UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | |||
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SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 | |||
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Delta Apparel, Inc. | |||
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Delta Apparel, Inc. 322 S. Main Street Greenville, South Carolina 29601 Telephone (864) 232-5200 |
Delta Apparel, Inc. 322 S. Main Street Greenville, South Carolina 29601 Telephone (864) 232-5200 |
1. | Election of the seven nominees named in the Proxy Statement to the Company's Board of Directors to serve until the Company's next annual meeting of shareholders or until their successors are duly elected and qualified; |
2. | Advisory vote on the compensation of the Company's named executive officers; |
3. | Re-Approval of the Delta Apparel, Inc. 2010 Stock Plan for purposes of complying with Section 162(m) of the Internal Revenue Code of 1986; |
4. | Ratification of the appointment of KPMG LLP to serve as the Company's independent registered public accounting firm for the 2015 fiscal year; and |
5. | Action upon such other matters, if any, as may properly come before the meeting. |
Option Exercises and Stock Vested | |
1. | The election of the following seven nominees to the Board of Directors to serve until the Company's next annual meeting of shareholders or until their successors are duly elected and qualified; |
Nominee | Director Since | |
James A. Cochran | 2008 | |
Sam P. Cortez | 2010 | |
Dr. Elizabeth J. Gatewood | 2007 | |
Dr. G. Jay Gogue | 2010 | |
Robert W. Humphreys | 1999 | |
Suzanne B. Rudy | 2012 | |
Robert E. Staton, Sr. | 2009 |
2. | An advisory vote on the compensation of our named executive officers as disclosed in this Proxy Statement; |
3. | The re-approval of the Delta Apparel, Inc. 2010 Stock Plan for purposes of complying with Section 162(m) of the Internal Revenue Code of 1986; and |
4. | Ratification of the appointment of KPMG LLP to serve as our independent registered public accounting firm for our 2015 fiscal year. |
1. | FOR each of the seven director nominees to the Board ("Proposal No. 1"); |
2. | FOR the approval of the compensation of our named executive officers ("Proposal No. 2"); |
3. | FOR re-approval of the Delta Apparel, Inc. 2010 Stock Plan ("Proposal No. 3"); and |
4. | FOR ratification of the appointment of KPMG LLP to serve as our independent registered public accounting firm for our 2015 fiscal year ("Proposal No. 4"). |
1. | By internet at www.proxyvote.com; |
2. | By toll-free telephone at 1-800-690-6903; |
3. | By completing and mailing your proxy card; or |
4. | By written ballot at the Annual Meeting. |
1. | Entering a new vote by internet or telephone; |
2. | Returning a later-dated proxy card; |
3. | Sending written notice of revocation to Justin M. Grow, Secretary, at the Company's address of record, which is 322 S. Main Street, Greenville, South Carolina 29601; or |
4. | Completing a written ballot at the Annual Meeting. |
Proposal No. 3: | Re-approval of the Delta Apparel, Inc. 2010 Stock Plan for purposes of complying with Section 162(m) of the Internal Revenue Code of 1986 requires that the number of votes cast "FOR" exceeds the number of votes cast against this proposal. Votes cast exclude broker non-votes and abstentions, and therefore broker non-votes and abstentions will have no effect on the re-approval of the Delta Apparel, Inc. 2010 Stock Plan. |
James A. Cochran (Independent) | |
Director Since: 2008 Age: 67 Committees: Audit Compensation | Mr. Cochran serves as Chief Financial Officer of Amendia, Inc., a manufacturer of medical devices for spinal surgery, as well as Vivex Biomedical, Inc., which distributes advanced bio-materials for regenerative medicine. Prior to accepting his current position, Mr. Cochran served as Chief Financial Officer for Greenway Medical Technologies, Inc., a provider of software solutions for healthcare providers, beginning in 2009. Previously, he was Senior Vice President responsible for Investor Relations and Corporate Strategies of TurboChef Technologies, Inc., a provider of equipment, technology and services for high-speed food preparation, and served in that capacity from 2007 until 2009. From 2003 until 2007, Mr. Cochran also served as Senior Vice President and Chief Financial Officer of TurboChef Technologies, Inc. He is a Certified Public Accountant. Mr. Cochran's broad and diverse professional knowledge base, including public accounting, securities offerings, mergers and acquisitions, investor relations, corporate strategy and financial management in public and private enterprises, provides the Board with valuable leadership and insight into these disciplines. |
Sam P. Cortez (Independent) | |
Director Since: 2010 Age: 51 Committees: Audit Compensation | Mr. Cortez has been the principal of KCL Development LLC, a provider of corporate finance and advisory services, since 2003. Prior to 2003, he was employed in the investment banking industry, including Lehman Brothers, Donaldson Lufkin & Jenrette, Alex Brown & Sons, and Morgan Stanley International. Mr. Cortez serves as a director of Hancock Fabrics, Inc. and is chairman of its Management Review and Compensation Committee and is a member of its Audit and Governance Committees. He was formerly a director of World Waste Technologies, Inc., a development stage technology company, from 2005 to 2009, and served as chairman of its Audit Committee and as a member of its Compensation and Finance Committees. Mr. Cortez's experience includes mergers and acquisitions, strategy development, financing transactions and spin-offs. In addition to investment banking activities, he has served on boards and committees of private, public and not-for-profit organizations. Mr. Cortez is a Board Leadership Fellow, as designated by the National Association of Corporate Directors. His intimate knowledge of financial markets and strategic transactions brings a depth of knowledge in these areas to our Board. |
Dr. Elizabeth J. Gatewood (Independent) | |
Director Since: 2007 Age: 70 Committees: Audit Corporate Governance | Dr. Gatewood is the Associate Director of the Wake Forest University Center for Enterprise Research and Education, a position to which she was appointed in 2010. From 2008 to 2012, she served as Director of the Wake Forest University NSF Partners for Innovation Program. From 2004 until July 2010, she served as Director of the Office of Entrepreneurship & Liberal Arts at Wake Forest University. Previously, she served as the Jack M. Gill Chair of Entrepreneurship and Director of The Johnson Center for Entrepreneurship & Innovation at Indiana University from 1998 to 2004. Prior to her appointment at Indiana University, Dr. Gatewood was the Executive Director of the Gulf Coast Small Business Development Center Network at the University of Houston. Dr. Gatewood's academic background includes advanced business degrees in finance and business strategy. Her career has focused on entrepreneurship, growth strategies and small business education and development. She has extensive exposure to business development and models in international developing economies. Dr. Gatewood's perspectives on strategy, development and entrepreneurship bring unique insight to Board discussions. |
Dr. G. Jay Gogue (Independent) | |
Director Since: 2010 Age: 67 Committees: Audit | Dr. Gogue is President of Auburn University, a position he has held since 2007. He served as President of the University of Houston and Chancellor of the University of Houston System from 2003 to 2007. Prior to serving at the University of Houston, he was President of New Mexico State University from 2000 to 2003 and Provost of Utah State University from 1995 to 2000. Dr. Gogue began his career in higher education administration in 1986 as Associate Director of the Office of University Research at Clemson University, where he also served as Vice President for research and Vice President and Vice Provost for agriculture and natural resources. Dr. Gogue has served as an accreditation reviewer for the Pacific Northwest Association of Schools and Colleges, Commission on Colleges. His leadership of large educational institutions has involved development of strategic plans, operating under difficult budgetary constraints and balancing the needs of diverse stakeholders including students, faculty, alumni and state government. Dr. Gogue's wealth of experience managing large and complex organizations provides our Board with valuable input and expertise. |
Robert W. Humphreys | |
Director Since: 1999 Age: 57 Committees: None | Mr. Humphreys is the Chairman and Chief Executive Officer of Delta Apparel, Inc. He was named Chairman of our Board in June 2009. Mr. Humphreys previously served Delta Apparel, Inc. as President and Chief Executive Officer for more than 10 years. From April 1999 until December 1999, Mr. Humphreys served as President of the Delta Apparel division of Delta Woodside Industries, Inc. In 1998, he was named Vice President of Finance and Assistant Secretary of Delta Woodside Industries, Inc. and served in that capacity until November 1999. From 1987 to May 1998, Mr. Humphreys served as President of Stevcoknit Fabrics Company, the former knit fabrics division of a subsidiary of Delta Woodside Industries, Inc. Mr. Humphreys has over 26 years of experience in the textile and apparel industry, including senior leadership roles in operations and finance. Under his direction the Company has grown from a commodity t-shirt manufacturer to a diverse, branded apparel company. Mr. Humphreys' long history with the Company, combined with his leadership skills and operating experience, makes him particularly well-suited to be our Chairman and serve on our Board. |
Suzanne B. Rudy (Independent) | |
Director Since: 2012 Age: 59 Committees: Audit | Ms. Rudy is Vice President, Corporate Treasurer, Compliance Officer and Assistant Secretary of RF Micro Devices, Inc. (NASDAQ:RFMD), a publicly traded company and leading supplier of semiconductor solutions for the wireless communications market. In addition to her treasury and compliance duties, Ms. Rudy is a director for all twelve subsidiaries of RFMD. Prior to joining RF Micro Devices, Inc. in 1999, Ms. Rudy was the Controller for Precision Fabrics Group, Inc., a textile spin-off of the Fortune 500 Company, Burlington Industries. In addition, she spent six years as a CPA and Manager for BDO Seidman, LLP, an international CPA firm. From 2008 through 2010, she served as a director and chaired the Audit, Assets and Liability Committee of First National Bank United Corporation and also served on its Investment Committee. Ms. Rudy currently serves on the Board of Visitors for Guilford College and is a Board Leadership Fellow, as designated by the National Association of Corporate Directors. Ms. Rudy brings to our Board extensive expertise in public company financial, compliance and related strategic matters. |
Robert E. Staton, Sr. (Lead Independent Director) | |
Director Since: 2009 Age: 68 Committees: Corporate Governance Compensation | Mr. Staton currently provides business development consulting services to Coleman Lew + Associates, an executive search and leadership development firm. Mr. Staton previously served as Chief of Staff for Presbyterian College from 2011 through 2013, and as Executive Vice President of External Relations for Presbyterian College from 2006 until July 2011. In 2002, Mr. Staton was named Chairman of the Board of Carolina National Bank until its acquisition by First National Bank of the South in 2008. From 1986 until 2002, Mr. Staton served as Chairman and Chief Executive Officer of Colonial Life, a publicly traded company primarily in the business of selling and servicing voluntary benefits programs. Mr. Staton served as a director of First National Bankshares and was a director of First National Bank of the South from 2008 until July 2010. Mr. Staton holds a Juris Doctor degree from the University of South Carolina School of Law. Mr. Staton has extensive professional experience in legal matters and senior executive positions with financial companies, as well as service as the chairman of a public company. Additionally, he has served on numerous boards and committees of public, private and civic, educational and other organizations. The knowledge and insight gained from this diverse experience contribute greatly to the Board. |
2014 | 2014T | 2013 | ||||||||||
Audit Fees | $ | 719,373 | $ | 118,575 | $ | 711,590 | ||||||
Audit-Related Fees | 49,500 | — | 7,500 | |||||||||
Tax Fees | 24,530 | — | — | |||||||||
All Other Fees | — | — | — | |||||||||
Total | $ | 793,403 | (1) | $ | 118,575 | (2) | $ | 719,090 | (3) |
(1) | All fees for the fiscal year ended September 27, 2014, were owed to KPMG. |
(2) | All fees for the Transition Period were owed to KPMG |
(3) | All fees for the fiscal year ended June 29, 2013 were owed to E&Y. |
1. | The Audit Committee appointed KPMG as the Company's independent registered public accounting firm for fiscal year 2014 and its approximately three-month Transition Period ended September 28, 2013. |
2. | The Audit Committee has reviewed and discussed the audited financial statements for the year ended September 27, 2014, and the Transition Period ended September 28, 2013, as well as the internal controls over financial reporting as of September 27, 2014, with the Company’s management. |
3. | The Audit Committee has discussed with KPMG the matters required to be discussed under Public Company Accounting Oversight Board auditing standards governing communications with audit committees. |
4. | The Audit Committee has received the written disclosures and the letter from KPMG required pursuant to Public Company Accounting Oversight Board requirements and has discussed with KPMG its independence from the Company. |
Fiscal Year 2014 & Transition Period | Fiscal Year 2015 | |||||||
Director Name | Audit | Compensation | Governance | Audit | Compensation | Governance | ||
James A. Cochran | X | X | X | X | ||||
Sam P. Cortez | X | X | C | X | ||||
Dr. Elizabeth J. Gatewood | X | X | X | X | ||||
Dr. G. Jay Gogue | C | C | ||||||
David T. Peterson(1) | C | X | ||||||
Suzanne B. Rudy | X | X | X | |||||
Robert E. Staton, Sr. | X | C | X | C | ||||
Robert W. Humphreys | ||||||||
C - Committee Chairperson | ||||||||
X - Committee Member |
(1) | Mr. Peterson will not stand for re-election as a director at the Annual Meeting. |
a) | The full Board oversees strategic, financial and operational risks and exposures associated with our annual business plans and other current matters that may present material risk to the Company’s operations, strategies, prospects, and reputation. |
b) | Our Audit Committee regularly reviews and oversees the risks associated with financial matters, particularly financial reporting, tax, accounting, disclosure, internal control over financial reporting, financial policies, credit and liquidity matters, compliance with legal and regulatory matters, including environmental matters, and the Company's related risk management policies. |
c) | Our Compensation Committee oversees risks associated with attraction and retention of executive talent, management development and compensation philosophy and programs, including a periodic review of compensation programs to ensure that they do not encourage excessive risk-taking. |
d) | Our Corporate Governance Committee oversees risks associated with governance matters, including our Ethics Policy Statement, succession planning for our directors, Chief Executive Officer and other named executive officers, and the structure and performance of the Board and its committees. |
Title | Stock Ownership Requirement |
Chief Executive Officer | 4 times annual base salary |
Chief Financial Officer | 2 times annual base salary |
Chief Operating Officer | 2 times annual base salary |
Directors and Executive Officers | Common Stock Beneficially Owned Excluding Options | Option Shares Currently Exercisable or Exercisable within 60 Days | Percentage Including Options | ||||||
# | # | % | |||||||
James A. Cochran | 6,875 | (1) | — | * | |||||
Steven E. Cochran (2) | 16,111 | — | * | ||||||
Sam P. Cortez | 6,275 | — | * | ||||||
Dr. Elizabeth J. Gatewood | 10,913 | — | * | ||||||
Dr. G. Jay Gogue | 5,875 | — | * | ||||||
Robert W. Humphreys | 456,545 | 250,000 | 8.9 | % | |||||
Deborah H. Merrill | 41,146 | 82,000 | 1.6 | % | |||||
David T. Peterson | 27,478 | — | * | ||||||
Suzanne B. Rudy | 4,125 | — | * | ||||||
Robert E. Staton, Sr. | 7,125 | — | * | ||||||
Martha M. "Sam" Watson | 86,054 | 96,000 | 2.3 | % | |||||
All current directors and executive officers as a group (11 persons) | 668,522 | (3) | 428,000 | 13.9 | % | ||||
* Less than 1% of the shares deemed outstanding. |
(1) | These shares are pledged as security. |
(2) | On July 28, 2014, Steven E. Cochran resigned from his position as President and Chief Operating Officer of the Company. |
(3) | Includes all shares deemed to be beneficially owned by any current director or executive officer. |
Common Stock Beneficially Owned Excluding Options | Option Shares Currently Exercisable or Exercisable within 60 Days | Percentage Including Options | |||||||
5% Shareholders | # | # | % | ||||||
Aegis Financial Corporation Scott L. Barbee 6862 Elm Street, Suite 830 McLean, VA 22201 | 824,590 | (1) | — | 10.46 | % | ||||
Franklin Resources, Inc. Franklin Advisory Services, LLC Charles B. Johnson Rupert H. Johnson, Jr. One Franklin Parkway San Mateo, CA 94403 | 800,000 | (2) | — | 10.15 | % | ||||
Wilen Management Company, Inc. 14551 Meravi Drive Bonita Springs, Florida 34135 | 738,456 | (3) | — | 9.37 | % | ||||
Dimensional Fund Advisors LP Palisades West, Building One 6300 Bee Cave Road Austin, TX 78746 | 699,934 | (4) | — | 8.88 | % | ||||
E. Erwin Maddrey, II 233 North Main Street, Suite 200 Greenville, SC 29601 | 698,471 | — | 8.86 | % | |||||
Greenwood Investments, Inc. Steven Tannenbaum Greenwood Capital Limited Partnership MGPLA, L.P. PVF-ST, LP 200 Clarendon Street - 25th Floor Boston, MA 02116 | 603,334 | (5) | — | 7.65 | % | ||||
Wells Fargo & Company Wells Capital Management Incorporated Wells Fargo Funds Management, LLC Wells Fargo Advisors, LLC 420 Montgomery Street San Francisco, CA 94163 | 499,034 | (6) | — | 6.33 | % |
(1) | The information set forth above is based on an amendment to a Schedule 13G filed by Aegis Financial Corporation (“Aegis”) with the SEC on October 10, 2014, with respect to the Company's common stock. In the amendment to Schedule 13G, Aegis reported that it and Scott L. Barbee (who has the same business address as Aegis) have shared power to vote and/or dispose of the shares disclosed above. |
(2) | The information set forth above is based on a Schedule 13G filed by Franklin Resources, Inc. (“FRI”), Charles B. Johnson, Rupert H. Johnson, Jr., and Franklin Advisory Services, LLC with the SEC on September 10, 2014, with respect to the Company's common stock. In the Schedule 13G, FRI reported that the shares are beneficially owned by one or more open-end or closed-end investment companies or other managed accounts that are clients of investment managers that are direct and indirect subsidiaries of FRI. The Schedule 13G reported that investment management contracts may delegate to the applicable subsidiary(ies) investment or voting power over the securities that are subject to the investment management contracts. Accordingly, such subsidiary(ies) may be deemed to be the beneficial owner of the shares disclosed above. The Schedule 13G reported that Charles B. Johnson and Rupert H. Johnson, Jr. (the “FRI Principal Shareholders”) each own in excess of 10% of the outstanding common stock of FRI and are the principal shareholders of FRI and may be deemed to be the beneficial owners of securities held by persons and entities for which FRI subsidiaries provide investment services. FRI, the FRI Principal Shareholders and the investment advisory subsidiaries disclaim any beneficial ownership in the shares and believe that they are not acting as a “group” for purposes of Rule 13d-5 of the Securities Exchange Act of 1934, as amended. The Schedule 13G also reported that the voting and investment powers held by Franklin Mutual Advisors, LLC, an indirect wholly-owned subsidiary of FRI, are exercised independently from FRI and all other subsidiaries. |
(3) | The information set forth above is based on an amendment to a Schedule 13G filed by Wilen Investment Management Corp. (“Wilen”) with the SEC on January 28, 2014, with respect to the Company's common stock. Wilen reported that it has sole power to vote and/or dispose of the shares disclosed above. |
(4) | The information set forth above is based on a Schedule 13G filed by Dimensional Fund Advisors LP (“Dimensional”) with the SEC on February 10, 2014, with respect to the Company's common stock. In the Schedule 13G, Dimensional reported that it has sole voting power with respect to 694,667 of the shares disclosed above and sole dispositive power with respect to all of the shares disclosed above. In the Schedule 13G, Dimensional reported that it furnishes investment advice to four investment companies and serves as investment manager to certain other commingled group trusts and separate accounts. The Schedule 13G reported that all of the shares disclosed above were owned by such investment companies, trusts or accounts. The Schedule 13G reported that Dimensional disclaims beneficial ownership of such securities. |
(5) | The information set forth above is based on a Schedule 13G jointly filed by Greenwood Investments, Inc., Steven Tannenbaum, Greenwood Capital Limited Partnership, MGPLA, L.P., and PVF-ST, LP (each of which has the same business address as Greenwood Investments, Inc.) with the SEC on February 14, 2014, with respect to the Company's common stock. In the Schedule 13G, Greenwood Investments, Inc. and Steven Tannenbaum reported that each has sole power to vote and/or dispose of the shares disclosed above. |
(6) | The information set forth above is based on a Schedule 13G filed by Wells Fargo & Company (“Wells”) on its own behalf and on behalf of Wells Capital Management Incorporated, Wells Fargo Funds Management, LLC, and Wells Fargo Advisors, LLC with the SEC on January 27, 2014, with respect to the Company's common stock. Wells reported that it has sole voting and dispositive power with respect to 3 of the shares disclosed above, shared voting power with respect to 432,420 of the shares disclosed above, and shared dispositive power with respect to 499,031 of the shares disclosed above. |
Robert W. Humphreys | |
Chairman & Chief Executive Officer Age: 57 | Mr. Humphreys is the Chairman and Chief Executive Officer of Delta Apparel, Inc. He was named Chairman of our Board in June 2009. Mr. Humphreys previously served Delta Apparel, Inc. as President and Chief Executive Officer for more than 10 years. From April 1999 until December 1999, Mr. Humphreys served as President of the Delta Apparel division of Delta Woodside Industries, Inc. In 1998, he was named Vice President of Finance and Assistant Secretary of Delta Woodside Industries, Inc. and served in that capacity until November 1999. From 1987 to May 1998, Mr. Humphreys served as President of Stevcoknit Fabrics Company, the former knit fabrics division of a subsidiary of Delta Woodside Industries, Inc. Mr. Humphreys has over 26 years of experience in the textile and apparel industry, including senior leadership roles in operations and finance. |
Deborah H. Merrill | |
Vice President, Chief Financial Officer and Treasurer Age: 41 | Deborah Merrill has served Delta Apparel, Inc. since 1998 and has been Vice President, Chief Financial Officer and Treasurer of the Company since 2006. Ms. Merrill also currently serves in a management and oversight role for Art Gun, LLC, a wholly-owned subsidiary of Delta Apparel, Inc. Ms. Merrill was previously the Assistant Secretary of the Company from 1999 to 2006. During that time she also served as Vice President, Chief Accounting Officer, and Treasurer from March 2006 until July 2006; Director of Corporate Reporting, Planning and Administration of the Company from 2004 to 2006; and Director of Accounting and Administration of the Company from 2000 to 2004. Previously, she had been Director of Accounting and Administration of the Delta Apparel division of Delta Woodside Industries, Inc. from 1999 to 2000 and, Accounting Manager of its Delta Apparel division from 1998 to 1999. Before joining Delta Apparel in 1998, she served as the Logistics Controller for GNB Technologies, a battery manufacturing company, and as an Auditor for Deloitte & Touche LLP. |
Martha M. Watson | |
Vice President and Chief Human Resources Officer Age: 61 | Martha Watson has served as Vice President and Chief Human Resources Officer of Delta Apparel, Inc. since November 2012. From 2000 to November 2012, Ms. Watson served as the Company's Vice President and Secretary of Delta Apparel. From May 2009 to December 2010, Ms. Watson also served as the President of Junkfood Clothing Company, a wholly-owned subsidiary of Delta Apparel, Inc. Prior to joining Delta Apparel, Inc., Ms. Watson was President of Carolina Benefit Services, a payroll company, from September 1999 through 2000, and Vice President of Operations for Sunland Distribution, Inc., a public warehousing company, from January 1999 to September 1999. From 1990 to 1999, Ms. Watson was Director of Human Resources for Stevcoknit Fabrics Company, and from 1987 to 1990 she held a similar position with Delta Apparel, Inc., both of which, at the time, were divisions of Delta Woodside Industries, Inc. |
Steven E. Cochran | |
President and Chief Operating Officer Age: 47 | Mr. Cochran served as President and Chief Operating Officer Delta Apparel, Inc. from January 2013 through his July 28, 2014, resignation from the Company. Mr. Cochran previously served as President of the Company's Activewear division from 2010 to January 2013. Prior to joining the Company, Mr. Cochran was President of the Image Apparel Division of V.F. Corporation, a branded apparel company, and served in that capacity from 2005 until 2009. From 2002 to 2005, Mr. Cochran was Senior Vice President of Field Operations at Lesco, Inc., a turf supply company. Mr. Cochran began his career at Cintas Corporation, a leading provider of career apparel where he served in various capacities from 1997 to 2002, including Vice President, Marketing, Merchandising and Strategy, and then as Director of National Accounts for Cintas' UTY Division. Mr. Cochran is not related to Company director James A. Cochran. |
Key Features of Our Executive Compensation Programs | ||||
We pay for performance and place a significant portion of executive officer compensation "at risk" | We do not allow hedging, puts, calls or similar derivative transactions related to our stock | |||
We cap the amount of cash incentive compensation and equity awards that an executive may receive in any year | We do not reprice stock options and do not exchange "underwater" options for cash | |||
We consider relevant external market and peer company data in establishing compensation | We do not provide guaranteed cash bonuses to our named executive officers | |||
We have robust stock ownership guidelines for key executive positions and directors | We do not provide multi-year severance benefits in our employment agreements | |||
We have double trigger change in control severance benefits in our executive employment agreements | We do not offer a defined benefit pension plan | |||
We pay reasonable salaries and provide appropriate benefits to our executives | We do not offer a supplemental executive retirement plan | |||
We generally provide a blend of short and long-term incentive opportunities as well as a blend of cash and equity incentive opportunities | We do not provide our executives with perquisites or other personal benefits beyond what we generally provide other employees | |||
Our Compensation Committee is made up entirely of independent directors and is empowered to select and engage its own independent advisors |
• | The acquisition and successful integration of Salt Life into our brand portfolio, with significant post-acquisition growth in our Salt Life business from revenue, geographic and retail outlet perspectives, as well as further expansion of the Salt Life brand, including the opening by our Salt Life restaurant licensee of a signature Salt Life Food Shack restaurant in St. Augustine, Florida; |
• | A transition to new leadership and refreshed product lines and marketing campaigns in our Soffe business as well as completion of the modernization of the screen-printing operations in our Soffe business; |
• | The consolidation of some domestic fabric production for basic t-shirts into our lower-cost platform in Honduras and the expansion of our lower-cost sewing and textile operations in Honduras; |
• | Completion of the consolidation of our college bookstore businesses into our The Game business unit; |
• | Product line expansion in our basics segment, including the introduction of a new fleece line; |
• | The opening of a flagship retail store for our Junk Food brand on iconic Abbot Kinney Boulevard in Venice, California; |
• | The repurchase of approximately 208,022 shares of our Company stock for approximately $3.3 million; |
• | Significant growth in our Art Gun business, with an annual sales increase of approximately 23%; and |
• | The establishment of third-party distribution operations in Dallas, Texas to better serve significant markets for our basic t-shirt product business. |
1. | Aligning the interests of our shareholders and executives; |
2. | Establishing a strong link between executive pay and Company performance; and |
3. | Attracting, retaining and appropriately rewarding executive management talent in line with market practices. |
Under Armour, Inc. | Hanesbrands, Inc. | Steve Madden, Ltd. |
Ennis, Inc. | Maidenform Brands, Inc. | True Religion Apparel, Inc. |
Gildan Activewear, Inc. | Oxford Industries Inc. | Lululemon Athletica, Inc. |
G-III Apparel Group, Ltd. |
• | Base salary; |
• | Performance-based cash incentives; |
• | Performance-based and/or service-based equity incentives; and |
• | Other employee benefits provided to all full-time U.S. employees. |
Executive Officer | Base Salary | |||
Robert W. Humphreys | $ | 760,000 | ||
Deborah H. Merrill | $ | 330,000 | ||
Martha M. Watson | $ | 295,000 | ||
Steven E. Cochran | $ | 420,000 | (1) |
(1) | Amount reflects Mr. Cochran's base salary at the time of his July 28, 2014, resignation from the Company. |
Executive Officer | Target Value |
Robert W. Humphreys | $650,000 (or 85% of current base salary) |
Deborah H. Merrill | $150,000 (or 45% of current base salary) |
Martha M. Watson | $100,000 (or 33% of current base salary) |
Steven E. Cochran (1) | $250,000 (or 59% of base salary) |
(1) | On July 28, 2014, Steven E. Cochran resigned from his position as President and Chief Operating Officer of the Company. |
• | ROCE, which represented 100% of the target; and |
• | Year-over-year sales growth or decline, with a positive or negative adjustment applied to any amounts earned under the ROCE component based on the Company's sales growth or decline from fiscal year 2013 to the 12-month period ended June 28, 2014. |
ROCE (100% of Target Value) | ||||
Performance Targets | Performance Results | |||
ROCE Levels | Vesting Percentage | ROCE | Payout Factor | |
< 3% | 0% of target value | < 3% | 0% | |
3% | 25% of target value | Sales Growth Multiplier: N/A | ||
10% | 100% of target value | |||
21.5% | 250% of target value (maximum) | Total Payout: 0% |
ROCE (100% of Target Shares) | |||||
Performance Targets | Performance Results | ||||
ROCE Levels | Vesting Percentage | ROCE | Payout Factor | ||
< 3% | 0% of target shares | < 3% | 0% | ||
3% | 20% of target shares | ||||
3% to 7% | 20% to 100% of target shares (pro rata) | Total Payout: 0% | |||
7% | 100% of target shares (52,000) | ||||
7% to 12% | 100% to 120% of target shares (pro rata) | ||||
12% | 120% of target shares (maximum) |
ROCE (100% of Target Shares) | ||
Performance Targets | ||
One-Year ROCE Levels | Vesting Percentage | |
< 3% | 0% of target shares | |
3% | 20% of target shares | |
3% to 7% | 20% to 100% of target shares (pro rata) | |
7% | 100% of target shares | |
7% to 12% | 100% to 120% of target shares (pro rata) | |
12% | 120% of target shares (maximum) |
ROCE (100% of Target Shares) | ||
Performance Targets | ||
Two-Year ROCE Levels | Vesting Percentage | |
< 5% | 0% of target shares | |
5% | 50% of target shares | |
5% to 10% | 50% to 100% of target shares (pro rata) | |
10% | 100% of target shares (15,000) | |
10% to 15% | 100% to 150% of target shares (pro rata) | |
15% | 150% of target shares (maximum) |
Executive | Title | Amount | |||
Deborah H. Merrill | Vice President, Chief Financial Officer and Treasurer | $ | 330,000 | ||
Martha M. Watson | Vice President and Chief Human Resources Officer | $ | 295,000 | ||
Steven E. Cochran | President and Chief Operating Officer | $ | 420,000 | (1) |
(1) | Amount reflects Mr. Cochran's base salary at the time of his July 28, 2014, resignation from the Company. |
Salary | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | Total | ||||||||||||||||||
Name and Principal Position | Year | ($) | ($)(1) | ($) | ($)(2) | ($)(3) | ($) | ||||||||||||||||
Robert W. Humphreys | 2014 | $ | 760,000 | — | $ | — | $ | — | $ | 9,358 | $ | 769,358 | |||||||||||
Chairman and Chief Executive Officer | 2014T | $ | 190,000 | $ | — | $ | — | $ | — | $ | — | $ | 190,000 | ||||||||||
(Principal Executive Officer) | 2013 | $ | 758,958 | $ | — | $ | — | $ | 268,450 | $ | 9,258 | $ | 1,036,666 | ||||||||||
2012 | $ | 733,125 | $ | 3,052,920 | (4) | $ | — | $ | — | $ | 7,812 | $ | 3,793,857 | ||||||||||
Deborah H. Merrill | 2014 | $ | 330,000 | — | $ | — | $ | — | $ | 8,850 | $ | 338,850 | |||||||||||
Vice President, Chief Financial Officer & | 2014T | $ | 80,833 | $ | 423,000 | (5) | $ | — | $ | — | $ | 3,800 | $ | 507,633 | |||||||||
Treasurer (Principal Financial Officer) | 2013 | $ | 317,083 | $ | — | $ | — | $ | 61,950 | $ | 10,017 | $ | 389,050 | ||||||||||
2012 | $ | 302,500 | $ | 466,400 | (6) | $ | — | $ | — | $ | 7,134 | $ | 776,034 | ||||||||||
Martha M. Watson | 2014 | $ | 295,000 | — | $ | — | $ | — | $ | 9,900 | $ | 304,900 | |||||||||||
Vice President & Chief Human Resources | 2014T | $ | 72,083 | $ | 423,000 | (5) | $ | — | $ | — | $ | 1,900 | $ | 496,983 | |||||||||
Officer | 2013 | $ | 283,333 | $ | — | $ | — | $ | 41,300 | $ | 8,542 | $ | 333,175 | ||||||||||
2012 | $ | 273,333 | $ | 466,400 | (6) | $ | — | $ | — | $ | 6,383 | $ | 746,116 | ||||||||||
Steven E. Cochran(11) | 2014 | $ | 346,667 | — | $ | — | $ | — | $ | 79,767 | (8) | $ | 426,434 | ||||||||||
President & Chief Operating Officer | 2014T | $ | 102,500 | $ | 564,000 | (7) | $ | — | $ | — | $ | 2,250 | $ | 668,750 | |||||||||
2013 | $ | 366,250 | $ | — | $ | — | $ | 193,690 | $ | 84,670 | (9) | $ | 644,610 | ||||||||||
2012 | $ | 330,833 | $ | 466,400 | (6) | $ | — | $ | — | $ | 43,360 | (10) | $ | 840,593 |
(1) | Amounts do not reflect compensation actually received by the named executive officer. Instead, the amounts shown are the aggregate grant date fair value of restricted share units and/or performance units computed in accordance with FASB ASC Topic 718, and which the executive is or was eligible to earn in ensuing fiscal years based on service and/or the Company's achievement of performance results. The assumptions used for purposes of the valuation of the stock awards are described more fully in Note 12 in our financial statements in our Form 10-K for the year ended September 27, 2014, as filed with the SEC. |
(2) | This column represents the amounts earned by the named executive officer in the applicable periods pursuant to the Company’s Short-Term Incentive Compensation Plan. Additional information regarding the potential threshold, target and maximum payouts underlying the Non-Equity Incentive Plan Compensation column is included in the Grants of Plan-Based Awards table. |
(3) | This column represents the matching contributions by the Company to the Company’s 401(k) savings plan. The Company’s named executive officers do not receive perquisites that would exceed an aggregate of $10,000 each. |
(4) | The amount shown includes the aggregate grant date fair value of performance-based awards, using the probable outcome of the performance conditions as of the grant date, which was assumed to be the target amount. If the amount was calculated assuming the highest level of performance conditions were met, the grant date fair value for the awards would be $3,663,504. |
(5) | The amount shown includes the aggregate grant date fair value of both service and performance-based awards, with the performance unit awards using the probable outcome of the performance conditions as of the grant date, which was assumed to be the target amount. If the amount was calculated assuming the highest level of performance conditions were met, the grant date fair value for the awards would be $528,750. |
(6) | The amount shown includes the aggregate grant date fair value of both service and performance-based awards, with the performance-based awards using the probable outcome of the performance conditions as of the grant date, which was assumed to be the target amount. If the amount was calculated assuming the highest level of performance conditions were met, the grant date fair value for the awards would be $583,000. |
(7) | The amount shown includes the aggregate grant date fair value of both service and performance-based awards, with the performance-based awards using the probable outcome of the performance conditions as of the grant date, which was assumed to be the target amount. If the amount was calculated assuming the highest level of performance conditions were met, the grant date fair value for the awards would be $705,000. Mr. Cochran is no longer eligible for these awards due to his July 28, 2014, resignation from the Company. |
(8) | The amount shown includes $70,000 in severance payments made to Mr. Cochran in connection with his July 28, 2014, resignation. |
(9) | The amount shown includes $73,420 in temporary living and relocation expenses paid to Mr. Cochran in conjunction with a relocation package offered upon his initial employment with the Company. |
(10) | The amount shown includes $34,493 in temporary living expenses paid to Mr. Cochran in conjunction with a relocation package offered upon his initial employment with the Company. |
(11) | On July 28, 2014, Steven E. Cochran resigned from his position as President and Chief Operating Officer of the Company. |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other Stock Awards: Number of Securities Underlying Options (3) | Closing Market Price on Date of Grant | Grant Date Fair Value of Stock-Based Awards (4) | ||||||||||||||||||||||
Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||||||
Name | Date | ($)(5) | ($) | ($)(6) | (#)(7) | (#) | (#) | (#) | ($/Sh) | ($) | ||||||||||||||||
Robert W. Humphreys | 07/01/13 | — | 650,000 | 1,500,000 | (8) | — | — | — | — | $ | — | $ | — | |||||||||||||
Deborah H. Merrill | 07/01/13 | — | 150,000 | 375,000 | (8) | — | — | — | — | $ | — | $ | — | |||||||||||||
07/01/13 | — | — | — | — | — | — | 15,000 | $ | 14.10 | $ | 211,500 | |||||||||||||||
07/01/13 | — | — | — | — | 15,000 | 22,500 | (9) | — | $ | 14.10 | $ | 211,500 | ||||||||||||||
Martha M. Watson | 07/01/13 | — | 100,000 | 250,000 | (8) | — | — | — | — | $ | — | $ | — | |||||||||||||
07/01/13 | — | — | — | — | — | — | 15,000 | $ | 14.10 | $ | 211,500 | |||||||||||||||
07/01/13 | — | — | — | — | 15,000 | 22,500 | (9) | — | $ | 14.10 | $ | 211,500 | ||||||||||||||
Steven E. Cochran(10) | 07/01/13 | — | 250,000 | 625,000 | (8) | — | — | — | — | $ | — | $ | — | |||||||||||||
07/01/13 | — | — | — | — | — | — | 20,000 | $ | 14.10 | $ | 282,000 | |||||||||||||||
07/01/13 | — | — | — | — | 20,000 | 30,000 | (9) | — | $ | 14.10 | $ | 282,000 |
(2) | The equity incentive plan award information includes performance units granted under our 2010 Stock Plan. With respect to any such performance units that vest, the applicable named executive officer is eligible to receive shares of Delta Apparel, Inc. common stock equal to one-half of the value of the aggregate number of such vested performance units and a cash payment equal to one-half of the value of the aggregate number of such vested performance units. Mr. Cochran is no longer eligible for these awards due to his July 28, 2014, resignation from the Company. |
(3) | This column includes restricted stock units granted under our 2010 Stock Plan. With respect to any such restricted stock units that vest, the applicable named executive officer is eligible to receive shares of Delta Apparel, Inc. common stock equal to one-half of the value of the aggregate number of such vested restricted stock units and a cash payment equal to one-half of the value of the aggregate number of such vested restricted stock units. Mr. Cochran is no longer eligible for these awards due to his July 28, 2014, resignation from the Company. |
(4) | The aggregate grant date fair value of these awards was computed in accordance with ASC Topic 718. The attainment of target level for the performance-based grants was deemed probable at the date of grant and was therefore used to calculate the aggregate grant date fair value. |
(5) | If minimum performance goals are not met by the Company, there is no guaranteed cash incentive payment. If minimum performance goals are met by the Company, our named executive officers would be eligible to receive 25% of their target cash incentive opportunity, which for Mr. Humphreys, Ms. Merrill, Ms. Watson and Mr. Cochran was $162,500, $37,500, $25,000 and $62,500, respectively. |
(6) | The Short-Term Incentive Compensation Plan states that no participant in the plan shall receive compensation pursuant to the plan in excess of $1,500,000 during any calendar year. In addition, the annual incentives for the 12-month period ended June 28, 2014 (our 2014 fiscal year before the Fiscal Year Change), for the plan for the Company as a whole include provisions for a maximum payout of 250%. |
(7) | If minimum performance goals are not met by the Company, there is no guaranteed equity incentive award. If minimum performance goals are met by the Company, the applicable named executive officers would be eligible to receive 50% of their target equity incentive opportunity, which for each of Ms. Merrill and Ms. Watson was 7,500 shares and for Mr. Cochran was 10,000 shares. |
(8) | Amount represents the annual incentives based on the consolidated performance of the Company for the 12-month period ended June 28, 2014 (our 2014 fiscal year before the Fiscal Year Change). |
(9) | Upon the attainment of performance goals and other terms and conditions specified by our Compensation Committee, the applicable named executive officer is eligible to receive shares of Delta Apparel, Inc. common stock equal to one-half of the value of the aggregate number of vested performance units and a cash payment equal to one-half of the value of the aggregate number of such vested performance units. Mr. Cochran is no longer eligible for these awards due to his July 28, 2014, resignation from the Company. |
(10) | On July 28, 2014, Steven E. Cochran resigned from his position as President and Chief Operating Officer of the Company. |
Option Awards | Stock Awards | |||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (Exercisable) | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Performance-Based Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Performance-Based Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | ||||||||||||||||||
Name | (#) | ($) | (#)(1) | ($)(2) | (#) | ($)(3) | ||||||||||||||||||
Robert W. Humphreys | 62,500 | $ | 11.280 | 07/05/14 | ||||||||||||||||||||
250,000 | $ | 13.350 | 07/03/15 | — | — | — | — | |||||||||||||||||
— | — | — | — | — | 104,000 | (4) | $ | 1,705,600 | ||||||||||||||||
Deborah H. Merrill | 2,000 | $ | 11.280 | 07/05/14 | ||||||||||||||||||||
12,000 | $ | 13.350 | 07/03/15 | — | — | — | — | |||||||||||||||||
30,000 | $ | 17.240 | 07/03/15 | — | — | — | — | |||||||||||||||||
40,000 | $ | 8.300 | 02/08/18 | — | — | — | — | |||||||||||||||||
— | — | — | 15,000 | $ | 246,000 | 7,500 | (5) | $ | 123,000 | |||||||||||||||
Martha M. Watson | 8,000 | $ | 11.280 | 07/05/14 | ||||||||||||||||||||
56,000 | $ | 13.350 | 07/03/15 | — | — | — | — | |||||||||||||||||
40,000 | $ | 8.300 | 02/08/18 | — | — | — | — | |||||||||||||||||
— | — | — | 15,000 | $ | 246,000 | 7,500 | (5) | $ | 123,000 | |||||||||||||||
Steven E. Cochran(6) | 25,000 | $ | 13.860 | 02/08/18 | — | — | — | — | ||||||||||||||||
— | — | — | 20,000 | $ | 328,000 | 10,000 | (5) | $ | 164,000 | |||||||||||||||
(1) | These stock-based awards, granted under the 2010 Stock Plan, are service-based restricted stock units that are eligible to vest upon the filing of our Quarterly Report on Form 10-Q with the SEC for the quarter ending June 27, 2015, if the executive remains employed with the Company through such date. With respect to any such restricted stock units that vest, the applicable named executive officer is eligible to receive shares of Delta Apparel, Inc. common stock equal to one-half of the value of the aggregate number of such vested restricted stock units and a cash payment equal to one-half of the value of the aggregate number of such vested restricted stock units. Mr. Cochran is no longer eligible for these awards due to his July 28, 2014, resignation from the Company. |
(2) | The market value is calculated by multiplying the number of restricted share units by $16.40, the closing price of Delta Apparel, Inc.'s common stock on September 27, 2013 (the last day of the Transition Period). |
(3) | The market value is calculated by multiplying the number of performance units by $16.40, the closing price of Delta Apparel, Inc.'s common stock on September 27, 2013 (the last day of the Transition Period). |
(4) | In accordance with the second amendment to Mr. Humphreys' employment agreement, he received an award granted under the 2010 Stock Plan of 156,000 performance units, with one-third of such performance units eligible to vest upon the filing of our Annual Report on Form 10-K for each of our fiscal years 2013, 2014 and 2015. The amount shown reflects the number of performance units that would have vested if target performance goals were met. With respect to any such performance units that vested, Mr. Humphreys was eligible to receive shares of Delta Apparel, Inc. common stock equal to one-half of the value of the aggregate number of such vested performance units and a cash payment equal to one-half of the value of the aggregate number of such vested performance units. Based upon the Company's performance during the 12-month period ended June 28, 2014 (our 2014 fiscal year before the Fiscal Year Change), Mr. Humphreys did not vest in any of the shares for which he was eligible for such period. In connection with the December 5, 2014, third amendment to Mr. Humphreys' employment agreement, he and the Company mutually agreed to cancel the remaining one-third of these performance units (52,000). |
(5) | These stock-based awards, granted under the 2010 Stock Plan, are performance units that are eligible to vest upon the filing of our Quarterly Report on Form 10-Q with the SEC for the quarter ending June 27, 2015, if certain performance goals and other terms and conditions specified by our Compensation Committee are attained. The amount shown reflects the number of performance units that would vest if minimum performance goals are met. With respect to any such performance units that vest, the applicable named executive officer is eligible to receive shares of Delta Apparel, Inc. common stock equal to one-half of the value of the aggregate number of such vested performance units and a cash payment equal to one-half of the value of the aggregate number of such vested performance units. Mr. Cochran is no longer eligible for these awards due to his July 28, 2014, resignation from the Company. |
(6) | On July 28, 2014, Steven E. Cochran resigned from his position as President and Chief Operating Officer of the Company. |
Option Awards | Stock Awards | |||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (Exercisable) | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Performance-Based Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Performance-Based Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | ||||||||||||||||||
Name | (#) | ($) | (#)(1) | ($)(2) | (#) | ($)(3) | ||||||||||||||||||
Robert W. Humphreys | 250,000 | $ | 13.350 | 07/03/15 | — | — | — | — | ||||||||||||||||
— | — | — | — | — | 10,400 | (4) | $ | 91,520 | ||||||||||||||||
Deborah H. Merrill | 12,000 | $ | 13.350 | 07/03/15 | — | — | — | — | ||||||||||||||||
30,000 | $ | 17.240 | 07/03/15 | — | — | — | — | |||||||||||||||||
40,000 | $ | 8.300 | 02/08/18 | — | — | — | — | |||||||||||||||||
— | — | — | 15,000 | $ | 132,000 | 7,500 | (5) | $ | 66,000 | |||||||||||||||
Martha M. Watson | 56,000 | $ | 13.350 | 07/03/15 | — | — | — | — | ||||||||||||||||
40,000 | $ | 8.300 | 02/08/18 | — | — | — | — | |||||||||||||||||
— | — | — | 15,000 | $ | 132,000 | 7,500 | (5) | $ | 66,000 | |||||||||||||||
Steven E. Cochran(6) | 25,000 | $ | 13.860 | 02/08/18 | — | — | — | — | ||||||||||||||||
— | — | — | — | $ | — | — | $ | — | ||||||||||||||||
(1) | These stock-based awards, granted under the 2010 Stock Plan, are service-based restricted stock units that are eligible to vest upon the filing of our Quarterly Report on Form 10-Q with the SEC for the quarter ending June 27, 2015, if the executive remains employed with the Company through such date. With respect to any such restricted stock units that vest, the applicable named executive officer is eligible to receive shares of Delta Apparel, Inc. common stock equal to one-half of the value of the aggregate number of such vested restricted stock units and a cash payment equal to one-half of the value of the aggregate number of such vested restricted stock units. |
(2) | The market value is calculated by multiplying the number of restricted share units by $8.80, the closing price of Delta Apparel, Inc.'s common stock on September 26, 2014 (the last trading day prior to the end of our 2014 fiscal year). |
(3) | The market value is calculated by multiplying the number of performance units by $8.80, the closing price of Delta Apparel, Inc.'s common stock on September 26, 2014 (the last trading day prior to the end of our 2014 fiscal year). |
(4) | In accordance with the second amendment to Mr. Humphreys' employment agreement, he received an award granted under the 2010 Stock Plan of 156,000 performance units, with one-third of such performance units eligible to vest upon the filing of our Annual Report on Form 10-K for each of our fiscal years 2013, 2014 and 2015. The amount shown reflects the number of performance units that would have vested if minimum performance goals were met. With respect to any such performance units that vested, Mr. Humphreys was eligible to receive shares of Delta Apparel, Inc. common stock equal to one-half of the value of the aggregate number of such vested performance units and a cash payment equal to one-half of the value of the aggregate number of such vested performance units. In connection with the December 5, 2014, third amendment to Mr. Humphreys' employment agreement, he and the Company mutually agreed to cancel these performance units. |
(5) | These stock-based awards, granted under the 2010 Stock Plan, are performance units that are eligible to vest upon the filing of our Quarterly Report on Form 10-Q with the SEC for the quarter ending June 27, 2015, if certain performance goals and other terms and conditions specified by our Compensation Committee are attained. The amount shown reflects the number of performance units that would vest if minimum performance goals are met. With respect to any such performance units that vest, the applicable named executive officer is eligible to receive shares of Delta Apparel, Inc. common stock equal to one-half of the value of the aggregate number of such vested performance units and a cash payment equal to one-half of the value of the aggregate number of such vested performance units. |
(6) | On July 28, 2014, Steven E. Cochran resigned from his position as President and Chief Operating Officer of the Company. |
Stock Awards | Option Awards | |||||||||||||||
Number of Shares Acquired on Vesting | Value Realized on Vesting (1) | Number of Shares Acquired on Exercise (2) | Value Realized on Exercise (3) | |||||||||||||
Name | (#) | ($) | (#) | ($) | ||||||||||||
Robert W. Humphreys | 19,760 | (4) | $327,028 | (4) | 62,500 | $351,613 | ||||||||||
Deborah H. Merrill | 13,250 | (5) | $219,288 | 2,000 | $7,750 | |||||||||||
Martha M. Watson | 13,250 | (5) | $219,288 | 8,000 | $36,520 | |||||||||||
Steven E. Cochran(6) | 13,250 | (5) | $219,288 | — | $— |
(1) | The value realized equals the fair market value of the Company’s common stock on the date immediately preceding the filing of our Annual Report on Form 10-K with the SEC for our 2013 fiscal year multiplied by the number of shares vested. |
(2) | All shares acquired on exercise result from service-based stock option awards which vested on July 5, 2005, and which were set to expire as of July 5, 2014. |
(3) | The value realized equals the difference between the option exercise price and the fair market value of the Company’s common stock on the date immediately preceding the date(s) of exercise, multiplied by the number of shares for which the option was exercised. |
(4) | Mr. Humphreys vested in a total of 39,520 performance units upon the filing of our Annual Report on Form 10-K with the SEC for our 2013 fiscal year based upon the Company's performance during our 2013 fiscal year. Mr. Humphreys received one-half of the vested units in shares of Delta Apparel, Inc. common stock (19,760 shares) and a cash payment for the other half of the vested units equal in value to 19,760 shares of Delta Apparel, Inc. common stock because under the applicable award agreement he was eligible to receive common stock equal to one-half of the value of the aggregate number of the units vested and a cash payment equal to one-half of the value of the aggregate number of the units vested. |
(5) | These shares acquired on vesting result from service-based restricted stock unit awards which vested on the filing of our Annual Report on Form 10-K with the SEC for our 2013 fiscal year. |
(6) | On July 28, 2014, Steven E. Cochran resigned from his position as President and Chief Operating Officer of the Company. |
Involuntary Termination without Cause | Termination for Change in Control | Change in Control without Termination | Death | Disability | ||||||||||||||||
Executive | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
Robert W. Humphreys | ||||||||||||||||||||
Base Salary | $ | 760,000 | $ | 760,000 | $ | — | $ | 380,000 | $ | 380,000 | ||||||||||
Non-Equity Incentive Compensation | 650,000 | 650,000 | — | — | — | |||||||||||||||
Equity Options and Awards (1) | — | 1,705,600 | 1,705,600 | $ | 1,705,600 | 1,705,600 | ||||||||||||||
Insurance Benefits | 9,948 | 9,948 | — | — | 4,974 | |||||||||||||||
Outplacement Services | — | 5,000 | — | — | — | |||||||||||||||
$ | 1,419,948 | $ | 3,130,548 | $ | 1,705,600 | $ | 2,085,600 | $ | 2,090,574 | |||||||||||
Deborah H. Merrill | ||||||||||||||||||||
Base Salary | $ | 330,000 | $ | 330,000 | $ | — | $ | 165,000 | $ | 165,000 | ||||||||||
Non-Equity Incentive Compensation | — | — | — | — | — | |||||||||||||||
Equity Options and Awards (1) | — | $ | 492,000 | $ | 492,000 | $ | 492,000 | $ | 492,000 | |||||||||||
Insurance Benefits | 3,120 | 3,120 | — | — | 1,560 | |||||||||||||||
Outplacement Services | — | 5,000 | — | — | — | |||||||||||||||
$ | 333,120 | $ | 830,120 | $ | 492,000 | $ | 657,000 | $ | 658,560 | |||||||||||
Martha M. Watson | ||||||||||||||||||||
Base Salary | $ | 295,000 | $ | 295,000 | $ | — | $ | 147,500 | $ | 147,500 | ||||||||||
Non-Equity Incentive Compensation | — | — | — | — | — | |||||||||||||||
Equity Options and Awards (1) | — | $ | 492,000 | $ | 492,000 | $ | 492,000 | $ | 492,000 | |||||||||||
Insurance Benefits | 9,948 | 9,948 | — | — | 4,974 | |||||||||||||||
Outplacement Services | — | 5,000 | — | — | — | |||||||||||||||
$ | 304,948 | $ | 801,948 | $ | 492,000 | $ | 639,500 | $ | 644,474 | |||||||||||
Steven E. Cochran(2) | ||||||||||||||||||||
Base Salary | $ | 307,500 | $ | 307,500 | $ | — | $ | 167,500 | $ | 167,500 | ||||||||||
Non-Equity Incentive Compensation | — | — | — | — | — | |||||||||||||||
Equity Options and Awards (1) | — | $ | 656,000 | $ | 656,000 | $ | 656,000 | $ | 656,000 | |||||||||||
Insurance Benefits | 10,464 | 10,464 | — | — | 10,464 | |||||||||||||||
Outplacement Services | — | 5,000 | — | — | — | |||||||||||||||
$ | 317,964 | $ | 978,964 | $ | 656,000 | $ | 823,500 | $ | 833,964 |
(1) | Amount includes value received under the 2010 Stock Plan. The value of payments are based upon the closing price of the Company's common stock on September 27, 2013 (the last day of the Transition Period). |
(2) | On July 28, 2014, Steven E. Cochran resigned from his position as President and Chief Operating Officer of the Company. |
Involuntary Termination without Cause | Termination for Change in Control | Change in Control without Termination | Death | Disability | ||||||||||||||||
Executive | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
Robert W. Humphreys | ||||||||||||||||||||
Base Salary | $ | 760,000 | $ | 760,000 | $ | — | $ | 380,000 | $ | 380,000 | ||||||||||
Non-Equity Incentive Compensation | 650,000 | 650,000 | — | — | — | |||||||||||||||
Equity Options and Awards (1) | — | 915,200 | 915,200 | 915,200 | 915,200 | |||||||||||||||
Insurance Benefits | 9,948 | 9,360 | — | — | 4,680 | |||||||||||||||
Outplacement Services | — | 5,000 | — | — | — | |||||||||||||||
$ | 1,419,948 | $ | 2,339,560 | $ | 915,200 | $ | 1,295,200 | $ | 1,299,880 | |||||||||||
Deborah H. Merrill | ||||||||||||||||||||
Base Salary | $ | 330,000 | $ | 330,000 | $ | — | $ | 165,000 | $ | 165,000 | ||||||||||
Non-Equity Incentive Compensation | — | — | — | — | — | |||||||||||||||
Equity Options and Awards (1) | — | 264,000 | 264,000 | 264,000 | 264,000 | |||||||||||||||
Insurance Benefits | 3,120 | 2,832 | — | — | 1,416 | |||||||||||||||
Outplacement Services | — | 5,000 | — | — | — | |||||||||||||||
$ | 333,120 | $ | 601,832 | $ | 264,000 | $ | 429,000 | $ | 430,416 | |||||||||||
Martha M. Watson | ||||||||||||||||||||
Base Salary | $ | 295,000 | $ | 295,000 | $ | — | $ | 147,500 | $ | 147,500 | ||||||||||
Non-Equity Incentive Compensation | — | — | — | — | — | |||||||||||||||
Equity Options and Awards (1) | — | 264,000 | 264,000 | 264,000 | 264,000 | |||||||||||||||
Insurance Benefits | 9,948 | 8,880 | — | — | 4,440 | |||||||||||||||
Outplacement Services | — | 5,000 | — | — | — | |||||||||||||||
$ | 304,948 | $ | 572,880 | $ | 264,000 | $ | 411,500 | $ | 415,940 |
(1) | Amount includes value received under the 2010 Stock Plan. The value of payments are based upon the closing price of the Company's common stock on September 26, 2014 (the last trading day prior to the end of our 2014 fiscal year). |
• | earned but unpaid salary through the date of termination; |
• | non-equity incentive compensation earned and payable prior to the date of termination; |
• | option grants received which have already vested and are exercisable prior to the date of termination (subject to the terms of the applicable option agreements); |
• | unused vacation pay; and |
• | amounts accrued and vested under the Company’s 401(k) Plan. |
• | in the case of Mr. Humphreys, 12 months of base salary continuation and payment of non-equity incentive compensation equal to 100% of the target award for the fiscal year in which the termination occurs in 12 equal monthly installments (to the extent permitted under Internal Revenue Code Section 409A). In addition, the full award of performance units (granted pursuant to the 2010 Stock Plan) related to the fiscal year in which Mr. Humphreys’ employment is terminated will immediately and automatically vest subject to the satisfaction of applicable performance criteria; |
• | in the case of Ms. Merrill and Ms. Watson, 12 months of base salary continuation and payment of non-equity incentive compensation equal to 100% of the award for the most recent full fiscal year prior to termination in 12 equal monthly installments (to the extent permitted under Internal Revenue Code Section 409A); |
• | continuation of group life, disability and medical insurance coverage for 12 months in the case of Mr. Humphreys, Ms. Merrill and Ms. Watson at levels and rates equal to those immediately prior to termination or, if different, as provided to other executive level employees during such applicable period. |
• | in the case of Mr. Humphreys, whether or not termination results from the change in control, all performance criteria shall be deemed achieved at target levels and all other terms and conditions met to pay out all performance units. In addition, if termination results from the change in control, a lump sum payment in an amount equal to 12 months of base |
• | in the case of Ms. Merrill and Ms. Watson, whether or not termination results from the change in control, all restrictions on restricted stock units will terminate, and all performance criteria shall be deemed achieved at target levels and all other terms and conditions met to pay out all performance units and restricted stock units. In addition, if termination results from the change in control, a lump sum payment in an amount equal to 12 months of base salary and the non-equity incentive compensation received for the most recent full fiscal year prior to termination; and |
• | in the case of termination resulting from the change in control, each named executive officer will receive continuation of group life, disability and medical insurance coverage for 12 months at levels and rates equal to those immediately prior to termination or, if different, as provided to other executive level employees during such applicable period. In addition, outplacement assistance will be provided to the executives. |
• | six months of base salary continuation and all performance criteria shall be deemed achieved at target levels and all other terms and conditions met to pay out all restricted stock units and/or performance units granted pursuant to the Company’s 2010 Stock Plan; |
• | continuation of group life, disability and medical insurance coverage for six months at levels and rates equal to those immediately prior to the date of permanent disability or, if different, as provided to other executive level employees during such period. |
• | $25,000 annual retainer; |
• | a grant of 1,500 shares of Common Stock; |
• | in the case of the Audit Committee, a $5,000 annual retainer for the committee chairperson and $3,000 for the committee members; |
• | in the case of the Compensation and Corporate Governance Committees, a $3,000 annual retainer for the committee chairpersons and $2,500 for the committee members; |
• | up to $5,000 every two-year period for Board of Director education; and |
• | reasonable travel expenses to attend meetings. |
• | $6,250 retainer; |
• | a grant of 375 shares of Common Stock; |
• | in the case of the Audit Committee, a $1,250 retainer for the committee chairperson and $750 for the committee members; and |
• | in the case of the Compensation and Corporate Governance Committees, a $750 retainer for the committee chairpersons and $625 for the committee members; and |
• | reasonable travel expenses to attend meetings. |
Director Compensation | |||
Fees Earned or Paid in Cash | Stock Awards | Total | |
Name | ($) | ($)(1) | ($) |
James A. Cochran | $38,125 | $18,750 | $56,875 |
Sam P. Cortez | $38,125 | $18,750 | $56,875 |
Dr. Elizabeth J. Gatewood | $38,125 | $18,750 | $56,875 |
Dr. G. Jay Gogue | $37,500 | $18,750 | $56,250 |
David T. Peterson | $38,125 | $18,750 | $56,875 |
Suzanne B. Rudy | $35,000 | $18,750 | $53,750 |
Robert E. Staton, Sr. | $38,125 | $18,750 | $56,875 |
(1) | Each current non-employee director received 1,875 shares of Company common stock upon the filing of our Annual Report on Form 10-K for our fiscal year ended September 27, 2014, which included 375 shares for service as a non-employee director during the Transition Period. Amounts shown are the aggregate grant date fair value of such stock awards. None of our current non-employee directors have any outstanding stock options or other outstanding equity awards. Please refer to the "Stock Ownership of Management and Principal Shareholders" section of this Proxy Statement for the number of shares of our common stock we believe to be beneficially owned as of December 12, 2014, by each of our current non-employee directors. |
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | ||
Plan Category | (a) | (b) | (c) | |
Equity compensation plans approved by security holders | 265,352 | $2.54 | 562,939 | |
Equity compensation plans not approved by security holders | 502,000 | $12.27 | — | |
Total | 767,352 | $10.29 | 562,939 |
1. | Purpose |
2. | Definitions |
a) | “Affiliate” means any entity other than a Subsidiary, if the Company and/or one or more Subsidiaries own no less than 50% of such entity. |
b) | “Award” means an incentive as described in Section 8. |
c) | “Award Agreement” refers to an agreement between the Company and a Participant that establishes the terms and conditions for an Award granted under the Plan, including any applicable performance goals associated with the Award. |
d) | “Board” means the Board of Directors of Delta Apparel, Inc. |
e) | “Change in Control” means: |
i. | The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the outstanding securities of each of (A) the continuing or surviving entity and (B) any direct or indirect parent corporation of such continuing or surviving entity; |
ii. | The sale, transfer or other disposition of all or substantially all of the Company’s assets; |
iii. | With respect to a Participant, the sale, transfer or other disposition of all or substantially all of the assets or business operations of an operating division of the Company or Subsidiary that employs the Participant or to which the Participant’s employment with the Company is primarily related; |
iv. | Any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of securities of the Company representing at least 50% of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this paragraph (iv), the term “person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934 but shall exclude (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a parent or subsidiary of the Company and (B) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the Common Stock. A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially |
f) | “Chief Executive Officer” or “CEO” means the Company’s Chief Executive Officer. |
g) | “Code” means the Internal Revenue Code of 1986, as amended. |
h) | “Committee” means the Compensation Committee of the Board unless another committee comprised of members of the Board is designated by the Board to oversee and administer the Plan, provided, that the Committee shall consist of two or more members of the Board as the Board may designate from time to time, each of whom shall satisfy such requirements as: |
i. | the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 or its successor under the Exchange Act; |
ii. | the rules of a stock exchange on which the securities of the Company are traded as may be established pursuant to its rule-making authority of such stock exchange; and |
iii. | the Internal Revenue Service may establish for outside directors acting under plans intended to qualify for exemption under Section 162(m) of the Code. |
i) | “Common Stock” means the Company’s Common Stock. |
j) | “Company” means Delta Apparel, Incorporated, a Georgia corporation. |
k) | “Covered Employee” will conform to the term used by Section 162(m) of the Code and income tax regulations. |
l) | “Disability” or "Disabled" means that due to an injury or sickness, the Participant is unable to perform each of the main duties of the Participant’s regular occupation with the Company, as determined by an independent, qualified and licensed physician selected by the Company. If, however, the Participant is covered under a long term disability plan sponsored by the Company, the Participant shall only be considered Disabled upon a determination of disability under the terms of such long term disability plan. |
m) | “Employee” means any individual who is a common-law employee of the Company, a parent, Subsidiary, or an Affiliate. |
n) | “Exchange Act” means the federal Securities Exchange Act of 1934, as amended. |
o) | “Fair Market Value” means, with respect to the Common Stock, the closing sale price of such Common Stock at four o’clock p.m. (Eastern Time), on the principal United States national stock exchange on which the Common Stock is traded, as determined by the Committee, or, if the Common Stock shall not have been traded on such date, the closing sale price on such stock exchange on the first day prior thereto on which the Common Stock was so traded, or, if the Common Stock is not traded on a United States national stock exchange, such other amount as may be determined by the Committee by any fair and reasonable means. Fair Market Value determined by the Committee in good faith shall be final, binding and conclusive on all parties. |
p) | “Incentive Stock Option” means an Award described in Section 8a. |
q) | “Nonstatutory Stock Option” means an Award described in Section 8a. |
r) | “Participant” means an Employee or member of the Board who is eligible to participate in the Plan pursuant to Section 4b and receives an Award under the Plan. |
s) | “Performance-Based Award” means an Award described in Section 8e. |
t) | “Performance Period” means a fiscal year of the Company or other period with respect to which an Award may be earned based upon Service and/or performance. |
u) | “Performance Stock” means a payment in the form of shares of Common Stock upon the attainment of performance goals and other terms and conditions specified by the Committee. |
v) | "Performance Unit" means an Award in units described in Section 8d which is a Performance-Based Award as further described in Section 8e. |
w) | “Plan” means this plan, the Delta Apparel, Inc. 2010 Stock Plan. |
x) | "Prior Plans" means the Delta Apparel, Inc. 2000 Stock Option Plan and the Delta Apparel, Inc. Incentive Stock Award Plan. |
y) | “Restricted Period” means the time period during which Restricted Stock / Restricted Stock Unit have not been transferred to the Participant. |
z) | “Restricted Stock” means Common Stock, subject to specified restrictions (including, without limitation, a requirement that the Participant remain in Service for a specified period of time and/or that specified performance goals be achieved), granted under Section 8c. |
aa) | “Restricted Stock Unit” means an unfunded and unsecured promise to deliver shares of Common Stock, cash, other securities or other property, subject to certain restrictions (including, without limitation, a requirement that the Participant remain in Service for a specified period of time and/or that specified performance goals be achieved), granted under Section 8c. |
bb) | “Service” means service as an Employee or member of the Board of Directors of the Company. The Participant’s Service shall not be deemed to have been interrupted or terminated merely because of a change in the capacity in which the Participant renders service to the Company or a Subsidiary or Affiliate as an Employee or member of the Board or a change in the entity for which the Participant renders such service so long as there is otherwise no interruption or termination of the Participant’s Service. The Committee, in its sole discretion, may determine whether Service shall be considered interrupted in the case of any leave of absence approved by the Company, including sick leave, military leave or any other personal leave. |
cc) | “Stock” means the Award described in Section 8d. |
dd) | “Stock Appreciation Right” or “SAR” means the Award described in Section 8b. |
ee) | “Stock Option” means the Award described in Section 8a, which may be either an Incentive Stock Option or a Nonstatutory Stock Option, as specified by the Committee. |
ff) | “Stock Unit” means the Award described in Section 8d. |
gg) | “Subsidiary” means any corporation, if the Company and/or one or more other Subsidiaries own not less than 50% of the total combined voting power of all classes of outstanding stock of such corporation. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. |
3. | Effective Dates for The Plan |
a) | The Plan will become effective on the date on which it is approved by the stockholders of the Company. Awards may be made prior to such stockholder approval if made subject thereto. No Award may be granted under the Plan after September 14, 2020 (the 10th anniversary of the day before Board approval), but Awards previously granted may extend beyond that date. |
4. | Shares Subject to This Plan |
a) | Number of Shares - Subject to adjustment as provided in Section 11, the aggregate number of shares of Stock that may be delivered under the Plan will be 500,000 plus any shares of Common Stock subject to outstanding awards under the Prior Plans, on the effective date of this Plan that are subsequently forfeited or terminated for any reason before being exercised (subject to adjustment in accordance with Section 11). |
b) | If any Award under the Plan or any award under the Prior Plans requiring exercise or purchase by the Participant for delivery of Stock terminates without having been exercised in full or purchased, or if any Award under the Plan or any award under the Prior Plans payable in Stock or cash is |
c) | Shares of Restricted Stock that have been forfeited in accordance with the terms of the applicable Award and shares held back, in satisfaction of the exercise price or tax withholding requirements, from shares that would otherwise have been delivered pursuant to an Award shall also be available for future grants. |
d) | The number of shares of Stock delivered under an Award shall be determined net of any previously acquired shares tendered by the Participant in payment of the exercise price or of withholding taxes. |
e) | Shares to be Delivered - Stock delivered under the Plan may be either authorized but unissued Stock or previously issued Stock acquired and held by the Company. No fractional shares of Stock will be delivered under the Plan. |
5. | Plan Administration – Roles & Authorities |
a) | Except as provided paragraph b, the Plan will be administered by the Committee. The Committee shall consist of at least three directors. A majority of the members of the Committee shall constitute a quorum, and all determinations of the Committee shall be made by a majority of its members. If, during any such time, any member of the Committee is not an outside director or a non-employee director, a sub-committee (the "Sub-Committee") consisting solely of directors who are both non-employee directors and outside directors shall administer the Plan in connection with Awards to "officers" of the Company within the meaning of Section 16(b) of the 1934 Act or with respect to any Award intended to be exempt under Section 162(m)(3) of the Code. Any references to the Committee in this Plan shall also apply to the Sub-Committee. |
b) | If the Board so chooses, it may administer the Plan directly rather than through a committee; provided, however, any decisions that are required by applicable law or otherwise to be made by outside directors shall be determined by members of the Board who are outside directors. In such event, all references to the Committee in this Plan (other than the committee composition and governance provisions of the immediately preceding paragraph) shall be deemed to refer to the Board. |
c) | The Committee, in accordance with Section 7, will have authority to: |
i. | grant Awards at such time or times as it may choose; |
ii. | determine the size of each Award, including the number of shares of Stock subject to the Award; |
iii. | determine the type or types of each Award; |
iv. | determine the terms and conditions of each Award, including provisions for accelerated vesting upon the achievement of specified Company performance objectives; |
v. | waive compliance by a holder of an Award with any obligations to be performed by such holder under the Award and waive any terms or conditions of an Award; |
vi. | subject to the provisions of Section 7, amend or cancel an existing Award in whole or in part (and if an award is canceled, grant another Award in its place on such terms and conditions as the Committee shall specify), except that the Committee may not, without the consent of the holder of an Award, take any action under this clause with respect to such Award if such action would adversely affect the rights of such holder; |
vii. | prescribe the form or forms of any instruments to be used under the Plan, including any written notices and elections required of Participants (as defined below), and change such forms from time to time; |
viii. | adopt, amend and rescind rules and regulations for the administration of the Plan; and |
ix. | interpret the Plan and decide any questions and settle all controversies and disputes that may arise in connection with the Plan. Such determinations and actions of the Committee, and all other determinations and actions of the Committee made or taken under authority granted by any provision of the Plan, will be conclusive and will bind all parties. Nothing in this paragraph shall be construed as limiting the power of the Committee to make adjustments under Section 7 or Section 11. |
d) | Any determination of the Committee under the Plan may be made without notice or meeting of the Committee by a writing signed by a majority of the Committee members. |
6. | Plan Participation – Eligibility & Participation |
a) | Eligibility. Only Employees and members of the Board as designated by this Plan or selected by the Committee to participate in the Plan shall be eligible to participate in the Plan. |
b) | Participation – |
i. | The members of the Board and CEO shall participate in the Plan and their Awards and rights under the Plan shall be determined by the Committee. In addition, each year the CEO shall present to the Committee a list of Employees that the CEO recommends be designated as Participants for an upcoming Performance Period (or a current Performance Period with respect to a newly hired Employee), proposed Awards to such Employees, and proposed terms for the Award Agreements for the proposed Awards to such Employees. In addition, the CEO may present recommended amendments to any existing Award Agreements. |
ii. | The Committee shall consider the CEO’s recommendations and shall determine the Awards, if any, to be granted and the terms of the Award Agreements for such Awards, and any amendments to existing Award Agreements (subject to the restrictions on the authority granted to the Committee in Section 5). The Committee may also grant Awards to in its discretion. |
1. | Designation of an Employee as a Participant for any Performance Period shall not require the Committee to designate that person to be a Participant or to receive an Award in any Performance Period or to receive the same type or amount of Award as granted to the Participant in such year. Grants of Awards to Participants need not be of the same type or amount and may have different terms. Service with the Company or its Subsidiary or Affiliate prior to completion of or during a Performance Period does not entitle the Employee to participate in the Plan or vest in any interest in any Award under the Plan. |
2. | The Committee shall consider all factors that it deems relevant in selecting Participants and in determining the type and amount of their respective Awards. |
7. | Terms & Conditions Applicable to Awards Under This Plan |
a) | Types of Awards. The Awards available under the Plan shall consist of Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Stock, Performance Units, and other stock or cash Awards, as described in Section 8. |
b) | Annual Limit on Total Grants of Restricted Stock, Restricted Stock Units and Performance Stock. Notwithstanding any else in this Section 7, the Restricted Stock, Restricted Stock Units and Performance Stock granted under the Plan in any one calendar year shall not relate to more than |
c) | Limits on Individual Grants. Under the Plan, no Participant may receive in any calendar year (i) Stock Options relating to more than 150,000 shares, (ii) Restricted Stock or Restricted Stock Units that are subject to the attainment of performance criteria below relating to more than 75,000 shares, (iii) Stock Appreciation Rights relating to more than 150,000 shares, or (iv) Performance Stock relating to more than 75,000 shares. Under the Plan, the maximum cash payment that may be made to a single Participant in any calendar year under a Performance Unit Award or other cash Award shall not exceed 200% of the recipient’s salary for the performance period. |
d) | Adjustments. The shares reserved for issuance and the limitations set forth above shall be subject to adjustment in accordance with Section 11. |
e) | Additional Limits. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, distribution (whether in the form of cash, Common Stock, other securities or other property), stock split, extraordinary cash dividend, recapitalization, change in control, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Common Stock or other securities, or similar transaction(s)), the Company will not, without obtaining stockholder approval: (a) amend the terms of outstanding Stock Options or SARs to reduce the exercise price of such outstanding Stock Options or SARs; (b) cancel outstanding Stock Options or SARs in exchange for Stock Options or SARs with an exercise price that is less than the exercise price of the original Stock Options or SARs; or (c) cancel outstanding Stock Options or SARs with an exercise price below the current stock price in exchange for cash or other securities. |
8. | Types of Awards Under This Plan |
a) | Stock Option - is an Award giving the recipient the right upon exercise thereof to purchase Stock. |
i. | Types of Stock Options - |
1. | Incentive Stock Option (as defined in Section 422(b) of the Code) (any Stock Option intended to qualify as an incentive stock option being hereinafter referred to as an "ISO"). ISOs shall be awarded only to Employees. Once an ISO has been granted, no action by the Committee that would cause the Option to lose its status under the Code as an incentive stock option will be effective without consent of the Option holder. |
2. | Nonstatutory Options are not ISOs and may be granted under the Plan. An Option awarded under the Plan shall be a non-ISO unless it is expressly designated as an ISO at time of grant. |
ii. | Exercise Price - The exercise price of a Stock Option will be determined by the Committee subject to the following: |
1. | The exercise price of a Stock Option ISO shall not be less than 100% of the Fair Market Value of the Stock subject to the Option, determined as of the effective date of grant of the Option. With respect to an ISO, the exercise price for any 10% owner as described in Section 422 of the Code shall not be less than 110% of the Fair Market Value of the Stock on the date of grant. |
2. | In no case may the exercise price paid for Stock which is part of an original issue of authorized Stock be less than the par value per share of the Stock. |
iii. | Duration of Options - The latest date on which an Option may be exercised will be the tenth anniversary of the day immediately preceding the date the Option was granted, or such earlier date as may have been specified by the Committee at the time the Option was granted. In the case of a 10% owner as defined in Section 422 of the Code, the latest date on which an Option may be exercised shall be the fifth anniversary of the day immediately preceding the date the Option was granted. |
iv. | Exercise of Options; Vesting - An Option will become exercisable at such time or times, and on such conditions, as the Committee may specify. The Committee may at any time and from time to time accelerate the exercisability of an Option. Any exercise of an Option must be in writing, signed by the proper person and delivered or mailed to the Company, accompanied by (1) any documents required by the Committee and (2) payment in full in accordance with paragraph (v) below for the number of shares for which the Option is exercised. If desired, the Committee may provide for vesting prior to the date the Option becomes exercisable. |
v. | Payment for Stock - Stock purchased on exercise of an Option must be paid for as follows: (1) in cash or by check (acceptable to the Company in accordance with guidelines established for this purpose), bank draft or money order payable to the order of the Company or (2) if so permitted by the instrument evidencing his Option (or in the case of an Option which is not an ISO, by the Committee at or after the grant of the Option), (A) through the delivery of shares of Stock and which have a Fair Market Value on the last business day preceding the date of exercise equal to the exercise price, (B) during any period in which the Stock is publicly traded, by use of a broker-assisted exercises program acceptable to the Company, or (C) by any combination of the foregoing permissible forms of payment. In addition, the Company will accept a net share settlement to the extent such settlement will not cause liability accounting treatment under the applicable Generally Accepted Accounting Principles guidance. |
vi. | Repricings of Options - In no event shall the Committee cancel any outstanding Stock Option for the purpose of reissuing the Stock Option to the Participant at a lower exercise price or reduce the option price of an outstanding Stock Option without stockholder approval. |
b) | Stock Appreciation Rights - |
i. | Stock Appreciation Right ("SAR") is an Award entitling the holder on exercise to receive an amount in cash or Stock or a combination thereof (such form to be determined by the Committee) determined in whole or in part by reference to appreciation, from and after the date of grant, in the Fair Market Value of a share of Stock. SARs may be based solely on appreciation in the Fair Market Value of Stock or on a comparison of such appreciation with some other measure of market growth such as (but not limited) to appreciation in a recognized market index. The date as of which such appreciation or other measure is determined shall be the exercise date unless another date is specified by the Committee. |
ii. | Grant of Stock Appreciation Rights - Stock Appreciation Rights may be granted in tandem with, or independently of, Options granted under the Plan. |
1. | Tandem Awards - When Stock Appreciation Rights are granted in tandem with Options, (A) the Stock Appreciation Right will be exercisable only at such time or times, and to the extent, that the related Option is exercisable and will be exercisable in accordance with the procedure required for exercise of the related Option and may be exercised only when the market price of the Stock, subject to the Option, exceeds the exercise price; (B) the Stock Appreciation Right will terminate and no longer be exercisable upon the termination or exercise of the related Option, except |
2. | Exercise of Independent Stock Appreciation Rights - A Stock Appreciation Right not granted in tandem with an Option will become exercisable at such time or times, and on such conditions, as the Committee may specify. Except as otherwise determined by the Committee, any period during which a Participant who is an Employee is on an unpaid leave of absence (or other unpaid absence) from the Company shall toll the period of time over which a Stock Appreciation Right becomes exercisable. The Committee may at any time accelerate the time at which all or any part of the Right may be exercised. |
iii. | Any exercise of an independent Stock Appreciation Right must be in writing, signed by the proper person and delivered or mailed to the Company, accompanied by any other documents required by the Committee. |
c) | Restricted Stock and Restricted Stock Unit - |
i. | Grant of Restricted Stock / Restricted Stock Unit - Subject to the terms and provisions of the Plan, the Committee may grant or sell shares of Stock or Units representing an amount equivalent to the value of a share of Stock in such amounts and upon such terms and conditions as the Committee shall determine subject to the restrictions described below ("Restricted Stock / Restricted Stock Unit Agreement"). |
ii. | Restricted Stock / Restricted Stock Unit Agreement - The Committee may require, as a condition to an Award, that a recipient of a Restricted Stock / Restricted Stock Unit Award enter into a Restricted Stock / Restricted Stock Unit Award Agreement, setting forth the terms and conditions of the Award. In lieu of a Restricted Stock / Restricted Stock Unit Award Agreement, the Committee may provide the terms and conditions of an Award in a notice to the Participant of the Award, in the resolution approving the Award, or in such other manner as it deems appropriate. The stock certificate associated with the Restricted Stock shall be appropriately legended to reflect the applicable restrictions. |
iii. | Transferability and Other Restrictions - Except as otherwise provided in this Section 8c, the shares of Restricted Stock granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable period or periods established by the Committee and the satisfaction of any other conditions or restrictions established by the Committee (such period during which a share of Restricted Stock is subject to such restrictions and conditions is referred to as the "Restricted Period"). Except as the Committee may otherwise determine under Section 8c, if a Participant dies or suffers a Status Change (as defined at Section 9b) for any reason during the Restricted Period, the Company may purchase the shares of Restricted Stock subject to such restrictions and conditions for the amount of cash paid by the Participant for such shares; provided, that if no cash was paid by the Participant such shares of Restricted Stock shall be automatically forfeited to the Company. |
iv. | During the Restricted Period with respect to any shares of Restricted Stock, the Company shall have the right to retain in the Company's possession any certificate or certificates representing such shares. |
v. | Removal of Restriction - Except as otherwise provided in this Section, a share of Restricted Stock covered by a Restricted Stock grant shall become free from restrictions under the Plan upon completion of the Restricted Period, including the passage of any applicable period of time and satisfaction of any conditions to vesting. The Committee shall have the right at any time, in its sole discretion, immediately to waive or accelerate all or any part of the restrictions and conditions with regard to all or any part of the shares held by any Participant. |
vi. | Notice of Participant’s Income Tax Election at Time of Grant - Any Participant making an election under Section 83(b) of the Code with respect to Restricted Stock must give a copy of the election to the Company within ten days after filing with the Internal Revenue Service. |
vii. | Voting Rights, Dividends and Other Distributions - Except as the Committee shall otherwise determine, during the Restricted Period, Participants holding shares of Restricted Stock granted hereunder shall have no voting rights and shall not receive cash dividends and other distributions paid with respect to the shares of Restricted Stock in question, including any dividends and distributions paid in shares. All dividends and distributions shall be subject to the same restrictions and conditions as the shares of Restricted Stock with respect to which they were paid. |
viii. | Other Awards Settled with Restricted Stock - The Committee may, at the time any Award described in this Section 8 is granted, provide that any or all of the Stock delivered pursuant to the Award will be Restricted Stock. |
d) | Stock and Stock Unit – Under the Plan, the Committee may grant awards in shares of stock and/or units that are based on a value based on a share of stock that is defined by the Committee. |
e) | Performance-Based Awards - |
i. | The Committee may, at the time an Award described in Sections 8: a; b; c; d and/or e(ii) is granted, impose conditions and/or performance goals that must be met prior to the Participant's vesting and/or receipt of payment or benefit under the Award |
ii. | The Committee may also make awards entitling the Participant to receive an amount in cash upon attainment of specified performance goals (a “Cash Incentive”). Any Award or Cash Incentive made subject to performance goals shall be a "Performance Award." |
iii. | The Committee will determine the performance measures, the period or periods during which performance is to be measured, and all other terms and conditions applicable to the Performance Award, including terms and conditions intended to comply with the performance based compensation exception requirements under Section 162(m) of the Code for compensation or Awards payable to a Covered Employee. |
iv. | The performance measures to which a Performance Award is subject may be related to any or all of the following types of performance measures: return on invested capital, net operating profit (before or after tax), revenue, operating profit margin, gross margin, operating profit, earnings before income taxes, earnings (which may include earnings before interest and taxes and net earnings, and may be determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”) or adjusted to include or exclude any or all items), earnings per share (on a GAAP or non-GAAP basis), cash flow (defined as operating cash flow, free cash flow or any other defined cash flow measure), growth in any of the foregoing measures, stock price, return on equity or average shareholders’ equity, total shareholder return, growth in shareholder value relative to the moving average of the S&P 500 Index or another index, return on capital employed, return on assets or net assets, return on investment, economic value added, market shares, overhead or other expense reduction, credit rating, strategic plan development and implementation, succession plan development and implementation, improvement in workforce, diversity, customer |
9. | Events Affecting Outstanding Awards |
a) | Death or Disability - If a Participant dies or becomes Disabled, the following will apply: |
i. | All Options and Stock Appreciation Rights held by the Participant, or by a permitted transferee of the Participant, immediately prior to death or such Disability, to the extent then exercisable, may be exercised (A) in the case of an Option or Stock Appreciation Right then held by the Participant, by the Participant's executor or administrator or the person or persons to whom the Option or Right is transferred by will or the applicable laws of descent and distribution or the Participant’s guardian, or (B) in the case of an Option or Stock Appreciation Right then held by a permitted transferee of the Participant, by such permitted transferee, in either case at any time within the one year period ending with the first anniversary of the Participant's death or Disability, as the case may be (or such shorter or longer period as the Committee may determine), and shall thereupon terminate. If such a Participant becomes Disabled while holding an Option or Stock Appreciation Right and thereafter dies while the Option or Stock Appreciation Right is still exercisable, the Option or Stock Appreciation Right will be exercisable for one year from the date of death. In no event, however, shall an Option or Stock Appreciation Right remain exercisable beyond the latest date on which it could have been exercised without regard to this Section 9. All Options and Stock Appreciation Rights held by a Participant, or by a permitted transferee of a Participant, immediately prior to the Participant’s death or Disability that are not then exercisable shall accelerate and become vested at such death or Disability. |
ii. | All Restricted Stock held by the Participant or by a permitted transferee of the Participant shall accelerate and become vested at such death or Disability. |
iii. | Any payment or benefit under a Performance Award or other Stock-based Award held by the Participant or permitted transferee shall accelerate and become vested at such death or Disability. |
b) | Termination of Service (Other Than By Death or Disability) - |
i. | If (A) a Participant who is an Employee ceases to be an Employee for any reason other than death or Disability or (B) there is a termination (other than by reason of death or Disability, or satisfactory completion of the project or service as determined by the Committee) of the relationship in respect of which a non-Employee Participant was granted an Award hereunder or (C) a New Hire’s offer of employment is terminated prior to the New Hire commencing employment with the Company or the New Hire does not commence his or her employment with the Company within two months after receipt of an Award hereunder (such termination of the employment or other relationship being hereinafter referred to as a "Status Change"), then, except as the Committee may otherwise determine, the following will apply: |
1. | All Options and Stock Appreciation Rights held by the Participant or by the Participant’s transferee that were not exercisable immediately prior to the Status Change shall terminate at the time of the Status Change. Any Options or Rights that were exercisable immediately prior to the Status Change will continue to be exercisable for a period of three months (or one year in the case of retirement at or after age 62 with the consent of the Company), and shall thereupon terminate, unless the Award provides by its terms for immediate termination in the event of a Status Change. In no event, however, shall an Option or Stock Appreciation |
a. | For purposes of this paragraph, in the case of a Participant who is an Employee, a Status Change shall not be deemed to have resulted by reason of (i) a sick leave or other bona fide leave of absence approved for purposes of the Plan by the Committee, so long as the Employee's right to reemployment is guaranteed either by statute or by contract, or (ii) a transfer of employment between the Company and a Subsidiary or between Subsidiaries, or to the employment of a corporation (or a parent or subsidiary corporation of such corporation) issuing or assuming an option in a transaction to which Section 424(a) of the Code applies. |
b. | A Status Change will be deemed to have occurred, in the case of an Employee Participant, upon termination of the Participant’s employment with the Company and its Subsidiaries (whether or not the Participant continues in the service of the Company or its Subsidiaries in some capacity other than that of an employee of the Company or its Subsidiaries) and in the case of any other Participant, when the service relationship in respect of which the Award was granted terminates (whether or not the Participant continues in the service of the Company or its Subsidiaries in some other capacity). |
2. | All Restricted Stock held by the Participant at the time of the Status Change must be transferred to the Company (and, in the event the certificates representing such Restricted Stock are held by the Company, such Restricted Stock will be so transferred without any further action by the Participant) in accordance with Section 8c above. |
3. | Any payment or benefit under a Performance Award or other Stock-based Award to which the Participant was not irrevocably entitled prior to the Status Change will be forfeited and the Award canceled as of the date of such Status Change. |
c) | Change in Control - In the event of a Change in Control, all outstanding Stock Options and SARs shall become fully vested and exercisable, all restrictions on Restricted Stock and Restricted Stock Units shall be terminated, all performance goals shall be deemed achieved at target levels and all other terms and conditions met to deliver all Performance Stock, and pay out all Performance Units and Restricted Stock Units, subject to compliance with Section 409A of the Code. |
10. | General Provisions |
a) | Documentation of Awards - Awards will be evidenced by an Award Agreement or such other written instruments, if any, as may be prescribed by the Committee from time to time. The agreements shall be executed by both the Participant and the Company, or certificates, letters or similar instruments, which need not be executed by the Participant but acceptance of which will evidence agreement to the terms thereof. |
b) | Rights as a Stockholder, Dividend Equivalents - Except as specifically provided by the Plan, the receipt of an Award will not give a Participant rights as a stockholder; the Participant will obtain such rights, subject to any limitations imposed by the Plan or the instrument evidencing the Award, only upon the issuance of Stock. However, the Committee may, on such conditions as it deems appropriate, provide that a Participant will receive a benefit in lieu of cash dividends that would have been payable on any or all Stock subject to the Participant's Award had such Stock been outstanding. Without limitation, the Committee may provide for payment to the Participant of |
c) | Conditions on Delivery of Stock - |
i. | The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to remove restriction from shares previously delivered under the Plan (A) until all conditions of the Award have been satisfied or removed, and (B) until, in the opinion of the Company's counsel, the removal of the restrictions is in compliance with all applicable federal and state laws and regulations. |
ii. | If an Award is exercised by a permitted transferee or by the Participant's legal representative, the Company will be under no obligation to deliver Stock pursuant to such exercise until the Company is satisfied as to the authority of such transferee or representative. |
d) | Tax Withholding - The Company will withhold from any cash payment made pursuant to an Award an amount sufficient to satisfy all federal, state and local withholding tax requirements (the "withholding requirements"). |
i. | In the case of an Award pursuant to which Stock may be delivered, the Committee will have the right to require that the Participant or other appropriate person remit to the Company an amount sufficient to satisfy the minimum statutory tax withholding requirements, or make other arrangements satisfactory to the Committee with regard to such requirements, prior to the delivery of any Stock or removal of restrictions thereon. If and to the extent that such withholding is required, the Committee may permit the Participant or such other person to elect at such time and in such manner as the Committee provides to have the Company hold back from the shares to be delivered, or to deliver to the Company, Stock having a value calculated to satisfy the withholding requirement. The Committee may make such share withholding mandatory with respect to any Award at the time such Award is made to a Participant. The Committee may also, but need not, permit a Participant to tender previously owned shares of Stock in satisfaction of tax withholding requirements on any Award. |
ii. | If at the time an ISO is exercised the Committee determines that the Company could be liable for withholding requirements with respect to the exercise or with respect to a disposition of the Stock received upon exercise, the Committee may require as a condition of exercise that the person exercising the ISO agree (A) to provide for withholding under the preceding paragraph of this Section 10, if the Committee determines that a withholding responsibility may arise in connection with the exercise, (B) to inform the Company promptly of any disposition (within the meaning of Section 424(c) of the Code) of Stock received upon exercise, and (C) to give such security as the Committee deems adequate to meet the potential liability of the Company for other withholding requirements and to augment such security from time to time in any amount reasonably deemed necessary by the Committee to preserve the adequacy of such security. |
e) | Transferability of Awards - |
i. | No Award, unless otherwise permitted by the Committee (other than an Award in the form of an outright transfer of cash or Unrestricted Stock), may be transferred other than by will or by the laws of descent and distribution or, during a Participant’s lifetime, exercised other than by the Participant (or in the event of the Participant’s incapacity, the person or persons legally appointed to act on the Participant’s behalf). |
11. | Adjustments in the Event of Certain Transactions |
a) | In the event of a stock dividend, stock split or combination of shares, re-capitalization or other change in the Company's capitalization, or other distribution to holders of Stock other than normal |
b) | In any event referred to in paragraph (a), the Committee will also make any appropriate adjustments to the number and kind of shares of Stock or securities subject to Awards then outstanding or subsequently granted, any exercise prices relating to Awards and any other provision of Awards affected by such change. The Committee may also make such adjustments to take into account material changes in law or in accounting practices or principles, mergers, consolidations, acquisitions, dispositions or similar corporate transactions, or any other event, if it is determined by the Committee that adjustments are appropriate to avoid distortion in the operation of the Plan. |
c) | In the case of ISOs or Awards intended to qualify for the "performance-based compensation" exception under Section 162(m)(4)(C) of the Code, the adjustments described in paragraphs (a) and (b) will be made only to the extent consistent with continued qualification of the Option or other Award under Section 422 of the Code or Section 162(m) of the Code, as the case may be. |
12. | Employment or Other Rights, Etc. - Neither the adoption of the Plan nor the grant of Awards will confer upon any person any right to continued employment by the Company or any Subsidiary or Affiliate as an Employee or otherwise, or affect in any way the right of the Company or Subsidiary or Affiliate to terminate an employment, service or similar relationship at any time. Except as specifically provided by the Committee in any particular case, the loss of existing or potential profit in Awards granted under the Plan will not constitute an element of damages in the event of termination of an employment, service or similar relationship even if the termination is in violation of an obligation of the Company or any of its Subsidiaries or Affiliates to the Participant. |
13. | Effect, Amendment and Termination - Neither adoption of the Plan nor the grant of Awards to a Participant will affect the Company's right to grant to such Participant awards that are not subject to the Plan, to issue to such Participant Stock as a bonus or otherwise, or to adopt other plans or arrangements under which Stock may be issued to Employees or other persons. The Committee may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, or may at any time terminate the Plan as to any further grants of Awards, provided that (except to the extent expressly required or permitted by the Plan) no such amendment will, without the approval of the stockholders of the Company, result in a change for which stockholder approval is required in order for the Plan to continue to qualify for the award of ISOs under Section 422 of the Code or for the award of performance-based compensation under Section 162(m) of the Code, where the compensation is intended by the Committee to so comply and provided that no such amendment will, without the approval of the Participant, alter or impair any rights or obligations under any Award granted prior to the effective date of the amendment, suspension or termination of the Plan. |
14. | Governing Law - The Plan shall be construed in accordance with the General Corporation Law of the State of Georgia. |
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