UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

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Preliminary Proxy Statement

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Definitive Proxy Statement

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Soliciting Material under §240.14a-12

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Oxford Industries, Inc.

(Name of Registrant as Specified In Its Charter)

   

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

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NOTICE OF 2022 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 14, 2022

Notice is hereby given that the 2022 Annual Meeting of Shareholders of Oxford Industries, Inc. will be held on Tuesday, June 14, 2022 at 2:00 p.m., Eastern Time. This year’s annual meeting will once again be conducted as a virtual meeting via live audio webcast. There will not be a physical location for the annual meeting, and shareholders will not be able to attend the meeting in person. Shareholders may access and participate in the annual meeting by visiting www.meetnow.global/MSPW2TH. At the meeting, shareholders will consider and vote on the following matters:

(1)

To elect as directors three Class III nominees, as named in the accompanying proxy statement, to serve until the 2025 Annual Meeting of Shareholders;

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(2)

To approve the Oxford Industries, Inc. Long-Term Stock Incentive Plan, as amended and restated, to, among other things, authorize 500,000 additional shares of common stock for issuance under the plan;

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(3)

To ratify the selection of Ernst & Young LLP to serve as our independent registered public accounting firm for fiscal 2022;

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(4)

To approve, by a non-binding, advisory vote, the compensation of our named executive officers; and

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(5)

To transact any other business that properly comes before the annual meeting or any adjournment or postponement.

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Shareholders of record as of the close of business on April 14, 2022 will be entitled to notice of and to vote at the annual meeting or at any adjournment or postponement of the annual meeting.

We have designed the format of the annual meeting to ensure that shareholders have the opportunity to participate in the meeting. The annual meeting will include a live Q&A session during which members of our executive leadership team, including the Chairman of the Board, will be available to answer questions submitted during the meeting, as time permits. To ensure the annual meeting is conducted in a manner that is fair to all shareholders, the Chairman (or such other person designated by our Board) may exercise discretion in recognizing questions, the order in which questions are answered and the amount of time devoted to questions.

We have elected to provide access to our proxy materials on the Internet under the U.S. Securities and Exchange Commission’s “notice and access” rules. A Notice of Internet Availability of Proxy Materials will be mailed to shareholders beginning on or about May 4, 2022. This proxy statement and our 2021 Annual Report on Form 10-K may be accessed by all shareholders at http://www.edocumentview.com/oxford. Any shareholder may request a printed copy of the proxy materials by following the instructions set forth in the Notice of Internet Availability.

Your vote is important, and you are encouraged to vote as soon as possible. You may vote using any of the following methods: (1) on the Internet; (2) by requesting a paper copy of the proxy materials and submitting your vote via a toll-free telephone number or by signing, dating and mailing a completed proxy card; or (3) electronically during the annual meeting. Please review the instructions on each of your voting options described in the Notice of Internet Availability. If your shares are held in an account with a broker, your broker will vote your shares for you if you provide voting instructions. In the absence of instructions, your broker can only vote your shares on limited matters.

The live audio webcast of the annual meeting will begin promptly at 2:00 p.m., Eastern Time. We encourage shareholders to access the webcast in advance of the designated start time. Please see “Information About the Meeting and Voting” in the accompanying proxy statement for additional information about how to participate in the annual meeting.

 

 

TABLE OF CONTENTS

 

 

 

 

999 Peachtree Street, N.E., Suite 688
Atlanta, Georgia 30309

PROXY STATEMENT

For 2022 Annual Meeting of Shareholders
To Be Held on June 14, 2022

Introduction

This proxy statement contains information relating to the 2022 Annual Meeting of Shareholders of Oxford Industries, Inc. to be held on Tuesday, June 14, 2022, beginning at 2:00 p.m., Eastern Time. The annual meeting will be conducted as a virtual meeting, accessible via live audio webcast at www.meetnow.global/MSPW2TH.

We have elected to provide access to our proxy materials on the Internet. Accordingly, we are mailing a Notice of Internet Availability of Proxy Materials to our shareholders instead of a paper copy of our proxy materials. By providing our proxy materials on the Internet, we believe that we are increasing our shareholders’ ability to access the information they need while at the same time reducing the cost and environmental impact of our annual meeting. The Notice of Internet Availability contains instructions for accessing our proxy materials and submitting a proxy on the Internet. The Notice of Internet Availability also contains instructions for requesting a paper copy of our proxy materials. We will begin mailing the Notice of Internet Availability on or about May 4, 2022 to all holders of our common stock, par value $1.00 per share, entitled to vote at the annual meeting. A similar notice will be sent by brokers and other nominees to beneficial owners of shares of which they are the shareholder of record.

This proxy statement and our 2021 Annual Report on Form 10-K are available at http://www.edocumentview.com/​oxford. We will mail any shareholder a copy of the proxy materials free of charge upon request, but you will not receive a printed copy of the proxy materials unless you request one. You may request to receive a copy of proxy materials by following the instructions set forth in the Notice of Internet Availability.

PROPOSALS FOR SHAREHOLDER CONSIDERATION

 

 

Proposal No. 1: Election of Directors

Board of Directors

In accordance with our charter, our directors are divided into three classes that are as nearly equal in size as possible. Directors in each class are elected to three-year terms, with director classes serving staggered terms. A director holds office until the annual meeting of shareholders held in the year during which the director’s term ends and until his or her successor is elected and qualified. When the number of directors is increased, newly appointed directors are required to stand for election at the next annual meeting.

Bylaws Relating to Retirement

Pursuant to our bylaws, an individual becomes ineligible for election or appointment as a director: (1) for any employee director (i.e., someone who concurrently serves as an employee of our company and as a member of our Board), other than an individual who has at any time served as our Chief Executive Officer, following the end of our fiscal year during which such individual reaches the age of 65; and (2) for any other individual, following the end of our fiscal year during which such individual reaches the age of 72.

Director Nominations

Our Board currently consists of three Class I directors (Messrs. Dennis M. Love, Clyde C. Tuggle and E. Jenner Wood III), four Class II directors (Messrs. Thomas C. Chubb III, John R. Holder, Stephen S. Lanier and Clarence H. Smith) and four Class III directors (Ms. Helen Ballard, Ms. Virginia A. Hepner, Mr. Thomas C. Gallagher and Mr. Milford W. McGuirt).

At our 2022 annual meeting, the terms of our Class III directors will expire. Our Board, on the recommendation of our Nominating, Compensation & Governance Committee, or NC&G Committee, has unanimously nominated Ms. Helen Ballard, Ms. Virginia A. Hepner and Mr. Milford W. McGuirt for election at our annual meeting as Class III directors, each to serve for a three year term expiring in 2025 and until his or her respective successor is elected and qualified.

The term for Mr. Thomas C. Gallagher also expires at the end of the meeting. Mr. Gallagher has served on our Board since 2013, having previously served as a member of our Board from 1991 until 2007. Because Mr. Gallagher reached the retirement age of 72 prior to the beginning of our current fiscal year, he is no longer eligible for election as a director under our bylaws. Therefore, Mr. Gallagher will not seek re-election as a director at the annual meeting. We thank Mr. Gallagher for his many years of service to our company.

Following Mr. Gallagher’s retirement, there will be a vacancy on our Board. Our Board may choose to (1) immediately fill the vacancy, (2) allow the vacancy to remain open until a suitable candidate is identified and elected or (3) amend our bylaws to reduce the number of directors serving on our Board.

The terms of our Class I directors expire in 2023, and the terms of our Class II directors expire in 2024. Each of our Class I and Class II directors is currently expected to remain in office for the remainder of his or her current term.

Required Vote

In an uncontested election at an annual meeting of shareholders, our bylaws require that each director be elected by a majority of the votes cast with respect to such director (number of shares voted “for” a director must exceed the number of votes cast “against” that director). In accordance with our bylaws, in order for a shareholder to have nominated a director for consideration at the 2022 annual meeting, we must have received the nomination not later than the close of business on March 17, 2022. We have not received a shareholder nomination for a director for consideration at the 2022 annual meeting. Accordingly, the election of directors at the 2022 annual meeting is an uncontested election.

Under Georgia law, in an uncontested election, if a nominee who is already serving as a director is not elected, the director would continue to serve on our Board as a “holdover director.” Under our bylaws, any holdover director who fails to receive a majority of the votes cast must offer to tender his or her resignation to our Board. Our Board, in consultation with any of its committees so designated, would then determine whether to accept or reject the resignation, or whether other action should be taken. Under our bylaws, our Board is required to act on the resignation and publicly disclose its decision and the rationale behind it within 90 days from the date the election results are certified.

Abstentions and broker non-votes will have no effect on the vote for the election of directors. Proxies cannot be voted for a greater number of persons than the number of nominees named.

Each nominee has consented to serve if elected, and our Board has no reason to believe that any of the nominees will be unable or unwilling to serve if elected. If a nominee becomes unwilling or unable to serve prior to the annual meeting, then at the recommendation of our Board: (1) proxies will be voted for a substitute nominee selected by or at the direction of our Board; (2) the vacancy created by the inability or unwillingness of a nominee to serve will remain open until filled by our Board; or (3) our bylaws may be amended to reduce the number of directors serving on our Board.

 

2   2022 PROXY STATEMENT

 

Recommendation of our Board of Directors

OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF MS. HELEN BALLARD, MS. VIRGINIA A. HEPNER AND MR. MILFORD W. MCGUIRT AS A CLASS III DIRECTOR.

Proposal No. 2: Approval of Oxford Industries, Inc. Long-Term Stock Incentive Plan, as Amended and Restated

General

We are asking shareholders to approve the Oxford Industries, Inc. Long-Term Stock Incentive Plan, as amended and restated (which we refer to as the “LTIP”). The purpose of the LTIP is to promote our long-term financial success and increase shareholder value by providing equity-based compensation opportunities for our key employees and non-employee directors. We believe that equity-based awards are a competitive necessity in our industry and are essential to our continued ability to recruit and retain the caliber of individuals needed to successfully oversee and execute our strategy.

The LTIP serves these objectives and our shareholders’ interests by making equity-based awards available for grant to eligible participants in the form of (i) stock options, (ii) stock appreciation rights (“SARs”), (iii) restricted shares of our common stock, (iv) restricted share units (“RSUs”) or (v) other stock-based awards, in each case, together with related rights and interests therein.

Recognizing that, generally, to deliver a given long-term incentive award value, stock options require more shares than full-value awards and to further ensure that LTIP participants share in the appreciation and depreciation of the value of our common stock in line with the interests of our shareholders, since 2004, we have exclusively utilized service-based and performance-based, full-value awards (i.e., restricted shares and RSUs) for equity-based compensation and would currently expect that approach to continue.

Amendments to the LTIP

On March 21, 2022, our Board voted to amend and restate the LTIP, subject to shareholder approval at this year’s annual meeting, to, (i) increase by 500,000 the number of shares of common stock authorized for issuance under the LTIP, (ii) remove and delete certain references to Section 162(m) of the Internal Revenue Code (which we refer to as the “Code”) rendered inapplicable by The Tax Cuts and Jobs Act of 2017, (iii) add provisions for the potential grant of “other stock-based awards” pursuant to the LTIP and (iv) make certain other non-material amendments.

Certain of the proposed changes to the LTIP do not require shareholder approval. Accordingly, if shareholders do not approve Proposal No. 2, these amendments to the LTIP approved by our Board will become effective; however, the increase in the number of shares of common stock authorized for issuance under the LTIP will not.

History of the LTIP

Certain milestones of the LTIP are as follows:

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The LTIP was originally adopted by our Board on July 27, 2004, subject to approval of our shareholders.

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The LTIP became effective upon approval by our shareholders on October 4, 2004.

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The LTIP was amended by our Board on August 3, 2006, subject to shareholder approval, to, among other things, increase by 500,000 shares a sublimit on the number of shares of our common stock that could be issued under the LTIP free of a “substantial risk of forfeiture” or in satisfaction of RSUs awarded under the LTIP.

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The LTIP was again amended by our Board on September 26, 2006, prior to our 2006 annual meeting, to eliminate various successor stock option plans and provide for the LTIP to serve as our company’s sole equity-based compensation plan (with the exception of our employee stock purchase plan, which is available to our eligible part-time and full-time employees in the United States on a non-discriminatory basis).

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Our Board’s August 3, 2006 amendment to the LTIP was approved by our shareholders on October 10, 2006.

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The LTIP was amended by our Board on March 26, 2009, subject to shareholder approval, to (1) increase by 1,000,000 shares the number of shares of our common stock that can be granted to participants over the life of the LTIP and (2) remove all sublimits on the number of shares of our common stock that could be issued under the LTIP free of a “substantial risk of forfeiture” or in satisfaction of RSUs awarded under the LTIP.

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Our Board’s March 26, 2009 amendments to the LTIP were approved by our shareholders on June 15, 2009.

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Our Board approved certain non-material amendments to the LTIP on March 27, 2014.

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Our shareholders reapproved the LTIP on June 18, 2014 to preserve the tax deductibility of qualifying performance-based awards pursuant to Section 162(m) of the Code.

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2022 PROXY STATEMENT   3

 

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The LTIP was amended by our Board on March 24, 2015 to, among other things, (1) establish minimum vesting periods for certain awards under the plan and (2) eliminate liberal share recycling provisions previously included in the plan.

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Notably and as reflected above, (i) the LTIP remains our company’s sole equity-based compensation plan and (ii) we have not increased the number of shares available for issuance under the LTIP since 2009.

Shares Available for Issuance under the LTIP

Subject to shareholder approval of this proposal, the total number of shares authorized for issuance over the life of the LTIP is 2,500,000 shares. Assuming the effectiveness of the proposed amendment, as of April 14, 2022, there would have been an aggregate of 684,108 shares of our common stock available for issuance under the LTIP (assuming the vesting of all then outstanding unvested restricted shares and service-based RSUs, as well as the grant at target performance of all shares of our common stock that could be granted pursuant to outstanding performance-based RSU awards). As of April 29, 2022, the closing price of our common stock was $89.60 per share.

Securities Authorized for Issuance under Equity Compensation Plans

Certain additional information concerning securities authorized for issuance under our equity compensation plans as of January 29, 2022, consisting of the LTIP and our employee stock purchase plan, is presented in the “Equity Compensation Plan Information” section of this proxy statement.

Award Limits

Under the LTIP, an individual may not receive awards representing more than 300,000 shares of our common stock in any one calendar year. In addition, the aggregate number of shares issued under the LTIP upon the exercise of incentive stock options may not exceed 200,000.

Administration and Eligibility

Our NC&G Committee (or another committee appointed by our Board) administers the LTIP. Pursuant to its charter, our NC&G Committee is to be comprised of at least three directors, each of whom must be independent under the applicable NYSE listing standards and a “non-employee” director within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934.

In its capacity as plan administrator, our NC&G Committee determines which participants are granted awards, the type of each award granted and the terms and conditions of each award. Our NC&G Committee also has full power and authority to interpret and construe the LTIP and any associated award agreements. Any action or determination by our NC&G Committee is final, binding and conclusive.

With respect to each award granted under the LTIP, we have entered into and will continue to enter into a written or electronic award agreement with the participant which describes the terms and conditions of the award, including: (i) the type of award and when and how it may be exercised or earned; (ii) any exercise price associated with the award; (iii) how the award will or may be settled; and (iv) any other applicable terms and conditions affecting the award.

Employees of our company and our subsidiaries and non-employee members of our Board may be selected by our NC&G Committee to receive benefits under the LTIP. As of April 14, 2022, approximately 4,800 employees and 10 non-employee directors were eligible to participate in the LTIP.

Share Usage and Dilution

Assuming the effectiveness of the proposed amendment to the LTIP to add an additional 500,000 shares available for future issuance, as of April 14, 2022, there would have been an aggregate of 684,108 shares of our common stock available for issuance under the LTIP (assuming the vesting of all then outstanding unvested restricted shares and service-based RSUs, as well as the issuance at target performance of all shares of our common stock that could be issued pursuant to outstanding performance-based RSU awards).

 

4   2022 PROXY STATEMENT

 

Dilution (aka Overhang)

The following table illustrates the potential dilutive impact to our shareholders of the LTIP, after giving effect to the proposed amendments, which we believe is below or within industry benchmarks:

(1)

The number of shares subject to currently outstanding awards assumes the issuance at target performance of all shares of our common stock that could be issued pursuant to outstanding performance-based RSU awards. If our actual performance results in awards above or below target performance, those results would impact the number listed in the table as available for future awards on a one-for-one basis and have no impact on the dilution calculation or the dilutive impact of the LTIP.

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Burn Rate

The following tables provide information regarding our NC&G Committee’s usage of the LTIP in the last three fiscal years (i.e., burn rate) based on both (i) performance-based awards at the time of approval (assuming target performance) and (ii) the actual number of shares earned based on actual performance under performance-based awards following the conclusion of the applicable performance period:

(1)

“Performance-Based Restricted Shares” reflects the number of shares that would be earned pursuant to performance-based equity awards approved during the relevant fiscal year (at target performance based on our earnings per share during a one-year performance period).

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(2)

“Performance-Based RSU Awards” reflects the number of shares that would be issued pursuant to performance-based equity awards approved during the relevant fiscal year (at target performance based on our relative total shareholder return during the applicable three-year performance period).

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(3)

Reflects basic weighted average number of shares outstanding during the applicable period.

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(4)

Burn rate = number of shares awarded (as set forth in the table) / weighted average number of shares outstanding.

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(5)

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(1)

“Performance-Based Restricted Shares” reflects the number of restricted shares actually earned pursuant to performance-based equity awards approved during the prior fiscal year (based on our actual earnings per share during the preceding fiscal year). In fiscal 2020, our NC&G Committee approved performance-based equity awards based on our relative total shareholder return over a three year performance period; accordingly, no awards are listed for fiscal 2021 given actual performance is undeterminable at this time.

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(2)

Reflects basic weighted average number of shares outstanding during the applicable period.

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2022 PROXY STATEMENT   5

 

(3)

Burn rate = number of shares awarded (as set forth in the table) / weighted average number of shares outstanding.

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(4)

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We believe that our NC&G Committee’s recent use of the LTIP as a vehicle for rewarding and incentivizing key employees to deliver long-term value to our shareholders reflects a conservative and prudent use of equity-based compensation, as reflected in the burn rate metrics noted above. While the number of shares available for issuance pursuant to the LTIP in future years, after giving effect to the proposed amendment, may provide several additional years of equity-based awards based on our recent burn rate, our Board believes that it is appropriate to request additional shares for issuance pursuant to the LTIP at this time given the difficulty in projecting the number of actual shares that will be earned based on currently outstanding (and potential future) awards for which performance is based on a multi-year performance period.

Types of Awards

The following is a summary of the types of awards that may be made under the LTIP:

Stock Options

Under the LTIP, our NC&G Committee may grant stock options (which may be incentive stock options under Section 422 of the Code or non-incentive stock options) that entitle the optionee to purchase shares of our common stock at a price equal to or greater than the fair market value of the stock on the date of grant. The option may specify that the exercise price is payable by the optionee (i) in cash, (ii) by the transfer to our company of unrestricted shares of our common stock, (iii) with any other legal consideration the NC&G Committee may deem appropriate or (iv) any combination of these. Except as specified under the award by the NC&G Committee in the event of a change of control or similar event, or the participant’s termination of employment due to death, disability or retirement, no stock option may be exercised earlier than the first anniversary of the grant date. In addition, no stock option may be exercised more than 10 years from the grant date. Each grant may specify a period of continuous employment with our company or any of our subsidiaries (or in the case of a non-employee director, service on our Board) that is necessary before the stock option or any portion thereof will become exercisable.

SARs

Our NC&G Committee may grant SARs that entitle the participant to receive a payment equal to a percentage (not exceeding 100%) of the difference between the fair market value of our common stock on the grant date and on the date of exercise. The grant may specify that the amount payable to the participant upon exercise of the SAR may be paid (i) in cash, (ii) in shares of our common stock or (iii) any combination of these. Any grant may specify a waiting period before the SARs may become exercisable and permissible dates or periods on or during which the SARs are exercisable. Each grant of a SAR must specify the period of continuous employment of the participant by our company or any of our subsidiaries that is necessary before the SAR or installments thereof may be exercisable. Except as specified under the award by the NC&G Committee in the event of a change of control or similar event, or the participant’s termination of employment due to death, disability or retirement, no SAR may be exercised earlier than the first anniversary of the grant date.

Restricted Share Awards

Our NC&G Committee may authorize grants to participants of restricted shares. An award of restricted shares involves the immediate transfer to a participant of ownership of a specific number of shares in return for the performance of services. The participant is entitled immediately to voting, dividend and other ownership rights in such shares, subject to the discretion of our NC&G Committee. The transfer may be made without additional consideration from the participant. Our NC&G Committee may specify performance objectives that must be achieved for the restrictions to lapse or for the restricted shares to be granted. Restricted shares may be subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code for a period to be determined by our NC&G Committee. At the discretion of our NC&G Committee, any grant or sale of restricted shares may provide for the earlier termination of the risk of forfeiture in the event of a change of control of our company or a similar event or in the event of the participant’s termination of employment due to death, disability or retirement. Except under the foregoing circumstances as approved by our NC&G Committee, restricted shares are subject to a minimum one year vesting period (provided that restricted share awards subject to a performance period may include the performance period as part of the one year minimum vesting period).

RSUs

Our NC&G Committee may authorize grants to participants of RSUs. Each grant may specify one or more performance objectives to be met within a specified period in order for the participant to earn all or some portion of the RSUs. At the discretion of our NC&G Committee, the settlement date for RSU awards may be accelerated in the event of a change of control of our company or a similar event or in the event of the participant’s termination of employment due to death, disability or retirement. Except under the foregoing circumstances as approved by our NC&G Committee, the settlement date for RSUs

 

6   2022 PROXY STATEMENT

 

must be at least one year following the grant date (provided that RSU awards subject to a performance period may include the performance period as part of the one year minimum settlement date). To the extent earned, RSUs will be paid to the participant at the time and in the manner determined by our NC&G Committee in (i) cash, (ii) shares of our common stock or (iii) any combination thereof. Any grant of RSUs may provide for the payment to the participant of dividend equivalents in cash or in additional shares of stock on a current, deferred or contingent basis.

Other Stock-Based Awards

Under the LTIP, as amended by our Board in March 2022, our NC&G Committee would have the right to grant other awards that are valued in whole or in part by reference to, or otherwise based on, shares of common stock, subject to such terms and conditions as our NC&G Committee may determine. At the discretion of our NC&G Committee, the settlement date for other stock-based awards may be accelerated in the event of a change of control of our company or a similar event or in the event of the participant’s termination of employment due to death, disability or retirement. Except under the foregoing circumstances as approved by our NC&G Committee, the settlement date for other stock-based awards must be at least one year following the grant date (provided that other stock-based awards subject to a performance period may include the performance period as part of the one year minimum settlement date). To the extent earned, other stock-based awards will be paid to the participant at the time and in the manner determined by our NC&G Committee in (i) cash, (ii) shares of our common stock or (iii) any combination thereof. Any grant of other stock-based awards may provide for the payment to the participant of dividend equivalents in cash or in additional shares of stock on a current, deferred or contingent basis.

Performance-Based Compensation

Awards granted under the LTIP may be subject to specified performance criteria established by the NC&G Committee. Such performance goals may include, but are not limited to, performance based on one or more of the following criteria:

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EBITDA;

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EBIT;

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net earnings;

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net income;

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operating income;

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earnings per share;

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book value per share;

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return on shareholders’ equity;

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capital expenditures;

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expenses and expense ratio management;

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return on investment;

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improvements in capital structure;

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profitability of an identifiable business unit or product;

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maintenance or improvement of profit margins;

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stock price;

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market share;

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revenues or sales;

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costs;

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cash flow;

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working capital;

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return on (net) assets;

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economic value added;

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gross or net profit before or after taxes;

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objectively determinable goals with respect to service or product delivery, service or product quality, inventory management, customer satisfaction, meeting budgets and/or retention of employees; or

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2022 PROXY STATEMENT   7

 

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total shareholder return or relative total shareholder return.

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Adjustments

The LTIP provides that (i) the NC&G Committee may make appropriate equitable adjustments to the maximum number of shares of our stock available for issuance under, and other sublimits stated in, the plan and (ii) the NC&G Committee shall make appropriate equitable adjustments to the number of shares covered by outstanding awards and the exercise prices and performance measures applicable to outstanding awards, in any case to reflect changes in our capital structure on account of any stock dividend, stock split, recapitalization or other change in capital structure, any merger, consolidation, spin-off, spin-out, split-off, split-up, reorganization or partial or complete liquidation or other distribution of assets of our company or any event constituting an equity restructuring under the Code. These adjustments will be made only to the extent they conform to the requirements of applicable provisions of the Code.

Transferability

Except as provided below, no award under the LTIP may be transferred by a participant other than by will or the laws of descent and distribution, and stock options and SARs may be exercised during the participant’s lifetime only by the participant or, in the event of the participant’s legal incapacity, the guardian or legal representative acting on behalf of the participant. Our NC&G Committee may expressly provide in an award agreement (other than an incentive stock option award agreement) that the participant may transfer the award to a spouse or lineal descendant, a trust for the exclusive benefit of such family members, a partnership or other entity in which all the beneficial owners are such family members or any other entity affiliated with the participant that our NC&G Committee may approve.

Amendment

Our Board may amend the LTIP at any time, except that no amendment or termination may be made without shareholder approval if the amendment would increase the number of shares reserved for issuance and delivery under the plan or otherwise increase the sublimits on (i) the number of shares of our common stock issuable under incentive stock options granted under the LTIP or (ii) the number of shares issuable to any participant in one calendar year. Our NC&G Committee may not reprice any stock option or stock appreciation right or purchase, cancel or buy out an underwater stock option or stock appreciation right, except with shareholder approval.

Duration

The LTIP will remain in effect until terminated by our Board.

United States Federal Income Tax Consequences

The following is a summary of certain material United States federal income tax consequences that generally will arise with respect to awards granted under the LTIP. This summary is based on the federal tax laws in effect as of the date of this proxy statement. Changes to these laws could alter the tax consequences described below. This summary does not constitute tax advice or describe federal employment, state, local or foreign tax consequences. Each LTIP participant is advised to consult with his or her tax advisor concerning the tax implications of participating in the LTIP.

Incentive Stock Options (or “ISOs”)

No taxable income is recognized by a participant on the grant or vesting of an ISO. If a participant exercises an ISO in accordance with its terms and does not dispose of the shares acquired within two years after the date of the grant of the ISO or within one year after the date of exercise, the participant will be entitled to treat any gain related to the exercise of the ISO as a capital gain (instead of compensation income). If a participant holds the shares acquired for at least one year from the exercise date and does not sell or otherwise dispose of the shares for at least two years from the grant date, the participant’s gain or loss upon a subsequent sale will be long-term capital gain or loss equal to the difference between the amount realized on the sale and the participant’s basis in the shares acquired.

If a participant sells or otherwise disposes of the shares acquired without satisfying the required minimum holding period, such disqualifying disposition will give rise to compensation income equal to the excess of the fair market value of the shares acquired on the exercise date (or, if less, the amount realized upon disqualifying disposition) over the participant’s tax basis in the shares acquired.

The rules that generally apply to ISOs do not apply when calculating any alternative minimum tax liability. The rules affecting the application of the alternative minimum tax are complex, and their effect depends on individual circumstances, including whether a participant has items of adjustment other than those derived from ISOs.

 

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Non-Incentive Stock Options

A participant will not have income upon the grant of a non-incentive stock option. A participant will have compensation income upon the exercise of a non-incentive stock option equal to the value of the stock on the day the participant exercised the option less the exercise price. Upon sale of the stock, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the day the option was exercised. This capital gain or loss will be long-term if the participant has held the stock for more than one year and otherwise will be short-term.

SARs

A participant will not have income upon the grant of a SAR. A participant generally will recognize compensation income upon the exercise of a SAR equal to the amount of the cash and the fair market value of any stock received. Upon the sale of the stock, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the day the SAR was exercised. This capital gain or loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.

Restricted Share Awards

A participant will not have income upon the grant of restricted shares unless an election under Section 83(b) of the Code is made within 30 days of the grant date. If a timely Section 83(b) election is made, then a participant will have compensation income equal to the value of the stock on the grant date less the purchase price, if any. When the stock is sold, the participant will have capital gain or loss equal to the difference between the sales proceeds and the value of the stock on the date of grant. If the participant does not make a Section 83(b) election, then when the stock vests, the participant will have compensation income equal to the value of the stock on the vesting date less the purchase price, if any. When the stock is sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the stock on the vesting date. Any capital gain or loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.

RSUs

A participant will not have income upon the grant of an RSU. A participant is not permitted to make a Section 83(b) election with respect to an RSU award. When the stock or cash is distributed with respect to an RSU, the participant will have income in an amount equal to the fair market value of the stock or the amount of cash on the date of distribution less the purchase price, if any. When any such stock is sold, the participant will have capital gain or loss equal to the sales proceeds less the value of the stock previously taxed. Any capital gain or loss will be long-term if the participant held the stock for more than one year and otherwise will be short-term.

Other Stock-Based Awards

The tax consequences associated with any other stock-based award granted under the LTIP will vary depending on the specific terms of the award. Among the relevant factors are whether or not the award has a readily ascertainable fair market value, whether or not the award is subject to forfeiture provisions or restrictions on transfer, the nature of the property to be received by the participant under the award and the participant’s holding period and tax basis for the award or underlying common stock.

Tax Consequences to Us

There will generally be no tax consequences to us for any awards made under the LTIP, except that we may be entitled to a deduction if and when a participant has compensation income. Any such deduction will be subject to the limitations of Section 162(m) of the Code described below.

Section 162(m)

Section 162(m) of the Code generally disallows a tax deduction to publicly-traded companies for compensation, including stock awards, in excess of $1,000,000 for certain “covered employees” in any year. We anticipate that a portion of the compensation expense related to awards under the LTIP will not be deductible for tax purposes.

Section 409A

Section 409A of the Code imposes certain restrictions on amounts deferred under non-qualified deferred compensation plans and a 20% additional tax on amounts that are subject to, but do not comply with, Section 409A. Section 409A includes a broad definition of non-qualified deferred compensation plans, which includes certain types of equity incentive compensation. We intend for awards granted under the LTIP to be exempt from, or otherwise comply with, Section 409A and the Treasury Regulations promulgated thereunder.

 

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New Plan Benefits

No new plan benefits table for the LTIP is included in this proxy statement. Except for the annual stock retainer grant equal to $100,000 to be granted to each of our non-employee directors pursuant to our non-employee director compensation program (which we anticipate may be increased to $110,000 for the fiscal 2022 cycle), the benefits or amounts that may be received by or allocated to participants in the LTIP in future years will be determined in the discretion of our NC&G Committee and, accordingly, the benefits that may be received by or allocated to participants in the LTIP in future years is not presently determinable.

Why We Believe Shareholders Should Vote in Favor of the LTIP, as Amended and Restated

Our Board believes that our success depends, in large part, upon our ability to attract, retain and motivate key employees and non-employee directors and, as discussed in the “Compensation Discussion and Analysis” section of this proxy statement, our equity-based award program is the primary vehicle for offering long-term incentives to our executive officers.

We believe the LTIP includes provisions, or is otherwise subject to various safeguards, that are designed to protect our shareholders’ interests and to reflect compensation and governance best practices, including:

Independent Committee Administration

The LTIP is administered by our NC&G Committee, whose members are independent under the applicable NYSE listing standards, “non-employee” directors within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 and “outside directors” under Section 162(m) of the Code.

No Discounted Awards

No stock option or SAR may be granted with a per share exercise price less than 100% of the fair market value of shares of our common stock on the grant date.

No Repricing of Stock Options or SARs

The LTIP prohibits the repricing of stock options and SARs, or the exchange of underwater stock options and SARs, in any case without shareholder approval.

Limits on Share Recycling

Shares of our common stock withheld to satisfy tax withholding on an award or to pay the exercise price of any award will not be added back to the number of shares available for issuance under the LTIP.

No Tax Gross-Ups

The LTIP does not provide for any tax gross-ups.

No Evergreen Feature

The LTIP does not include an evergreen funding feature under which the shares available for issuance under the LTIP can be automatically replenished.

Minimum Vesting Requirements

All awards under the LTIP must meet minimum one-year vesting requirements, subject to certain limited exceptions detailed in the plan document which may be approved by our NC&G Committee.

Annual Limit on Participant Awards

The LTIP provides for an annual limit on the number of shares that may be granted to an individual participant pursuant to LTIP awards.

Copies of the LTIP

This summary is not a complete description of all of the provisions of the LTIP. The summary is qualified in its entirety by the full text of the LTIP, a copy of which has been attached to this proxy statement as Appendix A (and which copy reflects the proposed amendments described above). Shareholders are encouraged to read the full text of the LTIP.

Required Vote

Approval of the LTIP requires the affirmative vote of at least a majority of the outstanding shares of our common stock present at the annual meeting, in person or by proxy, and entitled to vote on the proposal. Because broker non-votes are

 

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counted as present at the annual meeting for quorum purposes but are not counted as entitled to vote on this proposal, they will have no effect on the vote to approve the LTIP, as amended and restated. Abstentions will have the same effect as a vote against this proposal.

Recommendation of our Board of Directors

OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE OXFORD INDUSTRIES, INC. LONG-TERM STOCK INCENTIVE PLAN, AS AMENDED AND RESTATED.

Proposal No. 3: Ratification of Independent Registered Public Accounting Firm

Independent Registered Public Accounting Firm

Our Audit Committee is responsible for appointing and overseeing Oxford’s independent registered public accounting firm. The Audit Committee has selected Ernst & Young LLP to serve as our independent registered public accounting firm for fiscal 2022, which appointment was ratified by our full Board. Ernst & Young LLP has served as our independent auditors since 2002.

Our Board considers Ernst & Young LLP to be well qualified and recommends that our shareholders vote to approve its selection. Although shareholder ratification of the selection of our independent registered public accounting firm is not required by law, our Board believes soliciting shareholder approval of Ernst & Young LLP’s selection to be a matter of good corporate governance. A representative of Ernst & Young LLP is expected to participate in the annual meeting. The representative will be given the opportunity to make a statement if he or she desires to do so and is expected to be available to respond to appropriate questions from shareholders.

Required Vote

Ratification of the selection of Ernst & Young LLP to serve as our independent registered public accounting firm for fiscal 2022 requires the affirmative vote of at least a majority of the outstanding shares of our common stock present at the annual meeting, in person or by proxy, and entitled to vote on the proposal. Abstentions will have the same effect as a vote against this proposal. If our shareholders do not ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2022, our Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm for fiscal 2022 and/or future years.

Recommendation of our Board of Directors

OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL TO RATIFY ERNST & YOUNG LLP TO SERVE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2022.

Proposal No. 4: Non-Binding, Advisory Vote to Approve Executive Compensation

Executive Compensation

We are asking shareholders to indicate their support for our named executive officer compensation practices, as described in this proxy statement. This “say-on-pay” proposal gives our shareholders the opportunity to express their views on our executive compensation practices. The vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement.

As further described under “Executive Compensation—Compensation Discussion and Analysis,” our executive compensation programs are designed to maintain a strong link between pay and performance for our named executive officers; align our named executive officers’ interests with those of our shareholders by creating a strong focus on stock ownership; and ensure that we are able to attract and retain talented individuals who can deliver excellent business performance.

Proposed Resolution

We are asking our shareholders to vote on the following resolution at the annual meeting:

RESOLVED, that the shareholders approve, on a non-binding, advisory basis, the compensation paid to the Company’s named executive officers as disclosed in this proxy statement, including the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth herein.

Required Vote

Approval of the say-on-pay resolution requires the affirmative vote of at least a majority of the outstanding shares of our common stock present at the annual meeting, in person or by proxy, and entitled to vote on the proposal. Because broker

 

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non-votes are counted as present at the annual meeting for quorum purposes but are not counted as entitled to vote on this proposal, they will have no effect on the vote on the resolution approving executive compensation. Abstentions will have the same effect as a vote against this proposal.

The vote on this say-on-pay proposal is advisory, and therefore the results of this proposal are not binding on our company, our NC&G Committee or our Board. The results of this proposal will not override any decision made by our Board or NC&G Committee. Our Board and our NC&G Committee value the input of our shareholders and to the extent there is any significant vote against this say-on-pay proposal, we will consider our shareholders’ concerns and our NC&G Committee will evaluate whether any actions, in fiscal 2022 or in subsequent years, are appropriate to address those concerns.

Recommendation of our Board of Directors

OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL APPROVING EXECUTIVE COMPENSATION.

 

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CORPORATE GOVERNANCE AND BOARD MATTERS

Directors

Under our articles of incorporation, or charter, our Board must consist of at least nine members, with the specific number fixed by our bylaws, as amended from time to time. Our bylaws have currently set the number of our directors at 11 members, and we currently have 11 members serving on our Board.

Our charter provides that the members of our Board are to be divided into three classes. Our Board currently consists of three Class I directors (Messrs. Dennis M. Love, Clyde C. Tuggle and E. Jenner Wood III), four Class II directors (Messrs. Thomas C. Chubb III, John R. Holder, Stephen S. Lanier and Clarence H. Smith) and four Class III directors (Ms. Helen Ballard, Ms. Virginia A. Hepner, Mr. Thomas C. Gallagher and Mr. Milford W. McGuirt). The terms of our Class III directors expire at the 2022 annual meeting, while the terms of our Class I directors and Class II directors expire in 2023 and 2024, respectively. As further described above under “Proposal No. 1: Election of Directors—Director Nominations,” Mr. Gallagher will retire at the end of our 2022 annual meeting.

Director Nominees

The following sets forth, as of April 14, 2022, certain information concerning our nominees for director, as well as a description of the specific experience, qualifications, attributes and skills that led our Board to conclude that each of these individuals should serve as a director.

Nominees for Class III Director

 

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Continuing Directors

The following sets forth, as of April 14, 2022, certain information concerning our current Class I and Class II directors, whose terms expire in 2023 and 2024, respectively, as well as a description of the specific experience, qualifications, attributes and skills that led our Board to conclude that each of these individuals should serve as a director. Each of our Class I and Class II directors is currently expected to remain in office for the remainder of his or her current term.

 

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Director Skills and Qualifications

The following matrix highlights certain relevant qualifications, skills and experiences of our director nominees and continuing directors. The qualifications summarized in this matrix are not exhaustive, as each of our directors brings a broad array of insights and experiences that serve our Board well. We believe that each of our directors possesses the knowledge and skills necessary to contribute to the effective oversight of our business and operations.

Director Independence

Our Corporate Governance Guidelines provide that we will have a majority of “independent” directors under the New York Stock Exchange’s (“NYSE’s”) listing standards, as determined by the Board, and that, at least annually, our NC&G Committee will review each relationship that exists with a director and his or her related interests for the purpose of determining whether the director is independent. Based in part on our NC&G Committee’s review, our Board annually considers the independence of each of our directors.

At its respective March 2022 meeting, each of our NC&G Committee and full Board considered director independence. As part of this consideration, our NC&G Committee and Board broadly considered all relevant facts and circumstances, including the NYSE’s corporate governance listing standards and all relevant transactions and relationships between each director (including each director’s immediate family members and other affiliates) and our company and/or management to determine whether any relationship might impair the director’s ability to make independent judgments.

Based on this review and consistent with the recommendation of our NC&G Committee, our Board affirmatively determined that all 10 of our non-employee directors (Mses. Ballard and Hepner and Messrs. Gallagher, Holder, Lanier, Love, McGuirt, Smith, Tuggle and Wood) are independent. In evaluating the independence of our directors, our NC&G Committee and Board gave particular consideration to director tenure, overlapping service on various other company boards of directors and personal and familial relationships among current and former executives and directors of our company, deeming none of these relationships material to those individuals’ independence.

Mr. Chubb is currently our Chairman, Chief Executive Officer and President, and therefore not considered an independent director.

Corporate Governance Guidelines; Conduct Policies

Our Board has adopted Corporate Governance Guidelines that set forth certain guidelines for the operation of the Board and its committees. In accordance with its charter, our NC&G Committee periodically reviews and assesses the adequacy of our Corporate Governance Guidelines. As provided under our Corporate Governance Guidelines, our Board annually conducts a self-evaluation, which our NC&G Committee oversees. Our Board has the authority to engage its own advisors and consultants.

Our Board has also adopted a Code of Conduct applicable to all of our directors, officers and employees, as well as an ethical conduct policy that applies to our senior financial officers, specifically our chief executive officer and our chief financial officer. We intend, if applicable, to disclose amendments to our Code of Conduct and our ethical conduct policy for our senior financial officers (other than technical, administrative or other non-substantive amendments) and material waivers of (or failure to enforce) any provisions of these conduct policies (if applicable to any of our directors or executive officers) on our website at www.oxfordinc.com.

Board Meetings and Committees of our Board of Directors

During fiscal 2021, our Board held four meetings and committees of our Board held a total of six meetings. During fiscal 2021, each of our directors attended 100% of the aggregate number of meetings of our Board and of all committees of which the director was a member. Although we do not have a formal policy requiring attendance by directors at our annual meetings

 

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of shareholders, as stated in our Corporate Governance Guidelines, we encourage directors to attend our annual meetings of shareholders. All of our directors attended our 2021 annual meeting.

Our Board has a standing Executive Committee, Audit Committee and NC&G Committee. The following table identifies the members of each of these committees as of April 14, 2022 and the number of meetings (and actions taken by written consent in lieu of meetings) held by each of these committees during fiscal 2021.

*

Independent Director

​

Executive Committee

Our Executive Committee has the power to exercise the authority of the full Board in managing the business and affairs of our company, except certain powers that are reserved to our full Board under Georgia law. In practice, our Executive Committee serves as a means for taking action requiring our Board’s approval between its regularly scheduled meetings.

Audit Committee

The purpose of our Audit Committee is to assist our Board in fulfilling its oversight responsibilities with respect to the following: (1) the integrity of our financial statements, reporting processes and systems of internal controls; (2) our compliance with applicable laws and regulations; (3) the qualifications and independence of our independent registered public accounting firm; and (4) the performance of our internal audit department and our independent registered public accounting firm.

The principal duties and responsibilities of our Audit Committee are set forth in its charter. Pursuant to its charter, our Audit Committee has full access to our books, records, facilities and personnel, as well as the express authority to retain, at our company’s expense, any outside legal, accounting or other advisors that it deems necessary or helpful to the performance of its responsibilities. Pursuant to its charter, our Audit Committee is also charged with reviewing our guidelines and policies with respect to risk assessment and risk management, including cybersecurity risks and major financial risk exposures, and the steps taken by our management to monitor and manage those risks. In addition, our Audit Committee may exercise additional authority prescribed from time to time by our Board.

Our Board annually evaluates the financial expertise and independence of the members of our Audit Committee. Following its review in March 2022, our Board determined that Mr. Holder and Mr. Love are “audit committee financial experts,” as that term is defined by the rules and regulations of the U.S. Securities and Exchange Commission (which we refer to as the “SEC”), and that all of the members of our Audit Committee are financially literate in accordance with the NYSE’s governance listing standards and SEC rules and regulations.

Nominating, Compensation & Governance Committee (or NC&G Committee)

The purpose of our NC&G Committee is to: (1) assist our Board in fulfilling its responsibilities with respect to the compensation of our executive officers; (2) recommend candidates for all directorships to be filled; (3) identify individuals qualified to serve as members of our Board; (4) review and recommend committee appointments; (5) take a leadership role in shaping our corporate governance; (6) develop and recommend our Corporate Governance Guidelines to our Board for adoption; (7) lead our Board in an annual review of its own performance; and (8) perform other functions that it deems necessary or appropriate. Pursuant to its charter, our NC&G Committee has the express authority to retain or obtain the advice of a compensation consultant, independent legal counsel or other advisor, at our company’s expense.

 

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Our NC&G Committee also has the following responsibilities, among others, related to compensation matters: (1) administering our restricted stock and stock option plans; (2) reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer, evaluating our Chief Executive Officer’s performance in light of those goals and objectives and determining the compensation of our Chief Executive Officer based upon this evaluation; (3) reviewing and approving the compensation of our non-CEO executive officers; and (4) making recommendations to our Board regarding certain incentive compensation plans and equity-based plans. In addition, as part of its oversight of our overall compensation program, our NC&G Committee considers our compensation policies and procedures, including the incentives that they create and factors that may influence excessive risk taking.

Following its review in March 2022, our Board determined that all of the members of our NC&G Committee are independent and meet the enhanced independence standards applicable to compensation committee members under the NYSE’s corporate governance listing standards and SEC rules and regulations.

Environmental, Social and Governance Oversight

Our Board is ultimately charged with overseeing the risks to our business on behalf of our shareholders, and we believe that our Board’s active involvement in oversight of environmental, social and governance (ESG) risks and initiatives affords us tremendous benefits. Our Audit Committee is responsible for overseeing our enterprise risk management (ERM) program, and management reports quarterly to the Audit Committee on the status of various aspects of the ERM program. As part of our management’s execution of the ERM program, specific consideration is given to risks to our business associated with our supply chain, as well as the health and safety of employees and customers, privacy and data security and sustainability. In addition, our General Counsel reports quarterly to the Audit Committee about any questions relating to ethics or our Code of Conduct raised by individuals within our organization and/or externally. Our NC&G Committee has broad oversight responsibilities for, among other things, our governance structure, including expectations and requirements embedded in our charter, bylaws and Corporate Governance Guidelines, and our executive compensation policies and practices. Within our Corporate team, we have a cross-functional steering committee comprised of our Senior Vice President of Operations, our Chief Human Resources Officer, our General Counsel/Treasurer, our Vice President of Strategic Planning and Business Development and our Corporate Social Responsibility Manager who, with input from others on our Executive Leadership Teams, assess ESG opportunities within our industry and collaborate with our brands on potential opportunities to execute brand-specific ESG initiatives. Additional information regarding oversight of ESG matters within our company, as well as our company’s corporate social responsibility initiatives, may be found on our website at www.oxfordinc.com.

Meetings of Non-Employee Directors

Pursuant to our Corporate Governance Guidelines, our non-employee directors periodically meet separately in executive sessions. Mr. Wood, as our lead director, chaired the meetings of our non-employee directors during fiscal 2021.

Board Leadership

Our Board is responsible for governing the affairs of our company for the benefit of our shareholders. In discharging this responsibility, our Board relies on the judgment, business acumen and experience of our qualified management team. Our directors believe that the appropriate leadership structure for our Board may change from time to time. As stated in our Corporate Governance Guidelines, our Board does not have a policy as to whether our Chief Executive Officer should also serve as chair of our Board. The Board makes this decision as it deems appropriate from time to time based upon the relevant factors applicable to each case.

Our Board is currently comprised of 10 independent directors and one management director (our current Chairman, Chief Executive Officer and President, Mr. Chubb). In electing Mr. Chubb as our Chairman in 2015, our Board considered Mr. Chubb’s leadership qualities; management capability; knowledge of our business and industry; long-term, strategic perspective demonstrated over the course of many years; and performance as our Chief Executive Officer and President.

In Mr. E. Jenner Wood III, we also have an active, engaged lead (independent) director. In his capacity as the lead director, Mr. Wood sets the agenda for, and chairs, executive sessions of our non-employee directors; serves as a liaison between independent directors and Mr. Chubb; and serves as a liaison between our shareholders and our independent directors. As lead director, Mr. Wood is in regular contact with Mr. Chubb about our operating results and activities, risks to our business, management succession and our business prospects.

We also have a supermajority of independent directors, regular meetings of our non-employee directors in executive session and an Audit Committee and NC&G Committee (each of which reports to our full Board on a quarterly basis on significant committee activities) comprised solely of independent directors. Our Board believes the current leadership structure, comprised of an executive chair and CEO balanced with a strong lead director tasked with significant specified duties, is in the best interests of our company and shareholders.

 

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Director Nomination Process

In accordance with our Corporate Governance Guidelines, our NC&G Committee periodically reviews the skills and characteristics required of our directors. This assessment includes issues such as independence, expertise, age, diversity, general business knowledge and experience, financial literacy, availability and commitment, as well as other criteria that our NC&G Committee finds to be relevant. We believe continuity in director service promotes stability and provides our company with the benefit of accumulated familiarity and insight. Accordingly, our NC&G Committee’s process for identifying nominees reflects our company’s practice of re-nominating incumbent directors whom the committee believes will continue to beneficially contribute to our Board.

In order to accomplish its objectives, our NC&G Committee’s evaluations of potential candidates generally involve a review of the candidate’s background and credentials, interviews of a candidate by members of our Board and discussions among our directors. Based on its evaluation in light of the foregoing factors, our NC&G Committee recommends candidates to our full Board which, in turn, selects candidates to be nominated for election by shareholders or to be elected by our Board to fill a vacancy.

Board Diversity

Although our Board does not follow any ratio or formula to determine the appropriate composition of directors, consistent with our Corporate Governance Guidelines, our NC&G Committee recognizes that a diversity of viewpoints and practical experiences can enhance our Board’s effectiveness. Accordingly, it is the practice of our NC&G Committee in evaluating the diversity of potential director candidates to give particular consideration to the diverse experiences and perspectives that a prospective candidate may bring to our Board, including diversity of age, gender, race or ethnicity and professional experiences and skills. Although our NC&G Committee and Board routinely reassess the Board’s composition, we believe our directors possess the diversity of backgrounds, experiences and qualifications necessary for effective oversight and strategic decision-making. A snapshot of certain characteristics of our directors is depicted in the charts below.

Director Compensation

Compensation Program for Fiscal 2021

For fiscal 2021, our non-employee directors were compensated in accordance with the following program guidelines:

•

an annual stock retainer in the form of restricted stock (subject to a vesting period generally coinciding with one year of service on our Board) granted to each non-employee director with a grant date fair value of $100,000;

​

 

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•

an annual cash retainer of $45,000 payable in quarterly installments to each non-employee director; and

​

•

an additional annual cash retainer of $12,500 payable in quarterly installments to our lead director and the chairs of our Audit and NC&G Committees.

​

To further facilitate our directors increasing their ownership of our stock, our non-employee directors are given the option to elect to receive their annual cash retainers in the form of a one-time restricted stock grant having a grant date fair value equal to the retainer. For fiscal 2021, two of our non-employee directors elected to receive their cash retainers in the form of restricted stock.

Under our Deferred Compensation Plan, our non-employee directors are eligible to defer receipt of up to 100% of their cash retainers. Non-employee directors are permitted to “invest” their deferred fees among a platform of investment options that are available to our eligible employees who participate in the plan. Our Deferred Compensation Plan is an unfunded, non-qualified deferred compensation plan, and participants’ account balances are subject to the claims of our company’s creditors. In the event that our company becomes insolvent, participants in the plan would be unsecured general creditors with respect to their account balances, which we believe further aligns the interests of our participating directors with the long-term interests of our shareholders. Because our Deferred Compensation Plan does not provide above-market, fixed rates of return, earnings under the plan are not included in the table below under “—Director Compensation for Fiscal 2021.” One of our non-employee directors elected to participate in our Deferred Compensation Plan during fiscal 2021.

Director compensation is paid for the 12-month period commencing with each annual meeting of shareholders. Accordingly, the fiscal 2021 director compensation program described above applies to the period starting with the 2021 annual meeting held on June 15, 2021 and concluding with this year’s annual meeting and does not coincide with our 2021 fiscal year for which director compensation is reported in the table below under “—Director Compensation for Fiscal 2021.”

As an employee director, our Chairman, Chief Executive Officer and President, Mr. Thomas C. Chubb III, is not compensated for his service on our Board.

Director Compensation for Fiscal 2021

The table below summarizes the compensation for our non-employee directors for fiscal 2021.

(1)

Represents the aggregate grant date fair value of restricted stock granted in fiscal 2021, computed in accordance with FASB ASC Topic 718. Information about the assumptions used to value these awards can be found under the caption “Equity Compensation” in Notes 1 and 8 in our 2021 Annual Report on Form 10-K. As of January 29, 2022, Mr. Holder held 1,125 restricted shares of our common stock; Mr. Love held 1,156 restricted shares of our common stock; and each of our other non-employee directors held 1,011 restricted shares of our common stock.

​

(2)

Represents the dollar value of dividends paid on unvested stock awards which was not factored into the grant date fair value for the stock.

​

(3)

In addition, from time to time, our directors receive discounted and complimentary meals, apparel and related merchandise. We do not believe that the aggregate incremental cost to us of these discounts and benefits exceeds $10,000 for any of our directors and, in accordance with SEC rules and regulations, have excluded them from this table.

​

 

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Stock Ownership and Retention Guidelines

To reinforce the alignment of the interests of our directors with the long-term interests of our shareholders, our Board has established stock ownership guidelines applicable to our non-employee directors. Under these guidelines, each of our non-employee directors is expected within four years to accumulate and hold shares of our common stock having a fair market value equal to 2.0x the director’s annual retainer. Each of our directors has either met or is on track to meet his/her ownership guideline within the requisite time frame.

Our Corporate Governance Guidelines also provide for a retention guideline, or holding period, of one year for stock acquired upon the lapse of restrictions on restricted stock (net of funds reasonably expected to be necessary to satisfy applicable taxes) that applies to our non-employee directors.

 

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EXECUTIVE OFFICERS

All of our executive officers are elected by and serve at the discretion of our Board. The following table sets forth information, as of April 14, 2022, about our executive officers, with the exception of our Chairman, Chief Executive Officer and President Mr. Chubb, whose biographical information is provided above under “Corporate Governance and Board Matters—​Directors—Continuing Directors” on page 15:

 

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EXECUTIVE COMPENSATION

Introduction

In this section of the proxy statement, we provide information about our executive compensation program specifically as it relates to our “named executive officers,” or NEOs. This information includes: (1) a Compensation Discussion and Analysis (CD&A) discussing, among other things, how and why our NC&G Committee (which we refer to in this section of the proxy statement as our “compensation committee”) made its fiscal 2021 compensation decisions for our NEOs in Spring 2021; (2) the compensation tables required by the SEC’s rules and regulations; (3) a summary of certain limited arrangements with our NEOs that provide for payments upon defined change of control events or upon termination of employment; and (4) disclosure of the ratio of the annual total compensation of our Chief Executive Officer to that of our median compensated employee, as required by and determined in accordance with the SEC’s rules.

The CD&A primarily focuses on our 2021 compensation programs, actions and outputs. As described further in the CD&A, in making its fiscal 2021 compensation decisions in early fiscal 2021, our compensation committee engaged in thoughtful dialogue with our management and carefully reviewed our executive compensation programs to ensure that realized compensation outcomes strongly align with our company’s performance and our shareholders’ interests, including consideration of the challenges to our business presented by the COVID-19 pandemic and anticipated continued impacts on the retail apparel industry at that time.

Under the SEC’s rules, our NEOs for purposes of this proxy statement consist of our principal executive officer, our principal financial officer and the three other most highly compensated executive officers who were serving at the end of fiscal 2021. For fiscal 2021, our NEOs were as follows:

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Mr. Thomas C. Chubb III, Chairman, Chief Executive Officer and President (our principal executive officer);

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Mr. K. Scott Grassmyer, Executive Vice President, Chief Financial Officer and Chief Operating Officer (our principal financial officer);

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Mr. Thomas E. Campbell, Executive Vice President and Chief Information Officer;

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Ms. Michelle M. Kelly, Chief Executive Officer, Lilly Pulitzer; and

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Mr. Douglas B. Wood, Chief Executive Officer, Tommy Bahama.

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Compensation Discussion and Analysis

Executive Summary

We are a leading branded apparel company that designs, sources, markets and distributes products bearing the trademarks of our Tommy Bahama, Lilly Pulitzer, Southern Tide, The Beaufort Bonnet Company and Duck Head lifestyle brands. Tommy Bahama and Lilly Pulitzer, in the aggregate, represent more than 90% of our net sales. During fiscal 2021, 80% of our net sales were through our direct-to-consumer channels of distribution and 97% of our consolidated net sales were to customers located in the United States.

Our business strategy is to develop and market compelling lifestyle brands and products that evoke a strong emotional response from our target consumers. We consider lifestyle brands to be those brands that have a clearly defined and targeted point of view inspired by an appealing lifestyle or attitude. Furthermore, we believe lifestyle brands that create an emotional connection can command greater loyalty and higher price points at retail and create licensing opportunities. We believe the attraction of a lifestyle brand depends on creating compelling product, effectively communicating the respective lifestyle brand message and distributing products to consumers where and when they want them.

Fiscal 2021 Overview and Highlights

While the challenges of the COVID-19 pandemic continued to impact our operations in fiscal 2021, including supply chain disruptions, freight delivery issues and ongoing governmental restrictions affecting our retail and food and beverage locations, the economic environment improved significantly during the year. Excellent execution at each of our operating groups allowed our company to capitalize on exceptionally strong consumer demand to achieve record performance in each of our brands and record net earnings as a company. Our compensation committee made decisions with respect to executive officer compensation early in fiscal 2021, largely in advance of visibility into the rebound in consumer demand for our products, and set what we believed were meaningful performance goals consistent with our outlook and the challenges facing our business at that time. As part of its decision making process, our compensation committee took into consideration market practice and retention considerations in light of measures taken to preserve liquidity during fiscal 2020, including base salary reductions and suspension of our annual incentive compensation program. Despite significant uncertainty at the start of fiscal 2021, each of our brands ultimately achieved strong growth, not only compared to fiscal 2020, but also as compared to pre-pandemic fiscal 2019 levels, including full-price e-commerce growth, strong full-price sales in our retail stores and growth in our Tommy Bahama

 

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food and beverage business. This success builds on decisions we made during fiscal 2020 and prior to the COVID-19 pandemic, including maintaining our focus on long-term strategic initiatives such as our initiative to improve the profitability of our Tommy Bahama business and investments in technology across the enterprise. We believe that our remarkable performance in fiscal 2021 is due in large part to our talented, highly engaged and motivated teams, who we believe will continue to be key to our success in delivering long-term value to shareholders.

Consideration of Last Year’s Advisory Say-On-Pay Votes

At our 2021 annual meeting, we held an advisory vote seeking shareholder approval of a “say-on-pay” proposal approving our NEO compensation program. At the 2021 annual meeting, over 99.7% of the votes cast on our say-on-pay proposal were in support of our NEO compensation program, as described in our 2021 proxy statement. Our compensation committee values the input of our shareholders, and to the extent there is any significant vote against the say-on-pay proposal, it will consider our shareholders’ concerns and evaluate whether any actions are appropriate to address those concerns. Our compensation committee regularly evaluates market compensation practices, taking into consideration information relating to compensation paid by peers, and implements changes as it deems appropriate. The compensation committee invites our shareholders to communicate any concerns or opinions on executive pay directly to our Board of Directors. Please refer to “Additional Information—Communications to our Board of Directors” for information about communicating with our Board.

Compensation Philosophy and Objectives

Our executive compensation programs are designed to:

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maintain a strong link between pay and performance;

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align our NEOs’ interests with those of our shareholders; and

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ensure that we are able to attract and retain talented individuals.

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Consistent with these objectives, our NEO compensation practices in recent years have factored in the following, which we believe are in the long-term best interests of our shareholders:

 

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Compensation Decision Process

Compensation Consultants.   Pursuant to its charter, our compensation committee has the authority, with our company’s funding, to retain or obtain the advice of a compensation consultant to assist in the performance of its responsibilities, provided, that, it will retain such an advisor only after taking into consideration relevant factors relating to the advisor’s independence from our management.

Our compensation committee again retained Mercer (US) Inc. as its compensation consultant during fiscal 2021 to assist and advise with various executive compensation matters, including the total compensation paid to our executive officers relative to market data, the individual components of executive officer compensation and the peer group used in reviewing and formulating executive officer compensation and changes to our executive compensation programs in response to the COVID-19 pandemic.

In relation to our compensation committee’s retention of Mercer, our compensation committee considered various factors relating to Mercer’s independence, including those enumerated by the NYSE. As part of its evaluation, our compensation committee considered the following: Mercer’s parent company, Marsh & McLennan Companies, and affiliates provide insurance and benefits brokerage services to our company; the fees paid to Marsh & McLennan (including Mercer) in connection with those brokerage services represented a nominal amount of the revenues generated by that company; Mercer’s policies and procedures relating to conflicts of interest; the fact that the Mercer consultants that work with our company do not own any of our common stock; and certain consulting services provided by Mercer to current and former employers of certain of our compensation committee members. Following its review, our compensation committee concluded that Mercer was independent.

Roles of Compensation Committee and Independent Compensation Consultant.   The following table summarizes the respective roles of our compensation committee and its compensation consultant in the decision-making process with respect to NEO compensation, in particular for fiscal 2021:

 

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Roles of Executive Officers.   Our Chairman, Chief Executive Officer and President reviews performance of our other executive officers, provides our compensation committee with base salary and target cash and equity incentive compensation recommendations for our other executive officers (without making recommendations with respect to his own compensation) and, together with our Executive Vice President, Chief Financial Officer and Chief Operating Officer and other executive officers, recommends performance goals applicable to performance-based compensation. During fiscal 2021, our Executive Vice President and Chief Information Officer, our Executive Vice President, Chief Financial Officer and Chief Operating Officer and our Senior Vice President, General Counsel, Treasurer and Secretary attended portions of our compensation committee meetings, at the invitation of the committee, assisted with the design and implementation of our compensation programs, including equity compensation programs, and reviewed and provided guidance on market data on executive officer compensation and key legal and corporate governance developments relating to compensation practices.

Market Data.   We utilize market surveys to obtain a general understanding of compensation practices and trends, and in evaluating market comparisons of compensation paid to our NEOs when making compensation recommendations and decisions for our NEOs. For fiscal 2021 compensation reviews, we utilized the applicable IPAS Global Consumer Goods Survey; Mercer’s Executive Remuneration Surveys; and Willis Towers Watson’s General Industry and Retail/Wholesale Survey Reports on Executive Compensation. We do not have any input into the companies that make up these surveys.

In addition, our compensation committee reviews compensation data obtained from publicly available sources for peer companies. For fiscal 2021, our compensation committee reviewed relevant compensation data from the following companies:

At Mercer’s recommendation, Zumiez Inc. was added to our peer company group for fiscal 2021 based on its revenue size and business offerings. RTW Retailwinds, Inc. was removed from our peer company group for fiscal 2021 following its bankruptcy.

Elements of Executive Officer Compensation

Total compensation for our NEOs in recent years has generally consisted of the following elements:

In evaluating and approving our fiscal 2021 executive officer compensation program in March 2021 and May 2021, our compensation committee reviewed actions taken in fiscal 2020 to mitigate the impact of the COVID-19 pandemic on our business and carefully reassessed each element of the program in light of our compensation philosophy and objectives, our company’s performance, retention considerations and the current economic environment and conditions in the retail apparel industry. The following table summarizes each component of our executive compensation program and key actions taken with respect to that component in fiscal 2021.

 

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Target Compensation Levels.   In establishing specific base salary amounts and cash incentive award target amounts payable to any individual NEO, our compensation committee takes into consideration a number of factors, such as the individual’s specific role, the individual’s performance and accomplishment of significant business strategies, the size of the individual’s operating group or business unit, the oversight and other responsibilities of the individual, the individual’s employment experience, the individual’s compensation history at our company, other factors related to the scope or unique nature of the position’s responsibilities and retention considerations. In recent years, our compensation committee has also generally utilized the median of total cash compensation (base salary and cash incentive awards) for similar positions identified using industry and general market data, as well as that of similarly situated executives at the peer company group, as a guideline for evaluating and approving the target total cash compensation for our NEOs.

In approving the amount of long-term equity compensation granted to our NEOs, our compensation committee reviews market data to understand trends and general compensation practices (for example, typical vesting periods, types and values of equity grants, the mix of guaranteed and performance-based compensation and/or the mix of cash and equity compensation).

Compensation Mix.   Our compensation committee reviews all components of the compensation payable to our NEOs, including base salaries, cash incentive awards and long-term equity compensation. Our compensation committee generally increases target incentive award levels for an NEO as such officer’s responsibilities within our organization increase, thereby more heavily weighting the performance-based elements of compensation for our most senior executives who are more likely to have a strong and direct impact in achieving strategic and financial goals that are most likely to affect shareholder value. Our compensation committee believes that the best interests of our shareholders are served by tying pay to performance and subjecting a meaningful proportion of our NEOs’ total compensation to the achievement of company and/or operating group goals. Consistent with this philosophy, and after assessing market practices, our compensation committee has focused in recent years on increasing performance-based compensation elements as a percentage of the total target compensation for

 

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Mr. Chubb and our other NEOs. When approving the total target compensation of our NEOs, our compensation committee takes into consideration the allocation of the total compensation to base salary, short-term incentive compensation and long-term equity compensation.

We have four primary elements of direct compensation for our NEOs, which are described in further detail below: base salary; short-term/annual (cash) incentive compensation; performance-based long-term equity awards with specified service requirements; and service-based long-term equity awards. The charts below illustrate the proportion of the total target direct compensation of our CEO and of our other NEOs as a group which is “at risk” compensation tied to our company’s performance:

Base Salary

Our compensation committee utilizes base salaries to provide a fixed amount of compensation to our NEOs for the performance of their duties. Base salaries of our NEOs are reviewed on an annual basis. Our compensation committee determines the salary of our Chief Executive Officer and reviews and approves (with or without modification) our Chief Executive Officer’s recommended salaries for our other executive officers.

Base Salaries for Fiscal 2021

In April 2020, as part of an effort to preserve liquidity in response to the COVID-19 pandemic, our compensation committee approved voluntary reductions in the base salary of Mr. Chubb, Mr. Grassmyer, Mr. Wood and Mr. Campbell for all or a portion of the remainder of fiscal 2020. In March 2021, following a review of the financial performance of our company and various business units, which included consideration of the ongoing impacts of the COVID-19 pandemic and the successful measures taken to preserve liquidity during fiscal 2020, our compensation committee determined that it was appropriate to restore the base salary of Mr. Chubb and Mr. Wood to their pre-pandemic levels. In addition, our compensation committee approved an increase of 3% in the base salaries of Mr. Grassmyer and Mr. Campbell, from $425,000 to $437,750, which our compensation committee believed was appropriate in light of the contributions by Mr. Grassmyer and Mr. Campbell in developing and implementing strategic initiatives to position our company to successfully navigate the challenges of the COVID-19 pandemic and better position us for long-term success. Our compensation committee also approved an increase in Ms. Kelly’s base salary of approximately 3.1%, from $567,250 to $585,000, in light of continued exceptional performance by Lilly Pulitzer.

Short-Term/Annual (Cash) Incentive Compensation

Our compensation committee has utilized cash incentive awards in recent years to provide our NEOs with variable cash compensation opportunities based on company and/or operating group performance.

In March 2020, our compensation committee suspended our annual cash incentive awards program for fiscal 2020 in response to the uncertain impacts of the COVID-19 pandemic. In March 2021, after careful consideration of our financial performance, including actions taken during fiscal 2020 to mitigate the impacts of the COVID-19 pandemic, our company’s plans and strategic opportunities for fiscal 2021 and relevant market data with respect to incentive compensation, our compensation committee determined that the reinstatement of an annual cash incentive program for our NEOs for fiscal 2021 was appropriate.

 

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Consistent with the objective of motivating our NEOs to achieve and exceed performance goals, our compensation committee approved threshold, target and maximum award levels expressed as a percentage of each NEO’s base salary for fiscal 2021, as follows:

Our compensation committee approved individual performance measures for each of our NEOs based on profit before taxes, as adjusted for non-recurring or unusual items (PBT), of our company and each of our operating groups. PBT is a performance measure which we believe drives shareholder value by focusing management on the profitability of our company and/or operating groups, taking into consideration the cost of the capital being deployed.

In an effort to further our pay for performance philosophy and better align the interests of our NEOs with those of our shareholders, our compensation committee determined that setting separate performance goals for the first half of fiscal 2021 and the full fiscal year, with the development of goals for the full fiscal year delayed until later in the year, would allow the committee to most effectively set meaningful performance goals. In light of the significant uncertainty present in early fiscal 2021 with respect to the scope of the COVID-19 pandemic and its continued effects on our business, as evidenced by continued depression in consumer traffic at retail throughout February 2021, the committee concluded that in March 2021, neither the committee nor our management could confidently predict our performance during the year or set meaningful, yet realistic performance goals for fiscal 2021. Accordingly, the program adopted by our compensation committee for fiscal 2021 included separate award opportunities and performance goals based on the performance of our company or the applicable operating group for the first half of fiscal 2021 (comprising 50% of the total award opportunity) and for the full fiscal year (comprising the other 50% of the total award opportunity). Performance targets for the first half of fiscal 2021 were set in March 2021, and performance targets for the full fiscal year were subsequently set in May 2021 when the committee had better visibility into the retail environment and rebound in consumer demand in 2021.

For cash incentive awards that could become payable to Mr. Chubb, Mr. Campbell and/or Mr. Grassmyer, the incentive award was based on the PBT of our company as a whole during the relevant periods. For cash incentive awards that could become payable to Ms. Kelly and Mr. Wood, the incentive award was based on the satisfaction of applicable PBT targets by our Lilly Pulitzer operating group and Tommy Bahama operating group, respectively, during the relevant periods.

For each of our NEOs, if the applicable threshold performance measure was not met for either the first half of fiscal 2021 or the full fiscal year, no cash incentive would be payable in respect of that component of the bonus opportunity.

In establishing performance targets for the first half of fiscal 2021 and the full fiscal year, our compensation committee took into consideration our forecasts for the fiscal year at the time of setting the target, including the anticipated continued impacts of the COVID-19 pandemic, with a focus on returning our businesses to pre-pandemic levels and implementing strategic initiatives designed to position them to emerge from the COVID-19 pandemic poised to achieve future growth.

Performance Targets—Total Company

For purposes of the cash incentive award for Mr. Chubb, Mr. Campbell and Mr. Grassmyer, the table below sets forth the threshold, target and maximum performance targets for our company as a whole for the first half of fiscal 2021 and the full fiscal year; the performance of our company as a whole for the first half of fiscal 2021 and the full fiscal year relative to the performance targets; the applicable weighting allocated to performance for each of the first half of fiscal 2021 and the full fiscal year; and the weighted contribution to the actual incentive award earned by each of these executive officers.

 

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Performance Targets—Lilly Pulitzer

For purposes of the cash incentive award to Ms. Kelly, the table below sets forth the threshold, target and maximum performance targets established by our compensation committee for our Lilly Pulitzer operating group for the first half of fiscal 2021 and the full fiscal year; the performance of our Lilly Pulitzer operating group for the first half of fiscal 2021 and the full fiscal year relative to the performance targets; the applicable weighting allocated to performance for each of the first half of fiscal 2021 and the full fiscal year; and the weighted contribution to the actual incentive award earned by Ms. Kelly.

Performance Targets—Tommy Bahama

For purposes of the cash incentive award to Mr. Wood, the table below sets forth the threshold, target and maximum performance targets established by our compensation committee for our Tommy Bahama operating group for the first half of fiscal 2021 and the full fiscal year; the performance of our Tommy Bahama operating group for the first half of fiscal 2021 and the full fiscal year relative to the performance targets; the applicable weighting allocated to performance for each of the first half of fiscal 2021 and the full fiscal year; and the weighted contribution to the actual incentive award earned by Mr. Wood.

Fiscal 2021 Incentive Awards

Based on our fiscal 2021 performance, each of our NEOs earned the following cash incentives in respect of fiscal 2021:

Long-Term Equity Incentive Compensation

Our compensation committee utilizes stock-based incentive awards under the LTIP to incent our NEOs to remain with our company and further align the interests of our NEOs with those of our shareholders. Our compensation committee typically considers and approves long-term equity incentive awards in March of each year.

Our compensation committee believes that a mix of performance-based and service-based equity awards furthers the program’s incentive and retention objectives. In fiscal 2020, after carefully considering the overall economic environment and market practice, our compensation committee approved performance-based awards based on a multi-year relative total shareholder return (“TSR”) metric, which represented a change from our prior practice of awarding performance-based restricted stock awards that vested contingent upon our achievement of one-year earnings per share performance goals. Our compensation committee believes that multi-year relative TSR awards continue to reflect market best practices and effectively

 

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align the interests of our NEOs with those of our shareholders by tying the compensation of our executives to whether or not we deliver value to our shareholders relative to other companies in our industry.

For fiscal 2021, our long-term incentive compensation program included two equity elements:

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performance-based equity awards under the LTIP that provided participants the opportunity to earn RSUs contingent upon our achievement of certain performance goals for our company based on multi-year TSR relative to a representative set of comparator group companies, with any RSUs earned by recipients vesting on, or shortly after, May 31, 2024, as further described below and in the applicable award agreements; and

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service-based restricted shares under the LTIP, consisting of (i) service-based restricted shares that are subject to a three-year vesting period, with the awards cliff vesting on May 31, 2024, and (ii) a one-time grant of service-based restricted shares to Ms. Kelly in light of Ms. Kelly’s strategic leadership and Lilly Pulitzer’s outstanding performance during the COVID-19 pandemic, consisting of 2,000 service-based restricted shares that were subject to a one-year vesting period and cliff vested on April 8, 2022.

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One of our company’s key strategic priorities in recent years, including prior to the COVID-19 pandemic, has been improving the operating performance of Tommy Bahama, our largest operating group, which has a significant impact on our company’s overall performance. In making decisions regarding long-term equity incentive compensation for fiscal 2021, our compensation committee determined that more heavily weighting Mr. Wood’s compensation toward performance-based elements was consistent with that focus. Accordingly, our compensation committee, taking into consideration Mr. Wood’s own views on emphasizing Tommy Bahama’s successful delivery of strong returns for our shareholders, awarded Mr. Wood only performance-based RSUs for fiscal 2021, rather than a combination of performance-based RSUs and service-based restricted shares, to more closely align Mr. Wood’s compensation with the performance of our company.

The table below sets forth the awards approved by our compensation committee for each of our NEOs for the fiscal 2021 LTIP program.