The following table sets forth the number of shares of our common stock we believe to be beneficially owned as of December 13, 2022, by each individual or entity, excluding the executive officers named in the Summary Compensation table and our current directors, known to the Company to be the beneficial owner of more than five percent of our common stock. Unless otherwise indicated, we believe that the individuals or entities named in the table have sole voting and investment power with respect to all shares shown.
Our current executive officers are listed below. Excluding Ms. Bubanich, Mr. Grow, and Ms. Satterfield, we refer to those listed below, together with Simone C. Walsh, who served as Vice President, Chief Financial Officer and Treasurer through her voluntary resignation effective December 1, 2022, as our "named executive officers" or "NEO's" in the Executive Compensation section and elsewhere in this Proxy Statement. Certain information regarding our executive officers is provided below. These individuals are appointed to serve at the discretion of our Board. The primary business address for Mr. Humphreys, Ms. Bubanich, Mr. Miller, and Mr. Encalada Arjona is 2750 Premiere Parkway, Suite 100, Duluth, Georgia 30097. Mr. Grow's and Ms. Satterfield's primary business address is 201 West McBee Avenue, Suite 320, Greenville, South Carolina 29601, and Mr. Stillwell's primary business address is 1147 Sixth Avenue, Columbus, Georgia 31901.
Delta Apparel, Inc. - 23 - Proxy Statement
Nancy P. Bubanich |
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Vice President, Chief Accounting Officer, Assistant Secretary, and Assistant Treasurer
Age: 56
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Ms. Bubanich was appointed to serve as the Company’s principal financial officer and principal accounting officer, effective December 1, 2022. Ms. Bubanich has served as the Company’s Chief Accounting Officer since August 2021, Vice President since 2018, Assistant Treasurer since 2017 and Assistant Secretary since November 2012. From July 2011 to August 2021, Ms. Bubanich also served as the Company’s Corporate Controller. From September 2007 to June 2011, Ms. Bubanich served as Controller of Culver City Clothing Company, a wholly-owned subsidiary of the Company. From June 2006 to August 2007, Ms. Bubanich served as Senior Accountant for the Company’s wholly-owned subsidiary, M.J. Soffe, LLC. Prior to joining the Company in 2006, Ms. Bubanich served as Accounting Manager for Lerner Corporation, a property management company. Ms. Bubanich earned a Bachelor of Arts degree in economics from the University of Maryland and is a certified public accountant. |
Jeffery N. Stillwell
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President, Salt Life Group
Age: 56
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Mr. Stillwell was appointed President of our Salt Life Group segment in July 2018. Mr. Stillwell joined the Company in 2009, serving in various executive leadership roles with Salt Life, LLC (formerly To The Game, LLC), a wholly-owned subsidiary of the Company, until 2011, and then serving as President of Salt Life, LLC from 2011 to July 2018. Before joining the Company, Mr. Stillwell and others founded Kudzu, LLC, a supplier of licensed and decorated headwear, in 1994, and Mr. Stillwell served in various executive leadership roles for that business and several related businesses until joining the Company in 2009. Mr. Stillwell holds a bachelor's degree in marketing from Auburn University.
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Carlos E. Encalada Arjona
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Vice President of Manufacturing
Age: 48
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Mr. Encalada Arjona was appointed Vice President of Manufacturing of Delta Apparel, Inc. in November 2017. Prior to November 2017, Mr. Encalada Arjona served as the Director of Apparel Manufacturing for the Company. Mr. Encalada Arjona joined the Company in August 2000 and has served in various management roles within our manufacturing operations, including Offshore Human Resources Director and Director of Apparel Manufacturing. Mr. Encalada Arjona holds a Master of Business Administration from the University of Texas at Austin and the Instituto Tecnologico de Estudios Superiores de Monterrey as well as a mechanical and electrical engineering degree from Instituto Tecnologico de Estudios Superiores de Monterrey.
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S. Lauren Satterfield |
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Deputy General Counsel and Corporate Secretary
Age: 35
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Ms. Satterfield has served as Deputy General Counsel since February 2020 and as Corporate Secretary since August 2020. From August 2018 to February 2020, Ms. Satterfield served as Associate Counsel for the Company. Before joining the Company, Ms. Satterfield served as Senior Tax Associate with Elliott Davis, LLC, a regional accounting firm, from January 2015 through July 2018. Before January 2015, Ms. Satterfield worked as an associate attorney with a law firm from November 2012 to January 2015. Ms. Satterfield holds a Juris Doctor degree and an LLM degree in Taxation. |
EXECUTIVE COMPENSATION
This Executive Compensation section discusses the material elements of compensation earned by, paid to or awarded to each of our named executive officers during our fiscal year ended October 1, 2022, and describes the principles and philosophies underlying our executive compensation programs and policies. In addition, you will find a series of tables in this Proxy Statement containing specific information regarding our named executive officers' compensation in our 2022 fiscal year.
Executive Summary
Delta Apparel, Inc., along with its operating subsidiaries, DTG2Go, LLC, Salt Life, LLC, and M.J. Soffe, LLC, is a vertically-integrated, international apparel company that designs, manufactures, sources, and markets a diverse portfolio of core activewear and lifestyle apparel products under the primary brands of Salt Life®, Soffe®, and Delta. We are a market leader in the on-demand, digital print and fulfillment industry, bringing DTG2Go's proprietary technology and innovation to our customers' supply chains. We specialize in selling casual and athletic products through a variety of distribution channels and tiers, including outdoor and sporting goods retailers, independent and specialty stores, better department stores and mid-tier retailers, mass merchants and e-retailers, the U.S. military, and through our business-to-business digital platform. Our products are also made available direct-to-consumer on our ecommerce sites and in our branded retail stores. Our diversified distribution allows us to capitalize on our strengths in providing activewear and lifestyle apparel products to a broad and evolving customer base whose shopping preferences may span multiple retail channels.
Delta Apparel, Inc. - 24 - Proxy Statement
As a vertically-integrated manufacturer, we design and internally manufacture the majority of our products. More than 90% of the apparel we sell is sewn in our owned or leased facilities. This allows us to offer a high degree of consistency and quality, leverage scale efficiencies, and react quickly to changes in trends within the marketplace. We have manufacturing operations located in the United States, El Salvador, Honduras and Mexico, and we use domestic and foreign contractors as additional sources of production. Our distribution facilities are strategically located throughout the United States to better serve our customers with same-day shipping on our catalog products and weekly replenishments to retailers. Additional information about our Company is available at www.deltaapparelinc.com.
The compensation of our named executive officers was approved at our prior annual meeting of shareholders on February 10, 2022, with almost 99% of the shares voted at the meeting (excluding abstentions and broker non-votes) cast in favor of our executive compensation programs. We have considered those results in making executive compensation decisions and reviewing our executive compensation programs and policies. Our executive compensation programs and policies during fiscal year 2022 generally remained consistent with those presented in our proxy statement for our February 10, 2022, annual meeting of shareholders.
Key Features of Our Executive Compensation Programs
Below are some of the key features of our executive compensation programs.
What We Do:
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We pay for performance and place a significant portion of executive officer compensation "at risk"
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We cap the amount of cash incentive compensation and equity awards that an executive may receive in any year
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We have robust stock ownership guidelines for certain executive positions and our directors
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We have double trigger change-in-control cash severance benefits in our executive employment agreements
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We pay reasonable salaries and provide appropriate benefits to our executives
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We generally provide a blend of short-term and long-term incentive opportunities as well as a blend of cash and equity incentive opportunities
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Our Compensation Committee is made up entirely of independent directors and is empowered to select and engage its own independent advisors
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What We Don't Do:
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We do not allow hedging, puts, calls or similar derivative transactions related to our stock
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We do not reprice stock options and do not exchange "underwater" options for cash
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We do not offer a defined benefit pension plan
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We do not offer a supplemental executive retirement plan
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We do not provide any excise tax reimbursement payments (including "gross-ups") on payments contingent upon a change in control of the Company
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We do not provide special health or welfare benefits to our executives, other than participation in broad-based employee programs on the same basis as our other full-time employees across the United States
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Perquisites or other personal benefits are not a material part of our compensation program for our executives
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The principal elements of our named executive officer compensation program are base salary, performance-based annual cash incentives, service-based and performance-based equity incentives, and the employee benefits provided to our other full-time domestic employees. We utilize a combination of the foregoing elements with the ultimate goals of attracting, retaining and appropriately rewarding executive management talent and aligning the short-term and long-term interests of our executives with those of our shareholders. It is important to us that the compensation of our named executive officers be directly linked to Company performance and, with that goal in mind, our Compensation Committee believes that a significant portion of our named executive officer compensation should be "at risk", or not guaranteed, and directly tied to the financial success of the Company.
Consistent with our approach in prior years, we placed primary emphasis on two financial metrics, earnings before interest and taxes ("EBIT") and return on capital employed ("ROCE"), in evaluating and monitoring Company performance relative to the compensation of our executives in fiscal year 2022. We define EBIT as our revenue less expenses, excluding interest and taxes. ROCE is defined as our EBIT as a percentage of our 12-month average capital employed, with capital employed generally being equity plus debt, net of cash, cash equivalents and taxes. We continue to believe that these metrics strike a proper balance between generating financial profits and efficiently allocating our capital, and that these metrics are also understandable to the applicable stakeholders.
The discussion below is intended to assist you in understanding the information provided in this Executive Compensation section and the accompanying compensation tables contained in this Proxy Statement, and to put that information into context within our overall executive compensation program. For the reasons described in this Executive Compensation section and accompanying tables, we believe our executive compensation programs are designed to properly support our Company goals and encourage profitable growth for our business.
Delta Apparel, Inc. - 25 - Proxy Statement
Performance and Pay Implications
We continue to believe that the compensation programs offered to our named executive officers align with our performance-based compensation philosophy and that our emphasis on performance-based compensation is reflected in the compensation paid to our named executive officers. For example, in our cash incentive plans tied to our consolidated EBIT performance, our named executive officers received more than the target amount of cash incentive compensation for which they were eligible in our two most recent fiscal years because our consolidated EBIT was above applicable target levels. In other years, however, our named executive officers received less than or none of the target amount of cash incentive compensation for which they were eligible because our consolidated EBIT was below the applicable minimum or target levels. The same dynamic is evident in our equity awards based on ROCE. For example, in fiscal year 2019, the Company achieved ROCE that was slightly below the target threshold set by our Compensation Committee applicable to the equity award for which our Chairman and Chief Executive Officer, Mr. Humphreys, was eligible, and Mr. Humphreys forfeited shares as a result. By way of further example, in our 2018 fiscal year, the Company achieved ROCE in line with the target threshold applicable to Mr. Humphreys' equity award and he received the target amount of shares for which he was eligible. In other years the Company did not achieve the applicable minimum ROCE threshold and Mr. Humphreys was not awarded any shares in such years.
More detail regarding the compensation of our named executive officers can be found within the Summary Compensation table located within this Proxy Statement.
Compensation Philosophy and Objectives
Our approach to executive compensation continues to be defined by the following primary objectives:
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Aligning the interests of our shareholders and executives;
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Establishing a strong link between executive pay and Company performance; and
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Attracting, retaining and appropriately rewarding executive management talent in line with market practices.
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Alignment of Shareholder and Executive Interests
Our executive compensation program elements are aligned with the interests of our shareholders in several key respects. The cash incentive compensation for which Mr. Humphreys, Ms. Walsh, and Messrs. Stillwell and Encalada Arjona were eligible in fiscal year 2022 was contingent on the Company's achievement of EBIT goals that we believe were both reasonable and challenging under the applicable business conditions. Due to Mr. Miller joining the Company in April 2022 after over half of the fiscal year performance period elapsed, he was granted a service-based cash incentive opportunity. The cash incentive compensation opportunity for which Mr. Miller is eligible in fiscal year 2023 is aligned with our other named executive officers and contingent on the achievement of certain EBIT thresholds and other objective performance-based criteria.
For several years now, the equity incentives awarded to our executives have consisted of service-based restricted stock units and/or performance units, with a significant portion of these equity incentive awards based entirely on the Company's performance with respect to ROCE. Approximately one-half of the equity incentive awards eligible to vest in fiscal year 2023 for Ms. Walsh (prior to her voluntary resignation), Mr. Stillwell, and Mr. Encalada Arjona are based on the Company's performance during fiscal years 2022 and 2023 with respect to ROCE, and approximately one-half of the equity incentive awards eligible to vest in fiscal year 2023 for Mr. Miller are based on the Company's performance in fiscal year 2023 with respect to ROCE.
In addition, the Company's stock ownership and retention guidelines, as described in the "Corporate Governance" section of this Proxy Statement, require certain of our executives, including our Chief Executive Officer and Chief Financial Officer, to maintain a significant ownership stake in the Company, effectively linking their long-term interests with those of our shareholders. Our executives are also subject to the prohibitions in our insider trading policy with respect to short selling and other speculative and derivative trading activities as well as hedging transactions with respect to our stock. We continue to believe that these restrictions, coupled with our stock ownership guidelines and the structure of our incentive compensation programs, substantially align executive and shareholder interests.
Link Between Executive Pay and Performance
As noted above, to more effectively link executive pay with the financial performance of the Company, our Compensation Committee believes that a significant portion of our named executive officer compensation should be "at risk" based on objective and predetermined financial performance criteria. The compensation for which our named executive officers were eligible in fiscal year 2022 is indicative of our strong commitment to this pay-for-performance philosophy.
Approximately 44% of the aggregate target cash compensation for which Mr. Humphreys was eligible in the 2022 fiscal year was entirely at risk and contingent on the Company's financial performance. Approximately 27%, 33%, and 21% of the aggregate target cash compensation for which Ms. Walsh, Mr. Stillwell, and Mr. Encalada Arjona were, respectively, eligible in the 2022 fiscal year was entirely at risk and contingent on the Company's financial performance. During fiscal year 2022, Mr. Miller's cash compensation was neither at risk nor contingent on the Company's financial performance due to him joining the Company in April 2022 after over one- half of the fiscal year-based incentive period elapsed. However, for fiscal year 2023, a significant portion of Mr. Miller's target cash compensation will be at risk and contingent on the Company's financial performance. In addition, one-half of the equity compensation opportunities in which Ms. Walsh, Mr. Stillwell, Mr. Encalada Arjona, and Mr. Miller are, or were in the case of Ms. Walsh due to her voluntary resignation effective December 1, 2022, eligible to vest upon the filing of our Annual Report on Form 10-K for our fiscal year 2023 are entirely at risk and contingent on the Company's financial performance.
Delta Apparel, Inc. - 26 - Proxy Statement
Attracting, Retaining and Rewarding Executives
We seek to attract, retain and reward our executive officers by establishing compensation and benefit levels that are competitive relative to those offered by other companies in our industry of similar size, scope, complexity and/or other relevant characteristics. Each named executive officer's overall responsibility level within our organization, unique skills and capabilities, long-term leadership potential, and individual performance are also considered in establishing compensation. Historic pay levels and internal pay equity considerations also factor into our executive compensation decisions.
Executive Compensation Components
The principal components of compensation for our named executive officers are:
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Base salary; |
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Performance-based cash incentives;
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Performance-based and/or service-based equity incentives; and |
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Other employee benefits generally provided to all full-time employees in the United States. |
Although there is no pre-established policy or target for the allocation between specific compensation components, a significant portion of our named executive officers' annual total target compensation is generally intended to be contingent on Company performance relative to performance goals established for our cash and/or equity incentive plans. We believe this approach reflects our objective of aligning the interests of our executives and shareholders and rewarding our executives based on Company performance without encouraging excessive or unnecessary risk in the decisions made by our named executive officers.
Compensation Decision Roles
Compensation Committee
Our Compensation Committee reviews and approves all compensation for our named executive officers, authorizes all awards under our stock plans, and reports its decisions to our Board of Directors. The independent members of our Board also review and approve the compensation for our Chief Executive Officer. Our corporate human resources department, in consultation with our Chief Executive Officer, has traditionally provided our Compensation Committee with the recommended amounts for each element of compensation, historical levels for each compensation element, and other applicable information. While the recommendations of management provide valuable guidance, our Compensation Committee ultimately makes all final decisions with respect to compensation levels and structure for our named executive officers (except for the Chief Executive Officer, which is approved by both our Compensation Committee and our independent directors). Our Compensation Committee is empowered to engage outside advisors to provide additional information and analysis. Our Compensation Committee's charter lists the specific responsibilities of the committee and can be accessed without charge on the "Corporate Governance" tab of the "Investors" page of our website at www.deltaapparelinc.com.
During our fiscal year 2022, our Compensation Committee engaged compensation advisor FW Cook to conduct a market review of the compensation levels for the positions occupied by certain of our named executive officers. FW Cook utilized the following peer group of nine companies in its analysis:
G-III Apparel Group, Ltd.
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Gildan Activewear Inc.
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Movado Group, Inc.
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Oxford Industries, Inc. |
Rocky Brands, Inc. |
Superior Group of Companies, Inc. |
Unifi, Inc. |
Vera Bradley, Inc. |
Vince Holding Corp., Inc. |
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Our Compensation Committee’s goal is to award compensation that is properly balanced when all elements of potential compensation are considered. Our Compensation Committee believes that the aggregate components of our executive compensation program provide a total compensation level that is sufficient to attract, retain, motivate and reward our executive officers.
Delta Apparel, Inc. - 27 - Proxy Statement
Company Management
Company management is responsible for developing and maintaining an effective compensation program throughout the Company and for administering the compensation programs decided upon by our Compensation Committee. Our Chief Executive Officer annually reviews the performance of each of our other named executive officers and provides input regarding the compensation of such named executive officers that is factored into the recommendations to our Compensation Committee. Decisions regarding the non-equity compensation of other employees are made by management while the equity compensation of such employees is approved by the Compensation Committee.
Base Salary
Base salary is paid to our executives in cash on a semi-monthly basis throughout the year and provides a minimum, fixed level of compensation. The base salary for each named executive officer is guided by the relative salary levels for comparable positions in the apparel industry, as well as the assessed potential of the executive, the executive's scope of responsibility, personal performance, experience and length of service to the Company. Each executive officer's base salary is reviewed annually and generally may be adjusted to reflect the Company's financial performance, any change in the executive officer's responsibilities, the executive officer's overall performance, inflation and other applicable factors.
During our 2022 fiscal year, Mr. Humphreys' base salary was increased from $780,000 to $850,000, and Mr. Stillwell's base salary was increased from $325,000 to $400,000. These salary increases are consistent with the employment agreement terms applicable to the respective executive. Mr. Humphreys' employment agreement with the Company provides that he will receive a base annual salary of at least $850,000, subject to upward adjustment at the discretion of our independent directors. Mr. Stillwell's employment agreement with the Company provides that he will receive a base salary of at least $315,000, subject to upward adjustment. Each of Ms. Walsh's (prior to her resignation) and Mr. Miller's employment agreements with the Company provide that they will receive a base annual salary of at least $400,000 and $450,000, respectively, with each subject to upward adjustment. Mr. Encalada Arjona, who does not have an employment agreement with the Company, had a base salary of $300,000 for fiscal year 2022.
Base salaries for each of our named executive officers as of our 2022 fiscal year ended October 1, 2022, were as follows:
Named Executive Officer Base Salaries
Fiscal Year Ended October 1, 2022
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Executive Officer
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Base Salary
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Robert W. Humphreys
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$850,000
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Matthew J. Miller |
$450,000 |
Simone C. Walsh |
$400,000 |
Jeffery N. Stillwell
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$400,000
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Carlos E. Encalada Arjona |
$300,000 |
Annual Cash Incentive Compensation (AIC)
Our named executive officers are eligible for annual cash incentive compensation (“AIC”) that provides for the payment of cash bonuses pursuant to our Short-Term Incentive Compensation Plan. Our Short-Term Incentive Compensation Plan is designed to motivate our named executive officers and other participating employees to achieve and exceed objective annual business performance goals and to reward those employees based on such achievement. Our Compensation Committee certifies that the performance goals have been achieved prior to the payment of any AIC. Our Short-Term Incentive Compensation Plan states that no participant shall receive compensation pursuant to the plan in excess of $1.5 million during any calendar year. Our Compensation Committee may, at its discretion, adjust the actual AIC paid.
Target Value
The overall AIC opportunity for each of our named executive officers varies depending upon the executive's position, with the target value defined as a certain dollar amount per individual. Our Compensation Committee considers compensation recommendations and information provided by our corporate human resources department, information regarding each executive's individual performance and responsibilities, and other applicable data to determine the appropriate target value for each executive. Prior to its amendment in January 2022, Mr. Humphreys' employment agreement with the Company provided that he would participate in the Company’s Short-Term Incentive Compensation Plan with a target value of $650,000 during fiscal year 2022. As previously disclosed on a Current Report on Form 8-K we filed with the SEC on January 18, 2022, Mr. Humphreys' target value for fiscal year 2023 will be increased to $750,000 per the terms of the most recently amended employment agreement. Ms. Walsh's agreement with the Company provided that she would participate with a target value of $150,000 for fiscal year 2022.
Delta Apparel, Inc. - 28 - Proxy Statement
The target AIC values for each of our named executive officers based on the Company's performance as a whole, or consolidated performance, in fiscal year 2022 were as follows:
Consolidated AIC Plan Target Values
Fiscal Year 2022
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Target Value
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Robert W. Humphreys
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$650,000
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Matthew J. Miller
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N/A(1)
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Simone C. Walsh |
$150,000 |
Jeffery N. Stillwell
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$30,000
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Carlos E. Encalada Arjona |
$30,000 |
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During fiscal year 2022, Mr. Miller did not participate in our Short-Term Incentive Compensation Plan due to joining the Company in April 2022 after over one-half of the fiscal year-based incentive period elapsed. However, in an effort to attract and retain executive management talent, our Compensation Committee approved a service-based cash incentive opportunity of $200,000 for Mr. Miller contingent upon him remaining employed with the Company through the filing of our Annual Report on Form 10-K for our 2022 fiscal year. For fiscal year 2023, Mr. Miller's employment agreement with the Company provides that he will participate in the Company's Short-Term Incentive Compensation Plan with a target value of $430,000. |
We believe that focusing the executive team as a group on common financial performance goals results in greater long-term success for the Company. With the exception of Mr. Miller during fiscal year 2022 due to him joining the Company in April 2022 after over one-half of the fiscal year-based incentive period elapsed, our named executive officers each had cash incentive opportunities conditioned on the Company's achievement of objective financial goals. Under the AIC plan approved by our Compensation Committee for the 2022 fiscal year based on the Company's consolidated performance, our named executive officers' cash incentive opportunities were based on the Company's EBIT, along with a multiplier based on the Company's year-over-year sales growth (or decline) from fiscal year 2021 to 2022.
In establishing the EBIT threshold required to earn the target AIC value, our Compensation Committee considered, among other things, the consolidated operating performance across the business anticipated for the 2022 fiscal year. Our Compensation Committee approved scaled target value achievement for EBIT results between the minimum and maximum EBIT thresholds and, if minimum performance goals were not met by the Company, there was no guaranteed cash incentive payment.
Consolidated AIC Plan Results
The 2022 fiscal year AIC payments to each of our named executive officers based on the Company's consolidated EBIT and year-over-year sales growth (or decline) were as follows:
Consolidated AIC Plan Payments
Fiscal Year 2022
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Target Value
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Payment
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Robert W. Humphreys
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$650,000
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$1,500,000
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Matthew J. Miller |
N/A
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N/A
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Simone C. Walsh
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$150,000
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$375,000
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Jeffery N. Stillwell
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$30,000
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$75,000
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Carlos E. Encalada Arjona |
$30,000 |
$75,000 |
Activewear AIC Plan
In addition to the above-referenced AIC opportunity based on the consolidated performance of the Company, Mr. Encalada Arjona was eligible for an AIC opportunity with a target value of $50,000 based solely on the performance of our Activewear business in fiscal year 2022 due to the substantial time that Mr. Encalada Arjona was expected to devote to our Activewear business during fiscal year 2022 in connection with his leadership role as Vice President of Manufacturing. Mr. Encalada Arjona's Activewear-specific AIC opportunity was based entirely on the EBIT achieved by our Activewear business in fiscal year 2022. If minimum EBIT thresholds were not met by our Activewear business, there was no guaranteed cash incentive payment for Mr. Encalada Arjona under the AIC opportunity.
Delta Apparel, Inc. - 29 - Proxy Statement
Salt Life AIC Plan
In addition to the above-referenced AIC opportunity based on the consolidated performance of the Company, Mr. Stillwell was eligible for an additional AIC opportunity with a target value of $130,000 based solely on the performance of our Salt Life business in fiscal year 2022. The Compensation Committee determined that it was in the best interest of the Company to provide Mr. Stillwell with this additional AIC opportunity due to the substantial time that Mr. Stillwell was expected to devote to our Salt Life business during fiscal year 2022 in connection with his leadership role in that business as President of our Salt Life Group segment. Mr. Stillwell's Salt Life-specific AIC opportunity was based on the EBIT achieved by our Salt Life business in fiscal year 2022, along with a multiplier based on Salt Life's year-over-year sales growth (or decline) from fiscal year 2021 to 2022. If minimum EBIT thresholds were not met by our Salt Life business, there was no guaranteed cash incentive payment for Mr. Stillwell.
Equity Incentive Compensation
Our named executive officers receive equity incentive compensation designed to provide each officer with a significant incentive to manage the Company from the perspective of an owner with an equity stake in the business and to link their compensation to the Company's long-term financial success. All equity awards are granted by our Compensation Committee with the aim of creating a meaningful opportunity for stock ownership based upon the executive’s current position and level of responsibility, the assessed potential of the executive, the executive’s performance, the executive’s other forms of compensation and total compensation, any other factors that are deemed relevant to accomplish the long-term goals of the Company and, as appropriate, the recommendation of the Chief Executive Officer and/or corporate human resources function.
All stock-based awards granted to our named executive officers in fiscal year 2022 were made under the Delta Apparel, Inc. 2020 Stock Plan ("2020 Stock Plan"), which was approved by our shareholders at our February 6, 2020, annual meeting of shareholders. Under the 2020 Stock Plan, our Compensation Committee has the authority to determine to whom awards may be granted and the size and type of each award and manner in which such awards will vest. The awards available consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, and other stock or cash awards. The 2020 Stock Plan limits the number of shares that may be covered by awards to any participant in a given calendar year and also limits the aggregate awards of restricted stock, restricted stock units and performance stock granted in a given calendar year.
With limited exceptions (such as awards intended to attract executive management talent and/or serve as employment retention vehicles), our general practice with respect to equity awards to our named executive officers other than our Chief Executive Officer has been to make regular equity incentive grants every other year that vest on a two-year schedule based on service and objective performance criteria. Consistent with this practice, our Compensation Committee made equity awards to Mr. Stillwell and Mr. Encalada Arjona on September 29, 2019, that were eligible to vest on the filing of our Annual Report on Form 10-K with the SEC for our fiscal year ended October 2, 2021, based on service and objective performance criteria, and also made equity awards to Mr. Stillwell and Mr. Encalada Arjona on October 3, 2021, and Ms. Walsh on December 15, 2021, that are, or were in the case of Ms. Walsh prior to her voluntary resignation from employment with the Company effective December 1, 2022, eligible to vest on the filing of our Annual Report on Form 10-K with the SEC for our fiscal year ending September 30, 2023, based on service and objective performance criteria. Our Compensation Committee made similar service-based and performance-based equity awards to Mr. Miller that vest on a one-year schedule and are discussed in detail in the following paragraphs. For fiscal years 2021 and 2022, Mr. Humphreys received equity awards that are eligible to vest on a one-year schedule based solely on service criteria, and these equity awards are also discussed in detail in the following paragraphs.
Chief Executive Officer
On May 11, 2020, the Company and Mr. Humphreys entered into a fifth amendment to Mr. Humphreys' employment agreement in connection with which Mr. Humphreys received a grant of 100,000 service-based restricted stock units eligible to vest in fiscal years 2021 and 2022 subject to Mr. Humphreys' continued service from the grant date until the vesting date. One-half of such service-based awards were eligible to vest upon the filing of our Annual Report on Form 10-K for our 2021 fiscal year and the other half of such service-based awards were eligible to vest upon the filing of our Annual Report on Form 10-K for our 2022 fiscal year.
On January 13, 2022, the Company and Mr. Humphreys entered into a sixth amendment to Mr. Humphreys' employment agreement in connection with which Mr. Humphreys received a grant of 84,000 service-based restricted stock units eligible to vest in fiscal years 2023 and 2024 subject to Mr. Humphreys' continued service from the grant date until the vesting date. One-half of such service-based awards are eligible to vest upon the filing of our Annual Report on Form 10-K for our 2023 fiscal year and the other half of such service-based awards are eligible to vest upon the filing of our Annual Report on Form 10-K for our 2024 fiscal year. Any vested units are payable in shares of Company stock equal to one-half of the value of the aggregate number of such vested units and a cash payment equal to one-half of the value of the aggregate number of such vested units.
Delta Apparel, Inc. - 30 - Proxy Statement
With respect to the 50,000 service-based restricted stock units in which Mr. Humphreys vested in connection with his continued service until the vesting date in fiscal year 2021, Mr. Humphreys received shares of Company stock equal to the number of such vested units. With respect to the 50,000 service-based restricted stock units in which Mr. Humphreys vested in connection with his continued service until the vesting date in fiscal year 2022, Mr. Humphreys received shares of Company stock equal to the number of such vested units.
Other Named Executive Officers
On February 5, 2020, Mr. Stillwell was awarded 16,000 service-based restricted stock units that were eligible to vest if Mr. Stillwell remained employed with the Company through the filing of our Annual Report on Form 10-K with the SEC for our 2022 fiscal year. These service-based awards were intended to serve as an employment retention vehicle and to further align Mr. Stillwell's interests with those of our shareholders. Mr. Stillwell satisfied the applicable service criteria and the vested units were paid in shares of Company stock equal to the value of the aggregate number of such vested units.
On October 3, 2021, Mr. Stillwell was awarded 5,000 service-based restricted stock units and 5,000 performance units, Mr. Encalada Arjona was awarded 2,500 service-based restricted stock units and 2,500 performance units, and on December 15, 2021, Ms. Walsh was awarded 5,000 service-based restricted stock units and 5,000 performance units. The service-based awards consist of restricted stock units that are eligible to vest on the filing of our Annual Report on Form 10-K with the SEC for our fiscal year ending September 30, 2023, subject to each named executive officer's continued service from the grant date until the vesting date. The performance units awarded are eligible to vest based on our average ROCE for the two-year period ending September 30, 2023, with pro rata unit vesting applicable if the actual two-year average ROCE is between the minimum and maximum ROCE performance thresholds. Any vested units are payable in shares of Company stock equal to one-half of the value of the aggregate number of such vested units and a cash payment equal to one-half of the value of the aggregate number of such vested units. No tax assistance is provided under this award, but each executive may elect for the Company to deduct from any shares vesting an amount sufficient to satisfy tax liability. Ms. Walsh subsequently forfeited her service-based restricted stock units and performance units due to her December 1, 2022, voluntary resignation from the Company.
On December 15, 2021, Ms. Walsh was also awarded 5,000 service-based restricted stock units which were eligible to vest if she remained employed with the Company through the filing of our Annual Report on Form 10-K with the SEC for our 2022 fiscal year. These service-based awards were intended to serve as an employment retention vehicle and to further align Ms. Walsh's interests with those of our shareholders. Ms. Walsh satisfied the applicable service criteria and the vested units were paid in shares of Company stock equal to the value of the aggregate number of such vested units. Lastly, on December 15, 2021, Ms. Walsh was awarded 13,000 service-based restricted stock units, which were eligible to vest if she remained employed with the Company through the filing of our Annual Report on Form 10-K with the SEC for our 2024 fiscal year. Ms. Walsh subsequently forfeited her 13,000 service-based restricted stock units due to her December 1, 2022, voluntary resignation from the Company.
On January 13, 2022, Mr. Stillwell and Mr. Encalada Arjona were each awarded 13,000 service-based restricted stock units, all of which are eligible to vest if each executive remains employed with the Company through the filing of our Annual Report on Form 10-K with the SEC for our 2024 fiscal year. These service-based awards are intended to serve as an employment retention vehicle and to further align each executive's interests with those of our shareholders. Any vested units will be paid in shares of Company stock equal to the value of the aggregate number of such vested units. No tax assistance is provided under this award, but each executive may elect for the Company to deduct from any shares vesting an amount sufficient to satisfy tax liability.
On April 25, 2022, Mr. Miller was awarded 10,000 service-based restricted stock units which were eligible to vest if he remained employed with the Company through the filing of our Annual Report on Form 10-K with the SEC for our 2022 fiscal year. These service-based awards were intended to serve as an employment retention vehicle and to further align Mr. Miller's interests with those of our shareholders. Mr. Miller satisfied the applicable service criteria and the vested units were paid in shares of Company stock equal to the value of the aggregate number of such vested units. No tax assistance was provided under this award, but Mr. Miller had the option to elect for the Company to deduct from any shares vesting an amount sufficient to satisfy tax liability. Also on April 25, 2022, Mr. Miller was awarded 10,000 service-based restricted stock units and 10,000 performance units. The service-based awards consist of restricted stock units that are eligible to vest on the filing of our Annual Report on Form 10-K with the SEC for our 2023 fiscal year, subject to Mr. Miller's continued service from the grant date until the vesting date. The performance units awarded are eligible to vest based on our ROCE for the 2023 fiscal year, with pro rata unit vesting applicable if the actual ROCE is between the minimum and maximum ROCE performance thresholds. Any vested units are payable in shares of Company stock equal to one-half of the value of the aggregate number of such vested units and a cash payment equal to one-half of the value of the aggregate number of such vested units. No tax assistance is provided under this award, but Mr. Miller may elect for the Company to deduct from any shares vesting an amount sufficient to satisfy tax liability.
Lastly, Mr. Miller was awarded an additional 10,000 service-based restricted stock units and 10,000 performance units on April 25, 2022. The service-based awards are eligible to vest on the filing of our Annual Report on Form 10-K with the SEC for our 2024 fiscal year, subject to Mr. Miller's continued service from the grant date until the vesting date. The performance units awarded are eligible to vest based on our ROCE for the 2024 fiscal year, with pro rata unit vesting applicable if the actual ROCE is between the minimum and maximum ROCE performance thresholds. Any vested units are payable in shares of Company stock equal to one-half of the value of the aggregate number of such vested units and a cash payment equal to one-half of the value of the aggregate number of such vested units. No tax assistance is provided under this award, but Mr. Miller may elect for the Company to deduct from any shares vesting an amount sufficient to satisfy tax liability.
Delta Apparel, Inc. - 31 - Proxy Statement
Other Employee Benefits
Excluding Mr. Encalada Arjona, who receives the same employee benefits generally available to all of our full-time employees in Mexico, our named executive officers receive the same employee benefits generally available to all of our full-time employees in the United States, including health, dental and vision insurance and eligibility to participate in the Company's Savings and Investment Plan established pursuant to Internal Revenue Code ("IRC") Section 401(k) ("401(k) Plan"). We provide our named executive officers with the same 401(k) Plan matching benefit offered to all participating employees of the Company. We do not maintain any deferred compensation or supplemental executive retirement plans.
Employment Agreements
We compete for executive talent and believe that agreements providing severance and other protections play an important role in attracting and retaining key executives. With the exception of Mr. Encalada Arjona, we have entered into employment agreements with all named executive officers and other selected senior executives and key managers.
Robert W. Humphreys, our Chairman and Chief Executive Officer, has an employment agreement with the Company dated June 12, 2009, which was subsequently amended on August 17, 2011, June 6, 2012, December 5, 2014, April 27, 2017, May 11, 2020, and January 13, 2022. Mr. Miller and Mr. Stillwell are each party to an employment agreement with the Company dated April 4, 2022, and January 1, 2022, respectively.
Employment Agreement with Chief Executive Officer
The base annual salary and base participation levels in the Company’s Short-Term Incentive Compensation Plan to which Mr. Humphreys was entitled in fiscal year 2022 pursuant to his employment agreement are set forth in the above sections entitled "Base Salary" and "Annual Cash Incentive Compensation (AIC)", respectively. Mr. Humphreys' employment agreement also provides that his base participation level in the Short-Term Incentive Compensation Plan for fiscal years 2023 and 2024 will be $750,000, with a maximum payout of $1,500,000 for any single fiscal year. The calculation of Mr. Humphreys’ compensation under the Short-Term Incentive Compensation Plan will be the same as conducted annually for the other participants in the plan.
Mr. Humphreys' employment agreement provides that he is eligible to participate in the 2020 Stock Plan. The equity award opportunity to which Mr. Humphreys was entitled in fiscal year 2022 and the equity award opportunities to which Mr. Humphreys is entitled in fiscal years 2023 and 2024, all pursuant to his employment agreement, are set forth in the above section entitled "Equity Incentive Compensation". With respect to all of Mr. Humphreys' outstanding equity awards, in the event that he is terminated other than for Cause (as defined in the agreement), Mr. Humphreys will receive the full equity award for the fiscal year in which his employment is terminated.
Mr. Humphreys is entitled to receive such perquisites as may be provided by the Company from time to time to executives in comparable positions, if any, and such other benefits as are customarily available to executives of the Company.
Mr. Humphreys' agreement requires that he give the Company 180 days’ prior written notice of his voluntary termination of employment. The Company may terminate Mr. Humphreys’ employment with or without cause upon written notice. If the Company terminates Mr. Humphreys’ employment without Cause (as defined in the agreement) or Mr. Humphreys terminates his employment because of a material breach of the agreement by the Company, the Company, for a period of 12 months, will continue to pay Mr. Humphreys’ base salary, will pay an amount equal to 100% of his AIC amount received for the most recent full fiscal year prior to termination, and will continue to provide the life, health, and disability benefits provided to other executives during such 12-month period. The agreement provides for six months of base salary continuation to Mr. Humphreys’ estate following his death and for base salary and benefits continuation for six months following termination of employment because of disability.
If within one year of a Change of Control (as defined in the agreement), Mr. Humphreys terminates his employment for Good Reason (as defined in the agreement) or the Company terminates Mr. Humphreys’ employment for any reason other than Cause (as defined in the agreement), death, or disability, then the Company must pay to Mr. Humphreys (i) an amount equal to his annual base salary in effect on the termination date, (ii) an amount equal to the full amount of the cash incentive compensation received for the most recent full fiscal year prior to termination, (iii) all benefits under the Company’s various welfare and benefit plans for 12 months after the date of termination at levels and rates substantially equal to those applicable to him prior to such termination, and (iv) outplacement assistance.
Mr. Humphreys' agreement contains an IRC Section 280G “golden parachute payment savings clause” that reduces severance payments if the total amount of payments he would receive from the Company would require the Company to report an excess parachute payment.
Delta Apparel, Inc. - 32 - Proxy Statement
During the term of Mr. Humphreys’ agreement and for 12 months from the date of the termination of his employment, Mr. Humphreys is generally prohibited from directly or indirectly competing with the Company by providing to any company that is in a competing business services substantially similar to the services provided by him at the time of termination. A competing business is defined as any business that engages, in whole or in part, in the manufacturing or marketing of activewear apparel in the United States. The agreement also includes non-solicitation provisions that apply to employees, customers and suppliers during the term of Mr. Humphreys’ employment and generally for a period of two years from expiration of the term of the agreement or termination of employment, as well as non-disclosure and non-disparagement provisions.
Mr. Humphreys' agreement continues until the date of the filing with the SEC of our Annual Report on Form 10-K for our fiscal year 2024.
Employment Agreements with Chief Financial Officer and President, Delta Group
The Company's employment agreements with Ms. Walsh and Mr. Miller are essentially identical with the exception of job titles, minimum base salaries set forth in the above section entitled "Base Salary", fiscal year 2022 cash incentive opportunities and bonuses, and equity award provisions, all of which are discussed below.
Prior to her voluntary resignation effective December 1, 2022, the Company's employment agreement with Ms. Walsh entitled her to (i) the minimum base salary set forth in the above section entitled "Base Salary" (subject to upward adjustment), (ii) a one-time cash signing bonus of $100,000, (iii) participate in the Company’s Short-Term Incentive Compensation Plan at the same level of participation as other similarly-situated executives, with a target value of $150,000 for fiscal year 2022, as discussed above, and (iv) receive such other benefits as are generally available to executives of the Company, including, without limitation, paid time off and life, health and disability benefits. The calculation of Ms. Walsh’s compensation under the Short-Term Incentive Compensation Plan was the same as conducted annually for the other participants in the plan.
Ms. Walsh's employment agreement also provided that she was eligible to participate in the 2020 Stock Plan. The equity award opportunity to which Ms. Walsh was entitled in fiscal year 2022 and was entitled to in fiscal years 2023 and 2024 pursuant to her employment agreement are set forth in the above section entitled "Equity Incentive Compensation". With respect to all of Ms. Walsh's outstanding equity awards, in the event that she was terminated other than for Cause (as defined in the agreement), and subject to satisfaction of the applicable performance criteria, Ms. Walsh would receive the full equity award for the fiscal year in which her employment is terminated.
The Company's employment agreement with Mr. Miller entitles him to (i) the minimum base salary set forth in the above section entitled "Base Salary" (subject to upward adjustment), (ii) a one-time service-based cash incentive opportunity of $200,000 contingent upon him remaining employed with the Company through the filing of our Annual Report on Form 10-K for our 2022 fiscal year, (iii) participate in the Company’s Short-Term Incentive Compensation Plan at the same level of participation as other similarly-situated executives, with a target value not less than $400,000 for fiscal years 2023 and 2024, and (iv) receive such other benefits as are generally available to executives of the Company, including, without limitation, paid time off and life, health and disability benefits. The calculation of Mr. Miller's compensation under the Short-Term Incentive Compensation Plan will be the same as conducted annually for the other participants in the plan.
In each of Ms. Walsh's and Mr. Miller's agreements, if the executive passes away during the term of his or her agreement, the Company will continue to pay the base salary in effect at the time of death to his or her estate for six months. If the executive becomes disabled (as defined in the agreement) during the term of his or her agreement and the Company terminates his or her employment, he or she will continue to receive base salary and benefits for a period of six months from the date of termination.
The Company may terminate either executive's employment with or without cause upon written notice, and the executive may terminate his or her employment with the Company upon 60 days' prior written notice. If the Company terminates either executive's employment without Cause (as defined in his or her agreement) or does not extend the employment relationship after the expiration of the agreement, or the executive terminates his or her employment as a result of an uncured material breach of the agreement by the Company, and in each case no Change of Control (as defined in the agreement) has occurred, the executive is entitled to receive an amount equal to his or her annual base salary and the cash incentive compensation he or she received for the most recent fiscal year prior to termination, and, to the extent permitted under the applicable benefit plans and IRC Section 409A, group life and disability coverage and Company-funded medical insurance under COBRA (less the amounts active employees are required to pay for medical insurance) for 12 months. The receipt of these amounts and benefits is conditioned upon the executive's execution of a release meeting specified criteria.
If within one year after a Change of Control (as defined in the agreement), the executive terminates employment for Good Reason (as defined in the agreement) or the Company terminates the executive's s employment for any reason other than Cause (as defined in the agreement), death or disability, the executive is entitled to receive a lump-sum amount equal to his or her annual base salary as of the date of termination and the greater of the executive's base participation level in the Company’s Short-Term Incentive Compensation Plan or the cash incentive compensation the executive received for the most recent fiscal year prior to termination. The Company will also provide outplacement assistance and, to the extent permitted under the applicable benefit plans and IRC Section 409A, Company-funded medical insurance under COBRA and, as available, continued coverage under the Company's various other welfare and benefit plans in effect at the time of termination for 12 months. The foregoing termination payments are subject to reduction to avoid constituting an "excess parachute payment" under IRC Section 280G, and each executive's agreement conditions the receipt of these amounts and benefits upon his or her execution of a release meeting specified criteria.
Delta Apparel, Inc. - 33 - Proxy Statement
During the term of each executive's agreement and for a period of four months after the expiration of his or her agreement or termination of employment, each executive is subject to non-competition restrictions. In addition, during the term of each executive's agreement and for a period of one year after expiration of his or her agreement or termination of employment, each executive is subject to non-solicitation restrictions.
The term for each executive’s agreement expires on December 31, 2024, and each agreement also restricts the executive from disparaging the Company and from disclosing the Company's confidential information.
Employment Agreement with President, Salt Life Group
The Company's employment agreement with Mr. Stillwell entitles the executive to (i) the minimum base salary set forth in the above section entitled "Base Salary" (subject to upward adjustment), (ii) participate in the Company’s Short-Term Incentive Compensation Plan, and (iii) receive such other benefits as are generally available to executives of the Company, including, without limitation, paid time off and life, health and disability benefits. The term of Mr. Stillwell's agreement expires on December 31, 2024.
If the executive passes away during the term of his agreement, the Company will continue to pay the base salary in effect at the time of death to his estate for six months. If the executive becomes disabled (as defined in the agreement) during the term of his agreement and the Company terminates his employment, he will continue to receive base salary and benefits for a period of six months from the date of termination.
The Company may terminate the executive's employment with or without cause upon written notice, and the executive may terminate employment with the Company upon 60 days' prior written notice. If the Company terminates the executive's employment without Cause (as defined in the agreement), or the executive terminates employment as a result of an uncured material breach of the agreement by the Company, and in each case no Change of Control (as defined in the agreement) has occurred, the executive is entitled to receive an amount equal to his annual base salary and the cash incentive compensation he received for the most recent fiscal year prior to termination, and, to the extent permitted under the applicable benefit plans and IRC Section 409A, group life and disability coverage and Company-funded medical insurance under COBRA (less the amounts active employees are required to pay for medical insurance) for 12 months. The receipt of these amounts and benefits is conditioned upon the executive's execution of a release meeting specified criteria.
If within one year after a Change of Control (as defined in the agreement), the executive terminates his employment for Good Reason (as defined in the agreement) or the Company terminates the executive's employment for any reason other than Cause (as defined in the agreement), death or disability, the executive is entitled to receive a lump-sum amount equal to his annual base salary as of the date of termination and the cash incentive compensation he received for the most recent fiscal year prior to his termination. The Company will also provide outplacement assistance and, to the extent permitted under the applicable benefit plans and IRC Section 409A, Company-funded medical insurance under COBRA and, as available, continued coverage under the Company's various other welfare and benefit plans in effect at the time of termination for 12 months. The foregoing termination payments are subject to reduction to avoid constituting an "excess parachute payment" under IRC Section 280G, and the executive's agreement conditions the receipt of these amounts and benefits upon his execution of a release meeting specified criteria.
During the term of Mr. Stillwell's agreement and for a period of four months after the expiration of his agreement or termination of his employment, he is subject to non-competition restrictions. In addition, during the term of the executive's agreement and for a period of one year after expiration of his agreement or termination of his employment, he is subject to non-solicitation restrictions.
Mr. Stillwell's agreement also restricts him from disparaging the Company and from disclosing the Company's confidential information.
Delta Apparel, Inc. - 34 - Proxy Statement
COMPENSATION TABLES
Summary Compensation Table
The following table provides summary information concerning the compensation paid to or earned by our named executive officers for each of the last two completed fiscal years. Narrative disclosure discussing our named executive officers' base salaries, annual cash incentive compensation and equity incentive compensation is set forth on pages 28-32 of the Executive Compensation section and is incorporated herein by reference.
Summary Compensation
Fiscal Years 2022 and 2021
|
|
|
|
Salary
|
|
Bonus
|
Stock
Awards
|
|
Option
Awards
|
|
|
Non-Equity Incentive Plan Compensation
|
|
All Other Compensation
|
|
Total
|
|
Name and Principal Position
|
Year
|
|
($) |
|
($) |
($) (1) |
|
($) |
|
|
($) (2) |
|
($) (3) |
|
($) |
|
Robert W. Humphreys
|
2022
|
|
$ |
832,500 |
|
$ |
— |
|
$ |
2,764,440 |
(4) |
|
$ |
— |
|
$
|
1,500,000 |
|
|
$ |
9,719 |
|
$ |
5,106,659 |
|
Chairman and Chief Executive Officer
|
2021 |
|
$ |
780,000 |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
1,500,000 |
|
|
$ |
11,050 |
|
$ |
2,291,050 |
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Simone C. Walsh*
|
2022
|
|
$ |
316,667 |
|
$ |
100,000 |
(5) |
$ |
779,800 |
(6) |
|
$ |
— |
|
$ |
375,000 |
|
|
$ |
867
|
|
$ |
1,572,334 |
|
Chief Financial Officer
|
2021
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matthew J. Miller
|
2022 |
|
$ |
187,500 |
|
$ |
250,000 |
(7) |
$ |
1,507,500 |
(8) |
|
$ |
— |
|
$ |
— |
|
|
$ |
3,750 |
|
$ |
1,948,750
|
|
President, Delta Group |
2021 |
|
$ |
— |
|
|
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffery N. Stillwell |
2022 |
|
$ |
334,375 |
|
$ |
— |
|
$ |
702,330 |
(9) |
|
$ |
— |
|
$ |
400,000 |
|
|
$ |
10,250
|
|
$ |
1,446,955 |
|
President, Salt Life Group
|
2021 |
|
$ |
325,000 |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
400,000 |
|
|
$ |
9,750 |
|
$ |
734,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlos E. Encalada Arjona |
2022 |
|
$ |
300,000 |
|
$ |
— |
|
$ |
137,250 |
(10) |
|
$ |
— |
|
$ |
200,000 |
|
|
$ |
—
|
|
$ |
637,250 |
|
Vice President of Manufacturing |
2021 |
|
$ |
258,000 |
|
$ |
— |
|
$ |
— |
|
|
$ |
— |
|
$ |
200,000 |
|
|
$ |
—
|
|
$ |
458,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts do not reflect compensation actually received by the named executive officer. Instead, the amounts shown are the aggregate grant date fair value of restricted stock units and/or performance units computed in accordance with FASB ASC Topic 718, and which the executive is or was eligible to earn in ensuing periods based on service and/or the Company's achievement of performance results. The assumptions used for purposes of the valuation of the stock awards are described more fully in Note 12 of the financial statements in our Annual Report on Form 10-K for the fiscal year ended October 1, 2022, as filed with the SEC.
|
(2)
|
This column reflects the amounts earned by the named executive officer in the applicable periods pursuant to the Company’s Short-Term Incentive Compensation Plan under the consolidated AIC plan opportunity. For Mr. Stillwell, this amount also includes the payment earned pursuant to his AIC plan opportunity based on the performance of our Salt Life business set forth in the above section entitled "Annual Cash Incentive Compensation (AIC)". For Mr. Encalada Arjona, this amount also includes the payment earned pursuant to his AIC plan opportunity based on the performance of our Activewear business set forth in the above section entitled "Annual Cash Incentive Compensation (AIC)."
|
(3)
|
Named executive officers are eligible for health insurance and 401(k) Plan benefits at the same level and subject to the same conditions as provided to all other eligible employees. The amounts shown represent the Company’s matching contributions made to each named executive officer’s 401(k) Plan account. Perquisites to each of our named executive officers did not exceed $10,000 in each of the last two completed fiscal years.
|
(4) |
The amount shown reflects the grant date fair value of 84,000 service-based restricted stock units granted on January 13, 2022, that have not yet been realized by Mr. Humphreys and are eligible to vest upon the filing of our Annual Report on Form 10-K for our 2023 and 2024 fiscal years. |
(5) |
The amount shown reflects a one-time cash signing bonus provided at the time of Ms. Walsh's initial hire pursuant to her employment agreement. |
(6) |
The amount shown reflects the aggregate grant date fair value of three separate equity awards each granted on December 15, 2021, only one of which was realized by Ms. Walsh. The award that was realized had a grant date fair value of $139,900 and was a service-based award that covered the period ended October 1, 2022, with a vesting date value of $69,950. The second award, which was forfeited by Ms. Walsh, had a grant date fair value of $278,500 and covered the approximate two-year period ending September 30, 2023. This award contained both a service-based and performance-based component, with the performance unit awards using the probable outcome of the performance conditions as of the grant date, which was assumed to be the target amount. If the amount of this award was calculated assuming the highest level of performance conditions was met, the grant date fair value of this award to Ms. Walsh would have been $348,125. The third award, which was forfeited by Ms. Walsh, was a service-based award and covered an approximately three-year period. This award had a grant date fair value of $362,050. As a result of her December 1, 2022, voluntary resignation from the Company, Ms. Walsh is no longer eligible for the second and third awards. |
Delta Apparel, Inc. - 35 - Proxy Statement
(7) |
The amount shown reflects a one-time $50,000 discretionary cash bonus provided to Mr. Miller for the 2022 fiscal year along with payment of the service-based cash incentive of $200,000 for Mr. Miller contingent upon him remaining employed with the Company through the filing of our Annual Report on Form 10-K for our 2022 fiscal year, which is discussed in detail in the Executive Compensation section of this Proxy Statement. |
(8) |
The amount shown reflects the aggregate grant date fair value of three separate equity awards each granted on April 25, 2022, only one of which has been realized by Mr. Miller. The award that has been realized had a grant date fair value of $301,500 and was a service-based award that covered the period ended October 1, 2022, with a vesting date value of $139,500. The second award, which has not been realized by Mr. Miller, had a grant date fair value of $603,000 and covers the period ending September 30, 2023. This award contains both a service-based and performance-based component, with the performance unit awards using the probable outcome of the performance conditions as of the grant date, which was assumed to be the target amount. If the amount of this award was calculated assuming the highest level of performance conditions was met, the grant date fair value of this award to Mr. Miller would have been $753,750. The third award, which has not been realized by Mr. Miller, had a grant date fair value of $603,000 and covers the period ending September 28, 2024. This award contains both a service-based and performance-based component, with the performance unit awards using the probable outcome of the performance conditions as of the grant date, which was assumed to be the target amount. If the amount of this award was calculated assuming the highest level of performance conditions was met, the grant date fair value of this award to Mr. Miller would have been $753,750. |
(9) |
The amount shown reflects the aggregate grant date fair value of two separate equity awards, neither of which have been realized by Mr. Stillwell. One award has a grant date fair value of $274,500 and covers the two-year period ending September 30, 2023. This award contains both a service-based and performance-based component, with the performance unit awards using the probable outcome of the performance conditions as of the grant date, which was assumed to be the target amount. If the amount of this award was calculated assuming the highest level of performance conditions was met, the grant date fair value of this award to Mr. Stillwell would have been $343,125. The second award included in the amount shown is a service-based award and covers an approximately three-year period. This award has a grant date fair value of $427,830, and Mr. Stillwell is eligible to vest in it if he remains employed with the Company through the filing of our Annual Report on Form 10-K with the SEC for our 2024 fiscal year. |
(10) |
This equity award not yet realized by Mr. Encalada Arjona has a grant date fair value of $137,250 and covers the two-year period ending September 30, 2023. This award contains both a service-based and performance-based component, with the performance unit awards using the probable outcome of the performance conditions as of the grant date, which was assumed to be the target amount. If the amount of this award was calculated assuming the highest level of performance conditions was met, the grant date fair value of this award to Mr. Encalada Arjona would have been $171,563. |
* |
Ms. Walsh voluntarily resigned as Vice President, Chief Financial Officer and Treasurer of the Company effective December 1, 2022. |
Delta Apparel, Inc. - 36 - Proxy Statement
Outstanding Equity Awards
The following table provides information concerning unvested equity awards (including restricted stock units and performance units) granted to our named executive officers that were outstanding as of October 1, 2022, the last day of our 2022 fiscal year.
Outstanding Equity Awards
Fiscal Year Ended October 1, 2022
|
Stock Awards
|
|
Number of Shares or Units of Stock That Have Not Vested
|
|
Market Value of Shares or Units of Stock That Have Not Vested
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
|
Name
|
(#)
|
|
($) (1)
|
|
(#) |
|
|
($) (1)
|
Robert W. Humphreys |
50,000 |
(2) |
|
|
$ |
699,500 |
|
|
— |
|
|
$ |
— |
|
|
42,000 |
(3) |
|
|
$ |
587,580 |
|
|
— |
|
|
$ |
— |
|
|
42,000 |
(3) |
|
|
$ |
587,580 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Simone C. Walsh* |
5,000 |
(4) |
|
|
$ |
69,950 |
|
|
— |
|
|
$ |
— |
|
|
5,000 |
(5) |
|
|
$ |
69,950 |
|
|
2,500
|
(6) |
|
$ |
34,975 |
|
|
13,000 |
(7) |
|
|
$ |
181,870 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matthew J. Miller |
10,000 |
(4) |
|
|
$ |
139,900 |
|
|
— |
|
|
$ |
— |
|
|
10,000 |
(5) |
|
|
$ |
139,900 |
|
|
5,000 |
(8) |
|
$ |
69,950 |
|
|
10,000 |
(7) |
|
|
$ |
139,900 |
|
|
5,000 |
(9) |
|
$ |
69,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffery N. Stillwell |
16,000 |
(4) |
|
|
$ |
223,840 |
|
|
— |
|
|
$ |
— |
|
|
5,000 |
(5) |
|
|
$ |
69,950 |
|
|
2,500 |
(6) |
|
$ |
34,975 |
|
|
13,000 |
(7) |
|
|
$ |
181,870 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlos E. Encalada Arjona |
2,500 |
(5) |
|
|
$ |
34,975 |
|
|
1,250 |
(6) |
|
$ |
17,488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The market value is calculated by multiplying the number of share units by $13.99, the closing price of Delta Apparel, Inc.'s common stock on September 30, 2022 (the last trading day of our 2022 fiscal year).
|
(2) |
In accordance with the fifth amendment to Mr. Humphreys' employment agreement, he received 100,000 service-based restricted stock units, with these 50,000 units eligible to vest upon the filing of our Annual Report on Form 10-K with the SEC for our 2022 fiscal year, subject to Mr. Humphreys remaining employed with the Company through such date. Mr. Humphreys vested in the full amount of these service-based restricted stock units and received shares of Delta Apparel, Inc. common stock equal to the aggregate number of such vested units. |
(3) |
In accordance with the sixth amendment to Mr. Humphreys' employment agreement, he received 84,000 service-based restricted stock units, with 42,000 units eligible to vest upon the filing of our Annual Report on Form 10-K with the SEC for our 2023 fiscal year, subject to Mr. Humphreys remaining employed with the Company through such date, and 42,000 units eligible to vest upon the filing of our Annual Report on Form 10-K with the SEC for our 2024 fiscal year, subject to Mr. Humphreys remaining employed with the Company through such date. |
(4) |
These stock-based awards, granted under the 2020 Stock Plan, are service-based restricted stock units that were eligible to vest upon the filing of our Annual Report on Form 10-K with the SEC for our fiscal year 2022, subject to the executive remaining employed with the Company through such date. Each executive vested in the full amount of these service-based restricted stock units and received shares of Delta Apparel, Inc. common stock equal to the aggregate number of such vested restricted stock units. |
(5) |
These stock-based awards, granted under the 2020 Stock Plan, are service-based restricted stock units that are eligible to vest upon the filing of our Annual Report on Form 10-K with the SEC for our fiscal year 2023, subject to the executive remaining employed with the Company through such date. Ms. Walsh subsequently forfeited these service-based restricted stock units as a result of her December 1, 2022, voluntary resignation from employment with the Company. |
(6) |
These stock-based awards, granted under the 2020 Stock Plan, are performance units that are eligible to vest upon the filing of our Annual Report on Form 10-K with the SEC for our fiscal year 2023 based on our performance in fiscal years 2022 and 2023. The amount shown reflects the number of performance units that would vest if minimum performance goals are met in fiscal years 2022 and 2023. If target performance goals are met in fiscal years 2022 and 2023, Ms. Walsh would have been eligible to receive 5,000 shares, Mr. Stillwell would be eligible to receive 5,000 shares, and Mr. Encalada Arjona would be eligible to receive 2,500 shares. The maximum amount of shares that Ms. Walsh could receive pursuant to the award was 7,500 shares, the maximum amount of shares that Mr. Stillwell can receive pursuant to the award is 7,500 shares, and the maximum amount of shares that Mr. Encalada Arjona can receive pursuant to the award is 3,750 shares. Ms. Walsh subsequently forfeited these performance-based restricted stock units as a result of her December 1, 2022, voluntary resignation from employment with the Company. |
(7) |
These stock-based awards, granted under the 2020 Stock Plan, are service-based restricted stock units that are eligible to vest upon the filing of our Annual Report on Form 10-K with the SEC for our fiscal year 2024, subject to the executive remaining employed with the Company through such date. Ms. Walsh subsequently forfeited these service-based restricted stock units as a result of her December 1, 2022, voluntary resignation from employment with the Company. |
Delta Apparel, Inc. - 37 - Proxy Statement
(8) |
These stock-based awards, granted under the 2020 Stock Plan, are performance units that are eligible to vest upon the filing of our Annual Report on Form 10-K with the SEC for our fiscal year 2023 based on our performance in fiscal year 2023. The amount shown reflects the number of performance units that would vest if minimum performance goals are met in fiscal year 2023. If target performance goals are met in fiscal year 2023, Mr. Miller would be eligible to receive 10,000 shares. The maximum amount of shares that Mr. Miller can receive pursuant to the award is 15,000 shares. |
(9) |
These stock-based awards, granted under the 2020 Stock Plan, are performance units that are eligible to vest upon the filing of our Annual Report on Form 10-K with the SEC for our fiscal year 2024 based on our performance in fiscal year 2024. The amount shown reflects the number of performance units that would vest if minimum performance goals are met in fiscal year 2024. If target performance goals are met in fiscal year 2024, Mr. Miller would be eligible to receive 10,000 shares. The maximum amount of shares that Mr. Miller can receive pursuant to the award is 15,000 shares. |
* |
Ms. Walsh voluntarily resigned as Vice President, Chief Financial Officer and Treasurer of the Company effective December 1, 2022. |
Delta Apparel, Inc. - 38 - Proxy Statement
Potential Payments Upon Termination or Change in Control
The following table and additional information below are a summary setting forth potential severance payments and benefits provided for in each named executive officer's employment agreement or other compensation arrangement, assuming termination of employment or a change in control occurred on October 1, 2022, the last day of our 2022 fiscal year. Due to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the year of any such event, the price of the Company’s common stock and the executive’s age. These benefits are in addition to benefits available generally to salaried employees upon termination. Each named executive officer's employment agreement (excluding Mr. Encalada Arjona) requires the executive to comply with certain confidentiality, non-disparagement, non-solicitation and non-competition provisions, which are summarized on pages 32-34 of the Executive Compensation section and incorporated herein by reference.
Potential Payments Upon Termination or Change in Control
Fiscal Year Ended October 1, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before Change in Control Termination Without Cause or For Company Breach
|
|
|
After Change in Control Termination Without Cause or For Good Reason
|
|
|
Change in
Control Without
Termination
|
|
|
Termination Due to Death
|
|
|
Termination Due to Disability
|
|
|
Voluntary Termination Due to Retirement
|
|
Executive
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
Robert W. Humphreys
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
$ |
850,000 |
|
|
$ |
850,000 |
|
|
$ |
— |
|
|
$ |
425,000 |
|
|
$ |
425,000 |
|
|
$ |
— |
|
Non-Equity Incentive Compensation
|
|
$ |
1,500,000 |
|
|
$ |
1,500,000 |
|
|
$ |
— |
|
|
$ |
1,500,000 |
(1) |
|
$ |
1,500,000 |
(1) |
|
$ |
1,500,000 |
(1) |
Equity Awards (2)
|
|
$ |
699,500 |
|
|
$ |
1,874,660 |
|
|
$ |
1,874,660 |
|
|
$ |
1,874,660 |
|
|
$ |
1,874,660 |
|
|
$ |
— |
|
Insurance Benefits |
|
$ |
4,753 |
|
|
$ |
4,753 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,377 |
|
|
$ |
— |
|
Outplacement Services
|
|
$ |
— |
|
|
$ |
5,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
3,054,253 |
|
|
$ |
4,234,413 |
|
|
$ |
1,874,660 |
|
|
$ |
3,799,660 |
|
|
$ |
3,802,037 |
|
|
$ |
1,500,000 |
|
Simone C. Walsh*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
$ |
400,000 |
|
|
$ |
400,000 |
|
|
$ |
— |
|
|
$ |
200,000 |
|
|
$ |
200,000 |
|
|
$ |
— |
|
Non-Equity Incentive Compensation
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
375,000 |
(1) |
|
$ |
375,000 |
(1) |
|
$ |
— |
|
Equity Awards (2)
|
|
$ |
69,950 |
|
|
$ |
391,720 |
|
|
$ |
391,720 |
|
|
$ |
391,720 |
|
|
$ |
391,720 |
|
|
$ |
— |
|
Insurance Benefits
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Outplacement Services
|
|
$ |
— |
|
|
$ |
5,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
469,950 |
|
|
$ |
796,720 |
|
|
$ |
391,720 |
|
|
|
966,720 |
|
|
|
966,720 |
|
|
$ |
— |
|
Matthew J. Miller |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary |
|
$ |
450,000 |
|
|
$ |
450,000 |
|
|
$ |
— |
|
|
$ |
225,000 |
|
|
$ |
225,000 |
|
|
$ |
— |
|
Non-Equity Incentive Compensation
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Equity Awards (2) |
|
$ |
— |
|
|
$ |
699,500 |
|
|
$ |
699,500 |
|
|
$ |
699,500 |
|
|
$ |
699,500 |
|
|
$ |
— |
|
Insurance Benefits |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Outplacement |
|
$ |
— |
|
|
$ |
5,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
450,000 |
|
|
$ |
1,154,500 |
|
|
$ |
699,500 |
|
|
$ |
924,500 |
|
|
$ |
924,500 |
|
|
$ |
|
|
Jeffery N. Stillwell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
|
|
$ |
400,000 |
|
|
$ |
400,000 |
|
|
$ |
— |
|
|
$ |
200,000 |
|
|
$ |
200,000 |
|
|
$ |
— |
|
Non-Equity Incentive Compensation
|
|
$ |
400,000 |
|
|
$ |
400,500 |
|
|
$ |
— |
|
|
$ |
400,000 |
(1) |
|
$ |
400,000 |
(1) |
|
$ |
— |
|
Equity Awards (2)
|
|
$ |
— |
|
|
$ |
545,610 |
|
|
$ |
545,610 |
|
|
$ |
545,610 |
|
|
$ |
545,610 |
|
|
$ |
— |
|
Insurance Benefits
|
|
$ |
4,753 |
|
|
$ |
4,753 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,377 |
|
|
$ |
— |
|
Outplacement Services
|
|
$ |
— |
|
|
$ |
5,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
804,753 |
|
|
$ |
1,355,363 |
|
|
$ |
545,610 |
|
|
$ |
1,145,610 |
|
|
$ |
1,147,987 |
|
|
$ |
— |
|
Carlos E. Encalada Arjona (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Non-Equity Incentive Compensation |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
200,000 |
(1) |
|
$ |
200,000 |
(1) |
|
$ |
— |
|
Equity and Awards (2) |
|
$ |
— |
|
|
$ |
69,950 |
|
|
$ |
69,950 |
|
|
$ |
69,950 |
|
|
$ |
69,950 |
|
|
$ |
— |
|
Insurance Benefits |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Outplacement Services |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
— |
|
|
$ |
69,950 |
|
|
$ |
69,950 |
|
|
$ |
269,950 |
|
|
$ |
269,950 |
|
|
$ |
— |
|
Delta Apparel, Inc. - 39 - Proxy Statement
(1) |
Pursuant to the Company's Short-Term Incentive Compensation Plan and assuming termination on October 1, 2022, if an executive ceases to be an employee of the Company or one of its subsidiaries due to the executive's death, permanent and total disability, or retirement (provided that the executive is at least age 62), the executive shall be entitled to receive the non-equity incentive compensation earned through the date of departure from the Company. |
(2) |
Amount includes value received under the 2020 Stock Plan. The value of payments is based upon the closing price of Delta Apparel Inc.'s common stock on September 30, 2022 (the last trading day of our 2022 fiscal year). |
(3) |
Mr. Encalada Arjona is the only named executive officer employed in Mexico. Mr. Encalada Arjona does not have an employment agreement with the Company. Pursuant to Mexican law, if Mr. Encalada Arjona was terminated, he would be entitled to statutory severance payments and other termination benefits generally available to all Mexico salaried employees. |
* |
Ms. Walsh voluntarily resigned as Vice President, Chief Financial Officer and Treasurer of the Company effective December 1, 2022. |
Payments Made Upon Any Termination
Regardless of the manner in which a named executive officer’s employment terminates, the executive is entitled to receive amounts earned during his or her term of employment. Such amounts include:
|
•
|
earned but unpaid salary through the date of termination;
|
|
|
|
|
•
|
non-equity incentive compensation earned and payable prior to the date of termination; and
|
|
|
|
|
•
|
amounts accrued and vested under the Company’s 401(k) Plan.
|
Payments Made Upon Retirement
The Company does not currently offer additional benefits upon retirement other than the benefits available to any employee leaving the Company. The 2020 Stock Plan does not include provisions for vesting based upon retirement. The Company's Short-Term Incentive Compensation Plan provides that unless the Compensation Committee expressly provides otherwise, if the executive ceases to be an employee of either the Company or one of its subsidiaries during the performance period applicable to an award granted to the executive under the Short-Term Incentive Compensation Plan due to the executive's retirement (provided that the executive is at least age 62), the executive shall be entitled to a percentage portion of the payment, if any, that the executive would have been entitled to had the executive remained employed by the Company or one of its subsidiaries throughout the performance period, where the percentage shall be the percentage of the performance period during which the executive was an employee of the Company or one of its subsidiaries.
Payments Made Upon Involuntary Termination for Cause
In the event any named executive officer is terminated for Cause (as defined by his or her employment agreement), the executive is not entitled to receive any payments other than those payments identified under the heading “Payments Made Upon Any Termination” above.
Payments Made Upon Involuntary Termination Without Cause
As a result of employment agreements entered into by the Company with the named executive officers, with the exception of Mr. Encalada Arjona who does not have an employment agreement, in the event that a named executive officer’s employment is involuntarily terminated without Cause (as defined by his or her employment agreement), or a named executive officer terminates his or her employment because of a material breach by the Company of his or her employment agreement, the executive would receive, in addition to the items identified under the heading “Payments Made Upon Any Termination” above:
|
•
|
in the case of Mr. Humphreys, 12 months of base salary continuation and payment of non-equity incentive compensation equal to 100% of the award for the most recent full fiscal year prior to termination in 12 equal monthly installments (to the extent permitted under IRC Section 409A). In addition, the full award of service-based restricted stock units (granted pursuant to the 2020 Stock Plan) related to the fiscal year in which Mr. Humphreys’ employment is terminated will immediately and automatically vest;
|
|
|
|
|
• |
in the case of Ms. Walsh (prior to her resignation), 12 months of base salary continuation and payment of non-equity incentive compensation equal to 100% of the award for the most recent full fiscal year prior to termination in 12 equal monthly installments (to the extent permitted under IRC Section 409A). In addition, the full equity award (granted pursuant to the 2020 Stock Plan) related to the fiscal year in which Ms. Walsh's employment is terminated will immediately and automatically vest, subject to applicable performance criteria; |
|
|
|
|
•
|
in the case of Mr. Miller and Mr. Stillwell, 12 months of base salary continuation and payment of non-equity incentive compensation equal to 100% of the award for the most recent full fiscal year prior to termination in 12 equal monthly installments (to the extent permitted under IRC Section 409A); and
|
|
|
|
|
• |
continuation of group life, disability and medical insurance coverage for 12 months in the case of Mr. Humphreys, Ms. Walsh (prior to her resignation), Mr. Miller and Mr. Stillwell at levels and rates equal to those provided to other executive-level employees during such applicable period. |
Delta Apparel, Inc. - 40 - Proxy Statement
Payments Made Upon a Change in Control
As discussed in detail in the Executive Compensation section, the employment agreements entered into by the Company with the named executive officers, along with the 2020 Stock Plan, contain change-in-control provisions. The benefits available under such provisions, in addition to the items listed under the heading “Payments Made Upon Any Termination” above, include:
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in the case of Mr. Humphreys, whether or not termination results from the change in control, all restrictions on restricted stock units will terminate and all other terms and conditions will be deemed satisfied to pay out all restricted stock units. In addition, if termination results from the change in control, a lump sum payment in an amount equal to 12 months of base salary and the non-equity incentive compensation received for the most recent full fiscal year prior to termination; |
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in the case of Ms. Walsh (prior to her resignation), Mr. Miller, and Mr. Stillwell, whether or not termination results from the change in control, all restrictions on restricted stock units will terminate and all performance criteria shall be deemed achieved at target levels and all other terms and conditions met to pay out all performance units and restricted stock units. In addition, if termination results from the change in control, a lump sum payment in an amount equal to 12 months of base salary and the non-equity incentive compensation received for the most recent full fiscal year prior to termination; and
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in the case of termination resulting from the change in control, Mr. Humphreys, Ms. Walsh (prior to her resignation), Mr. Miller, and Mr. Stillwell will receive continuation of group life, disability and Company-funded medical insurance coverage under COBRA, as available, for 12 months at levels and rates equal to those provided to other executive-level employees during such applicable period. In addition, Mr. Humphreys, Ms. Walsh (prior to her resignation), Mr. Miller, and Mr. Stillwell will receive outplacement assistance.
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Payments Made Upon Death or Permanent Disability
In the event of the death or permanent disability of a named executive officer, the executive would receive, in addition to the items listed under the heading “Payments Made Upon Any Termination” above:
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six months of base salary continuation and all performance criteria shall be deemed achieved at target levels and all other terms and conditions met to pay out all restricted stock units and/or performance units granted pursuant to the 2020 Stock Plan;
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continuation of group life, disability and Company-funded medical insurance coverage under COBRA, as available, for six months at levels and rates equal to those provided to other executive-level employees during such period; and
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the Company's Short-Term Incentive Compensation Plan provides that unless the Compensation Committee expressly provides otherwise, if the executive ceases to be an employee of either the Company or one of its subsidiaries during the performance period applicable to an award granted to the executive under the Short-Term Incentive Compensation Plan due to the executive's death or permanent and total disability (as defined in Code Section 22(e)(3)), the executive shall be entitled to a percentage portion of the payment, if any, that the executive would have been entitled to had the executive remained employed by the Company or one of its subsidiaries throughout the performance period, where the percentage shall be the percentage of the performance period during which the executive was an employee of the Company or one of its subsidiaries.
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Delta Apparel, Inc. - 41 - Proxy Statement