account. Mr. Mitarotonda disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. |
(6) | 67,556 shares are held by the Ira Martin Dansky Revocable Trust. |
(7) | Based solely upon information reported in Schedule 13G, filed with the SEC on February 11, 2013, reporting beneficial ownership as of December 31, 2012 by Dimensional Fund Advisors LP ("DFA"). According to the filing, the shares reported are owned by four investment companies, to which DFA furnishes investment advice, and by certain other commingled group trusts and separate accounts, for which DFA serves as investment manager. DFA has sole power to vote or to direct the vote of 5,987,631 shares and sole power to dispose or to direct the disposition of 6,079,176 shares. DFA disclaims beneficial ownership of all such shares. |
(8) | Based solely upon information reported in Scheduled 13G, filed with the SEC on February 4, 2013, reporting beneficial ownership as of December 31, 2012 by The Bank of New York Mellon Corporation ("BNYM") and the following direct or indirect subsidiaries of BNYM, filing jointly: BNY Mellon, National Association, BNY Mellon Trust of Delaware, The Boston Company Asset Management LLC, The Dreyfus Corporation, Mellon Capital Management Corporation, Pershing LLC, B.N.Y. Holdings (Delaware) Corporation, MAM (MA) Holding Trust, MBC Investments Corporation and Pershing Group LLC. According to the filing, the shares reported are beneficially owned by BNYM and its direct or indirect subsidiaries in their various fiduciary capacities. BONYM has sole power to vote or direct the vote of 5,834,633 shares, shared power to vote or direct the vote of 2,685 shares, sole power to dispose or direct the disposition of 5,863,515 shares, and shared power to dispose or direct the disposition of 15,335 shares. |
(9) | Based solely upon information reported in Amendment No. 3 to Schedule 13G, filed with the SEC on February 5, 2013, reporting beneficial ownership as of December 31, 2012. |
(10) | Based solely upon information reported in Schedule 13G, filed with the SEC on February 13, 2013, reporting beneficial ownership as of December 31, 2012. According to the filing, The Vanguard Group Inc. ("TVG") has sole power to vote or direct the vote of 129,777 shares, sole power to dispose or direct the disposition of 4,069,108 shares, and shared power to dispose or direct the disposition of 126,777 shares. Of the shares reported, Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of TVG, is the beneficial owner of 126,777 shares as a result of its serving as investment manager of collective trust accounts, and Vanguard Investments Australia, Ltd., a wholly-owned |
subsidiary of TVG, is the beneficial owner of 3,000 shares as a result of its serving as investment manager of Australian investment offerings. |
(11) | Based solely upon information reported in Schedule 13G, filed with the SEC on February 2, 2013, reporting beneficial ownership as of December 31, 2012. |
(12) | Based solely upon information reported in Amendment No. 1 to Schedule 13G, filed with the SEC on February 12, 2013, reporting beneficial ownership as of December 31, 2012. According to the filing, AllianceBernstein L.P. is a majority-owned subsidiary of AXA Financial, Inc. and an indirect majority-owned subsidiary of AXA SA but operates under independent management and makes independent decisions from AXA SA and AXA Financial and their respective subsidiaries. AllianceBernstein has sole power to dispose or to direct the disposition of 3,364,999 shares and has sole power to vote or to direct the vote of 4,028,489 shares. Gerald C. Crotty, one of our directors, is a trustee of the AXA Premier VIP Trust, for which AXA Equitable Life Insurance Company serves as investment manager. In his role as trustee, Mr. Crotty neither directs the investment nor directs the voting of portfolio securities of the Trust. |
Name | Age | Other Positions with Jones and Principal Occupation | Has served as director since | |||
Wesley R. Card | 65 | Chief Executive Officer | 2007 | |||
Sidney Kimmel | 85 | Chairman of the Board* | 1975 | |||
Matthew H. Kamens | 61 | Attorney | 2001 | |||
Gerald C. Crotty | 61 | President of Weichert Enterprise, LLC | 2005 | |||
Lowell W. Robinson | 64 | Former Chief Financial Officer and Chief Operating Officer of MIVA, Inc. | 2005 | |||
Robert L. Mettler | 72 | Retired President of Special Projects of Macy's, Inc. | 2009 | |||
Margaret H. Georgiadis | 49 | President, Americas, Google Inc. | 2009 | |||
John D. Demsey | 57 | Group President, The Estée Lauder Companies Inc. | 2011 | |||
Jeffrey D. Nuechterlein | 55 | Managing Partner, Isis Capital LLC | 2011 | |||
Ann Marie C. Wilkins | 59 | Chief Executive Officer and President, Wilkins Management, Inc. | 2011 | |||
James A. Mitarotonda | 59 | Chairman of the Board, President and Chief Executive Officer of Barington Capital Group, L.P. | N/A |
Director | Audit Committee | Compensation Committee | Nominating/Corporate Governance Committee | |||
Wesley R. Card | ||||||
Sidney Kimmel | ||||||
Matthew H. Kamens | ||||||
Gerald C. Crotty | ** | * | ||||
Lowell W. Robinson | ** | * | ||||
Robert L. Mettler | * | ** | ||||
Margaret H. Georgiadis | * | |||||
John D. Demsey | * | |||||
Jeffrey D. Nuechterlein | * | |||||
Ann Marie C. Wilkins | * |
· | direct the grant of awards to persons who are eligible to receive awards under our 2009 Long Term Incentive Plan in connection with either the hiring or promotion of such persons and |
· | determine the number of shares covered by such awards, the types and terms of any such options to be granted and the exercise prices of such options, and the terms and conditions of vesting and the purchase price, if any, of any such grants of restricted stock or restricted stock units. |
· | grant awards to our chief executive officer or to any other eligible individual who at the time of the award is, or is reasonably expected to become, subject to the provisions of Section 16 of the Securities Exchange Act of 1934, pursuant to Rule 16a-2, |
· | during any calendar year, grant options to purchase more than 200,000 shares in the aggregate, grant more the 75,000 shares of restricted stock in the aggregate, or grant more than 75,000 restricted stock units in the aggregate or |
· | grant to any person eligible to receive an award under our 2009 Long Term Incentive Plan awards of options to purchase more than 25,000 shares in the aggregate and/or awards of more than 10,000 shares of restricted stock in the aggregate and/or awards of more than 10,000 restricted stock units in the aggregate. |
· | the candidate's unquestioned character and integrity, |
· | mature judgment, |
· | diversity of background and experience, |
· | demonstrated skills in his/her area of present or past professional, business, academic or non-profit responsibility, |
· | an ability to work effectively with others, |
· | sufficient time to devote to our affairs and |
· | freedom from conflicts of interest. |
Nominating/Corporate Governance Committee
c/o Secretary
The Jones Group Inc.
1411 Broadway, 36th Floor
New York, New York 10018
· | transactions involving purchases of our products at discounts made generally available to all employees or an identified group of employees, |
· | transactions involving compensation approved by the Compensation Committee of the Board of Directors or |
· | charitable contributions involving less than $10,000 per annum to a charitable entity of which one of our executive officers or directors, their immediate family members, or a 5% shareholder of our company is an executive officer. |
Name | Fees Earned or Paid in Cash ($)(1)(2) | Stock Awards ($)(3) | Total ($) | ||||
Sidney Kimmel | 68,000 | 99,999 | 167,999 | ||||
Matthew H. Kamens | 76,000 | 99,999 | 175,999 | ||||
Gerald C. Crotty | 115,000 | 99,999 | 214,999 | ||||
Lowell W. Robinson | 109,666 | 99,999 | 209,665 | ||||
Robert L. Mettler | 140,000 | 99,999 | 239,999 | ||||
Margaret H. Georgiadis | 86,000 | 99,999 | 185,999 | ||||
John D. Demsey | 88,000 | 99,999 | 187,999 | ||||
Jeffrey D. Nuechterlein | 88,000 | 99,999 | 187,999 | ||||
Ann Marie C. Wilkins | 86,000 | 99,999 | 185,999 | ||||
Donna F. Zarcone (4) | 45,167 | 99,999 | 145,166 |
(1) | Non-management directors receive a $50,000 annual retainer, $2,000 for attending a Board meeting and $2,000 for attending a committee meeting or a meeting of the non-management or independent directors. In addition, the Presiding Director receives an annual retainer of $25,000, the chair of the Audit Committee receives an annual retainer of $20,000, the chair of the Compensation Committee and the Nominating/Corporate Governance Committee receives an annual retainer of $15,000. Non-management directors are not compensated for participation in the conference calls with senior management that are held during months in which there is no regularly-scheduled Board meeting. |
(2) | Each non-management director may elect to defer all or a portion of his or her annual retainer and meeting attendance fees under The Jones Group Inc. Deferred Compensation Plan for Outside Directors until the earlier of his or her termination of service on the Board or a date selected by the director under the Plan. The Plan does not provide for above-market or preferential earnings. Each director can choose to invest the funds in either of the following two types of hypothetical investments: |
(3) | Each non-management director receives an annual grant of restricted common stock equal in value to $100,000, with new non-management directors receiving an initial grant equal in value to $150,000. The restricted stock awards vest in equal installments over three years. The awards are made from shares available under our 2009 Long Term Incentive Plan. The restricted stock awards have a value equal to the aggregate grant date fair value calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, "Compensation—Stock Compensation" ("ASC Topic 718"). Assumptions used in the valuation of equity-based awards are discussed in "Summary of Accounting Policies - Restricted Stock" and "Stock Options and Restricted Stock" in Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012. |
(4) | Ms. Zarcone did not stand for re-election at the 2012 Annual Meeting of Stockholders and, accordingly, ceased her service on the Board of Directors effective as of May 17, 2012. |
Name | Shares of Restricted Stock | |
Sidney Kimmel | 13,997 | |
Matthew H. Kamens | 16,037 | |
Gerald C. Crotty | 16,037 | |
Lowell W. Robinson | 16,037 | |
Robert L. Mettler | 16,037 | |
Margaret H. Georgiadis | 16,037 | |
John D. Demsey | 18,493 | |
Jeffrey D. Nuechterlein | 18,493 | |
Ann Marie C. Wilkins | 18,493 | |
Donna F. Zarcone (1) | - |
(1) | All shares of unvested restricted stock held by Ms. Zarcone on May 17, 2012, the date on which she ceased service as a director, were forfeited and cancelled as of that date. |
1. | The Audit Committee has reviewed and discussed the audited financial statements with Jones' management. |
2. | The Audit Committee has discussed with the independent registered public accountants the matters required to be discussed by Statements on Auditing Standards No. 61, as amended (AICPA Professional Standards, Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. |
3. | The Audit Committee has received the written disclosures and the letter from the independent registered public accountants required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountants' communications with the Audit Committee concerning independence, and has discussed with the independent registered public accountants the independent registered public accountants' independence. |
4. | Based on the review and discussion referred to in paragraphs 1 through 3 above, the Audit Committee recommended to the Board, and the Board has approved, that the audited financial statements be included in Jones' Annual Report on Form 10-K for the fiscal year ended December 31, 2012, for filing with the Securities and Exchange Commission. |
Audit Committee: | Lowell W. Robinson (Chairman) Margaret H. Georgiadis Jeffrey D. Nuechterlein |
Measure | 2012 | 2011 | 2010 | |||
Revenues (in millions) | $3,798.1 | $3,785.3 | $3,642.7 | |||
(Loss) Earnings Per Share | (0.72) | 0.61 | 0.62 | |||
Operating Income (in millions) | 74.7 | 140.5 | 144.9 | |||
Operating Cash Flow (in millions) | 112.7 | 271.7 | 141.3 |
· | More than 60% of the total direct compensation (i.e., salary, annual cash incentives and equity) of our named executive officers was composed of performance-based compensation. |
· | Annual cash incentives are earned based on performance against pre-established corporate financial metrics and, for certain named executive officers, against individual qualitative performance goals. |
· | For the 2012 performance year, the Committee changed the structure of awards under the annual cash incentive plan by: |
• | Introducing earnings per share ("EPS") as a third corporate financial performance metric, in addition to operating income and operating cash flow; |
• | Changing the weighting of the corporate financial performance metrics to increase the emphasis on profitability, as measured by EPS and operating income, and to reduce the emphasis on operating cash flow; and |
• | Increasing the threshold financial performance goal for operating income that must be achieved for payment of an incentive cash award to 75% of budget, from 70%. |
· | Our corporate performance with respect to operating cash flow was well above the budgeted target, and our corporate performance with respect to operating income was below the |
budgeted target but above the threshold goal, which resulted in the payment of annual cash incentive awards to our named executive officers ranging from 104% to 107% of target. |
· | Our primary long-term equity incentive program consists of performance-contingent restricted stock grants. Vesting of 50% of the shares depends on achievement of three-year cumulative operating cash flow targets. The remaining 50% is contingent on our three-year total shareholder return performance compared to a peer group of apparel, retail and footwear companies. |
· | 50% of the shares granted in 2010 were earned based on cumulative operating cash flow performance for 2010 through 2012, but since we did not achieve our objectives with respect to our cumulative total shareholder return performance for that period relative to that of our peer companies, 50% of the performance-contingent shares were forfeited. |
· | Assist us to successfully attract, retain, and motivate executives who enable us to achieve high standards of consumer satisfaction and operational excellence; and |
· | Hold our executives accountable, offer rewards for successful results and produce value for our shareholders over the long term. |
Elements | Description | 2012 Executive Compensation | ||
Base salary | ·Compensates our executives for their position and level of responsibility. ·Employment agreements define a minimum annual salary for each named executive officer. ·Committee reviews annually and may adjust salaries above the minimum, depending on individual performance, impact on the business, tenure and experience, changes in job responsibilities and market practice. | ·A salary increase was awarded to one of the named executive officers. |
Elements | Description | 2012 Executive Compensation | ||
Annual cash incentive | ·Pays cash awards if financial and, if applicable, individual performance objectives are achieved. ·Target awards were established so that total target annual cash compensation levels would be in line with the peer group (described below under "Market Data Used to Assess Compensation") when current base salaries are taken into account. ·Annual cash incentives were earned based on performance against three corporate financial metrics: operating income, operating cash flow and EPS, and for certain named executive officers, against individual qualitative performance goals. | ·Target awards for named executive officers ranged from 50% to 100% of salary. ·Our corporate performance with respect to operating cash flow was well above the budgeted target, and our corporate performance with respect to each of operating income and EPS was below the budgeted target but above the threshold goal. ·Named executive officers earned cash awards ranging from 104% to 107% of target. | ||
Performance-contingent restricted stock | ·Granted to align the interests of our executives with the interests of our stockholders. ·Value of awards depends on our stock price performance and the number of shares earned depends on the degree of achievement of three-year total shareholder return and three-year operating cash flow objectives. ·Retains our executives through three-year cliff vesting requirements. | ·Restricted stock awards to individual named executive officers ranged from $258,750 to $4 million, based on the closing price of our stock on the date of grant. The shares will vest in February 2015 if and to the extent corporate financial performance goals for the period from 2012 to 2014 are achieved. ·Only 50% of shares awarded in 2010 vested in February 2013, because cumulative total shareholder return goals for the period from 2010 to 2012 were not achieved, although cumulative operating cash flow goals were achieved. | ||
Restricted stock with time-based vesting | ·Used selectively. ·Primary purposes are for recruiting, retention and special recognition. ·Vest over two to three-year periods. | ·50,000 shares of restricted stock, which are scheduled to vest in February 2015, were awarded to Mr. Dickson as a retention device. |
Elements | Description | 2012 Executive Compensation | ||
Employee benefits | ·Named executive officers participate in the same benefit plans available to all full-time, salaried employees. ·Supplemental retirement benefits are provided to Messrs. Card and Dansky. | ·No changes in 2012. | ||
Perquisites | ·Includes car allowances or car services for named executive officers, a housing allowance, and related tax gross-up for Mr. Card and temporary living allowance and related tax gross-up for Mr. Dickson. | ·Mr. Card's housing allowance was a negotiated condition to his retention that went into effect in 2002. ·Mr. Dickson received an allowance for temporary living expenses, together with a tax-gross up payment to cover the taxable income attributable to the allowance, through April 2012. |
Named Executive Officer | 2012 Salary | 2011 Salary | Increase | |||
Wesley R. Card | $1,600,000 | $1,600,000 | $ - | |||
Richard Dickson | 1,100,000 | 1,100,000 | - | |||
John T. McClain | 650,000 | 650,000 | - | |||
Ira M. Dansky | 700,000 | 700,000 | - | |||
Christopher R. Cade | 345,000 | 330,000 | 15,000 |
Annual Cash Incentive Award for 2012 Performance Year | ||||||
Named Executive Officer | Threshold % of Salary | Target % of Salary | Maximum % of Salary | |||
Wesley R. Card | 50% | 100% | 150% | |||
Richard Dickson | 45% | 90% | 135% | |||
John T. McClain | 38% | 75% | 113% | |||
Ira M. Dansky | 25% | 50% | 75% | |||
Christopher R. Cade | 25% | 50% | 75% |
Total Company | Individual Performance Goals | |||||||
Named Executive Officer | Operating Income | Operating Cash Flow | EPS | |||||
Wesley R. Card | 50% | 35% | 15% | 0% | ||||
Richard Dickson | 50% | 35% | 15% | 0% | ||||
John T. McClain | 40% | 25% | 10% | 25% | ||||
Ira M. Dansky | 40% | 25% | 10% | 25% | ||||
Christopher R. Cade | 40% | 25% | 10% | 25% |
2012 Performance Scale (1) | 2012 Adjusted Results | % Bonus Achievement (2) | |||
Performance Metrics | Threshold Goal | Budgeted Goal | Maximum Goal | ||
Operating Income | $172.6 | $230.1 | $253.1 | $206.9 | 80% |
Operating Cash Flow | $130.1 | $150.5 | $158.7 | $256.9 | 150% |
EPS | $0.92 | $1.36 | $1.54 | $1.19 | 80% |
Combined Bonus Achievement: | 104% |
(2) | The table shows bonus achievement for Mr. Card and Mr. Dickson, and reflects that their bonuses depended entirely on corporate financial results, with no individual performance component. Potential bonus achievement for other participants, including Messrs. McClain, Dansky and Cade, was slightly different, because 75% of their bonuses depended on corporate financial results and 25% depended on individual performance. |
Apparel and Footwear Companies | Retail Companies |
Bakers Footwear Group Inc. Brown Shoe Company, Inc. 1 Carter's, Inc. 1 Coach, Inc. 1 Fossil, Inc. 1 Genesco Inc. 1 Guess?, Inc. 1 Hanesbrands Inc. 1 Fifth & Pacific Companies, Inc. Nike, Inc. Oxford Industries, Inc. PVH Corporation 1 Ralph Lauren Corporation 1 Rocky Brands, Inc. Skechers USA, Inc. Steven Madden, Ltd. V.F. Corporation 1 The Warnaco Group, Inc. 1 Wolverine World Wide, Inc. | ANN INC. 1 The Bon-Ton Stores, Inc. 1 Dillard's, Inc. 1 J.C. Penney Corporation Inc. Kohl's Corporation Macy's, Inc. Nordstrom Inc. Quiksilver, Inc. 1 Saks Incorporated 1 Sears Holdings Corporation |
1 | These companies are included in the subset of comparably-sized companies used by the Committee in 2012 to assess the total compensation of our named executive officers, as described under "Market Data Used to Assess Compensation." |
Total Shareholder Return | Cumulative Operating Cash Flow | |||
Performance Relative to Peers | Vesting | Performance Against Budget | Vesting | |
Median or Better | 100% | 100% or Better | 100% | |
40th Percentile | 75% | 90% | 75% | |
30th Percentile | 50% | 80% | 50% | |
Below 30th Percentile | 0% | Below 80% | 0% |
Metric | Goal for 2010 - 2012 | Adjusted Results | Achievement | Percent of Shares Vesting | ||||
Cumulative Operating Cash Flow | $400 Million | $605 Million | 100% x 50% weighting = | 50% | ||||
Total Shareholder Return vs. Peer Group | Equal or exceed peer group median | Below 30th percentile vs. peer group | 0% x 50% weighting = | 0% | ||||
Total | 50% |
· | Housing Allowance and Tax Gross-Up Payments: We rent an apartment in New York City for Mr. Card's use because his primary residence is not within commuting distance from our New York headquarters. We pay a tax gross-up to cover the taxable income attributable to Mr. Card's apartment. This allows him to actually receive the full benefit that we intended to deliver. The allowance and tax gross-up were negotiated conditions to his retention that went into effect in 2002. |
· | Temporary Living Allowance and Tax Gross-Up Payments: Mr. Dickson's primary residence is in California. From January through April 2012, we provided an allowance for temporary living expenses incurred by Mr. Dickson in New York City, together with a tax-gross up payment to cover the taxable income attributable to the allowance. |
· | Cars and Allowances: We provided car services to Mr. Card in New York City. All of the remaining named executive officers had a car allowance as a stipend that supplements salary, as set forth in footnote 4 to the 2012 Summary Compensation Table. |
1. | The Compensation Committee has reviewed and discussed the Company's Compensation Discussion and Analysis ("CD&A") required by Item 402(b) of Regulation S-K with management. |
2. | Based on the review and discussions referred to in paragraph 1 above, the Compensation Committee recommended to the Board of Directors that the CD&A be included in the Company's Proxy Statement and Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed with the Securities and Exchange Commission. |
The Compensation Committee: | Gerald C. Crotty (Chairman) Lowell W. Robinson Robert L. Mettler John D. Demsey |
Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(1)(2) | Stock Awards ($)(3) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(1)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings($) | All Other Compen- sation ($)(4) | Total ($) | ||||||||||||
Wesley R. Card (5) Chief Executive Officer | 2012 2011 2010 | 1,600,000 1,600,000 1,600,000 | - - - | 2,784,533 2,499,612 5,199,990 | - - - | 1,671,459 1,887,566 2,400,000 | (6) | - - - | 214,165 217,650 230,400 | 6,270,157 6,204,828 9,430,390 | (6) | ||||||||||
John T. McClain Chief Financial Officer | 2012 2011 2010 | 650,000 650,000 650,000 | - - - | 678,733 609,282 974,988 | - - - | 519,877 542,280 645,938 | - - - | 22,500 22,716 22,623 | 1,871,110 1,824,278 2,293,549 | ||||||||||||
Richard Dickson President and Chief Executive Officer - Branded Businesses | 2012 2011 2010 | 1,100,000 1,099,452 908,333 | - - 455,000 | (7) | 2,990,514 2,177,136 3,258,997 | - - - | 1,034,216 1,167,931 1,350,000 | - - - | 118,905 239,834 347,407 | 5,243,635 4,684,353 6,319,737 | |||||||||||
Ira M. Dansky Executive Vice President, General Counsel and Secretary | 2012 2011 2010 | 700,000 700,000 700,000 | - - - | 487,292 437,431 1,099,993 | - - - | 373,245 396,330 481,250 | - - - | 22,500 24,192 23,581 | 1,583,037 1,557,953 2,304,824 | ||||||||||||
Christopher R. Cade Executive Vice President, Chief Accounting Officer and Controller | 2012 2011 | 345,260 329,918 | - - | 180,126 154,665 | - - | 183,957 186,841 | - - | 22,500 22,300 | 731,843 693,724 |
(1) | Compensation deferred at the election of the named executive officer is included in the year in which it would otherwise have been reported had it not been deferred. |
(2) | Annual bonus and non-equity incentive plan compensation amounts are reported for the year earned and accrued regardless of the timing of the actual payment. See "Compensation Discussion and Analysis - Annual Cash Incentive - Annual Cash Incentives Earned for 2012 Performance" in this proxy statement. |
(3) | Reflects the aggregate grant date fair value calculated in accordance with ASC Topic 718. Amounts include both time-based restricted stock awards and restricted stock awards subject to performance conditions. For additional information concerning the restricted stock awards made to our named executive officers in 2012, see "Grants of Plan-Based Awards in 2012" in this proxy statement. The values for restricted stock awards subject to performance conditions are computed based on 100% achievement of each performance condition. The values for restricted stock awards subject to market conditions are computed based on the results of a simulation that assesses the probability of vesting. Assumptions used in the valuation of equity-based awards are discussed in "Summary of Accounting Policies - Restricted Stock" and "Stock Options and Restricted Stock" in Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012. |
(4) | The table below provides our incremental cost of the components of All Other Compensation for each of the named executive officers during 2012. We provided a car allowance to Mr. Card, car services for Mr. Card in New York City and rented an apartment in New York City that was used by Mr. Card. We also provided Mr. Card with a tax gross-up payment to cover the taxable income attributable to the apartment. We provided a car allowance to Mr. McClain, Mr. Dickson, Mr. Dansky and Mr. Cade. We provided an allowance for temporary living expenses incurred by Mr. Dickson in New York City for January 2012 through April 2012, together with a tax gross-up payment to cover the taxable income attributable to the allowance. We also provided the named executive officers with certain group life, health, disability and |
other non-cash benefits generally available to all full-time salaried employees, which are not included in this table, as permitted by SEC rules. |
Name | Housing Allowance | Car Allowance | Car Services | Temporary Living Expenses Allowance | Tax Gross-up | 401(k) Plan Contri- butions (a) | Company Product Discounts (b) | Total All Other Compen- sation | ||
Wesley R. Card | 86,299 | 22,915 | 7,540 | - | 87,411 | 10,000 | - | 214,165 | ||
John T. McClain | - | 12,500 | - | - | - | 10,000 | - | 22,500 | ||
Richard Dickson | - | 18,000 | - | 45,000 | (d) | 45,580 | (c) | 10,000 | 325 | 118,905 |
Ira M. Dansky | - | 12,500 | - | - | - | 10,000 | - | 22,500 | ||
Christopher R. Cade | - | 12,500 | - | - | - | 10,000 | - | 22,500 |
(a) | Represents our contributions on behalf of the named individuals to The Jones Group Inc. Retirement Plan, which is our 401(k) defined contribution plan. |
(b) | Represents discounts on purchases of Robert Rodriguez apparel products. Under our Robert Rodriguez discount program, senior executives are permitted to purchase products at 20% off the wholesale price. Does not include discounts on purchases of any other products of our company under discount programs that are generally available to all of our employees. |
(c) | Represents monthly allowance payments for January 2012 through April 2012, as well as monthly allowance payments for November 2011 and December 2011 in the aggregate amount of $15,000, together with a tax gross-up payment in the aggregate amount of $15,193 to cover the taxable income attributable to that amount, which were scheduled to be paid to him in 2011 but, as a result of an inadvertent error, were not paid to him until 2012. |
(5) | Mr. Card is currently our Chief Executive Officer. He served as our President and Chief Executive Officer from July 12, 2007 until February 8, 2010. |
(6) | Although Mr. Card earned a $2,400,000 annual cash incentive award for 2010, based on 2010 corporate performance targets, he voluntarily elected not to accept receipt of $400,000 of that cash award to recognize operational issues that occurred in the second half of 2010. |
(7) | Mr. Dickson was named our President and Chief Executive Officer - Branded Businesses on February 8, 2010. He received a sign-on bonus of $455,000 on that date. |
Name | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2)(3) | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | All Other Option Awards: Number of Securities Under- lying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(4) | |||||||||||||||
Thresh- old ($) | Target ($) | Maxi- mum ($) | Thresh- old (#) | Target (#) | Maxi- mum (#) | |||||||||||||||||
Wesley R. Card | 02/02/12 | 800,000 | 1,600,000 | 2,400,000 | 220,994 | 441,989 | 441,989 | - | - | - | 2,784,533 | |||||||||||
John T. McClain | 02/02/12 | 182,813 | 487,500 | 731,250 | 53,867 | 107,735 | 107,735 | - | - | - | 678,733 | |||||||||||
Richard Dickson | 02/02/12 02/02/12 | 495,000 - | 990,000 - | 1,485,000 - | 136,740 - | 273,481 - | 273,481 - | - 50,000 | (5) | - - | - - | 2,538,014 452,500 | ||||||||||
Ira M. Dansky | 02/02/12 | 131,250 | 350,000 | 525,000 | 38,674 | 77,348 | 77,348 | - | - | - | 487,292 | |||||||||||
Christopher R. Cade | 02/02/12 | 64,688 | 172,500 | 258,750 | 14,295 | 28,591 | 28,591 | - | - | - | 180,126 |
(1) | Our named executive officers participate in the 2007 Executive Annual Cash Incentive Plan (the "Incentive Plan"). Under its provisions, annual incentive awards payable in cash for a particular fiscal year may be granted to executive officers who are deemed likely to be "covered employees" as defined in the Incentive Plan and other key employees designated by the Compensation Committee and, in each case, who are approved by the Compensation Committee for participation. The performance factors applicable to awards under the Incentive Plan are determined by the Compensation Committee and communicated to each participant by the end of the first quarter of each performance period. Individual awards for any performance period may not exceed $3.0 million. The Incentive Plan is discussed in greater detail in this proxy statement under the heading "Compensation Discussion and Analysis – Annual Cash Incentive." As discussed under "Compensation Discussion and Analysis - Annual Cash Incentive," in the first quarter of 2012, the Compensation Committee established financial performance goals for 2012 cash awards to Mr. Card, Mr. Dickson, Mr. McClain, Mr. Dansky and Mr. Cade under the Incentive Plan. For participants with corporate responsibility, including Mr. Card, Mr. Dickson, Mr. McClain, Mr. Dansky and Mr. Cade, the goals were based on 2012 operating income, operating cash flow and earnings per share. In addition, for Mr. McClain, Mr. Dansky and Mr. Cade, the metrics included performance against individual qualitative goals. See "Compensation Discussion and Analysis - Annual Cash Incentive - Annual Cash Incentive Structure for 2012 Performance Year." Our performance relative to those goals was assessed in the first quarter of 2013, and the resulting cash awards paid to the named executive officers are included in the 2012 Summary Compensation Table under "Non-Equity Incentive Plan Compensation." |
(2) | Represents grants of shares of restricted common stock under our 2009 Long Term Incentive Plan. During the vesting period, the executives are the beneficial owners of the shares of restricted stock and possess all voting and dividend rights. Dividends are paid on shares of restricted stock at the same rate and at the same time as dividends are paid to all holders of common stock, except that dividends with respect to performance-based awards are accumulated but not paid out to the grantee unless and until the performance award vests. During 2012, the quarterly dividend rate was $0.05 per share. |
(3) | The restricted stock granted is subject to Jones' financial performance and time-based vesting conditions. 50% of the shares are eligible to vest if we achieve a cumulative operating cash flow target for the period January 1, 2012 through December 31, 2014. For achievement of between 80% and 100% of the target amount, a proportionate number of shares (between 50% and 100%) will be eligible to vest. The remaining 50% are eligible to vest if we achieve a certain cumulative total shareholder return for the period January 1, 2012 through December 31, 2014 as compared to a specified peer group of publicly-traded companies. If our total shareholder return for this period is in the 50th or more percentile rank, 100% of the shares will vest; if the total shareholder return is in the 40th to 49th percentile rank, 75% of these shares will vest; and if the total shareholder return is between the 30th and 39th percentile rank, 50% of these shares will vest. Interpolation applies for intermediate points. If the financial targets are achieved, the shares eligible for |
vesting would vest on the second business day immediately following our public announcement of fourth quarter financial results for 2014. |
(4) | Calculated in accordance with ASC Topic 718. |
(5) | These shares vest on the second business day immediately following our public announcement of fourth quarter financial results for 2014. |
Name | Option Awards | Stock Awards | ||||||||||||||||||
Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | 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 ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | ||||||||||||
Wesley R. Card | - | - | - | - | - | - | - | 1,026,577 | (3) | 11,353,942 | ||||||||||
John T. McClain | - | - | - | - | - | - | - | 250,228 | (4) | 2,767,522 | ||||||||||
Richard Dickson | - | - | - | - | - | 133,333 | (5) | 1,474,663 | 593,126 | (6) | 6,559,974 | |||||||||
Ira M. Dansky | - | - | - | - | - | - | - | 179,650 | (7) | 1,986,929 | ||||||||||
Christopher R. Cade | - | - | - | - | - | 7,500 | (8) | 82,950 | 48,218 | (9) | 533,291 |
(1) | Calculated by multiplying the number of shares by the closing price of our common stock on the New York Stock Exchange on December 31, 2012 ($11.06). |
(2) | Amounts for Mr. Card, Mr. Dickson, Mr. McClain and Mr. Dansky include the 50% of their 2010 restricted stock awards (133,689 shares, 61,686 shares, 32,586 shares and 23,395 shares, respectively) that did not vest, as the Compensation Committee determined that corporate performance targets applicable to that portion of the awards were not achieved. Those shares were deemed forfeited and were cancelled on January 31, 2013. |
(3) | 133,690 of these shares vested on February 15, 2013. Subject to accelerated vesting upon the occurrence of certain events, as described under "Employment and Compensation Arrangements" in this proxy statement, the remaining shares vest as follows: up to 158,605 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2013 based on achievement of a minimum cumulative operating cash flow target for the years 2011 through 2013; up to 158,604 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2013 based on achievement of a relative total shareholder return target for the years 2011 through 2013; up to 220,995 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2014 based on achievement of a minimum cumulative operating cash flow target for the years 2012 through 2014; and up to 220,994 will vest on the second business day immediately following our public announcement of fourth quarter financial results |
for 2014 based on achievement of a relative total shareholder return target for the years 2012 through 2014 (see footnote 3 to the "Grants of Plan-Based Awards in 2012" table). |
(4) | 32,587 of these shares vested on February 15, 2013. Subject to accelerated vesting upon the occurrence of certain events, as described under "Employment and Compensation Arrangements" in this proxy statement, the remaining shares vest as follows: up to 38,660 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2013 based on achievement of a minimum cumulative operating cash flow target for the years 2011 through 2013; up to 38,660 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2013 based on achievement of a relative total shareholder return target for the years 2011 through 2013; up to 53,868 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2014 based on achievement of a minimum cumulative operating cash flow target for the years 2012 through 2014; and up to 53,867 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2014 based on achievement of a relative total shareholder return target for the years 2012 through 2014 (see footnote 3 to the "Grants of Plan-Based Awards in 2012" table). |
(5) | 33,333 of these shares vested on February 15, 2013. Subject to accelerated vesting upon the occurrence of certain events, as described under "Employment and Compensation Arrangements" in this proxy statement, the remaining shares vest as follows: 50,000 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2013 and 50,000 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2014. |
(6) | 61,686 of these shares vested on February 15, 2013. Subject to accelerated vesting upon the occurrence of certain events, as described under "Employment and Compensation Arrangements" in this proxy statement, the remaining shares vest as follows: up to 98,137 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2013 based on achievement of a minimum cumulative operating cash flow target for the years 2011 through 2013; up to 98,136 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2013 based on achievement of a relative total shareholder return target for the years 2011 through 2013; up to 136,741 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2014 based on achievement of a minimum cumulative operating cash flow target for the years 2012 through 2014; and up to 136,740 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2014 based on achievement of a relative total shareholder return target for the years 2012 through 2014 (see footnote 3 to the "Grants of Plan-Based Awards in 2012" table). |
(7) | 23,396 of these shares vested on February 15, 2013. Subject to accelerated vesting upon the occurrence of certain events, as described under "Employment and Compensation Arrangements" in this proxy statement, the remaining shares vest as follows: up to 27,756 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2013 based on achievement of a minimum cumulative operating cash flow target for the years 2011 through 2013; up to 27,755 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2013 based on achievement of a relative total shareholder return target for the years 2011 through 2013; up to 38,674 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2014 based on achievement of a minimum cumulative operating cash flow target for the years 2012 through 2014; and up to 38,674 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2014 based on achievement of a relative total shareholder return target for the years 2012 through 2014 (see footnote 3 to the "Grants of Plan-Based Awards in 2012" table). |
(8) | All of these shares vested on February 15, 2013. |
(9) | Subject to accelerated vesting upon the occurrence of certain events, as described under "Employment and Compensation Arrangements" in this proxy statement, these shares vest as follows: up to 9,814 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2013 based on achievement of a minimum cumulative operating cash flow target for the years 2011 through 2013; up to 9,813 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2013 based on achievement of a relative total shareholder return target for the years 2011 through 2013; up to 14,296 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2014 based on achievement of a minimum cumulative operating cash flow target for the years 2012 through 2014; and up to 14,295 will vest on the second business day immediately following our public announcement of fourth quarter financial results for 2014 based on achievement of a relative total shareholder return target for the years 2012 through 2014 (see footnote 3 to the "Grants of Plan-Based Awards in 2012" table). |
Name | Option Awards | Stock Awards | ||||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | |||||
Wesley R. Card | - | - | 225,000 | 2,286,000 | ||||
John T. McClain | - | - | 27,500 | 279,400 | ||||
Richard Dickson | - | - | 33,333 | 338,663 | ||||
Ira M. Dansky | - | - | 48,000 | 487,680 | ||||
Christopher R. Cade | - | - | 7,500 | 76,200 |
(1) | Calculated based on the price of our common stock on the New York Stock Exchange on the vesting date. |
· | voluntary termination by the named executive officer, |
· | termination by us for cause, |
· | termination by us without cause or by the named executive officer with good reason, |
· | termination by us without cause or by the named executive officer with good reason following a change in control, |
· | termination at normal retirement, |
· | termination as a result of disability or |
· | termination as a result of death. |
Age when period of disability starts | Disability benefit payment period |
Before age 60 | Benefits paid until age 65 |
Ages 60 through 64 | Benefits paid for 60 months |
Ages 65 through 67 | Benefits paid until age 70 |
Ages 68 and over | Benefits paid for 24 months |
Payments and benefits | Voluntary termination by named executive officer | Termination by us for cause | Termination by us without cause or by the named executive officer with good reason | Termination by us without cause or by the named executive officer with good reason following a change in control | Normal retirement | Termination due to Disability | Termination due to Death | |||||
WESLEY R. CARD | ||||||||||||
Aggregate monthly cash payments | $ - | $ - | $10,500,000 | (1) | $2,500,000 | (2) | $2,500,000 | (2) | $3,300,000 | (3) | $3,300,000 | (3) |
Lump sum cash payment | - | - | 1,671,459 | (4) | 11,200,000 | (5) | - | 1,671,459 | (4) | 1,671,459 | (4) | |
Health and welfare benefits continuation | - | - | 526,515 | (6) | 462,292 | (7) | 462,292 | (7) | 526,515 | (6) | 526,515 | (6) |
Lump sum cost of insurance and retirement benefits | - | - | - | 30,527 | (8) | - | - | - | ||||
Value of accelerated stock options | - | - | - | - | - | - | - | |||||
Value of accelerated restricted stock (9) | - | - | 11,353,942 | (10) | 11,353,942 | 11,353,942 | (10) | 11,353,942 | 11,353,942 | |||
Executive outplacement services (11) | - | - | 10,000 | 10,000 | - | - | - | |||||
TOTAL: | $ - | $ - | $24,061,916 | $25,556,761 | $14,316,234 | $16,851,916 | $16,851,916 |
(1) | Represents aggregate payments of (i) monthly salary plus monthly bonus (1/12 of target bonus (last annual salary)) through June 30, 2015 plus (ii) aggregate monthly cash payments totaling $500,000 per year through December 31, 2017. |
(2) | Represents aggregate monthly payments totaling $500,000 per year through December 31, 2017. |
(3) | Represents (i) six months of salary plus (ii) aggregate monthly payments totaling $500,000 per year through December 31, 2017. |
(4) | Represents actual bonus earned for 2012. |
(5) | Represents target bonus (last annual salary) plus three times 200% of annual salary. |
(6) | Represents the present value at December 31, 2012 of health and dental insurance for Mr. Card and his wife for life, assuming a life expectancy of 82 and 85 years, respectively, a discount rate of 3.93%, an annual cost to us of $13,287 and a growth rate of 10% per year for premiums. Also includes the present value of (x) life insurance for Mr. Card under our group policies through June 30, 2015, assuming a discount rate of 3.93%, (y) our continued contributions to The Jones Group Inc. Retirement Plan with an assumed maximum amount of $10,200 annually through June 30, 2015, and (z) approximately $33,696 to provide equivalent long-term disability coverage with a total monthly benefit of $15,000 for a 60-month period. |
(7) | Represents the present value at December 31, 2012 of health and dental insurance for Mr. Card and his wife from December 31, 2012 for life, assuming a life expectancy of 82 and 85 years, respectively, a discount rate of 3.93%, an annual cost to us of $13,287 and a growth rate of 10% per year for premiums. |
(8) | Represents the present value at December 31, 2012 of our cost of continued life insurance and our continued contributions to The Jones Group Inc. Retirement Plan for Mr. Card during the period from December 31, 2012 through June 30, 2015. |
(9) | Represents the value of unvested restricted stock subject to accelerated vesting. Calculated based on the closing price of our common stock on the New York Stock Exchange on December 31, 2012 ($11.06). |
(10) | Assumes that with respect to any performance-based restricted stock, performance goals for the applicable period will be fully satisfied. |
(11) | Assumes that we reimburse Mr. Card for the maximum reimbursable amount ($10,000) under his employment agreement. |
Payments and benefits | Voluntary termination by named executive officer | Termination by us for cause | Termination by us without cause or by the named executive officer with good reason | Termination by us without cause or by the named executive officer with good reason following a change in control | Normal retirement | Termination due to Disability | Termination due to Death | |||||
JOHN T. McCLAIN | ||||||||||||
Aggregate monthly cash payments | $ - | $ - | $2,843,750 | (1) | $ - | $ - | $325,000 | (2) | $325,000 | (2) | ||
Lump sum cash payment | - | - | 487,500 | (3) | 4,387,500 | (4) | - | 487,500 | (3) | 487,500 | (3) | |
Health and welfare benefits continuation | - | - | 113,006 | (5) | - | - | - | - | ||||
Lump sum cost of insurance and retirement benefits | - | - | - | 90,920 | (6) | - | - | - | ||||
Value of accelerated stock options | - | - | - | - | - | - | - | |||||
Value of accelerated restricted stock (7) | - | - | 2,767,522 | 2,767,522 | 2,767,522 | 2,767,522 | 2,767,522 | |||||
Executive outplacement services (8) | - | - | 10,000 | 10,000 | - | - | - | |||||
TOTAL: | $ - | $ - | $6,221,778 | $7,255,942 | $2,767,522 | $3,580,022 | $3,580,022 |
(1) | Represents aggregate payments of (i) monthly salary plus monthly bonus (1/12 of target bonus (75% of last annual salary)) through June 30, 2015. |
(2) | Represents six months of salary. |
(3) | Represents target bonus (75% of last annual salary). |
(4) | Represents target bonus (75% of last annual salary) plus three times 200% of annual salary. |
(5) | Includes the present value of (x) life and health insurance for Mr. McClain under our group policies through June 30, 2013, assuming a discount rate of 3.93% and a growth rate of 8% per year for health insurance premiums, (y) our continued contributions to The Jones Group Inc. Retirement Plan with an assumed maximum amount of $10,200 annually through June 30, 2015, and (z) approximately $22,085 to provide equivalent long-term disability coverage through age 65. |
(6) | Represents the present value of our cost of continued life and health insurance and our continued contributions to The Jones Group Inc. Retirement Plan for Mr. McClain during the period from December 31, 2012 through June 30, 2015. |
(7) | Represents the value of unvested restricted stock subject to accelerated vesting. Calculated based on the closing price of our common stock on the New York Stock Exchange on December 31, 2012 ($11.06). |
(8) | Assumes that we reimburse Mr. McClain for the maximum reimbursable amount ($10,000) under his employment agreement. |
Payments and benefits | Voluntary termination by named executive officer | Termination by us for cause | Termination by us without cause or by the named executive officer with good reason | Termination by us without cause or by the named executive officer with good reason following a change in control | Normal retirement | Termination due to Disability | Termination due to Death | |||||
RICHARD DICKSON | ||||||||||||
Aggregate monthly cash payments | $ - | $ - | $4,400,000 | (1) | $ - | $ - | $550,000 | (2) | $550,000 | (2) | ||
Lump sum cash payment | - | - | 1,034,216 | (3) | 7,700,000 | (4) | - | 1,100,000 | (5) | 1,100,000 | (5) | |
Health and welfare benefits continuation | - | - | 68,870 | (6) | - | - | - | - | ||||
Lump sum cost of insurance and retirement benefits | - | - | - | 48,614 | (7) | - | - | - | ||||
Value of accelerated stock options | - | - | - | - | - | - | - | |||||
Value of accelerated restricted stock (8) | - | - | 8,034,637 | (9) | 8,034,637 | 8,034,637 | (9) | 8,034,637 | 8,034,637 | |||
Executive outplacement services (10) | - | - | 10,000 | 10,000 | - | - | - | |||||
TOTAL: | $ - | $ - | $13,547,723 | $15,793,251 | $8,034,637 | $9,684,637 | $9,684,637 |
(1) | Represents aggregate payments of monthly salary plus monthly bonus (1/12 of target bonus (last annual salary)) through December 31, 2014. |
(2) | Represents six months of salary. |
(3) | Represents actual bonus earned for 2012. |
(4) | Represents target bonus (last annual salary) plus three times 200% of annual salary. |
(5) | Represents target bonus (last annual salary). |
(6) | Includes the present value of (x) life and health insurance for Mr. Dickson under our group policies through December 31, 2013, assuming a discount rate of 3.93% and a growth rate of 8% per year for health insurance premiums, (y) our continued contributions to The Jones Group Inc. Retirement Plan with an assumed maximum amount of $10,200 annually through December 31, 2014, and (z) approximately $242 to provide equivalent long-term disability coverage through age 65. |
(7) | Represents the present value of our cost of continued life and health insurance and our continued contributions to The Jones Group Inc. Retirement Plan for Mr. Dickson during the period from December 31, 2012 through December 31, 2014. |
(8) | Represents the value of unvested restricted stock subject to accelerated vesting. Calculated based on the closing price of our common stock on the New York Stock Exchange on December 31, 2012 ($11.06). |
(9) | Assumes that with respect to any performance-based restricted stock, performance goals for the applicable period will be fully satisfied. |
(10) | Assumes that we reimburse Mr. Dickson for the maximum reimbursable amount ($10,000) under his employment agreement. |
Payments and benefits | Voluntary termination by named executive officer | Termination by us for cause | Termination by us without cause or by the named executive officer with good reason | Termination by us without cause or by the named executive officer with good reason following a change in control | Normal retirement | Termination due to Disability | Termination due to Death | |||||
IRA M. DANSKY | ||||||||||||
Aggregate monthly cash payments | $ - | $ - | $4,062,500 | (1) | $1,000,000 | (2) | $1,000,000 | (2) | $1,350,000 | (3) | $1,350,000 | (3) |
Lump sum cash payment | - | - | 373,245 | (4) | 4,725,000 | (5) | - | 373,245 | (4) | 373,245 | (4) | |
Health and welfare benefits continuation | - | - | 492,076 | (6) | 424,703 | (7) | 424,703 | (7) | 492,076 | (6) | 492,076 | (6) |
Lump sum cost of insurance and retirement benefits | - | - | - | 30,527 | (8) | - | - | - | ||||
Value of accelerated stock options | - | - | - | - | - | - | - | |||||
Value of accelerated restricted stock (9) | - | - | 1,986,929 | (10) | 1,986,929 | 1,986,929 | (10) | 1,986,929 | 1,986,929 | |||
Executive outplacement services (11) | - | - | 10,000 | 10,000 | - | - | - | |||||
TOTAL: | $ - | $ - | $6,924,750 | $8,177,159 | $3,411,632 | $4,202,250 | $4,202,250 |
(1) | Represents aggregate payments of (i) monthly salary plus monthly bonus (1/12 of target bonus (75% of last annual salary)) through June 30, 2015 plus (ii) aggregate monthly cash payments totaling $200,000 per year through December 31, 2017. |
(2) | Represents aggregate monthly cash payments totaling $200,000 per year through December 31, 2017. |
(3) | Represents (i) six months of salary plus (ii) aggregate annual cash payments totaling $200,000 per year through December 31, 2017. |
(4) | Represents actual bonus earned for 2012. |
(5) | Represents target bonus (75% of last annual salary) plus three times 200% of annual salary. |
(6) | Represents the present value at December 31, 2012 of health and dental insurance for Mr. Dansky and his wife for life, assuming a life expectancy of 83 and 85 years, respectively, a discount rate of 3.93%, an annual cost to us of $13,287 and a growth rate of 10% per year for premiums. Also includes the present value of (x) life insurance for Mr. Dansky under our group policies through June 30, 2015, assuming a discount rate of 3.93%, (y) our continued contributions to The Jones Group Inc. Retirement Plan with an assumed maximum amount of $10,200 annually through June 30, 2015 and (z) approximately $36,846 to provide equivalent long-term disability coverage with a total monthly benefit of $15,000 to age 70. |
(7) | Represents the present value at December 31, 2012 of health and dental insurance for Mr. Dansky and his wife from December 31, 2012 for life, assuming a life expectancy of 83 and 85 years, respectively, a discount rate of 3.93%, an annual cost to us of $13,287 and a growth rate of 10% per year for premiums. |
(8) | Represents the present value of our cost of continued life insurance and our continued contributions to The Jones Group Inc. Retirement Plan for Mr. Dansky during the period from December 31, 2012 through June 30, 2015. |
(9) | Represents the value of unvested restricted stock subject to accelerated vesting. Calculated based on the closing price of our common stock on the New York Stock Exchange on December 31, 2012 ($11.06). |
(10) | Assumes that with respect to any performance-based restricted stock, performance goals for the applicable period will be fully satisfied. |
(11) | Assumes that we reimburse Mr. Dansky for the maximum reimbursable amount ($10,000) under his employment agreement. |
Payments and benefits | Voluntary termination by named executive officer | Termination by us for cause | Termination by us without cause or by the named executive officer with good reason | Termination by us without cause or by the named executive officer with good reason following a change in control | Normal retirement | Termination due to Disability | Termination due to Death | |||||
CHRISTOPHER R. CADE | ||||||||||||
Aggregate monthly cash payments | $ - | $ - | $400,000 | (1) | $ - | $ - | $200,000 | (2) | $200,000 | (2) | ||
Lump sum cash payment | - | - | - | 1,000,000 | (3) | - | 200,000 | (4) | 200,000 | (4) | ||
Health and welfare benefits continuation | - | - | 23,417 | (5) | - | - | - | - | ||||
Lump sum cost of insurance and retirement benefits | - | - | - | - | - | - | - | |||||
Value of accelerated stock options | - | - | - | - | - | - | - | |||||
Value of accelerated restricted stock | - | - | 308,120 | (6) | 616,241 | (7) | 616,241 | (8) | 616,241 | (7) | 616,241 | (7) |
Executive outplacement services | - | - | - | - | - | - | - | |||||
TOTAL: | $ - | $ - | $731,537 | $1,616,241 | $616,241 | $1,016,241 | $1,016,241 |
(1) | Represents aggregate payments of monthly salary through December 31, 2013. |
(2) | Represents six months of salary. |
(3) | Represents 250% of annual salary. |
(4) | Represents target bonus (50% of last annual salary). |
(5) | Represents the present value of our cost of continued life and health insurance for Mr. Cade during the period from December 31, 2012 through December 31, 2013. |
(6) | Represents the value of one-half of outstanding unvested restricted stock subject to accelerated vesting. Calculated based on the closing price of our common stock on the New York Stock Exchange on December 31, 2012 ($11.06). |
(7) | Represents the value of unvested restricted stock subject to accelerated vesting. Calculated based on the closing price of our common stock on the New York Stock Exchange on December 31, 2012 ($11.06). |
(8) | Represents the value of unvested restricted stock subject to accelerated vesting. Calculated based on the closing price of our common stock on the New York Stock Exchange on December 31, 2012 ($11.06). Assumes that with respect to any performance-based restricted stock, performance goals for the applicable period will be fully satisfied. |
· | More than 60% of the total direct compensation (i.e., salary, annual cash incentives and equity) of our named executive officers was composed of performance-based compensation. |
· | Annual cash incentives are earned based on performance against pre-established corporate financial metrics and, for certain named executive officers, against individual qualitative performance goals. |
· | For the 2012 performance year, the Committee changed the structure of awards under the annual cash incentive plan by: |
• | Introducing earnings per share ("EPS") as a third corporate financial performance metric, in addition to operating income and operating cash flow; |
• | Changing the weighting of the corporate financial performance metrics to increase the emphasis on profitability, as measured by EPS and operating income, and to reduce the emphasis on operating cash flow; and |
• | Increasing the threshold financial performance goal for operating income that must be achieved for payment of an incentive cash award to 75% of budget, from 70%. |
· | Our corporate performance with respect to operating cash flow was well above the budgeted target, and our corporate performance with respect to operating income was below the budgeted target but above the threshold goal, which resulted in the payment of annual cash incentive awards to our named executive officers ranging from 104% to 107% of target. |
· | Our primary long-term equity incentive program consists of performance-contingent restricted stock grants. Vesting of 50% of the shares depends on achievement of three-year cumulative operating cash flow targets. The remaining 50% is contingent on our three-year total shareholder return performance compared to a peer group of apparel, retail and footwear companies. |
· | 50% of the shares granted in 2010 were earned based on cumulative operating cash flow performance for 2010 through 2012, but since we did not achieve our objectives with respect to our cumulative total shareholder return performance for that period relative to that of our peer companies, 50% of the performance-contingent shares were forfeited. |
THE ADVISORY RESOLUTION SET FORTH ABOVE.
· | assist us in successfully attracting and retaining highly talented and experienced employees and non-management directors, |
· | motivate Plan participants to achieve Jones' long-term financial and strategic objectives and |
· | align Plan participants' interests with those of our stockholders. |
· | Limitation on Short Vesting Periods. No more than 10% of the total number of shares reserved for issuance under the Plan may be granted as awards of restricted stock or restricted stock units that fully vest in fewer than three years from the date of grant. |
· | No Discount Stock Options. The Plan prohibits the granting of stock options with an exercise price of less than the fair market value of our common stock on the date of grant. |
· | No Stock Option Repricing. The Plan prohibits the repricing of stock options without the approval of stockholders. This restriction applies to both direct repricings (lowering the exercise price of an outstanding stock option) and indirect repricings (canceling an outstanding stock option and granting a replacement stock option with a lower exercise price). |
· | No Liberal Recycling Provisions. Under the Plan, the following shares will not be added back to the aggregate plan limit: (a) shares surrendered or withheld as payment of the exercise price; (b) shares surrendered or withheld to satisfy tax withholding obligations; or (c) shares subject to awards denominated in shares of common stock that were settled in cash or consideration other than shares of common stock. |
· | No Dividends on Unearned Performance-Based Awards. Dividends with respect to performance-based restricted stock and dividend equivalent payments with respect to other performance-based awards are accumulated but not paid out to the grantee unless and until the performance-based award vests. |
· | "Double Trigger" Change in Control Requirement. If equity awards under the Plan are assumed, converted or replaced in connection with a change in control, vesting will accelerate only if the grantee's employment or service is terminated (other than for cause or disability) following the change in control. A "change in control" under the Plan means consummation of an actual change in control transaction; the definition does not include events that precede or may not ultimately result in a change in control, such as stockholder approval of a merger or announcement of a tender offer. |
• | when and to whom grants will be made, |
• | the types of awards, |
• | for stock-based awards, the number of shares to be covered by the awards and the exercise price, if applicable, |
• | when awards are to vest, settle or become exercisable, including the terms and conditions of performance conditions and performance goals, if applicable, |
• | the amount of cash payable pursuant to performance-based cash awards and |
• | the circumstances under which awards are to be cancelled, forfeited, exchanged or surrendered. |
• | increase the maximum number of shares reserved for issuance under the Plan, |
• | alter the classes of persons who are eligible to receive awards under the Plan, |
• | permit the lowering of the exercise price of an outstanding option, |
• | permit the Compensation Committee to offer to grant new options in exchange for the cancellation of outstanding options with a higher exercise price, |
• | permit the Compensation Committee to offer to grant any other award in exchange for the cancellation of an outstanding option with an exercise price per share that is greater than the fair market value per share of our common stock or |
• | permit the Compensation Committee to grant awards of restricted stock and restricted stock units that will fully vest in fewer than three years from the date of grant, in excess of 10% of the total number of shares of common stock reserved for issuance under the Plan. |
• | subject to awards denominated in shares of common stock that were settled in cash or consideration other than shares of common stock, |
• | surrendered or withheld as payment of the exercise price of an award or |
• | surrendered or withheld to satisfy applicable tax withholding obligations. |
• | The maximum number of shares of common stock that may be subject to stock options granted under the Plan to a participant during any 12-month period is 500,000 shares. |
• | The maximum number of shares of common stock that may be subject to performance-based awards of restricted stock or performance-based awards of restricted stock units granted or issued under the Plan to a participant during any 12-month period is 500,000 shares. |
• | The maximum aggregate payout of performance cash awards to a participant during any performance period is $3,000,000. |
• | The maximum number of shares that may be subject to incentive stock options granted under the Plan is 462,500 shares. |
• | The aggregate fair market value (determined at the time an incentive stock option is granted) of the common stock with respect to which an incentive stock option is exercisable for the first time by a participant during any calendar year may not exceed $100,000. |
• | Not more than 10% of the total number of shares of common stock reserved for issuance under the Plan may be granted as restricted stock or restricted stock units that will fully vest in fewer than three years from the date of grant. |
• | The exercise period of stock options may not exceed seven years from the date of grant. However, in the case of an incentive stock option granted to a participant who, at the time the incentive stock option is granted, owns shares possessing 10% or more of the total combined voting power of all classes of stock of Jones or its subsidiary corporations (a "10% stockholder"), the exercise period for an incentive stock option may not exceed five years from the date of grant. |
• | If the position of a participant is terminated by us for cause or by the participant voluntarily without our consent, then immediately upon such termination, the unexercised stock options held by the participant terminate. |
• | Under other circumstances of termination of employment or service, stock option awards may be exercised (to the extent that the grantee was entitled to exercise the stock option at the time of termination) within three months after such termination but not beyond the earlier of seven years after the grant date (five years after the grant date in the case of a 10% stockholder) or the expiration of the award. |
• | Upon termination of employment or service for any reason other than death, disability or retirement, all unvested shares of restricted stock, restricted stock units and performance cash awards held by the participant are forfeited. |
• | Stock options will either vest in full or the grantee will receive an amount equal to the product of the excess of the fair market value over the exercise price per share, multiplied by the number of shares covered by the stock option. |
• | Awards of restricted stock and restricted stock units will vest in full and no longer be subject to forfeiture. |
• | Performance-based awards will be deemed to satisfy the performance goals at the maximum level of achievement. |
2012 | 2011 | ||
Audit fees (1) | $2,734,201 | $2,618,626 | |
Audit-related fees (2) | 112,000 | 776,816 | |
Tax fees (3) | 279,793 | 325,951 | |
Total | $3,125,994 | $3,721,393 |
(1) | Includes audit of financial statements, audit of internal controls, SAS 100 reviews, consultations and statutory audits. |
(2) | Includes audits of employee benefit plans and due diligence and reviews related to acquisition and disposition activities. |
(3) | Includes foreign tax compliance work, transfer pricing studies, consultations and preparation of expatriate tax returns. |
By Order of the Board of Directors Wesley R. Card Chief Executive Officer |
1. | Employment with the Company. The Director is not, and has not within the past three years been, an officer or employee of the Company, and no member of his or her Immediate Family (as defined below) is, or within the past three years has been, an executive officer of the Company. |
2. | Direct Compensation from the Company of Less than $120,000. Neither the Director nor any of his or her Immediate Family has received more than $120,000 during any 12 month period within the past three years in direct compensation from the Company. In calculating compensation, the following will be excluded: (a) Director and committee fees and expenses and pension or other forms of deferred compensation for prior service to the Company (provided such deferred compensation is not contingent in any way on continued service); (b) compensation paid to a Director for former service as an interim Chairman or interim Chief Executive Officer of the Company; and (c) compensation paid to an Immediate Family member for service as an employee (other than as an executive officer). |
3. | No Material Business Dealings. The Director is not a current employee of, and no Immediate Family member of the Director is a current executive officer of, another company (including parent and subsidiary companies within such other company's consolidated group) that has made payments to or has received payments from the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1.0 million or 2% of such other company's consolidated gross revenues (as reported for the most recently completed fiscal year of such other company). |
4. | No Affiliation with the Company's Auditor. (A) The Director is not a current partner, and no Immediate Family member of the Director is a current partner, of a firm that is the Company's internal or external auditor; (B) the Director is not a current employee of such a firm; (C) the Director has no immediate family member who is a current employee of such a firm and who personally works on the Company's audit; and (D) neither the Director nor an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on the Company's audit within that time. |
5. | No Interlocking Directorates. The Director is not nor has the Director been employed, and no Immediate Family member of the Director is or has been employed, within the past three years as an executive officer of another company where either the Company's Chief Executive Officer, |
Chief Financial Officer or other executive officer at the same time serves or served on such other company's compensation committee. |
6. | No Material Charitable Contributions. The Director has not been an executive officer of an entity to which the Company has made, within the past three years, charitable contributions in any one year exceeding the greater of (i) $1 million or (ii) 2% of the charitable entity's annual consolidated gross revenues. |
A. | References to the "Company" include The Jones Group Inc. and its subsidiaries. |
B. | The "Immediate Family" of an individual includes the individual's spouse, parents, children, siblings, mothers- and fathers-in-law, daughters- and sons-in-law, sisters- and brothers-in-law and anyone who shares the individual's home (excluding unrelated domestic employees of the individual). The Board need not consider the otherwise-disqualifying activities of an individual who dies, becomes incapacitated or otherwise (including as a result of legal separation or divorce) ceases to be an Immediate Family member prior to the time of the Board's determination for the purposes of these Independence Standards. |
2009 LONG TERM INCENTIVE PLAN
(i) | The purchase price per share of the Common Stock covered by each Option shall be established by the Committee, or, if applicable, the CEO Committee, but in no event shall it be less than the fair market value of a share of the Common Stock on the date the Option is granted. If, at the time an Option is granted, the Common Stock is publicly traded, such fair market value shall be the closing price of a share of Common Stock on such date as reported in The Wall Street Journal (or a publication or reporting service deemed equivalent to The Wall Street Journal for such purpose by the Board of Directors) for any national securities |
exchange or other securities market which at the time is included in the stock price quotations of such publication. In the event that the Committee shall determine such stock price quotation is not representative of fair market value by reason of the lack of a significant number of recent transactions or otherwise, the Committee may determine fair market value in such a manner as it shall deem appropriate under the circumstances. If, at the time an Option is granted, the Common Stock is not publicly traded, the Committee shall make a good faith attempt to determine such fair market value. |
(ii) | In the case of an employee who at the time an ISO is granted owns stock possessing more than 10% of the total combined voting power of all classes of the stock of the Company or of its parent, if any, or subsidiary corporation thereof (a "10% Holder"), the purchase price of the Common Stock covered by any ISO shall in no event be less than 110% of the fair market value of the Common Stock at the time the ISO is granted. |
(i) | Subject to the provisions of the Plan, an Option granted to an employee under the Plan shall become fully exercisable at such time or times as the Committee or, if applicable, the CEO Committee, in its sole discretion shall determine at the time of the granting of the Option or thereafter, except that in no event shall any such Option be exercisable later than seven years from the date of grant. In the case of each ISO granted to an employee, the aggregate fair market value (determined at the time the ISO is granted) of the Common Stock with respect to which the ISO is exercisable for the first time by such employee during any calendar year (under all plans of the Company and any subsidiary corporation thereof) may not exceed $100,000. The Committee, or, if applicable, the CEO Committee, may condition the grant of an Option or the right to exercise the Option upon the attainment of specified Performance Goals pursuant to Section 12 or such other factors as the Committee, or, if applicable, the CEO Committee, may determine, in its sole discretion. |
(ii) | An Option may be exercised as to any or all full shares of Common Stock as to which the Option is then exercisable. |
(iii) | The purchase price of the shares of Common Stock as to which an Option is exercised shall be paid in full in cash at the time of exercise; provided, that the purchase price may be paid (i) in whole or in part, by surrender or delivery to the Company of previously-owned securities of the Company already beneficially owned by the grantee for at least six months and having a fair market value on the date of the exercise equal to the portion of the purchase price being so paid, or (ii) in cash by a broker-dealer acceptable to the Company to whom the grantee has submitted an irrevocable notice of exercise. Fair market value shall be determined as provided in Section 5 for the determination of such value on the date of the grant. In addition, the holder shall, upon notification of the amount due and prior to or concurrently with delivery to the holder of a certificate representing such shares of Common Stock, pay promptly any amount necessary to satisfy applicable Federal, state or local tax requirements. |
(iv) | Except as provided in Sections 9 and 10, no Option may be exercised unless the original grantee thereof is then an Eligible Individual. |
(v) | The Option holder shall have the rights of a stockholder with respect to shares of Common Stock covered by an Option only upon becoming the holder of record of such shares of Common Stock. |
(vi) | Notwithstanding any other provision of this Plan, the Company shall not be required to issue or deliver any share of stock upon the exercise of an Option prior to the admission of such share to listing on any stock exchange or automated quotation system on which the Company's Common Stock may then be listed. |
(i) | In the event that any original grantee of an Option shall cease to be an Eligible Individual of the Company (or any subsidiary corporation thereof), except as set forth in Section 10, such Option may (subject to the provisions of the Plan) be exercised (to the extent that the original grantee was entitled to exercise such Option at the termination of his employment or service as a director, officer, consultant, adviser, agent or independent representative, as the case may be) at any time within three months after such termination but not more than seven years (five years in the case of a 10% Holder) after the date on which such Award was granted or the expiration of the Award, if earlier. Notwithstanding the foregoing, except as provided in Section 10, if the position of an original grantee shall be terminated by the Company or any subsidiary thereof for cause or if the original grantee terminates his employment or position voluntarily and without the written consent of the Company or any subsidiary corporation thereof, as the case may be, the Options granted to such person, whether held by such person or by a Permitted Transferee and whether vested or unvested shall, to the extent not theretofore exercised, terminate immediately upon such termination. |
(ii) | In the event any original grantee of Restricted Stock or Restricted Stock Units shall cease to be an Eligible Individual of the Company (or any subsidiary corporation thereof), except as set forth in Section 10, all shares of Restricted Stock and all Restricted Stock Units awarded to such grantee remaining subject to applicable restrictions shall be forfeited and be immediately transferred to, and reacquired by, the Company at no cost to the Company. |
(iii) | In the event any original grantee of a Performance Cash Award shall cease to be an Eligible Individual of the Company (or any subsidiary corporation thereof), except as set forth in Section 10, all unvested Performance Cash Awards awarded to such grantee shall be forfeited. |
(i) | In the case of an Option, the Option shall become immediately fully exercisable and the period for exercise provided in Section 9 shall be extended to (A) one year after the date of death of the original grantee, or (B) in the case of the permanent and total disability of the original grantee, one year after the date of permanent and total disability of the original grantee, or (C) three years in the case of a retirement, but, in any case, not more than seven years (five years in the case of a 10% Holder) after the date such Award was granted, or the expiration of the Award, if earlier, as shall be prescribed in the original grantee's Award Agreement. An Award may be exercised as set forth herein in the event of the original grantee's death, by a Permitted Transferee or the person or persons to whom the holder's rights under the Award pass by will or applicable law, or if no such person has the right, by his executors or administrators, or in the event of the original grantee's permanent and total disability, by the holder or his guardian. |
(ii) | In the case of Restricted Stock or Restricted Stock Units that are not Performance-Based Awards, the period of restrictions applicable to all unvested shares of Restricted Stock and all unvested Restricted Stock Units shall terminate on the date of termination of service as an Eligible Individual by reason of retirement, disability or death, and such shares of Restricted Stock shall become fully vested and transferable, and such Restricted Stock Units shall be considered to be earned and payable in full. |
(iii) | In the case of unvested Performance-Based Awards, the period of restrictions applicable to vesting, settlement or payment shall terminate (A) on the date of termination of service as an Eligible Individual by reason of disability or death or (B) in the case of retirement, only at such time as the Performance Goals are achieved in accordance with Section 12(e). |
(i) | each Option granted under the Plan shall (A) become immediately fully exercisable and vested or (B) terminate simultaneously with the change in control, and the Company shall pay the grantee in lieu thereof an amount equal to (x) the excess (if any) of the fair market value over the exercise price of one share of Common Stock on the date on which such event occurs, multiplied by (y) the number of shares of Common Stock subject to the Option, without regard to whether the Option is then otherwise exercisable; |
(ii) | any restrictions applicable to Restricted Stock granted under the Plan shall lapse, and such shares of Restricted Stock shall become immediately free of all restrictions and fully vested and transferable; |
(iii) | any restrictions applicable to Restricted Stock Units granted under the Plan shall lapse, such Restricted Stock Units shall become immediately free of all restrictions and considered to be earned and payable in full, and such Restricted Stock Units shall be settled in the form specified in the applicable Agreement as promptly as is practicable; |
(iv) | each outstanding Performance-Based Award shall be deemed to satisfy any applicable Performance Goals at the target level of achievement; and |
(v) | subject to Section 14, the Committee may also make additional adjustments or settlements of outstanding Awards as it deems appropriate and consistent with the Plan's purposes. |