We believe it is advantageous for our Board members to serve on the boards of other public companies to obtain experience outside of our Company and our
industry. To ensure that directors have sufficient time to devote to Board matters, however, our Corporate Governance Principles provide that directors and nominees may not serve on the boards of more than three other publicly traded companies. We
have noted above under each nominee’s biography which directors serve on the boards of other publicly traded companies.
P
ROPOSAL
4 — R
ATIFICATION
OF
S
ELECTION
OF
I
NDEPENDENT
R
EGISTERED
P
UBLIC
A
CCOUNTING
F
IRM
The Audit Committee is responsible for the appointment, compensation, retention and oversight of the independent auditors
retained to audit our consolidated financial statements. The Audit Committee has selected Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending April 27, 2018. Before selecting
Ernst & Young LLP, the Audit Committee carefully considered, among other things, that firm’s qualifications as our independent registered public accounting firm and the audit scope. Although not required under Delaware law or our
governing documents, as a matter of good corporate governance, the Audit Committee has determined to submit its selection to our stockholders for ratification. In the event that this selection of the independent registered public accounting firm is
not ratified by our stockholders at the Annual Meeting, the Audit Committee will review its selection of Ernst & Young LLP.
Under our By-laws, the
ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm requires the affirmative vote of the holders of a majority of votes represented in person or by proxy and entitled to vote at the Annual
Meeting. Abstentions with respect to this proposal will be counted as votes “AGAINST” the proposal. Ernst & Young LLP will attend the Annual Meeting and will have an opportunity to make a statement.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “
FOR
” THE RATIFICATION OF ERNST & YOUNG LLP AS OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
Pre-approval of Services Performed by the Independent Registered Public Accounting Firm.
Under applicable SEC rules, the Audit
Committee is required to preapprove the audit services and permitted non-audit services performed by the independent registered public accounting firm in order to ensure that they do not impair
our auditors’ independence from us. SEC rules specify the types of non-audit services that an independent registered public accounting firm may not provide to its audit client and establish the Audit Committee’s responsibility for
administration of the engagement of the independent registered public accounting firm.
Consistent with the SEC’s rules, the Audit Committee has adopted a
policy which requires the Audit Committee to pre-approve all audit services and permitted non-audit services provided by the independent registered public accounting firm to us or any of our subsidiaries. The policy contains a list of specific audit
services, audit-related services and tax services that have been approved by the Audit Committee up to certain cost levels. This list is reviewed and approved by the Audit Committee at least annually. The preapproval of the services set forth in the
list is merely an authorization for management to potentially use the independent registered public accounting firm for such services. The Audit Committee, with input from management, has the responsibility to set the terms of the engagement and
negotiate the fees. The Audit Committee must specifically pre-approve any proposed services that are not included in the list or that will exceed the cost levels set forth on the list. The Audit Committee may delegate preapproval authority to its
Chair or another member of the Audit Committee and, if it does, the decisions of that member must be presented to the full Audit Committee at its next scheduled meeting. In no event does the Audit Committee delegate to management its responsibility
to pre-approve services to be
22 |
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performed by the independent registered public accounting firm.
All requests or applications for services to
be provided by the independent registered public accounting firm that do not require specific preapproval by the Audit Committee must be submitted to our Controller and must include a detailed description of the services to be rendered. Our
Controller will determine whether such services fall within the list of services that have been preapproved by the Audit Committee. The Audit Committee will be informed on a timely basis of any such services rendered by the independent registered
public accounting firm.
All requests or applications for services to be provided by the independent registered public accounting firm that require specific
preapproval by the Audit Committee must be submitted to the Audit Committee by both the independent registered public accounting firm and our Controller and must include a joint statement as to whether, in their views, the request or application is
consistent with the SEC’s rules on auditor independence.
Fees of the Independent Registered Public Accounting Firm.
The following table shows the fees
that we paid or accrued for the audit and other services provided by Ernst & Young LLP for fiscal years 2017, 2016, and 2015. The Audit Committee pre-approved all of the services described below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Audit Fees
|
|
|
$1,453,500
|
|
|
|
$1,796,734
|
|
|
|
$1,763,626
|
|
|
Audit-Related Fees
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$34,000
|
|
|
Tax Fees
|
|
|
$222,500
|
|
|
|
$217,500
|
|
|
|
$207,700
|
|
|
All Other Fees
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees
|
|
|
$1,676,000
|
|
|
|
$2,014,234
|
|
|
|
$2,005,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit Fees:
This category includes the audit of our annual financial statements, the audit of internal control over
financial reporting, review of financial statements included in our
quarterly reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements for
those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements and the preparation of an annual “management letter” on
internal control matters.
Audit-Related Fees:
This category consists of assurance and related services by Ernst & Young LLP that are
reasonably related to the performance of the audit or review of our financial statements and are not reported above under “
Audit Fees
.” The services for the fees disclosed under this category include benefit plan audits and
accounting consultations.
Tax Fees:
This category consists of professional services rendered by Ernst & Young LLP for tax compliance,
tax advice and tax planning. The services for the fees disclosed under this category include tax return preparation and technical tax advice.
All Other
Fees:
The entirety of the fees paid to Ernst & Young LLP is captured by the categories above. We did not incur any other fees.
23 |
P a g e
R
EPORT
O
F
T
HE
A
UDIT
C
OMMITTEE
The Audit Committee represents and assists the Board in fulfilling its oversight responsibilities for the accounting,
financial reporting and internal control functions of the Company and its consolidated subsidiaries. The Audit Committee has the sole authority and responsibility to select, appoint, compensate, evaluate and, if necessary, replace the Company’s
independent registered accounting firm. The Audit Committee also oversees the performance of the internal audit function and the portions of the Company’s compliance program with respect to legal and regulatory requirements and risk management.
Each member of the Audit Committee is financially literate and independent as determined by the Board, based upon applicable SEC laws and regulations, NASDAQ listing standards, and Company policies. The Board also determined that the chair of the
Audit Committee satisfies the attributes of an audit committee financial expert, as defined by SEC regulations.
In fulfilling its oversight responsibilities with
respect to the Company’s financial statements, the Audit Committee reviews and discusses with both management and the Company’s independent registered accounting firm all annual and quarterly financial statements (including any required
management certifications), and the Company’s quarterly earnings announcements, prior to issuance.
Management has the primary responsibility for preparing the
financial statements and complying with the reporting process, including the systems of internal controls.
The independent registered accounting firm is
responsible for expressing an opinion on the conformity of the audited financial statements with United States generally accepted
accounting principles and for providing their judgments as to the quality, not just the acceptability, of the Company’s accounting principles, and to express an opinion on the
Company’s internal control over financial reporting based on their audit.
During fiscal 2017, among other matters, the Audit Committee:
|
|
•
|
|
reviewed the quality and integrity of the Company’s accounting policies and principles and such other matters as are required to be discussed under generally accepted auditing standards, including information
concerning the scope and result of the audit of the financial statements;
|
|
|
•
|
|
received periodic updates and provided oversight with respect to management’s process to assess the adequacy of the Company’s system of internal control over financial reporting, the framework used to make the
assessment, and management’s conclusions on the effectiveness of the Company’s internal control over financial reporting;
|
|
|
•
|
|
discussed periodically with the independent registered accounting firm management’s assessment process and conclusions with respect to the Company’s internal control over financial reporting and the
independent auditors’ own evaluation of the Company’s system of internal control over financial reporting;
|
|
|
•
|
|
reviewed the qualifications, independence, and performance of the independent registered accounting firm, including recent
and historical performance on the Company’s audit, as well as discussing
|
24 |
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|
|
|
the audit fees and their connection to audit quality;
|
|
|
•
|
|
oversaw the assessment of the independent registered accounting firm’s lead partner and audit team for the fiscal year 2017 audit;
|
|
|
•
|
|
reviewed the performance of the Company’s internal audit function, which had been co-sourced to a major independent accounting firm, including the scope and overall plans for internal audit;
|
|
|
•
|
|
oversaw compliance with respect to legal and regulatory requirements and risk management;
|
|
|
•
|
|
oversaw the Company’s Enterprise Risk Management program, reporting on such matters to the full Board of Directors, discussing individual risk areas with management and monitoring effectiveness of management’s
execution of its responsibility to identify, assess, manage, and mitigate risks; and
|
|
|
•
|
|
reviewed with management the scope and effectiveness of the Company’s disclosure controls and procedures.
|
During
fiscal 2017, management advised the Audit Committee that each set of financial statements reviewed had been prepared in accordance with generally accepted accounting principles, and reviewed significant accounting and disclosure matters with the
Audit Committee. The Audit Committee discussed with Ernst & Young LLP, the Company’s independent registered accounting firm, the matters required to be discussed by Auditing Standard No. 1301, ‘‘Communications with Audit
Committees’’ issued by the Public Company Accounting Oversight Board. The Audit Committee also discussed with Ernst & Young LLP matters relating to Ernst & Young LLP’s independence from management and the Company,
including the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the Public Company Accounting Oversight Board
regarding the independent auditors’ communications with the Committee concerning independence, and has discussed with the independent auditors their independence. The Audit Committee is
responsible for approving the services provided by the independent auditor and the associated fees. The Audit Committee concluded that Ernst & Young LLP is independent from management and the Company.
The Audit Committee discussed with Ernst & Young LLP and the Company’s internal audit management the overall scope and plans for their audits. The Audit
Committee regularly monitors the Company’s compliance with Section 404 of the Sarbanes-Oxley Act. The Company uses the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) framework to evaluate the
effectiveness of internal control over financial reporting. The Audit Committee periodically reviews the suitability of this framework with management. The Audit Committee and management believe that the COSO 2013 framework is a suitable framework
for its evaluation of internal control over financial reporting because it is free from bias, permits reasonably qualitative and quantitative measurements of internal controls, is sufficiently complete so that those relevant factors that would alter
a conclusion about the effectiveness of our internal controls are not omitted and is relevant to an evaluation of internal control over financial reporting.
The
Audit Committee meets with both Ernst & Young LLP and the Company’s internal audit personnel to discuss the results of their examinations and their evaluations of the Company’s internal controls. The Audit Committee also meets in
separate private sessions periodically with Ernst & Young LLP, internal audit, chief executive officer, chief financial officer, chief accounting officer, general counsel, and other members of management as needed. The Audit Committee also
meets in executive session without
25 |
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management after most Audit Committee meetings.
In reliance upon the reviews and discussions referred to
above, the Audit Committee recommended to the Board the inclusion of the Company’s audited consolidated financial statements in the Annual Report on Form 10-K for the fiscal year ended April 28, 2017.
The Audit Committee and the Board of Directors have also recommended the selection of Ernst & Young LLP as the Company’s independent auditors for the
fiscal year ending April 27, 2018.
AUDIT COMMITTEE
Eileen A. Mallesch,
Chair
Kathleen S.
Lane
Larry S. McWilliams
Kevin M. Sheehan
This report shall not be deemed to be
incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed
filed under such acts.
26 |
P a g e
C
ORPORATE
G
OVERNANCE
Board Responsibilities
The
Board oversees, counsels and directs management in the long-term interests of our Company and our stockholders. The primary responsibilities of the Board and its committees include:
|
|
•
|
|
Strategy:
The Board actively works with management to develop annual and long-term strategies for our business. The Board and the Finance Committee evaluate, approve and monitor the achievement of our
business, strategic and financial objectives, plans and actions.
|
|
|
•
|
|
Leadership and Succession Planning:
The Board, the Compensation Committee, and the NCG Committees, are responsible for the selection, evaluation and compensation of our directors and executive
officers, including our chief executive officer. The Board and the NCG Committee also work with management in the development of succession plans for our directors and executive officers.
|
|
|
•
|
|
Operating Performance:
The Board and the Finance Committee regularly monitor our operational execution and financial performance, and discuss improvements and changes when appropriate. The Board holds
management accountable for the execution of our strategic plans. The Board and the Audit Committee also work with management in the assessment and mitigation of our major risk factors.
|
|
|
•
|
|
Governance:
The Board and the NCG Committee oversee the establishment, implementation and maintenance of policies, practices and procedures to ensure that our business is conducted with the highest
standards of ethical conduct and in conformity with applicable laws.
|
The independent directors meet in executive sessions, without management, at the start or conclusion of most Board
meetings and at other times they deem necessary or appropriate. The Lead Independent Director of the Board presides at these sessions.
Director Independence
The Board follows NASDAQ rules in determining whether our directors are “independent.” The NASDAQ rules contain both bright-line,
objective
tests
and a
subjective
test for determining who is an independent director. The
objective
tests provide specific situations where a director will not be considered independent. For example, a director is not independent if he or she is
employed by us or is a partner in or executive officer of an entity to which we make, or from which we received, payments in the current fiscal year or in any of the past three fiscal years that exceed five percent of the recipient’s
consolidated gross revenues for that year. The Board, through its Audit Committee, also reviews any related party transactions pursuant to Auditing Standard No. 18. The
subjective
test states that an independent director must be a person
who lacks a relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
The Board annually reviews the independence of each director and has determined that all of our non-employee directors qualify as independent under the objective and
subjective tests.
In evaluating independence under the subjective test, the Board reviewed and discussed all relevant facts and circumstances, including
information provided by the directors and management regarding each non-employee director’s business and
27 |
P a g e
personal activities as they relate to us. The Board considered transactions between us and entities associated with the non-employee directors or members of their immediate family. These
transactions were reviewed in the context of the NASDAQ objective tests, the special standards established by the SEC for members of audit committees, and the special standards established by the SEC and the Internal Revenue Service for compensation
committee members, as well as pursuant to Auditing Standard No. 18. In fiscal year 2017 there were no related party transactions between the Company and any of the directors or executive officers.
Board Leadership Structure
The Board is currently comprised of nine
independent directors, and two non-independent directors (due to their status as executive officers).
The current leadership structure of the Board is as follows:
|
|
•
|
|
Mr. Benham is the Executive Chair of the Board, i.e., Board Chair;
|
|
|
•
|
|
Ms. Haben is the Board’s Lead Independent Director;
|
|
|
•
|
|
Ms. Mallesch is the independent chair of the Audit Committee and the Audit Committee’s financial expert;
|
|
|
•
|
|
Mr. Williams is the independent chair of the Compensation Committee;
|
|
|
•
|
|
Mr. Elson is the independent chair of the NCG Committee; and
|
|
|
•
|
|
Mr. Benham is the chair of the Finance Committee.
|
The Board believes this structure is the most appropriate
leadership structure for us at this time. While the Board Chair is not independent due to his executive officer position, we have
|
|
•
|
|
a strong Lead Independent Director;
|
|
|
•
|
|
nine independent directors, of a total of 11 directors;
|
|
|
•
|
|
independent chairs and committee members of the Audit, Compensation, and NCG Committees, and a majority of independent directors on the Finance Committee.
|
These Board members oversee our accounting and financial reporting, operations, risk management, performance, corporate governance, compliance, financing, executive and
director compensation, as well as business strategy.
Our Board believes this structure demonstrates to all of our stakeholders, including our stockholders, that
your Board is committed to stockholder value creation, as well as engaged independent leadership in the performance of its responsibilities.
Board Committees
and Charters
The Board appoints the members of its committees and delegates various responsibilities and authority to each committee. The Board currently has
standing Audit, Compensation, Finance, and NCG Committees. Each of these committees has a chairperson, and except for the Finance Committee (whose chair is not independent), is composed solely of independent directors. Each standing Board committee
has a written charter approved by the Board. Copies of each charter are posted on our website, www.bobevansgrocery.com, in the “
Investors
” section under “
Corporate Governance
.” Each committee has the power to, as it
deems necessary, engage outside experts, advisers and counsel to assist in its work.
28 |
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The following table identifies our current committee members of, and also indicates the number of meetings held by, each
committee during fiscal 2017 (April 30, 2016 – April 28, 2017). The Board held 18 meetings during the 2017 fiscal year.
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Audit
Committee
|
|
Compensation
Committee
|
|
Finance
Committee
|
|
Nominating
and
Corporate
Governance
Committee
|
|
Douglas N.
Benham
|
|
|
|
|
|
Chair
|
|
|
|
Charles M.
Elson
|
|
|
|
●
|
|
|
|
Chair
|
|
Mary Kay
Haben
|
|
|
|
●
|
|
|
|
|
|
David W.
Head
|
|
|
|
●
|
|
●
|
|
|
|
Kathleen S.
Lane
|
|
●
|
|
|
|
|
|
●
|
|
Eileen A.
Mallesch
|
|
Chair
|
|
|
|
|
|
●
|
|
Larry S.
McWilliams
|
|
●
|
|
|
|
|
|
●
|
|
Kevin M.
Sheehan
|
|
●
|
|
|
|
●
|
|
|
|
J. Michael
Townsley
|
|
|
|
|
|
|
|
|
|
Michael F.
Weinstein
|
|
|
|
●
|
|
●
|
|
|
|
Paul S.
Williams
|
|
|
|
Chair
|
|
|
|
●
|
|
Number of
meetings
in Fiscal 2017
|
|
9
|
|
8
|
|
6
|
|
7
|
Audit Committee
.
The Audit Committee was established by the Board in accordance with
Section 3(a)(58)(A) of the Exchange Act. The Audit Committee’s primary responsibilities include:
|
|
•
|
|
Overseeing our accounting and financial reporting processes, audits of our consolidated financial statements and our internal audit function;
|
|
|
•
|
|
Directly appointing, compensating and overseeing our independent registered public accounting firm;
|
|
|
•
|
|
Assessing our risk management processes;
|
|
|
•
|
|
Instituting procedures for the receipt, retention and treatment of complaints we receive regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by employees of
concerns regarding questionable accounting or auditing matters; and
|
|
|
•
|
|
Assisting the Board in the oversight of internal control over financial reporting.
|
The Audit Committee also reviews and pre-approves all audit services and permitted non-audit services provided by our
independent registered public accounting firm to us or any of our subsidiaries and confirms that we do not engage our independent registered public accounting firm to perform any services prohibited by any applicable law, rule or regulation.
The Board has determined that each member of the Audit Committee is independent, including under the special standards established by the SEC for members of audit
committees. Each member of the Audit Committee is able to read and understand fundamental financial statements, including our balance sheets, income statements and cash flow statements. The Board has also determined that Ms. Mallesch qualifies
as an “audit committee financial expert” under SEC rules.
The Audit Committee’s responsibilities and activities are also described in detail in the
Audit Committee’s charter, available on the
29 |
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Company’s website, and under the section “—Report of the Audit Committee” above.
Compensation Committee.
The purpose of the Compensation Committee is to discharge the Board’s responsibilities relating to compensation of our executive
officers. The Compensation Committee’s primary responsibilities include:
|
|
•
|
|
Overseeing and periodically reviewing our compensation philosophy and its execution throughout our organization;
|
|
|
•
|
|
Reviewing with management and approving the general compensation policy for our executive officers;
|
|
|
•
|
|
Reviewing and approving the compensation of our executive officers in light of goals and objectives approved by the Compensation Committee;
|
|
|
•
|
|
Administering our stock-based compensation plans and approving stock-based awards;
|
|
|
•
|
|
Assessing our Company’s compensation risk management processes with the assistance of the Audit Committee;
|
|
|
•
|
|
Evaluating the need for, and terms of, the change in control/severance policy with our executive officers; and
|
|
|
•
|
|
Reviewing and making recommendations to the Board with respect to incentive compensation plans and stock-based compensation plans in accordance with applicable laws, rules and regulations.
|
The Board has determined that each member of the Compensation Committee is independent, is a “non-employee director” under SEC rules, and is an “outside
director” under applicable tax laws and regulations.
For more information on the responsibilities and activities of the Compensation Committee, including its
process for determining executive compensation and the
role of our executive officers in that process, see the sections titled “
Compensation Discussion and Analysis
,” “
Compensation Committee Report
” and
“
Executive Officer Compensation Information
” below, as well as the Compensation Committee’s charter available on the Company’s website.
The Compensation Committee engaged Pearl Meyer as its compensation consultant for the fiscal 2017 year. The Compensation Committee has determined that no conflict of
interest exists between Pearl Meyer and the Company (including the members of the Company’s Board and Company management) pursuant to Item 407(e)(3)(iv) of SEC Regulation S-K. Pearl Meyer reports directly to the Compensation Committee with
respect to executive compensation consulting services. For more information regarding the role of the compensation consultant, see the “
Compensation Discussion and Analysis
” contained in this proxy statement.
Compensation Committee Interlocks and Insider Participation.
The Compensation Committee is comprised entirely of independent directors. In addition, there are no
relationships among our executive officers, members of the committee or entities whose executives serve on the Board or the committee that require disclosure under applicable regulations of the SEC.
Finance Committee.
The Finance Committee reviews and recommends matters related to our capital structure, including the issuance of debt and equity securities;
banking arrangements, including the investment of corporate cash; and management of the corporate debt structure. In addition, the Finance Committee reviews and approves material finance and other cash management transactions. The Finance Committee
is also responsible for overseeing and advising the Board on:
|
|
•
|
|
Assessing capital expenditures, operating income, cash flow, cash management and working capital;
|
30 |
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|
|
•
|
|
Reviewing investment strategies and policies;
|
|
|
•
|
|
Assessing the dividend payment policy;
|
|
|
•
|
|
Reviewing plans to repurchase the Company stock;
|
|
|
•
|
|
Assessing adjustments to our capital structure;
|
|
|
•
|
|
Assessing annual and five-year capital plans and specific capital plan investments;
|
|
|
•
|
|
Assessing financial aspects of insurance and risk management;
|
|
|
•
|
|
Reviewing our actual and forecasted operating performance;
|
|
|
•
|
|
Reviewing our annual earnings guidance; and
|
|
|
•
|
|
Reviewing financial aspects of proposed mergers, acquisitions, divestitures, strategic investments, collaborations, and joint ventures.
|
The Board has determined, with the exception of Mr. Benham, that each member of the Finance Committee is independent.
Nominating and Corporate Governance Committee.
The purpose of the NCG Committee is to identify and recommend to the Board qualified individuals for nomination,
election or appointment as directors and executive officers, succession planning for the Board and for our executive officers, and compensation policies for the Board, such as:
|
|
•
|
|
Devising and implementing processes for the recruitment, selection and retention of directors;
|
|
|
•
|
|
Reviewing and making recommendations to the Board regarding the organizational structure of the Board and its committees and succession plans for the Board;
|
|
|
•
|
|
Reviewing and making recommendations to the Board and executive management regarding our organizational structure and
|
|
|
|
succession plans for our executive officers; and
|
|
|
•
|
|
Reviewing and making recommendations to the Board regarding the compensation structure and policies of the Board and its committees.
|
The NCG Committee has retained the services of Pearl Meyer, a compensation-consulting firm, to assist the Committee with its responsibilities related to board
compensation. Pearl Meyer reports directly to the NCG Committee with respect to Board compensation consulting services. Before retaining Pearl Meyer, the NCG Committee determined that Pearl Meyer was independent.
The NCG Committee is also responsible for overseeing and advising the Board on corporate governance matters and practices, including:
|
|
•
|
|
Developing, reviewing and assessing corporate governance guidelines and principles;
|
|
|
•
|
|
Reviewing and assessing our compliance with SEC and NASDAQ rules and other applicable legal requirements pertaining to corporate governance;
|
|
|
•
|
|
Reviewing procedures designed to identify and, when appropriate, in cooperation with the Audit Committee, reviewing and approving any related person transactions.
|
The NCG Committee’s charter, available on the Company’s website, describes its responsibilities and activities in more detail. In carrying out its
responsibilities to identify, evaluate and recommend director nominees, the NCG Committee considers factors it deems appropriate, including, without limitation: judgment, skill, diversity, independence, accountability, strength of character,
31 |
P a g e
experience with businesses and organizations of comparable size, experience with a publicly traded company, professional accomplishments, education, experience and skills relative to other Board
members, desirability of the candidate’s membership on the Board and any committees of the Board, demonstrated leadership ability, existing relationships with us and potential conflicts of interest, and the ability to represent all of our
stockholders. While the Board does not have a formal policy on diversity, the NCG Committee takes into account the existing diversity reflected in the members of the Board, including their professional experience, skills, backgrounds and viewpoints,
as well as in
gender, ethnicity and national origin. Depending on the current needs of the Board, the NCG Committee may weigh certain factors more or less heavily.
In considering candidates for the Board, the NCG Committee will evaluate the entirety of each candidate’s credentials. However, there are no specific minimum qualifications that must be met by a NCG Committee-recommended nominee. Nevertheless,
the NCG Committee does believe that all members of the Board should have the highest character and integrity, business experience, a reputation for working constructively with others, sufficient time to devote to Board matters and no conflict of
interest that would interfere with their performance as directors or service on Board committees.
The NCG Committee considers candidates recommended by our
stockholders and evaluates them using the same criteria as for other candidates. The NCG Committee also has used, and may in the future use, third party search firms to identify potential director candidates.
A stockholder who wants to recommend a prospective nominee for consideration by the NCG Committee should submit the candidate’s name, address and qualifications to
Corporate Secretary at Bob Evans Farms, Inc.,
8111 Smith’s Mill Road, New Albany, Ohio 43054, as described below under the section titled “
Stockholder Proposals for the 2018 Annual Meeting
”.
Voting Standards for Director Elections.
Our By-laws provide for a majority voting standard in uncontested director elections. Under these provisions, any
director nominee in an uncontested election will be elected to the Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election at any meeting for the election of directors at which a quorum is
present (with abstentions and broker non-votes not counted as votes cast either “FOR” or “AGAINST” such election). In addition, our By-laws provided that before any incumbent director may be nominated for
re-election by the Board in an uncontested election, he or she must submit an irrevocable letter of resignation that would become effective if the director fails to receive the required majority vote in a director election, and the Board accepts the
resignation in accordance with policies and procedures adopted by the Board for such purposes.
In the event any incumbent director nominee does not receive the
requisite majority vote, our NCG Committee and the Board will consider whether to accept such director’s resignation in light of the best interests of our Company and our stockholders. The NCG Committee and the Board will make the decision
based on the consideration of any factors they determine to be appropriate and relevant, including any stated reasons why stockholders voted against the incumbent director (and any alternatives for addressing those reasons). Thereafter, the Board
will act upon the resignation, taking into account the recommendation of the NCG Committee, and will publicly disclose (by a press release, a filing with the SEC or other broadly disseminated means of communication) its decision regarding the
tendered resignation and the rationale behind the decision within
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90 days of the certification of the election results. In such event, if the Board accepts the resignation, the nominee will no longer serve on the Board, and if the Board rejects the resignation,
the nominee will continue to serve until his or her successor has been duly elected and qualified or until his or her earlier disqualification, death, resignation or removal.
Board Meetings and Attendance at Annual Meetings of Stockholders.
The Board and its committees meet throughout the year on a set schedule, also hold special
meetings, and act by consent from time to time as appropriate. The Board held 18 meetings during the fiscal year ended April 28, 2017. Each director is expected to attend each meeting of the Board and the committees on which he or she serves.
In the fiscal year ended April 28, 2017, every director attended at least 75 percent of the meetings of the Board and the committees on which he or she served. According to our Corporate Governance Principles, each director is expected to
attend each Annual Meeting of our stockholders. All of our incumbent directors attended our last Annual Meeting of Stockholders held in August 2016.
Resignation, Retirement and Term Limits for Directors.
When a director’s principal occupation or business association changes substantially from the
position he or she held when originally invited to join the Board, the director must tender a letter of conditional resignation to the Board and the NCG Committee. The NCG Committee will consider whether the director’s new occupation or
retirement is consistent with the rationale for originally selecting that individual, the guidelines for Board membership (e.g., independence) and the current needs of the Board. The NCG Committee will recommend action to be taken by the Board
regarding the resignation based on the circumstances of retirement, if that is the case, or in the case of a new position, the responsibility, type of position and industry involved.
Pursuant to our Corporate Governance Principles, a director may not stand for re-election to the Board after having served
on the Board for a period of 15 years. None of our nominees have tenures exceeding 15 years, and as such, are not subject to this restriction.
Stockholder
Engagement Program.
We understand the importance of a robust stockholder engagement program. To that end, our executives and management routinely attend in-person stockholder meetings and investor conferences, as well as regular meetings with
institutional stockholders. Our meetings and interactions with stockholders are designed to better understand how our stockholders perceive our Company and to provide our stockholders an opportunity to discuss matters that they believe deserve
attention. We believe our engagement has been productive and provides an open exchange of ideas and perspectives for both our stockholders and us.
Stockholder
Communications with the Board.
The Board believes it is important for stockholders to have a process to communicate with the Board, committees of the Board and
individual directors. Any stockholder may contact the Board or any member or committee of the Board by writing to them at Bob Evans Farms, Inc., Attention Corporate Secretary, 8111 Smith’s Mill Road, New Albany, Ohio 43054. E-mails may also be
sent to the Audit Committee at: audit.comm@bobevansfoods.com.
Stockholders should note that:
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All questions and concerns regarding accounting, internal accounting controls or auditing matters are promptly forwarded to the Audit Committee for review and investigation.
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Our general counsel initially reviews all other communications before they are forwarded to the appropriate
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board member(s) or party. The LID and the Executive Chair of the Board are promptly notified of any such communication that alleges misconduct on the part of top management or raises legal,
ethical or compliance concerns about our policies or practices.
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The Board Chair receives copies of all other Board-related communications on a periodic basis.
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Typically,
communications unrelated to the duties and responsibilities of the Board are not forwarded to the directors, such as product complaints and inquiries, new product and location suggestions, résumés and other forms of job inquiries,
opinion surveys and polls, business solicitations or advertisements, junk mail and mass mailings.
Board Role in Risk Oversight.
Your Board has overall
responsibility for risk oversight with a focus on the most significant risks facing our Company. Not all risks can be dealt with in the same way. Some risks may be easily perceived and controllable, and other risks are unknown. Some risks can be
avoided or mitigated by particular behavior, and some risks are unavoidable as a practical matter. For some risks, the potential adverse impact would be minor, and, as a matter of business judgment, it may not be appropriate to allocate significant
resources to avoid the adverse impact. In other cases, the adverse impact could be significant, and it is prudent to expend resources to avoid or mitigate the potential adverse impact. Sometimes a higher degree of risk may be acceptable because of a
greater perceived potential for a return on our investment.
Management is responsible for:
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Identifying risk and risk controls related to significant business activities;
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Identifying risks related to our short and long term strategies and the potential impact of such risks on our strategies; and
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Developing programs and recommendations to determine the sufficiency of risk identification, the balance of potential risk to potential return and the appropriate manner in which to control risk.
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The Board implements its risk oversight responsibilities by having management provide periodic reports on the significant risks that we face and how we control or
mitigate risk, if and when appropriate. In some cases, risk oversight is addressed as part of the full Board’s engagement with the chief executive officer and management. In other cases, a Board committee is responsible for oversight of
specific risk topics. For example,
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The Audit Committee oversees our enterprise risk management program, as discussed in greater detail below, as well as issues related to internal controls over financial reporting;
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The Nominating and Governance Committee oversees issues related to our governance structure, corporate governance matters and processes, risks arising from related person transactions, as well as issues related to Board
and management succession;
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The Finance Committee oversees issues related to our capital and debt structure; and
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The Compensation Committee, with the assistance of the Audit Committee, oversees risks related to our executive compensation programs.
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Presentations and other information provided to the Board and its committees generally identify and discuss relevant risks and risk control. The Board assesses and
oversees risks
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as a part of its review of our related business, financial or other activities.
We have a formal enterprise
risk management program that is managed by our chief financial officer and internal audit personnel, and is overseen by our Audit Committee. Management, through its enterprise risk management steering committee, completes a comprehensive enterprise
risk management (“ERM”) review of the Company, in which the identification of enterprise level risks and mitigation processes were the primary topics. Formal policies and processes were established as part of the review for ongoing risk
assessment. This continuous review is overseen by the Audit Committee with the exception of the risks related to executive compensation programs, which is overseen by the Compensation Committee. Management continues to evaluate and assess risks to
the Company under the ERM program, and provides the Audit Committee and Board with updates, and the Compensation Committee and the Audit Committee continue to jointly participate in an annual executive compensation risk assessment.
Risk Assessment of Compensation Programs.
The Compensation Committee, with
the assistance of its independent compensation consultant, management and the Audit Committee, at least annually assesses the risks associated with the Company’s executive compensation programs. This assessment is conducted by the Compensation
Committee, in consultation with its independent compensation consultant and management, and is then reviewed in a joint session with the Audit Committee. Based upon the review conducted in June 2017, the Compensation Committee concluded that there
are no material risks arising from the Company’s executive compensation policies and practices that are reasonably likely to have a material adverse effect on the Company.
Code of Conduct.
The Board has adopted a Code of Conduct that sets forth standards regarding honest and ethical
conduct, full and timely disclosure and compliance with the law. The Code of Conduct embodies our expectations for ethical behavior and is built around our corporate values. The Code of Conduct applies to all of our employees, officers and
directors, including our principal executive officer, principal financial officer and principal accounting officer and controller. Your Board has also adopted a Code of Ethics for Financial Personnel that sets forth standards regarding honest and
ethical conduct related to the preparation of our financial statements. A copy of the Code of Conduct and the Code of Ethics for Financial Personnel are available on our web site, www.bobevansgrocery.com, in the “Investors” section under
“Corporate Governance.” Amendments to the Code of Conduct or waivers of the Code of Conduct granted to executive officers and directors will be disclosed on our web site within five days following the date of the amendment or waiver.
Transactions With Related Persons.
Your Board has adopted a Related Person Transaction Policy (the “Policy”) that is administered by the NCG Committee
in conjunction with the Audit Committee. The Audit Committee has adopted procedures under Auditing Standard No. 18 whereby a survey is completed by all officers and directors of the Company to identify any related persons transactions including
any such transactions with affiliates of the officers and directors, regardless of the value of the transaction.
The Policy applies to any transaction or series of
transactions in which we participate, the amount involved exceeds $100,000, and a “related person” has a direct or indirect material interest. According to SEC rules, a “related person” is a director, officer, nominee for
director, or five percent stockholder of our Company since the beginning of the last fiscal
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year and their immediate family members. Related person transactions do not include: (1) interests arising solely from ownership of our stock if all stockholders receive the same benefit;
(2) compensation to our executive officers if approved by our Compensation Committee; and (3) compensation to our directors if the compensation is disclosed in our proxy statement.
Under the Policy, all related person transactions will be referred to the NCG Committee for approval, ratification, revision or termination. No director may participate
in the consideration of a related person transaction in which he or she or an immediate family member is involved. The NCG Committee can approve and ratify only those transactions that it finds to be in our best interests. In making this
determination, the NCG Committee will review and consider
all relevant information available to it, including:
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The related person’s interest in the transaction;
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The approximate dollar value of the transaction;
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Whether the transaction was undertaken in the ordinary course of our business;
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Whether the terms of the transaction are no less favorable to us than terms that could be reached with an unrelated third party;
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The purpose of the transaction and its potential benefits to us; and
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Any other information regarding the transaction or the related person that would be material to investors in light of the circumstances.
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C
OMPENSATION
C
OMMITTEE
R
EPORT
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained
in this proxy statement. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and be incorporated by reference into Bob Evans’
Annual Report on Form 10-K for the fiscal year ended April 28, 2017.
Submitted by the Compensation
Committee:
Paul S. Williams, Chair
Charles M. Elson
Mary Kay Haben
David W. Head
Michael F. Weinstein
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C
OMPENSATION
D
ISCUSSION
A
ND
A
NALYSIS
What does the “Compensation Discussion and Analysis” describe?
The Compensation Discussion and Analysis
of our proxy statement describes the Company’s compensation philosophy, processes and decisions relating to our “named executive officers” (as defined below) during the 2017 fiscal year. Historically, and throughout the Company’s
2017 fiscal year, the Company conducted operations in two segments. Through our Bob Evans Restaurants segment, we owned and operated full-service Bob Evans restaurants offering our customers a variety of high-quality, reasonably priced breakfast,
lunch and dinner items for either dine-in, carryout or catering occasions in family-friendly settings. Through our Bob Evans Foods segment, we are a leading producer and distributor of refrigerated side dishes, pork sausage, and a variety of
refrigerated and frozen convenience food items. On April 28, 2017, the final day of the Company’s 2017 fiscal year, the Company completed the Restaurants Transaction and is now focused exclusively on realizing the full potential of our Bob
Evans Foods business. In connection with the sale, Saed Mohseni, our former President and Chief Executive Officer, and John Fisher, the former President of Bob Evans Restaurants, departed the Company. This Compensation Discussion and Analysis
primarily describes compensation practices as in effect when we operated both the Bob Evans Restaurants and Bob Evans Foods businesses, and prior to the attendant changes in our structure and management team resulting from the sale. The Compensation
Committee of our Board of Directors is presently engaged in the ongoing process of reevaluating our compensation philosophy and processes in light of the changes to our Company and management team, a process that we expect to unfold over the course
of the 2018 fiscal year.
Who are our “named executive officers?”
Under the SEC rules, our named executive officers in any fiscal
year consist of our:
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Chief executive officer,
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Chief financial officer,
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Our three other most highly compensated executive officers, and if applicable,
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Up to two former named executive officers who would have been our named executive officers if they were still with the Company.
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Our named executive officers for fiscal year 2017 were:
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Saed Mohseni
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Former President and
Chief Executive
Officer, Bob Evans
Farms, Inc.
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Mark E. Hood
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Chief Administrative
and Chief Financial
Officer, Bob Evans
Farms, Inc.
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J. Michael Townsley
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President, BEF Foods,
Inc. in fiscal 2017 and
current President
and Chief Executive
Officer, Bob Evans
Farms, Inc.
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Colin M. Daly
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Executive Vice
President, General
Counsel and
Corporate Secretary,
Bob Evans Farms, Inc.
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Richard D. Hall
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Executive Vice
President, Supply
Chain & Logistics,
Bob Evans Farms, Inc.
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John Fisher
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Former President,
Bob Evans
Restaurants
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What are the objectives of Bob Evans’ executive compensation program?
The overall goal of our executive
compensation program is the same as our goal for operating our Company – to maximize value for our stockholders over time by aligning the financial interests of our executive officers and our stockholders. We seek to achieve this goal by
establishing compensation programs that pay our executive officers for performance. We use the following objectives to guide our overall approach for determining pay for our executive officers and to monitor and manage compensation:
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Focusing our executive officers on increasing value for our stockholders through the achievement of our annual operating plan;
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Competing effectively with other companies in our industries and comparably sized businesses for executive talent; and
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Recognizing and rewarding individual achievements while supporting our team-based culture.
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What is the executive
compensation program designed to reward?
Our executive compensation program is designed to reward performance, including total company, business unit and individual performance. More than half of each executive officer’s potential total
annual compensation is comprised of an annual cash performance bonus and stock-based incentive compensation, each of which we describe in more detail below. We base all annual cash performance bonuses and most stock-based incentive compensation
solely upon the achievement of performance goals derived from key business metrics associated with our annual operating plan and/or our success in creating shareholder value. The performance goals and related awards are designed to motivate our
executive officers to accomplish financial and strategic business objectives and
to perform at their highest level. Our executive compensation program is also designed to attract and retain key executives by paying salaries and benefits that are competitive in the industries
in which we operate.
Does Bob Evans review the compensation of its executive officers relative to the compensation paid by other companies?
Yes. When the
Compensation Committee makes compensation decisions, it reviews the compensation of our executive officers and the compensation of similarly positioned executives in market survey data to gain a general understanding of current market compensation
practices for these positions. Our Compensation Committee generally believes that each element of our executive officers’ compensation should be within 10 to 20 percent of the market median (50th percentile) of companies in our industries for
comparable positions. The Compensation Committee uses market compensation information only as a reference point to review whether our compensation practices are consistent with the market so we can retain and attract executive talent.
Market compensation is not the only factor considered in setting compensation. Our Compensation Committee believes that each executive officer’s compensation can
be set at a level above or below the market median of our industries depending on several factors, such as our Company’s performance, the individual’s performance, the individual’s current and potential future role with us, and
whether the individual’s compensation is fair and equitable as compared to our other executive officers’ compensation. Based on market data, we believe that compensation within the restaurant and food products industries tends to be
somewhat lower than the broader general industry segment. As a result, when we need to hire or retain an executive whose position is not specifically tied to our industries, we may need to pay
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that executive more than the market median for that position within the industry and review the compensation for that position in the context of the overall market. We strongly believe that
target compensation under our incentive plans should allow for above-median compensation for exceptional performance, as well as below-median compensation when performance falls below our expectations based on our strategic goals.
Historically our Compensation Committee’s independent executive compensation consultant (the “Compensation Consultant”) annually provided the
Compensation Committee with a report that reviews each element of our executive officers’ compensation (base salary, target cash bonus and target stock-based compensation) based on survey information. Beginning in 2015, however, the
Compensation Committee adopted a policy to review executive compensation every year, but that a full review utilizing the Compensation Consultant and doing a comparative analysis against our peers and the marketplace generally would be done every
other year to save the cost of an annual review and to promote efficiency in the process. Prior to the sale of our restaurant business at the end of fiscal 2017, the Compensation Consultant would review market base salary data from three surveys,
one being restaurant focused and two being general industry focused. The surveys were Aon Hewitt’s Chain Restaurant Total Rewards Association Executive and Management Compensation Survey and two general industry compensation surveys – the
Towers Watson Executive Compensation Database and Mercer’s US Executive Benchmark Database Survey Report. Our Compensation Committee did not know the names of the individual companies included in the surveys nor did it consider that information
to be material. The information from these surveys has only been used to provide the Compensation Committee with a general baseline understanding of current
compensation practices for our executive officer positions.
The Compensation Committee annually reviews the
compensation of our named executive officers. The Compensation Committee, with the assistance of the Compensation Consultant, reviews the companies included in this peer group periodically to ensure that they are still relevant for comparative
purposes.
For fiscal year 2017 the Compensation Committee, based upon the consultation with the Compensation Consultant, Pearl Meyer, determined to use as part of
the determination of executive compensation for fiscal year 2017 a group of peer companies, which is the same peer group used by us in prior years as a comparative group. This peer group consists of the following 23 companies:
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Brinker International, Inc.
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Buffalo Wild Wings Inc.
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Chipotle Mexican Grill, Inc.
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Cracker Barrel Old Country Store, Inc.
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Popeyes Louisiana Kitchen, Inc. (fka AFC Enterprises)
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Red Robin Gourmet Burgers Inc.
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The Cheesecake Factory Incorporated
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The Hain Celestial Group, Inc.
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In establishing this peer group, we considered potential peer companies’ market
capitalization, core business, operations, and range of products, as well as other factors that the Compensation Committee deemed relevant in setting target levels of compensation and determining the value or level of awards granted.
How is executive compensation determined?
Under its written charter, our Compensation Committee has the sole authority to determine all elements of our executive
officers’ compensation. We refer to the executive officers listed in the Summary Compensation Table as our “named executive officers” or our “named executives.” Additionally, the Compensation Committee is responsible for
administering our Equity and Cash Incentive Plan which is the Company’s primary vehicle for issuing equity and cash bonuses.
The chief executive officer,
representatives from our human resources and legal departments and a representative of the Compensation Consultant regularly attend Compensation Committee meetings. They work closely with the Compensation Committee Chair to identify and prioritize
matters for consideration by the Compensation Committee and, along with the Board Chair, to set meeting agendas and the action register. At the request of the Compensation Committee Chair, the Compensation Consultant and management prepare reports
and other materials for each Compensation Committee meeting.
Management makes recommendations regarding annual performance goals and targets for the Compensation Committee’s
consideration and approval. Our chief executive officer, with the assistance of business segment leaders and representatives of our Human Resources department, makes specific recommendations to the Compensation Committee regarding the
executives’ compensation. None of our employees is present during the Compensation Committee’s deliberations or decisions regarding their compensation.
Historically the Compensation Committee used a formal performance planning and evaluation process for our chief executive officer’s compensation. At the start of
each fiscal year, the chief executive officer would create objectives and development goals for himself and would submit them to the Compensation Committee Chair, the Board Chair, and the LID. The Compensation Committee Chair, with input from the
other members of the Compensation Committee, would then prepare final objectives and development goals, which would be submitted to the Compensation Committee for its approval.
Throughout the fiscal year the Compensation Committee Chair, the Board Chair and the LID would have discussions with the chief executive officer regarding his
performance. At the end of the fiscal year, the chief executive officer would provide the Committee with a written self-assessment of his performance. Additionally, each independent director would complete a written evaluation of the chief executive
officer’s performance using an evaluation form adopted by the Compensation Committee. The evaluation form would rate the chief executive officer’s performance based on:
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our overall financial performance;
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strategic planning, vision and leadership;
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relationship management; and
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personal and professional development.
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The Compensation Committee Chair, Board Chair and the LID would then prepare a
formal evaluation of the chief executive officer’s performance using the self-assessment and the evaluation forms completed by the independent directors. The Compensation Committee would consider this information in setting the chief executive
officer’s compensation and performance goals for the next fiscal year. In August 2015, the Compensation Committee determined to adopt a policy to review executive compensation every year, but that a full review utilizing the Compensation
Consultant and doing a comparison analysis would be done every other year to save the cost of an annual review and to promote efficiency in the process. As such, and because of the terms of the former chief executive officer’s employment
agreement relating to compensation, a review was
completed but no changes were made to his compensation for fiscal year 2017.
What is the role of the independent Compensation Consultant?
The role of an independent Compensation Consultant is to assist the Compensation Committee in the
case of employee compensation, and to assist the NCG Committee in the case of director compensation, by providing objective information and expertise necessary for the Compensation and NCG Committees to make informed decisions that are in the best
interests of our business and stockholders. The Compensation Consultant also keeps the Compensation and NGC Committees informed as to compensation trends and developments affecting public companies in general and our industries in particular.
The Compensation and NCG Committee charters provide that the committees have sole authority to retain and terminate a
compensation-consulting firm and to approve the terms and fees of any such firm for services provided to the committees. In addition, the charters state that the committees have to approve any
engagement of a compensation-consulting firm by the Company to avoid any conflicts of interest or independence issues. Each committee charter provides that before engaging a compensation adviser (other than in-house legal counsel), such committee
shall consider all factors that could affect the independence of such consultant, counsel or advisor. These factors include those enumerated from time to time in the rules and regulations of the SEC and the listing standards of NASDAQ relevant to
that adviser’s independence from management, including the six factors currently enumerated under Exchange Act Rule 10C-1 and the NASDAQ listing standards.
For fiscal year 2017, the Compensation Committee and the NCG Committee engaged Pearl Meyer for executive and director compensation consulting services. Prior to
determining to retain the Compensation Consultant, as required in each committee’s Charter, the Compensation and NCG Committees considered all factors that could affect the independence of the Compensation Consultant, including the six factors
currently enumerated under Exchange Act Rule 10C-1 and the NASDAQ listing standards. Each committee also considered the quality of the services provided and the ability of the Compensation Consultant’s personnel to provide objective assistance
and advice to the committee. The Compensation and NCG Committees also confirmed as part of their determination that no business or personal relationships exist between any members of the Compensation Consultant’s team advising the Company, on
the one hand, and the Company, any member of either committee or any of our executive officers, on the other hand, other than in connection with the services provided.
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In addition to Pearl Meyer, the Compensation and NCG Committees have also relied upon in-house counsel to provide legal
advice to each committee regarding its role, responsibilities, and legal developments that may relate to compensation issues, and to assist the committees regarding the structuring and implementation of its decisions and strategies from a legal
perspective. Our in-house counsel typically attends the meetings of the Compensation and NCG Committees. Our in-house counsel has on occasion sought the advice of outside counsel in the formulation of in-house counsel’s advice to the
Compensation and NCG Committees.
What are the elements of Bob Evans’ executive compensation program?
Our executive compensation program consists of the
following elements:
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annual cash performance bonuses;
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stock-based incentive compensation;
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severance benefits; and
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other employee benefits and limited perquisites.
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We believe that each element of our executive compensation program is
essential to meeting the program’s overall objectives. We have not adopted a formula to allocate total compensation among these elements. However, the program’s focus on Company, business unit and individual performance emphasizes a strong
“pay for performance” culture.
Why does Bob Evans pay base salaries, annual cash performance bonuses and stock-based incentive compensation and how is
the amount of each of these elements determined?
Annual Base Salaries.
Base salaries are primarily used to compensate our executive
officers for their roles and responsibilities and to provide a secure level of guaranteed cash compensation. When determining the base salaries of our executive officers, the Compensation
Committee considers the:
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importance of the job function;
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scope of responsibility;
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performance of our Company and the officer’s business unit;
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individual performance and potential for future advancement; and
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market median base salary for similarly positioned executives in our industry (except for executive officers with positions that are not specific to our industry, for which the market median base salary for the broader
general industry segment is also considered).
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The Compensation Committee has not assigned any specific weighting to these factors, and the relevance
of each factor varies from individual to individual.
During fiscal 2017, the Compensation Committee reviewed the existing base salaries for our named executive
officers. Specifically, the Compensation Committee considered each named executive officer’s current base pay, taking into account base salary levels paid to persons holding similar positions at peer companies. The Compensation Committee
also considered the fact that most named executive officers did not receive an increase in base salary for the 2016 fiscal year from the 2015 fiscal year. Based on its review, the Compensation Committee determined, except with respect to
Mr. Hall, not to increase our NEO’s base salaries for fiscal 2017; however, as discussed below, the Compensation Committee determined to provide Messrs. Townsley, Hood, Daly and Fisher with a time-based grant of RSUs equal to four percent
of their respective base salaries. Mr. Hall received an additional $5,627, or 2 percent, in base salary for fiscal year 2017 in connection
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with annual budgeted merit-based increases made by the Company. For additional details regarding the base salary for each of our named executive officers, see the table below entitled
“
Base Salary: Fiscal Year 2017 Table.”
Annual Cash Performance Bonuses.
The annual cash performance bonus is an “at-risk”
bonus designed to motivate our executive officers to achieve performance goals derived from our strategic plan. These performance goals consist of goals tied to objective Company and business unit financial performance measures as further described
in the table below entitled
“Target Annual Cash Bonus: Fiscal Year 2017 Table.”
Within the first 90 days of each fiscal year, the Compensation
Committee establishes a set of performance goals and a target cash bonus for each executive officer. Each target cash bonus is set as a percentage of the executive officer’s base salary. The Compensation Committee sets cash bonus targets based
on the recommendation of the Compensation Consultant, the chief executive officer, the executive chair, and a representative of human resources, in line with each executive officer’s job function and performance. The Compensation Committee also
considers the market practices for annual cash bonuses for executives in similar positions in our industry (except for executive officers with positions that are not specific to our industry, for which the market median bonus opportunity for the
broader general industry segment is also considered).
The amount of the cash bonus ultimately paid depends on the extent to which the performance goals are
achieved as compared with the threshold, target and maximum performance targets established by the Compensation Committee. Our named executive officers can receive anywhere from 0 to 200 percent of their target cash bonuses (i.e., a sliding scale is
used with 0 percent payout for performance at or below threshold,
100 percent payout for performance at target, and 200 percent payout for performance at or above the maximum). The Compensation Committee maintains negative discretion regarding bonuses and may
reduce a bonus depending upon factors it deems relevant.
Stock-Based Incentive Compensation.
The Compensation Committee believes that stock-based
incentive compensation represents a very effective method to link management objectives and stockholders’ interests because it ties our executive officers’ compensation directly to the creation of long-term stockholder value.
Our stock-based incentive compensation program has two primary goals:
|
|
•
|
|
align the financial interests of our executive officers and stockholders to maximize long-term stockholder value; and
|
|
|
•
|
|
retain our key executives.
|
Each fiscal year, the amount of stock-based incentive compensation that each of our named
executive officers can receive is equal to a percentage of the named executive’s base salary. The Compensation Committee determines each executive officer’s target stock-based incentive compensation, and it takes into consideration the
recommendation of the Compensation Consultant, and the views of the chief executive officer (other than with respect to his own compensation), the executive chair, and a representative of human resources. The target amount is made in light of each
executive’s job function and performance, as well as the market median stock-based compensation opportunity for executives in similar positions in our industry. For executive officers with positions that are not specific to the restaurant
industry, a market median stock-based compensation opportunity for the broader general industry segment is also considered.
43 |
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The program is composed of and broken down into two components—time-based and performance-based grants:
|
|
•
|
|
a three-year time-based award (33%), and
|
|
|
•
|
|
a three-year performance-based award (67%).
|
The chief executive officer, however, only receives three-year performance
based awards. Program performance goals and goal attainment levels are further described in the table below entitled
“Stock-Based Incentive Compensation: Fiscal Year 2017 Table.”
The annual time-based stock awards are made with RSUs, while the annual three-year performance awards are made with PSUs. Both grants have related dividend equivalent
rights which are paid if and when the award vests.
In addition to our annual equity grants, in June 2016, the Compensation Committee, in consultation with Pearl
Meyer and upon the request and recommendation of the chief executive officer, determined to award Messrs. Townsley, Hood, Daly and Fisher a one-time grant of time-based RSUs. The grant was equal to four percent of each officer’s current base
salary and was made at the same time as the normal annual grants to employees. These grants were made in lieu of base salary increases and were subject to ratable vesting over three years beginning on the first anniversary of the grant date. For
additional detail regarding the amounts granted, see the table below entitled
“Grants of Plan–Based Awards for Fiscal Year 2017.”
Subject to
the discretion of the Compensation Committee, the three-year time-based grants vest ratably in annual installments over three years, but only if the participant remains an employee at the time of vesting. However, in connection with the Restaurants
Transaction, the Compensation Committee determined
that each of our outstanding awards as of April 28, 2017 under the Equity and Cash Incentive Plan would accelerate and vest upon the consummation of the Restaurants Transaction and delivery
by the applicable participant of a written agreement with the Company containing a general release of claims, a restrictive covenant not to compete with the Company or its subsidiaries or affiliates for up to 1 year, and a restrictive covenant not
to solicit any employee of the Company or its subsidiaries or affiliates to terminate his or her employment with the Company for up to 1 year (the “Release”). As a result, all time-based RSUs vested in full on April 28, 2017. For
additional information regarding the accelerated awards, see
“Potential Payouts upon Severance or Change in Control—Restaurants Transaction Acceleration and Vesting of Awards Table”
in this proxy statement.
Subject to the discretion of the Compensation Committee, the three-year performance-based grant is structured to vest after the end of a three-year period, but only if
the performance metrics are met and if the participant remains an employee at the time of vesting. For fiscal year 2017, the performance metric used by the Compensation Committee was the Company’s relative total shareholder return compared to
the component companies in the S&P 600 Small Cap Index at the start of the period (the “Performance Target”). The amount of PSUs ultimately vesting depends on the extent to which the performance goals are achieved. The Compensation
Committee established threshold, target and maximum performance targets at the time of the grant; as a result, our executive officers can receive PSUs valued anywhere from 0 to 150 percent of their base salary. In accordance with this sliding scale,
there is no award for performance below the threshold, an award of 50 percent at threshold, a 100 percent award for performance at target, and a 150 percent award for performance at or above the
44 |
P a g e
maximum. As mentioned above, the Compensation Committee determined that Mr. Mohseni, as chief executive officer, should receive 100 percent of his stock-based incentive compensation as PSUs.
In June 2016, pursuant to the terms of Mr. Mohseni’s employment agreement, the Compensation Committee awarded him PSUs equal to 250 percent of his base salary, representing a combined award at 125 percent of base salary in respect of the
Company’s 2017 fiscal year and 125 percent of base salary in respect of the Company’s 2016 fiscal year, during which Mr. Mohseni had joined the Company mid-year and for which he did not receive an annual grant. This award was made as
a strong incentive to Mr. Mohseni to take the necessary actions to increase the Company’s performance and sales.
Generally, if an executive
officer’s employment with us terminates before a time-based or a performance award vests, he or she will forfeit the award. In the case of performance-based awards, if the termination of employment is due to death, retirement, disability or
termination without cause, and the executive has been employed throughout the 18-month period following the start of the performance period, the stock may still vest if the performance metrics are met at the end of three years, but will be pro-rated
for the period when the executive officer was employed.
Generally, the amount of PSUs that will ultimately vest will be determined by comparing our relative total
shareholder return to the component companies in the S&P 600 Small Cap Index at the start of the performance period.
However, in connection with the
Restaurants Transaction, the Compensation Committee determined that each of our outstanding PSU awards as of April 28, 2017 under the Equity and Cash Incentive Plan would accelerate and vest upon the consummation of the
Restaurants Transaction and execution by the applicable participant of the required Release. As a result of this determination, all outstanding PSUs vested in full at the target level (or 100%).
For additional information regarding the accelerated awards, see
“Potential Payouts upon Severance or Change in Control
—
Restaurants Transaction Acceleration and Vesting of Awards Table”
in this proxy statement.
Does Bob Evans have a policy for granting equity awards?
We have a formal “Equity Award Granting Policy.” Among other things, the policy sets forth
specific procedures for issuing and documenting equity awards and states:
|
|
•
|
|
the grant date fair value of all equity awards will be the closing price of our stock on the grant date, as calculated in accordance with FASB ASC Topic 718; and
|
|
|
•
|
|
the Compensation Committee must approve all equity awards, or any changes to such awards, at a meeting and not by a consent action.
|
Historically, we have granted equity awards to our employees at a fixed time every year, at the regularly scheduled Compensation Committee meeting in June.
From time to time, the Compensation Committee will award an equity grant at a time other than at the annual June grant. These grants are generally made as part of the
hiring process for new key employees, where a current employee has been promoted and takes on additional responsibilities, or as recognition of action by the employee that resulted in an extraordinary benefit to the Company outside their normal
responsibilities.
We also make an annual equity award to members of our Board under a formula plan in accordance with our Director Compensation Program. These
awards are issued on the date
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directors are elected at our annual meeting of stockholders typically held in August and vest on the date of the next year’s annual meeting.
What retirement benefits does Bob Evans provide to its executives?
Our Compensation Committee and management believe that it is important to provide an
opportunity for post-retirement benefits to employees once they reach retirement. We maintain a qualified 401(k) retirement savings plan (the “401K Plan”) open to all employees. Our named executive officers may also participate in the 401K
Plan on the same terms as any other employee. Any Company match on employee contributions is in the discretion of the Board. Currently, the Company matching contribution is $0.50 on the dollar for the first six percent of eligible compensation.
Employee contributions to the 401K Plan vest immediately as required by regulations, while our matching contributions vest ratably with 100 percent vesting after five years of service.
The Internal Revenue Service requires certain nondiscrimination testing that may place limits on amounts that Highly Compensated Employees (“HCE”) may
contribute to our 401K Plan. For calendar years 2016 and 2017, the plan limited the contributions of HCEs to no more than three percent of their compensation or $7,950, whichever is less. However, an employee who qualifies (i.e., age 50 and up) may
also make a catch-up contribution of $6,000 for 2016 and 2017. Our matching contributions to HCE’s accounts are then limited. Our matching contributions to the 401K Plan for our named executive officers are included in the
“All Other
Compensation”
column of the
“Summary Compensation Table.”
We maintain an executive deferral plan, which is a nonqualified deferred
compensation plan. Our deferral plan allows certain management employees to defer a portion of their base salaries and up to 100 percent of their cash bonus and stock awards into the plan before
most taxes are withheld. For calendar year 2016 (which includes part of our 2016 and 2017 fiscal years), the Board approved a matching contribution for the deferral plan at the same level as the
401K Plan. We believe the executive deferral plan promotes personal savings and facilitates tax deferral, as well as compensates for deferral limits under our 401K Plan. The primary benefit to participants of this plan is that most taxes are
deferred until the money is distributed from the plan, so savings accumulate on a pre-tax basis. We believe we need to offer this type of plan to compete effectively for executive talent because many other companies offer this type of plan. The
deferral plan also reduces the Company’s current cash obligations. For information regarding contributions to the deferral plan, please refer to the
“Nonqualified Deferred Compensation for Fiscal Year 2017 Table.”
We maintained a supplemental executive retirement plan or “SERP” for a limited number of management employees, including two of our NEOs. In June 2009, our
Board amended the SERP to preclude the addition of new participants. In June 2015, our Board amended the SERP to limit any future contributions to participants to a nominal level of $1 per year.
Did Bob Evans enter into any separation agreements with any of the named executive officers in connection with the Restaurants Transaction?
Yes. In connection
with the closing of the Restaurants Transaction, the Company entered into separation agreements with Messrs. Mohseni and Fisher. Pursuant to the separation agreements, the Company agreed to pay severance payments of $1,309,318 to Mr. Mohseni
and $537,780 to Mr. Fisher, as described below in the sections entitled
“Executive Officer Compensation
Information” and “Summary of Separation Agreements.”
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Did Bob Evans enter into any employment agreements with its named executive officers in connection with the sale of the
Bob Evans Restaurants business?
Yes. In connection with the closing of the sale of our Bob Evans Restaurants segment, the Company entered into employment agreements with Messrs. Townsley, Hood and Daly. The Company entered into the employment
agreement with Mr. Townsley in connection with his promotion to President and Chief Executive Officer. The Company entered into employment agreements with Messrs. Hood and Daly as an inducement to their continuing service as the Company’s
Chief Financial Officer and Chief Administrative Officer and the Company’s Executive Vice President, General Counsel and Corporate Secretary, respectively. The employment agreements with each of Messrs. Townsley, Hood and Daly are discussed
below in the section entitled
“Executive Officer Compensation Information.”
Does Bob Evans provide any of its named executive officers with
severance or change in control benefits?
Our Change in Control and Severance Plan (the “CIC/Severance Plan”), provides payments and benefits under certain circumstances, including a termination of employment in connection with a change
in control. These arrangements are described in detail under
“Potential Payouts upon Severance or Change in Control”
in this proxy statement. A table showing the incremental compensation that would have been payable to our named
executive officers at the end of fiscal year 2017 under various termination of employment scenarios (and including compensation actually paid to Messrs. Mohseni and Fisher in connection with Restaurants Transaction) as well as information regarding
the amounts associated with the accelerated vesting of equity awards by the Compensation Committee in connection with the consummation of the Restaurants Transaction is located under the heading
“Potential Payouts upon Severance or
Change in Control—Restaurants Transaction
Acceleration and Vesting of Awards Table”
in this proxy statement.
The change in control benefit provided to certain officers in the CIC/Severance Plan is designed to retain key executives during the period in which a transaction
involving a change in control is being negotiated or during a period in which a takeover of the Company is being attempted. We believe that our operations and the overall value of our Company could be adversely affected if the officers who have
change in control benefits left us during or immediately after our acquisition by another company.
Does Bob Evans provide its executives with perquisites?
We generally do not provide our named executive officers with perquisites. All of our executive officers receive a phone allowance. The value and type of “perquisites” provided to our named executive officers in fiscal year 2017 are
included in the
“All Other Compensation”
column of the
“Summary Compensation Table,”
and in the
“All Other Compensation for Fiscal Year 2017 Table.”
Does Bob Evans have stock ownership and retention requirements?
Yes, we implemented stock ownership guidelines and retention requirements for our directors and
officers in 2005, and the guidelines were updated in 2015 to allow officers to meet the guidelines based not only a fixed number of shares (which share requirement did not change) but also based on a multiple of their base salary. Each of our
officers and directors is expected to meet 50 percent of the applicable stock ownership and retention guideline within three years, and 100 percent of the stock ownership and retention guideline within five years from the later of (1) the
implementation of revised stock ownership guidelines; (2) his or her election as an officer or director; or (3) his or her promotion to a position with a higher stock ownership guideline.
47 |
P a g e
Officers are required to retain stock granted to them under awards (with the exception of stock used to pay withholding
taxes), until they meet the guidelines, and they must retain the shares to maintain their compliance with the guidelines. We count towards these requirements any shares directly and beneficially owned, shares held beneficially through our 401K Plan,
employee stock ownership plan and dividend reinvestment plan, unvested equity grants and stock options that will vest in the next 60 days, and phantom stock held under our deferred compensation programs. We believe the guidelines further align the
motivations and interests of our directors and officers with the interests of our stockholders. The guidelines ensure that the individuals responsible for our stewardship and growth have a significant personal stake in our performance and progress.
The ownership guidelines for our officers vary based on the officer’s position. The following table shows our stock ownership guidelines as of the completion
of fiscal 2017:
|
|
|
|
|
Title
|
|
Lesser of Multiple of Base
Salary or Shares
|
|
Chief Executive
Officer
|
|
6x or 100,000
|
|
Chief Administrative and Chief Financial Officer
|
|
3x or 40,000
|
|
President, Business Segment
|
|
3x or 40,000
|
|
Executive Vice President
|
|
3x or 30,000
|
|
Executive Chair
|
|
12,500
|
|
Senior Vice
President
|
|
2x or 10,000
|
|
Vice
President
|
|
1x or 5,000
|
|
Board
Member
|
|
12,500
|
For fiscal 2018, the Company’s stock ownership guidelines were revised as a result
of the consummation of the Restaurants Transaction to be as follows:
|
|
|
|
|
Title
|
|
Lesser of Multiple of Base
Salary or Shares
|
|
Chief Executive
Officer
|
|
6x or 100,000
|
|
Chief Administrative and Chief Financial Officer
|
|
3x or 40,000
|
|
Executive Vice President
|
|
3x or 30,000
|
|
Executive Chair
|
|
12,500
|
|
Senior Vice President
|
|
2x or 10,000
|
|
Board
Member
|
|
12,500
|
All of our directors and named executive officers are in compliance with the requirements (after taking into account compliance grace
periods).
What is the potential impact of executive misconduct on compensation?
The Compensation Committee has adopted an Executive Compensation Recoupment
Plan (the “Recoupment Plan”). Each named executive officer is a participant in the Recoupment Plan and all bonus and equity awards are subject to the Recoupment Plan. Under the Recoupment Plan, our Board may recoup annual cash bonuses,
stock-based awards, performance-based compensation, and any other forms of cash or equity compensation (other than salary) paid to our named executive officers under certain circumstances. The Recoupment Plan will apply in the event of a restatement
of our previously issued financial statements as a result of error, omission, fraud or noncompliance with financial reporting requirements. The Compensation Committee will review the facts and circumstances underlying any restatement (including any
potential wrongdoing and whether the restatement was the result of negligence or intentional or gross misconduct) and will seek to recover all or a portion of the compensation paid to a named executive officer (other than salary) with respect to any
fiscal year in which our financial results are negatively affected by the restatement. Recoupment may include,
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P a g e
but is not limited to, reimbursement by the named executive officer of the amount of cash bonuses received, cancellation or forfeiture of outstanding stock-based compensation and the payment to
us of stock sale proceeds. In any instance in which the Compensation Committee concludes that a named executive officer engaged in an act of fraud or misconduct that contributed to the need for a financial restatement, the Compensation Committee
may, in its discretion, recover, and the named executive officer will forfeit or repay, all of the named executive officer’s compensation (other than salary) for the relevant period, plus a reasonable rate of interest.
Additionally, if the Board were to determine that a named executive officer harmed us through fraud or intentional misconduct, the Board would take action to remedy the
misconduct, prevent its occurrence in the future and impose appropriate discipline, which might include termination of employment or suing the named executive officer for breach of fiduciary duty. Our Equity and Cash Incentive Plan provides that all
unvested awards under the Equity and Cash Incentive Plan will be forfeited if an employee’s service is terminated for cause. If our chief executive officer or chief financial officer were to engage in misconduct that resulted in a financial
restatement for material non-compliance with securities laws, they would be required by law to reimburse us for bonuses, other incentive compensation, and profits from sales of our stock.
Does Bob Evans consider tax and accounting implications when making compensation decisions?
Yes, the Compensation Committee considers the financial reporting and
tax consequences of compensation paid to our named executive officers when it determines the overall level of compensation, and mix of compensation components. The Compensation Committee generally seeks to balance the goal of providing our named
executive officers with appropriate compensation with the need to maximize the deductibility of compensation.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), prohibits us from claiming a compensation expense deduction on our federal
income taxes for compensation in excess of $1,000,000 per taxable year paid to our chief executive officer and our three other most highly compensated executive officers (but excluding our chief financial officer) who are employed at the end of the
fiscal year. There is an exception to this rule for compensation that qualifies as “performance-based,” which means that the compensation is only paid if the executive officer’s performance meets pre-established objective goals based
on performance criteria approved by our stockholders.
We do not have a policy requiring all compensation to be deductible under Code Section 162(m) because
the Compensation Committee believes there may be circumstances under which it is appropriate to forgo deductibility. However, we designed the cash performance bonus and stock-based compensation components of our executive compensation program so
that most grants qualify as performance-based compensation. This is accomplished by setting goals that are based on the performance criteria approved by our stockholders as part of our Equity and Cash Incentive Plan. In fiscal year 2017 and 2018, we
have granted time-based equity grants that will not qualify as performance-based grants. In our review of the tax consequences of these time-based grants, it does not appear that we will have a Section 162(m) limit on deductions due to the
amounts involved and because certain of the grants have been deferred into the Deferral Plan.
Our compensation plans comply with Section 409A of the Code.
Section 409A is intended to eliminate perceived abuses
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related to the timing of elections and distributions, as well as the acceleration of payments, under nonqualified retirement plans and other nonqualified deferred compensation arrangements.
What significant actions has the Compensation Committee taken since the end of fiscal year 2017?
Our Compensation Committee has reviewed the performance of
our Company and our executive officers for fiscal year 2017, including the extent to which the performance goals set in June 2016 were met. Based on this review, the Compensation Committee
approved the annual cash bonuses and made the long-term incentive awards detailed in the tables in the
“Fiscal Year 2017 Compensation Information”
section below, as well as certifying compliance with the Code Section 162(m)
requirements.
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F
ISCAL
Y
EAR
2017 C
OMPENSATION
I
NFORMATION
The following table shows the base salary for each of our named executive officers for the 2017 fiscal year (April 30, 2016 to
April 28, 2017), as well as the percentage increase or decrease over the fiscal year 2016 base salary for these officers.
Base Salary:
Fiscal Year 2017 Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officers
|
|
Fiscal Year
2016 Ending
Base Salary
($)
|
|
Salary
Adjustment
Date
|
|
Salary
Adjustments
(1)($)
|
|
Fiscal Year
2017 Ending
Base Salary
($)
|
|
Change
Over Fiscal
Year 2016
(%)
|
|
Saed Mohseni,
Former
President
and Chief Executive Officer
|
|
700,000
|
|
N/A
|
|
0
|
|
700,000
|
|
0
|
|
Mark E. Hood,
Chief
Administrative and Chief
Financial Officer
|
|
480,000
|
|
N/A
|
|
0
|
|
480,000
|
|
0
|
|
J. Michael Townsley,
President,
BEF Foods, Inc.
|
|
400,000
|
|
N/A
|
|
0
|
|
400,000
|
|
0
|
|
Colin M. Daly,
Executive Vice
President, General Counsel and
Corporate Secretary
|
|
325,000
|
|
N/A
|
|
0
|
|
325,000
|
|
0
|
|
Richard D. Hall,
Executive
Vice
President, Supply Chain and
Logistics
|
|
281,350
|
|
5/7/2016
|
|
5,627
|
|
286,977
|
|
2
|
|
John Fisher,
Former President,
Bob Evans Restaurants
|
|
350,000
|
|
N/A
|
|
0
|
|
0 (2)
|
|
0
|
|
|
(1)
|
Messrs. Hood, Townsley, Daly, and Fisher received time based RSUs valued at 4% of base salary in lieu of a base salary merit increase. Such awards were scheduled to vest ratably over 3 years; however, as a result of the
Compensation Committee’s determination to accelerate and vest all outstanding awards upon the consummation of the Restaurants Transaction, these RSUs vested on April 28, 2017. See “
Grants of Plan-Based Awards for Fiscal Year
2017
” table for details regarding the number of RSUs granted and “
Potential Payouts Upon Severance or Change-in-Control—Restaurants Transaction Acceleration and Vesting of Awards Table
” for details regarding the
vesting of such awards upon the consummation of the Restaurants Transaction.
|
|
|
(2)
|
Mr. Fisher’s employment with Company terminated on April 1, 2017. His base salary during his employment with the Company during fiscal year 2017 was set at $350,000 per year. In connection with
Mr. Fisher’s termination, the Company, with the approval of the Board, negotiated a separation agreement. For a more detailed description of the amounts paid pursuant to such agreement, see “
Summary of Separation
Agreements—John Fisher
.”
|
In August 2015, the Compensation Committee determined to adopt a policy to review executive compensation every year, but
that a full review utilizing the independent compensation consultant and doing a comparison analysis, would be done on an every other year basis to save the cost of an annual review and to promote efficiency in the process. So while the base
salaries of the
named executive officers were reviewed, they did not undergo the more extensive review and comparison that will be conducted in fiscal year 2018 with the assistance of the independent
compensation consultant. The Compensation Committee did, however, award the officers who report directly to the chief executive officer (Messrs. Townsley, Hood, Daly and Fisher) a grant of RSU’s equal
51 |
P a g e
to four percent of their Base Salary that vest over three years, in lieu of an increase in base salary. The Compensation Committee also reviewed with management the target level
base salary increase for all of our corporate office employees in good standing, which averaged approximately two percent.
The following table shows for each of our named
executive officers: the target value of their target cash bonus for the prior fiscal year, the amount of the cash bonus actually paid in July 2017, and the performance goals, weighting and goal attainment level:
Target Annual Cash Bonus: Fiscal Year 2017 Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive
|
|
2017 Target
Cash
Bonus
(1)
($)
|
|
|
2017 Actual
Cash
Bonus Paid
($)
|
|
|
Annual Cash Bonus, Weighting and Goal Attainment Level
|
|
|
|
|
Goal
(2)
|
|
Weighting
|
|
|
Minimum/Threshold
|
|
|
Actual
($)
|
|
|
|
|
|
|
Target
|
|
|
|
|
|
|
|
|
Maximum
($)
|
|
|
|
Saed Mohseni,
Former President and
Chief Executive
Officer
|
|
|
700,000
|
|
|
|
884,100
|
|
|
EPS(3)
|
|
|
65
|
%
|
|
|
1.79
|
|
|
2.38
|
|
|
|
|
|
|
|
2.10
|
|
|
|
|
|
|
|
|
|
2.42
|
|
|
|
|
|
|
Enterprise Revenue
|
|
|
35
|
%
|
|
|
1,264,965,115
|
|
|
1,271,628,871
|
|
|
|
|
|
|
|
1,317,671,994
|
|
|
|
|
|
|
|
|
|
1,370,378,874
|
|
|
|
Mark E. Hood,
Chief
Administrative, and
Chief Financial
Officer
|
|
|
312,000
|
|
|
|
394,056
|
|
|
EPS(3)
|
|
|
65
|
%
|
|
|
1.79
|
|
|
2.38
|
|
|
|
|
|
|
|
2.10
|
|
|
|
|
|
|
|
|
|
2.42
|
|
|
|
|
|
|
Enterprise Revenue
|
|
|
35
|
%
|
|
|
1,264,965,115
|
|
|
1,271,628,871
|
|
|
|
|
|
|
|
1,317,671,994
|
|
|
|
|
|
|
|
|
|
1,370,378,874
|
|
|
|
J. Michael Townsley,
President, BEF Foods,
Inc.
|
|
|
260,000
|
|
|
|
197,860
|
|
|
BEF Foods
Operating Income
|
|
|
50
|
%
|
|
|
73,601,240
|
|
|
83,627,211
|
|
|
|
|
|
|
|
86,589,694
|
|
|
|
|
|
|
|
|
|
99,578,148
|
|
|
|
|
|
|
BEF Foods Net
Sales
|
|
|
25
|
%
|
|
|
412,833,866
|
|
|
416,898,318
|
|
|
|
|
|
|
|
430,035,277
|
|
|
|
|
|
|
|
|
|
447,236,688
|
|
|
|
|
|
|
Enterprise Plan
Funding (4)
|
|
|
25
|
%
|
|
|
|
|
|
126%
|
|
Colin M. Daly,
Executive Vice
President, General
Counsel and
Corporate Secretary
|
|
|
195,000
|
|
|
|
246,285
|
|
|
EPS(3)
|
|
|
65
|
%
|
|
|
1.79
|
|
|
2.38
|
|
|
|
|
|
|
|
2.10
|
|
|
|
|
|
|
|
|
|
2.42
|
|
|
|
|
|
|
Enterprise Revenue
|
|
|
35
|
%
|
|
|
1,264,965,115
|
|
|
1,271,628,871
|
|
|
|
|
|
|
|
1,317,671,994
|
|
|
|
|
|
|
|
|
|
1,370,378,874
|
|
|
|
Richard D. Hall,
Executive Vice
President, Supply
Chain and Logistics
|
|
|
172,121
|
|
|
|
217,389
|
|
|
EPS(3)
|
|
|
65
|
%
|
|
|
1.79
|
|
|
2.38
|
|
|
|
|
|
|
|
2.10
|
|
|
|
|
|
|
|
|
|
2.42
|
|
|
|
|
|
|
Enterprise Revenue
|
|
|
35
|
%
|
|
|
1,264,965,115
|
|
|
1,271,628,871
|
|
|
|
|
|
|
|
1,317,671,994
|
|
|
|
|
|
|
|
|
|
1,370,378,874
|
|
|
52 |
P a g e
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Fisher,
Former
President, Bob Evans
Restaurants
|
|
|
194,423
|
|
|
|
0
|
|
|
BER Operating
Income
|
|
|
50
|
%
|
|
|
49,447,876
|
|
|
45,206,317
|
|
|
|
|
|
|
|
|
|
|
58,173,971
|
|
|
|
|
|
|
|
|
|
|
|
|
66,900,067
|
|
|
|
|
|
|
|
|
|
BER Total Net Sales
|
|
|
25
|
%
|
|
|
874,102,816
|
|
|
877,272,671
|
|
|
|
|
|
|
|
|
|
|
910,523,766
|
|
|
|
|
|
|
|
|
|
|
|
|
946,944,717
|
|
|
|
|
|
|
|
|
|
Enterprise Plan
Funding (4)
|
|
|
25
|
%
|
|
|
|
|
|
126%
|
|
(1)
|
The target bonus amounts are pro-rated for any changes in the base salary during the year.
|
|
(2)
|
For purposes of these performance goals, the results excluded the impact of several items, primarily noncash gains and charges, which included the gain on the Restaurants Transaction, legal and professional fees
associated with the Restaurants Transaction and our acquisition of Pineland Farms Potato Company, and impairment charges. In June 2016, the Compensation Committee adopted the goals, weighting, the minimum/threshold, target and maximum target
metrics, as well as the items that would be excluded for the fiscal year 2017 compensation. The Compensation Committee believes the exclusion of these items more accurately reflects the Company’s actual performance and results of operations.
|
|
(3)
|
The term “EPS” means diluted earnings per share, on a non-GAAP basis, based on the diluted weighted-average number of shares of common stock outstanding during the period presented. A reconciliation of
earnings per share is as follows for fiscal year 2017:
|
|
|
|
|
|
|
|
Consolidated Financial Results (Thousands, except earnings
per share data)
|
|
Fiscal year 2017
(in thousands)
|
|
|
Operating Income from continuing operations as reported
|
|
$
|
30,126
|
|
|
Net interest expense from continuing operations as reported
|
|
|
9,216
|
|
|
|
|
|
|
|
|
Pre-tax income from continuing operations as reported
|
|
|
20,910
|
|
|
Income tax expense from continuing operations
|
|
|
3,874
|
|
|
|
|
|
|
|
|
Net income from continuing operations as reported
|
|
|
17,036
|
|
|
Net income from discontinued operations as reported
|
|
|
109,431
|
|
|
|
|
|
|
|
|
Net income as reported
|
|
|
126,467
|
|
|
|
|
|
|
|
|
Adjustments to operating income from continuing operations
|
|
|
22,888
|
|
|
Adjustments to interest expense from continuing operations
|
|
|
872
|
|
|
|
|
|
|
|
|
Total pretax adjustments from continuing operations
|
|
|
23,760
|
|
|
Non-GAAP operating income from continuing operations
|
|
|
53,014
|
|
|
Non-GAAP interest expense from continuing operations
|
|
|
8,344
|
|
|
|
|
|
|
|
|
Non-GAAP pre-tax income from continuing operations
|
|
|
44,670
|
|
|
Adjustments to tax expense from continuing operations
|
|
|
7,713
|
|
|
|
|
|
|
|
|
Non-GAAP income tax expense from continuing operations
|
|
|
11,587
|
|
|
|
|
|
|
|
|
Non-GAAP net income from continuing operations
|
|
|
33,083
|
|
|
Adjustments to discontinued operations
|
|
|
(94,567
|
)
|
|
|
|
|
|
|
|
Non-GAAP net income from discontinued operations
|
|
|
14,864
|
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
$
|
47,947
|
|
|
|
|
|
|
|
|
Earnings Per Share as reported (consolidated):
|
|
|
|
|
|
· Basic
|
|
$
|
6.37
|
|
|
· Diluted
|
|
$
|
6.28
|
|
|
Non-GAAP earnings per share (consolidated):
|
|
|
|
|
|
· Basic
|
|
$
|
2.42
|
|
|
· Diluted
|
|
$
|
2.38
|
|
|
Average Shares Outstanding:
|
|
|
|
|
|
· Basic
|
|
|
19,839
|
|
|
· Diluted
|
|
|
20,132
|
|
|
(4)
|
Utilizes Enterprise Plan funding level based on achievement of EPS and Enterprise Revenue goals. Enterprise Plan funding must be greater than 0% to fund fiscal year 2017 annual cash bonuses.
|
53 |
P a g e
The following table shows for each of our named executive officers the value of their target stock-based compensation for
fiscal year 2017, as well as the related performance goals and goal attainment level:
Stock-Based Incentive Compensation: Fiscal Year 2017 Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive
|
|
2017 Value of
Target Stock-
Based
Compensation
(1)
($)
|
|
2017 Value of
Actual Stock-
Based
Compensation
Awarded
(2)
($)
|
|
Performance Incentive Plan, Weighting and Attainment Level
|
|
|
|
|
Goal
|
|
Weighting
|
|
Minimum/Threshold
|
|
Actual
(3)
($)
|
|
|
|
|
|
|
Target
|
|
|
|
|
|
|
|
Maximum
|
|
|
Saed Mohseni,
Former
President and Chief
Executive Officer
|
|
1,750,000(4)
|
|
1,502,655
|
|
Relative TSR -
PSU
|
|
100%
|
|
35%tile = 50%
Payout
50%tile= 100% Payout
75%tile=150% Payout
|
|
2,942,700
|
|
Mark E. Hood,
Chief
Administrative, and Chief
Financial Officer
|
|
528,000
|
|
174,239
|
|
Time Based -
RSU
|
|
33%
|
|
3-Year Ratable Vesting
|
|
292,989
|
|
|
|
303,755
|
|
Relative TSR -
PSU
|
|
67%
|
|
35%tile = 50%
Payout
50%tile= 100% Payout
75%tile=150%
Payout
|
|
594,854
|
|
J. Michael Townsley,
President, BEF Foods, Inc.
|
|
440,000
|
|
145,186
|
|
Time Based -
RSU
|
|
33%
|
|
3-Year Ratable Vesting
|
|
244,135
|
|
|
|
253,146
|
|
Relative TSR -
PSU
|
|
67%
|
|
35%tile = 50%
Payout
50%tile= 100% Payout
75%tile=150%
Payout
|
|
495,745
|
|
Colin M. Daly,
Executive
Vice President, General
Counsel and Corporate
Secretary
|
|
243,750
|
|
80,452
|
|
Time Based-
RSU
|
|
33%
|
|
3-Year Ratable Vesting
|
|
135,282
|
|
|
|
140,239
|
|
Relative TSR -
PSU
|
|
67%
|
|
35%tile = 50%
Payout
50%tile= 100% Payout
75%tile=150%
Payout
|
|
274,635
|
|
Richard D. Hall,
Executive
Vice President, Supply Chain
and Logistics
|
|
215,233
|
|
71,045
|
|
Time Based -
RSU
|
|
33%
|
|
3-Year Ratable Vesting
|
|
119,465
|
|
|
|
123,813
|
|
Relative TSR -
PSU
|
|
67%
|
|
35%tile = 50%
Payout
50%tile= 100% Payout
75%tile=150%
Payout
|
|
242,466
|
|
John Fisher, Former
President, Bob Evans
Restaurants
|
|
262,500
|
|
86,643
|
|
Time Based -
RSU
|
|
33%
|
|
3-Year Ratable Vesting
|
|
145,693
|
|
|
|
151,008
|
|
Relative TSR -
PSU
|
|
67%
|
|
35%tile = 50%
Payout
50%tile= 100% Payout
75%tile=150%
Payout
|
|
295,725
|
54 |
P a g e
|
(1)
|
In fiscal year 2016 the Compensation Committee adopted a new incentive compensation program which continued in fiscal year 2017. For each of our NEOs except for Mr. Mohseni, the program as described above has two
components, three-year time-based restricted stock units (33%) that generally vest ratably over three years, and three-year performance share units (67%) that generally cliff-vest after three years if the performance metric is met, and
depending upon the level of achievement. Mr. Mohseni’s long-term incentive consists solely of 3-year performance share units.
|
|
(2)
|
The target value of the RSU and PSU awards was divided by the closing price of our common stock on the date of the grant, $39.69, to determine the number of shares subject to the RSU award. The actual value of PSUs
shown in the table is based on the final Monte Carlo simulation used for accounting purposes which was $34.08. Because of the effect of the valuation method used, i.e., Monte Carlo simulation, the stock had a lower value than the actual trading
value on the date of valuation, which causes a lower value than the actual target valuation.
|
|
(3)
|
In connection with the Restaurants Transaction, the Compensation Committee determined to accelerate and fully vest all outstanding, unvested awards under our Equity and Cash Incentive Plan (PSUs at the 100% of target
level) upon the consummation of the Restaurants Transaction and execution by the applicable participant of the required Release. The closing price of our common stock on April 28, 2017 the date of the consummation of the Restaurants
Transaction, was $66.74. See “
Potential Payouts Upon Severance or Change-in-Control—Restaurants Transaction Acceleration and Vesting of Awards Table
” for additional details regarding the accelerated vesting of awards
outstanding under our Equity and Cash Incentive Plan as a result of the consummation of the Restaurants Transaction.
|
|
(4)
|
This amount reflects a value equal to 250 percent of Mr. Mohseni’s base salary. As described in our “
Compensation Discussion and Analysis
” section above, Mr. Mohseni was not granted any
PSUs in fiscal year 2016 due to his start date of January 1, 2016 and the Compensation Committee granted him a PSU award on June 23, 2016 equal to 250 percent of his base salary.
|
Summary Compensation for Fiscal Years 2017, 2016, and 2015
The following
table lists the annual compensation for the fiscal years 2017, 2016, and 2015 of our chief executive officer, chief financial officer, and our three other most highly compensated executive officers, as of the end of fiscal year 2017. These executive
officers are our “named executive officers” for the fiscal year 2017.
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and
Principal
Position
|
|
Year
|
|
Salary
(1)
($)
|
|
Bonus
(2)
($)
|
|
Stock Awards
(3)
($)
|
|
Option
Awards
(3)
($)
|
|
Non-Equity
Incentive Plan
Compensation
(4)
($)
|
|
All
Other
Compensation
(5)
($)
|
|
Total
($)
|
|
Saed Mohseni,
Former
President
and
Chief Executive
Officer
|
|
2017
2016
|
|
700,000
218,077
|
|
0
0
|
|
1,502,655
350,009
|
|
0
0
|
|
884,100
226,415
|
|
1,340,338
1,075
|
|
4,427,094
795,576
|
|
Mark E. Hood,
Chief Administrative
and Chief Financial
Officer
|
|
2017
2016
2015
|
|
480,000
498,462
364,615
|
|
0
0
0
|
|
497,204
804,531
439,984
|
|
0
0
0
|
|
394,056
312,000
140,987
|
|
9,882
8,076
48,564
|
|
1,381,142
1,623,069
994,150
|
|
J. Michael Townsley,
President,
BEF Foods, Inc.
|
|
2017
2016
2015
|
|
400,000
438,012
404,765
|
|
0
0
0
|
|
414,327
433,382
420,580
|
|
0
0
0
|
|
197,860
425,314
56,491
|
|
26,984
60,681
48,109
|
|
1,039,171
1,357,389
929,945
|
|
Colin M. Daly,
Executive Vice
President, General
Counsel and
Corporate Secretary
|
|
2017
2016
2015
|
|
325,000
337,500
303,617
|
|
0
0
0
|
|
233,709
251,166
324,984
|
|
0
0
0
|
|
246,285
195,000
43,670
|
|
16,659
8,316
6,978
|
|
821,654
791,983
679,249
|
|
Richard D. Hall,
Executive Vice
President, Supply
Chain and Logistics
|
|
2017
|
|
286,544
|
|
0
|
|
194,858
|
|
0
|
|
217,389
|
|
7,501
|
|
706,292
|
|
John Fisher,
Former President,
Bob Evans
Restaurants
|
|
2017
|
|
329,808
|
|
0
|
|
251,662
|
|
0
|
|
0
|
|
564,216
|
|
1,145,686
|
55 |
P a g e
|
(1)
|
Fiscal year 2016 had 53 weeks, which is one week more than a regular fiscal year for the Company, which resulted in an additional pay period. The additional pay period increased the actual salary paid to each of the
Company’s employees, including the named executive officers, so that the amount shown exceeds the applicable base salary. The amount paid to Mr. Mohseni was prorated to the actual period of his service during fiscal year 2016, which
started on January 1, 2016. Each of the named executive officers, except Messrs. Hood and Hall, deferred a portion of his salary under our executive deferral plan, as set forth in the “
Nonqualified Deferred Compensation for Fiscal Year
2017 Table
” that follows. Each of the named executive officers also contributed a portion of his salary to our 401(k) plan.
|
|
(2)
|
Amounts in this column represent cash bonus amounts that are not performance based, such as discretionary cash bonuses. Our bonus programs are performance based.
|
|
(3)
|
These amounts represent the aggregate grant date fair value of awards for fiscal years 2017, 2016 and 2015, computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic
718. Amounts shown do not reflect compensation actually received or that may be realized in the future. The value actually received by the named executive officers in fiscal year 2017 is set forth in the “
Option Exercises and Stock Vested
for Fiscal Year 2017 Table
” that follows. For further information, including information relating to the assumptions underlying the valuation of the stock awards, refer to Note 6 of our financial statements in our Annual Report on Form 10-K
for the year ended April 28, 2017 as filed with the SEC. See the “
Grants of Plan-Based Awards for Fiscal Year 2017
” table for information on stock awards made in fiscal year 2017.
|
|
(4)
|
The amounts in this column represent the annual cash bonus earned by each of the named executive officers in the fiscal year indicated based on the achievement of performance goals established by the Compensation
Committee at the beginning of that fiscal year. Bonuses shown were paid within 2-1/2 months after the end of the respective fiscal year, and Messrs. Hood and Townsley deferred a portion of their cash bonuses to our executive deferral plan. The
amounts deferred for fiscal year 2015 were included in the “
Nonqualified Deferred Compensation Table
” for fiscal year 2016. The amounts deferred for fiscal year 2016 are included in the “
Nonqualified Deferred Compensation
Table for Fiscal Year 2017 Table.
” The amounts deferred for fiscal year 2017 will be included in the “
Nonqualified Deferred Compensation Table
” for fiscal year 2018.
|
|
(5)
|
See the “
All Other Compensation for Fiscal Year 2017 Table
” below for additional information.
|
All
Other Compensation for Fiscal Year 2017
The following table describes each component of the “All Other Compensation” column in the “
Summary
Compensation Table
” above for fiscal year 2017.
All Other Compensation for Fiscal Year 2017 Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Executive
|
|
Contributions
to
Employee
Plans
(1)
($)
|
|
Tax
Reimbursement
Payments
($)
|
|
Other
($)
|
|
Total
($)
|
|
Saed Mohseni,
Former
President and Chief
Executive Officer
(2)
|
|
27,126
|
|
0
|
|
1,313,212
|
|
1,340,338
|
|
Mark E. Hood,
Chief
Administrative and Chief
Financial Officer
(3)
|
|
3,816
|
|
0
|
|
6,066
|
|
9,882
|
|
J. Michael
Townsley,
President, BEF Foods
,
Inc.
(4)
|
|
23,618
|
|
0
|
|
3,366
|
|
26,984
|
|
Colin M. Daly,
Executive Vice President,
General Counsel and
Corporate Secretary
(5)
|
|
14,604
|
|
0
|
|
2,055
|
|
16,659
|
|
Richard D. Hall,
Executive
Vice President, Supply
Chain and Logistics (6)
|
|
4,069
|
|
0
|
|
3,432
|
|
7,501
|
|
John Fisher,
Former President, Bob Evans
Restaurants
(7)
|
|
9,227
|
|
0
|
|
554,989
|
|
564,216
|
56 |
P a g e
|
(1)
|
The amounts in this column include our contributions paid to the accounts of each of the named executive officers under our 401(k) plan, our executive deferral plan and our supplemental executive retirement plan
(“SERP”). In fiscal year 2017, we made 401(k) matching contributions to Messrs. Mohseni, Hood, Townsley, Daly, Hall and Fisher, respectively, of $9,956, $3,816, $4,243, $4,000, $4,068 and $3,853. During fiscal year 2017, we made a matching
contribution to the executive deferral plan of Messrs. Mohseni, Hood, Townsley, Daly, Hall, and Fisher, respectively, in the amount of $17,170, $0, $19,374, $10,604, $0 and $5,374. Our fiscal year 2016 contribution to the SERP which was contributed
in fiscal year 2017 was a nominal $1.01 for Messrs. Townsley and Hall. The other named officers are not participants in the SERP.
|
|
(2)
|
Other compensation for Mr. Mohseni includes $1,560 phone allowance, $2,334 company paid life insurance, and payments related to his severance as a result of the Restaurants Transaction of $1,260,000 representing
90% of 2 times annual base salary and $49,318 representing the Company’s estimated obligation for the cost of premiums, and related administrative fees, for group health (medical, dental and/or vision) for a period equal to 24 months including
$25,000 for life insurance. See “
Summary of Separation Agreements—Saed Mohseni
” for additional information regarding the payments made in connection with the departure of Mr. Mohseni.
|
|
(3)
|
Other compensation for Mr. Hood includes a $1,560 phone allowance and $4,506 of company paid life insurance.
|
|
(4)
|
Other compensation for Mr. Townsley includes a $1,560 phone allowance and $1,806 of company paid life insurance.
|
|
(5)
|
Other compensation for Mr. Daly includes a $1,560 phone allowance and $495 of company paid life insurance.
|
|
(6)
|
Other compensation for Mr. Hall includes a $1,560 phone allowance and $1,872 of company paid life insurance.
|
|
(7)
|
Other compensation for Mr. Fisher includes a $1,440 phone allowance, $961 of company paid life insurance, and payments related to his severance of $525,000 representing 18 months of base salary and $12,780
representing the Company’s estimated obligation for the cost of premiums, and related administrative fees, for group health (medical, dental and/or vision) for a period equal to 12 months, and $14,808 of earned but previously unpaid paid time
off. See “
Summary of Separation Agreements—John Fisher
” for additional information regarding the payments made in connection with the departure of Mr. Fisher.
|
57 |
P a g e
Grants of Plan-Based Awards for Fiscal Year 2017
The following table presents information on plan-based awards granted to each of the named executive officers during fiscal year 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name /
Award Type
|
|
Grant Date
|
|
Estimated Possible Payouts
Under Non-Equity Incentive Plan
Awards
(1)
|
|
Estimated Possible Payouts
Under Equity Incentive Plan
Awards
(2)
|
|
All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Unit
(#)
(3)
|
|
Exercise
or Base
Price of
Stock
and
Option
Awards
($/Sh)
(4)
|
|
Grant
Date Fair
Value
of
Stock
and
Option
Awards
($)
(5)
|
|
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|
|
|
Saed Mohseni
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
|
|
|
|
0
|
|
700,000
|
|
1,400,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
6/23/2016
|
|
|
|
|
|
|
|
0
|
|
44,092
|
|
66,138
|
|
|
|
34.08
|
|
1,502,655
|
|
Mark E. Hood
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
|
|
|
|
0
|
|
312,000
|
|
624,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
6/23/2016
|
|
|
|
|
|
|
|
0
|
|
8,913
|
|
13,370
|
|
|
|
34.08
|
|
303,755
|
|
RSUs
|
|
6/23/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,390
|
|
39.69
|
|
174,239
|
|
RSUs (6)
|
|
6/23/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
484
|
|
39.69
|
|
19,210
|
|
J. Michael Townsley
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
|
|
|
|
0
|
|
260,000
|
|
520,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
6/23/2016
|
|
|
|
|
|
|
|
0
|
|
7,428
|
|
11,142
|
|
|
|
34.08
|
|
253,146
|
|
RSUs
|
|
6/23/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,658
|
|
39.69
|
|
145,186
|
|
RSUs (6)
|
|
6/23/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
403
|
|
39.69
|
|
15,995
|
|
Colin M. Daly
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
|
|
|
|
0
|
|
195,000
|
|
390,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
6/23/2016
|
|
|
|
|
|
|
|
0
|
|
4,115
|
|
6,173
|
|
|
|
34.08
|
|
140,239
|
|
RSUs
|
|
6/23/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,027
|
|
39.69
|
|
80,452
|
|
RSUs (6)
|
|
6/23/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
328
|
|
39.69
|
|
13,018
|
|
Richard D. Hall
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
|
|
|
|
0
|
|
172,038
|
|
344,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
6/23/2016
|
|
|
|
|
|
|
|
0
|
|
3,633
|
|
5,450
|
|
|
|
34.08
|
|
123,813
|
|
RSUs
|
|
6/23/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,790
|
|
39.69
|
|
71,045
|
|
John Fisher
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
|
|
|
|
0
|
|
194,423
|
|
388,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
6/23/2016
|
|
|
|
|
|
|
|
0
|
|
4,431
|
|
6,647
|
|
|
|
34.08
|
|
151,008
|
|
RSUs
|
|
6/23/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,183
|
|
39.69
|
|
86,643
|
|
RSUs (6)
|
|
6/23/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
353
|
|
39.69
|
|
14,011
|
The Company did not grant any option awards in fiscal year 2017, and therefore has not included the column in the table
above titled: “All Other Option Awards: Number of Securities Underlying Options.”
58 |
P a g e
|
|
(1)
|
Non-equity incentive plan award amounts represent the threshold, target and maximum payments under our annual cash bonus plan for fiscal year 2017. The actual cash bonuses earned for fiscal year 2017 are disclosed in
the “Non-Equity Incentive Plan Compensation” column of the “
Summary Compensation Table
” and were paid in July 2017. The Compensation Committee established the target awards and performance goals in June 2016, and each
named executive could receive between 0 percent and 200 percent of his target cash bonus based on the achievement of the performance goals for the fiscal year. The performance goals and bonus multiples used to determine payouts are described above
under the “
Annual Cash Performance Bonuses
” section of the “
Compensation Discussion and Analysis
” section.
|
|
|
(2)
|
The Compensation Committee established the target awards under our equity incentive plan for fiscal year 2017 in June 2016, and each named executive could receive between 0% and 150% of target PSU awards, and the actual
amount to be received by the participating named executives in June 2018 was based on the achievement of pre-established performance criteria for the three year fiscal year period for 2017 to 2019. The expense associated with all of the equity-based
awards based on fiscal years 2017-2019 performance are calculated and recorded in accordance with the Stock Compensation Topic of the FASB ASC, none of which is included in the fiscal year 2017 “
Summary Compensation Table.
” Our
Equity and Cash Incentive Plan and the awards made under this program for the fiscal year 2017-2019 performance period are discussed in the “
Compensation Discussion and Analysis
” section of this proxy above. However, as set forth in
the “
Stock-Based Incentive Compensation: Fiscal Year 2017 Table
” and “
Option Exercises and Stock Vested for Fiscal Year 2017 Table,
” in connection with the consummation of the Restaurants Transaction, the
Compensation Committee determined to accelerate and fully vest all outstanding, unvested PSUs under our Equity and Cash Incentive Plan at the target level (or 100%) and execution by the applicable participant of the required Release. See
“
Restaurants Transaction Acceleration and Vesting of Awards Table
” for more information regarding the amount and value of the awards received upon the consummation of the Restaurants Transaction.
|
|
|
(3)
|
Restricted stock units generally vest ratably 33% per year over the next three years on the anniversary of the grant date. However, as set forth in the “
Stock-Based Incentive Compensation: Fiscal Year 2017
Table
” and “
Option Exercises and Stock Vested for Fiscal Year 2017 Table,
” in connection with the consummation of the Restaurants Transaction, the Compensation Committee determined to accelerate and fully vest all
outstanding, unvested RSUs under our Equity and Cash Incentive Plan at the target level (or 100%) and execution by the applicable participant of the required Release. See “
Potential Payouts Upon Severance or
Change-in-Control—Restaurants Transaction Acceleration and Vesting of Awards Table
” for more information regarding the amount and value of the awards received upon the consummation of the Restaurants Transaction.
|
|
|
(4)
|
Represents the closing price of our stock on NASDAQ on the date of grant, or in the case of the PSU’s, the value determined through the Monte Carlo simulation valuation method.
|
|
|
(5)
|
The aggregate grant date fair value of awards for fiscal year 2017, computed in accordance with the Stock Compensation Topic of the FASB ASC. For further information, including information relating to the assumptions
underlying the valuation of the stock awards, refer to Note 6 of our financial statements in our Form 10-K for the year ended April 28, 2017, as filed with the SEC.
|
|
|
(6)
|
Represents RSUs awarded in lieu of merit-based base salary increases, which were scheduled to vest ratably over the next three years on the anniversary of the grant date; however, in connection with the Restaurants
Transaction, the Compensation Committee determined to accelerate and fully vest all outstanding, unvested time-based RSUs upon the consummation of the Restaurants Transaction and execution by the applicable participant of the required Release.
|
59 |
P a g e
Outstanding Equity Awards at 2017 Fiscal Year-End
The following table provides information on the equity awards held by the NEOs at the end of fiscal year 2017. In January 2017, our Compensation Committee determined to
accelerate and vest all of our outstanding restricted share and performance share awards under our Equity and Cash Incentive Plan in connection with the consummation of the Restaurants Transaction and execution by the applicable participant of the
required Release, which eliminated any outstanding awards at year-end for each of our NEOs except for Mr. Hall, who retains the outstanding, exercisable but unexercised options identified in the table below. For additional information about the
acceleration and vesting of such awards in connection with the consummation of the Restaurants Transaction, see “
Compensation Discussion and Analysis—Stock-Based Incentive Compensation
” and “
Restaurants Transaction
Acceleration and Vesting of Awards Table
.”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name
|
|
Option
Grant Date
|
|
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
|
|
Number
of
Securities
Underlying
Unercised
Options
Un-
exercisable
(#)
|
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
|
Grant
Date
|
|
Number
of Shares
or Units
of
Stock
That
Have Not
Vested
(#)
|
|
Market
Value of
Shares
or
Units
of Stock
That
Have Not
Vested
($)
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)
|
|
Equity
Incentive
Plan
Awards:
Market
Value of
Unearned
Shares,
Units
or Other
Rights
That
Have Not
Vested
($)
|
|
Saed Mohseni
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Mark E. Hood
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
J. Michael Townsley
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Colin M. Daly
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Richard D. Hall
|
|
|
6/10/08
6/10/08
6/9/09
6/9/09
6/22/10
6/22/10
|
|
|
|
8,835
6,165
737
1,476
1,380
691
|
(1)
(2)
(3)
(4)
(5)
(6)
|
|
-
|
|
-
|
|
$
|
33.95
33.95
32.30
32.30
26.35
26.35
|
|
|
|
6/10/18
6/10/18
6/9/19
6/9/19
6/22/20
6/22/20
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
John Fisher
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
(1)
|
Incentive Stock Options (ISO) vested June 10, 2011.
|
|
|
(2)
|
Non-Qualified Stock Options (NQSO) vested June 10, 2011.
|
|
|
(3)
|
Incentive Stock Options (ISO) vested June 9, 2012.
|
|
|
(4)
|
Non-Qualified Stock Options (NQSO) vested June 9, 2011.
|
|
|
(5)
|
Incentive Stock Options (ISO) vested June 22, 2013.
|
|
|
(6)
|
Non-Qualified Stock Options (NQSO) vested June 22, 2011.
|
60 |
P a g e
Option Exercises and Stock Vested for Fiscal Year 2017
The following table provides information regarding (1) options exercised by each NEO during fiscal year 2017, including the number of shares acquired upon exercise
and the value realized, and (2) the number of shares acquired by each NEO through stock grants and/or upon the vesting of restricted stock awards and the value realized. The values shown below do not reflect the payment of any applicable
withholding tax and/or broker commissions.
Option Exercises and Stock Vested for Fiscal Year 2017 Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
Shares
Acquired
on Exercise
(#)
|
|
|
Value Realized
on Exercise
($)
|
|
|
Number of
Shares
Acquired
on Vesting
(1)
(#)
|
|
|
Value Realized
on Vesting
(2)
($)
|
|
|
Saed
Mohseni
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
53,233
|
(3)
|
|
|
3,508,528
|
|
|
Mark E.
Hood
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
33,693
|
|
|
|
2,140,602
|
|
|
J. Michael
Townsley
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
28,085
|
(3)
|
|
|
1,737,633
|
|
|
Colin M.
Daly
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
16,204
|
|
|
|
1,020,654
|
|
|
Richard D.
Hall
|
|
|
0
|
|
|
|
0
|
|
|
|
13,518
|
|
|
|
849,364
|
|
|
John
Fisher
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
15,693
|
(3)
|
|
|
1,004,096
|
|
|
|
(1)
|
In addition to scheduled vesting of outstanding restricted stock awards under our Equity and Cash Incentive Plan during fiscal year 2017, this column includes shares vesting as a result of Compensation Committee’s
determination to accelerate and vest all time-based restricted stock awards, RSUs and all PSUs (at the target, or 100%, level) in connection with the consummation of the Restaurants Transaction and execution by the applicable participant of the
required Release. With respect to Mr. Mohseni, the Compensation Committee’s determination to accelerate and vest all outstanding PSUs at the target, or 100%, level resulted in Mr. Mohseni’s receiving 250% of the target amount, or
44,092 PSUs. See “
Potential Payouts Upon Severance or Change-in-Control—Restaurants Transaction Acceleration and Vesting of Awards Table
” for additional information on the amount and value of the awards received upon the
consummation of the Restaurants Transaction.
|
|
|
(2)
|
Value realized for restricted stock and RSU awards was calculated using the closing stock price of our common stock on the date the restricted stock award vested.
|
|
|
(3)
|
Includes shares of Company stock that were deferred in a Company deferral plan and that vested in fiscal 2017.
|
Nonqualified Deferred Compensation
We maintain two plans that provide for the deferral of compensation on a basis that is not tax-qualified – the Bob Evans Farms, Inc. and Affiliates Amended and
Restated Executive Deferral Plan and the Bob Evans Farms, Inc. and Affiliates Fourth Amended and Restated Supplemental Executive Retirement Plan or “SERP.”
Executive Deferral Plan
. The executive deferral plan is a nonqualified deferred compensation plan. Currently, approximately 140 employees are eligible to
participate in the deferral plan, including our executive officers.
Our deferral plan is intended to promote personal savings and facilitates tax deferral, as
well as compensating for deferral limits under our 401K Plan. The primary benefit to participants in this plan is that most federal and state income taxes are deferred until the money is
distributed from the plan, so savings accumulate on a pre-tax basis. We believe our deferral plan benefits our stockholders by promoting employee retention. We also believe we need to offer this type of plan to compete effectively for executive
talent because many other companies offer this type of plan.
Participants elect to “invest” the amounts they defer among 18 investment choices, including
a Company stock fund. Contributions are not actually invested in mutual funds or in Company stock. Instead, the amounts deferred
61 |
P a g e
are mathematically tracked as though they were invested in the funds or Company stock (if elected). A third party service provider tracks the funds’ returns and then credits or debits the
value of each participant’s plan account based on the performance of the investment funds he or she selects. With the exception of the Company’s stock fund, participants can change their investment selections on a daily basis. They do not
receive an above market rate of interest (“preferential earnings”) on their contributions.
Our matching contributions to the executive deferral plan are
subject to the discretion of our Board. For calendar year 2015 (which includes part of our 2015 and 2016 fiscal years), the Board authorized a matching contribution to the deferral plan of $.25 per dollar on the first six percent of compensation.
Participant deferrals to the executive deferral plan vest immediately, while our matching contributions vest in increments based on years of service on the same schedule as the 401K Plan.
Participants’ rights to receive their vested plan account balances from us are not secured or guaranteed. However, we account for the participants’ plan
balances in our financial statements. To offset this liability, we have funded a rabbi trust primarily with company-owned life insurance policies, and to a limited extent with cash and shares of Company stock.
The executive deferral plan is intended to comply with the requirements affecting deferred compensation under Section 409A of the Code. For example, the executive
deferral plan requires a six-month delay for the payment of certain benefits to a participant in connection with the participant’s termination of
employment under circumstances required by Section 409A of the Code.
Supplemental Executive
Retirement Plan
. We maintain a SERP for certain management employees, including two of our NEOs. The SERP is a nonqualified defined contribution plan designed to supplement the retirement benefits of its participants.
In June 2009, our Board amended the SERP to preclude the addition of new participants. In June 2015, our Board amended the SERP to limit further contributions to
participants to a nominal level. It determined to reduce the funding rather than freeze it in order to avoid the immediate vesting of the plan benefits.
If a
participant’s employment with us ends for any reason other than retirement, death, disability or a change in control (as described above), then the participant will generally forfeit his or her SERP account.
Participants’ rights to receive their SERP balances from us are not secured or guaranteed. However, we account for participants’ plan balances in our
financial statements. To offset this liability, we have funded a rabbi trust primarily with company- owned life insurance policies, and to a limited extent, with cash and shares of Company stock.
The SERP is intended to comply with the requirements affecting deferred compensation under Section 409A of the Code. For example, the SERP has been amended to
require a six-month delay for the payment of certain benefits to a participant in connection with the participant’s termination of employment under circumstances required by Section 409A of the Code.
62 |
P a g e
Nonqualified Deferred Compensation for Fiscal Year 2017
The following table sets forth contributions, earnings, distributions and the total dollar balance for each named executive for fiscal year 2017 under the executive
deferral plan and the SERP.
Nonqualified Deferred Compensation for Fiscal Year 2017 Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Type of Plan
|
|
Executive
Contributions in
Last FY
(1)
($)
|
|
|
Registrant
Contributions in
Last FY
(2)
($)
|
|
|
Aggregate Earnings
in Last
FY
(3)
($)
|
|
|
Aggregate
Withdrawals/
Distributions
(4)
($)
|
|
|
Aggregate Balance
at Last
FYE
($)
|
|
|
Saed
Mohseni
|
|
Deferral Plan
SERP
|
|
|
1,921,104
N/A
|
|
|
|
17,170
N/A
|
|
|
|
1,527,066
N/A
|
|
|
|
0
N/A
|
|
|
|
442,238
N/A
|
|
|
Mark E.
Hood
|
|
Deferral Plan
SERP
|
|
|
0
N/A
|
|
|
|
0
N/A
|
|
|
|
0
N/A
|
|
|
|
0
N/A
|
|
|
|
0
N/A
|
|
|
J. Michael
Townsley
|
|
Deferral Plan
SERP
|
|
|
82,531
0
|
|
|
|
19,374
1
|
|
|
|
759,131
75,636
|
|
|
|
0
0
|
|
|
|
1,876,323
788,123
|
|
|
Colin M.
Daly
|
|
Deferral Plan
SERP
|
|
|
42,375
N/A
|
|
|
|
10,604
N/A
|
|
|
|
6,349
N/A
|
|
|
|
40,111
N/A
|
|
|
|
99,298
N/A
|
|
|
Richard D.
Hall
|
|
Deferral Plan
SERP
|
|
|
0
0
|
|
|
|
0
1
|
|
|
|
1,632
61,625
|
|
|
|
0
0
|
|
|
|
17,001
642,134
|
|
|
John Fisher
|
|
Deferral Plan
SERP
|
|
|
224,434
N/A
|
|
|
|
5,374
N/A
|
|
|
|
153,256
N/A
|
|
|
|
0
N/A
|
|
|
|
256,631
N/A
|
|
|
|
(1)
|
This column includes cash and share contributions to the executive deferral plan in the amounts shown. Messrs. Hood and Hall did not contribute to the deferred compensation plan in fiscal year 2017. Amounts in this
column included deferred compensation from the executive’s base salary that are also included in the “Salary” column totals for fiscal year 2017 reported in the “
Summary Compensation Table
”. The remainder of each
contribution amount shown in this column was deferred from the annual cash bonus or equity award included in the “Non-Equity Incentive Plan Compensation” and “Stock Awards” column totals, respectively, also reported in the
“
Summary Compensation Table
”.
|
|
|
(2)
|
The SERP contributions included in this column represent the nominal funding level adopted by the Board in June 2015. The Deferral Plan amounts in this column represent the Company’s matching contribution to the
executive deferral plan for the calendar year ended December 31, 2016. All contributions reflected in this column are also included in the “All Other Compensation” column totals for fiscal year 2017 reported in the “
Summary
Compensation Table
”.
|
|
|
(3)
|
Represents the market-based earnings/loss credited to each named executive’s accounts in accordance with the plans described in the narrative preceding this table.
|
|
|
(4)
|
Participants in the SERP may not receive distributions during their employment, except in the event of hardship. Distributions are made under our executive deferral plan only in accordance with the requirements of
Section 409A of the Code and the plan, which is more fully explained in the narrative preceding this table.
|
Executive Officer Compensation Information
The following details the changes in our executive leadership and their compensation during fiscal 2017 and for fiscal 2018.
On November 14, 2015, the Company entered into an employment agreement with Mr. Mohseni to serve as the Company’s President and Chief Executive Officer
with a start date effective January 1, 2016. The employment agreement had a three-year term expiring on December 31, 2018. The agreement would thereafter be automatically extended unless either Mr. Mohseni or the Company were to give
advance notice of non-extension.
Mr. Mohseni’s agreement was terminable with 14 days’ notice by the Company without any liability for either
“Cause,” or if Mr. Mohseni terminated his employment without “Good Reason.” If the Company terminated the agreement other than for Cause, or if Mr. Mohseni terminated for “Good Reason,” the Company would have
been required to pay him: (a) any base salary that was accrued but unpaid; (b) any rights or benefits accrued under Company’s plans; (c) any prior year earned, but unpaid bonus; (d) his base salary for a period of 24 months;
(e) a pro-rated bonus for the then-current fiscal year based on the actual achievement of the applicable performance
63 |
P a g e
goals for such fiscal year (without pro-ration of such performance goals); and (f) an amount equal to the Company’s estimated obligation for the cost of premiums, and related
administrative fees, for group health (medical, dental and/or vision) for a period equal to 24 months, and an amount up to $25,000 for life insurance.
Upon
Mr. Mohseni’s death during the term of the Agreement, the Company was required to pay to his estate any base salary that was accrued but unpaid and any business expenses that were unreimbursed, all as of the date of
termination of employment, and any vested rights and benefits provided under plans and programs of the Company in which he was participating immediately prior to his
death (collectively, the “Plans and Programs”), determined in accordance with the applicable terms and provisions of such Plans and Programs.
Mr. Mohseni was also a participant in the Company’s CIC/Severance Plan, which provides that in the event of a change in control (“Change in Control”
or “CIC”), and the subsequent termination of Mr. Mohseni’s position within the 24 months following the CIC, he would be paid an amount equal to three times his base salary and bonus amount, and be provided with life, medical,
dental and vision benefits in which he and his family were participating at the time of termination for a period of 24 months, or the cash equivalent to such benefits.
The employment agreement contained certain business protection provisions in favor of the Company, such as a requirement that Mr. Mohseni not disclose confidential
information or trade secrets of the Company and during the term of the Agreement and for 24 months following its termination, Mr. Mohseni will neither hold any position with any “Competing Business” nor solicit employees of the
Company to leave their employment.
Mr. Mohseni was also entitled to participate in the Company’s benefit plans and programs to the extent generally
available to all employees.
In connection with the consummation of the Restaurants Transaction, Mr. Mohseni left the employ of the Company and
the Company, with the approval of the Board, negotiated a separation agreement with Mr. Mohseni, which permitted Mr. Mohseni, among other things, to accept employment with Bob Evans Restaurants, LLC, the purchaser in the Restaurants
Transaction. In addition to the payments made under the separation agreement, Mr. Mohseni agreed to a general release of all claims against the Company and its affiliates, to a 2-year restrictive covenant not to compete with the Company or its
affiliates, and to a 2-year covenant not to solicit any employee of the Company or its affiliates to terminate his or her employment with the Company. The separation agreement and actual payments made to Mr. Mohseni are described more fully
below under “
Summary of Separation Agreements—Saed Mohseni.
”
In advance of the consummation of the Restaurants Transaction, the Company
entered into a separation agreement with Mr. Fisher effective April 1, 2017. In addition to the payments made under the separation agreement, Mr. Fisher agreed to a general release of all claims against the Company and its affiliates,
to a 1-year restrictive covenant not to compete with the Company or its affiliates, and to a 1-year covenant not to solicit any employee of the Company or its affiliates to terminate his or her employment with the Company. The separation agreement
and actual payments made to Mr. Fisher are described more fully below under “
Summary of Separation Agreements—John Fisher.
” Due to the fact that Mr. Fisher was not employed by the Company as of April 28, 2017, no
potential severance amounts payable as of April 28, 2017 are listed under “
Potential Payouts upon Severance or Change in Control—Restaurants Transaction Acceleration and Vesting of Awards Table
” below.
In addition, on January 24, 2017, the Board approved employment agreements to be
64 |
P a g e
entered into with Messrs. Townsley, Hood and Daly in connection with the Restaurants Transaction and effective as of April 29, 2017, the first day of our 2018 fiscal year. Under each
employment agreement, if the Company terminates the employment agreement other than for “Cause,” if the executive terminates for “Good Reason,” or with respect to Messrs. Hood and Daly, if the executive voluntarily terminates his
employment at least 30 months after the date of his employment agreement but before the end of the five-year initial term, then the Company will be required to pay such executive: (i) any base salary that is accrued but unpaid, (ii) any
rights or benefits accrued under the Company’s plans, (iii) any prior year earned, but unpaid bonus, (iv) his base salary for a period of 24 months, (v) a pro-rated bonus for the then-current fiscal year based on the
actual achievement of the applicable performance goals for such fiscal year (without pro-ration of such performance goals), and (vi) an amount equal to the Company’s estimated obligation for the cost of premiums, and related
administrative fees, for group health (medical, dental and/or vision) for a period equal to 18 months, and an amount up to $25,000 for life insurance. If the executive dies during the term of his employment agreement, the Company is required to pay
to his estate any base salary that is accrued but unpaid and any business expenses that are unreimbursed, all as of the date of termination of employment, and any vested rights and benefits provided under plans and programs of the Company in which
he was participating immediately prior to his death, determined in accordance with the applicable terms and provisions of such plans and programs. In addition, Messrs. Townsley, Hood and Daly will continue to be participants in the CIC/Severance
Plan.
Executive Severance Benefits.
Our CIC/Severance Plan generally establishes the compensation to be paid to a participant upon
separation from the Company. All officers of the rank of vice president and above are severance participants.
A severance participant is entitled to severance compensation in return for a release of claims and their agreement not to compete if they retire, are disabled, die, or
are terminated without cause. The compensation is (1) up to one year in base salary payable in 26 even payments (which payments stop upon employment); (2) a lump sum payment for the employer’s portion of the health care costs for
12-months; (3) if employed as of the end of a fiscal year, a lump sum payment of their bonus based on the plan metrics and payable at the time the bonus payments are paid; (4) for any equity grants issued before June 1, 2015, the
acceleration of 50 percent of unvested equity grants outstanding, or if a special award where the service has been performed, the acceleration of 100 percent of unvested equity grants outstanding, and for grants after that date, per the terms of the
grant agreement. The Compensation Committee has the discretion to accelerate the vesting of any of the unvested equity grants. All amounts paid are subject to federal, state and local taxes. A participant would also be entitled to receive his or her
vested benefits in any of the Company’s plans, such as the 401K Plan and deferral plan.
Change in Control Benefits.
The Compensation Committee has
designated officers who are eligible to participate in the change in control portion of the CIC/Severance Plan. Change in control participants are separated into three classes depending upon the rank of their position and other factors. Historically
only the chief executive officer is a participant in Class A.
If a participant’s employment is terminated without “cause” or by the executive
officer for “good reason,” during the two-year period following a change in control for a Class A participant, and the one-year period for a
65 |
P a g e
Class B or C participant, the participant will be eligible for the following payments and benefits:
|
|
|
|
|
Participant’s Class
|
|
Amount of Payment
|
|
|
|
|
Class A
|
|
300% of the sum of (i) base salary and (ii) current year bonus amount
|
|
|
|
|
Class B
|
|
200% of the sum of (i) base salary and (ii) current year bonus amount
|
|
|
|
|
Class C
|
|
100% of the sum of (i) base salary and (ii) current year bonus amount
|
For 18 months after the participant’s date of termination, we will either continue all life, medical, dental and/or vision
insurance programs in which the participant was
participating, or provide compensation. The Compensation Committee has the discretion to accelerate the vesting of
any unvested equity grants. All amounts paid are subject to federal, state and local taxes.
Provisions Common to Both the Severance and CIC Benefits.
In
order to be entitled to either change in control or severance payments and benefits, the participant will be required to comply with the terms and conditions of the CIC/Severance Plan. The participant must execute a release and waiver of all claims
against us and to comply with post-employment covenants to protect our
confidential information, not to compete, not to solicit our employees and not to disparage or otherwise impair the Company’s reputation, goodwill or commercial interests.
The CIC/Severance Plan can be amended by the Compensation Committee at any time and for any reason, except during the period of a potential or actual CIC of the
Company. The CIC/Severance Plan includes a provision stating that once eligible for benefits under the CIC/Severance Plan, each participant shall remain a participant in the CIC/Severance Plan until the amounts and benefits payable under the
CIC/Severance Plan have been paid or provided to the participant in full.
If any portion of the payments and benefits provided between the officer and us would be
considered “excess parachute payments” under Section 280G(b)(1) of the Code, this amount is payable by the officer since we do not provide or reimburse our employees for their payment of the taxes associated with payments under our
CIC/Severance Plan. These payments are sometimes referred to as “tax gross-up payments.” Participation may be terminated if, among other things, we notify the participant that they no longer have coverage, provided that we cannot give this
notice after we learn that activities have begun which could result in a CIC if completed, or during the period following a CIC. If a participant breaches any of his or her obligations under the CIC/Severance Plan after a CIC occurs, the participant
must repay any payment received plus interest.
Potential Payouts upon Severance or
Change-in-Control.
The following table shows the approximate gross amounts payable to our NEOs pursuant to our CIC/Severance Plan in the event of their
termination of employment under the circumstances described below. The figures in the table represent the incremental cost/value of the payments and do not include amounts that have already vested, or that have been earned or paid. The amounts will
be reduced by the amount of applicable federal, state and local taxes. No payment is made unless the person receiving the amounts enters into a severance agreement that releases the Company from any liability, and where the person agrees not to
compete with the Company, as well as other restrictions.
66 |
P a g e
The table assumes that the terminations took place on April 28, 2017, the last day of fiscal year 2017. The
termination provisions of our CIC/Severance Plan are described under the caption “
Change in Control Benefits
” above. For the table below, Change in Control is defined in the CIC/Severance Plan as (1) the acquisition of 30% or
more of the voting power of the Company common stock, (2) consummation of a merger following which the Company’s stockholders no longer hold at least 50% of the voting power of the entity resulting from the merger, (3) a sale of all
or substantially all of the Company’s assets, or (4) the liquidation of the Company. Change in Control is defined in the Equity and Cash Incentive Plan as above, along with (5) a change in the majority of the Company’s board of
directors. The table below assumes that the Compensation Committee, utilizing the discretion allowed under the Equity and Cash Incentive Plan, accelerated the vesting of outstanding equity awards following the Change in Control and upon a
termination of employment without Cause or for Good Reason, and that PSU vesting was accelerated at the Target level.
67 |
P a g e
Potential Payouts upon Severance or Change-in-Control Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Severance
|
|
|
Equity
1, 2
|
|
|
Retirement
Benefits
|
|
|
Health &
Welfare
|
|
|
Excise
Tax
Reimbursement/
Adjustment
|
|
|
Total
3
|
|
|
Saed Mohseni
|
|
|
Death
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Disability
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
For
Cause
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Voluntary
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Retirement
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Without
Cause
|
|
|
$1,400,000
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$25,121
|
|
|
|
$0
|
|
|
|
$1,425,121
|
|
|
Change In
Control
|
|
|
$4,752,300
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$25,121
|
|
|
|
$0
|
|
|
|
$4,777,421
|
|
|
Mark E. Hood
|
|
|
Death
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
0
|
|
|
Disability
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
For
Cause
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Voluntary
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Retirement
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Without
Cause
|
|
|
$480,000
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$12,309
|
|
|
|
$0
|
|
|
|
$492,309
|
|
|
Change In
Control
|
|
|
$1,748,112
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$18,463
|
|
|
|
$0
|
|
|
|
$1,766,575
|
|
|
J. Michael Townsley
4
|
|
|
Death
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Disability
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
For
Cause
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Voluntary
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Retirement
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Without
Cause
|
|
|
$400,000
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$13,286
|
|
|
|
$0
|
|
|
|
$413,286
|
|
|
Change In
Control
|
|
|
$1,195,720
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$19,929
|
|
|
|
$0
|
|
|
|
$1,215,649
|
|
|
Colin M. Daly
|
|
|
Death
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Disability
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
For
Cause
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Voluntary
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Retirement
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Without
Cause
|
|
|
$325,000
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$12,129
|
|
|
|
$0
|
|
|
|
$337,129
|
|
|
Change In
Control
|
|
|
$1,142,570
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$18,194
|
|
|
|
$0
|
|
|
|
$1,160,764
|
|
|
Richard D. Hall
4
|
|
|
Death
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Disability
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
For
Cause
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Voluntary
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Retirement
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$0
|
|
|
Without
Cause
|
|
|
$286,977
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$8,459
|
|
|
|
$0
|
|
|
|
$295,436
|
|
|
Change In
Control
|
|
|
$1,008,732
|
|
|
|
$0
|
|
|
|
$0
|
|
|
|
$12,688
|
|
|
|
$0
|
|
|
|
$1,021,420
|
|
68 |
P a g e
|
(1)
|
The Compensation Committee, consistent with the terms of the Equity and Cash Incentive Plan, determined to accelerate the vesting of all unvested and outstanding awards under the Equity and Cash Incentive Plan and that
the performance criteria applicable to each PSU would be deemed to have been satisfied at the target level (100%), effective upon the consummation of the Restaurants Transaction and execution by the applicable participant of the required Release.
The Compensation Committee’s decision applied to all of the Company’s outstanding and unvested awards under the Equity and Cash Incentive Plan as of April 28, 2017, including all RSUs and PSUs. For the actual awards vesting, and the
value of such accelerated awards, see the “
Restaurants Transaction Acceleration and Vesting of Awards Table
” below.
|
|
(2)
|
Equity values are based on a stock price of $66.74, which was the closing price of our stock on April 28, 2017, the last day of fiscal year 2017. Equity amounts listed above represent the amount that would be paid
assuming the equity grants would by their terms vest upon the termination event specified, and in the event of a Change in Control, the amount assuming an acceleration of vesting by the Compensation Committee. For the actual awards vesting, and the
value of such accelerated awards, see the “
Restaurants Transaction Acceleration and Vesting of Awards Table
” below.
|
|
(3)
|
The payments indicated under the above table are based upon the terms and conditions of the CIC/Severance Plan as described above under “
Executive Officer Compensation Information
.”
|
|
(4)
|
The retirement benefit figures under the SERP and the executive deferral plan are not shown as payable for Mr. Townsley or Mr. Hall upon Death, Disability, Voluntary/Retirement, and termination without Cause
or Change in Control, because both are fully vested in our SERP and executive deferral plan. Accordingly, we would not incur any incremental cost for these retirement benefits in the event of Mr. Townsley’s or Mr. Hall’s
termination of employment under these circumstances. The aggregate account balances under the SERP and executive deferral plan as of April 28, 2017 are presented in the table above under the heading “
Nonqualified Deferred Compensation
for Fiscal Year 2017 Table
.”
|
Restaurants Transaction Acceleration and Vesting of Awards Table
|
|
|
|
|
|
|
|
|
Name
|
|
Restricted Shares
|
|
Performance Shares
|
|
Amount(1)
$
|
|
Saed Mohseni
(2)
|
|
6,094
|
|
44,092(3)
|
|
3,349,414
|
|
Mark E.
Hood
|
|
13,432
|
|
14,541
|
|
1,866,918
|
|
J. Michael
Townsley
|
|
8,704
|
|
12,808
|
|
1,435,711
|
|
Colin M.
Daly
|
|
5,577
|
|
7,233
|
|
854,939
|
|
Richard D.
Hall
|
|
4,221
|
|
6,332
|
|
704,307
|
|
John Fisher
(4)
|
|
5,514
|
|
7,788
|
|
887,775
|
|
|
(1)
|
Amount based on $66.74, the closing price of our common stock on April 28, 2017.
|
|
|
(2)
|
For a summary of the amounts paid to Mr. Mohseni, in connection with his separation from the Company in April 2017, see the “
Summary of Separation Agreements—Saed Mohseni
” below.
|
|
|
(3)
|
With respect to Mr. Mohseni, the Compensation Committee’s determination to accelerate and vest all outstanding PSUs at the target, or 100 percent, level resulted in Mr. Mohseni’s receiving 250
percent of his base salary for fiscal year 2017, or 44,092 PSUs.
|
|
|
(4)
|
For a summary of the amounts paid to Mr. Fisher in connection with his separation from the Company in April 2017, see the “
Summary of Separation Agreements—John Fisher
” below.
|
Summary of Separation Agreements
Saed
Mohseni
.
In addition to the accelerated vesting of Mr. Mohseni’s outstanding equity awards under the Company’s Equity and Cash Incentive Plan, as set forth above in the “
Restaurants Transaction Acceleration and
Vesting of Awards Table
,” the following table shows the actual payments made to Mr. Mohseni in connection with his separation from the Company pursuant to the terms of the separation agreement, effective as of April 27, 2017,
between the Company and Mr. Mohseni. Under his separation agreement, Mr. Mohseni agreed to a general release of claims, a 2-year restrictive covenant not to compete with the Company or its affiliates, and a 2-year covenant not to solicit
any employee of the Company or its affiliates to terminate his or her employment with the Company, in addition to the following payments:
|
|
|
|
|
Cash Severance
Payment(1)
|
|
$1,309,318
|
|
Non-Equity Incentive Compensation(2)
|
|
$884,100
|
|
Other Benefits
and Perquisites
|
|
$ -
|
69 |
P a g e
|
|
(1)
|
Consists of the following amounts (i) $1,260,000, which represents 90 percent of Mr. Mohseni’s base salary of $700,000 multiplied by 2; and (ii) $49,318, which represents the Company’s estimated
obligation for the cost of premiums, and related administration fees, for group health (medical, dental and/or vision) for a period equal to 24 months, which includes $25,000 for life insurance.
|
|
|
(2)
|
Consists of a cash payment of $884,100, which represents Mr. Mohseni’s 2017 fiscal year bonus based on the actual achievement of the applicable performance goals for such period.
|
John Fisher
. In addition to the accelerated vesting of Mr. Fisher’s outstanding equity awards under the Company’s Equity and Cash Incentive
Plan, as set forth above in the “
Restaurants Transaction Acceleration and Vesting of Equity Awards Table
,” the following table shows the actual payment made to Mr. Fisher in connection with his separation from the Company
pursuant to the terms of the separation agreement, effective as of April 1, 2017, between the Company and Mr. Fisher. Under his separation agreement, Mr. Fisher agreed to a general release of claims, a 1-year restrictive covenant not
to compete with the Company or its affiliates, and a 1-year covenant not to solicit any employee of the Company or its affiliates to terminate his or her employment with the Company, in addition to the following payments:
|
|
|
|
|
Cash Severance
Payment
|
|
$537,780 (1)
|
|
Non-Equity Incentive Compensation
|
|
$ -
|
|
Other Benefits
and Perquisites
|
|
$ -
|
|
|
(1)
|
Consists of the following amounts (i) $525,000, which represents 18 months of Mr. Fisher’s base salary; and (ii) $12,780, which represents the Company’s estimated obligation for the cost of
premiums, and related administrative fees, for group health (medical, dental and/or vision) for a period equal to 12 months.
|
70 |
P a g e
S
TOCK
O
WNERSHIP
O
F
C
ERTAIN
B
ENEFICIAL
O
WNERS
AND
M
ANAGEMENT
Stock Ownership of Certain Beneficial Owners Table
The following table shows the stockholders known to us to be the beneficial owners of more than five percent of our outstanding common stock as of June 30,
2017 (or earlier date as reported by the beneficial owner), the most recent practicable date for the calculation of the ownership table with respect to the Annual Meeting. In preparing the table, the Company has relied upon information contained in
Schedules 13D, 13G and 13FHR filed with the SEC, including any amendments to such Schedules.
|
|
|
|
|
|
|
Name and Address
of Beneficial
Owner
|
|
Amount and Nature
of Beneficial Ownership
(1)
|
|
Percent of Class
(2)
|
|
BlackRock Inc.
55 East 52nd Street
New York, New York 10055
|
|
2,824,478 (3)
|
|
14.2%
|
|
Vanguard Group,
Inc.
100 Vanguard Boulevard
Malvern, Pennsylvania 19355
|
|
2,624,592 (4)
|
|
13.2%
|
|
Dimensional Fund
Advisors LP
Building One
6300 Bee Cave Road
Austin, Texas 78746
|
|
1,062,811 (5)
|
|
5.3%
|
|
|
(1)
|
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Unless otherwise indicated, the individuals and entities named in
the table have sole voting and investment power with respect to all shares of common stock beneficially owned.
|
|
|
(2)
|
The percent of class is based upon 19,930,672 shares of our common stock outstanding as of June 30, 2017. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days
of June 30, 2017 are deemed to be outstanding for the purpose of computing the percentage ownership of the person holding those options, but are not treated as outstanding for the purpose of computing the percentage ownership of any other
person.
|
|
|
(3)
|
Based on information contained in BlackRock, Inc.’s Schedule 13G/A filed with the SEC on January 12, 2017.
|
|
|
(4)
|
Based on information contained in Vanguard Group, Inc.’s Schedule 13G/A filed with the SEC on February 10, 2017.
|
|
|
(5)
|
Based on information contained in Dimensional Fund Advisors LP’s Schedule 13G filed with the SEC on February 9, 2016.
|
71 |
P a g e
Stock Ownership of Directors and Management Table
The following table summarizes, as of June 30, 2017, the amount of our common stock beneficially owned by each director, each individual named in the
“
Summary Compensation Table
,” and by all of our current directors and executive officers as a group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature of Beneficial Ownership (1)
|
|
|
|
|
|
Name of Beneficial
Owner or Group
|
|
Director /NEO
|
|
|
Common
Shares
Presently
Held
|
|
|
Restricted
Stock and
Restricted
Stock
Units
Vested Or
That Vest
Within 60
Days(2)
|
|
|
Common
Shares
Which Can
Be
Acquired
Upon
Exercise of
Options
Exercisable
Within
60
Days(3)
|
|
|
Total
|
|
|
Common
Shares
and
Restricted
Stock
Units in
Deferral
Plans(4)
|
|
|
Percent
of Class
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas N.
Benham
|
|
|
Director
|
|
|
|
5,500
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5,500
|
|
|
|
24,443
|
|
|
|
*
|
|
|
Charles M.
Elson
|
|
|
Director
|
|
|
|
4,623
|
|
|
|
2,695
|
|
|
|
0
|
|
|
|
4,623
|
|
|
|
5,049
|
|
|
|
*
|
|
|
Mary Kay
Haben
|
|
|
Director
|
|
|
|
2,470
|
|
|
|
0
|
|
|
|
0
|
|
|
|
2,470
|
|
|
|
10,852
|
|
|
|
*
|
|
|
David W.
Head
|
|
|
Director
|
|
|
|
4,557
|
|
|
|
0
|
|
|
|
0
|
|
|
|
4,557
|
|
|
|
2,695
|
|
|
|
*
|
|
|
Kathy S.
Lane
|
|
|
Director
|
|
|
|
4,557
|
|
|
|
2,640
|
|
|
|
0
|
|
|
|
7,197
|
|
|
|
0
|
|
|
|
*
|
|
|
Eileen A.
Mallesch
|
|
|
Director
|
|
|
|
13,080
|
|
|
|
0
|
|
|
|
0
|
|
|
|
13,080
|
|
|
|
16,196
|
|
|
|
*
|
|
|
Larry S.
McWilliams
|
|
|
Director
|
|
|
|
6,702
|
|
|
|
2,640
|
|
|
|
0
|
|
|
|
9,342
|
|
|
|
0
|
|
|
|
*
|
|
|
Kevin M.
Sheehan
|
|
|
Director
|
|
|
|
5,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5,000
|
|
|
|
12,762
|
|
|
|
*
|
|
|
Michael F.
Weinstein
|
|
|
Director
|
|
|
|
4,323
|
|
|
|
0
|
|
|
|
0
|
|
|
|
4,323
|
|
|
|
5,049
|
|
|
|
*
|
|
|
Paul S.
Williams
|
|
|
Director
|
|
|
|
10,926
|
|
|
|
0
|
|
|
|
0
|
|
|
|
10,926
|
|
|
|
16,196
|
|
|
|
*
|
|
|
Saed
Mohseni
|
|
|
Director & NEO
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
56,260
|
|
|
|
*
|
|
|
Mark E.
Hood
|
|
|
NEO
|
|
|
|
32,636
|
|
|
|
0
|
|
|
|
0
|
|
|
|
32,636
|
|
|
|
1,643
|
|
|
|
*
|
|
|
J. Michael
Townsley
|
|
|
NEO
|
|
|
|
40,152
|
|
|
|
0
|
|
|
|
0
|
|
|
|
40,152
|
|
|
|
34,741
|
|
|
|
*
|
|
|
Colin M.
Daly
|
|
|
NEO
|
|
|
|
16,690
|
|
|
|
0
|
|
|
|
0
|
|
|
|
16,690
|
|
|
|
0
|
|
|
|
*
|
|
|
Richard D.
Hall
|
|
|
NEO
|
|
|
|
40,344
|
|
|
|
0
|
|
|
|
19,284
|
|
|
|
59,628
|
|
|
|
0
|
|
|
|
*
|
|
|
John Fisher
|
|
|
NEO
|
|
|
|
7,752
|
|
|
|
0
|
|
|
|
0
|
|
|
|
7,752
|
|
|
|
5,787
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All current executive officers and directors as a group (17 persons)
|
|
|
|
|
|
|
205,375
|
|
|
|
5,280
|
|
|
|
19,284
|
|
|
|
229,939
|
|
|
|
141,457
|
|
|
|
1.2
|
%
|
|
*
|
Represents ownership of less than one percent of our outstanding common stock.
|
|
(1)
|
Note that the shares listed for a person who is both a director and officer are the total shares beneficially owned in both capacities. Unless otherwise indicated, each individual has voting and dispositive power over
the listed shares of common stock and such voting and dispositive power is exercised solely by the named individual or shared with a spouse. All fractional shares have been rounded to the nearest whole share. The Company has included for this
purpose the gross number of shares of common stock deliverable, but actual shares received may be less if the participant elects to use shares for the payment of applicable withholding taxes.
|
|
(2)
|
Represents the number of shares of restricted stock and restricted stock units that are scheduled to vest within 60 days of June 30, 2017. Shares of restricted stock are shares of our common stock subject to
transfer and other restrictions which lapse upon vesting of the restricted stock. Each restricted stock unit represents the contingent right to receive one share of common stock upon vesting of the unit. Shares of restricted stock have voting rights
prior to vesting; restricted stock units do not. In August 2016, all of our directors received an award of 2,640 RSUs. All directors other than Ms. Lane and Mr. McWilliams deferred receipt of their August 2016 awards, which are reflected
in the column titled “Common Shares and Restricted Stock Units in Deferral Plans” above.
|
|
(3)
|
Includes the number of shares of common stock that the named person can acquire upon the exercise of stock options currently exercisable or exercisable within 60 days of June 30, 2017.
|
72 |
P a g e
|
(4)
|
Represents the number of phantom shares of common stock held in the Company’s nonqualified deferred compensation plans, described in further detail under the section titled “
Nonqualified Deferred
Compensation for Fiscal Year 2017
.” Phantom shares held in the deferral plans included in this table are payable solely in shares of the Company’s common stock following death, disability or termination. Phantom shares do not have
voting rights. Includes total vested and unvested shares derived from stock awards, dividend equivalent rights earned on the aforementioned stock awards, and cash compensation deferrals subsequently invested into Company stock.
|
|
(5)
|
The percent of class is based upon 19,930,672 shares of our common stock outstanding as of June 30, 2017. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days
of June 30, 2017, restricted stock units that are scheduled to vest within 60 days of June 30, 2017 and phantom shares held in deferral plans payable within 60 days of a termination event are deemed to be outstanding for the purpose of
computing the percentage ownership of the person holding those options, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
|
Section 16(A) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (“Exchange Act”) requires that the Company’s directors and executive officers and any person or
entity holding more than ten percent of our outstanding common stock report their initial ownership of our common stock, and any subsequent changes in their ownership, to the SEC. Specific due dates have been established by the SEC, and we are
required to disclose in this proxy statement any late reports. We believe that during the 2017 fiscal year, our directors and executive officers timely complied with all Section 16(a) filing
requirements. In making this statement, we have relied solely on a review of Section 16(a) ownership reports furnished to us during the 2017 fiscal year pursuant to the SEC rules and written representations from all such individuals that no
annual Form 5 reports were required to be filed for them for the 2017 fiscal year.