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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 18, 2009
Jos. A. Bank Clothiers, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-23874 36-3189198
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
500 Hanover Pike
Hampstead, Maryland 21074
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410) 239-2700
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY
ARRANGEMENTS OF CERTAIN OFFICERS
Executive Management Incentive Plan
In December 2008, the Compensation Committee of the Board of Directors of Jos.
A. Bank Clothiers, Inc. (the "Company") adopted the Company's Executive
Management Incentive Plan (the "Incentive Plan"), subject to approval by the
Company's stockholders. At the Company's 2009 Annual Meeting of Stockholders,
held on June 18, 2009, the Company submitted the Incentive Plan for stockholder
approval, which approval was obtained.
The purposes of the Incentive Plan are to increase stockholder value and the
success of the Company by attracting, retaining and motivating selected
participants to achieve the Company's business and financial goals. The
Incentive Plan permits the Company to pay bonuses that meet the requirements for
qualified performance-based compensation within the meaning of Section 162(m) of
the Internal Revenue Code.
Section 162(m) of the Internal Revenue Code denies a deduction to any
publicly-held corporation (such as the Company) for compensation in excess of $1
million paid to certain executive officers in a taxable year. However, certain
kinds of compensation, including qualified "performance-based compensation," are
disregarded for purposes of the deduction limitation. The compensation paid
pursuant to the Incentive Plan will qualify as performance-based compensation
and the related compensation expense is expected to be fully deductible.
The Incentive Plan is administered by the Compensation Committee. The only
individuals eligible to participate in the Incentive Plan are the executive
officers of the Company and any other employee of the Company whose compensation
is not or may not be fully deductible under Section 162(m) or any other section
of the Internal Revenue Code absent the participation of such employee in the
Incentive Plan. Currently, the Company's Chief Executive Officer, R. Neal Black,
and four Executive Vice Presidents (Robert B. Hensley, Gary M. Merry, James W.
Thorne and David E. Ullman (together with Mr. Black, such executives are
collectively referred to as the "Executive Management Team")) are the only
employees eligible to be selected as participants. For each period of time
determined by the Compensation Committee as the period during which performance
objectives must be satisfied (a "Performance Period"), the Compensation
Committee may designate one or more eligible employees as participants.
Participation is generally designated on an annual basis. Participation in one
Performance Period does not ensure participation in future periods.
2
Under the Incentive Plan, the Compensation Committee will establish and approve
for each participant for each Performance Period one or more performance
objectives, at least one of which shall be based on the business criteria
discussed below. The Compensation Committee will also establish the maximum
amount which may be paid to each participant in the event he or she satisfies
such performance objectives for a particular Performance Period (such maximum
amount being referred to herein and in the Incentive Plan as an "Award Target").
Award Targets may be expressed as a dollar amount or as a percentage of a
participant's base salary.
The Incentive Plan sets forth a number of business criteria (the "Business
Criteria"), at least one of which must be selected by the Compensation Committee
as a basis (or the basis) for determining the amount of the Award Target which
should be paid to each participant ("Award Payment"). The Business Criteria are:
o Net income.
o Earnings before or after deduction for all or any portion of interest,
taxes, depreciation or amortization, whether on an aggregate or per
share basis.
o Increase in the trading price of the Company's stock above the trading
price at the time the criteria are established.
o Total stockholder return.
o Working capital.
o Sales.
o Expense and cost reductions or improvement in or attainment of expense
levels.
o Return ratios based on equity, investment, capital employed and/or
assets.
o Inventory levels, turns or aging.
o Operating ratios based on margin, income and/or net income.
o Market share.
o Cash flow or operating cash flow.
o The increase, decrease or ending balance of any item on the Company's
consolidated balance sheets.
o Any combination of the foregoing, including as compared to an index of
one or more peer group companies selected by the Compensation
Committee.
3
In determining whether performance objectives based on the Business Criteria
have been satisfied, the following occurrences during the Performance Period
will be disregarded: (1) changes in tax law or accounting principles that become
effective during the Performance Period; (2) extraordinary, unusual or
infrequently occurring events; (3) the disposition of a business or significant
assets; (4) gains or losses from all or certain claims and/or litigation and
insurance recoveries; (5) the impact of impairment of intangible assets; (6)
restructuring activities; (7) the impact of investments or acquisitions; and/or
(8) changes in corporate capitalization such as stock splits and certain
reorganizations. Notwithstanding the foregoing, the Compensation Committee must
select criteria that collectively satisfy the requirements of "performance-based
compensation" for the purposes of Section 162(m) of the Internal Revenue Code,
including by establishing the Award Targets at a time when the performance
relative to such targets is substantially uncertain. Moreover, at the time that
an Award Target is established, the Compensation Committee may establish a
schedule for an Award Payment based upon the partial achievement of one or more
performance objectives.
The performance objectives established by the Compensation Committee as the
bases for an Award Payment must include at least one of the Business Criteria.
Following the close of each Performance Period, the Compensation Committee shall
determine whether each Participant achieved his or her pre-established
performance objectives (including the Business Criteria). If the pre-established
Business Criteria were not satisfied, an Award Payment may not be authorized
(even if other performance objectives were satisfied). Assuming the Business
Criteria were satisfied, the Compensation Committee may authorize an Award
Payment up to, but not in excess of, the pre-established Award Target.
Notwithstanding the Compensation Committee's determination that the Business
Criteria were fully satisfied, the Compensation Committee shall nevertheless
have discretion to reduce an Award Payment and may apply subjective,
discretionary criteria for this purpose.
The Compensation Committee has the discretion to settle awards in cash, shares
of our common stock or a combination of cash and stock. Payroll and other taxes
will be withheld as required by law. The Compensation Committee may defer the
payment of awards or any portion thereof to Participants to the extent necessary
or desirable to preserve the deductibility of such amounts under Section 162(m)
of the Internal Revenue Code. In addition, the Compensation Committee may permit
Participants to defer receipt of the payment of awards that would otherwise be
delivered to a Participant to the extent permitted by the tax rules relating to
deferred compensation.
Unless terminated earlier by the Compensation Committee or the Board of
Directors, Award Payments may be made under the Incentive Plan for any Award
Targets that were established before the first annual meeting of stockholders
that occurs in 2014. The maximum amount that may be paid to any participant in
any fiscal year is $5 million.
The foregoing description of the Incentive Plan does not purport to be complete
and is qualified in its entirety by reference to the Incentive Plan which is
included as Exhibit 10.1 to this Current Report on Form 8-K and incorporated
herein by reference.
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Establishment of 2009 Goals under the Management Incentive Plan
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Each participant in the Incentive Plan is notified by the Company of a dollar
amount or the percentage of such participant's base salary up to which he is
eligible to earn as an Award Target and goals which must be achieved to be
eligible to receive a payment under the Incentive Plan. For Fiscal 2009, Mr.
Black is eligible to receive an Award Target of up to 200% of his base salary
and Messrs. Hensley, Merry, Thorne and Ullman are each eligible to receive an
Award Target of up to 65% of their respective base salaries.
The fiscal 2009 goals are (a) the Company earning net income within or above a
specified range (the "Eligibility Range"); (b) the participant receiving an
overall job performance rating of "Effective" or better (the equivalent of 3 out
of 5); (c) the participant complying with the Company's Code of Conduct,
Associate Manual and other rules, regulations and policies and not engaging in
any dishonest acts or other acts which are or may be detrimental to customers,
fellow associates or the Company; and (d) specific goals for departmental or
individual performance. For purposes of the Incentive Plan, "net income" is the
reported net income of the Company for the applicable fiscal year and is
therefore determined after deduction for all incentive plan and other
compensation expenses. The Eligibility Range has been approved by the
Compensation Committee. If the Company's net income is below the Eligibility
Range, an Award Payment may not be authorized. If the Company's net income is
within the Eligibility Range, the percentage of the Award Target which
participants are eligible to earn increases as net income increases, up to 100%.
If the Company's net income is at or above the highest level of net income
within the Eligibility Range, each participant is eligible to earn his or her
Award Target. All such Award Payments, if payable, are payable annually to each
eligible participant.
In deciding whether, and to what extent, to pay an Award Payment to each member
of the Executive Management Team (other than the Chief Executive Officer), an
important factor considered by the Compensation Committee is the Chief Executive
Officer's evaluation of the individual performance of such member of the
Executive Management Team. Generally, the Chief Executive Officer makes his
recommendation based upon his evaluation of each member of the Executive
Management Team's individual contribution to the performance of the Company and
such other factors as he may deem relevant. The final determination of all Award
Payments to the Executive Management Team is made by the Compensation Committee.
The Compensation Committee has the discretion to make Award Payments in an
amount less than the pre-established Award Targets, even if the objective
Business Criteria are achieved.
For Fiscal 2009, the Eligibility Range is $57.5 million to $63.5 million of net
income. If the Company earns less than $57.5 million of net income, no
participant is entitled to an Award Payment under the Incentive Plan. At $57.5
million of net income each participant is eligible to receive up to 20% of his
Award Target. At or above $63.5 million of net income, each participant is
eligible to receive up to 100% of his Award Target. Between $57.5 million and
$63.5 million of net income, the percentage of the Award Target which each
participant is eligible to receive will increase as net income increases.
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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Exhibit
Number Description
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10.1 Executive Management Incentive Plan
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Jos. A. Bank Clothiers, Inc.
(Registrant)
By: Charles D. Frazer
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Name: Charles D. Frazer
Title: Senior Vice President-
General Counsel
Dated: June 18, 2009
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EXHIBIT INDEX
Exhibit
Number Description
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10.1 Executive Management Incentive Plan
8