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APPENDIX A TABLE OF CONTENTS

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

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

 

Tailored Brands, 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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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

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GRAPHIC

6100 Stevenson Blvd.
Fremont, California 94538

May 4, 2017

TO OUR SHAREHOLDERS:

        It is our pleasure to invite you to attend our Annual Meeting of Shareholders (the "Annual Meeting") at 11:00 a.m., Pacific daylight time, on Thursday, June 15, 2017, at our executive offices located at 6100 Stevenson Blvd, Fremont, California 94538. Holders of record of our common stock as of April 18, 2017 are entitled to notice of, and to vote at, the Annual Meeting.

        At Tailored Brands, we help men love how they look. Our mission is to provide a personal, convenient, one-of-a-kind shopping experience with compelling products and world-class service. Over the past 43 years, we have built a strong foundation by understanding and serving our customers better than anyone else. Today's retail landscape is changing rapidly and we are responding. We are positioning Tailored Brands for long-term growth and value creation by executing on our strategy to (1) "Be the Authority" by helping men dress for work, special occasions and everyday life, (2) "Own the Easy" by offering unmatched convenience to our customers, and (3) "Make it Personal" by curating personalized and custom offerings for our customers.

        The attached Notice of Annual Meeting and Proxy Statement are a critical element of the corporate governance process and are intended to provide you with information about the Company's Board of Directors and executive officers, and a discussion of proposals that require your vote. Please read these materials so you will understand the business that will be transacted and voted upon at the Annual Meeting.

        We have elected to take advantage of Securities and Exchange Commission ("SEC") rules that allow us to furnish proxy materials to certain shareholders through the Internet. We believe furnishing proxy materials to our shareholders through the Internet will allow us to provide our shareholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of the Annual Meeting. If you have received the Notice, you will not receive a printed copy of the proxy materials unless you request it by following the instructions for requesting such materials contained in the Notice.

        On behalf of the employees and directors of Tailored Brands, Inc., we thank you for your continued support and confidence in our Company.

       Regards,

 

 

GRAPHIC
    Douglas S. Ewert,
Chief Executive Officer

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GRAPHIC


NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Date:   Thursday, June 15, 2017

Time:

 

11:00 a.m., Pacific daylight time

Place:

 

Tailored Brands, Inc. executive offices,
6100 Stevenson Blvd., Fremont, CA 94538

Record Date:

 

Only holders of record of our common stock at the close of business on Tuesday, April 18, 2017, are entitled to receive notice of, and to vote at, the meeting and any adjournment(s) thereof.

Items of Business:

 

Election of all nine directors to our Board of Directors for the coming year;

Adoption of an Amendment to the Tailored Brands, Inc. 2016 Long-Term Incentive Plan and reapproval of material terms of performance goals;

Advisory vote to approve the compensation of our named executive officers;

Advisory vote on the frequency of holding future advisory votes to approve the compensation of our named executive officers;

Ratification of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2017; and

Transaction of such other business as may properly come before the meeting or any adjournment thereof.


Proxy Voting:

 

You are cordially invited to attend the meeting in person. To ensure that your vote is properly recorded, please vote as soon as possible, even if you plan to attend the Annual Meeting in person. As described in the Notice of Availability of Proxy Materials, you may submit your proxy by mail, Internet, or telephone. If you attend the meeting you can vote either in person or by your proxy. For further details on voting, please refer to the section entitled "Voting and Other Information" beginning on page 75 of the proxy statement.

Admission to the Annual Meeting:

 

If you wish to attend the meeting in person and you are a registered owner of shares of our common stock on the record date, you must show a government issued form of identification which includes your picture. If you are a beneficial owner of shares as of the record date that are held for your benefit by a bank, broker or other nominee, in addition to the picture identification, you will need to provide proof of ownership of our common stock on the record date to be admitted to the meeting. A recent brokerage statement or a letter from your bank, broker, or other nominee holder that shows that you were an owner on the record date is an acceptable example of proof of ownership.

        Beginning on May 5, 2017, proxy materials or a Notice of Internet Availability will be sent to shareholders in connection with our solicitation of proxies, on behalf of our Board of Directors, for this year's Annual Meeting of Shareholders.

                   By Order of the Board of Directors

 

 

GRAPHIC
    A. Alexander Rhodes
Corporate Secretary

May 4, 2017


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GRAPHIC


PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 15, 2017

        This proxy statement is furnished to the shareholders of Tailored Brands, Inc., (the "Company", also referred to in this proxy statement as "we", "us", or "our"), whose two main executive offices are located at 6380 Rogerdale Road, Houston, Texas 77072, and 6100 Stevenson Blvd., Fremont, California 94538, in connection with the solicitation by our Board of Directors of proxies to be used at the Annual Meeting of Shareholders to be held at 11:00 a.m., Pacific daylight time, on Thursday, June 15, 2017, at the Company's Fremont, California office, or any adjournment(s) thereof (the "Annual Meeting").

        The Annual Meeting will be held to:

        On or about May 5, 2017, we began mailing to the holders of record of our common stock, $.01 par value per share ("common stock"), on April 18, 2017 (the "Record Date"), a Notice of Internet Availability of Proxy Materials containing instructions on how to access the Notice of Annual Meeting of Shareholders, this proxy statement, the form of proxy and our Annual Report on Form 10-K for the fiscal year ended January 28, 2017 over the Internet. At the close of business on the Record Date, there were outstanding and entitled to vote 49,048,248 shares of our common stock, and only the holders of record on the Record Date are entitled to notice of, and to vote at, the Annual Meeting.

Tailored Brands, Inc. 2017 Proxy Statement        i


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TABLE OF CONTENTS

Proxy Statement Summary   1

Annual Meeting of Shareholders

  1

Matters to be Voted on at the Annual Meeting

  1

Proposal 1: Election of Directors

 

2

Director Compensation

 

6

Procedures and Processes for Determining Director Compensation

  6

Retirement Payments and Benefits for David Edwab

  7

Director Compensation Table

  7

Director Nominations and Qualifications

 

8

Responsibility for Selection of Director Candidates

  8

Director Qualifications

  8

Identifying and Evaluating Nominees for Directors

  9

Shareholder Nominees

  10

Corporate Governance

 

10

Affirmative Determination of Directors Independence

  10

Board Leadership Structure

  11

Board Role in Risk Oversight

  12

Attendance at the Annual Meeting of Shareholders

  12

Communications with the Board of Directors

  12

Committees of the Board of Directors and Meeting Attendance

  13

Director Equity Ownership

  14

Corporate Governance Materials Available on the Company's Web Site

  14

Compensation Committee Interlocks and Insider Participation

  15

Proposal 2: Adoption of an Amendment to the 2016 Long-Term Incentive Plan and Reapproval of Material Terms of Performance Goals

 

15

The Proposed Amendment

  16

Section 162(m) Reapproval

  18

Key Plan Features

  18

Summary of the 2016 Long-Term Incentive Plan as Proposed to be Amended

  19

U.S. Federal Income Tax Consequences

  27

New Plan Benefits

  30

Equity Plan Compensation Information

 

31

Executive Officers

 

32

Executive Compensation

 

33

Compensation Discussion and Analysis

  33

Compensation Committee Report

  51

Summary Compensation Table

  52

Employment Agreements

  53

Grants of Plan-Based Awards Table

  55

Outstanding Equity Awards At Fiscal Year End Table

  57

Option Exercises and Stock Vested Table

  58

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Pension Benefits

  59

Nonqualified Deferred Compensation

  59

Potential Payments upon Termination or Change in Control

  59

Proposal 3: Advisory Vote to Approve the Compensation of our Named Executive Officers

 

66

Proposal 4: Advisory Vote on the Frequency of Holding Future Advisory Votes to Approve the Compensation of our Named Executive Officers

 

67

Certain Relationships and Related Transactions

 

68

Transactions with Related Persons

  68

Policies and Procedures for Approval of Related Person Transactions

  68

Independent Registered Public Accounting Firm

 

68

Audit Committee Report

 

69

Proposal 5: Ratification of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm

 

71

Security Ownership of Certain Beneficial Owners and Management

 

72

Section 16(a) Beneficial Ownership Reporting Compliance

 

73

Submitting Proposals for 2018 Annual Meeting

 

74

Voting and Other Information

 

75

How To Vote

 

78

Other Matters

 

78

Appendix A: Tailored Brands, Inc. 2016 Long-Term Incentive Plan

 

A-1

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PROXY STATEMENT SUMMARY

        This summary highlights information contained in this proxy statement. You should read the entire proxy statement carefully before voting.

Annual Meeting of Shareholders

Date and Time:   Thursday, June 15, 2017, at 11:00 a.m., Pacific daylight time

Place:

 

Tailored Brands, Inc. executive offices
6100 Stevenson Blvd., Fremont, CA 94538

Record Date:

 

April 18, 2017

Matters to be Voted on at the Annual Meeting

Matter   Board Recommendation
Proposal 1: Elect all nine directors to our Board of Directors
FOR

Shareholders are being asked to elect all nine director nominees for a one-year term.

 

The Board of Directors and the Nominating and Corporate Governance Committee believe that the nine director nominees possess the necessary qualifications and experiences to effectively oversee the business and the long-term interests of shareholders.

Proposal 2: Adopt an amendment to the Tailored Brands, Inc. 2016 Long Term Incentive Plan and reapprove material terms of performance goals

 

FOR

Shareholders are being asked to (1) approve an amendment to our 2016 Long-Term Incentive Plan to (a) expand the definition of Preexisting Plan, (b) increase the number of shares available under the Plan by 2.9 million shares, (c) revise the share recirculation provisions and (d) impose a minimum vesting requirement on all awards thereunder and (2) reapprove the material terms of the performance goals for purposes of compliance with Section 162(m).

 

The Board and management believe it is important that the amendment be approved in order to maintain the Company's ability to attract and retain key personnel and continue to provide them with strong incentives to contribute to the Company's future success.

Proposal 3: Advisory vote to approve the compensation of our named executive officers



FOR

Shareholders are being asked to approve, on an advisory basis, the compensation of our Named Executive Officers as described in the Executive Compensation section of this proxy statement beginning on page 33.

 

The Compensation Committee takes very seriously its role in the governance of the Company's compensation programs and will thoughtfully consider the advisory input from its shareholders in setting future compensation for our Named Executive Officers.

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Matter   Board Recommendation
Proposal 4: Advisory vote on the frequency of holding future advisory votes to approve the compensation of our named executive officers   1 YEAR

Shareholders are being provided the opportunity to vote on how often they believe we should hold an advisory vote to approve executive compensation in the future. The frequency options are to hold the advisory vote to approve executive compensation each year, every two years or every three years.

 

The Board believes that an annual advisory vote on executive compensation is the most appropriate policy for our shareholders and the Company at this time.

Proposal 5: Ratify Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2017



FOR

Shareholders are being asked to ratify the appointment of D&T to serve as the Company's independent auditors for the fiscal year ending February 3, 2018.

 

Although the Audit Committee has the sole authority to appoint the independent auditors, as a matter of good corporate governance, the Board submits its selection of independent registered public accounting firm to our shareholders for ratification.


PROPOSAL 1:
ELECTION OF DIRECTORS

GRAPHIC

        At the Annual Meeting, nine directors, which will constitute the entire Board of Directors of the Company (the "Board of Directors" or the "Board"), are standing for election. All directors of the Company hold office until the next annual meeting of shareholders or until their respective successors are elected and qualified or their earlier death, resignation or removal.

        At a meeting on March 16, 2017, the Board approved the recommendation of the Nominating and Corporate Governance Committee and nominated the following persons to stand for election at the Annual Meeting.

Name   Age   Position with the Company   Director
Since
 

Dinesh S. Lathi

  46   Chairman of the Board   2016  

David H. Edwab

    62   Vice Chairman of the Board     1991  

Douglas S. Ewert

  53   Chief Executive Officer and Director   2011  

Irene Chang Britt

    54   Director     2015  

Rinaldo S. Brutoco

  70   Director   1992  

Theo Killion

    66   Director      

Grace Nichols

  70   Director   2011  

William B. Sechrest

    74   Director     2004  

Sheldon I. Stein

  63   Director   1995  

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        As required by our bylaws, each nominee has delivered a written, irrevocable resignation to the Company's Corporate Secretary to be considered by the Board in the event that a nominee receives less than a majority of the votes cast in an uncontested election of directors and effective thereafter only if the Board votes to accept the resignation by at least a majority vote of all directors.

        It is expected that all of the nominees will be able to serve. However, if before the election, one or more of the nominees are unable to serve or for good cause will not serve, the proxy holders will vote the proxies for the remaining nominees and for any substitute nominees to be selected by the Nominating and Corporate Governance Committee and approved by the Board of Directors.

        Biographical information about our nominees for director and the experience, qualifications, attributes, and skills considered by our Nominating and Corporate Governance Committee and Board of Directors in determining that the nominee should serve as a director appears below.

Dinesh S. Lathi

        Mr. Lathi is the former Chief Executive Officer of One Kings Lane, Inc., a leading online destination for premium home décor, having joined the company in 2011 and holding a number of roles including Chief Financial Officer and Chief Operating Officer. Prior to One Kings Lane, Mr. Lathi spent seven years in various senior executive roles at eBay, Inc. Prior to eBay, Mr. Lathi spent eight years in investment banking and private equity.

        Mr. Lathi's extensive experience in leadership, operation and financial management of online retailing as well as his financial expertise gained as an investment banker, private equity executive and chief financial officer qualify him to sit on our Board.

        Mr. Lathi serves as non-executive Chairman of the Board of Directors and is a member of the Audit Committee and the Compensation Committee.

David H. Edwab

        Mr. Edwab joined the Company in 1991 and has served the Company as non-executive Vice Chairman since his retirement as an executive officer and employee of the Company in October 2014. Prior thereto, he served the Company in various leadership roles, including Senior Vice President, Treasurer and Chief Financial Officer, Chief Operating Officer, President and executive Vice Chairman of the Company. Mr. Edwab is also a director of New York & Company, Inc., where he serves as chairman of their nomination and governance committee and is on their audit committee, and Vitamin Shoppe, Inc., where he serves on their audit committee and nomination and governance committee. Mr. Edwab is an inactive CPA and has experience in investment banking and private equity.

        Mr. Edwab's broad financial, operational and transactional experience in retailing and extensive experience serving on the boards of directors of retail companies qualify him to sit on our Board.

Douglas S. Ewert

        Mr. Ewert joined the Company in 1995 and has served as Chief Executive Officer since June 2011. Prior thereto he served the Company in various leadership roles, including General Merchandise Manager, Senior Vice President – Merchandising, Executive Vice President and Chief Operating Officer of K&G Men's Company, Executive Vice President and Chief Operating Officer of the Company and President.

        Mr. Ewert's demonstrated leadership and long-term experience with the Company, as well as extensive experience with men's retailing generally, qualify him to sit on our Board.

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Irene Chang Britt

        Ms. Britt is a former Fortune 500 C-Suite executive, having spent 30 years in companies such as Kimberly-Clark, Kraft Foods and Campbell Soup Co, in progressively higher leadership roles. Her more recent roles at Campbell were President, Pepperidge Farm, SVP Global Baking and Snacking, Global Chief Strategy Officer and President, North America Foodservice. Prior to Campbell, she held leadership roles with Kraft Foods and Kimberly-Clark. Ms. Britt currently serves on the boards of TerraVia Inc., including as Chairperson of the board and as member of their audit committee, and Dunkin Brands Group, Inc., including as Chair of their nominating and corporate governance committee and as a member of their audit committee, and formerly served on the Board of Sunoco, Inc. from November 2011 to October 2012.

        Ms. Britt's deep knowledge of the consumer products industry with extensive executive experience and expertise in global strategy development, marketing services and consumer insights, as well as extensive experience serving on the boards of directors of other public companies, qualify her to sit on our Board.

        Ms. Britt is a member of the Audit Committee and the Nominating and Corporate Governance Committee.

Rinaldo S. Brutoco

        Mr. Brutoco has served as President and Chief Executive Officer of ShangriLa Consulting, Inc., which is affiliated with the ShangriLa Group, a privately held consulting and merchant banking concern, and he is President of Seven Oaks Ranch, Inc. and Live Well Brands, Inc., both of which are manufacturers and distributors of organic products. He also is founder, President and Chief Executive Officer of the World Business Academy and has authored multiple books and articles on business theory, economics, corporate governance, corporate responsibility, energy policy and innovation.

        Mr. Brutoco's significant legal, financial, retailing and organizational experience, as well as extensive knowledge of new technologies and business methodologies, qualify him to sit on our Board.

        Mr. Brutoco is a member of the Audit Committee and the Nominating and Corporate Governance Committee.

Theo Killion

        Since November 2016, Mr. Killion has been a managing partner of The Sierra Institute, a Dallas based human resources consortium, and he was Vice Chairman of Herbert Mines Associates, an executive search firm, from May 2015 to March 2016. Mr. Killion worked for the Zale Corporation from January 2008 until July 2014, serving as Chief Executive Officer from January 2010 until his retirement in 2014. Prior to Zale, Mr. Killion served in a variety of positions at a number of iconic retailers including Tommy Hilfiger, Limited Brands (now L Brands), The Home Shopping Network and Macy's. Mr. Killion has served on the board of directors of Express, Inc. since April 2012 and Libbey, Inc. since May 2014. Mr. Killion intends to resign from both boards effective June 2017 concurrent with his election to the Tailored Brands board. He also served on the board of directors of The Zale Corporation when he was CEO, from September 2010 to May 2014.

        Mr. Killion's extensive experience as a senior executive and director in the retail industry, with particular expertise in merchandising and operations, human resources and organizational design, consumer brand marketing and advertising, and his ability to understand key issues for complex organizations such as business and leadership development and strategic planning qualify him to sit on our Board.

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Grace Nichols

        Ms. Nichols spent more than 20 years at Limited Brands, including 14 years as Chief Executive Officer of Victoria's Secret Stores from 1992 until she retired in January 2007. Prior to joining Limited Brands, Ms. Nichols held various senior merchandising positions in teen's and women's apparel at The Broadway Southern California divisions of Carter, Hawley, Hale, Inc. Ms. Nichols is also a director of New York & Company, Inc., where she serves as non-executive chairperson and is on the nomination and governance committee and the compensation committee.

        Ms. Nichols' extensive experience as a senior executive and director in the retail industry, with particular expertise in branding and merchandising, and her ability to understand and analyze the operational and management challenges associated with large retail companies qualify her to sit on our Board.

        Ms. Nichols serves as Chair of the Nominating and Corporate Governance Committee and is a member of the Compensation Committee.

William B. Sechrest

        Mr. Sechrest was a founding shareholder in the law firm of Winstead Sechrest & Minick P.C. from 1973 to 2006, specializing in finance and banking practice. Currently, Mr. Sechrest is actively involved as a founding shareholder and member of the board of directors of OCB Bancorp and SimpliPhi Power, Inc. (an energy management and storage company), is the chief financial officer of SimpliPhi Power, Inc., and is a member of the law firm Calhoun, Bhella & Sechrest LLP. Mr. Sechrest is a member of the American College of Real Estate Lawyers.

        Mr. Sechrest's extensive experience advising others with respect to developing, financing and protecting businesses and his combination of skill in legal, financial and organizational matters qualify him to sit on our Board.

        Mr. Sechrest is a member of the Audit Committee.

Sheldon I. Stein

        As of July 1, 2016, Mr. Stein is the President of Southern Glazers Wine and Spirits, North America's largest distributor of wine and spirits, and Chief Executive Officer of Glazer's Beer and Beverage, one of the country's largest distributors of malt products. Prior thereto, Mr. Stein was the President and Chief Executive Officer of Glazer's Distributors, one of the country's largest distributors of wine, spirits, and malt products. From 2008 until July 2010, Mr. Stein was a Vice Chairman of Global Investment Banking and Head of Southwest Investment Banking for Bank of America, Merrill Lynch. Before joining Merrill Lynch, Mr. Stein had been with Bear Stearns for over twenty years as a Senior Managing Director running Bear Stearns' Southwest Investment Banking Group and as a member of Bear Stearns' President Advisory Council. Mr. Stein is also a director of Alon USA Partners, LP, where he serves on the audit committee.

        Mr. Stein's long history of serving as a strategic advisor to chief executive officers of large public companies, as well as extensive experience and skills in corporate finance and mergers and acquisitions, qualify him to sit on our Board.

        Mr. Stein serves as Chairman of the Compensation Committee and is a member of the Nominating and Corporate Governance Committee.

        THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES NAMED ABOVE.

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DIRECTOR COMPENSATION

        Mr. Ewert, our sole employee director, does not receive any additional compensation for his service as a director. Each of our non-employee directors receives an annual cash retainer of $125,000. In addition, the Chairman of the Board, receives an additional annual cash retainer of $125,000. The Chair of the Audit Committee receives an additional annual cash retainer of $25,000, members of the Audit Committee who do not serve as the Chairman of the Board or a chair of another committee receive an additional annual cash retainer of $15,000 and any members of the Audit Committee who are also the Chairman of the Board or a chair of another committee receive an additional annual cash retainer of $10,000. The Chair of the Compensation Committee receives an additional annual cash retainer of $20,000 and the Chair of the Nominating and Corporate Governance Committee receives an additional annual cash retainer of $15,000.

        Beginning in June 2016, each non-employee director receives an annual equity grant equal to a number of shares of restricted stock or deferred stock units equal to $125,000 divided by the closing price of our common stock as reported on the New York Stock Exchange ("NYSE") on the date of grant, which will be the date of our annual meeting of shareholders. If a director is appointed to the Board prior to an annual meeting, the appointed director receives a grant of 2,500 restricted shares of our common stock. As a result, in fiscal 2016:

        All such awards are subject to the terms of the Tailored Brands, Inc. 2004 Long-Term Incentive Plan (the "2004 LTIP"). The restrictions on awards lapse one year after the date of grant or, if earlier, upon the occurrence of a change in control of the Company. All future awards will be granted under the Tailored Brands, Inc. 2016 Long-Term Incentive Plan (the "2016 LTIP").

Procedures and Processes for Determining Director Compensation

        As set forth in the Corporate Governance Guidelines (the "Guidelines"), the Compensation Committee reviews and determines, and makes recommendations to the full Board of Directors for approval, the form and amount of director compensation, including cash, equity-based awards, and other director compensation. The Guidelines further provide that, in determining director compensation, the following should be considered: (1) fair and competitive compensation for the time commitment to appropriately discharge the work required for a company of similar size and scope; (2) alignment of the director's interest with the long-term interests of the Company; and (3) a transparent and readily understandable compensation program. From time to time, the Compensation Committee reviews director compensation with its independent compensation consultants and makes recommendations to the full Board for approval of any changes to director compensation.

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Retirement Payments and Benefits for David Edwab

        Mr. Edwab retired as an executive officer and employee of the Company effective October 1, 2014, but continues to serve as the non-executive Vice Chairman of the Board. The Compensation Committee and the Board determined, based on the services he would perform and the Board's belief that the change in his role would be in the best interest of the Company, that his service as a director satisfied his responsibilities under his employment agreement and permitted the vesting of his equity awards, in each case as contemplated by his employment agreement. Therefore, in accordance with the terms of his employment agreement and in connection with his retirement, as of February 6, 2015, Mr. Edwab became entitled to receive the following:

        In addition, Mr. Edwab was required to provide up to ten hours a month of consulting services to us through February 6, 2017 for no additional consideration. Services provided in excess of ten hours a month were compensated at a rate equal to $750 per hour.

        For periods on or after July 1, 2015, Mr. Edwab is also compensated as a non-employee director.

Director Compensation Table

        The following table summarizes compensation paid to each non-employee director during the fiscal year ended January 28, 2017:

Name   Fees Earned or
Paid in
Cash
($)
  Stock/Units
Awards
($)
(1)(2)
  Option
Awards
($)
(2)
  All Other
Compensation
($)
(3)
  Total
($)
 

Dinesh S. Lathi

  121,690   198,874  (4)   2,769   323,333  

David H. Edwab

    125,000     156,249         1,779,898  (5)   2,061,147  

B. Michael Becker (6)

  150,000   156,249     3,319   309,568  

Irene Chang Britt

    140,000     156,249         3,960     300,209  

Rinaldo S. Brutoco

  140,000   156,249     3,319   299,568  

Grace Nichols

    140,000     156,249         6,384  (7)   302,633  

Allen I. Questrom (6)

  125,000   156,249     3,319   284,568  

William B. Sechrest (8)

    260,000     156,249         7,534  (9)   423,783  

Sheldon I. Stein

  145,000   156,249     3,319   304,568  

(1)
Represents aggregate grant date fair value of awards computed in accordance with FASB ASC topic 718 (for additional information see Note 13 of Notes to Consolidated Financial Statements including in our Annual Report on Form 10-K for the fiscal year ended January 28, 2017).

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(2)
The aggregate number of unvested stock awards and outstanding options held by each non-employee director as of January 28, 2017 was as follows:
 
  Aggregate Unvested
Restricted Stock
Outstanding as of
January 28, 2017
  Aggregate Unvested
Unit Awards
Outstanding as of
January 28, 2017
  Aggregate Options
Outstanding as of
January 28, 2017
 

Dinesh S. Lathi

  4,294   10,602    

David H. Edwab

    4,073     10,602      

B. Michael Becker

  4,073   10,602    

Irene Chang Britt

    4,073     10,602      

Rinaldo S. Brutoco

  4,073   10,602   3,000  

Grace Nichols

    4,073     10,602      

Allen I. Questrom

  4,073   10,602    

William B. Sechrest

    4,073     10,602      

Sheldon I. Stein

  4,073   10,602    
(3)
Includes amount of dividends paid to the director on unvested restricted stock awards.
(4)
Includes $42,625 related to the one-time award of 2,500 shares issued to Mr. Lathi upon his appointment as a director.
(5)
Includes retirement payments made to Mr. Edwab in accordance with his employment agreement. Also includes $7,177 paid by us in fiscal 2016 with respect to the non-participant portion of the insurance premiums for Mr. Edwab as a result of his participation in our group medical plan.
(6)
Mr. Becker and Mr. Questrom declined to stand for re-election for personal reasons.
(7)
Includes $3,065 paid by us in fiscal 2016 with respect to the non-participant portion of the insurance premiums for Ms. Nichols as a result of her participation in our group medical plan.
(8)
Mr. Sechrest served as Chairman of the Board until March 23, 2017.
(9)
Includes $4,215 paid by us in fiscal 2016 with respect to the non-participant portion of the insurance premiums for Mr. Sechrest as a result of his participation in our group medical and dental plans.


DIRECTOR NOMINATIONS AND QUALIFICATIONS

Responsibility for Selection of Director Candidates

        The Board is responsible for selecting director candidates. The Board has delegated the screening process for potential directors to the Nominating and Corporate Governance Committee, with the expectation that other members of the Board and executives of the Company will be asked to take part in the process as appropriate. The Nominating and Corporate Governance Committee identifies individuals qualified to become Board members and recommends such individuals to the Board for its consideration.

Director Qualifications

        The Nominating and Corporate Governance Committee is responsible for reviewing with the Board the requisite skills, experiences, and characteristics needed on the Board. When evaluating candidates, the Board takes into account the composition of the entire Board, including the requirement that a majority of Board members be independent; the diversity of experiences and backgrounds represented on the Board; the need for financial, business, public company and other expertise on the Board and its Committees; and the need to have directors who will work collegially to represent the best interests of the Company and its shareholders, its employees, and the communities in which we do business. This evaluation includes assessing the knowledge and experience of Board candidates in retail, finance, administration, operations, technology, risk management, social media, and marketing.

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        The Company considers diversity broadly to include differences of viewpoint, professional experience, individual characteristics, personal background, qualities, skills, qualifications, gender, and ethnicity/race. Although the Company does not have a formal policy with respect to the consideration of diversity in identifying director nominees, the Board believes that diversity in experiences, qualifications, backgrounds, and personal characteristics is important to the effectiveness of the Board's oversight of the Company. The Nominating and Corporate Governance Committee does not assign specific weight to particular factors and, depending on the current needs of the Board, may weigh certain factors more or less heavily.

        Director candidates should be able to provide insights and practical wisdom based on their experience and expertise. Directors are expected to prepare for, attend and participate in Board and Board Committee meetings, to ask direct questions and require straight answers, and to devote the time needed to properly discharge their responsibilities and duties as directors. Each Board member is expected to ensure that other existing and planned future commitments do not, and that they have no conflict of interest that would, materially interfere with the member's service as a director. Service on other boards and other commitments are considered by the Nominating and Corporate Governance Committee when reviewing Board candidates.

        The Board believes that each of its directors is knowledgeable and has significant insight relevant to the Company's businesses, has high ethical standards and personal integrity, takes his or her responsibility to the Board seriously, demonstrates strong leadership skills in his or her area of present and past expertise, has the interest, time available and commitment to fulfill his or her responsibilities as director, and has the ability and willingness to contribute with other directors and with management.

        Based on these factors, the Company believes that each of its directors is qualified to serve on its Board of Directors.

Identifying and Evaluating Nominees for Directors

        The Nominating and Corporate Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. The Committee regularly assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. The Committee also regularly engages in Board succession planning by assessing the need for additional Board members to fill vacancies or expand the size of the Board and the likelihood that the prospective nominee can satisfy the applicable criteria for directors. In addition, when the Committee seeks a new candidate for directorship, it seeks qualifications from the individual that will complement the attributes and perspectives of the other members of the Board. The Committee takes into consideration whether particular individuals satisfy the independence criteria set forth in the NYSE listing standards, together with any special criteria applicable to service on various committees of the Board.

        In the event that vacancies are anticipated, or otherwise arise, the Committee considers various potential candidates for director from any reasonable source, including through current Board members, current management, professional search firms, shareholders or other persons. These candidates will be evaluated at regular or special meetings of the Committee or through one-on-one meetings between Committee members and Board candidates and may be considered at any point during the year. In evaluating any potential nominee, the Committee seeks to achieve a diverse view of thoughts based on each Board member's knowledge, life experiences, capabilities, and professional and personal background.

        With respect to the nomination of Mr. Killion, he was originally recommended by Ms. Nichols, who is one of our directors. After research, interviews and further deliberation, the Committee recommended Mr. Killion to the full Board for inclusion in the list of nominees to be elected at the Annual Meeting. The Board will consider which committees Mr. Killion will serve on upon his election.

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Shareholder Nominees

        The policy of the Nominating and Corporate Governance Committee is to consider written recommendations from shareholders for positions on the Board of Directors. A shareholder who wishes to recommend a prospective nominee for director for general consideration by the Board should notify the Corporate Secretary of the Company or any member of the Committee in writing with whatever supporting material the shareholder considers appropriate, including the nominee's name and qualifications for Board membership. In evaluating the nominations, the Committee seeks to address the criteria set forth above. In addition, shareholders may nominate persons for election as directors at an annual shareholders' meeting if such nominations are made in accordance with the procedures set forth in the "Submitting Proposals For 2018 Annual Meeting" section on page 74 of this proxy statement. The Company received no shareholder nominations for the upcoming Annual Meeting.


CORPORATE GOVERNANCE

        Corporate governance is typically defined as the system that allocates duties and authority among a company's shareholders, Board of Directors, and management. The shareholders elect the Board and vote on extraordinary matters. The Board has the ultimate decision-making authority for the Company, except with respect to those matters specifically reserved to the shareholders. The Board has responsibility for the Company's long-term strategic plans, for establishing broad corporate policies, for hiring, overseeing and evaluating executive management, particularly the Chief Executive Officer, and for our overall performance and direction, but is not directly involved in our day-to-day operations. Management runs the Company's day-to-day operations. Board members keep informed about our business by participating in meetings of the Board and its Committees, by reviewing analyses, reports and other materials provided to them by Company management and through discussions with our Chief Executive Officer and other executive officers.

        Our Board of Directors currently consists of ten directors, including eight independent directors and two individuals who are not considered independent directors. If all of the nominees for election are elected, the Board will be comprised of seven independent directors and two non-independent directors.

        As noted, our business and affairs are managed under the direction of the Board of Directors to enhance the long-term value of the Company for our shareholders. In exercising its authority, the Board recognizes that the long-term interests of our shareholders are best advanced by appropriate consideration of other stakeholders and interested parties including employees and their families, customers, suppliers, communities and society as a whole. To assist the Board in fulfilling its responsibilities, the Board has adopted Corporate Governance Guidelines. The Guidelines are available at www.tailoredbrands.com under "Investor Relations – Corporate Governance – Governance Documents". The Board, with the assistance of the Nominating and Corporate Governance Committee, periodically reviews the Guidelines to ensure they comply with all applicable requirements of the NYSE rules. As contemplated by the Guidelines, the Board of Directors has regular executive sessions where non-management directors meet without management participation. The Chairman of the Board is the presiding director for each executive session.

Affirmative Determination of Directors Independence

        As set forth in the Guidelines, a majority of the members of the Board of Directors must qualify as independent directors in accordance with the applicable provisions of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules promulgated thereunder, and the applicable rules of the NYSE. In addition, at least two-thirds of the directors (or if two-thirds is not a whole number then at

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least the nearest whole number to two-thirds that is less than two-thirds) must meet the following qualifications:

        A director may not serve on more than four boards of directors of publicly-held companies (including our Board of Directors) unless the full Board determines that such service does not impair the director's performance of his or her duties to the Company. Directors are expected to report changes in their business or professional affiliations or responsibilities, including retirement, to the Chairman of the Board and the Chair of the Nominating and Corporate Governance Committee and will be expected to offer to resign if the Nominating and Corporate Governance Committee concludes that the director no longer meets our requirements for service on the Board. The Nominating and Corporate Governance Committee of the Board may establish from time to time additional qualifications for directors, taking into account the composition and expertise of the entire Board.

        The Board of Directors has affirmatively determined that each member of the Board, with the exception of Mr. Edwab and Mr. Ewert, and each nominee for director is independent in accordance with NYSE Listing Standards and our Guidelines and has no current material relationship with the Company, except as a director. When determining whether a director qualifies as independent, the Board, in accordance with NYSE rules, broadly considers all relevant facts and circumstances to determine whether the director has any material relationship with the Company, either directly or indirectly (as a partner, shareholder or officer of an organization that has a relationship with the Company), other than serving as one of our directors.

Board Leadership Structure

        The Board of Directors believes that it is beneficial to the Company and increases the effectiveness of the Board to have an independent director integrally involved in establishing and leading the Board agenda and interacting with management on a regular basis. As a result, the Board of Directors has appointed Mr. Lathi to serve as the non-executive Chairman of the Board. In his capacity as Chairman, Mr. Lathi consults regularly with Mr. Ewert and other members of management; has primary responsibility with Mr. Ewert for preparing the agenda for Board meetings; leads the meetings of the Board of Directors with Mr. Ewert; and chairs the executive sessions of the Board. We believe that the bifurcation of the chairman and chief executive officer roles leads to more prudent risk management practices and brings a level of oversight to management activities that may not otherwise exist if the chairman and chief executive officer was a single individual. The Board periodically reviews our leadership structure and

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retains the authority to modify the structure, as and when appropriate, to address our then current circumstances.

        In addition, the Company recently instituted an Office of the Chairman consisting of Mr. Lathi (non-executive Chairman of the Board), Mr. Ewert (Chief Executive Officer) and Bruce K. Thorn (President and Chief Operating Officer), which was created as a platform for these leaders to use their individual and collective expertise to work on strategic initiatives to improve our innovation, speed and quality of execution.

Board Role in Risk Oversight

        The Board and its Committees play an important role in overseeing management's identification, assessment, and mitigation of risks that are material to us. The Board has ultimate oversight responsibility for our risk management program and discharges many of its responsibilities and oversight functions with respect to risk through its Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee.

        In particular, the Audit Committee assists the Board in fulfilling its oversight responsibility relating to the performance of our system of internal controls, legal and regulatory compliance, our audit, accounting and financial reporting processes, and the evaluation of enterprise risk issues, particularly those risk issues not overseen by other committees. The Audit Committee also periodically reviews with our General Counsel legal matters, if any, that may have a material adverse impact on our financial statements, compliance with laws, and material reports, if any, received from regulatory agencies.

        The Compensation Committee is responsible for overseeing the management of risks relating to our compensation programs. In connection with its oversight responsibility, the Compensation Committee periodically reviews and evaluates our compensation programs to determine if there are any pay practices that may create, and any factors that may reduce the likelihood of, excessive risk taking by our employees to determine whether our compensation program presents a material risk to us. Based on its most current review and evaluation, the Compensation Committee has concluded that our compensation programs for our employees (including our executive officers) do not create risks that are reasonably likely to have a material adverse effect on us.

        The Nominating and Corporate Governance Committee oversees risks associated with corporate governance, business conduct, and ethics.

Attendance at the Annual Meeting of Shareholders

        Our Board of Directors holds a regular meeting in conjunction with the Annual Meeting of Shareholders. Therefore, the directors are encouraged to and generally attend our Annual Meeting of Shareholders. Nine of our ten current directors attended our 2016 Annual Meeting of Shareholders.

Communications with the Board of Directors

        The Board believes that it is important for shareholders and other interested parties to have a process by which to send communications to the Board. Accordingly, any shareholder or other interested party wishing to send written communications to any one or more members of our Board Committees or the Board of Directors may do so by sending communications to them in care of the Corporate Secretary, 6100 Stevenson Blvd., Fremont, California 94538 or via email at CorporateSecretary@tailoredbrands.com. All such communications will be reviewed by the Company and forwarded to Board members as appropriate.

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Committees of the Board of Directors and Meeting Attendance

        During the fiscal year ended January 28, 2017, the Board of Directors held five meetings. Each director attended at least 75% of the meetings of the Board of Directors and each committee of which the director was a member.

        The Board of Directors has established three standing committees: Audit, Compensation and Nominating and Corporate Governance. The committee(s) on which each director serves is set forth below:

 
  Audit   Compensation   Nominating and
Corporate Governance
Dinesh S. Lathi   M   M  
David H. Edwab            
Douglas S. Ewert            
B. Michael Becker   C        
Irene Chang Britt   M     M
Rinaldo S. Brutoco   M       M
Grace Nichols     M   C
Allen I. Questrom       M    
William B. Sechrest   M    
Sheldon I. Stein       C   M

C = Chair
M = Member

Audit Committee

        The Audit Committee operates under a written charter adopted by the Board which reflects SEC and NYSE rules relating to audit committees. The Board affirmatively determined that all members of the Audit Committee are "independent" in accordance with the NYSE Listing Standards and Rule 10A-3(b)(1) of the Exchange Act. In addition, the Board has determined that each of the members of the Audit Committee is "financially literate" and that each is an "audit committee financial expert," as that term is defined in the rules promulgated by the SEC pursuant to the Sarbanes-Oxley Act of 2002. The Audit Committee's responsibilities to the Board of Directors are detailed in the Audit Committee Charter, which can be found on the Company's website, and are discussed in further detail in the Audit Committee's report which appears on page 69 of this proxy statement. During the fiscal year ended January 28, 2017, the Audit Committee held seven meetings.

Compensation Committee

        The Compensation Committee operates under a written charter adopted by the Board which reflects SEC and NYSE rules relating to compensation committees. The Board affirmatively determined that each member of the Compensation Committee is "independent" in accordance with the NYSE Listing Standards, is a "non-employee director", as defined in Section 16 of the Exchange Act, and is an "outside director," as defined by Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). The Compensation Committee assists the Board in its oversight responsibilities related to the Company's compensation strategies, objectives, and programs; reviews and recommends to the Board for approval the principal elements of Board compensation; and reviews and approves compensation and benefit programs and pay levels for the Company's Chief Executive Officer and for executive officers below the

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chief executive officer level. The Compensation Committee's responsibilities to the Board of Directors are detailed in the Compensation Committee Charter which can be found on the Company's website. During the fiscal year ended January 28, 2017, the Compensation Committee held seven meetings. The Compensation Committee's report appears on page 51 of this proxy statement.

Nominating and Corporate Governance Committee

        The Nominating and Corporate Governance Committee operates under a written charter adopted by the Board which reflects SEC and NYSE rules relating to nominating committees. The Board affirmatively determined that all members of the Nominating and Corporate Governance Committee are "independent" in accordance with the NYSE Listing Standards. The Nominating and Corporate Governance Committee is responsible for reviewing and approving the overall corporate governance policies for the Company, for identifying, screening, recruiting and presenting director candidates to the Board of Directors consistent with criteria approved by the Board, nominating directors for Board seats and committee membership, and overseeing Board and Board Committee evaluations. The Nominating and Corporate Governance Committee's responsibilities to the Board of Directors are detailed in the Nominating and Corporate Governance Committee Charter which can be found on the Company's website. During the fiscal year ended January 28, 2017, the Nominating and Corporate Governance Committee held three meetings.

Director Equity Ownership

        The Board believes that directors should be shareholders and have a financial stake in the Company. Therefore, the Board requires directors to hold an ownership position in the Company, equal to the lesser of 12,000 shares or $625,000 in aggregate market value. New directors must reach the ownership requirement within five years of becoming a director. Each director has met the requirement, except Mr. Lathi, who has until the end of fiscal 2021 to do so. If elected, Mr. Killion will have until the end of fiscal 2022 to meet the ownership requirement.

Corporate Governance Materials Available on the Company's Web Site

        Information relating to the Company's corporate governance, including the following governance documents, are available at the Company's website (www.tailoredbrands.com) under "Investors – Corporate Governance – Governance Documents":

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The Company's shareholders may obtain printed copies of these documents by writing to Tailored Brands, Inc., Corporate Secretary, 6100 Stevenson Blvd., Fremont, CA 94538 or via email at CorporateSecretary@tailoredbrands.com.

Compensation Committee Interlocks and Insider Participation

        During fiscal 2016, none of our executive officers served as (i) a member of the compensation committee (or other board committee performing equivalent functions) of another entity, one of whose executive officers served on the Compensation Committee, (ii) a director of another entity, one of whose executive officers served on the Compensation Committee, or (iii) a member of the compensation committee (or other board committee performing equivalent functions) of another entity, one of whose executive officers served as a director of the Company.

        During fiscal 2016, no member of the Compensation Committee was an officer or employee of the Company or any of our subsidiaries, or was formerly an officer of the Company or any of our subsidiaries, or had any relationships requiring disclosure by us under Item 404 of Regulation S-K of the General Rules and Regulations of the SEC or the NYSE Listing Standards.


PROPOSAL 2:
ADOPTION OF AN AMENDMENT TO THE 2016
LONG-TERM INCENTIVE PLAN AND REAPPROVAL
OF MATERIAL TERMS OF PERFORMANCE GOALS

GRAPHIC

        On April 12, 2017, pursuant to authority delegated by the Board on March 16, 2017, the Compensation Committee unanimously adopted, subject to approval by our shareholders, an amendment (the "Amendment") to the Tailored Brands, Inc. 2016 Long-Term Incentive Plan to: (1) expand the definition of "Preexisting Plan" to apply to The Men's Wearhouse, Inc. 1996 Long-Term Incentive Plan (the "1996 LTIP") in addition to the Tailored Brands, Inc. 2004 Long-Term Incentive Plan (the "2004 LTIP"); (2) increase the number of shares of common stock available for issuance under the 2016 LTIP by 2.9 million shares; (3) revise the share recirculation provision set forth in Section 4.2 of the 2016 LTIP; and (4) impose a minimum vesting requirement on all Awards (as defined below) under the 2016 LTIP. In this Proposal 2, we are asking our shareholders to approve the 2016 LTIP, as proposed to be amended by the Amendment, and reapprove the material terms of the performance goals for Cash-Based Awards, Performance Stock Awards and Performance Unit Awards (each, as defined below) under the 2016 LTIP for purposes of compliance

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with Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations promulgated thereunder ("Section 162(m)").

        The purpose of the 2016 LTIP is to advance the interests of the Company and its shareholders and promote the long-term growth of the Company by providing participants with incentives to maximize shareholder value and to otherwise contribute to the success of the Company, thereby aligning the interests of participants with the interests of the Company's shareholders and providing them additional incentives to continue in their employment or affiliation with the Company. The 2016 LTIP serves these purposes by making equity-based and equity-related awards ("Awards") available for grant to eligible participants in the form of:

The Proposed Amendment

        The proposed Amendment makes the following changes to the 2016 LTIP.

        Expand Definition of "Preexisting Plan" to Apply to the 1996 LTIP.    The Amendment expands the definition of "Preexisting Plan" to also apply to the 1996 LTIP. The proposed expansion of the definition of "Preexisting Plan" subjects the 1996 LTIP to the share recirculation provision set forth in Section 4.2 of the 2016 LTIP and, as a result, any shares of common stock subject to outstanding awards under the 2004 LTIP or the 1996 LTIP as of May 5, 2016 that on or after May 5, 2016 cease for any reason to be subject to such awards other than by reason of exercise or settlement of the awards to the extent they are exercised for or settled in shares of common stock will immediately become available to be issued pursuant to an Award granted under the 2016 LTIP and would not count against the 9.3 million share limit (additional revisions to the share recirculation provision are described below in "– Revisions to Share Recirculation Provision". We believe that revising the definition of "Preexisting Plan" provision to also apply to the 1996 LTIP is consistent with the 2016 LTIP's treatment of the 2004 LTIP and would also advance the purposes described below in "– Increase in Share Authorization".

        Increase in Share Authorization.    We are proposing to increase the maximum aggregate number of shares of common stock available for issuance under the 2016 LTIP by 2.9 million shares from 6.4 million shares to 9.3 million shares. The Board and management believe equity compensation is a valuable tool to maintain the Company's ability to attract and retain key personnel, continue to provide them with strong incentives to contribute to the Company's future success and align the interests of our personnel with the

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interests of our shareholders. Accordingly, we strongly believe that the Amendment is important to our future success. If our shareholders approve the Amendment, we would expect to have a sufficient number of shares of common stock available for issuance under the 2016 LTIP to continue to provide equity-based incentive compensation through fiscal 2019 and we would not intend to request shareholder approval of additional shares under any employee equity incentive plan prior to fiscal 2019. If our shareholders do not approve the Amendment, we may not have sufficient shares of common stock available for issuance under the 2016 LTIP to fully execute our equity compensation program beyond fiscal 2017. We believe that such a lack of available equity would materially limit our ability to attract, retain and motivate individuals integral to achieving our business goals and objectives and place us at a competitive disadvantage.

        We recognize that equity awards dilute existing shareholders. In reaching our conclusion as to the appropriate number of shares of common stock to seek to add to the 2016 LTIP in this proposal, we reviewed, among other things, our burn rate. Burn rate measures how rapidly a company is depleting its shares reserved for equity compensation, and is commonly used by investors and proxy advisory firms to evaluate proposals relating to equity compensation plans. Our average burn rate over the three years ended January 28, 2017 (calculated as equity-based awards granted at target under our equity compensation plan for the relevant year, divided by average basic common shares outstanding for that year) is approximately 2.1%. Our average burn rate over the three years ended January 28, 2017 is generally consistent with the recent median practice among our peers for compensation benchmarking purposes, and is well below the industry benchmark published by a major proxy advisory firm indicating an excessive burn rate. The potential dilution resulting from issuing the aggregate number of shares of common stock that would be available for issuance under the 2016 LTIP upon approval of this proposal (i.e., the approximately 5.9 million shares currently remaining for issuance plus the additional 2.9 million shares requested for issuance) and taking into account outstanding awards, would be 19.2% on a fully-diluted basis.

        For more information concerning the number of shares of common stock available for issuance under the 2016 LTIP and the outstanding awards under the 2016 LTIP and its predecessor plans, see "– New Plan Benefits" and "Equity Compensation Plan Information" on pages 30 and 31 of this proxy statement, respectively.

        Revise Share Recirculation Provision.    The 2016 LTIP's share recirculation provision provides that the following shares of common stock will count against the aggregate number of shares of common stock available for issuance under the 2016 LTIP: (1) shares withheld from payment of an Award (or an award under the 2004 LTIP) to satisfy tax obligations with respect to the Award; (2) shares tendered in payment of the Option Price of an Option (or an option under the 2004 LTIP); and (3) shares subject to a Stock Appreciation Right (or a stock appreciation right under the 2004 LTIP) that is settled in shares. The Amendment's share recirculation provision provides that the following shares of common stock will not become available to be issued pursuant to an Award: (1) shares withheld from payment of an Award (or an award under the 1996 LTIP or the 2004 LTIP) to satisfy tax obligations with respect to the Award; (2) shares tendered in payment of the Option Price of an Option (or an option under the 1996 LTIP or the 2004 LTIP); and (3) shares subject to a Stock Appreciation Right (or a stock appreciation right under the 1996 LTIP or the 2004 LTIP) that is settled in shares. We believe that the proposed revisions to the share recirculation provision conform the 2016 LTIP's share recirculation provision to the customary structure of contemporary share recirculation provisions by eliminating the possibility that shares subject to awards under the 1996 LTIP or the 2004 LTIP will count against the share authorization under multiple plans.

        Impose Minimum Vesting Requirements on All Award Types.    The 2016 LTIP provides that no Option or SAR will vest until at least one year following the grant date of the Award, except in the case of death, disability or change in control; provided, however, that up to 5% of the aggregate number of shares that may be issued under the 2016 LTIP may be subject to Awards that do not meet such vesting requirements. The Amendment extends this minimum vesting requirement to all Award types and

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provides that no Award under the 2016 LTIP will vest until at least one year following the grant date of the Award, except in the case of death, disability or change in control; provided, however, that up to 5% of the aggregate number of shares that may be issued under the 2016 LTIP may be subject to Awards that do not meet such vesting requirements. We believe that extending the minimum vesting requirements to apply to all Awards is a developing best practice and reflects our commitment to good corporate governance.

Section 162(m) Reapproval

        In connection with the approval of the 2016 LTIP, as proposed to be amended by the Amendment, we are also asking our shareholders to reapprove the material terms of the performance goals for Cash-Based Awards, Performance Stock Awards and Performance Unit Awards set forth in the 2016 LTIP. Our shareholders approved these same performance goals at our 2016 Annual Meeting of Shareholders. This reapproval will provide us with the continued flexibility to grant awards under the 2016 LTIP that qualify as "performance-based" compensation under Section 162(m). Section 162(m) generally limits the deduction that we may take for certain remuneration paid in excess of $1,000,000 to any "covered employee" (as defined in Section 162(m)) in any one taxable year. Compensation that qualifies as "performance-based" is excluded for purposes of calculating the amount of compensation subject to the $1,000,000 million limit. One of the requirements that must be satisfied to qualify as "performance-based" compensation is that the material terms of the performance goals under which the compensation may be paid must be disclosed to and approved by a majority vote of the company's shareholders at least once every five years. For purposes of Section 162(m), the material terms of the performance goals generally include: (1) the individuals eligible to receive compensation upon achievement of performance goals; (2) the business criteria on which the performance goals may be based; and (3) the maximum amount that may be paid to an individual upon attainment of the performance goals.

        Each of these material terms as they relate to the 2016 LTIP is discussed below, and by approving the 2016 LTIP, as proposed to be amended by the Amendment, our shareholders also will be reapproving the material terms of the performance goals under the 2016 LTIP for purposes of the shareholder approval requirements of Section 162(m).

Key Plan Features

        The 2016 LTIP, as proposed to be amended by the Amendment, includes provisions designed to protect the interests of our shareholders and reflect corporate governance best practices, including:

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Summary of the 2016 Long-Term Incentive Plan as Proposed to be Amended

        The material features of the 2016 LTIP, as it is proposed to be amended by the Amendment, are summarized below. This summary is qualified in its entirety by reference to the complete text of the 2016 LTIP, as it is proposed to be amended by the Amendment, which is attached to this Proxy Statement as Appendix A.

Administration

        The Compensation Committee will administer the 2016 LTIP. The 2016 LTIP requires the Compensation Committee to be comprised of at least two directors, each of whom will be an "outside director" (within the meaning of Section 162(m) of the Code and the Treasury Regulations promulgated thereunder) and a "non-employee" director (within the meaning of Rule 16b-3 under the Exchange Act). The Compensation Committee currently consists of three directors, each of whom is an "outside director" and a "non-employee director".

        In its capacity as plan administrator, the Compensation Committee will have full and exclusive power to interpret and apply the terms and provisions of the 2016 LTIP and Awards made under the 2016 LTIP, and to adopt such rules, regulations and guidelines for implementing the 2016 LTIP as the Compensation

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Committee may deem necessary or proper. In carrying out its authority under the Plan, the Compensation Committee will have full and final authority and discretion, including the following rights, powers and authorities to: (1) determine the participants to whom and the times at which Awards will be made; (2) determine the number and exercise price of shares of our common stock covered in each Award; (3) determine the terms, provisions and conditions of each Award; (4) accelerate the time at which any outstanding Award will vest; (5) prescribe, amend and rescind rules and regulations relating to administration of the 2016 LTIP; and (6) make all other determinations and take all other actions deemed necessary, appropriate or advisable for the proper administration of the 2016 LTIP.

        All determinations and decisions made by the Compensation Committee pursuant to the provisions of the Plan and all related orders and resolutions of the Compensation Committee will be final, conclusive and binding on all parties.

        With respect to each Award granted under the 2016 LTIP, we will enter into a written or electronic award agreement with the participant which describes the terms and conditions of the Award, including (1) the type of Award and when and how it may be exercised or earned, (2) any exercise price associated with the Award, (3) how the Award will or may be settled and (4) any other applicable terms and conditions affecting the Award.

Eligibility

        The Compensation Committee may select any (1) employees of the Company and its affiliates, (2) persons who have agreed to become employees of the Company and its affiliates and are expected to become such within three months of the date of the Award, (3) non-employee directors of the Company and (4) consultants who render services to the Company or its affiliates (other than the prohibited services described in the 2016 LTIP) to receive Awards under the 2016 LTIP. As of the Record Date, there were approximately 23,000 employees of the Company and its affiliates and nine non-employee directors of the Company. We are unable to reasonably estimate the number of third-party consultants who will be eligible to receive Awards under the 2016 LTIP. We have not granted any Awards under the 2016 LTIP to consultants and we expect that any such Awards would be rare.

Available Common Stock

        Subject to the adjustments discussed below, the aggregate number of shares of our common stock available for the grant of Awards under the 2016 LTIP will be 9.3 million. The shares of our common stock that may be delivered under the 2016 LTIP may consist of (1) treasury shares and (2) authorized and unissued shares of common stock.

        Upon the grant of an ISO, a NQSO or a SAR, we will reduce the number of shares of our common stock available for issuance under the 2016 LTIP by an amount equal to the number of shares of common stock subject to such Award. Upon the grant of an Award other than an ISO, a NQSO or a SAR (a "Full Value Award"), we will reduce the number of shares of our common stock available for issuance under the 2016 LTIP by an amount equal to the number of shares of common stock subject to such Award multiplied by 2.0. In the case of any SAR which is settled in shares of our common stock, the number of shares of common stock subject to the SAR will be counted against the aggregate number of shares of our common stock available for future Awards for every share of common stock subject to the SAR, regardless of the number of shares of common stock used to settle the SAR upon exercise.

        The following shares of our common stock may be awarded under the 2016 LTIP and do not count against the 9.3 million share limit:

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        During any fiscal year of the Company, the Compensation Committee may not grant any employee:

        The maximum number of shares of common stock subject to Awards granted during a single fiscal year to any non-employee director, together with any cash fees paid to such non-employee director during the fiscal year, may not exceed $500,000 in total value (based on the grant date fair value of such Awards for financial reporting purposes).

        If and to the extent necessary or appropriate to reflect any stock dividend, extraordinary dividend, stock split or share combination or any recapitalization, merger, consolidation, exchange of shares, spin-off, liquidation or dissolution of the Company or other similar transaction affecting our common stock, the Compensation Committee will adjust the number of shares of common stock available for issuance under the 2016 LTIP, any other limit applicable under the 2016 LTIP with respect to the number of Awards that may be granted thereunder, and the number, class and exercise price (if applicable) or base price (if applicable) of any outstanding Award, and/or make such substitution, revision or other provisions or take such other actions with respect to any outstanding Award or the holder or holders thereof, in each case as it determines to be equitable.

        On the Record Date, the closing price of our common stock on the NYSE was $12.08.

Types of Awards

        Options.    The Compensation Committee may grant Options at any time during the term of the 2016 LTIP in such number and upon such terms as it determines; provided, that to the extent that the aggregate fair market value (as defined in the 2016 LTIP) of shares of our common stock with respect to which ISOs first become exercisable by a participant in any calendar year exceeds $100,000, such Options will be treated as NQSOs. The exercise price of any Option will at least equal the fair market value of our common stock (i.e., the closing price of the our common stock on the NYSE) on the date the Option is granted, and may be paid (1) in cash, (2) by tendering previously-acquired shares of our common stock, (3) by a cashless exercise or (4) through any other method approved by the Compensation Committee. The Compensation Committee will also determine the term of the option (which may not exceed ten years), the vesting terms and conditions and any other terms and conditions of the Option, all of which will be reflected in the related award agreement. The award agreement will specify whether the Option is intended to be an ISO or a NQSO. The Compensation Committee may grant all of the common stock available for issuance under the 2016 LTIP with respect to ISOs. However, the Compensation Committee may only grant ISOs to employees of the Company or its subsidiaries, and ISOs will be subject to certain

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additional restrictions, including without limitation compliance with the requirements of Section 422 of the Code.

        Stock Appreciation Rights.    The Compensation Committee may grant SARs at any time during the term of the 2016 LTIP in such number and upon such terms as it determines. The exercise price of any SAR will at least equal the fair market value of our common stock on the date the SAR is granted. The Compensation Committee will also determine the term of the SAR (which may not exceed ten years), the vesting terms and conditions and any other terms and conditions of the SAR, all of which will be reflected in the related award agreement. Upon exercise of a SAR, a participant will be entitled to receive a payment from the Company in an amount determined by multiplying the excess of the fair market value of a share of our common stock on the date of exercise over the grant price of the SAR by the number of shares of our common stock with respect to which the SAR is exercised. A SAR may be settled in our common stock, cash or a combination thereof, as determined by the Compensation Committee.

        Restricted Stock.    The Compensation Committee may grant shares of Restricted Stock at any time during the term of the 2016 LTIP in such number and upon such terms as it determines. The Compensation Committee will determine the terms, conditions and any vesting, transferability and forfeiture restrictions applicable to each Restricted Stock Award, all of which will be reflected in the related award agreement. During the period that the shares of Restricted Stock remain subject to forfeiture, (1) we may retain the certificates representing shares of Restricted Stock, (2) a participant may not sell or otherwise transfer the shares of Restricted Stock and (3) unless otherwise provided in the related award agreement, a participant will generally be entitled to exercise full voting rights and receive all dividends paid with respect to the shares of Restricted Stock (except that receipt of any dividends will be subject to the same terms, conditions and restrictions as apply to the shares of Restricted Stock).

        Deferred Stock Unit Awards.    The Compensation Committee may grant DSUs at any time during the term of the 2016 LTIP in such number and upon such terms as it determines. The value of any DSU will equal the fair market value of a share of our common stock. The Compensation Committee will determine the terms, conditions and any vesting, transferability and forfeiture restrictions applicable to each DSU Award, all of which will be reflected in the related award agreement. The award agreement for a DSU may also specify that the holder of the DSU Award will be entitled to the payment of dividend equivalents under the Award. Any dividend equivalents paid under a DSU Award will be subject to the same vesting, transferability and forfeiture restrictions as the Award with respect to which such dividend equivalents are to be paid. A DSU may be settled in our common stock, cash or a combination thereof, as determined by the Compensation Committee at such time as is specified in the applicable award agreement.

        Performance Awards.    The Compensation Committee may grant Cash-Based Awards, Performance Stock Awards and Performance Unit Awards at any time during the term of the 2016 LTIP in such number and upon such terms as it determines. The Compensation Committee will determine the terms, conditions and any vesting, transferability and forfeiture restrictions applicable to each Cash-Based Award, Performance Stock Award and Performance Unit Award, all of which will be reflected in the related award agreement. Such restrictions will be based upon the attainment of performance goals determined by the Compensation Committee. The Compensation Committee will base the performance goals on one or more of the following performance criteria enumerated in the 2016 LTIP:

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        As determined by the Compensation Committee, the selected performance criteria may relate to the individual participant, the Company, one or more business units, subsidiaries, divisions, departments, regions, stores, segments, products or functions of the Company or its affiliates, or the Company as a whole, and may be measured on a per share, per capita, per unit, per square foot, per employee, per store, per customer or other objective basis, on a pre-tax or after-tax basis or on an absolute basis or in relative terms (including, but not limited to, the passage of time and/or against other companies, financial metrics and/or an index).

        With respect to holders who are not covered employees and who, in the Compensation Committee's judgment, are not likely to be covered employees at any time during the applicable performance period or during any period in which Cash-Based Award, Performance Stock Award or Performance Unit Award may be paid following a performance period, the performance objectives established for the performance period may consist of any objective or subjective corporate-wide or subsidiary, division, operating unit or individual measures, whether or not listed in the 2016 LTIP, and such performance objectives will be subject to such other special rules and conditions as the Compensation Committee may establish at any time.

        To the extent permitted by Section 162(m) of the Code, the Compensation Committee may provide that amounts relating to or arising from one or more of the following may be included or excluded from the performance goals on a non-discretionary basis: (1) unusual, infrequently occurring or non-recurring events affecting the Company and/or its affiliates; (2) changes in applicable tax laws; (3) changes in accounting principles; (4) changes related to restructured or discontinued operations; (5) restatement of prior financial results; and (6) any other unusual, infrequently occurring or non-recurring gain or loss including those described in the Financial Accounting Standards Board's authoritative guidance, footnotes to the Company's financial statements, in management's discussion and analysis of financial condition and results of operations appearing in the Company's reports on Form 10-K, 10-Q or 8-K for the applicable year and/or appearing in a press release reporting the Company's earnings for any fiscal period. Under the 2016 LTIP, the Compensation Committee has the authority to exercise negative discretion and reduce (but not increase with respect to holders of Awards who are Covered Employees or who, in the Compensation Committee's judgment, are likely to be Covered Employees) the amount of a Cash-Based Award, Performance Stock Award or Performance Unit Award actually paid to a participant.

        For each Cash-Based Award, Performance Stock Award or Performance Unit Award granted to a covered employee, the Compensation Committee will establish the applicable performance goals while the outcome of the applicable performance goals is substantially uncertain, but in any event prior to the earlier to occur of (1) 90 days after the commencement of the period of service to which the performance goal relates and (2) the lapse of 25 percent of the period of service. Each performance goal must be objective such that a third party having knowledge of the relevant facts could determine whether the goal is met.

        Subject to the terms and conditions of the 2016 LTIP, each holder of a Performance Stock Award will have all the rights of a shareholder with respect to the shares of our common stock issued to the holder pursuant to the Award during any period in which such issued shares of our common stock are subject to forfeiture and restrictions on transfer, including the right to vote such shares of stock; provided, however, that the holder shall not receive payment of dividends until and only to the extent that the performance goals applicable to such Award are satisfied. An award agreement for a Performance Unit Award may specify that the holder of such Award will be entitled to the payment of dividend equivalents under the Award; provided, however, that the holder will not receive payment of such dividend equivalents until and only to the extent that the performance goals applicable to such Award are satisfied. A Performance Unit Award may be settled in our common stock, cash or a combination thereof, as determined by the Compensation Committee.

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        Other Stock-Based Awards.    The Compensation Committee may grant Other Stock-Based Awards at any time during the term of the 2016 LTIP in such number and upon such terms as it determines. The Compensation Committee will determine the terms, conditions and any vesting, transferability and forfeiture restrictions applicable to each Other Stock-Based Award, all of which will be reflected in the related award agreement. Other Stock-Based Awards may include Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States. The award agreement for an Other Stock Based Award may also specify that the holder of the Other Stock Based Award will be entitled to the payment of dividend equivalents under the Award. Any dividend equivalents paid under an Other Stock Based Award will be subject to the same vesting, transferability and forfeiture restrictions as the Award with respect to which such dividend equivalents are to be paid. Other Stock-Based Awards may be settled in our common stock, cash or a combination thereof, as determined by the Compensation Committee at such time as is specified in the applicable award agreement.

Termination of Employment or Service

        The Compensation Committee will determine the extent to which each Award granted under the 2016 LTIP will vest and the extent to which a participant will have the right to exercise and/or settle the Award in connection with a participant's termination of employment or service. Such provisions, which will be reflected in the related award agreement, need not be uniform among all Awards and may reflect distinctions based on the reasons for termination.

Change in Control

        If a Change in Control (as defined in the 2016 LTIP) occurs while unexercised or unvested Awards remain outstanding under the 2016 LTIP, then, except as otherwise provided in an Award agreement or other agreement between the holder of the Award and the Company, the Compensation Committee will effect one or more of the following alternatives (which may vary among Awards and among individual holders of Awards granted under the 2016 LTIP):

        (1)   accelerate the time at which some or all of the outstanding Awards may be exercised and specify the time at which all such Awards that remain unexercised will terminate;

        (2)   require (A) the mandatory surrender to the Company of some or all of the outstanding Awards as of a date before or after such Change in Control and (B) the payment by the Company of a cash amount per share to the holders of the Awards upon such surrender equal to the excess, if any, of the per share price offered to shareholders of the Company in connection with such Change in Control over the exercise prices applicable to such Awards;

        (3)   in accordance with the terms of the 2016 LTIP, provide for the assumption or substitution of some or all of the outstanding Awards by a party to the Change in Control transaction that is employing, or affiliated or associated with, the holder of the Awards in the same or a substantially similar manner as the Company prior to the Change in Control;

        (4)   adjust the number of shares and class or series of our common stock covered by an Award so that, when exercised, the Award will cover the number of shares and class or series of our common stock or other securities or property (including, without limitation, cash) the holder of the Award would have been entitled to in connection with the Change in Control if, immediately prior to the Change in Control, the holder of the Award had been the holder of record of the number of shares of our common stock then covered by the Award; or

        (5)   make such adjustments to outstanding Awards then outstanding as the Compensation Committee deems appropriate to reflect such Change in Control.

        If the Compensation Committee chooses to effect one or more of the alternatives set forth in paragraphs (3), (4) or (5) above, it may accelerate the time at which some or all outstanding Awards may be exercised.

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Transferability

        Except as otherwise provided in a related award agreement or in a domestic relations court order, (1) a participant may not transfer, sell, assign, pledge, hypothecate, encumber or otherwise dispose of an Award, except by will or the laws of descent and distribution and (2) during a participant's lifetime, only the participant or his or her guardian or legal representative may exercise an Award.

Forfeiture

        If a Forfeiture Determination (as defined in the 2016 LTIP) is made by the Compensation or a court of competent jurisdiction, as applicable, the Board of Directors may determine that some or all Awards granted to any participant (including vested Awards that have been exercised, vested Awards that have not been exercised, and Awards that have not yet vested) and some or all net proceeds realized with respect to any such Awards (including any dividends that have been paid with respect to shares of the common stock covered by the Award) will be forfeited to the Company on such terms as determined by the Board of Directors. The Compensation Committee may specify in an award agreement that the rights, payments and benefits of an Award granted under the 2016 LTIP will be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award.

No Rights as a Shareholder

        Except as otherwise provided in the 2016 LTIP or in a related award agreement, a participant will not have any rights as a shareholder with respect to our common stock covered by an Award unless and until the participant becomes the record holder of such common stock.

Repricing

        The 2016 LTIP expressly prohibits the Board or Compensation Committee from amending the terms of an outstanding Award to (1) reduce the exercise price or grant price of an outstanding Option or SAR or (2) cancel an outstanding Option or SAR in exchange for a payment of cash or other property if the aggregate fair market value of such Option or SAR is less than the gross exercise price or grant price of such Option or SAR, in each case without shareholder approval.

Clawback

        If the Company is required to prepare an accounting restatement due to its material noncompliance with any financial reporting requirement under applicable securities laws, the current or former holder who was a current or former executive officer of the Company or an affiliate must forfeit and repay to the Company any compensation awarded under the 2016 LTIP to the extent specified in any clawback or similar policy that may be implemented by the Company from time to time, including such policies that may be implemented after the date an Award is granted, pursuant to the listing standards of any national securities exchange or association on which the Company's securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law, or other agreement or arrangement with a holder.

Effective Date and Term

        The Amendment will become effective upon its approval by the shareholders and, unless earlier terminated, the 2016 LTIP will continue indefinitely until terminated in accordance with its terms.

Amendment or Termination

        The Board or Compensation Committee may amend or terminate the 2016 LTIP at any time, except that no amendment or termination may be made without shareholder approval if such approval is required by applicable law or stock exchange rules.

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U.S. Federal Income Tax Consequences

        The following is a brief summary of the general U.S. federal income tax consequences relating to participation in the 2016 LTIP. This summary is based on U.S. federal tax laws and Treasury Regulations in effect on the date of this proxy statement and does not purport to be a complete description of the U.S. federal income tax laws. In addition, this summary does not constitute tax advice or describe federal employment, state, local or foreign tax consequences. Each participant should consult with his or her tax advisor concerning the U.S. federal income tax and other tax consequences of participating in the 2016 LTIP.

Incentive Stock Options

        The Company intends for ISOs to qualify for special treatment available under Section 422 of the Code. A participant will not recognize taxable income when an ISO is granted, and we will not receive a deduction at that time. A participant will not recognize ordinary income upon the exercise of an ISO, provided that the participant was, without a break in service, an employee of the Company or a subsidiary during the period beginning on the grant date of the ISO and ending on the date three months prior to the date of exercise (one year prior to the date of exercise if the participant's employment is terminated due to disability).

        If the participant does not sell or otherwise dispose of our common stock acquired upon the exercise of an ISO within two years from the grant date of the ISO or within one year after the participant receives the common stock, then, upon disposition of such common stock, any amount realized in excess of the exercise price will be taxed to the participant as a capital gain, and we will not be entitled to a corresponding deduction. The participant generally will recognize a capital loss to the extent that the amount realized is less than the exercise price.

        If the foregoing holding period requirements are not met, the participant generally will recognize ordinary income at the time of the disposition of the common stock in an amount equal to the lesser of: (1) the excess of the fair market value of the common stock on the date of exercise over the exercise price; or (2) the excess, if any, of the amount realized upon disposition of the common stock over the exercise price, and we will be entitled to a corresponding deduction. Any amount realized in excess of the value of the common stock on the date of exercise will be capital gain. If the amount realized is less than the exercise price, the participant generally will recognize a capital loss equal to the excess of the exercise price over the amount realized upon the disposition of the common stock.

        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.

Nonqualified Stock Options

        A participant will not recognize any income when a NQSO is granted, and we will not receive a deduction at that time. However, when a NQSO is exercised, a participant will recognize ordinary income equal to the excess, if any, of the fair market value of our common stock that the participant purchased on the date of exercise over the exercise price. If a participant uses our common stock or a combination of our common stock and cash to pay the exercise price of a NQSO, the participant will recognize ordinary income equal to the value of the excess of the number of shares of our common stock that the participant purchases over the number of shares of our common stock that the participant surrenders, less any cash the participant uses to pay the exercise price. When a NQSO is exercised, we will be entitled to a deduction equal to the ordinary income that the participant recognizes.

        If the amount a participant receives upon disposition of our common stock that the participant acquired by exercising a NQSO is greater than the sum of the aggregate exercise price that the

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participant paid plus the amount of ordinary income recognized by the participant upon exercise, the excess will be treated as a long-term or short-term capital gain, depending on whether the participant held the common stock for more than one year after the participant acquired them by exercising the NQSO. Conversely, if the amount a participant receives upon disposition of the common stock that the participant acquired by exercising a NQSO is less than the sum of the aggregate exercise price the participant paid plus the amount of ordinary income recognized by the participant upon exercise, the difference will be treated as a long-term or short-term capital loss, depending on whether the participant held the common stock for more than one year after the participant acquired them by exercising the NQSO.

Stock Appreciation Rights

        A participant will not recognize taxable income when a SAR is granted, and we will not receive a deduction at that time. When a SAR is exercised, a participant will recognize ordinary income equal to the excess of the cash and/or the fair market value of the common stock the participant receives over the aggregate exercise price of the SAR, if any, and we will be entitled to a corresponding deduction. If the amount a participant receives upon disposition of the common stock that the participant acquired by exercising a SAR is greater than the sum of the aggregate exercise price that the participant paid plus the amount of ordinary income recognized by the participant upon exercise, the excess will be treated as a long-term or short-term capital gain, depending on whether the participant held the common stock for more than one year after the participant acquired them by exercising the SAR. Conversely, if the amount a participant receives upon disposition of the common stock that the participant acquired by exercising a SAR is less than the sum of the aggregate exercise price that the participant paid plus the amount of ordinary income recognized by the participant upon exercise, the difference will be treated as a long-term or short-term capital loss, depending on whether the participant held the common stock for more than one year after the participant acquired them by exercising the SAR.

Restricted Stock

        Unless a participant makes an election under Section 83(b) of the Code (a "Section 83(b) Election"), the participant generally will not recognize taxable income when Restricted Stock is granted, and we will not receive a deduction at that time. Instead, a participant will recognize ordinary income when the Restricted Stock vests (i.e., when the underlying shares of common stock are freely transferable or not subject to a substantial risk of forfeiture) equal to the fair market value of the common stock that the participant receives when the terms, conditions and restrictions have been met, less any consideration paid for the Restricted Stock, and we generally will be entitled to a deduction equal to the income that the participant recognizes.

        If the amount a participant receives upon disposition of these shares of common stock is greater than the fair market value of the common stock when the Restricted Stock vested, the excess will be treated as a long-term or short-term capital gain, depending on whether the participant held the common stock for more than one year after the Restricted Stock vested. Conversely, if the amount the participant receives upon disposition of these shares of common stock is less than the fair market value of the common stock when the Restricted Stock vested, the difference will be treated as a long-term or short-term capital loss, depending on whether the participant held the common stock for more than one year after the Restricted Stock vested.

        If a participant makes a Section 83(b) Election, the participant will recognize ordinary income on the grant date equal to the fair market value of the common stock subject to the Restricted Stock Award on the grant date, and we will be entitled to a deduction equal to the income that the participant recognizes at that time.

        However, the participant will not recognize income when (and if) the Restricted Stock vests. If a participant who has made a Section 83(b) Election earns the common stock subject to a Restricted Stock Award, any appreciation between the grant date and the date the participant disposes of the common

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stock will be treated as a long-term or short-term capital gain, depending on whether the participant held the common stock for more than one year after the grant date. Conversely, if the amount the participant receives upon disposition of the common stock is less than the fair market value of the common stock on the grant date, the difference will be treated as a long-term or short-term capital loss, depending on whether the participant held the common stock for more than one year after the grant date. Also, if a participant forfeits his or her Restricted Stock, the participant cannot take a tax deduction in connection with the forfeiture of the Restricted Stock subject to a Section 83(b) Election.

Deferred Stock Unit Awards

        The grant of a DSU Award under the 2016 LTIP generally will not result in the recognition of any U.S. federal taxable income by the recipient or a deduction for the Company at the time of grant. At the time a DSU Award vests, the recipient will recognize ordinary income and the Company will be entitled to a corresponding deduction. Generally, the measure of the income and deduction will be the fair market value of our common stock at the time the DSU is settled.

Cash-Based Awards

        A participant will not recognize ordinary income at the time a Cash-Based Award is granted, and we will not be entitled to a deduction at that time. In general, a participant will recognize ordinary income when the Cash-Based Award is settled equal to the amount of the cash received, and we will be entitled to a corresponding deduction.

Performance Stock and Performance Unit Awards

        Performance Stock Awards granted under the 2016 LTIP generally have the same tax consequences as Restricted Stock Awards as discussed above (except that the compensation deduction limitation under Section 162(m) of the Code generally will not apply). A recipient of a Performance Unit Award under the 2016 LTIP generally will not realize U.S. federal taxable income at the time of grant of the Award, and the Company will not be entitled to a deduction at that time with respect to the Award. When the performance goals applicable to the Performance Unit Award are attained and amounts are due under the Award, the holder of the Award will be treated as receiving compensation taxable as ordinary income, and the Company will be entitled to a corresponding deduction.

Other Stock-Based Awards

        Generally, a participant will not recognize taxable income when an Other Stock-Based Award is granted, and we will not receive a deduction at that time. However, upon the settlement of an Other Stock-Based Award, the participant will recognize ordinary income equal to the cash and/or fair market value of the common stock that the participant receives, less the aggregate exercise price of the Other Stock-Based Award, if any. We generally will be entitled to a deduction equal to the income that the participant recognizes.

        If the participant receives common stock upon the settlement of an Other Stock-Based Award and the amount the participant receives upon disposition of the common stock acquired upon the settlement of the Other Stock-Based Award is greater than the fair market value of the shares of common stock when they were issued to the participant, the excess will be treated as a long-term or short-term capital gain, depending on whether the participant held the shares of common stock for more than one year after they were issued. Conversely, if the amount the participant receives upon disposition of the common stock is less than the value of the shares of common stock when they were issued, the difference will be treated as a long-term or short-term capital loss, depending on whether the participant held the shares of common stock for more than one year after they were issued.

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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. The Company intends for the Awards granted under the 2016 LTIP to comply with or be exempt from the requirements of Section 409A and the Treasury Regulations promulgated thereunder.

New Plan Benefits

        All Awards granted under the 2016 LTIP will be at the discretion of the Compensation Committee and, in the case of Cash-Based Awards, Performance Stock Awards and Performance Unit Awards, dependent upon the Company's future performance. As a result, the specific number and terms of Awards that will be granted to participants in the future are not determinable.

        Since the adoption of the 2016 LTIP, we have only granted DSUs and Performance Unit Awards thereunder. As of the Record Date, there were (1) 52,436 outstanding DSUs and (2) 190,452 outstanding Performance Unit Awards (assuming satisfaction of the performance goals at the target level) under the 2016 LTIP. In accordance with SEC Rules, the following table sets forth all of the DSUs and Performance Unit Awards granted to each of our executive officers and the groups identified below since the adoption of the 2016 LTIP through the Record Date:

Name of Individual or Identity of Group and Position   Number of
DSUs (1)
  Number of
Performance
Units (2)
 

Douglas S. Ewert

     

Chief Executive Officer

         

Jack P. Calandra

         

Executive Vice President, Chief Financial Officer and Treasurer

             

Bruce K. Thorn

    49,926  

President and Chief Operating Officer

         

A. Alexander Rhodes

        14,792  

Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary

             

Benjamin C. Baum

    14,792  

Executive Vice President – Customer Experience and Chief Digital Officer

         

Jon W. Kimmins

         

Former Executive Vice President, Chief Financial Officer, and Treasurer

             

All current executive officers, as a group (7 persons)

    94,302  

All current directors who are not executive officers, as a group (9 directors)

         

Each nominee for election as a director

     

Each associate of any of such directors, executive officers or nominees

         

Each other person who received or is to receive 5 percent of awards under plan

     

All employees, including all current officers who are not executive officers, as a group

    52,436     96,150  

(1)
Includes 33,093 time-based DSUs granted on December 12, 2016, which represent the right to receive one share of common stock and vest 50% on each of December 12, 2018 and 2019, as well as an aggregate of 19,343 time-based DSUs granted under the 2016 LTIP in September and December 2016 as a result of new hires and promotions each of which vests at a rate of 33-1/3% per

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(2)
Includes performance units granted on December 12, 2016, which represent the right to receive one share of common stock and vest 50% on each of December 12, 2018 and 2019, subject to meeting a Net Cash Provided by Operating Activities threshold for fiscal year 2017. Each performance unit award includes the right to receive dividend equivalents, which will be credited to a performance unit when dividends are paid to our shareholders, but will not be paid out unless and until the underlying performance unit award is earned. If a grant is cancelled, the recipient will not receive any dividend equivalents with respect to such performance unit award. For further information, see "Executive Compensation – Compensation Discussion and Analysis – Detailed Report – Elements of 2016 Compensation – Equity Awards".

        As of the Record Date, there were (1) 1,154,447 outstanding stock options under the 2016 LTIP and its predecessor plans, (2) 704,556 outstanding DSUs under the 2016 LTIP and its predecessor plans, (3) 523,948 outstanding performance units under the 2016 LTIP and its predecessor plans (assuming satisfaction of the performance goals at the target level), (4) 16,146 outstanding shares of restricted stock under the 2016 LTIP and its predecessor plans and (5) 49,048,248 outstanding shares of common stock. The outstanding stock options have a weighted average exercise price of $29.30 and a weighted average term to expiration of 6.4 years.

        For information regarding our common stock to be issued and available for issuance under our existing equity compensation plans, see the "Equity Compensation Plan Information" table below.

        THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ADOPTION OF THE TAILORED BRANDS, INC. 2016 LONG-TERM INCENTIVE PLAN, AS PROPOSED TO BE AMENDED BY THE AMENDMENT, AND REAPPROVAL OF THE MATERIAL TERMS OF THE PERFORMANCE GOALS THEREUNDER.


EQUITY PLAN COMPENSATION INFORMATION

        The following table sets forth certain equity compensation plan information for the Company as of January 28, 2017:

Plan Category   Number of
Securities to
be Issued
Upon
Exercise of
Outstanding
Options
(a) (1)
  Weighted-
Average
Exercise
Price of
Outstanding
Options
(b) (2)
  Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(excluding securities
in column (a))
(c) (3)
 

Equity Compensation Plans Approved by Security Holders

  2,780,603   $ 29.70   6,295,902  

Equity Compensation Plans Not Approved by Security Holders

             

Total

  2,780,603   $ 29.70   6,295,902  

(1)
Consists of 1,194,690 shares issuable upon exercise of outstanding stock options and 1,585,913 shares issuable upon conversion of outstanding DSUs and performance units.
(2)
Calculated based upon outstanding stock options to purchase shares of our common stock.
(3)
Securities available for future issuance include 5,897,273 shares under the 2016 Plan and 398,629 shares under the Employee Stock Discount Plan. Refer to Note 13 and Note 14 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 28, 2017.

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EXECUTIVE OFFICERS

        The following table lists the name, age, current position and period of service with the Company for each executive officer. Each officer will hold office until his successor shall have been elected and qualified or appointed.

Name   Age   Position with the Company   Executive
Officer
Since
 

Douglas S. Ewert

  53   Chief Executive Officer   2000  

Benjamin C. Baum

    44   Executive Vice President – Customer Experience and Chief Digital Officer     2015  

Jack P. Calandra

  49   Executive Vice President, Chief Financial Officer and Treasurer   2017  

A. Alexander Rhodes

    58   Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary     2015  

Matthew Stringer

  41   Executive Vice President – Marketing   2014  

Bruce K. Thorn

    50   President and Chief Operating Officer     2015  

Brian T. Vaclavik

  50   Senior Vice President, Chief Accounting Officer and Principal Accounting Officer   2014  

        See the discussion under "Board of Directors" for the business experience of Mr. Ewert.

        Benjamin C. Baum joined the Company in May 2015 as Executive Vice President and Chief Digital Officer and expanded his role in 2016 to Executive Vice President – Customer Experience and Chief Digital Officer. Prior to joining the Company, from March 2014 through March 2015, Mr. Baum founded and served as omni-channel retail executive for Digital Commerce and Retail Advisory, LLC. Mr. Baum's previous roles include executive vice president and chief digital officer of Bebe, Inc. since October 2012, head of business development, shopping at Google since May 2011, and several executive strategy and merchandising positions at Target.

        Jack P. Calandra joined the Company in January 2017 as Executive Vice President, Chief Financial Officer and Treasurer. Prior to joining the Company, Mr. Calandra was with Gap, Inc. since 2005, most recently as Senior Vice President, Corporate Finance and Investor Relations. During his time at Gap, Inc., Mr. Calandra also served as CFO of Banana Republic, CFO of Gap Direct and CFO of Gap International. Prior to joining Gap, Inc., Mr. Calandra served 11 years at Unilever's North America Division where he held progressively senior accounting and financial leadership roles.

        A. Alexander ("Sandy") Rhodes joined the Company in April 2015 as Executive Vice President and General Counsel. In July 2015, Mr. Rhodes also became Chief Compliance Officer of the Company and, in January 2016, Corporate Secretary of the Company. Prior to joining the Company, Mr. Rhodes was with Chico's FAS, Inc., a women's specialty apparel retailer, since January 2003 most recently serving as its executive vice president-general counsel and corporate secretary.

        Matthew Stringer joined the Company in 1999. In March 2008, Mr. Stringer was named Vice President – Marketing and, in March 2011, was named Senior Vice President – Marketing. In September 2014, Mr. Stringer was promoted to Executive Vice President – Marketing.

        Bruce K. Thorn joined the Company in 2015 as Executive Vice President and Chief Operating Officer. In March 2017, he was named President and Chief Operating Officer. Prior to joining the Company, Mr. Thorn held various enterprise level roles with PetSmart, Inc. since 2007, most recently as Executive Vice President, Store Operations, Services and Supply Chain. Mr. Thorn's other experiences include leadership positions with Gap, Inc., Cintas Corp, LESCO, Inc. and The United States Army.

        Brian T. Vaclavik joined the Company in 2000 as Assistant Controller. In April 2005, Mr. Vaclavik was promoted to Corporate Controller and, in April 2006, he was named Associate Vice President and Corporate Controller. In April 2007, Mr. Vaclavik was promoted to Vice President and Corporate

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Controller and, in December 2012, he was named Vice President – Finance & Accounting. In June 2014, Mr. Vaclavik became Senior Vice President, Chief Accounting Officer and Principal Accounting Officer of the Company.


EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

        This Compensation Discussion and Analysis describes our executive compensation philosophy, objectives and policies and focuses on the compensation of our Named Executive Officers in our 2016 fiscal year and how their 2016 compensation aligns with our pay for performance philosophy.

        Our Named Executive Officers for our 2016 fiscal year consisted of:

        Mr. Calandra joined the Company as Executive Vice President, Chief Financial Officer and Treasurer on January 3, 2017 and succeeded Mr. Kimmins, whose last day with the Company was December 31, 2016. Thus, there is no historical compensation information for Mr. Calandra other than the compensation received in fiscal 2016. In addition, please note that Mr. Thorn, Mr. Rhodes, and Mr. Baum joined the Company at various times during 2015. Thus, 2016 represents the first full year of compensation received for each of these three Named Executive Officers.

Executive Summary

Fiscal 2016 Performance

        In fiscal 2016, the challenging retail environment resulted in soft traffic across our retail brands, which drove lower than anticipated consolidated full year net sales and gross margin results. Despite these challenges, fiscal 2016 was a year of significant strategic progress for Tailored Brands as we executed on our plans to right-size our store base, optimize our cost structure and return Jos. A. Bank to a path of sustained profitable growth. We delivered on the operational initiatives that we established for 2016: we closed 233 stores under our store rationalization program; we achieved over $60 million of in-year cost savings through our profit improvement plan; and we stabilized and began to turn around Jos. A. Bank. With a focus on continued operational excellence, we built a strong foundation for future growth and were able to exceed our adjusted earnings and adjusted net consolidated earnings before interest and taxes ("EBIT") goals for the year. Key metrics for fiscal 2016 include:

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Pay for Performance

        Our compensation philosophy emphasizes pay for performance and places a significant percentage of Named Executive Officer compensation "at risk". Despite the challenging retail environment in fiscal 2016 and disappointing top line results, we were still able to exceed our bottom line goals and expectations for the year as a result of the savings that resulted from the operational initiatives accomplished in 2016 as well as better than anticipated results at Jos. A. Bank. Therefore, our Named Executive Officers received 108.9% of the target financial performance portion of their bonuses. In addition, due to the strength of their execution on their personal goals in support of our strategic plans, our eligible Named Executive Officers, excluding the Chief Executive Officer, received an average of 127% of the target personal performance portion of their bonuses.

        Additional details regarding the total bonus received by our Named Executive Officers, including the portion each received under the personal performance portion of the annual cash performance bonus is described below under "– Detailed Report – Annual Cash Performance Bonus".

        While the Company met the bottom line performance goals set for fiscal 2016, the Company has determined that the performance based equity awards granted in September 2014 and throughout 2015 to our Named Executive Officers are not likely to vest given the Company's performance. In addition, the performance based equity awards granted in April 2016 are not likely to vest at the full target amount. In other words, because the Company is unlikely to achieve the performance criteria, some or all of the equity awards will be forfeited. Note, however, that the disclosure rules require us to include the grant date fair value of the performance units granted in fiscal 2014, 2015 and 2016 in the Summary Compensation Table on page 52, even if some or all of these awards are later forfeited, which we currently believe they will be. Additional information regarding realized vs. realizable pay is included under "– Detailed Report – Reported Pay vs. Realized Value".

        As a result, we believe that the fiscal 2016 performance-based compensation is well-aligned with the Company performance for the year and the link between pay and performance is strong.

2016 Executive Compensation Program

        In October 2015, the Company announced that it would transition away from the promotions previously offered by Jos. A. Bank, which were believed to be ultimately unsustainable for the business. This change to the Jos. A. Bank promotional model proved to be significantly more difficult than expected and negatively impacted our fiscal 2015 results, particularly in the fourth quarter of fiscal 2015. The financial metrics under our annual cash performance bonus and under the performance units granted in 2016 were set at thresholds which the Compensation Committee believed reflected challenging goals for the short-term and long-term, respectively.

        Key decisions made by the Compensation Committee with regard to the 2016 executive compensation program, with input from Pay Governance, the independent executive compensation

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consultants engaged by the Compensation Committee, as well as the Chief Executive Officer and management, as appropriate, include the following:

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2016 Advisory Vote on Executive Compensation

        At our 2016 Annual Meeting of Shareholders, our shareholders approved the compensation of our Named Executive Officers, with 98.2% of the votes cast in favor of our "say-on-pay" resolution. The Compensation Committee views this strong level of support as an affirmation of our executive pay practices. The Compensation Committee considered the results of the 2016 "say-on-pay" vote in its evaluation of our executive compensation program, and in light of the overwhelming support our shareholders expressed last year, it did not make any material changes to our executive compensation program as a result of the 2016 "say-on-pay" vote.

Summary of Compensation Practices and Policies

        Compensation practices that encourage and support good governance and mitigate excessive risk taking that we follow, and problematic compensation practices that we avoid, include the following:

WHAT WE DO

ü    Pay for Performance:    We align executive compensation with Company objectives on both a short-term and long-term basis. The majority of our target total direct compensation for our Named Executive Officers is comprised, over the long term, of variable compensation through our annual cash performance bonuses and equity awards. Actual total direct compensation varies based on the extent of achievement of, among other things, operational and financial performance goals and individual performance criteria.

ü    Establish target and maximum awards:    Our annual cash performance bonus includes target and maximum awards and requires achievement of a minimum threshold for any bonus to be earned.

ü    Stock Ownership Guidelines:    Our stock ownership guidelines expect executives to own or have an interest in stock valued at a multiple of base salary, including 5 times current base salary for the Chief Executive Officer, 2.5 times current base salary for the Chief Operating Officer and the Chief Financial Officer and generally 1.5 times current base salary for other senior executives who serve on the Company's executive committee.

ü    Mitigation of Risk:    Our compensation plans include provisions designed to mitigate excessive risk taking, including caps on the maximum level of payouts, clawback provisions, varied performance measurement periods, and multiple performance metrics. In addition, the Board and management perform a periodic risk assessment to identify potential risks created by our incentive plans. We do not believe any of our compensation programs create risks that are reasonably likely to have a material adverse impact on the Company.

ü    Clawback Requirement: Clawback provisions for incentive compensation are included in our long-term incentive plans, employment agreements and change in control severance plans.

ü    Independent Compensation Consultant:    The Compensation Committee retained Pay Governance to serve as its independent executive compensation consultants. During fiscal 2016, Pay Governance did not provide any material services to the Company other than services related to employee and director compensation.

ü    Double Trigger:    Equity awards granted on or after September 1, 2014 will not automatically vest in the event of a change in control unless also accompanied by a qualifying termination of employment.

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WHAT WE DON'T DO

c    No Tax Gross-Ups in Change in Control Severance Plans:    We do not provide for tax gross-ups for excise taxes that may be imposed as a result of payments made in connection with a change in control.

c    No Current Payment of Dividend Equivalents on Unvested Long-Term Incentives:    For all equity awards granted after April 3, 2013, dividend equivalents on unvested deferred stock units or performance units are only paid if the underlying award is ultimately earned.

c    No Repricing of Underwater Stock Options:    Our 2004 LTIP and 2016 LTIP do not permit us to reprice or exchange underwater options without shareholder approval.

c    No Hedging, Pledging, Short Sales, or Derivative Transactions:    Company policies prohibit our directors and executives from hedging, pledging, or trading in derivatives involving our common stock.

Detailed Report

Compensation Philosophy

        Our executive compensation program is constructed to successfully attract, motivate and retain highly-skilled executives in support of creating long-term shareholder value. The incentive pay elements are designed to reward them for delivery of sustained, profitable financial performance and outstanding leadership that reflects our values and culture.

        The Compensation Committee believes that the structure of our compensation program should be fundamentally the same across our entire management team. While individual compensation levels vary based on job responsibilities, individual performance and the compensation paid to similarly-positioned executives within our Peer Group (as described below), the Named Executive Officers generally receive the same components of compensation (i.e., base salary, annual cash performance bonus and long-term equity awards) as the rest of our senior executive management team. In addition, similar performance goals apply to the annual cash performance bonuses that the Named Executive Officers and the rest of the senior executive management team are eligible to receive. For example, in 2016, each senior executive management team member's annual cash performance bonus had, as a significant financial component, adjusted EBIT. The Compensation Committee believes this consistency fosters team work and a collaborative approach to managing our business, ensures that the entire senior management team focuses on the same corporate goals and objectives and shares in the risks and rewards of our performance in a similar manner and reduces the likelihood of excessive risk taking.

Objectives

        The Company's compensation program is designed to emphasize pay for performance. Our compensation elements seek to balance all aspects of an executive's responsibilities: base salary for day-to-day responsibilities, cash incentive bonus for shorter-term returns linked to annual Company performance, and equity awards for aligning the executives' focus with shareholder value and the long-term, future performance of the Company.

        We set the applicable performance goals for our annual cash performance bonus program near the beginning of the fiscal year using challenging but realizable targets so that achievement of the goals is both uncertain and objective. These goals are based upon and intended to support the annual financial plan and strategic direction of the Company as approved by the Board.

        In addition to our core elements of base salary, cash incentives, and equity awards, our compensation program includes other standard benefits that are available to all employees, such as

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medical and dental insurance, life and disability insurance, a 401(k) Savings Plan, and a broad-based employee stock discount plan, among other optional benefits. Senior executives are also covered by a supplemental long-term disability plan and may also participate in an annual executive physical program.

        For fiscal 2016, the target weighting of each of the elements of compensation for the Chief Executive Officer and other Named Executive Officers was as follows:

CEO   Other NEOs

GRAPHIC

 

GRAPHIC

Role of Executive Officers

        Consistent with past practice, in fiscal 2016, the Compensation Committee requested that our Chief Executive Officer, with the assistance of other members of senior management, make initial recommendations to the Compensation Committee regarding our executive compensation program for fiscal 2016 and the compensation of our Named Executive Officers. In the course of establishing executive compensation for fiscal 2016, the Compensation Committee obtained the input of the Chief Executive Officer and other members of management. At the request of the Compensation Committee, the Chief Executive Officer and certain other members of management from time to time attended and participated in Compensation Committee meetings. The Compensation Committee believes this input is valuable because of the Chief Executive Officer's close working relationship with the other Named Executive Officers and management's comprehensive knowledge of our business, operations and financial and strategic goals. The Chief Executive Officer does not make recommendations regarding his own compensation, nor is he present when his compensation is being deliberated or determined. The Compensation Committee has sole authority to determine all elements of executive compensation and makes all final determinations regarding the Named Executive Officers' compensation.

Role of Compensation Consultant and Consultant Independence

        The Compensation Committee engaged Pay Governance to serve as its independent compensation consultant for 2016. Pay Governance's engagement focused on: (1) reviewing and evaluating our executive compensation program as a whole, each principal component and the mix of compensation; (2) analyzing and providing the Compensation Committee with competitive pay data with respect to other retail apparel companies; and (3) advising the Compensation Committee on executive compensation trends and developments. At the request of the Compensation Committee, Pay Governance attended certain Compensation Committee meetings relating to our executive compensation program for fiscal 2016 and discussed with management the recommendations that management planned to make to the Compensation Committee regarding fiscal 2016 compensation.

        During fiscal 2016, Pay Governance reported directly to the Compensation Committee and we did not engage Pay Governance for, and Pay Governance did not provide, any material services beyond those services it provided to the Compensation Committee. The Compensation Committee requested

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and received a written statement from Pay Governance detailing its independence criteria and, based on such statement and other factors, the Compensation Committee determined that Pay Governance was independent under the applicable SEC rules and NYSE Listing Standards and that engaging Pay Governance did not present any conflicts of interest.

Determination of Compensation for Fiscal 2016

        In 2016, the Compensation Committee: (1) reviewed and approved annual compensation for all executives serving on the management Executive Committee; (2) reviewed and approved the executive compensation program as presented to the Compensation Committee by the Chief Executive Officer; and (3) reviewed and approved the annual equity awards granted to all employees as recommended to the Compensation Committee by management.

        When setting Named Executive Officer compensation, the Compensation Committee considers the aggregate compensation payable to the executive, the executive's current and prior compensation (including the vesting and value of previously granted equity awards) and the form and mix of the compensation awarded. The Compensation Committee seeks to achieve an appropriate balance between immediate cash rewards and incentives for the achievement of both annual and long-term financial and non-financial objectives. The Compensation Committee determines the number of shares of common stock granted to our Named Executive Officers through equity awards on a discretionary basis, rather than formulaically, by considering the executive's position, responsibilities, accomplishments, achievements and tenure with the Company. The Compensation Committee may modify the mix of base salary, annual awards and long-term awards as it deems appropriate based on a Named Executive Officer's specific circumstances.

        The Compensation Committee reviews and approves all elements of executive compensation on an established schedule, which may vary from year to year but generally occurs during the first quarter of the fiscal year. In connection with establishing the Named Executive Officers' compensation for fiscal 2016, the Compensation Committee reviewed: (1) the level of achievement of the financial, operating, and personal objectives applicable to our executive compensation program for fiscal 2015; and (2) the recommendations of our Chief Executive Officer with respect to our executive compensation program for fiscal 2016, including recommendations with respect to the compensation of our Named Executive Officers for fiscal 2016.

        After completing this review, the Compensation Committee approved the base salaries, the annual cash performance bonus program and equity awards for each of the then Named Executive Officers.

        The Compensation Committee may continue to periodically review salaries and equity awards as it deems necessary in order to address new appointments or promotions or other special circumstances that may arise during the fiscal year. During fiscal 2016, the Compensation Committee reviewed and approved (i) the increased base salary and annual cash performance bonus level for Mr. Baum as a result of his increased responsibilities, (ii) the base salary and signing bonus, as well as future annual cash performance bonus level and potential equity awards for Mr. Calandra during fiscal 2016 near his start date, (iii) the severance arrangements made with Mr. Kimmins in late fiscal 2016 and (iv) the special retention awards granted in the fourth quarter to certain key executives of the Company, including Mr. Thorn, Mr. Rhodes and Mr. Baum.

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Benchmarking Compensation

        On an annual basis, Pay Governance provides the Compensation Committee with data with respect to other retail apparel companies that are similar in size to us based on revenues and market capitalization in order to benchmark compensation in the competitive market. In fiscal 2016, the compensation peer group included the following companies:

Abercrombie & Fitch Co.

 

Express,  Inc.

American Eagle Outfitters,  Inc.

 

Foot Locker,  Inc.

Ascena Retail Group,  Inc.

 

Genesco Inc.

Caleres,  Inc.

 

Guess?,  Inc.

Chico's FAS,  Inc.

 

The Children's Place Retail Stores, Inc.

DSW Inc.

 

The Finish Line,  Inc.

   

Urban Outfitters,  Inc.*


*
Note that Urban Outfitters, Inc. was not used for benchmarking Chief Executive Officer compensation as their chief executive officer is a founder with a non-traditional compensation arrangement.

        While the Compensation Committee considered this data in addition to other information when determining what would be appropriate compensation for the Named Executive Officers, it did not target compensation to any specific benchmark against the peer group or any particular member or subset of the peer group. However, target total direct compensation for the Named Executive Officers varies in comparison to the market due to differences in experience, time-in-role and comparability to the benchmark, with the Chief Executive Officer at about the median of the peer group.

Reported Pay vs. Realized Value

        It is important to note that the grant date fair value of the performance units, DSUs and the nonqualified stock options as set forth in our Summary Compensation Table on page 52 is provided for accounting and SEC disclosure purposes and does not reflect realized pay for the indicated years. The difference between reported pay and realized pay reinforces the concept that a significant portion of our Named Executive Officer's compensation is at risk of forfeiture and dependent on the performance of the Company.

        The table below shows the pay Mr. Ewert realized for the past three fiscal years compared to the compensation reported in the Summary Compensation Table.

Year of
Compensation
  Reported Pay
($) (1)
  Realized Pay
($) (2)
  Realized Pay vs.
Reported Pay
($)
  Realized Pay as a
Percentage of
Reported Pay (%)
 

2016

  6,370,090   2,687,308   –3,682,782   42.2  

2015

    1,296,022     2,661,841     +1,365,819     205.3  

2014

  9,672,031   6,132,902   –3,539,129   63.4  

(1)
Reported Pay is the amount set forth in the "Total" column in the Summary Compensation Table.
(2)
Realized Pay is compensation actually received by Mr. Ewert during the indicated fiscal year, consisting of salary, cash bonuses received (including any bonus paid pursuant to our non-equity incentive bonus program), net spread on stock option exercises, market value at vesting of previously granted DSUs and performance units and amounts reported in the "All

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        For 2016, Mr. Ewert's reported pay is more than double his realized pay, which is attributable to (1) the value of equity awards granted in 2016 that will not vest until future years, if at all, and (2) the decrease in the value of his DSUs due to the lower stock price at the time of vesting. His realized pay reflects approximately $317,000 in equity compensation from awards granted in prior years.

        As part of the implementation of our updated compensation program in fiscal 2014, the Compensation Committee determined that it was in the best interests of the Company to grant equity awards to certain senior executives, including Mr. Ewert, under the new program in September 2014 instead of during our regular annual grant process in fiscal 2015. The September 2014 awards represent an accelerated grant of the equity awards that the Compensation Committee would customarily grant during fiscal 2015. As a result, Mr. Ewert's reported compensation for 2015 is significantly lower than his realized pay. His lower reported compensation is attributable to: (1) the acceleration of fiscal 2015 equity grant into fiscal 2014, and (2) not earning an annual cash performance bonus for fiscal 2015 because the applicable performance targets were not achieved. Mr. Ewert's realized pay for fiscal 2015 reflects approximately $1.37 million in equity compensation from awards granted in prior years.

        The table below shows the pay each of our Named Executive Officers other than the Chief Executive Officer realized for fiscal 2016 compared to the compensation reported in the Summary Compensation Table.

Named Executive Officer   Reported Pay
($) (1)
  Realized Pay
($) (2)
  Realized Pay vs.
Reported Pay
($)
  Realized Pay as a
Percentage of
Reported Pay (%)
 

Jack P. Calandra

  206,538   206,538     100.0  

Bruce K. Thorn

    4,110,166     1,443,157     –2,667,009     35.1  

A. Alexander Rhodes

  1,575,608   788,910   –786,698   50.1  

Benjamin C. Baum

    1,425,723     734,867     –690,856     51.5  

Jon W. Kimmins

  3,511,677   3,242,931   –268,746   92.3  

(1)
Reported Pay is the amount set forth in the "Total" column in the Summary Compensation Table.
(2)
Realized Pay is compensation actually received by the indicated Named Executive Officer during the indicated fiscal year, consisting of salary, cash bonuses received (including any bonus paid pursuant to our non-equity incentive bonus program), net spread on stock option exercises, market value at vesting of previously granted DSUs and performance units and amounts reported in the "All Other Compensation" column in the Summary Compensation Table for the indicated fiscal year. Excludes the value of any unearned and unvested DSUs and performance units which will not actually be received, if earned, until a future date.

        Consistent with Mr. Ewert's compensation, for 2016 reported pay is significantly more than realized pay for Mr. Thorn, Mr. Rhodes and Mr. Baum. Even after giving effect to Mr. Kimmins' severance package, his realized pay was only 92.3% of his reported pay. Mr. Calandra realized his full reported pay, which consisted of approximately one month's base salary and the first installment of his signing bonus.

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Elements of 2016 Executive Compensation

        For fiscal 2016, the principal components of our executive compensation program were:

Compensation
Element
  Purpose   Link to Performance   Fixed or
Performance-
Based
  Short- or
Long-Term
Base Salary   Provides an appropriate level of fixed compensation to attract and retain leaders   Based on individual performance   Fixed   Short-Term
Annual Cash Bonus   Encourages executives to achieve annual results that create shareholder value   Linked to annual achievement of predetermined Company objectives as well as individual performance   Performance-Based   Short-Term
Equity Awards
(including non-qualified stock options, restricted stock awards, DSUs, performance units, or a combination thereof)

 

Directly links executives' and shareholders' interests by tying long-term incentives to stock appreciation and/or the Company's financial performance

Encourages executives to achieve long-term business goals and objectives (including achieving financial performance that balances growth, profitability, and asset management)

Rewards management for taking prudent actions and achieving results that create shareholder value

Helps to retain management through business cycles

  Initial grant value is linked to individual performance; however, the ultimate value of the award is linked to stock price performance over a period of time or, in the case of performance units, the Company's financial performance and stock price performance over a period of time  

Performance-Based (non-qualified stock options and performance units)

Fixed
(DSUs)


 
Long-Term

Base Salary

        Base salary is the fixed component of the Named Executive Officers' compensation. We intend for base salary to provide a core amount of compensation so that executives do not feel pressured to take unnecessary or excessive risks or focus on the price of our common stock to the detriment of other important financial and operational measures. The Compensation Committee annually reviews and subjectively determines each Named Executive Officer's base salary based on the following factors:

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        The following table sets forth the annual base salary for each of our Named Executive Officers in effect on the last day of each of the following fiscal years:

Name   2015 Base Salary
($)
  2016 Base Salary
($)
  % Change  

Douglas S. Ewert

  1,250,000   1,250,000    

Jack P. Calandra

        500,000      

Bruce K. Thorn

  650,000   750,000   15.4  

A. Alexander Rhodes

    380,000     450,000     18.4  

Benjamin C. Baum

  425,000   500,000   17.6  

Jon W. Kimmins

    550,000     550,000      

        Based on its review, the Compensation Committee determined to keep Mr. Ewert's and Mr. Kimmins' base salaries in fiscal 2016 unchanged from their levels at the end of fiscal 2015, primarily as a result of the base salary adjustments made in September 2014. In February 2016, the Compensation Committee determined that it was appropriate to increase the base salaries of Mr. Thorn and Mr. Rhodes to reflect the superior contributions of each to the Company as well as to align their base compensation to market levels.

        During September 2016, Mr. Baum's role was expanded to include responsibility for innovation, strategy and business insights and as a result the Compensation Committee determined that it was appropriate to increase his 2016 base salary, bonus opportunity and long-term incentive target to reflect his new responsibilities. Prior to Mr. Calandra joining the Company in January 2017, the Compensation Committee approved his compensation package, the terms of which were formulated with input from Pay Governance.

Annual Cash Performance Bonuses

        To align executive pay with Company financial and individual performance, our Named Executive Officers are eligible to receive annual cash bonuses pursuant to our 2016 Cash Incentive Plan. For fiscal 2016, our annual cash performance bonus program for our Named Executive Officers required that we achieve a threshold of at least $80.0 million in net cash from operating activities for any bonuses to be paid. This threshold ensured that the Company's debt obligations and dividend responsibilities were met prior to any bonus being considered for the Named Executive Officers. In addition, this threshold performance requirement preserved the deductibility of the bonus compensation paid to our Named Executive Officers under Section 162(m) of the Code, which is discussed in greater detail below. This threshold was achieved allowing for the payment of the cash bonuses in the amounts described below based on further Company and individual performance criteria.

        The Compensation Committee established a Company performance component and an individual performance component for our fiscal 2016 annual cash performance bonus program. The Company performance component is structured to constitute "qualified performance-based compensation" for purposes of Section 162(m) of the Internal Revenue Code. As qualified performance-based compensation, this component of the annual cash performance bonuses is not subject to the limitations on deductibility of certain compensation under Section 162(m). The Compensation Committee established the percentages of the annual cash performance bonus opportunity based on Company performance and individual performance at 80% and 20%, respectively, for our Named Executive Officers.

        The Compensation Committee believes that this allocation fosters a results-driven, pay-for-performance culture, builds accountability and aligns the interests of our Named Executive Officers and our shareholders.

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        During the first quarter of fiscal 2016, the Compensation Committee established the annual cash performance bonus program for fiscal 2016, including (1) the award formula and the Company and individual performance goals that will determine the bonus (if any) that each Named Executive Officer would earn and (2) the threshold, target and maximum bonuses that each Named Executive Officer would be eligible to earn. The Compensation Committee selected the threshold, target and maximum bonuses subjectively after considering the annual performance bonus opportunities for similarly-positioned executives in the competitive market, our past practices, the Named Executive Officer's scope of responsibility and the recommendations of our Chief Executive Officer. For fiscal 2016, the individual target bonuses were set based on a percentage of each Named Executive Officer's base salary as follows: Mr. Ewert, 100%; Mr. Thorn, 75%; Mr. Rhodes, 65%; and Mr. Baum, 65% Mr. Kimmins' employment agreement provided that his bonus target was to be equal to $450,000; Mr. Calandra was not eligible to receive an annual cash performance bonus for 2016.

Financial Performance Bonus – 80% of Award Formula

        Subject to our achievement of the threshold net cash from operating activities requirement, the annual cash performance amount attributable to the financial performance component is determined based on performance against adjusted EBIT goals. The Compensation Committee selected adjusted EBIT as the financial measure for the executive bonus plan because the Compensation Committee feels that adjusted EBIT is a measure that is closely aligned with increasing long-term shareholder value. The adjusted EBIT goals were set as follows:

Adjusted EBIT ($M)   Payout
(% of Target)
 

270.2

  200 %

225.2

    100 %

202.7

  50 %

Below 202.7

    0 %

        For purposes of our annual cash performance bonus program adjusted EBIT means earnings before interest expense and income tax, as adjusted for any income or expense that is unusual, non-recurring or extraordinary, as the Compensation Committee deems appropriate. For fiscal 2016, such items consisted of restructuring and other charges related to the Company's profit improvement and store rationalization programs, integration costs related to Jos. A. Bank, asset impairment charges, gain on extinguishment of debt and separation costs with former executives. For fiscal 2016, the Company's adjusted EBIT was 101.8% of the $225.2 million target.

        The Company performance goals under our annual cash performance bonus for fiscal 2016 were set at thresholds which the Compensation Committee believed to reflect challenging short-term goals due to the uncertainty in the business at the time compensation for fiscal 2016 was being considered and goals were being determined. This uncertainty was created by (1) the Company's transition away from the promotions previously offered by Jos. A. Bank, which we believed to be ultimately unsustainable for the business, though the transition away from such promotional model proved to be significantly more difficult than we expected and negatively impacted our fiscal 2015 results, particularly in the fourth quarter of fiscal 2015, and (2) a challenging macroeconomic environment for omni-channel retailers. As a result, while the Company was actively engaged in formulating and implementing plans to right-size our store base, optimize our cost structure and return Jos. A. Bank to a path of sustained profitable growth, it was difficult to predict how quickly business would turnaround at Jos. A. Bank. As a result of the savings that resulted from the operational initiatives accomplished in 2016 as well as the better than anticipated results at Jos. A. Bank, the Company's adjusted EBIT of 101.8% of target resulted in the payout of 108.9% of the financial performance bonus to the Named Executive Officers who were eligible to receive the cash bonus.

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Individual Performance Bonus – 20% of Award Formula

        In April 2016, the Compensation Committee (with input from our Chief Executive Officer) established the performance goals for the individual performance component of the annual cash performance bonus program for fiscal 2016 for Mr. Ewert, Mr. Thorn, Mr. Rhodes, Mr. Baum and Mr. Kimmins. Because he joined the Company so late in the year, Mr. Calandra was not eligible to participate in the annual cash performance bonus program for 2016. The individual performance goals relate to specific strategic and business objectives relevant to each Named Executive Officer's area of responsibility and, as a result, the individual performance goals are unique for each Named Executive Officer. Following the end of the fiscal year, the Compensation Committee (with input from our Chief Executive Officer) determined, based on its evaluation of the satisfaction of the individual performance goals, whether the Named Executive Officer's overall performance met, partially met, exceeded or did not meet performance levels applicable to the individual performance component of the annual cash performance bonus for fiscal 2016 and, therefore, merited the award of an individual performance bonus.

        At the March 15, 2017 Compensation Committee meeting the Committee determined that Mr. Thorn and Mr. Rhodes and Mr. Baum achieved 150%, 120% and 110%, respectively, of their individual performance goals. The Compensation Committee determined that in light of the Company's decline in sales, the performance to date of the tuxedo shops within Macy's stores and the recent performance of the Company's stock, Mr. Ewert would not receive an individual performance allocation.

        The following table sets forth details regarding the payout for each of the Named Executive Officers in fiscal 2016:

Executive   Target
Performance
Bonus
  Financial
Performance
Bonus
  Individual
Strategic
Bonus
  Total Bonus   As a
% of Target
 

Douglas S. Ewert

  $ 1,250,000   $ 1,089,370     $ 1,089,370   87.1  

Jack P. Calandra (1)

                     

Bruce K. Thorn

  $ 562,500   $ 490,217   $ 168,750   $ 658,967   117.1  

A. Alexander Rhodes

  $ 292,500   $ 254,913   $ 70,200   $ 325,113     111.1  

Benjamin C. Baum

  $ 251,442   $ 219,131   $ 55,317   $ 274,448   109.1  

Jon W. Kimmins

  $ 450,000                  

(1)
Because he joined the Company so late in the fiscal year, Mr. Calandra was not eligible to participate in the annual cash performance bonus program for 2016.

Equity Awards

        The equity component of our executive compensation programs is designed to provide compensation that motivates and rewards long-term performance, aligns the interests of our Named Executive Officers and our shareholders, promotes retention, and balances long-term operating decisions with short-term goals. To accomplish these objectives, the Compensation Committee generally grants our Named Executive Officers equity awards on an annual basis in the form of (1) stock options, (2) time-based deferred stock units, or DSUs, and (3) performance-based deferred stock units, or performance units.

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        Equity awards for our Named Executive Officers are targeted to the following mix:

CEO   Other NEOs

GRAPHIC

 

GRAPHIC

        The Compensation Committee believes that providing a "portfolio" of equity awards balances the objectives of the long-term incentive program by rewarding the creation of shareholder value with stock options, retaining executive talent with time-based DSUs, and motivating the achievement of financial goals with performance units. For additional discussion regarding the details of the grants made to Mr. Ewert, Mr. Thorn, Mr. Rhodes, Mr. Baum and Mr. Kimmins in 2016, see "– Grants of Plan Based Awards Table" on page 55. Because he did not join the Company until January 2017, Mr. Calandra did not receive any equity awards in fiscal 2016.

        During fiscal 2016, the Named Executive Officers received the following equity awards (for additional information, please see "– Grants of Plan-Based Awards Table"):

Executive   Stock
Options
  Time-Based
DSUs
  Performance
Units
April 2016 (1)
  Performance
Units
December 2016
  Aggregate
Number of
Shares
Covered
  Aggregate
Grant-Date
Value of
Awards (2)
 

Douglas S. Ewert

  231,615   45,897   114,744     392,256   $ 3,999,970  

Jack P. Calandra

                         

Bruce K. Thorn

  78,170   23,235   30,981   49,926   182,312   $ 2,699,983  

A. Alexander Rhodes

    23,161     6,884     9,179     14,792     54,016   $ 799,951  

Benjamin C. Baum

  17,371   5,163   6,884   14,792   44,210   $ 699,954  

Jon W. Kimmins

    46,323     13,769     18,359         78,451   $ 799,990  

(1)
Reflects number of target shares covered by such performance units; for information regarding threshold and maximum and performance conditions associated with such grants, please see "– Grants of Plan-Based Awards Table".
(2)
Full value awards other than the December 2016 performance units are based on the closing stock price on the date of grant which was $17.43. The December 2016 performance units are based on the closing stock price on the date of grant which was $27.04.

Stock Options

        Nonqualified stock options provide our Named Executive Officers with the opportunity to purchase our common stock at a price fixed on the grant date regardless of future market prices. Since a stock option becomes valuable only if the holder of the option remains employed during the period required for the option to "vest" and if the market price is above the exercise price, stock options provide an incentive for an option holder to remain employed by us. In addition, since a stock option becomes valuable to the holder only if the market price of our common stock price increases above its exercise price (which is the market price on the date of grant), stock options align the interests of our Named Executive Officers and our shareholders by providing an incentive to achieve long-term business goals and objectives and

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increase the market price of our stock. Stock options vest ratably over a three-year period and must be exercised within ten years of the date of grant.

        As of the end of fiscal 2016, except for those stock options granted in April 2016, all outstanding stock options granted to the Named Executive Officers were "under water", meaning that the exercise price was higher than the then current price of our common stock and therefore has no present realizable value to such officer. An underwater stock option is of no realizable value to the holder unless and until the exercise price is less than the stock price at the time of exercise. As a result, unless there is a substantial increase in the price of our common stock, the Named Executive Officers will not realize the value for those stock options reported in the Summary Compensation Table for such year. For additional details regarding stock option grants made to Mr. Ewert, Mr. Thorn, Mr. Rhodes, Mr. Baum and Mr. Kimmins prior to 2016, see "– Outstanding Equity Awards at Fiscal Year-End Table" on page 57.

Time-Based Deferred Stock Units

        A DSU is a commitment by us to issue a share of our common stock for each DSU at the time the restrictions set forth in the award agreement lapse. The Compensation Committee believes that granting time-based DSUs to our Named Executive Officers aligns the interests of the Named Executive Officers with the interests of our shareholders and encourages retention. Dividend equivalents will be credited to a DSU when dividends are paid to our shareholders, but will not be paid unless and until the underlying DSU award is earned. DSUs are generally forfeited upon termination of employment with us if the restrictions set forth in the award agreements are not satisfied. Time-based DSUs granted to Named Executive Officers may not vest more quickly than on a pro-rata basis over three years except in unusual circumstances determined by the Compensation Committee (such as a person nearing retirement age). Generally, DSUs vest ratably over a three-year period. A DSU has no realizable value to a Named Executive Officer until it vests, which means if the stock price is lower upon vesting than at the time of issuance, the officer will not receive the same value for such shares as he would have if the value were the same or higher than the stock price at the time of issuance. With the exception of DSUs granted in April 2016, all outstanding DSU awards to the Named Executive Officers were made based on stock prices significantly higher than our stock price at the end of fiscal 2016. As a result, unless there is a substantial increase in the price of our common stock, the Named Executive Officers will realize less upon vesting of prior year equity grants than was reported in the Summary Compensation Table for such year.

Performance-Based Deferred Stock Units or Performance Units

        A performance-based DSU, or performance unit, is an agreement by the Company to issue a stated number of shares of our common stock to the recipient upon vesting if the Company meets or exceeds certain predetermined financial performance criteria. As with time-vested DSUs, dividend equivalents will be credited when dividends are paid to our shareholders, but will not be paid unless and until the underlying award is earned. The vesting for such awards has varied but is typically over a three-year period. We believe performance-based DSUs reflect our compensation philosophy by establishing a clear connection between the compensation of our executives, including our Named Executive Officers, and the achievement of performance goals that are important for long-term shareholder value creation. Performance units provide an incentive to the recipient to work toward the financial success of the Company over the vesting period in order for the performance units to vest, thereby aligning the financial interest of the recipient with that of the Company and driving increased shareholder value.

        As with time-based DSUs, performance units have no realizable value to a Named Executive Officer until they vest (if at all), which means if the stock price is lower upon vesting than at the time of issuance, the officer will not receive the same value for such shares as he would have if the value were the same or higher than the stock price at the time of issuance. As a result, even if the performance criteria are met to allow one or more of such awards to vest, if our stock price is lower at the time of vesting than at the time of

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grant, the Named Executive Officers will realize less upon vesting of such performance units than was reported in the Summary Compensation Table for the year of grant.

        In addition to the annual equity grants, in November 2016, the Compensation Committee determined that, in light of the risks associated with the unusually low value associated with the senior executive's outstanding and unvested equity values and opportunities that created for potential departures of key executives, it would be in the Company's best interest to make an additional equity grant to key executives, including the Named Executive Officers (excluding Mr. Ewert and Mr. Kimmins). After working closely with Pay Governance to develop the grant amounts, instrument, suitable performance criterion and vesting schedule, special retention awards, which consisted of performance units for senior executive officers, were approved which included a performance target tied to fiscal 2017 net cash provided by operating activities. These awards were intended to recognize the efforts of these officers and serve as a powerful retention tool to incent each to remain with the Company.

Grant Date   Performance Period   Performance Measure/
Multiplier (1)
  Vesting Dates   Current Status
9/2014-6/2015   February 1, 2015 – February 3, 2018  

Adjusted earnings per share

Multipliers ranging from 50% to 150%, based on: (1) level of EPS attained and (2) relative TSR

  April 13, 2018 (100%)  

Will certify in March 2018

Unlikely to vest given the Company's performance

                    
4/4/2016   January 31, 2016 – February 3, 2018  

Adjusted earnings per share

Multiplier ranging from 50% to 200% based on level of EPS attained

  April 4, 2018 and 2019 (50% each)  

Will certify in March 2018

Remains probable to meet the threshold adjusted earnings per share with a multiplier at or near low end

                    
12/12/2016   January 29, 2017 – February 3, 2018  

Net cash provided by operating activities

No multiplier

  December 12, 2018 and 2019 (50% each)  

Will certify in March 2018

Expected to meet target and to vest in full


(1)
Performance targets will be disclosed in our proxy statement following the completion of the performance period.

Benefits and Perquisites

        Employee Benefits.    We offer a variety of health and welfare and retirement programs to all eligible employees. Executives are generally eligible for the same benefit programs on the same basis as our other employees. Our health and welfare programs are intended to protect employees against catastrophic loss and encourage a healthy lifestyle. Our health and welfare programs include medical, wellness, pharmacy, dental, vision, life insurance, and accidental death and disability.

        We also maintain defined contribution plans pursuant to the provisions of Section 401(k) of the Internal Revenue Code. The plans cover our full-time employees who meet age and service requirements. The plans provide for pre-tax, elective employee contributions with a matching contribution from us. For calendar 2016, the Company contribution made on behalf of each Named Executive Officer who participates in the 401(k) plan was $200. For calendar 2017, the Company will match 25% of the first 6% of compensation deferred under the plan. Our Named Executive Officers participate in our defined contribution plans on the same terms as our other employees.

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        Perquisites.    In fiscal 2016, we did not provide our Named Executive Officers with any material perquisites.

Senior Executive Change in Control Severance Plan

        In 2016, the Company adopted a Senior Executive Change in Control Severance Plan which superseded the previously existing Change in Control agreements with each of our senior executives, including the agreements in place with Mr. Ewert, Mr. Thorn, Mr. Rhodes, Mr. Baum and Mr. Kimmins. The terms of the Senior Executive Change in Control Severance Plan are substantially similar to the terms of the Change in Control agreements and generally provide that if a Change in Control occurs and we fail to extend the executive's agreement or terminate the executive's employment without cause or if the executive terminates his or her employment for good reason, the executive will receive an amount equal to two times the sum of the executive's base salary plus an amount equal to the target annual performance bonus in the fiscal year in which a Change in Control occurs or the immediately preceding fiscal year, whichever is higher, plus basic benefits as more fully described in the Senior Executive Change in Control Severance Plan. The benefits payable under the Senior Executive Change in Control Severance Plan in certain circumstances are disclosed below on pages 59-62.

        The Compensation Committee determined that it was in our best interests to enter into the Change in Control arrangements to: (1) serve as a retention tool and incentivize the Named Executive Officers to continue focusing on our business in the event of a potential change in control transaction; (2) ensure the Named Executive Officers pursue business alternatives that maximize shareholder value without a concern for job security; and (3) ensure our compensation practices remained competitive.

Clawback Provisions

Employment Agreements

        The employment agreements with Mr. Ewert, Mr. Thorn, and Mr. Kimmins provide that if it is determined that Mr. Ewert, Mr. Thorn, or Mr. Kimmins, respectively, before or after the termination of their employment relationship with us, has committed certain acts which materially and adversely affect us, then some or all (A) benefits payable or to be provided, or previously paid or provided, to him under his employment agreement or (B) cash bonuses paid to him by us on or after the date of his employment agreement, or equity awards granted to him by us that vest, on or after the date of his employment agreement will be forfeited or repaid to us. For additional discussion regarding these clawback provisions, including those acts which could trigger such forfeiture, see the discussion regarding their respective employment agreements under "– Employment Agreements" on pages 53-55.

Senior Executive Change in Control Severance Plan

        The Senior Executive Change in Control Severance Plan also contains clawback provisions which provide that in the event that it is determined that an executive, before or after the termination of his or her employment relationship with us, has committed certain acts which materially and adversely affect the Company, then some or all of such executive's awards (including cash bonuses paid to such executive by us or equity awards that vest after the effective date of the Senior Executive Change in Control Severance Plan) will be forfeited or repaid to us. For additional discussion regarding these clawback provisions, including those acts which could trigger such forfeiture, see the discussion under "– Potential Payments Upon Termination or Change in Control – Senior Executive Change in Control Severance Plan" on pages 59-62.

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Pension Plans and Retirement Plans

        We do not maintain defined benefit pension plans or supplemental executive retirement plans for our executive officers or any defined contribution plans which provide for the deferral of compensation on a basis that is not tax-qualified.

Executive Officer Equity Ownership

        The Board of Directors has adopted stock ownership guidelines for directors and senior executives, including our Named Executive Officers. These guidelines are designed to build a culture of stock ownership within the Company and to align the financial interests of our directors and executives with those of our shareholders. Participants are expected to own shares of our common stock in accordance with the following schedule within five years of becoming subject to the guidelines:

Leadership Position   Value of Shares
Non-Employee Director   12,000 shares or shares having a value equal to at least $625,000
CEO   Shares having a value equal to at least 5x the executive's base salary
COO, CFO   Shares having a value equal to at least 2.5x the executive's base salary
Members of the Executive Committee   Shares having a value equal to at least 1.5x or 1x the executive's base salary as designated by the Compensation Committee

        Ownership for purposes of this program will include shares of our Common Stock held as follows: shares owned directly, shares owned through the Company's 401(k) Savings Plan or Employee Stock Discount Plan, unvested full-value shares granted, unvested performance units subject only to service vesting or those designated as retention awards and the value of vested stock options, net of taxes. In addition, shares owned by a spouse, child or trust meeting specified criteria within the guidelines shall be counted. The guidelines are available at the Company's website (www.tailoredbrands.com) under "Investors – Corporate Governance – Governance Documents".

        If the stock ownership of a director or senior executive is not in line with his or her ownership guideline, he or she will be expected to retain at least 75% of any newly vested shares and all newly acquired shares under any award of long-term compensation paid to such executive officer or payment of fees to a non-employee director (after-tax) until he or she achieves ownership at or above the guideline amount.

No Hedging or Pledging Our Common Stock

        Pursuant to the Company's insider trading policies, our directors, officers and employees are prohibited from hedging or pledging equity positions in our common stock arising from equity compensation awards.

Impact of Accounting and Tax Treatment

        In recognizing share-based compensation, we follow the provisions of the authoritative guidance regarding share-based awards. This guidance establishes fair value as the measurement objective in accounting for stock awards and requires the application of a fair value based measurement method in accounting for compensation cost, which is recognized over the requisite service period. We use the Black-Scholes option pricing model to estimate the fair value of stock options on the date of grant. The fair value of restricted stock awards and DSUs is determined based on the number of shares granted and the quoted price of our common stock on the date of grant. The fair value of awards that contain a market

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condition is measured using a Monte Carlo simulation method. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period. For grants that are subject to pro-rata vesting over a service period (other than performance-based awards), we recognize expense on a straight-line basis over the requisite service period for the entire award.

        Section 162(m) of the Internal Revenue Code generally prohibits a company from deducting compensation paid to certain "covered employees" (its principal executive officer and three other most highly compensated executive officers (other than the principal financial officer)) in excess of $1 million in any fiscal year. Compensation that qualifies as "performance-based" is excluded from the $1 million limit. The Compensation Committee believes that it is generally in the Company's best interests to satisfy the requirements for deductibility under Section 162(m). However, notwithstanding this general policy, the Compensation Committee also believes that there may be circumstances in which the Company's interests are best served by maintaining flexibility in the way compensation is provided, whether or not compensation is fully deductible under Section 162(m).

        Section 409A of the Internal Revenue Code provides that deferrals of compensation under a nonqualified deferred compensation plan for all taxable years are currently includible in gross income to the extent not subject to a substantial risk of forfeiture and not previously included in gross income, unless certain requirements or exemptions are met. We structure any deferred compensation arrangements to comply with Section 409A of the Internal Revenue Code.

Compensation Committee Report

        The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with the Company's management. Based upon such review and the related discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

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Summary Compensation Table

        The following table sets forth certain information regarding compensation paid in respect of our fiscal year ended January 28, 2017, to each individual who served as our Chief Executive Officer or Chief Financial Officer during the year, and the next three most highly compensated executive officers (collectively, the "Named Executive Officers"):

Name and Principal Position (1)   Year   Salary
($) (2)
  Bonus
($)
  Stock
Awards
($) (3)
  Option
Awards
($) (3)
  Non-Equity
Incentive Plan
Compensation
($) (4)
  Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
  All Other
Compensation
($)
  Total
($)
 

Douglas S. Ewert

  2016   1,250,000     2,799,973   1,199,997   1,089,370     30,750  (7)(8) 6,370,090  

Chief Executive Officer

  2015   1,250,000             46,022  (7)(8)(9) 1,296,022  

  2014   1,250,000   500,000  (5) 4,135,552  (6) 2,051,278  (6) 1,718,750     16,451  (7)(8) 9,672,031  

Jack P. Calandra

   
2016
   
36,538
   
170,000

 (10)
 
   
   
   
   
   
206,538
 

Executive Vice President, Chief Financial Officer and Treasurer

                                                       

Bruce K. Thorn

 

2016

 


750,000

 



 


2,294,984

 


404,999

 


658,967

 



 


1,216

 (7)(8)


4,110,166
 

President and Chief Operating Officer

  2015   387,500   443,750  (11) 839,983   359,992       33,370  (7)(12) 2,064,595  

A. Alexander Rhodes

   
2016
   
450,000
   
   
679,954
   
119,997
   
325,113
   
   
544

 (7)
 
1,575,608
 

Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary

    2015     306,923     150,000  (10)   279,982     120,006             8,600  (13)   865,511  

Benjamin C. Baum

 

2016

 


450,947

 



 


609,955

 


89,999

 


274,448

 



 


374

 (8)


1,425,723
 

Executive Vice President – Customer Experience and Chief Digital Officer

  2015   292,611   181,250  (14) 209,987   90,002         773,850  

Jon W. Kimmins

   
2016
   
518,269
   
   
559,991
   
239,999
   
   
   
2,193,418

 (8)(15)
 
3,511,677
 

Former Executive Vice President,

    2015     550,000                         9,973  (8)   559,973  

Chief Financial Officer, and Treasurer

    2014     484,615     300,000  (5)   670,310  (6)   410,249  (6)   618,750         4,352  (8)   2,488,276  

(1)
Mr. Calandra was not a Named Executive Officer prior to fiscal 2016. Mr. Thorn, Mr. Rhodes and Mr. Baum were not Named Executive Officers prior to fiscal 2015.
(2)
Mr. Calandra's 2016 salary represents amount paid to him from the date he commenced his employment with the Company on January 3, 2017. Mr. Thorn, Mr. Rhodes and Mr. Baum's 2015 salaries represent amount paid to them from the date they commenced their employment with the Company: June 29, 2015, April 13, 2015 and May 26, 2015, respectively.
(3)
Represents aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718. The value of performance units has been determined assuming the achievement of the performance conditions on the date of grant and represents the target amount that can be earned under the units, which also represents the maximum under the units granted in April 2014 and December 2016. For performance units granted in September 2014 and in 2015, the aggregate grant date fair value assuming achievement of the maximum performance level would be: Mr. Ewert, $4,880,010; Mr. Thorn, $1,080,019; Mr. Rhodes, $359,959; Mr. Baum, $269,932; and Mr. Kimmins $780,777; and for performance units granted in April 2016, the aggregate grant date fair value assuming achievement of the maximum performance level would be: Mr. Ewert $3,999,976; Mr. Thorn $1,079,998; Mr. Rhodes $319,980; Mr. Baum $239,976; and Mr. Kimmins $639,995. These values exclude the accounting effect of any estimate of future service-based forfeitures and may not correspond to the amounts that will actually be realized by the Named Executive Officers. For additional information, including a discussion of the assumptions used to calculate these values, see Note 13 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 28, 2017. For additional information regarding these equity awards, see "Compensation Discussion and Analysis – Detailed Report – Elements of 2016 Compensation – Equity Awards", "– Grants of Plan-Based Awards Table" and "– Outstanding Equity Awards at Fiscal Year End Table".
(4)
Represents bonuses paid pursuant to our non-equity incentive bonus program (for additional information, see "Compensation Discussion and Analysis – Detailed Report – Elements of 2016 Compensation – Annual Cash Performance Bonuses").
(5)
Represents a one-time special cash bonus paid in June 2014 to certain senior executive officers, including Mr. Ewert and Mr. Kimmins, in recognition of the efforts of senior management in connection with the acquisition of Jos. A. Bank.
(6)
As part of our implementation of the updated compensation program in September 2014, the Compensation Committee determined that it was in the best interests of the Company to grant equity awards to certain senior executive officers, including Mr. Ewert and Mr. Kimmins, under the new program in September 2014 instead of during our regular annual grant process in 2015. As a result of this accelerated issuance of equity awards and the special one-time cash bonus paid to Mr. Ewert and Mr. Kimmins in June 2014, the reported pay of Mr. Ewert and Mr. Kimmins for fiscal 2014 in the Summary Compensation able is significantly higher than amounts reported in other fiscal years. The following table provides

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Name   2014
Total As
Reported
Above
($)
  Special
Jos. A.
Bank
Completion
Bonus Paid
in June
2014
($)
  Stock
Awards
Granted in
September
2014
($)
  Option
Awards
Granted in
September
2014
($)
  2014 Total
Without
Special
Bonus and
September
2014 Equity
Grants
($)
 

Douglas S. Ewert

  9,672,031   500,000   2,968,892   1,200,006   5,003,133  

Jon W. Kimmins

    2,488,276     300,000     586,991     239,994     1,361,291  
(7)
Includes $200 Company matching contribution to The Men's Wearhouse, Inc. 401(k) Savings Plan account of the Named Executive Officer.
(8)
Includes dividend or dividend equivalent payments on unvested DSUs issued prior to 2013 and on vested DSUs issued on and after April 3, 2013, paid to the Named Executive Officer during the indicated fiscal year.
(9)
Includes a one-time payout of $24,038 related to accrued sabbatical time.
(10)
Represents a signing bonus paid to Mr. Calandra in fiscal 2016 and Mr. Rhodes in fiscal 2015.
(11)
Includes a $200,000 signing bonus as well as the $243,750 portion of Mr. Thorn's bonus paid as a result of the one-time contractual cash inducement payment for 2015 pursuant to the terms of his employment agreement (for additional information, see "– Employment Agreements – Bruce K. Thorn" below).
(12)
Includes commuting, housing and other living expenses of $33,170 paid by the Company on behalf of Mr. Thorn.
(13)
Includes temporary housing costs paid by the Company in connection with Mr. Rhodes relocation.
(14)
Includes a $75,000 signing bonus as well as the $106,250 portion of Mr. Baum's bonus paid as a result of the one-time contractual cash inducement payment for 2015.
(15)
As previously announced, on January 5, 2017, the Company entered into a Separation Agreement with Mr. Kimmins. In addition to the amounts Mr. Kimmins is entitled to receive under the termination provisions of his employment agreement, he received a payment from the Company in the amount of $275,000. Mr. Kimmins also received a one-time consulting fee of $10,000 for his agreement to provide consulting and advisory services to the Company to assist with his transition through March 31, 2017. For additional information, see "– Potential Payments upon Termination or Change in Control – Employment Agreements" below.

Employment Agreements

        We have entered into employment agreements with Mr. Ewert, Mr. Thorn and Mr. Kimmins. The basic terms of those agreements are summarized below. For information regarding payments to be received by Mr. Ewert and Mr. Thorn in the event of potential termination of their employment, and by Mr. Kimmins following his recent termination, see "– Potential Payments Upon Termination or Change in Control – Employment Agreements" on pages 62-65 of this proxy statement.

Douglas S. Ewert

        The Company entered into an Amended and Restated Employment Agreement with Mr. Ewert on April 22, 2015. The initial term of Mr. Ewert's amended employment agreement is for a period of three years and will automatically extend for successive twelve-month periods unless either we or Mr. Ewert gives written notice of an election not to extend the employment agreement not less than 90 days prior to the end of any employment period. Under Mr. Ewert's amended employment agreement, we agreed, among other things, to:

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Bruce K. Thorn

        We entered into an employment agreement with Mr. Thorn, effective as of June 29, 2015. The initial term of Mr. Thorn's employment agreement shall be for a period of one year and thereafter automatically extends for successive twelve-month periods unless we or Mr. Thorn gives written notice of an election not to extend the employment agreement not less than 90 days prior to the end of any extended employment period. Under Mr. Thorn's employment agreement, we agreed, among other things, to:

        In addition, under the terms of his employment agreement, during fiscal 2015 Mr. Thorn received:

Jon W. Kimmins

        We entered into an employment agreement with Mr. Kimmins, effective as of April 1, 2013. Under Mr. Kimmins' employment agreement, we agreed, among other things, to:

Mr. Kimmins separated from the Company as of December 31, 2016. The Company and Mr. Kimmins entered into a Separation Agreement pursuant to which, in addition to the amounts to be received by Mr. Kimmins under his employment agreement, Mr. Kimmins received a payment from the Company in the amount of $275,000 and was eligible to receive a payment from the Company equal to the amount, if any, by which the bonus that Mr. Kimmins would have earned under the Company's annual incentive plan for fiscal 2016 exceeded his target bonus for such fiscal year. The bonus that Mr. Kimmins would have received did not exceed his target bonus amount and, therefore, no bonus amounts were paid to Mr. Kimmins for fiscal 2016. Mr. Kimmins also received a one-time consulting fee of $10,000 for his agreement to provide consulting and advisory services to the Company to assist with his transition through March 31, 2017.

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Restrictive Covenants and Clawbacks

        In addition, Mr. Ewert, Mr. Thorn and Mr. Kimmins have each agreed not to compete with us during the term of his employment agreement and for any period in which he is receiving payments from us under his employment agreement (other than the continuation of medical benefits).

        The employment agreements also provide that if Mr. Ewert, Mr. Thorn, or Mr. Kimmins, respectively, before or after the termination of his employment relationship with us, commit certain acts which materially and adversely affect us, then some or all of the (A) benefits payable or to be provided, or previously paid or provided, to him under his employment agreement, (B) cash bonuses paid to him by us on or after the date of his employment agreement, or (C) equity awards granted to him by us that vest, on or after the date of his employment agreement, will be forfeited to us. The acts which could trigger such a forfeiture generally include:

Grants of Plan-Based Awards Table

        The following table sets forth certain information regarding grants of plan-based awards to our Named Executive Officers during the fiscal year ended January 28, 2017:

 
   
   
   
   
   
   
   
  All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) (4)
  All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) (5)
   
   
 
 
   
  Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
  Estimated Future Payouts
Under Equity
Incentive Plan Awards
  Exercise
or Base
Price of
Option
Awards
($/Sh)
  Grant
Date Fair
Value of
Stock and
Option
Awards ($) (6)
 
Name   Grant
Date (1)
  Threshold
($) (2)
  Target
($) (2)
  Maximum
($) (2)
  Threshold
(#) (3)
  Target
(#) (3)
  Maximum
(#) (3)
 

Douglas S. Ewert

  4/4/16   625,000   1,250,000   2,500,000   57,372   114,744   229,488   45,897   231,615   17.43   3,999,970  

Jack P. Calandra

                                             

Bruce K. Thorn

  4/4/16   281,250   562,500   1,125,000   15,491   30,981   61,962   23,235   78,170   17.43   1,349,984  

  12/12/16           49,926           1,349,999  

A. Alexander Rhodes

    4/4/16     146,250     292,500     585,000     4,590     9,179     18,358     6,884     23,161     17.43     399,975  

    12/12/16                     14,792                     399,976  

Benjamin C. Baum

  4/4/16   106,250  (7) 212,500  (7) 425,000  (7) 3,442   6,884   13,768   5,163   17,371   17.43   299,978  

  12/12/16           14,792           399,976  

Jon W. Kimmins

    4/4/16     225,000     450,000     900,000     9,180     18,359     36,718     13,769     46,323     17.43     799,990  

(1)
Represents the date when the Compensation Committee approved the targets for the Named Executive Officers' annual cash incentive bonus program or the equity grant was issued to such Named Executive Officer. With respect to December 12, 2016 awards for Mr. Thorn, Mr. Rhodes and Mr. Baum, the awards were approved by the Compensation Committee on November 30, 2016 and then issued on the first day of the next open trading window period pursuant to the Company's Insider Trading Policy.
(2)
Relates to our annual cash performance bonus program in which executive officers participate annually; 80% of the bonus criteria is quantitative and based on the Company achieving certain adjusted EBIT targets (the "Performance Target Bonus") and the remaining 20% of the bonus criteria is based on the recipient achieving personal non-financial performance objectives ("Personal Performance Bonus"); provided, that for recipients to receive any bonus payout, a net cash from operating activities threshold must be met ("Threshold Performance Requirement"). For 2016, the Compensation Committee approved an $80.0 million Threshold Performance Requirement, and financial performance factors for the Performance Target Bonus determined based on performance against adjusted EBIT goals as follows: (1) less than $202.7 million, 0%, (2) $202.7 million, 50%, (3) $225.2 million, 100%, and (4) $270.2 million, 200%. The qualitative assessment of each Named Executive Officer's

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individual performance is made by the Compensation Committee and is based on personal performance objectives set for each person participating in the program. The Compensation Committee may at its sole discretion determine the appropriate percentage to be paid out with respect to the Personal Performance Bonus, ranging from 0% to 200%, depending on whether the performance goals are determined not to have been met, partially met, met or exceeded. For purposes of this table, the columns assume that the Threshold Performance Requirement is met and payouts are as follows: (A) Threshold: Performance Target Bonus of 50% and Personal Performance Bonus of 50%; (B) Target: Performance Target Bonus of 100% and Personal Performance Bonus of 100%; and (C) Maximum: Performance Target Bonus of 200% and Personal Performance Bonus of 200%. For additional information, see "Compensation Discussion and Analysis – Detailed Report – Elements of 2016 Compensation – Annual Cash Performance Bonuses". For the actual amounts paid to the Named Executive Officers pursuant to these grants under the 2016 bonus program, see the column titled "Non-Equity Incentive Plan Compensation" in the Summary Compensation Table.
(3)
Represents performance units granted on April 4, 2016 under our 2004 LTIP and on December 12, 2016 under our 2016 LTIP. The April grants represent the right to receive up to two shares of common stock for each performance unit indicated above and vest 50% on each of April 4, 2018 and 2019, subject to meeting the adjusted earnings per share performance target for fiscal 2017. Assuming the performance target is achieved, the number of performance units earned will be adjusted based on a multiplier, ranging from 50% to 200%, related to the Company's adjusted earnings per share for fiscal 2017. The December grants represent the right to receive one share of common stock and vest 50% on each of December 12, 2018 and 2019, subject to meeting the Net Cash Provided by Operating Activities threshold for fiscal year 2017. Each performance unit award includes the right to receive dividend equivalents, which will be credited to a performance unit when dividends are paid to our shareholders, but will not be paid out unless and until the underlying performance unit award is earned. If a grant is cancelled, the recipient will not receive any dividend equivalents with respect to such performance unit award. For further information, see "Compensation Discussion and Analysis – Detailed Report – Elements of 2016 Compensation – Equity Awards".
(4)
Represents time-based DSUs granted under our 2004 LTIP. Each DSU grant vests at a rate of 33-1/3% per year on each of April 4, 2017, 2018 and 2019. Each DSU award includes the right to receive dividend equivalents, which will be credited to a DSU when dividends are paid to our shareholders, but will not be paid out unless and until the underlying DSU award vests. If a grant is cancelled, the recipient will not receive any dividend equivalents with respect to such DSU award.
(5)
Represents stock options granted under our 2004 LTIP. Each stock option grant vests at a rate of 33-1/3% per year on each of April 4, 2017, 2018 and 2019 and must be exercised within ten years of the date of grant. The stock options have an exercise price equal to the closing price of our common stock on the NYSE on the date of grant.
(6)
Represents aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718. The value of performance units has been determined assuming the achievement of the performance conditions on the date of grant at target in the case of performance unit awards. These values exclude the accounting effect of any estimate of future service-based forfeitures and may not correspond to the amounts that will actually be realized by the Named Executive Officers. For additional information, including a discussion of the assumptions used to calculate these values, see Note 13 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 28, 2017.
(7)
During September 2016, Mr. Baum's role was expanded to include responsibility for innovation, strategy and business insights and as a result the Compensation Committee determined that it was appropriate to increase his 2016 base salary and bonus opportunity to reflect his new responsibilities. As a result, his target bonus increased from $212,500 to $325,000 (threshold: $162,500, target: $325,000 and maximum: $650,000) and his 2016 bonus payout was determined on a pro rata basis using the bonus amounts as approved for the applicable time periods in fiscal 2016.

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Outstanding Equity Awards at Fiscal Year-End Table

        The following table summarizes certain information regarding equity awards outstanding and held by each of the Named Executive Officers as of the end of the fiscal year ended January 28, 2017:

 
  Option Awards   Stock Awards  
Name   Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
  Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
  Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
  Option
Exercise
Price
($)
  Option
Expiration
Date
  Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
  Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($) (1)
  Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)
  Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
($) (1)
 

Douglas S. Ewert

  90,000   10,000  (2)   41.33   11/16/2017          

  43,996   11,009  (3)   22.72   3/28/2018          

  42,867       27.94   4/6/2021          

  29,053       40.13   3/27/2022          

  25,943   25,942  (4)   47.26   4/17/2024          

  23,217   46,435  (5)   50.80   9/12/2024          

    231,615  (6)   17.43   4/4/2026          

            5,290  (7) 103,049      

            10,499  (8) 204,521      

            45,897  (9) 894,074      

                9,843  (10) 191,742  

                57,372  (11) 1,117,607  

Jack P. Calandra

                                     

Bruce K. Thorn

  5,965   11,930  (12)   63.78   6/29/2025          

    78,170  (6)   17.43   4/4/2026          

            3,763  (13) 73,303      

            23,235  (9) 452,618      

                1,588  (10) 30,934  

                15,491  (11) 301,765  

                49,926  (14) 972,558  

A. Alexander Rhodes

    2,304     4,610  (12)       52.91     4/13/2025                  

        23,161  (6)       17.43     4/4/2026                  

                        1,512  (13)   29,454          

                        6,884  (9)   134,100          

                                728  (10)   14,181  

                                4,590  (11)   89,413  

                                14,792  (14)   288,148  

Benjamin C. Baum

  1,605   3,210  (12)   57.74   5/26/2025          

    17,371  (6)   17.43   4/4/2026          

            1,040  (13) 20,259      

            5,163  (9) 100,575      

                458  (10) 8,922  

                3,442  (11) 67,050  

                14,792  (14) 288,148  

Jon W. Kimmins

    19,080  (15)           33.09     1/30/2017                  

    10,377  (15)           47.26     1/30/2017                  

    9,286  (15)           50.80     1/30/2017                  

(1)
Based on the closing price of $19.48 per share for our Common Stock on the NYSE on January 27, 2017, which was the last trading day of our fiscal year and, in the case of performance units included under the Equity Incentive Plan Awards columns, assumes achievement of the performance conditions at the threshold level for each such award, if applicable.
(2)
Relates to an option award granted in November 2007, the remainder of which vests on October 16, 2017.
(3)
Relates to an option award granted in March 2008, the remainder of which vests on March 28, 2017.
(4)
Relates to an option award granted in April 2014, the remainder of which vests on April 13, 2017.

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(5)
Relates to an option award granted in September 2014, the remainder of which vests ratably on each of April 13, 2017 and 2018.
(6)
Relates to an option award granted in April 2016 which vests at a rate of 33-1/3% per year on each of April 4, 2017, 2018 and 2019.
(7)
Relates to DSUs granted in April 2014, the remainder of which vests on April 13, 2017.
(8)
Relates to DSUs granted in September 2014, the remainder of which vests ratably on each of April 13, 2017 and 2018.
(9)
Relates to DSUs granted in April 2016 which vests at a rate of 33-1/3% per year on each of April 4, 2017, 2018 and 2019.
(10)
Relates to performance units, representing the right to receive up to 2.25 shares of Common Stock for each share indicated above. These performance units vest on April 13, 2018, subject to meeting an annual performance target for fiscal 2017. Assuming the performance target is achieved, the number of performance units earned will be adjusted based on multipliers, ranging from 50% to 150%, based on (1) the Company's adjusted earnings per share for fiscal 2017 and (2) the Company's relative total shareholder return ("TSR") compared to the TSR of other select companies for the period beginning on September 12, 2014 and ending on February 3, 2018. The Company has determined that these performance units are no longer likely to vest given the Company's performance. For further information, see "Compensation Discussion and Analysis – Detailed Report – Equity Awards – Performance-Based Deferred Stock Units or Performance Units".
(11)
Relates to performance units granted in April 2016 under our 2004 LTIP, representing the right to receive up to two shares of common stock for each performance unit indicated above. These performance units vest 50% on each of April 4, 2018 and 2019, subject to meeting the adjusted earnings per share performance target for fiscal 2017. Assuming the performance target is achieved, the number of performance units earned will be adjusted based on a multiplier, ranging from 50% to 200%, related to the Company's adjusted earnings per share for fiscal 2017. The Company has determined that these performance units are not likely to vest at the full target amount. For further information, see "Compensation Discussion and Analysis – Detailed Report – Elements of 2016 Compensation – Equity Awards".
(12)
Relates to an option award granted in 2015, the remainder of which vests ratably on each of April 13, 2017 and 2018.
(13)
Relates to DSUs granted in 2015, the remainder of which vest ratably on each of April 13, 2017 and 2018.
(14)
Relates to performance units granted in December 2016 which vest 50% on each of December 12, 2018 and 2019, subject to meeting the Net Cash Provided by Operating Activities threshold for fiscal year 2017. For further information, see "Compensation Discussion and Analysis – Detailed Report – Elements of 2016 Compensation – Equity Awards".
(15)
In accordance with the terms of Mr. Kimmins' employment agreement, upon the date of the termination of his employment with the Company, all stock options held by Mr. Kimmins that would have vested within one year of his termination date became immediately exercisable. All of these options expired on the option expiration date.

Option Exercises and Stock Vested Table

        The following table sets forth the amount realized (before any tax withholding) by each of the Named Executive Officers regarding the exercise of options and the vesting of performance units and DSUs during the fiscal year ended January 28, 2017:

 
  Option Awards   Stock Awards  
Name   Number of Shares
Acquired on
Exercise
(#)
  Value
Realized on
Exercise
($)
  Number of Shares
Acquired on
Vesting
(#)
  Value
Realized on
Vesting
($) (1)
 

Douglas S. Ewert

      18,094   317,188  

Jack P. Calandra

                 

Bruce K. Thorn

      1,881   32,974  

A. Alexander Rhodes

            756     13,253  

Benjamin C. Baum

      519   9,098  

Jon W. Kimmins (2)

    15,441     85,812     19,825     445,432  

(1)
Value realized upon vesting is based upon closing price of our common stock on the vesting date and the value of these shares as of the last trading day of the fiscal year, based on our closing price of $19.48, would have been $352,471, $36,642, $14,727, $10,110, and $386,191 for Mr. Ewert, Mr. Thorn, Mr. Rhodes, Mr. Baum and Mr. Kimmins, respectively.
(2)
In accordance with the terms of Mr. Kimmins' employment agreement, upon the date of the termination of his employment with the Company, all stock options held by Mr. Kimmins that would have vested within one year of his termination date became immediately exercisable and any Restricted Stock or Deferred Stock Units held by Mr. Kimmins that would have vested within one year of the termination date became fully vested.

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Pension Benefits

        We currently have no defined benefit pension plans in which our executive officers participate.

Nonqualified Deferred Compensation

        We currently have no defined contribution plans which provide for the deferral of compensation on a basis that is not tax qualified.

Potential Payments upon Termination or Change in Control

Senior Executive Change in Control Severance Plan

General

&nb