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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

Filed by the Registrant

Filed by a Party other than the Registrant

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12

 

Citi Trends, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

No fee required.

Fee paid previously with preliminary materials.

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

Graphic

104 Coleman Boulevard

Savannah, Georgia 31408

(912) 236-1561

May 8, 2024

Dear Citi Trends Stockholders,

You are cordially invited to attend the annual meeting of stockholders of Citi Trends, Inc. to be held at 9:00 a.m., Eastern Time, on June 20, 2024. We will conduct our Annual Meeting in a virtual format, via live audio webcast at www.virtualshareholdermeeting.com/CTRN2024. We have designed the format of the virtual meeting so that stockholders have the same rights and opportunities to vote and participate as they would have at a physical meeting. The formal notice of annual meeting appears on the next page.

In addition to the formal items of business to be brought before the meeting, we will be pleased to report on the affairs of the Company.

Your vote is important to us. Whether you own a few shares or many, and whether or not you plan to attend the virtual annual meeting, it is important that your shares be represented and voted at the meeting. Please act as soon as possible to vote your shares. You may vote your shares on the internet, by telephone or, if you received a paper copy of the proxy card by mail, by returning your signed proxy card in the envelope provided. You may also vote your shares online during the annual meeting.

On behalf of the board of directors and management, it is my pleasure to express our appreciation for your continued support.

Very truly yours,

Graphic

Peter R. Sachse

Executive Chairman of the Board of Directors

Citi Trends, Inc.

104 Coleman Boulevard

Savannah, Georgia 31408

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

to be held on June 20, 2024

To Citi Trends Stockholders:

You are cordially invited to attend the virtual annual meeting of stockholders of Citi Trends, Inc., a Delaware corporation, which will be held on June 20, 2024, at 9:00 a.m., Eastern Time. This will be a virtual meeting only, via live audio webcast at www.virtualshareholdermeeting.com/CTRN2024. Please note that there is no in-person annual meeting for you to attend.

The Annual Meeting is being held for the following purposes:

1.To elect the nine nominees named in the proxy statement to the board of directors to serve as directors whose terms will expire at the 2025 annual meeting of stockholders and until their respective successors are duly elected and qualified;
2.To vote on a non-binding, advisory resolution to approve the compensation of our named executive officers as set forth in the proxy statement;
3.To approve an amendment to our 2021 Incentive Plan to increase the number of shares available by 450,000;
4.To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 1, 2025; and
5.To transact any other business properly brought before the meeting or any adjournment or postponement of the meeting.

You can vote your shares of common stock if our records show that you were the owner of the shares as of the close of business on April 22, 2024, the record date for the Annual Meeting.

To attend, vote, and submit questions during the Annual Meeting, visit www.virtualshareholdermeeting.com/CTRN2024 and enter your 16-digit control number included on your Notice of Internet Availability of Proxy Materials or your proxy card.

On May 8, 2024, we expect to release the proxy materials to our stockholders and to send these stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our proxy statement and our fiscal 2023 Annual Report, and how to vote through the Internet or by telephone. All stockholders who do not receive the Notice of Internet Availability of Proxy Materials will receive a paper copy of our proxy materials by mail.

YOUR VOTE IS IMPORTANT. Regardless of whether you plan to attend the virtual-only meeting, please take a few minutes now to vote your shares as described in the Notice of Internet Availability of Proxy Materials or your proxy card so that your shares may be represented and voted at the Annual Meeting. If you are a beneficial owner or you hold your shares in “street name,” please follow the voting instructions provided by your bank, broker or other nominee. Regardless of the number of shares you own, your presence by proxy is helpful to establish a quorum and your vote is important.

By Order of the Board of Directors,

Graphic

David N. Makuen

Chief Executive Officer

May 8, 2024

Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to be Held on June 20, 2024: The Proxy Statement and our 2023 Annual Report are available at https://ir.cititrends.com/annual-meeting

TABLE OF CONTENTS

GENERAL

7

PROPOSAL 1: ELECTION OF DIRECTORS

11

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

15

BOARD LEADERSHIP STRUCTURE

15

BOARD DIVERSITY MATRIX

16

NOMINATION AND SELECTION OF DIRECTORS

16

DIRECTOR INDEPENDENCE

17

BOARD RISK OVERSIGHT

17

BOARD OF DIRECTORS COMMITTEES

18

AUDIT COMMITTEE REPORT

26

COMPENSATION COMMITTEE REPORT

27

EXECUTIVE OFFICERS

28

EXECUTIVE COMPENSATION

29

COMPENSATION DISCUSSION AND ANALYSIS

29

2023 FISCAL YEAR COMPENSATION TABLES

37

CEO PAY RATIO

37

PAY VERSUS PERFORMANCE

43

EXECUTIVE COMPENSATION – EQUITY COMPENSATION PLAN INFORMATION

46

DIRECTOR COMPENSATION

46

PROPOSAL 2: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

48

PROPOSAL 3: TO APPROVE AN AMENDMENT TO OUR 2021 INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES AVAILABLE BY 450,000

49

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

56

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

57

DELINQUENT SECTION 16 (a) REPORTS

59

PROPOSAL 4: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

60

OTHER BUSINESS

62

STOCKHOLDER PROPOSALS FOR INCLUSION IN NEXT YEAR’S PROXY STATEMENT

62

SHAREHOLDERS SHARING THE SAME ADDRESS

62

ANNUAL REPORT ON FORM 10K

62

Appendix A

63

2024 PROXY STATEMENT AT A GLANCE

The following executive summary is intended to provide an overview of the items presented in this proxy statement. We encourage you to read the entire proxy statement for more information about these topics prior to voting at the 2024 annual meeting of stockholders.

Annual Meeting of Stockholders

Time and Date:

June 20, 2024; 9:00 a.m. Eastern Time

Means:

Via live audio webcast at www.virtualshareholdermeeting.com/CTRN2024. You will need the control number included on your Notice of Internet Availability of Proxy Materials, proxy card or voting instruction form to participate in the virtual Annual Meeting. You may view the Annual Meeting without the control number.

Record Date:

Stockholders as of the close of business on April 22, 2024 are entitled to vote.

Attendance:

Please see the instructions on page 7 of this proxy statement.

Meeting Agenda and Voting Matters

Board's Voting

Page

Proposal

    

Recommendation

Reference

1

Election of Directors

 

FOR ALL nominees

11

2

Advisory Vote to Approve Executive Compensation

 

FOR

48

3

Approval of an amendment to the 2021 Incentive Plan to increase the number of shares available by 450,000

FOR

49

4

Ratification of Independent Registered Public Accounting Firm Appointment

 

FOR

60


– PROPOSAL 1 –

Current Directors & Director Nominees for Election

Current Director Name and

Director

Other Current

Principal Position

    

Age

    

Since

    

Independent

    

Committees

     

Public Co. Boards

Jonathan Duskin

56

2017

Yes

FC (Chair), AC, CC, CSRC

0

Brian P. Carney*

63

2007

Yes

AC (Chair), CC, FC

0

David N. Makuen

 

56

 

2020

 

No

 

 

0

Peter R. Sachse

 

66

 

2019

 

No

 

 

0

Kenneth D. Seipel

 

63

 

2019

 

Yes

 

NCGC (Chair), AC, FC

 

0

Laurens M. Goff*

51

2013

Yes

CC (Chair), NCGC

0

Margaret L. Jenkins

72

2017

Yes

CSRC (Chair), NCGC

1

Christina Francis*

55

2021

Yes

CC, CSRC

0

Cara Robinson Sabin

54

2021

Yes

AC, NCGC

0

*Retiring June 20, 2024

Director Nominee Name and

Director

Other Current

Principal Position

Age

Since

Independent

Proposed Committees

 

Public Co. Boards

Jonathan Duskin

56

2017

Yes

FC (Chair), AC, CC

0

David Heath

 

70

 

 

Yes

 

CC, NCGC

 

0

David N. Makuen

 

56

 

2020

 

No

 

 

0

Peter R. Sachse

 

66

 

2019

 

No

 

 

0

Kenneth D. Seipel

 

63

 

2019

 

Yes

 

AC (Chair), CC, FC

 

0

Charles Liu

49

Yes

AC, FC

0

Margaret L. Jenkins

72

2017

Yes

NCGC (Chair), AC

1

Michael Kvitko

63

Yes

NCGC, FC

0

Cara Robinson Sabin

54

2021

Yes

CC (Chair), NCGC

0

4

AC: Audit Committee

CC: Compensation Committee

FC: Finance Committee

NCGC: Nominating and Corporate Governance Committee

CSRC: Corporate Social Responsibility Committee

The Board anticipates incorporating the CSRC into the NCGC.

Attendance:

Each director nominee who is currently a Board member attended at least 80% of the eligible board and committee meetings in 2023.

Corporate Governance Highlights:

Board of Directors:

·

Board composed of a super-majority of independent directors

·

Separate roles for Chairman and Chief Executive Officer

·

Annual election of directors

·

Majority voting standard for uncontested director elections

·

Diverse board of directors in terms of background, professional experience and skills

·

Recent board refreshment with seven new directors since 2018

·

Average tenure of our board of directors nominees will be ~3.5 years if elected

·

Independent directors meet regularly in executive session without management present

·

Committees composed entirely of independent directors

·

Annual self-evaluations for board of directors and committees

Risk oversight by full board of directors and committees

Stockholder Interest:

·

Majority voting standard for uncontested director elections

·

Annual advisory vote to approve executive compensation

·

Annual vote to ratify independent auditors

·

Company policy against hedging, short-selling and pledging by directors, officers and employees

Corporate Social Responsibility Highlights:

·

Corporate Social Responsibility Committee of our board of directors oversees the Company’s policies, initiatives and strategies with respect to environmental, social and governance matters

·

CITIcares (“cares” – Citi Trends Against Racism Employee Solutions) Council

·

The Company is publishing its first Corporate Social Responsibility Report this Spring

– PROPOSAL 2 –

Advisory Vote to Approve Executive Compensation

We are requesting that our stockholders approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement. This proposal was supported by approximately 96%, 98% and 99% of the votes cast in each of 2023, 2022 and 2021, respectively. Please see the Compensation Discussion and Analysis, Summary Compensation Table, and other tables and disclosures beginning on page 29 of this proxy statement for a full discussion of our executive compensation program. Below are a few highlights of compensation governance practices.

Our Executive Compensation Practices (What We Do):

·

Stock ownership guidelines have been adopted for the Company’s executive officers.

·

A compensation clawback policy is applicable to the Company’s executive officers.

·

A significant portion of named executive officer compensation is performance-based.

Executive Compensation Practices Not Implemented (What We Don’t Do):

·

No excise tax gross-ups are provided.

·

Executive officers are not permitted to engage in certain transactions such as puts, calls or other derivatives relating to the Company’s securities.

·

We have never repriced underwater stock options.

·

We do not pay dividends on unvested stock awards.

5

·

The Compensation Committee reviews “tally sheets” to understand total compensation calculations in connection with making compensation decisions.

– PROPOSAL 3 –

Approval of an Amendment to the 2021 Incentive Plan to Increase the Number of Shares Available by 450,000

We are requesting that our stockholders approve an amendment to the 2021 Incentive Plan to increase the number of shares available by 450,000 in order to enable the Company to continue making equity compensation grants that will serve as incentives to recruit and retain key employees and qualified directors, and to continue aligning the interests of its employees and directors with stockholders.

– PROPOSAL 4 –

Ratification of Independent Registered Public Accounting Firm Appointment

We are requesting that our stockholders ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 1, 2025. The following table shows the fees billed for audit and other services provided to the Company by Deloitte & Touche LLP for fiscal 2023 and 2022:

Type of Fees

    

2023

    

2022

Audit Fees (1)

$

885,000

$

1,015,000

Audit-Related Fees

 

 

Tax Fees

 

 

All Other Fees

 

 

Total

$

885,000

$

1,015,000

(1)Audit fees include amounts billed to us related to the annual audit of our financial statements and interim reviews of the quarterly financial statements filed for fiscal 2023 and 2022.

6

CITI TRENDS, INC.
104 Coleman Boulevard
Savannah, Georgia 31408

PROXY STATEMENT

Annual Meeting of Stockholders
to be held on June 20, 2024

GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

This proxy statement is furnished in connection with the solicitation by the board of directors of Citi Trends, Inc. of proxies to be voted at the annual meeting of stockholders on June 20, 2024. This proxy statement, the accompanying form of proxy card and the annual report to stockholders are first being made available to our stockholders on or about May 8, 2024.

The principal executive offices of Citi Trends, Inc., a Delaware corporation, are located at 104 Coleman Boulevard, Savannah, Georgia 31408, and our telephone number is (912) 236-1561.

The terms “Citi Trends” and the “Company” (as well as the words “we,” “us” and “our”) refer to Citi Trends, Inc. References to “you” or “your” refer to our stockholders.

In this section of the proxy statement, we answer some common questions regarding the annual meeting of stockholders and the voting of shares of common stock at the meeting.

When and how will the virtual-only annual meeting be held?

The annual meeting will be held on Thursday, June 20, 2024 at 9:00 a.m., Eastern Time. The annual meeting will be a completely virtual meeting, which will be conducted via live webcast. You will not be able to attend the meeting in person. Please be assured that you will be afforded the same rights and opportunities to participate in the virtual meeting as you would at an in-person meeting, including the ability to vote your shares electronically and submit questions to be addressed during the meeting.

You will be able to attend the annual meeting online by visiting www.virtualshareholdermeeting.com/CTRN2024 and entering your 16-digit control number included in your Notice of Internet Availability of Proxy Materials, on your proxy card or in the instructions obtained in the manner prescribed by your nominee. If you lose your control number, you may join the annual meeting as a “Guest” but you will not be able to vote, ask questions or access the list of stockholders.

Why did I receive a Notice of Internet Availability of Proxy Materials but no proxy materials?

As permitted by the Securities and Exchange Commission (“SEC”), we are making this proxy statement and our Annual Report on Form 10-K available to most of our stockholders electronically via the internet, instead of mailing printed copies. The Notice of Internet Availability of Proxy Materials contains instructions on how to access this proxy statement and our Annual Report on Form 10-K and how to vote online or submit your proxy over the internet or by telephone. We will mail printed copies of the full set of proxy materials to the rest of our stockholders. If you receive the Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials in the mail unless you follow the instructions contained on the Notice of Internet Availability of Proxy Materials for requesting such materials.

What does it mean if I receive more than one Notice of Internet Availability of Proxy Materials or more than one set of proxy materials?

It means that your shares are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all of your shares. To ensure that all of your shares are voted, for each Notice of Internet Availability of Proxy Materials or set of proxy materials, please submit your proxy by phone, via the internet, or, if you received printed copies of the proxy materials, by signing, dating and returning the enclosed proxy card in the enclosed envelope.

7

What can I vote on at the annual meeting?

The matters scheduled to be voted on at the annual meeting are as follows:

(1)The election of the nine nominees named in this proxy statement to our board of directors to serve as directors and hold office until the annual meeting of stockholders in 2025 and until their successors are duly elected and qualified (“Proposal 1”);
(2)A non-binding, advisory resolution to approve the compensation of our named executive officers as set forth in this proxy statement (“Proposal 2”);
(3)Approval of an amendment to our 2021 Incentive Plan to increase the number of shares available by 450,000 (“Proposal 3”);
(4)Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 1, 2025 (“Proposal 4”).

How does the board of directors recommend that I vote?

The board of directors unanimously recommends that you vote your shares (i) “FOR ALL” of the board of directors’ nominees named in this proxy statement to be elected to the board of directors, (ii) “FOR” the approval of the non-binding, advisory resolution to approve the compensation of our named executive officers as set forth in this proxy statement, (iii) ) “FOR” the approval of an amendment to our 2021 Incentive Plan to increase the number of shares available by 450,0000, and (iv) “FOR” the ratification of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 1, 2025.

Who can vote?

You can vote your shares of common stock if our records show that you were the owner of the shares as of the close of business on April 22, 2024, the record date for determining the stockholders who are entitled to vote at the annual meeting. As of the close of business on April 22, 2024, there were a total of 8,536,716 shares of our common stock outstanding and entitled to vote at the annual meeting. You get one vote for each share of common stock that you own. Holders of shares of common stock do not have cumulative voting rights.

What is the required vote for approval of each proposal?

In an uncontested election, nominees for director are elected by a majority of the votes cast at the annual meeting with respect to that director. That means that the number of shares voted “for” a director must exceed the number of votes cast “against” that director. If a nominee who currently serves as a director is not re-elected, Delaware law provides that the director would continue to serve on the board of directors as a “holdover director.” In accordance with our bylaws and Corporate Governance Guidelines, the latter of which is available on our website at http://www.cititrends.com, each director submits an advance, contingent, irrevocable resignation that the board of directors may accept if stockholders do not re-elect that director. In that situation, our Nominating and Corporate Governance Committee would make a recommendation to the board of directors about whether to accept or reject the resignation, or whether to take other action instead. Within 90 days from the date that the election results were certified, the board of directors would act on the Nominating and Corporate Governance Committee’s recommendation and publicly disclose its decision and the rationale behind it.

Approval of the non-binding, advisory resolution to approve the compensation of our named executive officers as set forth in this proxy statement, approval of the amendment to our 2021 Incentive Plan and the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm each requires the affirmative vote of a majority of the votes cast at the annual meeting.

How many votes must be present to hold the annual meeting?

We will hold the annual meeting of stockholders if the number of shareholders representing the required quorum of shares of common stock entitled to vote either sign and return their proxy cards or attend the meeting virtually. One-third of the shares of common stock outstanding and entitled to vote at the meeting, present at the virtual meeting or by proxy, will constitute a quorum. Abstentions and broker non-votes (described below) will be treated as present for purposes of establishing a quorum.

8

How do I vote?

If you received a Notice of Internet Availability of Proxy Materials, that notice provides instructions on how to vote by internet, by telephone or by requesting and returning a paper proxy card. You may submit your proxy voting instructions via the internet or telephone by following the instructions provided in the notice. The internet and telephone voting procedures are designed to authenticate your identity, to allow you to vote your shares and to confirm that your voting instructions are properly recorded. If your shares are held in the name of a bank or a broker, the availability of internet and telephone voting will depend on the voting processes of the bank or broker. Therefore, we recommend that you follow the instructions on the form you receive. If you received a printed version of the proxy materials by mail, you may vote by following the instructions provided with your proxy materials and on your proxy card.

Although we encourage you to vote by proxy over the internet or by telephone prior to the annual meeting to ensure that your vote is counted, you can attend the virtual only annual meeting and vote your shares electronically if you are a stockholder of record on the record date by visiting www.virtualshareholdermeeting.com/CTRN2024 and entering your 16-digit control number included in your Notice of Internet Availability of Proxy Materials, on your proxy card or in the instructions obtained in the manner prescribed by your nominee. If your shares are held in “street name,” then you may vote your shares electronically at the virtual annual meeting only if you have a legal proxy from the entity that holds your shares giving you the right to vote the shares. A legal proxy is a written document from your brokerage firm or bank authorizing you to vote the shares it holds in its name.

How will your shares be voted?

If you properly complete your proxy card and send it to the Company prior to the vote at the annual meeting, or submit your proxy electronically by internet or by telephone before voting closes, your proxy (one of the individuals named in the proxy card) will vote your shares as you have directed. If you sign the proxy card but do not make specific choices, your proxy will vote your shares as recommended by the board of directors: (i) “FOR” each of the nominees named in this proxy statement to serve as directors until the 2025 annual meeting of stockholders and until their respective successors are duly elected and qualified, (ii) “FOR” the approval of the compensation of our named executive officers for 2024, (iii) “FOR” the approval of the amendment to our 2021 Incentive Plan to increase the number of shares available by 450,000, and (iv) “FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending February 1, 2025.

What if other matters come up at the annual meeting?

The only matters on which we know will be voted at the annual meeting are the proposals we have described in this proxy statement: Proposal 1 (election of directors), Proposal 2 (“say-on-pay”), Proposal 3 (approval of an amendment to the 2021 Incentive Plan) and Proposal 4 (ratification of the appointment of Deloitte & Touche LLP). If other matters are properly presented at the annual meeting, the designated proxies will vote your shares in their discretion.

Can I change my mind and revoke my proxy?

Yes, so long as you are the record holder. To revoke a proxy given pursuant to this solicitation, you must:

change your vote via the internet or by telephone at a later date. To be effective, your vote must be received before 11:59 p.m., Eastern Time, on June 19, 2024, the day before the annual meeting;
provide us with a written notice of revocation dated later than the date of the proxy, which should be delivered to Citi Trends, Inc. attn: Corporate Secretary, 104 Coleman Blvd, Savannah, Georgia 31408, at or before the annual meeting; or
attend the virtual annual meeting and vote your shares electronically — note that virtual attendance at the annual meeting will not revoke a proxy if you do not actually vote at the annual meeting.

If you hold shares in “street name,” you should contact your broker, bank or other nominee regarding any change in voting instructions.

What is the difference between a “stockholder of record” and a “beneficial owner of shares held in street name?”

If your shares are registered directly in your name with our transfer agent, Equiniti Trust Company, you are the stockholder of record with respect to those shares, and the Notice of Internet Availability of Proxy Materials was sent directly to you. If you request copies of the proxy materials by mail, you will receive a proxy card.

9

If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization, then you are the beneficial owner of shares held in “street name,” and the Notice of Internet Availability of Proxy Materials was forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account. If you request copies of the proxy materials by mail, you will receive a voting instruction form.

What happens if I do not return a proxy or do not give specific voting instructions?

If you are a stockholder of record and you do not vote via the internet, by telephone or by mail, your shares will not be voted unless you attend the virtual annual meeting to vote them electronically. If you are a stockholder of record and you sign and return a proxy card without giving specific voting instructions, then your shares will be voted in the manner recommended by the board of directors on all matters presented in this proxy statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the annual meeting.

If you hold your shares in “street name” and do not provide voting instructions to your broker, your broker will have the discretionary authority to vote your shares only on proposals that are considered “routine.” The only proposal at the annual meeting that is considered routine is the ratification of the appointment of our independent registered public accounting firm. All of the other proposals are considered “non-routine,” which means that your broker will not have the discretionary authority to vote your shares with respect to such proposals. Shares for which you do not provide voting instructions and for which a broker lacks discretionary voting authority are referred to as “broker non-votes.” Broker non-votes are counted as present for the purpose of establishing a quorum, but whether they are counted for the purpose of voting on proposals depends on the voting standard for the particular proposal.

Abstentions and broker non-votes will have no effect on the outcome of Proposal 1 (election of directors), Proposal 2 (“say-on-pay”), Proposal 3 (approval of an amendment to the 2021 Incentive Plan) or Proposal 4 (ratification of the appointment of Deloitte & Touche LLP). No broker non-votes are expected in connection with Proposal 4.

What if during the check-in time or during the annual meeting I have technical difficulties or trouble accessing the virtual meeting website?

We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, please call the technical support number that will be posted on the annual meeting login page.

Who will count the votes?

Broadridge will tabulate the votes.

Can I ask questions at the annual meeting?

Stockholders as of the record date or holders of valid proxies may submit questions online on the day of the annual meeting, beginning shortly before the start of the annual meeting at 8:45 a.m. Eastern Time, and during the annual meeting, by logging in with the 16-digital control number at www.virtaulshareholdermeeting.com/CTRN2024. If you lose your control number, you may join the annual meeting as a “Guest” but you will not be able to ask questions.

Our moderators will review questions received. We will answer questions during the virtual annual meeting that are pertinent to the Company as time permits. Questions and answers may be grouped by topic and substantially similar questions may be grouped and answered at once.

If we are unable to answer your question during the annual meeting due to time constraints, you are encouraged to contact our Investor Relations department at CitiTrendsIR@icrinc.com.

Who pays for the Company’s solicitation of proxies?

We will reimburse brokerage houses, banks and other custodians or nominees holding shares in their names for others for the cost of forwarding the Company’s proxy materials to beneficial owners. In addition, our directors, officers and employees may solicit proxies on our behalf in person, by telephone, by Internet or by other means of communication. None of these persons will receive any additional compensation for soliciting proxies.

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PROPOSAL 1:

ELECTION OF DIRECTORS

Our board of directors currently consists of nine directors: Brian P. Carney, Jonathan Duskin, Christina Francis, Laurens M. Goff, Margaret L. Jenkins, David N. Makuen, Cara Robinson Sabin, Peter R. Sachse and Kenneth D. Seipel. In accordance with the Company’s bylaws and certificate of incorporation, our board determines the number of directors on our board, but such number cannot be less than five or more than nine.

Our board of directors has nominated nine persons for election as directors to serve a one-year term expiring at the annual meeting of stockholders held in 2025 or until an earlier resignation or retirement or until their successors are elected and qualified to serve. Brian P. Carney, Laurens M. Goff and Christina Francis are retiring as directors on June 20, 2024, and are not nominated for election. It is intended that the persons named as proxies on the proxy card will vote to elect the nominees listed below unless otherwise directed or unless authority to vote is withheld.

The following nominees have consented to be named in this proxy statement, stand for election and serve as directors if elected: Jonathan Duskin, Margaret L. Jenkins, David N. Makuen, Cara Robinson Sabin, Peter R. Sachse, Kenneth D. Seipel, David A. Heath, Chaoyang (Charles) Liu and Michael S. Kvitko. Messrs. Heath, Liu and Kvitko have been nominated by the board of directors pursuant to the terms of a Cooperation Agreement between the Company and Fund 1 Investments, LLC (the “Cooperation Agreement”). If any nominee named herein is unable to serve or for good cause will not serve as a director at the annual meeting, it is intended that shares represented by the proxy card will be voted for the election of the other nominees named below and may be voted for any substitute nominee designated by our board of directors consistent with the Cooperation Agreement or, in lieu thereof, our board of directors may reduce the number of directors in accordance with the Company’s Third Amended and Restated Bylaws.

Nominees for Election as Directors

Jonathan Duskin. Mr. Duskin, age 56, has served as a director since 2017 and is Chairperson of the Finance Committee and a member of the Audit Committee, the Compensation Committee and the Corporate Social Responsibility Committee. Since March 2020, Mr. Duskin has served as the lead independent director of our board of directors. Since July 2009, Mr. Duskin has served as the Chief Executive Officer of Macellum Capital Management, LLC, which operates a New York-based pooled investment fund. From 2005 to 2008, Mr. Duskin served as a Managing Director and Partner at Prentice Capital Management, LP, an investment management firm, and from 2002 to 2005, Mr. Duskin served as a Managing Director at S.A.C. Capital Associates LLC, a New York-based hedge fund. From 1998 to 2002, Mr. Duskin served as a Managing Director at Lehman Brothers Inc., an investment bank, and served as Head of Product Management and Chairman of the Investment Policy Committee within the Research Department. Mr. Duskin previously served on the boards of directors of Christopher & Banks Corporation, The Wet Seal, Inc., Whitehall Jewelers, Inc. and Furniture.com Inc.

Mr. Duskin’s considerable business, financial services and retail investment expertise, provision of financial services to a variety of public and private companies, prior service on the boards and committees of public companies and familiarity with the retail industry qualify Mr. Duskin to serve on our board of directors.

Margaret L. Jenkins. Ms. Jenkins, age 72, has served as a director since 2017 and is Chairperson of the Corporate Social Responsibility Committee and a member of the Nominating and Corporate Governance Committee. Ms. Jenkins is a retired executive with extensive background in advertising and marketing, having served as the Chief Marketing Officer of Denny’s restaurants, and was the Chief Marketing Officer of El Pollo Loco restaurants. Ms. Jenkins also held several management positions with Taco Bell Corp. and PepsiCo International Foodservice. Her career in advertising included account management work on brands such as McDonald’s, Sunny Delight Beverages and the Atlantic Richfield Company. Ms. Jenkins was an independent director of PVH Corp., an international apparel manufacturer and retailer, from June 2006 through May 2014. She joined the board of directors of Kohl’s Corp., an omnichannel retailer, in May 2021 and is a member of its audit committee. Ms. Jenkins is the chair of the board of directors of Prisma Health-Upstate, one of the largest health care providers in the Southeast.

Ms. Jenkins’ extensive marketing, advertising and management experience described above, as well as her performance as a director on boards of both public and not-for-profit companies, qualifies her to serve on our board of directors.

David N. Makuen. Mr. Makuen, age 56, has served as a director since 2020. Since March 2020, Mr. Makuen has served as the Chief Executive Officer of the Company. Previously, Mr. Makuen spent over eight years in various positions at Five Below, Inc., a publicly-traded specialty value retailer (“Five Below”), including as Executive Vice President, Marketing and E-commerce since September 2019, as Executive Vice President, Marketing and Strategy from November 2017 to August 2019, and as Senior Vice President, Marketing from 2011 to 2017. Prior to his work with Five Below, Mr. Makuen was the owner and President of Fresh Life

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Foods, LLC, a food service business, from 2009 to 2011. Previously, Mr. Makuen served as Vice President, Marketing for Eddie Bauer, LLC, a clothing retailer, from 2005 to 2009.

Mr. Makuen’s years of experience in the retail industry and his role as the Chief Executive Officer of the Company make him well qualified to serve on our board of directors.

Cara Robinson Sabin. Ms. Robinson Sabin, age 54, has served as a director since 2021 and is a member of the Audit Committee and the Nominating and Corporate Governance Committee. Ms. Robinson Sabin has more than 20 years of general management, business strategy, marketing, digital and innovation experience. She’s the former CEO of Beauty and Wellbeing for Unilever, North America. She also served as the CEO of Sundial Brands makers of SheaMoisture. Prior to Unilever, she held various marketing management positions at L’Oreal, Estee Lauder, Johnson & Johnson, and Capital One Financial. Ms. Robinson Sabin serves on the Board of Visitors for Duke University’s Fuqua School of Business; Board of Trustees for the Alvin Ailey Dance Theater; and the Executive Committee and Board of the Ad Council. She is also a member of Delta Sigma Theta Sorority, Inc.

Ms. Robinson Sabin’s substantial general management, business strategy, marketing, digital and innovation experience make her well qualified to serve on our board of directors.

Peter R. Sachse. Mr. Sachse, age 66, has served as a director since 2019. Since March 2020, he has served as the Executive Chairman of our board of directors. He has served as Director at the Sachse Family Fund, an early-stage investor in digital startups since March 2017. Previously, Mr. Sachse spent 34 years in various positions at Macy’s, Inc., including as the Chief Growth Officer from February 2016 until January 2017, Chief of Innovation and Business Development from February 2015 to February 2016, Chief Stores Officer from February 2012 to February 2015 and Chief Marketing Officer from February 2009 to February 2012 (a title which he also held from June 2003 to May 2007). Mr. Sachse was also Chairman and Chief Executive Officer of the macys.com division of Macy’s, Inc. from April 2006 to February 2012. Since February 2024, Mr. Sachse has been the Chief Executive Officer of Tailored Brands Inc., an omnichannel specialty retailer of menswear, and previously served as the Co-Chief Executive Officer from March 2022 to January 2024, after previously serving as the Interim Co-Chief Executive Officer from March 2021 to February 2022, and as a director since February 2021.

Mr. Sachse has served as a director of Mattress Firm since February 2019, and previously served as a director of XO Group Inc., a media and technology company that provides content, tools, products and services for couples who are planning weddings, creating a home, and starting a family, from February 2010 until December 2018 and from October 2006 through April 2007, and as an observer to the board from April 2007 to February 2010. Mr. Sachse also previously served as a director of Charitybuzz Inc., a for-profit internet company that raises funds for nonprofit organizations through online charity auctions with celebrities and brands, from 2012 until 2015. Prior to serving in these roles, Mr. Sachse was President and Chief Operating Officer of The Bon Marché, a department store chain launched in Seattle.

Mr. Sachse’s substantial experience as an executive of companies with significant operations in the online industry, his financial expertise and his extensive experience in the retail industry make him well-qualified to serve on our board of directors.

Kenneth D. Seipel. Mr. Seipel, age 63, has served as a director since 2019 and is Chairperson of the Nominating and Corporate Governance Committee and a member of the Audit Committee and the Finance Committee. He has served as the lead independent director of West Marine Inc., the world’s largest retailer of boating supplies, since August 2021, after previously serving as the Chief Executive Officer from 2019 to 2021. From April 2017 until December 2018, Mr. Seipel served as a Principal of Retail Business Optimization LLC, a consulting firm helping retailers optimize their retail execution. From March 2013 to March 2017, Mr. Seipel served as Chief Executive Officer of Gabriel Brothers Inc., an off-priced retailer selling designer brands and fashions for up to 70% off department and specialty store prices. From March 2011 until February 2013, Mr. Seipel served as President and Chief Operating Officer of Wet Seal Inc. Prior to that, Mr. Seipel served as the President and Chief Merchandise/Marketing Officer of Pamida Discount Stores LLC, a regional discount chain of department stores with more than 175 locations in the United States, from 2009 until 2011. Mr. Seipel also served as Executive Vice President of Stores, Operations and Store Design for the Old Navy division of Gap, Inc., an American clothing brand and chain of more than 1,000 stores in the United States and Canada, from 2003 through 2008. Mr. Seipel also held various merchandising and operations management roles earlier in his career with Target Corporation, a public retailing company and the second largest discount retailer in the United States, Shopko Stores, Inc., a privately-held chain of retail stores, and J. C. Penney Company, Inc., a public corporation which operates a chain of mid-range department stores and catalog sales merchant offices throughout the United States.

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Mr. Seipel’s extensive knowledge and senior executive level experience in the retail industry, including the discount apparel market, make him well qualified to serve on our board of directors.

David A. Heath. Mr. Heath, age 70, has served as Principal of Heath & Associates LLC, a consulting company for wholesale and retail companies primarily in Sports and Fitness apparel, footwear and accessories, since May 2009. Prior to that, he served as SVP of Sales for Under Armour, an American sportswear company that manufactures footwear and apparel, from 2015 to 2017. From 1990 to 2009, Mr. Heath held several executive roles at Nike, Inc., including Global Vice President of Sales and Customer Development. Prior to joining, Nike, he worked for Adidas USA. Mr. Heath was also involved in the start-up company, Apex One Inc., until its acquisition by Converse Inc. Mr. Heath has experience serving on boards of directors, including currently serving on the board of directors of Woodbolt Holdings LLC, a provider of health supplements and a subsidiary Nutrabolt LLC. Previously, he served on the boards of directors of Hillerich & Bradsby, owner of the Louisville Slugger Museum & Factory, Barrels & Billets, Bionic Gloves, and Timber Mills, and Broder Bros., Co., a retail apparel and fashion company. Mr. Heath has more than 40 years of experience in the Sports and Fitness Industry related to apparel, footwear, accessories and equipment, including roles in Sales, Marketing and General management, including P&L responsibility.

Mr. Heath’s extensive wholesale and retail background together with his experience as a consultant, gives him keen insight into retailers’ needs from both supplier and operator viewpoints making him well qualified to serve on our board of directors.

Chaoyang (Charles) Liu. Mr. Liu, age 49, brings more than 20 years of experience in end-to-end supply chain management and corporate operations across the retail and consumer products industry. Since October 2021, Mr. Liu has served as the Chief Operating Officer of Away where he is responsible for the end-to-end operation and supply chain functions, including global sourcing, manufacturing, product development, quality control, logistics, transportation, inventory management, allocation, customer service, along with digital, information technology and company ERP implementation. Prior to joining Away, Mr. Liu served as the Chief Operating Officer for Casper from Feb 2021 to Sep 2021 and from April 2018 to Feb 2021, he served as the Vice President of Supply Chain for Walmart eCommerce to deliver relationships and negotiations, inventory, logistics, and customer promise. Before Walmart, he had leadership positions with Shopko, Walgreens, and Ahold Delhaize. Charles received his Bachelor of Science Degree in Computer Science from Wuhan University in China, an MBA and Master of Science in Computer Science from the University of Tennessee.

Mr. Liu’s substantial experience in supply chain management and corporate operations makes him well qualified to serve on our board of directors.

Michael S. Kvitko. Mr. Kvitko, age 63, is an experienced retail leader with broad multi-channel expertise in off-price stores, dollar stores, big box discount stores, and department stores. He most recently spent 6 years as the CEO of Forman Mills, where he and his team modernized the operations of the company and totally transformed the customer shopping experience. Before joining Forman, he was President of Dollar Express, the 330 store carve-out of Family Dollar stores, created by an FTC order, when Dollar Tree acquired Family Dollar. He served previously as EVP and Chief Merchandising & Marketing Officer for both 99¢ Only Stores and Variety Wholesalers, and SVP of Merchandising at Family Dollar, Mervyn’s (a division of Target Corporation) and May Department Stores. He has experience with public, private and private equity-sponsored companies. Mike is well versed in brand management, including both private brand development and direct­ to-retail licensing, and has extensive global sourcing knowledge in both Softlines and Hardlines.

Mr. Kvitko’s substantial experience as a leader of retail organizations makes him well qualified to serve on our board of directors.

Our board of directors unanimously recommends that stockholders vote “FOR” each of the nominees listed above.

Agreements with Stockholders

On February 28, 2024 (the “Effective Date”), the Company entered into the Cooperation Agreement with Fund 1 Investments, LLC.

Pursuant to the Cooperation Agreement, the Company has appointed each of David Heath, Charles Liu and Michael Kvitko as an observer to the Company’s Board of Directors (the “Board”) to serve as such until the conclusion of the 2024 annual meeting of stockholders; (ii) agreed to nominate each of Messrs. Heath, Liu and Kvitko for election to the Board at the Annual Meeting; and (iii) accepted the retirement, effective as of the conclusion of the Annual Meeting, of three incumbent directors. Brian P. Carney, Laurens M. Goff and Christina Francis are retiring at the conclusion of the Annual Meeting. Pursuant to the Cooperation Agreement, the Company intends to appoint Mr. Heath to the Compensation Committee of the Board and the Nominating and Corporate Governance Committee of the Board and Messrs. Liu and Kvitko to the Finance Committee of the Board, assuming the successful election to the

13

Board. Fund 1 has certain replacement rights for Messrs. Liu, Kvitko and Heath if certain ownership thresholds are met until the Cooperation Agreement is terminated. From the Effective Date to the Termination Date (as defined below) (the “Standstill Period”), if the Investor satisfies the Minimum Ownership Threshold (as defined in the Cooperation Agreement), the Investor will have replacement rights with respect to the New Directors, which will be subject to the Board’s approval (not to be unreasonably withheld, conditioned or delayed). The Termination Date is the earlier of (i) 30 days prior to the opening of the window for the submission of stockholder director nominations for the Company’s 2025 annual meeting of stockholders and (ii) 150 days prior to the one-year anniversary of the 2024 Annual Meeting (the earlier of (i) and (ii), the “Termination Date”).

The Cooperation Agreement places certain voting and other requirements on the Investor, which are more fully summarized in the 8-K filed by the Company on February 28, 2024, which also contains a link to the entire text of the Cooperation Agreement.

14

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Board Leadership Structure

Separate Chairman and CEO

The board has separated the roles of Chairman of the board of directors and Chief Executive Officer (“CEO”) since March 2015. Our board of directors does not have a set policy with respect to such separation, as the board believes it is in the best interests of the Company to make that determination based on the position and direction of the Company and the membership of the board of directors. The board believes this structure and separation of duties provide a balance between the independent directors’ oversight of the business and the CEO’s management of the day-to-day affairs of the business. The Chairman is an effective liaison between the board and senior management and focuses the board on critical business and operational issues. Since March 2020, Mr. Sachse has served as the Executive Chairman of the board of directors.

Lead Independent Director

The Company’s Corporate Governance Guidelines provide for the appointment of a lead independent director at any time when the Chairman is not independent. Our board of directors believes that the appointment of a lead independent director and the use of regular executive sessions of the independent directors, along with the board’s independent committee system and majority-independent composition, allow it to maintain effective oversight of management. Our board of directors recognizes that depending on the circumstances, other leadership models might be appropriate. Accordingly, our board regularly reviews and reassesses its leadership structure.

The Company appointed Mr. Duskin as the lead independent director in March 2020 in connection with the appointment of Mr. Sachse, who is not an independent director, as the Executive Chairman. The lead independent director presides at all meetings of our board of directors at which the Chairman is not present, including executive sessions of the independent directors. Our board has adopted guidelines that provide for the lead independent director to fulfill the following functions:

Serve as a liaison, as needed, between the directors and the Chairman of the board of directors;
Call meetings of the independent directors, when appropriate;
If requested by Company management or stockholders, ensure that he or she is available, as appropriate, for consultation with management and/or direct communication with stockholders;
Be the primary point of contact for stockholder communications addressed to independent directors;
Recommend the retention of outside advisors who report directly to the board of directors as he or she may determine is necessary or appropriate; and
Assist in the annual evaluation of the Chief Executive Officer, and, if an officer other than the Chief Executive Officer is serving as Chairman of the board of directors, such other officer. For the officer serving as Chairman of the board of directors, such evaluation shall include an evaluation of such officer’s effectiveness as Chairman of the board of directors and as an officer of the Company and an annual evaluation of his or her interactions with directors and ability to provide leadership and direction to the full board of directors.

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Board Diversity Matrix

Our board of directors is currently comprised of nine individuals selected on the basis of numerous criteria, including business experience, industry knowledge and other fields of significant knowledge, good character, sound judgement, integrity and diversity. We view the effectiveness of our board of directors through both an individual and collective lens and believe that our board of directors is optimized to support and guide the Company. The information included in the table below is current as of April 22, 2024.

Female

Male

Non-Binary

Did Not Disclose Gender

Part I: Gender Identity

Directors

3

6

-

-

Part II: Demographic Background

African American or Black

3

-

-

-

Alaskan Native or Native American

-

-

-

-

Asian

-

-

-

-

Hispanic or Latinx

-

-

-

-

Native Hawaiian or Pacific Islander

-

-

-

-

White

-

6

-

-

Two or More Races or Ethnicities

-

-

-

-

LGBTQ+

-

-

-

-

Did Not Disclose Demographic Background

-

-

-

-

(1) Assuming all nominees are elected, the board will consist of 2 individuals who identify as African American or Black females; 1 who identifies as an Asian male; and 6 who identify as White males.

Nomination and Selection of Directors

The Nominating and Corporate Governance Committee identifies and evaluates potential director candidates in a variety of ways. Recommendations may come from current members of our board of directors, professional search firms, members of management, stockholders or other persons. In assessing the qualifications of potential nominees, the Nominating and Corporate Governance Committee may rely on personal interviews or discussions with the candidate and others familiar with the candidate’s professional background, on third-party background and reference checks and on such other due diligence information as reasonably available. The Nominating and Corporate Governance Committee must be satisfied that the candidate possesses the highest professional and personal ethics and values and has broad experience with business-policy-making before it would recommend a candidate as a nominee to our board of directors, and the nominee must meet the following minimum qualifications:

demonstrates personal integrity and moral character;
shows a willingness to apply sound and independent business judgment for the long-term interests of stockholders of the Company;
possesses relevant business or professional experience, technical expertise or specialized skills;
exhibits personality traits and background that appear to fit with those of the other directors to produce a collegial and cooperative board responsive to the Company’s needs; and
maintains the ability to commit sufficient time to effectively carry out the substantial duties of a director.

Neither the board nor the Nominating and Corporate Governance Committee has a formal diversity policy regarding the consideration of diversity in identifying director candidates; however, the charter for the Nominating and Corporate Governance Committee provides that the committee will review candidates’ experience, integrity, competence, skills, diversity of experience, gender identity, race, ethnicity, sexual orientation and ages, and dedication in the context of the needs of the board. Accordingly, in connection with its evaluation of each candidate, the committee takes into account how all such factors pertaining to a candidate may complement or supplement those skills of other board members. As a result of this process, our board, represents a wide range of business-related experiences, including executive, financial, merchandising, retail operations, distribution, marketing and advertising.

The Nominating and Corporate Governance Committee evaluates nominees submitted by stockholders in the same manner as nominees from other sources. Stockholders may recommend nominees for consideration at the annual meeting by submitting the names and supporting information to the Secretary of the Company at the following address: Stockholder Nominations, Citi

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Trends, Inc., 104 Coleman Boulevard, Savannah, Georgia 31408. Such submissions must be delivered or mailed to the Secretary and received not less than 90 calendar days and not more than 120 calendar days prior to the first anniversary of the previous year’s annual meeting. The submission should include a current resume and curriculum vitae of the candidate, a statement describing the candidate’s qualifications and contact information for personal and professional references. The submission must also include certain information about the stockholder who is submitting the nominee and must comply with all of the requirements set forth in the Company’s bylaws.

Majority Voting Policy

In an uncontested election, nominees for director are elected by a majority of the votes cast at the annual meeting with respect to that director. That means that the number of shares voted “for” a director must exceed the number of votes cast “against” that director. If a nominee who currently serves as a director is not re-elected, Delaware law provides that the director would continue to serve on the board of directors as a “holdover director.” In accordance with our bylaws and Corporate Governance Guidelines, each director submits an advance, contingent, irrevocable resignation that the board of directors may accept if stockholders do not re-elect that director. In that situation, our Nominating and Corporate Governance Committee would make a recommendation to the board of directors about whether to accept or reject the resignation, or whether to take other action instead. Within 90 days from the date that the election results were certified, the board of directors would act on the Nominating and Corporate Governance Committee’s recommendation and publicly disclose its decision and the rationale behind it.

In accordance with our bylaws, in a contested election, nominees for director are elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors. An election is “contested” if, as of a date that is 14 days in advance of the date we file our definitive proxy statement (regardless of whether or not thereafter revised or supplemented) with the SEC, the number of nominees exceeds the number of directors to be elected. This means that the nominees receiving the highest number of affirmative votes will be elected.

Director Independence

The Company’s standards for determining director independence require the assessment of directors’ independence each year. A director cannot be considered independent unless our board of directors affirmatively determines that he or she does not have any relationship with management or the Company that may interfere with the exercise of his or her independent judgment.

Our board of directors has assessed the independence of each non-employee director and each nominee for director under the Company’s guidelines and the independence standards of NASDAQ, the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated by the SEC. Our board of directors affirmatively determined that the seven current non-employee directors, Messrs. Carney, Duskin, Goff and Seipel and Mses. Francis, Jenkins and Robinson Sabin are independent and the director nominees Messrs. Heath, Liu and Kvitko are independent.

Retirement Age Policy and Director Tenure

It is the general policy of the Company that any individual older than 75 years of age will be ineligible for a position on the board of directors. Additionally, once a sitting member of the board of directors is over the age of 75, he or she is ineligible for re-nomination at the next annual meeting of stockholders.

The board of directors does not believe it is advisable to limit the number of terms for which an individual may serve as a director. Directors who have served on the board of directors for an extended period of time are able to provide valuable insight into the Company’s business based on their experience and understanding of the Company’s history, policies and objectives. The board of directors believes that it can, as necessary, utilize the nominating process to elect or appoint new directors to obtain new ideas and viewpoints regarding the Company’s business and affairs. An individual director’s repeated nomination is dependent upon such director’s performance evaluation, and a suitability review, both of which are conducted by the Nominating and Corporate Governance Committee. Assuming the election of director nominees, the current average tenure of the board of directors will be ~3.5 years, with seven newly appointed directors since 2018.

Board Risk Oversight

Our management team is responsible for identifying, assessing and managing our exposure to risk, while our board of directors is responsible for providing oversight of risk management. A fundamental part of risk oversight is not only understanding the material risks a company faces and the steps management is taking to manage those risks but also understanding what level of risk is

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appropriate for the Company. The oversight role performed by our board of directors and its committees includes, among other things, the following:

Review of risks associated with our long-term strategic plan and annual budgets;
Meetings with various members of management regarding initiatives being undertaken in their respective areas, including, among others, merchandising, real estate, finance, human resources and information services;
Private meetings with our independent registered public accounting firm, our Chief Financial Officer (or principal financial officer) and our Director of Internal Audit and Loss Prevention;
Performance of a comprehensive risk assessment, including those significant risk factors discussed in Item 1A of our Annual Report on Form 10-K;
Review and approval of our Investment Policy; and
Review of legal matters.

While the full Board has overall responsibility for risk oversight, it is supported by our Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, Corporate Social Responsibility Committee and Finance Committee, which each have responsibility for addressing risks inherent within their areas of oversight. Each of the committee chairs regularly reports to our board of directors regarding significant risks addressed.

The Audit Committee is responsible for assisting our board of directors with its oversight of our overall risk management profile, our accounting, reporting and financial practices, including the integrity of our financial statements, our administrative and financial controls, and our compliance with legal and regulatory requirements. The Audit Committee is also responsible for overseeing cyber risk, information security and technology risk, including management’s actions to identify, assess, mitigate and remediate material cyber issues and risks. Through its regular meetings with management, including the finance, legal and internal audit functions, the Audit Committee periodically reviews the Company's major risk exposures and the steps management has undertaken to control them. The Audit Committee also receives regular reports from our Vice President Information Systems and other members of management on the Company’s technology and cyber risk profile, enterprise cyber program and key enterprise cyber initiatives. The Audit Committee coordinates with the full board of directors regarding the strategic implications of cyber and technology risks. The Audit Committee also reviews our cyber and data risk management strategy and policies on at least a semi-annual basis with our management. In addition, the Audit Committee and our board of directors will promptly be made aware of any significant cyber or data security-related incidents. The Audit Committee is also responsible for overseeing any related party transactions.

The Compensation Committee’s responsibilities related to risk include overseeing and evaluating risks related to the Company’s compensation structure and compensation programs, including the formulation, administration and regulatory compliance with respect to compensation matters and overseeing senior management succession.

The Nominating and Corporate Governance Committee oversees our risk related to corporate governance practices and procedures, director independence, director succession planning and board composition.

The Corporate Social Responsibility Committee’s risk-related responsibilities include identifying and monitoring the environmental, social and other related public policy trends, issues and concerns, which affect or could affect the business operations, financial performance or public image of the company and recommending to our board of directors appropriate goals, policies and practices with respect to such environmental, social and corporate responsibility matters.

The Finance Committee assists our board of directors in providing oversight of the Company’s financial activities and financial condition.

Board of Directors Committees

The board of directors has established an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, a Corporate Social Responsibility Committee and a Finance Committee, each comprised solely of the independent members of our board of directors. During fiscal 2023, all independent members of our board of directors served on at least two of the five standing committees of our board of directors.

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The following table shows the current composition of the committees of our board of directors:

Audit Committee

Compensation Committee

Nominating and Corporate Governance (NCG) Committee

Corporate Social Responsibility (CSR) Committee

Brian P. Carney (Chair)

Laurens M. Goff (Chair)

Kenneth D. Seipel (Chair)

Margaret L. Jenkins (Chair)

Jonathan Duskin

Brian P. Carney

Laurens M. Goff

Jonathan Duskin

Cara Robinson Sabin

Christina Francis

Margaret L. Jenkins

Christina Francis

Kenneth Seipel

Jonathan Duskin

Cara Robinson Sabin

Finance Committee

Jonathan Duskin (Chair)

Brian P. Carney

Kenneth Seipel

The following table shows the planned new composition of the committees of our board of directors following the Annual Meeting assuming the election of the Director Nominees as proposed:

Audit Committee

Compensation Committee

NCG/CSR Committee

Finance Committee

Kenneth Seipel (Chair)

Cara Robinson Sabin (Chair)

Margaret L. Jenkins (Chair)

Jonathan Duskin (Chair)

Jonathan Duskin

Jonathan Duskin

Cara Robinson Sabin

Kenneth Seipel

Charles Liu

David Heath

David Heath

Michael Kvitko

Margaret L. Jenkins

Kenneth Seipel

Michael Kvitko

Charles Liu

Audit Committee

The Audit Committee reviews our internal accounting procedures and consults with and reviews the services provided by our independent registered public accounting firm. Each of the members of the Audit Committee satisfies NASDAQ’s audit committee member independence requirements. The board of directors has determined that Mr. Carney and Mr. Duskin each qualify as an “audit committee financial expert” as defined by the rules of the SEC. During fiscal 2023, the Audit Committee met thirteen times.

The Audit Committee oversees the Company’s accounting and financial reporting processes, both internal and external, as well as audits of the Company’s financial statements, on behalf of the board of directors. The principal duties and responsibilities of the Audit Committee, among other things, are to do as follows:

have direct responsibility for the appointment, selection, compensation, retention, replacement and oversight of the work of our independent registered public accounting firm, including prescribing what services are allowable and approving in advance all services provided by them;
evaluate the experience, qualifications and performance of the lead partner of the independent registered public accounting firm and the senior members of the independent registered public accounting firm’s engagement team;
discuss with the internal auditors and the independent registered public accounting firm the overall scope and plans for their respective audits and the results of their respective audits;
review our annual audited financial statements and quarterly unaudited financial statements, and discuss the statements with management and the independent registered public accounting firm and review our earnings press releases, as well as financial information and earnings guidance, if any, provided to analysts and rating agencies;
review and discuss with management, the internal auditors and the independent registered public accounting firm the adequacy and effectiveness of our internal controls, including our ability to monitor and manage business risk, legal and ethical compliance programs and financial reporting;
oversee the Company’s overall risk management profile, including financial risk and risks related to data protection and cybersecurity matters;

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review and approve all related party transactions consistent with the rules applied to companies listed on The NASDAQ Stock Market; and
establish procedures regarding complaints received by us or our employees regarding accounting, accounting controls or auditing matters.

The Audit Committee is required to report regularly to our board of directors to discuss any issues that arise with respect to the quality or integrity of our financial statements, our compliance with legal or regulatory requirements, the performance and independence of our independent registered public accounting firm or the performance of the internal audit function. The Audit Committee’s work is guided by a written charter, which has been approved and adopted by the board of directors. A copy of the current Audit Committee charter is available in the “Investor Relations” section of the Company’s website located at http://www.cititrends.com. The information set forth on this website should not be deemed filed with, and is not incorporated by reference into, this proxy statement or any of the Company’s other filings under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically so provides.

Compensation Committee

The Compensation Committee reviews and determines the compensation and benefits of the Company’s executive officers, administers our incentive and equity-based compensation plans and oversees the development, retention and succession of senior management and employees. Each of the members of the Compensation Committee satisfies NASDAQ’s compensation committee member independence requirements. The Compensation Committee has adopted a written charter, a copy of which is available in the “Investor Relations” section of the Company’s website at http://www.cititrends.com. During fiscal 2023, the Compensation Committee met ten times. The principal duties and responsibilities of the Compensation Committee, among other things, are to do as follows:

annually review and approve corporate goals and objectives relevant to our CEO’s compensation, evaluate the CEO’s performance in light of these goals and objectives, and determine and approve (and, if desired, recommend to our board of directors for its approval) the CEO’s compensation based on such evaluation, including base salary, cash bonuses and equity awards;
annually approve (and, if desired, recommend to our board of directors for its approval) the compensation for our other executive officers, including the salaries and awards under our incentive compensation plans and equity-based plans;
review and administer the Company’s incentive and equity-based compensation plans;
review and make recommendations to our board of directors concerning compensation arrangements for non-employee members of our board of directors;
review the Company’s overall compensation systems and determine whether any incentive compensation arrangements encourage excessive risk-taking;
review key human resources policies and practices of the Company related to organizational engagement and effectiveness, workplace environment and culture, talent sourcing strategies and employee recruitment, retention and development programs;
assist our board of directors in developing principles and policies for evaluating potential candidates for executive positions and oversee the development of executive succession plans;
broadly oversee matters relating to the recruitment, motivation, development and retention of senior management and receive periodic reports from management regarding the recruitment, motivation, development and retention of employees;
review the Company’s diversity and inclusion programs and key metrics associated with the programs;
review and approve any severance or similar termination payments or payments resulting from a change in control of the Company proposed or made to any of our current or former executive officers;
review and approve any employment contracts or other contractual arrangements resulting in any payment to any employee of the Company proposed to be made as a result of a change in control of the Company; and

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determine and monitor compliance with stock ownership guidelines for executive officers and directors.

The Compensation Committee has the discretion to delegate all or a portion of its duties and responsibilities to a subcommittee of the Compensation Committee. In addition, the Compensation Committee has delegated limited authority to our CEO to grant awards under the 2021 Incentive Plan to non-executive employees of the Company. The Compensation Committee has the authority and resources to engage compensation consultants and legal, accounting or other advisors to provide the committee with advice and information in connection with carrying out its responsibilities. The Compensation Committee engaged Korn Ferry (“Korn Ferry” or the “Compensation Consultant”) in 2021 to provide market data regarding compensation practices at peer companies and to provide general advice on the Company’s executive compensation practices.

See “Compensation Discussion and Analysis” elsewhere in this proxy statement for a discussion of the role of the Compensation Consultant and executive officers in the compensation process and further discussion of the processes and procedures of the Compensation Committee. See also “Compensation Committee Report” elsewhere in this proxy statement.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee assists our board of directors in overseeing the Company’s governance structure and other corporate governance matters. The Nominating and Corporate Governance Committee has adopted a written charter, a copy of which is available in the “Investor Relations” section of the Company’s website at http://www.cititrends.com. During fiscal 2023, the Nominating and Corporate Governance Committee met four times. The principal duties and responsibilities of the Nominating and Corporate Governance Committee, among other things, are to do as follows:

review the composition of our board of directors and committee structure and evaluate the performance of the board, its directors and its committees;
identify individuals qualified to become board members, consistent with criteria approved by our board of directors;
select and recommend individuals as nominees to serve as directors at annual meetings of our stockholders and nominate individuals to fill any vacancies that open in the period between such annual meetings;
develop and recommend to our board of directors a set of corporate governance principles applicable to us and periodically review and assess such corporate governance principles and the Company’s governing documents; and
review the institutional and other affiliations of our board members and nominees for directors for any potential conflicts of interest and make recommendations to our board of directors with respect to the determination of director independence.

Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee assists our board of directors in providing oversight, monitoring, and guidance on matters related to corporate social responsibility, including diversity, sustainability, environmental stewardship and compliance. The Corporate Social Responsibility Committee has adopted a written charter, a copy of which is available in the “Investor Relations” section of the Company’s website at http://www.cititrends.com. During fiscal 2023, the Corporate Social Responsibility Committee met seven times. The principal duties and responsibilities of the Corporate Social Responsibility Committee, among other things, are to do as follows:

review and evaluate the Company’s significant strategies, activities, policies, investments and programs regarding corporate purpose, including corporate responsibility, sustainability, human rights, global community and social impact, and diversity and inclusion;
monitor the Company’s progress towards its diversity, equity and inclusion objectives, related metrics and its compliance with the Company’s responsibilities as an equal opportunity employer;
work with the Compensation Committee and the Nominating and Corporate Governance Committee, as appropriate, to develop processes to achieve the Company’s diversity objectives and metrics;
provide oversight of management’s efforts to ensure that the Company’s dedication to sustainability (including environmental and supply chain sustainability and human rights) is reflected in its business operations;

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identify and monitor the environmental, social and other related public policy trends, issues, risks and concerns, which affect or could affect the business operations, financial performance or public image of the Company and make recommendations to the Board regarding those trends and issues;
provide oversight of the Company’s community and social impact efforts and oversee protection of the Company’s corporate reputation and other matters of importance to the Company and its stakeholders (including employees, consumers, customers, suppliers, vendors, shareholders, governments, local communities and the general public);
review on a periodic basis the principles, guidelines and standards applicable to suppliers, vendors and other participants in the Company’s supply chain to ensure compatibility with the Company’s corporate purpose;
review sustainability metrics, targets, key performance indicators and related goals and monitor the progress towards achieving targets and benchmarks; and
evaluate and review environmental, social, health and safety metrics that will be publicly disclosed to external stakeholders.

Finance Committee

The Finance Committee was established as a formal board committee in September 2023 and assists our board of directors in providing oversight of the Company’s financial activities and financial condition. During fiscal 2023, the Finance Committee met four times. The principal duties and responsibilities of the Finance Committee, among other things, are as follows:

review and advise on changes in the capital structure of the Company that may have a material financial impact on the Company as a whole;
review and advise on capital allocation, including capital investment priorities and expenditures, major expense commitments and high-level inventory commitments recommended by management to implement the Company's strategic objectives;
review and advise on debt or equity transactions, including, for example, financings, refinancings, the issuance of new common or preferred stock, debt repurchases and stock repurchase programs
review and advise on the Company's dividend policy;
review and advise on the Company's balance sheet health;
review and advise on financial considerations relating to the acquisition of businesses, or divestiture or restructuring of the Company operations;
review and advise on the Company’s annual operating plan and strategic objectives, as well as periodic reports by management throughout the fiscal year on its progress against the plan and objectives, and on the effectiveness of the Company’s capital investments and major expense commitments;
review and advise on the Company's long-term business/financial plan and long-term capital plan prepared by management;
review and advise on the Company's resource allocation plan with respect to its infrastructure requirements, including plans for meeting such requirements through the utilization of people, process and technology;
review and advise on earnings releases and other communications with investors;
review and advise on the creation of shareholder value as demonstrated by the Company's stock performance; and
review and advise on such other responsibilities or tasks as the Board may delegate or assign to the Committee from time to time.

Risk and Employee Compensation

We believe that the Company’s compensation policies do not create risks that are reasonably likely to have a material adverse effect on the Company. Instead, we believe that our compensation structure encourages a fair balance of risk and reward. The process

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undertaken by the board of directors to determine that the compensation policies do not create unnecessary risk includes detailed reviews of the assumptions used in the budget on which annual cash incentives are based. In addition, the board of directors participates in the strategic planning process to ensure that the goals and planned strategies to achieve such goals are aligned between management and the board. As a retail company generating sales from physical stores only, we are not subject to many of the issues that cause employees in other industries to take excessive and unnecessary risks in order to maximize their compensation. We believe that the components of our employee-wide compensation program are consistent in form with similar companies. Also, the performance targets for our named executive officers are at the consolidated company level, not at individual division or subsidiary levels, and there is a balance between annual cash incentive compensation and long-term equity incentives to enhance the likelihood that management will not make decisions in the short term to earn cash incentives that could limit the ability to achieve long-term success.

Code of Business Conduct and Ethics

We have adopted a written Code of Business Conduct and Ethics applicable to our directors, executive officers (including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions) and employees in accordance with the rules of the NASDAQ Stock Market and the SEC. Our Code of Business Conduct and Ethics is designed to deter wrongdoing and to promote the following:

honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest;
full, fair, accurate, timely and understandable disclosure in reports and documents that we file with the SEC and in all other public communications;
compliance with applicable laws, rules and regulations, including insider trading compliance; and
accountability for adherence to the Code of Business Conduct and Ethics and prompt internal reporting of violations of such code, including
illegal or unethical behavior regarding accounting or auditing practices.

The Code of Business Conduct and Ethics is available on the Company’s website at http://www.cititrends.com. In the event of any amendment or waiver of the Code of Business Conduct and Ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, such amendment or waiver will be posted on our website. Our directors, executive officers and employees are required to affirm annually their compliance with the Code of Business Conduct and Ethics.

Compensation Committee Interlocks and Insider Participation

During fiscal 2023, Messrs. Goff, Carney and Duskin and Ms. Francis served on the Compensation Committee. No current member of the Compensation Committee serves or has ever served as one of our executive officers or employees. No current members of the Compensation Committee had a relationship since the beginning of fiscal 2023 requiring disclosure under Item 404 of Regulation S-K. None of our executive officers serves or has ever served as a member of the board of directors or the compensation committee of any entity that has one or more executive officers serving on our board of directors or our Compensation Committee.

Meetings and Attendance

During fiscal 2023, the board of directors held twelve meetings. Each director attended at least 80% of the total number of meetings of the board of directors and all committees thereof on which such director served during fiscal 2023 and that were held during the period in which he or she served as director.

We do not have a formal policy regarding attendance by directors at our annual meeting of stockholders but invite, expect and encourage all directors to attend. All of the individuals who were directors at the time of the 2023 annual meeting of stockholders attended such meeting.

Stock Ownership Guidelines for Directors and Executives

In order to align the financial interests of our directors and executive officers with the long-term interests of our stockholders, we have adopted Stock Ownership Guidelines (the “Guidelines”). Under the current Guidelines, as revised and effective June 10, 2022 (the “Effective Date”), our non-employee directors and executive officers are expected to own shares of Company common stock having a value equal to a multiple of their base salary or cash retainer: Executive Chairman, Chief Executive Officer and non-

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employee directors are expected to own common stock having a value equal to three times their base salary or annual cash retainers, as applicable, while other executive officers are expected to own common stock having a value equal to two times their base salary.

Participants should make continuous progress toward their respective ownership requirements, and each executive and director is expected to satisfy his or her applicable ownership requirements within five years of the Effective Date, or such later date that he or she becomes subject to the Guidelines. Shares of common stock owned directly or indirectly, as well as shares of unvested time-based restricted stock and restricted stock units, count toward meeting the Guidelines. Until they satisfy the Guidelines, executives and directors must retain 75% of their shares of common stock received from the Company as compensation (except for shares withheld by the Company or sold by the participant to satisfy withholding taxes). As of the date of this proxy statement, all of the executives and directors have either satisfied their respective ownership requirements, or are within the five-year period allotted to satisfy their ownership requirements.

Stockholder Engagement

The Company recognizes the value of the views and input of its stockholders. The Company reaches out to and engages with its stockholders on various topics, including corporate governance, corporate social responsibility, compensation, performance, strategy and other matters. We believe that having regular engagement with our stockholders strengthens our relationships with them and helps us to better understand their views on our policies and practices and other matters of importance to our business.

Communications with our Board of Directors

Stockholders and other interested parties may communicate directly with our board of directors, with only the non-management directors as a group or with individual directors. All communications should be in writing and should be directed to the Secretary of the Company at the following address: Stockholder Communications, Citi Trends, Inc., 104 Coleman Boulevard, Savannah, Georgia 31408. The sender should indicate in the address whether it is intended for the entire board of directors, the non-management directors as a group or an individual director. Each communication received by the Secretary will be forwarded to the intended recipients.

Corporate Social Responsibility

Our goal is to be the leading specialty value retailer of apparel, accessories and home trends with a primary consumer base of African American and multicultural families in the United States. We are committed to strengthening the communities in which we work, developing our employees and making operational improvements to minimize our environmental impact. We also maintain governance practices and policies in line with the expectations of our stockholders, and we actively engage with them regarding our business and the corporate social responsibility (“CSR”) issues that are important to them. For additional discussion on our stockholder engagement, please see “Stockholder Engagement” above.

Our Corporate Social Responsibility Committee of the Board provides oversight, monitoring and guidance on matters related to CSR, including diversity, sustainability, environmental stewardship and compliance. This committee works closely with the Company’s CSR Management Task Force to review and discuss the Company’s CSR initiatives, programs and policies. Our CSR Committee also works closely with our Compensation Committee of the Board and the Nominating and Corporate Governance Committee of the Board to develop processes to achieve the Company’s diversity objectives and metrics.

To learn more about our CSR efforts, we encourage you to visit the “Responsibility” section of our corporate website at http://www.cititrends.com.

Environment. We continue to look for more ways to reduce our environmental impact. We believe there is more we can do as an organization and we are striving to operate in a more sustainable manner.

In 2022, Citi Trends launched a partnership with Goodwill, helping fund community programs in 12 different cities across the country and donating goods. Each year, we have unsold goods, most of which historically went to landfills. As we continue to roll out our partnership with Goodwill, we will continue to donate these unsold goods to the non-profit to help reduce the unnecessary waste of unsold goods. Goodwill will repurpose or sell 95% of the goods donated by the Company and use the proceeds to support the communities we both serve.

We have adopted environmentally friendly initiatives in many of our stores, including the installation of LED lighting in approximately 35% of our stores. Additionally, in 2022, we put a concerted effort towards reducing plastic waste and realized a reduction in the number of plastic bags used per transaction.

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The Company also enables vendors to drop ship products directly to its stores, dramatically decreasing the miles products travel to our stores. We employ consolidators to combine shipments and minimize the number of trucks in use. Our two Distribution Centers in Roland, OK and Darlington, SC continue to improve in conserving energy, recycling and reducing waste.

Diversity and Inclusion and Labor Practices. Our success is only possible with the hard work and dedication of our associates. We believe that a diverse and inclusive team is critical to our success. Therefore, we strive to foster an intentionally inclusive, diverse and productive workplace where our associates are valued and respected. We continue to focus on attracting, developing and retaining associates that reflect the diverse communities we serve. As of February 3, 2024, 85% of our associates are African American or multicultural and 82% are female.

We provide competitive compensation and comprehensive benefits programs to help meet the needs of our associates. We are also committed to the health, wellness and development of our associates. In 2022, we launched our Citi CRED program to help our associates build successful career paths by providing mentorship, giving exposure to diverse areas of the business, cultivating cross-functional relationships and offering educational opportunities. For more information about our human capital management practices, please refer to our 2023 Annual Report on Form 10-K.

We are dedicated to sourcing products from companies that share our values around human rights, ethics and environmental responsibility. Much of the apparel, footwear, accessories, and home-related merchandise sold in our stores is purchased from suppliers after they have been produced and imported to other retailers’ specifications. However, we order and import some products directly through our international buying agents. Therefore, we work with our suppliers to ensure minerals mined in known conflict areas are not used in our products. We further encourage our suppliers to only source minerals from responsible sources and to foster transparency in the supply chain.

Community. We are proud to have a diverse customer base and are dedicated to giving back to the communities where our stores are located. We formed the CITIcares Council in August 2020 to create and oversee initiatives that drive positive change and growth for our customers and associates. The CITIcares Council is a diverse group of associates who are passionate about making a difference. The members of the CITIcares Council serve as associates in every division and level of the company and reflect multiple genders, ethnicities and geographies. The purpose of the CITIcares Council is to collaborate with community leaders, organizations, individuals and established programs in local underserved communities on the core areas of education, healthcare, employment and exposure.

In February 2021, we launched our Black History Makers program to honor Black entrepreneurs who are making an impact in their communities. The program is designed to increase awareness of Black-owned businesses, and we provided ten $5,000 grants to Black business owners in fiscal 2021. We have continued this grant program annually, providing ten $5,000 grants to Black business owners in fiscal 2022 and again in fiscal 2023. Since its launch, the Company has provided $150,000 to 30 outstanding Black entrepreneurs. In February 2024, we launched our fourth annual campaign for this program to build on the momentum from the prior years.

Governance. We believe that a strong corporate governance program is the foundation for a sustainable and well-governed company. Accordingly, we continuously evaluate our structures, processes, and controls to ensure they support and promote accountability, transparency and ethical behavior. We have established corporate governance guidelines and policies that promote Company values, including a code of conduct as well as a code of ethics. For a detailed description of our governance policies and procedures, please see the discussion in the “Board of Directors and Corporate Governance” section.

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AUDIT COMMITTEE REPORT

The Audit Committee reviews the Company’s financial reporting process on behalf of the board of directors. Management has primary responsibility for the financial statements, the reporting process and the maintenance of an effective system of internal controls over financial reporting. The Audit Committee has adopted a written charter, a copy of which is available in the “Investor Relations” section of the Company’s website at http://www.cititrends.com.

In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited financial statements in the Annual Report on Form 10-K for the 2023 fiscal year. The Audit Committee has also discussed with Deloitte & Touche LLP, the Company’s independent registered public accounting firm during the 2023 fiscal year, the matters required to be discussed by the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 1301, Communications with Audit Committees.

The Audit Committee has received and reviewed the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements of the PCAOB regarding Deloitte & Touche LLP’s communications with the Audit Committee concerning independence and has discussed with Deloitte & Touche LLP its independence from the Company.

Based on the reviews and discussions referenced above, the Audit Committee recommended to the board of directors that the audited financial statements of the Company be included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2024 for filing with the SEC.

The undersigned members of the Audit Committee have submitted this Report to the Board of Directors.

Brian P. Carney, Chair

Jonathan Duskin

Cara Robinson Sabin

Kenneth D. Seipel

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section of this proxy statement with management. Based on its review and discussions with management, the committee recommended to our board of directors that the Compensation Discussion and Analysis be included in the Company’s proxy statement for the 2024 annual meeting of stockholders and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2024.

The undersigned members of the Compensation Committee have submitted this Report to the Board of Directors.

Laurens M. Goff, Chair

Brian P. Carney

Jonathan Duskin

Christina Francis

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EXECUTIVE OFFICERS

The following table sets forth the names, ages and positions of our current executive officers.

Name

    

Age

Position(s)

David N. Makuen

 

56

Chief Executive Officer

Heather Plutino

52

Executive Vice President and Chief Financial Officer

Lisa A. Powell

 

54

Executive Vice President and Chief Merchandising Officer

Vivek Bhargava

 

52

Senior Vice President of Supply Chain

The following sets forth selected biographical information for our executive officers who are not directors.

Heather Plutino. Ms. Plutino has served as our Executive Vice President and Chief Financial Officer since June 27, 2022. From 2020 to 2022, Ms. Plutino served as Senior Vice President of Financial Planning & Allocation and Commercial Finance at Bed Bath & Beyond. Prior to her work with Bed Bath & Beyond, Ms. Plutino was Group Vice President of Finance and Treasurer of Sally Beauty Holdings from 2018-2020. Previously, Ms. Plutino served as Vice President and Treasurer of Ascena Retail Group, Inc. (“Ascena”) from 2013-2018 and held a variety of finance and treasury roles at Charming Shoppes from 2007-2013 and Target Corporation from 1999-2007.

Lisa A. Powell. Ms. Powell has served as our Executive Vice President and Chief Merchandising Officer since September 30, 2019. From 2014 to 2019, Ms. Powell served as Vice President and General Merchandise Manager, Men’s and Ladies Omni Channel, of Century 21 Department Stores, an apparel retailer. From 2012 to 2014, Ms. Powell served as Vice President and Divisional Merchandise Manager of Men’s and Kids at Saks Off Fifth. Prior to that, Ms. Powell spent 20 years at TJX, Inc., an off-price retailer of apparel and home fashions, where she held various merchandising and planning/allocation positions, including Vice President and General Merchandise Manager, Ladies Sportswear.

Vivek Bhargava. Mr. Bhargava has served as our Senior Vice President, Supply Chain since February 13, 2023. From 2021 to February 2023, Mr. Bhargava served as the Vice President of Supply Chain and Engineering for Bed Bath and Beyond Inc., a home products retailer, where he led a team driving multi-year end to end supply chain transformation. From 2010 to 2020, Mr. Bhargava served as the Vice President of Operations and Transformation of Ascena, where he led multiple long-term projects related to supply chain, sourcing and information technology. From 2001 to 2009, Mr. Bhargava held various real estate strategy, sourcing, process management, supply chain and ecommerce integration positions for Ann Inc., a women's clothing retailer. Mr. Bhargava began his career at Kurt Salmon Associates, a retail consulting and business advisory firm, where he served as manager, supply chain practice group and as a consultant.

Each of the executive officers serves at the discretion of the board of directors and holds office until his or her successor is elected and qualified or until his or her earlier resignation or removal. There are no family relationships among any of the directors or executive officers.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

In the paragraphs that follow, we will give an overview and analysis of the material elements of our compensation program and policies, the material compensation decisions we have made under those programs and policies with respect to our named executive officers, and the material factors that we considered in making those decisions. This information should be read in conjunction with the compensation tables, related narratives and notes contained later in this proxy statement, containing specific information about the compensation earned or paid in fiscal 2023 to the following individuals, whom we refer to as our named executive officers (positions shown are those held by the respective officers during fiscal 2023):

David N. Makuen, our Chief Executive Officer
Heather Plutino, our Executive Vice President and Chief Financial Officer
Lisa A. Powell, our Executive Vice President and Chief Merchandising Officer
Vivek Bhargava, our Senior Vice President of Supply Chain since February 13, 2023
Ivy D. Council, our former Executive Vice President of Human Resources and Chief Compliance Officer who retired effective September 29, 2023
Charles J. Hynes, our former Senior Vice President of Supply Chain, who left the Company effective February 10, 2023

Our compensation program is designed to align the interests of management and stockholders and to link Company performance with executive pay, such that the Company’s achievement of challenging financial goals results in payment of annual incentives to our executive officers. The discussion below is intended to help you understand the detailed information provided in the compensation tables and put that information into context within our overall compensation program.

Summary of Fiscal 2023

Our fiscal 2023 financial results reflect performance improvement over the course of year, following a very challenging first quarter.

Fiscal 2023 Business Highlights

Elevated our in-store experience with a strong value offering, improved inventory levels and assortment optimization focused on African American and multicultural families
Demonstrated expense control throughout the year while investing in sales-driving initiatives such as marketing tests and inventory rebuilds
Opened 5 new stores, remodeled 15 stores and closed 14 stores; ended the year with 15% of the fleet upgraded to our CTx store format
Leveraged distribution center upgrades to expand shipping partnerships, resulting in freight rate improvements
Completed the implementation of our upgraded enterprise resource planning (ERP) system
Efficiently managed working capital and capital expenditures to retain cash and maintain a debt-free balance sheet

Fiscal 2023 Financial Highlights

Total sales of $747.9 million
Gross margin of 38.1%
Net loss of $1.46 per share
Cash of $79.7 million at the end of the year, with no debt

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Consideration of Last Year’s Advisory Stockholder Vote on Executive Compensation

At the annual meeting of stockholders held on June 9, 2023, approximately 96% of the shares cast were voted to approve the compensation of the Company’s named executive officers, as discussed and disclosed in the 2023 proxy statement.

Our board of directors and the Compensation Committee appreciate and value the views of our stockholders and regularly solicit their input on matters such as executive compensation, board composition and other more general governance topics. In considering the consistently high approval rates of the advisory votes on executive compensation, the Compensation Committee concluded that the compensation paid to our named executive officers and the Company’s overall pay practices enjoy strong stockholder support.

In light of the strong stockholder support of the compensation paid to our named executive officers evidenced by the results of this advisory vote, the Compensation Committee decided to retain our general approach to executive compensation and did not make significant changes to our executive compensation programs for 2023.

Going forward, future advisory votes on our named executive officer compensation, as well as direct communication with our stockholders on the subject, will serve as additional tools to guide the Compensation Committee in evaluating the alignment of the Company’s executive compensation programs with the interests of the Company and its stockholders.

Objective of Our Compensation Program

In order to maintain a critical advantage in our competitive marketplace, we believe our compensation program should be designed to provide market-competitive compensation and benefits that will enable us to attract and retain a talented, diverse workforce dedicated to the long-term success of the Company. In furtherance of those goals, our compensation program is designed to:

Enable the Company to attract, retain and motivate a team of high-quality executives who will create long-term stockholder value;
Create opportunities to participate in the ownership of the Company and to share in the value the executives help create, both directly and through managing those that report to them; and
Provide rewards that are proportional to each executive’s contribution to our success by including an individual component as well as an overall corporate performance component.

Our compensation philosophy emphasizes each individual’s responsibility for high achievement and provides a strong link between pay and performance on both an individual and Company level. Our management team and the Compensation Committee will continue to develop and refine our compensation philosophy, program and practices over time, with the goal of maximizing stockholder value.

How We Determine and Assess Executive Compensation

Role of the Compensation Committee and Executive Officers

The Compensation Committee plays an integral role in the strategic direction and administration of the compensation structure of the Company. The Compensation Committee and our CEO work together to ensure that the compensation paid to our named executive officers is in line with our compensation philosophy and furthers our long-term goals.

Our CEO recommends to the Compensation Committee base salary, target annual cash incentive amounts and formulas, and long-term equity incentive grants for our executive officers (other than himself), after forming qualitative judgments regarding individual performance within each executive’s areas of direct responsibility, as well as how such performance serves the entire Company, and after having discussions with the Compensation Committee and other members of management regarding appropriate levels of compensation. The Compensation Committee reviews such recommendations and determines whether, in light of our compensation philosophy, the recommended compensation levels are appropriate. This determination includes consideration of recommendations by the Compensation Consultant as described below. Upon such determination, the Compensation Committee formally approves the compensation levels for recommendation to the board of directors for approval. Our CEO is not involved with any aspect of determining his own compensation. The Compensation Committee independently sets the CEO’s total compensation package, taking into account the same factors as for the other executive officers.

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Compensation Consultant

The Compensation Committee has the authority to directly engage outside compensation consultants and other experts to assist in fulfilling its duties. As discussed in further detail in the following section, the Compensation Committee engaged Korn Ferry in 2021 to provide an analysis of the Company’s compensation practices and to provide the Compensation Committee with survey data and an update on current compensation trends. The Compensation Committee assessed the independence of the Compensation Consultant against specific criteria under applicable SEC and NASDAQ rules and concluded that no conflict of interest exists that would prevent Korn Ferry from independently advising the Compensation Committee. The Compensation Consultant does not have any relationship or arrangement with the Company other than their engagement as a consultant to the Compensation Committee.

Market Data

Periodically, the Compensation Committee reviews the compensation practices of a group of public companies selected from an industry peer group comprised primarily of specialty retailers that are similar in size to the Company. In 2023, the peer group used by the Compensation Committee consisted of the apparel retailers indicated below. The Compensation Committee believes that the companies comprising this peer group represented appropriate comparisons due to the similarity in business and financial characteristics. They were all either direct or tangential business competitors or geographically situated and similarly sized such that we considered them to be competitors for recruitment and retention purposes.

Boot Barn Holdings, Inc.

Hibbett, Inc.

The Buckle Inc.

Shoe Carnival, Inc.

The Cato Corporation

Tilly’s, Inc.

Destination XL Group, Inc.

Zumiez, Inc.

Five Below, Inc.

The peer group referenced above was primarily used for purposes of reviewing and analyzing the competitiveness of the compensation paid to our CEO and CFO. In addition, as part of its analysis for setting 2023 compensation levels for other executive officers, the Compensation Committee reviewed compensation information provided by the Compensation Consultant from its proprietary 2021 survey of more than 140 retail companies, focusing on pay data from similarly-sized companies. The Compensation Consultant’s analysis focused on the following areas of compensation:

base salary;
annual cash incentives;
total cash compensation (the sum of base salary and annual cash incentives);
long-term equity incentives (a variable incentive vesting over a multi-year period); and
total direct compensation (the sum of total cash compensation and long-term equity incentives).

We do not strive to set our executive officers’ targeted total direct compensation at a specific level relative to the median reflected in the Compensation Consultant’s peer group study or retail company survey. Instead, the data is used as a guide and is combined with the experience and judgment of the Compensation Committee’s members to determine the reasonableness of total direct compensation appropriate for each individual within the context of the Company’s performance. The 2023 analysis by the Compensation Consultant indicated that base salaries for our executive officers were generally near the median in relation to the peer group or retail survey, as applicable, whereas total cash compensation, long-term equity incentives and total direct compensation at target levels for the majority of our executive officers were generally above median (between the 50th and 75th percentiles) in relation to the peer group or retail survey, as applicable. We believe this reflects an appropriate balance between short-term cash incentives that are earned based on annual performance and long-term equity incentives that are intended to align the interests of our executives with those of our shareholders.

The allocation of our executive officers’ total direct compensation among base salary, annual cash incentives and long-term equity incentives is based on the Compensation Committee’s judgment, taking into consideration market practices reflected in previous and current peer group and retail surveys, together with a goal of providing a fair balance of risk and reward through an allocation that includes a reasonable mix of both fixed and variable components.

31

Elements of our Compensation Program

Our executive officer compensation program consists of the following elements: base salary, annual cash incentives, long-term equity incentives, and certain other benefits.

Base Salary

Base salaries fulfill the fixed portion of our compensation program. Base salaries are set annually by the Compensation Committee based on a variety of factors, including peer group information, a qualitative review of the executive’s performance and contributions to the Company during the year and over a number of years, the oversight and direct managerial skills of our executives, and changes in responsibilities, if any. After considering these factors, the Compensation Committee determined to not make any changes to our named executive officers’ base salaries in fiscal 2023 as shown below:

    

Fiscal 2022

    

Fiscal 2023

    

Name

Base Salary Rate ($)

Base Salary Rate ($)

% Change

David N. Makuen

725,000

725,000

 

0%

Heather Plutino

475,000

475,000

0%

Lisa A. Powell

478,000

478,000

 

0%

Vivek Bhargava (1)

355,000

n/a

Ivy D. Council (2)

339,900

339,900

0%

(1)Mr. Bhargava joined the Company effective February 13, 2023.
(2)Ms. Council retired from the Company effective September 29, 2023.

Annual Cash Incentives

We measure our overall financial performance based on a number of financial metrics, of which the most important are (1) Sales and (2) earnings before interest, taxes, depreciation, and amortization excluding incentive compensation (“EBITDA”). We believe the Company’s performance under these metrics provides an effective way to evaluate the Company’s success and operational performance in any given year, directly impacting our compensation decisions with respect to our executive officers. We believe that linking our annual cash incentives to these financial metrics, while providing long-term equity incentives earned based on stock price appreciation and other financial metrics (as described below), provides an effective and balanced approach to executive compensation aligned with the interests of our stockholders.

Our annual cash incentive program offers our executive officers the opportunity to earn cash awards based on the level of achievement of our budgeted goals for Sales and for EBITDA. Due to the importance of these financial metrics to the annual and long-term success of the Company, we strive to make the achievement of this goal each year a meaningful challenge to our executive officers. The budgeted Sales and EBITDA that represent our target goal for our annual cash incentive program take into account many key operating and financial factors, including:

Store selling square footage;
Comparable store sales;
Average sales per store;
Gross margin;
Store and distribution operating expenses as a percentage of sales; and
Corporate expenses.

32

Our CEO recommends a target award (as a percentage of base salary) for each executive officer (other than himself) based on the executive’s position within the Company and consideration of data provided by the Compensation Consultant, and the Compensation Committee determines the appropriate target award for each executive. For fiscal 2023, each executive officer’s target award (as a percentage of base salary) was as follows:

Name

    

Target Award

David N. Makuen

 

100

%

Heather Plutino

 

65

%

Lisa A. Powell

 

65

%

Ivy D. Council (1)

65

%

Vivek Bhargava(2)

50

%

(1)Ms. Council retired from the Company effective September 29, 2023.
(2)Mr. Bhargava joined the Company effective February 13, 2023.

The annual cash incentive program is directly linked to achievement of our budgeted Sales and EBITDA goals. Unusual and non-recurring items such as gains from sale-leasebacks, costs related to litigation, claim judgments or settlements and proxy contest expenses are excluded from both the budgeted and actual amounts used in the calculation of EBITDA. Since the calculation of cash incentives is based on performance versus budget, the exclusion of such items ensures that the inability to accurately budget such items does not positively or negatively influence cash incentives.

Named executive officers can earn between 0% to 200% of their target annual cash incentive based on the actual achievement of Sales and EBITDA as a percentage of Target Sales and Target EBITDA. For fiscal 2023, 25% of the annual cash incentive is based on Sales. If actual Sales were equal to 98% of target (threshold performance), then 25% of the target award would be earned, if actual Sales were equal to 100% of target, then 100% of the target award would be earned, and if actual Sales were equal to or greater than 102% of target (maximum performance), then 200% of the target award would be earned. The remaining 75% of annual cash incentive is based on EBITDA. If 2023 EBITDA were equal to 80% of target (threshold performance), then 50% of the target award would be earned, if actual EBITDA were equal to 100% of target, then 100% of the target award would be earned, and if actual EBITDA were equal to or greater than 155% of target (maximum performance), then 200% of the target award would be earned.

33

The graph below reflects the various potential payout levels at different levels of performance:

Graphic

The Compensation Committee believes it is imperative to structure our compensation program to provide a direct pay-for-performance linkage, such that our executives are rewarded (or held accountable, as the case may be) for annual performance relative to the Company’s goals, and not paying any cash bonuses in years when the Company does not meet certain minimum thresholds is consistent with this philosophy. Accordingly, if the Company performs well and meets or exceeds its goals for the year, the executives are rewarded, but if the Company does not meet its threshold performance target, then the executives do not earn annual incentives.

For fiscal 2023, the annual bonus plan included a sales component and an EBITDA component, adjusted for unusual items as described above. The sales component of the annual bonus plan was weighted 25% while the adjusted EBITDA component of the annual bonus plan was weighted 75%. The sales Target was $817.0 million and the adjusted EBITDA Target was $42.6 million. For fiscal 2023, actual sales were $747.9 million and adjusted EBITDA was $5.5 million, both of which were below the bonus payout threshold. As a result, the named executive officers did not earn any annual cash incentives.

Actual awards earned in each of the past three years by our named executive officers are shown in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table later in this proxy statement.

Long-Term Equity Incentives

Long-term equity incentive compensation awards are designed to encourage the creation of long-term value for our stockholders by increasing the retention of qualified key employees and aligning the interests of executive officers with our stockholders through the officers’ ownership of equity in the Company.

The dollar value of equity awards granted to our executive officers is within the discretion of the Compensation Committee and is based on recommendations made by our CEO (with respect to executives other than himself), which take into account the executive’s past performance, the executive’s position within the Company and an evaluation of other elements of compensation provided to the executive officer. The Compensation Committee also considers studies performed by the Compensation Consultant to determine the appropriate size of the equity-based awards.

We believe that grants of restricted stock and restricted stock units provide strong incentives for the creation of long-term stockholder value and provide significant retention value for the executives. In fiscal 2023, Mses. Plutino, Council and Powell and Messrs. Makuen, and Bhargava received long-term equity incentives with grant date values determined as a percentage of base pay, equal to 140% for Mr. Makuen, 65% for Mses. Plutino, Council and Powell, and 50% for Mr. Bhargava. The awards consisted of (1) time-based restricted shares that vest over three years based on continued future employment with the Company, and (2) performance-based restricted stock units that vest 100% if the Company’s Adjusted EBITDA excluding bonus and equity expense (Adjusted EBITDA ex. B&E) equals or exceeds $45.0 million in fiscal 2025. Recipients may receive up to 200% of the target units if Adjusted EBITDA ex. B&E equals or exceeds $54.0 million. The percent of target units to be awarded is based on a matrix, which provides for a maximum payout of 200% of target units. Target units of less than 100% may be awarded based on the matrix for Adjusted EBITDA ex. B&E values below $36.0 million but no target units will vest if Adjusted EBITDA ex. B&E is below $36.0 million. As previously

34

discussed, the grant levels were determined as one of several components designed to achieve the desired total direct compensation; however, they were not set to be at any specific level within our peer group. The vesting periods were determined based on consideration of peer group practices and discussions with the Compensation Consultant.

For more information regarding these long-term incentives granted to our named executive officers in fiscal 2022, please see “Grants of Plan-Based Awards in Fiscal 2023” and “Outstanding Equity Awards at 2023 Fiscal Year-End” and the related footnotes elsewhere in this proxy statement.

Other Benefits

Retirement. We maintain the Citi Trends, Inc. 401(k) Profit Sharing Plan, a tax-qualified, defined contribution employee benefit plan in which a substantial majority of our employees, including the named executive officers, are eligible to participate. We match 50% of employee contributions to the plan, up to a maximum of 4% of an employee’s total calendar year compensation (subject to IRS limits).

Perquisites. During fiscal 2023, each executive officer received life/long-term disability insurance coverage. We did not provide any other special benefits or perquisites to our executive officers. We believe these perquisites are reasonable in light of peer group practices. We provide health and welfare benefits to our executive officers on the same basis as we provide to all of our salaried employees.

Employment Agreements and Severance Agreements. We have entered into severance agreements with all of our named executive officers, which provide severance benefits in the event their employment is terminated by the Company without Cause (as defined in the severance agreement) or in connection with a Change in Control (as defined in the severance agreement) of the Company. Each severance agreement provides that if the Company terminates an executive’s employment without Cause or if the executive terminates his or her employment within twelve months of a Change in Control, provided that within such period the executive’s job duties have been materially diminished or compensation has been materially decreased, the Company will provide the executive with separation payments of twelve months’ base salary. The Company provides these involuntary termination severance benefits to protect individuals from events outside their control and to offer compensation packages similar to those commonly found in our market for competing executive talent. Furthermore, the Company provides these benefits to protect the Company against disruption in the event of a Change in Control. We believe that these severance agreements serve as an important retention element of the compensation package provided to these officers and acts to mitigate self-serving behavior during a potential Change in Control by providing a safety net to our executives in the event the employment relationship is severed. The potential severance benefits payable to our named executive officers are described in “Potential Payments upon Termination or Change in Control” elsewhere in this proxy statement.

Equity Grant Practices

The Company has a practice of generally making equity awards on pre-established dates. Annual equity awards are presented to the Compensation Committee for approval at a regularly scheduled Compensation Committee meeting, usually held in March of each year. Equity awards are also given to employees throughout the year as they are hired or promoted into positions eligible for those awards. We make decisions on equity grants based solely on our compensation and retention objectives and our established measurements of the value of these awards.

Stock Ownership Guidelines

As described above under “Stock Ownership Guidelines for Directors and Executives” in “Board of Directors and Committees of the Board of Directors,” our Chief Executive Officer is expected to own common stock having a value equal to three times his base salary, and other executive officers are expected to own common stock having a value equal to two times their base salary. Each executive and director is expected to satisfy his or her applicable ownership requirements within five years of the Effective Date, or such later date that he or she becomes subject to the Guidelines. Shares of common stock owned directly or indirectly, and shares of unvested time-based restricted stock and restricted stock units count toward meeting the Guidelines. Until they satisfy the Guidelines, executives and directors must retain 75% of their shares of common stock received from the Company as compensation (except for shares withheld by the Company to satisfy withholding taxes).

35

Compensation Recoupment Policy

On December 1, 2023, our board of directors adopted the Citi Trends, Inc. Compensation Recoupment Policy (the “Clawback Policy”). Pursuant to the Clawback Policy, in the event of a restatement of the Company’s financial results as a result of material non-compliance with financial reporting requirements, the Company will recover all erroneously awarded incentive-based compensation received by current and former executive officers of the Company during the three completed fiscal years immediately preceding the date of the accounting that the Company is required to prepare the accounting restatement, as may be adjusted for any change in the Company’s fiscal year. Erroneously awarded incentive-based compensation is defined as the amount of such compensation that exceeds the amount of incentive-based compensation that would have otherwise have been received had it been determined based on the restated amounts.

The Clawback Policy applies in addition to any right of recoupment against the Company’s Chief Executive Officer and Chief Financial Officer pursuant to the Sarbanes-Oxley Act of 2002. The policy does not apply in any situation where a restatement is not the result of material non-compliance with financial reporting requirements, such as any restatement due to a change in applicable accounting rules, standards or interpretations, a change in segment designations or the discontinuance of an operation.

Anti-Hedging Policy; Policy on Pledging

We have an insider trading policy that sets forth guidelines and restrictions applicable to transactions involving our stock by our directors, officers and employees. Among other things, this policy prohibits our directors, officers and employees from engaging in purchases or sales of puts, calls, options or other derivative securities based on the Company’s securities. These hedging transactions are prohibited because they would allow directors, officers and employees to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, their interests and the interests of the Company and its stockholders may be misaligned and may signal a message to the trading market that may not be in the best interests of the Company and its stockholders at the time it is conveyed. The insider trading policy also prohibits directors and officers from engaging in short sales of the Company’s securities.

Our insider trading policy, which is available on our corporate website at http://www.cititrends.com, prohibits any pledging of the Company’s securities as collateral for a loan by a director or executive officer.

Tax and Accounting Considerations

Section 162(m) of the Internal Revenue Code generally denies a corporate tax deduction for annual compensation exceeding $1.0 million paid to the Company’s named executive officers.

In connection with making decisions on executive compensation, the Compensation Committee takes into consideration the provisions of Section 162(m), with the intent to maximize the effectiveness of our compensation programs, while also maintaining flexibility and reserving the right to award non-deductible compensation as it deems appropriate.

36

Compensation Tables

Summary Compensation Table

The following table sets forth the cash and other compensation that we paid to our named executive officers, or that was otherwise earned by our named executive officers, for their services in all capacities during fiscal years 2023, 2022 and 2021. Fiscal 2023 was comprised of 53 weeks, while 2022 and 2021 were each comprised of 52 weeks.

    

    

    

    

    

Non-Equity

    

    

Stock

Incentive Plan

All Other

Salary

Bonus

Awards

Compensation

Compensation

Total

Name and Principal Position

Year

($)

($)

($) (1)

 

($) (2)

($) (3)

($)

David N. Makuen

 

2023

 

725,000

 

 

1,015,008

 

 

11,571

 

1,751,579

Chief Executive Officer

 

2022

 

712,692

 

 

1,015,002

 

 

2,322

 

1,730,016

2021

683,462

 

 

924,752

 

1,370,000

 

1,367

 

2,979,581

Heather Plutino

 

2023

 

475,000

308,762

9,203

792,965

Executive Vice President and Chief Financial Officer

 

2022

 

228,366

75,000

308,772

382

612,520

Lisa A. Powell

 

2023

 

478,000

327,101

12,391

817,492

Executive Vice President and Chief

 

2022

 

471,846

 

 

310,703

 

 

8,153

 

790,702

Merchandising Officer

2021

456,769

297,722

595,400

7,231

 

1,357,122

Vivek Bhargava (4)

 

2023

 

300,385

 

45,000

 

205,053

4,770

555,208

Senior Vice President of Supply Chain

 

Ivy D. Council (5)

2023

289,569

50,000

220,950

11,274

571,793

Executive Vice President of Human

2022

336,854

220,945

12,774

570,573

Resources and Chief Compliance Officer

2021

329,231

214,528

429,000

10,517

983,276

Charles J. Hynes (6)

 

2023

 

19,303

 

320,321

(7)

339,624

Former Senior Vice President of Supply Chain

 

2022

 

294,523

 

 

148,170

 

 

7,755

450,448

(1)Reflects the grant date fair value of stock awards granted to the named executive officers, computed in accordance with FASB ASC Topic 718. In fiscal 2023, each of the named executive officers received grants of time-based restricted stock and performance-based restricted stock units (RSUs) tied to achievement of Adjusted EBITDA ex. B&E goals. The grant date fair values of the time-based restricted stock awards and performance-based RSUs are based on the closing price of the Company's common stock on the date of grant (and the probable outcome of performance conditions, in the case of performance-based RSUs). The aggregate grant date fair value of the performance based RSUs granted to Messrs. Makuen and Bhargava and Mses. Plutino, Powell and Council in 2023 would be higher by $812,008, $88,762, $154,384, $155,349 and $110,470 respectively, assuming achievement of the performance conditions at the highest level (rather than the target level).
(2)Reflects amounts earned under our annual cash incentive program.
(3)All Other Compensation in 2023 includes amounts for each officer related to life and long-term disability insurance coverage, vehicle allowances and the Company’s 401(k) matching contributions, to the extent the officers participate in such programs.
(4)Mr. Bhargava joined the Company effective February 13, 2023.
(5)Ms. Council retired from the Company effective September 29, 2023.
(6)Mr. Hynes left the Company effective February 10, 2023.
(7)Amount includes severance payments in the amount of $319,000, representing 12 months of base salary and the full cost to maintain the same level of group health insurance maintained by Mr. Hynes as of his separation for 12 months.


CEO Pay Ratio

As required by Item 402(u) of Regulation S-K under the Exchange Act, we are providing the following information regarding the ratio of the annual total compensation of our median employee to the annual total compensation of David N. Makuen, our Chief Executive Officer. The pay ratio figures below are considered to be a reasonable estimate, calculated in a manner that is consistent with the requirements of Item 402(u) of Regulation S-K.

For the fiscal year ended February 3, 2024, annual total compensation of the employee who represents our median compensated employee (other than our CEO) was $24,960, and annual total compensation of our CEO was $1,751,579. Accordingly, for fiscal 2023, the ratio of CEO pay to median employee pay (other than the CEO) was 70:1.

37

Determining the Median Employee

Employee Population: The Company used our employee population data as of February 3, 2024 as the reference date for identifying our median employee. As of such date, our employee population consisted of 4,759 individuals, over 95% of whom were hourly employees, and all of whom were located in the United States. For purposes of the pay ratio calculation our employee population consists of all full and part-time employees at all locations.

Methodology for Determining Our Median Employee, Compensation Measure and Annual Total Compensation of Median Employee: In identifying the median employee from our employee population, we chose gross pay for the final payroll in fiscal 2023 as our consistently applied compensation measure. We then annualized the compensation of all full-time and part-time permanent employees who were employed in said pay period (ended February 3, 2024). We did not make any cost-of-living adjustments. With respect to the annual total compensation of the median employee, we calculated such employee’s compensation for fiscal 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. The median employee’s compensation includes items shown in the Summary Compensation Table above, primarily base pay, bonus, company 401(k) contributions and other compensation.

Grants of Plan-Based Awards in Fiscal 2023

The following table sets forth the individual grants of awards to each of our named executive officers during fiscal 2023:

All Other

Stock Awards:

Grant Date

Estimated Future Payouts Under

Estimated Future Payouts Under

Number of

Fair Value

Non-Equity Incentive Plan Awards (1)

Equity Incentive Plan Awards (2)

Shares of

of Stock and

    

Approval

Grant

    

Threshold

    

Target

    

Maximum

    

Threshold

    

Target

    

Maximum

    

Stock or Units

    

Option Awards

Name

Date

Date

($)

($)

($)

(#)

(#)

(#)

(#) (3)

($) (4)

David N. Makuen

 

 

362,500

725,000

 

1,450,000

 

 

6/8/23

6/9/23

 

 

 

 

25,249

50,498

 

100,996

 

812,008

 

5/5/23

5/5/23

 

 

 

 

 

 

12,500

203,000

Heather Plutino

 

 

154,375

308,750

 

617,500

 

 

6/8/23

6/9/23

 

 

 

 

4,801

9,601

 

19,202

 

154,384

 

5/5/23

5/5/23

 

 

 

 

 

 

9,506

154,377

Lisa A. Powell

155,350

310,700

 

621,400

6/8/23

6/9/23

4,831

9,661

19,322

155,349

5/5/23

5/5/23

9,566

155,352

6/12/23

6/12/23

1,000

16,400

Vivek Bhargava (5)

 

 

88,750

177,500

355,000

 

 

 

 

 

6/8/23

6/9/23

 

 

 

2,760

 

5,520

 

11,040

 

88,762

5/5/23

5/5/23

 

5,465

88,752

 

2/13/23

3/30/23

 

 

 

 

 

1,500

27,540

Ivy D. Council (6)

 

110,468

 

220,935

 

441,870

 

 

 

 

6/8/23

6/9/23

 

 

 

3,435

 

6,870

 

13,740

 

110,470

5/5/23

5/5/23

 

 

 

 

 

6,803

110,481

Charles J. Hynes (7)

 

 

 

(1)Reflects threshold, target and maximum payout values pursuant to our annual cash incentive program for fiscal 2023 performance. For more information on our annual cash incentive program, see the description contained in the “Compensation Discussion and Analysis” elsewhere in this proxy statement. In each case, the actual amount earned pursuant to our annual cash incentive program by each named executive officer is reported under the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table.
(2)Reflects threshold, target and maximum payout levels of performance-based restricted stock units that vest 100% if the Company's Adjusted EBITDA ex. B&E equals or exceeds $45.0 million in fiscal 2025. Recipients may receive up to 200% of the target units if Adjusted EBITDA ex. B&E equals or exceeds $54.0 million. The percent of target units to be awarded is based on a matrix, which provides for a maximum payout of 200% of target units. Target units of less than 100% may be awarded based on the matrix for Adjusted EBITDA ex. B&E values below $45.0 million but no target units will vest if Adjusted EBITDA ex. B&E is below $36.0 million.
(3)Reflects awards of time-based restricted stock under the 2021 Incentive Plan, which vest in three equal installments on the first three anniversaries of the grant date.
(4)Reflects the grant-date fair value of stock awards computed in accordance with FASB ASC Topic 718. The grant date fair value of time-based grants of restricted stock and performance-based restricted stock units tied to Adjusted EBIT ex. B&E is based on the closing price of the Company’s common stock on the date of grant and the probable outcome of performance conditions.
(5)Mr. Bhargava joined the Company effective February 13, 2023.
(6)Ms. Council retired from the Company effective September 29, 2023.
(7)Mr. Hynes left the Company effective February 10, 2023.

38

Employment Agreements

See “Potential Payments Upon Termination or Change in Control” for information concerning severance agreements and employment non-compete, non-solicit and confidentiality agreements between the Company and each of the named executive officers.

Outstanding Equity Awards at 2023 Fiscal Year-End

    

    

Market Value of

    

Equity Incentive Plan Awards:

    

Equity Incentive Plan Awards:

Number of Shares

Shares or Units of

Number of Unearned Shares,

Market or Payout Value of

or Units of Stock

Stock That Have Not

Units or Other Rights That

Unearned Shares, Units or Other

That Have Not Vested

Vested

Have Not Vested

Rights That Have Not Vested

(#)

($) (13)

(#)

($) (13)

David N. Makuen

 

12,500

(2)

349,625

 

50,498

(7)

1,412,429

4,080

(5)

114,118

24,480

(8)

684,706

913

(6)

25,537

8,211

(9)

229,662

Heather Plutino

 

9,506

(2)

265,883

9,601

(7)

268,540

4,258

(4)

119,096

6,388

(8)

178,672

Lisa A. Powell

 

1,000

(1)

27,970

 

9,661

(7)

270,218

9,566

(2)

267,561

4,683

(8)

130,984

3,122

(5)

87,322

1,762

(9)

49,283

588

(6)

16,446

Vivek Bhargava (10)

5,465

(2)

152,856

5,520

(7)

154,394

1,500

(3)

41,955

Ivy D. Council (11)

 

 

Charles J. Hynes (12)

 

 

(1)Restricted shares were awarded on June 12, 2023 under the 2021 Incentive Plan and vest in three equal annual installments beginning June 12, 2024.

(2)Restricted shares were awarded on May 5, 2023 under the 2021 Incentive Plan and vest in three equal annual installments beginning May 5, 2024.

(3)Restricted shares were awarded on March 30, 2023 under the 2021 Incentive Plan and vest in three equal annual installments beginning February 13, 2024.

(4)Restricted shares were awarded on June 27, 2022 under the 2021 Incentive Plan and vest in three equal annual installments beginning June 27, 2023.

(5)Restricted shares were awarded on March 20, 2022 under the 2021 Incentive Plan and vest in three equal annual installments beginning March 20, 2023.

(6)Restricted shares were awarded on March 20, 2021 under the 2021 Incentive Plan and vest in three equal annual installments beginning March 20, 2022.

(7)Reflects target number of performance based restricted stock units awarded during fiscal 2023 under the Citi Trends, Inc. 2021 Incentive Plan. These units are payable in shares of Common Stock with the number of shares based upon the achievement of various levels of Adjusted EBITDA ex. B&E for fiscal 2025. The number of units earned and vested will equal 100% of the target units upon the achievement of Adjusted EBITDA ex. B&E of $45.0 million. Recipients may receive up to 200% of the target units upon achievement of Adjusted EBITDA ex. B&E of $54.0 million based on a sliding scale which also provides for vesting of less than 100% of target units based on lower levels of Adjusted EBITDA ex. B&E. No units will be earned or vest for an Adjusted EBITDA ex. B&E level below $36.0 million.

(8)Reflects target number of performance based restricted stock units awarded during fiscal 2022 under the Citi Trends, Inc. 2021 Incentive Plan. These units are payable in shares of Common Stock with the number of shares based upon the achievement of various levels of Adjusted EBIT for fiscal 2024. The number of units earned and vested will equal 100% of the target units upon the achievement of Adjusted EBIT of $100.0 million. Recipients may receive up to 200% of the target units upon achievement of Adjusted EBIT of $136.0 million based on a sliding scale which also provides for vesting of less than 100% of target units based on lower levels of Adjusted EBIT. No units will be earned or vest for an Adjusted EBIT level below $91.0 million.

(9)Reflects target number of performance based restricted stock units awarded during fiscal 2021 under the Citi Trends, Inc. 2012 Incentive Plan. These units are payable in shares of Common Stock with the number of shares based upon the achievement of various levels of Adjusted EBIT for fiscal 2023. The number of units earned and vested equal 100% of the target units upon the achievement of Adjusted EBIT of $62.6 million. Recipients may receive up to 200% of the target units upon achievement of Adjusted EBIT of $85.1 million based on a sliding scale which also provides for vesting of less than 100% of target units based on lower levels of Adjusted EBIT. No units are earned or vest for an Adjusted EBIT level below $57.0 million. The performance-based restricted stock units awarded during fiscal 2021 did not vest, as the Company’s Adjusted EBIT in fiscal 2023 was below the minimum target level for vesting.

(10)Mr. Bhargava joined the Company effective February 13, 2023.

(11)Ms. Council retired from the Company effective September 29, 2023.

(12)Mr. Hynes left the Company effective February 10, 2023.

(13)Market value is based on the closing stock price of $27.97 on February 2, 2024, the last trading day of our 2023 fiscal year.

39

Option Exercises and Stock Vested in Fiscal 2023

The following table sets forth information concerning each vesting of restricted stock during the last completed fiscal year for each of the named executive officers.

    

Number of 

    

Shares 

Acquired on

Value Realized

 Vesting 

on Vesting

Name

(#)

($)(1)

David N. Makuen

7,834

182,610

Heather Plutino

2,129

 

39,323

Lisa A. Powell

5,403

125,944

Vivek Bhargava (2)

Ivy D. Council (3)

7,035

160,552

Charles J. Hynes (4)

(1)Reflects the fair market value of the shares on the vesting date.
(2)Mr. Bhargava joined the Company effective February 13, 2023.
(3)Ms. Council retired from the Company effective September 29, 2023.
(4)Mr. Hynes left the Company effective February 10, 2023.

40

Potential Payments Upon Termination or Change in Control

As discussed in the “Other Benefits” section of the “Compensation Discussion and Analysis,” the Company has entered into severance agreements with each of the named executive officers. Each severance agreement provides that if the Company terminates an executive’s employment without Cause (as defined in the severance agreement) or if the executive terminates his or her employment within twelve months of a Change in Control (as defined in the severance agreement), provided that within such period the executive’s job duties have been materially diminished or compensation has been materially decreased (a “Qualifying Termination”), the Company will provide the executive with separation payments of twelve months base salary, and will pay the executive the full monthly cost, less applicable tax withholdings, to maintain the same level of group health insurance maintained by the executive as of his separation from service for twelve months. Mr. Makuen’s severance agreement also provides him with the severance benefits noted above if he terminates his employment in the event his job duties have been materially diminished or his compensation has been materially decreased (regardless of whether a Change in Control has occurred).

“Cause” generally means (i) commission of an act of fraud or dishonesty; (ii) conviction of a felony or a crime involving embezzlement, conversion of property or moral turpitude; (iii) engaging in willful or reckless misconduct or gross negligence in connection with Company property or activities which adversely affects the Company; (iv) material breach of any obligations as an employee or stockholder as set forth in certain Company policies; or (v) failure or refusal to perform any material duty or responsibility or a breach of fiduciary obligations to the Company. Pursuant to the terms of our 2021 Incentive Plan and/or the applicable award agreements, all outstanding options and unvested time-based restricted stock will become 100% vested upon the occurrence of a change in control. The following table summarizes the approximate value of the payments and benefits that each of our named executive officers would receive if the Company had terminated such executive’s employment at the close of business on February 3, 2024 or if a change in control of the Company had occurred as of such date. The amounts shown in the table exclude distributions under our 401(k)-retirement plan that are generally available to all of our salaried employees.

Pursuant to the applicable award agreements, all outstanding time-based restricted stock will become 100% vested upon the occurrence of a change in control. The following table summarizes the approximate value of the payments and benefits that each of our named executive officers would receive if the Company had terminated such executive’s employment at the close of business on February 3, 2024, or if a change in control of the Company had occurred as of such date. The amounts shown in the table exclude distributions under our 401(k) retirement plan that are generally available to all of our salaried employees.

As noted above, Mr. Hynes left the Company effective February 10, 2023. Pursuant to his severance agreement, Mr. Hynes received severance payments in the amount of $319,000, representing 12 months of base salary and the full cost to maintain the same level of group health insurance maintained by Mr. Hynes as of his separation for 12 months. Ms. Council retired from the Company effective September 29, 2023, and did not receive any severance payments or benefits in connection with her retirement.

41

    

David N.

    

Heather

Lisa A.

    

Vivek

Makuen

Plutino

Powell

Bhargava (1)

Termination By Company Without Cause (Not in Connection with a Change in Control)

 

  

 

  

  

 

  

Cash Severance (2)

$

725,000

(4)

$

475,000

$

478,000

$

355,000

COBRA Payments

 

21,881

(4)

 

14,020

 

15,771

 

Total

$

746,881

$

489,020

$

493,771

$

355,000

Termination By Company Without Cause; Qualifying Termination by Executive (In Connection with a Change in Control)

 

  

 

  

 

  

 

  

Cash Severance (2)

 

725,000

(4)

$

475,000

$

478,000

$

355,000

COBRA Payments

 

21,881

(4)

 

14,020

 

15,771

 

Value of Accelerated Unvested Restricted Stock (3)

 

2,816,076

$

832,191

$

849,785

 

349,205

Total

 

3,562,957

$

1,321,211

$

1,343,556

$

704,205

Change in Control of the Company (Regardless of Termination of Employment)

 

  

 

  

 

  

 

  

Value of Accelerated Unvested Restricted Stock (3)

 

2,816,076

$

832,191

$

849,785

 

349,205

Total

 

2,816,076

$

832,191

$

849,785

$

349,205

(1)Mr. Bhargava joined the Company effective February 13, 2023.
(2)Reflects cash severance equal to 12 months of the executive’s fiscal 2023 annual salary.
(3)Reflects the value of time-based and performance-based restricted stock awards using the closing stock price of the Company's common stock on February 2, 2024 ($27.97).
(4)In addition to a termination by the Company without Cause, Mr. Makuen would be entitled to these benefits if he terminates his employment in the event his job duties have been materially diminished or his compensation has been materially decreased (regardless of whether a Change in Control has occurred).

42

Pay Versus Performance

The following table shows the total compensation for our Named Executive Officers (NEOs) for the past three fiscal years as set forth in the Summary Compensation Table (SCT), the “compensation actually paid” (CAP) to our Principal Executive Officers (PEOs), and, on an average basis, our other NEOs (in each case, as determined under SEC rules), our Total Shareholder Return (TSR), the Dow Jones US Specialty Retailers Index, our net income, and our Company Selected Measure, Adjusted EBITDA ex. B&E.

Value ($) of Initial Fixed $100

SCT ($) for

CAP ($) to

SCT ($) for

CAP ($) to

Average

Average

Investment Based On:

Adjusted

Fiscal

    

Mr. Makuen

Mr. Makuen

    

Mr. Sachse

Mr. Sachse

SCT ($)

CAP ($)

Citi Trends

Peer Group

Net Income

EBITDA ex. B&E

Year

(PEO 1)

(PEO 1)

(PEO 2)

(PEO 2)

for NEOs

to NEOs

TSR

TSR

($M)

($M)

(a)

 

(b)1

(c)2

(d)1

(e)2

(f)3

(g)2

(h)4

(i)4

(j)

(k)5

2023

 

1,751,579

1,191,613

615,206

513,982

116.11

159.02

(12.0)

5.6

2022

 

1,730,016

(331,897)

483,470

122,735

135.73

135.59

58.9

35.6

2021

 

2,979,581

2,882,746

1,140,197

1,200,526

210.06

142.18

62.2

123.7

2020

2,995,723

3,438,376

682,576

1,719,020

693,908

949,579

254.38

140.92

24.0

66.6

(1)

The dollar amounts reported in columns (b) and (d) are the amounts of total compensation reported for Mr. Makuen (Chief Executive Officer and Principal Executive Officer since March 9th, 2020) and Mr. Sachse (Interim Chief Executive Officer until March 9th, 2020) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to our Summary Compensation Table on page 37.

(2)

The dollar amounts reported in column (c), (e) and (g) represent the amount of “compensation actually paid,” as computed in accordance with SEC rules. “Compensation actually paid” does not necessarily represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a value calculated under applicable SEC rules. We do not have a defined benefit plan so no adjustment for pension benefits is included in the table below. Similarly, no adjustment is made for dividends as dividends are factored into the fair value of the award. The following table details these adjustments:

All table values in $

    

    

Grant Date

Year End

Change in

Change in

Change in

Change in Value

Fiscal

Value of

Value of

Value of

Value of

Value of

of Awards Granted

Total Equity

Year

Executives

SCT

New Awards

New Awards

Prior Awards

Vested Awards

Forfeited Awards

and Vested in '23