Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ☒ No ☐
Indicate by check mark if the registrant
is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically and posted to its web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation
S-T
during the preceding 12 months (or for such shorter period that the registrant was required to post such
files). Yes ☒ No ☐
Indicate by check mark if disclosure
of delinquent filers pursuant to Item 405 of Regulation
S-K
is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form
10-K
or any amendment to this Form
10-K. ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2
of the Exchange Act. (Check one):
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act rule
12b-2). Yes ☐ No ☒
As
of July 8, 2016 (the last business day of the registrant’s second quarter for 2016), the aggregate market value of the registrant’s voting common stock held by
non-affiliates
of the registrant,
based on the closing sale price as reported on the NASDAQ Global Market System, was approximately $1,141,833,000.
Indicate the number of
shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
In addition, pursuant to the rules of the SEC, we have also included as exhibits currently dated
certifications required under Section 302 of The Sarbanes-Oxley Act of 2002. We are also including certifications pursuant to Section 906 of The Sarbanes-Oxley Act of 2002. We are amending and refiling Part IV to reflect the inclusion of
those certifications.
Except as described above, no other changes have been made to the Original Filing or First Amendment. Except as otherwise indicated
herein, this Amendment continues to speak as of the date of the Original Filing, and we have not updated the disclosures contained therein to reflect any events that occurred subsequent to the date of the Original Filing. The filing of this Annual
Report on Form
10-K/A
is not a representation that any statements contained in items of our Annual Report on Form
10-K,
as amended, other than Part III, Items 10 through
14, and Part IV are true or complete as of any date subsequent to the Original Filing.
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors
The following discussion sets
forth certain information about the individuals serving as the Company’s directors as of February 21, 2017.
Current Directors
Krishnan
Anand,
age 59, has served as a director since November 2010. Mr. Anand has served as President of the
International Division of Molson Coors Brewing in Denver, Colorado and Head of Global Strategy Development since 2009. Prior to joining Molson Coors, Mr. Anand served from 1997 to 2009 in a number of senior marketing and management positions
with The Coca-Cola Company, most recently as President of the Philippines Business Unit in Manila, Philippines.
Expertise
and
Qualifications
: Mr. Anand brings to the Board, among other skills and qualifications, broad management and marketing experience in domestic and international business, as well as his track record of judgment and achievement, as
demonstrated during a 33 year career in leadership positions at major international companies in the consumer products industry. Mr. Anand’s experience and skills make him valuable to the Board as Chair of our People Services
(Compensation) Committee and a member of our Corporate Governance and Nominating Committee.
Cheryl
A.
Bachelder,
age 60, has
served as a director since November 2006. Since November 2007, Ms. Bachelder has served as our Chief Executive Officer. Ms. Bachelder also served as our President from November 2007 until March 2012.
Ms. Bachelder currently serves as a member of the Pier 1 Imports, Inc. board of directors and she serves as the chair of its Compensation Committee.
Ms. Bachelder serves on the Advisory Board of APFI, the franchising venture of Procter & Gamble. She also serves as a member of the board of the CEO Forum, a
not-for-profit
organization. From July 2006 until February 2013, she served as a member of the True Value Company board of directors. From May 2009 until December 2012,
Ms. Bachelder served as a member of the National Restaurant Association board of directors. Ms. Bachelder served as the President and Chief Concept Officer of KFC Corporation from 2001 to 2003. From 1995 to 2000, Ms. Bachelder was
Vice President, Marketing and Product Development for Domino’s Pizza, Inc.
Expertise
and
Qualifications
: Ms. Bachelder
brings to the Board, among other skills and qualifications, her experience in the leadership position as Chief Executive Officer of our Company, as well as her track record of judgment, achievement and leadership, as demonstrated in over 20 years in
the quick service restaurant, or “
QSR
,” industry in leadership positions at major restaurant companies and over 35 years of proven operational and managerial experience in the retail and consumer products industries.
Carolyn
H.
Byrd,
age 68, has served as a director since May 2001. Ms. Byrd founded GlobalTech Financial, LLC, a financial
services and consulting company headquartered in Atlanta, Georgia, in May 2000 and currently serves as its Chairman and Chief Executive Officer. From November 1997 to October 2000, Ms. Byrd served as President of The Coca-Cola Financial
Corporation. In addition to serving as Chairman of the board of directors of Global Tech Financial, LLC, Ms. Byrd currently serves on the boards of directors of Federal Home Loan Mortgage Corporation and Regions Financial Corporation.
Ms. Byrd previously served on the boards of directors of the St. Paul Companies, Inc., Circuit City Stores, Inc., Reliastar Financial, ING Americas and RARE Hospitality, Inc.
Expertise
and
Qualifications
: Ms. Byrd brings to the Board, among other skills and qualifications, extensive management, financial
and board level expertise, as well as her track record of judgment and achievement, as evidenced by leadership positions as Chairman and Chief Executive Officer of a financial services company and president of the financial division of a global
beverage company. Further, her service as a director of other public companies provides her with broad experience as well as skills that make her valuable to the Board as Chair of our Corporate Governance and Nominating Committee and as a member of
our Audit Committee.
2
John
M.
Cranor,
III,
age 70, has served as a director since November 2006 and
Chairman of our Board since November 2007. From 2003 until 2008, Mr. Cranor served as the President and Chief Executive Officer of the New College Foundation, affiliated with the New College of Florida in Sarasota.
Expertise
and
Qualifications
: Mr. Cranor brings to the Board, among other skills and qualifications, broad managerial and
operational experience as well as his track record of judgment and achievement, as demonstrated by his leadership positions as President and Chief Executive Officer of major QSR companies, as well as broad corporate experience and executive skills
that make him valuable to the Board as Chairman of the Board and as a member of our Corporate Governance and Nominating Committee.
S.
Kirk
Kinsell,
age 62, has served as a director since January 2015. Currently, Mr. Kinsell is a partner in Panther Ridge Partners, LLC. Mr. Kinsell served as the Chief Executive Officer of Loews Hotels and Resorts in New York, New
York from March 2015 to December 2016. From July 2011 until February 2015, Mr. Kinsell was President, The Americas and Executive Director for InterContinental Hotels Group, PLC in Atlanta, Georgia. From August 2010 until June 2011,
Mr. Kinsell was President, Europe Middle East and Africa and Executive Director for InterContinental Hotels Group, PLC in London, U.K. From August 2007 to June 2010, he was President, Europe, Middle East and Africa for InterContinental Hotels
Group, PLC in London.
Expertise
and
Qualifications
: Mr. Kinsell brings to the Board, among other skills and qualifications,
broad managerial and operational experience as well as his track record of judgment and achievement, as demonstrated by his leadership positions as Chief Executive Officer and President of major international hotel companies, and a distinguished
career of over 30 years of proven operational and management experience. His broad experience in franchising, hospitality and international transactions, as well as his executive skills make Mr. Kinsell valuable to the Board as a member of our
Audit Committee and our People Services (Compensation) Committee.
Joel
K.
Manby,
age 57, has served as a director since September
2013. Mr. Manby is currently President and Chief Executive Officer of SeaWorld Entertainment, Inc., a family entertainment company that operates and maintains theme parks located throughout the United States. He has served in this capacity
since April 2015. From April 2003 until March 2015, he was President and Chief Executive Officer of Herschend Family Entertainment Corporation (HFE), a family-owned attractions company. Prior to joining HFE, Mr. Manby spent almost 20 years in
the auto industry in general management and marketing roles, primarily at General Motors in the Saturn and Saab divisions. Mr. Manby served as Chief Executive Officer of Saab Cars USA from 1996 to 2002. Mr. Manby also currently serves as a
member of the National Board of The Salvation Army.
Expertise
and
Qualifications
: Mr. Manby brings to the Board, among other
skills and qualifications, broad management and operations experience, as well as his track record of judgment and achievement in cultural transformation through the improvement in guest experience, employee engagement and financial results, as
demonstrated during a distinguished career in leadership positions at major companies in the entertainment and automobile industries. Mr. Manby’s varied experience and skills make him valuable to the Board as a member of our People
Services (Compensation) Committee.
Candace
S.
Matthews,
age 58, has served as a director since January 2016.
Ms. Matthews currently serves as Regional President, Americas for Amway Corporation, an international direct sales company, in Ada, Michigan. She has served in this capacity since November 2014. From December 2007 until October 2014,
Ms. Matthews was Chief Marketing Officer for Amway Corporation. From 2001 to 2007, Ms. Matthews served as President of the SoftSheen-Carson Consumer Products Division of L’Oréal S.A. From 1998 until 2000, Ms. Matthews
served as Vice President, New Products and Packaging Innovation for The Coca-Cola Company. Ms. Matthews has served on the board of trustees for Spectrum Health Foundation since September 2011. Ms. Matthews was recommended for appointment
by a search firm.
Expertise
and
Qualifications
: Ms. Matthews brings to the Board, among other skills and qualifications, broad
management, marketing and operations experience, as well as her track record of judgment and achievement, as evidenced during her over 30 years of experience at major companies across a range of industries. Her broad experience and skills as an
executive with international companies make Ms. Matthews valuable to the Board as a member of our Audit Committee and our Peoples Services (Compensation) Committee.
3
Martyn
R.
Redgrave,
age 64, has served as a director since October 2013.
Mr. Redgrave currently serves as Managing Partner and Chief Executive Officer of Agate Creek Partners, LLC, a professional governance and consulting services company
co-founded
by Mr. Redgrave in
July 2014. He also currently serves as a member of the board of directors of Francesca’s Holdings Corporation and he serves as the chair of its Audit Committee. From August 2012 until his retirement in August 2014, Mr. Redgrave served as a
Senior Advisor to L Brands, Inc. (formerly known as Limited Brands, Inc.), an international fashion retailer. From March 2005 until August 2012, Mr. Redgrave served as Executive Vice President and Chief Administrative Officer of Limited Brands,
Inc. Mr. Redgrave has been a member of the board of directors of Deluxe Corporation since August 2001. Since August 2012, he has served as the
Non-Executive
Chairman of the board of directors of Deluxe
Corporation.
Expertise
and
Qualifications
: Mr. Redgrave brings to the Board, among other skills and qualifications, broad
managerial, financial and operational experience as well as his track record of judgment and achievement, as demonstrated by his leadership positions as Executive Vice President and Chief Administrative Officer of a major international retail
company, as well as broad corporate experience and established board skills that make him valuable to the Board as Chair of our Audit Committee and as a member of our Peoples Services (Compensation) Committee.
Lizanne
Thomas,
age 59, has served as a director since November 2015. Ms. Thomas is currently
Partner-in-Charge
of the Southern U.S. Region for Jones Day, an international law firm, where she also leads the Global Corporate Governance practice. She is based in Atlanta, Georgia. She has served in these
capacities since July 2014. Prior to her current position, Ms. Thomas held the position of
Partner-in-Charge
– Atlanta from January 2008 to June 2014. From
October 2004 until July 2016, Ms. Thomas served as a member of the board of directors of Krispy Kreme Doughnuts, Inc. since October 2004. Ms. Thomas serves on the board of directors of Atlantic Capital Bancshares, Inc., as chair of its
Governance Committee and a member of its Compensation Committee, since November 2015. Ms. Thomas has served as a Trustee of the Georgia Research Alliance since September 2009, and as chair of its Audit Committee since September 20122. She also
has served as a Trustee of Washington & Lee University since October 2014. Ms. Thomas served as a Trustee of Furman University from July 2006 until June 2012. Ms. Thomas was recommended for appointment by a search firm.
Expertise
and
Qualifications
: Ms. Thomas brings to the Board, among other skills and qualifications, broad managerial, governance
and legal experience, as well as her track record of judgment and achievement, as evidenced by her over 30 years of experience providing legal and business advice to her clients. Her broad experience and skills make her valuable to the Board as a
member of the Corporate Governance and Nominating Committee.
Corporate Governance
Board Committees
During fiscal 2016, the Board
had four standing committees: the Executive Committee, the Audit Committee, the People Services (Compensation) Committee and the Corporate Governance and Nominating Committee. Committee and committee chair assignments are reviewed annually by the
Board at its meeting immediately following the annual meeting of shareholders, however, the Board may review and change the Board composition more frequently. The current composition of each Board committee is as follows:
Executive Committee
: John M. Cranor, III (Chair), Cheryl A. Bachelder and Carolyn H. Byrd
Audit Committee
: Martyn R. Redgrave (Chair), Carolyn H. Byrd, S. Kirk Kinsell and Candace S. Matthews
People Services (Compensation) Committee
: Krishnan Anand (Chair), S. Kirk Kinsell, Joel K. Manby, Candace S. Matthews and Martyn R.
Redgrave
Corporate Governance and Nominating Committee
: Carolyn H. Byrd (Chair), Krishnan Anand, John M. Cranor, III and Lizanne
Thomas
4
In February 2017, Ms. Matthews was added to the Audit and People Services (Compensation) Committee and
Lizanne Thomas was removed from the Audit Committee.
Board and Committee Meetings; Attendance of Board Members at Annual Meeting of Shareholders
In fiscal 2016, the Board met nine times. In fiscal 2016, the Audit Committee, the People Services (Compensation) Committee and to the Corporate
Governance and Nominating Committee, each met four, five and four times, respectively. The Executive Committee did not meet in fiscal 2016. Each director attended at least 75% of the meetings of the Board and of the committees of which he or she was
a member in fiscal 2016. Our directors are encouraged, but not required, to attend the annual shareholders meeting. All directors then serving on our Board attended the 2016 annual shareholders meeting.
Board Leadership Structure
Since 2007, one of our
independent directors, Mr. Cranor, has served as the independent Chairman of our Board (the ”
Chairman
”). We believe this Board leadership structure, with an independent director serving as the Chairman, is currently best
for our Company and our shareholders.
The Chief Executive Officer is responsible for the
day-to-day
leadership and management of the Company, and the Chairman is responsible for providing oversight, direction and leadership of the Board. As directors
continue to have more oversight responsibilities, we believe it is beneficial to have an independent Chairman whose primary responsibility is leading the Board. Pursuant to our Principles of Corporate Governance and our Bylaws, the Chairman will
establish the agenda for each Board meeting, determine the length of the meetings, chair the Board meetings and executive sessions of the Board and, in consultation with the Chief Executive Officer, determine appropriate ways to facilitate
interaction between the directors and management. By delineating the role of the Chairman position and separating it from the role of the Chief Executive Officer, we attempt to ensure there is no duplication of effort between the Chief Executive
Officer and the Chairman. We believe this provides the most effective leadership of our Board, while positioning our Chief Executive Officer as the leader of the Company to our shareholders, franchisees, employees, business partners and other
stakeholders.
Board’s Role in Risk Oversight
Our Board is responsible for overseeing the Company’s risk management function. The Board delegates some of its risk oversight role to the Audit
Committee, the People Services (Compensation) Committee and to the Corporate Governance and Nominating Committee. Under its charter, the Audit Committee is responsible for oversight of our risk assessment programs and risk management strategies,
including our corporate compliance programs and internal audit. The Audit Committee, in conjunction with the full Board, also provides oversight of the Company’s cyber security strategies and implementation. Under its charter, the People
Services (Compensation) Committee sets the overall compensation strategy and compensation policies for the Company’s senior executives, including the mitigation of pay practices that could encourage excessive risk taking. Under its charter, the
Corporate Governance and Nominating Committee is responsible for reviewing and monitoring the business risks to the Company’s strategies, communicating to management the views of the Board with respect to the types and level of risks to be
undertaken by the Company and overseeing the risk management undertaken by the Company. In addition to the activities of these committees, the full Board regularly engages in discussions of the most significant risks that the Company is facing and
how these risks are being managed. The Board receives reports on enterprise risk management from senior officers of the Company and from the Chairs of the Audit Committee, the People Services (Compensation) Committee, and the Corporate Governance
and Nominating Committee, as well as from outside advisors. The Board believes that the enterprise risk management process in place enables the Board to effectively oversee the Company’s risk management function. The full Board and the People
Services (Compensation) Committee are also involved in activities related to Chief Executive Officer and management succession.
Corporate
Governance Materials
Our Board has adopted Principles of Corporate Governance. Our Principles of Corporate Governance are available on the
Investor Relations page of our website at http://investor.popeyes.com. The charters of the Audit Committee,
5
People Services (Compensation) Committee and Corporate Governance and Nominating Committee are also available on the Investor Relations page of our website. Our Board has adopted a code of
ethics, the Company’s Honor Code (the “
Honor
Code
”), which applies to all officers and employees. Additionally, our Board has adopted a Code of Conduct for the Board (the “
Directors
Code
”). The
Honor Code and the Directors Code reflect our commitment to conducting our business in accordance with the highest ethical principles. The Honor Code and the Directors Code are also available on the Investor Relations page of our website
at http://investor.popeyes.com. Copies of our Principles of Corporate Governance, committee charters, the Honor Code and the Directors Code are also available upon written request to Popeyes Louisiana Kitchen, Inc., 400 Perimeter Center
Terrace, Suite 1000, Atlanta, Georgia 30346, Attention: Corporate Secretary.
The Corporate Governance and Nominating Committee Responsibilities and
Duties
The purpose of the Corporate Governance and Nominating Committee is (1) to identify individuals qualified to become members of our
Board and to recommend to the Board nominees for election in connection with our annual meeting of shareholders, (2) to develop and recommend to the Board our Principles of Corporate Governance and to take a leadership role in shaping our
corporate governance policies, (3) to make recommendations to the Board with respect to our strategic plans and (4) such other responsibilities and duties as the Board may, from time to time, delegate to the Committee.
One responsibility of the Corporate Governance and Nominating Committee is to establish criteria for evaluating persons to be nominated for election to our
Board and its committees. Under the Corporate Governance and Nominating Committee Charter, these criteria include, at a minimum, the depth of a candidate’s experience and availability, the balance of his or her business interests and experience
and the need for any required expertise on our Board or one of its committees. Furthermore, our Principles of Corporate Governance provide that Independent Directors should be persons with broad training, knowledge and experience in business,
finance, education, government or other professions or vocations who have earned distinction in their chosen fields, and those Principles of Corporate Governance also provide that the composition of our Board should reflect ethnic and gender
diversity, as well as diversity of expertise in areas that will foster our business success. The Corporate Governance and Nominating Committee considers all of these criteria in selecting nominees and in the future may establish additional criteria
for nominees.
Consistent with prior years, the Corporate Governance and Nominating Committee has not adopted a specific policy regarding the
consideration of shareholder director nominees, but its general policy is to welcome prospective nominees recommended by shareholders. Shareholders who wish to recommend individuals for consideration by the Corporate Governance and Nominating
Committee to become nominees for election to our Board may do so by submitting a written recommendation to Popeyes Louisiana Kitchen, Inc., Attention: Corporate Secretary, 400 Perimeter Center Terrace, Suite 1000, Atlanta, Georgia 30346. Submissions
must include sufficient biographical information concerning the recommended individual, including age, five-year employment history with employer names and a description of the employer’s business, whether such individual can read and
understand financial statements, accompanying footnotes and public filings and board memberships (if any) for the Committee to consider as well as any other requirements under our bylaws. The Corporate Governance and Nominating Committee will
evaluate all prospective nominees in the same manner, whether or not the nominee was recommended by a shareholder.
The Corporate Governance and
Nominating Committee’s process for selecting nominees begins with an evaluation of the performance of incumbent directors and a determination of whether our Board or its committees have specific unfulfilled needs. The Corporate Governance and
Nominating Committee then considers prospective nominees identified by the Committee, other directors, our executive officers and shareholders and, in some cases, a third party search firm engaged by the Committee to assist in identifying
candidates. Evaluations of prospective candidates typically include a review of the candidate’s background and qualifications, interviews with several Board members and discussions of the Committee and the full board. This consideration
includes determining whether a candidate qualifies as “independent” under the various standards applicable to the Board and its committees. The Corporate Governance and Nominating Committee or a subcommittee of its members then selects
nominees to recommend to our Board, which considers and makes the final selection of director nominees and directors to serve on its committees.
6
The Corporate Governance and Nominating Committee’s responsibilities also include:
|
|
•
|
|
Considering suggestions by our Chairman for directors to serve on Board committees, including the Chair of each committee, and recommending to the Board the members and Chair of all standing committees;
|
|
|
•
|
|
Annually developing and overseeing an evaluation of our full Board and individual members of our Board;
|
|
|
•
|
|
Overseeing the implementation of the Company’s strategic plans approved by the Board, and reviewing and monitoring the business risks to the Company’s strategies;
|
|
|
•
|
|
Communicating to management the views of the Board with respect to the types and levels of risks to be undertaken by the Company, and overseeing the risk management undertaken by the Company;
|
|
|
•
|
|
Reviewing director compliance with stock ownership policies and guidelines;
|
|
|
•
|
|
Assisting our Board with development of responsibilities of directors;
|
|
|
•
|
|
Establishing and maintaining a director orientation program for new directors, and developing, or making available, a continuing education program conducted for all directors;
|
|
|
•
|
|
Assisting our Board with its responsibilities for oversight of our Honor Code, and reviewing the Company’s evaluation of compliance with our Honor Code;
|
|
|
•
|
|
Reviewing any conflicts of interest involving our officers or members of our Board;
|
|
|
•
|
|
Assisting our Board with oversight of the Company’s policies;
|
|
|
•
|
|
Periodically reviewing the Company’s report on significant litigation;
|
|
|
•
|
|
Reviewing the independence of each of our directors;
|
|
|
•
|
|
Reviewing the continued appropriateness of Board membership when one of our directors changes the position he or she held when elected or appointed to the Board; and
|
|
|
•
|
|
Reviewing and discussing with appropriate members of management the development of the Company’s strategic plans, and making recommendations to our Board with respect to our strategic plans, including potential
mergers, acquisitions and divestitures, as well as financing alternatives.
|
The Audit Committee Responsibilities and Duties
Our Board has determined that all members of the Audit Committee are independent within the meaning of the applicable rules of the SEC and NASDAQ
Global Market (“
Nasdaq
”). Our Board also has determined that Mr. Redgrave is an audit committee financial expert within the meaning of applicable SEC rules.
Management is responsible for the financial reporting process, including the system of internal controls, and for the preparation of consolidated financial
statements in accordance with generally accepted accounting principles. The Company’s independent registered public accounting firm is responsible for auditing those financial statements and expressing an opinion as to their conformity with
generally accepted accounting principles, in addition to auditing the effectiveness of our internal controls over financial reporting. The Audit Committee’s responsibility is to assist the Board in its oversight of these processes, and also to
exercise certain responsibilities which it must undertake as a committee of Independent Directors. The Audit Committee is not engaged in the practice of accounting or auditing and its members are not necessarily experts in the fields of accounting
or auditing, including with respect to auditor independence. The Audit Committee relies, without independent verification, on the information provided to it and on the representations made by management and the Company’s independent registered
public accounting firm.
The Audit Committee acts under a written charter adopted by our Board that sets forth the committee’s responsibilities and
duties, as well as requirements for the committee’s composition and meetings. The Audit Committee charter is available on the Investor Relations page on our website at http://investor.popeyes.com.
7
Review of Our Audited Consolidated Financial Statements for the Fiscal Year Ended December 25, 2016
With regard to our audited financial statements for fiscal 2016, the Audit Committee has:
|
|
•
|
|
reviewed and discussed the audited financial statements with the Company’s management and internal auditors;
|
|
|
•
|
|
been provided with management’s representation to the Audit Committee that the Company’s financial statements have been prepared in accordance with generally accepted accounting principles;
|
|
|
•
|
|
discussed with PricewaterhouseCoopers LLP, independent registered public accounting firm for the Company’s fiscal year ended December 25, 2016, the matters required to be discussed by Statement on Auditing
Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1 AU, Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T; and
|
|
|
•
|
|
reviewed the Company’s system of internal controls with management and PricewaterhouseCoopers LLP.
|
In
addition, the Audit Committee has reviewed the Company’s compliance with Sarbanes-Oxley 404 requirements. This provision requires management to establish and maintain an adequate internal control structure and procedures for financial
reporting. The Audit Committee has received from PricewaterhouseCoopers LLP the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding PricewaterhouseCoopers LLP’s
independence, and the applicable requirements of the SEC. The Audit Committee has discussed with PricewaterhouseCoopers LLP that firm’s independence.
Based upon and in reliance on the representations of and discussions with management, internal auditors and the independent registered public accounting firm,
the Audit Committee recommended to the Board that the audited consolidated financial statements for the Company be included in its Annual Report on
Form 10-K
for the fiscal year ended December 25,
2016 for filing with the SEC.
The People Services (Compensation) Committee Responsibilities and Duties
The People Services (Compensation) Committee is responsible for the following:
|
|
•
|
|
Reviewing and determining all elements of compensation of executive officers and directors;
|
|
|
•
|
|
Making grants of stock awards to officers and employees pursuant to stock plans;
|
|
|
•
|
|
Overseeing the administration of stock and bonus plans;
|
|
|
•
|
|
Reviewing annually the Company’s compensation strategies and policies; and
|
|
|
•
|
|
Reviewing the process for managing executive succession and development training.
|
Pursuant to its charter,
the People Services (Compensation) Committee may delegate authority and responsibilities to subcommittees, as it deems proper, which no delegation has been done in fiscal 2016. Additional actions and responsibilities of the People Services
(Compensation) Committee is provided in the “
Executive
Compensation
” section below of this Form
10-K.
Shareholder Communications with Our Board
Any
shareholder or interested party who wishes to communicate directly with our Board, or an individual member of our Board, may do so in writing to Popeyes Louisiana Kitchen, Inc. Board of Directors, c/o Corporate Secretary, 400 Perimeter Center
Terrace, Suite 1000, Atlanta, Georgia 30346. At each regular Board meeting, the Corporate Secretary will present a summary of any communications received since the last meeting (excluding any communications that consist of advertising, solicitations
or promotions of a product or service) and will make the communications available to the Board upon request.
8
Compensation of
Non-Employee
Directors
Upon election to the Board at our annual meeting of shareholders,
non-employee
members of the Board (other than the
Chairman of the Board) receive an annual cash retainer of $60,000, but each Board member may elect to receive his or her retainer in the form of restricted stock units instead of cash. The Chairman of the Board receives an annual cash retainer of
$160,000. The directors who serve as chair of the Audit Committee and the People Services (Compensation) Committee each receive $15,000 annually in addition to the annual cash retainer. The director who serves as chair of the Corporate Governance
and Nominating Committee receives $7,500 annually in addition to the annual cash retainer. Additionally, all
non-employee
members of the Board receive an annual grant of restricted stock units with an
estimated grant date fair value equal to $100,000, with the number of restricted stock units granted being based on a
30-day
average of our closing stock price prior to the date of the grant. The restricted
stock units vest on the anniversary of the grant date, and are settled in stock at the termination of the
non-employee
director’s service on the Board unless the
non-employee
director makes an election otherwise in accordance with the our director compensation policies; any
non-employee
director that leaves Board service prior to
the fulfillment of their term, however, will vest in a prorated portion of his or her award.
Cheryl A. Bachelder receives no additional compensation for
serving as a member of the Board. Ms. Bachelder’s compensation as Chief Executive Officer can be found in the Summary Compensation Table below.
The following table includes information regarding the compensation paid to our
non-employee
directors for fiscal
2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
(3)
|
|
Fees Earned or
Paid in Cash
($)
(1)
|
|
|
Stock
Awards
($)
(2)
|
|
|
Total
($)
|
|
|
Krishnan Anand
|
|
|
75,000
|
|
|
|
97,044
|
|
|
|
172,044
|
|
|
Carolyn H. Byrd
|
|
|
67,500
|
|
|
|
97,044
|
|
|
|
164,544
|
|
|
John M. Cranor, III
|
|
|
160,000
|
|
|
|
97,044
|
|
|
|
257,044
|
|
|
S. Kirk Kinsell
|
|
|
0
|
|
|
|
155,261
|
|
|
|
155,261
|
|
|
Joel K. Manby
|
|
|
0
|
|
|
|
155,261
|
|
|
|
155,261
|
|
|
Candace S. Matthews
|
|
|
60,000
|
|
|
|
131,826
|
(3)
|
|
|
191,826
|
|
|
Martyn R. Redgrave
|
|
|
75,000
|
|
|
|
97,044
|
|
|
|
172,044
|
|
|
Lizanne Thomas
|
|
|
60,000
|
|
|
|
97,044
|
|
|
|
157,044
|
|
|
(1)
|
The amounts shown in this column include annual cash retainers and committee chairmanship fees.
|
|
(2)
|
Amounts in this column are calculated utilizing the grant date fair value of restricted stock units under FASB ASC Topic 718. The grant date fair values of the restricted stock unit awards are calculated using the
Nasdaq closing price on the date of grant. The actual grant date fair value of restricted stock units differs from the estimated grant date fair value of $100,000, as the estimated grant amount for each director was calculated by dividing the value
of $100,000 by the
30-day
average of our closing stock price prior to the date of the grant.
|
|
(3)
|
Includes a grant of 573 restricted stock units, which represents prorata compensation related to services performed in 2016 prior to the 2016 annual meeting of shareholders.
|
Director Stock Ownership Guidelines
The Company
has stock ownership guidelines for
non-employee
directors to encourage our directors to have a long-term equity stake in Popeyes and align their interests with the interests of shareholders. Those guidelines
provide that each
non-employee
director is required to accumulate stock with a value equal to or greater than three times their annual cash retainer over the first five years of service. For purposes of
calculating ownership under the guidelines, we include outright shares owned by the executive and restricted shares. We do not include unearned performance shares or vested / unvested stock options. All
non-employee
directors exceed these guidelines.
9
Item 11. EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Introduction
The following Compensation
Discussion and Analysis, or “
CD&A
”, describes our 2016 executive compensation program. This CD&A is intended to be read in conjunction with the tables beginning under the heading “
2016
Summary
Compensation
Table
” below, which provide detailed historical compensation information for our following named executive officers, or “
NEOs
”:
|
|
•
|
|
Cheryl A. Bachelder, Chief Executive Officer
|
|
|
•
|
|
Andrew G. Skehan, President – International
|
|
|
•
|
|
William P. Matt, Chief Financial Officer
|
|
|
•
|
|
Richard H. Lynch, Chief Brand Officer
|
|
|
•
|
|
Harold M. Cohen, General Counsel, Chief Administrative Officer and Corporate Secretary
|
Executive
Compensation Summary
2016 Executive Compensation Program Changes
Given the more significant changes that were made to the executive compensation program for 2015, relatively few changes were made to the executive
compensation program for 2016, which included the following:
|
|
•
|
|
Implementation of certain increases to base salary and target long-term incentive values to recognize performance and improve competitiveness;
|
|
|
•
|
|
Elimination of international and new restaurant sales measures from the annual incentive plan; and
|
|
|
•
|
|
Removal of two companies from the peer Group used for relative Total Shareholder Return (“
TSR
”) performance for the 2016-2018 performance shares.
|
2016 Executive Compensation and Pay for Performance Results
Our 2016 financial results, although strong, were generally below budgeted expectations established by the Board at the beginning of the year and yielded the
following executive compensation results for 2016:
|
|
•
|
|
Short-term incentives were earned at 63% of target for all NEOs except Richard H. Lynch who earned 51% of target; and
|
|
|
•
|
|
Performance shares tied to the 2014-2016 cycle were earned at 120% of target, with no positive or negative adjustment based on our relative TSR performance.
|
10
The following highlights these 2016 payout results in the broader context of payout results in recent years under
the annual incentive plan and the performance share plan:
Another way to view the relationship between pay and performance is by comparing target to realizable pay, which we have
summarized below for our CEO for 2016:
In the table above we have used the following definitions for realizable pay:
|
|
•
|
|
Base salary equals base salary
|
|
|
•
|
|
Annual Incentive equals the actual annual incentive paid for 2016 performance
|
|
|
•
|
|
Stock Options equals the
in-the-money
value of stock options granted in 2016 at the end of 2016
|
|
|
•
|
|
Restricted Shares equals the value of restricted shares granted in 2016 at the end of 2016
|
|
|
•
|
|
Performance Shares equals to the number of shares earned at the end of the 2014-2016 performance cycle, valued at the stock price at the end of 2016
|
Compensation Decision Making Process
Role of
Management and the Compensation Committee
The Compensation Committee approves all compensation for executive officers. For NEOs other than the Chief
Executive Officer and the Chief People Officer, our Chief Executive Officer and Chief People Officer make compensation recommendations to the Compensation Committee. In making these recommendations, the Chief Executive Officer and Chief People
Officer consider peer group market data, individual experience and performance
11
and financial impact to the Company. For the Chief People Officer, our Chief Executive Officer makes separate compensation recommendations to the Compensation Committee, without the Chief People
Officer being present. The Compensation Committee reviews and discusses all recommendations prior to approval.
The Compensation Committee is solely
responsible for the review of the performance and compensation for the Chief Executive Officer. Management does not make compensation-related recommendations for the Chief Executive Officer. In executive session, without management present, the
Compensation Committee, in conjunction with its compensation consultant, reviews Chief Executive Officer compensation, including a review of competitive market data and individual performance assessments.
Role of the Independent Compensation Consultant
In 2016,
the Compensation Committee retained Pearl Meyer as its independent compensation consultant. In accordance with the Compensation Committee’s charter, the consultant reports directly to the Compensation Committee. The Compensation Committee
retains sole authority to hire or terminate its compensation consultant, approve its compensation, determine the nature and scope of services and evaluate its performance. A representative of the compensation consultant attends Compensation
Committee meetings, as requested, and communicates with the Compensation Committee Chair between meetings. The Compensation Committee makes all final decisions. Other than Pearl Meyer’s roles and services listed below with respect to
compensation consulting, it performs no other services for the company.
Pearl Meyer’s specific compensation consultation roles include the
following:
|
|
•
|
|
Advising the Compensation Committee and management on executive compensation trends and regulatory developments;
|
|
|
•
|
|
Providing a total compensation study for executives against the companies in our peer group and recommendations for executive pay;
|
|
|
•
|
|
Providing advice to the Compensation Committee on governance best practices;
|
|
|
•
|
|
Serving as a resource to the Compensation Committee Chair for meeting agendas and supporting materials in advance of each meeting;
|
|
|
•
|
|
Reviewing and commenting on proxy disclosure items, including the CD&A; and
|
|
|
•
|
|
Advising the Compensation Committee on management’s pay recommendations.
|
The Compensation Committee has
considered and assessed all relevant factors, including those set forth in the Exchange Act, as well as the requirements of Nasdaq, that impact independence and could give rise to a potential conflict of interest with respect to Pearl Meyer. Based
on this review, the Compensation Committee determined that Pearl Meyer was independent and that there were no conflicts of interest raised by the work performed by Pearl Meyer.
Role of Peer Companies and Competitive Market Data
The
Compensation Committee reviews competitive market data annually for the Chief Executive Officer and at least biennially for the other NEOs, as developed and presented by the Compensation Committee’s independent compensation consultant. In
February 2016, the Compensation Committee reviewed competitive market data for all NEO positions.
We develop a peer group for compensation purposes
according to multiple selection criteria:
|
|
•
|
|
GICS code
sub-industry
(restaurant companies);
|
|
|
•
|
|
Highly-franchised: Restaurants with franchised sales representing approximately 50% or more of system-wide sales/units;
|
12
|
|
•
|
|
Annual system-wide sales: Approximately 1/3x to 3x Popeyes’ annual system-wide sales of $3.3 billion;
|
|
|
•
|
|
Market capitalization: Approximately 0.2x to 5x Popeyes’ market capitalization; and
|
|
|
•
|
|
Direct competitors: For business and management talent.
|
Although we strive to include companies that meet all
of the above criteria, not all of the selected peers meet all of the above criteria.
The competitive market data that was reviewed by the Compensation
Committee when making 2016 executive compensation decisions was prepared by Pearl Meyer during Q4 2015 and relied upon the same peer group companies that were reviewed and approved by the Compensation Committee for the prior year, which consisted of
the following companies:
|
|
|
|
|
|
|
|
|
•
|
|
Brinker International, Inc.
|
|
•
|
|
Famous Dave’s of America, Inc.
|
|
|
|
|
|
|
•
|
|
Buffalo Wild Wings, Inc.
|
|
•
|
|
Jack in the Box, Inc.
|
|
|
|
|
|
|
•
|
|
Denny’s Corporation
|
|
•
|
|
Krispy Kreme Doughnuts, Inc.
|
|
|
|
|
|
|
•
|
|
DineEquity, Inc.
|
|
•
|
|
Panera Bread Company
|
|
|
|
|
|
|
•
|
|
Domino’s Pizza, Inc.
|
|
•
|
|
Papa John’s International, Inc.
|
|
|
|
|
|
|
•
|
|
Einstein Noah Restaurant Group, Inc.
|
|
•
|
|
Sonic Corp.
|
Competitive market values are determined by Pearl Meyer using both proxy-reported pay data from our peer group companies and
survey reported data from a variety of reputable compensation surveys that contain pay data for comparable executive positions with the restaurant, retail, and hospitality industries. Both the peer group data and the survey data reflect companies of
comparable size, as measured by system-wide sales.
We use system-wide sales as a performance metric, rather than corporate revenue, as system-wide sales
capture the size, scope and complexity of operating a highly-franchised global business model like ours. System-wide sales are disclosed in a variety of public sources, including a company’s Form
10-K
and
corporate investor relations websites. Corporate revenues are not used because they primarily represent a pass-through of franchise royalties and significantly underestimates the size and complexity of our highly-franchised business model. For that
reason, we do not use corporate revenues to develop competitive market values and we believe they should not be used by investors or shareholder advisory firms to analyze our compensation programs.
Components of 2016 NEO Compensation
The following
table outlines the major components of our 2016 executive compensation program for our NEOs:
|
|
|
|
|
|
|
|
|
|
|
Pay Component
|
|
Purpose
|
|
Characteristics
|
|
Base Salary
|
|
•
|
|
Attract and retain executives through market-based pay
|
|
•
|
|
To compensate the executive fairly and competitively for the responsibility level of the position
|
|
|
|
|
|
|
|
Annual Incentives
|
|
•
|
|
Encourages achievement of strategic and financial performance metrics that create long-term shareholder value
|
|
•
|
|
Based on achievement of predefined corporate performance objectives
|
|
|
|
|
|
|
|
Long-Term Incentives
|
|
•
|
|
Aligns executives’ long-term compensation interests with shareholders’ investment interests; creates a retention incentive through multi-year vesting and performance cycles
|
|
•
|
|
Value to the executive is based on long-term stock price performance and financial performance goal achievement
|
13
Base Salary
The Compensation Committee determines base salaries for the NEOs and other executives based on a number of factors, including but not limited to, market data,
individual performance, company performance, and management recommendations (except for the Chief Executive Officer).
At the February 2016 meeting, the
Compensation Committee reviewed (i) competitive market data provided by Pearl Meyer, (ii) Ms. Bachelder’s recommendations for each NEO other than herself, and (iii) Ms. Bachelder’s performance. Based on this
review, the Compensation Committee approved salary increases for all of the NEOs with respect to 2016.
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2015
|
|
|
2016
|
|
|
Cheryl A. Bachelder
|
|
$
|
825,000
|
|
|
$
|
900,000
|
|
|
|
|
|
|
Andrew G. Skehan
|
|
$
|
430,000
|
|
|
$
|
443,000
|
|
|
|
|
|
|
William P. Matt
|
|
$
|
400,000
|
|
|
$
|
412,000
|
|
|
|
|
|
|
Richard H. Lynch
(1)
|
|
$
|
430,000
|
|
|
$
|
525,000
|
|
|
|
|
|
|
Harold M. Cohen
|
|
$
|
350,000
|
|
|
$
|
361,000
|
|
|
(1)
|
The increase for Mr. Lynch was part of a holistic review and assessment of his compensation, and was part of a obtaining his commitment to remain with the Company.
|
Annual Incentive Plan
NEOs and other executives are
eligible to participate in our Annual Incentive Plan and receive annual cash incentives based on the achievement of various performance metrics.
2016
NEO Award Opportunities
At the start of each fiscal year the Compensation Committee approves annual incentive compensation targets (as a % of base
salary) based on a review of competitive market data, management’s recommendations and other relevant factors. The 2016 annual incentive targets for our NEOs are as follows:
|
|
|
|
|
|
|
Name
|
|
Target STI
% of Base Salary
|
|
|
Cheryl A. Bachelder
|
|
|
100
|
%
|
|
|
|
|
Andrew G. Skehan
|
|
|
60
|
%
|
|
|
|
|
William P. Matt
|
|
|
60
|
%
|
|
|
|
|
Richard H. Lynch
|
|
|
60
|
%
|
|
|
|
|
Harold M. Cohen
|
|
|
60
|
%
|
2016 NEO Performance Measures and Weights
The following measures and weights applied to each NEO with respect to the 2016 annual incentive plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
EBITDA
|
|
|
Same-Store
Sales
|
|
|
Restaurant
Openings
|
|
|
Cheryl A. Bachelder
|
|
|
60
|
%
|
|
|
20
|
%
|
|
|
20
|
%
|
|
|
|
|
|
|
Andrew G. Skehan
|
|
|
60
|
%
|
|
|
20
|
%
|
|
|
20
|
%
|
|
|
|
|
|
|
William P. Matt
|
|
|
60
|
%
|
|
|
20
|
%
|
|
|
20
|
%
|
|
|
|
|
|
|
Richard H. Lynch
|
|
|
60
|
%
|
|
|
40
|
%
|
|
|
—
|
|
|
|
|
|
|
|
Harold M. Cohen
|
|
|
60
|
%
|
|
|
20
|
%
|
|
|
20
|
%
|
14
Management and the Compensation Committee believe EBITDA growth is critical to our stock price appreciation and
our commitment to sustained shareholder value, and therefore has the highest weight at 60%.
The operational metrics (Same-Store Sales and Restaurant
Openings) are critical to our growth objectives and have a 40% weight. Same-Store Sales focuses on growth within our existing restaurant framework while Restaurant Openings focuses on growing our platform.
2016 Performance and Payout Goals and Results
The
following table shows the threshold, target, and maximum performance and payout level
set
at
the
beginning
of
the
year
for each performance measure, as well as the actual performance and payout level
determined
at
the
end
of
the
year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(in millions)
|
|
|
Same-Store
Sales
|
|
|
Restaurant
Openings
|
|
|
Payout as a %
of Target
|
|
|
Threshold
|
|
$
|
85.572
|
|
|
|
2.20
|
%
|
|
|
210
|
|
|
|
50
|
%
|
|
|
|
|
|
|
|
Target
|
|
$
|
90.076
|
|
|
|
3.20
|
%
|
|
|
235
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
Maximum
|
|
$
|
99.083
|
|
|
|
4.80
|
%
|
|
|
260
|
|
|
|
200
|
%
|
|
|
|
|
|
|
|
2016 Actual Performance
|
|
$
|
88.634
|
|
|
|
1.70
|
%
|
|
|
216
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Payout % of Target
|
|
|
84.2
|
%
|
|
|
0.0
|
%
|
|
|
62.0
|
%
|
|
|
63
|
%
|
Based on the above results relative to performance goals, the following annual incentive payouts were approved for the NEOs
for 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2016 Annual Incentive Awards
|
|
|
|
Target Incentive
|
|
|
Actual Incentive
Payout
|
|
|
Actual Payout As a
% of Target
|
|
|
Cheryl A. Bachelder
|
|
$
|
900,000
|
|
|
$
|
566,280
|
|
|
|
63
|
%
|
|
|
|
|
|
|
Andrew G. Skehan
|
|
$
|
265,800
|
|
|
$
|
167,241
|
|
|
|
63
|
%
|
|
|
|
|
|
|
William P. Matt
|
|
$
|
247,200
|
|
|
$
|
155,538
|
|
|
|
63
|
%
|
|
|
|
|
|
|
Richard H. Lynch
|
|
$
|
315,000
|
|
|
$
|
159,138
|
|
|
|
51
|
%
|
|
|
|
|
|
|
Harold M. Cohen
|
|
$
|
216,600
|
|
|
$
|
136,285
|
|
|
|
63
|
%
|
Long-Term Incentive Plan
NEOs and other executives are eligible to participate in our Long-Term Incentive Plan and receive annual equity grants with various performance and vesting
criteria.
2016 NEO Grant Values
The Compensation
Committee annually determines the grant-date value for each executive based on a review of competitive market data, individual performance, historical awards and management’s recommendations. For 2016, the target grant-date value for long-term
incentive (LTI) awards to the named executive officers was as follows:
|
|
|
|
|
|
|
Name
|
|
Target LTI $
|
|
|
Cheryl A. Bachelder
|
|
$
|
2,400,000
|
|
|
Andrew G. Skehan
|
|
$
|
525,000
|
|
|
William P. Matt
|
|
$
|
525,000
|
|
|
Richard H. Lynch
|
|
$
|
525,000
|
|
|
Harold M. Cohen
|
|
$
|
450,000
|
|
15
2016 NEO Equity Award Mix and Grant Levels
The target grant-date value of the 2016 LTI awards was delivered to executives in the following award types:
|
|
|
|
|
|
|
|
|
|
|
Award Type
|
|
Weight
|
|
|
Vesting Schedule
|
|
Purpose
|
|
Stock Options
|
|
|
25
|
%
|
|
3 year annual ratable
|
|
Direct Shareholder Alignment
|
|
|
|
|
|
|
Restricted Shares
|
|
|
25
|
%
|
|
3 year cliff
|
|
Retention Strength
|
|
|
|
|
|
|
Performance Shares
|
|
|
50
|
%
|
|
3 year cliff
|
|
Linkage to long-term financial performance and relative
shareholder returns
|
Based on the grant values and award mix, the following are the actual equity grants to each NEO in 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Equity Grant Detail
|
|
|
Name
|
|
Stock Options
(1)
|
|
|
Performance
Shares
|
|
|
Restricted Shares
|
|
|
Cheryl A. Bachelder
|
|
|
28,328
|
|
|
|
22,425
|
|
|
|
11,212
|
|
|
|
|
|
|
|
Andrew G. Skehan
|
|
|
6,196
|
|
|
|
4,905
|
|
|
|
2,452
|
|
|
|
|
|
|
|
William P. Matt
|
|
|
6,196
|
|
|
|
4,905
|
|
|
|
2,452
|
|
|
|
|
|
|
|
Richard H. Lynch
|
|
|
6,196
|
|
|
|
4,905
|
|
|
|
19,244
|
(2)
|
|
|
|
|
|
|
Harold M. Cohen
|
|
|
5,311
|
|
|
|
4,204
|
|
|
|
2,102
|
|
|
(1)
|
Exercise price of stock options is $52.91. All awards were granted on April 5, 2016.
|
|
(2)
|
Includes 16,792 restricted shares granted to Mr. Lynch in 2016 for retention purposes.
|
2016-2018
Performance Share Plan Design
The performance shares granted in 2016 have a three-year measurement period based on the following performance measures
and goals:
|
|
•
|
|
Three-year cumulative EBITDA: A three-year cumulative EBITDA goal is approved by the Compensation Committee at the start of the performance period. Payouts are earned based on a sliding scale of performance above and
below the performance goal. The sliding scale is anchored by a minimum performance requirement of 95% of three-year cumulative EBITDA. If 95% of the performance goal is not achieved, then no performance shares are earned. If 95% is achieved, then
50% of the targeted shares are earned. If 100% of the performance goal is achieved, then a target award is earned. The maximum performance requirement is 110% of cumulative EBITDA. If maximum performance is achieved, then 200% of the targeted shares
are earned.
|
|
|
•
|
|
Three-year relative TSR: The number of shares earned by three-year cumulative EBITDA performance will be adjusted based on our three-year TSR against a broader of group of restaurant companies (market cap ranges from
$100 million to $10 billion). This broader group represents restaurant companies competing with Popeyes for investment dollars. Shares earned will be adjusted
-10%
if three-year TSR performance is in the
bottom quartile, and will be adjusted +10% if three-year TSR performance is in the upper quartile. TSR, as defined in the new three-year program, represents stock price appreciation and dividends over the three-year performance period.
|
16
The specific performance goals, performance results, and shares issued under these awards will be disclosed after
the conclusion of the performance period.
2014-2016 Performance Share Payouts
For our three-year performance share program that concluded in 2016, the 2014-2016 cumulative EBITDA target was $241.5 million. We achieved cumulative
EBITDA of $247.3 million, or approximately 102.4% of target. Based on the funding scale approved by the Compensation Committee, we earned 120% of the targeted performance shares. Our three-year relative TSR performance was at the 70.3
percentile of the designated group of restaurant industry companies, resulting in no positive or negative adjustment factor.
The following table sets
forth the target performance shares granted and the actual performance shares earned for the 2014-2016 performance share cycle:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014-2016 Performance Shares
|
|
|
Name
|
|
Performance
Shares Granted
|
|
|
Performance
Shares Earned
(1)
|
|
|
Actual Payout As a
% of Target
|
|
|
Cheryl A. Bachelder
|
|
|
24,335
|
|
|
|
29,202
|
|
|
|
120
|
%
|
|
|
|
|
|
|
Andrew G. Skehan
|
|
|
4,239
|
|
|
|
5,087
|
|
|
|
120
|
%
|
|
|
|
|
|
|
William P. Matt
|
|
|
1,893
|
|
|
|
2,272
|
|
|
|
120
|
%
|
|
|
|
|
|
|
Richard H. Lynch
|
|
|
5,181
|
|
|
|
6,217
|
|
|
|
120
|
%
|
|
|
|
|
|
|
Harold M. Cohen
|
|
|
4,239
|
|
|
|
5,087
|
|
|
|
120
|
%
|
|
(1)
|
Represents the shares earned from the 2014-2016 performance share grant, the three-year relative TSR did not result in an adjustment.
|
The following is the relative TSR peer group with respect to the 2014-2016 performance shares, which was established in 2014 at the time the shares were
granted:
|
|
|
|
|
• Arcos Dorados Holdings, Inc.
|
|
• Domino’s Pizza, Inc.
|
|
|
|
|
• Biglari Holdings Inc.
|
|
• Dunkin’ Brands Group, Inc.
|
|
|
|
|
• BJ’s Restaurants, Inc.
|
|
• Fiesta Restaurant Group, Inc.
|
|
|
|
|
• Bloomin’ Brands, Inc.
|
|
• Ignite Restaurant Group, Inc.
|
|
|
|
|
• Bob Evans Farms, Inc.
|
|
• Jack in the Box Inc.
|
|
|
|
|
• Bravo Brio Restaurant Group, Inc.
|
|
• Jamba, Inc.
|
|
|
|
|
• Brinker International, Inc.
|
|
• Luby’s, Inc.
|
|
|
|
|
• Buffalo Wild Wings, Inc.
|
|
• Nathan’s Famous, Inc.
|
|
|
|
|
• Carrols Restaurant Group, Inc.
|
|
• Panera Bread Company
|
|
|
|
|
• The Cheesecake Factory Incorporated
|
|
• Papa John’s International,
Inc.
|
17
|
|
|
|
|
|
|
|
• Chipotle Mexican Grill, Inc.
|
|
• Red Robin Gourmet Burgers, Inc.
|
|
|
|
|
• Chuy’s Holdings, Inc.
|
|
• Ruby Tuesday, Inc.
|
|
|
|
|
• Cracker Barrel Old Country Store, Inc.
|
|
• Ruth’s Hospitality Group, Inc.
|
|
|
|
|
• Darden Restaurants, Inc.
|
|
• Sonic Corp.
|
|
|
|
|
• Del Frisco’s Restaurant Group, Inc.
|
|
• Texas Roadhouse, Inc.
|
|
|
|
|
• Denny’s Corporation
|
|
• The Wendy’s Company
|
|
|
|
|
• DineEquity, Inc.
|
|
|
Other Policies and Practices
Executive Stock Ownership Guidelines
Target ownership for
our Chief Executive Officer is four times annual base salary. Our other NEOs have a guideline of one times annual base salary. Executives have five years to achieve their ownership guideline. The Compensation Committee reviews progress towards
achievement annually. For purposes of calculating ownership under the guidelines, we include outright shares owned by the executive and restricted shares. We do not include unearned performance shares or vested / unvested stock options. In addition,
we require executive officers to retain 33% of the net shares received from any equity-based awards, after deductions for taxes and exercise costs, until the ownership guidelines are met. All executives who have been employed by the Company for at
least five years have satisfied the ownership requirements under the executive stock ownership guidelines.
Equity Compensation Grant Practices
Stock options are awarded with exercise prices equal to the closing price of our stock on the date of the grant. It is the intention of the
Compensation Committee to approve grants under the long-term incentive plan at a Compensation Committee meeting in the first quarter of our fiscal year in order to maximize the motivational value associated with the awards and to comply with the tax
deductibility standards of Section 162(m) of the Code. Share awards are typically approved by the Compensation Committee with a grant date to coincide with a common anniversary of prior grants. Grant amounts are determined by dividing the
dollar value approved by the Compensation Committee by our average share price for the
30-day
period immediately preceding the grant date. The
30-day
average is used to
minimize the volatility of daily share price movements on grant amounts.
Recoupment (Clawback) Policy
We have adopted an incentive-based compensation recovery policy for executive officers. If we are required to prepare an accounting restatement due to material
noncompliance with any financial reporting requirement under the federal securities laws, we will seek to recover incentive-based compensation (including stock options) from any of our current or former executive officers who (a) received
incentive-based compensation during the three-year period preceding the date on which we announce we are required to prepare the accounting restatement and (b) engaged in misconduct or negligent conduct resulting, directly or indirectly, in our
being required to prepare the accounting restatement. We will seek to recover the excess of the incentive-based compensation paid to the executive officer based on the erroneous data over the incentive-based compensation that would have been paid to
the executive officer if the financial accounting statements had been as presented in the restatement.
18
Hedging, Pledging and Insider Trading Compliance Policy
Our Insider Trading Compliance Policy prohibits all our employees and directors from engaging in hedging, derivative and margin transactions with respect to
our securities and prohibits our directors and executive officers from pledging our securities. None of our executive officers or directors holds any of our stock subject to pledge. Our Insider Trading Compliance Policy also prohibits our employees,
officers and directors from purchasing or selling our securities while in possession of material
non-public
information, and limits purchases or sales of our securities by directors and senior officers to
designated trading windows.
Retirement, Perquisites, and Other Benefits
To provide our NEOs with a competitive level of benefits, NEOs are eligible for an annual executive physical,
pre-retirement
life insurance of five times base salary and disability benefits that make up, in part, for limits on our broad-based plan. Other than an enhanced disability benefit, members of senior
management participate in our other benefit plans on the same terms as other employees. These plans include 401(k) matching contributions, and medical, dental and life insurance. Relocation benefits also are reimbursed from time to time, but are
individually negotiated when they occur. We do not have a pension plan or a deferred compensation arrangement that covers the NEOs or any other employees.
Employment Agreements
The Company has entered into
written employment agreements with each of its respective executive officers providing, in each case, for a base salary subject to annual adjustment by the People Services (Compensation) Committee (the “
Compensation
Committee
”), an annual incentive award, participation in Company-sponsored broad-based and executive benefit plans and such other compensation as may be approved by the Compensation Committee.
Cheryl
A.
Bachelder.
The Company entered into an employment agreement, effective as of February 22, 2016, with
Ms. Bachelder to serve as Chief Executive Officer. The employment agreement has an initial term through December 31, 2019, and each year thereafter, the agreement automatically extends for an additional year unless either party to the
agreement notifies the other that it wishes to terminate the agreement at least 90 days before the scheduled end of the applicable term.
The
employment agreement for Ms. Bachelder provides for an annual base salary of at least $900,000 and an annual cash bonus target of 100% of her annual base salary. For fiscal 2016, she was entitled to a grant of an equity compensation award with
a fair value (determined in accordance with FASB ASC Topic 718) equal to or greater than $2,400,000, which amount in future fiscal years the Compensation Committee may increase or decrease. Ms. Bachelder is also entitled to term life insurance
with a death benefit of at least $4,000,000, an annual physical examination, and other employee benefits available to senior officers of the Company.
Richard
H.
Lynch.
The Company entered into an employment agreement, effective as of February 22, 2016, with
Mr. Lynch to serve as Chief Brand Officer. The employment agreement has an initial term through December 31, 2019, and each year thereafter, the agreement automatically extends for an additional year unless either party to the agreement
notifies the other that it wishes to terminate the agreement at least 90 days before the scheduled end of the applicable term.
The employment
agreement for Mr. Lynch provides for an annual base salary of at least $525,000 and an annual cash bonus target of 60% of his annual base salary. For fiscal 2016, he was entitled to a grant of an equity compensation award with a fair value
(determined in accordance with FASB ASC Topic 718) equal to or greater than $525,000, which amount in future fiscal years the Compensation Committee may increase or decrease. Mr. Lynch is also entitled to term life insurance with a death
benefit of at least $2,150,000, an annual physical examination, and other employee benefits available to senior officers of the Company.
Andrew
G.
Skehan.
The Company entered into an employment agreement, effective as of May 24, 2016, with Mr. Skehan to serve as President - International. The employment agreement had an initial term through
December 31,
19
2016, and each year thereafter, the agreement automatically extends for an additional year unless either party to the agreement notifies the other that it wishes to terminate the agreement at
least 90 days before the scheduled end of the applicable term.
The employment agreement for Mr. Skehan provides for an annual base salary of at
least $443,000 and an annual cash bonus target of 60% of his annual base salary. Mr. Skehan is also entitled to term life insurance with a death benefit of at least $2,215,000, an annual physical examination, and other employee benefits
available to senior officers of the Company.
William
P.
Matt
. The Company entered into an employment agreement, effective as of
May 24, 2016, with Mr. Matt to serve as Chief Financial Officer. The employment agreement had an initial term through December 31, 2016, and each year thereafter, the agreement automatically extends for an additional year unless
either party to the agreement notifies the other that it wishes to terminate the agreement at least 90 days before the scheduled end of the applicable term.
The employment agreement for Mr. Matt provides for an annual base salary of at least $412,000 and an annual cash bonus target of 60% of his annual base
salary. Mr. Matt is also entitled to term life insurance with a death benefit of at least $2,060,000, an annual physical examination, and other employee benefits otherwise available to senior officers of the Company.
Harold
M.
Cohen.
The Company entered into an employment agreement, effective as of May 24, 2016, with Mr. Cohen to serve as
General Counsel and Chief Administrative Officer. The employment agreement had an initial term through December 31, 2016, and each year thereafter, the agreement automatically extends for an additional year unless either party to the agreement
notifies the other that it wishes to terminate the agreement at least 90 days before the scheduled end of the term.
The employment agreement for
Mr. Cohen provides for an annual base salary of at least $361,000 and an annual cash bonus target of 60% of his annual base salary. Mr. Cohen is also entitled to term life insurance with a death benefit of at least $1,805,000, an annual
physical examination, and other employee benefits otherwise available to senior officers of the Company.
Upon an involuntary termination by the Company
without “cause” or by the executive under circumstances constituting a “constructive discharge” (as such terms are defined in the employment agreements, and regardless of whether or not there has been a change in control of the
Company), the agreements provide for severance payments, vesting of outstanding equity awards and certain limited perquisites. These payments and benefits are described under the heading “
Potential
Payments
Upon
Termination
or
Change
in
Control
” below.
The employment agreements also contain
non-compete,
confidentiality and
non-solicitation
provisions that apply during the term of the employment agreement and for a
one-year
period thereafter, with a
two-year
post-termination period for Ms. Bachelder. Ms. Bachelder is also subject to a five-year post-termination
non-disparagement
obligation.
Compensation Program Risk Assessment
In 2016, The Compensation Committee reviewed a comprehensive compensation program risk assessment conducted by Pearl Meyer. The Compensation Committee
concluded that our compensation programs are not reasonably likely to have a material adverse effect on the Company.
Our compensation program provides a
balanced mix of cash and equity, annual and long-term incentives, and stock price performance and internal financial performance metrics, all of which mitigate risk. Specific program features that mitigate risk include:
|
|
•
|
|
We use a combination of performance shares, restricted shares and stock options for equity awards balances risk incentives between stock price appreciation and internal financial performance;
|
20
|
|
•
|
|
The performance share program implemented in 2013 measures three-year cumulative performance, an enhancement that separates the time frames being measured by the annual and long-term incentive plans;
|
|
|
•
|
|
We utilize a combination of internal (EBITDA) and external (TSR) performance metrics;
|
|
|
•
|
|
Annual incentive awards and performance share awards to executive officers are capped at a maximum performance level;
|
|
|
•
|
|
The performance goals under our annual and long-term incentive programs include Company-wide and division metrics which we believe encourage decision-making that is in the best long-term interest of shareholders;
|
|
|
•
|
|
Company-wide and division performance goals are reviewed and approved by the Compensation Committee;
|
|
|
•
|
|
No single executive has complete and direct influence over any of the performance metrics;
|
|
|
•
|
|
The time-based and performance-based vesting of three years for our long-term incentive equity awards helps ensure that our executives’ long-term interests align with those of our shareholders; and
|
|
|
•
|
|
All NEOs are subject to stock ownership guidelines.
|
Compensation Committee Interlocks and Insider
Participation
For fiscal 2016, the Compensation Committee established the compensation for all our executive officers.
During fiscal 2016, Messrs. Anand, Kinsell, Manby and Redgrave were members of our Compensation Committee. None of our executive officers currently serve on
the compensation committee or board of directors of any other company, which has an executive officer serving on our Compensation Committee or Board.
Impact of Tax and Accounting Treatment on Compensation Decisions
The Compensation Committee makes every reasonable effort to ensure that all compensation paid to our executives is fully deductible, provided it determines
that application of applicable limits are consistent with our needs and executive compensation philosophy.
Section 162(m) of the Code limits the
deductibility of executive compensation paid by publicly-held corporations to $1 million per NEO, excluding the Chief Financial Officer. The $1 million limitation does not apply to compensation that qualifies as performance-based. The
Company considers the tax and accounting impact of all compensation decisions and balances the need for competitive compensation programs with the desire to control expenses and maximize tax deductibility. The Compensation Committee intends to use
performance-based compensation to mitigate the deduction limits. Consequently, our annual incentive plan and portions of our long-term equity incentive program (stock options and performance shares) have been designed to qualify as performance-based
compensation and meet the requirements of Section 162(m) of the Code. However, we must attract, retain and reward critical executive talent to maximize shareholder value and the loss of a tax deduction may be necessary and appropriate in
certain circumstances.
COMPENSATION COMMITTEE REPORT
The People Services (Compensation) Committee has reviewed the CD&A and discussed it with management. Based on the review and the discussions with
management, the Compensation Committee recommended to the Board that the CD&A be included in this
Form 10-K/A
filed with the SEC.
|
|
|
The People Services (Compensation) Committee
|
|
|
|
Krishnan Anand, Chair
S. Kirk Kinsell
Joel K. Manby
Martyn R. Redgrave
|
21
2016 Summary Compensation Table
The following table includes information concerning compensation for the NEOs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
(1)
|
|
|
Option
Awards
($)
(2)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
(3)
|
|
|
All Other
Compensation
($)
(4)
|
|
|
Total
($)
|
|
|
Cheryl A. Bachelder,
Chief Executive Officer
|
|
|
2016
|
|
|
|
888,461
|
|
|
|
—
|
|
|
|
1,793,637
|
|
|
|
599,987
|
|
|
|
566,280
|
|
|
|
41,322
|
|
|
|
3,889,687
|
|
|
|
|
2015
|
|
|
|
801,823
|
|
|
|
—
|
|
|
|
1,796,407
|
|
|
|
599,978
|
|
|
|
997,673
|
|
|
|
45,865
|
|
|
|
4,241,746
|
|
|
|
|
|
2014
|
|
|
|
719,231
|
|
|
|
—
|
|
|
|
1,047,865
|
|
|
|
542,492
|
|
|
|
877,250
|
|
|
|
39,829
|
|
|
|
3,226,667
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Skehan,
President International
|
|
|
2016
|
|
|
|
440,000
|
|
|
|
177
|
(5)
|
|
|
392,300
|
|
|
|
131,231
|
|
|
|
167,241
|
|
|
|
28,209
|
|
|
|
1,159,158
|
|
|
|
|
2015
|
|
|
|
416,154
|
|
|
|
—
|
|
|
|
336,739
|
|
|
|
112,491
|
|
|
|
415,522
|
|
|
|
28,535
|
|
|
|
1,309,441
|
|
|
|
|
|
2014
|
|
|
|
360,391
|
|
|
|
—
|
|
|
|
243,215
|
|
|
|
94,497
|
|
|
|
349,650
|
|
|
|
26,203
|
|
|
|
1,073,956
|
|
|
|
|
|
|
|
|
|
|
|
|
William P. Matt,
Chief Financial Officer
|
|
|
2016
|
|
|
|
409,231
|
|
|
|
—
|
|
|
|
392,300
|
|
|
|
131,231
|
|
|
|
155,538
|
|
|
|
29,237
|
|
|
|
1,117,537
|
|
|
|
|
2015
|
|
|
|
393,077
|
|
|
|
100,000
|
|
|
|
336,739
|
|
|
|
112,491
|
|
|
|
290,232
|
|
|
|
69,664
|
|
|
|
1,202,203
|
|
|
|
|
|
2014
|
|
|
|
130,923
|
|
|
|
—
|
|
|
|
273,187
|
|
|
|
39,113
|
|
|
|
103,315
|
|
|
|
56,604
|
|
|
|
703,142
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard H. Lynch,
Chief Brand Officer
|
|
|
2016
|
|
|
|
518,267
|
|
|
|
—
|
|
|
|
1,402,675
|
|
|
|
131,231
|
|
|
|
159,138
|
|
|
|
36,344
|
|
|
|
2,247,655
|
|
|
|
|
2015
|
|
|
|
416,154
|
|
|
|
—
|
|
|
|
336,739
|
|
|
|
112,491
|
|
|
|
327,144
|
|
|
|
31,875
|
|
|
|
1,224,403
|
|
|
|
|
|
2014
|
|
|
|
370,000
|
|
|
|
—
|
|
|
|
223,094
|
|
|
|
115,508
|
|
|
|
310,800
|
|
|
|
26,258
|
|
|
|
1,045,660
|
|
|
|
|
|
|
|
|
|
|
|
|
Harold M. Cohen,
General Counsel, Chief Administrative Officer and Corporate Secretary
|
|
|
2016
2015
2014
|
|
|
|
358,462
343,391
319,200
|
|
|
|
—
—
—
|
|
|
|
336,257
261,922
182,531
|
|
|
|
112,487
87,477
94,497
|
|
|
|
136,285
253,953
233,307
|
|
|
|
31,186
36,401
32,148
|
|
|
|
974,677
983,144
861,683
|
|
|
(1)
|
Amounts reflect the aggregate grant date fair value of restricted stock and performance shares under FASB ASC Topic 718. The grant date fair values of restricted stock awards with only service conditions are calculated
using the Nasdaq closing price of our stock on the date of grant. The grant date fair values of restricted stock awards with service and market conditions are valued utilizing a Monte Carlo simulation model. With respect to the restricted
performance shares granted subject to performance conditions, the grant date fair value is based on a 100% probability of meeting the target performance conditions. See Note 13 of the consolidated financial statements in our Annual Report on
Form 10-K
for the year ended December 25, 2016, regarding assumptions underlying valuation of equity awards. An overview of the features of our performance share awards can be found in the
“
Compensation
Discussion
and
Analysis
” section above. The maximum grant date fair value of the performance share grants in this column related to the new three year program for the fiscal 2016-2018 cycle which
has performance conditions and assuming the highest level of performance conditions will be achieved, is equal to 200% of the respective target amounts. The maximum value that could be earned by each named executive officer under the performance
awards is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Value at Target
($)
|
|
|
2015-2017 Cycle
Maximum Value
(200% of Target) ($)
|
|
|
Cheryl A. Bachelder
|
|
|
1,200,410
|
|
|
|
2,400,820
|
|
|
|
|
|
|
Andrew Skehan
|
|
|
262,565
|
|
|
|
525,130
|
|
|
|
|
|
|
William P. Matt
|
|
|
262,565
|
|
|
|
525,130
|
|
|
|
|
|
|
Richard H. Lynch
|
|
|
262,565
|
|
|
|
525,130
|
|
|
|
|
|
|
Harold M. Cohen
|
|
|
225,040
|
|
|
|
450,080
|
|
22
|
(2)
|
Amounts in this column reflect the grant date fair value of stock options under FASB ASC Topic 718. The grant date fair value of option awards was estimated using a Black-Scholes option-pricing model. See Note 13 of the
consolidated financial statements in our Annual Report on
Form 10-K
for the year ended December 25, 2016 regarding assumptions underlying valuation of equity awards. An overview of the features of
our stock option awards can be found in the “
Compensation
Discussion
and
Analysis
” section above.
|
|
(3)
|
The amounts in this column reflect the cash awards earned by the named individuals under the annual incentive plan. For information about the 2016 Incentive Plan, see “
Annual
Incentive
Plan
” in the “
Compensation
Discussion
and
Analysis
” section above.
|
|
(4)
|
The amounts shown in this column for 2016 reflect the following components:
|
|
|
•
|
|
With respect to Ms. Bachelder and Messrs. Skehan, Matt and Lynch, the amounts of $315, $2,021, $2,850 and $2,126, respectively, for the cost of an annual physical examination.
|
|
|
•
|
|
With respect to Ms. Bachelder, and Messrs. Skehan, Matt, Lynch and Cohen, the amounts of $12,851, $5,917, $5,791, $7,883 and $3,782, respectively, for a Company paid life insurance policy having death benefits of
five times the executive’s base salary.
|
|
|
•
|
|
With respect to Ms. Bachelder and Messrs. Skehan, Matt, Lynch and Cohen, the amount of $6,625 for matching contributions to each individual’s account in our 401(k) plan.
|
|
|
•
|
|
With respect to Ms. Bachelder and Messrs. Skehan, Matt, Lynch and Cohen, the amounts of $20,937, $13,259, $13,377, $19,323 and $20,572, respectively, for the amounts of our contributory share of the costs of each
individual’s participation in our general benefit plans, including medical, dental, life and disability insurance plans.
|
|
|
•
|
|
With respect to Ms. Bachelder and Messrs. Skehan, Matt, Lynch and Cohen, the amounts of $594, $387, $594, $387 and $207, respectively, for the costs to us for each individual’s participation in our group term
life insurance policy.
|
|
(5)
|
This amount is for a service award made to Mr. Skehan.
|
Grants Of Plan-Based Awards In
Fiscal 2016
The following table sets forth certain information regarding potential payouts under the 2015 Incentive Plan and certain information
regarding performance shares and stock options granted during the fiscal year ended December 25, 2016 to each of our named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
Date
|
|
|
Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards
(1)
|
|
|
Estimated Possible Payouts
Under Equity Incentive
Plan
Awards
(2)
|
|
|
Restricted
Stock
Awards
(3)
|
|
|
All Other
Awards:
Number
of
Securities
Underlying
Options
(#)
(4)
|
|
|
Exercise
Or Base
Price of
Option
Awards
($/share)
|
|
|
Grant
Date Fair
Value of
Stock
and
Option
Awards
($)
(5)
|
|
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
|
|
|
|
Cheryl A. Bachelder
|
|
|
|
|
|
|
450,000
|
|
|
|
900,000
|
|
|
|
1,800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,213
|
|
|
|
22,425
|
|
|
|
44,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,200,410
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,212
|
|
|
|
|
|
|
|
|
|
|
|
593,227
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,328
|
|
|
|
52.91
|
|
|
|
599,987
|
|
|
Andrew G. Skehan
|
|
|
|
|
|
|
132,900
|
|
|
|
265,800
|
|
|
|
531,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,453
|
|
|
|
4,905
|
|
|
|
9,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
262,565
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,452
|
|
|
|
|
|
|
|
|
|
|
|
129,735
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,196
|
|
|
|
52.91
|
|
|
|
131,231
|
|
|
William P. Matt
|
|
|
|
|
|
|
123,600
|
|
|
|
247,200
|
|
|
|
494,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,453
|
|
|
|
4,905
|
|
|
|
9,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
262,565
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,452
|
|
|
|
|
|
|
|
|
|
|
|
129,735
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,196
|
|
|
|
52.91
|
|
|
|
131,231
|
|
|
Richard H. Lynch
(6)
|
|
|
|
|
|
|
157,500
|
|
|
|
315,000
|
|
|
|
630,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,453
|
|
|
|
4,905
|
|
|
|
9,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
262,565
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,244
|
|
|
|
|
|
|
|
|
|
|
|
1,140,110
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,196
|
|
|
|
52.91
|
|
|
|
131,231
|
|
|
Harold Cohen
|
|
|
|
|
|
|
108,300
|
|
|
|
216,600
|
|
|
|
433,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,102
|
|
|
|
4,204
|
|
|
|
8,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
225,040
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,102
|
|
|
|
|
|
|
|
|
|
|
|
111,217
|
|
|
|
|
|
4/5/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,311
|
|
|
|
52.91
|
|
|
|
112,487
|
|
23
|
(1)
|
Reflects the threshold, target and maximum payment levels under the 2016 Annual Incentive Plan. Actual amounts earned by our named executive officers are reported in the
Non-Equity
Incentive Plan Compensation column in the 2016 Summary Compensation Table.
|
|
(2)
|
Reflects the threshold, target and maximum number of performance shares that could be earned under the 2016 Long-Term Incentive awards based on the Company’s three-year cumulative EBITDA goal and three-year
relative TSR, provided that the named executive officer remains employed as of the vesting date. For information about the performance criteria, see the “
Compensation
Discussion
and
Analysis
.”
|
|
(3)
|
Reflects the number of restricted awards granted under the 2006 Stock Incentive Plan. The restricted shares have a three-year annual vest, and vesting 1/3 on each April 5, 2017, April 5, 2018, and
April 5, 2019.
|
|
(4)
|
Reflects the number of stock options granted under the 2006 Stock Incentive Plan. The stock options vest over a three year period with 1/3 vesting on April 5, 2017, April 5, 2018, and April 5, 2019,
respectively.
|
|
(5)
|
Reflects the grant date fair value of restricted stock grants, performance shares and stock options under FASB ASC Topic 718 granted to each of the named executive officers in 2016. The grant date fair value of
restricted awards is based on the close of the Company’s stock on the date of grant. With respect to the performance shares, the grant date fair value is based on a 100% probability of meeting the target performance conditions. The grant date
fair value of option awards was estimated on the date of grant using a Black-Scholes option-pricing model. There can be no assurance that the grant date fair value of the restricted stock, performance shares and option awards will ever be realized.
|
|
(6)
|
The Restricted Stock Awards includes a special retention grant of 16,792 restricted shares.
|
Outstanding Equity Awards At 2016 Fiscal
Year-End
The following table includes information regarding the value of all unexercised options and restricted stock awards held by the named executive officers as of
December 25, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(1)
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Grant
Date
|
|
|
Option
Expiration
Date
|
|
|
Number
of Shares
or Units
of Stock
That
Have Not
Vested
(#)
|
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
(2)
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have
Not
Vested
(#)
|
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units
or
Other
Rights
That Have
Not Vested
($)
(2)
|
|
|
Cheryl A. Bachelder
|
|
|
20,070
|
|
|
|
10,035
|
|
|
|
41.66
|
|
|
|
4/5/2014
|
|
|
|
4/5/2021
|
|
|
|
9,876
|
(3)
|
|
|
608,632
|
|
|
|
19,753
|
(8)
|
|
|
1,216,785
|
|
|
|
|
|
—
|
|
|
|
28,328
|
|
|
|
52.91
|
|
|
|
4/5/2016
|
|
|
|
4/5/2023
|
|
|
|
2,527
|
(4)
|
|
|
155,663
|
|
|
|
22,425
|
(9)
|
|
|
1,381,380
|
|
|
|
|
|
46,610
|
|
|
|
—
|
|
|
|
16.52
|
|
|
|
4/10/2012
|
|
|
|
4/10/2019
|
|
|
|
11,212
|
(5)
|
|
|
690,659
|
|
|
|
24,335
|
(10)
|
|
|
1,499,036
|
|
|
|
|
|
8,091
|
|
|
|
16,182
|
|
|
|
59.75
|
|
|
|
4/5/2015
|
|
|
|
4/5/2022
|
|
|
|
1,465
|
(4)
|
|
|
90,244
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
25,697
|
|
|
|
—
|
|
|
|
34.75
|
|
|
|
4/5/2013
|
|
|
|
4/5/2020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Andrew G. Skehan
|
|
|
1,517
|
|
|
|
3,034
|
|
|
|
59.75
|
|
|
|
4/5/2015
|
|
|
|
4/5/2022
|
|
|
|
1,491
|
(7)
|
|
|
91,846
|
|
|
|
4,239
|
(10)
|
|
|
261,122
|
|
|
|
|
|
1,748
|
|
|
|
1,748
|
|
|
|
41.66
|
|
|
|
4/5/2014
|
|
|
|
4/5/2021
|
|
|
|
1,851
|
(3)
|
|
|
114,022
|
|
|
|
3,703
|
(8)
|
|
|
228,105
|
|
|
|
|
|
1,200
|
|
|
|
—
|
|
|
|
34.75
|
|
|
|
4/5/2013
|
|
|
|
4/5/2020
|
|
|
|
2,452
|
(5)
|
|
|
151,043
|
|
|
|
4,905
|
(9)
|
|
|
302,148
|
|
|
|
|
|
—
|
|
|
|
6,196
|
|
|
|
52.91
|
|
|
|
4/5/2016
|
|
|
|
4/5/2023
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
William P. Matt
|
|
|
1,560
|
|
|
|
781
|
|
|
|
39.27
|
|
|
|
8/21/2014
|
|
|
|
8/21/2021
|
|
|
|
1,851
|
(3)
|
|
|
114,022
|
|
|
|
4,905
|
(9)
|
|
|
302,148
|
|
|
|
|
|
1,517
|
|
|
|
3,034
|
|
|
|
59.75
|
|
|
|
4/5/2015
|
|
|
|
4/5/2022
|
|
|
|
2,452
|
(5)
|
|
|
151,043
|
|
|
|
3,703
|
(8)
|
|
|
228,105
|
|
|
|
|
|
—
|
|
|
|
6,196
|
|
|
|
52.91
|
|
|
|
4/5/2016
|
|
|
|
4/5/2023
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,893
|
(10)
|
|
|
116,609
|
|
|
Richard H. Lynch
|
|
|
—
|
|
|
|
6,196
|
|
|
|
52.91
|
|
|
|
4/5/2016
|
|
|
|
4/5/2023
|
|
|
|
1,851
|
(3)
|
|
|
114,022
|
|
|
|
5,181
|
(10)
|
|
|
319,150
|
|
|
|
|
|
4,730
|
|
|
|
—
|
|
|
|
15.32
|
|
|
|
4/5/2011
|
|
|
|
4/5/2018
|
|
|
|
16,792
|
(6)
|
|
|
1,034,387
|
|
|
|
3,703
|
(8)
|
|
|
228,105
|
|
|
|
|
|
1,517
|
|
|
|
3,034
|
|
|
|
58.75
|
|
|
|
4/5/2015
|
|
|
|
4/5/2022
|
|
|
|
2,452
|
(5)
|
|
|
151,043
|
|
|
|
4,905
|
(9)
|
|
|
302,148
|
|
|
|
|
|
5,932
|
|
|
|
—
|
|
|
|
16.52
|
|
|
|
4/10/2012
|
|
|
|
4/10/2019
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
4,273
|
|
|
|
2,137
|
|
|
|
41.66
|
|
|
|
4/5/2014
|
|
|
|
4/5/2021
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
3,897
|
|
|
|
—
|
|
|
|
34.75
|
|
|
|
4/5/2013
|
|
|
|
4/5/2020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
7,810
|
|
|
|
—
|
|
|
|
10.94
|
|
|
|
4/5/2010
|
|
|
|
4/5/2017
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Harold Cohen
|
|
|
1,179
|
|
|
|
2,360
|
|
|
|
59.75
|
|
|
|
4/5/2015
|
|
|
|
4/5/2022
|
|
|
|
1,440
|
(3)
|
|
|
88,704
|
|
|
|
4,204
|
(9)
|
|
|
258,966
|
|
|
|
|
|
1,314
|
|
|
|
—
|
|
|
|
34.75
|
|
|
|
4/5/2013
|
|
|
|
4/5/2020
|
|
|
|
2,102
|
(5)
|
|
|
129,483
|
|
|
|
2,880
|
(8)
|
|
|
177,408
|
|
|
|
|
|
—
|
|
|
|
5,311
|
|
|
|
52.91
|
|
|
|
4/5/2016
|
|
|
|
4/5/2023
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,239
|
(10)
|
|
|
261,122
|
|
|
|
|
|
3,496
|
|
|
|
1,748
|
|
|
|
41.66
|
|
|
|
4/5/2014
|
|
|
|
4/5/2021
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
24
|
(1)
|
Stock options vest in equal parts on each of the first three anniversaries of the date of the grant.
|
|
(2)
|
Market value was calculated using the closing price of our stock on the last business day of fiscal 2016 ($61.60) multiplied by the number of unvested shares on December 25, 2016.
|
|
(3)
|
Restricted stock vests on April 5, 2018.
|
|
(4)
|
The restricted stock units earned by Ms. Bachelder as a Board member of the Company prior to becoming Chief Executive Officer are fully vested, but the shares are not issued until such time as Ms. Bachelder no
longer serves on the Company’s Board
|
|
(5)
|
Restricted stock vests on April 5, 2019.
|
|
(6)
|
Restricted stock vests on December 31, 2018.
|
|
(7)
|
Restricted stock vests on September 2, 2017.
|
|
(8)
|
Reflects the target number of shares that will vest if the performance measure conditions for the cumulative fiscal years of 2015-2017 are satisfied and the recipient continuously remains our employee through the three
year measurement period
|
|
(9)
|
Reflects the target number of shares of performance shares that will vest if the performance measure conditions for the cumulative fiscal years of 2016-2018 are satisfied and the recipient continuously remains our
employee through the three year measurement period
|
|
(10)
|
The performance shares vested on April 5, 2017, as performance measure conditions for the cumulative fiscal years of 2014-2016 were satisfied at approximately 102.4% and the recipient continuously remained our
employee through the vest period
|
Option Exercises And Stock Vested In 2016
The following table includes information regarding exercises of stock options, and vesting of performance shares and restricted stock during 2016 for the
named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
Number of Shares
Acquired on Exercise
(#)
|
|
|
Value Realized
on Exercise
($)
(1)
|
|
|
Number of Shares
Acquired on Vesting
(#)
|
|
|
Value Realized
on Vesting
($)
(2)
|
|
|
Cheryl A. Bachelder
|
|
|
—
|
|
|
|
—
|
|
|
|
42,710
|
|
|
|
2,259,786
|
|
|
Andrew Skehan
|
|
|
—
|
|
|
|
—
|
|
|
|
5,980
|
|
|
|
316,402
|
|
|
William P. Matt
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Richard H. Lynch
|
|
|
8,300
|
|
|
|
369,206
|
|
|
|
6,477
|
|
|
|
342,698
|
|
|
Harold M. Cohen
|
|
|
—
|
|
|
|
—
|
|
|
|
6,548
|
|
|
|
346,455
|
|
25
|
(1)
|
Reflects the value as calculated by the difference between the market price of our common stock at the time of the exercise and the exercise price of the stock options.
|
|
(2)
|
Reflects the value as calculated by multiplying the number of shares of stock by the closing market price of our common stock on the date of vesting.
|
Potential Payments Upon Termination Or Change In Control
Our Compensation Committee believes that we should provide reasonable severance benefits to our employees, and that it is necessary to provide these benefits
in order to retain our management. With respect to senior management, these severance benefits are intended to reflect the fact that it may be difficult for employees at the senior level to find comparable employment within a short period of time.
As of the end of our fiscal year 2016, we had employment agreements with our named executive officers that provide for defined severance benefits upon
the occurrence of certain employment termination events including death, disability, termination without cause and termination as a result of a constructive discharge.
Ms.
Bachelder
and
Mr.
Lynch.
If Ms. Bachelder “retires,” as defined in her employment agreement,
then she is entitled to receive the Accrued Obligations (as defined below) and, subject to the execution of a release of claims, the annual cash bonus that she would have received if she were to have remained employed for the entire applicable
fiscal year prorated according to the portion of the fiscal year during which she was actually employed, continued vesting of equity compensation awards (with a three-year post-termination exercise period for Company Stock Options, or such shorter
time if the applicable Company Stock Option is due to expire on its term during the post-termination exercise period) and vesting of performance-based vested equity compensation awards based on actual performance during the performance period and
prorated as to the time during which she was employed plus two years during such period. If Mr. Lynch “retires,” as defined in his employment agreement, then he is entitled to receive the same benefit as Ms. Bachelder, upon the
same conditions, except that his equity continues vesting for an additional two years, however, his special retention grant does not provide for any accelerated vesting upon retirement.
All
Executive
Officers
. If any executive officer’s employment terminates for any reason, such executive officer will be entitled to
receive or, in the case of his or her death, the estate of such executive officer will be entitled to receive, any of the earned and unpaid portion of such executive officer’s annual base salary and annual bonus, along with accrued and unpaid
vacation and unpaid reimbursements (the “
Accrued
Obligations
”) to be paid within 15 days of the applicable termination date.
In
addition to the Accrued Obligations, if any executive officer’s employment terminates due to death or disability, then, subject to such executive officer (or his or her estate in the event of death) executing a release of claims, such executive
officer will be entitled to receive the annual cash bonus that would have been received if the executive officer were to have remained employed for the entire applicable fiscal year,
pro
rata
vesting for time-based vested equity
compensation (with a
one-year
post-termination exercise period for Company Stock Options, or such shorter time if the applicable Company Stock Option is due to expire on its term during the post-termination
exercise period) and vesting of performance-based vested equity compensation awards as if the target level of performance was met.
The employment
agreements provide that, if an executive officer is terminated by the Company without “Cause” or resigns for a “Constructive Discharge” (each definition provided below), such executive officer will be entitled to the Accrued
Obligations. Subject to the execution of a release of claims, such executive officer will also be entitled to the following:
|
|
•
|
|
an amount equal to the sum of the annual base salary and annual cash target bonus amount (two times such sum for Ms. Bachelder and Mr. Cohen), payable in a lump sum within 60 days after termination;
|
26
|
|
•
|
|
full vesting of time-based vesting equity compensation awards;
|
|
|
•
|
|
vesting of performance-based vested equity compensation awards based on actual performance during the performance period and prorated as to the time during which the executive officer was employed during such period;
and
|
|
|
•
|
|
if eligible for, and the executive officer elects, COBRA coverage, the amount in excess of the employee’s cost if he or she had remained employed for up to twelve months after termination of employment.
|
If an executive officer voluntarily terminates employment, a termination is not a Constructive Discharge. If an executive officer
involuntarily terminates for Cause, then he or she is entitled only to the Accrued Obligations.
The payment(s) to an executive officer upon termination
may be delayed in compliance with Section 409A of the Code, if such payment does not fall within an exemption from, and is made upon a “separation from service” and the applicable executive officer is a “specified employee”
within the meaning of Section 409A of the Code.
Except for payment of the Accrued Obligations, payments made or benefits provided upon a termination
event are subject to the applicable executive officer’s ongoing compliance with the restrictive covenants provided in the employment agreement.
For
our executives, “Cause” includes the individual doing one or more of the following:
|
|
•
|
|
committed, is convicted of or pled guilty or nolo contendere to, a felony, or any crime involving fraud, dishonesty, violence or moral turpitude;
|
|
|
•
|
|
in carrying out his or her duties, has been guilty of gross neglect or willful misconduct resulting in harm or potential material harm to the Company or any of its subsidiaries or affiliates;
|
|
|
•
|
|
willfully engaged in dishonesty or other willful conduct that caused harm or has the potential to cause material harm to the reputation of the Company or any of its affiliates;
|
|
|
•
|
|
violated any policy of the Company relating to equal employment opportunity, harassment, business conduct or conflict of interest;
|
|
|
•
|
|
failed to materially comply with the policies of the Company or refused to follow or materially comply with the duly promulgated, reasonable and lawful directives of the Board and such failure or refusal to comply
continues for 15 days after written notice by the Company has been received by the individual; or
|
|
|
•
|
|
breached any of the provisions of Sections 9.02, 9.04 or 9.05 (relating to certain restrictive covenants) of his or her employment agreement or otherwise materially breached a material term of the employment agreement.
|
For our executives, “Constructive Discharge” means a termination without the individual’s prior written consent due to one
or more of the following conditions:
|
|
•
|
|
a material diminution of the individual’s position, authority, responsibilities and/or duties;
|
|
|
•
|
|
any material reduction in the individual’s then-current base salary or target cash incentive pay;
|
|
|
•
|
|
the failure of a successor to the Company (whether through an asset sale or other sale of all or substantially all of the Company through which assumption of the employment agreement would be required for it to remain
in force after consummation of the sale) to assume the employment agreement and the Company’s obligations under the employment agreement; or
|
|
|
•
|
|
a material breach of any material term of the employment agreement by the Company.
|
27
An additional condition that may give rise to a Constructive Discharge for Ms. Bachelder is if there is a
change in her reporting structure so that she no longer reports solely and directly to the Board. An additional condition that may give rise to a Constructive Discharge for Messrs Skehan, Matt or Cohen is the Company’s delivery of a notice
indicating its decision not to renew the term of his employment agreement.
The following table reflects the amounts that would be payable to each of the
named executive officers in the event of certain employment termination events, including involuntary termination, and termination due to death or disability. The amounts shown assume that such termination, death or disability was effective as of
December 25, 2016. Our closing stock price on the last business day prior to December 25, 2016 was $61.60. For purposes of the following table, it is assumed that with respect to performance-based incentives for which performance goals
have been established, the actual performance would be achieved at target, and that the stock price on the last date of any future vesting (for equity that continues to vest) will be the same as our closing stock price on the last business day prior
to December 25, 2016 of $61.60. The time-value of the payments are not taken into account in the calculation of the amounts reflected in the table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Salary
($)
(1)
|
|
|
Annual
Incentives
($)
|
|
|
Accelerated Vesting of
Unvested Equity
($)
(2)
|
|
|
Company Paid
COBRA
($)
(3)
|
|
|
Total
($)
|
|
|
Cheryl A. Bachelder
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause or
due to Constructive Discharge
|
|
|
1,800,000
|
|
|
|
1,800,000
|
|
|
|
8,730,260
|
(4)
|
|
|
16,877
|
|
|
|
12,347,137
|
|
|
Death or Disability
(5)
|
|
|
|
|
|
|
|
|
|
|
4,956,753
|
|
|
|
|
|
|
|
4,956,753
|
|
|
Retirement
|
|
|
|
|
|
|
1,800,000
|
|
|
|
4,168,291
|
|
|
|
|
|
|
|
5,968,291
|
|
|
|
|
|
|
|
|
|
Andrew G. Skehan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause or
due to Constructive Discharge
|
|
|
443,000
|
|
|
|
265,800
|
|
|
|
1,824,944
|
|
|
|
12,114
|
|
|
|
2,545,858
|
|
|
Death or
Disability
|
|
|
|
|
|
|
|
|
|
|
1,032,139
|
|
|
|
|
|
|
|
1,032,139
|
|
|
|
|
|
|
|
|
|
William P. Matt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause or
due to Constructive Discharge
|
|
|
412,000
|
|
|
|
247,200
|
|
|
|
1,450,513
|
|
|
|
20,753
|
|
|
|
2,130,466
|
|
|
Death or
Disability
|
|
|
|
|
|
|
|
|
|
|
804,252
|
|
|
|
|
|
|
|
804,252
|
|
|
|
|
|
|
|
|
|
Richard H. Lynch
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause or
due to Constructive Discharge
|
|
|
525,000
|
|
|
|
315,000
|
|
|
|
3,137,534
|
|
|
|
12,109
|
|
|
|
3,989,643
|
|
|
Death or Disability
(5)
|
|
|
|
|
|
|
|
|
|
|
1,314,691
|
|
|
|
|
|
|
|
1,314,691
|
|
|
Retirement
|
|
|
|
|
|
|
315,000
|
|
|
|
745,396
|
|
|
|
|
|
|
|
1,060,396
|
|
|
|
|
|
|
|
|
|
Harold M. Cohen
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause or
due to Constructive Discharge
|
|
|
722,000
|
|
|
|
433,200
|
|
|
|
1,490,591
|
|
|
|
20,753
|
|
|
|
2,666,544
|
|
|
Death or Disability
(5)
|
|
|
|
|
|
|
|
|
|
|
841,256
|
|
|
|
|
|
|
|
841,256
|
|
|
(1)
|
Amounts reflect two times current base salary for Ms. Bachelder and Mr. Cohen, and one times current base salary for the other named executive officers.
|
|
(2)
|
Reflects the value of unvested time-based stock options and restricted stock, and performance shares for which performance goals have been established, that would accelerate and vest upon the specific termination event.
For purposes of this table, it is assumed that all of the stock options and restricted stock held by Ms. Bachelder and Messrs. Skehan, Matt, Lynch and Cohen would accelerate as of December 25, 2016. For purposes of this table, it is
assumed that with respect to performance shares for which performance goals have been established, held by Ms. Bachelder and Messrs. Skehan, Matt, Lynch and Cohen would accelerate as of December 25, 2016, to the target amount of
performance shares. Our closing stock price on the last business day prior to December 25, 2016 was $61.60.
|
28
|
(3)
|
Represents
pre-tax
amounts of estimated payments for continuation of COBRA benefits for 12 months, rounded up to the nearest whole dollar. The cost of continuation of COBRA
benefits is estimated using current costs over the continuation period. All such amounts are payable under the applicable NEO’s employment agreement only upon a qualifying termination.
|
|
(4)
|
Excludes an aggregate $315,368 payable with respect to 3,992 Company RSUs granted to Ms. Bachelder during her service as a director prior to becoming Chief Executive Officer that have fully vested, but which have
not yet been settled. The shares to be issued upon settlement of these Company RSUs will not be issued until such time as Ms. Bachelder no longer serves on the Popeyes Board.
|
|
(5)
|
It is assumed that any 2016 annual incentives would be earned and an “Accrued Obligation,” as of December 25, 2016, and there are no additional outstanding awards.
|
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Security Ownership
The following table
sets forth information known to us regarding the beneficial ownership of our common stock as of January 31, 2017 by:
|
|
•
|
|
each shareholder known by us to own beneficially more than 5% of our common stock;
|
|
|
•
|
|
each of our named executive officers; and
|
|
|
•
|
|
all of our directors and executive officers as a group.
|
Beneficial ownership is determined in accordance with
the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage of ownership held by that person, shares of common stock subject to options held by that person that are currently exercisable or will become
exercisable within 60 days after January 31, 2017, and restricted stock units and restricted stock that vests within 60 days after January 31, 2017, are deemed outstanding, while these shares are not deemed outstanding for computing
percentage ownership of any other person. None of the outstanding and unvested equity awards granted to the executive officers will vest in full or in part during the
60-day
period following January 31,
2017. Unless otherwise indicated in the footnotes below, the persons and entities named in the table have sole voting and investment power with respect to all shares beneficially owned, subject to community property laws where applicable. The
address for those individuals for which an address is not otherwise indicated is: c/o Popeyes Louisiana Kitchen, Inc., 400 Perimeter Center Terrace, Suite 1000, Atlanta, Georgia 30346.
The percentages of common stock beneficially owned are based on 20,917,716 shares of common stock outstanding as of January 31, 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
Beneficially
Owned
|
|
|
Percentage
of Class
|
|
|
Directors and Named Executive Officers:
|
|
|
|
|
|
|
|
|
|
Cheryl A. Bachelder
(1)
|
|
|
333,412
|
|
|
|
1.6
|
%
|
|
Andrew G. Skehan
|
|
|
21,656
|
|
|
|
|
*
|
|
William P. Matt
|
|
|
8,077
|
|
|
|
|
*
|
|
Richard H. Lynch
(2)
|
|
|
69,937
|
|
|
|
|
*
|
|
Harold M. Cohen
|
|
|
11,751
|
|
|
|
|
*
|
|
Krishnan Anand
(3)
|
|
|
18,623
|
|
|
|
|
*
|
|
Carolyn H. Byrd
(4)
|
|
|
40,055
|
|
|
|
|
*
|
|
John M. Cranor, III
(5)
|
|
|
48,172
|
|
|
|
|
*
|
|
S. Kirk Kinsell
(6)
|
|
|
5,260
|
|
|
|
8
|
|
|
Joel K. Manby
(7)
|
|
|
10,322
|
|
|
|
|
*
|
|
Candace S. Matthews
(8)
|
|
|
2,445
|
|
|
|
|
*
|
|
Martyn R. Redgrave
(9)
|
|
|
12,000
|
|
|
|
|
*
|
|
Lizanne Thomas
(10)
|
|
|
3,099
|
|
|
|
|
*
|
|
John K. Merkin
|
|
|
4,680
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group (14 persons)
|
|
|
589,489
|
|
|
|
2.8
|
%
|
|
|
|
|
|
Five Percent Shareholders:
|
|
|
|
|
|
|
|
|
|
BlackRock, Inc.
(11)
|
|
|
2,302,510
|
|
|
|
11.1
|
%
|
|
Nicholas Company, Inc.
(12)
|
|
|
3,299,329
|
|
|
|
14.68
|
%
|
|
Janus Capital Management LLC
(13)
|
|
|
2,234,624
|
|
|
|
10.8
|
%
|
|
Janus Contrarian Fund
(14)
|
|
|
1,392,896
|
|
|
|
6.7
|
%
|
|
The Vanguard Group, Inc.
(15)
|
|
|
1,755,491
|
|
|
|
8.46
|
%
|
|
*
|
Less than 1% of the outstanding shares of common stock.
|
29
|
(1)
|
Ms. Bachelder owns 48,117 shares of her beneficially owned shares indirectly through a trust. Includes 3,992 shares of common stock for which she has the vested right to acquire (within sixty (60) days of
January 31, 2017) through the conversion of restricted stock units upon termination of service as a director of the Company.
|
|
(2)
|
Includes 1,900 shares of common stock that Mr. Lynch transferred as a gift on March 9, 2017.
|
|
(3)
|
Mr. Anand’s business address is Molson Coors Brewing Company, 1225 17th Street, Suite 3200, Denver, Colorado 80202. Includes 14,655 shares of common stock for which the director has the vested right
to acquire (within sixty (60) days of January 31, 2017) through the conversion of restricted stock units upon termination of service as a director of the Company.
|
|
(4)
|
Ms. Byrd’s business address is 400 Perimeter Center Terrace, NE, Suite 1000, Atlanta, Georgia 30346. Includes 39,791 shares of common stock for which the director has the vested right to acquire (within
sixty (60) days of January 31, 2017) through the conversion of restricted stock units upon termination of service as a director of the Company.
|
|
(5)
|
Mr. Cranor’s business address is 400 Perimeter Center Terrace, NE, Suite 1000, Atlanta, Georgia 30346. Includes 39,672 shares of common stock for which the director has the vested right to acquire (within
sixty (60) days of January 31, 2017) through the conversion of restricted stock units upon termination of service as a director of the Company.
|
|
(6)
|
Mr. Kinsell’s business address is Panther Ridge Partners LLC, 243 West Bermuda Drive, Santa Rosa Beach, FL 32459. Includes 5,260 shares of common stock for which the director has the vested right to acquire
(within sixty (60) days of January 31, 2017) through the conversion of restricted stock units upon termination of service as a director of the Company.
|
|
(7)
|
Mr. Manby’s business address is SeaWorld Parks & Entertainment, 9205 SouthPark Center Loop, Suite 400, Orlando, FL 32819. Includes 8,422 shares of common stock for which the director has the vested
right to acquire (within sixty (60) days of January 31, 2017) through the conversion of restricted stock units upon termination of service as a director of the Company.
|
|
(8)
|
Ms. Matthews’ business address is Amway Corporation, 7575 Fulton Street East, Ada, MI 49355. Includes 2,445 shares of common stock for which the director has the vested right to acquire (within sixty
(60) days of January 31, 2017) through the conversion of restricted stock units upon termination of service as a director of the Company.
|
|
(9)
|
Mr. Redgrave’s business address is 400 Perimeter Center Terrace, NE, Suite 1000, Atlanta, Georgia 30346. Includes 7,000 shares of common stock for which the director has the vested right to acquire
(within sixty (60) days of January 31, 2017) through the conversion of restricted stock units upon termination of service as a director of the Company.
|
|
(10)
|
Ms. Thomas’ business address is Jones Day, 1420 Peachtree Street, NE, Suite 800, Atlanta, GA 30309. Includes 2,899 shares of common stock for which the director has the vested right to acquire (within sixty
(60) days of January 31, 2017) through the conversion of restricted stock units upon termination of service as a director of the Company.
|
|
(11)
|
Represents shares of common stock beneficially owned by BlackRock, Inc. (“BlackRock”). BlackRock has sole voting power with respect to 2,302,510 shares and sole dispositive power with respect to 2,302,510
shares. This information is included in reliance upon a Schedule 13G/A filed with the SEC on February 1, 2017. The address of BlackRock is 55 East 52nd Street, New York, New York 10022.
|
|
(12)
|
Represents shares of common stock beneficially owned by Nicholas Company, Inc. (“Nicholas Company”),
Nicholas Fund, Inc. (“Nicholas Fund”), and Albert O. Nicholas (“Albert Nicholas”). Nicholas Company has sole dispositive power with respect to 1,508,158 shares. Nicholas Fund has sole voting power with respect to 1,261,171
shares. Albert Nicholas has sole voting power with respect to 530,000 shares and
|
30
|
|
sole dispositive power with respect to 530,000 shares. This information is included in reliance upon a Schedule 13G/A filed with the SEC on February 13, 2017. The address of Nicholas
Company, Nicholas Fund, and Albert Nicholas is 700 North Water Street, Milwaukee, Wisconsin 53202.
|
|
(13)
|
Represents shares of common stock beneficially owned by Janus Capital Management LLC (“Janus Capital”). Janus Capital has sole voting power with respect to 2,234,624 shares and sole dispositive power with
respect to 2,234,624 shares. This information is included in reliance upon a Schedule 13G/A filed with the SEC on February 13, 2017. The address of Janus Capital is 151 Detroit Street, Denver, Colorado 80206.
|
|
(14)
|
Represents shares of common stock beneficially owned by Janus Contrarian Fund (“Janus Contrarian”). Janus Contrarian has sole voting power with respect to 1,392,896 shares and sole dispositive power with
respect to 1,392,896 shares. This information is included in reliance upon a Schedule 13G/A filed with the SEC on February 13, 2017. The address of Janus Contrarian is 151 Detroit Street, Denver, Colorado 80206.
|
|
(15)
|
Represents shares of common stock beneficially owned by The Vanguard Group, Inc. (“Vanguard”). Vanguard has sole voting power with respect to 41,048 shares, sole dispositive power with respect to 1,712,311
shares, and shared dispositive power with respect to 43,180 shares. This information is included in reliance upon a Schedule 13G/A filed with the SEC on February 13, 2017. The address of Vanguard is 100 Vanguard Blvd., Malvern, Pennsylvania
19355.
|
Equity Compensation Plan Information
The following table gives information about our common stock that may be issued upon the exercise of options, warrants and rights under all of our existing
equity compensation plans as of December 25, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Category
|
|
Number of
Securities to be
Issued Upon
Exercise
of
Outstanding
Options, Warrants
and Rights
|
|
|
Weighted-average
Exercise Price of
Outstanding
Options, Warrants
and
Rights
(1)
|
|
|
Number of
Securities
Remaining Available
for Future Issuance
Under
Equity
Compensation Plans
|
|
|
Equity compensation plans approved by security holders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFC Enterprises, Inc. 2002 Incentive Stock Plan
|
|
|
0
|
|
|
|
—
|
|
|
|
0
|
|
|
AFC Enterprises, Inc. 2006 Incentive Stock Plan
|
|
|
263,017
|
|
|
|
35.77
|
|
|
|
0
|
|
|
Popeyes Louisiana Kitchen, Inc. 2015 Incentive Stock Plan
|
|
|
88,298
|
|
|
|
53.01
|
|
|
|
1,954,066
|
(2)
|
|
Equity compensation plans not approved by security holders:
|
|
|
0
|
|
|
|
—
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
351,315
|
|
|
|
|
|
|
|
1,954,066
|
|
|
(1)
|
During 2005, in connection with the declaration of a special cash dividend, our Board approved adjustments to outstanding options under our Employee stock option plans. The modifications adjusted the exercise price and
the number of shares associated with each employee’s outstanding stock options to preserve the value of the options after the special cash dividend. We did not recognize a charge as a result of the modifications because the intrinsic value of
the awards and the ratio of the exercise price to the market value per share for each award did not change.
|
|
(2)
|
All of these shares are available for issuance pursuant to grants of full-value stock awards.
|
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain Relationships and Related
Transactions
In accordance with its charter, the Corporate Governance and Nominating Committee is responsible for assisting the Board with its
responsibilities for oversight of the Honor Code, which includes policies relating to conflicts of interest. Although we have not entered into any related party transactions that are required to be disclosed in this Form
10-K,
if there were to be such a transaction in the future, it would need to be approved by our Corporate Governance and Nominating Committee and the Board.
31
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than 10% of a registered class of our equity
securities shareholders to file with the SEC reports of ownership and changes in ownership of our common stock. Directors, executive officers and greater than 10% shareholders are required by SEC regulations to furnish us with copies of all forms
they file under Section 16(a). Based solely on a review of the copies of these reports furnished to us or written representations that no other reports were required, we believe that during fiscal 2016, all of our directors, executive officers
and greater than 10% (“greater than 10% shareholders”) timely complied with these requirements. Note that on March 1, 2017 Mr. Cranor amended a Form 4 previously filed on March 30, 2011 due to an inadvertent administrative
error.
Affirmative Determinations Regarding Director Independence and Other Matters
Our Board has determined that the following eight directors are independent within the meaning of applicable Nasdaq rules: Krishnan Anand, Carolyn H. Byrd,
John M. Cranor III, S. Kirk Kinsell, Joel K. Manby, Candace S. Matthews, Martyn R. Redgrave and Lizanne Thomas. Cheryl A. Bachelder is currently our Chief Executive Officer and therefore is not independent within the meaning of applicable
Nasdaq rules.
In this Information Statement the directors who have been affirmatively determined by the Board to be “independent directors”
under this rule are referred to individually as an “Independent Director” and collectively as the “Independent Directors.”
The Board
has also determined that each member of three out of the four committees of the Board, including the Audit Committee, the People Services (Compensation) Committee and the Corporate Governance and Nominating Committee, meets the independence
requirements applicable to those committees prescribed by Nasdaq and the SEC.
|
Item 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
The Audit Committee has the sole authority and responsibility
for the appointment, retention, oversight, termination and replacement of the independent auditor (subject, if applicable, to shareholder ratification). The Audit Committee shall be directly responsible for the compensation and oversight of the work
of the independent auditor for the purpose of preparing and issuing an audit report and related work. No audit services or
non-audit
services shall be performed by the independent auditor for the Company
unless first
pre-approved
by the Audit Committee and unless permitted by the rules and regulations of the SEC. If the Audit Committee approves an audit service within the scope of the engagement of the
independent auditor, such audit services shall be deemed to have been
pre-approved
for the purposes of this Section.
The Company’s independent registered public accounting firm is PricewaterhouseCoopers LLP. The Audit Committee has received from PricewaterhouseCoopers
LLP the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding PricewaterhouseCoopers LLP’s independence, and the applicable requirements of the SEC. The Audit
Committee has discussed with PricewaterhouseCoopers LLP that firm’s independence.
Pursuant to its charter, the Audit Committee must
pre-approve
all audit and
non-audit
services to be performed by the independent auditors and no such services may be performed unless permitted by SEC rules. The Audit
Committee has reviewed, discussed and approved the fees paid to PricewaterhouseCoopers LLP during fiscal years 2016 and 2015 for audit and
non-audit
services, which are set forth below under “
Fees
Paid
to
Independent
Registered
Public
Accounting
Firm
,” and has determined that the provision of the
non-audit
services is compatible with the firm’s
independence.
32
Audit Fees
PricewaterhouseCoopers LLP billed us aggregate fees and expenses of $1,030,000 for the integrated annual audit of our 2016 financial statements, and billed us
aggregate fees and expenses of $890,592 for the integrated annual audit of our 2015 financial statements.
Audit-Related Fees
For 2015, PricewaterhouseCoopers LLP billed us aggregate fees and expenses of $15,000 primarily for technical consultation on stock-based compensation expense
and revenue recognition.
Tax Fees
PricewaterhouseCoopers LLP billed us aggregate fees and expenses of $134,375 and $108,382 for 2016 and 2015, respectively, for assistance with the preparation
of our federal and state tax returns, federal and state income tax examinations, and other tax accounting services.
All Other Fees
PricewaterhouseCoopers LLP billed us $244,140 for
non-audit
related services in 2016 and $4,140 for
non-audit
related services in 2015.
33