DEF 14A
Table of Contents
DEF 14Afalse0001495320 0001495320 2023-01-29 2024-02-03 0001495320 2022-01-30 2023-01-28 0001495320 2021-01-31 2022-01-29 0001495320 vra:Mr.WallstromMember 2021-01-31 2022-01-29 0001495320 vra:YearendFairValueOfOutstandingAndUnvestedEquityAwardsGrantedInFiscalYearMember ecd:NonPeoNeoMember 2021-01-31 2022-01-29 0001495320 vra:ChangeInFairValueFromThePriorYearForEquityAwardsGrantedInPriorYearThatVestedMember ecd:NonPeoNeoMember 2021-01-31 2022-01-29 0001495320 vra:GrantDateFairValueOfEquityAwardsInSctMember ecd:PeoMember vra:Mr.WallstromMember 2021-01-31 2022-01-29 0001495320 vra:ChangeInFairValueOfOutstandingAndUnvestedEquityAwardsGrantedInPriorYearsMember ecd:PeoMember vra:Mr.WallstromMember 2021-01-31 2022-01-29 0001495320 vra:YearendFairValueOfOutstandingAndUnvestedEquityAwardsGrantedInFiscalYearMember ecd:PeoMember vra:Mr.WallstromMember 2021-01-31 2022-01-29 0001495320 vra:ChangeInFairValueFromThePriorYearForEquityAwardsGrantedInPriorYearThatVestedMember ecd:PeoMember vra:Mr.WallstromMember 2021-01-31 2022-01-29 0001495320 vra:GrantDateFairValueOfEquityAwardsInSctMember ecd:NonPeoNeoMember 2021-01-31 2022-01-29 0001495320 vra:ChangeInFairValueOfOutstandingAndUnvestedEquityAwardsGrantedInPriorYearsMember ecd:NonPeoNeoMember 2021-01-31 2022-01-29 0001495320 vra:Ms.ArdreyMember 2022-01-30 2023-01-28 0001495320 vra:Mr.WallstromMember 2022-01-30 2023-01-28 0001495320 vra:YearendFairValueOfOutstandingAndUnvestedEquityAwardsGrantedInFiscalYearMember ecd:NonPeoNeoMember 2022-01-30 2023-01-28 0001495320 vra:GrantDateFairValueOfEquityAwardsInSctMember ecd:NonPeoNeoMember 2022-01-30 2023-01-28 0001495320 vra:ChangeInFairValueOfOutstandingAndUnvestedEquityAwardsGrantedInPriorYearsMember ecd:NonPeoNeoMember 2022-01-30 2023-01-28 0001495320 vra:ChangeInFairValueFromThePriorYearForEquityAwardsGrantedInPriorYearThatVestedMember ecd:NonPeoNeoMember 2022-01-30 2023-01-28 0001495320 vra:FairValueFromThePriorYearForEquityAwardsForfeitedMember ecd:NonPeoNeoMember 2022-01-30 2023-01-28 0001495320 vra:FairValueFromThePriorYearForEquityAwardsForfeitedMember ecd:PeoMember vra:Mr.WallstromMember 2022-01-30 2023-01-28 0001495320 vra:YearendFairValueOfOutstandingAndUnvestedEquityAwardsGrantedInFiscalYearMember ecd:PeoMember vra:Mr.WallstromMember 2022-01-30 2023-01-28 0001495320 vra:YearendFairValueOfOutstandingAndUnvestedEquityAwardsGrantedInFiscalYearMember ecd:PeoMember vra:Ms.ArdreyMember 2022-01-30 2023-01-28 0001495320 vra:GrantDateFairValueOfEquityAwardsInSctMember ecd:PeoMember vra:Ms.ArdreyMember 2022-01-30 2023-01-28 0001495320 vra:GrantDateFairValueOfEquityAwardsInSctMember ecd:PeoMember vra:Mr.WallstromMember 2022-01-30 2023-01-28 0001495320 vra:ChangeInFairValueOfOutstandingAndUnvestedEquityAwardsGrantedInPriorYearsMember ecd:PeoMember vra:Mr.WallstromMember 2022-01-30 2023-01-28 0001495320 vra:ChangeInFairValueFromThePriorYearForEquityAwardsGrantedInPriorYearThatVestedMember ecd:PeoMember vra:Mr.WallstromMember 2022-01-30 2023-01-28 0001495320 vra:Ms.ArdreyMember 2023-01-29 2024-02-03 0001495320 vra:ChangeInFairValueOfOutstandingAndUnvestedEquityAwardsGrantedInPriorYearsMember ecd:PeoMember vra:Ms.ArdreyMember 2023-01-29 2024-02-03 0001495320 vra:FairValueFromThePriorYearForEquityAwardsForfeitedMember ecd:NonPeoNeoMember 2023-01-29 2024-02-03 0001495320 vra:ChangeInFairValueFromThePriorYearForEquityAwardsGrantedInPriorYearThatVestedMember ecd:NonPeoNeoMember 2023-01-29 2024-02-03 0001495320 vra:ChangeInFairValueOfOutstandingAndUnvestedEquityAwardsGrantedInPriorYearsMember ecd:NonPeoNeoMember 2023-01-29 2024-02-03 0001495320 vra:YearendFairValueOfOutstandingAndUnvestedEquityAwardsGrantedInFiscalYearMember ecd:NonPeoNeoMember 2023-01-29 2024-02-03 0001495320 vra:GrantDateFairValueOfEquityAwardsInSctMember ecd:NonPeoNeoMember 2023-01-29 2024-02-03 0001495320 vra:ChangeInFairValueFromThePriorYearForEquityAwardsGrantedInPriorYearThatVestedMember ecd:PeoMember vra:Ms.ArdreyMember 2023-01-29 2024-02-03 0001495320 2 2023-01-29 2024-02-03 0001495320 3 2023-01-29 2024-02-03 0001495320 1 2023-01-29 2024-02-03 0001495320 vra:Mr.WallstromMember 2023-01-29 2024-02-03 iso4217:USD iso4217:USD xbrli:shares
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
Filed by the Registrant 
        Filed by a Party other than the Registrant 
Check the appropriate box:
 
 
Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
 
Definitive Proxy Statement
 
Definitive Additional Materials
 
Soliciting Material under
§240.14a-12
 
 
 
LOGO
VERA BRADLEY, INC.
(Name of Registrant as Specified In Its Charter)
 
  
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
 
No fee required.
 
Fee paid previously with preliminary materials.
 
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14(a)-6(i)(1) and 0-11.


Table of Contents

LOGO


Table of Contents

LOGO

 

Welcome to the Vera Bradley, Inc.

 

Annual Meeting of Shareholders

 

Dear Shareholder of Vera Bradley, Inc.:

 

You are cordially invited to attend the 2024 Annual Meeting of Shareholders of Vera Bradley, Inc., to be held at 8:00 a.m., Central Time, on May 30, 2024 at the Seneca Lounge, The Ritz-Carlton, Water Tower Place, 160 East Pearson Street, Chicago, IL 60611.

 

The attached Notice of 2024 Annual Meeting of Shareholders and Proxy Statement provide information concerning the matters to be considered and voted on at the Annual Meeting. Please take the time to carefully read each of the proposals.

 

Regardless of the number of shares you hold or whether you plan to attend the meeting in person, your vote is important. Accordingly, please vote your shares as soon as possible by following the instructions you received on your proxy card. Voting your shares prior to the Annual Meeting will not prevent you from voting your shares in person if you subsequently choose to attend the meeting.

 

To make it easier for you to vote, Internet and telephone voting are available. The instructions for voting via the Internet and telephone can be found on your proxy card.

 

Thank you for your continued support of Vera Bradley, Inc.

 

Sincerely,

 

LOGO

 

Jacqueline M. Ardrey

President and Chief Executive Officer

 

April 26, 2024

 

 

 


Table of Contents

LOGO

 

 

LOGO

 

NOTICE OF 2024 ANNUAL MEETING
OF SHAREHOLDERS

 

Date:

May 30, 2024

 

Time:

8:00 a.m., Central Time

 

Place:

Seneca Lounge, The Ritz-Carlton

Water Tower Place

160 East Pearson Street,

Chicago, IL 60611.

 

Record Date:

April 3, 2024. You are entitled to vote at the Annual Meeting only if you were a shareholder at the close of business on the record date.

 

Items of Business:

•  To elect nine Directors for a one-year term to expire at the 2025 Annual Meeting of Shareholders

•  To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2025

•  To approve, on an advisory basis, the compensation of the Company’s named executive officers

•  To transact any other business as may properly come before the meeting or at any adjournments or postponements thereof.

    

Proxy Voting:

Shareholders of record may vote in person at the Annual Meeting in Chicago, but may also appoint proxies to vote their shares in one of the following ways

 

     LOGO  

Via Internet

Cast your vote at

www.proxyvote.com 24/7 until

11:59 p.m., Eastern Time on

May 29, 2024

     LOGO  

Via Phone

Cast your vote by phone at

1-800-690-6903 24/7 until

11:59 p.m., Eastern Time on

May 29, 2024

     LOGO  

Via Mail

Mark, sign, and date your

proxy card and return it in the

postage-paid envelope provided

 

      
      

 

Shareholders whose shares are held by a bank, broker, or other nominee (in “street name”) may instruct such record holders how to vote their shares. Any proxy may be revoked at any time prior to its exercise at the meeting by following the procedures described in the proxy solicitation materials. If you hold your shares in “street name” and wish to vote your shares in person at the Annual Meeting, you must obtain a legal proxy from your bank, broker, or other holder of record, giving you the right to vote the shares.

 

By Order of the Board of Directors,

 

LOGO

 

Mark C. Dely

Corporate Secretary

 

April 26, 2024

 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on May 30, 2024: This 2024 Proxy Statement and Notice of Annual Meeting of Shareholders and our Fiscal 2024 Annual Report are available in the “Investor Relations” section of our website at www.verabradley.com.

 

 

 


Table of Contents

LOGO

 

 

TABLE OF CONTENTS

 

PROXY SUMMARY

     1  
Fiscal 2024 Business Highlights      1  

Strategic Progress

     1  

Financial Results

     2  
Corporate Responsibility and our Environmental, Social, and Governance Efforts      3  
Executive Compensation      3  
Corporate Governance Highlights      4  
Shareholder Engagement      5  
Questions and Answers      5  
Note About Forward-Looking Statements      5  

PROPOSAL NO. 1 ELECTION OF DIRECTORS

     1  
VOTE REQUIRED AND BOARD RECOMMENDATION      1  

THE BOARD OF DIRECTORS

     2  
Director Qualifications and Selection Process      2  
Director Nominees for Election at the 2024 Annual Meeting      3  

CORPORATE GOVERNANCE

     6  
Corporate Governance Guidelines      6  
Conflict of Interest and Business Ethics Policy      6  
Code of Ethics for Senior Financial Officers      6  
Risk Oversight      6  
Stock Ownership Guidelines      7  
Hedging, Derivatives and Pledging      7  
Talent and Compensation Committee Interlocks and Insider Participation      7  
Policy on Related Party Transactions      7  
Related Party Transactions for Fiscal 2024      8  
Family Relationships      8  
Copies of Governance Documents      8  

THE BOARD AND ITS COMMITTEES

     9  
Board Responsibilities      9  
Board Independence      9  
Board Leadership Structure and Lead Independent Director      10  
Standing Committees and Meetings of the Board      10  
Annual Board and Committee Evaluations      11  
Committee Charters      11  
Communications with Directors      12  

DIRECTOR COMPENSATION

     13  
Cash Compensation for Non-Employee Directors      13  
Restricted Stock Units for Non-Employee Directors      13  
Fiscal 2024 Director Compensation      13  
PROPOSAL NO. 2 RATIFICATION OF INDEPENDENT AUDITOR      14  
Proposal      14  
Principal Accounting Fees and Services      14  
VOTE REQUIRED AND BOARD RECOMMENDATION      14  

AUDIT COMMITTEE REPORT

     15  
PROPOSAL NO. 3 ADVISORY VOTE ON EXECUTIVE COMPENSATION      16  
Proposal      16  
VOTE REQUIRED AND BOARD RECOMMENDATION      16  
EXECUTIVE COMPENSATION      17  
TALENT AND COMPENSATION COMMITTEE REPORT      17  
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS      17  
Our Compensation Philosophy and Objectives      18  
Compensation Mix and Pay for Performance      19  
How We Make Executive Compensation Decisions      20  
Elements of our Executive Compensation Program in Fiscal 2024      21  
Agreements with Named Executive Officers      27  
Compensation and Risk      27  
Effect of Accounting and Tax Treatment on Compensation Decisions      28  
COMPENSATION TABLES      29  
Summary Compensation Table      29  
Fiscal 2024 Grants of Plan-Based Awards      30  
Outstanding Equity Awards at 2024 Fiscal Year-End      31  
Option Exercises and Shares Vested      32  
Pension Benefits      32  
Nonqualified Deferred Compensation      32  
Potential Payments Upon Termination or Change in Control      33  
Severance Agreements and Arrangements      35  
PAY RATIO DISCLOSURE      38  
PAY VERSUS PERFORMANCE DISCLOSURE      39  
QUESTIONS AND ANSWERS ABOUT THE PROXY AND THE 2024 ANNUAL MEETING      42  
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT      45  
OTHER BUSINESS & ADDITIONAL INFORMATION      47  
Delinquent Section 16(a) Reports      47  
Requirements, Including Deadlines, for Submission of Proxy Proposals, Nomination of Directors, and Other Business of Shareholders      47  
 

 

 

 


Table of Contents

LOGO

 

PROXY SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider, and we encourage you to read the entire Proxy Statement before voting.

FISCAL 2024 BUSINESS HIGHLIGHTS

 

 
Strategic Progress

We ended fiscal 2024 with consolidated revenues of $470.8 million. Although fiscal 2024 had its challenges, we took actions that laid the groundwork to position the Company for the future.

 

On a corporate basis:

 

 

We launched our long-term strategic plan, Project Restoration, and completed the first year of our turnaround. We thoughtfully outlined our plans in each of the four pillars of the strategic plan – Consumer, Brand, Product, and Channel – and began implementation of key initiatives.

 

 

In early fiscal 2024, we acquired the remaining 25% interest in Pura Vida from founders Griffin Thall and Paul Goodman for $10 million.

 

 

As a Company, we continued to carefully manage both gross margin and expenses and instilled a culture of discipline around gross margin and expense control. We continued to strengthen and streamline our organizational structure and right-size our leadership team and cost structure for the size of our business, to address the continuing challenging macroeconomic environment, and best position us to achieve our long-term strategic plans.

 

 

We also continued to make investments in customer data science, business analytics, and pricing optimization, allowing us to collect and analyze data and make fact-based decisions to more efficiently run our business.

At the Vera Bradley brand:

 

 

We expanded our robust product innovation pipeline, including launching our Leather Collection, which was highly successful and will expand in fiscal 2025.

 

 

We launched our NFL collection, with plans to add additional teams in fiscal 2025.

 

We continued another year of product collaborations with iconic brands such as Disney, Harry Potter, Star Wars, Hello Kitty, and Peanuts, which align with our target customers and expand our customer reach.

 

 

We made strides in sustainability by committing that the majority of our cotton products will be Better CottonTM by fiscal 2025. By joining Better Cotton, Vera Bradley is helping to scale towards net positive social and environmental cotton farming. Better Cotton is sourced via a chain-of-custody model called mass balance. This means that Better Cotton is not physically traceable to end products; however, Better Cotton Farmers benefit from the demand for Better Cotton in equivalent volumes to those we source. Vera Bradley is committed to sourcing 75% of our cotton as Better Cotton in calendar 2024.

 

 

In the fourth quarter, we transformed our online outlet from a flash-sale model to an everyday extension of our outlet stores – outlet.verabradley.com. This brought new customers to the brand and helped offset weakness in the outlet store channel.

 

 

We made navigation changes on verabradley.com, which were successful in reducing bounce rate and driving conversion and sales.

 

 

We continued to strengthen and rationalize our store base. We have taken needed steps, via product, marketing, and expense discipline, to improve the profitability of our full-line stores and closed fewer locations than originally expected. In fiscal 2024, we closed eight underperforming full-line stores and one outlet store, and opened three outlet stores, ending the fiscal year with 43 full-line and 81 outlet locations.

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   1

 

 


Table of Contents

 

Proxy Summary

 

 

 

 

At the Pura Vida brand:

 

 

On the marketing front, our comprehensive customer data platform implemented in fiscal 2024 is allowing us to be more analytical and to more strategically target customers and potential customers, with a keen focus on both customer acquisition and retention.

 

 

Our summer and fall “Live Free” and “College Mobile” tours were successes for customer engagement.

 

 

We continued collaborations with Disney, Harry Potter, Hello Kitty, and the World Surf League; partnered with key influencers; and offered

   

themed-collections centered around key events such as Shark Week.

 

 

We continued to innovate and added a new men’s jewelry collection, which still targets our core customer, who purchases these items for the men in her life.

 

Based on the success of our existing Pura Vida stores, we identified two new Pura Vida store locations that will open in fiscal 2025. To gain both operational and strategic efficiency, we moved the Pura Vida store operations under the Vera Bradley team.

 

 

FINANCIAL RESULTS

 

The graphs below provide a ‘‘snapshot’’ of our performance in accordance with accounting principles generally accepted in the United States (“GAAP”) in fiscal 2024 and the previous three fiscal years.

Fiscal 2024 items impacting comparability. During fiscal 2024, Vera Bradley, Inc. net income was impacted by $9.4 million of net after tax charges including $4.2 million of intangible asset impairment charges, $2.3 million for the amortization of definite-lived intangible assets, $2.2 million of severance charges, and $0.7 million of consulting and professional fees primarily associated with strategic initiatives. Collectively, these charges negatively impacted EPS by approximately $0.30 in fiscal 2024. Refer to Notes 15 and 16 of the Notes to the Consolidated Financial Statements set forth in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2024 for additional information.

Fiscal 2023 items impacting comparability. During fiscal 2023, Vera Bradley, Inc. net loss was impacted by $56.5 million of after-tax charges including $40.7 million of goodwill and intangible asset impairment charges; $7.4 million of severance, retention, and former CEO stock-based compensation charges associated with retirement; $3.3 million of consulting and professional fees primarily associated with cost savings initiatives, the CEO search, and strategic initiatives; $1.9 million for the amortization of definite-lived intangible assets; $1.2 of PO cancellation fees; $1.1 million of store and

right-of-use asset impairment charges; $0.8 million related to the new CEO sign-on bonus and relocation expenses; and $0.1 million of goodMRKT brand exit costs. Collectively, these charges negatively impacted EPS by approximately $1.80 in fiscal 2023. Refer to Notes 15 and 16 of the Notes to the Consolidated Financial Statements set forth in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023 for additional information.

Fiscal 2022 items impacting comparability. During fiscal 2022, Vera Bradley, Inc. net income was impacted by $1.8 million of charges primarily related to the amortization of definite-lived intangible assets.

Fiscal 2021 items impacting comparability. During fiscal 2021, Vera Bradley, Inc. net income was impacted by $12.7 million of charges including after-tax charges of $4.8 million for amortization of definite-lived intangible assets; $4.5 million of store impairment charges; $2.1 million of technology-related re-platforming charges (“Project Novus”); $1.1 million of COVID-19-related charges including the cancellation of certain purchase orders and certain department store exit costs; and $0.2 million for an adjustment upon payment of the earn-out liability associated with the Pura Vida transaction. These charges negatively impacted diluted EPS by approximately $0.38 in fiscal 2021. In addition, the COVID-19 pandemic significantly impacted our operating results for the year.

 

 

2  2024 Proxy Statement   VERA BRADLEY, INC.  

 

 


Table of Contents

 

Proxy Summary

 

 

 

 

LOGO

Corporate Responsibility and our Environmental, Social, and Governance Efforts

 

Our Company’s strategic direction is fueled by our core values and guided by our desire to create net-positive social, environmental, community, and shareholder gains, by focusing on our products, our communities, and our planet. In each of these areas, we evaluate the impact related to our practices, considering risks and opportunities, making real and measurable progress, and ensuring transparency with our stakeholders.

Vera Bradley, Inc. is committed to responsible, clear, and open business practices. We believe credibility, integrity, and trustworthiness, along with our core values, are critical components of the current and future success of our business.

Our Corporate Social Responsibility & Sustainability Report, which can be found at https://verabradley.com/pages/corporate-responsibility, provides an update on progress we have made related to our many

environmental, social, and governance (“ESG”) and sustainability initiatives. In Fiscal 2024, among other things, we further enhanced the quality of our products, broadened our commitment to reducing our impact on climate change, further elevated our responsible sourcing efforts, and made a meaningful impact in the markets we serve through our charitable initiatives.

We are excited about the future and returning our Company to sustainable, profitable growth and strong cash flow, which we believe will deliver long-term value to our shareholders. Our strategic plan, Project Restoration, is designed to drive this long-term, profitable growth. As we improve the health of our brands and our Company, we remain committed to the ESG facets of our business and devoting appropriate resources to the areas that are most impactful to our stakeholders — our customers, our Associates, our shareholders, and our communities.

 

 

EXECUTIVE COMPENSATION

 

Sound program design. We have designed our executive officer compensation programs to attract, motivate, and retain the key executives who drive our success. Pay that reflects performance and alignment with the interests of long-term shareholders are key principles. We achieve our objectives through compensation that:

 

 

Provides a competitive total pay opportunity;

 

 

Links a significant portion of total compensation to performance that we believe will create long-term shareholder value;

 

 

Enhances retention by subjecting a meaningful portion of total compensation to multi-year vesting; and

 

Does not encourage unnecessary and excessive risk taking.

Pay practices. We believe that appropriate corporate governance of our executive compensation program is enhanced by a number of practices, including use by the Talent and Compensation Committee of its own independent consultant and compensation tools, the absence of tax gross-ups in any of our compensation programs (including no excise tax gross-ups), and stock ownership guidelines applicable to directors and officers that align shareholder interests by requiring executives to own stock in the Company.

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   3

 

 


Table of Contents

 

Proxy Summary

 

 

 

 

Pay for performance. Our compensation program allows our Talent and Compensation Committee to determine pay based on a comprehensive view of quantitative and qualitative factors designed to produce long-term business success. The correlation between our financial results and executive officer compensation awarded, as described in the “Executive Compensation Discussion and Analysis” or “CD&A” which follows in this proxy statement, aligns the interests of our executive officers with those of the Company. Specifically in fiscal 2024:

 

 

The Company’s earnings per share and operating income increased compared to the prior year, resulting in increased payouts under the Company’s long-term and short-term incentive plans.

 

 

The Company achieved above-threshold levels for Vera Bradley Brand and Enterprise net revenue metrics. The Company achieved below-threshold levels for Pura Vida net revenue metrics.

Vera Bradley Brand and Enterprise net operating income threshold levels were achieved, while Pura

Vida Brand net operating income threshold level was not achieved. Therefore, there were payouts for these elements of the Company’s short-term incentive plans as they related to Vera Bradley and Enterprise, but not for the Pura Vida Brand.

 

 

The Company achieved threshold levels of its adjusted EPS metric for the fiscal 2024 performance year and of the prior-year performance-based restricted stock unit grants. Long-term incentive was earned for these performance grants.

 

 

In addition to financial goals, the annual incentive opportunity included key strategic objectives tied to our Vera Bradley, Inc. long-term strategic plan and intended to focus the team on making progress towards the Company’s strategic objectives. These strategic objectives paid out at 130% for the Vera Bradley Brand program, 60% for the Pura Vida Brand program and 140% for the Enterprise program, as described herein.

 

 

Grants under the Company’s fiscal 2024 Plans vest over a three-year period to promote retention and long-term thinking.

 

 

CORPORATE GOVERNANCE HIGHLIGHTS

 

Our governance principles and practices include a number of policies and structures that we believe are “best practices” in corporate governance, including:

 

 

Election of Directors for one-year terms;

 

 

Appointment of a Lead Independent Director who participates in the process of preparing meeting agendas and schedules and presides over executive sessions of each Board meeting;

 

 

Separation of Chair of the Board and Chief Executive Officer (“CEO”) roles;

 

 

Holding executive sessions with only independent directors present at each meeting of the Board;

 

 

Minimum stock ownership guidelines applicable to directors and executive officers;

 

Holding requirements for equity grants made to directors and executive officers until minimum stock ownership guidelines are met;

 

 

Policies prohibiting hedging, pledging, and other problematic transactions involving Company securities by executive officers, directors, and key employees;

 

 

Practice of no excise tax gross-ups for directors and executive officers;

 

 

Allowing shareholders to unilaterally amend our bylaws; and

 

 

Inclusion of double triggers for Severance Plan benefits upon a change in control.

 

 

4  2024 Proxy Statement   VERA BRADLEY, INC.  

 

 


Table of Contents

 

Proxy Summary

 

 

 

 

SHAREHOLDER ENGAGEMENT

 

The Board maintains a process for shareholders and interested parties to communicate with the Board. Shareholders and interested parties may write or email our Board as provided below:

 

LOGO

 

Write:

Corporate Secretary

Vera Bradley, Inc.

12420 Stonebridge Road

Roanoke, Indiana 46783

LOGO

 

Internet:

http://investors.verabradley.com/corporate-governance/contact-the-board or

http://investors.verabradley.com/contact-us

 

Email:

investorrelations@verabradley.com

We understand the importance of a robust shareholder engagement program. To that end, our Chief Executive Officer and appropriate members of management routinely participate in meetings and conference calls with institutional and individual shareholders. Our meetings and interactions with shareholders are designed to help us better understand how our shareholders perceive the Company and to provide our shareholders an opportunity to discuss matters that they believe deserve attention. We believe our engagement has been productive and provides an open exchange of ideas and perspectives for both our shareholders and us.

 

 

QUESTIONS AND ANSWERS

 

See “Questions and Answers” on page 42 for additional information.

Please see the Questions and Answers section beginning on page 42 for important information

about the proxy materials, voting, the Annual Meeting, Vera Bradley documents, communications, and the deadlines to submit shareholder proposals for the 2025 Annual Meeting of Shareholders.

 

 

Note about forward-looking statements

 

 

Certain statements in this proxy statement, other than purely historical information, which may include estimates, projections, statements relating to our business plans, objectives, and expected operating results and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this Proxy Statement, including without limitation, this Proxy Summary and “Executive Compensation Discussion and Analysis.” These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors” of our Forms 10-K and 10-Q. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may materially impact such forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   5

 

 


Table of Contents

LOGO

 

PROPOSAL NO. 1

ELECTION OF DIRECTORS

VOTE REQUIRED AND BOARD RECOMMENDATION

The Company’s directors are elected for one-year terms, and below are the Directors nominated for election by shareholders at this year’s annual shareholders’ meeting. The Board recommends a vote “FOR” each of the Directors. Each Director nominee will be elected by a plurality of votes cast, which means that the nominees receiving the highest number of votes will be elected as directors. Abstentions and broker non-votes will have no effect on the vote.

 

           

NAME AND OCCUPATION

    AGE     DIRECTOR
SINCE
  

INDEPENDENT

(Y/N)

   OTHER
PUBLIC
BOARDS

Jacqueline Ardrey

President and Chief Executive Officer, Vera Bradley, Inc.

   55    2022    N    — 

Barbara Bradley Baekgaard

Co-Founder, Vera Bradley, Inc.

   85    1982    N    — 

Kristina Cashman

Restaurant Consultant, former Chief Financial Officer, several restaurant companies

   57    2020    Y    1

Robert J. Hall

President, Green Gable Partners

   65    2007    N    — 

Mary Lou Kelley

Retired President, E-Commerce for Best Buy

   63    2015    Y    2

Frances P. Philip

Retired Chief Merchandising Officer, L.L. Bean, Inc.

   66    2011    Y    1

Jessica Rodriguez

Former President of Entertainment and Chief Brand Officer, Univision Communications, Inc.

   51    2024    Y    1

Carrie M. Tharp

VP, Global Strategic Industries, Google Cloud

   43    2020    Y    1

Bradley Weston

Former Chief Executive Officer, Party City Holdings, Inc.

   59    2024    Y    1

Additional information regarding each director nominee follows below.

The Board of Directors has no reason to believe that any of the nominees will be unable to serve as a director. If, however, any nominee becomes unable to serve as a director prior to the Annual Meeting, the proxies will have discretionary authority to vote for a substitute nominee. Unless authority to do so is withheld, the persons named as proxies will vote “FOR” the election of the nominees.

 

 
VERA BRADLEY’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF THE ABOVE-LISTED NOMINEES TO THE BOARD OF DIRECTORS.

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   1


Table of Contents

PROPOSAL NO. 1 Election of Directors

 

 

 

THE BOARD OF DIRECTORS

DIRECTOR QUALIFICATIONS AND SELECTION PROCESS

Each year at the Company’s annual meeting of shareholders, the Board recommends a slate of director nominees for election by shareholders. In addition, the Board fills vacancies on the Board when necessary or appropriate. The Board’s recommendations or determinations are based on the recommendations of, and information supplied by, the Nominating, Governance and Sustainability Committee as to the suitability of each individual and, where applicable, the slate as a whole to serve as directors, taking into account the criteria described below and other factors, including the requirements for Board committee membership.

The Nominating, Governance and Sustainability Committee is responsible for, among other things, reviewing on an annual basis the appropriate skills and characteristics required of directors in the context of prevailing business conditions and for making recommendations regarding the size and composition of the Board. The objective is a Board that brings to the Company a variety of perspectives and skills that are derived from high-quality business and professional experience and that are aligned with the Company’s strategic objectives. The Board has determined the most effective size of the Board currently to be nine members and, effective at the Annual Meeting, has set the number of directors at nine.

Nominees for the Board must be committed to enhancing long-term shareholder value and possess a high level of personal and professional ethics, sound business judgment, appropriate experience and achievements, personal character, and integrity. Board members are expected to understand our business and the industry in which we operate, regularly attend Board and relevant committee meetings, participate in meetings and decision-making processes in an objective and constructive manner, and be available to advise our officers and management. Evaluations of candidates generally involve a review of background materials, internal discussions, and interviews with selected candidates, as appropriate. Upon selection of a qualified candidate, the Nominating, Governance and Sustainability Committee recommends the candidate to the Board.

The Board also seeks members from diverse backgrounds so that the Board consists of members with a broad spectrum of experience and expertise and with a reputation for integrity. As a company founded by women, for women, the Company is thrilled to have seven strong, accomplished women serve on our Board of Directors. With 78% current female board membership, Vera Bradley is one of only a few public companies with such high female representation. Below is a chart depicting the Board’s diversity statistics as of April 26, 2024:

BOARD DIVERSITY MATRIX

TOTAL NUMBER OF DIRECTORS: 9

 

       
    FEMALE   MALE  

NON-

BINARY

 

DID NOT  

DISCLOSE  

GENDER  

Part I: Gender Identity

Directors

  7   2        

Part II: Demographic Background

African American or Black

               

Alaskan Native or Native American

               

Asian

               

Hispanic or Latinx

  1            

Native Hawaiian or Pacific Islander

               

White

  6   2        

Two or More Races or Ethnicities

               

LGBTQ+

               

Did Not Disclose Demographic Background

               

The Nominating, Governance and Sustainability Committee may engage consultants or third-party search firms to assist in identifying and evaluating potential nominees. In recommending nominees, the Nominating, Governance and Sustainability Committee considers nominees recommended by the Company’s shareholders in the same manner as described above provided any such shareholder follows the procedures set forth in the Company’s bylaws.

 

 

2  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

PROPOSAL NO. 1 Election of Directors

 

 

 

DIRECTOR NOMINEES FOR ELECTION AT THE 2024 ANNUAL MEETING

 

Jacqueline Ardrey

  Age(1) 55 

President and CEO

  Director Since 2022 

Ms. Ardrey joined Vera Bradley as its President and Chief Executive Officer in November 2022. At that same time, she also joined the Company’s Board of Directors. Between November 2018 and October 2022, she held the post of President at home furnishings and seasonal décor catalog retailer Grandin Road, part of the Qurate Retail Group. In 2017 and 2018, Ms. Ardrey was CEO of home furnishings and seasonal décor retailer, Trading Company Holdings. Prior to that, she was Founder and CEO of Oregon Home Gourmet and Senior Vice President of Merchandising and Supply Chain for iconic omnichannel gourmet food and gifting brand Harry and David. Previously, she spent 14 years at multi-channel high-end children’s retailer Hanna Andersson in various roles of increasing responsibility, including Senior Vice President of Merchandising, Design, and Wholesale. Ms. Ardrey began her retail career with the May Company.

 

Qualifications: Ms. Ardrey is an accomplished, results-oriented leader with over 30 years of experience in multi-channel retail enterprises. She has demonstrated success in motivating and coaching teams through strategic change while consistently delivering results. She has a deep background in strategic planning and execution, brand positioning, product development, buying and merchandising, inventory management, planning and allocation, and financial planning and analysis.

Barbara Bradley Baekgaard

  Age(1) 85 

Co-Founder

  Director Since 1982 

Ms. Baekgaard co-founded Vera Bradley in 1982. From 1982 through June 2010, she served as Co-President, and in May 2010, she was appointed Chief Creative Officer. In 2017, Ms. Baekgaard became emeritus from the Chief Creative Officer role but still serves as an active brand ambassador for the Vera Bradley brand. She currently serves as a board member of the Indiana University Melvin and Bren Simon Cancer Center Development Board and the Vera Bradley Foundation for Breast Cancer.

 

Qualifications: As Co-Founder of Vera Bradley, Ms. Baekgaard serves a key leadership role on our Board of Directors and provides the Board with a broad array of institutional knowledge and historical perspective. Since our founding, Ms. Baekgaard has provided leadership and strategic direction in Vera Bradley brand’s development by providing creative vision to areas such as marketing, product design, assortment planning, and the design and visual merchandising of our stores.

 

Kristina Cashman

  Age(1) 57 
  Director Since 2020 

Since April 2019, Ms. Cashman has served as President and Chief Executive Officer of Cashman Restaurant & Retail Consulting. Ms. Cashman’s prior experience includes serving as Chief Financial Officer of several restaurant companies including Hopdoddy Burger Bar, Inc., Eddie V’s Restaurants, Inc., and P.F. Chang’s China Bistro, as well as serving as President of Guy and Larry Restaurants, Inc.

 

Ms. Cashman serves as a director and Chair of the Audit Committee for publicly-held Basset Furniture Industries, Inc. and as a director and chair of the audit committee for privately-held Munchkin, Inc., an infant and toddler lifestyle brand.

 

Qualifications: Ms. Cashman brings to the Board of Directors particular knowledge and experience in finance, accounting, tax, and capital structure, as well as strategic planning, real estate strategy and selection, operations, and incentive compensation plan development.

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   3


Table of Contents

PROPOSAL NO. 1 Election of Directors

 

 

 

Robert J. Hall

  Age(1) 65 

Chair

  Director Since 2007 

Mr. Hall has served as Chair of the Board since September 2010. Mr. Hall is the President of Green Gables Partners, a private investment firm that he founded in 2010. Prior to founding Green Gables, Mr. Hall started Andesite Holdings, a private equity firm, where he served as principal from 2007 to 2014. Mr. Hall served as an Executive Director for UBS Financial Services from 2000 to 2007.

 

Mr. Hall serves as a director of FlyLow Gear Co., a privately-held manufacturer of outerwear; a director of Glade Optics, a privately-held retailer of ski goggles and casual apparel and accessories; and Chairman of the U.S. Biathlon Association.

 

Qualifications: Mr. Hall provides our Board of Directors with insight and perspective on general strategic and financial matters stemming from his extensive experience in investment banking, investment management, financial planning, and private placements.

 

Mary Lou Kelley

  Age(1) 63 
  Director Since 2015 

Ms. Kelley served as President, E-Commerce for electronics retailer Best Buy from April 2014 through March 2017. Prior to joining Best Buy, Ms. Kelley served as Senior Vice President, E-Commerce for Chico’s FAS Inc. from June 2010 to March 2014. Ms. Kelley formerly held the posts of Vice President of Retail Real Estate and Marketing and Vice President of E-Commerce for L.L. Bean.

 

Ms. Kelley serves on the public company boards of YETI Holdings, Inc. a premium cooler and drinkware company, and Finning International, the world’s largest Caterpillar equipment dealer with operations in Canada, South America, the United Kingdom, and Ireland. She previously served as an advisor to the board of directors and senior leadership of Falabella Retail, the largest department store retailer in South America.

 

Qualifications: Ms. Kelley has deep capabilities in developing retail omni-channel experience, as well as e-commerce, marketing, and strategic planning. She provides insight and counsel on a variety of issues as the Company continues to pursue our long-term strategic plan, which includes elevating our digital-first strategy and our marketing efforts.

Frances P. Philip

  Age(1) 66 
  Director Since 2011 

Ms. Philip assumed the role of Lead Independent Director in May 2022.

 

Since 2015, Ms. Philip has served as Chief Creative Officer of Sea Bags, a privately-held manufacturer and retailer of handcrafted tote bags and accessories made from recycled sails. From 1994 to 2011, Ms. Philip held positions of increasing responsibility at L.L. Bean, Inc., a privately-held outdoor apparel and equipment retailer based in Freeport, Maine, including Chief Merchandising Officer from 2002 to 2011. Prior to working at L.L. Bean, Ms. Philip was one of three principals who launched the innovative fresh flower catalog, Calyx & Corolla, and she served in a variety of roles with other specialty retailers, including The Nature Company, Williams-Sonoma, and The Gap.

 

Ms. Philip also serves on the board of Coats Group plc., a UK-based company that is the world’s leading industrial thread company and traded on the London Stock Exchange, and Totes-Isotoner Corporation, a privately-held international umbrella, footwear, and cold-weather accessory supplier.

 

Qualifications: Ms. Philip brings to our Board of Directors extensive experience in product design and development, multi-channel merchandising, branding, marketing, creative, and the retail and consumer products industry.

 

 

4  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

PROPOSAL NO. 1 Election of Directors

 

 

 

Jessica Rodriguez

  Age(1) 51 
  Director Since 2024 

From October 2018 until March 2022, Ms. Rodriguez served as President of Entertainment for Univision Communications, Inc., an American Spanish-language television network, and assumed the additional role of Chief Brand Officer from July 2021 through March 2022. Ms. Rodriguez began her 20-plus year career in media as Vice President and Station Manager for Univision Puerto Rico. From there, she successfully progressed through the organization in roles of increasing responsibility, including Vice President and Special Assistant to the President for Univision Networks, Inc.; Senior Vice President, Univision Cable Networks; Executive Vice President and Chief Marketing Officer, Univision; and Chief Operating Officer, Univision Networks, a post she held from January 2018 through December 2020.

 

Ms. Rodriguez currently serves as a member of the board for public company off-price retailer Burlington Stores, Inc.

 

Qualifications: Ms. Rodriguez brings particular knowledge and experience in business strategy; operations; media and brand marketing; consumer insights; and creating, transforming, leading, and motivating high-performing, diverse, purpose-driven organizations. She provides insight and counsel on a variety of issues as the Company continues to execute our long-term strategic plan, which includes elevating our digital-first strategy and our marketing efforts.

 

Bradley Weston

  Age(1) 59 
  Director Since 2024 

From April 2020 to November 2023, Mr. Weston served as the Chief Executive Officer of Party City Holdco, Inc., a manufacturer, wholesaler, and retailer of party supplies. From July 2019 to April 2020, he held the post of President of Party City Holdings, Inc. and Chief Executive Officer of Party City Retail. Party City Holdco, Inc. filed for Chapter 11 bankruptcy in January 2023. Previously, he spent seven years with Petco Animal Supplies, Inc. in roles of increasing responsibility from Chief Merchandising Officer to President and Chief Executive Officer. He also led the merchant organization at Dick’s Sporting Goods from 2008 to 2011 as Chief Merchandising Officer. Prior to that, he successfully rose through the ranks at May Department Stores from Executive Trainee to Senior Vice President, General Merchandising Manager, Ready-to-Wear.

 

Mr. Weston is currently a member of the board of public company Boot Barn, Inc., the largest western and workwear retailer in the U.S.

 

Qualifications: Mr. Weston is a battle-tested executive with a diverse background, having successfully operated in mature, start-up, turnaround/transformation, and high-growth situations over his 35-year retail career. He has deep knowledge and experience in business strategy, operations, omnichannel retail, and merchandising. He provides meaningful insight as the Company continues to execute our long-term strategic plan.

Carrie M. Tharp

  Age(1) 43 
  Director Since 2020 

Ms. Tharp served as Vice President, Retail and Consumer, for Google Cloud, a global cloud provider, from August 2019 to March 2023, when she was named to her current post at Google Cloud of Vice President, Global Strategic Industries. In her current role she is responsible for all industries including retail, consumer goods, media and entertainment, financial services, healthcare, and telecommunications. Between October 2016 and July 2019, she was Executive Vice President, Chief Digital Officer of luxury retailer Neiman Marcus Group and served as Interim Neiman Marcus Brand President from January 2019 until July 2019. Neiman Marcus filed for Chapter 11 bankruptcy in May 2020. From June 2013 until September 2016, Ms. Tharp served as Senior Vice President, Chief Marketing Officer and Head of eCommerce for Fossil Group, a multi-brand watch and accessories business. Prior to that, she held various management positions with Travelocity and Dean Foods.

 

Ms. Tharp is a member of the board of privately-held premier off-price ecommerce company, Rue Gilt Groupe, Inc., and serves on the board of privately-held, digitally-native luxury company Moda Operandi. She has also served on the board of The National Retail Federation (NRF) since 2023.

 

Qualifications: Ms. Tharp has extensive omni-channel retail experience, including in the handbag and accessories categories; a track record of growth and profit performance improvement; and expertise in e-commerce, marketing with vertically integrated consumer brands, brand management, digital fluency, social media, customer insights, analytics, customer strategy, and machine learning/Artificial Intelligence (AI), and generative AI.

 

(1)

Represents age as of the Annual Meeting date.

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   5


Table of Contents

Corporate Governance

 

 

 

CORPORATE GOVERNANCE

We believe corporate governance should promote the long-term interests of our shareholders, as well as maintain internal checks and balances, strengthen management accountability, engender public trust, and foster responsible decision making and accountability. We continue to evaluate and strengthen existing governance practices and, as appropriate, develop new policies that make us a better company. To that end, the following policies and practices are used to guide and regulate various actions, in addition to the Company’s Articles of Incorporation and Bylaws.

 

CORPORATE GOVERNANCE GUIDELINES

Our Corporate Governance Guidelines set out various rules and principles for self-governance and address such matters as Board composition and structure, duties and responsibilities of directors and the Board and the duties of the Lead Independent Director, among other matters.

CONFLICT OF INTEREST AND BUSINESS ETHICS POLICY

We believe that credibility, integrity, trustworthiness, and our core values are critical components of the current and future success of our business. Our Conflict of Interest and Business Ethics Policy is intended to help uphold high ethical standards in all of our operations by promoting ethical conduct and compliance with applicable laws, rules, regulations, and standards. Our Board recognizes that no code of ethics can replace the thoughtful behavior of an ethical director or employee, but such a Code can provide guidance to help recognize and deal with ethical issues and to foster a culture of accountability.

CODE OF ETHICS FOR SENIOR FINANCIAL OFFICERS

In addition to being subject to the Conflict of Interest and Business Ethics Policy, our CEO, Chief Financial Officer (“CFO”), and Corporate Controller and Treasurer are also subject to our Code of Ethics for Senior Financial Officers. We will disclose on our website (www.verbradley.com) any amendment to, or waiver from, a provision of the Conflict of Interest and Business Ethics Policy or the Code of Ethics for Senior Financial Officers that applies to our CEO, CFO, or Corporate Controller and Treasurer, or persons performing similar functions and that relates to:

 

 

Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.

 

 

Full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with the SEC and in other public communications we make.

 

Compliance with applicable governmental laws, rules, and regulations.

 

 

The prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code.

 

 

Accountability for adherence to the Code.

RISK OVERSIGHT

Our Board has and exercises ultimate oversight responsibility with respect to enterprise risk assessment and to the management of the strategic, operational, financial, cybersecurity, and legal risks facing our Company and its operations and financial condition. The Board is involved in setting our business and financial strategies and establishing what constitutes the appropriate level of risk for us and our business segments. Various committees of the Board provide assistance to the Board in its oversight of, among other things, risk assessment and risk management. The Board also monitors the process by which risk assessment and management is developed and implemented by management and reported to the full Board.

Our Audit Committee assists the Board in its oversight of our policies relating to risk assessment and risk management generally, with particular focus on our management of major financial and cybersecurity risk exposures.

Our Talent and Compensation Committee assists the Board in assessing the nature and degree of risk that may be created by our compensation policies and practices to ensure their appropriateness in terms of both the level of risk-taking and consistency with our business strategies. In conjunction with its assessment, the Committee, with the assistance of independent consultants and independent compensation resources, reviews our compensation policies and practices. That review encompasses each of our incentive plans, eligible participants, performance measurements, parties responsible for certifying performance achievement and sums that could be earned, including caps on the amount of bonus and performance share units that can be earned.

 

 

6  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Corporate Governance

 

 

 

STOCK OWNERSHIP GUIDELINES

Our Board of Directors has adopted stock ownership guidelines for directors, executive officers, and other senior executives. These guidelines are a means to motivate directors and executives to perpetuate enduring shareholder value and to ensure that the interests of directors and executives are aligned with those of shareholders.

The stock ownership guidelines require that all non-employee directors own share units (as defined below) of the Company’s common stock with a value equal to four times the annual cash retainer, or $198,000 in fiscal 2024. Until such time as a director has attained the applicable share ownership guideline, he or she is expected to retain share units awarded to him or her by the Company, with certain allowances to sell in order to meet tax obligations. The guideline is automatically revised in the event that the annual retainer is changed.

The CEO is required to hold share units with a value equal to four times her annual base salary rate, or $3,400,000 in fiscal 2024. The guideline is automatically revised in the event the CEO’s annual base salary rate changes. Certain executive officers, as determined by the Talent and Compensation Committee, are required to hold share units with a value equal to two times their annual base salary rate. Until such time as the CEO or another officer covered by the guidelines has attained the applicable share ownership guideline, they are expected to retain the share units awarded to him or her by the Company, with certain allowances to sell in order to meet tax obligations.

The guidelines define a “share unit” as each share of Vera Bradley common stock beneficially owned, including shares of restricted stock and restricted stock units (but excluding any stock options). Both vested and unvested shares of restricted stock and restricted stock units are included in calculating share units. Unvested equity awards subject to performance criteria are included at achieved performance levels for completed performance years and at estimated performance levels for incomplete performance years. All directors and officers subject to the stock ownership guidelines were in compliance with the guidelines as of April 3, 2024.

HEDGING, DERIVATIVES AND PLEDGING

The Company has adopted an Insider Trading Policy, which, among other things, prohibits directors and employees from:

 

 

Entering into hedging (making an investment to reduce the risk of adverse price movements or to offset potential losses/gains in a Company security) or other monetization transactions or similar arrangements with respect to the Company’s securities.

 

 

Engaging in transactions in publicly-traded options on Company securities (such as puts, calls, and other derivative securities).

 

 

Entering into pledging arrangements with respect to Company securities.

TALENT AND COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Talent and Compensation Committee as of February 3, 2024 were Frances P. Philip, Kristina Cashman, and Carrie M. Tharp. None of the members of the Talent and Compensation Committee are now serving or previously have served as employees or officers of the Company or any subsidiary, nor has any member of the Talent and Compensation Committee engaged in any related party transaction with the Company. None of the Company’s executive officers serve as directors of, or in any compensation-related capacity for, companies with which members of the Talent and Compensation Committee are affiliated.

POLICY ON RELATED PARTY TRANSACTIONS

In accordance with the rules of The NASDAQ Stock Market and our Audit Committee Charter, our Audit Committee reviews and, prior to consummation, approves any transaction, arrangement, or relationship in which the Company is a participant; the amount involved exceeds $120,000; and one of our executive officers, directors, director nominees, or 5% or greater shareholders (or their immediate family members) (each, a “related party”) has a direct or indirect material interest. Based on its consideration of all relevant facts and circumstances, the Audit Committee decides whether or not to approve the particular transaction and will generally approve only those transactions that are on terms no less favorable to us than those that we could obtain from unaffiliated third parties and have terms and conditions that are reasonable and customary.

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   7


Table of Contents

Corporate Governance

 

 

 

RELATED PARTY TRANSACTIONS FOR FISCAL 2024

Vera Bradley Foundation for Breast Cancer. The Company routinely makes charitable contributions to the Vera Bradley Foundation for Breast Cancer (the “Foundation”) and also provides employees and office space to the Foundation. The Foundation was founded by co-founder of the Company, Barbara Bradley Baekgaard. Ms. Baekgaard is an employee and director of the Company and serves on the board of directors of the Foundation. There were approximately $139,000 of Company contributions made to the Foundation in fiscal 2024.

FAMILY RELATIONSHIPS

Barbara Bradley Baekgaard and Patricia Miller founded the Company in 1982 in Fort Wayne, Indiana. Ms. Baekgaard is an employee and director of the Company. Robert J. Hall, our Board Chair, is the son-in-law of Ms. Baekgaard.

COPIES OF GOVERNANCE DOCUMENTS

You may view the following documents at http://investors.verabradley.com/corporate-governance (please note that our website is not a part of this proxy statement):

 

 

Corporate Governance Guidelines

 

 

Conflict of Interest and Business Ethics Policy

 

 

Code of Ethics for Senior Financial Officers

 

 

Insider Trading Policy

 

 

Stock Ownership Guidelines

 

 

Disclosure Policy

 

 

8  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

The Board and its Committees

 

 

 

THE BOARD AND ITS COMMITTEES

 

BOARD RESPONSIBILITIES

Being elected to serve on the Board of Directors is a high honor and privilege, and one that carries with it a serious responsibility to serve the interests of the Company and its shareholders. It is our desire that all Board members conduct themselves and perform their duties in an exemplary fashion, commensurate with the position of leadership that has been bestowed upon them by the shareholders.

Each Board member has the following basic responsibilities:

 

 

To support the mission and purpose of the Company, and to abide by its Articles of Incorporation, Bylaws, and policies.

 

 

To be diligent in preparation for, attendance at, and participation in Board meetings and related activities on behalf of the Company.

 

 

To ensure that the financial and business affairs of the Company are, to the best of the Board member’s awareness, managed in a responsible manner.

 

 

To act always in good faith and in the best interest of the Company, above any personal interest.

 

 

To maintain the confidentiality of sensitive or proprietary information obtained as a result of Board service.

The primary duties of the Board include maximizing long-term shareholder value, by:

 

 

Ensuring that the Company operates in a legal, ethical, and socially responsible manner.

 

 

Selecting, evaluating, and offering substantive advice and counsel to the CEO and working with the CEO to develop effective measurement systems that will evaluate and determine the Company’s degree of success in creating long-term economic value for its shareholders.

 

 

Reviewing, approving, and monitoring fundamental financial and business strategies and major corporate actions.

 

 

Overseeing the Company’s capital structure and financial policies and practices.

 

Assessing major risks facing the Company and reviewing options for their mitigation.

 

 

Providing counsel and oversight on the selection, evaluation, development, and compensation of executive officers and providing critical and candid feedback on their performance.

BOARD INDEPENDENCE

A majority of our directors are independent of the Company and management. The Board (with the input of the Nominating, Governance and Sustainability Committee) has evaluated all business and charitable relationships between the Company and the Company’s current non-employee directors and nominees for election at the May 30, 2024 Annual Meeting and all other relevant facts and circumstances. As a result of the evaluation, the Board determined, as required by the Company’s Corporate Governance Guidelines, that the following non-employee directors or nominees are “independent” as defined by the standards for director independence established and described below: Kristina Cashman, Mary Lou Kelley, Frances P. Philip, Jessica Rodriguez, Carrie M. Tharp, and Bradley Weston. Under these same standards, the Board of Directors has determined that Jacqueline Ardrey, Barbara Bradley Baekgaard, and Robert J. Hall are not independent.

Under the corporate governance requirements of The NASDAQ Stock Market (“NASDAQ”) our Board of Directors has a responsibility to make an affirmative determination that our directors serving as independent directors have no relationships with the Company that would impair their independence. Subject to some exceptions, the standards for independent directors established by NASDAQ and the Securities and Exchange Commission (“SEC”) generally provide that a non-employee director will not be independent if (a) the director is, or in the past three years has been, an employee of the Company; (b) the director or a member of the director’s immediate family is, or in the past three years has been, an executive officer of the Company; (c) the director or a member of the director’s immediate family has, in the past three years, received more than $120,000 per year in direct compensation from the Company (other than for service as a director or, for the immediate family member, as a non-executive employee); (d) the director is an employee, or the director or a member of the director’s immediate family is

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   9


Table of Contents

The Board and its Committees

 

 

 

employed as a partner, of Deloitte & Touche LLP, the Company’s independent registered public accountants, or the director has an immediate family member who is a current employee of such firm and works in any capacity on the Company’s audit, or the director or an immediate family member was within the last three years a partner or employee of such firm and personally worked on the Company’s audit within that time; (e) the director or a member of the director’s immediate family is, or in the past three years has been, employed as an executive officer of a company where a Vera Bradley executive officer at the same time serves or served on the Talent and Compensation committee; or (f) the director is an employee, or a member of the director’s immediate family is an executive officer, of a company that makes payments to, or receives payments from, Vera Bradley in an amount which, in any twelve-month period during the past three years, exceeds the greater of $200,000 or five percent of the consolidated gross revenues of the company receiving the payment.

The Company’s Corporate Governance Guidelines require that the independent directors meet in executive session at each regular meeting of the Board and, in fiscal 2024, they met in executive session during each regular meeting for a total of five times. These executive sessions are chaired by the Lead Independent Director, Ms. Philip.

BOARD LEADERSHIP STRUCTURE AND LEAD INDEPENDENT DIRECTOR

Our Board of Directors believes that one of its most important functions is to protect shareholders’ interests through independent oversight of management, including the CEO; however, the Board of Directors does not believe that effective management oversight necessarily mandates a particular management structure, such as a separation of the role and identities of the Chair of the Board of Directors and CEO. The Board considers it important to retain flexibility to exercise its judgment as to the most appropriate management structure for us, based on the particular circumstances facing us from time to time. Currently, the positions of Chair of the Board of Directors and CEO are held by separate persons.

Frances P. Philip serves as the Lead Independent Director. Pursuant to the Company’s Corporate Governance Guidelines, the lead director is an independent director who is elected from time to time, but not less frequently than annually, by the affirmative vote of a majority of the independent directors. The Lead Independent Director, among other things, chairs executive sessions of the independent directors, reviews the meeting agenda with our CEO, leads the discussion with our CEO following the independent directors’ executive sessions, ensures that the Board’s individual group and committee self-assessments are done annually and leads periodic discussions with other Board members and management concerning the Board’s information needs. The Board believes this structure allows all of the independent directors to participate in the full range of the Board’s responsibilities with respect to its oversight of the Company’s management. The Board of Directors has determined that this leadership structure is appropriate given the size and complexity of the Company, the number of directors overseeing the Company, and the Board of Directors’ oversight responsibilities. Further, the Board of Directors believes that these responsibilities appropriately and effectively complement the roles of our Chair of the Board and CEO.

STANDING COMMITTEES AND MEETINGS OF THE BOARD

Our Board of Directors has established Audit; Talent and Compensation; and Nominating, Governance and Sustainability Committees. Only independent directors are members of these three committees.

Our Board of Directors held five meetings during fiscal 2024, and each of our directors attended at least 75% of the total number of meetings of the Board and at least 75% of the committees of the Board of which such director was a member held during the period in which such director served. Directors are encouraged to attend our annual meetings of shareholders, and all directors serving at that time attended the annual shareholders meeting held on May 25, 2023.

 

 

10  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

The Board and its Committees

 

 

 

CURRENT COMMITTEE MEMBERSHIP

 

COMMITTEE

   INDEPENDENT
MEMBERS
   CHAIR

Audit

   Kristina Cashman   
   Mary Lou Kelley   
   Jessica Rodriguez   
   Carrie M Tharp     

Talent and Compensation

   Carrie M. Tharp   
   Kristina Cashman   
   Frances P. Philip   
   Bradley Weston     

Nominating, Governance

and

Sustainability

   Frances P. Philip   
   Mary Lou Kelley   
   Jessica Rodriguez   
   Bradley Weston     

Audit Committee. Our Audit Committee reviews and recommends to the Board of Directors internal accounting and financial controls, accounting principles, and auditing practices to be employed in the preparation and review of our financial statements. In addition, our Audit Committee has the authority to engage, oversee, and dismiss public accountants to audit our annual financial statements and determine the scope of the audit to be undertaken by such accountants. Our Audit Committee also reviews the fairness of related party transactions and assists the Board in managing enterprise risk, cybersecurity, and capital spending. The Board of Directors has determined that Kristina Cashman, the Chair of the Audit Committee is an “audit committee financial expert” (as defined by Item 407(d)(5)(ii) of Regulation S-K) and is “independent” (under the definitions and interpretations of NASDAQ Stock Market), in accordance with the rules of The NASDAQ Stock Market. The Audit Committee met eight times in fiscal 2024.

Talent and Compensation Committee. Our Talent and Compensation Committee reviews and determines policies, practices and procedures relating to the compensation of executive officers, including the CEO, and the establishment and administration of certain employee benefit plans for executive officers. The Talent and Compensation Committee has the authority to administer our 2020 Equity and Incentive Plan, as amended (“2020 Plan”) and to advise and consult with our officers regarding managerial personnel policies. The Talent and Compensation Committee met four times in fiscal 2024.

Nominating, Governance and Sustainability Committee. Our Nominating, Governance and Sustainability Committee assists the Board of Directors with its responsibilities regarding the identification of individuals qualified to become directors, the selection of the director nominees for the next annual meeting of shareholders, and the selection of director candidates to fill any vacancies on the Board of Directors. It also has responsibility for the company’s ESG (Environmental, Social, and Governance) efforts, including reviewing and making recommendations to the Board regarding the Company’s ESG strategy and compliance with corporate governance, environmental sustainability, and social responsibility. The Nominating, Governance and Sustainability Committee also reviews our efforts to audit our suppliers to ensure compliance with our vendor code of conduct. It reviews and makes recommendations to the Board regarding the preparation, review of, and compliance with corporate governance policies, succession planning for the CEO, and tenure and retirement policies for directors. The Nominating, Governance and Sustainability Committee and management are responsible for director continuing education programs to assist directors in maintaining the skills and knowledge necessary or appropriate for the performance of their responsibilities. Continuing education programs for directors may include a combination of internally developed materials and presentations, programs presented by third parties, and financial and administrative support for attendance at qualifying academic or other independent programs. The Nominating, Governance and Sustainability Committee met four times in fiscal 2024.

ANNUAL BOARD AND COMMITTEE EVALUATIONS

Our Board and each of our standing committees annually conduct self-evaluations to identify opportunities to improve Board and committee performance.

COMMITTEE CHARTERS

The charters of the three standing committees of the Board of Directors describe the governance framework for each Committee. The charters, along with the Corporate Governance Guidelines, are intended to ensure our Board has the necessary authority and practices in place to review and evaluate our business operations and to make decisions that are independent of management. These charters are reviewed by each Committee on an annual basis and any recommended changes are made and approved by the Board.

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   11


Table of Contents

The Board and its Committees

 

 

 

You may view the charters at http://investors.verabradley.com/corporate-governance.

COMMUNICATIONS WITH DIRECTORS

Shareholders may communicate with our directors by transmitting correspondence to our investor relations desk via the internet at http://investors.verabradley.com/corporate-governance/contact-the-board or to our Secretary at:

Corporate Secretary

c/o Vera Bradley, Inc.

12420 Stonebridge Road

Roanoke, Indiana 46783

The Secretary will, as appropriate, forward communications to the Board of Directors or to any individual director, directors, or committee to whom the communication is directed.

 

 

12  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Director Compensation

 

 

 

DIRECTOR COMPENSATION

 

The Talent and Compensation Committee annually reviews the compensation for our Board of Directors and looks at director compensation relative to the Company’s Peer Group. The tables below reflect the cash and equity compensation provided for service on our Board. All directors other than Ms. Ardrey and Ms. Baekgaard participate in our non-employee director compensation program.

CASH COMPENSATION FOR NON-EMPLOYEE DIRECTORS

The fee for our non-employee directors under the cash compensation element of the program during fiscal 2024 was $49,500. We pay the Chair of our Board of Directors an additional $27,000 retainer and the Lead Independent Director an additional retainer of $9,000. In addition, we pay the following annual retainers for committee service:

FISCAL 2024 ANNUAL BOARD RETAINERS

 

  

Audit Committee Chair

   $ 13,500  

Audit Committee Members

     9,000  

Talent and Compensation Committee Chair

     9,000  

Talent and Compensation Committee Members

     6,300  

Nominating, Governance and Sustainability Committee Chair

     7,875  

Nominating, Governance and Sustainability Committee Members

     5,400  

All of our directors are reimbursed for reasonable travel and other expenses incurred in connection with attending meetings of the Board of Directors and its committees.

RESTRICTED STOCK UNITS FOR NON-EMPLOYEE DIRECTORS

We also provide each of our non-employee directors with an annual equity grant with a grant date value of approximately $85,000. These restricted stock units vest and settle in our common shares, on a one-for-one basis, on the first anniversary of the grant date. The applicable award agreement also provides that the units shall vest immediately upon the death or disability of the director and upon the occurrence of a change in control of the Company, as defined in the agreement.

FISCAL 2024 DIRECTOR COMPENSATION

The following table summarizes compensation that our non-employee directors earned during fiscal 2024 for services as members of our Board of Directors.

FISCAL 2024 DIRECTOR COMPENSATION

 

                                                                                
     

NAME(1)

  FEES
EARNED
OR PAID
IN CASH
    STOCK
AWARDS
(2)
    TOTAL  

Kristina Cashman

  $ 70,800     $ 84,998     $ 155,798  

Robert J. Hall

    76,500       84,998       161,498  

Mary Lou Kelley

    63,900       84,998       148,898  

Frances P. Philip

    72,675       84,998       157,673  

Jessica Rodriguez(4)

    —        —        —   

Edward M. Schmults(3)

    22,500       84,998       107,498  

Carrie M. Tharp

    63,600       84,998       148,598  

Nancy Twine(3)

    21,300       84,998       106,298  

Bradley Weston(4)

    —        —        —   
(1)

We did not pay our employee directors, Ms. Ardrey, and Ms. Baekgaard, any compensation for their services on our Board of Directors in fiscal 2024.

(2)

Represents the aggregate grant date fair value of restricted stock awarded during the fiscal year computed in accordance with FASB ASC Topic 718. Additional information regarding the calculation of these values is included in Notes 2 and 8 to our consolidated financial statements.

(3)

Ms. Twine and Mr. Schmults retired from the Board of Directors at the 2023 Annual Meeting.

(4)

Ms. Rodriguez and Mr. Weston joined the Board in late fiscal 2024 and did not earn compensation until early fiscal 2025.

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   13


Table of Contents

PROPOSAL NO. 2 Ratification of independent Auditor

 

 

 

PROPOSAL NO. 2

RATIFICATION OF INDEPENDENT AUDITOR

PROPOSAL

The Audit Committee has selected Deloitte & Touche LLP, or Deloitte, as our independent registered public accounting firm to audit the consolidated financial statements of Vera Bradley for the fiscal year ending February 1, 2025 (fiscal 2025). The Audit Committee and the Board of Directors seek to have the shareholders ratify the Audit Committee’s appointment of Deloitte. Representatives of Deloitte will be present at the Annual Meeting and will have the opportunity to make a statement, if they desire to do so, and to respond to appropriate questions. Deloitte also served as our independent registered public accounting firm for fiscal 2024.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table sets forth the aggregate fees billed by Deloitte to Vera Bradley for fiscal years 2024 and 2023:

FEES PAID TO DELOITTE

 

   
    FISCAL
2024
    FISCAL
2023
 

Audit Fees(1)

  $ 1,108,430     $ 1,229,369  

Audit-Related Fees(2)

    8,000        

Tax Fees(3)

    136,524       98,357  

All Other Fees(4)

    1,895       1,895  

Total

  $ 1,254,849     $ 1,329,621  
(1)

Audit Fees for fiscal years 2024 and 2023 consist of fees for professional services rendered by Deloitte in connection with the integrated audit of the consolidated financial statements and the effectiveness of the Company’s controls over financial reporting and reviews of our interim consolidated financial statements.

(2)

Audit-Related fees consist of fees in conjunction with our fiscal 2024 S-8 shelf registration.

(3)

Tax Fees consist primarily of fees associated with tax compliance, advice, and planning services.

(4)

All Other Fees consist of fees for products and services other than the above-described services. In fiscal years 2024 and 2023, these fees related to an online research database subscription.

The Audit Committee’s written charter requires the Audit Committee to pre-approve, prior to engagement, all audit and permissible non-audit services provided by the independent registered public accounting firm on an individual basis. All of the services described in the table above were pre-approved by the Audit Committee. The Audit Committee considered the services listed above to be compatible with maintaining Deloitte’s independence.

VOTE REQUIRED AND BOARD RECOMMENDATION

This proposal will be approved if a quorum is present, in person or by proxy, at the Annual Meeting and the votes properly cast favoring the proposal exceed the votes properly cast opposing the proposal. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum but will not have any effect on the outcome of the proposal.

 

 
VERA BRADLEY’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF DELOITTE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2025

 

14  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Audit Committee Report

 

 

 

AUDIT COMMITTEE REPORT

Management is responsible for the preparation, presentation and integrity of Vera Bradley’s consolidated financial statements and the Company’s internal control over financial reporting. The independent registered public accounting firm of Deloitte & Touche LLP, or Deloitte, was responsible in fiscal 2024 for performing an integrated audit of the Company’s consolidated financial statements and the effectiveness of the Company’s controls over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes. The Audit Committee is also responsible for selecting and evaluating the independence of the Company’s independent registered public accounting firm and for pre-approving the services rendered by that firm.

In this context, the Audit Committee reports as follows:

 

1.

The Audit Committee has reviewed and discussed with management Vera Bradley’s audited consolidated financial statements for the fiscal year ended February 3, 2024;

 

2.

The Audit Committee has discussed with Deloitte the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the Commission;

 

3.

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

 

4.

The Audit Committee has considered whether the provision by Deloitte of non-audit services to Vera Bradley is compatible with maintaining Deloitte’s independence.

Based on these procedures and discussions, the Audit Committee recommended to the Board of Directors that the Company’s audited consolidated financial statements referred to above be included in Vera Bradley’s Annual Report on Form 10-K for the fiscal year ended February 3, 2024, for filing with the Securities and Exchange Commission.

SUBMITTED BY THE AUDIT COMMITTEE

Kristina Cashman, Chair

Mary Lou Kelley

Jessica Rodriguez

Carrie M. Tharp

 

  VERA BRADLEY, INC.   2024 Proxy Statement   15


Table of Contents

LOGO

 

PROPOSAL NO. 3

ADVISORY VOTE ON EXECUTIVE COMPENSATION

PROPOSAL

The guiding principles of our compensation policies and decisions include aligning each executive’s compensation with our business strategy and the interests of our shareholders and providing incentives needed to attract, motivate, and retain key executives who are important to our long-term success. Consistent with this philosophy, a significant portion of the total incentive compensation for each of our executives is directly related to our earnings and to other performance factors that measure our progress against the goals of our strategic and operating plans.

Shareholders are urged to read the “Executive Compensation Discussion and Analysis” section of this proxy statement, which discusses how our compensation design and practices reflect our compensation philosophy. The Talent and Compensation Committee and the Board of Directors believe that our compensation design and practices are effective in implementing our guiding principles.

We are required to submit a proposal to shareholders for a (non-binding) advisory vote to approve the compensation of our named executive officers (“NEOs”) pursuant to Section 14A of the Securities Exchange Act of 1934, as amended, or the Exchange Act. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to express their views on the compensation of our NEOs. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the principles, policies, and practices described in this proxy statement. Accordingly, the following resolution is submitted for shareholder vote at the Annual Meeting:

“RESOLVED, that the shareholders of Vera Bradley, Inc. approve, on an advisory basis, the compensation of its NEOs as disclosed in the proxy statement for the Annual Meeting, including the Summary Compensation Table, the Executive Compensation Discussion and Analysis, and other related tables and disclosures set forth in such proxy statement.”

Because this vote is advisory, the result will not be binding on us, our Board of Directors, or our Talent and Compensation Committee, although our Talent and Compensation Committee will consider the outcome of the vote when evaluating our compensation principles, design, and practices. Proxies submitted without direction pursuant to this solicitation will be voted “FOR” the approval of the compensation of our NEOs, as disclosed in this proxy statement, except with respect to shares held in street name, for which you must direct your broker to vote such shares. A say-on-pay vote will take place every year as determined by the Board of Directors and based on the advice provided by the shareholders.

VOTE REQUIRED AND BOARD RECOMMENDATION

This proposal will be approved if a quorum is present, in person or by proxy, at the Annual Meeting and the votes properly cast favoring the proposal exceed the votes cast opposing the proposal. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum but will not have any effect on the outcome of the proposal.

 

 
VERA BRADLEY’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT INCLUDING RELATED TABLES AND DISCLOSURES.

 

 

16  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Executive Compensation

 

 

 

EXECUTIVE COMPENSATION

TALENT AND COMPENSATION COMMITTEE REPORT

The Talent and Compensation Committee of the Board of Directors has reviewed and discussed the following Executive Compensation Discussion and Analysis with management and, based on such review and discussion, has recommended to the Board of Directors that the Executive Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2024.

SUBMITTED BY THE TALENT AND COMPENSATION COMMITTEE

Carrie M. Tharp, Chair

Kristina Cashman

Frances P. Philip

Bradley Weston

EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS (“CD&A”)

This CD&A provides a summary of the material elements of our compensation philosophy and practices, with a particular focus on our named executive officers or “NEOs.” As used in this CD&A, the “Committee” refers to the Talent and Compensation Committee of the Board of Directors.

The following is a list of our NEOs who served during fiscal 2024:

 

  

NAME

   TITLE

Jacqueline Ardrey

   President and CEO, Vera Bradley, Inc.

Michael Schwindle

   Chief Financial Officer, Vera Bradley, Inc.

Mark C. Dely

   Chief Administrative & Legal Officer and Corporate Secretary, Vera Bradley, Inc.

Alison Hiatt

   Chief Marketing Officer, Vera Bradley

John Enwright (1)

   Former Chief Financial Officer, Vera Bradley, Inc.
(1)

Mr. Enwright left the Company on June 30, 2023.

 

  VERA BRADLEY, INC.   2024 Proxy Statement   17


Table of Contents

Executive Compensation

 

 

 

To assist in understanding our NEO compensation program, we have included a discussion of our compensation policies and decisions for periods before and after fiscal 2024, where relevant. Our compensation program is designed to provide some common standards throughout the Company. Therefore, much of what is disclosed below applies to executives in general and is not limited to our NEOs. The Committee constantly evaluates industry and corporate governance best practices in its compensation programs. Below is a summary of what the Company does and does not do with respect to its compensation programs:

CORPORATE GOVERNANCE BEST PRACTICES

 

WHAT WE DO

LOGO

 

Pay for Performance: In fiscal 2024, 50% of CEO compensation and an average of 42% of other NEO compensation was tied to performance.

LOGO

 

Double-Trigger Change of Control: Following a change in control, severance payments will only be triggered upon an involuntary termination of employment or where employee terminates for good reason.

LOGO

 

Use of Third-Party Consultants: We utilize compensation consultants and third-party benchmarking to evaluate and compare our compensation programs.

LOGO

 

Share Ownership Guidelines: Executive officers are expected to hold Company common stock between 2 and 4 times their annual base salary, and non-employee directors are expected to hold common stock of 4 times their annual cash retainer.

LOGO

 

Compensation Recoupment Policy: All cash incentive awards or performance-based equity awards are subject to recoupment in the event of earnings restatements.

LOGO

 

Limited use of Employment Agreements: Only our CEO has an employment agreement.

WHAT WE DON’T DO

LOGO

 

No Hedging or Pledging: Under the Company’s Insider Trading Policy, executives are not allowed to enter into hedging/pledging or other monetization transactions with Company securities.

LOGO

 

No Grants of Stock and Options Below Fair Market Value: All restricted stock units and options are priced and granted at the fair market value at the time of grant. Stock or options are not granted below fair market value.

LOGO

 

No Repricing of Underwater Options/RSUs: The Committee has not repriced any underwater options or otherwise changed the value of RSUs granted despite change in the value of the stock.

LOGO

 

No Short-Term Vesting of Equity Awards: The Company utilizes a three-year time horizon to vest equity granted as part of its Long-Term Incentive Program.

LOGO

 

No Tax Gross-Ups: The Company does not utilize tax gross-ups for executives.

 

 

OUR COMPENSATION PHILOSOPHY AND OBJECTIVES

We believe that the Company’s compensation philosophy should act as the “blueprint” for the total compensation design and targeted value to be delivered to the executive officers. Our compensation philosophy is intended to ensure that the framework for the Company’s compensation program supports the strategic

needs of the business, that the components of the pay system work in concert to influence executive behavior in support of organization imperatives, and that the mechanics of the executive reward structure reinforce the corporate culture and management style of the organization.

Our compensation philosophy includes two identifiable components: compensation objectives and pay goals.

 

 

18  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Executive Compensation

 

 

 

Compensation Objectives. These objectives serve as a set of “guiding principles” that provide an overview of the intended purpose of our compensation program. Our compensation objectives are:

 

 

To attract and retain key personnel and drive effective results.

 

 

To encourage our NEOs to focus on:

 

   

Building shareholder value.

 

   

Maximizing growth and profitability.

 

   

Leadership to drive change while exemplifying Company values.

 

   

Building a strong brand and focusing on long-term strategic objectives.

 

 

To provide our NEOs with a compensation package that is competitive within our industry.

Pay Goals. The Committee has determined that it is beneficial to establish ranges of compensation, both in total and with respect to each of the Company’s main compensation components, around the 50th percentile of peer group compensation. A primary focus of the Committee in setting executive compensation is to target total compensation within the established ranges noted below, although competitiveness of the other pay components is also strongly considered. For the CEO and the other NEOs, the Talent and Compensation Committee considers the following ranges when assessing the competitiveness of each pay component:

 

 

COMPENSATION ELEMENT

 

PAY GOAL RELATIVE TO PEER

GROUP

Annual base salary rate:

  50th percentile, +/- 10%

Target annual incentive:

  50th percentile, +/- 10%

Target long-term incentive:

  50th percentile, +/- 15%

Target total compensation:

  50th percentile, +/- 15%

COMPENSATION MIX AND PAY FOR PERFORMANCE

Annually, the Committee considers the total compensation opportunities for each NEO and determines how total potential compensation should be allocated across the different elements of compensation. The Committee does not follow a definitive policy when determining the mix of and structure for total compensation. Instead, it considers factors such as achievement of corporate and individual goals, level of experience, responsibilities, demonstrated performance, time with the corporation, risk associated with any payout, and retention considerations.

Generally, the Committee considers market practices as reflected in the peer group data for the peer group identified below and more generally for the Company’s industry to obtain a baseline of total potential compensation for each NEO. Using this analysis as a starting point, the Committee engages in discussions with the objective of ensuring that a material portion of each NEO’s total compensation is at-risk and dependent on performance. Care is taken to balance incentives to drive performance in the short-term and the long-term. In this way, we encourage NEOs to vigorously pursue financial and other performance while discouraging incentives to take excessive risks that may be beneficial in the short term, but harmful in the long run. We believe that these practices align the interests of the NEOs with those of the shareholders year-over-year, as well as over the long term.

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   19


Table of Contents

Executive Compensation

 

 

 

The Committee seeks to ensure that a substantial portion of the total compensation awarded to the NEOs is performance-based and is comprised of both annual and long-term incentives. The fiscal 2024 mix of target compensation for the CEO and other NEOs is set forth below:

 

FISCAL 2024 TARGET COMPENSATION FOR CEO AS PERCENTAGE OF TOTAL COMPENSATION(1):   FISCAL 2024 AVERAGE TARGET COMPENSATION FOR NEOs AS PERCENTAGE OF TOTAL COMPENSATION:
LOGO   LOGO

 

(1) 

Fiscal 2024 CEO compensation did not have a share-based component due to the timing of Ms. Ardrey’s arrival as new CEO in fiscal 2023. Annual CEO compensation typically includes a stock award component, typically split between fixed and performance-based components.

 

HOW WE MAKE EXECUTIVE COMPENSATION DECISIONS

Role of the Talent and Compensation Committee. The Committee is responsible to the Board for overseeing the development and administration of our compensation programs. The Committee is comprised of four independent directors and is responsible for the review and approval of all aspects of executive compensation, including the approval of compensation packages of newly hired executive officers. The Committee is supported in its work by the CEO, the Chief Administrative & Legal Officer, the Vice President of Human Resources, their staff, and independent executive compensation consultants, as needed.

Role of Management. The Committee generally seeks input from our CEO when discussing the performance and compensation levels of the other NEOs. The Committee also works with our CEO, our Chief Financial Officer, our Chief Administrative & Legal Officer and Corporate Secretary, and our Vice President of Human Resources in evaluating the financial, accounting, tax, and retention implications of our various compensation programs. Neither Ms. Ardrey, nor any of our other executives participates in deliberations relating directly to her or his own compensation.

Role of Compensation Consultants. The Committee has utilized compensation consultants in assisting with benchmarking, regulatory changes and updates, and analysis and design of the Company’s compensation program. The Committee also used consultants to help review the Company’s compensation peer group. The Committee has utilized Pearl Meyer & Partners, LLC (“Pearl Meyer”) and Equilar, Inc. (“Equilar”) as executive compensation consultants. Both Pearl Meyer and Equilar were retained by the Committee, and the Committee may replace them or hire additional consultants at any time. Our Committee makes all final decisions regarding the compensation of our NEOs.

Role of Shareholders: Response to Advisory Vote on Executive Compensation. At the 2023 Annual Meeting of Shareholders, approximately 88% of the votes cast on the advisory vote on our executive compensation program were in support of the compensation paid to the NEOs. The Committee took these results into account in formulating its executive compensation plans moving forward for fiscal 2024. In light of the support from shareholders, in setting fiscal 2024 compensation the Committee materially maintained the compensation program currently in place.

 

 

20  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Executive Compensation

 

 

 

Peer Group and Benchmarking. At least annually, the Committee utilizes peer group and industry third-party benchmarking data to ensure that the NEOs and other officers are appropriately compensated. As part of analyzing peer group data, the Committee conducts a review of its identified peer group used for executive compensation comparisons to ensure all peer companies remain an appropriate basis for comparison.

In selecting peer companies, the Committee aims to identify companies with similar characteristics to our Company. Specifically, we look for peer group companies that are in the retail industry or another related industry, have a strong consumer brand, are profitable, and are of a comparable size (based principally on revenue and market capitalization).

 

 

FISCAL 2024 COMPENSATION PEER GROUP
The Buckle, Inc.    Boot Barn, Inc.    J. Jill. Inc.
Duluth Holdings    Land’s End, Inc.    Delta Apparel Group

Vince Holding Corp.

   Build-a-Bear Workshop, Inc.    Zumiez Inc.
Movado Group, Inc.    Oxford Industries, Inc.    YETI, Holdings, Inc.
Destination XL Group, Inc.    Tilly’s Inc.    Crocs, Inc.
           

ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM IN FISCAL 2024

 

HIGHLIGHTS

Recent highlights of our executive compensation program include:

 

 

In addition to financial goals, the annual incentive for fiscal 2024 included key strategic objectives, each with its own objective metric tied to our long-term strategic plan and intended to focus the team on making progress towards the Company’s long-term strategic plan.

 

 

The Company achieved above threshold levels for the Vera Bradley Brand and Enterprise net revenue metrics and below threshold for the Pura Vida Brand net revenue metric. Vera Bradley Brand and Enterprise net operating income each met threshold levels, while Pura Vida Brand net operating income was below threshold level. Therefore, there were payouts for Vera Bradley Brand and Enterprise net revenue and operating income, while there were no payouts for Pura Vida Brand net revenue or operating income as it related to these elements of the Company’s short-term incentive plans.

 

 

The actual achievement for individual tranches associated with the fiscal 2024 performance year for the performance-based units of the Company’s Long-Term Incentive Plan was 200% due to achieving adjusted EPS of $0.55, which was a 129% improvement from fiscal 2023.

 

 

All stock equity grants under our long-term incentive program vest over a three-year period in order to incentivize retention and long-range performance.

BASE SALARY

Purposes of Base Salary. We utilize base salary as the primary means of providing compensation for performing the essential elements of an executive’s job. Base salaries are intended to provide a certain level of fixed compensation commensurate with an executive’s position, responsibilities, tenure, historical compensation, retention risk, and current and expected future contributions to the Company. In particular, we set base salaries keeping in mind that we are often recruiting from a fashion and retail marketplace that is not typically found in the Company’s hometown of Fort Wayne, Indiana. With these principles in mind, base salaries are reviewed at least annually by our Committee and may be adjusted from time to time based on the results of this review.

Setting Fiscal 2024 Base Salary. In fiscal 2024, the Committee provided for base salary increases for the NEOs ranging from 2.5% to 7.7%. Ms. Ardrey’s base salary was established in accordance with her Employment Agreement.

The Committee approved base salary increases based on analysis of the median peer group and industry benchmarking base salary information, performance and/or changes in NEO responsibilities, and to align with the market and the Company’s compensation philosophy.

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   21


Table of Contents

Executive Compensation

 

 

 

The following table shows annual base salary rates for each of our NEOs at the end of fiscal 2023 and fiscal 2024. Amounts represent a base rate of pay; actual earnings during a fiscal year may vary based upon a variety of factors, including the number of weeks in the fiscal year.

FISCAL 2024 BASE SALARY CHANGES

 

   
    FISCAL 2023 BASE
SALARY RATE
    FISCAL 2024 BASE
SALARY RATE
 

Jacqueline Ardrey

  $ 850,000     $ 850,000  

Michael Schwindle

    N/A       525,000  

Mark C. Dely

    418,000       450,000  

Alison Hiatt

    N/A       400,000  

John Enwright

    428,480       439,192  

ANNUAL INCENTIVE COMPENSATION

Purposes of Annual Incentive. Our annual incentive compensation, in the form of an annual cash payment, is intended to compensate our NEOs for meeting our short-term corporate financial and strategic objectives and to incentivize our NEOs to meet these objectives. Our financial and strategic objectives are intended to build shareholder value, maximize growth and profitability, build a strong brand, and execute against the annual milestones of the long-term strategic plan.

Setting Annual Incentive Compensation Levels. Our objective is generally to be within the competitive range of the peer group median, on average, for annual incentive opportunities of our executive officers, including our NEOs. We consider a range of +/-10% around the market median (50th percentile) to be competitive but still capable of recognizing differences among executives.

Fiscal 2024 Annual Incentive Performance Metrics. For fiscal 2024, the Committee largely left the compensation

program unchanged from fiscal 2023. The Company utilizes a Brand program and an Enterprise program to reflect the different objectives of the Company and its multiple brands, and to incentivize each NEO on the areas each have the greatest ability to impact for both financial metrics and strategic objectives. The strategic objectives tie back to either the individual Brand or Enterprise objectives, which are updated annually as appropriate. The program applicable to each NEO for fiscal 2024 was as follows:

FISCAL 2024 ANNUAL INCENTIVE PROGRAM

 

 
    PROGRAM

Jacqueline Ardrey

  Enterprise

Michael Schwindle

  Enterprise

Mark C. Dely

  Enterprise

Alison Hiatt

  Enterprise

John Enwright

  Enterprise

Selecting the Financial Metrics. Consistent with fiscal 2023, revenue and operating income were the financial metrics used for fiscal 2024. The Committee selected net revenue because we believe it is important to our shareholders and to the ultimate performance of the Company. Top line performance, however, must be accompanied by operating performance as well, so operating income was selected as a second performance metric. In the future, the Committee will review the application of other financial performance measures. The Committee typically sets a target level of performance at which the full target bonus can be earned. The Committee also sets a threshold level of performance below which no bonus is earned and a maximum level of performance that results in a maximum bonus. For the Enterprise program, 100% of the financial metrics are based upon Enterprise results.

 

 

22  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Executive Compensation

 

 

 

ENTERPRISE ANNUAL INCENTIVE PLAN STRUCTURE

 

         

FINANCIAL METRICS

  Weight     Payout by Performance Level as a Percentage of Target Incentive  
          Threshold     Target     Maximum  

Enterprise Operating Income

    25%       25%       100%       200%  

Enterprise Net Revenue

    25%       25%       100%       200%  

Total

    50%                          

STRATEGIC METRICS

  Weight     Payout by Performance Level as a Percentage of Target Incentive  
          Met Most     Met All     Exceed     Significantly Exceed  

Enterprise Strategic Objectives(1)

    25%       25%       100%       125%       200%  

Individual Financial Objectives

    25%       50%       100%       125%       200%  

Total

    50%                                  

TOTAL

                                    200% (2) 
(1)

The payout for strategic objectives is capped at 100% in the event that either or both of the operating income or net revenue metrics are not achieved at the threshold performance level or higher.

(2)

Ms. Ardrey’s total annual incentive payout is capped at 200% of her base salary.

BRAND ANNUAL INCENTIVE PLAN STRUCTURE

 

         

FINANCIAL METRICS

  Weight     Payout by Performance Level as a Percentage of Target Incentive  
          Threshold     Target     Maximum  

Brand Operating Income

    20%       25%       100%       200%  

Enterprise Operating Income

    10%       25%       100%       200%  

Brand Net Revenue

    20%       25%       100%       200%  

Total

    50%                          

STRATEGIC METRICS

  Weight     Payout by Performance Level as a Percentage of Target Incentive  
          Met Most     Met All     Exceed     Significantly Exceed  

Brand Strategic Objectives(1)

    25%       25%       100%       125%       200%  

Individual Financial Objectives

    25%       50%       100%       125%       200%  

Total

    50%                                  

TOTAL

                                    200%  
(1)

The payout for strategic objectives is capped at 100% in the event that either or both of the operating income or net revenue metrics are not achieved at the threshold performance level or higher.

 

  VERA BRADLEY, INC.   2024 Proxy Statement   23


Table of Contents

Executive Compensation

 

 

 

Selecting the Strategic Metrics. In fiscal 2024, the Committee once again included corporate-level strategic objectives as a component of the annual incentive compensation program. The Committee believes that this metric is appropriate to incentivize the management team to meet significant strategic objectives key to achieving the Company’s long-term strategic plan. Each strategic objective measure is tied to an objective metric where performance is based on the level of achievement against the metric.

In fiscal 2024 the Vera Bradley Brand corporate strategic goals were as follows:

 

 

Restore Core Product

 

 

Restore Core Brand

 

 

Restore Core Customer

 

 

Balanced Sales Footprint

 

 

Expense Management

In fiscal 2024 the Pura Vida Brand corporate strategic goals were as follows:

 

 

Restore Core Product

 

 

Restore Core Brand

 

 

Restore Core Customer

 

 

Drive Repeat Purchases

 

 

Expense Management

In fiscal 2024 the Enterprise corporate strategic goals were as follows:

 

 

Drive Stock Price and Shareholder Return

 

 

Gross Margin Management

 

 

Talent Management

 

 

Expense Management

 

 

ESG & Corporate Responsibility

In addition to these corporate-level strategic goals, the Committee also continued to include a metric for the measurement of personal objectives for each of the NEOs. The Committee believes it is important to provide individual incentive against defined goals at the level of each major business function in order to ensure that the management team is focused equally on execution in each of their areas in order to meet the long-term strategic objectives of the Company. The individual financial objectives varied by individual and department,

but all had clear metrics and measurements and in general were designed to be challenging but achievable.

In the future, the Committee will continue to evaluate both payout levels and performance levels in accordance with business conditions and prevailing market practices.

Fiscal 2024 Annual Incentive Payout. In fiscal 2024, the Vera Bradley Brand adjusted operating income and net revenue were above the threshold performance levels of $10.1 million and $369.8 million, respectively, resulting in payouts for these metrics. Vera Bradley Brand operating income was adjusted to exclude severance charges and certain professional fees.

In fiscal 2024, the Pura Vida Brand adjusted operating income and net revenue were below the threshold performance levels of $6.4 million and $90.6 million, respectfully, resulting in no payout for these metrics. Operating income was adjusted to exclude intangible asset impairment charges, intangible asset amortization, severance charges, and certain professional fees.

In fiscal 2024, the Enterprise adjusted operating income and net revenue were above the threshold performance levels of $16.5 million and $460.3 million, respectfully, resulting in payouts for these metrics. Enterprise operating income was adjusted as previously outlined for the Vera Bradley and Pura Vida Brands.

For financial performance metrics, payout levels are determined using linear interpolation for results falling between the three performance levels.

The Committee determined that the Vera Bradley Brand performance to its strategic goals were achieved at 130%, the Pura Vida Brand strategic objectives were achieved at 60% and the Enterprise strategic objectives were achieved at 140%. These percentages were determined based on metrics identified at the beginning of fiscal 2024 and how the Company performed with respect to each of these metrics.

For the NEOs, the payout for individual objectives was determined based upon achievement of the goals as rated by Ms. Ardrey and the Committee. Mr. Schwindle, Mr. Enwright, Ms. Hiatt, and Mr. Dely met all of their objectives. The Committee determined that Ms. Ardrey performed above expectations for her individual objectives.

 

 

24  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Executive Compensation

 

 

 

The following table sets forth the payout opportunities at each performance level, as well as actual bonus earned as a percentage of base salary:

FISCAL 2024 ANNUAL INCENTIVE PAYOUT AS A

PERCENTAGE OF BASE SALARY

 

       
    OPPORTUNITY        
    Threshold     Target     Max     ACTUAL(1)  

Jacqueline Ardrey

    31.3     100     200     127.5

Michael Schwindle

    18.8     60     120     72.8

Mark C. Dely

    18.8     60     120     72.8

Alison Hiatt

    15.6     50     100     60.6

John Enwright

    15.6     50     100     60.6
(1)

Actual reflected as a percentage of eligible earnings during fiscal 2024. Represents totals for each category.

LONG-TERM INCENTIVE COMPENSATION

Purposes of Long-Term Incentive Compensation. We grant long-term equity awards under our executive compensation program in order to compete for executive talent and align the interests of our employees, including our NEOs, with those of the Company’s shareholders. These awards are intended to motivate executives by tying a portion of their incentive compensation to the performance of our common stock over the long term and, in turn, also motivate employees to remain with the Company as the value of these awards is intended to increase over time. We believe these awards also serve as motivation for executives to continue to improve the long-term performance of the Company.

Fiscal 2024 Long-Term Incentive Vehicles, Mix, and Grant Size. The fiscal 2024, fiscal 2023, and fiscal 2022 grants to each NEO were made up of 50% performance-based restricted stock units and 50% time-based restricted stock units. The terms of the fiscal 2024, fiscal 2023, and fiscal 2022 grants were similar.

 

LOGO

Based on the Committee’s assessment, the following table reflects the fiscal 2024 long-term grant values for the NEOs.

FISCAL 2024 LONG-TERM INCENTIVE GRANTS

 

       
    TARGET
GRANT
VALUE
    AS A %
OF
BASE
SALARY
RATE
    % OF GRANT
PERFORMANCE-
BASED
    % OF
GRANT
TIME-
BASED
 

Jacqueline Ardrey

  $ N/A       N/A       N/A       N/A  

Michael Schwindle(1)

    400,000       76.2     50     50

Mark C. Dely(2)

    275,000       61.1     50     50

Alison Hiatt

    250,000       62.5     50     50

John Enwright

    275,000       62.6     50     50
(1)

Excludes time-based and performance hiring grants of $500,000.

(2)

Excludes time-based and performance-based grants of $115,000 for Mr. Dely for his assumption of additional responsibilities.

Terms of the Fiscal 2024 Time-Based Restricted Stock Unit “RSU” Grant. The time-based RSUs vest and settle in our common shares, on a one-for-one basis in three equal annual installments on the first, second, and third anniversaries of the date of grant. The applicable award agreement provides that the units vest immediately upon the NEO’s disability (as defined in the Incentive Plan) or death or, provided the NEO remains employed through the effective date, upon a change in control (which is more specifically defined in the award agreement). The units will also vest upon the NEO’s retirement (as defined in the Incentive Plan) on a prorated basis based on service through the retirement date.

Terms of the Fiscal 2024 Performance-Based RSU Grant. The performance-based RSU grant is structured to be earned over three annual performance periods (fiscal 2024, fiscal 2025, and fiscal 2026) and for any earned units to vest and settle in our common shares, on a one-for-one basis in a single tranche on the third anniversary of the date of grant.

The performance-based RSUs granted in fiscal 2024 are divided into three equal tranches of one-third each of the total award and allocated to each of the three fiscal years of the Company ending with fiscal 2026, with each such fiscal year being considered a performance year. Each tranche of performance-based RSUs must be both “earned” and “vested” before it will be settled in the form of the Company’s common shares. Each tranche of

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   25


Table of Contents

Executive Compensation

 

 

 

performance-based RSUs will be deemed earned only if the earnings per share threshold is met in the applicable fiscal year, and each will be deemed vested only if the executive is continuously employed with the Company through the third anniversary of the grant date. For fiscal 2024, threshold and maximum performance levels for the performance-based RSUs were set at 88% and 112%, respectively, of target earnings per share performance and payout levels range from 25% for threshold performance up to 200% for maximum performance.

FISCAL 2024 PERFORMANCE-BASED RSU GRANT –

TRANCHE ONE PERFORMANCE MEASURES

 

   

PERFORMANCE

LEVEL

 

EPS GOAL FOR

FISCAL 2024

 

SHARES VESTING

AS A

PERCENTAGE OF

TARGET GRANT

Threshold

  $0.38 per share   25%

Target

  $0.43 per share   100%

Maximum

  $0.48 per share   200%

For the second and third tranches of the performance-based RSU grant, target earnings per share goals will be based on a pre-determined percentage increase in earnings per share over the prior year, and threshold and maximum performance levels will again be set at 88% and 112%, respectively, of target earnings per share. In each year, shares vesting as a percentage of the NEO’s target grant will be as set forth in the table above. The Committee will continue to evaluate both payout levels and performance levels in accordance with business conditions and prevailing market practices.

Results of Fiscal 2022 through Fiscal 2024 Performance-Based RSU Cycle. The Company’s Long-Term Incentive Plan Performance-based restricted stock units are earned over a three year period and therefore the discussion below includes discussion over the last three fiscal years. Performance-based restricted stock units granted on April 2, 2021 were subject to a three-year performance period established by the Committee that ended on February 3, 2024, which represents performance periods covered by fiscal 2022, fiscal 2023, and fiscal 2024. The following table shows the target number of restricted stock units granted to each NEO for this period.

FISCAL 2022 PERFORMANCE-BASED RSU GRANTS

 

  
     TARGET GRANT
(NUMBER OF RSUs)
 

Jacqueline Ardrey

     —   

Michael Schwindle

     —   

Mark C. Dely

      14,648  

Alison Hiatt

     —   

John Enwright

      15,869  

The target number of performance-based RSUs was equally divided into three tranches with the first tranche earned based on fiscal 2022 performance (“FY22 Tranche”), the second tranche earned based on fiscal 2023 performance (“FY23 Tranche”), and the third tranche earned based on fiscal 2024 performance (“FY24 Tranche”).

At the time of grant, it was determined that target performance for the FY22 Tranche was established based on the Company’s 2022 target for diluted earnings per share of $0.83, with a maximum performance of $0.93 and a minimum performance of $0.73 per share. Actual fiscal 2022 adjusted earnings per share was $0.66 per share, resulting in a payout of 0% of target. GAAP diluted EPS of $0.52 was adjusted in accordance with the requirements of the incentive plan, for incremental expense associated with the expiration of the GSP tariff relief, intangible asset amortization, and store impairment charges.

For the FY23 Tranche, it was determined that target performance was 110% of actual fiscal 2022 adjusted diluted earnings per share, and for the FY24 Tranche it was determined that target performance was 110% of actual fiscal 2023 adjusted diluted earnings per share.

Adjusted diluted earnings per share for fiscal 2023 of $0.24 fell below the threshold performance level of $0.64 on a comparable basis, resulting in no payout for the FY23 Tranche. GAAP diluted loss per share of $(1.90) was adjusted in accordance with the requirements of the incentive plan, for goodwill and intangible asset impairment charges; inventory adjustments (associated with Pura Vida excess inventory and excess mask products, the exit of certain technology products and the goodMRKT brand, and discounted inventory); purchase order cancellation fees; expenditures associated with leadership changes and cost saving initiatives (severance charges; consulting fees associated with cost savings and strategic initiatives; CEO search fees, sign-on bonus, and relocation fees; certain professional fees associated with leadership changes; former CEO November and December salary expense, and stock-based compensation associated with retirement); intangible asset amortization; and store and right-of-use asset impairment charges.

 

 

26  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Executive Compensation

 

 

 

Adjusted diluted earnings per share for fiscal 2024 of $0.55 exceeded the maximum performance level of $0.29, resulting in a payout of 200% of target for the FY24 Tranche. GAAP diluted earnings per share of $0.25 was adjusted in accordance with the requirements of the incentive plan for intangible asset impairment charges, the amortization of definite-lived intangible assets, severance charges, and consulting and professional fees primarily associated with strategic initiatives.

Therefore, in total, Mr. Dely earned 9,766 shares pursuant to the FY22, FY23, and FY24 Tranches of the fiscal 2022 grant, respectively. Mr. Enwright’s shares were forfeited upon his separation from the Company in June 2023.

BENEFITS

The NEOs are eligible for the same level and offering of benefits available to other employees. Our benefits, such as our basic health benefits, 401(k) plan, life insurance, paid time off, matching charitable gifts program, and discounts on certain Company products, are intended to provide a stable array of support to our employees and their families throughout various stages of their careers, and these core benefits are provided to all full-time employees. The 401(k) plan allows participants to defer amounts of their annual compensation before taxes, up to the cap set by the Internal Revenue Code, which was $22,500 per person for calendar year 2023 (or $30,000 for employees over age 50). Employees’ elective deferrals are immediately vested and non-forfeitable upon contribution to the 401(k) plan. For fiscal 2024, we provided matching contributions equal to 100% for the first 3% of an employee’s individual contribution and 50% for the next 2% of individual contributions, for a maximum employer match of 4% of individual contributions, subject to certain other limits, including vesting requirements.

AGREEMENTS WITH NAMED EXECUTIVE OFFICERS

Ms. Ardrey’s Employment Agreement. Ms. Ardrey’s employment agreement with the Company was effective November 1, 2022 (the “Employment Agreement”). The Employment Agreement will renew automatically for successive one-year periods unless either the Company or Ms. Ardrey gives notice to the other of its or her intention not to renew.

Ms. Ardrey’s annual base salary rate during fiscal 2024 was $850,000. Under her employment agreement, Ms. Ardrey has a target annual fiscal bonus of 100% of

her annual base salary rate, with a maximum annual cash bonus of up to 200% of her annual base salary rate, and she is also eligible for long-term incentive grants.

Ms. Ardrey’s Employment Agreement contains non-compete restrictions. During the period of her employment and for a period of two years following her termination, Ms. Ardrey may not engage in, manage, join or work for (as an employee, consultant, or independent contractor) or permit the use of her name by, or provide financial or other assistance to, any competitor that engages in the design, production, marketing, and retailing of (i) handbags and other bags and related accessories or (ii) accessories such as jewelry, travel and leisure items, and baby clothes and accessories. In order to be treated as a competitor pursuant to Ms. Ardrey’s Employment Agreement, an enterprise would have to have received in the prior fiscal year at least 25% of its revenues from the design, production, marketing and/or retailing of handbags, other bags, and related accessories or more than 50% of its revenues from the combination of the design, production, marketing and/or retailing of handbags, other bags and related accessories, accessories such as jewelry, travel and leisure items, and baby clothes and accessories. Ms. Ardrey’s Employment Agreement also contains customary confidentiality provisions.

For a description of severance benefits that Ms. Ardrey would be entitled to receive under certain circumstances, please see “Potential Payments Upon Termination or Change in Control – CEO.”

COMPENSATION AND RISK

The Committee has evaluated the risk profile of our compensation policies and practices and concluded that they do not motivate imprudent risk taking. In its evaluation, the Committee reviewed our employee compensation structures and noted numerous factors and design elements that manage and mitigate risk without diminishing the incentive nature of the compensation, including a unique and strong corporate culture that attracts passionate and motivated employees who are excited about our products and our brand (as opposed to being motivated by purely financial considerations); a balanced mix between cash and equity and annual and longer-term incentives under our executive compensation program; ownership of our shares by senior management, which aligns their interests with the long-term interests of the Company and our shareholders; reasonable limits on annual incentive awards (as determined by a review of our current business plan); with respect to annual incentive

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   27


Table of Contents

Executive Compensation

 

 

 

awards, a balanced mix of performance measures, linear payouts between target levels and maximum payouts capped in fiscal 2024 at 200% of target for the CEO and other NEOs; and subjective considerations (including a review of individual performance) and discretion in compensation decisions, which limit the influence of formulae or objective factors on excessive risk taking.

The Committee also reviewed our compensation programs for certain design features that may have the potential to encourage excessive risk-taking, including over-weighting towards annual incentives, highly-leveraged payout curves, unreasonable thresholds, and steep payout cliffs at certain performance levels that may encourage short-term business decisions to meet payout thresholds. The Committee concluded that our compensation programs do not include such elements. In addition, the Committee analyzed our overall enterprise risks and how compensation programs may impact individual behavior in a manner that could exacerbate these enterprise risks. In view of these analyses, the Committee concluded that we have a balanced pay and performance program that does not encourage excessive risk-taking that is reasonably likely to have a material adverse effect on the Company.

EFFECT OF ACCOUNTING AND TAX TREATMENT ON COMPENSATION DECISIONS

In the review, establishment, and operation of our compensation programs, the Committee considers, among other factors, the anticipated accounting and tax implications to us and our executives. Section 162(m) of the Internal Revenue Code limits the amount of compensation that we may deduct in any one year with respect to our NEOs. The Tax Cuts and Jobs Act (the “Tax Act”) generally eliminated the exception that allowed for the deductibility of certain performance-based compensation for covered employees (as defined in the Tax Act). The Committee seeks to maintain flexibility in compensating our executives in a manner designed to promote our corporate goals and therefore we have not adopted a policy requiring all compensation to be deductible. The Committee will continue to evaluate what, if any, changes should be made to the Company’s compensation programs regarding the deductibility of compensation.

 

 

28  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Executive Compensation

 

 

 

COMPENSATION TABLES

Summary Compensation Table

The table below shows information concerning the annual compensation for services to the Company in all capacities of the Company’s NEOs, and a former NEO, during the last three completed fiscal years, (fiscal year 2024 contained 53 weeks, and fiscal years 2023 and 2022 contained 52 weeks). Information regarding fiscal year 2022 is omitted for Ms. Ardrey and Mr. Dely, because they were not NEOs during the relevant years. Information regarding fiscal years 2023 and 2022 is omitted for Mr. Schwindle and Ms. Hiatt, because they were not NEOs during the relevant years.

 

NAME AND PRINCIPAL POSITION

  FISCAL
YEAR
    SALARY     BONUS     STOCK
AWARDS
(1)
    NON-EQUITY
INCENTIVE
PLAN
COMPEN-
SATION
(2)
    ALL OTHER
COMPEN-
SATION
    TOTAL
COMPEN-
SATION
 

Jacqueline Ardrey

    2024     $ 866,346                 $ 1,104,591     $ 5,138 (3)    $ 1,976,075  

President and CEO, Vera Bradley, Inc.

    2023       209,231       860,000       1,900,006             163,400 (4)      3,132,637  

Michael Schwindle

    2024       393,750       200,000       899,992       286,453       18,220 (5)      1,798,415  

Chief Financial Officer, Vera Bradley, Inc.

                                                       

Mark C. Dely

    2024       451,850       250,000       389,998       328,721       14,352 (6)      1,434,921  

Chief Administrative & Legal Officer and Corporate Secretary, Vera Bradley, Inc.

    2023       416,616             560,006       117,173       11,648 (7)      1,105,443  

Alison Hiatt

    2024       407,693             249,999       247,164       16,119 (8)      920,974  

Chief Marketing Officer, Vera Bradley

                                                       

John Enwright

    2024       184,988       250,000       275,001       112,149       879,311 (9)      1,701,449  

Former Chief Financial Officer, Vera Bradley, Inc.

    2023       427,520             570,000       80,160       11,638 (7)      1,089,318  
      2022       413,846             324,998       141,742       11,729 (7)      892,315  
(1)

Represents the aggregate grant date fair value of RSUs awarded during the fiscal year computed in accordance with FASB ASC Topic 718. The grant date fair value of each individual award of RSUs for fiscal 2024 is set forth in the Fiscal 2024 Grants of Plan-Based Awards table below. Additional information regarding the calculation of these values is included in Notes 2 and 8 to our consolidated financial statements. Performance-based awards are reflected at target. If the maximum level of performance-based awards were to be achieved for the awards granted in fiscal 2024, the aggregate grant date fair value would be $1,349,988 for Mr. Schwindle, $412,501 for Mr. Enwright, $584,997 for Mr. Dely; and $374,998 for Ms. Hiatt.

(2)

Represents annual incentive compensation earned during the current fiscal year under the Company’s Annual Incentive Bonus Program and paid in the subsequent fiscal year.

(3)

Represents $3,923 in 401(k) matching contributions made by the Company and $1,215 in other taxable fringe benefits.

(4)

Represents relocation expenses.

(5)

Represents $17,029 in travel stipend and $1,191 in other taxable fringe benefits.

(6)

Represents $13,632 in 401(k) matching contributions made by the Company and $720 in other taxable fringe benefits.

(7)

Represents 401(k) matching contributions made by the Company.

(8)

Represents $15,143 in travel stipend and $976 in other taxable fringe benefits.

(9)

Represents $823,485 in severance, $33,784 in accrued vacation, $11,771 in other taxable fringe benefits, and $10,271 in 401(k) matching contributions made by the Company.

 

  VERA BRADLEY, INC.   2024 Proxy Statement   29


Table of Contents

Executive Compensation

 

 

 

Fiscal 2024 Grants of Plan-Based Awards

The following table sets forth information regarding grants of plan-based awards in fiscal 2024. In this table “TRSU” stands for time-based restricted stock unit and “PRSU” stands for performance-based restricted stock unit.

 

            ESTIMATED POSSIBLE PAYOUTS
UNDER
NON-EQUITY INCENTIVE PLAN
AWARDS
(1)
    ESTIMATED FUTURE PAYOUTS
UNDER
EQUITY INCENTIVE PLAN
AWARDS
(2)
             
    TYPE OF
AWARD
  GRANT
DATE
  THRESHOLD     TARGET     MAXIMUM     THRESHOLD     TARGET     MAXIMUM     ALL
OTHER
STOCK
AWARDS
    GRANT DATE
FAIR VALUE OF
STOCK
AWARDS
(3)
 

Jacqueline Ardrey

  Annual Incentive     $ 270,733     $ 866,346     $ 1,732,692            
  TRSUs                          
    PRSUs                                                            

Michael Schwindle

  Annual Incentive     $ 100,331     $ 321,058     $ 642,116            
  TRSUs   May 8, 2023                 46,904     $ 249,998  
  TRSUs   May 8, 2023                 37,523       199,998  
  PRSUs   May 8, 2023           11,726       46,904       93,808         249,998  
    PRSUs   May 8, 2023                             9,380       37,523       75,046               199,998  

Mark C. Dely

  Annual Incentive     $ 84,722     $ 271,110     $ 542,220            
  TRSUs   March 31, 2023                 22,955     $ 137,500  
  TRSUs   June 8, 2023                 9,457       57,499  
  PRSUs   March 31, 2023           5,739       22,955       45,910         137,500  
    PRSUs   June 8, 2023                             2,364       9,457       18,914               57,499  

Alison Hiatt

  Annual Incentive     $ 63,702     $ 203,846     $ 407,693            
  TRSUs   March 31, 2023                 20,868     $ 124,999  
    PRSUs   March 31, 2023                             5,217       20,868       41,736               124,999  

John Enwright

  Annual Incentive     $ 69,815     $ 223,407     $ 446,814            
  TRSUs   March 31, 2023                 22,955     $ 137,500  
    PRSUs   March 31, 2023                             5,739       22,955       45,910               137,500  
(1)

Awards available under the Company’s fiscal 2024 Annual Incentive Bonus Program. For Ms. Ardrey, Mr. Dely, and Ms. Hiatt, the amounts shown above are based upon fiscal 2024 eligible earnings. Mr. Schwindle and Mr. Enwright’s target possible payout is based on fiscal 2024 eligible earnings had they been with the Company for the entire fiscal year.

(2)

Amounts stated in shares. Awards made under the Incentive Plan to certain employees and directors, including our NEOs. TRSUs vest in three equal annual installments on the first, second, and third anniversaries of the grant date. PRSUs have a three-year cliff-vesting schedule based on continued employment and performance. The performance feature is based on earnings per share growth over the three-year performance period. Vesting would be accelerated in the event of death, disability, or a change in control. See “— Potential Payments on Termination or Change in Control.” If the Company were to declare any cash dividend on its common shares, an equivalent amount per RSU would be credited to an account for each holder and paid to the holder in cash (or forfeited) at the time the shares underlying the RSU are delivered to the holder (or forfeited). Amounts in this account would bear interest at the prime rate reported in the Midwest Edition of The Wall Street Journal from the date of deposit until paid to the holder or forfeited in accordance with the Incentive Plan.

(3)

Represents the grant date fair value of each award computed in accordance with FASB Topic 718.

 

30  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Executive Compensation

 

 

 

Outstanding Equity Awards at 2024 Fiscal Year-End

The following table sets forth information regarding outstanding equity awards as of February 3, 2024.

 

    STOCK AWARDS  
    RESTRICTED
STOCK UNIT
GRANT DATE
 

NUMBER OF SHARES
OR UNITS OF
STOCK

THAT
HAVE NOT VESTED
(#)
(1)

   

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
(#)
(1)
   

EQUITY
INCENTIVE
PLAN
AWARDS:
MARKET
OR
PAYOUT
VALUE OF
UNEARNED
SHARES,
UNITS OR
OTHER
RIGHTS
THAT HAVE
NOT
VESTED

($)(2)

 

Jacqueline Ardrey

  November 1, 2022     386,179 (3)    $ 3,027,643       386,182 (4)    $ 3,027,667  

Michael Schwindle

  May 8, 2023     140,709 (5)      1,103,159       112,572 (4)      882,564  

Mark Dely

  April 2, 2021     14,649 (6)      114,848       (7)       
  April 1, 2022     27,668 (8)      216,917       13,834 (4)      108,459  
  December 9, 2022     35,537 (9)      278,610       (7)       
  March 31, 2023     38,257 (10)      299,935       30,608 (4)      239,967  
    June 8, 2023     15,761 (11)      123,566       12,610 (4)      98,862  

Alison Hiatt

  March 31, 2023     34,778 (12)      272,660       27,826 (4)      218,156  

John Enwright(13)

  April 2, 2021                        
  April 1, 2022                        
  December 9, 2022                        
    March 31, 2023                        
(1)

Time-based restricted stock units (TRSUs) vest in three equal annual installments on the first, second, and third anniversaries of the grant date. Performance-based restricted stock units (PRSUs) have a three-year cliff-vesting schedule based on continued employment and performance. The performance feature is based on earnings per share growth over the three-year performance period. See “—Potential Payments on Termination or Change in Control” for details of outstanding awards where vesting would be accelerated in the event of death, disability, retirement, or upon a change in control.

(2)

Based on the closing price of $7.84 of the Company’s common shares on February 2, 2024 (the last trading day prior to the end of the fiscal year) as reported by The NASDAQ Stock Market.

(3)

Includes 193,091 TRSUs and 193,088 PRSUs granted under the Incentive Plan. The first installment of the TRSUs vested November 1, 2023.

(4)

Includes the number of PRSUs subject to incomplete performance years. The shares are reflected at the maximum payout level, or 200% of target.

(5)

Includes 84,427 TRSUs and 56,282 PRSUs granted under the Incentive Plan.

(6)

Includes 4,883 TRSUs and 9,766 PRSUs granted under the Incentive Plan. The first and second installments of the TRSUs vested on April 2, 2022 and April 2, 2023, respectively.

(7)

There are no unearned PRSUs for this award.

(8)

Includes 13,834 TRSUs and 13,834 PRSUs granted under the Incentive Plan. The first installment of the TRSUs vested on April 1, 2023.

(9)

Includes 35,537 TRSUs granted under the Incentive Plan.

(10)

Includes 22,955 TRSUs and 15,302 PRSUs granted under the Incentive Plan.

(11)

Includes 9,457 TRSUs and 6,304 PRSUs granted under the Incentive Plan.

(12)

Includes 20,868 TRSUs and 13,910 PRSUs granted under the Incentive Plan.

(13)

Mr. Enwright left the Company in June 2023; therefore, all unvested TRSUs and PRSUs were forfeited.

 

  VERA BRADLEY, INC.   2024 Proxy Statement   31


Table of Contents

Executive Compensation

 

 

 

Option Exercises and Shares Vested

We have no outstanding stock options.

The following table shows the number of RSUs which vested for each NEO in fiscal 2024:

 

   
    NUMBER OF SHARES
OR UNITS
ACQUIRED ON
VESTING
(#)
   

NET VALUE REALIZED ON

VESTING(1)

 

Jacqueline Ardrey

    96,544     $ 706,702  

Michael Schwindle

           

Mark C. Dely

    47,234       308,350  

Alison Hiatt

           

John Enwright

    31,863       188,916  
(1)

Computed by multiplying the number of shares vested by the Company’s closing stock price the day prior to the scheduled vesting date(s).

Pension Benefits

Aside from our 401(k) plan, we do not maintain any pension plan or arrangement under which our NEOs are entitled to participate or receive post-retirement benefits.

Nonqualified Deferred Compensation

We do not maintain any nonqualified deferred compensation plan or arrangements under which our NEOs are entitled to participate.

 

32  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Executive Compensation

 

 

 

Potential Payments Upon Termination or Change in Control

Severance Benefits. With the exception of Mr. Enwright, the following table shows the value of cash severance benefits that would have been payable to each of our NEOs under arrangements or contracts described below, as well as the value of equity awards that would vest, assuming a termination of employment as of February 3, 2024. For Mr. Enwright, the table reflects actual severance benefits earned based on separation from the Company. In this table “TRSU” stands for time-based restricted stock units and “PRSU” stands for performance-based restricted stock units.

 

       
    TERMINATION
BY COMPANY
WITHOUT
CAUSE/ BY
EXECUTIVE FOR
GOOD REASON
    TERMINATION
BY COMPANY
FOR CAUSE/ BY
EXECUTIVE
WITHOUT GOOD
REASON
    CHANGE IN
CONTROL
TERMINATION
    TERMINATION
FOLLOWING
DEATH OR
DISABILITY
(1)
 

Jacqueline Ardrey

       

Cash

  $ 4,504,591 (2)          $ 6,204,591 (3)    $ 1,104,591 (4) 

COBRA(5)

                       

Value of unvested shares that would be accelerated(6)

       

—TRSU

                1,513,833 (7)      1,513,833 (7) 

—PRSU

                3,027,643 (8)      1,513,810 (8) 

Other(12)

    16,346       16,346       66,346       16,346  

Michael Schwindle

       

Cash

    1,336,453 (9)            1,756,453 (10)      286,453 (11) 

COBRA(5)

    20,256             20,256       20,256  

Value of unvested shares that would be accelerated(6)

       

—TRSU

                661,908 (7)      661,908 (7) 

—PRSU

                882,533 (8)      441,251 (8) 

Other(12)

    9,591       9,591       39,591       9,591  

Mark C. Dely

       

Cash

    1,228,721 (9)            1,588,721 (10)      328,721 (11) 

COBRA(5)

    13,804             13,804       13,804  

Value of unvested shares that would be accelerated (6)

       

—TRSU

                679,461 (7)      679,461 (7) 

—PRSU

                578,059 (8)      354,415 (8) 

Other(12)

    11,250       11,250       41,250       11,250  

Alison Hiatt

       

Cash

    997,164 (9)            1,297,164 (10)      247,164 (11) 

COBRA(5)

    12,339             12,339       12,339  

Value of unvested shares that would be accelerated(6)

       

TRSU

                163,605 (7)      163,605 (7) 

PRSU

                218,132 (8)      109,054 (8) 

Other(12)

    7,308       7,308       37,308       7,308  

John Enwright(13)

       

Cash

    935,634                    

COBRA

    20,256                    

Value of unvested shares that would be accelerated (6)

       

—TRSU

                       

—PRSU

                       

Other

    33,784                    
(1)

As none of the NEOs met or exceeded the age of 65, the normal retirement age of the Company, as of February 3, 2024, severance benefits due to retirement were excluded.

(2)

Pursuant to her employment agreement, upon a termination by the Company without cause or by Ms. Ardrey for good reason, she is entitled to a cash payment equal to any bonus for the prior fiscal year which has been earned but is unpaid, a lump sum payment equal to two times the sum of her annual base salary rate plus her target bonus in the year of termination, and a pro rata portion of the amount of bonus that she would have received for the year in which her employment terminated.

(3)

Pursuant to her employment agreement, upon a termination in anticipation of, upon or within 24 months following a change in control, Ms. Ardrey is entitled to a cash payment equal to any bonus for the prior fiscal year which has been earned but is unpaid, a lump sum payment equal to three times the sum of her annual base salary rate plus her target bonus in the year of termination and a pro rata portion of the amount of bonus that she would have received for the year in which her employment terminated.

(4)

Pursuant to her employment agreement, upon a termination for death or disability, Ms. Ardrey is entitled to a cash payment equal to any bonus for the current fiscal year which has been earned but is unpaid.

(5)

COBRA continuation coverage reflects monthly payments made by the Company for a period of 18 months in the case of Ms. Ardrey and 12 months in the case of the other NEOs and is based upon coverage elections in place as of February 3, 2024. This amount assumes the NEO elects COBRA coverage and is eligible to participate in COBRA for the payment period.

 

  VERA BRADLEY, INC.   2024 Proxy Statement   33


Table of Contents

Executive Compensation

 

 

 

(6)

Based on the closing price of $7.84 of the Company’s common shares on February 2, 2024 (the last trading day prior to the end of the fiscal year) as reported by The NASDAQ Stock Market.

(7)

Figure includes grants of TRSUs which would vest in the event of death, disability, or upon a change in control.

(8)

Figure includes grants of PRSUs which would vest in the event of death, disability, or upon a change in control. For completed performance years, the number of shares reflects earned shares based on actual performance to goal. For incomplete performance years, upon a change in control, the shares above are reflected at target. In the event of death or disability, the grants would be prorated based on the number of full fiscal months in which the executive provided service during the performance period.

(9)

Pursuant to the Severance Plan (as described below), upon a termination by the Company without cause or by the executive for good reason, he or she is entitled to a cash payment equal to a pro rata portion of the amount of bonus that he or she would have received for the year in which his or her employment terminated, and a lump sum payment equal to one and one-quarter times the sum of his or her annual base salary rate plus target bonus in the year of termination. For purposes of this table, the pro rata bonus has been assumed at the actual fiscal 2024 bonus payout.

(10)

Pursuant to the severance plan, upon a termination in anticipation of, upon or within 24 months following a change in control, the executive is entitled to a cash payment equal to any bonus for the prior fiscal year which has been earned but is unpaid, a lump sum payment equal to one and three-quarters times the sum of his or her annual base salary rate plus target bonus in the year of termination, and a payment equal to his or her target bonus in the year of termination prorated for the number of weeks the executive was employed for the fiscal year. For purposes of this table, the current year bonus has been assumed at the actual fiscal 2024 bonus payout.

(11)

Pursuant to the severance plan, upon a termination for death or disability, the executive or his or her estate is entitled to a cash payment equal to a pro rata portion of the amount of bonus that he or she would have received for the year in which his or her employment terminated. For purposes of this table, the current year bonus has been assumed at the actual fiscal 2024 bonus payout.

(12)

Figure includes accrued vacation of 40 hours for Ms. Ardrey, 38 hours for Mr. Schwindle, 160 hours for Mr. Enwright, 52 hours for Mr. Dely, and 38 hours for Ms. Hiatt. In the event of a change in control, this amount also includes a maximum of $50,000 of outplacement services for Ms. Ardrey and $30,000 for all other NEOs.

(13)

Mr. Enwright’s employment from the Company was terminated on June 30, 2023 and the figures presented represent actual benefits received. His cash severance payment was $823,485, a pro rata portion of the amount of the annual bonus, as a result of Mr. Enwright’s termination date occurring after the last day of the first fiscal quarter, was $112,149, and his accrued vacation payment was $33,784. The value of Mr. Enwright’s COBRA benefit was $20,256 for 12 months of his termination date.

 

34  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Executive Compensation

 

 

 

SEVERANCE AGREEMENTS AND ARRANGEMENTS

 

Chief Executive Officer. Under her Employment Agreement, if the Company terminates Ms. Ardrey’s employment without cause or Ms. Ardrey terminates her employment for good reason (each as defined in the Employment Agreement), Ms. Ardrey will be entitled to (i) any bonus earned in the fiscal year prior to the employment termination that has not yet been paid, (ii) a pro rata portion of the amount of bonus, if any, that he would have received for the year in which his employment terminated; (iii) a lump sum payment equal to two times the sum of her (a) annual base salary rate and (b) target bonus for the fiscal year of termination; (iv) immediate accelerated full vesting of the time-based RSUs under the Sign-On Award and immediate accelerated vesting of the time-based vesting applicable to the performance-based portion of the RSUs under the Sign-On Award pending satisfaction of the performance vesting criteria, as well as full payment of the Sign-On Bonus; and (vi) monthly cash reimbursement of COBRA premiums for a period of eighteen months. If the Company terminates Ms. Ardrey’s employment without cause or Ms. Ardrey terminates her employment for good reason and such termination is within 24 months after a change in control of the Company, Ms. Ardrey will receive, in addition to the payments and benefits described in the preceding sentence, an additional lump sum payment equal to the sum of her (a) annual base salary rate and (b) target bonus for the fiscal year of termination, in exchange for her continued compliance with the restrictive covenants set forth in the Employment Agreement after the change in control and reimbursement for outplacement assistance up to a maximum amount of $50,000. If the payments and benefits to Ms. Ardrey under the Employment Agreement, together with all other amounts payable to her following a change in control (the “Total Payments”), would be subject to an excise tax under the provisions of Code Section 4999 (the “Excise Tax”), then Ms. Ardrey will receive either (i) the Total Payments or (ii) the Total Payments as reduced so that the amount of the Total Payments (after reduction) is $1.00 less than the amount that would cause the payments to be subject to the Excise Tax; whichever of the two would provide her with a greater after-tax value of amounts received.

If Ms. Ardrey’s employment is terminated by death or disability, Ms. Ardrey or her estate will be entitled to: (i) any bonus that has been earned but not paid; (ii) a prorated bonus, if any, Ms. Ardrey would have received for the year in which her employment terminated; (iii) the Sign-On Bonus and the Sign-On Award; and (iv) in the case of termination due to disability, reimbursements of COBRA premiums.

Severance Plan. On May 21, 2014, the Committee adopted the Vera Bradley, Inc. 2014 Executive Severance Plan (the “Severance Plan”). The Severance Plan was amended on May 30, 2018 to remove the reference to Executive Vice President and Senior Vice President position levels and replacing it with an executive officer level only. With the exception of Ms. Ardrey, all NEOs are participants in the Severance Plan, in addition to other officers of the Company.

Under the Severance Plan, if the Company terminates a participant’s employment without cause or the participant terminates his or her employment for good reason (each as defined in the Severance Plan), the participant will be entitled to (i) any bonus earned in the fiscal year prior to the employment termination that has not yet been paid; (ii) a pro rata portion of the amount of the target bonus (as defined in the Severance Plan), if any, that he or she would have received for the year in which his or her employment terminated; (iii) a lump sum payment equal to one and one-quarter times the sum of his or her (a) annual base salary rate and (b) target bonus for the fiscal year of termination; and (v) monthly cash reimbursement of COBRA premiums for a period of twelve months.

If the Company terminates a participant’s employment without cause or a participant terminates his or her employment for good reason and such termination is within 24 months after a change in control (as defined in the Severance Plan) of the Company, the participant will receive, (i) any bonus earned in the fiscal year prior to the employment termination that has not yet been paid; (ii) a pro rata portion of the target bonus for the year in which his or her employment terminated; (iii) a lump sum payment equal to one and three-quarter times the sum of his or her (a) annual base salary rate and (b) target bonus for the fiscal year of termination; and (v) monthly cash reimbursement of COBRA premiums for a period of twelve months.

If a participant’s employment is terminated by death or disability, the participant or his or her estate will be entitled to receive (i) any bonus earned in the fiscal year prior to the employment termination that has not yet been paid; (ii) a pro rata portion of the amount of bonus (as defined in the Severance Plan), if any, that he or she would have received for the year in which his or her employment terminated; and (iii) in the case of termination due to disability, monthly cash reimbursement of COBRA premiums for a period of twelve months.

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   35


Table of Contents

Executive Compensation

 

 

 

The Severance Plan contains customary non-competition and confidentiality provisions. During the period of each participant’s employment and for a period of one year following termination of employment for any reason, the participants may not associate, directly or indirectly, as an employee, officer, director, agent, partner, owner, stockholder, representative, consultant, or vendor with, for or on behalf of any competitor (as defined below), unless the Committee has approved such an association. For purposes of the Severance Plan, the term “competitor” means any entity, company, enterprise, or group which engages in the sale of duffel bags, backpacks, totes, or handbags and whose annual sales revenue is less than three hundred million dollars or those added to a list which the Committee reviews biannually. In addition, participants may not solicit or accept if offered the services of any person who is a then-current employee of the Company (or was an employee of the Company during the year preceding such solicitation) to terminate employment or an engagement with the Company, not including any general, non-targeted advertising or agree to hire any then-current employee (or an individual who was an employee of the Company during the year preceding such hire) of the Company into employment with the participant or any company, individual or other entity.

Treatment of Equity Awards

Grants under the 2020 Equity and Incentive Plans

Generally. Except in the case of a change in control or the executive’s death, disability, or retirement, upon an executive’s termination in service from the Company all unearned and unvested grants of both time-based and performance-based RSUs will be forfeited.

Change in Control. Under the terms of the grant agreements, all unvested performance-based RSUs will vest in the event of a change in control. With respect to performance years that have been completed at the time of a change in control, unvested performance-based RSUs will be earned and vested to the extent of actual performance for such performance year. With respect to performance years that have not been completed at the time of a change in control, performance-based RSUs will be deemed to be earned at the target level, with any such earned units becoming fully vested.

With respect to time-based RSUs, upon a change in control that portion of any outstanding award that is not yet vested as of the date of the change in control will become immediately and fully vested and paid immediately prior to the change in control.

The Incentive Plan defines a “change in control” to mean the occurrence of any one or more of the following: (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Exchange Act and the rules of the Securities and Exchange Commission as in effect on the date of the award), other than: (i) Barbara Baekgaard, Patricia Miller, Michael Ray and Kim Colby and their respective heirs and descendants and any trust established for their benefit; (ii) the Company or a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company; or (iii) any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its affiliates, of securities of the Company representing more than twenty-five percent (25%) of the combined voting power of the Company’s then outstanding securities; (b) the occupation of a majority of the seats (other than vacant seats) on the board of directors by persons who were neither (i) nominated by the board nor (ii) appointed by directors so nominated; or (c) the consummation of (i) an agreement for the sale or disposition of all or substantially all of the Company’s assets or (ii) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation or reorganization that results in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation or reorganization.

Death or Disability. Under the terms of the grant agreements, all unvested performance-based RSUs will vest in the event that an executive’s service with the Company terminates as a result of death or disability during the performance period, (i) with respect to performance years that have been completed at the time of death or disability, each tranche will be earned only to the extent of actual performance in the performance year; and (ii) with respect to performance years that have not been completed at the time of death or disability, each tranche will be deemed to be earned based on the “target” level of performance for such performance year, but prorated based on the number of full fiscal months in which the executive provided service during the performance period.

With respect to time-based RSUs, in the event of the executive’s death or disability, any portion of any

 

 

36  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents

Executive Compensation

 

 

 

outstanding award that is not yet vested as of the date of death or disability shall become immediately and fully vested.

The Incentive Plan states that “disability” may be defined in any employment, consulting, or other agreement between the Company and the executive or, in the absence of such an agreement, “disability” will mean (i) any permanent physical or mental incapacity or disability rendering the Participant unable or unfit to perform effectively the duties and obligations of the executive’s service or (ii) any illness, accident, injury, physical or mental incapacity or other disability, which condition is expected to be permanent or long-lasting and has rendered the executive unable or unfit to perform effectively the duties and obligations of the Participant’s service for a period of at least 180 days in any twelve-consecutive month period (in either case, as determined in the good faith judgment of the Committee). There are no outstanding employment, consulting or other agreements between the Company and any executive which otherwise define the term “disability.”

Retirement. Under the terms of the grant agreements, all unvested performance-based RSUs will vest in the event that an executive’s service with the Company terminates as a result of retirement during the performance period, (i) with respect to performance

years that have been completed at the time of retirement, each tranche will be earned only to the extent of actual performance in the performance year; and (ii) with respect to performance years that have not been completed at the time of retirement, each tranche will be deemed to be earned based on the “target” level of performance for such performance year, but prorated based on the number of full fiscal months in which the executive provided service during the performance period.

With respect to time-based RSUs, in the event of the executive’s retirement, any portion of any outstanding award that is not yet vested as of the date of retirement shall become immediately and fully vested but prorated based on the number of full fiscal months in which the executive provided service.

The Incentive Plan states that “retirement” means a termination of service on or after reaching the age established by the Company as the normal retirement age in any unexpired employment, consulting or other agreement between the executive and the Company, or, if different, a qualified retirement plan sponsored by the Company. There are no outstanding employment, consulting, or other agreements between the Company and any executive which otherwise define the term “retirement.”

 

 

  VERA BRADLEY, INC.   2024 Proxy Statement   37


Table of Contents

Pay Ratio Disclosure

 

 

 

PAY RATIO DISCLOSURE

 

In August 2015, the SEC adopted a rule mandated by section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act that requires most registrants to disclose the ratio of the total annual compensation of their principal executive officer (“PEO”) to the total annual compensation of their median employee. For Ms. Ardrey’s compensation, we utilized her salary and incentive compensation for fiscal 2024 including the stock awards and all other compensation disclosed in the summary compensation table.

In determining the median employee, we included employees other than the PEO who were employed as of December 31, 2021, which is within three months of the Company’s fiscal 2022 year end. There were no changes in the employee population or overall compensation arrangements that we believe would significantly impact the pay ratio disclosure.

In calculating the median employee, we:

 

 

Used gross compensation as reported on each employee’s Form W-2 for calendar year 2021;

 

 

Annualized salaries for part-time and full-time employees who were not employed for the entire 2021 calendar year (but did not annualize temporary and seasonal employees);

 

 

Excluded health care benefits; and

 

 

Excluded employees at non-U.S. locations, which consisted of approximately 25 employees as of the end of calendar year 2021 and represented only approximately 1% of total employees.

Based on our calculations, the median employee was a part-time retail store associate with total annual compensation of $8,884 (calculated under Item 402(c)(2)(x) of Regulation S-K) during fiscal 2024. The total compensation during fiscal 2024 for Ms. Ardrey was $1,976,075 which resulted in a ratio of the PEO compensation to the median employee compensation of 222 to 1.

As an alternative to the SEC required pay ratio, and to provide a look at a pay ratio of PEO compensation based on full-time employment, we annualized the median employee’s compensation and calculated another pay ratio. We did this by determining an effective hourly rate based on the total annual compensation and divided by the hours worked. We then multiplied the hourly rate by 2,080 hours and added any incentive compensation to approximate what the median employee would have earned if they worked full-time for the year. This annualized amount was $37,672. This resulted in a pay ratio of PEO compensation to the median employee compensation of 52 to 1. These ratios are supplemental and voluntarily provided. These ratios should not be used as a substitute for, or in isolation from, the pay ratio calculated in accordance with the rule adopted by the SEC.

The pay ratio reported by other companies may not be comparable to the pay ratio reported by us, as the method, assumptions, adjustments, or estimates used to calculate the median employee may be different from those used by us. In addition, other companies may have different employment and compensation practices than we do.

 

 

38  2024 Proxy Statement   VERA BRADLEY, INC.  


Table of Contents
Pay Versus Performance Disclosure
 
 
 
PAY VERSUS PERFORMANCE DISCLOSURE
Under rules adopted pursuant to the Dodd-Frank Act, we are required to disclose certain information about the relationship between the compensation actually paid to our named executive officers and certain measures of company performance. The material that follows is provided in compliance with these rules; however, additional information regarding our compensation philosophy, the structure of our performance-based compensation programs, and compensation decisions made this year is described above in our “Executive Compensation Discussion and Analysis.”
The following table contains information pertaining to executive compensation actually paid and certain financial performance of the Company for our Principal Executive Officers (PEOs) and other NEOs
(Non-PEO
NEOs) who served during the relevant fiscal years calculated in accordance with Item 402(v) of SEC Regulation
S-K.
The pay versus performance information herein was not considered in making compensation decisions for the years presented.
 
                   
                           
Value of Initial Fixed
$100 investment based
on:
             
Fiscal Year
 
Summary
Compensation
Table Total
for PEO, Ms.
Ardrey
   
Compensation
Actually
Paid (“CAP”)
to PEO,
Ms. Ardrey
   
Summary
Compensation
Table Total for
PEO,
Mr. Wallstrom
   
Compensation
Actually Paid
(“CAP”) to PEO,
Mr. Wallstrom
   
Average
Summary
Compensation
Table Total for
Non-PEO

NEOs
(1)
   
Average
Compensation
Actually Paid
(“CAP”) to
Non-PEO

NEOs
(1)
   
Total
Shareholder
Return
(“TSR”)
   
Peer Group
Total
Shareholder
Return
(2)
   
GAAP
Net
(Loss)
Income
($ in
millions)

(3)
   
Adjusted
EPS
($)
 
2024
 
$
1,976,075
 
 
$
3,404,946
 
 
 
N/A
 
 
 
N/A
 
 
$
1,463,940
 
 
$
1,528,470
 
 
$
92.76
 
 
$
58.68
 
 
$
7.8
 
 
 
$0.55
(4)
 
2023
 
 
3,132,637
 
 
 
4,447,579
 
 
 
6,137,174
 
 
 
3,394,118
 
 
 
1,165,116
 
 
 
561,342
 
 
 
65.67
 
 
 
71.83
 
 
 
(59.7)
 
 
 
0.24
(5)
 
2022
 </