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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. )

Filed by the Registrant Filed by a Party other than the Registrant      

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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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WE HELP OUR
CUSTOMERS
LOVE HOW
THEY LOOK
Tailored Brands provides a personal, convenient, one-of-a-kind shopping experience with compelling products and world-class service. Tailored Brands features leading menswear retailers Men’s Wearhouse, Jos. A. Bank and Moores Clothing for Men, and family retailer K&G Fashion Superstore.
Learn more at https://www.tailoredbrands.com




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A MESSAGE FROM OUR CHIEF EXECUTIVE OFFICER

In fiscal 2019, we made solid progress against our strategic objectives.

Our business momentum was unfortunately arrested by the COVID-19 pandemic. In response, we took swift and extensive actions to protect the health and safety of our customers, employees and communities and to provide our business additional liquidity to weather this uncertain period.

     

Dear 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 Friday, June 26, 2020. Holders of record of our common stock as of April 28, 2020 are entitled to notice of, and to vote at, the Annual Meeting. This year, in light of public health concerns related to the novel coronavirus (“COVID-19”) pandemic and in order to protect the health and well-being of our employees, directors, shareholders and other stakeholders, our Annual Meeting will be conducted in a virtual format only at www.virtualshareholdermeeting.com/TLRD2020.

The economic environment we are operating in is without precedent – further intensifying and accelerating change in an already rapidly evolving and challenging retail environment. I am proud to report that our Company did not, and will not, stand still in the face of those challenges. In fiscal 2019, we made solid progress against our strategic objectives of providing our customers with personalized products and services, seamless omni-channel experiences and brands that stand for more than just price. That progress was driven, in part, by our continued success in attracting and retaining top-flight talent. Indeed, as 2019 progressed and 2020 began, we were encouraged by the improved momentum we saw in our business including February 2020 when all four of our brands showed positive comparable sales growth.

Our business momentum was unfortunately arrested by the COVID-19 pandemic. In response, we took swift and extensive actions to protect the health and safety of our customers, employees and communities and to provide our business additional liquidity to weather this uncertain period. On March 17, 2020, we temporarily closed our retail locations in the U.S. and Canada. These temporary store closures resulted in the need to furlough or temporarily lay off all of our store employees and a significant portion of employees in our distribution network and offices; however, we have continued to pay both the Company and employee portions of health premiums for medical, dental and vision for affected employees.

We are maximizing our liquidity and cash position by executing $310 million of additional borrowings under our credit facility and by taking aggressive and prudent actions to reduce and defer operating expenses, capital expenditures and inventory purchases. We have also put into place temporary base salary reductions for our officers and employees with a salary of $100,000 or more, ranging from 10% to 50%. The Board of Directors also agreed to a 50% reduction in its cash retainer fees.

While we may not be running at 100%, we have implemented enhanced safety protocols at our e-commerce fulfillment centers and our New Bedford, Massachusetts factory. This enabled us to re-open our fulfillment centers, bring back certain furloughed employees and meet our online customers’ needs. Our factory in New Bedford, Massachusetts, was able to pivot to produce cotton, washable facemasks that can be used when an FDA-approved mask is not available. This not only allowed us to bring back an increasing number of our furloughed employees to the factory, but we are also helping our communities create the safe environment needed to employ essential frontline workers.

We know that fiscal 2020 will continue to present many difficult challenges as the U.S., Canada, and the rest of the world work to reopen businesses. We look forward to fully reopening our stores as soon as possible; however, the safety and well-being of our employees, customers, and communities will remain our utmost priority. I strongly believe that with the conviction and energy of our leadership team we will face whatever challenges may come our way and we will continue fighting to drive value for all of our stakeholders every day.

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

Regards,

DINESH LATHI
President and Chief Executive Officer

May 14, 2020


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A LETTER FROM YOUR BOARD OF DIRECTORS

“We are committed to the creation of long-term value for all of our stakeholders and believe that one of our most important responsibilities is providing independent oversight of the Company’s strategy...Dinesh and the management team had our full support as they invested in the people and the tools needed to drive the Company’s transformation.”











     

Dear Fellow Shareholders:

Thank you for your investment in Tailored Brands. We are committed to the creation of long-term value for all of our stakeholders and believe that one of our most important responsibilities is providing independent oversight of the Company’s strategy. Before reviewing the actions taken to navigate the COVID-19 pandemic, it’s important to note the substantial progress the Company has made to better position itself to compete in a rapidly evolving and challenging retail environment. There have been significant changes in the customer and competitive environment in recent years including the ongoing casualization of the workplace, the accelerated move to online shopping and the evolving expectations associated with demographic changes, as well as the increase of digital-born players and new business models, all of which have left traditional players like specialty and department stores fighting to redefine themselves. COVID-19 has further accelerated these changes.

The Board and management agree that the Company needs to act with urgency and conviction to address the opportunities to provide the customer with personalized products and services, seamless omni-channel experiences and brands that stand for more than just price. We also recognize that these growth initiatives must be coupled with a strong foundation of cost rationalization, capital allocation and portfolio focus. For the past few years, the Company has been focused on repaying its debt and strengthening its balance sheet, which allowed us to broaden our focus in 2019 to include making investments in the business—consistent with the Company’s strategy—to lay the foundation for future growth. Dinesh and the management team had our full support as they invested in the people and the tools needed to drive the Company’s transformation.

2020 has presented unprecedented challenges as a result of the COVID-19 pandemic. Since mid-March 2020, the Board, management, and the Company’s external advisors have been meeting frequently to assess the rapidly evolving situation and to develop risk mitigation strategies and business contingency plans to position the Company to emerge from the pandemic. The Company took immediate actions to ensure that it had ample liquidity by executing borrowings under its ABL credit facility and to preserve cash through reduced expenses.

As it became necessary to temporarily close stores and furlough employees, the Board worked with management to reduce the salaries of non-furloughed senior-level employees. We reduced Mr. Lathi’s base salary by 50% and the base salary of all other Named Executive Officers and other executive vice presidents directly reporting to our Chief Executive Officer by 25%. In addition, we reduced the base salaries of our other officers and employees with a salary of $100,000 or more by a range of 10% to 15%. Your Board of Directors also agreed to a 50% reduction in its cash retainer fees.

We have taken other compensation-related actions in the face of the COVID-19 pandemic. The Compensation and Organizational Development Committee determined that even though our executive officers substantially met or exceeded their individual strategic goals in 2019, they would not receive any bonus payout for 2019 due to the need to conserve cash because of the Company’s stores being temporarily closed for an unknown duration. In addition, the Company will also delay 2020 long-term incentive grants as we did not believe that it would be appropriate to make equity or other grants to our executives while so many of our employees are furloughed and because the COVID-19-related temporary store closures make it impossible to establish financial metrics for the performance-related portions of our long-term incentive grants.

Given the substantial impact of the COVID-19 pandemic on market activity and increased volume and volatility in the trading of the Company’s stock, the Board adopted a short-term shareholder rights plan to protect the best interests of all Tailored Brands shareholders. The rights plan is not intended to prevent or interfere with any action that the Board determines to be in the best interests of shareholders. Instead, it is designed to allow the Company’s shareholders to realize the long-term value of their investment. The plan has a one-year duration, expiring on March 29, 2021, though it may also be terminated, or the rights may be redeemed, prior to the scheduled expiration of the plan under certain other circumstances. For a more detailed description of the plan, please see the Company’s Current Report on Form 8-K, filed with the US. Securities and Exchange Commission on March 31, 2020.

We appreciate the cooperation of our various stakeholders as we work through this historic event and look forward to returning to a time when our stores are reopened, and our employees can gather again in our offices and other facilities.


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A Letter from Your Board of Directors

As we head into the 2020 Annual Meeting of Shareholders, we also wanted to share some of the highlights of the Board’s focus during the past year. In 2019, we engaged directly with our top five holders, representing 34% of the shares outstanding, via telephonic or in-person meetings. Generally, the discussions focused on our transformation strategy in the face of significant macro challenges, how the Board provides oversight in key areas such as strategy, risk management, environmental, social and governance matters (“ESG”) and executive compensation, and how the composition of the Board in terms of skill set and diversity supports its governance responsibilities.

Strategic and Risk Oversight: In addition to dedicating one meeting a year specifically to strategic planning, the Board actively participates in the discussion of strategies, key initiatives and capital allocation for the Company and each of our brands throughout the year. We monitor progress and adjust the strategy and key policies as conditions dictate. In 2019, we made the decision to suspend the quarterly cash dividend for reallocation to debt repayment and opportunistic share repurchases.

In addition to strategy, the Board continues to be focused on and committed to oversight of management and business performance; talent management; culture; technology; privacy; compliance; ESG; and enterprise risk management, including cyber security, climate change and business continuity and financial risk. The Board and its Committees play an active role in overseeing management’s identification, assessment, and mitigation of risks that are material to the Company, including most recently the unprecedented challenges presented as a result of the COVID-19 pandemic.

Environmental, Social and Governance (ESG): The Board is directly involved in the oversight of the Company’s sustainability and corporate social responsibility initiatives and, to formalize this oversight role, the Board recently amended the charter of the Nominating and Corporate Governance Committee to include responsibility for overseeing the Company’s environmental, social and governance efforts and reporting. The Company recently launched a new section of the investor website dedicated to its sustainability efforts. We invite you to learn more about the Company’s ESG efforts at www.tailoredbrands.com under “Investors – Responsibility”. In addition to its many ESG-focused efforts, the Company is actively looking for ways to utilize more sustainable elements in its products, including the launch of the new Made to Matter™ product line at Jos. A. Bank. The Company will continue working to increase its reporting regarding greenhouse gas emissions and the impacts of climate change on the Company’s business.

Executive Compensation and Organizational Development: To better reflect its oversight of the Company’s organizational design, talent management and compensation strategies, objectives, and programs, in 2019 the Compensation Committee was renamed the Compensation and Organizational Development Committee. Our compensation philosophy emphasizes pay for performance; therefore, a significant portion of the compensation of senior executives is tied to the Company’s short-term and long-term performance. The executive compensation elements incorporate multiple performance metrics and are designed to reward executives for the delivery of sustained, profitable financial performance and outstanding leadership that reflects the Company’s culture and values. In addition, we remain mindful of the impact of equity awards on shareholder dilution, particularly when the Company’s stock price is low.

Board Refreshment and Diversity: We believe that our goal of creating long-term value for our stakeholders is fostered by having the right combination of skills, experiences, diversity and tenure reflected in the composition of the Board. The proposed Board nominees bring meaningful skills and experience that map to those necessary for our oversight of the Company’s strategy. We are actively working to evolve our board composition to ensure alignment with the Company’s needs as it continues to transform. We are excited that Drew Vollero joined us in November 2019 as he further deepens our bench strength in key areas, such as finance leadership, corporate turnarounds and marketing, with experience in both the technology and consumer products industries.

We are also very proud of the diversity represented on the Board of Directors: five of the six current directors are diverse, including three women, and each of our Board leadership roles are held by diverse directors. We have also continued to focus on Board refreshment – the average tenure for the Board nominees is three years, representing a significant reduction over past years.

We also want to express our gratitude to Grace Nichols for her nine years of dedicated service to the Company. Grace will be leaving the Board following the Company’s 2020 Annual Meeting of Shareholders.

We acknowledge the tremendous trust that our shareholders place in us to exercise effective oversight of the Company as it strives to fulfill its purpose and want you to know that we are engaged and committed to taking the actions that we believe are in the best interests of our shareholders over the long term. We thank you for your ongoing support of the Company.

May 14, 2020

THEO KILLION DINESH LATHI IRENE CHANG BRITT
 
SUE GOVE GRACE NICHOLS ANDREW VOLLERO

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                             

Date
Friday, June 26, 2020

Time
11:00 a.m., Pacific Daylight Time

 

Virtual Meeting Site
The Annual Meeting will be held virtually via live webcast and can be accessed online at www.virtualshareholdermeeting.com/TLRD2020.

Record date
Only holders of record of our common stock at the close of business on Tuesday, April 28, 2020, are entitled to receive notice of, and to vote at, the meeting and any adjournment(s) thereof.

 

ITEMS OF BUSINESS

           
Election of five directors to our Board of Directors for the coming year;
Ratification of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2020;
Advisory vote to approve the compensation of our named executive officers;
Adoption of the Tailored Brands, Inc. 2016 Long-Term Incentive Plan, as amended and restated; and
Transaction of such other business as may properly come before the meeting or any adjournment thereof.
 

HOW TO VOTE

You are cordially invited to attend the meeting virtually. To ensure that your vote is properly recorded, please vote as soon as possible, even if you plan to attend the Annual Meeting. As described in the Notice of Internet Availability of Proxy Materials, you may submit your proxy by mail, Internet, or telephone. If you plan to attend the meeting you can vote either by your proxy or by following the instructions available on the meeting website during the meeting. For further details on voting, please refer to the section entitled “Voting and Other Information” beginning on page 86 of this proxy statement.

VIRTUAL MEETING PARTICIPATION

Any shareholder can listen to and participate in the Annual Meeting live via the Internet at www.virtualshareholdermeeting.com/TLRD2020. The webcast will start at 11:00 a.m. Pacific Daylight Time. You will need the 16-digit control number shown on your Notice of Internet Availability of Proxy Materials (or on your proxy card or voting instruction card if you receive printed proxy materials) to vote during the meeting. If you are a shareholder and you do not have your 16-digit control number, you will only be able to listen to the Annual Meeting.

On or about May 15, 2020, proxy materials or a Notice of Internet Availability of Proxy Materials will be sent to shareholders in connection with our solicitation of proxies for this year’s Annual Meeting of Shareholders.

By Order of the Board of Directors


A. ALEXANDER RHODES
Corporate Secretary

May 14, 2020

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TABLE OF CONTENTS

6 ABOUT TAILORED BRANDS
 
    7       2019 Highlights
 
8 VOTING ROADMAP
 
8 Matters to be Voted on at the Annual Meeting
 
12 BOARD MATTERS
 
14  PROPOSAL 1:  ELECTION OF DIRECTORS
 
14 Tailored Brands Board of Directors
23 The Board’s Role and Responsibilities
27 How Our Beliefs and Practices Align with Investor Stewardship Group’s (ISG) Corporate Governance Principles
29 Board Structure
31 Board Processes
34 Director Compensation
 
36 AUDIT COMMITTEE MATTERS
 
36  PROPOSAL 2:  RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
37 Fees
37 Pre-Approval Policy and Procedures
38 Audit Committee Report
 
39 EXECUTIVE OFFICERS
 
41 EXECUTIVE COMPENSATION
 
41  PROPOSAL 3:  ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
 
41 Executive Summary
44 Compensation and Organizational Development Committee Report
45 Compensation Discussion and Analysis
58 Summary Compensation Table
59 Grants of Plan-Based Awards Table
61 Outstanding Equity Awards at Fiscal Year-End Table
63 Option Exercises and Stock Vested Table
63 Pension Benefits
63 Nonqualified Deferred Compensation
63 CEO Pay Ratio
64 Employment Agreements
64 Potential Payments Upon Termination or Change in Control
 
68 TAILORED BRANDS 2016 LONG-TERM INCENTIVE PLAN
 
68  PROPOSAL 4:  ADOPTION OF THE TAILORED BRANDS, INC. 2016 LONG-TERM INCENTIVE PLAN, AS AMENDED AND RESTATED
 
69 The Proposed Amendments
71 Key Plan Features
72 Summary of the Plan
78 U.S. Federal Income Tax Consequences
81 Plan Benefits
 
83 STOCK OWNERSHIP INFORMATION
 
83 Equity Plan Compensation Information
83 Security Ownership of Certain Beneficial Owners and Management
85 Director and Executive Officer Equity Ownership
85 Delinquent Section 16(a) Reports
 
86 VOTING AND OTHER INFORMATION
 
90 MISCELLANEOUS MATTERS
 
90 Submitting Proposals for 2021 Annual Meeting
90 Other Matters
 
91 USE OF NON-GAAP FINANCIAL MEASURES
 
91 GAAP to Non-GAAP Adjusted Consolidated Statement of Earnings Information
 
A-1 APPENDIX A: TAILORED BRANDS, INC. 2016 LONG-TERM INCENTIVE PLAN, AS AMENDED AND RESTATED

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ABOUT TAILORED BRANDS

We are a leading omni-channel specialty retailer of menswear, including suits, formalwear and a broad selection of business casual offerings. We help our customers look and feel their best by delivering personalized products and services through our convenient network of stores and e-commerce sites. Our brands include Men’s Wearhouse, Jos. A. Bank and K&G in the United States and Moores Clothing for Men in Canada.

 

OUR PURPOSE

Why do we exist?

We help our customers love how they look.

 
 

OUR MISSION

How will we fulfill our purpose?

We provide a personal, convenient, one-of-a-kind shopping experience with compelling products and world-class service.

 
 

OUR VALUES

The Tailored Brands family was built on generous spirits, world-class service to our customers and each other, and strong support for our communities. We strive to improve the world we serve by being a responsible, respectful and valuable global citizen. We understand that it is the communities we serve that have made us successful, and we are privileged to give back to both our employees and our communities.



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About Tailored Brands

2019 HIGHLIGHTS

PERFORMANCE HIGHLIGHTS

In 2019, we focused our efforts to position the Company for long-term success by executing on our three key strategic initiatives:

offer personalized products and services,
provide inspiring and seamless experiences in and across every channel, and
tell the stories of our brands so that our customers know we stand for more than just price.

We also took several actions intended to accelerate debt reduction and provide additional financial flexibility to invest in our customer-facing transformation strategies.

Key metrics include:

NET CASH PROVIDED
BY OPERATING
ACTIVITIES
($ in mm)
      ADJUSTED EARNINGS
PER SHARE FROM
CONTINUING
OPERATIONS(1)
      DEBT REDUCTION(2)
($ in mm)
      LIQUIDITY PROFILE(3)
($ in mm)

(1) Throughout this proxy statement, we will be referring to earnings per share (“EPS”) from continuing operations on an adjusted basis. A reconciliation of adjusted EPS to GAAP EPS and an explanation of why adjusted EPS may be useful is included on page 91 of this proxy statement.
(2) Calculated based on reported total debt on consolidated balance sheet.
(3) Calculated as (cash + cash equivalents + ABL availability).

SUSTAINABILITY HIGHLIGHTS

      OUR COMPANY
At Tailored Brands we believe a good job includes providing a safe and inclusive workplace where everyone is treated with dignity, understanding, and respect.
     
19,300
employees
95 score in Human Rights Campaign’s Annual Corporate Equality Index (CEI), which rates workplaces on Lesbian, Gay, Bisexual and Transgender Equality We have a comprehensive Supplier Code of Conduct that prohibits forced labor and child labor and requires freedom of association
OUR COMMUNITIES
We seek to be as admired for our community support as we are for our world class customer service and products.
Donated excess merchandise to 700 non-profit organizations serving those affected by poverty and disaster through our relationship with Delivering Good Over 357,000 articles of gently used men’s and women’s professional attire donated to our suit drives in July 2019 Served those who serve via $3.0M+ in cumulative donations that benefit U.S. and Canadian military veterans and by sponsoring the U.S. Congressional Medal of Honor Society
OUR PLANET
We strive to be good citizens of our planet and are taking many steps to be as environmentally friendly as possible.
Houston, Texas corporate office is LEED certified and our New Bedford, Massachusetts factory’s solar panels produce clean energy We strive to reduce our carbon footprint by re-use and recycling in our stores, distribution centers, hubs and offices and reducing use of fossil fuels by our fleet of vehicles We are actively looking for ways to utilize more sustainable elements in our products, including the launch of the new Made to Matter™ product line at Jos. A. Bank

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VOTING ROADMAP

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 Friday, June 26, 2020 or any adjournment(s) thereof (the “Annual Meeting”). This year, in light of public health concerns related to the COVID-19 pandemic and in order to protect the health and well-being of our employees, directors, shareholders and other stakeholders, our Annual Meeting will be conducted in a virtual format only at www.virtualshareholdermeeting.com/TLRD2020. For further details on voting, please refer to the section entitled “Voting and Other Information” beginning on page 86.

MATTERS TO BE VOTED ON AT THE ANNUAL MEETING

The Annual Meeting will be held to vote for the following proposals:

PROPOSAL 1
ELECT FIVE DIRECTORS TO OUR BOARD OF DIRECTORS

BOARD NOMINEE DEMOGRAPHICS

Independence       
4 out of 5 director nominees are independent including our Chairman of the Board
Strong independent Board chair and committee chair roles with clearly articulated responsibilities
Diversity
4 women/minorities on the Board
Significant diversity of experience, thought, age, gender, ethnicity and background
Age
58 years average age
Tenure
3 years average tenure
Skills,
Qualifications
and Experience
As a group, our director nominees bring significant experience and insights acquired in fields relevant to ours as well as broad business and governance experience through service on other public company boards. We believe that the Board is comprised of directors with the necessary skills and experience to support the Company’s strategy and contribute to effective oversight of the Company.
Engagement of
the Board
9 Board and 21 Board committee meetings during fiscal 2019
99% attendance rate as a group at Board and Board committee meetings

THE BOARD RECOMMENDS A VOTE FOR EACH DIRECTOR NOMINEE.
The Board of Directors and the Nominating and Corporate Governance Committee believe that the five director nominees constitute a diverse slate of directors with broad leadership experience who possess the necessary qualifications and experience to effectively oversee the business and the long-term interests of shareholders.

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Voting Roadmap

PROPOSAL 2
RATIFY DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2020

Deloitte & Touche LLP is an independent registered public accounting firm with significant sector specific expertise, reasonable fees and appropriately limited ancillary services.

THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.
The Audit Committee annually evaluates Deloitte & Touche LLP and determined that its retention continues to be in the best interests of the Company and its shareholders.

PROPOSAL 3
APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

A STRONG RELATIONSHIP BETWEEN PAY AND PERFORMANCE

We believe that our executive compensation program is structured

(i)  to promote a performance-based culture which links the interests of management and shareholders,
(ii) to support our business objectives, and
(iii)to align our programs with recognized corporate governance and compensation best practices.

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

2019 TARGET PAY MIX

OTHER NEOs


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Voting Roadmap

COMPENSATION HIGHLIGHTS

Our executive compensation program is premised on a pay for performance philosophy and intentionally places a significant percentage of Named Executive Officer (“NEO”) compensation at risk. We evaluate the competitive positioning of each compensation element and while we do not target compensation to any benchmark percentile, we review the comparable market for each element of pay. In 2019, we compensated our NEOs as follows:

Base Salary       A fixed, competitive component of pay based on responsibilities, skills and experience.       Page 48
Annual Cash
Incentive Plan
Designed to recognize annual performance achievements based on the Compensation and Organizational Development Committee’s assessment of Company performance across three categories: adjusted earnings before interest and taxes (“EBIT”) (60%), revenue (30%), and individual strategic objective performance (10%). Page 49
Long-Term
Incentive Plan

Our Long-Term Incentive Plan is designed to encourage performance that drives shareholder value over the long term and aligns executive interests with shareholders through the use of equity-based and long-term performance cash awards.

2019 grant consisted of stock options, stock appreciation rights and performance cash awards for the Chief Executive Officer (“CEO”).
2019 grants consisted of stock options and performance cash awards for the other NEOs.
Performance cash is payable based on the Company’s cumulative adjusted EPS for the three-year period consisting of fiscal years 2019 through 2021, with a multiplier ranging from 25% to 200%.
Page 50

KEY EXECUTIVE COMPENSATION FEATURES

The Compensation and Organizational Development Committee has incorporated the following market-leading governance features into our programs:

WHAT WE DO  
Align Pay and Performance
Engage in a Rigorous Target-Setting Process for Incentive Metrics
Use Multiple Performance Metrics to Balance Top Line and Bottom Line Achievement
Have Stock Ownership Requirements for Executive Officers
Implement Incentive Compensation Programs and Governance Practices Designed to Discourage Undue Risk-Taking
Include Clawback Provisions in our Key Compensation Programs
Prohibit Hedging, Pledging, Short Sales and Derivative Transactions in our common stock
Engage an Independent Compensation Consultant
Include Double Trigger Change in Control Provisions for Equity Awards

WHAT WE DON’T DO  
No Tax Gross-Ups
No Employment Agreements
No Special Change in Control Severance Provisions for Executive Officers Compared to Other Senior Executives
No Payment of Dividends on Unearned or Unvested Long-Term Incentives
No Repricing of Underwater Stock Options
No Material Executive Perquisites

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Voting Roadmap

THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.


Our Compensation and Organizational Development Committee provides independent oversight of our executive compensation with the assistance of an independent compensation consultant. Our executive compensation program is working effectively and is aligned with short- and long-term business goals and strategy and demonstrate a strong link between pay and performance.

PROPOSAL 4
ADOPT THE TAILORED BRANDS, INC. 2016 LONG-TERM
INCENTIVE PLAN, AS AMENDED AND RESTATED

Shareholders are being asked to approve an amendment and restatement of our 2016 Long-Term Incentive Plan to:

increase the number of available shares by 3.3 million shares, and
make certain other technical changes including, without limitation
removing or revising the provisions of the 2016 LTIP regarding performance-based compensation under Section 162(m) that have become obsolete;
increasing the annual limits on awards that may be granted to an employee;
clarifying that no dividends will be paid on unvested or unearned awards under the 2016 LTIP;
allowing withholding for taxes at a rate in excess of the minimum required rate; and
reducing the fungible ratio from 2.0:1 to 1.75:1.

THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.


The Board and management believe it is important that the 2016 LTIP, as proposed to be amended and restated, 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.

Shareholders will also transact such other business as may properly come before the meeting or any adjournment thereof.

On or about May 15, 2020, we will begin mailing a Notice of Internet Availability of Proxy Materials to the holders of record of our common stock, $0.01 par value per share (“common stock”), on April 28, 2020 (the “Record Date”). The Notice of Internet Availability of Proxy Materials contains instructions on how to access the Notice of Annual Meeting of Shareholders, this proxy statement, the form of proxy and our annual report over the Internet. At the close of business on the Record Date, there were outstanding and entitled to vote 48,751,393 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.

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BOARD MATTERS

THE TAILORED
BRANDS BOARD

THE BOARD IS PRIMARILY RESPONSIBLE FOR:

Overseeing Tailored Brands’ strategic plan, overall performance and direction
Evaluating the Company’s capital allocation policies
Overseeing risk and internal controls
Monitoring executive performance, compensation and succession planning
Establishing broad corporate policies, including in relation to organizational development, governance, corporate social responsibility and sustainability

TO EFFECTIVELY ADMINISTER THESE RESPONSIBILITIES, THE BOARD USES THE FOLLOWING CRITERIA IN SELECTING AND RECOMMENDING BOARD NOMINEES:

Directors with a range of skills and experiences in areas relevant to oversee our strategy and mitigate the risks we face
A majority of independent directors to constructively challenge ideas in the boardroom and contribute to effective dialogue
Diversity of experience, background, gender, age and ethnicity to ensure that a broad range of views are considered

The Board believes that the 2020 director nominees represent the right composition to effectively oversee the implementation of our strategy and constructively challenge management.

   

DINESH S. LATHI, 49

President and Chief Executive Officer,
Tailored Brands, Inc.

Tenure: 4 years
Other Current Public Boards: 1
Skills:

   

THEO KILLION, 69

Chairman of the Board,
Managing Partner, The Sierra Institute

 INDEPENDENT 

Committees: Compensation (Chair),
Nominating and Corporate Governance
Tenure: 3 years
Other Current Public Boards: 0
Skills:

   

IRENE CHANG BRITT, 57

C-Suite Executive, several Fortune
500 Companies (retired)

 INDEPENDENT 

Committees: Audit, Nominating and
Corporate Governance (Chair)
Tenure:  5 years
Other Current Public Boards: 2
Skills:


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SUE GOVE, 61

President of Excelsior Advisors, LLC 
 INDEPENDENT 

Committees: Audit (Chair), Nominating and
Corporate Governance
Tenure: 3 years
Other Current Public Boards: 3
Skills:

   

ANDREW VOLLERO, 54

Chief Financial Officer, Allied Universal
 INDEPENDENT 

Committees: Audit
Tenure: 1 year
Other Current Public Boards: 0
Skills:

Strategy/Business Transformation      Branding/Marketing      Retail/Consumer
Apparel/Merchandising Digital/Omni-Channel

Technology/Data and Analytics

Finance/Audit

HR/Org Development Operations
Capital Markets and Investments

CSR/Sustainability

Corporate Governance

Risk Management

Current or Previous Public Company CEO

NOMINEE INDEPENDENCE

Independent: 4 including our Chairman of the Board

Not Independent: 1 consisting of our President and Chief Executive Officer

NOMINEE TENURE

0 to 3 years

4 to 8 years

9 or more years
 

NOMINEE AGE

NOMINEE GENDER
AND ETHNICITY



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PROPOSAL 1:
ELECTION OF DIRECTORS

 
WHAT AM I VOTING ON?
Shareholders are being asked to elect five director nominees for a one-year term.
VOTING RECOMMENDATION: FOR
The Board of Directors and the Nominating and Corporate Governance Committee believe that the five director nominees constitute a diverse slate of directors with broad leadership experience who possess the necessary qualifications and experience to effectively oversee the business and the long-term interests of shareholders.

TAILORED BRANDS BOARD OF DIRECTORS

RESPONSIBILITY FOR SELECTION OF DIRECTOR CANDIDATES

The Board of Directors (the “Board”) is responsible for selecting director candidates to stand for election by shareholders. 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.

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 or supplement the skills, 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 New York Stock Exchange (“NYSE”) listing standards, together with any special criteria applicable to service on various committees of the Board.

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In the event that vacancies are anticipated, or otherwise arise, the Committee will engage in the following evaluation process:

NOMINEE EVALUATION PROCESS

    

The Nominating and Corporate Governance 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 are 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 considers the skill sets desired by the Board, the diversity of experiences and backgrounds already represented on the Board, and the qualifications of potential candidates. The Board also reviews independence and potential conflicts of interest to identify candidates best qualified to serve the interests of our shareholders.

The Nominating and Corporate Governance Committee recommends qualified candidate(s) and the full Board may approve interim appointment or inclusion in the slate of directors to stand for election at the next annual meeting of shareholders.

Approved director nominees are presented in the proxy statement for consideration by shareholders and election for one-year terms.


NOMINATIONS BY SHAREHOLDERS

The policy of the Nominating and Corporate Governance Committee is to consider, when appropriate, written recommendations from shareholders for positions on the Board. A shareholder who wishes to recommend a prospective director nominee 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 uses the same criteria as for candidates recommended by the Nominating and Corporate Governance Committee, other Board members, or other persons.

Our bylaws provide for proxy access pursuant to which a shareholder, or group of up to 20 shareholders, owning shares of the Company’s common stock, representing an aggregate of at least 3% of our outstanding shares continuously for at least three years, may nominate and include in our proxy materials director nominees constituting up to 20% of our Board, provided that the shareholder(s) and nominee(s) satisfy the requirements in the Company’s bylaws. The Board believes that the provisions adopted in our bylaws appropriately balance the benefits shareholders gain under proxy access against the potential disruption that could be created by regular proxy contests, the corresponding turnover of a number of Board seats, and the challenges of on-boarding and integrating these new directors.

Shareholders may nominate persons for election as directors at an annual shareholders’ meeting, or for inclusion in our proxy statement for our 2021 Annual Meeting, if such nominations are made in accordance with the procedures set forth in the “Submitting Proposals for 2021 Annual Meeting” section on page 90 of this proxy statement. No formal shareholder nominations were received in accordance with the procedures set forth in our bylaws for the upcoming Annual Meeting.

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DIRECTOR QUALIFICATIONS

The Nominating and Corporate Governance Committee is responsible for reviewing with the Board the requisite skills, attributes, and experience 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 customers, its employees and the communities in which we do business. This evaluation includes an assessment of the knowledge and experience of Board candidates in strategy, business transformation, branding, marketing, retail or consumer goods, apparel or merchandising, digital or omni-channel technology, data and analytics, finance and audit, human resources or organizational development, operations, capital markets and investments, corporate social responsibility/sustainability, corporate governance, risk management, and senior leadership, among other areas, and is designed to ensure that the Board has the right mix of skills and experience to support the Company’s strategy and contribute to effective oversight of the Company.

HOW BOARD SKILLS SUPPORT OUR STRATEGY

Transforming Tailored Brands

Strategy and Business Transformation

Technology/Data & Analytics

     

Current or Previous Public Company CEO

HR/Org Development

Customer Facing Initiatives

Apparel/Merchandising

Retail/Consumer

Digital/Omni-Channel

Operations

Branding/Marketing

CSR/Sustainability

Capital Allocation

Risk Management

Capital Markets

Corporate Governance

Finance/Audit

The Company considers diversity broadly to include differences of viewpoint, professional experience, individual characteristics, personal background, qualities, skills, qualifications, gender, cultural background 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 enhances decision making and 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 insight 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 public 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 operations; 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.

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DIRECTOR TENURE AND BOARD REFRESHMENT

The Nominating and Corporate Governance Committee and the Board believe it is important for the Board to be “refreshed” by adding new directors from time to time. The diversity in thinking, experience, background and approach resulting from refreshment enhances Board leadership, deliberations and decision making, and are critical to the Board’s acting as a strategic, innovative, and problem solving body. To that end, three new directors have been added in the past three years, a new Chair of the Audit Committee was appointed in 2017 and a new Chairman of the Board was appointed in 2017 and again in 2019 following Mr. Lathi’s appointment as President and CEO of the Company. During the first quarter of fiscal 2018, the Board, at the recommendation of the Nominating and Governance Committee, approved the rotation of the chair for each of the Nominating and Governance Committee and the Compensation and Organizational Development Committee, appointing a new chair to each. In addition, to continue to provide opportunities for refreshment, the Board’s Corporate Governance Guidelines include an age limit which provides that a director shall not stand for election upon reaching the age of 75. Following the Annual Meeting, with the proposed slate of five director nominees, the Board would consist of three directors with three or less years of tenure and two directors with four to eight years of tenure.

AFFIRMATIVE DETERMINATION OF DIRECTOR INDEPENDENCE

As set forth in the Company’s Corporate Governance Guidelines (the “Guidelines”), a majority of the members of the Board 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 to these requirements, the Board believes that a substantial majority of the Board should be independent and meet the following heightened independence requirements:

is not an executive officer or director, or a person serving in a similar capacity with, nor an owner of more than 1% of the equity of, a significant customer, supplier, or service provider to us. For purposes hereof, “significant” shall mean circumstances where during the past fiscal year the business with the customer, supplier, or service provider equaled or exceeded either 1% of the revenue thereof or 1% of our revenue;
is not personally the accountant, lawyer, or financial advisor for compensation to any of our executive officers;
is not a trustee, director, or officer of any charitable organization that received contributions from us during the past fiscal year aggregating $1 million or 2% of the charitable organization’s consolidated gross revenues, whichever is greater;
has not within the last three years engaged in a related party transaction with us that was required to be disclosed in our proxy statement; and
is not a father, mother, wife, husband, daughter, son, father-in-law, mother-in-law, daughter-in-law, or son-in-law of a person who would not meet the foregoing 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 or potential conflicts of interest or competitive issues, 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 may establish from time to time additional qualifications for directors, taking into account the composition and expertise of the entire Board.

The Board has affirmatively determined that each director, with the exception of Mr. Lathi, 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.

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NOMINEES FOR DIRECTOR

Our Board has nominated five directors for election at the Annual Meeting to hold office until the next annual meeting of shareholders and the election of their respective successors. All of the nominees are currently directors. These nominees bring a wide set of individual talents to their oversight responsibilities, including a full array of business and leadership skills. Most nominees serve on other public company boards, enabling our Board to more quickly adopt best practices from other companies. Their diversity of experience and expertise facilitates robust and thoughtful decision-making as a Board.

Each agreed to be named in this proxy statement and to serve if elected and, as required by our bylaws, each nominee has delivered a written, irrevocable resignation letter 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.

We have no reason to believe that any of the nominees will be unable to serve. However, if before the election, one or more of the nominees should become unable to serve or for good cause will not serve, proxies will be voted for the remaining nominees and for any substitute nominees to be selected by the Nominating and Corporate Governance Committee and approved by the Board.

SKILLS AND EXPERIENCE

We believe that the Board is comprised of directors with the necessary skills and experience to support the Company’s strategy and contribute to effective oversight of the Company.

Strategy/Business Transformation

Branding/ Marketing

Retail/Consumer

Apparel/ Merchandising

Digital/Omni-Channel

Technology/ Data & Analytics

Finance/Audit

HR/Org Development

Operations

Capital Markets and Investments

CSR/Sustainability

Corporate Governance

Risk Management

Current or Previous Public Company CEO

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

DINESH S. LATHI
President and Chief Executive Officer, Tailored Brands, Inc.
Age: 49   |   Director since: 2016
Committees: None
Other current public boards: Five Below, Inc. (member of their audit and compensation committees)

  
PROFESSIONAL EXPERIENCE
Tailored Brands, Inc.
President and Chief Executive Officer (March 2019 to present)
Executive Chairman (October 2018 to March 2019)
Non-Executive Chairman (March 2017 to September 2018)
One Kings Lane, Inc.
Chief Executive Officer (April 2014 to June 2016)
Previously, Mr. Lathi spent seven years in various senior executive roles at eBay, Inc. and eight years in investment banking and private equity.
DIRECTOR SKILLS AND QUALIFICATIONS
Extensive experience in leadership, operations, strategy and financial management of online retailing as well as financial expertise gained as an investment banker, private equity executive and chief financial officer

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THEO KILLION  Independent  
Chairman of the Board; Managing Partner, The Sierra Institute
Age: 69   |   Director since: 2017
Committees: Compensation and Organizational Development (Chair); Nominating and Corporate Governance
Other current public boards: None
Previous public directorships: Zale Corporation (September 2010 to May 2014); Libbey, Inc. (May 2014 to May 2017); Express, Inc. (April 2012 to June 2017)

  
PROFESSIONAL EXPERIENCE
Tailored Brands, Inc.
Non-Executive Chairman of the Board (March 2019 to present)
Lead Director (October 2018 to March 2019)
The Sierra Institute, a Dallas based human resources consortium
Managing Partner (November 2016 to present)
Herbert Mines Associates, an executive search firm
Vice Chairman (May 2015 to March 2016)
Zale Corporation
Chief Executive Officer (January 2010 to July 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 also serves on the board of Claire’s Stores, Inc., a privately-held global retailer of fashionable jewelry accessories, and non-profit A Better Chance.
DIRECTOR SKILLS AND QUALIFICATIONS
Extensive experience as a senior executive and director in the retail industry, with particular expertise in strategic planning, merchandising, operations, human resources and organizational design, leadership development, consumer brand marketing and advertising

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IRENE CHANG BRITT  Independent  
C-Suite Executive, several Fortune 500 Companies (retired)
Age: 57   |   Director since: 2015
Committees: Audit; Nominating and Corporate Governance (Chair)
Other current public boards: Brighthouse Financial, Inc. (chair of their nominating and corporate governance committee and member of their compensation and investment committees); Dunkin Brands Group, Inc. (chair of their nominating and corporate governance committee and member of their audit committee)
Previous public directorships: Sunoco, Inc. (November 2011 to October 2012); TerraVia Holdings Inc. (March 2016 to January 2018)

  
PROFESSIONAL EXPERIENCE
Campbell Soup Co.
President, Pepperidge Farm and Senior Vice President, Global Baking and Snacking (March 2012 to February 2015)
Senior Vice President, Chief Strategy Officer (October 2010 to July 2012)
President, North America Foodservice (August 2008 to October 2010)
Ms. Britt is a former Fortune 500 C-Suite executive, having spent 30 years working for companies such as Kimberly-Clark, Kraft Foods and Campbell Soup Co, in progressively higher leadership roles. She is also Chairperson of the Board of Amica Senior Lifestyles Inc., a privately-held health care company, and a member of the Advisory Board of Peloton Capital Management, a small/mid-cap private capital fund. Ms. Britt is a National Association of Corporate Directors Board Leadership Fellow.
DIRECTOR SKILLS AND QUALIFICATIONS
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

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SUE GOVE  Independent  
President, Excelsior Advisors, LLC
Age: 61   |   Director since: 2017
Committees: Audit (Chair), Nominating and Corporate Governance
Other current public boards: Bed, Bath & Beyond Inc. (member of their nominating and corporate governance committee); Conn’s, Inc. (member of their audit committee and credit risk committee); IAA, Inc. (chair of their audit committee and member of their risk committee)
Previous public directorships: Zale Corporation (September 2004 to March 2006); AutoZone Inc. (July 2005 to December 2017); Logitech International SA (September 2015 to September 2018); Iconix Brand Group (October 2014 to May 2019)

  
PROFESSIONAL EXPERIENCE
Excelsior Advisors, LLC, a retail consulting and advisory firm
President (August 2014 to present)
Alvarez & Marsal, a corporate consulting firm
Senior Advisor (March 2017 to March 2019)
Golfsmith International Holdings, Inc.
President and Chief Executive Officer (October 2012 to April 2014)
President (February 2012 to April 2014)
Chief Operating Officer (September 2008 to October 2012)
Chief Financial Officer (March 2009 to July 2012)
Executive Vice President (September 2008 to February 2012)
Prior to Golfsmith, Ms. Gove spent 25 years at Zale Corporation where she served in senior financial, operating and strategic roles, culminating in the EVP and Chief Operating Officer role. Ms. Gove is a National Association of Corporate Directors Board Leadership Fellow.
DIRECTOR SKILLS AND QUALIFICATIONS
Significant executive experience with retail, marketing, merchandising and operations, as well as senior leadership, strategic and financial experience; also, has extensive experience serving on the boards of directors of other public companies

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ANDREW VOLLERO  Independent  
Chief Financial Officer, Allied Universal
Age: 54   |   Director since: 2019
Committees: Audit
Other current public boards: None
Previous public directorships: None

                                                                              
  
PROFESSIONAL EXPERIENCE
Allied Universal, a leading security and facility services company
Chief Financial Officer (October 2018 to present)
Snap, Inc.
Chief Financial Officer and Chief Accounting Officer (August 2015 to May 2018)
Mattel, Inc.
Senior Vice President – Corporate Strategy, Development & Investor Relations (September 2005 to August 2015)
Division Chief Financial Officer – Senior Vice President Finance and Strategy (September 2000 to September 2005)
Prior thereto, Mr. Vollero held a wide array of leadership roles at PepsiCo/Yum Brands spanning strategic planning, financial planning and analysis, accounting, marketing and general management.
DIRECTOR SKILLS AND QUALIFICATIONS
Extensive finance leadership and general management experience and skills in strategic planning, corporate turnarounds, mergers and acquisitions, capital allocation, investor relations, financial planning and analysis, accounting and marketing in the technology and consumer products industries

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

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THE BOARD’S ROLE AND RESPONSIBILITIES

Corporate governance is typically defined as the system that allocates duties and authority among a company’s shareholders, the 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 and management, who handle the day-to-day operations of the Company. The Board has responsibility for overseeing the Company’s long-term strategic plans, for establishing broad corporate policies, for hiring, managing and evaluating executive management, particularly the CEO, and for our overall performance and direction, but is not directly involved in our day-to-day operations.

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 and, in 2019, adopted substantial updates to the Guidelines to reflect current best practices.

Our Board currently consists of six directors, including five independent directors and one non-independent director. If all of the nominees for election are elected at the Annual Meeting, the Board will be comprised of five directors, including four independent directors and one non-independent director.

BOARD’S ROLE IN STRATEGIC OVERSIGHT

The Board is actively engaged in the oversight of the Company’s strategic planning. While the Board actively participates in the discussion of strategies, key initiatives and capital allocation for the Company and our brands throughout the year, one Board meeting per year, typically in September, is focused on the Company’s strategic planning and direction. At this meeting, the Board reviews the Company’s corporate strategy as presented by management and provides input and oversight on short-term strategic goals and helps set the long-term strategic direction of the Company. In addition to this annual review, the Board receives detailed presentations throughout the year on critical aspects of the implementation of these initiatives so that it can continually monitor progress and adjust the strategy as conditions dictate. These periodic presentations include a review of performance, progress on initiatives, and reports from specific departments such as finance, store operations, data and analytics, merchandising, marketing, information technology, supply chain, human resources and legal.

In addition to strategy, the Board continues to be focused on and committed to oversight of management and business performance, talent management, culture, technology needs, privacy concerns, risk management, compliance, sustainability and corporate responsibility.

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BOARD’S 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 enterprise risk and regularly reviews the Company’s significant risk exposures. The Audit Committee, Compensation and Organizational Development Committee, and Nominating and Corporate Governance Committee have been delegated significant responsibilities and oversight functions with respect to assisting the Board in its oversight of risk and the Company’s risk management programs as described further below. The Board receives periodic reports from committee chairs on risk-related matters relevant to each committee’s responsibilities.

      

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, conflicts of interest and the evaluation of enterprise risk exposures, including risk of fraud, technology, information security, privacy and data protection. Our General Counsel also periodically reviews with the Audit Committee legal matters, if any, that may have a material adverse impact on our financial statements. The Audit Committee, and the full Board when appropriate, receives regular updates from the Chief Technology Officer on IT security, internal and external security reviews, data protection, risk assessments, breach preparedness and response plans in overseeing our cybersecurity risk management program.

 

 

The Compensation and Organizational Development Committee is responsible for overseeing the management of risks relating to our organizational design and compensation programs. In connection with its oversight responsibility, the Compensation and Organizational Development 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 programs present a material risk to us. Based on its most current review and evaluation, the Compensation and Organizational Development 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, ethics, director nominations and succession planning and the Company’s environmental, social and governance efforts and reporting.

Management is responsible for enterprise risk assessment and the day-to-day management of strategic, reputational, financial, legal, and operational risks. Management continuously identifies and monitors potential risks which could impact the Company’s ability to achieve its objectives and execute its strategies, develops and reviews risk response plans, and takes steps to control risk where appropriate.

RISK OVERSIGHT DURING THE COVID-19 PANDEMIC

The full Board has assumed the responsibility for overseeing management’s risk mitigation efforts during the COVID-19 pandemic. Since mid-March, the Board, management, and the Company’s external advisors have been meeting frequently, as often as twice a week, to assess the rapidly evolving situation and work with management and the Company’s advisors to develop risk mitigation strategies and business contingency plans to position the Company to emerge from the pandemic.

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BOARD’S ROLE IN MANAGEMENT’S SUCCESSION PLANNING/ORGANIZATIONAL HEALTH

Succession planning is an important area of responsibility for our Board. The Compensation and Organizational Development Committee assists the Board with CEO and senior management talent development and succession planning processes. In order to identify potential successors for executive positions, the Board, with the help of senior management, regularly engages with our CEO about the “bench strength” behind senior leaders of the Company and current development needs.

STATEMENT ON SUSTAINABILITY

Stakeholders are increasingly expecting companies to be purpose driven and contributors to more than just a bottom line. Employees want to work for companies that stand for something they believe in, inspire them, and provide opportunities for meaningful contributions at all levels. Customers want brands that stand for something more than their products. Shareholders have made it clear that their expectations around ESG matters are at an all-time high. Communities are looking for partners to work with and support them.

Tailored Brands recognizes that our business operations rely heavily on people and impact the communities around us and our planet. We are committed to social responsibility and environmental stewardship throughout the Company and endeavor to:

Provide a safe and inclusive workspace where everyone is treated with dignity, understanding and respect,
Nurture and support the communities in which we operate, and
Be good citizens of our planet by working to reduce our carbon footprint, minimizing our impact by increasing our reuse and recycling efforts, and encouraging conservation and sustainability among our associates, our suppliers, and the community at large.

BOARD’S ROLE IN ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS

The Board is actively engaged in the oversight of the Company’s strategy and has ultimate oversight for our risk management programs, including ESG issues. In exercising its authority, the Board recognizes that the long-term interests of our shareholders are best advanced when considering other stakeholders and interested parties, including employees, customers, business partners and the communities in which we operate. The Nominating and Corporate Governance Committee oversees our ESG efforts and reporting, and the Board receives updates regarding ESG matters throughout the year.

Inspired by engagement with shareholders, the Company issued its second annual Sustainability report in fiscal 2018 and recently added a Responsibility section to its website at www.tailoredbrands.com. Based on the results of a robust sustainability materiality assessment, the Company determined that ongoing sustainability efforts should be focused on three core concepts as set forth below.

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SUSTAINABILITY HIGHLIGHTS

   

OUR COMPANY (WE)
What we are doing to provide good jobs and improve factory working conditions.
We are committed to being a diverse and inclusive organization that provides a safe, inclusive workplace where everyone in our diverse employee family is treated with dignity, understanding and respect.
Both our Board and Company leadership include significant diversity, with 83% of our Board members being diverse, including three women, and women comprising approximately one-third and ethnic minorities comprising approximately half of our overall leadership team.
In each of the past two years, we have been recognized as a “recommended” place to shop by the Human Rights Campaign’s annual Corporate Equality Index (CEI), achieving a 95 out of 100 rating.
We are committed to promoting employee growth through extensive and ongoing training and recognition programs for all our employees.
Each year we conduct an employee engagement survey to measure and improve employee engagement and satisfaction. Action plans are created and implemented by leadership based on the results of the survey, and overall results are shared with all employees.
We have a comprehensive Supplier Code of Conduct that prohibits forced labor and child labor and requires freedom of association.
We conduct annual Social and Labor audits of all of our manufacturing facilities and our largest mills.

   

OUR COMMUNITY (US)
What we are doing that benefits the communities we serve.
In 2019, we held our National Suit Drive and Canadian Suit Drive to benefit unemployed Americans and Canadians in need of appropriate interview attire as they seek to regain employment. We distributed approximately 357,000 clothing items to more than 150 local non-profit agencies.
In 2019, Men’s Wearhouse became the first formal clothing sponsor for the Congressional Medal of Honor Society, supporting our goal of serving those who serve.
AWEARNESS Kenneth Cole (a collaboration between Men’s Wearhouse, Moores and Kenneth Cole) has generated more than $3 million in donations since its inception in 2015 enabling us to support our U.S. and Canadian non-profit partners assisting military veterans: Hire Heroes USA® and True Patriot Love Foundation.
In 2019, Jos. A. Bank and K&G each gave $50,000 to the National Breast Cancer Foundation, Inc. supporting breast cancer research.
Through our environmentally sustainable merchandise donation program, in 2019, together with Delivering Good we shipped excess merchandise to a network of more than 700 non-profit organizations serving those returning to the workforce and affected by poverty and disaster.
As a member of Points of Light’s Corporate Service Council—comprised of 75+ members from other large organizations across various industries—we will leverage their resources to guide our employees to drive even more community impact and achieve business and social outcomes.
Our employees support each other through their voluntary contributions to the Willie Lopez Emergency Assistance Fund, a 501(c)(3) non-profit organization dedicated to empowering our coworkers experiencing unforeseen and catastrophic situations. In 2019, the Fund provided nearly $550,000 in assistance to 183 employees and passed the $9 million mark for grants issued since its inception in 1997.

OUR PLANET (ALL OF US)
What we are doing to improve our environmental stewardship.
Our corporate office in Houston, TX is a LEED certified building.
New and remodeled stores use the most efficient lighting products to reduce energy usage by about 50% per light fixture.
Our New Bedford, Massachusetts, manufacturing facility has a 1.3 mega-watt solar rooftop system that allows the facility to be self-sufficient, producing its own energy, reducing CO2 emissions and energy costs.
We strive to reduce, re-use and recycle in all our stores, distribution centers, hubs and offices. Our robust recycling and composting programs divert tons of waste and compostable materials from landfills annually. In addition, in 2019, we launched a new test program using our trucks to haul recyclable materials from our stores to our distribution centers for bundling and recycling.
We are reducing the use of fossil fuels by our fleet of vehicles through the use of route design and optimization, airflow streamlining technologies, such as nose cones, and discouraging idling.
We are actively looking for ways to utilize more sustainable elements in our products, including the launch of the new Made to Matter™ product line at Jos. A. Bank.
We use Green Earth® for dry cleaning our tuxedo rental garments for Men’s Wearhouse, Jos. A. Bank and Moores, instead of a petroleum based dry cleaning solvent.
We provide charging stations for electric vehicles at our Fremont and Houston campuses.
We are working to reduce our reliance on paper for operations. We have eliminated use of paper in the picking process in our retail and ecommerce distribution centers and our delivery hubs are implementing new scanning and tracking technologies to eliminate the use of paper logs and manifests.

The Board remains committed to social responsibility and environmental stewardship. We are honored to be named to Newsweek’s Inaugural 2020 list of America’s Most Responsible Companies. You can learn more about our ESG efforts and access our latest Sustainability Report at www.tailoredbrands.com under “Investors – Responsibility”.

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HOW OUR BELIEFS AND PRACTICES ALIGN WITH INVESTOR STEWARDSHIP GROUP’S (ISG) CORPORATE GOVERNANCE PRINCIPLES

Our Board has long maintained Corporate Governance Guidelines as a framework for its governing principles. The Guidelines are intended to assist the Board in fulfilling its responsibilities to our shareholders and are subject to change as the Board deems necessary or advisable in order to achieve its objectives. The Guidelines, which are available on our website, www.tailoredbrands.com, along with our other corporate governance practices, compare favorably under the Investor Stewardship Group’s (ISG) Corporate Governance Framework for U.S. Listed Companies, as outlined in the table below, and support the creation of long-term value for our shareholders.

ISG Principles         Tailored Brands Beliefs and Practices

Principle 1
Boards are accountable to shareholders.

All directors stand for election annually
Nominees deliver a written, irrevocable resignation letter 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
Proxy access with market terms (3% for three years, up to 20% of the Board)
Annual letter from the Board in the proxy statement that describes the Board’s activities over the past year 

Principle 2
Shareholders should be entitled to voting rights in proportion to their economic interest.

No dual-class share structure
Each shareholder is entitled to one vote per share

Principle 3
Boards should be responsive to shareholders and be proactive in order to understand their perspectives.

Our Chairman of the Board and management met with investors representing at least 34% of the shares outstanding in 2019
Engagement topics focused on our transformation strategy in the face of significant macro challenges, how the Board provides oversight in key areas such as strategy, risk management, ESG and executive compensation, and how the composition of the Board in terms of skill set and diversity supports its governance responsibilities
On a quarterly basis we invite our top institutional investors to discuss our operating results with senior management
For a discussion of actions we have taken in response to shareholder feedback, see “– Shareholder Engagement"

Principle 4
Boards should have a strong, independent leadership structure.

Independent Board chair, separate from CEO
Strong, independent committee chairs
Independent directors meet in executive session regularly
Board considers appropriateness of its leadership structure at least annually

Principle 5
Boards should adopt structures and practices that enhance their effectiveness.

80% of director nominees are independent, including our Chairman of the Board
80% of our director nominees are women or ethnic minorities, and each of our Board leadership roles are held by diverse directors
All Board committees are independent
Annual Board and committee self-evaluations
Active Board refreshment, with three new directors added in the past three years and an average Board tenure of 3 years
Limits on outside boards, with no director permitted to serve on more than four public company boards (including the Company’s)
No director may stand for re-election if he or she would be age 75 or older at the time of election
Director nominees attended 100% of combined total Board and applicable committee meetings in 2019, and all directors attended the 2019 annual meeting

Principle 6
Boards should develop management incentive structures that are aligned with the long-term strategy of the company.

Compensation and Organizational Development Committee reviews and approves incentive program design, goals and objectives for alignment with compensation and business strategies
Our executive compensation program is premised on a pay for performance philosophy and intentionally places a significant percentage of compensation at risk
The incentive pay elements are designed to reward executives for delivery of sustained, profitable financial performance and outstanding leadership that reflects our values and culture and furthers short- and long-term strategic objectives
Our executive compensation program received 88.7% shareholder support in 2019
 

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SHAREHOLDER ENGAGEMENT

The Board believes that it is important to foster long-term relationships with shareholders and understand shareholder perspectives on the Company. We value an open dialogue with our shareholders, and we believe that regular communication is a critical part of enabling our long-term success. To that end, we continue our outreach to and dialogue with our key institutional investors on a range of issues, including financial performance, executive compensation, sustainability and corporate governance matters, and we closely monitor policy statements and areas of focus for these investors. We also review feedback about our business from individual investors.

In 2019, we engaged directly with our top five holders, representing 34% of the shares outstanding, via telephonic or in-person meetings. Generally, the discussions focused on our transformation strategy in the face of significant macro challenges, how the Board provides oversight in key areas such as strategy, risk management, ESG and executive compensation, and how the composition of the Board in terms of skill set and diversity supports its governance responsibilities.

In addition, on a quarterly basis we invite our top institutional investors to discuss our operating results with senior management. Any concerns raised during these discussions are reported to the Board and discussed with management.

We are also responsive to shareholder feedback. In recent years, we have taken a number of actions to strengthen our governance and sustainability programs and enhance the disclosure of our practices. For example, the Board voluntarily adopted proxy access and, based on shareholder feedback, the Company conducted a sustainability materiality assessment and issued its inaugural sustainability report in 2017. In addition, the Board amended our bylaws to require nominees for director to submit an irrevocable resignation letter which will be considered by the Board in the event a director does not receive a majority of the votes cast in an uncontested election of directors. Instances such as these evidence our continued commitment to remain responsive on a variety of issues of importance to our shareholders.

We remain committed to be responsive to shareholder concerns and welcome future engagement with our 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 they can communicate with the Board. The Board receives reports from the general counsel on correspondence received from shareholders that, in his opinion, involves functions of the Board or its committees or that he otherwise determines merits Board attention. The Audit Committee has established procedures for the receipt, retention and treatment of any complaints about accounting, internal control, or auditing matters. In addition, any shareholder or other interested party wishing to send written communications to any one or more members of the Board or its Committees, the Chairman of the Board or the non-management directors of the Board as a group may do so by sending communications to them in care of the Corporate Secretary by mail or electronic correspondence:

6100 Stevenson Blvd., Fremont, California 94538, attention: Corporate Secretary
     
CorporateSecretary@tailoredbrands.com

All such communications will be reviewed by the Company and forwarded to Board members as appropriate.

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BOARD STRUCTURE

BOARD LEADERSHIP STRUCTURE

The Board 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. 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 retains the authority to modify the structure, as and when appropriate, to address our then current circumstances. The Board has appointed Mr. Killion to serve as non-executive Chairman of the Board and, in his capacity as Chairman, Mr. Killion serves as liaison between Mr. Lathi and the independent directors; consults regularly with Mr. Lathi and other members of management regarding items raised in executive sessions; has primary responsibility with Mr. Lathi for preparing the agenda for Board meetings; presides at all Board meetings; and chairs the executive sessions of the Board.

COMMITTEES OF THE BOARD OF DIRECTORS

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

AUDIT COMMITTEE

      
Chair: Sue Gove
Members:
(all independent)
Irene Chang Britt
Andrew Vollero
Meetings during the fiscal year ended
February 1, 2020:
Ten
Report: page 38
     
Key Committee Qualifications and Experience:
   
Chair’s Committee Expertise:
Extensive financial oversight experience including key leadership positions with a variety of publicly-held retail companies
Experienced leader and member of the audit committees for other publicly-held companies
National Association of Corporate Directors Board Leadership Fellow
   
The Audit Committee operates under a written charter adopted by the Board which reflects Securities Exchange Commission (“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 assists the Board in its oversight of: the integrity of the Company’s financial statements; the Company’s compliance with applicable legal and regulatory requirements; the Company’s independent registered public accounting firm and their qualifications and independence; and the performance of the Company’s internal audit function and independent registered public accounting firm. The Audit Committee’s responsibilities to the Board are detailed in the Audit Committee Charter, which can be found on the Company’s website.

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COMPENSATION AND ORGANIZATIONAL DEVELOPMENT COMMITTEE

      
Chair: Theo Killion
Members:
(all independent)
Grace Nichols
Meetings during the fiscal year ended
February 1, 2020:
Six
Report: page 44
     
Key Committee Qualifications and Experience:
   
Chair’s Committee Expertise:
Extensive background in operations and human resources, as well as executive management experience as a former Chief Executive Officer, bringing fresh perspective on leadership development
Significant experience serving on the boards of publicly-held companies, including serving on compensation and other board committees
 
The Compensation and Organizational Development 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 and Organizational Development Committee is “independent” in accordance with the NYSE Listing Standards and is a “non-employee director”, as defined in Section 16 of the Exchange Act. The Compensation and Organizational Development Committee assists the Board in its oversight responsibilities related to: the Company’s organizational design, talent management and 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 CEO and for all officers at the Senior Vice President level and above. The Compensation and Organizational Development Committee’s responsibilities to the Board of Directors are detailed in the Compensation and Organizational Development Committee Charter which can be found on the Company’s website.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

      
Chair: Irene Chang Britt
Members:
(all independent)
Theo Killion
Sue Gove
Grace Nichols
Meetings during the fiscal year ended
February 1, 2020:
Five
     
Key Committee Qualifications and Experience:
   
Chair’s Committee Expertise:
Substantial experience serving on the boards of publicly-held companies, currently chairing two other nominating and corporate governance committees
National Association of Corporate Directors (NACD) Board Leadership Fellow and recognized by the NACD as one of the nation’s most influential boardroom leaders in 2017
 

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 recommending corporate governance policies and principles for the Company; reviewing the composition of the Board; identifying and recommending qualified director candidates to the Board consistent with criteria approved by the Board; nominating directors for Board seats and committee membership; overseeing Board and Board Committee evaluations; and overseeing the Company’s environmental, social and governance efforts and reporting. The Nominating and Corporate Governance Committee’s responsibilities to the Board are detailed in the Nominating and Corporate Governance Committee Charter which can be found on the Company’s website.


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MANAGEMENT PARTICIPATION IN BOARD AND COMMITTEE MEETINGS

Key members of management regularly attend and participate in Board meetings, presenting on key topics for the Board. Regular attendees include the President and Chief Executive Officer, Chief Financial Officer, General Counsel, Chief Customer Officer, Chief Technology Officer and Executive Vice President – Strategy and Analytics. Other senior officers attend as meeting topics warrant. In addition, senior leadership participates in committee meetings as follows:

Audit Committee       President and Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Chief Technology Officer, General Counsel and Vice President of Internal Audit all actively participate in meetings. Other officers, including the Chief Information Security Officer, are present when appropriate.
Compensation and Organizational
Development Committee
President and Chief Executive Officer, Chief Human Resources Officer and General Counsel regularly participate in meetings.
Nominating and Corporate
Governance Committee
President and Chief Executive Officer and the General Counsel regularly participate in meetings.

EXECUTIVE SESSIONS OF NON-MANAGEMENT DIRECTORS

The Board and its committees have regular executive sessions where non-management directors meet without management participation. The Chairman of the Board is the presiding director for each executive session of the Board and the chair of each committee is the presiding director for each executive session of that committee. The Audit Committee holds regular executive sessions with representatives of the independent registered public accountant, the Chief Financial Officer and the Vice President of Internal Audit. The Compensation and Organizational Development Committee regularly meets in executive sessions that include just the independent compensation consultant. The Nominating and Corporate Governance Committee regularly meets in executive session without management present and may from time to time hold executive sessions with representatives from governance or other consultants when necessary.

ATTENDANCE

During the fiscal year ended February 1, 2020, the Board held nine meetings. Each director attended at least 75% of the meetings of the Board and each committee of which the director was a member. Average attendance of the incumbent directors standing for election at the 2020 Annual Meeting of Shareholders as a group was 100%.

Our Board 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. All directors who stood for election at our 2019 Annual Meeting of Shareholders attended the annual meeting.

BOARD PROCESSES

BOARD AND COMMITTEE EVALUATION PROCESS

The Board recognizes that a robust and constructive evaluation process is an essential component of good corporate governance and Board effectiveness. The Nominating and Corporate Governance Committee is responsible for the annual self-evaluation process, which is generally overseen by the Company’s General Counsel. Evaluations are designed to assess if the Board and its committees are functioning effectively and identify opportunities for improvement. Our process involves each director participating in an annual evaluation of the Board, the committees on which he or she serves and the committee chairs individually and seeks feedback in many areas, including structure, culture, board processes and meetings generally. Once the evaluation process is complete, the results are synthesized, anonymized and reported to the Board and Committee Chairs by the Company’s General Counsel. Such results are discussed by the full Board and each committee, as applicable, and changes in practices or procedures are considered and implemented as appropriate.

As part of the review process, the Chairman of the Board also speaks with directors individually to discuss issues in greater depth and obtain more targeted feedback and suggestions. This evaluation process generates robust comments and discussion at all levels of the Board, including with respect to Board refreshment and succession planning.

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In 2018, the Nominating and Corporate Governance Committee augmented the annual review process through the engagement of a third-party consultant experienced in corporate governance matters to provide further strategic insight into the Board’s effectiveness. Directors and senior management were interviewed by the independent third party and gave specific feedback on individual directors, committees and the Board in general. The independent third party synthesized the results and comments received during such interviews. At subsequent meetings, the consultants presented the findings to the Nominating and Corporate Governance Committee and the Board, which were then discussed in depth at subsequent meetings of both the Nominating and Corporate Governance Committee and the Board. The Nominating and Corporate Governance Committee intends to utilize third-party consultants periodically to augment the evaluation process.

In addition, to continually measure effectiveness of the Board and its committees, the independent directors regularly perform an evaluation during the executive sessions at the end of Board meetings to ensure that meeting objectives were satisfied, all agenda items sufficiently considered and information presented was sufficient, complete, understandable and organized, and any issues that need additional follow up are identified.

The Nominating and Corporate Governance Committee will also monitor director performance throughout the year, provide assistance and counseling in connection with such performance and, if necessary, suggest changes to the Board based upon director performance.

As a result of director evaluations and feedback, in the past several years enhancements have been made to the Board agenda and materials provided to the directors both for and between Board meeting, efficiency of meetings has improved, additional interactions with senior management have been added to support directors on key business and strategic matters, and additional skills have been identified that would be additive to the overall Board and Committee composition.

DIRECTOR EDUCATION

New directors receive an orientation upon joining the Board, including the opportunity to meet with members of management, which is designed to familiarize new directors with the Company’s purpose, business, operations, strategic direction, competitive environment, financial matters, risk management, corporate governance practices and other key policies and practices.

In 2017, the Company became a Full Board Member of the National Association of Corporate Directors (“NACD”). Joining NACD underscores our commitment to the highest standards of corporate governance and exemplary board leadership and provides our directors with the opportunity to gain proprietary insights about current and emerging governance issues and to participate in NACD’s world-class director education programs. Representatives of the Board frequently attend the NACD’s Cyber Summit and Global Board Leaders’ Summit, as well as local chapter presentations. In addition, Ms. Britt and Ms. Gove are NACD Fellows and, in 2017, Ms. Britt was named to the NACD Directorship 100, recognizing her as one of the nation’s most influential boardroom leaders.

The Board believes in the importance of continuing director education to enhance the performance of the Board and its committees. Directors are expected to periodically attend accredited continuing education programs, including through the Company’s membership with NACD, to further each director’s understanding of the responsibilities of directors of publicly-traded companies, emerging issues, best practices and individual areas of expertise. In addition, directors receive ongoing internal education from management and the Company’s advisors on matters relevant to the Company’s business, industry trends and developments, corporate governance and other appropriate subjects to assist the directors in discharging their duties.

TRANSACTIONS WITH RELATED PERSONS

During the fiscal year ended February 1, 2020, there were no transactions with related persons, as described in Item 404(a) of Regulation S-K.

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POLICY AND PROCEDURES FOR APPROVAL OF RELATED PERSON TRANSACTIONS

The Board’s Audit Committee formally adopted a written policy with respect to related person transactions to document procedures pursuant to which such transactions are reviewed, approved or ratified. The policy applies to any transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which (i) we or any of our subsidiaries are a participant, (ii) any related person has a direct or material indirect interest and (iii) the amount involved exceeds $120,000. The Audit Committee is responsible for reviewing, approving and ratifying any related person transaction. The Audit Committee intends to approve only those related person transactions that are in, or are not inconsistent with, the best interests of the Company and its shareholders.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal 2019, 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 and Organizational Development Committee, (ii) a director of another entity, one of whose executive officers served on the Compensation and Organizational Development 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 2019, no member of the Compensation and Organizational Development 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 or the NYSE Listing Standards.

CORPORATE GOVERNANCE MATERIALS AVAILABLE ON THE COMPANY’S WEB SITE

You can learn more about our corporate governance by visiting www.tailoredbrands.com where you will find the following documents under “Investors – Corporate Governance – Governance Documents”:

Bylaws

Corporate Governance Guidelines

Code of Ethics and Business Conduct

Audit Committee Charter

Compensation and Organizational Development Committee Charter

Nominating and Corporate Governance Committee Charter

Director and Senior Executive Officer Stock Ownership Guidelines

Insider Trading Policy

Complaint Procedures for Accounting Matters

Regulation Fair Disclosure Policy

Policy Regarding the Hiring of Employees or Former Employees of the Independent Auditor

Anti-Corruption Compliance Policy

Policy and Procedures with Respect to Related Person Transactions

In addition, you can learn more about our ESG efforts and access our latest Sustainability Report, Supplier Code of Conduct, Conflict Minerals Policy and other information at www.tailoredbrands.com under “Investors – Responsibility”.

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.

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DIRECTOR COMPENSATION

PROCEDURES AND PROCESSES FOR DETERMINING DIRECTOR COMPENSATION

As set forth in the Guidelines, the Compensation and Organizational Development Committee reviews the form and amount of director compensation, including cash, equity-based awards, and other director compensation, and makes recommendations to the full Board for approval. 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   

At least annually, the Compensation and Organizational Development Committee reviews director compensation with its independent compensation consultants and from time to time makes recommendations to the full Board for approval of any changes to director compensation.

2 alignment of the director’s interest with the long-term interests of the Company
3 a transparent and readily understandable compensation program

DIRECTOR COMPENSATION

Beginning with the 2018-2019 service year (typically, June to June), the Board elected to change the structure by which their compensation is delivered such that 60% of the overall retainer is delivered in equity compensation and 40% is delivered in cash compensation. The change reflects the Board’s belief that the majority of a director’s compensation should be in the form of equity to align director compensation to shareholder interests and Company performance. As a result, our non-employee director compensation is as follows:

Pay Component       Director Compensation
Annual Cash Retainer $100,000
Annual Equity Retainer Restricted stock or deferred stock units (“DSUs”) equal to $150,000 divided by the closing price of our common stock as reported on the NYSE on the date of grant, which is the date of our annual meeting of shareholders(1), that vest on the first anniversary of the date of grant
Chairman of the Board Retainer $125,000
Committee Chair Retainers Audit Committee: $25,000(2)
Compensation and Organizational Development Committee: $20,000
Nominating and Corporate Governance Committee: $15,000
(1) If a director is appointed prior to the annual meeting, the appointed director receives a grant of 2,500 DSUs. All such awards are subject to the terms of the Tailored Brands, Inc. 2016 Long-Term Incentive Plan (the “2016 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.
(2) Members of the Audit Committee who do not serve as Chairman of the Board or chair another committee receive an additional 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.

Mr. Lathi, our President and CEO, does not receive any additional compensation for his service as a director.

The total standard annual Board fees for our directors ($250,000) has not changed since 2014 when it was established following the acquisition of Jos. A. Bank.

COMPENSATION CHANGES RELATED TO COVID-19

As a result of our extended store closures related to COVID-19, the Board of Directors agreed to a 50% reduction in all cash retainer fees effective March 29, 2020 until further notice.

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DIRECTOR COMPENSATION TABLE

The following table summarizes compensation paid to each non-employee director during the fiscal year ended February 1, 2020:

Name      Fees Earned or
Paid in Cash
($)
     Stock/Units
Awards
($)(1)(2)
     All Other
Compensation
($)(3)
     Total
($)
Theo Killion(4) 231,209 150,000 381,209
David H. Edwab(5) 100,000 150,000 7,259 257,259
Irene Chang Britt 125,000 150,000 275,000
Rinaldo S. Brutoco(6) 43,915 43,915
Sue Gove 125,000 150,000 275,000
Grace Nichols 100,000 150,000 250,000
Sheldon I. Stein(7) 100,000 150,000 250,000
Andrew Vollero(8) 24,959 10,300 35,259
(1) Represents aggregate grant date fair value of awards computed in accordance with FASB ASC topic 718. For additional information see Note 15 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2020.
(2) The aggregate number of DSUs held by each non-employee director as of February 1, 2020 was as follows:

Name       Aggregate Unvested
Unit Awards
Outstanding as of
February 1, 2020
Theo Killion 27,027
David H. Edwab 27,027
Irene Chang Britt 27,027
Rinaldo S. Brutoco
Sue Gove 27,027
Grace Nichols 27,027
Sheldon I. Stein 27,027
Andrew Vollero 2,500
(3) Represents amount paid by the Company in fiscal 2019 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. In accordance with the terms of his employment agreement and in connection with his retirement, we agreed, among other things, to provide continuing medical insurance benefits until Mr. Edwab and his spouse became eligible for coverage under Medicare. Both Mr. Edwab and his spouse became eligible for Medicare in late 2019; therefore, the Company’s obligation to provide continuing medical insurance benefits for Mr. Edwab ceased on September 30, 2019 and for Mr. Edwab’s spouse on October 31, 2019.
(4) Represents amounts paid to Mr. Killion as Chairman of the Board beginning on March 27, 2019 and as a member of the Audit Committee from June 21, 2019 through November 15, 2019 as well as his annual cash retainer and retainer as Chair of the Compensation and Organizational Development Committee.
(5) Mr. Edwab resigned from the Board as of April 5, 2020.
(6) Mr. Brutoco completed service with the Board as of the Company’s 2019 Annual Meeting of Shareholders on June 21, 2019 and he did not stand for re-election.
(7) Mr. Stein resigned from the Board as of April 8, 2020.
(8) Mr. Vollero joined the Board on November 15, 2019.

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AUDIT COMMITTEE MATTERS

PROPOSAL 2:
RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 
WHAT AM I VOTING ON?
Shareholders are being asked to ratify the appointment of Deloitte & Touche LLP to serve as the Company’s independent auditors for the fiscal year ending January 30, 2021.
VOTING RECOMMENDATION: FOR
Deloitte & Touche LLP is an independent registered public accounting firm with significant sector specific expertise, reasonable fees and appropriately limited ancillary services. The Audit Committee annually evaluates Deloitte & Touche LLP and determined that its retention continues to be in the best interests of the Company and its shareholders.

Deloitte & Touche LLP (“Deloitte”) has served as our independent registered public accounting firm providing auditing, financial and tax services since at least fiscal 1991. The Audit Committee evaluates Deloitte’s performance each year and determines whether to re-engage Deloitte or consider other audit firms. The Audit Committee has appointed Deloitte as our independent registered public accounting firm for the fiscal year ending January 30, 2021. In making this appointment, the Audit Committee carefully considered, among other things:

its independence, objectivity and professional skepticism,

industry and sector specific experience,

the quality and efficiency of the services provided by Deloitte,

its resources, capabilities, technical expertise, including sharing industry insights, trends and latest practices,

the quality and candor of Deloitte’s communications,

external data relating to audit quality and performance, including recent PCAOB reports on Deloitte and its peer firms,

the appropriateness of fees charged for audit and non-audit services,

knowledge of the Company’s operations, personnel, culture, accounting policies and practices, and internal control over financial reporting,

feedback from the Company’s management and Audit Committee members regarding Deloitte’s service and quality, and

the length of time that Deloitte has served in this role, the benefits of longer tenure and the impact of changing auditors.

Based on this evaluation, the Audit Committee determined that it was in the best interest of the Company and its shareholders to continue the retention of Deloitte as our independent registered public accounting firm for fiscal 2020.

Representatives of Deloitte are expected to attend the Annual Meeting. They will be afforded an opportunity to make a statement if they desire to do so but are not expected to be available to respond to questions.

Although the Audit Committee has the sole authority to appoint the independent registered public accounting firm, the Board is submitting the selection of Deloitte as our independent registered public accounting firm to our shareholders for ratification as a matter of good corporate practice. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our shareholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF DELOITTE AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2020.

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Audit Committee Matters

FEES

The Audit Committee oversees and is ultimately responsible for the negotiation of audit fees associated with the retention of Deloitte. Fees for professional services provided by Deloitte in each of the last two fiscal years in each of the following categories were:

Fiscal Year
      2019       2018
Audit Fees(1) $ 2,651,000 $ 2,285,000
Audit Related Fees(2) 56,000 280,000
Tax Fees(3) 2,248,000 2,309,000
All Other Fees(4) 64,000 3,000
$ 5,019,000 $ 4,877,000
(1) Audit fees consist of audit work performed in connection with the annual financial statements, the audit of our internal control over financial reporting, the statutory audits for our former UK-based entities and the reviews of unaudited quarterly financial statements as well as work generally only the independent registered public accounting firm can reasonably provide, such as consents, comfort letters, and review of documents filed with the SEC.
(2) Audit related services in 2019 related to work provided in connection with strategic projects, the audit of our marketing agreement with David’s Bridal and the Company’s response to a SEC comment letter and, in 2018, related to the audit of our marketing agreement with David’s Bridal and the implementation of the new lease accounting standard.
(3) Tax fees include work performed for a variety of federal, state and international tax consulting projects, tax compliance services and tax reform. For fiscal years 2019 and 2018, approximately $0.5 million and $0.6 million, respectively, of these fees were related to tax compliance services.
(4) Other fees relate to accounting research tool fees and, in 2019, to assistance with a management-driven accounting process optimization project.

PRE-APPROVAL POLICY AND PROCEDURES

The Audit Committee has adopted a pre-approval policy and procedures for all audit and non-audit services. Generally, the Audit Committee requires pre-approval of any services our independent registered public accounting firm provides to us or any of our subsidiaries. In accordance with the policy, the Audit Committee reviewed and pre-approved the fees for services Deloitte rendered in 2019 and 2018, taking into consideration whether non-audit services were compatible with maintaining Deloitte’s independence.

Although the Audit Committee pre-approves Deloitte’s annual audit plan and non-audit services, the pre-approval procedures also include designating the Audit Committee Chair with pre-approval authority for matters not included in either the annual audit plan or non-audit services. Under this designation of authority, the Audit Committee Chair must report any pre-approval to the entire Committee at the next Committee meeting.

There were no services approved by the Audit Committee pursuant to the de minimis exception in paragraph (c)(7)(i) (C) of Rule 2-01 of Regulation S-X during fiscal years 2019 and 2018.

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Audit Committee Matters

AUDIT COMMITTEE REPORT

As described in its charter, the purpose of the Audit Committee is to assist the Board in its oversight of:

the integrity of the Company’s financial statements,

the Company’s compliance with all applicable legal and regulatory requirements,

the Company’s independent registered public accounting firm and their qualifications and independence, and

the performance of the Company’s internal audit function and independent registered public accounting firm.

The Audit Committee is directly responsible for the appointment, evaluation, retention, compensation, oversight, and when appropriate, the termination of the independent registered public accounting firm.

In fulfilling its role, the Audit Committee relies on the work and assurances of the Company’s management including its internal audit function as well as Deloitte:

MANAGEMENT/INTERNAL AUDIT IS RESPONSIBLE FOR:

Preparation of the Company’s consolidated financial statements and the reporting process

System of internal controls, including internal control over financial reporting

Risk management

Procedures designed to ensure compliance with accounting standards and applicable laws and regulations


DELOITTE IS RESPONSIBLE FOR:

Auditing the consolidated financial statements and expressing an opinion on the fair presentation of those financial statements in conformity with accounting principles generally accepted in the United States

Performing reviews of the unaudited quarterly financial statements

Auditing and expressing an opinion on the effectiveness of the Company’s internal control over financial reporting

The Audit Committee meets regularly together with management, internal audit and Deloitte as well as separately and in private sessions with the Chief Financial Officer and each of Deloitte and internal audit without members of management present to discuss the results of their examinations.

The Audit Committee has reviewed and discussed the consolidated financial statements with management and Deloitte, including:

the quality, not just the acceptability, of the accounting principles,

significant financial reporting risks,

reasonableness of significant accounting judgments and critical accounting policies and estimates,

clarity of disclosures in the financial statements, and

the overall quality of the Company’s financial reporting.

The Audit Committee has also reviewed and discussed with management and Deloitte their evaluation of the adequacy and effectiveness of the Company’s financial reporting procedures, disclosure controls and procedures, and internal control over financial reporting, including the respective reports of management and Deloitte on the effectiveness of the Company’s internal control over financial reporting.

The Audit Committee further discussed with Deloitte all matters required to be discussed under the standards of the Public Company Accounting Oversight Board (“PCAOB”), including those matters required to be discussed by Auditing Standards No. 1301, Communications with Audit Committees, and Rule 2-07 of Regulation S-X.

The Audit Committee has received the written communications from Deloitte required under PCAOB rules regarding Deloitte’s communications with the Audit Committee concerning independence, and after discussions with Deloitte, the Audit Committee concluded that Deloitte is independent from the Company and its management.

Based on these reviews, discussions, disclosures and other information considered by the Audit Committee in its judgment, the Audit Committee recommended to the Board, and the Board approved, that the audited consolidated financial statements and management’s assessment of the effectiveness of the Company’s internal control over financial reporting be included in the Company’s Annual Report on Form 10-K for fiscal 2019.

AUDIT COMMITTEE
Sue Gove, Chair
Irene Chang Britt
Andrew Vollero

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EXECUTIVE OFFICERS

The Executive Officers of the Company are appointed by, and serve at the discretion of, the Board of Directors. The following sets forth certain information as of the date of this proxy statement regarding our Executive Officers:

DINESH S. LATHI
President and Chief Executive Officer
Age: 49
Executive officer since: 2018

CARRIE ASK
Chief Customer Officer
Age: 50
Executive officer since: 2018

                   

See the discussion under “Board Matters” for the business experience of Mr. Lathi.

PROFESSIONAL EXPERIENCE

Tailored Brands

Chief Customer Officer (December 2019 to present)
Brand President, Men’s Wearhouse and Moores (October 2018 to December 2019)

Levi Strauss & Company

Executive Vice President and President, Global Retail (February 2016 to September 2018)

Prior to Levi Strauss, Ms. Ask held senior leadership positions at NIKE, Inc., Petco and Target, and served as Associate Principal in the retail practice at McKinsey & Company. She began her career by serving as an officer in the United States Navy.

 

JAMIE BRAGG
Executive Vice President and Chief Supply Chain Officer
Age: 50
Executive officer since: 2018

JACK P. CALANDRA
Executive Vice President, Chief Financial Officer and Treasurer
Age: 52
Executive officer since: 2017

 

PROFESSIONAL EXPERIENCE

Tailored Brands

Executive Vice President and Chief Supply Chain Officer (December 2016 to present)
Executive Vice President, Distribution (March 2011 to December 2016)
Senior Vice President, Tuxedo Distribution (April 2007 to March 2011)
Vice President, Distribution (October 2005 to April 2007)

Mr. Bragg joined the Company in June 1991.

PROFESSIONAL EXPERIENCE

Tailored Brands

Executive Vice President, Chief Financial Officer and Treasurer (January 2017 to present)

Gap, Inc.

Senior Vice President, Corporate Finance and Investor Relations (January 2015 to December 2016)
CFO, Banana Republic (January 2011 to December 2014), Gap Direct (January 2006 to December 2010) and Gap International (January 2005 to December 2005)

Prior to Gap, Inc., Mr. Calandra served 11 years at Unilever’s North America Division where he held progressively senior accounting and financial leadership roles.


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Executive Officers

A. ALEXANDER RHODES
Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary
Age: 61
Executive officer since: 2015

BORIS P. SHERMAN
Executive Vice President, Chief Technology Officer
Age: 46
Executive officer since: 2017

                   

PROFESSIONAL EXPERIENCE

Tailored Brands

Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary (April 2015 to present)
Interim Chief Human Resources Officer (July 2019 to March 2020)

Chico’s FAS, Inc.

Executive Vice President-General Counsel and Corporate Secretary (October 2009 to March 2015)
Senior Vice President-General Counsel & Secretary (April 2006 to October 2009)
Vice President-Corporate Counsel & Secretary (October 2004 to April 2006)
Corporate Counsel (October 2003 to October 2004)
Intellectual Property Attorney (January 2003 to October 2003)

PROFESSIONAL EXPERIENCE

Tailored Brands

Executive Vice President and Chief Technology Officer (September 2017 to present)

L Brands

Senior Vice President, Omni-Channel Technology (June 2014 to August 2017)
Senior Vice President of Technology, Victoria’s Secret (October 2012 to June 2014)
Vice President, Direct Channel Technology (March 2010 to October 2012)

Prior to joining L Brands, Inc., Mr. Sherman was Vice President, Information Technology for OfficeMax and Managing Director and Chief Architect at United Airlines.

 

MICHAEL SHANE SMITH
Executive Vice President, Chief Human Resources Officer
Age: 52
Executive officer since: 2020

 

PROFESSIONAL EXPERIENCE

Tailored Brands

Executive Vice President and Chief Human Resources Officer (March 2020 to present)

Dynamic-Squared Consulting

Founder & Principal (June 2019 to February 2020)

The Coca-Cola Company

Mr. Smith was with The Coca-Cola Company for 21 years in numerous leadership roles, including:

Global Head of Associate Services (June 2017 to May 2019)
Global Head of Human Resources, Corporate Center, Shared Services and Commercial Product Manufacturing & Supply (February 2011 to June 2017)

Prior to The Coca-Cola Company, Mr. Smith worked in the manufacturing, financial services and software industries.


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EXECUTIVE COMPENSATION

PROPOSAL 3:
ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

 
WHAT AM I VOTING ON?
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.
VOTING RECOMMENDATION: FOR
Our Compensation and Organizational Development Committee provides independent oversight of our executive compensation with the assistance of an independent compensation consultant. Our executive compensation program is working effectively and is aligned with short- and long-term business goals and strategy and demonstrate a strong link between pay and performance.

The NEOs for our 2019 fiscal year consisted of:

Dinesh S. Lathi        President and Chief Executive Officer
Jack P. Calandra Executive Vice President, Chief Financial Officer and Treasurer
Carrie Ask Chief Customer Officer
Boris P. Sherman Executive Vice President, Chief Technology Officer
A. Alexander Rhodes Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary
Mary Beth Blake Former Brand President, Jos. A. Bank

EXECUTIVE SUMMARY

RESPONSE TO COVID-19

Beginning in early March 2020, a major global health pandemic related to the outbreak of the novel coronavirus (“COVID-19”) resulted in the temporary closure of our retail locations in the U.S. and Canada starting March 17, 2020. In conjunction with our decision to extend the temporary closure of our stores, we also furloughed all of our U.S. store employees as well as a significant portion of employees in our U.S. distribution network and offices, and we implemented the temporary layoff of all Canadian store employees and a significant portion of Canadian employees in our Canadian distribution network and offices.

Effective March 29, 2020, we reduced Mr. Lathi’s base salary by 50% and the base salary of all other NEOs and other executive vice presidents directly reporting to our Chief Executive Officer by 25%. In addition, we reduced the base salaries of other members of our senior management team by 15%. The Board of Directors also agreed to a 50% reduction in its cash retainer fees. Effective April 5, 2020, we reduced the base salaries of employees with a base salary of $100,000 or more by 10%.

We have also chosen to delay our 2020 long-term incentive grants for two primary reasons. First, we did not believe that it would be appropriate to make equity or other grants to our executives while so many of our employees are furloughed. Second, the COVID-19 related store closures and furloughs make it impossible to establish financial metrics for the performance related portions of our long-term incentive grants.

The following description of our executive compensation program for fiscal 2019 does not reflect the impact of COVID-19, which impact will be described in next year’s proxy statement. In making compensation-related decisions for fiscal 2020 and beyond, the Committee may consider the effect of the global pandemic and other linked economic and environmental pressures that may impact Company results.

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Executive Compensation

FISCAL 2019 PERFORMANCE

During fiscal 2019, we focused our efforts to position the Company for long-term success by executing on our three key strategic initiatives: (1) offering personalized products and services, (2) providing inspiring and seamless experiences in and across every channel and (3) telling the stories of our brands so that our customers know we stand for more than just price. A few key highlights include strengthening our leadership and operating structure, offering a more compelling polished casual assortment, delivering double-digit e-commerce growth, and shifting our marketing spend to digital from broadcast. Although we believe we are making progress on these initiatives, we experienced lower than anticipated full year net sales and gross margins in fiscal 2019, primarily related to a 3% decrease in comparable sales and increased promotional activities.

From a balance sheet and liquidity perspective, we took several actions intended to accelerate debt reduction and provide additional financial flexibility to invest in our customer-facing transformation strategies. These actions included: (1) the sale of our corporate apparel business with the proceeds used to repurchase approximately $55 million of our senior notes, (2) suspension of our quarterly cash dividend, which will make available approximately $36.5 million of cash on an annualized basis and (3) an agreement to sell the Joseph Abboud trademarks for $115 million, which closed on March 4, 2020. Per the provisions of our term loan, we plan to reinvest these proceeds in our business.

On the last trading day of fiscal 2019, the closing stock price of our common stock was $3.98 per share as compared to $12.53 per share on the last trading day of fiscal 2018, a decrease of 68%. We returned $28.1 million to our shareholders through our dividends for a total shareholder return of -64%. In addition, we repurchased 2.4 million shares of our common stock during 2019 at an average price of $4.28.

Key performance highlights for fiscal 2019 include:

FISCAL 2019 PERFORMANCE HIGHLIGHTS

       

$1.08
Adjusted EPS from continuing operations(1), a decrease of $1.07

3.0%
Overall retail comparable sales comprised of (3.5)% at Men’s Wearhouse, (2.3)% at Jos. A. Bank, (5.4)% at Moores and (0.3)% at K&G

$10.0M
Repurchased 2.4 million shares at an average price of $4.28

$99.6M
Cash provided by operating activities, a decrease of $223.1 million, primarily driven by the decrease in our operating income and fluctuations in accounts payable and accrued liabilities

$142.4M
Adjusted operating income from continuing operations(2), a decrease of $80.7 million

3.5%
Decreased overall adjusted net sales(3), primarily due to the decrease in comparable sales

$28.1M
Returned to our shareholders through dividends prior to the suspension of the dividend beginning in fourth quarter 2019

$61.5M
Reduction in long-term debt

 
(1)

Throughout this proxy statement, we will be referring to EPS from continuing operations on an adjusted basis. An explanation of the impact of the sale of our corporate apparel business, a reconciliation of adjusted EPS to GAAP EPS and an explanation of why adjusted EPS may be useful is included on page 91 of this proxy statement.

(2)

A reconciliation of adjusted operating income from continuing operations to GAAP operating income from continuing operations and an explanation of why adjusted operating income may be useful is included on page 91 of this proxy statement.

(3)

A reconciliation of adjusted net sales from continuing operations to GAAP net sales from continuing operations and an explanation of why adjusted net sales may be useful is included on page 91 of this proxy statement.


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Executive Compensation

PAY FOR PERFORMANCE

The Company’s financial performance in fiscal 2019 was below our expectation and did not meet threshold targets. As a result, the NEOs received no payouts on the portion of their annual cash incentives that was based on the Company’s financial performance. The Compensation and Organizational Development Committee (the “Committee”) also determined that while Mr. Lathi, Mr. Calandra, Ms. Ask, Mr. Sherman, and Mr. Rhodes substantially met or exceeded their individual strategic goals in 2019, no NEO would receive any bonus payout for 2019 due to the need to conserve cash because of the emerging COVID-19 crisis and the Company’s stores being closed for an unknown duration. In addition, as a result of the Company’s performance, the adjusted earnings per share performance measure under the performance units granted to certain of our NEOs in 2017 was not met and the awards did not vest.

As a result, we believe that our performance-based compensation is well-aligned with the Company’s performance on the year and that the relationship between pay and performance is strong.

Additional details regarding the total bonus received by our NEOs, including both the financial performance payouts and the portion each received under the personal performance portion of the annual cash bonus is described below under “– Compensation Discussion and Analysis – Elements of 2019 Executive Compensation – Annual Cash Incentive Plan” and additional details on the long-term performance based equity awards can be found under “– Compensation Discussion and Analysis – Elements of 2019 Executive Compensation – Long-Term Incentive Plan.”

2019 EXECUTIVE COMPENSATION PROGRAM

The Committee made several key decisions regarding the 2019 executive compensation program, with input from Pay Governance, the Committee’s independent executive compensation consultants, as well as the CEO and management, as appropriate. These include the following:

Base Salary
Made two adjustments to NEO base salaries for Fiscal 2019.
Annual Cash
Incentive Plan
     
Tied to Company performance based on adjusted EBIT (60%), revenue (30%), and individual strategic objective performance (10%).
Brand President plan is tied to Company performance based on adjusted EBIT (60%), Brand adjusted revenue (30%), and individual strategic objective performance (10%).
Long-Term
Incentive Plan
Consisted of stock options (27%), stock appreciation rights (23%) and performance cash (50%) for the CEO.
Consisted of stock options (50%) and performance cash (50%) for the other NEOs.
Performance cash issued in 2019 is based on achievement of cumulative adjusted EPS performance target with actual awards ranging from 0% to 200% of the target award depending on the Company’s cumulative adjusted EPS for the fiscal 2019-2021 performance period.

2019 SHAREHOLDER ADVISORY VOTE ON EXECUTIVE COMPENSATION

At our 2019 Annual Meeting of Shareholders, our shareholders approved the compensation of our NEOs, with 88.7% of the votes cast in favor of our say-on-pay resolution. While this result was strong, it was lower than we anticipated. In analyzing this result, we noted that there was no corresponding increase in the shareholder vote against any member of the Committee that would indicate some level of overall dissatisfaction with the compensation decisions made by the Committee. In addition, in 2019, we engaged directly with our top five holders, representing 34% of the shares outstanding, and we did not receive any negative feedback on our compensation program from those shareholders. As a result, we believe that the lower say-on-pay vote was more reflective of the challenging retail environment and the resulting impact on the Company’s operational and stock price performance in fiscal 2018 rather than on the structure of our compensation program. The Committee considered the results of the 2019 say-on-pay vote in its evaluation of our 2020 executive compensation program, and, for the reasons discussed in the Compensation Discussion and Analysis section of this proxy statement, decided not to make any material changes to our NEO compensation structure as a result of the say-on-pay vote.

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Executive Compensation

CURRENT SHAREHOLDER ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Company is asking you to approve, on an advisory basis, the compensation of our NEOs as described in this section of the proxy statement.

The Company is committed to sound executive compensation practices and corporate governance principles, and continually works to ensure that its practices protect and further the interests of shareholders. We believe that our executive compensation program is structured (i) to promote a performance-based culture which links the interests of management and shareholders, (ii) to support our business objectives, and (iii) to align our programs with recognized corporate governance and compensation best practices. 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 and long-term performance cash awards for aligning the executives’ focus with shareholder value and the long-term, future performance of the Company. In 2019, the Company worked diligently to implement transformational strategies while facing multiple headwinds and our financial performance was not in line with the performance targets set for our annual incentive plan. As a result, our continuing NEOs did not receive a payout under the incentive plan. In addition, as a result of the Company’s performance, the adjusted earnings per share performance measure under the performance units granted to certain of our NEOs in 2017 was not met and the awards did not vest. As our pay programs align with our financial results, we believe that the relationship between pay and performance is strong.

In addition, as a result of our current stock price, any stock options granted to our NEOs and other members of management are currently underwater and of no value to the recipient, further aligning the interests of our NEOs and our shareholders.

Accordingly, we ask our shareholders to vote to approve the following resolution at the Annual Meeting:

“RESOLVED, that the compensation paid to the Company’s NEOs, as disclosed in this proxy statement, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED”.

While the Board and the Committee will carefully consider the shareholder vote, the final vote is advisory in nature and will not be binding on the Board or the Company. However, our Board values the opinions of our shareholders and, to the extent that there is any significant vote against our NEO compensation as disclosed in this proxy statement, the Committee will evaluate whether any actions are necessary to address the concerns of shareholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.

COMPENSATION AND ORGANIZATIONAL DEVELOPMENT COMMITTEE REPORT

The 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 Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

COMPENSATION AND ORGANIZATIONAL DEVELOPMENT COMMITTEE
Theo Killion, Chair
Grace Nichols

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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 NEOs relative to how their 2019 compensation aligns with our pay for performance philosophy. This discussion does not reflect the impact of COVID-19 on any compensation decisions that will be made in fiscal 2020, which may include the timing of when we set the applicable performance goals for our annual cash bonus program, the timing of when we make long-term incentive awards, and the financial metrics we choose to use in both the annual and long-term incentive plans, among other things. In making compensation-related decisions for fiscal 2020 and beyond, the Committee may consider the effect of the global pandemic and other linked economic and environmental pressures that may impact Company results. Any COVID-19 related impacts to our compensation programs will be described in our 2021 Proxy Statement.

LEADERSHIP TEAM CHANGES

The Company experienced a number of key management changes in 2019.

On August 28, 2018, the Board appointed Dinesh S. Lathi, the Company’s Non-Executive Chairman, to serve as the Company’s Executive Chairman while the Board conducted a comprehensive search to identify and hire a successor CEO following Doug Ewert’s departure. On March 27, 2019, the Board appointed Mr. Lathi as the President and CEO of the Company. Mr. Lathi and the Company agreed to the terms of his employment in an offer letter dated April 19, 2019 (the “Offer Letter”), the terms of which are summarized below under “– Compensation Arrangements with Mr. Lathi”.

On December 5, 2019, the Company created a new Chief Customer Officer role providing common leadership for our Men’s Wearhouse, Jos. A. Bank and Moores brands and eliminated the brand president positions for these brands. Carrie Ask was promoted to Chief Customer Officer and Mary Beth Blake resigned from the Company effective December 31, 2019. We entered into a separation agreement with Ms. Blake, which is described on page 67 under “Potential Payments Upon Termination or Change in Control – Actual Payments to Ms. Blake. Changes to Ms. Ask’s compensation as a result of her promotion are discussed throughout this Compensation Discussion and Analysis.

COMPENSATION ARRANGEMENTS WITH MR . LATHI

On March 27, 2019, the Board appointed Mr. Lathi as the President and CEO of the Company. In connection with Mr. Lathi’s appointment as President and CEO, the Company and Mr. Lathi agreed on the following initial compensation elements:

an annual base salary of $1,000,000;
an annual bonus opportunity under the Company’s Annual Cash Incentive Plan with threshold, target and maximum payout levels equal to 50%, 100% and 150%, respectively, of his annual base salary; and
a long-term incentive award to be granted with a grant date fair value equal to $5,500,000.

Mr. Lathi is also entitled to participate in the Company’s insurance plans and benefits made available to other full-time employees of the Company and the Senior Executive Change in Control Severance Plan described below under the “– Potential Payments Upon Termination or Change in Control – Senior Executive Change in Control Severance Plan” section on page 64.

If Mr. Lathi is terminated without cause or he resigns for good reason (each as defined in the Senior Executive Change in Control Severance Plan), Mr. Lathi will be entitled to receive 52 weeks of his then-current base salary, 100% of his then current target annual bonus, any actual bonus earned for the year in which the termination occurs prorated to reflect the portion of the performance period he is actually employed by the Company and $25,000 to apply to his COBRA expenses for one year. In addition, with respect to any then outstanding vested stock options and vested stock appreciation rights at the time of Mr. Lathi’s termination of employment, he will have the opportunity to exercise such awards no later than the earlier of (i) two years following the date of his termination of employment; and (ii) the date on which such awards expire. The severance payments and extended exercise rights of stock options and stock appreciation rights are subject to the timely execution of a Separation Agreement and full release of claims. If Mr. Lathi resigns from the Company without Good Reason or is terminated for Cause, he will not be eligible for any severance pay.

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Executive Compensation

COMPENSATION PHILOSOPHY

Our executive compensation program is constructed to successfully attract, motivate and retain highly-skilled executives in support of our goal to create long-term shareholder value. The incentive pay elements are designed to reward executives for delivery of sustained, profitable financial performance and outstanding leadership that reflects our values and culture. We target compensation opportunities that generally align with the market and our compensation Peer Group (as described below).

The Committee believes that the structure of our compensation program should be fundamentally the same across our entire senior executive management team. Each NEO’s compensation level varies based on job responsibilities, individual performance and the compensation opportunities for similarly-positioned executives within our Peer Group. NEOs generally receive the same components of compensation (i.e., base salary, annual cash bonus and long-term equity and long-term performance cash awards) as the rest of our senior executive management team. In addition, similar performance goals apply to the annual cash bonuses that all senior executives are eligible to receive. For example, in 2019, each senior executive management team member’s annual cash bonus had, as a significant financial component, adjusted EBIT and revenue. For 2019, brand presidents were also measured on Brand revenue as part of their financial component. The Committee believes this consistency fosters teamwork 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, thus reducing the likelihood of excessive risk-taking.

COMPENSATION OBJECTIVES

The Company’s compensation program is designed to provide competitive compensation opportunities and benefits so that we can attract and retain key senior executive talent. 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 results linked to annual Company performance, and equity and long-term performance cash awards for alignment of executive interests with those of shareholders and to tie rewards to the long-term, future performance of the Company.

We set the applicable performance goals for our annual cash bonus program near the beginning of the fiscal year using challenging but attainable 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. Similarly, we set the applicable performance goals for our long-term performance-based equity and long-term performance cash awards near the beginning of the performance cycle. These performance goals are set to incentivize and reward successful achievement against our multi-year strategy.

For fiscal 2019, the target weighting of each of the elements of compensation for the CEO and other NEOs was as follows:

CEO       OTHER NEOs

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REPORTED PAY VS. REALIZED PAY

“Reported Pay” is different than and will often diverge from “Realized Pay”. Recognizing this distinction is critical when evaluating the relationship between pay and performance. This divergence arises because the grant date fair value of the performance units (“PUs”), DSUs, stock options and stock appreciation rights, as set forth in our Summary Compensation Table on page 58, is provided for accounting and SEC disclosure purposes and does not reflect the amount any NEO actually did, or will actually, realize for the indicated years. The divergence between reported pay and realized pay reinforces the fact that a significant portion of our NEOs’ compensation is at risk and dependent on the performance of the Company. The following chart highlights the reported pay/realized pay divergence.

CEO

      Reported Pay
($)(1)
      Realized Pay
($)(2)
      Realized Pay vs.
Reported Pay
($)
      Realized Pay as a
Percentage of
Reported Pay
(%)
Dinesh Lathi 3,755,038 1,189,967 ↓2,565,071 31.7
(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. Lathi during the indicated fiscal year, consisting of salary, cash bonuses received (including any bonus paid pursuant to our annual cash incentive plan), net spread on stock option exercises, market value at vesting of previously granted DSUs and amounts reported in the “All Other Compensation” column in the Summary Compensation Table for the indicated fiscal year. Includes $8,364 related to DSUs that vested in 2019 in connection with Mr. Lathi’s service on the Board of Directors in 2018.

OTHER NEOs

For fiscal 2019, we have excluded Ms. Blake from this table. Due to the nature of Ms. Blake’s separation this display would not be reflective of the relationship between pay and performance in fiscal 2019. In addition, Ms. Blake forfeited all unvested equity when she resigned from the Company and similarly this display would not be reflective of pay and performance.

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 1,105,038 797,963 ↓307,075 72.2
Carrie Ask 938,750 605,372 ↓333,378 64.5
Boris P. Sherman 780,038 557,224 ↓222,814 71.4
A. Alexander Rhodes 730,038 638,315 ↓91,723 87.4
(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 the indicated NEO during the indicated fiscal year, consisting of salary, cash bonuses received (including any bonus paid pursuant to our annual cash incentive plan), net spread on stock option exercises, market value at vesting of previously granted DSUs and PUs 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 PUs which will not actually be received, if earned, until a future date.

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ELEMENTS OF 2019 EXECUTIVE COMPENSATION

The principle elements of our executive compensation program were:

base salary;
annual cash incentive plan (annual cash bonus); and
long-term incentive plan (equity and long-term performance cash awards).

       Compensation
Element
      Purpose       Link to Performance
Base Salary Provides an appropriate level of fixed compensation to attract and retain leaders Based on individual performance
 
 
Annual Cash
Incentive Plan
Encourages executives to achieve annual results that create shareholder value Linked to annual achievement of predetermined Company and Brand objectives as well as individual strategic objective performance
 
 
Long-Term
Incentive Plan
(including nonqualified stock options, stock appreciation rights, restricted stock awards, DSUs, PUs, performance cash 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 multi-year 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
Ultimate value of the award is linked to stock price performance over a period of time or, in the case of PUs and performance cash, the Company’s financial performance and stock price performance over a period of time

BASE SALARY

Base salary is the fixed component of the NEOs’ compensation. We intend base salary to provide a core level 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 Committee annually reviews and determines each NEO’s base salary based on the following factors:

the executive’s scope of responsibility, level of experience and tenure;
individual and corporate performance;
competitive market conditions and retention concerns; and
the CEO’s base salary recommendations.

Executive       Fiscal 2018
Base Salary
      Fiscal 2019
Base Salary
      % Change
Dinesh S. Lathi    $ 1,000,000    $ 1,000,000 0
Jack P. Calandra $ 600,000 $ 600,000 0
Carrie Ask(1) $ 575,000 $ 700,000 21.7
Boris P. Sherman $ 500,000 $ 500,000 0
A. Alexander Rhodes $ 450,000 $ 450,000 0
Mary Beth Blake(1) $ 600,000 $ 550,000 ↓8.3
(1) Ms. Ask was promoted to Chief Customer Officer on December 5, 2019 and the Committee determined that a base salary adjustment was appropriate due to her increased job responsibilities and higher market pay for this position. Ms. Blake received a reduction in her base salary for fiscal 2019 to reflect the reduced scope and responsibility for her position.

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ANNUAL CASH INCENTIVE PLAN

To more strongly align executive pay with the Company’s financial performance and executive individual performance, our NEOs are eligible to receive annual cash incentives pursuant to our 2016 Cash Incentive Plan (the “Bonus Plan”). These awards are designed to make a significant portion of each NEO’s annual cash compensation dependent on the financial performance of the Company.

The incentive has two components: a Company financial performance component (weighted 90%) and an individual strategic objectives performance component (weighted 10%). This allocation emphasizes achievement against our financial performance goals while taking into account individual strategic imperatives. For this reason, the Committee believes that this allocation fosters a results-driven, pay-for-performance culture, builds accountability and closely aligns the interests of our NEOs and our shareholders. During the first quarter of fiscal 2019, the Committee established the fiscal 2019 incentive plan that included (1) the award formula and the Company and individual strategic objective performance goals that will determine each NEO’s eligible bonus (if any) and (2) the threshold, target and maximum incentives that each NEO would be eligible to earn. The Committee selected the threshold, target and maximum levels after considering the annual opportunities for similarly-positioned executives in the comparable retail industry market, our past practices, the NEO’s scope of responsibility and the recommendations of our CEO. For fiscal 2019, the individual target bonuses were set based on a percentage of each NEOs base salary as follows: Mr. Lathi 100%; Mr. Calandra, 75%; Ms. Ask, 75%; Mr. Sherman, 60%; Mr. Rhodes, 65%; and Ms. Blake, 77%.

FINANCIAL PERFORMANCE INCENTIVE – 90% OF AWARD FORMULA

The annual cash incentive amount attributable to the financial performance component is determined based on performance against Company adjusted EBIT goals (60%) and revenue goals (30%) for corporate-level NEOs. For Brand Presidents, the financial performance component is determined based on performance against Company adjusted EBIT Goals (60%) and Brand revenue goals (30%). The Committee selected EBIT and Revenue metrics to reflect the importance of both bottom line and top line financial achievement. Additionally, the Committee determined that there could be no revenue payout without threshold EBIT achievement to ensure profitable top-line growth.

The Company’s performance goals under our Bonus Plan were set at levels which the Committee believed to reflect challenging short- to mid-term goals which were uncertain though attainable and provided appropriate incentives to motivate the NEOs to exceed the goals of the Company’s financial plan.

The adjusted Company-level EBIT and revenue goals were as follows:

Company Adjusted EBIT ($M)       Payout
(% of Target)
$225.4 200%
$201.7 100%
$191.7 25%
Below $191.7 0%

Company Revenue ($M)       Payout
(% of Target)
$3,084.0 200%
$2,994.0 100%
$2,904.0 25%
Below $2,904.0 0%

Adjusted EBIT and revenue performance includes operating results from our retail businesses: Men’s Wearhouse, Jos. A. Bank, K&G and Moores. For purposes of our Bonus Plan, 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 Committee deems appropriate. For fiscal 2019, adjusted items include costs related to multi-year cost savings and operational excellence programs and costs related to the agreement to sell the Joseph Abboud trademarks. The Company did not meet its adjusted EBIT threshold goal and, as a result, no amounts were paid related to the financial performance portion of the annual cash incentive awards.

We do not disclose financial performance objectives for our individual brands due to the competitively sensitive nature of such goals.

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INDIVIDUAL STRATEGIC INCENTIVE – 10% OF AWARD FORMULA

The Committee and CEO established the performance goals for the individual strategic component of the Bonus Plan for Mr. Calandra, Ms. Ask, Mr. Sherman, Mr. Rhodes and Ms. Blake. The Committee and the Board established the strategic goals for Mr. Lathi. The individual strategic goals relate to strategic and business objectives relevant to each NEO’s area of responsibility and, as a result, the strategic performance goals are unique for each NEO. Following the end of the fiscal year, the Committee and Mr. Lathi determined whether the NEO’s overall performance did not meet, partially met, met, or exceeded applicable performance levels in order to merit an award under the individual strategic component.

Based on its review, the Committee determined that while Mr. Lathi, Mr. Calandra, Ms. Ask, Mr. Sherman, and Mr. Rhodes substantially met or exceeded their individual strategic goals in 2019, no NEO would receive any bonus payout for 2019 due to the need to conserve cash because of the emerging COVID-19 crisis and the Company’s stores being closed for an unknown duration. Ms. Blake was paid 100% of the individual strategic incentive payout in accordance with the terms of her separation agreement.

NEO ANNUAL CASH INCENTIVE PAYOUTS

The following table sets forth details regarding the financial performance bonus, individual performance bonus, and the total bonus payout for each of the NEOs for fiscal 2019:

Executive       Target
Annual Cash
Incentive
      Financial
Performance
Incentive (90%)
      Individual
Strategic
Incentive (10%)
      Total
Incentive
     As a
% of
Target
Dinesh S. Lathi    $ 1,000,000 0
Jack P. Calandra $ 450,000 0
Carrie Ask(1) $ 445,891 0
Boris P. Sherman $ 300,000 0
A. Alexander Rhodes $ 292,500 0
Mary Beth Blake(2) $ 425,000             $ 42,000    $ 42,000 9.9
(1) Ms. Ask’s annual cash incentive was increased to $525,000 from $431,250 on December 5, 2019 due to her promotion to Chief Customer Officer, therefore a prorated amount is reflected for fiscal 2019.
(2) Ms. Blake was paid 100% of the individual strategic incentive payout in accordance with the terms of her separation agreement.

CORPORATE APPAREL BUSINESS SALE BONUS

On January 13, 2020, the Committee approved incentive cash awards of $50,000 each to Mr. Calandra and Mr. Rhodes for their leadership of the Company’s divestiture of its corporate apparel business on August 16, 2019. This achievement was critical to meeting the capital objectives of the Company and resulted in a meaningful increase in cash on hand which was strategically employed to reduce outstanding debt. The sale of the Corporate Apparel business was not contemplated at the time that Mr. Calandra’s and Mr. Rhodes’ specific Individual Strategic Incentives were established. In their discussions, the Committee determined that had the sale of the Corporate Apparel Business been part of each of their Strategic Incentives the goal would have been achieved and thus an award would have been granted under that portion of the award.

LONG-TERM INCENTIVE PLAN

The long-term incentive (“LTI”) component of our executive compensation program is designed to provide compensation that motivates and rewards long-term performance, aligns the interests of our NEOs with our shareholders, builds a culture of ownership, promotes retention, and balances long-term operating decisions with short-term goals. To accomplish these objectives, the Committee grants our NEOs equity awards on an annual basis generally in the form of (1) stock options, (2) stock appreciation rights, (3) time-based deferred stock units, or DSUs, (4) performance-based deferred stock units, or PUs, and (5) performance cash. The mix of grant types varies by level in the organization with a larger percentage of LTI compensation opportunity tied to performance-based grants at the most senior levels.

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STOCK OPTIONS

Nonqualified stock options provide our NEOs with the opportunity to purchase our common stock at a price fixed on the grant date regardless of future market prices. Stock options become valuable only if (i) the holder of the option remains employed during the period required for the option to “vest” and (ii) the market price is above the exercise price. For this reason, stock options align the interests of our NEOs and our shareholders by providing executives with an incentive to achieve long-term business goals and objectives and increase the market price of our stock and provide an incentive for an option holder to remain employed by us. Stock options vest ratably over a three-year period and must be exercised within ten years of the date of grant.

STOCK APPRECIATION RIGHTS

A stock appreciation right entitles the holder to the right to receive the difference between the value of our common stock on the date of exercise and the common stock price on the date of grant and are settled in shares of our common stock. Similar to stock options, stock appreciation rights only become valuable if (i) the holder remains employed during the period required for the stock appreciation right to “vest” and (ii) the market price is above the exercise price. Therefore, stock appreciation rights align the interests of our NEOs and our shareholders by providing executives with an incentive to achieve long-term business goals and objectives and increase the market price of our stock and provide an incentive for the holder to remain employed by us. Stock appreciation rights vest ratably over a three-year period and must be exercised within ten years of the date of grant.

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 Committee believes that granting time-based DSUs to our NEOs aligns the interests of the NEOs 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 forfeited upon termination of employment with us if the restrictions set forth in the award agreements are not satisfied. Time-based DSUs granted to NEOs may not vest more quickly than on a pro-rata basis over three years except in special circumstances as determined by the Committee (such as a person nearing retirement age).

PERFORMANCE UNITS

A 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 PUs reflect our compensation philosophy by establishing a clear connection between the compensation of our executives, including our NEOs, and the achievement of performance goals that are important for long-term shareholder value creation. PUs provide an incentive to the recipient to work toward the financial success of the Company over the vesting period in order for the PUs 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, NEOs do not realize value from PUs until they vest (if at all), which means if the stock price is lower upon vesting than at the time of grant, the NEO will realize a lower value per share than the value on the date of grant. 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 grant, the NEOs will realize less upon vesting of such PUs than was reported in the Summary Compensation Table for the year of grant.

PERFORMANCE CASH

In fiscal 2019, the Committee granted long-term performance-based cash awards (“performance cash”) to our senior executives. This program focuses executives on overall, long-term financial performance and is intended to reward them for delivering adjusted cumulative EPS growth over a three-year performance period. For fiscal 2019, the Committee decided that cumulative EPS growth was the appropriate metric to support the Company’s objective of delivering profitable, sustainable growth while cutting costs and streamlining efficiencies. As with PUs, NEOs do not realize value from performance cash until it vests and only if the threshold performance criteria is met.

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Fiscal 2019 equity awards for our NEOs are targeted to the following mix:

CEO       OTHER NEOs

The Committee believes that providing a “portfolio” of LTI awards balances the objectives of the long-term incentive program by rewarding the creation of shareholder value with stock options and retaining executive talent and motivating the achievement of financial goals with performance cash. Additionally, performance cash has the advantage of reducing potential share dilution from our equity plan which is a priority for the Committee.

The Committee further believes that achieving meaningful annual growth over a long-term period, generally three years, is an important objective for the Company. As such, the cumulative adjusted EPS target for the performance cash awards is predicated on a compound annual growth rate over the three-year period.

In fiscal 2019, the Committee introduced a mix of 27% stock options, 23% stock appreciation rights and 50% performance based cash for the CEO. The Committee utilized stock options and stock appreciation rights to tie a large portion of NEO pay to equity that would only be valuable if the market price of our stock increases above the grant day stock price. Performance cash awards have a cumulative adjusted EPS target for the fiscal 2019-2021 performance period ensuring NEOs are focusing on long-term business objectives. The combination of these awards ensure that NEO pay is aligned with the best interest for shareholders.

For additional discussion regarding the details of the grants made to the NEOs, see “–Grants of Plan Based Awards Table” on page 59.

The NEOs received the following long-term incentive awards during fiscal 2019:

Executive       Performance
Cash($)
(1)
      Stock
Appreciation
Rights
      Stock
Options
      Aggregate
Number of
Shares
Covered
      Aggregate
Grant-Date
Value of
Awards(2)
Dinesh S. Lathi 2,750,000 414,476 500,000 914,476 $ 5,499,998
Jack P. Calandra 450,000 149,641 149,641 $ 899,998
Carrie Ask 344,520 116,263 116,263 $ 689,039
Boris P. Sherman 275,000 91,447 91,447 $ 549,998
A. Alexander Rhodes 225,000 74,820 74,820 $ 449,998
Mary Beth Blake 275,000 91,447 91,447 $ 549,998
(1)

Reflects target value of award. For information regarding threshold and maximum and performance conditions associated with such grants, please see “– Grants of Plan-Based Awards Table”.

(2)

Aggregate grant date fair value is based on the closing stock price on the date of grant for the stock appreciation rights and the stock options. Grants were made in 2019 on April 22 at a stock price of $7.62. Ms. Ask received 108,074 stock options on April 22 at a stock price of $7.62 and an additional 8,189 stock options at the time of her promotion on December 16 at a stock price of $4.12.


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ACHIEVEMENT OF PERFORMANCE TARGETS

STATUS OF OUTSTANDING PERFORMANCE UNIT AWARDS

Grant Date       Performance Period       Performance
Measure/ Multiplier
      Vesting Dates       Current Status

May 17, 2017;
September 11, 2017

February 3, 2019 – February 1, 2020

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

May 17, 2020 (100%) September 11, 2020 (100%)

Did not vest given the Company’s performance

April 13, 2018(1)

February 2, 2020 – January 30, 2021

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

April 13, 2021 (100%)

Not expected to meet the threshold for payout
(1)

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

STATUS OF OUTSTANDING PERFORMANCE CASH AWARDS

Grant Date       Performance Period       Performance
Measure/ Multiplier
      Vesting Dates       Current Status

April 22, 2019;
December 16, 2019(1)

February 3, 2019 – January 29, 2022

Cumulative Adjusted EPS
Multiplier ranging from 25% to 200% based on level of cumulative adjusted EPS attained

April 22, 2022 (100%); December 16, 2022 (100%)

Uncertain – too early to project outcomes
(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 a defined contribution plan pursuant to the provisions of Section 401(k) of the Internal Revenue Code. The plan covers our full-time employees who meet age and service requirements. The plan provides for pre-tax, elective employee contributions with a matching contribution from us. For calendar 2019 and 2020, the Company will match 30% of the first 6% of compensation deferred under the plan. This match will be made in the spring of the following year. Our NEOs participate in our defined contribution plan on the same terms as our other employees.

PERQUISITES

In fiscal 2019, we did not provide our NEOs with any material perquisites.

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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.

SENIOR EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN

The Company maintains a Senior Executive Change in Control Severance Plan in which each of our NEOs participate. The Senior Executive Change in Control Severance Plan provides that if a Change in Control occurs and we fail to extend the executive’s employment 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 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 beginning on page 64.

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

COMPENSATION DECISION MAKING PROCESS

ROLE OF EXECUTIVE OFFICERS

Consistent with past practice, our CEO, with the assistance of the Chief Human Resources Officer (“CHRO”), makes initial recommendations to the Committee regarding our executive compensation program and the compensation of our NEOs, other than the CEO. The CEO and CHRO attend and participate in Committee meetings. The Committee believes this input is valuable because of the close working relationship the CEO and CHRO have with the other NEOs and their comprehensive knowledge of our business, operations and financial and strategic goals. The CEO does not make recommendations regarding his own compensation, nor is he present when his compensation is being deliberated or determined. The Committee has sole authority to determine all elements of executive compensation and makes all final determinations regarding the NEOs’ compensation.

ROLE OF COMPENSATION CONSULTANT AND CONSULTANT INDEPENDENCE

The Committee engaged Pay Governance to serve as its independent compensation consultant for 2019.

Pay Governance’s engagement focused on:

1 reviewing and evaluating our executive compensation program as a whole, each principle element and the mix of compensation;     2

analyzing and providing the Committee with competitive pay data with respect to other retail apparel companies;

 

   

3

advising the Committee on executive compensation trends and developments; and     4 assessing the risks of our compensation policies and practices that may have a material impact on the Company and advising on ways to mitigate any undue risks.

Pay Governance attends Committee meetings relating to our executive compensation program. Pay Governance also reviews management’s recommendations regarding our compensation program.

Pay Governance reports directly to the Committee and does not provide any material services to the Company beyond the services described above. The Committee received a written statement from Pay Governance detailing its independence criteria and, based on such statement and other factors, the 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.

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DETERMINATION OF COMPENSATION FOR FISCAL 2019

In 2019, the Committee: (1) reviewed and approved all of the compensation elements for all executives serving on the management executive committee, including all NEOs; (2) reviewed and approved the executive compensation program; and (3) reviewed and approved the annual equity awards granted to all other eligible employees.

When setting NEO compensation, the 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 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 Committee determines the number of shares of common stock granted to our NEOs through equity awards or the target levels of other LTI awards on a discretionary basis, rather than formulaically, by considering the executive’s position, responsibilities, accomplishments, achievements and tenure with the Company. The Committee may modify the mix of base salary, annual awards and long-term awards as it deems appropriate based on a NEO’s specific circumstances.

In connection with establishing the NEOs’ compensation for fiscal 2019, the Committee reviewed: (1) the benchmark data for each of the NEOs; and (2) the recommendations of our CEO and CHRO with respect to the compensation of our other NEOs.

After completing this review, the Committee approved the base salaries, the bonus plan payouts and equity and other LTI awards for each of the then NEOs.

BENCHMARKING COMPENSATION

Pay Governance annually provides the Committee with data with respect to other retail apparel companies that are similar in size to us based on revenues, market capitalization, enterprise value and price to sales multiple in order to benchmark compensation in the competitive market. In fiscal 2019, 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.
Designer Brands, Inc. Urban Outfitters, Inc.(1)
(1)

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.

The Committee considered this data, data from published survey sources and other relevant information when determining the appropriate compensation for the NEOs. While the Committee did not target compensation to any specific percentile of the relevant market data, it did review the 25th, 50th and 75th percentiles. Target total direct compensation for the NEOs may vary in comparison to the market due to differences in experience, time-in-role and comparability to the benchmark.

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COMPENSATION PRACTICES AND POLICIES

The following table provides a summary of our compensation practices that encourage and support good governance and mitigate excessive risk-taking, and the problematic compensation practices that we avoid:

    WHAT WE DO    
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 NEOs is comprised, over the long term, of variable compensation through our annual cash bonuses and equity and other LTI awards. Actual total direct compensation varies based on the extent of achievement of, among other things, operational and financial performance goals and individual strategic performance criteria.
Establish Rigorous Incentive Targets Our annual cash bonus includes threshold, target and maximum awards and requires achievement of a minimum threshold for any bonus to be earned. Our PUs and performance cash awards have a threshold and maximum which also require achievement of a minimum threshold for any of the awards to be earned.
Use Multiple Performance Metrics We balance top line and bottom line achievement by using multiple performance metrics. Our annual cash incentive plan uses both EBIT and revenue metrics and our PUs and performance cash awards use an EPS metric to determine performance levels.
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 CEO, 2.5 times current base salary for the Chief Financial Officer and generally 1.5 times current base salary for other senior executives who serve on the Company’s executive committee.
Discourage Undue Risk-Taking Our compensation plans include provisions designed to discourage excessive risk-taking, including caps on the maximum level of payouts, clawback provisions, varied performance measurement periods, and multiple performance metrics. In addition, the independent consultant performs an annual risk assessment on behalf of the Committee to identify potential risks created by our incentive plans. For 2019, the consultant concluded and the Committee confirmed that the risks inherent in our compensation programs are not likely to have a material adverse impact on the Company.
Clawback Requirement Clawback provisions for cash and equity incentive compensation are included in our long-term incentive plans and change in control severance plans.
Prohibit Hedging, Pledging, Short Sales, or Derivative Transactions Company policies prohibit our directors and executives from hedging, pledging, short-selling or trading in derivatives involving our common stock.
Independent Compensation Consultant The Committee retained Pay Governance as its independent executive compensation consultants. During fiscal 2019, Pay Governance did not provide any material services to the Company other than services related to executive and director compensation.
Double Trigger No single trigger cash or equity severance upon a change in control.
 
WHAT WE DON’T DO
No Tax Gross-Ups We do not provide for tax gross-ups in any circumstances.
No Employment Agreements We do not have employment agreements with any of our executive officers.
No Special Change in Control Severance Provisions for Executive Officers Our executive officers have the same change in control severance provisions as the rest of our senior leadership group.
No Current Payment of Dividend Equivalents on Unvested Long-Term Incentives For all equity awards granted after April 3, 2013, dividend equivalents on unvested DSUs or PUs are only paid if the underlying award is ultimately earned.
No Repricing of Underwater Stock Options Our long-term incentive plans do not permit us to reprice or exchange underwater options without shareholder approval.
No Material Executive Perquisites We do not provide our NEOs with material perks such as personal use of a corporate aircraft, use of a company car, country club memberships, or financial planning allowances as are provided by some of our peers.

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CLAWBACK PROVISIONS

2016 LONG-TERM INCENTIVE PLAN

If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under applicable securities laws, a current or former executive officer must forfeit and repay to the Company any compensation awarded under the 2016 LTIP to the extent specified in any of the Company’s recoupment policies.

The 2016 LTIP also contains clawback provisions which provide that in the event that it is determined by the Committee or a court of competent jurisdiction 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 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.

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” beginning on page 64.

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 and stock appreciation rights 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 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 with a service condition only that are subject to pro-rata vesting, 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 (“Section 162(m)”) generally disallows a tax deduction to public companies for compensation in excess of $1,000,000 paid to certain “covered employees” in any single year. Prior to 2018, the Committee generally sought to structure our performance-based compensation elements in a manner intended, but not guaranteed, to qualify as “performance-based” for purposes of satisfying the conditions of an exemption to this limit on deductibility. For taxable years beginning after December 31, 2017, the Tax Cut and Jobs Act repealed this exemption from Section 162(m)’s deduction limit for all but certain grandfathered compensation arrangements that were in effect as of November 2, 2017. Because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and related regulations including the scope of relief for grandfathered arrangements, no assurance can be given that compensation awarded or paid in prior years and intended by the Committee to satisfy the requirements for deductibility under Section 162(m) will in fact be fully tax deductible. Notwithstanding the repeal of the “performance-based” compensation deduction pursuant to Section 162(m), the Company intends to continue subjecting a significant portion of the incentive compensation payable to our NEOs to the achievement of one or more performance metrics specified by the Committee.

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SUMMARY COMPENSATION TABLE

The following table sets forth certain information regarding compensation paid during the last three fiscal years to each individual who served as our Chief Executive Officer during the year, our Chief Financial Officer, the next three most highly compensated executive officers and our former Brand President, Jos. A. Bank (collectively, the “Named Executive Officers” or “NEOs”):

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
($)(5)
    Total
($)
Dinesh S. Lathi
President and Chief
Executive Officer
2019   1,000,000 2,749,998 5,040 3,755,038
2018 346,154 342,466 (6)   1,149,975 (7) 162,775 2,001,370
Jack P. Calandra
Executive Vice President,
Chief Financial Officer
and Treasurer
2019 600,000 50,000 (8) 449,998 5,040 1,105,038
2018 580,769 1,379,968 269,995 309,204 4,125 2,544,061
2017 500,000 170,000 (9) 559,991 239,922 468,312 4,050 1,942,275
Carrie Ask
Chief Customer Officer
2019 594,231 344,519 938,750
Boris P. Sherman
Executive Vice President,
Chief Technology Officer
2019 500,000 274,998 5,040 780,038
2018 500,000 489,985 119,991 212,136 3,462 1,325,574
A. Alexander Rhodes
Executive Vice President,
General Counsel, Chief
Compliance Officer and
Corporate Secretary
2019 450,000 50,000 (8) 224,998 5,040 730,038
2018 450,000 279,990 119,991 206,833 4,125 1,060,939
2017 450,000 279,990 119,959 336,034 6,246 1,192,229
Mary Beth Blake
Former Brand President,
Jos. A. Bank
2019 521,154 274,998 (10) 42,000 605,040 1,443,192
2018 600,000 699,960 299,998 195,102 4,125 1,799,185
(1)

Ms. Ask became a Named Executive Officer in fiscal 2019. Mr. Lathi, Mr. Sherman and Ms. Blake became Named Executive Officers in fiscal 2018. Mr. Lathi was appointed Executive Chairman effective October 1, 2018 and President and CEO of the Company effective March 27, 2019.

(2)

Mr. Lathi’s 2018 salary represents amount paid to him from the date he commenced his role as Executive Chairman of the Company effective October 1, 2018. Ms. Blake’s 2019 salary represents amount paid to her from the beginning of the fiscal year to the date her employment with the Company ended on December 31, 2019.

(3)

Represents aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718. The value of PUs 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. For PUs granted in May 2017, the aggregate grant date fair value assuming achievement of the maximum performance level would be: Mr. Calandra $640,000 and Mr. Rhodes $319,988. For performance units granted in April 2018, the aggregate grant date fair value assuming achievement of the maximum performance level would be: Mr. Calandra $719,974; Mr. Sherman $319,988; Mr. Rhodes $319,988 and Ms. Blake $799,971. 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 NEOs. For additional information, including a discussion of the assumptions used to calculate these values, see Note 15 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2020. For additional information regarding these equity awards, see “– Compensation Discussion and Analysis – Elements of 2019 Compensation – Long Term Incentive Plan – Performance Units”, “-Grants of Plan-Based Awards Table” and “-Outstanding Equity Awards at Fiscal Year End Table”.

(4)

Represents bonuses paid pursuant to our annual cash incentive plan. For additional information, see “–Compensation Discussion and Analysis – Elements of 2019 Compensation – Annual Cash Incentive Plan”.

(5)

Amounts shown in this column for 2019 include the following:

            Dinesh
Lathi
      Jack
Calandra
      Carrie
Ask
      Boris
Sherman
      A. Alexander
Rhodes
      Mary Beth
Blake
Matching contributions under our 401(k) Plan ($) 5,040 5,040 5,040 5,040 5,040
Payments to Ms. Blake in connection with her 600,000
Separation Agreement ($)*
Total ($) 5,040 5,040 5,040 5,040 605,040
* Reflects salary continuation payments to be paid in accordance with the Company’s normal payment cycle for the period December 31, 2019 through December 31, 2020.

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Amounts shown in this column for Mr. Lathi in 2018 reflect cash fees paid to him while serving as a non-employee director.
(6) Represents a one-time bonus paid to Mr. Lathi’s in connection with his performance as Executive Chairman, as determined by the Board.
(7) Includes the grant date fair market value of $149,983 related to Mr. Lathi’s annual Board of Directors DSU award granted prior to his appointment as Executive Chairman which was later pro-rated based on time in service exclusively to the Board, resulting in the forfeiture of 3,941 DSUs. Also includes the grant date fair market value of $999,992 related to Mr. Lathi’s DSU award granted in connection with his appointment as Executive Chairman, which was later prorated in connection with his appointment as President and CEO based on the portion of the performance period that lapsed between the October 1, 2018 grant date and the grant date of Mr. Lathi’s 2019 equity award, resulting in the forfeiture of 18,288 DSUs.
(8) Represents a one-time bonus payment to the executive for their leadership of the Company’s divestiture of its corporate apparel business on August 16, 2019.
(9) Represents a signing bonus paid to Mr. Calandra (one half payment in January 2017 and the remaining half in July 2017).
(10) Ms. Blake resigned from the Company effective December 31, 2019, thus all of her unvested equity awards were cancelled on that date.

GRANTS OF PLAN-BASED AWARDS TABLE

The following table sets forth certain information regarding grants of plan-based awards to our NEOs during the fiscal year ended February 1, 2020:

Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards






Estimated Future Payouts
Under Equity
Incentive Plan Awards

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(3)


Exercise
or Base
Price of
Option
Awards
($/Sh)
Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)(4)
Name Grant
Date
(1)
Threshold
($)(2)
Target
($)(2)
Maximum
($)(2)
Threshold
(#)
Target
(#)
Maximum
(#)
Dinesh S. Lathi   4/11/19   250,000   1,000,000    1,500,000              
4/22/19 914,476 7.62 2,749,998
6/21/19 687,500 2,750,000  5,500,000
Jack P. Calandra 4/11/19 112,500 450,000 900,000
4/22/19 149,641 7.62 449,998
6/21/19 112,500 450,000 900,000
Carrie Ask 4/11/19 111,473 445,891 (5) 891,782
4/22/19 108,074 7.62 324,998
6/21/19 81,250 325,000 650,000
12/16/19 4,880 19,520 39,040
12/16/19 8,189 4.12 19,520
Boris P. Sherman 4/11/19 75,000 300,000 600,000
4/22/19 91,447 7.62 274,998
6/21/19 68,750 275,000 550,000
A. Alexander Rhodes 4/11/19 73,125 292,500 585,000
4/22/19 74,820 7.62 224,998
6/21/19 56,250 225,000 450,000
Mary Beth Blake 4/11/19 106,250 425,000 850,000
4/22/19 91,447 (6) 7.62 274,998
6/21/19 68,750 275,000 (6) 550,000
(1) Represents the date when the Committee approved the targets for the NEOs’ annual cash incentive bonus program or the grant was issued to such NEO.
(2) The awards granted on April 11, 2019 relate to our annual cash incentive program in which executive officers participate annually: 60% of the bonus criteria is based on the Company achieving certain adjusted EBIT targets (the “EBIT Performance Target Bonus”), 30% based on the Company achieving certain revenue targets (the “Revenue Performance Target Bonus”) and the remaining 10% of the bonus criteria is based on the recipient achieving personal non-financial performance objectives (“Personal Performance Bonus”). As Jos. A. Bank Brand President, Ms. Blake’s bonus criteria is based on Company adjusted EBIT (60%) and Jos. A. Bank revenue (30%). For 2019, the Committee approved a $191.7 million Threshold Performance Requirement, financial performance factors for (A) the EBIT Performance Target Bonus determined based on performance against EBIT goals as follows: (1) less than $191.7 million, 0%, (2) $191.7 million, 25%, (3) $201.7 million, 100%, and (4) $225.4 million, 200%, and (B) the Revenue Performance Target Bonus determined

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based on performance against revenue goals as follows: (1) less than $2,904.0 million, 0%, (2) $2,904.0 million, 25%, (3) $2,994.0 million, 100%, and (4) $3,084.0 million, 200%. The qualitative assessment of each NEO’s individual strategic performance is made by the Committee and is based on personal performance objectives set for each person participating in the program. The 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: EBIT Performance Target Bonus, Revenue Performance Target Bonus and Personal Performance Bonus, each 25%; (B) Target: EBIT Performance Target Bonus, Revenue Performance Target Bonus and Personal Performance Bonus, each 100%; and (C) Maximum: EBIT Performance Target Bonus, Revenue Performance Target Bonus and Personal Performance Bonus, each 200%, except for Mr. Lathi’s maximum performance which is capped at 150%. For additional information, see “– Compensation Discussion and Analysis – Elements of 2019 Compensation – Annual Cash Incentive Plan”. For the actual amounts paid to the NEOs pursuant to these grants under the 2019 bonus program, see the column titled “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table.

Awards granted on June 21, 2019 and December 16, 2019 relate to performance-based cash incentive awards under our 2016 LTIP, which vest in 2022 and are payable based on the Company’s cumulative adjusted EPS for the three-year period consisting of fiscal years 2019 through 2021, with a multiplier ranging from 25% to 200%. Performance targets will be disclosed in our proxy statement following the completion of the performance period. For purposes of this table, the columns assume payouts are as follows: (A) Threshold: 25%; (B) Target: 100%; and (C) Maximum: 200%. Ms. Ask received an additional prorated grant on December 16, 2019 in connection with her promotion to Chief Customer Officer. For additional information, see “– Compensation Discussion and Analysis – Elements of 2019 Compensation – Long Term Incentive Plan – Performance Based Cash Awards”.

(3) Represents stock options, and in the case of Mr. Lathi also includes 414,476 stock appreciation rights, granted on April 22, 2019 under our 2016 LTIP, which vest at a rate of 331/3% per year on each of April 22, 2020, 2021 and 2022. Ms. Ask also received an additional prorated stock option grant on December 16, 2019 in connection with her promotion to Chief Customer Officer, which vests at a rate of 331/3% per year on each of December 16, 2020, 2021 and 2022. The stock options each have an exercise price equal to the closing price of our common stock on the NYSE on the date of grant and must be exercised within ten years of their respective dates of grant.
(4) Represents aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718. For additional information, including a discussion of the assumptions used to calculate these values, see Note 15 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2020.
(5) Ms. Ask’s annual cash incentive was increased to $525,000 from $431,250 on December 5, 2019 due to her promotion to Chief Customer Officer; therefore, a prorated amount is reflected for fiscal 2019.
(6) Ms. Blake resigned from the Company effective December 31, 2019. Therefore, such award was cancelled on that date.

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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 NEOs as of the end of the fiscal year ended February 1, 2020:

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)
Dinesh S. Lathi        500,000 (2)     7.62   4/22/2029        
414,476 (3) 7.62 4/22/2029
Jack P. Calandra 42,054 21,027 (4) 11.36 5/17/2027
8,726 17,452 (5) 28.55 4/13/2028
149,641 (2) 7.62 4/22/2029
7,042 (9) 28,027
6,305 (10) 25,094
 15,225 (11) 60,596
  28,169 (14)
6,305 (15) 25,092
Carrie Ask 5,871 11,743 (6) 24.12 10/1/2028
108,074 (2) 7.62 4/22/2029
8,189 (7) 4.12 12/16/2029
4,975 (12) 19,801
4,975 (16) 19,801
Boris P. Sherman 18,876 9,438 (8) 12.80 9/11/2027
3,878 7,756 (5) 28.55 4/13/2028
91,447 (2) 7.62 4/22/2029
3,125 (13) 12,438
2,802 (10) 11,152
4,263 (11) 16,967
12,500 (17)
2,082 (15) 11,152
A. Alexander Rhodes 6,914 52.91 4/13/2025
23,161 17.43 4/4/2026
21,027 10,513 (4) 11.36 5/17/2027
3,878 7,756 (5) 28.55 4/13/2028
74,820 (2) 7.62 4/22/2029
3,521 (9) 14,014
2,802 (10) 11,152
14,084 (14)
2,802 (15) 11,152
Mary Beth Blake 52,567 11.36 3/30/2020
9,695 28.55 3/30/2020
(1) Based on the closing price of $3.98 per share for our Common Stock on the NYSE on January 31, 2020, which was the last trading day of our fiscal year and, in the case of PUs included under the Equity Incentive Plan Awards columns, assumes achievement of the performance conditions at the threshold level for each such award, if applicable.

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(2) Relates to an option award granted in April 2019 which vests at a rate of 331/3% per year on each of April 22, 2020, 2021 and 2022.
(3) Relates to a stock appreciation right award granted in April 2019 which vests at of 331/3% per year on each of April 22, 2020, 2021 and 2022.
(4) Relates to an option award granted in May 2017 which vests at a rate of 331/3% per year on each of May 17, 2018, 2019 and 2020.
(5) Relates to an option award granted in April 2018 which vests at a rate of 331/3% per year on each of April 13, 2019, 2020 and 2021.
(6) Relates to an option award granted in October 2018 which vests at a rate of 331/3% per year on each of October 1, 2019, 2020 and 2021.
(7) Relates to an option award granted in December 2019 which vests at a rate of 331/3% per year on each of December 16, 2020, 2021 and 2022.
(8) Relates to an option award granted in September 2017 which vests at a rate of 331/3% per year on each of September 11, 2018, 2019 and 2020.
(9) Relates to DSUs granted in May 2017 which vest at a rate of 331/3% per year on each of May 17, 2018, 2019 and 2020.
(10) Relates to DSUs granted in April 2018 which vest at a rate of 331/3% per year on each of April 13, 2019, 2020 and 2021.
(11) Relates to DSUs granted in September 2018 which vest at a rate of 50% per year on each of September 17, 2019 and 2020.
(12) Relates to DSUs granted in October 2018 which vest at a rate of 331/3% per year on each of October 1, 2019, 2020 and 2021.
(13) Relates to DSUs granted in September 2017 which vest at a rate of 331/3% per year on each of September 11, 2018, 2019 and 2020.
(14) Relates to PUs granted in May 2017, representing the right to receive up to two shares of common stock for each PU granted. These PUs vest 100% on May 17, 2020, subject to meeting the adjusted earnings per share performance target for fiscal 2019 of $1.89. The Company has determined that the performance target was not achieved and these awards will not vest; therefore, no value is assigned to such awards in the table. For further information, see “– Compensation Discussion and Analysis – Elements of 2019 Compensation – Long-Term Incentive Plan – Performance Units”.
(15) Relates to PUs granted in April 2018, representing the right to receive up to two shares of common stock for each PU indicated above. These PUs vest 100% on April 13, 2021, subject to meeting the adjusted earnings per share performance target for fiscal 2020. Assuming the performance target is achieved, the number of PUs earned will be adjusted by a multiplier, ranging from 50% to 200%, related to the Company’s adjusted earnings per share delivered for fiscal 2020. These PUs are shown in the table at threshold, or 50% achievement. For further information, see “– Compensation Discussion and Analysis – Elements of 2019 Compensation – Long-Term Incentive Plan – Performance Units”.
(16) Relates to PUs granted in October 2018, representing the right to receive up to two shares of common stock for each PU indicated above. These PUs vest 100% on October 1, 2021, subject to meeting the adjusted earnings per share performance target for fiscal 2020. Assuming the performance target is achieved, the number of PUs earned will be adjusted by a multiplier, ranging from 50% to 200%, related to the Company’s adjusted earnings per share delivered for fiscal 2020. These PUs are shown in the table at threshold, or 50% achievement. For further information, see “– Compensation Discussion and Analysis – Elements of 2019 Compensation – Long-Term Incentive Plan – Performance Units”.
(17) Relates to PUs granted in September 2017, representing the right to receive up to two shares of common stock for each PU granted. These PUs vest 100% on September 11, 2020, subject to meeting the adjusted earnings per share performance target for fiscal 2019 of $1.89. The Company has determined that the performance target was not achieved and these awards will not vest; therefore, no value is assigned to such awards in the table. For further information, see “– Compensation Discussion and Analysis – Elements of 2019 Compensation – Long-Term Incentive Plan – Performance Units”.

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OPTION EXERCISES AND STOCK VESTED TABLE

The following table sets forth the amount realized (before any tax withholding) by each of the NEOs regarding the exercise of options and the vesting of PUs and DSUs during the fiscal year ended February 1, 2020:

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)
Dinesh S. Lathi 24,678 184,927
Jack P. Calandra 25,419 142,923
Carrie Ask 2,487 11,142
Boris P. Sherman 8,789 52,184
A. Alexander Rhodes 20,626 133,275
Mary Beth Blake 47,866 317,237
(1) Value realized upon vesting is based upon closing price of our common stock on the vesting date.

PENSION BENEFITS

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

NONQUALIFIED DEFERRED COMPENSATION

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

CEO PAY RATIO

Under rules adopted pursuant to the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, we are required to calculate and disclose the total compensation paid to our median paid employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to our CEO. The following describes our methodology for identifying and calculating the total compensation paid to our median employee and the resulting CEO Pay ratio.

MEASUREMENT DATE

We identified the median employee using our employee population on February 1, 2020.

CONSISTENTLY APPLIED COMPENSATION MEASURE (CACM)

The applicable rules require us to identify the median employee by use of a “consistently applied compensation measure,” or CACM. We chose a CACM that closely approximates the annual total direct compensation of our employees. Specifically, we identified the median employee by looking at annual base pay, earned bonus, earned commission, other cash payments (e.g., wellness program incentives, employee incentive contests, disqualifying dispositions in our employee stock purchase plan, etc.) and the grant date fair value for annual equity awards. We converted earnings paid in local currency to U.S. dollars by applying the exchange rate applicable on February 1, 2020. As permitted by applicable SEC regulations, we did not annualize the compensation paid to partial-year employees or employees who were on an unpaid leave of absence and we did not utilize any cost-of-living adjustment.

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PAY RATIO

After applying our CACM methodology described above, we concluded that our median employee compensation for fiscal 2019 was $28,075, which reflects a less than 1% increase from our median employee compensation for fiscal 2018. For purposes of this calculation, we used our CEO’s pay of $3,755,038 as reported in the Summary Compensation Table in this proxy. Based on the described methodology, our CEO to median employee pay ratio is 134:1, which reflects a 41% increase from our fiscal 2018 ratio of 95:1. The increase was due to the changes in Mr. Lathi’s 2019 compensation as President and CEO as compared to Mr. Lathi’s 2018 compensation which was reflective of his role as Executive Chairman and interim PEO.

This information is being provided for compliance purposes only. Neither the Committee nor management of the Company used the pay ratio measure in making compensation decisions. Also, as a result of our methodology used to determine the pay ratio, our pay ratio may not be comparable to the pay ratios of other companies because other companies may rely on different methodologies, estimates or assumptions, or may make adjustments that we do not make.

EMPLOYMENT AGREEMENTS

We do not have employment agreements with any of our executive officers.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

SENIOR EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN

GENERAL

The Company maintains a Senior Executive Change in Control Severance Plan in which each of our NEOs participate. The Senior Executive Change in Control Severance Plan does not limit or otherwise affect any rights an executive may have under any other contract or agreement with the Company or any of our affiliates.

Pursuant to the plan, a “Change in Control” generally occurs when:

our directors cease to constitute a majority of the members of the Board;
a merger, consolidation or similar transaction of the Company with another entity is consummated;
merger of a significant wholly-owned subsidiary with another entity (other than an affiliated entity);
any person, other than a specified owner (as defined in the agreement), becomes a beneficial owner, directly or indirectly, of 30% or more of the combined voting power of our then outstanding voting securities;
a sale, transfer, lease or other disposition of all or substantially all of the assets of the Company is consummated; or
our shareholders approve a plan of complete liquidation or dissolution of the Company.

CHANGE IN CONTROL BENEFITS

If a Change in Control occurs and an executive’s employment by the Company is terminated, the executive shall be entitled to the following benefits:

If the executive’s employment by the Company is:
terminated by the Company as a result of the occurrence of an Event of Termination for Cause (as defined below) or by the executive before the occurrence of an Event of Termination for Good Reason (as defined below),
automatically terminated as a result of the executive’s death, or
automatically terminated as a result of the executive’s disability (as defined in the Senior Executive Change in Control Severance Plan),

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then we shall pay to the executive, or the executive’s estate or beneficiaries, as applicable, those amounts earned or benefits accumulated due to the executive’s continued service through his termination date.

If the executive’s employment by the Company is terminated by us other than as a result of the occurrence of an Event of Termination for Cause or by the executive after the occurrence of an Event of Termination for Good Reason, then we shall pay to the executive those amounts earned or benefits accumulated due to the executive’s continued service through his termination date as well as:
a lump sum equal to two times the sum of (1) the amount of the base salary for the fiscal year in which the executive’s termination date occurs or for the immediately preceding fiscal year, whichever is higher and (2) an amount equal to the executive’s target annual performance bonus for the fiscal year in which the executive’s termination date occurs or the immediately preceding fiscal year, whichever is higher, and
a lump sum equal to 24 months of total monthly basic life insurance premium (both the portion paid by us and the portion paid by the executive) applicable to the executive’s basic life insurance coverage on his termination date (provided that if a conversion option is applicable under our group life insurance program, the executive may, at his option, convert his basic life insurance coverage to an individual policy after his termination date by completing the forms required by us).
 

In addition, we at our sole expense shall take the following actions: (1) for two years, or the date on which the executive becomes employed on a full-time basis by another person (the “Coverage Period”), we shall maintain, and not materially reduce the benefits provided by, our group health plan; and (2) we shall arrange for the executive’s uninterrupted participation throughout the Coverage Period in our group health plan; provided that if the executive’s participation after the termination date in such group health plan is not permitted by the terms of that plan, then throughout the Coverage Period, we shall provide the executive with substantially the same benefits.

Assuming that a Change in Control occurred during fiscal 2019 and each of the executives were terminated under the above-described circumstances effective as of February 1, 2020, the NEOs would have been entitled to receive the following:

Name       2x Base &Bonus
($)
      Insurance
Premiums
($)
      Health
Coverage
($)
      Total
($)
(1)
Dinesh S. Lathi 4,000,000 2,550 4,002,550
Jack P. Calandra 2,100,000 2,550 17,073 2,119,623
Carrie Ask 2,450,000 2,550 28,754 2,481,304
Boris P. Sherman 1,600,000 2,550 28,754 1,631,304
A. Alexander Rhodes 1,485,000 2,448 18,870 1,506,318
Mary Beth Blake(2)
(1) Does not include dividend equivalent or other amounts earned or benefits accumulated due to continued service through February 1, 2020.
(2) Ms. Blake was no longer employed by the Company on February 1, 2020; therefore, she would not have been entitled to receive the described benefits.

Pursuant to the terms of the Senior Executive Change in Control Severance Plan, an “Event of Termination for Cause” shall be deemed to have occurred if, after a Change in Control, the executive shall have committed:

gross negligence or willful misconduct in connection with his duties or in the course of his employment with the Company or any wholly-owned subsidiary;
an act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Company or any wholly-owned subsidiary;
intentional wrongful damage to property (other than of a de minimis nature) of the Company or any wholly-owned subsidiary;
intentional wrongful disclosure of secret processes or confidential information of the Company or any wholly-owned subsidiary which the executive believes or reasonably should believe will have a material adverse effect on the Company; or
an act leading to a conviction of a felony, or a misdemeanor involving moral turpitude.

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Further, an “Event of Termination for Good Reason” shall generally occur if any of the following occur on or after a Change in Control:

a material reduction in status, title, position or responsibilities;
a reduction in annual base salary as in effect immediately before the occurrence of the Change in Control or as annual base salary may be increased from time to time after that occurrence;
a reduction in target and/or maximum bonus potential;
a mandatory relocation of employment with the Company; or
any material changes to the Company’s basic benefit plans, paid vacation days or any other non-contractual benefits that were provided by the Company immediately before the occurrence of the Change in Control.

In addition, pursuant to the terms of the Senior Executive Change in Control Severance Plan:

any stock options, stock appreciation rights, restricted stock, and DSUs granted to the NEOs become fully exercisable or vest if a Change in Control occurs and the NEO is terminated without cause or for good reason; and
remaining PUs and Performance Cash will vest as set out in the award agreements related to each such PU, which provide for vesting under various scenarios depending on the timing of the Change in Control relative to the end of the applicable performance period.

If a Change in Control occurred on February 1, 2020 and each of the executives were terminated without cause or for good reason, the following awards would have vested for each of the NEOs which, based on the closing sales price of $3.98 for our common stock on January 31, 2020 (the last trading day of the fiscal year ended February 1, 2020), would have resulted in the indicated realized value to the NEOs:

      Option and Stock
Appreciation Right
Awards
      Restricted Stock, DSU and
Performance Unit Awards
      Performance
Cash Awards
     
Name Number of
Shares
(#)
      Value
Realized
($)
Number of
Shares or Units
(#)
      Value
Realized
($)
Value
Realized
($)
Total
Value
Realized
($)
(1)
Dinesh S. Lathi 914,476 2,750,000 2,750,000
Jack P. Calandra 188,120 69,350 276,013 450,000 726,013
Carrie Ask 128,006 14,925 59,402 344,520 403,922
Boris P. Sherman 108,641 28,294 112,610 275,000 387,610
A. Alexander Rhodes 93,089 26,011 103,524 225,000 328,524
Mary Beth Blake(2)
(1) Does not include dividend equivalents or other amounts earned or benefits accumulated due to continued service through February 1, 2020.
(2) Ms. Blake was no longer employed by the Company on February 1, 2020; therefore, she would not have been entitled to receive the described benefits.

CLAWBACK PROVISIONS

The Senior Executive Change in Control Severance Plan provides that if an executive, before or after the termination of his employment relationship with us, has committed certain acts which materially and adversely affect the Company, then some or all (A) benefits payable or to be provided, or previously paid or provided, to the executive under the Senior Executive Change in Control Severance Plan or (B) cash bonuses paid to the executive by the Company, or equity awards granted to the executive by the Company that vest, on or after the effective date of the Senior Executive Change in Control Severance Plan will be forfeited to us on such terms as determined by the Board. Those acts which could trigger such a forfeiture include:

fraud, embezzlement, theft, felony, or similar acts of dishonesty in the course of the executive’s employment with us which damaged the Company,
knowingly causing or assisting in causing our financial statements to be misstated or the Company to engage in criminal misconduct,
disclosing our trade secrets, or
violating the terms of any non-competition, non-disclosure, or similar agreement with respect to us to which the executive is a party.

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POTENTIAL PAYMENTS TO OTHER NAMED EXECUTIVE OFFICERS

As part of their respective offer letters, the Company agreed that:

if Mr. Lathi is terminated without cause or he resigns for good reason (each as defined in the Senior Executive Change in Control Severance Plan), Mr. Lathi will be entitled to receive 52 weeks of his then-current base salary, 100% of his then current target annual bonus, any actual bonus earned for the year in which the termination occurs prorated to reflect the portion of the performance period he is actually employed by the Company and $25,000 to apply to his COBRA expenses for one year. In addition, with respect to any then outstanding vested stock options and vested stock appreciation rights at the time of Mr. Lathi’s termination of employment, he will have the opportunity to exercise such awards no later than the earlier of (i) two years following the date of his termination of employment; and (ii) the date on which such awards expire. The severance payments and extended exercise rights of stock options and stock appreciation rights are subject to the timely execution of a Separation Agreement and full release of claims. If Mr. Lathi were to have been terminated without cause or he resigned for good reason on February 1, 2020, he would have been entitled to receive $2,125,000, which includes 100% of the $100,000 actual bonus earned as the full year would have been completed as of February 1, 2020.
in the event of termination without cause, Mr. Calandra will receive 52 weeks of salary and a pro-rata share of his target bonus under the Company’s annual cash incentive plan. If Mr. Calandra were to have been terminated without cause on February 1, 2020, he would have been entitled to receive $1,050,000, which includes 100% as the pro rata bonus amount as the full year would have been completed as of February 1, 2020.
in the event of termination without cause, Mr. Sherman will receive 52 weeks of salary. If Mr. Sherman were to have been terminated without cause on February 1, 2020, he would have been entitled to receive $500,000.

ACTUAL PAYMENTS TO MS. BLAKE

Effective December 31, 2019, Ms. Blake resigned from her position as Brand President, Jos. A. Bank. In connection with her resignation, the Company entered into a Separation Agreement with Ms. Blake. Per the terms of the Separation Agreement, Ms. Blake will receive (i) $600,000 to be paid through the first anniversary of the Termination Date in substantially equal installments, (ii) a lump sum payment of $42,000 representing the bonus earned by Ms. Blake under the Company’s annual incentive plan for fiscal 2019, to be paid no later than April 15, 2020, (iii) a lump sum payment of $40,000 payable within 15 days of her Termination Date in consideration for certain equity awards that would have vested in April 2020, (iv) a lump sum payment of $12,000 for health insurance premiums, and (v) up to $10,000 in reimbursements for outplacement services. Pursuant to the Separation Agreement, Ms. Blake provided a full release of all claims related to her employment with and/or separation from the Company and agrees not to work for certain named competitors of the Company or solicit employees from the Company for a period of twelve months following her Termination Date.

The following table summarizes the payments to Ms. Blake as a result of her separation:

Cash Severance(1)       Equity(2)       Health Coverage(3)       Additional Payments(4)       Total
$600,000 $40,000 $12,000 $52,000 $704,000
(1) Ms. Blake will receive salary continuation payments totaling $600,000. These payments started on December 31, 2019 and will be paid through the first anniversary of that date in equal installments.
(2) Represents compensation in consideration for certain equity awards that would have vested in April 2020.
(3) Represents a lump sum payment for health insurance premiums.
(4) Represents $42,000 earned by Ms. Blake under the Company’s annual incentive plan for fiscal 2019 and $10,000 in reimbursements for outplacement services.

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TAILORED BRANDS 2016 LONG-TERM INCENTIVE PLAN

PROPOSAL 4:
ADOPT THE TAILORED BRANDS, INC. 2016 LONG-TERM INCENTIVE PLAN, AS AMENDED AND RESTATED

 
WHAT AM I VOTING ON?
Shareholders are being asked to approve an amendment and restatement of our 2016 Long-Term Incentive Plan to (1) increase the number of available shares by 3.3 million shares and (2) make certain other technical changes including, without limitation: (a) removing or revising the provisions of the 2016 LTIP regarding performance-based compensation under Section 162(m) (as defined below) that have become obsolete; (b) increasing the annual limits on awards that may be granted to an employee; (c) clarifying that no dividends will be paid on unvested or unearned awards under the 2016 LTIP; (d) allowing withholding for taxes at a rate in excess of the minimum required rate and (e) reducing the fungible ratio.
VOTING RECOMMENDATION: FOR
The Board and management believe it is important that the 2016 LTIP, as proposed to be amended and restated, 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.

On April 16, 2020, pursuant to authority delegated by the Board on March 25, 2020, the Compensation and Organizational Development Committee unanimously adopted, subject to approval by our shareholders, the Tailored Brands, Inc. 2016 Long Term Incentive Plan, as Amended and Restated (the “2016 LTIP”). We are submitting the 2016 LTIP, as proposed to be amended and restated, to our shareholders for approval to:

increase the number of shares of common stock available for issuance under the 2016 LTIP by 3.3 million shares; and
make certain other technical changes including, without limitation:
removing or revising the provisions of the 2016 LTIP regarding performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder (“Section 162(m)”), that have become obsolete as a result of the repeal by the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) of the performance-based compensation exemption from Section 162(m),
increasing the annual limits on awards that may be granted to an employee,
clarifying that no dividends will be paid on unvested or unearned awards under the 2016 LTIP,
allowing withholding for taxes at a rate in excess of the minimum required rate, and
reducing the fungible ratio from 2:1 to 1.75:1.

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Tailored Brands 2016 Long-Term Incentive Plan

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 our shareholders and providing them additional incentives to continue in their employment or affiliation with us. 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:

nonqualified stock options to purchase our common stock (“NQSOs”),
incentive stock options to purchase our common stock (“ISOs” and, together with NQSOs, “Options”),
stock appreciation rights (“SARs”),
restricted common stock (“Restricted Stock”),
deferred stock units (“DSUs”),
awards denominated in cash that are subject to the attainment of performance goals (“Cash Based Awards”),
Restricted Stock Awards that are subject to the attainment of performance goals (“Performance Stock Awards”),
DSU Awards that are subject to the attainment of performance goals (“Performance Unit Awards”), and
equity based or equity related Awards not otherwise described by the terms and provisions of the 2016 LTIP (“Other Stock Based Awards”).

THE PROPOSED AMENDMENTS

The 2016 LTIP, as proposed to be amended and restated, would make the following significant changes, subject to the approval of shareholders.

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 3.3 million shares from 9.3 million shares to 12.6 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 interests of our shareholders. Accordingly, we strongly believe that amending and restating the 2016 LTIP is important to our future success.

If our shareholders approve the 2016 LTIP, as proposed to be amended and restated, 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 2021. If our shareholders do not approve the 2016 LTIP, as proposed to be amended and restated, 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 2020. 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 February 1, 2020 (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 4.5%.
Our average burn rate over the three years ended February 1, 2020 is generally consistent with similarly-sized retail companies 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 4.1 million shares currently remaining for issuance plus the additional 3.3 million shares requested for issuance) and taking into account outstanding awards, would be 20% on a fully-diluted basis.

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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 “—Plan Benefits” and “Stock Ownership Information—Equity Compensation Plan Information” on pages 81 and 83 of this proxy statement, respectively.

REMOVE OR REVISE OBSOLETE PROVISIONS REGARDING PERFORMANCE- BASED COMPENSATION

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. Prior to the enactment of the Tax Act, compensation that qualified as “performance-based” was excluded for purposes of calculating the amount of compensation subject to the $1,000,000 million limit. The Tax Act repealed the performance-based compensation exemption from Section 162(m).

The 2016 LTIP, as proposed to be amended and restated, would remove or revise the provisions of the 2016 LTIP that have become obsolete as a result of such repeal and provide the Committee with discretion to (1) select objective and subjective performance goals applicable to Cash-Based Awards, Performance Stock Awards and Performance Unit Awards that are not specifically identified in the 2016 LTIP and (2) both increase and reduce the amount of a Cash-Based Award, Performance Stock Award or Performance Unit Award actually paid to a participant.

INCREASES IN ANNUAL LIMITS ON AWARDS THAT MAY BE GRANTED TO AN EMPLOYEE

Although many companies are removing the annual limits on awards that may be granted to an employee in response to the repeal of the performance-based compensation exemption from 162(m), the 2016 LTIP, as proposed to be amended and restated, retains increased annual limits on equity Awards that may be granted to an employee and only removes the limit on cash awards.

The 2016 LTIP, as proposed to be amended and restated, does not modify the limit on the maximum number of shares of common stock subject to Awards that may granted during a single fiscal year to any non-employee director.

See “—Available Common Stock” on page 72 of this proxy statement for more information regarding the annual limits on Awards that may be granted to an employee, as proposed to be amended and restated.

NO PAYMENTS OF DIVIDENDS ON UNVESTED OR UNEARNED AWARDS

The 2016 LTIP, as proposed to be amended and restated, provides that any dividends paid with respect to any Award under the 2016 LTIP will be subject to the same vesting, transferability and forfeiture restrictions applicable to such Award and any such dividends will be payable only at the time and to the extent that the vesting, transferability and forfeiture restrictions applicable to such Award lapse; provided, that, to the extent that such vesting, transferability or forfeiture restrictions do not lapse, such dividends will be forfeited. We believe that clearly establishing a prohibition on the payment of dividends on unvested or unearned Awards is consistent with best practice and reflects our commitment to good corporate governance.

ALLOW WITHHOLDING FOR TAXES IN EXCESS OF THE MINIMUM REQUIRED RATES

The 2016 LTIP, as proposed to be amended and restated, allows withholding for taxes at a rate elected by the employee in excess of the minimum required rate.

REDUCING THE FUNGIBLE RATIO FROM 2:1 TO 1.75:1

Under the 2016 LTIP, as proposed to be amended and restated, for Awards other than Options and SARs, 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 1.75. This will allow the Company to extend the life of the plan when granting full value awards.

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KEY PLAN FEATURES

   The 2016 LTIP, as proposed to be amended and restated, includes provisions designed to protect the interests of our shareholders and reflect corporate governance best practices, including:   
No Single Trigger Accelerated Vesting Upon Change in Control       The 2016 LTIP does not provide for any automatic mandatory vesting of awards upon a change in control.
No Liberal Share Counting or Recycling The following shares of common stock will not become available again for issuance under the 2016 LTIP: (1) shares withheld from the payment of an Award (or an award under our prior 1996 Long-Term Incentive Plan (the “1996 LTIP”) or our prior 2004 Long-Term Incentive Plan (the “2004 LTIP”)) to satisfy tax obligations with respect to the Award; (2) shares tendered in payment of the exercise price of an Option (or an option under the 1996 LTIP or the 2004 LTIP); (3) shares not issued upon the “net settlement” of a SAR (or a stock appreciation right under the 1996 LTIP or the 2004 LTIP); and (4) shares that we repurchase on the open market with the proceeds of the exercise price of an Option (or proceeds of the exercise price of an option under the 1996 LTIP or the 2004 LTIP).
Minimum Vesting Requirements The 2016 LTIP provides that no Award 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.
Awards Subject to Forfeiture/Clawback If we are required to prepare an accounting restatement due to our material noncompliance with any financial reporting requirement under applicable securities laws, a current or former executive officer must forfeit and repay to us any compensation awarded under the 2016 LTIP to the extent specified in any of our recoupment policies established or amended (now or in the future).
Repricing/Cash Buyout of Underwater Options and SARs Not Allowed Without Shareholder Approval The Committee may not directly or indirectly lower the exercise price of a previously granted Option or SAR or cancel a previously granted Option or SAR for a payment of cash or other property, without the prior approval of our shareholders.
No Evergreen Provision The 2016 LTIP does not contain an annual “evergreen” provision. The 2016 LTIP authorizes the issuance of a fixed number of shares and requires shareholder approval for the issuance of any additional shares, which provides our shareholders with direct input on our equity compensation programs.
No Liberal Change in Control Definition; Require Consummation of a Change in Control Event The change in control definition in the 2016 LTIP is not a “liberal” definition. A change in control transaction must actually occur to trigger the change in control provisions in the 2016 LTIP.
No Discount Stock Options or SARs All Options and SARs granted under the 2016 LTIP must have an exercise price equal to or greater than the fair market value of our common stock on the grant date.
No Dividends or Dividend Equivalents on Unvested or Unearned Awards Any dividends paid with respect to any Award under the 2016 LTIP will be subject to the same vesting, transferability and forfeiture restrictions applicable to such Award and any such dividends will be payable only at the time and to the extent that the vesting, transferability and forfeiture restrictions applicable to such Award lapse. Any dividend equivalents paid under an Award will be subject to restrictions and a substantial risk of forfeiture to the same extent as the Award with respect to which such dividend equivalents are to be paid.
Limit on Non-Employee Director Awards 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.

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SUMMARY OF THE PLAN

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

ADMINISTRATION

The Compensation and Organizational Development Committee administers the 2016 LTIP. The 2016 LTIP requires the Committee to be comprised of at least two directors, each of whom will be a “non-employee” director (within the meaning of Rule 16b-3 under the Exchange Act). The Committee currently consists of two directors, each of whom is a “non-employee director.”

In its capacity as plan administrator, the Committee has 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 Committee may deem necessary or proper. In carrying out its authority under the 2016 LTIP, the Committee has full and final authority and discretion, including the following rights, powers and authorities to:

determine the participants to whom and the times at which Awards will be made,
determine the number and exercise price of shares of our common stock covered in each Award,
determine the terms, provisions and conditions of each Award,
accelerate the time at which any outstanding Award will vest,
prescribe, amend and rescind rules and regulations relating to administration of the 2016 LTIP, and
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 Committee pursuant to the provisions of the 2016 LTIP and all related orders and resolutions of the Committee are 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 the type of Award and when and how it may be exercised or earned, any exercise price associated with the Award how the Award will or may be settled and any other applicable terms and conditions affecting the Award.

ELIGIBILITY

The following may receive Awards under the 2016 LTIP:

employees of the Company and its affiliates,
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,
non-employee directors of the Company, and
consultants who render services to the Company or its affiliates (other than the prohibited services described in the 2016 LTIP).

As of the Record Date, we had approximately 19,300 employees and five non-employee directors. 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 approval by our shareholders of the 2016 LTIP, as amended and restated, and 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 12.6 million. The shares of our common stock that may be delivered under the 2016 LTIP may consist of treasury shares and authorized and unissued shares of common stock.

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Upon the grant of an Option 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 Option 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 multiplied by 1.75. 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 12.6 million share limit:

shares of common stock allocable to the portion of an Award granted under the 2016 LTIP that terminates or expires, is forfeited or cancelled for any reason, or is settled in cash in lieu of shares of common stock or in a manner such that all or some of the shares of common stock covered by the Award are not issued or are exchanged for Awards that do not involve shares of common stock,
shares of common stock subject to outstanding awards under the 1996 LTIP or the 2004 LTIP as of the original effective date of the 2016 LTIP that, on or after such effective date, cease 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 our common stock, and
shares of common stock granted through the assumption of, or in substitution for, outstanding awards granted by a company to individuals who become eligible participants in the 2016 LTIP as the result of a merger, consolidation, acquisition or similar corporate transaction involving such company and the Company or any of its affiliates.

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

Options or SARs covering more than 1,500,000 shares of our common stock,
Performance Stock Awards or Performance Unit Awards covering more than 900,000 shares of our common stock, or
Performance Stock Awards or Performance Unit Awards settled in cash that have a fair market value in excess of the fair market value of a share of common stock on the applicable payment or settlement date of the Award multiplied by 900,000.

The maximum number of shares of our 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 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 $1.58.