Business Context and Reporting Period
This Form 8-K Current Report was filed by GENESCO INC on October 26, 2006. The filing discloses the entry into material definitive agreements regarding executive compensation and director equity grants for the fiscal year ending February 2, 2008.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on compensation agreements and equity grant terms.
Material Changes and Agreements
Executive Compensation (Fiscal 2008)
On October 24, 2006, the Compensation Committee set annual base salaries and target incentive awards under the EVA Incentive Plan. Additionally, stock options and restricted stock were granted under the 2005 Equity Incentive Plan.
- Stock Options: Granted at an exercise price of $38.14 per share (closing price on the grant date). Options vest in four equal annual installments and expire on the tenth anniversary.
- Restricted Stock: Granted to executive officers, vesting in four equal annual installments subject to continued employment.
| Executive Officer | Base Salary | Target Incentive | Restricted Stock (Shares) | Stock Options |
|---|---|---|---|---|
| Hal N. Pennington (Chairman & CEO) | $750,000 | $598,958 | 26,469 | 17,547 |
| Robert J. Dennis (President & COO) | $575,000 | $402,500 | 14,758 | 9,784 |
| James C. Estepa (SVP) | $515,000 | $309,000 | 11,566 | 7,667 |
| James S. Gulmi (CFO) | $365,000 | $219,000 | 8,197 | 5,434 |
| Jonathan D. Caplan (SVP) | $300,000 | $180,000 | 6,737 | 4,466 |
| Kenneth Kocher (SVP) | $280,000 | $168,000 | 6,737 | 4,466 |
| Roger G. Sisson (SVP, Secretary & GC) | $260,000 | $130,000 | 5,005 | 3,318 |
| John W. Clinard (SVP) | $245,000 | $122,500 | 4,402 | 2,918 |
| Mimi Eckel Vaughn (SVP) | $245,000 | $122,500 | 4,402 | 2,918 |
Employment Protection Agreement
On October 25, 2006, the Company entered into an Employment Protection Agreement with Kenneth Kocher (Senior Vice President). The agreement provides for the continuation of employment for three years following a "Change in Control" and mirrors terms previously established for other vice presidents.
Director Restricted Stock Grants
On October 25, 2006, the Board authorized restricted stock grants to non-management directors effective February 5, 2007. Directors elected to exchange cash retainers and committee fees for restricted shares.
- Valuation: Shares issued equal to the cash amount forgone divided by 75% of the average closing price of the stock for the last five trading days of fiscal 2007.
- Vesting: Shares vest throughout the year at the same rate as the forgone fees would have been earned.
- Restrictions: Shares are non-transferable for three years post-grant unless the director ceases service.
| Director | Fee Exchanged |
|---|---|
| James S. Beard | $30,000 |
| James W. Bradford | $30,000 |
| Marty G. Dickens | $34,000 |
| Ben T. Harris | $30,000 |
| Kathleen Mason | $30,000 |
| William A. Williamson, Jr. | $30,000 |
| Matthew C. Diamond | $17,000 |
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on business outlook, or discussion of specific risks and contingencies beyond the standard vesting conditions tied to continued employment and service.
Investor Verification Checklist
- Verify the exact number of restricted shares issued to directors once the February 5, 2007, grant date valuation is calculated.
- Review the specific vesting schedules and performance metrics for the EVA Incentive Plan referenced in the 2005 10-K.
- Confirm the total dilution impact of the 17,547 to 26,469 stock options granted to top executives.
- Monitor the "Change in Control" definition within the Employment Protection Agreement for potential severance liabilities.