2021 performance (FY21 Tranche) and the third tranche earned based on fiscal 2022 performance (FY22 Tranche).
In order to earn shares under the FY20 Tranche, the Committee set a diluted earnings per share target of $0.70 per share, with maximum performance at
$0.78 per share and threshold performance of $0.62 per share. Actual fiscal 2020 adjusted diluted earnings per share was $0.72 per share, resulting in a FY20 Tranche payout of 124% of target. GAAP diluted EPS was adjusted in accordance with the
requirements of the incentive plan, for purchase accounting net charges related to the Pura Vida acquisition and charges related to Project Novus.
At the time of grant, it was determined that target performance for the FY21 Tranche was 110% of actual fiscal 2020 diluted earnings per share and for
the FY22 Tranche was 110% of actual fiscal 2021 adjusted diluted earnings per share. As a result of the COVID-19 pandemic, the Committee determined to remeasure the FY21 tranche target to be 110% of actual Q2
to Q4 fiscal 2020 earnings per share, as adjusted.
Adjusted diluted earnings per share for Q2 to Q4 in fiscal 2021 of $0.93 exceeded the target
earnings per share of $0.88 resulting in a payout of 110% for the FY21 Tranche. GAAP diluted EPS was adjusted in accordance with the requirements of the incentive plan, for intangible asset amortization, store impairment charges, COVID-19-related charges, and an adjustment to the earn-out liability related to the Pura Vida acquisition.
Adjusted diluted earnings per share for fiscal 2022 of $0.66 fell above the threshold performance level but below the target performance level of $0.69
per share, resulting in a payout of 73% for the FY22 Tranche. GAAP diluted EPS of $0.52 was adjusted in accordance with the requirements of the incentive plan, for incremental expense associated with the expiration of the GSP tariff relief,
intangible asset amortization and store impairment charges.
Therefore, in total, Mr. Wallstrom, Mr. Enwright, Mr. Hull, Ms. Mac
Cabe and Ms. Trypus earned 42,963 shares, 9,764 shares, 15,621 shares, 12,693 shares, and 8,786 shares pursuant to the FY20, FY21, and FY22 Tranches of the fiscal 2020 grant, respectively.
BENEFITS
The NEOs are eligible for the same
level and offering of benefits available to other employees. Our benefits, such as our basic health benefits, 401(k) plan, life insurance, paid time off, matching charitable gifts program, and
discounts on certain Company products, are intended to provide a stable array of support to our employees and their families throughout various stages of their careers, and these core benefits
are provided to all full-time employees. The 401(k) plan allows participants to defer amounts of their annual compensation before taxes, up to the cap set by the Internal Revenue Code, which was $19,500 per person for calendar year 2021 (or $26,000
for employees over age 50). Employees elective deferrals are immediately vested and non-forfeitable upon contribution to the 401(k) plan. For fiscal 2022, we provided matching contributions equal to 100%
for the first 3% of an employees individual contribution and 50% for the next 2% of individual contributions, for a maximum employer match of 4% of individual contributions, subject to certain other limits, including vesting requirements.
AGREEMENT WITH NAMED EXECUTIVE OFFICER
Mr. Wallstroms Employment Agreement. Mr. Wallstroms employment agreement with the Company was effective
November 11, 2013 (the Employment Agreement) and automatically renewed for fiscal 2022. The Employment Agreement will renew automatically for successive one-year periods unless either the
Company or Mr. Wallstrom gives notice to the other of its or his intention not to renew.
Mr. Wallstroms annual base salary rate
during fiscal 2022 ranged from $850,000 to $871,250. Under his employment agreement, Mr. Wallstrom has a target annual fiscal bonus of 100% of his annual base salary rate, with a maximum annual cash bonus of up to 200% of his annual base salary
rate and he is also eligible for long-term incentive grants.
Mr. Wallstroms Employment Agreement contains
non-compete restrictions. During the period of his employment and for a period of two years following his termination, Mr. Wallstrom may not engage in, manage, join, or work for (as an employee,
consultant, or independent contractor) or permit the use of his name by, or provide financial or other assistance to, any competitor that engages in the design, production, marketing, and retailing of (i) handbags and other bags, and related
accessories or (ii) accessories such as jewelry, travel, and leisure items, and baby clothes and accessories. In order to be treated as a competitor pursuant to Mr. Wallstroms Employment Agreement, an enterprise would have to have
received in the prior fiscal year at least 25% of its revenues from the design, production, marketing and/or retailing of handbags, other bags and related accessories or more than 50% of its revenues from the combination of the design, production,
marketing, and/or retailing of