DEF 14A
false0001132105DEF 14A0001132105ecd:NonPeoNeoMemberspwh:AverageYearEndFairValueForOutstandingAndUnvestedStockAndOptionAwardsGrantedInTheCoveredYearMember2023-01-292024-02-0300011321052023-01-292024-02-03000113210552023-01-292024-02-030001132105ecd:PeoMemberspwh:StockAndOptionAwardValuesReportedInSummaryCompensationTableForTheCoveredYearMemberspwh:JosephSchneiderMember2023-01-292024-02-03000113210542023-01-292024-02-030001132105ecd:NonPeoNeoMemberspwh:AverageStockAndOptionAwardValuesReportedInSummaryCompensationTableForTheCoveredYearMember2023-01-292024-02-030001132105spwh:AverageChangeInFairValueOfStockAndOptionAwardsFromPriorYearsThatVestedInTheCoveredYearMemberecd:NonPeoNeoMember2023-01-292024-02-030001132105spwh:JonBarkerMember2023-01-292024-02-030001132105spwh:JonBarkerMember2022-01-302023-01-280001132105ecd:NonPeoNeoMemberspwh:AverageYearOverYearChangeInFairValueOfOutstandingUnvestedStockAndOptionAwardsFromPriorYearsMember2023-01-292024-02-030001132105spwh:JonBarkerMember2020-02-022021-01-300001132105spwh:JosephSchneiderMember2023-01-292024-02-030001132105ecd:PeoMemberspwh:StockAndOptionAwardValuesReportedInSummaryCompensationTableForTheCoveredYearMemberspwh:PaulStoneMember2023-01-292024-02-030001132105spwh:PaulStoneMember2023-01-292024-02-03000113210512023-01-292024-02-030001132105spwh:JonBarkerMember2021-01-312022-01-290001132105spwh:YearEndFairValueForOutstandingAndUnvestedStockAndOptionAwardsGrantedInTheCoveredYearMemberecd:PeoMemberspwh:PaulStoneMember2023-01-292024-02-030001132105ecd:PeoMemberspwh:JonBarkerMemberspwh:YearOverYearChangeInFairValueOfStockAndOptionAwardsFromPriorYearsThatVestedInTheCoveredYearMember2023-01-292024-02-03000113210532023-01-292024-02-030001132105ecd:PeoMemberspwh:JonBarkerMemberspwh:AverageEndOfPriorYearFairValueOfStockAndOptionAwardsForfeitedDuringTheCoveredYearMember2023-01-292024-02-030001132105spwh:FairValueAsOfVestingDateOfStockAndOptionAwardsGrantedAndVestedInTheCoveredYearMemberecd:PeoMemberspwh:JosephSchneiderMember2023-01-292024-02-03000113210522023-01-292024-02-03iso4217:USD

 

 

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

 

SCHEDULE 14A INFORMATION

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

(Amendment No. )

 

Filed by the Registrant

Filed by a party other than the Registrant

Check the appropriate box:

Preliminary Proxy Statement

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

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under § 240.14a-12

 

 

SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

(Name of Registrant as Specified In Its Charter)

 

 

Not applicable

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

 

 

Payment of Filing Fee (Check all boxes that apply):

No fee required

Fee paid previously with preliminary materials

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

 

REHOUSE SPORTSMAN’S WAREHOUSE 2023 Annual Meeting Of Stockholders and Proxy Statement\

 


 

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Dear Fellow Stockholder:

 

You are cordially invited to attend the 2024 annual meeting of stockholders (the “Annual Meeting”) of Sportsman’s Warehouse Holdings, Inc., a Delaware corporation (which we refer to as “Sportsman’s Warehouse,” “we” or “us”), that will be held on Thursday, May 30, 2024, at 8:00 a.m. Mountain Time. We have determined that the Annual Meeting will be a virtual meeting of stockholders conducted via live audiocast on the Internet. You may listen to and participate in the Annual Meeting by going to www.virtualshareholdermeeting.com/SPWH2024. You will be able to access the meeting using the control number found on your proxy card or voting instruction form, as applicable. You will not be able to attend the Annual Meeting in person. For purposes of attendance at the Annual Meeting, all references in the accompanying Proxy Statement to “present in person” or “in person” shall mean virtually present at the Annual Meeting.

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Details of the business to be conducted at the Annual Meeting and instructions for how to participate in the Annual Meeting are set forth in the accompanying proxy materials, including the Notice of 2024 Annual Meeting of Stockholders and Proxy Statement. Only stockholders of record and beneficial owners at the close of business on April 5, 2024 are entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements thereof.

On or about April 24, 2024, we expect to mail to our stockholders our proxy materials, including the Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended February 3, 2024.

Whether or not you plan to attend the Annual Meeting, we encourage you to vote on the matters presented as soon as possible. If you participate in and vote your shares at the Annual Meeting, your proxy will not be used.

Thank you for your continued support and interest in Sportsman’s Warehouse.

 

Sincerely,

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Paul Stone

President and Chief Executive Officer

April 24, 2024

 

 

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2024 Proxy Statement

 


 

 

 

 

PROXY SUMMARY

 

 

SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

1475 WEST 9000 SOUTH, SUITE A

WEST JORDAN, UTAH 84088

NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON May 30, 2024

 

Annual Meeting of Stockholders

 

 

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Date & Time

 

 

 

 

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Location of Meeting

 

 

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Record Date

May 30, 2024, at 8:00 a.m. Mountain Time

 

The meeting will be held virtually, via live audiocast at www.virtualshareholdermeeting.com/SPWH2024

 

Close of business on

April 5, 2024

 

The purposes of the Annual Meeting are to:

 

Proposal

 

Board Recommendation

1

Elect the two director nominees named in the accompanying Proxy Statement to serve until the Company’s 2025 annual meeting of stockholders and until their respective successors are duly elected and qualified, or until their earlier death, resignation or removal;

 

 

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Vote FOR each of the director nominees

2

Approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the accompanying Proxy Statement;

 

 

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Vote FOR

3

Approve an amendment and restatement of the Company's 2019 Performance Incentive Plan (the "2019 Plan"), including to increase the number of shares available for grant under the 2019 Plan;

 

 

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Vote FOR

4

Approve an amendment and restatement of the Company's Employee Stock Purchase Plan (the “ESPP”) to increase the number of shares available for grant under the ESPP and to remove the ESPP's ten-year term;

 

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Vote FOR

5

Ratify the appointment of Grant Thornton LLP as the Company's independent registered public accounting firm for the fiscal year ending February 1, 2025 (fiscal year 2024);

 

 

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Vote FOR

 

On or about April 24, 2024, we expect to mail to our stockholders our proxy materials, including the Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 (“2023 Annual Report”).

You may listen to and participate in the Annual Meeting by going to www.virtualshareholdermeeting.com/SPWH2024. You will be able to access the meeting using the control number found on your proxy card or voting instruction form, as applicable. The accompanying Proxy Statement provides detailed information about the Annual Meeting. We encourage you to read the Proxy Statement carefully and in its entirety.

 

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2024 Proxy Statement

 


 

PROXY SUMMARY

 

The Board of Directors has fixed the close of business on April 5, 2023 as the record date for determining the stockholders entitled to receive notice of and to vote at the Annual Meeting. A list of all stockholders entitled to vote at the Annual Meeting will be available for examination at our principal executive offices at 1475 West 9000 South, Suite A, West Jordan, Utah 84088, for ten days before the Annual Meeting.

Whether or not you plan to be virtually present at the Annual Meeting, we encourage you to submit your proxy or voting instructions as soon possible to instruct how your shares are to be voted at the Annual Meeting and to help ensure the presence of a quorum at the Annual Meeting. Voting now via proxy will not limit your right to change your vote or to attend the virtual Annual Meeting.

IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDERS’ MEETING TO BE HELD ON MAY 30, 2024

 

The Proxy Statement and our 2023 Annual Report can be accessed directly at the internet address www.proxyvote.com using the control number located on your proxy card or in the instructions that accompanied your proxy materials.

 

 

By order of the Board of Directors,

 

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Jeff White

Chief Financial Officer and Secretary

 

April 24, 2024

 


i

 

TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

4

 

PROPOSAL 1 – ELECTION OF DIRECTORS

10

 

CORPORATE GOVERNANCE

17

 

EXECUTIVE OFFICERS

23

 

COMPENSATION DISCUSSION AND ANALYSIS

24

 

EXECUTIVE COMPENSATION TABLES

36

 

CEO PAY RATIO

 

46

 

 

 

PAY VERSUS PERFORMANCE

 

47

 

 

 

DIRECTOR COMPENSATION

52

 

EQUITY COMPENSATION PLAN INFORMATION

55

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

56

 

DELINQUENT SECTION 16(A) REPORTS

58

 

TRANSACTIONS WITH RELATED PERSONS

59

 

 

 

PROPOSAL 2 – APPROVAL, ON AN ADVISORY BASIS, OF NAMED EXECUTIVE OFFICER COMPENSATION

 

60

 

 

 

PROPOSAL 3 – APPROVE AN AMENDMENT AND RESTATEMENT OF THE COMPANY'S 2019 PERFORMANCE INCENTIVE PLAN

 

61

 

 

 

PROPOSAL 4 – APPROVE AN AMENDMENT AND RESTATEMENT OF THE COMPANY’S ESPP TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR GRANT UNDER THE ESPP AND TO REMOVE THE ESPP'S TEN-YEAR TERM

 

72

 

 

 

PROPOSAL 5 – RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

78

 

 

 

REPORT OF THE AUDIT COMMITTEE

 

80

 

 

 

PROPOSALS OF STOCKHOLDERS AND DIRECTOR NOMINATIONS FOR 2025 ANNUAL MEETING

 

81

 

 

 

OTHER MATTERS

 

81

 

 

 

ANNUAL REPORT TO STOCKHOLDERS

82

 

 

 

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 2024 Proxy Statement

i

 


ii

 

APPENDIX A - AMENDED AND RESTATED 2019 PERFORMANCE INCENTIVE PLAN

 

A-1

 

 

 

APPENDIX B - AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN

 

A-21

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 2024 Proxy Statement

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Proxy Statement on Schedule 14A (this “Proxy Statement”) contains forward-looking statements as that term is defined by the Private Securities Litigation Reform Act of 1995. These statements may concern our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition, which are subject to risks and uncertainties. All statements other than statements of historical fact included in this Proxy Statement are forward-looking statements. These statements may include words such as “aim,” “anticipate,” “assume,” “believe,” “can have,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “likely,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “should,” “target,” “will,” “would” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events or trends. For example, all statements we make relating to our plans and objectives for future operations, growth or initiatives and strategies are forward-looking statements.

These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions. We derive many of our forward-looking statements from our own operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that predicting the impact of known factors is very difficult, and we cannot anticipate all factors that could affect our actual results.

All of our forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from our expectations. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to:

current and future government regulations, in particular regulations relating to the sale of firearms and ammunition, which may impact the supply and demand for our products and our ability to conduct our business;
our retail-based business model which is impacted by general economic and market conditions and economic, market and financial uncertainties that may cause a decline in consumer spending;
our concentration of stores in the Western United States which makes us susceptible to adverse conditions in this region, and could affect our sales and cause our operating results to suffer;
the highly fragmented and competitive industry in which we operate and the potential for increased competition;
changes in consumer demands, including regional preferences, which we may not be able to identify and respond to in a timely manner;
our entrance into new markets or operations in existing markets, including our plans to open additional stores in future periods, which may not be successful;
our implementation of a plan to reduce expenses in response to adverse macroeconomic conditions, including an increased focus on financial discipline and rigor throughout our organization; and
the impact of general macroeconomic conditions, such as labor shortages, inflation, rising interest rates, economic slowdowns, and recessions or market corrections.

The above is not a complete list of factors or events that could cause actual results to differ from our expectations, and we cannot predict all of them. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements disclosed under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our Annual Report on Form 10-K for the year ended February 3, 2024, as such disclosures may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission (the “SEC”), including subsequent Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, and public communications. You should evaluate all forward-looking statements made in this Proxy Statement and otherwise in the context of these risks and uncertainties.

 

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 2024 Proxy Statement

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Potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on any forward-looking statements we make. These forward-looking statements speak only as of the date of this Proxy Statement and are not guarantees of future performance or developments and involve known and unknown risks, uncertainties and other factors that in many cases are beyond our control. Except as required by law, we undertake no obligation to update or revise any forward-looking statements publicly, whether as a result of new information, future developments or otherwise.

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 2024 Proxy Statement

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SPORTSMAN’S WAREHOUSE HOLDINGS, INC.

1475 WEST 9000 SOUTH, SUITE A

WEST JORDAN, UTAH 84088

PROXY STATEMENT FOR 2024 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 30, 2024

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Sportsman’s Warehouse Holdings, Inc. (the “Board of Directors” or the “Board”) from the holders of shares of our common stock, par value $0.01 per share (our “Common Stock”), for the purposes set forth in this Proxy Statement for our 2024 Annual Meeting of Stockholders (including any adjournments, continuations or postponements thereof, the “Annual Meeting”). The Annual Meeting will be held virtually, via live audiocast at www.virtualshareholdermeeting.com/SPWH2024 on Thursday, May 30, 2024, at 8:00 a.m. Mountain Time. You may listen to and participate in the Annual Meeting by going to www.virtualshareholdermeeting.com/SPWH2024.

On or about April 24, 2024, we expect to mail to our stockholders our proxy materials, including the Proxy Statement and our 2023 Annual Report. The Proxy Statement and our 2023 Annual Report can be accessed directly at the internet address www.proxyvote.com using the control number located on your proxy card or in the instructions that accompanied your proxy materials. These materials are also available on our corporate website at investors.sportsmans.com. References to our website in this Proxy Statement are provided for convenience only and the content on our website does not constitute part of this Proxy Statement.

References throughout this Proxy Statement to “Sportsman’s Warehouse,” the “Company,” “we,” “us,” and “our” refer to Sportsman’s Warehouse Holdings, Inc. and its subsidiaries, and references to “Holdings” refer to Sportsman’s Warehouse Holdings, Inc. excluding its subsidiaries. References to (i) “fiscal year 2023” refer to our fiscal year ended February 3, 2024; (ii) “fiscal year 2022” refer to our fiscal year ended January 28, 2023; and (iii) “fiscal year 2021” refer to our fiscal year ended January 29, 2022.

 

 

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 2024 Proxy Statement

3

 


 

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

When and where is the Annual Meeting?

The Annual Meeting will be held virtually on Thursday, May 30, 2024, at 8:00 a.m. Mountain Time, via live audiocast on the Internet. You may listen to and participate in the Annual Meeting by going to www.virtualshareholdermeeting.com/SPWH2024. You will be able to access the Annual Meeting using the control number found on your proxy card or voting instruction form, as applicable.

Why is the Company holding the Annual Meeting in a virtual-only meeting format?

We believe a virtual-only meeting format facilitates stockholder attendance and participation by enabling all stockholders to participate fully, equally and without cost, using an Internet-connected device from any location around the world. In addition, the virtual-only meeting format increases our ability to engage with all stockholders, regardless of size, resources or physical location and enables us to protect the health and safety of all attendees. Sportsman’s Warehouse stockholders will be afforded the same opportunities to participate at the virtual Annual Meeting as they would at an in-person meeting.

What am I being asked to vote on at the Annual Meeting?

At the Annual Meeting, stockholders will act on the following matters:

1.
Election of the two director nominees named in this Proxy Statement to serve until the Company’s 2025 annual meeting of stockholders and until their respective successors are duly elected and qualified, or until their earlier death, resignation or removal;
2.
Approval, on an advisory basis, of the compensation of the Company’s named executive officers, as disclosed in the Proxy Statement;
3.
Approval of an amendment and restatement of the Company's 2019 Performance Incentive Plan (the “2019 Plan”), including to increase the number of shares available for grant under the 2019 Plan;
4.
Approval of an amendment and restatement of the Company’s Employee Stock Purchase Plan (the “ESPP”) to increase the number of shares available for grant under the ESPP and to remove the ESPP's ten-year term; and
5.
Ratification of the appointment of Grant Thornton LLP (“Grant Thornton”) as the Company’s independent registered public accounting firm for the fiscal year ending February 1, 2025 (“fiscal year 2024”).

Stockholders will also be asked to consider and transact such other business as may properly come before the Annual Meeting or any postponement or adjournment thereof.

How does the Board recommend that I vote?

The Board recommends that you vote your shares of our Common Stock:

FOR” each of the two director nominees named in this Proxy Statement;
FOR” the approval, on an advisory basis, of the compensation of our named executive officers, as disclosed in the Proxy Statement;
FOR” the approval of the amendment and restatement of the 2019 Plan, including to increase the number of shares available for grant under the 2019 Plan;
FOR” the approval of an amendment and restatement of the ESPP to increase the number of shares available for grant under the ESPP and to remove the ESPP's ten-year term; and

 

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 2024 Proxy Statement

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QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

 

FOR” the ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for fiscal year 2024.

Who may vote?

Only holders of record of our Common Stock, at the close of business on the record date for the Annual Meeting, April 5, 2024 (the “Record Date”), are entitled to notice of and to vote at the Annual Meeting. Holders of Common Stock are entitled to cast one vote for each share held by them on each matter to be voted upon. As of the Record Date, there were 37,625,006 shares of Common Stock issued and outstanding and entitled to vote on the matters presented at the Annual Meeting. Our Common Stock is the only class of securities authorized to vote. Stockholders are not entitled to cumulative voting rights in the election of directors.

What must I do if I want to attend the Annual Meeting?

We will be hosting the Annual Meeting on the Internet via live audiocast. You will not be able to attend the Annual Meeting physically in person. All holders of shares of our Common Stock as of the close of business on the Record Date, including stockholders of record and stockholders who hold our Common Stock through a broker, bank or other nominee, may listen to and participate in the Annual Meeting by going to www.virtualshareholdermeeting.com/SPWH2024.

You will need the control number included on your proxy card or voting instruction form (if you received a printed copy of the proxy materials) or included in the email to you (if you received the proxy materials by email) in order to be able to attend the Annual Meeting. Please note that if you hold your shares in street name, you may not vote your shares at the Annual Meeting unless you obtain a “legal proxy” from the broker, bank or other nominee that holds your shares, giving you the right to vote your shares at the Annual Meeting.

The Annual Meeting audiocast will begin at 8:00 a.m. Mountain Time. Stockholders may access the Annual Meeting beginning at 7:45 a.m. Mountain Time through www.virtualshareholdermeeting.com/SPWH2024. Stockholders will be able to submit questions by means of the “Ask a Question” field beginning at 7:45 a.m. on the morning of the Annual Meeting and throughout the duration of the meeting. Following the presentation of all proposals at the Annual Meeting, we will answer stockholder-submitted questions pertinent to meeting matters as time permits. Any questions that we are unable to address during the Annual Meeting will be answered on our website at investors.sportsmans.com following the Annual Meeting. If we receive substantially similar questions, we will group the questions together and provide a single response to avoid repetition. We will not answer any questions that are irrelevant to the purpose of the Annual Meeting or our business or that contain inappropriate or derogatory references which are not in good taste.

What happens if I experience technical difficulties during the Annual Meeting?

We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting or submitting questions. If you encounter any difficulties accessing the virtual Annual Meeting during the check-in or meeting time, please call the technical support number that will be provided in the meeting access email that will be sent approximately one hour prior to the Annual Meeting.

What constitutes a quorum?

The presence at the meeting, in person or by proxy, of the holders of a majority in voting power of the shares of Common Stock outstanding and entitled to vote at the Annual Meeting will constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes will be counted for the purpose of determining whether a quorum is present. On the Record Date, there were 37,625,006 shares of Common Stock and no shares of preferred stock outstanding and entitled to vote. Thus, the holders of 18,812,504 shares of Common Stock must be present in person or represented by proxy at the Annual Meeting for a quorum to exist.

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 2024 Proxy Statement

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QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

 

How do I vote my shares?

Voting at the Annual Meeting

All holders of shares of our Common Stock as of the close of business on the Record Date, including stockholders of record and stockholders who hold shares of our Common Stock in street name, may attend and vote their shares at the Annual Meeting. See above under “What must I do if I want to attend the Annual Meeting?”

Even if you plan to be virtually present at the Annual Meeting, we recommend that you submit your proxy or voting instructions in advance to authorize the voting of your shares at the Annual Meeting so that your vote will be counted if you later are unable to attend the Annual Meeting.

Submitting a Proxy or Voting Instructions

Submitting a Proxy for Shares Registered Directly in the Name of the Stockholder. If you hold your shares of our Common Stock as a record holder and you are reviewing a printed copy of this Proxy Statement, you may vote by completing, signing, dating and returning the enclosed proxy card in the accompanying prepaid envelope, or by submitting a proxy over the Internet or by telephone by following the instructions on the proxy card. If you hold your shares of Common Stock as a record holder and you are viewing this Proxy Statement on the Internet, you may vote by submitting a proxy over the Internet or by telephone by following the instructions on the proxy card previously mailed to you. If you submit a proxy by Internet or telephone, you need not return a written proxy card by mail.
Submitting Voting Instructions for Shares Registered in Street Name. If you hold your shares of our Common Stock in street name, which means your shares are held of record by a broker, bank or nominee, you will receive instructions from your broker, bank or other nominee on how to vote your shares. Your broker, bank or other nominee will allow you to deliver your voting instructions over the Internet and may also permit you to provide your voting instructions by telephone. In addition, if you received a printed copy of this Proxy Statement, you may submit your voting instructions by completing, signing and dating the voting instruction form that was included with this Proxy Statement and returning it in the accompanying prepaid envelope. If you provide voting instructions by Internet or telephone, you need not return a written voting instruction form by mail.

What is the deadline for voting my shares if I do not attend the Annual Meeting?

If you are a stockholder of record, your proxy must be received by telephone or the Internet by 11:59 p.m. Eastern Time on May 29, 2024 in order for your shares to be voted at the Annual Meeting. If you are a stockholder of record and received your proxy materials by mail, and you cause your shares to be voted by completing, signing, dating and returning the enclosed proxy card, your proxy card must be received before the Annual Meeting for your shares to be voted at the Annual Meeting.

If you hold your shares in street name, please comply with the deadlines for voting provided by the broker, bank or other nominee that holds your shares

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 2024 Proxy Statement

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QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

 

What vote is required for adoption or approval of each matter to be voted on?

 

Proposal

Vote Required

Proposal 1: Election of Directors

Each director nominee will be elected at the Annual Meeting if the nominee receives a majority of the votes cast with respect to his or her election (that is, the number of votes cast “For” the nominee must exceed the number of votes cast “Against” the nominee).

Proposal 2: Approval, on an Advisory Basis, of the Compensation of our Named Executive Officers

The affirmative vote of a majority in voting power of the outstanding shares of Common Stock present in person, by remote communication, if applicable, or represented by proxy and entitled to vote on the matter.

Proposal 3: Approval of an amendment and restatement of the Company's 2019 Performance Incentive Plan

The affirmative vote of a majority in voting power of the outstanding shares of Common Stock present in person, by remote communication, if applicable, or represented by proxy and entitled to vote on the matter.

Proposal 4: Approval of an amendment and restatement of the ESPP

 

The affirmative vote of a majority in voting power of the outstanding shares of Common Stock present in person, by remote communication, if applicable, or represented by proxy and entitled to vote on the matter.

Proposal 5: Ratification of the appointment of Grant Thornton LLP as the Company's independent registered public accounting firm for fiscal year 2024

The affirmative vote of a majority in voting power of the outstanding shares of Common Stock present in person, by remote communication, if applicable, or represented by proxy and entitled to vote on the matter.

What happens if I do not give specific voting instructions?

If you are a stockholder of record and you properly submit a signed proxy card or submit your proxy by telephone or the Internet, but do not specify how you want to vote your shares on a particular proposal, then the named proxy holders will vote your shares in accordance with the recommendations of the Board on all matters presented in this proxy statement. See above under the heading “How does the Board recommend that I vote?”

In accordance with applicable stock exchange rules, if you hold your shares through a brokerage account and you fail to provide voting instructions to your broker, your broker may generally vote your uninstructed shares of our Common Stock in its discretion on routine matters at a stockholder meeting. However, a broker cannot vote shares of our Common Stock held in street name on non-routine matters unless the broker receives voting instructions from the stockholder. Generally, if a broker exercises this discretion on routine matters at a stockholder meeting, a stockholder’s shares will be voted on the routine matter in the manner directed by the broker, but will constitute a “broker non-vote” on all of the non-routine matters to be presented at the stockholder meeting. Proposal 1 (election of directors), Proposal 2 (approval, on an advisory basis, of the compensation of the Company’s named executive officers), Proposal 3 (approval of an amendment and restatement of the Company's 2019 Performance Incentive Plan (the "2019 Plan"), including an increase in the number of shares available for grant under the 2019 Plan), and Proposal 4 (approval of an amendment and restatement of the Company's Employee Stock Purchase Plan (the “ESPP”) to increase the number of shares available for grant under the ESPP and to remove the ESPP's ten-year term). Proposal 5 (ratification of Grant Thornton as our independent registered public accounting firm) is considered a routine matter.

Consequently, if you hold your shares in street name through a brokerage account and do not submit voting instructions to your broker, your broker may exercise its discretion to vote your shares on Proposal 5, but will not be permitted to vote your shares on Proposals 1, 2, 3, or 4 or on any other business as may properly come before the Annual Meeting. If your broker exercises this discretion on Proposal 5, your shares will be counted as present for determining the presence of a quorum at the Annual Meeting and will be voted on Proposal 5 in the manner directed by your broker, but your shares will constitute broker non-votes on Proposal 1, 2, 3, or 4 at the Annual Meeting.

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QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

 

What are my choices for casting my vote on each matter to be voted on?

Your choices for casting your vote on each proposal to be voted on at the Annual Meeting are as follows:

 

Proposal

Voting Options

Effect of Abstentions

Broker Discretionary Voting Allowed?

Effect of Broker Non-Votes

Proposal 1: Election of Directors

“For,” “Against,” or “Abstain” with respect to each of the director nominees

None. Not counted as a “vote cast”

No

None. Not counted as a “vote cast.”

Proposal 2: Approval, on an Advisory Basis, of the Compensation of our Named Executive Officers

 

“For,” “Against,” or “Abstain”

 

Vote “Against” the proposal

 

No

 

None.

Proposal 3: Approval of an amendment and restatement of the Company's 2019 Performance Incentive Plan

“For,” “Against,” or “Abstain”

Vote “Against” the proposal

No

None.

Proposal 4: Approval of an amendment and restatement of the Company's ESPP

 

“For,” “Against,” or “Abstain”

 

Vote “Against” the proposal

 

No

 

None.

Proposal 5: Ratification of the appointment of Grant Thornton LLP as the Company's independent registered public accounting firm for fiscal year 2024

“For,” “Against,” or “Abstain”

Vote “Against” the proposal

Yes

 

Not applicable.

How will voting on any other business be conducted?

Although the Board does not know of any business to be considered at the Annual Meeting other than the items described in this Proxy Statement, if any other business properly comes before the Annual Meeting, a stockholder’s properly submitted proxy gives authority to the proxy holders to vote on those matters in their discretion.

How can I change or revoke my proxy?

If you are a stockholder of record, you may change or revoke a previously submitted proxy at any time before it is exercised by one of the following methods:​

delivering a later dated proxy card;
submitting another proxy by telephone or the Internet (your latest telephone or Internet voting instructions will be followed);
delivering to the Secretary of Sportsman’s Warehouse at our principal executive offices a written notice of revocation prior to the voting of the proxy at the Annual Meeting; or
by voting in person at the Annual Meeting. Attendance at the Annual Meeting will not, by itself, revoke your proxy.

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QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

 

Written notices of revocation should be addressed to:

Sportsman’s Warehouse Holdings, Inc.
Attn: Secretary
1475 West 9000 South, Suite A
West Jordan, Utah 84088

Any change to your proxy that is provided by telephone or the Internet must be submitted before the deadlines set forth above under “What is the deadline for voting my shares if I do not attend the Annual Meeting?”

If your shares are held in street name, you must contact your broker, bank or other nominee to find out how to change or revoke your voting instructions.

 

Who will bear the cost of this proxy solicitation?

We will bear the cost of solicitation of proxies. This includes the charges and expenses of preparing, assembling, and mailing the Proxy Statement and other soliciting materials and the charges and expenses of brokerage firms and others for forwarding solicitation materials to beneficial owners of our issued and outstanding Common Stock. Proxies will be solicited by mail, and may be solicited personally by directors, officers, or our employees, who will not receive any additional compensation for any such services.

Where can I find the voting results of the Annual Meeting?

Our intention is to announce the preliminary voting results at the Annual Meeting and to publish the final results within four business days after the Annual Meeting on a Current Report on Form 8-K to be filed with the SEC and which we will make available on our website at investors.sportsmans.com under “Financials & Filings”.

What do I do if I receive more than one proxy or set of voting instructions?

​If you received more than one proxy card or voting instruction form (if you receive your proxy materials by mail), your shares may be registered in different names or with different addresses or are in more than one account. You must separately vote the shares shown on each proxy card or voting instruction form that you received in order for all of your shares to be voted at the Annual Meeting.

If I share an address with another stockholder and received only one copy of the proxy materials, how do I obtain an additional copy?

We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, stockholders of record who have the same address and last name and did not receive their proxy materials electronically will receive only one copy of our proxy materials unless we receive contrary instructions from one or more of such stockholders. Upon oral or written request, we will deliver promptly a separate copy of the proxy materials to a stockholder at a shared address to which a single copy of proxy materials was delivered. If you are a stockholder of record at a shared address to which we delivered a single copy of the proxy materials and you desire to receive a separate copy of the proxy materials for the Annual Meeting or for our future meetings, or if you are a stockholder at a shared address to which we delivered multiple copies of the proxy materials and you desire to receive one copy in the future, please submit your request to the Householding Department of Broadridge Financial Solutions, Inc. at 51 Mercedes Way, Edgewood, New York 11717, or at 1-866-540-7095. If you are a beneficial stockholder, please contact your bank, broker or other nominee directly if you have questions, require additional copies of the proxy materials, wish to receive multiple reports by revoking your consent to householding or wish to request single copies of the proxy materials in the future.

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PROPOSAL 1 ELECTION OF DIRECTORS

Our Board of Directors is currently set at nine directors. On April 12, 2024, each of Erica Fortune, Gregory P. Hickey and Philip C. Williamson notified the Board of his or her intention to resign as a member of the Board effective immediately prior to the commencement of the Annual Meeting. As a result, the Board approved the reduction in the size of our Board from nine to six directors, effective immediately prior to the commencement of the Annual Meeting. At our 2023 annual meeting of stockholders, and upon recommendation by the Board, our stockholders voted to begin a phased-in declassification of the Board so that, beginning with the Annual Meeting, directors will be elected for one-year terms as their terms expire. Such phased-in transition is occurring as follows:

 

The terms of Mr. Becker and Mr. Sansom will expire at the Annual Meeting;
The terms of Ms. Bejar and Mr. McBee will expire at our 2025 annual meeting of stockholders; and
The terms of Mr. Stone and Ms. Walsh will expire at our 2026 annual meeting of stockholders;

As a result of the declassification of the Board, upon the expiration of the term of a class of directors, directors for that class will be elected for a new one-year term at the annual meeting of stockholders in the year in which their term expires. Each director’s term is subject to the election and qualification of his or her successor, or his or her earlier death, resignation or removal. Subject to any rights applicable to any then outstanding preferred stock, any vacancies on our Board may be filled only by the affirmative vote of a majority of the directors then in office.

The Nominating and Governance Committee of the Board is responsible for reviewing and recommending to the Board from time to time the experience, qualifications, attributes, skills or other criteria desired for directors and director candidates. In considering candidates for nomination or appointment to the Board, the Board considers such factors such as whether the director candidate has relevant expertise upon which to be able to offer advice and guidance to management, has sufficient time to devote to the affairs of the Company, has demonstrated excellence in his or her field, has the ability to exercise sound business judgment and has the commitment to rigorously represent the long-term interests of the Company’s stockholders. Candidates for director nominees are reviewed in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of stockholders. In conducting its assessment, the Board considers diversity, age, skills, and such other factors as it deems appropriate given the current needs of the Board and the Company, to maintain a balance of knowledge, experiences, background and capability. Although we do not have a formal diversity policy, we believe it is important to have an appropriate mix of diversity for the optimal functionality of the Board. As of the date of this Proxy Statement, three of our nine directors self-identify as "diverse" as such term is defined in Listing Rule 5605(f) of The Nasdaq Stock Market LLC ("Nasdaq") with three directors who self-identify as female and one director who self-identifies as an “underrepresented minority” as such term is defined in Nasdaq Listing Rule 5605(f). After the Annual Meeting, assuming the directors nominees herein are elected to the Board and giving effect to the resignations prior to the commencement of the Annual Meeting, two of our six directors will self-identify as "diverse" as such term is defined in Listing Rule 5605(f) of The Nasdaq Stock Market LLC ("Nasdaq") with three directors who self-identify as female and one director who self-identifies as an “underrepresented minority” as such term is defined in Nasdaq Listing Rule 5605(f). In the case of incumbent directors whose terms of office are set to expire, the Board reviews such directors’ overall service to the Company during their term, including the number of meetings attended, level of participation, quality of performance, and any other relationships and transactions that might impair such directors’ independence.

All of our directors bring to the Board a wealth of executive leadership experience. Below we identify and describe the key experience, qualifications, and skills our directors bring to the Board that are important in light of our businesses and structure. The directors’ experiences, qualifications, and skills that the Board considers in their re-nominations are included in their individual biographies.

 

 

 

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PROPOSAL 1 ELECTION OF DIRECTORS

 

Nominees for Election as Directors at this Annual Meeting

 

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Steven Becker, 57

Board Member

 

 

Director Since: January 2024

SPWH Committees:

Member of the Nominating and Governance Committee

 

KEY EXPERIENCE

Served in various roles with Tuesday Morning Corp., including as Chief Executive Officer and a member of the board of directors from December 2015 until May 2021, as Chairman of the Board from July 2012 until September 2015, and as Executive Chairman and head of the Office of the Chairman from September 2015 until December 2015
Prior to becoming CEO of Tuesday Morning Corp, spent 20 years in the investment management industry with a focus on investing in middle market public companies
Served as the co-managing partner at Becker Drapkin Management, L.P., whose predecessor, Greenway Capital, he founded in 2005
From 1997 to 2004, served as a partner at Special Situations Funds, a New York City based asset manager
Prior to joining Special Situations Funds, served as a part of the distressed debt and leveraged equities research team at Bankers Trust Securities
Began his career at Manley Fuller Asset Management in New York as a small cap analyst
Has extensive public company board experience, having served as a director of a variety of public and non-public companies including Hot Topic, Inc., an apparel retailer, PLATO Learning, Inc., an educational software company, Ruby Tuesday, a national restaurant company, Emcore, a semiconductor producer, Fuel Systems Solutions, a manufacturer of alternative energy systems, and Special Diversified Opportunities, a holding company that owns businesses in a variety of industries

SKILLS AND QUALIFICATIONS

Decades of experience as an investor, board member and executive leader across a variety of industries, including as a chief executive officer and board member in the retail sector.
Bachelor of Arts degree from Middlebury College
Juris Doctor from the University of Florida.

 

 

 

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PROPOSAL 1 ELECTION OF DIRECTORS

 

 

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Steven Sansom, 55

Board Member

 

 

Director Since: September 2023

SPWH Committees:

Member of the Compensation Committee

 

KEY EXPERIENCE

Has served as the founder and chairman of Steel Grove Capital Advisors and Steel Grove Family Office since September 2001
Served as founder, principal and member of the board of directors of Center Coast Capital Advisors, an independent investor in United States mid-stream energy infrastructure assets, from November 2007 until February 2018
Served as a vice president of Goldman Sachs & Co. between August 1993 and September 2001
Served in the Institutional Equity Capital Markets Group at Merrill Lynch Global Capital Markets from August 1991 to September 1993
Serves currently on the Executive Advisory Board of Brown Brothers Harriman Capital Partners, the middle markets private equity investment group at Brown Brothers Harriman & Co.
Serves currently as a member of several boards of directors, including the advisory board of Axxes Capital, a private markets investment firm and the Viome Life Sciences Advisory Board

SKILLS AND QUALIFICATIONS

Decades of experience as an investor, board member and executive leader across a variety of industries; service in senior positions at high-growth businesses in the logistics and real estate sectors and capital allocation expertise gained in such roles.
Bachelor's degree in Business from Millsaps College and also attended Harvard Business School's executive education program.

 

 

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PROPOSAL 1 ELECTION OF DIRECTORS

 

Directors Continuing in Office Until Our 2025 Annual Meeting of Stockholders

 

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Martha Bejar, 62

Board Member

 

 

Director Since: February 2019

SPWH Committees:

Chair of the Nominating and Governance Committee
Member of the Audit Committee

 

 

KEY EXPERIENCE

CEO and Director of Unium Inc., a WiFi software solution provider, from March 2017 to March 2018
CEO and Director at Flow Mobile Inc., a broadband wireless access solution provider, from January 2012 to December 2015
Chairperson and CEO of Wipro Infocrossing Cloud Computing Services.
Corporate Vice President for the Communications Sector at Microsoft Corp.
Has extensive public company board experience, having served as a director of a variety of public companies including Lumen Technologies, Inc.; CenturyLink Inc.; CommVault Systems, Inc.; Quadient S.A.; Mitel Systems

 

SKILLS AND QUALIFICATIONS

Executive leadership experience; technical expertise and extensive experience in the communications and technology industries.
Life Member of Council on Foreign Relations.
Advanced Management Program degree from Harvard University Business School.
Bachelor of Science in Industrial Engineering from the University of Miami.
Master of Business Administration from Nova Southeastern University.

 

 

 

 

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Richard McBee, 60

Chair of the Board

 

 

Director Since: November 2018

SPWH Committees:

Member of the Compensation Committee

 

KEY EXPERIENCE

Currently serves as President and Chief Executive Officer of CLEAResult Consulting, Inc., a position he has held since July 2021.
Served as President and Chief Executive Officer of Riverbed Technology from October 2019 to June 2021.
Served as President, Chief Executive Officer and Director of Mitel Networks Corporation (Nasdaq: MITL) from January 2011 to October 2019
Served as President of the Communications and Enterprise Group of Danaher Corporation (NYSE: DHR) from 2007 to 2011. He joined Danaher in 2007 as President, Tektronix Communications, following the acquisition by Danaher of Tektronix.
Spent 15 years with Tektronix and held a variety of positions of increasing responsibility, including Senior Vice President and General Manager, Communications Business Unit; Senior Vice President of Worldwide Sales, Service and Marketing; and Vice President of Marketing and Strategic Initiatives.

SKILLS AND QUALIFICATIONS

Strong leadership skills, experience as a Chief Executive Officer and prior experience as Chief Executive Officer of a public company.
Bachelor of Science from the United States Air Force Academy.
Master of Business Administration from the Chapman School of Business and Economics.

 

 

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PROPOSAL 1 ELECTION OF DIRECTORS

 

Directors Continuing in Office Until Our 2026 Annual Meeting of Stockholders

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Nancy A. Walsh, 63

Board Member

 

 

Director Since: August 2022

SPWH Committees:

Chair of the Audit Committee
Member of the Compensation Committee

 

 

 

KEY EXPERIENCE

Chief Financial Officer of Katapult Holdings, Inc. (Nasdaq: KPLT) since December 2022.
Served as the Executive Vice President and Chief Financial Officer of LL Flooring Holdings, Inc., a specialty retailer of hard-surface floorings, from September 2019 to November 2022
Served from January 2018 until April 2019 as Executive Vice President and Chief Financial Officer of Pier 1 Imports, Inc., a home furnishing and decor retailer. Pier 1 Imports, Inc. filed for Chapter 11 bankruptcy protection in February 2020.
Served from November 2015 until December 2017 as Executive Vice President and Chief Financial Officer of The Bon-Ton Stores, Inc., a department store chain. The Bon-Ton Stores, Inc. filed for Chapter 11 bankruptcy protection in February 2018.
Served in various financial positions, including as Senior Vice President of Finance, with Tapestry, Inc. (NYSE: TPR), formerly known as Coach, Inc., a fashion handbag, leather goods and apparel retailer from March 1999 to December 2013.

SKILLS AND QUALIFICATIONS

Executive leadership experience; experience as a Chief Financial Officer of multiple public companies.
Bachelor of Science in Zoology from the University of New Hampshire and holds a Master of Business Administration from Northeastern University.

 

 

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Paul Stone, 54

President and CEO

 

 

Director Since: November 2023

 

 

 

KEY EXPERIENCE

Served as President and Chief Operating Officer of Hertz Global Holdings, Inc. (Nasdaq: HTZ) from October 2021 to September 2023 after serving as Interim Chief Executive Officer and on the Board of Directors from May 2020 to October 2021.
Additionally served as Hertz's Executive Vice President and Chief Retail Operations Officer for North America from March 2018 to May 2020.
Served as the Chief Retail Officer of Cabela's Inc., and outdoor outfitter retail company from November 2015 to December 2017.
Prior to joining Cabela's, Mr. Stone spent 28 years with Sam's Club, a retail warehouse subsidiary of Walmart Inc. in various leadership roles.

SKILLS AND QUALIFICATIONS

Executive leadership experience and over 30 years of experience in the retail industry.

 

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PROPOSAL 1 ELECTION OF DIRECTORS

 

Skills Matrix

Our Nominating and Governance Committee utilizes a skills matrix as part of the Board’s annual evaluation, succession planning, and director nomination process. The goal is to ensure that the Board collectively possesses the relevant skills and backgrounds for effective governance, meaningful strategic planning and strong leadership that enhances financial performance and builds stakeholder value. The following skills matrix shows a summary of the skills and core competencies of our director nominees and continuing directors and should not be considered to be a complete list of each director’s strengths and contributions to the Board.

 

Skills

McBee

Becker

Bejar

Sansom

Stone

Walsh

Executive Management

X

X

X

X

X

X

Brand Positioning & Marketing

X

X

 

X

X

X

Omni-Channel Experience

X

 

 

X

X

X

Human Resources & Talent Management

X

 

 

X

X

 

Innovation & Technology

X

 

X

X

 

 

Supply Chain

X

X

 

 

X

 

Risk & Cybersecurity

X

 

X

X

 

X

Strategic Planning & Transformation

X

X

X

X

X

X

Environmental, Social & Governance

X

 

X

 

X

X

Accounting & Finance

X

X

X

X

X

X

 

Skills

Qualifications for the Skill

Executive Management

Business and strategic management experience from service in a significant leadership position, such as a chief executive officer, chief financial officer, or other senior leadership role

Brand Positioning & Marketing

Experience in developing and guiding strategic efforts to develop market share in new or existing markets, building brand awareness and enhancing enterprise reputation.

Omni-Channel Experience

Experience in use of technology to facilitate business operations and

customer service and/or customer relationship management.

Human Resources & Talent Management

Experience in managing and developing a large workforce, managing compensation, managing inclusion and diversity efforts, implementing succession planning and talent management, and/or managing other human capital initiatives.

Innovation & Technology

Experience in use of technology, digital platforms and new media to facilitate business operations and customer service.

Supply Chain

Experience in managing significant manufacturing and distribution operations.

Risk & Cybersecurity

Experience overseeing and managing company risk, including experience in information security, data privacy and cybersecurity.

Strategic Planning & Transformation

Experience defining and driving strategic direction and growth and managing the operations of a business or large organization.

Environmental, Social & Governance

Experience in environmental, social, and governance criteria and community affairs matters, including as part of a business and managing corporate social responsibility issues as business imperatives.

Accounting & Finance

Financial or accounting experience and an understanding of financial reporting, internal controls and compliance.

 

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PROPOSAL 1 ELECTION OF DIRECTORS

 

Nominees for Election

Upon the recommendation of the Nominating and Governance Committee, the Board has nominated Mr. Becker and Mr. Sansom for election to the Board to serve until the 2025 annual meeting of stockholders and until their respective successors are duly elected and qualified. Each of the nominees is currently a member of our Board of Directors. Mr. Becker and Mr. Sansom joined our Board in September 2023 and January 2024, respectively. Each of Mr. Becker and Mr. Sansom is standing for election to our Board for the first time. Mr. Becker was initially identified as a potential director nominee by one of our stockholders. Mr. Sansom was initially identified as a potential director nominee by one of our existing non-management directors. The Nominating and Governance Committee then assessed the potential candidacy of each of Mr. Becker and Mr. Sansom in light of the director criteria included in our Corporate Governance Guidelines. Each member of the Nominating and Governance Committee, as well as certain other directors, interviewed Mr. Becker and Mr. Sansom. Following these interviews, the Board of Directors then met, discussed and approved the appointments of Mr. Becker and Mr. Sansom to the Board of Directors. The nominees for election have consented to be named in this Proxy Statement and to serve as directors if elected. If any of the nominees are unable or unwilling for good cause to serve as directors if elected (which is not anticipated), the persons who are designated as proxy holders may exercise discretionary authority to vote for a substitute nominee selected by our Board or our Board may reduce the number of directors serving on the Board.

Vote Required for Election of Directors

Each director nominee will be elected to the Board at the Annual Meeting if he or she receives a majority of the votes cast with respect to his or her election (that is, the number of votes cast “FOR” the nominee must exceed the number of votes cast “AGAINST” the nominee). Broker non-votes and abstentions are not treated as votes cast and therefore will not be considered in determining the outcome of the election of directors.

Our majority voting standard includes a director resignation policy that requires an incumbent director who stands for election to the Board but who fails to receive a majority of the votes cast in an uncontested election of directors to tender his or her resignation to the Secretary of the Company promptly following certification of the election results. In such event, the Board, considering the recommendation of the Nominating and Governance Committee of the Board, must decide whether to accept or reject the resignation and publicly disclose its decision, including the rationale behind any decision to reject the tendered resignation, within 90 days following certification of the election results. The Nominating and Governance Committee and the Board may, in making their recommendation or decision, as applicable, consider any factors and other information that they consider appropriate and relevant.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE DIRECTOR NOMINEES NAMED IN THIS PROXY STATEMENT.

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CORPORATE GOVERNANCE

Corporate Governance Guidelines

The Board has developed corporate governance practices to help it fulfill its responsibility to stockholders to oversee the work of management in the conduct of the Company’s business and to seek to serve the long-term interests of stockholders. The Company’s corporate governance practices are memorialized in our Corporate Governance Guidelines which direct our Board’s actions with respect to, among other things, our Board composition and director qualifications, composition of the Board’s standing committees, stockholder communications with the Board, succession planning and the Board’s annual performance evaluation. A current copy of our Corporate Governance Guidelines is available on our website at investors.sportsmans.com.

Annual Board Evaluation

Pursuant to our Corporate Governance Guidelines and the charter of the Nominating and Governance Committee, the Nominating and Governance Committee oversees an annual evaluation of the performance of the Board and each of its committees in order to assess the overall effectiveness of the Board and its committees. The evaluation process is designed to facilitate ongoing, systematic examination of the Board’s effectiveness and accountability, and to identify opportunities for improving its operations and procedures. The effectiveness of individual directors is considered each year when the directors stand for re-nomination

Director Independence

Our Board has determined that each of Mses. Bejar, Fortune and Walsh and Messrs. Becker, Hickey, McBee, Sansom and Williamson qualify as an “independent director” under Nasdaq Listing Rule 5605(a)(2). Mr. Stone does not currently qualify as an independent director because he is employed as our President and Chief Executive Officer. In addition, our Board previously affirmatively determined that Mr. Schneider, the former Chair of our Board, was an independent director during the periods of fiscal year 2024 that he did not serve as our Interim President and Interim Chief Executive Officer. Our Board previously determined that Mr. Barker, a former member of our Board, was not an independent director because he was employed as our President and Chief Executive Officer.

In making its independence determinations, our Board considered the relationships that each of these non-employee directors has with the Company, including the transactions listed below, and all other facts and circumstances our Board deemed relevant in determining their independence. Mr. Williamson is currently a Brand Ambassador for Williamson-Dickie Mfg. Co., and was previously its President and Chief Executive Officer from 1997 to 2017. Williamson-Dickie Mfg. Co. is owned by V. F. Corporation. V. F. Corporation sells certain products to us in the ordinary course of business. The amount involved in these transactions represented less than 1% of V. F. Corporation’s annual gross revenue for each of fiscal year 2021, 2022 and 2023. Our Board affirmatively determined that our transactions with V. F. Corporation did not, and would not, interfere with Mr. Williamson’s exercise of independent judgment in carrying out his responsibilities as a director. As required under applicable Nasdaq rules, our independent directors meet in regularly scheduled executive sessions at which only independent directors are present.

Meetings and Attendance

During fiscal year 2023, our Board held 32 meetings, the Audit Committee held four meetings, the Compensation Committee held 10 meetings and the Nominating and Governance Committee held 7 meetings. Each of our directors attended at least 75% of the aggregate meetings of the Board and the committees of the Board on which he or she served during fiscal year 2023.

It is the Board’s policy to encourage directors to attend each annual meeting of stockholders, either in person or telephonically. Our Board expects each director to attend the Annual Meeting. All of our then-current directors attended our 2023 annual meeting of stockholders.

 

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CORPORATE GOVERNANCE

 

Board Leadership and Structure

Our Corporate Governance Guidelines provide that the Board will exercise its discretion in combining or separating the offices of the Chair of the Board and the Chief Executive Officer, based on the Board’s judgment of the best interests of the Company and its stockholders from time to time. The Board recognizes that the roles of Chief Executive Officer and Chair of the Board are distinct. While the Chief Executive Officer is responsible for setting our strategic direction and for our day-to-day leadership and performance, the Chair of the Board provides guidance to the Chief Executive Officer and sets the agenda for, and presides over, meetings of the Board. The Board believes that participation of the Chief Executive Officer as a director, while keeping the roles of Chief Executive Officer and Chair of the Board separate, provides the proper balance between independence and management participation at this time. Mr. Stone currently serves as our Chief Executive Officer and Mr. McBee currently serves as our independent Chair of the Board.

Board’s Role in Risk Oversight

One of the principal functions of our Board is to provide oversight concerning the assessment and management of risk related to our business. The Board is involved in risk oversight through direct decision-making authority with respect to fundamental financial and business strategies and major corporate activities, including material acquisitions and financings, as well as through its oversight of management and the committees of the Board. Management is responsible for identifying the material risks facing the Company, implementing appropriate risk management strategies and ensuring that information with respect to material risks is shared with the Board or the appropriate Board committee. In connection with this responsibility, members of management provide regular reports to the Board regarding business operations and strategic planning, financial planning and budgeting and regulatory matters, including any material risk to the Company relating to such matters.

The Board has delegated oversight for specific areas of risk exposure to committees of the Board as follows:

1.
The Audit Committee is responsible for discussing the Company’s overall risk assessment and risk management policies with management, our internal auditors and our independent registered public accounting firm, as well as the Company’s plans to monitor and control any financial risk exposure. The Audit Committee is also responsible for primary risk oversight related to our financial reporting, accounting and internal controls. In addition, the Audit Committee reviews all related party transactions under Item 404(a) of Regulation S-K, including the risks relating to those transactions impacting the Company. The Audit Committee is also responsible for overseeing the Company's cybersecurity risk management processes, including oversight and mitigation risks from cybersecurity threats.
2.
The Compensation Committee reviews the Company’s incentive compensation arrangements to help ensure that they do not encourage unnecessary risk-taking. See below under “Compensation Risk Assessment.”
3.
The Nominating and Governance Committee reviews corporate governance-related risks impacting the Company, including those related to environmental and social matters.

At each regular meeting of our Board, the chairperson of each committee reports to the full Board regarding the matters reported and discussed at any committee meetings, including any matters relating to risk assessment or risk management. Upon the request of the committees, our Chief Executive Officer and Chief Financial Officer attend meetings of these committees when they are not in executive session, and often report on matters that may not be otherwise addressed at these meetings. Also, at least annually the Board receives an update relating to cybersecurity risks facing the Company and the steps that the Company has taken in order to address these risks. In addition, our directors are encouraged to communicate directly with members of management regarding matters of interest, including matters related to risk, at times when meetings are not being held. Our Board believes that the processes it has established for overseeing risk would be effective under a variety of leadership frameworks and therefore do not materially affect its choice of leadership structure as described under “Board Leadership and Structure” above.

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Compensation Risk Assessment

We believe that risks arising from our compensation policies and practices for our employees are not reasonably likely to encourage unnecessary or excessive risk taking that could have a material adverse effect on the Company. In addition, the Compensation Committee believes the mix and design of the elements of our executive compensation program do not encourage management to assume unnecessary or excessive risks that could have a material adverse effect on the Company.

Policy on Hedging and Pledging

The Company recognizes that hedging against losses in Company stock is not appropriate or acceptable trading activity for individuals employed by or serving the Company. The Company has incorporated prohibitions on various hedging activities within its insider trading policy, which policy applies to directors, officers and employees. The policy prohibits all directors, officers and employees from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds), or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the Company’s securities. The policy also prohibits pledging any Company stock or equity awards as collateral for any margin account, or other form of credit arrangement.

Human Capital

We appreciate the importance of retention, growth and development of our employees. We strive to provide competitive compensation and benefits packages, opportunities for advancement, and extensive training programs and learning opportunities for our employees. We strive to ensure pay equity between our female employees and male employees performing equal or substantially similar work. We are also focused on understanding our diversity and inclusion strengths and opportunities and executing on a strategy to support further progress.

We believe that the recruitment, training and knowledge of our employees and the consistency and quality of the service they deliver are central to our success. We emphasize deep product knowledge for store managers and sales associates during both the hiring and training stages. We hire most of our sales associates for a specific department or product category. One of our unique assets is a designated training room located at our headquarters. Our training room is used frequently for firm-wide training programs and by vendors to stage training demonstrations for new products.

Committees of the Board of Directors

The Board has three standing committees: the Audit Committee, the Compensation Committee, and the Nominating and Governance Committee. All committee members are independent directors and meet the independence requirements under Nasdaq for the applicable committee on which they serve. In addition, each member of the Audit Committee also meets the independence requirements under Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and satisfies the additional financial literacy requirements of the Nasdaq rules. Our Board has also determined that each member of the Compensation Committee satisfies the additional independence requirements specific to compensation committee membership under applicable rules of Nasdaq. In making this determination, the Board considered whether the director has a relationship with the Company that is material to the director’s ability to be independent from management in connection with the duties of a member of the Compensation Committee.

The charters of these committees are available on our website at investors.sportsmans.com.

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The current composition of each of our three standing committees is set forth below. The Board intends to revise its committee memberships immediately after the Annual Meeting after Ms. Fortune, Mr. Hickey and Mr. Williamson have resigned. The Board has not yet determined the composition of each committee as it will be in place after the Annual Meeting. Mr. Stone, our President and Chief Executive Officer, does not serve on any committees of the Board.

 

Name

Audit Committee

Compensation Committee

Nominating and Governance Committee

Steven R. Becker

 

 

X

Martha Bejar

X

Chairperson

Erica Fortune

 

 

X

Gregory P. Hickey

X

 

X

Richard McBee

 

 

 

X

 

 

Steven W. Sansom

 

 

 

X

 

 

Nancy A. Walsh

 

Chairperson

 

X

 

 

Philip C. Williamson

 

X

 

Chairperson

 

 

Audit Committee

Our Audit Committee is responsible for, among other things:

selecting and hiring our independent registered public accounting firm and approving the audit and non-audit services to be performed by our independent registered public accounting firm;
evaluating the qualifications, performance and independence of our independent registered public accounting firm;
monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters;
reviewing the adequacy and effectiveness of our internal control policies and procedures;
preparing the audit committee report required by the SEC to be included in our annual proxy statement;
discussing the scope and results of the audit with the independent registered public accounting firm and reviewing with management and the independent registered public accounting firm our interim and year-end operating results; and
reviewing our exposure to risk and reviewing any significant financial risk exposures facing us and management’s plans to monitor, control and/or minimize such exposures, including cybersecurity risk management processes and mitigation of risks from cybersecurity threats.
approving related party transactions.

Our Board has determined that each of Mr. Hickey and Ms. Walsh qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d) of Regulation S-K.

Compensation Committee

Our Compensation Committee is responsible for, among other things:

reviewing and approving the compensation of our executive officers, including annual base salary, annual incentive bonuses, specific performance goals relevant to their compensation, equity compensation, and employment;
reviewing succession planning for our Chief Executive Officer and management;

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administering and determining any award grants under our equity incentive plan;
recommending to the Board the compensation of our directors;
preparing any compensation committee report required by the SEC to be included in our annual proxy statement; and
periodically reviewing risks related to our compensation policies and practices.

The Compensation Committee has the power to appoint, from among its members, subcommittees, each of which may have (as determined by the Compensation Committee) the full power of the Compensation Committee; provided, however, that the Compensation Committee shall not delegate to a subcommittee any power or authority required by law, regulation or listing standard to be exercised by the Compensation Committee as a whole. The Compensation Committee has not delegated and has no current intention to delegate any of its authority with respect to determining executive officer compensation to any subcommittee. In determining compensation for executive officers other than the Chief Executive Officer, the Compensation Committee may consider, among other things, the recommendations of the Chief Executive Officer and other officers.

In 2023, our Compensation Committee engaged the services of Frederic W. Cook & Co. (“FW Cook”), a compensation consulting firm, to advise the Compensation Committee regarding the amount and types of compensation that we provide to our executives and directors and how our compensation practices compare to the compensation practices of other selected companies. FW Cook does not provide any services to us other than the services provided to the Compensation Committee. The Compensation Committee believes that FW Cook does not have any conflicts of interest in advising the Compensation Committee under applicable SEC rules or Nasdaq listing standards. The Compensation Committee has assessed the independence of FW Cook pursuant to SEC rules and Nasdaq listing standards and concluded that no conflict of interest exists that would prevent FW Cook from independently representing the committee.

Nominating and Governance Committee

Our Nominating and Governance committee is responsible for, among other things:

assisting our Board in identifying prospective director nominees and recommending nominees for each annual meeting of stockholders to our Board;
reviewing developments in corporate governance practices and developing and recommending corporate governance guidelines to our Board;
overseeing the evaluation of our Board and management;
reviewing the Company’s environmental and social responsibility policies and practices; and
recommending members for each Board committee of our Board.

Director Candidates Recommended by Stockholders

The Nominating and Governance Committee will consider director candidates recommended by stockholders. Properly communicated stockholder-recommended director candidates will be considered in the same manner and using the same criteria as used for any other director candidate. To be properly communicated, stockholders desiring to recommend candidates for consideration by the Nominating and Governance Committee and the Board should submit their recommendation in writing to the attention of the Secretary, Sportsman’s Warehouse Holdings, Inc., 1475 West 9000 South, West Jordan, Utah 84088, no later than the January 1st prior to the next annual meeting of stockholders, together with all information about the stockholder and the candidate that would be required if the stockholder was nominating the candidate for election to the Board. For additional information on such requirements, see “Proposals of Stockholders and Director Nominations for 2025 Annual Meeting.” The Nominating and Governance Committee may request additional information concerning such director candidate as it deems reasonably required to determine the eligibility and qualification of the director candidate to serve as a member of the Board. For a discussion of the factors

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and other criteria the Nominating and Governance Committee and Board will consider when evaluating a director candidate, see “Proposal 1—Election of Directors.”

Please note that stockholders who wish to nominate a person for election as a director in connection with an annual meeting of stockholders (as opposed to making a recommendation to the Nominating and Governance Committee as described above) must deliver written notice to our Secretary as described further under “Proposals of Stockholders and Director Nominations for 2025 Annual Meeting.”

Communications with the Board of Directors

Individuals may contact our entire Board, an individual director, the independent directors as a group, any Board committee or any Chairperson of any Board committee by sending a written communication to the Board, the individual director, the independent directors as a group, any Board Committee or any Chairperson of any Board committee in care of:

Sportsman’s Warehouse Holdings, Inc.

Attn: Secretary

1475 West 9000 South

West Jordan, Utah 84088

Each communication must set forth the name and address of the stockholder on whose behalf the communication is sent and should be addressed to the Board, any such individual director, the independent directors as a group, Board committee or Chairperson of any Board committee by either name or title. Each communication will be reviewed by the Company’s Secretary to determine whether it is appropriate for presentation to the directors. Junk mail, job inquiries, business solicitations, or hostile communications will not be presented. In addition, if requested by stockholders, when appropriate, the Lead Independent Director will also be available for consultation and direct communication with stockholders.

Code of Conduct and Ethics

The Company has adopted a Code of Conduct and Ethics applicable to our employees, directors, and officers. This Code of Conduct and Ethics is applicable to our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. The code is available on our website at investors.sportsmans.com. If we ever were to amend or waive any provision that applies to our principal executive officer, principal financial officer, principal accounting officer or any person performing similar functions, we intend to promptly disclose any such amendments or waivers on our website at investors.sportsmans.com, rather than by filing a Current Report on Form 8-K.

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EXECUTIVE OFFICERS OF THE COMPANY

The table below sets forth certain information regarding our executive officers as of the date of this Proxy Statement:

 

Name

Age

Position

Paul Stone

54

President and Chief Executive Officer

Jeff White

39

Chief Financial Officer and Secretary

 

See “Proposal 1—Election of Directors— Directors Continuing in Office Until Our 2026 Annual Meeting of Stockholders” for information concerning the business experience of Mr. Stone. Information concerning the business experience of our other executive officer is set forth below.

Jeff White has served as our Chief Financial Officer since January 2022 and our Secretary since September 2021. Mr. White previously served as our Vice President of Finance, Chief Accounting Officer and Interim Chief Financial Officer from September 2021 to January 2022. From August 2016 to September 2021, Mr. White served as the Company’s Senior Director, Finance and Accounting. Prior to his time at the Company, Mr. White served as Manager at KPMG LLP from August 2011 to August 2016. Mr. White holds a Bachelors of Arts and Master’s degree in accountancy from the University of Utah and is a licensed certified public accountant in the state of Utah.

There are no family relationships between or among any of our executive officers or directors.

 

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COMPENSATION DISCUSSION AND ANALYSIS

Overview

This Compensation Discussion and Analysis discusses our executive compensation policies and how and why our Compensation Committee arrived at specific compensation decisions for the fiscal year ended February 3, 2024 (sometimes referred to as “fiscal year 2023”) for the individuals who served as our principal executive officer and principal financial officer during such fiscal year, collectively referred to as our “named executive officers” for fiscal year 2023:

 

 

Name

 

Position(s)

Paul Stone

 

President and Chief Executive Officer

Jon Barker

 

Former President and Chief Executive Officer

Joseph P. Schneider

 

Former Interim President and Interim Chief Executive Officer

Jeff White

Chief Financial Officer and Secretary

 

We did not have any other “executive officers” (as defined in Rule 3b-7 under the Exchange Act) during fiscal year 2023.

 

Leadership Transitions During Fiscal Year 2023

 

On April 14, 2023, Mr. Barker, our previous President and Chief Executive Officer and a member of the Board, retired and resigned from such roles. As a result, on April 14, 2023, the Board appointed Mr. Schneider, the Chairman of the Board, to serve as Interim President and Interim Chief Executive Officer and Ms. Bejar, the Chair of the Nominating and Governance Committee of the Board, to serve as Lead Independent Director. Mr. Schneider retired and voluntarily resigned from his positions as Interim President and Interim Chief Executive Officer , effective November 1, 2023, and resigned as a member of the Board, effective December 31, 2023. Mr. Stone became our Chief Executive Officer and President and was appointed as a member of the Board, in each case on November 1, 2023.

Executive Summary

The important features of our executive compensation program include the following:

A substantial portion of executive pay is tied to performance. We structure a significant portion of our named executive officers’ compensation to be variable, at risk and tied directly to our measurable performance.
Our executive bonuses are dependent on meeting corporate objectives. Our annual performance-based bonus opportunities for all of our named executive officers are dependent upon our achievement of annual corporate objectives established each year and the individual officer’s contributions towards such corporate objectives.
We emphasize long-term equity incentives. Equity awards are an integral part of our executive compensation program, and comprise the primary “at-risk” portion of our named executive officer compensation package. These awards strongly align our executive officers’ interests with those of our stockholders by providing a continuing financial incentive to maximize long-term value for our stockholders and by encouraging our executive officers to remain employed with us on a long-term basis.
We do not provide our executive officers with any excise tax gross ups.
We generally do not provide executive fringe benefits or perquisites to our executives, such as car allowances.
Our Compensation Committee has retained an independent third-party compensation consultant for guidance in making compensation decisions. The compensation consultant advises the Compensation Committee on market practices, including identifying a peer group of companies and their compensation practices, so that our Compensation Committee can regularly assess the Company's individual and total

 

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compensation programs against these peer companies, the general marketplace and other industry data points.
We prohibit hedging and pledging of Company stock.
We engage with our shareholders on the topic of executive compensation to understand their views on the structure of our pay programs to effectively incentivize and retain key talent, while creating long-term value for our investors.

Advisory Vote on Named Executive Officer Compensation, "Say-on-Pay"

At last year’s annual meeting of stockholders, approximately 68% of votes cast approved the “say-on-pay” proposal regarding the compensation awarded to our named executive officers. We take the views of our stockholders seriously and, after last year’s annual meeting of stockholders, determined that it would be appropriate to consult with stockholders to better understand any concerns that they may have regarding our executive compensation program.

Stockholder Feedback on Executive Compensation

As a result of our 2023 "say-on-pay" vote results, we reached out to stockholders representing approximately 65% of the Company's outstanding shares and engaged with stockholders representing approximately 60% of the Company's outstanding shares, including both passive and active investors. Either the Chair of the Board at the time of such meetings or the Chair of the Compensation Committee at the time of such meetings participated in each of the conversations. While many of our largest stockholders were generally supportive of our pay programs, they provided the following suggestions for refinement for the Compensation Committee's consideration:

At least 50% of long term incentives should be performance contingent for all named executive officers.
Relative total shareholder return ("TSR") should be considered as a performance measure in our long term incentive program.

 

In light of this feedback, the Compensation Committee considers the following information to be important for purposes of understanding the decisions made with respect to fiscal year 2023 compensation. Each of these points is discussed in more detail later in this Compensation Discussion & Analysis:

In fiscal year 2023 we awarded 50% performance contingent long term incentives to Mr. White, who was our only ongoing named executive officer. We awarded time-based awards to Mr. Schneider in recognition of the fact that performance-based awards would not be aligned with the interim nature of his CEO role, and he forfeited the unvested portion of his award upon termination of employment. Mr. Barker did not receive an equity award in fiscal year 2023.
In fiscal year 2023 and early fiscal 2024, we provided Mr. Stone with time-based equity awards in connection with his commencement of employment (as required by his employment agreement), as these awards were determined to be necessary in order to secure his employment , and because the grants occurred prior to the annual process pursuant to which we set performance goals and grant performance awards. His annual grants made in fiscal 2024 are 50% time-based and 50% performance-based.
The Compensation Committee considered the inclusion of relative TSR as a PSU metric, but instead chose a design that would directly focus executives on achieving the Company’s operating goals, which the Compensation Committee believes will in turn create shareholder value. In making this decision, the Compensation Committee noted that relative TSR is an uncommon measure among the company’s peer group of retail companies, with only two peers using this design.

 

While compensation decisions had already been made with respect to fiscal year 2023 and the CEO's hire at the time that we received this feedback, in response to the views expressed by stockholders, the Compensation Committee has committed to the following in fiscal year 2024:

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Restructuring our compensation plans to focus on incentives aligned with a return to profitability, with a significant amount compensation to be "at risk".
Increasing our focus on performance awards for our NEOs to create stronger alignment between company performance and stockholder returns. We granted only performance-based awards to our CFO for fiscal year 2024 annual awards. As noted above, under the terms of Mr. Stone’s employment agreement his fiscal year 2024 awards comprised 50% performance-based awards and 50% time-based awards. This creates strong alignment between company performance and delivered compensation.
Implementing three-year cliff vesting on all aspects of officers' long-term incentives to enhance a long-term outlook (in fiscal year 2023 our performance-based awards had three year cliff vesting, but annual time vested RSUs vested annually).

 

 

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Advisory Vote on the Frequency of Named Executive Officer Compensation, "Say-on-Frequency"

At our 2020 annual meeting of stockholders, our stockholders indicated their approval of the recommendation that we solicit a say-on-pay vote on an annual basis (such vote on the frequency of the say-on-pay vote is commonly referred to as a “say-on-frequency” vote). A "say-on-frequency" vote is a non-binding, advisory vote that enables stockholders to express their preference as to how often they would like companies to hold an advisory vote on executive compensation. We have adopted a policy that is consistent with that preference and, accordingly, we are holding a say-on-pay vote on an annual basis. A “say-on-frequency” vote is required every six years, and as such, our next say-on-frequency vote will be in 2026.

Objectives, Philosophy and Elements of Executive Compensation

Our compensation program aims to achieve the following main objectives:

align the interests of our executives with those of the stockholders;
attract, motivate, reward and retain the top contributors upon whom, in large part, our success depends;
be competitive with compensation programs for companies of similar size and complexity with whom we compete for talent, including direct competitors;
provide compensation based upon the short-term and long-term performance of both the individual executive and the Company; and
strengthen the relationship between pay and performance by emphasizing variable, at-risk compensation that is dependent upon the successful achievement of specified corporate and individual goals.

Our executive compensation program generally consists of, and is intended to strike a balance among, the following three principal components: base salary, annual performance-based bonuses and long-term incentive compensation. We also provide some of our executive officers with benefits available to all our employees, including retirement benefits under the Company’s 401(k) plan and participation in employee benefit plans. The following chart summarizes the three main elements of compensation, their objectives and key features.

 

Element of Compensation

Objectives

Key Features

Base Salary (fixed cash)

Provides financial stability and security through a fixed amount of cash for performing job responsibilities.

Generally reviewed annually and determined based on a number of factors (including individual performance and the overall performance of our Company) and by reference, in part, to market data provided by our independent compensation consultant.

 

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Element of Compensation

Objectives

Key Features

Performance Bonus

(at-risk cash)

Motivates and rewards for attaining key annual corporate performance goals and individual contributions that relate to our key business objectives.

Target bonus amounts are generally reviewed annually and determined based upon positions that have similar impact on the organization and competitive bonus opportunities in our market. Bonus opportunities are dependent upon achievement of specific corporate performance objectives consistent with our long-term strategic plan and individual performance objectives that relate to the officer’s role and expected contribution toward reaching our corporate goals, generally determined by the Compensation Committee and communicated at the beginning of the year. Actual bonus amounts earned are determined after the end of the year, taking into account achievement of corporate objectives.

 

Long-Term Incentive

(at-risk equity)

Motivates and rewards for long-term Company performance; aligns executives’ interests with stockholder interests and changes in stockholder value.


Attracts highly qualified executives and encourages their continued employment over the long-term.

Equity opportunities are generally reviewed annually and may be granted during the first half of the year or as appropriate during the year for new hires, promotions, or other special circumstances.


Individual award grant values are determined based on a number of factors, including current corporate and individual performance and market data provided by our independent compensation consultant.

 

 

We focus on providing a competitive compensation package to our executive officers, which provides significant short- and long-term incentives. We believe that this approach provides an appropriate blend of compensation elements to maximize stockholder value.

We do not have any formal policies for allocating compensation among salary, performance bonus awards and equity grants, short-term and long-term compensation or among cash and non-cash compensation. Instead, the Compensation Committee uses its judgment to establish a total compensation program for each named executive officer that is a mix of current, short-term and long-term incentive compensation, and cash and non-cash compensation, that it believes appropriate to achieve the goals of our executive compensation program and our corporate objectives. However, historically we have structured a significant portion of the named executive officers’ total target compensation so that it is comprised of performance-based bonus opportunities and long-term equity awards, in order to align the executive officers’ incentives with the interests of our stockholders and our corporate goals.

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How We Determine Executive Compensation

Role of our Compensation Committee, Management and the Board

The Compensation Committee is appointed by the Board and has responsibilities related to the compensation of the Company’s directors, officers, and employees and the development and administration of the Company’s compensation plans. For details on the Compensation Committee’s oversight of the executive compensation program, see the section titled “Corporate Governance—Committees of the Board of Directors.” Our Compensation Committee consists solely of independent members of the Board.

The Compensation Committee reviews all compensation paid to our executive officers, including our named executive officers. The Chief Executive Officer evaluates and provides to the Compensation Committee performance assessments and compensation recommendations. While the Chief Executive Officer discusses his recommendations for his direct reports with the Compensation Committee, he does not participate in the deliberations concerning, or the determination of, his own compensation. The Compensation Committee discusses and makes final determinations with respect to executive compensation matters without the Chief Executive Officer present during discussions of the Chief Executive Officer’s compensation. From time to time, various other members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, provide financial or other background information or advice or otherwise participate in the Compensation Committee meetings.

The Compensation Committee meets periodically throughout the year to manage and evaluate our executive compensation program, and generally determines the principal components of compensation (base salary, performance bonus and equity awards) for our executive officers on an annual basis; however, decisions may occur at other times for new hires, promotions or other special circumstances as our Compensation Committee determines appropriate. The Compensation Committee does not delegate authority to approve executive officer compensation. The Compensation Committee does not maintain a formal policy regarding the timing of equity awards to our executive officers.

Role of Compensation Consultant

The Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. The Compensation Committee has retained FW Cook as its compensation consultant.

The Compensation Committee has analyzed whether the work of FW Cook as compensation consultant raises any conflict of interest, taking into account relevant factors in accordance with SEC rules and Nasdaq listing standards. Based on its analysis, our Compensation Committee determined that the work of FW Cook and the individual compensation advisors employed by FW Cook does not create any conflict of interest pursuant to the SEC rules and Nasdaq listing standards.

Use of Competitive Market Compensation Data

The Compensation Committee believes that it is important when making its compensation decisions to be informed as to the current practices of comparable public companies with which we compete for top talent. To this end, the Compensation Committee directed FW Cook to develop a proposed list of our peer group companies to be used in connection with assessing the compensation practices of the publicly traded companies with whom we compete or are considered specialty retailers.

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FW Cook proposed, and the Compensation Committee approved, a group of companies that would be appropriate peers based on Sportsman’s Warehouse’s industry focus and size based on employee headcount, revenues and market capitalization. The peer group with respect to fiscal year 2023 is as follows:

Peer Group

Academy Sports & Outdoors

Genesco

Big 5 Sporting Goods

Haverty Furniture

Boot Barn

Hibbett Sports

The Buckle

LL Flooring

Caleres

Party City

Citi Trends

Sally Beauty

The Container Store

Shoe Carnival

Designer Brands

Zumiez

Using data compiled from the peer companies, FW Cook completed an assessment of our executive compensation to inform the Compensation Committee’s determinations regarding executive compensation for fiscal year 2023. FW Cook prepared and the Compensation Committee reviewed, a range of market data reference points (generally at the 25th, 50th, and 75th percentiles of the market data) with respect to base salary, annual incentives, equity compensation, total target cash compensation (base salary and the target annual incentive) and total direct compensation (total target cash compensation and equity compensation) with respect to each of our named executive officers. The Compensation Committee did not target pay at any particular percentile of the market data, but rather reviewed these market data reference points as a helpful reference point in making fiscal year 2023 compensation decisions. Market data is only one of the factors that the Compensation Committee considers in making compensation decisions. The Compensation Committee considers other factors as described below under “Factors Used in Determining Executive Compensation.”

Factors Used in Determining Executive Compensation

Our Compensation Committee sets the compensation of our executive officers at levels they determine to be competitive and appropriate for each executive officer, using their professional experience and judgment. Pay decisions are not made by use of a formulaic approach or benchmark; the Compensation Committee believes that executive pay decisions require consideration of a multitude of relevant factors which may vary from year to year. In making executive compensation decisions, the Compensation Committee generally takes into consideration the factors listed below.

company performance and existing business needs;
each executive officer’s individual performance, scope of job function and the critical skill set of the executive officer to the Company’s future performance;
the need to attract new talent to our executive team and retain existing talent in a highly competitive industry;
general market practice, as described above under “Use of Competitive Market Compensation Data”; and
recommendations from consultants on compensation policy determinations for our executive officers.

Fiscal Year 2023 Executive Compensation Program

Base Salary

In connection with Mr. Stone's appointment as Chief Executive Officer in November 2023, he entered into an employment agreement, pursuant to which his annual base salary was set at $1,100,000. In March 2023, Mr. White's base annual salary was increased from $350,000 to $475,000.

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COMPENSATION DISCUSSION AND ANALYSIS

 

During Mr. Schneider’s term as Interim President and Interim Chief Executive Officer, we paid Mr. Schneider an annual base salary of $1,200,000. Mr. Barker was receiving an annual base salary of $975,000 upon his retirement on April 14, 2023.

Annual Performance Bonus

The Company maintains an annual bonus program, pursuant to which our executives may earn cash bonuses based on upon the achievement of corporate performance goals. The Employment Agreement for Mr. Stone provided that his annual bonus for fiscal year 2023 was guaranteed at the full target amount of 150% of his base salary, pro-rated based on his start date. His employment agreement also provides that he will have a target annual bonus opportunity of 150% of his base salary beginning with the Company’s fiscal year 2024, subject to review and adjustment by the Company in its reasonable discretion. The target bonus for Mr. White was 70% of his annual base salary. As shown in the table below, the bonus program for fiscal year 2023 was based on the achievement of goals relating to adjusted EBITDA margin, gross margin and net sales growth, weighted 40%, 40% and 20%, respectively. Mr. Barker did not receive a bonus for fiscal year 2023 because he retired prior to his bonus being established or paid. Mr. Schneider was not eligible for an annual performance bonus.

 

Adjusted EBITDA Margin Goals

Adjusted EBITDA Margin Results

Total Gross Margin Goals

Total Gross Margin Results

Net Sales Growth Goals

Net Sales Growth Results

Threshold: 0% payout if <= 5.15%

1.9% (0% payout)

Threshold: 0% payout if <= 32.75%

29.8% (0% payout)

Threshold: 0% payout if <= 0.00%

Negative 8.0% (0% payout)

 

 

 

 

 

 

Target: 100% payout at 6.55%

 

Target: 100% payout at 33.25%

 

Target: 100% payout at 3.25%

 

 

 

 

 

 

 

Maximum: 200% payout at 7.10%

 

Maximum: 200% payout at 33.50%

 

Maximum: 200% payout at 7.00%

 

 

 

 

 

 

 

 

For purposes of the 2023 performance bonuses, “Adjusted EBITDA Margin” is Adjusted EBITDA of the Company divided by net sales of the Company determined in accordance with GAAP. “Adjusted EBITDA” is net (loss) income of the Company as determined in accordance with GAAP plus interest expense, income tax (benefit) expense, depreciation and amortization, stock-based compensation expense, director and officer transition costs, expenses related to the implementation of our cost reduction plan, legal settlements and related fees and expenses that are not indicative of ongoing expenses, and any other adjustments to net (loss) income disclosed by the Company in its filings with the Securities and Exchange Commission to determine Adjusted EBITDA. “Gross margin” is gross profit divided by net sales, in each case as determined in accordance with GAAP. “Net sales growth” is the increase in net sales for fiscal year 2023 compared to fiscal year 2022, in each case as determined in accordance with GAAP.

 

Based on this below-threshold achievement, Mr. White did not receive an annual bonus during fiscal year 2023 pursuant to the annual bonus program, which illustrates the alignment between company performance and delivered pay. As Mr. Stone was employed by us for only three months of 2023, his employment agreement states that for 2023 his bonus is guaranteed at target (i.e., 150% of his base salary), pro-rated to reflect the period of time that he worked in 2023, resulting in a bonus payment of $399,808. This bonus was part of the pay package that was determined to be necessary in order to attract Mr. Stone to the Company. For 2024, Mr. Stone will participate in the Company’s annual bonus program, which has no guaranteed element.

Other Cash Bonuses

Mr. Stone received a $350,000 signing bonus on his start date of November 1, 2023 in connection with entering into his employment agreement. Mr. Stone must repay the signing bonus if he resigns without “Good Reason” or is terminated by the Company for “Gross Misconduct” (as such terms are defined in the Employment Agreement) prior to the November 1, 2024. This signing bonus was determined to be necessary in order to recruit Mr. Stone to the Company.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

On April 27, 2023, the Company entered into a retention agreement with Mr. White immediately following the departure of Mr. Barker given the criticality of retaining Mr. White in the coming year. Pursuant to the retention agreement, the Company paid a cash retention bonus to Mr. White of $87,500 (the “First Bonus Installment”) within 30 days of May 1, 2023 and agreed to pay a second cash retention bonus of $87,500 (the “Second Bonus Installment”) within 30 days of May 1, 2024 (the “Second Retention Date”). In the event that Mr. White voluntarily terminates his employment with the Company and its subsidiaries prior to the Second Retention Date for any reason or if the Company or its subsidiaries terminate Mr. White for cause prior to the Second Retention Date, Mr. White will not be eligible to receive the Second Bonus Installment and will be required to repay the Company an amount equal to the after-tax amount of the First Bonus Installment received by Mr. White. In the event that the Company or its subsidiaries terminate Mr. White’s employment without cause prior to the Second Retention Date then, subject to certain conditions, Mr. White will be eligible to receive the Second Bonus Installment and Mr. White will not be required to repay any portion of the First Bonus Installment.

Equity Awards

Equity Grants in 2023

In April 2023, we granted time-based restricted stock units to Messrs. White and Schneider. Mr. White's awards, which represented 50% of his fiscal year 2023 equity award, vest in three substantially equal installments on April 10, 2024, April 10, 2025, and April 10, 2026, subject to the executive officer’s continued employment with us. Mr. Schneider's awards, which were granted in the context of his role as Interim President and Interim CEO, vest in four substantially equal installments on July 14, 2023, October 14, 2023, January 14, 2024 and April 14, 2025, subject to his continued employment with us. Mr. Schneider resigned as Interim President and Interim Chief Executive officer on November 1, 2023 and forfeited his unvested awards. In November 2023 we granted time-based restricted stock units to Mr. Stone that vest in three substantially equal installments on November 1, 2024, November 1, 2025 and November 1, 2026. The number of such awards that were granted to the named executive officers were as follows: 330,097 restricted stock units to Mr. Stone, 34,819 restricted stock units to Mr. Schneider and 35,714 restricted stock units to Mr. White. Mr. Barker was not granted any equity awards in 2023.

In addition, in April 2023, we granted 35,714 performance-based restricted stock units to Mr. White, representing 50% of his fiscal year 2023 equity award. Such awards were eligible to vest between 0% and 200% of the target number of restricted stock units based on our total return on invested capital and total operating income (as such terms are defined in the award agreements and summarized below), for fiscal years 2023, 2024 and 2025, with one-third of the total target number of restricted stock units subject to each award corresponding to each of those three performance periods. The goals with respect to each of these three performance years were set at the time of grant of the award. While determination of the number of restricted stock units that are eligible to vest with respect to a fiscal year is made following completion of such fiscal year, actual vesting of restricted stock units deemed eligible to vest will not occur until March 15, 2026, subject to the individual remaining in employment with or service to the Company as of such date. Performance-based vesting of the one-third of the total target number of restricted stock units subject to each such award that corresponded to the fiscal year 2023 performance period was determined based on the following:

50% of that portion of the performance-based restricted stock units become eligible to vest based on the Company’s total return on invested capital for fiscal year 2023, as follows:

FY 2023 Total Return on Invested Capital

Actual Level of Total Return on Invested Capital for the Performance Year

Vesting Eligibility Percentage

15.00% or Less

0%

16.25%

50%

17.50%

100%

18.75%

150%

19.38%

175%

20.00% or Greater

200%

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

50% of that portion of the performance-based restricted stock units become eligible to vest based on the Company’s total operating income for the fiscal year 2023, as follows:

FY 2023 Total Operating Income

Actual Total Operating Income for the Performance Year

Vesting Eligibility Percentage

3.00% or Less

0%

3.14%

50%

3.28%

100%

3.89%

150%

4.20%

175%

4.50% or Greater

200%

For actual total return on invested capital and total operating income achievement results between two points in the preceding tables, the actual vesting eligibility percentage will be determined on a pro rata basis between points. For purposes of the awards, “return on invested capital” generally means the Company’s trailing twelve month 4-wall store earnings before interest, taxes, depreciation and amortization at the end of the 24th month since grand opening divided by the sum of (a) initial capital outlay (fixed asset investment less tenant allowance) plus (b) 90 day opening average inventory less new store allowances received by vendor for opening inventory (expressed as a percentage). For purposes of these awards, “operating income” generally means GAAP operating income divided by GAAP revenue (expressed as a percentage). The Compensation Committee must also adjust “return on invested capital” and “operating income” for certain events; however, none of those events occurred during fiscal year 2023.

In April 2024, the Compensation Committee determined that, for purposes of these awards, the Company did not achieve the required performance for any portion of the target restricted stock units that correspond to fiscal year 2023 to vest and therefore determined that such portion of the target performance-based restricted stock units was forfeited by Mr. White. We believe that this demonstrates our commitment to a pay-for-performance philosophy. This illustrates the pay program's alignment between actual Company performance and delivered pay.

Certification of Achievement of Vesting of 2022 Performance-Based Awards

In March 2022, we granted performance-based restricted stock units to Messrs. Barker and White in the target amount of 99,645 and 19,929 restricted stock units, respectively. Such awards were eligible to vest between 0% and 200% of the target number of restricted stock units based on our total revenue and adjusted earnings per share (“adjusted EPS”) performance (as such terms are defined in the award agreements and summarized below), for fiscal years 2022, 2023 and 2024, with one-third of the total target number of restricted stock units subject to each award corresponding to each of those three performance periods. While determination of the number of restricted stock units that are eligible to vest with respect to a fiscal year is made following completion of such fiscal year, actual vesting of restricted stock units deemed eligible to vest will not occur until March 15, 2025, subject to the individual remaining in employment with or service to the Company as of such date. Performance-based vesting of the one-third of the total target number of restricted stock units subject to each such award that corresponded to the fiscal year 2023 performance period was determined based on the following:

50% of that portion of the performance-based restricted stock units become eligible to vest based on the Company’s total revenue for fiscal year 2023, as follows:

FY 2023 Total Revenue

Actual Level of Total Revenue for the Performance Year

Vesting Eligibility Percentage

$1,610,000,000 or Less

0%

$1,670,500,000

50%

$1,731,000,000

100%

$1,774,500,000

150%

$1,818,000,000 or Greater

200%

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

50% of that portion of the performance-based restricted stock units become eligible to vest based on the Company’s adjusted EPS for fiscal year 2023, as follows:

FY 2023 Adjusted EPS

Actual Adjusted EPS for the Performance Year

Vesting Eligibility Percentage

$1.33 or Less

0%

$1.43

50%

$1.54

100%

$1.59

150%

$1.65 or Greater

200%

For actual total revenue and adjusted EPS achievement results between two points in the preceding tables, the actual vesting eligibility percentage will be determined on a pro-rata basis between points. For purposes of the awards, “total revenue” means the Company’s net sales for the first 52 weeks of the 2023 fiscal year. For purposes of these awards, “adjusted EPS” means the Company’s earnings per share of Common Stock for fiscal year 2023 as determined in accordance with GAAP, without taking into account cash bonuses paid with respect to fiscal year 2023. The Compensation Committee must also adjust “total revenue” and “adjusted EPS” for certain events; however, none of those events occurred during fiscal year 2023.

In April 2024, the Compensation Committee determined that, for purposes of these awards, the Company did not achieve the required performance for any portion of the target restricted stock units that correspond to fiscal year 2023 to vest and therefore determined that such portion of the target performance-based restricted stock units was forfeited. Mr. Barker also was not eligible to vest because he resigned prior to the determination made by the Compensation Committee. This illustrates the pay program's alignment between actual Company performance and delivered pay.

Other Features of Our Executive Compensation Program

Employment Agreements

On September 22, 2023, we entered into an employment agreement with Mr. Stone, the terms of which are described in more detail below in the section titled, “Employment Agreements with our Named Executive Officers.” We have not entered into an employment agreement with Mr. White. We did not enter into an employment agreement with Mr. Schneider with respect to his tenure as our Interim President and Interim Chief Executive Officer. We maintained an employment agreement with Mr. Barker prior to his retirement and voluntary resignation from employment with us in April 2023.

Severance and Change in Control Benefits

Mr. Stone's employment agreement referenced in the preceding section and the award agreements for his equity awards provide for certain benefits to be paid to him in connection with a termination of his employment. In addition, we have entered into a severance agreement with Mr. White, also providing for certain benefits to be paid to him in connection with a termination of his employment, and the award agreements for his equity awards provide for certain benefits to be paid to him in connection with a termination of his employment. Such benefits are described below in the section titled “Potential Payments on Termination or Change in Control.” Mr. Barker did not receive any severance benefits in connection with his retirement and voluntary resignation from employment, and any equity awards held by Mr. Barker that were unvested at the time of his termination of employment were forfeited without consideration. Mr. Schneider also received no severance payments or benefits in connection with his termination of employment and was not party to any agreements providing for any such payments or benefits.

Other Benefits

Messrs. Stone and White are eligible to participate (and Messrs. Barker and Schneider were eligible to participate during the time that they were employed by us) in our employee benefit plans, including our medical, dental, vision, group life,

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COMPENSATION DISCUSSION AND ANALYSIS

 

disability and accidental death and dismemberment insurance plans, in each case on the same basis as all of our other employees. We provide a 401(k) plan to our employees, including our named executive officers, as discussed in the section below entitled "Defined Contribution Plan". We do not generally provide perquisites or personal benefits to our named executive officers.

Tax and Accounting Implications

Under Financial Accounting Standard Board ASC Topic 718 (“ASC 718”), we are required to estimate and record an expense for each award of equity compensation over the vesting period of the award. We record share-based compensation expense on an ongoing basis according to ASC 718.

Under Section 162(m) of the Internal Revenue Code (“Section 162(m)”), compensation paid to each of the Company’s “covered employees” that exceeds $1 million per taxable year is generally non-deductible.

Although the Compensation Committee will continue to consider tax implications as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to provide compensation for the Company’s named executive officers in a manner consistent with the goals of the Company’s executive compensation program and the best interests of the Company and its stockholders, which may include providing for compensation that is not deductible by the Company due to the deduction limit under Section 162(m).

Clawback Policy

We maintain a clawback policy that complies with the relevant requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act and related stock exchange listing standards. In addition, both time-based and performance-based cash and equity awards (whether short-term or long-term) are subject to an additional clawback policy that applies to cash or stock that vests or is received by Section 16 officers and certain other executives within 36 months prior to the date on which we are required to prepare an accounting restatement, to the extent that a lesser amount would have vested or been received absent the restatement.

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EXECUTIVE COMPENSATION TABLES

SUMMARY COMPENSATION TABLE FOR FISCAL YEARS 2023, 2022 AND 2021

The following table presents information regarding compensation of Messrs. Stone, White, Schneider and Barker, our only executive officers during fiscal year 2023, for services rendered during fiscal years 2023, 2022 and 2021. These individuals are referred to in this Proxy Statement as our “named executive officers.”

 

 

 

 

 

 

 

 

Stock

 

Option

 

Non-Equity
Incentive Plan

 

Nonqualified Deferred Compensation

 

All Other

 

 

Name and Principal
Positions(s)

 

Year

 

Salary
($)

 

Bonus(1)
($)

 

Awards(2)
($)

 

Awards
($)

 

Compensation(3)
($)

 

Earnings
($)

 

Compensation(4)
($)

 

Total
($)

Paul Stone
President and Chief
Executive Officer

 

2023

 

266,538

 

749,808

 

1,700,000

 

 

 

 

25,048

 

2,741,394

Joseph Schneider(5)
Former Interim President and
Interim Chief Executive Officer

 

2023

 

664,615

 

 

250,000

 

 

 

 

 

914,616

Jon Barker(6)

 

2023

 

243,750

 

 

 

 

 

 

6,675

 

250,425

Former President and Chief
Executive Officer

 

2022

 

975,000

 

 

2,249,984

 

 

491,880

 

 

9,008

 

3,725,872

 

 

2021

 

832,500

 

500,000

 

1,033,489

 

 

1,650,000

 

 

9,022

 

4,025,011

Jeff White

 

2023

 

481,731

 

87,500

 

599,995

 

 

 

 

7,648

 

1,176,874

Chief Financial Officer
and Secretary

 

2022

 

358,654

 

 

449,997

 

 

60,121

 

 

7,874

 

876,646

 

 

2021

 

203,081

 

150,000

 

1,355,998

 

 

138,374

 

 

5,844

 

1,853,297

 

(1)
The amounts reported in the “Bonus” column of the table above for fiscal year 2023 include the following: for Mr. Stone a one-time signing bonus and a guaranteed pro-rated cash bonus paid to Mr. Stone at a target of 150% of his base salary as part of his employment agreement, and for, Mr. White a retention bonus to be paid in equal installments with the second portion to be paid in fiscal year 2024. The amounts reported in the “Bonus” column of the table above for fiscal year 2021 included the following: for Mr. Barker a one-time special bonus paid as part of Mr. Barker’s amended and restated employment agreement entered into as of January 21, 2022; for Mr. White a one-time special bonus paid as part of a special bonus letter agreement.
(2)
For Messrs. Stone, White and Schneider, this amount consists of restricted stock units subject to time-based vesting requirements (“time-based restricted stock units”) awarded in fiscal year 2023 with a grant date fair value of $1,699,999, $299,998 and $250,000, respectively. Additionally, for Mr. White it includes performance stock units subject to both time- and performance-based vesting requirements (“performance-based restricted stock units”) awarded in fiscal year 2023 with a grant date fair value of $299,998 (based on "target" level of performance, which the Company determined was the probable outcome of the applicable performance-based conditions on the grant date). If the highest level of performance was achieved, the grant date fair value of the performance-based restricted stock units awarded in fiscal year 2023 to Mr. White would be $599,995. For Messrs. Barker and White for fiscal year 2022, this amount consists of restricted stock units subject to time-based vesting requirements awarded in fiscal year 2022 with a grant date fair value of $1,124,992, and $224,999, respectively, and performance stock units subject to both time- and performance-based vesting requirements awarded in fiscal year 2022 with a grant date fair value of $1,124,992 and $224,998, respectively (based on the “target” level of performance, which the Company determined was the probable outcome of the applicable performance-based conditions on the grant date). If the highest level of performance was achieved, the grant date fair value of the performance-based restricted stock units awarded in fiscal year 2022 to Messrs. Barker and White would be $2,249,984 and $449,997, respectively. For Messrs. Barker and White for fiscal year 2021, this amount consists of time-based restricted stock units awarded in fiscal year 2021 with a grant date fair value of $1,033,489 and $1,355,998, respectively.
(3)
No incentive cash bonuses were earned by our named executive officers in 2023. The amounts reported in the “Non-Equity Incentive Plan Compensation” column of the table above for fiscal year 2022 consist of annual cash incentives (bonuses) that were paid to Messrs. Barker and White based on the Compensation Committee’s assessment of the Company’s Adjusted EBITDA, total gross margin and total revenue for fiscal year 2022 relative to pre-established goals and the named executive officer’s individual performance during fiscal year 2022. The amounts reported in the “Non-Equity Incentive Plan Compensation” column of the table above for fiscal year 2021 consist of annual cash incentives (bonuses) that were paid to Messrs. Barker and White based on the Compensation Committee’s assessment of the Company’s Adjusted EBITDA and total revenue for fiscal year 2021 relative to pre-established goals and the named executive officer’s individual performance during fiscal year 2021.
(4)
The amounts reported in the “All Other Compensation” column of the table above for fiscal year 2023 include the following: for Mr. Stone: $20,934 reimbursement for reasonably incurred relocation expenses and $4,105 for reasonable legal fees incurred in connection with the negotiation of Mr. Stone’s employment agreement; for Mr. White, $7,648 of aggregate matching contributions

 

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EXECUTIVE COMPENSATION TABLES

 

under our 401(k) plan; and for Mr. Barker, $6,675 of aggregate matching contributions under our 401(k) plan. The amounts reported in the “All Other Compensation” column of the table above for fiscal year 2022 include the following: for Mr. Barker, $9,008 of aggregate matching contributions under our 401(k) plan; and for Mr. White, $7,874 of aggregate matching contributions under our 401(k) plan. The amounts reported in the “All Other Compensation” column of the table above for fiscal year 2021 include the following: for Mr. Barker $9,022 of aggregate matching contributions under our 401(k) plan; and for Mr. White $5,844 of aggregate matching contributions under our 401(k) plan.
(5)
Mr. Schneider retired and voluntarily resigned from his positions as Interim President and Interim Chief Executive Officer, effective November 1, 2023, and as a member of the Board, effective December 31, 2023.
(6)
Mr. Barker retired and voluntarily resigned from his positions as President and Chief Executive Officer and as a member of the Board, effective April 14, 2023.

GRANTS OF PLAN-BASED AWARDS

The following table summarizes all plan-based awards granted to each of the named executive officers during fiscal year 2023:

 

 

 

 

 

Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)

 

 

Estimated Future Payouts Under Equity Incentive Plan Awards

 

 

All Other
Stock
Awards
Number of
Shares of
Stock or

 

 

Grant Date
Fair Value
of Stock and
Option

 

Name

Grant Date

 

Threshold

 

Target

 

 

Maximum

 

 

Threshold

 

Target

 

 

Maximum

 

 

Units

 

 

Awards

 

 

 

 

 

($)

 

($)

 

 

($)

 

 

(#)

 

(#)

 

 

(#)

 

 

(#)

 

 

($)(2)

 

Paul Stone

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted Stock Award - Time-Based

 

11/1/2023

 

 

 

 

 

 

 

 

 

 

 

 

330,097

 

 

 

1,700,000

 

Joseph Schneider

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted Stock Award - Time-Based(4)

 

4/14/2023

 

 

 

 

 

 

 

 

 

 

 

 

34,819

 

 

 

250,000

 

Jon Barker

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jeff White

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023 Annual Incentive Bonus

 

4/10/2023

 

 

 

302,295

 

 

 

604,590

 

 

 

 

 

 

 

 

 

 

Restricted Stock Award - Performance-Based(3)

 

4/10/2023

 

 

 

 

 

 

 

 

35,714

 

 

 

71,428

 

 

 

 

 

299,998

 

Restricted Stock Award - Time-Based

 

4/10/2023

 

 

 

 

 

 

 

 

 

 

 

 

35,714

 

 

 

299,998

 

 

(1)
The amounts reported in these columns represent the range of possible annual cash incentives (bonuses) to our named executive officers under the 2019 Performance Incentive Plan, based on the Compensation Committee’s assessment of the adjusted EBITDA margin, gross margin and net sales growth for fiscal year 2023 relative to pre-established goals and the named executive officer’s individual performance during fiscal year 2023.
(2)
The amounts reported in these columns represent the grant date fair value of restricted stock units subject to time-based vesting requirements or performance-based vesting requirements, as applicable, that were awarded in fiscal year 2023.
(3)
One-third of the target restricted stock units subject to each of these awards was forfeited in April 2024 upon the Compensation Committee certifying achievement against certain performance targets set for the fiscal year 2023.
(4)
The unvested portion of the time-based restricted stock units that were granted to Mr. Schneider in fiscal year 2023 were immediately forfeited upon his retirement and voluntary resignation from employment with the Company in November 2023.

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EXECUTIVE COMPENSATION TABLES

 

OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END

The following table presents information regarding the outstanding equity awards held by each of our named executive officers as of February 3, 2024, including the vesting dates for the portions of these awards that had not vested as of that date.

 

 

 

Stock Awards

 

Name

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 Shares, Units or Other Rights That Have Not Vested

 

 

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested

 

 

 

(#)

 

 

($)(1)

 

 

(#)

 

 

($)(1)

 

Paul Stone

 

 

330,097

 

(2)

 

1,221,359

 

 

 

 

 

Jon Barker

 

 

 

 

 

 

 

 

Joseph Schneider

 

 

 

 

 

 

 

 

Jeff White

 

 

579

 

(3)

 

2,142

 

 

 

6,643

 

(7)

 

24,579

 

 

 

 

25,000

 

(4)

 

92,500

 

 

 

23,810

 

(7)

 

88,097

 

 

 

 

13,286

 

(5)

 

49,158

 

 

 

 

 

 

 

 

35,714

 

(6)

 

132,142

 

 

 

 

 

 

(1)
The market value of such award was calculated based on the $3.70 closing price of our common stock on February 2, 2024, the last trading day of fiscal year 2023.
(2)
The unvested portion of this time-based restricted stock unit award is scheduled to vest in three annual installments on November 1, 2024, November 1, 2025 and November 1, 2026, subject to continued employment or service.
(3)
The unvested portion of this performance-based restricted stock unit award is scheduled to vest in one annual installment on March 16, 2024, subject to continued employment or service. This amount represents the number of shares for which the performance condition has been satisfied.
(4)
The unvested portion of this time-based restricted stock unit award is scheduled to vest in one annual installment on September 23, 2024, subject to continued employment or service.
(5)
The unvested portion of this time-based restricted stock unit award is scheduled to vest in two annual installments on March 15, 2024 and March 15, 2025, subject to continued employment or service.
(6)
The unvested portion of this time-based restricted stock unit award is scheduled to vest in three annual installments on April 10, 2024, April 10, 2025 and April 10, 2026, subject to continued employment or service.
(7)
Represents the unvested portion of performance-based restricted stock unit awards for which the performance conditions have not been satisfied. Amount shown reflects the target payout level.

The awards set forth in the “Outstanding Equity Awards at 2023 Fiscal Year-End” table above are restricted stock unit awards granted to Messrs. Stone, and White under the terms of our 2019 Performance Incentive Plan, which are described below under “—Equity Incentive Plans.” Each restricted stock unit represents a contractual right to receive one share of our Common Stock if the applicable time-based or performance-based vesting requirements, outlined in the footnotes to the table above, are satisfied. Messrs. Stone and White do not have the right to vote or dispose of the restricted stock units, but, in the event we pay dividends with respect to our Common Stock, Messrs. Stone and White would be credited with additional restricted stock units as dividend equivalents that are subject to the same vesting and payment terms as the underlying stock units. The unvested portions of the restricted stock unit awards are subject to accelerated vesting in certain circumstances as discussed below.

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FISCAL YEAR 2023 STOCK VESTED

The following table summarizes vesting of stock unit awards for each of our named executive officers during fiscal year 2023:

 

 

 

Stock Awards

 

Name

Number of Shares Acquired on Vesting

 

 

Value Realized on Vesting

 

 

 

(#)

 

 

($) (1)

 

Paul Stone

 

 

 

 

Jon Barker

 

 

248,502

 

 

 

2,068,321

 

Joseph Schneider

 

 

17,408

 

 

 

94,090

 

Jeff White

 

 

33,702

 

 

 

159,236

 

 

(1)
The amount shown for the value realized on the vesting of stock unit awards equals the number of shares of our Common Stock acquired by our named executive officers upon vesting during fiscal year 2023 multiplied by the closing price of our Common Stock on the Nasdaq Stock Market on the applicable vesting date of the award (or, if the applicable vesting date falls on a date the Nasdaq Stock Market is closed, the closing price of the stock on the preceding date that the market is open).

PENSION BENEFITS AND NONQUALIFIED DEFERRED COMPENSATION

There were no deferred compensation or defined benefit plans in place for fiscal year 2023.

EMPLOYMENT AGREEMENTS WITH OUR NAMED EXECUTIVE OFFICERS

The following describes the material terms of the employment agreement that we have entered with Mr. Stone. We have also entered into a severance agreement with Mr. White, which is described below under “Potential Payments Upon Termination or Change in Control”. We had an employment agreement with Mr. Barker prior to his retirement and voluntary resignation. Mr. Barker did not receive any severance benefits in connection with his resignation. Mr. Schneider also received no severance payments or benefits in connection with his termination of employment and was not party to any arrangements providing for any such payments or benefits.

Employment Agreement with Paul Stone

Term. On September 22, 2023, we entered into an employment agreement with Mr. Stone, our President and Chief Executive Officer. The employment agreement provides for an indefinite term that commenced on November 1, 2023 and continues until terminated by either party. Mr. Stone's employment with us is on an at-will basis, terminable by us or by Mr. Stone at any time (subject to certain notice requirements of the employment agreement) and for any reason, subject to the post-termination of employment benefits discussed below under the heading “—Potential Payments Upon a Termination or Change of Control.”

Base salary. Mr. Stone's employment agreement provides for an annual base salary of $1,100,000 subject to review and increases by the Company in its sole discretion.

Annual bonus. During the term of the employment agreement, Mr. Stone is eligible to receive an annual performance bonus, payable in cash, for each fiscal year during the term of the employment agreement. Mr. Stone's target bonus for a fiscal year is equal to 150% of his base salary beginning with fiscal year 2024, with the actual amount of his bonus for the year determined by our Compensation Committee. Mr. Stone’s annual bonus for fiscal year 2023 was guaranteed at the full target amount of 150% of his base salary, pro-rated based on his start date of November 1, 2023.

Special bonus. The employment agreement provided that Mr. Stone would receive a one-time signing bonus of $350,000 payable on November 1, 2023, subject to repayment if within 12 months of the date of the employment agreement the

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Company terminated his employment for “gross misconduct” or Mr. Stone voluntarily resigned for other than “good reason” (as such terms are defined in the employment agreement).

Equity awards. The employment agreement provided that Mr. Stone would receive a time-based restricted stock unit with a value of $1.7 million based on the closing price of our common stock on November 1, 2023 under our Inducement Plan, which will vest over three years in three equal installments on each of November 1, 2024, November 1, 2025 and November 1, 2026, subject to continued employment. As a signing bonus, on May 1, 2024, Mr. Stone will be granted time-based restricted stock units with a value of $400,000, based on the closing price of our common stock on the grant date under our Inducement Plan, which will vest over three years in three equal installments on May 1, 2025, May 1, 2026 and May 1, 2027, subject to continued employment. As part of the annual equity awards granted to our executive officers in 2024, Mr. Stone will be granted (A) time-based RSUs with a value of $1.25 million based on the closing price of our common stock on the grant date under our 2019 Performance Incentive Plan, which will vest over three years in three equal installments on each of the first, second and third anniversary of the grant date, and (B) performance-based RSUs with a grant date fair value of $1.25 million under our 2019 Performance Incentive Plan, which will vest over a three-year period based on performance metrics to be determined at the time of grant.

Other compensation. The employment agreement also provides for Mr. Stone to participate in our employee benefit plans for senior executives generally, reimbursement of business expenses, and reimbursement of an annual physical exam. Mr. Stone was also eligible to receive reimbursement up to $90,000 for reasonable relocation expenses and legal fees related to the negotiation of his Employment Agreement.

Provisions of Mr. Stone’s employment agreement relating to post-termination of employment benefits are discussed under “—Potential Payments Upon a Termination or Change of Control.”

Equity Incentive Plans

2019 Performance Incentive Plan

We maintain the 2019 Performance Incentive Plan, or the 2019 Plan, to provide an additional means through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons. Our stockholders approved this plan in May 2019. Employees, officers, directors and consultants that provide services to us or one of our subsidiaries may be selected to receive awards under the 2019 Plan. For a summary description of the 2019 Plan, see “Proposal 3 – Approval of the Sportsman’s Warehouse Holdings, Inc. Amended and Restated 2019 Performance Incentive Plan– Summary Description of the Amended 2019 Performance Incentive Plan.”

 

Employee Stock Purchase Plan

In April 2015, our Board adopted the Sportsman’s Warehouse Holdings, Inc. Employee Stock Purchase Plan (the “ESPP”). Under the ESPP, shares of our Common Stock are available for purchase by eligible employees who elect to participate in the ESPP. Our Board believes that the ESPP helps the Company retain and motivate eligible employees and helps further align the interests of eligible employees with those of the Company’s stockholders. For a summary description of our ESPP, see “Proposal 4 – Approval of an Amendment and Restatement of Employee Stock Purchase Plan – Summary Description of the ESPP.”

Inducement Plan

On September 21, 2023, the Board adopted and approved the Sportsman’s Warehouse Holdings, Inc. Inducement Plan (the “Inducement Plan”) to reserve 1,000,000 shares of the Company’s common stock to be used exclusively for grants of awards to individuals that were not previously employees or directors of the Company (or following a bona fide period of non-employment), as an inducement material to the individual’s entry into employment with the Company, pursuant to Nasdaq Listing Rule 5635(c)(4).

The Inducement Plan was adopted and approved without stockholder approval pursuant to Nasdaq Listing Rule 5635(c)(4) and will be administered by the Compensation Committee of the Board (the “Compensation Committee”).

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Awards under the Inducement Plan may only be granted by: (i) the Compensation Committee, provided such committee is comprised solely of “independent directors” (as defined by Nasdaq Listing Rule 5605(a)(2)) or (ii) a majority of the Company’s “independent directors.” The Inducement Plan provides for the grant of options, stock appreciation rights, restricted stock, stock bonuses, stock units, restricted stock units, performance stock, deferred shares, phantom stock, dividend equivalent rights and other cash or share-based awards. In addition, forms of Restricted Stock Unit Award Agreement were adopted and approved for use with the Inducement Plan.

If the Amended 2019 Plan proposed in this proxy statement is approved by our stockholders, the Inducement Plan will terminate on, and no further awards may be granted under the Inducement Plan after, the Effective Date of the Amended 2019 Plan. If the Amended 2019 Plan is not approved by our stockholders, the Inducement Plan will continue in effect.

Defined Contribution Plan

As part of our overall compensation program, we provide all full-time employees, including our named executive officers, with the opportunity to participate in a defined contribution 401(k) plan. Our 401(k) plan is intended to qualify under Section 401 of the Code so that employee contributions and income earned on such contributions are not taxable to employees until withdrawn. Employees may elect to defer up to 50% of their eligible compensation (not to exceed the statutorily prescribed annual limit) in the form of elective deferral contributions to our 401(k) plan. Our 401(k) plan also has a “catch-up contribution” feature for employees aged 50 or older (including those who qualify as “highly compensated” employees) who can defer amounts over the statutory limit that applies to all other employees. We also provide matching contributions of up to 25% of the first 6% of eligible compensation deferred by each of our 401(k) plan participants, with a maximum matching contribution of 1.5% of eligible compensation per participant per plan year. Our employees are allowed to participate in the 401(k) on the first day of the month following 90 days of employment, and 401(k) plan participants are eligible to receive employer matching contributions after one year of continuous service. Participants are always vested in their personal contributions to the 401(k) plan, and company-matching contributions under the plan vest at a rate of 20% per year of service.

Except as described above in this Proxy Statement with respect to our 401(k) plan, we do not currently maintain any additional retirement plans, tax-qualified or nonqualified, for our executives or other employees.

Potential Payments Upon Termination or Change in Control

The following section describes the benefits that could have become payable to Messrs. Stone and White in each case in connection with a termination of the named executive officer's employment and/or a change of control of us under the circumstances described below. We had an employment agreement with Mr. Barker prior to his retirement and voluntary resignation. Mr. Barker did not receive any severance benefits in connection with his resignation. Mr. Schneider also received no severance payments or benefits in connection with his termination of employment and was not party to any arrangements providing for any such payments or benefits.

Paul Stone

Mr. Stone's employment agreement, which is described under the heading “—Employment Agreements with Our Named Executive Officers,” and the award agreements for his equity awards, provided for certain benefits to be paid to him in connection with a termination of his employment with us under the following circumstances:

Termination of employment for death, incapacity or gross misconduct or without good reason. In the event that Mr. Stone's employment terminates during his employment term due to his death or incapacity or for gross misconduct, or by Mr. Stone without good reason (as such terms are defined in his employment agreement), Mr. Stone would be entitled to receive his base salary and paid personal time off accrued through the date of termination and payment of any unreimbursed business expenses (the “accrued obligations”).

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Termination of employment without gross misconduct or with good reason. In the event that Mr. Stone's employment terminates during his employment term without gross misconduct or by Mr. Stone with good reason, Mr. Stone would be entitled to the following benefits: (1) the accrued obligations; (2) a lump sum payment equal to 18 months of his then-current base salary (or $1,100,000 if Mr. Stone’s then current Base Salary is less than $1,100,000); (3) a pro-rata portion of his target bonus for the year of termination plus any annual bonus for the immediately preceding year he has earned but not yet been paid; and (4) continued company-paid COBRA benefits through the date that is 18 months following the termination date (or, if earlier, the date of his death, the date he becomes eligible for coverage under a future employer’s plan and the date we cease to offer group medical coverage to active executive employees or we are otherwise under no obligation to offer COBRA continuation coverage to Mr. Stone).

Change in Control. Pursuant to Mr. Stone's award agreement for time-based restricted stock units, if Mr. Stone’s employment is terminated other than because of Mr. Stone’s “Gross Misconduct” or by Mr. Stone for “Good Reason”, and such termination occurs on within 12 months after a change in control of the Company, in addition to his benefits above under “Termination of employment without gross misconduct of with good reason”, any outstanding time-based equity awards granted by the Company will become fully vested and any performance-based vesting conditions applicable to any equity awards shall will be treated as provided in the applicable award agreement.

Restrictive covenants. Mr. Stone also entered into an Employee Confidential Information and Inventions Assignment Agreement (the “CIIAA”) that contains certain restrictive covenants including a confidentiality and non-disclosure agreement, a twelve-month post-termination non-competition clause, a twelve-month post-termination non-solicitation of employees or independent contractors clause, and a non-disparagement clause.

Jeff White

On September 26, 2021, the Company entered into a severance agreement with Mr. White. The agreement provides that Mr. White’s employment may be terminated by the Company or by Mr. White for any reason at any time, with or without notice.

Termination of employment for death, incapacity or gross misconduct or without good reason. In the event that Mr. White’s employment is terminated due to his death or incapacity or for gross misconduct, or by Mr. White without good reason (as such terms are defined in his severance agreement), Mr. White will be entitled to receive his base salary and paid personal time off accrued through the date of termination and payment of any unreimbursed business expenses (the “accrued obligations”). Pursuant to the terms of Mr. White’s award agreement for the performance-based restricted stock units he received in the fiscal year 2022, if Mr. White’s employment terminates due to his death or permanent disability (as such term is defined in the award agreement) at or before the end of the performance year, the restricted stock units will remain eligible to vest and Mr. White will vest on the last day of the performance period in one-third of any restricted stock units deemed eligible to vest based on the Company’s performance for the performance period. If Mr. White’s employment terminates due to his death or permanent disability after the end of the performance period but before the second anniversary of the award date, Mr. White will become fully vested in two-thirds of the restricted stock units eligible to vest. If Mr. White’s employment terminates due to his death or permanent disability after the second anniversary of the award date but before the third anniversary of the award date, Mr. White will become fully vested in all the restricted stock units eligible to vest.

Termination of employment without gross misconduct or with good reason. In the event Mr. White’s employment is terminated by the Company without “gross misconduct,” or by Mr. White for “good reason” (as these terms are defined in the severance agreement), Mr. White will be entitled to receive (in addition to the accrued obligations), subject to providing a release of claims to the Company, (1) continued payment of his base salary (as severance pay) for twelve months following such termination of employment, (2) a pro-rated portion of his target annual bonus for the year in which such termination of employment occurs, and (3) reimbursement for COBRA premiums for up to twelve months. In addition, Mr. White’s time-based equity-based awards will generally become fully vested, to the extent then outstanding and not otherwise vested, in connection with such a termination of employment on or after a change in control of the Company. Pursuant to the terms of Mr. White’s award agreement for the performance-based restricted stock units he received in the fiscal year 2022, in the event Mr. White’s employment is terminated without cause or by Mr. White for

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good reason (as such terms are defined in the award agreement) upon or following a change in control of the Company that occurs at or prior to the end of the performance period, Mr. White will become fully vested in the greater of the number of restricted stock units that would vest based on a shortened performance period and the target number of restricted stock units subject to the award. In the event Mr. White’s employment is terminated without cause or by Mr. White for good reason upon or following a change in control of the Company that occurs following the end of the performance period, Mr. White will become fully vested in all the restricted stock units eligible to vest.

Change in Control. Pursuant to Mr. White’s the award agreement for the performance-based restricted stock units he received in the fiscal year 2022, if the award is not to be assumed or continued following a change in control of the Company that occurs at or prior to the end of the performance period, Mr. White will become fully vested in the greater of the number of restricted stock units that would vest based on a shortened performance period and the target number of restricted stock units subject to the award. If the award is not to be assumed or continued following a change in control of the Company that occurs following the end of the performance period, Mr. White will become fully vested in all the restricted stock units eligible to vest.

Restrictive Covenants. Pursuant to Mr. White’s severance agreement, Mr. White has agreed not to disclose any of our confidential information or to publicly disparage us at any time during or after his employment with us. In addition, Mr. White has agreed that, for a period of one year following a termination of his employment with us, he will not engage in certain competitive activities with us and, for a period of two years following a termination of his employment with us, he will not solicit our employees or independent contractors.

Estimated Severance and Change in Control Payments and Benefits

The following table provides information concerning the potential termination or change in control payments that would be made to each applicable named executive officer under the circumstances described above. As prescribed by the SEC’s disclosure rules, in calculating the amount of any potential payments to the applicable named executive officers, we have assumed that the applicable triggering event (i.e., termination of employment and/or change in control of the Company) occurred on February 3, 2024. In the following table, we use the term “involuntary termination” to refer to a termination by us without “gross misconduct,” “cause” or by the executive for “good reason.” Mr. Barker retired and voluntarily resigned his employment with us and as a result has not and will not receive any severance or change in control benefits in connection with such termination, including the potential termination or change in control payments shown in the table below. Mr. Schneider also received no severance payments or benefits in connection with his termination of employment and was not party to any arrangements providing for any such payments or benefits.

 

 

Cash Severance

 

 

Equity Acceleration Value

 

 

Total

 

Name

 

($)

 

 

($)

 

 

($)

 

Paul Stone

 

 

 

 

 

 

 

 

 

Voluntary Termination or Termination by Death or Incapacity

 

 

 

 

 

 

Involuntary Termination

 

 

3,300,000

 

(1)

 

 

 

3,300,000

 

Involuntary Termination in Connection with Change in Control

 

 

3,300,000

 

(1)

 

1,221,359

 

(2)

 

4,521,359

 

Jeff White

 

 

 

 

 

 

 

 

 

Voluntary Termination or Termination by Death or Incapacity

 

 

 

 

 

 

Involuntary Termination

 

 

807,500

 

(3)

 

 

 

807,500

 

Involuntary Termination in Connection with Change in Control

 

 

807,500

 

(3)

 

501,295

 

(4)

 

1,308,795

 

 

(1)
In the event of Mr. Stone’s termination of employment by us without “cause” or by Mr. Stone for “good reason,” Mr. Stone would be entitled to 18 months of base salary and a pro-rata portion of his target bonus for the year of termination plus any annual bonus for the immediately preceding year he has earned but not yet been paid. For purposes of this table, we have assumed Mr.

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Stone would receive his target annual bonus opportunity of 150% of his base salary of $1,100,000, which became effective on November 1, 2023.
(2)
The amount disclosed was determined by taking the value (calculated based on our closing price of $3.70 as of February 2, 2024) associated with Mr. Stone's aggregate outstanding and unvested time-based restricted stock units as of February 3, 2024.
(3)
In the event of Mr. White’s termination of employment by us without “cause” or by the executive for “good reason,” Mr. White is entitled to 12 months of base salary (whether alone or in connection with a change in control) and an amount equal to a pro-rated portion of his target annual bonus for the year in which such termination of employment occurs. For purposes of this table, we have assumed Mr. White would receive his target annual bonus opportunity of 70% of his base salary of $475,000, which became effective on March 12, 2023.
(4)
The amount disclosed was determined by taking the value (calculated based on our closing price of $3.70 as of February 2, 2024) associated with Mr. White’s aggregate outstanding and unvested time-based restricted stock units as of February 3, 2024. For outstanding performance-based restricted stock units awarded in March 2022 and April 2023, the amount is based on the performance-based restricted stock units that have been earned for the fiscal years 2022 and 2023, respectively, and the maximum amount of performance-based restricted stock units that could be earned for the fiscal year 2024 and fiscal year 2025 tranches.

Other Policies

Executive Stock Ownership Guidelines

We maintain stock ownership guidelines for our executive officers, under which (i) our Chief Executive Officer is expected to own shares of our Common Stock with a value equal to at least three times his then-current annualized base salary and (ii) each of our other executive officers is expected to own shares of our Common Stock with a value equal to at least one times the officer’s then-current annualized base salary. Share ownership for purposes of the guidelines includes shares of our Common Stock owned directly by the executive officer, by the officer’s spouse, or by the officer’s children who reside with the officer or the officer’s spouse, shares held in a trust established by the executive officer or the officer’s spouse for estate or tax planning purposes if the trust is revocable by the officer or the officer’s spouse, and shares subject to outstanding restricted stock and restricted stock unit awards (whether or not vested and whether or not payable in stock or cash of equivalent value) granted to the executive officer (other than restricted stock units subject to unsatisfied performance-based vesting conditions). Our executive officers are expected to satisfy the guideline level of ownership by the first December 31 on or after the date that is five years after the date that the executive officer first become subject to the guidelines. Thereafter, compliance with the guidelines will be assessed as of December 31 each year. If an executive officer does not satisfy the guideline level of ownership as of such a measurement date, the executive officer is expect to hold at least 50% of the net vested shares acquired upon the exercise, payment or vesting of any equity award (with the “net” shares determined after taking into account any shares sold or withheld to pay any applicable exercise price of the award and to satisfy any applicable withholding obligations) granted to the executive officer by the Company until and to the extent required for the executive’s level of ownership to satisfy the applicable guideline level. Our Board of Directors or the Compensation Committee may suspend or grant waivers to the guidelines from time to time. Currently, each of our executive officers is either in compliance with the stock ownership guidelines or is within the five-year grace period to come into compliance with such guidelines.

Clawback Policy

In November 2023, our Board of Directors adopted a clawback policy that complies with Section 10D of the Exchange Act, Rule 10D-1 promulgated thereunder, and Nasdaq Listing Rule 5608.

We also maintain a separate clawback policy that allows our Board of Directors or the Compensation Committee to require reimbursement or cancellation of both time-based and performance-based awards or payments made under our cash and equity incentive plans to the Company’s current and former executive officers, and current and former vice presidents and more senior officers of the Company, in certain circumstances where: (1) the amount of the award or payment was determined based on the achievement of financial results that were subsequently the subject of an accounting restatement due to noncompliance with any financial reporting requirement under the securities laws, (2) a lesser (or no) payment or award of cash or shares would have been made to the individual based upon the restated financial results, and (3) the payment or award of cash or shares was received by the individual (or the applicable vesting

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date occurred) within 36 months prior to the date on which the Company is required to prepare such accounting restatement.

Compensation Committee Interlocks and Insider Participation

Mr. McBee, Mr. Sansom, Ms. Walsh and Mr. Williamson each served on the Compensation Committee during fiscal year 2023. None of these directors had any relationships requiring disclosure by us under the SEC’s rules requiring disclosure of certain relationships and related-party transactions. None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or Compensation Committee.

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CEO PAY RATIO DISCLOSURE

Pursuant to the Exchange Act, we are required to disclose in this Proxy Statement the ratio of the total annual compensation of Mr. Stone, our President and Chief Executive Officer, to the median of the total annual compensation of all of our employees (excluding Mr. Stone). Based on SEC rules for this disclosure and applying the methodology described below, we have determined that Mr. Stone's total compensation for the fiscal year ended February 3, 2024 was $4,825,048. Since Mr. Stone was appointed as Chief Executive Officer effective November 1, 2023, this amount equals Mr. Stone’s compensation reported in the Summary Compensation Table plus an additional amount that reflects annualizing of his base salary and his target annual incentive bonus for fiscal year 2023 consistent with the applicable U.S. Securities and Exchange Commission guidance, and was used to calculate the ratio of annual total compensation for our Chief Executive Officer to the total annual compensation of our median employee. The median of the total compensation of all of our employees (excluding Mr. Stone) for the fiscal year ended February 3, 2024 was $12,681. Accordingly, we estimate the ratio of Mr. Stone's total compensation for the fiscal year ended February 3, 2024 to the median of the total compensation of all of our employees (excluding Mr. Stone) for the fiscal year ended February 3, 2024 to be 380 to 1. We annualized Mr. Stone's total compensation as follows:

 

SCT Components

Actual Values from SCT
($)

 

For CEO Pay Ratio: Annualized Values + One-Time Values
($)

 

 

Rationale

Salary

 

266,538

 

 

1,100,000

 

 

 Annualized salary

Annual Incentive Bonus

 

399,808

 

 

1,650,000

 

 

 Annualized incentive bonus

Signing Bonus

 

350,000

 

 

350,000

 

 

 Not annualized; One-time signing bonus

Stock Awards

 

1,700,000

 

 

1,700,000

 

 

 Not annualized; One-time award

All Other Compensation

 

25,048

 

 

25,048

 

 

 Not annualized; One-time payments

Total CEO Pay

 

2,741,394

 

 

4,825,048

 

 

 

To determine the pay ratio, we identified the median employee by taking into account the total cash compensation for the fiscal year ended February 3, 2024 reflected in our payroll records for all individuals, excluding Mr. Stone, who were employed by us or one of our affiliates on February 3, 2024. We included all employees, whether employed on a full-time, part-time, or temporary basis. We did not make any assumptions, adjustments or estimates with respect to their total compensation for the fiscal year ended February 3, 2024 reflected in our payroll records. We believe total compensation reflected in our payroll records for all employees is an appropriate measure because we do not distribute annual equity awards to all employees.