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TABLE OF CONTENTS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant ý |
Filed by a Party other than the Registrant o |
Check the appropriate box: |
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under §240.14a-12
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NEW YORK & COMPANY, INC. |
(Name of Registrant as Specified In Its Charter) |
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
Payment of Filing Fee (Check the appropriate box): |
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials. |
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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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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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NOTICE OF 2015 ANNUAL MEETING
OF STOCKHOLDERS AND
PROXY STATEMENT |
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May 5,
2015
Dear
New York & Company, Inc. Stockholder:
You
are cordially invited to attend the Company's 2015 Annual Meeting of Stockholders, which will be held at 10:00 a.m., Eastern Daylight Time, on Thursday, June 18, 2015
at the Company's corporate headquarters, 330 West 34th Street, 9th Floor, New York, New York 10001.
The
Notice of Annual Meeting of Stockholders and the Proxy Statement that follow describe the business to be conducted at the meeting.
It
is important that your shares be represented and voted at the meeting, regardless of the size of your holdings. Whether or not you plan to attend the meeting, we encourage you to vote
on the matters for consideration.
You
may vote your shares as soon as possible through any of the voting options available to you as described in the enclosed Proxy Statement.
We
appreciate your continued interest and support in New York & Company, Inc.
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Sincerely, |
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Gregory J. Scott Chief Executive Officer |
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NEW YORK & COMPANY, INC.
330 West 34th Street, 9th Floor
New York, New York 10001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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TIME AND DATE |
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10:00 a.m., Eastern Daylight Time on Thursday, June 18, 2015. |
PLACE |
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New York & Company, Inc.'s corporate headquarters at: |
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330 West 34th Street |
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9th Floor |
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New York, New York, 10001 |
ITEMS OF BUSINESS |
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To elect ten members to the board of
directors. |
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To ratify the appointment of Ernst &
Young LLP as the Company's independent registered public accounting firm for the 2015 fiscal year. |
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To transact such other business as may
properly come before the Annual Meeting and any adjournment or postponement. |
RECORD DATE |
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You can vote if you are a stockholder of record as of Friday, April 24, 2015. |
INTERNET AVAILABILITY |
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In accordance with U.S. Securities and Exchange Commission rules, the Company is using the Internet as its primary means of furnishing the proxy materials to its stockholders. Rather than sending
stockholders a paper copy of the proxy materials, the Company is sending a notice with instructions for accessing the materials and voting via the Internet. The Company believes this method of distribution makes the proxy distribution process more
efficient and less costly, and will limit the impact on the environment. This Proxy Statement and the 2014 Annual Report to Stockholders are available at www.proxyvote.com. |
PROXY VOTING |
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It is important that your shares be represented and voted at the Annual Meeting. You can vote your shares on the Internet at www.proxyvote.com, by
telephone by calling 1-800-690-6903, or by completing and returning your proxy card. Voting instructions are printed on your proxy card or included with your proxy materials. You can revoke a proxy prior to its exercise at the Annual Meeting by
following the instructions in the accompanying Proxy Statement. |
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Gregory J. Scott Chief Executive Officer |
May 5,
2015
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TABLE OF CONTENTS
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PROXY STATEMENT
Why did I receive these proxy materials?
The Company is providing this Notice of Annual Meeting of Stockholders, Proxy Statement, voting instructions and Annual Report (the
"proxy materials") in connection with the solicitation by the board of directors of New York & Company, Inc. ("New York & Company," the "Company," "we," "us" or "our"), a Delaware
corporation, of proxies to be voted at the Company's 2015 Annual Meeting of Stockholders and at any adjournment or postponement thereof.
It
is anticipated that the Notice of Internet Availability of Proxy Materials is first being sent to stockholders on or about May 5, 2015. The Proxy Statement and the form of
proxy relating to the Annual Meeting are first being made available to stockholders on or about May 5, 2015.
You
are invited to attend the Company's Annual Meeting of Stockholders on Thursday, June 18, 2015 (the "Meeting"), beginning at 10:00 am, Eastern Daylight Time. The Meeting will
be held at 330 West 34th Street, 9th Floor, New York, New York 10001. Stockholders will be admitted to the Meeting beginning at 9:30 am, Eastern
Daylight Time. Seating will be limited.
Why did I receive in the mail a notice regarding the Internet Availability of Proxy Materials?
Under rules adopted by the U. S. Securities and Exchange Commission ("SEC"), the Company is providing access to its proxy materials
over the Internet. Accordingly, the Company is sending a Notice of Internet Availability of Proxy Materials ("Notice") to beneficial owners. If you received a Notice by mail, you will not receive a
printed copy of the proxy materials unless you request one. The Notice will tell you how to access and review the proxy materials over the Internet at www.proxyvote.com. The Notice also tells you how to
access your proxy card to vote on the Internet. If you received a Notice by mail and would like to
receive a printed copy of the Company's proxy materials, please follow the instructions included in the Notice.
What should I bring with me to attend the Annual Meeting?
Stockholders must present a form of personal identification in order to be admitted to the Meeting.
If
your shares are held beneficially in the name of a bank, broker or other holder of record and you plan to attend the Meeting, you must also present proof of your ownership of New
York & Company stock, such as a bank or brokerage account statement, to be admitted to the Meeting.
No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the Meeting.
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
If your shares are registered directly in your name with New York & Company's transfer agent, Computershare Trust Company, N.A.,
you are considered the "stockholder of record" with respect to those shares. The proxy materials have been sent directly to you by New York & Company.
If
your shares are held in a stock brokerage account or by a bank or other holder of record, those shares are held in "street name." You are considered the "beneficial owner" of shares
held in street name. The proxy materials have been forwarded to you by your broker, bank or other holder of record who is considered, with respect to those shares, the stockholder of record. As the
beneficial owner, you have the right to direct your broker, bank or other holder of record on how to vote your shares by using the proxy or voting instructions included in the mailing or by following
their instructions for voting by telephone or on the Internet.
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Who is entitled to vote at the Annual Meeting?
Stockholders of record at the close of business on April 24, 2015, the record date for the Meeting, are entitled to receive
notice of and vote at the Meeting. You are entitled to one vote on each matter presented at the Annual Meeting for each share of common stock you owned as of the record date. At the close of business
on April 24, 2015, there were 64,191,812 shares of the Company's common stock outstanding.
How do I vote?
You may vote using any of the following methods:
The Company encourages you to vote and submit your proxy over the Internet at www.proxyvote.com.
You may vote by telephone by calling 1-800-690-6903.
Be sure to complete, sign and date the proxy card or voting instruction card and return it in the prepaid envelope. If you are a
stockholder of record and you return your signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote the shares represented by that proxy as
recommended by the board of directors.
If
you are a stockholder of record, and the prepaid envelope is missing, please mail your completed proxy card to: Broadridge, 51 Mercedes Way, Edgewood, NY 11717, Attention: Vote
Processing.
All stockholders may vote in person at the Meeting. You may also be represented by another person at the Meeting by executing a proper
proxy designating that person. If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or other holder of record and present it to the inspector of election with
your ballot to be able to vote at the Meeting.
What can I do if I change my mind after I vote my shares?
If you are a stockholder of record, you can revoke your proxy before it is exercised
by:
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- written notice to: Corporate Secretary, New York & Company, 330 West 34th Street,
9th Floor, New York, NY 10001;
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- timely delivery of a valid, later-dated proxy;
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- timely submission of a later-dated proxy via the Internet;
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- timely submission of a later-dated proxy via the telephone; or
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- voting by ballot at the Meeting.
If
you are a beneficial owner of shares, you may submit new voting instructions by contacting your bank, broker or other holder of record. You may also vote in person at the Meeting if
you obtain a legal proxy as described in the answer to the previous question.
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What is "householding" and how does it affect me?
The Company has adopted a procedure approved by the SEC called "householding." Under this procedure, stockholders of record who have
the same address and last name will receive only one copy of the Company's proxy materials, unless one or more of these stockholders notifies the Company that they wish to continue receiving
individual copies. This procedure will reduce the Company's printing costs and postage fees.
Stockholders
who participate in householding will continue to receive separate proxy cards. Also, householding will not in any way affect dividend check mailings, if any.
If
you are eligible for householding, but you and other stockholders of record with whom you share an address currently receive multiple copies of the proxy materials, or if you hold
stock in more than one account, and in either case you wish to receive only a single copy of each of these documents for your household, please make a written request to: Corporate Secretary, New
York & Company, 330 West 34th Street, 9th Floor, New York, NY 10001. If multiple stockholders of record who have the same address received only
one copy of these proxy materials and would like to receive additional copies, or if they would like to receive a copy for each stockholder living at that address in the future, send a written request
to the address above.
Beneficial
owners can request information about householding from their banks, brokers or other holders of record.
What is a quorum for the Annual Meeting?
Under the Company's Amended and Restated Bylaws, the holders of a majority of the outstanding shares of common stock entitled to vote
at the Meeting, present in person or represented by proxy, constitute a quorum. Abstentions and "broker non-votes" are counted as present and entitled to vote for purposes of determining a quorum.
What are the voting requirements for each of the proposals?
A plurality of the votes cast is required for the election of directors, which means that director nominees with the most affirmative
votes are elected to fill the available seats. For the proposal to elect directors, abstentions and "broker non-votes" will not affect the outcome of the proposal, except to the extent that the
failure to vote for a director nominee results in another nominee receiving a larger number of votes.
The
ratification of the appointment of Ernst & Young LLP to serve as the Company's independent registered public accounting firm for fiscal year 2015 requires the
affirmative "FOR" vote of a majority of those shares present in person or represented by proxy and entitled to vote on them at the Meeting. Broker non-votes will have no effect on the outcome of this
proposal and abstentions will have the effect of a vote "AGAINST" for purposes of this proposal.
If
you hold shares beneficially in street name and do not provide your broker with voting instructions, your shares may constitute "broker non-votes." Broker non-votes occur on a matter
when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. These matters are referred to as "non-routine" matters. The
proposal to elect ten directors to the board is considered "non-routine" and therefore cannot be voted by your broker or bank without your instruction. The proposal to ratify the appointment of
Ernst & Young LLP as the Company's independent registered public accounting firm for fiscal year 2015 is considered "routine" and therefore may be voted by your broker or bank in its
discretion if you do not provide instructions.
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Could other matters be decided at the Annual Meeting?
At the date this Proxy Statement was first sent to stockholders, the Company did not know of any matters to be raised at the Meeting
other than those referred to in this Proxy Statement.
If
other matters are properly presented at the Meeting for consideration, the individuals named in the proxy card will have the discretion to vote on those matters for you.
Who will pay for the cost of this proxy solicitation?
The Company will pay for the cost of this proxy solicitation. The Company does not intend to solicit proxies other than by use of the
mail or website posting, but certain officers and regular employees of the Company or its subsidiaries, without additional compensation, may use their personal efforts, by telephone or otherwise, to
obtain proxies.
Who will count the vote?
All votes will be tabulated by Broadridge, the inspector of elections appointed for the Meeting.
Other information.
The Company's Annual Report on Form 10-K for the 52-week fiscal year ended January 31, 2015 ("fiscal year 2014")
accompanies this Proxy Statement. No material contained in the Annual Report is to be considered a part of the proxy solicitation material. The fiscal years referred to in this Proxy Statement as
"fiscal year 2012" and "fiscal year 2013" refer to the 53-week and 52-week fiscal years that ended on February 2, 2013 and February 1, 2014, respectively. The 52-week fiscal year ending
January 30, 2016 is referred to herein as "fiscal year 2015."
The
contents of the Company's corporate website (http://www.nyandcompany.com) are not incorporated by reference into this Proxy Statement.
PROPOSALS REQUIRING YOUR VOTE
ITEM 1Election of Directors
The Company's board of directors currently has eleven members. Ten of the eleven current board members are standing for re-election to
hold office until the next Annual Meeting. Jill Beraud notified the Company on February 20, 2015 that she will not stand for re-election as a member of the Company's board of directors upon the
expiration of her current term, which expires as of the date of the Company's 2015 Annual Meeting of Stockholders. Ms. Beraud did not cite any disagreement on any matter relating to the
Company's operations, policies or practices. The Company's board of directors has approved a reduction in the number of its members to ten effective with the ensuing board term.
The
individuals named in the proxy card intend to vote the proxy (if you are a stockholder of record) for the election of each of these nominees unless you indicate on the proxy card
that your vote should be withheld from any or all of the nominees.
Each
nominee elected as a director will continue in office until his or her successor has been elected and qualified, or until his or her earlier resignation, retirement or death.
The
Company expects each nominee for election as a director to be able to serve if elected. If any nominee is not able to serve, proxies will be voted in favor of the remainder of those
nominated and may be voted for substitute nominees, unless the board chooses to reduce the number of directors serving on the board.
The
Company believes that the board of directors as a whole possesses the right diversity of experience, qualifications and skills to oversee and address the key issues facing the
Company. In
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addition,
the Company believes that each of these directors possesses the key attributes that the Company seeks in a director, including strong, effective decision-making, communication and leadership
skills. Set forth below is additional information regarding the specific experience, qualifications, attributes and skills of each director and nominee that led the Company's nomination and governance
committee and the board of directors to conclude that he or she should serve as a director.
The board of directors unanimously recommends a vote FOR the election of these nominees as directors.
Nominees for Director
The following table sets forth the name, age and principal position of each of the Company's ten nominees for director positions.
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Gregory J. Scott |
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Chief Executive Officer and Director |
Bodil M. Arlander |
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51 |
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Director |
David H. Edwab |
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60 |
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Director |
James O. Egan |
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66 |
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Director |
Lori H. Greeley |
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55 |
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Director |
John D. Howard |
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62 |
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Director |
Grace Nichols |
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68 |
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Director and Non-Executive Chair of the Board of Directors |
Michelle Pearlman |
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45 |
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Director |
Richard L. Perkal |
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61 |
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Director |
Arthur E. Reiner |
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Director |
Gregory J. Scott was named Chief Executive Officer in February 2011 and served as President since June 2010. Mr. Scott was
appointed to the Company's board of directors on August 18, 2010. Mr. Scott brings more than 20 years of retail industry experience to the Company. Most recently, Mr. Scott
served as the Chief Executive Officer of Bebe Stores from February 2004 to January 2009 and also served as a member of their board of directors from August 2004 to January 2009. Prior to Bebe,
Mr. Scott served as President of Arden B., a division of Wet Seal, Inc., from May 2000 to January 2004. Mr. Scott has also held senior level merchandising positions at Ann Taylor
Stores. Mr. Scott began his retail career in the executive training program at Macy's West, a division of Federated Department Stores, Inc., where he held several merchandising
positions. Mr. Scott holds a B.A. from UCLA. In considering Mr. Scott as a candidate for director of the Company, the board reviewed his extensive experience in the retail and apparel
industries, both at the management and board levels.
Bodil M. Arlander has served as a director since 2002 and is a founding partner of Moxie Capital, LLC and has been a partner there
since January 2009. Until May 2008, she was a Partner of Bear Stearns Merchant Banking, LLC, an affiliate of Bear, Stearns & Co. Inc., where she was a Senior Managing
Director and which she joined in April 1997. Between 1991 and 1997, she worked in the Mergers and Acquisitions Group of Lazard & Co. LLC. Prior to entering the finance industry,
Ms. Arlander worked throughout Europe in the fashion and beauty industries. Ms. Arlander currently serves as a member of the board of directors for the privately held company Crew
Knitwear, LLC. She previously served as a member of the board of directors for the publicly traded company Aéropostale, Inc. and for several privately held companies. In
considering Ms. Arlander as a director of the Company, the board reviewed her extensive experience in the analysis of the apparel and retail sectors as an investment banker and investor, her
overall leadership skills and her experience serving on the board of directors of relevant companies.
David H. Edwab has served as a director since 2003. Mr. Edwab has served as an officer and director of Men's Wearhouse, a publicly
traded company, for over 20 years, starting as Vice President
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Finance and Director in 1991, serving as Chief Operating Officer from 1993 to 1997, as President in 1997 and as Executive Vice Chairman. Mr. Edwab currently serves as non-executive Vice
Chairman of the board of directors of Men's Wearhouse. Mr. Edwab previously was a Senior Managing Director and Head of the Retail Group in the Investment Banking Department at Bear,
Stearns & Co. Inc. Mr. Edwab previously served as a Senior Advisor to Bear Stearns Merchant Banking, LLC, an affiliate of Bear
Stearns & Co. Inc. and the predecessor to Irving Place Capital Management, L.P. until 2008, a private-equity firm focused on making equity investments in middle-market
companies. Mr. Edwab previously served as lead director and chairman of the audit committee and compensation committee of Aeropostale, Inc. and was a partner with Deloitte &
Touche LLP. Mr. Edwab is currently lead director, chairman of the compensation committee, and a member of the audit committee of the publicly traded company Vitamin Shoppe, Inc.
and is involved with other privately owned companies. In considering Mr. Edwab as a director of the Company, the board reviewed his extensive retail and financial background and his experience
having served on the boards of directors of retailers.
James O. Egan has served as a director since March 2012. Mr. Egan served as a Managing Director of Investcorp
International, Inc., an alternative asset management firm specializing in private equity, hedge fund offerings and real estate and technology investments, from 1998 through 2008.
Mr. Egan was the partner in charge, M&A Practice, U.S. Northeast Region for KPMG LLP from 1997 to 1998 and served as the Senior Vice President and Chief Financial Officer of Riverwood
International, Inc. from 1996 to 1997. Mr. Egan began his career with PricewaterhouseCoopers (Coopers & Lybrand) in 1971 and served as partner from 1982 to 1996 and a member of
the Board of Partners from 1995 to 1996. He currently serves as a director of PHH Corporation where he is non-executive Chairman of the board and member of the compensation, audit, and governance
committees. Mr. Egan has more than 40 years of business experience across numerous industries (including retail) and public and private companies, including 25 years of public
accounting experience and 10 years of private equity experience and service on the board of directors of other public and private companies. Mr. Egan brings to the Board of Directors a
wide range of strategic, operational, financial and governance qualifications and skills to contribute as a director.
Lori H. Greeley was appointed as a director effective May 4, 2015. She is currently Chief Executive Officer of Frederick's of
Hollywood. From January 2007 until April 2013, Ms. Greeley was Chief Executive Officer of Victoria's Secret Stores, the leading specialty retailer of women's intimate apparel, other apparel,
fragrances and cosmetics. Over the course of her twenty year career at Victoria's Secret Stores, Ms. Greeley held a number of executive level merchandising and management roles, including
Executive Vice President and General Merchandising Manager for various categories and member of the Executive Committee from 1995 until January 2007. Ms. Greeley currently sits on the board of
directors of Brown Shoe Company, Inc., a publicly traded company. Ms. Greeley was recently charged with overseeing Frederick's of Hollywood through its filing for bankruptcy under
Chapter 11 of the United States Bankruptcy Code in April 2015. Ms. Greeley is active with Bucknell University, including serving as a member of the Advisory Board of the Bucknell
Institute for Public Policy, and as a speaker for the University's Institute for Leadership in Technology and Management program. Ms. Greeley has spent her entire career in the fashion and
retailing businesses. In considering Ms. Greeley as a director of the Company, the board considered her extensive retail industry experience, and her strong skills in merchandising, marketing,
operations and leadership.
John D. Howard has served as a director since 2002. He is currently the Chief Executive Officer of Irving Place Capital, the firm formerly
known as Bear Stearns Merchant Banking, LLC, and has been so since 2008. He was a Senior Managing Director at Bear Stearns Merchant Banking, LLC, and the head of the merchant banking
business of Bear, Stearns & Co. Inc. from its inception in 1997 to 2008. From 1990 to 1997, he was a co-CEO of Vestar Capital Partners, Inc., a private-equity investment
firm specializing in management buyouts. Previously, he was a Senior Vice President of Wesray Capital Corporation, a private investment firm specializing in leveraged buyouts. Mr. Howard also
currently serves as a director of Aéropostale, Inc., a publicly traded company; rag & bone, Inc. and several other
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private
companies. As a result of these and other professional experiences, Mr. Howard possesses particular knowledge and experience in finance and capital structure, and has extensive
experience as an investor in the retail industry, each of which strengthen the board of directors' collective qualifications, skills and knowledge base.
Grace Nichols was appointed to the role of non-executive chair of the Company's board of directors in February 2011 and has served as a
director since 2008. Ms. Nichols spent more than 20 years at Limited Brands, including 14 years as Chief Executive Officer of Victoria's Secret Stores from 1992 until she retired
in January 2007. Ms. Nichols also served on the board of directors of Intimate Brands, Inc. from 1995 to 1999. Prior to joining Limited Brands, Ms. Nichols held various senior
merchandising positions in teen's and women's apparel at The Broadway Southern California divisions of Carter, Hawley, Hale, Inc. Ms. Nichols currently sits on the board of directors of
Men's Wearhouse and served as a director of Pacific Sunwear of California, Inc. from 2007 to March 20, 2012, both publicly traded companies. In considering Ms. Nichols as a
director of the Company, the board reviewed her extensive experience as a senior executive in the retail industry and her ability to understand and analyze the operational and management challenges
associated with large retailers.
Michelle Pearlman has served as a director since May 2011. Ms. Pearlman is currently a senior advisor to Irving Place Capital with
over 23 years of retail, consumer, marketing, and e-commerce focused experience. She most recently was Senior Vice President, President of the Jewelry Business Unit, for Sears Holdings
Corporation, leading the P&L for fine jewelry, watches, and costume jewelry for over 2,000 Kmart and Sears stores and online sales. Prior to this, she spent four years at Ann Taylor, Inc.,
where she was an Executive Vice President, leading the E-commerce Business Unit and direct marketing for Ann Taylor and Loft divisions from 2004 to 2008. She joined Ann Taylor after serving as an
Associate Principal with McKinsey & Co. from 1999 to 2004, focusing on retail and consumer products. She started her career at Procter & Gamble and held various positions in sales
and marketing over her seven year tenure. Ms. Pearlman has an M.B.A from the University of Chicago and received her B.A. from Stanford University. She was named to Crain's Chicago Business "40
under 40" in 2009. In considering Ms. Pearlman as a director of the Company, the board reviewed her experience as a senior leader in the retail industry, her operational abilities, and her
expertise in e-commerce and marketing.
Richard L. Perkal has served as a director since 2004. Mr. Perkal is currently a Partner of Irving Place Capital, the firm formerly
known as Bear Stearns Merchant Banking, LLC. He was a Senior Managing Director at Bear Stearns Merchant Banking, LLC, which he joined in July 2000. Previously, Mr. Perkal was a
senior partner in the law firm of Kirkland & Ellis LLP where he headed the Washington, D.C. corporate transactional practice, primarily focusing on leveraged buyouts and
recapitalizations. Mr. Perkal currently serves as a director of Vitamin Shoppe, Inc., a publicly traded company, Pet Supplies "Plus," and CAbi, LLC. As a result of these and other
professional experiences, Mr. Perkal
possesses particular knowledge and experience in legal/regulatory, finance and capital structure matters that strengthens the board of directors' collective qualifications, skills and experience.
Arthur E. Reiner has served as a director of the Company since 2003. Mr. Reiner served as Chairman of Finlay
Enterprises, Inc. and Finlay Fine Jewelry Corporation from 1999 to 2009. From 1996 to 2009, Mr. Reiner was Chief Executive Officer of Finlay Enterprises. Mr. Reiner joined Finlay
in 1995. Finlay Enterprises, Inc. filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code in August 2009. Mr. Reiner began his retailing career in 1962 at
Bamberger's, then a division of R. H. Macy's, and held various positions with Macy's, including Chairman and Chief Executive Officer of Macy's Northeast and Macy's East until 1995. Mr. Reiner
also previously served as a member of the board of directors for R. H. Macy's. A graduate of Rutgers University, Mr. Reiner served as Chairman of the Education Foundation of the Fashion
Institute of Technology from 1985 to 1995 and was named Executive Vice President in 1995. In considering Mr. Reiner as a director of the Company, the board reviewed his particular experience in
the retail, apparel and other related industries, both at the management and board levels.
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Board and Committee Membership
Overview
The Company's business, property and affairs are managed under the direction of the Company's board of directors. The board of
directors has established three committees consisting of an audit committee, a nomination and governance committee, and a compensation committee. The Company has a majority of independent directors on
its board. Its audit committee, nomination and governance committee, and compensation committee are composed entirely of independent directors. Members of the Company's board of directors are kept
informed of its business through discussions with the Company's Chief Executive Officer and other officers by reviewing
materials provided to them and by participating in meetings of the board of directors and its committees.
Board Leadership Structure
The board of directors has the responsibility for selecting the appropriate leadership structure for the Company. In making leadership
structure determinations, the board of directors considers many factors, including the specific needs of the business and what is in the best interests of the Company's stockholders. The Company's
current leadership structure is comprised of a non-executive chair of the board of directors, three board committees, and a Chief Executive Officer. Although the board of directors does not currently
have a formal policy as to whether the roles of chair of the board of directors and Chief Executive Officer should be vested in the same individual or different individuals, the board of directors
believes that the separation of the roles of chair of the board of directors and Chief Executive Officer is currently in the best interest of the Company's stockholders. This structure ensures a
greater role for the independent directors in the oversight of the Company and active participation of the independent directors in setting agendas and establishing board priorities and procedures.
Further, this structure permits the Chief Executive Officer to focus on the management of the Company's day-to-day operations.
The Board's Role in Risk Oversight
The board of directors has an active role in the oversight of management and the Company's risks. This oversight is conducted primarily
through the audit committee, but the full board of directors has retained responsibility for general strategic oversight of risk. The Company's internal audit department performs an annual
comprehensive company-wide risk assessment which encompasses a review of all departments and their significant areas of risk, including operational, compliance, and financial risks. This assessment
process is designed to gather data regarding the important risks that could impact the Company's ability to achieve its objectives and execute its strategies. The assessment is reviewed by the
Company's Chief Executive Officer, President and Chief Operating Officer, and the Chief Financial Officer, who then presents the assessment to the audit committee of the board of directors to
facilitate discussion of high risk areas.
The
compensation committee reviews the Company's compensation policies and practices for all employees in the context of risk management. This assessment includes a review of the mix
between short-term and long-term compensation, base salary versus incentive compensation, performance metrics, and the type of equity awards and level of equity holdings. Based upon this review, the
compensation committee has determined that the Company's compensation practices are not reasonably likely to have a material adverse effect on the Company.
The
nomination and governance committee assists the board of directors in fulfilling its oversight responsibilities with respect to the management of risks associated with board
composition, corporate governance policies and practices, ethics and related matters.
8
Table of Contents
Board Meetings
The board of directors of New York & Company, Inc. is currently comprised of eleven directors, ten of whom are standing
for re-election. During fiscal year 2014, the board of directors met five times. Each director attended at least 75 percent of the aggregate of (1) the number of meetings the board of
directors held during the period in which he or she was a director and (2) the number of meetings of all committees of the board held during the period in which he or she served as a member of
the respective committee. Two members of the board of directors attended the Company's Annual Meeting on June 16, 2014. All board members are encouraged to attend the Annual Meeting.
Executive Sessions
The non-management members of the Company's board of directors hold regularly scheduled executive sessions without management that are
chaired by the presiding director. Grace Nichols is the non-executive chair of the board of directors and serves as the presiding director of the non-management directors of the Company.
Committee Composition and Board Independence
The following table shows the members of the Company's board of directors, the composition of the committees, and those directors who
the board of directors has affirmatively determined to be independent under the New York Stock Exchange corporate governance standards:
|
|
|
|
|
|
|
|
|
Director
|
|
Audit
Committee |
|
Compensation
Committee |
|
Nomination &
Governance
Committee |
|
Independent
Director |
Gregory J. Scott |
|
|
|
|
|
|
|
|
Bodil M. Arlander |
|
ü |
|
|
|
|
|
ü |
Jill Beraud(1) |
|
|
|
ü |
|
|
|
ü |
David H. Edwab |
|
ü |
|
|
|
ü(C) |
|
ü |
James O. Egan |
|
ü(C) |
|
|
|
|
|
ü |
Lori H. Greeley(2) |
|
|
|
|
|
|
|
ü |
John D. Howard |
|
|
|
|
|
|
|
|
Grace Nichols(*) |
|
|
|
ü |
|
ü |
|
ü |
Michelle Pearlman |
|
|
|
|
|
|
|
|
Richard L. Perkal |
|
|
|
|
|
|
|
|
Arthur E. Reiner |
|
|
|
ü(C) |
|
ü |
|
ü |
Legend:
- (C)
- Chair
of committee
- (*)
- Non-executive
chair of the board of directors and presiding director of the non-management directors
- (1)
- On
February 20, 2015, Ms. Beraud notified the Company that she would not be standing for re-election to the Company's board of directors at
its 2015 Annual Meeting of Stockholders.
- (2)
- The
Company anticipates that Ms. Greeley will serve as an independent director to the compensation committee to replace Ms. Beraud on the
committee effective June 18, 2015.
The Audit Committee
Under the terms of its charter, the audit committee represents and assists the board of directors with the oversight of the integrity
of the Company's financial statements, the Company's compliance
9
Table of Contents
with
legal and regulatory requirements, the qualifications, independence and performance of the Company's independent registered public accounting firm, the performance of the Company's internal audit
function, and the preparation of an audit committee report as required by the SEC to be included in the Company's annual proxy statement. The audit committee meets to review the Company's quarterly
and annual financial statements, and holds periodic meetings separately with management, the internal auditor, and the independent registered public accounting firm. In fiscal year 2014, the committee
met nine times.
The
board of directors has determined that Mr. Egan is an "audit committee financial expert" for purposes of the SEC's rules adopted pursuant to the Sarbanes-Oxley Act of 2002.
The board of directors has determined that Ms. Arlander, Mr. Edwab and Mr. Egan are independent members of the board of directors and the audit committee in accordance with the
independence requirements of the New York Stock Exchange and Exchange Act Rule 10A-3.
The Compensation Committee
Under the terms of its charter, the compensation committee is directly responsible for assisting the board of directors in its
oversight of compensation for the Company's senior management, compensation for the board of directors, evaluation and succession planning for the Chief Executive Officer and related matters. The
committee has sole authority to retain and terminate any executive compensation consultants engaged to provide advice to the committee related to its responsibilities, including the sole authority to
approve such consultants' fees and other retention terms. The committee also has the authority to retain other professional advisors, when necessary or appropriate. In fiscal year 2014, the
compensation committee met seven times.
The Nomination and Governance Committee
Under the terms of its charter, the nomination and governance committee is responsible for assisting the board of directors in its
oversight of board composition, corporate governance policies and practices, ethics and related matters. It also assists the board of directors in fulfilling its responsibilities relating to the
Company's compliance procedure for the code of business conduct. In fiscal year 2014, the nomination and governance committee held three meetings.
The
nomination and governance committee periodically reviews the appropriate size of the board of directors, whether any vacancies are expected due to retirement or otherwise, and the
need for particular expertise on the board of directors. In evaluating and determining whether to recommend a candidate to the board of directors, the committee reviews the appropriate skills and
characteristics required of board members in the context of the background of existing members and in light of the perceived needs for the future development of the Company's business, including
issues of diversity and experience in different substantive areas, such as retail operations, marketing, technology, distribution, real estate and finance. Furthermore, although there is no formal
policy concerning diversity considerations, the nomination and governance committee does consider diversity with respect to
gender, ethnicity and age, as well as diversity of viewpoint, skills and experience in determining the appropriate composition of the board of directors and identifying director nominees. Candidates
may come to the attention of the committee from a variety of sources, including current board members, stockholders, management, and search firms. The committee has the sole authority to retain and
terminate any search firm used to identify candidates for the board of directors, including the sole authority to approve such firm's fees and other retention terms. The committee also has the
authority to retain other professional advisors, when necessary or appropriate. All candidates are reviewed in the same manner regardless of the source of the recommendation. See "STOCKHOLDER
PROPOSALS FOR THE 2016 ANNUAL MEETING" for procedures describing how a stockholder can submit a proposal to the board of directors.
10
Table of Contents
2014 Director Compensation
During fiscal year 2014, the compensation committee engaged Hay Group to evaluate the Company's director compensation, including the
compensation of the non-executive chair of the board of directors, compared to a peer group of companies. The board of directors approved the following compensation package for the board of directors
and the non-executive chair of the board of directors: The compensation package included an annual retainer for each director of $45,000 ($135,000 for the non-executive chair of the board of
directors) and for each meeting of the board of directors, beyond eight meetings annually, directors were eligible to be paid a fee of $1,500 for attending in person and $500 for attending
telephonically. The annual retainer for service as the chair of a committee of the board of directors was as follows: $20,000 for the audit committee; $10,000 for the compensation committee; and
$9,000 for the nomination and governance committee. The annual retainer for service as a member of a committee of the board of directors was as follows: $10,000 for the audit committee; $7,500 for the
compensation committee; and $5,000 for the nomination and governance committee. For each committee meeting of the board of directors, beyond eight meetings annually, directors were eligible to be paid
a fee of $1,500 for attending in person and $500 for attending telephonically.
In
addition, members of the board of directors receive an annual share-based award with a fair market value of $60,000 ($150,000 for the non-executive chair of the board of directors) on
the date of grant, which was June 16, 2014 for this past fiscal year. The annual share-based award to directors is typically restricted stock that vests one-year from the grant date. New board
members are issued a share-based award, typically restricted stock, upon the effective date of their appointment to the board of directors, which vests ratably over a three-year period.
The
Company's independent directors are subject to security ownership guidelines that require them to own any form of vested and/or unvested equity of the Company having a fair market
value of at least $80,000 at all times subsequent to the fourth anniversary of the director's appointment to the Company's board of directors. Mr. Howard, Mr. Perkal and Mr. Scott
did not receive compensation for their services as non-independent members of the Company's board of directors. Board members are reimbursed for reasonable travel expenses for in-person attendance at
board of directors and committee meetings.
11
Table of Contents
The
following table summarizes the principal components of fiscal year 2014 compensation for the Company's board of directors. The compensation set forth below fully reflects
compensation for services performed as a member of the Company's board of directors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees
Earned or
Paid in
Cash
($) |
|
Stock
Awards
($)(1) |
|
Option
Awards
($) |
|
Non-Equity
Incentive Plan
Compensation
($) |
|
Change in
Pension Value
and
Non-qualified
Deferred
Compensation
Earnings
($) |
|
All Other
Compensation
($) |
|
Total
($) |
|
Bodil M. Arlander |
|
|
59,000 |
|
|
60,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
119,000 |
|
Jill Beraud |
|
|
66,500 |
|
|
60,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
126,500 |
|
David H. Edwab |
|
|
68,000 |
|
|
60,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
128,000 |
|
James O. Egan |
|
|
77,000 |
|
|
60,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,000 |
|
Lori H. Greeley(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grace Nichols |
|
|
169,500 |
|
|
150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
319,500 |
|
Michelle Pearlman |
|
|
66,000 |
|
|
60,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
126,000 |
|
Arthur E. Reiner |
|
|
61,000 |
|
|
60,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121,000 |
|
Edmond S. Thomas(3) |
|
|
69,000 |
|
|
60,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
129,000 |
|
- (1)
- Represents
the aggregate grant date fair value of equity awards granted in the specified fiscal year as calculated pursuant to Financial Accounting
Standards Board ("FASB") Accounting Standards Codification Topic 718, "CompensationStock Compensation" ("ASC 718"), excluding any estimate for forfeitures. The fair value of restricted
stock is based on the closing stock price of an unrestricted share of the Company's common stock on the grant date.
- (2)
- Lori
H. Greeley was appointed to the board of directors on May 4, 2015.
- (3)
- Edmond
S. Thomas resigned as a member of the Company's board of directors effective September 27, 2014.
The
following table provides information relating to outstanding equity awards held by the non-management directors at fiscal year end, January 31, 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock
Awards |
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable |
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable |
|
Number of
Shares of
Stock That
Have Not
Vested (#) |
|
Bodil M. Arlander |
|
|
|
|
|
|
|
|
15,306 |
|
Jill Beraud |
|
|
|
|
|
|
|
|
15,306 |
|
David H. Edwab |
|
|
|
|
|
|
|
|
15,306 |
|
James O. Egan |
|
|
|
|
|
|
|
|
18,171 |
|
Lori H. Greeley |
|
|
|
|
|
|
|
|
|
|
Grace Nichols |
|
|
10,000 |
|
|
|
|
|
38,265 |
|
Michelle Pearlman |
|
|
|
|
|
|
|
|
15,306 |
|
Arthur E. Reiner |
|
|
|
|
|
|
|
|
15,306 |
|
Edmond S. Thomas |
|
|
|
|
|
|
|
|
|
|
12
Table of Contents
CORPORATE GOVERNANCE
Board Committee Charters
The charters for the Company's audit committee, compensation committee, and nomination and governance committee are available free of
charge on the Company's website at http://www.nyandcompany.com.
Corporate Governance Guidelines
The board of directors of the Company adopted corporate governance guidelines to assist in the exercise of its responsibilities. The
Company's corporate governance guidelines are available free of charge on the Company's website at http://www.nyandcompany.com.
Code of Business Conduct
The Company has a code of business conduct that applies to all Company associates, including its principal executive officer, principal
financial officer and principal accounting officer, as well as members of the board of directors. In addition, the Company has a code of conduct for principal executive officers and key financial
associates, which is supplemental to the code of business conduct. The code of business conduct and the code of conduct for principal executive officers and key financial associates are available free
of charge on the Company's website at http://www.nyandcompany.com. Any updates or amendments to these guidelines, and any waiver that applies to a
director or executive officer, will also be posted on the website.
Stockholder Communications with the Board of Directors
Stockholders and other interested parties may contact the board of directors, the presiding director, or the non-management directors
as a group (c/o the Chair of the Nomination and Governance Committee) at the following address:
Board
of Directors or
Chair of the Nomination and Governance Committee
New York & Company
330 West 34th Street
9th Floor
New York, NY 10001
Communications
regarding accounting, internal accounting controls or auditing matters may also be reported to the Company's board of directors using the above address or through the
Company's Ethics Hotline. Information about how to contact the board of directors and the Ethics Hotline is also available on the Company's website at http://www.nyandcompany.com.
ITEM 2Ratification of Independent Registered Public Accounting Firm
The board of directors, upon the recommendation of its audit committee, has ratified the selection of Ernst & Young LLP
to serve as the Company's independent registered public accounting firm for fiscal year 2015, subject to ratification by the Company's stockholders.
Representatives
of Ernst & Young LLP are expected to be present at the Meeting and available to respond to appropriate questions. They also will have the opportunity to
make a statement if they desire to do so.
The
Company is asking its stockholders to ratify the selection of Ernst & Young LLP as the Company's independent registered public accounting firm. Although ratification is
not required by the Company's by-laws or otherwise, the board of directors is submitting the selection of Ernst & Young LLP
13
Table of Contents
to
the Company's stockholders for ratification because the Company values its stockholders' views on the Company's independent registered public accounting firm and as a matter of good corporate
practice. In the event that the Company's stockholders fail to ratify the selection, it will be considered as a direction to the board of directors and the audit committee to consider the selection of
a different firm. Even if the selection is ratified, the audit committee in its discretion may select a different independent registered public accounting firm, subject to ratification by the board of
directors, at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.
The board of directors unanimously recommends a vote FOR the ratification of Ernst & Young LLP as the Company's independent registered public
accounting firm for fiscal year 2015.
Audit and Non-Audit Fees
The following table presents fees for professional audit services rendered by Ernst & Young LLP for the audit of the
Company's annual financial statements for fiscal year 2014 and fiscal year 2013, and fees billed for other services rendered by Ernst & Young LLP during those periods.
|
|
|
|
|
|
|
|
|
|
Fiscal Year
2014 |
|
Fiscal Year
2013 |
|
Audit fees(1) |
|
$ |
841,821 |
|
$ |
716,931 |
|
Audit-related fees(2) |
|
|
|
|
|
27,500 |
|
Tax fees(3) |
|
|
176,000 |
|
|
146,500 |
|
All other fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
1,017,821 |
|
$ |
890,931 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- (1)
- Audit
work performed in connection with the annual financial statements and the effectiveness of the Company's internal control over financial reporting, as
required by Section 404 of the Sarbanes-Oxley Act of 2002, the reviews of unaudited quarterly financial statements, and work generally only the independent registered public accounting firm can
reasonably provide, such as consents and review of documents filed with the SEC.
- (2)
- Audit-related
fees include consultation services for internal control reviews in fiscal year 2013.
- (3)
- Professional
services related to tax compliance and reporting, including preparation of federal, state and local income tax returns, and supporting other
tax-related regulatory requirements.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of the Independent Registered Public Accounting Firm
Consistent with SEC policies regarding auditor independence, the audit committee has responsibility for appointing, setting
compensation and overseeing the work of the independent registered public accounting firm. In recognition of this responsibility, the audit committee
has established a policy to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm.
Prior
to engagement of the independent registered public accounting firm for the next year's audit, management will submit a list of services and related fees expected to be rendered
during that year within each of four categories of services to the audit committee for approval: (i) audit, (ii) audit-related, (iii) tax and (iv) other services.
14
Table of Contents
The
fees are budgeted, and the audit committee requires the independent registered public accounting firm and management to report actual fees versus the budget periodically throughout
the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not
contemplated in the original pre-approval categories. In those instances, the audit committee requires specific pre-approval before engaging the independent registered public accounting firm.
The
audit committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any
pre-approval decisions to the audit committee at its next scheduled meeting.
15
Table of Contents
Audit Committee Report
In accordance with its written charter adopted by the board of directors, the audit committee assists the board of directors in
fulfilling its oversight responsibilities with respect to the accounting and financial reporting processes of the Company, including its internal control over financial reporting. Management has the
primary responsibility for the financial statements and the reporting process, including the systems of internal control. The Company's independent registered public accounting firm, Ernst &
Young LLP, is responsible for auditing the financial statements and expressing an opinion as to their conformity with generally accepted accounting principles, reviewing the unaudited quarterly
financial statements and auditing and expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
During
fiscal year 2014, the audit committee met and held discussions with management and the independent registered public accounting firm and independently as a committee. Management
represented to the audit committee that the Company's consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the audit committee has reviewed
and discussed the consolidated financial statements as of and for the year ended January 31,
2015 with management and the independent registered public accounting firm, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the financial statements. In addition, the audit committee reviewed and discussed with management and the Company's independent registered
public accounting firm both management's annual report on internal control over financial reporting and the report of the independent registered public accounting firm thereto. The audit committee
discussed with the independent registered public accounting firm all matters required to be discussed by generally accepted auditing standards, including those described in Statement on Auditing
Standards No. 61, as amended (AICPA Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight
Board ("PCAOB") in Rule 3200T.
In
addition, the audit committee has also received from the independent registered public accounting firm the written disclosures regarding the auditors' independence required by PCAOB
Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, and has discussed with the independent auditors,
the independent auditors' independence. The audit committee also has considered whether the independent registered public accounting firm's provision of non-audit services to the Company is compatible
with the auditors' independence. The audit committee has concluded that the independent registered public accounting firm, Ernst & Young LLP, is independent from the Company and its
management.
The
audit committee discussed with the Company's independent registered public accounting firm the overall scope and plans for its integrated audit of the Company's financial statements
and internal control over financial reporting. In addition, the audit committee met with the independent registered public accounting firm, with and without management present, to discuss the results
of their examinations, the evaluations of the Company's internal controls, and the overall quality of the Company's financial reporting.
In
reliance on the reviews and discussions referred to above, the audit committee recommended to the board of directors, and the board has approved, that the audited financial statements
be included in the Company's Annual Report on Form 10-K for the year ended January 31, 2015, for filing with the Securities and Exchange Commission. The audit committee has selected, and
the board of directors has ratified as the Company's independent registered public accounting firm, Ernst & Young LLP.
James
O. Egan (Chair)
Bodil M. Arlander
David H. Edwab
16
Table of Contents
EXECUTIVE OFFICERS
The following table sets forth the name, age and principal position of each of the Company's executive officers:
|
|
|
|
|
|
Name
|
|
Age |
|
Position |
Gregory J. Scott |
|
|
52 |
|
Chief Executive Officer and Director |
John M Worthington |
|
|
51 |
|
President and Chief Operating Officer |
Sheamus Toal |
|
|
45 |
|
Executive Vice President, Chief Financial Officer |
Faeth Bradley |
|
|
44 |
|
Executive Vice President, Human Resources |
Kevin L. Finnegan |
|
|
62 |
|
Executive Vice President, Global Sales |
Adam Ratner |
|
|
49 |
|
Vice President, General Counsel |
Laura Weil |
|
|
58 |
|
Former Executive Vice President, Chief Operating Officer |
See
the table under "Nominees for Director" for the past business experience of Gregory J. Scott.
John M Worthington was named President and Chief Operating Officer in November 2014. Mr. Worthington brings more than
23 years of retail industry experience to the Company. Mr. Worthington has responsibility for the Company's Store Operations, Real Estate, Outlets, Finance, Information Technology,
Sourcing and Logistics. Most recently, Mr. Worthington served as the Chief Administrative Officer of Kohl's Department Stores from November 2010 to June 2013 where he oversaw Store Operations,
Real Estate, Information Systems, Merchandise Presentation, Store Administration, Logistics, Loss Prevention, Store Planning and Design and Purchasing. Mr. Worthington also served at Kohl's as
Senior Executive Vice President from September 2007 to November 2010, Executive Vice President, Director of Stores from 2005 to 2007, Senior Vice President from 2004 to 2005 and Regional Vice
President from 2002 to 2004. Prior to joining Kohl's in 1993, Mr. Worthington held various leadership positions in stores and buying at May Department Stores.
Sheamus Toal was named Executive Vice President, Chief Financial Officer in October 2008. Mr. Toal previously served as Executive
Vice President, Chief Accounting Officer of the Company since April 2008 and had served as the Company's Senior Vice President, Chief Accounting Officer since 2007. Mr. Toal has also served as
the Company's Vice President, Controller and Treasurer and has been designated as its Principal Accounting Officer since 2004. Prior to his employment with the Company, Mr. Toal was Vice
President and Controller of Footstar, Inc. (a specialty retailer) from 2002 to 2004 and was its Controller from 2001 to 2002. Prior to that, Mr. Toal served in a variety of senior
financial management positions with Standard Motor Products, Inc. from 1997 to 2001. Mr. Toal began his career with KPMG LLP where he served in various roles, including a
management level position within KPMG's Manufacturing, Retail and Distribution Group. Mr. Toal holds a B.S. in Accounting from St. John's University. Mr. Toal is a Certified
Public Accountant in the state of New York.
Faeth Bradley was named Executive Vice President, Human Resources in December 2011. From 2004 to 2011, Ms. Bradley was with Coach,
a specialty retailer of modern classic American accessories, where she served as Division Vice President, Human Resources, from 2007 to 2011. Ms. Bradley's prior professional experience
includes various Human Resources leadership roles for Sallie Mae, XO Communications and Alcatel. Ms. Bradley started her career at Freddie Mac. Ms. Bradley has more than
20 years of experience in Human Resources and holds a M.S. from Virginia Tech and a bachelor's degree from George Mason University.
Kevin L. Finnegan was named Executive Vice President, Global Sales in April 2009, after holding the position of Executive Vice President,
National Sales & Global Business Leader since June 2008. Mr. Finnegan joined New York & Company, Inc. in 2001 as Executive Vice President, National Sales Leader. Prior to
that, Mr. Finnegan was employed with the Gap, Inc. for 10 years and also worked at Saks, Inc. Mr. Finnegan holds a B.S. in Accounting from Fordham University. He
currently serves as an officer of Brooklyn Jesuit Prep in Crown Heights, Brooklyn.
17
Table of Contents
Adam Ratner was named Vice President and General Counsel in July 2014. From 2004 through June 2014, Mr. Ratner was Vice President
and Associate General Counsel of Jackson Hewitt Tax Service, Inc. Prior to that, from 1998 through 2004, Mr. Ratner served in a variety of senior in-house legal positions for Berlitz
International, Inc. and Ladbroke/USA. Mr. Ratner began his legal career as a law clerk to the Honorable John M. Canella of the United States District Court for the Southern District of
New York and has also worked at the law firms of White & Case and Littler Mendelson. Mr. Ratner has more than 15 years of experience overseeing the legal affairs of public
companies in the areas of corporate and securities, compliance, contracts and commercial transactions, intellectual property, employment, real estate and litigation. Mr. Ratner holds a B.S.
degree from Cornell University and a J.D. degree from Hofstra University.
SECURITIES OWNERSHIP OF OFFICERS, DIRECTORS AND OWNERS OF 5%
OR MORE OF THE COMPANY'S COMMON STOCK
The following table sets forth information known to the Company with respect to the beneficial ownership of its common stock as of
April 24, 2015. The table reflects the beneficial ownership by (i) each stockholder known by the Company to own beneficially more than 5% of its common stock, (ii) each executive
officer listed in the Summary Compensation Table, (iii) each of its directors, and (iv) all of its directors and executive officers as a group. Beneficial ownership is determined in
accordance with the rules of the SEC. Such rules provide that in calculating the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock
subject to options and certain other equity instruments held by that person that are currently exercisable or that will become exercisable within 60 days after April 24, 2015 are deemed
to be outstanding.
|
|
|
|
|
|
|
|
Name of beneficial owner
|
|
Amount and nature
of beneficial
ownership(1) |
|
Percent of
class(1) |
|
Gregory J. Scott |
|
|
1,418,780 |
(2) |
|
2.2 |
% |
John M Worthington |
|
|
262,500 |
(3) |
|
|
|
Sheamus Toal |
|
|
449,574 |
(4) |
|
* |
|
Faeth Bradley |
|
|
209,685 |
(5) |
|
* |
|
Kevin L. Finnegan |
|
|
276,389 |
(6) |
|
* |
|
Adam Ratner |
|
|
|
|
|
* |
|
Laura Weil |
|
|
|
|
|
* |
|
Bodil M. Arlander |
|
|
90,874 |
(7) |
|
* |
|
Jill Beraud |
|
|
57,849 |
(8) |
|
* |
|
David H. Edwab |
|
|
90,227 |
(9) |
|
* |
|
James O. Egan |
|
|
65,355 |
(10) |
|
* |
|
Lori H. Greeley |
|
|
|
|
|
* |
|
John D. Howard |
|
|
31,618,972 |
(11) |
|
49.3 |
% |
Grace Nichols |
|
|
194,303 |
(12) |
|
* |
|
Michelle Pearlman |
|
|
51,805 |
(13) |
|
* |
|
Richard L. Perkal |
|
|
|
(14) |
|
* |
|
Arthur E. Reiner |
|
|
165,303 |
(15) |
|
* |
|
IPC/NYCG LLC |
|
|
31,618,972 |
(11) |
|
49.3 |
% |
North Run Advisors, LLC |
|
|
3,995,973 |
(16) |
|
6.2 |
% |
Paradigm Management, Inc |
|
|
4,249,900 |
(17) |
|
6.6 |
% |
All directors and executive officers as a group (17 persons) |
|
|
34,951,616 |
|
|
53.0 |
% |
18
Table of Contents
- (1)
- For
purposes of this table, information as to the percentage of shares beneficially owned is calculated based on 64,191,812 shares of common stock
outstanding on April 24, 2015. Under the rules of the SEC, a person is deemed to be a "beneficial owner" of a security if that person has or shares voting power, which includes the power to
vote or direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. Except as otherwise indicated in these footnotes,
each of the beneficial owners has, to its knowledge, sole voting and investment power with respect to the indicated shares of common stock. Unless otherwise noted, the address of each beneficial owner
is 330 W. 34th Street, 9th Floor, New York, New York, 10001.
Each
stock appreciation right ("SAR") included in the table represents the right to receive a payment measured by the increase in the fair market value of one share of common stock from the date of
grant of the SAR to the date of exercise of the SAR. Upon exercise the SARs will be settled in stock.
- (2)
- Gregory
J. ScottIncludes 68,780 shares of common stock, 200,000 shares of restricted stock, and 1,150,000 SARs.
- (3)
- John
M WorthingtonIncludes 12,500 shares of common stock and 250,000 shares of restricted stock.
- (4)
- Sheamus
ToalIncludes 81,808 shares of common stock, 85,710 shares of restricted stock, 25,294 vested deferred stock units, 75,000 shares of
common stock issuable upon exercise of options, and 181,762 SARs.
- (5)
- Faeth
BradleyIncludes 56,514 shares of common stock, 58,831 shares of restricted stock, 2,578 vested deferred stock units, and 91,762 SARs.
- (6)
- Kevin
L. FinneganIncludes 25,493 shares of common stock, 32,967 shares of restricted stock, 2,248 vested deferred stock units, 58,919 shares of
common stock issuable upon exercise of options, and 156,762 SARs.
- (7)
- Bodil
M. ArlanderIncludes 75,568 shares of common stock and 15,306 shares of restricted stock.
- (8)
- Jill
BeraudIncludes 42,543 shares of common stock and 15,306 shares of restricted stock.
- (9)
- David
H. EdwabIncludes 74,921 shares of common stock and 15,306 shares of restricted stock.
- (10)
- James
O. EganIncludes 50,049 shares of common stock and 15,306 shares of restricted stock.
- (11)
- John
D. HowardJohn D. Howard is employed by Irving Place Capital, a broker/dealer. Mr. Howard, by virtue of his status as the sole
member of JDH Management, LLC, and Irving Place Capital ("IPC"), may be deemed to share beneficial ownership of shares owned of record by IPC and IPC/NYCG LLC. Mr. Howard and IPC
share investment and voting power with respect to shares owned by IPC and IPC/NYCG LLC, but disclaim beneficial ownership of such shares except to the extent of their pecuniary interest
therein. IPC/NYCG LLC is an affiliate of, and is controlled by, IPC, a broker/dealer. IPC/NYCG LLC acquired its shares of common stock for resale in the original acquisition transaction
with Limited Brands on November 27, 2002. The business address for Mr. Howard and each of the entities identified in this footnote is 745 Fifth
Avenue7th Floor, New York, New York 10151.
- (12)
- Grace
NicholsIncludes 146,038 shares of common stock, 38,265 shares of restricted stock, and 10,000 shares of common stock issuable upon
exercise of options.
- (13)
- Michelle
PearlmanIncludes 36,499 shares of common stock and 15,306 shares of restricted stock.
- (14)
- Richard
L. PerkalMr. Perkal is employed by Irving Place Capital, a broker/dealer. His address is 745 Fifth
Avenue7th Floor, New York, New York, 10151.
19
Table of Contents
- (15)
- Arthur
E. ReinerIncludes 139,997 shares of common stock and 15,306 shares of restricted stock. Also includes 500 shares, 4,750 shares, and
4,750 shares, indirectly beneficially owned by the Arthur Reiner Revocable Trust, the Deborah Reiner 2003 Trust, and the Melissa Greener 2003 Trust, respectively. Mr. Reiner disclaims
beneficial ownership of the shares owned by these Trusts, except to the extent of his pecuniary interest therein.
- (16)
- This
information is based on a Schedule 13G filed on February 14, 2014. North Run Advisors, LLC has shared voting power and shared
dispositive power over 3,995,973 shares. The address of North Run Advisors, LLC is One International Place, Suite 2401 Boston, MA 02110.
- (17)
- This
information is based on a Schedule 13G filed on February 12, 2015. Paradigm Management, Inc. has sole voting power and sole
dispositive power over 4,249,900 shares. The address of Paradigm Management, Inc. is Nine Elk Street, Albany, NY 12207.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and executive officers, and persons who own more than ten
percent (10%) of the New York & Company outstanding common stock, to file with the SEC an initial report of ownership and report changes in ownership of common stock.
Based
on the Company's records and other information, including written representations, the Company believes that during the fiscal year ended January 31, 2015 the Company's
directors and executive officers satisfied all filing requirements under Section 16(a) in a timely manner.
COMPENSATION COMMITTEE REPORT
The compensation committee has reviewed and discussed with management the disclosures contained in the "Compensation Discussion and
Analysis" section of this Proxy Statement. Based upon this review and its discussions, the compensation committee has recommended to the Company's board of directors that the "Compensation Discussion
and Analysis" section be included in the Company's 2015 Proxy Statement.
Arthur
E. Reiner (Chair)
Jill Beraud
Grace Nichols
EXECUTIVE COMPENSATION
The purpose of the "EXECUTIVE COMPENSATION" section of this Proxy Statement is to present clear and concise disclosure of all plan and
non-plan compensation awarded to, earned by, or paid to the "named executive officers," defined as: (i) the Company's Chief Executive Officer; (ii) the Company's Chief Financial Officer;
(iii) the three most highly compensated executive officers other than the Chief Executive Officer and the Chief Financial Officer who were serving as executive officers as of January 31,
2015, the end of fiscal year 2014; and (iv) up to two additional individuals who would have been one of the three most highly compensated executive officers other than the Chief Executive
Officer or Chief Financial Officer, but were not serving as an executive officer as of January 31, 2015.
The
Company's named executive officers as of January 31, 2015 are as follows:
|
|
|
Name
|
|
Principal Position |
Gregory J. Scott |
|
Chief Executive Officer |
John M Worthington |
|
President and Chief Operating Officer |
Sheamus Toal |
|
EVP, Chief Financial Officer |
Faeth Bradley |
|
EVP, Human Resources |
Kevin Finnegan |
|
EVP, Global Sales |
Laura Weil |
|
Former EVP, Chief Operating Officer |
Ms. Weil's
resignation from the Company was effective August 18, 2014. Mr. Worthington was appointed as the Company's President and Chief Operating Officer on
November 3, 2014.
20
Table of Contents
Compensation Discussion and Analysis
Executive Summary of Fiscal Year 2014 Operating Performance
The Company remained focused on its strategic initiatives during fiscal year 2014, which includes driving increases in net sales and
comparable store sales in each channel of its business; increasing brand awareness and driving traffic to stores by attracting new customers and engaging existing customers; and growing the Company
brand through key merchandise initiatives. In support of these strategic initiatives, the Company is opening new outlet stores and optimizing its existing real estate portfolio to maximize sales and
profitability. Furthermore, the Company believes its omni-channel retail initiatives will continue to drive traffic and increase sales across both store and eCommerce channels. In addition, the
Company remains focused on its key merchandise initiatives and
core sub-brandsincluding 7th Avenue Suiting, Love NY&C, Soho Jeans, and Eva Mendes Collectionand continues to grow the pant and denim categories.
The
Company's operating results for fiscal year 2014 are summarized below:
-
- The Company's eCommerce and Outlet channels continued to expand, experiencing double-digit increases in net sales compared to fiscal
year 2013.
-
- The Company opened 11 new Outlet stores and 1 New York & Company store, closed 15 stores, and remodeled 11 existing stores.
-
- Comparable store sales decreased 1.0% for fiscal year 2014, as compared to an increase of 1.1% in fiscal year 2013.
-
- Gross profit for fiscal year 2014 was $249.8 million, or 27.1% of net sales, as compared to $264.4 million, or 28.1% of
net sales, in fiscal year 2013.
-
- Including $9.2 million of non-operating charges, fiscal year 2014 operating loss was $15.6 million, or 1.7% of net
sales, as compared to operating income of $3.1 million, or 0.3% of net sales, during fiscal year 2013.
-
- Including $9.2 million of non-operating charges, fiscal year 2014 net loss was $16.9 million, or 1.8% of net sales, as
compared to net income of $2.4 million, or 0.3% of net sales, during fiscal year 2013.
-
- The Company ended fiscal year 2014 with cash and cash equivalents of $69.3 million, working capital of $46.5 million and
availability under its revolving credit facility of $30.0 million.
Executive Summary of Fiscal Year 2014 Compensation
During fiscal year 2014, under the direction of the compensation committee (the "Committee"), the following key decisions related to
executive compensation were made:
-
- Peer Group Review. With the assistance of the Committee's
independent consultant, Hay Group, the Committee reviewed the peer group used for compensation benchmarking to ensure it is comprised of an appropriate comparator group of fashion retailers.
-
- Base Salary. Considering the base salaries for executive
officers at the Company's peer group, the Company's operating results, executive performance, and retention, among other factors, the Committee approved merit increases for Mr. Scott,
Mr. Toal and Ms. Bradley during fiscal year 2014.
-
- Incentive Compensation. Due to the Company's operating
loss during fiscal year 2014, the Company's executive officers did not earn bonuses under the Company's Incentive Compensation Plan (the "IC Plan"), as described below in the "Compensation Components"
section.
21
Table of Contents
-
- Share-based Awards. During fiscal year 2014, the
Committee approved equity grants to executive officers consisting of stock appreciation rights ("SARs") and restricted stock. The SARs, which are similar to stock options, will only provide value to
executives if the stock price appreciates over the expected term of the award. SAR awards to executives generally vest over a three to four year period, while restricted stock awards generally cliff
vest on the third anniversary of the grant date. Mr. Scott, the Company's Chief Executive Officer, was also issued a performance-based award, which was not earned due to the operating income
targets for fiscal year 2014 not being met. While the Company does not ordinarily impose holding requirements on awards to its executive officers subsequent to such awards vesting, the Company
believes that a three year vesting period provides an inherent holding requirement.
-
- Benefits & Perquisites. Executive officers
participate in the Company's benefit plans on the same basis as most other Company associates, but also receive enhanced disability and life insurance benefits and reimbursement for eligible medical
expenses not covered by the Company's benefit plan. The Company generally does not provide additional perquisites for its executive officers.
Compensation Philosophy
The executive compensation program of the Company has been designed to motivate, reward, attract, and retain the management deemed
essential to the success of the Company. The program seeks to align executive compensation with Company objectives, business strategy, and financial performance. In applying these principles, the
Company seeks to:
-
- Align pay and performanceProvide the majority of executives' compensation
opportunity through short- and long-term incentive compensation;
-
- Drive strong business resultsSupport the Company's business goals of
fostering profitable growth and increasing stockholder value;
-
- Focus on long-term stockholder returnAlign the interests of executives
and stockholders through the use of equity compensation;
-
- Support teamworkPromote alignment and collaboration across corporate
functions by rewarding team performance and ensuring that the Company's executives share in the success they create; and
-
- Attract strong talentAttract, retain and motivate high-performing
executives.
The Company's Executive Compensation Practices Include:
-
- Paying for performanceThe Company provides the majority of executives'
compensation opportunity through short- and long-term incentive compensation. Incentives are designed to align executive compensation with the achievement of the Company's business strategy and
long-term growth initiatives.
-
- Balancing Short-Term and Long-Term IncentivesThe Company believes its
incentive programs provide an appropriate balance between short- and long-term incentives, as well as cash and equity.
-
- Receiving strong shareholder supportAt the Company's 2014 Annual Meeting
of Stockholders, over 97% of the votes cast on the advisory "Say-on-Pay" proposal were in favor of the Company's executive compensation. At the Company's 2011 Annual Meeting of Stockholders, the
Company's stockholders voted to have the Company hold an advisory vote on executive compensation every three years. The Company considers the 2014 votes to indicate strong approval of its compensation
philosophy. As such, the Company has maintained the same
22
Table of Contents
The Company's Executive Compensation Practices Do Not Include:
-
- Entering into employment contracts of defined length or multi-year guarantees for base salary increases,
bonuses or equity compensation
-
- Allowing equity grants below 100% fair market value
-
- Permitting executives to engage in hedging transactions of the Company's
stock
-
- Repricing options without shareholder approval
-
- Grossing up taxes on perquisites or benefits, other than on relocation related payments that are
business-related
-
- Providing excessive perquisites or benefits to our executives
Establishing Compensation
The board of directors has delegated authority to the Committee with respect to the Company's overall compensation policy for senior
management, granting authority to establish the annual salary and incentive compensation targets, including cash bonuses and share-based awards, for the Chief Executive Officer, President and Chief
Operating Officer and the Chief Financial Officer, and to approve the compensation structure for the other executive officers of the Company based upon the Committee's review of the Chief Executive
Officer's recommendations.
Twice
each year, the Chief Executive Officer evaluates the performance of the other executive officers, once against their established goals and objectives and once to assess talent,
future potential and succession planning. Annually, the Chief Executive Officer uses the results of these evaluations, in partnership with the Executive Vice President of Human Resources, to determine
compensation packages for the other executive officers to be recommended for approval by the Committee. The Committee meets in executive session annually, typically in August, to evaluate the
recommended compensation for the executive officers, and to establish their base salaries, cash incentive compensation, and share-based incentive compensation to be effective in the third fiscal
quarter of the current year. The Chief Executive Officer and/or Executive Vice President of Human Resources may request a meeting with the Committee at an interim date to review the compensation
package of an executive officer in the event of organizational or responsibility changes, retention risks or new hires that occur during the year.
In
determining compensation components and levels, the Committee considers the scope of the executive's responsibility; the Company's overall performance; the executive's overall
performance and
23
Table of Contents
future
potential; the cash, equity and total compensation paid by competitors to employees in comparable positions; and the executive's past earnings and earning potential resulting from previously
acquired common stock and share-based incentives.
Compensation Benchmarking and Consultants
The Committee believes that information regarding pay practices at other companies is useful in two respects. First, the Committee
recognizes that its compensation practices must be competitive in the marketplace in order to attract and retain executives. Second, this marketplace information, among the other aforementioned
factors, is considered by the Committee to assess the reasonableness of compensation.
The
Committee engaged Hay Group for executive compensation consulting services to assist in the review of the Company's compensation practices and programs for fiscal year 2014. Hay
Group provided the Committee with survey benchmarks and peer group benchmarks, where available, for annual cash compensation and share-based compensation paid to executive officers and directors. In
addition, Hay Group provided an analysis of board of director compensation and an overview of executive officer compensation trends in the retail industry and among a peer group of companies. The
survey benchmarks were selected from Hay Group's proprietary Retail Survey.
The
Company supplements the survey benchmarks with peer group benchmarks, where available. The peer companies selected generally meet one or more of the following criteria: apparel
retailers that compete for the Company's talent, have similarly sized stores, are multi-state operators, are similar in size with revenues ranging from approximately one-half of to two times the
Company's revenues, and/or have the same or similar customer bases. While the Company strives to maintain consistency in the peer group to enhance credibility of the comparisons, the composition of
the group is reviewed annually to ensure that changes in the competitive landscape and the peers' businesses are considered.
The
peer group companies used in this year's review were:
|
|
|
Ann Inc. |
|
Christopher & Banks
Corporation |
Bebe Stores, Inc. |
|
Destination Maternity Corporation |
The Buckle, Inc. |
|
Express, Inc. |
The Cato Corporation |
|
Pacific Sunwear of California,
Inc. |
Chico's FAS, Inc. |
|
Wet Seal, Inc. |
The Children's Place Retail Stores,
Inc. |
|
Zumiez, Inc. |
The
Company uses this information and the information regarding compensation practices at other companies to assist in determining an overall compensation level, including mix of
compensation types, that it deems competitive and appropriate. The Company generally targets cash compensation for executive officers, including base salary and cash incentive compensation, to be
between the 50th to 75th percentiles of total cash compensation of their peers. This percentile varies among executive officers and may be above or below the
target depending on the factors discussed above regarding the determination of compensation components and compensation levels for executive officers, as well as to ensure the retention of key
executives in the highly competitive retail market.
Compensation Components
The Company's executive officer compensation includes both short-term and long-term components. Short-term compensation consists of an
executive officer's annual base salary and annual cash incentive compensation. Long-term compensation may include grants of SARs, stock options, restricted stock or other share-based incentives and
cash incentive compensation established by the Company, as determined by the board of directors.
24
Table of Contents
Allocation of Compensation Components. There is no pre-established policy for the allocation between either cash and non-cash or
short-term and
long-term incentive compensation. Rather, the Committee reviews information provided by its compensation consultants and other sources to determine the appropriate level and mix of compensation.
Income from incentive compensation is realized as a result of the performance of the Company or the individual, depending on the type of award, compared to established goals. In general, however, the
majority of the compensation delivered to the named executive officers is variable and based on company performance. For fiscal year 2014, variable compensation based on performance represented 74% of
the chief executive officer's total target compensation and 63% of the average total target compensation for the other named executive officers.
The
target allocation of compensation components for the Chief Executive Officer and for the average of the other named executive officers for fiscal year 2014 was as follows:
Annual Base Salary. The Committee determines base salaries for executives and periodically reviews the base salaries of its executive
officers and
approves adjustments, as appropriate, based on the factors discussed above. For the amount of base salary earned by each named executive officer during fiscal year 2014, refer to the "Summary
Compensation Table" in this Proxy Statement.
Incentive Compensation Plan. The Company's IC Plan provides its senior management with bonuses linked to the seasonal financial
results of the
business. Compensation earned under the IC Plan will generally be paid in cash; however, the Committee may in its discretion grant equity based awards under the Company's Amended and Restated
2006 Long-Term Incentive Plan, and on such terms as are determined by the Committee. Target spring, fall and full year bonus levels are established for each executive participating in the program (as
a percentage of base salary) with a target bonus attained if the Company achieves the target operating income goals approved by the Committee for the spring, fall and full year bonus periods. The
target bonuses are set based on each executive's scope of responsibility and impact on the performance of the Company. Each fiscal year the Committee approves minimum, target and maximum operating
income goals that provide executives with the incentive to drive increases in net sales and gross margin, to control expenses and to increase
25
Table of Contents
stockholder
value. If operating income falls below the minimum threshold, no incentive compensation is paid. If the operating income achieved is between the minimum threshold and the target goal,
executives can earn between 20% and 100% of their target bonus. If the operating income achieved is between the target and the maximum goals, executives can earn between 100% and 200% of their target
bonus.
When
considering what the minimum, target and maximum operating income goals should be for fiscal year 2014, the Committee considered the Company's fiscal year 2013 actual operating
results, the continued uncertainty in the macroeconomic environment and its effect on consumers' spending on the Company's merchandise, and the Company's strategies for improving operating results in
the future and the planned timing of the execution of such strategies.
For
fiscal year 2014, the Committee approved the following minimum, target and maximum operating income goals:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands)
|
|
Minimum |
|
Target |
|
Maximum |
|
Bonus
Period
Allocation |
|
Actual
Payout %
Earned |
|
Spring 2014 |
|
$ |
3,000 |
|
$ |
8,000 |
|
$ |
12,000 |
|
|
25 |
% |
|
|
% |
Fall 2014 |
|
$ |
4,500 |
|
$ |
9,500 |
|
$ |
13,000 |
|
|
25 |
% |
|
|
% |
Full Year 2014 |
|
$ |
7,500 |
|
$ |
17,500 |
|
$ |
25,000 |
|
|
50 |
% |
|
|
% |
The
Company did not achieve the minimum operating income goal for any one of the three bonus periods and as such no bonuses were earned under the IC Plan in fiscal year 2014.
The
Company offers its senior management the ability to participate in the Company's Management Stock Purchase Plan ("MSPP"), which works in tandem with the IC Plan. The purpose of the
MSPP is to encourage the Company's senior management to have more ownership of the Company's stock, aligning senior management's interests with shareholders' interests, while increasing retention of
key employees. The MSPP provides senior management with the opportunity to defer up to 25% of their bonus earned under the IC Plan each fiscal year in exchange for a grant of vested deferred stock
units under the Company's Amended and Restated 2006 Long-Term Incentive Plan (the "2006 Plan). The minimum deferral period is for three years. Deferral elections must be made by
December 31st of the year prior to the fiscal year that the deferral election applies to and are irrevocable. The Company will match, dollar-for-dollar, the amount of incentive
compensation deferred with an additional grant of unvested deferred stock units. The matching unvested deferred stock units granted by the Company cliff vest on the third anniversary of the grant
date, subject to continued employment with the Company.
Amended and Restated 2006 Long-Term Incentive Plan. The Company's board of directors and stockholders originally approved the 2006 Plan
on
May 3, 2006 and June 21, 2006, respectively. The 2006 Plan has been amended and approved by stockholders from time to time to, among other things, increase the number of shares available
for issuance. The aggregate number of shares of the Company's common stock that may be issued under the 2006 Plan is 12,668,496 shares, and the maximum number of shares which may be used for awards
other than stock options or SARs is 7,750,000 shares. These shares may be in whole or in part authorized and unissued or held by the Company as treasury shares.
Amended and Restated 2002 Stock Option Plan. The Company originally adopted the 2002 Stock Option Plan on November 27, 2002 and
approved the
Amended and Restated 2002 Stock Option Plan (the "2002 Plan") to become effective on October 13, 2004. As of November 27, 2012, the 2002 Plan expired and no new awards may be issued from
the 2002 Plan.
The
principal purpose of the 2006 Plan is to promote the long-term growth and profitability of the Company and its subsidiaries by (a) providing executive officers, as well as
other key employees, non-employee directors of the Company, and consultants to the Company with incentives to maximize
26
Table of Contents
stockholder
value and otherwise contribute to the success of the Company and (b) enabling the Company to attract, retain and reward the best available persons for positions of responsibility.
Certain awards may be conditioned on the Company achieving certain performance goals that are based on one
or more performance measures including, among others: revenue growth, earnings per share, EBITDA, operating income, net income, return on equity, return on invested capital and return on net assets.
The Committee will determine the performance conditions at the time of the grant.
The
grant date for all share-based awards the Company issues is a date on or after the date the Committee approves the terms of the award and, in the case of a new hire, on or after the
new hire start date. The exercise price, if applicable, for all share-based awards is equal to the Company's closing stock price listed on the NYSE on their respective grant dates.
During
fiscal year 2014, the Committee approved share-based awards to be granted to its senior management team in an effort to promote the long-term growth and profitability of the
Company, as well as hire, retain and motivate the Company's senior management. All awards granted to the named executive officers during fiscal year 2014 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Appreciation
Rights(1) |
|
Restricted
Stock(1) |
|
Performance-
Based
Restricted
Sock(2) |
|
Deferred
Stock
Units(3) |
|
Gregory J. Scott |
|
|
100,000 |
|
|
100,000 |
|
|
330,000 |
|
|
|
|
John M Worthington |
|
|
750,000 |
|
|
250,000 |
|
|
|
|
|
|
|
Sheamus Toal |
|
|
114,618 |
|
|
71,613 |
|
|
|
|
|
17,728 |
|
Faeth Bradley |
|
|
114,618 |
|
|
21,613 |
|
|
|
|
|
4,354 |
|
Kevin L. Finnegan |
|
|
110,034 |
|
|
20,749 |
|
|
|
|
|
3,732 |
|
Laura Weil |
|
|
|
|
|
|
|
|
|
|
|
13,436 |
|
- (1)
- In
connection with the Company's annual performance review process, Mr. Scott, Mr. Toal, Ms. Bradley, and Mr. Finnegan were
granted equity awards.
Mr. Scott,
Mr. Toal, Ms. Bradley, and Mr. Finnegan were granted restricted stock that vest on August 25, 2017 and SARs that become exercisable as follows: 25% on
August 25, 2015, 25% on August 25, 2016, and 50% on August 25, 2017. Also included in the table above for Mr. Toal is an award of 50,000 shares of restricted stock, which
vests on October 22, 2016.
In
connection with Mr. Worthington's appointment as President and Chief Operating Officer, he was granted restricted stock that vests on November 3, 2017 and SARs that vest as follows:
25% on November 3, 2015, 25% on November 3, 2016, 25% on November 3, 2017, and 25% on November 3, 2018.
- (2)
- Mr. Scott
was granted a performance-based restricted stock award that was set to vest subject to the Company achieving minimum, target and maximum
operating income levels for fiscal year 2014, and Mr. Scott's continued employment with the Company. All 330,000 performance-based shares were cancelled as a result of the Company achieving
below the minimum operating income goal for fiscal year 2014. If the Company had achieved between the minimum and target operating income goals for fiscal year 2014, Mr. Scott would have earned
between 60,000 and 300,000 shares of restricted stock. If the Company had achieved between the target and maximum operating income goals for fiscal year 2014, Mr. Scott would have earned
between 300,000 and 330,000 shares of restricted stock. Any earned shares would have vest ratably through March 2017.
- (3)
- Issued
under the Company's MSPP.
27
Table of Contents
The Company has adopted a policy which prohibits directors, executive officers and certain other key financial employees from engaging in transactions designed to
hedge against the economic risks associated with an investment in the Company's common stock. These individuals may not engage in the purchase or sale of put and call options, short sales and other
hedging transactions designed to minimize the risk of owning the Company's common stock.
Other Cash Incentive Compensation. From time to time, the Chief Executive Officer, in partnership with the Executive Vice President of
Human
Resources, may propose to the Committee cash incentive compensation for an executive officer, which may be subject to time and/or performance requirements, to recruit, retain, reward or provide
additional performance incentives to executives, among other reasons.
All Other Compensation. Each executive officer is eligible to participate in the Company's benefit plans, such as medical, dental,
disability, group
life, vision and business travel life insurance. Executive officers participate in the benefit plans on the same basis as most other Company associates, but also receive enhanced disability and life
insurance benefits and reimbursement for eligible medical expenses not covered by the Company's benefit plan.
The
Company contributes to a defined contribution savings and retirement plan (the "SARP") qualifying under section 401(k) of the Internal Revenue Code. Participation in the SARP
is available to all non-union associates who have completed 1,000 or more hours of service with the Company during certain twelve-month periods and have attained the age of 21. Participants can
contribute up to 100% of their pay to the SARP, subject to Internal Revenue Service limits. The Company matches 100% of the employee's contribution up to a maximum of 4% of the employee's eligible
pay. The Company match is immediately vested.
Employment AgreementsTermination, Change in Control and Non-Compete/Non-Solicitation Arrangements
The Company has entered into letter agreements of employment with Mr. Scott, Mr. Worthington, Mr. Toal,
Ms. Bradley, and Mr. Finnegan. Under the terms of these agreements, Mr. Scott, Mr. Worthington, Mr. Toal, Ms. Bradley, and Mr. Finnegan are currently
entitled to annual base salaries of $900,000, $750,000, $490,000, $375,000 and $500,000, respectively, which the Committee, at any time, may increase or decrease based on the executives' and the
Company's performance, among other pertinent factors. Mr. Scott, Mr. Worthington, Mr. Toal, Ms. Bradley, and Mr. Finnegan are also entitled to participate in the
Company's employee benefit plans, equity incentive compensation plans and IC Plan, which provides for performance-based bonuses (currently 110%, 75%, 60%, 50% and 60% of base salary, respectively).
In
connection with Mr. Worthington's appointment as President and Chief Operating Officer on November 3, 2014, subject to continued employment with the Company, the Company
guaranteed the payment of his spring 2015 and fall 2015 target bonuses under the Company's IC Plan, which will total $281,250, and he will be reimbursed for certain relocation expenses and up to
$90,000 for living expenses for a period of 12 months from his date of hire. If Mr. Worthington voluntarily resigns within 24 months of his start date, he will be required to
repay the Company up to 100% of such expenses, depending on the number of months he was employed by the Company.
Each
of Mr. Scott, Mr. Worthington, Mr. Toal, Ms. Bradley, and Mr. Finnegan is entitled to receive termination payments and other benefits from the
Company following termination of employment by the Company without cause or by reason of disability or death. In addition, Mr. Scott is entitled to receive termination payments from the Company
following his voluntary resignation from the Company, subject to his continued observance of the covenants, including non-compete and non-solicitation clauses, contained in his letter agreement of
employment. In accordance with certain of the executives' share-based payment agreements, in the event that the Company consummates a
28
Table of Contents
transaction
whereby a third party (a) acquires outstanding common stock of the Company possessing the voting power to elect a majority of the members to the Company's board of directors or
(b) acquires assets constituting all or substantially all of the assets of the Company, regardless of whether or not the executive is terminated, the Committee, at its sole discretion, may
decide if some or all of the executives' unvested share-based awards will immediately vest. If necessary to prevent such executive officers from being subject to tax under Section 409A of the
Internal Revenue Code, any payments made under their letter agreements of employment will not be paid until six months after employment termination. Refer to the "Potential Payments Upon Termination
or Change in Control" section of this Proxy Statement for further discussion of the termination payments. Mr. Scott, Mr. Toal, and Ms. Bradley have agreed to be bound by a
12 month non-compete provision upon voluntary resignation or termination for cause, and a 12 month non-solicitation provision. Mr. Worthington has agreed to be bound by a six
month non-compete provision upon voluntary resignation or termination for cause within 24 months of his start date as President and Chief Operating Officer with the Company, and a
12 month non-compete provision thereafter. Mr. Worthington has agreed to be bound by a 12 month non-solicitation provision. Mr. Finnegan has agreed to be bound by an
18 month non-compete provision upon voluntary resignation or termination for cause, and an 18 month non-solicitation provision.
In
connection with Ms. Weil no longer being employed by the Company effective August 18, 2014 (the "separation date"), the Company and Ms. Weil entered into a
separation agreement that entitles Ms. Weil to the payment of base salary for one year after the separation date totaling $600,000, which will be offset by any salary earned at
Ms. Weil's new employer, if employment is obtained within one year from the separation date. The separation agreement restricts Ms. Weil from soliciting the Company's employees for
12 months from the separation date.
In
connection with Mr. Scott's 2015 performance review, the Committee approved an award of performance-based restricted stock with a grant date of April 29, 2015 that vests
subject to the Company achieving minimum, target, and maximum operating income levels for fiscal year 2015, and Mr. Scott's continued employment with the Company. All 400,000 performance-based
shares will be cancelled if the Company achieves below the minimum operating income goal for fiscal year 2015. If the Company achieves between the minimum and target operating income goals for fiscal
year 2015, Mr. Scott will earn between 72,728 and 363,640 shares of restricted stock. If the Company achieves between the target and maximum operating income goals for fiscal year 2015,
Mr. Scott will earn between 363,640 and 400,000 shares of restricted stock. Any earned shares will vest ratably through March 2018.
Accounting and Tax Treatment
The Company accounts for share-based payment awards in accordance with ASC 718 which requires that all forms of share-based payments be
treated as compensation expense and recognized in the Company's consolidated statement of operations over the vesting period.
Cash
compensation or non-equity compensation, including base salary and incentive compensation, is recorded as an expense with an offsetting liability in the Company's consolidated
financial statements as it is earned.
The
Company accounts for income taxes in accordance with FASB ASC Topic 740, "Income Taxes."
29
Table of Contents
As part of its role, the Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the
Internal Revenue Code, which provides that the Company may not deduct compensation of more than $1,000,000 that is paid to certain individuals, not including qualifying incentive-based compensation.
The Company believes that compensation paid under the management incentive plans is generally fully deductible for federal income tax purposes.
However, in certain situations, the Committee may approve compensation that will not meet these requirements in order to ensure competitive levels of total compensation for its executive officers.
Certain Other Tax Issues. In addition to the matters described above, (i) any entitlement to a tax deduction on the part of the
Company is
subject to applicable federal tax rules (including, without limitation, Section 162(m) of the Internal Revenue Code regarding the $1,000,000 limitation on deductible compensation),
(ii) the exercise of an incentive stock option may have implications in the computation of alternative minimum taxable income, (iii) certain awards under the Company's equity
compensation plans may be subject to the requirements of Section 409A of the Internal Revenue Code (regarding nonqualified deferred compensation), and (iv) if the exercisability or
vesting of any option or certain other awards is accelerated because of a change in control, such option or award (or a portion thereof), either alone or together with certain other payments, may
constitute non-deductible excess parachute payments under Section 280G of the Internal Revenue Code, which may be subject to a 20% excise tax on participants. Officers and directors of the
Company subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, may be subject to special tax rules regarding the income tax consequences concerning their options.
Summary Compensation Table
The following table summarizes, for the fiscal years indicated, the principal components of compensation for the Company's named
executive officers. The compensation set forth below fully reflects compensation for work performed on the Company's behalf.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year |
|
Salary
($)(1) |
|
Bonus
($) |
|
Stock
Awards
($)(2) |
|
Option
Awards
($)(2) |
|
Non-Equity
Incentive
Plan
Compensation
($)(3) |
|
Change in
Pension
Value and
Non-qualified
Deferred
Compensation
Earnings
($) |
|
All Other
Compensation
($)(4) |
|
Total
($) |
|
Gregory J. Scott |
|
|
2014 |
|
|
867,308 |
|
|
|
|
|
1,492,100 |
|
|
150,000 |
|
|
|
|
|
|
|
|
32,744 |
|
|
2,542,152 |
|
Chief Executive Officer |
|
|
2013 |
|
|
800,000 |
|
|
|
|
|
1,064,000 |
|
|
1,044,000 |
|
|
594,000 |
|
|
|
|
|
21,360 |
|
|
3,523,360 |
|
|
|
|
2012 |
|
|
815,385 |
|
|
|
|
|
1,095,000 |
|
|
460,000 |
|
|
776,600 |
|
|
|
|
|
14,257 |
|
|
3,161,242 |
|
John M Worthington |
|
|
2014 |
|
|
187,500 |
|
|
|
|
|
790,000 |
|
|
1,207,500 |
|
|
|
|
|
|
|
|
22,500 |
|
|
2,207,500 |
|
President and
Chief Operating Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheamus Toal |
|
|
2014 |
|
|
482,500 |
|
|
|
|
|
265,758 |
|
|
171,927 |
|
|
|
|
|
|
|
|
19,163 |
|
|
939,348 |
|
EVP, |
|
|
2013 |
|
|
462,500 |
|
|
|
|
|
118,564 |
|
|
175,000 |
|
|
192,376 |
|
|
|
|
|
18,193 |
|
|
966,633 |
|
Chief Financial Officer |
|
|
2012 |
|
|
458,654 |
|
|
|
|
|
99,325 |
|
|
149,500 |
|
|
238,275 |
|
|
|
|
|
20,031 |
|
|
965,785 |
|
Faeth Bradley |
|
|
2014 |
|
|
362,500 |
|
|
|
|
|
84,271 |
|
|
171,927 |
|
|
|
|
|
|
|
|
12,148 |
|
|
630,846 |
|
EVP, Human Resources |
|
|
2013 |
|
|
325,000 |
|
|
|
|
|
67,277 |
|
|
175,000 |
|
|
115,588 |
|
|
|
|
|
10,937 |
|
|
693,802 |
|
|
|
|
2012 |
|
|
305,769 |
|
|
|
|
|
|
|
|
|
|
|
121,550 |
|
|
|
|
|
2,742 |
|
|
430,061 |
|
Kevin L. Finnegan |
|
|
2014 |
|
|
500,000 |
|
|
|
|
|
79,948 |
|
|
165,051 |
|
|
|
|
|
|
|
|
41,685 |
|
|
786,684 |
|
EVP, Global Sales |
|
|
2013 |
|
|
500,000 |
|
|
|
|
|
67,170 |
|
|
175,000 |
|
|
202,500 |
|
|
|
|
|
14,745 |
|
|
959,415 |
|
|
|
|
2012 |
|
|
509,615 |
|
|
|
|
|
36,500 |
|
|
115,000 |
|
|
264,750 |
|
|
|
|
|
12,816 |
|
|
938,681 |
|
Laura Weil |
|
|
2014 |
|
|
323,077 |
|
|
|
|
|
28,619 |
|
|
|
|
|
|
|
|
|
|
|
285,015 |
|
|
636,711 |
|
Former EVP, |
|
|
2013 |
|
|
600,000 |
|
|
|
|
|
72,827 |
|
|
175,000 |
|
|
243,000 |
|
|
|
|
|
21,212 |
|
|
1,112,039 |
|
Chief Operating Officer |
|
|
2012 |
|
|
606,923 |
|
|
|
|
|
330,000 |
|
|
95,000 |
|
|
317,700 |
|
|
|
|
|
1,162 |
|
|
1,350,785 |
|
- (1)
- Reflects
base salary earned for the 52-week fiscal year ended January 31, 2015 ("fiscal year 2014"), the 52-week fiscal year ended February 1,
2014 ("fiscal year 2013"), and the 53-week fiscal year ended February 2, 2013 ("fiscal year 2012").
30
Table of Contents
- (2)
- The
amounts in these columns reflect the aggregate grant date fair value of share-based awards issued during fiscal year 2014, fiscal year 2013 and fiscal
year 2012, presented in accordance with ASC 718, excluding any estimate for forfeitures. These amounts reflect the grant date fair value and do not represent the actual value that may be realized by
the named executive officers. For the relevant assumptions used to determine the valuation of share-based awards for fiscal year 2014, fiscal year 2013, and fiscal year 2012, refer to Note 8,
"Share-Based Compensation," in the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for fiscal year 2014, as filed with the SEC on
April 16, 2015.
Mr. Scott's
stock awards in fiscal years 2014, 2013 and 2012 include performance-based awards of $1.1 million, $0.5 million and $0.7 million, respectively, and his option
awards in fiscal year 2013 include performance-based awards of $0.5 million, all of which have since been cancelled due to the Company not achieving the target operating income levels required
in order for the awards to vest at the end of their respective performance periods.
- (3)
- Represents
amounts earned under the Company's IC Plan. Refer to the "Compensation Discussion and Analysis" section in this Proxy Statement for further
information about the Company's IC Plan.
Includes
the amounts in the table below that the executives deferred under the Company's MSPP.
|
|
|
|
|
|
|
|
Name
|
|
Year |
|
Deferred
under MSPP
($) |
|
Mr. Toal |
|
|
2014 |
|
|
|
|
|
|
|
2013 |
|
|
48,094 |
|
|
|
|
2012 |
|
|
59,569 |
|
Ms. Bradley |
|
|
2014 |
|
|
|
|
|
|
|
2013 |
|
|
11,559 |
|
|
|
|
2012 |
|
|
|
|
Mr. Finnegan |
|
|
2014 |
|
|
|
|
|
|
|
2013 |
|
|
10,125 |
|
|
|
|
2012 |
|
|
|
|
Ms. Weil |
|
|
2014 |
|
|
|
|
|
|
|
2013 |
|
|
36,450 |
|
|
|
|
2012 |
|
|
|
|
- (4)
- The
amounts shown in the "All Other Compensation" column are detailed in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Year |
|
Employer
Match to
the 401(k)
under the
Company's
SARP
($) |
|
Reimbursement
for Relocation
Expenses
and Living
Allowance
($) |
|
Reimbursement
for Medical
Expenses
($) |
|
Severance
($) |
|
Total
($) |
|
Mr. Scott |
|
|
2014 |
|
|
10,785 |
|
|
|
|
|
21,959 |
|
|
|
|
|
32,744 |
|
|
|
|
2013 |
|
|
10,200 |
|
|
|
|
|
11,160 |
|
|
|
|
|
21,360 |
|
|
|
|
2012 |
|
|
9,846 |
|
|
|
|
|
4,411 |
|
|
|
|
|
14,257 |
|
Mr. Worthington |
|
|
2014 |
|
|
|
|
|
22,500 |
|
|
|
|
|
|
|
|
22,500 |
|
Mr. Toal |
|
|
2014 |
|
|
10,458 |
|
|
|
|
|
8,705 |
|
|
|
|
|
19,163 |
|
|
|
|
2013 |
|
|
10,200 |
|
|
|
|
|
7,993 |
|
|
|
|
|
18,193 |
|
|
|
|
2012 |
|
|
10,138 |
|
|
|
|
|
9,893 |
|
|
|
|
|
20,031 |
|
Ms. Bradley |
|
|
2014 |
|
|
10,496 |
|
|
|
|
|
1,652 |
|
|
|
|
|
12,148 |
|
|
|
|
2013 |
|
|
10,200 |
|
|
|
|
|
737 |
|
|
|
|
|
10,937 |
|
|
|
|
2012 |
|
|
|
|
|
|
|
|
2,742 |
|
|
|
|
|
2,742 |
|
Mr. Finnegan |
|
|
2014 |
|
|
10,400 |
|
|
|
|
|
31,285 |
|
|
|
|
|
41,685 |
|
|
|
|
2013 |
|
|
10,200 |
|
|
|
|
|
4,545 |
|
|
|
|
|
14,745 |
|
|
|
|
2012 |
|
|
10,000 |
|
|
|
|
|
2,816 |
|
|
|
|
|
12,816 |
|
Ms. Weil |
|
|
2014 |
|
|
8,092 |
|
|
|
|
|
|
|
|
276,923 |
|
|
285,015 |
|
|
|
|
2013 |
|
|
10,200 |
|
|
|
|
|
11,012 |
|
|
|
|
|
21,212 |
|
|
|
|
2012 |
|
|
|
|
|
|
|
|
1,162 |
|
|
|
|
|
1,162 |
|
31
Table of Contents
Grants of Plan-Based Awards in Fiscal Year 2014
The following table provides information relating to all plan-based awards granted to the named executive officers during fiscal year
2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) |
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(5) |
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1) |
|
Estimated Future Payouts
Under Equity Incentive Plan
Awards(2) |
|
Exercise
or Base
Price of
Option
Awards
($/Sh) |
|
Grant Date
Fair
Value of
Stock and
Option
Awards
($)(6) |
|
Name
|
|
Grant Date |
|
Threshold
($) |
|
Target
($) |
|
Maximum
($) |
|
Threshold
(#) |
|
Target
(#) |
|
Maximum
(#) |
|
Gregory J. Scott |
|
|
08/25/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000 |
|
|
330,000 |
|
|
|
|
|
|
|
|
|
|
|
1,145,100 |
|
|
|
|
08/25/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000 |
(3) |
|
|
|
|
|
|
|
347,000 |
|
|
|
|
08/25/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
3.47 |
|
|
150,000 |
|
|
|
|
|
|
|
|
|
|
990,000 |
|
|
1,980,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John M Worthington |
|
|
11/03/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000 |
(3) |
|
|
|
|
|
|
|
790,000 |
|
|
|
|
11/03/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
750,000 |
|
|
3.16 |
|
|
1,207,500 |
|
|
|
|
|
|
|
|
|
|
562,500 |
|
|
1,125,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheamus Toal |
|
|
03/13/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,728 |
(4) |
|
|
|
|
|
|
|
75,521 |
|
|
|
|
08/25/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,613 |
(3) |
|
|
|
|
|
|
|
74,997 |
|
|
|
|
10/22/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000 |
(3) |
|
|
|
|
|
|
|
153,000 |
|
|
|
|
08/25/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
114,618 |
|
|
3.47 |
|
|
171,927 |
|
|
|
|
|
|
|
|
|
|
294,000 |
|
|
588,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Faeth Bradley |
|
|
03/13/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,354 |
(4) |
|
|
|
|
|
|
|
18,548 |
|
|
|
|
08/25/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,613 |
(3) |
|
|
|
|
|
|
|
74,997 |
|
|
|
|
08/25/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
114,618 |
|
|
3.47 |
|
|
171,927 |
|
|
|
|
|
|
|
|
|
|
187,500 |
|
|
375,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin L. Finnegan |
|
|
03/13/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,732 |
(4) |
|
|
|
|
|
|
|
15,898 |
|
|
|
|
08/25/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,749 |
(3) |
|
|
|
|
|
|
|
71,999 |
|
|
|
|
08/25/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110,034 |
|
|
3.47 |
|
|
165,051 |
|
|
|
|
|
|
|
|
|
|
300,000 |
|
|
600,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laura Weil |
|
|
03/13/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,436 |
(4) |
|
|
|
|
|
|
|
57,237 |
|
- (1)
- At
January 31, 2015, the last day of fiscal year 2014, these amounts represent the estimated range of cash bonuses that the executive could have
potentially earned for fiscal year 2014 performance under the Company's IC Plan as described in the "Compensation Discussion and Analysis" section of this Proxy Statement.
- (2)
- In
connection with the Company's annual performance review process, Mr. Scott was granted a performance-based restricted stock award that was set to
vest subject to the Company achieving minimum, target and maximum operating income levels for fiscal year 2014, and Mr. Scott's continued employment with the Company. All 330,000
performance-based shares were cancelled as a result of the Company achieving below the minimum operating income goal for fiscal year 2014. If the Company had achieved between the minimum and target
operating income goals for fiscal year 2014, Mr. Scott would have earned between 60,000 and 300,000 shares of restricted stock. If the Company had achieved between the target and maximum
operating income goals for fiscal year 2014, Mr. Scott would have earned between 300,000 and 330,000 shares of restricted stock. Any earned shares would have vested ratably through March 2017.
- (3)
- In
connection with the Company's annual performance review process, Mr. Scott, Mr. Toal, Ms. Bradley and Mr. Finnegan were
awarded restricted stock which cliff vests on August 25, 2017. On October 22, 2014, Mr. Toal was awarded an additional 50,000 shares of restricted stock which vests on
October 22, 2016. In connection with Mr. Worthington's appointment as President and Chief Operating Officer, he was granted restricted stock that vests on November 3, 2017.
- (4)
- Mr. Toal,
Ms. Bradley, Mr. Finnegan and Ms. Weil each deferred a portion of their bonuses earned under the Company's IC Plan in
fiscal year 2013 and were granted deferred stock units in fiscal year 2014 under the Company's MSPP, of which 50% of the units reported in the table above for each executive represents the executive's
elected deferral and were immediately vested and 50% of the units represent the Company's match under the MSPP and vest on the third anniversary of the grant date. For further information regarding
the Company's MSPP, please refer to the "Compensation Discussion and Analysis" section in this Proxy Statement.
- (5)
- In
connection with the Company's annual performance review process, Mr. Scott, Mr. Toal, Ms. Bradley and Mr. Finnegan were
awarded SARs that vest as follows: 25% on August 25, 2015, 25% on August 25, 2016 and 50% on August 25, 2017. In connection with Mr. Worthington's appointment as President
and Chief Operating Officer, he was granted SARs that vest as follows: 25% on November 3, 2015, 25% on November 3, 2016, 25% on November 3, 2017, and 25% on November 3,
2018.
Each
SAR referred to above represents the right to receive a payment measured by the increase in the fair market value of one share of common stock from the date of grant of the SAR to the date of
exercise of the SAR. Upon exercise the SARs will be settled in stock.
- (6)
- Represents
the aggregate grant date fair value of share-based awards calculated in accordance with ASC 718, excluding any estimate for forfeitures. For the
relevant assumptions used to determine the valuation of share-based awards during fiscal year 2014, refer to Note 8, "Share-Based Compensation," in the Notes to Consolidated Financial
Statements included in the Company's Annual Report on Form 10-K for fiscal year 2014, as filed with the SEC on April 16, 2015.
- (7)
- All
share-based awards granted to the named executive officers during fiscal year 2014 are under the Company's 2006 Plan.
32
Table of Contents
Outstanding Equity Awards at 2014 Fiscal Year-End
The following table provides information relating to outstanding equity awards held by the named executive officers at fiscal year end,
January 31, 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock Awards |
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable |
|
Number of
Securities
Underlying
Unexercised
Options
(#)(1)
Unexercisable |
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) |
|
Option
Exercise
Price
($) |
|
Option
Expiration
Date |
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2) |
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(2) |
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#) |
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units or
Other Rights
That Have
Not Vested
($) |
|
Gregory J. Scott |
|
|
700,000 |
|
|
|
|
|
|
|
|
3.80 |
|
|
06/01/20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000 |
|
|
50,000 |
|
|
|
|
|
6.17 |
|
|
02/15/21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000 |
|
|
|
|
|
3.65 |
|
|
04/16/22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
150,000 |
|
|
|
|
|
5.32 |
|
|
08/26/23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
|
|
|
3.47 |
|
|
08/25/24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
230,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
230,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000 |
|
|
230,000 |
|
|
|
|
|
|
|
John M Worthington |
|
|
|
|
|
750,000 |
|
|
|
|
|
3.16 |
|
|
11/03/24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250,000 |
|
|
575,000 |
|
|
|
|
|
|
|
Sheamus Toal |
|
|
50,000 |
|
|
|
|
|
|
|
|
4.74 |
|
|
03/19/18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
|
|
|
|
|
|
|
|
1.46 |
|
|
11/19/18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
|
|
|
4.79 |
|
|
04/01/20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
|
|
|
6.89 |
|
|
04/15/21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,000 |
|
|
|
|
|
3.65 |
|
|
04/16/22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,762 |
|
|
50,288 |
|
|
|
|
|
5.32 |
|
|
08/26/23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
114,618 |
|
|
|
|
|
3.47 |
|
|
08/25/24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000 |
|
|
46,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,192 |
(3) |
|
16,542 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,420 |
(3) |
|
17,066 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,818 |
(3) |
|
4,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,097 |
|
|
32,423 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,864 |
(3) |
|
20,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,613 |
|
|
49,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
115,000 |
|
|
|
|
|
|
|
Faeth Bradley |
|
|
75,000 |
|
|
25,000 |
|
|
|
|
|
2.77 |
|
|
12/27/21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,762 |
|
|
50,288 |
|
|
|
|
|
5.32 |
|
|
08/26/23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
114,618 |
|
|
|
|
|
3.47 |
|
|
08/25/24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
|
|
57,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401 |
(3) |
|
922 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,218 |
|
|
28,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,177 |
(3) |
|
5,007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,613 |
|
|
49,710 |
|
|
|
|
|
|
|
Kevin L. Finnegan |
|
|
8,919 |
|
|
|
|
|
|
|
|
3.28 |
|
|
03/21/17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000 |
|
|
|
|
|
|
|
|
4.74 |
|
|
03/19/18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000 |
|
|
|
|
|
|
|
|
2.86 |
|
|
03/18/19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
|
|
|
4.79 |
|
|
04/01/20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000 |
|
|
|
|
|
|
|
|
6.89 |
|
|
04/15/21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
3.65 |
|
|
04/16/22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,762 |
|
|
50,288 |
|
|
|
|
|
5.32 |
|
|
08/26/23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110,034 |
|
|
|
|
|
3.47 |
|
|
08/25/24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000 |
|
|
23,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
382 |
(3) |
|
879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,218 |
|
|
28,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,866 |
(3) |
|
4,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,749 |
|
|
47,723 |
|
|
|
|
|
|
|
Laura Weil |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- (1)
- Mr. Scott's
50,000 SARs with an exercise price of $6.17 become exercisable on February 15, 2015. Mr. Scott's 200,000 SARs with an
exercise price of $3.65 become exercisable on April 16, 2015. Mr. Scott's 150,000 SARs with an exercise price of $5.32 become exercisable as follows: 50,000 on August 26, 2015 and
100,000 on August 26, 2016. Mr. Scott's 100,000 SARs with an exercise price of $3.47 become exercisable as follows: 25,000 on August 25, 2015, 25,000 on August 25, 2016 and
50,000 on August 25, 2017.
Mr. Worthington's
SARs become exercisable in four equal installments on each of November 3, 2015, 2016, 2017 and 2018.
Mr. Toal's
65,000 SARs with an exercise price of $3.65 become exercisable on April 16, 2015.
Ms. Bradley's
25,000 SARs with an exercise price of $2.77 become exercisable on December 27, 2015.
33
Table of Contents
Mr. Finnegan's
50,000 SARs with an exercise price of $3.65 become exercisable on April 16, 2015.
Mr. Toal's,
Ms. Bradley's and Mr. Finnegan's 50,288 SARs with an exercise price of $5.32 become exercisable as follows: 16,762 on August 26, 2015 and 33,526 on
August 26, 2016.
Mr. Toal's
and Ms. Bradley's 114,618 SARs with an exercise price of $3.47 become exercisable as follows: 28,654 on August 25, 2015, 28,654 on August 25, 2016 and 57,310 on
August 25, 2017.
Mr. Finnegan's
110,034 SARs with an exercise price of $3.47 become exercisable as follows: 27,508 on August 25, 2015, 27,508 on August 25, 2016 and 55,018 on August 25,
2017.
Each
SAR referred to above represents the right to receive a payment measured by the increase in the fair market value of one share of common stock from the date of grant of the SAR to the date of
exercise of the SAR. Upon exercise the SARs will be settled in stock.
- (2)
- Mr. Scott's
restricted stock awards vest on April 16, 2015, August 26, 2016 and August 25, 2017.
Mr. Worthington's
restricted stock award vests on November 3, 2017.
Mr. Toal's
20,000 shares of restricted stock vest on April 16, 2015. Mr. Toal's 14,097 shares of restricted stock vest on August 26, 2016. Mr. Toal's 21,613 shares
of restricted stock vest on August 25, 2017. Mr. Toal's 50,000 shares of restricted stock vest on October 22, 2016.
Ms. Bradley's
25,000 shares of restricted stock vest on December 27, 2015. Ms. Bradley's 12,218 shares of restricted stock vest on August 26, 2016. Ms. Bradley's
21,613 shares of restricted stock vest on August 25, 2017.
Mr. Finnegan's
10,000 shares of restricted stock vest on April 16, 2015. Mr. Finnegan's 12,218 shares of restricted stock vest on August 26, 2016. Mr. Finnegan's
20,749 shares of restricted stock vest on August 25, 2017.
Market
value is based on the closing price of the Company's common stock on January 31, 2015, the last day of fiscal year 2014, which was $2.30, multiplied by the number of
shares.
- (3)
- Represents
the Company's match of unvested deferred stock units under the MSPP for various IC bonus periods. The deferred units matched by the Company under
the MSPP vest on the third anniversary of the grant date. For further information regarding the Company's MSPP, please refer to the "Compensation Discussion and Analysis" section in this Proxy
Statement.
Option Exercises and Stock Vested in Fiscal Year 2014
The following table shows the number of shares of the Company's common stock acquired and the value realized by each named executive
officer upon the exercise of stock options and vesting of restricted stock and units during fiscal year 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock Awards |
|
Name
|
|
Number of
Shares Acquired
on Exercise
(#) |
|
Value
Realized
on Exercise
($)(1) |
|
Number of
Shares Acquired
on Vesting
(#) |
|
Value
Realized
on Vesting
($)(2) |
|
Gregory J. Scott |
|
|
|
|
|
|
|
|
|
|
|
|
|
John M Worthington |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheamus Toal |
|
|
|
|
|
|
|
|
24,364 |
|
|
108,286 |
|
Faeth Bradley |
|
|
|
|
|
|
|
|
27,177 |
|
|
74,524 |
|
Kevin L. Finnegan |
|
|
|
|
|
|
|
|
9,366 |
|
|
42,074 |
|
Laura Weil |
|
|
100,000 |
|
|
21,000 |
|
|
106,718 |
|
|
334,619 |
|
- (1)
- Represents
the difference between the fair market value of the Company's common stock at exercise and the exercise price, multiplied by the number of
options exercised.
- (2)
- Represents
the number of vested shares of restricted stock and deferred units multiplied by the fair market value of the Company's common stock at the
vesting date.
34
Table of Contents
Nonqualified Deferred Compensation for Fiscal Year 2014
The following table provides information relating to the deferred compensation activity and balances, if any, for each named executive
officer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in Fiscal
Year 2014
($)(1) |
|
Company
Contributions
in Fiscal
Year 2014
($)(2) |
|
Aggregate
Earnings
in Fiscal
Year 2014
($) |
|
Aggregate
Withdrawals/
Distributions
in Fiscal
Year 2014
($) |
|
Aggregate
Balance At
End of Fiscal
Year 2014
($)(3) |
|
Gregory J. Scott |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John M Worthington |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sheamus Toal |
|
|
|
|
|
37,761 |
|
|
(108,025 |
) |
|
|
|
|
116,367 |
|
Faeth Bradley |
|
|
|
|
|
9,274 |
|
|
(10,323 |
) |
|
|
|
|
11,866 |
|
Kevin L. Finnegan |
|
|
|
|
|
7,949 |
|
|
(9,018 |
) |
|
|
|
|
10,347 |
|
Laura Weil |
|
|
|
|
|
28,619 |
|
|
(51,102 |
) |
|
|
|
|
18,625 |
|
- (1)
- The
contribution amount, if any, reflects a deferral under the MSPP of a portion of the annual bonus earned by the applicable named executive officer under
the IC Plan in fiscal year 2014 and is reflected in the "Non-Equity Incentive Plan Compensation" column in the Summary Compensation Table in fiscal year 2014. Represents the grant date fair value of
the vested deferred stock units.
- (2)
- The
contribution amount, if any, consists of an unvested contribution by the Company under the MSPP and is reflected in the "Stock Awards" column of the
Summary Compensation Table in fiscal year 2014. Represents the grant date fair value of the unvested deferred stock units granted in fiscal year 2014 by the Company.
- (3)
- The
aggregate balance for each of the named executive officers has been reported as compensation in the Summary Compensation Table in previous years.
The
Company offers its senior management the ability to participate in the Company's MSPP, which works in tandem with the IC Plan. The purpose of the MSPP is to encourage the Company's
senior management to have more ownership of the Company's stock, aligning senior management's interests with shareholders' interests, while increasing retention of key employees. The MSPP provides
senior management with the opportunity to defer up to 25% of their bonus earned under the IC Plan each fiscal year in exchange for a grant of vested deferred stock units under the Company's Amended
and Restated 2006 Long-Term Incentive Plan. The minimum deferral period is for three years. Deferral elections must be made by December 31st of the year prior to the fiscal year that the
deferral election applies to and are irrevocable. The Company will match, dollar-for-dollar, the amount of incentive compensation deferred with an additional grant of unvested deferred stock units.
The matching unvested deferred stock units granted by the Company cliff vest on the third anniversary of the grant date, subject to continued employment with the Company.
Potential Payments Upon Termination or Change in Control
This section explains the payments and benefits to which the named executive officers are entitled in various termination of employment
and change in control scenarios. These are hypothetical situations that require the Company to make assumptions concerning the termination scenarios that affect the termination payments; as such, the
termination payments and other benefits presented in the following tables are estimates as of a point in time. For purposes of this section, the Company has assumed that termination of employment or
change in control occurred on January 31, 2015, the last day of fiscal year 2014.
35
Table of Contents
The
following termination-related terms are defined in the letter agreements of employment between the Company and the named executive officers and are generally described below:
"Cause" generally means: (i) wrongful misappropriation of the Company's assets; (ii) certain conditions that render the
executive incapable of performing the essential functions of their position; (iii) conviction of, or pleading "guilty" or "no contest" to, a felony; (iv) intentionally causing the
Company to violate a material local, state or federal law; (v) willful refusal to comply with a significant, lawful and proper policy, directive or decision of the executive's supervisor or the
board of directors of the Company; (vi) the executive's breach of the employment agreement or letter agreement of employment, in any material respect; and (vii) gross negligence or
willful misconduct in connection with the executive's duties and responsibilities to the Company.
"Change in Control" generally means: (i) the acquisition by a "person," as such term is used in Sections 13(d) and 14(d) of
the Exchange Act, that results in such person becoming the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of (a) 30% or more of the Company's voting securities and
(b) a greater percentage of the Company's voting securities than Irving Place Capital and certain other voting security holders; (ii) a change in the majority of the board of directors;
(iii) the occurrence of certain reorganizations, mergers or consolidations of the Company; or (iv) a sale of all or substantially all of the assets of the Company.
"Disability" generally means: the inability, by reason of bodily injury or physical or mental disease, or any combination thereof, of the
executive to perform his or her customary or other comparable duties with the Company for a period of at least six months in any 12-month calendar period as determined in accordance with the Company's
Long-Term Disability Plan.
Mr. Scott, Mr. Worthington, Mr. Toal, Ms. Bradley, and
Mr. Finnegan
No termination payments are due to the executives under their respective letter agreements of employment upon a change in control,
following termination of employment by the Company with cause, following termination by the executive for good reason, and, with the exception of Mr. Scott, following termination by the
executive.
Following
termination of employment by the Company without cause, and subject to the execution and delivery to the Company of a general release covering employment-related claims and
their continued observance of the covenants contained in their letter agreements of employment, each of Mr. Scott, Mr. Toal, Ms. Bradley and Mr. Finnegan, is entitled to be
paid their base salary for 12 months. If Mr. Scott voluntarily resigns, he is entitled to be paid his base salary for 12 months subject to his continued observance of the
covenants, including non-compete and non-solicitation clauses, contained in his letter
agreement of employment. If Mr. Worthington's employment is terminated without cause, and subject to the execution and delivery to the Company of a general release covering employment-related
claims and his continued observance of the covenants contained in his letter agreement of employment, prior to the two-year anniversary of his start date (November 3, 2014) with the Company, he
is entitled to be paid his base salary for six months and for twelve months thereafter. The base salary paid to Mr. Scott, Mr. Worthington, Mr. Toal, Ms. Bradley, and
Mr. Finnegan would be offset by any salary earned at the executive's new employer, if employment is obtained within the applicable severance period.
If
the executive's employment is terminated by reason of disability, the executive will be entitled to be paid the following after termination: (i) 100% of base salary in year
one, (ii) 80% of base salary in year two, (iii) 60% of base salary in year three, and (iv) 60% of base salary, subject to IRS limits, in year four and thereafter up to at least
the age of 65, depending on the age at which the disability occurred.
36
Table of Contents
If Mr. Scott, Mr. Worthington, Mr. Toal, Ms. Bradley or Mr. Finnegan's employment is terminated by reason of death, the
executive's beneficiaries will be paid up to $3.0 million, depending on the executive's base salary and cause of death in accordance with the Company's life insurance policies.
Potential Payments to Gregory J. Scott upon the Occurrence of Certain Events
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Compensation
|
|
Termination
by the
Executive
For Good
Reason |
|
Termination
by the
Executive |
|
Termination
by the
Company
For Cause |
|
Termination
by the
Company
Other Than
For Cause |
|
Upon a
Change in
Control |
|
Termination
due to the
Executive's
Disability |
|
Termination
Upon the
Executive's
Death |
|
Cash Severance (base salary) |
|
$ |
|
|
$ |
900,000 |
|
$ |
|
|
$ |
900,000 |
|
$ |
|
|
$ |
|
|
$ |
|
|
Other(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,319,000 |
|
|
3,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
$ |
900,000 |
|
$ |
|
|
$ |
900,000 |
|
$ |
|
|
$ |
2,319,000 |
|
$ |
3,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential Payments to John M Worthington upon the Occurrence of Certain Events
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Compensation
|
|
Termination
by the
Executive
For Good
Reason |
|
Termination
by the
Executive
For No
Good
Reason |
|
Termination
by the
Company
For
Cause |
|
Termination
by the
Company
Other Than
For Cause |
|
Upon a
Change in
Control |
|
Termination
due to the
Executive's
Disability |
|
Termination
Upon the
Executive's
Death |
|
Cash Severance (base salary) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
375,000 |
|
$ |
|
|
$ |
|
|
$ |
|
|
Other(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,959,000 |
|
|
3,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
375,000 |
|
$ |
|
|
$ |
1,959,000 |
|
$ |
3,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential Payments to Sheamus Toal upon the Occurrence of Certain Events
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Compensation
|
|
Termination
by the
Executive
For Good
Reason |
|
Termination
by the
Executive
For No
Good
Reason |
|
Termination
by the
Company
For Cause |
|
Termination
by the
Company
Other Than
For Cause |
|
Upon a
Change in
Control |
|
Termination
due to the
Executive's
Disability |
|
Termination
Upon the
Executive's
Death |
|
Cash Severance (base salary) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
490,000 |
|
$ |
|
|
$ |
|
|
$ |
|
|
Other(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,335,000 |
|
|
3,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
490,000 |
|
$ |
|
|
$ |
1,335,000 |
|
$ |
3,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential Payments to Faeth Bradley upon the Occurrence of Certain Events
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Compensation
|
|
Termination
by the
Executive
For Good
Reason |
|
Termination
by the
Executive
For No
Good
Reason |
|
Termination
by the
Company
For Cause |
|
Termination
by the
Company
Other Than
For Cause |
|
Upon a
Change in
Control |
|
Termination
due to the
Executive's
Disability |
|
Termination
Upon the
Executive's
Death |
|
Cash Severance (base salary) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
375,000 |
|
$ |
|
|
$ |
|
|
$ |
|
|
Other(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,059,000 |
|
|
2,875,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
375,000 |
|
$ |
|
|
$ |
1,059,000 |
|
$ |
2,875,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
Table of Contents
Potential Payments to Kevin L. Finnegan upon the Occurrence of Certain Events
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of Compensation
|
|
Termination
by the
Executive
For Good
Reason |
|
Termination
by the
Executive
For No
Good
Reason |
|
Termination
by the
Company
For Cause |
|
Termination
by the
Company
Other Than
For Cause |
|
Upon a
Change in
Control |
|
Termination
due to the
Executive's
Disability |
|
Termination
Upon the
Executive's
Death |
|
Cash Severance (base salary) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
500,000 |
|
$ |
|
|
$ |
|
|
$ |
|
|
Other(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,359,000 |
|
|
3,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
500,000 |
|
$ |
|
|
$ |
1,359,000 |
|
$ |
3,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- (1)
- Represents
amounts payable to the executive or the executive's beneficiary, in the case of death, under the Company's disability plan and life insurance
policies. Termination payments for termination by reason of disability represent four years of payments under the Company's Long-Term Disability Plan in the tables above. However, the Company's
Long-Term Disability Plan provides termination payments equal to 60 percent of the executive's base salary, subject to IRS limits, in year four after termination and thereafter up to at least
the age of 65, depending on the age at which the disability occurred.
In
connection with Ms. Weil no longer being employed by the Company effective August 18, 2014, the Company and Ms. Weil entered into a separation agreement that
entitles Ms. Weil to the payment of base salary for one year after the separation date totaling $600,000, which will be offset by any salary earned at Ms. Weil's new employer, if
employment is obtained within one year from the separation date. The separation agreement restricts Ms. Weil from soliciting the Company's employees for 12 months from the separation
date.
Equity Compensation Plan Information
The following table sets forth information as of January 31, 2015 about shares of the Company's common stock that may be issued
under the Company's existing equity compensation plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
(b) |
|
(c) |
|
Plan category
|
|
Number of
securities to
be issued upon
exercise of
outstanding
options, SARs,
warrants and
rights(1) |
|
Weighted-
average
exercise
price of
outstanding
options, SARs,
warrants and
rights(2) |
|
Number of securities
remaining available
for issuance
under equity
compensation plans
(excluding securities
reflected in
column(a)(3) |
|
Equity compensation plans approved by security holders |
|
|
6,004,499 |
|
$ |
4.15 |
|
|
3,645,055 |
|
Equity compensation plans not approved by security holders |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
6,004,499 |
|
$ |
4.15 |
|
|
3,645,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- (1)
- Includes
529,378 stock options and 5,475,121 SARs. Each SAR represents the right to receive a payment measured by the increase in the fair market value of
one share of common stock from the date of grant of the SAR to the date of exercise of the SAR. Upon exercise the SARs will be settled in stock.
- (2)
- Represents
the weighted-average exercise price for outstanding stock options and SARs.
- (3)
- Represents
3,645,055 shares available for issuance under the 2006 Plan as of January 31, 2015.
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Table of Contents
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Person Transactions Policy and Procedures
The board of directors of the Company approves, based upon the recommendation of the audit committee, any related person transaction
which is required to be disclosed under the rules of the SEC. In addition, on at least an annual basis, each director, nominee for director and executive officer is obligated to complete a
questionnaire that requires disclosure of any transaction in which the Company was or is to be a participant in which the director, nominee or executive officer, or any member of his or her immediate
family, has a direct or indirect material interest. These questionnaires are reviewed by the Company's counsel to identify any potential conflicts of interest or other transactions that the board of
directors should review in light of the SEC rules regarding the disclosure of transactions with related persons.
Stockholders Agreement
Irving Place Capital and certain of the Company's former senior management stockholders are party to a stockholders agreement that
governs certain relationships among, and contains certain rights and obligations of, such stockholders.
The
stockholders agreement provides that the parties must vote their securities in favor of the individuals nominated to the board of directors by Irving Place Capital. From and after
the date that the stockholders party to the agreement and their transferees hold less than 50% of the Company's outstanding common stock, the parties to the agreement will be obliged to vote for two
individuals nominated to the board of directors by Irving Place Capital. Such voting obligations will terminate when Irving Place Capital and certain of its transferees own less than 20% of the
Company's outstanding common stock.
The
stockholders agreement also gives the parties certain rights with respect to registration under the Securities Act of shares of the Company's securities held by them and certain
customary indemnification rights. These registration rights include demand registration rights requiring the Company to register their shares under the Securities Act. In addition, in the event the
Company proposes to register any shares of common stock under the Securities Act, whether in connection with a primary or secondary offering, the stockholders party to the stockholders agreement may
request that the Company affect a registration of their shares under the Securities Act.
STOCKHOLDER PROPOSALS FOR THE 2016 ANNUAL MEETING
In accordance with Rule 14a-8 of the Exchange Act, any stockholder proposals intended to be included in the Proxy Statement and
presented at the 2016 Annual Meeting of Stockholders of the Company must be received by the Company no later than January 4, 2016. The proposal should be addressed to: Chair of the Nomination
and Governance Committee, New York & Company, Inc., 330 West 34th Street, 9th Floor, New York, NY 10001.
In
addition, the Company has established an advance notice procedure with regard to certain matters, including stockholder proposals not included in the Company's Proxy Statement, to be
brought before an annual meeting of stockholders. A stockholder's notice must be delivered to or mailed and received at the principal executive offices of the Company, not less than 60 days nor
more than 90 days prior to the meeting, regardless of any postponements, deferrals or adjournments of that meeting; provided, however, that in the event that less than 70 days notice or
prior public announcement of the date of the meeting is given or made to stockholders, notice by the stockholder must be received not later than the close of business on the
10th day following the date on which such notice of the date of the annual meeting was mailed or such public announcement was made.
39
Table of Contents
A
stockholder's notice with respect to a proposed item of business must include: (i) a brief description of the substance of, and the reasons for conducting, such business at the
annual meeting; (ii) the name and address of the stockholder proposing such business; (iii) the number of shares of the Company which are beneficially owned by the stockholder, any
person controlling, directly or indirectly, or acting in concert with, such stockholder and any person controlling, controlled by or under common control with such stockholder; and (iv) any
material interest of the stockholder in such business.
A
stockholder's notice with respect to a director nomination must set forth: (i) name, address and number of shares of the Company which are beneficially owned by the nominating
stockholder, any person controlling, directly or indirectly, or acting in concert with, such nominating stockholder and any person controlling, controlled by or under common control with such
nominating stockholder; (ii) name, address and number of shares of the Company which are beneficially owned by the candidate; (iii) a detailed biography outlining the candidate's
relevant background, professional and business experience and other significant accomplishments; (iv) an acknowledgement from the candidate that he or she would be willing to serve on the
board, if elected; (v) a statement by the stockholder outlining the reasons why this candidate's skills, experience and background would make a valuable contribution to the board; and
(vi) a minimum of two references who have either worked with the candidate, served on a board of directors or board of trustees with the candidate, or can otherwise provide relevant perspective
on the candidate's capabilities as a potential board member.
40
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THIS PROXY CARD
IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR
BLACK INK AS FOLLOWS: Signature (Joint Owners) Signature [PLEASE SIGN WITHIN
BOX] Date Date To withhold authority to vote for any individual nominee(s),
mark For All Except and write the number(s) of the nominee(s) on the line
below. 0 0 0 0 0 0 0000249410_1 R1.0.0.51160 For Withhold For All All All
Except THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR PROPOSALS (1) AND (2):
1. Election of Directors Nominees 01 Gregory J. Scott 02 Bodil M. Arlander 03
David H. Edwab 04 James O. Egan 05 Lori H. Greeley 06 John D. Howard 07 Grace
Nichols 08 Michelle Pearlman 09 Richard L. Perkal 10 Arthur E. Reiner NEW
YORK & COMPANY, INC. 330 WEST 34TH STREET 9TH FLOOR NEW YORK, NY 10001
VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting
instructions and for electronic delivery of information up until 11:59 P.M.
Eastern Time the day before the cut-off date or meeting date. Have your proxy
card in hand when you access the web site and follow the instructions to
obtain your records and to create an electronic voting instruction form.
Electronic Delivery of Future PROXY MATERIALS If you would like to reduce the
costs incurred by our company in mailing proxy materials, you can consent to
receiving all future proxy statements, proxy cards and annual reports
electronically via e-mail or the Internet. To sign up for electronic
delivery, please follow the instructions above to vote using the Internet
and, when prompted, indicate that you agree to receive or access proxy
materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use
any touch-tone telephone to transmit your voting instructions up until 11:59
P.M. Eastern Time the day before the cut-off date or meeting date. Have your
proxy card in hand when you call and then follow the instructions. VOTE BY
MAIL Mark, sign and date your proxy card and return it in the postage-paid
envelope we have provided or return it to Vote Processing, c/o Broadridge, 51
Mercedes Way, Edgewood, NY 11717. For Against Abstain 2. To ratify the
appointment of Ernst & Young LLP as the Company's independent registered
public accounting firm for fiscal year 2015. NOTE: To transact such other
business as may properly come before the Annual Meeting and any adjournment
or postponement. Please be sure to sign and date this Proxy in the box below.
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0000249410_2
R1.0.0.51160 Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/
are available at www.proxyvote.com . REVOCABLE PROXY NEW YORK & COMPANY,
INC. 2015 ANNUAL MEETING OF STOCKHOLDERS THIS PROXY IS SOLICITED ON THE BEHALF
OF THE BOARD OF DIRECTORS The undersigned, revoking all prior proxies, hereby
appoints, Gregory J. Scott, John M Worthington and Sheamus Toal, and each of
them, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated hereon, all shares of common
stock of New York & Company, Inc. (the "Company") which the
undersigned would be entitled to vote if present in person at the Annual
Meeting of Stockholders of the Company to be held at 10:00 a.m., EDT, on
Thursday, June 18, 2015 or at any adjournment(s) or postponement(s) thereof.
This proxy, when properly executed, will be voted in the manner directed
herein. If no such direction is made, this proxy will be voted in accordance
with the Board of Directors' recommendations. Continued and to be signed on
reverse side
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