BUILD-A-BEAR WORKSHOP, INC. Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On
These compensation adjustments included base salary adjustments for the Company's Executive Officers, determination of the 2022 annual bonus program performance objectives, and approval of the 2022 long-term incentive compensation grants, each of which is described below.
2022 Base Salary Adjustments
The adjusted annual base salaries for the Company's Executive Officers are:
Name /Position Adjusted Annual Base SalarySharon John , President and Chief Executive Officer$764,800 Voin Todorovic , Chief Financial Officer$427,100 Jennifer Kretchmar ,Chief Digital and Merchandising$452,700
Officer
J. Christopher Hurt , Chief Operations and Experience$447,700
Officer
Eric Fencl , Chief Administrative Officer, General$361,600 Counsel and Secretary
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2022 Annual Bonus Program
The Committee established the 2022 performance objectives for the range of cash
bonuses that may be paid under the
Name Base Bonus Payout TargetSharon John 100%Voin Todorovic 50%Jennifer Kretchmar 50%J. Christopher Hurt 50%Eric Fencl 50%
The Committee established specific profitability and revenue targets. If the Company achieves at least the threshold consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA"), the Executive Officer will earn between 18.75% and 150% (the "Profitability Percentage of Base Bonus Calculation") of the Base Bonus Calculation. If the Company (i) achieves at least a specified EBITDA, and (ii) achieves at least the threshold total revenues, the Executive Officer will earn between 6.25% and 50% (the "Revenue Percentage of Base Bonus Calculation") of the Base Bonus Calculation. If the Company achieves at least a specified EBITDA and certain specified operational objectives are also attained, the sum of the Profitability Percentage of Base Bonus Calculation and the Revenue Percentage of Base Bonus Calculation will be increased by up to an additional 25% (the "Objectives Modifier"); provided, however, that (i) the Objectives Modifier cannot increase the sum of the Profitability Percentage of Base Bonus Calculation and the Revenue Percentage of Base Bonus Calculation to exceed 100%, and (ii) the total amount earned cannot exceed 200% of an Executive Officer's Base Bonus Calculation. Consolidated EBITDA and Total Revenues results that fall between any of the achievement levels set forth in the Cash Bonus Program will be interpolated between the applicable achievement levels, in the sole discretion of the Committee. This discretion includes the ability to increase or reduce the otherwise applicable Percentage of Base Bonus Calculation for each achievement level.
The foregoing summary of the Cash Bonus Program is qualified in its entirety by reference to the description of such program filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
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2022 Long-Term Incentive Compensation
Utilizing market data compiled by the Committee's compensation consultant, the
Committee determined the market value of the total long-term incentive program
awards ("LTI Market Value") for each Executive Officer, payable pursuant to the
terms of the Omnibus Plan. For
Name Target Number Number of
of Shares of Shares of Time-
Three-Year Based
Performance- Restricted Stock
Based Restricted
Stock
Sharon John 48,530 20,799
Voin Todorovic 8,319 8,319
Jennifer Kretchmar 8,319 8,319
J. Christopher Hurt 8,319 8,319
Eric Fencl 7,626 7,626
The target number of shares of three-year performance-based restricted stock
awarded to the President and Chief Executive Officer was derived by dividing 70%
of her LTI Market Value by the closing sale price of the Company's common stock
on the
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The Committee established specific profitability and revenue objectives for the fiscal 2022, 2023 and 2024 performance period and assigned a weighting to each objective. Profitability will be measured by the Company's achievement of EBITDA growth goals, by meeting established compound annual growth rate targets. Revenue will be measured by the Company's achievement of revenue growth, by meeting established compound annual growth rate targets for total revenues. The Total Earned Percentage ("Total Earned Percentage") of the performance-based stock will be determined by adding the percent of target number of shares for each performance objective based on the Company's achievement level of each performance objective over the three-year period multiplied by the weighting assigned to each objective. For the three-year performance period, the profitability objective will be weighted 75% and the revenue objective, which is subject to a threshold profitability rate in order to be counted, will be weighted 25%. Consolidated financial results that fall between any of the established achievement levels will be interpolated between the applicable achievement levels, in the sole discretion of the Committee. This discretion includes the ability to increase or reduce the otherwise applicable percentage of target number of shares or payout amount earned, as applicable, for each achievement level.
The number of shares of time-based restricted stock awarded to each Executive
Officer was derived by dividing 30% of the President and Chief Executive
Officer's LTI Market Value or, for the other Executive Officers, 50% of his or
her LTI Market Value by the closing sale price of the Company's common stock on
the
The terms of the 2022 time-based and performance-based restricted stock are as set forth in the relevant portions of the Company's form of Restricted Stock Agreement (the "Award Agreement"). Vesting is accelerated, in certain circumstances, upon a change in control, upon death or termination of employment with the Company due to disability, subject to the terms set forth in the Award Agreement. Time-based restricted stock carries voting and dividend rights from the date of grant, but the payment of any such dividends are deferred until the shares to which such dividends are attributable vest. Holders of performance-based restricted stock are entitled to voting and dividend rights only upon satisfaction of applicable performance criteria. The summary of the terms of the time-based and performance based restricted stock herein is qualified in its entirety by reference to the terms set forth in the form of the Award Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.
Each of the performance-based restricted stock awards described herein is
subject to reimbursement or forfeiture in the event the Company is required to
prepare an accounting restatement of its financial statements due to the
Company's material noncompliance with any financial reporting requirement under
securities laws, and in any event, in accordance with the terms of any Company
recoupment policy that may be adopted pursuant to the rules and regulations of
the Commission or
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description of Exhibit Number 10.1 Description ofBuild-A-Bear Workshop, Inc. Cash Bonus Program for C-Level Employees 10.2 Form of Restricted Stock Agreement under the Registrant's 2020 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K, filed onApril 16, 2021 ) 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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