DEFINITIVE PROXY STATEMENT
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

Filed by the Registrant  ☒                             Filed by a party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Under Rule 14a-12

DAVE & BUSTER’S ENTERTAINMENT, INC.

(Name of Registrant as Specified In Its Charter)

 

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

Payment of Filing Fee (Check the appropriate box):

  No fee required.
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Title of each class of securities to which transaction applies:

 

     

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  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

     

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  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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LOGO

EAT DRINK PLAY WATCH®

2020

NOTICE OF ANNUAL MEETING

AND PROXY STATEMENT

Tuesday, June 23, 2020, 8:30 a.m., Central Daylight Time

Virtual Meeting, for details visit www.meetingcenter.io/226537069


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LOGO

May 13, 2020

To Our Shareholders:

On behalf of the Board of Directors, it is our pleasure to cordially invite you to participate in the 2020 Annual Meeting of Shareholders of Dave & Buster’s Entertainment, Inc. (the “Annual Meeting”) on June 23, 2020, at 8:30 a.m. Central Daylight Time. We are pleased to announce that this year’s Annual Meeting will be our first time hosting a completely virtual meeting of shareholders, which will be conducted solely online via live webcast. You will be able to listen to the Annual Meeting live online, vote your shares electronically and submit your questions prior to and during the Annual Meeting. You may access the Annual Meeting by visiting www.meetingcenter.io/226537069 on the meeting date and at the time described in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement. The password for the Annual Meeting is: PLAY2020. Please be sure to check in early to ensure that you can access the Annual Meeting on your computer or other electronic device. You will find information regarding the matters expected to be addressed at the Annual Meeting described in detail in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement.

Your vote is important to us. While we invite you to listen online to the Annual Meeting and exercise your right to vote your shares online during the meeting, we recognize that many of you may not be able to listen or may choose not to do so. Whether or not you plan to listen, we respectfully request you vote as soon as possible over the Internet, by telephone, or, upon your request, after receipt of paper copies of the proxy materials. Your vote will mean that you are represented at the Annual Meeting regardless of whether you participate online during the meeting. You may also request a paper copy of the proxy card to submit your vote, if you prefer. If you have voted by the Internet, by mail or by telephone and later decide to participate in the Annual Meeting virtually, you may do so and vote online during the Annual Meeting. We encourage you to vote by Internet.

Thank you for being a shareholder and we look forward to the Annual Meeting in this new virtual format.

Sincerely,

LOGO

Stephen M. King

Chairman of the Board

LOGO

Brian A. Jenkins

Chief Executive Officer


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LOGO

  

 

DAVE & BUSTER’S ENTERTAINMENT, INC.

2481 Mañana Drive

Dallas, TX 75220

NOTICE OF ANNUAL MEETING

OF SHAREHOLDERS

To Our Shareholders:

NOTICE IS HEREBY GIVEN that the 2020 Annual Meeting of Shareholders of Dave & Buster’s Entertainment, Inc. (the “Annual Meeting”) will be held virtually at the noted time and webpage below for the following purposes:

 

  When:

8:30 a.m.

      

Central Daylight Time

      

Tuesday

      

June 23, 2020

 

  Where:

The Annual Meeting will be held virtually.

 

 

  Webpage:

www.meetingcenter.io/226537069

 

 

Who Can Vote:

Only shareholders of record at the close of business on April 24, 2020, are entitled to notice of, and to vote at, the meeting or any adjournment or postponement thereof.

Items of Business:

 

   

To elect the nine directors named in the Proxy Statement, each to serve for one year or until his or her successor has been elected and qualified, or until his or her earlier death, resignation or removal.

 

 

   

To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the year ending January 31, 2021.

 

 

   

To cast an advisory vote on executive compensation.

 

 

   

To approve the Company’s Amended and Restated 2014 Omnibus Incentive Plan.

 

 

   

To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

 
 

If you plan to attend the meeting virtually on the Internet, please follow the registration instructions as outlined in the Proxy Statement accompanying this Notice or visit www.meetingcenter.io/226537069. You will need to have your control number available from your Proxy Card or Notice Regarding the Availability of Proxy Materials. The password for the meeting will be PLAY2020. Please note that the webpage will not be active until approximately two weeks before the meeting date.

The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice.

Beginning on May 13, 2020, we sent a Notice Regarding the Availability of Proxy Materials to all shareholders entitled to vote at the Annual Meeting, together with instructions on how to access our proxy materials over the Internet and how to vote.

By Order of the Board of Directors

 

 

LOGO

Robert W. Edmund

General Counsel, Secretary

and SVP of Human Resources

Dallas, Texas

May 13, 2020

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON JUNE 23, 2020.

 

The Company’s Proxy Statement and Annual Report on Form 10-K

are available at http://edocumentview.com/play.


Table of Contents

DAVE & BUSTER’S ENTERTAINMENT, INC.

Proxy Statement

For the Annual Meeting of Shareholders

To Be Held on June 23, 2020

TABLE OF CONTENTS

 

      Page  
2020 Proxy Statement Summary      1  
Proposal No. 1 – Election of Directors      5  
Proposal No. 2 – Ratification of Appointment of Independent Registered Public Accounting Firm      11  
Proposal No. 3 – Advisory Vote on Executive Compensation      12  
Proposal No. 4 – Approval of the Company’s Amended and Restated 2014 Omnibus Incentive Plan      13  
Directors and Corporate Governance      20  

Composition and Board Independence

     20  

Corporate Governance

     20  

The Board’s Role in Risk Oversight

     21  

Succession Planning

     21  

Board of Directors Leadership Structure

     21  

Director Compensation

     22  

Director Stock Ownership Guidelines

     24  

Policy Regarding Shareholder Recommendations for Director Candidates

     24  

Director Qualifications

     24  

Current Nominations

     25  

Code of Business Conduct and Ethics and Whistle Blower Policy

     25  

Compensation Committee Interlocks and Insider Participation

     25  

Communications with the Board of Directors

     25  
Security Ownership of Certain Beneficial Owners and Management      26  
Executive Officers      29  
Executive Compensation      32  

Compensation Discussion and Analysis

     32  

Compensation Philosophy and Overall Objectives of Executive Compensation Programs

     32  

Compensation Practices

     33  

Shareholder Say-on-Pay Vote for 2019 and Compensation Actions Taken

     34  

Procedures for Determining Compensation

     34  

Pay for Performance Alignment

     35  

Elements of Compensation

     36  

Deductibility of Executive Compensation

     41  

CEO Pay Ratio

     42  

Stock Ownership Guidelines for Officers

     42  

Clawback Policy

     42  

Risk Assessment Disclosure

     43  

COVID-19 Pandemic Action Plan

     43  

Compensation Committee Report

     44  
2019 Summary Compensation Table      45  

Grants of Plan-Based Awards in Fiscal 2019

     47  

Outstanding Equity Awards at Fiscal Year End 2019

     49  

Fiscal 2019 Option Exercises and Stock Vested

     50  

2019 Nonqualified Deferred Compensation

     51  

Employment Agreements

     51  

Potential Payments upon Termination or Change of Control

     52  

Equity Compensation Plan Information

     56  


Table of Contents
      Page  
Transactions with Related Persons      57  
Report of the Audit Committee      57  
Section 16(a) Beneficial Ownership Reporting Compliance      58  
Shareholder Proposals      58  
Other Business      58  
Where You Can Find More Information      58  
FAQs      59  
Appendix A – Amended and Restated 2014 Omnibus Incentive Plan      A-1  


Table of Contents

2020 Proxy Statement Summary

This summary highlights selected information on Dave and Buster’s Entertainment, Inc., a Delaware corporation (sometimes referred to herein as “we”, “us”, “our” or the “Company”) that is provided by our Board of Directors (the “Board of Directors” or the “Board”) in more detail throughout the Proxy Statement. This summary does not contain all of the information you should consider before voting, and you should read the entire Proxy Statement before casting your vote.

Annual Meeting Information

 

 

 

Date:

 

 

Tuesday

June 23, 2020

 

   

Voting

 

Only shareholders as of the Record Date (April 24, 2020) are entitled to vote.

 

Participating Online during the Annual Meeting

 

If you are a registered shareholder (the shares are held in your name), you must register by following the instructions set forth at www.meetingcenter.io/226537069 or in the FAQs section of this Proxy Statement (page 59).

 

If you are a beneficial shareholder (the shares are held in the name of your bank, brokerage firm or other nominee), you will need to obtain a “legal proxy” from the registered shareholder (your bank, brokerage firm or other nominee) to register to vote at the annual meeting and follow the instructions in the FAQs section of this Proxy Statement (page 59).

 

Time:

 

 

8:30 a.m.
Central Daylight Time

 

 

 

Place:

 

 

The Annual Meeting will be held virtually.

 

 

 

Webpage:

 

 

www.meetingcenter.io/226537069

 

 

 

Record Date:

 

 

April 24, 2020

 

 

 

LOGO   LOGO   LOGO   LOGO

 

Vote via the Internet

Follow the instructions on your
Notice or Proxy Card

 

 

Vote via Phone

Call the number on

your Notice or Proxy Card

 

 

Vote via Mail

Follow the instructions

on your Notice or Proxy Card

 

 

Vote Online during the
Annual Meeting

Register to participate in the
Annual Meeting virtually and
Vote online

Shareholders Action

 

 

Proposals

   Description    Board Voting
Recommendation
   Votes
Required
   Page
Reference
1   

Election of Directors

   FOR each

nominee

   Majority    5-10
2   

Ratification of Appointment of

Independent Registered Public Accounting Firm

   FOR    Majority    11
3   

Advisory Vote on Executive Compensation

   FOR    Majority    12
4   

Approval of the Company’s Amended and Restated 2014 Omnibus Incentive Plan

   FOR    Majority    13-19


 

Dave & Buster’s Entertainment, Inc.   1    Eat Drink Play Watch®


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Information about the Board of Directors at 2019 Fiscal Year End:

 

 

  Independence, Committees and Meetings

Director*

Board of
Directors
Audit
Committee
Compensation
Committee
Nominating
and Corporate
Governance
Committee
Finance
Committee
         

Victor L. Crawford**

I M M
         

Hamish A. Dodds

I M M
         

Michael J. Griffith

LID C
         

Jonathan S. Halkyard

I M M C
         

Brian A. Jenkins***

CEO
         

Stephen M. King****

COB
         

Patricia H. Mueller

I M C
         

Kevin M. Sheehan

I C M M
         

Jennifer Storms

I M M M
         

Number of Meetings in Fiscal 2019

8 8 6 4 11

 

I

    Independent Director

LID

    Lead Independent Director

CEO

    Chief Executive Officer

COB

    Chairman of the Board

C

    Committee Chair

M

    Committee Member

*

    Mr. John C. Hockin was appointed to the Board of Directors in early-May 2020 after the end of the 2019 Fiscal Year. He was appointed to serve on Compensation and Finance Committees.

**

    Due to limited time commitments, Mr. Crawford has determined he will complete his current term and not stand for re-election.

***

    As a non-independent member of the Board, Mr. Jenkins does not serve on any committees.

****

    As the non-independent Chairman of the Board, Mr. King does not serve on any committees.

Board Skills and Core Competencies:

 

 

Our Board is comprised of directors who have a variety of skills and core competencies as noted in the chart* below:

LOGO

 

*

Mr. Crawford is not included as he is leaving the Board at the end of his current term.



 

Dave & Buster’s Entertainment, Inc.   2    Eat Drink Play Watch®


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Our Board is also diverse in age, tenure and gender:

 

LOGO   LOGO

 

LOGO

 

*

Mr. Crawford is not reflected as he is leaving the Board at the end of his current term.

Corporate Governance Highlights:

 

Our Board of Directors and management are committed to maintaining strong corporate governance practices that promote and protect the long-term interests of our shareholders. Our practices are designed to provide effective oversight and management of our company as well as meet our regulatory and NASDAQ requirements, including the following:

 

   

Separate Chairman of the Board and Chief Executive Officer

 

   

Lead Independent Director

 

   

All Board Committees comprised of only Independent Directors

 

   

Regular Executive Sessions of Independent Directors

 

   

Diverse Board

 

   

Commitment to Board Refreshment

   

Annual Director Elections

 

   

Majority Voting in Uncontested Director Elections

 

   

Director Share Ownership Requirements

 

   

Strong Director Attendance Record

 

   

Director Overboarding Policy

 

   

Mandatory Director Retirement Age

 

   

Annual Board and Committee Evaluations

 

   

Continued Engagement with Our Shareholders

 

 

Fiscal 2019 Business Performance Highlights:

 

 

   

Total revenues increased 7.1% to $1,355 million from $1,265 million in fiscal 2018.

 

   

Number of stores increased 12.4% to 136 from 121.

 

   

Comparable store sales decreased 2.6%.

 

   

Net income of $100.3 million vs. $117.2 million in fiscal 2018.

 

   

Earnings per share increased to $2.94 per diluted share from $2.93 per diluted share in fiscal 2018.

 

   

EBITDA increased less than 1.0% to $280.5 million from $279.3 million in fiscal 2018.



 

Dave & Buster’s Entertainment, Inc.   3    Eat Drink Play Watch®


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Fiscal 2019 Executive Compensation Highlights and Key Practices:

 

 

   

The Compensation Committee conducted its on-going review of executive compensation programs, in partnership with its independent compensation consultants AON Consulting and FW Cook during each consultant’s tenure in fiscal 2019.

 

   

The Compensation Committee conducted a review of its compensation consultant and selected FW Cook to succeed AON Consulting as its independent compensation consultant in September 2019.

 

   

There were no material changes to executive compensation philosophies or practices in fiscal 2019 from the prior fiscal year.

 

   

Payments to our executive officers under the annual Executive Incentive Plan were an average of 53.1% of target, based on results achieved in fiscal 2019.

 

   

Payouts to all executive officers under the Long Term Incentive Plan for the fiscal 2017 grant were combined payout of 113% of target, based on cumulative results achieved during fiscal 2017, 2018, and 2019.

 

   

All named executive officers met the stock ownership guidelines for executive officers at the end of fiscal 2019.

 

   

The Compensation Committee reviewed the compensation programs for fiscal 2020 and, in response to the COVID-19 pandemic, made the following changes in fiscal 2019 compensation payouts and fiscal 2020 compensation programs:

 

  -

Cash payouts on 2019 Executive Incentive Plan were delayed and payment will be in awards of stock rather than cash.

 

  -

Temporary base salary reductions of 50% for CEO and all Senior Vice Presidents reporting to the CEO, including all named executive officers.

 

  -

Suspension of cash payments to all members of the Board of Directors for the last three quarters of 2020.

 

  -

Indefinite delay of any merit-based increases in salaries for fiscal 2020.

 

  -

Suspension of short- and long-term bonus plan for fiscal 2020.

 

  -

Adoption of 2020 Business Recovery and Transformation Plan utilizing grants of Restricted Stock Units and performance-based Market Stock Units as more fully described in Section “COVID-19 Pandemic Action Plan” on page 43.

 

  -

Subject to shareholder approval, amendment of 2014 Omnibus Incentive Plan to increase available shares by 3.0 million.

COVID-19 Pandemic Responses:

 

 

   

Temporarily closed all stores as of March 20, 2020.

 

   

Significant reduction in capital spending: New store construction halted, and capital spending on strategic initiatives, store remodel, games and maintenance severely curtailed.

 

   

Significant reduction in operating expenses: Temporary furlough of all store hourly team members and reduction in store management and corporate staff by 90% during store closing period.

 

   

Compensation for senior leadership team reduced by 50% and Board of Directors suspension of cash compensation for remainder of year.

 

   

Suspension of quarterly dividend and share repurchase program.

 

   

Drawdown of revolving credit facility.

 

   

On-going discussions with landlords and vendors to further reduce expenses, extend payment terms and obtain other payment concessions.

 

   

Develop re-opening plans following lifting of governmental mandates.

 

   

Raised new equity capital through sale of shares of common stock in April and May of 2020.



 

Dave & Buster’s Entertainment, Inc.   4    Eat Drink Play Watch®


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PROPOSAL NO. 1

ELECTION OF DIRECTORS

Your proxy will be used to vote FOR the election of all of the nominees named below unless you abstain from or vote against the nominees when you send in your proxy. The Company’s Board of Directors will be comprised of nine members. Each of the nominees for election to the Board of Directors is currently a director of the Company. If elected at the Annual Meeting, each of the nominees will serve for one year or until his or her successor is duly elected and qualified, or until such director’s earlier death, resignation or removal. If any of the nominees is unable or unwilling to be a candidate for election by the time of the Annual Meeting (a contingency which the Board does not expect to occur), the shareholders may vote for a substitute nominee chosen by the present Board to fill a vacancy. In the alternative, the shareholders may vote for just the remaining nominees leaving a vacancy that may be filled at a later date by the Board. Alternatively, the Board may reduce its size.

We are furnishing below certain biographical information about each of the nine nominees for director. Also included is a description of the experience, qualifications, attributes and skills of each nominee.

 

Hamish A. Dodds

 

DIRECTOR SINCE: 2017

   

AGE: 63

   

COMMITTEES: Audit and Finance

   

DIRECTOR STATUS: INDEPENDENT

   

RECENT POSITION:

   

-  President and Chief Executive Officer of Hard Rock International, an owner, operator, and franchisor of restaurants, hotels, casinos, and live music venues in over seventy countries, from 2004-February 2017.

Leadership, Strategic, Operations, Finance, Global, Franchise, Entertainment, Gaming, Food & Beverage

   

PRIOR BUSINESS EXPERIENCE:

   

-  cbc (The Central American Bottling Corporation) (also known as CabCorp), a multi-Latin beverage company in more than 33 countries with strategic partners PepsiCo, Ambev and Beliv:

   Chief Executive Officer (2002-2003)

   Non-executive Director (2003-2010)

Leadership, Strategic, Board Governance, Global, Distribution, Food & Beverage

-  PepsiCo, Inc., a multinational food, snack and beverage corporation:

   Various management and financial positions including Division President and General Manager for beverage operations across Latin America (1989-2002)

Accounting, Finance, Food & Beverage, Operations, Global

-  The Burton Group (now Arcadia Group) (an UK multinational retailing company) and Overseas Containers, Ltd. (an UK container shipping company):

   Multiple management and financial positions (1982-1989)

Accounting, Finance, Consumer Goods, Retail

   
   

PUBLIC COMPANY BOARDS:

       

-  Current:             Dave  & Buster’s Entertainment, Inc.

    Pier 1 Imports, Inc.    
   

OTHER POSITIONS/MEMBERSHIPS:

       

-  Fellow Member, Chartered Management Accountants

       
   

EDUCATION:

       

-  B.A. Business Studies, Robert Gordon University, Scotland

       
   

ACCOLADES:

       

-  Honorary Doctorate, Business Administration, Robert Gordon University (2011)

 

       

 

Dave & Buster’s Entertainment, Inc.   5    Eat Drink Play Watch®


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Michael J. Griffith

 

DIRECTOR SINCE: 2011

   

AGE: 63

   

COMMITTEES: Compensation

   

DIRECTOR STATUS: INDEPENDENT

   

RECENT POSITION:

   

-  President and Chief Executive Officer of EAT Club, Inc., the largest business-focused online lunch delivery company in the United States, from July 2016-March 2018.

Leadership, Strategic, Finance, Food & Beverage, Marketing, E-Commerce

   

PRIOR BUSINESS EXPERIENCE:

   

-  Activision Blizzard, Inc., a worldwide online, personal computer, console, handheld, and mobile game publisher:

   Vice Chairman (March 2010-August 2016)

Leadership, Strategic, Board/Governance

-  Activision Publishing, Inc. (prior to merger with Blizzard Entertainment, Inc.), one of the world’s largest third-party video game publishers:

   President and Chief Executive Officer (June 2005-March 2010)

Leadership, Strategic, Finance, Amusements/Gaming, Operations, Entertainment

-  The Procter & Gamble Company, a multinational consumer goods corporation:

   Various executive positions, including President of the Global Beverage Division, Vice President and General Manager of Coffee Products, and Vice President and General Manager of Fabric & Home Care—Japan and Korea and Fabric & Home Care Strategic Planning—Asia (1981-2005)

Leadership, Strategic, Global, Consumer Goods, Consumer Insights/Marketing

   
   

PUBLIC COMPANY BOARDS:

       

-  Current:             Dave  & Buster’s Entertainment, Inc.

    Central Garden & Pet Company    
   

EDUCATION:

       

-  B.A. Mathematics, Computational Math, and Economics, Albion College, MI

 

         

-  M.B.A. Finance and Strategic Planning, University of Michigan

       
     

Jonathan S. Halkyard

 

DIRECTOR SINCE: 2011

   

AGE: 55

   

COMMITTEES: Audit, Finance, and Nominating and

                       Corporate Governance

   

DIRECTOR STATUS: INDEPENDENT

   

RECENT POSITION:

   

-  President and Chief Executive Officer of Extended Stay America, Inc., the largest owner/operator of company branded hotels in North America, and its paired-share REIT, ESH Hospitality, Inc., from January 2018 to December 2019.

Leadership, Strategic, Hospitality, Board Governance, Finance

   

PRIOR BUSINESS EXPERIENCE:

   

-  Extended Stay America, Inc.:

   Chief Financial Officer (January 2015-December 2017)

   Chief Operating Officer (September 2013-January 2015)

Leadership, Strategic, Hospitality, Operations, Finance

-  NV Energy, Inc. a holding company providing energy services and products in Nevada, and its wholly-owned utility subsidiaries, Nevada Power Company and Sierra Pacific Power Company:

   Executive Vice President and Chief Financial Officer (July 2012-September 2013)

Leadership, Strategic, Finance

-  Caesar’s Entertainment Corporation (formerly Harrah’s Entertainment, Inc.), one of the world’s largest casino entertainment providers:

   Various executive, finance and managerial capacities, including Executive Vice President, Chief Financial Officer and Treasurer (2001-2012)

Leadership, Strategic, Operations, Finance, Entertainment, Gaming, Food & Beverage

   
   

PUBLIC COMPANY BOARDS:

       

-  Current:             Dave & Buster’s Entertainment, Inc.

       

-  Past 5 years:      Extended Stay America, Inc. (2018-2019)

       
   

OTHER POSITIONS/MEMBERSHIPS:

       

-  Member, Board of Advisors, McColl School of Business, Queens University of Charlotte, NC

   

-  Member, Board of Trustees, Charlotte Latin School, NC

   
   

EDUCATION:

       

-  B.A. Economics, Colgate University

   

-  M.B.A. Harvard Business School

   
   

ACCOLADES:

       

-  2013 Civitas Laurel Award, Foundation for an Independent Tomorrow, Las Vegas, NV

 

       

 

Dave & Buster’s Entertainment, Inc.   6    Eat Drink Play Watch®


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John C. Hockin

 

DIRECTOR SINCE: 2020

   

AGE: 50

   

COMMITTEES: Compensation & Finance

   

DIRECTOR STATUS: INDEPENDENT

   

CURRENT POSITION:

   

-  Managing Director, Public Equity Investing, Kohlberg Kravis Roberts & Co., a global investment firm with over $200bn of assets under management since April 2015.

Leadership, Strategic, Investments, Finance

   

PRIOR BUSINESS EXPERIENCE:

   

-  Golden Gate Capital, a San Francisco-based private equity firm with over $12bn in committed capital under management:

   Co-head of Public Equity Investing (2010-2015)

Leadership, Strategic, Investments, Finance

-  J.H. Whitney & Co., a private equity firm founded in 1946:

   Partner (1995-2010)

Leadership, Strategic, Corporate Governance, Investments, Finance

-  Morgan Stanley, a financial holding company providing various financial products and services to corporations, governments, financial institutions and individuals globally:

   Analyst (1993-1995)

Investments, Finance

   
   

PUBLIC COMPANY BOARDS:

       

-  Current:             Dave  & Buster’s Entertainment, Inc.

       
   

OTHER POSITIONS/MEMBERSHIPS:

       

-  Board Member, Episcopal Impact Fund

       
   

EDUCATION:

       

-  B.A. Economics, Yale University (cum laude)

 

         

-  M.B.A. Stanford University Graduate School of Business (Arjay Miller Scholar)

 

       
     

Brian A. Jenkins

 

DIRECTOR SINCE: 2018

   

AGE: 58

   

COMMITTEES: None

   

DIRECTOR STATUS: MANAGEMENT

   

CURRENT POSITION:

   

-  Chief Executive Officer for Dave & Buster’s Entertainment, Inc., since August 2018.

Leadership, Strategic, Board Governance, Finance, Operations, Food & Beverage, Amusements/Gaming, Marketing, Consumer Insights, Global

   

PRIOR BUSINESS EXPERIENCE:

   

-  Dave & Buster’s Entertainment, Inc.:

   Senior Vice President and Chief Financial Officer (December 2006-August 2018)

Leadership, Strategic, Finance, Consumer Insights, Global, Food & Beverage, Amusements/Gaming

-  Six Flags, Inc., an amusement park operator:

   Various positions, including Senior Vice President—Finance (1996-2006)

Leadership, Strategic, Finance, Consumer Insights, Global, Food & Beverage, Amusements

-  FoxMeyer Health Corporation, a wholesale pharmaceuticals distributor:

   Various finance positions, including Vice President of Corporate Planning and Business Development (1990-1996)

Leadership, Strategic, Finance

   
   

PUBLIC COMPANY BOARDS:

       

-  Current:             Dave  & Buster’s Entertainment, Inc.

       
   

EDUCATION:

       

-  B.S. Commerce, Finance/MIS, University of Virginia

 

         

-  M.B.A. Southern Methodist University

       
     

 

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Stephen M. King

 

DIRECTOR SINCE: 2006

   

AGE: 62

   

COMMITTEES: None

   

DIRECTOR STATUS: NON-INDEPENDENT

   

CURRENT POSITION:

   

-  Chairman of the Board of Dave & Buster’s Entertainment, Inc., since July 2017.

Leadership, Strategic, Board Governance, Finance, Operations, Food & Beverage, Amusements/Gaming, Marketing, Consumer Insights, Global

   

PRIOR BUSINESS EXPERIENCE:

   

-  Dave & Buster’s Entertainment, Inc.:

   Chief Executive Officer (September 2006-August 2018)

   Senior Vice President and Chief Financial Officer (2006)

Leadership, Strategic, Board Governance, Finance, Operations, Food & Beverage, Amusements/Gaming, Marketing, Consumer Insights, Global

-  Carlson Restaurants Worldwide Inc., an owner, franchisor and operator of casual dining restaurant brands worldwide, including T.G.I. Friday’s:

   Various executive and management capacities, including, Chief Financial Officer, Chief Administrative Officer, Chief Operating Officer, and President and Chief Operating Officer of International (1984-2006)

Leadership, Strategic, Finance, Operations, Food & Beverage, Supply Chain, Information Technology, Franchise, Global

   

PUBLIC COMPANY BOARDS:

       

-  Current:             Dave  & Buster’s Entertainment, Inc.

    Ruth’s Hospitality Group, Inc.    

EDUCATION:

       

-  B.S. Hotel & Restaurant Administration, Cornell University

   

-  M.B.A. Finance, Cornell University

   

ACCOLADES:

       

-  2017 Golden Chain Award Honoree, Nation’s Restaurant News

-  Ernst & Young Entrepreneur of the Year Finalist (2017 – Southwest Region)

-  Cornell University Distinguished Classmates of 1979

 

       

 

Patricia H. Mueller

 

DIRECTOR SINCE: 2015

   

AGE: 57

   

COMMITTEES: Compensation and Nominating and

                       Corporate Governance

   

DIRECTOR STATUS: INDEPENDENT

   

CURRENT POSITION:

   

-  Co-founder of Mueller Retail Consulting, LLC, a company assisting retailers with branding, marketing and interconnected retail strategies, since June 2016.

Leadership, Strategic, Retail, Marketing, Consumer Insights, E-Commerce

   

PRIOR BUSINESS EXPERIENCE:

   

-  The Home Depot, Inc., the world’s largest home improvement retailer:

   Senior Vice President and Chief Marketing Officer (February 2011-May 2016)

   Vice President, Advertising (2009-2011)

Leadership, Strategic, Branding, Retail, Marketing, Consumer Insights, E-Commerce, Global

-  The Sports Authority, Inc., an operator of sporting goods retail stores:

   Senior Vice President of Marketing and Advertising (2006-2009)

Leadership, Strategic, Retail, Marketing, Consumer Insights

-  American Signature, Inc., a manufacturer and retailer of furniture and home furnishings:

   Vice President of Advertising (2004-2006)

Leadership, Retail, Marketing, Consumer Insights

-  Value Vision, Inc./ShopNBC, an integrated direct marketing company selling products to consumers:

   Various executive positions, including Senior Vice President of TV Sales & Promotions, Senior Vice President Strategic Development, and Senior Vice President Marketing & Programming (1999-2004)

Leadership, Strategic, Marketing, Consumer Insights, E-Commerce

   

PUBLIC COMPANY BOARDS:

       

-  Current:             Dave & Buster’s Entertainment, Inc.

    Ross Stores, Inc.    

OTHER POSITIONS/MEMBERSHIPS:

       

-  2016-2020 National Association of Corporate Directors Fellow

       

EDUCATION:

       

-  B.S. Business, Management, Marketing and Related Support Services, State University of New York at Plattsburgh – Magna Cum Laude

   

ACCOLADES:

       

-  2010 National Diversity Council Most Influential Woman of the Year

-  2011 “Ad Age” Women to Watch

-  2014-15 Top 50 Women in Brand Marketing

-  2014 Marketing Hall of Femme Honoree, Digital Marketing News

-  2015 CMO Club Marketing Innovation Award

 

       

 

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Kevin M. Sheehan

DIRECTOR SINCE: 2011

 

AGE: 66

COMMITTEES:  Audit, Finance, and Nominating and

          Corporate Governance

 

DIRECTOR STATUS: INDEPENDENT

RECENT POSITION:

 

-  Senior Advisor of Scientific Games Corporation, a global leader in the gaming and lottery industries, from June 2018 to September 2018 and Director until October 2018 (previously served as President and Chief Executive Officer from August 2016 to June 2018).

Leadership, Strategic, Board Governance, Gaming, Finance

PRIOR BUSINESS EXPERIENCE:

 

-  Robert B. Willumstad School of Business, Adelphi University, a New York City metropolitan area business school

   John J. Phelan, Jr. Distinguished Visiting Professor of Business (February 2015-June 2016)

   Distinguished Visiting Professor-Accounting, Finance and Economics (2005-2008)

Strategic, Finance, Accounting

-  NCL Corporation, Ltd, a leading global cruise line operator:

   Chief Executive Officer (November 2008-January 2015)

   President (August 2010-January 2015; August 2008-March 2009)

   Chief Financial Officer (2007-2010)

Leadership, Strategic, Food & Beverage, Hospitality, Finance, Global, Consumer Insights, Marketing

-  Cerberus Capital Management LP (2006-2007) &

Clayton Dubilier & Rice (2005-2006):

   Consultant

Finance, Private Equity, Strategic

-  Cendant Corporation, a global business and consumer services provider:

   Various executive roles, including, Chairman and Chief Executive Officer of the Vehicle Services Division (including global responsibility for Avis Rent A Car, Budget Rent A Car, Budget Truck PHH Fleet Management and Wright Express) (1996-2005)

Leadership, Strategic, Finance, Global, Consumer Insights, Marketing

 

PUBLIC COMPANY BOARDS:

       

-  Current: Dave & Buster’s Entertainment, Inc.

 

 

Hertz Global Holdings

 

 

Gannett Co., Inc.

 

 

 

Navistar International Corporation

 

-  Past 5 years: Bob Evans Farms, Inc. (2013-2017); Scientific Games Corporation (2016-2018)

 
OTHER POSITIONS/MEMBERSHIPS:
 

-  Certified Public Accountant

 
EDUCATION:
   

-  B.A. Hunter College

 

-  M.B.A. New York University Graduate School of Business

 
ACCOLADES:
 

-  Named “Miami Ultimate CEO” by South Florida Business Journal (2011)

-  Ernst & Young Entrepreneur of the Year (2014 – Florida Region)

 

 

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Jennifer Storms

 

DIRECTOR SINCE: 2016

   

AGE: 48

   

COMMITTEES: Compensation, Finance and Nominating and

                       Corporate Governance

   

DIRECTOR STATUS: INDEPENDENT

   

CURRENT POSITION:

   

-  Chief Marketing Officer and Executive Vice President, Content Strategy for NBC Sports Group, a division of NBCUniversal, a leading global media and entertainment company developing, producing, and marketing of entertainment, news and information, since March 2019 (previously served as Chief Marketing Officer from October 2015-February 2019).

Leadership, Strategic, Marketing, Consumer Insights, Global

   

PRIOR BUSINESS EXPERIENCE:

   
   

-  PepsiCo, Inc.:

   Senior Vice President of Global Sports Marketing (2011-September 2015)

Leadership, Strategic, Marketing, Consumer Insights, Global, Food & Beverage

-  The Gatorade Company, Inc. (a subsidiary of PepsiCo, Inc.), a manufacturer of sports-themed beverages and food products:

   Senior Vice President of Sports Marketing (2009-2011)

Leadership, Strategic, Marketing, Consumer Insights, Food & Beverage

-  Turner Broadcasting System/Turner Sports, a division of the American media conglomerate providing sports programing on television and digital media:

   Multiple marketing and leadership positions, including, Senior Vice President, Sports Programming and Marketing (1995-2009)

Leadership, Strategic, Marketing, Consumer Insights

   
   

PUBLIC COMPANY BOARDS:

       

-  Current:             Dave & Buster’s Entertainment, Inc.

       
   

OTHER POSITIONS/MEMBERSHIPS:

       

-  Member, KPMG Women’s Leadership Summit Advisory Council

       
   

EDUCATION:

       

-  B.A. Northwestern University

       
   

ACCOLADES:

       

-  Named Cynopsis Sports Media’s Marketing Executive (2018)

-  Named to iSportsConnect’s Influential Women in the business of Sport list (2018)

-  Member, Forty Under 40 Hall of Fame, SportsBusiness Daily/Global/Journal (2009)

 

       

 

The Board of Directors recommends a vote FOR the election of each of the nominated directors.

 

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PROPOSAL NO. 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors has selected KPMG LLP (“KPMG”) to be the Company’s independent registered public accounting firm for the fiscal year ending January 31, 2021 and recommends that the shareholders vote for ratification for such appointment. KPMG has been engaged as our independent registered public accounting firm since 2010. As a matter of good corporate governance, the Audit Committee has requested the Board of Directors to submit the selection of KPMG as the Company’s independent registered public accounting firm for fiscal 2020 to shareholders for ratification. In the event of a negative vote on such ratification, the Audit Committee will reconsider its selection. We expect representatives of KPMG to be present at the Annual Meeting. They will have the opportunity to make a statement at the Annual Meeting if they desire to do so and will be available to respond to appropriate questions.

Audit and Related Fees

 

The following table sets forth the fees (dollars shown are in thousands) for professional audit services and fees for other services provided to the Company by KPMG, for fiscal 2019 which ended on February 2, 2020 and fiscal 2018 which ended on February 3, 2019:

 

      Fiscal 2019     Fiscal 2018  

Audit Fee

   $ 1,005 (1)    $ 1,030 (1) 

Audit-Related Fees

            

Tax Fees

            

Total

   $ 1,005     $ 1,030  

 

(1)

Includes fees for services for the audit of the Company’s annual financial statements, the reviews of the interim financial statements, audit of the Company’s internal control over financial reporting, implementation of accounting pronouncements, assistance with Securities and Exchange Commission filings, and statutory audits of Company subsidiaries.

The Audit Committee has established a policy whereby the outside auditors are required to annually provide service-specific fee estimates and seek pre-approval of all audit, audit-related, tax and other services prior to the performance of any such services. Individual engagements anticipated to exceed the pre-approved thresholds must be separately approved by the Audit Committee. For both fiscal 2019 and 2018, the Audit Committee pre-approved 100% of all services provided by KPMG and concluded that the provision of such services by KPMG was compatible with such firm’s independence.

 

The Board of Directors recommends a vote FOR the ratification of the appointment of KPMG LLP.

 

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PROPOSAL NO. 3

ADVISORY VOTE ON EXECUTIVE COMPENSATION

As required by Securities and Exchange Commission (“SEC”) rules, we are asking you to provide an advisory, non-binding vote to approve the compensation awarded to our named executive officers, as we have described in the “Executive Compensation” section of this Proxy Statement.

As described in detail in the Compensation Discussion and Analysis section, the Compensation Committee oversees the compensation program and compensation awarded, adopting changes to the program and awarding compensation as appropriate to reflect the Company’s circumstances and to promote the main objectives of the program. These objectives include: to align pay to performance; to provide market-competitive pay; and to create sustained shareholder value.

We are asking you to indicate your support for our named executive officer compensation. We believe that the information we have provided in this Proxy Statement demonstrates that our compensation program is designed appropriately and works to ensure that the interests of our executive officers, including our named executive officers, are aligned with your interest in long-term value creation.

Accordingly, we ask you to approve the following resolution at the Annual Meeting:

RESOLVED, that the shareholders of Dave & Buster’s Entertainment, Inc. approve the compensation awarded to the Company’s named executive officers, as disclosed in this Proxy Statement pursuant to SEC rules, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion.

This resolution is non-binding on the Board of Directors. Although non-binding, the Board of Directors and Compensation Committee will review the voting results and consider your concerns in their continued evaluation of the Company’s compensation program. Because this vote is advisory in nature, it will not affect any compensation already paid or awarded to any named executive officer, it will not be binding or overrule any decision by the Board of Directors, and it will not restrict or limit the ability of the shareholders to make proposals for inclusion in proxy materials related to executive compensation.

 

The Board of Directors recommends an advisory vote FOR the approval of our executive compensation.

 

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PROPOSAL NO. 4

APPROVAL OF COMPANY’S AMENDED AND RESTATED 2014 OMNIBUS INCENTIVE PLAN

In September 2014, your Board of Directors adopted the Dave & Buster’s Entertainment, Inc. 2014 Omnibus Incentive Plan (the “Plan”), covering the issuance of up to 3,100,000 shares of Common Stock of the Company. The adoption of the Plan was approved by shareholders in October 2014. The purpose of the Plan is to strengthen our ability to attract, retain and motivate officers, employees, non-employee directors and consultants providing services to the Company and to promote the success of the Company’s business by providing participants with appropriate incentives.

On April 24, 2020, the Board of Directors approved an amendment and restatement of the Plan (the “Amendment”), subject to the ratification by shareholders at the annual meeting, to among other matters, (a) increase the number of shares of Common Stock available for awards under the Plan by an additional 3,000,000 shares, and (b) adopt a limit on the annual awards to individual non-employee directors of $500,000. The complete text of the Plan, as amended and restated, is set forth on Appendix A hereto. We have provided below highlights of this proposal and a summary description of the Plan, but please note the highlights and summary are subject in all respects to the terms of the Plan, as amended and restated.

Highlights of the Shareholder Proposal

 

1

What is the Omnibus

Incentive Plan?

 

   The Plan is the primary vehicle used to promote the three-core values that make up Dave and Buster’s executive compensation philosophy: pay for performance, market competitive pay, and sustained shareholder value creation.

 

   Annual and long-term incentive compensation plans, including the Executive Incentive Plan, are created and administered under the Plan.

 

   

2

Who participates

in the Plan?

 

   The Plan is not limited to executives. It is a broad-based plan with over 15,908 team members as of February 2, 2020, including our executive officers, eligible for cash and/or equity-based incentives.

 

   These incentives are critical to how we attract, reward, and motivate the critical talent, at all levels of the organization, needed to achieve and exceed the Company’s key strategic objectives.

 

   The equity-based incentives made under this plan align our employees’ interests with those of our shareholders and fosters an employee ownership culture.

 

   The plan also promotes retention of key talent as most of the long-term incentives are subject to multi-year vesting and/or performance-conditions, which is particularly important in a period of business transformation and macroeconomic instability.

 

   Awards are also made to non-employee directors from this plan.

 

   

3

 How many shares remain 

in the reserve?

 

   At the time of initial issuance, 3,100,000 shares were approved by shareholders in October 2014.

 

   As of February 2, 2020, there are 1,319,813 shares that remain available for future grant in the plan.

 

   

 

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4

How many shares are

being requested now?

 

   We are seeking shareholder approval for an additional 3.0 million shares.

 

   We estimate this will allow us to continue to make responsible and market competitive equity-based awards over the next two years and assumes the achievement of maximum financial and market performance under Dave and Buster’s long-term performance-based incentives.

 

   The estimated reserve life of two years is materially lower than the three to five-year reserve commonly requested by other publicly traded companies.

 

    

    

    

       

5

How does the historical share usage compare

to market?

 

   Dave and Buster’s has a history of responsible share usage. We thoughtfully manage share dilution and closely monitor our annual run rate and overhang to ensure we only grant an appropriate number of equity-based incentives we believe are necessary to attract, reward, motivate and retain employees, officers, and non-employee directors.

 

   Run Rate. Our emphasis on responsible share usage is evidenced by our historical run rate, which has been conservative relative to our peer group. Our three-year average is approximately half of the peer group median. Run rate is defined as the total number of shares granted expressed as a percent of the weighted average common shares outstanding for each fiscal year. Peer group data based on available public SEC filings as of March 1, 2020:

 

    

    

   
    

          

  Run Rate    2017      2018      2019      3-Year
Average
       
      Dave and Busters      0.6%        0.8%        0.9%        0.8%      
      Peer Group Median      1.4%        1.9%        1.4%        1.6%      
   

                                         

 

   Overhang. Overhang is a common measure of equity dilution. We define overhang as the sum of the number of outstanding shares and the number of shares available for future grant divided by the sum of the number of outstanding shares, the number of shares available for future grant, and the number of common shares outstanding. Dave and Buster’s overhang at the end of fiscal 2019 (9.3%) was more than one full percentage point below the peer group median.

    

   
   
    

          

 

Overhang

                           2019        
     

Dave and Busters

              9.3%      
     

Peer Group Median

                                10.7%      
                                                     

6

What other material changes are being proposed?

 

   Aside from the authorization of an additional 3.0 million shares, there are few material changes being proposed to the plan. Of note:

 

¡    increase the annual limit of the total number of shares of restricted stock that may be granted to an individual up to two times with respect to awards granted to a participant in their first year of employment with the Company

 

¡    adopt a per person limit on the annual awards to non-employee directors of $500,000

 

   The material terms and certain additional features are summarized are more detail in the section below entitled “Summary of Plan” and the summary is qualified in its entirety by reference to the full text of the amended plan set forth in Appendix A beginning on page A-1.

 

    

    

    

    

       

 

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7

What key features

are being retained

in the plan?

 

   The plan will continue to retain key governance features and market best practices that serve to protect shareholder interests, such as:

 

¡    No Stock Option Repricing. The plan prohibits stock option repricing, and the cash buyout of underwater stock options, in the absence of shareholder approval.

 

¡    No Excise Tax Gross-Up. The plan does not provide for any tax gross-ups.

 

¡    No Single-Trigger Equity Vesting. The plan does not provide for an automatic vesting of equity awards upon a change in control.

 

¡    No Evergreen Provision. There is no automatic increase in the shares available for grant in this plan.

 

¡    Clawback. Cash and equity-based awards made under this plan are subject to the Company’s clawback policy.

 

¡    Individual Award Limits. The plan contains certain provisions establishing award maximums as described in this proposal.

 

   Dividend Treatment. The plan prohibits payment of any dividends or dividend equivalents before the underlying awards vest.

 

   

8

What happens if

shareholders do not

approve the plan?

 

   If shareholders do not approve this proposal, we will continue to make cash and equity-based incentive awards from this plan as it is critical to our compensation philosophy and to support in the achievement of our strategic business objectives.

 

   In the event there are insufficient shares available to be issued under the plan to settle awards granted thereunder, we will be required to grant some awards, or portions thereof, to be settled in cash. This could have an adverse impact on the Company’s cash flow from operations, financial position and results of operations.

 

   In addition, under applicable accounting rules, if the Company determines at any time that there would be insufficient shares remaining under the plan to settle one or more awards granted thereunder with the issuance of shares, we will be required to classify and account for the equity-based awards, or portions thereof, to be settled in cash under one or both such plans as liabilities. This “liability accounting” could adversely impact the Company’s financial position or results of operations.

 

   

Summary of the Plan

Stock Options

The Plan is designed to permit the granting of options to all of our team members (of which there were approximately 15,908 team members as of February 2, 2020, 269 of whom served our corporate headquarters, 1,255 of who served as management personnel and the remainder of whom were hourly personnel), although we have historically granted options only to certain of our salaried team members. The administration of the Plan is provided by the Compensation Committee of the Board of Directors which has the authority to determine the terms on which options are granted under the Plan. The Compensation Committee determines the number of options to be granted to eligible participants, determines the exercise price, vesting period, and option period at the time the option is granted, and administers and interprets the Plan. The Plan provides that no option and no SAR (hereinafter defined) shall be granted with a time period for exercise greater than 10 years from the date of grant. Our recent option grants have been for time periods equal to 10 years.

The exercise price of options is payable in cash or the holder of an option may request approval from the Compensation Committee to exercise an option or a portion thereof by tendering shares of Common Stock at the fair market value per share on the date of exercise in lieu of cash payment of the exercise price.

 

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Both incentive stock options (“ISOs”) and non-qualified stock options may be granted under the Plan. The Plan requires that the exercise price of an option will not be less than 100% of the fair market value of the Common Stock on the date of the grant of the option, unless it is granted to a party with ownership possessing more than 10% of total combined voting power of the Common Stock of the Company. No ISO may be granted under the Plan to anyone who is not an employee of the Company or a “parent corporation” or a “subsidiary corporation” of the Company (as defined in Section 424 of the Internal Revenue Code). There is no limit on the fair market value of ISOs that may be granted to a team member in any calendar year, but no team member may be granted ISOs that first become exercisable during a calendar year for the purchase of stock with an aggregate fair market value (determined as of the date of grant of each option) in excess of $100,000 and no team member may be granted more than 500,000 options and SARs in a fiscal year. An option (or an installment thereof) counts against the annual limitation only in the year it first becomes exercisable.

Tax Status of Stock Options

Pursuant to the Plan, the Compensation Committee determines whether an option will be either an “ISO” or a “non-qualified option.” In general, no taxable income will be recognized by the optionee, and no deduction will be allowed to us, upon the grant of an option.

Incentive Stock Options. All stock options that qualify under the rules of Section 422 of the Internal Revenue Code will be entitled to ISO treatment. To receive ISO treatment, an optionee is not permitted to dispose of the acquired stock (i) within two years after the option is granted, or (ii) within one year after exercise. In addition, the individual must have been a team member of the Company for the entire time from the date of granting of the option until three months (one year if the team member is disabled) before the date of the exercise. The requirement that the individual be a team member and the two-year and one-year holding periods are waived in the case of death of the team member. If all such requirements are met, no tax will be imposed upon exercise of the option, and any gain upon sale of the stock will be entitled to capital gain treatment. The team member’s gain on exercise (the excess of fair market value at the time of exercise over the exercise price) of an ISO is a tax preference item and, accordingly, is included in the computation of alternative minimum taxable income.

If a team member does not meet the two-year and one-year holding requirements, but does meet all other requirements, tax will be imposed at the time of sale of the stock, but the team member’s gain on exercise will be treated as ordinary income rather than a capital gain and we will receive a corresponding deduction at the time of sale. Any remaining gain on sale will be short-term or a long-term capital gain, depending on the holding period of the stock.

An optionee’s stock option agreement may permit payment for stock upon the exercise of an ISO to be made with other shares of Common Stock. In such a case, in general, if a team member uses stock acquired pursuant to the exercise of an ISO to acquire other stock in connection with the exercise of an ISO, it may result in ordinary income if the stock so used has not met the minimum statutory holding period necessary for favorable tax treatment as an ISO.

Non-Qualified Stock Options. Upon exercise of a non-qualified option, an optionee will recognize ordinary income (and we will be entitled to a corresponding tax deduction if applicable withholding requirements are satisfied) in an amount equal to the amount by which the fair market value of the shares on the exercise date exceeds the exercise price. Any additional gain or loss after exercise realized by an optionee on subsequent disposition of such shares generally is a capital gain or loss and does not result in a tax deduction to us.

Internal Revenue Code Section 162(m). Certain Awards previously made to executive officers under the Plan were and are intended to be fully deductible under the “performance-based” compensation exception previously provided by Section 162(m) of the Code. As a result of the Tax Cuts and Jobs Act of 2017, for tax years beginning after December 31, 2017, Section 162(m) of the Code limits to $1 million the federal income tax deduction the Company can receive for annual individual compensation paid to certain current and former executive officers, subject to a transition rule for written binding contracts in effect on November 2, 2017, and not materially modified after that date. Prior to such statute, Section 162(m)’s deduction limit included an exception for “performance-based” compensation that permitted qualifying compensation to be deductible even if it exceeded the $1 million limit. At the original approval of the Plan, the shareholders approved limitations and provisions required to be included under Section 162(m). Now that the performance-based compensation exception is no longer available, the Company is no

 

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longer required to make specific Section 162(m)-related limitations or provisions in Awards or to request shareholder approval for this purpose, as there is no tax benefit from doing so.

Stock Appreciation Rights and Stock Awards

The Plan also permits, among other things, (i) the issuance of stock appreciation rights (“SARs”) and (ii) restricted stock, restricted stock units and other stock-based awards (collectively, “Stock Awards”) (SARs and Stock Awards are collectively referred to as “Awards”). All of our employees, directors and independent consultants are eligible to receive Awards under the Plan, although it is anticipated that only certain salaried team members will receive Awards. When an Award is made, the Compensation Committee will determine all of the terms and conditions applicable to the Award as it deems appropriate.

Tax Status of SARs and Stock Awards

Under the Internal Revenue Code, except as described below, if Awards are made in the form of restricted stock, restricted stock units, or performance shares, no income will be realized by the team member upon such award unless the award fully vests upon the date of award or the award is restricted stock with no risk of substantial forfeiture. When restricted stock, restricted stock units or performance shares vest, the team member will recognize ordinary compensation income equal to the then fair market value of the shares or units. With regard to Awards of restricted stock, a team member may elect to make a “Section 83(b) election” under the Internal Revenue Code, in which case the team member will recognize income on the fair market value of the restricted stock at the time the shares are granted. A Section 83(b) election must be made within 30 days after the restricted stock is granted. We generally will be entitled to a federal income tax deduction at the time the team member recognizes income on the restricted stock, restricted stock units or performance shares.

If Awards are made in the form of SARs, no income will be realized by the team member upon the award of SARs. When the SARs vest, the team member will recognize ordinary compensation income equal to the cash value of the SARs. We generally will be entitled to a federal income tax deduction at the time the team member recognizes income on the SARs.

The Plan and any Awards granted under it are intended to be exempt from the requirements of Section 409(A) of the Internal Revenue Code or will be structured to not cause a team member to be subject to taxes and interest under Section 409(A).

Acceleration of Exercisability and Vesting

Subject to the terms of any individual grant agreement, all options and Awards under the Plan will become immediately exercisable and vested in full if there is a sale or other transfer of all or substantially all of the assets of the Company on a consolidated basis, the acquisition of beneficial ownership by a party, directly or indirectly, of the securities representing 50% or more of the voting rights for directors of the Company, and during any three year period following a “solicitation in opposition,” there is a failure of a majority of persons nominated by management over said three year period to win election to seats on the Board of Directors (based upon the number of seats available at the beginning of such three year period). Full or partial acceleration of vesting will occur in the event of death, disability or involuntary termination. The Compensation Committee may accelerate vesting, in whole or in part, under such circumstances as the Compensation Committee deems appropriate, but subject to the requirements of Section 162(m) of the Internal Revenue Code.

Cessation of Employment

Pursuant to grants previously made under the Plan, all stock options will terminate on the day on which the executive officer is no longer employed by us due to the termination of such employment for cause. Due to a termination of employment caused by reason of death or disability of the executive officer, any unvested portion of stock options shall immediately become vested and all vested options shall remain exercisable until the earlier of (a) one year following the date of death or disability and (b) the expiration of the option term. Upon the termination of employment by reason of retirement (defined as termination of employment other than for cause, after obtaining (i) age 60 and completing ten years of continued service with the Company or (ii) age 65), the unvested portion of the stock option shall continue to vest on each remaining vesting date and the vested portion of the stock option shall

 

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remain exercisable until the expiration of the option term. Upon the termination of employment for any reason other than those described above, any unvested portion of the option shall immediately terminate and be forfeited without consideration and the vested stock options shall remain exercisable until the earlier of (x) 90 days following such termination of employment and (y) the expiration of the option term. Future award agreements will specify the effect of a holder’s termination of employment, including the extent to which equity grants will be forfeited and the extent to which awards requiring exercise will remain exercisable. Such provisions will be determined in the sole discretion of the Compensation Committee.

If there is a change of control of the Company, then, unless prohibited by law, the Compensation Committee is authorized (but not obligated) to make adjustments to the terms and conditions of outstanding awards, including, without limitation, continuation or assumption of outstanding awards; substitution of new awards with substantially the same terms as outstanding awards; accelerated exercisability, vesting and/or lapse of restrictions for outstanding awards immediately prior to the occurrence of such event; upon written notice, provision that any outstanding awards must be exercised, to the extent then exercisable, during a specified period determined by the Compensation Committee (contingent upon the consummation of the change of control), following which unexercised awards shall terminate; and cancellation of all or any portion of outstanding awards for fair market value (which may be the intrinsic value of an option or SAR and may be zero); and cancellation of all or any portion of outstanding awards for fair value (as determined in the sole discretion of the Compensation Committee and which may be zero).

Under the Plan, a change of control generally is triggered by the occurrence of any of the following: (i) an acquisition of 30% or more of the outstanding shares or the voting power of the outstanding securities generally entitled to vote in the election of directors; (ii) with certain exceptions, individuals on the Board of Directors on the date of effectiveness of the plan cease to constitute a majority of the Board of Directors; (iii) consummation of a reorganization, merger, amalgamation, statutory share exchange, consolidation or like event to which the Company is a party or a sale or disposition of all or substantially all of the Company’s assets, unless the Company’s stockholders continue to own more than 50% of the outstanding voting securities, no person beneficially owns 30% or more of the outstanding securities of the Company and at least a majority of the members of the Board of Directors after such event were members of the Board of Directors prior to the event; or (iv) a complete liquidation or dissolution of the Company.

Amendments

The Compensation Committee may amend, alter, suspend, discontinue, or terminate (an “Action”) the Plan or any portion thereof or any Award (or award agreement) thereunder at any time; provided, that no such Action shall be made without shareholder approval (i) if such approval is necessary to comply with any tax or regulatory requirement applicable to the Plan, (ii) if such Action increases the number of shares available under the Plan, (iii) if such Action results in a material increase in benefits permitted under the Plan (but excluding increases that are immaterial or that are minor and to benefit the administration of the Plan, to take account of any changes in applicable law, or to obtain or maintain favorable tax, exchange, or regulatory treatment for the Company) or a change in eligibility requirements under the Plan, or (iv) for any Action that results in a reduction of the exercise price or grant price of an Award in exchange for cash, or for other Awards, with a lower exercise price or grant price. Further, the written consent of the affected participant is required if such Action would materially diminish the rights of the participant under a previously granted award. However, the Compensation Committee may amend the Plan, any Award or any award agreement without consent in such manner as it deems necessary to comply with applicable laws, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

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Current Information Regarding Plan

 

Current Plan Information as of February 2, 2020(1)

 

Stock Option and Employee Incentive Plan

    The Plan and All Previous Plans  

Outstanding Stock Options

    Outstanding Stock Awards     Combined Outstanding
Stock Options
 
    Range of
Option Prices
          Range of
Remaining
Contractual
Life
                Vesting Range                          
     Low     High     Weighted
Average
Price
    From
(yrs)
    To
(yrs)
    Weighted
Avg
Contractual
Life
    Number
of
Shares
    From     To     Number
of
Options
    Weighted
Average
Price
    Weighted
Avg
Contractual
Life
    Combined
Outstanding
Stock
Awards
 

1,323,495

  $ 16.00     $ 59.67     $ 36.97       4.68       9.25       6.57       216,815       1       5       1,590,395     $ 31.89       5.86       216,815  

 

(1)

The closing market price for a share of Company common stock was $44.16 on January 31, 2020 (the last trading day of the fiscal year ending on February 2, 2020).

The numbers in the table above reflect the Plan information as of February 2, 2020 under (i) the Plan, and (ii) all of our previous plans for eligible team members.

Information about options and Stock Awards granted during the Company’s 2019 fiscal year under the Plan to the Named Executive Officers can be found in the tables under the headings “Fiscal 2019 Summary Compensation Table,” and “Fiscal 2019 Grants of Plan-Based Awards Table” following the Compensation Discussion and Analysis in this Proxy Statement. During the 2019 fiscal year, options covering 146,257 shares were granted to current executive officers as a group under the Plan and options covering 76,009 shares were granted under the Plan to all other eligible team members (excluding executive officers) as a group. Current options generally become exercisable in three equal annual installments beginning one year after the date of the option grant. Also during the 2019 fiscal year, 35,030 shares of restricted stock units were granted to current executive officers as a group under the Plan and 22,228 shares of restricted stock units were granted under the Plan to all team members (excluding executive officers) as a group. Depending upon the terms of the plan under which a grant is made, restricted stock units for team members generally vest three years after the date of the grant. During the 2019 fiscal year, Directors were granted a total of 19,344 shares of restricted stock units which vests one year after the date of grant.

Plan Amendment

As of February 2, 2020, stock options and Stock Awards covering 1,540,310 shares were outstanding and 1,319,813 shares were available for grant under the Plan (of which 1,319,813 shares were available for grant as Stock Awards under the Plan). If you approve the Amendment, the estimated maximum number of shares that may be issued under the Plan would be (in addition to shares subject to grants and awards as of February 2, 2020) increased to 4,319,813 shares (of which 4,319,813 shares will be available for grant as Stock Awards). This number represents shares available for, but not yet subject to, a grant or award as of the date of this Proxy Statement, assuming (i) no grants or awards were made under the Plan between February 2, 2020 and such date, and (ii) no grants or awards previously made under the Plan are cancelled between February 2, 2020 and such date, plus the additional 3,000,000 shares authorized by the Amendment.

Either authorized but unissued shares or treasury shares of Common Stock may be issued in connection with grants and awards under the Plan. In addition, any shares subject to an award which are forfeited or not issued because the terms and conditions of the grant or award are not met may be re-used for a new grant or award.

Required Vote; Recommendation

The favorable vote of the holders of a majority of the shares of Common Stock present and entitled to participate and vote online during the Annual Meeting or by proxy is required to approve the Amended and Restated 2014 Omnibus Incentive Plan.

The Board of Directors believes that approval of the Amendment is in the best interest of the Company and that the additional shares will strengthen the Company’s ability to attract and retain key team members and furnish additional incentives to such persons by encouraging them to become owners of the Common Stock of the Company.

 

The Board of Directors recommends a vote FOR the approval of the Company’s Amended
and Restated 2014 Omnibus Incentive Plan.

 

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DIRECTORS AND CORPORATE GOVERNANCE

Composition and Board Independence

 

Our Board of Directors currently consists of ten members. Our Board of Directors has affirmatively determined that all of our directors other than our Chairman of the Board and our Chief Executive Officer are independent directors under our standards as well as the applicable rules of NASDAQ. In addition, our Board of Directors affirmatively determined that each member of the Audit Committee, Messrs. Crawford, Dodds, Halkyard and Sheehan, satisfies the independence requirements for members of an audit committee as set forth in Rule 10A-3(b)(1) of the Exchange Act, and that each member of the Compensation Committee, Mr. Crawford, Mr. Griffith, Mr. Hockin, Ms. Mueller and Ms. Storms, satisfies the independence requirements for members of a compensation committee under the applicable rules of NASDAQ. Due to limited time commitments, Mr. Crawford has determined he will complete his current term as a director and not stand for re-election; he has no disagreement with the Company.

Corporate Governance

 

The Board of Directors met eight times in fiscal 2019, including regular and special meetings. During this period, no individual director attended fewer than 75% of the aggregate of (1) the total number of meetings of the Board of Directors and (2) the total number of meetings held by all committees on which he or she served.

The Company invites members of the Board of Directors to attend its annual shareholder meeting and requires that they make every effort to attend the Annual Meeting absent an unavoidable and irreconcilable conflict. At the June 13, 2019 Annual Meeting of Shareholders, all of the directors attended.

The Board of Directors has an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and a Finance Committee. The charters for each of these committees are posted on our website at http://ir.daveandbusters.com/corporate-governance.

The Audit Committee, comprised of Messrs. Crawford, Dodds, Halkyard and Sheehan, and chaired by Mr. Sheehan, recommends to the Board of Directors the appointment of the Company’s independent auditors, reviews and approves the scope of the annual audits of the Company’s financial statements, provides oversight of our internal control over financial reporting, reviews and approves any non-audit services performed by the independent auditors, reviews the findings and recommendations of the independent auditors and periodically reviews major accounting policies. The Audit Committee held eight meetings during fiscal 2019. The Board of Directors has determined that each of the members of the Audit Committee is qualified as a “financial expert” under the provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the SEC.

The Compensation Committee comprised of Mr. Crawford, Mr. Griffith, Mr. Hockin, Ms. Mueller and Ms. Storms, and chaired by Mr. Griffith, reviews the Company’s compensation philosophy and strategy, administers incentive compensation and stock option plans, reviews the Chief Executive Officer’s performance and compensation, reviews recommendations on compensation of other executive officers and board members, and reviews other special compensation matters, such as executive employment agreements. The Compensation Committee held six meetings during fiscal 2019. The Compensation Committee has previously engaged AON Consulting as its independent compensation consultant. During fiscal 2019, the Compensation Committee reviewed AON Consulting and other independent compensation consultants and, in September 2019, selected FW Cook to succeed AON Consulting as the Compensation Committee’s independent compensation consultant.

The Nominating and Corporate Governance Committee, comprised of Mr. Halkyard, Ms. Mueller, Mr. Sheehan and Ms. Storms, and chaired by Ms. Mueller, identifies and recommends the individuals qualified to be nominated for election to the Board of Directors, recommends the member of the Board of Directors qualified to be nominated for election as its Chairperson, recommends the members and chairperson for each committee of the Board of Directors, reviews and recommends to the Board matters regarding CEO succession plans, periodically reviews and assesses our Corporate Governance Guidelines and Principles and Code of Business Conduct and Ethics and oversees the annual self-evaluation of the performance of the Board of Directors. The Nominating and Corporate Governance Committee held four meetings during fiscal 2019.

 

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The Finance Committee, comprised of Messrs. Dodds, Halkyard, Hockin, and Sheehan and Ms. Storms, and chaired by Mr. Halkyard, assists the Board of Directors in fulfilling its financial management oversight responsibilities by (i) assessing, overseeing and evaluating from time to time, policies and transactions affecting our financial objectives, (ii) reviewing our indebtedness, strategic planning, capital structure objectives, investment programs and policies, (iii) periodically auditing major capital expenditures, including real estate acquisitions and new store development, and (iv) working with our management and the Compensation Committee on annual operating goals. The Finance Committee met eleven times during fiscal 2019.

The Board’s Role in Risk Oversight

 

The entire Board of Directors is engaged in risk management oversight. At the present time, the Board of Directors has not established a separate committee to facilitate its risk oversight responsibilities. The Board of Directors will continue to monitor and assess whether such a committee would be appropriate. The Audit Committee assists the Board of Directors in its oversight of risk management and our process established to identify, measure, monitor, and manage risks, in particular major financial risks. The Board of Directors receives regular reports from management, as well as from the Audit Committee, regarding relevant risks and the actions taken by management to adequately address those risks.

Succession Planning

 

Our Corporate Governance Guidelines and Principles require the Board to plan for CEO succession and oversee management development. During fiscal 2019 the Board reviewed management development and succession plans with respect to senior management positions with the CEO. The Board also reviewed succession plans with respect to the CEO.

Board of Directors Leadership Structure

 

Our Board of Directors does not have a policy requiring the roles of the Chairman of the Board and Chief Executive Officer to be filled by separate persons or a policy requiring the Chairman of the Board to be a non-employee director. The Board believes that it is in the best interest of the Company and its shareholders for the Board to make a determination on whether to separate or combine the roles of Chairman and CEO based upon the Company’s circumstances at any particular point in time, whether the Chairman role shall be held by an independent director, and if not, supported by a Lead Independent Director. Mr. King serves as Chairman of the Board. Since Mr. King is not an independent director, Mr. Griffith serves as Lead Independent Director. As set forth in our Corporate Governance Guidelines and Principles, the Lead Independent Director’s responsibilities include, but are not limited to:

 

   

convening, chairing and determining agendas for executive sessions of the non-management directors and coordinating feedback to the Chairman of the Board regarding issues discussed in executive sessions;

 

   

determining in consultation with the Chairman of the Board the schedule for board meetings, agenda items and the Board’s information needs associated with those agenda items and identifying the need for and scope of related presentations;

 

   

assisting the Board and its committees in the evaluation of senior management (including the CEO) and communicating the results of such evaluation to the CEO;

 

   

serving as an information resource for other directors and acting as liaison between directors, committee chairs and management;

 

   

providing advice and counsel to the CEO;

 

   

developing and implementing, with the Chairman of the Board and the Nominating and Corporate Governance Committee, the procedures governing the Board’s work;

 

   

where appropriate and as directed by the Board, communicating with the shareholders, rating agencies, regulators and interested parties; and

 

   

speaking for the Board in circumstances where it is appropriate for the Board to have a voice distinct from that of management.

 

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The Board continues to believe that due to Mr. King’s extensive knowledge of all aspects of the Company’s business, Mr. King is in the best position at this time to lead the Board of Directors as its Chairman, and Mr. Griffith is in the best position to serve in the capacity as Lead Independent Director. The Board believes this leadership structure serves the ability of the Board of Directors to exercise its oversight role over management by having a director who is not an officer or member of management serve in the role of Chairman supported by a strong Lead Independent Director, who ensures a continued significant role for independent directors in the leadership of the Company. This structure also allows Mr. Jenkins, as CEO, to focus his time and energy on leading and managing the Company’s business and operations. The Board believes that the strong Lead Independent Director, the use of regular executive sessions of the independent directors, the Board’s strong committee system, and all directors being independent except for Messrs. Jenkins and King, allow it to maintain effective oversight of management.

Director Compensation

 

The Compensation Committee intends to set director compensation levels at or near the market median relative to directors at companies of comparable size, industry and scope of operations in order to insure directors are competitively for their time commitment and responsibilities. A market competitive compensation package is important because it enables us to attract and retain highly qualified directors who are critical to our long-term success.

The following table sets forth all compensation earned by our non-employee directors during fiscal 2019 for service on our Board of Directors:

 

DIRECTOR COMPENSATION TABLE(1)

 

NAME(2)

  

FEES EARNED

($)(3)

    

STOCK UNIT AWARDS

($)(4)

    

        TOTAL        

($)

 

Victor L. Crawford(5)(6)

   $ 65,000      $ 124,962      $ 189,962  

Hamish A. Dodds(6)

   $ 65,000      $ 124,962      $ 189,962  

Michael J. Griffith(6)

   $ 130,000      $ 124,962      $ 254,962  

Jonathan S. Halkyard(6)

   $ 82,500      $ 124,962      $ 207,462  

Stephen M. King(6)

   $ 140,000      $ 124,962      $ 264,962  

Patricia H. Mueller(6)

   $ 72,500      $ 124,962      $ 197,462  

Kevin M. Sheehan(6)

   $ 85,000      $ 124,962      $ 209,962  

Jennifer Storms(6)

   $ 65,000      $ 124,962      $ 189,962  

 

(1)

Omitted from the table are option awards, non-equity incentive plan compensation, nonqualified deferred compensation earnings, and all other compensation as none of the non-employee directors received any compensation in these categories during fiscal 2019.

 

(2)

Mr. Jenkins is omitted from the Director Compensation Table as being an employee director. Mr. Jenkins did not receive compensation for service on our Board of Directors other than reimbursement for out-of-pocket expenses incurred in connection with the rendering of such service. Mr. Jenkins compensation is reflected in the Summary Compensation Table of this Proxy Statement. While Mr. King is an employee director, he is not a named executive officer of the Company; accordingly, Mr. King’s fees for service on our Board of Directors are included above; these fees include $25,000 Mr. King receives as an employee of the Company. Mr. Hockin is omitted from the Director Compensation Table as he joined our Board of Directors in early-May 2020.

 

(3)

Reflects the annual stipend received for service on the Board of Directors, as well as service as chair of a Board of Directors’ committee or as Lead Independent Director during fiscal 2019. Board members are also reimbursed for out-of-pocket expenses incurred in connection with their board service. Such reimbursements are not included in this table. Pursuant to the 2016 Deferred Compensation Plan for Non-Employee Directors (the “Director Deferred Compensation Plan”), each non-employee director has the option to defer payment of all or a portion of his or her annual stipend. Amounts deferred, plus interest accrued thereon, will be distributed upon death or disability of the director or over a period not to exceed five years, as elected by the director, following the date he or she leaves the Board of Directors. Pursuant to the Director Deferred Compensation Plan, for fiscal 2019, no director deferred any of their annual stipend.

 

(4)

The amounts shown in this column represent the aggregate grant date fair values of the restricted stock units awarded to Messrs. Crawford, Dodds, Griffith, Halkyard, King and Sheehan and Mss. Mueller and Storms on April 11, 2019. Each restricted stock unit vests one year after the award date. As of February 2, 2020, the aggregate number of shares of Company common

 

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stock underlying outstanding non-vested restricted stock units for each non-employee director was 2,418. Pursuant to the Director Deferred Compensation Plan, each non-employee director has the option to defer the distribution of all or a portion of restricted stock units. Units deferred will be distributed upon death or disability of the director or over a period not to exceed five years, as elected by the director, following the date he or she leaves the Board of Directors.

 

(5)

Due to limited time commitments, Mr. Crawford has determined he will complete his current term as a director and not stand for re-election; he has no disagreement with the Company.

 

(6)

The following table details the outstanding equity awards of the current members of the Board of Directors. Mr. Jenkins is omitted from this table as his outstanding equity is reflected in the Outstanding Equity Awards Table elsewhere in this Proxy Statement. Mr. Crawford and Mr. Dodds are not listed in the following table because all of their equity awards are held in restricted stock or restricted stock units and they do not hold any stock options. Mr. Hockin is not listed as he joined the Board in early-May 2020. In addition to the stock options listed in the following table, at 2019 fiscal year end, Mr. King also holds a grant of target RSU awards under the Fiscal 2018-Fiscal 2020 LTIP of 6,302 and a grant of target RSU awards under the Fiscal 2017-Fiscal 2019 LTIP of 10,997.

Directors Outstanding Equity Awards at 2019 Fiscal Year End

 

NAME

  

Number of
Securities
Underlying
Unexercised
Options

(#)
Exercisable

    

Number of
Securities
Underlying
Unexercised
Options

(#)
Unexercisable

    

Option
Exercise Price

($)

    

Option

Expiration

Date

 

Michael J. Griffith

     23,934             $ 6.27        12/5/2022  
     5,203             $ 31.71        4/9/2025  
     4,545             $ 39.10        4/7/2026  

Jonathan S. Halkyard

     23,934             $ 6.27        12/5/2022  
     5,203             $ 31.71        4/9/2025  
     4,545             $ 39.10        4/7/2026  

Stephen M. King

     28,346             $ 4.44        6/1/2020  
     184,615             $ 16.00        10/9/2024  
     68,775             $ 31.71        4/9/2025  
     72,833             $ 39.10        4/7/2026  
     29,178        14,589      $ 59.67        4/7/2027  
     8,138        16,276      $ 41.65        4/12/2028  

Patricia H. Mueller

     5,004             $ 33.15        4/20/2025  
     4,545             $ 39.10        4/7/2026  

Kevin M. Sheehan

     23,934             $ 6.27        12/5/2022  
     5,203             $ 31.71        4/9/2025  
     4,545             $ 39.10        4/7/2026  

Jennifer Storms

     4,224             $ 41.60        4/14/2026  

In addition to reimbursement for out-of-pocket expenses incurred in connection with their Board service, our non-employee Board members receive an annual stipend and equity grant for serving as members of our Board of Directors. During fiscal 2019, each non-employee director received an annual stipend of $65,000, paid in quarterly installments, and an annual equity grant of restricted stock units with a value of approximately $125,000. In addition, a non-employee director receives $50,000 for serving as our Chairman, $50,000 for serving as Lead Independent Director, $20,000 for serving as Chair of our Audit Committee, $15,000 for serving as Chair of our Finance Committee, $15,000 for serving as Chair of our Compensation Committee, and $10,000 for serving as Chair of our Nominating and Corporate Governance Committee, each of the foregoing paid in quarterly installments. Mr. King, as Chairman of the Board, received an annual stipend of $65,000 and the $50,000 fee for serving as Chairman and an annual equity grant of restricted stock units with a value of approximately $125,000. The Compensation Committee reviews the

 

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compensation to non-employee directors on a biennial basis. Each of Messrs. Griffith, Halkyard, King and Sheehan participate in the Dave & Buster’s Entertainment, Inc. 2010 Management Incentive Plan (the “2010 Stock Incentive Plan”) and the Dave & Buster’s Entertainment, Inc. 2014 Omnibus Incentive Plan (the “2014 Stock Incentive Plan”). Mr. Crawford, Mr. Dodds, Ms. Mueller and Ms. Storms participate in the 2014 Stock Incentive Plan.

During fiscal 2019, the Compensation Committee reviewed the compensation to non-employee directors. The Compensation Committee’s consultant, FW Cook, presented the results of its research on compensation levels for non-employee directors of similar sized companies noting that the compensation levels were below market and had not been adjusted for two years. The Compensation Committee approved starting with fiscal 2020 increasing the annual stipend to $70,000 and to also pay an annual stipend of $5,000 to each non-chair, independent member of each Board committee. In connection with the COVID-19 pandemic, in March 2020, the Board suspended all cash compensation payable to non-employee directors and the Chairman of the Board for the remainder of fiscal 2020.

Director Stock Ownership Guidelines

 

The Company has a stock ownership requirement for non-employee directors to align the interests of its non-employee directors with the interests of the shareholders and to further promote the Company’s commitment to sound corporate governance. Under this requirement, a non-employee director must own shares of the Company’s stock with a fair market value equal to five (5) times the director’s annual cash retainer. Each non-employee director has five (5) years from the date of initial appointment or election to the Board to meet this requirement. As of the end of fiscal 2019, three (3) non-employee directors have served on the Board for 5 years or more and are in compliance with this requirement, and the remaining non-employee directors have between 1-2 years (based upon the date on which they were initially appointed or elected to the Board) to meet this requirement. Mr. Hockin joined the Board in 2020 and has 5 years to meet this requirement.

Mr. King, as Chairman of the Board, is governed by the same stock ownership guidelines that apply to non-employee directors and currently meets the requirements. Mr. Jenkins, as an employee director, is governed by the stock ownership guidelines for executive officers. These guidelines and current compliance are detailed under “Stock Ownership Guidelines” elsewhere in the Executive Compensation section of this Proxy Statement.

Policy Regarding Shareholder Recommendations for Director Candidates

 

The Company identifies new director candidates through a variety of sources. The Nominating and Corporate Governance Committee will consider director candidates recommended by shareholders in the same manner it considers other candidates, as described below. Shareholders seeking to recommend candidates for consideration by the Nominating and Corporate Governance Committee should submit a recommendation in writing describing the candidate’s qualifications and other relevant biographical information and provide confirmation of the candidate’s consent to serve as director. Please submit this information to the Corporate Secretary, Dave & Buster’s Entertainment, Inc., 2481 Mañana Drive, Dallas, Texas 75220 or by email at corporatesecretary@daveandbusters.com.

Shareholders may also propose director nominees by adhering to the advance notice procedure described under “Shareholder Proposals” elsewhere in this Proxy Statement.

Director Qualifications

 

The Nominating and Corporate Governance Committee and the Board believe that candidates for director should have certain minimum qualifications, including, without limitation:

 

   

demonstrated business acumen and leadership, and high levels of accomplishment;

 

   

ability to exercise sound business judgment and to provide insight and practical wisdom based on experience;

 

   

commitment to understand the Company and its business, industry and strategic objectives;

 

   

integrity and adherence to high personal ethics and values, consistent with our Code of Business Conduct and Ethics;

 

   

ability to read and understand financial statements and other financial information pertaining to the Company;

 

   

commitment to enhancing shareholder value; and

 

   

willingness to act in the long-term interest of all shareholders.

 

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In the context of the Board’s existing composition, other requirements (such as prior CEO experience, restaurant, hospitality, gaming, sports-related marketing and branding, or retail industry experience, or relevant senior level experience in finance, accounting, sales and marketing, organizational development, information technology, or public relations) that are expected to contribute to the Board’s overall effectiveness and meet the needs of the Board and its committees may be considered. The Company values diversity on a Company-wide basis and seeks to achieve a diversity of occupational and personal backgrounds on the Board but has not adopted a specific policy regarding Board diversity. The Nominating and Corporate Governance Committee assesses the effectiveness of its efforts at pursuing diversity through its periodic evaluation of the Board’s composition.

Current Nominations

 

The Nominating and Corporate Governance Committee conducted an evaluation and assessment of all of the current directors for purposes of determining whether to recommend them for nomination for re-election to the Board of Directors. After reviewing the assessment results, the Nominating and Corporate Governance Committee recommended that Messrs. Dodds, Griffith, Halkyard, Hockin, Jenkins, King, and Sheehan and Mss. Mueller and Storms be nominated for election to the Board of Directors. The Board accepted the recommendations and nominated such persons. The Nominating and Corporate Governance Committee did not receive any recommendations from shareholders proposing candidates for election to the Board at the Annual Meeting.

Code of Business Conduct and Ethics and Whistle Blower Policy

 

The Code of Business Conduct and Ethics applies to our directors, officers and other employees and is available on our website at http://ir.daveandbusters.com/corporate-governance. We intend to post any material amendments or waivers of our Code of Business Conduct and Ethics that apply to our executive officers on this website. In fiscal 2019, we did not post any material amendments to or waivers of the Code of Business Conduct and Ethics on our website. In addition, our Whistle Blower Policy is available on our website at http://ir.daveandbusters.com/corporate-governance.

Compensation Committee Interlocks and Insider Participation

 

During fiscal 2019, the members of our Compensation Committee were Mr. Crawford, Mr. Griffith, Ms. Mueller and Ms. Storms. None of our executive officers serve on the compensation committee or board of directors of any other company of which any of the members of our Compensation Committee or any of our directors is an executive officer.

Communications with the Board of Directors

 

If shareholders wish to communicate with the Board of Directors or with an individual director, they may direct such communications in care of the General Counsel, 2481 Mañana Drive, Dallas, Texas 75220. The communication must be clearly addressed to the Board of Directors or to a specific director. The Board of Directors has instructed the General Counsel to review and forward any such correspondence to the appropriate person or persons for response.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows the ownership of our common stock by (a) all persons known by us to beneficially own more than 5% of our common stock, (b) each present director, (c) the named executive officers, and (d) all executive officers and directors as a group.

We have determined beneficial ownership in accordance with the rules of the SEC, and unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares that they beneficially own, subject to community property laws where applicable.

We have based our calculation of the percentage of beneficial ownership on 30,606,840 shares of our common stock outstanding as of April 9, 2020, unless otherwise indicated in the footnotes below. We have deemed shares of our common stock subject to stock options that are currently exercisable or exercisable within 60 days of April 9, 2020 to be outstanding and to be beneficially owned by the person holding the stock option for the purpose of computing the percentage ownership of that person. Unless otherwise noted, the address of each beneficial owner is c/o Dave & Buster’s Entertainment, Inc., 2481 Mañana Drive, Dallas, Texas 75220.

 

Name of Beneficial Owner

  

Number of Shares of Common
Stock Beneficially Owned as of

April 9, 2020

     Percent  

5% Shareholders

     

BlackRock, Inc.(1)

55 East 52nd Street

New York, NY 10055

     4,781,086        15.6

The Vanguard Group(2)

100 Vanguard Blvd.

Malvern, PA 19355

     3,692,319        12.0

Kohlberg Kravis Roberts & Co.(3)

9 West 57th Street, Suite 4200

New York, NY 10019

     2,525,800        8.2

Morgan Stanley(4)

1585 Broadway

New York, NY 10036

     2,413,493        7.9

Mackenzie Financial Corporation(5)

180 Queen Street West

Toronto, Ontario M5V 3K1

     2,344,198      7.6

Hill Path Capital LP(6)

150 East 58th Street, 32nd Floor

New York, NY 10155

     2,148,477      7.0

Directors

     

Stephen M. King(7)

     471,368        1.5

Victor L. Crawford

     8,905        *  

Hamish A. Dodds

     7,513        *  

Michael J. Griffith(8)

     72,426        *  

Jonathan S. Halkyard(9)

     55,874        *  

John C. Hockin(10)

     0        *  

Brian A. Jenkins(11)

     280,025        *  

Patricia H. Mueller(12)

     20,266        *  

Kevin M. Sheehan(13)

     104,239        *  

Jennifer Storms(14)

     13,119        *  

Named Executive Officers(15)

     

Joe DeProspero(16)

     37,971        *  

Sean Gleason(17)

     84,866        *  

Margo L. Manning(18)

     95,307        *  

John B. Mulleady(19)

     124,218        *  

All Executive Officers and Directors as a Group (19 Persons)(20)

     1,424,095        4.7

 

*

Less than 1%.

 

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(1)

Based on information contained in Schedule 13G/A dated December 31, 2019, filed on February 4, 2020. The Schedule 13G/A reported that BlackRock, Inc. owned and had sole dispositive power over 4,781,086 shares of common stock and had sole voting power over 4,722,837 shares of common stock.

 

(2)

Based on information contained in Schedule 13G/A dated December 31, 2019, filed on February 11, 2020. The Schedule 13G/A reported that The Vanguard Group owned and had sole dispositive power over 3,622,042 shares of common stock, sole voting power over 65,084 shares of common stock, shared voting power over 9,400 shares of common stock and shared dispositive power over 70,277 shares of common stock.

 

(3)

Based on information contained in Schedule 13D/A dated March 2, 2020, filed on March 4, 2020. The Schedule 13D/A reported that KKR Dragon Aggregator L.P. (“Dragon”), KKR Dragon GP LLC, Powell Investors II Limited Partnership (“Powell”), KKR Special Situations Fund II Limited, KKR Special Situations (EEA) Fund II L.P., KKR Associates Special Situations (EEA) II Limited, KKR Associates Special Situations (Offshore) II L.P., KKR Special Situations (Offshore) II Limited, KKR Financial Holdings LLC, KKR Credit Fund Advisors LLC, KKR Credit Advisors (US) LLC, Kohlberg Kravis Roberts & Co., L.P., KKR & Co. GP LLC, KKR Holdco LLC, KKR Group Partnership L.P., KKR Group Holdings Corp., KKR & Co., Inc., KKR Management LLP, Henry R. Kravis, and George R. Roberts are collectively the “KKR Reporting Persons” thereunder. The KKR Reporting Persons owned and had sole voting and dispositive power over 2,525,800 shares of common stock, including 1,612,492 shares of common stock held directly by Dragon and 913,308 shares of common stock held directly by Powell, and no shared voting or dispositive power over shares of common stock. The KKR Reporting Person or their affiliates have additional economic exposures to 1,345,493 shares of common stock.

 

(4)

Based on information contained in Schedule 13G dated April 14, 2020, filed on April 23, 2020. The Schedule 13G reported that Morgan Stanley owned and had shared dispositive power over 2,413,493 shares of common stock and had shared voting power over 2,401,897 shares of common stock.

 

(5)

Based on information contained in Schedule 13G/A dated December 31, 2019, filed on February 13, 2020. The Schedule 13G/A reported that Mackenzie Financial Corporation owned and had sole dispositive power over 2,344,198 shares of common stock and sole voting power over 2,344,198 shares of common stock.

 

(6)

Hill Path Capital Partners LP (“HPCP”), Hill Path Capital Co-Investment Partners LP (“HPCCP”), Hill Path Capital Partners GP LLC, Hill Path Investment Holdings LLC, Hill Path Capital LP, Hill Path Holdings LLC, and Scott I. Ross are collectively the “HP Reporting Persons” thereunder. The HP Reporting Persons owned and had sole voting and dispositive power over 2,148,477 shares of common stock, including 2,095,246 shares of common stock held directly by HPCP and 52,231 shares of common stock held by HPCCP, and no shared voting or dispositive power over shares of common stock.

 

(7)

Shares reflected in the table include 396,266 shares issuable pursuant to outstanding stock options held by Mr. King that are exercisable within 60 days of April 9, 2020. Shares reflected in the table also include 18,346 stock options held by the Stephen and Shauna King Investment Partnership LP (the “Investment Partnership”) that are exercisable within 60 days of April 9, 2020. Stephen and Shauna King Investment Partnership GenPar LLC (“GenPar”) is the general partner of the Investment Partnership. Mr. King is the sole member of GenPar and has sole voting and investment power over all of the shares owned by the Investment Partnership.

 

(8)

Shares reflected in the table include 20,796 shares owned by Mr. Griffith and 17,948 shares owned by The 2014 Griffith Family Trust dated October 20, 2014 (the “Family Trust”). Currently, Mr. Griffith has sole voting and investment power over all of the shares owned by the Family Trust. Shares reflected in the table also include 33,682 shares issuable pursuant to outstanding stock options held by Mr. Griffith, all of which are fully vested.

 

(9)

Shares reflected in the table include 33,682 shares issuable pursuant to outstanding stock options held by Mr. Halkyard, all of which are fully vested.

(10)

Mr. Hockin joined the board in early-May 2020 and held no shares in the Company.

 

(11)

Shares reflected in the table include 185,241 shares issuable pursuant to outstanding stock options held by Mr. Jenkins that are exercisable within 60 days of April 9, 2020. Shares reflected in the table also include 38,808 stock options held by LTD Partner LP (the “Jenkins Partnership”) that are exercisable within 60 days of April 9, 2020. LTD Partners GenPar LLC (the “Jenkins GenPar”) is the general partner of the Jenkins Partnership. Currently, Mr. Jenkins is the sole member of the Jenkins GenPar and has sole voting and investment power over all the options held by the Jenkins Partnership.

 

(12)

Shares reflected in the table include 9,549 shares issuable pursuant to outstanding stock options held by Ms. Mueller, all of which are fully vested.

 

(13)

Shares reflected in the table include 33,682 shares issuable pursuant to outstanding stock options held by Mr. Sheehan, all of which are fully vested.

 

(14)

Shares reflected in the table include 4,224 shares issuable pursuant to outstanding stock options held by Ms. Storms, all of which are fully vested.

 

(15)

In addition to Messrs. Jenkins and King who each serve as a director.

 

(16)

Shares reflected in the table include 23,287 shares issuable pursuant to outstanding stock options held by Mr. DeProspero that are exercisable within 60 days of April 9, 2020.

 

(17)

Shares reflected in the table include 63,541 shares issuable pursuant to outstanding stock options held by Mr. Gleason that are exercisable within 60 days of April 9, 2020.

 

(18)

Shares reflected in the table include 82,417 shares issuable pursuant to outstanding stock options held by Ms. Manning that are exercisable within 60 days of April 9, 2020.

 

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(19)

Shares reflected in the table include 110,399 shares issuable pursuant to outstanding stock options held by Mr. Mulleady that are exercisable within 60 days of April 9, 2020.

 

(20)

Shares reflected in the table include a total of 1,092,774 shares issuable pursuant to outstanding stock options held by our Executive Officers and Directors as a group that are exercisable within 60 days of April 9, 2020. The holdings of Mr. Gleason are not included in this number as he departed the Company on April 30, 2020.

 

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EXECUTIVE OFFICERS

We are furnishing below certain biographical information about our executive officers.

 

Kevin Bachus        Scott Bowman     

 

Dave & Buster’s Since: 2012

   

 

Dave & Buster’s Since: 2019

   

Age: 51

   

Age: 53

   

Food & Beverage Experience: 7 yrs

   

Food & Beverage Experience: 1 yr

   

Entertainment Experience: 22 yrs

   

Entertainment Experience: 1 yr

   
         
     

Current Position:

   

Current Position:

   

– Senior Vice President of Entertainment and Games Strategy since November 2012.

   

–  Senior Vice President and Chief Financial Officer since May 2019.

   
     

Prior Business Experience:

   

Prior Business Experience:

   

–  Bebo, Inc., an international social networking site:

  Chief Product Officer (2010-2012)

–  IMO Entertainment, a social networking services company:

  EVP and Chief Product Officer (2009-2010)

–  Virrata Games, Inc./Play Day TV, an on-demand tv channel offering family-friendly video games:

  SVP and Chief Architect (2008-2009)

–  Uprising Studios, a software gaming company:

  CEO (2006-2008)

–  Nival Interactive, Inc., an European video game developer:

  CEO (2005-2006)

–  Infinium Labs, Inc., a web technology company:

  CEO and President (2004-2005)

–  Capital Entertainment Group, Inc., an innovative development “incubation” company:

  VP of Publishing (2001-2003)

–  Microsoft Corporation, a multinational technology company:

  Director of Third Party Relations-Xbox (1999-2001)

  Group Product Manager-DirectX (1997-1999)

   

–  Hibbet Sports, Inc., a regional sporting goods company:

  SVP and CFO (2012-2019)

–  The Home Depot, Inc.:

  Multiple positions, including, Division CFO – Northern Division (2003-2012)

   
     

Education:

–  B.A. Cinema/Television Production, University of Southern California

     

Education:

–  B.S. Accounting and Finance, University of Miami, Ohio

–  M.B.A. Emory University – Goizueta Business School

   

 

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Brandon Coleman III        Robert W. Edmund     

 

Dave & Buster’s Since: 2020

   

 

Dave & Buster’s Since: 2018

   

Age: 37

   

Age: 45

   

Food & Beverage Experience: 10 yrs

   

Food & Beverage Experience: 2 yrs

   

Entertainment Experience: <1 yr

   

Entertainment Experience: 2 yrs

   
         
     

Current Position:

   

Current Position:

   

– Senior Vice President and Chief Marketing Officer since February 2020.

   

–  General Counsel, Secretary and SVP of Human Resources since October 2018.

   
     

Prior Business Experience:

   

Prior Business Experience:

   

–  Del Frisco’s Restaurant Group, an American multi-brand restaurant company focused on steaks:

  Various positions, including President of Del Frisco’s Grille (Aug 2017-Nov 2019) and CMO (Dec 2016-Oct 2017)

–  Brava Partners, a consulting group focused on brand strategies and planning:

  CEO and Management Consultant (Jul 2013-Dec 2016)

–  Snapfinger, Inc., a start-up company focused on mobile app food ordering:

  CMO (2013)

–  Romano’s Macaroni Grill, an American casual dining brand:

  CMO (2010-2013)

–  Restaurants Unlimited, Inc., a multi-concept restaurant co.:

  VP of Marketing (2009-2010)

–  Carino’s Italian Grill, a multi-national Italian casual dining brand:

  Director of Marketing (2006-2008)

   

–  KForce Inc., a publicly traded professional staffing and solutions firm focused on technology and accounting & financial services:

  Various positions, including Chief Talent, Legal & Risk Officer (Feb 2014-Oct 2018)

–  PetSmart, Inc., a leading pet animal products and services retail chain:

  Various positions, including VP, Legal – Business Operations (2009-Feb 2014)

–  Ohio Business Roundtable, an independent, non-partisan organization of Ohio-based CEOs focused on bettering Ohio’s business climate:

  Director of Policy and General Counsel (2008-2009)

–  Porter Wright Morris & Arthur LLP., a multi-state full-service law firm:

  Various positions, including Partner (2004-2008)

   
     

Education:

–  B.B.A. Marketing, Texas A&M University

     

Education:

–  B.A. Political Science & Philosophy, The Ohio State University

–  J.D. Harvard Law School

   

 

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JP Hurtado        Margo L. Manning     

 

Dave & Buster’s Since: 2018

   

 

Dave & Buster’s Since: 1991

   

Age: 43

   

Age: 55

   

Food & Beverage Experience: 16 yrs

   

Food & Beverage Experience: 28 yrs

   

Entertainment Experience: 16 yrs

   

Entertainment Experience: 28 yrs

   
         
     

Current Position:

   

Current Position:

   

– Senior Vice President and Chief Information Officer since May 2019.

   

–  Senior Vice President and Chief Operating Officer since December 2016.

   
     

Prior Business Experience:

   

Prior Business Experience:

   

–  Dave & Buster’s Entertainment, Inc.:

  VP and CIO (May 2018-May 2019)

–  Royal Caribbean Cruises, Ltd., a leading global cruise line operator:

  Multiple positions (2004-2018), including, AVP, Shipboard Technology (2016-2018) and AVP, Asia Information Technology (2014-2018)

   

–  Dave & Buster’s Entertainment, Inc.:

  SVP of Human Resources (November 2010-December 2016)

  SVP of Training and Special Events (September 2006-November 2010)

  VP of Training and Sales (June 2005-September 2006)

  VP of Management Development (September 2001-June 2005)

–  Dave & Buster’s Entertainment, Inc. and predecessor companies:

  AVP of Team Development (December 1999-September 2001)

  Various capacities with increasing responsibilities (1991-1999)

   
     

Education:

–  B.A. Decision & Information Sciences, University of Florida

   

Education:

–  B.A. Advertising & Marketing, Southern Methodist University

–  M.H.M. University of Houston

   
Michael J. Metzinger       John Mulleady     

 

Dave & Buster’s Since: 2005

   

 

Dave & Buster’s Since: 2012

   

Age: 63

   

Age: 59

   

Food & Beverage Experience: 33 yrs

   

Food & Beverage Experience: 7 yrs

   

Entertainment Experience: 14 yrs

   

Entertainment Experience: 7 yrs

   
         
     

Current Position:

   

Current Position:

   

–  Vice President-Accounting and Controller since January 2005.

   

–  Senior Vice President of Real Estate and Development since April 2012.

   
     

Prior Business Experience:

   

Prior Business Experience:

   

–  Carlson Restaurants Worldwide, Inc.:

  Various positions, including, Executive Director-Financial Reporting (1986-2005)

   

–  BJ’s Wholesale Club, a leading operator of warehouse clubs in the eastern United States:

  SVP, Director of Real Estate (2008-2012)

–  Circuit City Stores, Inc., a consumer electronics retailer:

  VP of Real Estate (2006-2008)

–  The Home Depot, Inc.:

  Director of Construction (1999-2006)

   
     

Education:

–  B.B.A. Accounting and Finance, University of Texas at Austin

     

Education:

–  B.S. Civil Engineering and B.S. Management Engineering, University of the Pacific

–  M.S. Construction Management, University of California, Berkeley

   

 

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EXECUTIVE COMPENSATION

 

Compensation Discussion and Analysis

       

Executive Compensation

Quick Navigation

 

 

The Compensation Committee of our Board of Directors is responsible for establishing our compensation philosophy and ensuring each element of our compensation program encourages high levels of performance among the executive officers and positions the Company for growth. The Compensation Committee ensures our compensation program is fair, competitive, and closely aligns the interests of our executive officers with both the Company’s short- and long-term business objectives and the interests of our shareholders. Through a strategic combination of base pay, cash-based short-term incentive plans, and a cash- and equity-based long-term incentive plan, our Compensation Committee strives to reward executive officers for meeting certain strategic objectives and increasing shareholder value.

       

  Compensation Discussion and  Analysis

     P. 32  
       

  Compensation Practices

     P. 33  
       

  Elements of Compensation

     P. 36  
       

  Stock Ownership Guidelines

     P. 42  
       

  COVID-19 Pandemic Action Plan

     P. 43  
       

  2019 Summary Compensation  Table

     P. 45  
       

  Employment Agreements

     P. 51  
       

  Potential Payments Upon Termination or Change in Control

     P. 52  

This section describes our compensation program for our named executive officers (“NEOs”) for fiscal 2019. The discussion focuses on our compensation programs and compensation-related decisions for fiscal 2019 and addresses why we believe our compensation program supports our business strategy and operational plans. For fiscal 2019, our NEOs are:

 

   

Brian A. Jenkins – Chief Executive Officer

   

Scott Bowman – Chief Financial Officer (1)

   

Joe DePropsero – Senior Vice President of Supply Chain and Business Development (1)

   

Margo L. Manning – Senior Vice President and Chief Operating Officer

   

John B. Mulleady – Senior Vice President of Real Estate and Development

   

Sean Gleason – Senior Vice President and Chief Marketing Officer (2)

 

(1)

Mr. Bowman joined the Company as CFO in May 2019 succeeding Mr. DeProspero who served as Interim CFO from August 2018 until Mr. Bowman’s appointment. Mr. DeProspero then became the Company’s SVP of Supply Chain and Business Development.

 

(2)

Mr. Gleason departed the Company on April 30, 2020.

Business, Strategy and Performance Highlights for Fiscal 2019

Please see the highlights for fiscal 2019 set forth on pages 3-4 of the Executive Summary section of this Proxy statement.

Compensation Philosophy and Overall Objectives of Executive Compensation Programs

Our executive compensation philosophy is based upon three core values: pay for performance, market-competitive pay and sustained shareholder value creation.

Pay for Performance—This ensures that we align the interests of senior executives with the interests of our shareholders. Compensation is tied directly to delivering both annual and long-term value creation to our shareholders. Annual incentives focus on efficient and productive operation of the business, while long-term incentives focus on value creation of the enterprise. In addition, we put greater emphasis on the longer-term aspects of the compensation package to help ensure that all actions of management contribute to multi-year value creation.

Market-Competitive Pay—In setting compensation for our executive officers, including our NEOs, the Compensation Committee uses competitive compensation data from an annual total compensation study of a selected peer group of other restaurant and entertainment companies of comparable size and business models as well as other relevant survey sources to inform its decisions about overall compensation opportunities and specific compensation elements. Additionally, the Compensation Committee uses multiple reference points when establishing targeted compensation levels. The Compensation Committee applies judgment and discretion in establishing targeted pay levels, taking into account not only competitive market data, but also factors such as company, business unit, and individual

 

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performance, scope of responsibility, critical needs and skill sets, experience, leadership potential, and succession planning. Consistent with our pay for performance core values, compensation above target levels is achieved through above-target performance against our annual and long-term incentive goals.

Sustained Shareholder Value Creation—All of our compensation plans are designed to increase the value we deliver to our shareholders through the selection of proper business performance metrics, the leverage built into the plans for performance achievement and the proper governance of the plans throughout the year by our Compensation Committee. We believe that profitable growth of our enterprise is primary while simultaneously reinforcing an ethical and performance-based culture. Our Compensation Committee approves all goals and awards in advance and monitors progress on their achievement throughout the year. In the long-term incentive plan (the “LTIP”) implemented pursuant to the 2014 Stock Incentive Plan, we use a series of vehicles to reinforce this commitment to sustained shareholder value creation. These vehicles are:

 

LTIP Vehicle

  Weighting
as % of LTIP
  Focus

Stock Options

  50%  

Continuous shareholder value creation over time

Performance-based Restricted Stock Units

  35%  

Performance in strategic areas that build/sustain the enterprise and retention of our key leaders to ensure sustained implementation of our strategy. Performance-based Restricted Stock Units (“PSUs”) and Performance Cash account for 50% of the overall LTIP target and contribute a robust performance mix.

Performance Cash

 

  15%

Through this combination of vehicles and the design of our programs, we ensure that our expectation for continuous improvement, growth and profitability are achieved while effectively managing any undue risk elements.

Our compensation philosophy guides us in our annual review of compensation, the assessment of the right pay for performance relationship and ensures that when strong performance is achieved, it is appropriately rewarded. Our Compensation Committee annually reviews this philosophy and our compensation plans to ensure they are continuing to meet their stated goals and objectives. If they are not, changes will be made to reestablish the right alignment.

In sum, this philosophy is designed to ensure that shareholders see a return for their investment in our Company and that we are getting the right return on our leadership compensation investment. Note, however, that for fiscal 2020, given the current environment created by the COVID-19 Pandemic, we believe it is critical to heavily incent retention through the use of one-time stock-based awards.

Compensation Practices

The following list summarizes executive compensation practices that we have to drive performance as well as executive compensation practices that we avoid because we do not believe they serve the long-term interests of our shareholders.

 

 

What We Do

 

  Set stock ownership guidelines for executives and directors

 

  Review tally sheets for executives

 

  Disclose performance goals for incentive payments

 

  Set maximum payout caps on our annual and long-term incentives

 

  Limit perquisites and other benefits, and do not include income tax gross-ups (except for relocation expenses)

 

  Subject all variable pay to a compensation recovery “clawback” policy

 

  Have double-trigger change in control agreements

 

  Independent Compensation Committee advised by an independent compensation consultant

 

  Enforce strict insider trader policies and black-out periods for executives and directors

 

 

What We Do Not Do

 

×   No hedging or pledging of our stock by executives or directors

 

×   No dividends paid on unearned performance-based shares

 

×   No excise tax gross-ups to any executive

 

×   No repricing or cash buyout of underwater stock options

 

×   No market timing in granting of equity awards

 

 

 

 

 

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Shareholder Say-on-Pay Vote for 2019 and Compensation Actions Taken

At last year’s annual shareholder meeting, approximately 97% of the votes cast were cast in support of the compensation of our NEOs. The positive results of this vote is one of the many factors our Compensation Committee considers in evaluating our executive compensation program. Following our annual meeting in 2019, the Committee continued to review our compensation program and practices, which included engagement shareholders on a wide variety of topics including corporate governance and compensation. Several changes were made to the compensation program in 2020 based on advice from the Compensation Committee’s new independent compensation consultant and as a response to the COVID-19 pandemic as further described in Section “COVID-19 Pandemic Action Plan” beginning on page 43.

Procedures for Determining Compensation

Our Compensation Committee has the overall responsibility for designing and evaluating the salaries, incentive plan compensation, policies and programs for our executive officers, including the NEOs. The Compensation Committee relies on input from an independent compensation consultant and the experience of members of the Compensation Committee to guide our compensation decisions, including compensation of our NEOs. In addition, the Compensation Committee relies on input from our Chief Executive Officer regarding an officer’s individual performance (other than himself) and an analysis of our corporate performance. By a delegation of authority from the Board of Directors, the Compensation Committee has final authority regarding the overall compensation structure for the executive officers, including the NEOs.

The compensation of our executive officers consists primarily of four major components:

 

   

base salary;

 

   

annual incentive awards;

 

   

long-term incentive awards; and

 

   

other benefits.

Each of these components is discussed in detail in “Elements of Compensation” below.

When making compensation decisions, the Compensation Committee considers, among other things:

 

   

the Company’s short- and long-term performance relative to financial and strategic targets;

 

   

the executive officer’s prior experience and sustained individual performance;

 

   

the significance of the executive officer’s contributions to the ongoing success of the Company;

 

   

the scope of the executive officer’s responsibilities;

 

   

the future value the executive officer is expected to bring to the Company; and

 

   

the results of benchmarking studies, which illustrate value of the executive officer’s total compensation package relative to others in the industries with which we compete for talent.

 

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In fiscal 2019, the Compensation Committee engaged the compensation consulting firm Aon Consulting to conduct a benchmarking study of executive compensation programs, provide analysis and advice regarding plan design for short- and long-term incentive plans, and provide analysis and advice concerning trends and regulatory developments in executive compensation. Aon Consulting evaluated our market competitiveness against (a) a custom peer group and (b) Aon Consulting’s Total Compensation Measurement survey of retail companies. The peer group against which we compared ourselves in fiscal 2019 includes (i) casual dining restaurants that offer an “experience”; (ii) casual dining concepts with which we compete for leadership talent; (iii) companies that focus on entertainment, including casino & gaming companies; (iv) hotels, resorts & cruise lines; and (v) leisure facilities. At the time of comparison, all members of the peer group were publicly-traded companies that had revenues between 0.3 times to 2.5 times our revenue and in aggregate, had a restaurant/entertainment mix similar to our income mix:

 

BJ’s Restaurants, Inc.

 

Cracker Barrel Old Country Store, Inc.

 

Red Robin Gourmet Burgers, Inc.

Bloomin’ Brands

 

Dine Brands Global, Inc.

 

SeaWorld Entertainment, Inc.

Brinker International, Inc.

 

Eldorado Resorts, Inc.

 

Six Flags Entertainment Corporation

Cedar Fair, L.P.

 

International Speedway Corporation

 

Speedway Motorsports, Inc.

The Cheesecake Factory Incorporated

 

The Marcus Corporation

 

Texas Roadhouse, Inc.

Churchill Downs Incorporated

 

Penn National Gaming, Inc.

 

Vail Resorts, Inc.

Cinemark Holdings, Inc.

       

During fiscal 2019, no changes occurred to the peer group.

Few direct comparable peers to the Company exist among the peer group. As a result, due to the size differences among the peer group and the Company, Aon Consulting used regression analysis to size-adjust the results. Aon Consulting had no other direct business relationship with the Company and received no payments from us other than the fees and expenses for services to the Compensation Committee.

With respect to the compensation for the Chief Executive Officer, the Compensation Committee evaluates the Chief Executive Officer’s performance and sets his compensation. With respect to our corporate performance as a factor in compensation decisions, the Compensation Committee considers, among other aspects, the achievement of our long-term and short-term strategic goals, revenue goals, profitability, and return to our investors. Our Chief Executive Officer plays an important advisory role in the compensation-setting process of the other executive officers, including the NEOs. Our Chief Executive Officer evaluates the performance of the other executive officers and makes recommendations to the Compensation Committee concerning performance objectives and salary and bonus levels for the other executive officers, including the NEOs. The Compensation Committee annually discusses the recommendations with the Chief Executive Officer. The Compensation Committee may, in its sole discretion, approve, in whole or in part, the recommendations of the Chief Executive Officer. In fiscal 2019, the Compensation Committee approved Mr. Jenkins’s recommendations for salary and bonus with respect to each of the other executive officers, including the NEOs.

Pay for Performance Alignment

We work to leverage our executive compensation structure to drive outstanding Company performance and provide appropriate rewards for sustained, strong individual performance. A significant portion of each executive officer’s pay is at-risk and awarded in the form of cash- and stock-based short- and long-term incentive grants. These incentive grants, which are discussed below, link each executive officer’s annual income to the achievement of short- and long-term financial and strategic goals. As such, executive officers, including the NEOs, face a risk of forfeiture or a reduced payout if the Company fails to meet its financial and strategic objectives. Under each incentive plan, target compensation is only earned if the designated financial and strategic objectives are met. Each incentive plan offers above-target payouts for outstanding performance; alternatively, no incentive may be earned if a threshold level of performance is not achieved. Further, the Compensation Committee aims to link any adjustments to an executive officer’s base salary to his or her individual performance.

In evaluating whether the compensation programs appropriately link each executive officer’s compensation to Company performance, the Compensation Committee reviews and evaluates the achievements of the Company in

 

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the fiscal year. In fiscal 2019 the Company grew total revenues, new store openings, earnings per share, and EBITDA, but also had decreased comparable store sales for the fiscal year. Key accomplishments are more specifically detailed in our Annual Report on Form 10-K. The Compensation Committee believes each element of the compensation program was effective at aligning the executive officers with the Company’s objectives and the interests of shareholders and at appropriately recognizing the results the Company achieved under their leadership.

Elements of Compensation

Base Salary

A portion of each executive officer’s total compensation is in the form of base salary. This is a fixed cash payment, expressed as an annualized salary. The salary component was designed to provide the executive officers with consistent income and to attract and retain talented and experienced executives capable of managing our operations and strategic growth. In alignment with our compensation philosophy, the Compensation Committee believes that having base salary levels that position us appropriately relative to the market and reflect the performance and level of responsibility of each executive officer is key to providing a competitive total compensation package. Annually, the performance of each executive officer, including the NEOs, is reviewed by the Compensation Committee using information and evaluations provided by the Chief Executive Officer, taking into account our operating and financial results for the year, an assessment of the contribution of each executive officer to such results, the achievement of our strategic growth and any changes in the role and responsibility of an executive officer. In addition, the Compensation Committee considers the results of the benchmarking study and the market competitiveness of each NEO’s base salary (generally targeting the 50th percentile of the benchmark data) to determine appropriate merit- and market-based increases to each executive’s base salary. In fiscal 2019, some of the NEOs received merit-based increases to base salary as noted in the chart below.

 

Name

   New Base      Previous Base      Percentage Increase  

Brian A. Jenkins

   $ 780,000      $ 750,000        4.00

Scott Bowman(1)

   $ 455,000        

Joe DeProspero(2)

   $ 250,000      $ 213,000        17.37

Sean Gleason(3)

   $ 410,000      $ 410,000        0.00

Margo L. Manning

   $ 465,000      $ 440,000        5.68

John B. Mulleady(4)

   $ 412,000      $ 412,000        0.00

 

(1)

Mr. Bowman joined the Company as CFO on May 6, 2019.

 

(2)

Mr. DeProspero served as Interim CFO from August 2018 until Mr. Bowman’s appointment as CFO at which time Mr. DeProspero became SVP of Supply Chain and Business Development for the Company. The increase reflected here is inclusive of the increase he received for his promotion to SVP of Supply Chain and Business Development.

 

(3)

Mr. Gleason departed the Company on April 30, 2020. Mr. Gleason did not receive a merit increase for fiscal 2019 due to a salary increase awarded in December 2018 effective January 1, 2019.

 

(4)

Mr. Mulleady did not receive a merit increase for fiscal 2019 due to a total compensation increase awarded in December 2018 for fiscal 2019.

The Compensation Committee believes the increases awarded are commensurate with each NEO’s individual contribution to the Company’s success and that the resulting market positioning of each NEO is consistent with the considerations outlined above.

Annual Incentive Awards

The Executive Incentive Plan created under the 2014 Omnibus Incentive Plan (the “Executive Incentive Plan”) is designed to recognize and reward our employees for contributing towards the achievement of our annual business plan. The Compensation Committee believes the Executive Incentive Plan provides a valuable short-term incentive program that delivers a cash bonus opportunity for key employees, including the NEOs, upon achievement of targeted operating results, as determined by the Compensation Committee and the Board of Directors. The Executive Incentive Plan also supports our efforts to integrate our compensation philosophies with our annual business objectives and focus our executive officers on the fulfillment of those objectives.

 

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In considering and approving the annual plan design, the Compensation Committee reviews target bonus percentages for each executive officer, including the NEOs, and considers the value of the incentive award relative to the individual’s total compensation package, the value of the incentive award and total compensation package relative to benchmark data, and the degree to which the individual can influence the Company’s achievement of its short-term financial and strategic objectives. The Compensation Committee also reviews annually the financial and strategic objectives that will comprise the components of the Executive Incentive Plan, the target for each component, and the payout percentages at threshold, target, and maximum performance for each component. The Compensation Committee relies on input from its compensation consultant, the results of benchmarking data, and analysis from our Chief Executive Officer to determine the appropriateness of the target bonus percentages for each executive officer (including the NEOs), the components of the Executive Incentive Plan, the targets for each component, and the payout percentages at each level of performance.

The fiscal 2019 incentive plan for most non-executive participants was based on our targeted “EBITDA” (net income, plus (a) interest expense (net), (b) loss on debt retirement, (c) provision for income taxes, and (d) depreciation and amortization expense) for fiscal 2019. The Compensation Committee annually reviews and sets the performance goals for the Executive Incentive Plan as necessary to ensure reasonableness, support of our strategy and consistency with our overall objectives. Bonus payout metrics for fiscal 2019 for our NEOs is shown in the table below.

 

Name

   Fiscal 2019
   Percentage of Bonus     Bonus Metric

Brian A. Jenkins

     75.0   EBITDA target(1)
     12.5   Total revenue target
     12.5   Comparable store sales growth target(2)

Scott Bowman

     75.0   EBITDA target(1)
     12.5   Total revenue target
     12.5   Comparable store sales growth target(2)

Joe DeProspero

     75.0   EBITDA target(1)
     12.5   Total revenue target
     12.5   Comparable store sales growth target(2)

Sean Gleason

     50.0   EBITDA target(1)
     25.0   Total revenue target
     25.0   Comparable store sales growth target(2)

Margo L. Manning

     75.0   EBITDA target(1)
     12.5   Total revenue target
     12.5   Comparable store sales growth target(2)

John B. Mulleady

     50.0   EBITDA target(1)
     25.0   Signed leases target(3)
     25.0   New store construction costs target(3)

 

(1)

The EBITDA target for fiscal 2019 was 8.1% higher than actual EBITDA for fiscal 2018 and the revenue target was 11.0% higher than actual fiscal 2018 revenues.

 

(2)

Comparable store sales (a year-over-year comparison of sales at stores open at the end of the period which have been open for at least 18 months as of the beginning of each of the fiscal years) is a key performance indicator used within the industry and is indicative of acceptance of our initiatives as well as local economic and consumer trends. We had 99 comparable stores at the beginning of fiscal 2019.

 

(3)

With respect to Mr. Mulleady’s objectives, the targets for signed leases and new store construction were aligned with our development strategy and intended to build the pipeline for future growth. In setting Mr. Mulleady’s targets, the Compensation Committee considered prior results and the level of performance needed to achieve development goals and set the targets at levels it believed were challenging but attainable.

 

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Under each executive officer’s employment agreement (including the NEOs) and the Executive Incentive Plan, a target bonus opportunity is expressed as a percentage of annualized base salary as of the end of the fiscal year, prorated according to the percentage of the fiscal year the executive officer is employed by the Company. Target levels are established based upon a review of market practices and align to the Company’s compensation philosophy. Bonuses above or below the target level may be paid subject to a prescribed maximum or minimum. Bonus attainment is calculated separately for each component of the Executive Incentive Plan. Below a minimum threshold level of performance, no awards will be granted under the Executive Incentive Plan. The threshold, target, and maximum percentages for each of the NEOs in fiscal 2019 under the Executive Incentive Plan are outlined in the table below.

 

Name

   % of Salary at
Threshold
     % of Salary at
Target
     % of Salary at
Maximum
 

Brian A. Jenkins

     43.8%        100.0%        200.0%  

Scott Bowman

     35.0%        80.0%        160.0%  

Joe DeProspero

     26.3%        60.0%        120.0%  

Sean Gleason

     22.5%        60.0%        120.0%  

Margo L. Manning

     35.0%        80.0%        160.0%  

John B. Mulleady

     18.8%        60.0%        120.0%  

The table below outlines the targets and relative payout percentages for the EBITDA, total revenue, and comparable store sales growth, signed leases, and new store construction components of the Executive Incentive Plan. Below a minimum threshold level of performance, no awards will be granted under the Executive Incentive Plan. The calculations are subject to straight-line interpolation between threshold and target performance and between target and maximum performance. The performance thresholds on the financial measures were set at a level that ensures no payout will be made unless the Company exceeded prior year performance.

 

     Performance            Bonus as % of Target  

Component

   Threshold      Target      Maximum             Threshold      Target      Maximum  

EBITDA(1)

   $ 279.3    $ 302.0    $ 341.3        50      100      200

Total Revenue(1)

   $ 1,334.1    $ 1,404.3    $ 1,474.5        50      100      200

Comparable Store Sales Growth

     0.0 %      1.5      3.0        0      100      200

Signed Leases

     9      12      15        25      100      200

New Store Construction(2)

         
Within 7.5%
of Budget
 
 
                  0      100      200

 

(1)

Dollar amounts are represented in millions.

 

(2)

Mr. Mulleady may be awarded the target new store construction bonus if the average actual total construction cost for building each new store opened in fiscal 2019 is within 7.5% of budget. If target EBITDA or better is achieved, the portion of Mr. Mulleady’s bonus associated with new store construction will increase at the same slope as the EBITDA bonus, based on EBITDA achievement.

At the close of the performance period, the Compensation Committee determined the bonuses for the executive officers, including the NEOs, following the annual audit and reporting of financial results for fiscal 2019 and reported the awards to the Board of Directors. The Compensation Committee authorized bonuses to the executive officers, including the NEOs, in amounts that were commensurate with the results achieved during fiscal 2019; however, in light of the extraordinary impact of the COVID-19 impact on the Company’s near-term liquidity, management recommended, and the Compensation Committee approved, delayed payment of the awards and payment of the awards in stock rather than cash for all NEOs. In reviewing fiscal 2019 results, the Compensation Committee recognized that we exceeded threshold, but did not achieve target EBITDA; we exceeded threshold but did not achieve target Total Revenue and did not achieve target Comparable Store Sales Growth, which resulted in an award below target level performance for substantially all employees. Mr. Jenkins, Mr. Bowman, Mr. DeProspero and Ms. Manning earned 47.6% of their target bonus opportunity for fiscal 2019. Mr. Gleason earned 42.5% of his target bonus. Mr. Mulleady achieved performance at maximum payout level on the portion of his bonus linked to the signed leases and target payout on the portion of his bonus related to the attainment of new store construction objectives; therefore, he

 

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earned 101.4% of his target bonus opportunity for fiscal 2019. The tables below outline the 2019 performance results and bonus payments earned under the Executive Incentive Plan to each NEO.

 

Component

   Target      Actual      % of Target      Payout %  

EBITDA(1)

     $   302.0      $   280.5      92.9      52.7

Revenue(1)

     $1,404.3      $1,354.7      96.5      64.7

Comparable Store Sales Growth

     1.5      (2.6 )%       0 %      0

Signed Leases

     12      19      158.3      200.0

New Store Construction(2)

     Within 7.5% of Budget      (1.5 )%       Target Achieved      100

 

(1)

Dollar amounts are represented in millions

 

(2)

The average total construction cost for building each new store opened in fiscal 2019 was within target. Therefore, Mr. Mulleady earned a payout of 100% of target for the portion of his bonus associated with new store construction.

 

Name

   Target Bonus      Bonus Earned      % of Target  

Brian A. Jenkins

     780,000        371,351        47.6%  

Scott Bowman

     273,000        129,973        47.6%  

Joe DeProspero

     150,000        71,414        47.6%  

Sean Gleason

     246,000        104,595        42.5%  

Margo L. Manning

     372,000        177,106        47.6%  

John B. Mulleady

     247,200        250,537        101.4%  

The Compensation Committee believes the incentive awards were warranted and consistent with the performance of each executive officer, including the NEOs, during fiscal 2019 based on the Compensation Committee’s evaluation of each individual’s overall contribution to accomplishing our fiscal 2019 corporate goals and of each individual’s achievement of strategic and individual performance goals during the year.

The Compensation Committee made a number of changes to the fiscal 2020 incentive plan following its annual review of the program as further described in Section “COVID-19 Pandemic Action Plan” beginning on page 43.

Long-term Incentive Awards

The Compensation Committee believes that it is essential to align the interests of the executive officers, including the NEOs, and other key management personnel responsible for our growth with the interests of our shareholders. The Compensation Committee has also identified the need to retain tenured, high performing executives. The Compensation Committee believes that these objectives are accomplished through the provision of cash- and stock-based incentives that align the interests of management personnel with the long-term objectives of enhancing our value, as set forth in the 2014 Stock Incentive Plan.

Annually, the Compensation Committee determines whether to grant long-term cash- and/or stock-based incentives to executive officers, including the NEOs, and other key management personnel. In determining whether to award grants, the Compensation Committee considers Company performance, individual performance, the significance of individuals’ contributions to the ongoing success of the Company, the valuation of the grants relative to the individual’s total compensation, value creation, and the recommendations of our Chief Executive Officer. In addition, the Compensation Committee considers the benchmarking data and additional analysis provided by the compensation consultant in determining appropriate grant levels for our executive officers, including the NEOs.

2019 Long Term Incentive Award Grant. During fiscal 2019, the Compensation Committee awarded to the executive officers, including the NEOs, and other key management personnel a combination of service-based non-qualified stock options (“Stock Options”) with gradual vesting schedules, PSUs that vest upon the attainment of pre-established performance targets, and long-term cash incentives (“Performance Cash”) that vest upon the attainment of pre-established performance targets. The Stock Options, which comprise 50% of each NEO’s award, vest in equal

installments over a three-year period and are exercisable up to a maximum of 10 years. The exercise prices of the

 

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stock option awards were established as the closing price of the Company’s stock on the date following the date on which the Compensation Committee approved the awards. The PSUs, which comprise 35% of each NEO’s award, and Performance Cash, which comprises 15% of each NEO’s award, vest after three years and are based 66.7% on achieving targeted three-year cumulative EBITDA and 33.3% on achieving a targeted return on capital invested in new stores (“ROIC”). The NEOs face a significant risk of forfeiture or reduced payout if the Company fails to meet either of the targets, as the settlement value of the PSUs and Performance Cash varies between 0% and 200% of the target award, depending on EBITDA and ROIC performance, as depicted in the table below. Further, the value of the Stock Options and the PSUs increases or decreases with the changes in the Company’s stock price. The Compensation Committee believes that the mix of 50% Stock Options, 35% RSUs and 15% Performance Cash provides an appropriate balance promoting retention and motivating and rewarding our executive officers and other key employees to deliver long-term financial success.

 

     2019-2021 PSU and Performance Cash Grant  
     3-Year Cumulative EBITDA             3-Year Cumulative ROIC  
      Performance
(in millions)
     Performance
as a Percentage
of Target
     Payout as a
Percentage
of Target(1)
             Performance(2)      Performance
as a Percentage
of Target
     Payout as a
Percentage
of Target(1)
 

Below Threshold

     Below $   832.2        Below 85.0%        0.0%           Below 2.6%        Below 85.0%        0.0%  

Threshold

     $   832.2        85.0%        50.0%           2.6%        85.0%        50.0%  

Target

     $   979.0        100.0%        100.0%           3.0%        100.0%        100.0%  

Maximum

     $1,174.8        120.0%        200.0%                 3.6%        120.0%        200.0%  

 

(1)

Performance and payouts are subject to straight-line interpolation between points.

 

(2)

Monthly ROIC for new stores opening during the three-year performance period.

Off-Cycle Grants. During fiscal year 2019, the Compensation Committee did not award any off-cycle grants to any executive officer, including our NEOs, except for Mr. Bowman’s grant of time-based RSUs in connection with his joining the Company as CFO in May 2019. The RSUs vest in three equal installments on the first, second and third anniversary of the grant.

2017 Long Term Incentive Award Payout. During fiscal 2017, the Compensation Committee awarded executive officers, including the NEOs, and other key management personnel a combination of service-based Stock Options with gradual vesting schedules, and RSUs and Performance Cash that would vest upon the attainment of pre-established cumulative performance targets during the 2017, 2018, and 2019 fiscal years.

 

     2017-2019 PSU and Performance Cash Grant  
     3-Year Cumulative EBITDA             3-Year Cumulative ROIC  
      Performance
(in millions)
     Performance
as a Percentage
of Target
     Payout as a
Percentage
of Target(1)
             Performance(2)      Performance
as a Percentage
of Target
     Payout as a
Percentage
of Target(1)
 

Below Threshold

     Below $783.1        Below 85.0%        0.0%           Below 2.13%        Below 85.0%        0.0%  

Threshold

     $783.1        85.0%        50.0%           2.13%        85.0%        50.0%  

Target

     $921.3        100.0%        100.0%           2.50%        100.0%        100.0%  

Maximum

     $1,105.6        120.0%        200.0%                 3.00%        120.0%        200.0%  

 

(1)

Performance and payouts are subject to straight-line interpolation between points.

 

(2)

Monthly ROIC for new stores opening during the three-year performance period.

 

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At the close of the performance period, the Compensation Committee determined the RSU and Performance Cash payouts for the executive officers, including the NEOs, following the annual audit and reporting of financial results for fiscal 2019 and reported the amounts to the Board of Directors. The Compensation Committee authorized payouts to the executive officers, including the NEOs, in amounts that were commensurate with the results achieved during the performance period. In reviewing fiscal 2019 results, the Compensation Committee recognized that we achieved results between target and maximum cumulative EBITDA and exceeded maximum cumulative ROIC, which resulted in a combined payout at 113.1% of target level performance for all participating employees, including the NEOs. The tables below outline the performance results and payouts that will be made to each NEO.

 

Component

   Target      Actual      % of Target      Payout %  

Cumulative EBITDA(1)

     $921.3        836.2        90.8%        69.2%  

3-Year Cumulative ROIC

     2.5%        3.8%        152.0%        200.0%  

 

(1)

Dollar amounts are represented in millions and include allowable pre-established adjustments for non-recurring items.

 

Name

  

Target
RSUs

(#)

    

Actual
RSUs

(#)

    

Target
Performance
Cash

($)

    

Actual
Performance
Cash

($)

 

Brian A. Jenkins

     3,613        4,076      $ 92,400      $ 104,227  

Joe DeProspero

     462        522      $ 11,835      $ 13,350  

Sean Gleason

     1,354        1,527      $ 34,650      $ 39,085  

Margo L. Manning

     3,660        4,129      $ 93,600      $ 105,581  

John B. Mulleady

     2,292        2,586      $ 58,616      $ 66,120  

Other Benefits

Retirement Benefits. Our employees, including our NEOs, are eligible to participate in the 401(k) retirement plan on the same basis as other employees. However, tax regulations impose a limit on the amount of compensation that may be deferred for purposes of retirement savings. As a result, we established the Select Executive Retirement Plan (the “SERP”). See “2019 Nonqualified Deferred Compensation” for a discussion of the SERP.

Perquisites and Other Benefits. We offer our NEOs a modest perquisite allowance and an annual executive physical. We believe these perquisites, which comprise less than 5% of each NEO’s total compensation, are reasonable and round out a competitive compensation program that enhances our ability to attract and retain executive talent. See “2019 Summary Compensation Table.”

Severance Benefits. We have entered into employment agreements with each of our NEOs. These agreements provide our NEOs with certain severance benefits in the event of involuntary termination or adverse job changes and are key to attracting and retaining key executives. See “Employment Agreements.”

Deductibility of Executive Compensation

We consider objectives such as attracting, retaining and motivating leaders when we design our executive compensation programs. We also consider the tax-deductibility of compensation, but it is not our sole consideration. U.S. tax reform which became effective in 2017 expanded the types of compensation included in determining tax deduction limits, consequently, we expect that tax deductibility will have less of an impact on our program design for our named executive officers in the future. For federal income taxes, compensation is an expense that is fully tax-deductible for almost all our U.S. employees.

 

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CEO Pay Ratio

The Compensation Committee reviewed a comparison of our Chief Executive Officer’s annual total compensation in fiscal 2019 to that of all other Company employees for the same period. Our calculations included employees who were active as of November 11, 2019. As Canadian employees account for less than 5% of our total employee population, we excluded Canadian employees from the median calculation. Our total employee population was 16,070 and our total employee population without our Canadian employees was 15,724. The median employee was identified using all earnings for fiscal 2019, as reported in our payroll system. Compensation was annualized for all employees including Mr. Jenkins, other than seasonal or temporary employees, based on the number of days employed during fiscal 2019. Payments which were not expected to be repeated throughout the year were not annualized. Mr. Jenkins had fiscal 2019 annual total compensation of $3,044,168 as reflected in the Summary Compensation Table included in this Proxy Statement. Our median employee’s annual total compensation for fiscal 2019 was $20,444 (based on the same methodology used for the Summary Compensation Table). Mr. Jenkins’s annual total compensation was approximately 148.9 times that of our median employee.

Stock Ownership Guidelines for Officers

Our ownership guidelines were established to further align the interests of our Chief Executive Officer, NEOs and executive officers with shareholders and encourage each executive officer to maintain a long-term equity stake in the Company. The guidelines provide that each executive officer must hold a multiple of his or her annual base salary in the Company’s stock and include the following holding requirement:

 

Position

  

Ownership Requirement

(multiple of base salary)

 

Chief Executive Officer

     7 times  

Chief Financial Officer and Chief Operating Officer

     3 times  

Other Senior Vice Presidents

     2 times  

Equity counted toward the ownership requirement includes stock ownership, vested and unexercised stock options, time-based restricted stock, or other similar plan holdings, and stock beneficially owned in a trust. Any executives hired or promoted into an executive officer role would have five years from the date of hire or promotion to achieve the requirement. As of the end of fiscal 2019, two of our executive officers have been in their current role for more than five years and met the minimum ownership requirement. Each of the remaining executive officers, including our NEOs, have been hired or promoted to their current role in the last five years and have between 1-5 years to achieve the minimum requirement for their role.

Clawback Policy

The Company has adopted a clawback policy providing for the adjustment or recovery of compensation in certain circumstances. If the Board of Directors, upon recommendation of the Compensation Committee, determines that, as a result of a restatement of our financial statements because of material noncompliance with any financial reporting requirement under the securities laws, an executive officer has received more compensation than would have been paid absent the incorrect financial statements, within the three-year period immediately preceding the date on which the Company is required to prepare the restatement, the Board of Directors, in its discretion, shall take such action as it deems necessary or appropriate to address the events that gave rise to the restatement and to prevent its recurrence. In certain cases, such action may include, to the extent permitted by applicable law: (i) requiring partial or full reimbursement of any bonus or other incentive compensation paid to the executive officer; (ii) causing the partial or full cancellation of RSUs, Performance Cash, and Stock Options; (iii) adjusting the future compensation of such executive officer; and (iv) dismissing or taking legal action against the executive officer, in each case as the Board, upon recommendation of the Compensation Committee, determines to be in the Company’s best interests and that of our shareholders. These remedies would be in addition to, and not in lieu of, any penalties imposed by law enforcement agencies, regulators or other authorities. Any incentive-based awards or payments or other compensation paid to current and former executive officers under employment agreements or any other agreement or arrangement with the Company which is subject to recovery under any law, government regulation, or stock exchange listing requirement (including compliance with the Dodd-Frank Act), will be subject to the deductions and clawback as may be required by law, government regulation or stock exchange listing requirement.

 

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Risk Assessment Disclosure

Our Compensation Committee assessed the risk associated with our compensation practices and policies for employees, including a consideration of the balance between risk-taking incentives and risk-mitigating factors in our practices and policies. The assessment determined that any risks arising from our compensation practices and policies are not reasonably likely to have a material adverse effect on our business or financial condition.

COVID-19 Pandemic Action Plan

The global COVID-19 pandemic has had wide-spread impact on the economy and has been particularly devastating on the restaurant and entertainment industry, with sweeping nationwide-closures of non-essential businesses as mandated by local and federal governments. To protect the health and safety of guests and employees, and in full cooperation with local authorities and health official recommendations, Dave & Buster’s temporarily suspended all store operations as of March 20, 2020.

In April 2020, Dave & Buster’s announced strategic actions to increase liquidity, reduce operating expenses, and preserve cash as it navigates through unprecedented Company and industry disruption and seeks to position its operations for accelerated recovery. These actions included decisive and deliberate changes to pay levels and pay structure for our executives in the face of great market uncertainty and industry instability. Compensation actions included:

 

   

2019 Bonus. Certain milestones for the fiscal 2019 Executive Incentive Plan were achieved, but in light of the extraordinary impact of the COVID-19 pandemic on Dave & Buster’s near-term liquidity, management recommended, and the Compensation Committee approved, delayed payment of the awards and payment of the awards for all named executive officers in stock rather than cash.

 

   

2020 Base Salary. Management recommended, and the Compensation Committee approved, temporary corporate-wide base salary reductions beginning in April. This included 50% salary reductions for our Chief Executive Officer, Brian Jenkins, as well as all Senior Vice Presidents reporting to the CEO. The Company also indefinitely delayed merit-based increases in base salaries for fiscal 2020.

 

   

Suspension of Cash Payments to Board of Directors. The Compensation Committee suspended payment of all cash components of director compensation for the last three quarters of fiscal year 2020.

 

   

2020 Short and Long-Term Bonus Program. The Compensation Committee suspended the fiscal 2020 annual and long-term bonus plan in efforts to preserve liquidity and replaced the plans with a stock-based award to support the Business Recovery and Transformation Plan described below.

 

   

2020 Business Recovery and Transformation Plan. This plan was designed to address the immediate cash liquidity needs to stabilize the business, prepare for recovery given the extraordinary impact of the COVID-19 pandemic on Dave and Buster’s finances and business operations, and incentivize retention of key team members. The objective is to align management and investor interests and maintain business continuity through the crisis and for the long term. The 2020 Business Recovery and Transformation Plan replaces both the 2020 short-term bonus opportunity, typically paid in cash for the achievement of annual performance goals, as well as the 2020 long-term incentive grant opportunity, historically consisting of performance shares/cash and stock options. The Plan is made up of two equally weighted equity-based awards, performance-based Market Stock Units (MSU) and Restricted Stock Units (RSUs). MSUs are performance stock units, earned based on absolute stock price performance. The actual number of MSUs delivered is directly correlated to the absolute change in the Company’s stock price growth as measured on the first anniversary of grant. Given the uncertainty of the current environment, the Committee did not believe it feasible to establish long-term performance goals as was the historic practice for the Company. Instead, measuring the change in stock price was determined to be the most appropriate way to hold management accountable for the success of Business Recovery and Transformation Plan. Any earned RSUs and MSUs are subject to 3-year pro rata vesting. This is a plan for 2020 only; management and the Board intend to return to the Company’s performance-based short- and long-term incentive programs as soon as possible following the pandemic and the reopening of the Company’s stores.

 

   

Proposed Amendment to the 2014 Omnibus Incentive Plan. Dave & Buster’s is also seeking shareholder approval to amend the 2014 Omnibus Incentive Plan and requests an additional 3 million shares for issuance under the plan. The approval of this proposal will allow Dave and Buster’s to continue to grant long-term equity to employees critical to the success of our business recovery and transformation. As a result of the limited number of shares remaining available for future grant under the existing plan, we project that the current share reserve

 

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will not be sufficient to cover any equity grants needed beyond fiscal 2020. In fact, the RSUs and MSUs granted under the 2020 Business Recovery and Transformation Plan are made in units that are intended to be settled in stock but may be settled in cash if this amendment is not approved by stockholders. Additional details are found in the shareholder proposal beginning on page 13.

Compensation Committee Report

 

The Committee has reviewed and discussed the Compensation Discussion and Analysis (“CD&A”) with the management of the Company. Based on that review and discussion, on April 24, 2020 the Committee recommended to the Board of Directors that the CD&A be included in this Proxy Statement.

 

Michael J. Griffith, Chair

Victor Crawford

Patricia H. Mueller

Jennifer Storms

 

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2019 Summary Compensation Table

The following table sets forth information concerning all compensation that we paid or accrued during fiscal 2019, 2018, and 2017 to or for each of our NEOs.

 

Name and Principal Position

   Year      Salary
($)(3)
     Bonus
($)(4)
     Stock
Awards
($)(5)
     Option
Awards
($)(6)
     Non-Equity
Incentive
Plan
Compensation
($)(7)
     All Other
Compensation
($)(8)
     Total
($)
 

Brian A. Jenkins

(CEO)

     2019        772,500        0        721,866        1,031,242        475,578        42,982        3,044,168  
     2018        610,281           2,224,979        499,999        720,667        42,234        4,098,160  
     2017        463,846        4,616        465,571        807,981        411,148        28,596        2,181,758  

Scott Bowman

(CFO(1))

     2019        341,250        50,000        259,212        227,486        129,973        55,038        1,062,959  

Joe DeProspero

(Interim CFO and SVP of Supply Chain and Business Development(1))

     2019        240,750        0        43,721        62,492        84,764        28,633        460,360  
     2018        211,116        85,000        28,863        41,242        165,603        24,222        556,046  
     2017        207,773        3,688        27,568        39,434        92,563        28,600        399,626  

Sean Gleason

(SVP and Chief Marketing Officer(2))

     2019        417,885        0        143,464        204,989        143,680        32,674        942,692  
     2018        364,154           120,743        172,493        268,673        35,799        961,862  
     2017        347,885        4,616        139,111        232,151        194,251        38,221        956,235  

Margo L. Manning

(SVP and COO)

     2019        458,750        0        246,359        351,986        282,687        33,276        1,373,058  
     2018        433,750           262,478        374,999        320,767        32,896        1,424,890  
     2017        416,731        4,616        543,355        311,982        275,801        40,210        1,592,694  

John B. Mulleady

(SVP of Real Estate and Development)

     2019        412,000        0        173,025        247,199        316,657        26,400        1,175,281  
     2018        409,001           139,986        199,987        355,910        26,382        1,131,266  
     2017        405,386        4,616        336,718        195,372        390,743        28,097        1,360,932  

 

(1)

Mr. Bowman joined the Company as CFO in May 2019 succeeding Mr. DeProspero who served as Interim CFO from August 2018 until Mr. Bowman’s appointment. Mr. DeProspero then became the Company’s SVP of Supply Chain and Business Development.

 

(2)

Mr. Gleason departed the Company on April 30, 2020. Mr. Gleason received an additional payment of $7,885 in salary in fiscal 2019. In connection with his separation from the Company in April 2020, Mr. Gleason received a one-time RSU grant valued at $150,000, as consideration for his bonus earned for fiscal 2019 and a prorated portion of his target bonus for fiscal 2020. The portion of the award associated with Mr. Gleason’s fiscal 2019 bonus is reflected in the “Non-Equity Incentive Compensation” column.

 

(3)

The following salary deferrals were made under the SERP in fiscal 2019: Mr. Jenkins, $77,135; Mr. Bowman, $2,100; Mr. DeProspero, $14,360; Ms. Manning, $93,346; and Mr. Gleason, $44,942.

 

(4)

Amounts in this column reflect the taxable value of a gift awarded to each executive officer by Mr. King in fiscal 2017. The amount listed for Mr. DeProspero in fiscal 2018 bonuses are for his service as interim CFO in lieu of a base salary increase.

 

(5)

Amounts in this column includes the aggregate grant date fair value of performance RSUs, at target, calculated in accordance with ASC 718. The discussion of the assumptions used for purposes of valuation of RSUs in fiscal 2019 appears in Note 8: Stockholders’ Equity, Share-Based Compensation, to our consolidated financial statements included in our Annual Report on Form 10-K. The grant date fair value for performance RSUs is reported based upon the probable outcome of the performance conditions on the grant date in accordance with SEC rules. The value of the RSUs granted in fiscal 2019, assuming achievement of the maximum performance level of 200% and based on the Company’s stock price on the date the grant was approved, would have been: Mr. Jenkins, $1,443,732; Mr. Bowman, $318,490; Mr. DeProspero, $87,443; Ms. Manning, $492,717; Mr. Mulleady, $346,049; and Mr. Gleason, $286,927.

 

(6)

Amounts in this column reflect the aggregate grant date fair value of options calculated in accordance with ASC 718. The discussion of the assumptions used for purposes of valuation of options granted in fiscal 2019 appears in Note 8: Stockholders’ Equity, Share-Based Compensation, to our consolidated financial statements included in our Annual Report on Form 10-K.

 

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(7)

Amounts in this column for 2019 reflect annual incentive earned for fiscal 2019 under the Executive Incentive Plan and the cash portion of the Long Term Incentive Plan by each NEO in 2017. As described in the Compensation Discussion & Analysis, annual incentive payments for fiscal 2019 were delayed and were settled in stock rather than cash. Amounts in this column for 2018 reflect annual incentive earned for fiscal 2018 under the Executive Incentive Plan and the cash portion of the Long Term Incentive Plan awarded to each NEO in 2016. Amounts in this column for 2017 reflect annual incentive earned for fiscal 2017 under the Executive Incentive Plan and the cash portion of the Long Term Incentive Plan awarded to each NEO in 2015.

 

(8)

The following table sets forth the components of “All Other Compensation” for fiscal 2019:

 

Name

   Perquisite
Allowance
($)
     Company
Contributions To
Retirement &
401(k) Plans(a)
($)
     Executive
Physical
($)
     Non-Qualified
Moving
Expenses
     Total
($)
 

Brian A. Jenkins

     30,000        12,982        0        0        42,982  

Scott Bowman

     18,750        831        0        35,457        55,038  

Joe DeProspero

     23,846        4,787        0        0        28,633  

Sean Gleason

     25,000        7,674        0        0        32,674  

Margo L. Manning

     25,000        8,276        0        0        33,276  

John B. Mulleady

     25,000        1,400        0        0        26,400  

 

  (a)

Amounts include Company contributions to the 401(k) and SERP that were based on the Company’s performance during fiscal 2019 and the Company’s fixed contributions to the 401(k) plan and SERP that were made during fiscal 2019.

 

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Grants of Plan-Based Awards in Fiscal 2019

 

The following table shows the grants of plan-based awards to the named executive officers in fiscal 2019.

 

        Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
          Estimated Future Payouts
Under Equity
Incentive Plan Awards
          All Other
Stock
Awards: # of
Shares of
Stock or
Units
    All Other
Option
Awards: # of
Securities
Underlying
Options
    Exercise
or Base
Price of
Option
Award
($/
Share)
    Grant
Date Fair
Value of
Stock
and
Option
Awards
($)
 

Name

       Grant
Date
    Threshold
($)
    Target
($)
    Maximum
($)
           Threshold
(#)
    Target
(#)
    Maximum
(#)
        

Brian A. Jenkins

  Cash
Incentive(1)
    N/A       341,640       780,000       1,560,000                    
  Performance
Cash(2)
    4/11/2019       154,688       309,375       618,750                    
  RSUs(3)     4/11/2019               6,984       13,968       27,936               721,866  
  Stock
Options
    4/11/2019                         61,420       51.68       1,031,242  

Scott Bowman

  Cash
Incentive(1)
    N/A       119,438       273,000       546,000                    
  Performance
Cash(2)
    5/6/19       34,125       68,250       136,500                    
  RSUs(3)     5/6/19               1,362       2,724       5,448               159,245  
  Stock
Options
    5/6/19                         11,708       58.46       227,486  
  RSUs     5/6/19                 1,710               58.46       99,967  

Joe DeProspero

  Cash
Incentive(1)
    N/A       65,750       150,000       300,000                    
  Performance
Cash(2)
    4/11/2019       9,375       18,750       37,500                    
  RSUs(3)     4/11/2019               423       846       1,692               43,721  
  Stock
Options
    4/11/2019                         3,722       51.68       62,492  

Sean Gleason

  Cash
Incentive(1)
    N/A       92,250       246,000       492,000                    
  Performance
Cash(2)
    4/11/2019       30,750       61,500       123,000                    
  RSUs(3)     4/11/2019               1,388       2,776       5,552               143,464  
  Stock
Options
    4/11/2019                         12,209       51.68       204,989  

Margo L. Manning

  Cash
Incentive(1)
    N/A       162,750       372,000       744,000                    
  Performance
Cash(2)
    4/11/2019       52,800       105,600       211,200                    
  RSUs(3)     4/11/2019               2,384       4,767       9,534               246,359  
  Stock
Options
    4/11/2019                         20,964       51.68       351,986  

John B. Mulleady

  Cash
Incentive(1)
    N/A       77,456       247,200       494,400                    
  Performance
Cash(2)
    4/11/2019       37,080       74,160       148,320                    
  RSUs(3)     4/11/2019               1,674       3,348       6,696               173,025  
    Stock
Options
    4/11/2019                                                                               14,723       51.68       247,199  

 

(1)

Reflect annual Executive Incentive Plan award opportunity described under “Annual Incentive Awards” above and actual payouts are recorded under “Non-Equity Incentive Plan Compensation” in the “2019 Summary Compensation Table.”

 

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(2)

The amounts shown in the “Threshold” column reflect the minimum payment level under the Company’s Performance Cash component of the LTIP. The minimum award level is 50% of target (“Target”) and the maximum award is 200% of target (“Maximum”). Threshold is represented with the minimum possible payout, but zero payout is possible if threshold performance measures are not met.

 

(3)

The shares shown in the “Threshold” column reflect the minimum payment level under the Company’s RSU component of the 2014 Stock Incentive Plan. The minimum award level is 50% of target (“Target”) and the maximum award is 200% of target (“Maximum”). Threshold is represented with the minimum possible payout, but zero payout is possible if threshold performance measures are not met.

 

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Outstanding Equity Awards at Fiscal Year-End 2019

 

 

     Option Awards            Stock Awards  

NAME

   EXERCISABLE     UNEXERCISABLE     OPTION
EXERCISE
PRICE
($)
     OPTION
EXPIRATION
DATE
            INCENTIVE PLAN
AWARDS:
NUMBER OF
UNEARNED
SHARES, UNITS
OR OTHER
RIGHTS THAT
HAVE NOT YET
VESTED
    INCENTIVE PLAN
AWARDS:
MARKET OR
PAYOUT VALUE
OF UNEARNED
SHARES, UNITS
OR OTHER
RIGHTS THAT
HAVE NOT
VESTED(19)
($)
 

Brian A. Jenkins

     0       61,420 (1)      51.68        4/11/2029          13,968 (9)      616,827  
     10,851 (2)      21,701 (3)      41.65        4/12/2028          33,590 (10)      1,483,334  
     19,770 (2)      9,885 (4)      49.59        9/7/2027          16,806 (11)      742,153  
     9,586 (2)      4,793 (5)      59.67        4/7/2027          5,041 (12)      222,611  
     25,227 (2)      0       39.10        4/7/2026          7,226 (13)      319,100  
     22,506 (2)      0       31.71        4/9/2025         
     61,183 (2)      0       16.00        10/9/2024         
     38,808 (6)      0       4.44        6/1/2020         

Scott Bowman

     0       11,708 (7)      58.46        5/6/2029          2,724 (9)      120,292  
                 1,710 (14)      75,514  

Joe DeProspero

     0       3,722 (1)      51.68        4/11/2029          846 (9)      37,359  
     895 (2)      1,790 (3)      41.65        4/12/2028          1,386 (11)      61,206  
     1,228 (2)      613 (5)      59.67        4/7/2027          924 (13)      40,804  
     2,092 (2)      0       39.10        4/7/2026         
     2,330 (2)      0       31.71        4/9/2025         
     11,249 (8)      0       9.34        9/27/2023         
     4,244 (8)      0       6.27        12/5/2022         

Sean Gleason

     0       12,209 (1)      51.68        4/11/2029          2,776 (9)      122,588  
     3,744 (2)      7,486 (3)      41.65        4/12/2028          5,798 (11)      256,040  
     4,613 (2)      2,306 (4)      49.59        9/7/2027          1,176 (15)      51,932  
     3,595 (2)      1,797 (5)      59.67        4/7/2027          2,708 (13)      119,585  
     16,041 (2)      0       39.10        4/7/2026          10,504 (16)      463,857  
     8,305 (2)      0       31.71        4/9/2025         
     17,633 (2)      0       16.00        10/9/2024         

Margo L. Manning

     0       20,964 (1)      51.68        4/11/2029          4,767 (9)      210,511  
     8,138 (2)      16,276 (3)      41.65        4/12/2028          12,604 (11)      556,593  
     9,710 (2)      4,855 (5)      59.67        4/7/2027          5,446 (17)      240,495  
     14,275 (2)      0       39.10        4/7/2026          7,320 (13)      323,251  
     7,234 (2)      0       31.71        4/9/2025         
     17,396 (2)      0       16.00        10/9/2024         
     5,683 (6)      0       5.07        3/8/2022         

John B. Mulleady

     0       14,723 (1)      51.68        4/11/2029          3,348 (9)      147,848  
     4,340 (2)      8,680 (3)      41.65        4/12/2028          6,722 (11)      296,844  
     6,081 (2)      3,040 (5)      59.67        4/7/2027          3,351 (18)      147,980  
     14,230 (2)      0       39.10        4/7/2026          4,584 (13)      202,429  
     14,282 (2)      0       31.71        4/9/2025         
     38,225 (2)      0       16.00        10/9/2024         
       20,953 (8)      0       9.34        9/27/2023                           

 

(1)

These options represent unvested service-based options granted under the 2014 Stock Incentive Plan. One-third of these options will vest on each of April 11, 2020, April 11, 2021 and April 11, 2022.

 

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(2)

These options represent vested service-based options granted under the 2014 Stock Incentive Plan.

 

(3)

These options represent unvested service-based options granted under the 2014 Stock Incentive Plan. Half of these options will vest on each of April 12, 2020 and April 12, 2021.

 

(4)

These options represent unvested service-based options granted under the 2014 Stock Incentive Plan to Mr. Jenkins and Mr. Gleason in recognition of their respective strong performance and contribution to the Company’s success. These options will vest on September 7, 2020.

 

(5)

These options represent unvested service-based options granted under the 2014 Stock Incentive Plan. These options will vest on April 7, 2020.

 

(6)

These options represent vested performance-based options granted under the 2010 Stock Incentive Plan.

 

(7)

These options represent unvested service-based options granted under the 2014 Stock Incentive Plan. One-third of these options will vest on each of May 6, 2020, May 6, 2021 and May 6, 2022.

 

(8)

These options represent vested service-based options granted under the 2010 Stock Incentive Plan.

 

(9)

These grants reflect target RSU awards under the Fiscal 2019-2021 LTIP.

 

(10)

This grant reflects an award to Mr. Jenkins in connection with his succession to CEO of the Company. These RSUs vest in equal installments on June 11, 2021 and June 11, 2022.

 

(11)

These grants reflect maximum RSU awards under the Fiscal 2018-Fiscal 2020 LTIP.

 

(12)

This grant reflects an award of RSUs to Mr. Jenkins in recognition of his strong performance and contribution to the Company’s success. These RSUs vest in equal installments on September 7, 2021 and September 7, 2022.

 

(13)

These grants reflect maximum RSU awards under the Fiscal 2017-Fiscal 2019 LTIP.

 

(14)

This grant reflects an award of RSUs to Mr. Bowman in connection with his joining the Company. One-third of these RSUs vest in on each of May 6, 2020, May 6, 2021 and May 6, 2022.

 

(15)

This grant reflects an award of RSUs to Mr. Gleason in recognition of his strong performance and contribution to the Company’s success. These RSUs vest in equal installments on September 7, 2021 and September 7, 2022.

 

(16)

This grant reflects an award of RSUs to Mr. Gleason in recognition of his strong performance and contribution to the Company’s success. These RSUs vest in equal installments on July 18, 2020 and July 18, 2021.

 

(17)

This grant reflects an award of RSUs to Ms. Manning in recognition of her strong performance and contribution to the Company’s success. These RSUs vest in equal installments on April 7, 2021 and April 7, 2022.

 

(18)

This grant reflects an award of RSUs to Mr. Mulleady in recognition of his strong performance and contribution to the Company’s success. These RSUs vest in equal installments on April 7, 2021 and April 7, 2022.

 

(19)

The market value is equal to the number of shares underlying the units based on achieving target or maximum performance goals, as applicable, multiplied by the closing market price of the Company’s common stock on January 31, 2020, the last trading day of the Company’s fiscal year. Actual payout and market value is dependent on achievement in any remaining term of the measurement period. Subsequent to the end of the 2019 fiscal year, attainment under the 2017 Long Term Incentive Plan was calculated. The actual number of shares awarded to each NEO under that plan are detailed in the table in the 2017 Long Term Incentive Award Payout discussion on p. 40.

Fiscal 2019 Option Exercises and Stock Vested

 

 

     OPTION AWARDS             STOCK VESTED  

NAME

   Number of Shares
Acquired on Exercise
     Value Realized on Exercise
($)
             Number of Shares
Acquired on Exercise(1)
     Value Realized on Exercise
($)
 

Brian A. Jenkins

                      9,540        $496,175  

Scott Bowman

                              

Joe DeProspero

     1,500        $52,659           791        $41,140  

Sean Gleason

     19,400        $816,491           6,067        $315,545  

Margo L. Manning

     18,000        $857,745           5,397        $280,698  

John B. Mulleady

     22,500        $765,222                 5,381        $279,866  

 

(1)

These shares do not reflect reductions for shares withheld for taxes at time of distribution.

 

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2019 Nonqualified Deferred Compensation

 

The SERP is a defined contribution plan designed to permit a select group of management or highly compensated employees to set aside base salary on a pre-tax basis. The SERP has a variety of investment options similar in type to our 401(k) plan. Each pay period, the Company matches 25% of the employee’s contributions, up to the first 6% of salary deferred. At the end of the year, if the Company’s EBITDA target is forecasted to be met, the Company may contribute an additional amount, equal to the employer match contributed each pay period. In 2019, the Compensation Committee determined that EBITDA was not forecasted to be met and, therefore, did not authorize the payment of the additional amount to be contributed to each eligible participant’s account. Employer contributions to a participant’s account vest in equal portions over the first five years a participant is eligible to participate in the SERP and become immediately vested upon termination of a participant’s employment on or after age 65 or by reason of the participant’s death or disability, and upon a change of control (as defined in the SERP). Pursuant to Section 409A of the Code, however, such distribution cannot be made to certain employees of a publicly traded corporation before the earlier of six months following the employee’s termination date or the death of the employee. Employer contributions are fully vested after five years of eligibility. Withdrawals from the SERP may be permitted in the event of an unforeseeable emergency.

The following table shows contributions to each NEO’s deferred compensation account in fiscal 2019 and the aggregate amount of such officer’s deferred compensation as of February 2, 2020.

 

Name

   Executive
Contributions in Last
Fiscal Year(1)
($)
     Registrant
Contributions in Last
Fiscal Year(2)(3)
($)
     Aggregate
Earnings in Last
Fiscal Year(3)
($)
   

Fees and
Adjustments

($)

    Aggregate Balance at
Last Fiscal Year-
End(4)
($)
 

Brian A. Jenkins

   $ 77,135      $ 11,570      $ 60,417     $ 738     $ 596,062  

Scott Bowman

   $ 2,100      $ 525      $ (63   $ 0     $ 2,562  

Joe DeProspero

   $ 14,360      $ 3,590      $ 52,954     $ (277   $ 308,614  

Sean Gleason

   $ 44,942      $ 6,268      $ 50,148     $ 505     $ 393,512  

Margo L. Manning

   $ 93,346      $ 6,867      $ 137,261     $ 2,068     $ 1,064,647  

John B. Mulleady

   $ 0      $ 0      $ 0     $ 0     $ 0  

 

(1)

Amounts are included in the “Salary” column of the “2019 Summary Compensation Table.”

 

(2)

Amounts shown are matching contributions pursuant to the deferred compensation plan. These amounts are included in the “All Other Compensation” column of the “2019 Summary Compensation Table.”

 

(3)

No amount reported in this column was reported as compensation to the officer in the “2019 Summary Compensation Table” in previous years.

 

(4)

The portion of these amounts derived from executive contributions made in previous years was included in the “Salary” column of the “Summary Compensation Table” in the years when the contributions were made. The portions of these amounts derived from matching contributions made in previous years were included in the “All Other Compensation” column of the “Summary Compensation Table” in the years when the executive contributions were made.

Employment Agreements

 

We have entered into employment agreements with our NEOs to reflect the then current compensation arrangements of each of the NEOs and to include additional restrictive covenants, including a one-year non-competition provision and a two-year non-solicitation and non-hire provision. The employment agreement for each NEO provides for an initial term of one year, subject to automatic one-year renewals unless terminated earlier by the NEO or us. Under the terms of the employment agreements, each NEO is entitled to a minimum base salary and may receive an annual salary increase commensurate with such officer’s performance during the year, as determined by our Board of Directors. Our NEOs are also entitled to participate in the Executive Incentive Plan, the 2014 Stock Incentive Plan and in any profit sharing, qualified and nonqualified retirement plans and any health, life, accident, disability insurance, sick leave, supplemental medical reimbursement insurance, or benefit plans or programs as we may choose to make available now or in the future. NEOs also receive an annual perquisite allowance. In addition, the employment agreements contain provisions providing for severance payments and continuation of benefits under certain circumstances including termination by us without Cause (as defined in the employment agreement), upon execution of a general release of claims in favor of us.

 

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Potential Payments Upon Termination or Change of Control

 

The following is a discussion of the rights of the NEOs under the 2010 Stock Incentive Plan, the 2014 Stock Incentive Plan and the employment agreements with the NEOs following a termination of employment or change of control.

Payments pursuant to 2010 Stock Incentive Plan

Pursuant to the 2010 Stock Incentive Plan, certain vested stock options shall terminate on the earliest of (a) the day on which the executive officer is no longer employed by us due to the termination of such employment for cause, (b) the thirty-first day following the date the executive officer is no longer employed by us due to the termination of such employment upon notice to us by the executive officer without good reason having been shown, (c) the 366th day following the date the executive officer is no longer employed by us by reason of death, disability, or due to the termination of such employment (i) by the executive officer for good reason having been shown or (ii) by us for reason other than for cause, or (d) the tenth anniversary of the date of grant. All options that are not vested and exercisable on the date of termination of employment shall immediately terminate and expire on such termination date. Following the adoption of the 2014 Stock Incentive Plan, no further grants of stock options, stock appreciation rights, restricted stock, other stock-based awards, or cash-based awards will be made pursuant to the 2010 Stock Incentive Plan.

Payments pursuant to 2014 Stock Incentive Plan

The following tables address grants under the 2014 Stock Incentive Plan.

Stock Options

 

Reason for Termination

   Unvested    Vested

For cause

  

Immediate forfeiture

  

Immediate forfeiture

Death or disability

  

Immediate vesting

  

Exercisable for earlier of (i) 1 year after death or disability or (ii) the remainder of option term

Retirement(1)

  

Continued vesting per grant terms

  

Exercisable for remainder of option term

Change in control(2)

  

Continued vesting per grant terms

  

Exercisable for remainder of option term

Any other reason

  

Immediate forfeiture

  

Exercisable for earlier of (i) 90 days from date of termination or (ii) the remainder of the option term

 

(1)

Retirement is defined as termination other than for cause after obtaining either the age of 60 plus 10 years of service or age 65.

 

(2)

Change in control is defined as termination without cause or for good reason within period from 90 days before to one year after a change of control in the Company. If all Stock Options and the Plan are terminated as part of the change in control of the Company, the above is not applicable.

 

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RSUs and Performance Cash

 

Reason for Termination

  Performance Based RSUs and Performance Cash   Time Based RSUs

For cause

 

Immediate forfeiture

 

Immediate forfeiture of unvested RSUs

Death or disability

 

Settlement based on actual performance for full performance period notwithstanding termination of service

 

Settlement prorated for term of service between grant date and death or disability(3)

Retirement(1)

 

Settlement based on actual performance for full performance period notwithstanding termination of service, prorated for term of service during performance period

 

Immediate forfeiture of unvested RSUs

Change in control(2)

 

Settlement based on actual performance for full performance period notwithstanding termination of service, prorated for term of service during performance period

 

Settlement prorated for term of service between grant date and termination of service(3)

Any other reason

 

Immediate forfeiture

 

Immediate forfeiture of unvested RSUs(3)

 

(1)

Retirement is defined as termination other than for cause after obtaining either the age of 60 plus 10 years of service or age 65.

 

(2)

Change in control is defined as termination without cause or for good reason within period from 90 days before to one year after a change of control in the Company.

 

(3)

Mr. Jenkins received a grant of time-based shares fiscal 2018. Under the terms of his award agreement, he is entitled to full settlement in the event of death or disability (notwithstanding termination of service), full settlement in the event of a change in control termination of service (notwithstanding termination of service), and a prorated settlement based on term of service between grant date and termination date of service in the event of a termination of service without cause or for good reason (notwithstanding termination of service).

If there is a change of control of the Company, then, unless prohibited by law, the Compensation Committee is authorized (but not obligated) to make adjustments to the terms and conditions of outstanding awards, including, without limitation, continuation or assumption of outstanding awards; substitution of new awards with substantially the same terms as outstanding awards; accelerated exercisability, vesting and/or lapse of restrictions for outstanding awards immediately prior to the occurrence of such event; upon written notice, provision that any outstanding awards must be exercised, to the extent then exercisable, during a specified period determined by the Compensation Committee (contingent upon the consummation of the change of control), following which unexercised awards shall terminate; and cancellation of all or any portion of outstanding awards for fair market value (which may be the intrinsic value of the award and may be zero); and cancellation of all or any portion of outstanding awards for fair value (as determined in the sole discretion of the Compensation Committee and which may be zero).

Under the 2014 Stock Incentive Plan, a change of control generally is triggered by the occurrence of any of the following: (i) an acquisition of 30% or more of the outstanding shares or the voting power of the outstanding securities generally entitled to vote in the election of directors; (ii) with certain exceptions, individuals on the Board of Directors on the date of effectiveness of the plan cease to constitute a majority of the Board of Directors; (iii) consummation of a reorganization, merger, amalgamation, statutory share exchange, consolidation or like event to which the Company is a party or a sale or disposition of all or substantially all of the Company’s assets, unless the Company’s shareholders continue to own more than 50% of the outstanding voting securities, no person beneficially owns 30% or more of the outstanding securities of the Company and at least a majority of the members of the Board of Directors after such event were members of the Board of Directors prior to the event; or (iv) a complete liquidation or dissolution of the Company.

Payments pursuant to Employment Agreements

Deferred Compensation. All contributions made by an executive officer to a deferred compensation account, and all vested portions of our contributions to such deferred compensation account, shall be disbursed to the executive officer upon termination of employment for any reason. Currently, only Messrs. Jenkins, Bowman, DeProspero, and Gleason and Ms. Manning have made contributions to a deferred compensation account.

 

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Resignation. If an executive officer resigns from employment with us, including for the purpose of retirement, such officer is not eligible for any further payments of salary, bonus, or benefits and such officer shall only be entitled to receive that compensation which has been earned by the officer through the date of termination. Notwithstanding the foregoing, the Company may, at its sole option, elect to provide payments and other severance benefits described below under “Involuntary Termination Not for Cause” and the officer shall execute a release of the Company.

Involuntary Termination Not for Cause. In the event of involuntary termination of employment other than for Cause (as defined in the employment agreements), an executive officer would be entitled to 12 months of severance pay at such officer’s then-current base salary (24 months of severance pay for Mr. Jenkins at his then current base salary plus his target bonus), the pro rata portion of the annual bonus, if any, earned by the officer for the then-current fiscal year (this amount is not applicable to Mr. Jenkins), 12 months continuation of such officer’s perquisite allowance, and monthly payments for a period of 12 months equal to the monthly premium required by such officers to maintain health insurance benefits provided by our group health insurance plan, in accordance with the requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985.

Termination for Cause. In the event of termination for Cause, the officer is not eligible for any further payments of salary, bonus, or benefits and shall be only entitled to receive that compensation which has been earned by the officer through the date of termination.

Termination for Good Reason. In the event the officer chooses to terminate his or her employment for reasons such as material breach of the employment agreement by us, relocation of the office where the officer performs his or her duties, assignment to the officer of any duties, authority, or responsibilities that are materially inconsistent with such officer’s position, authority, duties or responsibilities or other similar actions, such officer shall be entitled to the same benefits described above under “Involuntary Termination Not for Cause.”

Death or Disability. The benefits to which an officer (or such officer’s estate or representative) would be entitled in the event of death or disability are as described above under “Involuntary Termination Not for Cause.” However, the amount of salary paid to any such disabled officer shall be reduced by any income replacement benefits received from the disability insurance we provide.

 

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Information concerning the potential payments upon a termination of employment or change of control is set forth in tabular form below for each NEO. Information is provided as if the termination, death, disability or change of control (as defined in the 2014 Stock Incentive Plan) and certain other liquidity events had occurred as of February 2, 2020 (the last day of fiscal 2019).

 

Name

  Benefit   Resignation
($)
    Termination
W/Out
Cause($)
    Termination
With
Cause($)
    Termination
for Good
Reason($)
    Death/
Disability
($)
    Change in
Control
($)
 

Brian A. Jenkins

  Salary       1,560,000         1,560,000       1,560,000    
  Bonus(1)       780,000         780,000       780,000    
  Perquisite Allowance       30,000         30,000       30,000    
  H & W Benefits       22,791         22,791       22,791    
  Deferred Compensation     596,062       596,062       596,062       596,062       596,062       596,062  

Scott Bowman

  Salary       455,000         455,000       455,000    
  Bonus(1)       273,000         273,000       273,000    
  Perquisite Allowance       25,000         25,000       25,000    
  H & W Benefits       15,670         15,670       15,670    
  Deferred Compensation     2,562       2,562       2,562       2,562       2,562       2,562  

Joe DeProspero

  Salary       250,000         25,000       25,000    
  Bonus(1)       150,000         150,000       150,000    
  Perquisite Allowance       25,000         25,000       25,000    
  H & W Benefits       19,228         19,228       19,228    
  Deferred Compensation     308,614       308,614       308,614       308,614       308,614       308,614  

Sean Gleason

  Salary       410,000         410,000       410,000    
  Bonus(1)       246,000         246,000       246,000    
  Perquisite Allowance       25,000         25,000       25,000    
  H & W Benefits       22,791         22,791       22,791    
  Deferred Compensation     393,512       393,512       393,512       393,512       393,512       393,512  

Margo L. Manning

  Salary       465,000         465,000       465,000    
  Bonus(1)       372,000         372,000       372,000    
  Perquisite Allowance       25,000         25,000       25,000    
  H & W Benefits       22,791         22,791       22,791    
  Deferred Compensation     1,064,647       1,064,647       1,064,647       1,064,647       1,064,647       1,064,647  

John B. Mulleady

  Salary       412,000         412,000       412,000    
  Bonus(1)       247,200         247,200       247,200    
  Perquisite Allowance       25,000         25,000       25,000    
  H & W Benefits       15,670         15,670       15,670    
    Deferred Compensation     0       0       0       0       0       0  

 

(1)

Accrued and unpaid non-equity incentive compensation payable assuming target performance in fiscal 2019 pursuant to our Executive Incentive Plan.

 

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Equity Compensation Plan Information

 

The following table sets forth information concerning the shares of common stock that may be issued upon exercise of options under the 2010 Stock Incentive Plan and the 2014 Stock Incentive Plan as of February 2, 2020:

 

EQUITY COMPENSATION PLANS APPROVED BY

SECURITY HOLDERS

   NUMBER OF
SECURITIES TO
BE ISSUED
UPON EXERCISE
OF OUTSTANDING
OPTIONS,
WARRANTS AND
RIGHTS
    WEIGHTED-
AVERAGE
EXERCISE PRICE
OF OUTSTANDING
OPTIONS,
WARRANTS AND
RIGHTS
    NUMBER OF
SECURITIES
REMAINING
AVAILABLE FOR
FUTURE ISSUANCE
UNDER EQUITY
COMPENSATION
PLANS
 

2010 Stock Incentive Plan

     266,900     $ 6.72       0  

2014 Stock Incentive Plan

     1,540,310 (1)    $ 36.97 (2)      1,319,813  
  

 

 

     

 

 

 

Total plans

     1,807,210     $ 31.89 (2)      1,319,813  

 

(1)

Includes 127,866 performance-based restricted stock units and assumes shares issued upon vesting of performance-based units vest at 100% of target number of units. Actual number of shares issued on vesting of performance units could be a minimum award level of 50% to a maximum award level of 200% of target, but zero payout is possible if threshold measures are not met. The award level is based on actual performance over the three-year vesting period compared to target performance.

 

(2)

The weighted average exercise price is calculated based solely on outstanding stock options. It does not take into account the shares of our common stock underlying restricted stock units, which have no exercise price.

 

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TRANSACTIONS WITH RELATED PERSONS

We have a Related Party Transaction Policy that provides for timely internal review of prospective transactions with related persons, as well as approval or ratification, and appropriate oversight and public disclosure, of such transactions. The Related Party Transaction Policy generally covers transactions with the Company, on the one hand, and a director or executive officer of the Company, a nominee for election as a director of the Company, any security holder of the Company that owns (owns of record or beneficially) five percent or more of any class of the Company’s voting securities and any immediate family member of any of the foregoing persons, on the other hand. The Related Party Transaction Policy is administered by our Audit Committee.

The Related Party Transaction Policy also supplements the provisions of our Code of Business Conduct and Ethics concerning potential conflict of interest situations, which, pursuant to its terms, provides that unless a written waiver is granted (as explained below), employees may not (a) perform services for or have a financial interest in a private company that is, or may become, a supplier, customer or competitor of us; (b) perform services for or own more than 1% of the equity of a publicly traded company that is, or may become, a supplier, customer or competitor of us or (c) perform outside work or otherwise engage in any outside activity or enterprise that may interfere in any way with job performance or create a conflict with our best interests. Employees are under a continuing obligation to disclose to their supervisors any situation that presents the possibility of a conflict or disparity of interest between the employee and us. An employee’s conflict of interest may only be waived if both the legal department and the employee’s supervisor waive the conflict in writing. An officer’s conflict of interest may only be approved pursuant to the Related Party Transaction Policy.

In fiscal 2019, the Company and its officers and directors did not engage in any reportable related party transactions nor were any waivers granted on conflicts of interest.

REPORT OF THE AUDIT COMMITTEE

We have reviewed and discussed with management and KPMG, the independent registered public accounting firm, our audited financial statements as of and for the fiscal year ended February 2, 2020. We have also discussed with KPMG the matters required to be discussed by Auditing Standard No. 1301, “Communications with Audit Committees,” as adopted by the Public Company Accounting Oversight Board (“PCAOB”).

We have received and reviewed the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding KPMG’s communications with the Audit Committee concerning independence, have considered the compatibility of non-audit services with the firm’s independence, and discussed with the auditors the firm’s independence.

Based on the reviews and discussions referred to above, we have recommended to the Board of Directors that the financial statements referred to above be included in our Annual Report on Form 10-K.

 

Kevin M. Sheehan, Chair

Victor L. Crawford

Hamish A. Dodds

Jonathan S. Halkyard

 

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities and Exchange Act of 1934 and SEC rules require our directors, executive officers and persons who own more than 10% of any class of our common stock to file reports of their ownership and changes in ownership of our common stock with the Securities and Exchange Commission. During fiscal 2019, the Company believes that all reports were timely filed by its directors and executive officers, except for a Form 4/A filing on February 25, 2020, reporting the withholding of stock for tax purposes on April 11, 2019, on behalf of Margo Manning.

SHAREHOLDER PROPOSALS

Shareholder proposals, including director nominees, for inclusion in the Company’s Proxy Statement and a form of proxy relating to the Company’s 2021 annual meeting of shareholders must provide written notice of such proposal to the Secretary of the Company at the principal executive offices of the Company no later than the close of business on January 13, 2021, assuming the Company does not change the date of the 2020 annual meeting of shareholders by more than 30 days before or 90 days after the anniversary of the Annual Meeting. Any matter so submitted must comply with the other provisions of the Company’s bylaws (current copies of the Company’s bylaws are available at no charge from the Secretary of the Company and may also be found in the Company’s public filings with the SEC) and be submitted in writing to the Secretary at the principal executive offices.

In addition, to properly bring any shareholders proposals, including director nominees, at the Company’s 2020 annual meeting of shareholders, shareholders must provide written notice of such proposal to the Secretary of the Company at the principal executive offices of the Company no later than the close of business on March 25, 2021, and not earlier than the close of business on February 23, 2021, assuming the Company does not change the date of the 2021 annual meeting of shareholders by more than 30 days before or 90 days after the anniversary of the Annual Meeting. Any written notice so submitted must comply as to form and substance with the other provisions of the Company’s bylaws and must be submitted in writing to the Secretary at the principal executive offices.

OTHER BUSINESS

The Board does not presently intend to bring any other business before the Annual Meeting, and, so far as is known to the Board, no matters are to be brought before the Annual Meeting except as specified in the Notice of Annual Meeting. As daily business may properly come before the Annual Meeting, however, it is intended that proxies, in the form enclosed, will be voted in respect thereof in accordance with the judgment of the persons voting such proxies.

Whether or not you expect to attend the meeting, please vote via the Internet, by phone, or by requesting, completing and mailing a paper proxy card, so that your shares may be represented at the meeting.

WHERE YOU CAN FIND MORE INFORMATION

We will provide, without charge, on the written request of any shareholder, a copy of our 2019 Annual Report on Form 10-K and Proxy Statement. Shareholders should direct such requests to the Company’s Corporate Secretary at 2481 Mañana Drive, Dallas, TX 75220. Our SEC filings are available to the public in the SEC’s website at www.sec.gov or at www.daveandbusters.com. Our 2019 Annual Report on Form 10-K and other information on our website and the SEC’s website are not incorporated by reference in this Proxy Statement.

 

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DAVE & BUSTERS ENTERTAINMENT, INC.

PROXY STATEMENT

FAQ’S ABOUT THE MEETING AND VOTING