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VRA > SEC Filings for VRA > Form 8-K on 29-Mar-2013All Recent SEC Filings

Show all filings for VERA BRADLEY, INC. | Request a Trial to NEW EDGAR Online Pro

Form 8-K for VERA BRADLEY, INC.


29-Mar-2013

Change in Directors or Principal Officers


Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 7, 2013, the Compensation Committee of the Board of Directors (the "Compensation Committee") of Vera Bradley, Inc. (the "Company") approved the fiscal 2014 Annual Incentive Compensation Plan (the "Annual Plan") and equity awards to certain officers and directors under the FY14 Restricted Stock Unit/Performance Unit Terms and Conditions (the "LTI Plan"). Both the Annual Plan and the LTI Plan were adopted pursuant to the Vera Bradley, Inc. 2010 Equity and Incentive Plan.

Annual Plan

Under the Annual Plan, certain management employees of the Company are eligible for cash awards based on Company performance, including, but not limited to, the Chief Executive Officer and the other named executive officers.

If the Company meets certain specific net revenue and net income targets established by the Compensation Committee for fiscal 2014, the individuals are eligible for a cash payment under the Annual Plan based on their respective fiscal 2014 gross base salary (before taxes and deductions).

The Annual Plan provides for three levels of performance: threshold, target, and excellence. The following table sets forth each named executive officer's threshold, target, and excellence annual bonus opportunities for fiscal 2014, as well as the bonus levels as a percentage of each officer's fiscal 2014 base salary.

                                                    Fiscal            Fiscal            Fiscal              Fiscal 2014
                                    Fiscal           2014              2014              2014            Threshold/Target/
                                     2014          Threshold          Target          Excellence       Excellence Bonus as a
                                     Base            Bonus             Bonus             Bonus             Percentage of
Name                              Salary(1)       Opportunity       Opportunity       Opportunity       Eligible  Earnings
Michael C. Ray                    $  616,590     $     231,221     $     462,443     $     924,885      37.5% / 75% / 150%
Barbara Bradley Baekgaard            465,764           116,441           232,882           465,764       25% / 50% / 100%
Kimberly F. Colby                    418,990           104,748           209,495           418,990       25% / 50% / 100%
Matthew C. Wojewuczki                389,480            97,370           194,740           389,480       25% / 50% / 100%

(1) This column reflects the fiscal 2014 base salary approved by the Compensation Committee; however, the calculation of bonus to be received will be made based upon the participant's actual "eligible earnings" for fiscal 2014. Eligible earnings are defined as gross wages earned under regular employment status during the fiscal year, excluding any incentive payments and taxable fringe benefits.

The Annual Plan is intended to comply with the performance-based compensation exception under section 162(m) of the Internal Revenue Code of 1986. As a result, the Committee must certify the attainment of the performance goals established before the payouts.

LTI Plan

The LTI Plan provides for granting equity awards to certain management employees of the Company, including, but not limited to, the Chief Executive Officer and the other named executive officers. The individuals received grants of both restricted stock units which vest over time, as well as performance restricted stock units which only vest upon the achievement of certain financial goals (described below).

Time-Based Restricted Stock Units

Eligible individuals were granted restricted stock units (the "RSUs") which are subject to time-based vesting. The time-based RSUs vest and settle in common shares, on a one-for-one basis, in installments on each of the first three anniversaries of the grant date. Vesting of the RSUs will be accelerated upon death or disability, upon retirement on a pro rata basis, or upon the occurrence of a change in control, as defined in the award agreement.


Grants were made on March 29, 2013, to the following individuals in the following amounts:

                   Named Executive Officer     Number of RSUs
                   Michael C. Ray                       13,047
                   Barbara Bradley Baekgaard             4,731
                   Kimberly F. Colby                     4,256
                   Matthew C. Wojewuczki                 3,956

Performance Restricted Stock Units

The Compensation Committee also established target awards and quantitative performance goals for fiscal years 2014, 2015 and 2016 for performance RSU awards.

Each of the named executive officers has an opportunity to earn between 0% and 200% of a target number of restricted stock units established for his or her position. Actual payouts for the performance RSU awards will be determined after a three-year performance period, and will depend on the Company's three-year net income growth.

For purposes of these awards, net income growth means the percentage increase in the Company's net income between fiscal 2013 and 2014; fiscal 2014 and 2015; and fiscal 2015 and 2016. Net income will equal the Company's consolidated net income, as determined in accordance with U.S. GAAP, adjusted to exclude the effects, as shown on the financial statements furnished as part of Form 8-K (announcing the Company's fiscal year-end financial results) for each fiscal year of the Company, of (i) any acquisition during the relevant fiscal year, including the amortization expense of intangible assets acquired during the relevant fiscal year; (ii) material charges or income arising from litigation;
(iii) corporate restructuring, asset impairment, or other special charges, and
(iv) cumulative effect of changes to U.S. GAAP accounting.

After completion of the each fiscal year in the performance period, the Compensation Committee will certify the extent to which the performance goals have been met, and will determine the number of restricted stock units that have been earned based on this performance.

Performance RSUs that are earned will vest if the executive remains employed throughout the performance period and will be paid out in fiscal 2016. The earned performance RSUs will convert on a one-for-one basis into the Company's common stock when they are settled. Vesting of the RSUs will be accelerated upon death or disability, upon retirement on a pro rata basis, or upon the occurrence of a change in control, as defined in the award agreement.

Performance RSUs are intended to comply with the performance-based compensation exception under section 162(m) of the Internal Revenue Code of 1986. As result, the Committee must certify the attainment of the performance goals established before the payouts will occur.


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