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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Crocs Inc | NASDAQ:CROX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-4.09 | -3.20% | 123.60 | 123.70 | 125.50 | 127.56 | 124.31 | 126.73 | 756,294 | 00:46:22 |
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Definitive Proxy Statement
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Soliciting Material Pursuant to §240.14a-12
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CROCS, INC.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Form, Schedule or Registration Statement No.:
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Date Filed:
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1.
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elect
two
Class I directors;
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2.
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ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year
2018
;
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3.
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hold an advisory vote to approve the compensation of our named executive officers; and
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4.
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consider any other matters that properly come before the meeting or any postponement or adjournment thereof.
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BY ORDER OF THE BOARD OF DIRECTORS,
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/s/ Daniel P. Hart
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Daniel P. Hart
Executive Vice President, Chief Legal and Administrative Officer
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Executive Summary
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Frequently Asked Questions About Voting and the Annual Meeting
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Proposal 1 - Election of Directors
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Corporate Governance
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Board of Directors and Committees of the Board
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Executive Officers
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Beneficial Ownership of our Securities
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Certain Relationships and Related Person Transactions
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Director Compensation
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Executive Compensation
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Compensation Discussion and Analysis
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Compensation Committee Report
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Compensation Tables
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Report of the Audit Committee
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Proposal 2 - Ratification of the Appointment of Independent Registered Public Accounting Firm
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Proposal 3 - Advisory Vote to Approve the Compensation of our Named Executive Officers
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Other Matters
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Information about the 2018 Annual Meeting of Stockholders
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How to Vote
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2017 Business and Financial Highlights
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•
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Our ongoing initiatives resulted in improved product, more impactful marketing and a stronger brand. We focused on three strategic objectives: (1) simplifying our business to reduce costs, (2) improving the quality of our revenues, and (3) positioning ourselves to drive sustainable, profitable growth.
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•
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Revenues were $1,023.5 million. On a constant currency basis, revenues decreased 1.7% compared to the prior year reflecting the impact of planned store closures and changes in our business model.
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•
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Gross margin was
50.5%
, an increase of
220
basis points over 2016.
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•
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SG&A was $494.6 million compared to $503.2 million in 2016.
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•
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Income from operations was $17.3 million compared to a loss from operations of $6.2 million in 2016.
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•
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Cash and cash equivalents as of December 31, 2017 increased
16.6%
to
$172.1 million
compared to
$147.6 million
as of December 31, 2016, inclusive of $
50.0 million
of common stock repurchases during the year. This growth reflects the successful execution of our strategic objectives along with improved working capital management.
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•
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Inventory declined
11.3%
to
$130.3 million
as of December 31, 2017 compared to
$147.0 million
as of December 31, 2016, reflecting our continued focus on inventory management.
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1 year
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2 year
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Crocs TSR
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81.9%
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29.0%
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Crocs Percent Rank in Peer Group
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Highest
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61.8%
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Proposals and our Board’s Voting Recommendations
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Board Recommendation
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Page
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Election of Class I Directors (Proposal 1)
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Ronald L. Frasch
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FOR
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Andrew Rees
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FOR
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Ratification of our Independent Auditor (Proposal 2)
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FOR
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Advisory Vote to Approve the Compensation of our Named Executive Officers (Proposal 3)
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FOR
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Proposal 1—Election of Class I Directors (page 4)
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Name
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Age
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Primary Occupation
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Committee Memberships
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Independent
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Ronald L. Frasch
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69
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Operating Partner at Castanea Partners
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Audit; Nominating and Governance (Chair)
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Yes
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Andrew Rees
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51
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Current President and CEO of Crocs
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None
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No
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The Board recommends a vote “
FOR
” each of the Class I directors listed above.
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Proposal 2 - Ratify Independent Auditors (page 41)
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The Board recommends a vote “
FOR
” the proposal to ratify the appointment of
Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2018.
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Proposal 3 - Advisory Vote to Approve Named Executive Officer Compensation (Advisory Say-on-Pay Vote) (page 42)
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Align our executives’ compensation with our stockholders’ interests
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Hold our executives accountable to stockholders
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Assure that our total compensation program aligns with good corporate governance and best practices
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Attract and retain exemplary executive talent who are able to succeed in our fast-paced, rapidly evolving company
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Motivate our executives to achieve our financial and strategic business objectives by paying them for performance
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•
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Over 75% of our targeted 2017 compensation for our chief executive officer was in the form of performance-based bonuses or long-term equity awards.
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•
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In 2017, 105.9% of the target annual cash incentive bonus and
90.9%
of the target performance-based RSUs were earned by our executives because our company achieved significant improvements in our financial and operational performance.
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•
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Our Compensation Committee made no major changes to our overall executive compensation program in 2017.
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The Board recommends a vote “
FOR
” the advisory vote to approve the compensation
of the Company’s named executive officers.
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1.
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The election of
two
Class I directors to serve until the 2021 Annual Meeting of Stockholders.
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2.
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Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31,
2018
.
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3.
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An advisory vote to approve the compensation of our named executive officers.
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•
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FOR
the election of each of the Class I director nominees (Proposal 1);
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•
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FOR
the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending December 31,
2018
(Proposal 2); and
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•
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FOR
the advisory vote to approve the compensation of our named executive officers (Proposal 3).
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Class I terms expire at the 2018 annual meeting:
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Ronald L. Frasch
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Andrew Rees
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Gregg Ribbatt
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Class II terms expire at the 2019 annual meeting:
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Ian M. Bickley
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Doreen A. Wright
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Douglas Treff
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Class III terms expire at the 2020 annual meeting:
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Prakash A. Malwani
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Thomas J. Smach
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THE BOARD RECOMMENDS A VOTE “
FOR
” EACH OF THE ABOVE
‑
NAMED NOMINEES FOR DIRECTOR
|
Ronald L. Frasch
(Class I)
|
Mr. Frasch, age 69, has served as a member of the Board since October 2006 and as our Lead Director from November 2012 to January 2016. Since February 2014, Mr. Frasch has served as Operating Partner at Castanea Partners, a private equity firm. From June 2014 to June 2015, Mr. Frasch served as a director of EVINE Live, Inc., a Nasdaq-listed digital commerce company. Mr. Frasch served as President and Chief Merchandising Officer of Saks Fifth Avenue, a division of Saks, Incorporated, a NYSE-listed luxury fashion retailer, from February 2007 until the merger of Saks, Incorporated with Hudson’s Bay Company in November 2013. From November 2004 until January 2007, he held the post of Vice Chairperson and Chief Merchant of Saks Fifth Avenue. From January 2004 to November 2004, he was employed by Saks in a non-executive capacity. From April 2000 to January 2004, Mr. Frasch served as Chairperson and Chief Executive Officer of Bergdorf Goodman (a subsidiary of Neiman Marcus Group, Inc.) and served as President of GFT North America (a subsidiary of Gruppo GFT, based in Turin, Italy, a global producer, marketer, and distributor of fine men’s and women’s clothing, sportswear, and furnishings) from 1996 to 2000. Mr. Frasch also served as President and Chief Executive Officer of Escada USA from 1994 to 1996.
Mr. Frasch has extensive executive expertise in the fashion retail industry, which is valuable to the Board and management in understanding the consumer retail and fashion industry, including current buying trends by our wholesale customers.
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Andrew Rees
(Class I)
|
Andrew Rees, age 51, has served as a member of the Board since June 2017 and is currently the President, CEO and Principal Executive Officer of Crocs, Inc., overseeing the brand’s global strategy and operations. Mr. Rees joined Crocs as President in June 2014, and became CEO in June 2017. Mr. Rees has more than 25 years of experience in the footwear and retail industry. Prior to joining Crocs, Mr. Rees served as Managing Director of L.E.K. Consulting in Boston where he founded and led the firm’s Retail and Consumer Products Practice for 13 years. While at L.E.K., Mr. Rees served as a consultant for Crocs from 2013 to 2014, supporting the development and execution of the company’s strategic growth plan. Previously, Mr. Rees served as Vice President of Strategic Planning and Vice President of Retail Operations for Reebok International. He also held a variety of positions at Laura Ashley from 1994 to 1996.
Mr. Rees has extensive executive expertise in the footwear and retail industry and day-to-day knowledge of our operations as Chief Executive Officer.
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Ian M. Bickley
(
Class II
)
|
Mr. Bickley, age 54, has served as a member of the Board since April 2015. Mr. Bickley has served as President, Global Business Development and Strategic Alliances for Tapestry, Inc. (“Tapestry”), formerly named Coach, Inc., a leading New York design house of modern luxury accessories and lifestyle collections, since July 2017. Prior to his current role with Tapestry, Mr. Bickley served as President, International Group of Tapestry from August 2013 to July 2017, as President, Tapestry International from February 2006 to August 2013, President and Chief Executive Officer, Tapestry Japan from August 2001 to January 2006, Vice President, Tapestry Japan from 1997 to 2001 and other successively senior positions since joining Tapestry in May 1993.
Mr. Bickley brings more than 25 years of global retail and brand building experience to the Board. Since joining Tapestry in 1993, Mr. Bickley has been an important architect in the development and execution of its international businesses, through direct retail, wholesale and distributor-run businesses. Mr. Bickley also oversees development of all new and emerging markets globally for the Coach brand. This experience provides the Board with significant expertise and perspective relating to global retail operations, emerging markets and branding.
|
Doreen A. Wright
(
Class II
)
|
Ms. Wright, age 61, has served as a member of the Board since June 2011. She served as Senior Vice President and Chief Information Officer of Campbell Soup Company from 2001 to 2008. Ms. Wright also served as Interim Chief of Human Resources for Campbell Soup Company in 2002. From 1999 to 2001, Ms. Wright served as Executive Vice President and Chief Information Officer for Nabisco Inc. From 1995 to 1998, Ms. Wright held the position of Senior Vice President, Operations & Systems, Prudential Investments, for Prudential Insurance Company of America. Prior to that, she held various positions with American Express Company, Bankers Trust Corporation and Merrill Lynch & Co. From 2012 to 2017, Ms. Wright served on the Board of Directors of the WhiteWave Foods Company. From 2009 to 2013, Ms. Wright served on the Board of Directors of Dean Foods Company, a leading food and beverage company. In addition, Ms. Wright served on the Board of Directors of Citadel Broadcasting Corporation from 2010 to 2011, where she chaired the Compensation Committee; The Oriental Trading Company from 2008 to 2011, where she served on the Audit and Compensation Committees; Yankee Candle Company from 2003 to 2007, where she served on the Compensation and Audit Committees; and Conseco, Inc. from 2007 to 2010, where she served on the Audit and Enterprise Risk Committee.
Ms. Wright brings more than 30 years of leadership experience in the financial services and consumer products industries, with emphasis in the area of information technology, operations, and human resources. Ms. Wright also has extensive experience as a public company director, including service on audit, compensation and corporate governance committees.
|
Douglas J. Treff
(
Class II
)
|
Mr. Treff, age 60, has served as a member of the Board since June 2016. He currently serves as the Senior Vice President and Chief Financial Officer of World Vision, Inc., an international relief and development organization. He served as Executive Vice President and Chief Administrative Officer of Payless Holdings, Inc. from September 2007 to July 2015 and also as its Chief Financial Officer from 2012 to 2015. Mr. Treff served as Executive Vice President and Chief Administrative Officer of Sears Canada Inc. from 2006 to 2007, having been seconded to Sears Canada from Sears Holdings. Mr. Treff served as the Senior Vice President and Chief Financial Officer of Deluxe Corporation from 2000 to 2006. From 1990 to 2000, he held Chief Financial Officer and other leadership roles in finance at Wilsons The Leather Experts Inc., including serving as Vice President, Finance of Wilsons since 1993 and as Chief Financial Officer and Assistant Secretary since 1996.
Mr. Treff brings significant knowledge and expertise in accounting, finance, information technology and operations in the global retail industry. As a chief financial officer or chief administrative officer for more than 20 years, Mr. Treff has extensive experience in SEC reporting, risk management and the footwear industry, which makes him well suited to serve as the chairperson of our Audit Committee. This experience provides the Board with significant expertise and perspective relating to financial management, audit committee oversight, and global retail operations.
|
Thomas J. Smach
(
Class III
)
|
Mr. Smach, age 57, has served as the Chairperson of the Board since June 2011, and as a member of the Board since April 2005. Since 2008, Mr. Smach has been a co-founding partner of Riverwood Capital Management, a private equity firm. From January 2005 to June 2008, Mr. Smach served as the Chief Financial Officer of Flextronics International (“Flextronics”), a NASDAQ-listed electronics manufacturing services (EMS) provider. From April 2000 to December 2004, Mr. Smach served as Senior Vice President-Finance of Flextronics. From 1997 to April 2000, he served as the Senior Vice President, Chief Financial Officer and Treasurer of The Dii Group, Inc., an EMS provider and publicly-traded company that merged with Flextronics in early 2000. In addition to currently serving on the board of various private companies around the world, Mr. Smach also served on the board of various public companies in both the United States and Germany. Mr. Smach is a certified public accountant (inactive).
Mr. Smach has extensive accounting and financial management experience having served as the chief financial officer of global public companies and on the boards of both public and private companies. In addition, Mr. Smach has significant experience with international manufacturing and business from his leadership positions at Riverwood Capital Management and Flextronics. This experience is useful in light of our international operations. Mr. Smach is also well versed in SEC compliance and risk oversight, which makes him particularly well suited to serve on our Audit Committee and as the Board’s Chairperson.
|
Prakash A. Melwani
(Class III)
|
Mr. Melwani, age 59, is a Blackstone director designee and has served as a member of the Board since January 2014. Mr. Melwani is a Senior Managing Director at Blackstone Group, L.P. and is based in New York. He is the Chief Investment Officer of the Private Equity Group and chairs each of its Investment Committees. Since joining Blackstone in 2003, Mr. Melwani has led Blackstone’s investments in Crocs, Inc., Kosmos Energy, Foundation Coal, Texas Genco, Ariel Re, Pinnacle Foods, RGIS Inventory Specialists, Performance Food Group and Ascend Learning. Before joining Blackstone, Mr. Melwani was a founding partner of Vestar Capital Partners and served as its Chief Investment Officer. Mr. Melwani currently serves on the Board of Directors of Ascend Learning, RGIS Inventory Specialists and Blackstone strategic partner, Patria. Mr. Melwani served on the Board of Directors of Pinnacle Foods, Inc. through December 2015, Kosmos Energy through May 2017 and Performance Food Group through June 2017.
Mr. Melwani’s significant knowledge and expertise in finance, business, and strategic investments provide a valuable perspective to the Board. In addition, Mr. Melwani brings to the Board extensive leadership experience through his service on the boards of various companies, including other public companies in the consumer goods industry.
|
Corporate Governance Guidelines
In 2005, the Board adopted the Crocs, Inc. Corporate Governance Guidelines, which are designed to assure the continued vitality of the Board and excellence in the execution of its duties. Our Corporate Governance Guidelines establish the practices and procedures of the Board with respect to board composition and member selection, board independence, board meetings and involvement of senior management, management succession planning, board committees and the evaluation of senior management and the Board. The Board periodically reviews our Corporate Governance Guidelines and updates them as necessary to reflect improved corporate governance practices and changes in regulatory requirements. A copy of our Corporate Governance Guidelines is available in the “Investor Relations” section of our website at www.crocs.com.
|
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Majority Vote Director Resignation Policy
Our Corporate Governance Guidelines contain a Director Resignation Policy. Under this policy, any nominee for director who receives a greater number of votes “withheld” from his or her election than votes “for” such election is required to offer his or her resignation to the Board following certification of the stockholder vote. Within 90 days following the certification of the vote, the independent directors on the Board would consider the offer of resignation and determine whether to accept or reject the tendered resignation. This policy does not apply in contested elections.
|
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Director Independence
NASDAQ listing standards require that the Board consist of a majority of independent directors. The Board has determined that Messrs. Bickley, Frasch, Melwani, Smach, and Treff and Ms. Wright are independent directors as defined by NASDAQ listing standards.
The Board makes a determination regarding the independence of each director annually based on relevant facts and circumstances. Applying the standards and independence criteria defined by the NASDAQ listing standards, the Board has made a determination as to each independent director that no relationships exist which, in the opinion of the Board, would interfere with the exercise of his or her independent judgment in carrying out the responsibilities of a director.
In making its determination of Mr. Melwani’s independence, the Board considered Mr. Melwani’s role as a Senior Managing Director of the Blackstone Group.
|
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Communicating with Directors
Stockholders or other interested parties who wish to communicate with the Board or with specified individual directors may do so by mailing such written communication to: Corporate Secretary, Crocs, Inc., 7477 East Dry Creek Parkway, Niwot, Colorado 80503. The Corporate Secretary will review all correspondence and will forward to the Board or an individual director a summary of the correspondence received and copies of correspondence that the Corporate Secretary determines is required to be directed to the attention of the Board or such individual director. The Board or any individual director may at any time request copies and review all correspondence received by the Corporate Secretary that is intended for the Board or such individual director.
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Board Leadership
The Board does not have a policy regarding separation of the roles of Chief Executive Officer and Chairperson of the Board. The Board believes it is in our best interests to make that determination based on current circumstances. The Board has determined that an independent director serving as Chairperson is in the best interests of our stockholders at this time. This structure ensures a greater role of independent directors in the active oversight of our business, including risk management oversight, and in setting agendas and establishing Board priorities and procedures. This structure also allows the Chief Executive Officer to focus to a greater extent on the management of our day-to-day operations.
|
Risk Oversight
The full Board is actively involved in oversight of risks that could affect us. The Board implements its risk oversight function both as a whole and through delegation to its committees. These committees meet regularly and report back to the full Board. The Audit Committee has primary oversight responsibility with respect to financial risks as well as oversight responsibility for our overall risk assessment and risk management policies and systems. The Audit Committee oversees our procedures for the receipt, retention, and treatment of complaints relating to accounting and auditing matters and oversees our management of legal and regulatory compliance systems. The Audit Committee regularly interacts with our accounting and legal personnel, internal audit team, and our outside auditors in fulfillment of this oversight function. The Compensation Committee oversees risks relating to our compensation plans and programs. The Compensation Committee has reviewed and considered our compensation policies and programs in light of the Board’s risk assessment and management responsibilities and will do so in the future on an annual basis. The Compensation Committee believes that we have no compensation policies and programs that give rise to risks reasonably likely to have a material adverse effect on us. The Compensation Committee also, on at least an annual basis, considers and evaluates the independence and potential conflicts of interest of its advisors, including our compensation consultants, Meridian Compensation Partners. The Information Technology Committee oversees risks related to our information technology systems, processes and procedures, including risk related to cybersecurity.
The Chief Legal and Administrative Officer serves as our chief compliance officer, and is charged with oversight of our enterprise risk management program and assessing and managing our legal, regulatory, and other compliance obligations on a global basis. The Chief Legal and Administrative Officer regularly reports to the Audit Committee, and the full Board as appropriate, regarding our enterprise risk management program and legal and compliance affairs. The Chief Legal and Administrative Officer and Chief Financial Officer also coordinate the day-to-day risk management process and report directly to the Audit Committee. The internal audit team performs an enterprise risk assessment annually, and updates the Audit Committee regarding our risk analyses, assessments, risk mitigation strategies, and activities. Senior management updates the Audit Committee at least annually, or more frequently as needed, regarding our directors and officers insurance coverage and on matters regarding certain financial risks.
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Worldwide Code of Ethics and Committee Charters
We have adopted a Worldwide Code of Ethics that applies to all directors and employees, including our principal executive, financial, and accounting officers. The Worldwide Code of Ethics is posted in the “Investor Relations” section of our website at www.crocs.com. We intend to satisfy the requirements under Item 5.05 of Form 8-K regarding disclosure of amendments to, or waivers from, provisions of our Worldwide Code of Ethics that apply to our directors and principal executive, financial, and accounting officers by posting such information on our website. The Audit Committee Charter, Compensation Committee Charter, Governance and Nominating Committee Charter, and Information Technology Committee Charter are also available in the “Investor Relations” section of our website at www.crocs.com. Any person may request a copy of the Worldwide Code of Ethics or committee charters free of charge by submitting a written request to: Corporate Secretary, Crocs, Inc., 7477 East Dry Creek Parkway, Niwot, Colorado 80503.
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Average Director Tenure:
5 Years
|
|
Average Director Age:
58
|
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Name
|
Audit
Committee
|
Compensation
Committee
|
Governance and Nominating Committee
|
Information Technology Committee
|
Thomas J. Smach*
|
✓
|
|
✓
|
|
Ian Bickley
|
|
✓
|
|
|
Ronald L. Frasch
|
✓
|
|
✓
**
|
|
Prakash A. Melwani
|
|
✓
|
✓
|
|
Andrew Rees
|
|
|
|
|
Gregg S. Ribatt
|
|
|
|
✓
|
Doreen A. Wright
|
|
✓
**
|
|
✓**
|
Douglas J. Treff
|
✓
**
|
|
|
✓
|
Name
|
|
Age
|
|
Position(s)
|
Andrew Rees
|
|
51
|
|
President and Chief Executive Officer
|
Daniel P. Hart
|
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59
|
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Executive Vice President, Chief Legal and Administrative Officer
|
Carrie W. Teffner
|
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51
|
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Executive Vice President and Chief Financial Officer
|
•
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each person (or group of affiliated persons) who is known by us to own beneficially more than 5% of our outstanding common stock or convertible preferred stock;
|
•
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each current director or nominee;
|
•
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each of the current named executive officers listed in the Summary Compensation Table below; and
|
•
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all current directors and executive officers as a group.
|
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Common Stock
|
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Series A Convertible Preferred Stock
|
|||||||
Name of Beneficial Owner
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Shares
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Percent
|
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Shares
|
|
Percent
|
|||
5% Stockholders:
|
|
|
|
|
|
|
|
|
|||
Blackstone Capital Partners VI L.P.
(1)
|
|
2,479
|
|
|
*
|
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200,000
|
|
|
100%
|
|
AllianceBernstein L.P.
(2)
|
|
7,118,192
|
|
|
10.4%
|
|
—
|
|
|
—
|
|
Blackrock, Inc.
(3)
|
|
9,106,707
|
|
|
13.3%
|
|
—
|
|
|
—
|
|
The Vanguard Group
(4)
|
|
6,186,735
|
|
|
9.1%
|
|
—
|
|
|
—
|
|
Dimensional Fund Advisors LP.
(5)
|
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4,226,550
|
|
|
6.2%
|
|
—
|
|
|
—
|
|
Directors:
|
|
|
|
|
|
|
|
|
|||
Ian M. Bickley
|
|
65,558
|
|
|
*
|
|
—
|
|
|
—
|
|
Ronald L. Frasch
|
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109,809
|
|
|
*
|
|
—
|
|
|
—
|
|
Prakash A. Melwani
|
|
—
|
|
|
*
|
|
—
|
|
|
—
|
|
Gregg S. Ribatt
(6)
|
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255,047
|
|
|
*
|
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1,000
|
|
|
*
|
|
Thomas J. Smach
(7)
|
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282,457
|
|
|
*
|
|
—
|
|
|
—
|
|
Douglas J. Treff
|
|
54,076
|
|
|
*
|
|
—
|
|
|
—
|
|
Doreen A. Wright
(8)
|
|
52,218
|
|
|
*
|
|
—
|
|
|
—
|
|
Officers:
|
|
|
|
|
|
|
|
|
|||
Andrew Rees
(9)
|
|
289,205
|
|
|
*
|
|
—
|
|
|
—
|
|
Carrie W. Teffner
|
|
109,489
|
|
|
*
|
|
—
|
|
|
—
|
|
Daniel P. Hart
(10)
|
|
233,601
|
|
|
*
|
|
—
|
|
|
—
|
|
All current directors and executive officers as a group
(11)
|
|
1,451,460
|
|
|
2.1%
|
|
1,000
|
|
|
*
|
*
|
Less than 1%
|
(1)
|
Reflects 198,503 shares of convertible preferred stock directly held by Blackstone Capital Partners VI L.P. (“BCP VI”), 497 shares of convertible preferred stock directly held by Blackstone Family Investment Partnership VI-ESC L.P., and 2,479 shares of common stock directly held by Blackstone Management Partners L.L.C., an indirect subsidiary of The Blackstone Group L.P. Also reflects 1,000 shares of convertible preferred stock held directly by Mr. Ribatt that BCP VI may be deemed to beneficially own pursuant to an Assignment and Assumption Agreement between Gregg S. Ribatt and BCP VI.
|
(2)
|
Based solely on a Schedule 13G/A filed with the SEC on February 13, 2018. The address for AllianceBernstein L.P. is 1345 Avenue of the Americas, New York, New York 10105.
|
(3)
|
Based solely on a Schedule 13G/A filed with the SEC on January 19, 2018. The address for Blackrock, Inc. is 55 East 52
nd
Street, New York, New York 10055.
|
(4)
|
Based solely on a Schedule 13G/A filed with the SEC on February 9, 2018. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
|
(5)
|
Based solely on a Schedule 13G/A filed with the SEC on February 9, 2018.The address for Dimensional Fund Advisors LP. is 6300 Bee Cave Road, Austin, Texas, 78746.
|
(6)
|
Includes 1,000 shares of convertible preferred stock held directly by Mr. Ribatt that BCP VI may be deemed to beneficially own pursuant to an Assignment and Assumption Agreement between Mr. Ribatt and BCP VI.
|
(7)
|
Shares beneficially owned include (i) 92,500 shares subject to options exercisable within 60 days of March 31, 2018; (ii) 70,310 restricted stock units that become immediately vested upon the earlier of Mr. Smach’s separation of service from the Board or upon a change in control; and (iii) 12,200 shares held as custodian for Mr. Smach’s child under the New York Uniform Gifts to Minors Act, over which Mr. Smach exercises voting and investment power.
|
(8)
|
Includes 42,251 restricted stock units that become immediately vested upon the earlier of Ms. Wright’s separation of service from the Board or upon a change in control.
|
(9)
|
Includes 289,205 shares held by the V&M Rees Revocable Trust, in which Mr. Rees in a trustee and exercises voting and investment power.
|
(10)
|
Shares beneficially owned include 20,831 shares subject to options exercisable within 60 days of March 31, 2018.
|
(11)
|
Shares beneficially owned include 113,331 shares of common stock subject to options that are exercisable or issuable within 60 days of March 31, 2018 and 112,561 restricted stock units that become immediately vested upon certain directors’ separation of service from the Board or upon a change in control
|
•
|
The convertible preferred stock ranks senior to our common stock with respect to dividend rights and rights on liquidation, winding-up and dissolution;
|
•
|
The Blackstone Purchasers are entitled to cumulative dividends payable quarterly in cash at a rate of 6% per annum of the stated value of $1,000 per share;
|
•
|
If we fail to make timely dividend payments to the holders of our convertible preferred stock, the dividend rate will increase to 8% per annum until such time as all accrued but unpaid dividends have been paid in full;
|
•
|
The Blackstone Purchasers are entitled to receive any dividends declared or paid on our common stock and are entitled to vote together with the holders of our common stock as a single class, in each case, on an as-converted basis;
|
•
|
The Blackstone Purchasers have certain limited special approval rights, including with respect to the issuance by us of
pari passu
or senior equity securities;
|
•
|
The Blackstone Purchasers may, at any time, require us to convert their shares of convertible preferred stock into shares of common stock at an implied conversion price of $14.50 per share, subject to certain adjustments;
|
•
|
At our election, all or a portion of the convertible preferred stock will be convertible into the relevant number of shares of common stock on or after the third anniversary of the Closing, if the closing price of the common stock equals or exceeds $29.00 for 20 consecutive trading days;
|
•
|
The conversion rate is subject to customary anti-dilution and other adjustments subject to certain share caps and other restrictions;
|
•
|
At any time after the eighth anniversary of the Closing, we will have the right to redeem, and the Blackstone Purchasers will have the right to require us to repurchase, all or any portion of the convertible preferred stock at 100% of the stated value, plus all accrued but unpaid dividends; and
|
•
|
Upon certain change in control events involving us, the Blackstone Purchasers can require us to repurchase their shares of convertible preferred stock at 101% of the stated value plus all accrued but unpaid dividends.
|
Name
|
|
Fees Earned or
Paid in Cash ($)
(1)
|
|
Stock Awards ($)
(2)
|
|
Option Awards ($)
|
|
Total ($)
|
||||
Ian M. Bickley
|
|
—
|
|
|
200,006
|
|
|
—
|
|
|
200,006
|
|
Ronald L. Frasch
|
|
125,000
|
|
|
90,003
|
|
|
—
|
|
|
215,003
|
|
Jason Giordano
(3)
|
|
184,890
|
|
|
—
|
|
|
—
|
|
|
184,890
|
|
Prakash A. Melwani
|
|
205,000
|
|
|
—
|
|
|
—
|
|
|
205,000
|
|
Gregg S. Ribatt
(4)
|
|
55,000
|
|
|
90,003
|
|
|
—
|
|
|
145,003
|
|
Thomas J. Smach (Chairman)
|
|
177,500
|
|
|
162,502
|
|
|
—
|
|
|
340,002
|
|
Douglas J. Treff
|
|
5,000
|
|
|
220,005
|
|
|
—
|
|
|
225,005
|
|
Doreen A. Wright
|
|
155,000
|
|
|
90,003
|
|
|
—
|
|
|
245,003
|
|
Name
|
|
Options
Outstanding at
December 31, 2017
|
|
Unvested Restricted Stock Awards
Outstanding at
December 31, 2017
|
||
Ian M. Bickley
|
|
—
|
|
|
8,048
|
|
Ronald L. Frasch
|
|
—
|
|
|
—
|
|
Jason Giordano
|
|
—
|
|
|
—
|
|
Prakash A. Melwani
|
|
—
|
|
|
—
|
|
Gregg S. Ribatt
|
|
—
|
|
|
138,954
|
|
Thomas J. Smach (Chairman)
|
|
100,000
|
|
|
70,310
|
|
Douglas J. Treff
|
|
—
|
|
|
9,510
|
|
Doreen A. Wright
|
|
—
|
|
|
42,251
|
|
•
|
Andrew Rees, President and Chief Executive Officer
|
•
|
Carrie W. Teffner, Executive Vice President and Chief Financial Officer
|
•
|
Daniel P. Hart, Executive Vice President, Chief Legal and Administrative Officer
|
•
|
Gregg S. Ribatt, former Chief Executive Officer
|
|
Executive Summary
|
|
•
|
Our ongoing initiatives resulted in improved product, more impactful marketing and a stronger brand. We focused on three strategic objectives: (1) simplifying our business to reduce costs, (2) improving the quality of our revenues, and (3) positioning ourselves to drive sustainable, profitable growth.
|
•
|
Revenues were $1,023.5 million. On a constant currency basis, revenues decreased 1.7% compared to the prior year reflecting the impact of planned store closures and changes in our business model.
|
•
|
Gross margin was
50.5%
, an increase of
220
basis points over 2016.
|
•
|
SG&A was $494.6 million compared to $503.2 million in 2016.
|
•
|
Income from operations was $17.3 million compared to a loss from operations of $6.2 million in 2016.
|
•
|
Cash and cash equivalents as of December 31, 2017 increased
16.6%
to
$172.1 million
compared to
$147.6 million
as of December 31, 2016, inclusive of $
50.0 million
of common stock repurchases during the year. This growth reflects the successful execution of our strategic objectives along with improved working capital management.
|
•
|
Inventory declined
11.3%
to
$130.3 million
as of December 31, 2017 compared to
$147.0 million
as of December 31, 2016, reflecting our continued focus on inventory management.
|
•
|
Emphasis on Pay-for-Performance
: In 2017, the Committee continued to use performance metrics and focus on “at risk” pay arrangements which we believe have a strong connection to creating value for stockholders.
|
•
|
2017 Pay Decisions
: In 2017, we increased the base salary of Mr. Rees related to his promotion to Chief Executive Officer. Our annual cash incentive plan paid out at 105.9% of target and our performance-based RSU’s vested at 90.9% of target. Please see below for further discussion of these decisions.
|
•
|
Performance Metrics Used in 2017 Drive Alignment with the Company’s Strategic Priorities
: For 2017, the Committee selected adjusted earnings before interest and taxes, adjusted free cash flow and certain non-financial strategic operating measures as the performance metrics for the annual incentive plan and revenue and operating margin as the performance measures for the performance-based RSU awards. The selection of these metrics diversifies the performance goals among our short- and long-term programs while also supporting our Company’s strategic priorities.
|
•
|
Non-Financial Performance Metrics for Short-Term Incentive Program
: The Committee weighted 25% of the target 2017 annual incentive awards to non-financial objectives associated with on-time deliveries, clog silhouette growth and e-commerce performance. The non-financial objectives are measurable performance metrics with rigorous and difficult to achieve goals. The Committee believes that these non-financial performance goals are key drivers in Crocs’ short- and long-term transformation, which, if achieved, will ultimately help drive additional stockholder value over the long term.
|
•
|
Sign-On Performance Award Thresholds Not Earned
: The performance thresholds were not achieved on the significant sign-on performance-based RSU grants made to Mr. Ribatt in early 2015, and were not achieved for the grants made to Mr. Rees in 2014 or Ms. Teffner in late 2015. Although the value of such awards have been reflected in the Summary Compensation Table for the applicable years, none of these performance-based RSUs have actually been earned to date. Further, such awards will not be earned unless the Company’s stock price increases significantly from its current price.
|
•
|
Successful Internal CEO Transition
: We successfully transitioned our Chief Executive Officer during 2017. In February 2017, in connection with his appointment to Chief Executive Officer, effective in June 2017, we supplemented Mr. Rees’ offer letter to provide that Mr. Rees’ annual salary would be increased to $950,000 and his annual incentive target would be increased to 115% of his annual salary. In addition, the value of Mr. Rees’ long term annual incentive award for 2017 was increased to
$1.56 million
and he was granted a one-time award of options to purchase 200,000 shares of common stock, vesting ratably on each of the first three anniversaries of the effective date of his appointment. The Committee believes this compensation arrangement is reasonable and necessary to attract, retain and motivate a high quality Chief Executive Officer. The arrangement provides that a significant portion of Mr. Rees’ total potential compensation is tied to company performance and the significant equity component aligns Mr. Rees’ interests with those of our stockholders. For 2017, 75% of Mr. Rees’s target compensation was performance-based or at-risk.
|
ü
Independent Compensation Committee
. The Committee, comprised solely of independent directors, approves all compensation for our named executive officers.
|
|
ü
Independent compensation consultant.
The Committee retains an independent compensation consultant.
|
|
ü
Assessment of compensation risk.
The Committee assesses our compensation policies and programs and determined that we have no compensation policies and programs that give rise to risks reasonably likely to have a material adverse effect on the Company.
|
|
ü
Performance-based pay.
The Committee focuses on paying our executives for their performance. The Committee believes that the 2017 payout of the targeted annual cash incentive and targeted performance-based RSUs demonstrate the Committee’s alignment of pay with performance given the company’s strong 2017 total shareholder return.
|
|
ü
Annual say-on-pay vote.
We hold annual advisory say-on-pay votes to approve executive compensation and in 2017 received support of 99% on such proposal.
|
|
ü
Mix of CEO’s pay.
75% of the 2017 total target compensation for Mr. Rees was performance-based or at-risk.
|
|
ü
Weight of financial metrics
. The Committee continued to weight 2017 performance measures towards those impacting profitability and included non-financial measures that it believed were key to the success of our business transformation strategies.
|
|
ü
Use of multiple performance metrics.
The Committee used multiple complementary performance measures for the 2017 annual incentive and performance RSUs to align the executive compensation program to a broader perspective of company performance. There is no overlap between the performance measures used in our annual incentive program and performance RSUs.
|
|
ü
Double-trigger vesting and reasonable change in control protections.
We maintain a reasonable change in control plan (“CIC Plan”). The CIC Plan provides for “double-trigger” vesting with a definition of “change in control” consistent with our stockholder-approved equity plans. In order to keep management focused on the best interests of our stockholders during potentially uncertain periods, the CIC Plan provides our named executive officers with reasonable compensation protections upon a change in control followed by a termination without cause or for good reason.
|
|
ü
Stock ownership guidelines.
Our Board adopted robust stock ownership guidelines that our officers and non-employee directors are expected to meet within five years.
|
|
ü
Clawback.
In the case of a financial restatement, annual and long-term incentive awards are subject to the Company’s Recovery of Executive Compensation Policy and any clawback or recoupment policy adopted by us pursuant to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
|
û
No excise tax gross-ups.
We do not provide our management with “excise tax gross-ups” in the event of a change in control.
|
|
û
Ban on hedging and pledging.
We do not allow our management or directors to engage in hedging transactions on our stock or to pledge our stock to secure loans or other obligations.
|
|
û
No repricing
.
Our equity plans do not allow repricing of stock option or stock appreciation rights without stockholder approval.
|
|
û
No excessive executive benefit programs.
We do not provide our management with pensions or any other enhanced benefit programs beyond those that are typically available to all other employees other than a voluntary deferred compensation plan for senior executives and a limited supplemental retirement plan.
|
|
û
No excessive perquisites.
Our management receives minimal perquisites.
|
|
û
No “single trigger” vesting.
Our CIC Plan provides for “double-trigger” vesting upon a change in control.
|
|
Align our executives’ compensation with our stockholders’ interests
|
|
Hold our executives accountable to stockholders
|
|
Assure that our total compensation program aligns with good corporate governance and best practices
|
|
|
Attract and retain exemplary executive talent who are able to succeed in our fast-paced, rapidly evolving company
|
|
Motivate our executives to achieve our financial and strategic business objectives by paying them for performance
|
|
Compensation Element
|
Objective
|
Characteristics
|
Base Salary:
|
Compensate executives for their level of experience, responsibility and individual performance
Help attract and retain talent
|
Fixed component; evaluated annually
Determined by factors such as executive’s job responsibilities, sustained performance in role/potential and internal equity
|
Annual Cash Incentives:
|
Promote achieving our annual corporate financial goals, as well as other objectives deemed important to our long-term success
Align management and stockholder interests
|
Variable, performance-based component
Target opportunity is set based on factors such as executive’s job responsibilities, sustained performance in role/potential and internal equity
Actual payout depends on the Company’s performance and individual contribution
|
Long-Term Incentives:
|
Promote achieving our long-term corporate financial goals with the acquisition of common stock through RSUs
Align management with stockholder interests
Provide long-term retention incentives
|
Variable, performance-based component
Annual equity grant is set based on factors such as executive’s job responsibilities, sustained performance in role/potential and internal equity
3 year vesting period
Actual value realized will vary based on actual company performance
|
Severance and Change in Control Programs:
|
Facilitate attraction and retention of high caliber executives in a competitive labor market in which formal severance plans are common
|
Contingent component; only payable if the executive’s employment is terminated under certain circumstances and, in the case of a change in control, to help provide continuity of management through the transition
|
Caleres, Inc.
|
Genesco Inc.
|
Perry Ellis International, Inc.
|
Columbia Sportswear Co.
|
G III Apparel Group, Ltd.
|
Skechers U.S.A., Inc.
|
Deckers Outdoor Corp.
|
Kate Spade & Co.
|
Steven Madden, LTD
|
DSW Inc.
|
lululemon athletica inc.
|
Wolverine Worldwide, Inc.
|
Fossil, Inc.
|
Oxford Industries, Inc.
|
|
|
Target Compensation
|
|
Named Executive Officer
|
|
2017 Base Salary
|
|
Increase Over
2016 Base Salary
|
|
|||
Andrew Rees
|
|
$
|
950,000
|
|
|
36
|
%
|
*
|
Carrie W. Teffner
|
|
$
|
682,500
|
|
|
5
|
%
|
|
Daniel P. Hart
|
|
$
|
523,688
|
|
|
—
|
%
|
|
Named Executive Officer
|
|
Annual Incentive Plan Target
(as a percentage of Base Salary)
|
|
Andrew Rees
|
|
115
|
%
|
Carrie W. Teffner
|
|
85%
|
|
Daniel P. Hart
|
|
75%
|
|
2017 Performance Goal Targets
|
|
Weighting
|
|
Actual Performance
|
|
Weighted 2017 Actual Performance as a Percentage of Target
|
Adjusted earnings before interest and taxes
(1)
: $30.8 million
|
|
37.5%
|
|
83.8% of Target achieved
|
|
31.4%
|
Adjusted free cash flow
(2)
: $57.0 million
|
|
37.5%
|
|
154.3% of Target Achieved
|
|
57.8%
|
Objectives associated with: on-time deliveries, clog silhouette growth and e-commerce performance
|
|
25%
|
|
2 of 3 Targets Achieved
|
|
16.6%
|
TOTAL:
|
|
|
|
|
|
105.9%
|
(1)
|
Adjusted earnings before interest and taxes is calculated by excluding interest expenses, tax expense, foreign currency changes and non-recurring entries from GAAP net income (loss) attributable to common stockholders.
|
(2)
|
Adjusted free cash flow is calculated by modifying adjusted earnings before interest and taxes (as defined in the footnote above) by: subtracting capital expenditures; adding year-over-year changes in inventory, accounts receivable and accounts payable; and adding depreciation, amortization and stock based compensation expenses.
|
Time-Based RSUs
|
|
Performance-Based RSUs
|
||||
|
Performance Goals
|
|
Potential Awards
|
|
Further Time Vesting
|
|
Vest in three annual installments beginning one year after the date of grant
|
|
Achievement of 2017 revenue and operating margin targets
|
|
Executive may earn from 50% to 200% of the target number of RSUs based on the level of achievement of the performance goal - no RSUs are earned if performance falls below established threshold goals
|
|
Earned RSUs vest 33% upon satisfaction of performance goal and 33% in each of the next two years
|
2017 Performance RSU Goal Targets
|
|
Actual Performance
|
|
Weighting
|
|
Weighted 2017 Actual Performance as a Percentage of Target
|
Revenue
(1)
: $1,036 million
|
|
$1,014.9 million
|
|
50%
|
|
46.6%
|
Operating margin
(2)
: 3.0%
|
|
2.8%
|
|
50%
|
|
44.3%
|
TOTAL:
|
|
|
|
|
|
90.9%
|
|
Grant Years
|
|
Percent Earned
|
|
|
2012
|
|
—%
|
|
|
2013
|
|
—%
|
|
|
2014
|
|
39%
|
|
|
2015
|
|
25%
|
|
|
2016
|
|
33%
|
|
|
2017
|
|
91%
|
|
|
Additional Considerations
|
|
Stock Ownership
Guidelines
|
In June 2013, the Committee modified our stock ownership guidelines to ensure that our executive officers have a meaningful stake in the equity of the Company and to further align the interests of our executives with the long-term interests of our stockholders. The guidelines require that each of our named executive officers own shares of our common stock in an amount equal in value to a specified multiple (5x for our Chief Executive Officer and 3x for all other named executive officers) of such named executive officer’s base salary, to be achieved by the fifth anniversary of (i) the adoption of the modified guidelines (for our existing executive officers) or (ii) the date of hire for new executive officers. All of our executive officers are making progress towards their respective ownership multiples and are still within the five-year phase-in period for compliance.
|
Clawback Policy
|
Under our Recovery of Executive Compensation Policy, at the discretion of the Committee, executives may be required to repay awards to us if within two years of an award under our annual incentive plan and equity incentive plan: (i) we are required to restate our financial statements due to fraud or willful misconduct involving the executive; or (ii) the executive took part in any fraud, negligence or breach of fiduciary duty.
We have also adopted a policy whereby any annual and longer-term incentive compensation awards granted to management will be subject to any other clawback or recoupment policy adopted by us, including pursuant to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
|
Prohibition on Hedging and Pledging
|
We do not allow our management or directors to engage in hedging transactions on our stock or to pledge our stock to secure loans or other obligations.
|
No Tax Gross-Ups in our CIC Agreements
|
None of our change in control agreements with our executive officers contain excise tax gross-up provisions.
|
Double Trigger Provisions in our CIC Agreements
|
We maintain a reasonable change in control plan. The CIC Plan provides for “double-trigger” vesting with a definition of “change in control” consistent with our stockholder-approved equity plans. In order to keep management focused on the best interests of our stockholders during potentially uncertain periods, the CIC Plan provides our named executive officers with reasonable compensation protections upon a change in control followed by a termination without cause or for good reason.
|
Equity Granting Practices
|
The Committee has generally determined to make our annual equity award grants at the regular meeting of the Committee held in the first quarter of each year. The Committee meeting date, or the next business day if the meeting falls on a day where the NASDAQ Global Select Market is closed for trading, is typically the effective grant date for the grants.
We also may grant equity awards (e.g., options, restricted stock) to recognize increased responsibilities or special contributions, attract new hires, retain executives or recognize certain other special circumstances that occur throughout the year. The effective date of these grants is determined based on the timing of the recognition or recruitment event and approved on or in advance of the effective date of the grant. The exercise/grant price is the fair market value of our common stock on the effective date. The Committee approves all equity grants to executive officers. We do not permit repricing of stock options without stockholder approval.
|
Deductibility of Executive Compensation
|
Section 162(m) of the Internal Revenue Code limits the deductibility of certain compensation to $1 million paid to certain officers as a business expense in any tax year. When the Committee made its decisions for 2017 compensation, the tax code provided that compensation that qualified as “performance-based” was excluded from the $1 million deductibility limit if, among other requirements, the compensation was payable only upon attainment of pre-established, objective performance goals under a plan approved by our stockholders. The Committee does not have a policy requiring all compensation paid to our executive officers to be fully deductible under Section 162(m).
Legislation signed into law in December 2017 (“Tax Reform”), however, expanded the number of individuals covered by the Section 162(m) deductibility limit and repealed the exception for performance-based compensation, effective for taxable years beginning after December 31, 2017. Long-term incentive compensation and annual incentive awards approved by the Compensation Committee prior to the Tax Reform for our chief executive officer and those executive officers whose overall compensation was likely to exceed $1 million was generally structured to meet the requirements for deductibility for purposes of Section 162(m). As a result of the Tax Reform, compensation paid to our covered executive officers in excess of $1 million may not be deductible, unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. In 2018, the Committee consider the Tax Reform and its application and impact, if any, on our compensation programs and what is in the best interests of the Company.
|
Name and Principal Position
|
|
Year
|
|
Salary ($)
|
|
Bonus ($)
|
|
Stock Awards ($)
(1)
|
|
Option Awards ($)
(2)
|
|
Non-Equity Incentive Plan Compensation ($)
|
|
All Other Compensation ($)
(3)
|
|
Total ($)
|
|||||||
Andrew Rees
(5)
|
|
2017
|
|
841,396
|
|
|
—
|
|
|
1,564,000
|
|
|
474,800
|
|
|
1,024,634
|
|
|
19,480
|
|
|
3,924,311
|
|
President and Chief Executive Officer
|
|
2016
|
|
700,000
|
|
|
—
|
|
|
1,500,002
|
|
|
—
|
|
|
175,000
|
|
|
26,781
|
|
|
2,401,783
|
|
|
2015
|
|
700,000
|
|
|
—
|
|
|
1,867,224
|
|
|
—
|
|
|
35,000
|
|
|
25,626
|
|
|
2,627,850
|
|
|
Carrie W. Teffner
(6)
|
|
2017
|
|
673,850
|
|
|
—
|
|
|
952,000
|
|
|
—
|
|
|
605,351
|
|
|
50,457
|
|
|
2,281,838
|
|
Executive Vice President and Chief Financial Officer
|
|
2016
|
|
650,000
|
|
|
—
|
|
|
951,090
|
|
|
—
|
|
|
138,125
|
|
|
33,030
|
|
|
1,772,245
|
|
|
2015
|
|
70,000
|
|
|
75,000
|
|
|
1,255,660
|
|
|
—
|
|
|
—
|
|
|
142
|
|
|
1,400,802
|
|
|
Daniel P. Hart
|
|
2017
|
|
523,688
|
|
|
—
|
|
|
476,000
|
|
|
—
|
|
|
415,939
|
|
|
20,837
|
|
|
1,436,463
|
|
Executive Vice President, Chief Legal and Administrative Officer
|
|
2016
|
|
523,688
|
|
|
—
|
|
|
618,211
|
|
|
—
|
|
|
98,192
|
|
|
26,619
|
|
|
1,266,710
|
|
|
2015
|
|
523,688
|
|
|
125,000
|
|
|
557,500
|
|
|
—
|
|
|
15,711
|
|
|
26,233
|
|
|
1,248,132
|
|
|
Gregg S. Ribatt
(4)
|
|
2017
|
|
416,539
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,072,690
|
|
|
2,489,228
|
|
Former Chief Executive Officer
|
|
2016
|
|
950,000
|
|
|
—
|
|
|
1,799,998
|
|
|
—
|
|
|
273,125
|
|
|
25,469
|
|
|
3,048,592
|
|
|
2015
|
|
883,616
|
|
|
—
|
|
|
4,095,934
|
|
|
—
|
|
|
43,856
|
|
|
11,496
|
|
|
5,034,902
|
|
|
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
|
|
All Other Stock Awards: Number of Shares of Stock or Units
(#)
|
|
All Other Stock Awards: Number of Stock Options (#)
|
|
Exercise or Base Price of Option Awards ($)
|
|
Grant Date Fair Value of Stock and Option Awards
(1)
($)
|
||||||||
Name
|
|
Type of Award
|
|
Grant
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|
||||||
Andrew Rees
|
|
Annual Incentive Award
|
|
|
|
—
|
|
1,092,500
|
|
2,185,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Stock Options
|
|
6/1/17
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
200,000
|
|
6.98
|
|
474,800
|
|
|
Time-Based RSUs
|
|
3/17/17
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
75,900
|
|
—
|
|
—
|
|
516,120
|
|
|
Performance-Based RSUs
|
|
3/17/17
|
|
—
|
|
—
|
|
—
|
|
77,050
|
|
154,100
|
|
308,200
|
|
—
|
|
—
|
|
—
|
|
1,047,880
|
|
Carrie W. Teffner
|
|
Annual Incentive Award
|
|
|
|
—
|
|
572,773
|
|
1,145,545
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Time-Based RSUs
|
|
3/17/17
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
46,200
|
|
—
|
|
—
|
|
314,160
|
|
|
Performance-Based RSUs
|
|
3/17/17
|
|
—
|
|
—
|
|
—
|
|
46,900
|
|
93,800
|
|
187,600
|
|
—
|
|
—
|
|
—
|
|
637,840
|
|
Daniel P. Hart
|
|
Annual Incentive Award
|
|
|
|
—
|
|
392,766
|
|
785,531
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Time-Based RSUs
|
|
3/17/17
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
23,100
|
|
—
|
|
—
|
|
157,080
|
|
|
Performance-Based RSUs
|
|
3/17/17
|
|
—
|
|
—
|
|
—
|
|
23,450
|
|
46,900
|
|
93,800
|
|
—
|
|
—
|
|
—
|
|
318,920
|
(1)
|
Mr. Ribatt was not granted any incentive awards in 2017.
|
(2)
|
The aggregate grant date fair value for the performance-based RSUs for all named executive officers was calculated based on the target number of RSUs.
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||||||||
Name
|
|
Number of Securities Underlying Unexercised Options
Exercisable
|
|
Number of Securities Underlying Unexercised Options
Unexercisable
|
|
Option Exercise Price
($)
|
|
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
($)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(1)
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)
|
|||||||
Andrew Rees
|
|
—
|
|
|
200,000
|
|
|
6.98
|
|
|
06/01/27
|
|
166,098
|
|
(2)
|
2,099,479
|
|
|
387,126
|
|
|
4,893,273
|
|
Carrie W. Teffner
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
111,092
|
|
(3)
|
1,404,203
|
|
(3)
|
173,948
|
|
|
2,198,703
|
|
Daniel P. Hart
|
|
20,831
|
|
—
|
|
|
3.99
|
|
|
06/15/19
|
|
56,498
|
|
(4)
|
714,135
|
|
(4)
|
46,900
|
|
|
592,816
|
|
|
Gregg S. Ribatt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
124,076
|
|
(5)
|
1,568,321
|
|
(5)
|
—
|
|
|
—
|
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||
Name
|
|
Number of Shares Acquired on Exercise (#)
|
|
Value Realized on Exercise ($)
|
|
Number of Shares Acquired on Vesting (#)
|
|
Value Realized on Vesting ($)
(1)
|
||||
Andrew Rees
|
|
—
|
|
|
—
|
|
|
65,425
|
|
|
450,448
|
|
Carrie W. Teffner
|
|
—
|
|
|
—
|
|
|
45,804
|
|
|
466,993
|
|
Daniel P. Hart
|
|
—
|
|
|
—
|
|
|
30,046
|
|
|
206,955
|
|
Gregg S. Ribatt
|
|
—
|
|
|
—
|
|
|
89,202
|
|
|
630,360
|
|
•
|
an amount equal to such named executive officer’s severance payment percentage times the sum of (i) the named executive officer’s annual base salary in effect on the date immediately prior to the change in control and (ii) the greater of (x) the named executive officer’s target annual bonus for the year in which the change in control occurs and (y) the average annual bonus payments actually made to the named executive officer in the three years prior to the year in which the change in control occurs;
|
•
|
full vesting of any time-based equity awards held by the named executive officer;
|
•
|
vesting at the target performance level of any performance-based equity awards held by the named executive officer;
|
•
|
if the named executive officer is age 55 or over, payment by us of the employer and employee premiums for continued health coverage for the named executive officer and his/her covered dependents until the named executive officer becomes
|
•
|
if the named executive officer is under age 55, payment by us of the employer and employee premiums for continued health coverage for the named executive officer and his/her covered dependents for the lesser of: (i) 18 months following cessation of employment or (ii) the period for which the named executive officer is eligible for and elects such continued health coverage.
|
•
|
if a Qualifying Termination occurs prior to the fourth anniversary of his or her respective start date and prior to satisfaction of the Tier I Performance Condition or 2x Performance Condition, as applicable (each as defined in his or her respective offer letter), then a pro-rated percentage of such RSU award will remain outstanding and eligible to vest in full if and when the performance condition is satisfied prior to the fourth anniversary of his or her respective start date, with such pro-rated percentage equal to the number of full months to have elapsed between his or her start date and the date of such Qualifying Termination divided by 48; and
|
•
|
if a Qualifying Termination occurs prior to the fourth anniversary of his or her respective start date and prior to satisfaction of the Tier I Performance Condition or 2x Performance Condition, as applicable, then a pro-rated percentage of the RSU award will remain outstanding and eligible to vest on the fourth anniversary of his or her respective start date at a 20% level (subject to further proration) if the Tier III Performance Condition or 1.5x Performance Condition, as applicable (each as defined in his or her respective offer letter) is satisfied or at a 40% level (subject to further proration) if the Tier II Performance Condition or 1.75x Performance Condition, as applicable (each as defined in his or her respective offer letter) is satisfied, in each case, at any time during the three-month period ending on the fourth anniversary of his or her
|
|
|
Involuntary Termination without Cause or Resignation for Good Reason
|
|
Involuntary Termination without Cause or Resignation for Good Reason within Two Years Following a Change in Control
|
||||||||||||||||||||
Name
|
|
Severance
(1)
($)
|
|
Acceleration of Equity Awards
(1)
($)
|
|
Total ($)
|
|
Severance ($)
|
|
Bonus ($)
|
|
Health
Benefits ($)
|
|
Acceleration
of Equity
Awards ($)
|
|
Total ($)
|
||||||||
Andrew Rees
|
|
1,900,000
|
|
|
—
|
|
|
1,900,000
|
|
|
2,375,000
|
|
|
2,731,250
|
|
|
10,282
|
|
|
6,992,751
|
|
|
12,109,283
|
|
Carrie W. Teffner
|
|
1,246,623
|
|
|
—
|
|
|
1,246,623
|
|
|
1,684,625
|
|
|
1,431,931
|
|
|
10,282
|
|
|
3,602,906
|
|
|
6,729,744
|
|
Daniel P. Hart
|
|
1,361,586
|
|
|
616,807
|
|
|
1,978,393
|
|
|
1,047,374
|
|
|
785,531
|
|
|
45,126
|
|
|
1,306,951
|
|
|
3,184,982
|
|
|
2017
|
|
2016
|
||||
Audit fees
(1)
|
$
|
2,342,000
|
|
|
$
|
2,830,450
|
|
Audit‑related fees
(2)
|
540,710
|
|
|
501,025
|
|
||
Tax fees
(3)
|
402,470
|
|
|
198,200
|
|
||
Total fees
|
$
|
3,285,180
|
|
|
$
|
3,529,675
|
|
(1)
|
Audit fees relate to professional services rendered in connection with the audit of our annual financial statements and internal control over financial reporting and services attendant to, or required by, statute or regulation, such as: (i) consents and other audit services related to SEC and other regulatory filings; (ii) accounting consultation related to the audit; and (iii) statutory audit requirements in foreign countries.
|
(2)
|
Audit-related fees substantially relate to services rendered in connection with statutory audits.
|
(3)
|
Tax fees include professional services rendered in connection with tax compliance, tax advice, tax consulting and tax planning.
|
THE BOARD RECOMMENDS A VOTE “
FOR
” THE RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2018.
|
THE BOARD RECOMMENDS A VOTE “
FOR
” THE ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.
|
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