PROPOSAL NO. 1 approval of 2023 long-term incentive plan
General Information
Our stockholders are being asked to approve the 2023 Plan as set forth in this Proposal No. 1. Our Board adopted the 2023 Plan on August 25, 2023, subject to approval by our stockholders at our Special Meeting. The 2023 Plan will replace the 2015 Plan. Any shares available under the 2015 Plan, which would otherwise expire on June 9, 2025 (the tenth anniversary of the date of its approval by our stockholders), will not be carried over into our 2023 Plan and no further grants will be made under the 2015 Plan after August 18, 2023, the record date for which information is provided in this Proxy Statement with respect to outstanding stock awards. However, if the 2023 Plan is not approved at our Special Meeting, the 2015 Plan will continue in effect through June 9, 2025.
The 2023 Plan will allow us to make various forms of equity- and cash-based incentive compensation awards to our officers, employees, non-employee directors and other eligible personnel. These awards are integral to our ability to attract and retain highly-skilled personnel who are in great demand in the market. The 2023 Plan will offer participants an opportunity to obtain equity ownership in our company, increasing their personal involvement with our future. The 2023 Plan also will allow us to connect compensation opportunities to the achievement of important short and long-term financial and strategic objectives.
The Board believes long-term equity and other forms of incentive compensation are necessary and critical components of our overall compensation program. Similar to other companies in our industry, we believe equity compensation is integral in providing a competitive total compensation package necessary to recruit, retain and reward key employees. Equity awards are commonly used by companies our size, and the ability to provide competitive grants is essential to competing for talent in the highly competitive apparel industry. Therefore, we believe it is imperative to provide long-term incentive awards as a component of our compensation program. We will continue to seek an appropriate balance between meeting employee hiring, retention, and compensation goals and avoiding excessive stockholder dilution.
In determining the number of shares to be requested, our Compensation Committee, which recommended the 2023 Plan to the Board, considered the overhang created by the 2023 Plan, our historical three-year burn rate and the views of stockholders and proxy advisory firms. The 2,800,000 shares that would be authorized under the 2023 Plan represent 6.1% of our Common Stock outstanding (excluding shares held in treasury) as of the record date. On that date, the reported closing price per share of our Common Stock on the Nasdaq Global Select Market was $20.78 per share.
As of August 18, 2023, the projected overhang created by the 2023 Plan will be 11.6%, assuming the 2023 Plan request is approved by our stockholders, as shown below. The Board views this level of overhang as reasonable and moderate, given the important role equity ownership plays in attracting and retaining employees.
If the 2023 Plan is not approved, the 2015 Plan will stay in effect until it expires on June 9, 2025. After that we would lose an indispensable part of our compensation program. The Board believes we would therefore face serious challenges to our ability to attract and retain management and other key personnel which, if not otherwise addressed, would adversely affect our business. In short, the Board believes strongly that approval of the 2023 Plan is in the best interests of our company and our stockholders and that, if the 2023 Plan is not approved, our business and the interests of our stockholders will be harmed.
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income on the date the shares are received equal to the fair market value of the shares on that date (determined without regard to the restrictions), and we would be entitled to a corresponding tax deduction, subject to the limitations of Section 162(m) of the Code. If an early income election is made, no income would be realized if and when the shares become vested and, upon a subsequent sale of the shares, any gain or loss will be treated as long- or short-term capital gain or loss, depending on whether the sale occurs more than one year after the date the shares were issued to the participant (in the form of restricted shares).
◾ | RESTRICTED STOCK UNITS AND OTHER AWARDS |
In general, a participant who receives shares of our Common Stock and/or cash in settlement of a restricted stock unit or performance share unit award will realize ordinary income equal to the then value of the shares and/or cash he or she received, and we will have a corresponding tax deduction, subject to the limitations of Section 162(m) of the Code. Similarly, if a participant receives cash and/or shares pursuant to a performance unit, performance share or other form of award under the 2023 Plan, then, in general, the participant will realize ordinary income upon such receipt equal to the then fair market value of the shares and/or the amount of cash received, and we will be entitled to a corresponding tax deduction, subject to the limitations of Section 162(m) of the Code. The participant’s tax basis in any such shares received will generally be equal to the value of the shares on the date that ordinary income is realized, and the participant’s tax holding period for the shares will generally begin on that date. Gain or loss on a subsequent sale of the shares will be long- or short-term capital gain or loss, depending on whether the sale occurs more than one year after the participant’s holding period begins.
We have the right to deduct or withhold, or require a participant to remit to us, any amounts sufficient to satisfy applicable tax withholding requirements arising in connection with the exercise, vesting, lapse of restrictions or other taxable event pertaining to any awards made under the 2023 Plan. The Compensation Committee may, at the time the award is granted or thereafter, require or permit any such withholding requirement to be satisfied, in whole or in part, by delivery of, or withholding from the award, shares. If shares of our Common Stock to be issued pursuant to awards under the 2023 Plan are withheld to satisfy the participant’s tax withholding obligations, the withholding must be based upon a tax rate that is no less than the minimum applicable withholding rate and up to the maximum applicable withholding rate.
NEW PLAN BENEFITS
Future grants under the 2023 Plan will be made at the discretion of the Compensation Committee and, accordingly, are not yet determinable, other than the previously approved grant of 320,000 special performance share units (PSUs) to be issued to Morris Goldfarb, our Chairman and Chief Executive Officer, no later than February 29, 2024 and annual equity grants of PSUs and RSUs that will be granted to Morris Goldfarb and Sammy Aaron, pursuant to their respective employment agreements. For more details about the special PSU grant and the annual PSU grants, please refer to the section entitled “Recent Developments” in this Proxy Statement. In addition, benefits under the 2023 Plan will depend on a number of factors, including the fair market value of our Common Stock on future dates. Consequently, it is not possible to determine the benefits that might be received by participants receiving discretionary grants under the 2023 Plan.
Vote Required
Approval of the 2023 Plan requires the affirmative vote of the holders of a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote at the Special Meeting.
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| The Board of Directors deems the approval of the 2023 Plan to be in the best interests of G-III and our stockholders and recommends a vote FOR the 2023 Plan. | |
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Executive Compensation
Because Proposal No. 1 relates to a compensation plan in which executive officers and directors of the Company will participate, the Company is required under applicable disclosure rules to furnish certain executive compensation information related to our last completed fiscal year, the fiscal year ended January 31, 2023 (“fiscal 2023”). As such, the information contained in the section entitled “Compensation Discussion and Analysis” and the related compensation tables contained in the section entitled “Executive Compensation Tables” consists of information and tables that were included in our proxy statement for the 2023 Annual Meeting of Stockholders (the “2023 Annual Proxy Statement”), which was filed with the SEC on May 5, 2023 (collectively, the “Annual Meeting Proxy Statement Information”). The disclosures in the following section entitled “Recent Developments” describe annual equity grants to Named Executive Officers and directors, as well as the new employment agreements entered into with each of Morris Goldfarb and Sammy Aaron, all of which occurred after the end of fiscal 2023 and, accordingly, were all not described in the 2023 Annual Meeting Proxy Statement.
Recent Developments
Annual Equity grants to NEOs on April 27, 2023
On April 27, 2023, the Compensation Committee awarded to our Named Executive Officers (“NEOs”) an aggregate of 300,963 performance share units (“PSUs”) pursuant to the 2015 Plan. The PSUs will enable the Named Executive Officers to receive shares of our common stock if and to the extent that the PSU awards vest based on the Company’s performance against two metrics: three-year cumulative earnings before interest and taxes (“Adjusted EBIT”) and three-year average return on invested capital (“ROIC”). The actual number of PSUs that may vest is subject to adjustment based on the performance level achieved relative to each metric. For more information with respect to these PSUs, please see the Current Report on Form 8-K that the Company filed with the SEC on May 1, 2023. On April 27, 2023, the Compensation Committee also awarded to our NEOs an aggregate of 248,873 restricted stock units with three-year cliff vesting.
Annual RSU grants to directors on March 29, 2023
On March 29, 2023, consistent with our historical practice, the Compensation Committee authorized an annual RSU grant to each of our non-employee directors valued at $130,000. The Lead Independent Director received an additional annual grant of RSUs valued at $50,000, the Chair of the Audit Committee received an additional annual grant of RSUs valued at $25,000 and the Chair of the Nominating and Corporate Governance Committee received an additional annual grant of RSUs valued at $15,000. These grants which were made on the date of the 2023 Annual Meeting, vest on the first anniversary of the date of the Annual Meeting (on June 8, 2024). All of these RSU grants were subject to the election of each director nominee as a director at the 2023 Annual Meeting.
New Employment Agreements with Morris Goldfarb and Sammy Aaron
The Company has entered into new employment agreements with Morris Goldfarb, our Chairman and Chief Executive Officer, (the “Chairman and CEO Agreement”) as well as with Sammy Aaron, our Vice Chairman and President (the “Vice Chairman and President Agreement”).
Employment Agreement with Morris Goldfarb
The Chairman and CEO Agreement with Mr. Goldfarb, effective as of August 9, 2023, is the result of a process involving discussions between Mr. Goldfarb and our Compensation Committee that took place over several months. The Compensation Committee and our Board of Directors listened to the concerns that our stockholders voiced regarding the prior compensation arrangements with Mr. Goldfarb. The Committee and the Board factored in the lack of shareholder support received for the Company’s Say on Pay proposals in recent years. The Committee and the Board had tried over the years to be responsive to our stockholders, but faced the reality that the Company could not unilaterally change the existing employment agreement with Mr. Goldfarb which has a term that runs through January 31, 2026.
Mr. Goldfarb voluntarily engaged with us and worked with us in agreeing to the Chairman and CEO Agreement. The major financial metrics contained in the Chairman and CEO Agreement were first outlined in May 2023.
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OUR “SAY ON PAY” RESULTS LAST YEAR AND OUR RESPONSE
At last year’s Annual Meeting of Stockholders, a majority of our stockholders did not support our Say on Pay proposal despite the significant steps we took to reconfigure the compensation program in fiscal 2022. The major issues raised by our stockholders involved the contractual annual cash incentive formulas in effect for our Chairman and CEO and our Vice Chairman and President. We believe that the annual cash incentive formula, as evidenced by its application in fiscal 2023, is a reasonable performance metric that rewards results that meet or exceed our forecasts and provides for reduced or no annual cash incentive award when results are below our forecasts. For fiscal 2023, the Company recorded a non-cash impairment charge of $347 million related to our write-down of goodwill resulting in the Company reporting a net loss of $138.2 million for fiscal 2023. Notwithstanding shareholders’ concerns regarding the use of our current cash incentive formula, as a result of the net loss reported by us for the year, Mr. Goldfarb and Mr. Aaron did not earn any cash bonuses for fiscal 2023. Their total compensation for fiscal 2023 as set forth in the Fiscal 2023 Summary Compensation Table is significantly less than their total compensation for fiscal 2022.
Neither the Board nor the Compensation Committee exercised discretion with respect to Mr. Goldfarb’s and Mr. Aaron’s compensation. In addition, annual cash bonuses for our other NEOs were based on pre-established criteria. On average, these cash bonuses declined by 22%.
Last year, the Compensation Committee successfully negotiated substantial changes to the annual cash incentives earned by our Chairman and CEO and our Vice Chairman and President for fiscal 2022 with both executives voluntarily agreeing to amend their employment agreements.
Mr. Goldfarb is eligible to receive approximately 6% of pre-tax income and Mr. Aaron is eligible to receive approximately 4% of pre-tax income as annual cash bonuses. Given record profitability in fiscal 2022, our CEO earned a cash bonus of $17,168,681 and our Vice Chairman and President earned a cash bonus of $11,207,333 for that fiscal year. The Compensation Committee negotiated a cap on the amount of these cash bonuses, reducing Mr. Goldfarb’s cash bonus to $7,500,000 and Mr. Aaron’s cash bonus to $7,250,000.
The remaining amounts were paid in stock and the stock awards were subject to significant holding periods of three years for our Chairman and CEO and one year for our Vice Chairman and President. In lieu of the remaining portion of his cash bonus, Mr. Goldfarb received 415,704 shares valued at $12,167,656 on March 29, 2022. Based on the closing price of $16.12 for our common stock on April 17, 2023, the record date for the Annual Meeting, these shares are now worth $6,701,148. Mr. Aaron received 152,235 shares valued at $4,455,918. Based on the closing price of $16.12 for our common stock on April 17, 2023, these shares are now worth $2,454,028. We believe that the revisions to the manner in which the annual incentive for fiscal 2022 was paid to each of our Chairman and CEO and our Vice Chairman and President further aligned their interests with our stockholders.
After the significant voluntary amendment of these employment agreements failed to produce majority support for Say on Pay last year, it was determined that the contractual bonus arrangements were not merely compensation matters, but also constituted a corporate governance issue that the full Board needed to address.
The Board of Directors took the following steps:
| ◾ | An Ad Hoc Committee of independent directors was formed in August 2022 to review alternatives to the annual incentive arrangements in the employment agreements. |
| ◾ | The Ad Hoc Committee retained a second independent compensation consulting firm to review the annual incentive arrangements, provide fresh thinking and define alternative approaches for compensation for Mr. Goldfarb and Mr. Aaron. |
| ◾ | Based on the advice received from the compensation consultants, the Ad Hoc Committee presented several alternatives to the executives that were structured to bring their compensation in line with market practice. |
| ◾ | The Board also informed the executives that if agreement on new compensation packages and amendments to the employment agreements were not reached, the current contracts would not be extended beyond their then current expiration dates, which were January 31, 2025 for Mr. Goldfarb and January 31, 2024 for Mr. Aaron. |
| ◾ | If the agreements were not extended, Mr. Goldfarb’s cash bonus formula would continue to apply to fiscal 2023, 2024 and 2025 and Mr. Aaron’s cash bonus formula would continue to apply to fiscal 2023 and 2024. |
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CLAWBACK/EXECUTIVE INCENTIVE COMPENSATION RECOUPMENT POLICY
Beginning with fiscal 2014, if G-III is required to prepare an accounting restatement, the Compensation Committee may, in its sole discretion, recoup from the affected officers all or part of any annual performance-based bonus or long-term incentive awards that were predicated upon the achievement of financial results that were subsequently restated.
ANTI-HEDGING POLICY
Our directors, executives and other employees are prohibited from engaging in transactions designed to limit or eliminate economic risks from owning G-III’s stock, such as transactions involving any form of margin arrangement, short sales and/or dealing in puts and calls of G-III’s stock.
ANTI-PLEDGING POLICY
Our directors, executives and other employees are generally prohibited from pledging shares of our stock as collateral for any loan or margin account. None of our executives has pledged shares of our stock. The Board may, in its sole discretion and in limited instances, grant exceptions to this policy after considering the number of shares to be pledged as a percentage of the executive’s total shares held and G-III’s total shares outstanding.
How We Make Compensation Decisions
THE ROLE OF THE COMPENSATION COMMITTEE
Our Compensation Committee is responsible for determining the compensation of our executive officers and for evaluating and establishing the overall structure and design of our compensation program.
The Compensation Committee consults with our Chairman and CEO in connection with making its determinations regarding compensation of our other NEOs and relies to a considerable extent on his evaluation of each executive’s performance and his recommendations regarding the amount and mix of the total compensation paid to these executives.
THE ROLE OF MANAGEMENT
Our Chairman and CEO annually makes recommendations on the amount and mix of the total compensation of other NEOs to the Compensation Committee. Our Chairman and CEO is not involved in the determination of his own compensation.
THE ROLE OF INDEPENDENT COMPENSATION CONSULTANTS
The Compensation Committee retained Compensation Advisory Partners (“CAP”) to serve as its independent advisor on executive compensation and corporate governance matters beginning in fiscal 2019. CAP is a nationally recognized executive compensation consultancy and serves as the Committee’s independent advisor on executive compensation and corporate governance matters. In fulfilling these responsibilities, CAP assisted the Committee with its redesign of G-III’s executive compensation program by providing insight and analysis of compensation programs and incentives used by G-III’s peers and other public companies, trends in executive compensation and corporate governance, and the evolving policies and procedures of proxy advisory services firms. CAP also assisted with respect to G-III’s stockholder outreach initiative.
In fiscal 2023, the Compensation Committee also retained Pay Governance to review and provide alternatives to the annual incentive compensation formulas codified in the employment agreements with our Chairman and CEO and our Vice Chairman and President.
The Compensation Committee retains sole responsibility for engaging any compensation advisor and meets with its advisor, as needed, in the Committee’s sole discretion. Each of CAP and Pay Governance has not performed any services other than executive and director compensation and related corporate governance consulting for G-III and performed its services only on behalf of and at the direction of the Committee. Prior to engaging CAP and Pay Governance, the Committee reviewed the factors related to consultant independence and determined that no conflict of interest exists.
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than such portion of base salary, pro rata annual cash incentive and other compensation accrued through the date of the termination.
In the event we terminate Mr. Goldfarb’s employment without cause, or Mr. Goldfarb terminates his employment for cause, Mr. Goldfarb will receive the salary, annual cash incentive and other benefits he otherwise would have received if his employment had continued for the then remaining term of the employment agreement. The salary portion would be paid in a lump sum, and the annual cash incentive and benefits portions will be due as and when they would otherwise have been paid or provided. If such termination is effectuated after the occurrence of a “Change in Control” (as defined in the employment agreement), then, in lieu of the payments described in the preceding sentence, Mr. Goldfarb will be entitled to receive a formula-based lump sum cash payment determined with reference to Section 280G of the Code, plus three years of employee benefit continuation. In general, the formula-based cash severance payment would be an amount equal to the excess of (a) 2.99 times average of Mr. Goldfarb’s annual compensation for the preceding five years, over (b) the value of any other payments and benefits (including, for example, the Section 280G value of accelerated vesting of outstanding equity awards) which are deemed to be contingent upon the occurrence of the Change in Control under Section 280G of the Code. If Mr. Goldfarb’s employment is terminated due to his death, Mr. Goldfarb’s estate will be entitled to receive the base salary for a period of six months from the last day of the month of his death and will be eligible to receive annual cash incentive compensation pro-rated according to the number of days of employment in the fiscal year of his death.
SEVERANCE AND CHANGE IN CONTROL ARRANGEMENTS WITH SAMMY AARON
If we terminate Mr. Aaron’s employment for justifiable cause (as defined in his employment agreement) or Mr. Aaron voluntarily resigns without good reason (as defined in his employment agreement), Mr. Aaron will not be entitled to any severance or other compensation of any kind following the effective date of such termination, other than such portion of base salary and other compensation accrued through the date of the termination.
In the event Mr. Aaron’s employment is terminated without justifiable cause or by Mr. Aaron for good reason, Mr. Aaron will continue to receive his annual salary, annual cash incentive and other benefits for the balance of the term of the employment agreement. However, if a “Change in Control” (as defined in the employment agreement) occurs and Mr. Aaron is terminated without justifiable cause, or if he resigns for good reason within three months of the event giving rise to such good reason, he will be entitled to cash severance of an amount equal to 2.0 times the sum of (a) his highest annual salary in effect during the one-year period before his termination of employment and (b) the average annual cash incentive earned during our two fiscal years before the fiscal year of his termination of employment, which amount will be payable over 24 months. In addition, Mr. Aaron will be entitled to receive continuing health benefits for up to 24 months. Our obligation to pay such severance and benefits will be conditioned upon Mr. Aaron’s executing a general release and his continuing to comply with the non-competition and other restrictive covenants contained in his agreement. The cash severance amount will be reduced if and to the extent necessary to ensure that such amount, when added to other payments and the value of other benefits Mr. Aaron may receive (including, for example, the Section 280G value of accelerated vesting of outstanding equity awards), is not greater than the Section 280G threshold amount (generally, three times average annual compensation for the five years preceding the year in which a Change in Control occurs). If Mr. Aaron’s employment agreement is terminated due to his disability or death, Mr. Aaron will be entitled to receive such portion of his annual salary, accrued leave and reimbursement of expenses as has been accrued through the date on which his employment is terminated or through the date of his death.
Mr. Aaron has agreed that, for one year following the termination of his employment (or for a shorter period under certain circumstances following a Change in Control) he will not, directly or indirectly, (a) compete with any business of G-III, (b) interfere with G-III’s business relationships, or (c) solicit or hire G-III employees. In addition, Mr. Aaron has agreed that at any time following the termination of his employment, he will not disclose confidential information (as defined in the employment agreement) of G-III acquired during his employment.
SEVERANCE AND CHANGE IN CONTROL ARRANGEMENTS WITH NEAL NACKMAN
In the event that Neal Nackman is terminated without “Cause” (as defined in his severance letter agreement), Mr. Nackman will be entitled to severance payments equal to one year of benefits previously provided, salary and bonus (based on the average of his bonus in the two years prior to termination).
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STOCKHOLDER PROPOSALS for the 2024 annual meeting
All stockholder proposals that are intended to be presented at our Annual Meeting of Stockholders to be held in 2024 must be received by us no later than January 6, 2024 for inclusion in the Board of Directors’ Proxy Statement and form of proxy relating to that meeting. Any stockholder proposal must also be proper in form and substance, as determined in accordance with the Exchange Act and the rules and regulations promulgated thereunder. All such proposals should be addressed to G-III Apparel Group, Ltd., 512 Seventh Avenue, New York, NY 10018, Attention: Secretary.
Any stockholder who intends to nominate a person for election to the Board of Directors or propose any other matter to be acted upon at the Annual Meeting of Stockholders to be held in 2024 (but not include such proposal in the Board of Directors’ Proxy Statement and form of proxy) must inform us no later than March 10, 2024. If notice is not provided by that date, the persons named in the proxy for the 2024 Annual Meeting will be allowed to exercise their discretionary authority to vote upon any such proposal without the matter having been discussed in the Proxy Statement for the 2024 Annual Meeting. All notices should be addressed to G-III Apparel Group, Ltd., 512 Seventh Avenue, New York, NY 10018, Attention: Secretary.
For the nomination of any person to the Board of Directors, the notice must set forth (a) the name, age, business address and residence address of the nominee, (b) the principal occupation or employment of the nominee, (c) the number of shares of capital stock of G-III which are owned of record and beneficially by the nominee (if any), (d) such other information concerning the nominee as would be required to be disclosed in a Proxy Statement soliciting proxies for the election of the nominee as a director in an election contest (even if an election contest is not involved) or that is otherwise required to be disclosed, under Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder, (e) the consent of the nominee to being named in the Proxy Statement as a nominee and to serving as a director if elected, and (f) as to the proposing stockholder: (i) the name and address of the proposing stockholder as they appear on G-III’s books and of the beneficial owner, if any, on whose behalf the nomination is being made, (ii) the class and number of G-III shares which are owned by the proposing stockholder (beneficially and of record) and owned by the beneficial owner, if any, on whose behalf the nomination is being made, as of the date of the proposing stockholder’s notice, (iii) a description of any agreement, arrangement or understanding with respect to such nomination between or among the proposing stockholder and any of its affiliates or associates, and any others (including their names) acting in concert with any of the foregoing, (iv) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions, and borrowed or loaned shares) that has been entered into as of the date of the proposing stockholder’s notice by, or on behalf of, the proposing stockholder or any of its affiliates or associates, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the proposing stockholder or any of its affiliates or associates with respect to shares of stock of G-III, (v) a representation that the proposing stockholder is a holder of record of shares of G-III entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, and (vi) a representation whether the proposing stockholder intends to deliver a Proxy Statement and/or form of proxy to holders of G-III’s outstanding capital stock and/or otherwise to solicit proxies from stockholders in support of the nomination. The proposing stockholder should also comply with the additional requirements of a proper notice under Rule 14a-19, which includes the statement that a dissident using the universal proxy rule intends to solicit 67% of the outstanding voting shares entitled to vote on the election of directors. G-III may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of G-III or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.
For all business other than director nominations, the notice must set forth as to each matter the proposing stockholder proposes to bring before the annual meeting: (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) any other information relating to such stockholder and beneficial owner, if any, on whose behalf the proposal is being made, required to be disclosed in a Proxy Statement or other filings required to be made in connection with solicitations of proxies for the proposal and pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder and (c) the information as to the proposing stockholder required by section (f) in the preceding paragraph.
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householding of proxy materials
The SEC permits a single set of notices, annual reports, and proxy statements to be sent to any household at which two or more stockholders reside if they appear to be members of the same family. Each stockholder continues to receive a separate proxy card. This procedure, referred to as householding, reduces the volume of duplicate information stockholders receive and reduces mailing and printing expenses. A number of brokerage firms have instituted householding.
As a result, if you hold your shares through a broker and you reside at an address at which two or more stockholders reside, you will likely be receiving only one notice, annual report, and proxy statement unless any stockholder at that address has given the broker contrary instructions. However, if any beneficial stockholder residing at an address of which two or more stockholders reside wishes to receive a separate notice, annual report, or proxy statement in the future, or if any beneficial stockholder that elected to continue to receive separate notice, annual reports, or proxy statements wishes to receive a single notice, annual report, or proxy statement in the future, that stockholder should contact his or her broker or send a request to our Corporate Secretary at our principal executive offices, G-III Apparel Group, Ltd., 512 Seventh Avenue, New York, NY 10018, Attention: Secretary. We will deliver, promptly upon written or oral request to our Secretary, a separate copy of the proxy materials to a beneficial stockholder at a shared address to which a single copy of the documents was delivered.
Where You Can Find More Information
This Proxy Statement is available in the “Investors” section of our website at http://www.giii.com. On our website, we will make available our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and other information and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC. Such information will also be available at www.sec.gov. This reference to our website is for the convenience of investors as required by the SEC and shall not be deemed to incorporate any information on, or accessible through, our website into this Proxy Statement.
You should rely only on the information contained in this Proxy Statement. We have not authorized anyone to provide you with information different from that contained in this Proxy Statement. The information contained in this Proxy Statement is accurate only as of the date of this Proxy Statement, regardless of the time of delivery of this Proxy Statement.
We will provide without charge to any person from whom a proxy is solicited by the Board of Directors, upon the written request of such person, a copy of our most recent Annual Report on Form 10-K, including the financial statements and schedules thereto (as well as exhibits thereto, if specifically requested), required to be filed with the SEC, our Quarterly Reports on Form 10-Q, and other information and any amendments to those reports. Written requests for such information should be directed to:
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| G-III APPAREL GROUP, LTD. |
| ATTENTION: INVESTOR RELATIONS |
| 512 SEVENTH AVENUE |
| NEW YORK, NEW YORK 10018 |
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APPENDIX a
G-III Apparel Group, Ltd. 2023 Long-Term Incentive Plan
GENERAL
1.1 Purpose. The purpose of the Plan is to establish a vehicle through which the Company can provide equity-based and other incentive compensation opportunities in order to facilitate its ability to recruit, motivate, reward and retain qualified individuals who contribute or are expected to contribute to the success and growth of the Company.
1.2 Eligibility. Awards may be granted under the Plan to any employee or non-employee director of, and any consultant, independent contractor or other person who provides personal services to, the Company or any of its Subsidiaries, provided that Incentive Stock Options may be granted only to employees of the Company or its Subsidiaries and only if the Plan is approved by the Company’s stockholders within 12 months after the Plan is approved by the Board.
1.3 Types of Awards. Awards under the Plan may include, without limitation, Options, Stock Appreciation Rights, shares of Restricted Stock, Restricted Stock Units, other Share-based Awards and performance-based Cash Incentive Awards, all as described in Articles 5 through 7 hereof.
ARTICLE 2
DEFINITIONS
2.1 “Award” means an award made to an eligible director, employee or consultant under the Plan.
2.2 “Award Agreement” means an agreement, in written or electronic form, between the Company and a Participant setting forth the terms and conditions of an Award.
2.3 “Board” means the Board of Directors of the Company.
2.4 “Cause” has the meaning set forth in Section 9.3(a).
2.5 “Change in Control” has the meaning set forth in Section 9.3(b).
2.6 “Code” means the Internal Revenue Code of 1986, as amended.
2.7 “Committee” means the Compensation Committee of the Board.
2.8 “Company” means G-III APPAREL GROUP, LTD., a Delaware corporation, and any successor thereto.
2.9 “Exchange Act” means the Securities Exchange Act of 1934, as amended.
2.10 “Exercise Price” means, with respect to an Option, the price at which a holder may purchase the Shares covered by the Option and, with respect to a SAR, the baseline price of the Shares covered by the SAR.
2.11 “Fair Market Value” means, as of any relevant date, (1) the closing price per Share on such date on the principal securities exchange on which the Shares are traded or, if no Shares are traded on that date, the closing price per Share on the next preceding date on which Shares are traded, or (2) the value determined under such other method or convention as the Board or the Committee, acting in a consistent manner in accordance with the Plan and applicable tax law, may prescribe.
2.12 “Good Reason” has the meaning set forth in Section 9.3(c).
2.13 “Incentive Cash Award” means a performance-based cash Award described in Section 7.2.
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2.14 “Incentive Stock Option” or “ISO” means an Option that qualifies as an “incentive stock option” within the meaning of Section 422 of the Code.
2.15 “NEO” means the Company’s “named executive officers” as determined under Item 402(a) of Regulation S-K issued by the Securities and Exchange Commission.
2.16 “Option” means an option to purchase Shares granted pursuant to Section 5.1.
2.17 “Participant” means any person who has been selected to receive an Award under the Plan or who holds an outstanding Award under the Plan.
2.18 “Performance Factors” means any of the factors listed in Section 8.2 that may be used in establishing performance goals for Awards.
2.19 “Plan” means the incentive plan set forth herein, as it now exists or is hereafter amended.
2.20 “Restricted Stock” means stock issued in the name of a Participant pursuant to Section 6.1, subject to applicable transfer restrictions and vesting and other conditions.
2.21 “Restricted Stock Unit” or “RSU” means a contingent right to receive Shares in the future that is granted pursuant to Section 6.1.
2.22 “Section 409A” means Section 409A of the Code.
2.23 “Shares” means shares of the Company’s common stock.
2.24 “Stock Appreciation Right” or “SAR” means a right to receive appreciation in the value of Shares that is granted pursuant to Section 5.2.
2.25 “Subsidiary” means (a) a corporation or other entity in an unbroken chain of corporations or other entities at least 50% of the total value or voting power of the equity securities of which is owned by the Company or by any other corporation or other entity in the chain, and (b) any other corporation or entity in which the Company has a 20% controlling interest, directly or indirectly, as may be designated by the Committee pursuant to the criteria set forth in Section 1.409A-1(b)(5)(iii)(E) of the Treasury regulations.
2.26 “Ten Percent Stockholder” means a person who owns or is deemed to own (under Section 424(d) of the Code) more than ten percent of the total combined voting power of all classes of stock of the Company or any Subsidiary.
ARTICLE 3
ADMINISTRATION
3.1 General. Except as specified herein or as otherwise determined by the Board, the Plan shall be administered by the Committee, the composition of which is governed by the Committee’s charter.
3.2 Authority of the Committee. Subject to the provisions of the Plan, the Committee, acting in its discretion, shall have the power and authority to select the persons to whom Awards will be made, prescribe the terms and conditions of each Award and make amendments thereto, construe, interpret and apply the provisions of the Plan and of any Award Agreement, and make any and all determinations and take any and all other actions as it deems necessary or desirable in order to carry out the terms of the Plan or of any Award; provided that the Committee may not accelerate the vesting of an outstanding award by reason of the termination of a Participant’s employment unless (a) such termination is in connection with a Change in Control or on account of the Participant’s death, disability or retirement, or (b) such termination occurs for any other reason, provided that the aggregate number of shares the Company may issue by reason of such acceleration of vesting under this clause (b) may not exceed 5% of the total number of Shares that may be issued under the Plan.
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3.3 Delegation of Authority. To the fullest extent authorized or permitted by applicable law, including, without limitation, Section 157(c) of the Delaware General Corporation Law, the Committee may (i) delegate to officers of the Company or any affiliate, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform such functions, including the authority to grant Awards, as the Committee may determine, and (ii) delegate to any person or subcommittee (who may, but need not be members of the Committee) such Plan-related administrative authority and responsibilities as it deems appropriate. The Committee may not delegate its authority with respect to non-ministerial actions relating to individuals who are subject to the reporting requirements of Section 16(a) of the Exchange Act.
3.4 Indemnification. The Company shall indemnify and hold harmless each member of the Committee and the Board and any employee or director of the Company or any Subsidiary to whom any duty or power relating to the administration of the Plan or any Award is delegated from and against any loss, cost, liability (including any sum paid in settlement of a claim with the approval of the Board), damage and expense (including reasonable legal and other expenses incident thereto) arising out of or incurred in connection with the Plan, unless and except to the extent attributable to such person’s fraud or willful misconduct.
ARTICLE 4
SHARES SUBJECT TO THE PLAN; INDIVIDUAL AWARD LIMITS
4.1 Shares Issuable under the Plan. Subject to Section 4.2, up to 2,800,000 Shares shall be available for grant and issuance pursuant to Awards made under the Plan, any or all of which may (but need not) be issued pursuant to ISOs. For purposes of these limitations, (a) the total number of Shares covered by stock-settled SARs (and not just the number of Shares issued in settlement of such SARs) shall be deemed to have been issued under the Plan, and (b) Shares covered and/or issued pursuant to an Award will again be available for grant and issuance pursuant to subsequent Awards to the extent such Shares are covered by or relate to (1) the unexercised portion of an Option or SAR that is forfeited or otherwise terminated or canceled for any reason other than exercise, (2) Restricted Stock Awards, RSU Awards or any other forms of Award that are forfeited, (3) subject to an Award that is settled in cash or that otherwise terminates without such Shares being issued, or (4) awards granted under a shareholder-approved plan that are assumed, converted or substituted as a result of the acquisition of another company by the Company or a combination of the Company with another entity. Shares that are used or withheld to pay the exercise price of an Award or to satisfy the tax withholding obligations associated with the vesting or settlement of an Award will not be available for future grant and issuance under the Plan. Shares issued under the Plan may be either authorized and unissued Shares, or authorized and issued Shares held in the Company’s treasury, or any combination of the foregoing. For the avoidance of doubt, Shares purchased by the Company in the open market with proceeds from a cash exercise of an Option may not be added to the pool of Shares otherwise available under the Plan.
4.2 Adjustments for Capital Changes. In the event of a split-up, spin-off, stock dividend, extraordinary cash dividend, recapitalization, consolidation of Shares, reverse stock split or other similar capital change, the number and class of Shares that may be issued under the Plan pursuant to Section 4.1, the number, class and/or Exercise Price (if any) of Shares subject to outstanding Awards and performance goals expressed in or with respect to Shares shall be equitably adjusted by and at the discretion of the Board or the Committee in order to prevent undue dilution or enlargement of the benefits available under the Plan or an outstanding Award, as the case may be, provided that the number of Shares subject to any outstanding Award shall always be a whole number. In furtherance of the foregoing, in the event of an “equity restructuring,” each outstanding Award that constitutes a “share-based payment arrangement” (as such terms are defined in FASB Accounting Standards Codification Topic 718) shall be adjusted pursuant to this Section.
4.3 Counting of Shares of An Acquired Company. In the event that a company acquired by the Company or any of its subsidiaries, or with which the Company or any of its subsidiaries combines, has shares available under a pre-existing plan approved by such entity’s shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common shares of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan (and Shares subject
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| 2023 SPECIAL MEETING PROXY STATEMENT / 55 |
to such Awards shall not be added to the Shares available for Awards under the Plan), provided that Awards using such available Shares shall (i) not be made after the date that awards or grants could no longer have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its subsidiaries immediately prior to such acquisition or combination, and (ii) be made in respect of Incentive Stock Options only to the extent allowable under Section 422 of the Code.
4.4 Effect on the Prior Plan. Upon the Plan becoming effective, as described in Section 10.1, no further awards will be issued under the Company’s Amended 2015 Long-Term Incentive Plan, and no remaining shares available under such plan will become available under the Plan. Further, any awards granted under such plan after August 18, 2023 will reduce, on a one-for-one basis, the number of Shares available under the Plan.
ARTICLE 5
STOCK OPTIONS; STOCK APPRECIATION RIGHTS
5.1 Grant of Company Stock Options. The Committee may grant Options to Participants upon such vesting, forfeiture and other terms and conditions as the Committee, acting in its discretion in accordance with the Plan, may determine, either at the time an Option is granted or, if the holder’s rights are not adversely affected, at any subsequent time. Each Option shall have a vesting period of at least one year from the date of grant, except when Options are granted in connection with a Participant voluntarily giving up a contractual right to a cash bonus. Each Option will be deemed not to be an ISO (a non-ISO) unless, at the time the Option is granted, the Committee specifically designates such Option as an ISO. If an Option is designated as an ISO and if part or all of the Option does not qualify as an ISO for any reason, then the Option or the portion of the Option that does not so qualify will nevertheless remain outstanding and will be characterized as a non-ISO.
5.2 Grant of Stock Appreciation Rights. The Committee may grant Stock Appreciation Rights, or SARs, to Participants, either alone or in connection with the grant of an Option, upon such vesting, forfeiture and other terms and conditions as the Committee, acting in its discretion in accordance with the Plan, may determine, either at the time the SARs are granted or, if the holder’s rights are not adversely affected, at any subsequent time. SARs shall have a minimum vesting period of one year from the date of grant, except when SARs are granted in connection with a Participant voluntarily giving up a contractual right to a cash bonus. Upon exercise, the holder of an SAR shall be entitled to receive cash and/or a number of whole Shares (as determined by the Committee) having a value equal to the product of X and Y, where--
X = the number of whole Shares as to which the SAR is being exercised, and
Y = the excess of (i) the Fair Market Value per Share on the date of exercise over (ii) the Exercise Price per Share covered by the SAR.
5.3 Exercise Price. The Committee shall determine the Exercise Price per Share under each Option and each SAR, provided that (a) the Exercise Price per Share shall be at least equal to the Fair Market Value per Share on the date the Option or SAR is granted; and (b) in the case of an ISO granted to a Ten Percent Stockholder, the Exercise Price per Share shall be at least equal to 110% of the Fair Market Value per Share on the date the ISO is granted.
5.4 Repricing and Reloading Prohibited. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, distribution (whether in the form of cash, Shares, other securities or other property), stock split, extraordinary cash dividend, recapitalization, change in control, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Shares or other securities, or similar transaction(s)), the Company may not, without obtaining stockholder approval: (a) reduce the Exercise Price under outstanding Options or SARs; (b) cancel outstanding Options or SARs in exchange for Options or SARs with a lower Exercise Price; or (c) cancel outstanding Options or SARs in exchange for cash or other securities at a time when the per Share Exercise Price under such Options or SARs is higher than the Fair Market Value. The Committee may not grant an Option that includes a “reload” feature or make any other Awards that have the effect of providing a “reload” feature with respect to Shares used to satisfy the Option exercise price or applicable withholding tax.
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ARTICLE 8
PERFORMANCE-BASED AWARDS
8.1 Performance-Based Awards--General. The Committee may provide that the grant, exercise, vesting, amount and/or settlement of an Award shall be contingent upon achievement of one or more objective performance goals, which shall be prescribed in writing by the Committee. Such performance goals shall be based on any one or more of the Performance Factors listed in Section 8.2 and may be expressed in absolute terms, relative to performance in prior periods and/or relative to performance of other companies or an index of other companies or on such other basis as the Committee may determine. All determinations as to the establishment of performance goals, the amount of cash and/or the number of Shares that may be earned under such Award, the target level (and, if applicable, minimum and maximum levels) of performance goal achievement required as a condition of earning the Award, and the earned value of any such performance-based Award shall be made by the Committee and shall be recorded in writing.
8.2 Performance Factors. Any one or more of the following Performance Factors may be used by the Committee in establishing performance goals for Awards, in each case taking into account such adjustments and other objective factors as the Committee may specify at the time the goal is established: (a) revenues on a corporate or product by product basis, gross profit or gross profit growth; (b) earnings from operations, earnings before or after taxes, earnings before or after interest, depreciation, amortization, incentives, service fees and/or extraordinary or special items; (c) net income or net income per share (basic or diluted); (d) return measures, including return on assets, return on investment, return on capital, total capital or tangible capital, return on sales or return on equity; (e) cash flow, free cash flow, cash flow return on investment, or net cash provided by operations; (f) economic value created or added; (g) operating margin or profit margin; (h) expense or cost targets; (i) objective measures of customer satisfaction; (j) working capital targets; (k) inventory control; (l) debt targets; (m) implementation, completion or attainment of measurable objectives with respect to store openings or closings, acquisitions and divestitures, and recruiting and maintaining personnel; and/or (n) share price (including, without limitation, growth measures, market capitalization and/or total stockholder return).
8.3 Performance Goals. In establishing performance goals with respect to an Award, the applicable Performance Factors may be determined by reference to the Company’s performance and/or the performance of any one or more Subsidiaries, divisions, business segments or business units of the Company and its Subsidiaries, and may be based upon comparisons of any of the indicators of performance relative to other companies (or subsidiaries, divisions, business segments or business units of other companies) or relevant indices. The Committee may prescribe that performance goals under any such Award will be adjusted as necessary or appropriate in order to account for changes in law or accounting rules, principles or standards or to reflect the impact of extraordinary or unusual items, events or circumstances which, if not taken into account, would result in windfalls or hardships that are not consistent with the intent and purposes of the Award, including without limitation (a) restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges, (b) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management, (c) acquisitions and divestitures, or (d) changes in generally accepted accounting principles.
8.4 Certification. No amount shall be paid and no Shares shall be distributed or released pursuant to a performance-based Award unless and until the Committee certifies in writing the extent of achievement of the applicable performance goal(s) and the corresponding amount that is earned by the Participant under such Award.
ARTICLE 9
CHANGE IN CONTROL
9.1 Assumption or Substitution of Outstanding Awards. If a “Change in Control” (as defined below) is consummated, the parties to the Change in Control may agree that outstanding Awards shall be assumed by, or converted into a substitute award for or with respect to shares of common stock of, the successor or acquiring company (or a parent company thereof) on an economically equivalent basis. If the Change in Control does not involve an agreement with a third party, and if the Shares covered by an outstanding Award are still traded on a national securities exchange, then the Committee may
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(d) Notwithstanding the foregoing, each Participant shall be solely responsible, and the Company shall have no liability to the Participant or otherwise, for or with respect to any taxes, acceleration of taxes, interest or penalties arising under Section 409A.
ARTICLE 12
MISCELLANEOUS
12.1 Non-Transferability. Except as otherwise specifically permitted by the Plan or the applicable Award Agreement, no Award shall be assignable or transferable except upon the Participant’s death to his or her “beneficiary” (as defined below), and, during a Participant’s lifetime, an Option or SAR may be exercised only by the Participant or the Participant’s guardian or legal representative. Notwithstanding the foregoing, subject to the consent of the Committee (which it may grant, condition or deny in its sole discretion for any or no reason), a Participant may make an inter vivos transfer of an Option (other than an ISO), SAR or RSU to any “family member” (within the meaning of Item A(1)(a)(5) of the General Instructions to SEC Form S-8 or a successor), including, without limitation, to one or more trusts, partnerships, limited liability companies and other entities which qualify as family members, provided that such transfer is not a transfer for value or is a transfer for value that the Committee determines is for estate planning purposes, and provided further that such transfer is permitted by applicable law and does not give rise to tax under Section 409A. For the purposes hereof, a Participant’s “beneficiary” is any person or entity (including, without limitation, a trust or estate) designated in writing by a Participant to succeed to the Participant’s Award(s) upon the Participant’s death, subject to the provisions hereof and of the applicable Award Agreement(s). A Participant may designate a beneficiary by delivering a written beneficiary designation to the Committee (or its designee) in such form and in such manner as the Committee (or its designee) may prescribe. Each beneficiary designation duly filed with the Committee (or its designee) will have the effect of superseding and revoking any prior beneficiary designation. If a Participant does not designate a beneficiary, or if no designated beneficiary survives the Participant, then the Participant’s estate will be deemed to be his or her beneficiary. The term “Participant,” as used herein, shall be deemed to include the Participant’s beneficiary if and to the extent the context requires.
12.2 Successors. All obligations of the Company with respect to Awards granted under the Plan shall be binding on any successor to the Company of all or substantially all of the business and/or assets of the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, and the term “Company” as used herein shall be construed accordingly.
12.3 Legal Construction. If any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
12.4 Compliance with Law. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
12.5 Transfer Orders; Placement of Legends. All certificates for Shares delivered under the Plan shall be subject to such stock-transfer orders and other restrictions as the Company may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange or market upon which the Shares may then be listed, and any applicable federal or state securities law. The Company may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions.
12.6 Nonexclusivity of the Plan. No provision of the Plan, and neither its adoption by the Board or submission to the stockholders for approval, shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements, apart from the Plan, as it may deem desirable.
12.7 Sub-Plans. The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying securities, tax or other laws of any foreign jurisdictions that may apply to Participants who receive Awards. Any such sub-plan shall contain such limitations and other terms and conditions as the Committee determines are necessary or desirable for such purposes and shall be in such form (including, without limitation, as an appendix to the Plan) as the Committee
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| 2023 SPECIAL MEETING PROXY STATEMENT / 65 |
Pay vs Performance Disclosure - USD ($)
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12 Months Ended |
Jan. 31, 2023 |
Jan. 31, 2022 |
Jan. 31, 2021 |
Pay vs Performance Disclosure |
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|
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Pay vs Performance Disclosure, Table |
| | | | | | | | | | | | | | | | | (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | | | | | | Average | | | | Value of Initial Fixed $100 | | | | | | | Summary | | | | Summary | | Average | | Investment Based On: | | | | | | | Compensation | | Compensation | | Compensation | | Compensation | | | | Peer Group | | | | | | | Table Total | | Actually Paid | | Table Total for | | Actually Paid to | | Total Share- | | Total Share- | | | | Pre-tax | Year | | for PEO | | to PEO (1) | | Non-PEO NEOs | | Non-PEO NEOs (1) | | Holder Return | | Holder Return | | Net Income | | Net Income | 2023 | | 5,790,860 | | (3,406,531) | | 3,371,945 | | 169,702 | | $ 62.18 | | $ 115.37 | | (134,382) | | (138,170) | 2022 | | 24,942,778 | | 26,290,697 | | 5,854,421 | | 6,494,398 | | $ 99.85 | | $ 136.66 | | 200,101 | | 270,976 | 2021 | | 9,430,654 | | 11,627,793 | | 3,584,783 | | 4,447,687 | | $ 99.38 | | $ 125.32 | | 23,523 | | 35,726 |
| (1) | The dollar amounts shown in these columns reflect compensation actually paid (“CAP”) to Morris Goldfarb and our non-PEO NEOs, respectively, calculated in accordance with SEC rules. As required, the dollar amounts include (among other items) unpaid amounts of equity compensation that may be realized in future periods, and as such, the dollar amounts shown do not fully represent the actual final amount of compensation earned or actually paid to any individual during the applicable years. The adjustments made to each officer’s total compensation for each year to determine CAP are shown in the tables below. |
RECONCILIATION OF SUMMARY COMPENSATION TABLE TOTAL TO CAP TOTAL As shown in the tables below, the CAP totals represent the Summary Compensation Table totals for the applicable year, but adjusted as required by SEC rules to include the fair value of current and prior year equity awards that are outstanding, vested, or forfeited during the applicable year, instead of the grant date value of awards granted during the applicable year. | | | | | | | | | | | Reported Summary | | | | | | | | | Compensation Table | | Reported Value | | Equity Award | | Compensation Actually | Year | | Total for PEO | | of Equity Awards (1) | | Adjustments (2) | | Paid to PEO | 2023 | | 5,790,860 | | (4,499,972) | | (4,697,419) | | (3,406,531) | 2022 | | 24,942,778 | | (16,167,626) | | 17,515,545 | | 26,290,697 | 2021 | | 9,430,654 | | (3,682,500) | | 5,879,639 | | 11,627,793 |
| (1) | Represents the total of the amounts reported in the Stock Awards column of the Summary Compensation Table for the applicable year. |
| (2) | The fair value of the of the equity component of the CAP calculation was determined in accordance with SEC methodology for this disclosure. Unlike the Summary Compensation Table, which includes a calculation of the grant date value of equity awards granted during the applicable year, the CAP table includes a calculation of equity fair value as follows: |
| a. | for awards granted during the applicable year (and which are still outstanding), the year-end value; plus |
| b. | for awards granted during prior years that were still outstanding as of the applicable year-end, the change in value as of the applicable year-end compared against the prior year-end; plus |
| c. | for awards granted in prior that vested during the applicable year, the change in value as of the vesting date compared against the prior year-end; plus |
| d. | for any awards granted in the applicable year that vested during the applicable year, the value as of the vesting date; plus |
| e. | for awards granted in prior years that were forfeited during the applicable year, the value as of the prior year-end. |
| | | | | | | | | | | | | | | (a) | | (b) | | (c) | | (d) | | (e) | | | | | | | | | | | | | | | | PEO | | | | | | | | Year over Year | | Fair Value at | | | | | | | | | | | Change in Fair | | the End of the | | | | | | | Year over Year | | Fair Value as | | Value of | | Prior Year of | | | | | Year End Fair | | Change in Fair | | of Vesting Date | | Equity Awards | | Equity Awards | | | | | Value of | | Value of | | of Equity | | Granted in | | that Failed to | | Total | | | Outstanding | | Outstanding and | | Awards Granted | | Prior Years that | | Meet Vesting | | Equity | | | and Unvested | | Unvested Equity | | and Vested in | | Vested in | | Conditions | | Award | Year | | Equity Awards | | Awards | | the Year | | the Year | | in the Year | | Adjustments | 2023 | | 908,731 | | (5,474,346) | | — | | (131,804) | | — | | (4,697,419) | 2022 | | 4,322,272 | | 769,298 | | 12,167,656 | | 256,319 | | — | | 17,515,545 | 2021 | | 10,140,000 | | (3,026,909) | | — | | (1,233,452) | | — | | 5,879,639 |
The tables below reflect the average total compensation of our non-PEO NEOs, as calculated in the Summary Compensation Table for each of the years shown. Our non-PEO NEOs are the following individuals: for fiscal 2023, Sammy Aaron, Neal Nackman and Jeffrey Goldfarb; and for fiscal 2022 and 2021, Sammy Aaron, Neal Nackman, Wayne Miller, who ceased being a NEO effective July 1, 2021, and Jeffrey Goldfarb. | | | | | | | | | | | Average Reported | | | | | | | | | Summary Compensation | | | | | | Average Compensation | | | Total Table for | | Average Reported Value | | Average Equity | | Actually Paid | Year | | Non-PEO NEOs | | of Equity Awards (3) | | Award Adjustments (4) | | to Non-PEO NEOs | 2023 | | 3,371,945 | | (1,666,643) | | (1,535,600) | | 169,702 | 2022 | | 5,854,421 | | (2,420,636) | | 3,060,612 | | 6,494,398 | 2021 | | 3,584,783 | | (1,464,408) | | 2,327,311 | | 4,447,687 |
| (3) | Represents the total of the amounts reported in the Stock Awards column of the Summary Compensation Table for the applicable year. |
| (4) | The fair value of the of the equity component of the CAP calculation was determined in accordance with SEC methodology for this disclosure. Unlike the Summary Compensation Table, which includes a calculation of the grant date value of equity awards granted during the applicable year, the CAP table includes a calculation of equity fair value as follows: |
| a. | for awards granted during the applicable year (and which are still outstanding), the year-end value; plus |
| b. | for awards granted during prior years that were still outstanding as of the applicable year-end, the change in value as of the applicable year-end compared against the prior year-end; plus |
| c. | for awards granted in prior that vested during the applicable year, the change in value as of the vesting date compared against the prior year-end; plus |
| d. | for any awards granted in the applicable year that vested during the applicable year, the value as of the vesting date; plus |
| e. | for awards granted in prior years that were forfeited during the applicable year, the value as of the prior year-end. |
| | | | | | | | | | | | | | | (a) | | (b) | | (c) | | (d) | | (e) | | | | | | | | | | | | | | | | Non-PEO | | | | | | | | | | Average | | | NEO's | | | | | | | | Year over Year | | Fair Value at | | | | | | | | | Average | | Average Change | | the End of the | | | | | | | Year over Year | | Fair Value as | | in Fair Value | | Prior Year of | | | | | | | Average Change | | of Vesting Date | | of Equity | | Equity Awards | | Total | | | Average | | in Fair Value | | of Equity | | Awards Granted | | that Failed to | | Average | | | Year End Fair | | of Outstanding | | Awards Granted | | in Prior Years | | Meet Vesting | | Equity | | | Value of | | and Unvested | | and Vested in | | that Vested in | | Conditions | | Award | Year | | Equity Awards | | Equity Awards | | the Year | | the Year | | in the Year | | Adjustments | 2023 | | 448,751 | | (1,939,445) | | — | | (44,906) | | — | | (1,535,600) | 2022 | | 1,411,940 | | 294,826 | | 1,113,980 | | 239,867 | | — | | 3,060,612 | 2021 | | 4,032,340 | | (1,170,614) | | — | | (534,415) | | — | | 2,327,311 |
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Company Selected Measure Name |
Pre-tax Net Income
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|
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Named Executive Officers, Footnote |
| (1) | The dollar amounts shown in these columns reflect compensation actually paid (“CAP”) to Morris Goldfarb and our non-PEO NEOs, respectively, calculated in accordance with SEC rules. As required, the dollar amounts include (among other items) unpaid amounts of equity compensation that may be realized in future periods, and as such, the dollar amounts shown do not fully represent the actual final amount of compensation earned or actually paid to any individual during the applicable years. The adjustments made to each officer’s total compensation for each year to determine CAP are shown in the tables below. |
The tables below reflect the average total compensation of our non-PEO NEOs, as calculated in the Summary Compensation Table for each of the years shown. Our non-PEO NEOs are the following individuals: for fiscal 2023, Sammy Aaron, Neal Nackman and Jeffrey Goldfarb; and for fiscal 2022 and 2021, Sammy Aaron, Neal Nackman, Wayne Miller, who ceased being a NEO effective July 1, 2021, and Jeffrey Goldfarb.
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PEO Total Compensation Amount |
$ 5,790,860
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$ 24,942,778
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$ 9,430,654
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PEO Actually Paid Compensation Amount |
$ (3,406,531)
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26,290,697
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11,627,793
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Adjustment To PEO Compensation, Footnote |
As shown in the tables below, the CAP totals represent the Summary Compensation Table totals for the applicable year, but adjusted as required by SEC rules to include the fair value of current and prior year equity awards that are outstanding, vested, or forfeited during the applicable year, instead of the grant date value of awards granted during the applicable year. | | | | | | | | | | | Reported Summary | | | | | | | | | Compensation Table | | Reported Value | | Equity Award | | Compensation Actually | Year | | Total for PEO | | of Equity Awards (1) | | Adjustments (2) | | Paid to PEO | 2023 | | 5,790,860 | | (4,499,972) | | (4,697,419) | | (3,406,531) | 2022 | | 24,942,778 | | (16,167,626) | | 17,515,545 | | 26,290,697 | 2021 | | 9,430,654 | | (3,682,500) | | 5,879,639 | | 11,627,793 |
| (1) | Represents the total of the amounts reported in the Stock Awards column of the Summary Compensation Table for the applicable year. |
| (2) | The fair value of the of the equity component of the CAP calculation was determined in accordance with SEC methodology for this disclosure. Unlike the Summary Compensation Table, which includes a calculation of the grant date value of equity awards granted during the applicable year, the CAP table includes a calculation of equity fair value as follows: |
| a. | for awards granted during the applicable year (and which are still outstanding), the year-end value; plus |
| b. | for awards granted during prior years that were still outstanding as of the applicable year-end, the change in value as of the applicable year-end compared against the prior year-end; plus |
| c. | for awards granted in prior that vested during the applicable year, the change in value as of the vesting date compared against the prior year-end; plus |
| d. | for any awards granted in the applicable year that vested during the applicable year, the value as of the vesting date; plus |
| e. | for awards granted in prior years that were forfeited during the applicable year, the value as of the prior year-end. |
| | | | | | | | | | | | | | | (a) | | (b) | | (c) | | (d) | | (e) | | | | | | | | | | | | | | | | PEO | | | | | | | | Year over Year | | Fair Value at | | | | | | | | | | | Change in Fair | | the End of the | | | | | | | Year over Year | | Fair Value as | | Value of | | Prior Year of | | | | | Year End Fair | | Change in Fair | | of Vesting Date | | Equity Awards | | Equity Awards | | | | | Value of | | Value of | | of Equity | | Granted in | | that Failed to | | Total | | | Outstanding | | Outstanding and | | Awards Granted | | Prior Years that | | Meet Vesting | | Equity | | | and Unvested | | Unvested Equity | | and Vested in | | Vested in | | Conditions | | Award | Year | | Equity Awards | | Awards | | the Year | | the Year | | in the Year | | Adjustments | 2023 | | 908,731 | | (5,474,346) | | — | | (131,804) | | — | | (4,697,419) | 2022 | | 4,322,272 | | 769,298 | | 12,167,656 | | 256,319 | | — | | 17,515,545 | 2021 | | 10,140,000 | | (3,026,909) | | — | | (1,233,452) | | — | | 5,879,639 |
|
|
|
Non-PEO NEO Average Total Compensation Amount |
$ 3,371,945
|
5,854,421
|
3,584,783
|
Non-PEO NEO Average Compensation Actually Paid Amount |
$ 169,702
|
6,494,398
|
4,447,687
|
Adjustment to Non-PEO NEO Compensation Footnote |
The tables below reflect the average total compensation of our non-PEO NEOs, as calculated in the Summary Compensation Table for each of the years shown. Our non-PEO NEOs are the following individuals: for fiscal 2023, Sammy Aaron, Neal Nackman and Jeffrey Goldfarb; and for fiscal 2022 and 2021, Sammy Aaron, Neal Nackman, Wayne Miller, who ceased being a NEO effective July 1, 2021, and Jeffrey Goldfarb. | | | | | | | | | | | Average Reported | | | | | | | | | Summary Compensation | | | | | | Average Compensation | | | Total Table for | | Average Reported Value | | Average Equity | | Actually Paid | Year | | Non-PEO NEOs | | of Equity Awards (3) | | Award Adjustments (4) | | to Non-PEO NEOs | 2023 | | 3,371,945 | | (1,666,643) | | (1,535,600) | | 169,702 | 2022 | | 5,854,421 | | (2,420,636) | | 3,060,612 | | 6,494,398 | 2021 | | 3,584,783 | | (1,464,408) | | 2,327,311 | | 4,447,687 |
| (3) | Represents the total of the amounts reported in the Stock Awards column of the Summary Compensation Table for the applicable year. |
| (4) | The fair value of the of the equity component of the CAP calculation was determined in accordance with SEC methodology for this disclosure. Unlike the Summary Compensation Table, which includes a calculation of the grant date value of equity awards granted during the applicable year, the CAP table includes a calculation of equity fair value as follows: |
| a. | for awards granted during the applicable year (and which are still outstanding), the year-end value; plus |
| b. | for awards granted during prior years that were still outstanding as of the applicable year-end, the change in value as of the applicable year-end compared against the prior year-end; plus |
| c. | for awards granted in prior that vested during the applicable year, the change in value as of the vesting date compared against the prior year-end; plus |
| d. | for any awards granted in the applicable year that vested during the applicable year, the value as of the vesting date; plus |
| e. | for awards granted in prior years that were forfeited during the applicable year, the value as of the prior year-end. |
| | | | | | | | | | | | | | | (a) | | (b) | | (c) | | (d) | | (e) | | | | | | | | | | | | | | | | Non-PEO | | | | | | | | | | Average | | | NEO's | | | | | | | | Year over Year | | Fair Value at | | | | | | | | | Average | | Average Change | | the End of the | | | | | | | Year over Year | | Fair Value as | | in Fair Value | | Prior Year of | | | | | | | Average Change | | of Vesting Date | | of Equity | | Equity Awards | | Total | | | Average | | in Fair Value | | of Equity | | Awards Granted | | that Failed to | | Average | | | Year End Fair | | of Outstanding | | Awards Granted | | in Prior Years | | Meet Vesting | | Equity | | | Value of | | and Unvested | | and Vested in | | that Vested in | | Conditions | | Award | Year | | Equity Awards | | Equity Awards | | the Year | | the Year | | in the Year | | Adjustments | 2023 | | 448,751 | | (1,939,445) | | — | | (44,906) | | — | | (1,535,600) | 2022 | | 1,411,940 | | 294,826 | | 1,113,980 | | 239,867 | | — | | 3,060,612 | 2021 | | 4,032,340 | | (1,170,614) | | — | | (534,415) | | — | | 2,327,311 |
|
|
|
Compensation Actually Paid vs. Total Shareholder Return |
|
|
|
Compensation Actually Paid vs. Net Income |
|
|
|
Total Shareholder Return Amount |
$ 62.18
|
99.85
|
99.38
|
Peer Group Total Shareholder Return Amount |
115.37
|
136.66
|
125.32
|
Net Income (Loss) |
$ (134,382)
|
$ 200,101
|
$ 23,523
|
Company Selected Measure Amount |
(138,170)
|
270,976
|
35,726
|
PEO Name |
Morris Goldfarb
|
|
|
PEO | Average Year End Fair Value of Equity Awards |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
$ 908,731
|
$ 4,322,272
|
$ 10,140,000
|
PEO | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
(5,474,346)
|
769,298
|
(3,026,909)
|
PEO | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
|
12,167,656
|
|
PEO | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
(131,804)
|
256,319
|
(1,233,452)
|
PEO | Total Average Equity Award Adjustments |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
(4,697,419)
|
17,515,545
|
5,879,639
|
PEO | Average Reported Value of Equity Awards |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
(4,499,972)
|
(16,167,626)
|
(3,682,500)
|
Non-PEO NEO | Average Year End Fair Value of Equity Awards |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
448,751
|
1,411,940
|
4,032,340
|
Non-PEO NEO | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
(1,939,445)
|
294,826
|
(1,170,614)
|
Non-PEO NEO | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
|
1,113,980
|
|
Non-PEO NEO | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
(44,906)
|
239,867
|
(534,415)
|
Non-PEO NEO | Total Average Equity Award Adjustments |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
(1,535,600)
|
3,060,612
|
2,327,311
|
Non-PEO NEO | Average Reported Value of Equity Awards |
|
|
|
Pay vs Performance Disclosure |
|
|
|
Adjustment to Compensation, Amount |
$ (1,666,643)
|
$ (2,420,636)
|
$ (1,464,408)
|